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EXHIBIT 10(t)
LOAN AND SECURITY AGREEMENT
DATED AS OF MARCH 10, 1999
BETWEEN
XXXXXX AUTOMOTIVE GROUP, INC.,
AS BORROWER,
AND
THE FINANCIAL INSTITUTIONS
WHICH MAY BECOME PARTIES HERETO,
AND
XXXXXX FINANCIAL, INC.,
AS AGENT AND AS LENDER
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS AND ACCOUNTING TERMS..................................1
1.1 Certain Defined Terms..................................................1
SECTION 2. LOANS AND COLLATERAL..............................................1
2.1 Loans..................................................................1
(A)(2) Term Loan A-2...................................................1
(A)(3) Term Loan B.....................................................2
(B) Revolving Loan......................................................2
(1) "Maximum Revolving Loan Amount...................................2
(2) "Borrowing Base..................................................2
(C) Eligible Collateral.................................................3
(D) Borrowing Mechanics.................................................5
(E) Notes...............................................................6
(F) Letters of Credit...................................................6
(1) Maximum Amount...................................................6
(2) Reimbursement....................................................6
(3) Request for Letters of Credit....................................7
(G) Other Letter of Credit Provisions...................................7
(1) Obligations Absolute.............................................7
(2) Nature of Lender's Duties........................................8
(3) Liability........................................................8
(H) Availability of a Lender's Pro Rata Share...........................8
2.2 Interest...............................................................9
(A) Rate of Interest....................................................9
(B) Computation and Payment of Interest................................10
(C) Interest Laws......................................................11
(D) Conversion or Continuation.........................................11
2.3 Fees..................................................................12
(A) Unused Line Fee....................................................12
(B) Letter of Credit Fees..............................................12
(C) Prepayment Fees....................................................12
(D) Audit Fees.........................................................13
(E) Other Fees and Expenses............................................13
2.4 Payments and Prepayments..............................................13
(A) Manner and Time of Payment.........................................13
(B) Mandatory Prepayments..............................................14
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(1) Overadvance.....................................................14
(2) Proceeds of Asset Dispositions..................................14
(3) Prepayments from Excess Cash Flow...............................14
(C) Voluntary Prepayments and Repayments...............................14
(D) Payments on Business Days..........................................15
2.5 Term of this Agreement................................................15
2.6 Statements............................................................15
2.7 Grant of Security Interest............................................16
2.8 Capital Adequacy and Other Adjustments................................16
2.9 Taxes.................................................................17
(A) No Deductions......................................................17
(B) Changes in Tax Laws................................................17
(C) Foreign Lenders....................................................18
2.10 Required Termination and Prepayment..................................19
2.11 Optional Prepayment/Replacement of
Agent or Lenders in Respect of Increased Costs............................19
2.12 Compensation.........................................................20
2.13 Booking of LIBOR Loans...............................................20
2.14 Assumptions Concerning Funding of LIBOR Loans........................20
SECTION 3. CONDITIONS TO LOANS..............................................20
SECTION 4. BORROWER'S REPRESENTATIONS, WARRANTIES AND CERTAIN COVENANTS.....21
4.1 Organization, Powers, Capitalization..................................21
(A) Organization and Powers............................................21
(B) Capitalization.....................................................21
4.2 Authorization of Borrowing, No Conflict...............................21
4.3 Financial Condition...................................................22
4.4 Indebtedness and Liabilities..........................................22
4.5 Account Warranties and Covenants......................................22
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4.6 Names and Locations...................................................23
4.7 Title to Properties; Liens............................................23
4.8 Litigation; Adverse Facts.............................................23
4.9 Payment of Taxes......................................................24
4.10 Performance of Agreements............................................24
4.11 Employee Benefit Plans...............................................24
4.12 Intellectual Property................................................25
4.13 Broker's Fees........................................................25
4.14 Environmental Compliance.............................................25
4.15 Solvency.............................................................25
4.16 Disclosure...........................................................25
4.17 Insurance............................................................25
4.18 Compliance with Laws.................................................26
4.19 Bank Accounts........................................................26
4.20 Employee Matters.....................................................26
4.21 Governmental Regulation..............................................27
4.22 Access to Accountants and Management.................................27
4.23 Inspection...........................................................27
4.24 Collateral Records...................................................27
4.25 Account Covenants; Verification......................................27
4.26 Collection of Accounts and Payments..................................28
SECTION 5. REPORTING AND OTHER AFFIRMATIVE COVENANTS........................29
5.1 Financial Statements and Other Reports................................29
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5.2 Endorsement...........................................................29
5.3 Maintenance of Properties.............................................29
5.4 Compliance with Laws..................................................29
5.5 Further Assurances....................................................29
5.6 Mortgages; Title Insurance; Surveys; Additional Leasehold Properties..30
(A) Title Insurance....................................................30
(B) Additional Mortgaged Property......................................30
(C) Surveys............................................................30
(D) Additional Leasehold Properties....................................30
5.7 Use of Proceeds and Margin Security...................................30
5.8 Bailee................................................................31
5.9 Year 2000............................................................31
SECTION 6. FINANCIAL COVENANTS..............................................31
SECTION 7. NEGATIVE COVENANTS...............................................31
7.1 Indebtedness and Liabilities..........................................31
(A) Indebtedness.......................................................32
(B) Liabilities........................................................32
7.2 Guaranties............................................................33
7.3 Transfers, Liens and Related Matters..................................33
(A) Transfers..........................................................33
(B) Liens..............................................................33
(C) No Negative Pledges................................................33
(D) No Restrictions on Subsidiary Distributions to Borrower............33
7.4 Investments and Loans.................................................34
7.5 Restricted Junior Payments............................................34
7.6 Restriction on Fundamental Changes....................................34
7.7 Transactions with Affiliates..........................................35
7.8 Conduct of Business...................................................35
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7.9 Tax Consolidations....................................................35
7.10 Subsidiaries.........................................................35
7.11 Fiscal Year; Tax Designation.........................................35
7.12 Press Release; Public Offering Materials.............................35
7.13 Bank Accounts........................................................35
SECTION 8. DEFAULT, RIGHTS AND REMEDIES.....................................35
8.1 Event of Default......................................................35
(A) Payment............................................................36
(B) Default in Other Agreements........................................36
(C) Breach of Certain Provisions.......................................36
(D) Breach of Warranty.................................................36
(E) Other Defaults Under Loan Documents................................36
(F) Change in Control..................................................36
(G) Involuntary Bankruptcy; Appointment of Receiver, etc...............37
(H) Voluntary Bankruptcy; Appointment of Receiver, etc.................37
(I) Liens..............................................................37
(J) Judgment and Attachments...........................................37
(K) Dissolution........................................................38
(L) Solvency...........................................................38
(M) Injunction.........................................................38
(N) Invalidity of Loan Documents.......................................38
(O) Failure of Security................................................38
(P) Damage, Strike.....................................................38
(Q) Licenses and Permits...............................................39
(R) Forfeiture.........................................................39
8.2 Suspension of Commitments.............................................39
8.3 Acceleration..........................................................39
8.4 Remedies..............................................................39
8.5 Appointment of Attorney-in-Fact.......................................40
8.6 Limitation on Duty of Agent with Respect to Collateral................41
8.7 Application of Proceeds...............................................41
8.8 License of Intellectual Property......................................41
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8.9 Waivers, Non-Exclusive Remedies.......................................42
SECTION 9. AGENT............................................................42
9.1 Agent.................................................................42
(A) Appointment........................................................42
(B) Nature of Duties...................................................42
(C) Rights, Exculpation, Etc...........................................43
(D) Reliance...........................................................43
(E) Indemnification....................................................44
(F) Xxxxxx Individually................................................44
(G) Successor Agent....................................................44
(1) Resignation.....................................................44
(2) Appointment of Successor........................................45
(3) Successor Agent.................................................45
(H) Collateral Matters.................................................45
(1) Release of Collateral...........................................45
(2) Execution of Releases...........................................45
(3) Absence of Duty.................................................46
(I) Agency for Perfection..............................................46
(J) Exercise of Remedies...............................................47
9.2 Notice of Default.....................................................47
9.3 Action by Agent.......................................................47
9.4 Amendments, Waivers and Consents......................................48
9.5 Assignments and Participations in Loans...............................48
9.6 Set Off and Sharing of Payments.......................................50
9.7 Disbursement of Funds.................................................50
9.8 Settlements, Payments and Information.................................51
(A) Revolving Advances and Payments; Fee Payments......................51
(B) Return of Payments.................................................52
9.9 Dissemination of Information..........................................52
9.10 Discretionary Advances...............................................52
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SECTION 10. MISCELLANEOUS...................................................52
10.1 Expenses and Attorneys' Fees.........................................52
10.2 Indemnity............................................................53
10.3 Notices..............................................................54
10.4 Survival of Representations and Warranties and Certain Agreements....55
10.5 Indulgence Not Waiver................................................55
10.6 Marshaling; Payments Set Aside.......................................55
10.7 Entire Agreement.....................................................56
10.8 Severability.........................................................56
10.9 Lenders' Obligations Several; Independent Nature of Lenders' Rights..56
10.10 Headings............................................................56
10.11 APPLICABLE LAW......................................................56
10.12 Successors and Assigns..............................................56
10.13 No Fiduciary Relationship; No Duty; Limitation of Liabilities.......57
10.14 CONSENT TO JURISDICTION.............................................57
10.15 WAIVER OF JURY TRIAL................................................58
10.16 Construction........................................................58
10.17 Counterparts; Effectiveness.........................................58
10.18 Confidentiality.....................................................58
SECTION 11. DEFINITIONS AND ACCOUNTING TERMS................................59
11.2 Accounting Terms.....................................................74
11.3 Other Definitional Provisions........................................75
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LOAN AND SECURITY AGREEMENT
This AGREEMENT is dated as of March 10, 1999 and entered into among
XXXXXX AUTOMOTIVE GROUP, INC., a Louisiana corporation ("Borrower"), the
financial institution(s) listed on the signature pages hereof, and their
respective successors and Eligible Assignees (each individually a "Lender" and
collectively "Lenders") and XXXXXX FINANCIAL, INC., a Delaware corporation (in
its individual capacity, "Xxxxxx"), for itself as a Lender and as Agent.
WHEREAS, Borrower desires that Lenders extend a secured credit
facility in the aggregate amount not to exceed $45,000,000, to provide working
capital financing and to provide funds for other general corporate purposes;
and
WHEREAS, to secure Borrower's obligations under the Loan Documents
Borrower is granting to Agent, for benefit of Lenders, a security interest in
and lien upon certain of Borrower's property; and
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Borrower, Agent and Lenders agree as
follows:
SECTION 1. DEFINITIONS AND ACCOUNTING TERMS
1.1 Certain Defined Terms. The capitalized terms and the
accounting terms used in this Agreement shall have the meanings set forth in
Section 11 of this Agreement:
SECTION 2. LOANS AND COLLATERAL
2.1 Loans.
(A)(1) Term Loan A-1. Each Lender, severally, agrees to lend
to Borrower, on the Closing Date, its Pro Rata Share of the Term Loan A-1 which
is in the aggregate amount of $1,150,000.00. Term Loan A-1 shall be funded in
one drawing. Amounts borrowed under this subsection 2.1(A)(1) and repaid may
not be reborrowed. Borrower shall make principal payments in the amount of
$13,690.48 per month, commencing on the first day of the month immediately
following the date hereof, with the balance due on the Termination Date (the
"Scheduled A-1 Installments").
(A)(2) Term Loan A-2. Each Lender, severally, agrees to lend
to Borrower, on the Term Loan A-2 Closing Date, its Pro Rata Share of the Term
Loan
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A-2 which is in the aggregate amount of $850,000.00. Term Loan A-2 shall be
funded in one drawing. Amounts borrowed under this subsection 2.1(A)(2) and
repaid may not be reborrowed. Borrower shall make principal payments in the
amount of $10,119.05 per month, commencing on the first day of the month
immediately following the Funding Date for Term Loan A-2, with the balance due
on the Termination Date (the "Scheduled A-2 Installments").
(A)(3) Term Loan B. Each Lender, severally, agrees to lend to
Borrower on the Closing Date its Pro Rata Share of Term Loan B which is in the
aggregate amount of $4,000,000.00. Term Loan B shall be funded in one drawing.
Amounts borrowed under this subsection 2.1(A)(3) and repaid may not be
reborrowed. Borrower shall make principal payments in the amount, of $66,666.67
per month, commencing on the first day of the month immediately following the
date hereof with the balance due on the Termination Date (the "Schedule B
Installment").
(B) Revolving Loan. Each Lender, severally, agrees to lend to
Borrower from time to time its Pro Rata Share of each Revolving Advance. The
aggregate amount of all Revolving Loan Commitments shall not exceed at any time
$39,000,000 as reduced by Section 2.4(B). Amounts borrowed under this
subsection 2.1(B) may be repaid and reborrowed at any time prior to the earlier
of (i) the termination of the Revolving Loan Commitment pursuant to subsection
8.3 or (ii) the Termination Date. Except as otherwise provided herein, no
Lender shall have any obligation to make a Revolving Advance to the extent such
Revolving Advance would cause the Revolving Loan (after giving effect to any
immediate application of the proceeds thereof) to exceed the Maximum Revolving
Loan Amount.
(1) "Maximum Revolving Loan Amount" means, as of any date
of determination, the lesser of (a) the Revolving Loan Commitment(s) of all
Lenders less the Letter of Credit Reserve and (b) the Borrowing Base less the
Letter of Credit Reserve.
(2) "Borrowing Base" means, as of any date of
determination, an amount equal to the sum of (a) 85% of Eligible Accounts plus
(b) the lesser of (i) $30,000,000, and (ii) the Applicable Inventory Advance
Rate and less in each case such reserves as Agent in its reasonable discretion
may elect to establish. As used herein, "Applicable Inventory Advance Rate"
means as of the date hereof 59% of the net amounts of Eligible Inventory. Such
rate of advance shall be reduced by 75 basis points at the expiration of each
successive ninety (90) days thereafter until reduced to 56% of the net amount
of Eligible Inventory.
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(C) Eligible Collateral.
"Eligible Accounts" means, as at any date of determination,
the aggregate of all Accounts that Agent, in its reasonable credit judgment,
deems to be eligible for borrowing purposes. Without limiting the generality of
the foregoing, the Agent may determine that the following Accounts are not
Eligible Accounts:
(1) Accounts which, at the date of issuance of the
respective invoice therefor, were payable more than 60 days after the date of
issuance;
(2) Accounts which remain unpaid for more than 60
days after the due date specified in the original invoice or for more than 90
days after invoice date if no due date was specified;
(3) Accounts which are otherwise eligible with
respect to which the account debtor is owed a credit by Borrower, but only to
the extent of such credit;
(4) Accounts due from an account debtor whose
principal place of business is located outside the United States of America
unless such Account is backed by a letter of credit, in form and substance
acceptable to Agent and issued or confirmed by a bank that is organized under
the laws of the United States of America or a State thereof, that is acceptable
to Agent; provided that such letter of credit has been delivered to Agent as
additional Collateral;
(5) Accounts due from an account debtor which Agent
has notified Borrower does not have a satisfactory credit standing;
(6) Accounts in excess of an aggregate face amount
of $1,000 with respect to which the account debtor is the United States of
America, any state or any municipality, or any department, agency or
instrumentality thereof unless Borrower has, with respect to such Accounts,
complied with the Federal Assignment of Claims Act of 1940 as amended (31
U.S.C. Section 3727 et seq.) or any applicable statute or municipal ordinance
of similar purpose and effect;
(7) Accounts with respect to which the account
debtor is an Affiliate of Borrower or a director, officer, agent, stockholder
or employee of Borrower or any of its Affiliates;
(8) Accounts due from an account debtor if more than
25% of the aggregate amount of Accounts of such account debtor have at the time
remained
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unpaid for more than 60 days after due date or 90 days after the invoice date
if no due date was specified;
(9) Accounts with respect to which there is any
unresolved dispute with the respective account debtor (but only to the extent
of such dispute);
(10) Accounts evidenced by an "instrument" or
"chattel paper" (as defined in the UCC) not in the possession of Agent, on
behalf of Lenders;
(11) Accounts with respect to which Agent, on behalf
of Lenders, does not have a valid, first priority and fully perfected security
interest;
(12) Accounts subject to any Lien except those in
favor of Agent, on behalf of Lenders;
(13) Accounts with respect to which the account
debtor is the subject of any bankruptcy or other insolvency proceeding;
(14) Accounts due from an account debtor to the
extent that such Accounts exceed in the aggregate an amount equal to 20% of the
aggregate of all Accounts at said date;
(15) Accounts with respect to which the account
debtor's obligation to pay is conditional or subject to a repurchase obligation
or right to return or with respect to which the goods or services giving rise
to such Account have not been delivered (or performed, as applicable) and
accepted by such account debtor, including progress xxxxxxxx, xxxx and hold
sales, guarantied sales, sale or return transactions, sales on approval or
consignment sales;
(16) Accounts with respect to which the account
debtor is located in New Jersey, or any other state denying creditors access to
its courts in the absence of a Notice of Business Activities Report or other
similar filing, unless Borrower has either qualified as a foreign corporation
authorized to transact business in such state or has filed a Notice of Business
Activities Report or similar filing with the applicable state agency for the
then current year;
(17) Accounts with respect to which the account
debtor is a creditor of Borrower, provided, however, that any such Account
shall only be ineligible as to that portion of such Account which is less than
or equal to the amount owed by Borrower to such Person.
