EXHIBIT 99.2
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of March 25, 2002,
among XXXXXX CUSTOM PLASTICS, LLC, a Delaware limited liability company
("BORROWER"), XXXXXX HOLDINGS, LLC, a Delaware limited liability company
("HOLDINGS"), the other Credit Parties signatory hereto, GENERAL ELECTRIC
CAPITAL CORPORATION, a Delaware corporation (in its individual capacity, "GE
CAPITAL"), for itself, as Lender, and as Agent for Lenders, and the other
Lenders signatory hereto from time to time.
RECITALS
WHEREAS, Borrower, Holdings, the other credit parties signatory
thereto, the lender parties thereto (the "ORIGINAL LENDERS"), and GE Capital, as
agent for the Original Lenders, are parties to a Credit Agreement, dated as of
April 15, 1999, as amended by the First Amendment and Waiver to Credit
Agreement, dated as of October 20, 1999, the Second Amendment to Credit
Agreement, dated as of November 15, 1999, the Third Amendment to Credit
Agreement, dated as of March 24, 2000, the Fourth Amendment to Credit Agreement,
dated as of November 14, 2000, the Fifth Amendment and Waiver to Credit
Agreement, dated as of March 30, 2001, the Sixth Amendment and Waiver to Credit
Agreement dated as of August 14, 2001, the Seventh Amendment to Credit Agreement
dated as of September 29, 2001 and the Eighth Amendment to Credit Agreement,
dated as of December 28, 2001 (as so amended, the "ORIGINAL CREDIT AGREEMENT");
WHEREAS, pursuant to the Original Credit Agreement, the Original
Lenders agreed to make certain loans and other extensions of credit to Borrower
of up to $50,000,000 upon the terms and conditions set forth therein;
WHEREAS, each of the parties hereto wishes to and agrees to amend and
restate the Original Credit Agreement on the terms and conditions set forth
herein (including in order to reduce the Commitments to $32,000,000);
WHEREAS, each of Holdings and the other Credit Parties are willing to
continue to guaranty all of the obligations of Borrower to Lenders under the
Loan Documents;
WHEREAS, the Credit Parties are willing to continue to secure all of
their obligations under the Loan Documents by granting to Agent, for the benefit
of Agent and Lenders, a security interest in and lien upon all of their existing
and after-acquired personal and real property;
WHEREAS, it is the intent of the parties hereto that this Agreement
not constitute a novation of the obligations and liabilities under the Original
Credit Agreement or evidence payment of all or any of such obligations and
liabilities, that this Agreement amend and restate in its entirety the Original
Credit Agreement and that from and after the date hereof, the Original Credit
Agreement be of no further force and effect
except as to evidence the incurrence of the Obligations thereunder, the
representations and warranties made thereunder and the obligations, covenants
and liabilities of the parties thereto prior to the Closing Date; and
WHEREAS, capitalized terms used in this Agreement shall have the
meanings ascribed to them in ANNEX A. All Annexes, Disclosure Schedules,
Exhibits and other attachments (collectively, "APPENDICES") hereto, or expressly
identified to this Agreement, are incorporated herein by reference, and taken
together, shall constitute but a single agreement. These Recitals shall be
construed as part of the Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and for other good and valuable consideration,
the parties hereto agree that as of the Closing Date, the Original Credit
Agreement shall be and hereby is amended and restated in its entirety to read as
follows:
1. AMOUNT AND TERMS OF CREDIT
1.1. CREDIT FACILITIES
(a) REVOLVING CREDIT FACILITY.
(i) Subject to the terms and conditions hereof, each
Revolving Lender agrees to make available from time to time to the Borrower
until the Commitment Termination Date its Pro Rata Share of revolving credit
advances (each, a "REVOLVING CREDIT ADVANCE"). The Pro Rata Share of the
Revolving Loan of any Revolving Lender shall not at any time exceed its separate
Revolving Loan Commitment. The obligations of each Revolving Lender hereunder
shall be several and not joint. The aggregate amount of Revolving Credit
Advances outstanding shall not exceed at any time the lesser of (A) the Maximum
Amount and (B) the Revolving Borrowing Base, in each case less (x) the amount of
the Letter of Credit Obligations outstanding at such time and (y) the amount of
any Reserves which may have been established at such time by the Agent in its
reasonable credit judgment ("BORROWING AVAILABILITY"). Until the Commitment
Termination Date, Borrower may from time to time borrow, repay and reborrow
under this SECTION 1.1(a). Each Revolving Credit Advance shall be made on notice
by Borrower to the representative of Agent identified on DISCLOSURE SCHEDULE
(1.1) at the address specified thereon. Those notices must be given no later
than (1) 11:00 a.m. (New York time) on the Business Day of the proposed
Revolving Credit Advance, in the case of an Index Rate Loan, or (2) 11:00 a.m.
(New York time) on the date which is three (3) Business Days prior to the
proposed Revolving Credit Advance, in the case of a LIBOR Loan. Each such notice
(a "NOTICE OF REVOLVING CREDIT ADVANCE") must be given in writing (by telecopy
or overnight courier) substantially in the form of EXHIBIT 1.1(a)(i), and shall
include the information required in such Exhibit and such other information as
may be required by Agent. In connection with Borrower's desire to have the
Revolving Credit Advances bear interest by reference to a LIBOR Rate, Borrower
must comply with SECTION 1.5(e).
(ii) Borrower shall execute and deliver to each Revolving
Lender a note to evidence the Revolving Loan Commitment of that Revolving
Lender. Each note shall be in the principal amount of the Revolving Loan
Commitment of the applicable Revolving Lender, dated the Closing Date and
substantially in the form of EXHIBIT 1.1(a)(ii) (each a "REVOLVING NOTE" and,
collectively, the "REVOLVING NOTES"). Each Revolving Note shall represent the
obligation of Borrower to pay the amount of each Revolving Lender's Revolving
Loan Commitment or, if less, the applicable Revolving Lender's Pro Rata Share of
the aggregate unpaid principal amount of all Revolving Credit Advances to
Borrower together with interest thereon as prescribed in SECTION 1.5. The entire
unpaid balance of the Revolving Loan and all other non-contingent Obligations
shall be immediately due and payable in full in immediately available funds on
the Commitment Termination Date.
(iii) Notwithstanding anything to the contrary contained in
this Agreement, until such time as designated by Agent to Borrower in writing
(such decision to be made by Agent in its sole and absolute discretion) (A)
during any calendar week, the amount of the Revolving Credit Advances shall not
exceed the amount scheduled under the Cash Flow Budget to be paid during such
week; and (B) any of the provisions hereof requiring the Borrower to comply with
the Revolving Borrowing Base shall be inapplicable.
(b) TERM LOAN A.
(i) Subject to the terms and conditions hereof, each Term
Loan A Lender agrees to make a term loan (the collectively, the "TERM LOAN A")
on the Closing Date to Borrower in the amount of the applicable Term Loan A
Lender's Term Loan A Commitment. The obligations of each Term Loan A Lender
hereunder shall be several and not joint. Each such Term Loan A shall be
evidenced by a promissory note substantially in the form of EXHIBIT 1.1(b) (each
a "TERM LOAN A NOTE" and collectively the "TERM LOAN A NOTES"), and, except as
provided in SECTION 1.12, Borrower shall execute and deliver the Term Loan A
Notes to the applicable Term Loan A Lenders. Each Term Loan A Note shall
represent the obligation of Borrower to pay the amount of the applicable Term
Loan A Lender's Term Loan Commitment, together with interest thereon as
prescribed in SECTION 1.5.
(ii) On each date set forth below, Borrower shall repay the
principal amount of the Term Loan A in the installment set forth opposite such
date:
PAYMENT DATES INSTALLMENT AMOUNT
September, 30, 2002 $250,000
December 31, 2002 $250,000
March 31, 2003 $250,000
June 30, 2003 $250,000
September 30, 2003 $250,000
December 31, 2003 $250,000
PAYMENT DATES INSTALLMENT AMOUNT
March 31, 2004 $ 575,000
June 30, 2004 $ 575,000
September 30, 2004 $ 575,000
December 31, 2004 $ 575,000
March 31, 2005 $ 675,000
June 30, 2005 $ 675,000
September 30, 2005 $ 675,000
December 31, 2005 $ 675,000
March 31, 2006 $1,166,666.67
June 30, 2006 $1,166,666.67
The final installment due on the Scheduled Maturity Date shall be in
the amount of $1,166,666.65 or, if different, the remaining principal balance of
the Term Loan A.
(iii) Notwithstanding SECTION 1.1(b)(ii), the aggregate
outstanding principal balance of the Term Loan A shall be due and payable in
full in immediately available funds on the Commitment Termination Date, if not
sooner paid in full. No payment with respect to the Term Loan A may be
reborrowed.
(iv) Each payment of principal with respect to the Term Loan
A shall be paid to Agent for the ratable benefit of each Term Lender making a
Term Loan A, ratably in proportion to each such Term Loan A Lender's respective
Term Loan A Commitment.
(c) TERM LOAN B.
(i) Subject to the terms and conditions hereof, each Term
Loan B Lender agrees to make a term loan (collectively, the "TERM LOAN B") on
the Closing Date to Borrower in the amount of the applicable Term Loan B
Lender's Term Loan B Commitment. The obligations of each Term Loan B Lender
hereunder shall be several and not joint. Each such Term Loan B shall be
evidenced by a promissory note substantially in the form of EXHIBIT 1.1(c) (each
a "TERM LOAN B NOTE" and collectively the "TERM LOAN B NOTES"), and, except as
provided in SECTION 1.12, Borrower shall execute and deliver the Term Loan B
Notes to the applicable Term Loan B Lenders. Each Term Loan B Note shall
represent the obligation of Borrower to pay the amount of applicable Term Loan B
Lender's Term Loan Commitment, together with interest thereon as prescribed in
SECTION 1.5.
(ii) On each date set forth below, Borrower shall repay the
principal amount of the Term Loan B in the installment set forth opposite such
date:
PAYMENT DATES INSTALLMENT AMOUNT
June 30, 2002 $ 100,000
September 30, 2002 $ 100,000
December 31, 2002 $ 100,000
March 31, 2003 $ 100,000
June 30, 2003 $ 100,000
September 30, 2003 $ 100,000
December 31, 2003 $ 100,000
March 31, 2004 $ 250,000
June 30, 2004 $ 250,000
September 30, 2004 $ 250,000
December 31, 2004 $ 250,000
March 31, 2005 $ 250,000
June 30, 2005 $ 250,000
September 30, 2005 $ 250,000
December 31, 2005 $ 250,000
March 31, 2006 $1,400,000
June 30, 2006 $1,400,000
The final installment due on the Scheduled Maturity Date shall be in the amount
of $1,500,000 or, if different, the remaining principal balance of the Term Loan
B.
(iii) Notwithstanding SECTION 1.1(c)(ii), the aggregate
outstanding principal balance of the Term Loan B shall be due and payable in
full in immediately available funds on the Commitment Termination Date, if not
sooner paid in full. No payment with respect to the Term Loan B may be
reborrowed.
(iv) Each payment of principal with respect to the Term Loan
B shall be paid to Agent for the ratable benefit of each Term Loan B Lender
making a Term Loan B, ratably in proportion to each such Term Loan B Lender's
respective Term Loan B Commitment.
(d) TERM LOAN C.
(i) Subject to the terms and conditions hereof, each Term
Loan C Lender agrees to make a term loan (collectively, the "TERM LOAN C") on
the Closing Date to Borrower in the amount of the applicable Term Loan C
Lender's Term Loan C Commitment. The obligations of each Term Loan C Lender
hereunder shall be several and not joint. Each such Term Loan C shall be
evidenced by a promissory note substantially in the form of EXHIBIT 1.1(d) (each
a "TERM LOAN C NOTE" and collectively the "TERM LOAN C NOTES"), and, except as
provided in SECTION 1.12, Borrower shall execute and deliver the Term Loan C
Notes to the applicable Term Loan C Lenders. Each Term Loan C Note shall
represent the obligation of Borrower to pay the amount of the applicable Term
Loan C Lender's Term Loan Commitment, together with interest thereon as
prescribed in SECTION 1.5.
(ii) Borrower shall pay the entire principal amount of the
Term Loan C, together with interest thereon as prescribed in SECTION 1.5, in a
single installment on the Scheduled Maturity Date.
(iii) Notwithstanding SECTION 1.1(d)(ii), the aggregate
outstanding principal balance of the Term Loan C, together with interest thereon
as prescribed in Section 1.5, shall be due and payable in full in immediately
available funds on the Commitment Termination Date, if not sooner paid in full.
No payment with respect to the Term Loan C may be reborrowed.
(iv) Each payment of principal with respect to the Term Loan
C shall be paid to Agent for the ratable benefit of each Term Loan C Lender
making a Term Loan C, ratably in proportion to each such Term Loan C Lender's
respective Term Loan C Commitment.
(e) RELIANCE ON NOTICES. Agent shall be entitled to rely upon,
and shall be fully protected in relying upon, any Notice of Revolving Credit
Advance, Notice of Conversion/Continuation or similar notice believed by Agent
to be genuine. Agent may assume that each Person executing and delivering such a
notice was duly authorized, unless the responsible individual acting thereon for
Agent has actual knowledge to the contrary.
(f) LOANS UNDER ORIGINAL CREDIT AGREEMENT. The Credit Parties
acknowledge and agree that as of March 20, 2002 (i) the outstanding principal
amount of Revolving Credit Advances under the Original Credit Agreement equals
$13,070,677.45 and that such Revolving Credit Advances are continued as Loans
hereunder as follows: $7,693,069.95 as Revolving Credit Advances, $377,607.50 as
principal of Term Loan B and $5,000,000 as principal of Term Loan C; (ii) the
outstanding principal amount of the Term Loan under the Original Credit
Agreement equals $16,622,392.50 and that such Term Loan is continued as Term
Loans hereunder as follows: $10,000,000 as principal of Term Loan A and
$6,622,392.50 as principal of Term Loan B; and (iii) Letters of Credit are
outstanding under the Original Credit Agreement having a stated amount of
$980,000 and such Letters of Credit are continued as Letters of Credit
hereunder.
1.2. LETTERS OF CREDIT. Subject to and in accordance with the
terms and conditions contained herein and in ANNEX B, Borrower, on behalf of the
Borrower, shall have the right to request, and Revolving Lenders agree to incur,
or purchase participations in, Letter of Credit Obligations in respect of
Borrower.
1.3. PREPAYMENTS
(a) VOLUNTARY PREPAYMENTS. Borrower may at any time on at least
five (5) days' prior written notice by Borrower to Agent voluntarily prepay all
(but not less than all) of the Term Loans. In addition, Borrower may at any time
on at least ten (10) days' prior written notice by Borrower to Agent terminate
the Revolving Loan
Commitment; provided that upon such termination, all Loans and other Obligations
shall be immediately due and payable in full. Any such voluntary prepayment and
any such termination of the Revolving Loan Commitment must be accompanied the
payment of any LIBOR funding breakage costs in accordance with SECTION 1.13(b).
Upon any such prepayment and termination of the Revolving Loan Commitment,
Borrower's right to request Revolving Credit Advances, or request that Letter of
Credit Obligations be incurred on its behalf shall simultaneously be terminated.
(b) MANDATORY PREPAYMENTS.
(i) If at any time the outstanding balance of the aggregate
Revolving Loan exceeds the lesser of (A) the Maximum Amount and (B) the
Revolving Borrowing Base, Borrower shall immediately repay the aggregate
outstanding Revolving Credit Advances to the extent required to eliminate such
excess. If any such excess remains after repayment in full of the aggregate
outstanding Revolving Credit Advances, Borrower shall provide cash collateral
for the Letter of Credit Obligations in the manner set forth in ANNEX B to the
extent required to eliminate such excess.
(ii) Immediately upon receipt by any Credit Party of
proceeds of any asset disposition (including condemnation proceeds, but
excluding proceeds of asset dispositions permitted by SECTION 6.8 (a)) or any
sale of Stock of any Subsidiary of any Credit Party, Borrower shall prepay the
Loans in an amount equal to all such proceeds, net of (A) commissions and other
reasonable and customary transaction costs, fees and expenses properly
attributable to such transaction and payable by Borrower in connection therewith
(in each case, paid to non-Affiliates), (B) transfer taxes, (C) amounts payable
to holders of senior Liens (to the extent such Liens constitute Permitted
Encumbrances hereunder), if any, and (D) an appropriate reserve for income taxes
in accordance with GAAP in connection therewith. Any such prepayment shall be
applied in accordance with CLAUSE (c) below.
(iii) If Holdings or Borrower issues any Stock (other than
Stock issued upon the exercise of the Borrower Warrant) or incurs any
Indebtedness (other than Indebtedness permitted by SECTION 6.3), no later than
the Business Day following the date of receipt of the proceeds thereof, Borrower
shall prepay the Loans in an aggregate amount equal to all such proceeds, net of
underwriting discounts and commissions and other reasonable costs paid to
non-Affiliates in connection therewith. Any such prepayment shall be applied in
accordance with CLAUSE (c) below.
(iv) Borrower shall prepay the Obligations on the earlier of
the date which is ten (10) days after (A) the date on which Holdings' annual
audited Financial Statements for the immediately preceding Fiscal Year are
delivered pursuant to ANNEX E and (B) the date on which such annual audited
Financial Statements were required to be delivered pursuant to ANNEX E, in an
amount equal to 100% of Excess Cash Flow for the immediately preceding Fiscal
Year. Any prepayments from Excess Cash Flow paid pursuant to this CLAUSE (iv)
shall be allocated to Borrower's Obligations
based upon Borrower's relative contribution to Excess Cash Flow and shall be
applied in accordance with CLAUSE (c) below. Each such prepayment shall be
accompanied by a certificate signed by Borrower's chief financial officer
certifying the manner in which Excess Cash Flow, the resulting prepayment, and
the method of allocation to Borrower's Obligations were calculated, which
certificate shall be in form and substance satisfactory to Agent.
(c) APPLICATION OF CERTAIN MANDATORY PREPAYMENTS. Any
prepayments made by Borrower pursuant to CLAUSES (b)(ii), (b)(iii) or (b)(iv)
above or prescribed by SECTION 5.4(c) shall be applied as follows: FIRST, to
Fees and reimbursable expenses of Agent then due and payable pursuant to any of
the Loan Documents; SECOND to prepay the principal balance of the Term Loan C,
together with interest thereon as prescribed in SECTION 1.5; THIRD, to interest
then due and payable on the Term Loan B; FOURTH, to prepay the scheduled
installments of the Term Loan B in inverse order of maturity until the Term Loan
B shall have been prepaid in full; FIFTH, to interest then due and payable on
the Term Loan A; SIXTH, to prepay the scheduled installments of the Term Loan A
in inverse order of maturity until the Term Loan A shall have been prepaid in
full; SEVENTH, to interest then due and payable on Revolving Credit Advances
made to Borrower; EIGHTH, to the principal balance of Revolving Credit Advances
outstanding to Borrower until the same shall have been paid in full; and last,
to any Letter of Credit Obligations of Borrower to provide cash collateral
therefor in the manner set forth in ANNEX B, until all such Letter of Credit
Obligations have been fully cash collateralized in the manner set forth in ANNEX
B. The Revolving Loan Commitment shall not be permanently reduced by the amount
of any such prepayments.
(d) APPLICATION OF PREPAYMENTS FROM INSURANCE PROCEEDS.
Prepayments from insurance proceeds in accordance with SECTION 5.4(c) shall be
applied in accordance with SECTION 1.3(c) above.
(e) NO IMPLIED CONSENT. Nothing in this SECTION 1.3 shall be
construed to constitute Agent's or any Lender's consent to any transaction
referred to in CLAUSES (b)(i) and (b)(ii) above which is not permitted by other
provisions of this Agreement or the other Loan Documents.
1.4. USE OF PROCEEDS. Subject to Section 1.1 (a)(iii), Borrower
shall utilize the proceeds of the Revolving Loan for the financing of Borrower's
ordinary working capital and general corporate and limited liability company
needs (but excluding in any event the making of any Restricted Payment not
specifically permitted by SECTION 6.14). DISCLOSURE SCHEDULE (1.4) contains a
description of Borrower's sources and uses of funds as of the Closing Date,
including Loans and Letter of Credit Obligations to be made or incurred on that
date, and a funds flow memorandum detailing how funds from each source are to be
transferred to particular uses.
1.5. INTEREST AND APPLICABLE MARGINS. (a) Borrower shall pay
interest to Agent, for the ratable benefit of Lenders in accordance with the
various Loans being made by each Lender, in arrears on each applicable Interest
Payment Date, at the following rates: (i) with respect to the Revolving Credit
Advances, the Index Rate plus the Applicable Revolver Index Margin per annum or,
at the election of Borrower, the applicable LIBOR Rate plus the Applicable
Revolver LIBOR Margin per annum, based on the aggregate Revolving Credit
Advances outstanding from time to time; (ii) with respect to Term Loan A, the
Index Rate plus the Applicable Term Loan A Index Margin per annum or, at the
election of Borrower, the applicable LIBOR Rate plus the Applicable Term Loan A
LIBOR Margin per annum; (iii) with respect to Term Loan B, the Index Rate plus
the Applicable Term Loan B Index Margin per annum or, at the election of
Borrower, the applicable LIBOR Rate plus the Applicable Term Loan B LIBOR Margin
per annum; and (iv) with respect to Term Loan C, thirteen percent (13%) per
annum. Notwithstanding the provisions of SECTION 1.10, interest on the Term Loan
C (including interest on the Term Loan C at the Default Rate) may, at Borrower's
option, be paid in kind by capitalizing such interest and adding it to the
aggregate principal amount of the Term Loan C Note, effective of as of the
applicable Interest Payment Date.
(b) If any payment on any Loan becomes due and payable on a day
other than a Business Day, the maturity thereof will be extended to the next
succeeding Business Day (except as set forth in the definition of LIBOR Period)
and, with respect to payments of principal, interest thereon shall be payable at
the then applicable rate during such extension.
(c) All computations of Fees calculated on a per annum basis and
interest shall be made by Agent on the basis of a three hundred and sixty (360)
day year, in each case for the actual number of days occurring in the period for
which such interest and Fees are payable. The Index Rate shall be determined
each day based upon the Index Rate as in effect each day. Each determination by
Agent of an interest rate and Fees hereunder shall be conclusive, absent
manifest error.
(d) So long as an Event of Default shall have occurred and be
continuing under Section 8.1(a), (h) or (i) or so long as any other Default or
Event of Default shall have occurred and be continuing and at the election of
Agent (or upon the written request of Requisite Lenders) confirmed by written
notice from Agent to Borrower, the interest rates applicable to the Loans and
the Letter of Credit Fees shall be increased by two percent (2%) per annum above
the rates of interest or the rate of such Fees otherwise applicable hereunder
("DEFAULT RATE"), and all outstanding Obligations shall bear interest at the
Default Rate applicable to such Obligations. Interest and Letter of Credit Fees
at the Default Rate shall accrue from the initial date of such Default or Event
of Default until that Default or Event of Default is cured or waived and shall
be payable upon demand.
(e) So long as no Default or Event of Default shall have
occurred and be continuing, and subject to the additional conditions precedent
set forth in SECTION 2.2, Borrower shall have the option to (i) request that any
Revolving Credit Advances be made as a LIBOR Loan, (ii) convert at any time all
or any part of outstanding Loans from Index Rate Loans to LIBOR Loans, (iii)
convert any LIBOR Loan to an Index Rate Loan, subject to payment of LIBOR
breakage costs in accordance with SECTION 1.13(b) if such conversion is made
prior to the expiration of the LIBOR Period applicable thereto, or (iv) continue
all or any portion of any Loan as a LIBOR Loan upon the expiration of the
applicable LIBOR Period and the succeeding LIBOR Period of that continued Loan
shall commence on the last day of the LIBOR Period of the Loan to be continued.
Any Loan to be made or continued as, or converted into, a LIBOR Loan must be in
a minimum amount of $2,000,000 and integral multiples of $500,000 in excess of
such amount. Any such election must be made by 11:00 a.m. (
New York time) on the
third (3rd) Business Day prior to (1) the date of any proposed Advance which is
to bear interest at the LIBOR Rate, (2) the end of each LIBOR Period with
respect to any LIBOR Loans to be continued as such, or (3) the date on which
Borrower wishes to convert any Index Rate Loan to a LIBOR Loan for a LIBOR
Period designated by Borrower in such election. If no election is received with
respect to a LIBOR Loan by 11:00 a.m. (
New York time) on the third (3rd)
Business Day prior to the end of the LIBOR Period with respect thereto (or if a
Default or an Event of Default shall have occurred and be continuing or if the
additional conditions precedent set forth in SECTION 2.2 shall not have been
satisfied), that LIBOR Loan shall be converted to an Index Rate Loan at the end
of its LIBOR Period. Borrower must make such election by notice to Agent in
writing, by telecopy or overnight courier. In the case of any conversion or
continuation, such election must be made pursuant to a written notice (a "NOTICE
OF CONVERSION/CONTINUATION") in the form of EXHIBIT 1.5(e).
(f) Notwithstanding anything to the contrary set forth in this
SECTION 1.5, if a court of competent jurisdiction determines in a final order
that the rate of interest payable hereunder exceeds the highest rate of interest
permissible under law (the "MAXIMUM LAWFUL RATE"), then so long as the Maximum
Lawful Rate would be so exceeded, the rate of interest payable hereunder shall
be equal to the Maximum Lawful Rate; PROVIDED, HOWEVER, that if at any time
thereafter the rate of interest payable hereunder is less than the Maximum
Lawful Rate, Borrower shall continue to pay interest hereunder at the Maximum
Lawful Rate until such time as the total interest received by Agent, on behalf
of Lenders, is equal to the total interest which would have been received had
the interest rate payable hereunder been (but for the operation of this
paragraph) the interest rate payable since the Closing Date as otherwise
provided in this Agreement. Thereafter, interest hereunder shall be paid at the
rate(s) of interest and in the manner provided in SECTIONS 1.5(a) through (e)
above, unless and until the rate of interest again exceeds the Maximum Lawful
Rate, and at that time this paragraph shall again apply. In no event shall the
total interest received by any Lender pursuant to the terms hereof exceed the
amount which such Lender could lawfully have received had the interest due
hereunder been calculated for the full term hereof at the Maximum Lawful Rate.
If the
Maximum Lawful Rate is calculated pursuant to this paragraph, such
interest shall be calculated at a daily rate equal to the Maximum Lawful Rate
divided by the number of days in the year in which such calculation is made. If,
notwithstanding the provisions of this SECTION 1.5(f), a court of competent
jurisdiction shall finally determine that a Lender has received interest
hereunder in excess of the Maximum Lawful Rate, Agent shall, to the extent
permitted by applicable law, promptly apply such excess in the order specified
in SECTION 1.11 and thereafter shall refund any excess to Borrower or as a court
of competent jurisdiction may otherwise order.
1.6. ELIGIBLE ACCOUNTS. Based on the most recent Revolving
Borrowing Base Certificate delivered by Borrower to Agent and on other
information available to Agent, Agent shall in its reasonable credit judgment
determine which Accounts of Borrower shall be "ELIGIBLE ACCOUNTS" for purposes
of this Agreement. In determining whether a particular Account of Borrower
constitutes an Eligible Account, Agent shall not include any such Account to
which any of the exclusionary criteria set forth below applies. Agent reserves
the right, at any time and from time to time after the Closing Date, to adjust
any such criteria or to establish new criteria, in each case in its reasonable
credit judgment. Eligible Accounts shall not include any Account of Borrower:
(a) which does not arise from the sale of goods or the performance of
services by Borrower in the ordinary course of its business;
(b) (i) upon which Borrower's right to receive payment is not
absolute or is contingent upon the fulfillment of any condition whatsoever or
(ii) as to which Borrower is not able to bring suit or otherwise enforce its
remedies against the Account Debtor through judicial process or (iii) if the
Account represents a progress billing consisting of an invoice for goods sold or
used or services rendered pursuant to a contract under which the Account
Debtor's obligation to pay that invoice is subject to Borrower's completion of
further performance under such contract or is subject to the equitable lien of a
surety bond issuer;
(c) to the extent that any defense, counterclaim, setoff or dispute
is asserted as to such Account;
(d) that is not a true and correct statement of bona fide
indebtedness incurred in the amount of the Account for merchandise sold to or
services rendered and accepted by the applicable Account Debtor;
(e) with respect to which an invoice, acceptable to Agent in form and
substance, has not been sent to the applicable Account Debtor;
(f) that (i) is not owned by Borrower or (ii) is subject to any
right, claim, security interest or other interest of any other Person, other
than Liens in favor of Agent, on behalf of itself and Lenders;
(g) that arises from a sale to any director, officer, other employee
or Affiliate of any Credit Party, or to any entity which has a majority of
directors who are also directors of any Credit Party;
(h) that is the obligation of an Account Debtor that is the United
States government or a political subdivision thereof, or any state or
municipality or department, agency or instrumentality thereof unless Agent, in
its sole discretion, has agreed to the contrary in writing and Borrower, if
necessary or desirable, has complied with the Federal Assignment of Claims Act
of 1940, and any amendments thereto, or any applicable state statute or
municipal ordinance of similar purpose and effect, with respect to such
obligation;
(i) that is the obligation of an Account Debtor located in a foreign
country other than Canada (excluding the provinces of Quebec, Newfoundland, Nova
Scotia and Xxxxxx Xxxxxx Island) unless payment thereof is assured by a letter
of credit assigned and delivered to Agent, satisfactory to Agent as to form,
amount and issue;
(j) to the extent Borrower or any Subsidiary thereof is liable for
goods sold or services rendered by the applicable Account Debtor (including,
without limitation, with respect to any resin expenses owing to General Electric
Company or any of its Affiliates) to Borrower or any Subsidiary thereof but only
to the extent of the potential offset;
(k) that arises with respect to goods which are delivered on a
xxxx-and-hold, cash-on-delivery basis or placed on consignment, guaranteed sale
or other terms by reason of which the payment by the Account Debtor is or may be
conditional;
(l) that is in default; PROVIDED, THAT, without limiting the
generality of the foregoing, an Account shall be deemed in default upon the
occurrence of any of the following:
(i) it is not paid within the earlier of: sixty (60) days
following its due date or ninety (90) days following its original invoice date;
(ii) if any Account Debtor obligated upon such Account suspends
business, makes a general assignment for the benefit of creditors or fails to
pay its debts generally as they come due; or
(iii) if any petition is filed by or against any Account Debtor
obligated upon such Account under any bankruptcy law or any other federal, state
or foreign (including any provincial) receivership, insolvency relief or other
law or laws for the relief of debtors;
(m) which is the obligation of an Account Debtor if fifty percent
(50%) or more of the dollar amount of all Accounts owing by that Account Debtor
are ineligible under the criteria set forth in clause (l) of this SECTION 1.6;
(n) as to which Agent's Lien thereon, on behalf of itself and
Lenders, is not a first priority perfected Lien;
(o) as to which any of the representations or warranties pertaining
to Accounts set forth in this Agreement or the Borrower Security Agreement is
untrue;
(p) to the extent such Account is evidenced by a judgment, Instrument
or Chattel Paper;
(q) to the extent such Account exceeds any credit limit established
by Agent, in its reasonable discretion, following prior notice of such limit by
Agent to Borrower;
(r) to the extent that such Account, together with all other Accounts
owing by such Account Debtor and its Affiliates as of any date of determination
exceed ten percent (10%) (or, in the case of an Account Debtor consisting of any
(i) Account Debtor (other than the ones referred to in clause (ii) below) whose
senior unsecured long-term debt is rated at least BBB by Xxxxx'x Investors
Service, Inc. or the equivalent thereof by Standard & Poor's Ratings Group or
other nationally recognized rating agency acceptable to Agent, twenty percent
(20%) or (ii) of General Electric Corporation, Deere & Company, Honda of
America, Inc. or BE Aerospace, Inc., twenty-five percent (25%)) of all Eligible
Accounts;
(s) which is payable in any currency other than Dollars; or
(t) which is unacceptable to Agent in its reasonable credit judgment
relating to such Account or the applicable Account Debtor.
1.7. ELIGIBLE INVENTORY. Based on the most recent Revolving
Borrowing Base Certificate delivered by Borrower to Agent and on other
information available to Agent, Agent shall in its reasonable credit judgment
determine which Inventory of Borrower shall be "ELIGIBLE INVENTORY" for purposes
of this Agreement. In determining whether any particular Inventory of Borrower
constitutes Eligible Inventory, Agent shall not include any such Inventory to
which any of the exclusionary criteria set forth below applies. Agent reserves
the right, at any time and from time to time after the Closing Date, to adjust
any such criteria and to establish new criteria, in its reasonable credit
judgment. Eligible Inventory shall not include any Inventory of Borrower that:
(a) is not owned by Borrower free and clear of all Liens and rights
of any other Person (including the rights of a purchaser that has made progress
payments and the rights of a surety that has issued a bond to assure Borrower's
performance with
respect to that Inventory), except the Liens in favor of Agent, on behalf of
itself and Lenders, and Permitted Encumbrances in favor of landlords and bailees
to the extent permitted in SECTION 5.9 hereof (subject to Reserves established
by Agent in accordance with Section 5.9 hereof);
(b) (i) is not located on premises owned or leased by Borrower or
(ii) is stored with a bailee, warehouseman or similar Person, unless Agent has
given its prior consent thereto and unless (x) a satisfactory bailee letter or
landlord waiver has been delivered to Agent, or (y) Reserves satisfactory to
Agent have been established with respect thereto, or (iii) is located at any
site if the aggregate book value of Inventory at any such location is less than
$100,000;
(c) is placed on consignment or is in transit;
(d) is covered by a negotiable document of title, unless such
document has been delivered to Agent with all necessary endorsements, free and
clear of all Liens except those in favor of Agent and Lenders;
(e) in Agent's reasonable determination, is excess, obsolete,
unsalable, shopworn, seconds, damaged or unfit for sale;
(f) consists of display items or packing or shipping materials,
manufacturing supplies or replacement parts;
(g) consists of goods which have been returned by the buyer;
(h) is not of a type held for sale in the ordinary course of
Borrower's business;
(i) as to which Agent's Lien, on behalf of itself and Lenders,
therein is not a first priority perfected Lien;
(j) as to which any of the representations or warranties pertaining
to Inventory set forth in this Agreement or the Borrower Security Agreement is
untrue;
(k) consists of any costs associated with "freight-in" charges;
(l) consists of Hazardous Materials or goods that can be transported
or sold only with licenses that are not readily available;
(m) is not covered by casualty insurance meeting the requirements of
this Agreement or the other Loan Documents; or
(n) is otherwise unacceptable to Agent in its reasonable credit
judgment relating to such Inventory.
1.8. CASH MANAGEMENT SYSTEMS. On or prior to the Closing Date,
Borrower will establish and will maintain until the Termination Date, the cash
management systems described on ANNEX C (the "CASH MANAGEMENT SYSTEMS").
1.9. FEES. (a) Borrower and Holdings, jointly and severally,
agree to pay to Agent on April 15 of each year, commencing April 15, 2002, an
agency fee in the amount of $50,000 payable annually in advance; provided that
the agency fee due on April 15, 2002 shall be fully earned as of such date and
shall be paid by Borrower and Holdings to Agent on or before December 15, 2002.
(b) As compensation to the Lenders for entering into this Agreement
the Borrower shall pay to Agent, for the ratable benefit of Lenders, a closing
fee in the amount of $200,000, payable in four installments with the initial
payment of $100,000 being due and payable on the Closing Date, the second
payment of $33,333.34 being due on June 30, 2002, the third payment of
$33,333.33 being due on September 30, 2002 and the final payment of $33,333.33
being due on December 31, 2002; provided that, notwithstanding the foregoing,
any unpaid portion of such fee shall be due and payable in full on the
Commitment Termination Date. Borrower acknowledges and agrees that such closing
fee has been fully earned as of the Closing Date and once paid is
non-refundable.
(c) Borrower shall pay to Agent in accordance with the terms of
Section 11.3 hereof the field audit charges, together with actual out-of-pocket
expenses related thereto, incurred by Agent in performing up to four field
examinations per calendar year (or more if a Default or Event of Default shall
have occurred and be continuing) after the Closing Date.
(d) As compensation for the Lenders having previously entered into
the Sixth Amendment to the Original Credit Agreement, Borrower shall pay to
Agent on or before July 31, 2002, for the ratable benefit of Lenders, a fee in
the amount of $50,000; provided that, notwithstanding the foregoing, any unpaid
portion of such fee shall be due and payable in full on the Commitment
Termination Date. Borrower acknowledges and agrees that such fee has been fully
earned and once paid is non-refundable.
(e) As additional compensation for the Revolving Lenders, Borrower
agrees to pay to Agent, for the ratable benefit of such Lenders, in arrears, on
the first Business Day of each month prior to the Commitment Termination Date
and on the Commitment Termination Date, a fee for Borrower's non-use of
available funds in an amount equal to 0.50% percent per annum (calculated on the
basis of a 360 day year for actual days elapsed) of the difference between (x)
the Maximum Amount (as it may be reduced from time to time) and (y) the average
for the period of the daily closing balances of the aggregate Revolving Loan
outstanding during the period for which such fee is due.
(f) If, on the date that is twenty four (24) months from the Closing
Date (the "TWO YEAR ANNIVERSARY DATE"), the Termination Date has not occurred,
then as additional compensation for the Lenders, Borrower agrees to pay to
Agent, for the ratable benefit of the Lenders, within fifteen (15) days of the
Two Year Anniversary Date, a fee in an amount equal to one percent (1%) of the
amount of the Obligations outstanding on the Two Year Anniversary Date,
including any accrued and unpaid interest on the Loans.
(g) The Fee Letter dated as of April 15, 1999 among Holdings,
Borrower and Agent (the "Original Fee Letter') is hereby null and void and of no
further force or effect as to the parties thereto; provided that any obligations
of Borrower and Holdings under the Original Fee Letter which have accrued prior
to the Closing Date and are still outstanding as of the Closing Date shall not
be affected by this sentence.
1.10. RECEIPT OF PAYMENTS. Borrower shall make each payment under this
Agreement not later than 2:00 p.m. (
New York time) on the day when due in
immediately available funds in Dollars to the Collection Account. For purposes
of computing interest and Fees and determining Borrowing Availability as of any
date, all payments shall be deemed received on the day of receipt of immediately
available funds therefor in the Collection Account prior to 2:00 p.m.
New York
time. Payments received after 2:00 p.m.
New York time on any Business Day shall
be deemed to have been received on the following Business Day.
1.11. APPLICATION AND ALLOCATION OF PAYMENTS. (a) So long as no Default
or Event of Default shall have occurred and be continuing, (i) payments
consisting of proceeds of Accounts received in the ordinary course of business
shall be applied to the Revolving Loan; (ii) payments matching specific
scheduled payments then due shall be applied to those scheduled payments; (iii)
voluntary prepayments shall be applied as determined by Borrower, subject to the
provisions of SECTION 1.3(a); and (iv) mandatory prepayments shall be applied as
set forth in SECTION 1.3(c). All payments and prepayments applied to a
particular Loan shall be applied ratably to the portion thereof held by each
Lender as determined by its Pro Rata Share. As to each other payment, and as to
all payments made when a Default or Event of Default shall have occurred and be
continuing or following the Commitment Termination Date, Borrower hereby
irrevocably waives the right to direct the application of any and all payments
received from or on behalf of Borrower, and Borrower hereby irrevocably agrees
that Agent shall have the continuing exclusive right to apply any and all such
payments against the Obligations of Borrower as Agent may deem advisable
notwithstanding any previous entry by Agent in the Loan Account or any other
books and records. In the absence of a specific determination by Agent with
respect thereto, payments shall be applied to amounts then due and payable in
the following order: (1) to Fees and Agent's expenses reimbursable hereunder;
(2) interest on the Loans, ratably in proportion to the interest accrued as to
each Loan; (3) to principal payments on the Loans and to provide cash collateral
for Letter of Credit Obligations in the manner described in ANNEX B, ratably to
the aggregate, combined principal balance of the Loans and outstanding Letter of
Credit Obligations;
and (4) to all other Obligations including expenses of Lenders to the extent
reimbursable under SECTION 11.3.
(b) Agent is authorized to, and at its sole election may, charge to
the Revolving Loan balance on behalf of Borrower and cause to be paid all Fees,
expenses, Charges, costs (including insurance premiums in accordance with
SECTION 5.4(a)) and interest and principal, other than principal of the
Revolving Loan, owing by Borrower under this Agreement or any of the other Loan
Documents if and to the extent Borrower fails to promptly pay any such amounts
as and when due, even if such charges would cause the balance of the aggregate
Revolving Loan to exceed Borrowing Availability. At Agent's option and to the
extent permitted by law, any charges so made shall constitute part of the
Revolving Loan hereunder.
1.12. LOAN ACCOUNT AND ACCOUNTING. Agent shall maintain a loan account
(the "LOAN ACCOUNT") on its books to record: all Advances and each of the Term
Loans; all payments made by Borrower, and all other debits and credits as
provided in this Agreement with respect to the Loans or any other Obligations.
