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EXECUTION COPY
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CREDIT AGREEMENT
Dated as of April 13, 2000
among
PLAYCORE WISCONSIN, INC.,
as Borrower,
THE OTHER CREDIT PARTIES SIGNATORY HERETO,
as Credit Parties,
THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME,
as Lenders,
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent and Lender
and
CREDIT AGRICOLE INDOSUEZ,
as Documentation Agent and Lender
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TABLE OF CONTENTS
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1. AMOUNT AND TERMS OF CREDIT..............................................................................2
1.1. Credit Facilities..............................................................................2
1.2. Letters of Credit..............................................................................7
1.3. Prepayments....................................................................................8
1.4. Use of Proceeds...............................................................................10
1.5. Interest and Applicable Margins...............................................................10
1.6. Eligible Accounts.............................................................................14
1.7. Eligible Inventory............................................................................16
1.8. Cash Management Systems.......................................................................17
1.9 Fees..........................................................................................18
1.10. Receipt of Payments...........................................................................18
1.11. Application and Allocation of Payments........................................................18
1.12. Loan Account and Accounting...................................................................19
1.13. Indemnity.....................................................................................19
1.14. Access........................................................................................21
1.15. Taxes.........................................................................................21
1.16. Capital Adequacy; Increased Costs; Illegality.................................................23
1.17. Single Loan...................................................................................24
2. CONDITIONS PRECEDENT...................................................................................24
2.1. Conditions to the Initial Loans...............................................................24
2.2. Further Conditions to Each Loan...............................................................26
3. REPRESENTATIONS AND WARRANTIES.........................................................................27
3.1. Corporate Existence; Compliance with Law......................................................27
3.2. Executive Offices; FEIN.......................................................................28
3.3. Corporate Power, Authorization, Enforceable Obligations.......................................28
3.4. Financial Statements and Projections..........................................................28
3.5. Material Adverse Effect.......................................................................30
3.6. Ownership of Property; Liens..................................................................30
3.7. Labor Matters.................................................................................31
3.8. Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness.....................31
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3.9. Government Regulation.........................................................................31
3.10. Margin Regulations............................................................................32
3.11. Taxes.........................................................................................32
3.12. ERISA.........................................................................................32
3.13. No Litigation.................................................................................33
3.14. Brokers.......................................................................................33
3.15. Intellectual Property.........................................................................34
3.16. Full Disclosure...............................................................................34
3.17. Environmental Matters.........................................................................34
3.18. Insurance.....................................................................................35
3.19. Deposit and Disbursement Accounts.............................................................35
3.20. [Intentionally omitted.]......................................................................35
3.21. Customer and Trade Relations..................................................................35
3.22. Agreements and Other Documents................................................................35
3.23. Solvency......................................................................................36
3.24. Year 2000 Problems............................................................................36
3.25. Acquisition Agreement.........................................................................36
3.26. Status of Acquisition Co. and Merger Co.......................................................37
3.27. Subordinated Debt.............................................................................37
4. FINANCIAL STATEMENTS AND INFORMATION...................................................................37
4.1. Reports and Notices...........................................................................37
4.2. Communication with Accountants................................................................37
5. AFFIRMATIVE COVENANTS..................................................................................38
5.1. Maintenance of Existence and Conduct of Business..............................................38
5.2. Payment of Obligations........................................................................38
5.3. Books and Records.............................................................................39
5.4. Insurance; Damage to or Destruction of Collateral.............................................39
5.5. Compliance with Laws..........................................................................40
5.6. Supplemental Disclosure.......................................................................41
5.7. Intellectual Property.........................................................................41
5.8. Environmental Matters.........................................................................41
5.9. Landlords' Agreements, Mortgagee Agreements and Bailee Letters................................42
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5.10. Further Assurances............................................................................43
5.11. ERISA Event...................................................................................43
5.12. Interest Hedging Obligations..................................................................43
5.13. Lender Meeting................................................................................43
5.14. Subsidiary Collateral Documents...............................................................43
6. NEGATIVE COVENANTS.....................................................................................43
6.1. Mergers, Subsidiaries, Etc....................................................................43
6.2. Investments; Loans and Advances...............................................................44
6.3. Indebtedness..................................................................................45
6.4. Employee Loans and Affiliate Transactions.....................................................46
6.5. Capital Structure and Business................................................................47
6.6. Guaranteed Indebtedness.......................................................................47
6.7. Liens.........................................................................................47
6.8. Sale of Stock and Assets......................................................................48
6.9. ERISA.........................................................................................48
6.10. Financial Covenants...........................................................................48
6.11. Hazardous Materials...........................................................................48
6.12. Sale-Leasebacks...............................................................................49
6.13. Cancellation of Indebtedness..................................................................49
6.14. Restricted Payments...........................................................................49
6.15. Change of Corporate Name or Location; Change of Fiscal Year...................................50
6.16. No Impairment of Intercompany Transfers.......................................................50
6.17. No Speculative Transactions...................................................................51
6.18. Changes Relating to Subordinated Debt.........................................................51
6.19. Status of Holdings............................................................................51
6.20. Sale or Discount of Accounts..................................................................51
7. TERM...................................................................................................51
7.1. Termination...................................................................................51
7.2. Survival of Obligations Upon Termination of Financing Arrangements............................51
8. EVENTS OF DEFAULT: RIGHTS AND REMEDIES.................................................................52
8.1. Events of Default.............................................................................52
8.2. Remedies......................................................................................54
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8.3. Waivers by Credit Parties.....................................................................54
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENTS...................................................54
9.1. Assignment and Participations.................................................................54
9.2. Appointment of Agents.........................................................................56
9.3. Agent's Reliance, Etc.........................................................................57
9.4. GE Capital and Affiliates.....................................................................58
9.5. Lender Credit Decision........................................................................58
9.6. Indemnification...............................................................................58
9.7. Successor Agent...............................................................................59
9.8. Setoff and Sharing of Payments................................................................59
9.9. Advances; Payments; Non-Funding Lenders; Information; Actions in Concert......................60
10. SUCCESSORS AND ASSIGNS.................................................................................62
10.1. Successors and Assigns........................................................................62
11. MISCELLANEOUS..........................................................................................63
11.1. Complete Agreement; Modification of Agreement.................................................63
11.2. Amendments and Waivers........................................................................63
11.3. Fees and Expenses.............................................................................65
11.4. No Waiver.....................................................................................66
11.5. Remedies......................................................................................66
11.6. Severability..................................................................................66
11.7. Conflict of Terms.............................................................................67
11.8. Confidentiality...............................................................................67
11.9. GOVERNING LAW.................................................................................67
11.10. Notices.......................................................................................68
11.11. Section Titles................................................................................69
11.12. Counterparts..................................................................................69
11.13. WAIVER OF JURY TRIAL..........................................................................69
11.14. Press Releases................................................................................69
11.15. Reinstatement.................................................................................69
11.16. Advice of Counsel.............................................................................70
11.17. No Strict Construction........................................................................70
11.18. No Director and Officer Liability.............................................................70
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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)(A) - Form of Term Note A
Exhibit 1.1(b)(B) - Form of Term Note B
Exhibit 1.1(c)(ii) - Form of Swing Line Note
Exhibit 1.5(e) - - Form of Notice of Conversion/Continuation
Exhibit 4.1(b) - - Form of Borrowing Base Certificate
Exhibit 9.1(a) - - Form of Assignment Agreement
Disclosure Schedule (1.1(A)) - Maximum Amount of Revolving Credit Advances
on Closing Date
Disclosure Schedule (1.1(B)) - Responsible Individual
Disclosure Schedule (1.4) - Sources and Uses; Funds Flow Memorandum
Disclosure Schedule (3.2) - Executive Offices; FEIN
Disclosure Schedule (3.4(A)) - Financial Statements
Disclosure Schedule (3.4(B)) - Pro Forma
Disclosure Schedule (3.4(C)) - Projections
Disclosure Schedule (3.6) - Real Estate and Leases
Disclosure Schedule (3.7) - Labor Matters
Disclosure Schedule (3.8) - Ventures, Subsidiaries and Affiliates; Outstanding Stock
Disclosure Schedule (3.10) Margin Stock
Disclosure Schedule (3.11) - Tax Matters
Disclosure Schedule (3.12) - ERISA Plans
Disclosure Schedule (3.13) - Litigation
Disclosure Schedule (3.15) - Intellectual Property
Disclosure Schedule (3.17) - Hazardous Materials
Disclosure Schedule (3.18) - Insurance
Disclosure Schedule (3.19) - Deposit and Disbursement Accounts
Disclosure Schedule (3.20) - Government Contracts
Disclosure Schedule (3.21) - Customer and Trade Relations
Disclosure Schedule (3.22) - Material Agreements
Disclosure Schedule (5.1) - Trade Names
Disclosure Schedule (6.2(j)) - Investment Contracts
Disclosure Schedule (6.3) - Indebtedness
Disclosure Schedule (6.4(a)) - Transactions with Affiliates
Disclosure Schedule (6.7) - Existing Liens
Disclosure Schedule (6.16(a)) - Impairment of Intercompany Transfers
Disclosure Schedule
(A-EBITDA) - Adjustments to EBITDA
Disclosure Schedule (A-
Funded Debt) - Funded Debt
Annex A (Recitals) - Definitions
Annex B (Section 1.2) - Letters of Credit
Annex C (Section 1.8) - Cash Management System
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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 definition) - Commitments as of Closing Date
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CREDIT AGREEMENT, dated as of April 13, 2000, among PLAYCORE
WISCONSIN, INC., a Wisconsin corporation ("Borrower"), the other Credit Parties
signatory hereto, GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation
(in its individual capacity, "GE Capital"), for itself, as Lender, and as
Administrative Agent for Lenders, CREDIT AGRICOLE INDOSUEZ, a French banking
institution acting through its New York Branch (in its individual capacity,
"Indosuez"), for itself, as Lender, and as Documentation Agent for Lenders, and
the other Lenders signatory hereto from time to time.
RECITALS
WHEREAS, Borrower desires that Lenders extend revolving and term
credit facilities to Borrower of up to One Hundred Fifteen Million Dollars
($115,000,000) in the aggregate for the purpose of funding a portion of the
Acquisition and Refinancing and to provide (a) working capital financing for
Borrower and its Subsidiaries, and (b) funds for other general corporate
purposes of Borrower and its Subsidiaries, and for these purposes, Lenders are
willing to make certain loans and other extensions of credit to Borrower of up
to such amount upon the terms and conditions set forth herein; and
WHEREAS, Borrower desires to secure all of its obligations under the
Loan Documents by granting to Administrative Agent, for the benefit of itself,
Documentation Agent and Lenders, a security interest in and lien upon all of its
existing and after-acquired personal and owned real property; and
WHEREAS, PlayCore, Inc., a Delaware corporation ("Holdings"), is
willing to guaranty all of the obligations of Borrower to Lenders under the Loan
Documents and to pledge to Administrative Agent, for the benefit of itself,
Documentation Agent and Lenders, all of the capital stock of Borrower to secure
such guaranty; and
WHEREAS, Heartland Industries, Inc. (DE), a Delaware corporation
("Heartland"), is willing to guaranty all of the obligations of Borrower to
Lenders under the Loan Documents and is willing to grant to Administrative
Agent, for the benefit of itself, Documentation Agent and Lenders, a security
interest in and lien upon all of its existing and after-acquired personal and
owned real property to secure such guaranty; 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 as follows:
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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 until the Commitment
Termination Date its Pro Rata Share of 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
Borrowing Base, in each case less the sum of the Letter of Credit
Obligations and the Swing Line Loan outstanding at such time ("Borrowing
Availability"); provided, however, that the aggregate amount of the
Revolving Credit Advances outstanding on the Closing Date shall not exceed
the amount provided in Disclosure Schedule (1.1(A)). 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 Administrative Agent identified
on Disclosure Schedule (1.1(B)) 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
reasonably required by Administrative Agent. If Borrower desires to have
the Revolving Credit Advances bear interest by reference to a LIBOR Rate,
it 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) At the request of Borrower, Agents at their discretion may
(but shall have absolutely no obligation to), make Revolving Credit
Advances to Borrower on
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behalf of Revolving Lenders in amounts which cause the outstanding balance
of the aggregate Revolving Loan to exceed the Borrowing Base (less the
Swing Line Loan) (any such excess Revolving Credit Advances are herein
referred to collectively as "Overadvances"), and no such event or
occurrence shall cause or constitute a waiver by Administrative Agent or
Lenders of any Default or Event of Default that may result therefrom or of
Administrative Agent's, the Swing Line Lender's or Revolving Lenders' right
to refuse to make any further Overadvances, Swing Line Advances or
Revolving Credit Advances, or incur any Letter of Credit Obligations, as
the case may be, at any time that an Overadvance exists or would result
therefrom. In addition, Overadvances may be made even if the conditions to
lending set forth in Section 2 have not been met. All Overadvances may be
made even if the conditions to lending set forth in Section 2 have not been
met. All Overadvances shall constitute Index Rate Loans, shall bear
interest at the Default Rate and shall be payable on demand. Except as
otherwise provided in Section 1.11(b), the authority of Administrative
Agent to make Overadvances is limited to an aggregate amount not to exceed
$3,000,000 at any time, shall not cause the Revolving Loan to exceed the
Maximum Amount, and may be revoked prospectively by a written notice to
Administrative Agent signed by Revolving Lenders holding a majority of the
Revolving Loan Commitments.
(b) Term Loans.
(i) Subject to the terms and conditions hereof, (A) each Term A
Lender agrees to: make a term loan on the Closing Date to Borrower (the
"Term Loan A") in the original principal amount of its Term Loan A
Commitment, and (B) each Term B Lender agrees to make a term loan on the
Closing Date to Borrower (the "Term Loan B"; Term Loan A and Term Loan B,
each a "Term Loan" and collectively, the "Term Loans") in the original
principal amount of its Term Loan B Commitment. The obligations of each
Term Lender hereunder shall be several and not joint. The Term Loan A shall
be evidenced by promissory notes substantially in the form of Exhibit
1.1(b)(A) (each a "Term A Note" and collectively the "Term A Notes"), and
Borrower shall execute and deliver a Term A Note to each Term A Lender. The
Term Loan B shall be evidenced by promissory notes substantially in the
form of Exhibit 1.1(b)(B) (each a "Term B Note" and collectively, the "Term
B Notes"; the Term A Note and the Term B Note, each a "Term Note" and
collectively, the "Term Notes"), and Borrower shall execute and deliver a
Term B Note to each Term B Lender. Each Term Note shall represent the
obligation of Borrower to pay the amount of the applicable Term Lender's
respective Term Loan Commitment, together with interest thereon as
prescribed in Section 1.5.
(ii) (A) Borrower shall pay the principal amount of the Term Loan
A in twenty-four (24) consecutive quarterly installments on the first day
of January, April, July and October of each year (except for the final
installment), commencing October 1, 2000, as follows:
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Payment Installment
Date Amount
------- -----------
October 1, 2000 $ 625,000
January 1, 2001 $ 625,000
April 1, 2001 $ 625,000
July 1, 2001 $ 625,000
October 1, 2001 $ 750,000
January 1, 2002 $ 750,000
April 1, 2002 $ 750,000
July 1, 2002 $ 750,000
October 1, 2002 $1,000,000
January 1, 2003 $1,000,000
April 1, 2003 $1,000,000
July 1, 2003 $1,000,000
October 1, 2003 $1,250,000
January 1, 2004 $1,250,000
April 1, 2004 $1,250,000
July 1, 2004 $1,250,000
October 1, 2004 $1,312,500
January 1, 2005 $1,312,500
April 1, 2005 $1,312,500
July 1, 2005 $1,312,500
October 1, 2005 $1,312,500
January 1, 2006 $1,312,500
April 1, 2006 $1,312,500
July 1, 2006 $1,312,500
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(B) Borrower shall pay the principal amount of the Term Loan B in
twenty-eight quarterly installments on the first day of January, April, July and
October of each year (except for the final installment), commencing October 1,
2000 as follows:
Payment Installment
Date Amount
------- -----------
October 1, 2000 $ 150,000
January 1, 2001 $ 150,000
April 1, 2001 $ 150,000
July 1, 2001 $ 150,000
October 1, 2001 $ 150,000
January 1, 2002 $ 150,000
April 1, 2002 $ 150,000
July 1, 2002 $ 150,000
October 1, 2002 $ 150,000
January 1, 2003 $ 150,000
April 1, 2003 $ 150,000
July 1, 2003 $ 150,000
October 1, 2003 $ 150,000
January 1, 2004 $ 150,000
April 1, 2004 $ 150,000
July 1, 2004 $ 150,000
October 1, 2004 $ 150,000
January 1, 2005 $ 150,000
April 1, 2005 $ 150,000
July 1, 2005 $ 150,000
October 1, 2005 $7,125,000
January 1, 2006 $7,125,000
April 1, 2006 $7,125,000
July 1, 2006 $7,125,000
October 1, 2006 $7,125,000
January 1, 2007 $7,125,000
April 1, 2007 $7,125,000
July 1, 2007 $7,125,000
Notwithstanding the foregoing, the aggregate outstanding principal
balance of the Term Loans shall be due and payable in full in immediately
available funds on the Commitment Termination Date (other than its schedule date
as set forth in clause (a) of the definition thereof with respect to Term Loan
B), if not sooner paid in full.
(iii) Each payment of principal with respect to each of the Term
Loans shall be paid to Administrative Agent for the ratable benefit of each
applicable Term Lender, ratably in proportion to each such Term Lender's
respective Term Loan Commitment.
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(c) Swing Line Facility.
(i) Administrative Agent shall notify the Swing Line Lender upon
Administrative Agent's receipt of any Notice of Revolving Credit Advance.
Subject to the terms and conditions hereof, the Swing Line Lender may, in
its discretion, make available from time to time until the Commitment
Termination Date advances (each, a "Swing Line Advance") in accordance with
any such notice. The aggregate amount of Swing Line Advances outstanding
shall not exceed the lesser of (A) the Swing Line Commitment and (B) the
lesser of the Maximum Amount and (except for Overadvances) the Borrowing
Base, in each case, less the outstanding balance of the Revolving Loan at
such time ("Swing Line Availability"). Until the Commitment Termination
Date, Borrower may from time to time borrow, repay and reborrow under this
Section 1.1(c). Each Swing Line Advance shall be made pursuant to a Notice
of Revolving Credit advance delivered by Borrower to Administrative Agent
in accordance with Section 1.1(a). Those notices must be given no later
than 11:00 a.m. (New York time) on the Business Day of the proposed Swing
Line Advance. Notwithstanding any other provision of this Agreement or the
other Loan Documents, the Swing Line Loan shall constitute an Index Rate
Loan. Borrower shall repay the aggregate outstanding principal amount of
the Swing Line Loan on the Commitment Termination Date, or upon demand
therefor by Administrative Agent, in which event such Swing Line Loan shall
be deemed converted to a Revolving Credit Advance.
(ii) Borrower shall execute and deliver to the Swing Line Lender
a promissory note to evidence the Swing Line Commitment. Such note shall be
in the principal amount of the Swing Line Commitment of the Swing Line
Lender, dated the Closing Date and substantially in the form of Exhibit
1.1(c)(ii) (the "Swing Line Note"). The Swing Line Note shall represent the
obligation of Borrower to pay the amount of the Swing Line Commitment or,
if less, the aggregate unpaid principal amount of all Swing Line Advances
made to Borrower together with interest thereon as prescribed in Section
1.5. The entire unpaid balance of the Swing Line Loan and all other
non-contingent Obligations related hereto shall be immediately due and
payable in full in immediately available funds on the Commitment
Termination Date if not sooner paid in full.
(iii) Refunding of Swing Line Loans. The Swing Line Lender, at
any time and from time to time in its sole and absolute discretion on
behalf of Borrower (and Borrower hereby irrevocably authorizes the Swing
Line Lender to so act on its behalf) may request each Revolving Lender
(including the Swing Line Lender) to make a Revolving Credit Advance to
Borrower (which shall be an Index Rate Loan) in an amount equal to such
Revolving Lender's Pro Rata Share of the principal amount of the Swing Line
Loan (the "Refunded Swing Line Loan") outstanding on the date such notice
is given. Unless any of the events described in Sections 8.1(h) or 8.1(i)
shall have occurred (in which event the procedures of Section 1.1(c)(iv)
shall apply) and regardless of whether the conditions precedent set forth
in this Agreement to the making of a Revolving Credit Advance are then
satisfied, each Revolving Lender shall disburse directly to Administrative
Agent, its Pro Rata Share of a Revolving Credit Advance on
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behalf of the Swing Line Lender, prior to 3:00 p.m. (New York time), in
immediately available funds on the Business Day next succeeding the date
such notice is given. The proceeds of such Revolving Credit Advances shall
be immediately paid to the Swing Line Lender and applied to repay the
Refunded Swing Line Loan.
(iv) Participation in Swing Line Loans. If, prior to refunding a
Swing Line Loan with a Revolving Credit Advance pursuant to Section
1.1(c)(iii), one of the events described in Sections 8.1(h) or 8.1(i) shall
have occurred, then, subject to the provisions of Section 1.1(c)(v) below,
each Revolving Lender will, on the date such Revolving Credit Advance was
to have been made for the benefit of Borrower, purchase from the Swing Line
Lender an undivided participation interest in the Swing Line Loan in an
amount equal to its Pro Rata Share of such Swing Line Loan. Upon request,
each Revolving Lender will promptly transfer to the Swing Line Lender, in
immediately available funds, the amount of its participation. Settlement of
payments received in respect of Swing Line Loans hereunder shall be made at
least weekly.
(v) Revolving Lenders' Obligations Unconditional. Each Revolving
Lender's obligation to make Revolving Credit Advances in accordance with
Section 1.1(c)(iii) and to purchase participating interests in accordance
with Section 1.1(c)(iv) shall be absolute and unconditional and shall not
be affected by any circumstance, including (A) any setoff, counterclaim,
recoupment, defense or other right which such Revolving Lender may have
against the Swing Line Lender, Borrower or any other Person for any reason
whatsoever; (B) the occurrence or continuance of any Default or Event of
Default; (C) any inability of Borrower to satisfy the conditions precedent
to borrowing set forth in this Agreement on the date upon which such
participating interest is to be purchased or (D) any other circumstance,
happening or event whatsoever, whether or not similar to any of the
foregoing. If any Revolving Lender does not make available to
Administrative Agent or the Swing Line Lender, as applicable, the amount
required pursuant to Section 1.1(c)(iii) or 1.1(c)(iv), as the case may be,
the Swing Line Lender shall be entitled to recover such amount on demand
from such Revolving Lender, together with interest thereon for each day
from the date of non-payment until such amount is paid in full at the
Federal Funds Rate for the first two Business Days and at the Index Rate
thereafter.
