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EXHIBIT 10.41
LOAN AND SECURITY AGREEMENT
Dated as of February 25, 1999
Among
THE FINANCIAL INSTITUTIONS NAMED HEREIN
as the Lenders
and
BANKAMERICA BUSINESS CREDIT, INC.
as the Agent
and
XXXXXXX STEEL COMPANY and certain of its Affiliates
as the Borrower
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TABLE OF CONTENTS
ARTICLE 1 INTERPRETATION OF THIS AGREEMENT................................................................2
1.1 Definitions.....................................................................................2
1.2 Accounting Terms...............................................................................25
1.3 Interpretive Provisions........................................................................25
ARTICLE 2 LOANS AND LETTERS OF CREDIT....................................................................26
2.1 Total Facility.................................................................................26
2.2 Revolving Loans................................................................................26
2.3 Term Loans.....................................................................................32
2.4 Letters of Credit..............................................................................34
2.5 Capital Expenditure Loans......................................................................40
2.6 Acquisition Line...............................................................................44
2.7 Swap Transactions..............................................................................45
ARTICLE 3 INTEREST AND FEES..............................................................................46
3.1 Interest.......................................................................................46
3.2 Conversion and Continuation Elections..........................................................47
3.3 Maximum Interest Rate..........................................................................48
3.4 Closing Fee....................................................................................49
3.5 Unused Line Fee................................................................................49
3.6 Letter of Credit Fee...........................................................................49
3.7 Capital Expenditure Loan Fee...................................................................49
3.8 Acquisition Line Fee...........................................................................50
3.9 Administration Fee.............................................................................50
ARTICLE 4 PAYMENTS AND PREPAYMENTS.......................................................................50
4.1 Revolving Loans................................................................................50
4.2 Termination of Facility........................................................................50
4.3 Repayment of the Term Loans....................................................................51
4.4 Voluntary Prepayments of the Term Loans........................................................51
4.5 Mandatory Prepayments of the Term Loans........................................................51
4.6 Repayment of the Capital Expenditure Loans.....................................................52
4.7 Voluntary Prepayments of the Capital Expenditure Loans.........................................52
4.8 Mandatory Prepayments of the Capital Expenditure Loans.........................................52
4.9 Payments by the Borrower.......................................................................52
4.10 Payments as Revolving Loans....................................................................53
4.11 Apportionment, Application and Reversal of Payments............................................53
4.12 Indemnity for Returned Payments................................................................54
4.13 Agent's and Lenders' Books and Records; Monthly Statements.....................................54
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ARTICLE 5 TAXES, YIELD PROTECTION AND ILLEGALITY.........................................................55
5.1 Taxes..........................................................................................55
5.2 Illegality.....................................................................................56
5.3 Increased Costs and Reduction of Return........................................................56
5.4 Funding Losses.................................................................................57
5.5 Inability to Determine Rates...................................................................57
5.6 Certificates of Lenders........................................................................57
5.7 Survival.......................................................................................57
ARTICLE 6 COLLATERAL.....................................................................................58
6.1 Grant of Security Interest.....................................................................58
6.2 Perfection and Protection of Security Interest.................................................59
6.3 Location of Collateral.........................................................................60
6.4 Title to, Liens on, and Sale and Use of Collateral.............................................60
6.5 Appraisals.....................................................................................60
6.6 Access and Examination; Confidentiality........................................................61
6.7 Collateral Reporting...........................................................................61
6.8 Accounts.......................................................................................62
6.9 Collection of Accounts; Payments...............................................................63
6.10 Inventory; Perpetual Inventory.................................................................64
6.11 Equipment......................................................................................65
6.12 Documents, Instruments, and Chattel Paper......................................................66
6.13 Right to Cure..................................................................................66
6.14 Power of Attorney..............................................................................66
6.15 The Agent's and Lenders'Rights, Duties and Liabilities.........................................67
6.16 Site Visits, Observations and Testing..........................................................67
ARTICLE 7 BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES..............................................68
7.1 Books and Records..............................................................................68
7.2 Financial Information..........................................................................68
7.3 Notices to the Lenders.........................................................................70
ARTICLE 8 GENERAL WARRANTIES AND REPRESENTATIONS.........................................................72
8.1 Authorization, Validity, and Enforceability of this Agreement and the Loan Documents...........72
8.2 Validity and Priority of Security Interest.....................................................73
8.3 Organization and Qualification.................................................................73
8.4 Corporate Name; Prior Transactions.............................................................73
8.5 Subsidiaries and Affiliates....................................................................73
8.6 Financial Statements and Projections...........................................................74
8.7 Solvency.......................................................................................74
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8.8 Distributions..................................................................................74
8.9 Title to Property..............................................................................74
8.10 Real Estate; Leases............................................................................75
8.11 Proprietary Rights.............................................................................75
8.12 Trade Names and Terms of Sale..................................................................75
8.13 Litigation.....................................................................................75
8.14 Restrictive Agreements.........................................................................75
8.15 Labor Disputes.................................................................................75
8.16 Environmental Laws.............................................................................76
8.17 No Violation of Law............................................................................77
8.18 No Default.....................................................................................77
8.19 ERISA Compliance...............................................................................77
8.20 Taxes..........................................................................................78
8.21 Regulated Entities.............................................................................78
8.22 Use of Proceeds; Margin Regulations............................................................78
8.23 Copyrights, Patents, Trademarks and Licenses, etc..............................................78
8.24 No Material Adverse Change.....................................................................79
8.25 Full Disclosure................................................................................79
8.26 Material Agreements............................................................................79
8.27 Bank Accounts..................................................................................79
8.28 Governmental Authorization.....................................................................79
8.29 Subordinated Debt..............................................................................79
ARTICLE 9 AFFIRMATIVE AND NEGATIVE COVENANTS.............................................................80
9.1 Taxes and Other Obligations....................................................................80
9.2 Corporate Existence and Good Standing..........................................................80
9.3 Compliance with Law and Agreements; Maintenance of Licenses....................................80
9.4 Maintenance of Property........................................................................81
9.5 Insurance......................................................................................81
9.6 Condemnation...................................................................................82
9.7 Environmental Laws.............................................................................83
9.8 Compliance with ERISA..........................................................................84
9.9 Mergers, Consolidations or Sales...............................................................84
9.10 Distributions; Capital Change; Restricted Investments..........................................84
9.11 Transactions Affecting Collateral or Obligations...............................................84
9.12 Guaranties.....................................................................................84
9.13 Debt...........................................................................................85
9.14 Prepayment.....................................................................................85
9.15 Transactions with Affiliates...................................................................85
9.16 Transactions with AHI and Northern.............................................................85
9.17 Investment Banking and Finder's Fees...........................................................85
9.18 Compensation...................................................................................86
9.19 Business Conducted.............................................................................86
9.20 Liens..........................................................................................86
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9.21 Sale and Leaseback Transactions................................................................86
9.22 New Subsidiaries...............................................................................86
9.23 Fiscal Year....................................................................................86
9.24 Capital Expenditures...........................................................................86
9.25 Operating Lease Obligations....................................................................87
9.26 Adjusted Tangible Net Worth....................................................................87
9.27 Fixed Charge Coverage Ratio....................................................................87
9.28 Use of Proceeds................................................................................87
9.29 Unused Availability............................................................................88
9.30 Further Assurances.............................................................................88
9.31 Motor Vehicles Titles..........................................................................88
ARTICLE 10 CONDITIONS OF LENDING..........................................................................88
10.1 Conditions Precedent to Making of Loans on the Closing Date....................................88
10.2 Conditions Precedent to Each Loan..............................................................90
10.3 Conditions Precedent to Capital Expenditure Loans..............................................91
ARTICLE 11 DEFAULT; REMEDIES..............................................................................91
11.1 Events of Default..............................................................................91
11.2 Remedies.......................................................................................94
ARTICLE 12 TERM AND TERMINATION...........................................................................95
12.1 Term and Termination...........................................................................95
ARTICLE 13 AMENDMENTS; WAIVER; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS....................................96
13.1 No Waivers; Cumulative Remedies................................................................96
13.2 Amendments and Waivers.........................................................................96
13.3 Assignments; Participations....................................................................97
ARTICLE 14 THE AGENT......................................................................................99
14.1 Appointment and Authorization..................................................................99
14.2 Delegation of Duties...........................................................................99
14.3 Liability of Agent............................................................................100
14.4 Reliance by Agent.............................................................................100
14.5 Notice of Default.............................................................................101
14.6 Credit Decision...............................................................................101
14.7 Indemnification...............................................................................101
14.8 Agent in Individual Capacity..................................................................102
14.9 Successor Agent...............................................................................102
14.10 Withholding Tax...............................................................................103
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14.11 Collateral Matters............................................................................104
14.12 Restrictions on Actions by Lenders; Sharing of Payments.......................................105
14.13 Agency for Perfection.........................................................................106
14.14 Payments by Agent to Lenders..................................................................106
14.15 Concerning the Collateral and the Related Loan Documents......................................106
14.16 Field Audit and Examination Reports; Disclaimer by Lenders....................................106
14.17 Relation Among Lenders........................................................................107
ARTICLE 15 MISCELLANEOUS.................................................................................107
15.1 Cumulative Remedies; No Prior Recourse to Collateral..........................................107
15.2 Severability..................................................................................107
15.3 Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver.........................108
15.4 WAIVER OF JURY TRIAL..........................................................................108
15.5 Survival of Representations and Warranties....................................................109
15.6 Other Security and Guaranties.................................................................109
15.7 Fees and Expenses.............................................................................109
15.8 Notices.......................................................................................110
15.9 Waiver of Notices.............................................................................112
15.10 Binding Effect................................................................................112
15.11 Indemnity of the Agent and the Lenders by the Borrower........................................112
15.12 Limitation of Liability.......................................................................113
15.13 Final Agreement...............................................................................113
15.14 Counterparts..................................................................................113
15.15 Captions......................................................................................113
15.16 Right of Setoff...............................................................................113
15.17 Joint and Several Liability...................................................................114
15.18 Contribution and Indemnification among the Borrowers..........................................115
15.19 Agency of the Parent for each other Borrower..................................................115
15.20 Wire Transfer Procedures......................................................................117
LOCATION OF COLLATERAL..................................................................................15
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EXHIBITS AND SCHEDULES
EXHIBIT A - FORM OF TERM NOTE
EXHIBIT B - FORM OF BORROWING BASE CERTIFICATE
EXHIBIT C - FORM OF CAPITAL EXPENDITURE LOAN NOTE
EXHIBIT D - LIST OF CLOSING DOCUMENTS
EXHIBIT E - NOTICE OF BORROWING
EXHIBIT F - NOTICE OF BORROWING (CAPITAL EXPENDITURE LOAN)
EXHIBIT G - NOTICE OF CONVERSION/CONTINUATION
EXHIBIT H - FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
- SCHEDULE 1 - NOTICE OF ASSIGNMENT AND ACCEPTANCE
EXHIBIT I - WIRE TRANSFER PROCEDURES
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LOAN AND SECURITY AGREEMENT
Loan and Security Agreement, dated as of February 25, 1999, among the
financial institutions listed on the signature pages hereof (such financial
institutions, together with their respective successors and assigns, are
referred to hereinafter each individually as a "Lender" and collectively as the
"Lenders"), BANKAMERICA BUSINESS CREDIT, INC., a Delaware corporation ("BABC")
with an office at 16th Floor, 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000,
as agent for the Lenders (in its capacity as agent, the "Agent"), and the
following corporations (collectively, the "Borrower"):
XXXXXXX STEEL COMPANY, a corporation organized under the laws of the
Commonwealth of Pennsylvania ("MSC") including, without limitation, its
XxXxxxx Rolled Rings ("MRR") division;
XXXXXXX INTERNATIONAL, INC., a corporation organized under the laws of
the U.S. Virgin Islands ("MII");
XXXXXX FORGE COMPANY, a corporation organized under the laws of the
State of Tennessee ("Xxxxxx");
ERIE BRONZE & ALUMINUM COMPANY, a corporation organized under the laws
of the Commonwealth of Pennsylvania ("EBA");
AMERICAN HANDLING, INC., a corporation organized under the laws of the
State of Ohio ("AHI");
NORTHERN STEEL COMPANY, a corporation organized under the laws of the
State of Washington ("Northern");
MICAFIL, INC., a corporation organized under the laws of the State of
Delaware ("Micafil"); and
EBALLOY GLASS PRODUCTS COMPANY, a corporation organized under the laws
of the Commonwealth of Pennsylvania ("Eballoy").
W I T N E S S E T H
WHEREAS, the Borrower has requested the Lenders to make available to
the Borrower a revolving line of credit for loans and letters of credit in an
amount not to exceed $20,000,000, to make a term loan to the Borrower in the
aggregate principal amount of $13,500,000, a capital expenditure line facility
in the amount not to exceed $8,000,000 and an acquisition line facility in the
amount not to exceed $5,000,000, which extensions of credit the Borrower will
use for its working capital needs and general business purposes as further set
forth in this Agreement; and
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WHEREAS, the Lenders have agreed to make available to the Borrower a
revolving credit facility and those other credit facilities described above upon
the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth in this Agreement, and for good and valuable consideration,
the receipt of which is hereby acknowledged, the Lenders, the Agent, and the
Borrower hereby agree as follows.
ARTICLE 1
INTERPRETATION OF THIS AGREEMENT
1.1 Definitions. As used herein:
"Accounts" means all of the Borrower's now owned or hereafter
acquired or arising accounts, and any other rights to payment for the sale or
lease of goods or rendition of services, whether or not they have been earned by
performance.
"Account Debtor" means each Person obligated in any way on or
in connection with an Account.
"Acquisition Line" has the meaning set forth in Section 2.6.
"Acquisition Line Fee" has the meaning set forth in Section
3.8.
"Adjusted Tangible Assets" means all of Centrum's and its
Subsidiaries' assets except: (a) deferred assets, other than prepaid insurance,
prepaid taxes and deferred taxes; (b) patents, copyrights, trademarks, trade
names, franchises, goodwill, and other similar intangibles; (c) Restricted
Investments; (d) unamortized debt discount and expense; (e) assets of Centrum
and Subsidiaries constituting Intercompany Accounts; and (f) fixed assets to the
extent of any write-up in the book value thereof resulting from a revaluation
effective after the Closing Date.
"Adjusted Tangible Net Worth" means, at any date: (a) the book
value (after deducting related depreciation, obsolescence, amortization,
valuation, and other proper reserves as determined in accordance with GAAP) at
which the Adjusted Tangible Assets would be shown on a balance sheet of Centrum
and its Subsidiaries at such date prepared in accordance with GAAP; less (b) the
amount at which the liabilities of Centrum and its Subsidiaries would be shown
on such balance sheet, including as liabilities all reserves for contingencies
and other potential liabilities which would be required to be shown on such
balance sheet in accordance with GAAP.
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person or which owns, directly or indirectly, five percent
(5%) or more of the outstanding equity interest of such Person. A Person shall
be deemed to control another Person if the controlling Person possesses,
directly or indirectly, the power to direct or cause the direction of the
management and policies of the other Person, whether through the ownership of
voting securities, by contract, or otherwise.
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"Agent" means BankAmerica Business Credit, Inc., solely in its
capacity as agent for the Lenders, and any successor agent.
"Agent Advances" has the meaning specified in Section 2.2(i).
"Agent Capital Expenditure Advances" has the meaning specified
in Section 2.5(i)
"Agent's Liens" means the Liens in the Collateral granted to
the Agent, for the ratable benefit of the Lenders, BABC, and Agent pursuant to
this Agreement and the other Loan Documents.
"Agent-Related Persons" means the Agent and any successor
agent, together with their respective Affiliates, and the officers, directors,
employees, agents and attorneys-in-fact of such Persons and Affiliates.
"Aggregate Revolver Outstandings" means, at any time: the sum
of (a) the unpaid balance of Revolving Loans, (b) the aggregate amount of
Pending Revolving Loans, (c) one hundred percent (100%) of the aggregate undrawn
face amount of all outstanding Letters of Credit, and (d) the aggregate amount
of any unpaid reimbursement obligations in respect of Letters of Credit to the
extent to which a draw has been made.
"Agreement" means this Loan and Security Agreement.
"Anniversary Date" means each anniversary of the Closing Date.
"Applicable Margin" has the meaning set forth in Section
3.1(a).
"Assignee" has the meaning specified in Section 13.3(a).
"Assignment and Acceptance" has the meaning specified in
Section 13.3(a).
"Attorney Costs" means and includes all fees, expenses and
disbursements of any law firm or other external counsel engaged by the Agent,
the allocated cost of internal legal services of the Agent and all expenses and
disbursements of internal counsel of the Agent.
"Availability" means, at any time, (a) the lesser of (i) the
Maximum Revolver Amount or (ii) the sum of (A) eighty-five percent (85%) of the
Net Amount of Eligible Accounts; plus (B) sixty percent (60%) of the value of
Eligible Inventory consisting of raw materials and finished goods; plus (C)
forty percent (40%) of the value of Eligible Inventory consisting of work in
process; provided, that at no time shall the sum of outstanding Revolving Loans
based upon the value of Eligible Inventory exceed $10,000,000 in the aggregate
("Maximum Inventory Loan") and provided, further, that at no time shall the sum
of outstanding Revolving Loans based upon the value of Eligible Inventory
consisting of work in process exceed $3,000,000 in the aggregate; minus (b) the
sum of (i) the Aggregate Revolver Outstandings, (ii) reserves for accrued
interest on the Obligations, (iii) the Environmental Compliance Reserve, (iv)
Swap Reserve, and (v) all other reserves which the Agent deems necessary in the
exercise of its reasonable credit judgment to maintain with respect to the
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Borrower's account, including, without limitation, reserves for any amounts
which the Agent or any Lender may be obligated to pay in the future for the
account of the Borrower.
"BABC" means BankAmerica Business Credit, Inc, or any
successor entity thereto.
"BABC Loan" and "BABC Loans" have the meanings specified in
Section 2.2(h).
"Bank of America" means Bank of America National Trust and
Savings Association, a national banking association, or any successor entity
thereto.
"Bankruptcy Code" means Title 11 of the United States Code (11
U.S.C. ss. 101 et seq.).
"Base Rate" means, for any day, the rate of interest in effect
for such day as publicly announced from time to time by Bank of America in San
Francisco, California, as its "reference rate" (the "reference rate" being a
rate set by Bank of America based upon various factors including Bank of
America's costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate). Any change in the reference
rate announced by Bank of America shall take effect at the opening of business
on the day specified in the public announcement of such change. Each Interest
Rate based upon the Base Rate shall be adjusted simultaneously with any change
in the Base Rate.
"Base Rate Loans" means, collectively the Base Rate Revolving
Loans, the Base Rate Capital Expenditure Loans, and the Base Rate Term Loans.
"Base Rate Capital Expenditure Loans" means a Capital
Expenditure Loan during any period in which it bears interest based on the Base
Rate.
"Base Rate Revolving Loan" means a Revolving Loan during any
period in which it bears interest based on the Base Rate.
"Base Rate Term Loan" means any portion of a Term Loan during
any period in which such portion bears interest based on the Base Rate.
"Borrower" means the collective reference to each and every
Person defined as a "Borrower" in the preamble of this Agreement or otherwise so
identified in this Agreement from time to time, and to any one or more of such
Persons, all jointly and severally, unless a specific Borrower is expressly
identified. "Borrowers" means the collective reference to all Persons included
in the definition of "Borrower."
"Borrowing" means a borrowing hereunder consisting of
Revolving Loans, Capital Expenditure Loans or Term Loans made on the same day by
the Lenders to the Borrower (or by BABC in the case of a Borrowing funded by
BABC Loans) or by the Agent in the case of a Borrowing consisting of an Agent
Advance.
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"Borrowing Base Certificate" means a certificate by a
Responsible Officer of the Borrower, substantially in the form of EXHIBIT B (or
another form acceptable to the Agent) setting forth the calculation of the
Availability, including a calculation of each component thereof, as of the close
of business no more than five (5) Business Days prior to the date of such
certificate, all in such detail as shall be satisfactory to the Agent. Each
Borrowing Base Certificate shall include for each Person whose assets are
included the calculation of Availability, the Eligible Accounts and Eligible
Inventory (including a breakdown of work-in-process). All calculations of
Availability in connection with the preparation of any Borrowing Base
Certificate shall originally be made by the Borrower and certified to the Agent;
provided, that the Agent shall have the right to review and adjust, in the
exercise of its reasonable credit judgment, any such calculation (1) to reflect
its reasonable estimate of declines in value of any of the Collateral described
therein, and (2) to the extent that such calculation is not in accordance with
this Agreement. The Agent shall promptly notify the Borrower of such
adjustments.
"Business Day" means (a) any day that is not a Saturday,
Sunday, or a day on which banks in San Francisco, California, or Chicago,
Illinois are required or permitted to be closed, and (b) with respect to all
notices, determinations, fundings and payments in connection with the LIBOR Rate
or LIBOR Rate Loans, any day that is a Business Day pursuant to clause (a) above
and that is also a day on which trading in Dollars is carried on by and between
banks in the London interbank market.
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any other law,
rule or regulation, whether or not having the force of law, in each case,
regarding capital adequacy of any bank or of any corporation controlling a bank.
"Capital Expenditure Loan Availability" means, at any time,
$8,000,000 minus the aggregate amount of all Capital Expenditure Loans
previously advanced minus reserves which the Agent deems necessary in the
exercise of its reasonable credit judgment to maintain with respect to the
Borrower's account for completion of the Project free and clear of Liens.
"Capital Expenditure Loan Fee" has the meaning set forth in
Section 3.7.
"Capital Expenditure Loan Maturity Date" means the earlier of
Stated Termination Date or the sixth anniversary of the first advance under the
Capital Expenditure Loan.
"Capital Expenditure Loan Notes" has the meaning set forth in
Section 2.5(j).
"Capital Expenditure Loan Notice of Borrowing" has the meaning
set forth in Section 2.5(b).
"Capital Expenditure Loans" has the meaning set forth in
Section 2.5(a).
"Capital Expenditures" means all payments due (whether or not
paid) in respect of the cost of any fixed asset or improvement, or replacement,
substitution, or addition thereto, which has a useful life of more than one
year, including, without limitation, those costs arising in
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connection with the direct or indirect acquisition of such asset by way of
increased product or service charges or offset items or in connection with a
Capital Lease.
"Capital Lease" means any lease of property by the Borrower
which, in accordance with GAAP, is or should be reflected as a capital lease on
the balance sheet of Borrower.
"Centrum" means Centrum Industries, Inc., a corporation
organized under the laws of the State of Delaware, its successors and assigns.
"Change of Control" means (a)(i) the replacement of a majority
of the Board of Directors of Centrum from the directors who constituted the
Board of Directors on the date of this Agreement for any reason other than death
or disability, and such replacement shall not have been approved by the Board of
Directors of such entity as constituted on the date of this Agreement (or as
changed over time with the approval of the Board of Directors of such entity) or
(ii) a company, person, entity or group of companies or entities acting in
concert, shall, as a result of a tender or exchange offer, open market
purchases, privately negotiated purchases, exercise of the stock pledge or
otherwise, have become the beneficial owner (within the meaning of Rule 13d.3
under the Securities Exchange Act of 1934, as amended) of (A) any securities of
the Borrower or (B) securities of Centrum representing more than 30% of the
combined voting power of the then outstanding securities of Centrum ordinarily
having the right to vote in the election of directors; or (b) any of the
Borrowers ceases to be a wholly-owned subsidiary of Centrum or of one of the
Borrowers.
"Closing Date" means the date of this Agreement.
"Closing Fee" has the meaning specified in Section 3.4.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor statute, and regulations promulgated
thereunder.
"Collateral" has the meaning specified in Section 6.1.
"Commitment" means, at any time with respect to a Lender, the
principal amount set forth beside such Lender's name under the heading
"Commitment" on the signature pages of this Agreement or on the signature page
of the Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of Section 13.3, as such Commitment
may be adjusted from time to time in accordance with the provisions of Section
13.3, and "Commitments" means, collectively, the aggregate amount of the
commitments of all of the Lenders.
"Consolidated" means consolidated in accordance with GAAP for
Centrum and its Subsidiaries, adjusted, however, from time to time as the Agent
may require from time to reflect the results, assets and liabilities of entities
which are not included within the term "Borrower."
"Contaminant" means any waste, pollutant, hazardous substance,
toxic substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos in
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any form or condition, polychlorinated biphenyls ("PCBs"), or any constituent of
any such substance or waste.
"Corporate Guarantors" means the collective reference to each
of Centrum, XxXxxxx Services, Inc., a corporation organized under the laws of
the State of Delaware, and LaSalle Exploration, Inc., a corporation organized
under the laws of Ohio.
"Corporate Guaranties" means the collective reference to each
Guaranty executed by the Corporate Guarantors with respect to the Obligations.
"Credit Support" has the meaning specified in Section 2.4(a).
"Debt" means, as to any Person, all liabilities, obligations
and indebtedness of the Person of any kind or nature, now or hereafter owing,
arising, due or payable, howsoever evidenced, created, incurred, acquired or
owing, whether primary, secondary, direct, contingent, fixed or otherwise, and
including, without in any way limiting the generality of the foregoing: (i) the
Person's liabilities and obligations to trade creditors; (ii) all Obligations;
(iii) all obligations and liabilities of any Person secured by any Lien on the
Person's property, even though the Person shall not have assumed or become
liable for the payment thereof; provided, however, that all such obligations and
liabilities which are limited in recourse to such property shall be included in
Debt only to the extent of the book value of such property as would be shown on
a balance sheet of the Person prepared in accordance with GAAP; (iv) all
obligations or liabilities created or arising under any Capital Lease or
conditional sale or other title retention agreement with respect to property
used or acquired by the Person, even if the rights and remedies of the lessor,
seller or lender thereunder are limited to repossession of such property;
provided, however, that all such obligations and liabilities which are limited
in recourse to such property shall be included in Debt only to the extent of the
book value of such property as would be shown on a balance sheet of the Person
prepared in accordance with GAAP; (v) all accrued pension fund and other
employee benefit plan obligations and liabilities; and (vi) without duplication,
all obligations and liabilities under Guaranties.
"Debt For Borrowed Money" means, as to any Person, Debt for
borrowed money or as evidenced by notes, bonds, debentures or similar evidences
of any such Debt of such Person, the deferred and unpaid purchase price of any
property or business (other than trade accounts payable incurred in the ordinary
course of business and constituting current liabilities) and all obligations
under Capital Leases.
"Default" means any event or circumstance which, with the
giving of notice, the lapse of time, or both, would (if not cured or otherwise
remedied during such time) constitute an Event of Default.
"Defaulting Lender" has the meaning specified in Section
2.2(g)(ii).
"Default Rate" means a fluctuating per annum interest rate at
all times equal to the sum of (a) the otherwise applicable Interest Rate plus
(b) two percent (2%). Each Default Rate shall be adjusted simultaneously with
any change in the applicable Interest Rate. In addition, with respect to Letters
of Credit, the Default Rate shall mean an increase in the Letter of Credit Fee
by two (2) percentage points.
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15
"Distribution" means, in respect of any corporation: (a) the
payment or making of any dividend or other distribution of property in respect
of capital stock (or any options or warrants for such stock) of such
corporation, other than distributions in capital stock (or any options or
warrants for such stock) of the same class; or (b) the redemption or other
acquisition by such corporation of any capital stock (or any options or warrants
for such stock) of such corporation.
"DOL" means the United States Department of Labor or any
successor department or agency.
"Dollar" and "$" means dollars in the lawful currency of the
United States.
"Early Termination Fee" has the meaning described in Section
4.2.
"EBITDA" means as to Centrum and its Subsidiaries for any
period of determination thereof, the sum, on a Consolidated basis, of (a) the
net profit (or loss), plus (b) interest expense and income tax provisions for
such period, plus (c) depreciation and amortization of assets for such period,
plus (d) unusual expense associated with the write-off of the capitalized
portion of financing costs, minus (e) gains from asset sales other than sales of
Inventory in the ordinary course of business, plus (f) losses from asset sales
other than sales of Inventory in the ordinary course of business, minus (g)
extraordinary gains, minus (h) interest income, minus (i) any gain relating to
the accumulated effect of any change in accounting method, plus (j) any loss
relating to the accumulated effect of any change in accounting method, each item
in clauses (a) through (j) calculated pursuant to GAAP for such period, minus
(k) that portion of net profit (or loss, which shall be expressed as a negative
number) accounted for as equity income in accordance with GAAP which is not
distributed to Centrum and its Subsidiaries.
"Eligible Accounts" means all Accounts of the Borrower which
the Agent in the exercise of its reasonable commercial discretion determines to
be Eligible Accounts. Without limiting the discretion of the Agent to establish
other criteria of ineligibility, Eligible Accounts shall not, unless the Agent
in its sole discretion elects, include any Account:
(a) with respect to which more than 90 days have
elapsed since the date of the original invoice therefor or it is more than 60
days past due, unless the Account is covered by credit insurance which is from
an issuer and on terms (including, without limitation, deductibles) satisfactory
to the Agent, which is subject to reserves which the Agent deems necessary in
the exercise of its reasonable credit judgment, and which has been assigned to
the Agent as security for the Obligations; provided that the aggregate of all
Accounts included in Eligible Accounts due to such credit insurance shall not
exceed $750,000.00.
(b) with respect to which any of the representations,
warranties, covenants, and agreements contained in Section 6.8 are not or have
ceased to be complete and correct or have been breached;
(c) with respect to which, in whole or in part, a
check, promissory note, draft, trade acceptance or other instrument for the
payment of money has been received, presented for payment and returned
uncollected for any reason;
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16
(d) which represents a progress billing (as
hereinafter defined) or as to which the Borrower has extended the time for
payment without the consent of the Agent; for the purposes hereof, "progress
billing" means any invoice for goods sold or leased or services rendered under a
contract or agreement pursuant to which the Account Debtor's obligation to pay
such invoice is conditioned upon the Borrower's completion of any further
performance under the contract or agreement;
(e) as to which any one or more of the following
events has occurred with respect to the Account Debtor on such Account: death or
judicial declaration of incompetency of an Account Debtor who is an individual;
the filing by or against the Account Debtor of a request or petition for
liquidation, reorganization, arrangement, adjustment of debts, adjudication as a
bankrupt, winding-up, or other relief under the bankruptcy, insolvency, or
similar laws of the United States, any state or territory thereof, or any
foreign jurisdiction, now or hereafter in effect; the making of any general
assignment by the Account Debtor for the benefit of creditors; the appointment
of a receiver or trustee for the Account Debtor or for any of the assets of the
Account Debtor, including, without limitation, the appointment of or taking
possession by a "custodian," as defined in the United States Bankruptcy Code;
the institution by or against the Account Debtor of any other type of insolvency
proceeding (under the bankruptcy laws of the United States or otherwise) or of
any formal or informal proceeding for the dissolution or liquidation of,
settlement of claims against, or winding up of affairs of, the Account Debtor;
the sale, assignment, or transfer of all or any material part of the assets of
the Account Debtor; the nonpayment generally by the Account Debtor of its debts
as they become due; or the cessation of the business of the Account Debtor as a
going concern;
(f) if fifty percent (50%) or more of the aggregate
Dollar amount of outstanding Accounts owed at such time by the Account Debtor
thereon is classified as ineligible under the other criteria set forth herein or
otherwise established by the Agent;
(g) owed by an Account Debtor which: (i) does not
maintain its chief executive office in the United States or Canada; or (ii) is
not organized under the laws of the United States or any state thereof or
Canada; or (iii) is the government of any foreign country or sovereign state, or
of any state, province, municipality, or other political subdivision thereof, or
of any department, agency, public corporation, or other instrumentality thereof;
except to the extent that such Account is secured or payable by a letter of
credit or foreign credit insurance, all in form and substance and assigned in a
manner satisfactory to the Agent in its discretion;
(h) owed by an Account Debtor which is an Affiliate
or employee of the Borrower;
(i) except as provided in (k) below, as to which
either the perfection, enforceability, or validity of the Agent's Lien in such
Account, or the Agent's right or ability to obtain direct payment to the Agent
of the proceeds of such Account, is governed by any federal, state, or local
statutory requirements other than those of the UCC;
(j) which is owed by an Account Debtor to which the
Borrower is indebted in any way, or which is subject to any right of setoff or
recoupment by the Account Debtor, unless the Account Debtor has entered into an
agreement acceptable to the Agent to
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17
waive setoff rights; or if the Account Debtor thereon has disputed liability or
made any claim with respect to any other Account due from such Account Debtor;
but in each such case only to the extent of such indebtedness, setoff,
recoupment, dispute, or claim;
(k) which is owed by the government of the United
States of America, or any department, agency, public corporation, or other
instrumentality thereof, unless the Federal Assignment of Claims Act of 1940, as
amended (31 U.S.C. ss. 3727 et seq.), and any other steps necessary to perfect
the Agent's Lien therein, have been complied with to the Agent's reasonable
satisfaction with respect to such Account;
(l) which is owed by any state, municipality, or
other political subdivision of the United States of America, or any department,
agency, public corporation, or other instrumentality thereof and as to which the
Agent determines that its Lien therein is not or cannot be perfected;
(m) which represents a sale on a xxxx-and-hold
(unless the same is subject to a written customer authorization, a copy of which
the Agent has received and approved and provided that no more than $500,000 in
Accounts for sales on a xxxx-and-hold may be included in Eligible Accounts at
ant one time), guaranteed sale, sale and return, sale on approval, consignment,
or other repurchase or return basis;
(n) which is evidenced by a promissory note or other
instrument or by chattel paper;
(o) if the Agent believes, in the exercise of
its reasonable judgment, that the prospect of collection of such Account is
impaired or that the Account may not be paid by reason of the Account Debtor's
financial inability to pay;
(p) with respect to which the Account Debtor is
located in any state requiring the filing of a Notice of Business Activities
Report or similar report in order to permit the Borrower to seek judicial
enforcement in such State of payment of such Account, unless such Borrower has
qualified to do business in such state or has filed a Notice of Business
Activities Report or equivalent report for the then current year; or
(q) which arises out of a sale not made in the
ordinary course of the Borrower's business;
(r) as to which the goods giving rise to such Account
have not been shipped and delivered to and accepted by the Account Debtor or the
services giving rise to such Account have not been performed by the Borrower,
and, if applicable, accepted by the Account Debtor, or the Account Debtor
revokes its acceptance of such goods or services;
(s) is owed by an Account Debtor which is obligated
to the Borrower respecting Accounts the aggregate unpaid balance of which
exceeds fifteen percent (15%)(except with respect to General Electric, the
aggregate unpaid balance of which exceeds twenty-five percent (25%)) of the
aggregate unpaid balance of all Accounts owed to the Borrower at such time by
all of the Borrower's Account Debtors, but only to the extent of such excess;
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18
(t) arises out of an enforceable contract or order
which, by its terms, forbids, restricts or makes void or unenforceable the
granting of a Lien by the Borrower to the Agent with respect to such Account; or
(u) which is not subject to a first priority and
perfected security interest in favor of the Agent for the benefit of the
Lenders.
If any Account at any time ceases to be an Eligible Account by reason
of any of the foregoing exclusions or any failure to meet any other eligibility
criteria established by the Agent in the exercise of its reasonable discretion
then such Account shall promptly be excluded from the calculation of Eligible
Accounts. Without limiting the foregoing, the Agent reserves the right to
continuing review of the inclusion of the Accounts of AHI and Northern among
Eligible Accounts.
"Eligible Inventory" means Inventory, valued at the lower of
cost or market, that constitutes raw materials, work-in-process and first
quality finished goods and that, unless the Agent in its reasonable commercial
discretion elects: (a) is not, in the Agent's reasonable opinion, obsolete, slow
moving, or unmerchantable; (b) is located at premises owned by the Borrower or
on premises otherwise reasonably acceptable to the Agent, provided, however,
that Inventory located on premises leased to the Borrower or on premises owned
by or leased to a bailee, warehouseman, inventory processor or other third party
shall not be Eligible Inventory unless the Borrower shall have delivered to the
Agent a written waiver, duly executed on behalf of the appropriate landlord,
bailee, warehouseman, inventory processor or other third party and in form and
substance acceptable to the Agent, of all Liens which the landlord, bailee,
warehouseman or other third party for such premises may be entitled to assert
against such Inventory; (c) upon which the Agent for the benefit of the Lenders
has a first priority perfected security interest; (d) work-in-process at AHI or
Northern; (e) is not held as spare parts and is not packaging and shipping
materials, supplies, xxxx-and-hold Inventory, returned or defective Inventory,
or Inventory delivered to the Borrower on consignment; and (f) the Agent, in the
exercise of its reasonable commercial discretion, deems eligible as the basis
for Revolving Loans based on such collateral and credit criteria as the Agent
may from time to time establish. If any Inventory at any time ceases to be
Eligible Inventory, such Inventory shall promptly be excluded from the
calculation of Eligible Inventory. Without limiting the foregoing the Agent
reserves the right to continuing review of the inclusion of the Inventory of AHI
and Northern among Eligible Inventory.
"Enforcement Costs" means all expenses, charges, costs and
fees whatsoever (including, without limitation, Attorney Costs) of any nature
whatsoever paid or incurred by or on behalf of the Agent and/or any of the
Lenders in connection with (a) any or all of the Obligations, this Agreement
and/or any of the other Loan Documents, (b) the creation, perfection,
collection, maintenance, preservation, defense, protection, realization upon,
disposition, sale or enforcement of all or any part of the Collateral, this
Agreement or any of the other Loan Documents, including, without limitation,
those costs and expenses more specifically enumerated in Section 15.7, and (c)
the monitoring, administration, processing and/or servicing of any or all of the
Obligations, the Financing Documents, and/or the Collateral.
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19
"Environmental Claims" means all claims, however asserted, by
any Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for release or injury
to the environment.
"Environmental Compliance Reserve" means any reserves which
the Agent, after the Closing Date, establishes from time to time for amounts
that are reasonably likely to be expended by the Borrower in order for the
Borrower and its operations and property (a) to comply with any notice from a
Governmental Authority asserting material non-compliance with Environmental
Laws, or (b) to correct any such material non-compliance identified in a report
delivered to the Agent and the Lenders pursuant to Section 9.7(b).
"Environmental Laws" means all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes, together
with all administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case relating to environmental, health, safety and land use matters.
"Environmental Lien" means a Lien in favor of any Governmental
Authority for (1) any liability under any Environmental Laws, or (2) damages
arising from, or costs incurred by such Governmental Authority in response to, a
Release or threatened Release of a Contaminant into the environment.
"Environmental Property Transfer Act" means any applicable
requirement of law that conditions, restricts, prohibits or requires any
notification or disclosure triggered by the closure of any property or the
transfer, sale or lease of any property or deed or title for any property for
environmental reasons, including, but not limited to, any so-called
"Environmental Cleanup Responsibility Acts" or "Responsible Property Transfer
Acts."
"Equipment" means all of the Borrower's now owned and
hereafter acquired machinery, equipment, furniture, furnishings, fixtures, and
other tangible personal property (except Inventory), including motor vehicles
with respect to which a certificate of title has been issued, aircraft, dies,
tools, jigs, and office equipment and all of the Borrower's rights and interests
with respect thereto under such leases (including, without limitation, options
to purchase); together with all present and future additions and accessions
thereto, replacements therefor, component and auxiliary parts and supplies used
or to be used in connection therewith, and all substitutes for any of the
foregoing, and all manuals, drawings, instructions, warranties and rights with
respect thereto; wherever any of the foregoing is located.
"ERISA" means the Employee Retirement Income Security Act of
1974, and regulations promulgated thereunder, as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a
Pension Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a
Pension Plan subject to Section
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20
4063 of ERISA during a plan year in which it was a substantial employer (as
defined in Section 4001(a)(2) of ERISA) or a cessation of operations which is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by the Borrower or any ERISA Affiliate from a Multi-employer
Plan or notification that a Multi-employer Plan is in reorganization; (d) the
filing of a notice of intent to terminate, the treatment of a Plan amendment as
a termination under Section 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multi-employer Plan; (e)
the occurrence of an event or condition which might reasonably be expected to
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan or Multi-employer Plan;
or (f) the imposition of any liability under Title IV of ERISA, other than for
PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the
Borrower or any ERISA Affiliate.
"Event of Default" has the meaning specified in Section 11.1.
"Exchange Act" means the Securities Exchange Act of 1934, and
regulations promulgated thereunder, as amended from time to time.