All entries in the Loan Account shall be made in accordance with Agent's
customary accounting practices as in effect from time to time. The balance in
the Loan Account, as recorded on Agent's most recent printout or other written
statement, shall, absent manifest error, be presumptive evidence of the amounts
due and owing to Agent and Lenders by Borrower; PROVIDED that any failure to so
record or any error in so recording shall not limit or otherwise affect
Borrower's duty to pay the Obligations. Agent shall render to Borrower a monthly
accounting of transactions with respect to the Loans setting forth the balance
of the Loan Account as to Borrower. Unless Borrower notifies Agent in writing of
any objection to any such accounting (specifically describing the basis for such
objection), within forty-five (45) days after the date thereof, each and every
such accounting shall (absent manifest error) be deemed final, binding and
conclusive upon Borrower in all respects as to all matters reflected therein.
Only those items expressly objected to in such notice shall be deemed to be
disputed by Borrower. Notwithstanding any provision herein contained to the
contrary, any Lender may elect (which election may be revoked) to dispense with
the issuance of Notes to that Lender and may rely on the Loan Account as
evidence of the amount of Obligations from time to time owing to it.
1.13. INDEMNITY. (a) Each Credit Party that is a signatory hereto shall
jointly and severally indemnify and hold harmless each of Agent, Lenders and
their respective Affiliates, and each such Person's respective officers,
directors, employees, attorneys, agents and representatives (each, an
"INDEMNIFIED PERSON"), from and against any and all suits, actions, proceedings,
claims, damages, losses, liabilities and expenses (including reasonable
attorneys' fees and disbursements and other costs of investigation or defense,
including those incurred upon any appeal) which may be instituted or asserted
against or incurred by any such Indemnified Person as the result of credit
having been extended, suspended or terminated under this Agreement and the other
Loan Documents and the administration of such credit, and in connection with or
arising out of the
transactions contemplated hereunder and thereunder and any actions or failures
to act in connection therewith, including any and all Environmental Liabilities
and legal costs and expenses arising out of or incurred in connection with
disputes between or among ANY PARTIES to any of the Loan Documents
(collectively, "INDEMNIFIED LIABILITIES"); PROVIDED, that no such Credit Party
shall be liable for any indemnification to an Indemnified Person to the extent
that any such suit, action, proceeding, claim, damage, loss, liability or
expense results from that Indemnified Person's gross negligence or willful
misconduct. NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER
PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY
OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH
PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE
ALLEGED AS A RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED
UNDER ANY LOAN DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED
HEREUNDER OR THEREUNDER.
(b) To induce Lenders to provide the LIBOR Rate option on the terms
provided herein, if (i) any LIBOR Loans are repaid in whole or in part prior to
the last day of any applicable LIBOR Period (whether that repayment is made
pursuant to any provision of this Agreement or any other Loan Document or is the
result of acceleration, by operation of law or otherwise); (ii) Borrower shall
default in payment when due of the principal amount of any LIBOR Loan; (iii)
Borrower shall default in making any borrowing of, conversion into or
continuation of LIBOR Loans after Borrower has given notice requesting the same
in accordance herewith; or (iv) Borrower shall fail to make any prepayment of a
LIBOR Loan after Borrower has given a notice thereof in accordance herewith,
Borrower shall jointly and severally indemnify and hold harmless each Lender
from and against all losses, costs and expenses resulting from or arising from
any of the foregoing. Such indemnification shall include any loss or expense
arising from the reemployment of funds obtained by it or from fees payable to
terminate deposits from which such funds were obtained. For the purpose of
calculating amounts payable to a Lender under this subsection, each Lender shall
be deemed to have actually funded its relevant LIBOR Loan through the purchase
of a deposit bearing interest at the LIBOR Rate in an amount equal to the amount
of that LIBOR Loan and having a maturity comparable to the relevant LIBOR
Period; PROVIDED, HOWEVER, that each Lender may fund each of its LIBOR Loans in
any manner it sees fit, and the foregoing assumption shall be utilized only for
the calculation of amounts payable under this subsection. This covenant shall
survive the termination of this Agreement and the payment of the Notes and all
other amounts payable hereunder. As promptly as practicable under the
circumstances, each Lender shall provide Borrower with its written calculation
of all amounts payable pursuant to this SECTION 1.13(b), and such calculation
shall be binding on the parties hereto unless Borrower shall object in writing
within ten (10) Business Days of receipt thereof, specifying the basis for such
objection in detail.
1.14. ACCESS. Each Credit Party which is a party hereto shall, during
normal business hours, from time to time upon reasonable (but no less than one
Business Days') prior notice as frequently as Agent determines to be
appropriate: (a) provide Agent and any of its officers, employees and agents
access to its properties, facilities, advisors and employees (including
officers) of each Credit Party and to the Collateral, (b) permit Agent, and any
of its officers, employees and agents, to inspect, audit and make extracts from
any Credit Party's books and records, and (c) permit Agent, and its officers,
employees and agents, to inspect, review, evaluate and make test verifications
and counts of the Accounts, Inventory and other Collateral of any Credit Party.
If a Default or Event of Default shall have occurred and be continuing or if
access is necessary to preserve or protect the Collateral as determined by
Agent, each such Credit Party shall provide such access to Agent and to each
Lender at all times and without advance notice. Furthermore, so long as any
Event of Default shall have occurred and be continuing, Borrower shall provide
Agent and each Lender with reasonable access to their suppliers and customers.
Each Credit Party shall make available to Agent and its counsel, as quickly as
is possible under the circumstances, originals or copies of all books and
records which Agent may request. Each Credit Party shall deliver any document or
instrument necessary for Agent, as it may from time to time request, to obtain
records from any service bureau or other Person which maintains records for such
Credit Party, and shall maintain duplicate records or supporting documentation
on media, including computer tapes and discs owned by such Credit Party. Agent
will give Lenders at least ten (10) days' prior written notice of regularly
scheduled audits. Representatives of other Lenders may accompany Agent's
representatives on regularly scheduled audits at no charge to Borrower.
1.15. TAXES. (a) Any and all payments by Borrower hereunder or under
the Notes shall be made, in accordance with this SECTION 1.15, free and clear of
and without deduction for any and all present or future Taxes. If Borrower shall
be required by law to deduct any Taxes from or in respect of any sum payable
hereunder (including any sum payable pursuant to SECTION 12) or under the Notes,
(i) the sum payable shall be increased as much as shall be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 1.15) Agent or Lenders, as
applicable, receive an amount equal to the sum they would have received had no
such deductions been made, (ii) Borrower shall make such deductions, and (iii)
Borrower shall pay the full amount deducted to the relevant taxing or other
authority in accordance with applicable law. Within thirty (30) days after the
date of any payment of Taxes, Borrower shall furnish to Agent the original or a
certified copy of a receipt evidencing payment thereof.
(b) Each Credit Party that is a signatory hereto shall jointly and
severally indemnify and, within ten (10) Business Days' of demand therefor, pay
Agent and each Lender for the full amount of Taxes (including any Taxes imposed
by any jurisdiction on amounts payable under this SECTION 1.15) paid by Agent or
such Lender, as appropriate, and any liability (including penalties, interest
and expenses) arising therefrom or with respect thereto, whether or not such
Taxes were correctly or legally asserted.
(c) Each Lender organized under the laws of a jurisdiction outside
the United States (a "FOREIGN LENDER") as to which payments to be made under
this Agreement or under the Notes are exempt from United States withholding tax
under an applicable statute or tax treaty shall provide to Borrower and Agent a
properly completed and executed IRS Form W-8ECI or Form W-8BEN or other
applicable form, certificate or document prescribed by the IRS or the United
States certifying as to such Foreign Lender's entitlement to such exemption (a
"CERTIFICATE OF EXEMPTION"). Any foreign Person that seeks to become a Lender
under this Agreement shall provide a Certificate of Exemption to Borrower and
Agent prior to becoming a Lender hereunder. No foreign Person may become a
Lender hereunder if such Person is unable to deliver a Certificate of Exemption.
1.16. CAPITAL ADEQUACY; INCREASED COSTS; ILLEGALITY; REPLACEMENT OF
LENDER IN RESPECT TO INCREASED COSTS. (a) If any Lender shall have determined
that any law, treaty, governmental (or quasi-governmental) rule, regulation,
guideline or order regarding capital adequacy, reserve requirements or similar
requirements or compliance by any Lender with any request or directive regarding
capital adequacy, reserve requirements or similar requirements (whether or not
having the force of law), in each case, adopted after the Closing Date, from any
central bank or other Governmental Authority increases or would have the effect
of increasing the amount of capital, reserves or other funds required to be
maintained by such Lender and thereby reducing the rate of return on such
Lender's capital as a consequence of its obligations hereunder, then Borrower
shall from time to time upon demand by such Lender (with a copy of such demand
to Agent) pay to Agent, for the account of such Lender, additional amounts
sufficient to compensate such Lender for such reduction. A certificate as to the
amount of that reduction and showing the basis of the computation thereof
submitted by such Lender to Borrower and to Agent shall, absent manifest error,
be final, conclusive and binding for all purposes.
(b) If, due to either (i) the introduction of or any change in any
law or regulation (or any change in the interpretation thereof) or (ii) the
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), in each case
adopted after the Closing Date, there shall be any increase in the cost to any
Lender of agreeing to make or making, funding or maintaining any Loan, then
Borrower shall from time to time, upon demand by such Lender (with a copy of
such demand to Agent), pay to Agent for the account of such
Lender additional amounts sufficient to compensate such Lender for such
increased cost. A certificate as to the amount of such increased cost, submitted
to Borrower and to Agent by such Lender, shall be conclusive and binding on
Borrower for all purposes, absent manifest error. Each Lender agrees that, as
promptly as practicable after it becomes aware of any circumstances referred to
above which would result in any such increased cost, the affected Lender shall,
to the extent not inconsistent with such Lender's internal policies of general
application, use reasonable commercial efforts to minimize costs and expenses
incurred by it and payable to it by Borrower pursuant to this SECTION 1.16(b).
(c) Notwithstanding anything to the contrary contained herein, if the
introduction of or any change in any law or regulation (or any change in the
interpretation thereof) shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any Lender to agree
to make or to make or to continue to fund or maintain any LIBOR Loan, then,
unless that Lender is able to make or to continue to fund or to maintain such
LIBOR Loan at another branch or office of that Lender without, in that Lender's
opinion, adversely affecting it or its Loans or the income obtained therefrom,
on notice thereof and demand therefor by such Lender to Borrower through Agent,
(i) the obligation of such Lender to agree to make or to make or to continue to
fund or maintain LIBOR Loans shall terminate and (ii) Borrower shall forthwith
prepay in full all outstanding LIBOR Loans owing by Borrower to such Lender,
together with interest accrued thereon, UNLESS Borrower on behalf of Borrower,
within five (5) Business Days after the delivery of such notice and demand,
converts all such Loans into a Loan bearing interest based on the Index Rate.
(d) Within fifteen (15) days after receipt by Borrower of written
notice and demand from any Lender (an "AFFECTED LENDER") for payment of
additional amounts or increased costs as provided in SECTION 1.15(a), 1.16(a) or
1.16(b), Borrower may, at its option, notify Agent and such Affected Lender of
its intention to replace the Affected Lender. So long as no Default or Event of
Default shall have occurred and be continuing, Borrower, with the consent of
Agent, may obtain, at Borrower's expense, a replacement Lender ("REPLACEMENT
LENDER") for the Affected Lender, which Replacement Lender must be satisfactory
to Agent. If Borrower obtains a Replacement Lender within ninety (90) days
following notice of their intention to do so, the Affected Lender must sell and
assign its Loans and Commitments to such Replacement Lender for an amount equal
to the principal balance of all Loans held by the Affected Lender and all
accrued interest and Fees with respect thereto through the date of such sale,
PROVIDED that Borrower shall have reimbursed such Affected Lender for the
additional amounts or increased costs that it is entitled to receive under this
Agreement through the date of such sale and assignment.
Notwithstanding the foregoing, Borrower shall not have the right to
obtain a Replacement Lender if the Affected Lender rescinds its demand for
increased costs or additional amounts within fifteen (15) days following its
receipt of Borrower's notice of intention to replace such Affected Lender.
Furthermore, if Borrower gives a notice of
intention to replace and do not so replace such Affected Lender within ninety
(90) days thereafter, Borrower's rights under this SECTION 1.16(d) shall
terminate and Borrower shall promptly pay all increased costs or additional
amounts demanded by such Affected Lender pursuant to SECTIONS 1.15(a), 1.16(a)
and 1.16(b).
(e) If any Lender shall fail to notify Borrower of any event occurring
after the date of this Agreement entitling such Lender to compensation under
this Section within 180 days after the officer of such Lender responsible for
the business relationship of such Lender with Borrower obtains actual knowledge
thereof, such Lender shall, with respect to compensation payable pursuant to
this Section in respect of any costs resulting from such event, only be entitled
to payment under this Section for costs incurred from and after the date 180
days prior to the date that such Lender does give such notice.
1.17. SINGLE LOAN. All Loans to Borrower and all of the other
Obligations of Borrower arising under this Agreement and the other Loan
Documents shall constitute one general obligation of Borrower secured, until the
Termination Date, by all of its Collateral.
1.18. COMMITMENT FEE. As compensation for Lenders entering into this
Agreement, Borrower shall issue to Lenders the Borrower Warrant. Lenders and the
Borrower agree that the fair value of the Borrower Warrant is $135,000. The
parties to this Agreement agree to use this value for the Borrower Warrant for
all tax purposes.
2. CONDITIONS PRECEDENT
2.1. CONDITIONS TO THE EFFECTIVE OF THIS AGREEMENT. This Agreement
shall not be effective, and no Lender shall be obligated to make any Loan or
incur any Letter of Credit Obligations on the Closing Date, or to take, fulfill,
or perform any other action hereunder, until the following conditions have been
satisfied or provided for in a manner satisfactory to Agent, or waived in
writing by Agent and Lenders:
(a) CREDIT AGREEMENT; LOAN DOCUMENTS. This Agreement or counterparts
hereof shall have been duly executed by, and delivered to, Borrower, the other
Credit Parties signatory hereto, Agent and Lenders; and Agent shall have
received such documents, instruments, agreements and legal opinions as Agent
shall reasonably request in connection with the transactions contemplated by
this Agreement and the other Loan Documents, including all those listed in the
Closing Checklist attached hereto as ANNEX D, each in form and substance
satisfactory to Agent.
(b) APPROVALS. Agent shall have received (i) satisfactory evidence
that the Credit Parties have obtained all required consents and approvals of all
Persons including all requisite Governmental Authorities, to the execution,
delivery and performance of this Agreement and the other Loan Documents and the
consummation of the Related Transactions or (ii) an officer's certificate in
form and substance satisfactory to Agent affirming that no such consents or
approvals are required.
(c) BORROWER WARRANT; BORROWER WARRANT AGREEMENT. Agent shall have
received the Borrower Warrant and the Borrower Warrant Agreement duly executed
and delivered by Borrower and the other Credit Parties signatory thereto.
(d) PAYMENT OF FEES. Borrower shall have paid the Fees required to be
paid on the Closing Date in the respective amounts specified in SECTION 1.9, and
shall have reimbursed Agent for all fees, costs and expenses of closing
presented as of the Closing Date.
(e) CAPITAL STRUCTURE; OTHER INDEBTEDNESS. The capital structure of
each Credit Party and the terms and conditions of all Indebtedness (including,
without limitation, in respect of the Lebanon IRBs, the IRB Lease Agreement and
the IRB Indenture) of each Credit Party shall be acceptable to Agent in its sole
discretion.
(f) VENDOR PAYMENT TERMS. Agent shall be satisfied with the vendor
payment terms in effect on the Closing Date as set forth on DISCLOSURE SCHEDULE
3.21(b).
(g) OPERATING BUDGET. Agent shall have received from Borrower the
Operating Budget.
(h) WORTHINGTON ACQUISITION. Agent shall have received such
information and documentation as it may require relating to any liabilities or
obligations of the Credit Parties under or relating to the Worthington
Acquisition and the Worthington Acquisition Agreement, and all of which shall be
acceptable to Agent in its discretion.
2.2. FURTHER CONDITIONS TO EACH LOAN. Except as otherwise expressly
provided herein, no Lender shall be obligated to fund any Loan, convert or
continue any Loan as a LIBOR Loan or incur any Letter of Credit Obligation, if,
as of the date thereof:
(a) Any representation or warranty by any Credit Party contained
herein or in any of the other Loan Documents shall be untrue or incorrect as of
such date, except to the extent that such representation or warranty expressly
relates to an earlier date and except for changes therein expressly permitted or
expressly contemplated by this Agreement; or
(b) Any event or circumstance having a Material Adverse Effect with
respect to the Credit Parties shall have occurred since December 31, 2000, as
reasonably determined by the Requisite Revolving Lenders; or
(c) (i) Any Event of Default shall have occurred and be continuing or
would result after giving effect to any Loan (or the incurrence of any Letter of
Credit Obligations), or (ii) a Default shall have occurred and be continuing or
would result after giving effect to any Loan, and Agent or Requisite Revolving
Lenders shall have
determined not to make any Loan or incur any Letter of Credit Obligation so long
as that Default is continuing; or
(d) After giving effect to any Advance (or the incurrence of any
Letter of Credit Obligations), (i) the outstanding principal amount of the
aggregate Revolving Loan would exceed the Borrowing Availability, or (ii) Excess
Borrowing Availability shall not be less than $1,000,000; or
(e) Such Advance (or the incurrence of any Letter of Credit
Obligations) is not contemplated and permitted by the Cash Flow Budget.
The request and acceptance by Borrower of the proceeds of any Loan, the
incurrence of any Letter of Credit Obligations or the conversion or continuation
of any Loan into, or as, a LIBOR Loan, as the case may be, shall be deemed to
constitute, as of the date of such request or acceptance, (i) a representation
and warranty by Borrower that the conditions in this SECTION 2.2 have been
satisfied and (ii) a reaffirmation by Borrower of the granting and continuance
of Agent's Liens, on behalf of itself and Lenders, pursuant to the Collateral
Documents.
3. REPRESENTATIONS AND WARRANTIES
To induce Lenders to make the Loans and to incur Letter of Credit
Obligations, the Credit Parties executing this Agreement, jointly and severally,
make the following representations and warranties to Agent and each Lender with
respect to all Credit Parties, each and all of which shall survive the execution
and delivery of this Agreement.
3.1. CORPORATE OR LIMITED LIABILITY COMPANY EXISTENCE; COMPLIANCE WITH
LAW. Each Credit Party (a) is a corporation or limited liability company, as the
case may be, duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization; (b) is duly qualified to conduct
business and is in good standing in each other jurisdiction where its ownership
or lease of property or the conduct of its business requires such qualification,
except where the failure to be so qualified would not result in exposure to
losses, damages or liabilities in excess of $100,000; (c) has the requisite
organizational power and authority and the legal right to own, pledge, mortgage
or otherwise encumber and operate its properties, to lease the property it
operates under lease and to conduct its business as now, heretofore and proposed
to be conducted; (d) subject to specific representations regarding Environmental
Laws, has all licenses, permits, consents or approvals from or by, and has made
all filings with, and has given all notices to, all Governmental Authorities
having jurisdiction, to the extent required for such ownership, operation and
conduct, except when the failure to have or do so, individually or in the
aggregate could not reasonably be expected to have a Material Adverse Effect;
(e) is in compliance with its charter and by-laws or equivalent organizational
or charter or constituent documents; and (f) subject to specific representations
set forth herein regarding ERISA, Environmental Laws, tax and other
laws, is in compliance with all applicable provisions of law, except where the
failure to comply, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
3.2. EXECUTIVE OFFICES; FEIN. As of the Closing Date, the current
location of each Credit Party's chief executive office and principal place of
business is set forth in Disclosure Schedule (3.2), and none of such locations
have changed within the twelve (12) months preceding the Closing Date. In
addition, DISCLOSURE SCHEDULE (3.2) lists the federal employer identification
number of each Credit Party.
3.3. CORPORATE OR LIMITED LIABILITY COMPANY POWER, AUTHORIZATION,
ENFORCEABLE OBLIGATIONS. The execution, delivery and performance by each Credit
Party of the Loan Documents to which it is a party and the creation of all Liens
provided for therein: (a) are within such Person's organizational power; (b)
have been duly authorized by all necessary or proper organizational and
shareholder or membership action; (c) do not contravene any provision of such
Person's charter or bylaws or equivalent organizational or charter or other
constituent documents; (d) do not violate any law or regulation, or any order or
decree of any court or Governmental Authority; (e) do not conflict with or
result in the breach or termination of, constitute a default under or accelerate
or permit the acceleration of any performance required by, any indenture
(including, without limitation, the IRB Indenture), mortgage, deed of trust,
lease (including, without limitation, the IRB Lease Agreement), agreement or
other instrument to which such Person is a party or by which such Person or any
of its property is bound; (f) do not result in the creation or imposition of any
Lien upon any of the property of such Person other than those in favor of Agent,
on behalf of itself and Lenders, pursuant to the Loan Documents; and (g) do not
require the consent or approval of any Governmental Authority or any other
Person, except those referred to in SECTION 2.1(b), all of which will have been
duly obtained, made or complied with prior to the Closing Date. On or prior to
the Closing Date, each of the Loan Documents shall have been duly executed and
delivered by each Credit Party thereto and each such Loan Document shall then
constitute a legal, valid and binding obligation of such Credit Party
enforceable against it in accordance with its terms.
3.4. FINANCIAL STATEMENTS AND PROJECTIONS. Except for the Projections,
all Financial Statements concerning Holdings and its Subsidiaries which are
referenced below have been prepared in accordance with GAAP consistently applied
throughout the periods covered (except as disclosed therein and except, with
respect to unaudited Financial Statements, for the absence of footnotes and
normal year-end audit adjustments) and present fairly in all material respects
the financial position of the Persons covered thereby as at the dates thereof
and the results of their operations and cash flows for the periods then ended.
(a) The following Financial Statements attached hereto as DISCLOSURE
SCHEDULE (3.4(A)) have been delivered on the date hereof:
(i) The audited consolidated and consolidating balance sheets at
December 31, 1999 and 2000 and the related statements of income and cash flows
of Borrower for the Fiscal Years then ended, certified by KMPG LLC.
(ii) The unaudited balance sheet(s) prepared on a monthly basis
for each of (x) the twelve Fiscal Months ending December 31, 2001 and (y) the
Fiscal Month ending January 31, 2002, in each case together with the related
statement(s) of income and cash flows of Borrower for each such Fiscal Month.
(b) PROJECTIONS. The Projections delivered on the date hereof and
attached hereto as DISCLOSURE SCHEDULE (3.4(B)) have been prepared by Holdings
and Borrower in light of the past operations of their respective businesses, and
reflect projections for the five year period beginning on January 1, 2002 on a
month by month basis for the first year and on a year by year basis thereafter.
The Projections are based upon estimates and assumptions stated therein, all of
which Holdings and Borrower believe as of the Closing Date to be reasonable and
fair in light of current conditions and current facts known to Holdings and
Borrower and, as of the Closing Date, reflect Holdings' and Borrower's good
faith and reasonable estimates of the future financial performance of Holdings
and its Subsidiaries and of the other information projected therein for the
period set forth therein.
3.5. MATERIAL ADVERSE EFFECT. Between December 31, 2000 and the
Closing Date, (a) no Credit Party has incurred any obligations, contingent or
non-contingent liabilities, liabilities for Charges, long-term leases or unusual
forward or long-term commitments which, alone or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, (b) no contract, lease
or other agreement or instrument has been entered into by any Credit Party or
has become binding upon any Credit Party's assets and no law or regulation
applicable to any Credit Party has been adopted which has had or could
reasonably be expected to have a Material Adverse Effect, and (c) no Credit
Party is in default and to the best of Borrower's knowledge no third party is in
default under any material contract, lease or other agreement or instrument,
which alone or in the aggregate could reasonably be expected to have a Material
Adverse Effect. Except as set forth on DISCLOSURE SCHEDULE (3.5), between
December 31, 2000 and the Closing Date no event has occurred, which alone or
together with other events, could reasonably be expected to have a Material
Adverse Effect.
3.6. OWNERSHIP OF PROPERTY; LIENS. As of the Closing Date, the real
estate ("REAL ESTATE") listed on DISCLOSURE SCHEDULE (3.6) constitutes all of
the real property owned, leased, subleased, or used by any Credit Party. Each
Credit Party owns good and marketable fee simple title to all of its owned real
estate, and valid and marketable leasehold interests in all of its leased Real
Estate, all as described on DISCLOSURE SCHEDULE (3.6), and copies of all such
leases or a summary of terms thereof satisfactory to Agent have been delivered
to Agent. DISCLOSURE SCHEDULE (3.6) further describes any Real Estate with
respect to which any Credit Party is a lessor, sublessor or
assignor as of the Closing Date. Each Credit Party also has good and marketable
title to, or valid leasehold interests in, all of its personal properties and
assets. As of the Closing Date, none of the properties and assets of any Credit
Party are subject to any Liens other than Permitted Encumbrances, and there are
no facts, circumstances or conditions known to any Credit Party that may result
in any Liens (including Liens arising under Environmental Laws) other than
Permitted Encumbrances. Each Credit Party has received all deeds, assignments,
waivers, consents, non-disturbance and recognition or similar agreements, bills
of sale and other documents, and has duly effected all recordings, filings and
other actions necessary to establish, protect and perfect such Credit Party's
right, title and interest in and to all such Real Estate and other properties
and assets. DISCLOSURE SCHEDULE (3.6) also describes any purchase options,
rights of first refusal or other similar contractual rights pertaining to any
Real Estate. As of the Closing Date, no portion of any Credit Party's Real
Estate has suffered any material damage by fire or other casualty loss which has
not heretofore been repaired and restored in all material respects to its
original condition or otherwise remedied. As of the Closing Date, all material
permits required to have been issued or appropriate to enable the Real Estate to
be lawfully occupied and used for all of the purposes for which they are
currently occupied and used have been lawfully issued and are in full force and
effect.
3.7. LABOR MATTERS. As of the Closing Date (a) no strikes or other
material labor disputes against any Credit Party are pending or, to any Credit
Party's knowledge, threatened; (b) hours worked by and payment made to employees
of each Credit Party comply with the Fair Labor Standards Act and each other
federal, state, local or foreign law applicable to such matter; (c) all payments
due from any Credit Party for employee health and welfare insurance have been
paid or accrued as a liability on the books of such Credit Party; (d) except as
set forth in DISCLOSURE SCHEDULE (3.7), no Credit Party is a party to or bound
by any collective bargaining agreement, management agreement, consulting
agreement or any employment agreement (and true and complete copies of any
agreements described on DISCLOSURE SCHEDULE (3.7) have been delivered to Agent);
(e) there is no organizing activity involving any Credit Party pending or, to
any Credit Party's knowledge, threatened by any labor union or group of
employees; (f) there are no representation proceedings pending or, to any Credit
Party's knowledge, threatened with the National Labor Relations Board, and no
labor organization or group of employees of any Credit Party has made a pending
demand for recognition; and (g) except as set forth in DISCLOSURE SCHEDULE
(3.7), there are no complaints or charges against any Credit Party pending or,
to the knowledge of any Credit Party, threatened to be filed with any
Governmental Authority or arbitrator based on, arising out of, in connection
with, or otherwise relating to the employment or termination of employment by
any Credit Party of any individual.
3.8. VENTURES, SUBSIDIARIES AND AFFILIATES; OUTSTANDING STOCK AND
INDEBTEDNESS. Except as set forth in DISCLOSURE SCHEDULE (3.8), no Credit Party
has any Subsidiaries or is engaged in any joint venture or partnership with any
other Person. Except as set forth in DISCLOSURE SCHEDULE (3.8), as of the
Closing Date no Credit Party is
an Affiliate of any other Person. All of the issued and outstanding Stock of
each Credit Party is owned by each of the stockholders and/or members and in the
amounts set forth on DISCLOSURE SCHEDULE (3.8). There are no outstanding rights
to purchase, options, warrants or similar rights or agreements pursuant to which
any Credit Party may be required to issue, sell, repurchase or redeem any of its
Stock or other equity securities or any Stock or other equity securities of its
Subsidiaries. All outstanding Indebtedness of each Credit Party as of the
Closing Date is described in SECTION 6.3 (including DISCLOSURE SCHEDULE (6.3)).
None of the Credit Parties other than Borrower has any assets (except nominal
cash, Stock of their Subsidiaries, in the case of the IRB Subsidiary, the
Lebanon IRBs and the rights related thereto and, in the case of Holdings, (i)
$5,000,000 of cash received by Holdings from Borrower and evidenced by the
Holdings Note, (ii) capital contributions made to Holdings so long as
immediately thereafter an equal amount is contributed to the capital of Borrower
and (iii) payments that Holdings receives to the extent permitted by SECTION 6.4
or SECTION 6.14) or any Indebtedness or Guaranteed Indebtedness (except the
Obligations and the Holdings Note).
3.9. GOVERNMENT REGULATION. No Credit Party is an "investment company"
or an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act of
1940 as amended. No Credit Party is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, or any other federal
or state statute that restricts or limits its ability to incur Indebtedness or
to perform its obligations hereunder. The making of the Loans by Lenders to
Borrower, the incurrence of the Letter of Credit Obligations on behalf of
Borrower, the application of the proceeds thereof and repayment thereof and the
consummation of the Related Transactions will not violate any provision of any
such statute or any rule, regulation or order issued by the Securities and
Exchange Commission.
3.10. MARGIN REGULATIONS. No Credit Party is engaged, nor will it
engage, principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
security" as such terms are defined in Regulation U of the Federal Reserve Board
as now and from time to time hereafter in effect (such securities being referred
to herein as "MARGIN STOCK"). No Credit Party owns any Margin Stock, and none of
the proceeds of the Loans or other extensions of credit under this Agreement
will be used, directly or indirectly, for the purpose of purchasing or carrying
any Margin Stock, for the purpose of reducing or retiring any Indebtedness which
was originally incurred to purchase or carry any Margin Stock or for any other
purpose which might cause any of the Loans or other extensions of credit under
this Agreement to be considered a "purpose credit" within the meaning of
Regulation T, U or X of the Federal Reserve Board. No Credit Party will take or
permit to be taken any action which might cause any Loan Document to violate any
regulation of the Federal Reserve Board.
3.11. TAXES. All tax returns, reports and statements, including
information returns, required by any Governmental Authority ("TAX RETURNS") to
be filed by any Credit Party have been filed with the appropriate Governmental
Authority; all such Tax Returns are true, correct and complete in all material
respects; and all Charges have been paid prior to the date on which any fine,
penalty, interest or late charge may be added thereto for nonpayment thereof (or
any such fine, penalty, interest, late charge or loss has been paid), excluding
Charges or other amounts being contested in accordance with SECTION 5.2(b). No
adjustment relating to any Tax Return has been proposed formally or informally
by any Government Authority and, to the knowledge of each Credit Party, no basis
exists for such adjustment. Proper and accurate amounts have been withheld by
each Credit Party from its respective employees, independent contractors,
creditors, members, partners and other third parties for all periods in full and
complete compliance with all applicable federal, state, local and foreign law
and such withholdings have been timely paid to the respective Governmental
Authorities. DISCLOSURE SCHEDULE (3.11) sets forth as of the Closing Date those
taxable years for which any Credit Party's tax returns are currently being
audited by the IRS or any other applicable Governmental Authority and any
assessments or threatened assessments in connection with such audit, or
otherwise currently outstanding. Except as described on DISCLOSURE SCHEDULE
(3.11), no Credit Party has executed or filed with the IRS or any other
Governmental Authority any agreement or other document extending, or having the
effect of extending, the period for assessment or collection of any Charges.
None of the Credit Parties are liable for any Charges: (a) under any agreement
(including any tax sharing agreements other than the Tax Sharing Agreement) or
(b) to each Credit Party's knowledge, as a transferee. As of the Closing Date,
no Credit Party has agreed or been requested to make any adjustment under IRC
Section 481(a), by reason of a change in accounting method or otherwise, which
would have a Material Adverse Effect. DISCLOSURE SCHEDULE 3.11 sets forth the
federal and state net taxable income or loss, as the case may be, of the
Borrower for the taxable years ending December 31, 1999, and 2000 (determined as
if Borrower were a separate taxable entity); provided that Borrower represents
that it has filed an extension for the filing of its tax return for the tax year
ended December 31, 2002. During such years, (i) no distributions or payments
were made by Borrower to Holdings or any member of the Xxxxxx Group with respect
to the Tax Sharing Agreement and (ii) other than distributions permitted by
Section 6.4 of the Original Credit Agreement, no other distributions or payments
have been made by Borrower to Holdings or any member of the Xxxxxx Group.
3.12. ERISA. (a) DISCLOSURE SCHEDULE (3.12) lists and separately
identifies all Title IV Plans, Multiemployer Plans, ESOPs and Retiree Welfare
Plans. Copies of all such listed Plans, together with a copy of the latest form
5500 for each such Plan, have been delivered to Agent. Except with respect to
Multiemployer Plans, each Qualified Plan has been determined by the IRS to
qualify under Section 401 of the IRC, and the trusts created thereunder have
been determined to be exempt from tax under the provisions of Section 501 of the
IRC, and nothing has occurred which would cause the loss of such qualification
or tax-exempt status. Each Plan is in compliance with the
applicable provisions of ERISA and the IRC, including the filing of reports
required under the IRC or ERISA. No Credit Party or ERISA Affiliate has failed
to make any contribution or pay any amount due as required by either Section 412
of the IRC or Section 302 of ERISA or the terms of any such Plan. No Credit
Party or ERISA Affiliate has engaged in a prohibited transaction, as defined in
Section 4975 of the IRC, in connection with any Plan, which would subject any
Credit Party to a material tax on prohibited transactions imposed by Section
4975 of the IRC.
(b) Except as set forth in DISCLOSURE SCHEDULE (3.12): (i) no Title IV
Plan has any Unfunded Pension Liability; (ii) no ERISA Event or event described
in Section 4062(e) of ERISA with respect to any Title IV Plan has occurred or is
reasonably expected to occur; (iii) there are no pending, or to the knowledge of
any Credit Party, threatened claims (other than claims for benefits in the
normal course), sanctions, actions or lawsuits, asserted or instituted against
any Plan or any Person as fiduciary or sponsor of any Plan; (iv) no Credit Party
or ERISA Affiliate has incurred or reasonably expects to incur any liability as
a result of a complete or partial withdrawal from a Multiemployer Plan; (v)
within the last five years no Title IV Plan with Unfunded Pension Liabilities
has been transferred outside of the "controlled group" (within the meaning of
Section 4001(a)(14) of ERISA) of any Credit Party or ERISA Affiliate; and (vi)
no liability under any Title IV Plan has been satisfied with the purchase of a
contract from an insurance company that is not rated AAA by the Standard &
Poor's Corporation or the equivalent by another nationally recognized rating
agency.
3.13. NO LITIGATION. No action, claim, lawsuit, demand, investigation
or proceeding is now pending or, to the knowledge of any Credit Party,
threatened against any Credit Party, before any Governmental Authority or before
any arbitrator or panel of arbitrators (collectively, "LITIGATION") which
challenges any Credit Party's right or power to enter into or perform any of its
obligations under the Loan Documents to which it is a party, or the validity or
enforceability of any Loan Document or any action taken thereunder, or (b) which
has a reasonable risk of being determined adversely to any Credit Party and
which, if so determined, could have a Material Adverse Effect. Except as set
forth on DISCLOSURE SCHEDULE (3.13), as of the Closing Date there is no
Litigation pending or, to the knowledge of any Credit Party, threatened which
seeks damages in excess of $100,000 or injunctive relief or alleges criminal
misconduct of any Credit Party.
3.14. BROKERS. No broker or finder acting on behalf of any Credit Party
brought about the obtaining, making or closing of the Loans or the Related
Transactions, and no Credit Party has any obligation to any Person in respect of
any finder's or brokerage fees in connection therewith.
3.15. INTELLECTUAL PROPERTY. As of the Closing Date, each Credit Party
owns or has rights to use all Intellectual Property necessary to continue to
conduct its business as now conducted by it or proposed to be conducted by it,
and each Patent,
Trademark, Copyright and License is listed, together with application or
registration numbers, as applicable, in DISCLOSURE SCHEDULE (3.15) hereto. Each
Credit Party conducts its business and affairs without any known infringement of
or interference with any Intellectual Property of any other Person.
3.16. FULL DISCLOSURE. No information contained in this Agreement, any
of the other Loan Documents, any Projections, Financial Statements or Collateral
Reports or other reports from time to time delivered hereunder or any written
statement furnished by or on behalf of any Credit Party to Agent or any Lender
pursuant to the terms of this Agreement contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary to make the statements contained herein or therein not misleading in
light of the circumstances under which they were made. The Liens granted to
Agent, on behalf of itself and Lenders, pursuant to the Collateral Documents
will at all times be fully perfected first priority Liens in and to the
Collateral described therein, subject, as to priority, only to Permitted
Encumbrances with respect to the Collateral other than Accounts.
3.17. ENVIRONMENTAL MATTERS. (a) Except as described in the
environmental reports listed on DISCLOSURE SCHEDULE (3.17) or as otherwise
described on such Disclosure Schedule, as of the Closing Date: (i) the Real
Estate is free of contamination from any Hazardous Material except for such
contamination that would not materially adversely impact the value or
marketability of such Real Estate and which would not result in Environmental
Liabilities which could reasonably be expected to exceed $100,000; (ii) no
Credit Party has caused or suffered to occur any Release of Hazardous Materials
on, at, in, under, above, to, from or about any of its Real Estate; (iii) the
Credit Parties are and have been in compliance with all Environmental Laws,
except for such noncompliance which would not result in Environmental
Liabilities which could reasonably be expected to exceed $100,000; (iv) the
Credit Parties have obtained, and are in compliance with, all Environmental
Permits required by Environmental Laws for the operations of their respective
businesses as presently conducted or as proposed to be conducted, except where
the failure to so obtain or comply with such Environmental Permits would not
result in Environmental Liabilities which could reasonably be expected to exceed
$100,000, and all such Environmental Permits are valid, uncontested and in good
standing; (v) no Credit Party is involved in operations or knows of any facts,
circumstances or conditions, including any Releases of Hazardous Materials, that
are likely to result in any Environmental Liabilities of such Credit Party which
could reasonably be expected to exceed $100,000, and no Credit Party has
permitted any current or former tenant or occupant of the Real Estate to engage
in any such operations; (vi) there is no Litigation arising under or related to
any Environmental Laws, Environmental Permits or Hazardous Material which seeks
damages, penalties, fines, costs or expenses in excess of $100,000 or injunctive
relief, or which alleges criminal misconduct by any Credit Party; (vii) no
notice has been received by any Credit Party identifying it as a "potentially
responsible party" or requesting information under CERCLA or analogous state
statutes, and to the knowledge of the Credit Parties, there are
no facts, circumstances or conditions that may result in any Credit Party being
identified as a "potentially responsible party" under CERCLA or analogous state
statutes; and (viii) the Credit Parties have provided to Agent copies of all
existing environmental reports, reviews and audits and all written information
pertaining to actual or potential Environmental Liabilities, in each case
relating to any Credit Party.
(b) Each Credit Party hereby acknowledges and agrees that Agent (i) is
not now, and has not ever been, in control of any of the Real Estate or any
Credit Party's affairs, and (ii) does not have the capacity through the
provisions of the Loan Documents or otherwise to influence any Credit Party's
conduct with respect to the ownership, operation or management of any of its
Real Estate or compliance with Environmental Laws or Environmental Permits.
3.18. INSURANCE. DISCLOSURE SCHEDULE (3.18) lists all insurance
policies of any nature maintained, as of the Closing Date, for current
occurrences by each Credit Party, as well as a summary of the terms of each such
policy.
3.19. DEPOSIT AND DISBURSEMENT ACCOUNTS. DISCLOSURE SCHEDULE (3.19)
lists all banks and other financial institutions at which any Credit Party
maintains deposits and/or other accounts as of the Closing Date, including any
Disbursement Accounts, and such Schedule correctly identifies the name, address
and telephone number of each depository, the name in which the account is held,
a description of the purpose of the account, and the complete account number.
3.20. GOVERNMENT CONTRACTS. Except as set forth in DISCLOSURE SCHEDULE
(3.20), as of the Closing Date, no Credit Party is a party to any contract or
agreement with any Governmental Authority and no Credit Party's Accounts are
subject to the Federal Assignment of Claims Act, as amended (31 U.S.C. Section
3727) or any similar state or local law.
3.21. CUSTOMER AND TRADE RELATIONS; TRADE PAYABLES. (a) As of the
Closing Date, there exists no actual or, to the knowledge of any Credit Party,
threatened termination or cancellation of, or any material adverse modification
or change in: the business relationship of any Credit Party with any customer or
group of customers whose purchases during the preceding twelve (12) months
caused them to be ranked among the ten largest customers of such Credit Party;
or the business relationship of any Credit Party with any supplier or group of
suppliers whose supplies during the preceding twelve (12) months caused them to
be ranked among the ten largest suppliers of such Credit Party.
(b) DISCLOSURE SCHEDULE 3.21(b) sets forth a true, accurate and
complete aging report (aged from invoice date as follows: 1-30 days, 31-60 days,
61-90 days and 91 days or more) as of the Closing Date with respect to the trade
payables or other amounts or obligations (a "TRADE PAYABLE") payable by the
Credit Parties to each vendor which in the aggregate for any vendor exceeds
$5,000, and a summary of the
payment terms applicable to each of the Trade Payables for each such vendor,
together with copies of all documentation evidencing such trade terms, including
copies of any correspondence with such vendors and promissory notes evidencing
any such Trade Payables.
