EXHIBIT 10.1
EXECUTION COPY
SENIOR SECURED CREDIT AGREEMENT
Dated as of April 17, 2006
by and among
OVERHILL FARMS, INC.
as the Borrower,
and
the LENDERS party hereto from time to time,
and
GUGGENHEIM CORPORATE FUNDING, LLC,
as Collateral Agent,
and
GUGGENHEIM CORPORATE FUNDING, LLC,
as Administrative Agent, Arranger and Syndication Agent
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS; CERTAIN TERMS
SECTION 1.01. Definitions...............................................................................1
SECTION 1.02. Terms Generally..........................................................................30
SECTION 1.03. Accounting and Other Terms...............................................................31
SECTION 1.04. Time References..........................................................................31
ARTICLE II
TOTAL FACILITY
SECTION 2.01. Revolving Loan Commitments...............................................................31
SECTION 2.02. Tranche A Term Loan Commitments..........................................................33
SECTION 2.03. Tranche B Term Loan Commitments..........................................................35
SECTION 2.04. Promise to Pay; Evidence of Debt.........................................................36
SECTION 2.05. Authorized Officers and Administrative Agent.............................................38
ARTICLE III
PAYMENTS AND OTHER COMPENSATION
SECTION 3.01. Prepayments; Reductions in Revolving Loan Commitments....................................38
SECTION 3.02. Payments.................................................................................41
SECTION 3.03. Taxes....................................................................................43
SECTION 3.04. Increased Capital........................................................................45
ARTICLE IV
INTEREST AND FEES
SECTION 4.01. Interest on the Loans and Other Obligations..............................................46
SECTION 4.02. Increased Costs..........................................................................47
SECTION 4.03. Break Funding Payments...................................................................48
SECTION 4.04. Fees.....................................................................................48
ARTICLE V
CONDITIONS TO LOANS
SECTION 5.01. Conditions Precedent to the Signing Date.................................................48
SECTION 5.02. Conditions Precedent to the Effective Date...............................................50
SECTION 5.03. Conditions Precedent to All Loans........................................................52
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties...........................................................52
ARTICLE VII
REPORTING COVENANTS
SECTION 7.01. Financial Statements.....................................................................59
SECTION 7.02. Other Financial Information..............................................................60
SECTION 7.03. Events of Default........................................................................61
SECTION 7.04. Lawsuits.................................................................................61
SECTION 7.05. Insurance................................................................................62
SECTION 7.06. Environmental Notices....................................................................62
SECTION 7.07. Labor Matters............................................................................63
SECTION 7.08. Other Information........................................................................63
ARTICLE VIII
AFFIRMATIVE COVENANTS
SECTION 8.01. Existence, etc...........................................................................63
SECTION 8.02. Powers; Conduct of Business..............................................................63
SECTION 8.03. Compliance with Laws, etc................................................................63
SECTION 8.04. Payment of Taxes and Claims..............................................................63
SECTION 8.05. Inspection of Property; Books and Records; Discussions...................................64
SECTION 8.06. Use of Proceeds..........................................................................64
SECTION 8.07. Condemnation.............................................................................64
SECTION 8.08. Maintenance of Properties................................................................64
SECTION 8.09. Maintenance of Insurance.................................................................65
SECTION 8.10. Obtaining of Permits, Etc................................................................65
SECTION 8.11. Environmental............................................................................65
SECTION 8.12. Further Assurances.......................................................................65
SECTION 8.13. Change in Collateral; Collateral Records.................................................66
SECTION 8.14. Landlord Waivers.........................................................................66
SECTION 8.15. Fiscal Year..............................................................................66
SECTION 8.16. Additional Guarantors....................................................................66
ARTICLE IX
NEGATIVE COVENANTS
SECTION 9.01. Liens, Sales of Accounts Receivable......................................................67
SECTION 9.02. Indebtedness.............................................................................67
SECTION 9.03. Fundamental Changes, Asset Sales, and Acquisitions.......................................67
SECTION 9.04. Change in Nature of Business.............................................................68
SECTION 9.05. Investments..............................................................................68
SECTION 9.06. Sale and Leaseback.......................................................................69
SECTION 9.07. Capital Expenditures.....................................................................69
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SECTION 9.08. Restricted Payments......................................................................70
SECTION 9.09. Federal Reserve Regulations..............................................................70
SECTION 9.10. Transactions with Affiliates.............................................................70
SECTION 9.11. Limitations on Dividends and Other Payment Restrictions Affecting Subsidiaries...........70
SECTION 9.12. Purchase of Wastewater Credits...........................................................71
SECTION 9.13. Modifications of Indebtedness, Organizational Documents and Certain Other
Agreements...............................................................................71
SECTION 9.14. Investment Company Act of 1940...........................................................71
SECTION 9.15. Securities Accounts......................................................................71
SECTION 9.16. Negative Pledges.........................................................................71
SECTION 9.17. Impairment of Security Interests.........................................................71
ARTICLE X
FINANCIAL COVENANTS
SECTION 10.01. Maximum Senior Debt to EBITDA Ratio......................................................72
SECTION 10.02. Maximum Total Debt to EBITDA Ratio.......................................................72
SECTION 10.03. EBITDA...................................................................................73
SECTION 10.04. Interest Coverage Ratio..................................................................73
SECTION 10.05. Fixed Charge Coverage Ratio..............................................................75
ARTICLE XI
EVENTS OF DEFAULT, RIGHTS AND REMEDIES
SECTION 11.01. Events of Default........................................................................75
ARTICLE XII
CASH MANAGEMENT
SECTION 12.01. Cash Management..........................................................................79
SECTION 12.02. Blocked Accounts.........................................................................79
SECTION 12.03. Xxxxx Fargo Securities Account...........................................................80
SECTION 12.04. Controlled Disbursement Account..........................................................80
ARTICLE XIII
THE AGENTS
SECTION 13.01. Appointment Powers and Immunities; Delegation of Duties, Liability of Agents.............80
SECTION 13.02. Reliance by Agents.......................................................................82
SECTION 13.03. Defaults.................................................................................82
SECTION 13.04. Rights as a Lender.......................................................................83
SECTION 13.05. Costs and Expenses; Indemnification......................................................83
SECTION 13.06. Non-Reliance on Agents and Other Lenders.................................................84
SECTION 13.07. Failure to Act...........................................................................84
SECTION 13.08. Resignation of Agent.....................................................................85
SECTION 13.09. Collateral Sub-Agents....................................................................85
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SECTION 13.10. Communications by Borrower...............................................................86
SECTION 13.11. Collateral Matters.......................................................................86
SECTION 13.12. Restrictions on Actions by the Agents and the Lenders; Sharing Payments..................87
SECTION 13.13. Several Obligations; No Liability........................................................87
ARTICLE XIV
MISCELLANEOUS
SECTION 14.01. Notices, Etc.............................................................................88
SECTION 14.02. Amendments, Etc..........................................................................89
SECTION 14.03. No Waiver; Remedies, Etc.................................................................91
SECTION 14.04. Expenses; Taxes, Attorneys' Fees.........................................................91
SECTION 14.05. Right of Set-off, Sharing of Payments, Etc...............................................93
SECTION 14.06. Severability.............................................................................94
SECTION 14.07. Replacement of Lenders...................................................................94
SECTION 14.08. Assignments and Participations...........................................................94
SECTION 14.09. Counterparts.............................................................................95
SECTION 14.10. GOVERNING LAW............................................................................96
SECTION 14.11. CONSENT TO JURISDICTION, SERVICE OF PROCESS AND VENUE....................................96
SECTION 14.12. WAIVER OF JURY TRIAL, ETC................................................................97
SECTION 14.13. Consent..................................................................................97
SECTION 14.14. Interpretation...........................................................................97
SECTION 14.15. Reinstatement; Certain Payments..........................................................97
SECTION 14.16. Indemnification..........................................................................98
SECTION 14.17. Interest.................................................................................99
SECTION 14.18. Records.................................................................................100
SECTION 14.19. Binding Effect..........................................................................100
SECTION 14.20. Confidentiality.........................................................................100
SECTION 14.21. Power of Attorney.......................................................................100
SECTION 14.22. Integration.............................................................................101
SECTION 14.23. Lender Advertising......................................................................101
SECTION 14.24. Common Enterprise.......................................................................102
SECTION 14.25. USA PATRIOT ACT.........................................................................102
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SENIOR SECURED CREDIT AGREEMENT
The Senior Secured Credit Agreement, dated as of April 17,
2006 (the "AGREEMENT"), by and among OVERHILL FARMS, INC., a corporation formed
under the laws of Nevada, as the borrower (the "BORROWER"); each of the lenders
that from time to time is a party hereto (such lenders, each individually a
"Lender" and collectively, the "LENDERS"); GUGGENHEIM CORPORATE FUNDING, LLC, a
limited liability company formed under the laws of the State of Delaware, as
administrative agent for the Lenders (in such capacity, together with its
successors and assigns, if any, in such capacity, the "ADMINISTRATIVE AGENT")
and as arranger and syndication agent for the Lenders; and GUGGENHEIM CORPORATE
FUNDING, LLC, a limited liability company formed under the laws of the State of
Delaware, as collateral agent for the Lenders (in such capacity, together with
its successors and assigns, if any, in such capacity, the "COLLATERAL AGENT").
RECITALS
WHEREAS, the Lenders, at the request of the Borrower, have
agreed to extend certain loans and extensions of credit to the Borrower, the
proceeds of which will be used, initially, to refinance existing debt of the
Borrower and to pay fees and expenses associated with such refinancing and,
subsequently, for working capital and general corporate purposes; and
WHEREAS, the Borrower has agreed to secure the Obligations as
provided hereunder and under the other Loan Documents (as defined below) by
granting to the Collateral Agent, as of the Effective Date, for itself and on
behalf of the Agents and the Lenders, a first priority Lien on substantially all
of its personal and real property (if any):
NOW THEREFORE, in consideration of the premises and the
covenants and agreements contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; CERTAIN TERMS
SECTION 1.01. DEFINITIONS. As used in this Agreement, the
following terms shall have the respective meanings indicated below, such
meanings to be applicable equally to both the singular and plural forms of such
terms:
"ABR APPLICABLE MARGIN" means, with respect to the Revolving
Loans only, the margin set forth in the table below opposite the applicable
Total Debt to EBITDA Ratio for the twelve month period ending on the last day of
the most recent fiscal quarter of the Borrower:
------------------------- ------------------------------ ----------------------
Total Debt to EBITDA Ratio Applicable Margin
------------------------- ------------------------------ ----------------------
Revolving Loan
------------------------- ------------------------------ ----------------------
Greater than 3.00:1.00 2.50%
------------------------- ------------------------------ ----------------------
Greater than or equal
to but less than or 2.00:1.00 2.25%
equal to 3.00:1.00
------------------------- ------------------------------ ----------------------
Less than 2.00:1.00 2.00%
------------------------- ------------------------------ ----------------------
"ABR LOANS" means Loans which bear interest at a rate
determined by reference to the Alternate Base Rate.
"ACCELERATION EVENT" has the meaning ascribed to such term in
SECTION 11.01.
"ACCOUNT" has the meaning ascribed to such term in the
Security Agreement.
"ACCOUNT DEBTOR" means any Person who is obligated on an
Account.
"ACTION" has the meaning ascribed to such term in SECTION
14.13.
"ADMINISTRATIVE AGENT" has the meaning ascribed to such term
in the introductory paragraph hereto.
"ADMINISTRATIVE AGENT ACCOUNT" means the account of the
Administrative Agent identified on SCHEDULE 1.01(A), or such other deposit
account as the Administrative Agent may from time to time specify in writing to
the Borrower and the Lenders.
"AFFILIATE", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to vote ten percent (10%) or more of the Securities
having voting power for the election of directors of such specified Person or
otherwise to direct or cause the direction of the management and policies of
such specified Person, whether through the ownership of voting Securities or by
contract or otherwise.
"AGENTS" means, together, the Administrative Agent and the
Collateral Agent.
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"AGENT-RELATED PERSONS" means each of the Agents and its
Affiliates, and the officers, directors, employees, counsel, agents, and
attorneys-in-fact of such Agent and its Affiliates.
"AGREEMENT" means this Senior Secured Credit Agreement,
together with all Exhibits and Schedules hereto, as such agreement may be
amended, supplemented or otherwise modified from time to time.
"ALTERNATE BASE RATE" means, for any day, a rate per annum
equal to the greater of (a) the Prime Rate in effect on such day and (b) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in
the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"APPLICABLE MARGIN" means (i) in the case of ABR Loans, the
ABR Applicable Margin and (ii) in the case of Eurodollar Loans, the Eurodollar
Applicable Margin.
"ASSIGNMENT AND ACCEPTANCE" means an Assignment and Acceptance
substantially in the form of EXHIBIT A attached hereto and made a part hereof
(with blanks appropriately completed) delivered to the Administrative Agent in
connection with an assignment of a Lender's interest under this Agreement in
accordance with SECTION 14.08.
"AUTHORIZED OFFICER" means, with respect to the Borrower, the
chief executive officer, chief administrative officer, chief financial officer,
vice president of financial compliance and reporting or chief accounting officer
or other officer with similar responsibility designated by the Board of
Directors of or similar governing body of the Borrower and identified in a
Secretary's certificate pursuant to SECTION 2.05.
"AVAILABILITY" means, at any particular time, the amount by
which the Revolving Loan Commitments at such time EXCEED the Revolving Credit
Obligations at such time.
"AVAILABILITY PERIOD" means the period from the Effective Date
to the Commitment Termination Date.
"BANKRUPTCY CODE" means Title 11 of the United States Code (11
U.S.C. xx.xx. 101 et seq.), as amended from time to time, and any successor
statute.
"BENEFIT PLAN" means an employee pension benefit plan,
excluding any Multiemployer Plan, which is covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the Code for which
the Borrower or any of its Subsidiaries or any of their ERISA Affiliates has
been an "employer" (as defined in Section 3(5) of ERISA) within the preceding
six years or has any liability.
"BLOCKED ACCOUNT" means a demand deposit account established
by one or more Loan Parties at a Blocked Account Bank that is the subject of a
Blocked Account Agreement.
"BLOCKED ACCOUNT AGREEMENT" means a Control Agreement, in form
and substance satisfactory to the Collateral Agent, among a Blocked Account
Bank, one or more Loan Parties and the Collateral Agent, as such agreement may
be amended, supplemented or otherwise modified from time to time.
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"BLOCKED ACCOUNT BANKS" means such banks or financial
institutions selected by the Borrower and reasonably acceptable to the
Collateral Agent.
"BORROWER" has the meaning ascribed to such term in the
introductory paragraph hereto.
"BUSINESS DAY" means a day, which is not a Saturday or a
Sunday or a legal holiday and on which banks are not required or permitted by
law or other governmental action to close (i) in New York, New York, or (ii) in
the case of LIBOR, in London, England.
"CAPITAL EXPENDITURES" means, with respect to any Person for
any period, the sum of the aggregate of all expenditures (whether such
expenditures are paid in cash or financed) by such Person and its Subsidiaries
arising during such period that, in accordance with GAAP, are or should be
included in "property, plant, equipment" account on its consolidated balance
sheet, including all Capitalized Lease Obligations, paid or payable during such
period, excluding in each case, any such expenditures made for the repair,
replacement or restoration of assets to the extent paid for by any insurance
policy or condemnation award to the extent such expenditures are permitted under
the Loan Documents.
"CAPITALIZED LEASE" means, with respect to any Person, any
lease of real or personal property by such Person as lessee which is required
under GAAP to be capitalized on the balance sheet of such Person.
"CAPITAL STOCK" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, and (ii) with
respect to any Person that is not a corporation, any and all partnership or
other equity interests of such Person, excluding in the case of clauses (i) and
(ii) above, any debt security that is exchangeable for or convertible into such
capital stock.
"CAPITALIZED LEASE OBLIGATIONS" means, with respect to any
Person, obligations of such Person and its Subsidiaries as lessee under
Capitalized Leases, and, for purposes hereof, the amount of any such obligation
shall be the capitalized amount thereof determined in accordance with GAAP.
"CASH EQUIVALENTS" means (i) marketable direct obligations
issued or unconditionally guaranteed by the United States Government or issued
by an agency thereof and backed by the full faith and credit of the United
States, in each case maturing within one (1) year after the date of acquisition
thereof; (ii) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any public
instrumentality thereof maturing within one hundred eighty (180) days after the
date of acquisition thereof and, at the time of acquisition, having one of the
two highest ratings obtainable from either S&P or Xxxxx'x (or, if at any time
neither S&P nor Xxxxx'x shall be rating such obligations, then from such other
nationally recognized rating services acceptable to the Administrative Agent)
and not listed in Credit Watch published by S&P ; (iii) commercial paper
maturing no more than two hundred seventy (270) days after the date of
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acquisition thereof and, at the time of acquisition, having a rating of at least
A-1 or P-1, respectively, from either S&P or Xxxxx'x (or, if at any time neither
S&P nor Xxxxx'x shall be rating such obligations, then the highest rating from
such other nationally recognized rating services acceptable to the
Administrative Agent); and (iv) domestic and Eurodollar certificates of deposit
or time deposits or bankers' acceptances maturing within one hundred eighty
(180) days after the date of acquisition thereof issued by any commercial bank
organized under the laws of the United States of America or any state thereof or
the District of Columbia having combined capital and surplus of not less than
$500,000,000 or by any Lender.
"CASH INTEREST EXPENSE" means, for any period, total interest
expense accrued for such period (including the interest component of Capital
Leases) of the Borrower and its consolidated Subsidiaries, if any, including,
without limitation, all commissions, discounts and other fees and charges owed
with respect to letters of credit and net costs under Hedging Agreements, but
excluding amortization of financing fees, interest paid in property other than
cash or any other interest expense not payable in cash, all as determined in
conformity with GAAP.
"CASUALTY" means any casualty, loss, damage, destruction or
other similar loss with respect to real or personal property or improvements.
"CERCLIS" means Comprehensive Environmental Response,
Compensation, and Liability Information System.
"CHANGE OF CONTROL" means the occurrence of any one or more of
the following:
(a) any Person or "group" (within the meaning of the Exchange
Act), including any group acting for the purpose of acquiring, holding, voting
or disposing of securities within the meaning of Rule 13d-5(b)(1) of the
Exchange Act, becomes the beneficial owner (as such term is defined in Rules
13d-3 and 13d-5 of the Exchange Act (provided that such Person will be deemed to
beneficially own all shares that such Person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time)),
directly or indirectly, of thirty-five percent (35%) or more of the Voting Stock
of the Borrower; or
(b) the sale, lease, transfer or other disposition of all or
substantially all of the assets of the Borrower or of any Subsidiary of the
Borrower, or the sale of any Subsidiary of the Borrower, in each case in one
transaction or a series of related transactions;
(c) the Borrower or any Subsidiary of the Borrower is acquired
by, or merges, consolidates, reorganizes or enters into any other transaction
having a similar legal effect with any other Person and, in any such event, any
Person who is not an Affiliate of the Borrower as of the Signing Date acquires
control of the Borrower or any Subsidiary of the Borrower (for purposes of this
clause (c) only, the term "control" means the power (A) to direct or cause the
direction of the management or policies of the Borrower or any such Subsidiary
of the Borrower, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, or (B) to vote thirty-five percent (35%)
or more of the Voting Stock of the Borrower or any Subsidiary of the Borrower);
or
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(d) Xxxxx Xxxxx ceases to be the chief executive officer of
the Borrower with general and active management of the business of the Borrower
and responsibility for overseeing that all orders and resolutions of the Board
of Directors of the Borrower are carried into effect, or if Xxxxx Xxxxx ceases
to be the chief executive officer of the Borrower due to his death or
disability, a replacement chief executive officer has not accepted his/her
appointment as chief executive officer of the Borrower within 90 days after
Xxxxx Xxxxx' death or disability; or
(e) during any period of two consecutive years, individuals
who at the beginning of such period constituted or, pursuant to applicable
contractual rights, would have constituted the Board of Directors of the
Borrower (together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of Borrower was
approved by a vote of the majority of the directors of the Borrower then still
in office who were either directors at the beginning of such period, or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of the Borrower; or
(f) (A) the institution by any Loan Party or any of its
Subsidiaries of a voluntary case under the Bankruptcy Code or any similar
proceeding under any other Requirements of Law, (B) the commencement against any
Loan Party or any of its Subsidiaries of an involuntary case seeking liquidation
or reorganization under the Bankruptcy Code or any similar proceeding under any
other Requirements of Law, or the commencement of an involuntary case or
proceeding seeking the appointment of a custodian or to take possession of all
or a substantial portion of its property or to operate all or a substantial
portion of its business, and either (w) any Loan Party or any such Subsidiary
consents to such involuntary case or proceeding, (x) the petition commencing
such involuntary case or proceeding is not timely controverted, (y) the petition
commencing such involuntary case or proceeding remains undismissed and unstayed
for a period of ninety (90) days or (z) an order for relief shall have been
issued or entered therein, or (C) the liquidation, winding up or insolvency of
any Loan Party or any of its Subsidiaries.
"COLLATERAL" means all of the property and assets and all
interests therein and proceeds thereof now owned or hereafter acquired by any
Person upon which a Lien is granted or purported to be granted by such Person as
security for all or any part of the Obligations.
"COLLATERAL ACCESS AGREEMENT" has the meaning ascribed to such
term in the Security Agreement.
"COLLATERAL AGENT" has the meaning ascribed to such term in
the introductory paragraph hereto.
"COLLATERAL DOCUMENTS" means the Security Agreements, the
Pledge Agreements, the UCC financing statements, the Control Agreements, the
Blocked Account Agreements, and any other documents granting a Lien upon the
Collateral as security for all or any part of the Obligations.
"COLLATERAL REPORTS" means reports prepared by the Collateral
Agent showing the results of audits pertaining to the Borrower's assets from
information furnished by or on behalf of the Borrower, after such Agent has
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exercised its rights of inspection pursuant to this Agreement, which Collateral
Reports shall be distributed to the Administrative Agent and the Lenders by the
Collateral Agent.
"COLLECTIONS" means all cash, checks, notes, instruments, and
other items of payment (including insurance and condemnation proceeds, cash
proceeds of sales and other voluntary or involuntary dispositions of property,
rental proceeds, and tax refunds).
"COMMITMENTS" means the Revolving Loan Commitments, the
Tranche A Term Loan Commitments and the Tranche B Term Loan Commitments.
"COMMITMENT TERMINATION DATE" means the day which is the
earlier of (a) five years from the Effective Date; (b) the termination of the
Revolving Loan Commitments pursuant to SECTION 11.01 and (c) the date of
termination in whole of the Revolving Loan Commitments pursuant to SECTION
3.01(A).
"COMMON STOCK" means the common stock, par value $0.01 per
share, of the Borrower.
"COMPLIANCE CERTIFICATE" has the meaning ascribed to such term
in SECTION 7.01(D).
"CONDEMNATION" means any taking by a Governmental Authority of
property or assets, or any part thereof or interest therein, for public or
quasi-public use under the power of eminent domain, by reason of any public
improvement or condemnation or in any other manner.
"CONTINGENT OBLIGATION" means, with respect to any Person, any
obligation of such Person guaranteeing or intended to guarantee any Indebtedness
("primary obligations") of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation, (i) the
direct or indirect guaranty, endorsement (other than for collection or deposit
in the ordinary course of business), co-making, discounting with recourse or
sale with recourse by such Person of the obligation of a primary obligor, (ii)
the obligation to make take-or-pay or similar payments, if required, regardless
of nonperformance by any other party or parties to an agreement, (iii) any
obligation of such Person, whether or not contingent, (A) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (B) to advance or supply funds (1) for the purchase or payment of any
such primary obligation or (2) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (C) to purchase property, assets, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary obligation
or (D) otherwise to assure or hold harmless the holder of such primary
obligation against loss in respect thereof, PROVIDED, HOWEVER, that the term
"Contingent Obligation" shall not include any products warranties extended in
the ordinary course of business. The amount of any Contingent Obligation shall
be deemed to be an amount equal to the stated or determinable amount of the
primary obligation with respect to which such Contingent Obligation is made (or,
if less, the maximum amount of such primary obligation for which such Person may
be liable pursuant to the terms of the instrument evidencing such Contingent
Obligation) or, if not stated or determinable, the maximum reasonably
anticipated liability with respect thereto (assuming such Person is required to
perform thereunder), as determined by such Person in good faith.
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"CONTRACTUAL OBLIGATION" means, as applied to any Person, any
provision of any securities issued by that Person or any indenture, mortgage,
deed of trust, security agreement, pledge agreement, guaranty, contract,
undertaking, agreement or instrument to which that Person is a party or by which
it or any of its properties is bound, or to which it or any of its properties is
subject.
"CONTROL AGREEMENT" means, with respect to a Securities
Account or a Deposit Account, an agreement, in form and substance reasonably
satisfactory to the Collateral Agent, which effectively gives "control" (as
defined in the UCC) to the Collateral Agent in such Securities Account and all
investment property contained therein or Deposit Account and all funds contained
therein, as the case may be.
"CONTROLLED DISBURSEMENT ACCOUNT" means the account of the
Borrower identified on SCHEDULE 1.01(B).
"CREDIT EXPOSURES" means (a) with respect to any Revolving
Lender, such Revolving Lender's Revolving Loan Exposure; (b) with respect to any
Tranche A Lender, such Tranche A Lender's Tranche A Term Loan Exposure; and (c)
with respect to any Tranche B Lender, such Tranche B Lender's Tranche B Term
Loan Exposure.
"CURRENT ASSETS" means, at any date of determination, all of
the assets of the Borrower and any of its Subsidiaries on a consolidated basis
which may properly be classified as current assets in accordance with GAAP,
EXCLUDING (a) cash and Cash Equivalents and (b) deferred income taxes to the
extent otherwise included in current assets.
"CURRENT LIABILITIES" means, at any date of determination, all
of the liabilities of the Borrower and any of its Subsidiaries on a consolidated
basis which may properly be classified as current liabilities in accordance with
GAAP, other than (i) any liabilities that are the current portion of
Indebtedness (including the Revolving Loan) classified as long term liabilities
in accordance with GAAP; and (ii) deferred income taxes to the extent otherwise
included in current liabilities.
"DEFAULT" means an event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"DEFAULTING LENDER" has the meaning ascribed to such term in
SECTION 2.01(F).
"DEFAULT RATE" has the meaning ascribed to such term in
SECTION 4.01(C).
"DEPOSIT ACCOUNT" means a "deposit account" as that term is
defined in the UCC.
"DISPOSITION" means any transaction, or series of related
transactions, pursuant to which any Loan Party conveys, sells, leases or
subleases, assigns, transfers or otherwise disposes of any part of its business,
property or assets (whether now owned or hereafter acquired) to any other
Person, in each case whether or not the consideration therefor consists of cash,
securities or other assets owned by the acquiring Person, excluding any sales of
Inventory in the ordinary course of business.
8
"DOLLAR", "DOLLARS" and the symbol "$" each means lawful money
of the United States of America.
"EBITDA" means, with respect to the Borrower for any period,
the Net Income of the Borrower and its consolidated Subsidiaries for such period
PLUS to the extent not otherwise included in the determination of Net Income for
such period, all proceeds of business interruption insurance policies, if any,
received during such period, PLUS, without duplication, the sum of the following
amounts of the Borrower for such period and to the extent deducted in
determining consolidated Net Income of the Borrower for such period: (A) Net
Interest Expense, (B) provisions for federal, state, local, and foreign income,
value added and similar taxes, (C) depreciation expense, (D) amortization
expense (including, without limitation, amortization of goodwill and other
intangible assets), (E) impairment of goodwill and other non-cash charges or
expenses, (F) non-cash extraordinary (on an after tax basis), unusual or
non-recurring losses and losses from discontinued operations, (G) net losses
attributable to Dispositions, (H) the amount of (x) any expense to the extent
that a corresponding amount is received in cash by the Borrower or one or more
of its Subsidiaries from a Person under any agreement providing for
reimbursement of expense, PROVIDED that such reimbursement is received not later
than the last day of the fourth fiscal quarter immediately following the
incurrence of the related expense, or (y) any expense with respect to liability
or casualty events, business interruption or product recalls, to the extent
covered by insurance, and (I) all other non-cash items (including, without
limitation, the cumulative effect from changes in accounting principles (on an
after tax basis)), MINUS, without duplication, the sum of the following amounts
of the Borrower for such period and to the extent included in determining Net
Income of the Borrower for such period: (1) extraordinary (on an after tax
basis) or non-recurring gains, (2) the amount of any cash received by the
Borrower as reimbursement for any expense included as an adjustment to EBITDA
pursuant to clause (H) above for any prior period, (3) net gains attributable to
Dispositions, and (4) all other non-cash items (including without limitation,
the cumulative effect from changes in accounting principles (on an after tax
basis)).
"EFFECTIVE DATE" has the meaning ascribed thereto in SECTION
5.02 hereof.
"ENVIRONMENTAL ACTIONS" means any complaint, summons,
citation, notice, directive, order, claim, litigation, investigation, judicial
or administrative proceeding, judgment, letter or other communication from any
Governmental Authority or other Person alleging violations of Environmental Laws
or Releases of Hazardous Materials on, in, at, to, from or under (i) any assets,
properties or businesses of the Borrower or any of its Subsidiaries or any of
their respective predecessor in interest; (ii) adjoining properties or
businesses; or (iii) any facilities which received Hazardous Materials generated
by the Borrower or any of its Subsidiaries or any of their respective
predecessor in interest, PROVIDED that the complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, judicial or administrative
proceeding, judgment, letter or other communication is in connection with such
Hazardous Materials.
9
"ENVIRONMENTAL LAWS" means the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. ss. 9601, ET SEQ.), the
Hazardous Materials Transportation Act (49 U.S.C. ss. 1801, ET SEQ.), the
Resource Conservation and Recovery Act (42 U.S.C. ss. 6901, ET SEQ.), the
Federal Clean Water Act (33 U.S.C. ss. 1251 ET SEQ.), the Clean Air Act (42
U.S.C. ss. 7401 ET SEQ.),the Toxic Substances Control Act (15 U.S.C. ss. 2601 ET
SEQ. and the Occupational Safety and Health Act (29 U.S.C. ss. 651 ET SEQ.) and
any other foreign law relating to thE environment (includes, without limitation,
laws relating to the storage, generation, use, handling, manufacture,
processing, labeling, advertising, sale, display, transportation, treatment,
reuse, recycling, release and disposal of Hazardous Materials), as such laws may
be amended or otherwise modified from time to time, and any other present or
future federal, state, provincial, local or foreign statute, ordinance, rule,
regulation, order, judgment, decree, permit, license or other binding
determination (including the common law) of any Governmental Authority imposing
liability or establishing standards of conduct for protection of the
environment.
"ENVIRONMENTAL LIABILITIES AND COSTS" means all liabilities,
monetary obligations, Remedial Actions, losses, damages, punitive damages,
consequential damages, treble damages, costs and expenses (including all
reasonable fees, disbursements and expenses of counsel, experts and consultants
and costs of investigations and feasibility studies), fines, penalties,
sanctions and interest incurred as a result of any claim or demand by any
Governmental Authority or any third party, and which relate to any environmental
condition or a Release of Hazardous Materials from or onto (i) any property
presently or formerly owned by the Borrower or (ii) any facility which received
Hazardous Materials generated by the Borrower.
"ENVIRONMENTAL LIEN" means any Lien in favor of any
Governmental Authority for Environmental Liabilities and Costs.
"EQUIPMENT" means, with respect to any Person, all of such
Person's now owned or hereafter acquired right, title, and interest with respect
to equipment (including, without limitation, "equipment" as such term is defined
in Article 9 of the UCC), machinery, machine tools, motors, furniture,
furnishings, fixtures, vehicles (including motor vehicles), tools, parts, goods
(other than consumer goods, farm products, or Inventory), wherever located,
including all attachments, accessories, accessions, replacements, substitutions,
additions, and improvements to any of the foregoing.
"EQUITY EQUIVALENTS" means with respect to any Person any
rights, warrants, options, convertible securities, exchangeable securities,
indebtedness or other rights, in each case exercisable for or convertible or
exchangeable into, directly or indirectly, Capital Stock of such Person or
securities exercisable for or convertible or exchangeable into Capital Stock of
such Person, whether at the time of issuance or upon the passage of time or the
occurrence of some future event.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import, and regulations
thereunder, in each case as in effect from time to time. References to sections
of ERISA shall be construed also to refer to any successor sections.
10
"ERISA AFFILIATE" means, with respect to any Person, any trade
or business (whether or not incorporated) which is a member of a group of which
such Person is a member and which would be deemed to be a "controlled group"
within the meaning of Sections 414(b), (c), (m) and (o) of the Internal Revenue
Code.
"EURODOLLAR APPLICABLE MARGIN" means the margin set forth in
the table below opposite the applicable Total Debt to EBITDA Ratio for the
twelve month period ending on the last day of the most recent fiscal quarter of
the Borrower for each of the Revolving Loan, the Tranche A Term Loan and the
Tranche B Term Loan, respectively:
------------------------- ------------------------- --------------------------------------------------------------------------
Total Debt to EBITDA Applicable Margin
Ratio
------------------------- ------------------------- --------------------------------------------------------------------------
Revolving Loan Tranche A Term Loan Tranche B Term Loan
------------------------- ------------------------- ----------------------- ------------------------- ------------------------
Greater than 3.00:1.00 3.50% 3.75% 6.25%
------------------------- ------------------------- ----------------------- ------------------------- ------------------------
Greater than or equal
to but less than or 2.00:1.00 3.25% 3.50% 6.00%
equal to 3.00:1.00
------------------------- ------------------------- ----------------------- ------------------------- ------------------------
Less than 2.00:1.00 3.00% 3.25% 5.75%
------------------------- ------------------------- ----------------------- ------------------------- ------------------------
"EURODOLLAR LOANS" means Loans which bear interest at a rate
determined by reference to LIBOR.
"EVENT OF DEFAULT" has the meaning ascribed to such term in
SECTION 11.01.
"EXCESS CASH FLOW" means, with respect to the twelve month
period ending on the last day of the most recent fiscal quarter of the Borrower,
(i) the sum, without duplication, of the amounts of (a) EBITDA of the Borrower
and its consolidated Subsidiaries for such period PLUS (b) the Working Capital
Adjustment (which may be a negative number), MINUS (ii) the sum, without
duplication, of the amounts of (a) Capital Expenditures paid in cash during such
period, PLUS (b) interest paid in cash during such period, PLUS (c) taxes paid
in cash during such period, PLUS (d) regularly scheduled payments of principal
on the Loans and voluntary prepayments of the Loans made pursuant to Section
3.01(a), in each case made during such period; PROVIDED, that any amounts paid
by the Borrower pursuant to SECTION 3.01(A)(IV) hereof shall be subtracted from
this definition for the period with respect to which such payment was made (and
not the period in which such payment was made).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC thereunder.
"EXCLUDED ASSET DISPOSITIONS" means with respect to the
Borrower:
11
(i) any liquidation or sale of Cash Equivalents;
(ii) any sale, lease, transfer, assignment or other
disposition of assets (other than in connection with any Casualty or
Condemnation) to any Person; PROVIDED that the aggregate fair market value of
all property disposed of pursuant to this clause (ii) does not exceed $250,000
in the aggregate in any Fiscal Year of the Borrower;
(iii) any disposition of machinery or Equipment which will be
replaced or upgraded with machinery or Equipment put to a similar use and or
otherwise used or useful in the ordinary course of business of and owned by the
Borrower; PROVIDED that the aggregate fair market value of all property disposed
of pursuant to this clause (iii) does not exceed $200,000 in the aggregate in
any Fiscal Year of the Borrower and such replacement or upgraded machinery and
Equipment is acquired within 180 days after such disposition;
(iv) any disposition of obsolete, worn-out or surplus tangible
assets in the ordinary course of business and in a commercially reasonable
manner, so long as the fair market value of all property disposed of pursuant to
this clause (iv) does not exceed $250,000 in the aggregate in any Fiscal Year of
the Borrower; PROVIDED, that such limitation may be increased by an amount not
to exceed $250,000 so long as the amount set forth under clause (ii) of this
definition is decreased by an equal amount on a dollar for dollar basis; and
(vi) any lease, as lessor or sublessor, or license, as
licensor or sublicensor, of real or personal property in the ordinary course of
business and consistent with past practices.
"EXEMPT DEPOSIT ACCOUNTS" means accounts the balance of which
consists exclusively of (i) withheld income taxes and federal, state, provincial
or local employment taxes in such amounts as are required in the reasonable
judgment of the Borrower to be paid to the Internal Revenue Service or state or
local government agencies with respect to employees of any of the Loan Parties
and (ii) amounts required to be paid over to an employee benefit plan pursuant
to DOL Reg. Sec. 2510.3-102 on behalf of or for the benefit of employees of one
or more Loan Parties.
"EXISTING DEBT" has the meaning ascribed to such term in
clause (i) of the definition of "Permitted Indebtedness".
"FAIR LABOR STANDARDS ACT" means the provisions of the Fair
Labor Standards Act, 29 U.S.C. xx.xx. 201 ET SEQ.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the
weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for
such day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
12
"FEDERAL RESERVE BOARD" means the Board of the Federal Reserve
System or any Governmental Authority succeeding to its functions.
"FEE LETTER" means that certain letter agreement, dated as of
April 17, 2006, between the Borrower and GCF relating to certain fees to be paid
to each of the Agents.
"FINANCIAL STATEMENTS" means the audited consolidated balance
sheet of the Borrower and its Subsidiaries for the Fiscal Year ended October 2,
2005 and the related consolidated statement of operations, shareholders' equity
and cash flows for the Fiscal Year then ended.
"FISCAL YEAR" means the fiscal year of the Borrower as
described in SECTION 8.15 hereof.
"FIXED CHARGE COVERAGE RATIO" means, as of any date of
determination, the ratio of (a) EBITDA to (b) Cash Interest Expense accrued PLUS
taxes paid PLUS Capital Expenditures PLUS any amounts paid pursuant to SECTION
2.02(D) hereof PLUS any amounts paid pursuant to SECTION 3.01(B) hereof, in each
case for the four consecutive fiscal quarters most recently ended.
"FORFEITURE PROCEEDING" means any action, proceeding or
investigation affecting the Borrower before any court, governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, or
the receipt of notice by any such party that it is a suspect in or a target of
any governmental inquiry or investigation, which may result in an indictment of
it or the seizure or forfeiture of any of its properties.
"FUNDED DEBT" means, without duplication, with respect to any
Person, (i) all indebtedness of such Person for borrowed money; (ii) all
obligations of such Person for the deferred purchase price of property or
services (other than trade payables incurred in the ordinary course of business
irrespective of when paid); (iii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments or other similar
instruments upon which interest payments are customarily made; (iv) all
obligations and liabilities of such Person created or arising under any
conditional sales or other title retention agreement with respect to property
used and/or acquired by such Person, even though the rights and remedies of the
lessor, seller and/or lender thereunder are limited to repossession or sale of
such property; (v) all Capitalized Lease Obligations of such Person; (vi) all
non-contingent obligations and liabilities of such Person, in respect of letters
of credit, acceptances and similar facilities; (vii) all Contingent Obligations
in respect of Funded Debt referred to in the other clauses of this definition;
(viii) all obligations referred to in clauses (i) through (vii) of this
definition of another Person secured by (or for which the holder of such Funded
Debt has an existing right, contingent or otherwise, to be secured by) a Lien
upon property owned by such Person, even though such Person has not assumed or
become liable for the payment of such Funded Debt, PROVIDED that the amount of
Funded Debt of others that constitutes Funded Debt solely by reason of this
clause (viii) shall not for purposes of this Agreement exceed the greater of
book value or the fair market value of the properties or assets subject to such
Lien. The Funded Debt of any Person shall include the Funded Debt of any
partnership of or joint venture in which such Person is a general partner or a
joint venturer to the extent such Person would be liable therefor under
applicable law or any agreement or instrument by virtue of such Person's
ownership interest in or other relationship with such entity, except to the
extent the terms of such Funded Debt provide that such Person shall not be
liable therefor.
13
"FUNDING DATE" means, with respect to any Loan, the date of
the funding of a Loan.
"GAAP" means generally accepted accounting principles in
effect from time to time in the United States, PROVIDED that for the purpose of
this Agreement and the definitions used herein, "GAAP" shall mean generally
accepted accounting principles in effect on the Signing Date and consistent with
those used in the preparation of the Financial Statements, PROVIDED, FURTHER,
that if there occurs after the date of this Agreement any change in GAAP that
affects in any material respect the calculation of any financial covenant
contained in ARTICLE X, the Administrative Agent and the Borrower shall
negotiate in good faith an amendment to such financial covenant and any other
provision of this Agreement that relates to the calculation of such financial
covenant with the intent of having the respective positions of the Lenders and
the Borrower after such change in GAAP conform as nearly as possible to their
respective positions as of the date of this Agreement and, after the execution
of any such amendment or consent by the Required Lenders in connection with any
such change in GAAP, "GAAP" shall mean generally accepted accounting principles
in effect on the effective date of such amendment or consent. Until any such
amendments have been agreed upon, the covenants in ARTICLE X shall be calculated
as if no such change in GAAP has occurred.
"GENERAL ACCOUNT" means a Blocked Account established by one
or more Loan Parties for the purposes of collecting payments from Account
Debtors and depositing all other Collections, among other things.
"GOVERNING DOCUMENTS" means, (a) with respect to any
corporation, (i) the articles/certificate of incorporation (or the equivalent
organizational documents) of such corporation, (ii) the by-laws (or the
equivalent governing documents) of the corporation and (iii) any document
setting forth the designation, amount and/or relative rights, limitations and
preferences of any class or series of such corporation's Capital Stock; and (b)
with respect to any general partnership, (i) the partnership agreement (or the
equivalent organizational documents) of such partnership and (ii) any document
setting forth the designation, amount and/or relative rights, limitations and
preferences of any of the partnership interests; and (c) with respect to any
limited partnership, (i) the partnership agreement (or the equivalent
organizational documents) of such partnership, (ii) a certificate of limited
partnership (or the equivalent organizational documents) and (iii) any document
setting forth the designation, amount and/or relative rights, limitations and
preferences of any of the partnership interests; (d) with respect to any limited
liability company, (i) the certificate of limited liability (or equivalent
filings) of such limited liability company, (ii) the operating agreement (or the
equivalent organizational documents) of such limited liability company, and
(iii) any document setting forth the designation, amount and/or relative rights,
limitations and preferences of any of such company's membership interests; and
(e) with respect to any unlimited liability company, (i) the certificate of
incorporation (or the equivalent organizational documents) of such unlimited
liability company, (ii) the memorandum and articles of association (or the
equivalent governing documents) of such unlimited liability company and (iii)
any document setting forth the designation, amount and/or relative rights,
limitations and preferences of any class or series of such unlimited liability
company's capital stock.
14
"GOVERNMENTAL AUTHORITY" means any nation or government, any
federal, state, provincial, city, town, municipality, county, local or other
political subdivision thereof or thereto and any department, commission, board,
bureau, instrumentality, agency or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.
"GUARANTIES" means a guaranty made by each Guarantor, in favor
of the Lenders, delivered to the Administrative Agent, for the benefit of the
Lenders, pursuant to SECTION 8.16, each in form and substance reasonably
satisfactory to the Collateral Agent.
"GUARANTORS" means, individually and collectively, each Person
which guarantees, pursuant to this Agreement or otherwise, all or any part of
the Obligations.
"GCF" means Guggenheim Corporate Funding, LLC, a limited
liability company formed under the laws of the State of Delaware.
"HAZARDOUS MATERIALS" means (a) any element, compound or
chemical that is defined, listed or otherwise classified as a contaminant,
pollutant, toxic pollutant, toxic or hazardous substances, extremely hazardous
substance or chemical, hazardous waste, special waste, or solid waste under
Environmental Laws; (b) petroleum and its refined products; (c) polychlorinated
biphenyls; (d) any substance exhibiting a hazardous waste characteristic,
including but not limited to, corrosivity, ignitability, toxicity or reactivity
as well as any radioactive or explosive materials; and (e) any raw materials,
building components, including but not limited to asbestos-containing materials,
and manufactured products containing any of the foregoing substances in clauses
(a) - (d).
"HEDGING AGREEMENT" means any and all transactions,
agreements, or documents now existing or hereafter entered into by the Borrower
or any of its Subsidiaries, which provide for an interest rate swap for the
purpose of hedging the Borrower's or its Subsidiary's, as the case may be,
exposure to fluctuations in interest rates.
"HEDGING OBLIGATIONS" means obligations and liabilities owing
by any Loan Party under Hedging Agreements that manage interest rate, foreign
currency exchange rate and commodity pricing risks and are not for speculative
purposes.
"HIGHEST LAWFUL RATE" means, with respect to any Agent or any
Lender, the maximum non-usurious interest rate, if any, that at any time or from
time to time may be contracted for, taken, reserved, charged or received on the
Obligations under laws applicable to such Agent or such Lender which are
currently in effect or, to the extent allowed by law, under such applicable laws
which may hereafter be in effect and which allow a higher maximum non-usurious
interest rate than applicable laws now allow.
"INDEBTEDNESS" means, without duplication, with respect to any
Person, (i) all indebtedness of such Person for borrowed money; (ii) all
obligations of such Person for the deferred purchase price of property or
services (other than trade payables incurred in the ordinary course of business
irrespective of when paid); (iii) all obligations of such Person evidenced by
15
bonds, debentures, notes or other similar instruments or other similar
instruments upon which interest payments are customarily made; (iv) all
obligations and liabilities of such Person created or arising under any
conditional sales or other title retention agreement with respect to property
used and/or acquired by such Person, even though the rights and remedies of the
lessor, seller and/or lender thereunder are limited to repossession or sale of
such property; (v) all Capitalized Lease Obligations of such Person; (vi) all
obligations and liabilities, contingent or otherwise, of such Person, in respect
of letters of credit, acceptances and similar facilities; (vii) all obligations
and liabilities of such Person under Hedging Agreements; (viii) all Contingent
Obligations; (ix) all obligations referred to in clauses (i) through (viii) of
this definition of another Person secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by) a
Lien upon property owned by such Person, even though such Person has not assumed
or become liable for the payment of such Indebtedness, PROVIDED that the amount
of Indebtedness of others that constitutes Indebtedness solely by reason of this
clause (ix) shall not for purposes of this Agreement exceed the greater of book
value or the fair market value of the properties or assets subject to such Lien.