(d) Reliance on Notices. Administrative 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
Administrative Agent to be genuine. Administrative Agent may assume that each
Person executing and delivering such a notice was duly authorized, unless the
responsible individual acting thereon for Administrative Agent has actual
knowledge to the contrary.
1.2. Letters of Credit. Subject to and in accordance with the terms
and conditions contained herein and in Annex B, 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.
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1.3. Prepayments.
(a) Voluntary Prepayments. Borrower may at any time on at least five
(5) days' prior written notice to Administrative Agent (i) voluntarily prepay
all or part of any of the Term Loans and/or (ii) voluntarily prepay all or part
of the Revolving Loan and permanently reduce (but not terminate the Revolving
Loan Commitment; provided that (A) any such prepayments or reductions shall be
in a minimum amount of $1,000,000 and integral multiples of $250,000 in excess
of such amount and (B) the Revolving Loan Commitment shall not be reduced to an
amount less than $15,000,000. Borrower may at any time on at least five (5)
days' prior written notice to Administrative 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 reduction or termination of the Revolving Loan Commitment must be
accompanied by the payment of the fee required by Section 1.9, if any, plus the
payment of any LIBOR funding breakage costs in accordance with Section 1.13(b).
Upon any such prepayment and reduction or 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, or request Swing
Line Advances, shall simultaneously be permanently reduced or terminated, as the
case may be; provided that a permanent reduction of the Revolving Loan
Commitment shall not require a corresponding pro rata reduction in the L/C
Sublimit (as defined in Annex B), provided that the L/C Sublimit shall not be
more than 50% of the Revolving Loan Commitment. Each notice of partial
prepayment shall designate the Loan or other Obligations to which such
prepayment is to be applied, provided that any partial prepayments of any of the
Term Loans made by Borrower shall be applied to prepay the scheduled
installments of the respective Term Loan in inverse order of maturity.
(b) Mandatory Prepayments.
(i) If at any time the outstanding balance of the Revolving Loan
exceeds the lesser of (A) the Maximum Amount and (B) the Borrowing Base,
less, in each case, the outstanding Swing Line Loan at such time, Borrower
shall immediately repay the aggregate outstanding Revolving Credit Advances
to the extent required to eliminate such excess and at Borrower's option,
applied first to such Revolving Credit Advances which are Index Rate Loans.
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. Notwithstanding
the foregoing, any Overadvance made pursuant to Section 1.1(a)(iii) shall
be repaid only on demand.
(ii) Promptly, but in any event within five (5) Business Days,
following receipt by any Credit Party of cash proceeds of any asset
disposition (including condemnation proceeds, but excluding proceeds of
asset dispositions permitted by Section 6.8(a), (d), (e) or (f) 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) all sales,
transfer and recording taxes,
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(C) amounts payable to holders of senior Liens (to the extent such Liens
constitute Permitted Encumbrances hereunder), if any, (D) an appropriate
reserve for income taxes in accordance with GAAP in connection therewith
and (E) appropriate amounts to be provided by a Credit Party as a reserve,
in accordance with GAAP, against any liabilities associated with the assets
sold or disposed of in such asset disposition, including, without
limitation, pension and other post-employment benefit liabilities and
liabilities related to environmental matters or against any indemnification
obligations associated with the assets sold or disposed of in such asset
disposition; provided that to the extent any reserve, or part thereof,
under this Section 1.3(b)(ii) is reversed or is no longer applicable, such
amount shall be applied toward prepayment of the Loans as provided in this
Section. Any such prepayment shall be applied in accordance with clause (c)
below.
(iii) If Holdings, Borrower or any of Borrower's Subsidiaries
issues Stock or debt securities permitted hereunder, no later than the
Business Day following the date of receipt of the proceeds thereof,
Borrower shall prepay the Loans in an amount equal to all such cash
proceeds, net of all discounts and commissions or brokerage fees and other
reasonable costs paid to non-Affiliates in connection therewith and net of
any transfer, recording or similar taxes. The foregoing shall not apply to
(A) directors qualifying shares, (B) pro rata issuances to minority
shareholders, (C) sales of Holdings Stock for acquisitions of assets or
business or entities becoming Subsidiaries, (D) sales of Stock pursuant to
stock options or incentive plans of Holdings, (E) private sales of Holdings
Stock up to an aggregate of $7,000,000 during the term of this Agreement,
(F) intercompany equity and debt issuances between and among Credit Parties
and (G) all Indebtedness permitted under Section 6.3(a)(iv), (vi), (viii),
(ix), (x) and any refinancing thereof. Any such prepayment shall be applied
in accordance with clause (c) below.
(iv) Until the Termination Date, Borrower shall prepay the
Obligations on the earlier of the date which is ninety (90) days after (A)
the date on which Borrower's annual audited Financial Statements for the
immediately preceding Fiscal Year are delivered pursuant to Annex E or (B)
the date on which such annual audited Financial Statements were required to
be delivered pursuant to Annex E, in an amount equal to: (x) seventy-five
percent (75%) of Excess Cash Flow for the immediately preceding Fiscal Year
if the Leverage Ratio as of such date is greater than or equal to 3.5:1.0
and (y) fifty percent (50%) of Excess Cash Flow for the immediately
preceding Fiscal Year if the Leverage Ratio as of such date is less than
3.5:1.0. Any prepayments from Excess Cash Flow paid pursuant to this clause
(iv) 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 and the
resulting prepayment were calculated, which certificate shall be in form
and substance satisfactory to Administrative Agent.
(c) Application of Certain Mandatory Prepayments. Any prepayments made
by Borrower pursuant to clauses (b)(ii), (b)(iii), or (b)(iv) above shall be
applied as follows: first, to Fees and reimbursable expenses of each Agent then
due and payable pursuant to any of the Loan Documents; second, to interest then
due and payable on each of the Loans on a pro rata basis; third, to prepay the
scheduled installments of each of the Loans on a pro rata basis in inverse
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order of maturity, until each of the Term Loans shall have been prepaid in full;
fourth, to the principal balance of the Swing Line Loan until the same shall
have been repaid in full; fifth, to the outstanding principal balance of
Revolving Credit Advances which are Index Rate Loans first, then to those which
are LIBOR Rate Loans, until the same shall have been paid in full; and sixth, to
any Letter of Credit Obligations, 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. Each of the
Revolving Loan Commitment and the Swing Line Commitment shall be permanently
reduced by the amount of any such prepayments. Notwithstanding the foregoing, so
long as the Term Loan A is outstanding, each Term B Lender shall have the right
to refuse all or a portion of such prepayment allocable to its Term Loan B, and
such amount so refused shall be applied to prepay the Term Loan A.
(d) Application of Prepayments from Insurance Proceeds. Prepayments
from insurance proceeds in accordance with Section 5.4(c) shall be applied as
follows: insurance proceeds from casualties or losses to cash or Inventory shall
be applied first, to the Swing Line Loans and, second, to the Revolving Credit
Advances; insurance proceeds from casualties or losses to Equipment, Fixtures
and Real Estate shall be applied on a pro rata basis to scheduled installments
of the Term Loans in inverse order of maturity. The Revolving Loan Commitment
and the Swing Line Loan Commitment shall be permanently reduced by the amount of
any such prepayments. If the precise amount of insurance proceeds allocable to
Inventory as compared to Equipment, Fixtures and Real Estate are not otherwise
determined, the allocation and application of those proceeds shall be determined
by Administrative Agent, subject to the approval of Requisite Lenders.
(e) Nothing in this Section 1.3 shall be construed to constitute
Administrative Agent's or any Lender's consent to any transaction referred to in
clauses (b)(ii) and (b)(iii) above which is not permitted by other provisions of
this Agreement or the other Loan Documents.
1.4. Use of Proceeds. Borrower shall utilize the proceeds of the Term
Loans and the Revolving Loan made on the Closing Date solely for the Acquisition
and the Refinancing (and to pay any related transaction fees and expenses), and
the proceeds of the Revolving Loan made thereafter for the financing of
Borrower's and its Subsidiaries' ordinary working capital and general corporate
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. Proceeds from equity issuances and the
Subordinated Debt shall be used first to acquire the outstanding equity of
Holdings.
1.5. Interest and Applicable Margins.
(a) Borrower shall pay interest to Administrative 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
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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 the 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; and (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 the Swing Line Loan, the Index Rate plus the
Applicable Revolver Index Margin per annum.
The Applicable Revolver Index Margin, Applicable Revolver LIBOR
Margin, Applicable Term Loan A Index Margin, Applicable Term Loan A LIBOR
Margin, Applicable Term Loan B Index Margin, Applicable Term Loan B LIBOR Margin
and Applicable L/C Margin will be 1.75%, 3.50%, 1.75%, 3.50%, 2.25%, 4.00% and
3.50% per annum, respectively, as of the Closing Date. The Applicable Margins
for the Revolving Loan and the Term Loan A and the Applicable L/C Margin will be
adjusted (up only) prospectively on a quarterly basis as determined by
Borrower's consolidated financial performance for the immediately preceding four
Fiscal Quarters, commencing with the first day of the first calendar month that
occurs more than five (5) days after delivery of Borrower's quarterly Financial
Statements to Administrative Agent for the first Fiscal Quarter ending following
the Closing Date. From and after the first day of the first calendar month that
occurs more than five (5) days after delivery of Borrower's quarterly Financial
Statements to Administrative Agent for the Fiscal Quarter ending after the first
six months following the Closing Date, the Applicable Margins for the Revolving
Loan and the Term Loan A and the Applicable L/C Margin will be adjusted (up or
down) prospectively on a quarterly basis, based on Borrower's consolidated
financial performance for the immediately preceding four Fiscal Quarters.
Adjustments in Applicable Margins will be determined by reference to the
following grids:
LEVEL OF
IF LEVERAGE RATIO IS: APPLICABLE MARGINS:
-------------------- ------------------
> or = to 4.75 Level I
> or = to 4.25, but < 4.75 Level II
> or = to 3.75, but < 4.25 Level III
> or = to 3.25, but < 3.75 Level IV
< 3.25 Level V
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APPLICABLE MARGINS
-----------------------------------------------------------------------------
XXXXX X XXXXX XX XXXXX XXX XXXXX XX LEVEL V
------- -------- --------- -------- -------
Applicable Revolver 2.00% 1.75% 1.50% 1.25% 1.00%
Index Margin
Applicable Revolver 3.75% 3.50% 3.25% 3.00% 2.75%
LIBOR Margin
Applicable Term Loan A 2.00% 1.75% 1.50% 1.25% 1.00%
Index Margin
Applicable Term Loan A 3.75% 3.50% 3.25% 3.00% 2.75%
LIBOR Margin
Applicable Term Loan B 2.50% 2.25% 2.00% 2.00% 2.00%
Index Margin
Applicable Term Loan B 4.25% 4.00% 3.75% 3.75% 3.75%
LIBOR Margin
Applicable L/C Margin 3.75% 3.50% 3.25% 3.00% 2.75%
Concurrently with the delivery of those Financial Statements, Borrower
shall deliver to Administrative Agent and Lenders a certificate, signed by its
chief financial officer, setting forth in reasonable detail the basis for the
continuance of, or any change in, the Applicable Margins. Failure to timely
deliver such Financial Statements shall, in addition to any other remedy
provided for in this Agreement, result in an increase in the Applicable Margins
to the highest level set forth in the foregoing grid, until the fifth Business
Day following the delivery of those Financial Statements demonstrating that such
an increase is not required. If a Default or an Event of Default shall have
occurred or be continuing at the time any reduction in the Applicable Margins is
to be implemented, that reduction shall be deferred until the fifth Business Day
following the date on which such Default or Event of Default is waived or cured.
(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 Administrative 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 Administrative Agent of an interest rate and Fees hereunder
shall be conclusive, absent manifest error.
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(d) So long as any Default or Event of Default shall have occurred and
be continuing, 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) Except with respect to clause (iii) below, 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 (other than
the Swing Line Loan) 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 (other than the Swing Line 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, an
Index Rate Loan must be in a minimum amount of $250,000 and integral multiples
of $100,000 in excess of such amount. Any Loan to be made or continued as, or
converted into, a LIBOR Loan must be in a minimum amount of $1,000,000 and
integral multiples of $250,000 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 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 Administrative 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). No Loan may be made as or converted into a LIBOR Loan
until the earlier of (a) forty-five (45) days after the Closing Date unless
otherwise consented to by Administrative Agent or (b) the completion of the
syndication of the Loans hereunder, as determined by Administrative Agent, or an
Affiliate thereof, in its sole discretion.
(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 applicable 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
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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
Administrative 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, Administrative
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 Borrowing Base
Certificate delivered by Borrower to Administrative Agent and on other
information available to it, Administrative Agent shall in its reasonable credit
judgment determine which Accounts of Borrower and Heartland shall not constitute
"Eligible Accounts" for purposes of this Agreement. In determining whether a
particular Account constitutes an Eligible Account, Administrative Agent shall
not include any such Account to which any of the exclusionary criteria set forth
below applies unless otherwise approved in writing by Administrative Agent.
Agents reserve the right, at any time and from time to time after the Closing
Date, to adjust any such criteria, to establish new criteria and to adjust
advance rates with respect to Eligible Accounts, in its reasonable credit
judgment, subject to the approval of Requisite Revolving Lenders in the case of
adjustments, new criteria or changes in advance rates which have the effect of
making more credit available in excess of $3,000,000 of additional credit.
Eligible Accounts shall not include any Account of Borrower or Heartland unless
otherwise approved in writing by Administrative Agent:
(a) which does not arise from the sale of goods or the performance of
services by Borrower or Heartland in the ordinary course of its business;
(b) (i) upon which Borrower's or Heartland's right to receive payment
is not absolute or is contingent upon the fulfillment of any condition
whatsoever or (ii) as to which Borrower or Heartland 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 or Heartland's completion of further performance under such contract
or is subject to the equitable lien of a surety bond issuer;
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(c) in the event that any defense, counterclaim, setoff or dispute is
asserted as to such Account to the extent of the amount of such defense,
counterclaim, setoff or dispute (excluding accrued advertising and volume
rebates);
(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, reasonably acceptable to
Administrative Agent in form and substance, has not been sent to the applicable
Account Debtor;
(f) that (i) is not owned by Borrower or Heartland or (ii) is subject
to any right, claim, security interest or other interest of any other Person,
other than Liens in favor of Administrative Agent, on behalf of itself,
Documentation Agent and Lenders;
(g) that arises from a sale to any director, officer, other employee
or Affiliate of any Credit Party;
(h) 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 Administrative Agent or receivables
insurance, satisfactory to Administrative Agent as to form, amount and issuer;
(i) to the extent Borrower or any Subsidiary thereof is liable for
goods sold or services rendered by the applicable Account Debtor to Borrower or
any Subsidiary thereof but only to the extent of the potential offset;
(j) 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;
(k) 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 one hundred and fifty (150) 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;
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(l) 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 other criteria set forth in this Section 1.6;
(m) as to which Administrative Agent's Lien thereon, on behalf of
itself, Documentation Agent and Lenders, is not a first priority perfected Lien;
(n) as to which any of the representations or warranties pertaining to
Accounts set forth in this Agreement or the Security Agreement is untrue;
(o) to the extent such Account is evidenced by a judgment, Instrument
or Chattel Paper;
(p) to the extent such Account debtor exceeds any credit limit
established by Agent, in its reasonable discretion after ten (10) days prior
written notice to Borrower, as to Accounts created thereafter;
(q) to the extent that such Account, together with all other Accounts
owing to such Account Debtor and its Affiliates as of any date of determination
exceed twenty-five percent (25%) of all Eligible Accounts;
(r) which is payable in any currency other than Dollars; or
(s) which, as to prospective Account balances (but not the then
outstanding Account balances), is unacceptable to Administrative Agent in its
reasonable credit judgment.
1.7. Eligible Inventory. Based on the most recent Borrowing Base
Certificate delivered by Borrower to Administrative Agent and on other
information available to it, Administrative Agent shall in its reasonable credit
judgment determine which Inventory of Borrower, Heartland or other Guarantor
(other than Holdings) shall not constitute "Eligible Inventory" for purposes of
this Agreement. In determining whether any particular Inventory constitutes
Eligible Inventory, Administrative Agent shall not include any such Inventory to
which any of the exclusionary criteria set forth below applies unless otherwise
approved in writing by Administrative Agent. Agents reserve the right, at any
time and from time to time after the Closing Date, to adjust any such criteria,
to establish new criteria and to adjust advance rates with respect to Eligible
Inventory in its reasonable credit judgment, subject to the approval of
Requisite Revolving Lenders in the case of adjustments, new criteria or changes
in advance rates which have the effect of making more credit available in excess
of $3,000,000 of additional credit. Eligible Inventory shall not include any
Inventory of Borrower, Heartland or any other Guarantor (other than Holdings)
unless otherwise approved in writing by Administrative Agent that:
(a) is not owned by such Credit Party 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
such Credit Party's performance with respect to that
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Inventory), except the Liens in favor of Administrative Agent, on behalf of
itself, Documentation Agent and Lenders;
(b) is (i) not located on premises owned or leased by such Credit
Party or (ii) is stored with a bailee, warehouseman or similar Person, unless
Administrative Agent has given its prior consent thereto and unless (x) a
satisfactory bailee letter or landlord waiver has been delivered to
Administrative Agent, or (y) Reserves satisfactory to Administrative Agent have
been established with respect thereto, or (iii) other than with respect to
Heartland, 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 Administrative Agent with all necessary endorsements, free
and clear of all Liens except those in favor of Administrative Agent and
Lenders;
(e) in Administrative Agent's reasonable determination, is excess,
obsolete, unsalable, shopworn, seconds, damaged or unfit for sale to the extent
not previously covered by reserves on such Credit Party's balance sheet;
(f) consists of display items (excluding Heartland display items and
other Inventory that are or will be for sale in the ordinary course of business)
or packing or shipping materials, manufacturing supplies, or replacement parts;
(g) consists of goods which have been returned by the buyer and are
not resaleable in the ordinary course of business;
(h) is not of a type held for sale in the ordinary course of such
Credit Party's business;
(i) as to which Administrative Agent's Lien, on behalf of itself,
Documentation Agent 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 Security Agreement is untrue;
(k) consists of Hazardous Materials or goods that can be transported
or sold only with licenses that are not readily available;
(l) is not covered by casualty insurance acceptable to Administrative
Agent; or
(m) which, as to prospective (but not the then existing) Inventory, is
otherwise unacceptable to Administrative Agent in its reasonable credit
judgment.
1.8. Cash Management Systems. Promptly, but in any event within thirty
(30) days after 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").
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1.9. Fees. Borrower shall pay to GE Capital and Indosuez, each
individually, the Fees specified in that certain fee letter dated January 14,
2000 among Chartwell Investments II LLC, GE Capital and Indosuez (the "GE
Capital Fee Letter"), at the times specified for payment therein.
As additional compensation for the Revolving Lenders, Borrower
agrees to pay to Administrative 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% 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 Revolving Loan and
the Swing Line Loan outstanding during the period for which such fee is due.
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 or Net
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 solely for such purposes 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 matching specific scheduled payments then due shall
be applied to those scheduled payments; (ii) voluntary prepayments shall be
applied as determined by Borrower, subject to the provisions of Section 1.3(a);
and (iii) mandatory prepayments shall be applied as set forth in Sections 1.3(c)
and 1.3(d). 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 or 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 Administrative Agent shall
have the continuing exclusive right to apply any and all such payments against
the Obligations as Administrative Agent may deem advisable notwithstanding any
previous entry by Administrative Agent in the Loan Account or any other books
and records. In the absence of a specific determination by Administrative Agent
with respect thereto, payments shall be applied to amounts then due and payable
in the following order: (1) to Fees and Administrative Agent's expenses
reimbursable hereunder; (2) to interest on the Swing Line Loan; (3) to principal
payments on the Swing Line Loan; (4) to interest on the other Loans, ratably in
proportion to the interest accrued as to each Loan; (5) to principal payments on
the other 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 other
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Loans and outstanding Letter of Credit Obligations; and (6) to all other
Obligations including expenses of Lenders to the extent reimbursable under
Section 11.3.
(b) Administrative 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 aggregate
balance of the Revolving Loan and the Swing Line Loan to exceed Borrowing
Availability. At Administrative 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. Administrative 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
Administrative Agent's customary accounting practices as in effect from time to
time. The balance in the Loan Account, as recorded on Administrative Agent's
most recent printout or other written statement, shall, absent manifest error,
be presumptive evidence of the amounts due and owing to Agents 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.
Administrative Agent shall render to Borrower a monthly accounting of
transactions with respect to the Loans setting forth the balance of the Loan
Account. Unless Borrower notifies Administrative 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 Agents, 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
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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 (other than those
solely among Lenders and/or Agents) (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; and provided, further, that
notwithstanding the foregoing, if the Closing Date does not occur, only
Acquisition Co. and, as set forth in Section 11.1, Chartwell, shall be liable
for any indemnification to an Indemnified Person pursuant to this Section 1.13.
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 or interest on 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 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 (including loss of
margin) or expense arising from the reemployment of funds obtained by it or from
fees payable to terminate deposits from which such funds were obtained. In the
case of a LIBOR Loan, the loss to any Lender attributable to any such event
shall be deemed to include an amount determined by such Lender to be equal to
the excess, if any, of (i) the amount of interest that such Lender would pay for
a deposit equal to the principal amount of such Loan for the period from the
date of such payment, conversion, failure or assignment to the last day of the
then current LIBOR Period for such Loan (or, in the case of a failure to borrow,
convert or continue, the duration of the Interest Period that would have
resulted from such borrowing, conversion or continuation) if the interest rate
payable on such deposit were equal to the LIBOR Rate for such LIBOR Period, over
(ii) the amount of interest that such Lender would earn on such principal amount
for such period if such Lender were to invest such principal amount for such
period at the interest rate that would be bid by such Lender (or an affiliate of
such Lender) for Dollar deposits from other banks in the eurodollar market at
the commencement of such period. 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
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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 one (1) Business Day's prior
notice as frequently as Administrative Agent determines to be appropriate: (a)
provide Administrative 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 Administrative
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
Administrative 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 the Administrative Agent,
each such Credit Party shall provide such access to Administrative 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
Administrative Agent and each Lender with access to its suppliers and customers.