3.22. AGREEMENTS AND OTHER DOCUMENTS. As of the Closing Date, each
Credit Party has provided to Agent or its counsel, on behalf of Lenders,
accurate and complete copies (or summaries) of all of the following agreements
or documents to which it is subject and each of which are listed on DISCLOSURE
SCHEDULE (3.22): supply agreements and purchase agreements not terminable by
such Credit Party within sixty (60) days following written notice issued by such
Credit Party and involving transactions in excess of $1,000,000 per annum; any
lease of Equipment having a remaining term of one year or longer and requiring
aggregate rental and other payments in excess of $500,000 per annum; licenses
and permits held by the Credit Parties, the absence of which could be reasonably
likely to have a Material Adverse Effect; instruments or documents evidencing
Indebtedness of such Credit Party and any security interest granted by such
Credit Party with respect thereto; and instruments and agreements evidencing the
issuance of any equity securities, warrants, rights or options to purchase
equity securities of such Credit Party.
3.23. SOLVENCY. Both before and after giving effect to (a) the
amendment and restatement of the Original Credit Agreement pursuant to this
Agreement and the Loans and Letter of Credit Obligations to be made or extended
on the Closing Date or such other date as Loans and Letter of Credit Obligations
requested hereunder are made or extended, (b) the disbursement of the proceeds
of such Loans pursuant to the instructions of Borrower, and (c) the payment and
accrual of all transaction costs in connection with the foregoing, each Credit
Party is Solvent.
3.24. WORTHINGTON LITIGATION; WORTHINGTON ACQUISITION AGREEMENT. The
Credit Parties have delivered to Agent as of the Closing Date true, correct and
complete copies of (i) the Worthington Acquisition Agreement (together with all
modifications, amendments and supplements thereto) and (ii) all pleadings,
filings, and non-privileged case summaries, memorandum and related material
relating to the Worthington Litigation; provided that the Credit Parties shall
not be obligated to deliver to Agent any items relating to the Worthington
Litigation which would compromise the attorney-client privilege between the
Credit Parties and their counsel.
3.25. STATUS OF HOLDINGS; IRB SUBSIDIARY. Holdings and the IRB
Subsidiary have not engaged in any business or incurred any Indebtedness or any
other liabilities (except in connection with its corporate or limited liability
company formation, the Related Transactions Documents and this Agreement or
except as permitted under SECTION 6.19).
3.26. SECURITY AGREEMENTS; INTELLECTUAL PROPERTY SECURITY AGREEMENTS
AND PLEDGE AGREEMENTS. Attached hereto as DISCLOSURE SCHEDULE (3.26) are true,
correct and complete copies of each of the schedules to each of the Security
Agreements, the Intellectual Property Security Agreements and the Pledge
Agreements updated to, and true, correct and complete as of the Closing Date.
4. FINANCIAL STATEMENTS AND INFORMATION
4.1. REPORTS AND NOTICES. (a) Each Credit Party executing this
Agreement hereby agrees that from and after the Closing Date and until the
Termination Date, it shall deliver to Agent and/or Lenders, as required, the
Financial Statements, notices, Projections and other information at the times,
to the Persons and in the manner set forth in ANNEX E.
(b) Each Credit Party executing this Agreement hereby agrees that from
and after the Closing Date and until the Termination Date, it shall deliver to
Agent and/or Lenders, as required, the various Collateral Reports (including
Revolving Borrowing Base Certificates in the form of EXHIBIT 4.1(b)(i)) at the
times, to the Persons and in the manner set forth in ANNEX F.
4.2. COMMUNICATION WITH ACCOUNTANTS. Each Credit Party executing this
Agreement authorizes Agent and, so long as a Default or Event of Default shall
have occurred and be continuing, each Lender, to communicate directly with its
independent certified public accountants including KPMG LLP, and authorizes and
shall instruct those accountants and advisors to disclose and make available to
Agent and each Lender any and all Financial Statements and other supporting
financial documents, schedules and information relating to any Credit Party
(including copies of any issued management letters) with respect to the
business, financial condition and other affairs of any Credit Party.
5. AFFIRMATIVE COVENANTS
Each Credit Party executing this Credit Agreement jointly and
severally agrees as to all Credit Parties that from and after the date hereof
and until the Termination Date:
5.1. MAINTENANCE OF EXISTENCE AND CONDUCT OF BUSINESS. Each Credit
Party shall: do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate or limited liability existence and its
material rights and franchises; continue to conduct its business substantially
as now conducted or as otherwise permitted hereunder; at all times maintain,
preserve and protect all of its material assets and properties used or useful in
the conduct of its business, and keep the same in good repair, working order and
condition in all material respects (taking into consideration ordinary wear and
tear) and from time to time make, or cause to be made, all necessary or
appropriate repairs, replacements and improvements thereto consistent with
industry
practices; and transact business only in such limited liability company and
trade names as are set forth in DISCLOSURE SCHEDULE (5.1).
5.2. PAYMENT OF OBLIGATIONS. (a) Subject to SECTION 5.2(b), each
Credit Party shall pay and discharge or cause to be paid and discharged promptly
all Charges payable by it, including (A) Charges imposed upon it, its income and
profits, or any of its property (real, personal or mixed) and all Charges with
respect to tax, social security and unemployment withholding with respect to its
employees, and (B) lawful claims for labor, materials, supplies and services or
otherwise, provided that claims for any of the items set forth in this
subsection (B) may be paid or discharged after the date due so long as (i) such
claim is paid in the ordinary course of business consistent with past practices,
(ii) no Lien shall be imposed to secure payment of such claim that is superior
to any of the Liens securing the Obligations, (iii) none of the Collateral
becomes subject to forfeiture or loss as a result thereof and (iii) Agent has
not advised Borrower in writing that Agent reasonably believes that nonpayment
or nondischarge thereof could have or result in a Material Adverse Effect.
(b) Each Credit Party may in good faith contest, by appropriate
proceedings, the validity or amount of any Charges described in SECTION 5.2(a);
PROVIDED, that (i) adequate reserves with respect to such contest are maintained
on the books of such Credit Party, in accordance with GAAP, (ii) no Lien shall
be imposed to secure payment of such Charges that is superior to any of the
Liens securing the Obligations and such contest is maintained and prosecuted
continuously and with diligence and operates to suspend collection or
enforcement of such Charges, (iii) none of the Collateral becomes subject to
forfeiture or loss as a result of such contest, (iv) such Credit Party shall
promptly pay or discharge such contested Charges or claims and all additional
charges, interest, penalties and expenses, if any, and shall deliver to Agent
evidence acceptable to Agent of such compliance, payment or discharge, if such
contest is terminated or discontinued adversely to such Credit Party or the
conditions set forth in this SECTION 5.2(b) are no longer met, and (v) Agent has
not advised Borrower in writing that Agent reasonably believes that nonpayment
or nondischarge thereof could have or result in a Material Adverse Effect.
5.3. BOOKS AND RECORDS. Each Credit Party shall keep adequate books
and records with respect to its business activities in which proper entries,
reflecting all financial transactions, are made in accordance with GAAP and on a
basis consistent with the Financial Statements attached as DISCLOSURE SCHEDULE
(3.4(A)).
5.4. INSURANCE; DAMAGE TO OR DESTRUCTION OF COLLATERAL. (a) The Credit
Parties shall, at their sole cost and expense, maintain the policies of
insurance described on DISCLOSURE SCHEDULE (3.18) as in effect on the date
hereof or otherwise in form and amounts and with insurers acceptable to Agent.
If any Credit Party at any time or times hereafter shall fail to obtain or
maintain any of the policies of insurance required above or to pay all premiums
relating thereto, Agent may at any time or times thereafter obtain and
maintain such policies of insurance and pay such premiums and take any other
action with respect thereto which Agent deems advisable. Agent shall have no
obligation to obtain insurance for any Credit Party or pay any premiums
therefor. By doing so, Agent shall not be deemed to have waived any Default or
Event of Default arising from any Credit Party's failure to maintain such
insurance or pay any premiums therefor. All sums so disbursed, including
attorneys' fees, court costs and other charges related thereto, shall be payable
on demand by Borrower to Agent and shall be additional Obligations hereunder
secured by the Collateral.
(b) Agent reserves the right at any time upon any change in any Credit
Party's risk profile (including any change in the product mix maintained by any
Credit Party or any laws affecting the potential liability of such Credit Party)
to require additional forms and limits of insurance to, in Agent's opinion,
adequately protect both Agent's and Lender's interests in all or any portion of
the Collateral and to ensure that each Credit Party is protected by insurance in
amounts and with coverage customary for its industry. If Agent requires any such
additional forms or limits of insurance, the applicable Credit Party shall have
thirty (30) days to provide to Agent satisfactory evidence that it has obtained
such additional forms and/or limits. If requested by Agent, each Credit Party
shall deliver to Agent from time to time a report of a reputable insurance
broker, reasonably satisfactory to Agent, with respect to its insurance
policies.
(c) Borrower shall deliver to Agent, in form and substance
satisfactory to Agent, endorsements to (i) all "All Risk" and business
interruption insurance naming Agent, on behalf of itself and Lenders, as loss
payee, and (ii) all general liability and other liability policies naming Agent,
on behalf of itself and Lenders, as additional insured. Borrower irrevocably
makes, constitutes and appoints Agent (and all officers, employees or agents
designated by Agent), so long as any Default or Event of Default shall have
occurred and be continuing or the anticipated insurance proceeds exceed
$250,000, as Borrower's true and lawful agent and attorney-in-fact for the
purpose of making, settling and adjusting claims under such "All Risk" policies
of insurance, endorsing the name of Borrower on any check or other item of
payment for the proceeds of such "All Risk" policies of insurance and for making
all determinations and decisions with respect to such "All Risk" policies of
insurance. Agent shall have no duty to exercise any rights or powers granted to
it pursuant to the foregoing power-of-attorney. Borrower shall promptly notify
Agent of any loss, damage, or destruction to the Collateral in the amount of
$250,000 or more, whether or not covered by insurance. After deducting from such
proceeds the expenses, if any, incurred by Agent in the collection or handling
thereof, Agent may, at its option, apply such proceeds to the reduction of the
Obligations in accordance with SECTION 1.3(d); provided that in the case of
insurance proceeds pertaining to any Credit Party that is not Borrower, such
insurance proceeds shall be applied ratably to all of the Loans owing by
Borrower, or permit or require Borrower to use such money, or any part thereof,
to replace, repair, restore or rebuild the Collateral in a diligent and
expeditious manner with materials and workmanship of substantially the same
quality as existed before the loss, damage or
destruction. Notwithstanding the foregoing, if the casualty giving rise to such
insurance proceeds would not reasonably be expected to have a Material Adverse
Effect and such insurance proceeds do not exceed $250,000 in the aggregate,
Agent shall permit Borrower to replace, restore, repair or rebuild the property;
PROVIDED that if Borrower shall not have completed or entered into binding
agreements to complete such replacement, restoration, repair or rebuilding
within 270 days of such casualty, Agent may apply such insurance proceeds to the
Obligations in accordance with SECTION 1.3(d); provided further that in the case
of insurance proceeds pertaining to any Credit Party that is not Borrower, such
insurance proceeds shall be applied ratably to all of the Loans owing by
Borrower. All insurance proceeds which are to be made available to Borrower to
replace, repair, restore or rebuild the Collateral shall be applied by Agent to
reduce the outstanding principal balance of the Revolving Loan of Borrower
(which application shall not result in a permanent reduction of the Revolving
Loan Commitment) and upon such application, Agent shall establish a Reserve
against the Revolving Borrowing Base in an amount equal to the amount of such
proceeds so applied. All insurance proceeds made available to any Credit Party
that is not a Borrower to replace, repair, restore or rebuild Collateral shall
be deposited in a cash collateral account. Thereafter, such funds shall be made
available to Borrower to provide funds to replace, repair, restore or rebuild
the Collateral as follows: (i) Borrower shall request a Revolving Credit Advance
or a release from the cash collateral account be made to Borrower in the amount
requested to be released; (ii) so long as the conditions set forth in SECTION
2.2 have been met, Revolving Lenders shall make such Revolving Credit Advance or
Agent shall release funds from the cash collateral account; and (iii) in the
case of insurance proceeds applied against the Revolving Loan, the Reserve
established with respect to such insurance proceeds shall be reduced by the
amount of such Revolving Credit Advance. To the extent not used to replace,
repair, restore or rebuild the Collateral, such insurance proceeds shall be
applied in accordance with SECTION 1.3(d); provided that in the case of
insurance proceeds pertaining to any Credit Party that is not Borrower, such
insurance proceeds shall be applied ratably to all of the Loans owing by
Borrower.
5.5. COMPLIANCE WITH LAWS. Each Credit Party shall comply with all
federal, state, local and foreign laws (including, without limitation, the
Xxxx-Xxxxx-Xxxxxx Anti-Trust Improvements Act of 1976) and regulations
applicable to it, including those relating to ERISA and labor matters, and
Environmental Laws and Environmental Permits, except to the extent that the
failure to comply, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
5.6. SUPPLEMENTAL DISCLOSURE. From time to time as may be requested by
Agent (which request will not be made more frequently than once each year absent
the occurrence and continuance of a Default or an Event of Default), the Credit
Parties shall supplement each Disclosure Schedule hereto, or any representation
herein or in any other Loan Document, with respect to any matter hereafter
arising which, if existing or occurring at the date of this Agreement, would
have been required to be set forth or described in such Disclosure Schedule or
as an exception to such representation or which
is necessary to correct any information in such Disclosure Schedule or
representation which has been rendered inaccurate thereby (and, in the case of
any supplements to any Disclosure Schedule, such Disclosure Schedule shall be
appropriately marked to show the changes made therein); provided that (a) no
such supplement to any such Disclosure Schedule or representation shall be or be
deemed a waiver of any Default or Event of Default resulting from the matters
disclosed therein, except as consented to by Agent and Requisite Lenders in
writing; and (b) no supplement shall be required as to representations and
warranties that relate solely to the Closing Date.
5.7. INTELLECTUAL PROPERTY. Each Credit Party will conduct its
business and affairs without any known infringement of or interference with any
Intellectual Property of any other Person in any material respect.
5.8. ENVIRONMENTAL MATTERS. (a) Each Credit Party shall and shall
cause each Person within its control to: (i) conduct its operations and keep and
maintain its Real Estate in compliance with all Environmental Laws and
Environmental Permits other than noncompliance which could not reasonably be
expected to have a Material Adverse Effect; (ii) implement any and all
investigation, remediation, removal and response actions which are appropriate
or necessary to maintain the value and marketability of the Real Estate or to
otherwise comply with Environmental Laws and Environmental Permits pertaining to
the presence, generation, treatment, storage, use, disposal, transportation or
Release of any Hazardous Material on, at, in, under, above, to, from or about
any of its Real Estate; (iii) notify Agent promptly after such Credit Party
becomes aware of any violation of Environmental Laws or Environmental Permits or
any Release on, at, in, under, above, to, from or about any Real Estate which is
reasonably likely to result in Environmental Liabilities in excess of $50,000;
and (iv) promptly forward to Agent a copy of any order, notice, request for
information or any communication or report received by such Credit Party in
connection with any such violation or Release or any other matter relating to
any Environmental Laws or Environmental Permits that could reasonably be
expected to result in Environmental Liabilities in excess of $50,000, in each
case whether or not the Environmental Protection Agency or any Governmental
Authority has taken or threatened any action in connection with any such
violation, Release or other matter. If Agent at any time has a reasonable basis
to believe that there may be a violation of any Environmental Laws or
Environmental Permits by any Credit Party or any Environmental Liability arising
thereunder, or a Release of Hazardous Materials on, at, in, under, above, to,
from or about any of its Real Estate, which, in each case, could reasonably be
expected to have a Material Adverse Effect, then each Credit Party shall, upon
Agent's written request (i) cause the performance of such environmental audits
including subsurface sampling of soil and groundwater, and preparation of such
environmental reports, at Borrower's expense, as Agent may from time to time
reasonably request, which shall be conducted by reputable environmental
consulting firms reasonably acceptable to Agent and shall be in form and
substance acceptable to Agent, and (ii) permit Agent or its representatives to
have access to all Real Estate for the purpose of conducting such environmental
audits and testing as Agent
deems appropriate, including subsurface sampling of soil and groundwater.
Borrower shall reimburse Agent for the costs of such audits and tests and the
same will constitute a part of the Obligations secured hereunder.
(b) In addition to, and not in limitation of, the foregoing, Borrower
and Holdings shall take all actions necessary to cause all of the remedial
actions, reporting obligations and related items listed in the "Recommended
Actions" sections of the Environmental Issues Summary set forth on DISCLOSURE
SCHEDULE (5.8) to be completed, in a manner satisfactory to the Agent, within
ninety (90) days of the Closing Date.
5.9. LANDLORDS' AGREEMENTS, MORTGAGEE AGREEMENTS AND BAILEE LETTERS.
Each Credit Party shall obtain a landlord's agreement, mortgagee agreement or
bailee letter, as applicable, from the lessor of each leased property or
mortgagee of owned property or with respect to any warehouse, processor or
converter facility or other location where Collateral is located, which
agreement or letter shall contain a waiver or subordination of all Liens or
claims that the landlord, mortgagee or bailee may assert against the Inventory
or Collateral at that location, and shall otherwise be satisfactory in form and
substance to Agent. After the Closing Date, no real property or warehouse space
shall be leased or acquired by any Credit Party and no Inventory shall be
shipped to a processor or converter under arrangements established after the
Closing Date without the prior written consent of Agent (which consent, in
Agent's discretion, may be conditioned upon the exclusion from the Revolving
Borrowing Base of Eligible Inventory at that location or the establishment of
Reserves acceptable to Agent) or, unless and until a satisfactory landlord or
mortgagee agreement or bailee letter, as appropriate, shall first have been
obtained with respect to such location. Each Credit Party shall timely and fully
pay and perform its obligations under all leases and other agreements with
respect to each leased location or public warehouse where any Collateral is or
may be located.
5.10. CHIEF FINANCIAL OFFICER. On or prior to April 15, 2002, Borrower
shall have hired a full-time employee to act as Borrower's chief financial
officer, provided that such individual shall be acceptable to Agent in its sole
discretion (the "NEW CFO"). Until such time as Borrower has hired the New CFO,
one or more representatives of CBW shall continue to act as Borrower's financial
management advisor upon substantially the same terms and with the same duties
and responsibilities, as on the Closing Date.
5.11. OPERATING COMMITTEE. On or before April 15, 2002, Borrower shall
create an operating committee composed of Xxxxxxx Xxxxxx, Xxxxxxx Xxxxxx, the
New CFO and a representative designated by CBW (the "OPERATING COMMITTEE").
Borrower shall cause the Operating Committee to (i) prepare an annual strategic
plan and updates thereto on a regular basis and as otherwise necessary to
reflect changes in Borrower's condition (financial and otherwise), (ii) evaluate
Borrower's performance relative to the strategic plan and implement actions
designed to remedy any deviations
from said plan and (iii) take such other actions as the Borrower may deem
necessary from time to time. Borrower shall cause the Operating Committee to
meet regularly, but no less frequently than quarterly. Borrower shall cause a
designee of CBW to remain on the Operating Committee until such time as CBW's
engagement by Borrower terminates; provided that upon the termination of CBW's
engagement, the CBW representative on the Operating Committee shall
automatically be removed without any further action by any party.
Notwithstanding anything to the contrary set forth in this Section 5.11, the
Operating Committee shall only have the rights and obligations set forth in this
Section 5.11 and all other rights and obligations with respect to Borrower's
operations and management shall be retained by the manager and/or members of
Borrower in accordance with the provisions of Borrower's operating agreement.
5.12. VENDOR PAYMENT TERMS. Within thirty (30) days following the
Closing Date, Agent shall have received a report from a third party consultant
engaged by Borrower (at Borrower's expense) and acceptable to the Agent that the
vendor payment terms for those vendors noted with a "*" on DISCLOSURE SCHEDULE
3.21(b) have been verified as true and accurate as of the Closing Date, which
report shall be in the form and substance satisfactory to the Agent.
5.13. VEHICLE TITLES. Within sixty (60) days following the Closing
Date, Borrower shall have delivered to Agent, in form and substance satisfactory
to Agent, evidence that all vehicles owned by Borrower have been properly titled
in Borrower's name.
5.14. XXXXXXX XXXXXX EMPLOYMENT AGREEMENT. Within thirty (30) days
following the Closing Date, Borrower shall have amended the employment agreement
of Xxxxxxx Xxxxxx in a manner acceptable to Agent.
5.15. CASH MANAGEMENT SYSTEMS. Within fifteen (15) days following the
Closing Date, Borrower shall have executed, and caused to have been executed by
one or more banks, such cash management agreements as are required by Annex C
and the Agent including, without limitation, pledge agreements for account nos.
000-000-0, 000-000-0, 000-000-0 and 000-000-0 at Xxxxxx Trust & Savings Bank and
account 2000001779325 at First Union National Bank.
5.16. FURTHER ASSURANCES. Each Credit Party executing this Agreement
agrees that it shall and shall cause each other Credit Party to, at such Credit
Party's expense and upon request of Agent, duly execute and deliver, or cause to
be duly executed and delivered, to Agent such further instruments and do and
cause to be done such further acts as may be necessary or proper in the
reasonable opinion of Agent to carry out more effectively the provisions and
purposes of this Agreement or any other Loan Document.
6. NEGATIVE COVENANTS
Each Credit Party executing this Agreement jointly and severally
agrees as to all Credit Parties that, without the prior written consent of Agent
and the Requisite Lenders, from and after the date hereof until the Termination
Date:
6.1. MERGERS, SUBSIDIARIES, ETC. No Credit Party shall directly or
indirectly, by operation of law or otherwise, (a) form or acquire any
Subsidiary, or (b) merge with, consolidate with, acquire all or substantially
all of the assets or capital stock of, or otherwise combine with or acquire, any
Person.
6.2. INVESTMENTS; LOANS AND ADVANCES. Except as otherwise expressly
permitted by this SECTION 6, no Credit Party shall make or permit to exist any
investment in, or make, accrue or permit to exist loans or advances of money to,
any Person, through the direct or indirect lending of money, holding of
securities or otherwise, except that (a) Borrower may hold investments comprised
of notes payable, or stock or other securities issued by Account Debtors to
Borrower pursuant to negotiated agreements with respect to settlement of such
Account Debtor's Accounts in the ordinary course of business, so long as the
aggregate amount of such Accounts so settled by Borrower after the Closing Date
does not exceed $100,000; (b) each Credit Party may maintain its existing
investments in its Subsidiaries as of the Closing Date; (c) Borrower may hold
the Holdings Note evidencing the $5,000,000 loan previously made to Holdings and
evidenced thereby; and (d) other investments not exceeding $100,000 in the
aggregate at any time outstanding.
6.3. INDEBTEDNESS. (a) No Credit Party shall create, incur, assume or
permit to exist any Indebtedness, except (without duplication) (i) Indebtedness
secured by purchase money security interests and Capitalized Leases permitted in
clause (c) of Section 6.7, (ii) the Loans and the other Obligations, (iii)
unfunded pension fund and other employee benefit plan obligations and
liabilities to the extent they are permitted to remain unfunded under applicable
law, (iv) in the case of Holdings, Indebtedness evidenced by the Holdings Note,
(v) existing Indebtedness described in DISCLOSURE SCHEDULE (6.3) and
refinancings thereof or amendments or modifications thereto which do not have
the effect of increasing the principal amount thereof or changing the
amortization thereof (other than to extend the same) and which are otherwise on
terms and conditions no less favorable to any Credit Party, Agent or any Lender,
as reasonably determined by Agent, than the terms of the Indebtedness being
refinanced, amended or modified, (vi) the Existing Vendor Notes, and (vii)
promissory notes issued to vendors in settlement of accounts payable owed to
such vendors not in excess of $1,000,000 in the aggregate issued after the
Closing Date, provided that such notes are not secured by any assets or property
of any Credit Party and are otherwise in form and substance satisfactory to
Agent.
(b) No Credit Party shall, directly or indirectly, voluntarily
purchase, redeem, defease or prepay any principal of, premium, if any, interest
or other amount payable in respect of any Indebtedness, other than (i) the
Obligations, (ii) Indebtedness
evidenced by the Holdings Note, and (iii) Indebtedness secured by a Permitted
Encumbrance if the asset securing such Indebtedness has been sold or otherwise
disposed of in accordance with SECTIONS 6.8(b), (c) or (d).
6.4. EMPLOYEE LOANS AND AFFILIATE TRANSACTIONS. (a) Except as
otherwise expressly permitted in this Section 6 with respect to Affiliates, no
Credit Party shall enter into or be a party to any transaction with any other
Credit Party or any Affiliate thereof except in the ordinary course of and
pursuant to the reasonable requirements of such Credit Party's business and upon
fair and reasonable terms that are no less favorable to such Credit Party than
would be obtained in a comparable arm's length transaction with a Person not an
Affiliate of such Credit Party; PROVIDED, that (i) so long as no Event of
Default has occurred or would occur as a result thereof Borrower and Holdings
shall be permitted to reimburse MIG for out-of-pocket expenses and costs
incurred by MIG on behalf of the Credit Parties to the extent required and
contemplated by the Credit Parties' constituent documents as in effect on the
date hereof but in no event in an amount exceeding (A) $258,000 for the period
ending June 30, 1999, (B) $79,000 per month from July 1, 1999 until the Closing
Date and (C) $45,000 per month thereafter (such amount to be pro-rated for
partial months), (ii) Holdings shall be permitted to be a party to the Tax
Sharing Agreement and, subject to SECTION 6.14, perform its obligations
thereunder, and (iii) the Credit Parties shall be permitted to enter into the
transactions relating to the Lebanon IRBs, the IRB Assignment Documents, the IRB
Indenture and the IRB Lease Agreement. In addition, if any such transaction or
series of related transactions involves payments in excess of $250,000 in the
aggregate, the terms of these transactions must be disclosed in advance to Agent
and Lenders. All such transactions existing as of the date hereof are described
on DISCLOSURE SCHEDULE (6.4(a)). The parties hereto acknowledge and agree that
each January Agent shall be permitted to review the expenses referred to in
clause (i)(B) above and as a result of such review Agent may in the exercise of
its reasonable credit judgment adjust the amount of expenses permitted by such
clause (i)(B) above.
(b) No Credit Party shall enter into any lending or borrowing
transaction with any employees of any Credit Party, except loans to their
respective employees on an arm's-length basis in the ordinary course of business
consistent with past practices for travel expenses, relocation costs and similar
purposes up to a maximum of $10,000 to any employee and up to a maximum of
$30,000 in the aggregate at any one time outstanding.
6.5. CAPITAL STRUCTURE AND BUSINESS. No Credit Party shall (a) make
any changes in any of its business objectives, purposes or operations which
could reasonably be expected to adversely affect the repayment of the Loans or
any of the other Obligations or could reasonably be expected to have or result
in a Material Adverse Effect, (b) make any change in its capital structure as
described on DISCLOSURE SCHEDULE (3.8), including the issuance of any shares of
Stock (other than the issuance of Stock in connection with the exercise of the
Borrower Warrant), warrants (other than the
Borrower Warrant) or other securities convertible into Stock or any revision of
the terms of its outstanding Stock (other than the issuance of Stock upon
exercise of the Borrower Warrant), or (c) amend its charter or bylaws,
membership agreements, operating agreements (other than the amended and restated
operating agreement of Borrower executed as of the Closing Date) or other
constituent documents. No Credit Party shall engage in any business other than
the businesses currently engaged in by it.
6.6. GUARANTEED INDEBTEDNESS. No Credit Party shall create, incur,
assume or permit to exist any Guaranteed Indebtedness except (a) by endorsement
of instruments or items of payment for deposit to the general account of any
Credit Party, and (b) for Guaranteed Indebtedness incurred for the benefit of
any other Credit Party if the primary obligation is expressly permitted by this
Agreement.
6.7. LIENS. No Credit Party shall create, incur, assume or permit to
exist any Lien on or with respect to its Accounts or any of its other properties
or assets (whether now owned or hereafter acquired) except for (a) Permitted
Encumbrances; (b) Liens in existence on the date hereof and summarized on
DISCLOSURE SCHEDULE (6.7); (c) Liens created after the date hereof by
conditional sale or other title retention agreements (including Capital Leases)
or in connection with purchase money Indebtedness with respect to Equipment and
Fixtures acquired by any Credit Party in the ordinary course of business,
involving the incurrence of an aggregate amount of purchase money Indebtedness
and Capital Lease Obligations of not more than $500,000 outstanding at any one
time for all such Liens (provided that such Liens attach only to the assets
subject to such purchase money debt and such Indebtedness is incurred within
twenty (20) days following such purchase and does not exceed 100% of the
purchase price of the subject assets); and (d) other Liens securing Indebtedness
not exceeding $100,000 in the aggregate at any time outstanding, so long as such
Liens do not attach to any Accounts or Inventory or any property included in the
real property or Equipment appraisals previously delivered to Agent. In
addition, no Credit Party shall become a party to any agreement, note, indenture
or instrument, or take any other action, which would prohibit the creation of a
Lien on any of its properties or other assets in favor of Agent, on behalf of
itself and Lenders, as additional collateral for the Obligations, except
operating leases, Capital Leases (including the IRB Lease Agreement), the IRB
Indenture, or Licenses which prohibit Liens upon the assets that are subject
thereto.
6.8. SALE OF STOCK AND ASSETS. No Credit Party shall sell, transfer,
convey, assign or otherwise dispose of any of its properties or other assets,
including the capital Stock of any of its Subsidiaries (whether in a public or a
private offering or otherwise) or any of their Accounts, other than (a) the sale
of Inventory in the ordinary course of business, (b) the sale, transfer,
conveyance or other disposition by a Credit Party of assets that are obsolete or
no longer used or useful in such Credit Party's business and having a value not
exceeding $50,000 in any single transaction or $100,000 in the aggregate in any
Fiscal Year, and (c) other Equipment and Fixtures having a value not exceeding
$50,000 in any single transaction or $100,000 in the aggregate in any
Fiscal Year. With respect to any disposition of assets or other properties
permitted pursuant to CLAUSE (b) and CLAUSE (c) above, Agent agrees on
reasonable prior written notice to release its Lien on such assets or other
properties in order to permit the applicable Credit Party to effect such
disposition and shall execute and deliver to Borrower, at Borrower's expense,
appropriate UCC-3 termination statements and other releases as reasonably
requested by Borrower.
6.9. ERISA. No Credit Party shall, or shall cause or permit any ERISA
Affiliate to, cause or permit to occur an event which could result in the
imposition of a Lien under Section 412 of the IRC or Section 302 or 4068 of
ERISA or cause or permit to occur an ERISA Event to the extent such ERISA Event
could reasonably be expected to have a Material Adverse Effect.
6.10. FINANCIAL COVENANTS. Borrower shall not breach or fail to comply
with any of the Financial Covenants (the "FINANCIAL COVENANTS") set forth in
ANNEX G.
6.11. HAZARDOUS MATERIALS. No Credit Party shall cause or permit a
Release of any Hazardous Material on, at, in, under, above, to, from or about
any of the Real Estate where such Release would (a) violate in any respect, or
form the basis for any Environmental Liabilities under, any Environmental Laws
or Environmental Permits or (b) otherwise adversely impact the value or
marketability of any of the Real Estate or any of the Collateral, other than
such violations or Environmental Liabilities which could not reasonably be
expected to have a Material Adverse Effect.
6.12. SALE-LEASEBACKS. No Credit Party shall engage in any
sale-leaseback, synthetic lease or similar transaction involving any of its
assets.
6.13. CANCELLATION OF INDEBTEDNESS. No Credit Party shall cancel any
claim or debt owing to it, except for reasonable consideration negotiated on an
arm's-length basis and in the ordinary course of its business consistent with
past practices.
6.14. RESTRICTED PAYMENTS. No Credit Party shall make any Restricted
Payment, except (a) dividends and distributions by Subsidiaries of Borrower paid
to Borrower, (b) employee loans permitted under Section 6.4(b) above, (c) the
payments to MIG permitted by clause (i) of the proviso contained in Section
6.4(a), and (d) distributions by Borrower to Holdings, and in turn by Holdings
to MIG for purposes of fulfilling Holdings obligations under the Tax Sharing
Agreement, so long as (i) the amount thereof does not exceed the amount payable
by Holdings to MIG pursuant to the terms of the Tax Sharing Agreement determined
as if Holdings had no assets other than its equity interests in Borrower and no
other source of income other than in connection with such equity interests, (ii)
any such distribution is made no earlier than two Business Days prior to the due
date of the applicable payment pursuant to the Tax Sharing Agreement and (iii)
no Default or Event of Default shall exist or would result as a result of such
distributions; PROVIDED, HOWEVER, that the amount permitted to be distributed to
Holdings from Borrower and, in turn, from Holdings to MIG pursuant to this
Section
6.14(d) shall be (A) reduced by any amounts due Holdings from MIG pursuant to
the Tax Sharing Agreement and (B) limited to the amount of tax attributable to
the income of the Borrower that is actually paid (taking into account available
net operating losses, credits and other offsets and deductions ("TAX ASSETS"))
to the applicable taxing authority by MIG or the affiliated group of
corporations that file a consolidated federal income tax return of which MIG is
a member or the common parent ("XXXXXX GROUP") (and for purposes of this
proviso, to the extent that there are insufficient Tax Assets available to the
Xxxxxx Group to completely offset its taxable income, such Tax Assets shall be
allocated between the taxable income of each of Borrower, Xxxxxx Metalcraft Co.,
Xxxxxx Metalcraft Co. of North Carolina, Inc., B&W Fabricators, Inc., Xxxxxx
Metalcraft Co. of South Carolina, Inc., and Mid-Central Plastics. Inc. on a pro
rata basis based upon the amount of income generated by such entities for the
year in question).
6.15. CHANGE OF CORPORATE OR LIMITED LIABILITY COMPANY NAME OR
LOCATION; CHANGE OF FISCAL YEAR. No Credit Party shall (a) change its corporate
or limited liability company name, (b) change its chief executive office,
principal place of business, corporate or limited liability company offices or
warehouses or locations at which Collateral is held or stored, or the location
of its records concerning the Collateral, (c) change the type of entity that it
is, (d) change its organization identification number, if any, issued by its
state of incorporation or other organization or (e) change its state of
incorporation or organization in any case without at least thirty (30) days
prior written notice to Agent and after Agent's written acknowledgment that any
reasonable action requested by Agent in connection therewith, including to
continue the perfection of any Liens in favor of Agent, on behalf of Lenders, in
any Collateral, has been completed or taken, and PROVIDED that any such new
location shall be in the continental United States. Without limiting the
foregoing, no Credit Party shall change its name, identity or corporate or
limited liability company structure in any manner which might make any financing
or continuation statement filed in connection herewith seriously misleading
within the meaning of Section 9-402(7) of the Code or any other then applicable
provision of the Code except upon prior written notice to Agent and Lenders and
after Agent's written acknowledgment that any reasonable action requested by
Agent in connection therewith, including to continue the perfection of any Liens
in favor of Agent, on behalf of Lenders, in any Collateral, has been completed
or taken. No Credit Party shall change its Fiscal Year.
6.16. NO IMPAIRMENT OF INTERCOMPANY TRANSFERS. No Credit Party shall
directly or indirectly enter into or become bound by any agreement, instrument,
indenture or other obligation (other than this Agreement and the other Loan
Documents) which could directly or indirectly restrict, prohibit or require the
consent of any Person with respect to the payment of dividends or distributions
or the making or repayment of intercompany loans by a Subsidiary of Borrower to
Borrower.
6.17. NO SPECULATIVE TRANSACTIONS. No Credit Party shall engage in any
transaction involving commodity options, futures contracts or similar
transactions, except solely to hedge against fluctuations in the prices of
commodities owned or purchased by it and the values of foreign currencies
receivable or payable by it and interest swaps, caps or collars.
6.18. LEASES. No Credit Party shall enter into any operating lease for
Equipment or Real Estate, if the aggregate of all such operating lease payments
payable in any year for Holdings and its Subsidiaries on a consolidated basis
would exceed $3,000,000.
6.19. CREDIT PARTIES OTHER THAN BORROWER. None of the Credit Parties
other than Borrower shall engage in any trade or business, or own any assets
(other than Stock of their Subsidiaries) or incur any Indebtedness or Guaranteed
Indebtedness (other than the Obligations and the Holdings Note); PROVIDED that
the IRB Subsidiary shall be the holder of the Lebanon IRBs.
6.20. MODIFICATIONS OF CERTAIN DOCUMENTS. No Credit Party shall amend
or change (or permit or consent to any amendment or change of) the terms of the
Worthington Acquisition Agreement, the Tax Sharing Agreement or any
documentation relating to the Lebanon IRBs, including, without limitation, the
IRB Indenture or the IRB Lease Agreement.
6.21. WORTHINGTON LITIGATION; WORTHINGTON ACQUISITION AGREEMENT.
Without the express written consent of the Agent, no Credit Party shall (i)
settle, withdraw, compromise, or make any payments (in cash or any other form of
consideration) in connection with the Worthington Litigation or (ii) make any
payments (in cash or any other form of consideration) (including the Contingent
Payment (as such term is defined in the Worthington Acquisition Agreement) or
the purchase price adjustment payment contemplated by Section 2.2 of the
Worthington Acquisition Agreement) contemplated or required by the Worthington
Acquisition Agreement. No Credit Party will permit (i) the payment of any
dividends upon the Preferred Stock (as such term is defined in the Worthington
Acquisition Agreement) or (ii) any party (including without limitation MIG) to
amend, cancel or otherwise modify the terms of the Preferred Stock. The Credit
Parties will promptly deliver to Agent copies of pleadings or filings and all
non-privileged case summaries and memorandum, received, filed, sent or otherwise
relating to each of the Worthington Litigation, the Worthington Acquisition
Agreement and the Preferred Stock.
7. TERM
7.1. TERMINATION. The financing arrangements contemplated hereby shall
be in effect until the Commitment Termination Date, and the Loans and all other
Obligations shall be automatically due and payable in full on such date.
7.2. SURVIVAL OF OBLIGATIONS UPON TERMINATION OF FINANCING
ARRANGEMENTS. Except as otherwise expressly provided for in the Loan Documents,
no termination or cancellation (regardless of cause or procedure) of any
financing arrangement under this Agreement shall in any way affect or impair the
obligations, duties and liabilities of the Credit Parties or the rights of Agent
and Lenders relating to any unpaid portion of the Loans or any other
Obligations, due or not due, liquidated, contingent or unliquidated or any
transaction or event occurring prior to such termination, or any transaction or
event, the performance of which is required after the Commitment Termination
Date. Except as otherwise expressly provided herein or in any other Loan
Document, all undertakings, agreements, covenants, warranties and
representations of or binding upon the Credit Parties, and all rights of Agent
and each Lender, all as contained in the Loan Documents, shall not terminate or
expire, but rather shall survive any such termination or cancellation and shall
continue in full force and effect until the Termination Date; provided however,
that in all events the provisions of SECTION 11, the payment obligations under
SECTIONS 1.15 and 1.16, and the indemnities contained in the Loan Documents
shall survive the Termination Date.
8. EVENTS OF DEFAULT: RIGHTS AND REMEDIES
8.1. EVENTS OF DEFAULT. The occurrence of any one or more of the
following events (regardless of the reason therefor) shall constitute an "EVENT
OF DEFAULT" hereunder:
(a) Borrower (i) fails to make any payment of principal of, or
interest on, or Fees owing in respect of, the Loans or any of the other
Obligations when due and payable, or (ii) fails to pay or reimburse Agent or
Lenders for any expense reimbursable hereunder or under any other Loan Document
within ten (10) days following Agent's demand for such reimbursement or payment
of expenses.
(b) Any Credit Party shall fail or neglect to perform, keep or observe
any of the provisions of SECTIONS 1.4, 1.8, 5.4, 5.8(b), 5.10, 5.11, 5.12, 5.14,
5.15 or 6, or any of the provisions set forth in ANNEXES C or G, respectively.
(c) Borrower shall fail or neglect to perform, keep or observe any of
the provisions of SECTION 4 or any provisions set forth in ANNEXES E or F,
respectively, and the same shall remain unremedied for five (5) days or more
after such Credit Party is aware or should have been aware of such failure or
negligence.
(d) Any Credit Party shall fail or neglect to perform, keep or observe
any other provision of this Agreement or of any of the other Loan Documents
(other than any provision embodied in or covered by any other clause of this
SECTION 8.1) and the same shall remain unremedied for thirty (30) days or more
after such Credit Party is aware or should have been aware of such failure or
negligence.
(e) A default or breach shall occur under any other agreement,
document or instrument to which any Credit Party is a party which is not cured
within any applicable grace period, and such default or breach (i) involves the
failure to make any payment when due in respect of any Indebtedness (other than
the Obligations) of any Credit Party in excess of $250,000 in the aggregate, or
(ii) causes, or permits any holder of such Indebtedness or a trustee to cause,
Indebtedness or a portion thereof in excess of $250,000 in the aggregate to
become due prior to its stated maturity or prior to its regularly scheduled
dates of payment, regardless of whether such default is waived, or such right is
exercised, by such holder or trustee.
(f) Any information contained in any Revolving Borrowing Base
Certificate is untrue or incorrect in any respect, or any representation or
warranty herein or in any Loan Document or in any written statement, report,
financial statement or certificate other than a Revolving Borrowing Base
Certificate (but including the Cash Flow Budget and the Operating Budget) made
or delivered to Agent or any Lender by any Credit Party is untrue or incorrect
in any material respect as of the date when made or deemed made.