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"Eligible Inventory" means, as at any date of determination,
the value (determined at the lower of cost or market on a first-in, first-out
basis) of all Inventory owned by Borrower and located in the United States of
America that Agent, in its reasonable credit judgment, deems to be eligible for
borrowing purposes. Without limiting the generality of the foregoing, the Agent
may determine that the following is not Eligible Inventory: (a) work-in-process
that is not readily marketable in its current form; (b) finished goods which do
not meet the specifications of the purchase order for such goods; (c) Inventory
which Agent determines, is unacceptable for borrowing purposes due to age,
quality, type, category and/or quantity; (d) packaging, shipping materials or
supplies consumed in Borrower's business; (e) Inventory with respect to which
Agent, on behalf of Lenders, does not have a valid, first priority and fully
perfected security interest; (f) Inventory with respect to which there exists
any Lien in favor of any Person other than Agent, on behalf of Lenders; (g)
Inventory produced in violation of the Fair Labor Standards Act and subject to
the so-called "hot goods" provisions contained in Title 29 U.S.C. 215 (a)(i) or
any replacement statute; and (h) Inventory located at any location other than
Borrower's principal location, unless a waiver of interest acceptable in form
and substance is delivered to Agent.
(D) Borrowing Mechanics. (1) LIBOR Loans made on any Funding
Date shall be in an aggregate minimum amount of $500,000 and integral multiples
of $100,000 in excess of such amount. (2) On any day when Borrower desires an
advance under this subsection 2.1, Borrower shall give Agent telephonic notice
of the proposed borrowing by 11:00 a.m. Chicago time on the Funding Date of a
Base Rate Loan and three Business Days in advance of the Funding Date of a
LIBOR Loan, which notice (a "Notice of Borrowing") shall specify the proposed
Funding Date (which shall be a Business Day), whether such Loans shall consist
of Base Rate Loans or LIBOR Loans, and, for LIBOR Loans, the Interest Period
applicable thereto. Any such telephonic notice shall be confirmed in writing on
the same day. Neither Agent nor Lender shall incur any liability to Borrower
for acting upon any telephonic notice Agent believes in good faith to have been
given by a duly authorized officer or other person authorized to borrow on
behalf of Borrower or for otherwise acting in good faith under this subsection
2.1(D). Neither Agent nor Lender will be required to make any advance pursuant
to any telephonic notice unless Agent has also received the most recent
Borrowing Base Certificate and all other documents required under Section 3 and
the Reporting Rider hereof by 11:00 a.m. Chicago time on the Funding Date. Each
Advance shall be deposited by wire transfer in immediately available funds in
such account as Borrower may from time to time designate to Agent in writing.
The becoming due of any amount required to be paid under this Agreement or any
of the other Loan Documents as principal, accrued interest and fees shall be
deemed irrevocably to be on automatic request by Borrower for a Revolving
Advance, which shall be a Base Rate Loan on the due date
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of, and in the amount required to pay (as set forth on Agent's books and
records), such principal, accrued interest and fees.
(E) Notes. Borrower shall execute and deliver to each Lender
with appropriate insertions Notes to evidence such Lender's Commitments. In the
event of an assignment under subsection 9.5, Borrower shall, upon surrender of
the assigning Lender's Notes, issue new Notes to reflect the interest held by
the assigning Lender and its Eligible Assignee.
(F) Letters of Credit. The Revolving Loan Commitments may, in
addition to Revolving Advances, be utilized, upon the request of Borrower, for
(i) the issuance of letters of credit by Agent; or with Agent's consent any
Lender, or (ii) the issuance by Agent of risk participations to banks to induce
such banks to issue Bank Letters of Credit for the account of Borrower (each of
(i) and (ii) above a "Lender Letter of Credit"). Each Lender shall be deemed to
have purchased a participation in each Lender Letter of Credit issued on behalf
of Borrower in an amount equal to its Pro Rata Share thereof. In no event shall
any Lender Letter of Credit be issued to the extent that the issuance of such
Lender Letter of Credit would cause the sum of the Letter of Credit Reserve
(after giving effect to such issuance) plus the Revolving Loan to exceed the
lesser of (x) the Borrowing Base and (y) the Revolving Loan Commitment.
(1) Maximum Amount. The aggregate amount of Letter of
Credit Liability with respect to all Lender Letters of Credit outstanding at any
time shall not exceed $2,000,000.
(2) Reimbursement. Borrower shall be irrevocably and
unconditionally obligated forthwith without presentment, demand, protest or
other formalities of any kind, to reimburse Agent or the issuer for any amounts
paid with respect to a Lender Letter of Credit including all fees, costs and
expenses paid to any bank that issues a Bank Letter of Credit. Borrower hereby
authorizes and directs Agent, at Agent's option, to debit Borrower's account (by
increasing the Revolving Loan) in the amount of any payment made with respect to
any Lender Letter of Credit. In the event that Agent elects not to debit
Borrower's account and Borrower fails to reimburse Agent in full on the date of
any payment under a Lender Letter of Credit, Agent shall promptly notify each
Lender of the unreimbursed amount of such payment together with accrued interest
thereon and each Lender, on the next Business Day, shall deliver to Agent an
amount equal to its respective participation in same day funds. The obligation
of each Lender to deliver to Agent an amount equal to its respective
participation pursuant to the foregoing sentence shall be absolute and
unconditional and such remittance shall be made notwithstanding the occurrence
or continuation of an Event of Default or
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Default or the failure to satisfy any condition set forth in Section 3. In the
event any Lender fails to make available to Agent the amount of such Lender's
participation in such Lender Letter of Credit, Agent shall be entitled to
recover such amount on demand from such Lender together with interest at the
Base Rate.
(3) Request for Letters of Credit. Borrower shall give
Agent at least three (3) Business Days prior notice specifying the date a Lender
Letter of Credit is to be issued, identifying the beneficiary and describing the
nature of the transactions proposed to be supported thereby. The notice shall be
accompanied by the form of the letter of credit being requested. Any letter of
credit which Borrower requests must be in such form, be for such amount, contain
such terms and support such transactions as are reasonably satisfactory to
Agent. The expiration date of each Lender Letter of Credit shall be on a date
which is at least 30 days prior to the Termination Date, unless otherwise agreed
to by Agent.
(G) Other Letter of Credit Provisions.
(1) Obligations Absolute. The obligation of Borrower to
reimburse Agent or any Lender for payments made under, and other amounts payable
in connection with, any Lender Letter of Credit shall be unconditional and
irrevocable and shall be paid under all circumstances strictly in accordance
with the terms of this Agreement including, without limitation, the following
circumstances:
(a) any lack of validity or enforceability of any
Lender Letter of Credit, or any other agreement;
(b) the existence of any claim, set-off, defense or
other right which Borrower, any of its Affiliates, Agent or any Lender, on the
one hand, may at any time have against any beneficiary or transferee of any
Lender Letter of Credit (or any Persons for whom any such transferee may be
acting), Agent, any Lender or any other Person, on the other hand, whether in
connection with this Agreement, the transactions contemplated herein or any
unrelated transaction (including any underlying transaction between Borrower or
any of its Affiliates and the beneficiary of the Lender Letter of Credit);
(c) any draft, demand, certificate or any other
document presented under any Lender Letter of Credit is alleged to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect; or
(d) payment under any Lender Letter of Credit against
presentation of a demand, draft or certificate or other document which does not
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comply with the terms of such Lender Letter of Credit; provided that, in the
case of any payment by Agent or a Lender under any Lender Letter of Credit,
Agent or such Lender has not acted with gross negligence or willful misconduct
(as determined by a court of competent jurisdiction) in determining that the
demand for payment under such Lender Letter of Credit complies on its face with
any applicable requirements for a demand for payment under such Lender Letter
of Credit.
(2) Nature of Lender's Duties. As between any Lender that
issues a Lender Letter of Credit (an "Issuing Lender"), on the one hand, and all
Lenders on the other hand, all Lenders assume all risks of the acts and
omissions of, or misuse of any Lender Letter of Credit by the beneficiary
thereof. In furtherance and not in limitation of the foregoing, neither Agent
nor any Issuing Lender shall be responsible: (a) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document by any party
in connection with the application for and issuance of any Lender Letter of
Credit, even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (b) for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any Lender Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (c) for failure of the beneficiary of any
Lender Letter of Credit to comply fully with conditions required in order to
demand payment thereunder; provided that, in the case of any payment under any
such Lender Letter of Credit, any Issuing Lender has not acted with gross
negligence or willful misconduct (as determined by a court of competent
jurisdiction) in determining that the demand for payment under any such Lender
Letter of Credit complies on its face with any applicable requirements for a
demand for payment thereunder; (d) for errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (e) for errors in
interpretation of technical terms; (f) for any loss or delay in the transmission
or otherwise of any document required in order to make a payment under any such
Lender Letter of Credit; (g) for the credit of the proceeds of any drawing under
any such Lender Letter of Credit; and (h) for any consequences arising from
causes beyond the control of Agent or any Lender as the case may be.
(3) Liability. In furtherance and extension of and not in
limitation of, the specific provisions herein above set forth, any action taken
or omitted by Agent or any Lender under or in connection with any Lender Letter
of Credit, if taken or omitted in good faith, shall not put Agent or any Lender
under any resulting liability to Borrower or any other Lender.
(H) Availability of a Lender's Pro Rata Share.
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(1) Unless Agent receives written notice from a Lender on
or prior to any Funding Date that such Lender will not make available to Agent
as and when required such Lender's Pro Rata Share of any requested Loan or
Advance, Agent may assume that each Lender will make such amount available to
Agent in immediately available funds on the Funding Date and Agent may (but
shall not be so required), in reliance upon such assumption, make available to
Borrower on such date a corresponding amount.
(2) A Defaulting Lender shall pay interest at the Federal
Funds Effective Rate on the Defaulted Amount from the Business Day following the
applicable Funding Date of such Defaulted Amount until the date such Defaulted
Amount is paid to Agent. A notice of Agent submitted to any Lender with respect
to amounts owing under this subsection shall be conclusive, absent manifest
error. If such amount is not paid when due to Agent, Agent, at its option, may
notify Borrower of such failure to fund and, upon demand by Agent, Borrower
shall pay the unpaid amount to Agent for Agent's account, together with interest
thereon for each day elapsed since the date of such borrowing, at a rate per
annum equal to the interest rate applicable at the time to the Loan made by the
other Lenders on such Funding Date. The failure of any Lender to make available
any portion of its Commitment on any Funding Date or to fund its participation
in a Lender Letter of Credit shall not relieve any other Lender of any
obligation hereunder to fund such Lender's Commitment on such Funding Date or to
fund any such participation, but no Lender shall be responsible for the failure
of any other Lender to honor its Commitment on any Funding Date or to fund any
participation to be funded by any other Lender.
(3) Agent shall not be obligated to transfer to a
Defaulting Lender any payment made by Borrower to Agent or any amount otherwise
received by Agent for application to the Obligations nor shall a Defaulting
Lender be entitled to the sharing of any interest, fees or payments hereunder.
(4) For purposes of voting or consenting to matters with
respect to (i) the Loan Documents or (ii) any other matter concerning the Loans,
a Defaulting Lender shall be deemed not to be a "Lender" and such Lender's
Commitments and outstanding Loans and Advances shall be deemed to be zero.
2.2 Interest.
(A) Rate of Interest. The Loans and all other Obligations
shall bear interest from the date such Loans are made or such other Obligations
become due to the date paid at a rate per annum equal to (i) in the case of
Base Rate Loans and
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Obligations for which no other interest rate is specified, the Base Rate plus
(a) 0% with respect to the Revolving Loan and other Obligations for which no
other interest rate is specified, (b) 0.50% with respect to Term Loan A-1 and
A-2 and (c) 0.75% with respect to Term Loan B, and (ii) in the case of LIBOR
Loans, LIBOR plus (a) 2.25%) with respect to the Revolving Loan, (b) 2.75% with
respect to Term Loan A-1 and A-2 and (c) 3.00% with respect to Term Loan B
(collectively the "Interest Rate"). Subject to the provisions of subsection
2.1(D), Borrower shall designate to Agent whether a Loan shall be a Base Rate
or LIBOR Rate Loan at the time a Notice of Borrowing is given pursuant to
subsection 2.1(D). Such designation by Borrower may be changed from time to
time pursuant to subsection 2.2(F). If on any day a Loan or a portion of any
Loan is outstanding with respect to which notice has not been delivered to
Agent in accordance with the terms of this Agreement specifying the basis for
determining the rate of interest or if LIBOR has been specified and no LIBOR
quote is available, then for that day that Loan or portion thereof shall bear
interest determined by reference to the Base Rate.
After the occurrence and during the continuance of an Event of Default
(i) the Loans and all other Obligations shall, at the option of Requisite
Lenders, bear interest at a rate per annum equal to 2% plus the applicable
Interest Rate (the "Default Rate"), (ii) each LIBOR Loan shall automatically
convert to a Base Rate Loan at the end of any applicable Interest Period and
(iii) no Loans may be converted to LIBOR Loans.
(B) Computation and Payment of Interest. Interest on the
Loans and all other Obligations shall be computed on the daily principal
balance on the basis of a 360 day year for the actual number of days elapsed.
In computing interest on any Loan, the date of funding of the Loan or the first
day of an Interest Period applicable to such Loan or, with respect to a Base
Rate Loan being converted from a LIBOR Loan, the date of conversion of such
LIBOR Loan to such Base Rate Loan, shall be included; and the date of payment
of such Loan or the expiration date of an Interest Period applicable to such
Loan, or with respect to a Base Rate Loan being converted to a LIBOR Loan, the
date of conversion of such Base Rate Loan to such LIBOR Loan, shall be
excluded; provided that if a Loan is repaid on the same day on which it is
made, one day's interest shall be paid on that Loan. Interest on all Base Rate
Loans and all other Obligations is payable in arrears on the first day of each
month, commencing with April 1, 1999, and on the maturity of such Loans,
whether by acceleration or otherwise. Interest on LIBOR Loans shall be payable
on the last day of the applicable Interest Period, unless the Interest Period
is greater than three (3) months, in which case interest will be payable on the
last day of each three (3) month interval. In addition, interest on LIBOR Loans
is due on the maturity of such Loans, whether by acceleration or otherwise.
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(C) Interest Laws. Notwithstanding any provision to the
contrary contained in this Agreement or any other Loan Document, Borrower shall
not be required to pay, and neither Agent nor any Lender shall be permitted to
collect, any amount of interest in excess of the maximum amount of interest
permitted by applicable law ("Excess Interest"). If any Excess Interest is
provided for or determined by a court of competent jurisdiction to have been
provided for in this Agreement or in any other Loan Document, then in such
event: (1) the provisions of this subsection shall govern and control; (2)
neither Borrower nor any other Loan Party shall be obligated to pay any Excess
Interest; (3) any Excess Interest that Agent or any Lender may have received
hereunder shall be, at such Lender's option, (a) applied as a credit against
the outstanding principal balance of the Obligations or accrued and unpaid
interest (not to exceed the maximum amount permitted by law), (b) refunded to
the payor thereof, or (c) any combination of the foregoing; (4) the interest
rate(s) provided for herein shall be automatically reduced to the maximum
lawful rate allowed from time to time under applicable law (the "Maximum
Rate"), and this Agreement and the other Loan Documents shall be deemed to have
been and shall be, reformed and modified to reflect such reduction; and (5)
neither Borrower nor any Loan Party shall have any action against Agent or any
Lender for any damages arising out of the payment or collection of any Excess
Interest. Notwithstanding the foregoing, if for any period of time interest on
any Obligations is calculated at the Maximum Rate rather than the applicable
rate under this Agreement, and thereafter such applicable rate becomes less
than the Maximum Rate, the rate of interest payable on such Obligations shall
remain at the Maximum Rate until each Lender shall have received the amount of
interest which such Lender would have received during such period on such
Obligations had the rate of interest not been limited to the Maximum Rate
during such period.
(D) Conversion or Continuation. Subject to the provisions of
this subsection 2.2(D), Borrower shall have the option to (1) convert at any
time all or any part of outstanding Loans equal to $500,000 and integral
multiples of $100,000 in excess of that amount from Base Rate Loans to LIBOR
Loans or (2) upon the expiration of any Interest Period applicable to a LIBOR
Loan, to (a) continue all or any portion of such LIBOR Loan equal to $500,000
and integral multiplies of $100,000 in excess of that amount as a LIBOR Loan or
(b) convert all or any portion of such LIBOR Loan to a Base Rate Loan. The
succeeding Interest Period(s) of such continued or converted Loan commence on
the last day of the Interest Period of the Loan to be continued or converted;
provided that no outstanding Loan may be continued as, or be converted into, a
LIBOR Loan, when any Event of Default or Default has occurred and is
continuing.
Borrower shall deliver a notice of conversion/continuation to
Agent no later than 11:00 a.m. Chicago standard time at least 3 Business Days
in advance of
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the proposed conversion/continuation date ("Notice of Conversion/Contin-
uation"). A Notice of Conversion/Continuation shall certify: (1) the proposed
conversion/continuation date (which shall be a Business Day); (2) the amount of
the Loan to be converted/continued; (3) the nature of the proposed
conversion/continuation; (4) in the case of conversion to, or a continuation of,
a LIBOR Loan, the requested Interest Period; and (5) that no Default or Event of
Default has occurred and is continuing or would result from the proposed
conversion/continuation.
In lieu of delivering the Notice of Conversion/Continuation,
Borrower may give Agent telephonic notice by the required time of any proposed
conversion/continuation under this subsection 2.2(D); provided that such notice
shall be promptly confirmed in writing by delivery of a Notice of
Conversion/Continuation to Agent on or before the proposed
conversion/continuation date.
Neither Agent nor any Lender shall incur any liability to
Borrower in acting upon any telephonic notice referred to above that Agent
believes in good faith to have been given by an officer or other person
authorized to act on behalf of Borrower or for otherwise acting in good faith
under this subsection 2.2(D).
2.3 Fees.
(A) Unused Line Fee. Borrower shall pay to Agent, for the
benefit of Lenders, a fee in an amount equal to the Revolving Loan Commitment
less the sum of (i) the average daily balance of each of the Revolving Loan
plus, (ii) the average daily face amount of the Letter of Credit Reserve during
the preceding month, multiplied by .441% per annum, such fee to be calculated
on the basis of a 360 day year for the actual number of days elapsed and to be
payable monthly in arrears on the first day of each month following the Closing
Date.
