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Exhibit 10.20
EXECUTION COPY
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of March 17, 1998
Among
AIRXCEL, INC.,
KODA ENTERPRISES GROUP, INC.
(which, on the Closing Date, will merge with its subsidiaries,
Koda Industries of Tennessee, Inc. and Suburban Manufacturing Company,
and will change its name to Suburban Manufacturing Company),
THE GUARANTORS AT ANY TIME PARTY HERETO,
THE LENDERS NAMED HEREIN,
and
THE CHASE MANHATTAN BANK, AS AGENT
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TABLE OF CONTENTS
Page
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I. DEFINITIONS..........................................................-6-
SECTION 1.01. Certain Defined Terms...............................-6-
SECTION 1.02. Accounting Terms...................................-18-
II. THE LOANS...........................................................-19-
SECTION 2.01. Term Loan Commitments and
Revolving Credit Commitments....................-19-
SECTION 2.02. Loans..............................................-19-
SECTION 2.03. Notice of Loans....................................-21-
SECTION 2.04. Notes: Repayment of Loans..........................-22-
SECTION 2.05. Interest on Loans..................................-24-
SECTION 2.06. Fees...............................................-24-
SECTION 2.07. Termination and Reduction of Revolving Credit
Commitments and Term Loan Commitments...........-25-
SECTION 2.08. Interest on Overdue Amounts: Alternate Rate
of Interest.....................................-25-
SECTION 2.09. Prepayment of Loans................................-26-
SECTION 2.10. Reserve Requirements: Change in Circumstances......-29-
SECTION 2.11. Change in Legality.................................-30-
SECTION 2.12. Indemnity..........................................-31-
SECTION 2.13. Pro Rata Treatment: Assumption by and
Delegation of Authority to the Agent............-32-
SECTION 2.14. Sharing of Setoffs.................................-33-
SECTION 2.15. Taxes..............................................-33-
SECTION 2.16. Payments and Computations..........................-36-
SECTION 2.17. Issuance of Letters of Credit......................-36-
SECTION 2.18. Payment of Letters of Credit: Reimbursement........-37-
SECTION 2.19. Agent's Actions with respect to Letters of Credit..-38-
SECTION 2.20. Letter of Credit Fees..............................-38-
III. COLLATERAL SECURITY.................................................-39-
SECTION 3.01. Security Documents.................................-39-
SECTION 3.02. Filing and Recording...............................-39-
IV. REPRESENTATIONS AND WARRANTIES......................................-40-
SECTION 4.01. Organization, Legal Existence......................-40-
SECTION 4.02. Authorization......................................-40-
SECTION 4.03. Governmental Approvals.............................-40-
SECTION 4.04. Binding Effect.....................................-40-
SECTION 4.05. Material Adverse Change............................-41-
SECTION 4.06. Litigation: Compliance with Laws: etc..............-41-
SECTION 4.07. Financial Statements...............................-41-
SECTION 4.08. Federal Reserve Regulations........................-42-
SECTION 4.09. Taxes..............................................-42-
SECTION 4.10. Employee Benefit Plans.............................-43-
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SECTION 4.11. No Material Misstatements..........................-44-
SECTION 4.12. Investment Company Act:
Public Utility Holding Company Act..............-44-
SECTION 4.14. Use of Proceeds....................................-44-
SECTION 4.15 Subsidiaries.......................................-45-
SECTION 4.16. Title to Properties: Possession Under Leases:
Trademarks......................................-45-
SECTION 4.17. Solvency...........................................-45-
SECTION 4.18. Permits, etc.......................................-46-
SECTION 4.19. Compliance with Environmental Laws.................-46-
SECTION 4.20. No Change in Credit Criteria or Collection
Policies........................................-47-
SECTION 4.21. Acquisition........................................-47-
SECTION 4.22. Bank Accounts......................................-48-
V. CONDITIONS OF CREDIT EVENTS.........................................-48-
SECTION 5.01. All Credit Events..................................-48-
SECTION 5.02. First Borrowing....................................-48-
VI. AFFIRMATIVE COVENANTS...............................................-52-
SECTION 6.01. Legal Existence....................................-52-
SECTION 6.02. Businesses and Properties..........................-52-
SECTION 6.03. Insurance..........................................-53-
SECTION 6.04. Taxes..............................................-53-
SECTION 6.05. Financial Statements...............................-53-
SECTION 6.06. Litigation and Other Notices.......................-56-
SECTION 6.07. ERISA..............................................-56-
SECTION 6.08. Maintaining Records: Access to
Properties and Inspections: Right to Audit......-57-
SECTION 6.09. Use of Proceeds....................................-57-
SECTION 6.10. Fiscal Year-End....................................-57-
SECTION 6.11. Further Assurances.................................-57-
SECTION 6.12. Additional Grantors and Guarantors.................-58-
SECTION 6.13. Environmental Laws.................................-58-
SECTION 6.14. Pay Obligations to Lenders and
Perform Other Covenants.........................-60-
SECTION 6.15. Maintain Operating Accounts........................-60-
SECTION 6.16. Amendments.........................................-60-
SECTION 6.17. Landlords' Waivers.................................-60-
SECTION 6.18. Interest Rate Protection...........................-60-
SECTION 6.19. Post Closing Matters...............................-60-
VII. NEGATIVE COVENANTS..................................................-61-
SECTION 7.01. Liens..............................................-61-
SECTION 7.02. Sale and Lease-Back Transactions...................-63-
SECTION 7.03. Indebtedness.......................................-63-
SECTION 7.04. Dividends..........................................-63-
SECTION 7.05. Consolidations. Mergers and Sales of Assets........-63-
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SECTION 7.06. Investments........................................-64-
SECTION 7.07. Capital Expenditures...............................-64-
SECTION 7.08. Debt Service Coverage Ratio........................-65-
SECTION 7.09. Leverage Ratio: EBITDA.............................-65-
SECTION 7.10. Interest Coverage Ratio............................-66-
SECTION 7.11. Business...........................................-66-
SECTION 7.12. Sales of Receivables...............................-66-
SECTION 7.13. Use of Proceeds....................................-66-
SECTION 7.14. ERISA..............................................-67-
SECTION 7.15. Accounting Changes.................................-67-
SECTION 7.16. Prepayment or Modification of Indebtedness:
Modification of Charter Documents...............-67-
SECTION 7.17. Transactions with Affiliates.......................-67-
SECTION 7.18. Consulting Fees. Pay any management, consulting
or other fees of any ...........................-68-
SECTION 7.19. Negative Pledges...................................-68-
VIII. EVENTS OF DEFAULT...................................................-68-
IX. AGENT...............................................................-71-
SECTION 10.01. Collection of Receivables: Management of
Collateral......................................-74-
SECTION 10.02. Receivables Documentation..........................-76-
SECTION 10.03. Status of Receivables and Other Collateral.........-76-
SECTION 10.04. Monthly Statement of Account.......................-77-
SECTION 10.05. Collateral Custodian...............................-77-
XI. MISCELLANEOUS.......................................................-77-
SECTION 11.01. Notices............................................-77-
SECTION 11.02. Survival of Agreement..............................-78-
SECTION 11.03. Successors and Assigns: Participations.............-78-
SECTION 11.04. Expenses: Indemnity................................-81-
SECTION 11.05. Applicable Law.....................................-82-
SECTION 11.06. Right of Setoff....................................-82-
SECTION 11.07. Payments on Business Days..........................-83-
SECTION 11.08. Waivers: Amendments................................-83-
SECTION 11.09. Severability.......................................-84-
SECTION 11.10. Entire Agreement: Waiver of Jury Trial. etc........-84-
SECTION 11.11. Confidentiality....................................-85-
SECTION 11.12. Submission to Jurisdiction.........................-85-
SECTION 11.13. Counterparts: Facsimile Signature..................-86-
SECTION 11.14. Headings...........................................-86-
XII. GUARANTEES..........................................................-77-
XIII. MISCELLANEOUS.......................................................-77-
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SCHEDULES
SCHEDULE 2.01(a) Term Loan Commitments
SCHEDULE 2.01(b) Revolving Credit Commitments
SCHEDULE 2.02 Domestic Lending Offices
SCHEDULE 2.03 Eurodollar Lending Offices
SCHEDULE 2.20 Letter of Credit Fee Schedule
SCHEDULE 4.01 Qualified Jurisdictions
SCHEDULE 4.05 Material Adverse Change
SCHEDULE 4.06(a) Litigation
SCHEDULE 4.06(b) Compliance with Laws
SCHEDULE 4.15 Subsidiaries
SCHEDULE 4.16(a) Defects in Title
SCHEDULE 4.16(c) Pending Claims
SCHEDULE 4.19 Environmental Law Compliance
SCHEDULE 4.22 Bank Accounts
SCHEDULE 6.05(g) Inventory Designations
SCHEDULE 6.05(j) Borrowing Base Certificate
SCHEDULE 6.19(d) Post Closing Environmental Matters
SCHEDULE 7.01 Existing Liens
SCHEDULE 7.03 Existing Indebtedness
SCHEDULE I Management Investors
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of March 17,
1998, among AIRXCEL, INC. (formerly known as Recreation Vehicle
Products, Inc.), a Delaware corporation ("Airxcel" or a "Borrower"),
and KODA ENTERPRISES GROUP, INC. (which, on the Closing Date, will
merge with its subsidiaries, Koda Industries of Tennessee, Inc. and
Suburban Manufacturing Company, and will change its name to Suburban
Manufacturing Company), a Delaware corporation ("SMC" or a
"Borrower" and, together with Airxcel, the "Borrowers"), the
Guarantors at any time party hereto, the lenders named in Schedules
2.01(a) and 2.01(b) annexed hereto (collectively, the "Lenders"),
and THE CHASE MANHATTAN BANK, as agent for the Lenders (in such
capacity, the "Agent").
The Borrowers have applied to the Lenders for Loans (such term and all
other capitalized terms used in this paragraph having the respective meanings
ascribed to such terms above or hereinafter) up to an aggregate principal amount
of $38,000,000 in the form of (a) a Term Loan to the Borrowers in an aggregate
principal amount not in excess of $10,000,000 outstanding and (b) Revolving
Credit Loans to the Borrowers at any time and from time to time prior to the
Revolving Credit Termination Date in an aggregate principal amount not in excess
of $28,000,000 at any time outstanding. The proceeds of the Term Loan shall be
used to partially finance the acquisition of SMC pursuant to the Acquisition
Agreement. The proceeds of the Revolving Credit Loans shall be used to partially
finance the acquisition of SMC, and for working capital and general corporate
purposes. The Grantors will provide Collateral in accordance with the provisions
of this Agreement and the Security Documents. The Lenders are severally, and not
jointly, willing to extend such Loans to the Borrowers subject to the terms and
conditions hereinafter set forth. Accordingly, the Borrowers, the Guarantors,
the Lenders and the Agent hereby agree as follows:
I. DEFINITIONS
SECTION 1.01. Certain Defined Terms. For purposes hereof, the following
terms shall have the meanings specified below:
"Acquisition" shall mean the purchase by Airxcel of 100% of the issued and
outstanding stock of SMC pursuant to the provisions of the Acquisition
Agreement.
"Acquisition Agreement" shall mean the Stock Purchase Agreement dated as
of March 17, 1998, between Xxxxxxx X. Xxxxx, as seller, and Airxcel, as buyer.
"Acquisition Documents" shall mean the Acquisition Agreement and all
agreements, documents and instruments executed and delivered pursuant thereto or
in connection therewith including, without limitation, any shareholders'
agreement, in each case as in effect on the Closing Date.
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"Adjusted LIBO Rate" shall mean, with respect to any Eurodollar Loan for
any Interest Period, an interest rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to the product of (i) the LIBO Rate in effect for
such Interest Period and (ii) Statutory Reserves. For purposes hereof,
"Statutory Reserves" shall mean a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including, without
limitation, any marginal, special, emergency, or supplemental reserves)
expressed as a decimal established by the Board and any other banking authority
to which any Lender is subject with respect to the Adjusted LIBO Rate for
Eurocurrency Liabilities (as defined in Regulation D). Such reserve percentages
shall include, without limitation, those imposed under Regulation D. Eurodollar
Loans shall be deemed to constitute Eurocurrency Liabilities and as such shall
be deemed to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets which may be available from time to
time to any Lender under Regulation D. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"Affiliate" of any person shall mean any other person which, directly or
indirectly, controls or is controlled by or is under common control with such
person and, without limiting the generality of the foregoing, includes (i) any
person which beneficially owns or holds 5% or more of any class of voting
securities of such person or 5% or more of the equity interest in such person,
(ii) any person of which such person beneficially owns or holds 5% or more of
any class of voting securities or in which such person beneficially owns or
holds 5% or more of the equity interest in such person and (iii) any director or
officer of such person. For the purposes of this definition, the term "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with"), as used with respect to any person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such person, whether through the ownership of voting
securities or by contract or otherwise.
"Agent" shall have the meaning assigned to such term in the preamble to
this Agreement.
"Airxcel" shall mean Airxcel, Inc., a Delaware corporation.
"Alternate Base Loan" shall mean a Loan based on the Alternate Base Rate
in accordance with Article II hereof.
"Alternate Base Rate" shall mean, for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greatest of (a) the
Prime Rate in effect on such day, (b) the Base CD Rate in effect on such day
plus 1%, and (c) the Federal Funds Effective Rate in effect on such day plus 1/2
of 1%. "Prime Rate" shall mean the rate of interest per annum publicly announced
from time to time by the Agent at its principal office in New York City as its
prime rate in effect at such time. "Base CD Rate" shall mean the sum of (a) the
product of (i) the Three-Month Secondary CD Rate and (ii) Statutory Reserves and
(b) the Assessment Rate. "Three-Month Secondary CD Rate" shall mean, for any
day, the secondary market rate for three-month certificates of deposit reported
as
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being in effect on such day (or, if such day shall not be a Business Day, the
next preceding Business Day) by the Board through the public information
telephone line of the Federal Reserve Bank of New York (which rate will, under
the current practices of the Board, be published in Federal Reserve Statistical
Release H.15(519) during the week following such day), or, if such rate shall
not be so reported on such day or such next preceding Business Day, the average
of the secondary market quotations for three-month certificates of deposit of
major money center banks in New York City received at approximately 10:00 a.m.,
New York City time, on such day (or, if such day shall not be a Business Day, on
the next preceding Business Day) by the Agent from three New York City
negotiable certificate of deposit dealers of recognized standing selected by it.
"Statutory Reserves" shall mean a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the maximum reserve percentage (including any marginal, special,
emergency or supplemental reserves) expressed as a decimal, established by the
Board and any other banking authority to which the Agent is subject with respect
to the Base CD Rate, for new negotiable nonpersonal time deposits in dollars of
over $100,000 with maturities approximately equal to three months. Statutory
Reserves shall be adjusted automatically on and as of the effective date of any
change in any reserve percentage. "Assessment Rate" shall mean the annual
assessment rate (net of refunds and rounded upwards, if necessary, to the next
1/16 of 1%) estimated by the Agent (in good faith, but in no event in excess of
statutory or regulatory maximums) to be payable by the Agent to the Federal
Deposit Insurance Corporation (or any successor) for insurance by such
Corporation (or such successor) of time deposits made in dollars at the Agent's
domestic offices during the current calendar year. "Federal Funds Effective
Rate" shall mean, for any day, the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published 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 which is a Business Day, the average of the quotations for the day of
such transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it. If for any reason the Agent shall have
determined (which determination shall be conclusive absent manifest error) that
it is unable to ascertain the Base CD Rate or the Federal Funds Effective Rate,
or both, for any reason, including, the inability or failure of the Agent to
obtain sufficient quotations in accordance with the terms hereof, the Alternate
Base Rate shall be determined without regard to clause (b) or (c), or both, of
the first sentence of this definition, as appropriate, until the circumstances
giving rise to such inability no longer exist. Any change in the Alternate Base
Rate due to a change in the Prime Rate, the Three-Month Secondary CD Rate or the
Federal Funds Effective Rate shall be effective on the effective date of such
change in the Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds
Effective Rate, respectively.
"Applicable Lending Office" shall mean, with respect to each Lender, such
Lender's Domestic Lending Office in the case of an Alternate Base Loan and such
Lender's Eurodollar Lending Office in the case of a Eurodollar Loan.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an assignee and accepted by the Agent, in
substantially the form of Exhibit F annexed hereto.
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"Assignment of Contract" shall mean, collectively, (i) the Assignment of
Contract, dated as of the date hereof, between Airxcel and the Agent, for its
own benefit and for the benefit of the Lenders, (ii) the Assignment of Contract,
dated as of the First Amendment Closing Date, between Airxcel and the Agent, for
its own benefit and for the benefit of the Lenders and (iii) the Assignment of
Contract, dated as of the Original Closing Date, between Holdings and the Agent,
for its own benefit and for the benefit of the Lenders, each substantially in
the form of Exhibit I annexed hereto, each as amended, modified or supplemented
from time to time.
"Availability" shall mean at any time (i) the lesser at such time of (x)
the Total Revolving Credit Commitment and (y) the Borrowing Base as set forth in
the most recent certificate delivered pursuant to Section 6.05(j), minus (ii)
the sum at such time of (x) the unpaid principal balance of the Revolving Credit
Loans together with all reserves established pursuant to this Agreement
including, without limitation, Sections 2.01 and 7.01(c) hereof, and (y) the
Letter of Credit Usage.
"Board" shall mean the Board of Governors of the Federal Reserve System of
the United States.
"Borrowers" shall have the meaning assigned to such term in the preamble
to this Agreement.
"Borrowing Base" shall have the meaning assigned to such term in Section
2.01(b) hereof.
"Business Day" shall mean any day, other than a Saturday, Sunday or legal
holiday in the State of New York, on which banks are open for substantially all
their banking business in New York City except that, if any determination of a
"Business Day" shall relate to a Eurodollar Loan, the term "Business Day" shall
in addition exclude any day on which banks are not open for dealings in dollar
deposits in the London interbank market.
"Capitalized Lease Obligation" shall mean an obligation to pay rent or
other amounts under any lease of (or other arrangement conveying the right to
use) real and/or personal property which obligation is required to be classified
and accounted for as a capital lease on a balance sheet prepared in accordance
with GAAP, and for purposes hereof the amount of such obligation shall be the
capitalized amount thereof determined in accordance with GAAP.
"Cash Interest Expense" shall mean, with respect to any person for any
period, the Interest Expense of such person for such period less all non-cash
items constituting Interest Expense during such period (including, without
limitation, amortization of debt discounts and payments of interest on
Indebtedness by issuance of Indebtedness or by accrual), determined on a
Consolidated basis in accordance with GAAP.
"Change of Control" shall mean either (i) Holdings shall cease to own 100%
of all classes of Airxcel's outstanding capital stock, free and clear of any
Liens (other than Liens created pursuant to this Agreement), (ii) Airxcel shall
cease to own 100% of all classes of
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SMC's outstanding capital stock, free and clear of any Liens (other than Liens
created pursuant to this Agreement) or (iii) the Investor Group shall cease to
own common stock of Holdings representing not less than 65% of the common equity
interest, whether voting or non-voting, in Holdings on a fully diluted basis
assuming the exercise of all securities exercisable, convertible or exchangeable
for or into common stock equity interests and (B) after a registered initial
public offering of the common stock of Holdings, the Investor Group shall cease
to own common stock of Holdings representing not less than 51% of the common
equity interest, whether voting or non-voting, in Holdings on a fully diluted
basis assuming the exercise of all securities exercisable, convertible or
exchangeable for or into common stock interests.
"Closing Date" shall mean the date of the first borrowing under this
Agreement, but in no event later than March 17, 1998.
"Coast" shall mean The Coast Distribution Systems, Inc., a California
corporation.
Coast Distribution Agreement" shall mean the Distribution Agreement dated
as of October 11, 1995 between Airxcel and Coast.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral" shall mean all collateral and security as described in the
Security Documents.
"Commitment" shall mean, with respect to each Lender, the sum of the Term
Loan Commitment of such Lender as set forth in Schedule 2.01(a), and the
Revolving Credit Commitment of such Lender as set forth in Schedule 2.01(b), as
each may be adjusted from time to time pursuant to this Agreement including,
without limitation, Section 2.07 hereof.
"Consolidated" shall mean, in respect of any person, as applied to any
financial or accounting term, such term determined on a consolidated basis in
accordance with GAAP (except as otherwise required herein) for the person and
all consolidated subsidiaries thereof.
"Credit Event" shall mean each borrowing and each issuance of a Letter of
Credit hereunder.
"Credits" shall mean each Loan and each Letter of Credit.
"Crispaire Acquisition Documents" shall mean the Asset Purchase Agreement
dated as of October 17, 1997, among Crispaire Corporation, as seller, and
Airxcel, as buyer, and Holdings, and all agreements, documents and instruments
executed and delivered pursuant thereto or in connection therewith, in each case
as in effect on the First Amendment Closing Date.
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"Customer" shall mean and include the account debtor or obligor with
respect to any Receivable.
"Debt Service Coverage Ratio" shall mean, with respect to any person for
any period, the ratio of (i) Funds from Operations minus capital expenditures
paid in cash (including, without limitation, the principal component of
Capitalized Lease Obligations paid in cash during such period) for such period
to (ii) the aggregate Debt Service Expense of such person for such period.
"Debt Service Expense" shall mean, with respect to any person for any
period, the aggregate of regularly scheduled principal payments of all long-term
Indebtedness (including, without limitation, Subordinated Indebtedness) made or
to be made by such person during such period on a Consolidated basis in
accordance with GAAP; provided, however, that solely for the purposes of
determining the Debt Service Coverage Ratio, Debt Service Expense shall exclude
the principal component of Capitalized Lease Obligations.
"Default" shall mean any condition, act or event which, with notice or
lapse of time or both, would constitute an Event of Default.
"dollars" or the symbol "$" shall mean dollars in lawful currency of the
United States of America.
"Domestic Lending Office" shall mean, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" opposite its
name in Schedule 2.02 annexed hereto, or such other office of such Lender as
such Lender may from time to time specify to the Borrowers and the Agent.
"Domestic Subsidiary" means, with respect to any person, any subsidiary of
such person which is incorporated or organized under the laws of the United
States, any State or the District of Columbia or the Commonwealth of Puerto
Rico.
"EBITDA" shall mean with respect to any person for any period the sum of
(i) Net Income, (ii) Interest Expense, (iii) depreciation and amortization of
intangible assets and (iv) federal, state and local income taxes, in each case
of such person for such period, in each case, determined on a Consolidated basis
in accordance with GAAP; provided, however, that for the purposes of determining
the Interest Margin or the Unutilized Fee Margin, EBITDA for any person shall be
calculated as though such person and its Consolidated subsidiaries were
"Consolidated" for the twelve calendar month period immediately preceding the
date of determination; provided, further, that in determining EBITDA with
respect the Borrowers for each of the first four fiscal quarters ending after
the Closing Date, EBITDA for such persons shall be adjusted for nonrecurring and
unrelated items such as expenses related to assets or operations not part of
such person or compensation paid to the former owners of such persons, in each
case as consented to by the Agent.
"Environmental Claim" shall mean any written notice of violation, claim,
demand, abatement or other order by any governmental authority or any person for
personal injury
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(including sickness, disease or death), tangible or intangible property damage,
damage to the environment, nuisance, pollution, contamination or other adverse
effects on the environment, or for fines, penalties or deed or use restrictions,
resulting from or based upon (i) the existence, or the continuation of the
existence, of a Release (including, without limitation, sudden or non-sudden,
accidental or nonaccidental Releases), of, or exposure to, any Hazardous
Material at, in, by or from any of the properties of the Borrowers or their
subsidiaries, (ii) the environmental aspects of the transportation, storage,
treatment or disposal of Hazardous Materials in connection with the operation of
any of the properties of the Borrowers or their subsidiaries or (iii) the
violation, or alleged violation by the Borrowers or any of their subsidiaries,
of any statutes, ordinances, orders, rules, regulations, Permits or licenses of
or from any governmental authority, agency or court relating to environmental
matters connected with any of the properties of the Borrowers or their
subsidiaries, under any applicable Environmental Law.
"Environmental Laws" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. ss. 9601 et seq.), the Hazardous
Material 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 Water
Pollution Control Act (33 U.S.C. ss. 1251 et seq.), the Oil Pollution Act of
1990 (33 U.S.C. ss.2701 et seq.), the Safe Drinking Water Act (42 U.S.C. ss.
300f, et seq.), the Clear Air Act (42 U.S.C. ss. 7401 et seq.), the Toxic
Substances Control Act, as amended (15 U.S.C. ss. 2601 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. ss. 136 et seq.), and the
Occupational Safety and Health Act (29 U.S.C. ss. 651 et seq.), as such laws
have been and hereafter may be amended or supplemented, and any applicable
related or analogous present or future Federal, state or local, statutes, rules,
regulations, ordinances, licenses, permits and orders of regulatory and
administrative bodies.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder, as in effect from
time to time.
"ERISA Afffiliate" shall mean any trade or business (whether or not
incorporated) which together with any Borrower or any subsidiary thereof would
be treated as a single employer under the provisions of Title I or Title IV of
ERISA.
"Eurodollar Lending Office" shall mean, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" opposite its
name in Schedule 2.03 annexed hereto (or, if no such office is specified, its
Domestic Lending Office), or such other office of such Lender as such Lender may
from time to time specify to the Borrowers and the Agent.
"Eurodollar Loan" shall mean a Loan based on the Adjusted LIBO Rate in
accordance with Article II hereof.
"Event of Default" shall have the meaning assigned to such term in Article
VIII hereof.
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"Excess Cash Flow" shall mean, with respect to any person for any period,
the amount, if any, by which Net Cash Flow of such person and its subsidiaries
on a Consolidated basis for such period exceeds the Debt Service Expense of such
person and its subsidiaries on a Consolidated basis for such period.
"Final Maturity Date" shall mean March 31, 2005.
"Financial Officer" shall mean, with respect to any person, the chief
financial officer or the chief accounting officer of such person.
"First Amended Agreement" shall mean the First Amended and Restated Credit
Agreement, dated as of November 10, 1997, among Airxcel, the Guarantors at any
time party thereto, the Lenders named therein and the Agent.
"First Amendment Closing Date" shall mean November 10, 1997.
"Fiscal Year" for the purposes of the Loan Documents, shall mean on a
combined pro forma basis for the Borrowers, December 31 of each year.
"Foreign Subsidiary" means, with respect to any person, any subsidiary of
such Person which is not a Domestic Subsidiary of such Person. On the Closing
Date, Airxcel's sole Foreign Subsidiary is RVPI.
"Funds from Operations" shall mean, with respect to any person for any
period, without duplication of addition or subtraction of items, the sum for
such person for such period of (i) Net Income plus (ii) depreciation and
amortization plus (iii) other noncash items properly deducted in arriving at
pre-tax income (or loss) plus (iv) increases in deferred taxes plus (v) losses
from discontinued operations.
"GAAP" shall have the meaning assigned to such term in Section 1.02
hereof.
"Grantor" shall mean any Grantor, Pledgor or Debtor, as such terms are
defined in any of the Security Documents.
"Guarantee" shall mean any obligation, contingent or otherwise, of any
person guaranteeing or having the economic effect of guaranteeing any
Indebtedness or obligation of any other person in any manner, whether directly
or indirectly, and shall in any event include the Holdings Guarantee, and shall
include, without limitation, any obligation of such person, direct or indirect,
to (i) purchase or pay (or advance or supply funds for the purchase or payment
of such Indebtedness or obligation or to purchase (or to advance or supply funds
for the purchase of any security for the payment of such Indebtedness or
obligation, (ii) purchase property, securities or services for the purpose of
assuring the owner of such Indebtedness or obligation of the payment of such
Indebtedness or obligation, or (iii) maintain working capital, equity capital,
available cash or other financial condition of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or obligation; provided,
however, that the term Guarantee shall not include
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endorsements for collection or collections for deposit, in either case in the
ordinary course of business.
"Guarantor" shall mean, collectively, Holdings and any Domestic Subsidiary
of any Borrower which becomes a guarantor of the Obligations after the date
hereof.
"Hazardous Material" shall mean any pollutant, contaminant, or hazardous,
toxic or dangerous waste, substance or material, defined or regulated as such in
(or for purposes of) any Environmental Law and any other toxic, reactive, or
flammable chemicals, including (without limitation) any asbestos, any petroleum
(including crude oil or any fraction), any radioactive substance and any
polychlorinated biphenyls; provided, in the event that any Environmental Law is
amended so as to broaden the meaning of any term defined thereby, such broader
meaning shall apply subsequent to the effective date of such amendment; and
provided, further, to the extent that the applicable laws of any state establish
a meaning for "hazardous material," "hazardous substance," "hazardous waste,"
"solid waste" or "toxic substance" which is broader than that specified in any
Federal Environmental Law, such broader meaning shall apply.
"Holdings" shall mean Airxcel Holdings, Inc., a Delaware corporation,
together with its successors and assigns.
"Holdings Guarantee" shall mean the Guarantee by Holdings of the
Obligations, dated as of the Closing Date, substantially in the form of Exhibit
H annexed hereto, as amended, modified or supplemented from time to time.