(g) Assets of any Credit Party with a fair market value of $100,000 or
more shall be attached, seized, levied upon or subjected to a writ or distress
warrant, or come within the possession of any receiver, trustee, custodian or
assignee for the benefit of creditors of any Credit Party and such condition
continues for forty-five (45) days or more.
(h) A case or proceeding shall have been commenced against any Credit
Party seeking a decree or order in respect of any Credit Party (i) under Title
11 of the United States Code, as now constituted or hereafter amended or any
other applicable federal, state or foreign bankruptcy or other similar law, (ii)
appointing a custodian, receiver, liquidator, assignee, trustee or sequestrator
(or similar official) for any Credit Party or of any substantial part of any
such Person's assets, or (iii) ordering the winding-up or liquidation of the
affairs of any Credit Party, and such case or proceeding shall remain
undismissed or unstayed for sixty (60) days or more or such court shall enter a
decree or order granting the relief sought in such case or proceeding.
(i) Any Credit Party (i) shall file a petition seeking relief under
Title 11 of the United States Code, as now constituted or hereafter amended, or
any other applicable federal, state or foreign bankruptcy or other similar law,
(ii) shall fail to contest in a timely and appropriate manner or shall consent
to the institution of proceedings thereunder or to the filing of any such
petition or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or similar official) of any
Credit Party or of any substantial part of any such Person's assets, (iii) shall
make an assignment for the benefit of creditors, (iv) shall take any corporate
or limited liability company action in furtherance of any of the foregoing; or
(v) shall admit
in writing its inability to, or shall be generally unable to, pay its debts as
such debts become due.
(j) A final judgment or judgments for the payment of money in excess
of $100,000 in the aggregate at any time outstanding shall be rendered against
any Credit Party and the same shall not, within thirty (30) days after the entry
thereof, have been discharged or execution thereof stayed or bonded pending
appeal, or shall not have been discharged prior to the expiration of any such
stay.
(k) Any material provision of any Loan Document shall for any reason
cease to be valid, binding and enforceable in accordance with its terms (or any
Credit Party shall challenge the enforceability of any Loan Document or shall
assert in writing, or engage in any action or inaction based on any such
assertion, that any provision of any of the Loan Documents has ceased to be or
otherwise is not valid, binding and enforceable in accordance with its terms),
or any security interest created under any Loan Document shall cease to be a
valid and perfected first priority security interest or Lien (except as
otherwise permitted herein or therein) in any of the Collateral purported to be
covered thereby.
(l) Any Change of Control shall occur.
(m) Any event shall occur as a result of which revenue-producing
activities cease or are substantially curtailed at any facility of Borrower
generating more than 15% (or 25% if such facility is covered by insurance,
including business interruption insurance acceptable to Agent) of Borrower's
consolidated revenues for the Fiscal Year preceding such event and such
cessation or curtailment continues for more than twenty (20) days.
(n) Without limiting the provisions of clause (e) above, a default or
breach shall occur under any of the documentation relating to the Lebanon IRBs,
including, without limitation, the IRB Indenture or the IRB Lease Agreement,
which is not cured within any applicable grace period, and such default or
breach (i) involves the failure to make any payment when due in respect of any
obligations under such documentation, or (ii) causes, or permits any holder of
such obligation or a trustee to cause such obligation to become due prior to its
stated maturity or prior to its regularly scheduled dates of payment, regardless
of whether such default is waived, or such right is exercised, by such holder or
trustee.
(o) Any Person other than the IRB Subsidiary (or its trustee pursuant
to the terms of the IRB Indenture) or Agent, on behalf of Lenders, shall hold
the Lebanon IRBs or have any rights related thereto.
(p) The Chapter 7 Trustee in the In re: Outboard Marine Corporation
Chapter 7 bankruptcy case filed in the Northern District of Illinois bearing
case number 00-37405 shall obtain a judgment against the Borrower for an amount
in excess of
$100,000 in the aggregate, or the Borrower shall settle or compromise any claim
brought or asserted by said Chapter 7 Trustee for an amount in excess of
$100,000 in the aggregate.
(q) All of the Lebanon IRBs (other than those which have matured and
been paid-in-full as of the Closing Date) shall not have been delivered to Agent
within forty-five (45) days following the Closing Date; such Lebanon IRB's to be
in such form as contemplated by the certain Letter of Direction dated April 15,
1999 from Worthington Industries to Firstar Bank, N.A.
8.2. REMEDIES. (a) If any Event of Default shall have occurred and be
continuing or if a Default shall have occurred and be continuing and Agent or
Requisite Revolving Lenders shall have determined not to make any Advances or
incur any Letter of Credit Obligations so long as that specific Default is
continuing, Agent may (and at the written request of the Requisite Revolving
Lenders shall), without notice, suspend the Revolving Loan facility with respect
to further Advances and/or the incurrence of further Letter of Credit
Obligations whereupon any further Advances and Letter of Credit Obligations
shall be made or extended in Agent's sole discretion (or in the sole discretion
of the Requisite Revolving Lenders, if such suspension occurred at their
direction) so long as such Default or Event of Default is continuing. If any
Default or Event of Default shall have occurred and be continuing, Agent may
(and at the written request of Requisite Lenders shall), without notice except
as otherwise expressly provided herein, increase the rate of interest applicable
to the Loans and the Letter of Credit Fees to the Default Rate.
(b) If any Event of Default shall have occurred and be continuing,
Agent may (and at the written request of the Requisite Lenders shall), without
notice, (i) terminate the Revolving Loan facility with respect to further
Advances or the incurrence of further Letter of Credit Obligations; (ii) declare
all or any portion of the Obligations, including all or any portion of any Loan
to be forthwith due and payable, and require that the Letter of Credit
Obligations be cash collateralized as provided in ANNEX B, all without
presentment, demand, protest or further notice of any kind, all of which are
expressly waived by Borrower and each other Credit Party; and (iii) exercise any
rights and remedies provided to Agent under the Loan Documents and/or at law or
equity, including all remedies provided under the Code; PROVIDED, HOWEVER, that
upon the occurrence of an Event of Default specified in SECTIONS 8.1(g), (h) or
(i), the Revolving Loan facility shall be immediately terminated and all of the
Obligations, including the aggregate Revolving Loan, shall become immediately
due and payable without declaration, notice or demand by any Person.
8.3. WAIVERS BY CREDIT PARTIES. Except as otherwise provided for in
this Agreement or by applicable law, each Credit Party waives: (a) presentment,
demand and protest and notice of presentment, dishonor, notice of intent to
accelerate, notice of acceleration, protest, default, nonpayment, maturity,
release, compromise, settlement, extension or renewal of any or all commercial
paper, accounts, contract rights,
documents, instruments, chattel paper and guaranties at any time held by Agent
on which any Credit Party may in any way be liable, and hereby ratifies and
confirms whatever Agent may do in this regard, (b) all rights to notice and a
hearing prior to Agent's taking possession or control of, or to Agent's replevy,
attachment or levy upon, the Collateral or any bond or security which might be
required by any court prior to allowing Agent to exercise any of its remedies,
and (c) the benefit of all valuation, appraisal, marshaling and exemption laws.
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT
9.1. ASSIGNMENT AND PARTICIPATIONS. (a) The Credit Parties signatory
hereto consent to any Lender's assignment of, and/or sale of participations in,
at any time or times, the Loan Documents, Loans, Letter of Credit Obligations
and any Commitment or of any portion thereof or interest therein, including any
Lender's rights, title, interests, remedies, powers or duties thereunder,
whether evidenced by a writing or not. Any assignment by a Lender shall (i)
require the consent of Agent and (so long as no Default or Event of Default has
occurred and is continuing) the Borrower (which shall not be unreasonably
withheld or delayed) and the execution of an assignment agreement (an
"ASSIGNMENT AGREEMENT") substantially in the from attached hereto as EXHIBIT
9.1(a) and otherwise in form and substance satisfactory to, and acknowledged by,
Agent; (ii) be conditioned on such assignee Lender representing to the assigning
Lender and Agent that it is purchasing the applicable Loans to be assigned to it
for its own account, for investment purposes and not with a view to the
distribution thereof; (iii) if a partial assignment, be in an amount at least
equal to $5,000,000 and, after giving effect to any such partial assignment, the
assigning Lender shall have retained Commitments in an amount at least equal to
$5,000,000; and (iv) include a payment to Agent of an assignment fee of $3,500.
In the case of an assignment by a Lender under this SECTION 9.1, the assignee
shall have, to the extent of such assignment, the same rights, benefits and
obligations as it would if it were a Lender hereunder. The assigning Lender
shall be relieved of its obligations hereunder with respect to its Commitments
or assigned portion thereof from and after the date of such assignment. Borrower
hereby acknowledges and agrees that any assignment will give rise to a direct
obligation of Borrower to the assignee and that the assignee shall be considered
to be a "Lender". In all instances, each Lender's liability to make Loans
hereunder shall be several and not joint and shall be limited to such Lender's
Pro Rata Share of the applicable Commitment. In the event Agent or any Lender
assigns or otherwise transfers all or any part of the Obligations, Agent or any
such Lender shall so notify Borrower and Borrower shall, upon the request of
Agent or such Lender, execute new Notes in exchange for the Notes, if any, being
assigned. Notwithstanding the foregoing provisions of this SECTION 9.1(a), any
Lender may at any time pledge the Obligations held by it and such Lender's
rights under this Agreement and the other Loan Documents to a Federal Reserve
Bank, and any Lender that is an investment fund may assign the Obligations held
by it and such Lender's rights under this Agreement and the other Loan Documents
to another investment fund managed by the same investment advisor; PROVIDED,
HOWEVER, that no such pledge to a
Federal Reserve Bank shall release such Lender from such Lender's obligations
hereunder or under any other Loan Document.
(b) Any participation by a Lender of all or any part of its
Commitments shall be made with the understanding that all amounts payable by
Borrower hereunder shall be determined as if that Lender had not sold such
participation, and that the holder of any such participation shall not be
entitled to require such Lender to take or omit to take any action hereunder
except actions directly affecting (i) any reduction in the principal amount of,
or interest rate or Fees payable with respect to, any Loan in which such holder
participates, (ii) any extension of the scheduled amortization of the principal
amount of any Loan in which such holder participates or the final maturity date
thereof, and (iii) any release of all or substantially all of the Collateral
(other than in accordance with the terms of this Agreement, the Collateral
Documents or the other Loan Documents). Solely for purposes of SECTIONS 1.13,
1.15, 1.16 and 9.8, Borrower acknowledges and agrees that a participation shall
give rise to a direct obligation of Borrower to the participant and the
participant shall be considered to be a "Lender". Except as set forth in the
preceding sentence neither Borrower nor any Credit Party shall have any
obligation or duty to any participant. Neither Agent nor any Lender (other than
the Lender selling a participation) shall have any duty to any participant and
may continue to deal solely with the Lender selling a participation as if no
such sale had occurred.
(c) Except as expressly provided in this SECTION 9.1, no Lender shall,
as between Borrower and that Lender, or Agent and that Lender, be relieved of
any of its obligations hereunder as a result of any sale, assignment, transfer
or negotiation of, or granting of participation in, all or any part of the
Loans, the Notes or other Obligations owed to such Lender.
(d) Each Credit Party executing this Agreement shall assist any Lender
permitted to sell assignments or participations under this SECTION 9.1 as
reasonably required to enable the assigning or selling Lender to effect any such
assignment or participation, including the execution and delivery of any and all
agreements, notes and other documents and instruments as shall be requested and,
if requested by Agent in connection with the primary syndication of the
Commitments and/or the Loans, the preparation of informational materials for,
and the participation of management in meetings with, potential assignees or
participants. Each Credit Party executing this Agreement shall certify the
correctness, completeness and accuracy of all descriptions of the Credit Parties
and their affairs contained in any selling materials provided by them and all
other information provided by them and included in such materials, except that
any Projections delivered by Borrower shall only be certified by Borrower as
having been prepared by Borrower in compliance with the representations
contained in SECTION 3.4(c).
(e) A Lender may furnish any information concerning Credit Parties in
the possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants). Each Lender shall obtain
from assignees or participants confidentiality covenants substantially
equivalent to those contained in SECTION 11.8.
(f) So long as no Event of Default shall have occurred and be
continuing, no Lender shall assign or sell participations in any portion of its
Loans or Commitments to a potential Lender or participant, if, as of the date of
the proposed assignment or sale, the assignee Lender or participant would be
subject to capital adequacy or similar requirements under SECTION 1.16(a),
increased costs under SECTION 1.16(b), an inability to fund LIBOR Loans under
SECTION 1.16(c), or withholding taxes in accordance with SECTION 1.15(a).
9.2. APPOINTMENT OF AGENT. GE Capital is hereby appointed to act on
behalf of all Lenders as Agent under this Agreement and the other Loan
Documents. The provisions of this SECTION 9.2 are solely for the benefit of
Agent and Lenders and no Credit Party nor any other Person shall have any rights
as a third party beneficiary of any of the provisions hereof. In performing its
functions and duties under this Agreement and the other Loan Documents, Agent
shall act solely as an agent of Lenders and does not assume and shall not be
deemed to have assumed any obligation toward or relationship of agency or trust
with or for any Credit Party or any other Person. Agent shall have no duties or
responsibilities except for those expressly set forth in this Agreement and the
other Loan Documents. The duties of Agent shall be mechanical and administrative
in nature and Agent shall not have, or be deemed to have, by reason of this
Agreement, any other Loan Document or otherwise a fiduciary relationship in
respect of any Lender. Neither Agent nor any of its Affiliates nor any of their
respective officers, directors, employees, agents or representatives shall be
liable to any Lender for any action taken or omitted to be taken by it hereunder
or under any other Loan Document, or in connection herewith or therewith, except
for damages caused by its or their own gross negligence or willful misconduct.
If Agent shall request instructions from Requisite Lenders, Requisite
Revolving Lenders, or all affected Lenders with respect to any act or action
(including failure to act) in connection with this Agreement or any other Loan
Document, then Agent shall be entitled to refrain from such act or taking such
action unless and until Agent shall have received instructions from Requisite
Lenders, Requisite Revolving Lenders, or all affected Lenders, as the case may
be, and Agent shall not incur liability to any Person by reason of so
refraining. Agent shall be fully justified in failing or refusing to take any
action hereunder or under any other Loan Document (a) if such action would, in
the opinion of Agent, be contrary to law or the terms of this Agreement or any
other Loan Document, (b) if such action would, in the opinion of Agent, expose
Agent to Environmental Liabilities or (c) if Agent shall not first be
indemnified to its satisfaction against any and all liability and expense which
may be incurred by it by reason of taking
or continuing to take any such action. Without limiting the foregoing, no Lender
shall have any right of action whatsoever against Agent as a result of Agent
acting or refraining from acting hereunder or under any other Loan Document in
accordance with the instructions of Requisite Lenders, Requisite Revolving
Lenders, or all affected Lenders, as applicable.
9.3. AGENT'S RELIANCE, ETC. Neither Agent nor any of its Affiliates
nor any of their respective directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it or them under or in
connection with this Agreement or the other Loan Documents, except for damages
caused by its or their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, Agent: (a) may treat the payee of
any Note as the holder thereof until Agent receives written notice of the
assignment or transfer thereof signed by such payee and in form satisfactory to
Agent; (b) may consult with legal counsel, independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (c) makes no warranty or representation to any
Lender and shall not be responsible to any Lender for any statements, warranties
or representations made in or in connection with this Agreement or the other
Loan Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement or the other Loan Documents on the part of any Credit Party or to
inspect the Collateral (including the books and records) of any Credit Party;
(e) shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
the other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; and (f) shall incur no liability under or in respect of this
Agreement or the other Loan Documents by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telecopy, telegram,
cable or telex) believed by it to be genuine and signed or sent by the proper
party or parties.
9.4. GE CAPITAL AND AFFILIATES. With respect to its Commitments
hereunder, GE Capital shall have the same rights and powers under this Agreement
and the other Loan Documents as any other Lender and may exercise the same as
though it were not Agent; and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated, include GE Capital in its individual capacity. GE
Capital and its Affiliates may lend money to, invest in, and generally engage in
any kind of business with, any Credit Party, any of their Affiliates and any
Person who may do business with or own securities of any Credit Party or any
such Affiliate, all as if GE Capital were not Agent and without any duty to
account therefor to Lenders. GE Capital and its Affiliates may accept fees and
other consideration from any Credit Party for services in connection with this
Agreement or otherwise without having to account for the same to Lenders. Each
Lender acknowledges the potential conflict of interest between GE Capital as a
Lender holding disproportionate interests in the Loans and GE Capital as Agent.
9.5. LENDER CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon Agent or any other Lender and based on
the Financial Statements referred to in SECTION 3.4(a) and such other documents
and information as it has deemed appropriate, made its own credit and financial
analysis of the Credit Parties and its own decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement. Each
Lender acknowledges the potential conflict of interest of each other Lender as a
result of Lenders holding disproportionate interests in the Loans, and expressly
consents to, and waives any claim based upon, such conflict of interest.
9.6. INDEMNIFICATION. Lenders agree to indemnify Agent (to the extent
not reimbursed by Credit Parties and without limiting the obligations of Credit
Parties hereunder), ratably according to their respective Pro Rata Shares, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against
Agent in any way relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted by Agent in connection therewith;
PROVIDED, HOWEVER, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from Agent's gross negligence or
willful misconduct. Without limiting the foregoing, each Lender agrees to
reimburse Agent promptly upon demand for its ratable share of any out-of-pocket
expenses (including counsel fees) incurred by 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
and each other Loan Document, to the extent that Agent is not reimbursed for
such expenses by Credit Parties.
9.7. SUCCESSOR AGENT. Agent may resign at any time by giving not less
than thirty (30) days' prior written notice thereof to Lenders and Borrower.
Upon any such resignation, the Requisite Lenders shall have the right to appoint
a successor Agent. If no successor Agent shall have been so appointed by the
Requisite Lenders and shall have accepted such appointment within 30 days after
the resigning Agent's giving notice of resignation, then the resigning Agent
may, on behalf of Lenders, appoint a successor Agent, which shall be a Lender,
if a Lender is willing to accept such appointment, or otherwise shall be a
commercial bank or financial institution or a subsidiary of a commercial bank or
financial institution if such commercial bank or financial institution is
organized under the laws of the United States of America or of any State thereof
and has a combined capital and surplus of at least $300,000,000. If no successor
Agent has been appointed pursuant to the foregoing, by the 30th day after the
date such notice of resignation was given by the resigning Agent, such
resignation shall become effective and the Requisite Lenders shall thereafter
perform all the duties of Agent hereunder until
such time, if any, as the Requisite Lenders appoint a successor Agent as
provided above. Any successor Agent appointed by Requisite Lenders hereunder
shall be subject to the approval of Borrower, such approval not to be
unreasonably withheld or delayed; PROVIDED that such approval shall not be
required if a Default or an Event of Default shall have occurred and be
continuing. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall succeed to and become vested with
all the rights, powers, privileges and duties of the resigning Agent. Upon the
earlier of the acceptance of any appointment as Agent hereunder by a successor
Agent or the effective date of the resigning Agent's resignation, the resigning
Agent shall be discharged from its duties and obligations under this Agreement
and the other Loan Documents, except that any indemnity rights or other rights
in favor of such resigning Agent shall continue. After any resigning Agent's
resignation hereunder, the provisions of this SECTION 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement and the other Loan Documents.
9.8. SETOFF AND SHARING OF PAYMENTS. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, upon the occurrence and during the continuance of any Event of Default,
each Lender and each holder of any Note is hereby authorized at any time or from
time to time, without notice to any Credit Party or to any other Person, any
such notice being hereby expressly waived, to set off and to appropriate and to
apply any and all balances held by it at any of its offices for the account of
Borrower or any Guarantor (regardless of whether such balances are then due to
Borrower or any Guarantor) and any other properties or assets any time held or
owing by that Lender or that holder to or for the credit or for the account of
Borrower or any Guarantor against and on account of any of the Obligations which
are not paid when due. Any Lender or holder of any Note exercising a right to
set off or otherwise receiving any payment on account of the Obligations in
excess of its Pro Rata Share thereof shall purchase for cash (and the other
Lenders or holders shall sell) such participations in each such other Lender's
or holder's Pro Rata Share of the Obligations as would be necessary to cause
such Lender to share the amount so set off or otherwise received with each other
Lender or holder in accordance with their respective Pro Rata Shares. Borrower
and each Credit Party that is a Guarantor agree, to the fullest extent permitted
by law, that (a) any Lender or holder may exercise its right to set off with
respect to amounts in excess of its Pro Rata Share of the Obligations and may
sell participations in such amount so set off to other Lenders and holders and
(b) any Lender or holders so purchasing a participation in the Loans made or
other Obligations held by other Lenders or holders may exercise all rights of
set-off, bankers' lien, counterclaim or similar rights with respect to such
participation as fully as if such Lender or holder were a direct holder of the
Loans and the other Obligations in the amount of such participation.
Notwithstanding the foregoing, if all or any portion of the set-off amount or
payment otherwise received is thereafter recovered from the Lender that has
exercised the right of set-off, the purchase of participations by that Lender
shall be rescinded and the purchase price restored without interest.
9.9. ADVANCES; PAYMENTS; NON-FUNDING LENDERS; INFORMATION; ACTIONS IN
CONCERT.
(a) ADVANCES; PAYMENTS. (i) Agent shall notify Revolving Lenders,
promptly after receipt of a Notice of Revolving Credit Advance and in any event
prior to 1:00 p.m. (
New York time) on the date such Notice of Revolving Advance
is received, by telecopy, telephone or other similar form of transmission. Each
Revolving Lender shall make the amount of such Lender's Pro Rata Share of such
Revolving Credit Advance available to Agent in same day funds by wire transfer
to Agent's account as set forth in ANNEX H not later than 3:00 p.m. (
New York
time) on the requested funding date, in the case of an Index Rate Loan and not
later than 11:00 a.m. (
New York time) on the requested funding date in the case
of a LIBOR Loan. After receipt of such wire transfers (or, in the Agent's sole
discretion, before receipt of such wire transfers), subject to the terms hereof,
Agent shall make the requested Revolving Credit Advance to Borrower as
designated by Borrower in the Notice of Revolving Credit Advance. All payments
by each Revolving Lender shall be made without setoff, counterclaim or deduction
of any kind.
(ii) On the second (2nd) Business Day of each calendar week or
more frequently as aggregate cumulative payments in excess of $2,000,000 are
received with respect to the Loans (each, a "SETTLEMENT DATE"), Agent will
advise each Lender by telephone, or telecopy of the amount of such Lender's Pro
Rata Share of principal, interest and Fees paid for the benefit of Lenders with
respect to each applicable Loan. Provided that such Lender has funded all
payments or Advances required to be made by it and has purchased all
participations required to be purchased by it under this Agreement and the other
Loan Documents as of such Settlement Date, Agent will pay to each Lender such
Lender's Pro Rata Share of principal, interest and Fees paid by Borrower since
the previous Settlement Date for the benefit of that Lender on the Loans held by
it. To the extent that any Lender (a "NON-FUNDING LENDER") has failed to fund
all such payments and Advances or failed to fund the purchase of all such
participations, Agent shall be entitled to set off the funding short-fall
against that Non-Funding Lender's Pro Rata Share of all payments received from
Borrower. Such payments shall be made by wire transfer to such Lender's account
(as specified by such Lender in ANNEX H or the applicable Assignment Agreement)
not later than 2:00 p.m. (New York time) on the next Business Day following each
Settlement Date.
(b) AVAILABILITY OF LENDER'S PRO RATA SHARE. Agent may assume that
each Revolving Lender will make its Pro Rata Share of each Revolving Credit
Advance available to Agent on each funding date. If such Pro Rata Share is not,
in fact, paid to Agent by such Revolving Lender when due, Agent will be entitled
to recover such amount on demand from such Revolving Lender without set-off,
counterclaim or deduction of any kind. If any Revolving Lender fails to pay the
amount of its Pro Rata Share forthwith upon Agent's demand, Agent shall promptly
notify Borrower and Borrower shall immediately repay such amount to Agent.
Nothing in this SECTION 9.9(b)
or elsewhere in this Agreement or the other Loan Documents shall be deemed to
require Agent to advance funds on behalf of any Revolving Lender or to relieve
any Revolving Lender from its obligation to fulfill its Commitments hereunder or
to prejudice any rights that Borrower may have against any Revolving Lender as a
result of any default by such Revolving Lender hereunder. To the extent that
Agent advances funds to Borrower on behalf of any Revolving Lender and is not
reimbursed therefor on the same Business Day as such Advance is made, Agent
shall be entitled to retain for its account all interest accrued on such Advance
until reimbursed by the applicable Revolving Lender.
(c) RETURN OF PAYMENTS. (i) If Agent pays an amount to a Lender under
this Agreement in the belief or expectation that a related payment has been or
will be received by Agent from Borrower and such related payment is not received
by Agent, then Agent will be entitled to recover such amount from such Lender on
demand without set-off, counterclaim or deduction of any kind.
(ii) If Agent determines at any time that any amount received by
Agent under this Agreement must be returned to Borrower or paid to any other
Person pursuant to any insolvency law or otherwise, then, notwithstanding any
other term or condition of this Agreement or any other Loan Document, Agent will
not be required to distribute any portion thereof to any Lender. In addition,
each Lender will repay to Agent on demand any portion of such amount that Agent
has distributed to such Lender, together with interest at such rate, if any, as
Agent is required to pay to Borrower or such other Person, without set-off,
counterclaim or deduction of any kind.
(d) NON-FUNDING LENDERS. The failure of any Non-Funding Lender to make
any Revolving Credit Advance or any payment required by it hereunder or to
purchase any participation to be made or purchased by it on the date specified
therefor shall not relieve any other Revolving Lender (each such other Revolving
Lender, an "OTHER LENDER") of its obligations to make such Advance or purchase
such participation on such date, but neither any Other Lender nor Agent shall be
responsible for the failure of any Non-Funding Lender to make an Advance or to
purchase a participation required hereunder. Notwithstanding anything set forth
herein to the contrary, a Non-Funding Lender shall not have any voting or
consent rights under or with respect to any Loan Document or constitute a
"Lender" or a "Revolving Lender" (or be included in the calculation of
"Requisite Lenders" or "Requisite Revolving Lenders" hereunder) for any voting
or consent rights under or with respect to any Loan Document.
(e) DISSEMINATION OF INFORMATION. Agent will use reasonable efforts to
provide Lenders with any notice of Default or Event of Default received by Agent
from, or delivered by Agent to, any Credit Party, with notice of any Event of
Default of which Agent has actually become aware and with notice of any action
taken by Agent following any Event of Default; provided, however, that Agent
shall not be liable to any Lender for any failure to do so, except to the extent
that such failure is attributable to Agent's gross negligence or willful
misconduct.
(f) ACTIONS IN CONCERT. Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no Lender
shall take any action to protect or enforce its rights arising out of this
Agreement or the Notes (including exercising any rights of set-off) without
first obtaining the prior written consent of Agent and Requisite Lenders, it
being the intent of Lenders that any such action to protect or enforce rights
under this Agreement and the Notes shall be taken in concert and at the
direction or with the consent of Agent.
10. SUCCESSORS AND ASSIGNS
10.1. SUCCESSORS AND ASSIGNS. This Agreement and the other Loan
Documents shall be binding on and shall inure to the benefit of each Credit
Party, Agent, Lenders and their respective successors and assigns (including, in
the case of any Credit Party, a debtor-in-possession on behalf of such Credit
Party), except as otherwise provided herein or therein. No Credit Party may
assign, transfer, hypothecate or otherwise convey its rights, benefits,
obligations or duties hereunder or under any of the other Loan Documents without
the prior express written consent of Agent and Lenders. Any such purported
assignment, transfer, hypothecation or other conveyance by any Credit Party
without the prior express written consent of Agent and Lenders shall be void.
The terms and provisions of this Agreement are for the purpose of defining the
relative rights and obligations of each Credit Party, Agent and Lenders with
respect to the transactions contemplated hereby and no Person shall be a third
party beneficiary of any of the terms and provisions of this Agreement or any of
the other Loan Documents.
11. MISCELLANEOUS
11.1. COMPLETE AGREEMENT; MODIFICATION OF AGREEMENT. The Loan Documents
constitute the complete agreement between the parties with respect to the
subject matter thereof and may not be modified, altered or amended except as set
forth in SECTION 11.2 below. Any letter of interest, and/or fee letter, if any,
between any Credit Party and Agent or any Lender or any of their respective
affiliates, predating this Agreement and relating to a financing of
substantially similar form, purpose or effect shall be superseded by this
Agreement.
11.2. AMENDMENTS AND WAIVERS. (a) Except for actions expressly
permitted to be taken by Agent, no amendment, modification, termination or
waiver of any provision of this Agreement or any of the Notes, or any consent to
any departure by any Credit Party therefrom, shall in any event be effective
unless the same shall be in writing and signed by Agent and Borrower, and by
Requisite Lenders, Requisite Revolving Lenders, or all affected Lenders, as
applicable. Except as set forth in CLAUSES (b) and (c) below, all such
amendments, modifications, terminations or waivers requiring the consent of any
Lenders shall require the written consent of Requisite Lenders.
(b) No amendment, modification, termination or waiver of or consent
with respect to any provision of this Agreement which waives compliance with the
conditions precedent set forth in SECTION 2.2 to the making of any Loan or the
incurrence of any Letter of Credit Obligations shall be effective unless the
same shall be in writing and signed by Agent, Requisite Revolving Lenders and
Borrower. Notwithstanding anything contained in this Agreement to the contrary,
no waiver or consent with respect to any Default (if in connection therewith
Agent or Requisite Revolving Lenders, as the case may be, have exercised its or
their right to suspend the making or incurrence of further Advances or Letter of
Credit Obligations pursuant to SECTION 8.2(a)) or any Event of Default shall be
effective for purposes of the conditions precedent to the making of Loans or the
incurrence of Letter of Credit Obligations set forth in SECTION 2.2 unless the
same shall be in writing and signed by Agent, Requisite Revolving Lenders and
Borrower.
(c) No amendment, modification, termination or waiver shall, unless in
writing and signed by Agent and each Lender directly affected thereby, do any of
the following: (i) increase the principal amount of any Lender's Commitment
(which action shall be deemed to directly affect all Lenders); (ii) reduce the
principal of, rate of interest on or Fees payable with respect to any Loan or
Letter of Credit Obligations of any affected Lender; (iii) extend any scheduled
payment date or final maturity date of the principal amount of any Loan of any
affected Lender; (iv) waive, forgive, defer, extend or postpone any payment of
interest or Fees as to any affected Lender; (v) except as otherwise permitted
herein or in the other Loan Documents, release, or permit any Credit Party to
sell or otherwise dispose of, any Collateral with a value exceeding $5,000,000
in the aggregate (which action shall be deemed to directly affect all Lenders);
(vi) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans which shall be required for Lenders or any of them
to take any action hereunder; and (vii) amend or waive this SECTION 11.2 or the
definitions of the terms "Requisite Lenders" or "Requisite Revolving Lenders"
insofar as such definitions affect the substance of this SECTION 11.2.
Furthermore, no amendment, modification, termination or waiver affecting the
rights or duties of Agent under this Agreement or any other Loan Document shall
be effective unless in writing and signed by Agent, in addition to Lenders
required hereinabove to take such action. Each amendment, modification,
termination or waiver shall be effective only in the specific instance and for
the specific purpose for which it was given. No amendment, modification,
termination or waiver shall be required for Agent to take additional Collateral
pursuant to any Loan Document. No amendment, modification, termination or waiver
of any provision of any Note shall be effective without the written concurrence
of the holder of that Note. No notice to or demand on any Credit Party in any
case shall entitle such Credit Party or any other Credit Party to any other or
further notice or demand in similar or other circumstances. Any amendment,
modification, termination, waiver or consent effected in accordance with this
SECTION 11.2 shall be binding upon each holder of the Notes at the time
outstanding and each future holder of the Notes.
(d) If, in connection with any proposed amendment, modification,
waiver or termination (a "PROPOSED CHANGE"):
(i) requiring the consent of all affected Lenders, the consent of
Requisite Lenders is obtained, but the consent of other Lenders whose consent is
required is not obtained (any such Lender whose consent is not obtained as
described this CLAUSE (i) and in CLAUSES (ii), (iii) and (iv) below being
referred to as a "NON-CONSENTING LENDER"), or
(ii) requiring the consent of Requisite Revolving Lenders, the
consent of Revolving Lenders holding 51% or more of the aggregate Revolving Loan
Commitments is obtained, but the consent of Requisite Revolving Lenders is not
obtained, or
(iii) requiring the consent of Requisite Lenders, the consent of
Lenders holding 51% or more of the aggregate Commitments is obtained, but the
consent of Requisite Lenders is not obtained, then, so long as Agent is not a
Non-Consenting Lender, at Borrower's request, Agent or a Person acceptable to
Agent shall have the right with Agent's consent and in Agent's sole discretion
(but shall have no obligation) to purchase from such Non-Consenting Lenders, and
such Non-Consenting Lenders agree that they shall, upon Agent's request, sell
and assign to Agent or such Person, all of the Commitments of such
Non-Consenting Lender for an amount equal to the principal balance of all Loans
held by the Non-Consenting Lender and all accrued interest and Fees with respect
thereto through the date of sale, such purchase and sale to be consummated
pursuant to an executed Assignment Agreement.
(e) Upon indefeasible payment in full in cash and performance of all
of the Obligations (other than indemnification Obligations under Section 1.13),
termination of the Commitments and a release of all claims against Agent and
Lenders, and so long as no suits, actions, proceedings, or claims are pending or
threatened against any Indemnified Person asserting any damages, losses or
liabilities that are Indemnified Liabilities, Agent shall deliver to Borrower
termination statements, mortgage releases and other documents necessary or
appropriate to evidence the termination of the Liens securing payment of the
Obligations.
11.3. FEES AND EXPENSES. Borrower shall reimburse Agent for all
out-of-pocket expenses incurred in connection with the preparation of the Loan
Documents (including the reasonable fees and expenses of all of its special loan
counsel, advisors, consultants and auditors retained in connection with the Loan
Documents and the Related Transactions and advice in connection therewith).
Borrower shall reimburse Agent (and, with respect to CLAUSES (c), (d) and (e)
below, all Lenders) for all fees, costs and expenses, including the reasonable
fees, costs and expenses of counsel or other advisors (including environmental
and management consultants and appraisers) for advice, assistance, or other
representation in connection with:
(a) the forwarding to Borrower or any other Person on behalf of
Borrower by Agent of the proceeds of the Loans;
(b) any amendment, modification or waiver of, or consent with respect
to, any of the Loan Documents or Related Transactions Documents or advice in
connection with the administration of the Loans made pursuant hereto or its
rights hereunder or thereunder;
(c) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by Agent, any Lender, Borrower or any other Person) in any
way relating to the Collateral, any of the Loan Documents or any other agreement
to be executed or delivered in connection therewith or herewith, whether as
party, witness, or otherwise, including any litigation, contest, dispute, suit,
case, proceeding or action, and any appeal or review thereof, in connection with
a case commenced by or against Borrower or any other Person that may be
obligated to Agent by virtue of the Loan Documents; including any such
litigation, contest, dispute, suit, proceeding or action arising in connection
with any work-out or restructuring of the Loans during the pendency of one or
more Events of Default; PROVIDED that in the case of reimbursement of counsel
for Lenders other than Agent, such reimbursement shall be limited to one counsel
for all such Lenders;
(d) any attempt to enforce any remedies of Agent against any or all of
the Credit Parties or any other Person that may be obligated to Agent or any
Lender by virtue of any of the Loan Documents; including any such attempt to
enforce any such remedies in the course of any work-out or restructuring of the
Loans during the pendency of one or more Events of Default; PROVIDED that in the
case of reimbursement of counsel for Lenders other than Agent, such
reimbursement shall be limited to one counsel for all such Lenders;
(e) any work-out or restructuring of the Loans during the pendency of
one or more Events of Default; or
(f) efforts to (i) monitor the Loans or any of the other Obligations,
(ii) evaluate, observe or assess any of the Credit Parties or their respective
affairs, and (iii) verify, protect, evaluate, assess, appraise, collect, sell,
liquidate or otherwise dispose of any of the Collateral;
including, as to each of clauses (a) through (f) above, all attorneys' and other
professional and service providers' fees arising from such services, including
those in connection with any appellate proceedings; and all expenses, costs,
charges and other fees incurred by such counsel and others in any way or respect
arising in connection with or relating to any of the events or actions described
in this SECTION 11.3 shall be payable, on demand, by Borrower to Agent. Without
limiting the generality of the foregoing, such expenses, costs, charges and fees
may include: fees, costs and expenses of accountants, environmental advisors,
appraisers, investment bankers, management and other consultants and paralegals;
court costs and expenses; photocopying and duplication
expenses; court reporter fees, costs and expenses; long distance telephone
charges; air express charges; telegram or telecopy charges; secretarial overtime
charges; and expenses for travel, lodging and food paid or incurred in
connection with the performance of such legal or other advisory services.
11.4. NO WAIVER. Agent's or any Lender's failure, at any time or times,
to require strict performance by the Credit Parties of any provision of this
Agreement and any of the other Loan Documents shall not waive, affect or
diminish any right of Agent or such Lender thereafter to demand strict
compliance and performance therewith. Any suspension or waiver of an Event of
Default shall not suspend, waive or affect any other Event of Default whether
the same is prior or subsequent thereto and whether the same or of a different
type. Subject to the provisions of SECTION 11.2, none of the undertakings,
agreements, warranties, covenants and representations of any Credit Party
contained in this Agreement or any of the other Loan Documents and no Default or
Event of Default by any Credit Party shall be deemed to have been suspended or
waived by Agent or any Lender, unless such waiver or suspension is by an
instrument in writing signed by an officer of or other authorized employee of
Agent and the applicable required Lenders, and directed to Borrower specifying
such suspension or waiver.
11.5. REMEDIES. Agent's and Lenders' rights and remedies under this
Agreement shall be cumulative and nonexclusive of any other rights and remedies
which Agent or any Lender may have under any other agreement, including the
other Loan Documents, by operation of law or otherwise. Recourse to the
Collateral shall not be required.
11.6. SEVERABILITY. Wherever possible, each provision of this Agreement
and the other Loan Documents shall be interpreted in such a manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
11.7. CONFLICT OF TERMS. Except as otherwise provided in this Agreement
or any of the other Loan Documents by specific reference to the applicable
provisions of this Agreement, if any provision contained in this Agreement is in
conflict with, or inconsistent with, any provision in any of the other Loan
Documents, the provision contained in this Agreement shall govern and control.
11.8. CONFIDENTIALITY. Agent and each Lender agree to use commercially
reasonable efforts and at least equivalent to the efforts Agent or such Lender
applies to maintaining the confidentiality of its own confidential information
to maintain as confidential all confidential information provided to them by the
Credit Parties and designated as confidential for a period of two (2) years
following receipt thereof, except that Agent and any Lender may disclose such
information (a) to Persons employed or engaged by Agent or such Lender; (b) to
any bona fide assignee or participant or
potential assignee or participant that has agreed to comply with the covenant
contained in this SECTION 11.8 (and any such bona fide assignee or participant
or potential assignee or participant may disclose such information to Persons
employed or engaged by them as described in CLAUSE (a) above); (c) as required
or requested by any Governmental Authority or reasonably believed by Agent or
such Lender to be compelled by any court decree, subpoena or legal or
administrative order or process; (d) as, on the advice of Agent's or such
Lender's counsel, required by law; (e) in connection with the exercise of any
right or remedy under the Loan Documents or in connection with any Litigation to
which Agent or such Lender is a party; or (f) which ceases to be confidential
through no fault of Agent or such Lender.
11.9. GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF
THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE AND
ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. EACH CREDIT PARTY HEREBY
CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN XXX XXXX XXXXXX,
XXXX XX XXX XXXX, XXX XXXX SHALL HAVE NON-EXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE CREDIT PARTIES, AGENT AND LENDERS
PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS,
PROVIDED, THAT AGENT, LENDERS AND THE CREDIT PARTIES ACKNOWLEDGE THAT ANY
APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW
YORK COUNTY, CITY OF NEW YORK, NEW YORK AND, PROVIDED, FURTHER NOTHING IN THIS
AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE AGENT FROM BRINGING SUIT OR
TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL
OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER
COURT ORDER IN FAVOR OF AGENT. EACH CREDIT PARTY EXPRESSLY SUBMITS AND CONSENTS
IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH
COURT, AND EACH CREDIT PARTY HEREBY WAIVES ANY OBJECTION WHICH SUCH CREDIT PARTY
MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON
CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF
AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH CREDIT PARTY HEREBY WAIVES PERSONAL
SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR
SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS,
COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO SUCH CREDIT PARTY AT THE ADDRESS SET FORTH IN ANNEX I OF THIS
AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF
SUCH CREDIT PARTY'S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN
THE U.S. MAILS, PROPER POSTAGE PREPAID.