(B) Letter of Credit Fees. Borrower shall pay to Agent a fee
with respect to the Lender Letters of Credit for the benefit of Lenders in the
amount of the average daily amount of Letter of Credit Liability outstanding
during such month multiplied by 2.00% per annum. Such fee will be calculated on
the basis of a 360 day year for the actual number of days elapsed and will be
payable monthly in arrears on the first day of each month. Borrower shall also
reimburse Agent for any and all fees and expenses, if any, paid by Agent or any
Lender to the issuer of any Bank Letter of Credit.
(C) Prepayment Fees. If Borrower voluntarily prepays the
Obligations in full or, in the case of any voluntary prepayment of the Term
Loans,
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in part (other than voluntary prepayments of the Revolving Loan which do not
terminate the Revolving Loan Commitment), Borrower, at the time of prepayment,
shall pay to Agent for the benefit of Lenders, as compensation for the costs of
being prepared to make funds available to Borrower under this Agreement, and not
as a penalty, an amount determined by multiplying the percentage set forth below
by (1) in the case of a prepayment in full of the Obligations, the sum of the
Term Loans at the date of such prepayment plus the amount of the Revolving Loan
Commitment, or (2) in the case of a prepayment of the Term Loans only, in whole
or in part, the amount of such prepayment: 1% upon a prepayment during any Loan
Year, provided, however, that no such amount shall be payable with respect to a
prepayment made during the fourth or fifth Loan Years, if and only if such
prepayment is made from the proceeds of a secondary public offering of the
capital stock of Borrower.
(D) Audit Fees. Borrower agrees to pay to Agent for its own
account an audit fee for each inspection equal to $750 per internal auditor per
day or any portion thereof, excluding all full days spent by such auditors
traveling to or from Borrower's locations together with all out of pocket
expenses. Notwithstanding the foregoing, in the event Agent uses a firm or
individual(s) who are not employees of Agent to perform audits of Borrower's
operations Borrower shall pay all fees and expenses of such firms or
individual(s) performing such services.
(E) Other Fees and Expenses. Borrower shall pay to Agent, for
its own account, all charges for returned items and all other bank charges
incurred by Agent, as well as Agent's standard wire transfer charges for each
wire transfer made under this Agreement.
2.4 Payments and Prepayments.
(A) Manner and Time of Payment. In its sole discretion, Agent
may elect to honor the automatic requests by Borrower for Revolving Advances
for all principal, interest, fees and any other amounts due hereunder on their
applicable due dates pursuant to subsection 2.1 (D), and the proceeds of each
such Advance, if made, shall be applied as a direct payment of the relevant
Obligation. If Agent elects to xxxx Borrower for any amount due hereunder, such
amount shall be immediately due and payable with interest thereon as provided
herein. All payments made by Borrower with respect to the Obligations shall be
made without deduction, defense, setoff or counterclaim. All payments to Agent
hereunder shall, unless otherwise directed by Agent, be made to Agent's Account
or in accordance with subsection 4.26. For the purpose of calculating interest
on the Obligations, funds shall be deemed received on the first Business Day
following the day such proceeds were received.
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(B) Mandatory Prepayments.
(1) Overadvance. At any time that the Revolving Loan
exceeds the Maximum Revolving Loan Amount, Borrower shall, immediately repay the
Revolving Loan to the extent necessary to reduce the aggregate principal balance
to an amount equal to or less than the Maximum Revolving Loan Amount.
(2) Proceeds of Asset Dispositions. Immediately upon
receipt by Borrower or any of its Subsidiaries of proceeds of any Asset
Disposition (in one or a series of related transactions), which proceeds exceed
$10,000 (it being understood that if the proceeds exceed $10,000, the entire
amount and not just the portion above $10,000 shall be subject to this
subsection 2.4(B)(2)), Borrower shall prepay the Obligations in an amount equal
to such proceeds. All such prepayments shall first be applied in payment of
Scheduled Installments of Term Loan A-1 and A-2, and shall then be applied in
payment of Scheduled Installments of Term Loan B, each in inverse order of
maturity. If Borrower reasonably expects the proceeds of any Asset Disposition
to be reinvested within 180 days to repair or replace such assets with like
assets, Borrower shall deliver the proceeds to Agent to be applied to the
Revolving Loan and Agent shall establish a reserve against available funds for
borrowing purposes under the Revolving Loan for such amount, until such time as
such proceeds have been re-borrowed or applied to other Obligations as set forth
herein. Borrower may, so long as no Default or Event of Default shall have
occurred and be continuing, reborrow such proceeds only for such repair or
replacement. If Borrower fails to reinvest such proceeds within 180 days,
Borrower hereby authorizes Lenders to make a Revolving Advance to repay the
Obligations in the manner set forth in this subsection 2.4(B)(2).
(3) Prepayments from Excess Cash Flow. Within 120 days
after the end of each Fiscal Year, Borrower shall prepay the Obligations in an
amount equal to 50% of Excess Cash Flow for such prior Fiscal Year calculated on
the basis of the audited financial statements for such Fiscal Year delivered to
Agent and Lenders pursuant to the Reporting Rider. All such prepayments from
Excess Cash Flow shall be applied to the scheduled Installments of the Term
Loans in the same manner set forth in subsection 2.4(B) (2). Concurrently with
the making of any such payment, Borrower shall deliver to Agent and Lenders a
certificate of Borrower's chief executive officer or chief financial officer
demonstrating its calculation of the amount required to be paid.
(C) Voluntary Prepayments and Repayments. Except as provided
in subsection 2.4(B), Borrower's Obligations may only be prepaid or repaid in
full and not in part. Borrower may, at any time upon not less than three
Business Days
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prior notice to Agent, prepay the Term Loans or terminate the Revolving Loan
Commitment; provided, however, the Revolving Loan Commitment may not be
terminated by Borrower until all Loans are paid in full. Upon termination of the
Revolving Loan Commitment, Borrower shall cause Agent and each Lender to be
released from all liability under any Lender Letters of Credit or, at Agent's
option, Borrower will deposit cash collateral with Agent in an amount equal to
105% of the Letter of Credit Liability that will remain outstanding after such
termination.
(D) Payments on Business Days. Whenever any payment to be
made hereunder shall be stated to be due on a day that is not a Business Day,
the payment may be made on the next succeeding Business Day and such extension
of time shall be included in the computation of the amount of interest or fees
due hereunder.
2.5 Term of this Agreement. This Agreement shall be effective
until the earlier of (a) 5 years from closing date (the "Original Term") and (b)
the acceleration of all Obligations pursuant to subsection 8.3; provided
however, so long as the Obligations have not been accelerated pursuant to
subsection 8.3, the Original Term shall be extended automatically from year to
year by one additional year thereafter (each such year a "Renewal Term"), unless
Borrower gives Agent or any Lender gives Borrower and Agent not less than 60
days prior written notice of its intention to terminate at the end of the
Original Term or the then effective Renewal Term, as appropriate (the
"Termination Date"). The Commitments shall terminate (unless earlier terminated
pursuant to the terms hereunder) upon the Termination Date and all Obligations
shall become immediately due and payable without notice or demand.
Notwithstanding any termination, until all Obligations have been fully paid and
satisfied, Agent, on behalf of Lenders, shall be entitled to retain security
interests in and liens upon all Collateral, and even after payment of all
Obligations hereunder, Borrower's obligation to indemnify Agent and each Lender
in accordance with the terms hereof shall continue.
2.6 Statements. Agent shall render a monthly statement of account
to Borrower within 20 days after the end of each month. Such statement of
account shall constitute an account stated unless Borrower makes written
objection thereto within 30 days from the date such statement is mailed to
Borrower. Agent shall record in its books and records, including computer
records, the principal amount of the Loans owing to each Lender from time to
time. Agent's books and records including computer records, shall constitute
presumptive evidence, absent manifest error, of the accuracy of the information
contained therein. Failure by Agent to make any such notation or record shall
not affect the obligations of Borrower[s] to Lenders with respect to the Loans.
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2.7 Grant of Security Interest. To secure the payment and
performance of the Obligations, including all renewals, extensions,
restructurings and refinancings of any or all of the Obligations, Borrower
hereby grants to Agent, on behalf of Lenders, a continuing security interest,
lien and mortgage in and to all right, title and interest of Borrower in all of
Borrower's personal and real property, whether now owned or existing or
hereafter acquired or arising and regardless of where located (all being
collectively referred to as the "Collateral") including, without limitation, (A)
Accounts, and all guaranties and security therefor, and all goods and rights
represented thereby or arising therefrom including the rights of stoppage in
transit, replevin and reclamation; (B) Inventory, (C) general intangibles (as
defined in the UCC); (D) documents (as defined in the UCC) or other receipts
covering, evidencing or representing goods; (E) instruments (as defined in the
UCC); (F) chattel paper (as defined in the UCC); (G) Equipment; (H) Mortgaged
Property; (I) investment property (as defined in the UCC) including, without
limitation, all securities (certificated and uncertificated) security accounts,
security entitlements, commodity contracts and commodity accounts; (J)
Intellectual Property; (K) all deposit accounts of Borrower maintained with any
bank or financial institution; (L) all cash and other monies and property of
Borrower in the possession or under the control of Agent, any Lender or any
participant; (M) all books, records, ledger cards, files, correspondence,
computer programs, tapes, disks and related data processing software that at any
time evidence or contain information relating to any of the property described
above or are otherwise necessary or helpful in the collection thereof or
realization thereon; and (N) proceeds and products of all or any of the property
described above, including, without limitation, the proceeds of any insurance
policies covering any of the above described property.
2.8 Capital Adequacy and Other Adjustments. In the event Agent
or any Lender shall have determined that the adoption after the date hereof of
any law, treaty, governmental (or quasi-governmental) rule, regulation,
guideline or order regarding capital adequacy, reserve requirements or similar
requirements or compliance by Agent or such Lender or any corporation
controlling Agent or such Lender with any request or directive regarding capital
adequacy, reserve requirements or similar requirements (whether or not having
the force of law and whether or not failure to comply therewith would be
unlawful) from any central bank or governmental agency or body having
jurisdiction does or shall have the effect of increasing the amount of capital,
reserves or other funds required to be maintained by Agent or such Lender or any
corporation controlling Agent or such Lender and thereby reducing the rate of
return on Agent's or such Lender's or such corporation's capital as a
consequence of its obligations hereunder, then Borrower shall within 15 days
after notice and demand from such Lender (with a copy to Agent) or Agent
(together with the certificate referred to in the next sentence) pay to Agent or
such
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Lender additional amounts sufficient to compensate Agent or such Lender for such
reduction. A certificate as to the amount of such cost and showing the basis of
the computation of such cost submitted by Agent or any Lender to Borrower shall,
absent manifest error, be final, conclusive and binding for all purposes.
2.9 Taxes.
(A) No Deductions. Any and all payments or reimbursements
made hereunder shall be made free and clear of and without deduction for any
and all taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto; excluding, however, the following: taxes
imposed on the net income of any Lender or Agent by the jurisdiction under the
laws of which Agent or such Lender is organized or doing business or any
political subdivision thereof and taxes imposed on its net income by the
jurisdiction of Agent's or such Lender's applicable lending office or any
political subdivision thereof (all such taxes, levies, imposts, deductions,
charges or withholdings and all liabilities with respect thereto excluding such
taxes imposed on net income, herein "Tax Liabilities"). If Borrower shall be
required by law to deduct any such Tax Liabilities from or in respect of any
sum payable hereunder to Agent or any Lender, then the sum payable hereunder
shall be increased as may be necessary so that, after making all required
deductions, Agent or such Lender receives an amount equal to the sum it would
have received had no such deductions been made.
(B) Changes in Tax Laws. In the event that, subsequent to the
Closing Date, (i) any changes in any existing law, regulation, treaty or
directive or in the interpretation or application thereof, (ii) any new law,
regulation, treaty or directive enacted or any interpretation or application
thereof, or (iii) compliance by Lender with any request or directive (whether
or not having the force of law) from any governmental authority, agency or
instrumentality:
(1) does or shall subject Agent or any Lender to any tax
of any kind whatsoever with respect to this Agreement, the other Loan Documents
or any Loans made or Lender Letters of Credit issued hereunder, or change the
basis of taxation of payments to Agent or such Lender of principal, fees,
interest or any other amount payable hereunder (except for net income taxes, or
franchise taxes imposed in lieu of net income taxes, imposed generally by
federal, state or local taxing authorities with respect to interest or
commitment or other fees payable hereunder or changes in the rate of tax on the
overall net income of Agent or such Lender); or
(2) does or shall impose on Agent or any Lender any other
condition or increased cost in connection with the transactions contemplated
hereby
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or participations herein; and the result of any of the foregoing is to increase
the cost to Agent or such Lender of issuing any Lender Letter of Credit or
making or continuing any Loan hereunder, as the case may be, or to reduce any
amount receivable hereunder; then, in any such case, Borrower shall promptly pay
to Agent or such Lender, upon its demand, any additional amounts necessary to
compensate Agent or such Lender, on an after-tax basis, for such additional cost
or reduced amount receivable, as determined by Agent or such Lender with respect
to this Agreement or the other Loan Documents. If Agent or any Lender becomes
entitled to claim any additional amounts pursuant to this subsection, it shall
promptly notify Borrower of the event by reason of which Agent or such Lender
has become so entitled (with any such Lender concurrently notifying Agent). A
certificate as to any additional amounts payable pursuant to the foregoing
sentence submitted by Agent or any Lender to Borrower shall, absent manifest
error, be final, conclusive and binding for all purposes.
(C) Foreign Lenders. Each Lender organized under the laws of
a jurisdiction outside the United States (a "Foreign Lender") as to which
payments to be made under this Agreement are exempt from United States
withholding tax or are subject to United States withholding tax at a reduced
rate under an applicable statute or tax treaty shall provide to Borrower and
Agent (i) a properly completed and executed Internal Revenue Service Form 4224
or Form 1001 or other applicable form, certificate or document prescribed by
the Internal Revenue Service of the United States certifying as to such Foreign
Lender's entitlement to such exemption or reduced rate of withholding with
respect to payments to be made to such Foreign Lender under this Agreement, (a
"Certificate of Exemption"), or (ii) a letter from any such Foreign Lender
stating that it is not entitled to any such exemption or reduced rate of
withholding (a "Letter of Non-Exemption"). Prior to becoming a Lender under
this Agreement and within 15 days after a reasonable written request of
Borrower or Agent from time to time thereafter, each Foreign Lender that
becomes a Lender under this Agreement shall provide a Certificate of Exemption
or a Letter of Non-Exemption to Borrower and Agent.
If a Foreign Lender is entitled to an exemption with respect
to payments to be made to such Foreign Lender under this Agreement (or to a
reduced rate of withholding) and does not provide a Certificate of Exemption to
Borrower and Agent within the time periods set forth in the preceding
paragraph, Borrower shall withhold taxes from payments to such Foreign Lender
at the applicable statutory rates and Borrower shall not be required to pay any
additional amounts as a result of such withholding; provided, however, that all
such withholding shall cease upon delivery by such Foreign Lender of a
Certificate of Exemption to Borrower and Agent.
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2.10 Required Termination and Prepayment. If on any date any
Lender shall have reasonably determined (which determination shall be final and
conclusive and binding upon all parties) that the making or continuation of its
LIBOR Loans has become unlawful or impossible by compliance by Lender in good
faith with any law, governmental rule, regulation or order (whether or not
having the force of law and whether or not failure to comply therewith would be
unlawful), then, and in any such event, that Lender shall promptly give notice
(by telephone confirmed in writing) to Borrower and Agent of that determination.
Subject to prior withdrawal of a Notice of Borrowing or a Notice of
Conversion/Continuation or prepayment of LIBOR Loans as contemplated by
subsection 2.12, the obligation of Lender to make or maintain its LIBOR Loans
during any such period shall be terminated at the earlier of the termination of
the Interest Period then in effect or when required by law and Borrower shall no
later than the termination of the Interest Period in effect at the time any such
determination pursuant to this subsection 2.10 is made or, earlier when required
by law, repay or prepay LIBOR Loans together with all interest accrued thereon
or convert LIBOR Loans to Base Rate Loans.
2.11 Optional Prepayment/Replacement of Agent or Lenders in
Respect of Increased Costs. Within 15 days after receipt by Borrower of
written notice and demand from Agent or any Lender (an "Affected Lender") for
payment of additional costs as provided in subsection 2.8 or subsection 2.9,
Borrower may, at its option, notify Agent and such Affected Lender of its
intention to do one of the following:
(a) Borrower may obtain, at Borrower's expense, a replacement
Lender ("Replacement Lender") for such Affected Lender, which Replacement
Lender shall be reasonably satisfactory to Agent. In the event Borrower obtains
a Replacement Lender within 90 days following notice of its intention to do so,
the Affected Lender shall sell and assign its Loans and Commitments to such
Replacement Lender provided, that Borrower has reimbursed such Affected Lender
for its increased costs for which it is entitled to reimbursement under this
Agreement through the date of such sale and assignment; or
(b) Borrower may prepay in full all outstanding Obligations
owed to such Affected Lender and terminate such Affected Lender's Commitments.
Borrower shall, within 90 days following notice of its intention to do so,
prepay in full all outstanding Obligations owed to such Affected Lender,
including such Affected Lender's increased costs for which it is entitled to
reimbursement under this Agreement through the date of such prepayment, but
excluding the prepayment fee referenced in subsection 2.3(C) and terminate such
Affected Lender's Commitments.
