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LOAN AND SECURITY AGREEMENT
BY AND AMONG
3D SYSTEMS CORPORATION
AND
EACH OF ITS SUBSIDIARIES THAT ARE SIGNATORIES HERETO
AS BORROWERS,
THE LENDERS THAT BECOME MEMBERS OF THE LENDER GROUP
AS THE LENDERS,
AND
U.S. BANK NATIONAL ASSOCIATION
AS THE ARRANGER AND ADMINISTRATIVE AGENT
DATED AS OF MAY 21, 2001
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LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this "Agreement"), is entered into
as of May 21, 2001, between and among, on the one hand U.S. BANK NATIONAL
ASSOCIATION, as a lender and as the arranger and administrative agent ("Agent")
for the lenders that become members of the Lender Group pursuant to the terms of
this Agreement (such lenders, together with their respective successors and
assigns, are referred to hereinafter each individually as a "Lender" and
collectively as the "Lenders"), and, on the other hand, 3D SYSTEMS CORPORATION,
a Delaware corporation ("Parent"), and each of Parent's Subsidiaries identified
on the signature pages hereof (such Subsidiaries, together with Parent, are
referred to hereinafter each individually as a "Borrower," and individually and
collectively, jointly and severally, as the "Borrowers").
PREAMBLE
Tiger Deals, Inc., intends to acquire DTM Corporation (the
"Acquisition") pursuant to the Agreement and Plan of Merger, dated as of April
2, 2001, among Parent, Tiger Deals, Inc. and DTM Corporation (the "Merger
Agreement"). Pursuant to the terms of the Merger Agreement, Tiger commenced a
tender offer (the "Tender Offer") to purchase all of the issued and outstanding
shares of common stock of DTM Corporation for $5.80 per share, net to the seller
in cash without interest and less any required withholding taxes. As soon as
practicable following consummation of the Tender Offer, Tiger will merge with
and into DTM Corporation (the "Merger"), Tiger shall cease to exist, DTM
Corporation shall survive the Merger, and DTM Corporation will become a party to
this Agreement as a Borrower. Upon effectiveness of the Merger, subject to
shareholders' appraisal rights, each issued and outstanding share of common
stock of DTM Corporation (except shares held in the treasury of DTM Corporation
or held by Parent or Tiger or any other subsidiary of Parent) not acquired in
the Tender Offer will be converted into the right to receive $5.80 per common
share in cash. Each outstanding and unexercised option to purchase shares of
common stock of DTM Corporation, whether vested or unvested, will be converted
into an obligation of DTM Corporation to pay an amount equal to the product of
(a) $5.80 less the exercise price of the option and (b) the number of shares
underlying the option. Borrowers have requested that the Lenders finance the
transactions contemplated by the Merger Agreement and, following the completion
of the Merger, that the Lenders provide Borrowers with a working capital loan
facility.
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. As used in this Agreement, the following terms shall
have the following definitions:
"Account Debtor" means any Person who is or who may become obligated
under, with respect to, or on account of, an Account, chattel paper, or a
General Intangible.
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"Accounts" means all of Borrowers' now owned or hereafter acquired
right, title, and interest with respect to "accounts" (as that term is defined
in the Code), and any and all supporting obligations in respect thereof.
"Acquisition" has the meaning set forth in the Preamble to this
Agreement.
"Additional Collateral" has the meaning set forth in Section 9.3.
"Additional Documents" has the meaning set forth in Section 4.4.
"Administrative Borrower" has the meaning set forth in Section 17.9.
"Advances" has the meaning set forth in Section 2.1.
"Affiliate" means, as applied to any Person, any other Person who,
directly or indirectly, controls, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" means the
possession, directly or indirectly, of the power to direct the management and
policies of a Person, whether through the ownership of Stock, by contract, or
otherwise; provided, however, that, in any event: (a) any Person which owns
directly or indirectly 15% or more of the securities having ordinary voting
power for the election of directors or other members of the governing body of a
Person or 15% or more of the partnership or other ownership interests of a
Person (other than as a limited partner of such Person) shall be deemed to
control such Person, (b) each director (or comparable manager) of a Person shall
be deemed to be an Affiliate of such Person, and (c) each partnership or joint
venture in which a Person is a partner or joint venturer shall be deemed to be
an Affiliate of such Person.
"Agent" means U.S. Bank, solely in its capacity as agent for the
Lenders hereunder, and any successor thereto.
"Agent's Account" means account number 153491810914 maintained with
U.S. Bank which is the account into which Borrowers shall make all payments to
Agent for the benefit of the Lender Group and into which the Lender Group shall
make all payments to Agent under this Agreement and the other Loan Documents.
"Agent Advances" has the meaning set forth in Section 2.3(e)(i).
"Agent's Liens" means the Liens granted by Borrowers to Agent for
the benefit of the Lender Group under this Agreement or the other Loan
Documents.
"Agent-Related Persons" means Agent together with its Affiliates,
officers, directors, employees, and agents.
"Agreement" has the meaning set forth in the preamble hereto.
"Applicable Margin" means, with respect to any Obligation: (a)
During the Initial Interest Period: (i) 2.75% with respect to LIBOR Rate Loans;
(ii) 1.00% with respect to Prime Rate Loans; and (b) commencing on the
conclusion of the Initial Interest Period and continuing
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on the first day of the first month following the delivery of financial
statements pursuant to Section 6.3, the margin as provided below based upon the
Leverage Ratio.
Applicable Margin For:
--------------------------- -------------------------- ------------------------------
Leverage Ratio LIBOR Rate Loans Prime Rate Loans
--------------------------- -------------------------- ------------------------------
Less than 1.5:1.0 2.00% .25%
--------------------------- -------------------------- ------------------------------
Less than 2.0:1.0, but 2.25% .50%
equal to or greater than
1.5:1.0
--------------------------- -------------------------- ------------------------------
less than 2.5:1.0, but 2.50% .75%
equal to or greater than
2.0:1.0
--------------------------- -------------------------- ------------------------------
equal to or greater than 2.75% 1.00%
2.5:1.0
--------------------------- -------------------------- ------------------------------
"Applicable Unused Line Fee Rate" means (i) .50% for the Initial
Interest Period, and (ii) commencing of the first day of the first calendar
month following the Initial Interest Period, the per annum rate calculated as of
the end of each fiscal quarter of Borrowers during the term of this Agreement as
follows provided, however, that the Applicable Unused Line Fee Rate shall be
zero as to any Advance that Borrower does not receive due to a default by a
Defaulting Lender:
-------------------------- -----------------------
Leverage Ratio Unused Line Fee Rate
-------------------------- -----------------------
Less than 1.5:1.0 .25%
-------------------------- -----------------------
Less than 2.0:1.0, but .25%
equal to or greater than
1.5:1.0
-------------------------- -----------------------
Less than 2.5:1.0, but .375%
equal to or greater than
2.0:1.0
-------------------------- -----------------------
Equal to or greater than .50%
2.5:1.0
-------------------------- -----------------------
"Assignee" has the meaning set forth in Section 14.1.
"Assignment and Acceptance" means an Assignment and Acceptance in
the form of Exhibit A-1.
"Authorized Person" means those officers or other employees of
Administrative Borrower designated in writing by Administrative Borrower to
Agent from time to time.
"Availability" means, as of any date of determination, if such date
is a Business Day, and determined at the close of business on the immediately
preceding Business Day, if such date of determination is not a Business Day, the
amount that Borrowers are entitled to borrow as
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Advances under Section 2.1 (after giving effect to all then outstanding
Obligations (exclusive of the Term Loan) and all sublimits and reserves
applicable hereunder).
"Bankruptcy Code" means the United States Bankruptcy Code, as in
effect from time to time.
"Benefit Plan" means a "defined benefit plan" (as defined in Section
3(35) of ERISA) for which any Borrower or any Subsidiary or ERISA Affiliate of
any Borrower has been an "employer" (as defined in Section 3(5) of ERISA) within
the past six years.
"Board of Directors" means the board of directors (or comparable
managers) of Parent or, in the case of actions requiring approval of the Board
of Directors under this Agreement, any committee thereof duly authorized to act
in the place and stead of the board.
"Books" means all of each Borrower's now owned or hereafter acquired
books and records (including all of its Records indicating, summarizing, or
evidencing its assets (including the Collateral) or liabilities, all of its
Records relating to its business operations or financial condition, and all of
its goods or General Intangibles related to such information).
"Borrower" and "Borrowers" have the respective meanings set forth in
the introductory paragraph to this Agreement.
"Borrowing" means a borrowing hereunder consisting of Advances or
the Term Loan made on the same day by the Lenders (or Agent on behalf thereof),
or by Swing Lender in the case of a Swing Loan, or by Agent in the case of an
Agent Advance, in each case, to Administrative Borrower.
"Borrowing Base" has the meaning set forth in Section 2.1.
"Borrowing Base Certificate" means a certificate in the form of
Exhibit B-1.
"Business Day" means any day that is not a Saturday, Sunday, or
other day on which national banks are authorized or required to close, except
that, if a determination of a Business Day shall relate to a LIBOR Rate Loan,
the term "Business Day" also shall exclude any day on which banks are closed for
dealings in Dollar deposits in the London interbank market.
"Capital Expenditures" means, with respect to any fiscal period, the
amount equal to the sum of purchases of property and equipment (net of Permitted
Dispositions of capital assets) and increases in licenses and patent costs as
determined in accordance with GAAP.
"Capital Lease" means a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP.
"Capitalized Lease Obligation" means any Indebtedness represented by
obligations under a Capital Lease.
"Cash Equivalents" means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States or issued by any agency thereof
and backed by
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the full faith and credit of the United States, in each case maturing within 1
year from the date of acquisition thereof, (b) marketable direct obligations
issued by any state of the United States or any political subdivision of any
such state or any public instrumentality thereof maturing within 1 year from the
date of acquisition thereof and, at the time of acquisition, having the highest
rating obtainable from either S&P or Xxxxx'x, (c) commercial paper maturing no
more than 1 year from the date of acquisition thereof and, at the time of
acquisition, having a rating of A-1 or P-1, or better, from S&P or Xxxxx'x, and
(d) certificates of deposit or bankers' acceptances maturing within 1 year from
the date of acquisition thereof either (i) issued by any bank organized under
the laws of the United States or any state thereof which bank has a rating of A
or A2, or better, from S&P or Xxxxx'x, or (ii) certificates of deposit less than
or equal to $100,000 in the aggregate issued by any other bank insured by the
Federal Deposit Insurance Corporation.
"Cash Management Bank" has the meaning set forth in Section 2.7(a).
"Cash Management Account" has the meaning set forth in Section
2.7(a).
"Cash Management Agreements" means those certain cash management
service agreements, in form and substance satisfactory to Agent, each of which
is among Administrative Borrower, Agent, and one of the Cash Management Banks.
"Change of Control" means (a) any "person" or "group" (within the
meaning of Sections 13(d) and 14(d) of the Exchange Act), becomes the beneficial
owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of 25%, or more, of the Stock of Parent having the right to vote for the
election of members of the Board of Directors, or (b) a majority of the members
of the Board of Directors of Parent do not constitute Continuing Directors, or
(c) Parent ceases to directly or indirectly own and control 90% of the
outstanding capital Stock of each of its Subsidiaries or the Subsidiaries of its
Subsidiaries extant as of the Closing Date; provided, however, that with respect
to DTM Corporation, Tiger Deals, Inc., ceases to own or control at least 67% of
the outstanding common stock of DTM Corporation following the consummation of
the Tender Offer but prior to the consummation of the Merger, and 3D Systems,
Inc. (or any other Subsidiary of Parent), ceases to own or control, directly or
indirectly, 90% of the outstanding common Stock of DTM Corporation following the
completion of the Merger.
"Closing Date" means the date of the making of the initial Advance
and Term Loan to fund the Tender Offer.
"Code" means the California Uniform Commercial Code, as in effect
from time to time, including revisions thereto which become effective on July 1,
2001.
"Collateral" means all of each Borrower's now owned or hereafter
acquired right, title, and interest in and to each of the following:
(a) Accounts,
(b) Books,
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(c) Equipment,
(d) General Intangibles,
(e) Inventory,
(f) Investment Property,
(g) Negotiable Collateral,
(h) all of the Stock of any direct or indirect Domestic Subsidiary
of Borrowers (whether present or future) owned as of the Closing Date or
thereafter acquired by Borrowers or any Domestic Subsidiary of Borrowers,
(i) the lesser of (i) 65% of the shares of each class of Stock of
each direct or indirect Foreign Subsidiary (whether present or future) of
Borrowers or any Domestic Subsidiary of Borrowers or (ii) all of the shares of
each class of Stock of each such Foreign Subsidiary, in each case owned as of
the Closing Date or thereafter acquired by Borrowers or any direct or indirect
Domestic Subsidiary of Borrowers,
(j) money or other assets of each such Borrower that now or
hereafter come into the possession, custody, or control of any member of the
Lender Group, and
(k) the proceeds and products, whether tangible or intangible, of
any of the foregoing, including proceeds of insurance covering any or all of the
foregoing, and any and all Accounts, Books, Equipment, General Intangibles,
Inventory, Investment Property, Negotiable Collateral, money, deposit accounts,
or other tangible or intangible property resulting from the sale, exchange,
collection, or other disposition of any of the foregoing, or any portion thereof
or interest therein, and the proceeds thereof.
"Collateral Access Agreement" means a landlord waiver, bailee
letter, or acknowledgement agreement of any lessor, warehouseman, processor,
consignee, or other Person in possession of, having a Lien upon, or having
rights or interests in the Equipment or Inventory, in each case, in form and
substance satisfactory to Agent.
"Collections" means all cash, checks, notes, instruments, and other
items of payment (including insurance proceeds, proceeds of cash sales, rental
proceeds, and tax refunds) of Borrowers.
"Commitment" means, with respect to each Lender, its Revolver
Commitment, its Term Loan Commitment, or its Total Commitment, as the context
requires, and, with respect to all Lenders, their Revolver Commitments, their
Term Loan Commitments, or their Total Commitments, as the context requires, in
each case as such Dollar amounts are set forth beside such Lender's name under
the applicable heading on Schedule C-1 or on the signature page of the
Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of Section 14.1.
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"Compliance Certificate" means a certificate substantially in the
form of Exhibit C-1 delivered by the chief financial officer of Parent to Agent.
"Continuing Director" means (a) any member of the Board of Directors
who was a director (or comparable manager) of Parent on the Closing Date, and
(b) any individual who becomes a member of the Board of Directors after the
Closing Date if such individual was appointed or nominated for election to the
Board of Directors by a majority of the Continuing Directors, but excluding any
such individual originally proposed for election in opposition to the Board of
Directors in office at the Closing Date in an actual or threatened election
contest relating to the election of the directors (or comparable managers) of
Parent (as such terms are used in Rule 14a-11 under the Exchange Act) and whose
initial assumption of office resulted from such contest or the settlement
thereof.
"Control Agreement" means a control agreement, in form and substance
satisfactory to Agent, executed and delivered by the applicable Borrower, Agent,
and the applicable securities intermediary with respect to a Securities Account
or the applicable bank with respect to a DOA or other deposit account.
"Copyright Security Agreement" means a copyright security agreement
executed and delivered by each Borrower and Agent, the form and substance of
which is satisfactory to Agent.
"Credit Facility" means the combination of Advances, Foreign
Exchange Contracts, Letters of Credit and Term Loan contemplated under this
Agreement.
"Daily Balance" means, with respect to each day during the term of
this Agreement, the amount of an Obligation owed at the end of such day.
"DDA" means any checking or other demand deposit account maintained
by any Borrower.
"Debt" means, with respect to any Person, any obligations of such
Person which by its terms or by the terms of any instrument or agreement
relating thereto matures, or which is otherwise payable or unpaid, one year or
more from, or is directly or indirectly renewable or extendible at the option of
the obligor in respect thereof (including, without limitation, an option of such
obligor under a revolving credit or similar agreement obligating the lender or
lenders to extend credit over a period of one year or more) to a date one year
or more from, the date of the creation thereof, provided that Debt shall
include, as at any date of determination, current maturities of Debt.
"Default" means an event, condition, or default that, with the
giving of notice, the passage of time, or both, would be an Event of Default.
"Defaulting Lender" means any Lender that fails to make any Advance
or Pro Rata Share of the Term Loan (or other extension of credit) that it is
required to make hereunder on the date that it is required to do so hereunder.
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"Defaulting Lender Rate" means (a) the Prime Rate for the first 3
days from and after the date the relevant payment is due, and (b) thereafter, at
the interest rate then applicable to Advances that are Prime Rate Loans
(inclusive of the Applicable Prime Rate Margin applicable thereto).
"Designated Account" means account number 153491810963 of
Administrative Borrower maintained with U.S. Bank.
"Direct Xxxx Restructuring" shall mean a change in the business
practices of the Borrowers such that all sales on or after such date creating
Foreign Accounts (which were previously generated by Foreign Subsidiaries) shall
be made, invoiced and collected by one of the Borrowers.
"Disbursement Letter" means an instructional letter executed and
delivered by Administrative Borrower to Agent regarding the extensions of credit
to be made on the Closing Date, the form and substance of which is satisfactory
to Agent.
"Dollars" or "$" means United States dollars.
"Domestic Account" means an Account as to which the Account Debtor
maintains its chief executive office in the United States.
"Domestic Subsidiary" means any direct or indirect Subsidiary of
Borrowers that is formed under the laws of the United States or any state or
subdivision thereof.
"Due Diligence Letter" means the due diligence letter sent by
Agent's counsel to Administrative Borrower, together with Administrative
Borrower's completed responses to the inquiries set forth therein, the form and
substance of such responses to be satisfactory to Agent.
"EBITDA" means, with respect to any fiscal period, Parent's and its
Subsidiaries' consolidated net earnings (or loss), minus extraordinary gains,
plus interest expense, income taxes, and depreciation and amortization for such
period, as determined in accordance with GAAP.
"Eligible Accounts" means those Accounts created by one of Borrowers
in the ordinary course of its business, that arise out of Borrower's sale of
goods or rendition of services, that comply with each of the representations and
warranties respecting Eligible Accounts made by Borrowers under the Loan
Documents, and that are not excluded as ineligible by virtue of one or more of
the criteria set forth below; provided, however, that such criteria may be fixed
and revised from time to time by Agent in Agent's Permitted Discretion to
address the results of any audit performed by Agent from time to time after the
Closing Date. In determining the amount to be included, Eligible Accounts shall
be calculated net of customer deposits and unapplied cash remitted to Borrowers.
Eligible Accounts shall not include the following:
(a) Domestic Accounts that have selling terms of more than 120 days
or the Account Debtor has failed to pay within the earlier of (i) 60 days of
original invoice due date or (ii) 120 days following the date of the original
invoice,
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(b) Foreign Accounts which are not otherwise deemed ineligible under
subparagraph (g) below, but the selling terms of such Foreign Accounts are more
than 120 days, or the Account Debtor has failed to pay such Foreign Accounts
within 120 days following the date of the original invoice,
(c) Accounts (other than Foreign Accounts) owed by an Account Debtor
(or its Affiliates) where 25% or more of all Accounts owed by that Account
Debtor (or its Affiliates) are deemed ineligible under clause (a) above,
(d) Accounts with respect to which the Account Debtor is an
employee, Affiliate, or agent of any Borrower,
(e) Accounts arising in a transaction wherein goods are placed on
consignment or are sold pursuant to a guaranteed sale, a sale or return, a sale
on approval, a xxxx and hold, or any other terms by reason of which the payment
by the Account Debtor may be conditional,
(f) Domestic Accounts that are not payable in Dollars,
(g) Accounts which are Foreign Accounts unless (y) the Foreign
Account is supported by an irrevocable letter of credit satisfactory to Agent
(as to form, substance, and issuer or domestic confirming bank) that has been
delivered to Agent and is directly drawable by Agent, or (z) the Foreign Account
is covered by credit insurance in form, substance, and amount, and by an
insurer, satisfactory to Agent,
(h) Accounts with respect to which the Account Debtor is either (i)
the United States or any department, agency, or instrumentality of the United
States (exclusive, however, of Accounts with respect to which the applicable
Borrower has complied, to the reasonable satisfaction of Agent, with the
Assignment of Claims Act, 31 USC Section 3727), or (ii) any state of the United
States (exclusive, however, of (y) Accounts owed by any state that does not have
a statutory counterpart to the Assignment of Claims Act, or (z) Accounts owed by
any state that does have a statutory counterpart to the Assignment of Claims Act
as to which the applicable Borrower has complied to Agent's satisfaction),
(i) Accounts with respect to which the Account Debtor is a creditor
of any Borrower, has or has asserted a right of setoff, has disputed its
liability, or has made any claim with respect to its obligation to pay the
Account, to the extent of such claim, right of setoff, or dispute,
(j) Accounts with respect to an Account Debtor whose total
obligations owing to Borrowers exceed 20% of all Eligible Accounts, to the
extent of the obligations owing by such Account Debtor in excess of such
percentage,
(k) Accounts with respect to which the Account Debtor is subject to
an Insolvency Proceeding, is not Solvent, has gone out of business, or as to
which a Borrower has received notice of an imminent Insolvency Proceeding or a
material impairment of the financial condition of such Account Debtor,
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(l) Accounts with respect to which the Account Debtor is located in
the states of New Jersey, Minnesota, or West Virginia (or any other state that
requires a creditor to file a business activity report or similar document in
order to bring suit or otherwise enforce its remedies against such Account
Debtor in the courts or through any judicial process of such state), unless the
applicable Borrower has qualified to do business in New Jersey, Minnesota, West
Virginia, or such other states, or has filed a business activities report with
the applicable division of taxation, the department of revenue, or with such
other state offices, as appropriate, for the then-current year, or is exempt
from such filing requirement,
(m) Accounts, the collection of which, Agent, in its Permitted
Discretion, believes to be doubtful by reason of the Account Debtor's financial
condition,
(n) Accounts that are not subject to a valid and perfected first
priority Agent's Lien,
(o) Accounts with respect to which (i) the goods giving rise to such
Account have not been shipped and billed to the Account Debtor, or (ii) the
services giving rise to such Account have not been performed and billed to the
Account Debtor,
(p) Accounts that represent the right to receive payments under a
field service contract or for commissions, or
(q) Accounts that are deferred revenue receivables, that represent
the right to receive progress payments or other advance xxxxxxxx that are due
prior to the completion of performance by the applicable Borrower of the subject
contract for goods or services.
"Eligible Domestic Accounts" means Domestic Accounts which are
Eligible Accounts.
"Eligible Foreign Accounts" means Foreign Accounts which are
Eligible Accounts.
"Eligible Inventory" means Inventory of Borrowers consisting of
first quality raw materials (excluding packaging supplies) and finished goods
held for sale in the ordinary course of Borrowers' business (excluding inventory
used solely for demonstration or as a sample) located at one of the business
locations of Borrowers set forth on Schedule E-1 (or in-transit between any such
locations), that complies with each of the representations and warranties
respecting Eligible Inventory made by Borrowers in the Loan Documents, and that
is not excluded as ineligible by virtue of the one or more of the criteria set
forth below; provided, however, that such criteria may be fixed and revised from
time to time by Agent in Agent's Permitted Discretion to address the results of
any audit or appraisal performed by Agent from time to time after the Closing
Date. In determining the amount to be so included, Inventory shall be valued at
the lower of cost or market on a basis consistent with Borrowers' historical
accounting practices. An item of Inventory shall not be included in Eligible
Inventory if:
(a) a Borrower does not have good, valid, and marketable title
thereto,
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(b) it is not located at one of the locations in the United States
set forth on Schedule E-1 or in transit from one such location to another such
location,
(c) it is located on real property leased by a Borrower or in a
contract warehouse, in each case, unless it is subject to a Collateral Access
Agreement executed by the lessor, warehouseman, or other third party, as the
case may be, and unless it is segregated or otherwise separately identifiable
from goods of others, if any, stored on the premises,
(d) it is not subject to a valid and perfected first priority
Agent's Lien,
(e) it consists of goods returned or rejected by a Borrower's
customers, or
(f) it consists of goods that are obsolete or slow moving,
restrictive or custom items, work-in-process, packaging and shipping materials,
supplies used or consumed in a Borrower's business, xxxx and hold goods,
defective goods, "seconds," or Inventory acquired on consignment.
"Eligible Transferee" means (a) a commercial bank organized under
the laws of the United States, or any state thereof, and having total assets in
excess of $250,000,000, (b) a commercial bank organized under the laws of any
other country which is a member of the Organization for Economic Cooperation and
Development or a political subdivision of any such country and which has total
assets in excess of $250,000,000, provided that such bank is acting through a
branch or agency located in the United States, (c) a finance company, insurance
company, or other financial institution or fund that is engaged in making,
purchasing, or otherwise investing in commercial loans in the ordinary course of
its business and having (together with its Affiliates) total assets in excess of
$250,000,000, (d) any Affiliate (other than individuals) of a Lender that was
party hereto as of the Closing Date, (e) so long as no Event of Default has
occurred and is continuing, any other Person approved by Agent and
Administrative Borrower, and (f) during the continuation of an Event of Default,
any other Person approved by Agent.
"Environmental Actions" means any complaint, summons, citation,
notice, directive, order, claim, litigation, investigation, judicial or
administrative proceeding, judgment, letter, or other communication from any
Governmental Authority, or any third party involving violations of Environmental
Laws or releases of Hazardous Materials (a) from any assets, properties, or
businesses of any Borrower or any predecessor in interest, (b) from adjoining
properties or businesses, or (c) from or onto any facilities which received
Hazardous Materials generated by any Borrower or any predecessor in interest.
"Environmental Law" means any applicable federal, state, provincial,
foreign or local statute, law, rule, regulation, ordinance, code, binding and
enforceable guideline, binding and enforceable written policy, or rule of common
law now or hereafter in effect and in each case as amended, or any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, to the extent binding on any Borrower,
relating to the environment, employee health and safety, or Hazardous Materials,
including CERCLA; RCRA; the Federal Water Pollution Control Act, 33 USC Section
1251 et seq.; the Toxic Substances Control Act, 15 USC, Section 2601 et seq.;
the Clean Air Act, 42 USC Section 7401 et seq.; the
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Safe Drinking Water Act, 42 USC. Section 3803 et seq.; the Oil Pollution Act of
1990, 33 USC. Section 2701 et seq.; the Emergency Planning and the Community
Right-to-Know Act of 1986, 42 USC. Section 11001 et seq.; the Hazardous Material
Transportation Act, 49 USC Section 1801 et seq.; and the Occupational Safety and
Health Act, 29 USC. Section 651 et seq. (to the extent it regulates occupational
exposure to Hazardous Materials); any state and local or foreign counterparts or
equivalents, in each case as amended from time to time.
"Environmental Liabilities and Costs" means all liabilities,
monetary obligations, Remedial Actions, losses, damages, punitive damages,
consequential damages, treble damages, costs and expenses (including all
reasonable fees, disbursements and expenses of counsel, experts, or consultants,
and costs of investigation and feasibility studies), fines, penalties,
sanctions, and interest incurred as a result of any claim or demand by any
Governmental Authority or any third party, and which relate to any Environmental
Action.
"Environmental Lien" means any Lien in favor of any Governmental
Authority for Environmental Liabilities and Costs.
"Equipment" means all of Borrowers' now owned or hereafter acquired
right, title, and interest with respect to equipment, machinery, machine tools,
motors, furniture, furnishings, fixtures, vehicles (including motor vehicles),
tools, parts, goods (other than consumer goods, farm products, or Inventory),
wherever located, including all attachments, accessories, accessions,
replacements, substitutions, additions, and improvements to any of the
foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute thereto.
"ERISA Affiliate" means (a) any Person subject to ERISA whose
employees are treated as employed by the same employer as the employees of a
Borrower under IRC Section 414(b), (b) any trade or business subject to ERISA
whose employees are treated as employed by the same employer as the employees of
a Borrower under IRC Section 414(c), (c) solely for purposes of Section 302 of
ERISA and Section 412 of the IRC, any organization subject to ERISA that is a
member of an affiliated service group of which a Borrower is a member under IRC
Section 414(m), or (d) solely for purposes of Section 302 of ERISA and Section
412 of the IRC, any Person subject to ERISA that is a party to an arrangement
with a Borrower and whose employees are aggregated with the employees of a
Borrower under IRC Section 414(o).
"Event of Default" has the meaning set forth in Section 8.
"Exchange Act" means the Securities Exchange Act of 1934, as in
effect from time to time.
"Excess Cash Flow" means as of the end of each fiscal year of
Borrowers the amount, if any, by which the Fixed Charge Numerator exceeds the
amount required to cause the Fixed Charge Coverage Ratio to equal 1.0:1. For the
purpose of determining Excess Cash Flow for the fiscal year ending December 31,
2001, the Fixed Charge Numerator and the Fixed Charge Coverage Ratio will be
calculated based upon the six-month period then ended.
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"Existing Lender" means The CIT Group.
"Fee Letter" means that certain fee letter, dated as of even date
herewith, between Borrowers and Agent, in the form previously agreed to among
Administrative Borrower and Agent.
"FEIN" means Federal Employer Identification Number.
"Fixed Charge Numerator" means, as of the time that the Fixed Charge
Coverage Ratio is being determined, the amount equal to EBITDA for the 12 month
period then ended (except as provided in the definition of Excess Cash Flow
above), minus all taxes paid during such period, minus all distributions to
shareholders (other than shareholders that are also Borrowers) made during such
period, minus unfinanced Capital Expenditures made during such period (provided,
however, that for the first three fiscal quarters of the term of this Agreement,
except as set forth in the definition of Excess Cash Flow above, taxes,
distributions to shareholders and unfinanced Capital Expenditures shall be
calculated on an annualized basis based upon the aggregate results of such
fiscal quarters).
"Fixed Charge Coverage Ratio" means, as of the end of the most
recently concluded fiscal quarter of Parent, the ratio of (i) the Fixed Charge
Numerator; to (ii) the aggregate amount of all regularly scheduled principal
payments which will become due and payable in respect of long term debt by
Borrowers during the immediately succeeding four fiscal quarters, plus all
interest payments due and payable by Borrowers during the 12 month period then
ended (provided, however, that for the first three fiscal quarters of the term
of this Agreement the interest payments shall be annualized based on actual
payments made during such period).
"Foreign Account" means an Account as to which the Account Debtor
either (i) does not maintain material assets in the United States and does not
engage in business activities in the United States which, in the reasonable
judgement of Agent, would be sufficient to cause the Account Debtor to be
subject to personal jurisdiction in an action commenced in the United States
against such Account Debtor; or (ii) is the government of any foreign country or
sovereign state, or of any state, province, municipality, or other political
subdivision thereof, or of any department, agency, public corporation, or other
instrumentality thereof.
"Foreign Exchange Forward Contract" has the meaning set forth in
Section 2.13(a).
"Foreign Exchange Reserve" has the meaning set forth in Section
2.13(a).
"Foreign Subsidiary" means any direct or indirect Subsidiary of the
Borrowers that is not formed under laws of the United States or any state or
subdivision thereof.
"Foreign Subsidiary Guaranties" has the meaning set forth in Section
9.2.
"Funding Date" means the date on which a Borrowing occurs.
"Funding Losses" has the meaning set forth in Section 2.14(b)(ii).
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"GAAP" means generally accepted accounting principles as in effect
from time to time in the United States, consistently applied.
"General Intangibles" means all of Borrowers' now owned or hereafter
acquired right, title, and interest with respect to general intangibles
(including payment intangibles, contract rights, rights to payment, rights
arising under common law, statutes, or regulations, choses or things in action,
goodwill, patents, trade names, trademarks, servicemarks, copyrights,
blueprints, drawings, purchase orders, customer lists, monies due or recoverable
from pension funds, route lists, rights to payment and other rights under any
royalty or licensing agreements, infringement claims, computer programs,
information contained on computer disks or tapes, software, literature, reports,
catalogs, money, deposit accounts, insurance premium rebates, tax refunds, and
tax refund claims), and any and all supporting obligations in respect thereof,
and any other personal property other than goods, Accounts, Investment Property,
Negotiable Collateral and Stock of a Subsidiary that is not otherwise
Collateral.
"Governing Documents" means, with respect to any Person, the
certificate or articles of incorporation, by-laws, or other organizational
documents of such Person.
"Governmental Authority" means any federal, state, local, or other
governmental or administrative body, instrumentality, department, or agency or
any court, tribunal, administrative hearing body, arbitration panel, commission,
or other similar dispute-resolving panel or body.