The Indebtedness of any Person shall include the Indebtedness of any partnership
of or joint venture in which such Person is a general partner or a joint
venturer to the extent such Person would be liable therefor under applicable law
or any agreement or instrument by virtue of such Person's ownership interest in
or other relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person shall not be liable therefor.
"INDEMNIFIED MATTERS" has the meaning ascribed to such term in
SECTION 14.16.
"INDEMNITEES" has the meaning ascribed to such term in SECTION
14.16.
"INSOLVENCY PROCEEDING" means any proceeding commenced by or
against any Person under any provision of the Bankruptcy Code or under any other
state, provincial or federal bankruptcy or insolvency law, assignments for the
benefit of creditors, formal or informal moratoria, compositions, extensions
generally with creditors, or proceedings seeking reorganization, arrangement, or
other similar relief.
"INSTRUCTIONS" has the meaning ascribed to such term in the
Blocked Account Agreement.
"INTERCOMPANY ADVANCE" means loans made in the ordinary course
of business from the Borrower to any Subsidiary of the Borrower or from any
Subsidiary of the Borrower to the Borrower.
"INTEREST ACCRUAL PERIOD" means a one month period, commencing
on the first day of each calendar month and ending on the last day of each
calendar month; PROVIDED that the initial Interest Accrual Period shall begin on
the Effective Date and shall end on May 31, 2006.
"INTEREST COVERAGE RATIO" means, as of any date of
determination, the ratio of (i) EBITDA to (ii) Cash Interest Expense, in each
case for the four consecutive fiscal quarters most recently ended.
"INTEREST PAYMENT DATE" means the last Business Day of each
calendar month.
16
"INTEREST RATE DETERMINATION DATE" means, for each Interest
Accrual Period, the second Business Day immediately preceding the first day of
such Interest Accrual Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended (or any successor statute thereto) and the regulations
thereunder.
"INVENTORY" has the meaning ascribed to such term in the
Security Agreement.
"INVESTMENT" means, with respect to any Person, (i) any
purchase or other acquisition by that Person of Securities, or of a beneficial
interest in Securities, issued by any other Person, (ii) any purchase by that
Person of all or substantially all of the assets of a business conducted by
another Person, and (iii) any direct or indirect loan, advance (other than
prepaid expenses, accounts receivable, advances to employees and similar items
made or incurred in the ordinary course of business) or capital contribution by
that Person to any other Person, including all Indebtedness to such Person
arising from a sale of any property or assets by such Person other than in the
ordinary course of its business.
"IRS" means the Internal Revenue Service or any successor
federal tax Governmental Authority.
"LEASE" means any lease of real property to which the Borrower
is a party as lessor or lessee.
"LENDERS" means, collectively, the Revolving Lenders, the
Tranche A Lenders and the Tranche B Lenders.
"LENDER-RELATED PERSONS" means, with respect to any Lender,
such Lender, together with such Lender's Affiliates, and the officers,
directors, employees, counsel, agents, and attorneys-in-fact of such Lender and
such Lender's Affiliates.
"LIBOR" means, with respect to each Interest Accrual Period,
the rate (expressed as a percentage per annum) for deposits in Dollars for a
one-month period that appears on Telerate Page 3750 (or the successor thereto)
as of 11:00 a.m. (London time) on the related Interest Rate Determination Date.
If such rate does not appear on Telerate Page 3750 as of 11:00 a.m. (London
time) on such Interest Rate Determination Date, LIBOR shall be the arithmetic
mean of the offered rates (expressed as a percentage per annum and rounded up to
the nearest 1/8th of 1%) for deposits in Dollars for a one-month period that
appear on the Reuters Screen LIBOR Page as of 11:00 a.m. (London time) on such
Interest Rate Determination Date, if at least two (2) such offered rates so
appear. If fewer than two such offered rates appear on the Reuters Screen LIBOR
Page as of 11:00 a.m. (London time) on such Interest Rate Determination Date,
the Administrative Agent shall request the principal London, England office of
any four (4) major reference banks in the London interbank market selected by
the Administrative Agent to provide such bank's offered quotation (expressed as
a percentage per annum and rounded up to the nearest 1/8th of 1%) to prime banks
in the London interbank market for deposits in Dollars for a one-month period as
of 1:00 a.m. (London time) on such Interest Rate Determination Date for amounts
of not less than One Million Dollars ($1,000,000). If at least two (2) such
offered quotations are so provided, LIBOR shall be the arithmetic mean of such
quotations. If fewer than two such quotations are so provided, the
Administrative Agent shall request any three major banks in New York, New York
17
selected by the Administrative Agent to provide such bank's rate (expressed as a
percentage per annum) for loans in Dollars to leading European banks for a
one-month period as of approximately 11:00 a.m. (New York time) on the
applicable Interest Rate Determination Date for amounts of not less than One
Million Dollars ($1,000,000). If at least two (2) such rates are so provided,
LIBOR shall be the arithmetic mean of such rates. If fewer than two (2) rates
are so provided, then LIBOR for the applicable Interest Accrual Period shall be
LIBOR that was in effect for the immediately preceding Interest Accrual Period.
LIBOR shall be determined by the Administrative Agent or its agent in accordance
with this definition.
"LIEN" means any mortgage, deed of trust, pledge,
hypothecation, assignment, conditional sale agreement, deposit arrangement,
security interest, encumbrance, lien (statutory or other), preference, priority
or other security agreement or preferential arrangement of any kind or nature
whatsoever in respect of any Property of a Person, whether granted voluntarily
or imposed by law, and includes the interest of a lessor under a Capital Lease
or under any financing lease having substantially the same economic effect as
any of the foregoing and the filing of any financing statement or similar notice
(other than a financing statement filed by a "true" lessor pursuant to ss. 9-505
of the UCC), naming the owner of such property as debtor, under the UCC or other
comparable law of any jurisdiction.
"LIST OF CLOSING DOCUMENTS" means the List of Closing
Documents attached hereto and made a part hereof as EXHIBIT G.
"LOAN DOCUMENTS" means this Agreement, the Notes, the
Collateral Documents, the Guaranties and all other documents to which any Loan
Party is a party set forth on the List of Closing Documents, and all other
agreements, instruments, and other documents executed and delivered by any Loan
Party pursuant hereto or thereto or otherwise evidencing or securing any Loan.
"LOAN PARTIES" means, collectively, the Borrower and the
Guarantors, if any.
"LOANS" means, collectively, the Revolving Loans, the Tranche
A Term Loans and Tranche B Term Loans.
"MANAGED ACCOUNT" has the meaning ascribed to such term in
SECTION 14.08(A).
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(a) the properties, assets, financial condition, results of operations, business
or business prospects of the Borrower and any of its consolidated Subsidiaries
taken as a whole, (b) the ability of any Loan Party to perform any of its
obligations under the Loan Documents to which it is a party, (c) the Collateral,
or the Collateral Agent's Liens or the priority of such Liens, or (d) the rights
of or benefits available to any Agent or the Lenders under the Loan Documents.
"MATERIAL CONTRACT" means each contract or agreement to which
the Borrower or any of its Subsidiaries is a party which is material to the
business, operations, financial condition or performance of the Borrower and its
consolidated Subsidiaries taken as a whole.
18
"MATURITY DATE" means (i) with respect to the Revolving Loans,
the Commitment Termination Date, (ii) with respect to the Tranche A Term Loans,
the Tranche A Maturity Date, and (iii) with respect to the Tranche B Term Loans,
the Tranche B Maturity Date.
"MOODY'S" means Xxxxx'x Investors Service, Inc. and any
successor thereto.
"MORTGAGES" means the mortgages and deeds of trust, if any,
executed and delivered by certain of the Loan Parties in favor of the Collateral
Agent, in form and substance reasonably satisfactory to the Collateral Agent, as
the same may be amended, modified and otherwise supplemented from time to time.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which the Borrower, any of its Subsidiaries or
any of their ERISA Affiliates has contributed, or has been obligated to
contribute, at any time during the preceding six years, or has liability.
"NET CASH PROCEEDS" means, with respect to any Disposition by
the Borrower or any of its Subsidiaries, the amount of cash received (directly
or indirectly) from time to time (whether as initial consideration or through
the payment of deferred consideration) by or on behalf of the Borrower or any of
its Subsidiaries or Affiliates in connection therewith, after deducting
therefrom only (A) the principal amount of any Indebtedness of the Borrower or
any of its Subsidiaries secured by any Permitted Encumbrance on any asset that
is the subject of the Disposition (other than Indebtedness assumed by the
purchaser of such asset) which is required to be, and is, repaid in connection
with such Disposition (other than Indebtedness under this Agreement), (B)
reasonable expenses related thereto reasonably incurred by the Borrower or any
of its Subsidiaries in connection therewith, (C) transfer taxes paid by the
Borrower or any of its Subsidiaries in connection therewith, and (D) a provision
for net income or other taxes, whether paid or payable, in connection with such
Disposition (after taking into account any tax credits or deductions and any tax
sharing arrangements); PROVIDED, HOWEVER, in the event that the Borrower is
required to take a reserve in accordance with GAAP against any contingent
liabilities associated with such Disposition, the Borrower may deduct from the
Net Cash Proceeds received from such Disposition an amount equal to such reserve
so long as (1) no Default or Event of Default shall have occurred and be
continuing, and (2) the Borrower shall have given the Administrative Agent and
the Collateral Agent prior written notice of the intention to use such Net Cash
Proceeds for such reserve.
"NET INCOME" means, with respect to any Person for any period,
the net income (loss) of such Person and its consolidated Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP.
"NET INTEREST EXPENSE" means, with respect to any Person for
any period, gross interest expense of such Person and its consolidated
Subsidiaries for such period determined on a consolidated basis in conformity
with GAAP LESS (i) the sum of (A) interest income for such period and (B)
realized gains for such period on Hedging Agreements (to the extent not included
in interest income above and to the extent not deducted in the calculation of
such gross interest expense), PLUS (ii) the sum of (A) losses for such period on
19
Hedging Agreements (to the extent not included in such gross interest expense)
and (B) the upfront costs or fees for such period associated with Hedging
Agreements (to the extent not included in gross interest expense), each
determined on a consolidated basis in accordance with GAAP for such Person and
its consolidated Subsidiaries.
"NET WORKING CAPITAL" means, as at any date of determination,
the amount (which may be a negative number) equal to Current Assets MINUS
Current Liabilities.
"NOTES" means, collectively, the Revolving Notes, the Tranche
A Term Notes and the Tranche B Term Notes.
"NOTICE OF BORROWING" means a notice substantially in the form
of EXHIBIT B attached hereto and made a part hereof.
"NOTICE OF CONVERSION/CONTINUATION" means a notice
substantially in the form of EXHIBIT C attached hereto and made a part hereof.
"OBLIGATIONS" means all Loans, advances, debts, liabilities,
obligations, Hedging Obligations, covenants and duties, owing by any Loan Party
to the Administrative Agent, the Collateral Agent, any Lender, any Affiliate of
any Lender or any Person entitled to indemnification pursuant to SECTION 14.16
of this Agreement, of any kind or nature, present or future, whether or not
evidenced by any note, guaranty or other instrument, whether or not for the
payment of money, whether arising by reason of an extension of credit, loan,
guaranty, indemnification, interest rate contract, foreign exchange contract or
in any other manner, whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, but in all such
circumstances only to the extent now existing or hereafter arising or however
acquired, arising under or in connection with this Agreement, the Notes or any
other Loan Document. The term includes all interest (including any interest
that, but for the provisions of the Bankruptcy Code, would have accrued),
charges, expenses, fees, attorneys' fees and disbursements and any other sum
chargeable to the Loan Parties under this Agreement, the Notes or any other Loan
Document.
"OPERATING LEASE" means, as applied to any Person, any lease
(including leases that may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) that is not a Capitalized Lease other
than any such lease under which that Person is the lessor.
"OPERATING LEASE OBLIGATIONS" means all obligations for the
payment of rent for any real or personal property under Operating Leases.
"OTHER TAXES" has the meaning ascribed to such term in SECTION
3.03(B).
"PAYMENT EVENT OF DEFAULT" means an Event of Default under
SECTION 11.01(A).
"PERMITS" has the meaning assigned to such term in SECTION
6.01(N).
"PERMITTED DISCRETION" means a determination made in good
faith and in the exercise of reasonable (from the perspective of a secured
asset-based lender) business judgment.
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"PERMITTED ENCUMBRANCES" means:
(a) Liens imposed by law for taxes, assessments or
governmental charges or levies that are not yet due or are being contested in a
Permitted Protest;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the ordinary course
of business and securing obligations that are not overdue by more than 30 days
or are being contested in a Permitted Protest;
(c) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment insurance and
other social security laws or regulations;
(d) deposits to secure the performance of bids, trade
contracts, government contracts, leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature, in each
case in the ordinary course of business;
(e) Liens in respect of judgments, decrees or attachments (or
securing of appeal bonds with respect thereto) that do not constitute an Event
of Default; and
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not materially
detract from the value of the affected property or interfere with the ordinary
conduct of business of the Borrower;
(g) Liens securing the Obligations and/or created by the
Collateral Documents;
(h) Liens on loss payments, dividends and rebates which may
become payable under insurance policies which reduce the incurred premiums on
such insurance policies in an aggregate amount not exceeding $200,000 at any
time outstanding;
(i) licenses, leases or subleases granted to third Persons in
the ordinary course of business not interfering in any material respect with the
business of the Borrower;
(j) Liens securing Indebtedness described in clause (iii) of
the definition of "Permitted Indebtedness";
(k) Liens on cash and Cash Equivalents securing Hedging
Obligations in an aggregate amount not exceeding $200,000 at any time
outstanding;
(l) Liens securing Indebtedness described in clause (xi) of
the definition of Permitted Indebtedness;
(m) Liens securing Existing Debt; and
21
(n) other Liens incurred by the Borrower if the aggregate fair
market value of the property subject to such Liens, and the aggregate amount of
the Indebtedness or other obligations secured thereby, do not exceed $200,000 at
any time.
"PERMITTED INDEBTEDNESS" means
(i) after the Signing Date and prior to the Effective Date,
Indebtedness existing on the Signing Date and listed on SCHEDULE 1.01(C)-I
hereto, and upon the Effective Date, Indebtedness existing as of such date and
listed on SCHEDULE 1.01(C)-II hereto (the "EXISTING DEBT") (for the avoidance of
doubt, SCHEDULE 1.01(C)-II shall replace SCHEDULE 1.01(C)-I upon the Effective
Date);
(ii) Indebtedness of the Loan Parties under this Agreement and
the other Loan Documents;
(iii) purchase money indebtedness and Capital Lease
Obligations of the Borrower and its Subsidiaries incurred after the Effective
Date to finance Capital Expenditures; PROVIDED that (A) the aggregate amount of
all such Indebtedness does not exceed $2,000,000 at any time outstanding, (B)
the Indebtedness when incurred shall not be more than 100% of the lesser of the
cost or fair market value as of the time of acquisition of the asset financed,
(C) such Indebtedness is issued and any Liens securing such Indebtedness are
created concurrently with the acquisition of the asset financed and (D) no Lien
securing such Indebtedness shall extend to or cover any property or asset of any
Loan Party other than the asset so financed (or its products and proceeds);
(iv) contingent liabilities in respect of any indemnification,
adjustment of purchase price, earn-out, non-compete, consulting, deferred
compensation and similar obligations of the Borrower and its Subsidiaries
incurred in connection with any Disposition permitted hereunder;
(v) obligations of the Borrower and its Subsidiaries under
Hedging Agreements to the extent entered into after the Effective Date to manage
interest rate, foreign currency exchange rate and commodity pricing risks and
not for speculative purposes;
(vi) Indebtedness in an amount not to exceed $200,000 owed to
any Person providing property, casualty or liability insurance to the Borrower
so long as such Indebtedness shall not be in excess of the amount of the unpaid
cost of, and shall be incurred only to defer the cost of, such insurance for the
year in which such Indebtedness is incurred and such Indebtedness shall be
outstanding only during such year;
(vii) Indebtedness arising as a result of Intercompany
Advances;
(viii) Indebtedness arising from the honoring by a bank or
other financial institution of a check, draft or similar instrument of the
Borrower or any of its Subsidiaries drawn against insufficient funds in the
ordinary course of business PROVIDED that the aggregate amount of all such
Indebtedness does not exceed $100,000 at any time outstanding;
22
(ix) Indebtedness representing deferred compensation or
accrued vacation pay to employees of the Borrower or any of its Subsidiaries;
(x) Indebtedness incurred in connection with acquisitions of
certain Equipment listed on SCHEDULE 1.01(D) hereto;
(xi) Indebtedness in an amount not to exceed $1,000,000 owed
to any Person providing property, casualty or liability insurance to the
Borrower so long as such Indebtedness shall not be in excess of the amount of
the unpaid cost of, and shall be incurred only to defer the cost of, such
insurance for the year in which such Indebtedness is incurred and such
Indebtedness shall be outstanding only during such year; and
(xii) unsecured Indebtedness of the Borrower not otherwise
permitted by clauses (i) through (xi) above incurred after the Effective Date,
PROVIDED that the aggregate principal amount of such Indebtedness does not
exceed $500,000 at any time outstanding; PROVIDED, FURTHER, that no Default or
Event of Default shall have occurred and be continuing immediately before and
immediately after giving effect to such incurrence.
"PERMITTED PROTEST" means the right of the Borrower or any of
its Subsidiaries to protest any Lien (other than any such Lien that secures all
or any portion of the Obligations), taxes (other than payroll taxes), or rental
payment, PROVIDED that (a) a reserve with respect to such obligation is
established by the Borrower or any of its Subsidiaries in such amount as is
required under GAAP, (b) any such protest is instituted promptly and prosecuted
diligently by the Borrower or any of its Subsidiaries, in good faith, (c) the
Borrower or any of its Subsidiaries promptly notifies the Collateral Agent and
the Administrative Agent of any such protest, and (d) the Collateral Agent is
satisfied that, while any such protest is pending, there will be no impairment
of the enforceability, validity, and/or priority of any of the Collateral
Agent's Liens on any material portion of the Collateral which is not mitigated
by one or more Reserves.
"PERMITS" has the meaning ascribed to such term in SECTION
6.01(N).
"PERSON" means an individual, corporation, limited liability
company, partnership, association, joint-stock company, trust, unincorporated
organization, joint venture or Governmental Authority.
"PLEDGE AGREEMENTS" means the pledge agreements, if any,
executed and delivered by one or more of the Loan Parties in favor of the
Collateral Agent, each in form and substance reasonably satisfactory to the
Collateral Agent, as the same may be amended, supplemented or otherwise modified
from time to time.
"PRIME RATE" means, with respect to any period commencing on
any Interest Payment Date (or, with respect to the period prior to the first
Interest Payment Date, the Effective Date) and ending on the day immediately
before the Interest Payment Date immediately following such date, the prime rate
of interest specified under the Bloomberg reference identified as "PRIMBB Index"
on the date that is two Business Days prior to the first day of such period;
PROVIDED, HOWEVER, that if such rate is not available, "Prime Rate" shall mean
such rate of interest as is publicly announced by Citibank, N.A. in New York,
New York, on such day as its prime or base rate. The Prime Rate is a reference
rate and does not necessarily represent the lowest or best rate actually
available.
23
"PRO RATA SHARE" means (a) with respect to any Revolving
Lender, the percentage obtained by DIVIDING such Revolving Lender's Revolving
Loan Exposure BY the Revolving Loan Exposure of all Revolving Lenders; (b) with
respect to any Tranche A Lender, the percentage obtained by DIVIDING such
Tranche A Lender's Tranche A Term Loan Exposure BY the aggregate Tranche A Term
Loan Exposure of all Tranche A Lenders; and (c) with respect to any Tranche B
Lender, the percentage obtained by DIVIDING such Tranche B Lender's Tranche B
Term Loan Exposure BY the aggregate Tranche B Term Loan Exposure of all Tranche
B Lenders
"PROPERTY" means any right or interest in or to property of
any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"RATING AGENCIES" means Moody's and S&P, or if either of such
Persons cease to perform credit ratings or other applicable services, such
nationally recognized statistical rating organization as the Borrower and the
Administrative Agent may select.
"REGISTER" has the meaning ascribed to such term in SECTION
14.08.
"REGULATION T", "REGULATION U" and "REGULATION X" mean,
respectively, Regulations T, U and X of the Board of Governors of the Federal
Reserve System or any successor, as the same may be amended or supplemented from
time to time.
"RELATED PARTIES" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees and
agents of such Person and such Person's Affiliates.
"RELEASE" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, seeping,
migrating, dumping or disposing of any Hazardous Material (including the
abandonment or discarding of barrels, containers and other closed receptacles
containing any Hazardous Material) into the indoor or outdoor environment,
including ambient air, soil, surface or ground water.
"REMEDIAL ACTION" means all actions taken to (i) clean up,
remove, remediate, contain, treat, monitor, assess, evaluate or in any other way
address Hazardous Materials in the indoor or outdoor environment; (ii) prevent
or minimize a Release or threatened Release of Hazardous Materials so they do
not migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment; (iii) perform pre-remedial studies and
investigations and post-remedial operation and maintenance activities; or (iv)
any other actions authorized by 42 U.S.C. ss. 9601.
"REQUIRED LENDERS" means, at any time, the Administrative
Agent and Lenders whose Credit Exposures aggregate more than 50% of the Total
Facility Exposure.
"REQUIRED REVOLVING LENDERS" means, at any time, Revolving
Lenders whose Pro Rata Shares aggregate more than 50% of the Revolving Loan
Exposure.
24
"REQUIRED TRANCHE A LENDERS" means, at any time, Tranche A
Lenders whose Pro Rata Shares aggregate more than 50% of the Tranche A Term Loan
Exposure.
"REQUIRED TRANCHE B LENDERS" means, at any time, Tranche B
Lenders whose Pro Rata Shares aggregate more than 50% of the Tranche B Term Loan
Exposure.
"REQUIREMENTS OF LAW" means, as to any Person, the charter and
by-laws or other organizational or Governing Documents of such Person, and any
law, rule or regulation, or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is subject
including, without limitation, Environmental Laws, the Securities Act, the
Exchange Act, Regulations T, U and X, ERISA, the Fair Labor Standards Act and
any certificate of occupancy, zoning ordinance, building, environmental or land
use requirement or Permit or environmental, labor, employment, occupational
safety or health law, rule or regulation.
"RESERVES" means any and all reserves which the Administrative
Agent may from time to time determine in its Permitted Discretion and as to any
new category of Reserves upon not less than two (2) Business Days' prior notice
to the Borrower, revised in good faith (a) for up to three (3) months rent at
locations leased by any Loan Party with respect to which no Collateral Access
Agreement is effective and for consignee's, warehousemen's and bailee's charges,
reserves for dilution of Accounts, for Inventory shrinkage, for customs charges
and shipping charges related to any Inventory in transit and for taxes, fees,
assessments, and other governmental charges), (b) for the amount of any Hedging
Obligations owing to any Lender or any of its Affiliates, or (c) to reflect
events, conditions, contingencies or risks which, as determined by the
Administrative Agent in its Permitted Discretion, adversely affect, or would
have a reasonable likelihood of adversely affecting, either (i) the Collateral
or its value or (ii) the security interests and other rights of Collateral Agent
in the Collateral (including the enforceability, perfection and priority
thereof). The amount of any Reserve established by the Administrative Agent
shall have a reasonable relationship to the event, condition, or other matter
which is the basis for such reserve as determined by the Administrative Agent in
its Permitted Discretion. Without limiting the right of the Administrative Agent
to adjust the amount of any category of Reserves, a new category of Reserves not
established as of the Signing Date may only be established by the Administrative
Agent after the Signing Date based on an event, condition or other circumstance
arising after the Signing Date, or an event, condition or other circumstance
existing on the Signing Date to the extent the Administrative Agent has no
written notice thereof from the Borrower prior to the Signing Date.
"RESTRICTED PAYMENTS" means, with respect to any Person, (i)
any dividend or other distribution, direct or indirect, on account of any shares
of any class of Capital Stock of, partnership interest of or other equity
interest of, such Person, now or hereafter outstanding, except a dividend
payable solely in shares of that class of stock or in any junior class of stock
to the holders of that class, (ii) any redemption, retirement, sinking fund or
similar payment, purchase or other acquisition for value, direct or indirect, of
any shares of any class of capital stock of, partnership interest of or other
equity interest of, such Person now or hereafter outstanding, (iii) any payment
or prepayment of principal of, premium, if any, or interest, fees or other
charges on or with respect to, and any redemption, purchase, retirement,
25
defeasance, sinking fund or similar payment and any claim for rescission with
respect to, any Indebtedness which is subordinated to the Obligations unless
permitted pursuant to the terms of a subordination agreement or intercreditor
agreement agreed to in writing by the Required Lenders and (iv) any payment made
to redeem, purchase, repurchase or retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any class of
capital stock of, partnership interest of or other equity interest of, such
Person now or hereafter outstanding.
"REVOLVING CREDIT EXPOSURE" means, with respect to any
Revolving Lender, at any time, the outstanding principal amount of such
Revolving Lender's Revolving Loans at such time.
"REVOLVING CREDIT OBLIGATIONS" means, at any particular time,
the outstanding principal amount of the Revolving Loans at such time.
"REVOLVING LENDER" means a Lender that has a Revolving Loan
Commitment and/or that has an outstanding Revolving Loan.
"REVOLVING LOAN" has the meaning ascribed to such term in
SECTION 2.01(A).
"REVOLVING LOAN ACCOUNT" means an account maintained hereunder
by the Administrative Agent on its books of account, at the Administrative
Agent's office and with respect to the Borrower, in which the Borrower will be
charged with all Revolving Loans made to, and all other Obligations incurred by,
the Borrower in connection with the Revolving Loans.
"REVOLVING LOAN COMMITMENT" means, with respect to any
Revolving Lender, the obligation of such Revolving Lender to make Revolving
Loans pursuant to the terms and conditions of this Agreement, and which shall
not exceed the principal amount set forth opposite such Revolving Lender's name
on SCHEDULE 1.01(E) under the heading "Revolving Loan Commitment" or the
signature page of the Assignment and Acceptance by which it became (or becomes)
a Revolving Lender, as such may be modified from time to time pursuant to the
terms of this Agreement or to give effect to any applicable Assignment and
Acceptance, and "Revolving Loan Commitments" means the aggregate principal
amount of the Revolving Loan Commitments of all the Revolving Loan Lenders (it
being understood and agreed that the maximum aggregate principal amount of the
Revolving Loan Commitments shall not exceed $7,500,000, as reduced from time to
time pursuant to the terms hereof).
"REVOLVING LOAN EXPOSURE" means, with respect to any Revolving
Lender, as of any date of determination (a) prior to the Commitment Termination
Date, such Revolving Lender's Revolving Loan Commitment at such time, and (b) on
and after the Commitment Termination Date, the outstanding principal amount of
such Revolving Lender's Revolving Loans at such time.
"REVOLVING NOTES" means (i) the promissory notes, if any, of
the Borrower issued pursuant to SECTION 2.04(A) on the Effective Date and (ii)
any promissory notes issued by the Borrower at the request of any Revolving
Lender in connection with assignments of the Revolving Loan Commitments and
Revolving Loans of any Revolving Lenders, in each case substantially in the form
of EXHIBIT D attached hereto and made a part hereof, as they may be amended,
supplemented or otherwise modified from time to time.
26
"SEC" means the Securities and Exchange Commission or any
other similar or successor agency of the Federal government administering the
Securities Act.
"SECURITIES" means any stock, shares, voting trust
certificates, bonds, debentures, notes or other evidences of indebtedness,
secured or unsecured, convertible, subordinated or otherwise, or any
certificates of interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire any of the foregoing, but shall not include the Obligations.
"SECURITIES ACT" means the Securities Act of 1933, as amended,
or any successor Federal statute, and the rules and regulations of the SEC
thereunder, all as the same shall be in effect at the time.
"SECURITIES ACCOUNT" means a "securities account" as that term
is defined in the UCC.
"SECURITY AGREEMENT" means the pledge and security agreement
executed and delivered by the Borrower and each of its Subsidiaries in favor of
the Collateral Agent, together with any other pledge and security agreement
(substantially similar to the pledge and security agreement dated the Effective
Date) delivered to the Collateral Agent pursuant to SECTION 8.16, each in form
and substance reasonably satisfactory to the Collateral Agent, as such
agreements may be amended, supplemented or otherwise modified from time to time.
"SENIOR DEBT TO EBITDA RATIO" means, as of any date of
determination, the ratio of (a) the aggregate principal amount of the
Obligations outstanding with respect to the Revolving Loans and the Tranche A
Term Loans as of such date of determination, TO (b) EBITDA of the Borrower and
its consolidated Subsidiaries for the trailing twelve-month period ending on the
last day of the fiscal quarter immediately preceding such date of determination.
"SIGNING DATE" has the meaning ascribed to such term in
SECTION 5.01 hereto.
"SOLVENT" means, with respect to any Person on a particular
date, that on such date such Person (i) has sufficient working capital and other
property remaining as a result of the transaction to carry on its business as
currently being conducted and as contemplated to be conducted in the future,
(ii) has the ability to pay existing indebtedness as it matures and does not
intend to or believes that it will incur debts beyond its ability to pay as such
debts mature in the future, and (ii) is "solvent" within the meaning given that
term and similar terms under applicable laws relating to fraudulent transfers
and conveyances.
"S&P" means Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc. and any successor thereto.
"SUBSIDIARY" means, with respect to any Person at any date,
any corporation, limited or general partnership, limited liability company,
trust, association or other entity (i) the accounts of which would be
27
consolidated with those of such Person in such Person's consolidated financial
statements if such financial statements were prepared in accordance with GAAP or
(ii) of which more than 50% of (A) the outstanding Capital Stock having (in the
absence of contingencies) ordinary voting power to elect a majority of the board
of directors of such corporation, (B) the interest in the capital or profits of
such partnership or limited liability company or (C) the beneficial interest in
such trust or estate is, at the time of determination, owned or controlled
directly or indirectly through one or more intermediaries, by such Person.
"SUFFICIENT LIQUIDITY" means, as of any date of determination,
an aggregate amount of cash, Cash Equivalents and Availability equal to at least
$3,000,000, both before and after giving effect to any voluntary prepayment of
Term Loans made on such date.
"TAXES" has the meaning ascribed to such term in SECTION
3.03(A).
"TERM LENDERS" means the Tranche A Lenders and the Tranche B
Lenders.
"TERM LOAN ACCOUNT" means an account maintained hereunder by
Administrative Agent on its books of account, at Administrative Agent's office
and with respect to the Borrower, in which the Borrower will be charged with all
Term Loans made to, and all other Obligations incurred by, the Borrower in
connection with the Term Loan facilities.
"TERM LOANS" means the Tranche A Term Loans and the Tranche B
Term Loans.
"TERM NOTES" means the Tranche A Term Notes and the Tranche B
Term Notes.
"TERMINATION OCCURRENCE" has the meaning ascribed to such term
in SECTION 12.03.
"TOTAL DEBT TO EBITDA RATIO" means, as of any date of
determination, the ratio of (a) the sum of (i) the aggregate principal amount of
the Obligations outstanding as of such date of determination, PLUS (ii) the
aggregate principal amount of all other outstanding Funded Debt of the Borrower
and its consolidated Subsidiaries, if any, as of such date of determination TO
(b) EBITDA of the Borrower and its consolidated Subsidiaries, if any, for the
trailing twelve-month period ending on the last day of the fiscal quarter
immediately preceding such date of determination.
"TOTAL FACILITY" means $47,500,000.
"TOTAL FACILITY EXPOSURE" means, collectively, the Revolving
Loan Exposure, the Tranche A Term Loan Exposure and the Tranche B Term Loan
Exposure.
"TRANCHE A LENDER" means a Lender that has a Tranche A Term
Loan Commitment and/or that has an outstanding Tranche A Term Loan.
"TRANCHE A MATURITY DATE" means a date that is five years from
the Effective Date.
28
"TRANCHE A TERM LOAN COMMITMENT" means, with respect to any
Tranche A Lender, the obligation of such Tranche A Lender to make a Tranche A
Term Loan pursuant to the terms and conditions of this Agreement, and which
shall not exceed the principal amount set forth opposite such Tranche A Lender's
name on SCHEDULE 1.01(E) under the heading "Tranche A Term Loan Commitment", and
"Tranche A Term Loan Commitments" means the aggregate principal amount of the
Tranche A Term Loan Commitments of all the Tranche A Lenders (it being
understood and agreed that the maximum aggregate principal amount of the Tranche
A Term Loan Commitments shall not exceed $25,000,000).
"TRANCHE A TERM LOAN EXPOSURE" means, with respect to any
Tranche A Lender, as of any date of determination (i) prior to the funding of
the Tranche A Term Loans, such Tranche A Lender's Tranche A Term Loan
Commitment, and (ii) after the funding of the Tranche A Term Loans, the
outstanding principal amount of the Tranche A Term Loan of such Tranche A
Lender.
"TRANCHE A TERM LOANS" has the meaning ascribed to such term
in SECTION 2.02(A).
"TRANCHE A TERM NOTES" means (i) the promissory notes, if any,
of the Borrower issued pursuant to SECTION 2.04(B) on the Effective Date and
(ii) any promissory notes issued by the Borrower at the request of any Tranche A
Lender in connection with assignments of the Tranche A Term Loans of any Tranche
A Lender, in each case substantially in the form of EXHIBIT E attached hereto
and made a part hereof, as they may be amended, supplemented or otherwise
modified from time to time.
"TRANCHE B LENDER" means a Lender that has a Tranche B Term
Loan Commitment and/or that has an outstanding Tranche B Term Loan.
"TRANCHE B MATURITY DATE" means a date that is five years from
the Effective Date.
"TRANCHE B TERM LOAN COMMITMENT" means, with respect to any
Tranche B Lender, the obligation of such Tranche B Lender to make a Tranche B
Term Loan pursuant to the terms and conditions of this Agreement, and which
shall not exceed the principal amount set forth opposite such Tranche B Lender's
name on SCHEDULE 1.01(E) under the heading "Tranche B Term Loan Commitment", and
"Tranche B Term Loan Commitments" means the aggregate principal amount of the
Tranche B Term Loan Commitments of all the Tranche B Lenders (it being
understood and agreed that the maximum aggregate principal amount of the Tranche
B Term Loan Commitments shall not exceed $15,000,000).
"TRANCHE B TERM LOAN EXPOSURE" means, with respect to any
Tranche B Lender, as of any date of determination (i) prior to the funding of
the Tranche B Term Loans, such Tranche B Lender's Tranche B Term Loan
Commitment, and (ii) after the funding of the Tranche B Term Loans, the
outstanding principal amount of the Tranche B Term Loan of such Tranche B
Lender.
"TRANCHE B TERM LOANS" has the meaning ascribed to such term
in SECTION 2.03(A).
29
"TRANCHE B TERM NOTES" means (i) the promissory notes, if any,
of the Borrower issued pursuant to SECTION 2.04(C) on the Effective Date and
(ii) any promissory notes issued by the Borrower at the request of a Tranche B
Lender in connection with assignments of the Tranche B Term Loans of any Tranche
B Lender, in each case substantially in the form of EXHIBIT F attached hereto
and made a part hereof, as they may be amended, supplemented or otherwise
modified from time to time.
"TREECON" means TreeCon Resources, Inc.
"TRIGGERING EVENT" means an Acceleration Event or an Event of
Default under either SECTION 11.01(H) or SECTION 11.01(I).
"UCC" means the Uniform Commercial Code enacted in the State
of New York, as amended from time to time; PROVIDED that if by reason of
mandatory provisions of law, the perfection, the effect of perfection or
non-perfection or priority is governed by the Uniform Commercial Code as in
effect in a jurisdiction other than New York, "UCC" means the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of the provisions
hereof relating to such perfection, effect of perfection or non-perfection or
priority.
"UNITED AIRLINES" means United Air Lines, Inc.
---------------
"UNUSED COMMITMENT FEE" has the meaning ascribed to such term
in SECTION 4.04(C).
"VOTING STOCK" means all classes of Capital Stock of a Person
then outstanding and normally entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof,
as applicable.
"XXXXX FARGO SECURITIES ACCOUNT" means the Securities Account
of the Borrower listed on SCHEDULE 1.01(F) hereto.
"WORKING CAPITAL ADJUSTMENT" means, for any period on a
consolidated basis, the amount (which may be a negative number) by which Net
Working Capital as of the beginning of such period exceeds (or is less than) Net
Working Capital as of the end of such period.
SECTION 1.02. TERMS GENERALLY. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise, (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement.
30
SECTION 1.03. ACCOUNTING AND OTHER TERMS. Unless otherwise
expressly provided herein, each accounting term used herein shall have the
meaning given it under GAAP. All terms used in this Agreement which are defined
in Article 1, Article 8 or Article 9 of the UCC and which are not otherwise
defined herein shall have the same meanings herein as set forth therein.
SECTION 1.04. TIME REFERENCES. Unless otherwise indicated
herein, all references to time of day refer to Eastern standard time or Eastern
daylight saving time, as in effect in New York, New York on such day. For
purposes of the computation of a period of time from a specified date to a later
specified date, the word "from" means "from and including" and the words "to"
and "until" each means "to but excluding"; PROVIDED, HOWEVER, that with respect
to a computation of fees or interest payable to the Administrative Agent or the
Lenders, such period shall in any event consist of at least one full day.
ARTICLE II
TOTAL FACILITY
SECTION 2.01. REVOLVING LOAN COMMITMENTS. a) REVOLVING LOANS.
Subject to the terms and conditions set forth herein, each Revolving Lender
hereby severally agrees to make loans (each a "REVOLVING Loan") to the Borrower
from time to time on any Business Day during the Availability Period in an
aggregate principal amount not to exceed at any time such Revolving Lender's Pro
Rata Share of the Availability, PROVIDED that such aggregate principal amount
does not result in such Revolving Lender's Revolving Credit Exposure exceeding
such Revolving Lender's Revolving Loan Commitment or the Revolving Credit
Exposure of all Revolving Lenders exceeding the Revolving Loan Commitments of
all Revolving Lenders. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, prepay and reborrow
Revolving Loans.
(b) NOTICE OF BORROWING. When the Borrower desires to borrow
under SECTION 2.01(A), the Borrower shall deliver to the Administrative Agent a
Notice of Borrowing, signed by the Borrower (i) in the case of Eurodollar Loans,
not later than 10:00 a.m. (New York time) at least three (3) Business Days in
advance of any proposed borrowing of Eurodollar Loans or (ii) in the case of ABR
Loans, not later than 10:00 a.m. (New York time) at least one (1) Business Day
in advance of any proposed borrowing of ABR Loans. Such Notice of Borrowing
shall specify (A) the amount of the proposed borrowing of Revolving Loans, (B)
the proposed Funding Date, which must be a Business Day, and (C) whether such
Revolving Loans are to be ABR Loans or Eurodollar Loans. Each Notice of
Borrowing given pursuant to this SECTION 2.01 shall be irrevocable and binding
on the Borrower. Each Revolving Loan shall be made in a minimum amount of
$500,000 and shall be in an integral multiple of $250,000 in excess thereof (or
such lesser amount as may then be available). In lieu of delivering such a
Notice of Borrowing, the Borrower may give the Administrative Agent telephonic
notice of any proposed borrowing by the time required under this SECTION 2.01(B)
if it confirms such notice by delivery of the Notice of Borrowing to the
Administrative Agent promptly, but in no event later than 5:00 p.m. (New York
time) on the same Business Day on which such telephonic notice is given. Any
Notice of Borrowing (or telephonic notice in lieu thereof) given pursuant to
this SECTION 2.01(B) shall be irrevocable.
(c) MAKING THE REVOLVING LOANS. i) The Administrative Agent
shall promptly notify each Revolving Lender of the amount of each borrowing of
Revolving Loans. Each such Revolving Lender shall deposit in the Administrative
Agent Account an amount equal to its Pro Rata Share of the amount of such
borrowing in immediately available funds, not later than 11:00 a.m. (New York
time) on the Funding Date applicable thereto. Subject to the satisfaction of the
conditions precedent set forth in ARTICLE V, the Administrative Agent shall make
the proceeds of such amounts received by it available to the Borrower at the
Administrative Agent's office in New York, New York on such Funding Date and
shall disburse such proceeds to the General Account.
31
(ii) Except as otherwise provided in this SECTION 2.01(C), all
Revolving Loans under this Agreement shall be made by the Revolving Lenders
simultaneously and proportionately to their Pro Rata Shares. The failure of any
Revolving Lender to deposit the amount described in clause (i) above with the
Administrative Agent on the applicable Funding Date shall not relieve any other
Revolving Lender of its obligations hereunder to make its Revolving Loan on such
Funding Date. No Revolving Lender shall be responsible for any failure by any
other Revolving Lender to perform its obligation to make a Revolving Loan
hereunder nor shall the Revolving Loan Commitment of any Revolving Lender be
increased or decreased as a result of any such failure, and each Revolving
Lender shall be obligated to make the Revolving Loans required to be made by it
by the terms of this Agreement regardless of the failure by any other Revolving
Lender.
(d) REPAYMENT OF REVOLVING LOANS; TERMINATION OF REVOLVING
LOAN COMMITMENTS. The principal amount of all outstanding Revolving Loans shall
be repaid in full, and the Revolving Loan Commitments shall terminate, on the
Commitment Termination Date.
(e) USE OF PROCEEDS. Proceeds of the Revolving Loans shall be
used initially: (i) to refinance indebtedness of the Borrower and its
Subsidiaries outstanding on the Effective Date; and (ii) to pay fees and
expenses in connection with such refinancing. Subsequently, proceeds of the
Revolving Loans shall be used for working capital and other general corporate
purposes of the Borrower.
(f) FUNDING OF BORROWINGS. Each Revolving Lender shall make
each Revolving Loan to be made by it hereunder on the proposed Funding Date
thereof by wire transfer of immediately available funds by 11:00 a.m. (New York
time) to the Administrative Agent Account in an amount equal to such Revolving
Lender's Pro Rata Share. The Administrative Agent will make such Revolving Loans
available to the Borrower by promptly crediting the amounts so received, in like
funds, to the General Account. Unless the Administrative Agent shall have
received notice from a Revolving Lender prior to the proposed Funding Date of
Revolving Loans that such Revolving Lender will not make available to the
Administrative Agent such Revolving Lender's Pro Rata Share of such borrowing,
the Administrative Agent may assume that such Revolving Lender has made its Pro
Rata Share available on such date in accordance with the provisions of this
Section and may, in reliance upon such assumption, make available to the
32
Borrower a corresponding amount. In such event, if a Revolving Lender has not in
fact made its share of the applicable borrowing available to the Administrative
Agent (a "DEFAULTING LENDER"), then the applicable Revolving Lender and the
Borrower severally agree to pay to the Administrative Agent forthwith on demand
such corresponding amount with interest thereon, for each day from and including
the date such amount is made available to the Borrower to but excluding the date
of payment to the Administrative Agent, at (1) in the case of such Revolving
Lender, the greater of the Federal Funds Effective Rate and a rate determined by
the Administrative Agent in accordance with banking industry rules on interbank
compensation or (2) in the case of the Borrower, the interest rate applicable to
ABR Loans. If such Revolving Lender pays such amount to the Administrative
Agent, then such amount shall constitute such Revolving Lender's Revolving Loan.
The Administrative Agent shall not be obligated to transfer to a Defaulting
Lender any payments made by the Borrower to the Administrative Agent for the
Defaulting Lender's benefit, and, in the absence of such transfer to the
Defaulting Lender, the Administrative Agent shall transfer any such payments to
each other non-Defaulting Lender ratably in accordance with their Pro Rata
Shares (but only to the extent that such Defaulting Lender's borrowing was
funded by the other Revolving Lenders) or, if so directed by the Borrower and if
no Event of Default has occurred and is continuing (and to the extent such
Defaulting Lender's borrowing was not funded by the other Revolving Lenders),
retain the same to be re-advanced to the Borrower as if such Defaulting Lender
had made Revolving Loans to the Borrower. Subject to the foregoing, the
Administrative Agent may hold and, in its Permitted Discretion, set off such
Defaulting Lender's funding shortfall against that Defaulting Lender's Pro Rata
Share of all payments received from the Borrower or re-lend to the Borrower for
the account of such Defaulting Lender the amount of all such payments received
and retained by the Administrative Agent for the account of such Defaulting
Lender. Until a Defaulting Lender cures its failure to fund its Pro Rata Share
of any borrowing (1) solely for the purposes of voting or consenting to matters
with respect to the Loan Documents, such Defaulting Lender shall be deemed not
to be a "Revolving Lender" and such Defaulting Lender's Revolving Loan
Commitment shall be deemed to be zero, (2) such Defaulting Lender shall not be
entitled to any portion of the Unused Commitment Fee and (3) the portion of the
Unused Commitment Fee that would have otherwise been payable to the Defaulting
Lender shall accrue in favor of any Revolving Lender that funds the Defaulting
Lender's Pro Rata Share of such requested borrowing. This Section shall remain
effective with respect to such Defaulting Lender until (x) the Obligations under
this Agreement shall have been declared or shall have become immediately due and
payable, (y) the non-Defaulting Lenders, the Administrative Agent, and the
Borrower shall have waived such Defaulting Lender's default in writing, or (z)
the Defaulting Lender makes its Pro Rata Share of the applicable borrowing and
pays to Administrative Agent all amounts owing by the Defaulting Lender in
respect thereof. The operation of this Section shall not be construed to
increase or otherwise affect the Revolving Loan Commitment of any Revolving
Lender, to relieve or excuse the performance by such Defaulting Lender or any
other Revolving Lender of its duties and obligations hereunder, or to relieve or
excuse the performance by the Borrower of its duties and obligations hereunder.