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2.12 Compensation. Borrower shall compensate Lender, upon written
request by Lender (which request shall set forth in reasonable detail the basis
for requesting such amounts and which shall, absent manifest error, be
conclusive and binding upon all parties hereto), for all reasonable losses,
expenses and liabilities including, without limitation, any loss sustained by
Lender in connection with the re-employment of such funds: (i) if for any
reason (other than a default by Lender) a borrowing of any LIBOR Loan does not
occur on a date specified therefor in a Notice of Borrowing, a Notice of
Conversion/Continuation or a telephonic request for borrowing or
Conversion/Continuation; (ii) if any prepayment of any of its LIBOR Loans
occurs on a date that is not the last day of an Interest Period applicable to
that Loan; (iii) if any prepayment of any of its LIBOR Loans is not made on any
date specified in a notice of prepayment given by Borrower; or (iv) as a
consequence of any other default by Borrower to repay its LIBOR Loans when
required by the terms of this Agreement; provided that during the period while
any such amounts have not been paid, Lender shall reserve an equal amount from
amounts otherwise available to be borrowed under the Revolving Loan.
2.13 Booking of LIBOR Loans. Each Lender may make, carry or
transfer LIBOR Loans at, to, or for the account of, any of its branch offices or
the office of an affiliate of Lender.
2.14 Assumptions Concerning Funding of LIBOR Loans. Calculation
of all amounts payable to Lender under subsection 2.12 shall be made as though
each Lender had actually funded its relevant LIBOR Loan through the purchase of
a LIBOR deposit bearing interest at LIBOR in an amount equal to the amount of
that LIBOR Loan and having maturity comparable to the relevant Interest Period
and through the transfer of such LIBOR deposit from an offshore office to a
domestic office in the United States of America; provided, however, that each
Lender may fund each of its LIBOR Loans in any manner it sees fit and the
foregoing assumption shall be utilized only for the calculation of amounts
payable under subsection 2.12.
SECTION 3. CONDITIONS TO LOANS
The obligations of Agent and each Lender to make Loans and the
obligation of Agent or any Lender to issue Lender Letters of Credit on the
Closing Date and on each Funding Date are subject to satisfaction of all of the
terms and conditions set forth in this Agreement and in the Conditions Rider,
attached hereto and the accuracy of all the representations and warranties of
Borrower and the other Loan Parties set forth herein and in the other Loan
Documents.
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SECTION 4. BORROWER'S REPRESENTATIONS, WARRANTIES AND
CERTAIN COVENANTS
To induce Agent and each Lender to enter into the Loan Documents, to
make and to continue to make Loans and to issue and to continue to issue Lender
Letters of Credit, Borrower represents, warrants and covenants to Agent and
each Lender that the following statements are and will be true, correct and
complete and, unless specifically limited, shall remain so for so long as any
of the Commitments hereunder shall be in effect and until payment in full of
all Obligations:
4.1 Organization, Powers, Capitalization.
(A) Organization and Powers. Each of the Loan Parties is a
corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation and qualified to do business in all
states where such qualification is required except where failure to be so
qualified could not reasonably be expected to have a Material Adverse Effect.
Each of the Loan Parties has all requisite corporate power and authority to own
and operate its properties, to carry on its business as now conducted and
proposed to be conducted and to enter into each Loan Document.
(B) Capitalization. The authorized capital stock of each of
the Loan Parties and its respective Subsidiaries is as set forth on Schedule
4.1(B) including, all preemptive or other outstanding rights, options,
warrants, conversion rights or similar agreements or understandings for the
purchase or acquisition from any Loan Party of any shares of capital stock or
other securities of any such entity. All issued and outstanding shares of
capital stock of each of the Loan Parties are duly authorized and validly
issued, fully paid, nonassessable, free and clear of all Liens other than those
in favor of Agent for the benefit of Lenders, and such shares were issued in
compliance with all applicable state and federal laws concerning the issuance
of securities. Each Loan Party will promptly notify Lender of any change in its
ownership or corporate structure.
4.2 Authorization of Borrowing, No Conflict. Borrower has the
corporate power and authority to incur the Obligations and to grant security
interests in the Collateral. On the Closing Date and Term Loan A-2 Closing
Date, the execution, delivery and performance of the Loan Documents by each
Loan Party signatory thereto will have been duly authorized by all necessary
corporate and shareholder action. The execution, delivery and performance by
each Loan Party of each Loan Document to which it is a party and the
consummation of the transactions contemplated by the Loan Documents by each
Loan Party do not contravene any applicable law, the corporate charter or
bylaws of any Loan Party or any agreement
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or order by which any Loan Party or any Loan Party's property is bound. The Loan
Documents are the legally valid and binding obligations of the applicable Loan
Parties respectively, each enforceable against the Loan Parties, as applicable,
in accordance with their respective terms.
4.3 Financial Condition. All financial statements concerning
Borrower and its Subsidiaries furnished by or on behalf of Borrower or its
Subsidiaries to Agent or any Lender pursuant to this Agreement have been
prepared in accordance with GAAP consistently applied throughout the periods
involved (except as disclosed therein) and present fairly the financial
condition of the Persons covered thereby as at the dates thereof and the results
of their operations for the periods then ended. The Pro Forma was prepared by
Borrower based on the unaudited and consolidated balance sheet of Borrower dated
November 30, 1998. The Projections delivered by Borrower will be prepared in
light of the past operations of the business of Borrower and its Subsidiaries,
and such Projections will represent the good faith estimate of Borrower and its
senior management concerning the most probable course of its business as of the
date such Projections are delivered.
4.4 Indebtedness and Liabilities. As of the Closing Date and the
Term Loan A-2 Closing Date, neither Borrower nor any of its Subsidiaries has (a)
any Indebtedness except as reflected on the Pro Forma; or (b) any Liabilities
other than as reflected on the Pro Forma or as incurred in the ordinary course
of business following the date of the Pro Forma. Borrower shall promptly deliver
copies of all notices given or received by Borrower and any of its Subsidiaries
with respect to noncompliance with any term or condition related to any
Indebtedness, and shall promptly notify Agent of any potential or actual Event
of Default with respect to any Indebtedness.
4.5 Account Warranties and Covenants. Except as otherwise
disclosed to Agent in writing, as to each Account that, at the time of its
creation, the Account is a valid, bona fide account, representing an undisputed
indebtedness incurred by the named account debtor for goods actually sold and
delivered or for services completely rendered; there are no setoffs, offsets or
counterclaims, genuine or otherwise, against the Account; the Account does not
represent a sale to an Affiliate or a consignment, sale or return or a xxxx and
hold transaction; no agreement exists permitting any deduction or discount
(other than the discount stated on the invoice); Borrower is the lawful owner of
the Account and has the right to assign the same to Agent, for the benefit of
Lenders; the Account is free of all security interests, liens and encumbrances
other than those in favor of Agent, on behalf of Lenders, and the Account is due
and payable in accordance with its terms. Borrower shall, at its own expense:
(a) cause all invoices evidencing Accounts and all copies thereof to bear a
notice that such invoices are payable to the lockboxes
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established in accordance with subsection 4.26 and (b) use its best efforts to
assure prompt payment of all amounts due or to become due under the Accounts. No
credits or allowances will be issued, granted or allowed by Borrower to
customers and no returns will be accepted without Agent's prior written consent;
provided, that until Agent notifies Borrower to the contrary, Borrower may
presume consent. Borrower will immediately notify Agent in the event that a
customer alleges any dispute or claim with respect to an Account in an amount in
excess of $10,000.00 or of any other circumstances known to Borrower that may
impair the validity or collectibility of such an Account. Agent shall have the
right, at any time or times hereafter, to verify the validity, amount or any
other matter relating to an Account, by mail, telephone or in person. After the
occurrence of a Default or an Event of Default, Borrower shall not, without the
prior consent of Agent, adjust, settle or compromise the amount or payment of
any Account, or release wholly or partly any customer or obligor thereof, or
allow any credit or discount thereon.
4.6 Names and Locations. Schedule 4.6 sets forth all names, trade
names, fictitious names and business names under which Borrower currently
conducts business or has at any time during the past five years conducted
business and the name of any entity which Borrower has acquired in whole or in
part or from whom Borrower has acquired a significant amount of assets within
the past five years and sets forth the location of Borrower's principal place
of business, the location of Borrower's books and records, the location of all
other offices of Borrower and all Collateral locations, and such locations are
Borrower's sole locations for its business and the Collateral. Borrower and
each of its Subsidiaries will give Agent at least 30 days advance written
notice of: (a) any change of name or of any new trade name or fictitious
business name, (b) change of principal place of business, (c) any change in the
location of such party's books and records or the Collateral, or (d) any new
location for such Person's books and records or the Collateral.
4.7 Title to Properties; Liens. Borrower and each of its
Subsidiaries has good, sufficient and legal title, to all of its respective
material properties and assets, in each case, free and clear of all Liens except
Permitted Encumbrances.
4.8 Litigation; Adverse Facts. There are no judgments outstanding
against any Loan Party or affecting any property of any Loan Party nor is there
any action, charge, claim, demand, suit, proceeding, petition, governmental
investigation or arbitration now pending or, to the best knowledge of Borrower
after due inquiry, threatened against or affecting any Loan Party or any
property of any Loan Party which could reasonably be expected to result in any
Material Adverse Effect. Promptly upon any officer of Borrower or its
Subsidiaries obtaining knowledge of (a) the institution of any action, suit,
proceeding, governmental investigation or arbitration against or affecting any
Loan Party or any property of
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any Loan Party not previously disclosed by Borrower to Agent or (b) any material
development in any action, suit, proceeding, governmental investigation or
arbitration at any time pending against or affecting any Loan Party or any
property of any Loan Party which could reasonably be expected to have a material
Adverse Effect, Borrower will promptly give notice thereof to Agent and provide
such other information as may be reasonably available to them to enable Agent
and its counsel to evaluate such matter.
4.9 Payment of Taxes. All material tax returns and reports of
Borrower and each of its Subsidiaries required to be filed by any of them have
been timely filed and are complete and accurate in all material respects. All
taxes, assessments, fees and other governmental charges which are due and
payable by Borrower and each of its Subsidiaries have been paid when due;
provided that no such tax need be paid if Borrower or one of its Subsidiaries is
contesting same in good faith by appropriate proceedings promptly instituted and
diligently conducted and if Borrower or such Subsidiary has established
appropriate reserves as shall be required in conformity with GAAP. As of the
Closing Date, none of the income tax returns of Borrower or any of its
Subsidiaries are under audit and Borrower shall promptly notify Agent in the
event that any of Borrower's or any of its Subsidiaries' tax returns become the
subject of an audit . No tax liens have been filed against Borrower or any of
its Subsidiaries. The charges, accruals and reserves on the books of Borrower
and each of its Subsidiaries in respect of any taxes or other governmental
charges are in accordance with GAAP. Borrower's federal tax identification
number is 00-0000000.
4.10 Performance of Agreements. None of the Loan Parties and none
of their respective Subsidiaries is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
material contractual obligation of any such Person, and no condition exists
that, with the giving of notice or the lapse of time or both, would constitute
such a default.
4.11 Employee Benefit Plans. Borrower, each of its Subsidiaries
and each ERISA Affiliate is in compliance, and will continue to remain in
compliance, in all material respects with all applicable provisions of ERISA,
the IRC and all other applicable laws and the regulations and interpretations
thereof with respect to all Employee Benefit Plans. No material liability has
been incurred by Borrower, any Subsidiaries or any ERISA Affiliate which remains
unsatisfied for any funding obligation, taxes or penalties with respect to any
Employee Benefit Plan. Neither Borrower nor any of its Subsidiaries shall
establish any new Employee Benefit Plan or amend any existing Employee Benefit
Plan if the liability or increased liability resulting from such establishment
or amendment is material.
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4.12 Intellectual Property. Borrower and each of its Subsidiaries
owns, is licensed to use or otherwise has the right to use, all Intellectual
Property used in or necessary for the conduct of its business as currently
conducted, and all such Intellectual Property is identified on Schedule 4.12.
4.13 Broker's Fees. No broker's or finder's fee or commission will
be payable with respect to any of the transactions contemplated hereby.
4.14 Environmental Compliance. Each Loan Party is in compliance
with all applicable Environmental Laws. There are no claims, liabilities, Liens,
investigations, litigation, administrative proceedings, whether pending or
threatened, or judgments or orders relating to any Hazardous Materials asserted
or threatened against any Loan Party or relating to any real property currently
or formerly owned, leased or operated by any Loan Party.
4.15 Solvency. From and after the date of this Agreement, Borrower:
(a) owns assets the fair salable value of which are greater than the total
amount of its liabilities (including contingent liabilities); (b) has capital
that is not unreasonably small in relation to its business as presently
conducted or any contemplated or undertaken transaction; and (c) does not
intend to incur and does not believe that it will incur debts beyond its
ability to pay such debts as they become due.
4.16 Disclosure. No representation or warranty of Borrower, any of
its Subsidiaries or any other Loan Party contained in this Agreement, the
financial statements, the other Loan Documents, or any other document,
certificate or written statement furnished to Agent or any Lender by or on
behalf of any such Person for use in connection with the Loan Documents contains
any untrue statement of a material fact or omitted, omits or will omit to state
a material fact necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances in which the same were
made. There is no material fact known to Borrower that has had or could have a
Material Adverse Effect and that has not been disclosed herein or in such other
documents, certificates and statements furnished to Agent or any Lender for use
in connection with the transactions contemplated hereby.
4.17 Insurance. Borrower and each of its Subsidiaries maintains
adequate insurance policies for public liability, property damage, product
liability, and business interruption with respect to its business and
properties and the business and properties of its Subsidiaries against loss or
damage of the kinds customarily carried or maintained by corporations of
established reputation engaged in similar businesses and in amounts acceptable
to Agent. Borrower shall cause Agent, for
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itself and on behalf of Lenders, to be named as loss payee on all insurance
policies relating to any Collateral and shall cause each Lender to be named as
additional insured under all liability policies, in each case pursuant to
appropriate endorsements in form and substance satisfactory to Agent and shall
collaterally assign to Agent, for itself and on behalf of Lenders, as security
for the payment of the Obligations all business interruption insurance of
Borrowers. No notice of cancellation has been received with respect to such
policies and Borrower and each of its Subsidiaries is in compliance with all
conditions contained in such policies. Borrower shall apply any proceeds
received from any policies of insurance relating to any Collateral to the
Obligations as set forth in subsection 2.4(B). In the event Borrower fails to
provide Agent with evidence of the insurance coverage required by this
Agreement, Agent may, but is not required to, purchase insurance at Borrower's
expense to protect Agent's and the Lender's interests in the Collateral. This
insurance may, but need not, protect Borrower's interests. The coverage
purchased by Agent may not pay any claim made by Borrower or any claim that is
made against Borrower in connection with the Collateral. Borrower may later
cancel any insurance purchased by Agent, but only after providing Agent with
evidence that Borrower has obtained insurance as required by this Agreement. If
Agent purchases insurance for the Collateral, Borrower will be responsible for
the costs of that insurance, including interest thereon and other charges
imposed on Agent in connection with the placement of the insurance, until the
effective date of the cancellation or expiration of the insurance, and such
costs may be added to the Obligations. The costs of the insurance may be more
than the cost of insurance Borrower is able to obtain on its own.
4.18 Compliance with Laws. Neither Borrower nor any of its
Subsidiaries is in violation of any law, ordinance, rule, regulation, order,
policy, guideline or other requirement of any domestic or foreign government or
any instrumentality or agency thereof, having jurisdiction over the conduct of
its business or the ownership of its properties, including, without limitation,
any Environmental Law, which violation would subject Borrower or any of its
Subsidiaries, or any of their respective officers to criminal liability or have
a Material Adverse Effect and no such violation has been alleged.
4.19 Bank Accounts. Schedule 4.19 sets forth the account numbers
and locations of all bank accounts of Borrower and its Subsidiaries. Borrower
shall not establish any new bank accounts, or amend or terminate any Blocked
Account or lockbox agreement without Agent's prior written consent.
4.20 Employee Matters. Except as set forth on Schedule 4.20, (a)
no Loan Party nor any of such Loan Party's employees is subject to any
collective bargaining agreement, (b) no petition for certification or union
election is pending with respect
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to the employees of any Loan Party and no union or collective bargaining unit
has sought such certification or recognition with respect to the employees of
any Loan Party and (c) there are no strikes, slowdowns, work stoppages or
controversies pending or, to the best knowledge of Borrower after due inquiry,
threatened between any Loan Party and its respective employees, other than
employee grievances arising in the ordinary course of business, which could
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect. Except as set forth on Schedule 4.20, neither Borrower
nor any of its Subsidiaries is subject to an employment contract.
4.21 Governmental Regulation. None of the Loan Parties is subject
to regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act or the Investment Company Act of 1940 or to any federal or state
statute or regulation limiting its ability to incur indebtedness for borrowed
money.
4.22 Access to Accountants and Management. Borrower authorizes
Agent and Lenders to discuss the financial condition and financial statements of
Borrower and its Subsidiaries with Borrower's Accountants upon reasonable notice
to Borrower of its intention to do so, and authorizes Borrower's Accountants to
respond to all of Agent's inquiries. Agent and each Lender may, with the consent
of Agent, which will not be unreasonably denied, confer with Borrower's
management directly regarding Borrower's business, operations and financial
condition.
4.23 Inspection. Borrower shall permit Agent and any authorized
representatives designated by Agent to visit and inspect any of the properties
of Borrower or any of its Subsidiaries, including their financial and
accounting records, and, in conjunction with such inspection, to make copies
and take extracts therefrom, and to discuss their affairs, finances and
business with their officers and Borrower's Accountants, at such reasonable
times during normal business hours and as often as may be reasonably requested.
Each Lender may with the consent of Agent, which will not be unreasonably
denied, accompany Agent on any such visit or inspection.
4.24 Collateral Records. Borrower shall keep full and accurate
books and records relating to the Collateral and shall xxxx such books and
records to indicate Agent's security interests in the Collateral, for the
benefit of Lenders.