"Hazardous Materials" means (a) substances that are defined or
listed in, or otherwise classified pursuant to, any applicable laws or
regulations as "hazardous substances," "hazardous materials," "hazardous
wastes," "toxic substances," or any other formulation intended to define, list,
or classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or "EP
toxicity", (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.
"Indebtedness" means (a) all obligations of a Borrower for borrowed
money, (b) all obligations of a Borrower evidenced by bonds, debentures, notes,
or other similar instruments and all reimbursement or other obligations of a
Borrower in respect of letters of credit, bankers acceptances, interest rate
swaps, or other financial products, (c) all obligations of a Borrower under
Capital Leases, (d) all obligations or liabilities of others secured by a Lien
on any asset of a Borrower, irrespective of whether such obligation or liability
is assumed, (e) all obligations of a Borrower for the deferred purchase price of
assets (other than trade debt incurred in the ordinary course of a Borrower's
business and repayable in accordance with customary trade practices), and (f)
any obligation of a Borrower guaranteeing or intended to guarantee (whether
directly or indirectly guaranteed, endorsed, co-made, discounted, or sold with
recourse to a Borrower) any obligation of any other Person.
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"Indemnified Liabilities" has the meaning set forth in Section 11.3.
"Indemnified Person" has the meaning set forth in Section 11.3.
"Initial Interest Period" means the period commencing on the Closing
Date and concluding on the first day of the first calendar month following the
conclusion of the six month period following the Closing Date.
"Insolvency Proceeding" means any proceeding commenced by or against
any Person under any provision of the Bankruptcy Code or under any other state
or federal bankruptcy or insolvency law, assignments for the benefit of
creditors, formal or informal moratoria, compositions, extensions generally with
creditors, or proceedings seeking reorganization, arrangement, or other similar
relief.
"Intangible Assets" means, with respect to any Person, that portion
of the book value of all of such Person's assets that would be treated as
intangibles under GAAP.
"Intellectual Property Security Agreement" means an intellectual
property security agreement executed and delivered by each Borrower and Agent,
the form and substance of which is satisfactory to Agent.
"Intercompany Subordination Agreement" means a subordination
agreement executed and delivered by Borrowers and Agent, the form and substance
of which is satisfactory to Agent.
"Interest Differential" has the meaning set forth in Section 2.6(a).
"Interest Period" means, with respect to each LIBOR Rate Loan, a
period commencing on the date of the making of such LIBOR Rate Loan and ending 3
months thereafter; provided, however, that (a) if any Interest Period would end
on a day that is not a Business Day, such Interest Period shall be extended
(subject to clauses (c)-(e) below) to the next succeeding Business Day, (b)
interest shall accrue at the applicable rate based upon the LIBOR Rate from and
including the first day of each Interest Period to, but excluding, the day on
which any Interest Period expires, (c) any Interest Period that would end on a
day that is not a Business Day shall be extended to the next succeeding Business
Day unless such Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Business Day, (d) with respect
to an Interest Period that begins on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period), the Interest Period shall end on the
last Business Day of the calendar month that is 3 months after the date on which
the Interest Period began, as applicable, and (e) Borrowers (or Administrative
Borrower on behalf thereof) may not elect an Interest Period which will end
after the Maturity Date.
"Inventory" means all Borrowers' now owned or hereafter acquired
right, title, and interest with respect to inventory, including goods held for
sale or lease or to be furnished under a contract of service, goods that are
leased by a Borrower as lessor, goods that are furnished by a Borrower under a
contract of service, and raw materials, work in process, or materials used or
consumed in a Borrower's business.
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"Investment" means, with respect to any Person, any investment by
such Person in any other Person (including Affiliates) in the form of loans,
guarantees, advances, or capital contributions (excluding (a) commission,
travel, and similar advances to officers and employees of such Person made in
the ordinary course of business, and (b) bona fide Accounts arising from the
sale of goods or rendition of services in the ordinary course of business
consistent with past practice), purchases or other acquisitions for
consideration of Indebtedness or Stock, and any other items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
"Investment Property" means all of Borrowers' now owned or hereafter
acquired right, title, and interest with respect to "investment property" as
that term is defined in the Code, and any and all supporting obligations in
respect thereof other than Stock in a Subsidiary.
"IRC" means the Internal Revenue Code of 1986, as in effect from
time to time.
"Issuing Lender" means U.S. Bank or any other Lender that, at the
request of Administrative Borrower and with the consent of Agent agrees, in such
Lender's sole discretion, to become an Issuing Lender for the purpose of issuing
a Letter of Credit pursuant to Section 2.12.
"Letter of Credit" has the meaning set forth in Section 2.12(a).
"L/C Disbursement" means a payment made by the Issuing Lender
pursuant to a Letter of Credit.
"Lender" and "Lenders" have the respective meanings set forth in the
introductory paragraph to this Agreement, and shall include any other Person
made a party to this Agreement in accordance with the provisions of Section
14.1.
"Lender Group" means, individually and collectively, each of the
Lenders (including the Issuing Lender) and Agent.
"Lender Group Expenses" means all (a) costs or expenses (including
taxes, and insurance premiums) required to be paid by a Borrower under any of
the Loan Documents that are paid or incurred by the Lender Group, (b) fees or
charges paid or incurred by Agent in connection with the Lender Group's
transactions with Borrowers, including, fees or charges for photocopying,
notarization, couriers and messengers, telecommunication, public record searches
(including tax lien, litigation, and UCC searches and including searches with
the patent and trademark office, the copyright office, or the department of
motor vehicles), filing, recording, publication, appraisal (including periodic
Collateral appraisals or business valuations to the extent of the fees and
charges (and up to the amount of any limitation) contained in this Agreement)
and environmental audits, (c) costs and expenses incurred by Agent in the
disbursement of funds to or for the account of Borrowers (by wire transfer or
otherwise), (d) charges paid or incurred by Agent resulting from the dishonor of
checks, (e) reasonable costs and expenses paid or incurred by the Lender Group
to correct any default or enforce any provision of the Loan Documents, or in
gaining possession of, maintaining, handling, preserving, storing, shipping,
selling, preparing for sale, or advertising to sell the Collateral, or any
portion thereof, irrespective of whether a sale is consummated, (f) audit fees
and expenses of Agent
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related to audit examinations of the Books to the extent of the fees and charges
(and up to the amount of any limitation) contained in this Agreement, (g)
reasonable costs and expenses of third party claims or any other suit paid or
incurred by the Lender Group in enforcing or defending the Loan Documents or in
connection with the transactions contemplated by the Loan Documents or the
Lender Group's relationship with any Borrower or any guarantor of the
Obligations, (h) Agent's and each Lender's reasonable fees and expenses
(including attorneys fees) incurred in advising, structuring, drafting,
reviewing, administering, or amending the Loan Documents, and (i) Agent's and
each Lender's reasonable fees and expenses (including attorneys fees) incurred
in terminating, enforcing (including attorneys fees and expenses incurred in
connection with a "workout," a "restructuring," or an Insolvency Proceeding
concerning any Borrower or in exercising rights or remedies under the Loan
Documents), or defending the Loan Documents, irrespective of whether suit is
brought, or in taking any Remedial Action concerning the Collateral.
"Lender-Related Person" means, with respect to any Lender, such
Lender, together with such Lender's Affiliates, and the officers, directors,
employees, and agents of such Lender.
"Letter of Credit Usage" means, as of any date of determination, the
aggregate undrawn amount of all outstanding Letters of Credit plus 100% of the
amount of outstanding time drafts accepted by an Issuing Lender as a result of
drawings under Letters of Credit.
"Leverage Ratio" means, as of the end of the most recently concluded
fiscal quarter of Borrowers, the ratio of interest bearing Debt outstanding as
of the end of such fiscal quarter to the EBITDA calculated as follows: (y) for
the first three fiscal quarters of Borrowers following the Closing Date, the
EBITDA shall be calculated using the actual results of Borrowers for the then
immediately preceding four fiscal quarters assuming (solely for purposes of this
calculation), that the Merger had been consummated during the entire period in
which the measurement is being made (i.e. inclusive of the historical results of
DTM Corporation and its Subsidiaries), and (z) commencing with the fourth fiscal
quarter of Borrowers following the Closing Date, EBITDA shall be calculated for
the four fiscal quarter period of Borrowers ended with the most recent fiscal
quarter of Borrowers in such financial statements. For the purpose of
calculating EBITDA in connection with this ratio, EBITDA shall be increased by
the amount of non-recurring costs, fees and expenses, as determined in
accordance with GAAP which were incurred during Borrowers' fiscal year 2001 and
which are related to the tender offer of the shares of stock of DTM Corporation,
the merger of DTM Corporation into Tiger Deals, Inc., and the consolidation of
the business and operations of DTM Corporation and its Subsidiaries into
Borrowers.
"LIBOR Deadline" has the meaning set forth in Section 2.13(b)(i).
"LIBOR Notice" means a written notice in the form of Exhibit L-1.
"LIBOR Rate" has the meaning set forth in Section 2.6(a).
"LIBOR Rate Loan" has the meaning set forth in Section 2.6(a).
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"Lien" means any interest in an asset securing an obligation owed
to, or a claim by, any Person other than the owner of the asset, whether such
interest shall be based on the common law, statute, or contract, whether such
interest shall be recorded or perfected, and whether such interest shall be
contingent upon the occurrence of some future event or events or the existence
of some future circumstance or circumstances, including the lien or security
interest arising from a mortgage, deed of trust, encumbrance, pledge,
hypothecation, assignment, deposit arrangement, security agreement, conditional
sale or trust receipt, or from a lease, consignment, or bailment for security
purposes and also including reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases, and other title
exceptions and encumbrances affecting real property.
"Loan Account" has the meaning set forth in Section 2.10.
"Loan Documents" means this Agreement, the Cash Management
Agreements, the Control Agreements, the Copyright Security Agreement, the
Disbursement Letter, the Due Diligence Letter, the Fee Letter, for Foreign
Exchange Forward Contracts, the Letters of Credit, the Officers' Certificate,
the Patent Security Agreement, the Trademark Security Agreement, the
Intercompany Subordination Agreement, the Term Note, any other note or notes
executed by a Borrower in connection with this Agreement and payable to a member
of the Lender Group, and any other agreement entered into, now or in the future,
by any Borrower and the Lender Group in connection with this Agreement
(provided, that any such future document shall be deemed a Loan Document only at
such time as it becomes effective in accordance with the terms of such
document).
"Material Adverse Change" means (a) a material adverse change in the
business, prospects, operations, results of operations, assets, liabilities or
condition (financial or otherwise) of Borrowers taken as a whole, (b) a material
impairment of a Borrower's ability to perform its obligations under the Loan
Documents to which it is a party or of the Lender Group's ability to enforce the
Obligations or realize upon the Collateral, or (c) a material impairment of the
enforceability or priority of the Agent's Liens with respect to the Collateral
as a result of an action or failure to act on the part of a Borrower, provided,
however, that any such change or impairment that would not have occurred but for
a Lender Default shall not be considered a Material Adverse Change.
"Maturity Date" has the meaning set forth in Section 3.4.
"Maximum Revolver Amount" means $26,500,000.
"Merger" has the meaning set forth in the Preamble to this
Agreement.
"Merger Agreement" has the meaning set forth in the Preamble to this
Agreement.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Money Markets" has the meaning set forth in Section 2.6(a).
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"Negotiable Collateral" means all of Borrowers' now owned and
hereafter acquired right, title, and interest with respect to letters of credit,
letter of credit rights, instruments, promissory notes, drafts, documents, and
chattel paper (including electronic chattel paper and tangible chattel paper),
and any and all supporting obligations in respect thereof.
"Net Worth" means, as of any date of determination, the amount of
Borrower's total stockholder's equity.
"Obligations" means all loans (including the Term Loan), Advances,
debts, principal, interest (including any interest that, but for the provisions
of the Bankruptcy Code, would have accrued), contingent reimbursement
obligations with respect to outstanding Letters of Credit, obligations to
purchase foreign currencies pursuant to Foreign Exchange Forward Contracts,
premiums, liabilities (including all amounts charged to Borrowers' Loan Account
pursuant hereto), obligations, fees (including the fees provided for in the Fee
Letter), charges, costs, Lender Group Expenses (including any fees or expenses
that, but for the provisions of the Bankruptcy Code, would have accrued), lease
payments, guaranties, covenants, and duties of any kind and description owing by
Borrowers to the Lender Group pursuant to or evidenced by the Loan Documents and
irrespective of whether for the payment of money, whether direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter arising,
and including all interest not paid when due and all Lender Group Expenses that
Borrowers are required to pay or reimburse by the Loan Documents, by law, or
otherwise. Any reference in this Agreement or in the Loan Documents to the
Obligations shall include all amendments, changes, extensions, modifications,
renewals replacements, substitutions, and supplements, thereto and thereof, as
applicable, both prior and subsequent to any Insolvency Proceeding.
"Officers' Certificate" means the representations and warranties of
officers form submitted by Agent to Administrative Borrower, together with
Borrowers' completed responses to the inquiries set forth therein, the form and
substance of such responses to be satisfactory to Agent.
"Originating Lender" has the meaning set forth in Section 14.1(e).
"Overadvance" has the meaning set forth in Section 2.5.
"Parent" has the meaning set forth in the preamble to this
Agreement.
"Parent Disclosure Letter" has the meaning set forth in Section 5.
"Participant" has the meaning set forth in Section 14.1(e).
"Patent Security Agreement" means a patent security agreement
executed and delivered by Borrowers and Agent, the form and substance of which
is satisfactory to Agent.
"Pay-Off Letter" means a letter, in form and substance satisfactory
to Agent, from Existing Lender to Agent respecting the amount necessary to repay
in full all of the obligations of Borrowers owing to Existing Lender and obtain
a release of all of the Liens existing in favor of Existing Lender in and to the
assets of Borrowers.
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"Permitted Discretion" means a determination made in good faith and
in the exercise of reasonable business judgment consistent with the historical
business practices of Agent.
"Permitted Dispositions" means (a) sales or other dispositions by
Borrowers of any Equipment that is demonstration equipment or any other
Equipment that is substantially worn, damaged, or obsolete in the ordinary
course of the applicable Borrower's business, (b) sales by Borrowers of
Inventory to buyers in the ordinary course of business, (c) the use or transfer
of money or Cash Equivalents by Borrowers in a manner that is not prohibited by
the terms of this Agreement or the other Loan Documents, (d) the licensing by
Borrower, on a non-exclusive basis, of patents, trademarks, copyrights, and
other intellectual property rights in the ordinary course of the applicable
Borrower's business, and (e) sales, transfers or other dispositions from one
Borrower to any other Borrower (but only to the extent that such sale, transfer
or disposition does not cause a Material Adverse Change).
"Permitted Investments" means (a) investments in Cash Equivalents,
(b) investments in negotiable instruments for collection, (c) advances made in
connection with purchases of goods or services in the ordinary course of
business, (d) investments by any Borrower in any other Borrower provided that if
any such investment is in the form of Indebtedness, such Indebtedness investment
shall be subject to the terms and conditions of the Intercompany Subordination
Agreement, and (e) so long as no Event of Default has occurred and is
continuing, purchases of assets or stock for the purposes of acquiring control
of a Person or a division of a Person so long as the cash portion of such
purchases is not in an amount in excess of $5,000,000 during any calendar year.
"Permitted Liens" means (a) Liens held by Agent for the benefit of
Agent and the Lenders, (b) Liens for unpaid taxes that either (i) are not yet
delinquent, or (ii) do not constitute an Event of Default hereunder and are the
subject of Permitted Protests, (c) Liens set forth on Schedule P-1, (d) the
interests of lessors under operating leases, (e) the interests of lessors under
Capital Leases to the extent that such interests attach only to the capital
asset subject to such Capital Leases, (f) Liens arising by operation of law in
favor of warehousemen, landlords, carriers, mechanics, materialmen, laborers, or
suppliers, incurred in the ordinary course of Borrowers' business and not in
connection with the borrowing of money, and which Liens either (i) are for sums
not yet delinquent, or (ii) are the subject of Permitted Protests, (g) Liens
arising from deposits made in connection with obtaining worker's compensation or
other unemployment insurance, (h) Liens or deposits to secure performance of
bids, tenders, or leases incurred in the ordinary course of Borrowers' business
and not in connection with the borrowing of money, (i) Liens granted as security
for surety or appeal bonds in connection with obtaining such bonds in the
ordinary course of Borrowers' business, (j) Liens resulting from any judgment or
award that is not an Event of Default hereunder and (k) Liens granted as
purchase money security interests to secure Indebtedness permitted under Section
7.1(b).
"Permitted Protest" means the right of the applicable Borrower to
protest any Lien (other than any such Lien that secures the Obligations), taxes
(other than payroll taxes or taxes that are the subject of a United States
federal tax lien), or rental payment, provided that (a) a reserve with respect
to such obligation is established on the Books in such amount as is required
under GAAP, (b) any such protest is instituted promptly and prosecuted
diligently by the
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applicable Borrower in good faith, and (c) Agent is satisfied in its Permitted
Discretion that, while any such protest is pending, there will be no impairment
of the enforceability, validity, or priority of any of the Agent's Liens.
"Person" means natural persons, corporations, limited liability
companies, limited partnerships, general partnerships, limited liability
partnerships, joint ventures, trusts, land trusts, business trusts, or other
organizations, irrespective of whether they are legal entities, and governments
and agencies and political subdivisions thereof.
"Prime Rate" means the prime rate announced by U.S. Bank.
"Prime Rate Loan" has the meaning set forth in Section 2.6(a).
"Pro Rata Share" means:
(a) with respect to a Lender's obligation to make Advances
(including Advances to fund Borrowers' purchase Obligations under Foreign
Exchange Forward Contracts) and receive payments of principal, interest, fees,
costs, and expenses with respect thereto, the percentage obtained by dividing
(i) such Lender's Revolver Commitment, by (ii) the aggregate Revolver
Commitments of all Lenders,
(b) with respect to a Lender's obligation to participate in Letters
of Credit, to reimburse the Issuing Lender, and to receive payments of fees with
respect thereto, the percentage obtained by dividing (i) such Lender's Revolver
Commitment, by (ii) the aggregate Revolver Commitments of all Lenders,
(c) with respect to a Lender's obligation to make the Term Loan and
receive payments of interest, fees, and principal with respect thereto, the
percentage obtained by dividing (i) such Lender's Term Loan Commitment, by (ii)
the aggregate amount of all Lenders' Term Loan Commitments, and
(d) with respect to all other matters (including the indemnification
obligations arising under Section 16.7), the percentage obtained by dividing (i)
such Lender's Total Commitment, by (ii) the aggregate amount of Total
Commitments of all Lenders; provided, however, that, in each case, in the event
all Commitments have been terminated, Pro Rata Share shall be determined
according to the Commitments in effect immediately prior to such termination.
"Record" means information that is inscribed on a tangible medium or
which is stored in an electronic or other medium and is retrievable in
perceivable form.
"Remedial Action" means all actions taken to (a) clean up, remove,
remediate, contain, treat, monitor, assess, evaluate, or in any way address
Hazardous Materials in the indoor or outdoor environment, (b) prevent or
minimize a release or threatened release of Hazardous Materials so they do not
migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment, (c) perform any pre-remedial studies,
investigations, or post-remedial operation and maintenance activities, or (d)
conduct any other actions authorized by 42 USC Section 9601.
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"Report" has the meaning set forth in Section 16.17.
"Required Lenders" means, at any time, Lenders whose Pro Rata Shares
aggregate 66-2/3% of the Total Commitments, or if the Commitments have been
terminated irrevocably, 66-2/3% of the Obligations then outstanding.
"Reserve Percentage" means, on any day, for any Lender, the maximum
percentage prescribed by the Board of Governors of the Federal Reserve System
(or any successor Governmental Authority) for determining the reserve
requirements (including any basic, supplemental, marginal, or emergency
reserves) that are in effect on such date with respect to eurocurrency funding
(currently referred to as "eurocurrency liabilities") of that Lender, but so
long as such Lender is not required or directed under applicable regulations to
maintain such reserves, the Reserve Percentage shall be zero.
"Revolver Commitment" means, with respect to each Lender, its
Revolver Commitment, and, with respect to all Lenders, their Revolver
Commitments, in each case as such Dollar amounts are set forth beside such
Lender's name under the applicable heading on Schedule C-1 or on the signature
page of the Assignment and Acceptance pursuant to which such Lender became a
Lender hereunder in accordance with the provisions of Section 14.1.
"Revolver Usage" means, as of any date of determination, the sum of
(a) the amount of outstanding Advances, plus (b) the amount of the Letter of
Credit Usage, plus (c) the amount of the Foreign Exchange Reserve.
"Risk Participation Liability" means, as to each Letter of Credit,
all reimbursement obligations of Borrowers to the Issuing Lender with respect to
an L/C Undertaking, consisting of (a) the amount available to be drawn or which
may become available to be drawn, (b) all amounts that have been paid by the
Issuing Lender to the Underlying Issuer to the extent not reimbursed by
Borrowers, whether by the making of an Advance or otherwise, and (c) all accrued
and unpaid interest, fees, and expenses payable with respect thereto.
"S&P" means Standard & Poor's Corporation.
"SEC" means the United States Securities and Exchange Commission and
any successor thereto.
"Securities Account" means a "securities account" as that term is
defined in the Code.
"Senior Debt" means any Debt that is in any manner senior in right
of payment or security to any Subordinated Debt.
"Senior Debt to EBITDA Ratio" means, as of the end of the most
recently concluded fiscal quarter of Borrowers, the ratio of all then
outstanding Senior Debt to the EBITDA for the period of four fiscal quarters
ending on such date (provided, however, that for the first three fiscal quarters
of the term of this Agreement, the EBITDA shall be calculated using the actual
results of Borrowers for the then immediately preceding four fiscal quarters
assuming (solely for purposes of this calculation), that the Merger had been
consummated during
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the entire period in which the measurement is being made (i.e. inclusive of the
historical results of DTM Corporation and its Subsidiaries).
"Settlement" has the meaning set forth in Section 2.3(f)(i).
"Settlement Date" has the meaning set forth in Section 2.3(f)(i).
"Solvent" means, with respect to any Person on a particular date,
that such Person is not insolvent (as such term is defined in the Uniform
Fraudulent Transfer Act).
"Stock" means all shares, options, warrants, interests,
participations, or other equivalents (regardless of how designated) of or in a
Person, 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 SEC under the Exchange Act).
"Stock Pledge Agreement" means that certain stock pledge agreement,
in form and substance satisfactory to Agent, executed and delivered by Tiger
Deals, Inc. to Agent with respect to the pledge of Stock of DTM Corporation
owned by Tiger Deals, Inc.
"Subordinated Debt" means any Debt that is in any manner
subordinated in right of payment or security to any Senior Debt on terms and
conditions satisfactory to Agent in its Permitted Discretion.
"Subsidiary" of a Person means a corporation, partnership, limited
liability company, or other entity in which that Person directly or indirectly
owns or controls the shares of Stock having ordinary voting power to elect a
majority of the board of directors (or appoint other comparable managers) of
such corporation, partnership, limited liability company, or other entity.
"Swing Lender" means U.S. Bank or any other Lender that, at the
request of Administrative Borrower and with the consent of Agent agrees, in such
Lender's sole discretion, to become the Swing Lender hereunder.
"Swing Loan" has the meaning set forth in Section 2.3(d)(i).
"Tangible Net Worth" means, as of any date of determination, the
result of (a) the total stockholder's equity of Parent and its Subsidiaries,
minus (b) the sum of (i) all Intangible Assets of Parent and its Subsidiaries,
and (ii) all amounts due to Parent and its Subsidiaries from Affiliates,
provided that the affect of any cumulative foreign currency translation
adjustments shall be excluded from Tangible Net Worth.
"Taxes" has the meaning set forth in Section 16.11.
"Tender Offer" has the meaning set forth in the Preamble to this
Agreement.
"Term Loan" has the meaning set forth in Section 2.2.
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"Term Loan Amount" means $15,000,000.
"Term Loan Commitment" means, with respect to each Lender, its Term
Loan Commitment, and, with respect to all Lenders, their Term Loan Commitments,
in each case as such Dollar amounts are set forth beside such Lender's name
under the applicable heading on Schedule C-1 or on the signature page of the
Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of Section 14.1.
"Total Commitment" means, with respect to each Lender, its Total
Commitment, and, with respect to all Lenders, their Total Commitments, in each
case as such Dollar amounts are set forth beside such Lender's name under the
applicable heading on Schedule C-1 attached hereto or on the signature page of
the Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of Section 14.1.
"Total Debt" means, as of any date of determination, the sum of
Senior Debt and Subordinated Debt.
"Total Debt to EBITDA Ratio" means, as of the end of the most
recently concluded fiscal quarter of Borrowers, the ratio of the Total Debt
outstanding as of the end of such fiscal quarter to the EBITDA for the period of
four fiscal quarters ending on such date (provided, however, that for the first
three fiscal quarters of the term of this Agreement, the EBITDA shall be
calculated using the actual results of Borrowers for the then immediately
preceding four fiscal quarters assuming (solely for purposes of this
calculation), that the Merger had been consummated during the entire period in
which the measurement is being made (i.e. inclusive of the historical results of
DTM Corporation and its Subsidiaries).
"Trademark Security Agreement" means a trademark security agreement
executed and delivered by Borrower and Agent, the form and substance of which is
satisfactory to Agent.
"U.S. Bank" means U.S. Bank National Association.
"Voidable Transfer" has the meaning set forth in Section 17.7.
1.2 ACCOUNTING TERMS. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP. When used herein, the term
"financial statements" shall include the notes and schedules thereto. Whenever
the term "Borrowers" or the term "Parent" is used in respect of a financial
covenant or a related definition, it shall be understood to mean Parent and its
Subsidiaries on a consolidated basis unless the context clearly requires
otherwise.
1.3 CODE. Any terms used in this Agreement that are defined in the Code
shall be construed and defined as set forth in the Code unless otherwise defined
herein.
1.4 CONSTRUCTION. Unless the context of this Agreement or any other Loan
Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the term "including" is
not limiting, and the term "or" has, except where otherwise indicated, the
inclusive meaning represented by the phrase "and/or." The words "hereof,"
"herein," "hereby," "hereunder," and similar terms in this Agreement or any
other Loan Document refer to this Agreement or such other Loan Document, as the
case may be, as a
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whole and not to any particular provision of this Agreement or such other Loan
Document, as the case may be. Section, subsection, clause, schedule, and exhibit
references herein are to this Agreement unless otherwise specified. Any
reference in this Agreement or in the other Loan Documents to any agreement,
instrument, or document shall include all alterations, amendments, changes,
extensions, modifications, renewals, replacements, substitutions, joinders, and
supplements, thereto and thereof, as applicable (subject to any restrictions on
such alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements set forth herein). Any
reference herein to any Person shall be construed to include such Person's
successors and assigns. Any requirement of a writing contained herein or in the
other Loan Documents shall be satisfied by the transmission of a Record and any
Record transmitted shall constitute a representation and warranty as to the
accuracy and completeness of the information contained therein.
1.5 SCHEDULES AND EXHIBITS. All of the schedules and exhibits attached
to this Agreement shall be deemed incorporated herein by reference.
2. LOAN AND TERMS OF PAYMENT.
2.1 REVOLVER ADVANCES.
(a) Subject to the terms and conditions of this Agreement, (i) from
and after the closing of the Tender Offer through September 30, 2001, each
Lender with a Revolver Commitment shall make advances (collectively, the
"Advances") to Borrowers of its Pro Rata Share of the amount required to finance
Borrowers' financial obligations arising in connection with the consummation of
the Tender Offer, the Merger, and the other transactions contemplated by the
Merger Agreement and the Merger, as well as any other use of proceeds permitted
under Section 7.17; provided, however, that the aggregate outstanding amount of
all such Advances shall not exceed the lesser of (1) the Maximum Revolver
Commitment, and (2) the amount that would be calculated as the Borrowing Base
(as defined below) if the assets of DTM Corporation and the accounts of the
Foreign Subsidiaries were deemed assets of Borrowers and (ii) commencing on
October 1, 2001 and at all times thereafter during the first 3 years of the term
of this Agreement, each Lender with a Revolver Commitment agrees (severally, not
jointly or jointly and severally) to make additional Advances to Borrowers in an
amount at any one time outstanding not to exceed such Lender's Pro Rata Share of
an amount equal to the lesser of (i) the Maximum Revolver Amount less the amount
of the outstanding Advances, less the Letter of Credit Usage and less the
Foreign Exchange Reserve, or (ii) the Borrowing Base less the amount of the
outstanding Advances, less the Letter of Credit Usage and less the Foreign
Exchange Reserve. For purposes of this Agreement, "Borrowing Base," as of any
date of determination, shall mean the result of:
(x) 85% of the amount of Eligible Foreign Accounts and
Eligible Domestic Accounts (provided, however, that
commencing on the first day of the 7th month
following the Closing Date, the advance percentage
on Eligible Domestic Accounts shall be permanently
reduced to 80%), plus
(y) the lowest of
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(i) $13,250,000,
(ii) 50% of the value of Eligible Inventory, and
(iii) 50% of the amount of credit availability created by
clause (x) above, minus
(z) the aggregate amount of reserves, if any, established by
Agent under Section 2.1(b).
(b) Anything to the contrary in this Section 2.1 notwithstanding,
Agent shall have the right to establish reserves in such amounts as Agent shall
deem necessary in its Permitted Discretion with respect to (i) sums that
Borrowers are required to pay (such as taxes, assessments, insurance premiums,
or, in the case of leased assets, rents or other amounts payable under such
leases) and has failed to pay under any Section of this Agreement or any other
Loan Document, (ii) amounts owing by Borrowers to any Person to the extent
secured by a Lien on, or trust over, any of the Collateral (other than any
existing Permitted Lien set forth on Schedule P-1 which is specifically
identified thereon as entitled to have priority over the Agent's Liens), which
Lien or trust, in the Permitted Discretion of Agent likely would have a priority
superior to the Agent's Liens (such as Liens or trusts in favor of landlords,
warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or Liens
or trusts for ad valorem, excise, sales, or other taxes where given priority
under applicable law) in and to such item of the Collateral, or (iii) any
Material Adverse Change.
(c) The Lenders with Revolver Commitments shall have no obligation
to make additional Advances hereunder to the extent such additional Advances
would cause the Revolver Usage to exceed the Maximum Revolver Amount.
(d) Amounts borrowed pursuant to this Section may be repaid and,
subject to the terms and conditions of this Agreement, reborrowed at any time
during the term of this Agreement.
2.2 TERM LOAN. Subject to the terms and conditions of this Agreement, on
the Closing Date each Lender with a Term Loan Commitment agrees (severally, not
jointly or jointly and severally) to make term loans (collectively, the "Term
Loan") to Borrowers in an amount equal to such Lender's Pro Rata Share of the
Term Loan Amount. The Term Loan shall be repaid on the following dates and in
the following amounts:
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----------------------------------------------------------------------------------------
Date Installment Amount
----------------------------------------------------------------------------------------
Commencing on July 1, 2001 and continuing Accrued and unpaid interest
on the same day of each month until
November 1, 2006
----------------------------------------------------------------------------------------
Commencing on January 1, 2002 and Quarterly principal installments equal to
continuing on the same day of every the lesser of the outstanding principal
third month thereafter balance of the Term Loan or $750,000 each
----------------------------------------------------------------------------------------
On December 1, 2006 The unpaid principal balance, plus accrued
interest
----------------------------------------------------------------------------------------
Within 30 days following the receipt by Agent of Parent's annual financial
statements pursuant to Section 6.3(b), but in no event more than 150 days
following the end of each of Parent's fiscal years, Borrowers shall make a
mandatory prepayment of principal on the Term Loan in an amount equal to 40% of
the Excess Cash Flow, if any, for the fiscal year just ended. Borrowers shall
not be deemed to be in violation of Section 7.20(a)(iv) if a violation of that
Section is caused solely by Borrowers' compliance with this Section (and Lenders
will irrevocably and perpetually waive any breach or violation arising as a
result of the foregoing). In addition to the mandatory prepayments, Borrowers
shall also be entitled to make voluntary prepayments of the Term Loan without
penalty or premium so long as such voluntary prepayments do not cause or result
in an Event of Default hereunder. The mandatory and voluntary prepayments of
principal shall be applied to installments of principal due on the Term Loan in
their inverse order of maturity.