"FDIC" means the Federal Deposit Insurance Corporation, and
any Governmental Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate set forth in
the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including any
such successor, "H.15(519)") on the preceding Business Day opposite the caption
"Federal Funds (Effective)"; or, if for any relevant day such rate is not so
published on any such preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the Agent of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 a.m. (New York City time) on
that day by each of three leading brokers of Federal funds transactions in New
York City selected by the Agent in good faith.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System or any successor thereto.
"Financial Statements" means, according to the context in
which it is used, the financial statements referred to in Section 8.6 or any
other financial statements required to be given to the Lenders pursuant to this
Agreement.
"Financing Documents" means the Loan Documents.
"Fiscal Year" means the Borrower's fiscal year for financial
accounting purposes. The current Fiscal Year of the Borrower will end on March
31, 1999.
"Fixed Assets" means Equipment and Real Estate of the
Borrower.
"Fixed Charges" means as to Centrum and its Subsidiaries for
any period of determination, the Consolidated voluntary, scheduled or required
payments (including, without limitation, principal and interest) on all Funded
Debt of Centrum and its Subsidiaries, plus cash
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21
taxes paid, plus Capital Expenditures of Centrum and its Subsidiaries which are
not financed by long-term borrowings or long-term Capital Leases, plus dividends
declared or paid by Centrum.
"Fixed Charge Coverage Ratio" means as to Centrum and its
Subsidiaries for the period of any determination thereof the ratio of (a)
Consolidated EBITDA to (b) Consolidated Fixed Charges.
"Funding Date" means the date on which a Borrowing occurs.
"Funded Debt" means with respect to a Person at any time the
sum at such time of (a) Debt of such Person for borrowed money or for the
deferred purchase price of property or services, (b) any obligations of such
Person in respect of letters of credit, banker's or other acceptances or similar
obligations issued or created for the account of such Person, (c) lease
obligations of such Person with respect to Capital Leases, (d) all liabilities
secured by any Lien on any property owned by such Person, to the extent attached
to such Person's interest in such property, even though such Person has not
assumed or become personally liable for the payment thereof, (e) obligations of
third parties which are being guaranteed or indemnified against by such Person
or which are secured by the property of such Person; and (f) any obligations,
liabilities or indebtedness, contingent or otherwise, under or in connection
with, any interest rate or currency swap agreements, cap, floor, and collar
agreements, currency spot, foreign exchange and forward contracts and other
similar agreements and arrangements.
"Funded Debt to EBITDA Ratio" means on any date of
determination, the ratio of Consolidated Funded Debt on the date of
determination to Consolidated EBITDA for the four fiscal quarters ending on the
date of determination.
"GAAP" means generally accepted accounting principles set
forth from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and authority within the
U.S. accounting profession), which are applicable to the circumstances as of the
Closing Date.
"General Intangibles" means all of the Borrower's now owned or
hereafter acquired general intangibles, choses in action and causes of action
and all other intangible personal property of the Borrower of every kind and
nature (other than Accounts), including, without limitation, all contract
rights, Proprietary Rights, corporate or other business records, inventions,
designs, blueprints, plans, specifications, patents, patent applications,
trademarks, service marks, trade names, trade secrets, goodwill, copyrights,
computer software, customer lists, registrations, licenses, franchises, tax
refund claims, any funds which may become due to the Borrower in connection with
the termination of any Plan or other employee benefit plan or any rights thereto
and any other amounts payable to the Borrower from any Plan or other employee
benefit plan, rights and claims against carriers and shippers, rights to
indemnification, business interruption insurance and proceeds thereof, property,
casualty or any similar type of insurance and any proceeds thereof, proceeds of
insurance covering the lives of key employees on which the Borrower is
beneficiary, and any letter of credit, guarantee, claim, security interest or
other security held by or granted to the Borrower.
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22
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Guaranty" means, with respect to any Person, all obligations
of such Person which in any manner directly or indirectly guarantee or assure,
or in effect guarantee or assure, the payment or performance of any
indebtedness, dividend or other obligations of any other Person (the "guaranteed
obligations"), or assure or in effect assure the holder of the guaranteed
obligations against loss in respect thereof, including, without limitation, any
such obligations incurred through an agreement, contingent or otherwise: (a) to
purchase the guaranteed obligations or any property constituting security
therefor; (b) to advance or supply funds for the purchase or payment of the
guaranteed obligations or to maintain a working capital or other balance sheet
condition; or (c) to lease property or to purchase any debt or equity securities
or other property or services.
"Intercompany Accounts" means all assets and liabilities,
however arising, which are due to the Borrower from, which are due from the
Borrower to, or which otherwise arise from any transaction by the Borrower with,
any Affiliate.
"Interest Period" means, as to any LIBOR Rate Loan, the period
commencing on the Funding Date of such Loan or on the Conversion/Continuation
Date on which the Loan is converted into or continued as a LIBOR Rate Loan, and
ending on the date one, two, three or six months thereafter as selected by the
Borrower in its Notice of Borrowing or Notice of Conversion/Continuation;
provided that:
(i) if any Interest Period would otherwise end on a
day that is not a Business Day, that Interest Period shall be extended to the
following Business Day unless the result of such extension would be to carry
such Interest Period into another calendar month, in which event such Interest
Period shall end on the preceding Business Day;
(ii) any Interest Period pertaining to a LIBOR Rate
Loan that begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month at the end
of such Interest Period) shall end on the last Business Day of the calendar
month at the end of such Interest Period; and
(iii) no Interest Period shall extend beyond the
Stated Termination Date.
"Interest Rate" means each or any of the interest rates,
including the Default Rate, set forth in Section 3.1.
"Inventory" means all of the Borrower's now owned and
hereafter acquired inventory, goods and merchandise, wherever located, to be
furnished under any contract of service or held for sale or lease, all returned
goods, raw materials, other materials and supplies of any kind, nature or
description which are or might be consumed in the Borrower's business or used in
connection with the packing, shipping, advertising, selling or finishing of such
goods,
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23
merchandise and such other personal property, and all documents of title or
other documents representing them.
"Investment Property" means: (a) a security, whether
certificated or uncertificated; (b) a security entitlement; (c) a securities
account; (d) a commodity contract; or (e) a commodity account.
"Investors" has the meaning set forth in the Note and Warrant
Purchase Agreement.
"IRS" means the Internal Revenue Service and any Governmental
Authority succeeding to any of its principal functions under the Code.
"Latest Projections" means: (a) on the Closing Date and
thereafter until the Agent receives new projections pursuant to Section 7.2(e),
the projections of the Borrower's financial condition, results of operations,
and cash flow, for the period commencing on January 1, 1999 and ending on March
31, 2000 and delivered to the Agent prior to the Closing Date; and (b)
thereafter, the projections most recently received by the Agent pursuant to
Section 7.2(e).
"Laws" means all ordinances, statutes, rules, regulations,
orders, injunctions, writs, or decrees of any Governmental Authority.
"Lender" and "Lenders" have the meanings specified in the
introductory paragraph hereof and shall include the Agent to the extent of any
Agent Advance outstanding and BABC to the extent of any BABC Loan outstanding;
provided that no such Agent Advance or BABC Loan shall be taken into account in
determining any Lender's Pro Rata Share.
"Letter of Credit" means a letter of credit issued or caused
to be issued for the account of the Borrower pursuant to Section 2.4.
"Letter of Credit Fee" has the meaning specified in Section
3.6.
"LIBOR Capital Expenditure Loans" means a Capital Expenditure
Loan during any period in which it bears interest based on the LIBOR Rate.
"LIBOR Interest Payment Date" means, with respect to a LIBOR
Rate Loan, the last day of each Interest Period applicable to such Loan.
"LIBOR Rate" means, for any Interest Period, with respect to
LIBOR Rate Loans comprising part of the same Borrowing, the rate of interest per
annum (rounded upward to the next 1/1000th of 1.0%) determined by the Agent as
follows:
LIBOR
LIBOR Rate = ------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
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24
"Eurodollar Reserve Percentage" means for any day for
any Interest Period the maximum reserve percentage (expressed
as a decimal, rounded upward to the next 1/100th of 1%) in
effect on such day (whether or not applicable to any Lender)
under regulations issued from time to time by the Federal
Reserve Board for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal
reserve requirement) with respect to Eurocurrency funding
(currently referred to as "Eurocurrency liabilities"); and
"LIBOR" means the rate of interest per annum (rounded
upward to the next 1/16th of 1%) notified to the Agent by Bank
of America as the rate of interest at which dollar deposits in
the approximate amount of the Loan to be made or continued as,
or converted into, a LIBOR Rate Loan and having a maturity
comparable to such Interest Period would be offered by Bank of
America's applicable lending office to major banks in the
London eurodollar market at approximately 11:00 a.m. (London
time) two Business Days prior to the commencement of such
Interest Period.
"LIBOR Rate Loans" means, collectively, the LIBOR Revolving
Loans, the LIBOR Capital Expenditure Loans, and the LIBOR Term Loans.
"LIBOR Revolving Loan" means a Revolving Loan during any
period in which it bears interest based on the LIBOR Rate.
"LIBOR Term Loan" means any portion of a Term Loan during any
period in which such portion bears interest based on the LIBOR Rate.
"Lien" means: (a) any interest in property securing an
obligation owed to, or a claim by, a Person other than the owner of the
property, whether such interest is based on the common law, statute, or
contract, and including without limitation, a security interest, charge, claim,
or lien arising from a mortgage, deed of trust, encumbrance, pledge,
hypothecation, assignment, deposit arrangement, agreement, security agreement,
conditional sale or trust receipt or a lease, consignment or bailment for
security purposes; and (b) to the extent not included under clause (a), any
reservation, exception, encroachment, easement, right-of-way, covenant,
condition, restriction, lease or other title exception or encumbrance affecting
property.
"Loan Account" means the loan account of the Borrower, which
account shall be maintained by the Agent.
"Loan Documents" means this Agreement, the Term Loan Notes,
the Capital Expenditure Loan Notes, the Patent and Trademark Agreements, the
Mortgages, the Corporate Guaranties and any other agreements, instruments, and
documents heretofore, now or hereafter executed and delivered by the Borrower,
any guarantor and/or any other Person, singly or jointly with another Person or
Persons, evidencing, securing, guaranteeing or otherwise relating to the
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credit facilities under this Agreement, any other aspect of the transactions
contemplated by this Agreement, the Collateral and/or any of the Obligations.
"Loans" means, collectively, all loans and advances provided
for in Article 2.
"Majority Lenders" means at anytime Lenders whose Pro Rata
shares aggregate more than 66-2/3% of the Commitments or, if no Commitments
shall then be in effect, Lenders who hold more than 66-2/3% of the aggregate
principal amount of the Loans then outstanding.
"Margin Stock" means "margin stock" as such term is defined in
Regulation G, T, U or X of the Federal Reserve Board.
"Material Adverse Effect" means (a) a material adverse change
in, or a material adverse effect upon, the operations, business, properties,
condition (financial or otherwise) or prospects of the Borrower or the
Collateral; (b) a material impairment of the ability of the Borrower to perform
under any Loan Document and to avoid any Event of Default; or (c) a material
adverse effect upon the legality, validity, binding effect or enforceability
against the Borrower of any Loan Document.
"Maximum Revolver Amount" means $20,000,000.
"Mortgages" means: (a) each Mortgage, Security Agreement, and
Assignments of Leases and Rents dated the date hereof between the Borrower and
the Agent and delivered to the Agent; and (b) all other real property mortgages,
leasehold mortgages, assignments of leases, mortgage deeds, deeds of trust,
deeds to secure debt, security agreements, and other similar instruments
hereafter entered into which provide the Agent a lien, for the benefit of the
Agent and Lenders, on or other interest in any portion of the Premises or the
Real Estate or which relate to any such Lien or interest.
"Multi-employer Plan" means a "multi-employer plan" as defined
in Section 4001(a)(3) of ERISA which is or was at any time during the current
year or the immediately preceding six (6) years contributed to by the Borrower
or any ERISA Affiliate.
"Net Amount of Eligible Accounts" means, at any time, the
gross amount of Eligible Accounts less sales, excise or similar taxes, and less
returns, discounts, claims, credits and allowances of any nature at any time
issued, owing, granted, outstanding, available or claimed.
"Note and Warrant Purchase Agreement" means that certain Note
and Warrant Purchase Agreement dated as of February 29, 1996 and effective as of
March 8, 1996 among Centrum and the Investors, as amended and modified from time
to time.
"Notice of Borrowing" has the meaning specified in Section
2.2(b).
"Notice of Conversion/Continuation" has the meaning specified
in Section 3.2(b).
"Obligations" means all present and future loans, advances,
liabilities, obligations, covenants, duties, and debts owing by the Borrower to
the Agent and/or any Lender,
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arising under or pursuant to this Agreement (including, without limitation, all
fees provided under Article 3 or otherwise) or any of the other Loan Documents,
whether or not evidenced by any note, or other instrument or document, whether
arising from an extension of credit, opening of a letter of credit, acceptance,
loan, guaranty, indemnification or otherwise, whether direct or indirect
(including, without limitation, those acquired by assignment from others, and
any participation by the Agent and/or any Lender in the Borrower's debts owing
to others), absolute or contingent, due or to become due, primary or secondary,
as principal or guarantor, and including, without limitation, all principal,
interest, charges, expenses, fees, Attorney Costs, filing fees and any other
sums chargeable to the Borrower hereunder or under any of the other Loan
Documents. "Obligations" includes, without limitation, (a) all debts,
liabilities, and obligations now or hereafter owing from the Borrower to the
Agent and/or any Lender under or in connection with the Letters of Credit and
(b) all debts, liabilities and obligations now or hereafter owing from the
Borrower to the Agent and Lenders arising from or related to Swap Transactions
pursuant to the indemnity provided in Section 2.7 hereof.
"Other Taxes" means any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies which
arise from any payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any other Loan
Documents.
"Participant" means any Person who shall have been granted the
right by any Lender to participate in the financing provided by such Lender
under this Agreement, and who shall have entered into a participation agreement
in form and substance satisfactory to such Lender.
"Patent, Trademark and Copyright Agreements" means that
certain Collateral Assignment of Patents as Security from Micafil, that certain
Collateral Assignment of Trademarks as Security from AHI, that certain
Collateral Assignment of Trademarks as Security from MSC, and that certain
Collateral Assignment of Copyrights as Security from AHI, each dated as of the
date hereof, executed and delivered to the Agent to evidence and perfect the
Agent's security interest in the applicable Borrower's present and future
patents, trademarks, and related licenses and rights, for the benefit of the
Agent and the Lenders.
"Payment Account" means each blocked bank account established
pursuant to Section 6.9, to which the funds of the Borrower (including, without
limitation, proceeds of Accounts and other Collateral) are deposited or
credited, and which is maintained in the name of the Agent or the Borrower, as
the Agent may determine, on terms acceptable to the Agent.
"PBGC" means the Pension Benefit Guaranty Corporation or any
Governmental Authority succeeding to the functions thereof.
"Pending Revolving Loans" means, at any time, the aggregate
principal amount of all Revolving Loans requested in any Notice(s) of Borrowing
received by the Agent which have not yet been advanced.
"Pension Plan" means a pension plan (as defined in Section
3(2) of ERISA) subject to Title IV of ERISA which the Borrower sponsors,
maintains, or to which it makes, is
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making, or is obligated to make contributions, or in the case of a
Multiple-employer Plan has made contributions at any time during the immediately
preceding five (5) plan years.
"Permitted Liens" means:
(a) Liens for taxes not delinquent or statutory Liens
for taxes in an amount not to exceed $100,000 provided that the payment of such
taxes which are due and payable is being contested in good faith and by
appropriate proceedings diligently pursued and as to which adequate financial
reserves have been established on Borrower's books and records and a stay of
enforcement of any such Lien is in effect;
(b) the Agent's Liens;
(c) deposits under worker's compensation,
unemployment insurance, social security and other similar laws, or to secure the
performance of bids, tenders or contracts (other than for the repayment of
borrowed money) or to secure indemnity, performance or other similar bonds for
the performance of bids, tenders or contracts (other than for the repayment of
borrowed money) or to secure statutory obligations (other than liens arising
under ERISA or Environmental Liens) or surety or appeal bonds, or to secure
indemnity, performance or other similar bonds in the ordinary course of
business;
(d) Liens securing the claims or demands of
materialmen, mechanics, carriers, warehousemen, landlords and other like
Persons, provided that if any such Lien arises from the nonpayment of such
claims or demand when due, such claims or demands do not exceed $100,000 in the
aggregate or, in the case of claims or demands in favor of mechanics or
materialmen with respect to improvements to real property, such claims and
demand are being contested in good faith and by appropriate proceedings
diligently pursued and as to which adequate financial reserves have been
established on Borrower's books and records and, if the Agent so elects, against
Availability, and a stay of enforcement of any such Lien is in effect;
(e) "Permitted Encumbrances" as defined in each of
the Mortgages;
(f) Judgment and other similar Liens arising in
connection with court proceedings to the extent the attachment or enforcement of
such Liens would not result in an Event of Default hereunder;
(g) purchase money security interests securing Debt
for Borrowed Money for the purchase of Equipment in arms-length, commercially
reasonable transactions with persons who are not Affiliates; provided, however,
that (i) the Debt for Borrowed Money so secured shall not exceed the unpaid
purchase price of the Equipment acquired, plus reasonable finance charges and
the reasonable costs of collection (including, without limitation, reasonable
attorneys fees); (ii) each item of Equipment shall secure only its portion of
the indebtedness described in item (i); and (iii) the aggregate principal amount
of such indebtedness incurred in any fiscal year shall not exceed $500,000;
(h) Liens in favor of the Huntington National Bank
and other creditors to the extent such Liens, as part of the Permitted Uses, are
paid and satisfied as part of closing; and
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(i) as to Micafil, the existing mortgage on its real
estate in favor of -Asea Xxxxx Boveri, Inc.
"Permitted Rentals" has the meaning specified in Section 9.25.
"Permitted Uses" means (a) for the Revolving Loans and the
Term Loans on the Closing Date, the repayment in full of all Debt to (i) The
Huntington National Bank, (ii) the Pennsylvania Industrial Development
Authority, (iii) ECIDA Bonds, and (iv) General Electric Credit Corporation, (b)
for the Revolving Loans on the Closing Date, the payment of the Agent's,
Borrower's and Lenders' Attorney Fees and other fees and expenses related to
this Agreement, (c) for the Revolving Loans, the payment of expenses incurred in
the ordinary course of the Borrower's business, (d) for the Capital Expenditure
Loans, the purchase of new Equipment for the Project, (e) for the Acquisition
Line, the uses described in Section 2.6 , and (f) such other purposes as the
Agent and the Majority Lenders may expressly approve in writing from time to
time.
"Person" means any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization, association,
corporation, Governmental Authority, or any other entity.
"Plan" means an employee benefit plan (as defined in Section
3(3) of ERISA) which the Borrower sponsors or maintains or to which the Borrower
makes, is making, or is obligated to make contributions and includes any Pension
Plan.
"Premises" means the land identified by addresses on Schedule
8.10, together with all buildings, improvements, and fixtures thereon and all
tenements, hereditaments, and appurtenances belonging or in any way appertaining
thereto, and which constitutes all of the Real Estate in which the Borrower has
any interests on the Closing Date.
"Project" means a certain project to expand the capacity of
the MRR facility located at 0000 Xxxx 00xx Xxxxxx, Xxxx, Xxxxxxxxxxxx.
"Pro Rata Share" means, with respect to a Lender, a fraction
(expressed as a percentage), the numerator of which is the amount of such
Lender's Commitment and the denominator of which is the sum of the amounts of
all of the Lenders' Commitments, or if no Commitments are outstanding, a
fraction (expressed as a percentage), the numerator of which is the amount of
Obligations owed to such Lender and the denominator of which is the aggregate
amount of the Obligations owed to the Lenders.
"Proprietary Rights" means all of the Borrower's now owned and
hereafter arising or acquired: licenses, franchises, permits, patents, patent
rights, copyrights, works which are the subject matter of copyrights,
trademarks, service marks, trade names, trade styles, patent, trademark and
service xxxx applications, and all licenses and rights related to any of the
foregoing, including, without limitation, those patents, trademarks, service
marks, trade names and copyrights set forth on Schedule 8.11 hereto, and all
other rights under any of the foregoing, all extensions, renewals, reissues,
divisions, continuations, and continuations-in-part of any of the foregoing, and
all rights to xxx for past, present and future infringement of any of the
foregoing.
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"Real Estate" means all of the present and future interests of
the Borrower, as owner, lessee, or otherwise, in the Premises, including,
without limitation, any interest arising from an option to purchase or lease the
Premises or any portion thereof.
"Release" means a release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration of a
Contaminant into the indoor or outdoor environment or into or out of any Real
Estate or other property, including the movement of Contaminants through or in
the air, soil, surface water, groundwater or Real Estate or other property.
"Rentals" has the meaning specified in Section 9.25.
"Reportable Event" means, any of the events set forth in
Section 4043(b) of ERISA or the regulations thereunder, other than any such
event for which the 30-day notice requirement under ERISA has been waived in
regulations issued by the PBGC.
"Required Lenders" means at any time Lenders whose Pro Rata
Shares aggregate more than 51% of the Commitments or, if no Commitments shall
then be in effect, Lenders who hold more than 51% of the aggregate principal
amount of the Loans then outstanding.
"Requirement of Law" means, as to any Person, any law
(statutory or common), treaty, rule or regulation or determination of an
arbitrator or of a Governmental Authority, in each case applicable to or binding
upon the Person or any of its property or to which the Person or any of its
property is subject.
"Responsible Officer" means the chief executive officer, chief
financial officer, treasurer or the president of the Borrower, or any other
officer having substantially the same authority and responsibility; or, with
respect to compliance with financial covenants and the preparation of the
Borrowing Base Certificate, the chief financial officer or the treasurer of the
Borrower, or any other officer having substantially the same authority and
responsibility.
"Restricted Investment" means, as to any Person, any
acquisition of property by such Person in exchange for cash or other property,
whether in the form of an acquisition of stock, debt, or other indebtedness or
obligation, or the purchase or acquisition of any other property, or a loan,
advance, capital contribution, or subscription, except acquisitions of the
following: (a) Equipment to be used in the business of such Person so long as
the acquisition costs thereof constitute Capital Expenditures permitted
hereunder; (b) Inventory in the ordinary course of business; (c) current assets
arising from the sale or lease of goods or the rendition of services in the
ordinary course of business of such Person; (d) direct obligations of the United
States of America, or any agency thereof, or obligations guaranteed by the
United States of America, provided that such obligations mature within one year
from the date of acquisition thereof; (e) certificates of deposit maturing
within one year from the date of acquisition, bankers' acceptances, Eurodollar
bank deposits, or overnight bank deposits, in each case issued by, created by,
or with a bank or trust company organized under the laws of the United States or
any state thereof having capital and surplus aggregating at least $100,000,000;
and (f) commercial paper given a rating of "A2" or better by Standard & Poor's
Corporation or "P2" or better by
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Xxxxx'x Investors Service, Inc. and maturing not more than 90 days from the date
of creation thereof.
"Revolving Loans" has the meaning specified in Section 2.2 and
includes each Agent Advance and BABC Loan.
"Settlement" and "Settlement Date" have the meanings specified
in Section 2.2(j)(i).
"Solvent" means when used with respect to any Person that at
the time of determination:
(i) the assets of such Person, at a fair valuation, are in
excess of the total amount of its debts (including, without limitation,
contingent liabilities); and
(ii) the present fair saleable value of its assets is greater
than its probable liability on its existing debts as such debts become
absolute and matured; and
(iii) it is then able and expects to be able to pay its debts
(including, without limitation, contingent debts and other commitments)
as they mature; and
(iv) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
For purposes of determining whether a Person is Solvent, the amount of any
contingent liability shall be computed as the amount that, in light of all the
facts and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"Stated Termination Date" means February 28, 2002, subject to
possible extensions for the Lenders giving the requisite notice provided below
for successive periods of one (1) year (but in no event later than February 28,
2009) upon the written notice to the Agent all of the Lenders and the Borrower,
in the exercise of their respective sole and absolute discretion, which notice
shall be given no later than the December 30 immediately preceding the next
scheduled Stated Termination Date of their intention to extend the making of
Revolving Loans as of the next scheduled Stated Termination Date, provided,
however, that (i) in the event the Borrower and BABC (in its capacity as Agent
or Lender) have given such notice of their intent to extend the Stated
Termination Date, the interest of any Lender not giving such notice shall be
subject to repurchase by BABC, in the exercise of its sole and absolute
discretion, pursuant to the provisions of Section 14.4(c) of this Agreement and,
if all interests of those Lenders not giving notice are so repurchased, the
Stated Termination Date shall be extended, and (ii) in the event the notices
and/or repurchases required in clause (i) do not occur, there shall be no
extension.
"Subordinated Debt" means that certain Funded Debt in the
initial aggregate face principal amount of Two Million Five Hundred Thousand
Dollars ($2,500,000) and other indebtedness, liabilities and obligations of
Centrum described in or arising with respect to that
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certain Note and Warrant Purchase Agreement, among Centrum and the Debt for
Borrowed Money of Centrum in favor of the Investors.
"Subordinated Debt Loan Documents" means any and all
promissory notes, agreements, documents or instruments now or at any time
evidencing, securing, guarantying or otherwise executed and delivered in
connection with the Subordinated Debt, as the same may from time to time be
amended, restated, supplemented or modified.
"Subordination Agreement" means that certain Subordination
Agreement - Investors dated the same date as this Agreement, as amended,
modified, restated, substituted, extended and renewed from time to time.
"Subsidiary" of a Person means any corporation, association,
partnership, joint venture or other business entity of which more than fifty
percent (50%) of the voting stock or other equity interests (in the case of
Persons other than corporations), is owned or controlled directly or indirectly
by the Person, or one or more of the Subsidiaries of the Person, or a
combination thereof, provided that Micafil-Axis, L.L.C. shall not be considered
a Subsidiary. Unless the context otherwise clearly requires, references herein
to a "Subsidiary" refer to a Subsidiary of the Borrower.
"Swap Reserve" means any and all reserves which the Lender
from time to time establishes, in its sole discretion, with respect to Swap
Transactions.
"Swap Transactions" means any interest rate swap transaction,
forward rate transaction, treasury lock transaction, interest rate cap, floor or
collar transaction, any similar transaction, any option to enter into any of the
foregoing, or any combination of any of the foregoing.
"Taxes" means any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender and the Agent, such taxes
(including income taxes or franchise taxes) as are imposed on or measured by
each Lender's net income by the jurisdiction (or any political subdivision
thereof) under the laws of which such Lender or the Agent, as the case may be,
is organized or maintains a lending office.
"Term Loan" and "Term Loans" have the meanings specified in
Section 2.3(a).
"Term Loan Maturity Date" means the earlier of the Stated
Termination Date or February 1, 2006.
"Term Loan Note" and "Term Loan Notes" have the meanings
specified in Section 2.3(c).
"Termination Date" means the earliest to occur of (i) the
Stated Termination Date, (ii) the date the Total Facility is terminated either
by the Borrower pursuant to Section 4.2 or by the Majority Lenders pursuant to
Section 11.2, and (iii) the date this Agreement is otherwise terminated for any
reason whatsoever.
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"Total Facility" has the meaning specified in Section 2.1.
"UCC" means the Uniform Commercial Code (or any successor
statute) of the State of Illinois or of any other state the laws of which are
required by Section 9-103 thereof to be applied in connection with the issue of
perfection of security interests.
"Unfunded Pension Liability" means the excess of a Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.
"Unused Letter of Credit Subfacility" means an amount equal to
$5,000,000 minus the sum of (a) the aggregate undrawn amount of all outstanding
Letters of Credit plus (b) the aggregate unpaid reimbursement obligations with
respect to all Letters of Credit to the extent to which a draw has been made.
"Unused Line Fee" has the meaning specified in Section 3.5.
1.2 Accounting Terms. Any accounting term used in this Agreement
shall have, unless otherwise specifically provided herein, the meaning
customarily given in accordance with GAAP, and all financial computations
hereunder shall be computed, unless otherwise specifically provided herein, in
accordance with GAAP as consistently applied and using the same method for
inventory valuation as used in the preparation of the Financial Statements.
1.3 Interpretive Provisions. (a) The meanings of defined terms are
equally applicable to the singular and plural forms of the defined terms.
(b) The words "hereof," "herein," "hereunder" and similar
words refer to this Agreement as a whole and not to any particular provision of
this Agreement; and Subsection, Section, Schedule and Exhibit references are to
this Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all
instruments, documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(ii) The term "including" is not limiting and means
"including without limitation."
(iii) In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including," the words "to" and "until" each mean "to but excluding" and the word
"through" means "to and including."
(d) Unless otherwise expressly provided herein, (i) references
to agreements (including this Agreement and the other Loan Documents) and other
documents shall be deemed to include all subsequent amendments, modifications,
restatements, substitutions, extensions and renewals thereto from time to time,
but only to the extent the same are not prohibited by the terms of any Loan
Document, and (ii) references to any statute or regulation are to be construed
as including all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting the statute or regulation.
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(e) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
(f) This Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms.
(g) This Agreement and the other Loan Documents are the result
of negotiations among and have been reviewed by counsel to the Agent, the
Borrower and the other parties, and are the products of all parties.
Accordingly, they shall not be construed against the Lenders or the Agent merely
because of the Agent's or Lenders' involvement in their preparation.
(h) Without implying any limitation on the provisions of
Section 15.17 of this Agreement, reference in this Agreement and the other
Financing Documents to the "Borrower", the "Borrowers", "each Borrower" or
otherwise with respect to any one or more of the Borrowers shall mean each and
every Person included from time to time in the term "Borrower" and any one or
more of the Borrowers, jointly and severally, unless a specific Borrower is
expressly identified.
ARTICLE 2
LOANS AND LETTERS OF CREDIT
2.1 Total Facility. Subject to all of the terms and conditions of this
Agreement, the Lenders severally agree to make available a total credit facility
of up to $46,500,000 (the "Total Facility") for the Borrower's use from time to
time during the term of this Agreement. The Total Facility shall be comprised
of: (a) a revolving line of credit consisting of revolving loans and letters of
credit up to the Maximum Revolver Amount, as described in Sections 2.2 and 2.4;
(b) the Term Loans described in Section 2.3 in the aggregate amount of
$13,500,000; (c) a capital expenditure line up to $8,000,000, as described in
Section 2.5; and (d) an acquisition line up to $5,000,000, as described in
Section 2.6. The proceeds of each advance under the Loans shall be used by the
Borrower for Permitted Uses, and for no other purposes except as may otherwise
be agreed by the Majority Lenders in writing. The Borrower shall use the
proceeds of the Loans promptly.
2.2 Revolving Loans. (a) Amounts. Subject to the satisfaction of the
conditions precedent set forth in Article 10, each Lender severally agrees, upon
the Borrower's request from time to time on any Business Day during the period
from the Closing Date to the Termination Date, to make revolving loans (the
"Revolving Loans") to the Borrower, in amounts not to exceed (except for BABC
with respect to BABC Loans or Agent Advances) such Lender's Pro Rata Share of
the Borrower's Availability. The Lenders, however, in their discretion, may
elect to make Revolving Loans or participate (as provided for in Section 2.4(f))
in the credit support or enhancement provided through the Agent to the issuers
of Letters of Credit in excess of the Availability on one or more occasions, but
if they do so, neither the Agent nor the Lenders shall
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be deemed thereby to have changed the limits of the Maximum Revolver Amount or
the Availability or to be obligated to exceed such limits on any other occasion.
If the Aggregate Revolver Outstandings exceeds the Availability (with the
Availability for this purpose calculated as if the Aggregate Revolver
Outstandings were zero), the Lenders may refuse to make or otherwise restrict
the making of Revolving Loans as the Lenders determine until such excess has
been eliminated, subject to the Agent's authority, in its sole discretion, to
make Agent Advances pursuant to the terms of Section 2.2(i).
(b) Procedure for Borrowing. (1) Each Borrowing shall be made
upon the Borrower's irrevocable written notice delivered to the Agent in the
form of a notice of borrowing ("Notice of Borrowing") in substantially the form
attached to this Agreement as EXHIBIT E or in such other form as the Agent may
require from time to time, together with a Borrowing Base Certificate (which
must be received by the Agent prior to 11 a.m. (Chicago time)) reflecting
sufficient Availability (i) three (3) Business Days prior to the requested
Funding Date, in the case of LIBOR Rate Loans and (ii) no later than 11:00 a.m.
(Chicago time) on the requested Funding Date, in the case of Base Rate Loans,
specifying:
(A) the amount of the Borrowing;
(B) the requested Funding Date, which shall be a
Business Day;
(C) whether the Revolving Loans requested are to be
Base Rate Revolving Loans or LIBOR Revolving Loans; and
(D) the duration of the Interest Period if the
requested Revolving Loans are to be LIBOR Revolving Loans. If the
Notice of Borrowing fails to specify the duration of the Interest
Period for any Borrowing comprised of LIBOR Rate Loans, such Interest
Period shall be one month;
provided, however, that with respect to the Borrowing to be made on the Closing
Date, such Borrowings will consist of Base Rate Revolving Loans only.
(2) With respect to any request for Base Rate Revolving
Loans, in lieu of delivering the above-described Notice of Borrowing the
Borrower may give the Agent telephonic notice of such request by the required
time, with such telephonic notice to be confirmed in writing within 24 hours of
the giving of such notice but the Agent shall be entitled to rely on the
telephonic notice in making such Revolving Loans.
(c) Reliance upon Authority. On or prior to the Closing Date
and thereafter prior to any change with respect to any of the information
contained in the following clauses (i) and (ii), the Borrower shall deliver to
the Agent a writing setting forth (i) the account of the Borrower to which the
Agent is authorized to transfer the proceeds of the Revolving Loans requested
pursuant to this Section 2.2, and (ii) the names of the persons authorized to
request Revolving Loans on behalf of the Borrower, and shall provide the Agent
with a specimen signature of each such person. The Agent shall be entitled to
rely conclusively on such person's authority to request Revolving Loans on
behalf of the Borrower, the proceeds of which are to be transferred to any of
the accounts specified by the Borrower pursuant to the immediately
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35
preceding sentence, until the Agent receives written notice to the contrary. The
Agent shall have no duty to verify the identity of any individual representing
him or herself as one of the officers authorized by the Borrower to make such
requests on its behalf.
(d) No Liability. The Agent shall not incur any liability to
the Borrower as a result of acting upon any notice referred to in Sections
2.2(b) and (c), which notice the Agent believes in good faith to have been given
by a person duly authorized by the Borrower to request Revolving Loans on its
behalf or for otherwise acting in good faith under this Section 2.2, and the
crediting of Revolving Loans to the Borrower's deposit account, or transmittal
to such Person as the Borrower shall direct, shall conclusively establish the
obligation of the Borrower to repay such Revolving Loans as provided herein.
(e) Notice Irrevocable. Any Notice of Borrowing (or telephonic
notice in lieu thereof) made pursuant to Section 2.2(b) shall be irrevocable and
the Borrower shall be bound to borrow the funds requested therein in accordance
therewith.
(f) Agent's Election. Promptly after receipt of a Notice of
Borrowing (or telephonic notice in lieu thereof) pursuant to Section 2.2(b), the
Agent shall elect, in its discretion, (i) to have the terms of Section 2.2(g)
apply to such requested Borrowing, or (ii) to request BABC to make a BABC Loan
pursuant to the terms of Section 2.2(h) in the amount of the requested
Borrowing; provided, however, that if BABC declines in its sole discretion to
make a BABC Loan pursuant to Section 2.2(h), the Agent shall elect to have the
terms of Section 2.2(g) apply to such requested Borrowing. Nothing in this
Section 2.2(f) or in Section 2.2(g) or Section 2.2(h) shall be interpreted to
relieve BABC of its obligation to make Revolving Loans under its commitment.
(g) Making of Revolving Loans. (i) In the event that the Agent
shall elect to have the terms of this Section 2.2(g) apply to a requested
Borrowing as described in Section 2.2(f), then promptly after receipt of a
Notice of Borrowing or telephonic notice pursuant to Section 2.2(b), the Agent
shall notify the Lenders by telecopy, telephone or other similar form of
transmission, of the requested Borrowing. Each Lender shall make the amount of
such Lender's Pro Rata Share of the requested Borrowing available to the Agent
in same day funds, to such account of the Agent as the Agent may designate, not
later than 1 p.m., (Chicago time) on the Funding Date applicable thereto. After
the Agent's receipt of the proceeds of such Revolving Loans, upon satisfaction
of the applicable conditions precedent set forth in Article 10, the Agent shall
make the proceeds of such Revolving Loans available to the Borrower on the
applicable Funding Date by transferring same day funds equal to the proceeds of
such Revolving Loans received by the Agent to the account of the Borrower,
designated in writing by the Borrower and acceptable to the Agent; provided,
however, that the amount of Revolving Loans so made on any date shall in no
event exceed the Availability on such date.
(ii) Unless the Agent receives notice from a Lender on or
prior to the Closing Date or, with respect to any Borrowing after the Closing
Date, at least one Business Day prior to the date of such Borrowing, that such
Lender will not make available as and when required hereunder to the Agent for
the account of the Borrower the amount of that Lender's Pro Rata Share of the
Borrowing, the Agent may assume that each Lender has made such amount available
to the Agent in immediately available funds on the Funding Date and the Agent
may
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36
(but shall not be so required), in reliance upon such assumption, make available
to the Borrower on such date a corresponding amount. If and to the extent any
Lender shall not have made its full amount available to the Agent in immediately
available funds and the Agent in such circumstances has made available to the
Borrower such amount, that Lender shall on the Business Day following such
Funding Date make such amount available to the Agent, together with interest at
the Federal Funds Rate for each day during such period. A notice of the Agent
submitted to any Lender with respect to amounts owing under this subsection
shall be conclusive, absent manifest error. If such amount is so made available,
such payment to the Agent shall constitute such Lender's Loan on the payment
date for all purposes of this Agreement. If such amount is not made available to
the Agent on the Business Day following the Funding Date, the Agent will notify
the Borrower of such failure to fund and, upon demand by the Agent, the Borrower
shall pay such amount to the Agent for the Agent's account, together with
interest thereon for each day elapsed since the date of such Borrowing, at a
rate per annum equal to the Interest Rate applicable at the time to the Loans
comprising such Borrowing. The failure of any Lender to make any Loan on any
Funding Date (any such Lender, prior to the cure of such failure, being
hereinafter referred to as a "Defaulting Lender") shall not relieve any other
Lender of any obligation hereunder to make a Loan on such Funding Date, but no
Lender shall be responsible for the failure of any other Lender to make the Loan
to be made by such other Lender on any Funding Date.
(iii) The Agent shall not be obligated to transfer to a
Defaulting Lender any payments made by Borrower to the Agent for the Defaulting
Lender's benefit; nor shall a Defaulting Lender be entitled to the sharing of
any payments hereunder. Amounts payable to a Defaulting Lender shall instead be
paid to or retained by the Agent. The Agent may hold and, in its discretion,
re-lend to Borrower the amount of all such payments received or retained by it
for the account of such Defaulting Lender. Any amounts so re-lent to the
Borrower shall bear interest at the rate applicable to Base Rate Revolving Loans
and for all other purposes of this Agreement shall be treated as if they were
Revolving Loans, provided, however, that for purposes of voting or consenting to
matters with respect to the Loan Documents and determining Pro Rata Shares, such
Defaulting Lender shall be deemed not to be a "Lender" and such Lender's
Commitment shall be deemed to be zero (-0-). Until a Defaulting Lender cures its
failure to fund its Pro Rata Share of any Borrowing (1) such Defaulting Lender
shall not be entitled to any portion of the Unused Line Fee and (2) the Unused
Line Fee shall accrue in favor of the Lenders which have funded their respective
Pro Rata Shares of such requested Borrowing and shall be allocated among such
performing Lenders ratably based upon their relative Commitments. This Section
shall remain effective with respect to such Lender until such time as the
Defaulting Lender shall no longer be in default of any of its obligations under
this Agreement. The terms of this Section shall not be construed to increase or
otherwise affect the Commitment of any Lender, or relieve or excuse the
performance by the Borrower of its duties and obligations hereunder.
