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EXHIBIT 10.64
LOAN AND SECURITY AGREEMENT
Dated as of October 16, 2000
Among
THE FINANCIAL INSTITUTIONS NAMED HEREIN
as the Lenders
and
BANK OF AMERICA, NATIONAL ASSOCIATION
as the Agent
and
ANCHOR GLASS CONTAINER CORPORATION
as the Borrower
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TABLE OF CONTENTS
Section Page
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ARTICLE 1 INTERPRETATION OF THIS AGREEMENT................................................................1
1.1 Definitions.....................................................................................1
1.2 Accounting Terms...............................................................................27
1.3 Interpretive Provisions........................................................................28
ARTICLE 2 LOANS AND LETTERS OF CREDIT....................................................................29
2.1 Total Facility.................................................................................29
2.2 Revolving Loans................................................................................29
2.3 Letters of Credit..............................................................................35
2.4 Bank Products..................................................................................40
ARTICLE 3 INTEREST AND FEES..............................................................................41
3.1 Interest.......................................................................................41
3.2 Continuation and Conversion Elections..........................................................42
3.3 Maximum Interest Rate..........................................................................43
3.4 Closing Fee....................................................................................43
3.5 Unused Line Fee................................................................................43
3.6 Letter of Credit Fee...........................................................................44
3.7 Other Fees.....................................................................................44
ARTICLE 4 PAYMENTS AND PREPAYMENTS.......................................................................44
4.1 Revolving Loans................................................................................44
4.2 Termination of Facility........................................................................44
4.3 Payments by the Borrower.......................................................................45
4.4 Payments as Revolving Loans....................................................................46
4.5 Apportionment, Application and Reversal of Payments............................................46
4.6 Indemnity for Returned Payments................................................................46
4.7 Agent's and Lenders' Books and Records; Monthly Statements.....................................47
ARTICLE 5 TAXES, YIELD PROTECTION AND ILLEGALITY.........................................................47
5.1 Taxes..........................................................................................47
5.2 Illegality.....................................................................................48
5.3 Increased Costs and Reduction of Return........................................................49
5.4 Funding Losses.................................................................................49
5.5 Inability to Determine Rates...................................................................49
5.6 Certificates of Lenders........................................................................50
5.7 Survival.......................................................................................50
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ARTICLE 6 COLLATERAL.....................................................................................50
6.1 Grant of Security Interest.....................................................................50
6.2 Perfection and Protection of Security Interest.................................................51
6.3 Location of Collateral.........................................................................52
6.4 Title to, Liens on, and Sale and Use of Collateral.............................................53
6.5 Appraisals.....................................................................................53
6.6 Access and Examination; Confidentiality; Consent to Advertising................................53
6.7 Collateral Reporting...........................................................................54
6.8 Accounts.......................................................................................54
6.9 Collection of Accounts; Payments...............................................................56
6.10 Inventory; Perpetual Inventory.................................................................57
6.11 Equipment......................................................................................57
6.12 Assigned Contracts.............................................................................57
6.13 Documents, Instruments, and Chattel Paper......................................................58
6.14 Right to Cure..................................................................................58
6.15 Power of Attorney..............................................................................59
6.16 The Agent's and Lenders' Rights, Duties and Liabilities........................................59
ARTICLE 7 BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES..............................................59
7.1 Books and Records..............................................................................59
7.2 Financial Information..........................................................................60
7.3 Notices to the Lenders.........................................................................62
ARTICLE 8 GENERAL WARRANTIES AND REPRESENTATIONS.........................................................64
8.1 Authorization, Validity, and Enforceability of this Agreement and the Loan Documents...........64
8.2 Validity and Priority of Security Interest.....................................................64
8.3 Organization and Qualification.................................................................65
8.4 Corporate Name; Prior Transactions.............................................................65
8.5 Subsidiaries and Affiliates....................................................................65
8.6 Financial Statements and Projections...........................................................65
8.7 Capitalization.................................................................................66
8.8 Solvency.......................................................................................66
8.9 Debt...........................................................................................66
8.10 Distributions..................................................................................66
8.11 Title to Property..............................................................................66
8.12 Real Estate; Leases............................................................................67
8.13 Proprietary Rights.............................................................................67
8.14 Trade Names....................................................................................67
8.15 Litigation.....................................................................................67
8.16 Restrictive Agreements.........................................................................67
8.17 Collective Bargaining Agreements; Labor Disputes...............................................67
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8.18 Environmental Laws.............................................................................68
8.19 No Violation of Law............................................................................68
8.20 No Default.....................................................................................68
8.21 ERISA Compliance...............................................................................69
8.22 Taxes..........................................................................................69
8.23 Regulated Entities.............................................................................69
8.24 Use of Proceeds; Margin Regulations............................................................70
8.25 Copyrights, Patents, Trademarks and Licenses, etc..............................................70
8.26 No Material Adverse Change.....................................................................70
8.27 Full Disclosure................................................................................70
8.28 Material Agreements............................................................................70
8.29 Bank Accounts..................................................................................70
8.30 Governmental Authorization.....................................................................70
ARTICLE 9 AFFIRMATIVE AND NEGATIVE COVENANTS.............................................................71
9.1 Taxes and Other Obligations....................................................................71
9.2 Corporate Existence and Good Standing..........................................................71
9.3 Compliance with Law and Agreements; Maintenance of Licenses....................................71
9.4 Maintenance of Property........................................................................71
9.5 Insurance......................................................................................72
9.6 Condemnation...................................................................................72
9.7 Environmental Laws.............................................................................73
9.8 Compliance with ERISA..........................................................................73
9.9 Mergers, Consolidations or Sales...............................................................73
9.10 Distributions; Capital Change; Restricted Investments..........................................73
9.11 Transactions Affecting Collateral or Obligations...............................................73
9.12 Guaranties.....................................................................................73
9.13 Debt...........................................................................................74
9.14 Prepayment.....................................................................................74
9.15 Transactions with Affiliates...................................................................74
9.16 Investment Banking and Finder's Fees...........................................................74
9.17 Restriction on Conversion of Accounts..........................................................74
9.18 Business Conducted.............................................................................74
9.19 Liens..........................................................................................74
9.20 Sale and Leaseback Transactions................................................................75
9.21 New Subsidiaries...............................................................................75
9.22 Fiscal Year....................................................................................75
9.23 Capital Expenditures...........................................................................75
9.24 Operating Lease Obligations....................................................................75
9.25 Fixed Charge Coverage Ratio....................................................................75
9.26 Use of Proceeds................................................................................75
9.27 Limitation on Strategic Alliance Payment.......................................................75
9.28 Limitation on Management Fees..................................................................76
9.29 Intercompany Agreement.........................................................................76
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9.30 Further Assurances.............................................................................76
ARTICLE 10 CONDITIONS OF LENDING..........................................................................76
10.1 Conditions Precedent to Making of Loans on the Closing Date....................................76
10.2 Conditions Precedent to Each Loan..............................................................78
ARTICLE 11 DEFAULT; REMEDIES..............................................................................79
11.1 Events of Default..............................................................................79
11.2 Remedies.......................................................................................82
ARTICLE 12 TERM AND TERMINATION...........................................................................83
12.1 Term and Termination...........................................................................83
ARTICLE 13 AMENDMENTS; WAIVERS; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS...................................83
13.1 Amendments and Waivers.........................................................................83
13.2 Assignments; Participations....................................................................84
ARTICLE 14 THE AGENT......................................................................................86
14.1 Appointment and Authorization..................................................................86
14.2 Delegation of Duties...........................................................................87
14.3 Liability of Agent.............................................................................87
14.4 Reliance by Agent..............................................................................87
14.5 Notice of Default..............................................................................88
14.6 Credit Decision................................................................................88
14.7 Indemnification................................................................................88
14.8 Agent in Individual Capacity...................................................................89
14.9 Successor Agent................................................................................89
14.10 Withholding Tax................................................................................89
14.11 Co-Agents......................................................................................91
14.12 Collateral Matters.............................................................................91
14.13 Restrictions on Actions by Lenders; Sharing of Payments........................................92
14.14 Agency for Perfection..........................................................................92
14.15 Payments by Agent to Lenders...................................................................92
14.16 Concerning the Collateral and the Related Loan Documents.......................................93
14.17 Field Audit and Examination Reports; Disclaimer by Lenders.....................................93
14.18 Relation Among Lenders.........................................................................94
14.19 Agency Fees....................................................................................94
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Section Page
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ARTICLE 15 MISCELLANEOUS..................................................................................94
15.1 No Waivers; Cumulative Remedies................................................................94
15.2 Severability...................................................................................94
15.3 Governing Law; Choice of Forum; Service of Process.............................................94
15.4 WAIVER OF JURY TRIAL...........................................................................95
15.5 Survival of Representations and Warranties.....................................................95
15.6 Other Security and Guaranties..................................................................96
15.7 Fees and Expenses..............................................................................96
15.8 Notices........................................................................................96
15.9 Waiver of Notices..............................................................................97
15.10 Binding Effect.................................................................................98
15.11 Indemnity of the Agent and the Lenders by the Borrower.........................................98
15.12 Limitation of Liability........................................................................98
15.13 BTCC Credit Agreement..........................................................................99
15.14 Final Agreement................................................................................99
15.15 Counterparts...................................................................................99
15.16 Captions.......................................................................................99
15.17 Right of Setoff................................................................................99
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EXHIBITS AND SCHEDULES
EXHIBIT A - FORM OF BORROWING BASE CERTIFICATE
EXHIBIT B - FINANCIAL STATEMENTS
EXHIBIT C - FORM OF NOTICE OF BORROWING
EXHIBIT D - FORM OF NOTICE OF CONTINUATION/CONVERSION
EXHIBIT E - FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
SCHEDULE 1.1(a) - ASSIGNED CONTRACTS
SCHEDULE 1.1(b) - CLOSED PLANTS
SCHEDULE 6.3 - LOCATION OF COLLATERAL AND CHIEF EXECUTIVE OFFICE
SCHEDULE 8.3 - ORGANIZATION AND QUALIFICATIONS
SCHEDULE 8.4 - CORPORATE NAME; PRIOR TRANSACTIONS
SCHEDULE 8.5 - SUBSIDIARIES AND AFFILIATES
SCHEDULE 8.7 - OTHER CAPITAL STOCK
SCHEDULE 8.12 - REAL ESTATE; LEASES
SCHEDULE 8.13 - PROPRIETARY RIGHTS
SCHEDULE 8.14 - TRADE NAMES
SCHEDULE 8.15 - LITIGATION
SCHEDULE 8.17 - COLLECTIVE BARGAINING AGREEMENTS; LABOR DISPUTES
SCHEDULE 8.18 - ENVIRONMENTAL LAWS
SCHEDULE 8.21 - ERISA COMPLIANCE
SCHEDULE 8.28 - MATERIAL AGREEMENTS
SCHEDULE 8.29 - BANK ACCOUNTS
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LOAN AND SECURITY AGREEMENT
This Loan and Security Agreement, dated as of October 16, 2000, is
among the financial institutions listed on the signature pages hereof (such
financial institutions, together with their respective successors and assigns,
are referred to hereinafter each individually as a "Lender" and collectively as
the "Lenders"), Bank of America, National Association, with an office at 000
Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, as agent for the Lenders (in its
capacity as agent, the "Agent"), and Anchor Glass Container Corporation, a
Delaware corporation, with offices at One Anchor Plaza, 0000 Xxxxxx Xxxxx
Xxxxxxx, Xxxxx, Xxxxxxx 00000-0000 (the "Borrower").
W I T N E S S E T H:
WHEREAS, the Borrower has requested the Lenders to make available to
the Borrower a revolving line of credit for loans and letters of credit in an
amount not to exceed $100,000,000 which extensions of credit the Borrower will
use for its working capital needs and general business purposes;
WHEREAS, the Lenders have agreed to make available to the Borrower a
revolving credit facility upon the terms and conditions set forth in this
Agreement.
WHEREAS, the Lenders intend for the Agent to succeed to the rights and
obligations of BTCC under the Intercreditor Agreement (as those terms are
hereinafter defined), subject to the provisions of this Agreement.
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth in this Agreement, and for good and valuable consideration,
the receipt of which is hereby acknowledged, the Lenders, the Agent, and the
Borrower hereby agree as follows.
ARTICLE 1
INTERPRETATION OF THIS AGREEMENT
1.1 Definitions. As used herein:
"Accounts" means all of the Borrower's now owned or hereafter
acquired or arising accounts as defined in the UCC, including any rights to
payment for the sale or lease of goods or rendition of services, whether or not
they have been earned by performance.
"Account Debtor" means each Person obligated in any way on or
in connection with an Account.
"ACH Transactions" means any cash management or related
services including the automated clearing house transfer of funds by the Bank
for the account of the Borrower pursuant to agreement or overdrafts.
"Adjusted Net Earnings from Operations" means, with respect to
any fiscal period of the Borrower, the Borrower's net income after provision for
income taxes for such fiscal
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period, as determined in accordance with GAAP and reported on the Financial
Statements for such period, (i) excluding any and all of the following included
in such net income: (a) gain or loss arising from the sale of any capital
assets; (b) gain arising from any write-up in the book value of any asset; (c)
earnings of any Person, substantially all the assets of which have been acquired
by the Borrower in any manner, to the extent realized by such other Person prior
to the date of acquisition; (d) earnings of any Person in which the Borrower has
an ownership interest unless (and only to the extent) such earnings shall
actually have been received by the Borrower in the form of cash distributions;
(e) earnings of any Person to which assets of the Borrower shall have been sold,
transferred or disposed of, or into which the Borrower shall have been merged,
or which has been a party with the Borrower to any consolidation or other form
of reorganization, prior to the date of such transaction; (f) gain arising from
the acquisition of debt or equity securities of the Borrower or from
cancellation or forgiveness of Debt; and (g) gain or non-cash loss during such
fiscal period arising from extraordinary items, as determined in accordance with
GAAP, or from any other non-recurring transaction, and (ii) adjusted to remove
the effects of any non-cash charges, reserves or adjustments required pursuant
to FASB 106 and 109.
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person or which owns, directly or indirectly, ten percent
(10%) or more of the outstanding equity interest of such Person. A Person shall
be deemed to control another Person if the controlling Person possesses,
directly or indirectly, the power to direct or cause the direction of the
management and policies of the other Person, whether through the ownership of
voting securities, by contract, or otherwise.
"Agent" means the Bank, solely in its capacity as agent for
the Lenders, and any successor agent.
"Agent Advances" has the meaning specified in Section 2.2(i).
"Agent's Liens" means the Liens in the Collateral granted to
the Agent, for the benefit of the Lenders, the Bank, and the Agent pursuant to
this Agreement and the other Loan Documents.
"Agent-Related Persons" means the Agent, together with its
Affiliates, and the officers, directors, employees, agents and attorneys-in-fact
of the Agent and such Affiliates.
"Aggregate Revolver Outstandings" means, at any date of
determination, the sum of (a) the unpaid balance of Revolving Loans, (b) the
aggregate amount of Pending Revolving Loans, (c) one hundred percent (100%) of
the aggregate undrawn face amount of all outstanding Letters of Credit and
Credit Support, and (d) the aggregate amount of any unpaid reimbursement
obligations in respect of Letters of Credit and Credit Support.
"Agreement" means this Loan and Security Agreement as such
agreement may be amended or otherwise modified from time to time.
"Anniversary Date" means each anniversary of the Closing Date.
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"Applicable Margin" means the following percentages per annum,
based upon the Funded Debt Ratio as set forth in the most recent Compliance
Certificate received by the Agent pursuant to Section 7.2(e):
Applicable Margin
Pricing Level Funded Debt Ratio LIBOR Rate + Base Rate +
------------- ------------------- ---------------- ------------ -----------
1 <=3.00:1.0 1.75 0
2 >3.00:1 but <=3.50:1 2.00 0
3 >3.50:1 but <=4.00:1 2.25 .25
4 >4.00:1 but <=4.50:1 2.50 .25
5 >4.50:1 2.75 .50
Any increase or decrease in the Applicable Margin resulting from a
change in the Funded Debt Ratio shall become effective as of the first day of
the fiscal quarter of the Borrower immediately following the date a Compliance
Certificate is delivered pursuant to Section 7.2(e) beginning with respect to
the Compliance Certificate applicable to the fiscal quarter ended immediately
prior to the fiscal quarter within which the first anniversary of the Closing
Date falls; provided, however, that if no Compliance Certificate is delivered
during a fiscal quarter when due in accordance with such Section, then Pricing
Level 5 shall apply as of the first day of such following fiscal quarter. The
Applicable Margin in effect from the Closing Date through the end of the fiscal
quarter within which the first anniversary of the Closing Date falls shall be
determined based upon Pricing Level 3.
"Assigned Contracts" means, collectively, all of the
Borrower's rights and remedies under, and all moneys and claims for money due or
to become due to the Borrower under those contracts set forth on Schedule
1.1(a), and any contracts to which the Borrower is a party, the absence of the
existence of which would either individually or collectively with other such
contracts result in a Material Adverse Effect, and any and all amendments,
supplements, extensions, and renewals thereof including all rights and claims of
the Borrower now or hereafter existing: (i) under any insurance, indemnities,
warranties, and guarantees provided for or arising out of or in connection with
any of the foregoing agreements; (ii) for any damages arising out of or for
breach or default under or in connection with any of the foregoing contracts;
(iii) to all other amounts from time to time paid or payable under or in
connection with any of the foregoing agreements; or (iv) to exercise or enforce
any and all covenants, remedies, powers and privileges thereunder.
"Assignee" has the meaning specified in Section 13.2(a).
"Assignment and Acceptance" has the meaning specified in
Section 13.2(a).
"Attorney Costs" means and includes all fees, expenses and
disbursements of any law firm or other counsel engaged by the Agent, the
allocated costs of internal legal services of the Agent and the reasonable
expenses of internal counsel to the Agent.
"Availability" means, at any time, (a) the Borrowing Base
minus (b) the Aggregate Revolver Outstandings.
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"Bank" means Bank of America, National Association, a national
banking association, or any successor entity thereto.
"Bank Products" means any one or more of various types of
services or facilities extended to the Borrower by the Bank or any Affiliate of
the Bank in reliance on the Bank's agreement to indemnify such Affiliate,
including without limitation, by way of example, the following: (i) credit
cards; (ii) ACH Transactions; (iii) Hedge Agreements; and or (iv) foreign
exchange contracts.
"Bank Product Reserves" means all reserves which the Agent
from time to time establishes in its reasonable discretion for the Bank Products
then provided or outstanding.
"Bankruptcy Code" means Title 11 of the United States Code (11
U.S.C. ss. 101 et seq.).
"Base Rate" means, for any day, the rate of interest in effect
for such day as publicly announced from time to time by the Bank in Charlotte,
North Carolina as its "prime rate" (the "prime rate" being a rate set by the
Bank based upon various factors including the Bank's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate). Any change in the prime rate announced by the Bank shall take effect at
the opening of business on the day specified in the public announcement of such
change. Each Interest Rate based upon the Base Rate shall be adjusted
simultaneously with any change in the Base Rate.
"Base Rate Loans" means, collectively, the Base Rate Revolving
Loans.
"Base Rate Revolving Loan" means a Revolving Loan during any
period in which it bears interest based on the Base Rate.
"Blocked Account Agreement" means an agreement among the
Borrower, the Agent and a Clearing Bank, in form and substance satisfactory to
the Agent, concerning the collection of payments which represent the proceeds of
Accounts or of any other Collateral.
"Borrowing" means a borrowing hereunder consisting of
Revolving Loans made on the same day by the Lenders to the Borrower or by Bank
in the case of a Borrowing funded by Non-Ratable Loans or by the Agent in the
case of a Borrowing consisting of an Agent Advance, or the issuance of Letters
of Credit or Credit Support hereunder.
"Borrowing Base" means, at any time, an amount equal to (a)
the lesser of (i) the Maximum Revolver Amount or (ii) the sum of (A) eighty-five
percent (85%) of the Net Amount of Eligible Accounts; plus (B) the lesser of (x)
sixty percent (60%) of the value of Eligible Inventory and (y) $55,000,000;
minus (b) the sum of (i) the Bank Product Reserves and (ii) all other reserves
which the Agent deems necessary in the exercise of its reasonable credit
judgment to maintain with respect to the Borrower's account, including, without
limitation, reserves for any amounts which the Agent or any Lender may be
obligated to pay in the future for the account of the Borrower and reserves for
accrued and unpaid interest on the Obligations.
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"Borrowing Base Certificate" means a certificate by a
Responsible Officer of the Borrower, substantially in the form of Exhibit A (or
another form acceptable to the Agent) setting forth the calculation of the
Borrowing Base, including a calculation of each component thereof, all in such
detail as shall be satisfactory to the Agent. All calculations of the Borrowing
Base in connection with the preparation of any Borrowing Base Certificate shall
originally be made by the Borrower and certified to the Agent; provided that the
Agent shall have the right to review and adjust, in the exercise of its
reasonable credit judgment, any such calculation (1) to reflect its reasonable
estimate of declines in value of any of the Collateral described therein, and
(2) to the extent that such calculation is not in accordance with this
Agreement.
"BTCC" means BT Commercial Corporation, a banking corporation
organized under the laws of the State of New York.
"Buschmeier Purchase" means that certain Purchase Agreement
dated September 5, 1998 between G & G, for the benefit of Consumers Packaging
and Petra and Xxxxxx Xxxxxxxxxx.
"Business Day" means (a) any day that is not a Saturday,
Sunday, or a day on which banks in Chicago, Illinois or Charlotte, North
Carolina are required or permitted to be closed, and (b) with respect to all
notices, determinations, fundings and payments in connection with the LIBOR Rate
or LIBOR Rate Loans, any day that is a Business Day pursuant to clause (a) above
and that is also a day on which trading in Dollars is carried on by and between
banks in the London interbank market.
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any other law,
rule or regulation, whether or not having the force of law, in each case,
regarding capital adequacy of any bank or of any corporation controlling a bank.
"Capital Expenditures" means all payments due (whether or not
paid) in respect of the cost of any fixed asset or improvement, or replacement,
substitution, or addition thereto, which has a useful life of more than one
year, including, without limitation, those costs arising in connection with the
direct or indirect acquisition of such asset by way of increased product or
service charges or in connection with a Capital Lease.
"Capitalized Lease Obligations" means obligations under
Capitalized Leases equal in amount to the liabilities that would be disclosed
under GAAP with respect to such Capitalized Leases.
"Capital Lease" means any lease of property by the Borrower
which, in accordance with GAAP, should be reflected as a capital lease on the
balance sheet of the Borrower.
"Change of Control" means an event or series of events by
which (a) (i) Permitted Holders shall cease to be the beneficial owner
(including, without limitation, economic interest and voting power), directly or
indirectly, of at least 40% (or after a Qualified Public Offering, 25%) of the
Fully-Diluted Voting Stock of Consumers Packaging, Consumers U.S. or the
Borrower, (ii) Consumers U.S. shall cease to be the owner (including, without
limitation,
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economic interest and voting power) directly of at least 40% (or after a
Qualified Public Offering, 25%) of the Fully-Diluted Voting Stock of the
Borrower or (iii) any Person or group (as defined under Rule 13d-3 under the
Exchange Act) other than one or more of the Permitted Holders. becomes the
beneficial owner (as defined under Rule 13d-3 under the Exchange Act), directly
or indirectly, of more of the Fully-Diluted Voting Stock of Consumers Packaging,
Consumers U.S. or the Borrower, as the case may be, than is then beneficially
owned, directly or indirectly by one or more of the Permitted Holders; (b) the
Borrower or Consumers Packaging or Consumers U.S., as the case may be,
consolidates with or merges with or into another Person or any Person
consolidates with, or merges with or into, the Borrower, Consumers Packaging or
Consumers U.S., as the case may be (in each case, whether or not in compliance
with the terms of the Indenture), in any such event pursuant to a transaction in
which immediately after the consummation thereof Persons owning a majority of
the Voting Stock of the Borrower or Consumers Packaging or Consumers U.S., as
the case may be, immediately prior to such consummation shall cease to own a
majority of the Voting Stock of the Borrower or Consumers Packaging or Consumers
U.S., as the case may be, or the surviving entity if other than the Borrower or
Consumers Packaging or Consumers U.S., as the case may be; or (c) the Borrower
or Consumers Packaging or Consumers U.S. conveys, transfers or leases all or
substantially all of its assets.
"Clearing Bank" means the Bank or any other banking
institution with whom a Payment Account has been established pursuant to a
Blocked Account Agreement.
"Closed Plants" means those properties of the Borrower
identified on Schedule 1.1(b).
"Closing Date" means the date of this Agreement.
"Closing Fee" has the meaning specified in Section 3.4.
"Closing Fee Letter" has the meaning specified in Section 3.4.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor statute, and regulations promulgated
thereunder.
"Collateral" has the meaning specified in Section 6.1.
"Commitment" means, at any time with respect to a Lender, the
principal amount set forth beside such Lender's name under the heading
"Commitment" on the signature pages of this Agreement or on the signature page
of the Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder, or the most recent Assignment and Acceptance to which such Lender is
a party, in accordance with the provisions of Section 13.2, as such Commitment
may be adjusted from time to time in accordance with the provisions of Section
13.2, and "Commitments" means, collectively, the aggregate amount of the
commitments of all of the Lenders.
"Consolidated Debt" means at any date, the aggregate Debt For
Borrowed Money of the Borrower and its Subsidiaries.
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"Consolidated EBITDA" means for any period, the EBITDA of the
Borrower and its Subsidiaries determined in accordance with GAAP for such period
on a consolidated basis.
"Consolidated Fixed Charges" means, with respect to any fiscal
period of the Borrower on a consolidated basis, without duplication,
Consolidated Interest Expense (which for purposes of this definition shall not
include amortizing payments of deferred financing charges that do not constitute
interest), Capital Expenditures (other than (i) Capital Expenditures that are
financed with the proceeds of Debt for Borrowed Money other than Revolving Loans
and (ii) Capital Expenditures that are made using the cash proceeds of asset
sales), scheduled principal payments of Debt, and Federal, state, local and
foreign income taxes paid in cash, Distributions paid in cash, and management
fees paid in cash (to the extent not included in the calculation of EBITDA).
"Consolidated Interest Expense" means for any period, the sum
of total interest expense of the Borrower and its Subsidiaries for such period
with respect to all outstanding Debt of the Borrower and its Subsidiaries
(including, without limitation, all commissions, discounts and other fees and
charges owed with respect to letters of credit, bankers' acceptance financing
and other Indebtedness).
"Consumers Packaging" means Consumers Packaging Inc. /
Emballages Consumers Inc., a corporation organized under the federal laws of
Canada, and an Affiliate of the Borrower.
"Consumers U.S." means Consumers U.S., Inc., a Delaware
corporation.
"Consumers U.S. Guaranty and Pledge" means a Guaranty and
Pledge Agreement whereby Consumers U.S. guarantees the Obligations and pledges
its ownership interest in the Borrower to the Agent for the benefit of the
Lenders.
"Contaminant" means any waste, pollutant, hazardous
substance, toxic substance, hazardous waste, special waste, petroleum or
petroleum-derived substance or waste, asbestos in any form or condition,
polychlorinated biphenyls ("PCBs"), or any constituent of any such substance or
waste.
"Continuation/Conversion Date" means the date on which a Loan
is converted into or continued as a LIBOR Rate Loan.
"Credit Support" has the meaning specified in Section 2.3(a).
"Debt" means, without duplication, all liabilities,
obligations and indebtedness of the Borrower or any of its Subsidiaries to any
Person, of any kind or nature, now or hereafter owing, arising, due or payable,
howsoever evidenced, created, incurred, acquired or owing, whether primary,
secondary, direct, contingent, fixed or otherwise, and including, without in any
way limiting the generality of the foregoing: (a) the liabilities and
obligations to trade creditors; (b) all Obligations; (c) all obligations and
liabilities of any Person secured by any Lien on the Borrower's or any such
Subsidiary's property, even though the Borrower or such Subsidiary shall not
have assumed or become liable for the payment thereof; provided, however, that
all such obligations and liabilities which are limited in recourse to such
property shall be included in
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Debt only to the extent of the book value of such property as would be shown on
a balance sheet of the Borrower or such Subsidiary prepared in accordance with
GAAP; (d) all obligations or liabilities created or arising under any Capital
Lease or conditional sale or other title retention agreement with respect to
property used or acquired by the Borrower or such Subsidiary, even if the rights
and remedies of the lessor, seller or lender thereunder are limited to
repossession of such property; provided, however, that all such obligations and
liabilities which are limited in recourse to such property shall be included in
Debt only to the extent of the book value of such property as would be shown on
a balance sheet of the Borrower or such Subsidiary prepared in accordance with
GAAP; and (e) all obligations and liabilities under Guaranties.
"Debt For Borrowed Money" means, as to any Person, (a) Debt
for borrowed money or as evidenced by notes, bonds, debentures or similar
evidences of any such Debt of such Person, (b) the deferred and unpaid purchase
price of any property or business (other than trade accounts payable incurred in
the ordinary course of business and constituting current liabilities) and (c)
all obligations under Capital Leases.
"Default" means any event or circumstance which, with the
giving of notice, the lapse of time, or both, would (if not cured, waived, or
otherwise remedied during such time) constitute an Event of Default.
"Defaulting Lender" has the meaning specified in Section
2.2(g)(ii).
"Default Rate" means a fluctuating per annum interest rate at
all times equal to the sum of (a) the otherwise applicable Interest Rate plus
(b) two percent (2%). Each Default Rate shall be adjusted simultaneously with
any change in the applicable Interest Rate. In addition, with respect to Letters
of Credit, the Default Rate shall mean an increase in the Letter of Credit Fee
by two percent (2%).
"Distribution" means, in respect of any corporation: (a) the
payment or making of any dividend or other distribution of property in respect
of capital stock (or any options or warrants for or other rights with respect to
such stock) of such corporation, other than distributions in capital stock (or
any options or warrants for or other rights with respect to such stock) of the
same class; or (b) the redemption or other acquisition by such corporation of
any capital stock (or any options or warrants for such stock) of such
corporation.
"DOL" means the United States Department of Labor or any
successor department or agency.
"Dollar" and "$" means dollars in the lawful currency of the
United States.
"EBITDA" means, with respect to any fiscal period of the
Borrower, Adjusted Net Earnings from Operations, plus, to the extent deducted in
the determination of Adjusted Net Earnings from Operations for that fiscal
period, interest expenses, Federal, state, local and foreign income taxes,
depreciation and amortization, other non-cash charges and Plant Closing expenses
minus the cash impact of Plant Closing expenses realized during such fiscal
period whether expensed during such fiscal period or any earlier fiscal period.