Each Credit Party shall make available to Administrative Agent and its counsel,
as quickly as is possible under the circumstances, originals or copies of all
books and records which Administrative Agent may request. Each Credit Party
shall deliver any document or instrument necessary for Administrative 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. Administrative Agent will give Lenders at
least ten (10) days' prior written notice of regularly scheduled audits.
Representatives of other Lenders may accompany Administrative 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 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)
Administrative 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.
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Within thirty (30) days after the date of any payment of Taxes, Borrower shall
furnish to Administrative Agent the original or a certified copy of a receipt
evidencing payment thereof.
(b) Each Credit Party that is a signatory hereto shall indemnify and,
within ten (10) days of demand therefor, pay Administrative 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 Administrative
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 Administrative
Agent a properly completed and executed IRS Form 4224 or Form 1001 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
Administrative 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.
(d) If any Lender shall become aware that it is entitled to receive a
refund or credit (such credit to include any increase in any foreign tax credit)
as a result of indemnified Taxes (including any penalties or interest with
respect thereto) as to which it has been indemnified by Borrower pursuant to
this Section 1.15, it shall promptly notify Borrower of the availability of such
refund or credit and shall, within 30 days after receipt of a request by the
Borrower, apply for such refund or credit at Borrower's expense, and in the case
of any application for such refund or credit by Borrower, shall, if legally able
to do so, deliver to Borrower such certificates, forms or other documentation as
may be reasonably necessary to assist Borrower in such application. If any
Lender receives a refund or credit (such credit to include any increase in any
foreign tax credit) in respect to any indemnified Taxes as to which it has been
indemnified by Borrower pursuant to this Section 1.15, it shall promptly notify
Borrower of such refund or credit and shall, within 30 days after receipt of
such refund or the benefit of such credit (such benefit to include any reduction
of the taxes for which any Lender would otherwise be liable due to any increase
in any foreign tax credit available to such Lender), repay the amount of such
refund or benefit of such credit (with respect to the credit, as determined by
the Lender in its sole judgment) to Borrower to the extent of amounts that have
been paid by Borrower under this Section 1.15 with respect to indemnified Taxes
giving rise to such refund or credit), plus any interest received with respect
thereto, net of all reasonable out-of-pocket expenses of such Lender and without
interest (other than interest actually received from the relevant taxing
authority or other Governmental Authority with respect to such refund or
credit); provided, however, that the Borrower, upon the request of such Lender,
agrees to return the amount of such refund or benefit of such credit (plus
interest) to such Lender in the event such Lender is required to repay the
amount of such refund or benefit of such credit to the relevant taxing authority
or other Governmental Authority.
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1.16. Capital Adequacy; Increased Costs; Illegality.
(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 Administrative Agent) pay to Administrative 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
Administrative 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 Administrative Agent), pay to Administrative 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 Administrative 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
Administrative 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 to
such Lender, together with interest accrued thereon, unless 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.
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(d) Replacement of Lender in Respect of Increased Costs. 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 Administrative 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 Administrative
Agent, which shall not be unreasonably withheld, may obtain, at Borrower's
expense, a replacement Lender ("Replacement Lender") for the Affected Lender,
which Replacement Lender must be reasonably satisfactory to Administrative
Agent. If Borrower obtains a Replacement Lender within ninety (90) days
following notice of its 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 does not so replace such
Affected Lender within ninety (90) days thereafter, Borrower's rights under this
Section 1.16(d) with respect to such Affected Lender 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) Failure or delay on the part of any Lender to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender's right to
demand such compensation; provided, that the Borrower shall not be required to
compensate a Lender (or such Lender's holding company) pursuant to this Section
for any increased costs or reductions incurred more than two hundred and seventy
(270) days prior to the date that such Lender notifies the Borrower of the
change in law or regulation (or change in interpretation thereof) giving rise to
such increased costs or reductions and of such Lender's intention to claim
compensation thereof; provided, further, that, if the change in law giving rise
to such increased costs or reductions is retroactive, then the 270-day period
referred to above shall be extended to include the period of retroactive effect
thereof.
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 the Collateral.
2. CONDITIONS PRECEDENT
2.1. Conditions to the Initial Loans.
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
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the following conditions have been satisfied or provided for in a manner
satisfactory to Administrative Agent, or waived in writing by Administrative
Agent and Lenders:
(a) Credit Agreement; Loan Documents. This Agreement or counterparts
hereof shall have been duly executed by, and delivered to, Borrower, each Credit
Party, Agents and Lenders; and Administrative Agent shall have received such
documents, instruments, agreements and legal opinions as Administrative 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 Administrative Agent.
(b) Repayment of Prior Lender Obligations; Satisfaction of Outstanding
L/Cs. (i) Administrative Agent shall have received a fully executed original of
a pay-off letter satisfactory to Administrative Agent confirming that all of the
Prior Lender Obligations will be repaid in full from the proceeds of the Term
Loans and the initial Revolving Credit Advance and all Liens upon any of the
property of Borrower or any other Credit Party in favor of Prior Lender shall be
terminated by Prior Lender immediately upon such payment, except no more than
$600,000 in Prior Lender Obligations under the 10% Convertible Subordinated
Debentures due 2004 issued by Holdings, which shall be paid in full within 60
days after the Closing Date; and (ii) all letters of credit issued or guaranteed
by Prior Lender shall have been cash collateralized, supported by a guaranty of
Administrative Agent or supported by a Letter of Credit issued pursuant to Annex
B, as mutually agreed upon by Administrative Agent, Borrower and Prior Lender.
(c) Approvals. Administrative Agent shall have received (i)
satisfactory evidence that the Credit Parties have obtained all required
material waivers, 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 Administrative Agent affirming that no such waivers, consents or approvals
are required.
(d) Opening Availability. The Eligible Accounts and Eligible Inventory
of Borrower supporting the initial Revolving Credit Advance and the initial
Letter of Credit Obligations incurred and the amount of the Reserves to be
established on the Closing Date shall be sufficient in value, as determined by
Administrative Agent, to provide Borrower with Net Borrowing Availability, after
giving effect to the initial Revolving Credit Advance, the incurrence of any
initial Letter of Credit Obligations and the consummation of the Related
Transactions (on a pro forma basis, with trade payables being paid currently,
and expenses and liabilities being paid in the ordinary course of business and
without acceleration of sales and deterioration of working capital) of an amount
acceptable to Administrative Agent.
(e) 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
(including the Fees specified in the GE Capital Fee Letter), and shall have
contemporaneously reimbursed Agents for all fees, costs and expenses of closing
presented as of the Closing Date.
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(f) Capital Structure; Other Indebtedness. The capital structure of
each Credit Party and the terms and conditions of all Indebtedness of each
Credit Party shall be acceptable to Administrative Agent in its sole discretion,
it being understood that the form of the Subordinated Notes, dated the date
hereof, is acceptable to Administrative Agent.
(g) Consummation of Related Transactions. Administrative Agent shall
have received fully executed copies of the Acquisition Agreement and each of the
other Related Transactions Documents, each of which shall be in form and
substance satisfactory to Administrative Agent and its counsel, it being
understood that the forms of the Acquisition Agreement and any other Transaction
Documents, each dated the date hereof, are acceptable to Administrative Agent.
The Acquisition and the other Related Transactions (other than the Merger) shall
have been consummated or be contemporaneously consummated on the Closing Date in
accordance with the terms of the Acquisition Agreement and the other Related
Transactions Documents and without waiver of any conditions unless consented to
by the Administrative Agent. On terms acceptable to Administrative Agent, the
Permitted Holders shall have contributed at least $70,000,000 in equity to
Acquisition Co. and on the Closing Date, Acquisition Co. shall purchase from the
principal shareholders of Holdings for (or otherwise made a capital contribution
to Merger Co. in an amount of) at least $70,000,000, and Borrower shall have
issued the Subordinated Debt.
(h) Credit Ratings. Each of the Loans hereunder shall have been rated
by a nationally recognized rating agency acceptable to Administrative Agent.
(i) Market Conditions. Since January 14, 2000, there shall have been
no material change in loan syndication, financial or capital market conditions
in general that, in the judgment of Administrative Agent, or GECC Capital
Markets Group, Inc., would impair the syndication of the Loans hereunder.
(j) Closing Date. The Closing Date shall have occurred on or prior to
May 30, 2000.
(k) Leverage Ratios. As of March 31, 2000, but after giving pro forma
effect to the transactions contemplated by the Loan Documents, Borrower shall
have a Leverage Ratio for the 12-month period then ended of not more than
4.60:1.0 and a Senior Leverage Ratio for such period of not more than 3.60:1.0.
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 in any
material respect (except for representations or warranties subject to a
materiality or Material Adverse Effect exception, which shall be true and
correct in all respects) 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
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(b) Any event or circumstance having a Material Adverse Effect shall
have occurred since the date hereof; 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 Administrative 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), the outstanding principal amount of the Revolving
Loan would exceed the lesser of the Borrowing Base and the Maximum Amount, less,
in each case, the then outstanding principal amount of the Swing Line Loan; or
(e) After giving effect to any Swing Line Advance, the outstanding
principal amount of the Swing Line Loan would exceed Swing Line Availability.
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 Administrative Agent's Liens, on behalf of itself, Documentation Agent 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 each 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 Existence; Compliance with Law. Each Credit Party (a)
is a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation; (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 a Material
Adverse Effect; (c) has the requisite corporate 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 where the
failure to 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; and (f) subject to specific representations set forth
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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 except as set forth on
such Disclosure Schedule (3.2), 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 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 corporate power; (b) have been duly authorized by all
necessary or proper corporate and shareholder action; (c) do not contravene any
provision of such Person's charter or bylaws; (d) do not violate any law or
regulation, or any order or decree of any court or Governmental Authority; (e)
except consents which have been obtained and except for Prior Lender Obligations
to be paid on or prior to the Closing Date, 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, mortgage, deed
of trust, lease, 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 Administrative Agent, on behalf of itself,
Documentation Agent 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(c), all of which will have been
duly obtained, made or complied with prior to the Closing Date, and except for
Prior Lender Obligations to be paid on or 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 unaudited consolidating balance
sheets at December 31, 1999 and the related statements of income and cash
flows of Holdings and its Subsidiaries for the Fiscal Year then ended,
certified (as to the consolidated statements) by Ernst & Young LLP.
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(ii) The unaudited balance sheets at March 31, 2000 and the
related statements of income and cash flows of Holdings and its
Subsidiaries for the Fiscal Quarters then ended.
(iii) The unaudited balance sheets at the last day of each month
from January 2000 through the Closing Date and the related statements of
income and cash flows of Holdings and its Subsidiaries for the Fiscal
Months then ended.
(b) Pro Forma. The Pro Forma delivered on the date hereof and attached
hereto as Disclosure Schedule (3.4(B)) was prepared by Borrower giving pro forma
effect to the Related Transactions, was based on the unaudited consolidated and
consolidating balance sheets of Holdings and its Subsidiaries dated March 31,
2000, and was prepared in accordance with GAAP, with only such adjustments
thereto as would be required in accordance with GAAP, provided that such Pro
Forma is updated immediately prior to the Closing Date and is acceptable to
Administrative Agent.
(c) Projections. The Projections delivered on the date hereof and
attached hereto as Disclosure Schedule (3.4(C)) have been prepared by Borrower
in light of the past operations of its businesses, but including future payments
of known material contingent liabilities, and reflect projections on a month by
month basis through 2001 and on a year by year basis thereafter. 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 the future financial performance of Borrower
and of the other information projected therein for the period set forth therein;
provided that, with respect to projected financial information, the Credit
Parties represent only that such information was prepared in good faith based
upon assumptions believed to be reasonable at the time. Any forward looking
statements contained therein are inherently subject to risk and uncertainties,
many of which cannot be predicted with accuracy, and some of which might not be
anticipated. Future events and actual results, financial and otherwise, could
differ materially from those set forth therein or contemplated by the forward
looking statements contained therein.
(d) EBITDA Adjustments. The schedule of adjustments to EBITDA of
Borrower delivered on the date hereof and attached hereto as Disclosure Schedule
(A-EBITDA) and the adjustments referred to therein have been prepared by
Borrower to adjust EBITDA to reflect normalized EBITDA of Borrower.
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3.5. Material Adverse Effect. Between December 31, 1999 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 and there has been no decrease in the assets of
the Credit Parties, which are not reflected in the Pro Forma and 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, (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, and (d) no event has occurred, which alone or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
Between December 31, 1999 and the Closing Date no event, including, without
limitation, the commencement of any Litigation, 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 Administrative Agent have
been delivered to Administrative Agent. Disclosure Schedule (3.6) further
describes any Real Estate with respect to which any Credit Party is a lessor or
sublessor 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 Liens being
released on the Closing Date, 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, Liens
equal and ratable to the Subordinated Debt (to the extent permitted by the
Subordinated Notes), and Liens being released on the Closing Date. Each Credit
Party has received all deeds, assignments, waivers, consents, 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, except
where the failure to do so, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect. Disclosure Schedule
(3.6) also describes any purchase options, rights of first refusal or other
similar contractual rights to acquire a fee simple interest in real property
pertaining to any Real Estate. Except as set forth in Disclosure Schedule (3.6),
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. All 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, except where the failure to do
so, individually or in the
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aggregate, would not reasonably be expected to have a Material Adverse Effect.
The Liens granted to Administrative Agent, on behalf of itself, Documentation
Agent 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.
3.7. 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 or any management agreement, consulting
agreement or employment agreement involving annual payment in excess of $100,000
(and true and complete copies of any agreements described on Disclosure Schedule
(3.7) have been delivered to Administrative 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
is engaged in any joint venture or partnership with any other Person or is an
Affiliate of any other Person or, as of the Closing Date, has any Subsidiaries.
All of the issued and outstanding Stock of each Credit Party other than Holdings
prior to the Merger is owned of record by each of the stockholders and in the
amounts set forth on Disclosure Schedule (3.8). Except as set forth in
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)). Holdings does
not have any assets (except Stock of Borrower), cash or cash equivalents of more
than $250,000 (and other than cash on hand required to be used to pay expenses
due within ninety (90) days) nor any Indebtedness or Guaranteed Indebtedness
(except the Obligations and the Subordinated Debt) other than Indebtedness
permitted by Section 6.3.
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
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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"). Except as set forth on Disclosure Schedule 3.10,
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 to be filed by any
Credit Party have been filed with the appropriate Governmental Authority 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). Proper and
accurate amounts have been withheld by each Credit Party from its respective
employees 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)
lists those tax returns since 1996 that have been audited, and indicates those
tax returns that are currently the subject of audit and any assessments or
threatened assessments in connection with such audit, or otherwise currently
outstanding. Except as described on Disclosure Schedule (3.11) as of the Closing
Date, 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 and their respective predecessors are liable for any
Charges: (a) under any agreement (including any tax sharing agreements) 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. The pro forma Financial Statements
delivered pursuant to Section 3.4 reflect all estimated Taxes resulting from
transactions contemplated by the Related Transactions Documents.
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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 Administrative 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 Plan, Multiemployer Plan or Title IV 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"), (a) 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 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 (except Xxxxxxxxx, Xxxxxx &
Xxxxxxxx Securities Corporation and Chartwell Investments II, L.L.C. in
connection with the Acquisition) 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 other Person in respect of any
finder's or brokerage fees in connection therewith.
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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, and each Patent, Trademark,
Copyright and License is listed, together with application or registration
numbers, as applicable, in Disclosure Schedule (3.15) hereto. All of the
foregoing are in full force and effect, and each of the Credit Parties is in
substantial compliance with the foregoing without any known conflict with the
valid rights of others which has resulted, or creates a risk of resulting, in
any Material Adverse Effect. No event has occurred which permits, or after
notice or lapse of time or both would permit the revocation or termination of
any such license, franchise or other right or which affects the rights of any of
the Credit Parties thereunder so as to result, or to create a risk of resulting,
in any Material Adverse Effect. No litigation or other proceeding or dispute
exists with respect to the validity or, where applicable, the extension or
renewal, of any of the foregoing which has resulted, or creates a risk of
resulting, in any Material Adverse Effect.
3.16. Full Disclosure. No information contained in this Agreement, any
of the other Loan Documents, any 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; provided that, with respect to
projected financial information, the Credit Parties represent only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time. Any forward looking statements contained therein are
inherently subject to risk and uncertainties, many of which cannot be predicted
with accuracy, and some of which might not be anticipated. Future events and
actual results, financial or otherwise, could differ materially from those set
forth therein or contemplated by the forward looking statements contained
therein.
3.17. Environmental Matters.
(a) Except as set forth in Disclosure Schedule (3.17), as of the
Closing Date: (i) the Real Estate is free of contamination from any Hazardous
Material except for such contamination that would not adversely impact the value
or marketability of such Real Estate and which would not result in Environmental
Liabilities which could reasonably be expected to have a Material Adverse
Effect; (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 have a Material
Adverse Effect; (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 have a Material Adverse Effect, 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
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Liabilities of such Credit Party which could reasonably be expected to have a
Material Adverse Effect, 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 $25,000 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 Administrative 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
Administrative 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. [Intentionally omitted.]
3.21. Customer and Trade Relations. Except as set forth in Disclosure
Schedule (3.21), 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 material to its operations.
3.22. Agreements and Other Documents. (a) As of the Closing Date, each
Credit Party has provided to Administrative 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
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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; any agreement (or group of related agreements)
under which such Credit Party has created, incurred, assumed, or guaranteed any
Indebtedness in excess of $100,000, including any Capital Lease Obligation, or
under which it has imposed a Lien on any of its assets, tangible or intangible;
and instruments and agreements evidencing the issuance of any equity securities,
warrants, rights or options to purchase equity securities of such Credit Party.
(b) Except as set forth in Disclosure Schedule (3.22), the Credit
Parties hold all material permits and licenses from all Governmental Authorities
that are necessary for the operation of their businesses. Except as set forth in
Disclosure Schedule (3.22), the Credit Parties are in substantial compliance
with the terms of such permits and licenses.
3.23. Solvency. Both before and after giving effect to (a) 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, (c) the Acquisition, the Refinancing
and the consummation of the other Related Transactions and (d) the payment and
accrual of all transaction costs in connection with the foregoing, each Credit
Party is Solvent.
3.24. Year 2000 Problems. Each Credit Party has eliminated all Year
2000 Problems, except where the failure to correct the same could not reasonably
be expected to have a Material Adverse Effect, individually or in the aggregate.
3.25. Acquisition Agreement. As of the Closing Date, Borrower has
delivered to Administrative Agent a complete and correct copy of the Acquisition
Agreement (including all schedules, exhibits, amendments, supplements,
modifications, assignments and all other documents delivered pursuant thereto or
in connection therewith). The total consideration paid in connection with the
Acquisition and Refinancing does not exceed an amount acceptable to
Administrative Agent and inclusive of the fees payable to Xxxxxxxxx Lufkin &
Xxxxxxxx Securities Corporation referred to in Section 3.14 and aggregate fees
and closing costs in connection therewith (including rating agency fees and
those fees and expenses payable to Agents and Lenders) do not exceed an amount
acceptable to Administrative Agent and inclusive of the fees payable to
Chartwell Investments II, L.L.C. referred to in Section 3.14. No Credit Party
and no other Person party thereto is in default in the performance or compliance
with any provisions thereof. The Acquisition Agreement complies with, and the
Acquisition has been consummated in accordance with, all applicable laws. The
Acquisition Agreement is in full force and effect as of the Closing Date, has
not been terminated, rescinded or withdrawn. All requisite approvals by
Governmental Authorities having jurisdiction over any party thereto, any Credit
Party and other Persons referenced therein, with respect to the transactions
contemplated by the Acquisition Agreement, have been obtained, and no such
approvals impose any conditions to the consummation of the transactions
contemplated by the Acquisition Agreement or to the conduct by any Credit Party
of its business thereafter. Each of the representations and warranties
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in, and given by each party to the Acquisition Agreement is true and correct in
all material respects.
3.26. Status of Acquisition Co. and Merger Co. Prior to the date of
the consummation of the Merger, each of Acquisition Co. and Merger Co. will not
have engaged in any business or incurred any Indebtedness or any liabilities
(except in connection with its corporate formation and the Related Transactions
Documents).
3.27. Subordinated Debt. As of the Closing Date, Borrower has
delivered to Administrative Agent a complete and correct copy of the
Subordinated Notes (including all schedules, exhibits, amendments, supplements,
modifications, assignments and all other documents delivered pursuant thereto or
in connection therewith). Borrower has the corporate power and authority to
incur the Indebtedness evidenced by the Subordinated Notes. The subordination
provisions of the Subordinated Notes are enforceable against the holders of the
Subordinated Notes by Agents and Lenders. All Obligations, including the
Obligations to pay principal of and interest on the Loans and the Letter of
Credit Obligations, constitute senior Indebtedness entitled to the benefits of
the subordination provisions contained in the Subordinated Notes. The principal
of and interest on the Notes, all Letter of Credit Obligations and all other
Obligations will constitute "senior debt" as that or any similar term is or may
be used in any other instrument evidencing or applicable to any other
Subordinated Debt. Borrower acknowledges that each Agent and each Lender are
entering into this Agreement and are extending the Commitments in reliance upon
the subordination provisions of the Subordinated Notes and this Section 3.27.
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
Administrative Agent, Documentation 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
Administrative Agent, Documentation Agent and/or Lenders, as required, the
various Collateral Reports (including Borrowing Base Certificates in the form of
Exhibit 4.1(b)) 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 Administrative 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 Ernst &
Young LLP, and authorizes and shall instruct those accountants and advisors to
disclose and make available to Administrative Agent and each Lender any and all
Financial Statements and other supporting financial documents, schedules
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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 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 existence (except as permitted by Section
6.1) and its rights and franchises material to the conduct of the business of
Borrower and its Subsidiaries taken as a whole, except to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect; continue to conduct its business substantially as now conducted or as
otherwise permitted hereunder; at all times maintain, preserve and protect all
of its 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 corporate and trade names as are set forth in
Disclosure Schedule (5.1), as the same may be supplemented from time to time by
30 days' advance written notice to Administrative Agent.