4.25 Account Covenants; Verification. Borrower shall, at its own
expense: (a) cause all invoices evidencing Accounts and all copies thereof to
bear a notice that such invoices are payable to the lockboxes established in
accordance with subsection 4.26 and (b) use its best efforts to assure prompt
payment of all amounts due or to become due under the Accounts. No discounts,
credits or allowances will be issued,
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granted or allowed by Borrower to customers and no returns will be accepted
without Agent's prior written consent; provided, that until Agent notifies
Borrower to the contrary, Borrower may presume consent. Borrower will promptly
notify Agent in the event that a customer alleges any dispute or claim with
respect to an Account or of any other circumstances known to Borrower that may
impair the validity or collectibility of an Account. Agent shall have the right,
at any time or times hereafter, to verify the validity, amount or any other
matter relating to an Account, by mail, telephone or in person. After the
occurrence of a Default or an Event of Default, Borrower shall not, without the
prior consent of Agent, adjust, settle or compromise the amount or payment of
any Account, or release wholly or partly any customer or obligor thereof, or
allow any credit or discount thereon.
4.26 Collection of Accounts and Payments. Borrower shall establish
lockboxes or blocked accounts (collectively, "Blocked Accounts") in Borrower's
name with such banks ("Collecting Banks") as are acceptable to Agent (subject
to irrevocable instructions acceptable to Agent as hereinafter set forth) to
which all account debtors shall directly remit all payments on Accounts and in
which Borrower will immediately deposit all payments made for Inventory or
other payments constituting proceeds of Collateral in the identical form in
which such payment was made, whether by cash or check. The Collecting Banks
shall acknowledge and agree, in a manner satisfactory to Agent, that all
payments made to the Blocked Accounts are the sole and exclusive property of
Agent, for the benefit of Lenders, and that the Collecting Banks have no right
to setoff against the Blocked Accounts and that all such payments received will
be promptly transferred to Agent's Account. Borrower hereby agrees that all
payments made to such Blocked Accounts or otherwise received by Agent and
whether on the Accounts or as proceeds of other Collateral or otherwise will be
the sole and exclusive property of Agent, for the benefit of Lenders. Borrower
shall irrevocably instruct each Collecting Bank to promptly transfer all
payments or deposits to the Blocked Accounts into Agent's Account. If Borrower,
or any if its Affiliates, employees, agents or other Person acting for or in
concert with Borrower, shall receive any monies, checks, notes, drafts or any
other payments relating to and/or proceeds of Accounts or other Collateral,
Borrower or such Person shall hold such instrument or funds in trust for Agent,
and, immediately upon receipt thereof, shall remit the same or cause the same
to be remitted, in kind, to the Blocked Accounts or to Agent at its address set
forth in subsection 10.3 below.
Borrower may amend any one or more of the Schedules referred in this Section 4
(subject to prior notice to Agent, as applicable) and any representation,
warranty, or covenant contained herein which refers to any such Schedule shall
from and after the date of any such amendment refer to such Schedule as so
amended; provided however, that in no event shall the amendment of any such
Schedule constitute a
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waiver by Agent and Lenders of any Default or Event of Default that exists
notwithstanding the amendment of such Schedule.
SECTION 5. REPORTING AND OTHER AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, so long as any of the Commitments
hereunder shall be in effect and until payment in full of all Obligations,
Borrower shall perform, and shall cause each of its Subsidiaries to perform,
all covenants in this Section 5.
5.1 Financial Statements and Other Reports. Borrower will
deliver to Agent and each Lender (unless specified to be delivered solely to
Agent) the financial statements and other reports contained in the Reporting
Rider attached hereto.
5.2 Endorsement. Borrower hereby constitutes and appoints Agent
and all Persons designated by Agent for that purpose as Borrower's true and
lawful attorney-in-fact, with power to endorse Borrower's name to any of the
items of payment or proceeds described in subsection 4.26 above and all proceeds
of Collateral that come into Agent's possession or under Agent's control. Both
the appointment of Agent as Borrower's attorney and Agent's rights and powers
are coupled with an interest and are irrevocable until payment in full and
complete performance of all of the Obligations.
5.3 Maintenance of Properties. Borrower will maintain or cause
to be maintained in good repair, working order and condition all material
properties used in the business of Borrower and its Subsidiaries and will make
or cause to be made all appropriate repairs, renewals and replacements thereof.
5.4 Compliance with Laws. Borrower will, and will cause each of
its Subsidiaries to, comply with the requirements of all applicable laws, rules,
regulations and orders of any governmental authority as now in effect and which
may be imposed in the future in all jurisdictions in which Borrower or any of
its Subsidiaries is now doing business or may hereafter be doing business, other
than those laws the noncompliance with which would not have a Material Adverse
Effect.
5.5 Further Assurances. Borrower shall, and shall cause each of
its Subsidiaries to, from time to time, execute such guaranties, financing or
continuation statements, documents, security agreements, reports and other
documents or deliver to Agent such instruments, certificates of title,
mortgages, deeds of trust, or other documents as Agent at any time may
reasonably request to
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evidence, perfect or otherwise implement the guaranties and security for
repayment of the Obligations provided for in the Loan Documents.
5.6 Mortgages; Title Insurance; Surveys; Additional Leasehold
Properties.
(A) Title Insurance. On the Closing Date (or within 30 days
following delivery of any Mortgage with respect to Additional Mortgaged
Property), Borrower shall deliver or cause to be delivered to Agent ALTA
lender's title insurance policies issued by title insurers reasonably
satisfactory to Agent (the "Mortgage Policies") in form and substance and in
amounts reasonably satisfactory to Agent assuring Agent that the Mortgages are
valid and enforceable first priority mortgage liens on the respective Mortgaged
Property or Additional Mortgaged Property, free and clear of all defects and
encumbrances except Permitted Encumbrances. The Mortgage Policies shall be in
form and substance reasonably satisfactory to Agent and shall include an
endorsement insuring against the effect of future advances under this
Agreement, for mechanics' liens and for any other matter that Agent may
reasonably request.
(B) Additional Mortgaged Property. Borrower shall as promptly
as possible (and in any event within 60 days after such designation) deliver to
Agent a fully executed Mortgage, in form and substance satisfactory to Agent
together with title insurance policies and surveys on any Additional Mortgaged
Property designated by Agent.
(C) Surveys. On or before the Closing Date (or within 30 days
following delivery of any Mortgage with respect to Additional Mortgaged
Property), Borrower shall deliver or cause to be delivered to Agent current
surveys, certified by a licensed surveyor, for all real property that is the
subject of the Mortgage Policies including Additional Mortgaged Property for
which a Mortgage Policy is issued. All such surveys shall be sufficient to
allow the issuer of the mortgage policy to issue an ALTA lender's policy.
(D) Additional Leasehold Properties. Borrower shall as
promptly as possible (and in any event within 60 days after acquiring such
interest) deliver to Agent for each leasehold interest in real estate Borrower
possesses or hereinafter acquires estoppel letters, consents and waivers from
each landlord, which letters shall be in form and substance satisfactory to
Agent.
5.7 Use of Proceeds and Margin Security. Borrower shall use the
proceeds of all Loans for proper business purposes (as described in the
recitals to this Agreement) consistent with all applicable laws, statutes,
rules and regulations. No portion of the proceeds of any Loan shall be used by
Borrower or any of its
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Subsidiaries for the purpose of purchasing or carrying margin stock within the
meaning of Regulation U, or in any manner that might cause the borrowing or the
application of such proceeds to violate Regulation T or Regulation X or any
other regulation of the Board of Governors of the Federal Reserve System or to
violate the Exchange Act.
5.8 Bailee. If any Collateral is at any time in the possession or
control of any warehouseman, bailee or any of Borrower's agents or processors,
Borrower shall, upon the request of Agent, notify such warehouseman, bailee,
agent or processor of the security interests in favor of Agent, for the benefit
of Lenders, created hereby and shall instruct such Person to hold all such
Collateral for Agent's account subject to Agent's instructions.
5.9 Year 2000. Borrower has made an assessment of the microchip
and computer-based systems and the software used in its business and based upon
such assessment believes that it will be "Year 2000 Compliant" by January 1,
2000. For purposes of this paragraph, "Year 2000 Compliant" means that all
software, embedded microchips and other processing capabilities utilized by, and
material to the business operations or financial condition of, Borrower are able
to interpret, store, transmit, receive and manipulate data on and involving all
calendar dates correctly and without causing any abnormal ending scenarios in
relation to dates in and after the Year 2000. From time to time, at the request
of Agent, Borrower shall provide to Agent such updated information as is
requested regarding the status of its efforts to become Year 2000 Compliant.
SECTION 6. FINANCIAL COVENANTS
Borrower covenants and agrees that so long as any of the Commitments
remain in effect and until indefeasible payment in full of all Obligations and
termination of all Lender Letters of Credit, Borrower shall comply with and
shall cause each of its Subsidiaries to comply with all covenants contained in
the Financial Covenant Rider.
SECTION 7. NEGATIVE COVENANTS
Borrower covenants and agrees that so long as any of the Commitments
remain in effect and until indefeasible payment in full of all Obligations and
termination of all Lender Letters of Credit, Borrower shall not and will not
permit any of its SubsidiarieS to:
7.1 Indebtedness and Liabilities.
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(A) Indebtedness. Directly or indirectly create, incur,
assume, guaranty, or otherwise become or remain directly or indirectly liable,
on a fixed or contingent basis, with respect to any Indebtedness except:
(1) the Obligations;
(2) Indebtedness (excluding Capital Leases) not to exceed
$100,000.00 in the aggregate at any time outstanding secured by purchase money
Liens;
(3) Indebtedness under Capital Leases not to exceed
$100,000.00 outstanding at any time in the aggregate;
(4) Indebtedness under a Capital Lease for the acquisition
in the ordinary course of business of a new computer system with accompanying
software and technical support, the amounts payable in respect of which shall
not exceed $550,000.00 in the aggregate per annum;
(5) Borrower may create and incur new Indebtedness in the
form of promissory notes (collectively, the "Allied Note") in the aggregate
principal amount of up to $600,000.00 issued by Borrower pursuant to this
Agreement in connection with the acquisition of a substantial portion of the
assets of Allied Distributing Company of Houston, Inc., a Texas corporation, and
its wholly-owned subsidiary, Auto Parts Investment Group, Inc., a Texas
corporation (collectively, "Allied") (the "Allied Acquisition");
(6) Borrower may create and incur new Indebtedness in the
form of promissory notes in the aggregate principal amount of up to $2,000,000
issued by Borrower in connection with the Allied Acquisition (the "Second Allied
Note"); and
(7) Indebtedness existing on the Closing Date and
identified on Schedule 7.1.
(B) Liabilities. Borrower will not, and will not permit any
of its Subsidiaries to, incur any Liabilities except for Indebtedness permitted
herein and trade payables and normal accruals in the ordinary course of
business not yet due and payable or with respect to which Borrower or any of
its Subsidiaries is contesting in good faith the amount or validity thereof by
appropriate proceedings and then only to the extent that Borrower or any of its
Subsidiaries has established adequate reserves therefor under GAAP.
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7.2 Guaranties. Except for endorsements of instruments or items
of payment for collection in the ordinary course of business, guaranty, endorse,
or otherwise in any way become or be responsible for any obligations of any
other Person, whether directly or indirectly by agreement to purchase the
indebtedness of any other Person or through the purchase of goods, supplies or
services, or maintenance of working capital or other balance sheet covenants or
conditions, or by way of stock purchase, capital contribution, advance or loan
for the purpose of paying or discharging any indebtedness or obligation of such
other Person or otherwise.
7.3 Transfers, Liens and Related Matters.
(A) Transfers. Sell, assign (by operation of law or
otherwise) or otherwise dispose of, or grant any option with respect to any of
the Collateral or the assets of such Person, except that Borrower and its
Subsidiaries may (i) sell inventory in the ordinary course of business; and
(ii) make Asset Dispositions if all of the following conditions are met: (1)
the market value of assets sold or otherwise disposed of in any single
transaction or series of related transactions does not exceed $10,000.00 and
the aggregate market value of assets sold or otherwise disposed of in any
Fiscal Year does not exceed $100,000.00; (2) the consideration received is at
least equal to the fair market value of such assets; (3) the sole consideration
received is cash; (4) the net proceeds of such Asset Disposition are applied as
required by subsection 2.4(B); (5) after giving effect to the sale or other
disposition of the assets included within the Asset Disposition and the
repayment of the Obligations with the proceeds thereof, Borrower is in
compliance on a pro forma basis with the covenants set forth in the Financial
Covenant Rider recomputed for the most recently ended month for which
information is available and is in compliance with all other terms and
conditions contained in this Agreement; and (6) no Default or Event of Default
shall then exist or result from such sale or other disposition.
(B) Liens. Except for Permitted Encumbrances, directly or
indirectly create, incur, assume or permit to exist any Lien on or with respect
to any of the Collateral or the assets of such Person or any proceeds, income
or profits therefrom.
(C) No Negative Pledges. Enter into or assume any agreement
(other than the Loan Documents) prohibiting the creation or assumption of any
Lien upon its properties or assets, whether now owned or hereafter acquired.
(D) No Restrictions on Subsidiary Distributions to Borrower.
Except as provided herein, directly or indirectly create or otherwise cause or
suffer
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to exist or become effective any consensual encumbrance or restriction of any
kind on the ability of any such Subsidiary to: (1) pay dividends or make any
other distribution on any of such Subsidiary's capital stock owned by Borrower
or any Subsidiary of Borrower; (2) pay any indebtedness owed to Borrower or any
other Subsidiary; (3) make loans or advances to Borrower or any other
Subsidiary; or (4) transfer any of its property or assets to Borrower or any
other Subsidiary.
7.4 Investments and Loans. Make or permit to exist investments in
or loans to any other Person, except: (a) Cash Equivalents; and (b) loans and
advances to employees for moving, entertainment, travel and other similar
expenses in the ordinary course of business in an aggregate outstanding amount
not in excess of $25,000.00 at any time.
7.5 Restricted Junior Payments. Directly or indirectly declare,
order, pay, make or set apart any sum for any Restricted Junior Payment, except
that:
(A) Subsidiaries of Borrower may make Restricted Junior
Payments with respect to their common stock to the extent necessary to permit
Borrower to pay the Obligations;
(B) Borrower may, provided, that no Default or Event of
Default has occurred or is continuing and such payment or payments will not
result in a Default or Event of Default, (i) pay accrued and unpaid interest on
a monthly basis and (ii) make a payment of principal once each month for
thirty-six (36) months in equal installments in the ordinary course of business
on the Allied Notes; and
(C) Borrower may, provided that no Default or Event of
Default has occurred or is continuing and such payment or payments will not
result in a Default or Event of Default, (i) make payments of interest in the
ordinary course of business on the Second Allied Notes and (ii) after the first
anniversary of the Closing Date, make payments of principal in the ordinary
course of business on the Second Allied Note (singularly, an "Allied Principal
Payment"), if and only if prior to making any Allied Principal Payment: (a)
Agent shall have received audited financial statements for the Fiscal Year
ending February 25, 2000 in form and substance and from auditors satisfactory
to Agent, and (b) Borrower shall have provided evidence satisfactory to Agent
that after giving effect to such Allied Principal Payment, Borrower will
maintain Minimum Availability.
7.6 Restriction on Fundamental Changes. (a) Enter into any
transaction of merger or consolidation; (b) liquidate, wind-up or dissolve
itself (or suffer any liquidation or dissolution); (c) convey, sell, lease,
sublease, transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any substantial part of its business or assets, or the
capital stock of any of its Subsidiaries, whether now owned or hereafter
acquired; or (d) acquire by purchase or otherwise all or any substantial part
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of the business or assets of, or stock or other beneficial ownership of, any
Person.
7.7 Transactions with Affiliates. Directly or indirectly, enter
into or permit to exist any transaction (including the purchase, sale or
exchange of property or the rendering of any service) with any Affiliate or with
any officer, director or employee of any Loan Party except for transactions in
the ordinary course of Borrower's business and upon fair and reasonable terms
which are fully disclosed to Agent and Lenders and which are no less favorable
to Borrower than it would obtain in a comparable arm's length transaction with
an unaffiliated Person.
7.8 Conduct of Business. From and after the Closing Date, engage
in any business other than businesses of the type engaged in by Borrower or any
Subsidiary on the Closing Date.
7.9 Tax Consolidations. File or consent to the filing of any
consolidated income tax return with any Person any of Borrower's Subsidiaries;
provided that in the event Borrower files a consolidated return with any such
Person, Borrower's contribution with respect to taxes as a result of the filing
of such consolidated return shall not be greater, nor the receipt of tax
benefits less, than they would have been had Borrower not filed a consolidated
return with such Person.
7.10 Subsidiaries. Establish, create or acquire any new
Subsidiaries.
7.11 Fiscal Year; Tax Designation. Change its Fiscal Year; or
elect to be designated as an entity other than a C corporation as defined in
IRC.
7.12 Press Release; Public Offering Materials. Disclose the name of
Agent or any Lender in any press release or in any prospectus, proxy statement
or other materials filed with any governmental entity relating to a public
offering of the capital stock of any Loan Party except as may be required by
law.
7.13 Bank Accounts. Establish any new bank accounts, or attempt to
amend or terminate any Blocked Account or lockbox agreement without Agent's
prior written consent.