SECTION 2.02. TRANCHE A TERM LOAN COMMITMENTS. b) TRANCHE A
TERM LOANS. Subject to the terms and conditions set forth herein, each Tranche A
Lender hereby severally agrees to make a term loan (each a "TRANCHE A TERM
LOAN") to the Borrower on the Effective Date in an aggregate principal amount
not to exceed such Tranche A Lender's Pro Rata Share of the Tranche A Term Loan
Commitments. Tranche A Term Loans, or any portion of the principal amount
thereof, that are paid may not be reborrowed.
33
(b) NOTICE OF BORROWING. When the Borrower desires to borrow
under SECTION 2.02(A), the Borrower shall deliver to the Administrative Agent a
Notice of Borrowing, signed by the Borrower, not later than 10:00 a.m. (New York
time) at least three (3) Business Days in advance of the Effective Date. Such
Notice of Borrowing shall specify (i) the amount of the proposed Tranche A Term
Loans and (ii) the proposed Effective Date, which must be a Business Day. The
Notice of Borrowing given pursuant to this SECTION 2.02 shall be irrevocable and
binding on the Borrower. On the Effective Date, all Tranche A Term Loans shall
be Eurodollar Loans.
(c) MAKING THE TRANCHE A TERM LOANS. i) The Administrative
Agent shall promptly notify each Tranche A Lender of the amount of the borrowing
of Tranche A Term Loans. Each such Tranche A Lender shall deposit in the
Administrative Agent Account an amount equal to its Pro Rata Share of the amount
of such borrowing in immediately available funds, not later than 11:00 a.m. (New
York time) on the Effective Date. Subject to the satisfaction of the conditions
precedent set forth in ARTICLE V, the Administrative Agent shall make the
proceeds of the Tranche A Term Loans received by it available to the Borrower at
the Administrative Agent's office in New York, New York on the Effective Date
and shall disburse such proceeds to the General Account.
(ii) Except as otherwise provided in this SECTION 2.02(C), all
Tranche A Term Loans under this Agreement shall be made by the Tranche A Lenders
simultaneously and proportionately to their Pro Rata Shares. The failure of any
Tranche A Lender to deposit the amount described in clause (i) above with the
Administrative Agent on the Effective Date shall not relieve any other Tranche A
Lender of its obligations hereunder to make its Tranche A Term Loan on the
Effective Date. No Tranche A Lender shall be responsible for any failure by any
other Tranche A Lender to perform its obligation to make a Tranche A Term Loan
hereunder nor shall the Tranche A Term Loan Commitment of any Tranche A Lender
be increased or decreased as a result of any such failure, and each Tranche A
Lender shall be obligated to make the Tranche A Term Loans required to be made
by it by the terms of this Agreement regardless of the failure by any other
Tranche A Lender.
(d) REPAYMENT OF TRANCHE A TERM LOANS. The aggregate principal
amount of the Tranche A Term Loans shall be payable in Dollars in installments
on the dates and in the amounts set forth below:
34
PRINCIPAL PAYMENT DATES QUARTERLY AMORTIZATION PAYMENT
----------------------- ------------------------------
June 30, 2006 $500,000
September 30, 2006 $500,000
December 31, 2006 $500,000
March 31, 2007 $500,000
June 30, 2007 $500,000
September 30, 2007 $500,000
December 31, 2007 $500,000
March 31, 2008 $500,000
June 30, 2008 $500,000
September 30, 2008 $500,000
December 31, 2008 $500,000
March 31, 2009 $500,000
June 30, 2009 $625,000
September 30, 2009 $625,000
December 31, 2009 $625,000
March 31, 2010 $625,000
June 30, 2010 $750,000
September 30, 2010 $750,000
December 31, 2010 $750,000
March 31, 2011 $750,000
Tranche A Maturity Date $13,500,000
-----------
Total $25,000,000
===========
PROVIDED that the final installment payable by the Borrower on the Tranche A
Maturity Date in respect of the Tranche A Term Loans shall be in an amount, if
such amount is different from that specified above, sufficient to repay the
aggregate outstanding principal amount of all Tranche A Term Loans.
(e) USE OF PROCEEDS. Proceeds of the Tranche A Term Loans
shall be used: (i) to refinance indebtedness of the Borrower and its
Subsidiaries outstanding on the Effective Date; and (ii) to pay fees and
expenses in connection with such refinancing.
SECTION 2.03. TRANCHE B TERM LOAN COMMITMENTS. c) TRANCHE B
TERM LOANS. Subject to the terms and conditions set forth herein, each Tranche B
Lender hereby severally agrees to make a term loan (each a "TRANCHE B TERM
LOAN") to the Borrower on the Effective Date in an aggregate principal amount
not to exceed such Tranche B Lender's Pro Rata Share of the Tranche B Term Loan
Commitments. Tranche B Term Loans, or any portion of the principal amount
thereof, that are paid may not be reborrowed.
(b) NOTICE OF BORROWING. When the Borrower desires to borrow
under SECTION 2.03(A), the Borrower shall deliver to the Administrative Agent a
Notice of Borrowing, signed by the Borrower, not later than 10:00 a.m. (New York
time) at least three (3) Business Days in advance of the Effective Date. Such
Notice of Borrowing shall specify (i) the amount of the proposed Tranche B Term
35
Loans and (ii) the proposed Effective Date, which must be a Business Day. The
Notice of Borrowing given pursuant to this SECTION 2.03 shall be irrevocable and
binding on the Borrower. On the Effective Date, all Tranche B Term Loans shall
be Eurodollar Loans.
(c) MAKING THE TRANCHE B TERM LOANS. i) The Administrative
Agent shall promptly notify each Tranche B Lender of the amount of the borrowing
of Tranche B Term Loans. Each such Tranche B Lender shall deposit in the
Administrative Agent Account an amount equal to its Pro Rata Share of the amount
of such borrowing in immediately available funds, not later than 11:00 a.m. (New
York time) on the Effective Date. Subject to the satisfaction of the conditions
precedent set forth in ARTICLE V, the Administrative Agent shall make the
proceeds of the Tranche B Term Loan received by it available to the Borrower at
the Administrative Agent's office in New York, New York on the Effective Date
and shall disburse such proceeds to the General Account.
(ii) Except as otherwise provided in this SECTION 2.03(C), all
Tranche B Term Loans under this Agreement shall be made by the Tranche B Lenders
simultaneously and proportionately to their Pro Rata Shares. The failure of any
Tranche B Lender to deposit the amount described in clause (i) above with the
Administrative Agent on the Effective Date shall not relieve any other Tranche B
Lender of its obligations hereunder to make its Tranche B Term Loan on the
Effective Date. No Tranche B Lender shall be responsible for any failure by any
other Tranche B Lender to perform its obligation to make a Tranche B Term Loan
hereunder nor shall the Tranche B Term Loan Commitment of any Tranche B Lender
be increased or decreased as a result of any such failure, and each Tranche B
Lender shall be obligated to make the Tranche B Term Loans required to be made
by it by the terms of this Agreement regardless of the failure by any other
Tranche B Lender.
(d) REPAYMENT OF TRANCHE B TERM LOANS. The aggregate principal
amount of the Tranche B Term Loans shall be payable in Dollars on the Tranche B
Maturity Date.
(e) USE OF PROCEEDS. Proceeds of the Tranche B Term Loans
shall be used: (i) to refinance indebtedness of the Borrower and its
Subsidiaries outstanding on the Effective Date; and (ii) to pay fees and
expenses in connection with such refinancing.
SECTION 2.04. PROMISE TO PAY; EVIDENCE OF DEBT.
(a) REVOLVING LOANS. The Borrower agrees to pay on the
Commitment Termination Date the principal amount of each Revolving Loan which is
made to the Borrower, and further agrees to pay all unpaid interest accrued
thereon, in accordance with the terms of this Agreement and any promissory notes
evidencing the Revolving Loans owing by the Borrower to the Revolving Lenders.
If any Revolving Lender shall request, the Borrower shall execute and deliver to
such Revolving Lender on the Effective Date a single promissory note to evidence
the Revolving Loans owing to such Revolving Lender and thereafter after giving
effect to any assignment thereof pursuant to SECTION 14.08, in substantially the
form of EXHIBIT D attached hereto and made a part hereof (all such promissory
notes and all amendments thereto, replacements thereof and substitutions
therefor being collectively referred to as the "REVOLVING NOTES"; and a
"REVOLVING NOTE" means any one of the Revolving Notes).
36
(b) TRANCHE A TERM LOANS. The Borrower agrees to pay the
principal amount of the Tranche A Term Loans in installments on the dates and in
the amounts set forth in SECTION 2.02(D) with a final installment on the Tranche
A Maturity Date, and further agrees to pay all unpaid interest accrued thereon,
in accordance with the terms of this Agreement and any promissory notes
evidencing the Tranche A Term Loans owing by the Borrower to the Tranche A
Lenders. If any Tranche A Lender shall request, the Borrower shall execute and
deliver to such Tranche A Lender on the Effective Date a single promissory note
to evidence the Tranche A Term Loan owing to such Tranche A Lender and
thereafter after giving effect to any assignment thereof pursuant to SECTION
14.08, in substantially the form of EXHIBIT E attached hereto and made a part
hereof (all such promissory notes and all amendments thereto, replacements
thereof and substitutions therefor being collectively referred to as the
"TRANCHE A TERM NOTES"; and a "TRANCHE A TERM NOTE" means any one of the Tranche
A Term Notes).
(c) TRANCHE B TERM LOANS. The Borrower agrees to pay the
principal amount of the Tranche B Term Loans on the Tranche B Maturity Date, and
further agrees to pay all unpaid interest accrued thereon, in accordance with
the terms of this Agreement and any promissory notes evidencing the Tranche B
Term Loans owing by the Borrower to the Tranche B Lenders. If any Tranche B
Lender shall request, the Borrower shall execute and deliver to such Tranche B
Lender on the Effective Date a single promissory note to evidence the Tranche B
Term Loan owing to such Tranche B Lender and thereafter after giving effect to
any assignment thereof pursuant to SECTION 14.08, in substantially the form of
EXHIBIT F attached hereto and made a part hereof (all such promissory notes and
all amendments thereto, replacements thereof and substitutions therefor being
collectively referred to as the "TRANCHE B TERM NOTES"; and a "TRANCHE B TERM
NOTE" means any one of the Tranche B Term Notes).
(d) REVOLVING LOAN ACCOUNT. The Revolving Loan Account shall
be maintained by the Administrative Agent and shall include a master account and
a subsidiary account for each Revolving Lender, in which accounts (taken
together) shall be recorded (i) the date and amount of each Revolving Loan made
hereunder, (ii) the effective date and amount of each Assignment and Acceptance
delivered to and accepted by it and the parties thereto with respect to a
Revolving Loan Commitment and one or more outstanding Revolving Loans, (iii) the
amount of any principal or interest due and payable or to become due and payable
from the Borrower to each Revolving Lender hereunder or under the Revolving
Notes, and (iv) the amount of any sum received by the Administrative Agent from
any Loan Party with respect to the Revolving Loans hereunder and each Revolving
Lender's share thereof.
(e) TERM LOAN ACCOUNT. The Term Loan Account shall be
maintained by the Administrative Agent and shall include a master account and a
subsidiary account for each Term Lender, in which accounts (taken together)
shall be recorded (i) the date and amount of each Term Loan made hereunder, (ii)
the effective date and amount of each Assignment and Acceptance delivered to and
accepted by it and the parties thereto with respect to the outstanding Term
Loans, (iii) the amount of any principal or interest due and payable or to
become due and payable from the Borrower to each Term Lender hereunder or under
the Term Notes, and (iv) the amount of any sum received by the Administrative
Agent from any Loan Party with respect to the Term Loans hereunder and each Term
Lender's share thereof.
37
SECTION 2.05. AUTHORIZED OFFICERS AND ADMINISTRATIVE AGENT. On
the Effective Date and from time to time thereafter as necessary to reflect
changes in the Authorized Officers, the Borrower shall deliver to the
Administrative Agent a secretary's certificate setting forth the names of the
officers of the Borrower authorized to request Revolving Loans and Term Loans on
behalf of the Borrower and containing a specimen signature of each such officer
or agent. The Administrative Agent shall be entitled to rely conclusively on
such officer's or agent's authority to request such Loan until the
Administrative Agent receives written notice to the contrary. In addition, the
Administrative Agent shall be entitled to rely conclusively on any written
notice sent to it by telecopy. The Administrative Agent shall have no duty to
verify the authenticity of the signature appearing on, or any telecopy or
facsimile of, any written Notice of Borrowing or any other document, and, with
respect to an oral request for such a Loan, the Administrative Agent shall have
no duty to verify the identity of any person representing himself or herself as
one of the officers or agents authorized to make such request or otherwise to
act on behalf of the Borrower. The Administrative Agent and the Lenders shall
not incur any liability to the Borrower or any other Person in acting upon any
telecopy or facsimile or telephonic notice referred to above which the
Administrative Agent in good faith believes to have been given by a duly
authorized officer or other person authorized to borrow on behalf of the
Borrower except in the case of gross negligence or willful misconduct by the
Administrative Agent or any Lender as determined in a final judgment by a court
of competent jurisdiction.
ARTICLE III
PAYMENTS AND OTHER COMPENSATION
SECTION 3.01. PREPAYMENTS; REDUCTIONS IN REVOLVING LOAN
COMMITMENTS.
(a) VOLUNTARY PREPAYMENTS/REDUCTIONS.
(i) The Borrower may, if there is Sufficient Liquidity, upon
at least ten (10) days' prior written notice by the Borrower to the
Administrative Agent, prepay at any time the principal amount of the
Term Loans, in whole or in part, PROVIDED that any prepayment of Term
Loans shall be in a minimum amount of $500,000 and in an integral
multiple of $500,000 (or such lesser amount as may then be
outstanding), and PROVIDED, FURTHER, that the Borrower pays the
Prepayment Premium, if any, required to be paid hereunder. Such
prepayment shall be applied FIRST to the repayment of the Tranche A
Term Loans in inverse order of maturity and SECOND, after the principal
amount and all accrued and unpaid interest with respect to the Tranche
A Term Loan have been paid in full, to the repayment of the Tranche B
Term Loans. Any notice of prepayment given to the Administrative Agent
under this SECTION 3.01(A)(I) shall specify the principal amount of the
Term Loans to be prepaid and the date of prepayment (which shall be an
Interest Payment Date or any other date; PROVIDED that any such
prepayments of Term Loans on any date other than an Interest Payment
Date shall be made subject to the payments set forth in SECTION 4.03
resulting therefrom). When notice of prepayment is delivered as
provided herein, the principal amount of the Term Loans specified in
the notice shall become due and payable on the date specified in such
notice and such notice shall be irrevocable. The Borrower shall pay a
prepayment premium (a "PREPAYMENT PREMIUM") with respect to each
prepayment of Term Loans (other than pursuant to SECTION 3.01(B)) as
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follows: (i) if a prepayment of Term Loans occurs during the period
from the Effective Date to but excluding the first anniversary of the
Effective Date, 3% of the principal amount of such prepayment, (ii) if
a prepayment of Term Loans occurs on or after the first anniversary of
the Effective Date and prior to but excluding the second anniversary of
the Effective Date, 2% of the principal amount of such prepayment,
(iii) if a prepayment of Term Loans occurs on or after the second
anniversary of the Effective Date and prior to the third anniversary of
the Effective Date, 1% of the principal amount of such prepayment and
(iv) if a prepayment is made on or after the third anniversary of the
Effective Date, no Prepayment Premium shall be payable. Any notice of
prepayment delivered by the Borrower in connection with any prepayment
of Terms Loans under this SECTION 3.01(A)(I) shall be deemed to be a
representation by the Borrower that such prepayment is being made in
compliance with this SECTION 3.01(A)(I).
(ii) The Borrower may, upon at least five (5) days' prior
written notice by the Borrower to the Administrative Agent, at any time
and from time to time, prepay the Revolving Loans in whole or in part
in a minimum amount of $250,000 and integral multiples of $50,000 (or
such lesser amount as may then be outstanding), without premium or
penalty; PROVIDED, HOWEVER, that any such prepayments of principal on
any date other than an Interest Payment Date shall be made subject to
the payments set forth in SECTION 4.03 resulting therefrom. Any notice
of prepayment given to the Administrative Agent under this SECTION
3.01(A)(II) shall specify the Revolving Loans to be prepaid, the date
(which shall be a Business Day) of prepayment, and the aggregate
principal amount of the prepayment. When notice of prepayment is
delivered as provided herein, the principal amount of the Revolving
Loans specified in the notice shall become due and payable on the
prepayment date specified in such notice and such notice shall be
irrevocable.
(iii) The Borrower may, upon at least five (5) days' prior
written notice by the Borrower to the Administrative Agent, at any time
and from time to time, terminate in whole, or permanently reduce in
part, the Revolving Loan Commitments. Any partial reduction of the
Revolving Loan Commitments shall be in an aggregate minimum amount of
$500,000 and integral multiples of $500,000 in excess of that amount
and shall reduce the Revolving Loan Commitment of each Revolving Lender
proportionately in accordance with its Pro Rata Share. Any notice of
termination or reduction given to the Administrative Agent under this
SECTION 3.01(A)(III) shall specify the date (which shall be a Business
Day) of such termination or reduction and, with respect to a partial
reduction, the aggregate principal amount thereof. When notice of
termination or reduction of the Revolving Loan Commitments is delivered
as provided herein, the principal amount of the Revolving Loans so
reduced shall become due and payable on the date specified in such
notice to the extent the Revolving Credit Exposure exceeds the
Revolving Loan Commitments after giving effect to such reduction. The
payments in respect of reductions and terminations described in this
SECTION 3.01(A)(III) may be made without premium or penalty. Once
reduced the Revolving Loan Commitment may not be increased or
reinstated.
(iv) If (A) the EBITDA of the Borrower and its consolidated
Subsidiaries in any Fiscal Year, as determined as of the last day of
such Fiscal Year, exceeds $13,000,000 and (B) there is Sufficient
39
Liquidity, the Borrower may, within five (5) days following the day the
annual financial statements are required to be delivered pursuant to
SECTION 7.01(C), prepay, without premium or penalty, the Term B Loans
in an amount up to the amount by which the Borrower's and its
consolidated Subsidiaries' EBITDA exceeds $13,000,000. Such prepayment
shall be applied PRO RATA to the repayment of the Tranche B Term Loans.
(b) MANDATORY PREPAYMENTS/REDUCTIONS.
(i) Within one Business Day following the Revolving Credit
Obligations exceeding the Revolving Loan Commitment, the Borrower shall
make or cause to be made a mandatory prepayment of the Revolving Credit
Obligations in an amount equal to such excess.
(ii) Within one Business Day following the receipt of Net Cash
Proceeds by any Loan Party or any of its Affiliates from a Disposition
(other than a Disposition (y) as a result of a Casualty or Condemnation
and (z) in connection with a sale of Capital Stock of TreeCon owned by
the Borrower) by the Borrower or any of its Subsidiaries, the Borrower
shall prepay the outstanding principal amount of the Term Loans and the
Revolving Loans in an amount equal to one hundred percent (100%) of the
Net Cash Proceeds from such Disposition. Such prepayment shall be
applied FIRST to the repayment of the Revolving Loans, PROVIDED that
the aggregate Revolving Loan Commitments shall be reduced by the amount
of such prepayment, SECOND to the repayment of the Tranche A Term Loans
in inverse order of maturity until all Tranche A Term Loans have been
paid in full, and THIRD to the repayment of the Tranche B Term Loans.
(iii) Within one Business Day following the receipt of Net
Cash Proceeds by any Loan Party or any of its Affiliates from the
Casualty or Condemnation of any Collateral, the Borrower shall prepay
the outstanding principal amount of the Term Loans and the Revolving
Loans in an amount equal to one hundred percent (100%) of the Net Cash
Proceeds so received, PROVIDED, HOWEVER, that the Borrower shall have
the option not to make the prepayment under this subsection (iii) with
respect to any Net Cash Proceeds and instead may apply such Net Cash
Proceeds to the costs of repairs, replacement or restoration of the
property of the Borrower, which is the subject of the Casualty or
Condemnation or to acquire other property or assets used or useful in
the business of the Borrower, up to an aggregate amount during any
period of twelve consecutive months not in excess of $1,500,000, so
long as (A) no Default or Event of Default shall have occurred and be
continuing, (B) the Borrower shall have given the Administrative Agent
and the Collateral Agent prior written notice of the intention to apply
such Net Cash Proceeds to the costs of repairs, replacement or
restoration as permitted in this clause (iii), (C) the Net Cash
Proceeds are immediately deposited into the General Account, and (D)
the Borrower commences the permitting process or the construction (if
applicable) with respect to such repairs, replacement or restoration
within 180 days after receiving such Net Cash Proceeds and completes
such repairs, replacements or restoration at the same location that the
loss, destruction or taking occurred within 12 months after receiving
such Net Cash Proceeds all in accordance with any applicable lease
obligations. Any Net Cash Proceeds on deposit in the General Account
40
relating to the costs of repairs, replacement or restoration shall be
used to repay Term Loans in accordance with this SECTION 3.01(B)(III)
if the Borrower is not in compliance with the immediately preceding
sentence. Any prepayment shall be applied FIRST to the repayment of the
Revolving Loans, PROVIDED that the aggregate Revolving Loan Commitments
shall be reduced by the amount of such prepayment, SECOND to the
repayment of the Tranche A Term Loans in inverse order of maturity
until all Tranche A Term Loans have been paid in full, and THIRD to the
repayment of the Tranche B Term Loans.
(iv) If the Borrower has any Excess Cash Flow as determined as
of the last day of each Fiscal Year, the Borrower shall, within one
Business Day following the day the annual financial statements are
required to be delivered pursuant to SECTION 7.01(C), (A) prepay the
outstanding principal amount of the Tranche A Term Loans in an amount
equal to fifty percent (50%) of the Excess Cash Flow for each such
Fiscal Year and (B) once the Tranche A Term Loans have been paid in
full, the Borrower shall offer to the Tranche B Lenders to prepay and,
if requested by the Tranche B Term Lenders, shall prepay, the
outstanding principal amount of the Tranche B Term Loans in an amount
equal to fifty percent (50%) of the Excess Cash Flow for each such
Fiscal Year. Such prepayment shall be applied PRO RATA to the repayment
of the Tranche A Term Loans in inverse order of maturity until the
Tranche A Term Loans shall have been paid in full and thereafter PRO
RATA to the repayment of the Tranche B Term LOANS.
(v) Nothing in this SECTION 3.01(B) shall be construed to
constitute the Lenders' consent to any transaction which is not
expressly permitted by ARTICLE IX.
SECTION 3.02. PAYMENTS.
(a) MANNER AND TIME OF PAYMENT. All payments of principal and
interest on the Loans and other Obligations (including, without limitation, fees
and expenses) which are payable to any Agent or the Lenders shall be made
without condition or reservation of right, in Dollars in immediately available
funds, deposited to the Administrative Agent Account not later than 11:00 a.m.
(New York time) on the date due. All payments shall be made by the Borrower
without set off, counterclaim, deduction or other defense to the Agents and the
Lenders.
(b) Except as otherwise provided herein, if any Lender shall
obtain any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) on account of any Obligation in excess of its
ratable share of payments on account of similar obligations obtained by all the
Lenders, such Lender shall forthwith purchase from the other Lenders such
participations in such similar obligations held by them as shall be necessary to
cause such purchasing Lender to share the excess payment ratably with each of
them; PROVIDED, HOWEVER, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be rescinded and such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery together with an amount equal to
such Lender's ratable share (according to the proportion of (i) the amount of
such Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender of any interest or other amount paid by the purchasing Lender
in respect of the total amount so recovered). The Borrower agrees that any
41
Lender so purchasing a participation from another Lender pursuant to this
SECTION 3.02 may, to the fullest extent permitted by law, exercise all of its
rights (including the Lender's right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
(c) APPORTIONMENT OF PAYMENTS. ii) Subject to the provisions
of SECTION 3.01 and SECTION 3.02(C)(II), all payments of principal and interest
in respect of outstanding Loans and all payments of fees and all other payments
in respect of any other Obligation shall be allocated among the Lenders, in
proportion to their respective Pro Rata Shares of such Obligations owing to them
or otherwise as provided herein or, in respect of payments not made on account
of Loans, as designated by the Person making payment at the time when such
payment is made.
(ii) After the occurrence of a Triggering Event, all payments
in respect of any Obligations and all proceeds of Collateral shall be allocated
by the Agents as follows:
(A) first, to pay obligations in respect of any
expense reimbursements, indemnities or other liabilities then
due to any Agent until such obligations have been paid in
full;
(B) second, to pay obligations in respect of any fees
then due to any Agent until such obligations have been paid in
full;
(C) third, to pay interest, fees, expense
reimbursements and indemnities due and unpaid in respect of
the Revolving Loans;
(D) fourth, to pay all principal amounts unpaid in
respect of the Revolving Loans, until all such amounts have
been paid in full;
(E) fifth, to pay interest, fees, expense
reimbursements and indemnities due and unpaid in respect of
the Tranche A Term Loans until such amounts have been paid in
full;
(F) sixth, to pay all principal amounts unpaid in
respect of the Tranche A Term Loans until all such amounts
have been paid in full;
(G) seventh, to pay interest, fees, expense
reimbursements and indemnities due and unpaid in respect of
the Tranche B Term Loans until such amounts have been paid in
full;
(H) eighth, to pay all principal amounts unpaid in
respect of the Tranche B Term Loans until all such amounts
have been paid in full; and
(I) ninth, to the Borrower;
PROVIDED, HOWEVER, if sufficient funds are not available to fund all payments to
be made in respect of any of the obligations described in any one of the
foregoing clauses (A) through (I), the available funds being applied with
respect to any such obligations referred to in such clause shall be allocated to
the payment of such obligations ratably, based on the proportion of each Agent's
or each Lender's interest in the aggregate outstanding obligations described in
such clause.
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(d) PAYMENTS ON NON-BUSINESS DAYS. Whenever any payment to be
made by the Borrower hereunder or under the Notes is stated to be due on a day
which is not a Business Day, the payment shall instead be due on the next
succeeding Business Day, and any such extension of time shall be included in the
computation of the payment of interest and fees hereunder.
SECTION 3.03. TAXES.
(a) PAYMENT OF TAXES. Except as set forth below, any and all
payments by the Borrower hereunder, under the Notes or under any other Loan
Document shall be made free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding, in the case of each Agent
and each Lender, respectively, taxes imposed on it by (i) the United States
except withholding taxes contemplated pursuant to SECTION 3.03(E)(II)(C) or (ii)
a Governmental Authority as a result of a connection or former connection (other
than merely being a party to this Agreement, participating in the transactions
contemplated herein, or enforcing rights hereunder) between such Agent or Lender
and the jurisdiction imposing such tax including without limitation, any
connection arising from such Agent or Lender being a citizen, domiciliary, or
resident of such jurisdiction, being organized in such jurisdiction, or having a
permanent establishment for fixed place of business therein (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "TAXES"). If the Borrower shall be
required by law to withhold or deduct any Taxes from or in respect of any sum
payable hereunder, under the Notes or under any other Loan Document to any
Lender, (x) such sum payable shall be increased by an amount of additional
interest so that after making all required withholdings or deductions (including
withholdings or deductions applicable to additional interest payable under this
Section 3.03) such Lender receives an amount equal to the sum it would have
received had no such withholdings or deductions been made, (y) the Borrower
shall make such withholdings or deductions, and (z) the Borrower shall pay the
full amount withheld or deducted to the relevant taxation authority or other
authority in accordance with applicable law. The Borrower shall not be required
to increase any such amounts payable to any Agent or any Lender with respect to
any Taxes or Other Taxes (i) that are attributable to such Agent's or Lender's
failure to comply with the requirements of SECTION 3.03(E) OR SECTION 3.03(F),
or (ii) that are United States withholding taxes imposed on amounts payable to
such Agent or Lender at the time such Agent or Lender becomes a party to this
Agreement, except to the extent that such Agent's or Lender's assignor (if any)
was entitled, at the time of assignment, to receive additional amounts from the
Borrower with respect to such Tax pursuant to this paragraph.
(b) OTHER TAXES. In addition, the Borrower agrees to pay any
present or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies which arise from and which relate directly to
the execution, delivery or registration of, or otherwise with respect to, this
Agreement, the Notes or any other Loan Document and all interest and penalties
related thereto other than the foregoing excluded Taxes (hereinafter referred to
as "OTHER TAXES").
43
(c) INDEMNIFICATION. The Borrower will indemnify each Lender
and each Agent that has fully complied with the requirements of SECTION 3.03(E)
against, and reimburse each, within twenty (20) days of a receipt of written
demand therefor, for the full amount of all Taxes and Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any Governmental
Authority on amounts payable under this SECTION 3.03) incurred or paid by such
Lender or such Agent (as the case may be) or any Affiliate of such Lender and
any liability (including penalties, interest, and out-of-pocket expenses paid to
third parties) arising therefrom or with respect thereto. A certificate as to
any amount payable to any Person under this SECTION 3.03 submitted by such
Person to the Borrower shall, absent manifest error, be final, conclusive and
binding upon all parties hereto.
(d) RECEIPTS. Within thirty (30) days after a request from the
Administrative Agent, the Borrower will furnish to the Administrative Agent, the
original or a certified copy of a receipt, if available, or other reasonably
available documentation reasonably satisfactory to the Administrative Agent
evidencing payment of such Taxes or Other Taxes. The Borrower will furnish to
the Administrative Agent upon the Administrative Agent's request an Officer's
Certificate stating that all Taxes and Other Taxes of which it is aware that are
due have been paid and that no additional Taxes or Other Taxes of which it is
aware are due.
(e) FOREIGN BANK CERTIFICATIONS. iii) Each Lender that is not
a United States Person (as defined in Section 7701(a)(30) of the Internal
Revenue Code) shall deliver to the Borrower and the Administrative Agent on or
prior to the Effective Date, or, in the case of a Lender that becomes a Lender
pursuant to SECTION 14.08 hereof, on or prior to the date on which such Lender
becomes a Lender pursuant to SECTION 14.08, a true and accurate certificate
executed in duplicate by a duly authorized officer of such Lender to the effect
that such Lender is eligible to receive payments hereunder and under the Notes
without deduction or withholding of United States federal income tax (I) under
the provisions of an applicable tax treaty concluded by the United States (in
which case the certificate shall be accompanied by two duly completed copies of
IRS Form W-8 BEN (or any successor or substitute form or forms)) or (II) under
Sections 1441(c)(1) or 1442(b) of the Internal Revenue Code (in which case the
certificate shall be accompanied by two duly completed copies of IRS Form W-8
ECI (or any successor form or forms)).
(ii) Each such Lender further agrees to deliver to the
Borrower and the Administrative Agent from time to time, a true and accurate
certificate executed in duplicate by a duly authorized officer of such Lender
before or promptly upon the occurrence of any event requiring a change in the
most recent certificate previously delivered by it to the Borrower and the
Administrative Agent pursuant to this SECTION 3.03(E) (including upon the
expiration of such form, upon the designation of a new lending office and at
such other times as may be necessary in the determination of the Borrower and
the Administrative Agent (each in the reasonable exercise of its discretion)).
Each certificate required to be delivered pursuant to this SECTION 3.03(E)(II)
shall certify as to one of the following:
(A) that such Lender can receive payments hereunder and under
the Notes without deduction or withholding of United States federal income tax
(in which case the certificate shall be accompanied by two duly completed copies
of IRS Form W-8 BEN or W-8 ECI, as applicable (or any successor form));
44
(B) that such Lender cannot continue to receive payments
hereunder and under the Notes without deduction or withholding of United States
federal income tax as specified therein but does not require additional payments
pursuant to SECTION 3.03(A) because it is entitled to recover the full amount of
any such deduction or withholding from a source other than the Borrower;
(C) that such Lender is no longer capable of receiving
payments hereunder and under the Notes without deduction or withholding of
United States federal income tax by reason of a change in law (including the
Internal Revenue Code or applicable tax treaty) after the later of the Effective
Date, or in the case of a Lender that becomes a Lender pursuant to SECTION 14.08
hereof, after the date on which a Lender became a Lender pursuant to SECTION
14.08, and that it is not capable of recovering the full amount of the same from
a source other than the Borrower; or
(D) that such Lender is no longer capable of receiving
payments hereunder without deduction or withholding of United States federal
income tax as specified therein other than by reason of a change in law
(including the Internal Revenue Code or applicable tax treaty) after the date on
which a Lender became a Lender pursuant to SECTION 14.08.
(f) DOMESTIC BANK CERTIFICATIONS. Each Lender that is a United
States Person (as defined in Section 7701(a)(30) of the Internal Revenue Code)
and is not a person whose name indicates that it is an "exempt recipient" (as
such term is defined in Section 1.6049-4(c)(ii) of the United States Treasury
Regulations) shall deliver to the Borrower and the Administrative Agent on or
prior to the Effective Date, or, in the case of a Lender that becomes a Lender
pursuant to SECTION 14.08 hereof, on or prior to the date on which such Lender
becomes a Lender pursuant to SECTION 14.08 hereof, two original copies of
Internal Revenue Service Form W-9 (or any successor forms), properly completed
and duly executed by such Lender, and such other documentation reasonably
requested by the Borrower, to establish that such Lender is eligible to receive
payments hereunder and under the Notes without deduction or withholding of
United States federal income tax.
(g) This SECTION 3.03 shall be the sole section of this
Agreement applicable to increased costs in respect of taxes and is subject to
the provisions of SECTION 14.07.
SECTION 3.04. INCREASED CAPITAL. Subject to the provisions of
SECTION 14.07, if after the Signing Date any Lender determines that (i) the
adoption or implementation of or any change in or in the interpretation or
administration of any law or regulation or any guideline or request from any
central bank or other Governmental Authority exercising jurisdiction, power or
control over any Lender (whether or not having the force of law), compliance
with which affects or would affect the amount of capital required or expected to
be maintained by such Lender or any corporation controlling such Lender and (ii)
the amount of such capital is increased by or based upon the making or
maintenance by any Lender of its Loans, any Lender's participation in or
obligation to participate in the Loans or other advances made hereunder or the
existence of any Lender's obligation to make Loans, then, upon written demand by
such Lender (with a copy of such demand to the Administrative Agent), the
Borrower agrees to pay to the Administrative Agent for the account of such
Lender, in the case of amounts claimed by such Lender under this SECTION 3.04,
45
within 10 Business Days of written demand therefor, from time to time as
specified by such Lender, additional amounts sufficient to compensate such
Lender or such corporation therefor. Such demand shall be accompanied by a
statement certifying in reasonable detail as to the amount of such compensation
and include a brief summary of the basis for such demand. Such demand shall be
conclusive and binding for all purposes, in the absence of manifest error.
ARTICLE IV
INTEREST AND FEES
SECTION 4.01. INTEREST ON THE LOANS AND OTHER OBLIGATIONS. (a)
RATE OF INTEREST. All Loans and the outstanding principal balance of all other
Obligations shall bear interest on the unpaid principal amount thereof from the
date such Loans are made and such other Obligations are due and payable until
paid in full, except as otherwise provided in SECTION 4.01(C), as follows:
(i) If an ABR Loan or such other Obligation (other than a
Eurodollar Loan), at a rate per annum equal to the Alternate Base Rate
plus the ABR Applicable Margin.
(ii) If a Eurodollar Loan, at a rate per annum equal to the
LIBOR determined for the applicable Interest Accrual Period PLUS the
Eurodollar Applicable Margin.
The applicable basis for determining the rate of interest on any Loan shall be
initially determined at the time a Notice of Borrowing is delivered by the
Borrower to the Administrative Agent. The applicable basis for determining the
rate of interest on such Loan shall be selected thereafter by the Borrower at
the time of a Notice of Conversion/Continuation is delivered by the Borrower to
the Administrative Agent.
(b) INTEREST PAYMENTS. iv) Interest accrued on each Loan shall
be payable in arrears (A) on each Interest Payment Date, commencing on the first
Interest Payment Date following the making of such Loan and (B) if not
theretofore paid in full, on the Maturity Date applicable to such Loan. Interest
accrued at the Default Rate will be payable on demand.
(c) DEFAULT INTEREST. Notwithstanding the rate of interest
specified in SECTION 4.01(A), and to the extent permitted by applicable law,
effective immediately upon the occurrence of any Payment Event of Default, but
only for as long thereafter as such Payment Event of Default shall be
continuing, the principal balance of all Loans and of all other Obligations
shall bear interest at a rate which is two percent (2.0%) per annum in excess of
the interest rate otherwise applicable pursuant to SECTION 4.01(A) in effect
from time to time (the "DEFAULT RATE").
(d) COMPUTATION OF INTEREST. Interest on all Obligations shall
be computed on the basis of (i) in the case of Eurodollar Loans, a year of 12
months of 30 days each or, in the case of a period that is less than a complete
calendar month, the actual number of days elapsed in the period during which
interest accrues, or (ii) in the case of ABR Loans, the actual number of days
elapsed in the period during which interest accrues based on a year of 365 or
366 days. In computing interest on any Loan, the date of the making of the Loan
shall be included and the date of payment shall be excluded; PROVIDED, HOWEVER,
if a Loan is repaid on the same day on which it is made, one (1) day's interest
shall be paid on such Loan.
46
(e) CONVERSION OR CONTINUATION. The Borrower shall have the
option (A) to convert at any time all or any part of the outstanding ABR Loans
to Eurodollar Loans or (B) to convert all or any part of its outstanding
Eurodollar Loans to ABR Loans on the next succeeding Interest Accrual Period
expiration date. To convert or continue a Loan under this SECTION 4.01(E), the
Borrower shall deliver a Notice of Conversion/Continuation to the Administrative
Agent no later than 10:00 a.m. (New York time) at least three (3) Business Days
in advance of the proposed conversion/continuation date. Promptly after receipt
of a Notice of Conversion/Continuation under this SECTION 4.01(E), the
Administrative Agent shall notify each Term Lender and each Revolving Lender by
telex or telecopy, or other similar form of transmission, of the proposed
conversion/continuation. Any Notice of Conversion/Continuation for conversion
to, or continuation of, a Loan shall be irrevocable, and the Borrower shall be
bound to convert or continue in accordance therewith.
SECTION 4.02. INCREASED COSTS. In each case, subject to the
provisions of SECTION 14.07, d) If any Change in Law shall (i) impose, modify or
deem applicable any reserve, special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended by, any
Lender, or (ii) impose on any Lender or the London interbank market any other
condition affecting this Agreement or the Loans made by such Lender; and the
result of any of the foregoing shall be to increase the cost to such Lender of
making or maintaining any Loan (or of maintaining its obligation to make any
such Loan) or to reduce the amount of any sum received or receivable by such
Lender hereunder (whether of principal, interest or otherwise), then the
Borrower, in the case of amounts claimed by the Lenders under this SECTION
4.02(A), will pay to such Lender such additional amount or amounts as will
compensate such Lender for such additional costs incurred or reduction suffered.
(b) Without duplication of the amounts paid in SECTION
4.02(C), if any Lender determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such
Lender's capital or on the capital of such Lender's holding company, if any, as
a consequence of this Agreement or the Loans made by such Lender to a level
below that which such Lender or such Lender's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to
capital adequacy), then from time to time the Borrower will pay to such Lender
such additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered.
(c) A certificate of a Lender setting forth the amount or
amounts necessary to compensate such Lender or its holding company, as the case
may be, as specified in paragraph (a), (b) or (c) of this Section shall be
delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay such Lender the amount shown as due on any such certificate
within 10 Business Days after receipt thereof. Such certificate shall be
conclusive and binding for all purposes, in the absence of manifest error.
(d) Failure or delay on the part of any Lender to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender's right to demand such compensation; PROVIDED that the Borrower shall not
be required to compensate a Lender pursuant to this Section for any increased
costs or reductions incurred more than 120 days prior to the date that such
Lender notifies the Borrower of the Change in Law giving rise to such increased
47
costs or reductions and of such Lender's intention to claim compensation
therefor; PROVIDED FURTHER that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the 120-day period referred
to above shall be extended to include the period of retroactive effect thereof.
SECTION 4.03. BREAK FUNDING PAYMENTS. In the event of the
payment of any principal of any Eurodollar Loan other than on the last day of
the Interest Accrual Period applicable thereto (including as a result of an
Event of Default), or the failure to borrow or prepay any Eurodollar Loan on the
date specified in any notice delivered pursuant hereto, then, in any such event,
the Borrower shall compensate each Lender for the loss, cost and expense
(excluding in any event any Applicable Margin or other lost profit) attributable
to such event. A certificate of any Lender setting forth any amount or amounts
that such Lender is entitled to receive pursuant to this Section shall be
delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay such Lender the amount shown as due on any such certificate
within 10 days after receipt thereof.
SECTION 4.04. FEES.
(a) AGENTS' FEE. The Borrower agrees to pay to the Agents such
fees as are set forth in the Fee Letter in accordance with the terms thereof.
(b) UNUSED COMMITMENT FEE. The Borrower agrees to pay to the
Administrative Agent, for the account of the Revolving Lenders in accordance
with their respective Pro Rata Shares, a fee (the "UNUSED COMMITMENT FEE"),
accruing at the rate equal to three-fourths of one percent (0.75%) per annum on
the daily unused portion of the Revolving Loan Commitments, such Unused
Commitment Fee to accrue from the Effective Date to the Commitment Termination
Date, such fee being payable monthly in arrears on (1) the last Business Day of
each calendar month and (2) if not theretofore paid in full, on the Commitment
Termination Date.
(c) CALCULATION AND PAYMENT OF FEES. All of the above fees
that are based on a per annum rate shall be calculated on the basis of a year of
12 months of 30 days each or, in the case of a period that is less than a
complete calendar month, the actual number of days elapsed in such period. All
fees payable hereunder shall be fully earned and nonrefundable when paid.
ARTICLE V
CONDITIONS TO LOANS
SECTION 5.01. CONDITIONS PRECEDENT TO THE SIGNING DATE. This
Agreement and each of the other Loan Documents listed in clause (a) below shall
enter into effect only upon, and subject to the satisfaction of, each of the
following conditions (the date on which all such conditions are satisfied being
the "SIGNING DATE"):
(a) DOCUMENTS. The Administrative Agent (on behalf of itself
and the Lenders) shall have received on or before the Signing Date all
of the following:
(i) this Agreement and all other agreements, instruments,
opinions, certificates and other documents described in the List of
Closing Documents (other than items I.B.1, I.B.2, I.B.3, II.A, II.B,
II.C, III.A, III.B, III.C, VII.A, VIII.A, VIII.B, IX.A, IX.B, IX.C,
IX.D and IX.E), each duly executed where appropriate and in form and
substance reasonably satisfactory to the Lenders and in sufficient
copies for each of the Lenders;
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(ii) a copy of the Financial Statements and the internal
consolidated and consolidating financial statements of the Borrower for
each month since October 1, 2005 (including for any month ending at
least 20 days prior to Signing Date). The Administrative Agent shall
also have received a pro forma balance sheet as of the end of each such
month and pro forma statements of income and cash flows for the
twelve-month period then ended; and
(iii) such additional documentation as the Administrative
Agent and the Lenders may reasonably request.
(b) NO MATERIAL ADVERSE EFFECT. No Material Adverse Effect
shall have occurred other than (i) prospective changes or developments
affecting an industry in which the Borrower operates in general and not
specifically relating to the Borrower or (ii) general business,
economic and regulatory conditions.
(c) EBITDA; FINANCIAL INFORMATION. The EBITDA of the Borrower
and its Subsidiaries for the latest twelve months ending not more than
30 days prior to the Signing Date is at least $13,000,000. The ratio of
total pro forma funded indebtedness to EBITDA for the Borrower on a
consolidated basis does not exceed 3.80:1.00. The Administrative Agent
shall not have become aware of any information or other matter
affecting the Borrower or any of its Subsidiaries that is inconsistent
in a material and adverse manner with any information or other matter
previously disclosed to the Administrative Agent.
(d) NO LEGAL IMPEDIMENTS. No law, regulation, order, judgment
or decree of any Governmental Authority shall exist, and the
Administrative Agent shall not have received any notice that any
action, suit, investigation, litigation or proceeding is pending or
threatened in any court or before any arbitrator or Governmental
Authority, which (i) purports to enjoin, prohibit, restrain or
otherwise affect (A) the ability of any Loan Party to perform its
obligations hereunder and under each Loan Document to which it is a
party, (B) the making of the Loans contemplated to be made on the
Effective Date or (C) the consummation of the transactions contemplated
hereby or contemplated under the other Loan Documents or (ii) would be
reasonably expected to result in a Material Adverse Effect.
(e) NO DEFAULT. No Event of Default or Default shall have
occurred and be continuing as of the Signing Date.
(f) REPRESENTATIONS AND WARRANTIES. All of the representations
and warranties contained in SECTION 6.01 and in each of the other Loan
Documents shall be true and complete in all material respects on and as
of the Signing Date.
(g) SUFFICIENT LIQUIDITY. The Borrower shall have an aggregate
amount of cash, Cash Equivalents and Availability equal to at least
$3,000,000 on the Signing Date, on a pro forma basis having given
effect to the transactions contemplated to be made on the Effective
Date.