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, before
any thereof shall become past due.
(b) Each Credit Party may in good faith contest, by appropriate
proceedings, the validity or amount of any Charges or claims 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 (other than Permitted Encumbrances) shall be imposed to
secure payment of such Charges that is superior to any of the Liens securing
payment of 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
Administrative Agent evidence acceptable to Administrative 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) Administrative Agent has not advised Borrower
in writing that Administrative Agent reasonably believes that nonpayment or
nondischarge thereof could have or result in a Material Adverse Effect.
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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 substantially similar to
such policies in effect on the date hereof and with insurers with an A.M. Best
rating of A- or better. The Credit Parties shall provide thirty (30) days
advance notice to Administrative Agent of any non-renewal, cancellation or
amendment of such policies of insurance. 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, Administrative
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 Administrative Agent deems advisable. Administrative Agent shall have no
obligation to obtain insurance for any Credit Party or pay any premiums
therefor. By doing so, Administrative 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 Administrative Agent and shall be additional
Obligations hereunder secured by the Collateral.
(b) Administrative 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
Administrative Agent's opinion, adequately protect both Agents' and Lenders'
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 requested by Administrative Agent, each Credit Party shall deliver
to Administrative Agent from time to time a report of a reputable insurance
broker, satisfactory to Administrative Agent, with respect to its insurance
policies.
(c) Each Credit Party shall deliver to Administrative Agent, in form
and substance satisfactory to Administrative Agent, endorsements to (i) all "All
Risk" and business interruption insurance naming Administrative Agent, on behalf
of itself and Lenders, as additional loss payee, and (ii) all general liability
and other liability policies naming Administrative Agent, on behalf of itself
and Lenders, as additional insured. Each Credit Party irrevocably makes,
constitutes and appoints Administrative Agent (and all officers, employees or
agents designated by Administrative Agent), so long as any Default or Event of
Default shall have occurred and be continuing or the anticipated insurance
proceeds exceed $500,000, as each Credit Party'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 each Credit Party
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"
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policies of insurance. Administrative 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 Administrative Agent of any loss, damage, or
destruction to the Collateral in the amount of $500,000 or more, whether or not
covered by insurance. After deducting from such proceeds the expenses, if any,
incurred by Administrative Agent in the collection or handling thereof,
Administrative 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 other than Borrower, such
insurance proceeds shall be applied to the Loans owing by Borrower, or permit or
require each Credit Party 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
$5,000,000 in the aggregate, Administrative Agent shall permit the applicable
Credit Party to replace, restore, repair or rebuild the property; provided that
if such Credit Party has not completed or entered into binding agreements to
complete such replacement, restoration, repair or rebuilding within 360 days of
such casualty, Administrative 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 other than Borrower, such
insurance proceeds shall be applied to 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 Administrative
Agent to reduce the outstanding principal balance of the Revolving Loan (which
application shall not result in a permanent reduction of the Revolving Loan
Commitment) and upon such application, Administrative Agent shall establish a
Reserve against the 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 such Credit Party to provide funds to replace, repair, restore or
rebuild the Collateral as follows: (i) Borrower shall request a Revolving Credit
Advance or release from the cash collateral account be made to such Credit Party
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 Administrative 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 other than
Borrower, such insurance proceeds shall be applied to the Loans owing by
Borrower.
5.5. Compliance with Laws. Each Credit Party shall comply with all
federal, state, local and foreign laws and regulations applicable to it,
including, without limitation, 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.
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5.6. Supplemental Disclosure. From time to time as may be requested by
Administrative 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 Administrative 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 infringement of or interference with any
Intellectual Property of any other Person in any material respect.
5.8. Environmental Matters. Each Credit Party shall and shall cause
each Person within its control to: (a) 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; (b) 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; (c) notify Administrative 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 having a Material Adverse Effect; and (d) promptly forward to
Administrative 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 having a Material Adverse Effect 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 Administrative 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
Administrative 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
Administrative Agent may from time to time
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reasonably request, which shall be conducted by reputable environmental
consulting firms reasonably acceptable to Administrative Agent and shall be in
form and substance acceptable to Administrative Agent, and (ii) permit
Administrative Agent or its representatives to have access to all Real Estate
for the purpose of conducting such environmental audits and testing as
Administrative Agent deems appropriate, including subsurface sampling of soil
and groundwater. Borrower shall reimburse Administrative Agent for the costs of
such audits and tests and the same will constitute a part of the Obligations
secured hereunder.
5.9. Landlords' Agreements, Mortgagee Agreements and Bailee Letters.
Borrower shall use commercially best efforts (excluding the obligation to
litigate or to pay additional consideration) to obtain a landlord's agreement,
mortgagee agreement or bailee letter, (a "Lien Waiver"), as applicable, from,
landlord 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, if under applicable law, the Lien to be subordinated or
waived by such landlord or mortgagee, as applicable, would otherwise have
priority over the Liens granted to the Lenders under this Credit Agreement (a
"Required Borrower Lien Waiver"). Heartland shall use commercially best efforts
(excluding the obligation to litigate or to pay additional consideration) to
obtain a Lien Waiver from the landlords of the ten (10) leased warehouse,
processor or converter facilities containing the highest dollar value of
Collateral held by Heartland as of the date of this Credit Agreement, if under
applicable law, the Lien to be subordinated or waived by such landlord would
otherwise have priority over the Liens granted to the Lenders under this Credit
Agreement (a "Required Heartland Lien Waiver"). Each Lien Waiver 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 reasonably satisfactory in form and substance to
Administrative Agent. With respect to such locations or warehouse space leased
or owned as of the Closing Date and thereafter, if Administrative Agent has not
received a Required Borrower Lien Waiver or Required Heartland Lien Waiver as of
the Closing Date (or, if later, as of the date such location is acquired or
leased), an amount equal to 300% of the then current monthly rental for such
leased location (or 300% of the then current monthly mortgage payment, with
respect to owned locations) shall, in Administrative Agent's sole discretion, be
excluded from the Borrowing Base or be subject to such Reserves as may be
established by Administrative Agent in its reasonable credit judgment. After the
Closing Date, Heartland shall use commercially best efforts (excluding the
obligation to litigate or to pay additional consideration) to deliver Lien
Waivers with respect to any new leased facilities if the dollar value of the
Collateral located on such facility would exceed the dollar value of the
Collateral located on the tenth (10th) most valuable (by dollar value of
Collateral) leased site for which Heartland must deliver a Required Heartland
Lien Waiver, and where the failure to deliver such Lien Waiver would result in
the landlord of such leased site having a Lien superior to that granted the
Lenders under this Credit Agreement. After the Closing Date, no real property or
warehouse space shall be leased or acquired by Borrower and no Inventory shall
be shipped to a processor or converter under arrangements established by
Borrower after the Closing Date without the prior written consent of
Administrative Agent (which consent, in Administrative Agent's sole discretion,
may be conditioned upon the exclusion from the Borrowing Base of Eligible
Inventory at that location or the establishment of Reserves acceptable to
Administrative Agent) or, unless and until a satisfactory Lien Waiver shall
first have been obtained with respect
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to such location, provided, however, that no such Lien Waiver will be required
unless the failure to deliver such Lien Waiver would result in the landlord of
such leased site having a Lien superior to that granted the Lenders under this
Credit Agreement. 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. 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 Administrative Agent, duly execute and
deliver, or cause to be duly executed and delivered, to Administrative 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 Administrative Agent to carry
out more effectively the provisions and purposes of this Agreement or any other
Loan Document.
5.11. ERISA Event. Each Credit Party shall, or shall cause (to the
extent it has such ability) an ERISA Affiliate to, notify the Administrative
Agent promptly, but in no event later than 10 days, following the occurrence of
any ERISA Event of the details of such ERISA Event and the course of action
which such Credit Party or ERISA Affiliate intends to take to correct such ERISA
Event.
5.12. Interest Hedging Obligations. Within sixty (60) days after the
Closing Date, Borrower shall enter into or utilize existing agreements with one
or more Lenders (or any Affiliate of any Lender) for Interest Hedge Obligations
in respect of fifty percent (50%) of the principal amount of the Term Loans
outstanding on terms and conditions acceptable to Administrative Agent.
5.13. Lender Meeting. Borrower shall participate in a meeting of the
Lenders once during each Fiscal Year (commencing with the Fiscal Year ending
December 31, 2001) to be held at a location and a time selected by
Administrative Agent and reasonably acceptable to Borrower, provided, however,
that Administrative Agent may require a reasonable number of additional meetings
if any condition or event constituting a Default or Event of Default has
occurred and is continuing.
5.14. Subsidiary Collateral Documents. If a Credit Party creates or
acquires a Subsidiary permitted under this Agreement, the Borrower shall cause
each such Subsidiary to execute and deliver to Administrative Agent, documents
in form and substance satisfactory to the Administrative Agent pursuant to which
such Subsidiary becomes a party to the Collateral Documents and its Stock is
pledged pursuant to the Pledge Agreement.
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
Administrative Agent and the Requisite Lenders, from and after the date hereof
until the Termination Date:
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6.1. Mergers, Subsidiaries, Etc.
No Credit Party shall directly or indirectly, by operation of law or
otherwise, unless the same shall constitute a Designated Acquisition, (a) form
or acquire any Subsidiary, except as permitted by Section 6.2, or (b) merge with
(except for the Merger and the merger of any Subsidiary of Borrower with and
into Borrower or a Credit Party other than Holdings) or consolidate with,
acquire all or substantially all of the assets or capital stock of, or otherwise
combine with or acquire, any Person or any division of 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:
(a) so long as Administrative Agent has not delivered an Activation
Notice and subject to Control Letters in favor of Administrative Agent for the
benefit of Documentation Agent and Lenders or otherwise subject to a perfected
security interest in favor of Administrative Agent for the benefit of itself,
Documentation Agent and Lenders, investments by Holdings, Borrower or any of its
Subsidiaries in cash and cash equivalents, consisting of:
(i) marketable direct obligations issued or unconditionally
guaranteed by the United States of America or any agency thereof maturing
within one year from the date of acquisition thereof;
(ii) commercial paper maturing no more than one year from the
date of creation thereof and currently having the highest rating obtainable
from either Standard & Poor's Ratings Group or Xxxxx'x Investors Service,
Inc.;
(iii) certificates of deposit, bankers acceptances, time
deposits, Eurocurrency deposits and similar types of investments routinely
offered by commercial banks with final maturities of one year or less
issued by commercial banks organized in the United States, or foreign
branches thereof, having capital and surplus in excess of $300,000,000 or
any commercial bank of any other country that is a member of the
Organization for Economic Cooperation and Development ("OECD") and has
total assets in excess of $300,000,000;
(iv) foreign bank deposits and cash equivalents in jurisdictions
where Holdings or its Subsidiaries are then actively conducting business
provided that (A) all such deposits are required to be made in the ordinary
course of business, (B) such deposits do not exceed $500,000 in the
aggregate and (C) the funds so deposited do not remain in such bank for
more than 30 days; and
(v) repurchase obligations for obligations described in (i) with
any bank meeting the qualifications specified in clause (iii) above;
(b) receivables owing to them and advances (including deposits) to
customers and suppliers, in each case if created, acquired or made in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms;
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(c) investments (including debt obligations) received in connection
with the bankruptcy or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other disputes with, customers and
suppliers arising in the ordinary course of business or upon foreclosure of any
Lien in favor of the Borrower or its Subsidiaries;
(d) to the extent permitted by Section 6.4, investments made by a
Credit Party in existing Subsidiaries (other than Swing-N-Slide FSC, Ltd.) or by
a Subsidiary in a Credit Party or in one or more Subsidiaries;
(e) the acceptance of a form of consideration other than that
specified in clause (a) above in connection with the sale or disposition of
assets to the extent permitted by Section 6.8;
(f) guarantees permitted by Section 6.6;
(g) investments permitted by Section 6.14;
(h) Interest Hedge Obligations and Commodity Hedge Obligations to the
extent permitted by Section 6.3.
(i) investments contemplated by the Related Transaction Documents;
(j) investments which the Borrower and its Subsidiaries are
contractually committed to make pursuant to contracts existing on the Closing
Date as set forth on Disclosure Schedule (6.2(j));
(k) investments in prepaid expenses, negotiable instruments held for
collection and workers' compensation, utility, lease and similar deposits in the
ordinary course of business;
(l) Designated Acquisitions;
(m) loans or advances to officers and employees of Borrower and its
Subsidiaries permitted by Section 6.4; and
(n) additional loans, advances and/or investments of a nature not
contemplated by the foregoing clauses (a) through (m); provided that (x) all
loans, advances and investments made pursuant to this clause (l) shall not
exceed $1,000,000 in any Fiscal Year and $3,000,000 in the aggregate at any time
outstanding during the term of this Agreement and (y) all such loans, advances
and investments are subject to a perfected security interest in favor of
Administrative Agent for the benefit of itself, Documentation Agent and Lenders.
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
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liabilities to the extent they are permitted to remain unfunded under applicable
law, (iv) existing Indebtedness described in Disclosure Schedule (6.3) and the
Subordinated Debt and refinancings thereof or amendments or modifications
thereof which do not have the effect of increasing the principal amount thereof
(except for prepayment penalties and costs and expenses of the refinancings) 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,
Administrative Agent, Documentation Agent or any Lender, as determined by
Administrative Agent, than the terms of the Indebtedness being refinanced,
amended or modified, (v) Indebtedness consisting of intercompany loans and
advances made by Borrower to any other Credit Party that is a Guarantor or by
any such Guarantor to Borrower or another Guarantor; provided that (A) Borrower
shall have executed and delivered to each such Guarantor, and each such
Guarantor shall have executed and delivered to Borrower, on the Closing Date, a
demand note (collectively, the "Intercompany Notes") to evidence any such
intercompany Indebtedness owing at any time by Borrower to such Guarantor or by
such Guarantor to Borrower, which Intercompany Notes shall be in form and
substance satisfactory to Administrative Agent and shall be pledged and
delivered to Administrative Agent pursuant to the Pledge Agreement or Security
Agreement as additional collateral security for the Obligations; (B) Borrower
shall record all intercompany transactions on its books and records in a manner
satisfactory to Administrative Agent; (C) the obligations of Borrower under any
such Intercompany Notes shall be subordinated to the Obligations of Borrower
hereunder in a manner satisfactory to Administrative Agent; (D) at the time any
such intercompany loan or advance is made by Borrower and after giving effect
thereto, Borrower shall be Solvent; (E) no Default or Event of Default would
occur and be continuing after giving effect to any such proposed intercompany
loan; (F) the aggregate amount of such intercompany loans owing by Holdings to
Borrower shall not exceed $1,000,000 at any one time outstanding; and (G) the
aggregate balance of all such intercompany loans owing by a Subsidiary (other
than Heartland and Swing-N-Slide FSC, Ltd.) of Borrower to Borrower shall not
exceed $1,000,000 at any time and the aggregate balance of all such intercompany
loans owing by Heartland to Borrower shall not exceed $10,000,000 at any time,
(vi) Surety Obligations, (vii) Indebtedness of Borrower under Commodity Hedge
Obligations, (viii) Indebtedness of Borrower under Interest Hedge Obligations
incurred in connection with the Loans, (ix) Guarantees permitted by Section 6.6,
and (x) other unsecured Indebtedness not to exceed $3,000,000 at any one time
outstanding.
(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 secured by a Permitted Encumbrance, and (iii)
other Indebtedness (excluding the Subordinated Debt) not in excess of $500,000.
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 Affiliate thereof that is not a Credit Party 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
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with a Person not an Affiliate of such Credit Party. In addition, if any such
transaction or series of related transactions involves payments in excess of
$2,500,000 in the aggregate, the terms of these transactions must be disclosed
in advance to Administrative Agent and Lenders. All such transactions existing
as of the date hereof are described on Disclosure Schedule (6.4(a)).
(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 in the ordinary course of business for travel expenses,
relocation programs and similar purposes, and other loans to employees and
officers up to a maximum of $750,000 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 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, warrants or other
securities convertible into Stock or any revision of the terms of its
outstanding Stock, except that Holdings may issue additional shares of its Stock
if (i) the proceeds thereof are applied in prepayment of the Obligations to the
extent required by Section 1.3(b)(iii), and (ii) no Change of Control occurs
after giving effect thereto, or (c) amend its charter or bylaws in a manner
which would adversely affect Administrative Agent, Documentation Agent or
Lenders or such Credit Party's duty or ability to repay the Obligations; other
than in each instance (1) director's qualifying shares, (2) sales of Holdings
Stock to acquire assets, businesses or entities that become Subsidiaries to the
extent such acquisition is permitted hereunder, (3) pro rata issuances of Stock
to minority stockholders, and (4) issuance of Stock pursuant to Stock
incentives, purchase and similar plans and employee arrangements. No Credit
Party shall engage in any business other than the businesses currently engaged
in by it or businesses which are complementary or reasonable extensions thereto.
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, including the Subordinated Debt and Surety Obligations.
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); and (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 $3,000,000 outstanding at any one
time for all such Liens (provided that such Liens attach only to the assets,
accessions, improvements and proceeds subject to such purchase money debt and
such Indebtedness is incurred within sixty (60) days following such purchase and
does not exceed 100% of the purchase price of the subject assets or the cost of
construction or improvements). In
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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 Administrative Agent,
on behalf of itself, Documentation Agent and Lenders, as additional collateral
for the Obligations, except for Liens listed in (a) through (c) above and
operating leases, Capital Leases 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 Equipment, Fixtures or Real
Estate that are obsolete or no longer used or useful in such Credit Party's
business having a value not exceeding $1,000,000 in the aggregate in any Fiscal
Year, provided the proceeds thereof are reinvested in the business of the Credit
Parties within 360 days thereafter, and if not so reinvested, shall be applied
as a mandatory prepayment pursuant to Section 1.3(b)(iii), (c) other Equipment
and Fixtures having a value not exceeding $3,000,000 in the aggregate in any
Fiscal Year, provided the proceeds thereof are reinvested in the business of the
Credit Parties within 360 days thereafter, and if not so reinvested, shall be
applied as a mandatory prepayment pursuant to Section 1.3(b)(ii), (d) cash and
cash equivalents, (e) transfers to any Credit Party other than Holdings or (f)
Restricted Payments permitted by Section 6.14. With respect to any disposition
of assets or other properties permitted above, Administrative 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, individually or in the aggregate, to result in a
liability of such Credit Party exceeding $200,000.
6.10. Financial Covenants. The Credit Parties 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.
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6.12. Sale-Leasebacks. No Credit Party shall engage in any
sale-leaseback, synthetic lease or similar transaction involving in excess of
$2,000,000 in respect of any of its assets.
6.13. Cancellation of Indebtedness. No Credit Party shall voluntarily
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) intercompany loans and advances between Borrower and
Guarantors to the extent permitted by Section 6.3 above, (b) (i) dividends and
distributions by Subsidiaries of Borrower paid to Borrower, and (ii) dividends
and distributions by Subsidiaries of Holdings paid to Holdings or its parent
entity up to an aggregate amount of $350,000 per annum to be used for the
payment of ordinary and customary holding company operating expenses and to the
extent necessary, the costs and expenses of effectuating the Related
Transactions, (c) employee loans permitted under Section 6.4(b) above, (d)
payments of management fees ("Management Fee"), during Fiscal Year 2000, of no
greater than $500,000, and during each Fiscal Year beginning in 2001 the greater
of (x) $500,000 or (y) the lesser of (i) 2% of EBITDA of Borrower for such
Fiscal Year or (ii) $1,250,000, and reimbursement of reasonable expenses
pursuant to that certain Management Consulting Agreement in the form delivered
to Administrative Agent by and between Chartwell Investments II L.L.C. and
Borrower, as in effect on the date hereof and containing subordination
provisions acceptable to Administrative Agent and payment of the transaction
fees and expenses pursuant to the Advisory Agreement in the form delivered to
Administrative Agent by and between Chartwell Investments II, L.L.C. and
Borrower, (e) scheduled payments of interest with respect to the Subordinated
Debt, payments of principal with respect to the Subordinated Debt on or after
May 31, 2008, subject however to the subordination provisions therein, and the
payment of transaction fees and expenses pursuant to the Purchase Agreement and
the Exchange and Registration Rights Agreement referred to in the Subordinated
Notes, (f) the repurchase of Stock of Holdings or any indirect or direct parent
company thereof from management personnel who cease to be employees of the
Credit Parties or Acquisition Co. not to exceed $500,000 in any Fiscal Year or
$2,500,000 in the aggregate during the term of this Agreement, (g) the Related
Transactions, (h) payments pursuant to a tax sharing agreement approved by
Administrative Agent, (i) ordinary and customary holding company operating
expenses of Acquisition Co. in the ordinary course of business, and (j)
scheduled payments of interest and principal and required prepayments of
principal with respect to existing Indebtedness which is permitted to remain
outstanding pursuant to Section 6.3(a)(iv), subject however to the subordination
provisions therein, provided that (i) no Default or Event of Default shall have
occurred and be continuing or would result after giving effect to any Management
Fee payment pursuant to clause (d) above and upon the occurrence of such Default
or Event of Default in connection with any payment pursuant to clause (d) above,
the Management Fee obligation may continue to accrue (without interest) and may
be paid when such Default or Event of Default is cured; and (ii) the timing of
the payments referred to in clause (d) above shall be set at dates which permit
the delivery of Financial Statements necessary to determine current compliance
with the financial covenants set forth in Annex G prior to each payment.