"Indebtedness" shall mean, with respect to any person, (a) all obligations
of such person for borrowed money or with respect to deposits or advances of any
kind, (b) all obligations of such person evidenced by bonds, debentures, notes
or other similar instruments or upon which interest charges are customarily
paid, (c) all obligations of such person for the deferred purchase price of
property or services, except current accounts payable arising in the ordinary
course of business and not overdue beyond such period as is commercially
reasonable for such person's business, or, if overdue, the validity of which are
being contested in good faith by appropriate proceedings by such person, (d) all
obligations of such person under conditional sale or other title retention
agreements relating to property purchased by such person and all Capitalized
Lease Obligations, (e) all payment obligations of such person with respect to
interest rate or currency protection agreements, (f) all obligations of such
person as an account party under any letter of credit or in respect of bankers'
acceptances, (g) all obligations of any third party secured by property or
assets of such person (regardless of whether or not such person is liable for
repayment of such obligations), (h) all Guarantees of such person and (i) the
redemption price of all redeemable preferred stock of such person, but only to
the extent that such stock is redeemable at the option of the holder or requires
sinking fund or similar payments at any time prior to the Final Maturity Date.
"Indemnitees" shall have the meaning assigned to such term in Section
11.04(c) hereof.
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"Information" shall have the meaning assigned to such term in Section
11.11 hereof.
"Interest Coverage Ratio" shall mean, with respect to any person for any
four quarter period, the ratio of (i) EBITDA for the four (or such lesser number
of quarters as shall have elapsed since the Closing Date) most recent
consecutive fiscal quarters ending on or prior to the date of determination, to
(ii) the Cash Interest Expense of such person for such four (or such lesser
number of quarters as shall have elapsed since the Closing Date) quarter period,
in each case, determined on a Consolidated basis in accordance with GAAP.
"Interest Expense" shall mean, with respect to any person for any period,
the interest expense of such person during such period determined on a
Consolidated basis in accordance with GAAP, and shall in any event include,
without limitation, (i) the amortization of debt discounts, (ii) the
amortization of all fees payable in connection with the incurrence of
Indebtedness to the extent included in interest expense, (iii) the portion of
any Capitalized Lease Obligation allocable to interest expense, (iv) all fixed
and all calculable dividend payments on preferred stock, and (v) payments of
interest expense in kind.
"Interest Margin" or "Unutilized Fee Margin" shall mean, at any time, with
respect to any Loan, the amount set forth below as corresponds to the Leverage
Ratio set forth below, determined on the Closing Date and adjusted thereafter,
within ten (10) Business Days after the delivery of the financial statements to
the Agent required pursuant to Section 6.05(a) or (b) hereof, as applicable,
together with the corresponding compliance certificates required pursuant to
Section 6.05(e) hereof, commencing with the financial statements and
certificates for the period ending September 30, 1998, or if the Borrowers shall
fail to timely deliver such statements and certificates for any such period,
then at the highest Interest Margin or Unutilized Fee Margin, as applicable,
provided for herein:
--------------------------------------------------------------------------------
Alternate
LIBO Rate Base Rate Unutilized
Leverage Ratio Interest Margin Interest Margin Fee Margin
-------------- --------------- --------------- ----------
--------------------------------------------------------------------------------
Greater than 3.00:1.00 2.50% 1.25% 0.50%
--------------------------------------------------------------------------------
Equal to or less than 3.00:1.00
but greater than 2.00:1.00 2.25% 1.00% 0.50%
--------------------------------------------------------------------------------
Equal to or less than 2.00:1.00
but greater than 1.00:1.00 2.00% 0.75% 0.375%
--------------------------------------------------------------------------------
Less than or equal to 1.00:1.00 1.75% 0.50% 0.25%
--------------------------------------------------------------------------------
On the Closing Date and until the day the adjustment, if any, is made to
the Interest Margin and the Unutilized Fee Margin following the receipt by the
Agent of the financial statements required under Section 6.05(b) for the period
ending September 30, 1998 and the related compliance certificates, the LIBO Rate
Interest Margin shall be 2.25%, the Alternate Base Rate Interest Margin shall be
1.00% and the Unutilized Fee Margin shall be 0.50%; each shall thereafter be
adjusted in accordance with the provisions hereof.
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"Interest Payment Date" shall mean (i) in the case of an Alternate Base
Loan, the first Business Day of each January, April, July and October,
commencing April 1, 1998 (which shall cover the period from January 2, 1998 for
Loans outstanding under the Original Credit Agreement and which are being
continued and extended under this Agreement), and (ii) with respect to any
Eurodollar Loan (which shall include those outstanding under the First Amended
Agreement and which are being continued and extended under this Agreement), the
last day of the Interest Period applicable thereto, and, in addition, in respect
of any Eurodollar Loan of more than three (3) months' duration, each earlier day
which is three (3) months after the first day of such Interest Period.
"Interest Period" shall mean, as to any Eurodollar Loan, the period
commencing on the date of such Eurodollar Loan and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the last
day) in the calendar month that is one (1), two (2), three (3) or six (6) months
thereafter, as the Borrowers may elect with respect to their Eurodollar Loans;
provided, however, that (x) if an Interest Period would end on a day that is not
a Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless, with respect to Eurodollar Loans, such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day, (y) no Interest Period
shall end later than the Final Maturity Date and (z) interest shall accrue from
and including the first day of an Interest Period to but excluding the last day
of such Interest Period.
"Inventory" shall mean (i) inventory of the Borrowers and their
subsidiaries comprised of raw materials and finished goods which is not
obsolete, slow-moving or unmerchantable, (ii) inventory of the Borrowers and
their subsidiaries comprised of work-in process, excluding any work-in-process
relating to the assembly of awning products, which is not obsolete, slow-moving
or unmerchantable.
"Investor Group" shall mean Citicorp Venture Capital, Ltd., its
Affiliates, their respective employees and the Management Investors.
"Lender" shall have the meaning assigned to such term in the preamble to
this Agreement.
"Letter of Credit" shall have the meaning assigned such term in Section
2.17 hereof.
"Letter of Credit Usage" shall mean at any time, (i) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (ii) the
unreimbursed drawings at such time under all such Letters of Credit.
"Leverage Ratio" with respect to any person at the end of any fiscal
quarter shall mean the ratio of (i) Senior Funded Debt as at the date of
determination to (ii) EBITDA of such person for the four most recent consecutive
fiscal quarters ending on or prior to the date of determination, in each case,
determined on a Consolidated basis in accordance with GAAP.
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"LIBO Rate" shall mean, with respect to any Eurodollar Loan for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to the rate at which dollar deposits approximately
equal in principal amount to the Eurodollar Loan of the Agent and for a maturity
equal to the applicable Interest Period are offered in immediately available
funds to the London branch of the Agent by leading banks in the London interbank
market for Eurodollars at approximately 11:00 a.m., London time, two (2)
Business Days prior to the first day of such Interest Period.
"Lien" shall mean, with respect to any asset, (i) any mortgage, lien,
pledge, encumbrance, charge or security interest in or on such asset, (ii) the
interest of a vendor or a lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset, (iii) in the
case of securities, any purchase option, call or similar right of a third party
with respect to such securities or (iv) any other right of or arrangement with
any creditor to have such creditor's claim satisfied out of such assets, or the
proceeds therefrom, prior to the general creditors of the owner thereof.
"Loan" shall mean any Term Loan or any Revolving Credit Loan.
"Loan Documents" shall mean this Agreement, each Security Document, each
Guarantee executed and delivered at any time with respect to the Obligations,
the Notes and each other document, instrument, or agreement now or hereafter
delivered to the Agent or any Lender in connection herewith or therewith.
"Loan Party" shall mean each Borrower, each Grantor, each Guarantor, and
each subsidiary thereof.
"Management Investors" shall mean the individual investors listed on
Schedule I attached hereto.
"Mandatory Prepayment" shall mean an amount equal to 25% of the first
$5,000,000 of Excess Cash Flow, plus 15% of the second $5,000,000 of Excess Cash
Flow, plus 7.5% of the third $5,000,000 of Excess Cash Flow; provided that for
the Fiscal Year ended December 31,1998, the Mandatory Prepayment shall not
exceed $750,000 and shall be calculated based on the period from the Closing
Date through December 31, 1998.
"Margin Stock" shall have the meaning assigned to such term in Regulation
U.
"Material Adverse Effect" shall mean a material adverse effect on (i) the
business, assets, prospects, operations or financial or other condition of any
Loan Party, (ii) the ability of any Loan Party to perform or pay the Obligations
in accordance with the terms hereof or of any other Loan Document, (iii) the
rights of, or benefits available to, the Lenders or the Agent under any Loan
Document or (iv) the Agent's Lien on any material portion of the Collateral or
the priority of such Lien.
"Mortgages" shall mean, collectively, (i) the real property mortgage,
dated as March 31, 1997, recorded June 20, 1997, relating to Airxcel's real
property located in Wichita, Kansas, (ii) the real property mortgage, dated as
of the Closing Date, relating to
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SMC's real property located in Dayton, Tennessee and (iii) the real property
mortgage, dated as of the Closing Date, relating to SMC's real property located
in Elkhart, Indiana, each of which having been executed by the Grantor(s) in
favor of the Agent, for its own benefit and for the benefit of the Lenders, as
amended, modified or supplemented from time to time.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA.
"Net Amount of Inventory" shall mean, at any time, the aggregate value,
computed at the lower of cost (on a FIFO basis) and current market value of
Inventory.
"Net Amount of Receivables" shall mean and include at any time, without
duplication, the gross amount of Receivables at such time less (i) sales, excise
or similar taxes and (ii) returns, discounts, claims, credits and allowances of
any nature at any time issued, owing, granted, outstanding, available or
claimed.
"Net Cash Flow" shall mean, with respect to any person for any period,
without duplication of addition or subtraction of items, (A) the sum for such
period of (i) Net Income, (ii) depreciation and amortization and (iii) other
non-cash items properly deducted in arriving at Net Income minus (B) all capital
expenditures during such period, in each case, determined on a Consolidated
basis in accordance with GAAP.
"Net Income" shall mean, with respect to any person for any period, the
aggregate income (or loss) of such person for such period which shall be an
amount equal to net revenues and other proper items of income for such person
less the aggregate for such person of any and all items that are treated as
expenses under GAAP, less Federal, state and local income taxes, plus, to the
extent deducted or added in determining net income, non-cash expenses associated
with Holdings' stock option plans, but excluding any extraordinary gains or
losses or any gains or losses from the sale or disposition of assets other than
in the ordinary course of business, in each case, determined on a Consolidated
basis in accordance with GAAP.
"Notes" shall mean the Term Notes and the Revolving Credit Notes.
"Obligations" shall mean all obligations, liabilities and Indebtedness of
the Borrowers to the Lenders and the Agent under or in connection with the Loan
Documents, whether now existing or hereafter created, direct or indirect, due or
not, whether created directly or acquired by assignment, participation or
otherwise, including without limitation all obligations, liabilities and
Indebtedness of the Borrowers with respect to the Security Documents and other
Loan Documents, the principal of and interest on the Revolving Credit Loans, the
Term Loans and the payment or performance of all other obligations, liabilities,
and Indebtedness of the Borrowers to the Lenders and the Agent hereunder, under
the Letters of Credit or under any one or more of the other Loan Documents
(including the payment of amounts that would become due but for the operation of
the automatic stay under Section 362(a) of the Bankruptcy Code, and interest
that, but for the filing of a petition in bankruptcy with respect to any
Borrower, would accrue on such
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obligations, whether or not a claim is allowed against such Borrower for such
interest in the related bankruptcy proceeding), including without limitation all
fees, costs, expenses and indemnity obligations hereunder and thereunder.
"Original Closing Date" shall mean August 22, 1996.
"Original Credit Agreement" shall mean the Credit Agreement, dated as of
August 22, 1996, as amended to the First Amendment Closing Date, among Airxcel,
the lenders and guarantors named therein, and the Agent.
"Other Taxes" shall have the meaning assigned to such term in Section
2.15(b) hereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Pension Plan" shall mean any Plan which is subject to the provisions of
Title IV of ERISA.
"Permits" shall have the meaning assigned to such term in Section 4.18
hereof.
"person" shall mean any natural person, corporation, limited liability
company, business trust, association, company, joint venture, partnership or
government or any agency or political subdivision thereof.
"Plan" shall mean any employee benefit plan within the meaning of Section
3(3) of ERISA and which is maintained (in whole or in part) for employees of the
Borrowers, any subsidiary or any ERISA Affiliate.
"Pledge Agreement" shall mean the Pledge Agreement dated as of the
Original Closing Date, as amended and restated as of the date hereof, between
the Grantor(s) and the Agent, for its own benefit and for the benefit of the
Lenders, in substantially the form of Exhibit D annexed hereto, as amended,
modified or supplemented from time to time.
"Pledged Stock" shall have the meaning assigned to such term in the Pledge
Agreement.
"Qualified Sale" shall mean any sale or other disposition by any Loan
Party or any of their respective subsidiaries, other than in the ordinary course
of business, of any equipment or property (other than inventory or Receivables)
for (x) cash equal to at least 90% of the fair market value thereof determined
in good faith by the Board of Directors of such Loan Party, (y) "trade-in" or
(z) "trade-up", in each case, of all of the net cash proceeds thereof (a) within
twelve months after the date of such sale shall be applied to the purchase of
capital equipment or property, such purchased equipment or property to be used
in the ordinary course of business of such Loan Party or subsidiary, and to have
a fair market value in the aggregate of not less than the amount of such net
cash proceeds, or (b) shall be applied to the payment of Indebtedness incurred
in connection with the purchase of any equipment or property described in clause
(a) above, and (c) in the case
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of clause (a) above, pending such application, shall be deposited into a cash
collateral account maintained with the Agent, pursuant to agreements in form,
scope and substance reasonably satisfactory to the Agent.
"Receivables" shall mean and include all of the Borrowers' and their
subsidiaries' accounts, instruments, documents, chattel paper and general
intangibles, whether secured or unsecured, whether now existing or hereafter
created or arising, and whether or not specifically assigned to the Agent for
its own benefit and/or the ratable benefit of the Lenders.
"Register" shall have the meaning assigned to such term in Section
11.03(e) hereof.
"Regulation D" shall mean Regulation D of the Board, as the same is from
time to time in effect, and all official rulings and interpretations thereunder
or thereof.
"Regulation G" shall mean Regulation G of the Board, as the same is from
time to time in effect, and all official rulings and interpretations thereunder
or thereof.
"Regulation T" shall mean Regulation T of the Board, as the same is from
time to time in effect, and all official rulings and interpretations thereunder
or thereof.
"Regulation U" shall mean Regulation U of the Board, as the same is from
time to time in effect, and all official rulings and interpretations thereunder
or thereof.
"Regulation X" shall mean Regulation X of the Board, as the same is from
time to time in effect, and all official rulings and interpretations thereunder
or thereof.
"Release" shall mean any releasing, spilling, leaking, seepage, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
disposing or dumping, in each case as defined in Environmental Law, and shall
include any "Threatened Release," as defined in Environmental Law.
"Remedial Work" shall mean any investigation, site monitoring,
containment, cleanup, removal, restoration or other remedial work of any kind or
nature with respect to any property of the Borrowers or their subsidiaries
(whether such property is owned, leased, subleased or used), including, without
limitation, with respect to Hazardous Materials and the Release thereof.
"Repayment Date" shall have the meaning set forth in Section 2.04(f)
hereof.
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"Reportable Event" shall mean a Reportable Event as defined in Section
4043(c) of ERISA.
"Required Lenders" shall mean Lenders having 51% of the Total Commitment.
"Responsible Officer" shall mean, with respect to any person, any vice
president or president, or the chief financial officer or controller, of such
person.
"Revolving Credit Alternate Base Loan" shall mean a Revolving Credit Loan
that is an Alternate Base Loan.
"Revolving Credit Commitment" shall mean, with respect to any Lender, the
Revolving Credit Commitment of such Lender as set forth in Schedule 2.01(b)
annexed hereto, as the same may be reduced from time to time pursuant to this
Agreement including, without limitation, Section 2.07 hereof.
"Revolving Credit Commitment Fee" shall have the meaning set forth in
Section 2.06(a) hereof.
"Revolving Credit Eurodollar Loan" shall mean a Revolving Credit Loan that
is a Eurodollar Loan.
"Revolving Credit Loan" shall mean a Revolving Credit Loan made pursuant
to Section 2.01 and 2.02 hereof.
"Revolving Credit Notes" shall mean the Revolving Credit Notes of the
Borrowers, executed and delivered as provided in Section 2.04 hereof, in
substantially the form of Exhibit B annexed hereto, as amended, modified or
supplemented from time to time.
"Revolving Credit Termination Date" shall mean the earlier to occur of (i)
March 31, 2003 and (ii) such date as the Revolving Credit Loans shall otherwise
be payable in full and the Revolving Credit Commitment shall terminate, expire
or be canceled in accordance with the terms of this Agreement.
"RVPI" shall mean RVP International Sales Corporation, a Barbados
corporation.
"Security Agreement" shall mean the Security Agreement dated as of the
Original Closing Date, between the Grantor(s) and the Agent, for its own
benefit and for
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the benefit of the Lenders, substantially in the form of Exhibit E annexed
hereto, as amended, modified or supplemented from time to time.
"Security Agreement - Patents and Trademarks" shall mean the Amended and
Restated Security Agreement and Mortgage - Patents and Trademarks, dated as of
the Closing Date, between the Debtor(s), as such term is defined therein, and
the Agent, for its own benefit and for the benefit of the Lenders, substantially
in the form of Exhibit G annexed hereto, as amended, modified or supplemented
from time to time.
"Security Documents" shall mean the Pledge Agreement, the Security
Agreement, the Security Agreement - Patents and Trademarks, the Assignment of
Contract, the Mortgages and each other agreement now existing or hereafter
created providing collateral security for the payment or performance of any
Obligations.
"Senior Funded Debt" shall mean with respect to any person as of the date
of determination thereof, all Indebtedness of such person and its subsidiaries
on a Consolidated basis outstanding at such time which matures more than one
year after the date of calculation, and any such Indebtedness maturing within
one year from such date of calculation which is renewable or extendable at the
option of the obligor to a date more than one year from such date and including
in any event the Revolving Credit Loans, but excluding Subordinated Indebtedness
of such person.
"SMC" shall mean Koda Enterprises Group, Inc., a Delaware corporation
which, on the Closing Date, will merge with its subsidiaries, Koda Industries of
Tennessee, Inc. and Suburban Manufacturing Company, and will change its name to
Suburban Manufacturing Company.
"Subordinated Indebtedness" shall mean, with respect to any Borrower,
Indebtedness subordinated in right of payment to such person's monetary
obligations under this Agreement upon terms satisfactory to and approved in
writing by the Agent, to the extent it does not by its terms (except as
otherwise approved in writing by the Agent) mature or become subject to any
mandatory prepayment or amortization of principal prior to the Final Maturity
Date, and shall in any event include the Indebtedness of Airxcel pursuant to the
Subordinated Notes.
"Subordinated Notes" shall mean the $125,000,000 principal amount of
Senior Subordinated Notes due 2007, Series A and Series B, of which $90,000,000
is outstanding as of the Closing Date.
"subsidiary" shall mean, with respect to any person, any corporation,
association or other business entity of which securities or other ownership
interests representing more than 50% of the ordinary voting power are, at the
time as of which any determination is being made, owned or controlled, directly
or indirectly, by the parent of such person or one or more subsidiaries of the
parent of such person.
"Taxes" shall have the meaning assigned to such term in Section 2.15(a)
hereof.
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"Term Alternate Base Loan" shall mean a Term Loan that is an Alternate
Base Loan.
"Term Eurodollar Loan" shall mean a Term Loan that is a Eurodollar Loan.
"Term Loan" shall mean the Term Loan made pursuant to Sections 2.01 and
2.02.
"Term Loan Commitment" shall mean, with respect to any Lender, the Term
Loan Commitment of such Lender as set forth in Schedule 2.01(a).
"Term Notes" shall mean the Term Notes executed and delivered as provided
in Section 2.04, in substantially the form of Exhibit A hereto, as amended,
modified or supplemented from time to time.
"Total Commitment" shall mean the sum of the Lenders' Total Term Loan
Commitment and Total Revolving Credit Commitment, as the same may be reduced
from time to time pursuant to this Agreement including, without limitation,
Section 2.07 hereof.
"Total Revolving Credit Commitment" shall mean the sum of the Lenders'
Revolving Credit Commitments, as the same may be reduced from time to time
pursuant to this Agreement including, without limitation, Section 2.07 hereof.
"Total Term Loan Commitment" shall mean the sum of the Lenders' Term Loan
Commitments, as the same may be reduced from time to time pursuant to this
Agreement including, without limitation, Section 2.07 hereof.
"Transactions" shall have the meaning assigned to such term in Section
4.02 hereof.
SECTION 1.02. Accounting Terms. Unless otherwise expressly provided
herein, each accounting term used herein shall have the meaning given it under
generally accepted accounting principles in effect from time to time in the
United States applied on a basis consistent with those used in preparing the
financial statements referred to in Section 6.05 hereof ("GAAP"); provided,
however, that each reference to GAAP in Article VII hereof, in the definition of
any term used in Article VII hereof shall mean GAAP as in effect on the date
hereof. In determining compliance with any of the financial ratios which include
the payment of interest on the Notes, payment of interest on the Notes
(excluding fees and expenses payable in connection with this Agreement) (i) made
on or about January 1 in any Fiscal Year shall be deemed to have been made in
the fourth fiscal quarter of the prior Fiscal Year, (ii) made on or about April
1 of any Fiscal Year shall be deemed to have been made in the first fiscal
quarter of such Fiscal Year, (iii) made on or about July 1 in any Fiscal Year
shall be deemed to have been made in the second fiscal quarter of such Fiscal
Year and (iv) made on or about October 1 in any Fiscal Year shall be deemed to
have been made in the third fiscal quarter of such Fiscal Year. In calculating
the financial covenants contained in Sections 7.09 and 7.10, such calculations
shall be made for the Borrowers and their subsidiaries on a Consolidated basis
in accordance with GAAP.
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II. THE LOANS
SECTION 2.01. Term Loan Commitments and Revolving Credit Commitments.
(a) Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, each Lender, severally and not
jointly, agrees to make a Term Loan to the Borrowers on the Closing Date, in a
principal amount not to exceed the amount of such Lender's Term Loan Commitment
set forth opposite its name in Schedule 2.01(a) hereto.
(b) Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, each Lender, severally and not
jointly, agrees to make Revolving Credit Loans to the Borrowers, at any time and
from time to time from the date hereof to the Revolving Credit Termination Date,
in an aggregate principal amount at any time outstanding not to exceed the
amount of such Lender's Revolving Credit Commitment set forth opposite its name
in Schedule 2.01(b) annexed hereto, as such Revolving Credit Commitment may be
reduced from time to time in accordance with the provisions of this Agreement.
Notwithstanding the foregoing, the aggregate principal amount of Revolving
Credit Loans outstanding at any time to the Borrowers shall not exceed (1) the
lesser of (A) the Total Revolving Credit Commitment (as such amount may be
reduced pursuant to this Agreement including, without limitation, Section 2.07
hereof) and (B) an amount equal to the sum of (i) up to eighty-five percent
(85%) of the Net Amount of Receivables, plus (ii) the lesser of (x) $16,000,000
or (y) up to sixty percent (60%) of the Net Amount of Inventory, plus (iii) cash
and equivalents thereof maintained with the Agent on terms satisfactory to the
Agent and in which the Agent shall have a first priority perfected Lien (this
clause 1(B) referred to herein as the "Borrowing Base") minus (2) the Letter of
Credit Usage at such time (not to exceed $500,000 at any time). The Borrowing
Base will be computed monthly and a compliance certificate from a Responsible
Officer of each of the Borrowers presenting its computation will be delivered to
the Agent in accordance with Section 6.050(j) hereof.
Subject to the foregoing and within the foregoing limits, the Borrowers
may borrow, repay (or, subject to the provisions of Section 2.09 hereof, prepay)
and reborrow Revolving Credit Loans, on and after the date hereof and prior to
the Revolving Credit Termination Date, subject to the terms, provisions and
limitations set forth herein, including, without limitation, the requirement
that no Revolving Credit Loan shall be made hereunder if the amount thereof
exceeds the Availability as set forth in the most recent certificate delivered
to the Agent pursuant to Section 6.050(j) hereof.
SECTION 2.02. Loans. (a) The Revolving Credit Loans made by the Lenders on
any date shall be in integral multiples of $50,000; provided, however, that the
Eurodollar Loans made on any date shall be in a minimum aggregate principal
amount equal to the product of $500,000 times the number of Lenders on such
date.
(b) Loans shall be made ratably by the Lenders in accordance with their
respective Term Loan Commitments or Revolving Credit Commitments, as the case
may be; provided, however, that the failure of any Lender to make any Loan shall
not in itself
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relieve any other Lender of its obligation to lend hereunder. The Term Loans to
be made on the Closing Date shall be made by the Lenders on the Closing Date
against delivery of Term Notes, payable to the order of the Lenders, as referred
to in Section 2.04. The initial Revolving Credit Loans shall be made by the
Lenders against delivery of Revolving Credit Notes, payable to the order of the
Lenders, as referred to in Section 2.04 hereof.
(c) Each Loan shall be either an Alternate Base Loan or a Eurodollar Loan
as the Borrowers may request pursuant to Section 2.03 hereof. Each Lender may
fulfill its obligations under this Agreement by causing its Applicable Lending
Office to make such Loan; provided, however, that the exercise of such option
shall not affect the obligation of the Borrowers to repay such Loan in
accordance with the term of the applicable Note. Not more than five (5)
Eurodollar Loans may be outstanding at any one time.
(d) Subject to the provisions of paragraph (e) below, each Lender shall
make its Term Loans and Revolving Credit Loans on the proposed dates thereof by
paying the amount required to the Agent in New York, New York in immediately
available funds not later than 12:00 noon, New York City time, and the Agent
shall as soon as practicable, but in no event later than 3:00 p.m., New York
City time, credit the amounts so received to the general deposit account(s) of
the Borrowers with the Agent in immediately available funds or, if Loans are not
to be made on such date because any condition precedent to a borrowing herein
specified is not met, return the amounts so received to the respective Lenders.
(e) The Borrowers shall have the right at any time upon prior irrevocable
written, telex or facsimile notice (promptly confirmed in writing) to the Agent
given in the manner and at the times specified in Section 2.03 with respect to
the Loans into which conversion or continuation is to be made, to convert all or
any portion of Eurodollar Loans into Alternate Base Loans, to convert all or any
portion of Alternate Base Loans into Eurodollar Loans (specifying the Interest
Period to be applicable thereto), to convert the Interest Period with respect to
all or any portion of any Eurodollar Loans to another permissible Interest
Period, and to continue all or any portion of any Loans into a subsequent
Interest Period of the same duration, subject to the terms and conditions of
this Agreement (including the last sentence of Section 2.02(c) hereof) and to
the following:
(i) in the case of a conversion or continuation of fewer than
all the Loans, the aggregate principal amount of Loans converted or
continued shall not be less than $50,000 in the case of Alternate
Base Loans or $500,000 times the number of Lenders on such date in
the case of Eurodollar Loans and shall be an integral multiple of
$100,000;
(ii) accrued interest on a Loan (or portion thereof being
converted or continued shall be paid by the Borrowers at the time of
conversion or continuation;
(iii) if any Eurodollar Loan is converted at any time other
than the end of an Interest Period applicable thereto, the Borrowers
shall make such payments associated therewith as are required
pursuant to Section 2.12;
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(iv) any portion of a Revolving Credit Loan which is subject
to an Interest Period ending on a date that is less than one month
prior to the Revolving Credit Termination Date may not be converted
into, or continued as, a Eurodollar Loan and shall be automatically
converted at the end of such Interest Period into an Alternate Base
Loan;
(v) any portion of a Term Eurodollar Loan required to be paid
on any Repayment Date occurring less than one month after the end of
the then current Interest Period applicable to such Loan, may not be
converted into, or continued as, a Term Eurodollar Loan and shall be
automatically converted at the end of such Interest Period into a
Term Alternate Base Loan; and
(vi) no unwaived Default or Event of Default shall have
occurred and be continuing.
The Interest Period applicable to any Eurodollar Loan resulting from
a conversion shall be specified by the Borrowers in the irrevocable notice of
conversion delivered pursuant to this Section; provided, however, that if no
such Interest Period shall be specified, the Borrowers shall be deemed to have
selected an Interest Period of one month's duration; provided, further, that no
such Interest Period may be for more than one month's duration for the period
commencing on the Closing Date and ending on the earlier of (A) the 1 20th day
following the Closing Date and (B) the satisfactory completion by The Chase
Manhattan Bank of the syndication of its Commitment and Loans (as determined by
The Chase Manhattan Bank). If the Borrowers shall not have given timely notice
to continue any Eurodollar Loan into a subsequent Interest Period (and shall not
otherwise have given notice to convert such Loan), such Loan (unless repaid or
required to be repaid pursuant to the terms hereof) shall, subject to (iv) and
(v) above, automatically be converted into an Alternate Base Loan. The Agent
shall promptly advise the Lenders of any notice given pursuant to this Section
and of each Lender's portion of the continuation or conversion hereunder.