(h) Making of BABC Loans. (i) In the event the Agent shall
elect, with the consent of BABC, to have the terms of this Section 2.2(h) apply
to a requested Borrowing as described in Section 2.2(f), BABC shall make a
Revolving Loan in the amount of such Borrowing (any such Revolving Loan made
solely by BABC pursuant to this Section 2.2(h) being referred to as a "BABC
Loan" and such Revolving Loans being referred to collectively as "BABC Loans")
available to the Borrower on the Funding Date applicable thereto by
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37
transferring same day funds to an account of the Borrower, designated in writing
by the Borrower and acceptable to the Agent. Each BABC Loan is a Revolving Loan
hereunder and shall be subject to all the terms and conditions applicable to
other Revolving Loans except that all payments thereon shall be payable to BABC
solely for its own account (and for the account of the holder of any
participation interest with respect to such Revolving Loan). The Agent shall not
request BABC to make any BABC Loan if (i) the Agent shall have received written
notice from any Lender, or otherwise has actual knowledge, that one or more of
the applicable conditions precedent set forth in Article 10 will not be
satisfied on the requested Funding Date for the applicable Borrowing, or (ii)
the requested Borrowing would exceed the Availability on such Funding Date. BABC
shall not otherwise be required to determine whether the applicable conditions
precedent set forth in Article 10 have been satisfied or the requested Borrowing
would exceed the Availability on the Funding Date applicable thereto prior to
making, in its sole discretion, any BABC Loan.
(ii) The BABC Loans shall be secured by the Collateral, shall
constitute Revolving Loans and Obligations hereunder, and shall bear interest at
the rate applicable to the Revolving Loans from time to time.
(i) Agent Advances. (i) Subject to the limitations set forth
in the provisos contained in this Section 2.2(i), the Agent is hereby authorized
by the Borrower and the Lenders, from time to time in the Agent's sole
discretion, (1) after the occurrence of a Default or an Event of Default, or (2)
at any time that any of the other applicable conditions precedent set forth in
Article 10 have not been satisfied, to make Revolving Loans to the Borrower on
behalf of the Lenders which the Agent, in its reasonable business judgment,
deems necessary or desirable (A) to preserve or protect the Collateral, or any
portion thereof, (B) to enhance the likelihood of, or maximize the amount of,
repayment of the Loans and other Obligations, or (C) to pay any other amount
chargeable to the Borrower pursuant to the terms of this Agreement, including,
without limitation, costs, fees and expenses as described in Section 15.7 (any
of the advances described in this Section 2.2(i) being hereinafter referred to
as "Agent Advances"); provided, that the Required Lenders may at any time revoke
the Agent's authorization contained in this Section 2.2(i) to make Agent
Advances, any such revocation to be in writing and to become effective
prospectively upon the Agent's receipt thereof.
(ii) The Agent Advances shall be repayable on demand and
secured by the Collateral, shall constitute Revolving Loans and Obligations
hereunder, and shall bear interest at the rate applicable to the Revolving Loans
from time to time. The Agent shall notify each Lender and the Borrower in
writing of each such Agent Advance.
(j) Settlement. It is agreed that each Lender's funded portion
of the Revolving Loan is intended by the Lenders to be equal at all times to
such Lender's Pro Rata Share of the outstanding Revolving Loans. Notwithstanding
such agreement, the Agent, BABC, and the other Lenders agree (which agreement
shall not be for the benefit of or enforceable by the Borrower) that in order to
facilitate the administration of this Agreement and the other Loan Documents,
settlement among them as to the Revolving Loans, the BABC Loans and the Agent
Advances shall take place on a periodic basis in accordance with the following
provisions:
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38
(i) The Agent shall request settlement ("Settlement") with the
Lenders on a weekly basis, or on a more frequent basis if so determined by the
Agent, (1) on behalf of BABC, with respect to each outstanding BABC Loan, (2)
for itself, with respect to each Agent Advance, and (3) with respect to
collections received, in each case, by notifying the Lenders of such requested
Settlement by telecopy, telephone or other similar form of transmission, of such
requested Settlement, no later than 10 a.m. (Chicago time) on the date of such
requested Settlement (the "Settlement Date"). Each Lender (other than BABC, in
the case of BABC Loans) shall make the amount of such Lender's Pro Rata Share of
the outstanding principal amount of the BABC Loans and Agent Advances with
respect to which Settlement is requested available to the Agent, for itself or
for the account of BABC, in same day funds, to such account of the Agent as the
Agent may designate, not later than 1 p.m. (Chicago time), on the Settlement
Date applicable thereto, regardless of whether the applicable conditions
precedent set forth in Article 10 have then been satisfied. Such amounts made
available to the Agent shall be applied against the amounts of the applicable
BABC Loan or Agent Advance and, together with the portion of such BABC Loan or
Agent Advance representing BABC's Pro Rata Share thereof, shall constitute
Revolving Loans of such Lenders. If any such amount is not made available to the
Agent by any Lender on the Settlement Date applicable thereto, the Agent shall
be entitled to recover such amount on demand from such Lender together with
interest thereon at the Federal Funds Rate for the first three (3) days from and
after the Settlement Date and thereafter at the Interest Rate then applicable to
the Revolving Loans.
(ii) Notwithstanding the foregoing, not more than one (1)
Business Day after demand is made by the Agent (whether before or after the
occurrence of a Default or an Event of Default and regardless of whether the
Agent has requested a Settlement with respect to a BABC Loan or Agent Advance),
each other Lender shall irrevocably and unconditionally purchase and receive
from BABC or the Agent, as applicable, without recourse or warranty, an
undivided interest and participation in such BABC Loan or Agent Advance to the
extent of such Lender's Pro Rata Share thereof by paying to the Agent, in same
day funds, an amount equal to such Lender's Pro Rata Share of such BABC Loan or
Agent Advance. If such amount is not in fact made available to the Agent by any
Lender, the Agent shall be entitled to recover such amount on demand from such
Lender together with interest thereon at the Federal Funds Rate for the first
three (3) days from and after such demand and thereafter at the Interest Rate
then applicable to the Revolving Loans.
(iii) From and after the date, if any, on which any Lender
purchases an undivided interest and participation in any BABC Loan or Agent
Advance pursuant to subsection (ii) above, the Agent shall promptly distribute
to such Lender at such address as such Lender may request in writing, such
Lender's Pro Rata Share of all payments of principal and interest and all
proceeds of Collateral received by the Agent in respect of such BABC Loan or
Agent Advance.
(iv) Between Settlement Dates, the Agent, to the extent no
Agent Advances or BABC Loans are outstanding, may pay over to BABC any payments
received by the Agent, which in accordance with the terms of this Agreement
would be applied to the reduction of the Revolving Loans, for application to
BABC's other outstanding Revolving Loans. If, as of any Settlement Date,
collections received since the then immediately preceding Settlement Date have
been applied to BABC's other outstanding Revolving Loans other than to BABC
Loans or Agent
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39
Advances, as provided for in the previous sentence, BABC shall pay to the Agent
for the accounts of the Lenders, to be applied to the outstanding Revolving
Loans of such Lenders, an amount such that each Lender shall, upon receipt of
such amount, have, as of such Settlement Date, its Pro Rata Share of the
Revolving Loans. During the period between Settlement Dates, BABC with respect
to BABC Loans, the Agent with respect to Agent Advances, and each Lender with
respect to the Revolving Loans other than BABC Loans and Agent Advances, shall
be entitled to interest at the applicable rate or rates payable under this
Agreement on the actual average daily amount of funds employed by BABC, the
Agent and the other Lenders.
(k) Notation. The Agent shall record on its books the
principal amount of the Revolving Loans owing to each Lender, including the BABC
Loans owing to BABC, and the Agent Advances owing to the Agent, from time to
time. In addition, each Lender is authorized, at such Lender's option, to note
the date and amount of each payment or prepayment of principal of such Lender's
Revolving Loans in its books and records, including computer records, such books
and records constituting rebuttably presumptive evidence, absent manifest error,
of the accuracy of the information contained therein.
(l) Lenders' Failure to Perform. All Loans (other than BABC
Loans and Agent Advances) shall be made by the Lenders simultaneously and in
accordance with their Pro Rata Shares. It is understood that (a) no Lender shall
be responsible for any failure by any other Lender to perform its obligation to
make any Loans hereunder, nor shall any Commitment of any Lender be increased or
decreased as a result of any failure by any other Lender to perform its
obligation to make any Loans hereunder, (b) no failure by any Lender to perform
its obligation to make any Loans hereunder shall excuse any other Lender from
its obligation to make any Loans hereunder, and (c) the obligations of each
Lender hereunder shall be several, not joint and several.
2.3 Term Loans.
(a) Amounts of Term Loans. Each Lender severally agrees to
make a term loan (any such term loan being referred to as a "Term Loan" and such
term loans being referred to collectively as the "Term Loans") to the Borrower
on the Closing Date, upon the satisfaction of the conditions precedent set forth
in Article 10, in an amount equal to such Lender's Pro Rata Share of
$13,500,000. The Term Loans shall initially be Base Rate Term Loans.
(b) Making of Term Loans. Each Lender shall make the amount of
such Lender's Term Loan available to the Agent in same day funds, to such
account of the Agent as the Agent may designate, not later than 1 p.m. (Chicago
time) on the Closing Date. After the Agent's receipt of the proceeds of such
Term Loans, upon satisfaction of the conditions precedent set forth in Article
10, the Agent shall make the proceeds of such Term Loans available to the
Borrower on such Funding Date by transferring same day funds equal to the
proceeds of such Term Loans received by the Agent to an account of the Borrower
designated in writing by the Borrower or as the Borrower shall otherwise
instruct in writing.
(c) Term Loan Notes. The Borrower shall execute and deliver to
the Agent on behalf of each Lender, on the Closing Date, a promissory note,
substantially in the form of EXHIBIT A attached hereto and made a part hereof
(such promissory notes, together with any
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40
new notes issued pursuant to Section 13.3(d) upon the assignment of any portion
of any Lender's Term Loan, being hereinafter referred to collectively as the
"Term Loan Notes" and each of such promissory notes being hereinafter referred
to individually as a "Term Loan Note"), to evidence such Lender's Term Loan, in
an original principal amount equal to the amount of such Lender's Pro Rata Share
of $13,500,000, with other appropriate insertions.
The principal amount of the Term Loan Notes delivered to the
Agent on behalf of each Lender shall be dated the Closing Date and stated to
mature on the Term Loan Maturity Date.
The Borrower shall make quarterly installment payments on the
first day of each May, August, November and February hereafter, commencing on
May 1, 1999 in the aggregate amount as follows:
--------------------------------------------------------------------------------
Aggregate Quarterly
Payment Date Installment Payment
--------------------------------------------------------------------------------
May 1, August 1, November 1, 1999 and $375,000
February 1, 2000
--------------------------------------------------------------------------------
May 1, August 1, November 1, 2000 and $437,500
February 1, 2001
--------------------------------------------------------------------------------
May 1, August 1, November 1, 2001 and $500,000
February 1, 2002
--------------------------------------------------------------------------------
May 1, August 1, November 1, 2002 and $562,500
February 1, 2003
--------------------------------------------------------------------------------
May 1, August 1, November 1, 2003 and $625,000
February 1, 2004
--------------------------------------------------------------------------------
May 1, August 1, November 1, 2004 and $687,500
February 1, 2005
--------------------------------------------------------------------------------
May 1, August 1, November 1, 2005 and $187,500
February 1, 2006
--------------------------------------------------------------------------------
Each such installment shall be payable to the Agent for the
account of the applicable Lender in accordance with such Lender's Pro Rata
Share.
(d) Notation and Endorsement. The Agent shall record on its
books the principal amount of the Term Loans owing to 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
Term Loans in its books and records, such books and records constituting
rebuttably presumptive evidence, absent manifest error, of the accuracy of the
information contained therein. Prior to the transfer of a Term Loan Note, the
applicable Lender shall endorse on the reverse side thereof the outstanding
principal balance of the Term Loan evidenced thereby. Failure by such Lender to
make such notation or endorsement shall not affect the obligations of the
Borrower under such Term Loan Note or any of the other Loan Documents.
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41
2.4 Letters of Credit.
(a) Agreement to Cause Issuance. Subject to the terms and
conditions of this Agreement, and in reliance upon the representations and
warranties of the Borrower herein set forth, the Agent agrees (i) to take
reasonable steps to cause to be issued for the account of the Borrower one or
more commercial/documentary and standby letters of credit ("Letters of Credit")
and (ii) to provide credit support or other enhancement to banks acceptable to
Agent, which issue Letters of Credit for the account of the Borrower (any such
credit support or enhancement being herein referred to as a "Credit Support") in
accordance with this Section 2.4 from time to time during the term of this
Agreement. The Agent may in its sole discretion, exercised from time to time,
elect to be the issuer of Letters of Credit, with all the requirements, rights
and benefits referred to in this Agreement with respect to issuers of letter of
credit inuring to the Agent's benefit and with all present and future
liabilities, obligations, covenants and duties (including, without limitation,
those under letter of credit applications and reimbursement agreements) of the
Borrower to the Agent with respect to such Letters of Credit being part of the
Obligations which are secured by the Collateral.
(b) Amounts; Outside Expiration Date. The Agent shall not have
any obligation to take steps to cause to be issued any Letter of Credit or to
provide Credit Support for any Letter of Credit at any time if: (1) the maximum
undrawn amount of the requested Letter of Credit is greater than the Unused
Letter of Credit Subfacility at such time; (2) the maximum undrawn amount of the
requested Letter of Credit and all commissions, fees, and charges due from the
Borrower in connection with the opening thereof exceed the Availability of the
Borrower at such time; or (3) such Letter of Credit has an expiration date later
than thirty (30) days prior to the Stated Termination Date or more than twelve
(12) months from the date of issuance.
(c) Other Conditions. In addition to being subject to the
satisfaction of the applicable conditions precedent contained in Article 10, the
obligation of the Agent to take reasonable steps to cause to be issued any
Letter of Credit or to provide Credit Support for any Letter of Credit is
subject to the following conditions precedent having been satisfied in a manner
satisfactory to the Agent:
(1) The Borrower shall have delivered to the proposed
issuer of such Letter of Credit, at such times and in such manner as such
proposed issuer may prescribe, an application in form and substance satisfactory
to such proposed issuer and the Agent for the issuance of the Letter of Credit
and such other documents as may be required pursuant to the terms thereof, and
the form and terms of the proposed Letter of Credit shall be satisfactory to the
Agent and such proposed issuer; and
(2) As of the date of issuance, no order of any court,
arbitrator or Governmental Authority shall purport by its terms to enjoin or
restrain money center banks generally from issuing letters of credit of the type
and in the amount of the proposed Letter of Credit, and no law, rule or
regulation applicable to money center banks generally and no request or
directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over money center banks generally shall prohibit, or
request that the proposed issuer
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42
of such Letter of Credit refrain from, the issuance of letters of credit
generally or the issuance of such Letters of Credit.
(d) Issuance of Letters of Credit.
(1) Request for Issuance. The Borrower shall give the
Agent three (3) Business Days' prior written notice of the Borrower's request
for the issuance of a Letter of Credit. Such notice shall be irrevocable and
shall specify the original face amount of the Letter of Credit requested, the
effective date (which date shall be a Business Day) of issuance of such
requested Letter of Credit, whether such Letter of Credit may be drawn in a
single or in partial draws, the date on which such requested Letter of Credit is
to expire (which date shall be a Business Day), the purpose for which such
Letter of Credit is to be issued, and the beneficiary of the requested Letter of
Credit. The Borrower shall attach to such notice the proposed form of the Letter
of Credit.
(2) Responsibilities of the Agent; Issuance. The Agent
shall determine, as of the Business Day immediately preceding the requested
effective date of issuance of the Letter of Credit set forth in the notice from
the Borrower pursuant to Section 2.4(d)(1), (i) the amount of the applicable
Unused Letter of Credit Subfacility and (ii) the Availability as of such date.
If (i) the undrawn amount of the requested Letter of Credit is not greater than
the applicable Unused Letter of Credit Subfacility and (ii) the issuance of such
requested Letter of Credit and all commissions, fees, and charges due from the
Borrower in connection with the opening thereof would not exceed the
Availability of the Borrower, the Agent shall take reasonable steps to cause
such issuer to issue the requested Letter of Credit on such requested effective
date of issuance.
(3) Notice of Issuance. On each Settlement Date the Agent
shall give notice to each Lender of the issuance of all Letters of Credit issued
since the last Settlement Date.
(4) No Extensions or Amendment. The Agent shall not be
obligated to cause any Letter of Credit to be extended or amended unless the
requirements of this Section 2.4(d) are met as though a new Letter of Credit
were being requested and issued. With respect to any Letter of Credit which
contains any "evergreen" or automatic renewal provision, each Lender shall be
deemed to have consented to any such extension or renewal unless any such Lender
shall have provided to the Agent, not less than 30 days prior to the last date
on which the applicable issuer can in accordance with the terms of the
applicable Letter of Credit decline to extend or renew such Letter of Credit,
written notice that it declines to consent to any such extension or renewal,
provided, that if all of the requirements of this Section 2.4 are met and no
Default or Event of Default exists, no Lender shall decline to consent to any
such extension or renewal.
(e) Payments Pursuant to Letters of Credit.
(1) Payment of Letter of Credit Obligations. The Borrower
agrees to reimburse the issuer for any draw under any Letter of Credit and the
Agent for the account of the Lenders upon any payment pursuant to any Credit
Support immediately upon demand, and to
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43
pay the issuer of the Letter of Credit the amount of all other obligations and
other amounts payable to such issuer under or in connection with any Letter of
Credit immediately when due, irrespective of any claim, setoff, defense or other
right which the Borrower may have at any time against such issuer or any other
Person.
(2) Revolving Loans to Satisfy Reimbursement Obligations.
In the event that the issuer of any Letter of Credit honors a draw under such
Letter of Credit or the Agent shall have made any payment pursuant to any Credit
Support and the Borrower shall not have repaid such amount to the issuer of such
Letter of Credit or the Agent, as applicable, pursuant to Section 2.4(e)(1), the
Agent shall, upon receiving notice of such failure, notify each Lender of such
failure, and each Lender shall unconditionally pay to the Agent, for the account
of such issuer or the Agent, as applicable, as and when provided hereinbelow, an
amount equal to such Lender's Pro Rata Share of the amount of such payment in
Dollars and in same day funds. If the Agent so notifies the Lenders prior to 10
a.m. (Chicago time) on any Business Day, each Lender shall make available to the
Agent the amount of such payment, as provided in the immediately preceding
sentence, on such Business Day. Such amounts paid by the Lenders to the Agent
shall constitute Revolving Loans which shall be deemed to have been requested by
the Borrower pursuant to Section 2.2 as set forth in Section 4.1.
(f) Participations.
(1) Purchase of Participations. Immediately upon issuance
of any Letter of Credit in accordance with Section 2.4(d), each Lender shall be
deemed to have irrevocably and unconditionally purchased and received without
recourse or warranty, an undivided interest and participation in the Letter of
Credit or the Credit Support provided through the Agent to such issuer in
connection with the issuance of such Letter of Credit, equal to such Lender's
Pro Rata Share of the face amount of such Letter of Credit or the amount of such
Credit Support (including, without limitation, all obligations of the Borrower
with respect thereto, and any security therefor or guaranty pertaining thereto).
(2) Sharing of Reimbursement Obligation Payments. Whenever
the Agent receives a payment from the Borrower on account of reimbursement
obligations in respect of a Letter of Credit or Credit Support as to which the
Agent has previously received for the account of the issuer thereof payment from
a Lender pursuant to Section 2.4(e)(2), the Agent shall promptly pay to such
Lender such Lender's Pro Rata Share of such payment from the Borrower in
Dollars. Each such payment shall be made by the Agent on the Business Day on
which the Agent receives immediately available funds paid to such Person
pursuant to the immediately preceding sentence, if received prior to 1 p.m.
(Chicago time) on such Business Day and otherwise on the next succeeding
Business Day.
(3) Documentation. Upon the request of any Lender, the
Agent shall furnish to such Lender copies of any Letter of Credit, reimbursement
agreements executed in connection therewith, application for any Letter of
Credit and credit support or enhancement provided through the Agent in
connection with the issuance of any Letter of Credit, and such other
documentation as may reasonably be requested by such Lender.
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44
(4) Obligations Irrevocable. The obligations of each
Lender to make payments to the Agent with respect to any Letter of Credit or
with respect to any Credit Support provided through the Agent with respect to a
Letter of Credit, and the obligations of the Borrower to make payments to the
Agent, for the account of the Lenders, shall be irrevocable, not subject to any
qualification or exception whatsoever , including, without limitation, any of
the following circumstances:
(i) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or
other right which the Borrower may have at any time against a beneficiary named
in a Letter of Credit or any transferee of any Letter of Credit (or any Person
for whom any such transferee may be acting), any Lender, the Agent, the issuer
of such Letter of Credit, or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein or any
unrelated transactions (including any underlying transactions between the
Borrower or any other Person and the beneficiary named in any Letter of Credit);
(iii) any draft, certificate or any other document
presented under the Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for
the performance or observance of any of the terms of any of the Loan Documents;
or
(v) the occurrence of any Default or Event of
Default.
(g) Recovery or Avoidance of Payments. In the event any
payment by or on behalf of the Borrower received by the Agent with respect to
any Letter of Credit or Credit Support provided for any Letter of Credit (or any
guaranty by the Borrower or reimbursement obligation of the Borrower relating
thereto) and distributed by the Agent to the Lenders on account of their
respective participations therein is thereafter set aside, avoided or recovered
from the Agent in connection with any receivership, liquidation or bankruptcy
proceeding, the Lenders shall, upon demand by the Agent, pay to the Agent their
respective Pro Rata Shares of such amount set aside, avoided or recovered,
together with interest at the rate required to be paid by the Agent upon the
amount required to be repaid by it.
(h) Compensation for Letters of Credit.
(1) Letter of Credit Fee. The Borrower agrees to pay to
the Agent with respect to each Letter of Credit, for the account of the Lenders,
the Letter of Credit Fee specified in, and in accordance with the terms of,
Section 3.6.
(2) Issuer Fees and Charges. The Borrower shall pay to the
issuer of any Letter of Credit, or to the Agent, for the account of the issuer
of any such Letter of Credit, solely for such issuer's account, such fees and
other charges as are charged by such issuer for letters of credit issued by it,
including, without limitation, its standard fees for issuing,
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45
administering, amending, renewing, paying and canceling letters of credit and
all other fees associated with issuing or servicing letters of credit, as and
when assessed.
(i) Indemnification; Exoneration; Power of Attorney
(1) Indemnification. In addition to amounts payable as
elsewhere provided in this Section 2.4, the Borrower hereby agrees to protect,
indemnify, pay and save the Lenders and the Agent harmless from and against any
and all claims, demands, liabilities, damages, losses, costs, charges and
expenses (including Attorney Costs) which any Lender or the Agent may incur or
be subject to as a consequence, direct or indirect, of the issuance of any
Letter of Credit or the provision of any credit support or enhancement in
connection therewith, provided that such indemnification shall not extend to
acts of gross negligence or willful misconduct on the part of the Lenders or the
Agent. The agreement in this Section 2.4(i)(1) shall survive payment of all
Obligations.
(2) Assumption of Risk by the Borrower. As among the
Borrower, the Lenders, and the Agent, the Borrower assumes all risks of the acts
and omissions of, or misuse of any of the Letters of Credit by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing, the Lenders and the Agent shall not be responsible for: (A) the
form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any Person in connection with the application for and
issuance of and presentation of drafts with respect to any of the Letters of
Credit, even if it should prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) the validity or sufficiency
of any instrument transferring or assigning or purporting to transfer or assign
any Letter of Credit or the rights or benefits thereunder or proceeds thereof,
in whole or in part, which may prove to be invalid or ineffective for any
reason; (C) the failure of the beneficiary of any Letter of Credit to comply
duly with conditions required in order to draw upon such Letter of Credit; (D)
errors, omissions, interruptions, or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not they be
in cipher; (E) errors in interpretation of technical terms; (F) any loss or
delay in the transmission or otherwise of any document required in order make a
drawing under any Letter of Credit or of the proceeds thereof; (G) the
misapplication by the beneficiary of any Letter of Credit of the proceeds of any
drawing under such Letter of Credit; or (H) any consequences arising from causes
beyond the control of the Lenders or the Agent, including, without limitation,
any act or omission, whether rightful or wrongful, of any present or future de
jure or de facto Governmental Authority. None of the foregoing shall affect,
impair or prevent the vesting of any rights or powers of the Agent or any Lender
under this Section 2.4(i).
(3) Exoneration. In furtherance and extension, and not in
limitation, of the specific provisions set forth above, any action taken or
omitted by the Agent or any Lender under or in connection with any of the
Letters of Credit or any related certificates, if taken or omitted in the
absence of gross negligence or willful misconduct, shall not put the Agent or
any Lender under any resulting liability to the Borrower or relieve the Borrower
of any of its obligations hereunder to any such Person.
(4) Power of Attorney. In connection with all Inventory
financed by Letters of Credit, the Borrower hereby appoints the Agent, or the
Agent's designee, as its
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46
attorney, with full power and authority: (a) to sign and/or endorse the
Borrower's name upon any warehouse or other receipts; (b) to sign the Borrower's
name on bills of lading and other negotiable and non-negotiable documents; (c)
to clear Inventory through customs in the Agent's or the Borrower's name, and to
sign and deliver to customs officials powers of attorney in the Borrower's name
for such purpose; (d) to complete in the Borrower's or the Agent's name, any
order, sale, or transaction, obtain the necessary documents in connection
therewith, and collect the proceeds thereof; and (e) to do such other acts and
things as are necessary in order to enable the Agent to obtain possession of the
Inventory and to obtain payment of the Obligations. Except for gross negligence
or willful misconduct, neither the Agent nor its designee, as the Borrower's
attorney, will be liable for any acts or omissions, nor for any error of
judgement or mistakes of fact or law. This power, being coupled with an
interest, is irrevocable until all Obligations have been paid and satisfied.
(5) Account Party. The Borrower hereby authorizes and
directs any issuer of a Letter of Credit to name the Borrower as the "Account
Party" therein and to deliver to the Agent all instruments, documents and other
writings and property received by the issuer pursuant to the Letter of Credit,
and to accept and rely upon the Agent's instructions and agreements with respect
to all matters arising in connection with the Letter of Credit or the
application therefor.
(6) Control of Inventory. In connection with all Inventory
financed by Letters of Credit, the Borrower will, at the Agent's request,
instruct all suppliers, carriers, forwarders, warehouses or others receiving or
holding cash, checks, Inventory, documents or instruments in which the Agent
holds a security interest to deliver them to the Agent and/or subject to the
Agent's order, and if they shall come into the Borrower's possession, to deliver
them, upon request, to the Agent in their original form. The Borrower shall
also, at the Agent's request, designate the Agent as the consignee on all bills
of lading and other negotiable and non-negotiable documents.
(j) Supporting Letter of Credit; Cash Collateral. If,
notwithstanding the provisions of Section 2.4(b) and Section 12.1 any Letter of
Credit is outstanding upon the termination of this Agreement, then upon such
termination the Borrower shall deposit with the Agent, for the ratable benefit
of the Agent and the Lenders, with respect to each Letter of Credit then
outstanding, as the Majority Lenders, in their discretion shall specify, either
(A) a standby letter of credit (a "Supporting Letter of Credit") in form and
substance satisfactory to the Agent, issued by an issuer satisfactory to the
Agent in an amount equal to the greatest amount for which such Letter of Credit
may be drawn plus any fees and expenses associated with such Letter of Credit,
under which Supporting Letter of Credit the Agent is entitled to draw amounts
necessary to reimburse the Agent and the Lenders for payments made by the Agent
and the Lenders under such Letter of Credit or under any credit support or
enhancement provided through the Agent with respect thereto and any fees and
expenses associated with such Letter of Credit, or (B) cash in amounts necessary
to reimburse the Agent and the Lenders for payments made by the Agent or the
Lenders under such Letter of Credit or under any credit support or enhancement
provided through the Agent with respect thereto and any fees and expenses
associated with such Letter of Credit. Such Supporting Letter of Credit or
deposit of cash shall be held by the Agent, for the ratable benefit of the Agent
and the Lenders, as security for, and to provide for the payment of, the
aggregate undrawn amount of such Letters of Credit remaining outstanding, so
long as the
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47
same shall remain outstanding, and all reimbursement and other Obligations,
whether arising before or after draw, remain unpaid, the Agent agreeing to
release such security from time to time as Obligations so secured are
unconditionally satisfied.
2.5 Capital Expenditure Loans. (a) Amounts of Capital Expenditure
Loans. Subject to the satisfaction of the conditions precedent set forth in
Article 10 and the other provisions of this Agreement, each Lender severally
agrees, upon the Borrower's request from time to time on any Business Day during
the period from the Closing Date to the earlier of the Termination Date or
twenty-four (24) months following the first draw, which draw shall be made
within eighteen (18) months following the Closing Date, to make loans (the
"Capital Expenditure Loans") under a capital expenditure line to the Borrower,
in amounts not to exceed such Lender's Pro Rata Share of the Borrower's Capital
Expenditure Loan Availability. The Capital Expenditure Loans shall be used
solely for the purchase of new Equipment for the Project.
(b) Procedure for Borrowing. (1) Each Borrowing under the
Capital Expenditure Loans shall be made upon the Borrower's irrevocable written
notice delivered to the Agent in the form of a notice of borrowing ("Capital
Expenditure Loan Notice of Borrowing") in substantially the form attached to
this Agreement as EXHIBIT F or in such other form as the Agent may require from
time to time, together with a Borrowing Base Certificate reflecting sufficient
Capital Expenditure Loan Availability, (which must be received by the Agent
prior to 10 a.m. (Chicago time) (i) no less than five (5) Business Days prior to
the requested Funding Date, in the case of LIBOR Rate Loans and (ii) no later
than 11:00 a.m. (Chicago time) on the requested Funding Date, in the case of
Base Rate Loans, specifying:
(A) the amount of the Borrowing (which shall not be
less than $250,000);
(B) the requested Funding Date, which shall be a
Business Day;
(C) whether the Capital Expenditure Loans requested
are to be Base Rate Capital Expenditure Loans or LIBOR Capital
Expenditure Loans; and
(D) the duration of the Interest Period if the
requested Capital Expenditure Loans are to be LIBOR Capital Expenditure
Loans. If the Capital Expenditure Loan Notice of Borrowing fails to
specify the duration of the Interest Period for any Borrowing comprised
of LIBOR Rate Loans, such Interest Period shall be one month.
(2) Each Capital Expenditure Loan Notice of Borrowing
shall be accompanied by (a) a contract of sale, purchase order or invoice, in
form and substance satisfactory to the Agent, which accurately and completely
describes the Equipment which is the subject of the requested advance and the
purchase price therefor, expressly identifying and excluding the costs of
delivery, installation, taxes, and other "soft" costs, and (b) evidence
satisfactory to the Agent indicating that such Equipment have been delivered to
and accepted by the Borrower. Each Capital Expenditure Loan Notice of Borrowing
shall also be accompanied by such other information, certificates,
confirmations, and other items as the Agent may require to determine the value
and the delivery of the subject Equipment and compliance with the other
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48
terms of this Agreement. The amount to be advanced with respect to a Capital
Expenditure Loan Notice of Borrowing shall not exceed the lesser of (a) the
amount requested by the Borrower, or (b) 80% of the purchase price (excluding
the costs of delivery, installation, taxes, and other "soft" costs) of the
Equipment.
(3) With respect to any request for Base Rate Capital
Expenditure Loans, in lieu of delivering the above-described Capital Expenditure
Loan Notice of Borrowing the Borrower may give the Agent telephonic notice of
such request by the required time, with such telephonic notice to be confirmed
in writing within 24 hours of the giving of such notice but the Agent shall be
entitled to rely on the telephonic notice in making such Capital Expenditure
Loans.
(c) Reliance upon Authority. On or prior to the Closing Date
and thereafter prior to any change with respect to any of the information
contained in the following clauses (i) and (ii), the Borrower shall deliver to
the Agent a writing setting forth (i) the account of the Borrower to which the
Agent is authorized to transfer the proceeds of the Capital Expenditure Loans
requested pursuant to this Section 2.5, and (ii) the names of the persons
authorized to request Capital Expenditure Loans on behalf of the Borrower, and
shall provide the Agent with a specimen signature of each such person. The Agent
shall be entitled to rely conclusively on such person's authority to request
Capital Expenditure Loans on behalf of the Borrower, the proceeds of which are
to be transferred to any of the accounts specified by the Borrower pursuant to
the immediately preceding sentence, until the Agent receives written notice to
the contrary. The Agent shall have no duty to verify the identity of any
individual representing him or herself as one of the officers authorized by the
Borrower to make such requests on its behalf.
(d) No Liability. The Agent shall not incur any liability to
the Borrower as a result of acting upon any notice referred to in Sections
2.5(b) and (c), which notice the Agent believes in good faith to have been given
by a person duly authorized by the Borrower to request Capital Expenditure Loans
on its behalf or for otherwise acting in good faith under this Section 2.5, and
the crediting of Capital Expenditure Loans to the Borrower's deposit account, or
transmittal to such Person as the Borrower shall direct, shall conclusively
establish the obligation of the Borrower to repay such Capital Expenditure Loans
as provided herein.
(e) Notice Irrevocable. Any Capital Expenditure Loan Notice of
Borrowing (or telephonic notice in lieu thereof) made pursuant to Section 2.5(b)
shall be irrevocable and the Borrower shall be bound to borrow the funds
requested therein in accordance therewith.
(g) Making of Capital Expenditure Loans. (i) Promptly after
receipt of a Capital Expenditure Loan Notice of Borrowing or telephonic notice
pursuant to Section 2.5(b), the Agent shall notify the Lenders by telecopy,
telephone or other similar form of transmission, of the requested Borrowing.
Each Lender shall make the amount of such Lender's Pro Rata Share of the
requested Borrowing available to the Agent in same day funds, to such account of
the Agent as the Agent may designate, not later than 1 p.m., (Chicago time) on
the Funding Date applicable thereto. After the Agent's receipt of the proceeds
of such Capital Expenditure Loans, upon satisfaction of the applicable
conditions precedent set forth in Article 10, the Agent shall make the proceeds
of such Capital Expenditure Loans available to the Borrower on the applicable
Funding Date by transferring same day funds equal to the proceeds of such
Capital
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49
Expenditure Loans received by the Agent to the account of the Borrower,
designated in writing by the Borrower and acceptable to the Agent; provided,
however, that the amount of Capital Expenditure Loans so made on any date shall
in no event exceed the Capital Expenditure Availability on such date.
(ii) Unless the Agent receives notice from a Lender on or
prior to the Closing Date or, with respect to any Borrowing after the Closing
Date, at least one Business Day prior to the date of such Borrowing, that such
Lender will not make available as and when required hereunder to the Agent for
the account of the Borrower the amount of that Lender's Pro Rata Share of the
Borrowing, the Agent may assume that each Lender has made such amount available
to the Agent in immediately available funds on the Funding Date and the Agent
may (but shall not be so required), in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount. If and to the
extent any Lender shall not have made its full amount available to the Agent in
immediately available funds and the Agent in such circumstances has made
available to the Borrower such amount, that Lender shall on the Business Day
following such Funding Date make such amount available to the Agent, together
with interest at the Federal Funds Rate for each day during such period. A
notice of the Agent submitted to any Lender with respect to amounts owing under
this subsection shall be conclusive, absent manifest error. If such amount is so
made available, such payment to the Agent shall constitute such Lender's Loan on
the payment date for all purposes of this Agreement. If such amount is not made
available to the Agent on the Business Day following the Funding Date, the Agent
will notify the Borrower of such failure to fund and, upon demand by the Agent,
the Borrower shall pay such amount to the Agent for the Agent's account,
together with interest thereon for each day elapsed since the date of such
Borrowing, at a rate per annum equal to the Interest Rate applicable at the time
to the Loans comprising such Borrowing. The failure of any Lender to make any
Loan on any Funding Date (any such Lender, prior to the cure of such failure,
being hereinafter referred to as a "Defaulting Lender") shall not relieve any
other Lender of any obligation hereunder to make a Loan on such Funding Date,
but no Lender shall be responsible for the failure of any other Lender to make
the Loan to be made by such other Lender on any Funding Date.
(iii) The Agent shall not be obligated to transfer to a
Defaulting Lender any payments made by Borrower to the Agent for the Defaulting
Lender's benefit; nor shall a Defaulting Lender be entitled to the sharing of
any payments hereunder. Amounts payable to a Defaulting Lender shall instead be
paid to or retained by the Agent. The Agent may hold and, in its discretion,
re-lend to Borrower the amount of all such payments received or retained by it
for the account of such Defaulting Lender. Any amounts so re-lent to the
Borrower shall bear interest at the rate applicable to Base Rate Capital
Expenditure Loans and for all other purposes of this Agreement shall be treated
as if they were Capital Expenditure Loans, provided, however, that for purposes
of voting or consenting to matters with respect to the Loan Documents and
determining Pro Rata Shares, such Defaulting Lender shall be deemed not to be a
"Lender" and such Lender's Commitment shall be deemed to be zero (-0-). This
Section shall remain effective with respect to such Lender until such time as
the Defaulting Lender shall no longer be in default of any of its obligations
under this Agreement. The terms of this Section shall not be construed to
increase or otherwise affect the Commitment of any Lender, or relieve or excuse
the performance by the Borrower of its duties and obligations hereunder.
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50
(i) Agent Capital Expenditure Advances.
(i) Subject to the limitations set forth in the provisos
contained in this Section 2.5(i), the Agent is hereby authorized by the Borrower
and the Lenders, from time to time in the Agent's sole discretion, (1) after the
occurrence of a Default or an Event of Default, or (2) at any time that any of
the other applicable conditions precedent set forth in Article 10 have not been
satisfied, to make Capital Expenditure Loans to the Borrower on behalf of the
Lenders which the Agent, in its reasonable business judgment, deems necessary or
desirable (A) to complete, preserve or protect the Project, or any portion
thereof, (B) to enhance the likelihood of, or maximize the amount of, repayment
of the Capital Expenditure Loans and other Obligations with respect to the
Capital Expenditure Loans, or (C) to pay any other amount chargeable to the
Borrower pursuant to the terms of this Agreement, including, without limitation,
costs, fees and expenses as described in Section 15.7 (any of the advances
described in this Section 2.5(i) being hereinafter referred to as "Agent Capital
Expenditure Advances"); provided, that the Required Lenders may at any time
revoke the Agent's authorization contained in this Section 2.5(i) to make Agent
Capital Expenditure Advances, any such revocation to be in writing and to become
effective prospectively upon the Agent's receipt thereof; and
(ii) The Agent Capital Expenditure Advances shall be
repayable on demand and secured by the Collateral, shall constitute Capital
Expenditure Loans and Obligations hereunder, and shall bear interest at the rate
applicable to the Capital Expenditure Loans from time to time. The Agent shall
notify each Lender and the Borrower in writing of each such Agent Capital
Expenditure Advance.
(j) Capital Expenditure Loan Notes. The Borrower shall execute
and deliver to the Agent on behalf of each Lender, on the Closing Date, a
promissory note, substantially in the form of EXHIBIT C attached hereto and made
a part hereof (such promissory notes, together with any new notes issued
pursuant to Section 13.3(d) upon the assignment of any portion of any Lender's
Capital Expenditure Loan, being hereinafter referred to collectively as the
"Capital Expenditure Loan Notes" and each of such promissory notes being
hereinafter referred to individually as a "Capital Expenditure Loan Note"), to
evidence such Lender's Capital Expenditure Loan, in an original principal amount
equal to the amount of such Lender's Pro Rata Share of $8,000,000, with other
appropriate insertions.
The principal amount of the Capital Expenditure Loan Notes
delivered to the Agent on behalf of each Lender shall be dated the Closing Date
and stated to mature on the Capital Expenditure Loan Maturity Date.
The Borrower shall make quarterly installment payments of
principal commencing on the first day of the first month after the first
anniversary of the first advance under the Capital Expenditure Loan and
continuing on the first day of every third month thereafter. Each such
installment shall be in an amount equal to (a) the aggregate principal balance
outstanding on the Capital Expenditure Loans at the close of business on the
Business Day preceding the installment payment due date, divided by (b) 20 minus
the number of installment payments previously due on the Capital Expenditure
Loans.
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51
Each such installment shall be payable to the Agent for the
account of the applicable Lender in accordance with such Lender's Pro Rata
Share.
(k) Notation and Endorsement. The Agent shall record on its
books the principal amount of the Capital Expenditure Loans owing to 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 Capital Expenditure Loans in its books and records, such books
and records constituting rebuttably presumptive evidence, absent manifest error,
of the accuracy of the information contained therein. Prior to the transfer of a
Capital Expenditure Loan Note, the applicable Lender shall endorse on the
reverse side thereof the outstanding principal balance of the Capital
Expenditure Loan evidenced thereby. Failure by such Lender to make such notation
or endorsement shall not affect the obligations of the Borrower under such
Capital Expenditure Loan Note or any of the other Loan Documents.