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(h) PIPE TRANSACTION. The Borrower shall have provided
documentation satisfactory to the Administrative Agent in its sole
discretion that (i) all of the equity interests in the Borrower
previously owned by Xxxxxx Xxxxxxxxx Capital Partners have been sold to
other investors and (ii) the Borrower has filed a registration
statement related to such resales by those other investors with the
SEC, which registration statement has been declared effective and
remains effective on the Signing Date.
SECTION 5.02. CONDITIONS PRECEDENT TO THE EFFECTIVE DATE. The
obligation of each Lender to make the initial Loans requested to be made by it
shall be subject to the satisfaction of all of the following conditions
precedent (the date on which all such conditions are met being the "EFFECTIVE
DATE"); PROVIDED, that if any such condition is not satisfied by May 24, 2006,
each of the Loan Documents listed in Section 5.01(a) shall terminate and all
fees and expenses payable under the terms of the Fee Letter and this Agreement
shall be immediately due and payable):
(a) SIGNING DATE. The Signing Date shall have occurred not
more than 37 days before the Effective Date.
(b) DOCUMENTS. The Administrative Agent (on behalf of itself
and the Lenders) shall have received, on or before the Effective Date, items
I.B.1, I.B.2, I.B.3, II.A, II.B, II.C, III.A, III.B, III.C, VII.A, VIII.A,
VIII.B, IX.A, IX.B, IX.C, IX.D and IX.E described on the List of Closing
Documents, each duly executed and in form and substance reasonably satisfactory
to the Lenders, and such additional documentation as the Administrative Agent
and the Lenders may reasonably request.
(c) NO MATERIAL ADVERSE EFFECT. Since the Signing Date, no
Material Adverse Effect shall have occurred other than (i) prospective changes
or developments affecting an industry in which the Borrower operates in general
and not specifically relating to the Borrower or (ii) general business, economic
and regulatory conditions.
(d) EBITDA; FINANCIAL INFORMATION. The EBITDA of the Borrower
and its Subsidiaries for the latest twelve months ending not more than 30 days
prior to the Effective Date is at least $13,000,000. The ratio of total pro
forma funded indebtedness to EBITDA for the Borrower on a consolidated basis
does not, and after giving effect to the Loans requested to be made on the
Effective Date, will not exceed 3.80:1.00. Since the Signing Date, the
Administrative Agent shall not have become aware of any information or other
matter affecting the Borrower or any of its Subsidiaries that is inconsistent in
a material and adverse manner with any information or other matter previously
disclosed to the Administrative Agent.
(e) COLLATERAL INFORMATION; PERFECTION OF LIENS; INSURANCE.
The Administrative Agent shall have received complete and accurate information
from each Loan Party with respect to the name and the location of the principal
place of business and chief executive office for such Loan Party. All necessary
UCC financing statements shall have been filed and all other filings and
recordings shall have been made and all filing and recording fees and taxes
shall have been paid or duly provided for. The Administrative Agent shall be
satisfied that all Liens granted to the Collateral Agent with respect to all
Collateral are valid and effective and will be perfected and of first priority,
subject to Permitted Encumbrances. The Administrative Agent shall have received
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evidence of the insurance under all insurance policies to be maintained with
respect to the properties of each Loan Party forming part of the Collateral
required by the Administrative Agent, including endorsements in form and
substance reasonably acceptable to the Administrative Agent naming the
Collateral Agent as additional insured or loss payee, as the case may be.
(f) NO LEGAL IMPEDIMENTS. Since the Signing Date, no law,
regulation, order, judgment or decree of any Governmental Authority shall exist,
and the Administrative Agent shall not have received any notice that any action,
suit, investigation, litigation or proceeding is pending or threatened in any
court or before any arbitrator or Governmental Authority, which (i) purports to
enjoin, prohibit, restrain or otherwise affect (A) the ability of any Loan Party
to perform its obligations hereunder and under each Loan Document to which it is
a party, (B) the making of the Loans on the Effective Date or (C) the
consummation of the transactions contemplated hereby or contemplated under the
other Loan Documents or (ii) would be reasonably expected to result in a
Material Adverse Effect.
(g) NO DEFAULT. Since the Signing Date, no Event of Default or
Default shall have occurred and be continuing or would result from the making of
the Loans requested to be made on the Effective Date.
(h) REPRESENTATIONS AND WARRANTIES. All of the representations
and warranties contained in SECTION 6.01 and in each of the other Loan Documents
shall be true and complete in all material respects on and as of the Signing
Date and the Effective Date, both before and immediately after giving effect to
the making of the Loans to be made on the Effective Date.
(i) FEES AND EXPENSES PAID. There shall have been paid to the
Administrative Agent, for its account, the account of the Collateral Agent and
the respective accounts of the Lenders, all fees (including all fees described
in the Fee Letter) and expenses (including the reasonable legal fees and
expenses of counsel to the Collateral Agent and of counsel to the Administrative
Agent and local counsel to the Administrative Agent) due and payable on or
before the Effective Date.
(j) CONSENTS, ETC. Each Loan Party shall have received all
material consents and authorizations required pursuant to any material
Contractual Obligation with any other Person and shall have obtained all
material Permits of, and effected all notices to and filings with, any
Governmental Authority as may be necessary to allow such Loan Party lawfully (A)
to execute, deliver and perform, in all material respects, their respective
obligations hereunder, under the other Loan Documents to which each of them is,
or shall be, a party and each other agreement or instrument to be executed and
delivered by each of them pursuant thereto or in connection therewith, (B) to
consummate the transactions contemplated hereunder and under the other Loan
Documents and (C) to create and perfect the Liens on the Collateral to be owned
by each of them in the manner and for the purpose contemplated by the Loan
Documents.
(k) TERMINATION OF INDEBTEDNESS. Upon terms reasonably
satisfactory to the Administrative Agent (i) the complete discharge of all of
the Borrower's and its Subsidiaries' issued and outstanding indebtedness (except
for Permitted Indebtedness and except as otherwise permitted by the
Administrative Agent), and (ii) termination of each existing credit facility of
the Borrower and any of its Subsidiaries.
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(l) SUFFICIENT LIQUIDITY. The Borrower shall have an aggregate
amount of cash, Cash Equivalents and Availability equal to at least $3,000,000
on the Effective Date, on a pro forma basis having given effect to the
transactions contemplated hereunder.
(m) CASH MANAGEMENT SYSTEMS. The Borrower shall, and shall
cause each of its Subsidiaries to, establish and maintain, until the Maturity
Date, the cash management systems described in ARTICLE XII.
SECTION 5.03. CONDITIONS PRECEDENT TO ALL LOANS. The
obligation of each Lender to make any Loan requested to be made by it on any
Funding Date on or after the Effective Date on any date on or after the
Effective Date is subject to the satisfaction of each of the following
conditions precedent as of each such date:
(a) REPRESENTATIONS AND WARRANTIES. As of such date, both
before and after giving effect to the Loans to be made on such date, all of the
representations and warranties contained in SECTION 6.01 and in the other Loan
Documents shall be true and complete in all material respects.
(b) NO DEFAULTS. As of such date, no Event of Default or
Default shall have occurred and be continuing or would result from the making of
the requested Loan, the application of the proceeds therefrom.
(c) NO CHANGE IN CONDITION. As of such date, no material
adverse change shall have occurred and be continuing on the properties, assets,
financial condition, results of operations, business or business prospects of
the Borrower and its Subsidiaries taken as a whole (other than (i) prospective
changes or developments affecting an industry in which the Borrower operates in
general and not specifically relating to the Borrower or (ii) general business,
economic and regulatory conditions), since October 1, 2005.
Each request by the Borrower for a Loan, each submission by the Borrower of a
Notice of Borrowing, each acceptance by the Borrower of the proceeds of each
Loan made hereunder shall constitute a representation and warranty by the
Borrower as of the Funding Date in respect of such Loan that all conditions set
forth in this SECTION 5.02 have been satisfied.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. REPRESENTATIONS AND WARRANTIES. In order to
induce the Lenders to enter into this Agreement and to make the Loans, the
Borrower hereby represents and warrants as follows:
(a) ORGANIZATION, GOOD STANDING, ETC. The Borrower (i) is a
corporation duly organized, validly existing and in good standing under
the laws of the State of Nevada, (ii) has all requisite power and
authority to conduct its business as now conducted and as presently
contemplated and to make the borrowings hereunder, and to execute and
52
deliver each Loan Document to which it is a party, and to consummate
the transactions contemplated thereby, and (iii) is duly qualified to
do business and is in good standing in each jurisdiction in which the
character of the properties owned or leased by it or in which the
transaction of its business makes such qualification necessary, except
where the failure to so qualify or to be in good standing would not
reasonably be expected to have a Material Adverse Effect.
(b) AUTHORIZATION, ETC. The execution, delivery and
performance by the Borrower of each Loan Document to which it is or
will be a party and the transactions contemplated thereunder, (i) have
been or, with respect to Subsidiaries of the Borrower formed or
acquired hereafter, will be, duly authorized by all necessary
corporate, limited liability company or partnership action, as
applicable, (ii) do not and will not contravene its Governing Documents
(iii) do not and will not violate any Requirements of Law or any
material Contractual Obligation of the Borrower binding on or otherwise
affecting it or any of its properties, and (iv) do not and will not
result in or require the creation of any Lien (other than pursuant to
any Loan Document) upon or with respect to any of its properties. The
Borrower has the requisite corporate power and authority to execute,
deliver and perform each of the Loan Documents to which it is a party.
(c) GOVERNMENTAL APPROVALS. No authorization or approval or
other action by, and no notice to or filing with, any Governmental
Authority that has not been obtained is required in connection with the
due execution, delivery and performance by the Borrower of each Loan
Document to which it is a party.
(d) ENFORCEABILITY OF LOAN DOCUMENTS. Each of the Loan
Documents to which the Borrower is a party has been duly executed and
delivered by the Borrower and constitutes the legal, valid and binding
obligation of the Borrower, enforceable against the Borrower in
accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws, or by general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).
(e) CAPITALIZATION. On the Signing Date, the authorized
Capital Stock of the Borrower, and the issued and outstanding Capital
Stock of the Borrower, are as set forth on SCHEDULE 6.01(E). All of the
issued and outstanding shares of Capital Stock of the Borrower have
been validly issued and are fully paid and nonassessable, and the
holders thereof are not entitled to any preemptive, first refusal or
other similar rights. SCHEDULE 6.01(E) sets forth each plan pursuant to
which shares of the Capital Stock of the Borrower are issuable as of
the Signing Date, copies of which plans have been delivered to the
Administrative Agent under this Agreement, in the form and on the terms
in effect on the Signing Date, and the number of shares of Capital
Stock of the Borrower issuable under each such plan. As of the Signing
Date, except as set forth on SCHEDULE 6.01(E), there are no outstanding
debt or equity securities of the Borrower and no outstanding
obligations of the Borrower convertible into or exchangeable for, or
warrants, options or other rights for the purchase or acquisition from
the Borrower, or other obligations of the Borrower to issue, directly
or indirectly, any shares of Capital Stock of any such Person.
(f) SUBSIDIARIES. The Borrower has no Subsidiaries.
53
(g) LITIGATION. Except as set forth in SCHEDULE 6.01(G), there
is no pending or, to the knowledge of the Borrower, threatened action,
suit or proceeding affecting the Borrower or any of its properties or
assets before any court or other Governmental Authority or any
arbitrator that (A) would reasonably be expected to have a Material
Adverse Effect or (B) challenges the validity of this Agreement or any
other Loan Document or any transaction contemplated hereby or thereby.
(h) FINANCIAL CONDITION; MATERIAL ADVERSE EFFECT.
(i) The Financial Statements, copies of which have been
delivered to the Agents, fairly present, in all material respects, the
consolidated financial condition of the Borrower as at the respective
dates thereof and the consolidated results of operations of the
Borrower for the fiscal periods ended on such respective dates, all in
accordance with GAAP (subject to normal year-end adjustments and
absence of footnotes in the case of any quarterly statement).
(ii) The Borrower has heretofore furnished to the
Administrative Agent under this Agreement (i) projected monthly balance
sheets, income statements and statements of cash flows of the Borrower
for the period from October 2, 2005 through September 30, 2006, and
(ii) projected annual balance sheets, income statements and statements
of cash flows of the Borrower for the Fiscal Years ending in 2006
through 2010, in each case as updated from time to time pursuant to
SECTION 7.01(E). Such projections, as so updated, have been prepared in
good faith by the Borrower, and have been based on assumptions believed
by the Borrower to be reasonable at the time made, and the Borrower is
not aware of any facts or information that would lead it to believe
that such projections, as so updated, are incorrect or misleading in
any material respect (it being understood and agreed that projections
as to future events are not to be viewed as facts or guaranties of
future performance, that actual results during the period or periods
covered by such projections may differ from the projected results and
that such differences may be material and that the Borrower makes no
representation that such projections will in fact be realized).
(iii) Since October 2, 2005, no event or development has
occurred and is continuing which has had or would have a Material
Adverse Effect (other than (i) prospective changes or developments
affecting an industry in which the Borrower operates in general and not
specifically relating to the Borrower or (ii) general business,
economic and regulatory conditions).
(i) COMPLIANCE WITH LAW, ETC. The Borrower is not in violation
of its Governing Documents, any material Requirements of Law, any
judgment or order of any Governmental Authority applicable to it or any
of its property or assets, or any material term of any Contractual
Obligation binding on it or any of its properties except for any such
violations which have not had and would not reasonably be expected to
have a Material Adverse Effect.
(j) ERISA. Except as disclosed on SCHEDULE 6.01(J), neither
the Borrower nor any of its ERISA Affiliates is now maintaining or
contributing to, or has ever maintained or contributed to, or has ever
been obligated to contribute to, any Benefit Plan or Multiemployer
Plan.
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(k) TAXES, ETC. All Federal, state, provincial and material
local tax returns and other material reports required by applicable law
to be filed by the Borrower have been filed, or extensions have been
obtained, except to the extent subject to a Permitted Protest, and all
taxes shown on such tax returns to be due and payable and all
assessments, fees and other governmental charges upon the Borrower and
upon its properties, assets, income, businesses and franchises that are
due and payable have been paid when due and payable (excluding taxes
the non-payment of which would not have a Material Adverse Effect).
(l) MARGIN REGULATIONS. The Borrower is not nor will it be
engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulations
T, U or X), and no proceeds of any Loan will be used to purchase or
carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock. The pledge of the collateral
pursuant to the Loan Documents does not violate Regulation T, U or X.
(m) NATURE OF BUSINESS. The Borrower is not engaged in any
business other than production, packaging and distribution of packaged
food products and reasonable extensions thereof and businesses related
or complementary thereto or otherwise permitted under SECTIONS 9.03 and
9.04.
(n) PERMITS, ETC. The Borrower has, and is in compliance with,
all material permits, licenses, authorizations, approvals, entitlements
and accreditations (collectively, the "PERMITS") required for such
Person lawfully to own, lease, manage or operate each business
currently owned, leased, managed or operated by such Person, except
where the failure to have or to so comply would not reasonably be
expected to have a Material Adverse Effect. No condition exists or
event has occurred which, in itself or with the giving of notice or
lapse of time or both, would result in the suspension, revocation,
impairment, forfeiture or non-renewal of any such permit, license,
authorization, approval, entitlement or accreditation, and there is no
claim that any thereof is not in full force and effect.
(o) PROPERTIES.
(i) The Borrower has good and marketable title to, or valid
leasehold interests in, all property and assets material to its
business, free and clear of all Liens except Permitted Encumbrances.
The properties are in good working order and condition, ordinary wear
and tear excepted.
(ii) SCHEDULE 6.01(O) sets forth a complete and accurate list
as of the Signing Date of the location, by state and street address, of
all real property owned or leased by the Borrower. As of the Signing
Date, the Borrower has valid leasehold interests in the Leases
described on SCHEDULE 6.01(O) to which it is a party as lessee. On the
Signing Date, the Borrower has no obligations as lessee for the payment
of rent for any real or personal property other than the Operating
Lease Obligations set forth on SCHEDULE 6.01(O) and other than leases
in the ordinary course of business where annual rental payments are
less than $50,000. SCHEDULE 6.01(O) sets forth with respect to each
55
such Lease, the commencement date, termination date, renewal options
(if any) and annual base rents. Each such Lease is valid and
enforceable in accordance with its terms in all material respects and
is in full force and effect. No consent or approval of any landlord or
other third party in connection with any such Lease is necessary for
the Borrower to enter into and execute the Loan Documents to which it
is a party, except as set forth on SCHEDULE 6.01(O). To the Borrower's
knowledge as of the Signing Date, (a) no other party to any such Lease
is in default of its obligations thereunder, (b) the Borrower (or any
other party to any such Lease) has not at any time delivered or
received any notice of default which remains uncured under any such
Lease, and (c) as of the Signing Date, no event has occurred which,
with the giving of notice or the passage of time or both, would
constitute a default by the Borrower under any such Lease, that, with
respect to (a) or (b) above would be reasonably expected to result in a
Material Adverse Effect.
(p) FULL DISCLOSURE. None of the reports, financial
statements, certificates or other written information furnished by or
on behalf of the Borrower to the Administrative Agent under this
Agreement in connection with the negotiation of this Agreement or
delivered hereunder (as modified or supplemented by other information
so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, taken
as a whole, in the light of the circumstances under which it was made,
not materially misleading; PROVIDED that (i) to the extent any such
reports, financial statements, certificates or other written
information therein was based upon or constitutes a forecast or
projection, the Borrower represents only that it acted in good faith
and utilized assumptions believed by it to be reasonable at the time
made (it being understood and agreed that projections as to future
events are not to be viewed as facts or guaranties of future
performance, that actual results during the period or periods covered
by such projections may differ from the projected results and that such
differences may be material and that the Borrower makes no
representation that such projections will in fact be realized) and (ii)
as to statements, information and reports specified as having been
supplied by third parties, other than Affiliates of the Borrower, the
Borrower represents only that it is not aware (without any independent
investigation) of any material misstatement or omission therein. As of
the Signing Date, there is no contingent liability or obligation that
would reasonably be expected to have a Material Adverse Effect which
has not been set forth in a footnote included in the Financial
Statements or a schedule hereto.
(q) ENVIRONMENTAL MATTERS. Except as set forth on SCHEDULE
6.01(Q), (i) the operations of the Borrower are in compliance with
applicable Environmental Laws, except where the failure to so comply
would not reasonably be expected to have a Material Adverse Effect;
(ii) there has been no Release on, in, at, to, from or under any of the
properties owned or operated by the Borrower or, to the Borrower's
knowledge, a predecessor in interest, which would reasonably be
expected to have a Material Adverse Effect; (iii) no Environmental
Action has been asserted against the Borrower or, to the Borrower's
knowledge, any predecessor in interest which is unresolved, nor does
the Borrower have knowledge or notice of any threatened or pending
Environmental Action against the Borrower or, to the Borrower's
knowledge, any predecessor in interest which would reasonably be
expected to have a Material Adverse Effect; and (iv) to the knowledge
of the Borrower, no Environmental Actions have been asserted against
any facilities that may have received Hazardous Materials generated by
the Borrower or any predecessor in interest which would reasonably be
expected to have a Material Adverse Effect.
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(r) INSURANCE. The Borrower keeps its property adequately
insured and maintains (i) insurance to such extent and against such
risks, including fire, as is customary with companies in the same or
similar businesses, (ii) workmen's compensation insurance in the amount
required by applicable law, (iii) public liability insurance, which
shall include product liability insurance, but only to the extent and
in the amount customary with companies in the same or similar business
against claims for personal injury or death on properties owned,
occupied or controlled by it, and (iv) such other insurance as may be
required by law (including, without limitation, against larceny,
embezzlement or other criminal misappropriation). SCHEDULE 6.01(R) sets
forth a list of all insurance maintained by the Borrower on the Signing
Date.
(s) SOLVENCY. After giving effect to the transactions
contemplated by this Agreement and before and after giving effect to
each Loan, the Borrower is Solvent.
(t) LOCATION OF BANK ACCOUNTS. SCHEDULE 6.01(T) sets forth a
complete and accurate list as of the Signing Date of all Deposit
Accounts and Securities Accounts (other than Exempt Deposit Accounts)
of the Borrower, together with a description thereof (i.e., the bank or
broker dealer at which such Deposit Account or Securities Account is
maintained and the account number and the purpose thereof). The
Borrower has no other Deposit Account and Securities Accounts.
(u) INTELLECTUAL PROPERTY. Except as set forth on SCHEDULE
6.01(U), the Borrower owns or licenses or otherwise has the right to
use all licenses, patents, patent applications, trademarks, trademark
applications, service marks, tradenames, copyrights, copyright
applications, franchises, industrial designs, and other material
intellectual property rights that are necessary for the operations of
its businesses as currently conducted, without, to the knowledge of the
Borrower, infringement upon or conflict with the rights of any other
Person with respect thereto, except for such infringements and
conflicts which, individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect. Set forth on SCHEDULE
6.01(U) is a complete and accurate list as of the Signing Date of all
such material licenses, patents, patent applications, registered
trademarks, trademark applications, registered service marks,
tradenames, registered copyrights, copyright applications, industrial
designs and franchises of the Borrower. Except as set forth in SCHEDULE
6.01(U), to the knowledge of the Borrower, no slogan or other
advertising device, product, process, method, substance, part or other
material now employed by the Borrower in the conduct of its businesses,
infringes upon or conflicts with any rights owned by any other Person,
except for such infringements and conflicts which would not reasonably
be expected to have, individually or in the aggregate, a Material
Adverse Effect, and no claim or litigation regarding any of the
foregoing is pending or threatened against the Borrower, except for
such claims or litigation which would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
(v) MATERIAL CONTRACTS. Set forth on SCHEDULE 6.01(V) is a
complete and accurate list as of the Signing Date of all key customer
and vendor contracts that are not filed as exhibits to the Borrower's
Exchange Act filings. The Borrower has filed all Material Contracts
with the SEC.
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(w) HOLDING COMPANY AND INVESTMENT COMPANY ACTS. The Borrower
is not (i) a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935, as amended,
or (ii) an "investment company" or an "affiliated person" or "promoter"
of, or "principal underwriter" of or for, an "investment company", as
such terms are defined in the Investment Company Act of 1940, as
amended.
(x) EMPLOYEE AND LABOR MATTERS. As of the Signing Date, except
as set forth on SCHEDULE 6.01(X), there is (A) no unfair labor practice
complaint pending or, to the best of the Borrower's knowledge,
threatened against the Borrower before any Governmental Authority and
no grievance or arbitration proceeding pending or, to the best of such
the Borrower's knowledge, threatened against the Borrower which arises
out of or under any collective bargaining agreement, and (B) no strike,
labor dispute, slowdown, stoppage or similar action or grievance
pending or, to the best of the Borrower's knowledge, threatened against
the Borrower that, in the case of (A) or (B) would reasonably be
expected to have a Material Adverse Effect.
(y) LOCATION OF COLLATERAL; CHIEF PLACE OF BUSINESS; CHIEF
EXECUTIVE OFFICE FEIN; NAME. As of the Signing Date, there is no
location at which the Borrower has any Inventory (except for Inventory
in transit) other than those locations listed on SCHEDULE 6.01(Y).
SCHEDULE 6.01(Y) contains a true, correct and complete list, as of the
Signing Date, of the legal names and addresses of each warehouse at
which Inventory of the Borrower is stored. None of the receipts
received by the Borrower from any warehouse states that the goods
covered thereby are to be delivered to bearer or to the order of a
named Person or to a named Person and such named Person's assigns.
SCHEDULE 6.01(Y) sets forth a complete and accurate list as of the
Signing Date of (A) each place of business (other than a location that
is only a sales office) of the Borrower, (B) the chief executive office
of the Borrower, (C) the exact legal name of the Borrower, (D) the
jurisdiction of organization of the Borrower, (E) the organizational
identification number of the Borrower (or indicates that the Borrower
has no organizational identification number) and (F) the federal
employer identification number of the Borrower.
(z) SECURITY INTERESTS. The Security Agreement creates in
favor of the Collateral Agent a legal, valid and enforceable security
interest in the Collateral secured thereby. Upon the filing of the
UCC-1 financing statements described in SECTION 5.02(E), such security
interests in and Liens on the Collateral granted thereby shall be
perfected security interests, in each case to the extent a Lien thereon
can be perfected by filing pursuant to the UCC, and no further
recordings or filings are or will be required in connection with the
creation, perfection or enforcement of such security interests and
Liens, other than (i) the filing of continuation statements or
financing change statements in accordance with applicable law and (ii)
additional filings if the Borrower changes its name, identity or
organizational structure or the jurisdiction in which the Borrower is
organized.
ARTICLE VII
REPORTING COVENANTS
The Borrower covenants and agrees that so long as any Commitments are
outstanding and until payment in full of all of the Obligations:
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SECTION 7.01. FINANCIAL STATEMENTS. The Borrower and each of
its Subsidiaries shall maintain a system of accounting established and
administered in accordance with sound business practices to permit preparation
of consolidated financial statements in conformity with GAAP, and each of the
financial statements described below shall be prepared from such system and
records. The Borrower shall deliver or cause to be delivered to the
Administrative Agent:
(a) MONTHLY REPORTS. Within thirty (30) days after the end of
each of the first two (2) fiscal months in each fiscal quarter, the consolidated
balance sheets of the Borrower and its consolidated Subsidiaries as at the end
of such fiscal month (and showing the same period from the previous Fiscal Year)
and the related unaudited consolidated statements of income and cash flow of the
Borrower and its consolidated Subsidiaries for such fiscal month and the related
unaudited consolidating statements of income for such fiscal month and for the
period commencing on the first day of such Fiscal Year and ending the last day
of such fiscal month (and showing the same periods from the previous Fiscal
Year), certified by the Authorized Officer of the Borrower as fairly presenting,
in all material respects, the consolidated financial position of the Borrower
and its consolidated Subsidiaries as at the dates indicated and the results of
their operations and cash flow for the fiscal months indicated, such
consolidated balance sheets and consolidated statements of income and cash flow
in accordance with GAAP, subject to normal year end adjustments and the absence
of footnotes.
(b) QUARTERLY REPORTS. Within forty-five (45) days after the
end of each of the first three (3) fiscal quarters in each Fiscal Year, the
unaudited consolidated balance sheets of the Borrower and its consolidated
Subsidiaries as at the end of such period, the related unaudited consolidated
statements of income and cash flow of the Borrower and its consolidated
Subsidiaries and the related unaudited consolidating statements of income for
such fiscal quarter, certified by the Authorized Officer of the Borrower as
fairly presenting, in all material respects, the consolidated financial position
of the Borrower and its consolidated Subsidiaries as at the dates indicated and
the results of its operations and cash flow for the fiscal quarters indicated,
such consolidated balance sheets and consolidated statements of income and cash
flow in accordance with GAAP, subject to normal year end adjustments and the
absence of footnotes.
(c) ANNUAL REPORTS. Within ninety (90) days after the end of
each Fiscal Year, (i) the audited consolidated balance sheets of the Borrower
and its consolidated Subsidiaries as of the end of such Fiscal Year, the related
audited consolidated statements of income, stockholders' equity and cash flow of
the Borrower and its consolidated Subsidiaries and the related unaudited
consolidating statements of income of the Borrower and its consolidated
Subsidiaries for such Fiscal Year, and (ii) a report thereon of Ernst & Young or
other independent certified public accountants reasonably acceptable to the
Administrative Agent, which report shall be unqualified in all material respects
and shall state that such financial statements fairly present in all material
respects the consolidated financial position of the Borrower and its
consolidated Subsidiaries at the dates indicated and the results of their
operations and cash flow for the periods indicated and, with respect to such
consolidated balance sheets and consolidated statements of income, stockholders'
equity and cash flow in conformity with GAAP applied on a basis consistent with
prior years and that the examination by such accountants in connection with such
consolidated and consolidating financial statements has been made in accordance
with generally accepted auditing standards.
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(d) OFFICER'S CERTIFICATE. Together with each delivery of any
financial statement pursuant to subsections (a), (b) and (c) of this SECTION
7.01, (i) an Officer's Certificate substantially in the form of EXHIBIT H
attached hereto and made a part hereof, stating that the Authorized Officer
signatory thereto has reviewed the terms of the Loan Documents, and has made, or
caused to be made under his supervision, a review in reasonable detail of the
transactions and consolidated and consolidating (where applicable) financial
condition of the Borrower and its consolidated Subsidiaries during the
accounting period covered by such financial statements, that such review has not
disclosed the existence during or at the end of such accounting period, and that
such officer does not have knowledge of the existence as at the date of such
Officer's Certificate, of any condition or event which constitutes an Event of
Default or Default, or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action the
Borrower has taken, is taking and proposes to take with respect thereto and (ii)
a certificate substantially in the form of EXHIBIT I attached hereto and made a
part hereof (the "COMPLIANCE CERTIFICATE"), signed by the Borrower's chief
financial officer or vice president-finance, setting forth calculations (with
such specificity as the Administrative Agent may reasonably request) for the
period then ended which demonstrate compliance, when applicable, with the
provisions of ARTICLE IX and ARTICLE X.
(e) BUDGETS; BUSINESS PLANS; FINANCIAL PROJECTIONS. As soon as
practicable and in any event not later than the beginning of each Fiscal Year of
the Borrower (i) a monthly budget for such Fiscal Year, (ii) an annual business
plan for such Fiscal Year, substantially in the form of the business plan
heretofore delivered to the Administrative Agent, showing variances from the
business plan delivered to the Administrative Agent for the preceding Fiscal
Year and (iii) a consolidated and consolidating plan and financial forecast,
prepared in accordance with the Borrower's normal accounting procedures applied
on a consistent basis, for each succeeding Fiscal Year prior to the Maturity
Date, including (A) a forecasted consolidated balance sheet, and the related
consolidated statements of income, stockholders' equity and cash flows of the
Borrower and its consolidated Subsidiaries for and as of the end of such Fiscal
Year, and the forecasted consolidating statements of income of the Borrower and
its consolidated Subsidiaries for such Fiscal Year, (B) forecasted consolidated
balance sheets, and the related consolidated statements of income, stockholders'
equity and cash flows of the Borrower and its consolidated Subsidiaries and as
of the end of each fiscal month of such Fiscal Year, and the forecasted
consolidating statements of income of the Borrower and its consolidated
Subsidiaries for and as of the end of each fiscal month of such Fiscal Year and
(C) the amount of forecasted Capital Expenditures for such Fiscal Year.
SECTION 7.02. OTHER FINANCIAL INFORMATION. f) The Borrower
shall deliver to the Administrative Agent such other information, with respect
to (i) the Collateral or (ii) the Borrower's business, financial condition,
results of operations, properties, business or business prospects as any Agent
or any Lender may, from time to time, reasonably request. The Borrower hereby
authorizes the Administrative Agent and its representatives to communicate
directly with the accountants so long as an Authorized Officer of the Borrower
participates in such communication and authorizes the accountants to disclose to
each Agent, each Lender and their respective representatives any and all
financial statements and other financial information, including copies of any
final management letter that such accountants may have with respect to the
Collateral or the Borrower's financial condition, results of operations,
properties and business prospects. The Agents, the Lenders and such
representatives shall treat any non-public information so obtained as
confidential, and shall not purchase, sell, or "sell short" any securities of
the Borrower while in the possession of material non-public information provided
by the Borrower.
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(b) The Borrower shall deliver to the Administrative Agent
copies of all documents and financial statements, reports and notices, if any,
sent or made available generally by the Borrower to the holders of its
Securities or to a trustee under any indenture or filed with the SEC, including
without limitation all Form 10-Q quarterly reports, Form 10-K annual reports and
Form 8-K current reports, and promptly upon their becoming available, copies of
all press releases and other statements made available by the Borrower to the
public concerning material developments in the business of the Borrower or any
of its Subsidiaries and materials, information, reports, notices and proxy
statements sent or made available by the Borrower to the holders of its
Securities generally in their capacities as such.
(c) The Borrower shall deliver to the Administrative Agent
copies of any final management reports delivered to the Borrower by the
accountants in connection with the financial statements delivered pursuant to
SECTION 7.01.
(d) Each Loan Party shall deliver to the Administrative Agent
as soon as possible, and in any event within five (5) days after execution,
receipt or delivery thereof, copies of any material notices that such Loan Party
executes or receives in connection with a Disposition of the Capital Stock of,
or all or substantially all of the assets of, such Loan Party.
(e) The Borrower shall deliver to the Administrative Agent
immediately after the filing thereof, copies of the Borrower's federal income
tax returns, and any amendments thereto, filed with the Internal Revenue
Service.
SECTION 7.03. EVENTS OF DEFAULT. Promptly upon any Loan Party
obtaining knowledge (i) of any condition or event which constitutes an Event of
Default or Default, or becoming aware that any Lender or any Agent has given any
notice with respect to a claimed Event of Default or Default under this
Agreement, (ii) that any Person has given any notice to such Loan Party or taken
any other action with respect to a claimed default or event or condition of the
type referred to in SECTION 11.01(G) or (iii) of any condition or event which
has or is reasonably likely to have a Material Adverse Effect, such Loan Party
shall deliver to the Administrative Agent an Officer's Certificate specifying
(A) the nature and period of existence of any such claimed default, Event of
Default, Default, condition or event, (B) the notice given or action taken by
such Person in connection therewith and (C) what action such Loan Party has
taken, is and proposes to take with respect thereto.
SECTION 7.04. LAWSUITS. (i) Promptly upon any Loan Party
obtaining knowledge of the institution of, or written threat of, (A) any action,
suit, proceeding or arbitration against or affecting such Loan Party or any
asset of such Loan Party not previously disclosed pursuant to SCHEDULE 6.01(G)
which action, suit, proceeding or arbitration would be reasonably likely to
result in a Material Adverse Effect, (B) any investigation or proceeding before
or by any Governmental Authority, the effect of which is reasonably likely to
limit, prohibit or restrict materially the manner in which such Loan Party
currently conducts its business or to declare any substance contained in such
products manufactured or distributed by it to be dangerous, such Loan Party
61
shall give written notice thereof to the Administrative Agent and provide such
other information as may be reasonably available to enable the Administrative
Agent and its counsel to evaluate such matters except, in each case, where the
same is fully covered by insurance (other than applicable deductible) or (C) any
Forfeiture Proceeding; (ii) as soon as practicable and in any event within
forty-five (45) days after the end of each fiscal quarter of such Loan Party,
such Loan Party shall provide the Administrative Agent with a litigation status
report covering the institution of, or written threat of, any action, suit,
proceeding, governmental investigation or arbitration reported pursuant to
clause (i)(A) and (B) above and shall provide such other information at such
time as may be reasonably requested by the Administrative Agent and reasonably
available to such Loan Party to enable the Administrative Agent and its counsel
to evaluate such matters; and (iii) in addition to the requirements set forth in
clauses (i) and (ii) of this SECTION 7.04, such Loan Party upon request of the
Administrative Agent shall promptly give written notice of the status of any
action, suit, proceeding, governmental investigation or arbitration covered by a
report delivered pursuant to clause (i) or (ii) above and provide such other
information as may be reasonably requested by the Administrative Agent and
reasonably available to such Loan Party to enable the Administrative Agent and
its counsel to evaluate such matters.
SECTION 7.05. INSURANCE. As soon as practicable and in any
event within three (3) Business Days of any material change in the insurance
coverage set forth on SCHEDULE 6.01(R), the Borrower shall deliver to the
Administrative Agent notice of such change, together with a copy of such amended
insurance policy and/or program.
SECTION 7.06. ENVIRONMENTAL NOTICES. Each Loan Party shall
notify the Administrative Agent, in writing, promptly, and in any event within
five (5) Business Days after such Loan Party's learning thereof, of any: (i)
written notice or claim to the effect that such Loan Party or any of its
Subsidiaries is or may be liable to any Person as a result of the Release or
threatened Release of any Hazard Material; (ii) written notice that such Loan
Party or any of its Subsidiaries is subject to investigation by any Governmental
Authority evaluating whether any Remedial Action is needed to respond to the
Release or threatened Release of any Hazardous Material; (iii) written notice
that any Property of such Loan Party or any of its Subsidiaries is subject to an
Environmental Lien; (iv) written notice of violation to such Loan Party or any
of its Subsidiaries or awareness by such Loan Party of a condition which might
reasonably result in a notice of violation of any Environmental Law by such Loan
Party or any of its Subsidiaries; (v) commencement or written threat of any
judicial or administrative proceeding alleging a violation of any Environmental
Law by such Loan Party or any of its Subsidiaries; (vi) any proposed acquisition
of stock, assets, real estate or leasing of property, or any other action by
such Loan Party or any of its Subsidiaries that could subject such Loan Party or
such Subsidiary to Environmental Liabilities and Costs; or (vii) document
provided to a Governmental Authority concerning any Release of a Hazardous
Material in excess of any reportable quantity from or onto property owned or
operated by such Loan Party or any of its Subsidiaries and take Remedial Actions
required to xxxxx said Release. For purposes of clauses (i), (ii) and (iii),
written notice shall include other non-written communications given to an agent
or employee of such Loan Party with direct or indirect supervisory
responsibility with respect to the activity, if any, which is the subject of
such communication. With respect to clauses (i) through (vi) above, such notice
shall be required only if (A) the liability or potential liability, or with
respect to clause (vi), the cost or potential cost of compliance, which is the
62
subject matter of the notice is reasonably likely to exceed $100,000, or if (B)
such liability or potential liability or cost of compliance when added to other
liabilities of such Loan Party and its Subsidiaries of the kind referred to in
clauses (i) through (vi) above is reasonably likely to exceed $200,000.
SECTION 7.07. LABOR MATTERS. Each Loan Party shall notify the
Administrative Agent in writing, promptly, but in any event with ten (10) days
after learning thereof, of (i) any material labor dispute to which such Loan
Party may become a party, any strikes, lockouts or other disputes relating to
such Loan Party's plants and other facilities and (ii) any material liability
incurred with respect to the closing of any plant or other facility of such Loan
Party which in connection with clause (i) or (ii) above, would be reasonably
likely to result in a Material Adverse Effect.
SECTION 7.08. OTHER INFORMATION. Promptly upon receiving a
request therefor from the Administrative Agent, such Loan Party shall prepare
and deliver to the Administrative Agent such other information with respect to
such Loan Party or the Collateral, including, without limitation, schedules
identifying and describing the Collateral and any Dispositions thereof, as from
time to time may be reasonably requested by the Administrative Agent.
ARTICLE VIII
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that so long as any Commitments are
outstanding and until payment in full of all of the Obligations:
SECTION 8.01. EXISTENCE, ETC. The Borrower shall, and shall
cause each of its Subsidiaries to, at all times maintain its existence and
preserve and keep, or cause to be preserved and kept, in full force and effect
its rights and franchises material to its businesses except where the loss or
termination of such rights and franchises does not have or is not likely to have
a Material Adverse Effect.
SECTION 8.02. POWERS; CONDUCT OF BUSINESS. The Borrower shall,
and shall cause each of its Subsidiaries to, qualify and remain qualified to do
business in each jurisdiction in which the nature of its business requires it to
be so qualified except for those jurisdictions where failure to so qualify does
not have or would not reasonably be expected to have a Material Adverse Effect.
SECTION 8.03. COMPLIANCE WITH LAWS, ETC. The Borrower shall,
and shall cause each of its Subsidiaries to, comply with all Requirements of Law
applicable to such Person or the business, property, assets or operations of
such person, except in the case where noncompliance does not have or is not
reasonably likely to have a Material Adverse Effect.
SECTION 8.04. PAYMENT OF TAXES AND CLAIMS. The Borrower shall,
and shall cause each of its Subsidiaries to, pay (a) all taxes, assessments and
other governmental charges imposed upon it or on any of its properties or assets
or in respect of any of its franchises, business, income or property before any
penalty or interest accrues thereon, the failure to make payment of which will
have or is reasonably likely to have a Material Adverse Effect, and (b) all
claims (including, without limitation, claims for labor, services, materials and
63
supplies) for sums, material in the aggregate to the Borrower which have become
due and payable and which by law have or may become a Lien upon any of the
Borrower's properties or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; PROVIDED, HOWEVER, that no such taxes,
assessments, and governmental charges referred to in clause (a) above or claims
referred to in clause (b) above need be paid if being contested pursuant to a
Permitted Protest.
SECTION 8.05. INSPECTION OF PROPERTY; BOOKS AND RECORDS;
DISCUSSIONS. The Borrower shall permit any authorized representative(s)
designated by the Administrative Agent to visit and inspect (including the
collection of samples) any of the assets of the Borrower, to examine, audit,
check and make copies of its financial and accounting records, books, journals,
orders, receipts and any correspondence and other data relating to its business
or the transactions contemplated by the Loan Documents (including in connection
with environmental compliance, hazard or liability), and to discuss its affairs,
finances and accounts with its officers and independent certified public
accountants, all upon reasonable notice and at such reasonable times during
normal business hours, as often as may be reasonably requested. The visitations
and/or inspections by or on behalf of the Administrative Agent shall be at the
Borrower's expense; PROVIDED that unless an Event of Default shall have occurred
and is continuing, the Borrower shall not be obligated for more than two (2)
such visitations and/or inspections by or on behalf of the Administrative Agent
during any Fiscal Year of the Borrower. The Borrower shall keep and maintain in
all material respects complete and accurate books of record and account in which
entries in conformity with GAAP shall be made of all dealings and transactions
in relation to its business and activities, including transactions and other
dealings with respect to the Collateral. If an Event of Default has occurred and
is continuing and the Loans have been accelerated, the Borrower, upon the
Administrative Agent's request, shall turn over any such records to the
Administrative Agent or its representatives. If an Event of Default has occurred
and is continuing and the Administrative Agent shall so request, the Borrower
shall obtain an appraisal of the Inventory from third-party appraisers
acceptable to the Administrative Agent. Any such appraisal shall be delivered to
the Administrative Agent and the Collateral Agent. If an Event of Default has
occurred and is continuing and the Collateral Agent shall so request, the
Borrower shall obtain appraisals of the Equipment and other assets from
third-party appraisers acceptable to the Collateral Agent. Any such appraisals
shall be delivered to the Collateral Agent.
SECTION 8.06. USE OF PROCEEDS. The proceeds of the Term Loans
shall be used to refinance Indebtedness of the Borrower and to pay fees and
expenses in connection with such refinancing. The proceeds of the Revolving
Loans shall be used, initially, to refinance Indebtedness of the Borrower and to
pay fees and expenses in connection with such refinancing and, subsequently, for
working capital and general corporate purposes.
SECTION 8.07. CONDEMNATION. Immediately upon learning of the
institution of any Condemnation of any of its owned or leased real property
which would reasonably be expected to have a Material Adverse Effect, the
Borrower shall notify the Administrative Agent of the pendency of such
proceeding.
SECTION 8.08. MAINTENANCE OF PROPERTIES. The Borrower shall,
and shall cause each of its Subsidiaries to, maintain and preserve all of their
properties which are necessary or useful in the proper conduct of their business
in good working order and condition, ordinary wear and tear and Casualty and
64
Condemnation excepted, and comply, and cause each of its Subsidiaries to comply,
in all material respects with the provisions of all material leases to which
each of them is a party as lessee or under which each of them occupies property,
so as to prevent any material loss or forfeiture thereof or thereunder.
SECTION 8.09. MAINTENANCE OF INSURANCE. The Borrower shall
maintain, and cause each of its Subsidiaries to maintain (either in the name of
the Borrower or in each such Subsidiary's own name), insurance with financially
sound and reputable insurance companies or associations (including, without
limitation, commercial general liability, environmental, property and business
interruption insurance) with respect to their Properties (including all real
properties leased or owned by them) and business, in such amounts and covering
such risks as is required by any Governmental Authority having jurisdiction with
respect thereto or as is carried generally in accordance with sound business
practice by companies in similar businesses similarly situated. All property
policies covering the Collateral shall name Collateral Agent as an additional
insured or loss payee, in case of loss. All certificates of insurance are to be
delivered to the Collateral Agent and the policies shall contain a loss payable
and additional insured endorsements in favor of the Collateral Agent
(substantially in the form in existence on the Effective Date), and shall
provide for not less than 30 days' prior written notice to the Collateral Agent
and other named insureds of the exercise of any right of cancellation.
SECTION 8.10. OBTAINING OF PERMITS, ETC. The Borrower shall
obtain, maintain and preserve, and cause each of its Subsidiaries to obtain,
maintain and preserve, all Permits which are necessary or useful in the proper
conduct of its business and where the failure to so obtain, maintain and
preserve would reasonably be expected to have a Material Adverse Effect.
SECTION 8.11. ENVIRONMENTAL. The Borrower shall, and shall
cause each of its Subsidiaries to, (i) keep all property either owned or
operated by it or any of its Subsidiaries free of any Environmental Liens; (ii)
comply in all material respects with Environmental Laws and provide to the
Collateral Agent documentation of such compliance which Collateral Agent
reasonably requests; (iii) immediately provide the Collateral Agent a copy of
any document provided to a Governmental Authority concerning any Release of a
Hazardous Material in excess of any reportable quantity from or onto property
owned or operated by the Borrower or any of its Subsidiaries and take any
Remedial Actions required to xxxxx said Release; and (iv) perform Remedial
Action at property owned or operated by the Borrower or any of its Subsidiaries
(x) that is required pursuant to any Environmental Law or agreement with a
Governmental Authority, (y) in order to achieve an applicable cleanup standard
under any applicable Environmental Law, or (z) that was initiated prior to the
Signing Date, which Remedial Action is identified on SCHEDULE 8.11.