SECTION 2.03. Notice of Loans. The Borrowers shall, through a Responsible
Officer of any of the Borrowers, give the Agent irrevocable written, telex or
facsimile notice (promptly confirmed in writing) of each borrowing (including,
without limitation, a conversion as permitted by Section 2.02(e) hereof) not
later than 11:00 a.m., New York City time, (i) three (3) Business Days before a
proposed Eurodollar Loan borrowing or conversion and (ii) on the Business Day of
an Alternate Base Loan borrowing or conversion (except that no such confirmation
will be required, unless requested by the Agent, to the extent that the proceeds
of such borrowing are requested to be disbursed to the Borrowers' controlled
disbursement account(s) maintained with the Agent). Such notice shall specify
(w) whether the Loans then being requested are to be Alternate Base Loans or
Eurodollar Loans, (x) the date of such borrowing (which shall be a Business Day)
and amount thereof and (y) if such Loans are to be Eurodollar Loans, the
Interest Period with respect thereto. If no election as to the type of Loan is
specified in any such notice, all such Loans shall be Alternate Base Loans. If
no Interest Period with respect to any Eurodollar Loan is specified in any such
notice, then an Interest Period of three (3) months' duration shall be deemed
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to have been selected; provided, however, that no such Interest Period may be
for more than one month's duration for the period commencing on the Closing Date
and ending on the earlier of (i) the 120th day following the Closing Date and
(ii) the satisfactory completion by The Chase Manhattan Bank of the syndication
of its Commitment and Loans (as determined by The Chase Manhattan Bank). The
Agent shall promptly advise the Lenders of any notice given pursuant to this
Section 2.03 and of each Lender's portion of the requested borrowing.
SECTION 2.04. Notes: Repayment of Loans. (a) The Term Loan made by a
Lender on the Closing Date shall be evidenced by a single Term Note, duly
executed on behalf of the Borrowers, dated the Closing Date, in substantially
the form of Exhibit A annexed hereto, delivered and payable to such Lender in a
principal amount equal to its Term Loan Commitment on the Closing Date.
(b) All Revolving Credit Loans made by a Lender to the Borrowers shall be
evidenced by a single Revolving Credit Note, duly executed on behalf of the
Borrowers, dated the Closing Date, in substantially the form of Exhibit B
annexed hereto, delivered and payable to such Lender in a principal amount equal
to its Revolving Credit Commitment on such date.
(c) Each Revolving Credit Note shall bear interest from its date on the
outstanding principal balance thereof, as provided in Section 2.05 hereof.
(d) Each Term Note shall bear interest from its date on the outstanding
principal balance thereof, as provided in Section 2.05. All principal payments
in respect of the Term Loan shall be accompanied by accrued interest on the
principal amount being repaid to the date of payment. No scheduled payment of
principal in respect of the Term Loan shall be made to the extent that a lesser
principal payment would result in the payment in full of the outstanding amount
of the Term Loan, and such lesser amount is paid.
(e) Each Lender, or the Agent on its behalf, shall, and is hereby
authorized by the Borrowers to, endorse on the schedule attached to a Term Note
or Revolving Credit Note, as applicable, of such Lender (or on a continuation of
such schedule attached to such Note and made a part thereof) an appropriate
notation evidencing the date and amount of each Loan to the Borrowers from such
Lender, as well as the date and amount of each payment and prepayment with
respect thereto; provided, however, that the failure of any person to make such
a notation on a Note shall not affect any obligations of the Borrowers under
such Note. Any such notation shall be conclusive and binding as to the date and
amount of such Loan or portion thereof, or payment or prepayment of principal or
interest thereon, absent manifest error.
(f) The aggregate principal amount of the Term Loan as evidenced by the
Term Notes, shall be payable in 25 consecutive quarterly installments (the date
of each such installment, a "Repayment Date") in the amounts set forth below,
and such payments shall be distributed ratably among the Lenders in accordance
with their respective Term Loan Commitments:
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Date Payment
---- -------
March 31, 1999, June 30, 1999, September 30, 1999 $312,500
and December 31, 1999
March 31, 2000, June 30, 2000, September 30, 2000 $312,500
and December 31, 2000
March 31, 2001, June 30, 2001, September 30, 2001 $375,000
and December 31, 2001
March 31, 2002, June 30, 2002, September 30, 2002 $375,000
and December 31, 2002
March 31, 2003, June 30, 2003, September 30, 2003 $500,000
and December 31, 2003
March 31, 2004, June 30, 2004, September 30, 2004 $500,000
and December 31, 2004
Final Maturity Date $500,000
To the extent not previously paid, the Term Loan shall be due and payable
on the Final Maturity Date.
(g) Each of the Borrowers shall be jointly and severally liable with the
other Borrower for the Obligations, and each of the Obligations shall be secured
by all of the Collateral. Each of the Borrowers acknowledges that it is a
co-borrower hereunder and is jointly and severally liable under this Agreement
and the other Loan Documents. Al1 Credits extended to any of the Borrowers or
requested by any of the Borrowers shall be deemed to be Credits extended for
each of the Borrowers, and each of the Borrowers hereby authorizes each other of
the Borrowers to effectuate Credits on its behalf. Notwithstanding anything to
the contrary contained in this Agreement or any of the other Loan Documents, the
Agent and the Lenders shall be entitled to rely upon any request, notice or
other communication received by them from any of the Borrowers on behalf of all
Borrowers, and shall be entitled to treat their giving of any notice hereunder
to any of the Borrowers as notice to each and all Borrowers.
Each of the Borrowers agrees that the joint and several liability of the
Borrowers provided for in this subsection (g) shall not be impaired or affected
by any modification, supplement, extension or amendment or any contract or
agreement to which the other Borrower may hereafter agree (other than an
agreement signed by the Agent and the Lenders specifically releasing such
liability), nor by any delay, extension of time, renewal, compromise or other
indulgence granted by the Agent or any Lender with respect to any of the
Obligations, nor by any other agreements or arrangements whatsoever with the
other Borrower or with any other person, each of the Borrowers hereby waiving
all notice of such delay, extension, release, substitution, renewal, compromise
or other
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indulgence, and hereby consenting to be bound thereby as fully and effectually
as if it had expressly agreed thereto in advance. The liability of each of the
Borrowers is direct and unconditional as to all of the Obligations, and may be
enforced without requiring the Agent or any Lender first to resort to any other
right, remedy or security. Each of the Borrowers hereby expressly waives
promptness, diligence, notice of acceptance and any other notice with respect to
any of the Obligations, the Notes, this Agreement or any other Loan Document and
any requirement that the Agent or any Lender protect, secure, perfect or insure
any Lien or any property subject thereto or exhaust any right or take any action
against any of the Borrowers or any other person or any collateral.
Each of the Borrowers hereby irrevocably waives and releases each other of
the Borrowers from all "claims" (as defined in Section 101(5) of the Bankruptcy
Code) to which such Borrowers are or would be entitled by virtue of the
provisions of the first paragraph of this subsection (g) or the performance of
such Borrower's obligations thereunder including, without limitation, any right
of subrogation (whether contractual, under Section 509 of the Bankruptcy Code or
otherwise), reimbursement, contribution, exoneration or similar right, or
indemnity, or any right of recourse to security for any of the Obligations.
SECTION 2.05. Interest on Loans. (a) Subject to the provisions of Section
2.05(c) and Section 2.08 hereof, each Alternate Base Loan shall bear interest at
a rate per annum equal to the Alternate Base Rate plus the applicable Interest
Margin.
(b) Subject to the provisions of Section 2.05(c) and Section 2.08 hereof,
each Eurodollar Loan shall bear interest at a rate per annum equal to the
Adjusted LIBO Rate plus the applicable Interest Margin.
(c) Interest on each Loan shall be payable in arrears on each applicable
Interest Payment Date and on the Final Maturity Date. Interest on each Alternate
Base Loan and Eurodollar Loan shall be computed based on the number of days
elapsed in a year of 360 days. The Agent shall determine each interest rate
applicable to the Loans and shall promptly advise the Borrowers and the Lenders
of the interest rate so determined.
SECTION 2.06. Fees. (a) The Borrowers shall pay each Lender, through the
Agent, (i) on the first Business Day of each January, April, July and October
commencing April 1, 1998, (ii) on the date of any reduction of the Revolving
Credit Commitments pursuant to this Agreement including, without limitation,
Section 2.07 hereof and (iii) on the Revolving Credit Termination Date, in
immediately available funds, a commitment fee (the "Revolving Credit Commitment
Fee") equal to the Unutilized Fee Margin on the average daily unused amount of
the Revolving Credit Commitment of such Lender, during the quarter (or shorter
period commencing with the date hereof or ending with the Revolving Credit
Termination Date in the case of the Revolving Credit Commitment) ending on such
date; provided, however, that with respect to the period January 2, 1998 to the
Closing Date, the Borrowers shall pay to each Lender, through the Agent, on
April 1, 1998, the "Revolving Credit Commitment Fee" under the First Amended
Agreement of 1/2 of 1% per annum on the average daily unused amount of such
Lender's "Revolving Credit Commitment" thereunder. The Revolving Credit
Commitment Fee due to each Lender under this Section 2.06 shall commence to
accrue on the date hereof and cease to accrue on the earlier of (i) the
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Revolving Credit Termination Date and (ii) the termination of the Revolving
Credit Commitment of such Lender pursuant to this Agreement including, without
limitation, pursuant to Section 2.07 hereof. The Revolving Credit Commitment Fee
shall be calculated on the basis of the actual number of days elapsed in a year
of 360 days.
(b) The Borrowers shall pay to the Agent for its own account an
administration fee as follows: (x) $10,000 on the Closing Date for the period
commencing on the Closing Date through and including December 31, 1998 and (y)
thereafter, $25,000 per annum, payable on the first Business Day of each Fiscal
Year prior to the Final Maturity Date, commencing January 2, 1999.
(c) In addition to the fees provided for in subsections (a) and (b) above,
the Borrowers shall pay to the Agent, for the account of the Agent, such other
fees as are provided for in a fee letter, at the times and in the manner set
forth therein.
SECTION 2.07. Termination and Reduction of Revolving Credit Commitments
and Term Loan Commitments. (a) Upon at least three (3) Business Days' prior
irrevocable written notice (or facsimile notice promptly confirmed in writing)
to the Agent, the Borrowers may at any time in whole permanently terminate, or
from time to time in part permanently reduce, the Total Revolving Credit
Commitment, ratably among the Lenders in accordance with the amounts of their
Revolving Credit Commitments; provided, however, that the Total Revolving Credit
Commitment shall not be reduced at any time to an amount less than the Revolving
Credit Loans outstanding under the Revolving Credit Commitments and the Letter
of Credit Usage at such time. Each partial reduction of the Total Revolving
Credit Commitment shall be in a minimum of $500,000 or an integral multiple of
$100,000. (b) Simultaneously with any termination or reduction of the Total
Revolving Credit Commitment pursuant to paragraph (a) of this Section 2.07, the
Borrowers shall pay to each Lender, through the Agent, the Revolving Credit
Commitment Fee due and owing through and including the date of such termination
or reduction on the amount of the Revolving Credit Commitment of such Lender so
terminated or reduced.
SECTION 2.08. Interest on Overdue Amounts: Alternate Rate of Interest. (a)
If the Borrowers shall default in the payment of the principal of or interest on
any Loan or any other amount becoming due hereunder, by acceleration or
otherwise, the Borrowers shall on demand from time to time pay interest, to the
extent permitted by law, on all Obligations outstanding up to the date of actual
payment of such defaulted amount (after as well as before judgment) at a rate
per annum equal to two percent (2%) in excess of the rates otherwise applicable
thereto.
(b) In the event, and on each occasion, that on the day two (2) Business
Days prior to the commencement of any Interest Period for a Eurodollar Loan the
Agent shall have determined that dollar deposits in the amount of each
Eurodollar Loan are not generally available in the London interbank market, or
that the rate at which dollar deposits are being offered will not reflect
adequately and fairly the cost to any Lender of making or maintaining such
Eurodollar Loan during such Interest Period, or that reasonable means do not
exist for ascertaining the Adjusted LIBO Rate, the Agent shall as soon as
practicable thereafter give written notice (or facsimile notice promptly
confirmed in writing) of such
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determination to the Borrowers and the Lenders, and any request by the Borrowers
for the making of a Eurodollar Loan pursuant to Section 2.03 hereof or
conversion or continuation of any Loan into a Eurodollar Loan pursuant to
Section 2.02 hereof shall, until the circumstances giving rise to such notice no
longer exist, be deemed to be a request for an Alternate Base Loan. Each
determination by the Agent made hereunder shall be conclusive absent manifest
error.
SECTION 2.09. Prepayment of Loans. (a) Subject to the terms and conditions
contained in this Section 2.09 and elsewhere in this Agreement, the Borrowers
shall have the right to prepay any Loan at any time in whole or from time to
time in part (except in the case of a Eurodollar Loan only on the last day of an
Interest Period) without penalty (except as otherwise provided for herein);
provided, however, that each such partial prepayment of a Loan shall be in an
integral multiple of $100,000.
(b) On the date of any termination or reduction of the Total Revolving
Credit Commitment pursuant to Section 2.07(a) hereof or elsewhere in this
Agreement, the Borrowers shall pay or prepay so much of the Revolving Credit
Loans as shall be necessary in order that the Availability equals or exceeds
zero following such termination or reduction. Any prepayments required by this
paragraph (b) shall be applied to outstanding Revolving Credit Alternate Base
Loans up to the full amount thereof before they are applied to outstanding
Revolving Credit Eurodollar Loans; provided, however, that the Borrowers shall
not be required to make any prepayment of any Eurodollar Loan pursuant to this
Section until the last day of the Interest Period with respect thereto so !12ng
as an amount equal to such prepayment is deposited by the Borrowers in a cash
collateral account with the Agent to be held in such account on terms
satisfactory to the Agent.
(c) The Borrowers shall make prepayments of the Revolving Credit Loans
from time to time such that the Availability equals or exceeds zero at all
times. Any prepayments required by this paragraph (c) shall be applied to
outstanding Revolving Credit Alternate Base Loans up to the full amount thereof
before they are applied to outstanding Revolving Credit Eurodollar Loans;
provided, however, that the Borrowers shall not be required to make any
prepayment of any Eurodollar Loan pursuant to this Section until the last day of
the Interest Period with respect thereto so long as an amount equal to such
prepayment is deposited by the Borrowers in a cash collateral account with the
Agent to be held in such account on terms satisfactory to the Agent.
(d) Within three days of (i) the sale of any assets subject to Section
7.05 hereof of any Loan Party aggregating for any of the Borrowers or their
subsidiaries in excess of $25,000 in any Fiscal Year (excluding sales of
inventory in the ordinary course of business, Qualified Sales, sales or other
dispositions of obsolete equipment and the license of trademarks and other
intellectual property for fair value in the ordinary course of business to third
parties, or of the capital stock of any of the Borrowers (subject to Section
7.05 hereof or sales of any stock of Holdings (other than to members of the
Investor Group where the proceeds are invested in any of the Borrowers), or (ii)
the consummation of the issuance of any debt securities of any Loan Party (other
than Indebtedness permitted under Section 7.03 (except subsection (viii)
thereof), the Borrowers shall make a mandatory
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prepayment of the Loans in an amount equal to 100% of the cash proceeds (or
non-cash proceeds when converted to cash) received (net of taxes due and any
reasonable expenses of sale), which proceeds shall be applied as set forth in
paragraph (g) below. Nothing contained in this paragraph (d) shall be or be
deemed to be a consent to the sale of any assets or stock or the issuance of any
stock or debt securities.
(e) Within 90 days of the end of each Fiscal Year of Airxcel, commencing
with the Fiscal Year ending December 31, 1998, the Borrowers shall make a
mandatory prepayment of the Loans in an amount equal to the Mandatory Prepayment
for the Fiscal Year then ended, such prepayment to be applied as set forth in
paragraph (9) below.
(f) (i) Except as provided in clause (ii) below, promptly and in any event
not more than two (2) Business Days following the receipt by the Agent or any of
the Borrowers or any subsidiary of any of the Borrowers of any net cash proceeds
of (x) any casualty insurance required to be maintained pursuant to Section 6.03
hereof on account of each separate loss, damage or injury (each, a "Casualty
Event") in excess of $500,000 (or, if there shall be continuing a Default or an
Event of Default, of the full amount of net proceeds) to any asset of such
Borrower or such subsidiary (including, without limitation, any Collateral), or
(y) any business interruption insurance required to be maintained pursuant to
Section 6.03 hereof on account of any business interruption event (each, a "Bl
Event") in excess of $500,000 (or, if there shall be continuing a Default or
Event of Default, of the full amount of net proceeds), such Borrower or
subsidiary shall notify the Agent of such receipt in writing or by telephone
promptly confirmed in writing, and not later than two (2) Business Days
following receipt by the Agent or such Borrower or subsidiary of any such
proceeds, there shall become due and payable a prepayment of the Loans in an
amount equal to 100% of such proceeds. Prepayments from such net proceeds shall
be applied as set forth in paragraph (9) below.
(ii) In the case of the receipt of net cash proceeds described in
clause (i) above with respect to a Casualty Event or Bl Event, the Borrowers may
elect, by written notice delivered to the Agent not later than the day on which
a prepayment would otherwise be required under clause (i), (x) in the case of
proceeds received with respect to a Bl Event, to use such proceeds in the
ordinary course of the Borrowers' business and (y) in the case of proceeds
received with respect to any Casualty Event, to apply all or a portion of such
net proceeds for the purpose of replacing, repairing, restoring or rebuilding
(referred to herein as a "Rebuilding") the relevant tangible property, and, in
any such event, any required prepayment under clause (i) above shall be reduced
dollar for dollar by the amount of such election under clause (x) or clause (y)
of this sentence. An election under this clause (ii) shall not be effective
unless: (x) at the time of such election there is continuing no Default or Event
of Default; (y) the Borrowers shall have certified to the Agent that: (i) the
net proceeds of the insurance adjustment with respect to a Casualty Event,
together with other funds available to the Borrowers, shall be sufficient to
complete such proposed Rebuilding in accordance with all applicable laws,
regulations and ordinances; and (ii) no Default or Event of Default has arisen
or will arise as a result of such Bl Event, Casualty Event or Rebuilding; and
(z) if the amount of net proceeds in question exceeds $500,000, the Borrowers
shall have obtained the written consent of the Required Lenders to such
election.
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(iii) In the event of an election under clause (ii) above, pending
application of the net proceeds to business operations with respect to a Bl
Event or to Rebuilding with respect to a Casualty Event, the Borrowers shall not
later than the time at which prepayment would have been, in the absence of such
election, required under clause (i) above, apply such net proceeds to the
prepayment of the outstanding principal balance, if any, of the Revolving Credit
Loans (not in permanent reduction of the Revolving Credit Commitment), and
deposit (the "Special Deposit") with the Agent, the balance, if any, of such net
proceeds remaining after such application, pursuant to agreements in form, scope
and substance reasonably satisfactory to the Agent. The Special Deposit,
together with all earnings on such Special Deposit, shall be available to the
Borrowers solely for the applicable Rebuilding or ordinary course business
operations, as the case may be; provided, however, that at such time as a
Default or Event of Default shall occur, the balance of the Special Deposit and
earnings thereon may be applied by the Agent to repay the Obligations in such
order as the Agent shall elect. The Agent shall be entitled to require
reasonable proof, as a condition to the making of any withdrawal from the
Special Deposit, that the proceeds of such withdrawal are being applied for the
purposes permitted hereunder.
(g) When making a prepayment, whether mandatory or otherwise, pursuant to
paragraph (a), (b), (c), (d), (e) or (f) above, the Borrowers shall furnish to
the Agent, not later than 11:00 a.m. (New York City time) (i) three (3) Business
Days (or such shorter period of time as provided in the applicable paragraph
above) prior to the date of such prepayment of Alternate Base Loans and (ii)
five (5) Business Days (or such shorter period of time as provided in the
applicable paragraph above) prior to the date of such prepayment of Eurodollar
Loans, written, telex or facsimile notice (promptly confirmed in writing) of
prepayment which shall specify the prepayment date and the principal amount of
each Loan (or portion thereof) to be prepaid, which notice shall be irrevocable
and shall commit the Borrowers to prepay such Loan by the amount stated therein
on the date stated therein. All prepayments shall be accompanied by accrued
interest on the principal amount being prepaid to the date of prepayment.
Prepayments made pursuant to paragraph (d), (e) or (f) above shall be applied as
follows: (A) first, to outstanding Term Alternate Base Loans in the inverse
order of their maturity up to the full amount thereof and then to outstanding
Term Eurodollar Loans in the inverse order of their maturity up to the full
amount thereof; and (B) second, to outstanding Revolving Credit Alternate Base
Loans up to the full amount thereof and then to Revolving Credit Eurodollar
Loans up to the full amount thereof; provided, however, that the Borrowers shall
not be required to make any prepayment of any Term or Revolving Credit
Eurodollar Loan required pursuant to this Section 2.09(g) until the last day of
the Interest Period with respect thereto so ~ as an amount equal to such
prepayment is deposited by the Borrowers into a cash collateral account with the
Agent to be held in such account pursuant to terms satisfactory to the Agent.
(h) All prepayments under this Section 2.09 shall be subject to Section
2.12 hereof.
(i) Except as otherwise expressly provided in this Section 2.09, payments
with respect to any paragraph of this Section 2.09 are in addition to payments
made or required to be made under any other paragraph of this Section 2.09.
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(j) The amount of the Term Loan prepaid may not be reborrowed.
SECTION 2.10. Reserve Requirements: Change in Circumstances.
(a) Notwithstanding any other provision herein, if after the date of this
Agreement (or in the case of any assignee of any Lender, the date of assignment)
any change in applicable law or regulation or in the interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof (whether or not having the force of
law), or any change in GAAP or regulatory accounting principles applicable to
the Agent or any Lender shall: (i) subject the Agent or any Lender (which shall
for the purpose of this Section 2.10 include any assignee or lending office of
the Agent or any Lender) to any charge, fee, deduction or withholding of any
kind or to any tax with respect to any amount paid or to be paid by either the
Agent or any Lender with respect to any Eurodollar Loans made by a Lender to the
Borrowers or with respect to the obligations of any Lender under Sections 2.17
through 2.20 hereof or under any Letter of Credit (other than (x) taxes imposed
on the overall net income of the Agent or such Lender and (y) franchise taxes
imposed on the Agent or such Lender, in either case by the jurisdiction in which
such Lender or the Agent has its principal office or its lending office with
respect to such Eurodollar Loan or any political subdivision or taxing authority
of either thereof); (ii) change the basis of taxation of payments to any Lender
or the Agent of the principal of or interest on any Eurodollar Loan or any other
fees or amounts payable with respect to any Letter of Credit or otherwise
hereunder (other than taxes imposed on the overall net income of such Lender or
the Agent by the jurisdiction in which such Lender or the Agent has its
principal office or by any political subdivision or taxing authority therein);
(iii) impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or loans or
loan commitments extended by, or Letters of Credit issued and maintained by,
such Lender; or (iv) impose on any Lender or, with respect to Eurodollar Loans,
the London interbank market, any other condition affecting this Agreement,
Letters of Credit issued and maintained by or Eurodollar Loans made by such
Lender; and the result of any of the foregoing shall be to increase the cost to
any such Lender of making or maintaining any Eurodollar Loan or Letter of
Credit, or to reduce the amount of any payment (whether of principal, interest,
fee, compensation or otherwise) receivable by such Lender or to require such
Lender to make any payment in respect of any Eurodollar Loan or Letter of
Credit, then the Borrowers shall pay to such Lender or the Agent, as the case
may be, upon such Lender's or the Agent's demand, such additional amount or
amounts as will compensate such Lender or the Agent for such additional costs or
reduction. The Agent and each Lender agree to give notice to the Borrowers of
any such change in law, regulation, interpretation or administration with
reasonable promptness after becoming actually aware thereof and of the
applicability thereof to the Transactions. Notwithstanding anything contained
herein to the contrary, nothing in clause (i) or (ii) of this Section 2.1 O(a)
shall be deemed to (x) permit the Agent or any Lender to recover any amount
thereunder which would not be recoverable under Section 2.15 hereof or (y)
require the Borrowers to make any payment of any amount to the extent that such
payment would duplicate any payment made by the Borrowers pursuant to Section
2.15 hereof.
(b) If at any time and from time to time after the date of this Agreement,
any Lender shall determine that the adoption of any applicable law, rule,
regulation or guideline
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regarding capital adequacy, or any change in any applicable law, rule,
regulation or guideline regarding capital adequacy, including, without
limitation, the July 1988 report of the Basie Committee on Banking Regulations
and Supervisory Practices entitled "International Convergence of Capital
Measurement and Capital Standards", or any change in the interpretation or
administration of any thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by such Lender (or its lending office) with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or will 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 its obligations hereunder
to a level below that which such Lender could have achieved but for such
adoption, change or compliance (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 Borrowers shall pay to such Lender such
additional amount or amounts as will compensate such Lender for such reduction.
Each Lender agrees to give notice to the Borrowers of any adoption of, change
in, or change in interpretation or administration of, any such law, rule,
regulation or guideline with reasonable promptness after becoming actually aware
thereof and of the applicability thereof to the Transactions.
(c) A statement of any Lender or the Agent setting forth such amount or
amounts, supported by calculations in reasonable detail, as shall be necessary
to compensate such Lender (or the Agent) as specified in paragraphs (a) and (b)
above shall be delivered to the Borrowers and shall be conclusive absent
manifest error. The Borrowers shall pay each Lender or the Agent the amount
shown as due on any such statement within ten (10) days after its receipt of the
same.
(d) Failure on the part of any Lender or the Agent to demand compensation
for any increased costs, reduction in amounts received or receivable with
respect to any Interest Period or any Letter of Credit or reduction in the rate
of return earned on such Lender's capital, shall not constitute a waiver of such
Lender's or the Agent's rights to demand compensation for any increased costs or
reduction in amounts received or receivable or reduction in rate of return in
such Interest Period or in any other Interest Period or with respect to such
Letter of Credit. The protection under this Section 2.10 shall be available to
each Lender and the Agent regardless of any possible contention of the
invalidity or inapplicability of any law, regulation or other condition which
shall give rise to any demand by such Lender or the Agent for compensation.
(e) Any Lender claiming any additional amounts payable pursuant to this
Section 2.10 agrees to use reasonable efforts (consistent with legal and
regulatory restrictions) to designate a different Applicable Lending Office if
the making of such a designation would avoid the need for, or reduce the amount
of, any such additional amounts and would not, in the reasonable judgment of
such Lender, be otherwise disadvantageous to such Lender.
SECTION 2.11. Change in Legality. (a) Notwithstanding anything to the
contrary herein contained, if any change in any law or regulation or in the
interpretation thereof by any governmental authority charged with the
administration or interpretation thereof shall
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make it unlawful for any Lender to make or maintain any Eurodollar Loan or to
give effect to its obligations to make Eurodollar Loans as contemplated hereby,
then, by written notice to Borrowers and to the Agent, such Lender may:
(i) declare that Eurodollar Loans will not thereafter be made by such
Lender hereunder, whereupon the Borrowers shall be prohibited from requesting
Eurodollar Loans from such Lender hereunder unless such declaration is
subsequently withdrawn; and
(ii) require that all outstanding Eurodollar Loans made by such Lender be
converted to Alternate Base Loans, in which event (A) all such Eurodollar Loans
shall be automatically converted to Alternate Base Loans as of the effective
date of such notice as provided in paragraph (b) below and (B) all payments of
principal which would otherwise have been applied to repay the converted
Eurodollar Loans shall instead be applied to repay the Alternate Base Loans
resulting from the conversion of such Eurodollar Loans.
(b) For purposes of Section 2.11(a) hereof, a notice to the Borrowers by
any Lender shall be effective, if lawful, on the last day of the then current
Interest Period or, if there are then two or more current Interest Periods, on
the last day of each such Interest Period, respectively; otherwise, such notice
shall be effective with respect to the Borrowers on the date of receipt by the
Borrowers.