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"Eligible Accounts" means the Accounts which the Agent in the
exercise of its reasonable commercial discretion determines to be Eligible
Accounts. Without limiting the discretion of the Agent to establish other
criteria of ineligibility, Eligible Accounts shall not, unless the Agent in its
sole discretion elects, include any Account:
(a) with respect to which Account that is not an Extended
Term Account, more than 90 days have elapsed since the date of the original
invoice therefor or which is more than 60 days past due;
(b) with respect to which any of the representations,
warranties, covenants, and agreements contained in Section 6.8 are not or have
ceased to be complete and correct or have been breached;
(c) with respect to which Account (or any other Account
due from such Account Debtor), in whole or in part, a check, promissory note,
draft, trade acceptance or other instrument for the payment of money has been
received, presented for payment and returned uncollected for any reason to the
extent of the amount so returned;
(d) which represents a progress billing (as hereinafter
defined) or as to which the Borrower has extended the time for payment without
the consent of the Agent; for the purposes hereof, "progress billing" means any
invoice for goods sold or leased or services rendered under a contract or
agreement pursuant to which the Account Debtor's obligation to pay such invoice
is conditioned upon the Borrower's completion of any further performance under
the contract or agreement;
(e) with respect to which any one or more of the
following events has occurred to the Account Debtor on such Account: death or
judicial declaration of incompetency of an Account Debtor who is an individual;
the filing by or against the Account Debtor of a request or petition for
liquidation, reorganization, arrangement, adjustment of debts, adjudication as a
bankrupt, winding-up, or other relief under the bankruptcy, insolvency, or
similar laws of the United States, any state or territory thereof, or any
foreign jurisdiction, now or hereafter in effect; the making of any general
assignment by the Account Debtor for the benefit of creditors; the appointment
of a receiver or trustee for the Account Debtor or for any of the assets of the
Account Debtor, including, without limitation, the appointment of or taking
possession by a "custodian," as defined in the Federal Bankruptcy Code; the
institution by or against the Account Debtor of any other type of insolvency
proceeding (under the bankruptcy laws of the United States or otherwise) or of
any formal or informal proceeding for the dissolution or liquidation of,
settlement of claims against, or winding up of affairs of, the Account Debtor;
the sale, assignment, or transfer of all or any material part of the assets of
the Account Debtor; the nonpayment generally by the Account Debtor of its debts
as they become due; or the cessation of the business of the Account Debtor as a
going concern;
(f) if fifty percent (50%) or more of the aggregate
Dollar amount of outstanding Accounts owed at such time by the Account Debtor
thereon is classified as ineligible under clause (a) above or clause (t) below;
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(g) owed by an Account Debtor which: (i) does not
maintain its chief executive office in the United States of America or Canada;
or (ii) is not organized under the laws of the United States of America or
Canada or any state or province thereof; or (iii) is the government of any
foreign country or sovereign state, or of any state, province, municipality, or
other political subdivision thereof, or of any department, agency, public
corporation, or other instrumentality thereof; except to the extent that such
Account is secured or payable by a letter of credit satisfactory to the Agent in
its discretion;
(h) owed by an Account Debtor which is an Affiliate or
employee of the Borrower;
(i) except as provided in clause (k) below, with respect
to which either the perfection, enforceability, or validity of the Agent's Lien
in such Account, or the Agent's right or ability to obtain direct payment to the
Agent of the proceeds of such Account, is governed by any federal, state, or
local statutory requirements other than those of the UCC;
(j) owed by an Account Debtor to which the Borrower or
any of its Subsidiaries, is indebted in any way or which is subject to any right
of setoff or recoupment by the Account Debtor, unless, in either case, the
Account Debtor has entered into an agreement acceptable to the Agent to waive
setoff rights; or if the Account Debtor thereon has disputed liability or made
any claim with respect to any other Account due from such Account Debtor; but in
each such case only to the extent of such indebtedness, setoff, recoupment,
dispute, or claim;
(k) owed by the government of the United States of
America, or any department, agency, public corporation, or other instrumentality
thereof, unless the Federal Assignment of Claims Act of 1940, as amended (31
U.S.C. ss. 3727 et seq.), and any other steps necessary to perfect the Agent's
Lien therein, have been complied with to the Agent's satisfaction with respect
to such Account;
(l) owed by any state, municipality, or other political
subdivision of the United States of America, or any department, agency, public
corporation, or other instrumentality thereof and as to which the Agent
determines that its Lien therein is not or cannot be perfected;
(m) which represents a sale on a xxxx-and-hold,
guaranteed sale, sale and return, sale on approval, consignment, or other
repurchase or return basis;
(n) which is evidenced by a promissory note or other
instrument or by chattel paper;
(o) if the Agent believes, in the exercise of its
reasonable judgment, that the prospect of collection of such Account is impaired
or that the Account may not be paid by reason of the Account Debtor's financial
inability to pay;
(p) with respect to which the Account Debtor is located
in any State of the United States or Province of Canada as requiring the filing
of a Notice of Business Activities Report or similar report in order to permit
the Borrower to seek judicial enforcement in such State of the United States or
Province of Canada of payment of such Account, unless the
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Borrower has qualified to do business in such state or has filed a Notice of
Business Activities Report or equivalent report for the then current year;
(q) which arises out of a sale not made in the ordinary
course of the Borrower's business;
(r) with respect to which the goods giving rise to such
Account have not been shipped and delivered to and accepted by the Account
Debtor or the services giving rise to such Account have not been performed by
the Borrower, and, if applicable, accepted by the Account Debtor, or the Account
Debtor revokes its acceptance of such goods or services;
(s) owed by an Account Debtor which is obligated to the
Borrower respecting Accounts the aggregate unpaid balance of which exceeds
thirty percent (30%) of the aggregate unpaid balance of all Accounts owed to the
Borrower at such time by all of the Borrower's Account Debtors, but only to the
extent of such excess;
(t) that is an Extended Term Account that is more than 30
days past due;
(u) if inclusion of such Account would cause the
percentage of Extended Term Accounts included in Eligible Accounts to exceed
fifty percent (50%), but only to the extent of such excess;
(v) which arises out of an enforceable contract or order
which, by its terms, forbids, restricts or makes void or unenforceable the
granting of a Lien by the Borrower to the Agent with respect to such Account; or
(w) which is not subject to a first priority and
perfected security interest in favor of the Agent for the benefit of the
Lenders.
If any Account at any time ceases to be an Eligible Account, then such
Account shall promptly be excluded from the calculation of Eligible Accounts.
"Eligible Assignee" means (a) a commercial bank, commercial
finance company or other asset based lender, having total assets in excess of
$1,000,000,000; (b) any Lender listed on the signature page of this Agreement;
(c) any Affiliate of any Lender; and (d) if an Event of Default exists, any
Person reasonably acceptable to the Agent.
"Eligible Inventory" means Inventory, valued at the lower of
cost (on a "first-in, first-out" basis) or market, which the Agent, in its
reasonable discretion, determines to be Eligible Inventory. Without limiting the
discretion of the Agent to establish other criteria of eligibility, unless the
Agent in its sole discretion elects otherwise, Eligible Inventory shall meet all
of the following requirements:
(a) such Inventory is owned by the Borrower;
(b) such Inventory is subject to the Agent's Liens, which
are perfected as to such Inventory, and is subject to no other Lien whatsoever
(other than the Liens described in clause (d) of the definition of Permitted
Liens provided that such Permitted Liens (i) are junior in
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priority to the Agent's Liens and (ii) do not impair directly or indirectly the
ability of the Agent to realize on or obtain the full benefit of the
Collateral);
(c) such Inventory consists of finished goods or other
packing and shipping materials that are physically attached to, enclosing or
otherwise a physical part of finished goods, or raw materials consisting of
sand, soda ash, limestone, cullet, and unopened containers of commercially
saleable chemicals;
(d) such Inventory does not consist of work-in-process,
repair parts, supplies, corrugated packaging or other packing and shipping
materials that are not physically attached to, enclosing or otherwise a physical
part of finished goods, and chemicals, except those listed as raw materials in
clause (c) above;
(e) such Inventory is in good condition, not
unmerchantable, and meets all standards imposed by any Governmental Authority,
having regulatory authority over such goods, their use or sale;
(f) such Inventory is currently either usable or salable,
at prices approximating at least cost, in the normal course of the Borrower's
business, and is not slow moving or stale;
(g) such Inventory is not obsolete or returned or
repossessed or used goods taken in trade (it being understood and agreed that
Inventory that is more than one year old shall presumptively be deemed to be
obsolete (i) absent an acknowledgement in writing to the contrary from the Agent
and (ii) only then if such Inventory is less than 18 months old and the lower of
(A) the book value or (B) the fair market value of an equivalent amount of
Inventory that is less than one year old is less than or equal to $2,500,000 in
the aggregate (if more than $2,500,000 only the excess shall be excluded);
Inventory that is more than 18 months old shall be classified and treated as
obsolete);
(h) such Inventory is located within the United States of
America or Canada (and not in-transit from vendors or suppliers);
(i) if such Inventory is located in a public warehouse or
in possession of a bailee or in a facility leased by the Borrower, the
warehouseman, or the bailee, or the lessor has delivered to the Agent, if
requested by the Agent, a subordination agreement in form and substance
satisfactory to the Agent;
(j) if such Inventory contains or bears any Proprietary
Rights licensed to the Borrower by any Person, the Agent shall be satisfied that
it may sell or otherwise dispose of such Inventory in accordance with Article 11
without infringing the rights of the licensor of such Proprietary Rights or
violating any contract with such licensor (and without payment of any royalties
other than any royalties due with respect to the sale or disposition of such
Inventory pursuant to the existing license agreement), and, if the Agent deems
it necessary, the Borrower shall deliver to the Agent a consent or sublicense
agreement from such licensor in form and substance acceptable to the Agent; and
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(k) such Inventory is not determined by the Agent in its
reasonable discretion, to be ineligible for any other reason.
If any Inventory at any time ceases to be Eligible Inventory,
such Inventory shall promptly be excluded from the calculation of Eligible
Inventory.
"Environmental Claims" means all claims, however asserted, by
any Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for a Release or
injury to the environment.
"Environmental Laws" means all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes, together
with all administrative orders, directed duties, licenses, authorizations and
permits of, and agreements with, any Governmental Authority of the United States
and Canada, in each case relating to environmental, health, safety and land use
matters.
"Environmental Lien" means a Lien in favor of any Governmental
Authority for (a) any liability under Environmental Laws, or (b) damages arising
from, or costs incurred by such Governmental Authority in response to, a Release
or threatened Release of a Contaminant into the environment.
"Equipment" means all of the Borrower's now owned and
hereafter acquired machinery, equipment, furniture, furnishings, fixtures, and
other tangible personal property (except Inventory), including motor vehicles
with respect to which a certificate of title has been issued, aircraft, dies,
tools, jigs, and office equipment, as well as all of such types of property
leased by the Borrower and all of the Borrower's rights and interests with
respect thereto under such leases (including, without limitation, options to
purchase); together with all present and future additions and accessions
thereto, replacements therefor, component and auxiliary parts and supplies used
or to be used in connection therewith, and all substitutes for any of the
foregoing, and all manuals, drawings, instructions, warranties and rights with
respect thereto; wherever any of the foregoing is located.
"ERISA" means the Employee Retirement Income Security Act of
1974, and regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a
Pension Plan, (b) a withdrawal by the Borrower or any ERISA Affiliate from a
Pension Plan subject to Section 4063 of ERISA during a plan year in which it was
a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a
cessation of operations which is treated as such a withdrawal under Section
4062(e) of ERISA, (c) a complete or partial withdrawal by the Borrower or any
ERISA Affiliate from a Multi-employer Plan or notification that a Multi-employer
Plan is in reorganization, (d) the filing of a notice of intent to terminate,
the treatment of a Plan amendment as a termination under Section 4041 or 4041A
of ERISA, or the commencement of proceedings
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by the PBGC to terminate a Pension Plan or Multi-employer Plan, (e) the
occurrence of an event or condition which might reasonably be expected to
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan or Multi-employer Plan,
or (f) the imposition of any liability under Title IV of ERISA, other than for
PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the
Borrower or any ERISA Affiliate.
"Event of Default" has the meaning specified in Section 11.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute or statutes thereto and the rules and
regulations promulgated by the SEC.
"Extended Term Account" means an Account that has a payment
due date more than 30 but less than 181 days after the date of the invoice
evidencing such Account.
"FASB" means the Financial Accounting and Standards Board.
"FDIC" means the Federal Deposit Insurance Corporation, and
any Governmental Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate charged to
the Bank on such day on such transactions as determined by the Agent.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System or any successor thereto.
"Fee Letter" means a separate and confidential letter
agreement among the Agent, the Bank and the Borrower.
"Financial Statements" means, according to the context in
which it is used, the financial statements referred to in Section 8.6 or any
other financial statements required to be given to the Lenders pursuant to this
Agreement.
"First Mortgage Notes" means the Debt for Borrowed Money in
the original principal amount of $150,000,000 evidenced by 11-1/4% First
Mortgage Notes due 2005 and further evidenced and secured by Indenture dated
April 17, 1997, by and among the Borrower, as issuer, Consumers U.S., as
guarantor and The Bank of New York, as trustee.
"Fiscal Year" means the Borrower's fiscal year for financial
accounting purposes. The current Fiscal Year of the Borrower will end on
December 31, 2000.
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"Fixed Charge Coverage Ratio" means for any period, the ratio
of (x) Consolidated EBITDA for such period to (y) Consolidated Fixed Charges
during such period.
"Fully Diluted Voting Stock" means, in respect of any Person
at any time, the Voting Stock of such Person assuming that all outstanding
options, warrants or other rights to acquire such Voting Stock have been
exercised and all outstanding securities convertible into or exchangeable for
such Voting Stock have been converted or exchanged at such time, in each case in
accordance with their terms in effect at such time.
"Funded Debt Ratio" means the ratio of (a) the principal
amount of the Borrower's Debt for Borrowed Money, including without duplication,
the then aggregate outstanding balance of the Revolving Loans and the Other
Senior Debt and the outstanding amount of Capital Leases averaged as of the last
day of each month during the three month periods ending as of March 31, June 30,
September 30 and December 31 of each Fiscal Year (each of which periods shall
constitute a "fiscal quarter") to (b) Consolidated EBITDA of the Borrower and
its Subsidiaries for the four fiscal quarters ended on March 31, June 30,
September 30 and December 31, respectively.
"Funding Date" means the date on which a Borrowing occurs.
"G & G" means G & G Investments, Inc., a Delaware corporation.
"G & G Acknowledgement and Assignment" means that certain
Acknowledgement and Assignment Agreement made by G & G to the Agent for the
benefit of the Lenders acknowledging the terms of the Loan Documents, agreeing
to be bound by the provisions affecting G & G and containing various warranties
and representations and agreements relating to the transactions contemplated by
this Agreement, in form and substance acceptable to the Agent.
"G & G Guaranty and Pledge" means a Guaranty and Pledge
Agreement whereby G & G guarantees the repayment of the Intercompany Note and
each of G & G and Ghaznavi Canada Inc. pledges specified ownership interests in
Consumers Packaging to the Agent as set forth therein.
"GAAP" means generally accepted accounting principles and
practices set forth from time to time in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the FASB (or agencies with
similar functions of comparable stature and authority within the United States
accounting profession), which are applicable to the circumstances as of the
Closing Date.
"GE Lease" means the Master Lease Agreement dated as of
December 30, 1999 between General Electric Capital Corporation and the Borrower,
as amended from time to time, including the schedules of equipment attached
thereto from time to time.
"General Intangibles" means all of the Borrower's now owned or
hereafter acquired general intangibles, choses in action and causes of action
and all other intangible personal property of the Borrower of every kind and
nature (other than Accounts), including,
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without limitation, all contract rights, Proprietary Rights, corporate or other
business records, inventions, designs, blueprints, plans, specifications,
patents, patent applications, trademarks, service marks, trade names, trade
secrets, goodwill, copyrights, computer software, customer lists, registrations,
licenses, franchises, tax refund claims, any funds which may become due to the
Borrower in connection with the termination of any Plan or other employee
benefit plan or any rights thereto and any other amounts payable to the Borrower
from any Plan or other employee benefit plan, rights and claims against carriers
and shippers, rights to indemnification, business interruption insurance and
proceeds thereof, property, casualty or any similar type of insurance and any
proceeds thereof, proceeds of insurance covering the lives of key employees on
which the Borrower is beneficiary, and any letter of credit, guarantee, claim,
security interest or other security held by or granted to the Borrower.
"GGC" means GGC, L.L.C., a Delaware limited liability company
doing business as Glenshaw Glass Company.
"GGC Holdings" means GGC Holdings, Inc., formerly known as
Glenshaw Glass Company, a Pennsylvania corporation.
"Glenshaw Holdings" means Glenshaw Holdings, Inc., a Delaware
corporation.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Guaranty" means, with respect to any Person, all obligations
of such Person which in any manner directly or indirectly guarantee or assure,
or in effect guarantee or assure, the payment or performance of any
indebtedness, dividend or other obligations of any other Person (the "guaranteed
obligations"), or assure or in effect assure the holder of the guaranteed
obligations against loss in respect thereof, including any such obligations
incurred through an agreement, contingent or otherwise: (a) to purchase the
guaranteed obligations or any property constituting security therefor; (b) to
advance or supply funds for the purchase or payment of the guaranteed
obligations or to maintain a working capital or other balance sheet condition;
or (c) to lease property or to purchase any debt or equity securities or other
property or services.
"Hedge Agreement" means any and all transactions, agreements
or documents now existing or hereafter entered into, including, without
limitation, any agreement entered into in connection with the Master ISDA
Agreement, which provides for an interest rate, credit, commodity or equity
swap, cap, floor, collar, forward foreign exchange transaction, currency swap,
cross currency rate swap, currency option, or any combination of, or option with
respect to, these or similar transactions, for the purpose of hedging the
Borrower's exposure to fluctuations in interest or exchange rates, loan, credit
exchange, security or currency valuations or commodity prices.
"Hillsboro" means Hillsboro Glass Company, a Delaware
corporation.
"IMTEC" means I.M.T.E.C. Enterprises, Inc., an Oklahoma
corporation.
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"Intercompany Accounts" means all assets and liabilities,
however arising, which are due to the Borrower from, which are due from the
Borrower to, or which otherwise arise from any transaction by the Borrower with
any Affiliate of the Borrower.
"Intercompany Agreement" means that agreement entered into as
of April 17, 1997, as amended, by and among G&G, Glenshaw Holdings, GGC
Holdings, GGC, Hillsboro, IMTEC, Consumers Packaging, the Borrower, Consumers
International Inc., Consumers U.S., CUS II, Inc., BTCC and The Bank of New York,
as Trustee under the First Mortgage Notes and as restated as of the date hereof
pursuant to that certain Restated Intercompany Agreement by and among G&G,
Glenshaw Holdings, GGC Holdings, GGC, Hillsboro, IMTEC, Consumers Packaging, the
Borrower, Consumers International Inc., Consumers U.S., CUS II, Inc., the Agent
and The Bank of New York, as Trustee under the First Mortgage Notes.
"Intercompany Note" means that certain Replacement Promissory
Note of even dated herewith in the principal amount of $17,330,021.37 maturing
on October 31, 2003 made by G & G, as maker, to the Borrower, as holder.
"Intercreditor Agreement" means that certain Intercreditor
Agreement originally dated as of February 5, 1997 and amended by that certain
Amendment No. 1 to Intercreditor Agreement dated as of April 17, 1997 by and
among The Bank of New York, as Note Agent, and BT Commercial Corporation, as
Credit Agent and Shared Collateral Agent and as thereafter amended from time to
time.
"Interest Period" means, as to any LIBOR Rate Loan, the period
commencing on the Funding Date of such Loan or on the Continuation/Conversion
Date on which the Loan is converted into or continued as a LIBOR Rate Loan, and
ending on the date one, two, three or six months thereafter as selected by the
Borrower in its Notice of Borrowing, in the form attached hereto as Exhibit C,
or Notice of Continuation/Conversion, in the form attached hereto as Exhibit D,
provided that:
(a) if any Interest Period would otherwise end on a day
that is not a Business Day, that Interest Period shall be extended to the
following Business Day unless the result of such extension would be to carry
such Interest Period into another calendar month, in which event such Interest
Period shall end on the preceding Business Day;
(b) any Interest Period pertaining to a LIBOR Rate Loan
that begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Business Day of the calendar month
at the end of such Interest Period; and
(c) no Interest Period shall extend beyond the Stated
Termination Date.
"Interest Rate" means each or any of the interest rates,
including the Default Rate, set forth in Section 3.1.
"Inventory" means all of the Borrower's now owned and
hereafter acquired inventory (as defined in the UCC), goods and merchandise,
wherever located, to be furnished under any contract of service or held for sale
or lease, all returned goods, raw materials, other
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materials and supplies of any kind, nature or description which are used or
consumed in the Borrower's business or used in connection with the packing,
shipping, advertising, selling or finishing of such goods or merchandise, and
all documents of title or other documents representing them.
"Investment Property" means, except as otherwise provided in
the next sentence, all of the Borrower's right title and interest in and to any
and all: (a) securities whether certificated or uncertificated; (b) securities
entitlements; (c) securities accounts; (d) commodity contracts; (e) commodity
accounts; and (f) Natural Gas Xxxxxx. Investment Property does not include
1,842,000 common shares of Consumers Packaging currently held by PNC Bank,
National Association pending contributions to the Anchor Glass Container
Corporation Service Retirement Plan.
"Irrevocable Proxy and Pledge Agreement" means that certain
Irrevocable Proxy and Pledge Agreement of even date herewith executed and
delivered by the Borrower to the Agent.
"IRS" means the Internal Revenue Service and any Governmental
Authority succeeding to any of its principal functions under the Code.
"Know-How Agreement" means that certain Know-How and
Cooperation Agreement dated December 19, 1997 between Xxxxxxx Xxxx
Kommanditgesellschaft, Consumers Packaging and the Borrower.
"Latest Projections" means: (a) on the Closing Date and
thereafter until the Agent receives new projections pursuant to Section 7.2(f),
the projections of the Borrower's financial condition, results of operations,
and cash flows, for the period commencing on July 1, 2000 and ending on December
31, 2000 and delivered to the Agent prior to the Closing Date; and (b)
thereafter, the projections most recently received by the Agent pursuant to
Section 7.2(f).
"Lender" and "Lenders" have the meanings specified in the
introductory paragraph hereof and shall include the Agent to the extent of any
Agent Advance outstanding and the Bank to the extent of any Non-Ratable Loan
outstanding; provided that no such Agent Advance or Non-Ratable Loan shall be
taken into account in determining any Lender's Pro Rata Share.
"Letter of Credit" has the meaning specified in Section
2.3(a).
"Letter of Credit Fee" has the meaning specified in Section
3.6.
"Letter of Credit Issuer" means the Bank, any Affiliate of the
Bank or any other financial institution that issues any Letter of Credit
pursuant to this Agreement.
"LIBOR Interest Payment Date" means, with respect to a LIBOR
Revolving Loan the first day of each month during the Interest Period applicable
to such Loan and the last day of the Interest Period applicable to such Loan.
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"LIBOR Rate" means, for any Interest Period, with respect to
LIBOR Rate Loans, the rate of interest per annum determined pursuant to the
following formula:
LIBOR Rate = Offshore Base Rate
---------------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Offshore Base Rate" means the rate per annum
appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior
to the first day of such Interest Period for a term comparable
to such Interest Period. If for any reason such rate is not
available, the Offshore Base Rate shall be, for any Interest
Period, the rate per annum appearing on Reuters Screen LIBO
Page as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided, however, if more
than one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such
rates. If for any reason none of the foregoing rates is
available, the Offshore Base Rate shall be, for any Interest
Period, the rate per annum determined by Agent as the rate of
interest at which Dollar deposits in the approximate amount of
the LIBOR Rate Loan comprising part of such Borrowing would be
offered by the Bank's London Branch to major banks in the
offshore Dollar market at their request at or about 11:00 a.m.
(London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period.
"Eurodollar Reserve Percentage" means, for any day
during any Interest Period, the reserve percentage (expressed
as a decimal, rounded upward to the next 1/100th of 1%) in
effect on such day applicable to member banks under
regulations issued from time to time by the Federal Reserve
Board for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal
reserve requirement) with respect to Eurocurrency funding
(currently referred to as "Eurocurrency liabilities"). The
Offshore Base Rate for each outstanding LIBOR Rate Loan shall
be adjusted automatically as of the effective date of any
change in the Eurodollar Reserve Percentage.
"LIBOR Rate Loans" means, collectively, the LIBOR Revolving
Loans.
"LIBOR Revolving Loan" means a Revolving Loan during any
period in which it bears interest based on the LIBOR Rate.
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"Lien" means: (a) any interest in property securing an
obligation owed to, or a claim by, a Person other than the owner of the
property, whether such interest is based on the common law, statute, or
contract, and including a security interest, charge, claim, or lien arising from
a mortgage, deed of trust, encumbrance, pledge, hypothecation, assignment,
deposit arrangement, agreement, security agreement, conditional sale or trust
receipt or a lease, consignment or bailment for security purposes; (b) to the
extent not included under clause (a), any reservation, exception, encroachment,
easement, right-of-way, covenant, condition, restriction, lease or other title
exception or encumbrance affecting property; and (c) any contingent or other
agreement to provide any of the foregoing.
"Loan Account" means the loan account of the Borrower, which
account shall be maintained by the Agent.
"Loan Documents" means this Agreement, the Patent, Trademark
and Copyright Agreements, the G & G Acknowledgement and Assignment, the
Consumers U.S. Guaranty and Pledge, the Irrevocable Proxy and Pledge Agreement,
the G & G Guaranty and Pledge, a General Security Agreement executed by the
Borrower and any other agreements, instruments, and documents heretofore, now or
hereafter evidencing, securing, guaranteeing or otherwise relating to the
Obligations, the Collateral, or any other aspect of the transactions
contemplated by this Agreement.
"Loans" means, collectively, all loans and advances provided
for in Article 2.
"Majority Lenders" means at any date of determination, the
Lenders whose Pro Rata Shares aggregate more than 51%, as such percentage is
determined under the definition of Pro Rata Share set forth herein.
"Management Agreement" means that certain Management Agreement
dated as of February 5, 1997, between G & G and the Borrower.
"Margin Stock" means "margin stock" as such term is defined in
Regulation T, U or X of the Federal Reserve Board.
"Master ISDA Agreement" means a Master ISDA Agreement between
the Borrower and Bank of America.
"Material Adverse Effect" means (a) a material adverse change
in, or a material adverse effect upon, the operations, business, properties,
condition (financial or otherwise) or prospects of the Borrower or the
Collateral; (b) a material impairment of the ability of the Borrower to perform
under any Loan Document to which it is a party and to avoid any Event of
Default; or (c) a material adverse effect upon the legality, validity, binding
effect or enforceability against the Borrower of any Loan Document to which it
is a party. For purposes hereof, the existence of the Xxxxx Litigation shall
not, in and of itself, constitute a Material Adverse Effect, but a material
adverse change in, or a material adverse effect upon the operations, business,
properties, condition of the Borrower (financial or otherwise), as a result of a
material adverse development in the Xxxxx Litigation will constitute a Material
Adverse Effect.
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"Maximum Inventory Loan" means the lesser of (i) the maximum
amount that may be advanced on the basis of Eligible Inventory pursuant to the
definition of Borrowing Base and (ii) $55,000,000.
"Maximum Rate" has the meaning specified in Section 3.3.
"Maximum Revolver Amount" means $100,000,000.
"Multi-employer Plan" means a "multi-employer plan" as defined
in Section 4001(a)(3) of ERISA which is or was at any time during the current
year or the immediately preceding six (6) years contributed to by the Borrower
or any ERISA Affiliate.
"Natural Gas Hedge" means a contract pursuant to which the
Borrower will pay an amount based on margin either to secure fixed quantities
of, or set prices for, natural gas, or both, in the future and will either take
delivery or close out its position at a later date.
"Net Amount of Eligible Accounts" means, at any time, the
gross amount of Eligible Accounts less sales, excise or similar taxes, and less
returns, discounts, claims, accrued liability for price rebates and anticipated
allowances and other credits and allowances of any nature at any time issued,
owing, granted, outstanding, available or claimed.
"Non-Ratable Loan" and "Non-Ratable Loans" have the meanings
specified in Section 2.2(h).
"Notice of Borrowing" has the meaning specified in Section
2.2(b).
"Notice of Continuation/Conversion" has the meaning specified
in Section 3.2(b).
"Obligations" means all present and future loans, advances,
liabilities, obligations, covenants, duties, and debts owing by the Borrower to
the Agent and/or any Lender, arising under or pursuant to this Agreement or any
of the other Loan Documents, whether or not evidenced by any note, or other
instrument or document, whether arising from an extension of credit, opening of
a letter of credit, acceptance, loan, guaranty, indemnification or otherwise,
whether direct or indirect, absolute or contingent, due or to become due,
primary or secondary, as principal or guarantor, and including all principal,
interest, charges, expenses, fees, attorneys' fees, filing fees and any other
sums chargeable to the Borrower hereunder or under any of the other Loan
Documents. "Obligations" includes, without limitation, (a) all debts,
liabilities, and obligations now or hereafter arising from or in connection with
the Letters of Credit and (b) all debts, liabilities and obligations now or
hereafter arising from or in connection with Bank Products.
"Other Senior Debt" means the Debt for Borrowed Money
evidenced by the Senior Notes and by the First Mortgage Notes.
"Other Taxes" means 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 or any other Loan
Documents.
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"Xxxxx" means Xxxxx-Xxxxxxxx Glass Container, Inc., a Delaware
corporation.
"Xxxxx Litigation" means the series of disputes between the
Borrower, Consumers Packaging and certain of its Affiliates and Xxxxx that is
currently in arbitration proceedings, and all other judicial or administrative
proceedings relating thereto.
"Pabst Brewing Company Notes" means two $5,000,000 promissory
notes made to the Borrower by the Pabst Brewing Company.
"Participant" means any Person who shall have been granted the
right by any Lender to participate in the financing provided by such Lender
under this Agreement, and who shall have entered into a participation agreement
in form and substance satisfactory to such Lender.
"Patent, Trademark and Copyright Agreements" means the
Collateral Patent Security Agreement, the Collateral Trademark Security
Agreement and the Collateral Copyright Security Agreement, each dated as of the
date hereof, executed and delivered by the Borrower to the Agent to evidence and
perfect the Agent's security interest in the Borrower's present and future
patents, trademarks and copyrights, and related licenses and rights, for the
benefit of the Agent and the Lenders.
"Payment Account" means each bank account established pursuant
to Section 6.9, to which the proceeds of Accounts and other Collateral are
deposited or credited, and which is maintained in the name of the Agent or the
Borrower, as the Agent may determine, on terms acceptable to the Agent.
"PBGC" means the Pension Benefit Guaranty Corporation or any
Governmental Authority succeeding to the functions thereof.
"Pending Revolving Loans" means, at any time, the aggregate
principal amount of all Revolving Loans requested in any Notice of Borrowing
received by the Agent which have not yet been advanced.
"Pension Plan" means a pension plan (as defined in Section
3(2) of ERISA) subject to Title IV of ERISA which the Borrower sponsors,
maintains, or to which it makes, is making, or is obligated to make
contributions, or in the case of a Multi-employer Plan has made contributions at
any time during the immediately preceding five (5) plan years.
"Permitted Debt" has the meaning specified in Section 8.9.
"Permitted Holders" means (a) in the case of Consumers
Packaging, (i) Xxxx X. Xxxxxxxx; (ii) the spouse, parents, siblings, descendants
(including children or grandchildren by adoption) of Xxxx X. Xxxxxxxx or of such
spouse or siblings; (iii) in the event of the incompetence or death of any of
Xxxx X. Xxxxxxxx or any of the Persons described in clause (ii), such Person's
estate, executor, administrator, committee or other personal representative in
each case who at any particular date shall beneficially own or have the right to
acquire, directly or indirectly, Voting Stock of Consumers Packaging; (iv) any
trusts created for the sole benefit of Xxxx X. Xxxxxxxx or the Persons described
in clauses (ii) or (iii) or any trust for the benefit of such trust;
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or (v) any Person of which Xxxx X. Xxxxxxxx or any of the Persons described in
clauses (ii) or (iii) (x) "beneficially owns" (as defined in Rules 13d-3 and
13d-5 under the Exchange Act) on a fully-diluted basis all of the Voting Stock
of such Person or (y) is the sole trustee or general partner, or otherwise has
the sole power to manage the business and affairs, of such Person and (b) in the
case of the Borrower and Consumers U.S., Consumers Packaging and its
wholly-owned Subsidiaries.
"Permitted Liens" means:
(a) Liens for taxes provided that the payment of such
taxes which are due and payable is being contested in good faith and by
appropriate proceedings diligently pursued and as to which adequate financial
reserves have been established on the Borrower's books and records to the extent
required by GAAP and a stay of enforcement of any such Lien is in effect;
(b) the Agent's Liens;
(c) Liens consisting of deposits made in the ordinary
course of business in connection with, or to secure payment of, obligations
under worker's compensation, unemployment insurance, social security and other
similar laws, or to secure the performance of bids, tenders or contracts (other
than for the repayment of borrowed money) or to secure indemnity, performance or
other similar bonds for the performance of bids, tenders or contracts (other
than for the repayment of borrowed money) or to secure statutory obligations
(other than Liens arising under ERISA or Environmental Liens) or surety or
appeal bonds, or to secure indemnity, performance or other similar bonds;
(d) Liens securing the claims or demands of materialmen,
mechanics, carriers, warehousemen, landlords and other like Persons, provided
that if any such Lien arises from the nonpayment of such claims or demand when
due, such claims or demands do not exceed (i) $1,000,000 in the aggregate with
respect to claims or demands of materialmen, mechanics and carriers and (ii)
$100,000 individually and $250,000 in the aggregate with respect to claims or
demands of warehousemen and landlords;
(e) Liens constituting encumbrances in the nature of
reservations, exceptions, encroachments, easements, rights of way, covenants
running with the land, and other similar title exceptions or encumbrances
affecting any Real Estate; provided that they do not in the aggregate materially
detract from the value of the Real Estate or materially interfere with its use
in the ordinary conduct of the Borrower's business;
(f) Liens arising from judgments and attachments in
connection with court proceedings provided that the attachment or enforcement of
such Liens would not result in an Event of Default hereunder and such Liens are
being contested in good faith by appropriate proceedings, adequate reserves have
been set aside and no material Property is subject to a material risk of loss or
forfeiture and the claims in respect of such Liens are fully covered by
insurance (subject to ordinary and customary deductibles) and a stay of
execution pending appeal or proceeding for review is in effect;
(g) Liens securing the First Mortgage Notes as provided
in the Intercreditor Agreement;
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(h) Liens in connection with workers' compensation,
unemployment insurance and similar legislation not to exceed in the aggregate
$250,000;
(i) Liens to secure Debt permitted pursuant to clause (c)
of Section 8.9, but only to the extent such Debt represents all or part of the
cost of purchase, lease, construction or improvement of the property acquired,
leased, constructed or improved provided that with respect to said clause (c)
(A) such Liens shall extend only to the specific property acquired, leased,
constructed or improved with the proceeds of such Debt, and (B) the aggregate
amount of Debt secured by any such Lien shall not exceed the fair market value
of the property acquired, leased, constructed or improved; and
(j) Liens, other than those described in the preceding
clauses (a) through (i), that (i) do not affect the Collateral and (ii) are not
in excess of $1,000,000 in the aggregate at any one time.
"Permitted Rentals" has the meaning specified in Section 9.24.
"Person" means any individual, sole proprietorship,
partnership, limited liability company, joint venture, trust, unincorporated
organization, association, corporation, Governmental Authority, or any other
entity.
"Plan" means an employee benefit plan (as defined in Section
3(3) of ERISA) which the Borrower sponsors or maintains or to which the Borrower
makes, is making, or is obligated to make contributions and includes any Pension
Plan.
"Plant Closing" means the termination of manufacturing
operations at any of the facilities that the Borrower owns or controls.
"Pro Rata Share" means, with respect to a Lender, a fraction
(expressed as a percentage), the numerator of which is the amount of such
Lender's Commitment and the denominator of which is the sum of the amounts of
all of the Lenders' Commitments, or if no Commitments are outstanding, a
fraction (expressed as a percentage), the numerator of which is the amount of
Obligations owed to such Lender and the denominator of which is the aggregate
amount of the Obligations owed to the Lenders, in each case giving effect to a
Lender's participation in Non-Ratable Loans and Agent Advances.