SECTION 8.12. FURTHER ASSURANCES. The Borrower shall take such
action and execute, acknowledge and deliver, and cause each of its Subsidiaries
to take such action and execute, acknowledge and deliver, at its sole cost and
expense, such agreements, instruments or other documents as the Collateral Agent
may reasonably require from time to time in order (i) to carry out more
effectively the purposes of this Agreement and the other Loan Documents, (ii) to
subject to valid and perfected first priority Liens (except for Permitted
Encumbrances) on any of the Collateral or any other property of the Loan Parties
acquired after the Effective Date and required to be so perfected pursuant to
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any Loan Document, (iii) to establish and maintain the validity and
effectiveness of any of the Loan Documents and the validity, perfection and
priority of the Liens intended to be created thereby (except for Permitted
Encumbrances), and (iv) to better assure, convey, grant, assign, transfer and
confirm unto the Collateral Agent for the ratable benefit of the Lenders the
rights now or hereafter intended to be granted to the Collateral Agent for the
ratable benefit of the Lenders under this Agreement or any other Loan Document.
SECTION 8.13. CHANGE IN COLLATERAL; COLLATERAL RECORDS. The
Borrower shall advise the Collateral Agent promptly, in sufficient detail, of
any change which would reasonably be expected to have a Material Adverse Effect
relating to the value of the Collateral or the Lien granted thereon and execute
and deliver, and cause each of its Subsidiaries to execute and deliver to the
Collateral Agent from time to time, solely for the Collateral Agent's
convenience in maintaining a record of Collateral, such written statements and
schedules, maintained by the Borrower and each of its Subsidiaries in the
ordinary course of business, as the Collateral Agent may reasonably require,
designating, identifying or describing the Collateral.
SECTION 8.14. LANDLORD WAIVERS. The Borrower shall use
commercially reasonable efforts to obtain, on or before sixtieth day following
the Effective Date, a Collateral Access Agreement from the landlord, bailee or
warehouseman of each location where the aggregate value of Collateral located at
such location is greater than $100,000. Each such Collateral Access Agreement
shall be in form and substance reasonably satisfactory to the Collateral Agent
and the Administrative Agent.
SECTION 8.15. FISCAL YEAR. The Borrower utilizes a 52- to
53-week accounting period in which there are 52, 7-day weeks. There is one
53-week year every seven years. The Borrower's fiscal calendar for the term of
this Agreement will be as set forth below and will not be changed by the
Borrower unless the Required Lenders consent to any such change (and appropriate
related changes to this Agreement):
---------------------------- --------------------------- -----------------------
Fiscal Year Fiscal Year End Date No. of Weeks
---------------------------- --------------------------- -----------------------
2005-2006 October 1, 2006 52
---------------------------- --------------------------- -----------------------
2006-2007 September 30, 2007 52
---------------------------- --------------------------- -----------------------
2007-2008 September 28, 2008 52
---------------------------- --------------------------- -----------------------
2008-2009 September 27, 2009 52
---------------------------- --------------------------- -----------------------
2009-2010 September 26, 2010 52
---------------------------- --------------------------- -----------------------
2010-2011 October 2, 2011 53
---------------------------- --------------------------- -----------------------
SECTION 8.16. ADDITIONAL GUARANTORS. The Borrower shall cause
each of its Subsidiaries not in existence on the Effective Date to execute and
deliver to the Administrative Agent within three (3) Business Days of the
formation, acquisition or change thereof (i) a Guaranty in a form substantially
acceptable to the Administrative Agent guaranteeing the Obligations, (ii) a
66
Security Agreement in a form substantially acceptable to the Administrative
Agent securing such Guaranty, and (iii) such other agreements, instruments,
approvals, legal opinions or other documents reasonably requested by Collateral
Agent in order to create, perfect, establish the first priority nature (subject
to Permitted Encumbrances) of or otherwise protect any Lien created by any such
Security Agreement.
ARTICLE IX
NEGATIVE COVENANTS
The Borrower covenants and agrees that it shall comply with the
following covenants so long as any Commitments are outstanding and until payment
in full of all of the Obligations:
SECTION 9.01. LIENS, SALES OF ACCOUNTS RECEIVABLE. The
Borrower shall not, and shall not permit any of its Subsidiaries to, create,
incur, assume or suffer to exist any Lien upon or with respect to any of its
property, whether now owned or hereafter acquired, or assign or otherwise
transfer any account receivable or other right to receive income, other than
Permitted Encumbrances.
SECTION 9.02. INDEBTEDNESS. The Borrower shall not, and shall
not permit any of its Subsidiaries to, create, incur, assume, guarantee or
suffer to exist, or otherwise become or remain liable with respect to any
Indebtedness, other than Permitted Indebtedness.
SECTION 9.03. FUNDAMENTAL CHANGES, ASSET SALES, AND
ACQUISITIONS. The Borrower shall not, and shall not permit any of its
Subsidiaries to, (i) wind-up, liquidate or dissolve itself (or permit or suffer
any thereof), or (ii) merge, consolidate or amalgamate with any Person, or (iii)
engage in any Disposition, or (iv) purchase or otherwise acquire, whether in one
transaction or a series of related transactions, all or substantially all of the
assets of any Person (or any division thereof), or (v) sell any of its
Subsidiaries, or (vi) agree to do any of the foregoing unless such agreement
requires, as a condition to consummating the transaction under such agreement,
the consent of the Required Lenders to such transaction or the repayment in full
of all Obligations and termination of the Revolving Loan Commitments; PROVIDED,
HOWEVER, that:
(a) the Borrower or any of its Subsidiaries may engage in
Excluded Asset Dispositions;
(b) the Borrower may make one or more of the Dispositions
described on SCHEDULE 9.03(A); PROVIDED, that all amounts received by the
Borrower in connection with sales of its Capital Stock in TreeCon shall be
deposited into the General Account and become subject to Article XII hereof;
(c) the Borrower or any of its Subsidiaries may make any
Disposition not included in clauses (a) or (b) of this SECTION 9.03; PROVIDED
that (A) the aggregate fair market value of all assets sold or otherwise
disposed of by the Borrower and its Subsidiaries in all such transactions in
reliance on this clause (c) shall not exceed $250,000 in any Fiscal Year of the
Borrower, (B) the consideration for such Dispositions is in cash and the Net
Cash Proceeds are paid to the Administrative Agent in accordance with SECTION
3.01(B) and (C) no Default or Event of Default shall have occurred and be
continuing immediately before or immediately after giving effect to such
transaction;
67
(d) the Borrower and any Subsidiary of the Borrower may
acquire and hold receivables owing to them, if created or acquired in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms;
(e) the Borrower and its Subsidiaries may purchase Inventory,
machinery, Equipment and other tangible assets in the ordinary course of
business PROVIDED that they are in compliance with SECTION 9.07;
(f) any transaction permitted pursuant to SECTION 9.05 shall
be permitted hereunder; and
(g) any Subsidiary of the Borrower may be merged with and
into, amalgamated with or be voluntarily dissolved, wound-up or liquidated into,
another Subsidiary of the Borrower, or sell assets to another Subsidiary of the
Borrower so long as (A) the security interests granted to the Collateral Agent
for the benefit of the Lenders pursuant to the Collateral Documents in the
assets of such Subsidiary shall remain in full force and effect and perfected
(to at least the same extent as in effect immediately prior to such merger,
amalgamation, dissolution, winding up or liquidation) and (B) no Default or
Event of Default shall have occurred and be continuing immediately before or
immediately after giving effect to such transaction.
SECTION 9.04. CHANGE IN NATURE OF BUSINESS. The Borrower shall
not, and shall not permit any of its Subsidiaries to, make any material change
in the nature of its business as such business is carried on at the Signing Date
except (i) for activities directly related thereto or similar or related
businesses and (ii) that the Borrower or its Subsidiaries may exit any
non-material line of business.
SECTION 9.05. INVESTMENTS. The Borrower shall not, and shall
not permit any of its Subsidiaries to, hold, own or invest in or commit or agree
to hold or invest in, or purchase or otherwise acquire or commit or agree to
purchase or otherwise acquire any Investment, except the following:
(i) Investments existing on the Signing Date hereof in Persons
which are Subsidiaries of the Borrower on the Signing Date;
(ii) Investments existing on the Signing Date and set forth on
SCHEDULE 9.05;
(iii) Cash Equivalents, PROVIDED that the Borrower shall not
have Cash Equivalents in Securities Accounts or Deposit Accounts in excess of
$250,000 in the aggregate for all such accounts (excluding Exempt Deposit
Accounts) outstanding at any one time with respect to which no Control Agreement
has been executed and delivered;
(iv) the Borrower and its Subsidiaries may acquire and hold
receivables owing to them, if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary trade terms;
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(v) the Borrower and its Subsidiaries may acquire and own
Investments (including obligations owing under Indebtedness) received in
connection with the bankruptcy or reorganization of suppliers and customers and
in settlement of delinquent obligations of, and other disputes with, customers
and suppliers arising in the ordinary course of business;
(vi) loans and advances by the Borrower or any of its
Subsidiaries to employees of any Loan Party for moving and travel and other
similar expenses, in each case in the ordinary course of business, in an
aggregate principal amount not to exceed $100,000 at any time outstanding;
(vii) deposits by the Borrower or any of its Subsidiaries made
in the ordinary course of business consistent with past practices to secure the
performance of leases;
(viii) Investments by the Borrower in any Subsidiary of the
Borrower or by any Subsidiary of the Borrower in any other Subsidiary of the
Borrower; PROVIDED that each item of intercompany Indebtedness shall be
subordinate in right to payment to the Obligations;
(ix) Investments arising out of the receipt by the Borrower or
by any of its Subsidiaries of non-cash consideration for the Disposition of
assets permitted under SECTION 9.03(C);
(x) purchases of Inventory, machinery, Equipment and other
tangible assets by the Borrower or any of its Subsidiaries in the ordinary
course of business PROVIDED such purchases are in compliance with SECTION 9.07;
and
(xi) other Investments by the Borrower not otherwise permitted
by this SECTION 9.05 in an aggregate amount at any time outstanding not to
exceed $500,000.
SECTION 9.06. SALE AND LEASEBACK. The Borrower shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, become or
remain liable as lessee or as a guarantor or other surety with respect to any
lease, whether an Operating Lease or a Capitalized Lease, of any property
(whether real, personal or mixed), whether now owned or hereafter acquired, (i)
that the Borrower or any of its Subsidiaries has sold or transferred or is to
sell or transfer to any other Person or (ii) that the Borrower or any of its
Subsidiaries intends to use for substantially the same purpose as any other
property that has been or is to be sold or transferred by the Borrower or any of
its Subsidiaries to any Person in connection with such lease.
SECTION 9.07. CAPITAL EXPENDITURES. The Borrower shall not,
and shall not permit any of its Subsidiaries to, make or agree to make any
Capital Expenditure that would cause the aggregate amount of all such Capital
Expenditures made by the Borrower and its Subsidiaries in each Fiscal Year to
exceed the amount set forth below opposite such Fiscal Year:
FISCAL YEAR CAPITAL EXPENDITURES
----------- --------------------
2006 $2,500,000
2007 $3,000,000
2008 $3,000,000
2009 $3,000,000
2010 $3,000,000
2011 $3,000,000
69
Notwithstanding the foregoing, the Borrower may make Capital Expenditures (which
Capital Expenditures will not be included in any determination under this
Section 9.07) with the Net Cash Proceeds of a Disposition, to the extent such
Net Cash Proceeds are not required to be applied to repay Term Loans pursuant to
Section 3.01(b)(iii).
SECTION 9.08. RESTRICTED PAYMENTS. The Borrower shall not, and
shall not permit any of its Subsidiaries to, make any Restricted Payment (other
than Restricted Payments payable solely in Capital Stock of such Person), except
that any Subsidiary of the Borrower may make Restricted Payments to another
Subsidiary of the Borrower and any Subsidiary of the Borrower may make dividends
and distributions to the Borrower.
SECTION 9.09. FEDERAL RESERVE REGULATIONS. The Borrower shall
not, and shall not permit any of its Subsidiaries to, use any Loan or the
proceeds of any Loan under this Agreement for any purpose that would cause such
Loans to be margin loans under the provisions of Regulation T, U or X.
SECTION 9.10. TRANSACTIONS WITH AFFILIATES. The Borrower shall
not, and shall not permit any of its Subsidiaries to, enter into, renew, extend
or be a party to any transaction or series of related transactions (including,
without limitation, the purchase, sale, lease, transfer or exchange of property
or assets of any kind or the rendering of services of any kind) with any of its
Affiliates, except:
(i) normal and customary compensation, indemnities and
reimbursement of reasonable expenses of officers and directors of the Borrower
or any of its Subsidiaries;
(ii) any transaction entered into among the Borrower and any
of its Subsidiaries permitted hereunder;
(iii) any transaction permitted pursuant to SECTION 9.08; and
(iv) other transactions which are engaged in by the Borrower
or any of its Subsidiaries in the ordinary course of its business on terms and
conditions as favorable to such Person as would be obtainable by it in a
comparable arms'-length transaction with an independent, unrelated third party.
SECTION 9.11. LIMITATIONS ON DIVIDENDS AND OTHER PAYMENT
RESTRICTIONS AFFECTING Subsidiaries. The Borrower shall not, and shall not
permit its Subsidiaries to, create or otherwise cause, incur, assume, suffer or
permit to exist or become effective any consensual encumbrance or restriction of
any kind on the ability of any Subsidiaries of the Borrower (i) to pay dividends
or to make any other distribution on any shares of Capital Stock of such
Subsidiary owned by the Borrower or any of its Subsidiaries, (ii) to subordinate
or to pay or prepay any Indebtedness owed to the Borrower or any of its
Subsidiaries, (iii) to make loans or advances to the Borrower or any of its
Subsidiaries or (iv) to transfer any of its property or assets to the Borrower
or any of its Subsidiaries; PROVIDED, HOWEVER, that nothing in any of clauses
(i) through (iv) of this SECTION 9.10 shall prohibit or restrict: (A) this
Agreement and the other Loan Documents; (B) any applicable law, rule or
70
regulation (including applicable currency control laws and applicable state
corporate statutes restricting the payment of dividends in certain
circumstances); (C) any restriction set forth in any document or agreement
governing or securing any Existing Debt; (D) in the case of clause (iv) any
agreement setting forth customary restrictions on the subletting, assignment or
transfer of any property or asset that is a lease, license, conveyance or
contract of similar property or assets; or (E) in the case of clause (iv) any
holder of a Permitted Encumbrance from restricting on customary terms the
transfer of any property or assets subject thereto.
SECTION 9.12. PURCHASE OF WASTEWATER CREDITS. The Borrower
shall not spend more than $200,000 during Fiscal Year 2006 to purchase
additional credits for wastewater discharge.
SECTION 9.13. MODIFICATIONS OF INDEBTEDNESS, ORGANIZATIONAL
DOCUMENTS AND CERTAIN OTHER AGREEMENTS. The Borrower shall not, and shall not
permit any of its Subsidiaries to amend, modify or otherwise change its
certificate of incorporation or bylaws (or other similar organizational
documents), including, without limitation, by the filing or modification of any
certificate of designation, or any agreement or arrangement entered into by it,
with respect to any of its Capital Stock (including any shareholders' agreement)
except (i) any such amendments, modifications or changes pursuant to this clause
that either individually or in the aggregate would not be materially adverse to
the interests of the Lenders, or (ii) any such amendments, modifications or
changes in connection with the plans set forth on SCHEDULE 9.13(A).
SECTION 9.14. INVESTMENT COMPANY ACT OF 1940. The Borrower
shall not, and shall not permit its Subsidiaries to, engage in any business,
enter into any transaction, use any securities or take any other action that
would cause it or any of its Subsidiaries to become subject to the registration
requirements of the Investment Company Act of 1940, as amended, by virtue of
being an "investment company" or a company "controlled" by an "investment
company" not entitled to an exemption within the meaning of such Act.
SECTION 9.15. SECURITIES ACCOUNTS. Except as permitted
pursuant to SECTION 9.05(III), the Borrower shall not, and shall not permit any
of its Subsidiaries to, establish or maintain any Securities Account unless
Collateral Agent shall have received a Control Agreement in respect of such
Securities Account or similar account. The Borrower shall comply in all material
respects with the provisions of each Control Agreement to which it is a party.
SECTION 9.16. NEGATIVE PLEDGES. Neither the Borrower nor any
of its Subsidiaries shall enter into any agreement prohibiting the creation or
assumption of any Lien upon any of its properties or assets, whether now owned
or hereafter acquired, except (i) pursuant to this Agreement and the other Loan
Documents and (ii) pursuant to any document or instrument governing Existing
Debt or governing Capital Lease Obligations or purchase money debt incurred
pursuant to SECTION 9.02 if any such restriction contained therein relates only
to the asset or assets acquired in connection therewith.
SECTION 9.17. IMPAIRMENT OF SECURITY INTERESTS. The Borrower
shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, take any action or do anything that would have the effect of
terminating, limiting or impairing the perfected Liens securing the obligations
as set forth herein.
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ARTICLE X
FINANCIAL COVENANTS
The Borrower covenants and agrees that so long as any
Commitments are outstanding and thereafter until payment in full of all of the
Obligations:
SECTION 10.01. MAXIMUM SENIOR DEBT TO EBITDA RATIO. The
Borrower shall not permit the Senior Debt to EBITDA Ratio for the trailing
twelve-month period ending on the last day of any fiscal quarter set forth below
to be greater than the ratio set forth opposite such fiscal quarter:
FISCAL QUARTER SENIOR DEBT TO EBITDA RATIO
-------------- ---------------------------
Third Fiscal Quarter 2006 2.75
Fourth Fiscal Quarter 2006 2.75
First Fiscal Quarter 2007 2.75
Second Fiscal Quarter 2007 2.75
Third Fiscal Quarter 2007 2.75
Fourth Fiscal Quarter 2007 2.75
First Fiscal Quarter 2008 2.75
Second Fiscal Quarter 2008 2.75
Third Fiscal Quarter 2008 2.50
Fourth Fiscal Quarter 2008 2.50
First Fiscal Quarter 2009 2.50
Second Fiscal Quarter 2009 2.50
Third Fiscal Quarter 2009 2.25
Fourth Fiscal Quarter 2009 2.25
First Fiscal Quarter 2010 2.25
Second Fiscal Quarter 2010 2.25
Third Fiscal Quarter 2010 2.00
Fourth Fiscal Quarter 2010 2.00
First Fiscal Quarter 2011 2.00
Second Fiscal Quarter 2011 2.00
SECTION 10.02. MAXIMUM TOTAL DEBT TO EBITDA RATIO. The
Borrower shall not permit the maximum Total Debt to EBITDA Ratio for the
trailing twelve-month period ending on the last day of any fiscal quarter set
forth below to be greater than the ratio set forth opposite such fiscal quarter:
FISCAL QUARTER TOTAL DEBT TO EBITDA RATIO
-------------- --------------------------
Third Fiscal Quarter 2006 4.00
Fourth Fiscal Quarter 2006 4.00
First Fiscal Quarter 2007 4.00
Second Fiscal Quarter 2007 4.00
72
Third Fiscal Quarter 2007 4.00
Fourth Fiscal Quarter 2007 4.00
First Fiscal Quarter 2008 4.00
Second Fiscal Quarter 2008 4.00
Third Fiscal Quarter 2008 3.75
Fourth Fiscal Quarter 2008 3.75
First Fiscal Quarter 2009 3.75
Second Fiscal Quarter 2009 3.75
Third Fiscal Quarter 2009 3.50
Fourth Fiscal Quarter 2009 3.50
First Fiscal Quarter 2010 3.50
Second Fiscal Quarter 2010 3.50
Third Fiscal Quarter 2010 3.25
Fourth Fiscal Quarter 2010 3.25
First Fiscal Quarter 2011 3.25
Second Fiscal Quarter 2011 3.25
SECTION 10.03. EBITDA. The Borrower shall not permit the
EBITDA for the trailing twelve-month period ending on the last day of any fiscal
quarter set forth below to be less than the amount set forth opposite such
fiscal quarter:
FISCAL QUARTER EBITDA
-------------- ------
Third Fiscal Quarter 2006 $12,400,000
Fourth Fiscal Quarter 2006 $12,200,000
First Fiscal Quarter 2007 $12,000,000
Second Fiscal Quarter 2007 $11,100,000
Third Fiscal Quarter 2007 $11,100,000
Fourth Fiscal Quarter 2007 $11,200,000
First Fiscal Quarter 2008 $11,200,000
Second Fiscal Quarter 2008 $11,200,000
Third Fiscal Quarter 2008 $11,900,000
Fourth Fiscal Quarter 2008 $11,900,000
First Fiscal Quarter 2009 $12,000,000
Second Fiscal Quarter 2009 $12,000,000
Third Fiscal Quarter 2009 $12,700,000
Fourth Fiscal Quarter 2009 $12,800,000
First Fiscal Quarter 2010 $12,800,000
Second Fiscal Quarter 2010 $12,900,000
Third Fiscal Quarter 2010 $12,900,000
Fourth Fiscal Quarter 2010 $13,000,000
First Fiscal Quarter 2011 $13,000,000
Second Fiscal Quarter 2011 $13,000,000
SECTION 10.04. INTEREST COVERAGE RATIO. The Borrower shall not
permit the Interest Coverage Ratio for the trailing twelve-month period ending
on the last day of any fiscal quarter set forth below to be less than the ratio
set forth opposite such fiscal quarter:
73
FISCAL QUARTER INTEREST COVERAGE RATIO
-------------- -----------------------
Third Fiscal Quarter 2006 2.50
Fourth Fiscal Quarter 2006 2.50
First Fiscal Quarter 2007 2.50
Second Fiscal Quarter 2007 2.50
Third Fiscal Quarter 2007 2.50
Fourth Fiscal Quarter 2007 2.50
First Fiscal Quarter 2008 2.50
Second Fiscal Quarter 2008 2.50
Third Fiscal Quarter 2008 2.50
Fourth Fiscal Quarter 2008 2.50
First Fiscal Quarter 2009 2.50
Second Fiscal Quarter 2009 2.50
Third Fiscal Quarter 2009 2.75
Fourth Fiscal Quarter 2009 2.75
First Fiscal Quarter 2010 2.75
Second Fiscal Quarter 2010 2.75
Third Fiscal Quarter 2010 3.00
Fourth Fiscal Quarter 2010 3.00
First Fiscal Quarter 2011 3.00
Second Fiscal Quarter 2011 3.00
PROVIDED that, for purposes of calculating the minimum Interest Coverage Ratio
for any period ending prior to the first anniversary of the Effective Date, Cash
Interest Expense shall be determined as follows: (i) for the period beginning
April 1, 2006 and ending June 30, 2006 by multiplying the actual Cash Interest
Expense for the fiscal quarter ending June 30, 2006 by 4; (ii) for the period
beginning April 1, 2006 and ending September 30, 2006 by multiplying the actual
Cash Interest Expense for the fiscal quarters ending June 30, 2006 and September
30, 2006 by 2, (iii) for the period beginning April 1, 2006 and ending December
31, 2006 by multiplying the actual Cash Interest Expense for the fiscal quarters
ending June 30, 2006, September 30, 2006 and December 31, 2006 by 4/3.
74
SECTION 10.05. FIXED CHARGE COVERAGE RATIO. The Borrower shall
not permit the Fixed Charge Coverage Ratio for the trailing twelve-month period
ending on the last day of any fiscal quarter set forth below to be less than the
ratio set forth opposite such fiscal quarter:
FISCAL QUARTER FIXED CHARGE COVERAGE RATIO
-------------- ---------------------------
Third Fiscal Quarter 2006 1.05
Fourth Fiscal Quarter 2006 1.05
First Fiscal Quarter 2007 1.05
Second Fiscal Quarter 2007 1.05
Third Fiscal Quarter 2007 1.05
Fourth Fiscal Quarter 2007 1.05
First Fiscal Quarter 2008 1.05
Second Fiscal Quarter 2008 1.05
Third Fiscal Quarter 2008 1.05
Fourth Fiscal Quarter 2008 1.05
First Fiscal Quarter 2009 1.05
Second Fiscal Quarter 2009 1.05
Third Fiscal Quarter 2009 1.05
Fourth Fiscal Quarter 2009 1.05
First Fiscal Quarter 2010 1.05
Second Fiscal Quarter 2010 1.05
Third Fiscal Quarter 2010 1.05
Fourth Fiscal Quarter 2010 1.05
First Fiscal Quarter 2011 1.05
Second Fiscal Quarter 2011 1.05
PROVIDED that, for purposes of calculating the minimum Fixed Charge Coverage
Ratio for any period ending prior to the first anniversary of the Effective
Date, Cash Interest Expense shall be determined as follows: (i) for the period
beginning April 1, 2006 and ending June 30, 2006 by multiplying the actual Cash
Interest Expense for the fiscal quarter ending June 30, 2006 by 4; (ii) for the
period beginning April 1, 2006 and ending September 30, 2006 by multiplying the
actual Cash Interest Expense for the fiscal quarters ending June 30, 2006 and
September 30, 2006 by 2, (iii) for the period beginning April 1, 2006 and ending
December 31, 2006 by multiplying the actual Cash Interest Expense for the fiscal
quarters ending June 30, 2006, September 30, 2006 and December 31, 2006 by 4/3.
ARTICLE XI
EVENTS OF DEFAULT, RIGHTS AND REMEDIES
SECTION 11.01. EVENTS OF DEFAULT. Each of the following
occurrences shall constitute an event of default (an "EVENT OF DEFAULT") under
this Agreement.
75
(a) FAILURE TO MAKE PAYMENTS WHEN DUE. The Borrower shall fail
to pay any Obligation (whether principal, reimbursement obligations, interest,
fees, expenses, indemnities or other monetary obligations) when due (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise); and
in connection with any default in the payment when due of any Obligation other
than principal of the Loans, such default shall continue for three (3) Business
Days; or
(b) BREACH OF REPRESENTATION OR WARRANTY. Any representation
or warranty made or deemed made by or on behalf of any Loan Party or by any
officer of the foregoing under or in connection with any Loan Document or under
or in connection with any report, certificate, or other document delivered to
the Administrative Agent or any Lender pursuant to any Loan Document shall have
been incorrect or misleading in any material respect when made or deemed made;
or
(c) BREACH OF CERTAIN COVENANTS (FIVE (5) DAY CURE). Any Loan
Party shall fail to perform or comply with any covenant or agreement contained
in SECTIONS 8.06 OR 8.13 and such failure continues for a period of five (5)
days; or
(d) BREACH OF CERTAIN COVENANTS (TEN (10) DAY CURE). Any Loan
Party shall fail to perform or comply with any covenant or agreement contained
in SECTIONS 7.01, 7.02, 7.04, 7.05, 7.06, 7.07, 7.08, 8.05 (OTHER THAN IN THE
CASE OF DEFAULTS WITH RESPECT TO THOSE PROVISIONS OF SECTION 8.05 WHICH APPLY
AFTER AN EVENT OF DEFAULT HAS OCCURRED, IN WHICH CASE CLAUSE (E) BELOW SHALL
APPLY), 8.09 OR 8.16 and such failure continues for a period of ten (10) days
from the earlier of (i) the Borrower's actual knowledge of the event or
condition causing the default or (ii) the Borrower's receipt of written notice
thereof from the Administrative Agent; or
(e) BREACH OF CERTAIN COVENANTS. Any Loan Party shall fail to
perform or comply with any covenant or agreement contained in SECTIONS 7.03,
8.05 (IN THE CASE OF DEFAULTS WITH RESPECT TO THOSE PROVISIONS OF SECTION 8.05
WHICH APPLY AFTER AN EVENT OF DEFAULT HAS OCCURRED ONLY), ARTICLE IX, ARTICLE X
OR ARTICLE XII under this Agreement or contained in any other Loan Document;
PROVIDED that, such Loan Party shall have two (2) days to cure any failure to
perform or comply with any covenant or agreement contained in SECTION 7.03; or
(f) OTHER DEFAULTS (THIRTY (30) DAY CURE). Any Loan Party
shall fail to perform or comply with any other covenant or agreement and such
failure continues for a period of thirty (30) days from the earlier of (i) the
Borrower's actual knowledge of the event or condition causing the default or
(ii) the Borrower's receipt of written notice thereof from the Administrative
Agent; or
(g) DEFAULT AS TO OTHER INDEBTEDNESS. Any Loan Party shall
fail to make any payment when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) with respect to any Indebtedness
of such Loan Party if the aggregate amount of such Indebtedness is in excess of
$250,000 in the aggregate and such failure shall continue after the applicable
grace period, if any, specified in the agreement or instrument relating to such
Indebtedness; or any other breach, default or event of default shall occur (and
in the case of a Hedging Agreement, such breach, default or event of default
would give a party to such Hedging Agreement (other than a Loan Party) certain
rights and remedies including the right to declare that a termination event has
76
occurred under such Hedging Agreement), or any other condition (other than any
termination event under a Hedging Agreement not arising as a result of an event
of default thereunder) shall exist under any instrument, agreement or indenture
pertaining to any such Indebtedness, if the effect thereof (with or without the
giving of notice or lapse of time or both) is to cause an acceleration,
mandatory redemption or other required repurchase of such Indebtedness or, as to
such Indebtedness, permit the holder or holders of such Indebtedness to
accelerate the maturity of any such Indebtedness or require a redemption or
other repurchase of such Indebtedness; or any Indebtedness if the aggregate
amount of such Indebtedness is $250,000 shall be declared be due and payable (by
acceleration or otherwise) by a Person (other than a Loan Party) as a result of
a breach, default or event of default by a Loan Party, or required to be
prepaid, redeemed or otherwise repurchased by any Loan Party (other than by a
regularly scheduled required prepayment) prior to the stated maturity thereof;
or the holder or holders of any Lien, securing obligations of $250,000 or more,
shall commence foreclosure of such Lien upon property of any Loan Party; or
(h) VOLUNTARY BANKRUPTCY PROCEEDING. Any Loan Party (i) shall
institute any proceeding or voluntary case seeking to adjudicate it a bankrupt
or insolvent, or seeking dissolution, liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency, reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee, receiver and manager, interim receiver, sequestration,
administrator, monitor, custodian or other similar official for any such Loan
Party or for any substantial part of its property, (ii) shall consent to the
entry of an order for relief in an involuntary bankruptcy case or to the
conversion of an involuntary case to a voluntary case under bankruptcy,
insolvency or reorganization law, (iii) shall be generally not paying its debts
as such debts become due or shall admit in writing its inability to pay its
debts generally, (iv) shall make a general assignment for the benefit of
creditors, or (v) shall take any action to authorize or effect any of the
actions set forth above in this SECTION 11.01(H); or
(i) INVOLUNTARY BANKRUPTCY PROCEEDING. i) An involuntary case
shall be commenced against any Loan Party and the petition shall not be
dismissed, stayed, bonded or discharged within sixty (60) days; or a court
having jurisdiction in the premises shall enter a decree or order for relief in
respect of such Loan Party in an involuntary case, under any applicable
bankruptcy, insolvency or other similar law now or hereinafter in effect; or any
other similar relief shall be granted under any applicable federal, state,
provincial, local or foreign law; or the board of directors of such Loan Party
(or any committee thereof) adopts any resolution or otherwise authorizes any
action to approve any of the foregoing; or
(ii) A decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestration, trustee,
receiver and manager, administrator, monitor, custodian or other officer having
similar powers over any Loan Party or over all or a substantial part of their
respective assets shall be entered; or an interim receiver, trustee or other
custodian of any Loan Party or of all or a substantial part of their respective
assets shall be appointed or a warrant of attachment, execution or similar
process against any substantial part of their respective assets shall be issued
and any such event shall not be stayed, dismissed, bonded or discharged; or the
board of directors of any Loan Party (or any committee thereof) adopts any
resolution or otherwise authorizes any action to approve any of the foregoing;
or
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(j) INVALIDITY OF DOCUMENTS. Any material provision of any
Loan Document shall at any time for any reason (other than pursuant to the
express terms thereof) cease to be valid and binding on or enforceable against a
Loan Party intended to be a party thereto; or the validity or enforceability
thereof shall be contested by any Loan Party; or a proceeding shall be commenced
by a Loan Party or any Governmental Authority having jurisdiction over any of
them, seeking to establish the invalidity or unenforceability thereof; or a Loan
Party shall deny in writing that it has any liability or obligation purported to
be created under any Loan Document; or
(k) LOAN DOCUMENTS; IMPAIRMENT. At any time, for any reason,
(i) any Collateral Document shall for any reason (other than pursuant to the
express terms hereof or thereof) fail or cease to create a valid and perfected
Lien or the Liens intended to be created or perfected thereby are, or any Loan
Party seeks to render such Liens, invalid or unperfected except as otherwise
contemplated hereby or thereby, or (ii) Liens in favor of the Collateral Agent
contemplated by the Collateral Documents shall be invalidated or otherwise cease
to be in full force and effect, or such Liens shall be subordinated or shall not
have the priority contemplated hereby or by the other Loan Documents (subject to
Permitted Encumbrances); or
(l) JUDGMENTS. One or more judgments or judicial or
administrative orders for the payment of money exceeding $250,000 in the
aggregate shall be rendered against a Loan Party and remain unsatisfied and
either (i) enforcement proceedings shall have been commenced by any creditor
upon any such judgment or judicial or administrative order, or (ii) there shall
be a period of twenty (20) consecutive Business Days after entry thereof during
which a stay of enforcement of any such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; PROVIDED, HOWEVER, that any
such judgment or order shall not give rise to an Event of Default under this
SECTION 11.01(L) if and to the extent that (A) the amount of such judgment or
order is covered by a valid and binding policy of insurance between the
defendant and the insurer covering full payment thereof and (B) such insurer has
been notified, and has not disputed the claim made for payment, of the amount of
such judgment or order; or
(m) CHANGE OF CONTROL. A Change of Control shall have
occurred;
then, and in any such event, the Administrative Agent may, and at the written
direction of the Required Lenders shall, by notice to the Borrower, (i)
terminate or reduce the Commitments, whereupon the Commitments shall immediately
be terminated or reduced, (ii) declare all or a portion of Loans then
outstanding to be due and payable, whereupon all or such portion of the
aggregate principal of such Loans all accrued and unpaid interest thereon, all
fees and all other amounts payable under this Agreement and all other
Obligations shall become immediately due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrower (any such declaration by the Administrative Agent
pursuant to this clause (ii), an "ACCELERATION EVENT") and (iii) exercise any
and all of its other rights and remedies hereunder, under the other Loan
Documents, under applicable law and otherwise; PROVIDED, HOWEVER, that upon the
occurrence of any Event of Default described in subsection (h) or (i) of this
SECTION 11.01, the Commitments shall automatically terminate and the Loans then
outstanding, together with all accrued and unpaid interest thereon, all fees and
all other amounts due under this Agreement shall become immediately due and
payable automatically, without presentment, demand, protest or notice of any
kind, all of which are expressly waived by the Borrower.
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ARTICLE XII
CASH MANAGEMENT
SECTION 12.01. CASH MANAGEMENT. On or prior to the Effective
Date, the Borrower shall have established and at all times thereafter shall
maintain Blocked Accounts in a manner reasonably satisfactory to the Collateral
Agent and the Administrative Agent. The Borrower shall not open any accounts
other than the General Account, Xxxxx Fargo Securities Account and Controlled
Disbursement Account other than with the prior written consent of the
Administrative Agent, and any such new account consented to by the
Administrative Agent shall be subject to a Control Agreement in form and
substance satisfactory to the Administrative Agent.
SECTION 12.02. BLOCKED ACCOUNTS. On or prior to the Effective
Date, the Borrower shall have established and at all times thereafter shall
maintain a General Account at one or more Blocked Account Banks and shall
promptly deposit, and shall cause each of its Subsidiaries promptly to deposit,
all Collections of the Borrower or any of its Subsidiaries from any source into
such General Account. On or prior to the Effective Date, the Borrower, the
Collateral Agent and each Blocked Account Bank shall have entered into and
delivered a Blocked Account Agreement with respect to the General Account.
Neither the Blocked Account Agreement nor the arrangements contemplated thereby
shall be modified by the Borrower or any of its Subsidiaries without the prior
written consent of the Collateral Agent. On or prior to the Effective Date, the
Borrower shall have directed all of its Account Debtors to remit all payments in
respect of an Account to be deposited directly into the General Account. All
Collections (including checks, drafts, notes, money orders, acceptances, cash
and other evidences of Indebtedness) received directly by the Borrower from any
Account Debtor or any other source, whether as proceeds from Accounts, or as
proceeds of any other Collateral, or otherwise, shall be received and held by
the Borrower in trust for the Collateral Agent and deposited in original form
and no later than the next Business Day after receipt thereof into the General
Account. The Borrower shall not, and shall not permit any of its Subsidiaries
to, commingle Collections with the proceeds of any Loan. The Borrower shall be
entitled to have the funds on deposit in the General Account at the Blocked
Account Bank released to it, until such time as (i) a Default or an Event of
Default shall have occurred and be continuing or (ii) the aggregate amount of
cash, Cash Equivalents and Availability is below $500,000 (the occurrence of the
event specified in clause (i) or clause (ii) being referred to as a "TERMINATION
OCCURRENCE"). Upon the occurrence of a Termination Occurrence, the Collateral
Agent may send to each Blocked Account Bank Instructions and the Borrower shall
not have any rights with respect to the withdrawal, transfer or disbursement of
funds from any of the Blocked Accounts until such time, if any, as new
Instructions are delivered to the related Blocked Account Bank; and, if so
instructed by the Collateral Agent, the related Blocked Account Bank will
transfer on each Business Day all available funds on deposit in each of the
Blocked Accounts in immediately available funds to the account or accounts
designated by the Collateral Agent or as otherwise designated in writing from
time to time by the Collateral Agent. In the event that the Default or the Event
of Default has been cured or waived in writing or the aggregate amount of cash,
Cash Equivalents and Availability exceeds $500,000 for at least thirty days, the
Collateral Agent shall send to the related Blocked Account Bank new Instructions
and the funds on deposit in the Blocked Accounts at the Blocked Account Bank
shall be released to the Borrower.
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SECTION 12.03. XXXXX FARGO SECURITIES ACCOUNT. On or prior to
the Signing Date, the Borrower may establish the Xxxxx Fargo Securities Account
for the purpose of holding Capital Stock owned by the Borrower in TreeCon and
United Airlines. No amounts, securities or other financial assets deposited in
or credited to the Securities Account shall be withdrawn or otherwise
distributed from or credited against the Investment Accounts unless withdrawn
for the purpose of sale with the proceeds of sale deposited into or credited to
the General Account, and no additional amounts, securities or other financial
assets shall be deposited in or credited to the Xxxxx Fargo Securities Account
other than the TreeCon and United Airlines Capital Stock owned by the Borrower
and listed on SCHEDULE 12.03 hereto.
SECTION 12.04. CONTROLLED DISBURSEMENT ACCOUNT. The Borrower
hereby agrees that no checks or other request or demand for payment shall be
drawn by the Borrower with respect to, or payable out of, the Controlled
Disbursement Account other than in the ordinary course of business of the
Borrower. No funds shall be deposited in the Controlled Disbursement Account
except funds in an amount equal to the aggregate amount of checks presented for
payment from the Controlled Disbursement Account, and no funds shall remain in
the Controlled Disbursement Account at the close of business on each day.
ARTICLE XIII
THE AGENTS
SECTION 13.01. APPOINTMENT POWERS AND IMMUNITIES; DELEGATION
OF DUTIES, LIABILITY OF AGENTS.
(a) Each Lender hereby designates and appoints GCF as its
administrative agent under this Agreement and the other Loan Documents and as
its collateral agent under this Agreement and the other Loan Documents. Such
Lender hereby irrevocably authorizes each such Agent to take such action on such
Lender's behalf under the provisions of this Agreement and each other Loan
Document and to exercise such powers and perform such duties as are expressly
delegated to it by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto. Each such Agent
agrees to act as such on the express conditions contained in this ARTICLE XIII.
The provisions of this ARTICLE XIII are solely for the benefit of the
Administrative Agent, the Collateral Agent and the Lenders. Neither the Borrower
nor any other Persons shall have any rights as third party beneficiaries of any
of the provisions contained herein; PROVIDED, HOWEVER, that the right to consent
to a successor Agent as provided under SECTION 13.08 also shall be for the
benefit of the Borrower. Any provision to the contrary contained elsewhere in
this Agreement or in any other Loan Document notwithstanding, each such Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall each such Agent have or be deemed to have any fiduciary
relationship with any of the Lenders and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against each such Agent;
it being expressly understood and agreed that the use of the word "Agent" is for
convenience only and that each such Agent is merely the representative of the
Lenders, and has only the contractual duties set forth in this Agreement and the
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other Loan Documents. Except as expressly otherwise provided in this Agreement,
each such Agent shall have and may use its sole discretion with respect to
exercising or refraining from exercising any discretionary rights or taking or
refraining from taking any actions which such Agent is expressly entitled to
take or assert under or pursuant to this Agreement and the other Loan Documents.
No Lender shall have any right of action whatsoever against each such Agent as a
result of such Agent acting or refraining from acting hereunder pursuant to such
discretion and any action taken or failure to act pursuant to such discretion
shall be binding on the Lenders. Without limiting the generality of the
foregoing, or of any other provision of the Loan Documents that provides rights
or powers to the Administrative Agent or Collateral Agent, each of the Lenders
agree that, as long as this Agreement remains in effect: (i) (A) the
Administrative Agent shall have the right to maintain, in accordance with its
customary business practices, ledgers and records reflecting the status of the
Obligations, the Loans, the Collections and related matters, and (B) each of the
Collateral Agent and the Administrative Agent shall have the right to maintain,
in accordance with its customary business practices, ledgers and records
reflecting the status of the Collateral and related matters; (ii) the Collateral
Agent shall have the right to execute or file any and all financing or similar
statements or notices, amendments, renewals, supplements, documents,
instruments, proofs of claim, notices and other written agreements with respect
to the Loan Documents; (iii) the Administrative Agent shall have the right to
make the Loans, for itself or on behalf of the applicable Revolving Lenders as
provided in the Loan Documents; (iv) the Agents shall have the right to
exclusively receive, apply, and distribute the Collections as provided in the
Loan Documents; (v) the Collateral Agent shall have the right to open and
maintain such bank accounts and lock boxes as the Collateral Agent deems
necessary and appropriate in accordance with the Loan Documents for the
foregoing purposes with respect to the Collections and the Collateral; (vi) (A)
the Administrative Agent shall have the right to perform, exercise, and enforce
any and all other rights and remedies of the Lenders with respect to the
Borrower, the Obligations, the Collections, or otherwise related to any of same
as provided in the Loan Documents, (B) the Collateral Agent shall have the right
to perform, exercise, and enforce any and all other rights and remedies of the
Lenders with respect to the Borrower, the Obligations, the Collateral, or
otherwise related to any of same as provided in the Loan Documents, and (C) the
Administrative Agent shall have the right to perform, exercise, and enforce any
and all other rights and remedies of the Revolving Lenders with respect to the
Borrower, the Obligations, the Collateral, or otherwise related to any of same,
as provided in the Loan Documents; and (vii) each of the Agents shall have the
right to incur and pay such fees, charges, and expenses under the Loan Documents
as such Agent reasonably may deem necessary or appropriate for the performance
and fulfillment of its functions and powers pursuant to the Loan Documents. The
Administrative Agent may deem and treat the payee of any Obligation as the
holder thereof for all purposes of the Loan Documents unless and until a notice
of the assignment or transfer of such Obligation shall have been filed with the
Administrative Agent. Each Lender further consents to (y) the execution,
delivery, and performance by the Administrative Agent or the Collateral Agent of
each Loan Document entered into by such Agent on behalf of the Lenders as
contemplated by this Agreement, and (z) the terms of such Loan Documents.
(b) Except as otherwise provided in this Section, each of the
Administrative Agent and the Collateral Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Neither the Administrative Agent nor the
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Collateral Agent shall be responsible for the negligence or misconduct of any
agent or attorney-in-fact that it selects as long as such selection was made in
compliance with this Section and without gross negligence or willful misconduct.
(c) None of the Agent-Related Persons shall (i) be liable for
any action taken or omitted to be taken by any of them under or in connection
with this Agreement or any other Loan Document or the transactions contemplated
hereby (except for its own gross negligence or willful misconduct), or (ii) be
responsible in any manner to any Lender for any recital, statement,
representation or warranty made by any Loan Party or any Subsidiary or Affiliate
of any Loan Party, or any officer or director thereof, contained in this
Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by any
Agent under or in connection with, this Agreement or any other Loan Document, or
the validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of any Loan Party or
any other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Lender
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrower or any
of its Subsidiaries.
SECTION 13.02. RELIANCE BY AGENTS. Each Agent shall be
entitled to rely, and shall be fully protected in relying, upon any writing,
resolution, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent, or made by the proper Person, and upon advice and statements of legal
counsel (including counsel to the Borrower or counsel to any Lender),
independent accountants and other experts selected by such Agent. Each Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it first shall receive such advice
or concurrence of the Lenders as it deems appropriate and until such
instructions are received, such Agent shall act, or refrain from acting, as it
deems advisable. If the Administrative Agent or the Collateral Agent so
requests, it first shall be indemnified to its reasonable satisfaction by the
Lenders against any and all liability and expense that may be incurred by it by
reason of taking or continuing to take any such action. The Administrative Agent
and the Collateral Agent in all cases shall be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Required Lenders and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all Lenders. If the Administrative Agent so requests, it first shall be
indemnified to its reasonable satisfaction by the Revolving Lenders against any
and all liability and expense that may be incurred by it by reason of taking or
continuing to take any action hereunder.
SECTION 13.03. DEFAULTS. No Agent shall be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest, fees, and
expenses required to be paid to such Agent for the account of the Lenders,
except with respect to Events of Default of which such Agent has actual
knowledge, and unless such Agent shall have received written notice from a
Lender or the Borrower referring to this Agreement, describing such Default or
Event of Default, and stating that such notice is a "Notice of Default". Such
Agent promptly will notify the Lenders of its receipt of any such notice or of
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any Event of Default of which such Agent has actual knowledge. If any Lender
obtains actual knowledge of any Event of Default, such Lender promptly shall
notify the other Lenders and each Agent of such Event of Default. Each Lender
shall be solely responsible for giving any notices to its Participants, if any.