SECTION 2.12. Indemnity. The Borrowers shall indemnify the Agent and each
Lender against any loss or reasonable expense (including, but not limited to,
any loss or reasonable expense sustained or incurred or to be sustained or
incurred by reason of or in connection with the execution and delivery or
assignment of, or payment under, any Letter of Credit, or in liquidating or
employing deposits from third parties acquired to affect or maintain any Loan or
part thereof as a Eurodollar Loan) which the Agent or such Lender may sustain or
incur as a consequence of the following events (regardless of whether such
events occur as a result of the occurrence of an Event of Default or the
exercise of any right or remedy of the Agent or the Lenders under this Agreement
or any other agreement, or at law): any failure of the Borrowers to fulfill on
the date of any Credit Event the applicable conditions set forth in Article V
hereof applicable to it; any failure of the Borrowers to borrow hereunder after
irrevocable notice of borrowing pursuant to Section 2.03 hereof has been given;
any payment, prepayment or conversion of a Eurodollar Loan on a date other than
the last day of the relevant Interest Period; any default in payment or
prepayment of the principal amount of any Loan or any part thereof or interest
accrued thereon, or with respect to any Letter of Credit, in each case as and
when due and payable (at the due date thereof, by irrevocable notice of
prepayment or otherwise); or the occurrence of an Event of Default. Such loss or
reasonable expense shall include, without limitation, an amount equal to the
excess, if any, of (i) the amount of interest which would have accrued on the
principal or other amount so paid, prepaid or converted or not borrowed for the
period from the date of such payment, prepayment or conversion or failure to
borrow to, in the case of a Loan, the last day of the Interest Period for such
Loan (or, in the case of a failure to borrow, the Interest Period for such Loan
which would have commenced on the date of such failure to borrow), at the
applicable rate of interest for such Loan provided for herein over (ii) the
amount of interest (as reasonably determined by such Lender) that would be
realized by such Lender in reemploying the funds so paid, prepaid
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or converted or not borrowed for such period or Interest Period, as the case may
be. Any such Lender shall provide to the Borrowers a statement, signed by an
officer of such Lender, explaining any loss or expense and setting forth, if
applicable, the computation pursuant to the preceding sentence, and such
statement shall be conclusive absent manifest error. The Borrowers shall pay
such Lender the amount shown as due on any such statement within ten (10) days
after the receipt of the same. The indemnities contained herein shall survive
the expiration or termination of this Agreement and of the Letters of Credit.
SECTION 2.13. Pro Rata Treatment: Assumption by and Delegation of
Authority to the Agent. (a) Except as permitted under Sections 2.10, 2.11 and
2.15 hereof, each borrowing, each payment or prepayment of principal of the
Notes, each payment of interest on the Notes, each payment of any fee or other
amount payable hereunder and each reduction of the Total Revolving Credit
Commitment and Total Term Loan Commitment shall be made pro rata among the
Lenders in the proportions that their Revolving Credit Commitments bear to the
Total Revolving Credit Commitment or that their Term Loan Commitments bears to
the Total Term Loan Commitment, as the case may be.
(b) Notwithstanding the occurrence or continuance of a Default or Event of
Default or other failure of any condition to the making of Loans or occurrence
of other Credit Events hereunder subsequent to the Credit Events on the Closing
Date, unless the Agent shall have been notified in writing by any Lender in
accordance with the provisions of paragraph (c) below prior to the date of a
proposed Credit Event that such Lender will not make the amount that would
constitute its pro rata share of the applicable Credits on such date available
to the Agent, the Agent may assume that such Lender has made such amount
available to the Agent on such date, and the Agent may, in reliance upon such
assumption, make available to the Borrowers a corresponding amount. If such
amount is made available to the Agent on a date after such Credit Event date,
such Lender shall pay to the Agent on demand an amount equal to the product of
(i) the daily average Federal funds rate during such period as quoted by the
Agent, times (ii) the amount of such Lender's pro rata share of such Credits,
times (iii) a fraction the numerator of which is the number of days that elapse
from and including such Credit Event date to the date on which such Lender's pro
rata share of such Credits shall have become immediately available to the Agent
and the denominator of which is 360. A certificate of the Agent submitted to any
Lender with respect to any amounts owing under this subsection shall be
conclusive in the absence of manifest error. If such Lender's pro rata share of
such Credits is not in fact made available to the Agent by such Lender within
three Business Days of such Credit Event date, the Agent shall be entitled to
recover such amount with interest thereon at the rate per annum applicable to
the Loans hereunder, on demand, from the Borrowers.
(c) Unless and until the Agent shall have received written notice from the
Required Lenders as to the existence of a Default, an Event of Default or some
other circumstance which would relieve the Lenders of their respective
obligations to extend Credits hereunder, which notice shall be in writing and
shall be signed by the Required Lenders and shall expressly state that the
Required Lenders do not intend to make available to the Agent such Lenders'
ratable share of Credits extended after the effective date of such notice, the
Agent shall be entitled to continue to make the assumptions described in Section
2.13(b) above. After receipt of the notice described in the preceding
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sentence, which shall become effective on the third Business Day after receipt
of such notice by the Agent (unless otherwise agreed by the Agent), the Agent
shall be entitled to make the assumptions described in Section 2.13(b) above as
to any Credits as to which it has not received a written notice to the contrary
prior to 11:00 a.m. (New York time) on the Business Day next preceding the day
on which such Credits are to be extended. The Agent shall not be required to
extent any Credits as to which it shall have received notice by a Lender of such
Lender's intention not to make its ratable portion of such Credits available to
the Agent. Any withdrawal of authorization as described under this Section 2.1
3(c) shall not affect the validity of any Credits extended prior to the
effectiveness thereof.
SECTION 2.14. Sharing of Setoffs. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim against
the Borrowers, including, but not limited to, a secured claim under Section 506
of Title 11 of the United States Code or other security or interest arising
from, or in lieu of, such secured claim, received by such Lender under any
applicable bankruptcy, insolvency or other similar law or otherwise, obtain
payment (voluntary or involuntary) in respect of a Note held by it as a result
of which the unpaid principal portion of the Notes held by it shall be
proportionately less than the unpaid principal portion of the Notes held by any
other Lender, it shall be deemed to have simultaneously purchased from such
other Lender a participation in the Notes held by such other Lender, so that the
aggregate unpaid principal amount of the Notes and participations in Notes held
by it shall be in the same proportion to the aggregate unpaid principal amount
of all Notes then outstanding as the principal amount of the Notes held by it
prior to such exercise of banker's lien, setoff or counterclaim was to the
principal amount of all Notes outstanding prior to such exercise of banker's
lien, setoff or counterclaim; provided, however, that if any such purchase or
purchases or adjustments shall be made pursuant to this Section 2.14 and the
payment giving rise thereto shall thereafter be recovered, such purchase or
purchases or adjustments shall be rescinded to the extent of such recovery and
the purchase price or prices or adjustments restored without interest. The
Borrowers expressly consent to the foregoing arrangements and agree that any
Lender holding a participation in a Note deemed to have been so purchased may
exercise any and all rights of banker's lien, setoff or counterclaim with
respect to any and all moneys owing by the Borrowers to such Lender as fully as
if such Lender held a Note in the amount of such participation.
SECTION 2.15. Taxes. (a) Any and all payments by the Borrowers hereunder
shall be made, in accordance with Section 2.16 hereof, free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings in any such case imposed by the United
States or any political subdivision thereof, excluding:
(i) in the case of the Agent and each Lender, taxes imposed or
based on its net income, and franchise or capital taxes imposed on
it, (A) if the Agent or such Lender is organized under the laws of
the United States or any political subdivision thereof and (B) if
the Agent or such Lender is not organized under the laws of the
United States or any political subdivision thereof, and its
principal office or Applicable Lending Office is located in the
United States, and in the case of both (A) and (B), withholding
taxes payable with respect to payments to the Agent or
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such Lender at its principal office or Applicable Lending Office
under laws (including, without limitation, any treaty, ruling,
determination or regulation) in effect on the date hereof, but not
any increase in withholding tax resulting from any subsequent change
in such laws (other than withholding with respect to taxes imposed
or based on its net income or with respect to franchise or capital
taxes), and
(ii) taxes (including withholding taxes) imposed by reason of
the failure of the Agent or any Lender, in either case that is
organized outside the United States, to comply with Section 2.15(f)
hereof (or the inaccuracy at any time of the certificates, documents
and other evidence delivered thereunder)
(all such nonexcluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities being hereinafter referred to as "Taxes"). If the Borrowers
shall be required by law to deduct any Taxes from or in respect of any sum
payable hereunder to the Lenders or the Agent, (x) the sum payable shall be
increased by the amount necessary so that after making all required deductions
(including without limitation deductions applicable to additional sums payable
under this Section 2.15) such Lender or the Agent (as the case may be) receives
an amount equal to the sum it would have received had no such deductions been
made, (y) the Borrowers shall make such deductions and (z) the Borrowers shall
pay the full amount deducted to the relevant tax authority or other authority in
accordance with applicable law.
(b) In addition, the Borrowers agree to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement
(hereinafter referred to as "Other Taxes").
(c) The Borrowers will indemnify each Lender and the Agent for the full
amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed by any jurisdiction (except as specified in clauses (a)(i)
and (ii)) on amounts payable under this Section 2.15) paid by such Lender or the
Agent (as the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto. This indemnification shall
be made within 30 days from the date such Lender or the Agent (as the case may
be) makes written demand therefor. If any Lender receives a refund in respect of
any Taxes or Other Taxes for which such Lender has received payment from the
Borrowers hereunder, such Lender shall promptly notify the Borrowers of such
refund and such Lender shall, within 30 days of receipt of a request by the
Borrowers, repay such refund to the Borrowers, provided that the Borrowers, upon
the request of such Lender, agree to return such refund (plus any penalties,
interest or other charges) to such Lender in the event such Lender is required
to repay such refund.
(d) Within 30 days after the date of any payment of Taxes or Other Taxes
withheld by the Borrowers in respect of any payment to any Lender, the Borrowers
will furnish to the Agent, at its address referred to in Section 11.01 hereof,
such certificates, receipts and other documents as may be reasonably required to
evidence payment thereof.
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(e) Without prejudice to the survival of any other agreement hereunder,
the agreements and obligations contained in this Section 2.15 shall survive the
payment in full of principal and interest hereunder.
(f) Each Lender that is organized outside of the United States shall
deliver to the Borrowers on the date hereof (or, in the case of an assignee, on
the date of the assignment) and from time to time as required for renewal under
applicable law duly completed copies of United States Internal Revenue Service
Form 1001 or 4224 (or any successor or additional forms), as appropriate,
indicating in each case that such Lender is entitled to receive payments under
this Agreement without any deduction or withholding of any United States federal
income taxes. The Agent (if the Agent is an entity organized outside the United
States) and each Lender that is organized outside the United States shall
promptly notify the Borrowers and the Agent of any change in its Applicable
Lending Office and upon written request of the Borrowers such Lender shall,
prior to the immediately following due date of any payment by the Borrowers or
any Guarantor hereunder or under any other Loan Document, deliver to the
Borrowers or such Guarantor, as the case may be (with copies to the Agent), such
certificates, documents or other evidence, as required by the Code or Treasury
Regulations issued pursuant thereto, including without limitation Internal
Revenue Service Form 4224, Form 1001 and any other certificate or statement of
exemption required by Treasury Regulation Section 1.1441-4(a) or Section
1.1441-6(c) or any subsequent version thereof, properly completed and duly
executed by such Lender establishing that such payment is (i) not subject to
withholding under the Code because such payment is effectively connected with
the conduct by such Lender of a trade or business in the United States or (ii)
totally exempt from United States tax under a provision of an applicable tax
treaty. The Borrowers shall be entitled to rely on such forms in their
possession until receipt of any revised or successor form pursuant to this
Section 2.1 5(f). If the Agent or a Lender fails to provide a certificate,
document or other evidence required pursuant to this Section 2.15(f), then (i)
the Borrowers shall be entitled to deduct or withhold on payments to the Agent
or such Lender as a result of such failure, as required by law, and (ii) the
Borrowers shall not be required to make payments of additional amounts with
respect to such withheld Taxes pursuant to clause (x) of Section 2.15(a) to the
extent such withholding is required solely by reason of the failure of the Agent
or such Lender to provide the necessary certificate, document or other evidence.
(g) Each Lender and the Agent shall use reasonable efforts to avoid or
minimize any amounts which might otherwise be payable pursuant to this
subsection 2.15 (including seeking refunds of any amounts that are reasonably
believed not to have been correctly or legally asserted); provided, however,
that such efforts shall not include the taking of any actions by such Lender or
the Agent that would result in any tax, costs or other expense to such Lender or
the Agent (other than a tax, cost or other expense for which such Lender or the
Agent shall have been reimbursed or indemnified by the Borrowers pursuant to
this Agreement or otherwise) or any action which would or might in the
reasonable opinion of such Lender or the Agent have an adverse effect upon its
business, operations or financial condition or otherwise be disadvantageous to
such Lender or the Agent.
SECTION 2.16. Payments and Computations. (a) The Borrowers shall make each
payment hereunder and under any instrument delivered hereunder not later than
12:00
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noon (New York City time) on the day when due in lawful money of the United
States (in freely transferable dollars) to the Agent at its offices at 000 Xxxxx
Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 for the account of the Lenders, in
immediately available funds. The Agent may charge, when due and payable, the
Borrowers' account(s) with the Agent for all interest, principal and Commitment
Fees or other fees owing to the Agent or the Lenders on or with respect to this
Agreement and/or the Loans and other Loan Documents. If at any time there is not
sufficient Availability to cover any of the payments referred to in the prior
sentence, and in any event upon the occurrence of any Default, the Borrowers
shall make any such payments upon demand.
(b) If the Agent pays an amount to a Lender under this Agreement in the
belief or expectation that a related payment has been or will be received by the
Agent from the Borrowers and such related payment is not received by the Agent,
then the Agent will be entitled to recover such amount from such Lender without
setoff, counterclaim or deduction of any kind. If the Agent determines at any
time that any amount received by the Agent under this Agreement must be returned
to the Borrowers or paid to any other person pursuant to any solvency law or
otherwise, then, notwithstanding any other term or condition of this Agreement,
the Agent will not be required to distribute any portion thereof to any Lender.
In addition, each Lender will repay to the Agent on demand any portion of such
amount that the Agent has distributed to such Lender, together with interest at
such rate, if any, as the Agent is required to pay to the Borrowers or such
other person, without setoff, counterclaim or deduction of any kind.
SECTION 2.17. Issuance of Letters of Credit. Upon the request of the
Borrowers, and subject to the conditions set forth in Article V hereof and such
other conditions to the opening of Letters of Credit as the Agent requires of
its customers generally, the Agent shall from time to time open commercial and
standby letters of credit (each, a "Letter of Credit") for the account of the
Borrowers, the aggregate undrawn amount of all outstanding Letters of Credit not
at any time to exceed $500,000; provided, however, that the Borrowers may not
request the Agent to open a Letter of Credit if after giving effect thereto
(measured by the face amount of such Letter of Credit) Availability would be
less than zero. The issuance of each Letter of Credit shall be made on at least
three (3) Business Days' prior written notice from the Borrowers to the Agent,
at its Domestic Lending Office, which written notice shall be an application for
a Letter of Credit on the Agent's customary form completed to the satisfaction
of the Agent, together with the proposed form of the Letter of Credit (which
shall be satisfactory to the Agent) and such other certificates, documents and
other papers and information as the Agent may reasonably request. The Agent
shall not at any time be obligated to issue any Letter of Credit if such
issuance would conflict with, or cause the Agent or any Lender to exceed any
limits imposed by, any applicable requirements of law. The expiration date of
any (i) commercial Letter of Credit shall not be later than 90 days from the
date of issuance thereof and (ii) any standby Letter of Credit shall not be
later than 360 days from the date of issuance thereof, and, in any event, no
Letter of Credit shall have an expiration date later than the Revolving Credit
Termination Date. The Letters of Credit shall be issued with respect of
transactions occurring in the ordinary course of business of the Borrowers.
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SECTION 2.18. Payment of Letters of Credit: Reimbursement. Upon the
issuance of any Letter of Credit, the Agent shall notify each Lender of the
principal amount, the number, and the expiration date thereof and the amount of
such Lender's participation therein. By the issuance of a Letter of Credit
hereunder and without further action on the part of the Agent or the Lenders,
each Lender hereby accepts from the Agent a participation (which participation
shall be no recourse to the Agent) in such Letter of Credit equal to such
Lender's pro rata (based on its Revolving Credit Commitment) share of such
Letter of Credit, effective upon the issuance of such Letter of Credit. Each
Lender hereby absolutely and unconditionally assumes, as primary obligor and not
as a surety, and agrees to pay and discharge, and to indemnify and hold the
Agent harmless from liability in respect of, such Lender's pro rata share of the
amount of any drawing under a Letter of Credit. Each Lender acknowledges and
agrees that its obligation to acquire participations in each Letter of Credit
issued by the Agent and its obligation to make the payments specified herein,
and the right of the Agent to receive the same, in the manner specified herein,
are absolute and unconditional and shall not be affected by any circumstance
whatsoever, including, without limitation, the occurrence and continuance of a
Default or an Event of Default hereunder, and that each such payment shall be
made without any offset, abatement, withholding or reduction whatsoever. The
Agent shall review, on behalf of the Lenders, each draft and any accompanying
documents presented under a Letter of Credit and shall notify each Lender of any
such presentment. Promptly after it shall have ascertained that any draft and
any accompanying documents presented under such Letter of Credit appear on their
face to be in substantial conformity with the terms and conditions of the Letter
of Credit, the Agent shall give telephonic or facsimile notice to the Lenders
and the Borrowers of the receipt and amount of such draft and the date on which
payment thereon will be made, and the Lenders shall, by 11:00 a.m., New York
City time on the date such payment is to be made, pay the amounts required to
the Agent in New York, New York in immediately available funds, and the Agent,
not later than 3:00 p.m. on such day, shall make the appropriate payment to the
beneficiary of such Letter of Credit. If in accordance with the prior sentence
the Lenders shall pay any draft presented under a Letter of Credit, then the
Agent, on behalf of the Lenders, shall charge the general deposit account of the
Borrowers with the Agent for the amount thereof, together with the Agent's
customary overdraft fee in the event the funds available in such account shall
not be sufficient to reimburse the Lenders for such payment and the Borrowers
shall not otherwise have discharged such reimbursement obligation by 11:00 a.m.,
New York City time, on the date of such payment. If the Lenders have not been
reimbursed with respect to such drawing as provided above, the Borrowers shall
pay to the Agent, for the account of the Lenders, the amount of the drawing
together with interest on such amount at a rate per annum (computed on the basis
of the actual number of days elapsed over a year of 360 days) equal to the
Alternate Base Rate plus two percent (2%), payable on demand. The obligations of
the Borrowers under this Section 2.18 to reimburse the Lenders and the Agent for
all drawings under Letters of Credit shall be joint and several, absolute,
unconditional and irrevocable and shall be satisfied strictly in accordance with
their terms, irrespective of:
(a) any lack of validity or enforceability of any Letter of Credit;
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(b) the existence of any claim, setoff, defense or other right which
the Borrowers or any other person may at any time have against the
beneficiary under any Letter of Credit, the Agent or any Lender (other
than the defense of payment in accordance with the terms of this Agreement
or a defense based on the gross negligence or willful misconduct of the
Agent or any Lender) or any other person in connection with this Agreement
or any other transaction;
(c) any draft or other document presented under any Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect;
(d) payment by the Agent or any Lender under any Letter of Credit
against presentation of a draft or other document which does not comply
with the terms of such Letter of Credit; and
(e) any other circumstance or event whatsoever, whether or not
similar to any of the foregoing.
It is understood that in making any payment under any Letter of Credit (x)
the Agent's and any Lender's exclusive reliance on the documents presented to it
under such Letter of Credit as to any and all matters set forth therein,
including, without limitation, reliance on the amount of any draft presented
under such Letter of Credit, whether or not the amount due to the beneficiary
equals the amount of such draft and whether or not any document presented
pursuant to such Letter of Credit proves to be insufficient in any respect, if
such document on its face appears to be in order, and whether or not any other
statement or any other document presented pursuant to such Letter of Credit
proves to be forged or invalid or any statement therein proves to be inaccurate
or untrue in any respect whatsoever and (y) any noncompliance in any immaterial
respect of the documents presented under such Letter of Credit with the terms
thereof shall, in each case, not be deemed willful misconduct or gross
negligence of the Agent or any Lender.
SECTION 2.19. Agent's Actions with respect to Letters of Credit. Any
Letter of Credit may, in the discretion of the Agent or its correspondents, be
interpreted by them (to the extent not inconsistent with such Letter of Credit)
in accordance with the Uniform Customs and Practice for Documentary Credits of
the International Chamber of Commerce, as adopted or amended from time to time,
or any other rules, regulations and customs prevailing at the place where any
Letter of Credit is available or the drafts are drawn or negotiated. The Agent
and its correspondents may accept and act upon the name, signature, or act of
any party purporting to be the executor, administrator, receiver, trustee in
bankruptcy, or other legal representative of any party designated in any Letter
of Credit in the place of the name, signature, or act of such party.
SECTION 2.20. Letter of Credit Fees. The Borrowers agree to pay to the
Agent (a) with respect to each commercial Letter of Credit, (i) for the ratable
benefit of the Lenders, a letter of credit fee equal to the Interest Margin
applicable to Eurodollar Loans from time to time of the face amount thereof per
annum payable to the Agent at its Domestic Lending Office quarterly in advance
in immediately available funds, and (ii) an issuance fee and
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other related fees charged by the Agent for transactions of this nature and, if
applicable, an amendment fee, in each case payable to the Agent for its own
account at its Domestic Lending Office on the date of issuance or amendment, as
applicable, of such Letter of Credit in immediately available funds in
accordance with Schedule 2.20 hereto and (b) with respect to standby Letters of
Credit, (i) for the ratable benefit of the Lenders, a letter of credit fee equal
to the Interest Margin applicable to Eurodollar Loans from time to time of the
face amount thereof per annum payable to the Agent at its Domestic Lending
Office quarterly in advance in immediately available funds, plus (ii) an
issuance fee charged by the Agent for transactions of this nature and, if
applicable, an amendment fee, in each case payable to the Agent for its own
account at its Domestic Lending Office on the date of issuance or amendment, as
applicable, of such Letter of Credit in immediately available funds in
accordance with Schedule 2.20 hereto. The Agent shall disburse to each Lender
such Lender's pro rata share of any payment of the Letter of Credit fees
referred to in clauses (a)(i) and (b)(i) of the first sentence of this paragraph
in immediately available funds within two (2) Business Days of the Agent's
receipt of such payment.
III. COLLATERAL SECURITY
SECTION 3.01. Security Documents. The Obligations shall be secured by the
Collateral described in the Security Documents and are entitled to the benefits
thereof. The Borrowers shall duly execute and deliver the Security Documents,
all consents of third parties necessary to permit the effective granting of the
Liens created in such agreements, financing statements pursuant to the Uniform
Commercial Code and other documents, all in form and substance satisfactory to
the Agent, as may be reasonably required by the Agent to grant to the Lenders a
valid, perfected and enforceable first priority Lien on and security interest in
(subject only to the Liens permitted under Section 7.01 hereof) the Collateral,
except to the extent permitted by the Security Documents.
SECTION 3.02. Filing and Recording. The Borrowers shall, at their sole
cost and expense, cause all instruments and documents given as evidence of
security pursuant to this Agreement to be duly recorded and/or filed or
otherwise perfected in all places necessary, in the opinion of the Agent, and
take such other actions as the Agent may reasonably request, in order to perfect
and protect the Liens of the Agent and Lenders in the Collateral. The Borrowers,
to the extent permitted by law, hereby authorize the Agent to file any financing
statement in respect of any Lien created pursuant to the Security Documents
which may at any time be required or which, in the opinion of the Agent, may at
any time be desirable although the same may have been executed only by the Agent
or, at the option of the Agent, to sign such financing statement on behalf of
the Borrowers and file the same, and the Borrowers hereby irrevocably designate
the Agent, its agents, representatives and designees as their agent and
attorney-in-fact for this purpose. In the event that any re-recording or
refiling thereof (or the filing of any statements of continuation or assignment
of any financing statement) is required to protect and preserve such Lien, the
Borrowers shall, at the Borrowers' cost and expense, cause the same to be
recorded and/or refiled at the time and in the manner requested by the Agent.
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IV. REPRESENTATIONS AND WARRANTIES
Each of the Borrowers represents and warrants to each of the Lenders that
both before and after giving effect to the consummation of the Transactions
(including, without limitation, under the Acquisition Documents):
SECTION 4.01. Organization. Legal Existence. Each of the Borrowers and
their subsidiaries is a legal entity duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, has the
requisite power and authority to own its property and assets and to carry on its
business as now conducted and as currently proposed to be conducted and is
qualified to do business in every jurisdiction where such qualification is
required, except where the failure to so qualify would not have a Material
Adverse Effect (all such jurisdictions being listed in Schedule 4.01 annexed
hereto). Each of the Borrowers has the corporate power to execute, deliver and
perform its obligations under this Agreement and the other Loan Documents to
which it is a party, and to borrow hereunder and to execute and deliver the
Notes.
SECTION 4.02. Authorization. The execution, delivery and performance by
each of the Borrowers of this Agreement and each of the other Loan Documents to
which it is a party, the borrowings hereunder by the Borrowers, the execution
and delivery by the Borrowers of the Notes, the grant of security interests in
the Collateral created by the Security Documents and the transactions
contemplated to occur under or in connection with the Acquisition Documents
(collectively, the "Transactions") (a) have been duly authorized by all
requisite corporate and, if required, stockholder action and (b) will not (i)
violate (A) any provision of law, statute, rule or regulation or the certificate
or articles of incorporation or other applicable constitutive documents or the
by-laws of the Borrowers, or their respective subsidiaries, as the case may be,
(B) any order of any court, or any rule, regulation or order of any other agency
of government binding upon the Borrowers, or their respective subsidiaries, or
(C) any provisions of any material indenture, agreement or other instrument to
which the Borrowers, or their respective subsidiaries, or any of their
respective properties or assets are or may be bound (which violation would not
have a Material Adverse Effect), (ii) be in conflict with, result in a breach of
or constitute (alone or with notice or lapse of time or both) a default under
any material indenture, agreement or other instrument referred to in (b)(i)(C)
above (which conflict, breach or default would have a Material Adverse Effect)
or (iii) result in the creation or imposition of any Lien of any nature
whatsoever (other than in favor of the Agent, for its own benefit and for the
benefit of the Lenders, as contemplated by this Agreement and the Security
Documents) upon any property or assets of the Borrowers, or their respective
subsidiaries.
SECTION 4.03. Governmental Approvals. No registration or filing (other
than the filings necessary to perfect the Liens created by the Security
Documents) with consent or approval of, or other action by, any Federal, state
or other governmental agency, authority or regulatory body is or will be
required in connection with the Transactions, other than any which have been
made or obtained or will be made or obtained.
SECTION 4.04. Binding Effect. This Agreement and each of the other Loan
Documents to which it is a party constitutes, and each of the Notes when duly
executed
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and delivered will constitute, a legal, valid and binding obligation of the
Borrowers enforceable in accordance with its terms, subject to the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and the application of general principles
of equity.
SECTION 4.05. Material Adverse Change. Except as set forth in Schedule
4.05 annexed hereto, there has been no material adverse change in the business,
assets, operations or financial condition of any Borrower or any of their
respective subsidiaries since December 31, 1996 or with respect to the Crispaire
Corporation since October 31, 1996 or with respect to SMC since April 30, 1997.
SECTION 4.06. Litigation: Compliance with Laws: etc. (a) Except as set
forth in Schedule 4.06(a) annexed hereto, there are not any actions, suits or
proceedings at law or in equity or by or before any governmental instrumentality
or other agency or regulatory authority now pending or, to the knowledge of any
Responsible Officer of any Borrower, threatened against or affecting any of the
Borrowers or any of their subsidiaries or the businesses, assets or rights of
any of the Borrowers or any of their subsidiaries (i) which involve any of the
Transactions or (ii) as to which it is probable (within the meaning of Statement
of Financial Accounting Standards No. 5) that there will be an adverse
determination and which, if adversely determined, would, individually or in the
aggregate, materially impair the ability of any of the Borrowers to conduct
business substantially as now conducted, or have a Material Adverse Effect.
(b) Except as set forth in Schedule 4.06(b) annexed hereto, no Borrower or
subsidiary thereof is in violation of any law, or in default with respect to any
judgment, writ, injunction, decree, rule or regulation of any court or
governmental agency or instrumentality, except where such non-compliance, either
individually or in the aggregate, would not have a Material Adverse Effect.
SECTION 4.07. Financial Statements. (a) The Borrowers have heretofore
furnished to the Agent Consolidated balance sheets and statements of income and
cash flows of SMC's subsidiary prior to the Closing Date, Suburban Manufacturing
Company, as of the fiscal years ended April 30, 1995, 1996 and 1997 (audited by
and accompanied by the opinion of independent public accountants) and November
30, 1997 (unaudited for the seven-month period ended on such date). Such balance
sheets and statements of income and cash flows present fairly the Consolidated
financial condition and results of operations of Suburban Manufacturing Company
as of the dates and for the periods indicated, and such balance sheets and the
notes thereto disclose all material liabilities, direct or contingent, of
Suburban Manufacturing Company, as of the dates thereof.
(b) The Borrowers have heretofore furnished to the Agent projected income
statements, balance sheets and cash flows of the Borrowers on a Consolidated
basis on a quarterly basis for the Fiscal Years ending December 31, 1998 and
December 31, 1999 and on an annual basis thereafter through the Final Maturity
Date, together with a schedule confirming the ability of the Borrowers to
consummate the Transactions and demonstrating prospective compliance with all
financial covenants contained in this Agreement, such projections disclosing all
assumptions made by the Borrowers in formulating such
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projections and giving effect to the Transactions. The projections are based
upon reasonable estimates and assumptions, all of which are reasonable in light
of the conditions which existed at the time the projections were made, have been
prepared on the basis of the assumptions stated therein, and reflect as of the
Closing Date the reasonable estimate of the Borrowers of the results of
operations and other information projected therein.