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6.15. Change of Corporate Name or Location; Change of Fiscal Year. No
Credit Party shall (a) change its corporate name, or (b) change its chief
executive office, principal place of business, corporate offices or warehouses
or locations at which Collateral (other than movable goods) is held or stored,
or the location of its records concerning the Collateral, in any case without at
least thirty (30) days prior written notice to Administrative Agent and after
Administrative Agent's written acknowledgment that any reasonable action
requested by Administrative Agent in connection therewith, including to continue
the perfection of any Liens in favor of Administrative Agent, on behalf of
itself, Documentation Agent and 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 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
Administrative Agent and Lenders and after Administrative Agent's written
acknowledgment that any reasonable action requested by Administrative Agent in
connection therewith, including to continue the perfection of any Liens in favor
of Administrative Agent, on behalf of itself, Documentation Agent and 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, except:
(a) instruments and agreements as in effect on the Closing Date set
forth in Disclosure Schedule (6.16(a)) and any amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings of any such instruments and agreements or any existing Indebtedness
to which such instruments and agreements relate, provided that such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings are no more restrictive, taken as a whole with
respect to such distribution, dividend and other payment restrictions and loan
or investment restrictions than those contained in such agreement, as in effect
on the Closing Date;
(b) customary non-assignment provisions in Licenses and leases entered
into in the ordinary course of business and consistent with past practices;
(c) purchase money obligations otherwise permitted hereunder for
property acquired in the ordinary course of business that impose restrictions on
the property so acquired;
(d) any agreement for the sale or other disposition of assets thereof
pending its sale or other disposition, provided that such sale or disposition is
consummated, or such restrictions are canceled or terminated or lapse within 30
days; and
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(e) the refinancing of Indebtedness permitted by Section 6.3(a)(iv),
provided that the restrictions contained in the agreements governing such
refinancing Indebtedness are no more restrictive, taken as a whole, than those
contained in the agreements governing the Indebtedness being refinanced.
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. Changes Relating to Subordinated Debt. No Credit Party shall
change or amend the terms of the Subordinated Debt (or any indenture or
agreement in connection therewith) if the effect of such amendment is to: (a)
increase the interest rate on such Subordinated Debt; (b) change the dates upon
which payments of principal or interest are due on such Subordinated Debt other
than to extend such dates; (c) change any default or event of default other than
to delete or make less restrictive any default provision therein, or add any
covenant with respect to such Subordinated Debt; (d) change the redemption or
prepayment provisions of such Subordinated Debt other than to extend the dates
therefor or to reduce the premiums payable in connection therewith; (e) grant
any security or collateral to secure payment of such Subordinated Debt; (f)
change the subordination provisions thereof; (g) amend the financial covenants
of such Subordinated Debt to make them more restrictive; or (h) change or amend
any other term if such change or amendment would materially increase the
obligations of the obligor or confer additional material rights to the holder of
such Subordinated Debt in a manner adverse to any Credit Party, Administrative
Agent, Documentation Agent or any Lender.
6.19. Status of Holdings. After the consummation of the Merger,
Holdings shall be a company which shall not engage in any activities other than
those associated with being the sole shareholder of Borrower and, without
limiting the foregoing, shall not incur any liabilities other than in connection
with the Related Transactions and the Obligations thereunder.
6.20. Sale or Discount of Accounts. No Credit Party or its respective
Subsidiaries shall enter into a third party transaction to sell, with or without
recourse, or discount (other than in connection with trade discounts in the
ordinary course of business) or otherwise sell for less than the face value
thereof, any of its Accounts (other than written-off Accounts).
7. TERM
7.1. Termination. The financing arrangements contemplated hereby shall
be in effect until the Termination Date, and the Loans and all other Obligations
shall be automatically due and payable in full on such date, except that the
Revolving Loan and Term Loan A shall be automatically due and payable in full on
the Commitment Termination 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
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Parties or the rights of Administrative Agent, Documentation 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 or
Termination Date, as applicable. 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 Administrative Agent, Documentation 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 for a
period of three (3) Business Days 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 Administrative Agent, Documentation Agent or Lenders for any
expense reimbursable hereunder or under any other Loan Document within ten (10)
days following Administrative 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 for a period of ten (10) days 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 three (3) Business Days
or more.
(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 twenty (20) days or more.
(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 $2,000,000 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 $2,000,000 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.
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(f) Any information contained in any Borrowing Base Certificate is
untrue or incorrect in any material 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 Borrowing Base Certificate) made or
delivered to Administrative Agent, Documentation 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 $1,000,000
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 thirty (30) 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, or (iv) shall take any
corporate 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 $1,000,000 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 in force and effective (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.
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(l) Any Change of Control shall occur.
8.2. Remedies. (a) If any Event of Default shall have occurred and be
continuing, Administrative 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 Administrative 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, Administrative 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,
Administrative 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 Administrative 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(h) or (i), the Revolving Loan facility shall be immediately
terminated and all of the Obligations, including the 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 Administrative Agent on which any Credit Party
may in any way be liable, and hereby ratifies and confirms whatever
Administrative Agent may do in this regard, (b) all rights to notice and a
hearing prior to Administrative Agent's taking possession or control of, or to
Administrative Agent's replevy, attachment or levy upon, the Collateral or any
bond or security which might be required by any court prior to allowing
Administrative Agent to exercise any of its remedies, and (c) the benefit of all
valuation, appraisal, marshaling and exemption laws.
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9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENTS
9.1. Assignment and Participations.
(a) The Credit Parties signatory hereto consent to any Lender's
assignment to any entity other than a competitor of any of the Credit Parties
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 Administrative Agent
(which shall not be unreasonably withheld or delayed) and the execution of an
assignment agreement (an "Assignment Agreement" substantially in the form
attached hereto as Exhibit 9.1(a) and otherwise in form and substance
satisfactory to, and acknowledged by, Administrative Agent; (ii) be conditioned
on such assignee Lender representing to the assigning Lender and Administrative
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 Administrative 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 Administrative Agent or any Lender assigns or otherwise transfers all or
any part of the Obligations, Administrative Agent or any such Lender shall so
notify Borrower and Borrower shall, upon the request of Administrative 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 (assuming
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the Lender complies with the provisions applicable to a foreign Lender), 1.16
(but not higher than that which the Lender who granted the applicable
participation would have been entitled to receive) 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 other Credit Party shall have any obligation or duty to
any participant. Neither Administrative 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 Administrative 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.
Until the completion of the syndication of the Loans hereunder, as determined by
Administrative Agent, or GECC Capital Markets Group, Inc., in its sole
discretion, each Credit Party executing this Agreement shall (i) assist in the
preparation of informational materials for, and the participation of management
in meetings with, potential assignees or participants, and (ii) certify the
correctness, completeness and accuracy of all descriptions of the Credit Parties
and their affairs contained in any selling materials provided by it and all
other information provided by it 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 Agents. GE Capital is hereby appointed to act on
behalf of all Lenders as Administrative Agent under this Agreement and the other
Loan Documents. Indosuez is hereby appointed to act on behalf of all Lenders as
Documentation Agent under this Agreement and the other Loan Documents. The
provisions of this Section 9.2 are solely for the benefit of Agents 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
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under this Agreement and the other Loan Documents, each 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. The Agents shall have no duties or
responsibilities except for those expressly set forth in this Agreement and the
other Loan Documents. The duties of the Agents shall be mechanical and
administrative in nature and the Agents 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 respective
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 either 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 such Agent shall be entitled to refrain from such act or
taking such action unless and until such Agent shall have received instructions
from Requisite Lenders, Requisite Revolving Lenders or all affected Lenders, as
the case may be, and such Agent shall not incur liability to any Person by
reason of so refraining. Each 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 such 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 such Agent, expose such Agent to Environmental Liabilities or (c) if
such 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 either right of action whatsoever against either Agent as a result of
such 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 respective
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, each Agent: (a) may treat
the payee of any Note as the holder thereof until such Agent receives written
notice of the assignment or transfer thereof signed by such payee and in form
satisfactory to such 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,
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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 Administrative 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 its
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 Administrative
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. GE Capital has also agreed to purchase certain
equity interests in an Affiliate of Holdings. Each Lender acknowledges the
potential conflict of interest between GE Capital as a Lender holding
disproportionate interests in the Loans, GE Capital as an equity holder of an
Affiliate of Holdings, and GE Capital as Administrative Agent.
9.5. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon either 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 either 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 each Agent (to the
extent not reimbursed by Credit Parties and without limiting the obligations of
Borrower 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 such
Agent in any way relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted by such 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 such Agent's gross negligence or
willful misconduct. Without limiting the foregoing, each Lender agrees to
reimburse each Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including counsel fees) incurred by such Agent in
connection with the
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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 such Agent is not reimbursed
for such expenses by Credit Parties.
9.7. Successor Agent. Administrative 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 Administrative Agent. If no such successor
Administrative Agent shall have been so appointed by the Requisite Lenders and
shall have accepted such appointment within 30 days after the resigning
Administrative Agent's giving notice of resignation, then the resigning
Administrative Agent may, on behalf of Lenders, appoint a successor
Administrative 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 Administrative Agent has been
appointed pursuant to the foregoing, by the 30th day after the date such notice
of resignation was given by the resigning Administrative Agent, such resignation
shall become effective and the Requisite Lenders shall thereafter perform all
the duties of Administrative Agent hereunder until such time, if any, as the
Requisite Lenders appoint a successor Administrative Agent as provided above.
Any successor Administrative 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 Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall succeed to and become vested with all the rights, powers, privileges
and duties of the resigning Administrative Agent. Upon the earlier of the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent or the effective date of the resigning Administrative
Agent's resignation, the resigning Administrative 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
Administrative Agent shall continue. After any resigning Administrative 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
Administrative 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
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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. Each Lender's obligation under this
Section 9.8 shall be in addition to and not limitation of its obligations to
purchase a participation in an amount equal to its Pro Rata Share of the Swing
Line Loans under Section 1.1. Borrower and each Guarantor agrees, 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) Revolving Lenders shall refund or
participate in the Swing Line Loan in accordance with clauses (iii) and (iv) of
Section 1.1(c). If the Swing Line Lender declines to make a Swing Line Loan or
if Swing Line Availability is zero, Administrative Agent shall notify Revolving
Lenders, promptly after receipt of a Notice of Revolving 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 Administrative Agent in
same day funds by wire transfer to Administrative 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 Administrative Agent's sole discretion, before
receipt of such wire transfers), subject to the terms hereof, Administrative
Agent shall make the requested Revolving Credit Advance to Borrower. 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 (other than the Swing Line Loan)
(each, a "Settlement Date"), Administrative 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
and Advances required to be made by it and purchased all participations
required to be purchased by it under this Agreement and the other Loan
Documents as of
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such Settlement Date, Administrative 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, Administrative 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. Administrative Agent may
assume that each Revolving Lender will make its Pro Rata Share of each Revolving
Credit Advance available to Administrative Agent on each funding date. If such
Pro Rata Share is not, in fact, paid to Administrative Agent by such Revolving
Lender when due, Administrative 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 Administrative Agent's demand, Administrative Agent shall
promptly notify Borrower and Borrower shall immediately repay such amount to
Administrative Agent. Nothing in this Section 9.9(b) or elsewhere in this
Agreement or the other Loan Documents shall be deemed to require Administrative
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
Administrative 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, Administrative 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 Administrative 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 Administrative Agent from Borrower and such related
payment is not received by Administrative Agent, then Administrative Agent
will be entitled to recover such amount from such Lender on demand without
set-off, counterclaim or deduction of any kind.
(ii) If Administrative Agent determines at any time that any
amount received by Administrative 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, Administrative Agent will not be
required to distribute any portion thereof to any Lender. In addition, each
Lender will repay to Administrative Agent on demand any portion of such
amount that Administrative Agent has distributed to such Lender, together
with interest at such rate, if any, as
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Administrative 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 in any Swing Line Loan 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 any 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. Administrative Agent will use
reasonable efforts to provide Lenders with any notice of Default or Event of
Default received by Administrative Agent from, or delivered by Administrative
Agent to, any Credit Party, with notice of any Event of Default of which
Administrative Agent has actually become aware and with notice of any action
taken by Agent following any Event of Default; provided, however, that
Administrative Agent shall not be liable to any Lender for any failure to do so,
except to the extent that such failure is attributable to Administrative Agent's
gross negligence or willful misconduct. Lenders acknowledge that Borrower is
required to provide Financial Statements and Collateral Reports to Lenders in
accordance with Annexes E and F hereto and agree that Administrative Agent shall
have no duty to provide the same to Lenders.
(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 Administrative 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 Administrative 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, Administrative Agent, Documentation 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
Administrative Agent and Lenders. Any such purported assignment, transfer,
hypothecation or other conveyance by any Credit Party without the prior express
written consent of Administrative Agent and Lenders shall be void.
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The terms and provisions of this Agreement are for the purpose of defining the
relative rights and obligations of each Credit Party, Administrative Agent,
Documentation 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, commitment letter
and/or fee letter (other than the GE Capital Fee Letter) between any Credit
Party and either 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; provided,
however, that the provisions of the Commitment Letter pertaining to the
agreement by Chartwell to pay Transaction Expenses (as defined therein) and
provide indemnities shall survive until the Closing Date.
11.2. Amendments and Waivers. (a) Except for actions expressly
permitted to be taken by either 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 Administrative 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 increases the percentage
advance rates set forth in the definition of the Borrowing Base, or which makes
less restrictive the nondiscretionary criteria for exclusion from Eligible
Accounts and Eligible Inventory set forth in Sections 1.6 and 1.7, shall be
effective unless the same shall be in writing and signed by Administrative
Agent, Documentation Agent, Requisite Revolving Lenders and Borrower. 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 Administrative Agent, Documentation 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 either 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
Administrative Agent, Requisite Revolving Lenders and Borrower.
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(c) No amendment, modification, termination or waiver shall, unless in
writing and signed by Administrative Agent, Documentation 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) release any Guaranty or, 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 $8,000,000 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
either Agent under this Agreement or any other Loan Document shall be effective
unless in writing and signed by the affected Agent and Administrative 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 Administrative 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") 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)
and (iii) below being referred to as a "Non-Consenting Lender"), then, so long
as Administrative Agent is not a Non-Consenting Lender, at Borrower's request
Administrative Agent, or a Person acceptable to Administrative Agent, shall have
the right with Administrative Agent's consent and in Administrative 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
Administrative Agent's request, sell and assign to Administrative 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.
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(e) Upon 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 each Agent
and all 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, Administrative 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 each Agent for all
of its respective 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 Administrative Agent (and, with
respect to clauses (c) and (d) below, each Lender) for all of its respective
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 Administrative 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 Administrative 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 Administrative 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 Administrative Agent, such
reimbursement shall be limited to one counsel for all such Lenders;
(d) any attempt to enforce any remedies of Administrative Agent or any
Lender against any or all of the Credit Parties or any other Person that may be
obligated to Administrative 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 Administrative Agent, such reimbursement shall be limited to
one counsel for all such Lenders;
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(e) any work-out or restructuring of the Loans during the pendency of
one or more Events of Default;
(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 reasonable
attorneys' and other professional and service providers' fees arising from such
services, including those in connection with any appellate proceedings; and all
reasonable expenses, costs, charges and other reasonable 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 Administrative 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. Notwithstanding the foregoing, if the Closing Date does
not occur, only Acquisition Co. and, as set forth in Section 11.1, Chartwell,
shall be responsible for the reimbursement of fees and expenses pursuant to this
Section 11.3.
11.4. No Waiver. Either 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 such 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 either 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
such Agent and the applicable required Lenders and directed to Borrower
specifying such suspension or waiver.
11.5. Remedies. Each Agent's and each Lenders' rights and remedies
under this Agreement shall be cumulative and nonexclusive of any other rights
and remedies which either 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
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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. Each Agent and each Lender agree to use
commercially reasonable efforts (equivalent to the efforts such Agent or such
Lender applies to maintain 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 each Agent and each Lender may
disclose such information (a) to Persons employed or engaged by such Agent or
such Lender in evaluating, approving, structuring or administering the Loans and
the Commitments; (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) so long as such Persons have
agreed to be bound by the provisions of this Section 11.8; (c) as required or
requested by any Governmental Authority or reasonably believed by such 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 such 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 such Agent or such Lender is a party; or (f) which ceases to be
confidential through no fault of such 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 EXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE CREDIT PARTIES, ADMINISTRATIVE
AGENT, DOCUMENTATION 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 ADMINISTRATIVE
AGENT, DOCUMENTATION 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
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COUNTY, CITY OF NEW YORK, NEW YORK AND, PROVIDED, FURTHER NOTHING IN THIS
AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE ADMINISTRATIVE 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 ADMINISTRATIVE 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 Administrative 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.
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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 AGENTS, 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, Indosuez or
any of their respective 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 Indosuez and without the prior
written consent of GE Capital and Indosuez 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 and Indosuez
before issuing such press release or other public disclosure. Each Credit Party
consents to the publication by Administrative Agent or any Lender of a tombstone
or similar advertising material relating to the financing transactions
contemplated by this Agreement with the prior consent of Borrower, which shall
not be unreasonably withheld or delayed. Administrative Agent or such Lender
shall provide a draft of any such tombstone or similar advertising material to
each Credit Party for review and comment prior to the publication thereof.
Administrative 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
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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. No Director and Officer Liability. No director or officer of
any Credit Party, as such, shall have any personal liability for payment and
performance of the Obligations.
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
PLAYCORE WISCONSIN, INC.
/s/ Xxxxxxxx X. Xxxxxxx
---------------------------------------------
By: Xxxxxxxx X. Continio
Title: President and Chief Executive Officer
GENERAL ELECTRIC CAPITAL
CORPORATION, as Administrative Agent and
Lender
/s/ Xxxxx Xxxxxxxxx
---------------------------------------------
By: Xxxxx Xxxxxxxxx
Title: Its duly authorized signatory
CREDIT AGRICOLE INDOSUEZ,
as Documentation Agent and Lender
/s/ Xxxxxxx Xxxxxxxxx
---------------------------------------------
By: Xxxxxxx Xxxxxxxxx
Title: Vice President
/s/ Xxxxxxxx Xxxxxxx
---------------------------------------------
By: Xxxxxxxx Xxxxxxx
Title: First Vice President
The following Persons are signatories to this Agreement in their
capacity as Credit Parties and not as Borrowers:
PLAYCORE, INC.
/s/ Xxxxxxxx X. Xxxxxxx
---------------------------------------------
By: Xxxxxxxx X. Continio
Title: President and Chief Executive Officer
HEARTLAND INDUSTRIES, INC. (DE)
/s/ Xxxxxxxx X. Xxxxxxx
---------------------------------------------
By: Xxxxxxxx X. Continio
Title: President and Chief Executive Officer
PLAYCORE HOLDINGS, INC.
/s/ Xxxxxxx Xxxxx
---------------------------------------------
By: Xxxxxxx Xxxxx
Title: Vice President
79
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:
"Account Debtor" shall mean any Person who may become obligated to any
Credit Party under, with respect to, or on account of, an Account.
"Accounts" shall mean all "accounts," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party and, in any event,
including (a) all accounts receivable, other receivables, book debts and other
forms of obligations (other than forms of obligations evidenced by Chattel
Paper, Documents or Instruments) now owned or hereafter received or acquired by
or belonging or owing to any Credit Party, whether arising out of goods sold or
services rendered by it or from any other transaction (including any such
obligations which 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 now owned or hereafter acquired by it 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 monies due or to become due to any Credit Party, under all purchase
orders and contracts for the sale of goods or the performance of services or
both 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) now or
hereafter in existence, including the right to receive the proceeds of said
purchase orders and contracts, and (e) all collateral security and guarantees of
any kind, now or hereafter in existence, given by any Person with respect to any
of the foregoing.
"Acquisition" shall mean the acquisition of all or substantially all
of the common stock of Holdings pursuant to a tender offer by Holdings and/or
Merger Co. of the common stock of Holdings and the Merger.
"Acquisition Agreement" shall mean, collectively, (a) the Agreement
and Plan of Merger dated as of the date hereof by and among Holdings,
Acquisition Co. and Merger Co., (b) the Stock Purchase Agreement dated as of the
date hereof by and among Acquisition Co., Merger Co. and GreenGrass Holdings,
(c) the Purchase, Waiver and Consent Agreement dated as of the date hereof by
and among Merger Co., Holdings, Borrower, MassachusettsMutual Life Insurance
Company, MassMutual Corporate Investors, MassMutual Participation Investors,
80
MassMutual Corporate Value Partners Limited and Xxxxxxx & Co., (d) those certain
Option Exercise/Cancellation Agreements dated as of the date hereof by and among
Holdings, Merger Co., and certain members of management of Holdings and
Borrower, (e) all documents filed with the Securities and Exchange Commission in
connection with the tender offer by Holdings and/or Merger Co. for the common
stock of Holdings and (f) all other documents executed in connection therewith.
"Acquisition Co." shall mean PlayCore Holdings, Inc., a Delaware
corporation.
"Activation Event" and "Activation Notice" shall have the meanings set
forth in Annex C.
"Administrative Agent" shall mean GE Capital or its successor
appointed pursuant to Section 9.7.
"Advance" shall mean any Revolving Credit Advance or Swing Line
Advance, as the context may require.
"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 each Agent and each Lender.
"Agents" shall mean the Administrative Agent and the Documentation
Agent, collectively.
"Agreement" shall mean the Credit Agreement by and among Borrower, the
other Credit Parties named therein, GE Capital, as Administrative Agent and
Lender, Indosuez, as Documentation Agent and Lender and the other Lenders
signatory from time to time to the Agreement.
"Annual Plan" shall mean the annual plan of the Borrower as adopted or
approved by the board of directors thereof.
"Appendices" shall have the meaning assigned to it in the recitals to
the Agreement.
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"Applicable L/C Margin" shall mean the per annum fee, from time to
time in effect, payable with respect to outstanding Letter of Credit Obligations
as determined by reference to Section 1.5(a).
"Applicable Margins" means collectively the Applicable L/C Margin, the
Applicable Revolver Index Margin, the Applicable Revolver LIBOR Margin, the
Applicable Term Loan A Index Margin, the Applicable Term Loan A LIBOR Margin and
the Applicable Term Loan B LIBOR Margin.
"Applicable Revolver Index Margin" shall mean the per annum interest
rate margin from time to time in effect and payable in addition to the Index
Rate applicable to the Revolving Loan, as determined by reference to Section
1.5(a) of the Agreement.
"Applicable Revolver LIBOR Margin" shall mean the per annum interest
rate from time to time in effect and payable in addition to the LIBOR Rate
applicable to the Revolving Loan, as determined by reference to Section 1.5(a)
of the Agreement.
"Applicable Term Loan A Index Margin" shall mean the per annum
interest rate from time to time in effect and payable in addition to the Index
Rate applicable to the Term Loan A, as determined by reference to Section 1.5(a)
of the Agreement.