The outstanding unpaid principal balance and all accrued and unpaid interest
under the Term Loan shall be due and payable on the date of termination of this
Agreement, whether by its terms, by prepayment, or by acceleration. All amounts
outstanding under the Term Loan shall constitute Obligations.
2.3 BORROWING PROCEDURES AND SETTLEMENTS.
(a) PROCEDURE FOR BORROWING. Other than the Borrowing in connection
with the closing of the Tender Offer and the Merger, which shall be made at and
after the closing of the Tender Offer, each Borrowing shall be made by an
irrevocable written request by an Authorized Person delivered to Agent (which
notice must be received by Agent no later than 10:00 a.m. (California time) on
the Business Day prior to the date that is the requested Funding Date in the
case of a request for an Advance or the Term Loan specifying (i) the amount of
such Borrowing, and (ii) the requested Funding Date, which shall be a Business
Day; provided, however, that in the case of a request for Swing Loan in an
amount of $5,000,000, or less, such notice will be timely received if it is
received by Agent no later than 10:00 a.m. (California time) on the Business Day
that is the requested Funding Date) specifying (i) the amount of such Borrowing,
and (ii) the requested Funding Date, which shall be a Business Day. At Agent's
election, in lieu of delivering the above-described written request, any
Authorized Person may give
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Agent telephonic notice of such request by the required time, with such
telephonic notice to be confirmed in writing within 24 hours of the giving of
such notice.
(b) AGENT'S ELECTION. Promptly after receipt of a request for a
Borrowing pursuant to Section 2.3(a), the Agent shall comply with the terms of
Section 2.3(c) if the requested Borrowing is for the Term Loan or an Advance as
a LIBOR Rate Loan. If the requested Borrowing is for an Advance as a Prime Rate
Loan or a Swing Loan, then Agent shall elect, in its discretion, (i) to have the
terms of Section 2.3(c) apply or (ii) to request Swing Lender to make a Swing
Loan pursuant to the terms of Section 2.3(d) in the amount of the requested
Borrowing; provided, however, that if Swing Lender declines in its sole
discretion to make a Swing Loan pursuant to Section 2.3(d), Agent shall elect to
have the terms of Section 2.3(c) apply to such requested Borrowing.
(c) MAKING OF ADVANCES.
(i) In the event that Agent shall elect to have the terms of
this Section 2.3(c) apply to a requested Borrowing as described in Section
2.3(b), then promptly after receipt of a request for a Borrowing pursuant to
Section 2.3(a), Agent shall notify the Lenders, not later than 1:00 p.m.
(California time) on the Business Day immediately preceding the Funding Date
applicable thereto, by telecopy, telephone, or other similar form of
transmission, of the requested Borrowing. Each Lender shall make the amount of
such Lender's Pro Rata Share of the requested Borrowing available to Agent in
immediately available funds, to Agent's Account, not later than 10:00 a.m.
(California time) on the Funding Date applicable thereto. After Agent's receipt
of the proceeds of such Advances (or the Term Loan, as applicable), upon
satisfaction of the applicable conditions precedent set forth in Section 3
hereof, Agent shall make the proceeds thereof available to Administrative
Borrower on the applicable Funding Date by transferring immediately available
funds equal to such proceeds received by Agent to Administrative Borrower's
Designated Account; provided, however, that, subject to the provisions of
Section 2.3(i), Agent shall not request any Lender to make, and no Lender shall
have the obligation to make, any Advance (or its portion of the Term Loan) if
Agent shall have actual knowledge that (1) one or more of the applicable
conditions precedent set forth in Section 3 will not be satisfied on the
requested Funding Date for the applicable Borrowing unless such condition has
been waived, or (2) the requested Borrowing would exceed the Availability on
such Funding Date.
(ii) Unless Agent receives notice from a Lender on or prior to
the Closing Date or, with respect to any Borrowing after the Closing Date, at
least 1 Business Day prior to the date of such Borrowing, that such Lender will
not make available as and when required hereunder to Agent for the account of
Borrowers the amount of that Lender's Pro Rata Share of the Borrowing, Agent may
assume that each Lender has made or will make such amount available to Agent in
immediately available funds on the Funding Date and Agent may (but shall not be
so required), in reliance upon such assumption, make available to Borrowers on
such date a corresponding amount. If and to the extent any Lender shall not have
made its full amount available to Agent in immediately available funds and Agent
in such circumstances has made available to Borrowers such amount, that Lender
shall on the Business Day following such Funding Date make such amount available
to Agent, together with interest at the Defaulting Lender Rate for each day
during such period. A notice submitted by Agent to any Lender with
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respect to amounts owing under this subsection shall be conclusive, absent
manifest error. If such amount is so made available, such payment to Agent shall
constitute such Lender's Advance on the date of Borrowing for all purposes of
this Agreement. If such amount is not made available to Agent on the Business
Day following the Funding Date, Agent will notify Administrative Borrower of
such failure to fund and, upon demand by Agent, Borrowers shall pay such amount
to Agent for Agent's account, together with interest thereon for each day
elapsed since the date of such Borrowing, at a rate per annum equal to the
interest rate applicable at the time to the Advances composing such Borrowing.
The failure of any Lender to make any Advance on any Funding Date shall not
relieve any other Lender of any obligation hereunder to make an Advance on such
Funding Date, but no Lender shall be responsible for the failure of any other
Lender to make the Advance to be made by such other Lender on any Funding Date.
So long as all of the conditions precedent to the Advances and Term Loan have
been satisfied, as determined by Agent in its Permitted Discretion, Agent and
Lenders agree that they shall make a combination of Advances available under
Section 2.1(a) and the Term Loan in order to provide financing for the Tender
Offer, the Merger, and the other transactions contemplated by the Merger
Agreement.
(iii) Agent shall not be obligated to transfer to a Defaulting
Lender any payments made by Borrowers to Agent for the Defaulting Lender's
benefit, and, in the absence of such transfer to the Defaulting Lender, Agent
shall transfer any such payments to each other non-Defaulting Lender member of
the Lender Group ratably in accordance with their Commitments (but only to the
extent that such Defaulting Lender's Advance was funded by the other members of
the Lender Group) or, if so directed by Administrative Borrower and if no
Default or Event of Default had occurred and is continuing (and to the extent
such Defaulting Lender's Advance was not funded by the Lender Group), retain
same to be re-advanced to Borrowers as if such Defaulting Lender had made
Advances to Borrowers. Subject to the foregoing, Agent may hold and, in its
Permitted Discretion, re-lend to Borrowers for the account of such Defaulting
Lender the amount of all such payments received and retained by it for the
account of such Defaulting Lender. Solely for the purposes of voting or
consenting to matters with respect to the Loan Documents, such Defaulting Lender
shall be deemed not to be a "Lender" and such Lender's Commitment shall be
deemed to be zero. This Section shall remain effective with respect to such
Lender until (x) the Obligations under this Agreement shall have been declared
or shall have become immediately due and payable, (y) the non-Defaulting
Lenders, Agent, and Administrative Borrower shall have waived such Defaulting
Lender's default in writing, or (z) the Defaulting Lender makes its Pro Rata
Share of the applicable Advance and pays to Agent all amounts owing by
Defaulting Lender in respect thereof. The operation of this Section shall not be
construed to increase or otherwise affect the Commitment of any Lender, to
relieve or excuse the performance by such Defaulting Lender or any other Lender
of its duties and obligations hereunder, or to relieve or excuse the performance
by Borrowers of their duties and obligations hereunder to Agent or to the
Lenders other than such Defaulting Lender. Any such failure to fund by any
Defaulting Lender shall constitute a material breach by such Defaulting Lender
of this Agreement and shall entitle Administrative Borrower at its option, upon
written notice to Agent, to arrange for a substitute Lender to assume the
Commitment of such Defaulting Lender, such substitute Lender to be acceptable to
Agent. In connection with the arrangement of such a substitute Lender, the
Defaulting Lender shall have no right to refuse to be replaced hereunder, and
agrees to execute and deliver a completed form of Assignment and Acceptance
Agreement in favor of the substitute Lender (and agrees that it
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shall be deemed to have executed and delivered such document if it fails to do
so) subject only to being repaid its share of the outstanding Obligations
(including an assumption of its Pro Rata Share of the Risk Participation
Liability) without any premium or penalty of any kind whatsoever; provided
further, however, that any such assumption of the Commitment of such Defaulting
Lender shall not be deemed to constitute a waiver of any of the Lender Groups'
or Borrowers' rights or remedies against any such Defaulting Lender arising out
of or in relation to such failure to fund.
(d) MAKING OF SWING LOANS.
(i) In the event Agent shall elect, with the consent of Swing
Lender, as a Lender, to have the terms of this Section 2.3(d) apply to a
requested Borrowing as described in Section 2.3(b), Swing Lender as a Lender
shall make such Advance in the amount of such Borrowing (any such Advance made
solely by Swing Lender as a Lender pursuant to this Section 2.3(d) being
referred to as a "Swing Loan" and such Advances being referred to collectively
as "Swing Loans") available to Borrowers on the Funding Date applicable thereto
by transferring immediately available funds to Administrative Borrower's
Designated Account. Each Swing Loan is an Advance hereunder and shall be subject
to all the terms and conditions applicable to other Advances, except that no
such Swing Loan shall be eligible for the LIBOR Option and all payments on any
Swing Loan shall be payable to Swing Lender as a Lender solely for its own
account (and for the account of the holder of any participation interest with
respect to such Swing Loan). Subject to the provisions of Section 2.3(i), Agent
shall not request Swing Lender as a Lender to make, and Swing Lender as a Lender
shall not make, any Swing Loan if Agent has actual knowledge that (i) one or
more of the applicable conditions precedent set forth in Section 3 will not be
satisfied on the requested Funding Date for the applicable Borrowing unless such
condition has been waived, or (ii) the requested Borrowing would exceed the
Availability on such Funding Date. Swing Lender as a Lender shall not otherwise
be required to determine whether the applicable conditions precedent set forth
in Section 3 have been satisfied on the Funding Date applicable thereto prior to
making, in its sole discretion, any Swing Loan.
(ii) The Swing Loans shall be secured by the Agent's Liens,
shall constitute Advances and Obligations hereunder, and shall bear interest at
the rate applicable from time to time to Advances that are Prime Rate Loans.
(e) AGENT ADVANCES.
(i) Agent hereby is authorized by Borrowers and the Lenders,
from time to time in Agent's sole discretion, (1) after the occurrence and
during the continuance of a Default or an Event of Default, or (2) at any time
that any of the other applicable conditions precedent set forth in Section 3
have not been satisfied, to make Advances to Borrowers on behalf of the Lenders
that Agent, in its Permitted Discretion deems necessary or desirable (A) to
preserve or protect the Collateral, or any portion thereof, (B) to enhance the
likelihood of repayment of the Obligations, or (C) to pay any other amount
chargeable to Borrowers pursuant to the terms of this Agreement, including
Lender Group Expenses and the costs, fees, and expenses described in Section 10
(any of the Advances described in this Section 2.3(e) shall be referred to as
"Agent Advances"). Each Agent Advance is an Advance hereunder and shall be
subject to all the terms and conditions applicable to other Advances, except
that no such Agent
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Advance shall be eligible for the LIBOR Option and all payments thereon shall be
payable to Agent solely for its own account (and for the account of the holder
of any participation interest with respect to such Agent Advance).
(ii) The Agent Advances shall be repayable on demand and secured
by the Agent's Liens granted to Agent under the Loan Documents, shall constitute
Advances and Obligations hereunder, and shall bear interest at the rate
applicable from time to time to Advances that are Prime Rate Loans.
(f) SETTLEMENT. It is agreed that each Lender's funded portion of
the Advances is intended by the Lenders to equal, at all times, such Lender's
Pro Rata Share of the outstanding Advances. Such agreement notwithstanding,
Agent, Swing Lender, and the other Lenders agree (which agreement shall not be
for the benefit of or enforceable by Borrowers) that in order to facilitate the
administration of this Agreement and the other Loan Documents, settlement among
them as to the Advances, the Swing Loans, and the Agent Advances shall take
place on a periodic basis in accordance with the following provisions:
(i) Agent shall request settlement ("Settlement") with the
Lenders on a weekly basis, or on a more frequent basis if so determined by
Agent, (1) on behalf of Swing Lender, with respect to each outstanding Swing
Loan, (2) for itself, with respect to each Agent Advance, and (3) with respect
to Collections received, as to each by notifying the Lenders by telecopy,
telephone, or other similar form of transmission, of such requested Settlement,
no later than 2:00 p.m. (California time) on the Business Day immediately prior
to the date of such requested Settlement (the date of such requested Settlement
being the "Settlement Date"). Such notice of a Settlement Date shall include a
summary statement of the amount of outstanding Advances, Swing Loans, and Agent
Advances for the period since the prior Settlement Date. Subject to the terms
and conditions contained herein (including Section 2.3(c)(iii)): (y) if a
Lender's balance of the Advances, Swing Loans, and Agent Advances exceeds such
Lender's Pro Rata Share of the Advances, Swing Loans, and Agent Advances as of a
Settlement Date, then Agent shall, by no later than 12:00 p.m. (California time)
on the Settlement Date, transfer in immediately available funds to the account
of such Lender as such Lender may designate, an amount such that each such
Lender shall, upon receipt of such amount, have as of the Settlement Date, its
Pro Rata Share of the Advances, Swing Loans, and Agent Advances, and (z) if a
Lender's balance of the Advances, Swing Loans, and Agent Advances is less than
such Lender's Pro Rata Share of the Advances, Swing Loans, and Agent Advances as
of a Settlement Date, such Lender shall no later than 12:00 p.m. (California
time) on the Settlement Date transfer in immediately available funds to the
Agent's Account, an amount such that each such Lender shall, upon transfer of
such amount, have as of the Settlement Date, its Pro Rata Share of the Advances,
Swing Loans, and Agent Advances. Such amounts made available to Agent under
clause (z) of the immediately preceding sentence shall be applied against the
amounts of the applicable Swing Loan or Agent Advance and, together with the
portion of such Swing Loan or Agent Advance representing Swing Lender's Pro Rata
Share thereof, shall constitute Advances of such Lenders. If any such amount is
not made available to Agent by any Lender on the Settlement Date applicable
thereto to the extent required by the terms hereof, Agent shall be entitled to
recover for its account such amount on demand from such Lender together with
interest thereon at the Defaulting Lender Rate.
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(ii) In determining whether a Lender's balance of the Advances,
Swing Loans, and Agent Advances is less than, equal to, or greater than such
Lender's Pro Rata Share of the Advances, Swing Loans, and Agent Advances as of a
Settlement Date, Agent shall, as part of the relevant Settlement, apply to such
balance the portion of payments actually received in good funds by Agent with
respect to principal, interest, fees payable by Borrowers and allocable to the
Lenders hereunder, and proceeds of Collateral. To the extent that a net amount
is owed to any such Lender after such application, such net amount shall be
distributed by Agent to that Lender as part of such next Settlement.
(iii) Between Settlement Dates, Agent, to the extent no Agent
Advances or Swing Loans are outstanding, may pay over to Swing Lender any
payments received by Agent, that in accordance with the terms of this Agreement
would be applied to the reduction of the Advances, for application to Swing
Lender's Pro Rata Share of the Advances. If, as of any Settlement Date,
Collections received since the then immediately preceding Settlement Date have
been applied to Swing Lender's Pro Rata Share of the Advances other than to
Swing Loans, as provided for in the previous sentence, Swing Lender shall pay to
Agent for the accounts of the Lenders, and Agent shall pay to the Lenders, to be
applied to the outstanding Advances of such Lenders, an amount such that each
Lender shall, upon receipt of such amount, have, as of such Settlement Date, its
Pro Rata Share of the Advances. During the period between Settlement Dates,
Swing Lender with respect to Swing Loans, Agent with respect to Agent Advances,
and each Lender (subject to the effect of letter agreements between Agent and
individual Lenders) with respect to the Advances other than Swing Loans and
Agent Advances, shall be entitled to interest at the applicable rate or rates
payable under this Agreement on the daily amount of funds employed by Swing
Lender, Agent, or the Lenders, as applicable.
(g) NOTATION. Agent shall record on its books the principal amount
of the Advances owing to each Lender, including the Swing Loans owing to Swing
Lender, and Agent Advances owing to Agent, and the interests therein of each
Lender, from time to time. In addition, each Lender is authorized, at such
Lender's option, to note the date and amount of each payment or prepayment of
principal of such Lender's Advances in its books and records, including computer
records, such books and records constituting conclusive evidence, absent
manifest error, of the accuracy of the information contained therein.
(h) LENDERS' FAILURE TO PERFORM. All Advances (other than Swing
Loans and Agent Advances) shall be made by the Lenders contemporaneously and in
accordance with their Pro Rata Shares. It is understood that (i) no Lender shall
be responsible for any failure by any other Lender to perform its obligation to
make any Advance (or other extension of credit) hereunder, nor shall any
Commitment of any Lender be increased or decreased as a result of any failure by
any other Lender to perform its obligations hereunder, and (ii) no failure by
any Lender to perform its obligations hereunder shall excuse any other Lender
from its obligations hereunder. Notwithstanding anything contained in this
Agreement that would limit the Agent's (as a Lender) financing obligations to
make its Pro Rata Share of the Advances and to fund its Pro Rata Share of the
Term Loan, if no other lender has joined the Lender Group or if any Lender fails
to fund its Pro Rata Share of the Advances and Term Loan which are required in
order to finance the Tender Offer, the Merger and the other transactions
contemplated by the Merger Agreement, then Agent shall fund all of the Advances
available to Borrower under Section 2.1(a) and the Term Loan.
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(i) OPTIONAL OVERADVANCES. Any contrary provision of this Agreement
notwithstanding, the Lenders hereby authorize Agent or Swing Lender, as
applicable, and Agent or Swing Lender, as applicable, may, but is not obligated
to, knowingly and intentionally, continue to make Advances (including Swing
Loans) to Borrowers notwithstanding that an Overadvance exists or thereby would
be created, so long as (i) after giving effect to such Advances (including a
Swing Loan), the outstanding Revolver Usage does not exceed the Borrowing Base
by more than 10% or $250,000, whichever is less (ii) after giving effect to such
Advances (including a Swing Loan), the outstanding Revolver Usage (except for
and excluding amounts charged to the Loan Account for interest, fees, or Lender
Group Expenses) does not exceed the Maximum Revolver Amount, and (iii) at the
time of the making of any such Advance (including any Swing Loan), Agent does
not believe, in good faith, that the Overadvance created by such Advance will be
outstanding for more than 90 days. The foregoing provisions are for the
exclusive benefit of Agent, Swing Lender, and the Lenders and are not intended
to benefit Borrowers in any way. The Advances and Swing Loans, as applicable,
that are made pursuant to this Section 2.3(i) shall be subject to the same terms
and conditions as any other Advance or Swing Loan, as applicable, except that
they shall not be eligible for the LIBOR Option and the rate of interest
applicable thereto shall be the rate applicable to Advances that are Prime Rate
Loans under Section 2.6(c) hereof without regard to the presence or absence of a
Default or Event of Default.
(i) In the event Agent obtains actual knowledge that the
Revolver Usage exceeds the amounts permitted by the preceding paragraph,
regardless of the amount of, or reason for, such excess, Agent shall notify
Lenders as soon as practicable (and prior to making any (or any additional)
intentional Overadvances (except for and excluding amounts charged to the Loan
Account for interest, fees, or Lender Group Expenses) unless Agent determines
that prior notice would result in imminent harm to the Collateral or its value),
and the Lenders with Revolver Commitments thereupon shall, together with Agent,
jointly determine the terms of arrangements that shall be implemented with
Borrowers which are intended to reduce, within a reasonable time, the
outstanding principal amount of the Advances to Borrowers to an amount permitted
by the preceding paragraph. In the event Agent or any Lender disagrees over the
terms of reduction or repayment of any Overadvance, the terms of reduction or
repayment thereof shall be implemented according to the determination of the
Required Lenders.
(ii) Each Lender with a Revolver Commitment shall be obligated
to settle with Agent as provided in Section 2.3(f) for the amount of such
Lender's Pro Rata Share of any unintentional Overadvances by Agent reported to
such Lender, any intentional Overadvances made as permitted under this Section
2.3(i), and any Overadvances resulting from the charging to the Loan Account of
interest, fees, or Lender Group Expenses.
2.4 PAYMENTS.
(a) PAYMENTS BY BORROWERS.
(i) Borrowers hereby authorize Agent to charge Agent's Account
for any and all payment Obligations which become due and payable from time to
time under this Agreement or any of the other Loan Documents. Deposits and
payments by Borrowers to Agent's Account for the account of the Lender Group
shall be made in immediately available
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funds and shall be deemed received on the same Business Day if received by
Agent, no later than 11:00 a.m. (California time) on such Business Day. Any
deposit or payment received by Agent later than 11:00 a.m. (California time)
shall be deemed to have been received on the following Business Day and any
applicable interest or fee shall continue to accrue until such following
Business Day.
(ii) Unless Agent receives notice from Administrative Borrower
prior to the date on which any payment is due to the Lenders that Borrowers will
not make such payment in full as and when required, Agent may assume that
Borrowers have made (or will make) such payment in full to Agent on such date in
immediately available funds and Agent may (but shall not be so required), in
reliance upon such assumption, distribute to each Lender on such due date an
amount equal to the amount then due such Lender. If and to the extent Borrowers
do not make such payment in full to Agent on the date when due, each Lender
severally shall repay to Agent on demand such amount distributed to such Lender,
together with interest thereon at the Defaulting Lender Rate for each day from
the date such amount is distributed to such Lender until the date repaid.
(b) APPORTIONMENT AND APPLICATION OF PAYMENTS.
(i) Except as otherwise provided with respect to Defaulting
Lenders and except as otherwise provided in the Loan Documents (including letter
agreements between Agent and individual Lenders), aggregate principal and
interest payments shall be apportioned ratably among the Lenders (according to
the unpaid principal balance of the Obligations to which such payments relate
held by each Lender) and payments of fees and expenses (other than fees or
expenses that are for Agent's separate account, after giving effect to any
letter agreements between Agent and individual Lenders) shall be apportioned
ratably among the Lenders having a Pro Rata Share of the type of Commitment or
Obligation to which a particular fee relates. All payments shall be remitted to
Agent and all such payments (other than payments received while no Default or
Event of Default has occurred and is continuing and which relate to the payment
of principal or interest of specific Obligations or which relate to the payment
of specific fees), and all proceeds of Accounts or other Collateral received by
Agent, shall be applied as follows:
(A) first, to pay any Lender Group Expenses then due to
Agent under the Loan Documents, until paid in full,
(B) second, to pay any Lender Group Expenses then due to the
Lenders under the Loan Documents, on a ratable basis, until paid in full,
(C) third, to pay any fees then due to Agent (for its
separate accounts, after giving effect to any letter agreements between Agent
and the individual Lenders) under the Loan Documents until paid in full,
(D) fourth, to pay any fees then due to any or all of the
Lenders (after giving effect to any letter agreements between Agent and
individual Lenders) under the Loan Documents, on a ratable basis, until paid in
full,
(E) fifth, to pay interest due in respect of all Agent
Advances, until paid in full,
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(F) sixth, ratably to pay interest due in respect of the
Advances (other than Agent Advances), the Swing Loans, and the Term Loan until
paid in full,
(G) seventh, to pay the principal of all Agent Advances
until paid in full,
(H) eighth, ratably to pay all principal amounts then due
and payable (other than as a result of an acceleration thereof) with respect to
the Term Loan until paid in full,
(I) ninth, to pay the principal of all Swing Loans until
paid in full,
(J) tenth, to pay the principal of all Advances until paid
in full,
(K) eleventh, if an Event of Default has occurred and is
continuing, to pay the outstanding principal balance of the Term Loan (in the
inverse order of the maturity of the installments due thereunder) until the Term
Loan is paid in full,
(L) twelfth, if an Event of Default has occurred and is
continuing, to Agent, to be held by Agent, for the ratable benefit of Issuing
Lender and those Lenders having a Revolver Commitment, as cash collateral in an
amount up to 105% of the then outstanding Letter of Credit Usage until paid in
full,
(M) thirteenth, if an Event of Default has occurred as is
continuing, to Agent, to be held by Agent, for the ratable benefit of the
Lenders having a Revolver Commitment, as cash collateral for all Obligations
owing in connection with outstanding Foreign Exchange Forward Contracts,
(N) fourteenth, to pay any other Obligations until paid in
full, and
(O) fifteenth, to Borrowers (to be wired to the Designated
Account) or such other Person entitled thereto under applicable law.
(ii) Agent promptly shall distribute to each Lender, pursuant to
the applicable wire instructions received from each Lender in writing, such
funds as it may be entitled to receive, subject to a Settlement delay as
provided in Section 2.3(h).
(iii) In each instance, so long as no Default or Event of
Default has occurred and is continuing, Section 2.4(b) shall not be deemed to
apply to any payment by Borrower specified by Borrowers to be for the payment of
specific Obligations then due and payable (or prepayable) under any provision of
this Agreement.
(iv) For purposes of the foregoing, "paid in full" means payment
of all amounts owing under the Loan Documents according to the terms thereof,
including loan fees, service fees, professional fees, interest (and specifically
including interest accrued after the
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commencement of any Insolvency Proceeding), default interest, interest on
interest, and expense reimbursements, whether or not the same would be or is
allowed or disallowed in whole or in part in any Insolvency Proceeding.
(v) In the event of a direct conflict between the priority
provisions of this Section 2.4 and other provisions contained in any other Loan
Document, it is the intention of the parties hereto that such priority
provisions in such documents shall be read together and construed, to the
fullest extent possible, to be in concert with each other. In the event of any
actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms
and provisions of this Section 2.4 shall control and govern.
2.5 OVERADVANCES. If, at any time or for any reason, the amount of
Obligations owed by Borrowers to the Lender Group pursuant to Sections 2.1, 2.12
and 2.13 is greater than either the Dollar or percentage limitations set forth
in Sections 2.1, 2.12 or 2.13, (an "Overadvance"), then, subject to the
immediately succeeding sentence, Borrowers immediately shall pay to Agent, in
cash, the amount of such excess, which amount shall be used by Agent to reduce
the Obligations in accordance with the priorities set forth in Section 2.4(b).
The preceding sentence shall not apply to (i) that portion of the Overadvances,
if any, that arises between the Closing Date and the date the Merger is
consummated which would be eliminated if DTM Corporation was a Borrower
hereunder from and after the Closing Date and its "Eligible" accounts and
"Eligible" inventory (based upon the standards for Eligible Accounts and
Eligible Inventory) were included in the Borrowing Base, and (ii) that portion
of the Overadvances, if any, that arises between the Closing Date and October 1,
2001, which would be eliminated if the accounts of the Foreign Subsidiaries
arising from the sale of goods or rendition of services were deemed to be
Accounts of the Borrowers. In addition, Borrowers hereby promise to pay the
Obligations (including principal, interest, fees, costs, and expenses) in
Dollars in full to the Lender Group as and when due and payable under the terms
of this Agreement and the other Loan Documents.
2.6 INTEREST RATES AND LETTER OF CREDIT FEE: RATES, PAYMENTS, AND
CALCULATIONS.
(a) INTEREST RATE OPTIONS. Interest on all Obligations (except for
undrawn Letters of Credit and payment obligations under Foreign Exchange Forward
Contracts that have not yet matured) that have been charged to the Loan Account
pursuant to the terms hereof on the Daily Balance thereof shall accrue at one of
the following per annum rates selected by Borrowers: (i) upon notice to the
Agent, the Applicable Margin plus the prime rate announced by U.S. Bank from
time to time, as and when such rate changes (a "Prime Rate Loan"); (ii) upon a
minimum of two Business Days prior notice, the Applicable Margin plus the 3
month LIBOR rate quoted by U.S. Bank from Telerate Page 3750 or any successor
thereto (which shall be the LIBOR rate in effect two Business Days prior to
commencement of the Advance or the portion of the Term Loan to be subject to the
LIBOR rate) (the "LIBOR Rate" and each such Advance or portion of the Term Loan
is a "LIBOR Rate Loan"). The term "Money Markets" refers to one or more
wholesale funding markets available to U.S. Bank, including negotiable
certificates of deposit, commercial paper, eurodollar deposits, bank notes,
federal funds and others. If a LIBOR Rate Loan is prepaid, whether by the
Borrowers, as a result of acceleration upon an Event of Default or otherwise,
the Borrowers agree to pay all of the Lender Group's costs, expenses and
Interest Differential (as determined by Agent) incurred as a result of such
prepayment. The term "Interest Differential" shall mean that sum equal to the
greater of 0 or the
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financial loss incurred by the Lender Group resulting from prepayment,
calculated as the difference between the amount of interest the Lender Group
would have earned (from like investments in the Money Markets as of the first
day of the LIBOR Rate Loan) had prepayment not occurred and the interest the
Lender Group will actually earn (from like investments in the Money Markets as
of the date of prepayment) as a result of the redeployment of funds from the
amount prepaid. Because of the short-term nature of this facility, the Borrowers
agree that the Interest Differential shall not be discounted to its present
value. Any prepayment of a LIBOR Rate Loan shall be in an amount equal to the
remaining entire principal balance of such LIBOR Rate Loan. In the event the
Borrowers do not timely select another interest rate option at least three
Business Days before a LIBOR Rate Loan expires, such LIBOR Rate Loan shall renew
for the same monthly term as initially chosen, with the rate (before adding on
the Applicable Margin) to be determined two Business Days prior to renewal if a
LIBOR Rate Loan. The U.S. Bank's internal records of applicable interest rates
shall be determinative in the absence of manifest error. Each LIBOR rate option
selected shall apply to a minimum principal amount of $1,000,000 and integral
multiples of $500,000 in excess thereof. For determining payment dates for LIBOR
Rate Loans, the Business Day shall be the standard convention. In the event
after the date of initial funding any governmental authority subjects any Lender
to any new or additional charge, fee, withholding or tax of any kind with
respect to any loans hereunder or changes the method of taxation of such loans
or changes the reserve or deposit requirements applicable to such loans, the
Borrowers shall pay to Agent, on behalf of such Lender, such additional amounts
as will compensate such Lender for such costs or lost income resulting therefrom
as determined by Agent, in its Permitted Discretion.
(b) LETTER OF CREDIT FEE. Borrowers shall pay Agent (for the ratable
benefit of the Lenders with a Revolver Commitment, subject to any letter
agreement between Agent and individual Lenders), a Letter of Credit fee (in
addition to the charges, commissions, fees, and costs set forth in Section
2.12(e)) as follows: (i) with respect to stand by Letters of Credit, a fee which
shall accrue at a rate equal to 1.50% per annum times the Daily Balance of the
undrawn amount of all outstanding stand by Letters of Credit, and (ii) with
respect to commercial Letters of Credit, fees charged by the Issuing Bank in
connection with the issuance and negotiation of commercial Letters of Credit.
(c) DEFAULT RATE. Upon the occurrence and during the continuation of
an Event of Default (and at the election of Agent or the Required Lenders),
(i) all Obligations (except for undrawn Letters of Credit ) that
have been charged to the Loan Account pursuant to the terms hereof shall bear
interest on the Daily Balance thereof at a per annum rate equal to 4 percentage
points above the per annum rate otherwise applicable hereunder, and
(ii) the Letter of Credit fee provided for above shall be
increased to 4 percentage points above the per annum rate otherwise applicable
hereunder.
(d) PAYMENT. Unless otherwise provided herein, interest, Letter of
Credit fees, and all other fees payable hereunder shall be due and payable, in
arrears, on the first day of each month at any time that Obligations or
Commitments are outstanding. Borrowers hereby authorize Agent, from time to time
without prior notice to Borrowers, to charge such interest and
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fees, all Lender Group Expenses (as and when incurred), the charges,
commissions, fees, and costs provided for in Section 2.12(e) (as and when
accrued or incurred), the fees and costs provided for in Section 2.11 (as and
when accrued or incurred), the charges, commissions, fees and costs provided
under the Foreign Exchange Forward Contracts and all other payments as and when
due and payable under any Loan Document (including the installments when due and
payable with respect to the Term Loan) to Borrowers' Loan Account, which amounts
thereafter constitute Advances hereunder and shall accrue interest at the rate
then applicable to Advances hereunder. Any interest not paid when due shall be
compounded by being charged to Borrowers' Loan Account and shall thereafter
constitute Advances hereunder and shall accrue interest at the rate then
applicable to Advances that are Prime Rate Loans hereunder.