(c) The Borrowers have heretofore furnished to the Agent a Consolidated
pro forma balance sheet of the Borrowers and which sets forth information before
and after giving effect to the Transactions.
(d) The financial statements referred to in this Section 4.07 have been
prepared in accordance with GAAP.
SECTION 4.08. Federal Reserve Regulations. (a) No Borrower or subsidiary
thereof is engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or carrying Margin
Stock.
(b) No part of the proceeds of the Loans will be used, whether directly or
indirectly, and whether immediately, incidentally or ultimately, (i) to purchase
or carry Margin Stock or to extend credit to others for the purpose of
purchasing or carrying Margin Stock or to refund indebtedness originally
incurred for such purpose, or (ii) for any purpose which entails a violation of,
or which is inconsistent with, the provisions of the Regulations of the Board,
including, without limitation, Regulation G, T, U or X thereof. If requested by
any Lender, the Borrowers or any subsidiary of any thereof shall furnish to such
Lender a statement on Federal Reserve Form U-1 referred to in said Regulation .
SECTION 4.09. Taxes. The Borrowers and each of their respective
subsidiaries have filed or caused to be filed all Federal, state, local and
foreign tax returns which are required to be filed by them, on or prior to the
date hereof, other than tax returns in respect of taxes that (x) are not
franchise, capital or income taxes, (y) in the aggregate are not material and
(z) would not, if unpaid, result in the imposition of any material Lien on any
property or assets of any Borrower or any of their subsidiaries. Each Borrower
and each of their respective subsidiaries has paid or caused to be paid all
taxes shown to be due and payable on such filed returns or on any assessments
received by it, other than (i) any taxes or assessments the validity of which
such Borrower or such subsidiary is contesting in good faith by appropriate
proceedings, and with respect to which such Borrower or such subsidiary shall,
to the extent required by GAAP have set aside on its books adequate reserves and
(ii) taxes other than income, capital or franchise taxes that in the aggregate
are not material and which would not, if unpaid, result in the imposition of any
material Lien on any property or assets of any Borrower or any of their
respective subsidiaries. No Federal income tax returns of any Borrower or any of
their subsidiaries have been audited by the United States Internal Revenue
Service and no Borrower or subsidiary thereof has as of the date hereof
requested or been granted any extension of time to file any Federal, state,
local or foreign tax return.
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SECTION 4.10. Employee Benefit Plans. With respect to the provisions of
ERISA:
(i) No Reportable Event has occurred or is continuing with respect to any
Pension Plan.
(ii) No prohibited transaction (within the meaning of Section 406 of ERISA
or Section 4975 of the Code) has occurred with respect to any Plan subject to
Part 4 of Subtitle B of Title I of ERISA.
(iii) None of the Borrowers or any ERISA Affiliate is now, or has been
during the preceding five years, obligated to contribute to a Pension Plan or a
Multiemployer Plan. None of the Borrowers or any ERISA Affiliate has (A) ceased
operations at a facility so as to become subject to the provisions of Section
4062(e) of ERISA, (B) withdrawn as a substantial employer so as to become
subject to the provisions of Section 4063 of ERISA, (C) ceased making
contributions to any Pension Plan subject to the provisions of Section 4064(a)
of ERISA to which the Borrowers, any subsidiary or any ERISA Affiliate made
contributions, (D) incurred or caused to occur a "complete withdrawal" (within
the meaning of Section 4203 of ERISA) or a "partial withdrawal" (within the
meaning of Section 4205 of ERISA) from a Multiemployer Plan that is a Pension
Plan so as to incur withdrawal liability under Section 4201 of ERISA (without
regard to subsequent reduction or waiver of such liability under Section 4207 or
4208 of ERISA), or (E) been a party to any transaction or agreement under which
the provisions of Section 4204 of ERISA were applicable.
(iv) No notice of intent to terminate a Pension Plan has been filed, nor
has any Plan been terminated pursuant to the provisions of Section 4041 (e) of
ERISA.
(v) The PBGC has not instituted proceedings to terminate (or appoint a
trustee to administer) a Pension Plan and no event has occurred or condition
exists which might constitute grounds under the provisions of Section 4042 of
ERISA for the termination of (or the appointment of a trustee to administer) any
such Plan.
(vi) With respect to each Pension Plan that is subject to the provisions
of Title I, Subtitle B, Part 3 of ERISA, the funding method used in connection
with such Plan is acceptable under ERISA, and the actuarial assumptions and
methods used in connection with funding such Pension Plan satisfy the
requirements of Section 302 of ERISA. The assets of each such Pension Plan
(other than the Multiemployer Plans) are at least equal to the present value of
the greater of (i) accrued benefits (both vested and non-vested) under such
Plan, or (ii) "benefit liabilities" (within the meaning of Section 4001(a)(16)
of ERISA) under such Plan, in each case as of the latest actuarial valuation
date for such Plan (determined in accordance with the same actuarial assumptions
and methods as those used by the Plan's actuary in its valuation of such Plan as
of such valuation date). No such Pension Plan has incurred any "accumulated
funding deficiency" (as defined in Section 412 of the Code), whether or not
waived.
(vii) There are no actions, suits or claims pending (other than routine
claims for benefits) or, to the knowledge of the Borrowers or any ERISA
Affiliate, which could
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reasonably be expected to be asserted, against any Plan or the assets of any
such Plan. No civil or criminal action brought pursuant to the provisions of
Title I, Subtitle B, Part 5 of ERISA is pending or threatened against any
fiduciary or any Plan. None of the Plans or any fiduciary thereof (in its
capacity as such) has been the direct or indirect subject of any audit,
investigation or examination by any governmental or quasi-governmental agency.
(viii) All of the Plans comply in all material respects currently, and
have complied in the past, both as to form and operation, with their terms and
with the provisions of ERISA and the Code, and all other applicable laws, rules
and regulations; all necessary governmental approvals for the Plans have been
obtained and a favorable determination as to the qualification under Section 401
(a) of the Code of each of the Plans which is an employee pension benefit plan
(within the meaning of Section 3(2) of ERISA) has been made by the Internal
Revenue Service and a recognition of exemption from federal income taxation
under Section 501 (c) of the Code of each of the funded employee welfare benefit
plans (within the meaning of Section 3(1) of ERISA) has been made by the
Internal Revenue Service, and nothing has occurred since the date of each such
determination or recognition letter that would adversely affect such
qualification.
SECTION 4.11. No Material Misstatements. No information, report, financial
statement, exhibit or schedule prepared or furnished by or on behalf of the
Borrowers to the Agent or any Lender in connection with any of the Transactions
or this Agreement, the Security Documents, the Notes or any other Loan Documents
or included therein contained or contains any material misstatement of fact or
omitted or omits to state any material fact known to the Borrowers necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
SECTION 4.12. Investment Company Act: Public Utility Holding Company Act.
No Borrower or subsidiary thereof is an "investment company" as defined in, or
is otherwise subject to regulation under, the Investment Company Act of 1940. No
Borrower or subsidiary thereof is a "holding company" as that term is defined in
or is otherwise subject to regulation under, the Public Utility Holding Company
Act of 1935.
SECTION 4.13. Security Interest. Each of the Security Documents creates
and grants to the Agent, for its own benefit and for the benefit of the Lenders,
a security interest in the Collateral identified therein and, upon the due
filing of the financing statements, the due filing and recording of assignments
for security in the United States Patent and Trademark Office, the Canadian
Patent Office and the Canadian Trademarks Office and the delivery to the Agent
of the Pledged Stock, will grant to the Agent, for its own benefit and for the
benefit of the Lenders, a legal, valid and perfected first (except as permitted
pursuant to Section 7.01 hereof) priority security interest in the collateral
identified therein, except to the extent permitted by such Security Documents.
Such collateral or property is not subject to any other Liens whatsoever, except
Liens permitted by Section 7.01 hereof and except where releases of such Liens
have been delivered to the Agent.
SECTION 4.14. Use of Proceeds. (a) All proceeds of the borrowing under the
Total Term Loan Commitment shall be used to partially finance the consideration
required under the Acquisition Agreement.
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(b) All proceeds of each borrowing under the Revolving Credit Commitment
on the Closing Date, if any, shall be used to partially finance the acquisition
of SMC. All proceeds of each subsequent borrowing under the Revolving Credit
Commitment after the Closing Date shall be used to provide for working capital
and general corporate purposes of the Borrowers.
SECTION 4.15. Subsidiaries. As of the Closing Date, Schedule 4.15 annexed
hereto sets forth each subsidiary of each Borrower, its jurisdiction of
incorporation, its capitalization and ownership of capital stock of each such
subsidiary.
SECTION 4.16. Title to Properties: Possession Under Leases: Trademarks.
(a) Each of the Borrowers and each subsidiary has good and marketable title to,
or valid leasehold interest in, all of their respective properties and assets
shown on the most recent balance sheet referred to in Section 4.07(a) hereof and
all assets and properties acquired since the date of such balance sheet, except
for such properties as are no longer used or useful in the conduct of its
business or as have been disposed of in the ordinary course of business, and
except as set forth on Schedule 4.16(a) annexed hereto and for minor defects in
title, which scheduled defects do not interfere with the ability of any Borrower
or any subsidiary thereof to conduct its business as now conducted. All such
assets and properties are free and clear of all Liens other than those permitted
by Section 7.01 or as described on Schedule 4.16(a) hereto.
(b) Each Borrower and each subsidiary has complied with all material
obligations under all leases to which they are a party and under which they are
in occupancy, and all such leases are in full force and effect and each of the
Borrowers and each subsidiary enjoys peaceful and undisturbed possession under
all such leases.
(c) Each Borrower and each subsidiary owns or has a valid license to use
all material trademarks, trademark rights, trade names, trade name rights,
copyrights, patents and patent rights which are necessary for the conduct of the
business of such Borrower and such subsidiary. No Borrower nor any subsidiary
thereof is infringing upon or otherwise acting adversely to any of such
trademarks, trademark rights, trade names, trade name rights, copyrights, patent
rights or licenses owned by any other person or persons, which infringements or
actions could reasonably be expected to have a Material Adverse Effect. Except
as set forth in Schedule 4.16(c) annexed hereto, there is no claim or action by
any such other person pending, or to the knowledge of any Responsible Officer of
any Borrower or any subsidiary thereof, threatened, against the Borrowers or any
subsidiary thereof with respect to any of the rights or property referred to in
this Section 4.1 6(c).
SECTION 4.17. Solvency. (a) The fair salable value of the assets of each
Borrower and its Consolidated subsidiaries is not less than the amount that will
be required to be paid on or in respect of the probable liability on the
existing debts and other liabilities (including contingent liabilities) of such
Borrower and its Consolidated subsidiaries, as they become absolute and mature.
(b) The assets of each Borrower and its Consolidated subsidiaries do not
constitute unreasonably small capital for such Borrower and its Consolidated
subsidiaries
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to carry out their business as now conducted and as proposed to be conducted
including the capital needs of such Borrower and its Consolidated subsidiaries,
taking into account the particular capital requirements of the business
conducted by such Borrower and its Consolidated subsidiaries and projected
capital requirements and capital availability thereof.
(c) No Borrower nor any subsidiary thereof intends to incur debts beyond
its ability to pay such debts as they mature (taking into account the timing and
amounts of cash to be received by such Borrower and such subsidiary, and of
amounts to be payable on or in respect of debt of such Borrower and such
subsidiary). The cash flow of each Borrower and its Consolidated subsidiaries,
after taking into account all anticipated uses of the cash of such Borrower and
its Consolidated subsidiaries, will at all times be sufficient to pay all such
amounts on or in respect of debt of such Borrower and its Consolidated
subsidiaries when such amounts are required to be paid.
(d) No Borrower nor any subsidiary thereof believes that final judgments
against it in actions for money damages presently pending will be rendered at a
time when, or in an amount such that, it will be unable to satisfy any such
judgments promptly in accordance with their terms (taking into account the
maximum reasonable amount of such judgments in any such actions and the earliest
reasonable time at which such judgments might be rendered). The cash flow of
such Borrower and its Consolidated subsidiaries, after taking into account all
other anticipated uses of the cash of such Borrower and its Consolidated
subsidiaries (including the payments on or in respect of debt referred to in
paragraph (c) of this Section), will at all times be sufficient to pay all such
judgments promptly in accordance with their terms.
SECTION 4.18. Permits, etc. Each Borrower and each of their subsidiaries
possesses all licenses, permits, approvals and consents, including, without
limitation, all environmental, health and safety licenses, permits, approvals
and consents (collectively, "Permits") of all Federal, state and local
governmental authorities as required to conduct properly its business, except
for those the absence of which could not reasonably be expect to have a Material
Adverse Effect; each such Permit is and will be in full force and effect, each
Borrower and each of their subsidiaries is in compliance in all material
respects with all such Permits, and no event (including, without limitation, any
violation of any law, rule or regulation) has occurred which would reasonably be
expected to result in the revocation or termination of any such Permit or any
restriction thereon.
SECTION 4.19. Compliance with Environmental Laws. Except as disclosed in
Schedule 4.19 hereto: (i) the operations of the Borrowers and their subsidiaries
comply with all applicable Environmental Laws, except as such would not
reasonably be likely to result in liability, either individually or in the
aggregate, to the Borrowers or their subsidiaries in excess of $100,000; (ii)
the Borrowers and their subsidiaries and all of their present facilities or
operations, as well as to the knowledge of the Borrowers and their subsidiaries
their past facilities or operations, are not subject to any judicial proceeding
or administrative proceeding or any outstanding written order or agreement with
any governmental authority or private party respecting (a) any Environmental
Law, (b) any Remedial Work, or (c) any Environmental Claims arising from the
Release of a Hazardous Material into the
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environment; (iii) to the best of the knowledge of the Borrowers and their
subsidiaries, none of their operations is the subject of any Federal or state
investigation evaluating whether any Remedial Work is needed to respond to a
Release of any Hazardous Material into the environment in violation of any
Environmental Law; (iv) none of the Borrowers nor to the best knowledge of the
Borrowers, any subsidiaries of the Borrowers nor any predecessor of the
Borrowers or any subsidiaries of the Borrowers has filed any notice under any
Environmental Law indicating past or present treatment, storage, or disposal of
a Hazardous Material or reporting a spill or Release of a Hazardous Material
into the environment; (v) to the best of the knowledge of the Borrowers and
their subsidiaries, none of the Borrowers or their subsidiaries has any
contingent liability in connection with any Release of any Hazardous Material
into the environment, except as such would not reasonably be likely to result in
liability, either individually or in the aggregate, to the Borrowers or any
subsidiary thereof in excess of $100,000; (vi) none of the operations of the
Borrowers or their subsidiaries involve the generation, transportation,
treatment or disposal of Hazardous Materials; (vii) neither the Borrowers nor
their subsidiaries have disposed of any Hazardous Material by placing it in or
on the ground or waters of any premises owned, leased or used by any of them and
to the knowledge of the Borrowers and their subsidiaries, neither has any
lessee, prior owner, or other person, except as such would not reasonably be
likely to result in liability, either individually or in the aggregate, to the
Borrowers or any subsidiary thereof in excess of $100,000; (viii) no underground
storage tanks or surface impoundments are on any property of the Borrowers and
their subsidiaries; and (ix) no Lien in favor of any governmental authority for
(A) any liability under any Environmental Law or regulation, or (B) damages
arising from or costs incurred by such governmental authority in response to a
Release of a Hazardous Material into the environment, has been filed or attached
to the property of the Borrowers and their subsidiaries.
SECTION 4.20. No Change in Credit Criteria or Collection Policies. There
has been no material change in credit criteria or collection policies concerning
account receivables of any Borrower since December 31, 1996. Without
duplication, all Receivables at the time of their classification as a
Receivable) of the Borrowers are valid, binding and enforceable obligations of
account debtors and are not subject to any claims, defenses or setoffs, subject
to applicable laws of bankruptcy, insolvency and similar laws affecting
creditors' rights generally.
SECTION 4.21. Acquisition. (a)(i) The execution, delivery and performance
by Airxcel of the Acquisition Documents have been duly authorized by all
necessary corporate action on the part of Airxcel, (ii) the Acquisition
Documents constitute the valid, binding and enforceable obligation of each such
party thereto, subject to the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, and are in full force and effect without default or waiver of any of
the conditions thereunder and (iii) there are no governmental consents, filings,
approvals or notices required to be made or obtained in connection with the
execution, delivery and performance of the Acquisition Documents except such as
have been duly made, obtained or delivered or will be obtained, made or
delivered.
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(b) To the best of Airxcel's knowledge, each of the representations and
warranties made by the sellers in the Acquisition Documents is true and correct
in all material respects.
SECTION 4.22. Bank Accounts. Schedule 4.22 hereto sets forth as of the
Closing Date a list of all of the Borrowers' bank accounts.
V. CONDITIONS OF CREDIT EVENTS
The obligation of each Lender to make Loans and extend other Credits
hereunder shall be subject to the following conditions precedent:
SECTION 5.01. All Credit Events. On each date on which a Credit Event is
to occur:
(a) The Agent shall have received a notice of borrowing as required by
Section 2.03 hereof or a request for the issuance of a Letter of Credit pursuant
to Section 2.17 hereof.
(b) The representations and warranties set forth in Article IV hereof and
in any documents delivered herewith, including, without limitation, the Loan
Documents, shall be true and correct in all material respects with the same
effect as though made on and as of such date (except insofar as such
representations and warranties relate expressly to an earlier date).
(c) Each of the Borrowers shall be in compliance with all the terms and
provisions contained herein on its part to be observed or performed, and at the
time of and immediately after such Credit Event no Default or Event of Default
shall have occurred and be continuing.
(d) The Agent shall have received a certificate signed by the Financial
Officer of each of the Borrowers (i) as to the compliance with (b) and (c) above
and (ii) with respect to each Revolving Credit Loan and each Letter of Credit,
demonstrating that after giving effect thereto Availability is zero or greater.
SECTION 5.02. First Borrowing. The obligations of the Lenders in respect
of the first Credit Event hereunder is subject to the following additional
conditions precedent:
(a) The Lenders shall have received the favorable written opinion of
counsel for the Borrowers and each of the Guarantors and Grantors, substantially
in the form of Exhibit C hereto, dated the Closing Date, addressed to the
Lenders and satisfactory to the Agent.
(b) The Lenders shall have received (i) a copy of the certificate or
articles of incorporation or constitutive documents, in each case as amended to
date, of each of the Borrowers, the Grantors and the Guarantors, certified as of
a recent date by the Secretary of State or other appropriate official of the
state of its organization, and a certificate as to the good standing of each
from such Secretary of State or other official, in each case dated
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as of a recent date; (ii) a certificate of the Secretary of each of the
Borrowers, Grantor and Guarantor, dated the Closing Date and certifying (A) that
attached thereto is a true and complete copy of such person's By-laws as in
effect on the date of such certificate and at all times since a date prior to
the date of the resolution described in item (B) below, (B) that attached
thereto is a true and complete copy of a resolution adopted by such person's
Board of Directors authorizing the execution, delivery and performance of this
Agreement, the Security Documents, the Notes, the other Loan Documents and the
Credit Events hereunder, as applicable, and that such resolution has not been
modified, rescinded or amended and is in full force and effect, (C) that such
person's certificate or articles of incorporation or constitutive documents has
not been amended since the date of the last amendment thereto shown on the
certificate of good standing furnished pursuant to (i) above, and (D) as to the
incumbency and specimen signature of each of such person's officers executing
this Agreement, the Notes, each Security Document or any other Loan Document
delivered in connection herewith or therewith, as applicable; (iii) a
certificate of another of such person's offficers as to incumbency and signature
of its Secretary; and (iv) such other documents as the Agent or any Lender may
reasonably request.
(c) The Agent shall have received a certificate, dated the Closing Date
and signed by the Financial Officer of each of the Borrowers, confirming
compliance with the conditions precedent set forth in paragraphs (b) and (c) of
Section 5.01 hereof and the conditions set forth in this Section 5.02.
(d) Each Lender shall have received its Term Note and Revolving Credit
Note (which Notes shall replace the Revolving Credit Notes issued in connection
with the First Amended Agreement, such replaced Notes to be returned to Airxcel
by the Lenders holding same, marked "canceled" promptly after the Closing Date),
each duly executed by the Borrowers, payable to its order and otherwise
complying with the provisions of Section 2.04 hereof.
(e) The Agent shall have received (x) such amendments or confirmations (as
requested by the Agent) of the Security Documents existing as of the Closing
Date, (y) such additional Security Documents (as requested by the Agent,
including, but not limited to, an Assignment of Contract relating to the
Acquisition Documents and the Mortgages, together with title insurance in form,
scope and amount satisfactory in all respects to the Agent) to be executed and
delivered in connection with the Transactions and (z) certificates evidencing
the Pledged Stock to be pledged on the Closing Date, together with undated stock
powers executed in blank, each duly executed by the applicable Grantors.
(f) Each document (including, without limitation, each Uniform Commercial
Code financing statement) required by law or reasonably requested by the Agent
to be filed, registered or recorded in order to create in favor of the Agent for
its own benefit and for the benefit of the Lenders a first priority perfected
security interest in the Collateral (including, without limitation, Collateral
acquired pursuant to the Acquisition), except to the extent permitted by the
Security Documents, shall have been properly filed, registered or recorded in
each jurisdiction in which the filing, registration or recordation thereof is so
required or requested. The Agent shall have received an acknowledgment copy, or
other evidence satisfactory to it, of each such filing, registration or
recordation.
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(g) The Agent shall have received the results of a search of tax and other
Liens, and judgments and of the Uniform Commercial Code filings made with
respect to each of the Borrowers and each Grantor in the jurisdictions in which
the Borrowers are doing business and/or in which any Collateral acquired
pursuant to the Acquisition is located, and in which Uniform Commercial Code
filings have been made against each Borrower, each Guarantor and each Grantor
pursuant to paragraph (f) above. With respect to any Liens not permitted
pursuant to Section 7.01 hereof, the Agent shall have received termination
statements in form and substance satisfactory to it.
(h) The Lenders and the Agent shall have received the results of a Phase
One environmental study with respect to the properties located in Dayton,
Tennessee and Elkhart, Indiana conducted by a firm satisfactory to the Agent and
the Lenders, and the scope, methodology and results of such environmental audit
shall be satisfactory to the Agent in all respects.
(i) The Lenders and the Agent shall have received and determined to be in
form and substance satisfactory to them.
(i) schedules listing (w) the stock ownership of each Loan Party,
(x) all contingent liabilities of the Borrowers and their subsidiaries, as
reportable under GAAP, (y) all pending litigation involving the Borrowers
or their respective subsidiaries or any of their respective businesses,
assets or rights and (z) all operating and capital leases;
(ii) a copy of a field examination of the books and records of SMC;
(iii) evidence of the compliance by the Borrowers with Section 6.03
hereof;
(iv) the financial statements described in Section 4.07 hereof;
(v) evidence that the Transactions are in compliance with all
applicable laws and regulations;
(vi) evidence that the Borrowers and their subsidiaries are in
compliance with all Environmental Laws;
(vii) evidence of payment of all fees owed to the Agent and the
Lenders by the Borrowers under this Agreement or otherwise;
(viii) evidence that all requisite third party consents (including,
without limitation, consents with respect to the Borrowers and each of the
Grantors and Guarantors) to the Transactions have been received;
(ix) evidence that there has been no material adverse change in the
business, assets, operations or financial condition of (x) Airxcel and its
subsidiaries
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since December 31, 1996, (y) Crispaire Corporation and its subsidiaries
since October 31, 1996 or (z) SMC and its subsidiaries since April 30,
1997;
(x) evidence that there are no actions, suits or proceedings at law
or in equity or by or before any governmental instrumentality or other
agency or regulatory authority now pending or threatened against or
affecting any Borrower or any subsidiary thereof or any of their
respective businesses, assets or rights which involve any of the
Transactions;
(xi) evidence that the Investor Group, Xxxxx Xxxxx and Xxxx XxXxxx
have made an equity investment in Holdings in an aggregate amount not less
than $3,996,000; and
(xii) evidence of the repayment in full of existing credit
arrangements with NationsBank, N.A. and the termination of all
commitments to lend thereunder, and the termination of all security
interests securing such indebtedness.
(j) The Agent and the Lenders shall have had the opportunity, if they so
choose, to examine the books of account and other records and files related to
SMC and to make copies thereof, and the results of such examination and audit
shall have been satisfactory to the Agent and Lenders in all respects.
(k) Messrs. Xxxx, Scholer, Fierman, Xxxx & Handler, LLP, counsel to the
Agent, shall have received payment in full for all legal fees charged, and all
costs and expenses incurred, by such counsel through the Closing Date in
connection with the transactions contemplated under this Agreement, the Security
Documents and the other Loan Documents and instruments in connection herewith
and therewith.
(l) The Agent and the Lenders shall have:
(i) received copies of each of the Acquisition Documents, including
all amendments and schedules thereto, each certified by a Responsible
Officer of Airxcel;
(ii) received evidence that the Acquisition Agreement is in full
force and effect and all consents, filings and approvals required by
applicable law in connection therewith shall have been obtained and made;
(iii) received evidence that simultaneously with the occurrence of
the Credit Events on the Closing Date, the Acquisition has been duly and
validly consummated, without modification, amendment or waiver (except for
such as shall have been approved in writing by the Agent), in accordance
with the terms, conditions and provisions of the Acquisition Agreement and
the other Acquisition Documents; and
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(iv) determined that the terms and provisions of all agreements and
documents in connection with the Acquisition, including without limitation
the Acquisition Documents, are satisfactory in form and substance and the
Agent shall have received such legal opinions, certificates and copies of
necessary governmental filings and consents as the Agent shall have
requested in connection therewith, and shall have determined to its
satisfaction that the consummation of the Acquisition and other
transactions contemplated by the Acquisition Documents are in compliance
with all applicable laws and regulations.
(m) The corporate structure and capitalization of the Borrowers shall be
satisfactory to the Lenders in all respects.
(n) All legal matters in connection with the Transactions shall be
satisfactory to the Agent, the Lenders and their respective counsel in their
sole discretion.
(o) The Borrowers shall have executed and delivered to the Agent a
disbursement authorization letter with respect to the disbursement of the
proceeds of the Credit Events made on the Closing Date, in form and substance
satisfactory to the Agent.
(p) The Agent and the Lenders shall have received a fully executed copy of
the Holdings Guarantee.
(q) The Agent shall have received such other documents as the Lenders or
the Agent or Agent's counsel shall reasonably deem necessary.
VI. AFFIRMATIVE COVENANTS
Each of the Borrowers covenants and agrees with each Lender that until the
principal and interest on all Notes delivered hereunder are paid in full and all
fees, expenses or amounts then being due and payable hereunder or in connection
with any of the Transactions shall be paid in full and the Total Commitment
shall be terminated, it will, and will cause each of its subsidiaries, to:
SECTION 6.01. Legal Existence. Do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its legal existence.
SECTION 6.02. Businesses and Properties. At all times do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
the rights, licenses, Permits, franchises, patents, copyrights, trademarks and
trade names material to the conduct of its businesses; maintain and operate such
businesses in the same general manner in which they are presently conducted and
operated; comply with all laws, rules, regulations and governmental orders
(whether Federal, state or local) applicable to the operation of such businesses
whether now in effect or hereafter enacted (including, without limitation, all
applicable laws, rules, regulations and governmental orders relating to public
and employee health and safety and all Environmental Laws) and with any and all
other applicable laws, rules, regulations and governmental orders, the lack of
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compliance with which would have a Material Adverse Effect; take all actions
which may be required to obtain, preserve, renew and extend all Permits and
other authorizations which are material to the operation of such businesses; and
at all times maintain, preserve and protect all property material to the conduct
of such businesses and keep such property in good repair, working order and
condition and from time to time make, or cause to be made, all needful and
proper repairs, renewals, additions, improvements and replacements thereto
necessary in order that the business carried on in connection therewith may be
properly conducted at all times.
SECTION 6.03. Insurance. (a) Keep its insurable properties adequately
insured at all times by financially sound and reputable insurers, (b) maintain
such other insurance, to such extent and against such risks, including fire and
other risks insured against by extended coverage, as in effect and approved by
the Agent on the Closing Date; provided, however, that such insurance shall
insure the property of the Borrowers against all risk of physical damage,
including, without limitation, loss by fire, explosion, theft, fraud and such
other casualties as may be reasonably satisfactory to the Agent, but in no event
at any time in an amount less than the replacement value of the Collateral, (c)
maintain in full force and effect public liability insurance against claims for
personal injury or death or property damage occurring upon, in, about or in
connection with the use of any properties owned, occupied or controlled by any
Borrower or any of their subsidiaries, in such amount as the Agent shall
reasonably deem necessary, (d) maintain business interruption insurance to such
extent as in effect and approved by the Agent on the Closing Date, and (e)
maintain such other insurance as may be required by law or as may be reasonably
requested by the Agent for purposes of assuring compliance with this Section
6.03. All insurance covering tangible personal property subject to a Lien in
favor of the Agent for its own benefit and for the benefit of the Lenders
granted pursuant to the Security Documents shall provide that, in the case of
each separate loss the full amount of insurance proceeds shall be payable to the
Agent and shall further provide for at least 30 days' prior written notice to
the Agent of the cancellation or substantial modification thereof.