"Proprietary Rights" means all of the Borrower's now owned and
hereafter arising or acquired: licenses, franchises, permits, patents, patent
rights, copyrights, works which are the subject matter of copyrights,
trademarks, service marks, trade names, trade styles, patent, trademark and
service xxxx applications, and all licenses and rights related to any of the
foregoing, including those patents, trademarks, service marks, trade names and
copyrights set forth on Schedule 8.13 hereto, and all other rights under any of
the foregoing, all extensions, renewals, reissues, divisions, continuations, and
continuations-in-part of any of the foregoing, and all rights to xxx for past,
present and future infringement of any of the foregoing.
"Qualified Public Offering" means an underwritten public
offering of the common stock of the Borrower pursuant to a Registration
Statement filed with the SEC in accordance with the Securities Act resulting in
net equity proceeds of at least $75 million.
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"Real Estate" means all of the Borrower's now or hereafter
owned or leased estates in real property, including, without limitation, all
fees, leaseholds and future interests, together with all of the Borrower's now
or hereafter owned or leased interests in the improvements thereon, the fixtures
attached thereto and the easements appurtenant thereto.
"Release" means a release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration of a
Contaminant into the indoor or outdoor environment or into or out of any Real
Estate or other property, including the movement of Contaminants through or in
the air, soil, surface water, groundwater or Real Estate or other property.
"Rentals" has the meaning specified in Section 9.24.
"Reportable Event" means, any of the events set forth in
Section 4043(b) of ERISA or the regulations thereunder, other than any such
event for which the 30-day notice requirement under ERISA has been waived in
regulations issued by the PBGC.
"Required Lenders" means at any time Lenders whose Pro Rata
Shares aggregate more than 66-2/3%, as such percentage is determined under the
definition of Pro Rata Share set forth herein.
"Requirement of Law" means, as to any Person, any law
(statutory or common), treaty, rule or regulation or determination of an
arbitrator or of a Governmental Authority, in each case applicable to or binding
upon the Person or any of its property or to which the Person or any of its
property is subject.
"Responsible Officer" means the chief executive officer or the
president of the Borrower, or any other officer having substantially the same
authority and responsibility; or, with respect to compliance with financial
covenants and the preparation of the Borrowing Base Certificate, the chief
financial officer or the treasurer of the Borrower, or any other officer having
substantially the same authority and responsibility.
"Restricted Investment" means, as to the Borrower, any
acquisition of property by the Borrower in exchange for cash or other property,
whether in the form of an acquisition of stock, debt, or other indebtedness or
obligation, or the purchase or acquisition of any other property, or a loan,
advance, capital contribution, or subscription, except the following: (a)
acquisitions of Equipment to be used in the business of the Borrower so long as
the acquisition costs thereof constitute Capital Expenditures permitted
hereunder; (b) acquisitions of Inventory in the ordinary course of business of
the Borrower; (c) acquisitions of current assets acquired in the ordinary course
of business of the Borrower; (d) direct obligations of the United States of
America, or any agency thereof, or obligations guaranteed by the United States
of America, provided that such obligations mature within one year from the date
of acquisition thereof; (e) acquisitions of certificates of deposit maturing
within one year from the date of acquisition, bankers' acceptances, Eurodollar
bank deposits, or overnight bank deposits, in each case issued by, created by,
or with a bank or trust company organized under the laws of the United States of
America or any state thereof having capital and surplus aggregating at least
$100,000,000; (f) acquisitions of commercial paper given a rating of "A2" or
better by Standard & Poor's
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Corporation or "P2" or better by Xxxxx'x Investors Service, Inc. and maturing
not more than 90 days from the date of creation thereof; and (g) Hedge
Agreements.
"Revolving Loans" has the meaning specified in Section 2.2 and
includes each Agent Advance and Non-Ratable Loan.
"SEC" means the Securities & Exchange Commission.
"Senior Notes" means the Debt for Borrowed Money in the
original principal amount of $50,000,000 evidenced by 9-7/8% Senior Notes due
2008 and further evidenced and secured by that certain Indenture dated March 16,
1998, by and among the Borrower, as issuer, Consumers U.S., as guarantor, and
The Bank of New York, as trustee.
"Settlement" and "Settlement Date" have the meanings specified
in Section 2.2(j)(i).
"Solvent" means when used with respect to any Person that at
the time of determination:
(a) the assets of such Person, at a fair valuation, are
in excess of the total amount of its debts (including contingent liabilities);
and
(b) the present fair saleable value of its assets is
greater than its probable liability on its existing debts as such debts become
absolute and matured; and
(c) it is then able and expects to be able to pay its
debts (including contingent debts and other commitments) as they mature; and
(d) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
For purposes of determining whether a Person is Solvent, the amount of any
contingent liability shall be computed as the amount that, in light of all the
facts and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"Stated Termination Date" means the earlier of (a) the third
anniversary of the Closing Date and (b) October 31, 2003.
"Strategic Alliance Payment" means any payment, excluding
rebates, associated with a long term agreement with a customer, which the
Borrower is amortizing on its statement of operations as a component of net
sales over the life of the associated agreement or which is similar to any such
payment arrangement if the Borrower chooses not to amortize it on its statement
of operations.
"Subsidiary" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other business entity
of which more than fifty percent (50%) of the Voting Stock or other equity
interests (in the case of Persons other than corporations), is
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owned or controlled directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof. Unless the context
otherwise clearly requires, references herein to a "Subsidiary" refer to a
Subsidiary of the Borrower.
"TALA" means that certain Technical Assistance and License
Agreement dated December 18, 1996, among Xxxxx, as licensor and Consumers
Packaging, as licensee, which the Borrower and others, joined as additional
licensees on February 5, 1997.
"Taxes" means any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender and the Agent, such taxes
(including income taxes or franchise taxes) as are imposed on or measured by the
Agent's or each Lender's net income in any jurisdiction (whether federal, state
or local and including any political subdivision thereof) under the laws of
which such Lender or the Agent, as the case may be, is organized or maintains a
lending office.
"Termination Date" means the earliest to occur of (i) the
Stated Termination Date, (ii) the date the Total Facility is terminated either
by the Borrower pursuant to Section 4.2 or by the Required Lenders pursuant to
Section 11.2, and (iii) the date this Agreement is otherwise terminated for any
reason whatsoever pursuant to the terms of this Agreement.
"Total Facility" has the meaning specified in Section 2.1.
"UCC" means the Uniform Commercial Code (or any successor
statute), as in effect from time to time, of the State of Illinois or of any
other state the laws of which are required as a result thereof to be applied in
connection with the issue of perfection of security interests.
"Unfunded Pension Liability" means the excess of all of the
benefit liabilities promised under the terms of a Plan over the current value of
that Plan's assets, determined in accordance with the assumptions used to
determine termination or withdrawal liability to the PBGC under Title IV of
ERISA.
"Unused Letter of Credit Subfacility" means an amount equal to
$15,000,000 minus the sum of (a) the aggregate undrawn amount of all outstanding
Letters of Credit plus (b) the aggregate unpaid reimbursement obligations with
respect to all Letters of Credit.
"Unused Line Fee" has the meaning specified in Section 3.5.
"U.S. Holdco" means a Delaware corporation to be formed that
will be controlled by G & G.
"Voting Stock" with respect to any Person, means securities of
any class of capital stock of such Person entitling the holders thereof (whether
at all times or only so long as no senior class of stock has voting power by
reason of any contingency) to vote in the election of members of the board of
directors (or equivalent governing body) of such Person.
1.2 Accounting Terms. Any accounting term used in this Agreement
shall have, unless otherwise specifically provided herein, the meaning
customarily given in accordance with
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GAAP, and all financial computations hereunder shall be computed, unless
otherwise specifically provided herein, in accordance with GAAP as consistently
applied and using the same method for inventory valuation as used in the
preparation of the Financial Statements.
1.3 Interpretive Provisions. (a) The meanings of defined terms are
equally applicable to the singular and plural forms of the defined terms.
(b) The words "hereof," "herein," "hereunder" and similar
words refer to this Agreement as a whole and not to any particular provision of
this Agreement; and Subsection, Section, Schedule and Exhibit references are to
this Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all
instruments, documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(ii) The term "including" is not limiting and
means "including without limitation."
(iii) In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including," the words "to" and "until" each mean "to but excluding" and the word
"through" means "to and including."
(d) Unless otherwise expressly provided herein, (i)
references to agreements (including this Agreement) and other contractual
instruments shall be deemed to include all subsequent amendments and other
modifications thereto, but only to the extent such amendments and other
modifications are not prohibited by the terms of any Loan Document, and (ii)
references to any statute or regulation are to be construed as including all
statutory and regulatory provisions consolidating, amending, replacing,
supplementing or interpreting the statute or regulation.
(e) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
(f) This Agreement and other Loan Documents may use
several different limitations, tests or measurements to regulate the same or
similar matters. All such limitations, tests and measurements are cumulative and
shall each be performed in accordance with their terms.
(g) This Agreement and the other Loan Documents are the
result of negotiations among and have been reviewed by counsel to the Agent, the
Borrower and the other parties, and are the products of all parties.
Accordingly, they shall not be construed against the Lenders or the Agent merely
because of the Agent's or the Lenders' involvement in their preparation.
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ARTICLE 2
LOANS AND LETTERS OF CREDIT
2.1 Total Facility. Subject to all of the terms and conditions of
this Agreement, the Lenders severally agree to make available a total credit
facility of up to $100,000,000 (the "Total Facility") for the Borrower's use
from time to time during the term of this Agreement. The Total Facility shall be
composed of a revolving line of credit consisting of Revolving Loans and Letters
of Credit up to the Borrowing Base, as described in Sections 2.2 and 2.3.
2.2 Revolving Loans. (a) Amounts. Subject to the satisfaction of
the conditions precedent set forth in Article 10, each Lender severally, but not
jointly, agrees, upon the Borrower's request from time to time on any Business
Day during the period from the Closing Date to the Termination Date, to make
revolving loans (the "Revolving Loans") to the Borrower in amounts not to exceed
(except for the Bank with respect to Non-Ratable Loans and except for the Agent
with respect to Agent Advances) such Lender's Pro Rata Share of the Borrowing
Base. The Lenders, however, in their unanimous discretion, may elect to make
Revolving Loans or issue or arrange to have issued Letters of Credit in excess
of the Availability on one or more occasions, but if they do so, neither the
Agent nor the Lenders shall be deemed thereby to have changed the limits of the
Borrowing Base or to be obligated to exceed such limits on any other occasion.
If the Aggregate Revolver Outstandings exceed the Borrowing Base, the Lenders
may refuse to make or otherwise restrict the making of Revolving Loans as the
Lenders determine until such excess has been eliminated, subject to the Agent's
authority, in its sole discretion, to make Agent Advances pursuant to the terms
of Section 2.2(i).
(b) Procedure for Borrowing. (1) Each Borrowing shall be
made upon the Borrower's irrevocable written notice delivered to the Agent in
the form of a notice of borrowing ("Notice of Borrowing") together with a
Borrowing Base Certificate reflecting sufficient Availability, which must be
received by the Agent prior to 11 a.m. (Chicago, Illinois time) (i) three
Business Days prior to the requested Funding Date, in the case of LIBOR Rate
Loans and (ii) no later than 11:00 a.m. (Chicago, Illinois time) on the
requested Funding Date, in the case of Base Rate Loans, specifying:
(A) the amount of the Borrowing, which in the
case of a LIBOR Rate Loan may not be less than $2,000,000 and must be in an
integral multiple of $1,000,000, and which in the case of Base Rate Loans,
subject to the other provisions of this Agreement, may be in any amount
requested by the Borrower;
(B) the requested Funding Date, which shall be a
Business Day;
(C) whether the Revolving Loans requested are to
be Base Rate Revolving Loans or LIBOR Revolving Loans (and if not specified, it
shall be deemed a request for a Base Rate Revolving Loan); and
(D) the duration of the Interest Period if the
requested Revolving Loans are to be LIBOR Revolving Loans. If the Notice of
Borrowing fails to specify
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the duration of the Interest Period for any Borrowing comprised of LIBOR Rate
Loans, such Interest Period shall be one month;
provided, however, that with respect to the Borrowing to be made on the Closing
Date, such Borrowings will consist of Base Rate Revolving Loans only.
(2) With respect to any request for Base Rate
Revolving Loans, in lieu of delivering the above-described Notice of Borrowing
the Borrower may give the Agent telephonic notice of such request by the
required time, with such telephonic notice to be confirmed in writing within 24
hours of the giving of such notice but the Agent at all times shall be entitled
to rely on such telephonic notice in making such Revolving Loans, regardless of
whether any such confirmation is received by the Agent.
(3) The Borrower shall have no right to request
a LIBOR Rate Loan while a Default or Event of Default has occurred and is
continuing.
(c) Reliance upon Authority. The Borrower shall deliver
to the Agent, prior to the Closing Date, a writing setting forth the account of
the Borrower to which the Agent is authorized to transfer the proceeds of the
Revolving Loans requested pursuant to this Section 2.2. which account shall be
reasonably satisfactory to the Agent. The Agent shall be entitled to rely
conclusively on any person's request for Revolving Loans on behalf of the
Borrower, the proceeds of which are to be transferred to the account specified
by the Borrower pursuant to the immediately preceding sentence, until the Agent
receives written notice from the Borrower that the proceeds of the Revolving
Loans are to be sent to a different account. The Agent shall have no duty to
verify the identity of any individual representing himself or herself as a
person authorized by the Borrower to make such requests on its behalf.
(d) No Liability. The Agent shall not incur any liability
to the Borrower as a result of acting upon any notice referred to in Sections
2.2(b) and (c), which notice the Agent believes in good faith to have been given
by an officer or other person duly authorized by the Borrower to request
Revolving Loans on its behalf or for otherwise acting in good faith under this
Section 2.2, and the crediting of Revolving Loans to the Borrower's deposit
account, as the Borrower shall direct, shall conclusively establish the
obligation of the Borrower to repay such Revolving Loans as provided herein.
(e) Notice Irrevocable. Except to the extent otherwise
permitted to the contrary pursuant to the provisions of Section 5.5, any Notice
of Borrowing (or telephonic notice in lieu thereof) made pursuant to Section
2.2(b) shall be irrevocable and the Borrower shall be bound to borrow the funds
requested therein in accordance therewith.
(f) Agent's Election. Promptly after receipt of a Notice
of Borrowing (or telephonic notice in lieu thereof) pursuant to Section 2.2(b),
the Agent shall elect, in its discretion, (i) to have the terms of Section
2.2(g) apply to such requested Borrowing, or (ii) to request the Bank to make a
Non-Ratable Loan pursuant to the terms of Section 2.2(h) in the amount of the
requested Borrowing; provided, however, that if the Bank declines in its sole
discretion to make a Non-Ratable Loan pursuant to Section 2.2(h), the Agent
shall elect to have the terms of Section 2.2(g) apply to such requested
Borrowing.
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(g) Making of Revolving Loans. (i) In the event that the
Agent shall elect to have the terms of this Section 2.2(g) apply to a requested
Borrowing as described in Section 2.2(f), then promptly after receipt of a
Notice of Borrowing or telephonic notice pursuant to Section 2.2(b), the Agent
shall notify the Lenders by telecopy, telephone or other similar form of
transmission, of the requested Borrowing. Each Lender shall make the amount of
such Lender's Pro Rata Share of the requested Borrowing available to the Agent
in immediately available funds, to such account of the Agent as the Agent may
designate, not later than 10 a.m., (Chicago, Illinois time) on the Funding Date
applicable thereto. After the Agent's receipt of the proceeds of such Revolving
Loans, the Agent shall make the proceeds of such Revolving Loans available to
the Borrower on the applicable Funding Date by transferring same day funds equal
to the proceeds of such Revolving Loans received by the Agent to the account of
the Borrower, designated in writing by the Borrower and acceptable to the Agent;
provided, however, that the amount of Revolving Loans so made on any date shall
in no event exceed the Availability on such date.
(ii) Unless the Agent receives notice from a
Lender on or prior to the Closing Date or, with respect to any Borrowing after
the Closing Date, at least one Business Day prior to the date of such Borrowing,
that such Lender will not make available as and when required hereunder to the
Agent for the account of the Borrower the amount of that Lender's Pro Rata Share
of the Borrowing, the Agent may assume that each Lender has made such amount
available to the Agent in immediately available funds on the Funding Date and
the Agent may (but shall not be so required), in reliance upon such assumption,
make available to the Borrower on such date a corresponding amount. If and to
the extent any Lender shall not have made its full amount available to the Agent
in immediately available funds and the Agent in such circumstances has made
available to the Borrower such amount, that Lender shall on the Business Day
following such Funding Date make such amount available to the Agent, together
with interest at the Federal Funds Rate for each day during such period. A
notice by the Agent submitted to any Lender with respect to amounts owing under
this subsection shall be conclusive, absent manifest error. If such amount is so
made available, such payment to the Agent shall constitute such Lender's
Revolving Loan for all purposes of this Agreement. If such amount is not made
available to the Agent on the Business Day following the Funding Date, the Agent
will notify the Borrower of such failure to fund and, upon demand by the Agent,
the Borrower shall pay such amount to the Agent for the Agent's account,
together with interest thereon for each day elapsed since the date of such
Borrowing, at a rate per annum equal to the Interest Rate applicable at the time
to the Revolving Loans comprising such Borrowing. The failure of any Lender to
make any Revolving Loan on any Funding Date (any such Lender, prior to the cure
of such failure, being hereinafter referred to as a "Defaulting Lender") shall
not relieve any other Lender of any obligation hereunder to make a Revolving
Loan on such Funding Date, but no Lender shall be responsible for the failure of
any other Lender to make the Revolving Loan to be made by such other Lender on
any Funding Date.
(iii) The Agent shall not be obligated to transfer
to a Defaulting Lender any payments made by the Borrower to the Agent for the
Defaulting Lender's benefit; nor shall a Defaulting Lender be entitled to the
sharing of any payments hereunder. Amounts payable to a Defaulting Lender shall
instead be paid to or retained by the Agent. The Agent may hold and, in its
discretion, re-lend to the Borrower the amount of all such payments received or
retained by it for the account of such Defaulting Lender. Any amounts so re-lent
to the Borrower shall bear
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interest at the rate applicable to Base Rate Revolving Loans and for all other
purposes of this Agreement shall be treated as if they were Revolving Loans,
provided, however, that for purposes of voting or consenting to matters with
respect to the Loan Documents and determining Pro Rata Shares, such Defaulting
Lender shall be deemed not to be a "Lender". Until a Defaulting Lender cures its
failure to fund its Pro Rata Share of any Borrowing (A) such Defaulting Lender
shall not be entitled to any portion of the Unused Line Fee and (B) the Unused
Line Fee shall accrue in favor of the Lenders which have funded their respective
Pro Rata Shares of such requested Borrowing and shall be allocated among such
performing Lenders ratably based upon their relative Commitments. This Section
shall remain effective with respect to such Lender until such time as the
Defaulting Lender shall no longer be in default of any of its obligations under
this Agreement. The terms of this Section shall not be construed to increase or
otherwise affect the Commitment of any Lender, or relieve or excuse the
performance by the Borrower of its duties and obligations hereunder.
(h) Making of Non-Ratable Loans. (i) In the event the
Agent shall elect, with the consent of the Bank, to have the terms of this
Section 2.2(h) apply to a requested Borrowing as described in Section 2.2(f),
the Bank shall make a Revolving Loan in the amount of such Borrowing (any such
Revolving Loan made solely by the Bank pursuant to this Section 2.2(h) being
referred to as a "Non-Ratable Loan" and such Revolving Loans being referred to
collectively as "Non-Ratable Loans") available to the Borrower on the Funding
Date applicable thereto by transferring same day funds to an account of the
Borrower, designated in writing by the Borrower and acceptable to the Agent.
Each Non-Ratable Loan shall be subject to all the terms and conditions
applicable to other Revolving Loans except that all payments thereon shall be
payable to the Bank solely for its own account (and for the account of the
holder of any participation interest with respect to such Revolving Loan). The
Agent shall not request the Bank to make any Non-Ratable Loan if (A) the Agent
shall have received written notice from any Lender that one or more of the
applicable conditions precedent set forth in Article 10 will not be satisfied on
the requested Funding Date for the applicable Borrowing, or (B) the requested
Borrowing would exceed the Availability on such Funding Date. The Agent shall
not otherwise be required to determine whether the applicable conditions
precedent set forth in Article 10 have been satisfied or the requested Borrowing
would exceed the Availability on the Funding Date applicable thereto prior to
making, in its sole discretion, any Non-Ratable Loan.
(ii) The Non-Ratable Loans shall be secured by
the Agent's Liens in and to the Collateral, shall constitute Revolving Loans and
Obligations hereunder, and shall bear interest at the rate applicable to the
Revolving Loans from time to time.
(i) Agent Advances. (i) Subject to the limitations set
forth in the provisos contained in this Section 2.2(i), the Agent is hereby
authorized by the Borrower and the Lenders, from time to time in the Agent's
sole discretion, (A) after the occurrence of a Default or an Event of Default,
or (B) at any time that any of the other applicable conditions precedent set
forth in Article 10 have not been satisfied, to make Base Rate Revolving Loans
to the Borrower on behalf of the Lenders which the Agent, in its reasonable
business judgment, deems necessary or desirable (1) to preserve or protect the
Collateral, or any portion thereof, (2) to enhance the likelihood of, or
maximize the amount of, repayment of the Loans and other Obligations, or (3) to
pay any other amount chargeable to the Borrower pursuant to the terms of this
Agreement, including costs, fees and expenses as described in Section 15.7 (any
of the advances described in
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this Section 2.2(i) being hereinafter referred to as "Agent Advances");
provided, that the Majority Lenders may at any time revoke the Agent's
authorization contained in this Section 2.2(i) to make Agent Advances, any such
revocation to be in writing and to become effective prospectively upon the
Agent's receipt thereof;
(ii) The Agent Advances shall be repayable on
demand and secured by the Agent's Liens in and to the Collateral, shall
constitute Revolving Loans and Obligations hereunder, and shall bear interest at
the rate applicable to Base Rate Revolving Loans from time to time. The Agent
shall notify each Lender in writing of each such Agent Advance.
(j) Settlement. It is agreed that each Lender's funded
portion of the Revolving Loans is intended by the Lenders to be equal at all
times to such Lender's Pro Rata Share of the outstanding Revolving Loans.
Notwithstanding such agreement, the Agent, the Bank, and the other Lenders agree
(which agreement shall not be for the benefit of or enforceable by the Borrower)
that in order to facilitate the administration of this Agreement and the other
Loan Documents, settlement among them as to the Revolving Loans, the Non-Ratable
Loans and the Agent Advances shall take place on a periodic basis in accordance
with the following provisions:
(i) The Agent shall request settlement
("Settlement") with the Lenders on at least a weekly basis, or on a more
frequent basis if so determined by the Agent, (A) on behalf of the Bank, with
respect to each outstanding Non-Ratable Loan, (B) for itself, with respect to
each Agent Advance, and (C) with respect to collections received, in each case,
by notifying the Lenders of such requested Settlement by telecopy, telephone or
other similar form of transmission, of such requested Settlement, no later than
11 a.m. (Chicago, Illinois time) on the date of such requested Settlement (the
"Settlement Date"). Each Lender (other than the Bank, in the case of Non-Ratable
Loans and the Agent in the case of Agent Advances) shall make the amount of such
Lender's Pro Rata Share of the outstanding principal amount of the Non-Ratable
Loans and Agent Advances with respect to which Settlement is requested available
to the Agent, to such account of the Agent as the Agent may designate, not later
than 2 p.m. (Chicago, Illinois time), on the Settlement Date applicable thereto,
which may occur before or after the occurrence or during the continuation of a
Default or an Event of Default and whether or not the applicable conditions
precedent set forth in Article 10 have then been satisfied. Such amounts made
available to the Agent shall be applied against the amounts of the applicable
Non-Ratable Loan or Agent Advance and, together with the portion of such
Non-Ratable Loan or Agent Advance representing the Bank's Pro Rata Share
thereof, shall constitute Revolving Loans of such Lenders. If any such amount is
not made available to the Agent by any Lender on the Settlement Date applicable
thereto, the Agent shall (A) on behalf of the Bank, with respect to each
outstanding Non-Ratable Loan, and (B) for itself, with respect to each Agent
Advance be entitled to recover such amount on demand from such Lender together
with interest thereon at the Federal Funds Rate for the first three (3) days
from and after the Settlement Date and thereafter at the Interest Rate then
applicable to the Revolving Loans.
(ii) Notwithstanding the foregoing, not more than
one (1) Business Day after demand is made by the Agent (whether before or after
the occurrence of a Default or an Event of Default and regardless of whether the
Agent has requested a Settlement with respect to a Non-Ratable Loan or Agent
Advance), each other Lender (A) shall irrevocably and
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unconditionally purchase and receive from the Bank or the Agent, as applicable,
without recourse or warranty, an undivided interest and participation in such
Non-Ratable Loan or Agent Advance equal to such Lender's Pro Rata Share of such
Non-Ratable Loan or Agent Advance and (B) if Settlement has not previously
occurred with respect to such Non-Ratable Loans or Agent Advances, upon demand
by the Bank or the Agent, as applicable, shall pay to the Bank or the Agent, as
applicable, as the purchase price of such participation an amount equal to
one-hundred percent (100%) of such Lender's Pro Rata Share of such Non-Ratable
Loans or Agent Advances. If such amount is not in fact made available to the
Agent by any Lender, the Agent shall be entitled to recover such amount on
demand from such Lender together with interest thereon at the Federal Funds Rate
for the first three (3) days from and after such demand and thereafter at the
Interest Rate then applicable to Base Rate Revolving Loans.
(iii) From and after the date, if any, on which
any Lender purchases an undivided interest and participation in any Non-Ratable
Loan or Agent Advance pursuant to clause (ii) preceding, the Agent shall
promptly distribute to such Lender, such Lender's Pro Rata Share of all payments
of principal and interest and all proceeds of Collateral received by the Agent
in respect of such Non-Ratable Loan or Agent Advance.
(iv) Between Settlement Dates, the Agent, to the
extent no Agent Advances are outstanding, may pay over to the Bank any payments
received by the Agent, which in accordance with the terms of this Agreement
would be applied to the reduction of the Revolving Loans, for application to the
Bank's Revolving Loans including Non-Ratable Loans. If, as of any Settlement
Date, collections received since the then immediately preceding Settlement Date
have been applied to the Bank's Revolving Loans (other than to Non-Ratable Loans
or Agent Advances in which such Lender has not yet funded its purchase of a
participation pursuant to Section 2.2(j)(ii) above), as provided for in the
previous sentence, the Bank shall pay to the Agent for the accounts of the
Lenders, to be applied to the outstanding Revolving Loans of such Lenders, an
amount such that each Lender shall, upon receipt of such amount, have, as of
such Settlement Date, its Pro Rata Share of the Revolving Loans. During the
period between Settlement Dates, the Bank with respect to Non-Ratable Loans, the
Agent with respect to Agent Advances, and each Lender with respect to the
Revolving Loans other than Non-Ratable Loans and Agent Advances, shall be
entitled to interest at the applicable rate or rates payable under this
Agreement on the actual average daily amount of funds employed by the Bank, the
Agent and the other Lenders.
(k) Notation. The Agent shall record on its books the
principal amount of the Revolving Loans owing to each Lender, including the
Non-Ratable Loans owing to the Bank, and the Agent Advances owing to the Agent,
from time to time. In addition, each Lender is authorized, at such Lender's
option, to note the date and amount of each payment or prepayment of principal
of such Lender's Revolving Loans in its books and records, including computer
records, such books and records constituting presumptive evidence, absent
manifest error, of the accuracy of the information contained therein.
(l) A Lender's Failure to Perform. All Revolving Loans
(other than Non-Ratable Loans and Agent Advances) shall be made by the Lenders
simultaneously and in accordance with their Pro Rata Shares. It is understood
that (i) no Lender shall be responsible for any failure by any other Lender to
perform its obligation to make any Revolving Loans
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hereunder, nor shall any Commitment of any Lender be increased or decreased as a
result of any failure by any other Lender to perform its obligation to make any
Revolving Loans hereunder, (ii) no failure by any Lender to perform its
obligation to make any Revolving Loans hereunder shall excuse any other Lender
from its obligation to make any Revolving Loans hereunder, and (iii) the
obligations of each Lender hereunder shall be several, not joint and several.
2.3 Letters of Credit.
(a) Agreement to Issue or Cause To Issue. Subject to the
terms and conditions of this Agreement, and in reliance upon the representations
and warranties of the Borrower herein set forth, the Agent agrees (i) to cause
the Letter of Credit Issuer to issue for the account of the Borrower one or more
commercial/documentary and standby letters of credit ("Letter of Credit") and/or
(ii) to provide credit support or other enhancement to a Letter of Credit Issuer
acceptable to the Agent, which issues a Letter of Credit for the account of the
Borrower (any such credit support or enhancement being herein referred to as a
"Credit Support") in accordance with this Section 2.3 from time to time during
the term of this Agreement.
(b) Amounts; Outside Expiration Date. The Agent shall not
have any obligation to take steps to issue or cause to be issued any Letter of
Credit or to provide Credit Support for any Letter of Credit at any time if: (i)
the maximum face amount of the requested Letter of Credit is greater than the
Unused Letter of Credit Subfacility at such time; (ii) the maximum undrawn
amount of the requested Letter of Credit and all commissions, fees, and charges
due from the Borrower in connection with the opening thereof exceed the
Availability at such time; or (iii) such Letter of Credit has an expiration date
later than thirty (30) days prior to the Stated Termination Date or more than
twelve (12) months from the date of issuance for standby letters of credit and
180 days for merchandise letters of credit.
(c) Other Conditions. In addition to being subject to the
satisfaction of the applicable conditions precedent contained in Article 10, the
obligation of the Agent to issue or to cause to be issued any Letter of Credit
or to provide Credit Support for any Letter of Credit is subject to the
following conditions precedent having been satisfied in a manner reasonably
satisfactory to the Agent:
(1) The Borrower shall have delivered to the
Letter of Credit Issuer, at such times and in such manner as such Letter of
Credit Issuer may prescribe, an application in form and substance satisfactory
to such Letter of Credit Issuer and reasonably satisfactory to the Agent for the
issuance of the Letter of Credit and such other documents as may be required
pursuant to the terms thereof, and the form and terms of the proposed Letter of
Credit shall be reasonably satisfactory to the Agent and the Letter of Credit
Issuer; and
(2) As of the date of issuance, no order of any
court, arbitrator or Governmental Authority shall purport by its terms to enjoin
or restrain money center banks generally from issuing letters of credit of the
type and in the amount of the proposed Letter of Credit, and no law, rule or
regulation applicable to money center banks generally and no request or
directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over money center banks generally shall prohibit, or
request that the proposed Letter
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of Credit Issuer refrain from, the issuance of letters of credit generally or
the issuance of such Letters of Credit.
(d) Issuance of Letters of Credit.
(1) Request for Issuance. The Borrower shall
give the Agent three (3) Business Days prior written notice of the Borrower's
request for the issuance of a Letter of Credit. Such notice shall be irrevocable
and shall specify the original face amount of the Letter of Credit requested,
the effective date (which date shall be a Business Day) of issuance of such
requested Letter of Credit, whether such Letter of Credit may be drawn in a
single or in partial draws, the date on which such requested Letter of Credit is
to expire (which date shall be a Business Day), the purpose for which such
Letter of Credit is to be issued, and the beneficiary of the requested Letter of
Credit. The Borrower shall attach to such notice the proposed form of the Letter
of Credit.
(2) Responsibilities of the Agent; Issuance. The
Agent shall determine, as of the Business Day immediately preceding the
requested effective date of issuance of the Letter of Credit set forth in the
notice from the Borrower pursuant to Section 2.3(d)(1), (A) the amount of the
applicable Unused Letter of Credit Subfacility and (B) the Availability as of
such date. If (i) the undrawn amount of the requested Letter of Credit is not
greater than the Unused Letter of Credit Subfacility and (ii) the amount of such
requested Letter of Credit and all commissions, fees, and charges due from the
Borrower in connection with the opening thereof would not exceed the
Availability, the Agent shall, so long as the other conditions hereof are met,
cause the Letter of Credit Issuer to issue the requested Letter of Credit on
such requested effective date of issuance.
(3) Notice of Issuance. On each Settlement Date,
the Agent shall give notice to each Lender of the issuance of all Letters of
Credit issued since the last Settlement Date.
(4) No Extensions or Amendment. The Agent shall
not be obligated to cause the Letter of Credit Issuer to extend or amend any
Letter of Credit issued pursuant hereto unless the requirements of this Section
2.3 are met as though a new Letter of Credit were being requested and issued.
With respect to any Letter of Credit which contains any "evergreen" or automatic
renewal provision, each Lender shall be deemed to have consented to any such
extension or renewal unless any such Lender shall have provided to the Agent,
not less than thirty (30) days prior to the last date on which the applicable
issuer can in accordance with the terms of the applicable Letter of Credit
decline to extend or renew such Letter of Credit, written notice that it
declines to consent to any such extension or renewal; provided that if all of
the requirements of this Section 2.3 are met and no Default or Event of Default
exists, no Lender shall decline to consent to any such extension or renewal.
(e) Payments Pursuant to Letters of Credit.
(1) Payment of Letter of Credit Obligations. The
Borrower agrees immediately upon demand to reimburse the Letter of Credit Issuer
for any draw under any Letter of Credit and the Agent for the account of the
Lenders upon any payment pursuant to any Credit
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Support, and to pay the Letter of Credit Issuer the amount of all other
obligations and other amounts payable to such Letter of Credit Issuer under or
in connection with any Letter of Credit immediately when due, irrespective of
any claim, setoff, defense or other right which the Borrower may have at any
time against such issuer or any other Person.