(e) COMPUTATION. All interest and fees chargeable under the Loan
Documents shall be computed on the basis of a 360 day year for the actual number
of days elapsed. In the event the Prime Rate is changed from time to time
hereafter, the rates of interest hereunder based upon the Prime Rate
automatically and immediately shall be increased or decreased by an amount equal
to such change in the Prime Rate.
(f) INTENT TO LIMIT CHARGES TO MAXIMUM LAWFUL RATE. In no event
shall the interest rate or rates payable under this Agreement, plus any other
amounts paid in connection herewith, exceed the highest rate permissible under
any law that a court of competent jurisdiction shall, in a final determination,
deem applicable. Borrowers and the Lender Group, in executing and delivering
this Agreement, intend legally to agree upon the rate or rates of interest and
manner of payment stated within it; provided, however, that, anything contained
herein to the contrary notwithstanding, if said rate or rates of interest or
manner of payment exceeds the maximum allowable under applicable law, then, ipso
facto, as of the date of this Agreement, Borrowers are and shall be liable only
for the payment of such maximum as allowed by law, and payment received from
Borrowers in excess of such legal maximum, whenever received, shall be applied
to reduce the principal balance of the Obligations to the extent of such excess.
2.7 CASH MANAGEMENT.
(a) Borrowers shall (i) establish and maintain cash management
services of a type and on terms satisfactory to Agent at one or more of the
banks set forth on Schedule 2.7(a) (each, a "Cash Management Bank"), and shall
request in writing and otherwise take such reasonable steps to ensure that all
of its Account Debtors forward payment of the amounts owed by them directly to
such Cash Management Bank, and (ii) to the extent such Collections constitute
proceeds of the Collateral or, if at the time of collection thereof, an Event of
Default has occurred and is continuing, 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 Collections (including those sent directly by Account
Debtors to a Cash Management Bank) into a bank account in Agent's name (a "Cash
Management Account") at one of the Cash Management Banks.
(b) Each Cash Management Bank shall establish and maintain Cash
Management Agreements with Agent and Borrowers, in form and substance acceptable
to Agent. Each such Cash Management Agreement shall provide, among other things,
that (i) all items of payment deposited in such Cash Management Account and
proceeds thereof are held by such Cash Management Bank as agent or
bailee-in-possession for Agent, (ii) the Cash Management
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Bank has no rights of setoff or recoupment or any other claim against the
applicable Cash Management Account other than for payment of its service fees
and other charges directly related to the administration of such Cash Management
Account and for returned checks or other items of payment, and (iii) it
immediately will forward by daily sweep all amounts in the applicable Cash
Management Account to the Agent's Account.
(c) So long as no Default or Event of Default has occurred and is
continuing, Administrative Borrower may amend Schedule 2.7(a) or (b) to add or
replace a Cash Management Bank or Cash Management Account; provided, however,
that (i) such prospective Cash Management Bank shall be satisfactory to Agent
and Agent shall have consented in writing in advance to the opening of such Cash
Management Account with the prospective Cash Management Bank, and (ii) prior to
the time of the opening of such Cash Management Account, Borrowers and such
prospective Cash Management Bank shall have executed and delivered to Agent a
Cash Management Agreement. Borrowers shall close any of their Cash Management
Accounts (and establish replacement cash management accounts in accordance with
the foregoing sentence) promptly and in any event within 30 days of notice from
Agent that the creditworthiness of any Cash Management Bank is no longer
acceptable in Agent's reasonable judgment, or as promptly as practicable and in
any event within 60 days of notice from Agent that the operating performance,
funds transfer, or availability procedures or performance of the Cash Management
Bank with respect to Cash Management Accounts or Agent's liability under any
Cash Management Agreement with such Cash Management Bank is no longer acceptable
in Agent's reasonable judgment.
(d) The Cash Management Accounts shall be cash collateral accounts,
with all cash, checks and similar items of payment in such accounts securing
payment of the Obligations, and in which Borrowers are hereby deemed to have
granted a Lien to Agent.
2.8 CREDITING PAYMENTS; FLOAT CHARGE. The receipt of any payment item by
Agent (whether from transfers to Agent by the Cash Management Banks pursuant to
the Cash Management Agreements or otherwise) shall not be considered a payment
on account unless such payment item is a wire transfer of immediately available
federal funds made to the Agent's Account or unless and until such payment item
is honored when presented for payment. Should any payment item not be honored
when presented for payment, then Borrowers shall be deemed not to have made such
payment and interest shall be calculated accordingly. Anything to the contrary
contained herein notwithstanding, any payment item shall be deemed received by
Agent only if it is received into the Agent's Account on a Business Day on or
before 11:00 a.m. (California time). If any payment item is received into the
Agent's Account on a non-Business Day or after 11:00 a.m. (California time) on a
Business Day, it shall be deemed to have been received by Agent as of the
opening of business on the immediately following Business Day.
2.9 DESIGNATED ACCOUNT. Agent is authorized to make the Advances and the
Term Loan, and Issuing Lender is authorized to issue the Letters of Credit,
under this Agreement based upon telephonic or other instructions received from
anyone purporting to be an Authorized Person, or without instructions if
pursuant to Section 2.6(d). The parties hereto agree that Agent and the Issuing
Lenders shall not have any responsibility or obligation to confirm the actual
identity of anyone purporting to be an Authorized Person. Administrative
Borrower agrees to establish and maintain the Designated Account with the
Designated Account Bank for the
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purpose of receiving the proceeds of the Advances requested by Administrative
Borrower and made by Agent or the Lenders hereunder. Unless otherwise agreed by
Agent and Administrative Borrower, any Advance, Agent Advance, or Swing Loan
requested by Administrative Borrower and made by Agent or the Lenders hereunder
shall be made to the Designated Account.
2.10 MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF OBLIGATIONS. Agent shall
maintain an account on its books in the name of Borrowers (the "Loan Account")
on which Borrowers will be charged with the Term Loan, all Advances (including
Agent Advances, Swing Loans and Advances to fund Borrowers' payment Obligations
under Foreign Exchange Forward Contracts) made by Agent, Swing Lender, or the
Lenders to Borrowers or for Borrowers' account, the Letters of Credit issued by
Issuing Lender for Borrowers' account, and with all other payment Obligations
hereunder or under the other Loan Documents, including, accrued interest, fees
and expenses, and Lender Group Expenses. In accordance with Section 2.8, the
Loan Account will be credited with all payments received by Agent from Borrowers
or for Borrowers' account, including all amounts received in the Agent's Account
from any Cash Management Bank. Agent shall render monthly statements regarding
the Loan Account to Administrative Borrower, including principal, interest,
fees, and including an itemization of all charges and expenses constituting
Lender Group Expenses owing, and such statements shall be conclusively presumed
to be correct and accurate and constitute an account stated between Borrowers
and the Lender Group unless, within 30 days after receipt thereof by
Administrative Borrower, Administrative Borrower shall deliver to Agent written
objection thereto describing the error or errors contained in any such
statements.
2.11 FEES. Borrowers shall pay to Agent the following fees and charges,
which fees and charges shall be non-refundable when paid (irrespective of
whether this Agreement is terminated thereafter) and shall be apportioned among
the Lenders in accordance with the terms of letter agreements between Agent and
individual Lenders:
(a) UNUSED LINE FEE. On the first day of each fiscal quarter of
Borrowers during the term of this Agreement, an unused line fee in the amount
equal to the Applicable Unused Line Fee Rate times the result of (a) the Maximum
Revolver Amount, less (b) the sum of (i) the average Daily Balance of Advances
that were outstanding during the immediately preceding 3 months, plus (ii) the
average Daily Balance of the Letter of Credit Usage during the immediately
preceding 3 months, plus (iii) the average Daily Balance of the Foreign Exchange
Reserve,
(b) FEE LETTER FEES. As and when due and payable under the terms of
the Fee Letter, Borrowers shall pay to Agent the fees set forth in the Fee
Letter,
(c) STAND-BY LETTER OF CREDIT FEES. In connection with the issuance
of each stand-by Letter of Credit, Borrowers shall pay to Agent an issuance fee
equal to 1.50% of the face amount of such stand-by Letter of Credit plus all
other fees, costs and expenses charged by the Issuing Lender, and
(d) AUDIT, APPRAISAL, AND VALUATION CHARGES. For the separate
account of Agent, audit, appraisal, and valuation fees and charges as follows
(i) total fees per day, per
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auditor, plus out-of-pocket expenses for each financial audit of Borrowers, and
(ii) total fees per day, per appraiser, plus out-of-pocket expenses, for each
appraisal of the Collateral.
2.12 LETTERS OF CREDIT
(a) Subject to the terms and conditions of this Agreement, and
during the first 3 years of the term of this Agreement, the Issuing Lender
agrees to issue letters of credit for the account of Borrowers (each, a "Letter
of Credit"). To request the issuance of a Letter of Credit (or the amendment,
renewal, or extension of an outstanding Letter of Credit), Administrative
Borrower shall hand deliver or telecopy (or transmit by electronic
communication, if arrangements for doing so have been approved by the Issuing
Lender) to the Issuing Lender and Agent (reasonably in advance of the requested
date of issuance, amendment, renewal, or extension) a notice requesting the
issuance of a Letter of Credit, or identifying the Letter of Credit to be
amended, renewed, or extended, the date of issuance, amendment, renewal, or
extension, the date on which such Letter of Credit is to expire, the amount of
such Letter of Credit, the name and address of the beneficiary thereof, and such
other information as shall be necessary to prepare, amend, renew, or extend such
Letter of Credit. The Issuing Lender shall have no obligation to issue a Letter
of Credit if any of the following would result after giving effect to the
requested Letter of Credit:
(i) the Letter of Credit Usage would exceed the Borrowing Base
less the amount of outstanding Advances and less the amount of outstanding
Foreign Exchange Reserve, or
(ii) the Letter of Credit Usage would exceed $6,500,000, or
(iii) the Letter of Credit Usage would exceed the Maximum
Revolver Amount less the then extant amount of outstanding Advances.
Borrowers and the Lender Group acknowledge and agree that certain
Letters of Credit may be issued to support letters of credit that already are
outstanding as of the Closing Date. Each commercial Letter of Credit shall have
an expiry date no later than the earlier of (i) 120 days following the date of
issuance of such Letter of Credit or (ii) the date which is 3 years and 60 days
following the date of this Agreement, each stand-by Letter of Credit shall have
an expiring date no later than 3 years following the date of this Agreement, and
all such Letters of Credit shall be in form and substance acceptable to the
Issuing Lender (in the exercise of its Permitted Discretion), including the
requirement that the amounts payable thereunder must be payable in Dollars. If
Issuing Lender is obligated to advance funds under a Letter of Credit, Borrowers
immediately shall reimburse such L/C Disbursement to Issuing Lender by paying to
Agent an amount equal to such L/C Disbursement not later than 11:00 a.m.,
California time, on the date that such L/C Disbursement is made, if
Administrative Borrower shall have received written or telephonic notice of such
L/C Disbursement prior to 10:00 a.m., California time, on such date, or, if such
notice has not been received by Administrative Borrower prior to such time on
such date, then not later than 11:00 a.m., California time, on the Business Day
following the Business Day that Administrative Borrower receives such notice,
and, in the absence of such reimbursement, the L/C Disbursement immediately and
automatically shall be deemed to be an Advance hereunder and, thereafter, shall
bear interest at the rate then applicable to Advances that
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are Prime Rate Loans under Section 2.6, unless Administrative Borrower shall
have elected that such Advance be a LIBOR Rate Loan and such Advance qualifies
as a LIBOR Rate Loan hereunder, in which event, subject to the procedures for
making LIBOR Rate Loans hereunder, the L/C Disbursement shall bear interest at
the rate then applicable to Advances that are LIBOR Rate Loans under Section
2.14. To the extent an L/C Disbursement is deemed to be an Advance hereunder,
Borrowers' obligation to reimburse such L/C Disbursement shall be discharged and
replaced by the resulting Advance. Promptly following receipt by Agent of any
payment from Borrowers pursuant to this section, Agent shall distribute such
payment to the Issuing Lender or, to the extent that Lenders have made payments
pursuant to Section 2.12(c) to reimburse the Issuing Lender, then to such
Lenders and the Issuing Lender as their interest may appear.
(b) Promptly following receipt of a notice of L/C Disbursement
pursuant to Section 2.12(a), each Lender with a Revolver Commitment agrees to
fund its Pro Rata Share of any Advance deemed made pursuant to the foregoing
subsection on the same terms and conditions as if Administrative Borrower had
requested such Advance and Agent shall promptly pay to Issuing Lender the
amounts so received by it from the Lenders. By the issuance of a Letter of
Credit (or an amendment to a Letter of Credit increasing the amount thereof) and
without any further action on the part of the Issuing Lender or the Lenders with
Revolver Commitment, the Issuing Lender shall be deemed to have granted to each
Lender with a Revolver Commitment, and each Lender with a Revolver Commitment
shall be deemed to have purchased, a participation in each Letter of Credit, in
an amount equal to its Pro Rata Share of the Risk Participation Liability of
such Letter of Credit, and each such Lender agrees to pay to Agent, for the
account of the Issuing Lender, such Lender's Pro Rata Share of any payments made
by the Issuing Lender under such Letter of Credit. In consideration and in
furtherance of the foregoing, each Lender with a Revolver Commitment hereby
absolutely and unconditionally agrees to pay to Agent, for the account of the
Issuing Lender, such Lender's Pro Rata Share of each L/C Disbursement made by
the Issuing Lender and not reimbursed by Borrowers on the date due as provided
in clause (a) of this Section, or of any reimbursement payment required to be
refunded to Borrowers for any reason. Each Lender with a Revolver Commitment
acknowledges and agrees that its obligation to deliver to Agent, for the account
of the Issuing Lender, an amount equal to its respective Pro Rata Share pursuant
to this Section 2.12(b) shall be absolute and unconditional and such remittance
shall be made notwithstanding the occurrence or continuation of an Event of
Default or Default or the failure to satisfy any condition set forth in Section
3 hereof. If any such Lender fails to make available to Agent the amount of such
Lender's Pro Rata Share of any payments made by the Issuing Lender in respect of
such Letter of Credit as provided in this Section, Agent (for the account of the
Issuing Lender) shall be entitled to recover such amount on demand from such
Lender together with interest thereon at the Defaulting Lender Rate until paid
in full.
(c) Each Borrower hereby agrees to indemnify, save, defend, and hold
the Lender Group harmless from any loss, cost, expense, or liability, and
reasonable attorneys fees incurred by the Lender Group arising out of or in
connection with any Letter of Credit; provided, however, that no Borrower shall
be obligated hereunder to indemnify for any loss, cost, expense, or liability
that is caused by the gross negligence or willful misconduct of the Issuing
Lender or any other member of the Lender Group. Each Borrower agrees to be bound
by the Issuing Lender's interpretations of any Letter of Credit issued by
Issuing Lender to or for such Borrower's account, even though this
interpretation may be different from such Borrower's own,
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and each Borrower understands and agrees that the Lender Group shall not be
liable for any error, negligence, or mistake, whether of omission or commission,
in following Borrowers' instructions or those contained in the Letter of Credit
or any modifications, amendments, or supplements thereto.
(d) If by reason of (i) any change in any applicable law, treaty,
rule, or regulation or any change in the interpretation or application thereof
by any Governmental Authority, or (ii) compliance by the Issuing Issuer or the
Lender Group with any direction, request, or requirement (irrespective of
whether having the force of law) of any Governmental Authority or monetary
authority including, Regulation D of the Federal Reserve Board as from time to
time in effect (and any successor thereto):
(i) any reserve, deposit, or similar requirement is or shall be
imposed or modified in respect of any Letter of Credit issued hereunder, or
(ii) there shall be imposed on the Issuing Lender or the Lender
Group any other condition regarding any Letter of Credit issued pursuant hereto,
and the result of the foregoing is to increase, directly or indirectly, the cost
to the Lender Group of issuing, making, guaranteeing, or maintaining any Letter
of Credit or to reduce the amount receivable in respect thereof by the Lender
Group, then, and in any such case, Agent may, at any time within a reasonable
period after the additional cost is incurred or the amount received is reduced,
notify Administrative Borrower, and Borrowers shall pay on demand such amounts
as Agent may specify to be necessary to compensate the Lender Group for such
additional cost or reduced receipt, together with interest on such amount from
the date of such demand until payment in full thereof at the rate then
applicable to Prime Rate Loans hereunder. The determination by Agent of any
amount due pursuant to this Section, as set forth in a certificate setting forth
the calculation thereof in reasonable detail, shall, in the absence of manifest
or demonstrable error, be final and conclusive and binding on all of the parties
hereto.
2.13 FOREIGN EXCHANGE CONTRACTS.
(a) Subject to the terms and conditions of this Agreement, and
during the first 3 years of the term of this Agreement, Borrowers may enter into
foreign exchange forward contracts with any Lender under which Borrowers commit
to purchase from or sell to such Lender a set amount of foreign currency more
than one business day after the contract date (the "Foreign Exchange Forward
Contract"). Each Lender agrees to promptly notify Agent of Borrower's request
for such Lender to enter into a Foreign Exchange Forward Contract. Upon receipt
of such notice, Agent shall advise such Lender of the current amount of the
outstanding Foreign Exchange Forward Contracts known to Agent. Borrowers and
Agent will subtract 15% of each outstanding Foreign Exchange Forward Contract
(the "Foreign Exchange Reserve") from the Availability. The total amount of
outstanding Foreign Exchange Forward Contracts at any one time may not exceed,
and the Lenders each agree that they shall not enter into a Foreign Exchange
Forward Contract, if any of the following would result after giving effect to
the requested Foreign Exchange Forward Contract:
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(i) the total outstanding Foreign Exchange Reserve would exceed
the Borrowing Base less the amount of outstanding Advances, less the amount of
the outstanding Letter of Credit Usage, or
(ii) the Foreign Exchange Usage would exceed $5,000,000; or
(iii) the total outstanding Foreign Exchange Reserve would
exceed the Maximum Revolver Amount less the amount of the then of outstanding
Advances, and less the amount of the then outstanding Letter of Credit Usage.
(b) The date for completion of a Foreign Exchange Forward Contract
shall be no later than 30 days prior to the Maturity Date. Each Lender with a
Revolver Commitment agrees to make an Advance of a Pro Rata Share of the payment
Obligations owing by Borrowers under each Foreign Exchange Forward Contract
entered into between Borrowers and a Lender.
2.14 LIBOR OPTION.
(a) INTEREST AND INTEREST PAYMENT DATES. In lieu of having interest
charged at the rate based upon the Prime Rate, Borrowers shall have the option
(the "LIBOR Option") to have interest on all or a portion of the Advances or the
Term Loan be charged at the LIBOR Rate. Interest on LIBOR Rate Loans shall be
payable on the earliest of (i) the last day of the Interest Period applicable
thereto, (ii) the occurrence of an Event of Default in consequence of which the
Required Lenders or Agent on behalf thereof elect to accelerate the maturity of
the Obligations, or (iii) termination of this Agreement pursuant to the terms
hereof. On the last day of each applicable Interest Period, unless
Administrative Borrower properly has exercised a new LIBOR Option or conversion
to a Prime Rate Loan with respect thereto, the interest rate applicable to such
LIBOR Rate Loan automatically shall continue as another LIBOR Rate Loan for the
same Interest Period as the LIBOR Rate Loan that just matured. At any time that
an Event of Default has occurred and is continuing, Borrowers no longer shall
have the option to request that Advances or the Term Loan (or portions thereto)
bear interest at the LIBOR Rate and Agent shall have the right to convert the
interest rate on all outstanding LIBOR Rate Loans to the rate then applicable to
Prime Rate Loans hereunder.
(b) LIBOR Election.
(i) Administrative Borrower may, at any time and from time to
time, so long as no Event of Default has occurred and is continuing, elect to
exercise the LIBOR Option by notifying Agent prior to 11:00 a.m. (California
time) at least 3 Business Days prior to the commencement of the proposed
Interest Period (the "LIBOR Deadline"). Notice of Administrative Borrower's
election of the LIBOR Option for a permitted portion of the Advances or the Term
Loan and an Interest Period pursuant to this Section shall be made by delivery
to Agent of a LIBOR Notice received by Agent before the LIBOR Deadline, or by
telephonic notice received by Agent before the LIBOR Deadline (to be confirmed
by delivery to Agent of a LIBOR Notice received by Agent prior to 5:00 p.m.
(California time) on the same day. Promptly upon its receipt of each such LIBOR
Notice, Agent shall provide a copy thereof to each of the Lenders having a
Revolver Commitment.
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(ii) Borrowers shall have not more than 10 LIBOR Rate Loans in
effect at any given time.
(c) PREPAYMENTS. Subject to the provisions of Section 2.6(a)
Borrowers may prepay LIBOR Rate Loans at any time; provided, however, that in
the event that LIBOR Rate Loans are prepaid on any date that is not the last day
of the Interest Period applicable thereto, including as a result of any
automatic prepayment through the required application by Agent of proceeds of
Collections in accordance with Section 2.4(b) or for any other reason, including
early termination of the term of this Agreement or acceleration of the
Obligations pursuant to the terms hereof, each Borrower shall indemnify, defend,
and hold Agent and the Lenders and their Participants harmless against any and
all Funding Losses in accordance with Section 2.6(a) above.
(d) SPECIAL PROVISIONS APPLICABLE TO LIBOR RATE. In the event that
any change in market conditions or any law, regulation, treaty, or directive, or
any change therein or in the interpretation of application thereof, shall at any
time after the date hereof, in the reasonable opinion of any Lender, make it
unlawful or impractical for such Lender to fund or maintain LIBOR Advances from
any of its offices or to continue such funding or maintaining LIBOR Advances
from any of its offices, or to determine or charge interest rates at the LIBOR
Rate from any of its offices, such Lender shall give notice of such changed
circumstances to Agent and Administrative Borrower and Agent promptly shall
transmit the notice to each other Lender and (y) in the case of any LIBOR Rate
Loans of such Lender that are outstanding, the date specified in such Lender's
notice shall be deemed to be the last day of the Interest Period of such LIBOR
Rate Loans, and interest upon the LIBOR Rate Loans of such Lender thereafter
shall accrue interest at the rate then applicable to Prime Rate Loans, and (z)
Borrowers shall not be entitled to elect the LIBOR Option until such Lender
determines that it would no longer be unlawful or impractical to do so.
(e) NO REQUIREMENT OF MATCHED FUNDING. Anything to the contrary
contained herein notwithstanding, neither Agent, nor any Lender, nor any of
their Participants, is required actually to acquire eurodollar deposits to fund
or otherwise match fund any Obligation as to which interest accrues at the LIBOR
Rate. The provisions of this Section shall apply as if each Lender or its
Participants had match funded any Obligation as to which interest is accruing at
the LIBOR Rate by acquiring eurodollar deposits for each Interest Period in the
amount of the LIBOR Rate Loans.
2.15 CAPITAL REQUIREMENTS. If, after the date hereof, any Lender
determines that (i) the adoption of or change in any law, rule, regulation or
guideline regarding capital requirements for banks or bank holding companies, or
any change in the interpretation or application thereof by any Governmental
Authority charged with the administration thereof, or (ii) compliance by such
Lender or its parent bank holding company with any guideline, request, or
directive of any such entity regarding capital adequacy (whether or not having
the force of law), the effect of reducing the return on such Lender's or such
holding company's capital as a consequence of such Lender's Commitments
hereunder to a level below that which such Lender or such holding company could
have achieved but for such adoption, change, or compliance (taking into
consideration such Lender's or such holding company's then existing policies
with respect to capital adequacy and assuming the full utilization of such
entity's capital) by any amount
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deemed by such Lender to be material, then such Lender may notify Borrower and
Agent thereof. Following receipt of such notice, Borrower agrees to pay such
Lender on demand the amount of such reduction of return of capital as and when
such reduction is determined, payable within 90 days after presentation by such
Lender of a statement in the amount and setting forth in reasonable detail such
Lender's calculation thereof and the assumptions upon which such calculation was
based (which statement shall be deemed true and correct absent manifest error).
In determining such amount, such Lender may use any reasonable averaging and
attribution methods.
2.16 MARKET CONDITIONS. U.S. Bank's commitment to participate in the
Credit Facility under this Agreement is further subject to there being no
continuing material adverse change in financial, banking or capital market
conditions generally since the date of this Agreement that, in the sole judgment
of U.S. Bank, would have a material adverse effect on either the syndication of
the Credit Facility or the subsequent marketability of the Commitments (such
circumstances hereinafter referred to as "Material Adverse Market Conditions").
In the event that the syndication cannot be achieved in a manner satisfactory to
U.S. Bank, then U.S. Bank reserves the right, based on the occurrence of
Material Adverse Market Conditions or an unfavorable market reception and only
if Administrative Borrower consents (which consent shall not be unreasonably
withheld or delayed), to change the pricing, structure or other terms of the
Credit Facility if U.S. Bank determines that such changes are advisable to
ensure a successful syndication or an optimal credit structure, provided that
(w) the total amount of the Credit Facility remains unchanged, (x) the Maturity
Date remains unchanged, (y) the financial covenants contained in Sections 7.20
and (iv) remain unchanged, and (z) Applicable Margin is not increased by more
than 100 basis points. This provision shall survive the closing of the Credit
Facility and shall be effective until completion of a successful syndication.
Furthermore, as used herein a "successful syndication" means that Bank shall be
allocated no more than Twenty Four Million Nine Hundred Thousand Dollars
($24,900,000) of the Credit Facility after the completion of the general
syndication.
2.17 JOINT AND SEVERAL LIABILITY OF BORROWERS.
(a) Each of Borrowers is accepting joint and several liability
hereunder and under the other Loan Documents in consideration of the financial
accommodations to be provided by the Agent and the Lenders under this Agreement,
for the mutual benefit, directly and indirectly, of each of Borrowers and in
consideration of the undertakings of the other Borrowers to accept joint and
several liability for the Obligations.
(b) Each of Borrowers, jointly and severally, hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other Borrowers, with respect to the payment and
performance of all of the Obligations (including, without limitation, any
Obligations arising under this Section 2.17), it being the intention of the
parties hereto that all the Obligations shall be the joint and several
obligations of each Person composing Borrowers without preferences or
distinction among them.
(c) If and to the extent that any of Borrowers shall fail to make
any payment with respect to any of the Obligations as and when due or to perform
any of the Obligations in
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accordance with the terms thereof, then in each such event the other Persons
composing Borrowers will make such payment with respect to, or perform, such
Obligation.
(d) The Obligations of each Person composing Borrowers under the
provisions of this Section 2.17 constitute the absolute and unconditional, full
recourse Obligations of each Person composing Borrowers enforceable against each
such Borrower to the full extent of its properties and assets (including the
Collateral), irrespective of the validity, regularity or enforceability of this
Agreement or any other circumstances whatsoever.
(e) Except as otherwise expressly provided in this Agreement, each
Person composing Borrowers hereby waives notice of acceptance of its joint and
several liability, notice of the Term Loan, any Advances, Letters of Credit
issued under or pursuant to this Agreement, or Foreign Exchange Forward
Contracts entered into pursuant to this Agreement, notice of the occurrence of
any Default, Event of Default, or of any demand for any payment under this
Agreement, notice of any action at any time taken or omitted by Agent or Lenders
under or in respect of any of the Obligations, any requirement of diligence or
to mitigate damages and, generally, to the extent permitted by applicable law,
all demands, notices and other formalities of every kind in connection with this
Agreement (except as otherwise provided in this Agreement). Each Person
composing Borrowers hereby assents to, and waives notice of, any extension or
postponement of the time for the payment of any of the Obligations, the
acceptance of any payment of any of the Obligations, the acceptance of any
partial payment thereon, any waiver, consent or other action or acquiescence by
Agent or Lenders at any time or times in respect of any default by any Person
composing Borrowers in the performance or satisfaction of any term, covenant,
condition or provision of this Agreement, any and all other indulgences
whatsoever by Agent or Lenders in respect of any of the Obligations, and the
taking, addition, substitution or release, in whole or in part, at any time or
times, of any security for any of the Obligations or the addition, substitution
or release, in whole or in part, of any Person composing Borrowers. Without
limiting the generality of the foregoing, each of Borrowers assents to any other
action or delay in acting or failure to act on the part of any Agent or Lender
with respect to the failure by any Person composing Borrowers to comply with any
of its respective Obligations, including, without limitation, any failure
strictly or diligently to assert any right or to pursue any remedy or to comply
fully with applicable laws or regulations thereunder, which might, but for the
provisions of this Section 2.17 afford grounds for terminating, discharging or
relieving any Person composing Borrowers, in whole or in part, from any of its
Obligations under this Section 2.17, it being the intention of each Person
composing Borrowers that, so long as any of the Obligations hereunder remain
unsatisfied, the Obligations of such Person composing Borrowers under this
Section 2.17 shall not be discharged except by performance and then only to the
extent of such performance. The Obligations of each Person composing Borrowers
under this Section 2.17 shall not be diminished or rendered unenforceable by any
winding up, reorganization, arrangement, liquidation, reconstruction or similar
proceeding with respect to any Person composing Borrowers or any Agent or
Lender. The joint and several liability of the Persons composing Borrowers
hereunder shall continue in full force and effect notwithstanding any
absorption, merger, amalgamation or any other change whatsoever in the name,
constitution or place of formation of any of the Persons composing Borrowers or
any Agent or Lender.
(f) Each Person composing Borrowers represents and warrants to Agent
and Lenders that such Borrower is currently informed of the financial condition
of Borrowers and of
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all other circumstances which a diligent inquiry would reveal and which bear
upon the risk of nonpayment of the Obligations. Each Person composing Borrowers
further represents and warrants to Agent and Lenders that such Borrower has read
and understands the terms and conditions of the Loan Documents. Each Person
composing Borrowers hereby covenants that such Borrower will continue to keep
informed of Borrowers' financial condition, the financial condition of other
guarantors, if any, and of all other circumstances which bear upon the risk of
nonpayment or nonperformance of the Obligations.
(g) The provisions of this Section 2.17 are made for the benefit of
the Agent, the Lenders and their respective successors and assigns, and may be
enforced by it or them from time to time against any or all of the Persons
composing Borrowers as often as occasion therefor may arise and without
requirement on the part of any such Agent, Lender, successor or assign first to
marshal any of its or their claims or to exercise any of its or their rights
against any of the other Persons composing Borrowers or to exhaust any remedies
available to it or them against any of the other Persons composing Borrowers or
to resort to any other source or means of obtaining payment of any of the
Obligations hereunder or to elect any other remedy. The provisions of this
Section 2.17 shall remain in effect until all of the Obligations shall have been
paid in full or otherwise fully satisfied. If at any time, any payment, or any
part thereof, made in respect of any of the Obligations, is rescinded or must
otherwise be restored or returned by any Agent or Lender upon the insolvency,
bankruptcy or reorganization of any of the Persons composing Borrowers, or
otherwise, the provisions of this Section 2.17 will forthwith be reinstated in
effect, as though such payment had not been made.
(h) Each of the Persons composing Borrowers hereby agrees that it
will not enforce any of its rights of contribution or subrogation against the
other Persons composing Borrowers with respect to any liability incurred by it
hereunder or under any of the other Loan Documents, any payments made by it to
the Agent or the Lenders with respect to any of the Obligations or any
collateral security therefor until such time as all of the Obligations have been
paid in full in cash. Any claim which any Borrower may have against any other
Borrower with respect to any payments to any Agent or Lender hereunder or under
any other Loan Documents are hereby expressly made subordinate and junior in
right of payment, without limitation as to any increases in the Obligations
arising hereunder or thereunder, to the prior payment in full in cash of the
Obligations and, in the event of any insolvency, bankruptcy, receivership,
liquidation, reorganization or other similar proceeding under the laws of any
jurisdiction relating to any Borrower, its debts or its assets, whether
voluntary or involuntary, all such Obligations shall be paid in full in cash
before any payment or distribution of any character, whether in cash, securities
or other property, shall be made to any other Borrower therefor.