SECTION 8. DEFAULT, RIGHTS AND REMEDIES
8.1 Event of Default. "Event of Default" shall mean the occurrence
or existence of any one or more of the following:
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(A) Payment. Failure to make payment of any of the Obligations
when due; or
(B) Default in Other Agreements. (1) Failure of Borrower or
any of its Subsidiaries to pay when due any principal or interest on any
Indebtedness (other than the Obligations) or (2) breach or default of Borrower
or any of its Subsidiaries with respect to any Indebtedness (other than the
Obligations); if such failure to pay, breach or default entitles the holder to
cause such Indebtedness having an individual principal amount in excess of
$100,000 or having an aggregate principal amount in excess of $250,000 to
become or be declared due prior to its stated maturity; or
(C) Breach of Certain Provisions. Failure of Borrower to
perform or comply with any term or condition contained in paragraphs (A) (B) and
(C) and (N)of the Reporting Rider and subsections, 5.3, 5.5 or 5.6 or contained
in Section 4, Section 6, Section 7 or the Financial Covenants Rider; or
(D) Breach of Warranty. Any representation, warranty,
certification or other statement made by any Loan Party in any Loan Document or
in any statement or certificate at any time given by such Person in writing
pursuant or in connection with any Loan Document is false in any material
respect on the date made; or
(E) Other Defaults Under Loan Documents. Borrower or any other
Loan Party defaults in the performance of or compliance with any term contained
in this Agreement or the other Loan Documents and such default is not remedied
or waived within 10 days after receipt by Borrower of notice from Agent, or
Requisite Lenders, of such default (other than occurrences described in other
provisions of this subsection 8.1 for which a different grace or cure period is
specified or which constitute immediate Events of Default); or
(F) Change in Control. (1) Messrs. Xxxxx Xxxxxx and Xxx Xxxxxx
together cease to beneficially own and control, directly or indirectly, at least
51% of the issued and outstanding shares of each class of capital stock of
Borrower entitled (without regard to the occurrence of any contingency) to vote
for the election of a majority of the members of the board of directors of
Borrower; provided, however, such a failure to maintain beneficial ownership and
control shall not constitute an Event of Default if, and only if, it is due
solely to a secondary offering of capital stock of Borrower where (i) the
proceeds of such secondary offering are remitted directly and for the benefit of
Borrower and (ii) such proceeds are used by the Borrower for general corporate
purposes (as described in the recitals to this
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Agreements); (2) Xx. Xxx Xxxxxx shall dispose of any shares of Borrower's common
stock owned by Xx. Xxx Xxxxxx on the Closing Date during the first two (2) years
following the Closing Date or more than 100,000 shares of such stock annually
thereafter; or (3) the death or incapacity of Messrs. Xxxxx Xxxxxx and/or Xxx
Xxxxxx; or
(G) Involuntary Bankruptcy; Appointment of Receiver, etc. (1)
A court enters a decree or order for relief with respect to Borrower or any of
its Subsidiaries in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, which decree or
order is not stayed or other similar relief is not granted under any applicable
federal or state law; or (2) the continuance of any of the following events for
60 days unless dismissed, bonded or discharged: (a) an involuntary case is
commenced against Borrower or any of its Subsidiaries, under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect; or (b) a
receiver, liquidator, sequestrator, trustee, custodian or other fiduciary having
similar powers over Borrower or any of its Subsidiaries, or over all or a
substantial part of their respective property, is appointed; or
(H) Voluntary Bankruptcy; Appointment of Receiver, etc. (1)
Borrower or any of its Subsidiaries commences a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or consents to the entry of an order for relief in an involuntary case
or to the conversion of an involuntary case to a voluntary case under any such
law or consents to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its property; or
(2) Borrower or any of its Subsidiaries makes any assignment for the benefit of
creditors; or (3) the board of directors of Borrower or any of its Subsidiaries
adopts any resolution or otherwise authorizes action to approve any of the
actions referred to in this subsection 8.1(H); or
(I) Liens. Any lien, levy or assessment is filed or recorded
with respect to or otherwise imposed upon all or any part of the Collateral or
the assets of Borrower or any of its Subsidiaries by the United States or any
department or instrumentality thereof or by any state, county, municipality or
other governmental agency (other than Permitted Encumbrances) and such lien,
levy or assessment is not stayed, vacated, paid or discharged within 30 days; or
(J) Judgment and Attachments. Any money judgment, writ or
warrant of attachment, or similar process involving (1) (a) an amount in any
individual case in excess of $100,000 or (b) an amount in the aggregate at any
time in excess of $250,000 (in either case not adequately covered by insurance
as to which the insurance company has acknowledged coverage) is entered or
filed
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against Borrower or any of its Subsidiaries or any of their respective assets
and remains undischarged, unvacated, unbonded or unstayed for a period of 30
days, but in any event not later than 5 days prior to the date of any proposed
sale thereunder or (2) securities fraud, in any way, is entered or filed against
Borrower or any of its Subsidiaries or any of their respective assets; or
(K) Dissolution. Any order, judgment or decree is entered
against Borrower or any of its Subsidiaries decreeing the dissolution or split
up of Borrower or that Subsidiary and such order remains undischarged or
unstayed for a period in excess of 20 days, but in any event not later than 5
days prior to the date of any proposed dissolution or split up; or
(L) Solvency. Borrower ceases to be solvent (as represented
by Borrower in subsection 4.15) or admits in writing its present or prospective
inability to pay its debts as they become due; or
(M) Injunction. Borrower or any of its Subsidiaries is
enjoined, restrained or in any way prevented by the order of any court or any
administrative or regulatory agency from conducting all or any material part of
its business and such order continues for 30 days or more; or
(N) Invalidity of Loan Documents. Any of the Loan Documents
for any reason, other than a partial or full release in accordance with the
terms thereof, ceases to be in full force and effect or is declared to be null
and void, or any Loan Party denies that it has any further liability under any
Loan Documents to which it is party, or gives notice to such effect; or
(O) Failure of Security. Agent, on behalf of Lenders, does
not have or ceases to have a valid and perfected first priority security
interest in the Collateral (subject to Permitted Encumbrances), in each case,
for any reason other than the failure of Agent or any Lender to take any action
within its control; or
(P) Damage, Strike. Any material damage to, or loss, theft or
destruction of, any Collateral, whether or not insured, or any strike, lockout,
labor dispute, embargo, condemnation, act of God or public enemy, or other
casualty which causes, for more than 5 consecutive days beyond the coverage
period of any applicable business interruption insurance, the cessation or
substantial curtailment of revenue producing activities at any facility of
Borrower or any of its Subsidiaries if any such event or circumstance could
reasonably be expected to have a Material Adverse Effect.
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(Q) Licenses and Permits. The loss, suspension or revocation
of, or failure to renew, any license or permit now held or hereafter acquired
by Borrower or any of its Subsidiaries, if such loss, suspension, revocation or
failure to renew could reasonably be expected to have a Material Adverse
Effect, except to the extent being contested or appealed by Borrower in good
faith, pursuant to appropriate and timely proceedings.
(R) Forfeiture. There is filed against Borrower or any
Guarantor 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 120 days; and (2) could reasonably be
expected to result in the confiscation or forfeiture of any material portion of
the Collateral.
8.2 Suspension of Commitments. Upon the occurrence of any Default
or Event of Default, notwithstanding any grace period or right to cure, Agent
may or upon demand by Requisite Lenders shall, without notice or demand,
immediately cease making additional Loans and the Commitments shall be
suspended; provided that, in the case of a Default, if the subject condition or
event is waived or cured within any applicable grace or cure period, the
Commitments shall be reinstated.
8.3 Acceleration. Upon the occurrence of any Event of Default
described in the foregoing subsections 8.1(G) or 8.1(H), all Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by Borrower, and the Commitments shall thereupon terminate. Upon the
occurrence and during the continuance of any other Event of Default, Agent may,
and upon demand by Requisite Lenders shall, by written notice to Borrower, (a)
declare all or any portion of the Obligations to be, and the same shall
forthwith become, immediately due and payable and the Commitments shall
thereupon terminate and (b) demand that Borrower immediately deposit with Agent
an amount equal to 105% of the Letter of Credit Reserve to enable Agent or any
Lender that has issued any Lender Letter of Credit to make payments under the
Lender Letters of Credit when required and such amount shall become immediately
due and payable.
8.4 Remedies. If any Event of Default shall have occurred and be
continuing, in addition to and not in limitation of any other rights or
remedies available to Agent and Lenders at law or in equity, Agent may and
shall upon the request of Requisite Lenders exercise in respect of the
Collateral, in addition to all other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party on
default under the UCC (whether or not the UCC applies to the affected
Collateral) and may also (a) require Borrower to,
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and Borrower hereby agrees that it will, at its expense and upon request of
Agent forthwith, assemble all or part of the Collateral as directed by Agent and
make it available to Agent at a place to be designated by Agent which is
reasonably convenient to both parties; (b) withdraw all cash in the Blocked
Accounts and apply such monies in payment of the Obligations in the manner
provided in subsection 8.7; and (c) without notice or demand or legal process,
enter upon any premises of Borrower and take possession of the Collateral.
Borrower agrees that, to the extent notice of sale of the Collateral or any part
thereof shall be required by law, at least 10 days notice to Borrower of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. At any sale of the Collateral
(whether public or private), if permitted by law, Agent or any Lender may bid
(which bid may be, in whole or in part, in the form of cancellation of
indebtedness) for the purchase of the Collateral or any portion thereof for the
account of Agent or such Lender. Agent shall not be obligated to make any sale
of Collateral regardless of notice of sale having been given. Borrower shall
remain liable for any deficiency. Agent may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it was
so adjourned. To the extent permitted by law, Borrower hereby specifically
waives all rights of redemption, stay or appraisal which it has or may have
under any law now existing or hereafter enacted. Agent shall not be required to
proceed against any Collateral but may proceed against Borrower directly.
8.5 Appointment of Attorney-in-Fact. Borrower hereby constitutes
and appoints Agent as Borrower's attorney-in-fact with full authority in the
place and stead of Borrower and in the name of Borrower, Agent or otherwise,
from time to time in Agent's discretion while an Event of Default is continuing
to take any action and to execute any instrument that Agent may deem necessary
or advisable to accomplish the purposes of this Agreement, including: (a) to
ask, demand, collect, xxx for, recover, compound, receive and give acquittance
and receipts for moneys due and to become due under or in respect of any of the
Collateral; (b) to adjust, settle or compromise the amount or payment of any
Account, or release wholly or partly any customer or obligor thereunder or
allow any credit or discount thereon; (c) to receive, endorse, and collect any
drafts or other instruments, documents and chattel paper, in connection with
clause (a) above; (d) to file any claims or take any action or institute any
proceedings that Agent may deem necessary or desirable for the collection of or
to preserve the value of any of the Collateral or otherwise to enforce the
rights of Agent and Lenders with respect to any of the Collateral; and (e) to
sign and endorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, assignments, verifications and notices in
connection with Accounts and other documents relating to the Collateral. The
appointment of Agent as Borrower's attorney and Agent's rights and powers are
coupled with an interest
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and are irrevocable until indefeasible payment in full and complete performance
of all of the Obligations.
8.6 Limitation on Duty of Agent with Respect to Collateral.
Beyond the safe custody thereof, Agent and each Lender shall have no duty with
respect to any Collateral in its possession or control (or in the possession or
control of any agent or bailee) or with respect to any income thereon or the
preservation of rights against prior parties or any other rights pertaining
thereto. Agent shall be deemed to have exercised reasonable care in the custody
and preservation of the Collateral in its possession if the Collateral is
accorded treatment substantially equal to that which Agent accords its own
property. Neither Agent nor any Lender shall be liable or responsible for any
loss or damage to any of the Collateral, or for any diminution in the value
thereof, by reason of the act or omission of any warehouseman, carrier,
forwarding agency, consignee, broker or other agent or bailee selected by
Borrower or selected by Agent in good faith.
8.7 Application of Proceeds. Upon the occurrence and during the
continuance of an Event of Default, (a) Borrower irrevocably waives the right
to direct the application of any and all payments at any time or times
thereafter received by Agent from or on behalf of Borrower, and Borrower hereby
irrevocably agrees that Agent shall have the continuing exclusive right to
apply and to reapply any and all payments received at any time or times after
the occurrence and during the continuance of an Event of Default against the
Obligations in such manner as Agent may deem advisable notwithstanding any
previous entry by Agent upon any books and records and (b) the proceeds of any
sale of, or other realization upon, all or any part of the Collateral shall be
applied: first, to all fees, costs and expenses incurred by or owing to Agent
with respect to this Agreement, the other Loan Documents or the Collateral;
second, to all fees, costs and expenses incurred by or owing to any Lender with
respect to this Agreement, the other Loan Documents or the Collateral; third,
to accrued and unpaid interest on the Obligations; fourth, to the principal
amounts of the Obligations outstanding; and fifth, to any other indebtedness or
obligations of Borrower owing to Agent or any Lender.
8.8 License of Intellectual Property. Borrower hereby assigns,
transfers and conveys to Agent, for the benefit Lenders, effective upon the
occurrence of any Event of Default hereunder, the non-exclusive right and
license to use all Intellectual Property owned or used by Borrower together
with any goodwill associated therewith, all to the extent necessary to enable
Agent to realize on the Collateral and any successor or assign to enjoy the
benefits of the Collateral. This right and license shall inure to the benefit
of all successors, assigns and transferees of Agent and its successors, assigns
and transferees, whether by voluntary conveyance,
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operation of law, assignment, transfer, foreclosure, deed in lieu of foreclosure
or otherwise. Such right and license is granted free of charge.
8.9 Waivers, Non-Exclusive Remedies. No failure on the part of
Agent or any Lender to exercise, and no delay in exercising and no course of
dealing with respect to, any right under this Agreement or the other Loan
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise by Agent or any Lender of any right under this Agreement or any other
Loan Document preclude any other or further exercise thereof or the exercise of
any other right. The rights in this Agreement and the other Loan Documents are
cumulative and shall in no way limit any other remedies provided by law.
SECTION 9. AGENT
9.1 Agent.
(A) Appointment. Each Lender hereto and, upon obtaining an
interest in any Loan, any participant, transferee or other assignee of any
Lender irrevocably appoints, designates and authorizes Xxxxxx as Agent to take
such actions or refrain from taking such action as its agent on its behalf and
to exercise such powers hereunder as are delegated by the terms hereof,
together with such powers as are reasonably incidental thereto. Neither the
Agent nor any of its directors, officers, employees or agents shall be liable
for any action so taken. The provisions of this subsection 9.1 are solely for
the benefit of Agent and Lenders and neither Borrower nor any Loan Party shall
have any rights as a third party beneficiary of any of the provisions hereof.
Agent may perform any of its duties hereunder, or under the Loan Documents, by
or through its agents or employees.
(B) Nature of Duties. Agent shall have no duties, obligations
or responsibilities except those expressly set forth in this Agreement or in
the Loan Documents. The duties of Agent shall be mechanical and administrative
in nature. Agent shall not have by reason of this Agreement a fiduciary, trust
or agency relationship with or in respect of any Lender, Borrower or any Loan
Party. Each Lender shall make its own appraisal of the credit worthiness of
Borrower, and shall have independently taken whatever steps it considers
necessary to evaluate the financial condition and affairs of Borrower, and
Agent shall have no duty or responsibility, either initially or on a continuing
basis, to provide any Lender with any credit or other information with respect
thereto, whether coming into its possession before the Closing Date or at any
time or times thereafter. If Agent seeks the consent or approval of any Lenders
to the taking or refraining from taking any action hereunder, then Agent shall
send notice thereof to each Lender. Agent
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shall promptly notify each Lender any time that the applicable percentage of
Lenders have instructed Agent to act or refrain from acting pursuant hereto.
(C) Rights, Exculpation, Etc. Neither Agent nor any of its
officers, directors, employees or agents shall be liable to any Lender for any
action taken or omitted by them hereunder or under any of the Loan Documents,
or in connection herewith or therewith, except that Agent shall be obligated on
the terms set forth herein for performance of its express obligations
hereunder, and except that Agent shall be liable with respect to its own gross
negligence or willful misconduct. Agent shall not be liable for any
apportionment or distribution of payments made by it in good faith and if any
such apportionment or distribution is subsequently determined to have been made
in error, the sole recourse of any Lender to whom payment was due but not made,
shall be to recover from other Lenders any payment in excess of the amount to
which they are determined to be entitled (and such other Lenders hereby agree
to return to such Lender any such erroneous payments received by them). In
performing its functions and duties hereunder, Agent shall exercise the same
care which it would in dealing with loans for its own account, but Agent shall
not be responsible to any Lender for any recitals, statements, representations
or warranties herein or for the execution, effectiveness, genuineness,
validity, enforceability, collectability, or sufficiency of this Agreement or
any of the Loan Documents or the transactions contemplated thereby, or for the
financial condition of any Loan Party. Agent shall not be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or any of the Loan Documents or the
financial condition of any Loan Party, or the existence or possible existence
of any Default or Event of Default. Agent may at any time request instructions
from Lenders with respect to any actions or approvals which by the terms of
this Agreement or of any of the Loan Documents Agent is permitted or required
to take or to grant, and Agent shall be entitled to refrain from taking any
action or to withhold any approval and shall not be under any liability
whatsoever to any Person for refraining from any action or withholding any
approval under any of the Loan Documents until it shall have received such
instructions from the applicable percentage of the Lenders. Without limiting
the foregoing, no Lender shall have any right of action whatsoever against
Agent as a result of Agent acting or refraining from acting under this
Agreement or any of the other Loan Documents in accordance with the
instructions of the applicable percentage of the Lenders and notwithstanding
the instructions of Lenders, Agent shall have no obligation to take any action
if it, in good faith, believes that such action exposes Agent to any liability.
(D) Reliance. Agent shall be under no duty to examine,
inquire into, or pass upon the validity, effectiveness or genuineness of this
Agreement, any other
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Loan Document, or any instrument, document or communication furnished pursuant
hereto or in connection herewith. Agent shall be entitled to rely upon and
assume that any written notices, statements, certificates, orders or other
documents or any telephone message or other communication (including any
writing, telex, telecopy or telegram) are genuine, valid, effective and correct
and to have been signed, sent or made by the proper Person, and with respect to
all matters pertaining to this Agreement or any of the Loan Documents and its
duties hereunder or thereunder. Agent shall be entitled to rely upon the advice
of legal counsel, independent accountants, and other experts selected by Agent
in its sole discretion.