2.6 Acquisition Line. The Borrower may apply to the Lenders for one or
more loans (collectively the "Acquisition Line") to the Borrower for the
acquisition of businesses, in the aggregate principal amount not to exceed
($5,000,000), as long as the following criteria, and the general provisions for
advances under this Agreement, are met to the satisfaction of the Agent:
(a) the acquisition target is in the same business as
MSC;
(b) after giving effect to the acquisition, total Consolidated
senior Funded Debt to EBITDA is no more than 4.0 to 1.0 on a proforma
basis;
(c) after giving effect to the acquisition, unused
Availability shall be an amount to be determined by the Agent as
sufficient in the exercise of its reasonable commercial judgment;
(d) the Borrower is in compliance with all loan covenants and
such acquisition would not give rise to a Default or an Event of
Default; and
(e) the business to become acquired becomes a Borrower under
this Agreement and its assets become part of the security for the
Obligations.
Commitment to any one or more advances under the Acquisition Line shall
be subject to the Lenders' respective approval processes, no commitment to lend
being made at this time. Repayment and other terms and conditions for the
Acquisition Line shall be determined by the mutual agreement of the Borrower,
the Agent and the Lenders at the time of funding.
2.7 Swap Transactions.
(a) The Borrower may request and the Agent may, in its sole
and absolute discretion, arrange for the Borrower to obtain from Bank of America
or its affiliates Swap Transactions, although the Borrower is not required to do
so. In the event the Borrower requests Agent to procure Swap Transactions from
Bank of America (or its affiliates), then the Borrower agrees to indemnify and
hold the Agent and the Lenders harmless from any and all obligations now or
hereafter owing by the Agent or any of the Lenders to Bank of America or its
affiliates arising from or related to such Swap Transactions pursuant to the
indemnity referred to in clause
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52
(c) below. Immediately upon the Agent issuing any indemnity to Bank of America
or its affiliates in connection with Swap Transactions, each Lender shall be
deemed to have irrevocably and unconditionally purchased an undivided interest
and participation in the indemnity provided by the Agent to the Bank of America
equal to such Lender's Pro Rata Share of such indemnity (including, without
limitation, all obligations of the Borrower with respect thereto). The Borrower
agrees to pay the Bank of America or its affiliates all amounts owing to the
Bank of America or its affiliates pursuant to Swap Transactions. In the event
the Borrower shall not have paid to Bank of America or its affiliates such
amounts, the Agent and the Lenders shall pay Bank of America or its affiliates
(as applicable) irrespective of any claim, set-off, defense or other right which
the Borrower may have or assert with respect to any of the Swap Transactions;
and such amounts when paid by the Agent and the Lenders shall constitute a
Revolving Loan which shall be deemed to have been requested by the Borrower. The
Borrower acknowledges and agrees that the obtaining of Swap Transactions from
Bank of America or its affiliates (a) is in the sole and absolute discretion of
Bank of America or its affiliates, (b) is subject to all rules and regulations
of Bank of America, and (c) is due to Bank of America or its affiliates relying
on the indemnity of the Agent and the Lenders to Bank of America or its
affiliates with respect to obligations of the Borrower to the Bank of America or
its affiliates in connection with the Swap Transactions.
(b) Cash Collateral; Supporting Letter of Credit. If,
notwithstanding the provisions of Section 12.1, obligations are owing or
outstanding under or otherwise with respect to any indemnity referred to in
clause (c) of Section 2.7(a) at the time of the termination of this agreement,
then upon such termination the Borrower shall deposit with the Agent, for the
ratable benefit of the Agent and the Lenders, as the Majority Lenders in their
discretion shall specify, either (A) cash in amounts necessary to reimburse the
Agent and the Lenders for any payments that may be required to be made on
account of such obligations, or (B) a standby Letter of Credit in such amounts,
which shall be in form and substance satisfactory to the Agent and issued by an
issuer satisfactory to the Agent, the Agent agreeing to release such security
from time to time as Obligations so secured are unconditionally satisfied.
ARTICLE 3
INTEREST AND FEES
3.1 Interest.
(a) Interest Rates. All outstanding Obligations shall bear
interest on the unpaid principal amount thereof (including, to the extent
permitted by law, on interest thereon not paid when due) from the date made
until paid in full in cash at a rate determined by reference to the Base Rate or
the LIBOR Rate plus the Applicable Margin as set forth below, but not to exceed
the Maximum Rate described in Section 3.3. Subject to the provisions of Section
3.2, any of the Loans may be converted into, or continued as, Base Rate Loans or
LIBOR Rate Loans in the manner provided in Section 3.2. If at any time Loans are
outstanding with respect to which notice has not been delivered to the Agent in
accordance with the terms of this Agreement specifying the basis for determining
the interest rate applicable thereto, then those Loans shall be Base Rate Loans
and shall bear interest at a rate determined by reference to the Base Rate until
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53
notice to the contrary has been given to the Agent in accordance with this
Agreement and such notice has become effective.
As used in this Agreement, the term "Applicable Margin" means:
(a) with respect to Base Rate Capital
Expenditure Loans, Base Rate Term Loans, Acquisition Line
advances based on the Base Rate, and all other Obligations
(other than the Base Rate Revolving Loans and LIBOR Rate
Loans), 0.50% per annum;
(b) with respect to Base Rate Revolving
Loans, -0%-; and
(c) with respect to LIBOR Revolving Loans
2.25% per annum and with respect to LIBOR Term Loans, LIBOR
Capital Expenditure Loans and Acquisition Line advances based
on the LIBOR Rate, 2.75% per annum;
provided, however, changes in the Applicable Margin shall be made for Revolving
Loans and Term Loans not more frequently than quarterly based on the Borrower's
Funded Debt to EBITDA Ratio, determined by the Agent from the quarterly reports
required by Section 7.2(c), except that the first such determination shall be
made based on the Borrower' annual financial statements required by Section
7.2(a) for the Borrowers' fiscal year ended March 31, 2000 and shall be
effective as of the first day of the first month after the Agent receives such
statements, as follows:
---------------------------------------------------------------------------------------------------
Funded Debt to EBITDA Ratio Applicable Margin for LIBOR Applicable Margin for Base Rate
Loans Loans
---------------------------------------------------------------------------------------------------
Revolving Term Loans Revolving Term Loans
Loans Loans
---------------------------------------------------------------------------------------------------
less than or equal to 3.50 1.75% 2.25% 0 0
---------------------------------------------------------------------------------------------------
greater than 3.50 but not 2.00% 2.50% 0 0
greater than 4.00
---------------------------------------------------------------------------------------------------
greater than 4.00 but not 2.25% 2.75% 0 0.50%
greater than 4.50
---------------------------------------------------------------------------------------------------
greater than 4.50 but not 2.50% 3.00% 0.25% 0.75%
greater than 5.00
---------------------------------------------------------------------------------------------------
Each change in the Base Rate shall be reflected in the interest rate as of the
effective date of such change. All interest charges shall be computed on the
basis of a year of 360 days and actual days elapsed (which results in more
interest being paid than if computed on the basis of a 365-day year). Interest
accrued on all Loans will be payable in arrears on the first day of each month
hereafter and at the end of each Interest Period.
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(b) Default Rate. If any Default or Event of Default occurs
and is continuing and the Majority Lenders in their discretion so elect, then,
while any such Default or Event of Default is outstanding, all of the
Obligations shall bear interest at the Default Rate applicable thereto.
3.2 Conversion and Continuation Elections. (a) The Borrower may, upon
irrevocable written notice to the Agent in accordance with Subsection 3.2(b):
(i) elect, as of any Business Day, in the case of Base
Rate Loans to convert any such Loans (or any part thereof in an amount not less
than $1,000,000, or that is in an integral multiple of $500,000 in excess
thereof) into LIBOR Rate Loans; or
(ii) elect, as of the last day of the applicable Interest
Period, to continue any LIBOR Rate Loans having Interest Periods expiring on
such day (or any part thereof in an amount not less than $1,000,000, or that is
in an integral multiple of $1,000,000 in excess thereof);
provided, that if at any time the aggregate amount of LIBOR Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $1,000,000, such LIBOR Rate Loans shall
automatically convert into Base Rate Loans, and on and after such date the right
of the Borrower to continue such Loans as, and convert such Loans into, LIBOR
Rate Loans, as the case may be, shall terminate.
(b) The Borrower shall deliver a notice of
conversion/continuation ("Notice of Conversion/Continuation") in substantially
the form attached to this Agreement as EXHIBIT G or in such other form as the
Agent may require from time to time, to be received by the Agent not later than
11 a.m. (Chicago time) at least three (3) Business Days in advance of the
Conversion/Continuation Date, if the Loans are to be converted into or continued
as LIBOR Rate Loans and specifying:
(i) the proposed Conversion/Continuation Date;
(ii) the aggregate amount of Loans to be converted or
renewed;
(iii) the type of Loans resulting from the proposed
conversion or continuation; and
(iv) the duration of the requested Interest Period,
provided, however, the Borrower may not select an Interest Period with respect
to any portion of the Term Loans which extends beyond an installment payment
date for the Term Loans or any portion of the Capital Expenditure Loans which
extends beyond an installment payment date for the Capital Expenditure Loans
unless, after giving effect to such election, the portion of the Term Loans or
Capital Expenditure Loans, respectively, is not subject to Interest Periods
ending after such installment payment date is equal to or greater than the
principal due on such installment payment date.
(c) If upon the expiration of any Interest Period applicable
to LIBOR Rate Loans, the Borrower has failed to select timely a new Interest
Period to be applicable to LIBOR
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Rate Loans or if any Default or Event of Default then exists, the Borrower shall
be deemed to have elected to convert such LIBOR Rate Loans into Base Rate Loans
effective as of the expiration date of such Interest Period.
(d) The Agent will promptly notify each Lender of its receipt
of a Notice of Conversion/Continuation. All conversions and continuations shall
be made based on each Lender's Pro Rata Share according to the respective
outstanding principal amounts of the Loans with respect to which the notice was
given held by each Lender.
(e) During the existence of a Default or Event of Default, the
Borrower may not elect to have a Loan converted into or continued as a LIBOR
Rate Loan.
(f) After giving effect to any conversion or continuation of
Loans, there may not be more than eight (8) different Interest Periods in effect
at that time.
3.3 Maximum Interest Rate. In no event shall any interest rate provided
for hereunder exceed the maximum rate legally chargeable by any Lender under
applicable law for loans of the type provided for hereunder (the "Maximum
Rate"). If, in any month, any interest rate, absent such limitation, would have
exceeded the Maximum Rate, then the interest rate for that month shall be the
Maximum Rate, and, if in future months, that interest rate would otherwise be
less than the Maximum Rate, then that interest rate shall remain at the Maximum
Rate until such time as the amount of interest paid hereunder equals the amount
of interest which would have been paid if the same had not been limited by the
Maximum Rate. In the event that, upon payment in full of the Obligations, the
total amount of interest paid or accrued under the terms of this Agreement is
less than the total amount of interest which would, but for this Section 3.3,
have been paid or accrued if the interest rates otherwise set forth in this
Agreement had at all times been in effect, then the Borrower shall, to the
extent permitted by applicable law, pay the Agent, for the account of the
Lenders, an amount equal to the excess of (a) the lesser of (i) the amount of
interest which would have been charged if the Maximum Rate had, at all times,
been in effect or (ii) the amount of interest which would have accrued had the
interest rates otherwise set forth in this Agreement, at all times, been in
effect over (b) the amount of interest actually paid or accrued under this
Agreement. In the event that a court determines that the Agent and/or any Lender
has received interest and other charges hereunder in excess of the Maximum Rate,
such excess shall be deemed received on account of, and shall automatically be
applied to reduce, the Obligations other than interest, in the inverse order of
maturity, and if there are no Obligations outstanding, the Agent and/or such
Lender shall refund to the Borrower such excess.
3.4 Closing Fee. The Borrower agrees to pay the Agent, for the account
of the Lenders, in accordance with their respective Pro Rata Share on the
Closing Date a closing fee (the "Closing Fee") in the amount of $150,000 (less
any unused amounts remaining from the $85,000 expense deposit paid to the Agent
prior to the Closing Date), which Closing Fee shall be fully earned by the
Lenders on the Closing Date and non-refundable. The Agent, the Lenders and the
Borrower agree that the Closing Fee shall be financed by the Lenders as a
Revolving Loan.
3.5 Unused Line Fee. Until the Obligations have been paid in full and
the Agreement terminated, the Borrower agrees to pay, on the first day of each
month and on the Termination Date, to the Agent, for the ratable account of the
Lenders, an unused line fee (the "Unused Line
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Fee") equal to three-eighths of one percent (0.375%) per annum on the average
daily amount by which the Maximum Revolver Amount exceeded the sum of the
average daily outstanding amount of Revolving Loans and the undrawn face amount
of all outstanding Letters of Credit, during the immediately preceding month or
shorter period if calculated on the Termination Date. The unused line fee shall
be computed on the basis of a 360-day year for the actual number of days
elapsed. All payments received by the Agent on account of Accounts or as
proceeds of other Collateral shall be deemed to be credited to the Borrower's
Loan Account immediately upon receipt for purposes of calculating the unused
line fee pursuant to this Section 3.5.
3.6 Letter of Credit Fee. The Borrower agrees to pay to the Agent, for
the ratable account of the Lenders, for each Letter of Credit, a fee (the
"Letter of Credit Fee") equal to two percent (2%) per annum of the undrawn face
amount of each Letter of Credit issued for the Borrower's account at the
Borrower's request, plus all out-of-pocket costs, fees and expenses incurred by
the Agent in connection with the application for, issuance of, or amendment to
any Letter of Credit, which costs, fees and expenses could include a "fronting
fee" required to be paid by the Agent to such issuer for the assumption of the
settlement risk in connection with the issuance of such Letter of Credit. The
Letter of Credit Fee shall be payable monthly in arrears on the first day of
each month following any month in which a Letter of Credit was issued and/or in
which a Letter of Credit remains outstanding. The Letter of Credit Fee shall be
computed on the basis of a 360-day year for the actual number of days elapsed.
3.7 Capital Expenditure Loan Fee. The Borrower agrees to pay the Agent,
for the account of the Lenders, in accordance with their respective Pro Rata
Share as a condition of each Borrowing under the Capital Expenditure Loans a
funding fee (the "Capital Expenditure Loan Fee") in the amount of three-quarters
of one percent (3/4%) of the amount of such Borrowing, which Capital Expenditure
Loan Fee shall be fully earned by the Lenders at such Borrowing and
non-refundable. The Agent, the Lenders and the Borrower agree that the Capital
Expenditure Loan Fee shall be financed by the Lenders as a Revolving Loan.
3.8 Acquisition Line Fee. The Borrower agrees to pay the Agent, for the
account of the Lenders, in accordance with their respective Pro Rata Share as a
condition of each Borrowing under the Acquisition Line a funding fee (the
"Acquisition Line Fee") in the amount of one percent (1%) of the amount of the
Borrowing, which Acquisition Line Fee shall be fully earned by the Lenders at
such Borrowing and non-refundable. The Agent, the Lenders and the Borrower agree
that the Acquisition Line Fee shall be financed by the Lenders as a Revolving
Loan.
3.9 Administration Fee. The Borrower agrees to pay the Agent for its
own account and not the Lenders an annual administrative fee of $40,000, plus
out-of-pocket expenses described in Section 15.7, which fee shall be payable
quarterly in arrears and shall be non-refundable.
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ARTICLE 4
PAYMENTS AND PREPAYMENTS
4.1 Revolving Loans. The Borrower shall repay the outstanding principal
balance of the Revolving Loans, plus all accrued but unpaid interest thereon, on
the Termination Date. The Borrower may prepay Revolving Loans at any time, and
reborrow subject to the terms of this Agreement; provided, however, that with
respect to any LIBOR Revolving Loans prepaid by the Borrower prior to the
expiration date of the Interest Period applicable thereto, the Borrower promises
to pay to the Agent for account of the Lenders the amounts described in Section
5.4. In addition, and without limiting the generality of the foregoing, upon
demand the Borrower promises to pay to the Agent, for account of the Lenders,
the amount, without duplication, by which the Aggregate Revolver Outstandings
exceeds the Availability (with Availability for this purpose calculated as if
the Aggregate Revolver Outstandings were zero).
4.2 Termination of Facility. The Borrower may terminate this Agreement
upon at least thirty (30) Business Days' notice to the Agent and the Lenders,
upon (a) the payment in full of all outstanding Revolving Loans, together with
accrued interest thereon, and the cancellation of all outstanding Letters of
Credit, (b) the prepayment in full of the Term Loans, the Capital Expenditure
Loans and the advances under the Acquisition Line, together with accrued
interest thereon, (c) the payment of the early termination fee set forth in the
next sentence, (d) the payment in full in cash of all other Obligations together
with accrued interest thereon, and (e) with respect to any LIBOR Rate Loans
prepaid in connection with such termination prior to the expiration date of the
Interest Period applicable thereto, the payment of the amounts described in
Section 5.4. If this Agreement is terminated at any time prior to March 1, 2001,
whether pursuant to this Section or pursuant to Section 11.2, the Borrower shall
pay to the Agent, for the account of the Lenders an early termination fee (the
"Early Termination Fee") equal to (a) $465,000 if the termination occurs prior
to March 1, 2000, or (b) $232,500 if the termination takes place on or before
March 1, 2001. If termination occurs after March 1, 2001 there shall be no Early
Termination Fee. The Early Termination Fee shall be fully earned by the Lenders
upon such termination and non-refundable. Notwithstanding the foregoing, there
shall not be an Early Termination Fee due if upon a termination pursuant to this
Section 4.2 and repayment and satisfaction of the Obligations (including,
without limitation, those with respect to Letters of Credit) as set forth above
are made solely as a result of (x) a replacement credit facility extended by
BABC, its successors, assigns and/or its Affiliates to the Borrower and/or
Centrum, or (y) a substantially simultaneous public offering of Centrum's common
stock and/or or a substantially simultaneous offering of unsecured long-term
debt, the placement of which is arranged by BABC, its successors, assigns and/or
its Affiliates, with net proceeds to the Borrower, directly or indirectly
through Centrum, which net proceeds are sufficient and in fact are used to repay
and satisfy all of the Obligations (including, without limitation, those with
respect to Letters of Credit).
4.3 Repayment of the Term Loans. The Borrower agrees to repay the
principal of the Term Loans to the Agent, for the account of the Lenders, in
accordance with the terms of the Term Loan Notes and Section 2.3 of this
Agreement.
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4.4 Voluntary Prepayments of the Term Loans. The Borrower may prepay
the principal of the Term Loans in whole or in part, at any time and from time
to time upon (a) at least five (5) Business Days' prior written notice to the
Agent and the Lenders, and (b) payment of, with respect to any LIBOR Term Loans
to be prepaid prior to the expiration date of the Interest Period applicable
thereto, the amounts described in Section 5.4. All voluntary prepayments of the
principal of the Term Loans shall be accompanied by the payment of all accrued
but unpaid interest on the Term Loans to the date of prepayment. Any voluntary
prepayment under this Section 4.4 of less than all of the outstanding principal
of the Term Loans shall be applied to the installments of principal of the Term
Loans in the inverse order of maturity. Amounts prepaid in respect of the Term
Loans pursuant to this Section 4.4 may not be reborrowed.
4.5 Mandatory Prepayments of the Term Loans. (a) The Borrower shall
prepay the entire unpaid principal balance of the Term Loans, and all accrued
but unpaid interest thereon, upon the termination of this Agreement for any
reason.
(b) Any prepayment under this Section 4.5 of less than all of
the outstanding principal amount of the Term Loans shall be applied, based upon
the Pro Rata Shares of the Lenders, to the installments of principal of the Term
Loans in the inverse order of maturity. Amounts prepaid in respect of the Term
Loans pursuant to this Section 4.5 may not be reborrowed. In connection with any
such prepayment, if any LIBOR Term Loans are prepaid prior to the expiration
date of the Interest Period applicable thereto, the Borrower shall pay to the
Lenders the amounts described in Section 5.4.
4.6 Repayment of the Capital Expenditure Loans. The Borrower agrees to
repay the principal of the Capital Expenditure Loans to the Agent, for the
account of the Lenders, in accordance with the terms of the Capital Expenditure
Loan Notes and Section 2.5 of this Agreement.
4.7 Voluntary Prepayments of the Capital Expenditure Loans. Borrower
may prepay the principal of the Capital Expenditure Loans in whole or in part,
at any time and from time to time upon (a) at least five (5) Business Days'
prior written notice to the Agent and the Lenders, and (b) payment of, with
respect to any LIBOR Capital Expenditure Loans to be prepaid prior to the
expiration date of the Interest Period applicable thereto, the amounts described
in Section 5.4. All voluntary prepayments of the principal of the Capital
Expenditure Loans shall be accompanied by the payment of all accrued but unpaid
interest on the Capital Expenditure Loans to the date of prepayment. Any
voluntary prepayment under this Section 4.7 of less than all of the outstanding
principal of the Capital Expenditure Loans shall be applied to the installments
of principal of the Capital Expenditure Loans in the inverse order of maturity.
Amounts prepaid in respect of the Capital Expenditure Loans pursuant to this
Section 4.7 may not be reborrowed.
4.8 Mandatory Prepayments of the Capital Expenditure Loans. (a) The
Borrower shall prepay the entire unpaid principal balance of the Capital
Expenditure Loans, and all accrued but unpaid interest thereon, upon the
termination of this Agreement for any reason.
(b) Any prepayment under this Section 4.8 of less than all of
the outstanding principal amount of the Capital Expenditure Loans shall be
applied, based upon the Pro Rata Shares of the Lenders, to the installments of
principal of the Capital Expenditure Loans in the
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inverse order of maturity. Amounts prepaid in respect of the Capital Expenditure
Loans pursuant to this Section 4.8 may not be reborrowed. In connection with any
such prepayment, if any LIBOR Capital Expenditure Loans are prepaid prior to the
expiration date of the Interest Period applicable thereto, the Borrower shall
pay to the Lenders the amounts described in Section 5.4.
4.9 Payments by the Borrower. (a) All payments to be made by the
Borrower shall be made without set-off, recoupment or counterclaim. Except as
otherwise expressly provided herein, all payments by the Borrower shall be made
to the Agent for the account of the Lenders at the Agent's address set forth in
Section 15.8, and shall be made in Dollars and in immediately available funds,
no later than noon (Chicago time) on the date specified herein. Any payment
received by the Agent later than noon (Chicago time) shall be deemed to have
been received on the following Business Day and any applicable interest or fee
shall continue to accrue.
(b) Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment is due on a day other than a
Business Day, such payment shall be due and shall be made on the following
Business Day, and such extension of time shall in such case be included in the
computation of interest or fees, as the case may be.
(c) Unless the Agent receives notice from the Borrower prior
to the date on which any payment is due to the Lenders that the Borrower will
not make such payment in full as and when required, the Agent may assume that
the Borrower has made such payment in full to the Agent on such date in
immediately available funds and the Agent may (but shall not be so required), in
reliance upon such assumption, distribute to each Lender on such due date an
amount equal to the amount then due such Lender. If and to the extent the
Borrower has not made such payment in full to the Agent, each Lender shall repay
to the Agent on demand such amount distributed to such Lender, together with
interest thereon at the Federal Funds Rate for each day from the date such
amount is distributed to such Lender until the date repaid.
4.10 Payments as Revolving Loans. All payments of principal, interest,
reimbursement obligations in connection with Letters of Credit, fees, premiums
and other sums payable hereunder, including all reimbursement for expenses
pursuant to Section 15.7, may, at the option of the Agent, in its sole
discretion, subject only to the terms of this Section 4.10, be paid from the
proceeds of Revolving Loans made hereunder, whether made following a request by
the Borrower pursuant to Section 2.2 or a deemed request as provided in this
Section 4.10. The Borrower hereby irrevocably authorizes the Agent to charge the
Loan Account for the purpose of paying principal, interest, reimbursement
obligations in connection with Letters of Credit, fees, premiums and other sums
payable hereunder, including reimbursing expenses pursuant to Section 15.7, and
agrees that all such amounts charged shall constitute Revolving Loans (including
BABC Loans and Agent Advances) and that all such Revolving Loans so made shall
be deemed to have been requested by Borrower pursuant to Section 2.2.
4.11 Apportionment, Application and Reversal of Payments. Aggregate
principal and interest payments shall be apportioned ratably among the Lenders
(according to the unpaid principal balance of the Loans to which such payments
relate held by each Lender) and payments of the fees shall, as applicable, be
apportioned ratably among the Lenders. All payments shall be remitted to the
Agent and all such payments not relating to principal or interest of specific
Loans, or not constituting payment of specific fees, and all proceeds of
Accounts or other Collateral
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received by the Agent, shall be applied, ratably, subject to the provisions of
this Agreement, first, to pay any fees, indemnities or expense reimbursements
including any amounts relating to Swap Transactions then due to the Agent from
the Borrower; second, to pay any fees or expense reimbursements then due to the
Lenders from the Borrower; third, to pay interest due in respect of all
Revolving Loans, including BABC Loans and Agent Advances; fourth, to pay or
prepay principal of the BABC Loans and Agent Advances; fifth, to pay or prepay
principal of the Revolving Loans (other than BABC Loans and Agent Advances) and
unpaid reimbursement obligations in respect of Letters of Credit; sixth, to pay
or prepay principal of the Term Loans; seventh to pay or prepay principal of the
Capital Expenditure Loans; and eighth, to the payment of any other Obligation
due to the Agent or any Lender by the Borrower. Notwithstanding anything to the
contrary contained in this Agreement, unless so directed by the Borrower, or
unless an Event of Default is outstanding, neither the Agent nor any Lender
shall apply any payments which it receives to any LIBOR Revolving Loan, LIBOR
Term Loan or LIBOR Capital Expenditure Loan, except (a) on the expiration date
of the Interest Period applicable to any such LIBOR Rate Loan, or (b) in the
event, and only to the extent, that there are no outstanding Base Rate Revolving
Loans, Base Rate Term Loans or Base Rate Capital Expenditure Loans. The Agent
shall promptly distribute to each Lender, pursuant to the applicable wire
transfer instructions received from each Lender in writing, such funds as it may
be entitled to receive, subject to a Settlement delay as provided for in Section
2.2(j). The Agent and the Lenders shall have the continuing and exclusive right
to apply and reverse and reapply any and all such proceeds and payments to any
portion of the Obligations.
4.12 Indemnity for Returned Payments. If, after receipt of any payment
of, or proceeds applied to the payment of, all or any part of the Obligations,
the Agent or any Lender is for any reason compelled to surrender such payment or
proceeds to any Person, because such payment or application of proceeds is
invalidated, declared fraudulent, set aside, determined to be void or voidable
as a preference, impermissible setoff, or a diversion of trust funds, or for any
other reason, then the Obligations or part thereof intended to be satisfied
shall be revived and continue and this Agreement shall continue in full force as
if such payment or proceeds had not been received by the Agent or such Lender,
and the Borrower shall be liable to pay to the Agent, and hereby does indemnify
the Agent and the Lenders and hold the Agent and the Lenders harmless for, the
amount of such payment or proceeds surrendered. The provisions of this Section
4.12 shall be and remain effective notwithstanding any contrary action which may
have been taken by the Agent or any Lender in reliance upon such payment or
application of proceeds, and any such contrary action so taken shall be without
prejudice to the Agent's and the Lenders' rights under this Agreement and shall
be deemed to have been conditioned upon such payment or application of proceeds
having become final and irrevocable. The provisions of this Section 4.12 shall
survive the termination of this Agreement.
4.13 Agent's and Lenders' Books and Records; Monthly Statements. The
Borrower agrees that the Agent's and each Lender's books and records showing the
Obligations and the transactions pursuant to this Agreement and the other Loan
Documents shall be admissible in any action or proceeding arising therefrom, and
shall constitute rebuttably presumptive proof thereof, irrespective of whether
any Obligation is also evidenced by a promissory note or other instrument. The
Agent will provide to the Borrower a monthly statement of Loans, payments, and
other transactions pursuant to this Agreement. Such statement shall be deemed
correct, accurate, and binding on the Borrower and an account stated (except for
reversals and
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reapplications of payments made as provided in Section 4.11 and corrections of
errors discovered by the Agent), unless the Borrower notifies the Agent in
writing to the contrary within thirty (30) days after such statement is
rendered. In the event a timely written notice of objections is given by the
Borrower, only the items to which exception is expressly made will be considered
to be disputed by the Borrower.
ARTICLE 5
TAXES, YIELD PROTECTION AND ILLEGALITY
5.1 Taxes. (a) Any and all payments by the Borrower to each Lender or
the Agent under this Agreement and any other Loan Document shall be made free
and clear of, and without deduction or withholding for any Taxes. In addition,
the Borrower shall pay all Other Taxes.
(b) The Borrower agrees to indemnify and hold harmless each
Lender and the Agent for the full amount of Taxes or Other Taxes (including any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 5.1) paid by the Lender or the Agent and any liability (including
penalties, interest, additions to tax and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. Payment under this indemnification shall be made within 30
days after the date the Lender or the Agent makes written demand therefor.
(c) If the Borrower shall be required by law to deduct or
withhold any Taxes or Other Taxes from or in respect of any sum payable
hereunder to any Lender or the Agent, then:
(i) the sum payable shall be increased as necessary so
that after making all required deductions and withholdings (including deductions
and withholdings applicable to additional sums payable under this Section 5.1)
such Lender or the Agent, as the case may be, receives an amount equal to the
sum it would have received had no such deductions or withholdings been made;
(ii) the Borrower shall make such deductions and
withholdings;
(iii)the Borrower shall pay the full amount deducted or
withheld to the relevant taxing authority or other authority in accordance with
applicable law; and
(iv) the Borrower shall also pay to each Lender or the
Agent for the account of such Lender, at the time interest is paid, all
additional amounts which the respective Lender specifies as necessary to
preserve the after-tax yield the Lender would have received if such Taxes or
Other Taxes had not been imposed.
(d) Following the Agent's request, the Borrower shall furnish
the Agent the original or a certified copy of a receipt evidencing payment
thereof, or other evidence of payment satisfactory to the Agent.
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(e) If the Borrower is required to pay additional amounts to
any Lender or the Agent pursuant to subsection (c) of this Section 5.1, then
such Lender shall use reasonable efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its lending office so as to
eliminate any such additional payment by the Borrower which may thereafter
accrue, if such change in the judgment of such Lender is not otherwise
disadvantageous to such Lender.
5.2 Illegality. (a) If any Lender determines that the introduction of
any Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has asserted
that it is unlawful, for any Lender or its applicable lending office to make
LIBOR Rate Loans, then, on notice thereof by the Lender to the Borrower through
the Agent, any obligation of that Lender to make LIBOR Rate Loans shall be
suspended until the Lender notifies the Agent and the Borrower that the
circumstances giving rise to such determination no longer exist.
(b) If a Lender determines that it is unlawful to maintain any
LIBOR Rate Loan, the Borrower shall, upon its receipt of notice of such fact and
demand from such Lender (with a copy to the Agent), prepay in full such LIBOR
Rate Loans of that Lender then outstanding, together with interest accrued
thereon and amounts required under Section 5.4, either on the last day of the
Interest Period thereof, if the Lender may lawfully continue to maintain such
LIBOR Rate Loans to such day, or immediately, if the Lender may not lawfully
continue to maintain such LIBOR Rate Loan. If the Borrower is required to so
prepay any LIBOR Rate Loan, then concurrently with such prepayment, the Borrower
shall borrow from the affected Lender, in the amount of such repayment, a Base
Rate Loan.
5.3 Increased Costs and Reduction of Return. (a) If any Lender
determines that, due to either (i) the introduction of or any change in the
interpretation of any law or regulation or (ii) the compliance by that Lender
with any guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law), there shall be any increase
in the cost to such Lender of agreeing to make or making, funding or maintaining
any LIBOR Rate Loans, then the Borrower shall be liable for, and shall from time
to time, no later than three (3) Business Days following demand (with a copy of
such demand to be sent to the Agent), pay to the Agent for the account of such
Lender, additional amounts as are sufficient to compensate such Lender for such
increased costs.
(b) If any Lender shall have determined that (i) the
introduction of any Capital Adequacy Regulation, (ii) any change in any Capital
Adequacy Regulation, (iii) any change in the interpretation or administration of
any Capital Adequacy Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof, or (iv)
compliance by the Lender or any corporation or other entity controlling the
Lender with any Capital Adequacy Regulation, affects or would affect the amount
of capital required or expected to be maintained by the Lender or any
corporation or other entity controlling the Lender and (taking into
consideration such Lender's or such corporation's or other entity's policies
with respect to capital adequacy and such Lender's desired return on capital)
determines that the amount of such capital is increased as a consequence of its
Commitments, loans, credits or obligations under this Agreement, then, no later
than three (3) Business Days following demand
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of such Lender to the Borrower through the Agent, the Borrower shall pay to the
Lender, from time to time as specified by the Lender, additional amounts
sufficient to compensate the Lender for such increase.
5.4 Funding Losses. The Borrower shall reimburse each Lender and hold
each Lender harmless from any loss or expense which the Lender may sustain or
incur as a consequence of:
(a) the failure of the Borrower to make on a timely
basis any payment of principal of any LIBOR Rate Loan;
(b) the failure of the Borrower to borrow, continue or convert
a Loan after the Borrower has given (or is deemed to have given) a Notice of
Borrowing or a Notice of Conversion/ Continuation;
(c) the prepayment or other payment (including after
acceleration thereof) of an LIBOR Rate Loan on a day that is not the last day of
the relevant Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its LIBOR Rate Loans or from fees payable to
terminate the deposits from which such funds were obtained.
5.5 Inability to Determine Rates. If the Agent determines that for any
reason adequate and reasonable means do not exist for determining the LIBOR Rate
for any requested Interest Period with respect to a proposed LIBOR Rate Loan, or
that the LIBOR Rate for any requested Interest Period with respect to a proposed
LIBOR Rate Loan does not adequately and fairly reflect the cost to the Lenders
of funding such Loan, the Agent will promptly so notify the Borrower and each
Lender. Thereafter, the obligation of the Lenders to make or maintain LIBOR Rate
Loans hereunder shall be suspended until the Agent revokes such notice in
writing. Upon receipt of such notice, the Borrower may revoke any Notice of
Borrowing or Notice of Conversion/Continuation then submitted by it. If the
Borrower does not revoke such Notice, the Lenders shall make, convert or
continue the Loans, as proposed by the Borrower, in the amount specified in the
applicable notice submitted by the Borrower, but such Loans shall be made,
converted or continued as Base Rate Loans instead of LIBOR Rate Loans.
5.6 Certificates of Lenders. Any Lender claiming reimbursement or
compensation under this Article 5 shall deliver to the Borrower (with a copy to
the Agent) a certificate setting forth in reasonable detail the amount payable
to the Lender hereunder and such certificate shall be conclusive and binding on
the Borrower in the absence of manifest error.
5.7 Survival. The agreements and obligations of the Borrower in this
Article 5 shall survive the payment of all other Obligations.
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ARTICLE 6
COLLATERAL
6.1 Grant of Security Interest. (a) As security for all present and
future Obligations, the Borrower hereby grants to the Agent, for the ratable
benefit of the Agent and the Lenders, a continuing security interest in, lien
on, assignment of and right of set-off against, all of the following property of
the Borrower, whether now owned or existing or hereafter acquired or arising,
regardless of where located:
(i) all Accounts;
(ii) all Inventory;
(iii) all contract rights, letters of credit, chattel
paper, instruments, notes, documents, and documents of title;
(iv) all General Intangibles;
(v) all Equipment;
(vi) all money, Investment Property, securities and
other property of any kind of the Borrower in the possession or under the
control of the Agent or any Lender, any assignee of or participant in the
Obligations, or a bailee of any such party or such party's affiliates;
(vii) all of the Borrower's deposit accounts, credits,
and balances with and other claims against the Agent or any Lender or any of its
affiliates or any other financial institution with which the Borrower maintains
deposits;
(viii) all books, records and other property related to
or referring to any of the foregoing, including, without limitation, books,
records, account ledgers, data processing records, computer software and other
property and General Intangibles at any time evidencing or relating to any of
the foregoing; and
(ix) all accessions to, substitutions for and
replacements, products and proceeds of any of the foregoing, including, but not
limited to, proceeds of any insurance policies, claims against third parties,
and condemnation or requisition payments with respect to all or any of the
foregoing.
All of the foregoing, together with the Real Estate covered by the Mortgage(s),
and all other property of the Borrower in which the Agent or any Lender may at
any time be granted a Lien, is herein collectively referred to as the
"Collateral."
(b) As security for all Obligations, the Borrower shall
simultaneously herewith execute and deliver to the Agent the Mortgage(s) to
grant to the Agent, for the ratable benefit of the Agent and the Lenders, a
continuing mortgage lien on the Real Estate and Premises.
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(c) All of the Obligations shall be secured by all of the
Collateral.
6.2 Perfection and Protection of Security Interest. (a) The Borrower
shall, at its expense, perform all steps requested in good faith by the Agent at
any time to perfect, maintain, protect, and enforce the Agent's Liens,
including, without limitation: (i) executing, delivering and/or filing and
recording of the Mortgages, the Patent and Trademark Agreements and executing
and filing financing or continuation statements, and amendments thereof, in form
and substance satisfactory to the Agent; (ii) delivering to the Agent the
originals of all instruments, documents, and chattel paper, and all other
Collateral of which the Agent determines it should have physical possession in
order to perfect and protect the Agent's security interest therein, duly
pledged, endorsed or assigned to the Agent without restriction; (iii) delivering
to the Agent warehouse receipts covering any portion of the Collateral located
in warehouses and for which warehouse receipts are issued and certificates of
title covering any portion of the collateral for which certificates of title
have been issued; (iv) when an Event of Default exists, transferring Inventory
to warehouses designated by the Agent; (v) placing notations on the Borrower's
books of account to disclose the Agent's security interest; (vii) delivering to
the Agent all letters of credit on which the Borrower is named beneficiary; and
(viii) taking such other steps as are deemed necessary or desirable by the
Agent, acting in good faith, to maintain and protect the Agent's Liens. To the
extent permitted by applicable law, the Agent may file, without the Borrower's
signature, one or more financing statements disclosing the Agent's Liens, and
the Agent will provide copies of such filings to the Borrower with reasonable
promptness after ninety-one (91) days after filing. The Borrower agrees that a
carbon, photographic, photostatic, or other reproduction of this Agreement or of
a financing statement is sufficient as a financing statement.
(b) If any Collateral is at any time in the possession or
control of any warehouseman, bailee or any of the Borrower's agents or
processors, then the Borrower shall notify the Agent thereof and shall, at the
request of Agent, notify such Person of the Agent's security interest in such
Collateral and instruct such Person to hold all such Collateral for the Agent's
account subject to the Agent's instructions. If at any time any Collateral is
located on any operating facility of the Borrower which is not owned by the
Borrower, then the Borrower shall, at the request of the Agent, obtain written
waivers, in form and substance satisfactory to the Agent, of all present and
future Liens to which the owner or lessor of such premises may be entitled to
assert against the Collateral. The Borrower shall not in default under this
subsection (b) with respect to Inventory which is in the possession or control
of a third party, or which is in a location, in violation of this subsection (b)
if the value (determined at cost) of such Inventory does not exceed $100,000 in
the aggregate.
(c) From time to time, the Borrower shall, upon the Agent's
good faith request, execute and deliver confirmatory written instruments
pledging to the Agent, for the ratable benefit of the Agent and the Lenders, the
Collateral with respect to the Borrower, but the Borrower's failure to do so
shall not affect or limit any security interest or any other rights of the Agent
or any Lender in and to the Collateral with respect to the Borrower. So long as
this Agreement is in effect and until all Obligations have been fully satisfied,
the Agent's Liens shall continue in full force and effect in all Collateral
(whether or not deemed eligible for the purpose of calculating the Availability
or as the basis for any advance, loan, extension of credit, or other financial
accommodation).