(i) Each of the Persons composing Borrowers hereby agrees that,
after the occurrence and during the continuance of any Default or Event of
Default, the payment of any amounts due with respect to the indebtedness owing
by any Borrower to any other Borrower is hereby subordinated to the prior
payment in full in cash of the Obligations. Each Borrower hereby agrees that
after the occurrence and during the continuance of any Default or Event of
Default, such Borrower will not demand, xxx for or otherwise attempt to collect
any indebtedness of any other Borrower owing to such Borrower until the
Obligations shall have been paid in full in cash. If, notwithstanding the
foregoing sentence, such Borrower shall collect, enforce or receive any amounts
in respect of such indebtedness, such amounts shall be collected, enforced
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and received by such Borrower as trustee for the Agent, and the Agent shall
deliver any such amounts to the Administrative Agent for application to the
Obligations in accordance with Section 2.4(b).
3. CONDITIONS; TERM OF AGREEMENT.
3.1 CONDITIONS PRECEDENT TO THE INITIAL EXTENSION OF CREDIT. The
obligation of the Lender Group (or any member thereof) to make the initial
Advance (or otherwise to extend any credit provided for hereunder), is subject
to the fulfillment, to the satisfaction of Agent, of each of the conditions
precedent set forth below:
(a) the Closing Date shall occur on or before July 31, 2001;
(b) Agent shall have received all financing statements required by
Agent, duly executed by the applicable Borrowers, and Agent shall have received
confirmation of the filing of all such financing statements;
(c) Agent shall have received each of the following documents, in
form and substance satisfactory to Agent, duly executed, and each such document
shall be in full force and effect:
(i) the Intellectual Property Security Agreement,
(ii) the Disbursement Letter,
(iii) the Due Diligence Letter,
(iv) the Fee Letter,
(v) the Officers' Certificate,
(vi) the Stock Pledge Agreement,
(vii) Stock pledge agreements, in form and content satisfactory
to Agent in its Permitted Discretion, executed by the appropriate Borrowers or
Domestic Subsidiaries, pledging 65% of the Stock of the Foreign Subsidiaries as
collateral for the Obligations, together with all certificates representing the
shares of Stock pledged thereunder, as well as Stock powers with respect thereto
endorsed in blank,
(viii) a general continuing guaranty of the Obligations executed
and delivered by 3D Holdings, LLC, a Delaware limited liability company, to
Agent and a security agreement executed and delivered by 3D Holdings, LLC, and
Agent pursuant to which 3D Holdings, LLC, shall grant to Agent, for the benefit
of the Lender group, a security interest in substantially all of its assets, as
well as appropriate documents to perfect the security interests granted by 3D
Holdings, LLC,
(ix) the Intercompany Subordination Agreement, and
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(x) the Pay-Off Letter, together with UCC termination statements
and other documentation evidencing the termination by Existing Lender of its
Liens in and to the properties and assets of Borrowers;
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(d) Agent shall have received a certificate from the Secretary of
each Borrower attesting to the resolutions of such Borrower's Board of Directors
authorizing its execution, delivery, and performance of this Agreement, the
other Loan Documents to which such Borrower is a party and the interest rate
swap agreement required in Section 3.1(k) and authorizing specific officers of
such Borrower to execute the same;
(e) Agent shall have received copies of each Borrower's Governing
Documents, as amended, modified, or supplemented to the Closing Date, certified
by the Secretary of such Borrower;
(f) Agent shall have received a certificate of status with respect
to each Borrower, dated within 10 days of the Closing Date, such certificate to
be issued by the appropriate officer of the jurisdiction of organization of such
Borrower, which certificate shall indicate that such Borrower is in good
standing in such jurisdiction;
(g) Agent shall have received certificates of status with respect to
each Borrower, each dated within 30 days of the Closing Date, such certificates
to be issued by the appropriate officer of the jurisdictions (other than the
jurisdiction of organization of such Borrower) in which its failure to be duly
qualified or licensed would constitute a Material Adverse Change, which
certificates shall indicate that such Borrower is in good standing in such
jurisdictions;
(h) Agent shall have received a certificate of insurance, together
with the endorsements thereto, as are required by Section 6.8, the form and
substance of which shall be satisfactory to Agent;
(i) Agent shall have received Collateral Access Agreements with
respect to Borrowers' location in Grand Junction, Colorado;
(j) Agent shall have received an opinion of Borrower's counsel in
form and substance satisfactory to Agent;
(k) Agent shall have received satisfactory evidence that Borrowers
have entered into an interest rate swap agreement for an amount equal to
$7,500,000 for a term of not less than 3 years with a financial institution
acceptable to the Agent, in its Permitted Discretion;
(l) Agent shall have received satisfactory evidence that Borrowers
have obtained foreign credit insurance issued by insurance companies, and
containing terms and conditions, acceptable to Agent, in its Permitted
Discretion;
(m) Agent's legal counsel shall have received the searches listed on
Schedule 3.1(m);
(n) Borrowers shall pay all Lender Group Expenses incurred in
connection with the transactions evidenced by this Agreement;
(o) Agent shall have received a certificate of the chief executive
officer or chief financial officer of Parent and Tiger Deals, Inc., dated the
Closing Date, certifying that
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(i) the Tender Offer shall have expired and there shall have been validly
tendered thereunder and not withdrawn not less than 67% of the common Stock of
DTM Corporation and that Tiger, subject to receipt of the financing contemplated
herein, will purchase such shares of common stock in accordance with applicable
law and the terms of the Merger Agreement and the other documentation related to
the Acquisition previously approved by Agent, without modification or waiver of
any material term (except to the extent such waiver or modification would not
materially impair the prospects of repayment of the Obligations by Borrowers or
not materially impair the total amount of Collateral which is to secure the
Obligations), and (ii) all conditions to the consummation of the Tender Offer as
set forth in the Merger Agreement have been (or upon the making of the initial
Advance and Term Loan hereunder will concurrently be) fulfilled or waived by the
parties thereto, which waiver, in the case of any waiver by Parent or Tiger
Deals, Inc., shall be given with the reasonable consent of Agent in the event
that the waiver would materially impair the prospects of repayment of the
Obligations by Borrowers or materially impair the total amount of Collateral
which is to secure the Obligations, and which conditions, in the case of
conditions to be fulfilled to the satisfaction of the Parent and with respect to
which the failure to fulfill the condition would materially impair the prospects
of repayment of the Obligations by Borrowers or materially impair the total
amount of Collateral which is to secure the Obligations, shall be fulfilled to
the satisfaction of Agent, in its Permitted Discretion;
(p) Agent shall have received a certificate of the chief executive
officer or chief financial officer of Parent, dated the Closing Date, certifying
that (i) the cash portion of the purchase price paid by Tiger in the Tender
Offer will not exceed $5.80 per share and (ii) the fees and expenses relating to
the Tender Offer and Merger will be substantially consistent with the amount set
forth in the table of sources and uses heretofore furnished to the Agent;
(q) The chief executive officer or chief financial officer of Parent
shall deliver to Agent (i) a true and complete copy of the Merger Agreement
(which shall include copies of all amendments, schedules, exhibits and other
attachments thereto), together with true and complete copies of each material
document, certificate and opinion referred to in or delivered in connection
therewith, and (ii) a certificate of the chief executive officer or chief
financial officer of Parent, dated the Closing Date certifying that (x) the
Merger Agreement and all related documentation have been duly executed and
delivered by each of the parties thereto and are in full force and effect on the
Closing Date, and (y) the provisions of the Merger Agreement and such related
documentation have not been amended, waived or otherwise modified, or executed
and delivered in forms other than the forms delivered to the Agent prior to the
date hereof, other than amendments, waivers, modifications of alternative forms
that do not materially impair the prospects of repayment of the Obligations or
materially impair the total amount of Collateral which is to secure the
Obligations;
(r) Borrowers shall have received all licenses, approvals or
evidence of other actions required by any Governmental Authority in connection
with the execution and delivery by Borrowers of this Agreement or any other Loan
Document or with the consummation of the transactions contemplated hereby and
thereby; and
(s) all other documents and legal matters in connection with the
transactions contemplated by this Agreement shall have been delivered, executed,
or recorded and shall be in form and substance reasonably satisfactory to Agent
in its Permitted Discretion.
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3.2 CONDITIONS SUBSEQUENT TO THE INITIAL EXTENSION OF CREDIT. The
obligation of the Lender Group (or any member thereof) to continue to make
Advances, to issue Letters of Credit or to enter into Foreign Exchange Forward
Contracts (or otherwise extend credit hereunder) is subject to the fulfillment,
on or before the date applicable thereto, of each of the conditions subsequent
set forth below (the failure by Borrowers to so perform or cause to be performed
constituting an Event of Default):
(a) Within 10 Business Days following the completion of the Tender
Offer, Tiger Deals, Inc., shall deliver to Agent all of the certificates
representing all of its shares of Stock of DTM Corporation, as well as Stock
Powers with respect thereto endorsed in blank;
(b) within 15 days following the Closing Date, deliver to Agent the
duly executed Control Agreements, and each such Control Agreement shall be in
full force and effect;
(c) within 15 days following the Closing Date, deliver to Agent the
duly executed Cash Management Agreements, and each such Cash Management
Agreement shall be in full force and effect;
(d) within 30 days following the Closing Date, deliver to Agent
certified copies of the policies of insurance, together with the endorsements
thereto, as are required by Section 6.8, the form and substance of which shall
be satisfactory to Agent and its counsel;
(e) within 60 days following the Closing Date, the Merger shall be
consummated and there shall be no amendment or waiver of any material term or
condition of the Merger Agreement or any other documentation related to the
Acquisition which amendment or waiver would materially impair the prospects of
repayment of the Obligations by Borrowers or materially impair the total amount
of Collateral which is to secure the Obligations; and
(f) within 30 days following the Closing Date, deliver to Agent such
Collateral Access Agreements from lessors, warehousemen, bailees, and other
third persons as Agent may require in its Permitted Discretion.
3.3 CONDITIONS PRECEDENT TO ALL EXTENSIONS OF CREDIT. The obligation of
the Lender Group (or any member thereof) to make all Advances (or to extend any
other credit hereunder) shall be subject to the following conditions precedent:
(a) the representations and warranties contained in this Agreement
and the other Loan Documents shall be true and correct in all material respects
on and as of the date of such extension of credit, as though made on and as of
such date (except to the extent that such representations and warranties relate
solely to an earlier date or except as disclosed in the Parent Disclosure
Letter);
(b) no Default or Event of Default shall have occurred and be
continuing on the date of such extension of credit, nor shall either result from
the making thereof;
(c) no injunction, writ, restraining order, or other order of any
nature prohibiting, directly or indirectly, the extending of such credit shall
have been issued and remain
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in force by any Governmental Authority against any Borrower, Agent, any Lender,
or any of their Affiliates; and
(d) no Material Adverse Change shall have occurred.
3.4 TERM. This Agreement shall become effective upon the execution and
delivery hereof by Borrowers, Agent, and the Lenders and shall continue in full
force and effect for a term ending on the date which is 5 years and 6 months
following the Closing Date (the "Maturity Date"). The foregoing notwithstanding,
the Lender Group, upon the election of the Required Lenders, shall have the
right to terminate its obligations under this Agreement immediately and without
notice upon the occurrence and during the continuation of an Event of Default.
3.5 EFFECT OF TERMINATION. On the date of termination of this Agreement,
all Obligations (including contingent reimbursement obligations of Borrowers
with respect to any outstanding Letters of Credit and payment Obligations under
outstanding Foreign Exchange Forward Contracts) immediately shall become due and
payable without notice or demand. No termination of this Agreement, however,
shall relieve or discharge Borrowers of their Obligations hereunder and the
Agent's Liens in the Collateral shall remain in effect until all Obligations
have been fully and finally discharged and the Lender Group's obligations to
provide additional credit hereunder have been terminated. When this Agreement
has been terminated and all of the Obligations have been fully and finally
discharged and the Lender Group's obligations to provide additional credit under
the Loan Documents have been terminated irrevocably, Agent will, at Borrowers'
sole expense, execute and deliver any UCC termination statements, lien releases,
mortgage releases, re-assignments of trademarks, discharges of security
interests, and other similar discharge or release documents (and, if applicable,
in recordable form) as Administrative Borrower reasonably determines to be
necessary to release, as of record, the Agent's Liens and all notices of
security interests and liens previously filed by Agent with respect to the
Obligations.
3.6 EARLY TERMINATION BY BORROWERS. Borrowers have the option, at any
time upon 90 days prior written notice by Administrative Borrower to Agent, to
terminate this Agreement by paying to Agent, for the benefit of the Lender
Group, in cash, the Obligations, including (a) either (i) providing cash
collateral to be held by Agent for the benefit of those Lenders with a Revolver
Commitment in an amount equal to 105% of the then Letter of Credit Usage, or
(ii) causing the original Letters of Credit to be returned to the Issuing
Lender, (b) amounts payable by Borrowers for the prepayment of any LIBOR Rate
Loans, and (c) the amounts payable by Borrowers under outstanding Foreign
Exchange Forward Contracts. If Administrative Borrower has sent a notice of
termination pursuant to the provisions of this Section, then the Commitments
shall terminate on the effective date of termination as set forth in such notice
and Borrowers shall be obligated to repay the Obligations (including the amounts
set forth above), in full, on the date set forth as the date of termination of
this Agreement in such notice.
4. CREATION OF SECURITY INTEREST.
4.1 GRANT OF SECURITY INTEREST. Each Borrower hereby grants to Agent,
for the benefit of the Lender Group, a continuing security interest in all of
its right, title, and interest in all currently existing and hereafter acquired
or arising Collateral in order to secure prompt
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repayment of any and all of the Obligations in accordance with the terms and
conditions of the Loan Documents and in order to secure prompt performance by
Borrowers of each of their covenants and duties under the Loan Documents. The
Agent's Liens in and to the Collateral shall attach to all Collateral without
further act on the part of Agent or Borrowers. Anything contained in this
Agreement or any other Loan Document to the contrary notwithstanding, except for
Permitted Dispositions, Borrowers have no authority, express or implied, to
dispose of any item or portion of the Collateral.
4.2 NEGOTIABLE COLLATERAL. In the event that any Collateral, including
proceeds, is evidenced by or consists of Negotiable Collateral, and if and to
the extent that perfection or priority of Agent's security interest is dependent
on or enhanced by possession, the applicable Borrower, immediately upon the
request of Agent (such request being made in the Permitted Discretion of Agent),
shall endorse and deliver physical possession of such Negotiable Collateral to
Agent.
4.3 COLLECTION OF ACCOUNTS, GENERAL INTANGIBLES, AND NEGOTIABLE
COLLATERAL. At any time after the occurrence and during the continuation of an
Event of Default, Agent or Agent's designee may (a) notify Account Debtors of
Borrowers that the Accounts, Negotiable Collateral, or General Intangibles (or
any combination thereof) have been assigned to Agent or that Agent has a
security interest therein, or (b) collect the Accounts, Negotiable Collateral,
or General Intangibles (or any combination thereof) directly and charge the
collection costs and expenses to the Loan Account. Each Borrower agrees that it
will hold in trust for the Lender Group, as the Lender Group's trustee, any
Collections that it receives on the Collateral or any proceeds thereof, and (i)
immediately will deliver Collections on Accounts to Agent or a Cash Management
Bank in their original form as received by the applicable Borrower and (ii) upon
the occurrence of an Event of Default and so long as it is continuing,
immediately will deliver all other Collections to Agent or a Cash Management
Bank in their original form as received by the applicable Borrower.
4.4 DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED. At any time upon the
reasonable request of Agent, Borrowers shall execute and deliver to Agent, any
and all financing statements, original financing statements in lieu of
continuation statements, fixture filings, security agreements, pledges,
assignments, endorsements of certificates of title, and all other documents (the
"Additional Documents") that Agent may request in its Permitted Discretion, in
form and substance satisfactory to Agent, to perfect and continue perfected or
better perfect the Agent's Liens in the Collateral (whether now owned or
hereafter arising or acquired), and in order to fully consummate all of the
transactions contemplated hereby and under the other Loan Documents. To the
maximum extent permitted by applicable law, each Borrower authorizes Agent to
execute any such Additional Documents in the applicable Borrower's name and
authorizes Agent to file such executed Additional Documents in any appropriate
filing office. In addition, on such periodic basis as Agent shall require,
Borrowers shall (a) provide Agent with a report of all new patentable,
copyrightable, or trademarkable materials acquired or generated by Borrowers
during the prior period, (b) cause all patents, copyrights, and trademarks
acquired or generated by Borrowers that are not already the subject of a
registration with the appropriate filing office (or an application therefor
diligently prosecuted) to be registered with such appropriate filing office in a
manner sufficient to impart constructive notice of Borrowers' ownership thereof,
and (c) cause to be prepared, executed, and delivered to Agent supplemental
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schedules to the applicable Loan Documents to identify such patents, copyrights,
and trademarks as being subject to the security interests created thereunder.
4.5 POWER OF ATTORNEY. Each Borrower hereby irrevocably makes,
constitutes, and appoints Agent (and any of Agent's officers, employees, or
agents designated by Agent) as such Borrower's true and lawful attorney, with
power to (a) if such Borrower refuses to, or fails timely to execute and deliver
any of the documents described in Section 4.4, sign the name of such Borrower on
any of the documents described in Section 4.4, (b) at any time that an Event of
Default has occurred and is continuing, sign such Borrower's name on any invoice
or xxxx of lading relating to the Collateral, drafts against Account Debtors, or
notices to Account Debtors, (c) send requests for verification of Accounts, (d)
endorse such Borrower's name on any Collection item that may come into the
Lender Group's possession, (e) at any time that an Event of Default has occurred
and is continuing, make, settle, and adjust all claims under such Borrower's
policies of insurance and make all determinations and decisions with respect to
such policies of insurance, and (f) at any time that an Event of Default has
occurred and is continuing, settle and adjust disputes and claims respecting the
Accounts, Negotiable Collateral, or General Intangibles directly with Account
Debtors, for amounts and upon terms that Agent determines to be reasonable, and
Agent may cause to be executed and delivered any documents and releases that
Agent determines to be necessary. The appointment of Agent as each Borrower's
attorney, and each and every one of its rights and powers, being coupled with an
interest, is irrevocable until all of the Obligations have been fully and
finally repaid and performed and the Lender Group's obligations to extend credit
hereunder are terminated.
4.6 RIGHT TO INSPECT. Agent, and each Lender (through any of their
respective officers, employees, or agents) that decides to then join Agent,
shall have the right, two times during each calendar year during the term of
this Agreement upon reasonable notice to Borrowers and during regular business
hours to inspect the Books and to check, test, and appraise the Collateral in
order to verify Borrowers' financial condition or the amount, quality, value,
condition of, or any other matter relating to, the Collateral; provided,
however, that upon the occurrence of an Event of Default and so long as it is
continuing Agent and each Lender may conduct additional inspections without
first providing notice to Borrowers and such inspections shall not count towards
the foregoing twice a year limitation.
4.7 CONTROL AGREEMENTS. Each Borrower agrees that it will not transfer
assets out of any Securities Accounts other than as permitted under Section 7.19
and, if to another securities intermediary, unless each of the applicable
Borrower, Agent, and the substitute securities intermediary have entered into a
Control Agreement. No arrangement contemplated hereby or by any Control
Agreement in respect of any Securities Accounts or other Investment Property
shall be modified by Borrowers without the prior written consent of Agent. Upon
the occurrence and during the continuance of a Default or Event of Default,
Agent may notify any securities intermediary to liquidate the applicable
Securities Account or any related Investment Property maintained or held thereby
and remit the proceeds thereof to the Agent's Account.
4.8 RELEASE OF ADDITIONAL COLLATERAL. Notwithstanding anything to the
contrary in this Agreement, Borrowers shall have the right but not the
obligation to effect the release of the Additional Collateral prior to December
31, 2001 by:
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(a) Effecting a Direct Xxxx Restructuring prior to such date; or
(b) Remedying to the satisfaction of Agent, in its Permitted
Discretion, any non-compliance with the Borrowing Base and any Overadvances.
4.9 LIMITATION OF COLLATERAL RELATING TO FOREIGN SUBSIDIARIES.
Notwithstanding anything to the contrary contained in this Agreement (i) neither
the Borrowers, nor any Subsidiary of any Borrower, shall be obligated to pledge
more than 65% of each class of the issued and outstanding Stock of any Foreign
Subsidiary that is a direct, Subsidiary of any Borrower or any Domestic
Subsidiary or to pledge any Stock of any Subsidiary of any such Foreign
Subsidiaries, (ii) no Foreign Subsidiary shall be obligated to execute a
Guaranty guaranteeing payment or performance of the Obligations, and (iii) no
Foreign Subsidiary shall be obligated to execute a security agreement securing
payment or performance of the Obligations.
5. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lender Group to enter into this Agreement,
each Borrower makes the following representations and warranties to the Lender
Group which shall be true, correct, and complete, in all material respects, as
of the date hereof, except as set forth in the disclosure letter delivered at or
prior to the execution of this Agreement (the "Parent Disclosure Letter"), and
shall be true, correct, and complete, in all material respects, as of the
Closing Date, except as set forth in the Parent Disclosure Letter, and at and as
of the date of the making of each Advance (or other extension of credit) made
thereafter, except as set forth in the Parent Disclosure Letter, as though made
on and as of the date of such Advance (or other extension of credit) (except to
the extent that such representations and warranties relate solely to an earlier
date) and such representations and warranties shall survive the execution and
delivery of this Agreement:
5.1 NO ENCUMBRANCES. Borrower has good and indefeasible title to its
Collateral, free and clear of Liens except for Permitted Liens.
5.2 ELIGIBLE ACCOUNTS. The Eligible Accounts are bona fide existing
payment obligations of Account Debtors created by the sale and delivery of
Inventory or the rendition of services to such Account Debtors in the ordinary
course of Borrowers' business, owed to Borrowers without defenses, disputes,
offsets, counterclaims, or rights of return or cancellation. As to each Eligible
Account, such Account is not:
(a) owed by an employee, Affiliate, or agent of a Borrower,
(b) on account of a transaction wherein goods were placed on
consignment or were sold pursuant to a guaranteed sale, a sale or return, a sale
on approval, a xxxx and hold, or on any other terms by reason of which the
payment by the Account Debtor may be conditional,
(c) a Domestic Account payable in a currency other than Dollars,
(d) owed by an Account Debtor that has or has asserted a right of
setoff, has disputed its liability, or has made any claim with respect to its
obligation to pay the Account,
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(e) owed by an Account Debtor that is subject to any Insolvency
Proceeding or is not Solvent or as to which a Borrower has received notice of an
imminent Insolvency Proceeding or a material impairment of the financial
condition of such Account Debtor,
(f) on account of a transaction as to which the goods giving rise to
such Account have not been shipped and billed to the Account Debtor or the
services giving rise to such Account have not been performed and accepted by the
Account Debtor,
(g) a right to receive progress payments or other advance xxxxxxxx
that are due prior to the completion of performance by the applicable Borrower
of the subject contract for goods or services, and
(h) an Account that has not been billed to the customer.
5.3 ELIGIBLE INVENTORY. All Eligible Inventory is of good and
merchantable quality, free from defects. As to each item of Eligible Inventory,
such Inventory is
(a) owned by a Borrower free and clear of all Liens other than Liens
in favor of Agent,
(b) either located at one of the locations set forth on Schedule E-1
or in transit from one such location to another such location,
(c) not located on real property leased by a Borrower or in a
contract warehouse, in each case, unless subject to a Collateral Access
Agreement executed by the lessor, the warehouseman, or other third party, as the
case may be, and unless segregated or otherwise separately identifiable from
goods of others, if any, stored on the premises,
(d) not goods that have been returned or rejected by Borrowers'
customers, and
(e) not goods that are obsolete or slow moving, restrictive or
custom items, work-in-process, or that constitute spare parts, packaging and
shipping materials, supplies used or consumed in Borrowers' business, xxxx and
hold goods, defective goods, "seconds," or Inventory acquired on consignment.
5.4 EQUIPMENT. All of the Equipment is used or held for use in
Borrowers' business and is fit for such purposes.
5.5 LOCATION OF INVENTORY AND EQUIPMENT. Except as disclosed to Agent in
writing, the Inventory and Equipment are not stored with a bailee, warehouseman,
or similar party and are located only at the locations identified on Schedule
5.5 to the Parent Disclosure Letter.
5.6 INVENTORY RECORDS. Each Borrower keeps correct and accurate records
itemizing and describing the type, quality, and quantity of its Inventory and
the book value thereof.
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5.7 LOCATION OF CHIEF EXECUTIVE OFFICE; FEIN. The chief executive office
of each Borrower is located at the address indicated in Schedule 5.7 to the
Parent Disclosure Letter and each Borrower's FEIN is identified in Schedule 5.7
to the Parent Disclosure Letter.
5.8 DUE ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.
(a) Each Borrower is duly organized and existing and in good
standing under the laws of the jurisdiction of its organization and qualified to
do business in any state where the failure to be so qualified reasonably could
be expected to have a Material Adverse Change.
(b) Set forth on Schedule 5.8(b) to the Parent Disclosure Letter is
a complete and accurate description of the authorized capital Stock of each
Borrower, by class, and, as of the Closing Date, a description of the number of
shares of each such class that are issued and outstanding. Other than as
described on Schedule 5.8(b) to the Parent Disclosure Letter, there are no
subscriptions, options, warrants, or calls relating to any shares of each
Borrower's capital Stock, including any right of conversion or exchange under
any outstanding security or other instrument. No Borrower is subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its capital Stock or any security convertible into or
exchangeable for any of its capital Stock.
(c) Set forth on Schedule 5.8(c) to the Parent Disclosure Letter, is
a complete and accurate list of each Borrower's direct and indirect
Subsidiaries, showing: (i) the jurisdiction of their organization, (ii) the
number of shares of each class of common and preferred Stock authorized for each
of such Subsidiaries, and (iii) the number and the percentage of the outstanding
shares of each such class owned directly or indirectly by the applicable
Borrower. All of the outstanding capital Stock of each such Subsidiary has been
validly issued and is fully paid and non-assessable.
(d) Except as set forth on Schedule 5.8(c) to the Parent Disclosure
Letter, there are no subscriptions, options, warrants, or calls relating to any
shares of any Borrower's Subsidiaries' capital Stock, including any right of
conversion or exchange under any outstanding security or other instrument. No
Borrower or any of its respective Subsidiaries is subject to any obligation
(contingent or otherwise) to repurchase or otherwise acquire or retire any
shares of any Borrower's Subsidiaries' capital Stock or any security convertible
into or exchangeable for any such capital Stock.
5.9 DUE AUTHORIZATION; NO CONFLICT.
(a) As to each Borrower, the execution, delivery, and performance by
such Borrower of this Agreement and the Loan Documents to which it is a party
have been duly authorized by all necessary action on the part of such Borrower.
(b) As to each Borrower, the execution, delivery, and performance by
such Borrower of this Agreement and the Loan Documents to which it is a party do
not and will not (i) violate any provision of federal, state, or local law or
regulation applicable to any Borrower, the Governing Documents of any Borrower,
or any order, judgment, or decree of any court or other Governmental Authority
binding on any Borrower, (ii) conflict with, result in a breach of, or
constitute (with due notice or lapse of time or both) a default under any
material contractual
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obligation of any Borrower, (iii) result in or require the creation or
imposition of any Lien of any nature whatsoever upon any properties or assets of
Borrower, other than Permitted Liens, or (iv) require any approval of any
Borrower's interestholders or any approval or consent of any Person under any
material contractual obligation of any Borrower.
(c) Other than the filing of financing statements, fixture filings,
and Mortgages, the execution, delivery, and performance by each Borrower of this
Agreement and the Loan Documents to which such Borrower is a party do not and
will not require any registration with, consent, or approval of, or notice to,
or other action with or by, any Governmental Authority or other Person.
(d) As to each Borrower, this Agreement and the other Loan Documents
to which such Borrower is a party, and all other documents contemplated hereby
and thereby, when executed and delivered by such Borrower will be the legally
valid and binding obligations of such Borrower, enforceable against such
Borrower in accordance with their respective terms, except as enforcement may be
limited by equitable principles or by bankruptcy, insolvency, reorganization,
moratorium, or similar laws relating to or limiting creditors' rights generally.
(e) The Agent's Liens are validly created, perfected, and first
priority Liens, subject only to Permitted Liens.
5.10 LITIGATION. Other than those matters disclosed on Schedule 5.10 to
the Parent Disclosure Letter, there are no actions, suits, or proceedings
pending or, to the best knowledge of Borrowers, threatened against Borrowers, or
any of their Subsidiaries, as applicable, except for (a) matters involving a
claim against a Borrower for an amount less than $250,000, (b) matters that are
fully covered by insurance (subject to customary deductibles), and (c) matters
arising after the Closing Date that, if decided adversely to Borrowers, or any
of their Subsidiaries, as applicable, reasonably could not be expected to result
in a Material Adverse Change.
5.11 NO MATERIAL ADVERSE CHANGE. All financial statements relating to
Borrower that have been delivered by Borrowers to the Lender Group have been
prepared in accordance with GAAP (except, in the case of unaudited financial
statements, for the lack of footnotes and being subject to year-end audit
adjustments) and present fairly in all material respects, Borrowers' financial
condition as of the date thereof and results of operations for the period then
ended. There has not been a Material Adverse Change with respect to Borrowers
since the date of the latest financial statements submitted to the Lender Group
on or before the Closing Date.
5.12 FRAUDULENT TRANSFER.
(a) Each Borrower is Solvent.
(b) No transfer of property is being made by any Borrower and no
obligation is being incurred by any Borrower in connection with the transactions
contemplated by this Agreement or the other Loan Documents with the intent to
hinder, delay, or defraud either present or future creditors of Borrowers.
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5.13 EMPLOYEE BENEFITS. Except as set forth on Schedule 5.13 to the
Parent Disclosure Letter, None of Borrowers, any of their Subsidiaries, or any
of their ERISA Affiliates maintains or contributes to any Benefit Plan.
5.14 ENVIRONMENTAL CONDITION. Except as set forth on Schedule 5.14 to
the Parent Disclosure Letter, (a) to Borrowers' knowledge, none of Borrowers'
properties or assets has ever been used by Borrowers or by previous owners or
operators in the disposal of, or to produce, store, handle, treat, release, or
transport, any Hazardous Materials, where such production, storage, handling,
treatment, release or transport was in violation, in any material respect, of
applicable Environmental Law, (b) to Borrowers' knowledge, none of Borrowers'
properties or assets has ever been designated or identified in any manner
pursuant to any environmental protection statute as a Hazardous Materials
disposal site, (c) none of Borrowers have received notice that a Lien arising
under any Environmental Law has attached to any revenues or to any real property
owned or operated by Borrowers, and (d) none of Borrowers have received a
summons, citation, notice, or directive from the Environmental Protection Agency
or any other federal or state governmental agency concerning any action or
omission by any Borrower resulting in the releasing or disposing of Hazardous
Materials into the environment.
5.15 BROKERAGE FEES. Other than X.X. Xxxxxxx & Sons, Inc., Borrowers
have not utilized the services of any broker or finder in connection with
Borrowers' obtaining financing from the Lender Group under this Agreement and
other than the fee of [$311,250] payable by Borrowers, no brokerage commission
or finders fee is payable by Borrowers in connection herewith.
5.16 INTELLECTUAL PROPERTY. Each Borrower owns, or holds licenses in,
all trademarks, trade names, copyrights, patents, patent rights, and licenses
that are necessary to the conduct of its business as currently conducted.
Attached as Schedule 5.16 to the Parent Disclosure Letter is a true, correct,
and complete listing of all material patents, patent applications, trademarks,
trademark applications, copyrights, and copyright registrations as to which each
Borrower is the owner or is an exclusive licensee.
5.17 LEASES. Borrowers enjoy peaceful and undisturbed possession under
all leases material to the business of Borrowers and to which Borrowers are a
party or under which Borrowers are operating. All of such leases are valid and
subsisting and no material default by Borrowers exists under any of them.
5.18 DDAs. Set forth on Schedule 5.18 to the Parent Disclosure Letter
are all of the DDAs of each Borrower, including, with respect to each depository
(i) the name and address of that depository, and (ii) the account numbers of the
accounts maintained with such depository.
5.19 COMPLETE DISCLOSURE. All factual information (taken as a whole)
furnished by or on behalf of Borrowers in writing to Agent or any Lender
(including all information contained in the Schedules hereto or in the other
Loan Documents) for purposes of or in connection with this Agreement, the other
Loan Documents, or any transaction contemplated herein or therein is, and all
other such factual information (taken as a whole) hereafter furnished by or on
behalf of Borrowers in writing to the Agent or any Lender will be, true and
accurate, in all material respects, on the date as of which such information is
dated or certified and not incomplete by
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omitting to state any fact necessary to make such information (taken as a whole)
not misleading in any material respect at such time in light of the
circumstances under which such information was provided.