"Applicable Term Loan A LIBOR Margin" shall mean the per annum
interest rate from time to time in effect and payable in addition to the LIBOR
Rate applicable to the Term Loan A, as determined by reference to Section 1.5(a)
of the Agreement.
"Applicable Term Loan B Index Margin" shall mean the per annum
interest rate from time to time in effect and payable in addition to the Index
Rate applicable to the Term Loan B, as determined by reference to Section 1.5(a)
of the Agreement.
"Applicable Term Loan B LIBOR Margin" shall mean the per annum
interest rate from time to time in effect and payable in addition to the LIBOR
Rate applicable to the Term Loan B, as determined by reference to Section 1.5(a)
of the Agreement.
"Assignment Agreement" shall have the meaning assigned to it in
Section 9.1(a).
"Borrower" shall have the meaning assigned thereto in the recitals to
the Agreement.
"Borrower Accounts" shall have the meaning assigned to it in Annex C.
"Borrowing Availability" shall have the meaning assigned to it in
Section 1.1(a)(i).
"Borrowing Base" shall mean, as of any date of determination by
Administrative Agent, from time to time, an amount equal to the sum at such time
of:
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(a) eighty-five percent (85%) of the book value of Borrower's Eligible
Accounts, less any Reserves established by Administrative Agent at such
time; and
(b) sixty percent (60%) of the book value of Borrower's Eligible
Inventory valued on a first-in, first-out basis (at the lower of cost or
market), less any Reserves established by Administrative Agent at such
time;
plus in months November through March, $3,000,000.
"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).
"Budget" shall mean the operating budget of the Borrower as adopted or
approved by the board of directors thereof.
"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) 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 Management Systems" shall have the meaning assigned to it in
Section 1.8.
"Change of Control" shall mean any event, transaction or occurrence as
a result of which (a) Permitted Holders shall cease to beneficially own (as
defined in Rule 13d-3 or any successor rule or regulation promulgated under the
Securities Exchange Act of 1934, as amended) at least a majority of the
outstanding common equity of Holdings, (b) Holdings shall cease to own and
control all of the economic and voting rights associated with all of the
outstanding capital Stock of Borrower, (c) Borrower shall cease to own and
control all of the economic and voting rights associated with all of the
outstanding capital Stock of Heartland or any Subsidiary of Borrower created in
connection with a Designated Acquisition, or (d) a "Change of Control", as
defined in the Subordinated Notes, shall occur.
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"Charges" shall mean all federal, state, county, city, municipal,
local, foreign or other governmental taxes (including 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.
"Chartwell" shall mean Chartwell Investments II, L.L.C. and its
Affiliates.
"Chattel Paper" shall mean any "chattel paper," as such term is
defined in the Code, now owned or hereafter acquired by any Credit Party,
wherever located.
"Closing Date" shall mean the date on which each of the conditions
precedent in Sections 2.1 and 2.2 are satisfied or waived by Administrative
Agent in accordance with the terms of this Agreement and the funding of the Term
Loans occurs.
"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" shall mean the Uniform Commercial Code as the same may, from
time to time, be enacted and in effect in the State of New York; provided,
however, in the event that, by reason of mandatory provisions of law, any or all
of the attachment, perfection or priority of Administrative Agent's,
Documentation Agent's or any Lender's security interest in 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 hereof relating to such attachment,
perfection or priority and for purposes of definitions related to such
provisions.
"Collateral" shall mean the property covered by the Security
Agreement, the Mortgages 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 Administrative Agent, on behalf of itself, Documentation Agent
and Lenders, to secure the Obligations.
"Collateral Documents" shall mean the Security Agreement, the Pledge
Agreement, the Guaranty, the Mortgages, the Patent Security Agreement, the
Trademark Security Agreement, the Copyright Security Agreement and all similar
agreements entered into guaranteeing payment of, or granting a Lien upon
property as security for payment of, the Obligations.
"Collateral Reports" shall mean the reports with respect to the
Collateral referred to in Annex F.
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"Collection Account" shall mean that certain account of Administrative
Agent, account number 00-000-000 in the name of Administrative Agent at Bankers
Trust Company in New York, New York or such other account as Administrative
Agent shall specify.
"Commitment Letter" shall mean the commitment letter in respect of the
Loans dated January 14, 2000 among Chartwell and the Agents.
"Commitment Termination Date" shall mean the earliest of (a) July 1,
2006, (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 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 and the Swing Line Commitment to zero dollars ($0).
"Commitments" shall mean (a) as to any Lender, the aggregate of such
Lender's Revolving Loan Commitment (including without duplication the Swing Line
Lender's Swing Line Commitment as a subset of its 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 (including without
duplication the Swing Line Lender's Swing Line Commitment as a subset of its
Revolving Loan Commitment) and Term Loan Commitments, which aggregate commitment
shall be One Hundred Fifteen Million Dollars ($115,000,000) 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.
"Commodity Hedge Obligations" shall mean, with respect to any Person,
the obligations of such Person at such time under commodity price swap
agreements, commodity price cap agreements, commodity price collar agreements
and commodity price arrangements or hedge contracts or forward sale contracts,
in each case designed to protect such Person or its Subsidiaries against
fluctuations in commodity prices; provided that such Commodity Hedge Obligations
are entered into in the ordinary course of business and are not speculative in
nature.
"Compliance Certificate" shall have the meaning assigned to it in
Annex E.
"Concentration Account" shall have the meaning assigned to it in Annex
C.
"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.
"Control Letter" means a letter agreement between Administrative Agent
and (i) the issuer of uncertificated securities with respect to uncertificated
securities in the name of any
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Credit Party, (ii) a securities intermediary with respect to securities, whether
certificated or uncertificated, securities entitlements and other financial
assets held in a securities account in the name of any Credit Party, (iii) a
futures commission merchant or clearing house with respect to commodity accounts
and commodity contracts held by any Credit Party, whereby, among other things,
the issuer, securities intermediary or futures commission merchant disclaims any
security interest in the applicable financial assets, acknowledges the Lien of
Administrative Agent, on behalf of itself, Documentation Agent and Lenders, on
such financial assets, and agrees to follow the instructions or entitlement
orders of Administrative Agent without further consent by the affected Credit
Party.
"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.
"Copyright Security Agreements" shall mean the Copyright Security
Agreements made in favor of Administrative Agent, on behalf of itself,
Documentation Agent and Lenders, by each applicable Credit Party.
"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 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, Heartland, Acquisition
Co. and each of their respective Subsidiaries.
"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 current portions
of the Term Loans, Revolving Loan and the Swing Line Loan and other Funded Debt.
"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).
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"Designated Acquisition" shall mean the acquisition of all or
substantially all of the assets or Stock of an entity or business unit, for
total consideration of not more than $2,500,000 individually and not more than
$5,000,000 in the aggregate in any Fiscal Year; provided that (i) the acquired
entity or business unit is in the same or related business as Borrower or its
existing Subsidiaries; (ii) any new Subsidiary resulting from such acquisition
becomes a Credit Party, its Stock is pledged pursuant to the Pledge Agreement
and it becomes a party to the Collateral Documents; (iii) after giving pro forma
effect to such acquisition as if it had occurred 12 months prior to the end of
the most recent Fiscal Quarter, the Credit Parties shall be in compliance with
all Financial Covenants set forth in Annex G as set forth in a certificate from
the Chief Financial Officer of Borrower, and the Administrative Agent shall have
received a revised copy of the most recently delivered operating plan as
referenced in Annex E giving effect to such Designated Acquisition; (iv) no
Default or Event of Default shall have occurred and be continuing or would
result therefrom; (v) such acquisition has been approved by Administrative
Agent; and (vi) Administrative Agent shall have been afforded the opportunity to
complete its due diligence with respect to such acquisition and the results
thereof shall be satisfactory to Administrative Agent.
"Disbursement Accounts" shall have the meaning assigned to it on Annex
C.
"Disclosure Schedules" shall mean the Schedules prepared by Borrower
and denominated as Disclosure Schedules 1.4 through 6.7 in the Index to the
Agreement.
"Documentation Agent" shall mean Indosuez or its successor appointed
pursuant to Section 9.7.
"Documents" shall mean any "documents," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located.
"Dollars" or "$" 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) the sum of (i) income tax credits, (ii) gain from extraordinary items
for such period, (iii) 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 (iv) any other non-cash gains, in each instance
in this clause (b), 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, (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, (vii) the Management Fee, and
(viii) any charge related to any premium or penalty paid in connection with
redeeming or retiring any Indebtedness prior to its stated maturity to the
extent permitted hereunder and reducing
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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. 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 (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; (2) 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;
(3) 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 or a prior period; (4) any write-up of any asset; (5) any net gain from
the collection of the proceeds of life insurance policies; (6) any net gain
arising from the acquisition of any securities, or the extinguishment, under
GAAP, of any Indebtedness, of such Person, (7) 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, (8) 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, and (9) any fees,
expenses, costs, or other charges incurred or paid arising out of the Related
Transactions, including under this Agreement and relating to the retirement or
repayment of Indebtedness on the Closing Date. Notwithstanding the foregoing,
for each of the 12 months prior to the Closing Date, EBITDA shall be as set
forth on Disclosure Schedule (A-EBITDA).
"Eligible Accounts" shall have the meaning assigned to it in Sections
1.6 of the Agreement.
"Eligible Inventory" shall have the meaning assigned to it in Sections
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 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 Substances
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.
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"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 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
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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; (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 Cash Flow" shall mean, without duplication, with respect to
any Fiscal Year of Borrower and its Subsidiaries, EBITDA, (a) plus decreases or
minus increases (as the case may be) in Working Capital, (b) minus 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), (c) minus Interest Expense, (d) minus scheduled principal payments
paid or payable in respect of Funded Debt, (e) plus or minus (as the case may
be), extraordinary gains or losses which are cash items not included in the
calculation of net income and not taken into account in calculating EBITDA, (f)
minus 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),
(g) minus income taxes paid in cash during such period, (h) minus the Management
Fee, (i) minus voluntary prepayments of Term Loans pursuant to Section 1.3(a)
and (j) minus cash paid in connection with any Designated Acquisition during
such period. For purposes of this definition, "Working Capital" means Current
Assets less Current Liabilities.
"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 Administrative 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 either Agent or either
Lender pursuant to the Agreement or any of the other Loan Documents.
"Financial Statements" shall mean the consolidated and consolidating
income statements, statements of cash flows and balance sheets of Holdings and
its Subsidiaries delivered in accordance with Section 3.4 of the Agreement and
Annex E to the Agreement.
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"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 Charges" shall mean, with respect to any Person for any fiscal
period, (a) the aggregate of all Interest Expense paid or accrued without
duplication if previously paid or accrued in a prior fiscal period during such
period plus (b) scheduled payments of principal with respect to Indebtedness
during such period, excluding payments under Sections 1.3(b) or 1.3(d), plus (c)
the Management Fee paid or accrued in such period plus (d) Capital Expenditures
made during such period; provided, however, that notwithstanding the foregoing,
solely for the purpose of calculating the Fixed Charge Coverage Ratio for the
12-month periods ending on June 30, 2000, September 30, 2000, and March 31,
2001, respectively, "Fixed Charges" for (1) the period of twelve months ending
June 30, 2000, shall be the quotient obtained by dividing the actual amounts
described in clauses (a), (b) and (c) above for the Fiscal Quarter ending June
30, 2000 by .25, (ii) the period of twelve months ending on September 30, 2000,
shall be the quotient obtained by dividing the actual amounts described in
clauses (a), (b) and (c) above for the two Fiscal Quarters ending September 30,
2000 by .50, and (iii) for the period of twelve months ending on March 31, 2001,
shall be the quotient obtained by dividing the actual amounts described in
clauses (a), (b) and (c) above for the three Fiscal Quarters ending March 31,
2001 by .75.
"Fixed Charge Coverage Ratio" shall mean, with respect to any Person
for any fiscal period, the ratio of EBITDA less Taxes paid to Fixed Charges. In
computing Fixed Charges for any fiscal period, interest and principal payments
that are due within one week after the end of that fiscal period, without
duplication, shall be deemed to have been paid on the last day of that fiscal
period.
"Fixtures" shall mean any "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 pay-in-kind interest on the Subordinated Debt,
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 Loans and, without
duplication, Guaranteed Indebtedness consisting of guaranties of Funded Debt of
other Persons. Solely for purposes of calculating the Leverage Ratio and Senior
Leverage Ratio, the outstanding amount of the Revolving Loan for the purposes of
determining the amount of Funded Debt shall be the lesser of (a) the actual
outstanding amount of the
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Revolving Loan as of the measurement date or (b) the outstanding amount of the
Revolving Loan at the end of each Fiscal Month for the 12 most recently ended
Fiscal Months divided by 12, or, as applicable, for the Fiscal Months set forth
in Disclosure Schedule (A-Funded Debt), such amount as is set forth in such
Schedule.
"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.
"GE Capital Fee Letter" shall have the meaning assigned to it in
Section 1.9.
"General Intangibles" shall mean any "general intangibles," as such
term is defined in the Code, now owned or hereafter acquired by any Credit
Party, and, in any event, including all right, title and interest which such
Credit Party may now or hereafter have in or under any Contract, all 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 of
indemnification, all books and records, 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.
"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
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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.
"Guarantors" shall mean Holdings, Heartland, any other Subsidiary of
Borrower, and each other Person, if any, which executes a guarantee or other
similar agreement in favor of Administrative Agent, on behalf of itself,
Documentation Agent and Lenders in connection with the transactions contemplated
by the Agreement and the other Loan Documents.
"Guaranty" shall mean the Guaranty of even date herewith executed by
Holdings and Heartland in favor of Administrative Agent, on behalf of itself,
Documentation Agent and Lenders.
"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," "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.
"Heartland" shall have the meaning ascribed thereto in the recitals to
the Agreement.
"Holdings" shall (a) prior to the Merger, have the meaning ascribed
thereto in the recitals to the Agreement and (b) upon and after the Merger, mean
Acquisition Co.
"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 the risks of that Person
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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.
"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 posted by at least 75% of the
nation's 30 largest 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.
"Index Rate Loan" shall mean a Loan or portion thereof bearing
interest by reference to the Index Rate.
"Instruments" shall mean any "instrument," 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 notes and other, without limitation, 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.
"Intercompany Notes" shall have the meaning assigned to it in Section
6.3.
"Interest Coverage Ratio" shall mean, with respect to any Person for
any period, the ratio of EBITDA to Interest Expense.
"Interest Expense" shall mean, with respect to any Person for any
fiscal period and net of interest income, interest expense payable in cash
(excluding any original issue discount, interest paid in kind and amortized debt
discount) of such Person determined in accordance with GAAP for the relevant
period ended on such date, including, in any event, interest expense with
respect to any Funded Debt of such Person, interest expense for the relevant
period that has been capitalized on the balance sheet of such Person and
adjustments for Interest Hedge Obligations to the extent consistent with GAAP;
provided, however, that notwithstanding the foregoing, solely for the purpose of
calculating the Interest Coverage Ratio for the 12-month periods ending on June
30, 2000, September 30, 2000 and March 31, 2001, respectively. "Interest
Expense" for (i) the period of twelve months ending on March 31, 2000, shall be
the quotient obtained by dividing the actual Interest Expense (excluding
amortization of
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debt discount and deferred financing fees) for the Fiscal Quarters ending June
30, 2000 by .25, (ii) the period of twelve months ending on September 30, 2000,
shall be the quotient obtained by dividing the actual Interest Expense
(excluding amortization of debt discount and deferred financing fees) for the
two Fiscal Quarters ending September 30, 2000 by .50, and (iii) for the period
of twelve months ending on March 31, 2001, shall be the quotient obtained by
dividing the actual Interest Expense (excluding amortization of debt discount
and deferred financing fees) for the three Fiscal Quarters ending March 31, 2001
by .75.
"Interest Hedge Obligations" shall mean, with respect to any Person,
the obligations of such Person pursuant to any interest rate swap agreement,
interest rate cap, collar or floor agreement or other similar agreement or
arrangement designed to protect against or manage such Person's or any of its
Subsidiaries' exposure to fluctuations in interest rates; provided that such
Interest Hedge Obligations are not speculative in nature.
"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, except for the Term Loan B.
"Inventory" shall mean any "inventory," as such term is defined in the
Code, now or hereafter owned or acquired by any Credit Party, wherever located,
and in any event including inventory, merchandise, goods and other personal
property which 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 which
constitute raw materials, work in process or materials 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
other supplies.
"Investment Property" shall have the meaning ascribed thereto in
Section 9-115 of the Code in those jurisdictions in which such definition has
been adopted and shall include (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 such 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 held by any Credit
Party; (iv) all commodity contracts held by 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.
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"IRS" shall mean the Internal Revenue Service, or any successor
thereto.
"L/C Issuer" shall have the meaning assigned to such term in Annex B.
"Lenders" shall mean GE Capital, Indosuez, 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.
"Letter of Credit Fee" has the meaning ascribed thereto in Annex B.
"Letter of Credit Obligations" shall mean all outstanding obligations
incurred by Administrative 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 Administrative 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 Administrative Agent or Lenders thereupon
or pursuant thereto.
"Letters of Credit" shall mean commercial or standby letters of credit
issued for the account of Borrower by any L/C Issuer, and bankers' acceptances
issued by Borrower, for which Administrative Agent and Lenders have incurred
Letter of Credit Obligations.
"Leverage Ratio" shall mean, with respect to Borrower, on a
consolidated basis, the ratio of (a) Funded Debt as of any date of
determination, to (b) the sum of 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, two, three or six months thereafter, as selected by
Borrower's irrevocable notice to Administrative Agent as set forth in Section
1.5(e); provided that the foregoing provision relating to LIBOR Periods is
subject to the following:
(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 or Termination Date, as applicable, shall end two (2)
LIBOR Business Days prior to such date;
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(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 five (5) separate LIBOR Loans in existence at any one time.
"LIBOR Rate" shall mean for each LIBOR Period, a rate of interest
determined by Administrative 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 Administrative
Agent and Borrower.
"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.
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"Loan Account" shall have the meaning assigned to it in Section 1.12.
"Loan Documents" shall mean the Agreement, the Notes, the Collateral
Documents, the Commitment Letter and all other agreements, instruments,
documents and certificates identified in the Closing Checklist executed and
delivered to, or in favor of, Administrative Agent, Documentation 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 Administrative 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, the Swing Line Loan, the Term
Loan A and the Term Loan B.
"Management Fee" shall have the meaning assigned to it in Section
6.14.
"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, (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 Administrative Agent's Liens, on behalf of
itself, Documentation Agent and Lenders, on the Collateral or the priority of
such Liens, or (d) either Agent's or any Lender's rights and remedies under the
Agreement and the other Loan Documents.
"Maximum Amount" shall mean, at any particular time, an amount equal
to the Revolving Loan Commitment of all Lenders.
"Merger" shall mean the merger of Merger Co. and Holdings with and
into Borrower.
"Merger Co." shall mean Jasdrew Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of Acquisition Co.
"Mortgaged Properties" shall have the meaning assigned to it in Annex
D.
"Mortgages" shall mean each of the mortgages, deeds of trust,
collateral assignments of leases or other real estate security documents
delivered by any Credit Party to Administrative Agent with respect to the
Mortgaged Properties, all in form and substance reasonably satisfactory to
Administrative Agent.
"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
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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 Borrowing Availability" shall mean as of any date of
determination, the lesser of (i) the Maximum Amount and (ii) the Borrowing Base,
in each case less the sum of the Revolving Loan and Swing Line Loan then
outstanding.
"Non-Funding Lender" shall have the meaning assigned to it in Section
9.9(a)(ii).
"Notes" shall mean the Revolving Notes, the Swing Line Note, the Term
A Notes and the Term B 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).
"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 either 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, and solely for purposes of the
Collateral Documents (other than the Guaranty), the Interest Hedge Obligations
owing to any Lender (or any Affiliate of any Lender).
"Overadvance" shall have the meaning assigned to it in Section
1.1(a)(iii). "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.
"Patent Security Agreements" shall mean the Patent Security Agreements
made in favor of Administrative Agent, on behalf of itself, Documentation Agent
and Lenders, by each applicable Credit Party.
"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
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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 or are being contested in good faith in compliance with Section 5.2(b);
(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 which any Credit Party is a party as lessee made in the
ordinary course of business; (d) 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 $6,000,000 at any time, so long as such Liens attach only to Inventory
or Equipment; (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 hereafter created
Liens in favor of Administrative Agent, on behalf of itself, Documentation Agent
and Lenders; (j) Liens expressly permitted under clauses (b) and (c) of Section
6.7 of the Agreement, (k) customary landlord Liens pursuant to leases entered
into in the ordinary course of business which apply to property or assets of the
lessee located at the premises and those landlord Liens imposed by law, and (l)
any and all Liens (including without limitation, mortgages, deeds of trust
and/or ground leases) affecting any Real Estate with respect to which any Credit
Party is a tenant or subtenant, to the extent such Lien(s) were not created or
granted by such Credit Party.
"Permitted Holders" shall mean Chartwell, together with any other
Person controlled by or under common control with Chartwell.
"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.
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"Pledge Agreements" shall mean the Pledge Agreement of even date
herewith executed by Holdings and Borrower in favor of Administrative Agent, on
behalf of itself, Documentation Agent and Lenders.
"Prior Lenders" shall mean (a) the lenders under that certain Amended
and Restated Credit Agreement, dated as of February 16, 1999, by and among
Holdings, Borrower and Fleet National Bank, as agent, as amended by Restated
Credit Agreement Amendment No. 1, dated Xxxxx 0, 0000, (x) the holders of
Holdings' 10% Convertible Debentures due 2004, as set forth on Schedule 1 to
Section 4.3 of the Company Disclosure Schedule to the Agreement and Plan of
Merger dated as of the date hereof by and among Holdings, Acquisition Co. and
Merger Co., and (c) Massachusetts Mutual Life Insurance Company, MassMutual
Corporate Investors, MassMutual Participation Investors, MassMutual Corporate
Value Partners Limited and Xxxxxxx & Co., as holders of Borrower's 12% Senior
Subordinated Notes due March 13, 2005.
"Prior Lender Obligations" shall mean (a) the obligations under that
certain Amended and Restated Credit Agreement, dated as of February 16, 1999, by
and among Holdings, Borrower and Fleet National Bank, as agent, as amended by
Restated Credit Agreement Amendment Xx. 0, xxxxx Xxxxx 0, 0000, (x) Holdings'
10% Convertible Debentures due 2004, and (c) Borrower's 12% Senior Subordinated
Notes due March 13, 2005.