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6.3 Location of Collateral. The Borrower represents and warrants to the
Agent and the Lenders that: (a) Schedule 6.3 is a correct and complete list of
the Borrower's chief executive office, the location of its books and records,
the locations of the Collateral, and the locations of all of its other places of
business; and (b) Schedule 6.3 correctly identifies any of such facilities and
locations that are not owned by the Borrower and sets forth the names of the
owners and lessors or sublessors of and, to the best of the Borrower's
knowledge, the holders of any mortgages on, such facilities and locations. The
Borrower covenants and agrees that it will not (i) maintain any Collateral at
any location other than those locations listed for the Borrower on Schedule 6.3,
(ii) otherwise change or add to any of such locations, or (iii) change the
location of its chief executive office from the location identified in Schedule
6.3, unless it gives the Agent at least thirty (30) days' prior written notice
thereof and executes any and all financing statements and other documents that
the Agent requests in connection therewith. Without limiting the foregoing, the
Borrower represents that all of its Inventory (other than Inventory in transit)
is, and covenants that all of its Inventory will be, located either (a) on
premises owned by the Borrower, (b) on premises leased by the Borrower, provided
that the Agent has, if requested by the Agent, received an executed landlord
waiver from the landlord of such premises in form and substance satisfactory to
the Agent, or (c) in a public warehouse, provided that the Agent has, if
requested by the Agent, received an executed bailee letter from the applicable
public warehouseman in form and substance satisfactory to the Agent.
6.4 Title to, Liens on, and Sale and Use of Collateral. The Borrower
represents and warrants to the Agent and the Lenders and agrees with the Agent
and the Lenders that: (a) all of the Collateral is and will continue to be owned
by the Borrower free and clear of all Liens whatsoever, except for Permitted
Liens; (b) the Agent's Liens in the Collateral will not be subject to any prior
Liens, except for Permitted Liens for which, in the case of Collateral included
in the determination of Availability, the Agent has established a reserve
against Availability); (c) the Borrower will use, store, and maintain the
Collateral with all reasonable care and will use such Collateral for lawful
purposes only; and (d) the Borrower will not, without the Agent's prior written
approval, sell, or dispose of or permit the sale or disposition of any of the
Collateral except for sales of Inventory in the ordinary course of business and
sales of Equipment as permitted by Section 6.11. The inclusion of proceeds in
the Collateral shall not be deemed to constitute the Agent's or any Lender's
consent to any sale or other disposition of the Collateral except as expressly
permitted herein.
6.5 Appraisals. Whenever a Default or Event of Default exists, the
Borrower shall, at its expense and upon the Agent's request, provide the Agent
with appraisals or updates thereof of any or all of the Collateral from an
appraiser, and prepared on a basis, satisfactory to the Agent, such appraisals
and updates to include, without limitation, information required by applicable
law and regulation and by the internal policies of the Lenders.
6.6 Access and Examination; Confidentiality. (a) The Agent, accompanied
by any Lender which so elects, may at all reasonable times, and following
reasonable notice, during regular business hours (and at any time when a Default
or Event of Default exists and is continuing, with or without notice) have
access to, examine, audit, make extracts from or copies of and inspect any or
all of the Borrower's records, files, and books of account and the Collateral,
and discuss the Borrower's affairs with the Borrower's officers and management.
The Borrower will deliver to the Agent any instrument necessary for the Agent to
obtain records
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from any service bureau maintaining records for the Borrower. The Agent may, and
at the direction of the Majority Lenders shall, at any time when a Default or
Event of Default exists, and at the Borrower's expense, make copies of all of
the Borrower's books and records, or require the Borrower to deliver such copies
to the Agent. The Agent may, without expense to the Agent, use such of the
Borrower's respective personnel, supplies, and premises as may be reasonably
necessary for maintaining or enforcing the Agent's Liens. The Agent shall have
the right, at any time, in the Agent's name or in the name of a nominee of the
Agent, to verify the validity, amount or any other matter relating to the
Accounts, Inventory, or other Collateral, by mail, telephone, or otherwise.
(b) The Borrower agrees that, subject to the Borrower's prior
consent for uses other than in a traditional tombstone, which consent shall not
be unreasonably withheld or delayed, the Agent and each Lender may use the
Borrower's name in advertising and promotional material and in conjunction
therewith disclose the general terms of this Agreement. The Agent and each
Lender shall hold all non-public information obtained pursuant to the
requirements of this Agreement in accordance with their respective customary
procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices, and in any event may make
disclosure reasonably required by an assignee or a participant in connection
with the contemplated assignment or participation, or as required or requested
by any Governmental Authority or representative thereof, or pursuant to legal
process or Requirement of Law, or to its accountants, attorneys and other
advisors and shall require any such participant to agree to comply with this
Section 6.6(b); provided, however, that the Agent and any Lender may disclose
such information (1) to the extent reasonably required in connection with any
litigation or proceeding (including, but not limited to, any bankruptcy
proceeding) to which the Agent, any Lender or their respective Affiliates may be
party; (2) to the extent reasonably required in connection with the exercise of
any remedy hereunder or under any other Loan Document; (3) to the Agent's or
such Lender's independent auditors, accountants, attorneys and other
professional advisors; (4) as expressly permitted under the terms of any other
document or agreement regarding confidentiality to which the Borrower is party
or is deemed party with the Agent or such Lender, and (5) to its Affiliates.
6.7 Collateral Reporting. The Borrower shall provide the Agent with the
following documents at the following times in form satisfactory to the Agent:
(a) on a weekly basis, or more frequently if requested by the Agent, a schedule
of the Borrower's Accounts created since the last such schedule and a Borrowing
Base Certificate; (b) on a monthly basis, or more frequently if requested by
Agent, an aging of the Borrower's Accounts, together with a reconciliation to
the previous month's aging of the Borrower's Accounts and to the Borrower's
general ledger; (c) on a monthly basis, or more frequently if requested by
Agent, an aging of the Borrower's accounts payable; (d) on a monthly basis (or
more frequently if requested by the Agent), Inventory reports by category, with
additional detail showing additions to and deletions from the Inventory; (e)
upon request, copies of invoices in connection with the Borrower's Accounts,
customer statements, credit memos, remittance advices and reports, deposit
slips, shipping and delivery documents in connection with the Borrower's
Accounts and for Inventory and Equipment acquired by the Borrower, purchase
orders and invoices; (f) upon request, a statement of the balance of each of the
Intercompany Accounts; (g) such other reports as to the Collateral of the
Borrower as the Agent shall reasonably request from time to time; and (h) with
the delivery of each of the foregoing, a certificate of the Borrower executed by
an officer thereof
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certifying as to the accuracy and completeness of the foregoing. If any of the
Borrower's records or reports of the Collateral are prepared by an accounting
service or other agent, the Borrower hereby authorizes such service or agent to
deliver such records, reports, and related documents to the Agent, for
distribution to the Lenders.
6.8 Accounts. (a) The Borrower hereby represents and warrants to the
Agent and the Lenders, with respect to the Borrower's Accounts, that: (i) each
existing Account represents, and each future Account will represent, a bona fide
sale or lease and delivery of goods by the Borrower, or rendition of services by
the Borrower, in the ordinary course of the Borrower's business; (ii) each
existing Account is, and each future Account will be, for a liquidated amount
payable by the Account Debtor thereon on the terms set forth in the invoice
therefor or in the schedule thereof delivered to the Agent, without any offset,
deduction, defense, or counterclaim except those known to the Borrower and
disclosed to the Agent and the Lenders pursuant to this Agreement; (iii) no
payment will be received with respect to any Account, and no credit, discount,
or extension, or agreement therefor will be granted on any Account, except as
reported to the Agent and the Lenders in accordance with this Agreement, which
report shall be deemed to have been given if included in the next Borrowing Base
Report but which must be reported to the Agent separately if in the amount of
$100,000 or more; (iv) each copy of an invoice delivered to the Agent by the
Borrower will be a genuine copy of the original invoice sent to the Account
Debtor named therein; and (v) all goods described in any invoice representing a
sale of goods will have been delivered to the Account Debtor or xxxx-and-hold
documentation satisfactory to the Agent shall have been received from the
customer and all services of the Borrower described in each invoice will have
been performed.
(b) The Borrower shall not re-date any invoice or sale or make
sales on extended dating beyond that customary in the Borrower's business or
extend or modify any Account. If the Borrower becomes aware of any matter
adversely affecting the collectability of any Account or Account Debtor
involving an amount greater than $100,000, including information regarding the
Account Debtor's creditworthiness, the Borrower will promptly so advise the
Agent.
(c) The Borrower shall not accept any note or other instrument
(except a check or other instrument for the immediate payment of money) with
respect to any Account without the Agent's written consent. If the Agent
consents to the acceptance of any such instrument, it shall be considered as
evidence of the Account and not payment thereof and the Borrower will promptly
deliver such instrument to the Agent, endorsed by the Borrower to the Agent in a
manner satisfactory in form and substance to the Agent. Regardless of the form
of presentment, demand, notice of protest with respect thereto, the Borrower
shall remain liable thereon until such instrument is paid in full.
(d) The Borrower shall notify the Agent promptly of all
disputes and claims in excess of $50,000 with any Account Debtor, and agrees to
settle, contest, or adjust such dispute or claim at no expense to the Agent or
any Lender. No discount, credit or allowance shall be granted to any such
Account Debtor without the Agent's prior written consent, except for discounts,
credits and allowances made or given in the ordinary course of the Borrower's
business when no Event of Default exists hereunder. The Borrower shall send the
Agent a copy of each credit memorandum in excess of $50,000 as soon as issued.
The Agent may, and at the
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direction of the Majority Lenders shall, at all times when an Event of Default
exists hereunder, settle or adjust disputes and claims directly with Account
Debtors for amounts and upon terms which the Agent or the Majority Lenders, as
applicable, shall consider advisable and, in all cases, the Agent will credit
the Borrower's Loan Account with only the net amounts received by the Agent in
payment of any Accounts.
(e) If an Account Debtor returns any Inventory to the Borrower
when no Event of Default exists, then the Borrower shall promptly determine the
reason for such return and shall issue a credit memorandum to the Account Debtor
in the appropriate amount. The Borrower shall promptly (but no later than two
(2) Business Days) report to the Agent any return involving an amount in excess
of $50,000. Each such report shall indicate the reasons for the returns and the
locations and condition of the returned Inventory. In the event any Account
Debtor returns Inventory to the Borrower when an Event of Default exists, the
Borrower, upon request of the Agent, shall: (i) hold the returned Inventory in
trust for the Agent; (ii) segregate all returned Inventory from all of its other
property; (iii) dispose of the returned Inventory solely according to the
Agent's written instructions; and (iv) not issue any credits or allowances with
respect thereto without the Agent's prior written consent. All returned
Inventory shall be subject to the Agent's Liens thereon. Whenever any Inventory
is returned, the related Account shall be deemed ineligible to the extent of the
amount owing by the Account Debtor with respect to such returned Inventory
6.9 Collection of Accounts; Payments. (a) Until the Agent notifies the
Borrower to the contrary, the Borrower shall make collection of all Accounts and
other Collateral for the Agent, shall receive all payments as the Agent's
trustee, and shall immediately deliver all payments in their original form duly
endorsed in blank into a Payment Account established for the account of the
Borrower at a bank acceptable to Agent and subject to documentation acceptable
to Agent. If the Agent requests, the Borrower shall establish a lock-box service
for collections of Accounts at a bank acceptable to the Agent and pursuant to
documentation satisfactory to the Agent. If such lock-box service is
established, the Borrower shall instruct all Account Debtors to make all
payments directly to the address established for such service. If,
notwithstanding such instructions, the Borrower receives any proceeds of
Accounts, it shall receive such payments as the Agent's trustee, and shall
immediately deliver such payments to the Agent in their original form duly
endorsed in blank or deposit them into a Payment Account, as the Agent may
direct. All collections received in any such lock-box or Payment Account or
directly by the Borrower or the Agent, and all funds in any Payment Account or
other account to which such collections are deposited shall be subject to the
Agent's sole control. The Agent or the Agent's designee may, at any time after
the occurrence of an Event of Default, notify Account Debtors that the Accounts
have been assigned to the Agent and of the Agent's security interest therein,
and may collect them directly and charge the collection costs and expenses to
the Borrower's Loan Account as a Revolving Loan. So long as an Event of Default
has occurred and is continuing, the Borrower, at the Agent's request, shall
execute and deliver to the Agent such documents as the Agent shall require to
grant the Agent access to any post office box in which collections of Accounts
are received.
(b) If sales of Inventory are made or services are rendered
for cash, the Borrower shall immediately deliver to the Agent or deposit into a
Payment Account the cash which the Borrower receives.
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(c) All payments, including immediately available funds
received by the Agent at a bank designated by it, received by the Agent on
account of Accounts or as proceeds of other Collateral will be the Agent's sole
property for its benefit and the benefit of the Lenders and will be credited to
the Borrower's Loan Account (conditional upon final collection) after allowing
one (1) Business Day for collection; provided, however, that such payments shall
be deemed to be credited to the Borrower's Loan Account immediately upon receipt
for purposes of (i) determining Availability, (ii) calculating the Unused Line
Fee pursuant to Section 3.5, and (iii) calculating the amount of interest
accrued thereon solely for purposes of determining the amount of interest to be
distributed by the Agent to the Lenders (but not the amount of interest payable
by the Borrower).
(d) In the event the Borrower repays all of the Obligations
upon the termination of this Agreement or upon acceleration of the Obligations,
other than through the Agent's receipt of payments on account of the Accounts or
proceeds of the other Collateral, such payment will be credited (conditional
upon final collection) to the Borrower's Loan Account one (1) Business Day after
the Agent's receipt of such funds.
6.10 Inventory; Perpetual Inventory. The Borrower represents and
warrants to the Agent and the Lenders and agrees with the Agent and the Lenders
that all of the Inventory owned by the Borrower is and will be held for sale or
lease, or to be furnished in connection with the rendition of services, in the
ordinary course of the Borrower's business, and is and will be fit for such
purposes. The Borrower will keep its Inventory in good and marketable condition,
at its own expense, subject to normal levels of obsolescence reserves. Borrower
will not, without the prior written consent of the Agent, acquire or accept any
Inventory on consignment or approval. The Borrower agrees that all Inventory
produced in the United States will be produced in accordance with the Federal
Fair Labor Standards Act of 1938, as amended, and all rules, regulations, and
orders thereunder. The Borrower will conduct a physical count of the Inventory
at least once per Fiscal Year, and after and during the continuation of an Event
of Default, at such other times as the Agent requests. The Borrower will
maintain a perpetual inventory reporting system (except that each of Northern,
EBA and AHI has a non-perpetual system) at all times. The Borrower will not,
without the Agent's written consent, sell any Inventory on a xxxx-and-hold
(unless the Borrower shall have received from the customer xxxx-and-hold
documentation satisfactory to the Agent), guaranteed sale, sale and return, sale
on approval, consignment, or other repurchase or return basis.
6.11 Equipment. (a) To the best of its knowledge, the Borrower
represents and warrants to the Agent and the Lenders and agrees with the Agent
and the Lenders that all of the Equipment owned by the Borrower is and will be
used or held for use in the Borrower's business, and is and will be fit for such
purposes, ordinary wear and tear and unavoidable casualty excepted. The Borrower
shall keep and maintain its Equipment in good operating condition and repair
(ordinary wear and tear and unavoidable casualty excepted) and shall, if
consistent with good business practices, make all necessary replacements
thereof.
(b) The Borrower shall promptly inform the Agent of any
material additions to or deletions from the Equipment with the Borrower's
financial statements under Section 7.2. The Borrower shall not permit any
Equipment to become a fixture with respect to real property or to become an
accession with respect to other personal property with respect to which real or
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personal property the Agent does not have a Lien. The Borrower will not, without
the Agent's prior written consent, alter or remove any identifying symbol or
number on any of the Borrower's Equipment consisting of Collateral.
(c) The Borrower shall not, without the Agent's prior written
consent, sell, lease as a lessor, or otherwise dispose of any of the Borrower's
Equipment; provided, however, that the Borrower may dispose of obsolete or
unusable Equipment having an orderly liquidation value no greater than $250,000
in the aggregate in any Fiscal Year, without the Lender's consent, subject to
the conditions set forth in the next sentence. In the event any of such
Equipment is sold, transferred or otherwise disposed of pursuant to the proviso
contained in the immediately preceding sentence, (1) if such sale, transfer or
disposition is effected without replacement of such Equipment, or such Equipment
is replaced by Equipment leased by the Borrower or by Equipment purchased by the
Borrower subject to a Lien, then the Borrower shall deliver all of the cash
proceeds of any such sale, transfer or disposition to the Agent, which proceeds
shall be applied to the reduction of the Capital Expenditure Loans if the
Equipment is part of the Project and, otherwise, to the Term Loans, or (2) if
such sale, transfer or disposition is made in connection with the purchase by
the Borrower of replacement Equipment, then the Borrower shall use the proceeds
of such sale, transfer or disposition to purchase such replacement Equipment and
shall deliver to the Agent written evidence of the use of the proceeds for such
purchase. The Agent agrees to release the Agent's Liens with respect to the sale
of such Equipment prior to an Event of Default. All replacement Equipment
purchased by the Borrower shall be free and clear of all Liens except the
Agent's Lien and Permitted Liens.
6.12 Documents, Instruments, and Chattel Paper. The Borrower represents
and warrants to the Agent and the Lenders that (a) all documents, instruments,
and chattel paper describing, evidencing, or constituting Collateral, and all
signatures and endorsements thereon, are and will be complete, valid, and
genuine, and (b) all goods evidenced by such documents, instruments, and chattel
paper are and will be owned by the Borrower, free and clear of all Liens other
than Permitted Liens.
6.13 Right to Cure. The Agent may, in its discretion, and shall, at the
direction of the Majority Lenders, pay any amount or do any act required of the
Borrower hereunder or under any other Loan Document in order to preserve,
protect, maintain or enforce the Obligations, the Collateral or the Agent's
Liens therein, and which the Borrower fails to pay or do, including, without
limitation, payment of any judgment against the Borrower, any insurance premium,
any warehouse charge, any finishing or processing charge, any landlord's claim,
and any other Lien upon or with respect to the Collateral. All payments that the
Agent makes under this Section 6.14 and all out-of-pocket costs and expenses
that the Agent pays or incurs in connection with any action taken by it
hereunder shall be charged to the Borrower's Loan Account as a Revolving Loan.
Any payment made or other action taken by the Agent under this Section 6.14
shall be without prejudice to any right to assert an Event of Default hereunder
and to proceed thereafter as herein provided.
6.14 Power of Attorney. The Borrower hereby appoints the Agent and the
Agent's designee as the Borrower's attorney, with power: (a) to endorse the
Borrower's name on any checks, notes, acceptances, money orders, or other forms
of payment or security that come into the Agent's or any Lender's possession;
(b)so long as any Event of Default has occurred and is
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continuing, to sign the Borrower's name on any invoice, xxxx of lading,
warehouse receipt or other document of title relating to any Collateral, on
drafts against customers, on assignments of Accounts, on notices of assignment,
financing statements and other public records and to file any such financing
statements by electronic means with or without a signature as authorized or
required by applicable law or filing procedure; (c) so long as any Event of
Default has occurred and is continuing, to notify the post office authorities to
change the address for delivery of the Borrower's mail to an address designated
by the Agent and to receive, open and dispose of all mail addressed to the
Borrower; (d) to send requests for verification of Accounts to customers or
Account Debtors; (e) so long as any Event of Default has occurred and is
continuing and at such others times as may be commercially necessary, to clear
Inventory, the purchase of which was financed with Letters of Credit, through
customs in the Borrower's name, the Agent's name or the name of the Agent's
designee, and to sign and deliver to customs officials powers of attorney in the
Borrower's name for such purpose; and (f) to do all things necessary to carry
out this Agreement. The Borrower ratifies and approves all acts of such
attorney. None of the Lenders or the Agent nor their attorneys will be liable
for any acts or omissions or for any error of judgment or mistake of fact or law
other than gross negligence or willful misconduct. This power, being coupled
with an interest, is irrevocable until this Agreement has been terminated and
the Obligations have been fully satisfied.
6.15 The Agent's and Lenders' Rights, Duties and Liabilities. The
Borrower assumes all responsibility and liability arising from or relating to
the use, sale or other disposition of the Collateral. The Obligations shall not
be affected by any failure of the Agent or any Lender to take any steps to
perfect the Agent's Liens or to collect or realize upon the Collateral, nor
shall loss of or damage to the Collateral release the Borrower from any of the
Obligations. Following the occurrence and continuation of an Event of Default,
the Agent may (but shall not be required to), and at the direction of the
Majority Lenders shall, without notice to or consent from the Borrower, xxx upon
or otherwise collect, extend the time for payment of, modify or amend the terms
of, compromise or settle for cash, credit, or otherwise upon any terms, grant
other indulgences, extensions, renewals, compositions, or releases, and take or
omit to take any other action with respect to the Collateral, any security
therefor, any agreement relating thereto, any insurance applicable thereto, or
any Person liable directly or indirectly in connection with any of the
foregoing, without discharging or otherwise affecting the liability of the
Borrower for the Obligations or under this Agreement or any other agreement now
or hereafter existing between the Agent and/or any Lender and the Borrower.
6.16 Site Visits, Observations and Testing. The Agent and its
representatives will have the right at any reasonable time and upon reasonable
prior notice to enter and visit the Premises and any other place where any
property of the Borrower is located for the purposes of observing the Premises,
taking and removing soil or groundwater samples, and conducting tests on any
part of the Premises. The Agent is under no duty, however, to visit or observe
the Premises or to conduct tests, and any such acts by the Agent will be solely
for the purposes of protecting the Agent's Liens and preserving the Agent and
the Lenders' rights under this Agreement. No site visit, observation or testing
by the Agent and the Lenders will result in a waiver of any default of the
Borrower or impose any liability on the Agent or the Lenders. In no event will
any site visit, observation or testing by the Agent be a representation that
hazardous substances are or are not present in, on or under the Premises, or
that there has been or will be compliance with any Environmental Law. Neither
the Borrower nor any other party is entitled to rely on any site visit,
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observation or testing by the Agent. The Agent and the Lenders owe no duty of
care to protect the Borrower or any other party against, or to inform the
Borrower or any other party of, any hazardous substances or any other adverse
condition affecting the Premises. The Agent may in its discretion disclose to
the Borrower or any other party any report or findings made as a result of, or
in connection with, any site visit, observation or testing by the Agent and may
in its discretion allow its representative to provide split samples for the
Borrower's own purposes. The Borrower understands and agrees that the Agent
makes no warranty or representation to the Borrower or any other party regarding
the truth, accuracy or completeness of any such report or findings that may be
disclosed. The Borrower also understands that depending on the results of any
site visit, observation or testing by the Agent and disclosed to the Borrower,
the Borrower may have a legal obligation to notify one or more environmental
agencies of the results, that such reporting requirements are site-specific, and
are to be evaluated by the Borrower without advice or assistance from the Agent.
In each instance, the Agent will give the Borrower reasonable notice before
entering the Premises or any other place the Agent is permitted to enter under
this Section 6.17. The Agent will make reasonable efforts to avoid interfering
with the Borrower's use of the Premises or any other property in exercising any
rights provided hereunder.
ARTICLE 7
BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES
7.1 Books and Records. The Borrower shall maintain, at all times,
correct and complete books, records and accounts in which complete, correct and
timely entries are made of its transactions in accordance with GAAP applied
consistently with the audited Financial Statements required to be delivered
pursuant to Section 7.2(a) subject to normal year-end adjustments and the lack
of footnotes. The Borrower shall, by means of appropriate entries, reflect in
such accounts and in all Financial Statements proper liabilities and reserves
for all taxes and proper provision for depreciation and amortization of property
and bad debts, all in accordance with GAAP. The Borrower shall maintain at all
times books and records pertaining to the Collateral in such detail, form and
scope as the Agent or any Lender shall reasonably require, including, but not
limited to, records of (a) all payments received and all credits and extensions
granted with respect to the Accounts; (b) the return, rejections, repossession,
stoppage in transit, loss, damage, or destruction of any Inventory; and (c) all
other dealings affecting the Collateral.
7.2 Financial Information. The Borrower shall promptly furnish to each
Lender, all such financial information as the Agent or any Lender shall
reasonably request, and notify its auditors and accountants that the Agent, on
behalf of the Lenders, is authorized to obtain such information directly from
them, although the Borrower does not covenant that the auditors and accountants
will abide by the Borrower's authorization. Without limiting the foregoing, the
Borrower will furnish to the Agent, in sufficient copies for distribution by the
Agent to each Lender, in such detail as the Agent or the Lenders shall request,
the following:
(a) As soon as available, but in any event not later than one
hundred twenty (120) days after the close of each Fiscal Year, Consolidated
audited and consolidating audited
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balance sheets, and statements of income and expense, cash flow and of
stockholders' equity for Centrum and its Subsidiaries for such Fiscal Year, and
the accompanying notes thereto, setting forth in each case in comparative form
figures for the previous Fiscal Year, all in reasonable detail, fairly
presenting the financial position and the results of operations of Centrum and
its Subsidiaries as at the date thereof and for the Fiscal Year then ended, and
prepared in accordance with GAAP. Such statements shall be examined in
accordance with generally accepted auditing standards by and, in the case of
such statements performed on a consolidated basis, accompanied by a report
thereon unqualified as to scope of independent certified public accountants
selected by Centrum and reasonably satisfactory to the Agent. Centrum,
simultaneously with retaining such independent public accountants to conduct
such annual audit, shall send a letter to such accountants, with a copy to the
Agent and the Lenders, notifying such accountants that one of the primary
purposes for retaining such accountants' services and having audited financial
statements prepared by them is for use by the Agent and the Lenders. The
Borrower hereby authorizes the Agent to communicate directly with its certified
public accountants and, by this provision, authorizes those accountants to
disclose to the Agent any and all financial statements and other supporting
financial documents and schedules relating to the Borrower and to discuss
directly with the Agent the finances and affairs of the Borrower, although the
Borrower does not covenant that the auditors and accountants will abide by the
Borrower's authorization.
(b) As soon as available, but in any event not later than
thirty (30) days after the end of each month, Consolidated and consolidating
unaudited balance sheets of Centrum and its consolidated Subsidiaries as at the
end of such month, and Consolidated and consolidating unaudited statements of
income and expense and cash flow for Centrum and its consolidated Subsidiaries
for such month and for the period from the beginning of the Fiscal Year to the
end of such month, all in reasonable detail, fairly presenting the financial
position and results of operations of Centrum and its consolidated Subsidiaries
as at the date thereof and for such periods, and prepared in accordance with
GAAP applied consistently with the audited Financial Statements required to be
delivered pursuant to Section 7.2(a) subject to normal year-end adjustments and
the lack of footnotes. The Borrower shall certify by a certificate signed by its
chief financial officer that all such statements have been prepared in
accordance with GAAP and present fairly, subject to normal year-end adjustments
and the lack of footnotes, the Borrower's financial position as at the dates
thereof and its results of operations for the periods then ended.
(c) As soon as available, but in any event not later than
forty-five (45) days after the close of each fiscal quarter other than the
fourth quarter of a Fiscal Year, Consolidated and consolidating unaudited
balance sheets of Centrum and its consolidated Subsidiaries as at the end of
such quarter, and Consolidated and consolidating unaudited statements of income
and expense and statement of cash flows for Centrum and its Subsidiaries for
such quarter and for the period from the beginning of the Fiscal Year to the end
of such quarter, all in reasonable detail, fairly presenting the financial
position and results of operation of Centrum and its Subsidiaries as at the date
thereof and for such periods, prepared in accordance with GAAP consistent with
the audited Financial Statements required to be delivered pursuant to Section
7.2(a). The Borrower shall certify by a certificate signed by its chief
financial officer that all such statements have been prepared in accordance with
GAAP and present fairly, subject to normal year-end adjustments and the lack of
footnotes, the Borrower's financial position as at the dates thereof and its
results of operations for the periods then ended.
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(d) With each of the annual audited Financial Statements
delivered pursuant to Section 7.2(a), and within forty-five (45) days after the
end of each fiscal quarter, a certificate of the chief financial officer of the
Borrower (i) setting forth in reasonable detail the calculations required to
establish that the Borrower was in compliance with the covenants set forth in
Sections 9.26 through 9.29 during the period covered in such Financial
Statements and as at the end thereof, and (ii) stating that, except as explained
in reasonable detail in such certificate, (A) all of the representations and
warranties of the Borrower contained in this Agreement and the other Loan
Documents are correct and complete in all material respects as at the date of
such certificate as if made at such time, except for those that speak as of a
particular day, (B) the Borrower is, at the date of such certificate, in
compliance in all material respects with all of its respective covenants and
agreements in this Agreement and the other Loan Documents, (C) no Default or
Event of Default then exists or existed during the period covered by such
Financial Statements, (D) describing and analyzing in reasonable detail all
material trends, changes, and developments in each and all Financial Statements;
and (E) explaining the variances of the figures in the corresponding budgets and
prior Fiscal Year financial statements. If such certificate discloses that a
representation or warranty is not correct or complete, or that a covenant has
not been complied with, or that a Default or Event of Default existed or exists,
such certificate shall set forth what action the Borrower has taken or proposes
to take with respect thereto.
(e) No sooner than sixty (60) days and not less than thirty
(30) days prior to the beginning of each Fiscal Year, annual forecasts (to
include forecasted Consolidated and consolidating balance sheets, statements of
income and expenses and statements of cash flow) for Centrum and its
Subsidiaries as at the end of and for each month of such Fiscal Year.
(g) Promptly after filing with the PBGC and the IRS, a copy of
each annual report or other filing filed with respect to each Plan of the
Borrower.
(h) Promptly, upon the request of the Agent, if not otherwise
publicly available, copies of all reports, if any, to or other documents filed
by Centrum or any of its Subsidiaries with the Securities and Exchange
Commission under the Exchange Act, and all reports, notices, or statements sent
or received by the Borrower or any of its Subsidiaries to or from the holders of
any equity interests of the Borrower (other than routine non-material
correspondence sent by shareholders of the Borrower to the Borrower) or any such
Subsidiary or of any Debt for Borrowed Money of the Borrower or any of its
Subsidiaries registered under the Securities Act of 1933 or to or from the
trustee under any indenture under which the same is issued.
(i) As soon as available, but in any event not later than 15
days after the Borrower's receipt thereof, a copy of all management reports and
management letters prepared for the Borrower by PriceWaterhouseCoopers LLP or
any other independent certified public accountants of the Borrower.
(j) If requested by the Agent, copies of any and all proxy
statements, financial statements, and reports which the Borrower makes available
to its shareholders.
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(k) Promptly after filing with the IRS, a copy of each tax
return filed by the Borrower or by any of its Subsidiaries.
(l) Such additional information as the Agent and/or any Lender
may from time to time reasonably request regarding the financial and business
affairs of the Borrower or any Subsidiary.
7.3 Notices to the Lenders. The Borrower shall notify the Agent and
the Lenders, in writing of the following matters at the following times:
(a) Immediately after becoming aware of any Default or Event
of Default.
(b) Immediately after becoming aware of the assertion by the
holder of any capital stock of the Borrower or Subsidiary thereof or of any Debt
in excess of $100,000 that a default exists with respect thereto or that the
Borrower is not in compliance with the terms thereof, or the threat or
commencement by such holder of any enforcement action because of such asserted
default or non-compliance.
(c) Immediately after becoming aware of any material adverse
change in the Borrower's or any Subsidiary's property, business, operations, or
condition (financial or otherwise).
(d) Immediately after becoming aware of any pending or
threatened action, suit, proceeding, or counterclaim by any Person, or any
pending or threatened investigation by a Governmental Authority, which may, if
successful, have a Material Adverse Effect.
(e) Immediately after becoming aware of any pending or
threatened strike, work stoppage, unfair labor practice claim, or other labor
dispute affecting the Borrower or any of its Subsidiaries in a manner which
could reasonably be expected to have a Material Adverse Effect.
(f) Immediately after becoming aware of any violation of any
law, statute, regulation, or ordinance of a Governmental Authority affecting the
Borrower which could reasonably be expected to have a Material Adverse Effect.
(g) Immediately after receipt of any notice of any violation
by the Borrower or any of its Subsidiaries of any Environmental Law which could
reasonably be expected to have a Material Adverse Effect or that any
Governmental Authority has asserted that the Borrower or any Subsidiary thereof
is not in compliance with any Environmental Law or is investigating the
Borrower's or such Subsidiary's compliance therewith which, in either case, is
reasonably likely to give rise to liability in excess of $200,000.
(h) Immediately after receipt of any written notice that the
Borrower or any of its Subsidiaries is or may be liable to any Person as a
result of the Release or threatened Release of any Contaminant or that the
Borrower or any Subsidiary is subject to investigation by any Governmental
Authority evaluating whether any remedial action is needed to respond to the
Release or threatened Release of any Contaminant which, in either case, is
reasonably likely to give rise to liability in excess of $200,000.
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(i) Immediately after receipt of any written notice of the
imposition of any Environmental Lien against any property of the Borrower or any
of its Subsidiaries.
(j) Any change in the Borrower's name, state of incorporation,
or form of organization, trade names under which the Borrower will sell
Inventory or create Accounts, or to which instruments in payment of Accounts may
be made payable, in each case at least thirty (30) days prior thereto.
(k) Within ten (10) Business Days after the Borrower or any
ERISA Affiliate knows or has reason to know, that an ERISA Event or a prohibited
transaction (as defined in Sections 406 of ERISA and 4975 of the Code) has
occurred, and, when known, any action taken or threatened by the IRS, the DOL or
the PBGC with respect thereto.
(l) Upon request, or, in the event that such filing reflects a
significant change with respect to the matters covered thereby, within three (3)
Business Days after the filing thereof with the PBGC, the DOL or the IRS, as
applicable, copies of the following: (i) each annual report (form 5500 series),
including Schedule B thereto, filed with the PBGC, the DOL or the IRS with
respect to each Plan, (ii) a copy of each funding waiver request filed with the
PBGC, the DOL or the IRS with respect to any Plan and all communications
received by the Borrower or any ERISA Affiliate from the PBGC, the DOL or the
IRS with respect to such request, and (iii) a copy of each other filing or
notice filed with the PBGC, the DOL or the IRS, with respect to each Plan of
either Borrower or any ERISA Affiliate.
(m) Upon request, copies of each actuarial report for any Plan
or Multi-employer Plan and annual report for any Multi-employer Plan; and within
three (3) Business Days after receipt thereof by the Borrower or any ERISA
Affiliate, copies of the following: (i) any notices of the PBGC's intention to
terminate a Plan or to have a trustee appointed to administer such Plan; (ii)
any favorable or unfavorable determination letter from the IRS regarding the
qualification of a Plan under Section 401(a) of the Code; or (iii) any notice
from a Multi-employer Plan regarding the imposition of withdrawal liability.
(n) Within three (3) Business Days after the occurrence
thereof: (i) any changes in the benefits of any existing Plan which increase the
Borrower's annual costs with respect thereto by an amount in excess of $200,000
or the establishment of any new Plan or the commencement of contributions to any
Plan to which the Borrower or any ERISA Affiliate was not previously
contributing; or (ii) any failure by the Borrower or any ERISA Affiliate to make
a required installment or any other required payment under Section 412 of the
Code on or before the due date for such installment or payment.
(o) Within three (3) Business Days after the Borrower or any
ERISA Affiliate knows or has reason to know that any of the following events has
or will occur: (i) a Multi-employer Plan has been or will be terminated; (ii)
the administrator or plan sponsor of a Multi-employer Plan intends to terminate
a Multi-employer Plan; or (iii) the PBGC has instituted or will institute
proceedings under Section 4042 of ERISA to terminate a Multi-employer Plan.
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Each notice given under this Section 7.3 shall describe the
subject matter thereof in reasonable detail, and shall set forth the action that
the Borrower, its Subsidiary, or any ERISA Affiliate, as applicable, has taken
or proposes to take with respect thereto.
ARTICLE 8
GENERAL WARRANTIES AND REPRESENTATIONS
The Borrower warrants and represents to the Agent and the Lenders that
except as hereafter disclosed to and accepted by the Agent and the Majority
Lenders in writing:
8.1 Authorization, Validity, and Enforceability of this Agreement and
the Loan Documents. The Borrower has the corporate power and authority to
execute, deliver and perform this Agreement and the other Loan Documents, to
incur the Obligations, and to grant to the Agent Liens upon and security
interests in the Collateral. The Borrower has taken all necessary corporate
action (including without limitation, obtaining approval of its stockholders if
necessary) to authorize its execution, delivery, and performance of this
Agreement and the other Loan Documents to which it is a party. This Agreement
and the other Loan Documents have been duly executed and delivered by the
Borrower, and constitute the legal, valid and binding obligations of the
Borrower, enforceable against it in accordance with their respective terms
without defense, setoff or counterclaim. The Borrower's execution, delivery, and
performance of this Agreement and the other Loan Documents do not and will not
conflict with, or constitute a violation or breach of, or constitute a default
under, or result in the creation or imposition of any Lien upon the property of
the Borrower or any of its Subsidiaries by reason of the terms of (a) any
contract, mortgage, Lien, lease, agreement, indenture, or instrument to which
the Borrower is a party or which is binding upon it, (b) any Requirement of Law
applicable to the Borrower or any of its Subsidiaries, or (c) the certificate or
articles of incorporation or by-laws of the Borrower or any of its Subsidiaries.
8.2 Validity and Priority of Security Interest
The provisions of this Agreement, the Mortgages, and the other Loan
Documents create legal and valid Liens on all the Collateral in favor of the
Agent, for the ratable benefit of the Agent and the Lenders, and such Liens
constitute perfected and continuing Liens on all the Collateral, having priority
over all other Liens on the Collateral except Permitted Liens which are afforded
priority under applicable law (and not, for example, on account of the
Borrower's failure to provide the Agent and the Lenders a perfected and
continuing Lien), securing all the Obligations, and enforceable against the
Borrower and all third parties.
8.3 Organization and Qualification. The Borrower (a) is duly
incorporated and organized and validly existing in good standing under the laws
of the state of its incorporation, (b) is qualified to do business as a foreign
corporation and is in good standing in the jurisdictions set forth on Schedule
8.3 which are the only jurisdictions in which qualification is necessary in
order for it to own or lease its property and conduct its business and (c) has
all requisite power and authority to conduct its business and to own its
property.
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8.4 Corporate Name; Prior Transactions. Except as set forth on Schedule
8.4, the Borrower has not, during the past five (5) years, been known by or used
any other corporate or fictitious name, or been a party to any merger or
consolidation, or acquired all or substantially all of the assets of any Person,
or acquired any of its property outside of the ordinary course of business.
8.5 Subsidiaries and Affiliates. Schedule 8.5 is a correct and complete
list of the name and relationship to the Borrower of each and all of the
Borrower's Subsidiaries and other Affiliates. Each Subsidiary is (a) duly
incorporated and organized and validly existing in good standing under the laws
of its state of incorporation set forth on Schedule 8.5, and (b) qualified to do
business as a foreign corporation and in good standing in each jurisdiction in
which the failure to so qualify or be in good standing could reasonably be
expected to have a Material Adverse Effect.
8.6 Financial Statements and Projections. (a) The Borrower has
delivered to the Agent and the Lenders the audited balance sheet and related
statements of income, retained earnings, cash flows, and changes in stockholders
equity for Centrum and its consolidated Subsidiaries as of March 31, 1998, and
for the Fiscal Year then ended, accompanied by the report thereon of the
Borrower's independent certified public accountants, PriceWaterhouseCoopers LLP.
The Borrower has also delivered to the Agent and the Lenders the unaudited
balance sheet and related statements of income and cash flows for Centrum and
its consolidated Subsidiaries as of December 31, 1998. All such financial
statements have been prepared in accordance with GAAP and present accurately and
fairly the financial position of Centrum and its consolidated Subsidiaries as at
the dates thereof and their results of operations for the periods then ended
subject to normal year-end adjustments and the lack of footnotes.
(b) The Latest Projections when submitted to the Lenders as
required herein represent the Borrower's best estimate of the future financial
performance of Centrum and its consolidated Subsidiaries for the periods set
forth therein. The Latest Projections have been prepared on the basis of the
assumptions set forth therein, which the Borrower believes are fair and
reasonable in light of current and reasonably foreseeable business conditions at
the time submitted to the Lender.
8.7 Solvency. The Borrower is Solvent prior to and after giving effect
to the making of the Term Loans and the Revolving Loans to be made on the
Closing Date and the issuance of the Letters of Credit to be issued on the
Closing Date, and shall remain Solvent during the term of this Agreement.
, and (c) trade payables and other contractual obligations arising in
the ordinary course of business.
8.8 Distributions. Other than Distributions by a Borrower to its parent
which is a Borrower or to Centrum, no Distribution has been declared, paid, or
made upon or in respect of any capital stock or other securities of the Borrower
or any of its Subsidiaries.