5.20 INDEBTEDNESS. Set forth on Schedule 5.20 to the Parent Disclosure
Letter is a true and complete list of all Indebtedness of each Borrower
outstanding immediately prior to the Closing Date that is to remain outstanding
after the Closing Date and such Schedule accurately reflects the aggregate
principal amount of such Indebtedness and the principal terms thereof.
5.21 ACQUISITION. On and as of Closing Date, all material consents and
approvals of, and filings and registrations with, and all other action in
respect of, all Governmental Authorities required in order to consummate the
Tender Offer will have been obtained, given, filed or taken and are or will be
in full force and effect (or effective judicial relief with respect thereto will
have been obtained). All actions pursuant to or in furtherance of the Tender
Offer have been and will be taken in compliance with all applicable laws. On and
as of the Merger closing date, all material consents and approvals of, and
filings and registrations with, and all other action in respect of, all
Governmental Authorities required in order to make or consummate the Merger, or
otherwise required in connection with the Merger, will have been obtained,
given, filed or taken and are or will be in full force and effect (or effective
judicial relief with respect thereto will have been obtained) (except where the
failure to do the same would not result in and reasonably could not be expected
to result in a Material Adverse Change). All actions pursuant to or in
furtherance of the Merger have been and will be taken in compliance with all
applicable laws.
6. AFFIRMATIVE COVENANTS.
Each Borrower covenants and agrees that, so long as any credit
hereunder shall be available and until full and final payment of the
Obligations, Borrowers shall and shall cause each of their respective Domestic
Subsidiaries to do all of the following:
6.1 ACCOUNTING SYSTEM. Maintain a system of accounting that enables
Borrowers to produce financial statements in accordance with GAAP and maintain
records pertaining to the Collateral that contain information as from time to
time reasonably may be requested by Agent. Borrowers also shall keep an
inventory reporting system that shows all additions, sales, claims, returns, and
allowances with respect to the Inventory.
6.2 COLLATERAL REPORTING. Provide Agent (and if so requested by Agent,
with copies for each Lender) with the following documents at the following times
in form satisfactory to Agent:
--------------------------------------------------------------------------------
Monthly (not later (a) a detailed calculation of the Borrowing Base
than the 15th day (including detail regarding those Accounts that are not
of each month) Eligible Accounts),
(b) a detailed aging, by total, of the Accounts,
together with a reconciliation to the detailed
calculation of the Borrowing Base previously provided
to Agent,
(c) a summary aging, by vendor, of Borrowers' accounts
payable and
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any book overdraft, and
(d) Inventory reports specifying Borrowers' cost of its
Inventory, by category and location, with additional
detail showing additions to and deletions from the
Inventory.
--------------------------------------------------------------------------------
Upon request by (e) copies of invoices in connection with the Accounts,
Agent credit memos, remittance advices, deposit slips,
shipping and delivery documents in connection with the
Accounts and, for Inventory and Equipment acquired by
Borrowers, purchase orders and invoices, and
(f) such other reports as to the Collateral, or the
financial condition of Borrowers, as Agent may request.
--------------------------------------------------------------------------------
In addition, each Borrower agrees to cooperate fully with Agent to
facilitate and implement a system of electronic collateral reporting when and if
Agent gets such a system in place, in order to provide electronic reporting of
each of the items set forth above.
6.3 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES. Deliver to Agent, with
copies to each Lender:
(a) as soon as available, but in any event within 45 days after the
end of each of the first three fiscal quarters during each of Parent's fiscal
years,
(i) a company prepared consolidated balance sheet, income
statement, and statement of cash flow covering Parent's and its Subsidiaries'
operations during such period, together with a copy of Borrower's Form 10-Q
quarterly report for such period filed with the SEC,
(ii) a certificate signed by the chief financial officer of
Parent to the effect that:
(A) the financial statements delivered hereunder have been
prepared in accordance with GAAP (except for the lack of footnotes and being
subject to year-end audit adjustments) and fairly present in all material
respects the financial condition of Parent and its Subsidiaries,
(B) the representations and warranties of Parent contained
in this Agreement and the other Loan Documents are true and correct in all
material respects on and as of the date of such certificate, as though made on
and as of such date (except to the extent that such representations and
warranties relate solely to an earlier date), and
(C) there does not exist any condition or event that
constitutes a Default or Event of Default (or, to the extent of any
non-compliance, describing such non-compliance as to which he or she may have
knowledge and what action Borrowers have taken, are taking, or propose to take
with respect thereto), and
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(iii) for each month that is the date on which a financial
covenant in Section 7.20 is to be tested, a Compliance Certificate
demonstrating, in reasonable detail, compliance at the end of such period with
the applicable financial covenants contained in Section 7.20, and
(b) as soon as available, but in any event within 120 days after the
end of each of Parent's fiscal years,
(i) consolidated financial statements of Parent and its
Subsidiaries for each such fiscal year, audited by independent certified public
accountants reasonably acceptable to Agent and certified, without any
qualifications, by such accountants to have been prepared in accordance with
GAAP (such audited financial statements to include a balance sheet, income
statement, and statement of cash flow and, if prepared, such accountants' letter
to management), together with a copy of Borrower's Form 10-K annual report for
such fiscal year filed with the SEC and a copy of Borrower's consolidating
financial statement for such fiscal year,
(ii) a certificate of such accountants addressed to Agent and
the Lenders stating that such accountants do not have knowledge of the existence
of any Default or Event of Default under Section 7.20,
(c) if and when filed by any Borrower,
(i) any other filings made by Borrower with the SEC, and
(d) any other information that is provided by Parent to its
shareholders generally,
(e) as soon as a Borrower has knowledge of any event or condition
that constitutes a Default or an Event of Default, notice thereof and a
statement of the curative action that Borrowers propose to take with respect
thereto, and
(f) upon the request of Agent, any other report reasonably requested
relating to the financial condition of Borrowers.
In addition to the financial statements referred to above, Borrowers
agree to deliver financial statements prepared on both a consolidated and
consolidating basis and that no Borrower, or any Subsidiary of a Borrower, will
have a fiscal year different from that of Parent. Borrowers agree that their
independent certified public accountants are authorized to communicate with
Agent and to release to Agent whatever financial information concerning
Borrowers that Agent reasonably may request. Each Borrower hereby irrevocably
authorizes and directs all auditors, accountants, or other third parties to
deliver to Agent, at Borrowers' expense, copies of Borrowers' financial
statements, papers related thereto, and other accounting records of any nature
in their possession (collectively, the "Financial Papers"), and to disclose to
Agent any information they may have regarding Borrowers' business affairs and
financial conditions (together with the Financial Papers, the "Financial
Information"). Agent agrees to keep the Financial Information strictly
confidential and Agent will not, without the prior written consent of Parent,
disclose the Financial Information to any third party in any manner whatsoever,
in whole or in part, except that Agent may disclose the Financial Information to
those of its
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directors, officers, employees, agents, lawyers, advisors or other
representatives (collectively, "Representatives") who (i) need to know the
Financial Information in connection with Borrower's performance of the terms of
this Agreement, (ii) have been informed of the confidential nature of the
Financial Information and (iii) have agreed to keep the Financial Information
confidential. Agent acknowledges that Agent is aware (and, if applicable, that
Agent's Representatives have been advised) that the United States securities
laws prohibit any person who has material non-public information about a company
from purchasing or selling securities of such company or from communicating such
information to a third party under circumstances in which it is reasonably
foreseeable that such third party is likely to purchase or sell such securities
and agrees to comply with these laws, rules and regulations. Notwithstanding the
foregoing, Agent shall also be permitted to make disclosures which Agent is
required to make pursuant to court order or judicial process, to examiners or
other personnel of governmental agencies that regulate or otherwise have legal
authority over banks organized under the laws of the United States or any state
thereof, so long as such examiner or other personnel are acting under color of
law, or as otherwise may be legally required of Agent.
6.4 [Intentionally Omitted].
6.5 RETURN. Cause returns and allowances, as between Borrowers and their
Account Debtors, to be on the same basis and in accordance with the usual
customary practices of the applicable Borrower, as they exist at the time of the
execution and delivery of this Agreement. If, at a time when no Event of Default
has occurred and is continuing, any Account Debtor returns any Inventory to any
Borrower, the applicable Borrower promptly shall determine the reason for such
return and, if the applicable Borrower accepts such return, issue a credit
memorandum (with a copy to be sent to Agent) in the appropriate amount to such
Account Debtor. If, at a time when an Event of Default has occurred and is
continuing, any Account Debtor returns any Inventory to any Borrower, the
applicable Borrower promptly shall determine the reason for such return and, if
Agent consents (which consent shall not be unreasonably withheld and shall be
deemed given if Agent fails to respond within 5 Business Days after being
contacted by the Administrative Borrower), issue a credit memorandum (with a
copy to be sent to Agent) in the appropriate amount to such Account Debtor.
6.6 MAINTENANCE OF PROPERTIES. Maintain and preserve all of its
properties which are necessary or useful in the proper conduct of its business
in good working order and condition, ordinary wear and tear excepted, and comply
at all times with the provisions of all leases to which it is a party as lessee
so as to prevent any loss or forfeiture thereof or thereunder which would
constitute a Material Adverse Change.
6.7 TAXES. Cause all assessments and taxes, whether real, personal, or
otherwise, due or payable by, or imposed, levied, or assessed against Borrowers
or any of their assets to be paid in full, before delinquency, except to the
extent that the validity of such assessment or tax shall be the subject of a
Permitted Protest. Borrowers will make timely payment or deposit of all tax
payments and withholding taxes required of them by applicable laws, including
those laws concerning F.I.C.A., F.U.T.A., state disability, and local, state,
and federal income taxes, and will, upon request, furnish Agent with proof
satisfactory to Agent indicating that Borrower has made such payments or
deposits. Borrower shall deliver satisfactory evidence of payment of
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applicable excise taxes in each jurisdictions in which Borrower is required to
pay any such excise tax.
6.8 INSURANCE.
(a) At Borrowers' expense, maintain insurance respecting its
property and assets wherever located, covering loss or damage by fire, theft,
explosion, and all other hazards and risks as ordinarily are insured against by
other Persons engaged in the same or similar businesses. Borrowers also shall
maintain business interruption, public liability, and product liability
insurance, as well as insurance against larceny, embezzlement, and criminal
misappropriation. All such policies of insurance shall be in such amounts and
with such insurance companies as are reasonably satisfactory to Agent. Borrowers
shall deliver copies of all such policies to Agent with a satisfactory lender's
loss payable endorsement naming Agent as sole loss payee or additional insured,
as appropriate. Each policy of insurance or endorsement shall contain a clause
requiring the insurer to give not less than 30 days prior written notice to
Agent in the event of cancellation of the policy for any reason whatsoever.
(b) Administrative Borrower shall give Agent prompt notice of any
loss covered by such insurance. Agent shall have the exclusive right to adjust
any losses payable under any such insurance policies in excess of $500,000,
without any liability to Borrowers whatsoever in respect of such adjustments.
Any monies received as payment for any loss under any insurance policy mentioned
above (other than liability insurance policies) or as payment of any award or
compensation for condemnation or taking by eminent domain, shall be paid over to
Agent to be applied at the option of the Required Lenders either to the
prepayment of the Obligations or shall be disbursed to Administrative Borrower
under staged payment terms reasonably satisfactory to the Required Lenders for
application to the cost of repairs, replacements, or restorations. Any such
repairs, replacements, or restorations shall be effected with reasonable
promptness and shall be of a value at least equal to the value of the items of
property destroyed prior to such damage or destruction.
(c) Borrowers shall not take out separate insurance concurrent in
form or contributing in the event of loss with that required to be maintained
under this Section 6.8, unless Agent is included thereon as named insured with
the loss payable to Agent under a lender's loss payable endorsement or its
equivalent. Administrative Borrower immediately shall notify Agent whenever such
separate insurance is taken out, specifying the insurer thereunder and full
particulars as to the policies evidencing the same, and copies of such policies
promptly shall be provided to Agent.
6.9 LOCATION OF INVENTORY AND EQUIPMENT. Except with respect to
Permitted Dispositions, keep the Inventory and Equipment only at the locations
identified on Schedule 5.5 to the Parent Disclosure Letter; provided, however,
that Administrative Borrower may amend Schedule 5.5 to the Parent Disclosure
Letter so long as such amendment occurs by written notice to Agent not less than
30 days prior to the date on which the Inventory or Equipment is moved to such
new location, so long as such new location is within the continental United
States, and so long as, at the time of such written notification, the applicable
Borrower provides any financing statements or fixture filings necessary to
perfect and continue perfected the Agent's Liens on such assets and also
provides to Agent a Collateral Access Agreement.
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6.10 COMPLIANCE WITH LAWS. Comply with the requirements of all
applicable laws, rules, regulations, and orders of any Governmental Authority,
including the Fair Labor Standards Act and the Americans With Disabilities Act,
other than laws, rules, regulations, and orders the non-compliance with which,
individually or in the aggregate, would not result in and reasonably could not
be expected to result in a Material Adverse Change.
6.11 LEASES. Pay when due all rents and other amounts payable under any
leases to which any Borrower is a party or by which any Borrower's properties
and assets are bound, the nonpayment of which would, individually or in the
aggregate, result in a Material Adverse Change, unless such payments are the
subject of a Permitted Protest.
6.12 BROKERAGE COMMISSIONS. Pay any and all brokerage commission or
finders fees incurred in connection with or as a result of Borrowers' obtaining
financing from the Lender Group under this Agreement. Borrowers agree and
acknowledge that payment of all such brokerage commissions or finders fees shall
be the sole responsibility of Borrowers, and each Borrower agrees to indemnify,
defend, and hold Agent and the Lender Group harmless from and against any claim
of any broker or finder arising out of Borrowers' obtaining financing from the
Lender Group under this Agreement.
6.13 EXISTENCE. At all times preserve and keep in full force and effect
each Borrower's valid existence and good standing and any rights and franchises
material to Borrowers' businesses.
6.14 ENVIRONMENTAL.
(a) Keep any property either owned or operated by any Borrower free
of any Environmental Liens or post bonds or other financial assurances
sufficient to satisfy the obligations or liability evidenced by such
Environmental Liens, (b) comply, in all material respects, with Environmental
Laws and provide to Agent documentation of such compliance which Agent
reasonably requests, (c) promptly notify Agent of any release of a Hazardous
Material of any reportable quantity from or onto property owned or operated by
any Borrower and take any Remedial Actions required to xxxxx said release or
otherwise to come into compliance with applicable Environmental Law, and (d)
promptly provide Agent with written notice within 10 days of the receipt of any
of the following: (i) notice that an Environmental Lien has been filed against
any of the real or personal property of any Borrower, (ii) commencement of any
Environmental Action or notice that an Environmental Action will be filed
against any Borrower, and (iii) notice of a violation, citation, or other
administrative order which reasonably could be expected to result in a Material
Adverse Change.
6.15 DISCLOSURE UPDATES. Promptly and in no event later than 5 Business
Days after obtaining knowledge thereof, (a) notify Agent if any written
information, exhibit, or report furnished to the Lender Group contained any
untrue statement of a material fact or omitted to state any material fact
necessary to make the statements contained therein not misleading in light of
the circumstances in which made, and (b) correct any defect or error that may be
discovered therein or in any Loan Document or in the execution, acknowledgement,
filing, or recordation thereof.
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7. NEGATIVE COVENANTS.
Each Borrower covenants and agrees that, so long as any credit
hereunder shall be available and until full and final payment of the
Obligations, Borrowers will not and will not permit any of their respective
Domestic Subsidiaries to do any of the following:
7.1 INDEBTEDNESS. Create, incur, assume, permit, guarantee, or otherwise
become or remain, directly or indirectly, liable with respect to any
Indebtedness, except:
(a) Indebtedness evidenced by this Agreement and the other Loan
Documents,
(b) Indebtedness of up to $1,000,000 incurred during each calendar
year under clause (a) of this Section 7.1; provided no Indebtedness may be
incurred under this clause (b) following the occurrence of an Event of Default
and so long as it is continuing,
(c) Indebtedness set forth on Schedule 5.20 to the Parent Disclosure
Letter,
(d) Indebtedness from any Borrower to any other Borrower provided
that such Indebtedness shall be subject to the terms and conditions of the
Intercompany Subordination Agreement, and
(e) refinancings, renewals, or extensions of Indebtedness permitted
under clauses (a), (b) and (c) of this Section 7.1 (and continuance or renewal
of any Permitted Liens associated therewith) so long as: (i) the terms and
conditions of such refinancings, renewals, or extensions do not, in Agent's
judgment, materially impair the prospects of repayment of the Obligations by
Borrowers or materially impair Borrowers' creditworthiness, (ii) such
refinancings, renewals, or extensions do not result in an increase in the
principal amount of, or interest rate with respect to, the Indebtedness so
refinanced, renewed, or extended, (iii) such refinancings, renewals, or
extensions do not result in a shortening of the average weighted maturity of the
Indebtedness so refinanced, renewed, or extended, nor are they on terms or
conditions that, taken as a whole, are materially more burdensome or restrictive
to the applicable Borrower, and (iv) if the Indebtedness that is refinanced,
renewed, or extended was subordinated in right of payment to the Obligations,
then the terms and conditions of the refinancing, renewal, or extension
Indebtedness must include subordination terms and conditions that are at least
as favorable to the Lender Group as those that were applicable to the
refinanced, renewed, or extended Indebtedness.
7.2 LIENS. Create, incur, assume, or permit to exist, directly or
indirectly, any Lien on or with respect to any of its assets, of any kind,
whether now owned or hereafter acquired, or any income or profits therefrom,
except for Permitted Liens (for this purpose, "Permitted Liens" includes Liens
that are replacements of Permitted Liens to the extent that the original
Indebtedness is refinanced, renewed, or extended under Section 7.1(c) and so
long as the replacement Liens only encumber those assets that secured the
refinanced, renewed, or extended Indebtedness).
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7.3 RESTRICTIONS ON FUNDAMENTAL CHANGES.
(a) Enter into any merger, consolidation (other than the merger or
consolidation of DTM Corporation with any of the Borrowers), reorganization, or
recapitalization, or reclassify its Stock.
(b) Liquidate, wind up, or dissolve itself (or suffer any
liquidation or dissolution).
(c) Convey, sell, lease, license, assign, transfer, or otherwise
dispose of, in one transaction or a series of transactions, all or any
substantial part of its assets.
7.4 DISPOSAL OF ASSETS. Other than Permitted Dispositions, convey, sell,
lease, license, assign, transfer, or otherwise dispose of any of the assets of
any Borrower.
7.5 CHANGE NAME. Change any Borrower's name, FEIN, corporate structure,
or identity, or add any new fictitious name; provided, however, that Borrower
may change its name upon at least 30 days prior written notice by Administrative
Borrower to Agent of such change and so long as, at the time of such written
notification, such Borrower provides any financing statements or fixture filings
necessary to perfect and continue perfected the Agent's Liens.
7.6 GUARANTEE. Except as provided by Section 7.1 guarantee or otherwise
become in any way liable with respect to the obligations of any third Person
except by endorsement of instruments or items of payment for deposit to the
account of Borrowers or which are transmitted or turned over to Agent.
7.7 NATURE OF BUSINESS. Make any change in the principal nature of
Borrowers' business.
7.8 PREPAYMENTS AND AMENDMENTS.
(a) Except in connection with a refinancing permitted by Section
7.1(d), prepay, redeem, defease, purchase, or otherwise acquire any Indebtedness
of Borrower, other than the Obligations in accordance with this Agreement, and
(b) Except in connection with a refinancing permitted by Section
7.1(d), directly or indirectly, amend, modify, alter, increase, or change any of
the terms or conditions of any agreement, instrument, document, indenture, or
other writing evidencing or concerning Indebtedness permitted under Section
7.1(b).
7.9 CHANGE OF CONTROL. Cause, permit, or suffer, directly or indirectly,
any Change of Control.
7.10 CONSIGNMENTS. Consign any Inventory or sell any Inventory on xxxx
and hold, sale or return, sale on approval, or other conditional terms of sale.
7.11 DISTRIBUTIONS. Make distributions or declare and pay dividends that
would cause a violation of any of the financial covenants contained in Section
7.20.
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7.12 ACCOUNTING METHODS. Modify or change its method of accounting
(other than as may be required to conform to GAAP) or enter into, modify, or
terminate any agreement currently existing, or at any time hereafter entered
into with any third party accounting firm or service bureau for the preparation
or storage of Borrowers' accounting records without said accounting firm or
service bureau agreeing to provide Agent information regarding the Collateral or
Borrowers' financial condition.
7.13 INVESTMENTS. Except for Permitted Investments, directly or
indirectly, make or acquire any Investment or incur any liabilities (including
contingent obligations) for or in connection with any Investment; provided,
however, that Borrowers shall not have Permitted Investments (other than in the
Cash Management Accounts) in excess of $1,000,000 outstanding at any one time
unless the applicable Borrower and the applicable securities intermediary or
bank have entered into Control Agreements or similar arrangements governing such
Permitted Investments, as Agent shall determine in its Permitted Discretion, to
perfect (and further establish) the Agent's Liens in such Permitted Investments.
7.14 TRANSACTIONS WITH AFFILIATES. Directly or indirectly enter into or
permit to exist any transaction between a Borrower and an Affiliate which
involves a payment or distribution of funds or assets by the Borrower to an
Affiliate except for transactions which (x) individually or in the aggregate do
not exceed $500,000 in any calendar year, (y) are in the ordinary course of
Borrowers' business, upon fair and reasonable terms, that are (i) fully
disclosed to Agent or (ii) consistent with past practices, and that are no less
favorable to Borrowers than would be obtained in an arm's length transaction
with a non-Affiliate or (z) are solely among Borrowers and which transactions do
not result in and reasonably could not be expected to result in a Material
Adverse Change.
7.15 SUSPENSION. Suspend or go out of a substantial portion of its
business.
7.16 [INTENTIONALLY OMITTED].
7.17 USE OF PROCEEDS. Use the proceeds of the Advances and the Term Loan
for any purpose other than (a) on the Closing Date, (i) to repay, in full, the
outstanding principal, accrued interest, and accrued fees and expenses owing to
Existing Lender, (ii) to pay transactional fees, costs, and expenses incurred in
connection with this Agreement, the other Loan Documents, and the transactions
contemplated hereby and thereby, and (iii) to purchase the Stock of DTM
Corporation pursuant to the Tender Offer, and (b) after the Closing Date, as is
otherwise consistent with the terms and conditions hereof, for its lawful and
permitted purposes.
7.18 CHANGE IN LOCATION OF CHIEF EXECUTIVE OFFICE; INVENTORY AND
EQUIPMENT WITH BAILEES. Relocate its chief executive office to a new location
without Administrative Borrower providing 30 days prior written notification
thereof to Agent and so long as, at the time of such written notification, the
applicable Borrower provides any financing statements or fixture filings
necessary to perfect and continue perfected the Agent's Liens and also provides
to Agent a Collateral Access Agreement with respect to such new location. The
Inventory and Equipment shall not at any time now or hereafter be stored with a
bailee, warehouseman, or similar party without Agent's prior written consent.
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7.19 SECURITIES ACCOUNTS. Establish or maintain any Securities Account
unless Agent shall have received a Control Agreement in respect of such
Securities Account. Borrowers agree to not transfer assets out of any Securities
Account; provided, however, that, so long as no Event of Default has occurred
and is continuing or would result therefrom, Borrowers may use such assets (and
the proceeds thereof) to the extent not prohibited by this Agreement.
7.20 FINANCIAL COVENANTS.
(a) Fail to maintain:
(i) SENIOR DEBT TO EBITDA RATIO. A Senior Debt to EBITDA Ratio
of not more than of 2.0:1, for each fiscal quarter during the term of this
Agreement commencing with the fiscal quarter ending June 30, 2001.
(ii) TOTAL DEBT TO EBITDA RATIO. A Total Debt to EBITDA Ratio of
not more than 3.0:1 for each fiscal quarter commencing with the quarter ending
June 30, 2001 and concluding with the quarter ending December 31, 2002, and for
each fiscal quarter thereafter during the term of this Agreement, not more than
2.0:1, in each cased measured on a quarterly basis.
(iii) FIXED CHARGE COVERAGE RATIO. A Fixed Charge Coverage Ratio
of not less than 1.25:1.00, for each fiscal quarter during the term of this
Agreement, measured on a quarterly basis.
(iv) LIQUIDITY. Cash Equivalents shall be not less than
$5,000,000 as of the end of each fiscal quarter during the term of this
Agreement.
(v) TANGIBLE NET WORTH. Tangible Net Worth of at least
$23,000,000, increased by 50% of Borrowers' net income for the period from July
1, 2001, through December 31, 2001, and further increased by 50% of Borrowers'
net income for each fiscal quarter during the remaining term of this Agreement,
commencing with the fiscal quarter ending on March 31, 2002.
(vi) FISCAL YEAR 2001 EBITDA ADJUSTMENT. For the purpose of
calculating EBITDA in connection with this Section 7.20(a) for Borrowers' fiscal
year 2001, EBITDA shall be increased by the amount of non-recurring costs, fees
and expenses, as determined in accordance with GAAP which are related to the
tender offer of the shares of stock of DTM Corporation, the merger of DTM
Corporation into Tiger Deals, Inc., and the consolidation of the business and
operations of DTM Corporation and its Subsidiaries into Borrowers.
(b) Make:
(i) CAPITAL EXPENDITURES. Capital Expenditures in any fiscal
year in excess of the amount set forth in the following table for the applicable
period (for the purposes of this subsection, the amount paid for demonstration
equipment shall be reduced by the amount received from the sale of demonstration
equipment during the same fiscal year):
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---------------------------------- -----------------------------------
Fiscal Years 2001 and 2002 Fiscal Years 2003 through 2005
---------------------------------- -----------------------------------
$7,500,000 $10,000,000
---------------------------------- -----------------------------------
8. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an event of
default (each, an "Event of Default") under this Agreement:
8.1 If Borrowers fail to pay when due and payable, or when declared due
and payable, all or any portion of the Obligations (whether of principal on the
Advances, interest (including any interest which, but for the provisions of the
Bankruptcy Code, would have accrued on such amounts), fees and charges due the
Lender Group, reimbursement of Lender Group Expenses, or other amounts
constituting Obligations), other than principal payments on the Term Loan;
8.2 If Borrower fails to pay within 3 Business Days of the date when due
and payable, or when declared due and payable, a principal payment on the Term
Loan;
8.3 If Borrowers fail to perform, keep, or observe any term, provision,
condition, covenant, or agreement contained in this Agreement or in any of the
other Loan Documents to such extent as to cause a Material Adverse Change;
8.4 If any material portion of any Borrower's or any of its
Subsidiaries' assets is attached, seized, subjected to a writ or distress
warrant, levied upon, or comes into the possession of any third Person;
8.5 If an Insolvency Proceeding is commenced by any Borrower or any of
its Subsidiaries;
8.6 If an Insolvency Proceeding is commenced against any Borrower, or
any of its Subsidiaries, and any of the following events occur: (a) the
applicable Borrower or the Subsidiary consents to the institution of such
Insolvency Proceeding against it, (b) the petition commencing the Insolvency
Proceeding is not timely controverted, (c) the petition commencing the
Insolvency Proceeding is not dismissed within 45 calendar days of the date of
the filing thereof; provided, however, that, during the pendency of such period,
Agent (including any successor agent) and each other member of the Lender Group
shall be relieved of their obligation to extend credit hereunder, (d) an interim
trustee is appointed to take possession of all or any substantial portion of the
properties or assets of, or to operate all or any substantial portion of the
business of, any Borrower or any of its Subsidiaries, or (e) an order for relief
shall have been entered therein;
8.7 If any Borrower or any of its Subsidiaries is enjoined, restrained,
or in any way prevented by court order from continuing to conduct all or any
material part of its business affairs;
8.8 If a notice of Lien, levy, or assessment is filed of record with
respect to any Borrower's or any of its Subsidiaries' assets by the United
States, or any department, agency, or instrumentality thereof, or by any state,
county, municipal, or governmental agency, or if any taxes or debts owing at any
time hereafter to any one or more of such entities becomes a Xxxx,
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whether xxxxxx or otherwise, upon any Borrower's or any of its Subsidiaries'
assets and the same is not paid before such payment is delinquent;
8.9 If a judgment or other claim becomes a Lien or encumbrance upon any
material portion of any Borrower's or any of its Subsidiaries' properties or
assets;
8.10 If there is a default by a Borrower or a Subsidiary in any material
agreement to which any Borrower or any of its Subsidiaries is a party and such
default (a) occurs at the final maturity of the obligations thereunder, or (b)
results in a right by the other party thereto, irrespective of whether
exercised, to accelerate the maturity of the applicable Borrower's or its
Subsidiaries' obligations thereunder, to terminate such agreement, the effect of
which is or may be a Material Adverse Change;
8.11 If any Borrower or any of its Subsidiaries makes any payment on
account of Indebtedness that has been contractually subordinated in right of
payment to the payment of the Obligations, except to the extent such payment is
permitted by the terms of the subordination provisions applicable to such
Indebtedness;
8.12 If any misstatement or misrepresentation resulting in a Material
Adverse Change exists now or hereafter in any warranty, representation,
statement, or Record made to the Lender Group by any Borrower, its Subsidiaries,
or any officer, employee, agent, or director of any Borrower or any of its
Subsidiaries;
8.13 If this Agreement or any other Loan Document that purports to
create a Lien, shall, for any reason, fail or cease to create a valid and
perfected and, except to the extent permitted by the terms hereof or thereof,
first priority Lien on or security interest in all of the Collateral covered
hereby or thereby;
8.14 If on October 1, 2001, the Borrowers are not in compliance with the
Borrowing Base or have Overadvances and such non-compliance or Overadvances are
not cured by October 2, 2001, pursuant to Section 9.2; or
8.15 Any provision of any Loan Document shall at any time for any reason
be declared to be null and void, or the validity or enforceability thereof shall
be contested by any Borrower, or a proceeding shall be commenced by any
Borrower, or by any Governmental Authority having jurisdiction over any
Borrower, seeking to establish the invalidity or unenforceability thereof, or
any Borrower shall deny that any Borrower has any liability or obligation
purported to be created under any Loan Document.