SECTION 6.04. Taxes. Pay and discharge promptly when due all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or in respect of its property before the same shall become
delinquent or in default, except those which are being diligently contested in
good faith by appropriate proceedings and as to which adequate cash reserves
therefor have been established in an amount at least equal to the Lien permitted
by Section 7.01(c), as well as all lawful claims for labor, materials and
supplies or otherwise, which, if unpaid, might give rise to Liens upon such
properties or any part thereof.
SECTION 6.05. Financial Statements. Reports. etc. Furnish to the Agent,
with copies for each of the Lenders:
(a) within 90 days after the end of each Fiscal Year, (i) Consolidated and
consolidating balance sheets and Consolidated and consolidating income
statements showing the financial condition of the Borrowers and their
subsidiaries as of the close of such Fiscal Year and the results of their
operations during such year, and (ii) a Consolidated and consolidating statement
of shareholders' equity and a Consolidated and
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consolidating statement of cash flow, as of the close of such Fiscal Year,
comparing such financial condition and results of operations to such financial
condition and results of operations for the comparable period during the
immediately preceding Fiscal Year, all the foregoing Consolidated financial
statements to be audited by a "Big Six" accounting firm or other independent
public accountants acceptable to the Agent (which report shall not contain any
qualification except with respect to new accounting principles mandated by the
Financial Accounting Standards Board), and to be in form and substance
acceptable to the Agent;
(b) within 45 days after the end of each of the first three (3) fiscal
quarters of each Fiscal Year of Airxcel, (i) unaudited Consolidated and
consolidating balance sheets and Consolidated and consolidating income
statements showing the financial condition and results of operations of the
Borrowers and their subsidiaries as of the end of each such quarter, (ii) a
Consolidated and consolidating statement of shareholders' equity and (iii) a
Consolidated and consolidating statement of cash flow, in each case for the
fiscal quarter just ended and for the period commencing at the end of the
immediately preceding Fiscal Year and ending with the last day of such quarter,
and comparing such financial condition and results of operations to the
projections for the applicable period provided under paragraph (h) below and to
the results for the comparable period during the immediately preceding Fiscal
Year, in each case prepared and certified by the Financial Officer of each of
the Borrowers as presenting fairly the financial condition and results of
operations of the Borrowers and their subsidiaries and as having been prepared
in accordance with GAAP, in each case subject to normal year-end audit
adjustments;
(c) within 30 days after the end of each month, (i) unaudited Consolidated
and consolidating balance sheets and income statements showing the financial
condition and results of operations of the Borrowers and their subsidiaries as
of the end of each such month, (ii) a Consolidated and consolidating statement
of shareholders' equity and (iii) a Consolidated and consolidating statement of
cash flow, in each case for the month just ended and for the period commencing
at the end of the immediately preceding Fiscal Year and ending with the last day
of such month, and comparing such financial condition and results of operations
to the projections for the applicable period provided under paragraph (h) below
and to the results for the comparable period during the immediately preceding
Fiscal Year, prepared and certified by the Financial Officer of each of the
Borrowers as presenting fairly the financial condition and results of operations
of the Borrowers and their subsidiaries and as having been prepared in
accordance with GAAP, in each case subject to normal year-end audit adjustments;
(d) promptly after the same become publicly available, copies of such
registration statements, annual, periodic and other reports, and such proxy
statements and other information, if any, as shall be filed by the Borrowers or
any subsidiaries with the Securities and Exchange Commission pursuant to the
requirements of the Securities Act of 1933 or the Securities Exchange Act of
1934;
(e) concurrently with any delivery under (a) or (b) above, a certificate
of the firm or person referred to therein (x) which certificate shall, in the
case of the certificate of the Financial Officer of each of the Borrowers,
certify that to the best of his or her knowledge
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no Default or Event of Default has occurred (including calculations
demonstrating compliance, as of the dates of the financial statements being
furnished, with the covenants set forth in Sections 7.07, 7.08, 7.09 and 7.10
hereof and, if such a Default or Event of Default has occurred, specify the
nature and extent thereof and any corrective action taken or proposed to be
taken with respect thereto and (y) which certificate, in the case of the
certificate furnished by the independent public accountants referred in
paragraph (a) above, may be limited to accounting matters and disclaim
responsibility for legal interpretations, but shall in any event certify that to
the best of such accountants' knowledge, as of the dates of the financial
statements being furnished no Default or Event of Default has occurred under any
of the covenants set forth in Sections 7.07, 7.08, 7.09 and 7.10 hereof (such
certificate to include calculations demonstrating compliance with such
covenants), and shall in addition certify that in the course of preparing the
audit and the certificate referred to herein, such accountants have not become
aware of the occurrence of any other Default or Event of Default and, if such a
Default or Event of Default has occurred, specify the nature thereof; provided,
however, that any certificate delivered concurrently with (a) above shall be
signed by the Financial Officer of each of the Borrowers;
(f) concurrently with any delivery under (a) above, a management letter
prepared by the independent public accountants who reported on the financial
statements delivered under (a) above, with respect to the internal audit and
financial controls of any Borrower and their subsidiaries;
(g) within 15 days of the end of each fiscal month, an aging schedule of
the Receivables substantially in the form of the aging schedule of Receivables
dated January 31, 1998 previously furnished to the Agent and a certificate
substantially in the form of Schedule 6.05(g) hereto executed by the Financial
Officer of each of the Borrowers with respect to inventory designations;
(h) within 30 days prior to the beginning of each Fiscal Year, a summary
of business plans and financial operation projections (including, without
limitation, with respect to capital expenditures) for the Borrowers and their
respective subsidiaries for such Fiscal Year (including monthly balance sheets,
statements of income and of cash flow) and annual projections through the Final
Maturity Date prepared by management and in form, substance and detail
(including, without limitation, principal assumptions) satisfactory to the
Agent;
(i) as soon as practicable, copies of all reports, forms, filings, loan
documents and financial information submitted to governmental agencies and/or
its shareholders or the holders of any of the Borrowers' Subordinated
Indebtedness;
(j) within 15 days after the end of each fiscal month, a certificate
substantially in the form of Schedule 6.05(j) hereto executed by the Financial
Officer of each of the Borrowers demonstrating compliance as at the end of each
month with the Availability requirements;
(k) immediately upon becoming aware thereof, notice to the Agent of the
breach by any party of any material agreement with any of the Borrowers; and
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(l) such other information as the Agent or any Lender may reasonably
request.
SECTION 6.06. Litigation and Other Notices. Give the Agent prompt written
notice of the following:
(a) the issuance by any court or governmental agency or authority of any
injunction, order, decision or other restraint prohibiting, or having the effect
of prohibiting, the making of the Loans or occurrence of other Credit Events, or
invalidating, or having the effect of invalidating, any provision of this
Agreement, the Notes or the other Loan Documents, or the initiation of any
litigation or similar proceeding seeking any such injunction, order, decision or
other restraint;
(b) the filing or commencement of any action, suit or proceeding against
any Borrower or any of their subsidiaries, whether at law or in equity or by or
before any court or any Federal, state, municipal or other governmental agency
or authority, (i) which is material and is brought by or on behalf of any
governmental agency or authority, or in which injunctive or other equitable
relief is sought or (ii) as to which it is probable (within the meaning of
Statement of Financial Accounting Standards No. 5) that there will be an adverse
determination and which, if adversely determined, would (A) reasonably be
expected to result in liability of one or more Borrowers or a subsidiary thereof
in an aggregate amount of $250,000 or more, not reimbursable by insurance, or
(B) materially impair the right of any Borrower or a subsidiary thereof to
perform its obligations under this Agreement, any Note or any other Loan
Document to which it is a party;
(c) any Default or Event of Default, specifying the nature and extent
thereof and the action (if any) which is proposed to be taken with respect
thereto; and
(d) any development in the business or affairs of any Borrower or any of
their subsidiaries which has had or which is likely to have, in the reasonable
judgment of any Responsible Officer of such Borrower, a Material Adverse Effect.
SECTION 6.07. ERISA. (a) Pay and discharge promptly any liability imposed
upon it pursuant to the provisions of Title IV of ERISA; provided, however, that
neither the Borrowers nor any ERISA Affiliate shall be required to pay any such
liability if (1 ) the amount, applicability or validity thereof shall be
diligently contested in good faith by appropriate proceedings, and (2) such
person shall have set aside on its books reserves which, in the opinion of the
independent certified public accountants of such person, are adequate with
respect thereto.
(b) Deliver to the Agent, promptly, and in any event within 30 days, after
(i) the occurrence of any Reportable Event, a copy of the materials that are
filed with the PBGC, or the materials that would have been required to be filed
if the 30-day notice requirement to the PBGC was not waived, (ii) any Borrower
or any ERISA Affiliate or an administrator of any Pension Plan files with
participants, beneficiaries or the PBGC a notice of intent to terminate any such
Plan, a copy of any such notice, (iii) the receipt of notice by any Borrower or
any ERISA Afffiliate or an administrator of any Pension Plan from the PBGC of
the PBGC's intention to terminate any Pension Plan or to appoint a trustee to
administer
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any such Plan, a copy of such notice, (iv) the filing thereof with the Internal
Revenue Service, copies of each annual report that is filed on Treasury Form
5500 with respect to any Plan, together with certified financial statements (if
any) for the Plan and any actuarial statements on Schedule B to such Form 5500,
(v) any Borrower or any ERISA Affiliate knows or has reason to know of any event
or condition which might constitute grounds under the provisions of Section 4042
of ERISA for the termination of (or the appointment of a trustee to administer)
any Pension Plan, an explanation of such event or condition, (vi) the receipt by
any Borrower or any ERISA Affiliate of an assessment of withdrawal liability
under Section 4201 of ERISA from a Multiemployer Plan, a copy of such
assessment, (vii) any Borrower or any ERISA Afffiliate knows or has reason to
know of any event or condition which might cause any one of them to incur a
liability under Section 4062, 4063, 4064 or 4069 of ERISA or Section 412(n) or
4971 of the Code, an explanation of such event or condition, and (viii) any
Borrowers or any ERISA Affiliate knows or has reason to know that an application
is to be, or has been, made to the Secretary of the Treasury for a waiver of the
minimum funding standard under the provisions of Section 412 of the Code, a copy
of such application, and in each case described in clauses (i) through (iii) and
(v) through (vii) together with a statement signed by the Financial Officer
setting forth details as to such Reportable Event, notice, event or condition
and the action which any Borrower or such ERISA Afffiliate proposes to take with
respect thereto.
SECTION 6.08. Maintaining Records: Access to Properties and Inspections:
Right to Audit. Maintain financial records in accordance with accepted financial
practices and, upon reasonable notice (which may be telephonic), at all
reasonable times and as often as any Lender may request, permit any authorized
representative designated by such Lender to visit and inspect the properties and
financial records of the Borrowers and their subsidiaries and to make extracts
from such financial records at such Lender's expense, and permit any authorized
representative designated by such Lender to discuss the affairs, finances and
condition of the Borrowers and their subsidiaries with the appropriate Financial
Officer and such other officers as the Borrowers shall deem appropriate and the
Borrowers' independent public accountants, as applicable. The Agent agrees that
it shall schedule any meeting with any such independent public accountant
through the Borrowers and a Responsible Officer of one or more Borrowers shall
have the right to be present at any such meeting. At the Borrowers' expense, the
Agent shall have the right to audit, during any twelve-month period, not more
often than once during such period (unless a Default or an Event of Default has
occurred and is continuing in which case as often as the Agent may request), the
existence and condition of the accounts receivables, inventory, books and
records of the Borrowers and their subsidiaries and to review their compliance
with the terms and conditions of this Agreement and the other Loan Documents.
SECTION 6.09. Use of Proceeds. Use the proceeds of the Credit Events only
for the purposes set forth in Section 4.14 hereof.
SECTION 6.10. Fiscal Year-End. Cause its Fiscal Year to end on December 31
in each year.
SECTION 6.11. Further Assurances. Execute any and all further documents
and take all further actions which may be required under applicable law, or
which the Agent may
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reasonably request, to grant, preserve, protect and perfect the first priority
security interest created by the Security Documents in the Collateral.
SECTION 6.12. Additional Grantors and Guarantors. Promptly inform the
Agent of the creation or acquisition of any direct or indirect subsidiary
(subject to the provisions of Section 7.06 hereof) and cause each direct or
indirect subsidiary not in existence on the date hereof (except any Foreign
Subsidiary), to enter into a Guarantee in form and substance satisfactory to the
Agent, and to execute the Security Documents, as applicable, as a Grantor, and
cause the direct parent of each such subsidiary to pledge all of the capital
stock of such subsidiary (or, in the case of a Foreign Subsidiary, 65%) pursuant
to the Pledge Agreement and cause each such subsidiary to pledge its accounts
receivable and all other assets pursuant to the Security Agreement (except any
Foreign Subsidiary).
SECTION 6.13. Environmental Laws. (a) Comply, and cause each of their
subsidiaries to comply, in all material respects with the provisions of all
Environmental Laws, and shall keep their properties and the properties of their
subsidiaries free of any Lien imposed pursuant to any Environmental Law. The
Borrowers shall not cause or suffer or permit, and shall not suffer or permit
any of their subsidiaries to cause or suffer or permit, the property of the
Borrowers or their subsidiaries to be used for the generation, production,
processing, handling, storage, transporting or disposal of any Hazardous
Material, except for Hazardous Materials used in the ordinary course of business
of the Borrowers and in material compliance with Environmental Laws.
(b) Supply to the Agent copies of all material submissions by the
Borrowers or any of their subsidiaries to any governmental body and of the
reports of all environmental audits and of all other environmental tests,
studies or assessments (including the data derived from any sampling or survey
of asbestos, soil, or subsurface or other materials or conditions) that have
been conducted or performed (by or on behalf of the Borrowers or any of their
subsidiaries) on or regarding the properties owned, operated, leased or occupied
by the Borrowers or any of their subsidiaries in response to violations of
Environmental Law or Releases of Hazardous Materials that would reasonably be
expected to give rise to an Environmental Claim in excess of $100,000. The
Borrowers shall also permit and authorize, and shall cause their subsidiaries to
permit and authorize, the consultants, attorneys or other persons that prepare
such submissions or reports or perform such audits, tests, studies or
assessments to discuss such submissions, reports or audits with the Agent and
the Lenders.
(c) Promptly (and in no event more than ten Business Days after the
Borrowers become aware or are otherwise informed of such event) provide oral and
written notice to the Agent upon the happening of any of the following:
(i) any Borrower, any subsidiary of any Borrower, or any tenant or
other occupant of any property of such Borrower or such subsidiary
receives written notice of any claim, complaint, charge or notice of a
violation or potential violation of any Environmental Law that would
reasonably be expected to give rise to a liability or cost in excess of
$30,000;
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(ii) there has been a spill or other Release of Hazardous Materials
upon, under or about or affecting any of the properties owned, operated,
leased or occupied by any Borrower or any subsidiary of any Borrower, in
amounts that may have to be reported under Environmental Law or Hazardous
Materials at levels or in amounts that may have to be reported, remedied
or responded to under Environmental Law are detected on or in the soil or
groundwater such that would reasonably be expected to give rise to a
liability or cost in excess of $30,000;
(iii) any Borrower or any of their subsidiaries are or may be liable
for any costs of cleaning up or otherwise responding to a Release of
Hazardous Materials such that would reasonably be expected to give rise to
a liability or cost in excess of $30,000;
(iv) any part of the properties owned, operated, leased or occupied
by any Borrower or any subsidiary of any Borrower is or may be subject to
a Lien under any Environmental Law; or
(v) any Borrower or any subsidiary of any Borrower undertakes any
Remedial Work with respect to any Hazardous Materials such that would
reasonably be expected to give rise to a liability or cost in excess of
$30,000.
(d) Without in any way limiting the scope of Section 11.04(c) and in
addition to any obligations thereunder, each of the Borrowers hereby indemnifies
and agrees to hold the Agent and the Lenders harmless from and against any
liability, loss, damage, suit, action or proceeding arising out of its business
or the business of its subsidiaries pertaining to Hazardous Materials,
including, but not limited to, claims of any governmental body or any third
person arising under any Environmental Law or under tort, contract or common
law, except to the extent any such liability or loss is found by a court of
final adjudication to have been due to the gross negligence or willful
misconduct of the Agent or any Lender. To the extent laws of the United States
or any applicable state or local law in which property owned, operated, leased
or occupied by any Borrower or any subsidiary of any Borrower is located provide
that a Lien upon such property of such Borrower or such subsidiary may be
obtained for the removal of Hazardous Materials which have been or may be
Released, no later than sixty days after notice that a Release has occurred is
given by the Agent to such Borrower or such subsidiary, such Borrower or such
subsidiary shall deliver to the Agent a report issued by a qualified third party
engineer assessing the existence and extent of any Hazardous Materials located
upon or beneath the specified property. To the extent any Hazardous Materials
located therein or thereunder either subject the property to Lien or require
removal to safeguard the health of any persons, the removal thereof shall be an
affirmative covenant of the Borrowers hereunder.
(e) In the event that any Remedial Work is required to be performed by any
Borrower or any subsidiaries of any Borrower under any applicable Environmental
Law, any judicial order, or by any governmental entity, such Borrower or such
subsidiary shall commence all such Remedial Work at or prior to the time
required therefor under such Environmental Law or applicable judicial orders and
thereafter diligently prosecute to
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completion all such Remedial Work in accordance with and within the time allowed
under such applicable Environmental Laws or judicial orders.
SECTION 6.14. Pay Obligations to Lenders and Perform Other Covenants. (a)
Make full and timely payment of the Obligations, whether now existing or
hereafter arising, (b) duly comply with all the terms and covenants contained in
this Agreement (including, without limitation, the borrowing limitations and
mandatory prepayments in accordance with Article II hereof) in each of the other
Loan Documents, all at the times and places and in the manner set forth therein,
and (c) except for the filing of continuation statements and the making of other
filings by the Agent as secured party or assignee, at all times take all actions
necessary to maintain the Liens and security interests provided for under or
pursuant to this Agreement and the Security Documents as valid and perfected
first Liens on the property intended to be covered thereby (subject only to
Liens expressly permitted hereunder) and supply all information to the Agent
necessary for such maintenance.
SECTION 6.15. Maintain Operating Accounts. Maintain their principal
disbursement accounts, operating accounts and other depository accounts as set
forth on Schedule 4.22 or as otherwise contemplated by Section 10.01, and notify
the Agent promptly of the closing of any account specified in Schedule 4.22 and
the opening up of any new accounts, in detail satisfactory to the Agent and with
respect to any such new account, provide the Agent with such agreements, in form
and substance satisfactory to the Agent, as the Agent shall request. The
Borrowers agree that if at any time the outstanding balance of the account
maintained by RVPI with the Royal Bank of Canada (or any financial institution
with an office in Barbados) exceeds $10,000.00, the Borrowers will provide, or
will cause to be provided. to the Agent such agreements, in form and substance
satisfactory to the Agent, as the Agent shall request.
SECTION 6.16. Amendments. Promptly supply to the Agent certified copies of
any amendments to the Acquisition Documents or the Crispaire Acquisition
Documents.
SECTION 6.17. Landlords' Waivers. To the extent any Inventory is now or
becomes located on any of the Borrowers' leased real property, obtain landlords'
waivers, to the extent a landlord's waiver has not previously been delivered to
the Agent with respect to such leased real property, within 30 days of Inventory
becoming located on any such real property, pursuant to documentation
satisfactory in form and substance to the Agent.
SECTION 6.18. Interest Rate Protection. Within 60 days after the Closing
Date, enter into an interest rate cap (i) covering a notional principal amount
of at least $10,000,000, (ii) with a term ending no earlier then three (3) years
from the Closing Date and (iii) on such other terms and conditions as shall be
reasonably satisfactory to the Agent.
SECTION 6.19. Post Closing Matters. (a) Within 30 days after the Closing
Date, obtain bailees' letters pursuant to documentation satisfactory in form and
substance to the Agent.
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(b) Within 60 days after the Closing Date, enter into Lockbox or other
cash management arrangements with respect to accounts opened at The Chase
Manhattan Bank in connection with the Acquisition pursuant to documentation
satisfactory in form and substance to the Agent.
(c) Within 30 days after the Closing Date, the Borrowers shall cause to be
delivered to the Agent (x) a reliance letter from Strata in form and substance
satisfactory to the Agent, with respect to the Phase I Environmental Site
Assessment for the Dayton, Tennessee real property, and (y) a copy of Strata's
current certificate of insurance.
(d) Within 90 days after the Closing Date, the Borrowers shall take the
actions described on Schedule 6.19(d) hereto.
(e) Within 30 days after the Closing Date, the Borrowers shall cause to be
delivered to the Agent (x) a reliance letter from Adirondack Environmental, in
form and substance satisfactory to the Agent, with respect to the Elkhart,
Indiana real property, (y) a copy of Adirondack Environmental's current
certificate of insurance and (z) a copy of Adirondack Environmental's statement
of qualifications.
(f) Within 60 days after the Closing Date, the Agent and the Lenders shall
have had the opportunity, if they so choose, to conduct customer and supplier
checking and to conduct an audit which shall include, without limitation,
verification of Receivables related to SMC.
(g) Within 45 days after the Closing Date, the Borrowers shall provide to
the Agent real property appraisals in respect of SMC's real property located in
Dayton, Tennessee and Elkhart, Indiana, in form and substance satisfactory to
the Agent.
(h) Within 30 days after the Closing Date, the Borrowers shall provide, in
form and substance satisfactory to the Agent, a blocked account letter relating
to Airxcel's concentration account at NationsBank, N.A.
VII. NEGATIVE COVENANTS
Each of the Borrowers covenants and agrees with each Lender that until the
principal and interest on all Notes delivered hereunder are paid in full and all
fees, expenses or amounts then being due and payable hereunder or in connection
with any of the Transactions shall be paid in full and the Total Revolving
Credit Commitment shall be terminated, it will not and will not cause or permit
any of its subsidiaries to, either directly or indirectly:
SECTION 7.01. Liens. Incur, create, assume or permit to exist any Lien on
any of its property or assets (including the stock of any direct or indirect
subsidiary), whether owned at the date hereof or hereafter acquired, or assign
or convey any rights to or security interests in any future revenues, except:
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(a) Liens incurred and pledges and deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance,
old-age pensions and other social security benefits (not including any lien
described in Section 412(m) of the Code);
(b) Liens imposed by law, such as carriers', warehousemen's, mechanics',
materialmen's and vendors' liens and other similar liens, incurred in good faith
in the ordinary course of business and securing obligations which are not
overdue for a period of more than 15 days or which are being contested in good
faith by appropriate proceedings as to which any Borrower or any of their
subsidiaries, as the case may be, shall, to the extent required by GAAP, have
set aside on its books adequate reserves;
(c) Liens securing the payment of taxes, assessments and governmental
charges or levies, that are not delinquent or are being diligently contested in
good faith by appropriate proceedings and as to which adequate reserves have
been established in accordance with GAAP; provided, however, that in no event
shall the aggregate amount of such reserves be less than the aggregate amount
secured by such Liens;
(d) zoning restrictions, easements, licenses, reservations, provisions,
covenants, conditions, waivers, restrictions on the use of property or minor
irregularities of title (and with respect to leasehold interests, mortgages,
obligations, liens and other encumbrances incurred, created, assumed or
permitted to exist and arising by, through or under a landlord or owner of the
leased property, with or without consent of the lessee) which do not in the
aggregate materially detract from the value of its property or assets or
materially impair the use thereof in the operation of its business;
(e) Liens upon any equipment acquired through the purchase or lease
(including Capitalized Lease Obligations) by any Borrower or any of their
subsidiaries which are created or incurred contemporaneously with such
acquisition to secure or provide for the payment of any part of the purchase
price of, or lease payments on, such equipment and expenses relating thereto
(but no other amounts and not in excess of the purchase price or lease
payments); provided, however, that any such Lien shall not apply to any other
property of the Borrowers or any of their subsidiaries; and provided, further,
that after giving effect to such purchase or lease, compliance is maintained
with Section 7.07 hereof;
(f) Liens existing on the date of this Agreement and set forth in Schedule
7.01 annexed hereto but not the extension, renewal or refunding of the
Indebtedness secured thereby;
(g) Liens created in favor of the Agent for its own benefit and for the
benefit of the Lenders;
(h) Liens securing the performance of bids, tenders, leases, contracts
(other than for the repayment of borrowed money), statutory obligations, surety,
customs and appeal bonds and other obligations of like nature, incurred as an
incident to and in the ordinary course of business; or
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(i) Liens securing Indebtedness permitted under clause (x) of Section 7.03
hereof; provided, that such Lien shall be promptly disclosed to the Agent.
SECTION 7.02. Sale and Lease-Back Transactions. Enter into any
arrangement, directly or indirectly, with any person whereby any Borrower or any
of their subsidiaries shall sell or transfer any property, real or personal, and
used or useful in its business, whether now owned or hereafter acquired, and
thereafter rent or lease such property or other property which such Borrower or
such subsidiary intends to use for substantially the same purpose or purposes as
the property being sold or transferred.
SECTION 7.03. Indebtedness. Incur, create, assume or permit to exist any
Indebtedness other than (i) Indebtedness secured by Liens permitted under
Section 7.01, (ii) Indebtedness (including, without limitation, Guarantees)
existing on the date hereof and listed in Schedule 7.03 annexed hereto, but not
the extension, renewal or refunding thereof, (iii) Indebtedness incurred
hereunder, (iv) Indebtedness to trade creditors incurred in the ordinary course
of business, (v) Guarantees constituting the endorsement of negotiable
instruments for deposit or collection in the ordinary course of business, (vi)
Guarantees of the Obligations, (vii) purchase money Indebtedness to the extent
permitted by Sections 7.01 (e) and 7.07 hereof, (viii) Subordinated
Indebtedness, (ix) Indebtedness for judgments which do not constitute a Default
or an Event of Default under article Vl11(j), (x) contingent obligations (fully
reimbursable by insurance) incurred in respect of product warranties which are
provided to customers of any Borrower or any subsidiary in the ordinary course
of business and (xi) other Indebtedness not to exceed $100,000 in the aggregate
at any time outstanding.
SECTION 7.04. Dividends, Distributions and Payments. Declare or pay,
directly and indirectly, any cash dividends or make any other distribution,
whether in cash, property, securities or a combination thereof, with respect to
(whether by reduction of capital or otherwise) any shares of its capital stock
or directly or indirectly redeem, purchase, retire or otherwise acquire for
value (or permit any subsidiary to purchase or acquire) any shares of any class
of its capital stock or set aside any amount for any such purpose, except that
(i) any subsidiary of any Borrower may pay cash dividends to such Borrower, (ii)
so long as no Default or Event of Default shall have occurred and be continuing,
any Borrower may pay cash dividends to Holdings solely for the purpose of paying
taxes not otherwise immediately payable pursuant to tax sharing arrangements and
which arise from consolidated return filings by Holdings but only as and when
due and payable, and (iii) so long as no Default or Event of Default shall have
occurred and be continuing, the Borrowers may pay cash dividends to Holdings to
repurchase shares pursuant to written shareholders agreements or employment
arrangements relating to the death, disability, resignation or termination of
employment of any officer or employee; provided, that the aggregate amount
expended for such repurchases during the term of this Agreement shall not,
without the consent of the Required Lenders, exceed $500,000.
SECTION 7.05, Consolidations. Mergers and Sales of Assets. Consolidate
with or merge into any other person, or sell, lease, transfer or assign to any
persons or otherwise dispose of (whether in one transaction or a series of
transactions) any portion of its assets (whether now owned or hereafter
acquired), or sell any of its inventory, aggregating in
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excess of $50,000 in any Fiscal Year, other than (i) sales of inventory in the
ordinary course of business, (ii) sales or other dispositions of obsolete
equipment, (iii) the license of trademarks and other intellectual property for
fair value in the ordinary course of business to third parties and (iv)
Qualified Sales, or permit another person to merge into it, or acquire all or
substantially all the capital stock or assets of any other person.
SECTION 7.06. Investments. Own, purchase or acquire any stock,
obligations, assets (not in the ordinary course of business) or securities of,
or any interest in, or make any capital contribution or loan or advance to, any
other person, or make any other investments, except:
(a) certificates of deposit in dollars of any commercial banks registered
to do business in any state of the United States (i) having capital and surplus
in excess of $1,000,000,000 and (ii) whose long-term debt rating is at least
investment grade as determined by either Standard & Poor's Ratings Group or
Xxxxx'x Investors Service, Inc.;
(b) readily marketable direct obligations of the United States government
or any agency thereof which are backed by the full faith and credit of the
United States;
(c) investments in money market mutual funds having assets in excess of
$2,500,000,000;
(d) commercial paper at the time of acquisition having the highest rating
obtainable from either Standard & Poor's Ratings Group or Xxxxx'x Investors
Service, Inc.;
(e) federally tax exempt securities rated A or better by either Standard &
Poor's Ratings Group or Xxxxx'x Investors Service, Inc.;
(f) loans and advances to officers and employees for business purposes in
an aggregate amount not to exceed $50,000 in the aggregate outstanding at any
time for all loans and advances under this clause (f);
(g) investments in the stock of RVPI existing on the Original Closing
Date, but not any additional investments therein; and
(h) current assets arising from the sale or lease of goods or the
rendition of services in the ordinary course of business of the Borrowers;
provided that, in each case mentioned in (a), (b), (d), (e) and (9) above, such
obligations shall mature not more than one year from the date of acquisition
thereof.