8.9 Title to Property. The Borrower has good and marketable title in
fee simple to its real property listed in Schedule 8.10 hereto, and the Borrower
has good, indefeasible, and
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merchantable title to all of its other property (including, without limitation,
the assets reflected on the December 31, 1998 Financial Statements delivered to
the Agent and the Lenders, except as disposed of in the ordinary course of
business since the date thereof), free of all Liens except Permitted Liens.
8.10 Real Estate; Leases. Schedule 8.10 sets forth, as of the Closing
Date, a correct and complete list of all Real Estate owned by the Borrower or
any of its Subsidiaries, all leases and subleases of real or personal property
by the Borrower or its Subsidiaries as lessee or sublessee (other than leases of
personal property as to which the Borrower is lessee or sublessee for which the
value of such personal property is less than $100,000), and all leases and
subleases of real or personal property by the Borrower or its Subsidiaries as
lessor, lessee, sublessor or sublessee. To the best of the Borrower's knowledge,
each of such leases and subleases is valid and enforceable in accordance with
its terms and is in full force and effect, and no default by any party to any
such lease or sublease exists.
8.11 Proprietary Rights. Schedule 8.11 sets forth a correct and
complete list of all of the Borrower's Proprietary Rights. None of the
Proprietary Rights is subject to any licensing agreement or similar arrangement
except as set forth on Schedule 8.11. To the best of the Borrower's knowledge,
none of the Proprietary Rights infringes on or conflicts with any other Person's
property, and no other Person's property infringes on or conflicts with the
Proprietary Rights. The Proprietary Rights described on Schedule 8.11 constitute
all of the property of such type necessary to the current and anticipated future
conduct of the Borrower's business.
8.12 Trade Names and Terms of Sale. All trade names or styles under
which the Borrower or any of its Subsidiaries will sell Inventory or create
Accounts, or to which instruments in payment of Accounts may be made payable,
are listed on Schedule 8.12.
8.13 Litigation. Except as set forth on Schedule 8.13, there is no
pending or (to the best of the Borrower's knowledge) threatened, action, suit,
proceeding, or counterclaim by any Person, or investigation by any Governmental
Authority, or any basis for any of the foregoing, which could reasonably be
expected to cause a Material Adverse Effect.
8.14 Restrictive Agreements. Neither the Borrower nor any of its
Subsidiaries is a party to any contract or agreement, or subject to any charter
or other corporate restriction, which affects its ability to execute, deliver,
and perform the Loan Documents and repay the Obligations or which materially and
adversely affects or, insofar as the Borrower can reasonably foresee, could
reasonably be expected to materially and adversely affect, the property,
business, operations, or condition (financial or otherwise) of the Borrower or
such Subsidiary, or would in any respect cause a Material Adverse Effect.
8.15 Labor Disputes. Except as set forth on Schedule 8.15, to the best
of the Borrower's knowledge (a) there is no collective bargaining agreement or
other labor contract covering employees of the Borrower or any of its
Subsidiaries, (b) no such collective bargaining agreement or other labor
contract is scheduled to expire during the term of this Agreement, (c) no union
or other labor organization is seeking to organize, or to be recognized as, a
collective bargaining unit of employees of the Borrower or any of its
Subsidiaries or for any similar purpose, and (d) there is no pending or (to the
best of the Borrower's knowledge) threatened,
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strike, work stoppage, material unfair labor practice claim, or other material
labor dispute against or affecting the Borrower or its Subsidiaries or their
employees.
8.16 Environmental Laws. Except as otherwise disclosed on Schedule
8.16, to the best of the Borrower's knowledge:
(a) The Borrower and its Subsidiaries have complied in all
material respects with all Environmental Laws applicable to its Premises and
business, and neither the Borrower nor any Subsidiary nor any of its present
Premises or operations, nor its past property or operations, is subject to any
enforcement order from or liability agreement with any Governmental Authority or
private Person respecting (i) compliance with any Environmental Law or (ii) any
potential liabilities and costs or remedial action arising from the Release or
threatened Release of a Contaminant.
(b) The Borrower and its Subsidiaries have obtained all
permits necessary for their current operations under Environmental Laws, and all
such permits are in good standing and the Borrower and its Subsidiaries are in
compliance with all terms and conditions of such permits.
(c) Neither the Borrower nor any of its Subsidiaries, nor, to
the best of the Borrower's knowledge, any of its predecessors in interest, has
in violation of applicable law stored, treated or disposed of any hazardous
waste on any Premises, as defined pursuant to 40 CFR Part 261 or any equivalent
Environmental Law.
(d) Neither the Borrower nor any of its Subsidiaries has
received any summons, complaint, order or similar written notice that it is not
currently in compliance with, or that any Governmental Authority is
investigating its compliance with, any Environmental Laws or that it is or may
be liable to any other Person as a result of a Release or threatened Release of
a Contaminant.
(e) None of the present or past operations of the Borrower and
its Subsidiaries is the subject of any investigation by any Governmental
Authority evaluating whether any remedial action is needed to respond to a
Release or threatened Release of a Contaminant.
(f) There is not now, nor to the best of the Borrower's
knowledge has there ever been on or in the Premises:
(1) any underground storage tanks or surface impoundments,
(2) any asbestos-containing material, or
(3) any polychlorinated biphenyls (PCB's) used in
hydraulic oils, electrical transformers or other equipment.
(g) Neither the Borrower nor any of its Subsidiaries has filed
any notice under any requirement of Environmental Law reporting a spill or
accidental and unpermitted release or discharge of a Contaminant into the
environment.
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(h) Neither the Borrower nor any of its Subsidiaries has
entered into any negotiations or settlement agreements with any Person
(including, without limitation, the prior owner of its property) imposing
material obligations or liabilities on the Borrower or any of its Subsidiaries
with respect to any remedial action in response to the Release of a Contaminant
or environmentally related claim.
(i) None of the products manufactured, distributed or sold by
the Borrower or any of its Subsidiaries contain asbestos containing material.
(j) No Environmental Lien has attached to any Premises of the
Borrower or any of its Subsidiaries.
8.17 No Violation of Law. Neither the Borrower nor any of its
Subsidiaries is in violation of any law, statute, regulation, ordinance,
judgment, order, or decree applicable to it which violation could reasonably be
expected to have a Material Adverse Effect.
8.18 No Default. Neither the Borrower nor any of its Subsidiaries is in
default with respect to any note, indenture, loan agreement, mortgage, lease,
deed, or other agreement to which the Borrower or such Subsidiary is a party or
by which it is bound, which default could reasonably be expected to have a
Material Adverse Effect.
8.19 ERISA Compliance. Except as specifically disclosed in Schedule
8.19:
(a) Each Plan is in compliance in all material respects with
the applicable provisions of ERISA, the Code and other federal or state law.
Each Plan which is intended to qualify under Section 401(a) of the Code has
received a favorable determination letter from the IRS and to the best knowledge
of the Borrower, nothing has occurred which would cause the loss of such
qualification. The Borrower and each ERISA Affiliate has made all required
contributions to any Plan subject to Section 412 of the Code, and no application
for a funding waiver or an extension of any amortization period pursuant to
Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of
Borrower, threatened claims, actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan which has resulted or could reasonably be
expected to result in a Material Adverse Effect. There has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan which has resulted or could reasonably be expected to result in a
Material Adverse Effect.
(c) (i) Within the last five (5) years, no ERISA Event has
occurred or is reasonably expected to occur; (ii) no Pension Plan has any
Unfunded Pension Liability; (iii)within the last five (5) years, neither the
Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability under Title IV of ERISA with respect to any Pension Plan (other
than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither
the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability (and no event has occurred which, with the giving of notice
under Section 4219 of ERISA, would result in such liability) under Section 4201
or 4243 of ERISA with respect to a Multi-
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employer Plan; and (v) neither the Borrower nor any ERISA Affiliate has engaged
in a transaction that could be subject to Section 4069 or 4212(c) of ERISA.
8.20 Taxes. The Borrower and its Subsidiaries have filed all federal
and other tax returns and reports required to be filed, and have paid all
federal and other taxes, assessments, fees and other governmental charges levied
or imposed upon them or their properties, income or assets otherwise due and
payable except those which are being diligently contested in good faith and by
appropriate proceedings and as to which adequate financial reserves have been
established on Borrower's books and records and a stay of enforcement of any
such Lien is in effect.
8.21 Regulated Entities. None of the Borrower, any Person controlling
the Borrower, or any Subsidiary, is an "Investment Company" within the meaning
of the Investment Company Act of 1940. The Borrower is not subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, any state public utilities code or law, or any other
federal or state statute or regulation limiting its ability to incur
indebtedness.
8.22 Use of Proceeds; Margin Regulations. The proceeds of the Loans are
to be used solely for Permitted Uses. Neither the Borrower nor any Subsidiary is
engaged in the business of purchasing or selling Margin Stock or extending
credit for the purpose of purchasing or carrying Margin Stock.
8.23 Copyrights, Patents, Trademarks and Licenses, etc. To the best
knowledge of the Borrower, no slogan or other advertising device, product,
process, method, substance, part or other material now employed, or now
contemplated to be employed, by the Borrower or any Subsidiary infringes upon
any rights held by any other Person. No claim or litigation regarding any of the
foregoing is pending or, to the best of the Borrower's knowledge, threatened,
and no patent, invention, device, application, principle or any statute, law,
rule, regulation, standard or code is pending or, to the knowledge of the
Borrower, proposed, which, in either case, could reasonably be expected to have
a Material Adverse Effect.
8.24 No Material Adverse Change. No material adverse change has
occurred in the Borrower's Property, business, operations, or conditions
(financial or otherwise) since the date of the Financial Statements delivered to
the Lender. On the basis of a comprehensive review and assessment undertaken by
Borrower of Borrower's computer applications and inquiry made of Borrower's
material suppliers, vendors and customers Borrower reasonably believes that the
"Year 2000 problem" (that is, the risk that computer applications used by any
person may be unable to recognize and perform properly date-sensitive functions
involving certain dates prior to and any date after December 31, 1999) will not
result in a material adverse change in the operations, business, properties, or
condition (financial or otherwise) of the Borrower.
8.25 Full Disclosure. None of the representations or warranties made by
the Borrower or any Subsidiary in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on behalf of the Borrower or any Subsidiary in connection with the Loan
Documents (including the offering and disclosure materials delivered by or on
behalf of the
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Borrower to the Lenders prior to the Closing Date), contains any untrue
statement of a material fact or omits any material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading as of the time when made
or delivered.
8.26 Material Agreements. Except as set forth in Schedule 8.26 hereto
and in the other schedules to this Agreement there are no material agreements or
contracts to which the Borrower or any of its Subsidiaries is a party or is
bound as of the date hereof.
8.27 Bank Accounts. Schedule 8.27 contains a complete and accurate list
of all bank accounts maintained by the Borrower with any bank or other financial
institution.
8.28 Governmental Authorization. Except for the filing of financing
statements, and recording of the Mortgages and other security documents, no
approval, consent, exemption, authorization, or other action by, or notice to,
or filing with, any Governmental Authority or other Person is necessary or
required in connection with the execution, delivery or performance by, or
enforcement against, the Borrower or any of its Subsidiaries of this Agreement
or any other Loan Document.
8.29 Subordinated Debt. None of the Subordinated Debt Loan Documents
has been amended, supplemented, restated or otherwise modified except as
otherwise disclosed to the Agent in writing on or before the effective date of
any such amendment, supplement, restatement or other modification. In addition,
there does not exist any default or any event which upon notice or lapse of time
or both would constitute a default under the terms of any of the Subordinated
Debt Loan Documents. Except for the guaranty of AHI and Micafil, no other Person
included in the Borrower or its assets is obligated by Guaranty or otherwise
with respect to the Subordinated Debt.
ARTICLE 9
AFFIRMATIVE AND NEGATIVE COVENANTS
The Borrower covenants to the Agent and each Lender that, so
long as any of the Obligations remain outstanding or this Agreement is in
effect:
9.1 Taxes and Other Obligations. The Borrower shall, and shall cause
each of its Subsidiaries to, (a) file when due all tax returns and other reports
which it is required to file; (b) pay, or provide for the payment, when due, of
all taxes, fees, assessments and other governmental charges against it or upon
its property, income and franchises, make all required withholding and other tax
deposits, and establish adequate reserves for the payment of all such items, and
provide to the Agent and the Lenders, upon request, satisfactory evidence of its
timely compliance with the foregoing; and (c) pay when due all Debt owed by it
and all claims of materialmen, mechanics, carriers, warehousemen, landlords,
processors and other like Persons, and all other indebtedness owed by it and
perform and discharge in a timely manner all other obligations undertaken by it;
provided, however, so long as the Borrower has notified the Agent in writing,
neither the Borrower nor any of its Subsidiaries need pay any tax, fee,
assessment, or
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governmental charge, or materialmen or mechanics charges (in connection with
improvements to the Real Estate) that (i) it is contesting in good faith by
appropriate proceedings diligently pursued, (ii) the Borrower or its Subsidiary,
as the case may be, has established proper reserves for as provided in GAAP,
(iii)if not paid, could not reasonably be expected to have a Material Adverse
Effect, and (iv) no Lien (other than a Permitted Lien) results from such
non-payment.
9.2 Corporate Existence and Good Standing. The Borrower shall, and
shall cause each of its Subsidiaries to, maintain its corporate existence and
its qualification and good standing in all jurisdictions in which the failure to
maintain such existence and qualification or good standing could reasonably be
expected to have a Material Adverse Effect.
9.3 Compliance with Law and Agreements; Maintenance of Licenses. The
Borrower shall comply, and shall cause each Subsidiary to comply, in all
material respects with all Requirements of Law of any Governmental Authority
having jurisdiction over it or its business (including the Federal Fair Labor
Standards Act). The Borrower shall, and shall cause each of its Subsidiaries to,
obtain and maintain all licenses, permits, franchises, and governmental
authorizations necessary to own its property and to conduct its business as
conducted on the Closing Date for which the failure so to obtain or maintain
could reasonably be expected to have a Material Adverse Effect. The Borrower
shall not modify, amend or alter its certificate or article of incorporation
other than in a manner which does not adversely affect the rights of the Lenders
or the Agent.
9.4 Maintenance of Property. The Borrower shall, and shall cause each
of its Subsidiaries to, maintain all of its property necessary and useful in the
conduct of its business, in good operating condition and repair, ordinary wear
and tear and unavoidable casualty excepted.
9.5 Insurance. (a) The Borrower shall maintain, and shall cause each of
its Subsidiaries to maintain, with financially sound and reputable insurers
having a rating of at least A-VII or better by Best Rating Guide, insurance
against loss or damage by fire with extended coverage; theft, burglary,
pilferage and loss in transit; public liability and third party property damage;
larceny, embezzlement or other criminal liability; business interruption; public
liability and third party property damage; and such other hazards or of such
other types as is customary for Persons engaged in the same or similar business,
as the Agent, in its discretion, or acting at the direction of the Majority
Lenders, shall specify, in amounts, and under policies acceptable to the Agent
and the Majority Lenders. Without limiting the foregoing, the Borrower shall
also maintain, and shall cause each of its Subsidiaries to maintain, flood
insurance, in the event of a designation of the area in which any Real Estate
covered by the Mortgages and any of the Equipment and Inventory located on such
Real Estate is located as "flood prone" or a "flood risk area," (
hereinafter "SFHA") as defined by the Flood Disaster Protection Act of 1973, in
an amount to be reasonably determined by the Agent, and shall comply with the
additional requirements of the National Flood Insurance Program as set forth in
said Act. The Borrower shall also maintain flood insurance for its Inventory and
Equipment which is, at any time, located in a SFHA.
(b) The Borrower shall cause the Agent, for the ratable
benefit of the Agent and the Lenders, to be named in each such policy as secured
party or mortgagee and sole loss
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payee or additional insured, in a manner acceptable to the Agent. Each policy of
insurance shall contain a clause or endorsement requiring the insurer to give
not less than thirty (30) days' prior written notice to the Agent in the event
of cancellation of the policy for any reason whatsoever and a clause or
endorsement stating that the interest of the Agent shall not be impaired or
invalidated by any act or neglect of the Borrower or any of its Subsidiaries or
the owner of any premises for purposes more hazardous than are permitted by such
policy. All premiums for such insurance shall be paid by the Borrower when due,
and certificates of insurance and, if requested by the Agent or any Lender,
photocopies of the policies, shall be delivered to the Agent, in each case in
sufficient quantity for distribution by the Agent to each of the Lenders. If the
Borrower fails to procure such insurance or to pay the premiums therefor when
due, the Agent may, and at the direction of the Majority Lenders shall, do so
from the proceeds of Revolving Loans.
(c) The Borrower shall promptly notify the Agent and the
Lenders of any loss, damage, or destruction to the Collateral arising from its
use, whether or not covered by insurance. The Agent is hereby authorized to
collect all insurance proceeds directly, and to apply or remit them as follows:
(i) With respect to insurance proceeds relating to
property other than Collateral, after deducting from such proceeds the
reasonable expenses, if any, incurred by the Agent in the collection or handling
thereof, the Agent shall promptly remit to the Borrower such proceeds.
(ii) With respect to insurance proceeds relating to
Collateral other than Fixed Assets, after deducting from such proceeds the
reasonable expenses, if any, incurred by the Agent in the collection or handling
thereof, the Agent shall apply such proceeds, ratably, to the reduction of the
Obligations in the order provided for in Section 4.11.
(iii) With respect to insurance proceeds relating to
Collateral consisting of Fixed Assets, after deducting from such proceeds the
reasonable expenses, if any, incurred by the Agent in the collection or handling
thereof, the Agent shall apply such proceeds, ratably, to the reduction of the
Capital Expenditure Loans if the Equipment is part of the Project and,
otherwise, to the Term Loans, or at the option of the Majority Lenders, may
permit or require the Borrower to use such money, or any part thereof, to
replace, repair, restore or rebuild the relevant Fixed Assets in a diligent and
expeditious manner with materials and workmanship of substantially the same
quality as existed before the loss, damage or destruction; provided, however,
that so long as there does not then exist any Default or Event of Default, the
Borrower shall be permitted to adjust the claim, and use insurance proceeds,
relating to Collateral consisting of Fixed Assets in an aggregate amount not to
exceed $500,000 with respect to any occurrence, to replace, repair, restore or
rebuild the relevant Fixed Assets, in the manner set forth in this sentence; and
provided, further, that the Borrower first (i) provides the Agent and the
Majority Lenders with plans and specifications for any such repair or
restoration which shall be reasonably satisfactory to the Agent and the Majority
Lenders and (ii) demonstrates to the reasonable satisfaction of the Agent and
the Majority Lenders that the funds available to it will be sufficient to
complete such project in the manner provided therein.
9.6 Condemnation. (a) The Borrower shall, immediately upon learning of
the institution of any proceeding for the condemnation or other taking of any of
its property, notify the Agent of
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the pendency of such proceeding, and agrees that the Agent may participate in
any such proceeding, and the Borrower from time to time will deliver to the
Agent all instruments reasonably requested by the Agent to permit such
participation.
(b) The Agent is hereby authorized to collect the proceeds of
any condemnation claim or award directly, and to apply or remit them as follows:
(i) With respect to condemnation proceeds relating to
property other than Collateral, after deducting from such proceeds the
reasonable expenses, if any, incurred by the Agent in the collection or handling
thereof, the Agent shall remit to the Borrower such proceeds.
(ii) With respect to condemnation proceeds relating to
Collateral other than Fixed Assets, after deducting from such proceeds the
reasonable expenses, if any, incurred by the Agent in the collection or handling
thereof, the Agent shall apply such proceeds, ratably, to the reduction of the
Obligations in the order provided for in Section 4.11.
(iii) With respect to condemnation proceeds relating to
Collateral consisting of Fixed Assets, after deducting from such proceeds the
reasonable expenses, if any, incurred by the Agent in the collection or handling
thereof, the Agent shall apply such proceeds, ratably, to the reduction of the
Capital Expenditure Loans if the Equipment is part of the Project and,
otherwise, to the Term Loans, or at the option of the Majority Lenders, may
permit or require the Borrower to use such money, or any part thereof, to
replace, repair, restore or rebuild the relevant Fixed Assets in a diligent and
expeditious manner with materials and workmanship of substantially the same
quality as existed before the condemnation; provided, however, that so long as
there does not then exist any Default or Event of Default, the Borrower shall be
permitted to use proceeds relating to Collateral consisting of Fixed Assets in
an aggregate amount not to exceed $500,000 with respect to any occurrence, to
replace, repair, restore or rebuild the relevant Fixed Assets, in the manner set
forth in this sentence; and provided, further, that plans and specifications for
any such repair or restoration shall be reasonably satisfactory to the Agent and
the Majority Lenders and shall be subject to the reasonable approval of the
Agent and the Majority Lenders.
9.7 Environmental Laws. (a) The Borrower shall, and shall cause each of
its Subsidiaries to, conduct its business in compliance with all Environmental
Laws applicable to it, including, without limitation, those relating to the
generation, handling, use, storage, and disposal of any Contaminant. The
Borrower shall, and shall cause each of its Subsidiaries to, take prompt and
appropriate action to respond to any non-compliance with Environmental Laws and
shall regularly report to the Agent on such response.
(b) Without limiting the generality of the foregoing,
following an Event of Default and prior to an Event of Default for cause
reasonably determined by the Agent, the Borrower shall submit to the Agent and
the Lenders annually, commencing on the first Anniversary Date, and on each
Anniversary Date thereafter, an update of the status of each environmental
compliance or liability issue. The Agent or any Lender may request copies of
technical reports prepared by the Borrower and its communications with any
Governmental Authority to determine whether the Borrower or any of its
Subsidiaries is proceeding reasonably
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to correct, cure or contest in good faith any alleged non-compliance or
environmental liability. The Borrower shall, at the Agent's or the Majority
Lenders' request and at the Borrower's expense, (a) retain an independent
environmental engineer acceptable to the Agent to evaluate the site, including
tests if appropriate, where the non-compliance or alleged non-compliance with
Environmental Laws has occurred and prepare and deliver to the Agent, in
sufficient quantity for distribution by the Agent to the Lenders, a report
setting forth the results of such evaluation, a proposed plan for responding to
any environmental problems described therein, and an estimate of the costs
thereof, and (b) provide to the Agent and the Lenders a supplemental report of
such engineer whenever the scope of the environmental problems, or the response
thereto or the estimated costs thereof, shall change in any material respect.
9.8 Compliance with ERISA. The Borrower shall, and shall cause each of
its ERISA Affiliates to: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state law; (b) cause each Plan which is qualified under Section 401(a) of the
Code to maintain such qualification; (c) make all required contributions to any
Plan subject to Section 412 of the Code; (d) not engage in a prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan; and (e) not engage in a transaction that is subject to Section 4069 or
4212(c) of ERISA.
9.9 Mergers, Consolidations or Sales . Except as set forth on Schedule
9.9 and except for acquisitions which are the subject of an advance under the
Acquisition Line, neither the Borrower nor any of its Subsidiaries shall enter
into any transaction of merger, reorganization, or consolidation, or transfer,
sell, assign, lease, or otherwise dispose of all or any part of its property, or
wind up, liquidate or dissolve, or agree to do any of the foregoing, except (i)
for sales of Inventory in the ordinary course of its business and (ii) for sales
or other dispositions of Equipment in the ordinary course of business that are
obsolete or no longer useable by Borrower in its business as permitted by
Section 6.11. The Agent agrees to release the Agent's Liens with respect to the
disposition of Inventory and Equipment permitted under this Section provided
that no Event of Default exists and is continuing.
9.10 Distributions; Capital Change; Restricted Investments. Neither the
Borrower nor any of its Subsidiaries shall (i) directly or indirectly declare or
make, or incur any liability to make, any Distribution, except Distributions to
the Borrower by its Subsidiaries, (ii) make any change in its capital structure
which could have a Material Adverse Effect, or (iii) make any Restricted
Investment; provided, however, that, if there exists no Default or Event of
Default and Availability shall at all times be sufficient in the judgement of
the Agent, the Borrower may pay dividends to Centrum and, without duplication,
may pay management fees to Centrum, solely for the purpose of (a) paying
principal, interest and charges under the Subordinated Debt at the times and in
the manner permitted in the Subordination Agreement, provided, however, that,
prior to making the payment on the Subordinated Debt due at maturity, the
Borrower shall have provided the Agent with a calculation of the Consolidated
Fixed Charge Coverage Ratio for the period ending December 31, 2000, which
calculation shall treat the Subordinated Debt principal payment due at maturity
as being due as of December 31, 2000 and shall show that, if such payment were
to have been made on that date, the Borrower would not have been in violation of
the Fixed Charge Coverage Ratio under Section 9.27, and (b) covering
Consolidated taxes payable by Centrum and, subject to the Agent's agreement
regarding aggregate amounts, SEC filing, accounting and other general
administrative expenses.
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9.11 Transactions Affecting Collateral or Obligations. Neither the
Borrower nor any of its Subsidiaries shall enter into any transaction which
would be reasonably expected to have a Material Adverse Effect.
9.12 Guaranties. Neither the Borrower nor any of its Subsidiaries shall
make, issue, or become liable on any Guaranty, except Guaranties of the
Obligations in favor of the Agent and except Guaranties of Micafil and Northern
in favor of the Investors.
9.13 Debt. Except as set forth in Schedule 9.13, neither the Borrower
nor any of its Subsidiaries shall incur or maintain any Debt for Borrowed Money,
other than: (a) the Obligations; (b) other Debt for Borrowed Money existing on
the Closing Date and reflected in the Financial Statements dated December 31,
1998; (c) other Debt for Borrowed Money secured by purchase money security
interests which are Permitted Liens; and (d) without duplication, other Debt for
Borrowed Money secured by Permitted Liens.
9.14 Prepayment. Neither the Borrower nor any of its Subsidiaries shall
voluntarily prepay any Debt, except the Obligations in accordance with the terms
of this Agreement.
9.15 Transactions with Affiliates. Except as permitted by Section 9.10,
neither the Borrower nor any of its Subsidiaries shall, sell, transfer,
distribute, or pay any money or property, including, but not limited to, any
fees or expenses of any nature (including, but not limited to, any fees or
expenses for management services), to any Affiliate, or lend or advance money or
property to any Affiliate, or invest in (by capital contribution or otherwise)
or purchase or repurchase any stock or indebtedness, or any property, of any
Affiliate, or become liable on any Guaranty of the indebtedness, dividends, or
other obligations of any Affiliate. Notwithstanding the foregoing, the Borrower
and its Subsidiaries may (a) engage in transactions with Affiliates in the
ordinary course of business consistent with past practices, in amounts and upon
terms fully disclosed to the Agent and the Lenders, and no less favorable to the
Borrower and its Subsidiaries than would be obtained in a comparable
arm's-length transaction with a third party who is not an Affiliate, including
but not limited to compensation paid to Affiliates who are employees, and (b)
payment by Micafil of obligations arising under its operating agreement with
respect to Micafil-Axis, L.L.C. not to exceed $100,000 in the aggregate.
9.16 Transactions with AHI and Northern. Notwithstanding the provisions
of Sections 9.10, 9.12 and 9.14, the Borrower may make loans or otherwise
provide credit or credit support to AHI's and Northern's operations provided
such loans and other credit support do not exceed $1,000,000 in the aggregate
outstanding at any time, of which no more than $500,000 may be used to fund
losses and the balance shall be for working capital uses.
9.17 Investment Banking and Finder's Fees. Neither the Borrower nor any
of its Subsidiaries shall pay or agree to pay, or reimburse any other party with
respect to, any investment banking or similar or related fee, underwriter's fee,
finder's fee, or broker's fee to any Person in connection with this Agreement.
The Borrower shall defend and indemnify the Agent and the Lenders against and
hold them harmless from all claims of any Person that the Borrower is obligated
to pay for any such fees, and all costs and expenses (including without
limitation, attorneys' fees) incurred by the Agent and/or any Lender in
connection therewith.
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9.18 Compensation. Neither the Borrower nor any of its Subsidiaries
shall, directly or indirectly pay any compensation in any form (including,
without limitation, salary, bonuses, commissions, fees, and incentive
compensation) to its directors, officers and employees other than reasonable
compensation for services rendered or under written compensation agreements
approved by the Agent, which approval shall not be unreasonably withheld.
9.19 Business Conducted. The Borrower shall not and shall not permit
any of its Subsidiaries to, engage directly or indirectly, in any line of
business other than the businesses in which the Borrower is engaged on the
Closing Date.
9.20 Liens. Neither the Borrower nor any of its Subsidiaries shall
create, incur, assume, or permit to exist any Lien on any property now owned or
hereafter acquired by any of them, except Permitted Liens.
9.21 Sale and Leaseback Transactions Neither the Borrower nor any of
its Subsidiaries shall, directly or indirectly, enter into any arrangement with
any Person providing for the Borrower or such Subsidiary to lease or rent
property that the Borrower or such Subsidiary has sold or will sell or otherwise
transfer to such Person.
9.22 New Subsidiaries. The Borrower shall not, directly or indirectly,
organize, create, acquire or permit to exist any Subsidiary other than those
listed on Schedule 8.5.
9.23 Fiscal Year. The Borrower shall not change its Fiscal Year.
9.24 Capital Expenditures. Neither Centrum nor any of its Subsidiaries
shall make or incur any Capital Expenditure if, after giving effect thereto, the
aggregate amount of all Capital Expenditures by the Centrum and its Subsidiaries
on a consolidated basis would exceed in Fiscal Year the following:
Fiscal Year Amount
----------- ------
1999 $ 2,900,000
2000 and 2001 combined $10,000,000 (of which no more than
$2,000,000 may be for
Capital Expenditures not
included in the Project)
2002 and thereafter $ 2,000,000
9.25 Operating Lease Obligations. Neither Centrum nor any of its
Subsidiaries shall enter into, or suffer to exist, any lease of real or personal
property as lessee or sublessee (other than a Capital Lease), if, after giving
effect thereto, the aggregate amount of Rentals (as hereinafter defined) payable
by Centrum and its Subsidiaries on a consolidated basis in any Fiscal Year in
respect of such lease and all other such leases would exceed $2,500,000 (such
amount being referred to herein as "Permitted Rentals"). The term "Rentals"
means all payments due from the lessee or sublessee under a lease, including,
without limitation, basic rent, percentage rent, property taxes, utility or
maintenance costs, and insurance premiums.
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9.26 Adjusted Tangible Net Worth. Centrum and its Subsidiaries will
maintain Consolidated Adjusted Tangible Net Worth, determined as of the last day
of each fiscal quarter, of not less than $6,500,000, plus an amount equal to 50%
of Centrum's and its Subsidiaries' consolidated net income (without regard to
any loss) from each fiscal year of Centrum and its Subsidiaries commencing with
the fiscal year ending March 31, 1999.
9.27 Fixed Charge Coverage Ratio. Centrum and its Subsidiaries will
maintain a Fixed Charge Coverage Ratio for each period of four consecutive
fiscal quarters ended at the end of the fiscal quarter set forth below of not
less than the ratio set forth below opposite such fiscal quarter:
Fiscal Year Ratio
----------- -----
1999 1.10 to 1.0
2000 1.25 to 1.0
2001 1.10 to 1.0
2002 and thereafter 1.25 to 1.0
9.28 Use of Proceeds. The Borrower shall not, and shall not suffer or
permit any Subsidiary to, use any portion of the Loan proceeds, directly or
indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or otherwise
refinance indebtedness of the Borrower or others incurred to purchase or carry
Margin Stock, (iii) to extend credit for the purpose of purchasing or carrying
any Margin Stock, or (iv) to acquire any security in any transaction that is
subject to Section 13 or 14 of the Exchange Act except in connection with a
purchase financed under the Acquisition Line for which the Agent shall have
received such opinions as the Agent may have reasonably requested with respect
to the Exchange Act.
9.29 Unused Availability. The Borrower shall maintain on the average
for each calendar month, and with all its obligations with customary terms
within the industry, Availability in an amount no less than $500,000.
9.30 Further Assurances. The Borrower shall execute and deliver, or
cause to be executed and delivered, to the Agent and/or the Lenders such
documents and agreements, and shall take or cause to be taken such actions, as
the Agent or any Lender may, from time to time, reasonably request to carry out
the terms and conditions of this Agreement and the other Loan Documents.
9.31 Motor Vehicles Titles. Upon request by the Agent, the Borrower
shall deliver to the Agent all original motor vehicle titles for the purposes of
the Agent's perfecting its lien on motor vehicles.
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ARTICLE 10
CONDITIONS OF LENDING
10.1 Conditions Precedent to Making of Loans on the Closing Date. The
obligation of the Lenders to make the initial Revolving Loans on the Closing
Date and to make the Term Loans and the Capital Expenditure Loans and the
obligation of the Agent to cause to be issued or provide Credit Support for any
Letter of Credit on the Closing Date and the obligation of the Lenders to
participate in Letters of Credit issued on the Closing Date or in Credit Support
for any Letters of Credit, are subject to the following conditions precedent
having been satisfied in a manner satisfactory to the Agent and each Lender:
(a) This Agreement and the other Loan Documents described on
EXHIBIT D have been executed by each party thereto and the Borrower shall have
performed and complied with all covenants, agreements and conditions contained
herein and the other Loan Documents which are required to be performed or
complied with by the Borrower before or on such Closing Date.
(b) Upon making the Revolving Loans on the Closing Date
(including such Revolving Loans made to finance the Closing Fee or otherwise
pursuant to Section 4.11 as reimbursement for fees, costs and expenses then
payable under this Agreement) and with all its obligations with customary terms
within the industry, the Borrower would have Availability in an amount no less
than $2,500,000.
(c) All representations and warranties made hereunder and in
the other Loan Documents shall be true and correct as of the Closing Date as if
made on such date.
(d) No Default or Event of Default shall exist on the Closing
Date, or would exist after giving effect to the Loans to be made on such date.
(e) The Agent and the Lenders shall have received such
opinions of counsel for the Borrower and its Subsidiaries as the Agent or any
Lender shall request, each such opinion to be in a form, scope, and substance
satisfactory to the Agent, the Lenders, and their respective counsel.
(f) The Agent and the Lenders shall have received title
policies, in form and substance acceptable to Agent, with respect to the
Mortgages.
(g) The Agent shall have received:
(i) acknowledgment copies of proper financing statements,
duly filed on or before the Closing Date under the UCC of all jurisdictions that
the Agent may deem necessary or desirable in order to perfect the Agent's Lien;
and
(ii) duly executed UCC-3 Termination Statements and such
other instruments, in form and substance satisfactory to the Agent, as shall be
necessary to terminate and satisfy all Liens on the Property of the Borrower and
its Subsidiaries except Permitted Liens.
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(h) The Borrower shall have paid all fees and expenses of the
Agent and the Attorney Costs incurred in connection with any of the Loan
Documents and the transactions contemplated thereby to the extent invoiced.
(i) The Agent shall have received evidence, in form, scope,
and substance, reasonably satisfactory to the Agent, of all insurance coverage
as required by this Agreement.
(j) The Agent shall have received the fully executed
Subordination Agreement in form and content acceptable to the Agent. The Agent
shall have received and approved copies of the fully executed Subordinated Debt
Loan Documents, all of which must be in form and content acceptable to the
Agent.
(k) The Agent and the Lenders shall have had an opportunity,
if they so choose, to examine the books of account and other records and files
of the Borrower and to make copies thereof, and to conduct a pre-closing audit
which shall include, without limitation, verification of Inventory, Accounts,
and Availability, and the results of such examination and audit shall have been
satisfactory to the Agent and the Lenders in all respects.
(l) All proceedings taken in connection with the execution of
this Agreement, the Term Loan Notes, the Capital Expenditure Loan Notes all
other Loan Documents and all documents and papers relating thereto shall be
satisfactory in form, scope, and substance to the Agent and the Lenders.
(m) The Agent shall have received the Corporate Guaranties,
along with such certificates, opinions and other documents with respect to the
Corporate Guaranties and the Corporate Guarantors as the Agent may request.
The acceptance by the Borrower of any Loans made on the Closing Date
shall be deemed to be a representation and warranty made by the Borrower to the
effect that all of the conditions precedent to the making of such Loans have
been satisfied, with the same effect as delivery to the Agent and the Lenders of
a certificate signed by a Responsible Officer of the Borrower, dated the Closing
Date, to such effect.
Execution and delivery to the Agent by a Lender of a counterpart of
this Agreement shall be deemed confirmation by such Lender that (i) all
conditions precedent in this Section 10.1 have been fulfilled to the
satisfaction of such Lender and (ii) the decision of such Lender to execute and
deliver to the Agent an executed counterpart of this Agreement was made by such
Lender independently and without reliance on the Agent or any other Lender as to
the satisfaction of any condition precedent set forth in this Section 10.1.
10.2 Conditions Precedent to Each Loan. The obligation of the Lenders
to make each Loan, including the initial Revolving Loans on the Closing Date,
the Term Loans and the Capital Expenditure Loans, and the obligation of the
Agent to take reasonable steps to cause to be issued or to provide Credit
Support for any Letter of Credit and the obligation of the Lenders to
participate in Letters of Credit or Credit Support for Letters of Credit, shall
be subject to the further conditions precedent that on and as of the date of any
such extension of credit:
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(a) the following statements shall be true, and the acceptance
by the Borrower of any extension of credit shall be deemed to be a statement to
the effect set forth in clauses (i) and (ii), with the same effect as the
delivery to the Agent and the Lenders of a certificate signed by a Responsible
Officer, dated the date of such extension of credit, stating that:
(i) The representations and warranties contained in this
Agreement and the other Loan Documents are correct in all material respects on
and as of the date of such extension of credit as though made on and as of such
date, other than any such representation or warranty which relates to a
specified prior date and except to the extent the Agent and the Lenders have
been notified by the Borrower that any representation or warranty is not correct
and the Majority Lenders have explicitly waived in writing compliance with such
representation or warranty; and
(ii) No event has occurred and is continuing, or would
result from such extension of credit, which constitutes a Default or an Event of
Default; and
(b) without limiting Section 10.2(b), the amount of the
Availability shall be sufficient to make such Revolving Loan without exceeding
the Availability, provided, however, that the foregoing conditions precedent are
not conditions to each Lender participating in or reimbursing BABC or the Agent
for such Lenders' Pro Rata Share of any BABC Loan or Agent Advance as provided
in Sections 2.2(h), (i) and (j).
10.3 Conditions Precedent to Capital Expenditure Loans. The obligation
of the Lenders to make the Capital Expenditure Loans shall be subject to the
initial condition that at time of the initial advance of the Capital Expenditure
Loans:
(a) the Agent shall have received a completed Capital
Expenditure Loan Notice of Borrowing accompanied by (i) a certificate of
completion or stage of completion, contract of sale, purchase order or invoice,
in form and substance reasonably satisfactory to the Agent, which accurately and
completely describes the fixed asset which is the subject of the requested
advance and the purchase price therefor, and in the case of fixed assets,
expressly identifying and excluding the costs of delivery, installation, taxes,
and other "soft" costs, (ii) evidence satisfactory to the Agent indicating that
the fixed asset has been completed, installed and/or delivered to and accepted
by the respective Borrower not more than 60 days prior to the date of the
advance, and (iii) such other information, certificates, confirmations, lien
waivers, record searches and other items as the Agent may require to determine
the value and the delivery of the subject equipment and compliance with the
other terms of this Agreement;
(b) the Agent shall be satisfied that any equipment for which
an advance is requested shall, at the time of advance and at all other times (i)
not be affixed to any real property which is not covered by one of the
Mortgages, (ii) not be subject to any Liens in favor of parties other than the
Agents and Lenders hereunder, and (iii) be free of, and not become, accessions,
additions, fittings and accessories which are subject to a Lien in favor of any
other Person;
(c) the Borrower shall have provided such financial
statements, projections, certificates, and other documents as the Agent may
request to demonstrate to the Agent's
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satisfaction that the Borrower has sufficient capital to meet its on-going
working capital requirements after taking into account the Project and to fund
the completion of the Project and has excess Availability of not less than
$2,500,000 at the time of the first advance under the Capital Expenditure Loans;
and
(d) the Borrower shall have advanced, or shall advance at the
time of each Capital Expenditure Loan, the balance of the purchase price or
remaining costs of that portion of the Project for which the Capital Expenditure
Loan is requested.