9. THE LENDER GROUP'S RIGHTS AND REMEDIES.
9.1 RIGHTS AND REMEDIES. Upon the occurrence, and during the
continuation, of an Event of Default, the Required Lenders (at their election
but without notice of their election and without demand) may authorize and
instruct Agent to do any one or more of the following on behalf of the Lender
Group (and Agent, acting upon the instructions of the Required Lenders, shall do
the same on behalf of the Lender Group), all of which are authorized by
Borrowers:
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(a) Declare all Obligations, whether evidenced by this Agreement, by
any of the other Loan Documents, or otherwise, immediately due and payable;
(b) Cease advancing money or extending credit to or for the benefit
of Borrowers under this Agreement, under any of the Loan Documents, or under any
other agreement between Borrowers and the Lender Group;
(c) Terminate this Agreement and any of the other Loan Documents as
to any future liability or obligation of the Lender Group, but without affecting
any of the Agent's Liens in the Collateral and without affecting the
Obligations;
(d) Settle or adjust disputes and claims directly with Account
Debtors for amounts and upon terms which Agent considers advisable, and in such
cases, Agent will credit the Loan Account with only the net amounts received by
Agent in payment of such disputed Accounts after deducting all Lender Group
Expenses incurred or expended in connection therewith;
(e) Cause Borrowers to hold all returned Inventory in trust for the
Lender Group, segregate all returned Inventory from all other assets of
Borrowers or in Borrowers' possession and conspicuously label said returned
Inventory as the property of the Lender Group;
(f) Without notice to or demand upon any Borrower, make such
payments and do such acts as Agent considers necessary or reasonable to protect
its security interests in the Collateral. Each Borrower agrees to assemble the
Collateral if Agent so requires, and to make the Collateral available to Agent
at a place that Agent may designate which is reasonably convenient to both
parties. Each Borrower authorizes Agent to enter the premises where the
Collateral is located, to take and maintain possession of the Collateral, or any
part of it, and to pay, purchase, contest, or compromise any Lien that in
Agent's determination appears to conflict with the Agent's Liens and to pay all
expenses incurred in connection therewith and to charge Borrowers' Loan Account
therefor. With respect to any of Borrowers' owned or leased premises, each
Borrower hereby grants Agent a license to enter into possession of such premises
and to occupy the same, without charge, in order to exercise any of the Lender
Group's rights or remedies provided herein, at law, in equity, or otherwise;
(g) Without notice to any Borrower (such notice being expressly
waived), and without constituting a retention of any collateral in satisfaction
of an obligation (within the meaning of the Code), set off and apply to the
Obligations any and all (i) balances and deposits of any Borrower held by the
Lender Group (including any amounts received in the Cash Management Accounts),
or (ii) Indebtedness at any time owing to or for the credit or the account of
any Borrower held by the Lender Group;
(h) Hold, as cash collateral, any and all balances and deposits of
any Borrower held by the Lender Group, and any amounts received in the Cash
Management Accounts, to secure the full and final repayment of all of the
Obligations;
(i) Ship, reclaim, recover, store, finish, maintain, repair, prepare
for sale, advertise for sale, and sell (in the manner provided for herein) the
Collateral. Each Borrower hereby grants to Agent a license or other right to
use, without charge, such Borrower's labels,
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patents, copyrights, trade secrets, trade names, trademarks, service marks, and
advertising matter, or any property of a similar nature, as it pertains to the
Collateral, in completing production of, advertising for sale, and selling any
Collateral and such Borrower's rights under all licenses and all franchise
agreements shall inure to the Lender Group's benefit;
(j) Sell the Collateral at either a public or private sale, or both,
by way of one or more contracts or transactions, for cash or on terms, in such
manner and at such places (including Borrowers' premises) as Agent determines is
commercially reasonable. It is not necessary that the Collateral be present at
any such sale;
(k) Agent shall give notice of the disposition of the Collateral as
follows:
(i) Agent shall give Administrative Borrower (for the benefit of
the applicable Borrower) a notice in writing of the time and place of public
sale, or, if the sale is a private sale or some other disposition other than a
public sale is to be made of the Collateral, the time on or after which the
private sale or other disposition is to be made; and
(ii) The notice shall be personally delivered or mailed, postage
prepaid, to Administrative Borrower as provided in Section 12, at least 10 days
before the earliest time of disposition set forth in the notice; no notice needs
to be given prior to the disposition of any portion of the Collateral that is
perishable or threatens to decline speedily in value or that is of a type
customarily sold on a recognized market;
(l) Agent, on behalf of the Lender Group, may credit bid and
purchase at any public sale;
(m) Agent may seek the appointment of a receiver or keeper to take
possession of all or any portion of the Collateral or to operate same and, to
the maximum extent permitted by law, may seek the appointment of such a receiver
without the requirement of prior notice or a hearing;
(n) The Lender Group shall have all other rights and remedies
available to it at law or in equity or pursuant to any other Loan Documents; and
(o) Any deficiency that exists after disposition of the Collateral
as provided above will be paid immediately by Borrowers. Any excess will be
returned, without interest and subject to the rights of third Persons, by Agent
to Administrative Borrower (for the benefit of the applicable Borrower) within
30 Business Days after completion of such disposition.
9.2 ADDITIONAL COLLATERAL. Borrowers shall have the right to cure a
Default under Section 8.14 by causing (i) all of the Foreign Subsidiaries to
execute and deliver to Agent general continuing guaranties of the Obligations
(the "Foreign Subsidiary Guaranties"), security agreements, fixed charges,
floating charges and any other agreements or documents necessary to create and
perfect Agent's Lien on the present and future accounts of each such Foreign
Subsidiary (the "Additional Collateral") to secure the Obligations, and any
other documents necessary to perfect Agent's Lien on such accounts, (ii) the
Secretary of each Foreign Subsidiary to execute and deliver to Agent
certificates attesting to the resolutions of each Subsidiary's Board of
Directors authorizing its execution, delivery, and performance of its guaranty
and
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security documents and authorizing specific officers of such Subsidiary to
execute the same, and (iii) legal counsel acceptable to Agent for each Foreign
Subsidiary to issue an opinion satisfactory to Agent, including, without
limitation, opinions as to the perfection and priority of Agent's Lien on the
assets of the applicable Foreign Subsidiary.
9.3 REMEDIES CUMULATIVE. The rights and remedies of the Lender Group
under this Agreement, the other Loan Documents, and all other agreements shall
be cumulative. The Lender Group shall have all other rights and remedies not
inconsistent herewith as provided under the Code, by law, or in equity. No
exercise by the Lender Group of one right or remedy shall be deemed an election,
and no waiver by the Lender Group of any Event of Default shall be deemed a
continuing waiver. No delay by the Lender Group shall constitute a waiver,
election, or acquiescence by it.
10. TAXES AND EXPENSES.
If any Borrower (i) fails to pay any monies (whether taxes,
assessments, insurance premiums, or, in the case of leased properties or assets,
rents or other amounts payable under such leases) due to third Persons, or fails
to make any deposits or furnish any required proof of payment or deposit, all as
required under the terms of this Agreement, and (ii) fails to make a Permitted
Protest in connection therewith, then, Agent, in its sole discretion and without
prior notice to any Borrower, may do any or all of the following: (a) make
payment of the same or any part thereof, (b) set up such reserves in Borrowers'
Loan Account as Agent deems necessary to protect the Lender Group from the
exposure created by such failure, or (c) in the case of the failure to comply
with Section 6.8 hereof, obtain and maintain insurance policies of the type
described in Section 6.8 and take any action with respect to such policies as
Agent deems prudent. Any such amounts paid by Agent shall constitute Lender
Group Expenses and any such payments shall not constitute an agreement by the
Lender Group to make similar payments in the future or a waiver by the Lender
Group of any Event of Default under this Agreement. Agent need not inquire as
to, or contest the validity of, any such expense, tax, or Lien and the receipt
of the usual official notice for the payment thereof shall be conclusive
evidence that the same was validly due and owing.
11. WAIVERS; INDEMNIFICATION.
11.1 DEMAND; PROTEST; ETC. Borrower waives demand, protest, notice of
protest, notice of default or dishonor, notice of payment and nonpayment,
nonpayment at maturity, release, compromise, settlement, extension, or renewal
of documents, instruments, chattel paper, and guarantees at any time held by the
Lender Group on which any such Borrower may in any way be liable.
11.2 THE LENDER GROUP'S LIABILITY FOR COLLATERAL. Each Borrower hereby
agrees that: (a) so long as the Lender Group complies with its obligations, if
any, under the Code, the Lender group shall not in any way or manner be liable
or responsible for: (i) the safekeeping of the Collateral, (ii) any loss or
damage thereto occurring or arising in any manner or fashion from any cause,
(iii) any diminution in the value thereof, or (iv) any act or default of any
carrier, warehouseman, bailee, forwarding agency, or other Person, and (b) all
risk of loss, damage, or destruction of the Collateral shall be borne by
Borrowers.
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11.3 INDEMNIFICATION. Each Borrower shall pay, indemnify, defend, and
hold the Agent-Related Persons, the Lender-Related Persons with respect to each
Lender, each Participant, and each of their respective officers, directors,
employees, agents, and attorneys-in-fact (each, an "Indemnified Person")
harmless (to the fullest extent permitted by law) from and against any and all
claims, demands, suits, actions, investigations, proceedings, and damages, and
all reasonable attorneys fees and disbursements and other costs and expenses
actually incurred in connection therewith (as and when they are incurred and
irrespective of whether suit is brought), at any time asserted against, imposed
upon, or incurred by any of them (a) in connection with or as a result of or
related to the execution, delivery, enforcement, performance, or administration
of this Agreement, any of the other Loan Documents, or the transactions
contemplated hereby or thereby, and (b) with respect to any investigation,
litigation, or proceeding related to this Agreement, any other Loan Document, or
the use of the proceeds of the credit provided hereunder (irrespective of
whether any Indemnified Person is a party thereto), or any act, omission, event,
or circumstance in any manner related thereto (all the foregoing, collectively,
the "Indemnified Liabilities"). The foregoing to the contrary notwithstanding,
Borrowers shall have no obligation to any Indemnified Person under this Section
11.3 with respect to any Indemnified Liability that a court of competent
jurisdiction finally determines to have resulted from the gross negligence or
willful misconduct of such Indemnified Person. This provision shall survive the
termination of this Agreement and the repayment of the Obligations. If any
Indemnified Person makes any payment to any other Indemnified Person with
respect to an Indemnified Liability as to which Borrowers were required to
indemnify the Indemnified Person receiving such payment, the Indemnified Person
making such payment is entitled to be indemnified and reimbursed by Borrowers
with respect thereto. WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO
EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE
OR IN PART ARE CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH
INDEMNIFIED PERSON OR OF ANY OTHER PERSON.
12. NOTICES.
Unless otherwise provided in this Agreement, all notices or demands
by Borrowers or Agent to the other relating to this Agreement or any other Loan
Document shall be in writing and (except for financial statements and other
informational documents which may be sent by first-class mail, postage prepaid)
shall be personally delivered or sent by registered or certified mail (postage
prepaid, return receipt requested), overnight courier, electronic mail (at such
email addresses as Administrative Borrower or Agent, as applicable, may
designate to each other in accordance herewith), or telefacsimile to Borrowers
in care of Administrative Borrower or to Agent, as the case may be, at its
address set forth below:
If to Administrative
Borrower: 3D SYSTEMS CORPORATION
00000 Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: E. Xxxxx Xxxxxx, Chief Financial Officer
Fax No. 000.000.0000
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If to Agent: U.S. BANK NATIONAL ASSOCIATION
00000 Xxxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxx and Xxxxxxx Xxx
Fax No.: 000.000.0000
with copies to: BUCHALTER, NEMER, FIELDS & YOUNGER
000 Xx. Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxxxxxxx, Esq.
Fax No.: 000.000.0000
Agent and Borrowers may change the address at which they are to
receive notices hereunder, by notice in writing in the foregoing manner given to
the other party. All notices or demands sent in accordance with this Section 12,
other than notices by Agent in connection with enforcement rights against the
Collateral under the provisions of the Code, shall be deemed received on the
earlier of the date of actual receipt or 3 Business Days after the deposit
thereof in the mail. Each Borrower acknowledges and agrees that notices sent by
the Lender Group in connection with the exercise of enforcement rights against
Collateral under the provisions of the Code shall be deemed sent when deposited
in the mail or personally delivered, or, where permitted by law, transmitted by
telefacsimile or any other method set forth above.
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS
EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH
OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF
AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO
ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL
BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF CALIFORNIA.
(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND
LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA, PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT'S
OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH
ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. BORROWERS AND
THE LENDER GROUP WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT
EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO
VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION
13(b).
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(c) BORROWERS AND THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY
OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. BORROWERS AND THE LENDER GROUP REPRESENT THAT EACH HAS
REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A
COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
14.1 ASSIGNMENTS AND PARTICIPATIONS.
(a) Any Lender may, with the written consent of Agent (provided that
no written consent of Agent shall be required in connection with any assignment
and delegation by a Lender to an Eligible Transferee), assign and delegate to
one or more assignees (each an "Assignee") all, or any ratable part of all, of
the Obligations, the Commitments and the other rights and obligations of such
Lender hereunder and under the other Loan Documents, in a minimum amount of
$5,000,000; provided, however, that Borrowers and Agent may continue to deal
solely and directly with such Lender in connection with the interest so assigned
to an Assignee and such assignment shall be treated as a Participation as
described in Section 14.1(e) until (i) written notice of such assignment,
together with payment instructions, addresses, and related information with
respect to the Assignee, have been given to Administrative Borrower and Agent by
such Lender and the Assignee, (ii) such Lender and its Assignee have delivered
to Administrative Borrower and Agent an Assignment and Acceptance in form and
substance satisfactory to Agent, and (iii) the assignor Lender or Assignee has
paid to Agent for Agent's separate account a processing fee in the amount of
$5,000. Anything contained herein to the contrary notwithstanding, the consent
of Agent shall not be required (and payment of any fees shall not be required)
if such assignment is in connection with any merger, consolidation, sale,
transfer, or other disposition of all or any substantial portion of the business
or loan portfolio of such Lender.
(b) From and after the date that Agent notifies the assignor Lender
(with a copy to Administrative Borrower) that it has received an executed
Assignment and Acceptance and payment of the above-referenced processing fee,
(i) the Assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, shall have the rights and obligations of a Lender
under the Loan Documents, and (ii) the assignor Lender shall, to the extent that
rights and obligations hereunder and under the other Loan Documents have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
(except with respect to Section 11.3 hereof) and be released from its
obligations under this Agreement (and in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement and the other Loan Documents, such Lender
shall cease to be a party
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hereto and thereto), and such assignment shall affect a novation between
Borrowers and the Assignee.
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the Assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (1) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document furnished
pursuant hereto, (2) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
Borrowers or the performance or observance by Borrowers of any of their
obligations under this Agreement or any other Loan Document furnished pursuant
hereto, (3) such Assignee confirms that it has received a copy of this
Agreement, together with such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance, (4) such Assignee will, independently and without
reliance upon Agent, such assigning Lender or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement, (5) such Assignee appoints and authorizes Agent to take such
actions and to exercise such powers under this Agreement as are delegated to
Agent, by the terms hereof, together with such powers as are reasonably
incidental thereto, and (6) such Assignee agrees that it will perform all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.
(d) Immediately upon each Assignee's making its processing fee
payment under the Assignment and Acceptance and receipt and acknowledgment by
Agent of such fully executed Assignment and Acceptance, this Agreement shall be
deemed to be amended to the extent, but only to the extent, necessary to reflect
the addition of the Assignee and the resulting adjustment of the Commitments
arising therefrom. The Commitment allocated to each Assignee shall reduce such
Commitments of the assigning Lender pro tanto.
(e) Any Lender may at any time, with the written consent of Agent,
sell to one or more commercial banks, financial institutions, or other Persons
not Affiliates of such Lender (a "Participant") participating interests in its
Obligations, the Commitment, and the other rights and interests of that Lender
(the "Originating Lender") hereunder and under the other Loan Documents
(provided that no written consent of Agent shall be required in connection with
any sale of any such participating interests by a Lender to an Eligible
Transferee); provided, however, that (i) the Originating Lender shall remain a
"Lender" for all purposes of this Agreement and the other Loan Documents and the
Participant receiving the participating interest in the Obligations, the
Commitments, and the other rights and interests of the Originating Lender
hereunder shall not constitute a "Lender" hereunder or under the other Loan
Documents and the Originating Lender's obligations under this Agreement shall
remain unchanged, (ii) the Originating Lender shall remain solely responsible
for the performance of such obligations, (iii) Borrowers, Agent, and the Lenders
shall continue to deal solely and directly with the Originating Lender in
connection with the Originating Lender's rights and obligations under this
Agreement and the other Loan Documents, (iv) no Lender shall transfer or grant
any participating interest under which the Participant has the right to approve
any amendment to, or
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any consent or waiver with respect to, this Agreement or any other Loan
Document, except to the extent such amendment to, or consent or waiver with
respect to this Agreement or of any other Loan Document would (A) extend the
final maturity date of the Obligations hereunder in which such Participant is
participating, (B) reduce the interest rate applicable to the Obligations
hereunder in which such Participant is participating, (C) release all or a
material portion of the Collateral or guaranties (except to the extent expressly
provided herein or in any of the Loan Documents) supporting the Obligations
hereunder in which such Participant is participating, (D) postpone the payment
of, or reduce the amount of, the interest or fees payable to such Participant
through such Lender, or (E) change the amount or due dates of scheduled
principal repayments or prepayments or premiums, and (v) all amounts payable by
Borrowers hereunder shall be determined as if such Lender had not sold such
participation, except that, if amounts outstanding under this Agreement are due
and unpaid, or shall have been declared or shall have become due and payable
upon the occurrence of an Event of Default, each Participant shall be deemed to
have the right of set-off in respect of its participating interest in amounts
owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement. The rights of any Participant only shall be derivative through the
Originating Lender with whom such Participant participates and no Participant
shall have any rights under this Agreement or the other Loan Documents or any
direct rights as to the other Lenders, Agent, Borrowers, the Collections, the
Collateral, or otherwise in respect of the Obligations. No Participant shall
have the right to participate directly in the making of decisions by the Lenders
among themselves.
(f) In connection with any such assignment or participation or
proposed assignment or participation, a Lender may disclose all documents and
information which it now or hereafter may have relating to Borrowers or
Borrowers' business.
(g) Any other provision in this Agreement notwithstanding, any
Lender may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement in favor of any
Federal Reserve Bank in accordance with Regulation A of the Federal Reserve Bank
or U.S. Treasury Regulation 31 CFR Section 203.14, and such Federal Reserve Bank
may enforce such pledge or security interest in any manner permitted under
applicable law.
14.2 SUCCESSORS. Subject to the conditions and limitations set forth in
Section 14.1, this Agreement shall bind and inure to the benefit of the
respective successors and assigns of each of the parties; provided, however,
that Borrowers may not assign this Agreement or any rights or duties hereunder
without the Lenders' prior written consent and any prohibited assignment shall
be absolutely void ab initio. No consent to assignment by the Lenders shall
release any Borrower from its Obligations. A Lender may assign this Agreement
and the other Loan Documents and its rights and duties hereunder and thereunder
pursuant to Section 14.1 hereof and, except as expressly required pursuant to
Section 14.1 hereof, no consent or approval by any Borrower is required in
connection with any such assignment.
15. AMENDMENTS; WAIVERS.
15.1 AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by
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Borrowers therefrom, shall be effective unless the same shall be in writing and
signed by the Required Lenders (or by Agent at the written request of the
Required Lenders) and Administrative Borrower (on behalf of all Borrowers) and
then any such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, that no such
waiver, amendment, or consent shall, unless in writing and signed by all of the
Lenders affected thereby and Administrative Borrower (on behalf of all
Borrowers) and acknowledged by Agent, do any of the following:
(a) increase or extend any Commitment of any Lender,
(b) postpone or delay any date fixed by this Agreement or any other
Loan Document for any payment of principal, interest, fees, or other amounts due
hereunder or under any other Loan Document,
(c) reduce the principal of, or the rate of interest on, any loan or
other extension of credit hereunder, or reduce any fees or other amounts payable
hereunder or under any other Loan Document,
(d) change the percentage of the Commitments that is required to
take any action hereunder,
(e) amend this Section or any provision of the Agreement providing
for consent or other action by all Lenders,
(f) release Collateral other than as permitted by Section 16.12,
(g) change the definition of "Required Lenders",
(h) contractually subordinate any of the Agent's Liens,
(i) release Borrower from any obligation for the payment of money,
or
(j) change the definition of Borrowing Base or the definitions of
Eligible Accounts, Eligible Inventory, Maximum Revolver Amount, or Term Loan
Amount, or
(k) amend any of the provisions of Section 16.
and, provided further, however, that no amendment, waiver or consent shall,
unless in writing and signed by Agent, Issuing Lender, or Swing Lender, as
applicable, affect the rights or duties of Agent, Issuing Lender, or Swing
Lender, as applicable, under this Agreement or any other Loan Document. The
foregoing notwithstanding, any amendment, modification, waiver, consent,
termination, or release of, or with respect to, any provision of this Agreement
or any other Loan Document that relates only to the relationship of the Lender
Group among themselves, and that does not affect the rights or obligations of
Borrowers, shall not require consent by or the agreement of Borrowers.
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15.2 REPLACEMENT OF HOLDOUT LENDER.
(a) If any action to be taken by the Lender Group or Agent hereunder
requires the unanimous consent, authorization, or agreement of all Lenders, and
one of more Lenders (each, a "Holdout Lender") fail to give their consent,
authorization, or agreement, then Agent, upon at least 5 Business Days prior
irrevocable notice to some or all such Holdout Lenders, may permanently replace
the Holdout Lenders to whom such notice was given with one or more substitute
Lenders (each, a "Replacement Lender"), and the replaced Holdout Lenders shall
have no right to refuse to be replaced hereunder. Such notice to replace a
Holdout Lender shall specify an effective date for such replacement, which date
shall not be later than 15 Business Days after the date such notice is given.
(b) Prior to the effective date of such replacement, each replaced
Holdout Lender and each Replacement Lender shall execute and deliver an
Assignment and Acceptance Agreement, subject only to each such Holdout Lender
being repaid its share of the outstanding Obligations (including an assumption
of its Pro Rata Share of the Risk Participation Liability) without any premium
or penalty of any kind whatsoever. If a Holdout Lender shall refuse or fail to
execute and deliver any such Assignment and Acceptance Agreement prior to the
effective date of such replacement, such Holdout Lender shall be deemed to have
executed and delivered such Assignment and Acceptance Agreement. The replacement
of any Holdout Lender shall be made in accordance with the terms of Section
14.1. Until such time as the Replacement Lenders shall have acquired all of the
Obligations, the Commitments, and the other rights and obligations of a replaced
Holdout Lender hereunder and under the other Loan Documents, the Holdout Lender
shall remain obligated to make the Holdout Lender's Pro Rata Share of Advances
and to purchase a participation in each Letter of Credit, in an amount equal to
its Pro Rata Share of the Risk Participation Liability of such Letter of Credit.
15.3 NO WAIVERS; CUMULATIVE REMEDIES. No failure by Agent or any Lender
to exercise any right, remedy, or option under this Agreement or any other Loan
Document, or delay by Agent or any Lender in exercising the same, will operate
as a waiver thereof. No waiver by Agent or any Lender will be effective unless
it is in writing, and then only to the extent specifically stated. No waiver by
Agent or any Lender on any occasion shall affect or diminish Agent's and each
Lender's rights thereafter to require strict performance by Borrowers of any
provision of this Agreement. Agent's and each Lender's rights under this
Agreement and the other Loan Documents will be cumulative and not exclusive of
any other right or remedy that Agent or any Lender may have.
16. AGENT; THE LENDER GROUP.
16.1 APPOINTMENT AND AUTHORIZATION OF AGENT. Each Lender hereby
designates and appoints U.S. Bank as its representative under this Agreement and
the other Loan Documents and each Lender hereby irrevocably authorizes Agent to
take such action on its behalf under the provisions of this Agreement and each
other Loan Document and to exercise such powers and perform such duties as are
expressly delegated to Agent by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto. Agent
agrees to act as such on the express conditions contained in this Section 16.
The provisions of this Section 16 are solely for the benefit of Agent, and the
Lenders, and Borrowers shall have no
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rights as a third party beneficiary of any of the provisions contained herein.
Any provision to the contrary contained elsewhere in this Agreement or in any
other Loan Document notwithstanding, Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall Agent have
or be deemed to have any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Loan Document or otherwise exist
against Agent; it being expressly understood and agreed that the use of the word
"Agent" is for convenience only, that U.S. Bank is merely the representative of
the Lenders, and only has the contractual duties set forth herein. Except as
expressly otherwise provided in this Agreement, Agent shall have and may use its
sole discretion with respect to exercising or refraining from exercising any
discretionary rights or taking or refraining from taking any actions that Agent
expressly is entitled to take or assert under or pursuant to this Agreement and
the other Loan Documents. Without limiting the generality of the foregoing, or
of any other provision of the Loan Documents that provides rights or powers to
Agent, Lenders agree that Agent shall have the right to exercise the following
powers as long as this Agreement remains in effect: (a) maintain, in accordance
with its customary business practices, ledgers and records reflecting the status
of the Obligations, the Collateral, the Collections, and related matters, (b)
execute or file any and all financing or similar statements or notices,
amendments, renewals, supplements, documents, instruments, proofs of claim,
notices and other written agreements with respect to the Loan Documents, (c)
make Advances, for itself or on behalf of Lenders as provided in the Loan
Documents, (d) exclusively receive, apply, and distribute the Collections as
provided in the Loan Documents, (e) open and maintain such bank accounts and
cash management accounts as Agent deems necessary and appropriate in accordance
with the Loan Documents for the foregoing purposes with respect to the
Collateral and the Collections, (f) perform, exercise, and enforce any and all
other rights and remedies of the Lender Group with respect to Borrowers, the
Obligations, the Collateral, the Collections, or otherwise related to any of
same as provided in the Loan Documents, and (g) incur and pay such Lender Group
Expenses as Agent may deem necessary or appropriate for the performance and
fulfillment of its functions and powers pursuant to the Loan Documents.
16.2 DELEGATION OF DUTIES. Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects as
long as such selection was made without gross negligence or willful misconduct.
16.3 LIABILITY OF AGENT. None of the Agent-Related Persons shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of the Lenders for any recital,
statement, representation or warranty made by any Borrower or any Subsidiary or
Affiliate of any Borrower, or any officer or director thereof, contained in this
Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by Agent
under or in connection with, this Agreement or any other Loan Document, or the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of any Borrower or any
other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Lender
to ascertain or to inquire as to
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the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
Books or properties of Borrowers or the books or records or properties of any of
Borrowers' Subsidiaries or Affiliates.
16.4 RELIANCE BY AGENT. Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent, or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to Borrowers
or counsel to any Lender), independent accountants and other experts selected by
Agent. Agent shall be fully justified in failing or refusing to take any action
under this Agreement or any other Loan Document unless Agent shall first receive
such advice or concurrence of the Lenders as it deems appropriate and until such
instructions are received, Agent shall act, or refrain from acting, as it deems
advisable. If Agent so requests, it shall first be indemnified to its reasonable
satisfaction by Lenders against any and all liability and expense that may be
incurred by it by reason of taking or continuing to take any such action. Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement or any other Loan Document in accordance with a request or
consent of the Lenders and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Lenders.
16.5 NOTICE OF DEFAULT OR EVENT OF DEFAULT. Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest, fees, and
expenses required to be paid to Agent for the account of the Lenders, except
with respect to Events of Default of which Agent has actual knowledge, unless
Agent shall have received written notice from a Lender or Administrative
Borrower referring to this Agreement, describing such Default or Event of
Default, and stating that such notice is a "notice of default." Agent promptly
will notify the Lenders of its receipt of any such notice or of any Event of
Default of which Agent has actual knowledge. If any Lender obtains actual
knowledge of any Event of Default, such Lender promptly shall notify the other
Lenders and Agent of such Event of Default. Each Lender shall be solely
responsible for giving any notices to its Participants, if any. Subject to
Section 16.4, Agent shall take such action with respect to such Default or Event
of Default as may be requested by the Required Lenders in accordance with
Section 9; provided, however, that unless and until Agent has received any such
request, Agent may (but shall not be obligated to) take such action, or refrain
from taking such action, with respect to such Default or Event of Default as it
shall deem advisable.
16.6 CREDIT DECISION. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by Agent hereinafter taken, including any review of the affairs of Borrowers
and their Subsidiaries or Affiliates, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender. Each
Lender represents to Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of Borrowers and any other Person (other than the Lender Group)
party to a Loan Document, and all applicable bank regulatory laws relating to
the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to Borrowers. Each Lender also represents
that it will, independently and
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without reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of Borrowers and
any other Person (other than the Lender Group) party to a Loan Document. Except
for notices, reports, and other documents expressly herein required to be
furnished to the Lenders by Agent, Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of Borrowers and any other Person party to a Loan
Document that may come into the possession of any of the Agent-Related Persons.
16.7 COSTS AND EXPENSES; INDEMNIFICATION. Agent may incur and pay Lender
Group Expenses to the extent Agent reasonably deems necessary or appropriate for
the performance and fulfillment of its functions, powers, and obligations
pursuant to the Loan Documents, including court costs, reasonable attorneys fees
and expenses, costs of collection by outside collection agencies and auctioneer
fees and costs of security guards or insurance premiums paid to maintain the
Collateral, whether or not Borrowers are obligated to reimburse Agent or Lenders
for such expenses pursuant to the Loan Agreement or otherwise. Agent is
authorized and directed to deduct and retain sufficient amounts from Collections
received by Agent to reimburse Agent for such out-of-pocket costs and expenses
prior to the distribution of any amounts to Lenders. In the event Agent is not
reimbursed for such costs and expenses from Collections received by Agent, each
Lender hereby agrees that it is and shall be obligated to pay to or reimburse
Agent for the amount of such Lender's Pro Rata Share thereof. Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand the Agent-Related Persons (to the extent not reimbursed by or on
behalf of Borrowers and without limiting the obligation of Borrowers to do so),
according to their Pro Rata Shares, from and against any and all Indemnified
Liabilities; provided, however, that no Lender shall be liable for the payment
to any Agent-Related Person of any portion of such Indemnified Liabilities
resulting solely from such Person's gross negligence or willful misconduct nor
shall any Lender be liable for the obligations of any Defaulting Lender in
failing to make an Advance or other extension of credit hereunder. Without
limitation of the foregoing, each Lender shall reimburse Agent upon demand for
such Lender's ratable share of any costs or out-of-pocket expenses (including
attorneys fees and expenses) incurred by Agent in connection with the
preparation, execution, delivery, administration, modification, amendment, or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that Agent is not reimbursed for such expenses by or on behalf of
Borrowers. The undertaking in this Section shall survive the payment of all
Obligations hereunder and the resignation or replacement of Agent.
16.8 AGENT IN INDIVIDUAL CAPACITY. U.S. Bank and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in, and generally engage in any kind of banking, trust,
financial advisory, underwriting, or other business with Borrowers and their
Subsidiaries and Affiliates and any other Person (other than the Lender Group)
party to any Loan Documents as though U.S. Bank were not Agent hereunder, and,
in each case, without notice to or consent of the other members of the Lender
Group. The
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other members of the Lender Group acknowledge that, pursuant to such activities,
U.S. Bank or its Affiliates may receive information regarding Borrowers or their
Affiliates and any other Person (other than the Lender Group) party to any Loan
Documents that is subject to confidentiality obligations in favor of Borrowers
or such other Person and that prohibit the disclosure of such information to the
Lenders, and the Lenders acknowledge that, in such circumstances (and in the
absence of a waiver of such confidentiality obligations, which waiver Agent will
use its reasonable best efforts to obtain), Agent shall not be under any
obligation to provide such information to them. The terms "Lender" and "Lenders"
include U.S. Bank in its individual capacity.
16.9 SUCCESSOR AGENT. Agent may resign as Agent upon 45 days notice to
the Lenders. If Agent resigns under this Agreement, the Required Lenders shall
appoint a successor Agent for the Lenders. If no successor Agent is appointed
prior to the effective date of the resignation of Agent, Agent may appoint,
after consulting with the Lenders, a successor Agent. If Agent has materially
breached or failed to perform any material provision of this Agreement or of
applicable law, the Required Lenders may agree in writing to remove and replace
Agent with a successor Agent from among the Lenders. In any such event, upon the
acceptance of its appointment as successor Agent hereunder, such successor Agent
shall succeed to all the rights, powers, and duties of the retiring Agent and
the term "Agent" shall mean such successor Agent and the retiring Agent's
appointment, powers, and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Section 16 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement. If no successor Agent has accepted
appointment as Agent by the date which is 45 days following a retiring Agent's
notice of resignation, the retiring Agent's resignation shall nevertheless
thereupon become effective and the Lenders shall perform all of the duties of
Agent hereunder until such time, if any, as the Lenders appoint a successor
Agent as provided for above. Agent's resignation as Agent shall not affect its
status as a Lender.
16.10 LENDER IN INDIVIDUAL CAPACITY. Any Lender and its respective
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with
Borrowers and their Subsidiaries and Affiliates and any other Person (other than
the Lender Group) party to any Loan Documents as though such Lender were not a
Lender hereunder without notice to or consent of the other members of the Lender
Group. The other members of the Lender Group acknowledge that, pursuant to such
activities, such Lender and its respective Affiliates may receive information
regarding Borrowers or their Affiliates and any other Person (other than the
Lender Group) party to any Loan Documents that is subject to confidentiality
obligations in favor of Borrowers or such other Person and that prohibit the
disclosure of such information to the Lenders, and the Lenders acknowledge that,
in such circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver such Lender will use its reasonable best efforts to
obtain), such Lender not shall be under any obligation to provide such
information to them. With respect to the Swing Loans and Agent Advances, Swing
Lender shall have the same rights and powers under this Agreement as any other
Lender and may exercise the same as though it were not the sub-agent of the
Agent.
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16.11 WITHHOLDING TAXES.