SECTION 7.07. Capital Expenditures. Permit the aggregate amount of
payments made for capital expenditures, including Capitalized Lease Obligations
and Indebtedness secured by Liens permitted under Section 7.01(e) hereof, in
each of the periods indicated below to exceed the following amounts for the
Borrowers and their subsidiaries:
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--------------------------------------------------------------------------------
Period Maximum Amount
------ --------------
--------------------------------------------------------------------------------
Fiscal Year ending December 31, 1998 $1,700,000
--------------------------------------------------------------------------------
Fiscal Year ending December 31, 1999 $1,700,000
--------------------------------------------------------------------------------
Fiscal Year ending December 31, 2000 $3,000,000
--------------------------------------------------------------------------------
Fiscal Year ending December 31, 2001
and each Fiscal Year thereafter $1,700,000
--------------------------------------------------------------------------------
provided, however, that so long as no Default or Event of Default shall have
occurred and be continuing, if capital expenditures made in any Fiscal Year are
less than such amounts set forth above for such period, then an amount equal to
the unused portion may be carried forward and added to the amount of capital
expenditures permitted for the immediately succeeding Fiscal Year (but not any
other Fiscal Year).
Notwithstanding the foregoing, capital expenditures permitted to be made under
this Section 7.07 shall be deemed made as follows: first, from the amount
otherwise permitted to be paid for capital expenditures pursuant to this Section
7.07 and second, from any amounts permitted to be carried forward pursuant
thereto.
SECTION 7.08. Debt Service Coverage Ratio. Permit the Debt Service
Coverage Ratio of the Borrowers and their subsidiaries to be less than 2.00:1.00
for each four consecutive fiscal quarter period ending on the last day of each
fiscal quarter, commencing with the fiscal quarter ending March 31, 1999.
SECTION 7.09. Leverage Ratio: EBITDA. (a) Permit the Leverage Ratio of the
Borrowers and their subsidiaries to be greater than the respective ratios set
forth below at the end of the fiscal quarters indicated:
--------------------------------------------------------------------------------
Fiscal Quarter Ending Ratio
--------------------- -----
--------------------------------------------------------------------------------
March 31, 1999 1.00:1.00
--------------------------------------------------------------------------------
June 30, 1999 and September 30, 1999 0.85:1.00
--------------------------------------------------------------------------------
December 31, 1999 0.75:1.00
--------------------------------------------------------------------------------
March 31, 2000 and each
fiscal quarter thereafter 0.50:1.00
--------------------------------------------------------------------------------
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(b) Permit EBITDA of the Borrowers and their subsidiaries as at the end of
the periods set forth below to be less than:
--------------------------------------------------------------------------------
Period Amount
------ ------
--------------------------------------------------------------------------------
Fiscal quarter ending June 30, 1998 $5,400,000
--------------------------------------------------------------------------------
Two fiscal quarters ending
September 30, 1998 $10,650,000
--------------------------------------------------------------------------------
Three fiscal quarters ending
December 31, 1998 $14,500,000
--------------------------------------------------------------------------------
SECTION 7.10. Interest Coverage Ratio. Permit the Interest Coverage Ratio
of the Borrowers and their subsidiaries to be less than the respective ratios
set forth below at the end of the fiscal quarters indicated:
--------------------------------------------------------------------------------
Fiscal Quarter Ending Ratio
--------------------- -----
--------------------------------------------------------------------------------
June 30, 1998, September 30, 1998,
December 31, 1998 and March 31, 1999 1.70:1.00
--------------------------------------------------------------------------------
June 30, 1999 1.80:1.00
--------------------------------------------------------------------------------
September 30, 1999 1.90:1.00
--------------------------------------------------------------------------------
December 31, 1999, March 31, 2000,
June 30, 2000, September 30, 2000,
December 31, 2000, March 31, 2001,
June 30, 2001 and September 30, 2001 2.00:1.00
--------------------------------------------------------------------------------
December 31, 2001 and
each fiscal quarter thereafter 2.25:1.00
--------------------------------------------------------------------------------
SECTION 7.11. Business. Alter the nature of its business as operated on
the date of this Agreement other than any businesses or activities substantially
similar or related thereto.
SECTION 7.12. Sales of Receivables. Sell, assign, discount, transfer, or
otherwise dispose of any accounts receivable, promissory notes, drafts or trade
acceptances or other rights to receive payment held by it, with or without
recourse, except (i) for the purpose of collection or settlement in the ordinary
course of business or (ii) the sale of any such accounts to The Chase Manhattan
Bank.
SECTION 7.13. Use of Proceeds. Permit the proceeds of any Credit Event to
be used for any purpose which entails a violation of, or is inconsistent with,
Regulation G,
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T, U or X of the Board, or for any purpose other than those set forth in Section
4.14 hereof.
SECTION 7.14. ERISA. (a) Engage in any transaction in connection with
which the Borrowers or any ERISA Affiliate could be subject to either a material
civil penalty assessed pursuant to the provisions of Section 502 of ERISA or a
material tax imposed under the provisions of Section 4975 of the Code.
(b) Terminate any Pension Plan in a "distress termination" under Section
4041 of ERISA, or take any other action which could result in a material
liability of the Borrowers or any ERISA Affiliate to the PBGC.
(c) Fail to make payment when due of all amounts which, under the
provisions of any Plan, the Borrowers or any ERISA Affiliate are required to pay
as contributions thereto, or, with respect to any Pension Plan, permit to exist
any material "accumulated funding deficiency" (within the meaning of Section 302
of ERISA and Section 412 of the Code), whether or not waived, with respect
thereto.
(d) Adopt an amendment to any Pension Plan requiring the provision of
security under Section 307 of ERISA or Section 401 (a)(29) of the Code.
SECTION 7.15. Accounting Changes. Make, or permit any subsidiary to make,
any change in their accounting treatment or financial reporting practices except
as required or permitted by GAAP.
SECTION 7.16. Prepayment or Modification of Indebtedness: Modification of
Charter Documents. (a) Other than Indebtedness incurred hereunder, directly or
indirectly prepay, redeem, purchase or retire any Indebtedness, including,
without limitation, any Subordinated Indebtedness.
(b) Modify, amend or otherwise alter the terms and provisions of any
Subordinated Indebtedness.
(c) Modify, amend or alter their certificates or articles of
incorporation.
(d) Modify, amend or otherwise alter in any material respect the terms and
provisions of the Coast Distribution Agreement without the consent of the Agent.
SECTION 7. 17. Transactions with Affiliates. Except as otherwise
specifically set forth in this Agreement, including the transactions
contemplated by the Acquisition Documents and the Subordinated Notes, directly
or indirectly purchase, acquire or lease any property from, or sell, transfer or
lease any property to, or enter into any other transaction with, any
stockholder, Affiliate or agent of any Borrower, except at prices and on terms
not less favorable to it than that which would have been obtained in an arm's
length transaction with a non-affiliated third party.
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SECTION 7.18. Consulting Fees. Pay any management, consulting or other
fees of any kind to Holdings, any subsidiary thereof or any subsidiary of any
Borrower, or to any Affiliate of Holdings, any of its subsidiaries or of the
Borrowers or any of the Borrowers' subsidiaries.
SECTION 7.19. Negative Pledges. Etc. Enter into any agreement (other than
this Agreement, any other Loan Document) which (a) prohibits the creation or
assumption of any Lien upon any of the Collateral, including, without
limitation, any hereafter acquired property, or (b) specifically prohibits the
amendment or other modification of this Agreement or any other Loan Document.
VIII. EVENTS OF DEFAULT
In case of the happening of any of the following events (herein called
"Events of Default"):
(a) any representation or warranty made or deemed made in or in connection
with this Agreement, any of the Security Documents, the Notes or other Loan
Documents or any Credit Events hereunder, shall prove to have been incorrect in
any material respect when made or deemed to be made;
(b) default shall be made in the payment of any principal of any Note when
and as the same shall become due and payable, whether at the due date thereof or
at a date fixed for prepayment thereof or by acceleration thereof or otherwise;
(c) default shall be made in the payment of any interest on any Note, or
any fee or any other amount payable hereunder, or under the Notes, Letters of
Credit, or any other Loan Document or in connection with any other Credit Event
or the Transactions when and as the same shall become due and payable, and such
default shall continue for five (5) consecutive days;
(d) default shall be made in the due observance or performance of any
covenant, condition or agreement to be observed or performed on the part of any
Loan Party pursuant to the terms of this Agreement, any of the Notes, any of the
Security Documents or any other Loan Document (and with respect to defaults
under Sections 6.04, 6.06 and 6.07, such default shall continue for ten (10)
consecutive days);
(e) any Loan Party shall (i) voluntarily commence any proceeding or file
any petition seeking relief under Title 11 of the United States Code or any
other Federal, state or foreign bankruptcy, insolvency, liquidation or similar
law, (ii) consent to the institution of, or fail to contravene in a timely and
appropriate manner, any such proceeding or the filing of any such petition,
(iii) apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator or similar official for any Loan Party or for a substantial part of
its property or assets, (iv) file an answer admitting the material allegations
of a petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors, (vi) become unable, admit in writing
its inability
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or fail generally to pay its debts as they become due or (vii) take corporate
action for the purpose of effecting any of the foregoing;
(f) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i) relief
in respect of any Loan Party, or of a substantial part of the property or assets
of any Loan Party, under Title 11 of the United States Code or any other Federal
state or foreign bankruptcy, insolvency, receivership or similar law, (ii) the
appointment of a receiver, trustee, custodian, sequestrator or similar official
for any Loan Party or for a substantial part of the property of any Loan Party
or (iii) the winding-up or liquidation of any Loan Party; and such proceeding or
petition shall continue undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall continue unstayed and in effect for 60
days;
(g) default shall be made with respect to any Indebtedness (other than
Subordinated Indebtedness) or obligations under a capitalized lease of any Loan
Party (excluding Indebtedness outstanding hereunder), whose unpaid principal
amount exceeds (together with all other Indebtedness or capitalized leases in
default under this clause (g) $250,000 in the aggregate at any time, or default
shall be made with respect to any Subordinated Indebtedness, in either case, if
the effect of any such default shall be to accelerate, or to permit the holder
or obligee of any such Indebtedness or obligations under a capitalized lease (or
any trustee on behalf of such holder or obligee) at its option to accelerate,
the maturity of such Indebtedness or obligations under a capitalized lease;
(h) (i) a Reportable Event shall have occurred with respect to a Pension
Plan, (ii) the filing by any Loan Party, any ERISA Affiliate, or an
administrator of any Plan of a notice of intent to terminate such a Plan in a
"distress termination" under the provisions of Section 4041 of ERISA, (iii) the
receipt of notice by any Loan Party, any ERISA Affiliate, or an administrator of
a Plan that the PBGC has instituted proceedings to terminate (or appoint a
trustee to administer) such a Pension Plan, (iv) any other event or condition
exists which might, in the opinion of the Agent, constitute grounds under the
provisions of Section 4042 of ERISA for the termination of (or the appointment
of a trustee to administer) any Pension Plan by the PBGC, (v) a Pension Plan
shall fail to maintain the minimum funding standard required by Section 412 of
the Code for any plan year or a waiver of such standard is sought or granted
under the provisions of Section 412(d) of the Code, (vi) any Loan Party or any
ERISA Affiliate has incurred, or is likely to incur, a liability under the
provisions of Section 4062,4063, 4064 or 4201 of ERISA, (vii) any Loan Party or
any ERISA Affiliate fails to pay the full amount of an installment required
under Section 412(m) of the Code, (viii) the occurrence of any other event or
condition with respect to any Plan which would constitute an event of default
under any other agreement entered into by any Loan Party or any ERISA Affiliate,
and in each case in clauses (i) through (viii) of this subsection (h), such
event or condition, together with all other such events or conditions, if any,
could subject any Loan Party or any ERISA Affiliate to any taxes, penalties or
other liabilities which, in the opinion of the Agent, could have a Material
Adverse Effect on the financial condition of any Loan Party or any ERISA
Affiliate;
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(i) any Loan Party or any ERISA Affiliate (i) shall have been notified by
the sponsor of a Multiemployer Plan that it has incurred any material withdrawal
liability to such Multiemployer Plan, and (ii) does not have reasonable grounds
for contesting such withdrawal liability and is not in fact contesting such
withdrawal liability in a timely and appropriate manner;
(j) a judgment (not reimbursed by insurance policies of any Loan Party) or
decree for the payment of money, a fine or penalty which when taken together
with all other such judgments, decrees, fines and penalties shall exceed
$500,000 shall be rendered by a court or other tribunal against any Loan Party
and (i) shall remain undischarged or unbonded for a period of 60 consecutive
days during which the execution of such judgment, decree, fine or penalty shall
not have been stayed effectively or (ii) any judgment creditor or other person
shall legally commence actions to collect on or enforce such judgment, decree,
fine or penalty;
(k) this Agreement, any Note, any of the Security Documents, any Guarantee
or other Loan Documents shall for any reason cease to be, or shall be asserted
by any Loan Party not to be, a legal, valid and binding obligation of any Loan
Party, enforceable in accordance with its terms, or the security interest or
Lien purported to be created by any of the Security Documents shall for any
reason cease to be, or be asserted by any Loan Party not to be, a valid, first
priority perfected security interest in any Collateral (except to the extent
otherwise permitted under this Agreement or any of the Security Documents); or
(l) a Change of Control shall occur;
then, and in any such event (other than an event described in paragraph (e) or
(0 above), and at any time thereafter during the continuance of such event, the
Agent may, and upon the written request of the Required Lenders shall, by
written notice (or facsimile notice promptly confirmed in writing) to the
Borrowers, take any or all of the following actions at the same or different
times: (i) terminate forthwith all or any portion of the Total Commitment and
the obligations of the Lenders to issue Letters of Credit hereunder; (ii)
declare the Notes and any amounts then owing to the Lenders on account of
drawings under any Letters of Credit to be forthwith due and payable, and (iii)
require that the Borrowers remit to the Agent cash collateral in an amount equal
to the aggregate undrawn amount of all outstanding Letters of Credit at such
time, such cash collateral to be held by the Agent for its own benefit and the
benefit of the Lenders in a cash collateral account on terms and conditions
satisfactory to the Agent, whereupon the principal of such Notes, together with
accrued interest and fees thereon and any amounts then owing to the Lenders on
account of drawings under any Letters of Credit and other liabilities of the
Borrowers accrued hereunder, shall become forthwith due and payable both as to
principal and interest, without presentment, demand, protest or any other notice
of any kind, all of which are hereby expressly waived by the Borrowers, anything
contained herein or in the Notes to the contrary notwithstanding; provided,
however, that with respect to a default described in paragraph (e) or (f) above,
the Total Commitment and the obligation of the Lenders to issue Letters of
Credit shall automatically terminate and the principal of the Notes,
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together with accrued interest and fees thereon and any amounts then owing to
the Lenders on account of drawings under any Letters of Credit and any other
liabilities of the Borrowers accrued hereunder shall automatically become due
and payable, both as to principal and interest, without presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived by
the Borrowers, anything contained herein or in the Notes to the contrary
notwithstanding.
IX. AGENT
In order to expedite the transactions contemplated by this Agreement, The
Chase Manhattan Bank is hereby appointed to act as Agent on behalf of the
Lenders. Each of the Lenders and each subsequent holder of any Note or issuer of
any Letter of Credit by its acceptance thereof, irrevocably authorizes the Agent
to take such action on its behalf and to exercise such powers hereunder and
under the Security Documents and other Loan Documents as are specifically
delegated to or required of the Agent by the terms hereof and the terms thereof
together with such powers as are reasonably incidental thereto. Neither the
Agent nor any of its directors, officers, employees or agents shall be liable as
such for any action taken or omitted to be taken by it or them hereunder or
under any of the Security Documents and other Loan Documents or in connection
herewith or therewith (a) at the request or with the approval of the Required
Lenders (or, if otherwise specifically required hereunder or thereunder, the
consent of all the Lenders) or (b) in the absence of its or their own gross
negligence or willful misconduct.
The Agent is hereby expressly authorized on behalf of the Lenders, without
hereby limiting any implied authority, (a) to receive on behalf of each of the
Lenders any payment of principal of or interest on the Notes outstanding
hereunder and all other amounts accrued hereunder paid to the Agent, and
promptly to distribute to each Lender its proper share of all payments so
received, (b) to distribute to each Lender copies of all notices, agreements and
other material as provided for in this Agreement or in the Security Documents
and other Loan Documents as received by such Agent and (c) to take all actions
with respect to this Agreement and the Security Documents and other Loan
Documents as are specifically delegated to the Agent.
In the event that (a) any Borrower fails to pay when due the principal of
or interest on any Note, any amount payable under any Letter of Credit, or any
fee payable hereunder or (b) the Agent receives written notice of the occurrence
of a Default or an Event of Default, the Agent within a reasonable time shall
give written notice thereof to the Lenders, and shall take such action with
respect to such Event of Default or other condition or event as it shall be
directed to take by the Required Lenders; provided, however, that, unless and
until the Agent shall have received such directions, the Agent may take such
action or refrain from taking such action hereunder or under the Security
Documents or other Loan Documents with respect to a Default or Event of Default
as it shall deem advisable in the best interests of the Lenders.
The Agent shall not be responsible in any manner to any of the Lenders for
the effectiveness, enforceability, perfection, value, genuineness, validity or
due execution of
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this Agreement, the Notes or any of the other Loan Documents or Collateral or
any other agreements or certificates, requests, financial statements, notices or
opinions of counsel or for any recitals, statements, warranties or
representations contained herein or in any such instrument or be under any
obligation to ascertain or inquire as to the performance or observance of any of
the terms, provisions, covenants, conditions, agreements or obligations of this
Agreement or any of the other Loan Documents or any other agreements on the part
of the Borrowers and, without limiting the generality of the foregoing, the
Agent shall, in the absence of knowledge to the contrary, be entitled to accept
any certificate furnished pursuant to this Agreement or any of the other Loan
Documents as conclusive evidence of the facts stated therein and shall be
entitled to rely on any note, notice, consent, certificate, affidavit, letter,
telegram, teletype message, statement, order or other document which it believes
in good faith to be genuine and correct and to have been signed or sent by the
proper person or persons. It is understood and agreed that the Agent may
exercise its rights and powers under other agreements and instruments to which
it is or may be a party, and engage in other transactions with the Borrowers, as
though it were not Agent of the Lenders hereunder.
The Agent shall promptly give notice to the Lenders of the receipt or
sending of any notice, schedule, report, projection, financial statement or
other document or information pursuant to this Agreement or any of the other
Loan Documents and shall promptly forward a copy thereof to each Lender.
Neither the Agent nor any of its directors, officers, employees or agents
shall have any responsibility to the Borrowers on account of the failure or
delay in performance or breach by any Lender other than the Agent of any of its
obligations hereunder or to any Lender on account of the failure of or delay in
performance or breach by any other Lender or the Borrowers of any of their
respective obligations hereunder or in connection herewith.
The Agent may consult with legal counsel selected by it in connection with
matters arising under this Agreement or any of the other Loan Documents and any
action taken or suffered in good faith by it in accordance with the opinion of
such counsel shall be full justification and protection to it. The Agent may
exercise any of its powers and rights and perform any duty under this Agreement
or any of the other Loan Documents through agents or attorneys.
The Agent and the Borrowers may deem and treat the payee of any Note as
the holder thereof until written notice of transfer shall have been delivered as
provided herein by such payee to the Agent and the Borrowers.
With respect to the Loans made hereunder, the Notes issued to it and any
other Credit Event applicable to it, the Agent in its individual capacity and
not as an Agent shall have the same rights, powers and duties hereunder and
under any other agreement executed in connection herewith as any other Lender
and may exercise the same as though it were not the Agent, and the Agent and its
affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Borrowers or other affiliate thereof as if it were not
the Agent. Each of the Lenders
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hereby acknowledges that the Agent and/or one or more Affiliates of the Agent
may at any time and from time to time be a holder of equity interests in a Loan
Party.
Each Lender agrees (i) to reimburse the Agent in the amount of such
Lender's pro rata share (based on its Commitment hereunder) of any expenses
incurred for its own benefit and for the benefit of the Lenders by the Agent,
including counsel fees and compensation of agents and employees paid for
services rendered on behalf of the Lenders, not reimbursed by the Borrowers and
(ii) to indemnify and hold harmless the Agent and any of its directors,
officers, employees or agents, on demand, in the amount of its pro rata share,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted
against it in its capacity as the Agent or any of them in any way relating to or
arising out of this Agreement or any of the other Loan Documents or any action
taken or omitted by it or any of them under this Agreement or any of the other
Loan Documents, to the extent not reimbursed by the Borrowers; provided,
however, that no Lender shall be liable to the Agent for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgment, suits,
costs, expenses or disbursements resulting from the gross negligence or willful
misconduct of the Agent or any of its directors, officers, employees or agents.
Each Lender acknowledges that it has, independently and without reliance
upon the Agent or any other Lender and based on such documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement and any other Loan Document to which such Lender is party.
Each Lender also acknowledges that it will, independently and without reliance
upon the Agent or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own decisions in
taking or not taking action under or based upon this Agreement, any other Loan
Document, any related agreement or any document furnished hereunder.
Subject to the appointment and acceptance of a successor Agent as provided
below, the Agent may resign at any time by notifying the Lenders and the
Borrowers. Upon any such resignation, the Lenders shall have the right to
appoint a successor Agent. If no successor Agent shall have been so appointed by
such Lenders and shall have accepted such appointment within 30 days after the
retiring Agent gives notice of its resignation, then the retiring Agent may, on
behalf of the Lenders, appoint a successor Agent which shall be a bank with an
office (or an affiliate with an office) in New York, New York, having a combined
capital and surplus of at least $500,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor bank, such successor shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent and the retiring Agent shall be discharged from
its duties and obligations hereunder and under each of the other Loan Documents.
After any Agent's resignation hereunder, the provisions of this Article 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 Agent.
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The Lenders hereby acknowledge that the Agent shall be under no duty to
take any discretionary action permitted to be taken by the Agent pursuant to the
provisions of this Agreement or any of the other Loan Documents unless it shall
be requested in writing to do so by the Required Lenders. The Lenders hereby
further acknowledge that the Agent is not acting as the fiduciary of, or the
trustee for, any of the Lenders.
X. MANAGEMENT, COLLECTION AND STATUS OF RECEIVABLES AND OTHER COLLATERAL
SECTION 10.01. Collection of Receivables: Management of Collateral.
(a) At the request of the Agent, upon the occurrence and continuance of an
Event of Default, the Borrowers will, at their own cost and expense, (i) arrange
for remittances on Receivables to be made directly to lockboxes designated by
the Agent or in such other manner as the Agent may direct, and (ii) promptly
deposit all payments received by the Borrowers on account of Receivables,
whether in the form of cash, checks, notes, drafts, bills of exchange, money
orders or otherwise, in one or more accounts designated by the Agent in
precisely the form received (but with any endorsements of the Borrowers
necessary for deposit or collection), subject to withdrawal by the Agent only,
as hereinafter provided, and until such payments are deposited, such payments
shall be deemed to be held in trust by the Borrowers for and as the Lenders'
property and shall not be commingled with the Borrowers' other funds. All
remittances and payments that are deposited in accordance with the foregoing
will, after two Business Days (or three Business Days in the case of deposits
that are made after 1:00 p.m. (New York time), be applied by the Agent to reduce
the outstanding balance of the Revolving Credit Loans, subject to final
collection in cash of the item deposited.
Upon the occurrence and continuance of an Event of Default, the Agent may
send a notice of assignment and/or notice of the Agent's security interest to
any and all Customers or any third party holding or otherwise concerned with any
of the Collateral, and thereafter the Agent shall have the sole right to collect
the Receivables and/or take possession of the Collateral and the books and
records relating thereto. The Borrowers shall not, without the Agent's prior
written consent, grant any extension of the time of payment of any Receivable,
compromise or settle any Receivable for less than the full amount thereof,
release, in whole or in part, any person or property liable for the payment
thereof, or allow any credit or discount whatsoever thereon except, prior to the
occurrence and continuance of an Event of Default, as permitted by Section 10.03
hereof.
(b) (i) Each of the Borrowers hereby constitutes the Agent or the Agent's
designee as such Borrower's attorney-in-fact with power to endorse such
Borrower's name upon any notes, acceptances, checks, drafts, money orders or
other evidences of payment or Collateral that may come into its possession; upon
the occurrence and continuance of an Event of Default, to sign such Borrower's
name on any invoice or xxxx of lading relating to any Receivables, drafts
against Customers, assignments and
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verifications of Receivables and notices to Customers; to send verifications of
Receivables; upon the occurrence of an Event of Default, to notify the Postal
Service authorities to change the address for delivery of mail addressed to such
Borrower to such address as the Agent may designate; and to do all other acts
and things necessary to carry out this Agreement. All acts of said attorney or
designee are hereby ratified and approved, and said attorney or designee shall
not be liable for any acts of omission or commission, for any error of judgment
or for any mistake of fact or law, provided that the Agent or its designee shall
not be relieved of liability to the extent it is determined by a final judicial
decision that its act, error or mistake constituted gross negligence or willful
misconduct. This power of attorney being coupled with an interest is irrevocable
until all of the Obligations are paid in full and this Agreement and the Total
Commitment is terminated.
(ii) The Agent, without notice to or consent of the Borrowers, upon the
occurrence and during the continuance of an Event of Default, (A) may xxx upon
or otherwise collect, extend the time of payment of, or compromise or settle for
cash, credit or otherwise upon any terms, any of the Receivables or any
securities, instruments or insurance applicable thereto and/or release the
obligor thereon; (B) is authorized and empowered to accept the return of the
goods represented by any of the Receivables; and (C) shall have the right to
receive, endorse, assign and/or deliver in its name or the name of any Borrower
any and all checks, drafts and other instruments for the payment of money
relating to the Receivables, and the Borrowers hereby waive notice of
presentment, protest and non-payment of any instrument so endorsed.
(c) Nothing herein contained shall be construed to constitute any Borrower
as agent of the Agent for any purpose whatsoever, and the Agent shall not be
responsible or liable for any shortage, discrepancy, damage, loss or destruction
of any part of the Collateral wherever the same may be located and regardless of
the cause thereof (except to the extent it is determined by a final judicial
decision that the Agent's or a Lender's act or omission constituted gross
negligence or willful misconduct). The Agent and the Lenders shall not, under
any circumstances or in any event whatsoever, have any liability for any error
or omission or delay of any kind occurring in the settlement, collection or
payment of any of the Receivables or any instrument received in payment thereof
or for any damage resulting therefrom (except to the extent it is determined by
a final judicial decision that the Agent's or such Lender's error, omission or
delay constituted gross negligence or willful misconduct). The Agent and the
Lenders do not, by anything herein or in any assignment or otherwise, assume any
of the Borrowers' obligations under any contract or agreement assigned to the
Agent or the Lenders, and the Agent and the Lenders shall not be responsible in
any way for the performance by the Borrowers of any of the terms and conditions
thereof.
(d) If any of the Receivables includes a charge for any tax payable to any
governmental tax authority, the Agent is hereby authorized (but in no event
obligated) in its discretion to pay the amount thereof to the proper taxing
authority for the account of the applicable Borrower and to charge the
Borrowers' account therefor. The Borrowers shall notify the Agent if any
Receivables include any tax due to any such taxing authority and, in the absence
of such notice, the Agent shall have the right to retain the full
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proceeds of such Receivables and shall not be liable for any taxes that may be
due from any Borrower by reason of the sale and delivery creating such
Receivables.
SECTION 10.02. Receivables Documentation. The Borrowers will, in addition
to the monthly Receivables aging delivered pursuant to this Agreement, at such
intervals as the Agent may require, furnish such further schedules and/or
information as the Agent may require relating to the Receivables, including,
without limitation, sales invoices. In addition, the Borrowers shall notify the
Agent of any non-compliance in respect of the representations, warranties and
covenants contained in Section 10.03 hereof. The items to be provided under this
Section 10.02 are to be in form satisfactory to the Agent and are to be executed
and delivered to the Agent from time to time solely for its convenience in
maintaining records of the Collateral; the Borrowers' failure to give any of
such items to the Agent shall not affect, terminate, modify or otherwise limit
the Agent's Lien or security interest in the Collateral.