(2) Revolving Loans to Satisfy Reimbursement
Obligations. Each drawing under any Letter of Credit shall constitute a request
by the Borrower to the Agent for a Borrowing of a Base Rate Revolving Loan in
the amount of such drawing. The Funding Date with respect to such borrowing
shall be the date of such drawing.
(f) Participations.
(1) Purchase of Participations. Immediately upon
issuance of any Letter of Credit in accordance with Section 2.3(d), each Lender
shall be deemed to have irrevocably and unconditionally purchased and received
without recourse or warranty, an undivided interest and participation equal to
such Lender's Pro Rata Share of the face amount of such Letter of Credit or the
Credit Support provided through the Agent to the Letter of Credit Issuer, if not
the Agent, in connection with the issuance of such Letter of Credit (including
all obligations of the Borrower with respect thereto, and any security therefor
or guaranty pertaining thereto).
(2) Sharing of Reimbursement Obligation
Payments. Whenever the Agent receives a payment from the Borrower on account of
reimbursement obligations in respect of a Letter of Credit or Credit Support as
to which the Agent has previously received for the account of the Letter of
Credit Issuer thereof payment from a Lender pursuant to Section 2.3(e)(2), the
Agent shall promptly pay to such Lender such Lender's Pro Rata Share of such
payment from the Borrower in Dollars. Each such payment shall be made by the
Agent on the Business Day on which the Agent receives immediately available
funds paid to such Person pursuant to the immediately preceding sentence, if
received prior to 11 a.m. (Chicago, Illinois time) on such Business Day and
otherwise on the next succeeding Business Day.
(3) Documentation. Upon the request of any
Lender, the Agent shall furnish to such Lender copies of any Letter of Credit,
Credit Support for any Letter of Credit, reimbursement agreements executed in
connection therewith, applications for any Letter of Credit, and such other
documentation as may reasonably be requested by such Lender.
(4) Obligations Irrevocable. The obligations of
each Lender to make payments to the Agent with respect to any Letter of Credit
or with respect to their participation therein or with respect to any Credit
Support for any Letter of Credit or with respect to the Revolving Loans made as
a result of a drawing under a Letter of Credit and the obligations of the
Borrower for whose account the Letter of Credit or Credit Support was issued to
make payments to the Agent, for the account of the Lenders, shall be
irrevocable, not subject to any qualification or exception whatsoever ,
including any of the following circumstances:
(i) any lack of validity or
enforceability of this Agreement or any of the other Loan Documents;
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(ii) the existence of any claim, setoff,
defense or other right which the Borrower may have at any time against a
beneficiary named in a Letter of Credit or any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), any Lender,
the Agent, the issuer of such Letter of Credit, or any other Person, whether in
connection with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any underlying
transactions between the Borrower or any other Person and the beneficiary named
in any Letter of Credit);
(iii) any draft, certificate or any other
document presented under the 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;
(iv) the surrender or impairment of any
security for the performance or observance of any of the terms of any of the
Loan Documents;
(v) the occurrence of any Default or
Event of Default; or
(vi) the failure of the Borrower to
satisfy the applicable conditions precedent set forth in Article 10.
(g) Recovery or Avoidance of Payments. In the event any
payment by or on behalf of the Borrower received by the Agent with respect to
any Letter of Credit or Credit Support provided for any Letter of Credit and
distributed by the Agent to the Lenders on account of their respective
participations therein is thereafter set aside, avoided or recovered from the
Agent in connection with any receivership, liquidation or bankruptcy proceeding,
the Lenders shall, upon demand by the Agent, pay to the Agent their respective
Pro Rata Shares of such amount set aside, avoided or recovered, together with
interest at the rate required to be paid by the Agent upon the amount required
to be repaid by it.
(h) Indemnification; Exoneration; Power of Attorney.
(1) Indemnification. In addition to amounts
payable as elsewhere provided in this Section 2.3, the Borrower hereby agrees to
protect, indemnify, pay and save the Lenders and the Agent harmless from and
against any and all claims, demands, liabilities, damages, losses, costs,
charges and expenses (including reasonable attorneys' fees) which any Lender or
the Agent (other than the Bank in its capacity as Letter of Credit Issuer) may
incur or be subject to as a consequence, direct or indirect, of the issuance of
any Letter of Credit or the provision of any Credit Support or enhancement in
connection therewith. The agreement in this Section 2.3(h)(1) shall survive
payment of all Obligations. Nothing contained in this Agreement is intended to
limit the Borrower's rights, if any, with respect to the Letter of Credit Issuer
which arise as a result of the letter of credit application and related
documents executed by and between the Borrower and the Letter of Credit Issuer.
(2) Assumption of Risk by the Borrower. As among
the Borrower, the Lenders, and the Agent, the Borrower assumes all risks of the
acts and omissions of, or misuse of any of the Letters of Credit by, the
respective beneficiaries of such Letters of Credit. In furtherance and not in
limitation of the foregoing, the Lenders and the Agent shall not be responsible
for: (A) the form, validity, sufficiency, accuracy, genuineness or legal effect
of any
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document submitted by any Person in connection with the application for and
issuance of and presentation of drafts with respect to any of the Letters of
Credit, even if it should prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) the validity or sufficiency
of any instrument transferring or assigning or purporting to transfer or assign
any Letter of Credit or the rights or benefits thereunder or proceeds thereof,
in whole or in part, which may prove to be invalid or ineffective for any
reason; (C) the failure of the beneficiary of any Letter of Credit to comply
duly with conditions required in order to draw upon such Letter of Credit; (D)
errors, omissions, interruptions, or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not they be
in cipher; (E) errors in interpretation of technical terms; (F) any loss or
delay in the transmission or otherwise of any document required in order to make
a drawing under any Letter of Credit or of the proceeds thereof; (G) the
misapplication by the beneficiary of any Letter of Credit of the proceeds of any
drawing under such Letter of Credit; or (H) any consequences arising from causes
beyond the control of the Lenders or the Agent, including any act or omission,
whether rightful or wrongful, of any present or future de jure or de facto
Governmental Authority. None of the foregoing shall affect, impair or prevent
the vesting of any rights or powers of the Agent or any Lender under this
Section 2.3(h).
(3) Exoneration. In furtherance and extension,
and not in limitation, of the specific provisions set forth above, any action
taken or omitted by the Agent or any Lender under or in connection with any of
the Letters of Credit or any related certificates, if taken or omitted in good
faith, shall not put the Agent or any Lender under any resulting liability to
the Borrower or relieve the Borrower of any of its obligations hereunder to any
such Person. Nothing contained in this Agreement is intended to limit the
Borrower's rights, if any, with respect to the Letter of Credit Issuer which
arise as a result of the letter of credit application and related documents
executed by and between the Borrower and the Letter of Credit Issuer.
(4) Indemnification by the Lenders. The Lenders
agree to indemnify the Letter of Credit Issuer (to the extent not reimbursed by
the Borrower and without limiting the obligations of the Borrower hereunder)
ratably in accordance with their respective Pro Rata Shares, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including attorneys' fees) or disbursements of any kind and
nature whatsoever that may be imposed on, incurred by or asserted against the
Letter of Credit Issuer in any way relating to or arising out of any Letter of
Credit or the transactions contemplated thereby or any action taken or omitted
by the Letter of Credit Issuer under any Letter of Credit or any Loan Document
in connection therewith; provided that no Lender shall be liable for any of the
foregoing to the extent it arises from the gross negligence or willful
misconduct of the Person to be indemnified. Without limitation of the foregoing,
each Lender agrees to reimburse the Letter of Credit Issuer promptly upon demand
for its Pro Rata Share of any costs or expenses payable by the Borrower to the
Letter of Credit Issuer, to the extent that the Letter of Credit Issuer is not
promptly reimbursed for such costs and expenses by the Borrower. The agreement
contained in this Section shall survive payment in full of all Obligations.
(5) Power of Attorney. In connection with all
Inventory financed by Letters of Credit, the Borrower hereby appoints the Agent,
or the Agent's designee, as its attorney, with full power and authority: (a) to
sign and/or endorse the Borrower's name upon any warehouse or other receipts;
(b) to sign the Borrower's name on bills of lading and other
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negotiable and non-negotiable documents; (c) to clear Inventory through customs
in the Agent's or the Borrower's name, and to sign and deliver to customs
officials powers of attorney in the Borrower's name for such purpose; (d) to
complete in the Borrower's or the Agent's name, any order, sale, or transaction,
obtain the necessary documents in connection therewith, and collect the proceeds
thereof; and (e) to do such other acts and things as are necessary in order to
enable the Agent to obtain possession or control of the Inventory and to obtain
payment of the Obligations. Neither the Agent nor its designee, as the
Borrower's attorney, will be liable for any acts or omissions, nor for any error
of judgment or mistakes of fact or law. This power, being coupled with an
interest, is irrevocable until all Obligations have been paid and satisfied.
(6) Account Party. The Borrower hereby
authorizes and directs any Letter of Credit Issuer to name the Borrower as the
"Account Party" therein and to deliver to the Agent all instruments, documents
and other writings and property received by the Letter of Credit Issuer pursuant
to the Letter of Credit, and to accept and rely upon the Agent's instructions
and agreements with respect to all matters arising in connection with the Letter
of Credit or the application therefor.
(7) Control of Inventory. In connection with all
Inventory financed by Letters of Credit, the Borrower will, at the Agent's
request, instruct all suppliers, carriers, forwarders, customs brokers,
warehouses or others receiving or holding cash, checks, Inventory, documents or
instruments in which the Agent holds a security interest to deliver them to the
Agent and/or subject to the Agent's order, and if they shall come into the
Borrower's possession, to deliver them, upon request, to the Agent in their
original form. The Borrower shall also, at the Agent's request, designate the
Agent as the consignee on all bills of lading and other negotiable and
non-negotiable documents.
(i) Supporting Letter of Credit; Cash Collateral. If,
notwithstanding the provisions of Section 2.3(b) and Section 12.1, any Letter of
Credit or Credit Support is outstanding upon the termination of this Agreement,
then upon such termination the Borrower shall deposit with the Agent, for the
ratable benefit of the Agent and the Lenders, with respect to each Letter of
Credit or Credit Support then outstanding, as the Required Lenders, in their
discretion shall specify, either (A) a standby letter of credit (a "Supporting
Letter of Credit") in form and substance satisfactory to the Agent, issued by an
issuer satisfactory to the Agent in an amount equal to the greatest amount for
which such Letter of Credit or such Credit Support may be drawn plus any fees
and expenses associated with such Letter of Credit or such Credit Support, under
which Supporting Letter of Credit the Agent is entitled to draw amounts
necessary to reimburse the Agent and the Lenders for payments to be made by the
Agent and the Lenders under such Letter of Credit or Credit Support and any fees
and expenses associated with such Letter of Credit or Credit Support, or (B)
cash in amounts necessary to reimburse the Agent and the Lenders for payments
made by the Agent or the Lenders under such Letter of Credit or such Credit
Support and any fees and expenses associated with such Letter of Credit. Such
Supporting Letter of Credit or deposit of cash shall be held by the Agent, for
the ratable benefit of the Agent and the Lenders, as security for, and to
provide for the payment of, the aggregate undrawn amount of such Letters of
Credit or such Credit Support remaining outstanding.
2.4 Bank Products. The Borrower may request and the Bank may, in
its sole and absolute discretion, arrange for the Borrower to obtain from the
Bank or the Bank's Affiliates
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Bank Products although the Borrower is not required to do so. To the extent Bank
Products are provided by an Affiliate of the Bank, the Borrower agrees to
indemnify and hold the Bank and the Lenders harmless from any and all costs and
obligations now or hereafter incurred by the Bank or any of the Lenders which
arise from the indemnity given by the Bank to its Affiliates related to such
Bank Products; provided, however, nothing contained herein is intended to limit
the Borrower's rights, with respect to the Bank or its Affiliates, if any, which
arise as a result of the execution of documents by and between the Borrower and
the Bank which relate to Bank Products. The agreement contained in this Section
shall survive termination of this Agreement. The Borrower acknowledges and
agrees that the obtaining of Bank Products from the Bank or the Bank's
Affiliates (a) is in the sole and absolute discretion of the Bank or the Bank's
Affiliates, and (b) is subject to all rules and regulations of the Bank or the
Bank's Affiliates.
ARTICLE 3
INTEREST AND FEES
3.1 Interest.
(a) Interest Rates. All outstanding Obligations shall
bear interest on the unpaid principal amount thereof (including, to the extent
permitted by law, on interest thereon not paid when due) from the date made
until paid in full in cash at a rate determined by reference to the Base Rate or
the LIBOR Rate and Sections 3.1(a)(i) or (ii), as applicable, but not to exceed
the Maximum Rate described in Section 3.3. Subject to the provisions of Section
3.2, any of the Loans may be converted into, or continued as, Base Rate Loans or
LIBOR Rate Loans in the manner provided in Section 3.2. If at any time Loans are
outstanding with respect to which notice has not been delivered to the Agent in
accordance with the terms of this Agreement specifying the basis for determining
the interest rate applicable thereto, then those Loans shall be Base Rate Loans
and shall bear interest at a rate determined by reference to the Base Rate until
notice to the contrary has been given to the Agent in accordance with this
Agreement and such notice has become effective. Except as otherwise provided
herein, the outstanding Obligations shall bear interest as follows:
(i) for all Base Rate Revolving Loans and other
Obligations (other than LIBOR Rate Loans) at a fluctuating per annum rate equal
to the Base Rate plus the Applicable Margin; and
(ii) for all LIBOR Revolving Loans at a per annum
rate equal to the LIBOR Rate plus the Applicable Margin.
Each change in the Base Rate shall be reflected in the interest rate described
in clause (i) above as of the effective date of such change. All interest
charges shall be computed on the basis of a year of 360 days and actual days
elapsed (which results in more interest being paid than if computed on the basis
of a 365-day year). Interest accrued on all Base Rate Revolving Loans and other
Obligations other than LIBOR Rate Loans will be payable in arrears on the first
day of each month hereafter and on the Termination Date; interest accrued on all
LIBOR Rate Loans will be payable in arrears on each applicable LIBOR Interest
Payment Date.
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(b) Default Rate. If any Default or Event of Default
occurs and is continuing and the Agent or the Required Lenders in their
discretion so elect, then, while any such Default or Event of Default is
continuing, all of the Obligations shall bear interest at the Default Rate
applicable thereto.
3.2 Continuation and Conversion Elections. (a) The Borrower may,
upon irrevocable written notice to the Agent in accordance with Section 3.2(b):
(i) elect, as of any Business Day, in the case
of Base Rate Loans to convert any such Loans (or any part thereof in an amount
not less than $2,000,000 or that is in an integral multiple of $1,000,000 in
excess thereof) into LIBOR Rate Loans; or
(ii) elect, as of the last day of the applicable
Interest Period, to continue any LIBOR Rate Loans having Interest Periods
expiring on such day (or any part thereof in an amount not less than $1,000,000,
or that is in an integral multiple of $1,000,000 in excess thereof);
provided, that if at any time the aggregate amount of LIBOR Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $1,000,000, such LIBOR Rate Loans shall
automatically convert into Base Rate Loans, and on and after such date the right
of the Borrower to continue such Loans as, and convert such Loans into, LIBOR
Rate Loans, as the case may be, shall terminate, and provided further that if
the notice shall fail to specify the duration of the Interest Period, such
Interest Period shall be one month.
(b) The Borrower shall deliver a notice of
conversion/continuation ("Notice of Continuation/Conversion") to be received by
the Agent not later than 11 a.m. (Chicago, Illinois time) at least three
Business Days in advance of the Continuation/Conversion Date, if the Loans are
to be converted into or continued as LIBOR Rate Loans and specifying:
(i) the proposed Continuation/Conversion Date;
(ii) the aggregate amount of Loans to be
converted or renewed;
(iii) the type of Loans resulting from the
proposed conversion or continuation; and
(iv) the duration of the requested Interest
Period.
(c) If upon the expiration of any Interest Period
applicable to LIBOR Rate Loans, the Borrower has failed to select timely a new
Interest Period to be applicable to LIBOR Rate Loans or if any Default or Event
of Default then exists, the Borrower shall be deemed to have elected to convert
such LIBOR Rate Loans into Base Rate Loans effective as of the expiration date
of such Interest Period.
(d) The Agent will promptly notify each Lender of its
receipt of a Notice of Conversion/Continuation. All conversions and
continuations shall be made ratably according to
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the respective outstanding principal amounts of the Loans with respect to which
the notice was given held by each Lender.
(e) During the existence of a Default or Event of
Default, the Borrower may not elect to have a Loan converted into or continued
as a LIBOR Rate Loan.
(f) After giving effect to any conversion or continuation
of Loans, there may not be more than five (5) different Interest Periods in
effect hereunder.
3.3 Maximum Interest Rate. In no event shall any interest rate
provided for hereunder exceed the maximum rate legally chargeable by any Lender
under applicable law for such Lender with respect to loans of the type provided
for hereunder (the "Maximum Rate"). If, in any month, any interest rate, absent
such limitation, would have exceeded the Maximum Rate, then the interest rate
for that month shall be the Maximum Rate, and, if in future months, that
interest rate would otherwise be less than the Maximum Rate, then that interest
rate shall remain at the Maximum Rate until such time as the amount of interest
paid hereunder equals the amount of interest which would have been paid if the
same had not been limited by the Maximum Rate. In the event that, upon payment
in full of the Obligations, the total amount of interest paid or accrued under
the terms of this Agreement is less than the total amount of interest which
would, but for this Section 3.3, have been paid or accrued if the interest rate
otherwise set forth in this Agreement had at all times been in effect, then the
Borrower shall, to the extent permitted by applicable law, pay the Agent, for
the account of the Lenders, an amount equal to the excess of (a) the lesser of
(i) the amount of interest which would have been charged if the Maximum Rate
had, at all times, been in effect or (ii) the amount of interest which would
have accrued had the interest rate otherwise set forth in this Agreement, at all
times, been in effect over (b) the amount of interest actually paid or accrued
under this Agreement. In the event that a court of competent jurisdiction
determines that the Agent and/or any Lender has received interest and other
charges hereunder in excess of the Maximum Rate, such excess shall be deemed
received on account of, and shall automatically be applied to reduce, the
Obligations other than interest, in the inverse order of maturity, and if there
are no Obligations outstanding, the Agent and/or such Lender shall refund to the
Borrower such excess.
3.4 Closing Fee. The Borrower agrees to pay the Agent, for the
account of the Lenders, in accordance with their respective Pro Rata Share on
the Closing Date a closing fee (the "Closing Fee") in the amount set forth in a
separate letter agreement (the "Closing Fee Letter"), which Closing Fee shall be
fully earned by the Lenders on the Closing Date. The Agent, the Lenders and the
Borrower agree that the Closing Fee shall be financed by the Lenders as a
Revolving Loan.
3.5 Unused Line Fee. Until the Loans have been paid in full and
this Agreement terminated, the Borrower agrees to pay, on the first day of each
month and on the Termination Date, to the Agent, for the account of the Lenders,
in accordance with their respective Pro Rata Shares, an unused line fee (the
"Unused Line Fee") equal to one-half percent (.5%) per annum times the amount by
which the Maximum Revolver Amount exceeded the sum of the average daily
outstanding amount of Revolving Loans and the average daily undrawn face amount
of outstanding Letters of Credit, during the immediately preceding month or
shorter period if calculated on the Termination Date. The Unused Line Fee shall
be computed on the basis of a
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360-day year for the actual number of days elapsed. All payments received by the
Agent shall be deemed to be credited to the Borrower's Loan Account immediately
upon receipt for purposes of calculating the Unused Line Fee pursuant to this
Section 3.5.
3.6 Letter of Credit Fee. The Borrower agrees to pay to the Agent,
for the account of the Lenders, in accordance with their respective Pro Rata
Shares, for each Letter of Credit, a fee (the "Letter of Credit Fee") equal to
two percent (2.0%) per annum of the undrawn face amount of each Letter of
Credit, which includes a "fronting fee" equal to one-half of one percent per
annum of the undrawn amount of the Letter of Credit payable to the Letter of
Credit Issuer, plus all out-of-pocket costs, fees and expenses incurred by the
Agent in connection with the application for, processing of, issuance of or
amendment to any Letter of Credit. The Letter of Credit Fee shall be payable
monthly in arrears on the first day of each month following any month in which a
Letter of Credit was issued and/or in which a Letter of Credit remains
outstanding and on the Termination Date. The Letter of Credit Fee shall be
computed on the basis of a 360-day year for the actual number of days elapsed.
3.7 Other Fees. The Borrower agrees to pay to the Agent, for the
Agent's own account on the Closing Date, those fees (the "Agent's Fees")
described in the Fee Letter.
ARTICLE 4
PAYMENTS AND PREPAYMENTS
4.1 Revolving Loans. The Borrower shall repay the outstanding
principal balance of the Revolving Loans, plus all accrued but unpaid interest
thereon, on the Termination Date. The Borrower may prepay Revolving Loans at any
time, and reborrow subject to the terms of this Agreement; provided, however,
that with respect to any LIBOR Revolving Loans prepaid by the Borrower prior to
the expiration date of the Interest Period applicable thereto, except as
otherwise provided to the contrary in Section 5.2(b), the Borrower shall pay to
the Agent for the account of the Lenders the amounts described in Section 5.4.
In addition, and without limiting the generality of the foregoing, upon demand
the Borrower shall pay to the Agent, for account of the Lenders, the amount,
without duplication, by which the Aggregate Revolver Outstandings exceeds the
Borrowing Base.
4.2 Termination of Facility. The Borrower may terminate this
Agreement upon at least thirty (30) Business Days' notice to the Agent and the
Lenders, upon (a) the payment in full of all outstanding Revolving Loans,
together with accrued interest thereon, and the cancellation and return of all
outstanding Letters of Credit, (b) the payment of the early termination fee set
forth in the next sentence, (c) the payment in full in cash of all other
Obligations together with accrued and unpaid interest thereon, and (d) with
respect to any LIBOR Rate Loans prepaid in connection with such termination
prior to the expiration date of the Interest Period applicable thereto, the
payment of the amounts described in Section 5.4. If this Agreement is terminated
at any time prior to the Stated Termination Date, whether pursuant to this
Section or pursuant to Section 11.2, the Borrower shall pay to the Agent, for
the account of the Lenders, an early termination fee determined in accordance
with the following table:
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Period during which Early Termination
Early termination occurs Fee
------------------------ -------------------------
On or prior to the first Anniversary Date 2% of the Total Facility.
After the first Anniversary Date but on or prior to 1% of the Total Facility.
the second Anniversary Date
After the second Anniversary Date but prior to the 0% of the Total Facility.
Stated Termination Date
Notwithstanding anything expressed or implied to the contrary in the
preceding provisions of this Section 4.2, no Early Termination Fee shall be due
and payable in the case of a complete repayment of the Obligations through a
refinancing in which (i) the Bank or one or more Affiliates of the Bank, or
combination thereof, acts as sole administrative agent and lead lender for a
group of lenders providing the loan proceeds used in such refinancing; and, (ii)
substantially simultaneously with such refinancing, through a transaction or
series of related transactions on a concurrent, or substantially concurrent,
basis initiated by U.S. Holdco, (A) U.S. Holdco will exchange shares of its
capital stock for the outstanding capital stock of Consumers Packaging and (B)
U.S. Holdco will make an offer to exchange shares of its capital stock for the
outstanding capital stock of the Borrower (other than the shares held by
Consumers U.S.).
4.3 Payments by the Borrower. (a) All payments to be made by the
Borrower shall be made without set-off, recoupment or counterclaim. Except as
otherwise expressly provided herein, all payments by the Borrower shall be made
to the Agent for the account of the Lenders at the account designated by the
Agent and shall be made in Dollars and in immediately available funds, no later
than 1 p.m. (Chicago, Illinois time) on the date specified herein. Any payment
received by the Agent later than 1 p.m. (Chicago, Illinois time) shall be deemed
to have been received on the following Business Day and any applicable interest
or fee shall continue to accrue.
(b) Subject to the provisions set forth in the definition
of "Interest Period" herein, whenever any payment is due on a day other than a
Business Day, such payment shall be due on the following Business Day, and such
extension of time shall in such case be included in the computation of interest
or fees, as the case may be.
(c) Unless the Agent receives notice from the Borrower
prior to the date on which any payment is due to the Lenders that the Borrower
will not make such payment in full as and when required, the Agent may assume
that the Borrower has made such payment in full to the Agent on such date in
immediately available funds and the Agent may (but shall not be so required), in
reliance upon such assumption, distribute to each Lender on such due date an
amount equal to the amount then due such Lender. If and to the extent the
Borrower has not made such payment in full to the Agent, each Lender shall repay
to the Agent on demand such amount distributed to such Lender, together with
interest thereon at the Federal Funds Rate for each day from the date such
amount is distributed to such Lender until the date repaid.
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4.4 Payments as Revolving Loans. All payments of principal,
interest, reimbursement obligations in connection with Letters of Credit and
Credit Support for Letters of Credit, fees, premiums and other sums payable
hereunder, including all reimbursement for expenses pursuant to Section 15.7,
may, at the option of the Agent, in its sole discretion, subject only to the
terms of this Section 4.4, be paid from the proceeds of Revolving Loans made
hereunder, whether made following a request by the Borrower pursuant to Section
2.2 or a deemed request as provided in this Section 4.4. The Borrower hereby
irrevocably authorizes the Agent to charge the Loan Account for the purpose of
paying principal, interest, reimbursement obligations in connection with Letters
of Credit and Credit Support for Letters of Credit, fees, premiums and other
sums payable hereunder, including reimbursing expenses pursuant to Section 15.7,
and agrees that all such amounts charged shall constitute Revolving Loans
(including Non-Ratable Loans and Agent Advances) and that all such Revolving
Loans so made shall be deemed to have been requested by the Borrower pursuant to
Section 2.2. The Agent agrees to provide the Borrower with notice of such
charges in accordance with the Agent's customary administrative procedures,
which may change from time to time at the Agent's discretion.
4.5 Apportionment, Application and Reversal of Payments. Principal
and interest payments shall be apportioned ratably among the Lenders (according
to the unpaid principal balance of the Loans to which such payments relate held
by each Lender) and payments of the fees shall, as applicable, be apportioned
ratably among the Lenders. All payments shall be remitted to the Agent and all
such payments not relating to principal or interest of specific Loans, or not
constituting payment of specific fees, and all proceeds of Accounts or other
Collateral received by the Agent, shall be applied, ratably, subject to the
provisions of this Agreement, first, to pay any fees, indemnities or expense
reimbursements including any amounts relating to Bank Products then due to the
Agent from the Borrower; second, to pay any fees or expense reimbursements then
due to the Lenders from the Borrower; third, to pay interest due in respect of
all Revolving Loans, including Non-Ratable Loans and Agent Advances; fourth, to
pay or prepay principal of the Non-Ratable Loans and Agent Advances; fifth, to
pay or prepay principal of the Revolving Loans (other than Non-Ratable Loans and
Agent Advances) and unpaid reimbursement obligations in respect of Letters of
Credit; and sixth, to the payment of any other Obligation including any amounts
relating to Bank Products due to the Agent or any Lender by the Borrower.
Notwithstanding anything to the contrary contained in this Agreement, unless so
directed by the Borrower, or unless an Event of Default has occurred and is
continuing, neither the Agent nor any Lender shall apply any payments which it
receives to any LIBOR Revolving Loan, except (a) on the expiration date of the
Interest Period applicable to any such LIBOR Rate Loan, or (b) in the event, and
only to the extent, that there are no outstanding Base Rate Revolving Loans. The
Agent shall promptly distribute to each Lender, pursuant to the applicable wire
transfer instructions received from each Lender in writing, such funds as it may
be entitled to receive, subject to a Settlement delay as provided for in Section
2.2(j). The Agent and the Lenders shall have the continuing and exclusive right
to apply and reverse and reapply any and all such proceeds and payments to any
portion of the Obligations.
4.6 Indemnity for Returned Payments. If after receipt of any
payment which is applied to the payment of all or any part of the Obligations,
the Agent or any Lender is for any reason compelled to surrender such payment or
proceeds to any Person because such payment or application of proceeds is
invalidated, declared fraudulent, set aside, determined to be void or
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voidable as a preference, impermissible setoff, or a diversion of trust funds,
or for any other reason, then the Obligations or part thereof intended to be
satisfied shall be revived and continued and this Agreement shall continue in
full force as if such payment or proceeds had not been received by the Agent or
such Lender and the Borrower shall be liable to pay to the Agent and the
Lenders, and hereby does indemnify the Agent and the Lenders and hold the Agent
and the Lenders harmless for the amount of such payment or proceeds surrendered.
The provisions of this Section 4.6 shall be and remain effective notwithstanding
any contrary action which may have been taken by the Agent or any Lender in
reliance upon such payment or application of proceeds, and any such contrary
action so taken shall be without prejudice to the Agent's and the Lenders'
rights under this Agreement and shall be deemed to have been conditioned upon
such payment or application of proceeds having become final and irrevocable. The
provisions of this Section 4.6 shall survive the termination of this Agreement.
4.7 The Agent's and the Lenders' Books and Records; Monthly
Statements. The Borrower agrees that the Agent's and each Lender's books and
records showing the Obligations and the transactions pursuant to this Agreement
and the other Loan Documents shall be admissible in any action or proceeding
arising therefrom, and shall constitute rebuttably presumptive proof thereof,
irrespective of whether any Obligation is also evidenced by a promissory note or
other instrument. The Agent will provide to the Borrower a monthly statement of
Loans, payments, and other transactions pursuant to this Agreement. Such
statement shall be deemed correct, accurate, and binding on the Borrower and an
account stated (except for reversals and reapplications of payments made as
provided in Section 4.5 and corrections of errors discovered by the Agent),
unless the Borrower notifies the Agent in writing to the contrary within thirty
(30) days after such statement is rendered. In the event a timely written notice
of objections is given by the Borrower, only the items to which exception is
expressly made will be considered to be disputed by the Borrower.
ARTICLE 5
TAXES, YIELD PROTECTION AND ILLEGALITY
5.1 Taxes. (a) Any and all payments by the Borrower to each Lender
or the Agent under this Agreement and any other Loan Document shall be made free
and clear of, and without deduction or withholding for any Taxes. In addition,
the Borrower shall pay all Other Taxes.
(b) The Borrower agrees to indemnify and hold harmless
each Lender and the Agent for the full amount of Taxes or Other Taxes (including
any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under
this Section) paid by any Lender or the Agent and any liability (including
penalties, interest, additions to tax and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. Payment under this indemnification shall be made within 30
days after the date such Lender or the Agent makes written demand therefor.
(c) If the Borrower shall be required by law to deduct or
withhold any Taxes or Other Taxes from or in respect of any sum payable
hereunder to any Lender or the Agent, then:
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(i) the sum payable shall be increased as
necessary so that after making all required deductions and withholdings
(including deductions and withholdings applicable to additional sums payable
under this Section) 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 or
withholdings been made;
(ii) the Borrower shall make such deductions and
withholdings;
(iii) the Borrower shall pay the full amount
deducted or withheld to the relevant taxing authority or other authority in
accordance with applicable law; and
(iv) the Borrower shall also pay to each Lender
or the Agent for the account of such Lender, at the time interest is paid, all
additional amounts which the respective Lender specifies as necessary to
preserve the after-tax yield such Lender would have received if such Taxes or
Other Taxes had not been imposed.
(d) Within 30 days after the date of any payment by the
Borrower of Taxes or Other Taxes, the Borrower shall furnish the Agent the
original or a certified copy of a receipt evidencing payment thereof, or other
evidence of payment satisfactory to the Agent.
(e) If the Borrower is required to pay additional amounts
to any Lender or the Agent pursuant to subsection (c) of this Section, then such
Lender shall use reasonable efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its lending office so as to
eliminate any such additional payment by the Borrower which may thereafter
accrue, if such change in the judgment of such Lender is not otherwise
disadvantageous to such Lender.
5.2 Illegality. (a) If any Lender determines that the introduction
of any Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has asserted
that it is unlawful, for any Lender or its applicable lending office to make
LIBOR Rate Loans, then, on notice thereof by that Lender to the Borrower through
the Agent, any obligation of that Lender to make LIBOR Rate Loans shall be
suspended until that Lender notifies the Agent and the Borrower that the
circumstances giving rise to such determination no longer exist.
(b) If a Lender determines that it is unlawful to
maintain any LIBOR Rate Loan, the Borrower shall, upon its receipt of notice of
such fact and demand from such Lender (with a copy to the Agent), prepay in full
such LIBOR Rate Loans of that Lender then outstanding, together with interest
accrued thereon, either on the last day of the Interest Period thereof, if that
Lender may lawfully continue to maintain such LIBOR Rate Loans to such day, or
immediately, if that Lender may not lawfully continue to maintain such LIBOR
Rate Loans. No payment shall be due under Section 5.4 upon prepayment of LIBOR
Rate Loans pursuant to or as a result of the circumstances described in the
preceding sentence. If the Borrower is required to so prepay any LIBOR Rate
Loans, then concurrently with such prepayment, the Borrower shall borrow from
the affected Lender, in the amount of such repayment, a Base Rate Loan.
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5.3 Increased Costs and Reduction of Return. (a) If any Lender
determines that due to either (i) the introduction of or any change in the
interpretation of any law or regulation or (ii) the compliance by that Lender
with any guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law), there shall be any increase
in the cost to such Lender of agreeing to make or making, funding or maintaining
any LIBOR Rate Loans, then the Borrower shall be liable for, and shall from time
to time, upon demand (with a copy of such demand to be sent to the Agent), pay
to the Agent for the account of such Lender, additional amounts as are
sufficient to compensate such Lender for such increased costs.