ARTICLE 11
DEFAULT; REMEDIES
11.1 Events of Default. It shall constitute an event of default
("Event of Default") if any one or more of the following shall occur for any
reason:
(a) any failure to pay the principal of or interest or premium
on any of the Obligations when due, whether upon demand or otherwise;
(b) any representation or warranty made or deemed made by the
Borrower in this Agreement or by the Borrower or any of its Subsidiaries in any
of the other Loan Documents, any Financial Statement, or any certificate
furnished by the Borrower or any of its Subsidiaries at any time to the Agent or
any Lender shall prove to be untrue in any material respect as of the date on
which made, deemed made, or furnished;
(c) any default shall occur in the observance or performance
of any of the covenants and agreements contained in this Agreement, any other
Loan Documents, or any other agreement entered into at any time to which the
Borrower or any Subsidiary and the Agent or any Lender are party, or if any such
agreement or document shall terminate (other than in accordance with its terms
or the terms hereof or with the written consent of the Agent and the Majority
Lenders) or become void or unenforceable, without the written consent of the
Agent and the Majority Lenders;
(d) default shall occur with respect to any Debt For Borrowed
Money (other than the Obligations) in an outstanding principal amount which
exceeds $100,000 or under any agreement or instrument under or pursuant to which
any such Debt For Borrowed Money may have been issued, created, assumed, or
guaranteed by the Borrower or any of its Subsidiaries, and such default shall
continue for more than the period of grace, if any, therein specified, if the
effect thereof (with or without the giving of notice or further lapse of time or
both) is to accelerate, or to permit the holders of any such Debt For Borrowed
Money to accelerate, the maturity of any such Debt For Borrowed Money; or any
such Debt For Borrowed Money shall be declared due and payable or be required to
be prepaid (other than by a regularly scheduled required prepayment) prior to
the stated maturity thereof;
(e) the Borrower or any of its Subsidiaries shall (i) file a
voluntary petition in bankruptcy or file a voluntary petition or an answer or
otherwise commence any action or proceeding seeking reorganization, arrangement
or readjustment of its debts or for any other
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relief under the federal Bankruptcy Code, as amended, or under any other
bankruptcy or insolvency act or law, state or federal, now or hereafter
existing, or consent to, approve of, or acquiesce in, any such petition, action
or proceeding; (ii) apply for or acquiesce in the appointment of a receiver,
assignee, liquidator, sequestrator, custodian, monitor, trustee or similar
officer for it or for all or any part of its property; (iii) make an assignment
for the benefit of creditors; or (iv) be unable generally to pay its debts as
they become due;
(f) an involuntary petition or proposal shall be filed or an
action or proceeding otherwise commenced seeking reorganization, arrangement,
consolidation or readjustment of the debts of the Borrower or any of its
Subsidiaries or for any other relief under the federal Bankruptcy Code, as
amended, or under any other bankruptcy or insolvency act or law, state or
federal, now or hereafter existing and either (i) such petition, proposal,
action or proceeding shall not have been dismissed within a period of sixty (60)
days after its commencement or (ii) an order for relief against the Borrower or
such Subsidiary shall have been entered in such proceeding;
(g) a receiver, assignee, liquidator, sequestrator, custodian,
monitor, trustee or similar officer for the Borrower or any of its Subsidiaries
or for all or any part of its property shall be appointed or a warrant of
attachment, execution or similar process in excess of $100,000 shall be issued
against any part of the property of the Borrower or any of its Subsidiaries;
(h) except for LaSalle Exploration, Inc., the Borrower or any
of its Subsidiaries shall file a certificate of dissolution under applicable
state law or shall be liquidated, dissolved or wound-up or shall commence or
have commenced against it any action or proceeding for dissolution, winding-up
or liquidation, or shall take any corporate action in furtherance thereof;
(i) all or any material part of the property of the Borrower
or any of its Subsidiaries shall be nationalized, expropriated or condemned,
seized or otherwise appropriated, or custody or control of such property or of
the Borrower or such Subsidiary shall be assumed by any Governmental Authority
or any court of competent jurisdiction at the instance of any Governmental
Authority, except where contested in good faith by proper proceedings diligently
pursued where a stay of enforcement is in effect;
(j) any guaranty of the Obligations shall be terminated,
revoked or declared void or invalid;
(k) one or more final, non-appealable judgments or orders for
the payment of money aggregating in excess of $200,000 which amount shall not be
fully covered by insurance, shall be rendered against the Borrower or any of its
Subsidiaries;
(l) any loss, theft, damage or destruction of any item or
items of Collateral or other property of the Borrower or any Subsidiary occurs
which materially and adversely affects the property, business, operation,
prospects, or condition of the Borrower or any of its Subsidiaries and is not
adequately covered by insurance;
(m) there occurs a Material Adverse Effect;
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(n) there is filed against the Borrower or any of its
Subsidiaries any civil or criminal action, suit or proceeding under any federal
or state racketeering statute (including, without limitation, the Racketeer
Influenced and Corrupt Organization Act of 1970), which action, suit or
proceeding (1) is not dismissed within one hundred twenty (120) days, and (2)
could reasonably be expected to result in the confiscation or forfeiture of any
material portion of the Collateral;
(o) for any reason other than the failure of the Agent to take
any action available to it to maintain perfection of the Agent's Liens, pursuant
to the Loan Documents, any Loan Document ceases to be in full force and effect
or any Lien with respect to any material portion of the Collateral intended to
be secured thereby ceases to be, or is not, valid, perfected and prior to all
other Liens (other than Permitted Liens) or is terminated, revoked or declared
void;
(p) (i) an ERISA Event shall occur with respect to a Pension
Plan or Multi-employer Plan which has resulted or could reasonably be expected
to result in liability of the Borrower under Title IV of ERISA to the Pension
Plan, Multi-employer Plan or the PBGC in an aggregate amount in excess of
$250,000, (ii) the aggregate amount of Unfunded Pension Liability among all
Pension Plans at any time exceeds $500,000; or (iii) the Borrower or any ERISA
Affiliate shall fail to pay when due, after the expiration of any applicable
grace period, any installment payment with respect to its withdrawal liability
under Section 4201 of ERISA under a Multi-employer Plan in an aggregate amount
in excess of $100,000; or
(q) there occurs a Change of Control.
11.2 Remedies. (a) If an Event of Default exists, the Agent may, in
its discretion, and shall, at the direction of the Majority Lenders, do one or
more of the following at any time or times and in any order, without notice to
or demand on the Borrower: (i) reduce the Maximum Revolver Amount, or the
advance rates against Eligible Accounts and/or Eligible Inventory used in
computing the Availability, or reduce one or more of the other elements used in
computing the Availability; (ii) restrict the amount of or refuse to make
Revolving Loans; and (iii) restrict or refuse to arrange for or provide Letters
of Credit or Credit Support. If an Event of Default exists, the Agent shall, at
the direction of the Majority Lenders, do one or more of the following, in
addition to the actions described in the preceding sentence, at any time or
times and in any order, without notice to or demand on the Borrower: (a)
terminate the Commitments and this Agreement; (b) declare any or all Obligations
to be immediately due and payable; provided, however, that upon the occurrence
of any Event of Default described in Sections 11.1(e), 11.1(g), or 11.1(h), the
Commitments shall automatically and immediately expire and all Obligations shall
automatically become immediately due and payable without notice or demand of any
kind; and (c) pursue its other rights and remedies under the Loan Documents and
applicable law.
(b) If an Event of Default has occurred and is continuing: (i)
the Agent shall have for the benefit of the Lenders, in addition to all other
rights of the Agent and the Lenders, the rights and remedies of a secured party
under the UCC; (ii) the Agent may, at any time, take possession of the
Collateral and keep it on the Borrower's premises, at no cost to the Agent or
any Lender, or remove any part of it to such other place or places as the Agent
may desire, or the
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Borrower shall, upon the Agent's demand, at the Borrower's cost, assemble the
Collateral and make it available to the Agent at a place reasonably convenient
to the Agent; and (iii) the Agent may sell and deliver any Collateral at public
or private sales, for cash, upon credit or otherwise, at such prices and upon
such terms as the Agent deems advisable, in its sole discretion, and may, if the
Agent deems it reasonable, postpone or adjourn any sale of the Collateral by an
announcement at the time and place of sale or of such postponed or adjourned
sale without giving a new notice of sale. Without in any way requiring notice to
be given in the following manner, the Borrower agrees that any notice by the
Agent of sale, disposition or other intended action hereunder or in connection
herewith, whether required by the UCC or otherwise, shall constitute reasonable
notice to the Borrower if such notice is sent overnight with a nationally
recognized courier, mailed by registered or certified mail, return receipt
requested, postage prepaid, or is delivered personally against receipt, at least
ten (10) days (or at least fifteen (15) days if mail is the only method for
giving notice) prior to such action to the Borrower's address specified in or
pursuant to Section 15.8. If any Collateral is sold on terms other than payment
in full at the time of sale, no credit shall be given against the Obligations
until the Agent or the Lenders receive payment, and if the buyer defaults in
payment, the Agent may resell the Collateral upon commercially reasonable notice
to the Borrower. In the event the Agent seeks to take possession of all or any
portion of the Collateral by judicial process, the Borrower irrevocably waives,
to the extent permitted by applicable laws: (a) the posting of any bond, surety
or security with respect thereto which might otherwise be required; (b) any
demand for possession prior to the commencement of any suit or action to recover
the Collateral; and (c) any requirement that the Agent retain possession and not
dispose of any Collateral until after trial or final judgment. The Borrower
agrees that the Agent has no obligation to preserve rights to the Collateral or
marshal any Collateral for the benefit of any Person. The Agent is hereby
granted a license or other right to use, without charge, the Borrower's labels,
patents, copyrights, name, trade secrets, trade names, trademarks, and
advertising matter, or any similar property, in completing production of,
advertising or selling any Collateral, and the Borrower's rights under all
licenses and all franchise agreements shall inure to the Agent's benefit for
such purpose. The proceeds of sale shall be applied first to all expenses of
sale, including attorneys' fees, and then to the Obligations in whatever order
the Agent elects. The Agent will return any excess to the Borrower and the
Borrower shall remain liable for any deficiency.
(c) If an Event of Default occurs, the Borrower hereby waives
all rights to notice and hearing prior to the exercise by the Agent of the
Agent's rights to repossess the Collateral without judicial process or to
replevy, attach or levy upon the Collateral without notice or hearing.
ARTICLE 12
TERM AND TERMINATION
12.1 Term and Termination. The term of this Agreement shall end on the
Stated Termination Date. The Agent upon direction from the Majority Lenders may
terminate this Agreement without notice upon the occurrence of an Event of
Default. Upon the effective date of termination of this Agreement for any reason
whatsoever, all Obligations (including, without limitation, all unpaid
principal, accrued interest and any early termination or prepayment fees or
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penalties) shall become immediately due and payable and the Borrower shall
immediately arrange for the cancellation of Letters of Credit then outstanding.
Notwithstanding the termination of this Agreement, until all Obligations are
indefeasibly paid and performed in full in cash, the Borrower shall remain bound
by the terms of this Agreement and shall not be relieved of any of its
Obligations hereunder, and the Agent and the Lenders shall retain all their
rights and remedies hereunder (including, without limitation, the Agent's Liens
in and all rights and remedies with respect to all then existing and
after-arising Collateral).
ARTICLE 13
AMENDMENTS; WAIVER; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS
13.1 No Waivers; Cumulative Remedies. No failure by the Agent or any
Lender to exercise any right, remedy, or option under this Agreement or any
present or future supplement thereto, or in any other agreement between or among
the Borrower and the Agent and/or any Lender, or delay by the Agent or any
Lender in exercising the same, will not operate as a waiver thereof. No waiver
by the Agent or any Lender will be effective unless it is in writing, and then
only to the extent specifically stated. No waiver by the Agent or the Lenders on
any occasion shall affect or diminish the Agent's and each Lender's rights
thereafter to require strict performance by the Borrower of any provision of
this Agreement. The Agent's and each Lender's rights under this Agreement will
be cumulative and not exclusive of any other right or remedy which the Agent or
any Lender may have.
13.2 Amendments and Waivers. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by the Borrower therefrom, shall be effective unless the same shall be
in writing and signed by the Majority Lenders (or by the Agent at the written
request of the Majority Lenders) and the Borrower and then any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such waiver, amendment, or
consent shall, unless in writing and signed by all the Lenders and the Borrower
and acknowledged by the Agent, do any of the following:
(a) increase or extend the Commitment of any Lender;
(b) postpone or delay any date fixed by this Agreement or any
other Loan Document for any payment of principal, interest, fees or other
amounts due to the Lenders (or any of them) hereunder or under any other Loan
Document;
(c) reduce the principal of, or the rate of interest specified
herein on any Loan, or any fees or other amounts payable hereunder or under any
other Loan Document;
(d) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans which is required for the Lenders
or any of them to take any action hereunder;
(e) increase any of the percentages set forth in the
definition of Availability;
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(f) amend this Section 13.2 or any provision of the Agreement
providing for consent or other action by all Lenders;
(g) release Collateral other than as permitted by Section
14.11;
(h) change the definitions of "Majority Lenders" or "Required
Lenders";
(i) increase the Maximum Revolver Amount, the Maximum
Inventory Loan, the aggregate Capital Expenditure Loans beyond $8,000,000, and
Unused Letter of Credit Subfacility.
and, provided further, that no amendment, waiver or consent shall, unless in
writing and signed by the Agent, affect the rights or duties of the Agent under
this Agreement or any other Loan Document.
13.3 Assignments; Participations.
(a) Any Lender may, with the written consent of the Agent,
assign and delegate to one or more assignees (provided that no written consent
of the Agent shall be required in connection with any assignment and delegation
by a Lender to an Affiliate of such Lender) (each an "Assignee") all, or any
ratable part of all, of the Loans, the Commitments and the other rights and
obligations of such Lender hereunder, in a minimum amount of $10,000,000 or if
less the entire amount of such Lender's Commitment; provided, however, that the
Borrower and the Agent may continue to deal solely and directly with such Lender
in connection with the interest so assigned to an Assignee until (i) written
notice of such assignment, together with payment instructions, addresses and
related information with respect to the Assignee, shall have been given to the
Borrower and the Agent by such Lender and the Assignee; (ii) such Lender and its
Assignee shall have delivered to the Borrower and the Agent an Assignment and
Acceptance in the form of EXHIBIT H ("Assignment and Acceptance") together with
any Note or Notes subject to such assignment and (iii) the assignor Lender or
Assignee has paid to the Agent a processing fee in the amount of $3,000. Unless
there shall have occurred an Event of Default, the Borrower shall not be
responsible for payment of the Agent's or any Lender's Attorney Costs in
connection with any such assignment.
(b) From and after the date that the Agent notifies the
assignor Lender that it has received an executed Assignment and Acceptance and
payment of the above-referenced processing fee, (i) the Assignee thereunder
shall be a party hereto and, to the extent that rights and obligations,
including, but not limited to, the obligation to participate in Letters of
Credit and Credit Support have been assigned to it pursuant to such Assignment
and Acceptance, shall have the rights and obligations of a Lender under the Loan
Documents, and (ii) the assignor Lender shall, to the extent that rights and
obligations hereunder and under the other Loan Documents have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto).
(c) By executing and delivering an Assignment and Acceptance,
the assigning Lender thereunder and the Assignee thereunder confirm to and agree
with each other and the
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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 the Borrower or the
performance or observance by the Borrower of any of its obligations under this
Agreement or any other Loan Document furnished pursuant hereto; (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 the Agent, such
assigning Lender or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (5) such
Assignee appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement as are delegated to the
Agent by the terms hereof, together with such powers as are reasonably
incidental thereto; and (6) such Assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.
(d) Within five Business Days after its receipt of notice by
the Agent that it has received an executed Assignment and Acceptance and payment
of the processing fee, the Borrower shall execute and deliver to the Agent, new
Notes evidencing such Assignee's assigned Loans and, if the assignor Lender has
retained a portion of its Loans and its Commitment, replacement Notes in the
principal amount of the Loans retained by the assignor Lender (such Notes to be
in exchange for, but not in payment of, the Notes held by such Lender).
Immediately upon each Assignee's making its processing fee payment under the
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 sell to one or more commercial
banks, financial institutions, or other Persons not Affiliates of the Borrower
(a "Participant") participating interests in any Loans, the Commitment of that
Lender and the other interests of that Lender (the "originating Lender")
hereunder and under the other Loan Documents; provided, however, that (i) the
originating Lender's obligations under this Agreement shall remain unchanged,
(ii) the originating Lender shall remain solely responsible for the performance
of such obligations, (iii) the Borrower and the Agent shall continue to deal
solely and directly with the originating Lender in connection with the
originating Lender's rights and obligations under this Agreement and the other
Loan Documents, and (iv) no Lender shall transfer or grant any participating
interest under which the Participant has rights to approve any amendment to, or
any consent or waiver with respect to, this Agreement or any other Loan
Document, and all amounts payable by the Borrower hereunder shall be determined
as if such Lender had not sold such participation; except that, if amounts
outstanding under this Agreement are due and unpaid, or shall have been declared
or shall have become due and payable upon the occurrence of an Event of Default,
each Participant shall be deemed to have the right of set-off in
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respect of its participating interest in amounts owing under this Agreement to
the same extent and subject to the same limitation as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement. Unless there shall have occurred an Event of Default, the Borrower
shall not be responsible for payment of the Agent's or any Lender's Attorney
Costs in connection with any such participation.
(f) Notwithstanding any other provision in this Agreement, any
Lender may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement in favor of any
Federal Reserve Bank in accordance with Regulation A of the FRB or U.S. Treasury
Regulation 31 CFR ss.203.14, and such Federal Reserve Bank may enforce such
pledge or security interest in any manner permitted under applicable law.
ARTICLE 14
THE AGENT
14.1 Appointment and Authorization. Each Lender hereby designates and
appoints BankAmerica Business Credit, Inc. as its Agent under this Agreement and
the other Loan Documents and each Lender hereby irrevocably authorizes the Agent
to take such action on its behalf under the provisions of this Agreement and
each other Loan Document and to exercise such powers and perform such duties as
are expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto. The
Agent agrees to act as such on the express conditions contained in this Article
14. The provisions of this Article 14 are solely for the benefit of the Agent
and the Lenders and the Borrower shall have no rights as a third party
beneficiary of any of the provisions contained herein. Notwithstanding any
provision to the contrary contained elsewhere in this Agreement or in any other
Loan Document, the Agent shall not have any duties or responsibilities, except
those expressly set forth herein, nor shall the Agent have or be deemed to have
any fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Agent.
Without limiting the generality of the foregoing sentence, the use of the term
"agent" in this Agreement with reference to the Agent is not intended to connote
any fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law. Instead, such term is used merely as a matter of
market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties. Except as expressly
otherwise provided in this Agreement, the Agent shall have and may use its sole
discretion with respect to exercising or refraining from exercising any
discretionary rights or taking or refraining from taking any actions which the
Agent is expressly entitled to take or assert under this Agreement and the other
Loan Documents, including, without limitation, (a) the determination of the
applicability of ineligibility criteria with respect to the calculation of the
Availability, (b) the making of Agent Advances pursuant to Section 2.2(i), and
(c) the exercise of remedies pursuant to Section 11.2, and any action so taken
or not taken shall be deemed consented to by the Lenders.
14.2 Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact
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and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. The Agent shall not be responsible for the negligence or misconduct
of any agent or attorney-in-fact that it selects as long as such selection was
made without gross negligence or willful misconduct.
14.3 Liability of Agent. None of the Agent-Related Persons shall (i)
be liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of the Lenders for any recital,
statement, representation or warranty made by the Borrower or any Subsidiary or
Affiliate of the Borrower, or any officer thereof, contained in this Agreement
or in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of the Borrower or any other party
to any Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Lender to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of the Borrower or any of the
Borrower's Subsidiaries or Affiliates.
14.4 Reliance by Agent. (a) The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to the Borrower), independent accountants and other experts selected by the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Majority Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action. The
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the Majority Lenders and such request and any action taken
or failure to act pursuant thereto shall be binding upon all of the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 10.1, each Lender that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by the Agent to such Lender for consent,
approval, acceptance or satisfaction, or required thereunder to be consented to
or approved by or acceptable or satisfactory to the Lender.
(c) In the event the Agent requests the consent of a Lender
and such consent is denied or in the event a Lender has not given notice of its
intention to extend the making of Revolving Loans as of the next scheduled
Stated Termination Date at the time provided for such notice in the definition
of "Stated Termination Date," then BABC may, in the exercise of its sole and
absolute discretion, require such Lender to assign its interest in the Loans and
the other Obligations to BABC for a price equal to the then outstanding
principal amount thereof plus
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accrued and unpaid interest, fees and costs and expenses and any other
Obligations then owing such Lender under the Loan Documents, which principal,
interest, fees and costs and expenses will be paid on the date of such
assignment. In the event that BABC elects to require any Lender to assign its
interest to BABC, BABC will so notify such Lender in writing within thirty (30)
days following such Lender's denial or failure to extend, as applicable, and
such Lender will assign its interest to BABC no later than five (5) days
following receipt of the notice of BABC's election.
14.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest and fees required
to be paid to the Agent for the account of the Lenders, unless the Agent shall
have received written notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default." The Agent will notify the Lenders of its
receipt of any such notice. The Agent shall take such action with respect to
such Default or Event of Default as may be requested by the Majority Lenders in
accordance with Section 11.2; provided, however, that unless and until the Agent
has received any such request, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable.
14.6 Credit Decision. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Borrower and its Affiliates, shall be deemed to constitute any representation or
warranty by any Agent-Related Person to any Lender. Each Lender represents to
the Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Borrower and its Affiliates, and all applicable bank regulatory laws relating to
the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Borrower. Each Lender also represents
that it will, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly herein required to be furnished to the Lenders by the Agent,
the Agent shall not have any duty or responsibility to provide any Lender with
any credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of the Borrower
which may come into the possession of any of the Agent-Related Persons.
14.7 Indemnification. Whether or not the transactions contemplated
hereby are consummated, the Lenders shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Borrower and without limiting the obligation of the Borrower to do so), pro
rata, from and against any and all Indemnified Liabilities as such term is
defined in Section 15.11; provided, however, that no Lender shall be liable for
the payment to the Agent-Related Persons of any portion of such Indemnified
Liabilities resulting solely from
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such Person's gross negligence or willful misconduct. Without limitation of the
foregoing, each Lender shall reimburse the Agent upon demand for its ratable
share of any costs or out-of-pocket expenses (including Attorney Costs) incurred
by the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein, to the extent that the Agent
is not reimbursed for such expenses by or on behalf of the Borrower. The
undertaking in this Section 14.7 shall survive the payment of all Obligations
hereunder and the resignation or replacement of the Agent.
14.8 Agent in Individual Capacity. BABC and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Borrower and its
Subsidiaries and Affiliates as though BABC were not the Agent hereunder and
without notice to or consent of the Lenders. The Lenders acknowledge that,
pursuant to such activities, BABC or its Affiliates may receive information
regarding the Borrower or its Affiliates (including information that may be
subject to confidentiality obligations in favor of the Borrower or such
Subsidiary) and acknowledge that the Agent shall be under no obligation to
provide such information to them. With respect to its Loans, BABC shall have the
same rights and powers under this Agreement as any other Lender and may exercise
the same as though it were not the Agent, and the terms "Lender" and "Lenders"
include BABC in its individual capacity.
14.9 Successor Agent. The Lenders and the Borrower agree to execute
and deliver such confirmations thereof as the Agent may reasonably request. The
Agent may resign as Agent upon 30 days' notice to the Lenders and the Borrower.
In the event BABC sells all of its Commitments and Revolving Loans as part of a
sale, transfer or other disposition by BABC of substantially all of its loan
portfolio, BABC shall resign as Agent and such purchaser or transferee shall
become the successor Agent hereunder. If the Agent resigns under this Agreement,
subject to the proviso in the preceding sentence, the Majority Lenders shall
appoint from among the Lenders a successor agent for the Lenders. If no
successor agent is appointed prior to the effective date of the resignation of
the Agent, the Agent may appoint, after consulting with the Lenders and the
Borrower, a successor agent from among the Lenders. Upon the acceptance of its
appointment as successor agent hereunder, such successor agent shall succeed to
all the rights, powers and duties of the retiring Agent and the term "Agent"
shall mean such successor agent and the retiring Agent's appointment, powers and
duties as Agent shall be terminated. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Section 14.9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement. If no successor agent has accepted appointment as Agent by
the date which is 30 days following a retiring Agent's notice of resignation,
the retiring Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall perform all of the duties of the Agent hereunder until
such time, if any, as the Majority Lenders appoint a successor agent as provided
for above. Notwithstanding the foregoing, in the event that BABC assigns all of
its Loans to an Affiliate, such Affiliate shall automatically become the
successor Agent hereunder upon the effective date of such assignment.
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14.10 Withholding Tax. (a) If any Lender is a "foreign corporation,
partnership or trust" within the meaning of the Code and such Lender claims
exemption from, or a reduction of, U.S. withholding tax under Sections 1441 or
1442 of the Code, such Lender agrees with and in favor of the Agent, to deliver
to the Agent:
(i) if such Lender claims an exemption from, or a
reduction of, withholding tax under a United States tax treaty, properly
completed IRS Forms 1001 and W-8 before the payment of any interest in the first
calendar year and before the payment of any interest in each third succeeding
calendar year during which interest may be paid under this Agreement;
(ii) 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 4224 before the payment of any
interest is due in the first taxable year of such Lender and in each succeeding
taxable year of such Lender during which interest may be paid under this
Agreement, and IRS Form W-9; and
(iii) such other form or forms as may be required under
the Code or other laws of the United States as a condition to exemption from, or
reduction of, United States withholding tax.
Such Lender agrees to promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.
(b) If any Lender claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form 1001 and
such Lender sells, assigns, grants a participation in, or otherwise transfers
all or part of the Obligations of the Borrower to such Lender, such Lender
agrees to notify the Agent of the percentage amount in which it is no longer the
beneficial owner of Obligations of the Borrower to such Lender. To the extent of
such percentage amount, the Agent will treat such Lender's IRS Form 1001 as no
longer valid.
(c) If any Lender claiming exemption from United States
withholding tax by filing IRS Form 4224 with the Agent sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations of the
Borrower to such Lender, such Lender agrees to undertake sole responsibility for
complying with the withholding tax requirements imposed by Sections 1441 and
1442 of the Code.
(d) If any Lender is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such Lender
an amount equivalent to the applicable withholding tax after taking into account
such reduction. If the forms or other documentation required by subsection (a)
of this Section 14.10 are not delivered to the Agent, then the Agent may
withhold from any interest payment to such Lender not providing such forms or
other documentation an amount equivalent to the applicable withholding tax.
(e) If the IRS or any other Governmental Authority of the
United States or other jurisdiction asserts a claim that the Agent did not
properly withhold tax from amounts paid to or for the account of any Lender
(because the appropriate form was not delivered, was not
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properly executed, or because such Lender failed to notify the Agent of a change
in circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason) such Lender shall indemnify the Agent
fully for all amounts paid, directly or indirectly, by the Agent as tax or
otherwise, including penalties and interest, and including any taxes imposed by
any jurisdiction on the amounts payable to the Agent under this Section 14.10,
together with all costs and expenses (including Attorney Costs). The obligation
of the Lenders under this subsection shall survive the payment of all
Obligations and the resignation or replacement of the Agent.
14.11 Collateral Matters.
(a) The Lenders hereby irrevocably authorize the Agent, at its
option and in its sole discretion, to release any Agent's Lien upon any
Collateral (i) upon the termination of the Commitments and payment and
satisfaction in full by Borrower of all Loans and reimbursement obligations in
respect of Letters of Credit and Credit Support, and the termination of all
outstanding Letters of Credit (whether or not any of such obligations are due)
and all other Obligations; (ii) constituting property being sold or disposed of
if the Borrower certifies to the Agent that the sale or disposition is made in
compliance with Section 9.9 (and the Agent may rely conclusively on any such
certificate, without further inquiry); (iii) constituting property in which the
Borrower owned no interest at the time the Lien was granted or at any time
thereafter; or (iv) constituting property leased to the Borrower under a lease
which has expired or been terminated in a transaction permitted under this
Agreement. Except as provided above or elsewhere in this Agreement, the Agent
will not release any of the Agent's Liens without the prior written
authorization of the Lenders; provided that the Agent may, in its discretion,
release the Agent's Liens on Collateral valued in the aggregate not in excess of
$100,000, during any one year period without the prior written authorization of
the Lenders. Upon request by the Agent or the Borrower at any time, the Lenders
will confirm in writing the Agent's authority to release any Agent's Liens upon
particular types or items of Collateral pursuant to this Section 14.11.
(b) Upon receipt by the Agent of any authorization required
pursuant to Section 14.11(a) from the Lenders of the Agent's authority to
release any Agent's Liens upon particular types or items of Collateral, and upon
at least five (5) Business Days' prior written request by the Borrower, the
Agent shall (and is hereby irrevocably authorized by the Lenders to) execute
such documents as may be necessary to evidence the release of the Agent's Liens
upon such Collateral; provided, however, that (i) the Agent shall not be
required to execute any such document on terms which, in the Agent's opinion,
would expose the Agent to liability or create any obligation or entail any
consequence other than the release of such Liens without recourse or warranty,
and (ii) such release shall not in any manner discharge, affect or impair the
Obligations or any Liens (other than those expressly being released) upon (or
obligations of the Borrower in respect of) all interests retained by the
Borrower, including (without limitation) the proceeds of any sale, all of which
shall continue to constitute part of the Collateral.
(c) The Agent shall have no obligation whatsoever to any of
the Lenders to assure that the Collateral exists or is owned by the Borrower or
is cared for, protected or insured 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
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all or in any particular manner or under any duty of care, disclosure or
fidelity, or to continue exercising, any of the rights, authorities and powers
granted or available to the Agent pursuant to any of the Loan Documents, it
being understood and agreed that in respect of the Collateral, or any act,
omission or event related thereto, the Agent may act in any manner it may deem
appropriate, in its sole discretion given the Agent's own interest in the
Collateral in its capacity as one of the Lenders and that the Agent shall have
no other duty or liability whatsoever to any Lender as to any of the foregoing.
14.12 Restrictions on Actions by Lenders; Sharing of Payments. (a)
Each of the Lenders agrees that it shall not, without the express consent of all
Lenders, and that it shall, to the extent it is lawfully entitled to do so, upon
the request of all Lenders following any Event of Default, set off against the
Obligations, any amounts owing by such Lender to the Borrower or any accounts of
the Borrower now or hereafter maintained with such Lender. Each of the Lenders
further agrees that it shall not, unless specifically requested to do so by the
Agent, take or cause to be taken any action to enforce its rights under this
Agreement or against the Borrower, including, without limitation, the
commencement of any legal or equitable proceedings, to foreclose any Lien on, or
otherwise enforce any security interest in, any of the Collateral.
(b) If at any time or times any Lender shall receive (i) by
payment, foreclosure, setoff or otherwise, any proceeds of Collateral or any
payments with respect to the Obligations of the Borrower to such Lender arising
under, or relating to, this Agreement or the other Loan Documents, except for
any such proceeds or payments received by such Lender from the Agent pursuant to
the terms of this Agreement, or (ii) payments from the Agent in excess of such
Lender's ratable portion of all such distributions by the Agent, such Lender
shall promptly (1) turn the same over to the Agent, in kind, and with such
endorsements as may be required to negotiate the same to the Agent, or in same
day funds, as applicable, for the account of all of the Lenders and for
application to the Obligations in accordance with the applicable provisions of
this Agreement, or (2) purchase, without recourse or warranty, an undivided
interest and participation in the Obligations owed to the other Lenders so that
such excess payment received shall be applied ratably as among the Lenders in
accordance with their Pro Rata Shares; provided, however, that if all or part of
such excess payment received by the purchasing party is thereafter recovered
from it, those purchases of participations shall be rescinded in whole or in
part, as applicable, and the applicable portion of the purchase price paid
therefor shall be returned to such purchasing party, but without interest except
to the extent that such purchasing party is required to pay interest in
connection with the recovery of the excess payment.
14.13 Agency for Perfection. Each Lender hereby appoints each other
Lender as agent for the purpose of perfecting the Lenders' security interest in
assets which, in accordance with Article 9 of the UCC can be perfected only by
possession. Should any Lender (other than the Agent) obtain possession of any
such Collateral, such Lender shall notify the Agent thereof, and, promptly upon
the Agent's request therefor shall deliver such Collateral to the Agent or in
accordance with the Agent's instructions.
14.14 Payments by Agent to Lenders. All payments to be made by the
Agent to the Lenders shall be made by bank wire transfer or internal transfer of
immediately available funds pursuant to such wire transfer instructions as each
party may designate for itself by written notice
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to the Agent. Concurrently with each such payment, the Agent shall identify
whether such payment (or any portion thereof) represents principal, premium or
interest on the Revolving Loans, Term Loans, the Capital Expenditure Loans or
otherwise.
14.15 Concerning the Collateral and the Related Loan Documents. Each
Lender authorizes and directs the Agent to enter into this Agreement and the
other Loan Documents relating to the Collateral, for the ratable benefit of the
Agent and the Lenders. Each Lender agrees that any action taken by the Agent,
Majority Lenders or Required Lenders, as applicable, in accordance with the
terms of this Agreement or the other Loan Documents relating to the Collateral,
and the exercise by the Agent, the Majority Lenders, or the Required Lenders, as
applicable, of their respective powers set forth therein or herein, together
with such other powers that are reasonably incidental thereto, shall be binding
upon all of the Lenders.
14.16 Field Audit and Examination Reports; Disclaimer by Lenders.
By signing this Agreement, each Lender:
(a) is deemed to have requested that the Agent furnish such
Lender, promptly after it becomes available, a copy of each field audit or
examination report (each a "Report" and collectively, "Reports") prepared by the
Agent;
(b) expressly agrees and acknowledges that neither BABC nor
the Agent (i) makes any representation or warranty as to the accuracy of any
Report, or (ii) shall be liable for any information contained in any Report;
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that the Agent or other party performing
any audit or examination will inspect only specific information regarding the
Borrower and will rely significantly upon the Borrower's books and records, as
well as on representations of the Borrower's personnel;
(d) agrees to keep all Reports confidential and strictly for
its internal use, and not to distribute except to its participants who shall
also agree to keep all such Reports confidential, or use any Report in any other
manner; and
(e) without limiting the generality of any other
indemnification provision contained in this Agreement, agrees: (i) to hold the
Agent and any such other Lender preparing a Report harmless from any action the
indemnifying Lender may take or conclusion the indemnifying Lender may reach or
draw from any Report in connection with any loans or other credit accommodations
that the indemnifying Lender has made or may make to the Borrower, or the
indemnifying Lender's participation in, or the indemnifying Lender's purchase
of, a loan or loans of the Borrower; and (ii) to pay and protect, and indemnify,
defend and hold the Agent and any such other Lender preparing a Report harmless
from and against, the claims, actions, proceedings, damages, costs, expenses and
other amounts (including, without limitation Attorney Costs) incurred by the
Agent and any such other Lender preparing a Report as the direct or indirect
result of any third parties who might obtain all or part of any Report through
the indemnifying Lender.
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14.17 Relation Among Lenders. The Lenders are not partners or
co-venturers, and no Lender shall be liable for the acts or omissions of, or
(except as otherwise set forth herein in case of the Agent) authorized to act
for, any other Lender.
ARTICLE 15
MISCELLANEOUS
15.1 Cumulative Remedies; No Prior Recourse to Collateral. The
enumeration herein of the Agent's and each Lender's rights and remedies is not
intended to be exclusive, and such rights and remedies are in addition to and
not by way of limitation of any other rights or remedies that the Agent and the
Lenders may have under the UCC or other applicable law. The Agent and the
Lenders shall have the right, in their sole discretion, to determine which
rights and remedies are to be exercised and in which order. The exercise of one
right or remedy shall not preclude the exercise of any others, all of which
shall be cumulative. The Agent and the Lenders may, without limitation, proceed
directly against the Borrower to collect the Obligations without any prior
recourse to the Collateral. No failure to exercise and no delay in exercising,
on the part of the Agent or any Lender, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege.
15.2 Severability. The illegality or unenforceability of any provision
of this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
15.3 Governing Law; Choice of Forum; Service of Process; Jury Trial
Waiver. (A) THIS AGREEMENT SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES
OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS (AS
OPPOSED TO THE CONFLICT OF LAWS PROVISIONS PROVIDED THAT PERFECTION ISSUES WITH
RESPECT TO ARTICLE 9 OF THE UCC MAY GIVE EFFECT TO APPLICABLE CHOICE OR CONFLICT
OF LAW RULES SET FORTH IN ARTICLE 9 OF THE UCC) OF THE STATE OF ILLINOIS;
PROVIDED THAT THE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER
FEDERAL LAW.
(B) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF ILLINOIS OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS, AND
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE BORROWER, THE AGENT AND
THE LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE BORROWER, THE AGENT AND
THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE
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BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
AGREEMENT OR ANY DOCUMENT RELATED HERETO. NOTWITHSTANDING THE FOREGOING: (1) THE
AGENT AND THE LENDERS SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING
AGAINST THE BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION THE
AGENT OR THE LENDERS DEEM NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE
COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS AND (2) EACH OF THE PARTIES
HERETO ACKNOWLEDGES THAT ANY APPEALS FROM THE COURTS DESCRIBED IN THE
IMMEDIATELY PRECEDING SENTENCE MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE
THOSE JURISDICTIONS.
(C) THE BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY
REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO THE BORROWER AT ITS
ADDRESS SET FORTH IN SECTION 15.8 AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED IN THE U.S.
MAILS OR ON THE BUSINESS DAY FOLLOWING DEPOSIT WITH A NATIONALLY RECOGNIZED
OVERNIGHT COURIER. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF AGENT OR
THE LENDERS TO SERVE LEGAL PROCESS BY ANY OTHER MANNER PERMITTED BY LAW.
15.4 WAIVER OF JURY TRIAL. THE BORROWER, THE LENDERS AND THE AGENT
EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST
ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER
WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE BORROWER, THE
LENDERS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE
TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED
BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
15.5 Survival of Representations and Warranties. All of the Borrower's
representations and warranties contained in this Agreement shall survive the
execution, delivery, and acceptance thereof by the parties, notwithstanding any
investigation by the Agent or the Lenders or their respective agents.
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15.6 Other Security and Guaranties. The Agent, may, without notice or
demand and without affecting the Borrower's obligations hereunder, from time to
time: (a) take from any Person and hold collateral (other than the Collateral)
for the payment of all or any part of the Obligations and exchange, enforce or
release such collateral or any part thereof; and (b) accept and hold any
endorsement or guaranty of payment of all or any part of the Obligations and
release or substitute any such endorser or guarantor, or any Person who has
given any Lien in any other collateral as security for the payment of all or any
part of the Obligations, or any other Person in any way obligated to pay all or
any part of the Obligations.
15.7 Fees and Expenses. The Borrower agrees to pay to the Agent, for
its benefit, on demand, all costs and expenses that Agent pays or incurs in
connection with the negotiation, preparation, consummation, administration,
enforcement, and termination of this Agreement or any of the other Loan
Documents, including, without limitation: (a) Attorney Costs; (b) costs and
expenses (including attorneys' and paralegals' fees and disbursements which
shall include the allocated costs of Agent's in-house counsel fees and
disbursements) for any amendment, supplement, waiver, consent, or subsequent
closing in connection with the Loan Documents and the transactions contemplated
thereby; (c) costs and expenses of lien and title searches and title insurance;
(d) taxes, fees and other charges for recording the Mortgage, filing financing
statements and continuations, and other actions to perfect, protect, and
continue the Agent's Liens (including costs and expenses paid or incurred by the
Agent in connection with the consummation of Agreement); (e) sums paid or
incurred to pay any amount or take any action required of the Borrower under the
Loan Documents that the Borrower fails to pay or take; (f) costs of appraisals,
inspections, and verifications of the Collateral, including, without limitation,
travel, lodging, and meals for inspections of the Collateral and the Borrower's
operations by the Agent plus, following an Event of Default, the Agent's then
customary charge for field examinations and audits and the preparation of
reports thereof (such charge is currently $600 per day (or portion thereof) for
each agent or employee of the Agent with respect to each field examination or
audit); (g) costs and expenses of forwarding loan proceeds, collecting checks
and other items of payment, and establishing and maintaining Payment Accounts
and lock boxes; (h) costs and expenses of preserving and protecting the
Collateral; and (i) costs and expenses (including attorneys' and paralegals'
fees and disbursements which shall include the allocated cost of Agent's
in-house counsel fees and disbursements) paid or incurred to obtain payment of
the Obligations, enforce the Agent's Liens, sell or otherwise realize upon the
Collateral, and otherwise enforce the provisions of the Loan Documents, or to
defend any claims made or threatened against the Agent or any Lender arising out
of the transactions contemplated hereby (including without limitation,
preparations for and consultations concerning any such matters). The foregoing
shall not be construed to limit any other provisions of the Loan Documents
regarding costs and expenses to be paid by the Borrower. All of the foregoing
costs and expenses shall be charged to the Borrower's Loan Account as Revolving
Loans as described in Section 4.10(a), with copies with respect thereto to be
provided to the Borrower.