Subject to SECTIONS 13.02 AND 13.07, each Agent shall take such action with
respect to such Default or Event of Default as may be requested by the Required
Lenders in accordance with ARTICLE XI; PROVIDED, HOWEVER, that unless and until
such Agent has received any such request, such 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.
SECTION 13.04. RIGHTS AS A LENDER.
(a) With respect to its Commitments and the Loans made by it,
GCF (and any successor acting as Administrative Agent, if any, as permitted by
SECTION 13.08(A)) in its capacity as a Lender under the Loan Documents shall
have the same rights, privileges and powers under the Loan Documents 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 the Administrative Agent in its individual
capacity. GCF (and any successor acting as Administrative Agent) and its
affiliates may (without having to account for the same to any Lender) accept
deposits from, lend money to, make investments in and generally engage in any
kind of banking, trust or other business with the Borrower (and any of its
Subsidiaries or Affiliates) as if it were not acting as Administrative Agent,
and GCF (and its successors) and its affiliates may accept fees and other
consideration from the Borrower for services in connection with this Agreement
or otherwise without having to account for the same to the Lenders.
(b) With respect to its Commitments and the Loans made by it,
GCF (and any successor acting as Collateral Agent, if any, as permitted by
SECTION 13.08(B)) in its capacity as a Lender under the Loan Documents shall
have the same rights, privileges and powers under the Loan Documents as any
other Lender and may exercise the same as though it were not acting as
Collateral Agent, and the term "Lender" or "Lenders" shall, unless the context
otherwise indicates, include the Collateral Agent in its individual capacity.
GCF (and any successor acting as Collateral Agent) and its affiliates may
(without having to account for the same to any Lender) accept deposits from,
lend money to, make investments in and generally engage in any kind of banking,
trust or other business with the Borrower (and any of its Subsidiaries or
Affiliates) as if it were not acting as Collateral Agent, and GCF and its
affiliates may accept fees and other consideration from the Borrower for
services in connection with this Agreement or otherwise without having to
account for the same to the Lenders.
SECTION 13.05. COSTS AND EXPENSES; INDEMNIFICATION. Each Agent
may incur and pay fees, costs, and expenses under the Loan Documents to the
extent such Agent deems reasonably necessary or appropriate for the performance
and fulfillment of its functions, powers, and obligations pursuant to the Loan
Documents, including without limiting the generality of the foregoing, court
costs, reasonable attorneys fees and expenses, costs of collection by outside
collection agencies and auctioneer fees and costs of security guards or
insurance premiums paid to maintain the Collateral, whether or not the Borrower
is obligated to reimburse the Lenders for such expenses pursuant to the Loan
Agreement or otherwise. Each Lender hereby agrees that it is and shall be
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obligated to pay to or reimburse the Administrative Agent and the Collateral
Agent for the amount of such Lender's Pro Rata Share thereof. Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand the Agent-Related Persons (without limiting the obligation of the
Borrower to do so), according to their Pro Rata Shares, from and against any and
all Indemnified Matters (including without limitation Indemnified Matters
arising under any Environmental Law as provided in SECTION 14.16); PROVIDED,
HOWEVER, that no Lender shall be liable for the payment to the Agent-Related
Persons of any portion of such Indemnified Matters resulting solely from such
Person's gross negligence or willful misconduct as determined in a final order
by a court of competent jurisdiction. Without limitation of the foregoing, each
Lender shall reimburse the Administrative Agent or the Collateral Agent, as the
case may be, upon demand for such Lender's ratable share of any costs or
out-of-pocket expenses (including attorneys fees and expenses) incurred by such
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein. The undertaking in this Section shall
survive the payment of all Obligations hereunder and the resignation or
replacement of any Agent.
SECTION 13.06. NON-RELIANCE ON AGENTS AND OTHER LENDERS. Each
Lender acknowledges that none of the Agent-Related Persons has made any
representation or warranty to it, and that no act by any Agent hereinafter
taken, including any review of the affairs or Property of the Borrower and any
of its Subsidiaries, shall be deemed to constitute any representation or
warranty by any Agent-Related Person to any Lender. Each Lender represents to
each Agent that it has, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and any other Person (other than the Lenders)
party to a Loan Document, and all applicable bank regulatory laws relating to
the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Borrower. Each Lender also represents
that it will, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and any other Person (other than the Lenders)
party to a Loan Document. Except for notices, reports and other documents
expressly herein required to be furnished to the Lenders by such Agent, no Agent
shall have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, prospects, operations, Property,
financial and other condition or creditworthiness of the Borrower and any other
Person party to a Loan Document that may come into the possession of any of the
Agent-Related Persons.
SECTION 13.07. FAILURE TO ACT. Except for action expressly
required of any Agent under the Loan Documents, such Agent shall in all cases be
fully justified in failing or refusing to act under any Loan Document unless it
shall receive further assurances to its satisfaction from the Lenders of their
indemnification obligations under SECTION 13.05 against any and all liability
and expense that may be incurred by it by reason of taking or continuing to take
any such action.
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SECTION 13.08. RESIGNATION OF AGENT.
(a) Subject to the appointment and acceptance of a successor
Administrative Agent as provided below, the Administrative Agent may resign at
any time by notice to the Lenders and the Borrower. Upon any such resignation,
the Required Lenders with the consent of the Borrower (which consent shall not
be unreasonably withheld) shall have the right to appoint a successor
Administrative Agent. If no successor Administrative Agent shall have been
appointed by the Required Lenders and consented to by the Borrower and no
successor Administrative Agent shall have accepted such appointment within 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. Upon the acceptance of any appointment as the
Administrative Agent by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, remedies, powers, privileges, duties and obligations of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations, under the Loan Documents. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions of
this ARTICLE XIII 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.
(b) Subject to the appointment and acceptance of a successor
Collateral Agent as provided below, the Collateral Agent may resign at any time
by notice to the Lenders and the Borrower. Upon any such resignation, the
Required Lenders with the consent of the Borrower (which consent shall not be
unreasonably withheld) shall have the right to appoint a successor Collateral
Agent. If no successor Collateral Agent shall have been appointed by the
Required Lenders and consented to by the Borrower and no successor Collateral
Agent shall have accepted such appointment within 30 days after the retiring
Collateral Agent's giving of notice of resignation, then the retiring Collateral
Agent may, on behalf of the Lenders, appoint a successor Collateral Agent. Upon
the acceptance of any appointment as Collateral Agent by a successor Collateral
Agent, such successor Collateral Agent shall thereupon succeed to and become
vested with all the rights, remedies, powers, privileges, duties and obligations
of the retiring Collateral Agent, and the retiring Collateral Agent shall be
discharged from its duties and obligations, under the Loan Documents. After any
retiring Collateral Agent's resignation as Collateral Agent, the provisions of
this ARTICLE XIII 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 Collateral
Agent.
SECTION 13.09. COLLATERAL SUB-AGENTS. Each Lender by its
execution and delivery of this Agreement (or any joinder hereto or any
Assignment and Acceptance hereunder), agrees that, in the event it shall hold
any monies or other investments on account of the Borrower, such monies or other
investments shall be held in the name and under the control of the
Administrative Agent or such Lender, and the Administrative Agent or such Lender
shall hold such monies or other investments as a collateral sub-agent for
Collateral Agent under this Agreement and the other Loan Documents. The Borrower
by its execution and delivery of this Agreement hereby consents to the
foregoing.
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SECTION 13.10. COMMUNICATIONS BY BORROWER. Except as otherwise
provided in this Agreement, the Borrower's communications with respect to the
Loan Documents shall be with the Administrative Agent or the Collateral Agent,
as the case may be, and the Borrower shall be under no obligation to communicate
directly with the Lenders.
SECTION 13.11. COLLATERAL MATTERS.
(a) The Lenders hereby irrevocably authorize the Collateral
Agent, at its option and in its sole discretion, to release any Lien on any
Collateral (i) upon the termination of the Commitments and payment and
satisfaction in full of all Obligations; (ii) constituting property being sold
or disposed of if a release is required or desirable in connection therewith and
if the Borrower certifies in writing to the Collateral Agent that the sale or
disposition is permitted under this Agreement or the other Loan Documents (and
the Collateral Agent may rely conclusively on any such certificate, without
further inquiry); (iii) constituting property in which the Borrower owned no
interest at the time the security interest was granted or at any time
thereafter; (iv) constituting property leased to the Borrower under a lease that
has expired or is terminated in a transaction permitted under this Agreement, or
(v) constituting Equipment which, in the aggregate with all other dispositions
of Equipment covered by this clause (v), has a fair market value or book value,
whichever is less, of $500,000 or less. Except as provided above or expressly
provided in any other Loan Document, the Collateral Agent will not execute and
deliver a release of any Lien on any Collateral without the prior written
authorization of all of the Lenders. Upon request by the Collateral Agent or the
Borrower at any time, the Administrative Agent and the Lenders will confirm in
writing the Collateral Agent's authority to release any such Liens on particular
types or items of Collateral pursuant to this SECTION 13.11; PROVIDED, HOWEVER,
that (1) the Collateral Agent shall not be required to execute any document
necessary to evidence such release on terms that, in the Collateral Agent's
opinion, would expose the Collateral Agent to liability or create any obligation
or entail any consequence other than the release of such Lien without recourse,
representation, or warranty, and (2) such release shall not in any manner
discharge, affect, or impair the Obligations or any Liens (other than those
expressly being released) upon (or obligations of the Borrower in respect of)
all interests retained by the Borrower, including, the proceeds of any sale, all
of which shall continue to constitute part of the Collateral.
(b) The Collateral Agent shall have no obligation whatsoever
to any other Lenders to assure that the Collateral exists or is owned by the
Borrower or is cared for, protected, or insured or has been encumbered, or that
the Lenders' Liens have been properly or sufficiently or lawfully created,
perfected, protected, or enforced or are entitled to any particular priority, or
to exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to the Collateral Agent pursuant to
any of the Loan Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission or event related thereto, subject to the terms
and conditions contained herein, the Collateral Agent may act in any manner it
may deem appropriate, in its sole discretion given the Collateral Agent's own
interest in the Collateral in its capacity as one of the Lenders and that the
Collateral Agent shall have no other duty or liability whatsoever to any other
Lender as to any of the foregoing, except as otherwise provided herein.
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SECTION 13.12. RESTRICTIONS ON ACTIONS BY THE AGENTS AND THE
LENDERS; SHARING PAYMENTS.
(a) The Administrative Agent and each of the Lenders agree
that it shall not, without the express consent of the Collateral Agent, and that
it shall, to the extent it is lawfully entitled to do so, upon the request of
the Administrative Agent and the Collateral Agent, set off against the
Obligations, any amounts owing by such Lenders to the Borrower or any accounts
of the Borrower now or hereafter maintained with such Lenders. The
Administrative Agent and each of the Lenders further agrees that it shall not,
unless specifically requested to do so by the Collateral Agent, take or cause to
be taken any action, including the commencement of any legal or equitable
proceedings, to foreclose any Lien on, or otherwise enforce any security
interest in, any of the Collateral the purpose of which is, or could be, to give
such Lenders any preference or priority against the other Lenders with respect
to the Collateral.
(b) Subject to SECTION 13.04, if, at any time or times any
Lender shall receive (i) by payment, foreclosure, setoff or otherwise, any
proceeds of Collateral or any payments with respect to the Obligations arising
under, or relating to, this Agreement or the other Loan Documents, except for
any such proceeds or payments received by such Lender from the Administrative
Agent pursuant to the terms of this Agreement, or (ii) payments from the
Administrative Agent in excess of such Lender's ratable portion of all such
distributions by the Administrative Agent, such Lender promptly shall turn the
same over to Administrative Agent, in kind, and with such endorsements as may be
required to negotiate the same to the Administrative Agent, or in same day
funds, as applicable, for the account of the Lenders and for apportionment and
application to the Obligations in accordance with SECTION 3.02.
SECTION 13.13. SEVERAL OBLIGATIONS; NO LIABILITY.
Notwithstanding that certain of the Loan Documents now or hereafter may have
been or will be executed only by or in favor of an Agent in its capacity as
such, and not by or in favor of the Lenders, any and all obligations on the part
of the Administrative Agent, if any, to make any credit available hereunder
shall constitute the several (and not joint) obligations of the respective
Lenders on a ratable basis, according to their respective Commitments, to make
an amount of such credit not to exceed, in principal amount, at any one time
outstanding, the amount of their respective Commitments. Nothing contained
herein shall confer upon any Lender any interest in, or subject any Lender to
any liability for, or in respect of, the business, assets, profits, losses, or
liabilities of any other Lenders. Each Lender shall be solely responsible for
notifying its Participants of any matters relating to the Loan Documents to the
extent any such notice may be required, and no Lender shall have any obligation,
duty, or liability to any Participant of any other Lender. Except as provided in
SECTION 13.05, no Agent nor any Lender shall have any liability for the acts of
any other Agent or any other Lender. No Lender shall be responsible to the
Borrower or any other Person for any failure by any other Lender to fulfill its
obligations to make credit available hereunder, nor to advance for it or on its
behalf in connection with its Commitment, nor to take any other action on its
behalf hereunder or in connection with the financing contemplated herein.
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ARTICLE XIV
MISCELLANEOUS
SECTION 14.01. NOTICES, ETC. All notices and other
communications provided for hereunder shall be in writing and shall be mailed,
telecopied or delivered:
if to the borrower, at the following address:
--------------------------------------------
Overhill Farms, Inc.
0000 X. Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attn: Chief Financial Officer
with a copy to:
--------------
Xxxxx & Xxxxxx, LLP
000 Xxxxx Xxxxxxxxx, 00xx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attn: Xxxxx Xxxxx
if to the Administrative Agent, at the following address:
--------------------------------------------------------
Guggenheim Corporate Funding, LLC
000 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attn: Xxxxxxx Xxxxxx
with a copy to:
--------------
Sidley Austin LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attn: Xxxxx Xxxxxx and Xxxx Xxxxxxxxxx
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if to the Collateral Agent, at the following address:
----------------------------------------------------
Guggenheim Corporate Funding, LLC
000 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attn: Xxxxxxx Xxxxxx
with a copy to:
--------------
Sidley Austin LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attn: Xxxxx Xxxxxx and Xxxx Xxxxxxxxxx
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other party complying as to delivery with the terms
of this SECTION 14.01. All such notices and other communications shall be
effective, (i) if mailed, when received or five (5) days after deposited in the
mails with postage pre-paid and properly addressed, whichever occurs first, (ii)
if telecopied, when transmitted and confirmation received, or (iii) if
delivered, upon delivery, except that notices to the Administrative Agent
pursuant to ARTICLE II shall not be effective until received by the
Administrative Agent.
SECTION 14.02. AMENDMENTS, ETC. No amendment or waiver of any
provision of this Agreement or any other Loan Document, and no consent to any
departure by the Borrower or any Lenders therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Borrower and the
Required Lenders (or by the Administrative Agent on behalf of the Required
Lenders, at the written request of the Required Lenders), and then such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; PROVIDED, HOWEVER, that no such
waiver, amendment, or consent shall, unless in writing and signed by the
Borrower, do any of the following:
(a) increase or extend the Commitment of any Lender without
the consent of such Lender;
(b) amend or change the definition of "Commitment Termination
Date", "Tranche A Maturity Date" or "Tranche B Maturity Date", or postpone or
delay any date fixed by this Agreement or any other Loan Document for any
payment of interest, fees or other amounts due to the Lenders (or any of them)
hereunder or under any other Loan Document without the consent of all Lenders;
(c) reduce the principal of, or the rate of interest specified
herein, on any Loan, or any fees or other amounts payable hereunder or under any
other Loan Document, or forgive, compromise, or cancel any of the Obligations
without the consent of all adversely affected Lenders;
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(d) change the percentage of the Commitments that is required
for the Lenders or any of them to take any action hereunder without the consent
of all Lenders;
(e) amend this SECTION 14.02 or any provision of the Agreement
providing for consent or other action by all Lenders without the consent of all
Lenders;
(f) release substantially all of the Collateral other than as
permitted by SECTION 13.11, or subordinate the security interests and liens of
the Collateral Agent for the benefit of the Lenders, without the consent of all
Lenders;
(g) change the definition of "Required Lenders" without the
consent of all Lenders;
(h) release the Borrower from any Obligation for the payment
of money without the consent of all adversely affected Lenders;
(i) agree to subordinate any of the Obligations in right of
payment to any other Indebtedness, without the consent of the holder of such
Obligation; or
(j) amend or change the provisions of SECTION 3.03 without the
consent of all Lenders adversely affected thereby;
and, PROVIDED FURTHER, HOWEVER, that no such waiver, amendment, or consent
shall, unless in writing and signed by the Borrower, the Required Lenders and
the Required Revolving Lenders, do any of the following:
(k) waive, amend or change any provisions of Section 2.01,
2.04(a), 2.04(d), 3.01(b)(i), 3.01(b)(iv), 4.04(b), 4.04(c), 5.02, the rights of
the Administrative Agent under 8.05, Article X or Article XII or any Event of
Default as a result of the breach of any such Section or any such Article; or
(l) waive, amend or change the definition of "Administrative
Agent", "Administrative Agent Account", "Alternate Base Rate", "Availability",
"Availability Period", "Collateral Reports", "Defaulting Lender", "Inventory",
"Material Adverse Effect", "Prime Rate", "Reserves", "Revolving Credit
Exposure", "Revolving Lender", "Revolving Loan", "Revolving Loan Account",
"Revolving Notes", "Required Revolving Lenders", "Revolving Loan Commitment" or
"Revolving Loan Exposure";
and, PROVIDED FURTHER, HOWEVER, that no such waiver, amendment, or consent
shall, unless in writing and signed by the Borrower and the Required Lenders, do
any of the following:
(m) waive, amend or change any provisions of SECTION 2.02,
3.01(B)(II) OR 3.01(B)(III) OR ARTICLE X or any Event of Default as a result of
the breach of such Section without the consent of the Required Tranche A
Lenders; or
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(n) waive, amend or change the definition of "Required Tranche
A Lenders" or "Tranche A Term Loan Exposure" without the consent of all Tranche
A Lenders;
and, PROVIDED FURTHER, HOWEVER, that no such waiver, amendment, or consent
shall, unless in writing and signed by the Borrower and the Required Lenders, do
any of the following:
(o) waive, amend or change any provisions of SECTION 2.03,
3.01(B)(II) OR 3.01(B)(III) OR ARTICLE X or any Event of Default as a result of
the breach of such Section without the consent of the Required Tranche B
Lenders; or
(p) waive, amend or change the definition of "Required Tranche
B Lenders" or "Tranche B Term Loan Exposure" without the consent of all Tranche
B Lenders.
Any waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it was given. Notwithstanding anything to the
contrary contained in this SECTION 14.02, no amendment, modification, waiver or
consent shall affect the rights or duties of the Administrative Agent or
Collateral Agent under this Agreement or the other Loan Documents, unless made
in writing and signed by the Administrative Agent or Collateral Agent, as the
case may be, in addition to the Lenders required above to take such action.
SECTION 14.03. NO WAIVER; REMEDIES, ETC. No failure on the
part of the Lenders or any Agent to exercise, and no delay in exercising, any
right hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any right under any Loan
Document preclude any other or further exercise thereof or the exercise of any
other right. The rights and remedies of the Lenders and the Agents provided
herein and in the other Loan Documents are cumulative and are in addition to,
and not exclusive of, any rights or remedies provided by law. The rights of the
Lenders and the Agents under any Loan Document against any party thereto are not
conditional or contingent on any attempt by the Lenders and the Agents to
exercise any of their rights under any other Loan Document against such party or
against any other Person.
SECTION 14.04. EXPENSES; TAXES, ATTORNEYS' FEES. The Borrower
will pay, two (2) Business Days following demand therefor, all reasonable
out-of-pocket fees, costs and expenses incurred by or on behalf of the
Administrative Agent, regardless of whether the transactions contemplated hereby
are consummated, including, without limitation, out-of-pocket fees, costs and
expenses of counsel (but excluding in-house counsel) for the Administrative
Agent, accounting, due diligence, physical counts, valuations, fees of Rating
Agencies associated with the rating of the Loans, investigations, monitoring of
assets, appraisals of Collateral, UCC searches, environmental assessments,
miscellaneous disbursements, financial examination, travel, lodging and meals
arising from or relating to: (a) the negotiation, preparation, execution,
delivery, performance and administration of this Agreement and the other Loan
Documents, (b) any requested amendments (other than amendments requested solely
by the Lenders), waivers or consents to this Agreement or the other Loan
Documents whether or not such documents become effective or are given, (c) the
preservation and protection of any of the Lenders' rights under this Agreement
or the other Loan Documents, (d) the filing of any petition, complaint, answer,
motion or other pleading by the Lenders, or the taking of any action in respect
of the Collateral or other security, in connection with this Agreement or any
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other Loan Document, (e) the protection, collection, lease, sale, taking
possession of or liquidation of, any Collateral or other security in connection
with this Agreement or any other Loan Document, (f) any attempt to enforce any
Lien or security interest in any Collateral or other security in connection with
this Agreement or any other Loan Document, (g) any attempt to collect from the
Borrower or any other Loan Party, (h) during the continuance of an Event of
Default, the receipt by any Lender of any advice from its professionals
(including without limitation, the reasonable fees of its attorneys and
consultants) with respect to any of the foregoing (to the extent that such fees,
costs and expenses are not otherwise recoverable pursuant to any other provision
of this Agreement or any other Loan Document); PROVIDED, that the Lenders, to
the extent that they consider it to be commercially reasonable, will use a
single group of financial advisors and accountants and to the extent that either
the Term Lenders, acting as a single group, or the Revolving Lenders, acting as
a single group, do not consider it reasonably advisable under the circumstances
to use a single group of financial advisors and accountants, then each of the
Term Lenders, acting as a group, and the Revolving Lenders, acting as a group,
may use different groups of financial advisors and accountants, (i) all
liabilities and costs arising from or in connection with the past, present or
future operations of the Borrower and the Guarantors involving any damage to
real or personal property or natural resources or harm or injury alleged to have
resulted from any Release of Hazardous Materials on, upon or into such property,
(j) any liabilities and costs incurred in connection with any Remedial Action
for any Hazardous Materials present or arising out of the operations of any
facility of the Borrower and the Guarantors, or (k) any liabilities and costs
incurred in connection with any Environmental Lien. Without limitation of the
foregoing or any other provision of any Loan Document: (x) the Borrower agrees
to pay all stamp, document, transfer, recording or filing taxes or fees and
similar impositions now or hereafter determined by the Lenders to be payable in
connection with this Agreement or any other Loan Document, and the Borrower
agrees to hold the Lenders harmless from and against any and all present or
future claims, liabilities or losses with respect to or resulting from any
omission to pay or delay in paying any such taxes, fees or impositions, (y) the
Borrower agrees to pay all broker fees with respect to any broker retained by
the Borrower or any of its Subsidiaries that may become due in connection with
the transactions contemplated by this Agreement, and (z) during the continuance
of (i) a Payment Event of Default or (ii) an Event of Default created by a
violation of SECTION 9.07 OR ARTICLE X, if the Borrower or a Guarantor (A) fails
to make any payments or deposits with respect to any taxes of any kind or nature
to the extent that such payments or deposits are due and payable prior to
delinquency, (B) fails to make any payments or deposits with respect to any
other governmental assessment prior to the time that any Lien may inure against
any property of the Borrower or any of its Subsidiaries, or (C) fails to make
any payments or deposits with respect to any insurance premiums then due and
payable or otherwise comply with SECTION 7.05, except with respect to A, B, or C
above, to the extent permitted pursuant to the terms of this Agreement, then,
the Administrative Agent, in its sole discretion and without prior notice to the
Borrower, may do any or all of the following, without duplication: (X) make
payment of the same or any part thereof, (Y) set up such reserves in Borrower's
Term Loan Account as the Administrative Agent deems necessary to protect the
Lenders from the exposure created by such failure, or (Z) in the case of any
failure described in SECTION 14.04(Z)(C), obtain and maintain insurance policies
of the type described in SECTION 7.05 and take the actions with respect to such
policies which are authorized pursuant to SECTION 13.21(C). Any payment
described above in clause (z) shall not constitute an agreement by the Lenders
to make similar payments in the future or a waiver by the Lenders of any Event
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of Default under this Agreement. The Administrative Agent need not inquire as
to, or contest the validity of, any such obligation. The foregoing to the
contrary notwithstanding, the agreements set forth above in this SECTION 14.04
are subject to the limitations set forth in SECTION 9.06, solely to the extent
applicable. The Administrative Agent agrees to provide to the Borrower an
invoice with respect to each cost or expense incurred in connection with the
Loan Documents by any Lender promptly upon the Administrative Agent's receipt
thereof, and agrees, upon the reasonable request of the Borrower, to provide
reasonable backup information with respect to such costs or expenses (subject to
the right of the Administrative Agent to take whatever steps are reasonably
necessary to protect any confidential or privileged information which may be
contained therein).
SECTION 14.05. RIGHT OF SET-OFF, SHARING OF PAYMENTS, ETC.
(a) During the continuance of any Event of Default and in
addition to (and without limitation of) any right of set-off, banker's lien, or
counterclaim any Lender may otherwise have, each Lender (at its option but only
with the prior written consent of all Lenders) may, and is hereby authorized by
the Borrower to, at any time and from time to time, without notice to the
Borrower (any such notice being expressly waived by the Borrower), to the
fullest extent permitted by law, set-off and apply any and all deposits (general
or special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the credit or the
account of the Borrower against any and all Obligations now or hereafter
existing under any Loan Document, irrespective of whether or not the Lenders
shall have made any demand hereunder or thereunder and although such obligations
may be contingent or unmatured. During the continuance of any Event of Default,
the Lenders may, and are hereby authorized to, at any time and from time to
time, without notice to the Borrower (any such notice being expressly waived by
the Borrower), to the fullest extent permitted by law, set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by the Lenders to or for the
credit or the account of the Borrower against any and all Obligations now or
hereafter existing under any Loan Document, irrespective of whether or not the
Lenders shall have made any demand hereunder or thereunder. The Lenders agree to
notify the Borrower, the Collateral Agent and the Administrative Agent promptly
after any such set-off and application made by the Lenders PROVIDED that the
failure to give such notice to the Borrower shall not affect the validity of
such set-off and application.
(b) If any Lender shall obtain from the Borrower payment of
any Obligation through the exercise of any right of set-off, banker's lien, or
counterclaim or similar right or otherwise (other than from Administrative Agent
as provided in this Agreement), and, as a result of such payment, such Lender
shall have received a greater amount of the Obligations than the amount
allocable to such Lender hereunder, Administrative Agent and the other Lenders
(including such Lender) shall promptly make such adjustments from time to time
as shall be equitable, to the end that the Lenders shall share the benefit of
such excess payment (net of any expenses that may be incurred by such Lender in
obtaining or preserving such excess payment) in accordance with SECTION 3.02(B).
To such end the Lenders shall make appropriate adjustments among themselves if
such payment is rescinded or must otherwise be restored.
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(c) Nothing contained in this SECTION 14.05 shall require any
Lender to exercise any such right or shall affect the right of any Lender to
exercise, and retain the benefits of exercising, any such right with respect to
any other indebtedness or obligation of the Borrower. If, under any applicable
bankruptcy, insolvency or other similar law, any Lender receives a secured claim
in lieu of a set-off to which this SECTION 14.05 applies, such Lender shall, to
the extent practicable, exercise its rights in respect of such secured claim in
a manner consistent with the rights of Lenders entitled under this SECTION 14.05
to share in the benefits of any recovery on such secured claim.
SECTION 14.06. SEVERABILITY. Any provision of this Agreement,
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining portions hereof or affecting
the validity or enforceability of such provision in any other jurisdiction.
SECTION 14.07. REPLACEMENT OF LENDERS. If any Lender requests
compensation under SECTION 3.04, 4.02 OR 4.03, or if the Borrower is required to
pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to SECTION 3.03, or if any Lender defaults in its
obligation to fund Loans hereunder, or if any Lender has failed to consent to a
proposed amendment, waiver, discharge or termination which pursuant to the terms
of SECTION 14.02 or any other provision of any Loan Document requires the
consent of all of the Lenders or any class thereof and with respect to which the
Required Lenders or the required Lenders of the relevant class, as applicable,
shall have granted their consent, then the Borrower may, at its sole expense and
effort, upon notice to such Lender and the Administrative Agent, require such
Lender to assign and delegate, without recourse (in accordance with and subject
to the restrictions contained in SECTION 14.08), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); PROVIDED that (i) the Borrower shall have received the prior
written consent of the Administrative Agent, which consent shall not
unreasonably be withheld and (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts). A Lender shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply.
SECTION 14.08. ASSIGNMENTS AND PARTICIPATIONS. g) This
Agreement shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns; PROVIDED, HOWEVER, that the
Borrower may not assign or transfer any of its rights hereunder without the
prior written consent of all Lenders and the Agents and any such assignment
without all of the Lenders' and the Agents' prior written consent shall be null
and void. Each Lender may sell, assign or participate its rights and obligations
under this Agreement without the consent of the Borrower to a successor Lender
that is a current Lender under this Agreement, or an Affiliate thereof, or an
account managed by such Lender or Affiliate (a "MANAGED Account"). GCF for
itself and its Affiliates hereby agrees that it shall not sell, assign or
participate its rights or obligations hereunder if, as a result of such sale,
assignment or transfer and after giving effect thereto, GCF and its Affiliates
would own in the aggregate less than 50.1% of the aggregate principal amount of
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the Total Facility Exposure on the date thereof. Prior written consent of the
Administrative Agent and the Borrower is required for any Lender to sell, assign
or participate its rights and obligations under this Agreement (which consent
shall not be unreasonably withheld) to any Person other than an Affiliate or a
Managed Account of such Lender or to a then current Lender or an Affiliate
thereof. Each assignment, other than an assignment to a current Lender under
this Agreement, or an Affiliate or a Managed Account thereof, shall (unless the
Administrative Agent otherwise consents in writing) be in an amount not less
than the lesser of (i) $1,000,000 or (ii) the remaining amount of the assigning
Lender's commitment (calculated as at the date of such assignment). An
assignment fee of $3,500 will be payable by the assigning Lender to the
Administrative Agent for each assignment. Each Lender may disclose information
to prospective participants and assignees in accordance with SECTION 14.20.
(b) Any Person who is assigned any Loan shall comply with the
certification requirements of SECTION 3.03(E) OR SECTION 3.03(F), as applicable.
(c) From and after the date that the Administrative Agent
notifies the assignor Lender that it has received an executed Assignment and
Acceptance (i) the Assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, shall have the rights and obligations of a
Lender under the Loan Documents, and (ii) the assignor Lender shall, to the
extent that rights and obligations hereunder and under the other Loan Documents
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights (except rights granted pursuant to SECTION 14.16 with respect claims,
losses, demands, settlements, damages, liabilities, obligations, penalties,
fines, fees reasonable costs and expenses incurred with respect to the period of
time that the assignor Lender was a party to this Agreement) and be released
from its obligations under this Agreement (except with respect to SECTION 14.05)
(and in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement and
the other Loan Documents, such Lender shall cease to be a party hereto and
thereto), and such assignment shall effect a novation among the Borrower, the
assignor Lender, and the Assignee.
(d) Immediately upon the effectiveness of such Assignment and
Acceptance, this Agreement shall be deemed to be amended to the extent, but only
to the extent, necessary to reflect the addition of the Assignee and the
resulting adjustment of the Commitments arising therefrom. The Commitments
allocated to each Assignee shall reduce such Commitments of the assigning Lender
pro tanto.
(e) In connection with any such assignment or participation or
proposed assignment or participation, a Lender may disclose all documents and
information which it now or hereafter may have relating to the Borrower or the
Borrower's business; PROVIDED in each case that such assignee or participant (or
prospective assignee or participant) shall agree to maintain the confidentiality
of such information pursuant to Section 14.20.
SECTION 14.09. COUNTERPARTS. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same agreement. Delivery of an
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executed counterpart of this Agreement or any of the other Loan Documents by
telecopy shall have the same force and effect as the delivery of an original
executed counterpart of this Agreement or any of such other Loan Documents. Any
party delivering an executed counterpart of any such agreement by telecopy shall
also deliver an original executed counterpart, but the failure to do so shall
not affect the validity, enforceability or binding effect of such agreement.
SECTION 14.10. GOVERNING LAW. THIS AGREEMENT, THE NOTES AND,
EXCEPT TO THE EXTENT OTHERWISE PROVIDED THEREIN, THE OTHER LOAN DOCUMENTS SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
SECTION 14.11. CONSENT TO JURISDICTION, SERVICE OF PROCESS AND
VENUE. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT MAY BE BROUGHT IN XXX XXXXXX XX XXX XXXXX XX XXX XXXX IN THE
BOROUGH OF MANHATTAN COUNTY OF NEW YORK OR OF THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE BORROWER HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE
BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF
THE AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER
REPRESENTATIVE AT ITS ADDRESS FOR NOTICES SET FORTH IN SECTION 14.01, SUCH
SERVICE TO BECOME EFFECTIVE FIVE (5) DAYS AFTER SUCH MAILING. THE BORROWER
HEREBY IRREVOCABLY APPOINTS CT CORPORATION SYSTEM, PRESENTLY LOCATED AT 000
XXXXXX XXXXXX, XXX XXXX, XX 00000, XXX, AS ITS AGENT FOR SERVICE OF PROCESS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING. NOTHING HEREIN SHALL AFFECT THE RIGHT
OF THE LENDERS OR AGENTS TO SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER
IN ANY OTHER JURISDICTION. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE
BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, THE BORROWER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.
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SECTION 14.12. WAIVER OF JURY TRIAL, ETC. THE BORROWER, THE
LENDERS AND THE AGENTS HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT, THE NOTES
OR OTHER LOAN DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT,
DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN
CONNECTION THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN
CONNECTION WITH THIS AGREEMENT, AND AGREE THAT ANY SUCH ACTION, PROCEEDINGS OR
COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. THE BORROWER
CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF THE LENDERS OR
AGENTS HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE LENDERS OR AGENTS WOULD
NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE
FOREGOING WAIVERS. THE BORROWER HEREBY ACKNOWLEDGES THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE LENDER AND AGENTS ENTERING INTO THIS AGREEMENT.
SECTION 14.13. CONSENT. Except as otherwise expressly set
forth herein or in any other Loan Document to the contrary, if the consent,
approval, satisfaction, determination, judgment, acceptance or similar action
(an "ACTION") of the Lenders or Agents, shall be permitted or required pursuant
to any provision hereof or any provision of any other agreement to which the
Borrower or any Guarantor is party and to which the Lenders or Agents have
succeeded thereto, such Action shall be required to be in writing and may be
withheld or denied by the Lenders or Agents with or without any reason in their
respective sole and absolute discretion.
SECTION 14.14. INTERPRETATION. Neither this Agreement nor any
uncertainty or ambiguity herein shall be construed or resolved against the
Lenders, the Agents or the Borrower, whether under any rule of construction or
otherwise. On the contrary, this Agreement has been reviewed by all parties and
shall be construed and interpreted according to the ordinary meaning of the
words used so as to accomplish fairly the purposes and intentions of all parties
hereto.
SECTION 14.15. REINSTATEMENT; CERTAIN PAYMENTS. If any claim
is ever made upon the Lenders or Agents for repayment or recovery of any amount
or amounts received by the Lenders or Agents in payment or received on account
of any of the Obligations, the Lenders or Agents shall give prompt notice of
such claim to the Borrower, and if the Lenders or Agents repay all or part of
such amount by reason of (i) any judgment, decree or order of any court of
competent jurisdiction or administrative body having jurisdiction over the
Lenders or Agents or any of their respective property, or (ii) any good faith
settlement or compromise of any such claim effected by the Lenders or Agents
with any such claimant, then and in such event the Borrower agrees that (A) any
such judgment, decree, order, settlement or compromise shall be binding upon it
notwithstanding the cancellation of any instrument evidencing the Obligations or
the other Loan Documents or the termination of this Agreement or the other Loan
Documents, and (B) it shall be and remain liable to the Lenders or Agents
hereunder for the amount so repaid or recovered to the same extent as if such
amount had never originally been received by the Lenders or Agents.
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SECTION 14.16. INDEMNIFICATION. In addition to the Borrower's
other Obligations under this Agreement, the Borrower agrees to defend, protect,
indemnify and hold harmless the Lenders and each of their respective Affiliates,
the Administrative Agent, the Collateral Agent, the Agent-Related Persons and
the Lender-Related Persons (collectively called the "INDEMNITEES") from and
against any and all claims, losses, demands, settlements, damages, liabilities,
obligations, penalties, fines, fees, reasonable costs and expenses (including,
without limitation, reasonable attorneys' fees, costs and expenses, but
excluding income, franchise and similar taxes of an Indemnitee) incurred by such
Indemnitees, whether prior to or from and after the Signing Date, as a result of
or arising from or relating to or in connection with any of the following: (i)
the negotiation, preparation, execution or performance or enforcement of this
Agreement, any other Loan Document or of any other document executed in
connection with the transactions contemplated by this Agreement, (ii) the
Administrative Agent, the Collateral Agent or the Lenders furnishing of funds to
the Borrower under this Agreement, including, without limitation, the management
of any such Loans, (iii) any matter relating to the financing transactions
contemplated by this Agreement or the other Loan Documents or by any document
executed in connection with the transactions contemplated by this Agreement or
the other Loan Documents, (iv) any claim, litigation, investigation or
administrative or judicial proceeding in connection with any transaction
contemplated in, or consummated under, the Loan Documents, or (v) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto, including without limitation,
claims, litigations, investigations or other proceedings arising out of (A) the
presence, disposal, Release or threatened Release of any Hazardous Materials on,
in, at, to, from or under any property at any time owned or occupied by the
Borrower or any of its Subsidiaries (or any of their respective predecessors in
interest or title) or at any facility which received Hazardous Materials
generated by the Borrower or any of its Subsidiaries or any of their respective
predecessors in interest in connection with the receipt of such Hazardous
Materials, (B) any personal injury (including wrongful death) or property damage
(real or personal) arising out of or related to such Hazardous Materials, (C)
any investigation, lawsuit brought or threatened, settlement reached or
government order relating to such Hazardous Materials, (D) any violation of any
Environmental Law by the Borrower or any of its Subsidiaries or any of their
respective predecessors in interest, and/or (E) any Environmental Action
(collectively, the "INDEMNIFIED MATTERS"); PROVIDED, HOWEVER, that the Borrower
shall not have any obligation to any Indemnitee under this SECTION 14.16 for any
Indemnified Matter to the extent resulting from the gross negligence or willful
misconduct of such Indemnitee, as determined by a final judgment of a court of
competent jurisdiction; PROVIDED, HOWEVER, that no Loan Party shall be required
to reimburse the legal fees and expenses of more than one outside counsel (in
addition to up to one local counsel in each applicable local jurisdiction) for
all Indemnitees under this SECTION 14.16 unless on advice of outside counsel,
representation of all such Indemnitees would be inappropriate due to the
existence of an actual or potential conflict of interest. Such indemnification
for all of the foregoing losses, damages, fees, costs and expenses of the
Indemnitees shall be due and payable two (2) Business Days after demand therefor
and are chargeable against the Revolving Loan Account. To the extent that the
undertaking to indemnify, pay and hold harmless set forth in this SECTION 14.16
may be unenforceable because it is violative of any law or public policy, the
Borrower shall contribute the maximum portion which it is permitted to pay and
satisfy under applicable law, to the payment and satisfaction of all Indemnified
Matters incurred by the Indemnitees. This Indemnity shall survive the repayment
of the Obligations and the discharge of the Liens granted under the Loan
Documents.
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SECTION 14.17. INTEREST. It is the intention of the parties
hereto that each Agent and each Lender shall conform strictly to usury laws
applicable to it. Accordingly, if the transactions contemplated hereby or by any
other Loan Document would be usurious as to any Agent or any Lender under laws
applicable to it (including the laws of the United States of America and the
State of New York or any other jurisdiction whose laws may be mandatorily
applicable to such Agent or such Lender notwithstanding the other provisions of
this Agreement), then, in that event, notwithstanding anything to the contrary
in this Agreement or any other Loan Document or any agreement entered into in
connection with or as security for the Obligations, it is agreed as follows: (i)
the aggregate of all consideration which constitutes interest under law
applicable to any Agent or any Lender that is contracted for, taken, reserved,
charged or received by such Agent or such Lender under this Agreement or any
other Loan Document or agreements or otherwise in connection with the
Obligations shall under no circumstances exceed the maximum amount allowed by
such applicable law, any excess shall be canceled automatically and if
theretofore paid shall be credited by such Agent or such Lender on the principal
amount of the Obligations (or, to the extent that the principal amount of the
Obligations shall have been or would thereby be paid in full, refunded by such
Agent or such Lender, as applicable, to the Borrower); and (ii) in the event
that the maturity of the Obligations is accelerated by reason of any Event of
Default under this Agreement or otherwise, or in the event of any required or
permitted prepayment, then such consideration that constitutes interest under
law applicable to any Agent or any Lender may never include more than the
maximum amount allowed by such applicable law, and excess interest, if any,
provided for in this Agreement or otherwise shall be canceled automatically by
such Agent or such Lender, as applicable, as of the date of such acceleration or
prepayment and, if theretofore paid, shall be credited by such Agent or such
Lender, as applicable, on the principal amount of the Obligations (or, to the
extent that the principal amount of the Obligations shall have been or would
thereby be paid in full, refunded by such Agent or such Lender to the Borrower).
All sums paid or agreed to be paid to any Agent or any Lender for the use,
forbearance or detention of sums due hereunder shall, to the extent permitted by
law applicable to such Agent or such Lender, be amortized, prorated, allocated
and spread throughout the full term of the Loans until payment in full so that
the rate or amount of interest on account of any Loans hereunder does not exceed
the maximum amount allowed by such applicable law. If at an time and from time
to time (x) the amount of interest payable to any Agent or any Lender on any
date shall be computed at the Highest Lawful Rate applicable to such Agent or
such Lender pursuant to this SECTION 14.17 and (y) in respect of any subsequent
interest computation period the amount of interest otherwise payable to such
Agent or such Lender would be less than the amount of interest payable to such
Agent or such Lender computed at the Highest Lawful Rate applicable to such
Agent or such Lender, then the amount of interest payable to such Agent or such
Lender in respect of such subsequent interest computation period shall continue
to be computed at the Highest Lawful Rate applicable to such Agent or such
Lender until the total amount of interest payable to such Agent or such Lender
shall equal the total amount of interest which would have been payable to such
Agent or such Lender if the total amount of interest had been computed without
giving effect to this SECTION 14.17.
99
For purposes of this SECTION 14.17, the term "applicable law"
shall mean that law in effect from time to time and applicable to the loan
transaction between the Borrower, on the one hand, and the Agents and the
Lenders, on the other, that lawfully permits the charging and collection of the
highest permissible, lawful non-usurious rate of interest on such loan
transaction and this Agreement, including laws of the State of New York and, to
the extent controlling, laws of the United States of America.
The right to accelerate the maturity of the Obligations does
not include the right to accelerate any interest that has not accrued as of the
date of acceleration.
SECTION 14.18. RECORDS. The unpaid principal of, and interest
on, the Obligations, the interest rate or rates applicable to such unpaid
principal and interest, the duration of such applicability, the Commitment, and
the accrued and unpaid fees payable pursuant to SECTION 4.02, including without
limitation fees set forth in the Fee Letter, shall at all times be ascertained
from the records of the Lender and Agents, which shall be conclusive and binding
absent manifest or demonstrable error.
SECTION 14.19. BINDING EFFECT. This Agreement shall be binding
upon and inure to the benefit of Borrower, the Lenders and the Agents, and their
respective successors and assigns, except that the Borrower shall not have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Lenders and the Agents, and any assignment by the Lenders
shall be governed by SECTION 14.08.
SECTION 14.20. CONFIDENTIALITY. The Lenders, Administrative
Agent and Collateral Agent each agrees (on behalf of itself and each of its
affiliates, directors, officers, employees and representatives) to use
reasonable precautions to keep confidential, in accordance with its customary
procedures for handling confidential information of this nature and in
accordance with safe and sound practices of comparable commercial finance
companies, any non-public information supplied to it by the Borrower pursuant to
this Agreement or the other Loan Documents (and which at the time is not, and
does not thereafter become, publicly available or available to such Person from
another source not known to be subject to a confidentiality obligation to such
Person not to disclose such information), or available to such Person from
another source not known to be subject to a confidentiality obligation to such
Person not to disclose such information, PROVIDED that nothing herein shall
limit the disclosure of any such information (a) to the extent required by
statute, rule, regulation or judicial process, (b) to Lender, Administrative
Agent, Collateral Agent, to counsel, accountants, auditors and other advisors
for such member of the Lenders, or to counsel for any other member of the
Lenders, (c) to examiners, auditors, or accountants to the extent required by
any court, governmental or administrative agency, pursuant to any subpoena or
other legal process, or by any law, statute, regulation or court order, or in
connection with any litigation to which any of the Agents or the Lenders are
party, or (d) to any assignee or participant (or prospective assignee or
participant) so long as such assignee or participant (or prospective assignee or
participant) first executes a confidentiality agreement.
SECTION 14.21. POWER OF ATTORNEY. The Borrower hereby
irrevocably designates, makes, constitutes, and appoints the Collateral Agent
(and all Persons designated by the Collateral Agent) as the Borrower's true and
100
lawful attorney (and agent-in-fact), and the Collateral Agent, or the Collateral
Agent's agent, may, without notice to the Borrower and in either the Borrower's
or the Collateral Agent's name, but at the cost and expense of the Borrower:
(a) During the continuance of an Event of Default as the
Collateral Agent or said agent, in its sole discretion, may determine, endorse
the Borrower's name on any checks or any other evidence of payment or proceeds
of the Collateral which come into the possession of the Lenders or Agents or
under the Lenders' or Agents' control and shall deposit such item of payment
into the Blocked Account and credit the amount thereof (in accordance with the
provisions of this Agreement, including without limitation, SECTION 3.02) to the
Obligations.