(b) If any Lender shall have determined that (i) the
introduction of any Capital Adequacy Regulation, (ii) any change in any Capital
Adequacy Regulation, (iii) any change in the interpretation or administration of
any Capital Adequacy Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof, or (iv)
compliance by such Lender or any corporation or other entity controlling such
Lender with any Capital Adequacy Regulation, affects or would affect the amount
of capital required or expected to be maintained by such Lender or any
corporation or other entity controlling such Lender and (taking into
consideration such Lender's or such corporation's or other entity's policies
with respect to capital adequacy and such Lender's desired return on capital)
determines that the amount of such capital is increased as a consequence of its
Commitments, loans, credits or obligations under this Agreement, then, upon
demand of such Lender to the Borrower through the Agent, the Borrower shall pay
to such Lender, from time to time as specified by such Lender, additional
amounts sufficient to compensate such Lender for such increase.
5.4 Funding Losses. The Borrower shall reimburse each Lender and
hold each Lender harmless from any loss or expense which such Lender may sustain
or incur as a consequence of:
(a) the failure of the Borrower to make on a timely basis
any payment of principal of any LIBOR Rate Loan;
(b) the failure of the Borrower to borrow, continue or
convert a Loan after the Borrower has given (or is deemed to have given) a
Notice of Borrowing or a Notice of Continuation/Conversion; or
(c) the prepayment or other payment (including after
acceleration thereof but excluding prepayment mandated by the provisions of
Section 5.2) of any LIBOR Rate Loans on a day that is not the last day of the
relevant Interest Period;
including any such loss of anticipated profit and any loss or expense arising
from the liquidation or reemployment of funds obtained by it to maintain its
LIBOR Rate Loans or from fees payable to terminate the deposits from which such
funds were obtained. The Borrower shall also pay any customary and reasonable
administrative fees charged by any Lender in connection with the foregoing.
5.5 Inability to Determine Rates. If the Agent determines that for
any reason adequate and reasonable means do not exist for determining the LIBOR
Rate for any requested Interest Period with respect to a proposed LIBOR Rate
Loan, or that the LIBOR Rate for any
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requested Interest Period with respect to a proposed LIBOR Rate Loan does not
adequately and fairly reflect the cost to the Lenders of funding such Loan, the
Agent will promptly so notify the Borrower and each Lender. Thereafter, the
obligation of the Lenders to make or maintain LIBOR Rate Loans hereunder shall
be suspended until the Agent revokes such notice in writing. Upon receipt of
such notice, the Borrower may revoke any Notice of Borrowing or Notice of
Conversion/Continuation then submitted by it. If the Borrower does not revoke
such Notice, the Lenders shall make, convert or continue the Loans, as proposed
by the Borrower, in the amount specified in the applicable notice submitted by
the Borrower, but such Loans shall be made, converted or continued as Base Rate
Loans instead of LIBOR Rate Loans.
5.6 Certificates of the Lenders. Any Lender claiming reimbursement
or compensation under this Article 5 shall deliver to the Borrower (with a copy
to the Agent) a certificate setting forth in reasonable detail the amount
payable to such Lender hereunder and such certificate shall be conclusive and
binding on the Borrower in the absence of manifest error.
5.7 Survival. The agreements and obligations of the Borrower in
this Article 5 shall survive the payment of all other Obligations.
ARTICLE 6
COLLATERAL
6.1 Grant of Security Interest. (a) As security for all
Obligations, the Borrower hereby grants, subject to the provisos set forth
below, to the Agent, for the benefit of the Agent and the Lenders, a continuing
security interest in, lien on, assignment of and right of set-off against, all
of the following property and assets of the Borrower, whether now owned or
existing or hereafter acquired or arising, regardless of where located:
(i) all Accounts (including any credit
enhancement therefor);
(ii) all Inventory;
(iii) all contract rights, letters of credit,
Assigned Contracts, chattel paper, instruments, notes, documents, and documents
of title;
(iv) all General Intangibles;
(v) all Investment Property;
(vi) all money, cash, cash equivalents,
securities and other property of any kind of the Borrower held directly or
indirectly by the Agent or any Lender;
(vii) all of the Borrower's deposit accounts,
credits, and balances with and other claims against the Agent or any Lender or
any of their Affiliates or any other financial institution with which the
Borrower maintains deposits, including any Payment Accounts;
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(viii) all books, records and other property
related to or referring to any of the foregoing, including books, records,
account ledgers, data processing records, computer software and other property
and General Intangibles at any time evidencing or relating to any of the
foregoing; and
(ix) all accessions to, substitutions for and
replacements, products and proceeds of any of the foregoing, including, but not
limited to, proceeds of any insurance policies, claims against third parties,
and condemnation or requisition payments with respect to all or any of the
foregoing.
All of the foregoing, and all other property of the Borrower in which the Agent
or any Lender may at any time be granted a Lien, is herein collectively referred
to as the "Collateral"; provided, however, that anything contained in this
Agreement and the other Loan Documents to the contrary notwithstanding, the
Collateral shall not include Real Estate or Equipment, including, without
limitation, Equipment subject to and as defined in the GE Lease, and any
accessions, substitutions, replacements and proceeds thereof (including
insurance proceeds relating to sale, destruction or condemnation), and provided
further, that to the extent any of the Borrower's property described in clauses
(iii), (iv), (v), and (viii), and that portion of clause (vii) covering deposit
accounts, credits, and balances with and other claims against financial
institutions, other than the Agent, any Lender or any of their Affiliates with
which the Borrower maintains deposits does not, as of the Closing Date,
constitute Bank Collateral (as defined in the Intercreditor Agreement) or Shared
Collateral (as defined in the Intercreditor Agreement) the grant contained
herein shall not be effective and such property shall not be Collateral
hereunder.
(b) All of the Obligations shall be secured by all of the
Collateral.
6.2 Perfection and Protection of Security Interest. (a) The
Borrower shall, at its expense, perform all steps requested by the Agent at any
time to perfect, maintain, protect, and enforce the Agent's Liens, including:
(i) executing, delivering and/or filing and recording of the Patent, Trademark
and Copyright Agreements and executing and filing financing or continuation
statements, and amendments thereof, in form and substance reasonably
satisfactory to the Agent; (ii) delivering to the Agent the originals of all
instruments, documents, and chattel paper, and all other Collateral of which the
Agent determines it should have physical possession in order to perfect and
protect the Agent's security interest therein, duly pledged, endorsed or
assigned to the Agent without restriction; (iii) delivering to the Agent
warehouse receipts covering any portion of the Collateral located in warehouses
and for which warehouse receipts are issued and certificates of title covering
any portion of the collateral for which certificates of title have been issued;
(iv) when an Event of Default exists, transferring Inventory to warehouses or
other locations designated by the Agent; (v) placing notations on the Borrower's
books of account to disclose the Agent's security interest; (vi) after the
occurrence of an Event of Default and upon request of the Agent, delivering to
the Agent all letters of credit on which the Borrower is named beneficiary; and
(vii) taking such other steps as are deemed necessary or desirable by the Agent
to maintain and protect the Agent's Liens. To the extent permitted by applicable
law, the Agent may file, without the Borrower's signature, one or more financing
statements disclosing the Agent's Liens. The Borrower agrees that a carbon,
photographic, photostatic, or other reproduction of this Agreement or of a
financing statement is sufficient as a financing statement.
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(b) If any Collateral is at any time in the possession or
control of any warehouseman, bailee or any of the Borrower's agents or
processors, then the Borrower shall notify the Agent thereof and shall, at the
request of the Agent, notify such Person of the Agent's security interest in
such Collateral and instruct such Person to hold all such Collateral for the
Agent's account subject to the Agent's instructions. If at any time any
Collateral is located in any operating facility of the Borrower not owned by the
Borrower, then the Borrower shall, at the request of the Agent, obtain written
landlord lien waivers or subordinations, in form and substance reasonably
satisfactory to the Agent, of all present and future Liens to which the owner or
lessor of such premises may be entitled to assert against the Collateral.
(c) From time to time, the Borrower shall, upon the
Agent's request, execute and deliver confirmatory written instruments pledging
to the Agent, for the ratable benefit of the Agent and the Lenders, the
Collateral with respect to the Borrower, but the Borrower's failure to do so
shall not affect or limit any security interest or any other rights of the Agent
or any Lender in and to the Collateral with respect to the Borrower. So long as
this Agreement is in effect and until all Obligations have been fully satisfied,
the Agent's Liens shall continue in full force and effect in all Collateral
(whether or not deemed eligible for the purpose of calculating the Availability
or as the basis for any advance, loan, extension of credit, or other financial
accommodation).
6.3 Location of Collateral. The Borrower represents and warrants
to the Agent and the Lenders that: (a) Schedule 6.3 is a correct and complete
list of the Borrower's chief executive office, the locations of its books and
records, the locations of the Collateral, and the locations of all of its other
places of business; and (b) Schedule 6.3 correctly identifies any of such
facilities and locations that are not owned by the Borrower and sets forth the
names of the owners and lessors or sublessors of such facilities and locations.
The Borrower covenants and agrees that it will not (i) maintain any Collateral
at any location other than those locations listed for the Borrower on Schedule
6.3, (ii) otherwise change or add to any of such locations, or (iii) change the
location of its chief executive office from the location identified in Schedule
6.3, unless it gives the Agent at least fourteen (14) days' prior written notice
thereof and executes and delivers any and all financing statements and other
documents that the Agent reasonably requests in connection therewith. Without
limiting the foregoing, the Borrower represents that all of its Inventory (other
than Inventory in transit) is, and covenants that all of its Inventory will be,
located either (a) on premises owned by the Borrower, (b) on premises leased by
the Borrower, provided that the Agent has, if requested by the Agent, received
an executed landlord waiver from the landlord of such premises in form and
substance satisfactory to the Agent, or (c) in a warehouse or with a bailee,
provided that the Agent has, if requested by the Agent, received an executed
bailee letter from the applicable Person in form and substance satisfactory to
the Agent. Notwithstanding the foregoing and provided no Default or Event of
Default then exists, the Borrower may relocate Inventory from a location listed
on Schedule 6.3 to a location not listed on Schedule 6.3 without prior notice to
the Agent provided that (a) the fair market value of such Inventory, together
with all other inventory so relocated and for which the Borrower has not
executed and delivered financing statements and other documents in accordance
with this Section 6.3, does not exceed $1,000,000, (b) the Borrower promptly
notifies the Agent of such relocation and (c) the Borrower executes and delivers
any and all financing statements and other documents that the Agent reasonably
requests in connection therewith in time for the Agent to
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maintain and preserve a first priority, perfected security interest in the
Agent's favor in such Inventory.
6.4 Title to, Liens on, and Sale and Use of Collateral. The
Borrower represents and warrants to the Agent and the Lenders and agrees with
the Agent and the Lenders that: (a) all of the Collateral is and will continue
to be owned by the Borrower free and clear of all Liens whatsoever, except for
Permitted Liens; (b) the Agent's Liens in the Collateral will not be subject to
any prior Lien except for those Liens identified in clauses (c), (d), (e) and
(g) of the definition of Permitted Liens; and (c) the Borrower will use, store,
and maintain the Collateral with all reasonable care and will use such
Collateral for lawful purposes only.
6.5 Appraisals. Whenever a Default or Event of Default exists, the
Borrower shall, at its expense and upon the Agent's request, provide the Agent
with appraisals or updates thereof of any or all of the Collateral from an
appraiser, and prepared on a basis, satisfactory to the Agent, such appraisals
and updates to include, without limitation, information required by applicable
law and regulation and by the internal policies of the Lenders.
6.6 Access and Examination; Confidentiality; Consent to
Advertising. (a) The Agent, accompanied by any Lender which so elects, may at
all reasonable times during regular business hours (and at any time when a
Default or Event of Default exists and is continuing) have access to, examine,
audit, make extracts from or copies of and inspect any or all of the Borrower's
records, files, and books of account and the Collateral, and discuss the
Borrower's affairs with the Borrower's officers and management. The Borrower
will deliver to the Agent any instrument necessary for the Agent to obtain
records from any service bureau maintaining records for the Borrower. The Agent
may, and at the direction of the Required Lenders shall, at any time when a
Default or Event of Default exists, and at the Borrower's expense, make copies
of all of the Borrower's books and records, or require the Borrower to deliver
such copies to the Agent. The Agent may, without expense to the Agent, use such
of the Borrower's respective personnel, supplies, and Real Estate as may be
reasonably necessary for maintaining or enforcing the Agent's Liens. The Agent
shall have the right, at any time, in the Agent's name or in the name of a
nominee of the Agent, to verify the validity, amount or any other matter
relating to the Accounts, Inventory, or other Collateral, by mail, telephone, or
otherwise.
(b) The Borrower hereby consents that the Agent and each
Lender may issue and disseminate to the public general information describing
the credit accommodation entered into pursuant to this Agreement, including the
name and address of the Borrower and a general description of the Borrower's
business and may use the Borrower's name in advertising and other promotional
material.
(c) Each Lender severally agrees to take normal and
reasonable precautions and exercise due care to maintain the confidentiality of
all information identified as "confidential" or "secret" by the Borrower and
provided to the Agent or such Lender by or on behalf of the Borrower, under this
Agreement or any other Loan Document, except to the extent that such information
(i) was or becomes generally available to the public other than as a result of
disclosure by the Agent or such Lender, or (ii) was or becomes available on a
nonconfidential basis from a source other than the Borrower, provided that such
source is not bound by a confidentiality agreement with the Borrower known to
the Agent or such Lender; provided,
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however, that the Agent and any Lender may disclose such information (1) at the
request or pursuant to any requirement of any Governmental Authority to which
the Agent or such Lender is subject or in connection with an examination of the
Agent or such Lender by any such Governmental Authority; (2) pursuant to
subpoena or other court process; (3) when required to do so in accordance with
the provisions of any applicable Requirement of Law; (4) to the extent
reasonably required in connection with any litigation or proceeding (including,
but not limited to, any bankruptcy proceeding) to which the Agent, any Lender or
their respective Affiliates may be party; (5) to the extent reasonably required
in connection with the exercise of any remedy hereunder or under any other Loan
Document; (6) to the Agent's or such Lender's independent auditors, accountants,
attorneys and other professional advisors; (7) to any prospective Participant or
Assignee under any Assignment and Acceptance, actual or potential, provided that
such prospective Participant or Assignee agrees to keep such information
confidential to the same extent required of the Agent and the Lenders hereunder;
(8) as expressly permitted under the terms of any other document or agreement
regarding confidentiality to which the Borrower is party or is deemed party with
the Agent or such Lender; and (9) to its Affiliates.
6.7 Collateral Reporting. The Borrower shall provide the Agent
with the following documents at the following times in form satisfactory to the
Agent: (a) on a weekly basis, or more frequently if reasonably requested by the
Agent, a schedule of the Borrower's Accounts created since the last such
schedule and a Borrowing Base Certificate; (b) on a monthly basis, by the
twentieth (20th) day of the following month, or more frequently if reasonably
requested by the Agent, an aging of the Borrower's Accounts, together with a
reconciliation to the previous month's aging of the Borrower's Accounts and to
the Borrower's general ledger; (c) on a monthly basis by the twentieth (20th)
day of the following month, or more frequently if reasonably requested by the
Agent, a report itemizing Extended Term Accounts in a manner and with detail
acceptable to the Agent; (d) on a monthly basis by the twentieth (20th) day of
the following month, or more frequently if requested by the Agent, an aging of
the Borrower's accounts payable; (e) on a monthly basis by the twentieth (20th)
day of the following month (or more frequently if requested by the Agent),
Inventory reports by category and location, with additional detail showing
additions to and deletions from the Inventory, together with a reconciliation to
the Borrower's general ledger; (f) upon reasonable request, while no Event of
Default exists and at any time or times while a Default or an Event of Default
exists, copies of invoices in connection with the Borrower's Accounts, customer
statements, credit memos, remittance advices and reports, deposit slips,
shipping and delivery documents in connection with the Borrower's Accounts and
for Inventory acquired by the Borrower, purchase orders and invoices; (g) upon
reasonable request, while no Event of Default exists, and at any time or times
while a Default or an Event of Default exists, a statement of the balance of
each of the Intercompany Accounts; (h) such other reports as to the Collateral
of the Borrower as the Agent shall reasonably request from time to time; and (i)
with the delivery of each of the foregoing, a certificate of the Borrower
executed by an officer thereof certifying as to the accuracy and completeness of
the foregoing. If any of the Borrower's records or reports of the Collateral are
prepared by an accounting service or other agent, the Borrower hereby authorizes
such service or agent to deliver such records, reports, and related documents to
the Agent, for distribution to the Lenders.
6.8 Accounts. (a) The Borrower hereby represents and warrants to
the Agent and the Lenders, with respect to the Borrower's Accounts, that: (i)
each existing Account represents,
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and each future Account will represent, a bona fide sale or lease and delivery
of goods by the Borrower, or rendition of services by the Borrower, in the
ordinary course of the Borrower's business; (ii) each existing Account is, and
each future Account will be, for a liquidated amount payable by the Account
Debtor thereon on the terms set forth in the invoice therefor or in the schedule
thereof delivered to the Agent, without any offset, deduction, defense, or
counterclaim except those known to the Borrower and disclosed to the Agent and
the Lenders pursuant to this Agreement; (iii) no payment will be received with
respect to any Account, and no credit, discount, or extension, or agreement
therefor will be granted on any Account, except as reported to the Agent and the
Lenders in accordance with this Agreement; (iv) each copy of an invoice
delivered to the Agent by the Borrower will be a genuine copy of the original
invoice sent to the Account Debtor named therein; and (v) all goods described in
any invoice representing a sale of goods will have been delivered to the Account
Debtor and all services of the Borrower described in each invoice will have been
performed.
(b) The Borrower shall not re-date any invoice or sale or
make sales on extended dating beyond that customary in the Borrower's business
or extend or modify any Account. If the Borrower becomes aware of any matter
adversely affecting the collectibility of any Account or the Account Debtor
therefor involving an amount greater than $500,000, including information
regarding the Account Debtor's creditworthiness, the Borrower will promptly so
advise the Agent.
(c) The Borrower shall not accept any note or other
instrument (except a check or other instrument for the immediate payment of
money) with respect to any Account without the Agent's written consent, which
consent will not be unreasonably withheld, provided that the Borrower without
the Agent's consent may accept notes or other instruments not to exceed in
principal amount at any one time outstanding $500,000 individually and in the
aggregate together with all other notes or instruments evidencing unpaid
Accounts outstanding not to exceed the principal amount of $1,000,000 at any one
time. Any such note or instrument shall be considered as evidence of the Account
and not payment thereof and the Borrower will promptly deliver such instrument
to the Agent, endorsed by the Borrower to the Agent in a manner satisfactory in
form and substance to the Agent. Regardless of the form of presentment, demand,
notice of protest with respect thereto, the Borrower shall remain liable thereon
until such instrument is paid in full.
(d) The Borrower shall notify the Agent promptly of all
disputes and claims in excess of $1,000,000 with any Account Debtor, and agrees
to settle, contest, or adjust such dispute or claim at no expense to the Agent
or any Lender. No discount, credit or allowance shall be granted to any such
Account Debtor without the Agent's prior written consent, except for discounts,
credits and allowances made or given in the ordinary course of the Borrower's
business when no Event of Default exists hereunder. The Borrower shall send the
Agent a copy of each credit memorandum in excess of $500,000 as soon as issued.
The Agent may at all times when an Event of Default exists hereunder, settle or
adjust disputes and claims directly with Account Debtors for amounts and upon
terms which the Agent or the Required Lenders, as applicable, shall consider
advisable and, in all cases, the Agent will credit the Borrower's Loan Account
with the net amounts received by the Agent in payment of any Accounts.
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(e) If an Account Debtor returns any Inventory to the
Borrower when no Event of Default exists, then the Borrower shall promptly
determine the reason for such return and shall issue a credit memorandum to the
Account Debtor in the appropriate amount. The Borrower shall promptly report to
the Agent any return involving an amount in excess of $500,000. Each such report
shall indicate the reasons for the returns and the locations and condition of
the returned Inventory. In the event any Account Debtor returns Inventory to the
Borrower when an Event of Default exists, the Borrower, upon the request of the
Agent, shall: (i) hold the returned Inventory in trust for the Agent; (ii)
segregate all returned Inventory from all of its other property; (iii) dispose
of the returned Inventory solely according to the Agent's written instructions;
and (iv) not issue any credits or allowances with respect thereto without the
Agent's prior written consent. All returned Inventory shall be subject to the
Agent's Liens thereon. Whenever any Inventory is returned, the related Account
shall be deemed ineligible to the extent of the amount owing by the Account
Debtor with respect to such returned Inventory
6.9 Collection of Accounts; Payments. (a) The Borrower shall make
collection of all Accounts and other Collateral for the Agent, shall receive all
payments as the Agent's trustee, and shall immediately deliver all payments in
their original form duly endorsed in blank into a Payment Account established
for the account of the Borrower at a Clearing Bank acceptable to the Agent,
subject to a Blocked Account Agreement. The Borrower shall establish a lock-box
service for collections of Accounts at a Clearing Bank acceptable to the Agent
and subject to a Blocked Account Agreement and other documentation acceptable to
the Agent. The Borrower shall instruct all Account Debtors to make all payments
directly to the address established for such service. If, notwithstanding such
instructions, the Borrower receives any proceeds of Accounts, it shall receive
such payments as the Agent's trustee, and shall immediately deliver such
payments to the Agent in their original form duly endorsed in blank or deposit
them into a Payment Account, as the Agent may direct. All collections received
in any lock-box or Payment Account or directly by the Borrower or the Agent, and
all funds in any Payment Account or other account to which such collections are
deposited shall be subject to the Agent's sole control and withdrawals by the
Borrower shall not be permitted. The Agent or the Agent's designee may, at any
time after the occurrence of an Event of Default, notify Account Debtors that
the Accounts have been assigned to the Agent and of the Agent's security
interest therein, and may collect them directly and charge the collection costs
and expenses to the Loan Account as a Revolving Loan. So long as an Event of
Default has occurred and is continuing, the Borrower, at the Agent's request,
shall execute and deliver to the Agent such documents as the Agent shall require
to grant the Agent access to any post office box in which collections of
Accounts are received.
(b) If sales of Inventory are made or services are
rendered for cash, the Borrower shall immediately deliver to the Agent or
deposit into a Payment Account the cash which the Borrower receives.
(c) All payments including immediately available funds
received by the Agent at a bank account designated by it, will be the Agent's
sole property for its benefit and the benefit of the Lenders and will be
credited to the Loan Account (conditional upon final collection) after allowing
one (1) Business Day for collection; provided, however, that such payments shall
be deemed to be credited to the Loan Account immediately upon receipt for
purposes of (i) determining Availability, (ii) calculating the Unused Line Fee
pursuant to
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Section 3.5, and (iii) calculating the amount of interest accrued thereon solely
for purposes of determining the amount of interest to be distributed by the
Agent to the Lenders (but not the amount of interest payable by the Borrower).
(d) In the event the Borrower repays all of the
Obligations upon the termination of this Agreement or upon acceleration of the
Obligations, other than through the Agent's receipt of payments on account of
the Accounts or proceeds of the other Collateral, such payment will be credited
(conditional upon final collection) to the Borrower's Loan Account one (1)
Business Day after the Agent's receipt of such funds.
6.10 Inventory; Inventory Reporting. The Borrower represents and
warrants to the Agent and the Lenders and agrees with the Agent and the Lenders
that all of the finished goods Inventory owned by the Borrower is and will be
held for sale and all raw materials and work-in-process Inventory is and will be
used in the manufacture of finished goods Inventory in the ordinary course of
the Borrower's business, and is and will be fit for such purposes. The Borrower
will keep its Inventory in good and marketable condition, except for damaged or
defective goods arising in the ordinary course of the Borrower's business. The
Borrower will not, without the prior written consent of the Agent, acquire or
accept any Inventory on consignment or approval other than packaging and
shipping materials, machine parts, operating supplies and hot end coatings, all
of which shall be maintained separately for as long as they retain their status
as consigned goods or goods received on approval. The Borrower agrees that all
Inventory produced by the Borrower in the United States of America will be
produced in accordance with the Federal Fair Labor Standards Act of 1938, as
amended, and all rules, regulations, and orders thereunder. The Borrower will
conduct a regular, periodic cycle count of the Inventory that counts
substantially all Inventory at least once per Fiscal Year, and after and during
the continuation of an Event of Default, a physical count of the Inventory at
such times as the Agent requests. The Borrower will maintain a perpetual
inventory reporting system at all times. The Borrower will not, without the
Agent's written consent, sell any Inventory on a xxxx-and-hold, guaranteed sale,
sale and return, sale on approval, consignment, or other repurchase or return
basis.
6.11 Equipment.. The Borrower represents and warrants to the Agent
and the Lenders and agrees with the Agent and the Lenders that all of the
Equipment owned by the Borrower is and will be used or held for use in the
Borrower's business, and is and will be fit for such purposes. The Borrower
shall keep and maintain its Equipment in good operating condition and repair
(ordinary wear and tear excepted) and shall make all necessary replacements
thereof.
6.12 Assigned Contracts. The Borrower shall fully perform all of
its obligations under each of the Assigned Contracts, and shall enforce all of
its rights and remedies thereunder, in each case, as it deems appropriate in its
business judgment; provided, however, that the Borrower shall not take any
action or fail to take any action with respect to its Assigned Contracts which
would cause the termination of a material Assigned Contract. Without limiting
the generality of the foregoing, the Borrower shall take all action necessary or
appropriate to permit, and shall not take any action which could reasonably be
expected to have any Material Adverse Effect upon, the full enforcement of all
indemnification rights under its Assigned Contracts. The Borrower shall notify
the Agent and the Lenders in writing, promptly after the Borrower becomes aware
thereof, of any event or fact which could give rise to a material claim
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by it for indemnification under any of its Assigned Contracts, and shall
diligently pursue such right and report to the Agent on all further developments
with respect thereto. The Borrower shall deposit into the Payment Account or
remit directly to the Agent for application to the Obligations in such order as
the Required Lenders shall determine, all amounts received by the Borrower as
indemnification or otherwise pursuant to its Assigned Contracts. If the Borrower
shall fail after the Agent's demand to pursue diligently any right under its
Assigned Contracts, or if an Event of Default then exists, the Agent may, and at
the direction of the Required Lenders shall, directly enforce such right in its
own or the Borrower's name and may enter into such settlements or other
agreements with respect thereto as the Agent or the Required Lenders, as
applicable, shall determine. In any suit, proceeding or action brought by the
Agent for the benefit of the Lenders under any Assigned Contract for any sum
owing thereunder or to enforce any provision thereof, the Borrower shall
indemnify and hold the Agent and the Lenders harmless from and against all
expense, loss or damage suffered by reason of any defense, setoff,
counterclaims, recoupment, or reduction of liability whatsoever of the obligor
thereunder arising out of a breach by the Borrower of any obligation thereunder
or arising out of any other agreement, indebtedness or liability at any time
owing from the Borrower to or in favor of such obligor or its successors. All
such obligations of the Borrower shall be and remain enforceable only against
the Borrower and shall not be enforceable against the Agent or the Lenders.
Notwithstanding any provision hereof to the contrary, the Borrower shall at all
times remain liable to observe and perform all of its duties and obligations
under its Assigned Contracts, and the Agent's or any Lender's exercise of any of
their respective rights with respect to the Collateral shall not release the
Borrower from any of such duties and obligations. Neither the Agent nor any
Lender shall be obligated to perform or fulfill any of the Borrower's duties or
obligations under its Assigned Contracts or to make any payment thereunder, or
to make any inquiry as to the nature or sufficiency of any payment or property
received by it thereunder or the sufficiency of performance by any party
thereunder, or to present or file any claim, or to take any action to collect or
enforce any performance, any payment of any amounts, or any delivery of any
property.
6.13 Documents, Instruments, and Chattel Paper. The Borrower
represents and warrants to the Agent and the Lenders that (a) all documents,
instruments, and chattel paper describing, evidencing, or constituting
Collateral, and all signatures and endorsements thereon, are and will be
complete, valid, and genuine, and (b) all goods evidenced by such documents,
instruments, and chattel paper are and will be owned by the Borrower, free and
clear of all Liens other than Permitted Liens.
6.14 Right to Cure. The Agent may, in its discretion, and shall, at
the direction of the Required Lenders, pay any amount or do any act required of
the Borrower hereunder or under any other Loan Document in order to preserve,
protect, maintain or enforce the Obligations, the Collateral or the Agent's
Liens therein, and which the Borrower fails to pay or do, including payment of
any judgment against the Borrower, any insurance premium, any warehouse charge,
any finishing or processing charge, any landlord's or bailee's claim, and any
other Lien upon or with respect to the Collateral. All payments that the Agent
makes under this Section 6.14 and all out-of-pocket costs and expenses that the
Agent pays or incurs in connection with any action taken by it hereunder shall
be charged to the Borrower's Loan Account as a Revolving Loan. Any payment made
or other action taken by the Agent under this Section 6.14 shall be without
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prejudice to any right to assert an Event of Default hereunder and to proceed
thereafter as herein provided.
6.15 Power of Attorney. The Borrower hereby appoints the Agent and
the Agent's designee as the Borrower's attorney, with power: (a) to endorse the
Borrower's name on any checks, notes, acceptances, money orders, or other forms
of payment or security that come into the Agent's or any Lender's possession;
(b) to sign the Borrower's name on any invoice, xxxx of lading, warehouse
receipt or other document of title relating to any Collateral, on drafts against
customers, on assignments of Accounts, on notices of assignment, financing
statements and other public records and to file any such financing statements by
electronic means with or without a signature as authorized or required by
applicable law or filing procedure; (c) so long as any Event of Default has
occurred and is continuing, to notify the post office authorities to change the
address for delivery of the Borrower's mail to an address designated by the
Agent and to receive, open and dispose of all mail addressed to the Borrower;
(d) to send requests for verification of Accounts to customers or Account
Debtors; (e) to clear Inventory through customs in the Borrower's name, the
Agent's name or the name of the Agent's designee, and to sign and deliver to
customs officials powers of attorney in the Borrower's name for such purpose;
and (f) to do all things reasonably necessary to carry out this Agreement. The
Borrower ratifies and approves all acts of such attorney. None of the Lenders or
the Agent nor their attorneys will be liable for any acts or omissions or for
any error of judgment or mistake of fact or law except for their gross
negligence or willful misconduct. This power, being coupled with an interest, is
irrevocable until this Agreement has been terminated and the Obligations have
been fully satisfied.
6.16 The Agent's and the Lenders' Rights, Duties and Liabilities.
The Borrower assumes all responsibility and liability arising from or relating
to the use, sale or other disposition of the Collateral. The Obligations shall
not be affected by any failure of the Agent or any Lender to take any steps to
perfect the Agent's Liens or to collect or realize upon the Collateral, nor
shall loss of or damage to the Collateral release the Borrower from any of the
Obligations. Following the occurrence and continuation of an Event of Default,
the Agent may (but shall not be required to), and at the direction of the
Required Lenders shall, without notice to or consent from the Borrower, xxx upon
or otherwise collect, extend the time for payment of, modify or amend the terms
of, compromise or settle for cash, credit, or otherwise upon any terms, grant
other indulgences, extensions, renewals, compositions, or releases, and take or
omit to take any other action with respect to the Collateral, any security
therefor, any agreement relating thereto, any insurance applicable thereto, or
any Person liable directly or indirectly in connection with any of the
foregoing, without discharging or otherwise affecting the liability of the
Borrower for the Obligations or under this Agreement or any other agreement now
or hereafter existing between the Agent and/or any Lender and the Borrower.
ARTICLE 7
BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES
7.1 Books and Records. The Borrower shall maintain, at all times,
correct and complete books, records and accounts in which complete, correct and
timely entries are made of
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its transactions in accordance with GAAP applied consistently with the audited
Financial Statements required to be delivered pursuant to Section 7.2(a). The
Borrower shall, by means of appropriate entries, reflect in such accounts and in
all Financial Statements proper liabilities and reserves for all taxes and
proper provision for depreciation and amortization of property and bad debts,
all in accordance with GAAP. The Borrower shall maintain at all times books and
records pertaining to the Collateral in such detail, form and scope as the Agent
or any Lender shall reasonably require, including, but not limited to, records
of (a) all payments received and all credits and extensions granted with respect
to the Accounts; (b) the return, rejection, repossession, stoppage in transit,
loss, damage, or destruction of any Inventory; and (c) all other dealings
affecting the Collateral.
7.2 Financial Information. The Borrower shall promptly furnish to
the Agent, in sufficient copies for distribution by the Agent to each Lender,
all such financial information as the Agent shall reasonably request. Without
limiting the foregoing, the Borrower will furnish to the Agent, in sufficient
copies for distribution by the Agent to each Lender, in such detail as the Agent
shall reasonably request, the following:
(a) As soon as available, but in any event not later than
ninety (90) days after the close of each Fiscal Year, consolidated audited and
consolidating unaudited balance sheets, and statements of income and expense,
cash flow and of stockholders' equity for the Borrower and its Subsidiaries for
such Fiscal Year, and the accompanying notes thereto, setting forth in each case
in comparative form figures for the previous Fiscal Year, all in reasonable
detail, fairly presenting the financial position and the results of operations
of the Borrower and its consolidated Subsidiaries as at the date thereof and for
the Fiscal Year then ended, and prepared in accordance with GAAP. Such
statements shall be examined in accordance with generally accepted auditing
standards by and, in the case of such statements performed on a consolidated
basis, accompanied by a report thereon unqualified in any respect of independent
certified public accountants selected by the Borrower and reasonably
satisfactory to the Agent. The Borrower hereby authorizes the Agent to
communicate directly with its certified public accountants and, by this
provision, authorizes those accountants to disclose to the Agent any and all
financial statements and other supporting financial documents and schedules
relating to the Borrower and to discuss directly with the Agent the finances and
affairs of the Borrower. In such communications and discussions the Agent shall
(i) give prior telephonic or written notice to the Borrower's Chief Financial
Officer, Vice President of Finance or other officer of the Borrower designated
for such notice and (ii) give the Borrower the opportunity to participate.