11.10. NOTICES. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval, declaration
or other communication shall or may be given to or served upon any of the
parties by any other parties, or whenever any of the parties desires to give or
serve upon any other parties any communication with respect to this Agreement,
each such notice, demand, request, consent, approval, declaration or other
communication shall be in writing and shall be deemed to have been validly
served, given or delivered (a) upon the earlier of actual receipt and three (3)
Business Days after deposit in the United States Mail, registered or certified
mail, return receipt requested, with proper postage prepaid, (b) upon
transmission, when sent by telecopy or other similar facsimile transmission
(with such telecopy or facsimile promptly confirmed by delivery of a copy by
personal delivery or United States Mail as otherwise provided in this SECTION
11.10), (c) one (1) Business Day after deposit with a reputable overnight
courier with all charges prepaid or (d) when delivered, if hand-delivered by
messenger, all of which shall be addressed to the party to be notified and sent
to the address or facsimile number indicated on ANNEX I or to such other address
(or facsimile number) as may be substituted by notice given as herein provided.
The giving of any notice required hereunder may be waived in writing by the
party entitled to receive such notice. Failure or delay in delivering copies of
any notice, demand, request, consent, approval, declaration or other
communication to any Person (other than Borrower or Agent) designated on ANNEX I
to receive copies shall in no way adversely affect the effectiveness of such
notice, demand, request, consent, approval, declaration or other communication.
11.11. SECTION TITLES. The Section titles and Table of Contents
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of the agreement between the
parties hereto.
11.12. COUNTERPARTS. This Agreement may be executed in any number of
separate counterparts, each of which shall collectively and separately
constitute one agreement.
11.13. WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION WITH
COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR
DISPUTES BE RESOLVED BY A JUDGE
APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE
BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY
DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG AGENT, LENDERS
AND ANY CREDIT PARTY ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL
TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.
11.14. PRESS RELEASES. Each Credit Party executing this Agreement agrees
that neither it nor its Affiliates will in the future issue any press releases
or other public disclosure using the name of GE Capital or its affiliates or
referring to this Agreement, the other Loan Documents or the Related
Transactions Documents without at least two (2) Business Days' prior notice to
GE Capital and without the prior written consent of GE Capital unless (and only
to the extent that) such Credit Party or Affiliate is required to do so under
law and then, in any event, such Credit Party or Affiliate will consult with GE
Capital before issuing such press release or other public disclosure. Each
Credit Party consents to the publication by Agent or any Lender of a tombstone
or similar advertising material relating to the financing transactions
contemplated by this Agreement. Agent reserves the right to provide to industry
trade organizations information necessary and customary for inclusion in league
table measurements with Borrower's consent which shall not be unreasonably
withheld or delayed.
11.15. REINSTATEMENT. This Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
Borrower for liquidation or reorganization, should Borrower become insolvent or
make an assignment for the benefit of any creditor or creditors or should a
receiver or trustee be appointed for all or any significant part of Borrower's
assets, and shall continue to be effective or to be reinstated, as the case may
be, if at any time payment and performance of the Obligations, or any part
thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by any obligee of the Obligations, whether as
a "voidable preference," "fraudulent conveyance," or otherwise, all as though
such payment or performance had not been made. In the event that any payment, or
any part thereof, is rescinded, reduced, restored or returned, the Obligations
shall be reinstated and deemed reduced only by such amount paid and not so
rescinded, reduced, restored or returned.
11.16. ADVICE OF COUNSEL. Each of the parties represents to each other
party hereto that it has discussed this Agreement and, specifically, the
provisions of SECTIONS 11.9 and 11.13, with its counsel.
11.17. NO STRICT CONSTRUCTION. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.
11.18. AFFIRMATION OF EXISTING LOAN DOCUMENTS. Each of the Credit
Parties and Xxxxxxx X. Xxxxxx (a) acknowledge, agree and consent to the
amendment and restatement of the Original Credit Agreement effectuated hereby,
(b) confirm and agree that their obligations under each of the Loan Documents to
which they are a party shall continue without any diminution thereof and shall
remain in full force and effect on and after the Closing Date, (c) confirm and
agree that each of the schedules to each of Security Agreements, the
Intellectual Property Security Agreements and the Pledge Agreements are hereby
amended and replaced by the applicable schedule attached hereto as DISCLOSURE
SCHEDULE (3.26); provided that any Exhibit or Power of Attorney to any of the
Security Agreements, Intellectual Property Security Agreements and Pledge
Agreements not attached hereto as a part of DISCLOSURE SCHEDULE (3.26) shall
remain in full force and effect in the form attached to each such agreement, as
applicable, as of the Closing Date and (d) confirm and agree that the Liens
granted pursuant to the Collateral Documents to which they are a party shall
continue without any diminution thereof and shall remain in full force and
effect on and after the Closing Date.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
XXXXXX CUSTOM PLASTICS, LLC
By: Xxxxxx Holdings, LLC,
its Manager
By: Xxxxxx Industrial Group, Inc.
its Manager
By:
---------------------------
Name:
Title:
GENERAL ELECTRIC CAPITAL CORPORATION, as
Agent and Lender
By:
-----------------------------------------
Name:
Title:
The following Persons are signatories to this Agreement in their
capacity as Credit Parties.
XXXXXX HOLDINGS, LLC
By: Xxxxxx Industrial Group, Inc.
its Manager
By:
-------------------------------
Name:
Title:
XXXXXX LEBANON KENTUCKY IBRB, LLC
By: Xxxxxx Custom Plastics, LLC,
its Manager
By: Xxxxxx Holdings, LLC,
its Manager
By: Xxxxxx Industrial Group, Inc.,
its Manager
By:
-----------------------------
Name:
Title:
---------------------------
Xxxxxxx X. Xxxxxx
SCHEDULE 1.1
RESPONSIBLE INDIVIDUAL
General Electric Capital Corporation
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Custom Plastics Account Manager
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
SCHEDULE 1.4
TO
CREDIT AGREEMENT
SOURCES AND USES; FUNDS FLOW MEMORANDUM
As of Closing Date
PRE-CLOSING
Revolving Credit Advances $13,070,677.45
Term Loans Outstanding 16,622,392.50
Letters of Credit Outstanding 980,010.00
---------------
Total $30,673,079.95
POST-CLOSING
Revolving Credit Advances 7,693,069.95
Term Loan A 10,000,000.00
Term Loan B 7,000,000.00
Term Loan C 5,000,000.00
Letters of Credit Outstanding 980,010.00
---------------
Total $30,673,079.95
REVOLVING CREDIT ADVANCE AVAILABILITY
Total Commitment $10,000,000.00
Current Revolving Credit Advances (7,693,069.95)
Letter of Credit Obligations (980,010.00)
Excess Borrowing Availability Covenant (1,000,000.00)
Reserves established by Agent (25,000)*
Fees payable to CBW (100,000)
Fees payable to Agent for benefit of Lenders (100,000)
Total available for new Revolving Advances
as of the Closing Date $ 101,920.05
----------
* Represents outstanding 1999 and 2000 sales taxin the State of Kentucky.
ANNEX A (RECITALS)
TO
CREDIT AGREEMENT
DEFINITIONS
Capitalized terms used in the Loan Documents shall have (unless
otherwise provided elsewhere in the Loan Documents) the following respective
meanings and all section references in the following definitions shall refer to
Sections of the Agreement:
"A/P DAYS" means, (A) with respect to Borrower for each Fiscal
Month ending on or prior to December 31, 2002, the number of days for such
Fiscal Month determined as of the last day of such Fiscal Month by reference to
the following formula:
((CAP-CCG)/PCG ) (DPM)) +(DCM) = A/P Days
where
CAP - means the amount of accounts payable (including
amounts payable evidenced by notes) of Borrower as of the end of such
Fiscal Month
CCG - means the cost of sales of Borrower for such Fiscal
Month
PCG - means the cost of sales for the immediately preceding
Fiscal Month
DPM - means the number of days in the immediately preceding
Fiscal Month
DCM - means the number of days in such Fiscal Month; and
(B) with respect to Borrower for each Fiscal Quarter ending
on or after March 31, 2003, the number of days for such Fiscal Quarter
obtained by multiplying (a) the quotient of the amount of accounts payable
of Borrower (including accounts payable evidenced by notes) as of the end
of such Fiscal Quarter divided by the cost of sales of Borrower for such
Fiscal Quarter BY (b) the number of days in such Fiscal Quarter.
For purposes of this definition cost of goods and accounts
payable shall be calculated on a consolidated basis in accordance with
GAAP.
"A/R DAYS" means, (A) with respect to Borrower for each Fiscal
Month ending on or prior to December 31, 2002, the number of days for such
Fiscal Month determined as of the last day of such Fiscal Month by reference to
the following formula:
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((CAR-CGS)/PCGS ) (DPM)) +(DCM) = A/R Days
where
CAR - means the aggregate book value of accounts receivable
(net of any reserves for doubtful accounts) of Borrower as of the end of
such Fiscal Month
CGS - means the gross sales (less returns and allowances for
doubtful accounts) of Borrower for such Fiscal Month
PCGS - means the gross sales of Borrower (less returns and
allowances for doubtful accounts) for immediately preceding Fiscal Month
DPM - means the number of days in the immediately preceding
Fiscal Month
DCM - means the number of days in such Fiscal Month; and
(B) with respect to Borrower for each Fiscal Quarter ending
on or after March 31, 2003, the number of days for such Fiscal Quarter
obtained by multiplying (a) the quotient of the aggregate book value of
accounts payable (net of any reserves for doubtful accounts) of Borrower as
of the end of such Fiscal Quarter divided by the gross sales of Borrower
(less returns and allowances for doubtful accounts) for such Fiscal Quarter
BY (b) the number of days in such Fiscal Quarter.
For purposes of this definition aggregate book value of
accounts receivable and gross sales shall be calculated on a consolidated
basis in accordance with GAAP.
"ACCOUNT DEBTOR" means any Person who may become obligated to any
Credit Party under, with respect to, or on account of, an Account, Chattel paper
or General Intangibles (including a payment intangible).
"ACCOUNTS" means all "accounts," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, including (a) all
accounts receivable, other receivables, book debts and other forms of
obligations (other than forms of obligations evidenced by Chattel Paper, or
Instruments), (including any such obligations that may be characterized as an
account or contract right under the Code), (b) all of each Credit Party's rights
in, to and under all purchase orders or receipts for goods or services, (c) all
of each Credit Party's rights to any goods represented by any of the foregoing
(including unpaid sellers' rights of rescission, replevin, reclamation and
stoppage in transit and rights to returned, reclaimed or repossessed goods), (d)
all rights to payment due to any Credit Party for property sold, leased,
licensed, assigned or otherwise disposed of, for a policy of insurance issued or
to be issued, for a secondary obligation incurred or to be incurred, for energy
provided or to be provided, for the use or
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hire of a vessel under a charter or other contract, arising out of the use of a
credit card or charge card, or for services rendered or to be rendered by such
Credit Party or in connection with any other transaction (whether or not yet
earned by performance on the part of such Credit Party), (e) all health care
insurance receivables and (f) all collateral security of any kind, given by any
Account Debtor or any other Person with respect to any of the foregoing.
"ADVANCE" shall mean any Revolving Credit Advance.
"AFFILIATE" shall mean, with respect to any Person, (a) each
Person that, directly or indirectly, owns or controls, whether beneficially, or
as a trustee, guardian or other fiduciary, five percent (5%) or more of the
Stock having ordinary voting power in the election of directors of such Persons,
(b) each Person that controls, is controlled by or is under common control with
such Person, (c) each of such Person's officers, directors, joint venturers and
partners and (d) in the case of Borrower, the immediate family members, spouses
and lineal descendants of individuals who are Affiliates of Borrower. For the
purposes of this definition, "CONTROL" of a Person shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of its
management or policies, whether through the ownership of voting securities, by
contract or otherwise; PROVIDED, HOWEVER, that the term "AFFILIATE" shall
specifically exclude Agent and each Lender.
"AGENT" shall mean GE Capital or its successor appointed pursuant
to SECTION 9.7.
"AGREEMENT" shall mean the Amended and Restated Credit Agreement
by and among Borrower, the other Credit Parties named therein, GE Capital, as
Agent and Lender and the other Lenders signatory from time to time to the
Agreement.
"APPENDICES" shall have the meaning assigned to it in the
recitals to the Agreement.
"APPLICABLE LIBOR MARGINS" means collectively, the Applicable
Revolver LIBOR Margin, the Applicable Term Loan A LIBOR Margin and the
Applicable Term Loan B LIBOR Margin.
"APPLICABLE MARGINS" means collectively, the Applicable Revolver
LIBOR Margin, the Applicable Term Loan A LIBOR Margin, the Applicable Term Loan
B LIBOR Margin, the Applicable Term Loan A Index Margin, the Applicable Term
Loan B Index Margin, and the Applicable Revolver Index Margin.
"APPLICABLE REVOLVER INDEX MARGIN" shall mean 1.35% per annum.
"APPLICABLE REVOLVER LIBOR MARGIN" shall mean 4.25% per annum.
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"APPLICABLE TERM LOAN A INDEX MARGIN" shall mean 1.35% per annum.
"APPLICABLE TERM LOAN A LIBOR MARGIN" shall mean 4.25% per annum.
"APPLICABLE TERM LOAN B INDEX MARGIN" shall mean 1.60% per annum.
"APPLICABLE TERM LOAN B LIBOR MARGIN" shall mean 4.5% per annum.
"ASSIGNMENT AGREEMENT" shall have the meaning assigned to it in
SECTION 9.1(a).
"BORROWER" shall have the meaning assigned to it in the recitals
to the Agreement.
"BORROWER ACCOUNTS" shall have the meaning assigned to it in
ANNEX C.
"BORROWER INTELLECTUAL PROPERTY SECURITY AGREEMENT" shall mean
the Intellectual Property Security Agreement dated as of April 15, 1999 entered
into among Agent, on behalf of itself and Lenders, and Borrower.
"BORROWER PLEDGE AGREEMENT" shall mean the Pledge Agreement dated
as of April 15, 1999 entered into among Agent, on behalf of itself and Lenders,
and Borrower.
"BORROWER SECURITY AGREEMENT" shall mean the Security Agreement
dated as of April 15, 1999 entered into among Agent, on behalf of itself and
Lenders, and Borrower, as amended by that certain First Amendment to Borrower
Security Agreement dated September 29, 2001.
"BORROWER WARRANT" shall mean the warrant of even date herewith
issued by Borrower to Agent, in its capacity as Lender, in the form of EXHIBIT
2.1(c)(ii).
"BORROWER WARRANT AGREEMENT" shall mean the Warrant Holder
Agreement dated as of even date herewith among GE Capital, Holdings and Borrower
in the form of EXHIBIT 2.1(c)(ii) hereto.
"BORROWING AVAILABILITY" shall have the meaning assigned to it in
SECTION 1.1(a)(i).
"BUSINESS DAY" shall mean any day that is not a Saturday, a
Sunday or a day on which banks are required or permitted to be closed in the
State of New York and in reference to LIBOR Loans shall mean any such day that
is also a LIBOR Business Day.
"CAPITAL EXPENDITURES" shall mean, with respect to any Person,
all expenditures (by the expenditure of cash or the incurrence of Indebtedness,
including
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without limitation in connection with Capital Leases) by such Person during any
measuring period for any fixed assets or improvements or for replacements,
substitutions or additions thereto, that have a useful life of more than one
year and that are required to be capitalized under GAAP.
"CAPITAL LEASE" shall mean, with respect to any Person, any lease
of any property (whether real, personal or mixed) by such Person as lessee that,
in accordance with GAAP, would be required to be classified and accounted for as
a capital lease on a balance sheet of such Person.
"CAPITAL LEASE OBLIGATION" shall mean, with respect to any
Capital Lease of any Person, the amount of the obligation of the lessee
thereunder that, in accordance with GAAP, would appear on a balance sheet of
such lessee in respect of such Capital Lease.
"CASH CONVERSION CYCLE DAYS" means, as of any date of
determination, the sum of (a) A/R Days as of such date, PLUS (b) Inventory Days
as of such date LESS (c) A/P Days as of such date.
"CASH FLOW BUDGET" means the thirteen (13) week cash flow budget
of the Borrower, relative to the operations of Borrower, in substantially the
form attached as EXHIBIT 1.2, deliver by Borrower to Agent pursuant to Annex E.
"CASH MANAGEMENT SYSTEMS" shall have the meaning assigned to it
in SECTION 1.8.
"CBW" shall mean Xxxxx, Xxxxxxxx & White, LLC.
"CHANGE OF CONTROL" shall mean any event, transaction or
occurrence as a result of which (a) MIG shall cease to own and control at least
100% of the economic and 35% of the voting rights associated with the
outstanding capital Stock of all classes of Holdings on a fully diluted basis,
(b) Holdings shall cease to own and control all of the economic and voting
rights associated with at least 100% of the outstanding capital Stock of
Borrower (other than solely by reason of the exercise of the Borrower Warrant),
(c) MIG shall cease to be the sole Manager of Holdings and Holdings shall cease
to be the sole Manager of Borrower and Borrower shall cease to be the sole
Manager of the IRB Subsidiary, (d) Borrower shall cease to own and control all
of the economic and voting rights associated with all of the outstanding capital
Stock of any of its Subsidiaries or (e) Xxxxxxx Xxxxxx shall no longer be
performing such duties and responsibilities on behalf of the Borrower which are
substantially similar to those being performed by Xxxxxxx Xxxxxx as of the
Closing Date (or following Xxxxxxx Xxxxxx'x promotion to President of the
Borrower, such duties and responsibilities performed by Xxxxxxx Xxxxxx following
such promotion), unless at the time of such termination or change in duties and
responsibilities Borrower has identified and engaged an individual to act as a
replacement for the position or positions held by, and the duties and
responsibilities performed by
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Xxxxxxx Xxxxxx at the time of such termination or change in duties and
responsibilities; provided that any such replacement shall be acceptable to
Agent in its sole discretion.
"CHARGES" shall mean all federal, state, county, city, municipal,
local, foreign or other governmental taxes (including any interest, penalties or
other additions to tax that may become payable in respect thereof and taxes owed
to the PBGC at the time due and payable), levies, assessments, charges, liens,
claims or encumbrances upon or relating to (a) the Collateral, (b) the
Obligations, (c) the employees, payroll, income or gross receipts of any Credit
Party, (d) any Credit Party's ownership or use of any properties or other
assets, or (e) any other aspect of any Credit Party's business.
"CHATTEL PAPER" means any "chattel paper," as such term is
defined in the Code, including electronic chattel paper, now owned or hereafter
acquired by any Credit Party.
"CLOSING DATE" shall mean March 25, 2002.
"CLOSING CHECKLIST" shall mean the schedule, including all
appendices, exhibits or schedules thereto, listing certain documents and
information to be delivered in connection with the Agreement, the other Loan
Documents and the transactions contemplated thereunder, substantially in the
form attached hereto as ANNEX D.
"CODE" means the Uniform Commercial Code as the same may, from
time to time, be enacted and in effect in the State of New York; PROVIDED, that
to the extent that the Code is used to define any term herein or in any Loan
Document and such term is defined differently in different Articles or Divisions
of the Code, the definition of such term contained in Article or Division 9
shall govern; PROVIDED FURTHER, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection or priority of, or
remedies with respect to, Agent's or any Lender's Lien on any Collateral is
governed by the Uniform Commercial Code as enacted and in effect in a
jurisdiction other than the State of New York, the term "CODE" shall mean the
Uniform Commercial Code as enacted and in effect in such other jurisdiction
solely for purposes of the provisions thereof relating to such attachment,
perfection, priority or remedies and for purposes of definitions related to such
provisions.
"COLLATERAL" shall mean the property covered by the Security
Agreements, the Mortgages, the Pledge Agreements and the other Collateral
Documents and any other property, real or personal, tangible or intangible, now
existing or hereafter acquired, that may at any time be or become subject to a
security interest or Lien in favor of Agent, on behalf of itself and Lenders, to
secure the Obligations.
"COLLATERAL DOCUMENTS" shall mean the Security Agreements, the
Pledge Agreements, the Guaranties, the Mortgages, the Intellectual Property
Security Agreements and all similar agreements entered into guaranteeing payment
of, or granting a Lien upon property as security for payment of, the
Obligations.
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"COLLATERAL REPORTS" shall mean the reports with respect to the
Collateral referred to in ANNEX F.
"COLLECTION ACCOUNT" shall mean that certain account of Agent,
account number 000-000-00 in the name of Agent at Bankers Trust Company in New
York, New York or such other account as Agent shall specify.
"COMMITMENT TERMINATION DATE" shall mean the earliest of (a) the
Scheduled Maturity Date, (b) the date of termination of Lenders' obligations to
make Advances and/or incur Letter of Credit Obligations or permit existing Loans
to remain outstanding pursuant to SECTION 8.2(b), and (c) the date of
indefeasible prepayment in full by Borrower of the Loans and the cancellation
and return (or stand-by guarantee) of all Letters of Credit or the cash
collateralization of all Letter of Credit Obligations pursuant to ANNEX B, and
the permanent reduction of the Revolving Loan Commitment to zero dollars ($0).
"COMMITMENTS" shall mean (a) as to any Lender, the aggregate of
such Lender's Revolving Loan Commitment and Term Loan Commitments as set forth
on ANNEX J to the Agreement or in the most recent Assignment Agreement executed
by such Lender and (b) as to all Lenders, the aggregate of all Lenders'
Revolving Loan Commitments and Term Loan Commitments, which aggregate commitment
shall be $32,000,000 on the Closing Date, as to each of clauses (a) and (b), as
such Commitments may be reduced, amortized or adjusted from time to time in
accordance with the Agreement.
"COMPLIANCE CERTIFICATE" shall have the meaning assigned to it in
ANNEX E.
"CONTINGENT PAYMENT" shall have the meaning assigned to such term
in the Worthington Acquisition Agreement.
"CONTRACTS" shall mean all "contracts," as such term is defined
in the Code, now owned or hereafter acquired by any Credit Party, in any event,
including all contracts, undertakings, or agreements (other than rights
evidenced by Chattel Paper, Documents or Instruments) in or under which any
Credit Party may now or hereafter have any right, title or interest, including
any agreement relating to the terms of payment or the terms of performance of
any Account.
"COPYRIGHT LICENSE" shall mean any and all rights now owned or
hereafter acquired by any Credit Party under any written agreement granting any
right to use any Copyright or Copyright registration.
"COPYRIGHTS" shall mean all of the following now owned or
hereafter acquired by any Credit Party: (a) all copyrights and general
intangibles of like nature (whether registered or unregistered), now owned or
existing or hereafter adopted or
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acquired, all registrations and recordings thereof, and all applications in
connection therewith, including all registrations, recordings and applications
in the United States Copyright Office or in any similar office or agency of the
United States, any state or territory thereof, or any other country or any
political subdivision thereof, and (b) all reissues, extensions or renewals
thereof.
"CREDIT PARTIES" shall mean Holdings, Borrower, and each of their
respective Subsidiaries; PROVIDED that solely for purposes of SECTION 8.1(d),
(h) OR (i) Xxxxxxx X. Xxxxxx shall also be deemed to be a "Credit Party".
"CURRENT ASSETS" shall mean, with respect to any Person, all
current assets of such Person as of any date of determination calculated in
accordance with GAAP, but excluding cash, cash equivalents and debts due from
Affiliates.
"CURRENT LIABILITIES" shall mean, with respect to any Person, all
liabilities which should, in accordance with GAAP, be classified as current
liabilities, and in any event shall include all Indebtedness payable on demand
or within one year from any date of determination without any option on the part
of the obligor to extend or renew beyond such year, all accruals for federal or
other taxes based on or measured by income and payable within such year, and the
current portion of long-term debt required to be paid within one year, but
excluding, in the case of Borrower, the aggregate outstanding principal balances
of the Revolving Loan.
"DEFAULT" shall mean any event which, with the passage of time or
notice or both, would, unless cured or waived, become an Event of Default.
"DEFAULT RATE" shall have the meaning assigned to it in SECTION
1.5(d).
"DEPOSIT ACCOUNTS" means all "deposit accounts" as such term is
defined in the Code, now or hereafter held in the name of any Credit Party.
"DISBURSEMENT ACCOUNTS" shall have the meaning assigned to it on
ANNEX C.
"DISCLOSURE SCHEDULES" shall mean the Schedules prepared by
Borrower and denominated as Disclosure SCHEDULES 1.4 through 6.7 in the Index to
the Agreement.
"DOCUMENTS" means all "documents," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located.
"DOLLARS" or "$" shall mean lawful currency of the United States
of America.
"EBITDA" shall mean, with respect to any Person for any fiscal
period, an amount equal to (a) consolidated net income of such Person for such
period, MINUS (b)
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the sum of (i) income tax credits, (ii) interest income, (iii) gain from
extraordinary items for such period, (iv) any aggregate net gain (but not any
aggregate net loss) during such period arising from the sale, exchange or other
disposition of capital assets by such Person (including any fixed assets,
whether tangible or intangible, all inventory sold in conjunction with the
disposition of fixed assets and all securities, and (v) any other non-cash gains
which have been added in determining consolidated net income, in each case to
the extent included in the calculation of consolidated net income of such Person
for such period in accordance with GAAP, but without duplication, PLUS (c) the
sum of (i) any provision for income taxes, (ii) Interest Expense, (iii) loss
from extraordinary items for such period, (iv) the amount of non-cash charges
(including depreciation and amortization) for such period, (v) amortized debt
discount for such period, and (vi) the amount of any deduction to consolidated
net income as the result of any grant to any members of the management of such
Person of any Stock, in each case to the extent included in the calculation of
consolidated net income of such Person for such period in accordance with GAAP,
but without duplication. For purposes of this definition, the following items
shall be excluded in determining consolidated net income of a Person: (1) the
income (or deficit) of any other Person accrued prior to the date it became a
Subsidiary of, or was merged or consolidated into, such Person or any of such
Person's Subsidiaries; (2) the income (or deficit) of any other Person (other
than a Subsidiary) in which such Person has an ownership interest, except to the
extent any such income has actually been received by such Person in the form of
cash dividends or distributions; (3) the undistributed earnings of any
Subsidiary of such Person to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any contractual obligation or requirement of law
applicable to such Subsidiary; (4) any restoration to income of any contingency
reserve, except to the extent that provision for such reserve was made out of
income accrued during such period; (5) any write-up of any asset; (6) any net
gain from the collection of the proceeds of life insurance policies; (7) any net
gain arising from the acquisition of any securities, or the extinguishment,
under GAAP, of any Indebtedness, of such Person, (8) in the case of a successor
to such Person by consolidation or merger or as a transferee of its assets, any
earnings of such successor prior to such consolidation, merger or transfer of
assets, and (9) any deferred credit representing the excess of equity in any
Subsidiary of such Person at the date of acquisition of such Subsidiary over the
cost to such Person of the investment in such Subsidiary.
"ELIGIBLE ACCOUNTS" shall have the meaning assigned to it in
SECTION 1.6 of the Agreement.
"ELIGIBLE INVENTORY" shall have the meaning assigned to it in
SECTION 1.7 of the Agreement.
"ENVIRONMENTAL LAWS" shall mean all applicable federal, state,
local and foreign laws, statutes, ordinances, codes, rules, standards and
regulations, now or hereafter in effect, and in each case as amended or
supplemented from time to time, and
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any applicable judicial or administrative interpretation thereof, including any
applicable judicial or administrative order, consent decree, order or judgment,
imposing liability or standards of conduct for or relating to the regulation and
protection of human health, safety, the environment and natural resources
(including ambient air, surface water, groundwater, wetlands, land surface or
subsurface strata, wildlife, aquatic species and vegetation). Environmental Laws
include the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980 (42 U.S.C. Sections 9601 ET SEQ.) ("CERCLA"); the Hazardous
Materials Transportation Authorization Act of 1994 (49 U.S.C.Sections 5101 ET
SEQ.); the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C.
Sections 136 ET SEQ.); the Solid Waste Disposal Act (42 U.S.C. Sections 6901 ET
SEQ.); the Toxic Substance Control Act (15 U.S.C. Sections 2601 ET SEQ.); the
Clean Air Act (42 U.S.C. Sections 7401 ET SEQ.); the Federal Water Pollution
Control Act (33 U.S.C. Sections 1251 ET SEQ.); the Occupational Safety and
Health Act (29 U.S.C. Sections 651 ET SEQ.); and the Safe Drinking Water Act (42
U.S.C. Sections 300(f) ET SEQ.), each as from time to time amended, and any and
all regulations promulgated thereunder, and all analogous state, local and
foreign counterparts or equivalents and any transfer of ownership notification
or approval statutes.
"ENVIRONMENTAL LIABILITIES" shall mean, with respect to any
Person, all liabilities, obligations, responsibilities, response, remedial and
removal costs, investigation and feasibility study costs, capital costs,
operation and maintenance costs, losses, damages, punitive damages, property
damages, natural resource damages, consequential damages, treble damages, costs
and expenses (including all fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising under
or related to any Environmental Laws, Environmental Permits, or in connection
with any Release or threatened Release or presence of a Hazardous Material
whether on, at, in, under, from or about or in the vicinity of any real or
personal property.
"ENVIRONMENTAL PERMITS" shall mean all permits, licenses,
authorizations, certificates, approvals or registrations required by any
Governmental Authority under any Environmental Laws.
"EQUIPMENT" shall mean all "equipment," as such term is defined
in the Code, now owned or hereafter acquired by any Credit Party, wherever
located and, in any event, including all such Credit Party's machinery and
equipment, including processing equipment, conveyors, machine tools, data
processing and computer equipment with software and peripheral equipment (other
than software constituting part of the Accounts), and all engineering,
processing and manufacturing equipment, office machinery, furniture, materials
handling equipment, tools, attachments, accessories, automotive equipment,
trailers, trucks, forklifts, molds, dies, stamps, motor vehicles, rolling stock
and other equipment of every kind and nature, trade fixtures and fixtures not
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forming a part of real property, all whether now owned or hereafter acquired,
and wherever situated, together with all additions and accessions thereto,
replacements therefor, all parts therefor, all substitutes for any of the
foregoing, fuel therefor, and all manuals, drawings, instructions, warranties
and rights with respect thereto, and all products and proceeds thereof and
condemnation awards and insurance proceeds with respect thereto.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974 (or any successor legislation thereto), as amended from time to time, and
any regulations promulgated thereunder.
"ERISA AFFILIATE" shall mean, with respect to any Credit Party,
any trade or business (whether or not incorporated) which, together with such
Credit Party, are treated as a single employer within the meaning of Sections
414(b), (c), (m) or (o) of the IRC.
"ERISA EVENT" shall mean, with respect to any Credit Party or
any ERISA Affiliate, (a) any event described in Section 4043(c) of ERISA with
respect to a Title IV Plan; (b) the withdrawal of any Credit Party or ERISA
Affiliate from a Title IV 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; (c) the complete or partial withdrawal of any Credit Party or any ERISA
Affiliate from any Multiemployer Plan; (d) the filing of a notice of intent to
terminate a Title IV Plan or the treatment of a plan amendment as a termination
under Section 4041 of ERISA; (e) the institution of proceedings to terminate a
Title IV Plan or Multiemployer Plan by the PBGC; (f) the failure by any Credit
Party or ERISA Affiliate to make when due required contributions to a
Multiemployer Plan or Title IV Plan unless such failure is cured within 30 days;
(g) any other 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 Title IV Plan or Multiemployer Plan
or for the imposition of liability under Section 4069 or 4212(c) of ERISA; (h)
the termination of a Multiemployer Plan under Section 4041A of ERISA or the
reorganization or insolvency of a Multiemployer Plan under Section 4241 of
ERISA; or (i) the loss of a Qualified Plan's qualification or tax exempt status;
or (j) the termination of a Plan described in Section 4064 of ERISA.
"ESOP" shall mean a Plan which is intended to satisfy the
requirements of Section 4975(e)(7) of the IRC.
"EVENT OF DEFAULT" shall have the meaning assigned to it in
SECTION 8.1.
"EXCESS BORROWING AVAILABILITY" shall mean at any time the
Borrowing Availability less the aggregate amount of Revolving Credit Advances
then outstanding.
"EXCESS CASH FLOW" shall mean, without duplication, with respect
to any Fiscal Year of Borrower and its Subsidiaries, consolidated net income
PLUS (a)
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depreciation, amortization and Interest Expense to the extent deducted
in determining consolidated net income, PLUS decreases or MINUS increases (as
the case may be) (b) in Working Capital, MINUS (c) Capital Expenditures during
such Fiscal Year (excluding the financed portion thereof and excluding any
Capital Expenditures in such Fiscal Year to the extent in excess of the amount
permitted to be made in such Fiscal Year pursuant to CLAUSE (a) of Annex G),
MINUS (d) Interest Expense paid or accrued (excluding any original issue
discount, interest paid in kind or amortized debt discount, to the extent
included in determining Interest Expense) and scheduled principal payments paid
or payable in respect of Funded Debt, PLUS or MINUS (as the case may be), (e)
extraordinary gains or losses which are cash items not included in the
calculation of net income, MINUS (f) mandatory prepayments paid in cash pursuant
to SECTION 1.3 other than mandatory prepayments made pursuant to SECTIONS
1.3(b)(i), 1.3(b)(iv) or 1.3(d), PLUS (g) taxes deducted in determining
consolidated net income to the extent not paid for in cash. For purposes of this
definition, "WORKING CAPITAL" means Current Assets LESS Current Liabilities.
"EXISTING VENDOR NOTES" shall mean those certain promissory notes
issued by Borrower to certain of its vendors that resulted from Borrower's
conversion of accounts payable to such vendors, and set forth on DISCLOSURE
SCHEDULE 6.3-A.
"FEDERAL FUNDS RATE" shall mean, for any day, a floating rate
equal to the weighted average of the rates on overnight Federal funds
transactions among members of the Federal Reserve System, as determined by
Agent.
"FEDERAL RESERVE BOARD" means the Board of Governors of the
Federal Reserve System, or any successor thereto.
"FEES" shall mean any and all fees payable to Agent or any Lender
pursuant to the Agreement or any of the other Loan Documents.
"FINANCIAL STATEMENTS" shall mean the consolidated income
statements, statements of cash flows and balance sheets of Borrower delivered in
accordance with SECTION 3.4 of the Agreement and ANNEX E to the Agreement.
"FISCAL MONTH" shall mean any of the monthly accounting periods
of Borrower.
"FISCAL QUARTER" shall mean any of the quarterly accounting
periods of Borrower, ending on March 31, June 30, September 30 and December 31
of each year.
"FISCAL YEAR" shall mean any of the annual accounting periods of
Borrower ending on December 31 of each year.
"FIXED CHARGE COVERAGE RATIO" shall mean, with respect to any
Person for any fiscal period, the ratio of EBITDA to Fixed Charges.
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"FIXED CHARGES" shall mean, with respect to any Person for any
fiscal period, (a) the aggregate of all Interest Expense paid or accrued during
such period, plus (b) scheduled payments of principal with respect to
Indebtedness during such period, plus (c) Capital Expenditures during such
period (excluding the financed portion thereof, plus (d) amounts payable by the
Borrower to CBW in connection with CBW's performance of services on behalf of
Borrower, plus (e) fees and other amounts payable to GE Capital, Agent or
Lenders, as the case may be, pursuant to SECTION 1.9 of the Agreement.
"FIXTURES" means all "fixtures" as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party.
"FUNDED DEBT" shall mean, with respect to any Person, all
Indebtedness for borrowed money evidenced by notes, bonds, debentures, or
similar evidences of Indebtedness and which by its terms matures more than one
year from, or is directly or indirectly renewable or extendible at such Person's
option under a revolving credit or similar agreement obligating the lender or
lenders to extend credit over a period of more than one year from the date of
creation thereof, and specifically including Capital Lease Obligations, current
maturities of long-term debt, revolving credit and short-term debt extendible
beyond one year at the option of the debtor, and also including, in the case of
Borrower, the Obligations and, without duplication, Guaranteed Indebtedness
consisting of guaranties of Funded Debt of other Persons.
"GAAP" shall mean generally accepted accounting principles in the
United States of America consistently applied, as such term is further defined
in ANNEX G to the Agreement.
"GENERAL INTANGIBLES" means all "general intangibles," as such
term is defined in the Code, now owned or hereafter acquired by any Credit
Party, including all right, title and interest that such Credit Party may now or
hereafter have in or under any Contract, all payment intangibles, customer
lists, Licenses, Copyrights, Trademarks, Patents, and all applications therefor
and reissues, extensions or renewals thereof, rights in Intellectual Property,
interests in partnerships, joint ventures and other business associations,
licenses, permits, copyrights, trade secrets, proprietary or confidential
information, inventions (whether or not patented or patentable), technical
information, procedures, designs, knowledge, know-how, software, data bases,
data, skill, expertise, experience, processes, models, drawings, materials and
records, goodwill (including the goodwill associated with any Trademark or
Trademark License), all rights and claims in or under insurance policies
(including insurance for fire, damage, loss and casualty, whether covering
personal property, real property, tangible rights or intangible rights, all
liability, life, key man and business interruption insurance, and all unearned
premiums), uncertificated securities, choses in action, deposit, checking and
other bank accounts, rights to receive tax refunds and other payments, rights to
receive dividends, distributions, cash, Instruments and other property in
respect of or in exchange for pledged Stock and Investment Property, rights of
indemnification, all books and records,
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correspondence, credit files, invoices and other papers, including without
limitation all tapes, cards, computer runs and other papers and documents in the
possession or under the control of such Credit Party or any computer bureau or
service company from time to time acting for such Credit Party.
"GOODS" means all "goods" as defined in the Code, now owned or
hereafter acquired by any Credit Party, wherever located, including embedded
software to the extent included in "goods" as defined in the Code, manufactured
homes, standing timber that is cut and removed for sale and unborn young of
animals.
"GOVERNMENTAL AUTHORITY" shall mean any nation or government, any
state or other political subdivision thereof, and any agency, department or
other entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"GUARANTEED INDEBTEDNESS" shall mean, as to any Person, any
obligation of such Person guaranteeing any indebtedness, lease, dividend, or
other obligation ("PRIMARY OBLIGATIONS") of any other Person (the "PRIMARY
OBLIGOR") in any manner, including any obligation or arrangement of such Person
(a) to purchase or repurchase any such primary obligation, (b) to advance or
supply funds (i) for the purchase or payment of any such primary obligation or
(ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance sheet condition
of the primary obligor, (c) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation, or (d) to indemnify the owner of such primary obligation against
loss in respect thereof. The amount of any Guaranteed Indebtedness at any time
shall be deemed to be an amount equal to the lesser at such time of (x) the
stated or determinable amount of the primary obligation in respect of which such
Guaranteed Indebtedness is made and (y) the maximum amount for which such Person
may be liable pursuant to the terms of the instrument embodying such Guaranteed
Indebtedness; or, if not stated or determinable, the maximum reasonably
anticipated liability (assuming full performance) in respect thereof.
"GUARANTIES" shall mean, collectively, the Holdings Guaranty,
each Subsidiary Guaranty and any other guaranty executed by any Guarantor in
favor of Agent and Lenders in respect of the Obligations.
"GUARANTORS" shall mean Holdings, each Subsidiary of Borrower,
and each other Person, if any, which executes a guarantee or other similar
agreement in favor of Agent in connection with the transactions contemplated by
the Agreement and the other Loan Documents.
"HAZARDOUS MATERIAL" shall mean any substance, material or waste
which is regulated by or forms the basis of liability now or hereafter under,
any Environmental Laws, including any material or substance which is (a) defined
as a "solid waste,"
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"hazardous waste," "hazardous material," "hazardous substance," "extremely
hazardous waste," "restricted hazardous waste," "pollutant," "contaminant,"
"hazardous constituent," "special waste," "toxic substance" or other similar
term or phrase under any Environmental Laws, (b) petroleum or any fraction or
by-product thereof, asbestos, polychlorinated biphenyls (PCB's), or any
radioactive substance.
"HOLDINGS" shall have the meaning ascribed thereto in the
recitals to the Agreement.
"HOLDINGS GUARANTY" shall mean the Holdings Guaranty dated as of
April 15, 1999 executed by Holdings in favor of Agent, on behalf of itself and
Lenders.
"HOLDINGS INTELLECTUAL PROPERTY SECURITY AGREEMENT" shall mean
the Intellectual Property Security Agreement dated as of April 15, 1999 entered
into between Agent, on behalf of itself and Lenders, and Holdings.
"HOLDINGS NOTE" shall mean the $5,000,000 promissory note from
Holdings to Borrower dated April 15, 1999.
"HOLDINGS PLEDGE AGREEMENT" shall mean the Pledge Agreement dated
as of April 15, 1999 entered into between Agent, on behalf of itself and
Lenders, and Holdings.
"HOLDINGS SECURITY AGREEMENT" shall mean the Security Agreement
dated as of April 15, 1999 entered into between Agent, on behalf of itself and
Lenders, and Holdings, as amended by that certain First Amendment to Holdings
Security Agreement dated September 29, 2001.