SECTION 10.03. Status of Receivables and Other Collateral. Each Borrower
covenants, represents and warrants that: (a) it shall be the sole owner, free
and clear of all Liens except in favor of the Agent or otherwise permitted
hereunder, of and fully authorized to sell, transfer, pledge and/or grant a
security interest in each and every item of said Collateral owned by it; (b)
each Receivable shall be a good and valid account representing an undisputed
bona fide indebtedness incurred or an amount indisputably owed by the Customer
therein named, for a fixed sum as set forth in the invoice relating thereto with
respect to an absolute sale and delivery upon the specified terms of goods sold
by a Borrower, or work, labor and/or services theretofore rendered by a
Borrower; (c) no Receivable is or shall be subject to any defense, offset,
counterclaim, discount or allowance (as of the time of its creation) except as
may be stated in the invoice relating thereto or discounts and allowances as may
be customary in such Borrower's business; (d) none of the transactions
underlying or giving rise to any Receivable shall violate any applicable state
or federal laws or regulations, and all documents relating to any Receivable
shall be legally sufficient under such laws or regulations and shall be legally
enforceable in accordance with their terms; (e) all documents and agreements
relating to Receivables shall be true and correct and in all respects what they
purport to be; (0 to the best of its knowledge, all signatures and endorsements
that appear on all documents and agreements relating to Receivables shall be
genuine and all signatories and endorsers with respect thereto shall have full
capacity to contract; (9) it shall maintain books and records pertaining to the
Collateral in such detail, form and scope as the Agent shall require; (h) it
will immediately notify the Agent if any accounts arise out of contracts with
the United States or any department, agency or instrumentality thereof, and will
execute any instruments and take any steps required by the Agent in order that
all monies due or to become due under any such contract shall be assigned to the
Agent and notice thereof given to the United States Government under the Federal
Assignment of Claims Act; (i) it will, immediately upon learning thereof, report
to the Agent any material loss or destruction of, or substantial damage to, any
of the Collateral, and any other matters affecting the value, enforceability or
collectability of any of the Collateral; 0) if any amount payable under or in
connection with any Receivable is evidenced by a promissory note or other
instrument, as such terms are defined in the Uniform Commercial Code, such
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promissory note or instrument shall be immediately pledged, endorsed, assigned
and delivered to the Agent as additional collateral; (k) it shall not re-date
any invoice or sale or make sales on extended dating beyond that customary in
the industry; (I) it shall conduct a physical count of its inventory at such
intervals as the Agent may request and promptly supply the Agent with a copy of
such counts accompanied by a report of the value (based on the lower of cost (on
a FIFO basis) or market value) of such inventory; provided, that the Agent shall
not request a physical count for any twelve-month period, more frequently than
once during such period (unless a Default or an Event of Default has occurred
and is continuing in which case as often as the Agent may request) and (m) it is
not nor shall it be entitled to pledge the Lenders' credit on any purchases or
for any purpose whatsoever.
SECTION 10.04. Monthly Statement of Account. The Agent shall render to the
Borrowers each month a statement of the Borrowers' account, which shall
constitute an account stated and shall be deemed to be correct and accepted by
and be binding upon the Borrowers unless the Agent receives a written statement
of the Borrowers' exceptions within 30 days after such statement was rendered to
the Borrowers.
SECTION 10.05. Collateral Custodian. Upon the occurrence and continuance
of an Event of Default, the Agent may at any time and from time to time employ
and maintain in the premises of the Borrowers a custodian selected by the Agent
who shall have full authority to do all acts necessary to protect the Agent's
and Lenders' interests and to report to the Agent thereon. The Borrowers hereby
agree to cooperate with any such custodian and to do whatever the Agent may
reasonably request to preserve the Collateral. All costs and expenses incurred
by the Agent by reason of the employment of the custodian shall be charged to
the Borrowers' account and added to the Obligations.
Xl. MISCELLANEOUS
SECTION 11.01. Notices. Notices, consents and other communications
provided for herein shall be in writing and shall be delivered or mailed (or in
the case of telex or facsimile communication, delivered by telex, graphic
scanning, telecopier or other telecommunications equipment, with receipt
confirmed) addressed,
(a) if to all or any of the Borrowers, Guarantors, or Grantors, at 0000
Xx. Xxxxxxx, Xxxxxxx, Xxxxxx 00000, Attention: Xxxxxx X. Xxxxx, Chief Executive
Officer, with a copy to Xxxxxxxx & Xxxxx, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Xxxx X. Xxxxx, Esq.
(b) if to the Agent, at The Chase Manhattan Bank, Middle Market Structured
Finance Division, 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Credit Executive, with a copy to Kaye, Scholer, LLP, et al., at 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X. Xxxxxxx, Esq.; and
(c) if to any Lender, at the address set forth below its name in Schedule
2.01 annexed hereto.
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All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt if hand delivered or three days after being sent by
registered or certified mail, postage prepaid, return receipt requested, if by
mail, or upon receipt if by any telex, facsimile or other telecommunications
equipment, in each case addressed to such party as provided in this Section
11.01 or in accordance with the latest unrevoked direction from such party.
SECTION 11.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by any Borrower or any subsidiary thereof
herein and in the certificates or other instruments prepared or delivered in
connection with this Agreement, any of the Security Documents, any Guarantee or
any other Loan Document, shall be considered to have been relied upon by the
Lenders and shall survive the making by the Lenders of the Loans and the
execution and delivery to the Lenders of the Notes and occurrence of any other
Credit Event and shall continue in full force and effect as long as the
principal of or any accrued interest on the Notes or any other fee or amount
payable under the Notes or this Agreement or any other Loan Document is
outstanding and unpaid and so long as the Total Commitment has not been
terminated.
SECTION 11.03. Successors and Assigns: Participations. (a) Whenever in
this Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and permitted assigns of such party; and all
covenants, promises and agreements by or on behalf of any Borrower, any
Guarantor, any Grantor, any ERISA Affiliate, any subsidiary of any thereof, the
Agent or the Lenders, that are contained in this Agreement shall bind and inure
to the benefit of their respective successors and assigns. Without limiting the
generality of the foregoing, the Borrowers specifically confirm that any Lender
may at any time and from time to time pledge or otherwise grant a security
interest in any Loan or any Note (or any part thereof) to any Federal Reserve
Bank. No Borrower may assign or transfer any of their rights or obligations
hereunder without the written consent of all the Lenders.
(b) Each Lender, without the consent of the Borrowers or the Agent, may
sell participations to one or more banks or other entities in all or a portion
of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Revolving Credit Commitment or Term Loan
Commitment) and the Loans owing to it and undrawn Letters of Credit and the
Notes held by it); provided, however, that (i) such Lender's obligations under
this Agreement (including, without limitation, its Revolving Credit Commitment
and Term Loan Commitment) shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) the banks or other entities buying participations shall be
entitled to the cost protection provisions contained in Sections 2.10, 2.12 and
2.15 hereof, but only to the extent any of such Sections would be available to
the Lender which sold such participation, and (iv) the Borrowers, the Agent and
the other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement;
provided, further, however, that each Lender shall retain the sole right and
responsibility to enforce the obligations of the Borrowers,
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Grantors and the Guarantors relating to the Loans, including, without
limitation, the right to approve any amendment, modification or waiver of any
provision of this Agreement, other than amendments, modifications or waivers
with respect to decreasing any fees payable hereunder or the amount of principal
or the rate of interest payable on, or the dates fixed for any payment of
principal of or interest on, the Loans or changing or extending the Commitments
or the release of all Collateral.
(c) Each Lender may assign by novation, to any one or more banks or other
entities with the prior written consent of the Borrowers (such consent not to be
unreasonably withheld) and with the prior written consent of the Agent, all or a
portion of its interests, rights and obligations under this Agreement and the
other Loan Documents (including, without limitation, all or a portion of its
Revolving Credit Commitment and Term Loan Commitment and the same portion of the
Loans and undrawn Letters of Credit at the time owing to it and the Note or
Notes held by it), provided, however, that (i) each such assignment shall be of
a constant, and not a varying, percentage of all of the assigning Lender's
rights and obligations under this Agreement, which shall include the same
percentage interest in the Loans, Letters of Credit and Notes, (ii) the amount
of the Revolving Credit Commitment and Term Loan Commitment of the assigning
Lender being assigned pursuant to each such assignment (determined as of the
date the Assignment and Acceptance with respect to such assignment is delivered
to the Agent) shall be in a minimum principal amount of $5,000,000 in the
aggregate for the Revolving Credit Commitment and Term Loan Commitment of such
Lender and the amount of the Revolving Credit Commitment and Term Loan
Commitment of such Lender shall not be less than $5,000,000 or shall be zero,
(iii) the parties to each such assignment shall execute and deliver to the
Agent, for its acceptance and recording in the Register (as defined below), an
Assignment and Acceptance, together with any Note subject to such assignment and
a processing and recordation fee of $3,500 and (iv) the assignee, if it shall
not be a Lender, shall deliver to the Agent an Administrative Questionnaire in
the form provided to such assignee by the Agent. Upon such execution, delivery,
acceptance and recording and after receipt of the written consent of the Agent,
from and after the effective date specified in each Assignment and Acceptance,
which effective date shall be at least five (5) Business Days after the
execution thereof, (x) the assignee thereunder shall be a party hereto and, to
the extent provided in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and under the other Loan Documents and (y) the
Lender which is assignor thereunder shall, to the extent provided in such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto but shall continue to be entitled
to the benefits of Sections 2.10, 2.12, 2.15 and 11.04, as well as any fees
accrued for its account hereunder and not yet paid).
(d) By executing and delivering an Assignment and Acceptance, the Lender
which is assignor thereunder and the assignee thereunder confirm to, and agree
with, each other and the other parties hereto as follows: (i) other than the
representation and warranty that it is the legal and beneficial owner of the
interest being assigned thereunder free and clear of any adverse claim, and that
its Commitment and the
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outstanding balance of its Loans and participations in Letters of Credit, in
each case without giving effect to assignments thereof which have not become
effective, are as set forth in such Assignment and Acceptance, such Lender makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, perfection,
genuineness, sufficiency or value of this Agreement, the other Loan Documents or
any Collateral with respect thereto or any other instrument or document
furnished pursuant hereto or thereto; (ii) such Lender makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of any Borrower, or any Grantor or Guarantor or the performance or
observance by any Borrower or any Grantor or Guarantor of any of their
respective obligations under this Agreement, any Guarantees or any of the other
Loan Documents or any other instrument or document furnished pursuant hereto or
thereto; (iii) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance and confirms that it has
received a copy of this Agreement, any Guarantees and of the other Loan
Documents, together with copies of financial statements and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Agent, such Lender or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (v) such assignee appoints and authorizes the Agent
to take such action as the Agent on its behalf and to exercise such powers under
this Agreement as are delegated to the Agent by the terms hereof, together with
such powers as are reasonably incidental thereto; and (vi) such assignee agrees
that it will perform in accordance with their terms all of the obligations which
by the terms of this Agreement are required to be performed by it as a Lender.
(e) The Agent shall maintain at its address referred to in Section 11.01
hereof a copy of each Assignment and Acceptance delivered to it and a register
for the recordation of the names and addresses of the Lenders and the Revolving
Credit Commitment or Term Loan Commitment, as the case may be, of, and principal
amount of the Loans owing to, each Lender from time to time (the "Register").
The entries in the Register shall be conclusive, in the absence of manifest
error, and the Borrowers, the Agent and the Lenders may treat each person whose
name is recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrowers or
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(f) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee together with any Note or Notes subject to such
assignment, any processing and recordation fee and, if required, an
Administrative Questionnaire and the written consent to such assignment, the
Agent shall, if such Assignment and Acceptance has been completed and is
precisely in the form of Exhibit F annexed hereto, (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in the Register
and (iii) give prompt notice thereof to the Lenders and the Borrowers. Within
five (5) Business Days after receipt of such notice, the Borrowers,
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at their own expense, shall execute and deliver to the Agent in exchange for
each surrendered Note or Notes a new Note or Notes to the order of such assignee
in an amount equal to its portion of the Term Loan Commitment and Revolving
Credit Commitment, assumed by it pursuant to such Assignment and Acceptance and,
if the assigning Lender has retained any Term Loan Commitment and Revolving
Credit Commitment hereunder, a new Note or Notes to the order of the assigning
Lender in an amount equal to the Term Loan Commitment and Revolving Credit
Commitment, retained by it hereunder. Such new Note or Notes shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Note or Notes, or, with respect to the Term Notes, the principal
amount of the Term Notes outstanding at such time as evidenced by the Term Note
or Notes, shall be dated the effective date of such Assignment and Acceptance
and shall otherwise be in substantially the form of Exhibit A and Exhibit B.
Notes surrendered to the Borrowers shall be canceled by the Borrowers.
Notwithstanding any other provision herein, any Lender may, in connection
with any assignment or participation or proposed assignment or participation
pursuant to this Section 11.03, disclose to the assignee or participant or
proposed assignee or participant, any information, including, without
limitation, any Information, relating to the Borrowers furnished to such Lender
by or on behalf of the Borrowers in connection with this Agreement; provided,
however, that prior to any such disclosure, each such assignee or participant or
proposed assignee or participant shall agree to preserve the confidentiality of
any confidential Information relating to the Borrowers received from such
Lender.
SECTION 11.04. Expenses: Indemnity. (a) Each of the Borrowers agrees to
pay all reasonable out-of-pocket expenses incurred by the Agent in connection
with due diligence and the preparation, execution and delivery of this Agreement
and the other Loan Documents or with any amendments, modifications, waivers,
extensions, renewals, renegotiations or "workouts" of the provisions hereof or
thereof (whether or not the transactions hereby contemplated shall be
consummated) or incurred by the Agent or any of the Lenders in connection with
the enforcement or protection of its rights in connection with this Agreement or
any of the other Loan Documents or with the Loans made or the Notes or Letters
of Credit issued hereunder, or in connection with any pending or threatened
action, proceeding, or investigation relating to the foregoing, including but
not limited to the reasonable fees, charges and disbursements of counsel for the
Agent and ongoing field examination expenses and charges, and, in connection
with such enforcement or protection, the reasonable fees and disbursements of
counsel for the Lenders. Each of the Borrowers further indemnifies the Lenders
from and agrees to hold them harmless against any documentary taxes, assessments
or charges made by any governmental authority by reason of the execution and
delivery of this Agreement or the Notes.
(b) Each of the Borrowers indemnifies the Agent and each Lender and their
respective directors, officers, employees and agents against, and agrees to hold
the Agent, each Lender and each such person harmless from, any and all losses,
claims, damages, liabilities and related expenses, including reasonable counsel
fees and
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expenses, incurred by or asserted against the Lender or any such person arising
out of, in any way connected with, or as a result of (i) the use of any of the
proceeds of the Loans, (ii) this Agreement, the Guarantees, any of the Security
Documents, Acquisition Documents, the Crispaire Acquisition Documents or the
other documents contemplated hereby or thereby, (iii) the performance by the
parties hereto and thereto of their respective obligations hereunder and
thereunder (including but not limited to the making of the Total Commitment) and
consummation of the transactions contemplated hereby and thereby, (iv) breach of
any representation or warranty, or (v) any claim, litigation, investigation or
proceedings relating to any of the foregoing, whether or not the Agent, any
Lender or any such person is a party thereto; provided, however, that such
indemnity shall not, as to the Agent or any Lender, apply to any such losses,
claims, damages, liabilities or related expenses to the extent that they result
from the gross negligence or willful misconduct of the Agent or any Lender.
(c) Each of the Borrowers indemnifies, and agrees to defend and hold
harmless the Agent and the Lenders and their respective officers, directors,
shareholders, agents and employees (collectively, the "Indemnitees") from and
against any loss, cost, damage, liability, lien, deficiency, fine, penalty or
expense (including, without limitation, reasonable attorneys' fees and
reasonable expenses for investigation, removal, cleanup and remedial costs)
arising from a violation of, or failure to comply with any Environmental Law and
to remove any Lien arising therefrom except to the extent caused by the gross
negligence or willful misconduct of any Indemnitee, which any of the Indemnitees
may incur or which may be claimed or recorded against any of the Indemnitees by
any person.
(d) The provisions of this Section 11.04 shall remain operative and in
full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the invalidity or unenforceability of any term or
provision of this Agreement or the Notes, or any investigation made by or on
behalf of the Agent or any Lender. All amounts due under this Section 11.04
shall be payable on written demand therefor.
SECTION 11.05. Applicable Law. THIS AGREEMENT AND THE NOTES SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK
(OTHER THAN THE CONFLICTS OF LAWS PRINCIPLES THEREOF).
SECTION 11.06. Right of Setoff. If an Event of Default shall have occurred
and be continuing, upon the request of the Required Lenders each Lender shall
and is hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the credit or the
account of any Borrower against any and all of the obligations of the Borrowers
now or hereafter existing under this Agreement and the Notes held by such
Lender, irrespective of whether or not such Lender shall have made any demand
under this Agreement or the Notes and although such obligations may be
unmatured. Each Lender agrees to notify promptly the Agent and the Borrowers
after
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any such setoff and application made by such Lender, but the failure to give
such notice shall not affect the validity of such setoff and application. The
rights of each Lender under this Section are in addition to other rights and
remedies (including, without limitation, other rights of setoff) which may be
available to such Lender.
SECTION 11.07. Payments on Business Days. (a) Should the principal of or
interest on the Notes or any fee or other amount payable hereunder become due
and payable on other than a Business Day, payment in respect thereof may be made
on the next succeeding Business Day (except as otherwise specified in the
definition of "Interest Period"), and such extension of time shall in such case
be included in computing interest, if any, in connection with such payment.
(b) All payments by any Borrower hereunder and all Loans made by the
Lenders hereunder shall be made in lawful money of the United States of America
in immediately available funds at the office of the Agent set forth in Section
11.01 hereof.
SECTION 11.08. Waivers: Amendments. (a) No failure or delay of any Lender
in exercising any power or right hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such right or power, preclude
any other or further exercise thereof or the exercise of any other right or
power. The rights and remedies of the Lenders hereunder are cumulative and not
exclusive of any rights or remedies which they may otherwise have. No waiver of
any provision of this Agreement or the Notes nor consent to any departure by any
Borrower therefrom shall in any event be effective unless the same shall be
authorized as provided in paragraph (b) below, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on any Borrower in any case shall entitle it to
any other or further notice or demand in similar or other circumstances. Each
holder of any of the Notes shall be bound by any amendment, modification, waiver
or consent authorized as provided herein, whether or not such Note shall have
been marked to indicate such amendment, modification, waiver or consent.
(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Borrowers and the Required Lenders; provided, however, that no such
agreement shall (i) change the principal amount of, or extend or advance the
maturity of or the dates for the payment of principal of or interest on, any
Note or reduce the rate of interest on any Note, (ii) increase the Revolving
Credit Commitment or Term Loan Commitment of any Lender or amend or modify the
provisions of this Section, Section 2.06, Section 2.13, Section 4.14 or Section
11.04 hereof or the definition of "Required Lenders," or (iii) release any
material portion of Collateral (except permitted dispositions provided for in
Section 7.05 hereof), in each case without the prior written consent of each
Lender affected thereby and provided, further, however, that no such agreement
shall amend, modify or otherwise affect the rights or duties of the Agent under
this Agreement or the other Loan Documents without the written consent of the
Agent. Each Lender and holder of any Note shall be bound by any modification or
amendment authorized by this Section regardless of whether its Notes shall be
marked to make reference thereto, and
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any consent by any Lender or holder of a Note pursuant to this Section shall
bind any person subsequently acquiring a Note from it, whether or not such Note
shall be so marked.
(c) In the event that the Borrowers request, with respect to this
Agreement or any other Loan Document, an amendment, modification or waiver and
such amendment, modification or waiver would require the unanimous consent of
all of the Lenders in accordance with Section 11.08(b) above, and such
amendment, modification or waiver is agreed to in writing by the Borrowers and
the Required Lenders but not by all of the Lenders, then notwithstanding
anything to the contrary in Section 11.08(b) above, with the written consent of
the Borrowers and such Required Lenders, the Borrowers and Required Lenders may,
but shall not be obligated to, amend this Agreement without the consent of the
Lender or Lenders who did not agree to the proposed amendment, modification or
waiver (the "Minority Lenders") solely to provide for (i) the termination of the
Revolving Credit Commitment and Term Loan Commitment of each Minority Lender,
(ii) the assignment in accordance with Section 11.03 hereof to one or more
persons of each Minority Lender's interests, rights and obligations under this
Agreement (including, without limitation, all of such Minority Lender's
Revolving Credit Commitment and Term Loan Commitment as well as its portion of
all outstanding Loans and the Note or Notes held by such Minority Lender) and
the other Loan Documents and/or an increase in the Revolving Credit Commitment
and Term Loan Commitment of one or more Required Lenders, in each case so that
after giving effect thereto the Total Revolving Credit Commitment and Total Term
Loan Commitment shall be in the same amounts as prior to the events described in
this paragraph, (iii) the repayment to the Minority Lenders in full of all Loans
outstanding and accrued interest thereon at the time of the assignment and/or
increase in Commitments described in clause (ii) above with the proceeds of
Loans made by such persons who are to become Lenders by assignment or with the
proceeds of Loans made by Required Lenders who have agreed to increase their
Revolving Credit Commitment and/or Term Loan Commitment, (iv) the payment to the
Minority Lenders by the Borrowers of all fees and other compensation due and
owing such Minority Lenders under the terms of this Agreement and the other Loan
Documents and (v) such other modifications as the Required Lenders and the
Borrowers shall deem necessary in order to effect to changes specified in
clauses (i) through (iv) hereof.
SECTION 11.09. Severability. In the event any one or more of the
provisions contained in this Agreement or in the Notes should be held invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein or therein shall not
in any way be affected or impaired thereby.
SECTION 11.10. Entire Agreement: Waiver of Jury Trial. etc. (a) This
Agreement, the Notes and the other Loan Documents constitute the entire contract
between the parties hereto relative to the subject matter hereof. Any previous
agreement among the parties hereto with respect to the Transactions is
superseded by this Agreement, the Notes and the other Loan Documents. Except as
expressly provided herein or in the Notes or the Loan Documents (other than this
Agreement),
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nothing in this Agreement, the Notes or in the other Loan Documents, expressed
or implied, is intended to confer upon any party, other than the parties hereto,
any rights, remedies, obligations or liabilities under or by reason of this
Agreement, the Notes or the other Loan Documents.
(b) Except as prohibited by law, each party hereto hereby waives any right
it may have to a trial by jury in respect of any litigation directly or
indirectly arising out of, under or in connection with this Agreement, the
Notes, any of the other Loan Documents or the Transactions.
(c) Except as prohibited by law, each party hereto hereby waives any right
it may have to claim or recover in any litigation referred to in paragraph (b)
of this Section 11.10 any special, exemplary, punitive or consequential damages
or any damages other than, or in addition to, actual damages.
(d) Each party hereto (i) certifies that no representative, agent or
attorney of any Lender has represented, expressly or otherwise, that such Lender
would not, in the event of litigation, seek to enforce the foregoing waivers and
(ii) acknowledges that it has been induced to enter into this Agreement, the
Notes or the other Loan Documents, as applicable, by, among other things, the
mutual waivers and certifications herein.
SECTION 11.11. Confidentiality. The Agent and the Lenders agree to keep
confidential (and to cause their respective officers, directors, employees,
agents and representatives to keep confidential) all information, materials and
documents furnished to the Agent or any Lender (the "Information").
Notwithstanding the foregoing, the Agent and each Lender shall be permitted to
disclose Information (i) to such of its officers, directors, employees, agents
and representatives as need to know such Information in connection with its
participation in any of the Transactions or the administration of this Agreement
or the other Loan Documents (subject to confidentiality obligations equivalent
to those set forth herein); (ii) to the extent required by applicable laws and
regulations or by any subpoena or similar legal process, or requested by any
governmental agency or authority; (iii) to the extent such Information (A)
becomes publicly available other than as a result of a breach of this Agreement,
(B) becomes available to the Agent or such Lender on a non-confidential basis
from a source other than any Borrower, any Guarantor, any Grantor or any of
their respective subsidiaries or (C) was available to the Agent or such Lender
on a non-confidential basis prior to its disclosure to the Agent or such Lender
by any Borrower, any Guarantor, any Grantor or any of their respective
subsidiaries; (iv) to the extent any Borrower, any Guarantor or any of their
respective subsidiaries shall have consented to such disclosure in writing; (v)
in connection with the sale of any Collateral pursuant to the provisions of any
of the other Loan Documents; or (vi) pursuant to Section 11.03(g) hereof.
SECTION 11.12. Submission to Jurisdiction. (a) Any legal action or
proceeding with respect to this Agreement or the Notes or any other Loan
Document may be brought in the courts of the State of New York or of the United
States of America for the Southern District of New York, and, by execution and
delivery of this Agreement, each
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of the Borrowers and each of the Guarantors hereby accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction of the
aforesaid courts.
(b) Each of the Borrowers and each of the Guarantors hereby irrevocably
waives, in connection with any such action or proceeding, any objection,
including, without limitation, any objection to the laying of venue or based on
the grounds of forum non conveniens, which they may now or hereafter have to the
bringing of any such action or proceeding in such respective jurisdictions.
(c) Each of the Borrowers and each of the Guarantors hereby irrevocably
consents to the service of process of any of the aforementioned courts in any
such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to each such person, as the case may be, at its
address set forth in Section 11.01 hereof.
(d) Nothing herein shall affect the right of the Agent or any Lender to
serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against any Borrower or any Guarantor in any
other jurisdiction.
SECTION 11.13. Counterparts: Facsimile Signature. This Agreement may be
executed in counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one contract, and shall become
effective when copies hereof which, when taken together, bear the signatures of
each of the parties hereto shall be delivered to the Agent. Delivery of an
executed counterpart of a signature page to this Agreement by telecopier shall
be effective as delivery of a manually executed signature page hereto.
SECTION 11.14. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only and are not to affect
the construction of, or to be taken into consideration in interpreting, this
Agreement.
XII. GUARANTEES
Each Guarantor unconditionally guarantees, as a primary obligor and not
merely as a surety, jointly and severally with each other Guarantor, the due and
punctual payment of the principal of and interest on each of the Notes, when and
as due, whether at maturity, by acceleration, by notice of prepayment or
otherwise, and the due and punctual performance of all other Obligations. Each
Guarantor further agrees that the Obligations may be extended and renewed, in
whole or in part, without notice to or further assent from it, and that it will
remain bound upon its guarantee notwithstanding any extension or renewal of any
Obligations.
Each Guarantor waives presentment to, demand of payment from and protest
to the Borrowers of any of the Obligations, and also waives notice of acceptance
of its guarantee and notice of protest for nonpayment. The obligations of a
Guarantor hereunder shall not be affected by (a) the failure of any Lender or
the Agent to assert any claim or demand or to enforce any right or remedy
against the Borrowers or any
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other Guarantor under the provisions of this Agreement, the Notes or any of the
other Loan Documents or otherwise; (b) any rescission, waiver, amendment or
modification of any of the terms or provisions of this Agreement, the Notes, any
of the other Loan Documents, any guarantee or any other agreement; (c) the
release of any security held by the Agent for the Obligations or any of them; or
(d) the failure of any Lender to exercise any right or remedy against any other
Guarantor of the Obligations.
Each Guarantor further agrees that its guarantee constitutes a guarantee
of payment when due and not of collection, and waives any right to require that
any resort be had by any Lender to any security (including, without limitation,
any Collateral) held for payment of the Obligations or to any balance of any
deposit account or credit on the books of any Lender in favor of the Borrowers
or any other person.
The obligations of each Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, including,
without limitation, any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to any defense or setoff, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of each Guarantor hereunder shall
not be discharged or impaired or otherwise affected by the failure of the Agent
or any Lender to assert any claim or demand or to enforce any remedy under this
Agreement, the Notes or under any other Loan Document, any guarantee or any
other agreement, by any waiver or modification of any provision thereof, by any
default, failure or delay, willful or otherwise, in the performance of the
Obligations, or by any other act or omission which may or might in any manner or
to any extent vary the risk of such Guarantor or otherwise operate as a
discharge of such Guarantor as a matter of law or equity.
Each Guarantor further agrees that its guarantee shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any
part thereof, of principal of or interest on any Obligation is rescinded or must
otherwise be returned by the Agent or any Lender upon the bankruptcy or
reorganization of any Borrower or otherwise.
Each Guarantor hereby waives and releases all rights of subrogation
against the Borrowers and their property and all rights of indemnification,
contribution and reimbursement from the Borrowers and their property, in each
case in connection with this guarantee and any payments made hereunder, and
regardless of whether such rights arise by operation of law, pursuant to
contract or otherwise.
XIII. CONFIRMATION OF SECURITY DOCUMENTS
Each of the Loan Parties hereby irrevocably and unconditionally confirms
in favor of the Agent that it consents to the terms and conditions of this
Agreement as it has been amended and restated as of the date hereof, and that
each Security Document to
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which such Loan Party is a party shall continue in full force and effect and is
and shall continue to be applicable to all of the Obligations and to this
Agreement.
[The remainder of this page has been intentionally left blank.]
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IN WITNESS WHEREOF, the Borrowers, the Guarantors, the Agent and the Lenders
have caused this Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
AIRXCEL, INC., as a Borrower
By:
----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
KODA ENTERPRISES GROUP, INC. (which,
on the Closing Date, will merge with its
subsidiaries, Koda Industries of Tennessee,
Inc. and Suburban Manufacturing Company,
and will change its name to Suburban
Manufacturing Company), as a Borrower
By:
----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
THE CHASE MANHATTAN BANK, as Lender
By:
----------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
THE CHASE MANHATTAN BANK, as Agent
By:
----------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
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