"Proceeds" shall mean "proceeds," as such term is defined in the Code
and, in any event, shall include (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, and (e) any and all other amounts from time to time paid or payable
under or in connection with any of the Collateral, upon disposition or
otherwise.
"Pro Forma" means the unaudited consolidated and consolidating balance
sheet of Borrower and its Subsidiaries as of March 31, 2000 after giving pro
forma effect to the Related Transactions.
"Projections" means Borrower's forecasted consolidated and
consolidating: (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 (including the Swing Line Loan
as a subset of the Swing Line Lender's Revolving Loan), the percentage obtained
by dividing (i) the Revolving Loan
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Commitment (including the Swing Line Commitment as a subset of the Swing Line
Lender's Revolving Loan Commitment), by (ii) the aggregate Revolving Loan
Commitments, as any such percentages may be adjusted by assignments pursuant to
Section 9.1, (b) with respect to the Term Loan A, the percentage obtained by
dividing (i) the Term Loan A Commitment of that Lender by (ii) the aggregate
Term Loan A Commitments of all Lenders, as any such percentages may be adjusted
by assignments permitted pursuant to Section 9.1, (c) with respect to the Term
Loan B, the percentage obtained by dividing (i) the Term Loan B Commitment of
that Lender by (ii) the aggregate Term Loan B Commitments of all Lenders, as any
such percentages may be adjusted by assignments permitted pursuant to Section
9.1, (d) 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 (e) 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.
"Refinancing" shall mean the repayment in full by Borrower of the
Prior Lender Obligations on the Closing Date and the redemption of outstanding
10% Convertible Debentures due 2004 issued by Holdings.
"Refunded Swing Line Loan" shall have the meaning assigned to it in
Section 1.1(c)(iii).
"Related Transactions" means each borrowing under the Revolving Loan
and the Term Loans on the Closing Date, the Acquisition, the Refinancing, all
documents relating to the issuance of the Subordinated Notes, the payment of all
fees, costs and expenses associated with all of the foregoing and the execution
and delivery of all of the Related Transactions Documents.
"Related Transactions Documents" shall mean the Loan Documents, the
Acquisition Agreement, the Subordinated Notes and all other documents executed
in connection therewith.
"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 Lenders having (a) fifty-one percent
(51%) or more of the Commitments of all Lenders, or (b) after the Closing Date,
fifty-one percent (51%) or more of the sum of (i) outstanding Revolving Loan
Commitments plus (ii) the aggregate
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outstanding amount of the Term Loans, or (c) if the Commitments have been
terminated, fifty-one percent (51%) or more of the aggregate outstanding amount
of the Loans.
"Requisite Revolving Lenders" shall mean Lenders having (a) fifty-one
percent (51%) or more of the Revolving Loan Commitments of all Lenders, or (b)
if the Commitments have been terminated, fifty-one percent (51%) or more of the
aggregate outstanding amount of the Revolving Loan.
"Reserves" shall mean, with respect to the Borrowing Base of Borrower
(a) reserves established by Administrative 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 or Borrowing Availability of Borrower which Administrative Agent may,
in its reasonable credit judgment, establish from time to time. Without limiting
the generality of the foregoing, Reserves established to ensure the payment of
accrued Interest Expenses or Indebtedness shall be deemed to be a reasonable
exercise of Administrative 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 or
prepayment of principal of, premium, if any, or interest, fees or other charges
on or with respect to, and any redemption, purchase, retirement, defeasance,
sinking fund or similar payment and any claim for rescission with respect to,
any Subordinated Debt; (d) 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; (e)
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; (f) 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 (g) 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 Credit Advance" shall have the meaning assigned to it in
Section 1.1(a)(i).
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"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 Revolving Lender,
the aggregate commitment of such Revolving Lender to make Revolving Credit
Advances (including without duplication Swing Line Advances as a subset of the
Swing Line Lender's Revolving Loan Commitment) 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 Revolving Lender and (b) as to all
Revolving Lenders, the aggregate commitment of all Revolving Lenders to make
Revolving Credit Advances (including without duplication Swing Line Advances as
a subset of the Swing Line Lender's Revolving Loan Commitment) and/or incur
Letter of Credit Obligations, which aggregate commitment shall be Thirty Million
Dollars ($30,000,000) on the Closing Date, as such amount may be adjusted, if at
all, from time to time in accordance with the Agreement.
"Revolving Note" shall have the meaning assigned to it in Section
1.1(a)(ii).
"Security Agreement" shall mean the Security Agreement of even date
herewith entered into among Administrative Agent, on behalf of itself,
Documentation Agent and Lenders, and each Credit Party that is a signatory
thereto.
"Senior Funded Debt" shall mean Funded Debt other than the
Subordinated Debt.
"Senior Leverage Ratio" shall mean, with respect to Borrower, on a
consolidated basis, the ratio of (a) Senior Funded Debt as of any date of
determination to (b) EBITDA for the twelve months ending on that date of
determination.
"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 taking
into account the timing and the amounts of cash to be received by such Person or
its Subsidiaries from any source and the timing of and amounts of cash to be
payable in respect of or in connection with the debt and liabilities of such
Person and its Subsidiaries; 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 taking
into account the particular capital requirements of such Person and its
projected capital requirement and availability. The amount of contingent
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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, 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).
"Subordinated Debt" shall mean the Indebtedness of Borrower evidenced
by the Subordinated Notes and Guarantees thereof by the Subsidiaries.
"Subordinated Notes" shall mean those certain 18% Senior Subordinated
Notes due 2008 issued by Borrower in an aggregate original principal amount of
$30,000,000 and Guaranties thereof by Holdings and the Subsidiaries of Borrower,
together with the Purchase Agreement (as amended, supplemented or modified from
time to time to the extent permitted by Section 6.18, the "Purchase Agreement"),
dated as of April 13, 2000, among the Company, Holdings, Acquisition Co., the
Subsidiaries parties thereto and GS Mezzanine Partners II, L.P. and GS Mezzanine
Partners Offshore II, L.P., (collectively, the "Purchasers"), the Exchange and
Registration Rights Agreement (as amended, supplemented or modified from time to
time to the extent permitted by Section 6.18, the "Exchange and Registration
Rights Agreement"), dated as of April 12, 2000, among the Company, Holdings,
Acquisition Co., the Subsidiaries parties thereto and the Purchasers and all
certificates, instruments, financial and other statements and other documents
made and delivered in connection therewith. The term "Subordinated Notes" shall
also include all such notes issued in exchange or replacement for the original
Subordinated Notes (including the Replacement Notes (as defined in the Purchase
Agreement) and the Exchange Notes (as defined in the Exchange and Registration
Agreement) and all Exchange Guarantees (as defined in the Exchange and
Registration Rights Agreement) to the extent permitted by Section 6.3(a)(iv).
"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 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.
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"Surety Obligations" means any bonds, including bid bonds, advance
bonds, or performance bonds, letters of credit, warranties, and similar
arrangements between the Credit Party or its Subsidiaries and one or more surety
providers, entered into in the ordinary course of business and for the benefit
of the Credit Party's or its Subsidiaries' suppliers, vendors, insurers, or
customers including, in each case, any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith.
"Swing Line Advance" has the meaning assigned to it in Section
1.1(c)(i).
"Swing Line Availability" has the meaning assigned to it in Section
1.1(c)(i).
"Swing Line Commitment" shall mean, as to the Swing Line Lender, the
commitment of the Swing Line Lender to make Swing Line Loans as set forth on
Annex J to the Agreement, which commitment constitutes a subfacility of the
Revolving Loan Commitment of the Swing Line Lender.
"Swing Line Lender" shall mean GE Capital.
"Swing Line Loan" shall mean at any time, the aggregate amount of
Swing Line Advances outstanding to Borrower.
"Swing Line Note" has the meaning assigned to it in Section
1.1(c)(ii).
"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 or net profits of a Lender of either Agent or a
Lender by the jurisdictions under the laws of which Agents and Lenders are
organized or any political subdivision thereof or which its principal office is
located or in which its principal lending office is located.
"Term A Lenders" shall mean those Lenders having Term Loan A
Commitments.
"Term B Lenders" shall mean those Lenders having Term Loan B
Commitments.
"Term Lenders" shall mean those Lenders having Term Loan A Commitments
or Term Loan B Commitments.
"Term Loan A" shall have the meaning assigned to it in Section
1.1(b)(i).
"Term Loan B" shall have the meaning assigned to it in Section
1.1(b)(i).
"Term Loans" shall have the meaning assigned to it in Section
1.1(b)(i).
"Term Loan A Commitment" shall mean (a) as to any Term A Lender, the
commitment of such Term 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 A Lender, and (b) as to all Term A Lenders, the
aggregate commitment of all Term A Lenders to make the Term Loan A, which
aggregate commitment shall be Twenty-Five Million
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Dollars ($25,000,000) on the Closing Date, as to each of clauses (a) and (b), as
such Term Loan A Commitments may be reduced, amortized or adjusted from time to
time in accordance with the Agreement.
"Term Loan B Commitment" shall mean (a) as to any Term B Lender, the
commitment of such Term 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 B Lender, and (b) as to all Term B Lenders, the aggregate
commitment of all Term B Lenders to make the Term Loan B, which aggregate
commitment shall be Sixty Million Dollars ($60,000,000) on the Closing Date, as
to each of clauses (a) and (b), as such Term Loan B Commitments may be reduced,
amortized or adjusted from time to time in accordance with the Agreement.
"Term Loan Commitment" shall mean, as to any Lender, the aggregate of
such Lender's Term Loan A Commitment and Term Loan B Commitment.
"Term Note" shall have the meaning assigned to it in Section
1.1(b)(i).
"Term A Note" shall have the meaning assigned to it in Section
1.1(b)(i).
"Term B Note" shall have the meaning assigned to it in Section
1.1(b)(i).
"Termination Date" shall mean the date on which the Loans have been
repaid in full and all other Obligations (other than Interest Hedge Obligations)
under the Agreement and the other Loan Documents have been completely discharged
and Letter of Credit Obligations have been cash collateralized, cancelled or
backed by stand-by letters of credit in accordance with Annex B, and Borrower
shall not have any 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 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 Security Agreements" shall mean the Trademark Security
Agreements made in favor of Administrative Agent, on behalf of itself,
Documentation Agent and Lenders, by each applicable Credit Party.
"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.
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"Trademarks" shall mean all of the following now owned or hereafter
acquired by any Credit Party: (a) all trademarks, trade names, corporate 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.
"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.
"Year 2000 Date-Sensitive System/Component" shall mean, as to any
Person, any em software, network software, applications software, data base,
computer file, embedded microchip, firmware or hardware that accepts, creates,
manipulates, sorts, sequences, calculates, compares or outputs calendar-related
data accurately; such systems and components shall include, without limitation,
mainframe computers, file server/client systems, computer workstations, routers,
hubs, other network-related hardware, and other computer-related software,
firmware or hardware and information processing and delivery systems of any kind
and telecommunications systems and other communications processors, security
systems, alarms, elevators and HVAC systems.
"Year 2000 Problems" shall mean, with respect to each Credit Party,
limitations on the capacity or readiness of any such Credit Party's Year 2000
Date-Sensitive Systems/Components to accurately accept, create, manipulate,
sort, sequence, calculate, compare or output calendar date information with
respect to calendar year 1999 or any subsequent calendar year beginning on or
after January 1, 2000 (including leap year computations), including, without
limitation, exchanges of information among Year 2000 Date-Sensitive
Systems/Components of the Credit Parties and exchanges of information among the
Credit Parties and Year 2000 Date-Sensitive Systems/Components of Third Party
Interactives and functionality of peripheral interfaces, firmware and embedded
microchips.
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
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"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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XXXXX B (SECTION 1.2)
TO
CREDIT AGREEMENT
LETTERS OF CREDIT
(a) Issuance. Subject to the terms and conditions of the Agreement,
Administrative 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 Administrative Agent in its reasonable discretion (each, an "L/C
Issuer")) for Borrower's account and guaranteed by Administrative Agent;
provided, however, that if the L/C Issuer is a Revolving Lender, then such
Letters of Credit shall not be guaranteed by Administrative 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 Administrative 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)
Five Million Dollars ($5,000,000) (the "L/C Sublimit"), and (ii) the Maximum
Amount less the aggregate outstanding principal balance of the Revolving Credit
Advances and the Swing Line Loan, and (iii) the Borrowing Base less the
aggregate outstanding principal balance of the Revolving Credit Advances and the
Swing Line Loan. No such Letter of Credit shall have an expiry date which is
more than one year following the date of issuance thereof, and neither
Administrative 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) Advances Automatic; Participations. (i) In the event that
Administrative 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 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 Administrative Agent
for Administrative Agent's own account its Pro Rata Share of any such Revolving
Credit Advance or payment by Administrative 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 Administrative 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.
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 reimbursement obligations owed to an L/C Issuer, or if the
L/C Issuer is a Revolving Lender, then (i) immediately and without further
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whatsoever, each Revolving Lender shall be deemed to have irrevocably and
unconditionally purchased from Administrative 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 Administrative 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 Administrative Agent
for the benefit of Revolving Lenders cash or cash equivalents acceptable to
Administrative 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. Such funds or Cash Equivalents shall be held by Administrative
Agent in a cash collateral account (the "Cash Collateral Account") maintained at
a bank or financial institution acceptable to Administrative Agent. The Cash
Collateral Account shall be in the name of Borrower and shall be pledged to, and
subject to the control of, Administrative Agent, for the benefit of itself,
Documentation Agent and Lenders, in a manner satisfactory to Administrative
Agent. Borrower hereby pledges and grants to Administrative Agent, on behalf of
itself, Documentation Agent and 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 guarantee 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
Administrative Agent in its sole discretion.
From time to time after funds are deposited in the Cash Collateral
Account by Borrower, whether before or after the Commitment Termination Date,
Administrative 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
Administrative Agent may elect, as shall be or shall become due and payable by
Borrower to Lenders with respect to such Letter of Credit
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111
Obligations of Borrower and, upon the satisfaction in full of all Letter of
Credit Obligations of Borrower, to any other Obligations 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 Administrative 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
Administrative 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") at a rate equal to
the Applicable L/C Margin 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 Administrative 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 Administrative 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 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
Administrative 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 Administrative 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, Administrative Agent and the L/C Issuer.
(f) Obligation Absolute. The obligation of Borrower to reimburse
Administrative 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 Administrative 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:
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(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 its 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),
Administrative 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 its 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 Administrative 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 Administrative 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 Administrative 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 Administrative Agent
or any Lender seeking indemnification or of any L/C Issuer to honor a demand for
payment under any 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
Administrative Agent or such Lender (as finally determined by a court of
competent jurisdiction).
(ii) As between Administrative 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
Administrative Agent nor any Lender shall be responsible: (A) for the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
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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
Administrative Agent under any Letter of Credit or guaranty thereof,
Administrative 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 Administrative Agent or
any Lender. None of the above shall affect, impair, or prevent the vesting of
any of Administrative 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 Borrower and such L/C Issuer.
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ANNEX C (SECTION 1.8)
TO
CREDIT AGREEMENT
CASH MANAGEMENT SYSTEMS
Each Credit Party shall, and shall cause its Subsidiaries to,
establish and maintain the Cash Management Systems described below:
(a) On or before the Closing Date and until the Termination Date,
Borrower shall (i) establish lock boxes ("Lock Boxes") at one or more of the
banks set forth on Disclosure Schedule (3.19), and shall request in writing
within thirty (30) days after the Closing Date 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 (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"). On or before the Closing Date, Borrower shall have
established a concentration account in its name (the "Concentration Account") at
the bank which shall be designated as the Concentration Account bank for
Borrower on Disclosure Schedule (3.19) (the "Concentration Account Bank") which
bank shall be satisfactory to Administrative Agent.
(b) On or before the Closing Date (or such later date as
Administrative Agent shall consent to in writing), the Concentration Account
Bank, each bank where a Disbursement Account is located and all other
Relationship Banks, shall have entered into tri-party blocked account agreements
with Administrative Agent, for the benefit of itself, Documentation Agent and
Lenders, and Borrower and Subsidiaries thereof, as applicable, in form and
substance acceptable to Administrative 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 Concentration Account are held by such bank as
agent or bailee-in-possession for Administrative Agent, on behalf of itself,
Documentation Agent and 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 (A) with
respect to banks at which a Borrower Account is located, such bank agrees, from
and after the receipt of a notice (an "Activation Notice") from Administrative
Agent (which Activation Notice may be given by Administrative Agent at any time
at which (1) a Default or Event of Default shall have occurred and be
continuing, (2) Administrative Agent reasonably believes based upon information
available to it that a Default or an Event of Default is likely to occur; (3) if
amounts are outstanding under the Revolving Credit Loan, Administrative Agent
reasonably believes that an event or circumstance has occurred which is likely
to have a Material Adverse Effect, or (4) Administrative Agent reasonably has
grounds to
115
question the integrity of Borrower's Cash Management Systems or Borrower's
compliance with the provisions of this Annex C or any other provisions of the
Loan Documents to the extent related to such Cash Management Systems (any of the
foregoing being referred to herein as an "Activation Event")), to forward
immediately all amounts in each Borrower Account to the Concentration Account
Bank and to commence the process of daily sweeps from such Borrower Account into
the Concentration Account and (B) with respect to the Concentration Account
Bank, such bank agrees from and after the receipt of an Activation Notice from
Administrative Agent upon the occurrence of an Activation Event, to immediately
forward all amounts received in the Concentration Account to the Collection
Account through daily sweeps from such Concentration Account into the Collection
Account. From and after the date Administrative Agent has delivered an
Activation Notice to any bank with respect to any Borrower Account(s), 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 Concentration
Account or any Disbursement Account; provided, however, that (i) Administrative
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, Borrower and/or the Subsidiaries thereof, as
applicable, and such bank shall have executed and delivered to Administrative
Agent a tri-party blocked account agreement, in form and substance satisfactory
to Administrative 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 Administrative Agent that the
creditworthiness of any bank holding an account is no longer acceptable in
Administrative Agent's reasonable judgment, or as promptly as practicable and in
any event within sixty (60) days of notice from Administrative 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 Administrative Agent's liability under any tri-party blocked account
agreement with such bank is no longer acceptable in Administrative Agent's
reasonable judgment.
(d) The Lock Boxes, Borrower Accounts, Disbursement Accounts and the
Concentration 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 Administrative Agent, on behalf of itself,
Documentation Agent and Lenders, pursuant to the Security Agreement.
(e) All amounts deposited in the Collection Account shall be deemed
received by Administrative Agent in accordance with Section 1.10 of the
Agreement and shall be applied (and allocated) by Administrative 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.
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(f) Borrower may maintain, in its name, an account (each a
"Disbursement Account" and collectively, the "Disbursement Accounts") at a bank
acceptable to Administrative Agent into which Administrative Agent shall, from
time to time, deposit proceeds of Revolving Credit Advances and Swing Line
Advances made to Borrower pursuant to Section 1.1 for use by Borrower solely in
accordance with the provisions of Section 1.4.
(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 Administrative
Agent, for the benefit of itself and Lenders, all checks, cash and other items
of payment 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
checks, cash or other items or payment, deposit the same into a Borrower
Account. Borrower and each Related Person thereof acknowledges and agrees that
all cash, checks or items of payment constituting proceeds of Collateral are the
property of Administrative Agent and Lenders. All proceeds of the sale or other
disposition of any Collateral, shall be deposited directly into Borrower
Accounts.
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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 Administrative Agent in form and substance satisfactory to
Administrative 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 Administrative Agent.
B. Revolving Notes, Swing Line Note, Term A Notes and Term B Notes.
Duly executed originals of the Revolving Notes, Swing Line Note, Term A Notes
and Term B Notes for each applicable Lender, dated the Closing Date.
C. Security Agreement. Duly executed originals of the Security
Agreement, dated the Closing Date, 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 Administrative Agent, in favor of Administrative Agent, on
behalf of itself, Documentation Agent and Lenders.
E. Security Interests and Code Filings. (a) Evidence satisfactory to
Administrative Agent that Administrative Agent (for the benefit of itself,
Documentation Agent and Lenders) has 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 Administrative Agent may request in order to perfect its
security interests in the Collateral and (ii) copies of Code search reports
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, except for those relating to the Prior Lender Obligations (all of
which shall be terminated on the Closing Date) and Permitted Encumbrances.
(b) Evidence satisfactory to Administrative 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.
(c) Control Letters from (i) all issuers of uncertificated securities
and financial assets held by Borrower, (ii) all securities intermediaries with
respect to all securities accounts
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and securities entitlements of Borrower, and (iii) all futures commission agents
and clearing houses with respect to all commodities contracts and commodities
accounts held by Borrower.
F. Payoff Letter; Termination Statements. Copies of a duly executed
payoff letter, in form and substance satisfactory to Administrative Agent, by
and between all parties to the Prior Lender loan documents evidencing repayment
in full of all Prior Lender Obligations, together with (a) UCC-3 or other
appropriate termination statements, in form and substance satisfactory to
Administrative Agent, manually signed by the Prior Lender releasing all liens of
Prior Lender upon any of the personal property of each Credit Party, and (b)
termination of all blocked account agreements, bank agency agreements or other
similar agreements or arrangements or arrangements in favor of Prior Lender or
relating to the Prior Lender Obligations.
G. Intellectual Property Security Agreements. Duly executed originals
of Trademark Security Agreements, Copyright Security Agreements and Patent
Security Agreements, each dated the Closing Date and signed by each Credit Party
which owns Trademarks, Copyrights and/or Patents, as applicable, all in form and
substance satisfactory to Administrative Agent, together with all instruments,
documents and agreements executed pursuant thereto.
H. Guaranty. Duly executed originals of the Guaranty, dated the
Closing Date and signed by Holdings and Heartland, and all documents,
instruments and agreements executed pursuant thereto.
I. Initial Borrowing Base Certificate. Duly executed originals of an
initial Borrowing Base Certificate from Borrower, dated the Closing Date,
reflecting information concerning Eligible Accounts and Eligible Inventory of
Borrower as of a date not more than [seven (7)] days prior to the Closing Date.