(b) As soon as available, but in any event not later than
forty-five (45) days after the end of each month, consolidated and consolidating
unaudited balance sheets, statements of income, expenses, and cash flow of the
Borrower and its consolidated Subsidiaries as at the end of such month and for
the period from the beginning of the Fiscal Year to the end of such month;
provided that for the period from the Closing Date through and including June
30, 2001, the Borrower shall provide balance sheets and statements of cash flow,
as at and for the fiscal quarter then ended, within forty-five (45) days of the
end of each fiscal quarter. All financial statements furnished by the Borrower
pursuant to this clause (b) shall be in reasonable detail and, in all material
respects, fairly present the financial position and results of operations of the
Borrower and its consolidated Subsidiaries as at the date thereof and for the
period then ending, and shall be prepared in accordance with GAAP applied
consistently with the audited Financial
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Statements required to be delivered pursuant to Section 7.2(a). The Borrower
shall certify by a certificate signed by its chief financial officer that all
such statements have been prepared in accordance with GAAP and present fairly,
in all material respects, subject to normal year-end adjustments and the absence
of footnotes, the Borrower's financial position as at the dates thereof and its
results of operations for the periods then ended.
(c) As soon as available, but in any event not later than
five (5) days after the date the Borrower files or is required to file any 10-Q
statement pursuant to applicable regulations of the SEC (without regard to any
applicable extension), consolidated and consolidating unaudited balance sheets
of the Borrower and its consolidated Subsidiaries as at the end of such quarter,
consolidated and consolidating unaudited statements of income and expense and
statement of cash flows for the Borrower and its Subsidiaries for such quarter
and for the period from the beginning of the Fiscal Year to the end of such
quarter, all in reasonable detail, fairly presenting the financial position and
results of operation of the Borrower and its Subsidiaries as at the date thereof
and for such periods, prepared in accordance with GAAP consistent with the
audited Financial Statements required to be delivered pursuant to Section
7.2(a). The Borrower shall certify by a certificate signed by its chief
financial officer that all such statements have been prepared in accordance with
GAAP and present fairly, in all material respects, subject to normal year-end
adjustments and the absence of footnotes, the Borrower's financial position as
at the dates thereof and its results of operations for the periods then ended.
(d) With each of the audited Financial Statements
delivered pursuant to Section 7.2(a), a certificate of the independent certified
public accountants that examined such statement to the effect that they have
reviewed and are familiar with this Agreement and that, in examining such
Financial Statements, they did not become aware of any fact or condition which
then constituted a Default or Event of Default with respect to a financial
covenant, except for those, if any, described in reasonable detail in such
certificate.
(e) With each of the annual audited Financial Statements
delivered pursuant to Section 7.2(a), and within forty-five (45) days after the
end of the first three fiscal quarters of the Borrower's Fiscal Year, a
certificate of the chief financial officer of the Borrower (i) setting forth in
reasonable detail the calculations required to establish that the Borrower was
in compliance with the covenant set forth in Section 9.25 during the period
covered in such Financial Statements and as at the end thereof, and (ii) stating
that, except as otherwise explained or described in reasonable detail in such
certificate, (A) all of the representations and warranties of the Borrower
contained in this Agreement and the other Loan Documents are correct and
complete in all material respects as at the date of such certificate as if made
at such time, except for those that speak as of a particular date, (B) the
Borrower is, at the date of such certificate, in compliance in all material
respects with all of its respective covenants and agreements in this Agreement
and the other Loan Documents, and (C) no Default or Event of Default then exists
or existed during the period covered by such Financial Statements. If such
certificate discloses that a representation or warranty is not correct or
complete, or that a covenant has not been complied with, or that a Default or
Event of Default existed or exists, such certificate shall set forth what action
the Borrower has taken or proposes to take with respect thereto.
(f) Within ten (10) days after the approval thereof by
the Borrower's Board of Directors but in no event later than February 15 of each
Fiscal Year, commencing February 15,
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2001, annual forecasts (to include forecasted consolidated and consolidating
balance sheets, statements of income and expenses and statements of cash flow)
for the Borrower and its Subsidiaries as at the end of and for each month of
such Fiscal Year.
(g) Promptly after filing with the PBGC and the IRS, a
copy of each annual report or other filing filed with respect to each Plan of
the Borrower.
(h) Promptly upon the filing thereof, copies of all
reports, if any, to or other documents filed by the Borrower or any of its
Subsidiaries with the Securities and Exchange Commission under the Exchange Act,
and all reports, notices, or statements sent or received by the Borrower or any
of its Subsidiaries to or from the holders of any equity interests of the
Borrower (other than routine non-material correspondence sent by shareholders of
the Borrower to the Borrower) or any such Subsidiary or of any Debt for Borrowed
Money of the Borrower or any of its Subsidiaries registered under the Securities
Act of 1933 or to or from the trustee under any indenture under which the same
is issued.
(i) As soon as available, but in any event not later than
10 days after the Borrower's receipt thereof, a copy of each final management
report and final management letter prepared for the Borrower by any independent
certified public accountants of the Borrower.
(j) Promptly after their filing with the SEC, copies of
any and all proxy statements, financial statements, and reports which the
Borrower makes available to its shareholders.
(k) At the Agent's request, a copy of each tax return
filed by the Borrower or by any of its Subsidiaries.
(l) Such additional information as the Agent and/or any
Lender may from time to time reasonably request regarding the financial and
business affairs of the Borrower or any Subsidiary.
7.3 Notices to the Agent. The Borrower shall notify the Agent in
writing of the following matters at the following times:
(a) immediately after becoming aware of any Default or
Event of Default;
(b) immediately after becoming aware of the assertion by
the holder of any capital stock of the Borrower or of any Subsidiary or of any
Debt in a face amount in excess of $2,500,000 that a default exists with respect
thereto or that the Borrower or such Subsidiary is not in compliance with the
terms thereof, or the threat or commencement by such holder of any enforcement
action because of such asserted default or non-compliance;
(c) immediately after becoming aware of any event or
circumstance which could reasonably be expected to have a Material Adverse
Effect;
(d) immediately after becoming aware of any pending or
threatened action, suit, or proceeding, by any Person, or any pending or
threatened investigation by a Governmental Authority, which could reasonably be
expected to have a Material Adverse Effect;
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(e) immediately after becoming aware of any pending or
threatened strike, work stoppage, unfair labor practice claim, or other labor
dispute affecting the Borrower or any of its Subsidiaries in a manner which
could reasonably be expected to have a Material Adverse Effect;
(f) immediately after becoming aware of any violation of
any law, statute, regulation, or ordinance of a Governmental Authority affecting
the Borrower or any Subsidiary which could reasonably be expected to have a
Material Adverse Effect;
(g) any change in the Borrower's name, state of
organization, or form of organization, trade names under which the Borrower will
sell Inventory or create Accounts, or to which instruments in payment of
Accounts may be made payable, in each case at least thirty (30) days prior
thereto;
(h) within ten (10) Business Days after the Borrower or
any ERISA Affiliate knows or has reason to know, that an ERISA Event or a
prohibited transaction (as defined in Sections 406 of ERISA and 4975 of the
Code) has occurred, and, when known, any action taken or threatened by the IRS,
the DOL or the PBGC with respect thereto;
(i) upon request, or, in the event that such filing
reflects a significant change with respect to the matters covered thereby,
within five (5) Business Days after the filing thereof with the PBGC, the DOL or
the IRS, as applicable, copies of the following: (i) each annual report (form
5500 series), including Schedule B thereto, filed with the PBGC, the DOL or the
IRS with respect to each Plan, (ii) a copy of each funding waiver request filed
with the PBGC, the DOL or the IRS with respect to any Plan and all
communications received by the Borrower or any ERISA Affiliate from the PBGC,
the DOL or the IRS with respect to such request, and (iii) a copy of each other
filing or notice filed with the PBGC, the DOL or the IRS, with respect to each
Plan by either the Borrower or any ERISA Affiliate;
(j) upon request, copies of each actuarial report for any
Plan or Multi-employer Plan and annual report for any Multi-employer Plan; and
within five (5) Business Days after receipt thereof by the Borrower or any ERISA
Affiliate, copies of the following: (i) any notices of the PBGC's intention to
terminate a Plan or to have a trustee appointed to administer such Plan; (ii)
any favorable or unfavorable determination letter from the IRS regarding the
qualification of a Plan under Section 401(a) of the Code; or (iii) any notice
from a Multi-employer Plan regarding the imposition of withdrawal liability;
(k) within (i) fifteen (15) Business Days after the
occurrence thereof, any changes in the benefits of any existing Plan which
increase the Borrower's annual costs with respect thereto by an amount in excess
of $5,000,000, or the establishment of any new Plan or the commencement of
contributions to any Plan to which the Borrower or any ERISA Affiliate was not
previously contributing; and (ii) within three (3) Business Days after the
occurrence thereof, any failure by the Borrower or any ERISA Affiliate to make a
required installment or any other required payment under Section 412 of the Code
on or before the due date for such installment or payment; or
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(l) within five (5) Business Days after the Borrower or
any ERISA Affiliate knows or has reason to know that any of the following events
has or will occur: (i) a Multi-employer Plan has been or will be terminated;
(ii) the administrator or plan sponsor of a Multi-employer Plan intends to
terminate a Multi-employer Plan; or (iii) the PBGC has instituted or will
institute proceedings under Section 4042 of ERISA to terminate a Multi-employer
Plan.
Each notice given under this Section shall describe the
subject matter thereof in reasonable detail, and shall set forth the action that
the Borrower, its Subsidiary, or any ERISA Affiliate, as applicable, has taken
or proposes to take with respect thereto.
ARTICLE 8
GENERAL WARRANTIES AND REPRESENTATIONS
The Borrower warrants and represents to the Agent and the Lenders that
except as hereafter disclosed to and accepted by the Agent and the Required
Lenders in writing:
8.1 Authorization, Validity, and Enforceability of this Agreement
and the Loan Documents. The Borrower has the corporate power and authority to
execute, deliver and perform this Agreement and the other Loan Documents to
which it is a party, to incur the Obligations, and to grant to the Agent Liens
upon and security interests in the Collateral. The Borrower has taken all
necessary corporate action (including obtaining approval of its stockholders if
necessary) to authorize its execution, delivery, and performance of this
Agreement and the other Loan Documents to which it is a party. This Agreement
and the other Loan Documents to which it is a party have been duly executed and
delivered by the Borrower, and constitute the legal, valid and binding
obligations of the Borrower, enforceable against it in accordance with their
respective terms without defense, setoff or counterclaim. The Borrower's
execution, delivery, and performance of this Agreement and the other Loan
Documents to which it is a party do not and will not conflict with, or
constitute a violation or breach of, or constitute a default under, or result
in, or require the creation or imposition of any Lien upon the property of the
Borrower or any of its Subsidiaries other than Liens contemplated by this
Agreement and the other Loan Documents by reason of the terms of (a) any
contract, mortgage, Lien, lease, agreement, indenture, or instrument to which
the Borrower is a party or which is binding upon it, (b) any Requirement of Law
applicable to the Borrower or any of its Subsidiaries, or (c) the certificate or
articles of incorporation or by-laws of the Borrower or any of its Subsidiaries.
8.2 Validity and Priority of Security Interest. The provisions of
this Agreement, and the other Loan Documents create legal and valid Liens on all
the Collateral in favor of the Agent, for the ratable benefit of the Agent and
the Lenders, and such Liens constitute perfected and continuing Liens on all the
Collateral, having priority over all other Liens on the Collateral, except for
those Liens identified in clauses (c), (d), and (e) of the definition of
Permitted Liens, and clause (g) of the definition of Permitted Liens to the
extent permitted pursuant to the terms of the Intercreditor Agreement, securing
all the Obligations, and enforceable against the Borrower and all third parties.
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8.3 Organization and Qualification. The Borrower (a) is duly
incorporated and organized and validly existing in good standing under the laws
of the state of its incorporation, (b) is qualified to do business as a foreign
corporation and is in good standing in the jurisdictions set forth on Schedule
8.3 which are the only jurisdictions in which qualification is necessary in
order for it to own or lease its property and conduct its business and (c) has
all requisite power and authority to conduct its business and to own its
property, except where the failure to so qualify could reasonably be expected to
have a Material Adverse Effect.
8.4 Corporate Name; Prior Transactions. Except as set forth on
Schedule 8.4, the Borrower has not, during the past five (5) years, been known
by or used any other corporate or fictitious name, or been a party to any merger
or consolidation, or acquired all or substantially all of the assets of any
Person, or acquired any of its property outside of the ordinary course of
business.
8.5 Subsidiaries and Affiliates. Schedule 8.5 is a correct and
complete list of the name and relationship to the Borrower of each and all of
the Borrower's Subsidiaries and other Affiliates. Each Subsidiary is (a) duly
incorporated and organized and validly existing in good standing under the laws
of its state of incorporation set forth on Schedule 8.5, (b) qualified to do
business as a foreign corporation and in good standing in each jurisdiction in
which the failure to so qualify or be in good standing could reasonably be
expected to have a material adverse effect on any such Subsidiary's business,
operations, prospects, property, or condition (financial or otherwise), and (c)
has all requisite power and authority to conduct its business and own its
property.
8.6 Financial Statements and Projections. (a) The Borrower has
delivered to the Agent and the Lenders the audited balance sheet and related
statements of income, retained earnings, cash flows, and changes in stockholders
equity for the Borrower and its consolidated Subsidiaries as of December 31,
1999, and for the Fiscal Year then ended, accompanied by the report thereon of
the Borrower's independent certified public accountants, Xxxxxx Xxxxxxxx LLP.
The Borrower has also delivered to the Agent and the Lenders the unaudited
balance sheet and related statements of income and cash flows for the Borrower
and its consolidated Subsidiaries as of June 30, 2000. Such financial statements
are attached hereto as Exhibit B. All such financial statements have been
prepared in accordance with GAAP and present fairly, in all material respects;
the financial position of the Borrower and its consolidated Subsidiaries as at
the dates thereof and their results of operations for the periods then ended
subject to normal year-end adjustments and the absence of footnotes.
(b) The Latest Projections when submitted to the Lenders
as required herein represent the Borrower's best estimate of the future
financial performance of the Borrower and its consolidated Subsidiaries for the
periods set forth therein. The Latest Projections have been prepared on the
basis of the assumptions set forth therein, which the Borrower believes are fair
and reasonable in light of current and reasonably foreseeable business
conditions at the time submitted to the Lender.
(c) The pro forma balance sheet of the Borrower as at
June 30, 2000, attached hereto as Exhibit B, presents fairly, in all material
respects, the Borrower's financial condition as at such date after giving effect
to the transactions contemplated by this Agreement as if such
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transactions had occurred on such date and the Closing Date had been such date,
and has been prepared in accordance with GAAP.
8.7 Capitalization. The Borrower's authorized voting capital stock
consists of 50,000,000 shares of common stock, par value $0.10 per share, of
which 2,158,755 shares are validly issued and outstanding, fully paid and
non-assessable and are owned beneficially and of record in accordance with the
listing in Schedule 8.7. The Borrower's other capital stock including authorized
and issued shares and ownership is set forth on Schedule 8.7.
8.8 Solvency. The Borrower is Solvent prior to and after giving
effect to the making of the Revolving Loans to be made on the Closing Date and
the issuance of the Letters of Credit to be issued on the Closing Date, and
shall remain Solvent during the term of this Agreement.
8.9 Debt. After giving effect to the making of the Revolving Loans
to be made on the Closing Date, the Borrower and its Subsidiaries have no Debt,
except (a) the Obligations; (b) the Other Senior Debt; (c) Capitalized Lease
Obligations, mortgage financings or other purchase money obligations or
obligations under other financing transactions relating to Capital Expenditures,
in each case incurred for the purpose of financing all or part of the purchase
price or cost of construction or improvements to the subject property, in an
aggregate amount not to exceed (i) in any Fiscal Year the lesser of (I)
$10,000,000 and (II) twenty-five percent (25%) of the amount of the Borrower's
Capital Expenditures as determined in accordance with GAAP in the prior Fiscal
Year and (ii) $35,000,000 outstanding at any time; (d) Debt evidenced by
Guaranties, performance bonds, surety bonds and obligations of a like nature
incurred in the ordinary course of business for the purpose of insuring the
performance of the Borrower or any Subsidiary, the aggregate of which does not
exceed $1,000,000; (e) Debt under Hedge Agreements; (f) Debt arising as a result
of one or more sale and leaseback transactions, provided the Borrower's
aggregate, non-discounted liability associated with all such sale and leaseback
transaction is not in excess of the limitations on leases established pursuant
to Sections 8.9(c) and 9.2; (g) Debt for Borrowed Money arising as a result of
programs by or from Governmental Authorities or guaranteed by Governmental
Authorities that result in below market interest rate loans, to the extent it
does not exceed $5,000,000 in principal amount outstanding at any one time; (h)
Debt not included in the preceding clauses (a) through (f) in an amount not to
exceed $5,000,000 in principal amount outstanding at any one time; (i) Debt
incurred to refinance any Debt described in the preceding clauses (b) through
(i) provided that the maturity date of such Debt is after the Stated Termination
Date; and (j) trade payables and other contractual obligations arising in the
ordinary course of business (the Debt described in the preceding clauses (a)
through (j) being collectively referred to herein as the "Permitted Debt").
8.10 Distributions. Since December 1999, no Distribution has been
declared, paid, or made upon or in respect of any capital stock or other
securities of the Borrower or any of its Subsidiaries.
8.11 Title to Property. The Borrower has good, indefeasible, and
merchantable title to all of its property (including the assets reflected on the
June 30, 2000 Financial Statements delivered to the Agent, except as disposed of
in the ordinary course of business since the date thereof), free of all Liens
except Permitted Liens.
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8.12 Real Estate; Leases. Schedule 8.12 sets forth, as of the
Closing Date, a correct and complete list of all Real Estate owned by the
Borrower and of any real property owned by any of its Subsidiaries, all leases
and subleases of real or personal property held by the Borrower as lessee or
sublessee and all leases and subleases of real or personal property held by the
Borrower as lessor, or sublessor at which the Borrower currently stores or
maintains or intends to store or maintain Collateral. Each of such leases and
subleases is valid and enforceable in accordance with its terms and is in full
force and effect, and no default by the Borrower, or, to the knowledge of the
Borrower, by any other party to any such lease or sublease exists.
8.13 Proprietary Rights. Schedule 8.13 sets forth a correct and
complete list of all of the Borrower's Proprietary Rights. None of the
Proprietary Rights is subject to any licensing agreement or similar arrangement
except as set forth on Schedule 8.13. To the best of the Borrower's knowledge,
none of the Proprietary Rights infringes on or conflicts with any other Person's
property, and no other Person's property infringes on or conflicts with the
Proprietary Rights. The Proprietary Rights described on Schedule 8.13 constitute
all of the property of such type necessary to the current and anticipated future
conduct of the Borrower's business.
8.14 Trade Names. All trade names or styles under which the
Borrower or any of its Subsidiaries will sell Inventory or create Accounts, or
to which instruments in payment of Accounts may be made payable, are listed on
Schedule 8.14.
8.15 Litigation. Except as set forth on Schedule 8.15, there is no
pending, or to the best of the Borrower's knowledge threatened, action, suit,
proceeding, or counterclaim by any Person, or to the best of the Borrower's
knowledge investigation by any Governmental Authority, or any basis for any of
the foregoing, which could reasonably be expected to cause a Material Adverse
Effect. The Borrower has provided, and will continue to provide, the Agent with
copies on a current basis of all pleadings and other material filings relating
to the Xxxxx Litigation.
8.16 Restrictive Agreements. The Borrower is not a party to any
contract or agreement, or subject to any charter or other corporate restriction,
which affects its ability to execute, deliver, and perform the Loan Documents
and repay the Obligations or which could reasonably be expected to cause a
Material Adverse Effect.
8.17 Collective Bargaining Agreements; Labor Disputes. Except as
set forth on Schedule 8.17, as of the Closing Date (a) there is no collective
bargaining agreement or other labor contract covering employees of the Borrower
or any of its Subsidiaries, (b) no such collective bargaining agreement or other
labor contract is scheduled to expire during the term of this Agreement, (c) no
union or other labor organization is seeking to organize, or to be recognized
as, a collective bargaining unit of employees of the Borrower or any of its
Subsidiaries or for any similar purpose, and (d) there is no pending or (to the
best of the Borrower's knowledge) threatened, strike, work stoppage, material
unfair labor practice claim, or other material labor dispute against or
affecting the Borrower or its Subsidiaries or their employees.
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8.18 Environmental Laws. Except as otherwise disclosed on Schedule
8.18.
(a) The Borrower and its Subsidiaries have complied in
all material respects with all Environmental Laws and neither the Borrower nor
any Subsidiary nor any of its presently owned real property or presently
conducted operations, nor its previously owned real property or prior
operations, is subject to any enforcement order from or liability agreement with
any Governmental Authority or private Person respecting (i) compliance with any
Environmental Law or (ii) any potential liabilities and costs or remedial action
arising from the Release or threatened Release of a Contaminant.
(b) The Borrower and its Subsidiaries have obtained all
permits necessary for their current operations under Environmental Laws, and all
such permits are in good standing and the Borrower and its Subsidiaries are in
compliance with all material terms and conditions of such permits.
(c) Neither the Borrower nor any of its Subsidiaries,
nor, to the best of the Borrower's knowledge, any of its predecessors in
interest, has in violation of applicable law stored, treated or disposed of any
hazardous waste.
(d) Neither the Borrower nor any of its Subsidiaries has
received any summons, complaint, order or similar written notice indicating that
it is not currently in compliance with, or that any Governmental Authority is
investigating its compliance with, any Environmental Laws or that it is or may
be liable to any other Person as a result of a Release or threatened Release of
a Contaminant.
(e) To the best of the Borrower's knowledge, none of the
present or past operations of the Borrower and its Subsidiaries is the subject
of any investigation by any Governmental Authority evaluating whether any
remedial action is needed to respond to a Release or threatened Release of a
Contaminant.
(f) Neither the Borrower nor any of its Subsidiaries has
entered into any negotiations or settlement agreements with any Person
(including the prior owner of its property) imposing material obligations or
liabilities on the Borrower or any of its Subsidiaries with respect to any
remedial action in response to the Release of a Contaminant or environmentally
related claim.
(g) None of the products manufactured, distributed or
sold by the Borrower or any of its Subsidiaries contain asbestos containing
material.
(h) No Environmental Lien has attached to the Real
Estate.
8.19 No Violation of Law. Neither the Borrower nor any of its
Subsidiaries is in violation of any law, statute, regulation, ordinance,
judgment, order, or decree applicable to it which violation could reasonably be
expected to have a Material Adverse Effect.
8.20 No Default. Neither the Borrower nor any of its Subsidiaries
is in default with respect to any note, indenture, loan agreement, mortgage,
lease, deed, or other agreement to
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which the Borrower or such Subsidiary is a party or by which it is bound, which
default could reasonably be expected to have a Material Adverse Effect.
8.21 ERISA Compliance. Except as otherwise disclosed in Schedule
8.21:
(a) Each Plan is in compliance in all material respects
with the applicable provisions of ERISA, the Code and other federal or state
law. Each Plan which is intended to qualify under Section 401(a) of the Code has
received a favorable determination letter from the IRS and to the best knowledge
of the Borrower, nothing has occurred which would cause the loss of such
qualification. The Borrower and each ERISA Affiliate has made all required
contributions to any Plan subject to Section 412 of the Code, and no application
for a funding waiver or an extension of any amortization period pursuant to
Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of the
Borrower, threatened claims, actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan which has resulted or could reasonably be
expected to result in a Material Adverse Effect. There has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan which has resulted or could reasonably be expected to result in a
Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably
expected to occur; (ii) no Pension Plan has any Unfunded Pension Liability in
excess of $35,000,000 on the Closing Date, determined as if each such Pension
Plan terminated in a standard termination in accordance with Section 4041 of
ERISA as of January 1, 2000; (iii) neither the Borrower nor any ERISA Affiliate
has incurred, or reasonably expects to incur, any liability under Title IV of
ERISA with respect to any Pension Plan (other than premiums due and not
delinquent under Section 4007 of ERISA); (iv) neither the Borrower nor any ERISA
Affiliate has incurred, or reasonably expects to incur, any liability (and no
event has occurred which, with the giving of notice under Section 4219 of ERISA,
would result in such liability) under Section 4201 or 4243 of ERISA with respect
to a Multi-employer Plan; and (v) neither the Borrower nor any ERISA Affiliate
has engaged in a transaction that could be subject to Section 4069 or 4212(c) of
ERISA.
8.22 Taxes. The Borrower and its Subsidiaries have filed all
federal and other tax returns and reports required to be filed, and have paid
all federal and other taxes, assessments, fees and other governmental charges
levied or imposed upon them or their properties, income or assets otherwise due
and payable unless such unpaid taxes and assessments would constitute a
Permitted Lien.
8.23 Regulated Entities. None of the Borrower, any Person
controlling the Borrower, or any Subsidiary, is an "Investment Company" within
the meaning of the Investment Company Act of 1940. The Borrower is not subject
to regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, any state public utilities code or law,
or any other federal or state statute or regulation limiting its ability to
incur indebtedness.
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8.24 Use of Proceeds; Margin Regulations. The proceeds of the Loans
are to be used solely for working capital purposes. Neither the Borrower nor any
Subsidiary is engaged in the business of purchasing or selling Margin Stock or
extending credit for the purpose of purchasing or carrying Margin Stock.
8.25 Copyrights, Patents, Trademarks and Licenses, etc. The
Borrower owns or is licensed or otherwise has the right to use all of the
patents, trademarks, service marks, trade names, copyrights, contractual
franchises, licenses, rights of way, authorizations and other rights that are
reasonably necessary for the operation of its businesses, without conflict with
the rights of any other Person. To the best knowledge of the Borrower, no slogan
or other advertising device, product, process, method, substance, part or other
material now employed, or now contemplated to be employed, by the Borrower or
any Subsidiary infringes upon any rights held by any other Person. Except for
the Xxxxx Litigation, no claim or litigation regarding any of the foregoing is
pending or threatened, and no patent, invention, device, application, principle
or any statute, law, rule, regulation, standard or code is pending or, to the
knowledge of the Borrower, proposed, which, in either case, could reasonably be
expected to have a Material Adverse Effect.
8.26 No Material Adverse Change. No material adverse change has
occurred in the Borrower's property, business, operations, or conditions
(financial or otherwise) since the date of the Financial Statements delivered to
the Lenders. On the basis of a comprehensive review and assessment undertaken by
the Borrower of the Borrower's computers and computer applications and inquiry
made of the Borrower's material suppliers, vendors and customers the Borrower
reasonably believes that there is no material risk that computers and computer
applications used by the Borrower may be unable to recognize and perform
properly date-sensitive functions.
8.27 Full Disclosure. None of the representations or warranties
made by the Borrower or any Subsidiary in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on behalf of the Borrower or any Subsidiary in connection with the Loan
Documents (including the offering and disclosure materials delivered by or on
behalf of the Borrower to the Lenders prior to the Closing Date), contains any
untrue statement of a material fact or omits any material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading as of the time when made
or delivered.
8.28 Material Agreements. Schedule 8.28 hereto sets forth as of the
Closing Date all material agreements and contracts to which the Borrower or any
of its Subsidiaries is a party or is bound as of the date hereof. For purposes
of the preceding paragraph, material agreement or contract means any agreement
or contract that would be required to be filed as an exhibit pursuant to item
601 (10) of Regulation S-K promulgated under the Exchange Act.
8.29 Bank Accounts. Schedule 8.29 contains as of the Closing Date a
complete and accurate list of all bank accounts maintained by the Borrower with
any bank or other financial institution.
8.30 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority or other Person
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is necessary or required in connection with the execution, delivery or
performance by, or enforcement against, the Borrower or any of its Subsidiaries
of this Agreement or any other Loan Document.
ARTICLE 9
AFFIRMATIVE AND NEGATIVE COVENANTS
The Borrower covenants to the Agent and each Lender that so long as any
of the Obligations remain outstanding or this Agreement is in effect:
9.1 Taxes and Other Obligations. The Borrower shall, and shall
cause each of its Subsidiaries to, (a) file when due all tax returns and other
reports which it is required to file; (b) pay, or provide for the payment, when
due, of all taxes, fees, assessments and other governmental charges against it
or upon its property, income and franchises, make all required withholding and
other tax deposits, and establish adequate reserves for the payment of all such
items, and provide to the Agent and the Lenders, upon request, satisfactory
evidence of its timely compliance with the foregoing; and (c) pay when due all
Debt owed by it and all claims of materialmen, mechanics, carriers,
warehousemen, landlords, processors and other like Persons, and all other
indebtedness owed by it and perform and discharge in a timely manner all other
obligations undertaken by it; provided, however, so long as the Borrower has
notified the Agent in writing, neither the Borrower nor any of its Subsidiaries
need pay any tax, fee, assessment, or governmental charge, that (i) it is
contesting in good faith by appropriate proceedings diligently pursued, (ii) the
Borrower or its Subsidiary, as the case may be, has established proper reserves
for as provided in GAAP, and (iii) no Lien (other than a Permitted Lien) results
from such non-payment.
9.2 Corporate Existence and Good Standing. The Borrower shall, and
shall cause each of its Subsidiaries to, maintain its corporate existence and
its qualification and good standing in all jurisdictions in which the failure to
maintain such existence and qualification or good standing could reasonably be
expected to have a Material Adverse Effect.
9.3 Compliance with Law and Agreements; Maintenance of Licenses.
The Borrower shall comply, and shall cause each Subsidiary to comply, in all
material respects with all Requirements of Law of any Governmental Authority
having jurisdiction over it or its business (including the Federal Fair Labor
Standards Act and all Environmental Laws). The Borrower shall, and shall cause
each of its Subsidiaries to, obtain and maintain all licenses, permits,
franchises, and governmental authorizations necessary to own its property and to
conduct its business as conducted on the Closing Date. The Borrower shall not
modify, amend or alter its certificate or article of incorporation other than in
a manner which does not adversely affect the rights of the Lenders or the Agent.
9.4 Maintenance of Property. The Borrower shall, and shall cause
each of its Subsidiaries to, maintain all of its property necessary and useful
in the conduct of its business, in good operating condition and repair, ordinary
wear and tear excepted.
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9.5 Insurance. (a) The Borrower shall maintain, and shall cause
each of its Subsidiaries to maintain, with financially sound and reputable
insurers having a rating of at least AVII or better by Best Rating Guide,
insurance against loss or damage by fire with extended coverage; theft,
burglary, pilferage and loss in transit; public liability and third party
property damage; larceny, embezzlement or other criminal liability; business
interruption; public liability and third party property damage; and such other
hazards or of such other types as is customary for Persons engaged in the same
or similar business, as the Agent, in its discretion, or acting at the direction
of the Required Lenders, shall specify, in amounts, and under policies
acceptable to the Agent and the Required Lenders. Without limiting the
foregoing, the Borrower shall also maintain, and shall cause each of its
Subsidiaries to maintain, flood insurance, in the event of a designation of the
area in which any Inventory is located on Real Estate that is located in "flood
prone" or a "flood risk area," (hereinafter "SFHA") as defined by the Flood
Disaster Protection Act of 1973, in an amount to be reasonably determined by the
Agent, and shall comply with the additional requirements of the National Flood
Insurance Program as set forth in said Act.
(b) The Borrower shall cause the Agent, for the ratable
benefit of the Agent and the Lenders, to be named as secured party and loss
payee or additional insured in each policy insuring the Collateral, in a manner
acceptable to the Agent. Each policy of insurance shall contain a clause or
endorsement requiring the insurer to give not less than thirty (30) days' prior
written notice to the Agent in the event of cancellation of the policy for any
reason whatsoever. All premiums for such insurance shall be paid by the Borrower
when due, and certificates of insurance and, if requested by the Agent or any
Lender, photocopies of the policies, shall be delivered to the Agent, in each
case in sufficient quantity for distribution by the Agent to each of the
Lenders. If the Borrower fails to procure such insurance or to pay the premiums
therefor when due, the Agent may, and at the direction of the Required Lenders
shall, do so from the proceeds of Revolving Loans.
(c) The Borrower shall promptly notify the Agent of any
loss, damage, or destruction to the Collateral, whether or not covered by
insurance. The Agent is hereby authorized to collect all insurance proceeds in
respect of Collateral, directly and after deducting from such proceeds the
reasonable expenses, if any, incurred by the Agent in the collection or handling
thereof, the Agent shall apply such proceeds, ratably, to the reduction of the
Obligations in the order provided for in Section 4.5.
9.6 Condemnation. (a) The Borrower shall, immediately upon
learning of the institution of any proceeding for the condemnation or other
taking of any of its property, notify the Agent of the pendency of such
proceeding, and agrees that the Agent may participate in any such proceeding,
and the Borrower from time to time will deliver to the Agent all instruments
reasonably requested by the Agent to permit such participation.