"INDEBTEDNESS" of any Person shall mean without duplication (a)
all indebtedness of such Person for borrowed money or for the deferred purchase
price of property payment for which is deferred six (6) months or more, but
excluding obligations to trade creditors incurred in the ordinary course of
business that are not overdue by more than six (6) months unless being contested
in good faith, (b) all reimbursement and other obligations with respect to
letters of credit, bankers' acceptances and surety bonds, whether or not
matured, (c) all obligations evidenced by notes, bonds, debentures or similar
instruments, (d) all indebtedness created or arising under any conditional sale
or other title retention agreement with respect to property acquired by such
Person (even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (e) all Capital Lease Obligations and the present value (discounted
at the Index Rate as in effect on the Closing Date) of future rental payments
under all synthetic leases, (f) all obligations of such Person under commodity
purchase or option agreements or other commodity price hedging arrangements, in
each case whether contingent or matured, (g) all obligations of such Person
under any foreign exchange contract, currency swap agreement, interest rate
swap, cap or collar agreement or other similar agreement or arrangement designed
to alter
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the risks of that Person arising from fluctuations in currency values or
interest rates, in each case whether contingent or matured, (h) all Indebtedness
referred to above secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any Lien upon or
in property or other assets (including accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness, and (i) the Obligations; PROVIDED, that the
obligation of Borrower to make the Contingent Payment shall not constitute
Indebtedness.
"INDEMNIFIED LIABILITIES" shall have the meaning assigned to it
in SECTION 1.13.
"INDEX RATE" shall mean, for any day, a floating rate equal to
the higher of (i) the rate publicly quoted from time to time by THE WALL STREET
JOURNAL as the "base rate on corporate loans at large U.S. money center
commercial banks" (or, if THE WALL STREET JOURNAL ceases quoting a base rate of
the type described, the highest per annum rate of interest published by the
Federal Reserve Board in Federal Reserve statistical release H.15 (519) entitled
"Selected Interest Rates" as the Bank prime loan rate or its equivalent), and
(ii) the Federal Funds Rate plus fifty (50) basis points per annum. Each change
in any interest rate provided for in the Agreement based upon the Index Rate
shall take effect at the time of such change in the Index Rate. Notwithstanding
the foregoing, if at any date of determination the Index Rate as determined
shall be less than 5.9% per annum, the Index Rate shall be deemed to be 5.9% per
annum.
"INDEX RATE LOAN" shall mean a Loan or portion thereof bearing
interest by reference to the Index Rate.
"INSTRUMENTS" means all "instruments," as such term is defined in
the Code, now owned or hereafter acquired by any Credit Party, wherever located,
and, in any event, including all certificated securities, all certificates of
deposit, and all promissory notes and other evidences of indebtedness, other
than instruments that constitute, or are a part of a group of writings that
constitute, Chattel Paper.
"INTELLECTUAL PROPERTY" shall mean any and all Licenses, Patents,
Copyrights, Trademarks, trade secrets and customer lists.
"INTELLECTUAL PROPERTY SECURITY AGREEMENTS" shall mean,
collectively, the Holdings Intellectual Property Security Agreement, Borrower
Intellectual Property Security Agreement and Subsidiary Intellectual Property
Security Agreement in each case made in favor of Agent, on behalf of itself and
Lenders, by each applicable Credit Party.
"INTEREST EXPENSE" shall mean, with respect to any Person for any
fiscal period, interest expense (whether cash or non-cash) of such Person
determined in accordance with GAAP for the relevant period ended on such date,
including, in any
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event, interest expense with respect to any Funded Debt of such Person and
interest expense for the relevant period that has been capitalized on the
balance sheet of such Person.
"INTEREST PAYMENT DATE" means (a) as to any Index Rate Loan, the
first Business Day of each month to occur while such Loan is outstanding, (b) as
to any LIBOR Loan, the last day of the applicable LIBOR Period; PROVIDED that in
the case of any LIBOR Period greater than three months in duration, interest
shall be payable at three month intervals and on the last day of such LIBOR
Period; and PROVIDED further that in addition to the foregoing, each of (x) the
date upon which all of the Commitments have been terminated and the Loans have
been paid in full and (y) the Commitment Termination Date shall be deemed to be
an "Interest Payment Date" with respect to any interest which is then accrued
under the Agreement.
"INVENTORY" means all "inventory," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located, and
in any event including inventory, merchandise, goods and other personal property
that are held by or on behalf of any Credit Party for sale or lease or are
furnished or are to be furnished under a contract of service, or that constitute
raw materials, work in process, finished goods, returned goods, or materials or
supplies of any kind, nature or description used or consumed or to be used or
consumed in such Credit Party's business or in the processing, production,
packaging, promotion, delivery or shipping of the same, including all supplies
and embedded software.
"INVENTORY DAYS" means, (A) with respect to Borrower for each
Fiscal Month ending on or prior to December 31, 2002, the number of days for
such Fiscal Month determined as of the last day of such Fiscal Month by
reference to the following formula:
((CI-CCG)/PCG ) (DPM)) +(DCM) = Inventory Days
where
CI - means the aggregate book value of inventory of Borrower
as of the end of such Fiscal Month
CCG - means the cost of sales of Borrower for such Fiscal
Month
PCG - means the cost of sales for the immediately preceding
Fiscal Month
DPM - means the number of days in the immediately preceding
Fiscal Month
DCM - means the number of days in such Fiscal Month; and
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(B) with respect to Borrower for each Fiscal Quarter ending
on or after March 31, 2003, the number of days for such Fiscal Quarter
obtained by multiplying (a) the quotient of the aggregate book value of
inventory of Borrower as of the end of such Fiscal Quarter divided by the
cost of sales of Borrower for such Fiscal Quarter BY (b) the number of days
in such Fiscal Quarter.
For purposes of this definition book value of inventory and
cost of sales shall be calculated on a consolidated basis in accordance
with GAAP.
"INVESTMENT PROPERTY" means all "investment property" as such
term is defined in the Code now owned or hereafter acquired by any Credit Party,
wherever located, including (i) all securities, whether certificated or
uncertificated, including stocks, bonds, interests in limited liability
companies, partnership interests, treasuries, certificates of deposit, and
mutual fund shares; (ii) all securities entitlements of any Credit Party,
including the rights of any Credit Party to any securities account and the
financial assets held by a securities intermediary in such securities account
and any free credit balance or other money owing by any securities intermediary
with respect to that account; (iii) all securities accounts of any Credit Party;
(iv) all commodity contracts of any Credit Party; and (v) all commodity accounts
held by any Credit Party.
"IRC" shall mean the Internal Revenue Code of 1986, as amended,
and any successor thereto.
"IRB ASSIGNMENT DOCUMENTS" shall mean the documentation pursuant
to which (i) Seller assigns its rights and obligations under the IRB Lease
Agreement to Borrower and Borrower assumes such rights and obligations and (ii)
the Lebanon IRBs are transferred by an Affiliate of Seller to IRB Subsidiary.
"IRB INDENTURE" shall mean the Trust Indenture dated as of
December 1, 1994 by and among the City of Lebanon, Kentucky, a city and
political subdivision of the Commonwealth of Kentucky, and Star Bank, N.A.,
Kentucky, Lebanon, Kentucky (acting through the Corporate Trust Department of
Star Bank, National Association, in Cincinnati, Ohio), as Trustee, and as Paying
Agent and Bond Register.
"IRB LEASE AGREEMENT" shall mean the Lease Agreement dated as of
December 1, 1994, between the City of Lebanon, Kentucky, a city and political
subdivision of the Commonwealth of Kentucky, and Borrower, as assignee of Seller
thereunder pursuant to the terms of the IRB Assignment Documents.
"IRB SUBSIDIARY" shall mean Xxxxxx Lebanon Kentucky IBRB, LLC, a
Delaware limited liability company, and a wholly-owned domestic Subsidiary of
Borrower which shall be the holder of the Lebanon IRBs.
"IRS" shall mean the Internal Revenue Service, or any successor
thereto.
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"L/C ISSUER" shall have the meaning assigned to such term in
ANNEX B.
"LEBANON IRBS" shall mean the industrial revenue bonds issued in
respect of Borrower's Lebanon, Kentucky location and pursuant to the terms of
the IRB Indenture.
"LENDERS" shall mean GE Capital, the other Lenders named on the
signature page of the Agreement, and, if any such Lender shall decide to assign
all or any portion of the Obligations, such term shall include such assignee.
"LETTERS OF CREDIT" shall mean commercial letters of credit
issued for the account of Borrower by any L/C Issuer for which Agent and Lenders
have incurred Letter of Credit Obligations.
"LETTER OF CREDIT FEE" has the meaning ascribed thereto in ANNEX
B.
"LETTER OF CREDIT OBLIGATIONS" shall mean all outstanding
obligations incurred by Agent and Lenders at the request of Borrower, whether
direct or indirect, contingent or otherwise, due or not due, in connection with
the issuance of a reimbursement agreement or guaranty by Agent or purchase of a
participation as set forth in ANNEX B with respect to any Letter of Credit. The
amount of such Letter of Credit Obligations shall equal the maximum amount which
may be payable by Agent or Lenders thereupon or pursuant thereto.
"LETTER-OF-CREDIT RIGHTS" means letter-of-credit rights as such
term is defined in the Code, now owned or hereafter acquired by any Credit
Party, including rights to payment or performance under a letter of credit,
whether or not such Credit Party, as beneficiary, has demanded or is entitled to
demand payment or performance.
"LEVERAGE RATIO" means, with respect to Borrower, on a
consolidated basis, the ratio of (a) Funded Debt as of any date of
determination, to (b) EBITDA for the twelve months ending on that date of
determination.
"LIBOR BUSINESS DAY" shall mean a Business Day on which banks in
the city of London are generally open for interbank or foreign exchange
transactions.
"LIBOR LOAN" shall mean a Loan or any portion thereof bearing
interest by reference to the LIBOR Rate.
"LIBOR PERIOD" shall mean, with respect to any LIBOR Loan, each
period commencing on a LIBOR Business Day selected by Borrower pursuant to the
Agreement and ending one or three months thereafter, as selected by Borrower's
irrevocable notice to Agent as set forth in SECTION 1.5(e); PROVIDED that the
foregoing provision relating to LIBOR Periods is subject to the following:
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(a) if any LIBOR Period would otherwise end on a day that is
not a LIBOR Business Day, such LIBOR Period shall be extended to the
next succeeding LIBOR Business Day unless the result of such extension
would be to carry such LIBOR Period into another calendar month in
which event such LIBOR Period shall end on the immediately preceding
LIBOR Business Day;
(b) any LIBOR Period that would otherwise extend beyond the
Commitment Termination Date shall end two (2) LIBOR Business Days prior
to such date;
(c) any LIBOR Period pertaining to a LIBOR Loan that begins on
the last LIBOR 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 LIBOR Period) shall end on the last LIBOR Business Day of a
calendar month;
(d) Borrower shall select LIBOR Periods so as not to require a
payment or prepayment of any LIBOR Loan during a LIBOR Period for such
Loan; and
(e) Borrower shall select LIBOR Periods so that there shall be
no more than eight (8) separate LIBOR Loans in existence at any one
time.
"LIBOR RATE" shall mean for each LIBOR Period, a rate of interest
determined by Agent equal to:
(a) the offered rate for deposits in United States Dollars for
the applicable LIBOR Period which appears on Telerate Page 3750 as of
11:00 a.m., London time, on the second full LIBOR Business Day next
preceding the first day of each LIBOR Period (unless such date is not a
Business Day, in which event the next succeeding Business Day will be
used); divided by
(b) a number equal to 1.0 minus the aggregate (but without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the day which is two (2) LIBOR Business Days
prior to the beginning of such LIBOR Period (including basic,
supplemental, marginal and emergency reserves under any regulations of
the Board of Governors of the Federal Reserve system or other
governmental authority having jurisdiction with respect thereto, as now
and from time to time in effect) for Eurocurrency funding (currently
referred to as "Eurocurrency liabilities" in Regulation D of such Board
which are required to be maintained by a member bank of the Federal
Reserve System).
If such interest rates shall cease to be available from Telerate News
Service, the LIBOR Rate shall be determined from such financial
reporting service or other information as shall be mutually acceptable
to Agent and Borrower.
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Notwithstanding the foregoing, if at any date of determination the
LIBOR Rate for the applicable LIBOR Period as determined above shall be
less than 3%, the LIBOR Rate for such LIBOR Period shall be deemed to
be 3%.
"LICENSE" shall mean any Copyright License, Patent License,
Trademark License or other license of rights or interests now held or hereafter
acquired by any Credit Party.
"LIEN" shall mean any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim, security
interest, easement or encumbrance, or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including any lease or title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement perfecting a security interest
under the Code or comparable law of any jurisdiction).
"LITIGATION" shall have the meaning assigned to it in SECTION
3.13.
"LOAN ACCOUNT" shall have the meaning assigned to it in SECTION
1.12.
"LOAN DOCUMENTS" shall mean the Agreement, the Notes, the
Collateral Documents, and all other agreements, instruments, documents and
certificates identified in the Closing Checklist executed and delivered to, or
in favor of, Agent and/or Lenders and including all other pledges, powers of
attorney, consents, assignments, contracts, notices, and all other written
matter whether heretofore, now or hereafter executed by or on behalf of any
Credit Party, or any employee of any Credit Party, and delivered to Agent or any
Lender in connection with the Agreement or the transactions contemplated hereby.
Any reference in the Agreement or any other Loan Document to a Loan Document
shall include all appendices, exhibits or schedules thereto, and all amendments,
restatements, supplements or other modifications thereto, and shall refer to
such Agreement as the same may be in effect at any and all times such reference
becomes operative.
"LOANS" shall mean the Revolving Loan and the Term Loans.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on
(a) the business, assets, operations, prospects or financial or other condition
of the Credit Parties considered as a whole or, (b) Borrower's ability to pay
any of the Loans or any of the other Obligations in accordance with the terms of
the Agreement, (c) the Collateral or Agent's Liens, on behalf of itself and
Lenders, on the Collateral or the priority of such Liens, or (d) Agent's or any
Lender's rights and remedies under the Agreement and the other Loan Documents.
Without limiting the foregoing, any event or occurrence adverse to one or more
Credit Parties which results or could reasonably be expected to result in costs
and/or liabilities and/or loss of revenues, individually or in the aggregate, to
any
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Credit Party in any 30-day period in excess of $1,500,000 as of any date of
determination shall be deemed to have had Material Adverse Effect.
"MAXIMUM AMOUNT" shall mean, at any particular time, an amount
equal to the Revolving Loan Commitment of all Lenders.
"MIG" shall mean Xxxxxx Industrial Group, Inc., a Georgia
corporation.
"MIG PREFERRED STOCK" shall mean non-voting shares of the Series
1999A Preferred Stock of MIG, no par value, having terms and conditions
satisfactory to Agent.
"MORTGAGED PROPERTIES" shall have the meaning assigned to it in
ANNEX D.
"MORTGAGES" shall mean each of the mortgages, deeds of trust,
leasehold mortgages, leasehold deeds of trust, collateral assignments of leases
or other real estate security documents delivered by any Credit Party to Agent
with respect to the Mortgaged Properties, all in form and substance satisfactory
to Agent.
"XXXXXX PLEDGE AGREEMENT" shall mean that certain Pledge
Agreement, dated as of May 14, 2001 by and between Agent and Xxxxxxx X. Xxxxxx.
"XXXXXX GROUP" shall have the meaning assigned to it in Section
6.14.
"MULTIEMPLOYER PLAN" shall mean a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA, and to which any Credit Party or ERISA Affiliate
is making, is obligated to make, has made or been obligated to make,
contributions on behalf of participants who are or were employed by any of them.
"NET WORTH" shall mean, with respect to any Person as of any date
of determination, the book value of the assets of such Person, MINUS (a)
reserves applicable thereto, and MINUS (b) all of such Person's liabilities on a
consolidated basis (including accrued and deferred income taxes), all as
determined in accordance with GAAP.
"NEW CFO" shall have the meaning assigned to it in SECTION 5.11.
"NON-FUNDING LENDER" shall have the meaning assigned to it in
Section 9.9(a)(ii).
"NOTES" shall mean the Revolving Notes and the Term Notes,
collectively.
"NOTICE OF CONVERSION/CONTINUATION" shall have the meaning
assigned to it in SECTION 1.5(e).
"NOTICE OF REVOLVING CREDIT ADVANCE" shall have the meaning
assigned to it in SECTION 1.1(a).
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"OBLIGATIONS" shall mean all loans, advances, debts, liabilities
and obligations, for the performance of covenants, tasks or duties or for
payment of monetary amounts (whether or not such performance is then required or
contingent, or such amounts are liquidated or determinable) owing by any Credit
Party to Agent or any Lender, and all covenants and duties regarding such
amounts, of any kind or nature, present or future, whether or not evidenced by
any note, agreement or other instrument, arising under the Agreement or any of
the other Loan Documents. This term includes all principal, interest (including
all interest which accrues after the commencement of any case or proceeding in
bankruptcy after the insolvency of, or for the reorganization of any Credit
Party, whether or not allowed in such proceeding), Fees, Charges, expenses,
attorneys' fees and any other sum chargeable to any Credit Party under the
Agreement or any of the other Loan Documents.
"OPERATING BUDGET" shall mean the twelve-month operating budget
of Borrower for the period from January ___, 2002 to December 31, 2002, in
substantially the form attached hereto as EXHIBIT 1.3, delivered by Borrower to
Agent pursuant to paragraph (q) of Annex E.
"OPERATING COMMITTEE" shall have the meaning assigned to it in
SECTION 5.11.
"ORIGINAL FEE LETTER" shall have the meaning assigned to it in
SECTION 1.9(g).
"PATENT LICENSE" shall mean rights under any written agreement
now owned or hereafter acquired by any Credit Party granting any right with
respect to any invention on which a Patent is in existence.
"PATENTS" shall mean all of the following in which any Credit
Party now holds or hereafter acquires any interest: (a) all letters patent of
the United States or any other country, all registrations and recordings
thereof, and all applications for letters patent of the United States or any
other country, including registrations, recordings and applications in the
United States Patent and Trademark Office or in any similar office or agency of
the United States, any State or Territory thereof, or any other country, and (b)
all reissues, continuations, continuations-in-part or extensions thereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
successor thereto.
"PERMITTED ENCUMBRANCES" shall mean the following encumbrances:
(a) Liens for taxes or assessments or other governmental Charges not yet due and
payable; (b) pledges or deposits of money securing statutory obligations under
workmen's compensation, unemployment insurance, social security or public
liability laws or similar legislation (excluding Liens under ERISA); (c) pledges
or deposits of money securing bids, tenders, contracts (other than contracts for
the payment of money) or leases to
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which any Credit Party is a party as lessee made in the ordinary course of
business; (d) inchoate and unperfected workers', mechanics' or similar liens
arising in the ordinary course of business, so long as such Liens attach only to
Equipment, Fixtures and/or Real Estate; (e) carriers', warehousemen's,
suppliers' or other similar possessory liens arising in the ordinary course of
business and securing liabilities in an outstanding aggregate amount not in
excess of $50,000 at any time, so long as such Liens attach only to Inventory;
(f) deposits securing, or in lieu of, surety, appeal or customs bonds in
proceedings to which any Credit Party is a party; (g) any attachment or judgment
lien not constituting an Event of Default under SECTION 8.1(j); (h) zoning
restrictions, easements, licenses, or other restrictions on the use of any Real
Estate or other minor irregularities in title (including leasehold title)
thereto, so long as the same do not materially impair the use, value, or
marketability of such Real Estate; (i) presently existing or hereinafter created
Liens in favor of Agent, on behalf of Lenders; and (j) Liens expressly permitted
under CLAUSES (b) and (c) of SECTION 6.7 of the Agreement.
"PERSON" shall mean any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization, association,
corporation, limited liability company, institution, public benefit corporation,
other entity or government (whether federal, state, county, city, municipal,
local, foreign, or otherwise, including any instrumentality, division, agency,
body or department thereof).
"PLAN" shall mean, at any time, an employee benefit plan, as
defined in Section 3(3) of ERISA, which any Credit Party maintains, contributes
to or has an obligation to contribute to on behalf of participants who are or
were employed by any Credit Party.
"PLEDGE AGREEMENTS" shall mean, collectively, the Holdings Pledge
Agreement, the Borrower Pledge Agreement, the Subsidiary Pledge Agreement, the
Xxxxxx Pledge Agreement, and any pledge agreements entered into after the
Closing Date by any Credit Party (as required by the Agreement or any other Loan
Document).
"PROCEEDS" means "proceeds," as such term is defined in the Code,
including (a) any and all proceeds of any insurance, indemnity, warranty or
guaranty payable to any Credit Party from time to time with respect to any of
the Collateral, (b) any and all payments (in any form whatsoever) made or due
and payable to any Credit Party from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any Governmental Authority (or any Person acting under
color of governmental authority), (c) any claim of any Credit Party against
third parties (i) for past, present or future infringement of any Patent or
Patent License, or (ii) for past, present or future infringement or dilution of
any Copyright, Copyright License, Trademark or Trademark License, or for injury
to the goodwill associated with any Trademark or Trademark License, (d) any
recoveries by any Credit Party against third parties with respect to any
litigation or dispute concerning any of the Collateral including claims arising
out of the loss or nonconformity of,
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interference with the use of, defects in, or infringement of rights in, or
damage to, Collateral, (e) all amounts collected on, or distributed on account
of, other Collateral, including dividends, interest, distributions and
Instruments with respect to Investment Property and pledged Stock, and (f) any
and all other amounts, rights to payment or other property acquired upon the
sale, lease, license, exchange or other disposition of Collateral and all rights
arising out of Collateral.
"PROJECTIONS" means Borrower's forecasted consolidated: (a)
balance sheets; (b) profit and loss statements; (c) cash flow statements; and
(d) capitalization statements, all prepared on a Subsidiary by Subsidiary or
division by division basis, if applicable, together with appropriate supporting
details and a statement of underlying assumptions.
"PRO RATA SHARE" shall mean with respect to all matters relating
to any Lender (a) with respect to the Revolving Loan, the percentage obtained by
dividing (i) the Revolving Loan Commitment by (ii) the aggregate Revolving Loan
Commitments, (b) with respect to the Term Loan(s), the percentage obtained by
dividing (i) the Term Loan Commitment of that Lender by (ii) the aggregate Term
Loan Commitments of all Lenders, as any such percentages may be adjusted by
assignments permitted pursuant to SECTION 9.1, (c) with respect to all Loans,
the percentage obtained by dividing (i) the aggregate Commitments of that Lender
by (ii) the aggregate Commitments of all Lenders, and (d) with respect to all
Loans on and after the Commitment Termination Date, the percentage obtained by
dividing (i) the aggregate outstanding principal balance of the Loans held by
that Lender, by (ii) the outstanding principal balance of the Loans held by all
Lenders.
"QUALIFIED PLAN" shall mean a Plan which is intended to be
tax-qualified under Section 401(a) of the IRC.
"REAL ESTATE" shall have the meaning assigned to it in SECTION
3.6.
"RELEASE" shall mean any release, threatened release, spill,
emission, leaking, pumping, pouring, emitting, emptying, escape, injection,
deposit, disposal, discharge, dispersal, dumping, leaching or migration of
Hazardous Material in the indoor or outdoor environment, including the movement
of Hazardous Material through or in the air, soil, surface water, ground water
or property.
"REQUISITE LENDERS" shall mean (a) Lenders having more than
sixty-six and two-thirds percent (66 2/3%) of the Commitments of all Lenders, or
(b) if the Commitments have been terminated, more than sixty-six and two-thirds
percent (66 2/3%) of the aggregate outstanding amount of all Loans.
"REQUISITE REVOLVING LENDERS" shall mean (a) Lenders having more
than sixty-six and two-thirds percent (66 2/3%) of the Revolving Loan
Commitments of all Lenders, or (b) if the Revolving Loan Commitments have been
terminated, more than
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sixty-six and two-thirds percent (66 2/3%) of the aggregate outstanding amount
of the Revolving Loan.
"RESERVES" shall mean, with respect to the Revolving Borrowing
Base (a) reserves established by Agent from time to time against Eligible
Inventory pursuant to SECTION 5.9, (b) reserves established pursuant to SECTION
5.4(c) and (c) such other reserves against Eligible Accounts, Eligible
Inventory, the Revolving Borrowing Base, the Maximum Amount and/or Borrowing
Availability which Agent may, in its reasonable credit judgment, establish from
time to time. Without limiting the generality of the foregoing, Reserves
established (i) to ensure the payment of accrued Interest Expense or
Indebtedness, (ii) because Agent is not satisfied with its Collateral position,
as determined in its sole discretion, with respect to Borrower's assets,
including Borrower's interest in Equipment and Real Estate, located at
Borrower's Lebanon Kentucky facility, or (iii) with respect to unpaid taxes or
contingent liabilities relating to litigation claims (including preference
actions), shall in each case be deemed to be a reasonable exercise of Agent's
credit judgment.
"RESTRICTED PAYMENT" shall mean (a) the declaration or payment of
any dividend or the incurrence of any liability to make any other payment or
distribution of cash or other property or assets in respect of a Person's Stock,
(b) any payment on account of the purchase, redemption, defeasance, sinking fund
or other retirement of a Person's Stock or any other payment or distribution
made in respect thereof, either directly or indirectly, (c) any payment made to
redeem, purchase, repurchase or retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire Stock of such Person
now or hereafter outstanding; (d) any payment of a claim for the rescission of
the purchase or sale of, or for material damages arising from the purchase or
sale of, any shares of such Person's Stock or of a claim for reimbursement,
indemnification or contribution arising out of or related to any such claim for
damages or rescission; (e) any payment, loan, contribution, or other transfer of
funds or other property to any Stockholder of such Person other than payment of
compensation in the ordinary course to stockholders who are employees of such
Person; and (f) any payment of management fees (or other fees of a similar
nature) by such Person to any Stockholder of such Person or their Affiliates.
"RETIREE WELFARE PLAN" shall mean, at any time, a Plan that is a
"welfare plan" as defined in Section 3(2) of ERISA, that provides for continuing
coverage or benefits for any participant or any beneficiary of a participant
after such participant's termination of employment, other than continuation
coverage provided pursuant to Section 4980B of the IRC and at the sole expense
of the participant or the beneficiary of the participant.
"REVOLVING BORROWING BASE" shall mean, as of any date of
determination by Agent, from time to time, an amount equal to the sum at such
time of:
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(a) up to eighty-five percent (85%) of the book value of
Borrower's Eligible Accounts, less any Reserves established by Agent at
such time;
(b) up to sixty percent (60%) of the book value of Borrower's
Eligible Inventory (other than work-in-process Inventory) valued on a
first-in, first-out basis (at the lower of cost or market), less any
Reserves established by Agent at such time;
(c) up to twenty percent (20%) of the book value of Borrower's
Eligible Inventory consisting of work-in-process Inventory valued on a
first-in, first-out basis (at the lower of cost or market), less any
Reserves established by Agent at such time; and
(d) on any date of determination beginning December 28, 2001
and ending January 31, 2002, $500,000; on any date of determination
beginning February 1, 2002 and ending February 28, 2002, $400,000; on
any date of determination beginning March 1, 2002 and ending March 31,
2002, $300,000; on any date of determination beginning April 1, 2002
and ending April 30, 2002, $200,000; on any date of determination
beginning May 1, 2002 and ending May 31, 2002, $100,000; and, on any
date of determination thereafter, $0.
REVOLVING BORROWING BASE CERTIFICATE" shall mean a certificate to
be executed and delivered from time to time by Borrower in the form attached to
the Agreement as EXHIBIT 4.1(B).
"REVOLVING CREDIT ADVANCE" shall have the meaning assigned to it
in SECTION 1.1(a)(i).
"REVOLVING LENDERS" shall mean, as of any date of determination,
Lenders having a Revolving Loan Commitment.
"REVOLVING LOAN" shall mean, at any time, the sum of (i) the
aggregate amount of Revolving Credit Advances outstanding to Borrower, plus (ii)
the aggregate Letter of Credit Obligations incurred on behalf of Borrower.
Unless the context otherwise requires, references to the outstanding principal
balance of the Revolving Loan shall include the outstanding balance of Letter of
Credit Obligations.
"REVOLVING LOAN COMMITMENT" shall mean (a) as to any Lender, the
aggregate commitment of such Lender to make Revolving Credit Advances and/or
incur Letter of Credit Obligations as set forth on ANNEX J to the Agreement or
in the most recent Assignment Agreement executed by such Lender and (b) as to
all Lenders, the aggregate commitment of all Lenders to make Revolving Credit
Advances and/or incur Letter of Credit Obligations, which aggregate commitment
shall be $10,000,000 on the Closing Date, as such amount may be adjusted, if at
all, from time to time in accordance with the Agreement.
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"REVOLVING NOTE" shall have the meaning assigned to it in SECTION
1.1(a)(ii).
"SCHEDULED MATURITY DATE" shall mean August 30, 2006.
"SECURITY AGREEMENTS" shall mean, collectively, the Holdings
Security Agreement, Borrower Security Agreement and Subsidiary Security
Agreement, in each case of even date herewith entered into among Agent, on
behalf of itself and Lenders, and each Credit Party that is a signatory thereto.
"SELLER" shall mean Worthington Custom Plastics, Inc., an Ohio
corporation.
"SOFTWARE" means all "software" as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, other than software
embedded in any category of goods, including all computer programs and all
supporting information provided in connection with a transaction related to any
program.
"SOLVENT" shall mean, with respect to any Person on a particular
date, that on such date (a) the fair value of the property of such Person is
greater than the total amount of liabilities, including contingent liabilities,
of such Person; (b) the present fair salable value of the assets of such Person
is not less than the amount that will be required to pay the probably liability
of such Person on its debts as they become absolute and matured; (c) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature; and (d) such Person is not engaged in a business or transaction, and is
not about to engage in a business or transaction, for which such Person's
property would constitute an unreasonably small capital. The amount of
contingent liabilities (such as litigation, guarantees and pension plan
liabilities) at any time shall be computed as the amount which, in light of all
the facts and circumstances existing at the time, represents the amount which
can be reasonably be expected to become an actual or matured liability.
"STOCK" shall mean all shares, options, warrants, membership
interests, general or limited partnership interests or other equivalents
(regardless of how designated) of or in a corporation, partnership or equivalent
entity whether voting or nonvoting, including common stock, preferred stock or
any other "equity security" (as such term is defined in Rule 3a11-1 of the
General Rules and Regulations promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended).
"SUBSIDIARY" shall mean, with respect to any Person, (a) any
corporation of which an aggregate of more than fifty percent (50%) of the
outstanding Stock having ordinary voting power to elect a majority of the board
of directors of such corporation (irrespective of whether, at the time, Stock of
any other class or classes of such corporation shall have or might have voting
power by reason of the happening of any
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contingency) is at the time, directly or indirectly, owned legally or
beneficially by such Person and/or one or more Subsidiaries of such Person, or
with respect to which any such Person has the right to vote or designate the
vote of fifty percent (50%) or more of such Stock whether by proxy, agreement,
operation of law or otherwise, and (b) any partnership or limited liability
company in which such Person and/or one or more Subsidiaries of such Person
shall have an interest (whether in the form of voting or participation in
profits or capital contribution) of more than fifty percent (50%) or of which
any such Person is a general partner or may exercise the powers of a general
partner.
"SUBSIDIARY GUARANTY" shall mean the Subsidiary Guaranty dated as
of April 15, 1999 executed by each Subsidiary of Borrower in favor of Agent, on
behalf of itself and Lenders.
"SUBSIDIARY INTELLECTUAL PROPERTY SECURITY AGREEMENT" shall mean
the Intellectual Property Security Agreement dated as of April 15, 1999 entered
into among Agent, on behalf of itself and Lenders, the IRB Subsidiary and each
other Credit Party party thereto.
"SUBSIDIARY PLEDGE AGREEMENT" shall mean the Subsidiary Pledge
Agreement dated as of April 15, 1999 entered into by Agent, on behalf of itself
and Lenders, and the IRB Subsidiary.
"SUBSIDIARY SECURITY AGREEMENT" shall mean the Security Agreement
dated as of April 15, 1999 entered into among Agent, on behalf of itself and
Lenders, the IRB Subsidiary and each other Credit Party party thereto, as
amended by that certain First Amendment to Security Agreement dated September
29, 2001.
"SUPPORTING OBLIGATIONS" means all supporting obligations as such
term is defined in the Code, including letters of credit and guaranties issued
in support of Accounts, Chattel Paper, Documents, General Intangibles,
Instruments, or Investment Property.
"TANGIBLE NET WORTH" shall mean, with respect to any Person at
any date, the Net Worth of such Person at such date, EXCLUDING, HOWEVER, from
the determination of the total assets at such date, (a) all goodwill,
capitalized organizational expenses, capitalized research and development
expenses, trademarks, trade names, copyrights, patents, patent applications,
licenses and rights in any thereof, and other intangible items, (b) all
unamortized debt discount and expense, (c) treasury Stock, and (d) any write-up
in the book value of any asset resulting from a revaluation thereof.
"TAX ASSETS" has the meaning assigned to it in SECTION 6.14.
"TAX RETURNS" has the meaning assigned to it in SECTION 3.11.
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"TAX SHARING AGREEMENT" shall mean the Tax Sharing Agreement
dated as of April 15, 1999 by and among MIG and Holdings.
"TAXES" shall mean taxes, levies, imposts, deductions, Charges or
withholdings, and all liabilities with respect thereto, excluding taxes imposed
on or measured by the net income of Agent or a Lender by the jurisdictions under
the laws of which Agent and Lenders are organized or any political subdivision
thereof or by the jurisdiction of any lending office of any Lender used to make
Loans hereunder unless the connection with such lending office jurisdiction
arises solely from any Lender having executed, delivered or performed its
obligations or receive a payment under, or enforced the Agreement or the Notes.
"TERM LENDERS" means the Term Loan A Lenders, the Term Loan B
Lenders and the Term Loan C Lenders.
"TERM LOAN A" has the meaning assigned to it in SECTION
1.1(b)(i).
"TERM LOAN A COMMITMENT" means (a) as to any Term Loan A Lender,
the commitment of such Term Loan A Lender to make its Pro Rata Share of the Term
Loan A as set forth on ANNEX J to the Agreement or in the most recent Assignment
Agreement executed by such Term Loan A Lender, and (b) as to all Term Loan A
Lenders, the aggregate commitment of all Term Loan A Lenders to make the Term
Loan A, which aggregate commitment shall be Ten Million Dollars ($10,000,000) on
the Closing Date. After advancing the Term Loan A, each reference to a Lender's
Term Loan A Commitment shall refer to that Lender's Pro Rata Share of the
outstanding Term Loan A.
"TERM LOAN A LENDERS" means those Lenders having Term Loan A
Commitments.
"TERM LOAN A NOTE" has the meaning assigned to it in SECTION
1.1(b)(i).
"TERM LOAN B" has the meaning assigned to it in SECTION
1.1(c)(i).
"TERM LOAN B COMMITMENT" means (a) as to any Term Loan B Lender,
the commitment of such Term Loan B Lender to make its Pro Rata Share of the Term
Loan B as set forth on ANNEX J to the Agreement or in the most recent Assignment
Agreement executed by such Term Loan B Lender, and (b) as to all Term Loan B
Lenders, the aggregate commitment of all Term Loan B Lenders to make the Term
Loan B, which aggregate commitment shall be Seven Million Dollars ($7,000,000)
on the Closing Date. After advancing the Term Loan B, each reference to a
Lender's Term Loan B Commitment shall refer to that Lender's Pro Rata Share of
the outstanding Term Loan B.
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"TERM LOAN B LENDERS" means those Lenders having Term Loan B
Commitments.
"TERM LOAN B NOTE" has the meaning assigned to it in SECTION
1.1(c)(i).
"TERM LOAN C" has the meaning assigned to it in SECTION
1.1(d)(i).
"TERM LOAN C COMMITMENT" means (a) as to any Term Loan C Lender,
the commitment of such Term Loan C Lender to make its Pro Rata Share of the Term
Loan C as set forth on ANNEX J to the Agreement or in the most recent Assignment
Agreement executed by such Term Loan C Lender, and (b) as to all Term Loan C
Lenders, the aggregate commitment of all Term Loan C Lenders to make the Term
Loan C, which aggregate commitment shall be Five Million Dollars ($5,000,000) on
the Closing Date. After advancing the Term Loan C, each reference to a Lender's
Term Loan C Commitment shall refer to that Lender's Pro Rata Share of the
outstanding Term Loan C.
"TERM LOAN C LENDERS" means those Lenders having Term Loan C
Commitments.
"TERM LOAN C NOTE" has the meaning assigned to it in SECTION
1.1(d)(i).
"TERM LOAN COMMITMENTS" means collectively, the Term Loan A
Commitment, Term Loan B Commitment and Term Loan C Commitment.
"TERM LOANS" means collectively, Term Loan A, Term Loan B and
Term Loan C.
"TERM NOTES" means collectively, the Term Loan A Notes, Term Loan
B Notes and Term Loan C Notes.
"TERMINATION DATE" shall mean the date on which the Loans have
been indefeasibly repaid in full and all other Obligations under the Agreement
and the other Loan Documents have been completely discharged and Letter of
Credit Obligations have been cash collateralized, canceled or backed by stand-by
letters of credit in accordance with ANNEX B, and Borrower shall have no further
right to borrow any monies under the Agreement.
"THIRD PARTY INTERACTIVES" shall mean all Persons with whom any
Credit Party exchanges data electronically in the ordinary course of business,
including, without limitation, customers, suppliers, third-party vendors,
subcontractors, processors-converters, shippers and warehousemen.
"TITLE IV PLAN" shall mean an employee pension benefit plan, as
defined in Section 3 (2) of ERISA (other than a Multiemployer Plan), which is
covered by Title IV
A-31
of ERISA, and which any Credit Party or ERISA Affiliate maintains, contributes
to or has an obligation to contribute to on behalf of participants who are or
were employed by any of them.
"TRADEMARK LICENSE" shall mean rights under any written agreement
now owned or hereafter acquired by any Credit Party granting any right to use
any Trademark.
"TRADEMARKS" shall mean all of the following now owned or
hereafter acquired by any Credit Party: (a) all trademarks, trade names,
corporate or limited liability company names, business names, trade styles,
service marks, logos, other source or business identifiers, prints and labels on
which any of the foregoing have appeared or appear, designs and general
intangibles of like nature (whether registered or unregistered), now owned or
existing or hereafter adopted or acquired, all registrations and recordings
thereof, and all applications in connection therewith, including registrations,
recordings and applications in the United States Patent and Trademark Office or
in any similar office or agency of the United States, any state or territory
thereof, or any other country or any political subdivision thereof; (b) all
reissues, extensions or renewals thereof; and (c) all goodwill associated with
or symbolized by any of the foregoing.
"TWO YEAR ANNIVERSARY" shall have the meaning assigned to it in
SECTION 1.9(e).
"UNFUNDED PENSION LIABILITY" shall mean, at any time, the
aggregate amount, if any, of the sum of (a) the amount by which the present
value of all accrued benefits under each Title IV Plan exceeds the fair market
value of all assets of such Title IV Plan allocable to such benefits in
accordance with Title IV of ERISA, all determined as of the most recent
valuation date for each such Title IV Plan using the actuarial assumptions for
funding purposes in effect under such Title IV Plan, and (b) for a period of
five (5) years following a transaction which might reasonably be expected to be
covered by Section 4069 of ERISA, the liabilities (whether or not accrued) that
could be avoided by any Credit Party or any ERISA Affiliate as a result of such
transaction.
"UNIFORM COMMERCIAL CODE JURISDICTION" means any jurisdiction
that has adopted all or substantially all of Article 9 as contained in the 2000
Official Text of the Uniform Commercial Code, as recommended by the National
Conference of Commissioners on Uniform State Laws and the American Law
Institute, together with any subsequent amendments or modifications to the
Official Text."
"WORTHINGTON" shall mean the portion of the Seller's business
consisting of substantially all of the assets of Seller's non-automotive
plastics operations located at Seller's Harrisburg and Concord, North Carolina,
St. Xxxxxxxx, South Carolina and Lebanon, Kentucky facilities.
A-32
"WORTHINGTON ACQUISITION" shall mean the acquisition of all or
substantially all of the assets of Worthington pursuant to the Worthington
Acquisition Agreement.
"WORTHINGTON ACQUISITION AGREEMENT" shall mean the Asset Purchase
Agreement, dated February 26, 1999, by and between Seller, MIG and Xxxxxx Custom
Plastics, Inc., as amended by that certain First Amendment to Asset Purchase
Agreement dated February 26, 1999 by and among Seller, MIG and Xxxxxx Custom
Plastics, Inc.
"WORTHINGTON LITIGATION" shall mean that certain case titled
Worthington Industries, Inc. and W.I. Products, Inc., f/k/a Worthington Custom
Plastics, Inc., Plaintiffs x. Xxxxxx Industrial Group, Inc. and Xxxxxx Custom
Plastics, Inc., Defendants (S.D. Ohio, Case No. C2-00-504) and all claims and
counterclaims that have been or could be brought in the future with respect to
such case.
All other undefined terms contained in any of the Loan Documents
shall, unless the context indicates otherwise, have the meanings provided for by
the Code as in effect in the State of New York to the extent the same are used
or defined therein. Unless otherwise specified, references in the Agreement or
any of the Appendices to a Section, subsection or clause refer to such Section,
subsection or clause as contained in the Agreement. The words "herein," "hereof"
and "hereunder" and other words of similar import refer to the Agreement as a
whole, including all Annexes, Exhibits and Schedules, as the same may from time
to time be amended, restated, modified or supplemented, and not to any
particular section, subsection or clause contained in the Agreement or any such
Annex, Exhibit or Schedule.