J. Initial Notice of Revolving Credit Advance. Duly executed originals
of a Notice of Revolving Credit Advance, dated the Closing Date, with respect to
the initial Revolving Credit Advance to be requested by Borrower on the Closing
Date.
K. Letter of Direction. Duly executed originals of a letter of
direction from Borrower addressed to Administrative Agent, on behalf of itself
and Lenders, with respect to the disbursement on the Closing Date of the
proceeds of the Term Loans and the initial Revolving Credit Advance.
L. Cash Management System; Blocked Account Agreements. Evidence
satisfactory to Administrative 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 Administrative Agent, with the banks as required by
Annex C.
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M. Charter and Good Standing. For each Credit Party, such Person's (a)
charter 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.
N. Bylaws and Resolutions. For each Credit Party, (a) such Person's
bylaws, together with all amendments thereto and (b) resolutions of such
Person's Board of Directors, 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 corporate secretary or an assistant secretary as
being in full force and effect without any modification or amendment.
O. Incumbency Certificates. For each 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 corporate
secretary or an assistant secretary as being true, accurate, correct and
complete.
P. Opinions of Counsel. Duly executed originals of opinions of Akin,
Gump, Strauss, Xxxxx & Xxxx LLP, counsel for the Credit Parties, together with
any local counsel opinions requested by Administrative Agent, each in form and
substance satisfactory to Administrative 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
opinion to Administrative Agent, on behalf of itself, Documentation Agent and
Lenders, and to include in such opinion an express statement to the effect that
Agents and Lenders are authorized to rely on such opinion.
Q. Pledge Agreement. Duly executed originals of the Pledge Agreement
dated the Closing Date and signed by Holdings and Borrower, accompanied by (as
applicable) (a) share certificates representing all of the outstanding Stock
being pledged pursuant to the Pledge Agreement and stock powers for such share
certificates executed in blank and (b) the original Intercompany Notes and other
instruments evidencing Indebtedness being pledged pursuant to the Pledge
Agreement, duly endorsed in blank.
R. 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 Administrative Agent and Lenders in
accordance with Section 4.2, and a letter from such auditors acknowledging
Lenders' reliance on the auditor's certification of past and future Financial
Statements.
S. Solvency. Borrower shall deliver to Administrative Agent both (i) a
solvency opinion from Xxxxxxxx Xxxxx Xxxxxx & Xxxxx, Inc. addressed to
Administrative Agent, Lenders under this Agreement and the Purchasers under the
Subordinated Notes, and (ii) a certificate of the Chief Financial Officer of
Borrower, certifying that both before and after giving
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effect to (a) 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, (c) the Acquisition, the
Refinancing and the consummation of the other Related Transactions and (d) the
payment and accrual of all transaction costs in connection with the foregoing,
each Credit Party is Solvent.
T. Officer's Certificate. Administrative Agent shall have received
duly executed originals of a certificate of the Chief Executive Officer and
Chief Financial Officer of each Credit Party, dated the Closing Date, stating
that, since December 31, 1999 (a) no event or condition has occurred or is
existing which could reasonably be expected to have a Material Adverse Effect;
(b) there has been no material adverse change in the industry in which such
Credit Party operates; (c) 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 such Credit Party; and (e) there
has been no material increase in liabilities, liquidated or contingent, and no
material decrease in assets of such Credit Party or any of its Subsidiaries.
U. Waivers. Administrative Agent, on behalf of Lenders, shall have
received landlord waivers and consents, bailee letters and mortgagee agreements
in form and substance satisfactory to Administrative Agent, in each case as
required pursuant to Section 5.9.
V. Mortgages. Within 30 days after the Closing Date, Mortgages
covering all of the owned Real Estate (the "Mortgaged Properties") together
with: (a) title insurance policies, current as-built surveys, zoning letters and
certificates of occupancy, in each case reasonably satisfactory in form and
substance to Administrative Agent; and (b) an opinion of counsel in each state
in which any Mortgaged Property is located in form and substance and from
counsel reasonably satisfactory to Administrative Agent.
W. Subordination and Intercreditor Agreements. Administrative Agent
and Lenders shall have received any and all subordination and/or intercreditor
agreements, all in form and substance reasonably satisfactory to Administrative
Agent, in its sole discretion, as Administrative Agent shall have deemed
necessary or appropriate with respect to any Indebtedness of any Credit Party,
including, without limitation, under the Subordinated Notes, the provisions of
which as contained therein, are acceptable to Administrative Agent.
X. Environmental Reports. Administrative Agent shall have received
Phase I Environmental Site Assessment Reports, consistent with American Society
of Testing and Materials (ASTM) Standard E 1527-94, and applicable state
requirements, on all of the Real Estate, dated no more than 6 months prior to
the Closing Date, prepared by environmental engineers satisfactory to
Administrative Agent, all in form and substance satisfactory to Administrative
Agent, in its sole discretion; and Administrative Agent shall have further
received such environmental review and audit reports, including Phase II
reports, with respect to the Real Estate of any Credit Party as Administrative
Agent shall have requested, and Administrative Agent shall be satisfied, in its
sole discretion, with the contents of all such environmental reports.
Administrative Agent shall have received letters executed by the
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environmental firms preparing such environmental reports, in form and substance
satisfactory to Administrative Agent, authorizing Administrative Agent and
Lenders to rely on such reports.
Y. Audited Financials; Financial Condition. Administrative Agent shall
have received Holdings' final Financial Statements for its Fiscal Year ended
December 31, 1999, audited by Ernst & Young LLP. Borrower shall have provided
Administrative Agent with its current operating statements, a consolidated and
consolidating balance sheet and statement of cash flows, the Pro Forma,
Projections and a Borrowing Base Certificate with respect to Borrower certified
by its Chief Financial Officer, in each case in form and substance satisfactory
to Administrative Agent, and Administrative Agent shall be satisfied, in its
sole discretion, with all of the foregoing. Administrative Agent shall have
further received a certificate of the Chief Executive Officer and/or the Chief
Financial Officer of Borrower, based on such Pro Forma and Projections, to the
effect that (a) the Pro Forma fairly presents the financial condition of
Borrower as of the date thereof after giving effect to the transactions
contemplated by the Related Transactions Documents and shows that the
stockholders common equity of Borrower as of the Closing Date is not less than
$60,000,000 and the pro forma EBITDA of Borrower, after giving effect to the
adjustments provided in Disclosure Schedule (A-EBITDA), as of December 31, 1999
is at least $28,100,000; (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; it being recognized that any forward looking
statements contained therein are inherently subject to risk and uncertainties,
many of which cannot be predicted with accuracy; (c) as of March 31, 2000 and
after giving pro forma effect to the transactions contemplated by the Loan
Documents, the Borrower shall have a Leverage Ratio for the 12-month period then
ended of not more than 4.60:1.0 and a Senior Leverage Ratio for such period of
not more than 3.60:1.0; and (d) containing such other statements with respect to
the solvency of Borrower and matters related thereto as Administrative Agent
shall request.
Z. Other Documents. Such other certificates, documents and agreements
respecting any Credit Party as Administrative Agent may, in its sole discretion,
reasonably 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 Administrative
Agent or to Administrative Agent and Lenders, as indicated, the following:
(a) Monthly Financials. To Administrative Agent and Lenders, within
thirty (30) days after the end of each Fiscal Month, financial information
regarding Holdings, Borrower and their Subsidiaries, certified by the Chief
Financial Officer of Borrower, consisting of consolidated and consolidating (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; (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
Annual Plan or Budget for such Fiscal Year, all prepared in accordance with GAAP
(subject to normal year-end adjustments and the absence of footnotes); and (iii)
a summary of the outstanding balance of all Intercompany Notes as of the last
day of that Fiscal Month. 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 and consolidating basis, in each case as at
the end of such month and for the period then ended and (ii) any other
information presented in clause (iii) above 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 Administrative Agent and Lenders, within
forty-five (45) days after the end of each Fiscal Quarter, consolidated and
consolidating financial information regarding Holdings, Borrower and their
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 Annual Plan or Budget for such Fiscal Year, all
prepared in accordance with GAAP (subject to normal year-end adjustments and the
absence of footnotes). 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 a Compliance Certificate in
respect of 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
123
consolidated and consolidating basis, as at the end of such Fiscal Quarter and
for the period then ended, (ii) any other information in clause (iii) of
paragraph (a) above 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
Administrative 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 Projections 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 Administrative Agent and Lenders, 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 following year, 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 following year 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 Administrative Agent and Lenders,
within ninety (90) days after the end of each Fiscal Year, audited Financial
Statements for Holdings, Borrower and their Subsidiaries on a consolidated and
(unaudited) consolidating 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 Administrative 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) which report may be limited to the extent required by
accounting rules or guidelines, 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 Administrative Agent, on behalf of itself and Lenders, in form and
substance reasonably satisfactory to Administrative Agent and subject to
standard qualifications taken by nationally recognized accounting firms, signed
by such accounting firm acknowledging that Administrative 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 position, results of
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operations and statements of cash flows of Borrower and its Subsidiaries on a
consolidated and consolidating 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 Administrative Agent and Lenders, 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 Administrative Agent and Lenders, 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 Administrative Agent and
Lenders, 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) Subordinated Debt and Equity Notices. To Administrative Agent, as
soon as practicable, copies of all material written notices given or received by
any Credit Party with respect to any Subordinated Debt or Stock of such Person,
and, within two (2) Business Days after any Credit Party obtains knowledge of
any matured or unmatured event of default with respect to any Subordinated Debt,
notice of such event of default;
(i) Supplemental Schedules. To Administrative Agent, supplemental
disclosures, if any, required by Section 5.6 of the Agreement;
(j) Litigation. To Administrative Agent in writing, promptly upon
learning thereof, notice of any Litigation commenced or threatened against any
Credit Party that (i) seeks damages in excess of $1,000,000 whether or not
covered by insurance, (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;
(k) Insurance Notices. To Administrative Agent, disclosure of losses
or casualties required by Section 5.4 of the Agreement;
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000
(x) Lease Default Notices. To Administrative Agent, copies of (i) any
and all default notices received under or with respect to any leased location or
public warehouse where Collateral is located, and (ii) such other notices or
documents as Administrative Agent may request in its reasonable discretion;
(m) Lease Amendments. To Administrative Agent, copies of all material
amendments to real estate leases involving annual payments of more than
$300,000; and
(n) Other Documents. To Administrative 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, request.
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ANNEX F (SECTION 4.1(b))
TO
CREDIT AGREEMENT
COLLATERAL REPORTS
Borrower shall deliver or cause to be delivered the following:
(a) To Administrative 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:
(i) a Borrowing Base Certificate with respect to Borrower, accompanied
by such supporting detail and documentation as shall be requested by
Administrative Agent in its reasonable discretion;
(ii) with respect to Borrower, 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 Administrative
Agent in its reasonable discretion; and
(iii) with respect to Borrower, 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 Administrative Agent in its
reasonable discretion;
(b) To Administrative 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 Administrative Agent in its reasonable discretion;
(c) To Administrative 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 Administrative Agent in its reasonable
discretion;
(d) To Administrative Agent, at the time of delivery of each of the
quarterly 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
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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 Administrative
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 Administrative Agent, conduct, and deliver
the results of, such physical verifications as Administrative Agent may
require);
(f) Borrower, at its own expense, shall deliver to Administrative
Agent such appraisals of its assets as Administrative Agent may request at any
time after the occurrence and during the continuance of a Default or an Event of
Default, such appraisals to be conducted by an appraiser, and in form and
substance, satisfactory to Administrative Agent; and
(g) Such other reports, statements and reconciliations with respect to
the Borrowing Base or Collateral of any or all Credit Parties as Administrative
Agent shall from time to time request in its reasonable discretion.
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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. Borrower 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 ending December 31, 2000 $7,000,000
Fiscal Year ending December 31, 2001 $7,000,000
Fiscal Year ending December 31, 2002 $7,000,000
Fiscal Year ending December 31, 2003 $8,000,000
Fiscal Year ending December 31, 2004 $8,000,000
Each Fiscal Year thereafter $8,000,000
(b) Minimum Fixed Charge Coverage Ratio. Borrower and its Subsidiaries
shall have on a consolidated basis at the end of each Fiscal Quarter set forth
below, a Fixed Charge Coverage Ratio for the 12-month period then ended of not
less than the following:
1.05:1:00 for the Fiscal Quarter ending June 30, 2000;
1.05:1.00 for the Fiscal Quarter ending September 30, 2000;
1.05:1.00 for the Fiscal Quarter ending December 31, 2000
1.05:1.00 for the Fiscal Quarter ending March 31, 2001;
1.05:1.00 for the Fiscal Quarter ending June 30, 2001
1.05:1.00 for the Fiscal Quarter ending September 30, 2001;
1.05:1.00 for the Fiscal Quarter ending December 31, 2001;
1.05:1.00 for the Fiscal Quarter ending March 31, 2002;
1.05:1.00 for the Fiscal Quarter ending June 30, 2002;
1.10:1.00 for the Fiscal Quarter ending September 30, 2002;
1.10:1.00 for the Fiscal Quarter ending December 31, 2002;
1.10:1.00 for the Fiscal Quarter ending March 31, 2003;
1.10:1.00 for the Fiscal Quarter ending June 30, 2003;
1.15:1.00 for the Fiscal Quarter ending September 30, 2003;
1.15:1.00 for the Fiscal Quarter ending December 31, 2003;
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1.15:1.00 for the Fiscal Quarter ending March 31, 2004;
1.15:1.00 for the Fiscal Quarter ending June 30, 2004;
1.15:1.00 for the Fiscal Quarter ending September 30, 2004;
1.15:1.00 for the Fiscal Quarter ending December 31, 2004; and
1.15 for each Fiscal Quarter ending thereafter.
(c) Minimum EBITDA. Borrower 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 of not less than the following:
$28,000,000 for the Fiscal Quarter ending June 30, 2000;
$28,000,000 for the Fiscal Quarter ending September 30, 2000;
$28,000,000 for the Fiscal Quarter ending December 31, 2000;
$28,000,000 for the Fiscal Quarter ending March 31, 2001;
$29,000,000 for the Fiscal Quarter ending June 30, 2001;
$30,500,000 for the Fiscal Quarter ending September 30, 2001;
$32,000,000 for the Fiscal Quarter ending December 31, 2001;
$32,500,000 for the Fiscal Quarter ending March 31, 2002;
$34,000,000 for the Fiscal Quarter ending June 30, 2002;
$34,500,000 for the Fiscal Quarter ending September 30, 2002;
$35,500,000 for the Fiscal Quarter ending December 31, 2002;
$36,000,000 for the Fiscal Quarter ending March 31, 2003;
$37,000,000 for the Fiscal Quarter ending June 30, 2003;
$38,500,000 for the Fiscal Quarter ending September 30, 2003;
$39,500,000 for the Fiscal Quarter ending December 31, 2003;
$40,000,000 for the Fiscal Quarter ending March 31, 2004;
$41,000,000 for the Fiscal Quarter ending June 30, 2004;
$42,000,000 for the Fiscal Quarter ending September 30, 2004;
$42,500,000 for the Fiscal Quarter ending December 31, 2004; and
$42,500,000 for each Fiscal Quarter ending thereafter.
(d) Maximum Leverage Ratio. Borrower 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 more than the following:
5.00:1:00 for the Fiscal Quarter ending June 30, 2000;
5.00:1.00 for the Fiscal Quarter ending September 30, 2000;
4.75:1.00 for the Fiscal Quarter ending December 31, 2000;
4.75:1.00 for the Fiscal Quarter ending March 31, 2001;
4.75:1.00 for the Fiscal Quarter ending June 30, 2001;
4.75:1.00 for the Fiscal Quarter ending September 30, 2001;
4.00:1.00 for the Fiscal Quarter ending December 31, 2001;
4.00:1.00 for the Fiscal Quarter ending March 31, 2002;
4.00:1.00 for the Fiscal Quarter ending June 30, 2002;
3.75:1.00 for the Fiscal Quarter ending September 30, 2002;
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3.50:1.00 for the Fiscal Quarter ending December 31, 2002;
3.50:1.00 for the Fiscal Quarter ending March 31, 2003;
3.50:1.00 for the Fiscal Quarter ending June 30, 2003;
3.50:1.00 for the Fiscal Quarter ending September 30, 2003;
3.25:1.00 for the Fiscal Quarter ending December 31, 2003;
3.25:1.00 for the Fiscal Quarter ending March 31, 2004;
3.00:1.00 for the Fiscal Quarter ending June 30, 2004;
3.00:1.00 for the Fiscal Quarter ending September 30, 2004;
3.00:1.00 for the Fiscal Quarter ending December 31, 2004; and
3.00:100 for each Fiscal Quarter thereafter.
(e) Maximum Senior Leverage Ratio. Borrower and its Subsidiaries on a
consolidated basis shall have, at the end of each Fiscal Quarter set forth
below, a Senior Leverage Ratio as of the last day of such Fiscal Quarter and for
the 12-month period then ended of not more than the following:
4:00:1:00 for the Fiscal Quarter ending June 30, 2000;
4.00:1.00 for the Fiscal Quarter ending September 30, 2000;
3.75:1.00 for the Fiscal Quarter ending December 31, 2000;
3.75:1.00 for the Fiscal Quarter ending March 31, 2001;
3.75:1.00 for the Fiscal Quarter ending June 30, 2001;
3.75:1.00 for the Fiscal Quarter ending September 30, 2001;
3.00:1.00 for the Fiscal Quarter ending December 31, 2001;
3.00:1.00 for the Fiscal Quarter ending March 31, 2002;
3.00:1.00 for the Fiscal Quarter ending June 30, 2002;
2.75:1.00 for the Fiscal Quarter ending September 30, 2002;
2.50:1.00 for the Fiscal Quarter ending December 31, 2002;
2.50:1.00 for the Fiscal Quarter ending March 31, 2003;
2.50:1.00 for the Fiscal Quarter ending June 30, 2003;
2.50:1.00 for the Fiscal Quarter ending September 30, 2003;
2.25:1.00 for the Fiscal Quarter ending December 31, 2003;
2.25:1.00 for the Fiscal Quarter ending March 31, 2004;
2.00:1.00 for the Fiscal Quarter ending June 30, 2004;
2.00:1.00 for the Fiscal Quarter ending September 30, 2004;
2.00:1.00 for the Fiscal Quarter ending December 31, 2004; and
2.00:1.00 for each Fiscal Quarter thereafter.
(f) Minimum Interest Coverage Ratio. Borrower and its Subsidiaries on
a consolidated basis shall have at the end of each Fiscal Quarter set forth
below, an Interest Coverage Ratio for the 12-month period then ended of not less
than the following:
2.00:1:00 for the Fiscal Quarter ending June 30, 2000;
2.00:1.00 for the Fiscal Quarter ending September 30, 2000;
2.00:1.00 for the Fiscal Quarter ending December 31, 2000;
2.00:1.00 for the Fiscal Quarter ending March 31, 2001;
2.00:1.00 for the Fiscal Quarter ending June 30, 2001;
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2.00:1.00 for the Fiscal Quarter ending September 30, 2001;
2.25:1.00 for the Fiscal Quarter ending December 31, 2001;
2.25:1.00 for the Fiscal Quarter ending March 31, 2002;
2.25:1.00 for the Fiscal Quarter ending June 30, 2002;
2.25:1.00 for the Fiscal Quarter ending September 30, 2002;
2.50:1.00 for the Fiscal Quarter ending December 31, 2002;
2.50:1.00 for the Fiscal Quarter ending March 31, 2003;
2.50:1.00 for the Fiscal Quarter ending June 30, 2003;
2.50:1.00 for the Fiscal Quarter ending September 30, 2003;
3.00:1.00 for the Fiscal Quarter ending December 31, 2003;
3.00:1.00 for the Fiscal Quarter ending March 31, 2004;
3.00:1.00 for the Fiscal Quarter ending June 30, 2004;
3.00:1.00 for the Fiscal Quarter ending September 30, 2004;
3.00:1.00 for the Fiscal Quarter ending December 31, 2004; and
3.00:100 for each Fiscal Quarter thereafter.
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 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, Administrative 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 Administrative 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
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132
extent of such Accounting Change, refer to GAAP, consistently applied after
giving effect to the implementation of such Accounting Change. If Administrative
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.
For purposes of the calculations above, pro forma effect shall be
given to each Designated Acquisition as if it had occurred twelve (12) months
prior to the end of the most recently ended Fiscal Quarter.
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ANNEX H (SECTION 1.1(d))
TO
CREDIT AGREEMENT
LENDERS' WIRE TRANSFER INFORMATION
To GE Capital:
Payment to: Bankers Trust Company
0 Xxxxxxx Xxxxx Xxxxx
Xxx Xxxx, XX 00000
POC: Xxxxx Xxxxx
000-000-0000
ABA#: 000-000-000
Account Name: GECC - PlayCore
Account Number: 00-000-000
To IndoSuez:
Payment to: Citibank, N.A. - New York
ABA #: 000-000-000
Swift Code: XXXXXX00
Account: 361 42 537
Name: Credit Agricole Indosuez Chicago Branch CAI-CAP
134
ANNEX I (SECTION 11.10)
TO
CREDIT AGREEMENT
NOTICE ADDRESSES
(A) If to Administrative Agent or GE Capital, at
General Electric Capital Corporation
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Account Manager-PlayCore
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
- and -
General Electric Capital Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Corporate Counsel-Commercial Finance
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
with copies to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx X. Xxxxxxx, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
(B) If to Documentation Agent or Indosuez, at
135
Credit Agricole Indosuez
Indosuez Capital
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxx, Vice President
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
(C) If to Borrower, at
PlayCore Wisconsin, Inc.
Riverfront Centre
00 Xxxx Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: President
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
With copies to:
PlayCore Holdings, Inc.
c/o Chartwell Investments II, LLC
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
- and -
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
0000 Xxx Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxxx X. Xxxxx, Xx., Esq.
Telecopier No.: (000) 000-0000
Telephone No. (000) 000-0000
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ANNEX J (FROM ANNEX A - COMMITMENTS DEFINITION)
TO
CREDIT AGREEMENT
Lender(s):
General Electric Capital Corporation
Revolving Loan Commitment (including a Swing Line
Commitment of $5,000,000): $30,000,000
Term Loan A Commitment: $25,000,000
Term Loan B Commitment: $35,000,000
Credit Agricole Indosuez
Term Loan B Commitment: $25,000,000