(E) Indemnification. Each Lender, in proportion to its Pro
Rata Share, severally, agrees to reimburse and indemnify Agent for and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses, advances or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against
Agent in any way relating to or arising out of this Agreement or any of the
Loan Documents or any action taken or omitted by Agent under this Agreement or
any of the Loan Documents; provided, however, that no Lender shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses, advances or disbursements resulting
from Agent's gross negligence or willful misconduct as determined by a court of
competent jurisdiction. The obligations of Lenders under this subsection 9.1(E)
shall survive the payment in full of the Obligations and the termination of
this Agreement.
(F) Xxxxxx Individually. With respect to its Commitments and
the Loans made by it, Xxxxxx shall have and may exercise the same rights and
powers hereunder and is subject to the same obligations and liabilities as and
to the extent set forth herein for any other Lender. The terms "Lenders" or
"Requisite Lenders" or any similar terms shall, unless the context clearly
otherwise indicates, include Xxxxxx in its individual capacity as a Lender.
Xxxxxx may lend money to, and generally engage in any or other business with
any Loan Party as if it were not acting as Agent pursuant hereto.
(G) Successor Agent.
(1) Resignation. Agent may resign from the performance of
all its functions and duties hereunder at any time by giving at least 30
Business Days' prior written notice to Borrower and the Lenders. Such
resignation shall take effect upon the acceptance by a successor Agent of
appointment as provided below.
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(2) Appointment of Successor. Upon any such notice of
resignation pursuant to clause (G)(1) above, Requisite Lenders shall, upon
receipt of Borrower's prior consent which shall not unreasonably be withheld,
appoint a successor Agent. If a successor Agent shall not have been so appointed
within said 30 Business Day period, the retiring Agent, upon notice to Borrower,
shall then appoint a successor Agent who shall serve as Agent until such time,
as Requisite Lenders appoint a successor Agent as provided above.
(3) Successor Agent. Upon the acceptance of any
appointment as Agent under the Loan Documents by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under the Loan
Documents. After any retiring Agent's resignation as Agent under the Loan
Documents, the provisions of this Section 9 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under the Loan
Documents.
(H) Collateral Matters.
(1) Release of Collateral. Lenders hereby irrevocably
authorize Agent, at its option and in its discretion, to release any Lien
granted to or held by Agent upon any property covered by this Agreement or the
Loan Documents (i) upon termination of the Commitments and upon final and
indefeasible payment in full in cash and satisfaction of all Obligations and
termination of this Agreement; (ii) constituting property being sold or disposed
of in accordance with this Agreement if Borrower certifies to Agent that the
sale or disposition is made in compliance with the provisions of this Agreement
(and Agent may rely in good faith conclusively on any such certificate, without
further inquiry); or (iii) constituting property leased to Borrower under a
lease which has expired or been terminated in a transaction permitted under this
Agreement or is about to expire and which has not been, and is not intended by
Borrower to be, renewed or extended. In addition during any Fiscal Year (x)
Agent may release Collateral having a book value of not more than 20% of the
book value of all Collateral and (y) Agent, with the consent of Lenders having
90% of both the Total Loan Commitments and Loans, may release all or any portion
of the Collateral. Without limiting any of the foregoing, each Lender agrees to
confirm in writing, upon request by Borrower, the authority to release any
property covered by this Agreement or the Loan Documents conferred upon Agent
under this subsection.
(2) Execution of Releases . So long as no Event of Default
is then continuing, upon confirmation from the requisite percentage (as set
forth in subsection 9.1(H)(1) above) of Lenders, of Agent's authority to release
any
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Collateral, and upon at least 10 Business Days prior written request by
Borrower, Agent shall, and is hereby irrevocably authorized by Lenders to,
execute such documents as may be necessary to evidence the release of the Liens
upon such Collateral; provided, however, that (i) Agent shall not be required to
execute any such document on terms which, in Agent's opinion, would expose 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
granted to Agent on behalf of Lenders upon (or obligations of any Loan Party, in
respect of), all interests retained by any Loan Party, including, without
limitation, the proceeds of any sale, all of which shall continue to constitute
part of the property covered by this Agreement or the Loan Documents, and (iii)
such release is not consistent with the terms of this Agreement.
(3) Absence of Duty. Agent shall have no obligation
whatsoever to any Lender or any other Person to assure that the property covered
by this Agreement or the Loan Documents exists or is owned by Borrower or is
cared for, protected or insured or has been encumbered or that the Liens granted
to Agent on behalf of Lenders herein or pursuant hereto have been properly or
sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or to exercise at all or in any particular
manner or under any duty of care, disclosure or fidelity, or to continue
exercising, any of the rights, authorities and powers granted or available to
Agent in this Agreement or in any of the Loan Documents, it being understood and
agreed that in respect of the property covered by this Agreement or the Loan
Documents or any act, omission or event related thereto, Agent may act in any
manner it may deem appropriate, in its discretion, given Agent's own interest in
property covered by this Agreement or the Loan Documents as one of the Lenders
and that Agent shall have no duty or liability whatsoever to any of the other
Lenders.
(I) Agency for Perfection. Each Lender hereby appoints each
other Lender as agent for the purpose of perfecting Lenders' security interest
in Collateral which, in accordance with Article 9 of the Uniform Commercial
Code in any applicable jurisdiction, can be perfected only by possession.
Should any Lender (other than Agent) obtain possession of any such Collateral,
such Lender shall notify Agent thereof, and, promptly upon Agent's request
therefor, shall deliver such Collateral to Agent or in accordance with Agent's
instructions. The Agent may file such proofs of claim or documents as may be
necessary or advisable in order to have the claims of the Agent and the Lenders
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Agent and the Lenders, their respective agents, financial
advisors and counsel), allowed in any judicial proceedings relative to Borrower
and/or its Subsidiaries, or any of their
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respective creditors or property, and shall be entitled and empowered to
collect, receive and distribute any monies, securities or other property payable
or deliverable on any such claims. Any custodian in any judicial proceedings
relative to Borrower and/or its Subsidiaries is hereby authorized by each Lender
to make payments to the Agent and, in the event that the Agent shall consent to
the making of such payments directly to the Lenders, to pay to the Agent any
amount due for the reasonable compensation, expenses, disbursements and advances
of the Agent, its agents, financial advisors and counsel, and any other amounts
due the Agent. Nothing contained in this Agreement or the other Loan Documents
shall be deemed to authorize the Agent to authorize or consent to or accept or
adopt on behalf of any Lender any plan of reorganization, arrangement,
adjustment or composition affecting the Loans, or the rights of any holder
thereof, or to authorize the Agent to vote in respect of the claim of any Lender
in any such proceeding, except as specifically permitted herein.
(J) Exercise of Remedies. Each Lender agrees that it will not
have any right individually to enforce or seek to enforce this Agreement or any
Loan Document or to realize upon any collateral security for the Loans, it
being understood and agreed that such rights and remedies may be exercised only
by Agent.
9.2 Notice of Default.
In the event that the Agent or any Lender shall acquire
actual knowledge, or shall have been notified of any Event of Default, the
Agent or such Lender shall promptly notify the Lenders and the Agent.
9.3 Action by Agent.
The Agent shall be entitled to use its discretion with
respect to exercising or refraining from exercising any rights which may be
vested in it by, and with respect to, taking or refraining from taking any
action or actions which it may be able to take under or in respect of, this
Agreement, unless the Agent shall have been instructed by either the Requisite
Lenders or all of the Lenders required for an action hereunder (as applicable)
to exercise or refrain from exercising such rights or to make or refrain from
taking such action. The Agent shall incur no liability under or in respect of
this Agreement with respect to anything which it may do or refrain from doing
in the reasonable exercise of its judgment or which may seem to it to be
necessary or desirable in the circumstances, except for its gross negligence or
willful misconduct. Agent shall not be liable to the Lenders or to any Lender
in acting or refraining from acting under this Agreement in accordance with the
instructions of the Requisite Lenders, or all of the Lenders, as the case may
be,
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and any action taken or failure to act pursuant to such instructions shall be
binding on all Lenders.
9.4 Amendments, Waivers and Consents.
(A) Except as otherwise provided herein, no amendment,
modification, termination or waiver of any provision of this Agreement or any
other Loan Document, or consent to any departure by any Loan Party therefrom,
shall in any event be effective unless the same shall be in writing and signed
by Borrower and Requisite Lenders; provided however, no amendment,
modification, termination, waiver or consent shall be effective, unless in
writing and signed by all Lenders, to do any of the following: (i) increase any
of the Commitments; (ii) reduce the rate of interest on or fees payable with
respect to any Loan or Letter of Credit; (iii) extend the scheduled due date
for all or any portion of principal of the Loans or any interest or fees due
hereunder; (iv) amend or waive the definition of the term "Requisite Lenders";
(v) amend or waive this subsection 9.4; or (vi) increase by more than five
percent each the percentages contained in the definition of Borrowing Base;
provided, further, that no amendment, modification, termination, waiver or
consent affecting the rights or duties of Agent under this Section 9 or under
any Loan Document shall in any event be effective, unless in writing and signed
by Agent, in addition to the Lenders required to take such action.
(B) Each amendment, modification, termination, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given. No amendment, modification, termination, waiver
or consent shall be required for Agent to take additional Collateral;
(C) Each Lender grants Agent the right to purchase all, but
not less than all, of such Lender's Commitment, in the event Agent requests the
consent of a Lender and such consent is denied. In such circumstances, Agent
may, at its option, require such Lender to assign its interest in the Loans to
Agent or Agent's designee for a price equal to the then outstanding principal
amount thereof plus accrued and unpaid interest and fees due such Lender, which
interest and fees will be paid when collected from Borrower;
Notwithstanding anything in this subsection 9.4, Agent and Borrower, without
the consent of either Requisite Lenders or all Lenders, may execute amendments
to this Agreement and the Loan Documents, which consist solely of the making of
typographical corrections.
9.5 Assignments and Participations in Loans.
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(A) Each Lender may assign its rights and delegate its
obligations under this Agreement to an Eligible Assignee; provided, that (a)
such Lender shall first obtain the written consent of Agent, which shall not be
unreasonably withheld, (b) the amount of Commitments and Loans of the assigning
Lender being assigned shall in no event be less than the lesser of (i)
$5,000,000 or (ii) the entire amount of the Commitments and Loans of such
assigning Lender and (c)(i) each such assignment shall be of a pro rata portion
of all such assigning Lender's Loans and Commitments hereunder, and (ii) the
parties to such assignment shall execute and deliver to Agent for acceptance
and recording a Assignment and Assumption Agreement together with (x) a
processing and recording fee of $3,500 payable to Agent and (y) each of the
Notes originally delivered to the assigning Lender. Upon receipt of all of the
foregoing, Agent shall notify Borrower of such assignment and Borrower shall
comply with its obligations under the last sentence of subsection 2.1(G). To
the extent of an assignment authorized under this subsection 9.5, upon Agent's
receipt and acceptance of the Assignment and Acceptance Agreement and Agent's
receipt of the recording fee set forth above, the assignee shall be considered
to be a "Lender" hereunder and Borrower hereby acknowledges and agrees that any
assignment will give rise to a direct obligation of Borrower to the assignee.
The assigning Lender shall be relieved of its obligations hereunder with
respect to the assigned portion of its Commitment.
(B) Each Lender may sell participations in all or any part of
any Loans made by it to another Person; provided, that any such participation
shall be in a minimum amount of $5,000,000, and provided, further, that all
amounts payable by Borrower hereunder shall be determined as if that Lender had
not sold such participation and the holder of any such participation shall not
be entitled to require such Lender to take or omit to take any action hereunder
except action directly effecting (a) any reduction in the principal amount or
an interest rate on any Loan in which such holder participates; (b) any
extension of the Termination Date or the date fixed for any payment of interest
payable with respect to any Loan in which such holder participates; and (c) any
release of substantially all of the Collateral. Borrower hereby acknowledges
and agrees that the participant under each participation shall for purposes of
subsections 2.8, 2.9, 2.10, 9.6 and 10.2 be considered to be a "Lender".
(C) Except as otherwise provided in subsection 9.5(A) no
Lender shall, as between Borrower and that Lender, be relieved of any of its
obligations hereunder as a result of any sale, assignment, transfer or
negotiation of, or granting of participation in, all or any part of the Loans
or other Obligations owed to such Lender. Each Lender may furnish any
information concerning Borrower and its Subsidiaries in the possession of that
Lender from time to time to Eligible Assignees and participants (including
prospective assignees and participants)
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provided that the Persons obtaining such information agrees to maintain the
confidentiality of such information to the extent required by subsection 10.18.
(D) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time create a security interest in all or any
portion of its rights under this Agreement or the other Loan Documents in favor
of any Federal Reserve Bank in accordance with Regulation A of the Board of
Governors of the Federal Reserve System.
9.6 Set Off and Sharing of Payments. In addition to any rights
now or hereafter granted under applicable law and not by way of limitation of
any such rights, upon the occurrence and during the continuance of any Event of
Default, each Lender is hereby authorized by Borrower at any time or from time
to time, with reasonably prompt subsequent notice to Borrower or to a directly
affected subsidiary (any prior or contemporaneous notice being hereby expressly
waived) to set off and to appropriate and to apply any and all (a) balances held
by such Lender at any of its offices for the account of Borrower or any of its
Subsidiaries (regardless of whether such balances are then due to Borrower or
its Subsidiaries), and (b) other property at any time held or owing by such
Lender to or for the credit or for the account of Borrower or any of its
Subsidiaries, against and on account of any of the Obligations which are not
paid when due; except that no Lender shall exercise any such right without the
prior written consent of Agent. Any Lender which has exercised its right to set
off shall purchase for cash (and the other Lenders shall sell) participations in
each such other Lender's Pro Rata Share of the Obligations as would be necessary
to cause such Lender to share such excess with each other Lender in accordance
with their respective Pro Rata Shares. Borrower agrees, to the fullest extent
permitted by law, that (a) any Lender may exercise its right to set off with
respect to amounts in excess of its Pro Rata Share of the Obligations and may
sell participations in such excess to other Lenders, and (b) any Lender so
purchasing a participation in the Loans made or other Obligations held by other
Lenders may exercise all rights of set-off, bankers' lien, counterclaim or
similar rights with respect to such participation as fully as if such Lender
were a direct holder of Loans and other Obligations in the amount of such
participation.
9.7 Disbursement of Funds. Agent may, on behalf of Lenders,
disburse funds to Borrower for Loans requested. Each Lender shall reimburse
Agent on demand for all funds disbursed on its behalf by Agent, or if Agent so
requests, each Lender will remit to Agent its Pro Rata Share of any Loan or
Advance before Agent disburses same to Borrower. If Agent elects to require that
funds be made available prior to disbursement to Borrower, Agent shall advise
each Lender by telephone, telex or telecopy of the amount of such Lender's Pro
Rata Share of such requested Loan no later than (a) two Business Days prior to
the Funding Date applicable
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thereto for LIBOR Loans and (b) by 1:00 p.m. Chicago time on the Funding Date
for Base Rate Loans, and each such Lender shall pay Agent such Lender's Pro Rata
Share of such requested Loan, in same day funds, by wire transfer to Agent's
account not later than 10:00 a.m. Chicago time on such Funding Date for LIBOR
Loans and 3:00 p.m. Chicago time for Base Rate Loans.
9.8 Settlements, Payments and Information.
(A) Revolving Advances and Payments; Fee Payments.
(1) Payments of principal in respect of the Term Loans
will be settled on the Business Day received in accordance with the provisions
of Section 2. The Revolving Loan may fluctuate from day to day through Agent's
disbursement of funds to, and receipt of funds from, Borrower. In order to
minimize the frequency of transfers of funds between Agent and each Lender
notwithstanding terms to the contrary set forth in Section 2 and subsection 9.7,
Revolving Advances and repayments (except as set forth in subsection 2.1(E)) may
be settled according to the procedures described in this subsection 9.8.
Notwithstanding these procedures, each Lender's obligation to fund its Pro Rata
Share of Advances made by Agent to Borrower will commence on the date such
Advances are made by Agent. Such payments will be made by such Lender without
set-off, counterclaim or reduction of any kind.
(2) Once each week for the Revolving Loan or more
frequently (including daily), if Agent so elects (each such day being a
"Settlement Date"), Agent will advise each Lender by 1:00 p.m. Chicago time by
telephone, telex, or telecopy of the amount of each such Lender's Pro Rata Share
of the Revolving Loan. In the event payments are necessary to adjust the amount
of such Lender's share of the Revolving Loan to such Lender's Pro Rata Share of
the Revolving Loan, the party from which such payment is due will pay the other,
in same day funds, by wire transfer to the other's account not later than 3:00
p.m. Chicago time on the Settlement Date.
(3) On the first Business Day of each month ("Interest
Settlement Date"), Agent will advise each Lender by telephone, telefax or
telecopy of the amount of interest and fees charged to and collected from
Borrower for the preceding month. Provided that such Lender has made all
payments required to be made by it under this Agreement, Agent will pay to such
Lender, by wire transfer to such Lender's account (as specified by such Lender
on the signature page of this Agreement as amended by such Lender from time to
time after the date hereof or in the applicable Assignment and Assumption
Agreement) not later than 3:00 p.m.
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Chicago time on the Interest Settlement Date such Lender's share of such
interest and such Lender's Pro Rata Share of such fees.
(B) Return of Payments
(1) If Agent pays an amount to a Lender under this
Agreement in the belief or expectation that a related payment has been or will
be received by Agent from Borrower and such related payment is not received by
Agent, then Agent will be entitled to recover such amount from such Lender
without set-off, counterclaim or deduction of any kind.
(2) If Agent determines at any time that any amount
received by Agent under this Agreement must be returned to Borrower or paid to
any other Person pursuant to any solvency law or otherwise, then,
notwithstanding any other term or condition of this Agreement, Agent will not be
required to distribute any portion thereof to any Lender. In addition, each
Lender will repay to Agent on demand any portion of such amount that Agent has
distributed to such Lender, together with interest at such rate, if any, as
Agent is required to pay to Borrower or such other Person, without set-off,
counterclaim or deduction of any kind.