(a) If any Lender is a "foreign corporation, partnership or trust"
within the meaning of the IRC and such Lender claims exemption from, or a
reduction of, U.S. withholding tax under Sections 1441 or 1442 of the IRC, such
Lender agrees with and in favor of Agent and Borrowers, to deliver to Agent and
Administrative Borrower:
(i) if such Lender claims an exemption from withholding tax
pursuant to its portfolio interest exception, (a) a statement of the Lender,
signed under penalty of perjury, that it is not a (I) a "bank" as described in
Section 881(c)(3)(A) of the IRC, (II) a 10% shareholder (within the meaning of
Section 881(c)(3)(B) of the IRC), or (III) a controlled foreign corporation
described in Section 881(c)(3)(C) of the IRC, and (B) a properly completed IRS
Form W-8BEN, or applicable successor forms or comply with applicable successor
requirements before the first payment of any interest under this Agreement and
at any other time reasonably requested by Agent or Administrative Borrower;
(ii) if such Lender claims an exemption from, or a reduction of,
withholding tax under a United States tax treaty, properly completed IRS Form
W-8BEN or applicable successor forms before the first payment of any interest
under this Agreement and at any other time reasonably requested by Agent or
Administrative Borrower;
(iii) if such Lender claims that interest paid under this
Agreement is exempt from United States withholding tax because it is effectively
connected with a United States trade or business of such Lender, two properly
completed and executed copies of IRS Form W-8ECI and IRS Form W-9 before the
first payment of any interest is due under this Agreement and at any other time
reasonably requested by Agent or Administrative Borrower;
(iv) such other form or forms as may be required under the IRC
or other laws of the United States as a condition to exemption from, or
reduction of, United States withholding tax.
Such Lender agrees promptly to notify Agent and Administrative Borrower of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction.
(b) If any Lender claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form W-8BEN
and such Lender sells, assigns, grants a participation in, or otherwise
transfers all or part of the Obligations of Borrowers to such Lender, such
Lender agrees to notify Agent of the percentage amount in which it is no longer
the beneficial owner of Obligations of Borrowers to such Lender. To the extent
of such percentage amount, Agent will treat such Lender's IRS Form W-8BEN as no
longer valid, provided, further that such Lender undertakes sole responsibility
for complying with IRC Sections 1441 and 1442.
(c) If any Lender is entitled to a reduction in the applicable
withholding tax, Agent or Administrative Borrower, as the case may be, may
withhold from any interest payment to such Lender an amount equivalent to the
applicable withholding tax after taking into account such reduction. If the
forms or other documentation required by subsection (a) of this Section are not
delivered to Agent, then Agent or Administrative Borrower, as the case may be,
may withhold from any interest payment to such Lender not providing such forms
or other
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documentation an amount equivalent to the applicable withholding tax. Such
Lender shall not be entitled to indemnification under this Agreement with
respect to such taxes withheld.
(d) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that Agent or the Administrative
Borrower did not properly withhold tax from amounts paid to or for the account
of any Lender (because the appropriate form was not delivered, was not properly
executed, or because such Lender failed to notify Agent (and concurrently the
Administrative Borrower) of a change in circumstances which rendered the
exemption from, or reduction of, withholding tax ineffective, or for any other
reason) such Lender shall indemnify and hold Agent and the Administrative
Borrower harmless for all amounts paid, directly or indirectly, by Agent or the
Administrative Borrower as tax or otherwise, including penalties and interest,
and including any taxes imposed by any jurisdiction on the amounts payable to
Agent under this Section, together with all costs and expenses (including
attorneys fees and expenses). The obligation of the Lenders under this
subsection shall survive the payment of all Obligations and the resignation or
replacement of Agent.
(e) Unless otherwise required by applicable law other than for
Taxes, all payments made by Borrowers hereunder or under any note or other Loan
Document will be made without setoff, counterclaim, or other defense. All such
payments will be made free and clear of, and without deduction or withholding
for, any present or future taxes, levies, imposts, duties, fees, assessments or
other charges of whatever nature now or hereafter imposed by any jurisdiction
(other than the United States) or by any political subdivision or taxing
authority thereof or therein (other than of the United States) with respect to
such payments (but excluding, any tax imposed by any jurisdiction or by any
political subdivision or taxing authority thereof or therein (i) measured by or
based on the net income or net profits of a Lender, or (ii) to the extent that
such tax results from a change in the circumstances of the Lender, including a
change in the residence, place of organization, or principal place of business
of the Lender, or a change in the branch or lending office of the Lender
participating in the transactions set forth herein) and all interest, penalties
or similar liabilities with respect thereto (all such non-excluded taxes,
levies, imposts, duties, fees, assessments or other charges being referred to
collectively as "Taxes"). If any Taxes are so levied or imposed, each Borrower
agrees to pay the full amount of such Taxes, and such additional amounts as may
be necessary so that every payment of all amounts due under this Agreement or
under any note, including any amount paid pursuant to this Section 16.11(e)
after withholding or deduction for or on account of any Taxes, will not be less
than the amount provided for herein; provided, however, that Borrowers shall not
be required to increase any such amounts payable to Agent or any Lender (i) that
is not organized under the laws of the United States, if such Person fails to
comply with the other requirements of this Section 16.11, or (ii) if the
increase in such amount payable results from Agent's or such Lender's own
willful misconduct or gross negligence. Borrowers will furnish to Agent as
promptly as possible after the date the payment of any Taxes is due pursuant to
applicable law certified copies of tax receipts evidencing such payment by
Borrowers.
(f) If any Lender requests compensation under Section 16.11(e) or if
the Borrower is required to pay any additional amount to any Governmental
Authority for the account of any Lender pursuant to Section 16.11(e), the
Borrower shall have the right, upon notice to such Lender, to (i) require such
Lender to assign to one or more assignees specified by the Borrower who are
willing to so purchase from such Lender all, or any portion thereof, of
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such Lender's rights and obligations under this Agreement provided that such
assignee or assignees shall pay to such Lender, in consideration for such
assignment, an amount equal to all principal, interest, fees, and other amounts
owing to such Lender that is allocable to the portion of such rights and
obligations being assigned as of the date of such assignment, or (ii) require
such Lender to use reasonable efforts to designate a different lending office
for funding or booking its Loans (or any participation therein) hereunder or to
assign its rights and obligations hereunder to another of its offices, branches
or affiliates, if in the judgment of such Lender, such designation or assignment
(x) would eliminate or reduce amounts payable pursuant to Section 16.11(e), in
the future and (y) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. With respect
to the foregoing clause (iii) the Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(g) Each Lender agrees that it will (i) take all reasonable actions
requested by the Borrowers that are without material cost or risk to such Lender
to maintain all exemptions, if any, available to it from withholding taxes
(whether available by treaty or existing administrative waiver), and (ii) to the
extent reasonable and without material cost or risk to it, otherwise cooperate
with the Borrowers to minimize any amounts payable by the Borrowers under
Section 16.11. In the event that any payment of additional amounts to or on
behalf of such Lender under Section 16.11(e) hereof, results in a tax credit or
deduction to such Lender, the Lender shall promptly notify the Administrative
Borrower and pay to the Administrative Borrower an amount equal to any actual
tax benefit resulting from such credit or deduction.
16.12 COLLATERAL MATTERS.
(a) The Lenders hereby irrevocably authorize Agent, at its option
and in its sole discretion, to release any Lien on any Collateral (i) upon the
termination of the Commitments and payment and satisfaction in full by Borrowers
of all Obligations, (ii) constituting property being sold or disposed of if a
release is required or desirable in connection therewith and if Administrative
Borrower certifies to Agent that the sale or disposition is permitted under
Section 7.4 of this Agreement or the other Loan Documents (and Agent may rely
conclusively on any such certificate, without further inquiry), (iii)
constituting property in which no Borrower owned any interest at the time the
security interest was granted or at any time thereafter, or (iv) constituting
property leased to a Borrower under a lease that has expired or is terminated in
a transaction permitted under this Agreement. Except as provided above, Agent
will not execute and deliver a release of any Lien on any Collateral without the
prior written authorization of (y) if the release is of all or substantially all
of the Collateral, all of the Lenders, or otherwise, the Required Lenders. Upon
request by Agent or Administrative Borrower at any time, the Lenders will
confirm in writing Agent's authority to release any such Liens on particular
types or items of Collateral pursuant to this Section 16.12; provided, however,
that (1) Agent shall not be required to execute any document necessary to
evidence such release on terms that, in Agent's opinion, would expose Agent to
liability or create any obligation or entail any consequence other than the
release of such Lien without recourse, representation, or warranty, and (2) such
release shall not in any manner discharge, affect, or impair the Obligations or
any Liens (other than those expressly being released) upon (or obligations of
Borrowers in respect of) all interests retained by Borrowers, including, the
proceeds of any sale, all of which shall continue to constitute part of the
Collateral.
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(b) Agent shall have no obligation whatsoever to any of the Lenders
to assure that the Collateral exists or is owned by Borrowers or is cared for,
protected, or insured or has been encumbered, or that the Agent's Liens have
been properly or sufficiently or lawfully created, perfected, protected, or
enforced or are entitled to any particular priority, or to exercise at all or in
any particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to Agent pursuant to any of the Loan Documents, it being understood
and agreed that in respect of the Collateral, or any act, omission, or event
related thereto, subject to the terms and conditions contained herein, Agent may
act in any manner it may deem appropriate, in its sole discretion given Agent's
own interest in the Collateral in its capacity as one of the Lenders and that
Agent shall have no other duty or liability whatsoever to any Lender as to any
of the foregoing, except as otherwise provided herein.
16.13 RESTRICTIONS ON ACTIONS BY LENDERS; SHARING OF PAYMENTS.
(a) Each of the Lenders agrees that it shall not, without the
express consent of Agent, and that it shall, to the extent it is lawfully
entitled to do so, upon the request of Agent, set off against the Obligations,
any amounts owing by such Lender to Borrowers or any deposit accounts of
Borrowers now or hereafter maintained with such Lender. Each of the Lenders
further agrees that it shall not, unless specifically requested to do so by
Agent, take or cause to be taken any action, including, the commencement of any
legal or equitable proceedings, to foreclose any Lien on, or otherwise enforce
any security interest in, any of the Collateral the purpose of which is, or
could be, to give such Lender any preference or priority against the other
Lenders with respect to the Collateral.
(b) If, at any time or times any Lender shall receive (i) by
payment, foreclosure, setoff, or otherwise, any proceeds of Collateral or any
payments with respect to the Obligations arising under, or relating to, this
Agreement or the other Loan Documents, except for any such proceeds or payments
received by such Lender from Agent pursuant to the terms of this Agreement, or
(ii) payments from Agent in excess of such Lender's ratable portion of all such
distributions by Agent, such Lender promptly shall (1) turn the same over to
Agent, in kind, and with such endorsements as may be required to negotiate the
same to Agent, or in immediately available funds, as applicable, for the account
of all of the Lenders and for application to the Obligations in accordance with
the applicable provisions of this Agreement, or (2) purchase, without recourse
or warranty, an undivided interest and participation in the Obligations owed to
the other Lenders so that such excess payment received shall be applied ratably
as among the Lenders in accordance with their Pro Rata Shares; provided,
however, that if all or part of such excess payment received by the purchasing
party is thereafter recovered from it, those purchases of participations shall
be rescinded in whole or in part, as applicable, and the applicable portion of
the purchase price paid therefor shall be returned to such purchasing party, but
without interest except to the extent that such purchasing party is required to
pay interest in connection with the recovery of the excess payment.
16.14 AGENCY FOR PERFECTION. Agent hereby appoints each other Lender as
its agent (and each Lender hereby accepts such appointment) for the purpose of
perfecting the Agent's Liens in assets which, in accordance with Article 9 of
the UCC can be perfected only by possession. Should any Lender obtain possession
of any such Collateral, such Lender shall
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notify Agent thereof, and, promptly upon Agent's request therefor shall deliver
such Collateral to Agent or in accordance with Agent's instructions.
16.15 PAYMENTS BY AGENT TO THE LENDERS. All payments to be made by Agent
to the Lenders shall be made by bank wire transfer or internal transfer of
immediately available funds pursuant to such wire transfer instructions as each
party may designate for itself by written notice to Agent. Concurrently with
each such payment, Agent shall identify whether such payment (or any portion
thereof) represents principal, premium, or interest of the Obligations.
16.16 CONCERNING THE COLLATERAL AND RELATED LOAN DOCUMENTS. Each member
of the Lender Group authorizes and directs Agent to enter into this Agreement
and the other Loan Documents relating to the Collateral, for the benefit of the
Lender Group. Each member of the Lender Group agrees that any action taken by
Agent in accordance with the terms of this Agreement or the other Loan Documents
relating to the Collateral and the exercise by Agent of its powers set forth
therein or herein, together with such other powers that are reasonably
incidental thereto, shall be binding upon all of the Lenders.
16.17 FIELD AUDITS AND EXAMINATION REPORTS; CONFIDENTIALITY; DISCLAIMERS
BY LENDERS; OTHER REPORTS AND INFORMATION. By becoming a party to this
Agreement, each Lender:
(a) is deemed to have requested that Agent furnish such Lender,
promptly after it becomes available, a copy of each field audit or examination
report (each a "Report" and collectively, "Reports") prepared by Agent, and
Agent shall so furnish each Lender with such Reports,
(b) expressly agrees and acknowledges that Agent does not (i) make
any representation or warranty as to the accuracy of any Report, and (ii) shall
not be liable for any information contained in any Report,
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that Agent or other party performing any
audit or examination will inspect only specific information regarding Borrowers
and will rely significantly upon the Books, as well as on representations of
Borrowers' personnel,
(d) agrees to keep all Reports and other non-public information
regarding Borrowers and their Subsidiaries and their operations, assets, and
existing and contemplated business plans in a confidential manner; it being
understood and agreed by Borrowers that in any event such Lender may make
disclosures (a) to counsel for and other advisors, accountants, and auditors to
such Lender, (b) reasonably required by any bona fide potential or actual
Assignee or Participant in connection with any contemplated or actual assignment
or transfer by such Lender of an interest herein or any participation interest
in such Lender's rights hereunder, (c) of information that has become public by
disclosures made by Persons other than such Lender, its Affiliates, assignees,
transferees, or Participants, or (d) as required or requested by any court,
governmental or administrative agency, pursuant to any subpoena or other legal
process, or by any law, statute, regulation, or court order; provided, however,
that, unless prohibited by applicable law, statute, regulation, or court order,
such Lender shall notify Administrative
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Borrower of any request by any court, governmental or administrative agency, or
pursuant to any subpoena or other legal process for disclosure of any such
non-public material information concurrent with, or where practicable, prior to
the disclosure thereof, and
(e) without limiting the generality of any other indemnification
provision contained in this Agreement, agrees: (i) to hold Agent and any such
other Lender preparing a Report harmless from any action the indemnifying Lender
may take or conclusion the indemnifying Lender may reach or draw from any Report
in connection with any loans or other credit accommodations that the
indemnifying Lender has made or may make to Borrowers, or the indemnifying
Lender's participation in, or the indemnifying Lender's purchase of, a loan or
loans of Borrowers, and (ii) to pay and protect, and indemnify, defend and hold
Agent, and any such other Lender preparing a Report harmless from and against,
the claims, actions, proceedings, damages, costs, expenses, and other amounts
(including, attorneys fees and costs) incurred by Agent and any such other
Lender preparing a Report as the direct or indirect result of any third parties
who might obtain all or part of any Report through the indemnifying Lender.
In addition to the foregoing: (x) any Lender may from time to time request of
Agent in writing that Agent provide to such Lender a copy of any report or
document provided by Borrowers to Agent that has not been contemporaneously
provided by Borrowers to such Lender, and, upon receipt of such request, Agent
promptly shall provide a copy of same to such Lender, (y) to the extent that
Agent is entitled, under any provision of the Loan Documents, to request
additional reports or information from Borrowers, any Lender may, from time to
time, reasonably request Agent to exercise such right as specified in such
Lender's notice to Agent, whereupon Agent promptly shall request of
Administrative Borrower the additional reports or information reasonably
specified by such Lender, and, upon receipt thereof from Administrative
Borrower, Agent promptly shall provide a copy of same to such Lender, and (z)
any time that Agent renders to Administrative Borrower a statement regarding the
Loan Account, Agent shall send a copy of such statement to each Lender.
16.18 SEVERAL OBLIGATIONS; NO LIABILITY. Notwithstanding that certain of
the Loan Documents now or hereafter may have been or will be executed only by or
in favor of Agent in its capacity as such, and not by or in favor of the
Lenders, any and all obligations on the part of Agent (if any) to make any
credit available hereunder shall constitute the several (and not joint)
obligations of the respective Lenders on a ratable basis, according to their
respective Commitments, to make an amount of such credit not to exceed, in
principal amount, at any one time outstanding, the amount of their respective
Commitments. Nothing contained herein shall confer upon any Lender any interest
in, or subject any Lender to any liability for, or in respect of, the business,
assets, profits, losses, or liabilities of any other Lender. Each Lender shall
be solely responsible for notifying its Participants of any matters relating to
the Loan Documents to the extent any such notice may be required, and no Lender
shall have any obligation, duty, or liability to any Participant of any other
Lender. Except as provided in Section 16.7, no member of the Lender Group shall
have any liability for the acts or any other member of the Lender Group. No
Lender shall be responsible to any Borrower or any other Person for any failure
by any other Lender to fulfill its obligations to make credit available
hereunder, nor to advance for it or on its behalf in connection with its
Commitment, nor to take any other action on its behalf hereunder or in
connection with the financing contemplated herein.
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16.19 LEGAL REPRESENTATION OF AGENT. In connection with the negotiation,
drafting, and execution of this Agreement and the other Loan Documents, or in
connection with future legal representation relating to loan administration,
amendments, modifications, waivers, or enforcement of remedies, Buchalter,
Nemer, Fields & Younger ("BNFY") only has represented and only shall represent
U.S. Bank in its capacity as Agent and as a Lender. Each other Lender hereby
acknowledges that BNFY does not represent it in connection with any such
matters.
17. GENERAL PROVISIONS.
17.1 EFFECTIVENESS. This Agreement shall be binding and deemed effective
when executed by Borrowers, Agent, and each Lender whose signature is provided
for on the signature pages hereof.
17.2 SECTION HEADINGS. Headings and numbers have been set forth herein
for convenience only. Unless the contrary is compelled by the context,
everything contained in each Section applies equally to this entire Agreement.
17.3 INTERPRETATION. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against the Lender Group or
Borrowers, whether under any rule of construction or otherwise. On the contrary,
this Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.
17.4 SEVERABILITY OF PROVISIONS. Each provision of this Agreement shall
be severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.
17.5 AMENDMENTS IN WRITING. This Agreement only can be amended by a
writing signed by Agent (on behalf of the requisite Lenders) and Borrowers.
17.6 COUNTERPARTS; TELEFACSIMILE EXECUTION. This Agreement may be
executed in any number of counterparts and by different parties on separate
counterparts, each of which, when executed and delivered, shall be deemed to be
an original, and all of which, when taken together, shall constitute but one and
the same Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile shall be equally as effective as delivery of an original executed
counterpart of this Agreement. Any party delivering an executed counterpart of
this Agreement by telefacsimile also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement. The foregoing shall apply to each other Loan Document mutatis
mutandis.
17.7 REVIVAL AND REINSTATEMENT OF OBLIGATIONS. If the incurrence or
payment of the Obligations by any Borrower or the transfer to the Lender Group
of any property should for any reason subsequently be declared to be void or
voidable under any state or federal law relating to creditors' rights, including
provisions of the Bankruptcy Code relating to fraudulent conveyances,
preferences, or other voidable or recoverable payments of money or transfers of
property (collectively, a "Voidable Transfer"), and if the Lender Group is
required to repay or restore, in whole or in part, any such Voidable Transfer,
or elects to do so upon the reasonable
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advice of its counsel, then, as to any such Voidable Transfer, or the amount
thereof that the Lender Group is required or elects to repay or restore, and as
to all reasonable costs, expenses, and attorneys fees of the Lender Group
related thereto, the liability of Borrowers automatically shall be revived,
reinstated, and restored and shall exist as though such Voidable Transfer had
never been made.
17.8 INTEGRATION. This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.
17.9 PARENT AS AGENT FOR BORROWERS. Each Borrower hereby irrevocably
appoints Parent as the borrowing agent and attorney-in-fact for all Borrowers
(the "Administrative Borrower") which appointment shall remain in full force and
effect unless and until Agent shall have received prior written notice signed by
each Borrower that such appointment has been revoked and that another Borrower
has been appointed Administrative Borrower. Each Borrower hereby irrevocably
appoints and authorizes the Administrative Borrower (i) to provide Agent with
all notices with respect to the Term Loan, Advances, Letters of Credit, Forward
Foreign Exchange Contracts and all other notices and instructions under this
Agreement and (ii) to take such action as the Administrative Borrower deems
appropriate on its behalf to obtain the Term Loan, Advances, Letters of Credit
and Forward Foreign Exchange Contracts, and to exercise such other powers as are
reasonably incidental thereto to carry out the purposes of this Agreement. It is
understood that the handling of the Loan Account and Collateral of Borrowers in
a combined fashion, as more fully set forth herein, is done solely as an
accommodation to Borrowers in order to utilize the collective borrowing powers
of Borrowers in the most efficient and economical manner and at their request,
and that Lender Group shall not incur liability to any Borrower as a result
hereof. Each Borrower expects to derive benefit, directly or indirectly, from
the handling of the Loan Account and the Collateral in a combined fashion since
the successful operation of each Borrower is dependent on the continued
successful performance of the integrated group. To induce the Lender Group to do
so, and in consideration thereof, each Borrower hereby jointly and severally
agrees to indemnify each member of the Lender Group and hold each member of the
Lender Group harmless against any and all liability, expense, loss or claim of
damage or injury, made against the Lender Group by any Borrower or by any third
party whosoever, arising from or incurred by reason of (a) the handling of the
Loan Account and Collateral of Borrowers as herein provided, (b) the Lender
Group's relying on any instructions of the Administrative Borrower, or (c) any
other action taken by the Lender Group hereunder or under the other Loan
Documents, except that Borrowers will have no liability to the relevant
Agent-Related Person or Lender-Related Person under this Section 17.9 with
respect to any liability that has been finally determined by a court of
competent jurisdiction to have resulted solely from the gross negligence or
willful misconduct of such Agent-Related Person or Lender-Related Person, as the
case may be.
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17.10 EXECUTION BY DTM CORPORATION. Upon the consummation of the Merger,
the Parent will forthwith cause DTM Corporation to execute this Agreement in the
space provided below, to deliver a counterpart hereof to the Agent and to
deliver such other documents as shall be required to satisfy the conditions set
forth in Sections 3.1 and 3.2 as if DTM Corporation were an original party to
this Agreement.
[Signature page to follow.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered as of the date first above written.
3D SYSTEMS CORPORATION,
a Delaware corporation
as Administrative Borrower and as a Borrower
By: /s/ E. XXXXX XXXXXX
----------------------------------------
Title: Chief Financial Officer
-------------------------------------
3D SYSTEMS, INC.,
a California corporation
as a Borrower
By: /s/ E. XXXXX XXXXXX
----------------------------------------
Title: Chief Financial Officer
-------------------------------------
TIGER DEALS, INC.,
a Delaware corporation,
as a Borrower
By: /s/ E. XXXXX XXXXXX
----------------------------------------
Title: Chief Financial Officer
-------------------------------------
3D CAPITAL CORPORATION,
a California corporation
as a Borrower
By: /s/ E. XXXXX XXXXXX
----------------------------------------
Title: Vice President
-------------------------------------
DTM CORPORATION,
a Texas corporation,
As a Borrower effective upon consummation of
the Merger
By:
----------------------------------------
Title:
-------------------------------------
U.S. BANK NATIONAL ASSOCIATION,
as Agent and as a Lender
By: /s/ XXXXXXX X. XXX
----------------------------------------
Xxxxxxx X. Xxx, Vice President
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SCHEDULE C-1
COMMITMENTS
------------------------------------------------------------------------------------
REVOLVER TERM LOAN TOTAL
LENDER COMMITMENT COMMITMENT COMMITMENT
------------------------------------------------------------------------------------
U.S. Bank $___________ $___________ $__________
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
All Lenders $___________ $___________ $__________
------------------------------------------------------------------------------------
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TABLE OF CONTENTS
1. DEFINITIONS AND CONSTRUCTION........................................... 1
1.1 Definitions..................................................... 1
1.2 Accounting Terms................................................ 24
1.3 Code............................................................ 24
1.4 Construction.................................................... 24
1.5 Schedules and Exhibits.......................................... 25
2. LOAN AND TERMS OF PAYMENT.............................................. 25
2.1 Revolver Advances............................................... 25
2.2 Term Loan....................................................... 26
2.3 Borrowing Procedures and Settlements............................ 27
2.4 Payments........................................................ 33
2.5 Overadvances.................................................... 36
2.6 Interest Rates and Letter of Credit Fee: Rates, Payments, and
Calculations.................................................... 36
2.7 Cash Management................................................. 38
2.8 Crediting Payments; Float Charge................................ 39
2.9 Designated Account.............................................. 39
2.10 Maintenance of Loan Account; Statements of Obligations.......... 40
2.11 Fees............................................................ 40
2.12 Letters of Credit............................................... 41
2.13 Foreign Exchange Contracts...................................... 43
2.14 LIBOR Option.................................................... 44
2.15 Capital Requirements............................................ 45
2.16 Market Conditions............................................... 46
2.17 Joint and Several Liability of Borrowers........................ 46
3. CONDITIONS; TERM OF AGREEMENT.......................................... 49
3.1 Conditions Precedent to the Initial Extension of Credit......... 49
3.2 Conditions Subsequent to the Initial Extension of Credit........ 53
3.3 Conditions Precedent to all Extensions of Credit................ 53
3.4 Term............................................................ 54
3.5 Effect of Termination........................................... 54
3.6 Early Termination by Borrowers.................................. 54
4. CREATION OF SECURITY INTEREST.......................................... 54
4.1 Grant of Security Interest...................................... 54
4.2 Negotiable Collateral........................................... 55
4.3 Collection of Accounts, General Intangibles, and Negotiable
Collateral...................................................... 55
4.4 Delivery of Additional Documentation Required................... 55
4.5 Power of Attorney............................................... 56
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4.6 Right to Inspect................................................ 56
4.7 Control Agreements.............................................. 56
4.8 Release of Additional Collateral................................ 56
4.9 Limitation of Collateral relating to Foreign Subsidiaries....... 57
5. REPRESENTATIONS AND WARRANTIES......................................... 57
5.1 No Encumbrances................................................. 57
5.2 Eligible Accounts............................................... 57
5.3 Eligible Inventory.............................................. 58
5.4 Equipment....................................................... 58
5.5 Location of Inventory and Equipment............................. 58
5.6 Inventory Records............................................... 58
5.7 Location of Chief Executive Office; FEIN........................ 59
5.8 Due Organization and Qualification; Subsidiaries................ 59
5.9 Due Authorization; No Conflict.................................. 59
5.10 Litigation...................................................... 60
5.11 No Material Adverse Change...................................... 60
5.12 Fraudulent Transfer............................................. 60
5.13 Employee Benefits............................................... 61
5.14 Environmental Condition......................................... 61
5.15 Brokerage Fees.................................................. 61
5.16 Intellectual Property........................................... 61
5.17 Leases.......................................................... 61
5.18 DDAs............................................................ 61
5.19 Complete Disclosure............................................. 61
5.20 Indebtedness.................................................... 62
5.21 Acquisition..................................................... 62
6. AFFIRMATIVE COVENANTS.................................................. 62
6.1 Accounting System............................................... 62
6.2 Collateral Reporting............................................ 62
6.3 Financial Statements, Reports, Certificates..................... 63
6.4 [Intentionally Omitted]......................................... 65
6.5 Return.......................................................... 65
6.6 Maintenance of Properties....................................... 65
6.7 Taxes........................................................... 65
6.8 Insurance....................................................... 66
6.9 Location of Inventory and Equipment............................. 66
6.10 Compliance with Laws............................................ 67
6.11 Leases.......................................................... 67
6.12 Brokerage Commissions........................................... 67
6.13 Existence....................................................... 67
6.14 Environmental................................................... 67
6.15 Disclosure Updates.............................................. 67
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7. NEGATIVE COVENANTS..................................................... 68
7.1 Indebtedness.................................................... 68
7.2 Liens........................................................... 68
7.3 Restrictions on Fundamental Changes............................. 69
7.4 Disposal of Assets.............................................. 69
7.5 Change Name..................................................... 69
7.6 Guarantee....................................................... 69
7.7 Nature of Business.............................................. 69
7.8 Prepayments and Amendments...................................... 69
7.9 Change of Control............................................... 69
7.10 Consignments.................................................... 69
7.11 Distributions................................................... 69
7.12 Accounting Methods.............................................. 70
7.13 Investments..................................................... 70
7.14 Transactions with Affiliates.................................... 70
7.15 Suspension...................................................... 70
7.16 [Intentionally Omitted]......................................... 70
7.17 Use of Proceeds................................................. 70
7.18 Change in Location of Chief Executive Office; Inventory and
Equipment with Bailees.......................................... 70
7.19 Securities Accounts............................................. 71
7.20 Financial Covenants............................................. 71
8. EVENTS OF DEFAULT...................................................... 72
9. THE LENDER GROUP'S RIGHTS AND REMEDIES................................. 73
9.1 Rights and Remedies............................................. 73
9.2 Additional Collateral........................................... 75
9.3 Remedies Cumulative............................................. 76
10. TAXES AND EXPENSES..................................................... 76
11. WAIVERS; INDEMNIFICATION............................................... 76
11.1 Demand; Protest; etc............................................ 76
11.2 The Lender Group's Liability for Collateral..................... 76
11.3 Indemnification................................................. 77
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12. NOTICES................................................................ 77
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER............................. 78
14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS............................. 79
14.1 Assignments and Participations.................................. 79
14.2 Successors...................................................... 81
15. AMENDMENTS; WAIVERS.................................................... 81
15.1 Amendments and Waivers.......................................... 81
15.2 Replacement of Holdout Lender................................... 83
15.3 No Waivers; Cumulative Remedies................................. 83
16. AGENT; THE LENDER GROUP................................................ 83
16.1 Appointment and Authorization of Agent.......................... 83
16.2 Delegation of Duties............................................ 84
16.3 Liability of Agent.............................................. 84
16.4 Reliance by Agent............................................... 85
16.5 Notice of Default or Event of Default........................... 85
16.6 Credit Decision................................................. 85
16.7 Costs and Expenses; Indemnification............................. 86
16.8 Agent in Individual Capacity.................................... 86
16.9 Successor Agent................................................. 87
16.10 Lender in Individual Capacity................................... 87
16.11 Withholding Taxes............................................... 88
16.12 Collateral Matters.............................................. 90
16.13 Restrictions on Actions by Lenders; Sharing of Payments......... 91
16.14 Agency for Perfection........................................... 91
16.15 Payments by Agent to the Lenders................................ 92
16.16 Concerning the Collateral and Related Loan Documents............ 92
16.17 Field Audits and Examination Reports; Confidentiality;
Disclaimers by Lenders; Other Reports and Information........... 92
16.18 Several Obligations; No Liability............................... 93
16.19 Legal Representation of Agent................................... 94
17. GENERAL PROVISIONS..................................................... 94
17.1 Effectiveness................................................... 94
17.2 Section Headings................................................ 94
17.3 Interpretation.................................................. 94
17.4 Severability of Provisions...................................... 94
17.5 Amendments in Writing........................................... 94
17.6 Counterparts; Telefacsimile Execution........................... 94
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17.7 Revival and Reinstatement of Obligations........................ 94
17.8 Integration..................................................... 95
17.9 Parent as Agent for Borrowers................................... 95
17.10 Execution by DTM Corporation.................................... 96
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EXHIBITS AND SCHEDULES
Exhibit A-1 Form of Assignment and Acceptance
Exhibit B-1 Form of Borrowing Base Certificate
Exhibit C-1 Form of Compliance Certificate
Exhibit L-1 Form of LIBOR Notice
Schedule C-1 Commitments
Schedule E-1 Eligible Inventory Locations
Schedule P-1 Permitted Liens
Schedule 2.7(a) Cash Management Banks
Schedule 5.5 Locations of Inventory and Equipment
Schedule 5.7 Chief Executive Office; FEIN
Schedule 5.8(b) Capitalization of Borrower
Schedule 5.8(c) Capitalization of Borrower's Subsidiaries
Schedule 5.10 Litigation
Schedule 5.14 Environmental Matters
Schedule 5.16 Intellectual Property
Schedule 5.18 Demand Deposit Accounts
Schedule 5.20 Permitted Indebtedness
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