Wherever from the context it appears appropriate, each term
stated in either the singular or plural shall include the singular and the
plural, and pronouns stated in the masculine, feminine or neuter gender shall
include the masculine, feminine and neuter genders. The words "including",
"includes" and "include" shall be deemed to be followed by the words "without
limitation"; references to Persons include their respective successors and
assigns (to the extent and only to the extent permitted by the Loan Documents)
or, in the case of governmental Persons, Persons succeeding to the relevant
functions of such Persons; and all references to statutes and related
regulations shall include any amendments of the same and any successor statutes
and regulations. Whenever any provision in any Loan Document refers to the
knowledge (or an analogous phrase) of any Credit Party, such words are intended
to signify that such Credit Party has actual knowledge or awareness of a
particular fact or circumstance or that such Credit Party, if it had exercised
reasonable diligence, would have known or been aware of such fact or
circumstance.
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ANNEX B (SECTION 1.2)
TO
CREDIT AGREEMENT
LETTERS OF CREDIT
(a) ISSUANCE. Subject to the terms and conditions of the
Agreement, Agent and Revolving Lenders agree to incur, from time to time prior
to the Commitment Termination Date, upon the request of Borrower and for
Borrower's account, Letter of Credit Obligations by causing Letters of Credit to
be issued (by a bank or other legally authorized Person selected by or
acceptable to Agent in its sole discretion (each, an "L/C ISSUER")) for
Borrower's account and guaranteed by Agent; PROVIDED, HOWEVER, that if the L/C
Issuer is a Revolving Lender, then such Letters of Credit shall not be
guaranteed by Agent but rather each Revolving Lender shall, subject to the terms
and conditions hereinafter set forth, purchase (or be deemed to have purchased)
risk participations in all such Letters of Credit issued with the written
consent of Agent, as more fully described in paragraph (b)(ii) below. The
aggregate amount of all such Letter of Credit Obligations shall not at any time
exceed the least of (i) $1,500,000 (the "L/C Sublimit"), and (ii) the Maximum
Amount LESS the aggregate outstanding principal balance of the Revolving Credit
Advances. No such Letter of Credit shall have an expiry date which is more than
one year following the date of issuance thereof, and neither Agent nor Revolving
Lenders shall be under any obligation to incur Letter of Credit Obligations in
respect of, or purchase risk participations in, any Letter of Credit having an
expiry date which is later than the Commitment Termination Date.
(b) (i) ADVANCES AUTOMATIC; PARTICIPATIONS. In the event that
Agent or any Revolving Lender shall make any payment on or pursuant to any
Letter of Credit Obligation, such payment shall then be deemed automatically to
constitute a Revolving Credit Advance (which would extinguish the corresponding
Letter of Credit Obligations) to the Borrower under SECTION 1.1(a) of the
Agreement regardless of whether a Default or Event of Default shall have
occurred and be continuing and notwithstanding Borrower's failure to satisfy the
conditions precedent set forth in SECTION 2, and each Revolving Lender shall be
obligated to pay its Pro Rata Share thereof in accordance with the Agreement.
The failure of any Revolving Lender to make available to Agent for Agent's own
account its Pro Rata Share of any such Revolving Credit Advance or payment by
Agent under or in respect of a Letter of Credit shall not relieve any other
Revolving Lender of its obligation hereunder to make available to Agent its Pro
Rata Share thereof, but no Revolving Lender shall be responsible for the failure
of any other Revolving Lender to make available such other Revolving Lender's
Pro Rata Share of any such payment.
(ii) If it shall be illegal or unlawful for Borrower to incur
Revolving Credit Advances as contemplated by paragraph (b)(i) above because of
an Event of Default described in SECTION 8.1(h) or (i) or otherwise or if it
shall be illegal or unlawful for any Revolving Lender to be deemed to have
assumed a ratable share of the
B-1
reimbursement obligations owed to an L/C Issuer, or if the L/C Issuer is a
Revolving Lender, then (i) immediately and without further action whatsoever,
each Revolving Lender shall be deemed to have irrevocably and unconditionally
purchased from Agent (or such L/C Issuer, as the case may be) an undivided
interest and participation equal to such Revolving Lender's Pro Rata Share
(based on the Revolving Loan Commitments) of the Letter of Credit Obligations in
respect of all Letters of Credit then outstanding and (ii) thereafter,
immediately upon issuance of any Letter of Credit, each Revolving Lender shall
be deemed to have irrevocably and unconditionally purchased from Agent (or such
L/C Issuer, as the case may be) an undivided interest and participation in such
Revolving Lender's Pro Rata Share (based on the Revolving Loan Commitments) of
the Letter of Credit Obligations with respect to such Letter of Credit on the
date of such issuance. Each Revolving Lender shall fund its participation in all
payments or disbursements made under the Letters of Credit in the same manner as
provided in the Agreement with respect to Revolving Credit Advances.
(c) CASH COLLATERAL. If Borrower is required to provide cash
collateral for any Letter of Credit Obligations pursuant to the Agreement prior
to the Commitment Termination Date, Borrower will pay to Agent for the benefit
of Revolving Lenders cash or cash equivalents acceptable to Agent ("CASH
EQUIVALENTS") in an amount equal to 105% of the maximum amount then available to
be drawn under each applicable Letter of Credit outstanding for the benefit of
Borrower. Such funds or Cash Equivalents shall be held by Agent in a cash
collateral account (the "CASH COLLATERAL ACCOUNT") maintained at a bank or
financial institution acceptable to Agent. The Cash Collateral Account shall be
in the name of the Borrower and shall be pledged to, and subject to the control
of, Agent, for the benefit of Agent and Lenders, in a manner satisfactory to
Agent. Borrower hereby pledges and grants to Agent, on behalf of Lenders, a
security interest in all such funds and Cash Equivalents held in the Cash
Collateral Account from time to time and all proceeds thereof, as security for
the payment of all amounts due in respect of the Letter of Credit Obligations
and other Obligations, whether or not then due. The Agreement, including this
ANNEX B, shall constitute a security agreement under applicable law.
If any Letter of Credit Obligations, whether or not then due
and payable, shall for any reason be outstanding on the Commitment Termination
Date, Borrower shall either (i) provide cash collateral therefor in the manner
described above, or (ii) cause all such Letters of Credit and guaranties thereof
to be canceled and returned, or (iii) deliver a stand-by letter (or letters) of
credit in guaranty of such Letter of Credit Obligations, which stand-by letter
(or letters) of credit shall be of like tenor and duration (plus thirty (30)
additional days) as, and in an amount equal to 105% of, the aggregate maximum
amount then available to be drawn under, the Letters of Credit to which such
outstanding Letter of Credit Obligations relate and shall be issued by a Person,
and shall be subject to such terms and conditions, as are be satisfactory to
Agent in its sole discretion.
B-2
From time to time after funds are deposited in the Cash
Collateral Account by Borrower, whether before or after the Commitment
Termination Date, Agent may apply such funds or Cash Equivalents then held in
the Cash Collateral Account to the payment of any amounts, in such order as
Agent may elect, as shall be or shall become due and payable by Borrower to
Lenders with respect to such Letter of Credit Obligations of Borrower and, upon
the satisfaction in full of all Letter of Credit Obligations of Borrower, to any
other Obligations of Borrower then due and payable.
Neither Borrower nor any Person claiming on behalf of or through
Borrower shall have any right to withdraw any of the funds or Cash Equivalents
held in the Cash Collateral Account, except that upon the termination of all
Letter of Credit Obligations and the payment of all amounts payable by Borrower
to Lenders in respect thereof, any funds remaining in the Cash Collateral
Account shall be applied to other Obligations when due and owing and upon
payment in full of such Obligations, any remaining amount shall be paid to
Borrower or as otherwise required by law.
(d) FEES AND EXPENSES. Borrower agrees to pay to Agent for the
benefit of Revolving Lenders, as compensation to such Lenders for Letter of
Credit Obligations incurred hereunder, (x) all costs and expenses incurred by
Agent or any Lender on account of such Letter of Credit Obligations, and (y) for
each month during which any Letter of Credit Obligation shall remain
outstanding, a fee (the "LETTER OF CREDIT FEE") in an amount equal to 4.25% per
annum multiplied by the maximum amount available from time to time to be drawn
under the applicable Letter of Credit. Such fee shall be paid to Agent for the
benefit of the Revolving Lenders in arrears, on the first day of each month. In
addition, Borrower shall pay to any L/C Issuer, on demand, such fees (including
all per annum fees), charges and expenses of such L/C Issuer in respect of the
issuance, negotiation, acceptance, amendment, transfer and payment of such
Letter of Credit or otherwise payable pursuant to the application and related
documentation under which such Letter of Credit is issued.
(e) REQUEST FOR INCURRENCE OF LETTER OF CREDIT OBLIGATIONS.
Borrower shall give Agent at least two (2) Business Days prior written notice
requesting the incurrence of any Letter of Credit Obligation, specifying the
date such Letter of Credit Obligation is to be incurred, identifying the
beneficiary and the Borrower to which such Letter of Credit Obligation relates
and describing the nature of the transactions proposed to be supported thereby.
The notice shall be accompanied by the form of the Letter of Credit (which shall
be acceptable to the L/C Issuer) to be guarantied and, to the extent not
previously delivered to Agent, copies of all agreements between Borrower and the
L/C Issuer pertaining to the issuance of Letters of Credit. Notwithstanding
anything contained herein to the contrary, Letter of Credit applications by
Borrower and approvals by Agent and the L/C Issuer may be made and transmitted
pursuant to electronic codes and security measures mutually agreed upon and
established by and among Borrower, Agent and the L/C Issuer.
B-3
(f) OBLIGATION ABSOLUTE. The obligation of Borrower to
reimburse Agent and Revolving Lenders for payments made with respect to any
Letter of Credit Obligation shall be absolute, unconditional and irrevocable,
without necessity of presentment, demand, protest or other formalities, and the
obligations of each Revolving Lender to make payments to Agent with respect to
Letters of Credit shall be unconditional and irrevocable. Such obligations of
Borrower and Revolving Lenders shall be paid strictly in accordance with the
terms hereof under all circumstances including the following circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit or the Agreement or the other Loan Documents or any other agreement;
(ii) the existence of any claim, set-off, defense or other right
which Borrower or any of their respective Affiliates or any Lender may at
any time have against a beneficiary or any transferee of any Letter of
Credit (or any Persons or entities for whom any such transferee may be
acting), Agent, any Lender, or any other Person, whether in connection with
the Agreement, the Letter of Credit, the transactions contemplated herein
or therein or any unrelated transaction (including any underlying
transaction between Borrower or any of their respective Affiliates and the
beneficiary for which the Letter of Credit was procured);
(iii) any draft, demand, certificate or any other document
presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;
(iv) payment by Agent (except as otherwise expressly provided in
paragraph (g)(ii)(C) below) or any L/C Issuer under any Letter of Credit or
guaranty thereof against presentation of a demand, draft or certificate or
other document which does not comply with the terms of such Letter of
Credit or such guaranty;
(v) any other circumstance or happening whatsoever, which is
similar to any of the foregoing; or
(vi) the fact that a Default or an Event of Default shall have
occurred and be continuing.
(g) INDEMNIFICATION; NATURE OF LENDERS' DUTIES. (i) In addition
to amounts payable as elsewhere provided in the Agreement, Borrower hereby
agrees to pay and to protect, indemnify, and save harmless Agent and each Lender
from and against any and all claims, demands, liabilities, damages, losses,
costs, charges and expenses (including attorneys' fees and allocated costs of
internal counsel) which Agent or any Lender may incur or be subject to as a
consequence, direct or indirect, of (A) the issuance of any Letter of Credit or
guaranty thereof, or (B) the failure of Agent or any Lender seeking
indemnification or of any L/C Issuer to honor a demand for payment under any
B-4
Letter of Credit or guaranty thereof as a result of any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto government or
Governmental Authority, in each case other than to the extent solely as a result
of the gross negligence or willful misconduct of Agent or such Lender (as
finally determined by a court of competent jurisdiction).
(ii) As between Agent and any Lender and Borrower, Borrower
assumes all risks of the acts and omissions of, or misuse of any Letter of
Credit by beneficiaries of any Letter of Credit. In furtherance and not in
limitation of the foregoing, to the fullest extent permitted by law neither
Agent nor any Lender shall be responsible: (A) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document issued by any
party in connection with the application for and issuance of any Letter of
Credit, even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) for 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) for failure of the beneficiary of any Letter of
Credit to comply fully with conditions required in order to demand payment under
such Letter of Credit; PROVIDED that, in the case of any payment by Agent under
any Letter of Credit or guaranty thereof, Agent shall be liable to the extent
such payment was made solely as a result of its gross negligence or willful
misconduct (as finally determined by a court of competent jurisdiction) in
determining that the demand for payment under such Letter of Credit or guaranty
thereof complies on its face with any applicable requirements for a demand for
payment under such Letter of Credit or guaranty thereof; (D) for 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) for errors in interpretation of technical terms; (F) for any loss or delay
in the transmission or otherwise of any document required in order to make a
payment under any Letter of Credit or guaranty thereof or of the proceeds
thereof; (G) for the credit of the proceeds of any drawing under any Letter of
Credit or guaranty thereof; and (H) for any consequences arising from causes
beyond the control of Agent or any Lender. None of the above shall affect,
impair, or prevent the vesting of any of Agent's or any Lender's rights or
powers hereunder or under the Agreement.
(iii) Nothing contained herein shall be deemed to limit or to
expand any waivers, covenants or indemnities made by Borrower in favor of any
L/C Issuer in any letter of credit application, reimbursement agreement or
similar document, instrument or agreement between or among Borrower and such L/C
Issuer.
B-5
ANNEX C (SECTION 1.8)
TO
CREDIT AGREEMENT
CASH MANAGEMENT SYSTEMS
Borrower shall, and shall cause its Subsidiaries to, establish
and maintain the Cash Management Systems described below:
(a) On or before the Closing Date (or such later date as Agent
shall consent to in writing) and until the Termination Date, Borrower shall (i)
establish post office lock boxes ("LOCK BOXES") at one or more of the banks set
forth on DISCLOSURE SCHEDULE (3.19), and shall request in writing and otherwise
take such reasonable steps to ensure that all Account Debtors forward payment
directly to such Lock Boxes, and (ii) deposit and cause its Subsidiaries to
deposit or cause to be deposited promptly, and in any event no later than the
first Business Day after the date of receipt thereof, all cash, checks, drafts
or other similar items of payment relating to or constituting payments made in
respect of any and all Collateral ("COLLECTIONS"), including, without
limitation, payments, if any, in respect of the Lebanon IRBs (whether or not
otherwise delivered to a Lock Box) into bank accounts in Borrower's name or any
such Subsidiary's name (collectively, the "BORROWER ACCOUNTS") at banks set
forth on DISCLOSURE SCHEDULE (3.19) (each, a "RELATIONSHIP BANK"); provided that
notwithstanding the foregoing all Collections shall only be deposited into the
Lockboxes and/or the Lockbox Concentration Amount referred to in the immediately
succeeding sentence. Borrower acknowledges and agrees that as of the Closing
Date it has established the following Lock Boxes at Xxxxxx Trust and Savings
Bank: 95379, 95845 and 95396; and all such Lock Boxes are attached to Borrower
Account, account no. 000-000-0, at Xxxxxx Trust and Savings Bank (the "LOCK BOX
CONCENTRATION Amount").
(b) On or before the Closing Date (or such later date as Agent
shall consent to in writing), each Relationship Banks, shall have entered into
tri-party blocked account agreements with Agent, for the benefit of itself and
Lenders, and Borrower and its Subsidiaries, as applicable, in form and substance
acceptable to Agent, which shall become operative on or prior to the Closing
Date. Each such blocked account agreement shall provide, among other things,
that (i) all items of payment deposited in such account and proceeds thereof
deposited in the Collection Account are held by such bank as agent or
bailee-in-possession for Agent, on behalf of Lenders, (ii) the bank executing
such agreement has no rights of setoff or recoupment or any other claim against
such account, as the case may be, other than for payment of its service fees and
other charges directly related to the administration of such account and for
returned checks or other items of payment, and (iii) from and after the Closing
Date with respect to banks at which a Borrower Account is located, such bank
agrees to forward immediately all amounts in
C-1
Borrower Account to the Collection Account and to commence the process of daily
sweeps from such Borrower Account into the Collection Account. Borrower shall
not, and shall not cause or permit any Subsidiary thereof to, accumulate or
maintain cash in disbursement or payroll accounts as of any date of
determination in excess of checks outstanding against such accounts as of that
date and amounts necessary to meet minimum balance requirements.
(c) So long as no Default or Event of Default has occurred and
is continuing, Borrower may amend DISCLOSURE SCHEDULE (3.19) to add or replace a
Relationship Bank, Lock Box or Borrower Account or to replace any Disbursement
Account; PROVIDED, HOWEVER, THAT (i) Agent shall have consented in writing in
advance to the opening of such account or Lock Box with the relevant bank and
(ii) prior to the time of the opening of such account or Lock Box, the Borrower
and/or the Subsidiaries thereof, as applicable, and such bank shall have
executed and delivered to Agent a tri-party blocked account agreement, in form
and substance satisfactory to Agent. Borrower shall close any of its accounts
(and establish replacement accounts in accordance with the foregoing sentence)
promptly and in any event within thirty (30) days of notice from Agent that the
creditworthiness of any bank holding an account is no longer acceptable in
Agent's reasonable judgment, or as promptly as practicable and in any event
within sixty (60) days of notice from Agent that the operating performance,
funds transfer and/or availability procedures or performance with respect to
accounts or lockboxes of the bank holding such accounts or Agent's liability
under any tri-party blocked account agreement with such bank is no longer
acceptable in Agent's reasonable judgment.
(d) The Lock Boxes, Borrower Accounts and Disbursement
Accounts (other than any payroll account) shall be cash collateral accounts,
with all cash, checks and other similar items of payment in such accounts
securing payment of the Loans and all other Obligations, and in which Borrower
and each Subsidiary thereof shall have granted a Lien to Agent, on behalf of
itself and Lenders, pursuant to the Security Agreements.
(e) All amounts deposited in the Collection Account shall be
deemed received by Agent in accordance with SECTION 1.10 of the Agreement and
shall be applied (and allocated) by Agent in accordance with SECTION 1.11 of the
Agreement. In no event shall any amount be so applied unless and until such
amount shall have been credited in immediately available funds to the Collection
Account.
(f) Borrower may maintain, in its name, an account (each a
"DISBURSEMENT ACCOUNT" and collectively, the "DISBURSEMENT ACCOUNTS") at a bank
acceptable to Agent into which Agent shall, from time to time, deposit proceeds
of Revolving Credit Advances made to Borrower pursuant to SECTION 1.1 for use by
Borrower solely in accordance with the provisions of SECTION 1.4; provided that
Borrower shall not have a deposit in its checking, controlled disbursement or
xxxxx cash accounts of more than $10,000 in the aggregate for any two
consecutive Business Days or deposit
C-2
into any such accounts (other than the xxxxx cash account) more funds than are
necessary to clear checks and other items of payment which are presented for
payment on such Business Day.
(g) Borrower shall and shall cause its Affiliates, officers,
employees, agents, directors or other Persons acting for or in concert with
Borrower (each a "RELATED PERSON") to (i) hold in trust for Agent, for the
benefit of itself and Lenders, all checks, cash and other items of payment in
respect of amounts owing to Borrower or any of its Subsidiaries received by
Borrower or any such Related Person, and (ii) within one (1) Business Day after
receipt by Borrower or any such Related Person of any such checks, cash or other
items or payment, deposit the same into a Borrower Account of Borrower or
Subsidiary, as applicable. Borrower and each other Credit Party acknowledges and
agrees that all cash, checks or items of payment constituting proceeds of
Collateral are the property of Agent and Lenders. All proceeds of the sale or
other disposition of any Collateral, shall be deposited directly into the
applicable Borrower Accounts
C-3
ANNEX D (SECTION 2.1(a))
TO
CREDIT AGREEMENT
SCHEDULE OF ADDITIONAL CLOSING DOCUMENTS
In addition to, and not in limitation of, the conditions
described in SECTION 2.1 of the Agreement, pursuant to SECTION 2.1(a), the
following items must be received by Agent in form and substance satisfactory to
Agent on or prior to the Closing Date (each capitalized term used but not
otherwise defined herein shall have the meaning ascribed thereto in ANNEX A to
the Agreement):
A. APPENDICES. All Appendices to the Agreement, in form and
substance satisfactory to Agent.
B. REVOLVING NOTES AND TERM NOTES. Duly executed originals of
the Revolving Notes and Term Notes for each applicable Lender, dated the Closing
Date.
C. SECURITY AGREEMENTS. Copies of each of the Security
Agreements, and all instruments, documents and agreements executed pursuant
thereto.
D. INSURANCE. Satisfactory evidence that the insurance
policies required by SECTION 5.4 are in full force and effect, together with
appropriate evidence showing loss payable and/or additional insured clauses or
endorsements, as requested by Agent, in favor of Agent, on behalf of Lenders.
E. SECURITY INTERESTS AND CODE FILINGS.
(b) Evidence satisfactory to Agent that Agent (for the
benefit of itself and Lenders) has (or upon the filing of documents delivered to
Agent on or prior to the Closing Date will have) a valid and perfected first
priority security interest in the Collateral, including (i) such documents duly
executed by each Credit Party (including financing statements under the Code and
other applicable documents under the laws of any jurisdiction with respect to
the perfection of Liens) as Agent may request in order to perfect its security
interests in the Collateral and (ii) copies of Code search reports in such
jurisdictions as Agent reasonably determines listing all effective financing
statements that name any Credit Party as debtor, together with copies of such
financing statements, none of which shall cover the Collateral.
(c) Evidence satisfactory to Agent, including copies, of
all UCC-1 and other financing statements filed in favor of any Credit Party with
respect to each location, if any, at which Inventory may be consigned.
D-1
F. INTELLECTUAL PROPERTY SECURITY AGREEMENTS. Copies of the
Intellectual Property Security Agreements,together with all instruments,
documents and agreements executed pursuant thereto.
G. HOLDINGS GUARANTY. A copy of the Holdings Guaranty, and all
documents, instruments and agreements executed pursuant thereto.
H. SUBSIDIARY GUARANTY. A copy of the Subsidiary Guaranty, and
all documents, instruments and agreements executed pursuant thereto.
I. CASH MANAGEMENT SYSTEM; BLOCKED ACCOUNT AGREEMENTS.
Evidence satisfactory to Agent that, as of the Closing Date, Cash Management
Systems complying with ANNEX C to the Agreement have been established and are
currently being maintained in the manner set forth in such ANNEX C, together
with copies of duly executed tri-party blocked account and lock box agreements,
satisfactory to Agent, with the banks as required by ANNEX X.
X. CHARTER (OR EQUIVALENT DOCUMENTATION) AND GOOD STANDING.
For Credit Party, such Person's (a) charter (or equivalent organizational
documents) and all amendments thereto, (b) good standing certificates (including
verification of tax status) in its state of incorporation and (c) good standing
certificates (including verification of tax status) and certificates of
qualification to conduct business in each jurisdiction where its ownership or
lease of property or the conduct of its business requires such qualification,
each dated a recent date prior to the Closing Date and certified by the
applicable Secretary of State or other authorized Governmental Authority.
K. BYLAWS (OR EQUIVALENT DOCUMENTATION) AND RESOLUTIONS. For
each Credit Party, (a) such Person's bylaws (or other equivalent constituent
documentation), together with all amendments thereto and (b) resolutions of such
Person's Board of Directors (or equivalent governing body) and equityholders,
approving and authorizing the execution, delivery and performance of the Loan
Documents to which such Person is a party and the transactions to be consummated
in connection therewith, each certified as of the Closing Date by such Person's
secretary or an assistant secretary as being in full force and effect without
any modification or amendment.
L. INCUMBENCY CERTIFICATES. For Credit Party, signature and
incumbency certificates of the officers of each such Person executing any of the
Loan Documents, certified as of the Closing Date by such Person's secretary or
an assistant secretary as being true, accurate, correct and complete.
M. OPINIONS OF COUNSEL. Duly executed originals of opinions of
Husch & Eppenberger, counsel for the Credit Parties, together with any local
counsel opinions requested by Agent, each in form and substance satisfactory to
Agent and its counsel, dated the Closing Date, and each accompanied by a letter
addressed to such counsel from the Credit Parties, authorizing and directing
such counsel to address its
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opinion to Agent, on behalf of Lenders, and to include in such opinion an
express statement to the effect that Agent and Lenders are authorized to rely on
such opinion.
N. PLEDGE AGREEMENTS. Copies of the Pledge Agreements
accompanied by (as applicable and to the extent not already delivered to Agent)
(a) certificates representing all of the outstanding Stock being pledged
pursuant to such Pledge Agreement and stock powers (or similar transfer
instruments) for such certificates executed in blank and (b) any instruments
evidencing Indebtedness, including, without limitation in respect of the
Holdings Note and the Lebanon IRBs, being pledged pursuant to such Pledge
Agreement, duly endorsed in blank.
O. ACCOUNTANTS' LETTERS. A letter from the Credit Parties to
their independent auditors authorizing the independent certified public
accountants of the Credit Parties to communicate with Agent and Lenders in
accordance with SECTION 4.2.
P. APPOINTMENT OF AGENT FOR SERVICE. An appointment of CT
Corporation as each Credit Party's agent for service of process.
Q. Intentionally Omitted
R. OFFICER'S CERTIFICATE. Agent shall have received duly
executed originals of a certificate of the Chief Executive Officer and Chief
Financial Officer of Borrower or any other appropriate Person as determined by
Agent, dated the Closing Date, stating that, since December 31, 2000 (a) no
event or condition has occurred or is existing which could reasonably be
expected to have a Material Adverse Effect; (b) no Litigation has been commenced
which, if successful, would have a Material Adverse Effect or could challenge
any of the transactions contemplated by the Agreement and the other Loan
Documents; (d) there have been no Restricted Payments made by any Credit Party;
and (e) there has been no material increase in liabilities, liquidated or
contingent, and no material decrease in assets of Borrower or any of its
Subsidiaries.
S. WAIVERS. Agent, on behalf of Lenders, shall have received
landlord waivers and consents, bailee letters and mortgagee agreements in form
and substance satisfactory to Agent, in each case as required pursuant to
SECTION 5.9.
T. MORTGAGES. Duly executed originals of amendments to the
Mortgages in form and substance satisfactory to Agent together with: (a) title
insurance policy updates, current as-built surveys, zoning letters and
certificates of occupancy, in each case satisfactory in form and substance to
Agent, in its sole discretion, to create a valid and enforceable first priority
lien (subject to Permitted Encumbrances) on each Mortgaged Property in favor of
Agent for the benefit of itself and Lenders (or in favor of such other trustee
as my be required or desired under local law); (b) evidence that counterparts of
such amendments have been recorded in all places to the extent necessary or
desireable in the judgment of Agent; and (c) an opinion of counsel in each state
in
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which any Mortgaged Property is located in form and substance and from counsel
satisfactory to Agent;
U. AUDITED FINANCIALS; FINANCIAL CONDITION. Agent shall have
received Borrower's audited Financial Statements for the twelve month period
ended December 31, 2000 which have been certified by KMPG LLP, and the unaudited
consolidated balance sheet of Borrower dated September 30, 2001. Borrower shall
have provided Agent with its current operating statements, a consolidated
balance sheet and statement of cash flows and Projections with respect to
Borrower certified by its Chief Financial Officer, in each case in form and
substance satisfactory to Agent, and Agent shall be satisfied, in its sole
discretion, with all of the foregoing. Agent shall have further received a
certificate of the Chief Executive Officer and/or the Chief Financial Officer of
Borrower or any other appropriate Person as determined by Agent, based on such
Projections, to the effect that (a) Borrower will be Solvent upon the
consummation of the transactions contemplated herein; (b) the Projections are
based upon estimates and assumptions stated therein, all of which Borrower
believes to be reasonable and fair in light of current conditions and current
facts known to Borrower and, as of the Closing Date, reflect Borrower's good
faith and reasonable estimates of its future financial performance and of the
other information projected therein for the period set forth therein; and (c)
containing such other statements with respect to the solvency of Borrower and
matters related thereto as Agent shall request.
V. IRB DOCUMENTS; TAX SHARING AGREEMENT; WORTHINGTON
LITIGATION. True and correct copies, certified by an officer of Borrower, of (x)
all documents executed in connection with the Lebanon IRB (including, without
limitation, the IRB Indenture, the IRB Lease Agreement and the IRB Assignment
Documents and related consents to the extent required by Agent with respect
thereto), (y) the Tax Sharing Agreement and the Worthington Acquisition
Agreement and (z) all pleadings, filings, non-privileged case summaries,
memorandum and related material relating to the Worthington Litigation; provided
that the Credit Parties shall not be obligated to deliver to Agent any items
relating to the Worthington Litigation which would compromise the
attorney-client privilege between the Credit Parties and their counsel.
W. OTHER DOCUMENTS. Such other certificates, documents and
agreements respecting any Credit Party as Agent may, in its sole discretion,
request.
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ANNEX E (SECTION 4.1(a))
TO
CREDIT AGREEMENT
FINANCIAL STATEMENTS AND PROJECTIONS -- REPORTING
Borrower shall deliver or cause to be delivered to Agent or to
Agent and Lenders, as indicated, the following:
(a) MONTHLY FINANCIALS. To Agent, within thirty (30) days
after the end of each Fiscal Month, financial information regarding Borrower and
its Subsidiaries, certified by the Chief Financial Officer of Borrower,
consisting of consolidated (i) unaudited balance sheets as of the close of such
Fiscal Month and the related statements of income and cash flow for that portion
of the Fiscal Year ending as of the close of such Fiscal Month; and (ii)
unaudited statements of income and cash flows for such Fiscal Month, setting
forth in comparative form the figures for the corresponding period in the prior
year and the figures contained in the Projections for such Fiscal Year, all
prepared in accordance with GAAP (subject to normal year-end adjustments). Such
financial information shall be accompanied by the certification of the Chief
Financial Officer of Borrower that (i) such financial information presents
fairly in accordance with GAAP (subject to normal year-end adjustments) the
financial position and results of operations of Borrower and its Subsidiaries,
on a consolidated basis, in each case as at the end of such month and for the
period then ended and (ii) any other information presented is true, correct and
complete in all material respects and that there was no Default or Event of
Default in existence as of such time or, if a Default or Event of Default shall
have occurred and be continuing, describing the nature thereof and all efforts
undertaken to cure such Default or Event of Default;
(b) QUARTERLY FINANCIALS. To Agent, within forty-five (45)
days after the end of each Fiscal Quarter, consolidated financial information
regarding Borrower and its Subsidiaries, certified by the Chief Financial
Officer of Borrower, including (i) unaudited balance sheets as of the close of
such Fiscal Quarter and the related statements of income and cash flow for that
portion of the Fiscal Year ending as of the close of such Fiscal Quarter and
(ii) unaudited statements of income and cash flows for such Fiscal Quarter, in
each case setting forth in comparative form the figures for the corresponding
period in the prior year and the figures contained in the Projections for such
Fiscal Year, all prepared in accordance with GAAP (subject to normal year-end
adjustments). Such financial information shall be accompanied by (A) a statement
in reasonable detail (each, a "COMPLIANCE CERTIFICATE" showing the calculations
used in determining compliance with each of the financial covenants set forth on
ANNEX G which is tested on a quarterly basis and (B) the certification of the
Chief Financial Officer of Borrower that (i) such financial information presents
fairly in accordance with GAAP (subject to normal year-end adjustments) the
financial position, results of operations and statements of cash flows of
Borrower and its Subsidiaries, on both a consolidated basis, as at the end of
such Fiscal
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Quarter and for the period then ended, (ii) any other information presented is
true, correct and complete in all material respects and that there was no
Default or Event of Default in existence as of such time or, if a Default or
Event of Default shall have occurred and be continuing, describing the nature
thereof and all efforts undertaken to cure such Default or Event of Default. In
addition, Borrower shall deliver to Agent and Lenders, within forty-five (45)
days after the end of each Fiscal Quarter, a management discussion and analysis
which includes a comparison to budget for that Fiscal Quarter and a comparison
of performance for that Fiscal Quarter to the corresponding period in the prior
year;
(c) OPERATING PLAN. To Agent, as soon as available, but not
later than thirty (30) days after the end of each Fiscal Year, an annual
operating plan for Borrower, approved by the Board of Directors of Borrower, for
the subsequent five-year period, which will include a statement of all of the
material assumptions on which such plan is based, will include monthly balance
sheets and a monthly budget for the first year of such five-year period and will
integrate sales, gross profits, operating expenses, operating profit, cash flow
projections and Borrowing Availability projections all prepared on the same
basis and in similar detail as that on which operating results are reported (and
in the case of cash flow projections, representing management's good faith
estimates of future financial performance based on historical performance), and
including plans for personnel, Capital Expenditures and facilities;
(d) ANNUAL AUDITED FINANCIALS. To Agent, within ninety (90)
days after the end of each Fiscal Year, audited Financial Statements for
Borrower and its Subsidiaries on a consolidated basis, consisting of balance
sheets and statements of income and retained earnings and cash flows, setting
forth in comparative form in each case the figures for the previous Fiscal Year,
which Financial Statements shall be prepared in accordance with GAAP, certified
without qualification, by an independent certified public accounting firm of
national standing or otherwise acceptable to Agent. Such Financial Statements
shall be accompanied by (i) a statement prepared in reasonable detail showing
the calculations used in determining compliance with each of the financial
covenants set forth on ANNEX G, (ii) a report from such accounting firm to the
effect that, in connection with their audit examination, nothing has come to
their attention to cause them to believe that a Default or Event of Default has
occurred (or specifying those Defaults and Events of Default that they became
aware of), it being understood that such audit examination extended only to
accounting matters and that no special investigation was made with respect to
the existence of Defaults or Events of Default, (iii) a letter addressed to
Agent, on behalf of itself and Lenders, in form and substance reasonably
satisfactory to Agent and subject to standard qualifications taken by nationally
recognized accounting firms, signed by such accounting firm acknowledging that
Agent and Lenders are entitled to rely upon such accounting firm's certification
of such audited Financial Statements, (iv) the annual letters to such
accountants in connection with their audit examination detailing contingent
liabilities and material litigation matters, and (v) the certification of the
Chief Executive Officer or Chief Financial Officer of Borrower that all such
Financial Statements present fairly in accordance with GAAP the financial
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position, results of operations and statements of cash flows of Borrower and its
Subsidiaries on a consolidated basis, as at the end of such year and for the
period then ended, and that there was no Default or Event of Default in
existence as of such time or, if a Default or Event of Default shall have
occurred and be continuing, describing the nature thereof and all efforts
undertaken to cure such Default or Event of Default;
(e) MANAGEMENT LETTERS. To Agent, within five (5) Business
Days after receipt thereof by any Credit Party, copies of all management
letters, exception reports or similar letters or reports received by such Credit
Party from its independent certified public accountants;
(f) DEFAULT NOTICES. To Agent, as soon as practicable, and in
any event within five (5) Business Days after an executive officer of Borrower
has actual knowledge of the existence of any Default, Event of Default or other
event which has had a Material Adverse Effect, telephonic or telecopied notice
specifying the nature of such Default or Event of Default or other event,
including the anticipated effect thereof, which notice, if given telephonically,
shall be promptly confirmed in writing on the next Business Day;
(g) SEC FILINGS AND PRESS RELEASES. To Agent, promptly upon
their becoming available, copies of: (i) all Financial Statements, reports,
notices and proxy statements made publicly available by any Credit Party to its
security holders; (ii) all regular and periodic reports and all registration
statements and prospectuses, if any, filed by any Credit Party with any
securities exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority; and (iii) all press releases and
other statements made available by any Credit Party to the public concerning
material changes or developments in the business of any such Person;
(h) EQUITY NOTICES. To Agent, as soon as practicable, copies
of all material written notices given or received by any Credit Party with
respect to any Stock of such Person.
(i) SUPPLEMENTAL SCHEDULES. To Agent, supplemental
disclosures, if any, required by SECTION 5.6 of the Agreement;
(j) LITIGATION. To Agent (A) in writing, promptly upon
learning thereof, notice of any Litigation commenced or threatened against any
Credit Party that (i) seeks damages in excess of $100,000, (ii) seeks injunctive
relief, (iii) is asserted or instituted against any Plan, its fiduciaries or its
assets or against any Credit Party or ERISA Affiliate in connection with any
Plan, (iv) alleges criminal misconduct by any Credit Party, (v) alleges the
violation of any law regarding, or seeks remedies in connection with, any
Environmental Liabilities or (vi) involves any product recall; and (B) copies of
all pleadings, filings, non-privileged case summaries, memorandum and related
materials relating to any of the foregoing or to any Litigation commenced or
threatened against any Credit Party (including without limitation the
Worthington
E-3
Litigation, the Victory Lane Productions litigation and the Outboard Marine
Corporation bankruptcy case); provided that the Credit Parties shall not be
obligated to deliver to Agent any items relating to any Litigation which would
compromise the attorney-client privilege between the Credit Parties and their
counsel.
(k) INSURANCE NOTICES. To Agent, disclosure of losses or
casualties required by SECTION 5.4 of the Agreement;
(l) DEFAULT NOTICES. To Agent, copies of (i) (x) any and all
default notices received under or with respect to any leased location or public
warehouse where Collateral is located, and (y) such other notices or documents
as Agent may request in its reasonable discretion and (ii) any and all default
notices received under or with respect to the Lebanon IRBs, including, without
limitation, under or with respect to the IRB Indenture or the IRB Lease
Agreement;
(m) LEASE AMENDMENTS. To Agent, copies of all material
amendments to real estate leases with respect to all Real Estate;
(n) OTHER DOCUMENTS. To Agent and Lenders, such other
financial and other information respecting any Credit Party's business or
financial condition as Agent or any Lender shall, from time to time, reasonably
request;
(o) CASH FLOW BUDGET. To the Agent, not later than Wednesday
of every other calendar week, an updated Cash Flow Budget (in the form of
EXHIBIT 1.2) for the thirteen (13) week period commencing on the immediately
preceding Friday, together with a report, comparing the actual cash flow of the
Borrower for the previous two calendar weeks to the Cash Flow Budget for such
two week period, together with an explanation in reasonable detail of any
variances with Cash Flow Budget for such two week period. Each such updated Cash
Flow Budget shall be subject to the approval of the Agent and shall not be the
"Cash Flow Budget" for any purpose of this Agreement absent such approval by
Agent; PROVIDED, that Agent in its sole discretion may require, by written
notice delivered to Borrower that Borrower deliver Cash Flow Budgets on
Wednesday of every calendar week with the Cash Flow Budgets in such case
relating back to immediately preceding Friday;
(p) DAILY CASH REPORT. To the Agent, by 1 p.m. E.S.T. each
Business Day, a daily cash report of Borrower for the immediately preceding
Business Day, in a form approved by Agent;
(q) OPERATING BUDGET. To Agent, (i) at least thirty days prior
to the beginning of each Fiscal Year, the Operating Budget (in form and
substance satisfactory to Agent in its discretion) and (ii) within thirty (30)
days of the end of each Fiscal Quarter an update of the Operating Budget;
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(r) TRADE PAYABLES. To Agent, within five (5) Business Days
after the end of each Fiscal Month, an updated monthly aging report (aged from
invoice date as follows: 1-30 days, 31-60 days, 61-90 days and 91 days or more)
as of the end of each such Fiscal Month with respect to the trade payables or
other amounts payable by the Credit Parties to each vendor which in the
aggregate for any vendor exceeds $5,000, and a summary of the payment terms
applicable to each payable for each such vendor, together with copies of all
documentation evidencing such trade terms, including copies of any
correspondence with such vendors and promissory notes evidencing such payables;
and
(s) To Agent, annually, evidence that Borrower has paid in
full the annual fee necessary to retain CT Corporation as each Credit Party's
agent for service of process.
E-5
ANNEX F (SECTION 4.1(b))
TO
CREDIT AGREEMENT
COLLATERAL REPORTS
Borrower shall deliver or cause to be delivered the following:
To Agent, upon its request, and in no event less frequently
than five (5) Business Days after the end of each Fiscal Month (together with a
copy of all or any part of such delivery requested by any Lender in writing
after the Closing Date), each of the following:
(a) Revolving Borrowing Base Certificate accompanied by such
supporting detail and documentation as shall be requested by Agent in its
reasonable discretion:
(i) a summary of Inventory by location and type with a
supporting perpetual Inventory report, in each case accompanied by such
supporting detail and documentation as shall be requested by Agent in
its reasonable discretion; and
(ii) a monthly trial balance showing Accounts outstanding
aged from invoice due date as follows: 1 to 30 days, 31 to 60 days, 61
to 90 days and 91 days or more, accompanied by such supporting detail
and documentation as shall be requested by Agent in its reasonable
discretion;
(b) To Agent, on a weekly basis or at such more frequent
intervals as Agent may request from time to time (together with a copy of all or
any part of such delivery requested by any Lender in writing after the Closing
Date), collateral reports with respect to Borrower, including all additions and
reductions (cash and non-cash) with respect to Accounts of Borrower, in each
case accompanied by such supporting detail and documentation as shall be
requested by Agent in its reasonable discretion;
(c) To Agent, at the time of delivery of each of the monthly
Financial Statements delivered pursuant to ANNEX E, a reconciliation of the
Accounts trial balance and month-end Inventory reports of Borrower to Borrower's
general ledger and monthly Financial Statements delivered pursuant to such ANNEX
E, in each case accompanied by such supporting detail and documentation as shall
be requested by Agent in its reasonable discretion;
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(d) To Agent, at the time of delivery of each of the annual
Financial Statements delivered pursuant to ANNEX E, (i) a listing of government
contracts of Borrower subject to the Federal Assignment of Claims Act of 1940;
and (ii) a list of any applications for the registration of any Patent,
Trademark or Copyright with the United States Patent and Trademark Office, the
United States Copyright Office or any similar office or agency which any Credit
Party thereof has filed in the prior Fiscal Quarter;
(e) Borrower, at its own expense, shall deliver to Agent the
results of each physical verification, if any, which Borrower or any of its
Subsidiaries may in their discretion have made, or caused any other Person to
have made on their behalf, of all or any portion of their Inventory (and, if a
Default or an Event of Default shall have occurred and be continuing, Borrower
shall, upon the request of Agent, conduct, and deliver the results of, such
physical verifications as Agent may require);
(f) Borrower, at its own expense, shall deliver to Agent such
appraisals of Equipment and Real Estate as Agent may request from time to time
(provided that so long as no Default or Event of Default has occurred and is
continuing, such appraisals shall be required no more frequently than once every
two (2) years) and such appraisals shall be prepared by an appraiser
satisfactory to Agent, and which shall otherwise be in form and substance
satisfactory to Agent (it being understood that any such appraisal in respect of
Real Estate shall be an MAI appraisal); and
(g) Such other reports, statements and reconciliations with
respect to the Collateral of any or all Credit Parties as Agent shall from time
to time request in its reasonable discretion.