(b) The Agent is hereby authorized to collect the
proceeds of any condemnation claim or award relating to Collateral, directly,
and after deducting from such proceeds the reasonable expenses, if any, incurred
by the Agent in the collection or handling thereof, the Agent shall apply such
proceeds, ratably, to the reduction of the Obligations in the order provided for
in Section 4.5.
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9.7 Environmental Laws. (a) The Borrower shall, and shall cause
each of its Subsidiaries to, conduct its business in compliance in all material
respects with all Environmental Laws applicable to it, including those relating
to the generation, handling, use, storage, and disposal of any Contaminant. The
Borrower shall, and shall cause each of its Subsidiaries to, take prompt and
appropriate action to respond to any non-compliance with Environmental Laws and
shall regularly report to the Agent on such response.
(b) Without limiting the generality of the foregoing, the
Borrower shall submit to the Agent and the Lenders annually, commencing on the
first Anniversary Date, and on each Anniversary Date thereafter, an update of
the status of each environmental compliance or liability issue. The Agent may
request copies of technical reports prepared by the Borrower and its
communications with any Governmental Authority to determine whether the Borrower
or any of its Subsidiaries is proceeding reasonably to correct, cure or contest
in good faith any alleged non-compliance or environmental liability.
9.8 Compliance with ERISA. The Borrower shall, and shall cause
each of its ERISA Affiliates to: (a) maintain each Plan in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
federal or state law; (b) cause each Plan which is qualified under Section
401(a) of the Code to maintain such qualification; (c) make all required
contributions to any Plan subject to Section 412 of the Code; (d) not engage in
a prohibited transaction or violation of the fiduciary responsibility rules with
respect to any Plan; and (e) not engage in a transaction that could be subject
to Section 4069 or 4212(c) of ERISA.
9.9 Mergers, Consolidations or Sales. Neither the Borrower nor any
of its Subsidiaries shall enter into any transaction of merger, reorganization,
or consolidation, or transfer, sell, assign, lease, or otherwise dispose of all
or any part of its property, or wind up, liquidate or dissolve, or agree to do
any of the foregoing, except (i) for sales of Inventory in the ordinary course
of its business (ii) for sales or other dispositions of Equipment in the
ordinary course of business that are obsolete or no longer useable by the
Borrower in its business or equipment that is being replaced and (iii) sales or
dispositions of Closed Plants. The inclusion of proceeds in the definition of
Collateral shall not be deemed to constitute the Agent's or any Lender's consent
to any sale or other disposition of the Collateral except as expressly permitted
herein.
9.10 Distributions; Capital Change; Restricted Investments. Neither
the Borrower nor any of its Subsidiaries shall (i) directly or indirectly
declare or make, or incur any liability to make, any Distribution, except
Distributions to the Borrower by its Subsidiaries, (ii) make any change in its
capital structure which could have a Material Adverse Effect or (iii) make any
Restricted Investment.
9.11 Transactions Affecting Collateral or Obligations. Neither the
Borrower nor any of its Subsidiaries shall enter into any transaction which
would be reasonably expected to have a Material Adverse Effect.
9.12 Guaranties. Neither the Borrower nor any of its Subsidiaries
shall make, issue, or be or become liable on any Guaranty, except Guaranties of
the Obligations in favor of the Agent.
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9.13 Debt. Neither the Borrower nor any of its Subsidiaries shall
incur or maintain any Debt other than Permitted Debt.
9.14 Prepayment. Neither the Borrower nor any of its Subsidiaries
shall voluntarily prepay any Debt other than trade payables paid in the ordinary
course of the Borrower's business, except (i) the Obligations in accordance with
the terms of this Agreement and (ii) which no Default or Event of Default exists
hereunder, or would exist after giving effect to such payment, other Debt in a
principal amount not to exceed $5,000,000 in any one Fiscal Year.
9.15 Transactions with Affiliates. Except as set forth below,
neither the Borrower nor any of its Subsidiaries shall, sell, transfer,
distribute, or pay any money or property, including, but not limited to, any
fees or expenses of any nature (including, but not limited to, any fees or
expenses for management services), to any Affiliate, or lend or advance money or
property to any Affiliate, or invest in (by capital contribution or otherwise)
or purchase or repurchase any stock or indebtedness, or any property, of any
Affiliate, or become liable on any Guaranty of the indebtedness, dividends, or
other obligations of any Affiliate. Notwithstanding the foregoing, while no
Event of Default has occurred and is continuing, the Borrower and its
Subsidiaries may engage in transactions with Affiliates (a) pursuant to the
terms of the Intercompany Agreement, or (b) otherwise on terms no less favorable
to the Borrower and its Subsidiaries than would be obtained in a comparable
arm's-length transaction with a third party who is not an Affiliate. The
Borrower shall not amend the Intercompany Agreement without the prior written
consent of the Agent.
9.16 Investment Banking and Finder's Fees. Neither the Borrower nor
any of its Subsidiaries shall pay or agree to pay, or reimburse any other party
with respect to, any investment banking or similar or related fee, underwriter's
fee, finder's fee, or broker's fee other than pursuant to the Fee Letter to any
Person in connection with this Agreement. The Borrower shall defend and
indemnify the Agent and the Lenders against and hold them harmless from all
claims of any Person that the Borrower is obligated to pay for any such fees,
and all costs and expenses (including attorneys' fees) incurred by the Agent
and/or any Lender in connection therewith.
9.17 Restriction on Conversion of Accounts. The Borrower shall not
convert any Account in whole or in part into a promissory note, draft, trade
acceptance or other instrument for the payment of money except to the extent
permitted pursuant to the provisions of Section 6.8(c).
9.18 Business Conducted. The Borrower shall not and shall not
permit any of its Subsidiaries to, engage directly or indirectly, in any line of
business other than the businesses in which the Borrower is engaged on the
Closing Date.
9.19 Liens. Neither the Borrower nor any of its Subsidiaries shall
create, incur, assume, or permit to exist any Lien on any property now owned or
hereafter acquired by any of them, except Permitted Liens.
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9.20 Sale and Leaseback Transactions. Neither the Borrower nor any
of its Subsidiaries shall, directly or indirectly, enter into any arrangement
with any Person providing for the Borrower or such Subsidiary to lease or rent
property that the Borrower or such Subsidiary has sold or will sell or otherwise
transfer to such Person if the effect of such transaction would result in the
incurrence of Debt by the Borrower that is not Permitted Debt.
9.21 New Subsidiaries. The Borrower shall not, directly or
indirectly, organize, create, acquire or permit to exist any Subsidiary other
than those listed on Schedule 8.5.
9.22 Fiscal Year. The Borrower shall not change its Fiscal Year.
9.23 Capital Expenditures. Neither the Borrower nor any of its
Subsidiaries shall make or incur any Capital Expenditure if, after giving effect
thereto, the aggregate amount of all Capital Expenditures by the Borrower and
its Subsidiaries on a consolidated basis would exceed: (i) $41,000,000 during
the Fiscal Year ended December 31, 2000 and (ii) $50,000,000 during each of the
Fiscal Years ended December 31, 2001, December 31, 2002, and December 31, 2003,
respectively.
9.24 Operating Lease Obligations. Neither the Borrower nor any of
its Subsidiaries shall enter into, or suffer to exist, any lease of real or
personal property as lessee or sublessee (other than a Capital Lease), if, after
giving effect thereto, the aggregate amount of Rentals (as hereinafter defined)
payable by the Borrower and its Subsidiaries on a consolidated basis in any
Fiscal Year in respect of such lease and all other such leases would exceed
$30,000,000 (such amount being referred to herein as "Permitted Rentals"). The
term "Rentals" means all payments due from the lessee or sublessee to the lessor
or sublessor under a lease, including, without limitation, basic rent,
percentage rent, property taxes, utility or maintenance costs, and insurance
premiums, including specifically without limitation, payments under the GE
Lease.
9.25 Fixed Charge Coverage Ratio. The Borrower will maintain a
Fixed Charge Coverage Ratio for each period of four consecutive fiscal quarters
beginning with the four consecutive fiscal quarters ending as of December 31,
2000, and continuing as of the end of each fiscal quarter thereafter during the
term of this Agreement, of not less than 1.00 to 1.00.
9.26 Use of Proceeds. The Borrower shall not, and shall not suffer
or permit any Subsidiary to, use any portion of the Loan proceeds, directly or
indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or otherwise
refinance indebtedness of the Borrower or others incurred to purchase or carry
Margin Stock, (iii) to extend credit for the purpose of purchasing or carrying
any Margin Stock, or (iv) to acquire any security in any transaction that is
subject to Section 13 or 14 of the Exchange Act.
9.27 Limitation on Strategic Alliance Payments. The Borrower shall
not enter into any new agreements that would require the Borrower to make any
Strategic Alliance Payments while any Event of Default exists or if any Event of
Default would exist after giving effect to such payment; the Borrower shall not
make any Strategic Alliance Payments if giving effect to such payment would mean
that the aggregate Strategic Alliance Payments during the Fiscal Year of such
payment would exceed $5,000,000.
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9.28 Limitation on Management Fees. The Borrower shall not pay any
management fees to any entity other than G & G and only then if the payment is
made pursuant to the Management Agreement and the aggregate management fees so
paid during any Fiscal Year are equal to or less than $1,500,000. The Borrower
may pay an additional $1,500,000 in management fees to G & G during any Fiscal
Year if (i) no Default or Event of Default exists or would exist immediately
after the making of such payment, (ii) the aggregate amount of such payment, and
all other such payments to G & G during the Fiscal Year of the payment would not
exceed $3,000,000, (iii) immediately after giving effect to such payment,
availability is not less than $20,000,000, and (iv) the Borrower's Fixed Charge
Coverage Ratio for the Fiscal Year ended as of the immediately preceding
December 31 on a pro forma basis is equal to or greater than 1.25 to 1.0
assuming such $1,500,000 payment had been made during such prior Fiscal Year.
9.29 Intercompany Agreement. Notwithstanding anything to the
contrary contained in the Intercompany Agreement, in no case (A) shall the
aggregate commissions paid by the Members of the Anchor Group (as defined in the
Intercompany Agreement) in any twelve-month period exceed the sum of (i) the
aggregate commissions received by the Members of the Anchor Group pursuant to
Section 6 of the Intercompany Agreement and (ii) $2,500,000 or (B) shall the
aggregate commissions paid by the Members of the Consumers Group (as defined in
the Intercompany Agreement) in any twelve-month period exceed the sum of (i) the
aggregate commissions received by the Members of the Consumers Group pursuant to
Section 6 of the Intercompany Agreement and (ii) $2,500,000, provided, however,
the limitations contained in this Section 9.29 shall not apply to (and the
calculations made pursuant to this Section 9.29 shall not include) commissions
paid by or to the Members of the Anchor Group or the Members of the Consumers
Group if the manufacturing is being done by an Affiliated Glass Manufacturer (as
defined in the Intercompany Agreement) not a Member of the Anchor Group or a
Member of the Consumers Group, as the case may be, as a result of furnace
repairs, strikes or events of force majeure, in each case temporary in nature,
affecting the operation by such Affiliated Glass Manufacturer or Member of the
Anchor Group, as the case may be, or one or more of its plants.
9.30 Further Assurances. The Borrower shall execute and deliver, or
cause to be executed and delivered, to the Agent and/or the Lenders such
documents and agreements, and shall take or cause to be taken such actions, as
the Agent or any Lender may, from time to time, request to carry out the terms
and conditions of this Agreement and the other Loan Documents.
ARTICLE 10
CONDITIONS OF LENDING
10.1 Conditions Precedent to Making of Loans on the Closing Date.
The obligation of the Lenders to make the initial Revolving Loans on the Closing
Date and the obligation of the Agent to cause the Letter of Credit Issuer to
issue any Letter of Credit on the Closing Date, are subject to the following
conditions precedent having been satisfied in a manner satisfactory to the Agent
and each Lender:
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(a) This Agreement and the other Loan Documents shall
have been executed by each party thereto and the Borrower shall have performed
and complied with all covenants, agreements and conditions contained herein and
the other Loan Documents which are required to be performed or complied with by
the Borrower before or on such Closing Date.
(b) Upon making the Revolving Loans (including such
Revolving Loans made to finance the Closing Fee or otherwise as reimbursement
for fees, costs and expenses then payable under this Agreement) and with all its
obligations current, the Borrower would have Availability in an amount no less
than $10,000,000.
(c) All representations and warranties made hereunder and
in the other Loan Documents shall be true and correct as if made on such date.
(d) No Default or Event of Default shall exist on the
Closing Date, or would exist after giving effect to the Loans to be made, the
Letters of Credit to be issued and the Credit Support to be in place on such
date.
(e) The Agent and the Lenders shall have received such
opinions of counsel for the Borrower and its Subsidiaries as the Agent or any
Lender shall request, each such opinion to be in a form, scope, and substance
satisfactory to the Agent, the Lenders, and their respective counsel.
(f) G & G shall have executed and delivered the G & G
Acknowledgement and Assignment, and such other documents as the Agent shall have
deemed necessary and appropriate.
(g) The Agent shall have received:
(i) acknowledgment copies of proper financing
statements, duly filed on or before the Closing Date under the UCC of all
jurisdictions that the Agent may deem necessary or desirable in order to perfect
the Agent's Lien; and
(ii) duly executed UCC-3 Termination Statements
and such other instruments, in form and substance satisfactory to the Agent, as
shall be necessary to terminate and satisfy all Liens on the Property of the
Borrower and its Subsidiaries except Permitted Liens.
(h) The Borrower shall have paid all fees and expenses of
the Agent and the Attorney Costs incurred in connection with any of the Loan
Documents and the transactions contemplated thereby to the extent invoiced.
(i) The Agent shall have received evidence, in form,
scope, and substance, reasonably satisfactory to the Agent, of all insurance
coverage as required by this Agreement.
(j) The Agent and the Lenders shall have had an
opportunity, if they so choose, to examine the books of account and other
records and files of the Borrower and to make copies thereof, and to conduct a
pre-closing audit which shall include, without limitation, verification of
Inventory, Accounts, and the Borrowing Base, and the results of such examination
and audit shall have been satisfactory to the Agent and the Lenders in all
respects.
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(k) The Agent shall have received an assignment and/or
endorsement, as applicable, of the Borrower's rights under (i) the Pabst Brewing
Company Notes, and (ii) the Intercompany Note, all in form and content
satisfactory to the Agent.
(l) The Agent shall have received evidence satisfactory
to the Agent that the terms of this Agreement and the other Loan Documents are
not in violation of or contrary to the provisions of any other document to which
the Borrower or any Subsidiary is a party or of which they are bound, including
without limitation, the Senior Note Indentures.
(m) The Agent shall have received no offset letters from
Anheuser-Xxxxx, Incorporated and Longhorn Glass Manufacturing, L.P., acceptable
in form and content to the Agent.
(n) The Agent shall have entered into a second amendment
to the Intercreditor Agreement making the Agent a party to the Intercreditor
Agreement for the benefit of the Lenders on terms and conditions acceptable to
the Agent and the Lenders.
(o) The Agent shall have received evidence that the
Intercompany Agreement shall have been restated as of the closing date.
(p) All proceedings taken in connection with the
execution of this Agreement, all other Loan Documents and all documents and
papers relating thereto shall be satisfactory in form, scope, and substance to
the Agent and the Lenders.
(q) All documents relating to and including the Master
ISDA Agreement shall have been executed and delivered to Bank of America.
(r) The Agent shall have received such other documents
and deliveries as the Agent shall deem necessary and appropriate.
The acceptance by the Borrower of any Loans made or Letters of Credit
issued on the Closing Date shall be deemed to be a representation and warranty
made by the Borrower to the effect that all of the conditions precedent to the
making of such Loans or the issuance of such Letters of Credit have been
satisfied, with the same effect as delivery to the Agent and the Lenders of a
certificate signed by a Responsible Officer of the Borrower, dated the Closing
Date, to such effect.
Execution and delivery to the Agent by a Lender of a counterpart of
this Agreement shall be deemed confirmation by such Lender that (i) all
conditions precedent in this Section 10.1 have been fulfilled to the
satisfaction of such Lender, (ii) the decision of such Lender to execute and
deliver to the Agent an executed counterpart of this Agreement was made by such
Lender independently and without reliance on the Agent or any other Lender as to
the satisfaction of any condition precedent set forth in this Section 10.1, and
(iii) all documents sent to such Lender for approval consent, or satisfaction
were acceptable to such Lender.
10.2 Conditions Precedent to Each Loan. The obligation of the
Lenders to make each Loan, including the initial Revolving Loans on the Closing
Date and the obligation of the Agent
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to cause the Letter of Credit Issuer to issue any Letter of Credit shall be
subject to the further conditions precedent that on and as of the date of any
such extension of credit:
(a) the following statements shall be true, and the
acceptance by the Borrower of any extension of credit shall be deemed to be a
statement to the effect set forth in clauses (i) and (ii), with the same effect
as the delivery to the Agent and the Lenders of a certificate signed by a
Responsible Officer, dated the date of such extension of credit, stating that:
(i) the representations and warranties contained
in this Agreement and the other Loan Documents are correct in all material
respects on and as of the date of such extension of credit as though made on and
as of such date, other than any such representation or warranty which relates to
a specified prior date and except to the extent the Agent and the Lenders have
been notified by the Borrower that any representation or warranty is not correct
and the Required Lenders have explicitly waived in writing compliance with such
representation or warranty; and
(ii) no event has occurred and is continuing, or
would result from such extension of credit, which constitutes a Default or an
Event of Default; and
(b) the amount of the Borrowing Base shall be sufficient
to make such Revolving Loans or issue such Letters of Credit without exceeding
the Availability, provided, however, that the foregoing conditions precedent are
not conditions to each Lender participating in or reimbursing the Bank or the
Agent for such Lenders' Pro Rata Share of any Non-Ratable Loan or Agent Advance
made in accordance with the provisions of Sections 2.2(h), (i) and (j).
ARTICLE 11
DEFAULT; REMEDIES
11.1 Events of Default. It shall constitute an event of default
("Event of Default") if any one or more of the following shall occur for any
reason:
(a) any failure by the Borrower to pay the principal of
or interest or premium on any of the Obligations or any fee or other amount
owing hereunder when due, whether upon demand or otherwise;
(b) any representation or warranty made or deemed made by
the Borrower in this Agreement or by the Borrower or any of its Subsidiaries in
any of the other Loan Documents, any Financial Statement, or any certificate
furnished by the Borrower or any of its Subsidiaries at any time to the Agent or
any Lender shall prove to be untrue in any material respect as of the date on
which made, deemed made, or furnished;
(c) any default shall occur in the observance or
performance of any of the covenants and agreements contained in this Agreement,
any other Loan Documents, or any other agreement entered into at any time to
which the Borrower or any Subsidiary and the Agent or any Lender are party
(including in respect of any Bank Products), or if any such agreement or
document shall terminate (other than in accordance with its terms or the terms
hereof or with the
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written consent of the Agent and the Required Lenders) or become void or
unenforceable, without the written consent of the Agent and the Required
Lenders;
(d) default shall occur with respect to any one or more
obligations constituting Debt For Borrowed Money (other than the Obligations) of
the Borrower or any of its Subsidiaries in an aggregate outstanding principal
amount which exceeds $5,000,000, or under any one or more agreements or
instruments under or pursuant to which any such Debt For Borrowed Money may have
been issued, created, assumed, or guaranteed by the Borrower or any of its
Subsidiaries, and such default shall continue for more than the period of grace,
if any, therein specified, if the effect thereof (with or without the giving of
notice or further lapse of time or both) is to accelerate, or to permit the
holders of any such Debt For Borrowed Money to accelerate, the maturity of any
such Debt For Borrowed Money; or any such Debt For Borrowed Money shall be
declared due and payable or be required to be prepaid (other than by a regularly
scheduled required prepayment) prior to the stated maturity thereof;
(e) the Borrower or any of its Subsidiaries shall (i)
file a voluntary petition in bankruptcy or file a voluntary petition or an
answer or otherwise commence any action or proceeding seeking reorganization,
arrangement or readjustment of its debts or for any other relief under the
federal Bankruptcy Code, as amended, or under any other bankruptcy or insolvency
act or law, state or federal, now or hereafter existing, or consent to, approve
of, or acquiesce in, any such petition, action or proceeding; (ii) apply for or
acquiesce in the appointment of a receiver, assignee, liquidator, sequestrator,
custodian, monitor, trustee or similar officer for it or for all or any part of
its property; (iii) make an assignment for the benefit of creditors; or (iv) be
unable generally to pay its debts as they become due;
(f) an involuntary petition or proposal shall be filed or
an action or proceeding otherwise commenced seeking reorganization, arrangement,
consolidation or readjustment of the debts of the Borrower or any of its
Subsidiaries or for any other relief under the federal Bankruptcy Code, as
amended, or under any other bankruptcy or insolvency act or law, state or
federal, now or hereafter existing;
(g) a receiver, assignee, liquidator, sequestrator,
custodian, monitor, trustee or similar officer for the Borrower or any of its
Subsidiaries or for all or any part of its property shall be appointed or a
warrant of attachment, execution or similar process shall be issued against any
part of the property of the Borrower or any of its Subsidiaries;
(h) the Borrower or any of its Subsidiaries shall file a
certificate of dissolution under applicable state law or shall be liquidated,
dissolved or wound-up or shall commence or have commenced against it any action
or proceeding for dissolution, winding-up or liquidation, or shall take any
corporate action in furtherance thereof;
(i) all or any material part of the property of the
Borrower or any of its Subsidiaries shall be nationalized, expropriated or
condemned, seized or otherwise appropriated, or custody or control of such
property or of the Borrower or such Subsidiary shall be assumed by any
Governmental Authority or any court of competent jurisdiction at the instance of
any Governmental Authority, except where contested in good faith by proper
proceedings diligently pursued where a stay of enforcement is in effect;
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(j) any Guaranty of the Obligations shall be terminated,
revoked or declared void or invalid;
(k) one or more judgments, orders, decrees or arbitration
awards is entered against the Borrower involving in the aggregate liability (to
the extent not covered by independent third-party insurance as to which the
insurer does not dispute coverage) as to any single or related or unrelated
series of transactions, incidents or conditions, of $2,500,000 or more, and the
same shall remain unsatisfied, unvacated and unstayed pending appeal for a
period of thirty (30) days after the entry thereof;
(l) any loss, theft, damage or destruction of any item or
items of Collateral or other property of the Borrower or any Subsidiary occurs
which could reasonably be expected to cause a Material Adverse Effect and is not
adequately covered by insurance;
(m) there occurs a Material Adverse Effect;
(n) there is filed against the Borrower or any of its
Subsidiaries any action, suit or proceeding under any federal or state
racketeering statute (including the Racketeer Influenced and Corrupt
Organization Act of 1970), which action, suit or proceeding (i) is not dismissed
within one hundred twenty (120) days, and (ii) could reasonably be expected to
result in the confiscation or forfeiture of any material portion of the
Collateral;
(o) for any reason other than the failure of the Agent to
take any action available to it to maintain perfection of the Agent's Liens,
pursuant to the Loan Documents, any Loan Document ceases to be in full force and
effect or any Lien with respect to any material portion of the Collateral
intended to be secured thereby ceases to be, or is not, valid, perfected and
prior to all other Liens (other than Permitted Liens) or is terminated, revoked
or declared void;
(p) (i) an ERISA Event shall occur with respect to a
Pension Plan or Multi-employer Plan which (1) has resulted or results in
liability of the Borrower or any ERISA Affiliate under Title IV of ERISA to the
Pension Plan, Multi-employer Plan, or the PBGC in an aggregate amount in excess
of $1,000,000, or (2) could reasonably be expected to result in a Material
Adverse Effect; (ii) the aggregate amount of Unfunded Pension Liability among
all Pension Plans determined as of January 1 of each calendar year exceeds
$70,000,000; (iii) the Borrower or any ERISA Affiliate fails to pay when due,
after expiration of any applicable extension, any installment or annual payment
which is required to be made on behalf of any Pension Plan to meet its minimum
funding Obligations under any applicable Code or ERISA with respect to each such
Pension Plan; or (iv) the Borrower or any ERISA Affiliate shall fail to pay when
due, after the expiration of any applicable grace period, any installment
payment with respect to its withdrawal liability under Section 4201 of ERISA
under a Multi-employer Plan in an aggregate amount in excess of $1,000,000;
(q) there occurs a Change of Control; or
(r) an Event of Default occurs under any documents
evidencing or securing the Other Senior Debt.
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11.2 Remedies. (a) If a Default or an Event of Default exists, the
Agent may, in its discretion, and shall, at the direction of the Required
Lenders, do one or more of the following at any time or times and in any order,
without notice to or demand on the Borrower: (i) reduce the Maximum Revolver
Amount, or the advance rates against Eligible Accounts and/or Eligible Inventory
used in computing the Borrowing Base, or reduce one or more of the other
elements used in computing the Borrowing Base; (ii) restrict the amount of or
refuse to make Revolving Loans; and (iii) restrict or refuse to provide Letters
of Credit or Credit Support. If an Event of Default exists, the Agent shall, at
the direction of the Required Lenders, do one or more of the following, in
addition to the actions described in the preceding sentence, at any time or
times and in any order, without notice to or demand on the Borrower: (A)
terminate the Commitments and this Agreement; (B) declare any or all Obligations
to be immediately due and payable; provided, however, that upon the occurrence
of any Event of Default described in Sections 11.1(e), 11.1(f), 11.1(g), or
11.1(h), the Commitments shall automatically and immediately expire and all
Obligations shall automatically become immediately due and payable without
notice or demand of any kind; and (C) pursue its other rights and remedies under
the Loan Documents and applicable law.
(b) If an Event of Default has occurred and is
continuing: (i) the Agent shall have for the benefit of the Lenders, in addition
to all other rights of the Agent and the Lenders, the rights and remedies of a
secured party under the UCC; (ii) the Agent may, at any time, take possession of
the Collateral and keep it on the Borrower's premises, at no cost to the Agent
or any Lender, or remove any part of it to such other place or places as the
Agent may desire, or the Borrower shall, upon the Agent's demand, at the
Borrower's cost, assemble the Collateral and make it available to the Agent at a
place reasonably convenient to the Agent; and (iii) the Agent may sell and
deliver any Collateral at public or private sales, for cash, upon credit or
otherwise, at such prices and upon such terms as the Agent deems advisable, in
its sole discretion, and may, if the Agent deems it reasonable, postpone or
adjourn any sale of the Collateral by an announcement at the time and place of
sale or of such postponed or adjourned sale without giving a new notice of sale.
Without in any way requiring notice to be given in the following manner, the
Borrower agrees that any notice by the Agent of sale, disposition or other
intended action hereunder or in connection herewith, whether required by the UCC
or otherwise, shall constitute reasonable notice to the Borrower if such notice
is mailed by registered or certified mail, return receipt requested, postage
prepaid, or is delivered personally against receipt, at least five (5) Business
Days prior to such action to the Borrower's address specified in or pursuant to
Section 15.8. If any Collateral is sold on terms other than payment in full at
the time of sale, no credit shall be given against the Obligations until the
Agent or the Lenders receive payment, and if the buyer defaults in payment, the
Agent may resell the Collateral without further notice to the Borrower. In the
event the Agent seeks to take possession of all or any portion of the Collateral
by judicial process, the Borrower irrevocably waives: (A) the posting of any
bond, surety or security with respect thereto which might otherwise be required;
(B) any demand for possession prior to the commencement of any suit or action to
recover the Collateral; and (C) any requirement that the Agent retain possession
and not dispose of any Collateral until after trial or final judgment. The
Borrower agrees that except to the extent, if any, otherwise provided in the
Intercreditor Agreement, the Agent has no obligation to preserve rights to the
Collateral or marshal any Collateral for the benefit of any Person. The Agent is
hereby granted a license to the extent that the Borrower is permitted to grant
such license, or other right to use, without charge, the Borrower's labels,
patents, copyrights, name, trade secrets, trade names, trademarks,
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and advertising matter, or any similar property, in completing production of,
advertising or selling any Collateral, and the Borrower's rights under all
licenses and all franchise agreements shall inure to the Agent's benefit for
such purpose. The proceeds of sale shall be applied first to all expenses of
sale, including attorneys' fees, and then to the Obligations. The Agent will
return any excess to the Borrower and the Borrower shall remain liable for any
deficiency.
(c) If an Event of Default occurs, the Borrower hereby
waives all rights to notice and hearing prior to the exercise by the Agent of
the Agent's rights to repossess the Collateral without judicial process or to
reply, attach or levy upon the Collateral without notice or hearing.
ARTICLE 12
TERM AND TERMINATION
12.1 Term and Termination. The term of this Agreement shall end on
the Stated Termination Date. The Agent upon direction from the Required Lenders
may terminate this Agreement without notice upon the occurrence of an Event of
Default. Upon the effective date of termination of this Agreement for any reason
whatsoever, all Obligations (including all unpaid principal, accrued and unpaid
interest and any early termination or prepayment fees or penalties) shall become
immediately due and payable and the Borrower shall immediately arrange for the
cancellation and return of Letters of Credit then outstanding. Notwithstanding
the termination of this Agreement, until all Obligations are indefeasibly paid
and performed in full in cash, the Borrower shall remain bound by the terms of
this Agreement and shall not be relieved of any of its Obligations hereunder,
and the Agent and the Lenders shall retain all their rights and remedies
hereunder or under any other Loan Document (including the Agent's Liens in and
all rights and remedies with respect to all then existing and after-arising
Collateral).
ARTICLE 13
AMENDMENTS; WAIVERS; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS
13.1 Amendments and Waivers. No amendment or waiver of any
provision of this Agreement or any other Loan Document, and no consent with
respect to any departure by the Borrower therefrom, shall be effective unless
the same shall be in writing and signed by the Required Lenders (or by the Agent
at the written request of the Required Lenders) and the Borrower and then any
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, however, that no such waiver,
amendment, or consent shall, unless in writing and signed by all the Lenders and
the Borrower and acknowledged by the Agent, do any of the following:
(a) increase or extend the Commitment of any Lender;
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(b) postpone or delay any date fixed by this Agreement or
any other Loan Document for any payment of principal, interest, fees or other
amounts due to the Lenders (or any of them) hereunder or under any other Loan
Document;
(c) reduce the principal of, or the rate of interest
specified herein on any Loan, or any fees or other amounts payable hereunder or
under any other Loan Document;
(d) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans which is required for the Lenders
or any of them to take any action hereunder;
(e) increase any of the percentages set forth in the
definition of the Borrowing Base;
(f) amend this Section or any provision of this Agreement
providing for consent or other action by all of the Lenders;
(g) release Collateral other than as permitted by Section
14.12;
(h) change the definitions of "Required Lenders" or
"Majority Lenders"; or
(i) increase the Maximum Revolver Amount, the Maximum
Inventory Loan, and Unused Letter of Credit Subfacility;
provided, however, the Agent may, in its sole discretion and notwithstanding the
limitations contained in clauses (e) and (i) above and any other terms of this
Agreement, make Revolving Loans (including Agent Advances) in an amount not to
exceed ten percent (10%) of the Borrowing Base at the time of such Revolving
Loan or Agent Advance and, provided further, that no amendment, waiver or
consent shall, unless in writing and signed by the Agent, affect the rights or
duties of the Agent under this Agreement or any other Loan Document.
13.2 Assignments; Participations.
(a) Any Lender may, with the written consent of the Agent
(which consent shall not be unreasonably withheld), assign and delegate to one
or more Eligible Assignees (provided that no consent of the Agent shall be
required in connection with any assignment and delegation by a Lender to an
Affiliate of such Lender) (each an "Assignee") all, or any ratable part of all,
of the Loans, the Commitments and the other rights and obligations of such
Lender hereunder, in a minimum amount of $5,000,000 (provided that, unless an
assignor Lender has assigned and delegated all of its Loans and Commitments, no
such assignment and/or delegation shall be permitted unless, after giving effect
thereto, such assignor Lender retains a Commitment in a minimum amount of
$5,000,000); provided, however, that the Borrower and the Agent may continue to
deal solely and directly with such Lender in connection with the interest so
assigned to an Assignee until (i) written notice of such assignment, together
with payment instructions, addresses and related information with respect to the
Assignee, shall have been given to the Borrower and the Agent by such Lender and
the Assignee; (ii) such Lender and its Assignee shall have delivered to the
Borrower and the Agent an Assignment and Acceptance in the form
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of Exhibit E ("Assignment and Acceptance"); and (iii) the assignor Lender or
Assignee has paid to the Agent a processing fee in the amount of $3,000.
(b) From and after the date that the Agent notifies the
assignor Lender that it has received an executed Assignment and Acceptance and
payment of the above-referenced processing fee, (i) the Assignee thereunder
shall be a party hereto and, to the extent that rights and obligations,
including, but not limited to, the obligation to participate in Letters of
Credit and Credit Support have been assigned to it pursuant to such Assignment
and Acceptance, shall have the rights and obligations of a Lender under the Loan
Documents, and (ii) the assignor Lender shall, to the extent that rights and
obligations hereunder and under the other Loan Documents have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and 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).
(c) By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the Assignee thereunder confirm
to and agree with each other and the other parties hereto as follows: (i) other
than as provided in such Assignment and Acceptance, such assigning 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, genuineness,
sufficiency or value of this Agreement or any other Loan Document furnished
pursuant hereto or the attachment, perfection, or priority of any Lien granted
by the Borrower to the Agent or any Lender in the Collateral; (ii) such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under this
Agreement or any other Loan Document furnished pursuant hereto; (iii) such
Assignee confirms that it has received a copy of this Agreement, together with
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
assigning 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 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, including the
discretionary rights and incidental power, 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.