15.8 Notices. Except as otherwise provided herein, all notices, demands
and requests that any party is required or elects to give to any other shall be
in writing, or by a telecommunications device capable of creating a written
record, and any such notice shall become effective (a) upon personal delivery
thereof, including, but not limited to, delivery by overnight mail and courier
service, (b) five (5) days after it shall have been mailed by United States
mail, first class, certified or registered, with postage prepaid, or (c) in the
case of notice by
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such a telecommunications device, when properly transmitted, in each case
addressed to the party to be notified as follows:
If to the Agent or to BABC:
BankAmerica Business Credit, Inc.
000 X. XxXxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx
Telecopy No. 000-000-0000
with copies to:
Bank of America NT & SA
00000 Xxx Xxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Legal Department
Telecopy No. (000) 000-0000
and to
Xxxxxxxxx X. Xxxxx, Xx., Esquire
Miles & Stockbridge P.C.
00 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telecopy No. (000) 000-0000
If to the Borrower:
c/o McInnes Steel Company
000 Xxxx Xxxx Xxxxxx
Xxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Chief Financial Officer
Telecopy No. (000) 000-0000
with copies to:
Xxxx X. Xxxxxxx XX, Esquire
Xxxxxxxx, Loop & Xxxxxxxx, LLP
Xxxxx Xxxxxxxxxx Xxxxxx
0000 Xxxxxxx
Xxxxxx, Xxxx 00000-0000
Telecopy No. (000) 000-0000
or to such other address as each party may designate for itself by like notice.
Failure or delay in delivering copies of any notice, demand, request, consent,
approval, declaration or other communication to the persons designated above to
receive copies shall not adversely affect the
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effectiveness of such notice, demand, request, consent, approval, declaration or
other communication.
15.9 Waiver of Notices. Unless otherwise expressly provided herein, the
Borrower waives presentment, protest and notice of demand or dishonor and
protest as to any instrument, notice of intent to accelerate the Obligations and
notice of acceleration of the Obligations, as well as any and all other notices
to which it might otherwise be entitled. No notice to or demand on the Borrower
which the Agent or any Lender may elect to give shall entitle the Borrower to
any or further notice or demand in the same, similar or other circumstances.
15.10 Binding Effect. The provisions of this Agreement shall be
binding upon and inure to the benefit of the respective representatives,
successors, and assigns of the parties hereto; provided, however, that no
interest herein may be assigned by the Borrower without prior written consent of
the Agent and each Lender. The rights and benefits of the Agent and the Lenders
hereunder shall, if such Persons so agree, inure to any party acquiring any
interest in the Obligations or any part thereof.
15.11 Indemnity of the Agent and the Lenders by the Borrower.
(a) The Borrower agrees to defend, indemnify and hold the
Agent-Related Persons, and each Lender and each of its respective officers,
directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including Attorney Costs) of any kind or
nature whatsoever which may at any time (including at any time following
repayment of the Loans and the termination, resignation or replacement of the
Agent or replacement of any Lender) be imposed on, incurred by or asserted
against any such Person in any way relating to or arising out of this Agreement
or any document contemplated by or referred to herein, or the transactions
contemplated hereby, or any action taken or omitted by any such Person under or
in connection with any of the foregoing, including with respect to any
investigation, litigation or proceeding (including any Insolvency Proceeding or
appellate proceeding) related to or arising out of this Agreement, any other
Loan Document, or the Loans or the use of the proceeds thereof, whether or not
any Indemnified Person is a party thereto (all the foregoing, collectively, the
"Indemnified Liabilities"); provided, that the Borrower shall have no obligation
hereunder to any Indemnified Person with respect to Indemnified Liabilities
resulting solely from the gross negligence or willful misconduct of such
Indemnified Person. The agreements in this Section 15.11 shall survive payment
of all other Obligations.
(b) The Borrower agrees to indemnify, defend and hold harmless
the Agent and the Lenders from any loss or liability directly or indirectly
arising out of the use, generation, manufacture, production, storage, release,
threatened release, discharge, disposal or presence of a hazardous substance
relating to the Borrower's operations, business or property. This indemnity will
apply whether the hazardous substance is on, under or about the Borrower's
property or operations or property leased to the Borrower. The indemnity
includes but is not limited to attorneys' fees (including the reasonable
estimate of the allocated cost of in-house counsel and staff). The indemnity
extends to the Agent and the Lenders, their parents, affiliates, subsidiaries
and all of their directors, officers, employees, agents, successors, attorneys
and assigns but shall
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115
not extend to acts of gross negligence or willful misconduct. "Hazardous
substances" means any substance, material or waste that is or becomes designated
or regulated as "toxic," "hazardous," "pollutant," or "contaminant" or a similar
designation or regulation under any federal, state or local law (whether under
common law, statute, regulation or otherwise) or judicial or administrative
interpretation of such, including without limitation petroleum or natural gas.
This indemnity will survive repayment of all other Obligations.
15.12 Limitation of Liability. No claim may be made by the Borrower,
any Lender or other Person against the Agent, any Lender, or the affiliates,
directors, officers, officers, employees, or agents of any of them for any
special, indirect, consequential or punitive damages in respect of any claim for
breach of contract or any other theory of liability arising out of or related to
the transactions contemplated by this Agreement or any other Loan Document, or
any act, omission or event occurring in connection therewith, and the Borrower
and each Lender hereby waive, release and agree not to xxx upon any claim for
such damages, whether or not accrued and whether or not known or suspected to
exist in its favor.
15.13 Final Agreement. This Agreement and the other Loan Documents are
intended by the Borrower, the Agent and the Lenders to be the final, complete,
and exclusive expression of the agreement between them. This Agreement
supersedes any and all prior oral or written agreements relating to the subject
matter hereof. No modification, rescission, waiver, release, or amendment of any
provision of this Agreement or any other Loan Document shall be made, except by
a written agreement signed by the Borrower and a duly authorized officer of each
of the Agent and the requisite Lenders.
15.14 Counterparts. This Agreement may be executed in any number of
counterparts, and by the Agent, each Lender and the Borrower in separate
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same agreement; signature pages may be detached
from multiple separate counterparts and attached to a single counterpart so that
all signature pages are physically attached to the same document.
15.15 Captions. The captions contained in this Agreement are for
convenience of reference only, are without substantive meaning and should not be
construed to modify, enlarge, or restrict any provision.
15.16 Right of Setoff. In addition to any rights and remedies of the
Lenders provided by law, if an Event of Default exists or the Loans have been
accelerated, each Lender is authorized at any time and from time to time,
without prior notice to the Borrower, any such notice being waived by the
Borrower to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held by, and other indebtedness at any time owing by, such Lender to or for
the credit or the account of the Borrower against any and all Obligations owing
to such Lender, now or hereafter existing, irrespective of whether or not the
Agent or such Lender shall have made demand under this Agreement or any Loan
Document and although such Obligations may be contingent or unmatured. Each
Lender agrees promptly to notify the Borrower and the Agent after any such
set-off and application made by such Lender; provided, however, that the failure
to give such notice shall not affect the validity of such set-off and
application. NOTWITHSTANDING THE FOREGOING, NO LENDER SHALL EXERCISE ANY RIGHT
OF SET-OFF, BANKER'S
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XXXX, XX THE LIKE AGAINST ANY DEPOSIT ACCOUNT OR PROPERTY OF THE BORROWER HELD
OR MAINTAINED BY SUCH LENDER WITHOUT THE PRIOR WRITTEN UNANIMOUS CONSENT OF THE
LENDERS.
15.17 Joint and Several Liability. The Borrower shall be liable for
all amounts due to the Agent and/or any Lender under this Agreement, regardless
of which Borrower actually receives Loans or other extensions of credit
hereunder or the amount of such Loans received or the manner in which the Agent
and/or such Lender accounts for such Loans or other extensions of credit on its
books and records. The Borrower's Obligations with respect to Loans made to it,
and the Borrower's Obligations arising as a result of the joint and several
liability of the Borrower hereunder, with respect to Loans made to the other
Borrower hereunder, shall be separate and distinct obligations, but all such
Obligations shall be primary obligations of the Borrower.
The Borrower's Obligations arising as a result of the joint
and several liability of the Borrower hereunder with respect to Loans or other
extensions of credit made to the other Borrower hereunder shall, to the fullest
extent permitted by law, be unconditional irrespective of (i) the validity or
enforceability, avoidance or subordination of the Obligations of the other
Borrower or of any promissory note or other document evidencing all or any part
of the Obligations of the other Borrower, (ii) the absence of any attempt to
collect the Obligations from the other Borrower, any other guarantor, or any
other security therefor, or the absence of any other action to enforce the same,
(iii) the waiver, consent, extension, forbearance or granting of any indulgence
by the Agent and/or any Lender with respect to any provision of any instrument
evidencing the Obligations of the other Borrower, or any part thereof, or any
other agreement now or hereafter executed by the other Borrower and delivered to
the Agent and/or any Lender, (iv) the failure by the Agent and/or any Lender to
take any steps to perfect and maintain its security interest in, or to preserve
its rights to, any security or collateral for the Obligations of the other
Borrower, (v) the Agent's and/or any Lender's election, in any proceeding
instituted under the Bankruptcy Code, of the application of Section 1111(b)(2)
of the Bankruptcy Code, (vi) any borrowing or grant of a security interest by
the other Borrower, as debtor-in-possession under Section 364 of the Bankruptcy
Code, (vii) the disallowance of all or any portion of the Agent's and/or any
Lender's claim(s) for the repayment of the Obligations of the other Borrower
under Section 502 of the Bankruptcy Code, or (viii) any other circumstances
which might constitute a legal or equitable discharge or defense of a guarantor
or of the other Borrower. With respect to the Borrower's Obligations arising as
a result of the joint and several liability of the Borrower hereunder with
respect to Loans or other extensions of credit made to either of the other
Borrower hereunder, the Borrower waives, until the Obligations shall have been
paid in full and the Loan Agreement shall have been terminated, any right to
enforce any right of subrogation or any remedy which the Agent and/or any Lender
now has or may hereafter have against the Borrower, any endorser or any
guarantor of all or any part of the Obligations, and any benefit of, and any
right to participate in, any security or collateral given to the Agent and/or
any Lender to secure payment of the Obligations or any other liability of the
Borrower to the Agent and/or any Lender.
Upon any Event of Default, the Agent may proceed directly and
at once, without notice, against the Borrower to collect and recover the full
amount, or any portion of the Obligations, without first proceeding against the
other Borrower or any other Person, or against
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any security or collateral for the Obligations. The Borrower consents and agrees
that the Agent shall be under no obligation to marshal any assets in favor of
the Borrower or against or in payment of any or all of the Obligations.
15.18 Contribution and Indemnification among the Borrowers. Each
Borrower is obligated to repay the Obligations as joint and several obligors
under this Agreement. To the extent that any Borrower shall, under this
Agreement as a joint and several obligor, repay any of the Obligations
constituting Loans made to another Borrower hereunder or other Obligations
incurred directly and primarily by any other Borrower (an "Accommodation
Payment"), then the Borrower making such Accommodation Payment shall be entitled
to contribution and indemnification from, and be reimbursed by, each of the
other Borrowers in an amount, for each of such other Borrowers, equal to a
fraction of such Accommodation Payment, the numerator of which fraction is such
other Borrower's "Allocable Amount" (as defined below) and the denominator of
which is the sum of the Allocable Amounts of all of the Borrowers. As of any
date of determination, the "Allocable Amount" of each Borrower shall be equal to
the maximum amount of liability for Accommodation Payments which could be
asserted against such Borrower hereunder without (a) rendering such Borrower
"insolvent" within the meaning of Section 101 (31) of the Bankruptcy Code,
Section 2 of the Uniform Fraudulent Transfer Act ("UFTA") or Section 2 of the
Uniform Fraudulent Conveyance Act ("UFCA"), (ii) leaving such Borrower with
unreasonably small capital or assets, within the meaning of Section 548 of the
Bankruptcy Code, Section 4 of the UFTA, or Section 5 of the UFCA, or (iii)
leaving such Borrower unable to pay its debts as they become due within the
meaning of Section 548 of the Bankruptcy Code or Section 4 of the UFTA, or
Section 5 of the UFCA. All rights and claims of contribution, indemnification
and reimbursement under this Section shall be subordinate in right of payment to
the prior payment in full of the Obligations. The provisions of this section
shall, to the extent expressly inconsistent with any provision in any Loan
Document, supersede such inconsistent provision.
15.19 Agency of the Parent for each other Borrower. The Borrowers
hereby represent and warrant to the Agent and the Lenders that each of them will
derive benefits, directly and indirectly, from each Letter of Credit and from
each of the Loans, both in their separate capacity and as a member of the
integrated group to which each of the Borrowers belong, because (a) the
successful operation of the integrated group is dependent upon the continued
successful performance of the functions of the integrated group as a whole,
because, (b) the terms of the combined financing provided under this Agreement
are more favorable than would otherwise would be obtainable by the Borrowers
individually, and (c) the Borrowers' additional administrative and other costs
and reduced flexibility associated with individual financing arrangements which
would otherwise be required if obtainable would substantially reduce the value
to the Borrowers of the financing. The Borrowers in the discretion of their
respective managements are to agree among themselves as to the allocation of the
benefits of Letters of Credit and the proceeds of Loans; provided, however, that
the Borrowers shall be deemed to have represented and warranted to the Agent and
the Lenders at the time of allocation that each benefit and use of proceeds is a
Permitted Use.
For administrative convenience, each Borrower hereby irrevocably
appoints Centrum as the Borrower's attorney-in-fact, with power of substitution
(with the prior written consent of the Agent in the exercise of its sole and
absolute discretion), in the name of Centrum or in the name
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of the Borrower or otherwise to take any and all actions with respect to this
Agreement, the other Financing Documents, the Obligations and/or the Collateral
(including, without limitation, the proceeds thereof) as Centrum may so elect
from time to time, including, without limitation, actions to (i) request
advances under the Loans, apply for and direct the benefits of Letters of
Credits, and direct the Agent to disburse or credit the proceeds of any of the
Loans directly to an account of Centrum, any one or more of the Borrowers or
otherwise, which direction shall evidence the making of such Loans and shall
constitute the acknowledgement by each of the Borrowers of the receipt of the
proceeds of such Loans or the benefit of such Letter of Credit, (ii) enter into,
execute, deliver, amend, modify, restate, substitute, extend and/or renew this
Agreement, any other Financing Documents, security agreements, mortgages,
deposit account agreements, instruments, certificates, waivers, letter of credit
applications, releases, documents and agreements from time to time, and (iii)
endorse any check or other item of payment in the name of the Borrower or in the
name of Centrum. The foregoing appointment is coupled with an interest, cannot
be revoked without the prior written consent of the Agent, and may be exercised
from time to time through Centrum's duly authorized officer, officers or other
Person or Persons designated by Centrum to act from time to time on behalf of
Centrum.
Each of the Borrowers hereby irrevocably authorizes each of the Lenders
to make Loans to any one or more of the Borrowers, and hereby irrevocably
authorizes the Agent to issue or cause to be issued Letters of Credit for the
account of any or all of the Borrowers, pursuant to the provisions of this
Agreement upon the written, oral or telephone request of any one or more of the
Persons who is from time to time a responsible officer of a Borrower under the
provisions of the most recent certificate of corporate resolutions and/or
incumbency of the Borrowers on file with the Agent and also upon the written,
oral or telephone request of any one of the Persons who is from time to time a
responsible officer of Centrum under the provisions of the most recent
certificate of corporate resolutions and/or incumbency for Centrum on file with
the Agent.
Neither the Agent nor any of the Lenders assumes any responsibility or
liability for any errors, mistakes, and/or discrepancies in the oral,
telephonic, written or other transmissions of any instructions, orders, requests
and confirmations between the Agent and the Borrowers or the Agent and any of
the Lenders in connection with the credit facilities hereunder, any Loans, any
Letter of Credit or any other transaction in connection with the provisions of
this Agreement. Without implying any limitation on the joint and several nature
of the Obligations, the Lenders agree that, notwithstanding any other provision
of this Agreement, the Borrowers may create reasonable inter-company
indebtedness between or among the Borrowers with respect to the allocation of
the benefits and proceeds of the advances and credit facilities under this
Agreement. The Borrowers agree among themselves, and the Agent and the Lenders
consent to that agreement, that each Borrower shall have rights of contribution
from all of the other Borrowers to the extent such Borrower incurs Obligations
in excess of the proceeds of the Loans received by, or allocated to purposes for
the direct benefit of, such Borrower. All such indebtedness and rights shall be,
and are hereby agreed by the Borrowers to be, subordinate in priority and
payment to the indefeasible repayment in full in cash of the Obligations, and,
unless the Agent agrees in writing otherwise, shall not be exercised or repaid
in whole or in part until all of the Obligations have been indefeasibly paid in
full in cash. The Borrowers agree that all of such inter-company indebtedness
and rights of contribution are part of the Collateral and secure the
Obligations, without right of counterclaim, recoupment and offset against the
Agent or any of the Lenders. Each Borrower shall not evidence the inter-company
indebtedness or rights of
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contribution by note or other instrument, and shall not secure such indebtedness
or rights of contribution with any Lien or security.
15.20 Wire Transfer Procedures.(a) The Borrower acknowledges that the
Agent has made available to the Borrower Wire Transfer Procedures a copy of
which is attached to this Agreement as EXHIBIT I and which include a description
of security procedures regarding funds transfers executed by the Agent or an
Affiliate bank at the request of the Borrower (the "Security Procedures"). The
Borrower and the Agent agree that the Security Procedures are commercially
reasonable. The Borrower further acknowledges that the full scope of the
Security Procedures which the Agent or such Affiliate bank offers and strongly
recommends for funds transfers is available only if the Borrower communicates
directly with the Agent or such Affiliate bank as applicable in accordance with
said procedures. If the Borrower attempts to communicate by any other method or
otherwise not in accordance with the Security Procedures, the Agent or such
Affiliate bank, as applicable, shall not be required to execute such
instructions, but if the Agent or such Affiliate bank, as applicable, does so,
the Borrower will be deemed to have refused the Security Procedures that the
Agent or such Affiliate bank as applicable offers and strongly recommends, and
the Borrower will be bound by any funds transfer, whether or not authorized,
which is issued in the Borrower's name and accepted by the Agent or such
Affiliate bank, as applicable, in good faith. The Agent or such Affiliate bank,
as applicable, may modify Wire Transfer Procedures including, without
limitation, the Security Procedures at such time or times and in such manner as
the Agent or such Affiliate bank, as applicable, in its sole discretion, deems
appropriate to meet prevailing standards of good banking practice. By continuing
to use the Agent's or such Affiliate bank's, as applicable, wire transfer
services after receipt of any modification of the Wire Transfer procedures
including, without limitation, the Security Procedures, the Borrower agrees that
the Security Procedures, as modified, are likewise commercially reasonable. The
Borrower further agrees to establish and maintain procedures to safeguard the
Security Procedures and any information related thereto. Neither the Agent nor
any Affiliate of the Agent is responsible for detecting any error in payment
order sent by the Borrower to the Agent or any of the Lenders.
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(b) The Agent or such Affiliate bank, as applicable, will
generally use the Fedwire funds transfer system for domestic funds transfers,
and the funds transfer system operated by the Society for Worldwide
International Financial Telecommunication (SWIFT) for international funds
transfers. International funds transfers may also be initiated through the
Clearing House InterBank Payment System (CHIPs) or international cable. However,
the Agent or such Affiliate bank, as applicable, may use any means and routes
that the Agent or such Affiliate bank, as applicable, in its sole discretion,
may consider suitable for the transmission of funds. Each payment order, or
cancellation thereof, carried out through a funds transfer system or a
clearinghouse will be governed by all applicable funds transfer system rules and
clearing house rules and clearing arrangements, whether or not the Agent or such
Affiliate bank, as applicable, is a member of the system, clearinghouse or
arrangement and the Borrower acknowledges that the Agent's or such Affiliate
bank's, as applicable, right to reverse, adjust, stop payment or delay posting
of an executed payment order is subject to the laws, regulations, rules,
circulars and arrangements described herein.
WITNESS WHEREOF, the parties have entered into this Agreement on the
date first above written.
"BORROWER":
XXXXXXX STEEL COMPANY
By /s/ Xxxxxxx X. Xxxxxx
---------------------
Xxxxxxx X. Xxxxxx
Chief Financial Officer/Treasurer
XXXXXXX INTERNATIONAL, INC.
By /s/ Xxxxxxx X. Xxxxxx
---------------------
Xxxxxxx X. Xxxxxx
Treasurer
XXXXXX FORGE COMPANY
By /s/ Xxxxxxx X. Xxxxxx
---------------------
Xxxxxxx X. Xxxxxx
Vice President/Treasurer
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ERIE BRONZE & ALUMINUM COMPANY
By /s/ Xxxxxxx X. Xxxxxx
---------------------
Xxxxxxx X. Xxxxxx
Treasurer
AMERICAN HANDLING, INC.
By /s/ Xxxxxxx X. Xxxxxx
---------------------
Xxxxxxx X. Xxxxxx
Vice President
NORTHERN STEEL COMPANY
By /s/ Xxxxxxx X. Xxxxxx
---------------------
Xxxxxxx X. Xxxxxx
Treasurer
MICAFIL, INC.
By /s/ Xxxxxxx X. Xxxxxx
---------------------
Xxxxxxx X. Xxxxxx
Treasurer
EBALLOY GLASS PRODUCTS COMPANY
By /s/ Xxxxxxx X. Xxxxxx
---------------------
Xxxxxxx X. Xxxxxx
Treasurer
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122
"AGENT"
BANKAMERICA BUSINESS CREDIT, INC., as
the Agent
By /s/ Xxxxxx X. XxXxxxx
---------------------
Xxxxxx X.XxXxxxx, Senior Vice President
"LENDERS"
Commitment: $46,500,000 BANKAMERICA BUSINESS CREDIT, INC., as
(including the Acquisition a Lender
Line without implying the
existence of any commitment
thereunder on the Closing Date)
By /s/ Xxxxxx X. XxXxxxx
---------------------
Xxxxxx X. XxXxxxx, Senior Vice President
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123
EXHIBIT A
FORM OF TERM NOTE
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124
TERM NOTE
$13,500,000 Chicago, Illinois
February 25, 1999
FOR VALUE RECEIVED, XXXXXXX STEEL COMPANY, a corporation organized
under the laws of the Commonwealth of Pennsylvania ("MSC"), including, without
limitation, its XxXxxxx Rolled Rings ("MRR") division; XXXXXXX INTERNATIONAL,
INC., a corporation organized under the laws of the U.S. Virgin Islands ("MII");
XXXXXX FORGE COMPANY, a corporation organized under the laws of the State of
Tennessee ("Xxxxxx"); ERIE BRONZE & ALUMINUM COMPANY, a corporation organized
under the laws of the Commonwealth of Pennsylvania ("EBA"); AMERICAN HANDLING,
INC., a corporation organized under the laws of the State of Ohio ("AHI");
NORTHERN STEEL COMPANY, a corporation organized under the laws of the State of
Washington ("Northern"); MICAFIL, INC., a corporation organized under the laws
of the State of Delaware ("Micafil"); and EBALLOY GLASS PRODUCTS COMPANY, a
corporation organized under the laws of the Commonwealth of Pennsylvania
("Eballoy"), (each of MSC, MRR, MII, Xxxxxx, EBA, AHI, Northern, Micafil, and
Eballoy a "Borrower" and collectively the "Borrowers"), jointly and severally,
promise to pay to the order of BANKAMERICA BUSINESS CREDIT, INC., a corporation
organized under the laws of the State of Delaware (the "Lender"), the principal
sum of THIRTEEN MILLION FIVE HUNDRED THOUSAND DOLLARS ($13,500,000) (the
"Principal Sum"), or such lesser amount equal to the Lender's Pro Rata Share (as
that term is defined in the "Financing Agreement" defined below) of the Term
Loans (as that term is defined in the Financing Agreement) together with
interest thereon at the rate or rates hereinafter provided, in accordance with
the following:
1. Interest.
Commencing as of the date hereof and continuing until repayment in full
of all sums due hereunder, the unpaid Principal Sum shall bear interest at the
Interest Rate (as that term is defined in the Financing Agreement) applicable to
the Term Loans from time to time under Section 3.1 of the Financing Agreement.
2. Payments and Maturity.
The unpaid Principal Sum, together with interest thereon at the rate or
rates provided above, shall be payable as follows:
(a) Interest only on the unpaid Principal Sum shall be due and
payable at the times provided in Section 3.1(a) of the Financing Agreement;
(b) The Borrowers shall pay to the Lender its Pro Rata Share
of the Term Loan installment payments made at the times and in the manner set
forth in Section 2.3(c) of the Financing Agreement; and
125
(c) Unless sooner paid, the unpaid Principal Sum, together
with interest accrued and unpaid thereon, shall be due and payable in full on
the Term Loan Maturity Date (as that term is defined in the Financing
Agreement).
3. Default Interest.
The unpaid Principal Sum shall bear interest at the Default Rate as
provided in Section 3.1(b) of the Financing Agreement.
4. Application and Place of Payments.
All payments made on account of this Note shall be applied in the
manner provided in the Financing Agreement. All payments on account of this Note
shall be paid in lawful money of the United States of America in immediately
available funds during regular business hours of BankAmerica Business Credit,
Inc., a Delaware corporation (the "Agent" under the Financing Agreement), at its
office at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx, or at such other times
and places as the Agent may at any time and from time to time designate in
writing to the Borrowers.
5. Prepayment.
The Borrowers may prepay the Principal Sum at the times and in the
manner provided in the Financing Agreement.
6. Financing Agreement and Other Financing Documents.
This Note is a "Term Loan Note" described in a Loan and Security
Agreement dated of even date herewith, by and among the Agent, the Lender, the
other Lenders under the Financing Agreement, and the Borrowers (as amended,
modified, restated, substituted, extended and renewed at any time and from time
to time, the "Financing Agreement"). The indebtedness evidenced by this Note is
included within the meaning of the term "Obligations" as defined in the
Financing Agreement. The term "Financing Documents" as used in this Note shall
mean collectively this Note, the Financing Agreement and any other instrument,
agreement, or document previously, simultaneously, or hereafter executed and
delivered by any Borrower and/or any other person, singularly or jointly with
any other person, evidencing, securing, guaranteeing, or in connection with the
Principal Sum, this Note and/or the Financing Agreement. All terms used in this
Note which are not otherwise defined herein shall have the meaning set forth in
the Financing Agreement.
7. Security.
This Note is secured as provided in the Financing Agreement.
8. Events of Default.
The occurrence of any one or more of the following events shall
constitute an event of default (individually, an "Event of Default" and
collectively, the "Events of Default") under the terms of this Note:
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126
(a) The failure of the Borrowers to pay to the Lender when due
any and all amounts payable by the Borrowers to the Lender under the terms of
this Note; or
(b) The occurrence of an "Event of Default" (as that term is
defined in the Financing Agreement) beyond any applicable grace periods.
9. Remedies.
Upon the occurrence of an Event of Default, the Lender shall have all
of the rights, powers, and remedies provided in the Financing Agreement. The
Borrowers and all endorsers, guarantors, and other parties who may now or in the
future be primarily or secondarily liable for the payment of the indebtedness
evidenced by this Note hereby severally waive presentment, protest and demand,
notice of protest, notice of demand and of dishonor and non-payment of this Note
and expressly agree that this Note or any payment hereunder may be extended from
time to time without in any way affecting the liability of the Borrowers,
guarantors and endorsers.
10. Notices.
Any notice, request, or demand to or upon the Borrowers or the Lender
shall be deemed to have been properly given or made when delivered in accordance
with Section 15.8 of the Financing Agreement.
11. Miscellaneous.
Each right, power, and remedy of the Lender as provided for in this
Note or any of the other Financing Documents, or now or hereafter existing under
any applicable law or otherwise shall be cumulative and concurrent and shall be
in addition to every other right, power, or remedy provided for in this Note or
any of the other Financing Documents or now or hereafter existing under any
applicable law, and the exercise or beginning of the exercise by the Lender of
any one or more of such rights, powers, or remedies shall not preclude the
simultaneous or later exercise by the Lender of any or all such other rights,
powers, or remedies. No failure or delay by the Lender to insist upon the strict
performance of any term, condition, covenant, or agreement of this Note or any
of the other Financing Documents, or to exercise any right, power, or remedy
consequent upon a breach thereof, shall constitute a waiver of any such term,
condition, covenant, or agreement or of any such breach, or preclude the Lender
from exercising any such right, power, or remedy at a later time or times. By
accepting payment after the due date of any amount payable under the terms of
this Note, the Lender shall not be deemed to waive the right either to require
prompt payment when due of all other amounts payable under the terms of this
Note or to declare an Event of Default for the failure to effect such prompt
payment of any such other amount. No course of dealing or conduct shall be
effective to amend, modify, waive, release, or change any provisions of this
Note.
12. Partial Invalidity.
In the event any provision of this Note (or any part of any provision)
is held by a court of competent jurisdiction to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provision (or remaining part of the affected
provision) of this Note; but this Note shall be construed as if such invalid,
illegal, or
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127
unenforceable provision (or part thereof) had not been contained in this Note,
but only to the extent it is invalid, illegal, or unenforceable.
13. Captions.
The captions herein set forth are for convenience only and shall not be
deemed to define, limit, or describe the scope or intent of this Note.
14. Applicable Law.
The Borrowers acknowledge and agree that this Note shall be governed by
the laws of the State of Illinois, even though for the convenience and at the
request of the Borrowers, this Note may be executed elsewhere, all as if this
Note had been executed, delivered, administered and performed solely within the
State of Illinois.
IN WITNESS WHEREOF, each Borrower has caused this Note to be executed
under seal by its duly authorized officer as of the date first written above.
XXXXXXX STEEL COMPANY
By: (Seal)
------------------------------
Xxxxxxx X. Xxxxxx,
Chief Financial Officer/Treasurer
XXXXXXX INTERNATIONAL, INC.
By: (Seal)
------------------------------
Xxxxxxx X. Xxxxxx
Treasurer
XXXXXX FORGE COMPANY
By: (Seal)
------------------------------
Xxxxxxx X. Xxxxxx
Vice President/Treasurer
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128
ERIE BRONZE & ALUMINUM COMPANY
By: (Seal)
------------------------------
Xxxxxxx X. Xxxxxx
Treasurer
AMERICAN HANDLING, INC.
By: (Seal)
------------------------------
Xxxxxxx X. Xxxxxx
Vice President/Treasurer
NORTHERN STEEL COMPANY
By: (Seal)
------------------------------
Xxxxxxx X. Xxxxxx
Treasurer
MICAFIL, INC.
By: (Seal)
------------------------------
Xxxxxxx X. Xxxxxx
Treasurer
EBALLOY GLASS PRODUCTS COMPANY
By: (Seal)
------------------------------
Xxxxxxx X. Xxxxxx
Treasurer
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129
EXHIBIT B
FORM OF BORROWING BASE CERTIFICATE
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130
EXHIBIT C
FORM OF CAPITAL EXPENDITURE LOAN NOTE
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131
CAPITAL EXPENDITURE LOAN NOTE
$8,000,000 Chicago, Illinois
February 25, 1999
FOR VALUE RECEIVED, XXXXXXX STEEL COMPANY, a corporation organized
under the laws of the Commonwealth of Pennsylvania ("MSC"), including, without
limitation, its XxXxxxx Rolled Rings ("MRR") division; XXXXXXX INTERNATIONAL,
INC., a corporation organized under the laws of the U.S. Virgin Islands ("MII");
XXXXXX FORGE COMPANY, a corporation organized under the laws of the State of
Tennessee ("Xxxxxx"); ERIE BRONZE & ALUMINUM COMPANY, a corporation organized
under the laws of the Commonwealth of Pennsylvania ("EBA"); AMERICAN HANDLING,
INC., a corporation organized under the laws of the State of Ohio ("AHI");
NORTHERN STEEL COMPANY, a corporation organized under the laws of the State of
Washington ("Northern"); MICAFIL, INC., a corporation organized under the laws
of the State of Delaware ("Micafil"); and EBALLOY GLASS PRODUCTS COMPANY, a
corporation organized under the laws of the Commonwealth of Pennsylvania
("Eballoy"), (each of MSC, MRR, MII, Xxxxxx, EBA, AHI, Northern, Micafil, and
Eballoy a "Borrower" and collectively the "Borrowers"), jointly and severally,
promise to pay to the order of BANKAMERICA BUSINESS CREDIT, INC., a corporation
organized under the laws of the State of Delaware (the "Lender"), the principal
sum of EIGHT MILLION DOLLARS ($8,000,000) (the "Principal Sum"), or such lesser
amount equal to the Lender's Pro Rata Share (as that term is defined in the
"Financing Agreement" defined below) of the Capital Expenditure Loans (as that
term is defined in the Financing Agreement) or so much thereof as has been or
may be advanced and/or readvanced under the Capital Expenditure Loans, to or for
the account of the Borrowers pursuant to the terms and conditions of the
Financing Agreement, together with interest thereon at the rate or rates
hereinafter provided, in accordance with the following:
1. Interest.
Commencing as of the date hereof and continuing until repayment in full
of all sums due hereunder, the unpaid Principal Sum shall bear interest at the
Interest Rate (as that term is defined in the Financing Agreement) applicable to
the Term Loans from time to time under Section 3.1 of the Financing Agreement.
2. Payments and Maturity.
The unpaid Principal Sum, together with interest thereon at the rate or
rates provided above, shall be payable as follows:
(a) Interest only on the unpaid Principal Sum shall be due and
payable at the times provided in Section 3.1(a) of the Financing Agreement;
(b) The Borrowers shall pay to the Lender its Pro Rata Share
of the Capital Expenditure Loans installment payments made at the times and in
the manner set forth in Section 2.5(j) of the Financing Agreement; and
132
(c) Unless sooner paid, the unpaid Principal Sum, together
with interest accrued and unpaid thereon, shall be due and payable in full on
the Capital Expenditure Loan Maturity Date (as that term is defined in the
Financing Agreement).
The fact that the balance hereunder may be reduced to zero from time to
time pursuant to the Financing Agreement will not affect the continuing validity
of this Note or the Financing Agreement, and the balance may be increased to the
Principal Sum after any such reduction to zero.
3. Default Interest.
The unpaid Principal Sum shall bear interest at the Default Rate as
provided in Section 3.1(b) of the Financing Agreement.
4. Application and Place of Payments.
All payments made on account of this Note shall be applied in the
manner provided in the Financing Agreement. All payments on account of this Note
shall be paid in lawful money of the United States of America in immediately
available funds during regular business hours of BankAmerica Business Credit,
Inc., a Delaware corporation (the "Agent" under the Financing Agreement), at its
office at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx, or at such other times
and places as the Agent may at any time and from time to time designate in
writing to the Borrowers.
5. Prepayment.
The Borrowers may prepay the Principal Sum at the times and in the
manner provided in the Financing Agreement.
6. Financing Agreement and Other Financing Documents.
This Note is a "Capital Expenditure Loan Note" described in a Loan and
Security Agreement dated of even date herewith, by and among the Agent, the
Lender, the other Lenders under the Financing Agreement, and the Borrowers (as
amended, modified, restated, substituted, extended and renewed at any time and
from time to time, the "Financing Agreement"). The indebtedness evidenced by
this Note is included within the meaning of the term "Obligations" as defined in
the Financing Agreement. The term "Financing Documents" as used in this Note
shall mean collectively this Note, the Financing Agreement and any other
instrument, agreement, or document previously, simultaneously, or hereafter
executed and delivered by any Borrower and/or any other person, singularly or
jointly with any other person, evidencing, securing, guaranteeing, or in
connection with the Principal Sum, this Note and/or the Financing Agreement. All
terms used in this Note which are not otherwise defined herein shall have the
meaning set forth in the Financing Agreement.
7. Security.
This Note is secured as provided in the Financing Agreement.
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133
8. Events of Default.
The occurrence of any one or more of the following events shall
constitute an event of default (individually, an "Event of Default" and
collectively, the "Events of Default") under the terms of this Note:
(a) The failure of the Borrowers to pay to the Lender when due
any and all amounts payable by the Borrowers to the Lender under the terms of
this Note; or
(b) The occurrence of an "Event of Default" (as that term is
defined in the Financing Agreement) beyond any applicable grace periods.
9. Remedies.
Upon the occurrence of an Event of Default, the Lender shall have all
of the rights, powers, and remedies provided in the Financing Agreement. The
Borrowers and all endorsers, guarantors, and other parties who may now or in the
future be primarily or secondarily liable for the payment of the indebtedness
evidenced by this Note hereby severally waive presentment, protest and demand,
notice of protest, notice of demand and of dishonor and non-payment of this Note
and expressly agree that this Note or any payment hereunder may be extended from
time to time without in any way affecting the liability of the Borrowers,
guarantors and endorsers.
10. Notices.
Any notice, request, or demand to or upon the Borrowers or the Lender
shall be deemed to have been properly given or made when delivered in accordance
with Section 15.8 of the Financing Agreement.
11. Miscellaneous.
Each right, power, and remedy of the Lender as provided for in this
Note or any of the other Financing Documents, or now or hereafter existing under
any applicable law or otherwise shall be cumulative and concurrent and shall be
in addition to every other right, power, or remedy provided for in this Note or
any of the other Financing Documents or now or hereafter existing under any
applicable law, and the exercise or beginning of the exercise by the Lender of
any one or more of such rights, powers, or remedies shall not preclude the
simultaneous or later exercise by the Lender of any or all such other rights,
powers, or remedies. No failure or delay by the Lender to insist upon the strict
performance of any term, condition, covenant, or agreement of this Note or any
of the other Financing Documents, or to exercise any right, power, or remedy
consequent upon a breach thereof, shall constitute a waiver of any such term,
condition, covenant, or agreement or of any such breach, or preclude the Lender
from exercising any such right, power, or remedy at a later time or times. By
accepting payment after the due date of any amount payable under the terms of
this Note, the Lender shall not be deemed to waive the right either to require
prompt payment when due of all other amounts payable under the terms of this
Note or to declare an Event of Default for the failure to effect such prompt
payment of any such other amount. No course of dealing or conduct shall be
effective to amend, modify, waive, release, or change any provisions of this
Note.
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134
12. Partial Invalidity.
In the event any provision of this Note (or any part of any provision)
is held by a court of competent jurisdiction to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provision (or remaining part of the affected
provision) of this Note; but this Note shall be construed as if such invalid,
illegal, or unenforceable provision (or part thereof) had not been contained in
this Note, but only to the extent it is invalid, illegal, or unenforceable.
13. Captions.
The captions herein set forth are for convenience only and shall not be
deemed to define, limit, or describe the scope or intent of this Note.
14. Applicable Law.
The Borrowers acknowledge and agree that this Note shall be governed by
the laws of the State of Illinois, even though for the convenience and at the
request of the Borrowers, this Note may be executed elsewhere, all as if this
Note had been executed, delivered, administered and performed solely within the
State of Illinois.
IN WITNESS WHEREOF, each Borrower has caused this Note to be executed
under seal by its duly authorized officer as of the date first written above.
XXXXXXX STEEL COMPANY
By: (Seal)
------------------------------
Xxxxxxx X. Xxxxxx,
Chief Financial Officer/Treasurer
XXXXXXX INTERNATIONAL, INC.
By: (Seal)
------------------------------
Xxxxxxx X. Xxxxxx
Treasurer
XXXXXX FORGE COMPANY
By: (Seal)
------------------------------
Xxxxxxx X. Xxxxxx
Vice President/Treasurer
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135
ERIE BRONZE & ALUMINUM COMPANY
By: (Seal)
------------------------------
Xxxxxxx X. Xxxxxx
Treasurer
AMERICAN HANDLING, INC.
By: (Seal)
------------------------------
Xxxxxxx X. Xxxxxx
Vice President/Treasurer
NORTHERN STEEL COMPANY
By: (Seal)
------------------------------
Xxxxxxx X. Xxxxxx
Treasurer
MICAFIL, INC.
By: (Seal)
------------------------------
Xxxxxxx X. Xxxxxx
Treasurer
EBALLOY GLASS PRODUCTS COMPANY
By: (Seal)
------------------------------
Xxxxxxx X. Xxxxxx
Treasurer
- 5 -