F-2
ANNEX G (SECTION 6.10)
TO
CREDIT AGREEMENT
FINANCIAL COVENANTS
Borrower shall not breach or fail to comply with any of the
following financial covenants, each of which shall be calculated in accordance
with GAAP consistently applied:
(a) MAXIMUM CAPITAL EXPENDITURES. Holdings and its
Subsidiaries on a consolidated basis shall not make Capital Expenditures during
the following periods that exceed in the aggregate the amounts set forth
opposite each of such periods:
PERIOD MAXIMUM CAPITAL EXPENDITURES PER PERIOD
Fiscal Year 2002 $1,200,000
Fiscal Year 2003 $1,200,000
Fiscal Year 2004 $1,200,000
Fiscal Year 2005 $1,200,000
Fiscal Year 2006 $1,200,000
(b) MINIMUM FIXED CHARGE COVERAGE RATIO. Holdings and its
Subsidiaries on a consolidated basis, shall have at the end of each Fiscal
Quarter set forth below, a Fixed Charge Coverage Ratio for the 12-month period
then ended (or with respect to the Fiscal Quarters ending on or before and
December 31, 2002, respectively, the period commencing on January 1, 2002, and
ending on the last day of such Fiscal Quarter) of not less than the following:
PERIOD ENDED RATIO
3/31/02 0.32 to 1.00
6/30/02 0.61 to 1.00
9/30/02 0.75 to 1.00
12/31/02 0.89 to 1.00
3/31/03 1.00 to 1.00
6/30/03 1.00 to 1.00
9/30/03 1.05 to 1.00
12/31/03 1.10 to 1.00
3/31/04 1.10 to 1.00
6/30/04 1.10 to 1.00
9/30/04 1.05 to 1.00
12/31/05 1.05 to 1.00
3/31/05 1.00 to 1.00
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PERIOD ENDED RATIO
6/30/05 1.00 to 1.00
9/30/05 1.00 to 1.00
12/31/05 1.00 to 1.00
3/31/06 1.00 to 1.00
6/30/06 1.00 to 1.00
(c) MAXIMUM LEVERAGE RATIO. Holdings and its Subsidiaries on a
consolidated basis shall have, at the end of each Fiscal Quarter set forth
below, a Leverage Ratio as of the last day of such Fiscal Quarter and for the
12-month period then ended of not less than the following:
PERIOD ENDED MAXIMUM LEVERAGE RATIO
3/31/03 4.8 to 1.00
6/30/03 4.6 to 1.00
9/30/03 4.6 to 1.00
12/31/03 4.5 to 1.00
3/31/04 4.1 to 1.00
6/30/04 3.8 to 1.00
9/30/04 3.3 to 1.00
12/31/04 3.0 to 1.00
3/31/05 2.4 to 1.00
6/30/05 2.4 to 1.00
9/30/05 2.4 to 1.00
12/31/05 2.4 to 1.00
3/31/06 1.8 to 1.00
6/30/06 1.8 to 1.00
9/30/06 1.8 to 1.00
12/31/06 1.8 to 1.00
(d) MINIMUM EBITDA. Holdings and its Subsidiaries on a
consolidated basis shall have, at the end of each Fiscal Quarter set forth
below, EBITDA for the 12-month period then ended (or with respect to each Fiscal
Month ending on or before December 31, 2002, the period commencing on January 1,
2002 and ending on the last day of such Fiscal Month) of not less than the
following:
PERIOD ENDED EBITDA
1/31/02 $ 80,000
2/28/02 $152,000
3/31/02 $430,000
4/30/02 $687,000
5/31/02 $981,000
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PERIOD ENDED EBITDA
6/30/02 $1,537,000
7/31/02 $1,984,000
8/31/02 $2,290,000
9/30/02 $3,171,000
10/31/02 $3,752,000
11/30/02 $4,346,000
12/31/02 $5,320,000
3/31/03 $6,245,000
6/30/03 $6,367,000
9/30/03 $6,343,000
12/31/03 $5,927,000
3/31/04 $6,472,000
6/30/04 $7,293,000
9/30/04 $7,975,000
12/31/04 $8,535,000
3/31/05 $8,939,000
6/30/05 $8,993,000
9/30/05 $9,044,000
12/31/05 $8,833,000
3/31/06 $8,924,000
6/30/06 $9,000,000
9/30/06 $9,090,000
12/31/06 $9,196,000
(e) VENDOR TRADE SUPPORT. Borrower shall not permit its
aggregate Vendor Trade Support for all vendors as in effect on the Closing Date
as set forth on DISCLOSURE SCHEDULE (3.21(b)) to be reduced by more than (i)
$250,000 at any time prior to December 31, 2002 or (ii) $350,000 at any time
thereafter. For purposes hereof "Vendor Trade Support" as of any date shall mean
with respect to any vendor the amount of liquidity per annum provided to
Borrower as of such date by such vendor calculated on the basis of the average
annual purchases of Borrower from such vendor as of such date and the trade
terms provided by such vendor to Borrower (i.e., the number of days from invoice
date that payment is due to such vendor) as of such date, calculated on the
basis of a 360-day year consisting of twelve 30-day months. By way of example, a
vendor with average annual purchases of $1,200,000 which provides to the
Borrower 90 day trade terms is providing $300,000 of Vendor Trade Support
(90/360 x $1,200,000).
(f) EXPENSES AND EXPENDITURES. The expenses and expenditures
of Borrower on a weekly basis shall not exceed (i) five percent (5%) on an
aggregate basis, and (ii) ten percent (10%) on a line item basis, of the
expenses and expenditures set forth in the Cash Flow Budget for such week.
G-3
(g) MINIMUM EXCESS BORROWING AVAILABILITY. Borrower shall have
at all times Excess Borrowing Availability of not less than $1,000,000, or such
lesser amount as may be established in writing by Agent from time to time.
(h) CASH CONVERSION CYCLE. Borrower and its Subsidiaries on a
consolidated basis shall have, at the end of each Fiscal Quarter set forth
below, Cash Conversion Cycle Days as of the last day of such Fiscal Quarter and
for the 3 month period then ended (or with respect to the Fiscal Months ending
on or before December 31, 2002, respectively, the period commencing on January
1, 2002 and ending on the last day of such Fiscal Month) of not more than the
following:
PERIOD ENDED CASH CONVERSION CYCLE DAYS
4/30/02 41
5/31/02 41
6/30/02 43
7/31/02 41
8/31/02 43
9/31/02 43
10/30/02 42
11/30/02 44
12/31/02 47
3/31/03 39
6/30/03 40
9/30/03 38
12/31/03 39
3/31/04 36
6/30/04 37
9/30/04 37
12/31/04 38
3/30/05 35
6/30/05 36
9/30/05 36
12/31/05 37
3/30/06 34
6/30/06 35
9/30/06 35
12/31/06 36
Unless otherwise specifically provided herein, any accounting
term used in the Agreement shall have the meaning customarily given such term in
accordance with GAAP, and all financial computations hereunder shall be computed
in accordance with GAAP consistently applied. That certain items or computations
are explicitly modified by the phrase "in accordance with GAAP" shall in no way
be construed to limit the
G-4
foregoing. If any "Accounting Changes" (as defined below) occur and such changes
result in a change in the calculation of the financial covenants, standards or
terms used in the Agreement or any other Loan Document, then Borrower, Agent and
Lenders agree to enter into negotiations in order to amend such provisions of
the Agreement so as to equitably reflect such Accounting Changes with the
desired result that the criteria for evaluating Borrower's and its Subsidiaries'
financial condition shall be the same after such Accounting Changes as if such
Accounting Changes had not been made; provided, however, that the agreement of
Requisite Lenders to any required amendments of such provisions shall be
sufficient to bind all Lenders. "ACCOUNTING CHANGES" means (a) changes in
accounting principles required by the promulgation of any rule, regulation,
pronouncement or opinion by the Financial Accounting Standards Board of the
American Institute of Certified Public Accountants (or successor thereto or any
agency with similar functions), (b) changes in accounting principles concurred
in by Borrower's certified public accountants; (c) purchase accounting
adjustments under A.P.B. 16 and/or 17 and EITF 88-16, and the application of the
accounting principles set forth in FASB 109, including the establishment of
reserves pursuant thereto and any subsequent reversal (in whole or in part) of
such reserves; and (d) the reversal of any reserves established as a result of
purchase accounting adjustments. All such adjustments resulting from
expenditures made subsequent to the Closing Date (including capitalization of
costs and expenses or payment of pre-Closing Date liabilities) shall be treated
as expenses in the period the expenditures are made and deducted as part of the
calculation of EBITDA in such period. If Agent, Borrower and Requisite Lenders
agree upon the required amendments, then after appropriate amendments have been
executed and the underlying Accounting Change with respect thereto has been
implemented, any reference to GAAP contained in the Agreement or in any other
Loan Document shall, only to the extent of such Accounting Change, refer to
GAAP, consistently applied after giving effect to the implementation of such
Accounting Change. If Agent, Borrower and Requisite Lenders cannot agree upon
the required amendments within thirty (30) days following the date of
implementation of any Accounting Change, then all Financial Statements delivered
and all calculations of financial covenants and other standards and terms in
accordance with the Agreement and the other Loan Documents shall be prepared,
delivered and made without regard to the underlying Accounting Change.
G-5
ANNEX H (SECTION 9.9(a))
TO
CREDIT AGREEMENT
WIRE TRANSFER INFORMATION
AGENT'S AND GE CAPITAL'S ACCOUNT:
Bank Name: Bankers Trust Company
Location: New York, New York
ABA Routing No.: 000000000
Credit Account No.: 00-000-000
Account Name: Xxxxxx
X-0
ANNEX I (SECTION 11.10)
to
CREDIT AGREEMENT
NOTICE ADDRESSES
(A) If to Agent or GE Capital, at
General Electric Capital Corporation
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Customs Account Manager
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
with copies to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
AND
Xxxxxx Financial, Inc.,
a GE Capital Company
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Counsel - Xxxxxx Custom Plastics
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
(B) If to Borrower, to Borrower, at
Morton Custom Plastics, LLC
0000 Xxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
I-1
with copies to:
Husch & Eppenberger
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxx, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
I-2
ANNEX J (FROM ANNEX A - COMMITMENTS DEFINITION)
to
CREDIT AGREEMENT
LENDER(S)
Revolving Loan Commitment General Electric Capital Corporation
$10,000,000
Term Loan A Commitment: General Electric Capital Corporation
$10,000,000
Term Loan B Commitment: General Electric Capital Corporation
$7,000,000
Term Loan C Commitment: General Electric Capital Corporation
$5,000,000
J-1
EXHIBIT 1.1(a)(i)
TO
CREDIT AGREEMENT
NOTICE OF REVOLVING CREDIT ADVANCE
Reference is made to that certain Credit Agreement dated as of
March 25, 2002 among Xxxxxx Custom Plastics, LLC ("Borrower"), the other Persons
named therein as Credit Parties, General Electric Capital Corporation, as Agent
for Lenders ("Agent"), and the Lenders from time to time signatory thereto
("Lenders") (including all annexes, exhibits and schedules thereto, and as from
time to time amended, restated, supplemented or otherwise modified, the "Credit
Agreement"). Capitalized terms used herein without definition are so used as
defined in the Credit Agreement.
[Borrower hereby gives irrevocable notice, pursuant to SECTION
1.1(a)(i) of the Credit Agreement, of its request for a Revolving Credit Advance
to be made on [DATE] in the aggregate amount of $[________] as [an Index Rate
Loan] [a LIBOR Loan having a LIBOR Period of [_____] month(s).]
Borrower hereby (i) represents and warrants that all of the
conditions contained in SECTION 2.1 and SECTION 2.2 of the Credit Agreement have
been satisfied on and as of the date hereof, and will continue to be satisfied
on and as of the date of the Advance(s) requested hereby, before and after
giving effect thereto and to the application of the proceeds therefrom; and (ii)
reaffirms the granting and continuance of Agent's Liens, on behalf of itself and
Lenders, pursuant to the Collateral Documents.
IN WITNESS WHEREOF, Borrower has caused this Notice of
Revolving Credit Advance to be executed and delivered by its duly authorized
officer as of the date first set forth above.
XXXXXX CUSTOM PLASTICS, LLC
By: Xxxxxx Holdings, LLC, its
Manager
By: Xxxxxx Industrial Group,
Inc., its Manager
By:
---------------------
Name:
Title
J-1
EXHIBIT 1.5(e)
TO
CREDIT AGREEMENT
FORM OF NOTICE OF CONVERSION/CONTINUATION
Reference is made to that certain Amended and Restated Credit
Agreement dated as of March 25, 2002 by and among the undersigned ("MCP"), the
other Persons named therein as Credit Parties, General Electric Capital
Corporation, as Agent for Lenders ("AGENT"), and the Lenders from time to time
signatory thereto (including all annexes, exhibits or schedules thereto, and as
from time to time amended, restated, supplemented or otherwise modified, the
"CREDIT AGREEMENT"). Capitalized terms used herein without definition are so
used as defined in the Credit Agreement.
MCP hereby gives irrevocable notice, pursuant to SECTION
1.5(e) of the Credit Agreement, of its request to:
(a) on [ date ] convert $[________]of the aggregate
outstanding principal amount of the [_______] Loan, bearing interest at the
[________] Rate, into a(n) [________] Loan [and, in the case of a LIBOR Loan,
having a LIBOR Period of [_____] month(s)];
[(b) on [ date ] continue $[________]of the aggregate
outstanding principal amount of the [_______] Loan, bearing interest at the
LIBOR Rate, as a LIBOR Loan having a LIBOR Period of [_____] month(s)].
MCP certifies that the conversion and/or continuation of the
Loans requested above is for the separate account(s) of the MCP in the following
[respective] amount[s]: [Name: $_____________] and [Name: $_______________].
MCP hereby represents and warrants that all of the conditions
contained in SECTION 2.2 of the Credit Agreement have been satisfied on and as
of the date hereof, and will continue to be satisfied on and as of the date of
the conversion/continuation requested hereby, before and after giving effect
thereto; and (ii) reaffirms the guaranty and continuance of Agent's Liens, on
behalf of itself and Lenders, pursuant to the Collateral Documents.
Exh. 1.5 (e)-1
IN WITNESS WHEREOF, MCP has caused this Notice of
Conversion/Continuation to be executed and delivered by its duly authorized
officer as of the date first set forth above.
XXXXXX CUSTOM PLASTICS, LLC
By: Xxxxxx Holdings, LLC, its Manager
By: Xxxxxx Industrial Group, Inc., its
Manager
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
:
Exh. 1.5 (e)-2
EXHIBIT 4.1 (b)(i)
TO
CREDIT AGREEMENT
FORM OF BORROWING BASE CERTIFICATE
REVOLVING BORROWING BASE CERTIFICATE
PURSUANT TO THE AMENDED AND RESTATED CREDIT AGREEMENT DATED AS
OF MARCH 25, 2002, AMONG THE UNDERSIGNED, THE PERSONS DESIGNATED THEREIN AS
CREDIT PARTIES, THE OTHER PERSONS DESIGNATED THEREIN AS LENDERS AND GENERAL
ELECTRIC CAPITAL CORPORATION , AS AGENT (THE "CREDIT AGREEMENT"), THE
UNDERSIGNED CERTIFIES THAT AS OF THE CLOSE OF BUSINESS ON THE DATE SET FORTH
BELOW, THE BORROWING BASE IS COMPUTED AS SET FORTH BELOW.
THE UNDERSIGNED REPRESENTS AND WARRANTS THAT THIS REVOLVING
BORROWING BASE CERTIFICATE, DATED AS OF [_______, 200__], IS A TRUE AND CORRECT
STATEMENT OF, AND THAT THE INFORMATION CONTAINED HEREIN IS TRUE AND CORRECT IN
ALL MATERIAL RESPECTS REGARDING, THE STATUS OF ELIGIBLE ACCOUNTS, AND ELIGIBLE
INVENTORY AND THAT THE AMOUNTS REFLECTED HEREIN ARE IN COMPLIANCE WITH THE
PROVISIONS OF THE CREDIT AGREEMENT AND THE APPENDICES THERETO. THE UNDERSIGNED
FURTHER REPRESENTS AND WARRANTS THAT THERE IS NO DEFAULT OR EVENT OF DEFAULT AND
ALL REPRESENTATIONS AND WARRANTIES CONTAINED IN THE CREDIT AGREEMENT AND OTHER
LOAN DOCUMENTS ARE TRUE AND CORRECT. THE UNDERSIGNED UNDERSTANDS THAT GENERAL
ELECTRIC CAPITAL CORPORATION, AS AGENT FOR THE LENDERS, WILL EXTEND LOANS IN
RELIANCE UPON THE INFORMATION CONTAINED HEREIN. IN THE EVENT OF A CONFLICT
BETWEEN THE FOLLOWING SUMMARY OF ELIGIBILITY CRITERIA AND Sections 1.6 AND 1.7
OF THE CREDIT AGREEMENT, THE CREDIT AGREEMENT SHALL GOVERN. CAPITALIZED TERMS
USED HEREIN AND NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANINGS SPECIFIED
IN THE CREDIT AGREEMENT.
See attached calculation.
XXXXXX CUSTOM PLASTICS, LLC
By: Xxxxxx Holdings, LLC,
its Manager
By: Xxxxxx Industrial Group, Inc.,
its Manager
By:
---------------------------------
Name:
Title:
Exh. 4.1 (b)(i)-1
EXHIBIT 9.1(a)
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Agreement") is made as of
___________ __, 200__ by and between __________________________________
("Assignor Lender") and ________________________ ("Assignee Lender") and
acknowledged and consented to by GENERAL ELECTRIC CAPITAL CORPORATION, as agent
("Agent")[, and XXXXXX CUSTOM PLASTICS, LLC, a Delaware limited liability
company ("Borrower").(1) All capitalized terms used in this Agreement and not
otherwise defined herein will have the respective meanings set forth in the
Credit Agreement (as hereinafter defined.)
RECITALS:
WHEREAS, Xxxxxx Custom Plastics, LLC ("Borrower"), Xxxxxx
Holdings LLC ("Holdings"), the other Persons signatory thereto as Credit
Parties, Agent, Assignor Lender and other Persons signatory thereto as Lenders
have entered into that certain Amended and Restated Credit Agreement dated as of
March 25, 2002 (as the same may be amended, restated, supplemented or otherwise
modified from time to time, the "Credit Agreement") pursuant to which Assignor
Lender has agreed to make certain Loans to, and incur certain Letter of Credit
Obligations for, Borrower;
WHEREAS, Assignor Lender desires to assign to Assignee Lender,
and Assignee Lender desires to purchase and assume, [all/a portion] of its
interest in the Loans (as described below), the Letter of Credit Obligations and
the Collateral and to delegate to Assignee Lender [all/a portion] of its
Commitments and other duties with respect to such Loans, Letter of Credit
Obligations and Collateral;
WHEREAS, Assignee Lender desires to become a Lender under the
Credit Agreement and to accept such assignment and delegation from Assignor
Lender; and
WHEREAS, Assignee Lender desires to appoint Agent to serve as
agent for Assignee Lender under the Credit Agreement.
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions, and covenants herein contained, Assignor Lender and
Assignee Lender agree as follows:
1. ASSIGNMENT AND ACCEPTANCE
1.1. ASSIGNMENT. Assignor Lender hereby irrevocably transfers and assigns
to Assignee Lender, without recourse and without representations or warranties
of any kind (except as set forth in SECTION 3.2), an interest (the "ASSIGNED
INTEREST") as set forth on Schedule 1.1 in and to Assignor Lender's rights and
Obligations with respect to [THE REVOLVING LOANS INCLUDING THE REVOLVING LETTER
OF CREDIT OBLIGATIONS], [TERM LOAN A] [TERM LOAN B] [TERM LOAN C], Loan
Documents and Collateral or any portion thereof or interest therein, including
any Lender's rights, title, interests, remedies, powers or duties thereunder,
whether evidenced by a writing or not. After giving effect to such assignment
Assignee Lender shall have, as of the Effective Date (as hereinafter defined)
the Commitments and Pro Rata Shares arising from such assignment as are set
forth on Schedule 1.1.
----------
(1) Insert so long as no Default or Event of Default has occurred and is
continuing on the Effective Date.
Exh. 9.1(a)-1
1.2. ACCEPTANCE BY ASSIGNEE LENDER. By its execution of this Agreement,
Assignee Lender irrevocably purchases, assumes and accepts such assignment and
transfer of the Assigned Interest and agrees to be a Lender with respect to the
Assigned Interest under the Loan Documents and to be bound by the terms and
conditions thereof. By its execution of this Agreement, Assignor Lender agrees,
to the extent provided herein, to relinquish its rights and be released from its
obligations and duties under the Credit Agreement.
1.3. EFFECTIVE DATE. Such assignment and transfer by Assignor Lender and
acceptance by Assignee Lender will be effective and Assignee Lender (if not
already a Lender) will become a Lender under the Loan Documents as of the date
of this Agreement ("EFFECTIVE DATE") and upon payment of the Assigned Amount and
the Assignment Fee (as each term is defined below). Interest and Fees accrued
prior to the Effective Date are for the account of Assignor Lender. From and
after the Effective Date, the Agent shall make to the Assignee all payments in
respect of the Assigned Interest (including payments of principal, interest,
fees and other amounts) which accrue subsequent to the Effective Date.
2. INITIAL PAYMENT AND DELIVERY OF NOTES
2.1. PAYMENT OF THE ASSIGNED AMOUNT. Assignee Lender will pay to Assignor
Lender, in immediately available funds, not later than 12:00 noon (New York
time) on the Effective Date, an amount equal to its Pro Rata Share as set forth
on Schedule 1.1 of the then outstanding principal amount of the Loans (the
"ASSIGNED AMOUNT").
2.2. PAYMENT OF ASSIGNMENT FEE. [ASSIGNOR LENDER AND/OR ASSIGNEE LENDER]
will pay to Agent, for its own account in immediately available funds, not later
than 12:00 noon (New York time) on the Effective Date, the assignment fee in the
amount of $3,500 (the "ASSIGNMENT FEE") as required pursuant to Section 9.1(a)
of the Credit Agreement.
2.3. EXECUTION AND DELIVERY OF NOTES. Following payment of the Assigned
Amount and the Assignment Fee, [EACH OF] Assignor Lender [AND ASSIGNEE LENDER]
will deliver to Agent the Notes previously delivered to it for redelivery to
Borrower and Agent will request that Borrower deliver to [ASSIGNOR LENDER AND]
Assignee Lender, newly executed Notes evidencing Assignee Lender's [AND ASSIGNOR
LENDER'S RESPECTIVE] Pro Rata Share[s] in the Loans after giving effect to the
assignment described in SECTION 1. Each new Note will be issued in the aggregate
maximum principal amount of the applicable Commitment of such Lender.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS
3.1. ASSIGNEE LENDER'S REPRESENTATIONS, WARRANTIES AND COVENANTS. Assignee
Lender hereby represents, warrants, and covenants the following to Assignor
Lender and Agent:
(a) This Agreement is a legal, valid, and binding agreement of
Assignee Lender, enforceable according to its terms;
(b) The execution and performance by Assignee Lender of its duties and
obligations under this Agreement and the Loan Documents will not require
any registration with, notice to, or consent or approval by any
Governmental Authority;
(c) Assignee Lender is familiar with transactions of the kind and
scope reflected in the Loan Documents and in this Agreement;
(d) Assignee Lender has made its own independent investigation and
appraisal of the financial condition and affairs of each Credit Party, has
conducted its own evaluation of the Loans and Letter of Credit Obligations,
the Loan Documents and each Credit Party's creditworthiness, has made its
decision to become a Lender to Borrower under the Credit Agreement
independently and without reliance upon Assignor Lender or Agent, and will
continue to do so;
(e) Assignee Lender is entering into this Agreement in the ordinary
course of its business, and is acquiring its interest in the Loans and
Letter of Credit Obligations for its own account and not with a view to or
for sale in connection with any subsequent distribution; provided, however,
that at all times the distribution of Assignee Lender's property shall,
subject to the terms of the Credit Agreement, be and remain within its
control;
(f) No future assignment or participation granted by Assignee Lender
pursuant to Section 9.1 of the Credit Agreement will require Assignor
Lender, Agent, or Borrower to file any registration statement with the
Securities and Exchange Commission or to apply to qualify under the blue
sky laws of any state;
(g) Assignee Lender has no loans to, written or oral agreements with,
or equity or other ownership interest in any Credit Party;
(h) Assignee Lender will not enter into any written or oral agreement
with, or acquire any equity or other ownership interest in, any Credit
Party without the prior written consent of Agent; and
(i) As of the Effective Date, Assignee Lender is entitled to receive
payments of principal and interest in respect of the Obligations without
deduction for or on account of any taxes imposed by the United States of
America or any political subdivision thereof.
3.2. ASSIGNOR LENDER'S REPRESENTATIONS, WARRANTIES AND COVENANTS. Assignor
Lender hereby represents, warrants and covenants the following to Assignee
Lender:
(a) Assignor Lender is the legal and beneficial owner of the Assigned
Amount;
(b) This Agreement is a legal, valid and binding agreement of Assignor
Lender, enforceable according to its terms;
(c) The execution and performance by Assignor Lender of its duties and
obligations under this Agreement and the Loan Documents will not require
any registration with, notice to or consent or approval by any Governmental
Authority;
(d) Assignor Lender has full power and authority, and has taken all
action necessary to execute and deliver this Agreement and to fulfill the
obligations hereunder and to consummate the transactions contemplated
hereby;
(e) Assignor Lender is the legal and beneficial owner of the interests
being assigned hereby, free and clear of any adverse claim, lien,
encumbrance, security interest, restriction on transfer, purchase option,
call or similar right of a third party; and
(f) This Assignment by Assignor Lender to Assignee Lender complies, in
all material respects, with the terms of the Loan Documents.
4. LIMITATIONS OF LIABILITY
Neither Assignor Lender (except as provided in Section 3.2) nor Agent
makes any representations or warranties of any kind, nor assumes any
responsibility or liability whatsoever, with regard to (a) the Loan Documents or
any other document or instrument furnished pursuant thereto or the Loans, Letter
of Credit Obligations or other Obligations, (b) the creation, validity,
genuineness, enforceability, sufficiency, value or collectibility of any of
them, (c) the amount, value or existence of the Collateral, (d) the perfection
or priority of any Lien upon the Collateral, or (e) the financial condition of
any Credit Party or other obligor or the performance or observance by any Credit
Party of its obligations under any of the Loan Documents. Neither Assignor
Lender nor Agent has or will have any duty, either initially or on a continuing
basis, to make any investigation, evaluation, appraisal of, or any
responsibility or liability with respect to the accuracy or completeness of, any
information provided to Assignee Lender which has been provided to Assignor
Lender or Agent by any Credit Party. Nothing in this Agreement or in the Loan
Documents shall impose upon the Assignor Lender or Agent any fiduciary
relationship in respect of the Assignee Lender.
5. FAILURE TO ENFORCE
No failure or delay on the part of Agent or Assignor Lender in the
exercise of any power, right, or privilege hereunder or under any Loan Document
will impair such power, right, or privilege or be construed to be a waiver of
any default or acquiescence therein. No single or partial exercise of any such
power, right, or privilege will preclude further exercise thereof or of any
other right, power, or privilege. All rights and remedies existing under this
Agreement are cumulative with, and not exclusive of, any rights or remedies
otherwise available.
6. NOTICES
Unless otherwise specifically provided herein, any notice or other
communication required or permitted to be given will be in writing and addressed
to the respective party as set forth below its signature hereunder, or to such
other address as the party may designate in writing to the other.
7. AMENDMENTS AND WAIVERS
No amendment, modification, termination, or waiver of any provision of
this Agreement will be effective without the written concurrence of Assignor
Lender, Agent and Assignee Lender.
8. SEVERABILITY
Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law. In
the event any provision of this Agreement is or is held to be invalid, illegal,
or unenforceable under applicable law, such provision will be ineffective only
to the extent of such invalidity, illegality, or unenforceability, without
invalidating the remainder of such provision or the remaining provisions of the
Agreement. In addition, in the event any provision of or obligation under this
Agreement is or is held to be invalid, illegal, or unenforceable in any
jurisdiction, the validity, legality, and enforceability of the remaining
provisions or obligations in any other jurisdictions will not in any way be
affected or impaired thereby.
9. SECTION TITLES
Section and Subsection titles in this Agreement are included for
convenience of reference only, do not constitute a part of this Agreement for
any other purpose, and have no substantive effect.
10. SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
11. APPLICABLE LAW
THIS AGREEMENT WILL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN
THAT STATE.
12. COUNTERPARTS
This Agreement and any amendments, waivers, consents, or supplements
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which, when so executed and delivered, will be
deemed an original and all of which shall together constitute one and the same
instrument.
[signature page follows]
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
ASSIGNEE LENDER: ASSIGNOR LENDER:
---------------------------------- --------------------------------------
By: By:
------------------------------- -----------------------------------
Title: Title:
---------------------------- --------------------------------
Notice Address: Notice Address:
---------------------------------- --------------------------------------
---------------------------------- --------------------------------------
---------------------------------- --------------------------------------
ACKNOWLEDGED AND CONSENTED TO:
GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent
By:
-------------------------------
Its Duly Authorized Signatory
[XXXXXX CUSTOM PLASTICS, LLC
By: Xxxxxx Holdings, LLC
its Manager
By: Xxxxxx Industrial Group, Inc.,
its Manager
By:--------------------------------
Name:
Title:](2)
----------
(2) Insert so long as no Default of Event of Default has occurred and is
continuing on the Effective Date.
SCHEDULE 1.1
ASSIGNED COMMITMENTS AND LOANS
ASSIGNOR LENDER'S
ASSIGNED INTEREST LOANS AFTER ASSIGNMENT
-----------------------------------------------------------------------------------
AGGREGATE FOR PRO RATA PRO RATA
ALL LENDERS COMMITMENT SHARE COMMITMENT SHARE
-----------------------------------------------------------------------------------
Revolving Loan Commitment $ 10,000,000 $ % $ %
Term Loan Commitment A $ 10,000,000
Term Loan B Commitment $ 7,000,000
Term Loan C Commitment $ 5,000,000
-------------- -------------- --------------
Aggregate Commitments $ 32,000,000 $ $
Sch. 1.1-1
================================================================================
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of March 25, 2002
among
XXXXXX CUSTOM PLASTICS, LLC,
as Borrower
XXXXXX HOLDINGS, LLC
AND THE OTHER CREDIT PARTIES SIGNATORY HERETO,
as Credit Parties,
THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME,
as Lenders,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and Lender
================================================================================
INDEX OF APPENDICES
Exhibit 1.1(a)(i) - Form of Notice of Revolving Credit Advance
Exhibit 1.1(a)(ii) - Form of Revolving Note
Exhibit 1.1(b) - Form of Term Loan A Note
Exhibit 1.1(c) - Form of Term Loan B Note
Exhibit 1.1(d) - Form of Term Loan C Note
Exhibit 1.2 - Form of Cash Flow Budget
Exhibit 1.3 - Form of Operating Budget
Exhibit 1.5(e) - Form of Notice of Conversion/Continuation
Exhibit 2.1(c)(i) - Borrower Warrant
Exhibit 2.1(c)(ii) - Borrower Warrant Agreement
Exhibit 4.1(b)(i) - Form of Revolving Borrowing Base Certificate
Exhibit 9.1(a) - Form of Assignment Agreement
Schedule 1.1 - Responsible Individual
Schedule 1.4 - Sources and Uses; Funds Flow Memorandum
Schedule 3.2 - Executive Offices; FEIN
Schedule 3.4(A) - Financial Statements
Schedule 3.4(B) - Projections
Schedule 3.5 - Material Events
Schedule 3.6 - Real Estate and Leases
Schedule 3.7 - Labor Matters
Schedule 3.8 - Ventures, Subsidiaries and Affiliates; Outstanding Stock
Schedule 3.11 - Tax Matters
Schedule 3.12 - ERISA Plans
Schedule 3.13 - Litigation
Schedule 3.15 - Intellectual Property
Schedule 3.17 - Hazardous Materials
Schedule 3.18 - Insurance
Schedule 3.19 - Deposit and Disbursement Accounts
Schedule 3.20 - Government Contracts
Schedule 3.21(b) - Vendor Payment Terms
Schedule 3.22 - Material Agreements
Schedule 3.26 - Security Agreement Schedules
Schedule 5.1 - Corporate and Trade Names
Schedule 5.8 - Environmental Issues Summary
Schedule 6.3 - Indebtedness
Schedule 6.3-A - Existing Vendor Notes
Schedule 6.4(a) - Transactions with Affiliates
Schedule 6.7 - Existing Liens
Annex A (Recitals) - Definitions
Annex B (SECTION 1.2) - Letters of Credit
Annex C (SECTION 1.8) - Cash Management Systems
Annex D (SECTION 2.1(a)) - Schedule of Additional Closing Documents
Annex E (SECTION 4.1(a)) - Financial Statements and Projections -- Reporting
Annex F (SECTION 4.1(b)) - Collateral Reports
Annex G (SECTION 6.10) - Financial Covenants
Annex H (SECTION 9.9(a)) - Lenders' Wire Transfer Information
Annex I (SECTION 11.10) - Notice Addresses
Annex J (from Annex A - - Commitments as of Closing Date
Commitments definition)
TABLE OF CONTENTS
PAGE
1. AMOUNT AND TERMS OF CREDIT.....................................................................2
1.1. Credit Facilities.....................................................................2
1.2. Letters of Credit.....................................................................6
1.3. Prepayments...........................................................................6
1.4. Use of Proceeds.......................................................................8
1.5. Interest and Applicable Margins.......................................................9
1.6. Eligible Accounts....................................................................11
1.7. Eligible Inventory...................................................................13
1.8. Cash Management Systems..............................................................15
1.9. Fees.................................................................................15
1.10. Receipt of Payments..................................................................16
1.11. Application and Allocation of Payments...............................................16
1.12. Loan Account and Accounting..........................................................17
1.13. Indemnity............................................................................17
1.14. Access...............................................................................19
1.15. Taxes................................................................................19
1.16. Capital Adequacy; Increased Costs; Illegality; Replacement of
Lender in Respect to Increased Costs.................................................20
1.17. Single Loan..........................................................................22
1.18. Commitment Fee.......................................................................22
2. CONDITIONS PRECEDENT..........................................................................22
2.1. Conditions to the Effective of this Agreement........................................22
2.2. Further Conditions to Each Loan......................................................23
3. REPRESENTATIONS AND WARRANTIES................................................................24
3.1. Corporate or Limited Liability Company Existence; Compliance with Law................24
3.2. Executive Offices; FEIN..............................................................25
3.3. Corporate or Limited Liability Company Power, Authorization,
Enforceable Obligations..............................................................25
3.4. Financial Statements and Projections.................................................25
3.5. Material Adverse Effect..............................................................26
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3.6. Ownership of Property; Liens.........................................................26
3.7. Labor Matters........................................................................27
3.8. Ventures, Subsidiaries and Affiliates; Outstanding Stock and
Indebtedness.........................................................................27
3.9. Government Regulation................................................................28
3.10. Margin Regulations...................................................................28
3.11. Taxes................................................................................29
3.12. ERISA................................................................................29
3.13. No Litigation........................................................................30
3.14. Brokers..............................................................................30
3.15. Intellectual Property................................................................30
3.16. Full Disclosure......................................................................31
3.17. Environmental Matters................................................................31
3.18. Insurance............................................................................32
3.19. Deposit and Disbursement Accounts....................................................32
3.20. Government Contracts.................................................................32
3.21. Customer and Trade Relations; Trade Payables.........................................32
3.22. Agreements and Other Documents.......................................................33
3.23. Solvency.............................................................................33
3.24. Worthington Litigation; Worthington Acquisition Agreement............................33
3.25. Status of Holdings; IRB Subsidiary...................................................33
3.26. Security Agreements; Intellectual Property Security Agreements
and Pledge Agreements................................................................34
4. FINANCIAL STATEMENTS AND INFORMATION..........................................................34
4.1. Reports and Notices..................................................................34
4.2. Communication with Accountants.......................................................34
5. AFFIRMATIVE COVENANTS.........................................................................34
5.1. Maintenance of Existence and Conduct of Business.....................................34
5.2. Payment of Obligations...............................................................35
5.3. Books and Records....................................................................35
5.4. Insurance; Damage to or Destruction of Collateral....................................35
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5.5. Compliance with Laws.................................................................37
5.6. Supplemental Disclosure..............................................................37
5.7. Intellectual Property................................................................38
5.8. Environmental Matters................................................................38
5.9. Landlords' Agreements, Mortgagee Agreements and Bailee Letters.......................39
5.10. Chief Financial Officer..............................................................39
5.11. Operating Committee..................................................................39
5.12. Vendor Payment Terms.................................................................40
5.13. Vehicle Titles.......................................................................40
5.14. Xxxxxxx Xxxxxx Employment Agreement..................................................40
5.15. Cash Management Systems..............................................................40
5.16. Further Assurances...................................................................40
6. NEGATIVE COVENANTS............................................................................41
6.1. Mergers, Subsidiaries, Etc...........................................................41
6.2. Investments; Loans and Advances......................................................41
6.3. Indebtedness.........................................................................41
6.4. Employee Loans and Affiliate Transactions............................................42
6.5. Capital Structure and Business.......................................................42
6.6. Guaranteed Indebtedness..............................................................43
6.7. Liens................................................................................43
6.8. Sale of Stock and Assets.............................................................43
6.9. ERISA................................................................................44
6.10. Financial Covenants..................................................................44
6.11. Hazardous Materials..................................................................44
6.12. Sale-Leasebacks......................................................................44
6.13. Cancellation of Indebtedness.........................................................44
6.14. Restricted Payments..................................................................44
6.15. Change of Corporate or Limited Liability Company Name or
Location; Change of Fiscal Year......................................................45
6.16. No Impairment of Intercompany Transfers..............................................45
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6.17. No Speculative Transactions..........................................................46
6.18. Leases...............................................................................46
6.19. Credit Parties Other than Borrower...................................................46
6.20. Modifications of Certain Documents...................................................46
6.21. Worthington Litigation; Worthington Acquisition Agreement............................46
7. TERM..........................................................................................46
7.1. Termination..........................................................................46
7.2. Survival of Obligations Upon Termination of Financing
Arrangements.........................................................................47
8. EVENTS OF DEFAULT: RIGHTS AND REMEDIES........................................................47
8.1. Events of Default....................................................................47
8.2. Remedies.............................................................................50
8.3. Waivers by Credit Parties............................................................50
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT...........................................51
9.1. Assignment and Participations........................................................51
9.2. Appointment of Agent.................................................................53
9.3. Agent's Reliance, Etc................................................................54
9.4. GE Capital and Affiliates............................................................54
9.5. Lender Credit Decision...............................................................55
9.6. Indemnification......................................................................55
9.7. Successor Agent......................................................................55
9.8. Setoff and Sharing of Payments.......................................................56
9.9. Advances; Payments; Non-Funding Lenders; Information; Actions
in Concert...........................................................................57
10. SUCCESSORS AND ASSIGNS........................................................................59
10.1. Successors and Assigns...............................................................59
11. MISCELLANEOUS.................................................................................59
11.1. Complete Agreement; Modification of Agreement........................................59
11.2. Amendments and Waivers...............................................................59
11.3. Fees and Expenses....................................................................61
11.4. No Waiver............................................................................63
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11.5. Remedies.............................................................................63
11.6. Severability.........................................................................63
11.7. Conflict of Terms....................................................................63
11.8. Confidentiality......................................................................63
11.9. GOVERNING LAW........................................................................64
11.10. Notices..............................................................................65
11.11. Section Titles.......................................................................65
11.12. Counterparts.........................................................................65
11.13. WAIVER OF JURY TRIAL.................................................................65
11.14. Press Releases.......................................................................66
11.15. Reinstatement........................................................................66
11.16. Advice of Counsel....................................................................66
11.17. No Strict Construction...............................................................67
11.18. Affirmation of Existing Loan Documents...............................................67
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