(d) Immediately upon satisfaction of the requirements of
Section 13.2(a), this Agreement shall be deemed to be amended to the extent, but
only to the extent, necessary to reflect the addition of the Assignee and the
resulting adjustment of the Commitments arising therefrom. The Commitment
allocated to each Assignee shall reduce such Commitments of the assigning Lender
pro tanto.
(e) Any Lender may at any time sell to one or more
commercial banks, financial institutions, or other Persons not Affiliates of the
Borrower (a "Participant")
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participating interests in any Loans, the Commitment of that Lender and the
other interests of that Lender (the "originating Lender") hereunder and under
the other Loan Documents; provided, however, that (i) the originating Lender's
obligations under this Agreement shall remain unchanged, (ii) the originating
Lender shall remain solely responsible for the performance of such obligations,
(iii) the Borrower and the Agent shall continue to deal solely and directly with
the originating Lender in connection with the originating Lender's rights and
obligations under this Agreement and the other Loan Documents, and (iv) no
Lender shall transfer or grant any participating interest under which the
Participant has rights to approve any amendment to, or any consent or waiver
with respect to, this Agreement or any other Loan Document, and all amounts
payable by the Borrower hereunder shall be determined as if such Lender had not
sold such participation; except that, if amounts outstanding under this
Agreement are due and unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall be deemed to have the right of set-off in respect of its participating
interest in amounts owing under this Agreement to the same extent and subject to
the same limitation as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement.
(f) Notwithstanding any other provision in this
Agreement, any Lender may at any time create a security interest in, or pledge,
all or any portion of its rights under and interest in this Agreement in favor
of any Federal Reserve Bank in accordance with Regulation A of the FRB or U.S.
Treasury Regulation 31 CFR ss.203.14, and such Federal Reserve Bank may enforce
such pledge or security interest in any manner permitted under applicable law.
ARTICLE 14
THE AGENT
14.1 Appointment and Authorization. Each Lender hereby designates
and appoints Bank as its Agent under this Agreement and the other Loan Documents
and each Lender hereby irrevocably authorizes the Agent to take such action on
its behalf under the provisions of this Agreement and each other Loan Document
and to exercise such powers and perform such duties as are expressly delegated
to it by the terms of this Agreement or any other Loan Document, including the
power to bind the Lenders to the extent permitted herein, together with such
powers as are reasonably incidental thereto. The Agent agrees to act as such on
the express conditions contained in this Article 14. The provisions of this
Article 14 are solely for the benefit of the Agent and the Lenders and the
Borrower shall have no rights as a third party beneficiary of any of the
provisions contained herein. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall the Agent have or be deemed to have any fiduciary relationship
with any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Agent. Without limiting the generality
of the foregoing sentence, the use of the term "agent" in this Agreement with
reference to the Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between
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independent contracting parties. Except as expressly otherwise provided in this
Agreement, the Agent shall have and may use its sole discretion with respect to
exercising or refraining from exercising any discretionary rights or taking or
refraining from taking any actions which the Agent is expressly entitled to take
or assert under this Agreement and the other Loan Documents, including (a) the
determination of the applicability of ineligibility criteria with respect to the
calculation of the Borrowing Base, (b) the making of Agent Advances pursuant to
Section 2.2(i), and (c) the exercise of remedies pursuant to Section 11.2, and
any action so taken or not taken shall be deemed consented to by the Lenders.
14.2 Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects as
long as such selection was made without gross negligence or willful misconduct.
14.3 Liability of the Agent. None of the Agent-Related Persons
shall (i) be liable for any action taken or omitted to be taken by any of them
under or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct), or (ii) be responsible in any manner to any of the Lenders for any
recital, statement, representation or warranty made by the Borrower or any
Subsidiary or Affiliate of the Borrower, or any officer thereof, contained in
this Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Agent under or in connection with, this Agreement or any other Loan Document, or
the validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of the Borrower or any
other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Lender
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrower or any
of the Borrower's Subsidiaries or Affiliates.
14.4 Reliance by the Agent. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to the Borrower), independent accountants and other experts selected by the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action. The
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the Required Lenders (or all of the Lenders if so required
by Section 13.1) and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Lenders.
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14.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, unless
the Agent shall have received written notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default." The Agent will notify the
Lenders of its receipt of any such notice. The Agent shall take such action with
respect to such Default or Event of Default as may be requested by the Majority
Lenders in accordance with Section 11; provided, however, that unless and until
the Agent has received any such request, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable.
14.6 Credit Decision. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Borrower and its Affiliates, shall be deemed to constitute any representation or
warranty by any Agent-Related Person to any Lender. Each Lender represents to
the Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Borrower and its Affiliates, and all applicable bank regulatory laws relating to
the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Borrower. Each Lender also represents
that it will, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly herein required to be furnished to the Lenders by the Agent,
the Agent shall not have any duty or responsibility to provide any Lender with
any credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of the Borrower
which may come into the possession of any of the Agent-Related Persons.
14.7 Indemnification. Whether or not the transactions contemplated
hereby are consummated, the Lenders shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Borrower and without limiting the obligation of the Borrower to do so), pro
rata, from and against any and all Indemnified Liabilities as such term is
defined in Section 15.11; provided, however, that no Lender shall be liable for
the payment to the Agent-Related Persons of any portion of such Indemnified
Liabilities resulting solely from such Person's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender shall reimburse the
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that the Agent is not reimbursed for such expenses by or on behalf
of the Borrower. The undertaking in this Section shall survive the payment of
all Obligations hereunder and the resignation or replacement of the Agent.
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14.8 The Agent in Individual Capacity. The Bank and its Affiliates
may make loans to, issue letters of credit for the account of, accept deposits
from, acquire equity interests in and generally engage in any kind of banking,
trust, financial advisory, underwriting or other business with the Borrower and
its Subsidiaries and Affiliates as though the Bank were not the Agent hereunder
and without notice to or consent of the Lenders. The Lenders acknowledge that,
pursuant to such activities, the Bank or its Affiliates may receive information
regarding the Borrower or its Affiliates (including information that may be
subject to confidentiality obligations in favor of the Borrower or such
Subsidiary) and acknowledge that the Agent and the Bank shall be under no
obligation to provide such information to them. With respect to its Loans, the
Bank shall have the same rights and powers under this Agreement as any other
Lender and may exercise the same as though it were not the Agent, and the terms
"Lender" and "Lenders" include the Bank in its individual capacity.
14.9 Successor Agent. The Agent may resign as the Agent upon 30
days notice to the Lenders and the Borrower, such resignation to be effective
upon the acceptance of a successor agent to its appointment as the Agent. In the
event the Bank sells all of its Commitment and Revolving Loans as part of a
sale, transfer or other disposition by the Bank of substantially all of its loan
portfolio, the Bank shall resign as the Agent and such purchaser or transferee
shall become the successor Agent hereunder. If the Agent resigns under this
Agreement, subject to the proviso in the preceding sentence, the Required
Lenders shall appoint from among the Lenders a successor agent for the Lenders.
If no successor agent is appointed prior to the effective date of the
resignation of the Agent, the Agent may appoint, after consulting with the
Lenders and the Borrower, a successor agent from among the Lenders. Upon the
acceptance of its appointment as successor agent hereunder, such successor agent
shall succeed to all the rights, powers and duties of the retiring Agent and the
term "Agent" shall mean such successor agent and the retiring Agent's
appointment, powers and duties as the Agent shall be terminated. After any
retiring Agent's resignation hereunder as Agent, the provisions of this Article
14 shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was the Agent under this Agreement. If no successor Agent has
accepted appointment as the Agent by the date which is thirty (30) days
following a retiring Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become effective and the Lenders shall
perform all of the duties of the Agent hereunder until such time, if any, as the
Lenders appoint a successor Agent as provided for above. Notwithstanding the
foregoing, however, Bank of America may not be removed as the Agent at the
request of the Lenders unless Bank of America shall also simultaneously be
replaced as Letter of Credit Issuer and the Agent under the Loan Documents
pursuant to documentation in form and substance reasonably satisfactory to Bank
of America.
14.10 Withholding Tax. (a) If any Lender is a "foreign corporation,
partnership or trust" within the meaning of the Code and such Lender claims
exemption from, or a reduction of, U.S. withholding tax under Sections 1441 or
1442 of the Code, such Lender agrees with and in favor of the Agent, to deliver
to the Agent:
(i) if such Lender claims an exemption from, or
a reduction of, withholding tax under a United States of America tax treaty,
properly completed IRS Forms 1001 and W-8 before the payment of any interest in
the first calendar year and before the payment of any interest in each third
succeeding calendar year during which interest may be paid under this Agreement;
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(ii) if such Lender claims that interest paid
under this Agreement is exempt from United States of America withholding tax
because it is effectively connected with a United States of America trade or
business of such Lender, two properly completed and executed copies of IRS Form
4224 before the payment of any interest is due in the first taxable year of such
Lender and in each succeeding taxable year of such Lender during which interest
may be paid under this Agreement, and IRS Form W-9; and
(iii) such other form or forms as may be required
under the Code or other laws of the United States of America as a condition to
exemption from, or reduction of, United States of America withholding tax.
Such Lender agrees to promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.
(b) If any Lender claims exemption from, or reduction of,
withholding tax under a United States of America tax treaty by providing IRS
Form 1001 and such Lender sells, assigns, grants a participation in, or
otherwise transfers all or part of the Obligations owing to such Lender, such
Lender agrees to notify the Agent of the percentage amount in which it is no
longer the beneficial owner of Obligations of the Borrower to such Lender. To
the extent of such percentage amount, the Agent will treat such Lender's IRS
Form 1001 as no longer valid.
(c) If any Lender claiming exemption from United States
of America withholding tax by filing IRS Form 4224 with the Agent sells,
assigns, grants a participation in, or otherwise transfers all or part of the
Obligations owing to such Lender, such Lender agrees to undertake sole
responsibility for complying with the withholding tax requirements imposed by
Sections 1441 and 1442 of the Code.
(d) If any Lender is entitled to a reduction in the
applicable withholding tax, the Agent may withhold from any interest payment to
such Lender an amount equivalent to the applicable withholding tax after taking
into account such reduction. If the forms or other documentation required by
subsection (a) of this Section are not delivered to the Agent, then the Agent
may withhold from any interest payment to such Lender not providing such forms
or other documentation an amount equivalent to the applicable withholding tax.
(e) If the IRS or any other Governmental Authority of the
United States of America or other jurisdiction asserts a claim that the Agent
did not properly withhold tax from amounts paid to or for the account of any
Lender (because the appropriate form was not delivered, was not properly
executed, or because such Lender failed to notify the Agent of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason) such Lender shall indemnify the Agent
fully for all amounts paid, directly or indirectly, by the Agent as tax or
otherwise, including penalties and interest, and including any taxes imposed by
any jurisdiction on the amounts payable to the Agent under this Section,
together with all costs and expenses (including Attorney Costs). The obligation
of the Lenders under this subsection shall survive the payment of all
Obligations and the resignation or replacement of the Agent.
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14.11 Co-Agents. None of the Lenders identified on the facing page
or signature pages of this Agreement as a "co-agent" shall have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than those applicable to all of the Lenders as such. Without limiting the
foregoing, none of the Lenders so identified as a "co-agent" shall have or be
deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.
14.12 Collateral Matters.
(a) The Lenders hereby irrevocably authorize the Agent,
at its option and in its sole discretion, to release any Agent's Lien upon any
Collateral (i) upon the termination of the Commitments and payment and
satisfaction in full by the Borrower of all Loans and reimbursement obligations
in respect of Letters of Credit and Credit Support, and the termination of all
outstanding Letters of Credit (whether or not any of such obligations are due)
and all other Obligations; (ii) constituting Collateral being sold or disposed
of if the Borrower certifies to the Agent that the sale or disposition is made
in compliance with Section 9.9 (and the Agent may rely conclusively on any such
certificate, without further inquiry); or (iii) constituting Collateral in which
the Borrower owned no interest at the time the Lien was granted or at any time
thereafter. Except as provided above, the Agent will not release any of the
Agent's Liens without the prior written authorization of the Lenders; provided
that the Agent may, in its discretion, release the Agent's Liens on the Pabst
Brewing Company Notes without the prior written authorization of the Lenders. In
addition, the Agent may, in its discretion, release the Agent's Liens on other
Collateral valued in the aggregate not in excess of (i) $1,000,000 during any
one Fiscal Year period and (ii) $2,000,000 in the aggregate during the term of
this Agreement, without the prior written authorization of the Lenders. Without
the prior written authorization of the Lenders and in accordance with the
release provisions of the G & G Guaranty and Pledge, the Agent shall release the
Consumers Packaging capital stock pledged pursuant to the G & G Guaranty and
Pledge. Upon request by the Agent or the Borrower at any time, the Lenders will
confirm in writing the Agent's authority to release any Agent's Liens upon
particular types or items of Collateral pursuant to this Section 14.12.
(b) Upon receipt by the Agent of any authorization to the
extent required pursuant to Section 14.12(a) from the Lenders of the Agent's
authority to release any Agent's Liens upon particular types or items of
Collateral, and upon at least five (5) Business Days prior written request by
the Borrower, the Agent shall (and is hereby irrevocably authorized by the
Lenders to) execute such documents as may be necessary to evidence the release
of the Agent's Liens upon such Collateral; provided, however, that (i) the Agent
shall not be required to execute any such document on terms which, in the
Agent's opinion, would expose the Agent to liability or create any obligation or
entail any consequence other than the release of such Liens without recourse or
warranty, and (ii) such release shall not in any manner discharge, affect or
impair the Obligations or any Liens (other than those expressly being released)
upon (or obligations of the Borrower in respect of) all interests retained by
the Borrower, including the proceeds of any sale, all of which shall continue to
constitute part of the Collateral.
(c) The Agent shall have no obligation whatsoever to any
of the Lenders to assure that the Collateral exists or is owned by the Borrower
or is cared for, protected or insured
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or has been encumbered, or that the Agent's Liens have been properly or
sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or to exercise at all or in any particular
manner or under any duty of care, disclosure or fidelity, or to continue
exercising, any of the rights, authorities and powers granted or available to
the Agent pursuant to any of the Loan Documents, it being understood and agreed
that in respect of the Collateral, or any act, omission or event related
thereto, the Agent may act in any manner it may deem appropriate, in its sole
discretion given the Agent's own interest in the Collateral in its capacity as
one of the Lenders and that the Agent shall have no other duty or liability
whatsoever to any Lender as to any of the foregoing.
14.13 Restrictions on Actions by the Lenders; Sharing of Payments.
(a) Each of the Lenders agrees that it shall not, without the express consent of
all of the Lenders, and that it shall, to the extent it is lawfully entitled to
do so, upon the request of all of the Lenders, set off against the Obligations,
any amounts owing by such Lender to the Borrower or any accounts of the Borrower
now or hereafter maintained with such Lender. Each of the Lenders further agrees
that it shall not, unless specifically requested to do so by the Agent, take or
cause to be taken any action to enforce its rights under this Agreement or
against the Borrower, including the commencement of any legal or equitable
proceedings, to foreclose any Lien on, or otherwise enforce any security
interest in, any of the Collateral.
(b) If at any time or times any Lender shall receive (i)
by payment, foreclosure, setoff or otherwise, any proceeds of Collateral or any
payments with respect to the Obligations of the Borrower to such Lender arising
under, or relating to, this Agreement or the other Loan Documents, except for
any such proceeds or payments received by such Lender from the Agent pursuant to
the terms of this Agreement, or (ii) payments from the Agent in excess of such
Lender's ratable portion of all such distributions by the Agent, such Lender
shall promptly (1) turn the same over to the Agent, in kind, and with such
endorsements as may be required to negotiate the same to the Agent, or in same
day funds, as applicable, for the account of all of the Lenders and for
application to the Obligations in accordance with the applicable provisions of
this Agreement, or (2) purchase, without recourse or warranty, an undivided
interest and participation in the Obligations owed to the other Lenders so that
such excess payment received shall be applied ratably as among the Lenders in
accordance with their Pro Rata Shares; provided, however, that if all or part of
such excess payment received by the purchasing party is thereafter recovered
from it, those purchases of participations shall be rescinded in whole or in
part, as applicable, and the applicable portion of the purchase price paid
therefor shall be returned to such purchasing party, but without interest except
to the extent that such purchasing party is required to pay interest in
connection with the recovery of the excess payment.
14.14 Agency for Perfection. Each Lender hereby appoints each other
Lender as agent for the purpose of perfecting the Lenders' security interest in
assets which, in accordance with Article 9 of the UCC can be perfected only by
possession. Should any Lender (other than the Agent) obtain possession of any
such Collateral, such Lender shall notify the Agent thereof, and, promptly upon
the Agent's request therefor shall deliver such Collateral to the Agent or in
accordance with the Agent's instructions.
14.15 Payments by the Agent to the Lenders. All payments to be made
by the Agent to the Lenders shall be made by bank wire transfer or internal
transfer of immediately available
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funds to each Lender pursuant to wire transfer instructions delivered in writing
to the Agent on or prior to the Closing Date (or if such Lender is an Assignee,
on the applicable Assignment and Acceptance), or pursuant to such other wire
transfer instructions as each party may designate for itself by written notice
to the Agent. Concurrently with each such payment, the Agent shall identify
whether such payment (or any portion thereof) represents principal, premium or
interest on the Revolving Loans or otherwise.
14.16 Concerning the Collateral and the Related Loan Documents. Each
Lender authorizes and directs the Agent to enter into this Agreement and the
other Loan Documents, for the ratable benefit and obligation of the Agent and
the Lenders. Each Lender agrees that any action taken by the Agent, the Required
Lenders or the Majority Lenders, as applicable, in accordance with the terms of
this Agreement or the other Loan Documents, and the exercise by the Agent, the
Required Lenders, or the Majority Lenders, as applicable, of their respective
powers set forth therein or herein, together with such other powers that are
reasonably incidental thereto, shall be binding upon all of the Lenders.
14.17 Field Audit and Examination Reports; Disclaimer by the
Lenders. By signing this Agreement, each Lender:
(a) is deemed to have requested that the Agent furnish
such Lender, promptly after it becomes available, a copy of each field audit or
examination report (each a "Report" and collectively, "Reports") prepared by the
Agent;
(b) expressly agrees and acknowledges that neither the
Bank nor the Agent (i) makes any representation or warranty as to the accuracy
of any Report, or (ii) shall be liable for any information contained in any
Report;
(c) expressly agrees and acknowledges that the Reports
are not comprehensive audits or examinations, that the Agent or the Bank or
other party performing any audit or examination will inspect only specific
information regarding the Borrower and will rely significantly upon the
Borrower's books and records, as well as on representations of the Borrower's
personnel;
(d) agrees to keep all Reports confidential and strictly
for its internal use, and not to distribute except to its participants, or use
any Report in any other manner; and
(e) without limiting the generality of any other
indemnification provision contained in this Agreement, agrees: (i) to hold the
Agent and any such other Lender preparing a Report harmless from any action the
indemnifying Lender may take or conclusion the indemnifying Lender may reach or
draw from any Report in connection with any loans or other credit accommodations
that the indemnifying Lender has made or may make to the Borrower, or the
indemnifying Lender's participation in, or the indemnifying Lender's purchase
of, a loan or loans of the Borrower; and (ii) to pay and protect, and indemnify,
defend and hold the Agent and any such other Lender preparing a Report harmless
from and against, the claims, actions, proceedings, damages, costs, expenses and
other amounts (including Attorney Costs) incurred by the Agent and any such
other Lender preparing a Report as the direct or indirect result of any third
parties who might obtain all or part of any Report through the indemnifying
Lender.
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14.18 Relation Among the Lenders. The Lenders are not partners or
co-venturers, and no Lender shall be liable for the acts or omissions of, or
(except as otherwise set forth herein in case of the Agent) authorized to act
for, any other Lender.
14.19 Agency Fees. In addition to any fees or expenses that may
otherwise be due and payable under this Agreement, the Borrower agrees to pay to
the Agent, for the Agent's own account, an agency fee pursuant to the terms and
conditions of the Fee Letter.
ARTICLE 15
MISCELLANEOUS
15.1 No Waivers; Cumulative Remedies. No failure by the Agent or
any Lender to exercise any right, remedy, or option under this Agreement or any
present or future supplement thereto, or in any other agreement between or among
the Borrower and the Agent and/or any Lender, or delay by the Agent or any
Lender in exercising the same, will operate as a waiver thereof. No waiver by
the Agent or any Lender will be effective unless it is in writing, and then only
to the extent specifically stated. No waiver by the Agent or the Lenders on any
occasion shall affect or diminish the Agent's and each Lender's rights
thereafter to require strict performance by the Borrower of any provision of
this Agreement. The Agent and the Lenders may proceed directly to collect the
Obligations without any prior recourse to the Collateral. The Agent's and each
Lender's rights under this Agreement will be cumulative and not exclusive of any
other right or remedy which the Agent or any Lender may have.
15.2 Severability. The illegality or unenforceability of any
provision of this Agreement or any Loan Document or any instrument or agreement
required hereunder shall not in any way affect or impair the legality or
enforceability of the remaining provisions of this Agreement or any instrument
or agreement required hereunder.
15.3 Governing Law; Choice of Forum; Service of Process. (a) THIS
AGREEMENT SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PARTIES
HERETO DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE
CONFLICT OF LAWS PROVISIONS PROVIDED THAT PERFECTION ISSUES WITH RESPECT TO
ARTICLE 9 OF THE UCC MAY GIVE EFFECT TO APPLICABLE CHOICE OR CONFLICT OF LAW
RULES SET FORTH IN ARTICLE 9 OF THE UCC) OF THE STATE OF ILLINOIS; PROVIDED THAT
THE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF ILLINOIS OR OF THE UNITED STATES OF AMERICA FOR THE NORTHERN DISTRICT OF
ILLINOIS, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE BORROWER,
THE AGENT AND THE LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE BORROWER, THE
AGENT AND THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING
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ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. NOTWITHSTANDING THE FOREGOING: (1) THE AGENT AND THE LENDERS
SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER OR
ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION THE AGENT OR THE LENDERS
DEEM NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR OTHER
SECURITY FOR THE OBLIGATIONS AND (2) EACH OF THE PARTIES HERETO ACKNOWLEDGES
THAT ANY APPEALS FROM THE COURTS DESCRIBED IN THE IMMEDIATELY PRECEDING SENTENCE
MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE THOSE JURISDICTIONS.
(c) THE BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY
AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE
MADE BY REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO THE BORROWER AT
ITS ADDRESS SET FORTH IN SECTION 15.8 AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED IN THE U.S.
MAILS POSTAGE PREPAID. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF THE
AGENT OR THE LENDERS TO SERVE LEGAL PROCESS BY ANY OTHER MANNER PERMITTED BY
LAW.
15.4 WAIVER OF JURY TRIAL. THE BORROWER, THE LENDERS AND THE AGENT
EACH IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT,
THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN
ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE
PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR
ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.
THE BORROWER, THE LENDERS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE
OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE
FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY
JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR
OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION
HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
15.5 Survival of Representations and Warranties. All of the
Borrower's representations and warranties contained in this Agreement shall
survive the execution, delivery, and acceptance thereof by the parties,
notwithstanding any investigation by the Agent or the Lenders or their
respective agents.
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15.6 Other Security and Guaranties. The Agent, may, without notice
or demand and without affecting the Borrower's obligations hereunder, from time
to time: (a) take from any Person and hold collateral (other than the
Collateral) for the payment of all or any part of the Obligations and exchange,
enforce or release such collateral or any part thereof; and (b) accept and hold
any endorsement or guaranty of payment of all or any part of the Obligations and
release or substitute any such endorser or guarantor, or any Person who has
given any Lien in any other collateral as security for the payment of all or any
part of the Obligations, or any other Person in any way obligated to pay all or
any part of the Obligations.
15.7 Fees and Expenses. The Borrower agrees to pay to the Agent,
for its benefit, on demand, all costs and expenses that the Agent pays or incurs
in connection with the negotiation, preparation, syndication, consummation,
administration, enforcement, and termination of this Agreement or any of the
other Loan Documents, including: (a) Attorney Costs; (b) costs and expenses
(including attorneys' and paralegals' fees and disbursements) for any amendment,
supplement, waiver, consent, or subsequent closing in connection with the Loan
Documents and the transactions contemplated thereby; (c) costs and expenses of
lien searches; (d) taxes, fees and other charges for filing financing statements
and continuations, and other actions to perfect, protect, and continue the
Agent's Liens (including costs and expenses paid or incurred by the Agent in
connection with the consummation of this Agreement); (e) sums paid or incurred
to pay any amount or take any action required of the Borrower under the Loan
Documents that the Borrower fails to pay or take; (f) costs of appraisals,
inspections, and verifications of the Collateral, including travel, lodging, and
meals for inspections of the Collateral and the Borrower's operations by the
Agent plus the Agent's then customary charge for field examinations and audits
and the preparation of reports thereof (such charge is currently $750 per day
(or portion thereof) for each agent or employee of the Agent with respect to
each field examination or audit); (g) costs and expenses of forwarding loan
proceeds, collecting checks and other items of payment, and establishing and
maintaining Payment Accounts and lock boxes; (h) costs and expenses of
preserving and protecting the Collateral; and (i) costs and expenses (including
Attorneys' Costs) paid or incurred to obtain payment of the Obligations, enforce
the Agent's Liens, sell or otherwise realize upon the Collateral, and otherwise
enforce the provisions of the Loan Documents, or to defend any claims made or
threatened against the Agent or any Lender arising out of the transactions
contemplated hereby (including preparations for and consultations concerning any
such matters). The foregoing shall not be construed to limit any other
provisions of the Loan Documents regarding costs and expenses to be paid by the
Borrower. All of the foregoing costs and expenses shall be charged to the
Borrower's Loan Account as Revolving Loans as described in Section 4.4.
15.8 Notices. Except as otherwise provided herein, all notices,
demands and requests that any party is required or elects to give to any other
shall be in writing, or by a telecommunications device capable of creating a
written record, and any such notice shall become effective (a) upon personal
delivery thereof, including, but not limited to, delivery by overnight mail and
courier service, (b) four (4) days after it shall have been mailed by United
States mail, first class, certified or registered, with postage prepaid, or (c)
in the case of notice by such a telecommunications device, when properly
transmitted, in each case addressed to the party to be notified as follows:
If to the Agent or to the Bank:
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Bank of America, National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Portfolio Manager
Telecopy No. (000) 000-0000
with copies (other than routine correspondence) to:
Xxxxxx X. Xxxx
Jenkens & Xxxxxxxxx
000 Xxxx Xxxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telecopy No. (000) 000-0000
If to the Borrower:
Anchor Glass Container Corporation
One Anchor Plaza
0000 Xxxxxx Xxxxx Xxxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
Telecopy No. (000) 000-0000
with copies (other than routine correspondence) to:
G & G Investments, Inc.
0000 Xxxxxxx Xxxxx Xxxxxxx
Xxxxxxx Xxxx, Xxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxx
Telecopy No. (000) 000-0000
X. Xxxx May
Anchor Glass Container Corporation
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Telecopy No. (000) 000-0000
or to such other address as each party may designate for itself by like notice.
Failure or delay in delivering copies of any notice, demand, request, consent,
approval, declaration or other communication to the persons designated above to
receive copies shall not adversely affect the effectiveness of such notice,
demand, request, consent, approval, declaration or other communication.
15.9 Waiver of Notices. Unless otherwise expressly provided herein,
the Borrower waives presentment, and notice of demand or dishonor and protest as
to any instrument, notice of intent to accelerate the Obligations and notice of
acceleration of the Obligations, as well as any and all other notices to which
it might otherwise be entitled. No notice to or demand on the
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Borrower which the Agent or any Lender may elect to give shall entitle the
Borrower to any or further notice or demand in the same, similar or other
circumstances.
15.10 Binding Effect. The provisions of this Agreement shall be
binding upon and inure to the benefit of the respective representatives,
successors, and assigns of the parties hereto; provided, however, that no
interest herein may be assigned by the Borrower without prior written consent of
the Agent. The rights and benefits of the Agent and the Lenders hereunder shall,
if such Persons so agree, inure to any party acquiring any interest in the
Obligations or any part thereof.
15.11 Indemnity of the Agent and the Lenders by the Borrower.
(a) The Borrower agrees to defend, indemnify and hold the
Agent-Related Persons, and each Lender and each of its respective officers,
directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including Attorney Costs) of any kind or
nature whatsoever which may at any time (including at any time following
repayment of the Loans and the termination, resignation or replacement of the
Agent or replacement of any Lender) be imposed on, incurred by or asserted
against any such Person in any way relating to or arising out of this Agreement
or any document contemplated by or referred to herein, or the transactions
contemplated hereby, or any action taken or omitted by any such Person under or
in connection with any of the foregoing, including with respect to any
investigation, litigation or proceeding (including any Insolvency Proceeding or
appellate proceeding) related to or arising out of this Agreement, any other
Loan Document, or the Loans or the use of the proceeds thereof, whether or not
any Indemnified Person is a party thereto (all the foregoing, collectively, the
"Indemnified Liabilities"); provided, that the Borrower shall have no obligation
hereunder to any Indemnified Person with respect to Indemnified Liabilities
resulting solely from the willful misconduct or gross negligence of such
Indemnified Person. The agreements in this Section shall survive payment of all
other Obligations.
(b) The Borrower agrees to indemnify, defend and hold
harmless the Agent and the Lenders from any loss or liability directly or
indirectly arising out of the use, generation, manufacture, production, storage,
release, threatened release, discharge, disposal or presence of a hazardous
substance relating to the Borrower's operations, business or property. This
indemnity will apply whether the hazardous substance is on, under or about the
Borrower's property or operations or property leased to the Borrower. The
indemnity includes but is not limited to Attorneys Costs. The indemnity extends
to the Agent and the Lenders, their parents, Affiliates, subsidiaries and all of
their directors, officers, employees, agents, successors, attorneys and assigns.
"Hazardous substances" means any substance, material or waste that is or becomes
designated or regulated as "toxic," "hazardous," "pollutant," or "contaminant"
or a similar designation or regulation under any federal, state or local law
(whether under common law, statute, regulation or otherwise) or judicial or
administrative interpretation of such, including petroleum or natural gas. This
indemnity will survive repayment of all other Obligations.
15.12 Limitation of Liability. NO CLAIM MAY BE MADE BY THE BORROWER,
ANY LENDER OR OTHER PERSON AGAINST THE AGENT, ANY LENDER, OR THE
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AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, OR AGENTS OF ANY OF THEM FOR ANY
SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM FOR
BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT OF OR RELATED TO
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR
ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH, AND THE BORROWER
AND EACH LENDER HEREBY WAIVE, RELEASE AND AGREE NOT TO XXX UPON ANY CLAIM FOR
SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO
EXIST IN ITS FAVOR.
15.13 BTCC Credit Agreement. Upon satisfaction of all conditions
precedent to the execution and delivery of this Agreement and the initial
disbursement of one or more Loans, this Agreement with respect to the
Intercreditor Agreement shall constitute and be deemed to be a BTCC Credit
Agreement for purposes of acknowledging that this Agreement incorporates a
refunding, refinancing or replacement credit facility for the BTCC Credit
Agreement (as the term "BTCC Credit Agreement" is defined in and referred to in
the Intercreditor Agreement prior to the execution and delivery of a second
amendment thereto).
15.14 Final Agreement. This Agreement and the other Loan Documents
are intended by the Borrower, the Agent and the Lenders to be the final,
complete, and exclusive expression of the agreement between them. This Agreement
supersedes any and all prior oral or written agreements relating to the subject
matter hereof. No modification, rescission, waiver, release, or amendment of any
provision of this Agreement or any other Loan Document shall be made, except by
a written agreement signed by the Borrower and a duly authorized officer of each
of the Agent and the requisite Lenders.
15.15 Counterparts. This Agreement may be executed in any number of
counterparts, and by the Agent, each Lender and the Borrower in separate
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same agreement; signature pages may be detached
from multiple separate counterparts and attached to a single counterpart so that
all signature pages are physically attached to the same document.
15.16 Captions. The captions contained in this Agreement are for
convenience of reference only, are without substantive meaning and should not be
construed to modify, enlarge, or restrict any provision.
15.17 Right of Setoff. In addition to any rights and remedies of the
Lenders provided by law, if an Event of Default exists or the Loans have been
accelerated, each Lender is authorized at any time and from time to time,
without prior notice to the Borrower, any such notice being waived by the
Borrower 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 by, and other indebtedness at any time owing by, such Lender to or for
the credit or the account of the Borrower against any and all Obligations owing
to such Lender, now or hereafter existing, irrespective of whether or not the
Agent or such Lender shall have made demand under this Agreement or any Loan
Document and although such Obligations may be contingent or unmatured. Each
Lender agrees promptly to notify the Borrower and the Agent after any such
set-off and application made by such Lender; provided, however, that the failure
to give such
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notice shall not affect the validity of such set-off and application.
NOTWITHSTANDING THE FOREGOING, NO LENDER SHALL EXERCISE ANY RIGHT OF SET-OFF,
BANKER'S LIEN, OR THE LIKE AGAINST ANY DEPOSIT ACCOUNT OR PROPERTY OF THE
BORROWER HELD OR MAINTAINED BY SUCH LENDER WITHOUT THE PRIOR WRITTEN UNANIMOUS
CONSENT OF THE LENDERS.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have entered into this Agreement on the
date first above written.
"BORROWER"
Anchor Glass Container Corporation
By: /s/ Xxxx X. Xxxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chairman and CEO
"AGENT"
Bank of America, National Association,
as the Agent
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
"LENDERS"
Commitment: $100,000,000 Bank of America, National Association,
Pro Rata Share: 100% as a Lender
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