(b) During the continuance of an Event of Default, do any of
the following, at its election in its discretion: (A) sell or assign any
Collateral, and settle any legal proceedings brought to collect any Collateral
(except legal proceedings involving, on the one hand, the Borrower or any of its
Subsidiaries, and on the other hand, any Agent or any Lender), in each case,
upon such terms, for such amounts, and at such time or times as Collateral Agent
deems advisable, subject to the provisions of any Loan Document applicable
thereto and to standards of commercial reasonableness, (B) upon the reasonable
request of Collateral Agent, upon the premises of the Borrower and its
Subsidiaries (but, without disruption to the business activities of the Borrower
and its Subsidiaries), review and obtain copies of all mail related to the
Collateral which is addressed to the Borrower or any of its Subsidiaries, (C)
prepare, file, and sign the Borrower's name to any notice of lien, assignment,
or satisfaction of lien or similar document, which in each case are sent to
account debtors (as such term is defined in the UCC) of the Borrower or any of
its Subsidiaries in connection with any portion of the Collateral, (D) endorse
the name of the Borrower upon any chattel paper, instrument, freight xxxx, xxxx
of lading or similar document relating to the Collateral (including without
limitation any items of payment or proceeds relating to any Collateral) and,
shall in all such instances involving an instrument or other items, deposit the
same to the account of Collateral Agent on account of the Obligations, and (E)
to the extent permitted by the Borrower's license agreements, use the
information recorded on or contained in any data processing equipment, computer
hardware, and software relating to the Accounts Receivable, Inventory,
Equipment, and any other Collateral.
(c) During the continuance of an Event of Default make and
adjust claims under policies of casualty, property, boiler and machinery,
business interruption insurance and other similar policies of insurance with
respect to the Collateral (but excluding policies of liability or worker's
compensation insurance) involving amounts greater than $50,000.
SECTION 14.22. INTEGRATION. This Agreement, together with the
other Loan Documents, reflects the entire understanding of the parties with
respect to the transactions contemplated hereby and shall not be contradicted or
qualified by any other agreement, oral or written, before the Signing Date.
SECTION 14.23. LENDER ADVERTISING. The Agents and the Lenders
shall be entitled to advertise the closing of the transactions contemplated by
this Agreement in such trade publications, business journals, newspapers of
general circulation and otherwise, as the Agents and the Lenders shall deem
appropriate, including, without limitation, the publication of a tombstone
announcing the closing of this transaction; PROVIDED, that the Agents and the
101
Lenders shall obtain the prior written consent of the Borrower prior to
disseminating any advertisement described in this SECTION 14.23 which consent
shall not be reasonably withheld.
SECTION 14.24. COMMON ENTERPRISE. The successful operation and
condition of each of the Loan Parties is dependent on the continued successful
performance of the functions of the group of the Loan Parties as a whole and the
successful operation of each of the Loan Parties is dependent on the successful
performance and operation of each other Loan Party. Each Loan Party expects to
derive benefit (and its board of directors or other governing body has
determined that it may reasonably be expected to derive benefit), directly and
indirectly, from (i) successful operations of each of the other Loan Parties and
(ii) the credit extended by the Lenders to the Borrower hereunder, both in their
separate capacities and as members of the group of companies. Each Loan Party
has determined that execution, delivery, and performance of this Agreement and
any other Loan Documents to be executed by such Loan Party is within its
purpose, will be of direct and indirect benefit to such Loan Party, and is in
its best interest.
SECTION 14.25. USA PATRIOT ACT. Each Lender that is subject to
the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)) (the "ACT") hereby notifies the Borrower that
pursuant to the requirements of the Act, it is required to obtain, verify and
record information that identifies the Borrower, which information includes the
name and address of the Borrower and other information that will allow such
Lender to identify the Borrower in accordance with the Act.
[Remainder of Page Intentionally Left Blank]
102
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
BORROWER:
---------
OVERHILL FARMS, INC.
By: /S/ XXXXX XXXXX
--------------------------------
Name: Xxxxx Xxxxx
Title: President
ADMINISTRATIVE AGENT:
--------------------
GUGGENHEIM CORPORATE FUNDING, LLC
By: /S/ XXXXXXX X. XXXXXX
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
COLLATERAL AGENT:
----------------
GUGGENHEIM CORPORATE FUNDING, LLC
By: /S/ XXXXXXX X. XXXXXX
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
LENDER:
-------
GUGGENHEIM CORPORATE FUNDING, LLC
By: /S/ XXXXXXX X. XXXXXX
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
[Signature Page to Credit Agreement]
LIST OF EXHIBITS AND SCHEDULES TO
SENIOR SECURED CREDIT AGREEMENT
Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Notice of Borrowing
Exhibit C -- Form of Notice of Conversion/
Continuation
Exhibit D -- Form of Revolving Note
Exhibit E -- Form of Tranche A Term Note
Exhibit F -- Form of Tranche B Term Note
Exhibit G -- List of Closing Documents
Exhibit H -- Form of Officer's Certificate
Exhibit I -- Form of Compliance Certificate
Schedule 1.01(A) -- Administrative Agent Account
Schedule 1.01(B) -- Controlled Disbursement Account
Schedule 1.01(C)-I -- Indebtedness as of the Signing Date
Schedule 1.01(C)-II -- Indebtedness as of the Effective Date
Schedule 1.01(D) -- Indebtedness incurred in connection
with the acquisition of certain
Equipment
Schedule 1.01(E) -- Revolving Lender,
Schedule 6.01(E) -- Capitalization and Stock Plans
Schedule 6.01(G) -- Litigation
Schedule 6.01(J) -- ERISA
Schedule 6.01(O) -- Properties
Schedule 6.01(Q) -- Environmental Matters
Schedule 6.01(R) -- Insurance
Schedule 6.01(T) -- Location of Bank Accounts
Schedule 6.01(U) -- Intellectual Property
Schedule 6.01(V) -- Material Contracts
Schedule 6.01(X) -- Employee and Labor Matters
Schedule 6.01(Y) -- Location of Collateral; Chief Place
of Business; Chief Executive Office;
FEIN; Name
Schedule 8.11 -- Environmental Law Violations; Reports;
Remedial Action
Schedule 9.03(A) -- Dispositions
Schedule 9.05 -- Existing Investments
Schedule 9.13(A) -- Stock Plans
Schedule 12.03 -- Securities Account Deposits
(Exhibits and schedules to be provided to the Securities and Exchange Commission
upon request.)
EXHIBIT 10.2
OVERHILL FARMS, INC.
FIRST AMENDMENT
TO SENIOR SECURED CREDIT AGREEMENT
This FIRST AMENDMENT TO SENIOR SECURED CREDIT AGREEMENT (this
"AMENDMENT") is dated as of May 16, 2006 and entered into by and among Overhill
Farms, Inc., a Nevada corporation ("BORROWER"), the lenders listed on the
signature pages hereof ("LENDERS") and Guggenheim Corporate Funding, LLC, a
Delaware limited liability company, as collateral agent for the Lenders (
"COLLATERAL AGENT"), and as administrative agent, arranger and syndication agent
for the Lenders ("ADMINISTRATIVE AGENT"), and is made with reference to that
certain Senior Secured Credit Agreement, dated as of April 17, 2006 (the "CREDIT
AGREEMENT"), by and among Borrower, the lenders listed on the signature pages
thereof, Collateral Agent and Administrative Agent. Capitalized terms used
herein without definition shall have the same meanings herein as set forth in
the Credit Agreement.
RECITALS
WHEREAS, Borrower and Lenders desire to amend the Credit
Agreement to change the lenders party thereto:
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT
1.1. SUBSTITUTION OF SCHEDULE 1.01(E). SCHEDULE 1.01(E) to the
Credit Agreement is hereby amended by deleting such SCHEDULE 1.01(E) in its
entirety and substituting a new SCHEDULE 1.01(E) in the form attached to this
Amendment.
SECTION 2. BORROWER'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to
amend the Credit Agreement in the manner provided herein, Borrower represents
and warrants to each Lender that the following statements are true, correct and
complete:
A. CORPORATE POWER AND AUTHORITY. Borrower has all requisite
corporate power and authority to enter into this Amendment and to carry out the
transactions contemplated by, and perform its obligations under, the Credit
Agreement as amended by this Amendment (the "AMENDED AGREEMENT").
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of
this Amendment and the performance of the Amended Agreement have been duly
authorized by all necessary corporate action on the part of Borrower.
C. NO CONFLICT. The execution and delivery by Borrower of this
Amendment and the performance by Borrower of the Amended Agreement do not and
will not (i) violate any provision of any law or any governmental rule or
regulation applicable to Borrower, the Certificate or Articles of Incorporation
or Bylaws of Borrower or any order, judgment or decree of any court or other
agency of government binding on Borrower, (ii) conflict with, result in a breach
of or constitute (with due notice or lapse of time or both) a default under any
Contractual Obligation of Borrower, (iii) result in or require the creation or
imposition of any Lien upon any of the properties or assets of Borrower (other
than Liens created under any of the Loan Documents in favor of Collateral Agent
on behalf of Lenders), or (iv) require any approval of stockholders or any
approval or consent of any Person under any Contractual Obligation of Borrower.
D. GOVERNMENTAL CONSENTS. The execution and delivery by
Borrower of this Amendment and the performance by Borrower of the Amended
Agreement do not and will not require any registration with, consent or approval
of, or notice to, or other action to, with or by, any federal, state or other
governmental authority or regulatory body.
E. BINDING OBLIGATION. This Amendment and the Amended
Agreement have been duly executed and delivered by Borrower and are the legally
valid and binding obligations of Borrower, enforceable against Borrower in
accordance with their respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability.
F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Section 6 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the First Amendment Effective Date to the same extent as
though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date.
G. ABSENCE OF DEFAULT. No event has occurred and is continuing
or will result from the consummation of the transactions contemplated by this
Amendment that would constitute an Event of Default or a Default.
SECTION 3. MISCELLANEOUS
3.1. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE
OTHER LOAN DOCUMENTS.
(i) On and after the First Amendment Effective Date,
each reference in the Credit Agreement to "this
Agreement", "hereunder", "hereof", "herein" or words
of like import referring to the Credit Agreement, and
each reference in the other Loan Documents to the
"Credit Agreement", "thereunder", "thereof" or words
of like import referring to the Credit Agreement
shall mean and be a reference to the Amended
Agreement.
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(ii) Except as specifically amended by this
Amendment, the Credit Agreement and the other Loan
Documents shall remain in full force and effect and
are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this
Amendment shall not, except as expressly provided
herein, constitute a waiver of any provision of, or
operate as a waiver of any right, power or remedy of
Agent or any Lender under, the Credit Agreement or
any of the other Loan Documents.
B. HEADINGS. Section and subsection headings in this Amendment
are included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
C. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
D. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. This Amendment shall become
effective upon the execution of a counterpart hereof by each of Borrower,
Lenders, Collateral Agent and Administrative Agent, and receipt by
Administrative Agent of such executed counterparts.
[Remainder of page intentionally left blank]
3
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
BORROWER:
---------
OVERHILL FARMS, INC.
By: /S/ XXXXX XXXXX
----------------------
Name: Xxxxx Xxxxx
Title: President
Signature Page to First Amendment
ADMINISTRATIVE AGENT:
--------------------
GUGGENHEIM CORPORATE FUNDING, LLC
By: /S/ XXXXXXX X. XXXXXX
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
Signature Page to First Amendment
COLLATERAL AGENT:
----------------
GUGGENHEIM CORPORATE FUNDING, LLC
By: /S/ XXXXXXX X. XXXXXX
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
Signature Page to First Amendment
LENDERS:
MIDLAND NATIONAL LIFE INSURANCE COMPANY
By: MIDLAND ADVISORS COMPANY, as its agent
By: /S/ XXXXXXX XXXXX
-----------------
Name: Xxxxxxx Xxxxx
Title: Director
NORTH AMERICAN COMPANY FOR LIFE AND HEALTH
INSURANCE
By: MIDLAND ADVISORS COMPANY, as its agent
By: /S/ XXXXXXX XXXXX
-----------------
Name: Xxxxxxx Xxxxx
Title: Director
ORPHEUS HOLDINGS LLC
By: GUGGENHEIM INVESTMENT MANAGEMENT, LLC,
as its manager
By: /S/ XXXXXXX XXXXX
-----------------
Name: Xxxxxxx Xxxxx
Title: Director
Signature Page to First Amendment
SCHEDULE 1.01(E)
TRANCHE A TERM LOAN COMMITMENT
------------------------------------------------------------ ---------------------------------------------------------
Tranche A Lender Principal Amount
------------------------------------------------------------ ---------------------------------------------------------
Midland National Life Insurance Company $14,000,000
------------------------------------------------------------ ---------------------------------------------------------
North American Company for Life and Health Insurance $11,000,000
------------------------------------------------------------ ---------------------------------------------------------
TRANCHE B TERM LOAN COMMITMENT
------------------------------------------------------------ ---------------------------------------------------------
Tranche B Lender Principal Amount
------------------------------------------------------------ ---------------------------------------------------------
Orpheus Holdings LLC $15,000,000
------------------------------------------------------------ ---------------------------------------------------------
REVOLVING LOAN COMMITMENT
------------------------------------------------------------ ---------------------------------------------------------
Revolving Lender Principal Amount
------------------------------------------------------------ ---------------------------------------------------------
Midland National Life Insurance Company $7,500,000
------------------------------------------------------------ ---------------------------------------------------------
EXHIBIT 10.3
EXECUTION COPY
PLEDGE AND SECURITY AGREEMENT
Dated as of May 17, 2006
by and among
OVERHILL FARMS, INC., as Grantor
and
GUGGENHEIM CORPORATE FUNDING, LLC,
as Collateral Agent
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS..........................................................................1
1.1. Terms Defined in Credit Agreement........................................................1
1.2. Definitions of Certain Terms Used Herein.................................................1
ARTICLE II GRANT OF SECURITY INTEREST...........................................................5
2.1. Security Interest in Collateral..........................................................5
2.2. All Property Acknowledgement.............................................................7
ARTICLE III REPRESENTATIONS AND WARRANTIES.......................................................7
3.1. Title, Perfection and Priority...........................................................7
3.2. Type and Jurisdiction of Organization, Organizational and Identification Numbers.........7
3.3. Principal Location.......................................................................7
3.4. Collateral Locations.....................................................................7
3.5. Deposit Accounts.........................................................................7
3.6. Exact Names..............................................................................7
3.7. Letter-of-Credit Rights and Chattel Paper................................................8
3.8. Accounts and Chattel Paper...............................................................8
3.9. Inventory................................................................................8
3.10. Intellectual Property....................................................................9
3.11. Filing Requirements......................................................................9
3.12. No Financing Statements, Security Agreements.............................................9
3.13. Pledged Collateral.......................................................................9
ARTICLE IV COVENANTS...........................................................................10
4.1. General.................................................................................10
4.2. Receivables.............................................................................12
4.3. Inventory and Equipment.................................................................12
4.4. Delivery of Instruments, Securities, Chattel Paper and Documents........................13
4.5. Uncertificated Pledged Collateral.......................................................13
4.6. Pledged Collateral......................................................................14
4.7. Intellectual Property...................................................................15
4.8. Commercial Tort Claims..................................................................16
4.9. Letter-of-Credit Rights.................................................................16
4.10. No Interference.........................................................................16
4.11. Collateral Access Agreements............................................................16
4.12. Control Agreements......................................................................17
4.13. Change of Name or Location..............................................................17
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ARTICLE V REMEDIES............................................................................17
5.1. Remedies................................................................................17
5.2. Grantor's Obligations Upon Default......................................................19
5.3. Grant of Intellectual Property License..................................................19
ARTICLE VI ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY.......................................20
6.1. Account Verification....................................................................20
6.2. Authorization for Secured Party to Take Certain Action..................................20
6.3. Proxy...................................................................................21
6.4. Nature of Appointment; Limitation of Duty...............................................21
ARTICLE VII GENERAL PROVISIONS..................................................................22
7.1. Waivers.................................................................................22
7.2. Limitation on Collateral Agent's and Lenders' Duty with Respect to the Collateral.......22
7.3. Compromises and Collection of Collateral................................................23
7.4. Secured Party Performance of Grantor Obligations........................................24
7.5. Specific Performance of Certain Covenants...............................................24
7.6. Dispositions Not Authorized.............................................................24
7.7. No Waiver; Amendments; Cumulative Remedies..............................................24
7.8. Limitation by Law; Severability of Provisions...........................................24
7.9. Reinstatement...........................................................................25
7.10. Benefit of Agreement....................................................................25
7.11. Survival of Representations.............................................................25
7.12. Taxes and Expenses......................................................................25
7.13. Headings................................................................................25
7.14. Termination.............................................................................25
7.15. Entire Agreement........................................................................26
7.16. CHOICE OF LAW...........................................................................26
7.17. CONSENT TO JURISDICTION.................................................................26
7.18. WAIVER OF JURY TRIAL....................................................................26
7.19. Indemnity...............................................................................26
7.20. Counterparts............................................................................27
ARTICLE VIII NOTICES.............................................................................27
8.1. Sending Notices.........................................................................27
8.2. Change in Address for Notices...........................................................27
ARTICLE IX THE COLLATERAL AGENT................................................................27
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EXHIBITS
Exhibit A -- Grantor's Information and Collateral Locations
Exhibit B -- Deposit Accounts and Securities Accounts
Exhibit C -- Letter of Credit Rights/Chattel Paper
Exhibit D -- Intellectual Property Rights
Exhibit E -- Title Documents
Exhibit F -- Fixtures
Exhibit G -- List of Pledged Collateral, Securities and Other Investment Property
Exhibit H-1 -- Material Contracts with Anti-Assignment Provisions
Exhibit H-2 -- Material Contracts Requiring Consent to Assignment
Exhibit H-3 -- Offices In Which Financing Statements Have Been Filed
Exhibit I -- Form of Amendment
(Exhibits to be provided to the Securities and Exchange Commission upon request.)
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PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT (as it may be amended or modified
from time to time, this "SECURITY AGREEMENT") is entered into as of May 17,
2006, by and between Overhill Farms, Inc., as grantor (the "GRANTOR"), and
GUGGENHEIM CORPORATE FUNDING, LLC, a Delaware limited liability company, in its
capacity as collateral agent (the "COLLATERAL AGENT") for the lenders (the
"LENDERS") from time to time party to the Credit Agreement referred to below.
RECITALS
WHEREAS, the Grantor, as borrower, the Lenders, the Collateral Agent
and Guggenheim Corporate Funding, LLC, as Administrative Agent, Arranger and
Syndication Agent, entered into a Senior Secured Credit Agreement dated as of
April 17, 2006 (as it may be amended or modified from time to time, the "CREDIT
AGREEMENT");
WHEREAS, it is a condition precedent to the obligation of the Lenders
to make their respective extensions of credit to the Grantor under the Credit
Agreement that the Grantor shall have executed and delivered this Agreement to
the Collateral Agent, for itself and for the benefit of the other Agents and the
Lenders, to secure all of the Secured Obligations (as defined below).
NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Grantor and the Collateral Agent, for itself and on behalf of
the other Agents and the Lenders, hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1. TERMS DEFINED IN CREDIT AGREEMENT. All capitalized terms used
herein and not otherwise defined shall have the meanings assigned to such terms
in the Credit Agreement.
1.2. DEFINITIONS OF CERTAIN TERMS USED HEREIN. As used in this Security
Agreement, in addition to the terms defined in the Preliminary Statement, the
following terms shall have the following meanings:
"ACCOUNTS" means all of the Grantor's now owned or hereafter acquired
right, title, and interest with respect to "Accounts" (as such term is defined
in Article 9 of the UCC), and any and all Supporting Obligations in respect
thereof.
"AMENDMENT" shall have the meaning set forth in SECTION 4.4.
"ARTICLE" means a numbered article of this Security Agreement, unless
another document is specifically referenced.
"CHATTEL PAPER" means all of the Grantor's now owned or hereafter
acquired right, title, and interest with respect to "Chattel Paper", "Electronic
Chattel Paper" and "Tangible Chattel Paper" (as such terms are defined in
Article 9 of the UCC), and any and all Supporting Obligations in respect
thereof.
"COLLATERAL" shall have the meaning set forth in ARTICLE II.
"COLLATERAL ACCESS AGREEMENT" means any landlord waiver, collateral
access agreement or other agreement, in form and substance satisfactory to the
Collateral Agent, between the Collateral Agent and any third party (including
any bailee, consignee, customs broker, or other similar Person) in possession of
any Collateral or any landlord of the Grantor for any real property where any
Collateral is located, as such landlord waiver or other agreement may be
amended, restated, or otherwise modified from time to time.
"COMMERCIAL TORT CLAIMS" shall have the meaning set forth in Article 9
of the UCC.
"COMPUTER HARDWARE AND SOFTWARE" means all of the Grantor's now owned
or hereafter acquired right (including rights as licensee and lessee), title,
and interest with respect to (i) computer and other electronic data processing
hardware, including all integrated computer systems, central processing units,
memory units, display terminals, printers, computer elements, card readers, tape
drives, hard and soft disk drives, cables, electrical supply hardware,
generators, power equalizers, accessories, peripheral devices and other related
computer hardware; (ii) all Software and all software programs designed for use
on the computers and electronic data processing hardware described in clause (i)
above, including all operating system software, utilities and application
programs in any form (source code and object code in magnetic tape, disk or hard
copy format or any other listings whatsoever); (iii) any firmware associated
with any of the foregoing; and (iv) any documentation for hardware, Software and
firmware described in clauses (i), (ii) and (iii) above, including flow charts,
logic diagrams, manuals, specifications, training materials, charts and pseudo
codes.
"CONTROL" shall have the meaning set forth in Article 8 or, if
applicable, in Section 9-104, 9-105, 9-106 or 9-107 of Article 9 of the UCC.
"COPYRIGHTS" means, with respect to any Person, all of such Person's
right, title, and interest in and to the following: (a) all copyrights, rights
and interests in copyrights, works protectable by copyright, copyright
registrations, and copyright applications; (b) all renewals of any of the
foregoing; (c) all income, royalties, damages, and payments now or hereafter due
and/or payable under any of the foregoing, including, without limitation,
damages or payments for past or future infringements for any of the foregoing;
(d) the right to xxx for past, present, and future infringements of any of the
foregoing; and (e) all rights corresponding to any of the foregoing throughout
the world.
"DELIVERABLE COLLATERAL" means the following Pledged Collateral: (a)
promissory notes having a face value in excess of $100,000; (b) limited
liability company membership interests, (c) partnership interests and (d) shares
of capital stock and other Securities, except, in the case of the foregoing
clauses (a), (b), (c) and (d), Cash Equivalents held in a Deposit Account or a
Securities Account.
2
"DOCUMENTS" means all of the Grantor's now owned or hereafter acquired
right, title, and interest with respect to "Documents" (as such term is defined
in Article 9 of the UCC), and any and all Supporting Obligations in respect
thereof.
"EQUITY INTERESTS" means all shares, units, options, warrants,
interests, participations, or other equivalents (regardless of how designated
and whether or not evidenced or represented by any stock certificate,
certificated security or other instruments) of or in a corporation, partnership,
limited liability company, or equivalent entity, whether voting or nonvoting,
including general partner partnership interests, limited partner partnership
interests, common stock, preferred stock, or any other "equity security" (as
such term is defined in Rule 3a11-1 of the General Rules and Regulations
promulgated by the SEC under the Exchange Act); PROVIDED, that the Capital Stock
of TreeCon and United Airlines owned by the Grantor is hereby explicitly
excluded from the definition of "Equity Interests".
"EXEMPT DEPOSIT ACCOUNTS" means Deposit Accounts the balance of which
consists exclusively of (i) withheld income taxes and federal, state or local
employment taxes in such amounts as are required in the reasonable judgment of
the Grantor to be paid to the Internal Revenue Service or state or local
government agencies within the following two months with respect to employees of
the Grantor and (ii) amounts required to be paid over to an employee benefit
plan pursuant to DOL Reg. Sec. 2510.3-102 on behalf of or for the benefit of
employees of the Grantor.
"EXHIBIT" refers to a specific exhibit to this Security Agreement,
unless another document is specifically referenced.
"FIXTURES" shall have the meaning set forth in Article 9 of the UCC.
"GENERAL INTANGIBLES" means all of the Grantor's now owned or hereafter
acquired right, title, and interest with respect to "General Intangibles" (as
such term is defined in Article 9 of the UCC) (including, without limitation,
payment intangibles, contract rights, rights to payment, rights arising under
common law, statutes, or regulations, goodwill, Patents, trade names,
Trademarks, service marks, Copyrights, blueprints, drawings, licenses, permits,
purchase orders, customer lists, monies due or recoverable from pension funds,
route lists, rights to payment and other rights under any royalty or licensing
agreements, infringement claims, computer programs, information contained on
computer disks or tapes, software, literature, reports, catalogs, money, deposit
accounts, insurance premium rebates, tax refunds, and tax refund claims), and
any and all Supporting Obligations in respect thereof.
"GOODS" shall have the meaning set forth in Article 9 of the UCC.
"GRANTOR'S BOOKS" means all of the Grantor's now owned or hereafter
acquired Documents, books and records (including all of its Records indicating,
summarizing, or evidencing its assets (including the Collateral) or liabilities,
all of the Grantor's Records (including without limitation, all tapes, books,
cards, Software, data and computer programs in the possession or under the
control of the Grantor or any other Person from time to time acting for the
Grantor that at any time evidence or contain information relating to the
Collateral or are otherwise necessary or helpful in the collection or
realization thereof) relating to its business operations or financial condition,
and all of its goods or General Intangibles related to such information.
3
"INSTRUMENTS" means all of the Grantor's now owned or hereafter
acquired right, title, and interest with respect to "Instruments" (as such term
is defined in Article 9 of the UCC), and any and all Supporting Obligations in
respect thereof.
"INTELLECTUAL PROPERTY RIGHTS" shall mean any intellectual property
rights of any description including, without limitation, Patents, Trademarks and
Copyrights.
"INVENTORY" means all of the Grantor's now owned or hereafter acquired
right, title, and interest with respect to "Inventory" (as such term is defined
in Article 9 of the UCC), including goods held for sale or lease or to be
furnished under a contract of service, goods that are leased by the Grantor as
lessor, and raw materials, work in process, or materials used or consumed in the
Grantor's business.
"INVESTMENT PROPERTY" means all of the Grantor's now owned or hereafter
acquired right, title, and interest with respect to "Investment Property" (as
such term is defined in Article 9 of the UCC), and any and all Supporting
Obligations in respect thereof, including, without limitation, all outstanding
Equity Interests owned, or hereinafter acquired, by the Grantor; PROVIDED, that
the Capital Stock of TreeCon and United Airlines owned by the Grantor is hereby
explicitly excluded from the definition of "Investment Property".
"LETTER-OF-CREDIT RIGHTS" shall have the meaning set forth in Article 9
of the UCC.
"LICENSES" means, with respect to any Person, all of such Person's
right, title, and interest in and to (a) any and all licensing agreements or
similar arrangements in and to its Patents, Copyrights, or Trademarks, (b) all
income, royalties, damages, claims, and payments now or hereafter due or payable
under and with respect thereto, including, without limitation, damages and
payments for past and future breaches thereof, and (c) all rights to xxx for
past, present, and future breaches thereof.
"PATENTS" means, with respect to any Person, all of such Person's
right, title, and interest in and to: (a) any and all patents and patent
applications; (b) all inventions and improvements described and claimed therein;
(c) all reissues, divisions, continuations, renewals, extensions, and
continuations-in-part thereof; (d) all income, royalties, damages, claims, and
payments now or hereafter due or payable under and with respect thereto,
including, without limitation, damages and payments for past and future
infringements thereof; (e) all rights to xxx for past, present, and future
infringements thereof; and (f) all rights corresponding to any of the foregoing
throughout the world.
"PLEDGED COLLATERAL" means all Instruments, Securities and other
Investment Property of the Grantor, whether or not physically delivered to the
Collateral Agent pursuant to this Security Agreement.
"RECEIVABLES" means the Accounts, Chattel Paper, Documents, Investment
Property, Instruments, Collections and any other rights or claims to receive
money which are General Intangibles or which are otherwise included as
Collateral.
4
"RECORDABLE INTELLECTUAL PROPERTY" means intellectual Property the
transfer of which is required to be recorded in the United States Patent and
Trademark Office or the United States Copyright Office in order to be effective
against subsequent third party transferees; provided that the following shall
not be considered "Recordable Intellectual Property" hereunder: (a) unregistered
United States Copyrights and (b) non-exclusive Licenses.
"RECORDS" shall have the meaning set forth in Article 9 of the UCC.
"SECTION" means a numbered section of this Security Agreement, unless
another document is specifically referenced.
"SECURITY" has the meaning set forth in Article 8 of the UCC.
"SOFTWARE" shall have the meaning set forth in Article 9 of the UCC.
"SECURED OBLIGATIONS" means all "Obligations" as defined in the Credit
Agreement.
"STOCK RIGHTS" means all dividends, instruments or other distributions
and any other right or property which the Grantor shall receive or shall become
entitled to receive for any reason whatsoever with respect to, in substitution
for or in exchange for any Equity Interest constituting Collateral, any right to
receive an Equity Interest and any right to receive earnings, in which the
Grantor now has or hereafter acquires any right, issued by an issuer of such
Equity Interest.
"SUPPORTING OBLIGATIONS" shall have the meaning set forth in Article 9
of the UCC.
"TRADEMARKS" means, with respect to any Person, all of such Person's
right, title, and interest in and to the following: (a) all trademarks
(including service marks), trade names, trade dress, and trade styles and the
registrations and applications for registration thereof and the goodwill of the
business symbolized by the foregoing (but excluding any intent-to-use trademark
applications to register any trademark, service xxxx or other xxxx for which an
amendment to allege use or a statement of use (or the equivalent) has not been
filed under applicable law, or if filed, has not been deemed in conformance with
applicable law or examined and accepted respectively by the United States Patent
and Trademark Office); (b) all licenses of the foregoing, whether as licensee or
licensor; (c) all renewals of the foregoing; (d) all income, royalties, damages,
and payments now or hereafter due or payable with respect thereto, including,
without limitation, damages, claims, and payments for past and future
infringements thereof; (e) all rights to xxx for past, present, and future
infringements of the foregoing, including the right to settle suits involving
claims and demands for royalties owing; and (f) all rights corresponding to any
of the foregoing throughout the world.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II
GRANT OF SECURITY INTEREST
2.1. SECURITY INTEREST IN COLLATERAL. The Grantor hereby pledges,
assigns and grants to the Collateral Agent, for itself and for the benefit of
the other Agents and the Lenders, a security interest in all of its right, title
5
and interest in, to and under all of its personal property, whether now owned by
or owing to, or hereafter acquired by or arising in favor of the Grantor
(including under any trade name or derivations thereof), and whether owned or
consigned by or to, or leased from or to, the Grantor, and regardless of where
located (all of which will be collectively referred to as the "COLLATERAL"),
including:
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Grantor's Books;
(iv) all Equipment;
(v) all Computer Hardware and Software and all
rights with respect thereto, including any
and all licenses, options, warranties,
service contracts, program services, test
rights, maintenance rights, support rights,
improvement rights, renewal rights and
indemnifications, and any substitutions,
replacements, additions or model conversions
of any of the foregoing;
(vi) all Fixtures;
(vii) all General Intangibles;
(viii) all Goods;
(ix) all Instruments;
(x) all Inventory;
(xi) all Investment Property;
(xii) all cash or cash equivalents (of every
jurisdiction whatsoever);
(xiii) all letters of credit, Letter-of-Credit
Rights and any and all Supporting
Obligations in respect thereof;
(xiv) all Deposit Accounts with any bank or other
financial institution;
(xv) all Commercial Tort Claims;
(xvi) all Intellectual Property Rights; and
(xvii) and all accessions to, substitutions for and
replacements, proceeds (including Stock
Rights), insurance proceeds (including
insurance proceeds from executive life
insurance policies) and products of the
foregoing, together with all books and
records, customer lists, credit files,
computer files, programs, printouts and
6
other computer materials and records related
thereto and any General Intangibles at any
time evidencing or relating to any of the
foregoing;
to secure the prompt and complete payment and performance of the Secured
Obligations; PROVIDED, HOWEVER, that the Collateral shall not include any Exempt
Deposit Accounts.
2.2. ALL PROPERTY ACKNOWLEDGEMENT. The Grantor acknowledges that the
description of Collateral in this ARTICLE II is intended to encompass all
personal Property of the Grantor and the Grantor hereby represents and warrants
that the description of Collateral in this ARTICLE II constitutes all personal
Property of the Grantor.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Grantor represents and warrants to the Collateral Agent and the
Lenders that:
3.1. TITLE, PERFECTION AND PRIORITY. Except to the extent limited by
anti-assignment provisions in certain Material Contracts listed on EXHIBIT H-1
hereto or provisions requiring consent to assignment by Borrower in certain
Material Contracts listed on EXHIBIT H-2 hereto, the Grantor has good and valid
rights in or the power to transfer the Collateral and title to the Collateral
with respect to which it has purported to grant a security interest hereunder,
free and clear of all Liens, except for Liens permitted under SECTION 4.1(D),
and has full power and authority to grant to the Collateral Agent the security
interest in such Collateral pursuant hereto. When financing statements have been
filed in the appropriate offices against the Grantor in the locations listed on
EXHIBIT H-3, the Collateral Agent will have a fully perfected first priority
security interest in that Collateral in which a security interest may be
perfected by filing, subject only to Liens permitted under SECTION 4.1(D).
3.2. TYPE AND JURISDICTION OF ORGANIZATION, ORGANIZATIONAL AND
IDENTIFICATION NUMBERS. The type of entity of the Grantor, its state of
organization, the organizational number issued to it by its state of
organization and its federal employer identification number are set forth on
EXHIBIT A.
3.3. PRINCIPAL LOCATION. The Grantor's mailing address and the location
of its chief executive office are disclosed in EXHIBIT A; the Grantor has no
other places of business except those set forth in EXHIBIT A.
3.4. COLLATERAL LOCATIONS. All of the Grantor's locations where
Collateral is located are listed on EXHIBIT A. All of said locations are owned
by the Grantor, except for locations (i) which are leased by the Grantor as
lessee and designated in Part VII(b) of EXHIBIT A and (ii) at which Inventory is
held in a public warehouse or is otherwise held by a bailee or on consignment as
designated in Part VII(c) of EXHIBIT A.
3.5. DEPOSIT ACCOUNTS. All of the Grantor's Deposit Accounts and
Securities Accounts are listed on EXHIBIT B.
3.6. EXACT NAMES. The Grantor's name in which it has executed this
Security Agreement is the exact name as it appears in the Grantor's
organizational documents, as amended, as filed with the Grantor's jurisdiction
7
of organization. The Grantor has not, during the past five years, been known by
or used any other corporate or fictitious name, or been a party to any merger or
consolidation, or been a party to any acquisition, except as set forth on
EXHIBIT A.
3.7. LETTER-OF-CREDIT RIGHTS AND CHATTEL PAPER. EXHIBIT C lists all
Letter-of-Credit Rights in respect of letters of credit having a face or
statement amount of more than $50,000 and Chattel Paper of the Grantor. All
action by the Grantor necessary or desirable to protect and perfect the
Collateral Agent's Lien on each Letter of Credit right in respect of letters of
credit having a face or stated amount of more than $50,000 and each item of
Chattel Paper of the Grantor (including the delivery of all originals and the
placement of a legend on all Chattel Paper as required hereunder) has been duly
taken. The Collateral Agent will have a fully perfected first priority security
interest in the Collateral listed on EXHIBIT C, subject only to Liens permitted
under SECTION 4.1(D).
3.8. ACCOUNTS AND CHATTEL PAPER.
(a) The names of the obligors, amounts owing, due dates and
other information with respect to the Accounts and Chattel Paper are and will be
correctly stated in all material respects in all records of the Grantor relating
thereto and in all invoices with respect thereto. As of the time when each
Account or each item of Chattel Paper arises, the Grantor shall be deemed to
have represented and warranted that such Account or Chattel Paper, as the case
may be, and all records relating thereto, are genuine and in all respects what
they purport to be.
(b) With respect to Accounts, (i) to the Grantor's knowledge,
there are no facts, events or occurrences which in any way impair the validity
or enforceability thereof or could reasonably be expected to reduce the amount
payable thereunder as shown on the Grantor's books and records (subject to "bad
debt" reserves as shown on the Grantor's financial statements) and any invoices,
statements and Collateral Reports with respect thereto; (ii) the Grantor has not
received any notice of proceedings or actions which are threatened or pending
against any Account Debtor which might result in any adverse change in such
Account Debtor's financial condition; and (iii) the Grantor has no knowledge
that any Account Debtor is unable generally to pay its debts as they become due.
(c) In addition, with respect to all Accounts of the Grantor,
(i) the amounts shown on all invoices, statements and Collateral Reports with
respect thereto are actually and absolutely owing to the Grantor as indicated
thereon and are not in any way contingent; (ii) no payments have been or shall
be made thereon except payments immediately deposited into a Blocked Account as
required pursuant to Section 12.02 of the Credit Agreement; and (iii) to the
Grantor's knowledge, all Account Debtors have the capacity to contract.
3.9. INVENTORY. With respect to any of the Grantor's Inventory, (a)
such Inventory (other than Inventory in transit) is located at one of the
Grantor's locations set forth on EXHIBIT A, (b) no Inventory (other than
Inventory in transit) is now, or shall at any time or times hereafter be stored
at any other location except as permitted by SECTION 4.1(F), (c) the Grantor has
good, indefeasible and merchantable title to such Inventory and such Inventory
is not subject to any Lien or security interest or document whatsoever except
8
for the Lien granted to the Collateral Agent, for itself and for the benefit of
the other Agents and Lenders, and except for Permitted Encumbrances, (d) except
as specifically disclosed in the most recent Collateral Report, such Inventory
is of good and merchantable quality, free from any defects, (e) such Inventory
is not subject to any licensing, patent, royalty, trademark, trade name or
copyright agreements with any third parties which would require any consent of
any third party upon sale or disposition of that Inventory or the payment of any
monies to any third party upon such sale or other disposition, (f) such
Inventory has been produced in accordance with the Federal Fair Labor Standards
Act of 1938, as amended, and all rules, regulations and orders thereunder and
(g) the completion of manufacture, sale or other disposition of such Inventory
by the Collateral Agent following a Default or an Event of Default shall not
require the consent of any Person and shall not constitute a breach or default
under any contract or agreement to which the Grantor is a party or to which such
property is subject.
3.10. INTELLECTUAL PROPERTY. The Grantor does not have any interest in,
or title to, any material Patent, Trademark or Copyright except as set forth in
EXHIBIT D. The Security Agreement is effective to create a valid and continuing
Lien and, upon filing of appropriate financing statements in the offices listed
on EXHIBIT H-3, fully perfected first priority security interest in favor of the
Collateral Agent, on the Grantor's Trademarks; and all action necessary or
desirable to protect and perfect the Collateral Agent's Lien on the Grantor's
Patents, Trademarks or Copyrights shall have been duly taken; PROVIDED that, the
Collateral Agent has agreed that no filings with the United States Patent and
Trademark Office shall be required until such filings are requested by
Collateral Agent.
3.11. FILING REQUIREMENTS. None of the Grantor's Equipment having a
value in excess of $50,000 is covered by any certificate of title, except for
the vehicles described in Part I of EXHIBIT E. None of the Collateral is of a
type for which security interests or liens may be perfected by filing under any
federal statute except for (a) the vehicles described in Part II of EXHIBIT E
and (b) Patents, Trademarks and Copyrights constituting Recordable Intellectual
Property held by the Grantor and described in EXHIBIT D. The legal description,
county and street address of each property on which any of the Grantor's
Fixtures are located is set forth in EXHIBIT F together with the name and
address of the record owner of each such property.
3.12. NO FINANCING STATEMENTS, SECURITY AGREEMENTS. No financing
statement or security agreement describing all or any portion of the Collateral
which has not lapsed or been terminated naming the Grantor as debtor has been
filed or is of record in any jurisdiction except (a) for financing statements or
security agreements naming the Collateral Agent for itself and on behalf of the
other Agents and the Lenders as the secured parties and (b) as permitted by
SECTION 4.1(D).
3.13. PLEDGED COLLATERAL.
(a) EXHIBIT G sets forth a complete and accurate list of all
of the Pledged Collateral. The Grantor is the direct, sole beneficial owner and
sole holder of record of the Pledged Collateral listed on EXHIBIT G as being
owned by it, free and clear of any Liens, except for the security interest
granted to the Collateral Agent for itself and for the benefit of the other
Agents and the Lenders hereunder and Permitted Encumbrances referred to in
paragraphs (a) or (e) of the definition thereof. The Grantor further represents
9
and warrants with respect to its Pledged Collateral that (i) all Pledged
Collateral constituting an Equity Interest has been (to the extent such concepts
are relevant with respect to such Pledged Collateral) duly authorized, validly
issued, are fully paid and non-assessable, (ii) with respect to any certificates
delivered to the Collateral Agent representing an Equity Interest, either such
certificates are Securities as defined in Article 8 of the UCC as a result of
actions by the issuer or otherwise, or, if such certificates are not Securities,
the Grantor has so informed the Collateral Agent so that the Collateral Agent
may take steps to perfect its security interest therein as a General Intangible,
(iii) except to the extent otherwise permitted pursuant to Section 9.15 of the
Credit Agreement, all Pledged Collateral held by a securities intermediary is
covered by a control agreement among the Grantor, the securities intermediary
and the Collateral Agent pursuant to which the Collateral Agent has Control and
(iv) all Pledged Collateral which represents Indebtedness owed to the Grantor
has been duly authorized, authenticated or issued and delivered by the issuer of
such Indebtedness, is the legal, valid and binding obligation of such issuer and
such issuer is not in default thereunder.
(b) In addition, the Grantor represents and warrants with
respect to its Pledged Collateral that (i) to the Grantor's knowledge, none of
the Pledged Collateral has been issued or transferred in violation of the
securities registration, securities disclosure or similar laws of any
jurisdiction to which such issuance or transfer may be subject, (ii) there are
existing no options, warrants, calls or commitments of any character whatsoever
relating to the Pledged Collateral or which obligate the issuer of any Equity
Interest included in the Pledged Collateral to issue additional Equity
Interests, and (iii) no consent, approval, authorization, or other action by,
and no giving of notice, filing with, any governmental authority or any other
Person is required for the pledge by the Grantor of the Pledged Collateral
pursuant to this Security Agreement or for the execution, delivery and
performance of this Security Agreement by the Grantor, or for the exercise by
the Collateral Agent of the voting or other rights provided for in this Security
Agreement or for the remedies in respect of the Pledged Collateral pursuant to
this Security Agreement, except as may be required in connection with such
disposition by laws affecting the offering and sale of securities generally.
(c) Except as set forth in EXHIBIT G, the Grantor owns 100% of
the issued and outstanding Equity Interests which constitutes Pledged Collateral
of the Grantor and none of the Pledged Collateral which represents Indebtedness
owed to the Grantor is subordinated in right of payment to other Indebtedness
(other than the Obligations) or subject to the terms of an indenture.
ARTICLE IV
COVENANTS
From the date of this Security Agreement, and thereafter until this
Security Agreement is terminated, the Grantor agrees that:
4.1. GENERAL.
(a) AUTHORIZATION TO FILE FINANCING STATEMENTS; RATIFICATION.
The Grantor hereby authorizes the Collateral Agent to file, and if requested
will deliver to the Collateral Agent, all financing statements and other
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documents and take such other actions as may from time to time be requested by
the Collateral Agent in order to maintain a first priority (subject to Permitted
Encumbrances) perfected security interest in and, if applicable, Control of, the
Collateral. Any financing statement filed by the Collateral Agent may be filed
in any filing office in any UCC jurisdiction and may (i) indicate the Collateral
(1) as all assets of the Grantor or words of similar effect, regardless of
whether any particular asset comprised in the Collateral falls within the scope
of Article 9 of the UCC or such jurisdiction, or (2) by any other description
which reasonably approximates the description contained in this Security
Agreement, and (ii) contain any other information required by Part 5 of Article
9 of the UCC for the sufficiency or filing office acceptance of any financing
statement or amendment, including (A) whether the Grantor is an organization,
the type of organization and any organization identification number issued to
the Grantor (if any), and (B) in the case of a financing statement filed as a
fixture filing or indicating Collateral as as-extracted collateral or timber to
be cut, a sufficient description of real property to which the Collateral
relates. The Grantor also agrees to furnish any such information to the
Collateral Agent promptly upon request. The Grantor also ratifies its
authorization for the Collateral Agent to have filed in any UCC jurisdiction any
initial financing statements or amendments thereto if filed prior to the date
hereof.
(b) DEFENSE OF COLLATERAL. The Grantor agrees to take any and
all commercially reasonable actions necessary to defend title to the Collateral
owned by it against all persons and to defend the security interest of the
Collateral Agent in the Collateral owned by the Grantor and the priority thereof
against any Lien not expressly permitted hereunder.
(c) DISPOSITION OF COLLATERAL. The Grantor will not sell,
lease or otherwise dispose of the Collateral owned by it except for dispositions
specifically permitted pursuant to Section 9.03 of the Credit Agreement.
(d) LIENS. The Grantor will not create, incur, or suffer to
exist any Lien on the Collateral owned by it except (i) the security interest
created by this Security Agreement, and (ii) other Permitted Encumbrances.
(e) OTHER FINANCING STATEMENTS. The Grantor will not authorize
the filing of any financing statement naming it as debtor covering all or any
portion of the Collateral owned by it, except as permitted by SECTION 4.1(D).
The Grantor acknowledges that it is not authorized to file any financing
statement naming the Collateral Agent as secured party and covering any
Collateral or amendment or termination statement with respect to any financing
statement without the prior written consent of the Collateral Agent, subject to
the Grantor's rights under Section 9-509(d)(2) of the UCC.
(f) LOCATIONS. The Grantor will not (i) maintain any
Collateral owned by it at any location other than those locations listed for the
Grantor on EXHIBIT A, (ii) otherwise change, or add to, such locations without
the Collateral Agent's prior written consent as required by the Credit Agreement
(and if the Collateral Agent gives such consent, the Grantor will concurrently
therewith obtain a Collateral Access Agreement for each such location to the
extent required by the Credit Agreement), or (iii) change its principal place of
business or chief executive office from the location identified for the Grantor
on EXHIBIT A, other than as permitted by the Credit Agreement.
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(g) COMPLIANCE WITH TERMS. The Grantor will perform and comply
with all obligations in respect of the Collateral owned by it and all agreements
to which it is a party or by which it is bound relating to the Collateral.
4.2. RECEIVABLES.
(a) CERTAIN AGREEMENTS ON RECEIVABLES. The Grantor will not
make or agree to make any discount, credit, rebate or other reduction in the
original amount owing on a Receivable or accept in satisfaction of a Receivable
less than the original amount thereof, except that, prior to the occurrence of a
Default or an Event of Default, the Grantor may reduce the amount of Accounts
arising from the sale of Inventory in accordance with its present policies and
in the ordinary course of business.
(b) COLLECTION OF RECEIVABLES. Except as otherwise provided in
this Security Agreement, the Grantor will collect and enforce, at the Grantor's
sole expense, all amounts due or hereafter due to the Grantor under the
Receivables.
(c) DELIVERY OF INVOICES. Upon the occurrence of a Default or
an Event of Default, the Grantor will deliver to the Collateral Agent
immediately upon its request duplicate invoices with respect to each Account of
the Grantor bearing such language of assignment as the Collateral Agent shall
specify.
(d) ELECTRONIC CHATTEL PAPER. The Grantor shall take all steps
necessary to grant the Collateral Agent Control of all electronic chattel paper
in accordance with the UCC and all "transferable records" as defined in each of
the Uniform Electronic Transactions Act and the Electronic Signatures in Global
and National Commerce Act.
4.3. INVENTORY AND EQUIPMENT.
(a) MAINTENANCE OF GOODS. The Grantor will do all things
necessary to maintain, preserve, protect and keep its Inventory and Equipment in
good repair and working and saleable condition, except for damaged or defective
goods arising in the ordinary course of the Grantor's business and except for
ordinary wear and tear in respect of its Equipment.
(b) RETURNED INVENTORY. If an Account Debtor returns any
Inventory to the Grantor when no Default or Event of Default exists, then the
Grantor shall promptly determine the reason for such return and shall issue a
credit memorandum to the Account Debtor in the appropriate amount. In the event
any Account Debtor returns Inventory to the Grantor when a Default or an Event
of Default exists, the Grantor, upon the request of the Collateral Agent, shall:
(i) hold the returned Inventory in trust for the Collateral Agent; (ii)
segregate all returned Inventory from all of its other Property; (iii) dispose
of the returned Inventory solely according to the Collateral Agent's written
instructions; and (iv) not issue any credits or allowances with respect thereto
without the Collateral Agent's prior written consent. All returned Inventory
shall be subject to the Collateral Agent's Liens thereon. Whenever any Inventory
is returned, the related Account shall be deemed ineligible to the extent of the
amount owing by the Account Debtor with respect to such returned Inventory.
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(c) INVENTORY COUNT; PERPETUAL INVENTORY SYSTEM. The Grantor
will conduct a physical count of its Inventory at least once per Fiscal Year,
and after and during the continuation of a Default or an Event of Default, at
such other times as the Collateral Agent requests. The Grantor, at its own
expense, shall deliver to the Collateral Agent the results of each physical
verification, which the Grantor has made, or has caused any other Person to make
on its behalf, of all or any portion of its Inventory. The Grantor will maintain
a perpetual inventory reporting system at all times.
(d) EQUIPMENT. The Grantor shall promptly inform the
Collateral Agent of any additions to or deletions from its Equipment which
individually exceed $150,000. The Grantor shall not permit any Equipment to
become a fixture with respect to real property or to become an accession with
respect to other personal property with respect to which real or personal
property the Collateral Agent does not have a Lien. The Grantor will not,
without the Collateral Agent's prior written consent, alter or remove any
identifying symbol or number on any of the Grantor's Equipment constituting
Collateral.
(e) TITLED VEHICLES. The Grantor will give the Collateral
Agent notice of its acquisition of any vehicle covered by a certificate of title
having a fair market value in excess of $50,000 and deliver to the Collateral
Agent, upon request, the original of any vehicle title certificate and provide
and/or file all other documents or instruments necessary to have the Lien of the
Collateral Agent noted on any such certificate or with the appropriate state
office.
4.4. DELIVERY OF INSTRUMENTS, SECURITIES, CHATTEL PAPER AND DOCUMENTS.
The Grantor will (a) deliver to the Collateral Agent immediately upon execution
of this Security Agreement the originals of all Chattel Paper, Securities and
Instruments owned by it constituting Collateral (if any then exist), (b) hold in
trust for the Collateral Agent upon receipt and immediately thereafter deliver
to the Collateral Agent any Chattel Paper, Securities and Instruments owned by
it constituting Deliverable Collateral, (c) upon the Collateral Agent's request,
deliver to the Collateral Agent (and thereafter hold in trust for the Collateral
Agent upon receipt and immediately deliver to the Collateral Agent) any Document
evidencing or constituting Collateral owned by it, and (d) upon the Collateral
Agent's request, deliver to the Collateral Agent a duly executed amendment to
this Security Agreement, in the form of EXHIBIT I hereto (an "AMENDMENT"),
pursuant to which the Grantor will pledge such additional Collateral. The
Grantor hereby authorizes the Collateral Agent to attach each Amendment to this
Security Agreement and agrees that all additional Collateral set forth in such
Amendments shall be considered to be part of the Collateral.
4.5. UNCERTIFICATED PLEDGED COLLATERAL. The Grantor will permit the
Collateral Agent from time to time to cause the appropriate issuers (and, if
held with a securities intermediary, such securities intermediary) of
uncertificated securities or other types of Pledged Collateral owned by the
Grantor not represented by certificates to xxxx their books and records with the
numbers and face amounts of all such uncertificated securities or other types of
Pledged Collateral owned by the Grantor not represented by certificates and all
rollovers and replacements therefor to reflect the Lien of the Collateral Agent
granted pursuant to this Security Agreement. The Grantor will take any actions
necessary to cause (a) the issuers of uncertificated securities which are
Pledged Collateral owned by the Grantor and (b) any securities intermediary
which is the holder of any such Pledged Collateral, to cause the Collateral
13
Agent to have and retain Control over such Pledged Collateral. Without limiting
the foregoing, the Grantor will, with respect to Pledged Collateral owned by the
Grantor held with a securities intermediary, cause such securities intermediary
to enter into a control agreement with the Collateral Agent, in form and
substance satisfactory to the Collateral Agent, giving the Collateral Agent
Control.
4.6. PLEDGED COLLATERAL.
(a) CHANGES IN CAPITAL STRUCTURE OF ISSUERS. The Grantor will
not (i) permit or suffer any issuer of an Equity Interest constituting Pledged
Collateral owned by the Grantor to dissolve, merge, liquidate, retire any of its
Equity Interests or other Instruments or Securities evidencing ownership, reduce
its capital, sell or encumber all or substantially all of its assets (except for
Permitted Encumbrances and sales of assets permitted pursuant to SECTION 4.1(C))
or merge or consolidate with any other entity other than as permitted pursuant
to Section 9.03 of the Credit Agreement, or (ii) vote any Pledged Collateral
owned by it in favor of any of the foregoing.
(b) ISSUANCE OF ADDITIONAL SECURITIES. The Grantor will not
permit or suffer the issuer of an Equity Interest constituting Pledged
Collateral owned by the Grantor to issue additional Equity Interests, any right
to receive the same or any right to receive earnings, except to the Grantor.
(c) REGISTRATION OF PLEDGED COLLATERAL. The Grantor will
permit any registerable Pledged Collateral owned by the Grantor to be registered
in the name of the Collateral Agent or its nominee at any time following the
occurrence and during the continuance of a Default or an Event of Default.
(d) EXERCISE OF RIGHTS IN PLEDGED COLLATERAL.
(i) Without in any way limiting the foregoing and
subject to clause (ii) below, the Grantor shall have the right to
exercise all voting rights or other rights relating to the Pledged
Collateral owned by the Grantor for all purposes not inconsistent with
this Security Agreement, the Credit Agreement or any other Loan
Document; PROVIDED, HOWEVER, that no vote or other right shall be
exercised or action taken which would have the effect of impairing the
rights of the Collateral Agent in respect of the Pledged Collateral
owned by the Grantor.
(ii) The Grantor will permit the Collateral Agent or
its nominee at any time after the occurrence and during the continuance
of a Default or an Event of Default, without notice, to exercise all
voting rights or other rights relating to Pledged Collateral owned by
the Grantor, including, without limitation, exchange, subscription or
any other rights, privileges, or options pertaining to any Equity
Interest or Investment Property constituting Pledged Collateral owned
by the Grantor as if the Collateral Agent were the absolute owner
thereof.
(iii) The Grantor shall be entitled to receive and
retain any and all dividends, interest, distributions, cash,
instruments and other payments and distributions made upon or in
respect of the Collateral; provided, however, that any and all:
14
(A) dividends, interest and other payments
and distributions paid or payable other than in cash in
respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in
exchange for, any Collateral;
(B) additional stock, other securities,
limited liability company membership interests, partnership
interests, promissory notes or other instruments or property
paid or distributed in respect of any Delivered Collateral
(other than promissory notes) by way of share-split, spin-off,
split-up, reclassification, combination of shares or similar
rearrangement;
(C) all other or additional stock, other
securities, limited liability company membership interests,
partnership interests, promissory notes or other instruments
or property which may be paid in respect of the Collateral by
reason of any consolidation, merger, exchange of shares,
conveyance of assets, liquidation or similar reorganization;
shall be delivered to the Collateral Agent to hold as Pledged
Collateral and shall, if received by any Grantor, be received in trust
for the benefit of the Collateral Agent as Pledged Collateral, be
segregated from the other property or funds of the Grantor, and be
forthwith delivered to the Collateral Agent as Pledged Collateral in
the same form as so received (with any necessary endorsement).
4.7. INTELLECTUAL PROPERTY.
(a) The Grantor will use its commercially reasonable efforts
to secure all consents and approvals necessary or appropriate for the assignment
to or benefit of the Collateral Agent of any material License held by the
Grantor (excluding non-exclusive Licenses of Software) and to enforce the
security interests granted hereunder.
(b) The Grantor shall notify the Collateral Agent immediately
if it knows or has reason to know that any application or registration relating
to any Patent, Trademark or Copyright (now or hereafter existing) material to
the business of the Grantor may become abandoned or dedicated, or of any adverse
determination or development (including the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any court) regarding the
Grantor's ownership of any Patent, Trademark or Copyright, its right to register
the same, or to keep and maintain the same.
(c) Except where failure to do so could prejudice the
Grantor's rights, the Grantor shall not, either directly or through any agent,
employee, licensee or designee, file an application for the registration of any
Patent, Trademark or Copyright with the United States Patent and Trademark
Office, the United States Copyright Office or any similar office or agency
without giving the Collateral Agent prior written notice thereof, and, upon
request of the Collateral Agent, the Grantor shall execute and deliver any and
all security agreements as the Collateral Agent may reasonably request to
evidence the Collateral Agent's first priority security interest on such Patent,
Trademark or Copyright, and the General Intangibles of the Grantor relating
thereto or represented thereby.
15
(d) The Grantor shall take all commercially reasonable actions
necessary or requested by the Collateral Agent to maintain and pursue each
application, to obtain the relevant registration and to maintain the
registration of each of the Grantor's Patents, Trademarks and Copyrights (now or
hereafter existing), in each instance which are material to the conduct of its
business, including, unless the Grantor shall reasonably determine that any such
action would be of negligible economic value, the filing of applications for
renewal, affidavits of use, affidavits of noncontestability and opposition and
interference and cancellation proceedings.
(e) The Grantor shall, unless it shall reasonably determine
that such Patent, Trademark or Copyright is in no way material to the conduct of
its business or operations, or such action would be of negligible economic
value, promptly xxx for infringement, misappropriation or dilution and to
recover any and all damages for such infringement, misappropriation or dilution,
and shall take such other actions as the Collateral Agent shall deem appropriate
under the circumstances to protect such Patent, Trademark or Copyright. In the
event that the Grantor institutes suit because any of the Patents, Trademarks or
Copyrights owned by the Grantor constituting Collateral is infringed upon, or
misappropriated or diluted by a third party, the Grantor shall comply with
SECTION 4.8.
4.8. COMMERCIAL TORT CLAIMS. The Grantor shall promptly, and in any
event within two Business Days after the same is acquired by it, notify the
Collateral Agent of any Commercial Tort Claim in excess of $100,000 acquired by
it and, unless the Collateral Agent otherwise consents, the Grantor shall enter
into an amendment to this Security Agreement, in the form of EXHIBIT I hereto,
granting to the Collateral Agent a first priority security interest in such
Commercial Tort Claim.
4.9. LETTER-OF-CREDIT RIGHTS. If the Grantor is or becomes the
beneficiary of a letter of credit having a face or stated amount of in excess of
$50,000, the Grantor shall promptly, and in any event within two Business Days
after becoming a beneficiary, notify the Collateral Agent thereof and cause the
issuer and/or confirmation bank to (i) consent to the assignment of any related
Letter-of-Credit Rights to the Collateral Agent and (ii) agree to direct all
payments thereunder to a Deposit Account maintained with one of the Lenders
subject to a Blocked Account Agreement, all in form and substance reasonably
satisfactory to the Collateral Agent.
4.10. NO INTERFERENCE. The Grantor agrees that it will not interfere
with any right, power and remedy of the Collateral Agent provided for in this
Security Agreement or now or hereafter existing at law or in equity or by
statute or otherwise, or the exercise or beginning of the exercise by the
Collateral Agent of any one or more of such rights, powers or remedies.
4.11. COLLATERAL ACCESS AGREEMENTS. The Grantor shall use commercially
reasonable efforts to obtain a Collateral Access Agreement from the lessor of
each property leased by the Grantor after the Effective Date, mortgagee of
property acquired by the Grantor after the Effective Date or bailee or consignee
with respect to any warehouse, processor or converter facility or other location
where Collateral owned by the Grantor is stored or located, which agreement or
letter shall be consistent with Collateral Access Agreements to be obtained
pursuant to Section 8.14 of the Credit Agreement or otherwise reasonably
satisfactory to the Collateral Agent.
16
4.12. CONTROL AGREEMENTS. Except as otherwise provided in the Credit
Agreement, the Grantor will provide to the Collateral Agent upon the Collateral
Agent's request, a Control Agreement duly executed on behalf of each financial
institution holding a Deposit Account or Securities Account of the Grantor as
set forth on EXHIBIT B.
4.13. CHANGE OF NAME OR LOCATION. The Grantor shall not (a) change its
name as it appears in official filings in the state of its incorporation or
organization, (b) change the type of entity that it is, (c) change its
organization identification number, if any, issued by its state of incorporation
or other organization, or (d) change its state of incorporation or organization,
in each case, unless the Collateral Agent shall have received at least thirty
days prior written notice of such change.
ARTICLE V
REMEDIES
5.1. REMEDIES.
(a) Upon the occurrence and during the continuance of a
Default or an Event of Default, the Collateral Agent may exercise any or all of
the following rights and remedies:
(i) those rights and remedies provided in this
Security Agreement, the Credit Agreement, or any other Loan Document;
PROVIDED that, this SECTION 5.1(A) shall not be understood to limit any
rights or remedies available to the Collateral Agent and the Lenders
prior to a Default or an Event of Default;
(ii) those rights and remedies available to a secured
party under the UCC (whether or not the UCC applies to the affected
Collateral) or under any other applicable law (including, without
limitation, any law governing the exercise of a bank's right of setoff
or bankers' lien) when a debtor is in default under a security
agreement;
(iii) give notice of sole control or any other
instruction under any Control Agreement or any other control agreement
with any securities intermediary and take any action therein with
respect to such Collateral;
(iv) without notice (except as specifically provided
in SECTION 7.1 or elsewhere herein), demand or advertisement of any
kind to the Grantor or any other Person, enter the premises of the
Grantor or any other location listed on EXHIBIT A where any Collateral
is located (through self-help and without judicial process) to collect,
receive, assemble, process, appropriate, sell, lease, assign, grant an
option or options to purchase or otherwise dispose of, deliver, or
realize upon, the Collateral or any part thereof in one or more parcels
at public or private sale or sales (which sales may be adjourned or
continued from time to time with or without notice and may take place
at the Grantor's premises or elsewhere), for cash, on credit or for
future delivery without assumption of any credit risk, and upon such
other terms as the Collateral Agent may deem commercially reasonable;
and
17
(v) concurrently with written notice to the Grantor,
transfer and register in its name or in the name of its nominee the
whole or any part of the Pledged Collateral of the Grantor, to exchange
certificates or instruments representing or evidencing Pledged
Collateral of the Grantor for certificates or instruments of smaller or
larger denominations, to exercise the voting and all other rights as a
holder with respect thereto, to collect and receive all cash dividends,
interest, principal and other distributions made thereon and to
otherwise act with respect to the Pledged Collateral of the Grantor as
though the Collateral Agent was the outright owner thereof.
(b) The Collateral Agent, for itself and on behalf of the
other Agents and the Lenders, may comply with any applicable state or federal
law requirements in connection with a disposition of the Collateral and
compliance will not be considered to adversely affect the commercial
reasonableness of any sale of the Collateral.
(c) The Collateral Agent shall have the right upon any
such public sale or sales and, to the extent permitted by law, upon any such
private sale or sales, to purchase for itself or for the benefit of any other
Agent or the Lenders, the whole or any part of the Collateral so sold, free of
any right of equity redemption, which equity redemption the Grantor hereby
expressly releases.
(d) Until the Collateral Agent is able to effect a sale,
lease, or other disposition of the Collateral, the Collateral Agent shall have
the right to hold or use the Collateral, or any part thereof, to the extent that
it deems appropriate for the purpose of preserving the Collateral or its value
or for any other purpose deemed appropriate by the Collateral Agent. The
Collateral Agent may, if it so elects, seek the appointment of a receiver or
keeper to take possession of the Collateral and to enforce any of the Collateral
Agent's remedies (for itself and for the benefit of the other Agents and the
Lenders), with respect to such appointment without prior notice or hearing as to
such appointment.
(e) Notwithstanding the foregoing, neither the Collateral
Agent nor the Lenders shall be required to (i) make any demand upon, or pursue
or exhaust any of their rights or remedies against, the Grantor, any other
obligor, guarantor, pledgor or any other Person with respect to the payment of
the Secured Obligations or to pursue or exhaust any of their rights or remedies
with respect to any Collateral therefor or any direct or indirect guarantee
thereof, (ii) marshal the Collateral or any guarantee of the Secured Obligations
or to resort to the Collateral or any such guarantee in any particular order, or
(iii) effect a public sale of any Collateral.
(f) The Grantor recognizes that the Collateral Agent may
be unable to effect a public sale of any or all the Pledged Collateral owned by
the Grantor and may be compelled to resort to one or more private sales thereof
in accordance with clause (a) above. The Grantor also acknowledges that any
private sale may result in prices and other terms less favorable to the seller
than if such sale were a public sale and, notwithstanding such circumstances,
agrees that any such private sale shall not be deemed to have been made in a
commercially unreasonable manner solely by virtue of such sale being private.
The Collateral Agent shall be under no obligation to delay a sale of any of the
Pledged Collateral for the period of time necessary to permit the Grantor or any
issuer of Pledged Collateral to register such securities for public sale under
the Securities Act, or under applicable state securities laws, even if the
Grantor and such issuer would agree to do so.
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5.2. GRANTOR'S OBLIGATIONS UPON DEFAULT. Upon the request of the
Collateral Agent after the occurrence and during the continuance of a Default or
an Event of Default, the Grantor will:
(a) assemble and make available to the Collateral Agent
the Collateral owned by the Grantor and all books and records relating thereto
at any place or places specified by the Collateral Agent, whether at the
Grantor's premises or elsewhere;
(b) permit the Collateral Agent, by the Collateral
Agent's representatives and agents (i) to enter, occupy and use any premises
where all or any part of the Collateral owned by the Grantor, or the books and
records relating thereto, or both, are located, (ii) to take possession of all
or any part of the Collateral owned by the Grantor, or the books and records
relating thereto, or both, (iii) to remove all or any part of the Collateral
owned by the Grantor, or the books and records relating thereto, or both, and
(iv) to conduct sales of the Collateral owned by the Grantor, without any
obligation to pay the Grantor for such use and occupancy; and
(c) at its own expense, cause the independent certified
public accountants then engaged by the Grantor to prepare and deliver to the
Collateral Agent and each Lender, at any time, and from time to time, promptly
upon the Collateral Agent's request, the following reports with respect to the
Grantor: (i) a reconciliation of all Accounts; (ii) an aging of all Accounts;
(iii) trial balances; and (iv) a test verification of such Accounts.
5.3. GRANT OF INTELLECTUAL PROPERTY LICENSE. For the purpose of
enabling the Collateral Agent to exercise the rights and remedies under this
ARTICLE V at such time as the Collateral Agent shall be lawfully entitled to
exercise such rights and remedies, the Grantor hereby (a) grants to the
Collateral Agent, for itself and for the benefit of the other Agents and the
Lenders, an irrevocable, nonexclusive license (exercisable without payment of
royalty or other compensation to the Grantor) to use, license or sublicense any
Intellectual Property Rights now owned or hereafter acquired by the Grantor, and
wherever the same may be located, and including in such license access to all
media in which any of the licensed items may be recorded or stored and to all
computer software and programs used for the compilation or printout thereof and
(b) irrevocably agrees that the Collateral Agent may sell any of the Grantor's
Inventory directly to any person, including without limitation persons who have
previously purchased the Grantor's Inventory from the Grantor and in connection
with any such sale or other enforcement of the Collateral Agent's rights under
this Security Agreement, may sell Inventory which bears any Trademark owned by
or licensed to the Grantor and any Inventory that is covered by any Copyright
owned by or licensed to the Grantor and the Collateral Agent may finish any work
in process and affix any Trademark owned by or licensed to the Grantor and sell
such Inventory as provided herein.
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ARTICLE VI
ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY
6.1. ACCOUNT VERIFICATION. The Collateral Agent may (i) prior to the
occurrence of a Default or an Event of Default after consulting with the Grantor
or (ii) after the occurrence and during the continuance of a Default or an Event
of Default at any time following written notice to the Grantor, in each case in
the Collateral Agent's own name, in the name of a nominee of the Collateral
Agent, or in the name of the Grantor communicate (by mail, telephone, facsimile
or otherwise) with the Account Debtors of the Grantor, parties to contracts with
the Grantor and obligors in respect of Instruments of the Grantor to verify with
such Persons, to the Collateral Agent's satisfaction, the existence, amount,
terms of, and any other matter relating to, Accounts, Instruments, Chattel
Paper, payment intangibles and/or other Receivables.
6.2. AUTHORIZATION FOR SECURED PARTY TO TAKE CERTAIN ACTION.
(a) The Grantor irrevocably authorizes the Collateral
Agent at any time and from time to time in the sole discretion of the Collateral
Agent and appoints the Collateral Agent as its attorney in fact (i) to execute
on behalf of the Grantor as debtor and to file financing statements necessary or
desirable in the Collateral Agent's sole discretion to perfect and to maintain
the perfection and priority of the Collateral Agent's security interest in the
Collateral owned by the Grantor, (ii) upon the occurrence and during the
continuance of a Default or an Event of Default, to endorse and collect any cash
proceeds of the Collateral owned by the Grantor, (iii) to file a carbon,
photographic or other reproduction of this Security Agreement or any financing
statement with respect to the Collateral owned by the Grantor as a financing
statement and to file any other financing statement or amendment of a financing
statement (which does not add new collateral or add a debtor) in such offices as
the Collateral Agent in its sole discretion deems necessary or desirable to
perfect and to maintain the perfection and priority of the Collateral Agent's
security interest in the Collateral owned by the Grantor, (iv) to contact and
enter into one or more agreements with the issuers of uncertificated securities
which are Pledged Collateral owned by the Grantor or with securities
intermediaries holding Pledged Collateral owned by the Grantor as may be
necessary or advisable to give the Collateral Agent Control over such Pledged
Collateral, (v) to apply the proceeds of any Collateral owned by the Grantor
received by the Collateral Agent to the Secured Obligations as provided in
ARTICLE XII of the Credit Agreement, (vi) to discharge past due taxes,
assessments, charges, fees or Liens in connection therewith on the Collateral
owned by the Grantor (except for such Liens as are specifically permitted
hereunder), (vii) upon the occurrence and during the continuance of a Default or
an Event of Default, to contact Account Debtors of the Grantor for any reason,
(viii) upon the occurrence and during the continuance of a Default or an Event
of Default, to demand payment or enforce payment of the Receivables of the
Grantor in the name of the Collateral Agent or the Grantor and to endorse any
and all checks, drafts, and other instruments for the payment of money relating
to the Receivables of the Grantor, (ix) upon the occurrence and during the
continuance of a Default or an Event of Default, to sign the Grantor's name on
any invoice or xxxx of lading relating to the Receivables of the Grantor, drafts
against any Account Debtor of the Grantor, assignments and verifications of
Receivables of the Grantor, (x) upon the occurrence and during the continuance
of a Default or an Event of Default, to exercise all of the Grantor's rights and
remedies with respect to the collection of the Receivables of the Grantor and
any other Collateral owned by the Grantor, (xi) upon the occurrence and during
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the continuance of a Default or an Event of Default, to settle, adjust,
compromise, extend or renew the Receivables of the Grantor, (xii) upon the
occurrence and during the continuance of a Default or an Event of Default, to
settle, adjust or compromise any legal proceedings brought to collect
Receivables of the Grantor, (xiii) upon the occurrence and during the
continuance of a Default or an Event of Default, to prepare, file and sign the
Grantor's name on a proof of claim in bankruptcy or similar document against any
Account Debtor of the Grantor, (xiv) upon the occurrence and during the
continuance of a Default or an Event of Default, to prepare, file and sign the
Grantor's name on any notice of Lien, assignment or satisfaction of Lien or
similar document in connection with the Receivables of the Grantor, (xv) upon
the occurrence and during the continuance of a Default or an Event of Default,
to require Account Debtors to direct all payments to be delivered by mail to the
Grantor to such address as the Collateral Agent may designate and to receive,
open and dispose of all such mail addressed to the Grantor, and (xvi) to do all
other acts and things necessary to carry out this Security Agreement; and the
Grantor agrees to reimburse the Collateral Agent on demand for any payment made
or any expense incurred by the Collateral Agent in connection with any of the
foregoing; PROVIDED that, this authorization shall not relieve the Grantor of
any of its obligations under this Security Agreement, the Credit Agreement or
the other Loan Documents.
(b) All acts of said attorney or designee are hereby
ratified and approved. The powers conferred on the Collateral Agent, for itself
and for the benefit of the other Agents and the Lenders, under this SECTION 6.2
are solely to protect the Collateral Agent's interests in the Collateral and
shall not impose any duty upon the Collateral Agent, any other Agent or any
Lender to exercise any such powers.
6.3. PROXY. THE GRANTOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE
COLLATERAL AGENT AS THE PROXY AND ATTORNEY-IN-FACT (AS SET FORTH IN SECTION 6.2
ABOVE) OF THE GRANTOR WITH RESPECT TO THE PLEDGED COLLATERAL OWNED BY THE
GRANTOR, INCLUDING THE RIGHT TO VOTE SUCH PLEDGED COLLATERAL, WITH FULL POWER OF
SUBSTITUTION TO DO SO. IN ADDITION TO THE RIGHT TO VOTE ANY SUCH PLEDGED
COLLATERAL, THE APPOINTMENT OF THE COLLATERAL AGENT AS PROXY AND
ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS,
PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF SUCH PLEDGED COLLATERAL WOULD BE
ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS,
CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH MEETINGS). SUCH
PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION
(INCLUDING ANY TRANSFER OF ANY SUCH PLEDGED COLLATERAL ON THE RECORD BOOKS OF
THE ISSUER THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF SUCH PLEDGED
COLLATERAL OR ANY OFFICER OR AGENT THEREOF), UPON THE OCCURRENCE OF A DEFAULT OR
AN EVENT OF DEFAULT.
6.4. NATURE OF APPOINTMENT; LIMITATION OF DUTY. THE APPOINTMENT OF THE
COLLATERAL AGENT AS PROXY AND ATTORNEY-IN-FACT IN THIS ARTICLE VI IS COUPLED
WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE DATE ON WHICH THIS SECURITY
AGREEMENT IS TERMINATED IN ACCORDANCE WITH SECTION 7.14. NOTWITHSTANDING
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ANYTHING CONTAINED HEREIN, NEITHER THE COLLATERAL AGENT, ANY OTHER AGENT, ANY
LENDER, NOR ANY OF THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS OR REPRESENTATIVES SHALL HAVE ANY DUTY TO EXERCISE ANY RIGHT OR POWER
GRANTED HEREUNDER OR OTHERWISE OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE
FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO, EXCEPT IN RESPECT OF
DAMAGES ATTRIBUTABLE SOLELY TO THEIR OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT
AS FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION; PROVIDED THAT, IN NO
EVENT SHALL THEY BE LIABLE FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR
CONSEQUENTIAL DAMAGES.
ARTICLE VII
GENERAL PROVISIONS
7.1. WAIVERS. The Grantor hereby waives notice of the time and place of
any public sale or the time after which any private sale or other disposition of
all or any part of the Collateral owned by the Grantor may be made. To the
extent such notice may not be waived under applicable law, any notice made shall
be deemed reasonable if sent to the Grantor, addressed as set forth in ARTICLE
VIII, at least ten days prior to (i) the date of any such public sale or (ii)
the time after which any such private sale or other disposition may be made. To
the maximum extent permitted by applicable law, the Grantor waives all claims,
damages, and demands against the Collateral Agent or any Lender arising out of
the repossession, retention or sale of the Collateral, except such as arise
solely out of the gross negligence or willful misconduct of the Collateral Agent
or such Lender as finally determined by a court of competent jurisdiction. To
the extent it may lawfully do so, the Grantor absolutely and irrevocably waives
and relinquishes the benefit and advantage of, and covenants not to assert
against the Collateral Agent or any Lender, any valuation, stay, appraisal,
extension, moratorium, redemption or similar laws and any and all rights or
defenses it may have as a surety now or hereafter existing which, but for this
provision, might be applicable to the sale of any Collateral owned by the
Grantor made under the judgment, order or decree of any court, or privately
under the power of sale conferred by this Security Agreement, or otherwise.
Except as otherwise specifically provided herein, the Grantor hereby waives
presentment, demand, protest or any notice (to the maximum extent permitted by
applicable law) of any kind in connection with this Security Agreement or any
Collateral owned by it.
7.2. LIMITATION ON COLLATERAL AGENT'S AND LENDERS' DUTY WITH RESPECT TO
THE COLLATERAL. Notwithstanding any provision contained in this Security
Agreement, neither Collateral Agent nor any Lender shall have any duty to
exercise any of the rights, privileges or powers afforded to it and shall not be
responsible to the Grantor or any other Person for any failure to do so or delay
in doing so. The Collateral Agent shall have no obligation to clean-up or
otherwise prepare the Collateral for sale. The Collateral Agent and each Lender
shall use reasonable care with respect to the Collateral in its possession or
under its control. Neither the Collateral Agent nor any Lender shall have any
other duty as to any Collateral in its possession or control or in the
possession or control of any agent or nominee of the Collateral Agent or such
Lender, or any income thereon or as to the preservation of rights against prior
parties or any other rights pertaining thereto. To the extent that applicable
law imposes duties on the Collateral Agent to exercise remedies in a
commercially reasonable manner, the Grantor acknowledges and agrees that it is
commercially reasonable for the Collateral Agent (i) to fail to incur expenses
deemed significant by the Collateral Agent to prepare Collateral for disposition
or otherwise to transform raw material or work in process into finished goods or
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other finished products for disposition, (ii) to fail to obtain third party
consents for access to Collateral to be disposed of, or to obtain or, if not
required by other law, to fail to obtain governmental or third party consents
for the collection or disposition of Collateral to be collected or disposed of,
(iii) to fail to exercise collection remedies against Account Debtors or other
Persons obligated on Collateral or to remove Liens on or any adverse claims
against Collateral, (iv) to exercise collection remedies against Account Debtors
and other Persons obligated on Collateral directly or through the use of
collection agencies and other collection specialists, (v) to advertise
dispositions of Collateral through publications or media of general circulation,
whether or not the Collateral is of a specialized nature, (vi) to contact other
Persons, whether or not in the same business as the Grantor, for expressions of
interest in acquiring all or any portion of such Collateral, (vii) to hire one
or more professional auctioneers to assist in the disposition of Collateral,
whether or not the Collateral is of a specialized nature, (viii) to dispose of
Collateral by utilizing internet sites that provide for the auction of assets of
the types included in the Collateral or that have the reasonable capacity of
doing so, or that match buyers and sellers of assets, (ix) to dispose of assets
in wholesale rather than retail markets, (x) to disclaim disposition warranties,
such as title, possession or quiet enjoyment, (xi) to purchase insurance or
credit enhancements to insure the Collateral Agent against risks of loss,
collection or disposition of Collateral or to provide to the Collateral Agent a
guaranteed return from the collection or disposition of Collateral, or (xii) to
the extent deemed appropriate by the Collateral Agent, to obtain the services of
other brokers, investment bankers, consultants and other professionals to assist
the Collateral Agent in the collection or disposition of any of the Collateral.
The Grantor acknowledges that the purpose of this SECTION 7.2 is to provide
non-exhaustive indications of what actions or omissions by the Collateral Agent
would be commercially reasonable in the Collateral Agent's exercise of remedies
against the Collateral and that other actions or omissions by the Collateral
Agent shall not be deemed commercially unreasonable solely on account of not
being indicated in this SECTION 7.2. Without limitation upon the foregoing,
nothing contained in this SECTION 7.2 shall be construed to grant any rights to
the Grantor or to impose any duties on the Collateral Agent that would not have
been granted or imposed by this Security Agreement or by applicable law in the
absence of this SECTION 7.2.
7.3. COMPROMISES AND COLLECTION OF COLLATERAL. The Grantor and the
Collateral Agent recognize that setoffs, counterclaims, defenses and other
claims may be asserted by obligors with respect to certain of the Receivables,
that certain of the Receivables may be or become uncollectible in whole or in
part and that the expense and probability of success in litigating a disputed
Receivable may exceed the amount that reasonably may be expected to be recovered
with respect to a Receivable. In view of the foregoing, the Grantor agrees that
the Collateral Agent may at any time and from time to time, if a Default or an
Event of Default has occurred and is continuing, compromise with the obligor on
any Receivable, accept in full payment of any Receivable such amount as the
Collateral Agent in its sole discretion shall determine or abandon any
Receivable, and any such action by the Collateral Agent shall be commercially
reasonable so long as the Collateral Agent acts in good faith based on
information known to it at the time it takes any such action.
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7.4. SECURED PARTY PERFORMANCE OF GRANTOR OBLIGATIONS. Without having
any obligation to do so, the Collateral Agent may perform or pay any obligation
which the Grantor has agreed to perform or pay in this Security Agreement and
the Grantor shall reimburse the Collateral Agent for any amounts paid by the
Collateral Agent pursuant to this SECTION 7.4. The Grantor's obligation to
reimburse the Collateral Agent pursuant to the preceding sentence shall be a
Secured Obligation payable on demand.
7.5. SPECIFIC PERFORMANCE OF CERTAIN COVENANTS. The Grantor
acknowledges and agrees that a breach of any of the covenants contained in
SECTIONS 4.1(C), 4.1(D), 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, or 5.2
will cause irreparable injury to the Collateral Agent and the Lenders, that the
Collateral Agent and the Lenders have no adequate remedy at law in respect of
such breaches and therefore agrees, without limiting the right of the Collateral
Agent or the Lenders to seek and obtain specific performance of other
obligations of the Grantor contained in this Security Agreement, that the
covenants of the Grantor contained in the Sections referred to in this SECTION
7.5 shall be specifically enforceable against the Grantor.
7.6. DISPOSITIONS NOT AUTHORIZED. The Grantor is not authorized to sell
or otherwise dispose of any Collateral owned by it except as set forth in
SECTION 4.1(C) and notwithstanding any course of dealing between any Grantor and
the Collateral Agent or other conduct of the Collateral Agent, no authorization
to sell or otherwise dispose of the Collateral owned by any Grantor (except as
set forth in SECTION 4.1(C)) shall be binding upon the Collateral Agent or the
Lenders unless such authorization is in writing signed by the Collateral Agent.
7.7. NO WAIVER; AMENDMENTS; CUMULATIVE REMEDIES. No delay or omission
of the Collateral Agent or any Lender to exercise any right or remedy granted
under this Security Agreement shall impair such right or remedy or be construed
to be a waiver of any Default or an acquiescence therein, and any single or
partial exercise of any such right or remedy shall not preclude any other or
further exercise thereof or the exercise of any other right or remedy. No
waiver, amendment or other variation of the terms, conditions or provisions of
this Security Agreement whatsoever shall be valid unless in writing signed by
the Collateral Agent with the concurrence or at the direction of the Lenders
required under Section 14.02 of the Credit Agreement and then only to the extent
in such writing specifically set forth. All rights and remedies contained in
this Security Agreement or by law afforded shall be cumulative and all shall be
available to the Collateral Agent and the Lenders until the Secured Obligations
have been paid in full.
7.8. LIMITATION BY LAW; SEVERABILITY OF PROVISIONS. All rights,
remedies and powers provided in this Security Agreement may be exercised only to
the extent that the exercise thereof does not violate any applicable provision
of law, and all the provisions of this Security Agreement are intended to be
subject to all applicable mandatory provisions of law that may be controlling
and to be limited to the extent necessary so that they shall not render this
Security Agreement invalid, unenforceable or not entitled to be recorded or
registered, in whole or in part. Any provision in this Security Agreement that
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of this Security Agreement are declared to be severable.
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7.9. REINSTATEMENT. The Grantor agrees that this Security Agreement
shall remain in full force and effect and continue to be effective against the
Grantor should (i) any petition be filed by or against the Grantor for
liquidation or reorganization, (ii) the Grantor become insolvent or make an
assignment for the benefit of any creditor or creditors or (iii) a receiver or
trustee be appointed for all or any significant part of the Grantor's assets,
and shall continue to be effective or be reinstated, as the case may be, if at
any time payment and performance of the Secured Obligations, or any part
thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by any obligee of the Secured Obligations,
whether as a "voidable preference," "fraudulent conveyance," or otherwise, all
as though such payment or performance had not been made. In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Secured Obligations shall be reinstated and deemed reduced only by such amount
paid and not so rescinded, reduced, restored or returned.
7.10. BENEFIT OF AGREEMENT. The terms and provisions of this Security
Agreement shall be binding upon and inure to the benefit of the Grantor, the
Collateral Agent and the Lenders and their respective successors and assigns
(including all persons who become bound as a debtor to this Security Agreement),
except that the Grantor shall not have the right to assign its rights or
delegate its obligations under this Security Agreement or any interest herein,
without the prior written consent of the Collateral Agent. No sales of
participations, assignments, transfers, or other dispositions of any agreement
governing the Secured Obligations or any portion thereof or interest therein
shall in any manner impair the Lien granted to the Collateral Agent, for itself
and for the benefit of the other Agents and the Lenders, hereunder.
7.11. SURVIVAL OF REPRESENTATIONS. All representations and warranties
of the Grantor contained in this Security Agreement shall survive the execution
and delivery of this Security Agreement.
7.12. TAXES AND EXPENSES. Any taxes (including income taxes) payable or
ruled payable by federal or state authority in respect of this Security
Agreement shall be paid by the Grantor, together with interest and penalties, if
any. The Grantor shall reimburse the Collateral Agent for any and all
out-of-pocket expenses and internal charges (including reasonable attorneys',
auditors' and accountants' fees and reasonable time charges of attorneys,
paralegals, auditors and accountants who may be employees of the Collateral
Agent) paid or incurred by the Collateral Agent in connection with the
preparation, execution, delivery, administration, collection and enforcement of
this Security Agreement and in the audit, analysis, administration, collection,
preservation or sale of the Collateral (including the expenses and charges
associated with any periodic or special audit of the Collateral). Any and all
costs and expenses incurred by the Grantor in the performance of actions
required pursuant to the terms hereof shall be borne solely by the Grantor.
7.13. HEADINGS. The title of and section headings in this Security
Agreement are for convenience of reference only, and shall not govern the
interpretation of any of the terms and provisions of this Security Agreement.
7.14. TERMINATION. This Security Agreement shall continue in effect
(notwithstanding the fact that from time to time there may be no Secured
Obligations outstanding) until (i) the Credit Agreement has terminated pursuant
to its express terms and (ii) all of the Secured Obligations have been
25
indefeasibly paid and performed in full and no commitments of the Collateral
Agent or the Lenders which would give rise to any Secured Obligations are
outstanding.
7.15. ENTIRE AGREEMENT. This Security Agreement embodies the entire
agreement and understanding between the Grantor and the Collateral Agent
relating to the Collateral and supersedes all prior agreements and
understandings between the Grantor and the Collateral Agent relating to the
Collateral.
7.16. CHOICE OF LAW. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
7.17. CONSENT TO JURISDICTION. THE GRANTOR HEREBY IRREVOCABLY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY U.S. FEDERAL OR NEW YORK STATE COURT
SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT AND THE GRANTOR
HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES
ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE COLLATERAL AGENT
OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE GRANTOR IN THE COURTS OF ANY
OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE GRANTOR AGAINST THE
COLLATERAL AGENT OR ANY LENDER OR ANY AFFILIATE OF THE COLLATERAL AGENT OR ANY
LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT
SHALL BE BROUGHT ONLY IN A COURT IN NEW YORK, NEW YORK.
7.18. WAIVER OF JURY TRIAL. THE GRANTOR, THE COLLATERAL AGENT AND EACH
LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY
OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN
ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS SECURITY AGREEMENT OR
ANY OTHER LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
7.19. INDEMNITY. The Grantor hereby agrees to indemnify the Collateral
Agent and the Lenders, and their respective successors, assigns, agents and
employees, from and against any and all liabilities, damages, penalties, suits,
costs, and expenses of any kind and nature (including, without limitation, all
expenses of litigation or preparation therefor whether or not the Collateral
Agent or any Lender is a party thereto) imposed on, incurred by or asserted
against the Collateral Agent or the Lenders, or their respective successors,
assigns, agents and employees, in any way relating to or arising out of this
Security Agreement, or the manufacture, purchase, acceptance, rejection,
ownership, delivery, lease, possession, use, operation, condition, sale, return
26
or other disposition of any Collateral owned by the Grantor (including, without
limitation, latent and other defects, whether or not discoverable by the
Collateral Agent or the Lenders or the Grantor, and any claim for Patent,
Trademark or Copyright infringement) except to the extent resulting from the
gross negligence or willful misconduct of the Collateral Agent or the Lenders,
as determined by a final judgment of a court of competent jurisdiction.
7.20. COUNTERPARTS. This Security Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this Security Agreement by
signing any such counterpart.
ARTICLE VIII
NOTICES
8.1. SENDING NOTICES. Any notice required or permitted to be given
under this Security Agreement shall be sent by United States mail, telecopier,
personal delivery or nationally established overnight courier service, and shall
be deemed received (a) when received, if sent by hand or overnight courier
service, or mailed by certified or registered mail notices or (b) when sent, if
sent by telecopier (except that, if not given during normal business hours for
the recipient, shall be deemed to have been given at the opening of business on
the next Business Day for the recipient), in each case addressed to the Grantor
at the address set forth on EXHIBIT A as the Grantor's principal place of
business, and to the Collateral Agent and the Lenders at the addresses set forth
in and in accordance with Section 14.01 of the Credit Agreement.
8.2. CHANGE IN ADDRESS FOR NOTICES. The Grantor, the Collateral Agent
and the Lenders may change the address for service of notice upon it by a notice
in writing to the other parties.
ARTICLE IX
THE COLLATERAL AGENT
Guggenheim Corporate Funding, LLC has been appointed Collateral Agent
for itself and for the benefit of the other Agents and the Lenders hereunder
pursuant to ARTICLE XIII of the Credit Agreement. It is expressly understood and
agreed by the parties to this Security Agreement that any authority conferred
upon the Collateral Agent hereunder is subject to the terms of the delegation of
authority made by the Lenders to the Collateral Agent pursuant to the Credit
Agreement, and that the Collateral Agent has agreed to act (and any successor
Collateral Agent shall act) as such hereunder only on the express conditions
contained in such ARTICLE XIII. Any successor Collateral Agent appointed
pursuant to ARTICLE XIII of the Credit Agreement shall be entitled to all the
rights, interests and benefits of the Collateral Agent hereunder.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Grantor and the Collateral Agent have executed
this Security Agreement as of the date first above written.
GRANTOR:
OVERHILL FARMS, INC.
By: /S/ XXXX X. STEINBRUN
-----------------------------------
Name: Xxxx X. Steinbrun
Title: Chief Financial Officer
COLLATERAL AGENT:
----------------
GUGGENHEIM CORPORATE FUNDING, LLC
By: /S/ XXXXXXX X. XXXXXX
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
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