9.9 Dissemination of Information. Agent will provide Lenders with
any information received by Agent from Borrower which is required to be provided
to a Lender hereunder; provided, however, that Agent shall not be liable to
Lenders for any failure to do so, except to the extent that such failure is
attributable to Agent's gross negligence or willful misconduct.
9.10 Discretionary Advances. Agent may, in its sole discretion,
(i) provided that no Event of Default exists, make Revolving Advances of up to
10% in excess of the limitations set forth in the Borrowing Base, but not in
excess of the aggregate Revolving Loan Commitment for a period of not more than
90 consecutive days and (ii) during the continuance of an Event of Default, make
Revolving Advances in excess of the limitations set forth in the Borrowing Base
for the purpose of preserving or protecting the Collateral or for incurring any
costs associated with collection or enforcing rights or remedies against the
Collateral, or incurred in any action to enforce this Agreement or any other
Loan Document.
SECTION 10. MISCELLANEOUS
10.1 Expenses and Attorneys' Fees. Whether or not the transactions
contemplated hereby shall be consummated, Borrower agrees to promptly pay all
fees, costs and expenses incurred in connection with any matters contemplated by
or arising out of this Agreement or the other Loan Documents including the
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following, and all such fees, costs and expenses shall be part of the
Obligations, payable on demand and secured by the Collateral: (a) fees, costs
and expenses incurred by Agent (including attorneys' fees, allocated costs of
internal counsel and fees of environmental consultants, accountants and other
professionals retained by Agent) incurred in connection with the examination,
review, due diligence investigation, documentation and closing of the financing
arrangements evidenced by the Loan Documents; (b) fees, costs and expenses
incurred by Agent (including attorneys' fees, allocated costs of internal
counsel and fees of environmental consultants, accountants and other
professionals retained by Agent) incurred in connection with the review,
negotiation, preparation, documentation, execution, syndication, and
administration of the Loan Documents, the Loans, and any amendments, waivers,
consents, forbearances and other modifications relating thereto or any
subordination or intercreditor agreements; (c) fees, costs and expenses incurred
by Agent or any Lender in creating, perfecting and maintaining perfection of
Liens in favor of Agent, on behalf of Lenders; (d) fees, costs and expenses
incurred by Agent in connection with forwarding to Borrower the proceeds of
Loans including Agent's or any Lenders' standard wire transfer fee; (e) fees,
costs, expenses and bank charges, including bank charges for returned checks,
incurred by Agent or any Lender in establishing, maintaining and handling lock
box accounts, blocked accounts or other accounts for collection of the
Collateral; (f) fees, costs, expenses (including attorneys' fees and allocated
costs of internal counsel) of Agent or any Lender and costs of settlement
incurred in collecting upon or enforcing rights against the Collateral or
incurred in any action to enforce this Agreement or the other Loan Documents or
to collect any payments due from Borrower or any other Loan Party under this
Agreement or any other Loan Document or incurred in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement, whether in the nature of a "workout" or in connection with any
insolvency or bankruptcy proceedings or otherwise.
10.2 Indemnity. In addition to the payment of expenses pursuant to
subsection 10.1, whether or not the transactions contemplated hereby shall be
consummated, Borrower agrees to indemnify, pay and hold Agent and each Lender,
and the officers, directors, employees, agents, consultants, auditors, persons
engaged by Agent or any Lender, to evaluate or monitor the Collateral,
affiliates and attorneys of Agent, Lender and such holders (collectively called
the "Indemnitees") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements of any kind or nature whatsoever (including
the fees and disbursements of counsel for such Indemnitees in connection with
any investigative, administrative or judicial proceeding commenced or
threatened, whether or not such Indemnitee shall be designated a party thereto)
that may be imposed on, incurred by, or asserted against that Indemnitee, in any
manner relating to or arising out of this
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Agreement or the other Loan Documents, the consummation of the transactions
contemplated by this Agreement, the statements contained in the commitment
letters, if any, delivered by Agent or any Lender, Agent's and each Lender's
agreement to make the Loans hereunder, the use or intended use of the proceeds
of any of the Loans or the exercise of any right or remedy hereunder or under
the other Loan Documents (the "Indemnified Liabilities"); provided that Borrower
shall have no obligation to an Indemnitee hereunder with respect to Indemnified
Liabilities arising from the gross negligence or willful misconduct of that
Indemnitee as determined by a court of competent jurisdiction.
10.3 Notices. Unless otherwise specifically provided herein, all
notices shall be in writing addressed to the respective party as set forth
below and may be personally served, telecopied or sent by overnight courier
service or United States mail and shall be deemed to have been given: (a) if
delivered in person, when delivered; (b) if delivered by telecopy, on the date
of transmission if transmitted on a Business Day before 4:00 p.m. Chicago time
or, if not, on the next succeeding Business Day; (c) if delivered by overnight
courier, two days after delivery to such courier properly addressed; or (d) if
by U.S. Mail, four Business Days after depositing in the United States mail,
with postage prepaid and properly addressed.
If to Borrower: XXXXXX AUTOMOTIVE GROUP, INC.
0000 X. XxxXxxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Telecopy No.: (000) 000-0000
With a copy to: Xxxxx Xxxxxx, Esq.
Xxxxxxx & Xxxxxx, LLC
0000 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxx 00000
Telecopy No.: (000) 000-0000
If to Agent or to Xxxxxx: XXXXXX FINANCIAL, INC.
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx, 00000
Attn: Corporate Finance/Account
Executive for Xxxxxx
Automotive
Telecopy No.: (000) 000-0000
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With a copy to: XXXXXX FINANCIAL, INC.
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Legal Department/Corporate
Finance
Telecopy No.: (000) 000-0000
If to any Lender: Its address indicated on the signature page
hereto, in an Assignment and Assumption Agreement or in a notice to Agent and
Borrower or to such other address as the party addressed shall have previously
designated by written notice to the serving party, given in accordance with
this subsection 10.3.
10.4 Survival of Representations and Warranties and Certain
Agreements. All agreements, representations and warranties made herein shall
survive the execution and delivery of this Agreement and the making of the
Loans hereunder. Notwithstanding anything in this Agreement or implied by law
to the contrary, the agreements of Borrower and Lender set forth in subsections
10.1, 10.2, 10.6, 10.11, 10.14, and 10.15 (Borrower's agreement to pay fees,
agreement to indemnify Lender, the reinstatement of Obligations, agreement as
to choice of law and jurisdiction and Borrower's and Lender's waiver of a jury
trial) shall survive the payment of the Loans and the termination of this
Agreement.
10.5 Indulgence Not Waiver. No failure or delay on the part of
Agent, any Lender or any holder of any Note in the exercise of any power, right
or privilege hereunder or under any Note shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other right, power or
privilege.
10.6 Marshaling; Payments Set Aside. Neither Agent nor any Lender
shall be under any obligation to marshal any assets in favor of any Loan Party
or any other party or against or in payment of any or all of the Obligations.
To the extent that any Loan Party makes a payment or payments to Agent and/or
any Lender or Agent and/or any Lender enforces its security interests or
exercise its rights of setoff, and such payment or payments or the proceeds of
such enforcement or setoff or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law,
state or federal law, common law or equitable cause, then to the extent of such
recovery, the Obligations or part thereof originally intended to be satisfied,
and all Liens, rights and remedies therefor, shall be revived and continued in
full force and effect as if such payment had not been made or such enforcement
or setoff had not occurred.
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10.7 Entire Agreement. This Agreement and the other Loan Documents
embody the entire agreement among the parties hereto and supersede all prior
commitments, agreements, representations, and understandings, whether written
or oral, relating to the subject matter hereof, and may not be contradicted or
varied by evidence of prior, contemporaneous, or subsequent oral agreements or
discussions of the parties hereto.
10.8 Severability. The invalidity, illegality or unenforceability
in any jurisdiction of any provision in or obligation under this Agreement or
the other Loan Documents shall not affect or impair the validity, legality or
enforceability of the remaining provisions or obligations under this Agreement,
or the other Loan Documents.
10.9 Lenders' Obligations Several; Independent Nature of Lenders'
Rights. The obligation of each Lender hereunder is several and not joint and
neither Agent nor any Lender shall be responsible for the obligation or
Commitment of any other Lender hereunder. In the event that any Lender at any
time should fail to make a Loan as herein provided, the Lenders, or any of
them, at their sole option, may make the Loan that was to have been made by the
Lender so failing to make such Loan. Nothing contained in any Loan Document and
no action taken by Agent or any Lender pursuant hereto or thereto shall be
deemed to constitute Lenders to be a partnership, an association, a joint
venture or any other kind of entity. The amounts payable at any time hereunder
to each Lender shall be a separate and independent debt, and, provided Agent
fails or refuses to exercise any remedies against Borrower after receiving the
direction of the Requisite Lenders, each Lender shall be entitled to protect
and enforce its rights arising out of this Agreement and it shall not be
necessary for any other Lender to be joined as an additional party in any
proceeding for such purpose.
10.10 Headings. Section and subsection headings in this Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.
10.11 APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF ILLINOIS, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
10.12 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns, provided, however, Borrower may not assign its rights or
obligations hereunder without the written consent of Lenders.
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10.13 No Fiduciary Relationship; No Duty; Limitation of Liabilities.
(A) No provision in this Agreement or in any of the other
Loan Documents and no course of dealing between the parties shall be deemed to
create any fiduciary duty by Agent or any Lender to Borrower.
(B) All attorneys, accountants, appraisers, and other
professional Persons and consultants retained by Agent or any Lender shall have
the right to act exclusively in the interest of Agent or such Lender and shall
have no duty of disclosure, duty of loyalty, duty of care, or other duty or
obligation of any type or nature whatsoever to Borrower or any of Borrower's
shareholders or any other Person.
(C) Neither Agent nor any Lender, nor any affiliate, officer,
director, shareholder, employee, attorney, or agent of Agent or any Lender
shall have any liability with respect to, and Borrower hereby waives, releases,
and agrees not to xxx any of them upon, any claim for any special, indirect,
incidental, or consequential damages suffered or incurred by Borrower in
connection with, arising out of, or in any way related to, this Agreement or
any of the other Loan Documents, or any of the transactions contemplated by
this Agreement or any of the other Loan Documents; provided that Borrower shall
have no obligation to Agent, any Lender, or any affiliate, officer, director,
shareholder, employee, attorney, or agent of Agent or any Lender hereunder with
respect to claims arising from the gross negligence or willful misconduct of
such entity as determined by a court of competent jurisdiction. Borrower hereby
waives, releases, and agrees not to xxx Agent or any Lender or any of Agent's
or any Lender's affiliates, officers, directors, employees, attorneys, or
agents for punitive damages in respect of any claim in connection with, arising
out of, or in any way related to, this Agreement or any of the other Loan
Documents, or any of the transactions contemplated by this Agreement or any of
the transactions contemplated hereby; provided that Borrower shall have no
obligation to Agent, any Lender, or any affiliate, officer, director,
shareholder, employee, attorney, or agent of Agent or any Lender hereunder with
respect to claims arising from the gross negligence or willful misconduct of
such entity as determined by a court of competent jurisdiction.
10.14 CONSENT TO JURISDICTION. BORROWER HEREBY CONSENTS TO THE
JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF XXXX,
STATE OF ILLINOIS AND IRREVOCABLY AGREES THAT, SUBJECT TO AGENT'S ELECTION, ALL
ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS.
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BORROWER EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS. BORROWER HEREBY WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF
PROCESS MAY BE MADE UPON BORROWER BY CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED, ADDRESSED TO BORROWER, AT THE ADDRESS SET FORTH IN THIS
AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE 10 DAYS AFTER THE SAME HAS BEEN
POSTED.
10.15 WAIVER OF JURY TRIAL. BORROWER, AGENT AND EACH LENDER HEREBY
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
BORROWER, AGENT AND EACH LENDER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE
WAIVER IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THAT
EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS.
BORROWER, AGENT AND EACH LENDER WARRANT AND REPRESENT THAT EACH HAS HAD THE
OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.
10.16 Construction. Borrower, Agent and each Lender each
acknowledge that it has had the benefit of legal counsel of its own choice and
has been afforded an opportunity to review this Agreement and the other Loan
Documents with its legal counsel and that this Agreement and the other Loan
Documents shall be construed as if jointly drafted by Borrower, Agent and each
Lender.
10.17 Counterparts; Effectiveness. This Agreement and any
amendments, waivers, consents, or supplements may be executed via telecopier or
facsimile transmission in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed and delivered
shall be deemed an original, but all of which counterparts together shall
constitute one and the same instrument. This Agreement shall become effective
upon the execution of a counterpart hereof by each of the parties hereto.
10.18 Confidentiality. Agent and Lenders shall hold all nonpublic
information obtained pursuant to the requirements hereof and identified as such
by Borrower in accordance with such Person's customary procedures for handling
confidential information of this nature and in accordance with safe and sound
business practices and in any event may make disclosure to such of its
respective
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affiliates, officers, directors, employees, agents and representatives as need
to know such information in connection with the Loans. If any Lender or its
respective affiliates is otherwise a creditor of a Borrower, such Lender may use
the information in connection with its other credits. Agent and Lenders may also
make disclosure reasonably required by a bona fide offeree or assignee (or
participation), or as required or requested by any Governmental Authority or
representative thereof, or pursuant to legal process, or to its accountants,
lawyers and other advisors, and shall require any such offeree or assignee (or
participant) to agree (and require any of its offerees, assignees or
participants to agree) to comply with this Section 10.18. In no event shall
Agent or any Lender be obligated or required to return any materials furnished
by Borrower provided, however, each offeree shall be required to agree that if
it does not become an assignee (or participant) it shall return all materials
furnished to it by Borrower in connection herewith.
SECTION 11. DEFINITIONS AND ACCOUNTING TERMS
11.1 The following terms used in this Agreement shall have the
following meanings:
"Accounts" means all "accounts" (as defined in the UCC), accounts
receivable, contract rights and general intangibles relating thereto, notes,
drafts and other forms of obligations owed to or owned by Borrower arising or
resulting from the sale of goods or the rendering of services, whether or not
earned by performance.
"Additional Mortgaged Property" means all real property owned by
Borrower or its Subsidiaries in which after the Closing Date Agent requires a
mortgage to secure the Obligations.
"Advance" shall mean an advance under the Revolving Loan.
"Affiliate" means any Person (other than Agent or any Lender): (a)
directly or indirectly controlling, controlled by, or under common control
with, any Loan Party; (b) directly or indirectly owning or holding 5% or more
of any equity interest in Borrower; (c) 5% or more of whose stock or other
equity interest having ordinary voting power for the election of directors or
the power to direct or cause the direction of management, is directly or
indirectly owned or held by Borrower; or (d) which has a senior officer who is
also a senior officer of Borrower. For purposes of this definition, "control"
(including with correlative meanings, the terms "controlling", "controlled by"
and "under common control with") means the possession directly or indirectly of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities or other equity
interest, or by contract or otherwise.
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"Agent" means Xxxxxx in its capacity as agent for the Lenders under the
Loan Documents and any successor in such capacity appointed pursuant to
subsection 9.1(G).
"Agent's Account" means ABA No. 0000-0000-0, Account No. 52-98695 at
First National Bank of Chicago, Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx, XX 00000,
Reference: Xxxxxx Corporate Finance for the benefit of Xxxxxx Automotive Group,
Inc.
"Agreement" means this Loan and Security Agreement as it may be
amended, restated, supplemented or otherwise modified from time to time.
"Allied" has the meaning assigned in subsection 7.1(A)(5) hereof.
"Allied Acquisition" has the meaning assigned in subsection 7.1(A)(5)
hereof.
"Allied Note" has the meaning assigned in subsection 7.1(A)(5) hereof.
"Allied Principal Payment" has the meaning assigned in subsection
7.5(C) hereof.
"Asset Disposition" means the disposition, whether by sale, lease,
transfer, loss, damage, destruction, condemnation or otherwise, of any or all of
the assets of Borrower or any of its Subsidiaries other than sales of Inventory
in the ordinary course of business.
"Assignment and Assumption Agreement" shall mean an Assignment and
Assumption Agreement substantially in the form of Exhibit A.
"Bank Letter of Credit" means each letter of credit issued by a bank
acceptable to and approved by Agent for the account of Borrower and supported by
a risk participation agreement issued by Agent.
"Base Rate" means a variable rate of interest per annum equal to the
higher of (a) the rate of interest from time to time published by the Board of
Governors of the Federal Reserve System as the "Bank Prime Loan" rate in Federal
Reserve Statistical Release H.15(519) entitled "Selected Interest Rates" or any
successor publication of the Federal Reserve System reporting the Bank Prime
Loan rate or its equivalent, or (b) the Federal Funds Effective Rate. In the
event the Board of Governors of the Federal Reserve System ceases to publish a
Bank Prime Loan rate or its equivalent, the term "Base Rate" shall mean a
variable rate of interest per
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annum equal to the highest of the "prime rate", "reference rate", "base rate",
or other similar rate announced from time to time by any of the three largest
banks located in New York City, New York (with the understanding that any such
rate may merely be a reference rate and may not necessarily represent the lowest
or best rate actually charged to any customer by any such bank).
"Base Rate Loans" means Loans bearing interest at rates determined by
reference to the Base Rate.
"Borrower's Accountants" means the independent certified public
accountants selected by Borrower and its Subsidiaries and reasonably acceptable
to Agent, which selection shall not be modified during the term of this
Agreement without Agent's prior written consent.
"Borrowing Base" has the meaning assigned to that term in subsection
2.1(B)(2).
"Borrowing Base Certificate" means a certificate and schedule duly
executed by an officer of Borrower appropriately completed and in substantially
the form of Exhibit B.
"Business Day" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the States of Illinois, Pennsylvania
or Texas or is a day on which banking institutions located in any such state
are closed, or for the purposes of LIBOR Loans only, a day on which commercial
banks are open for dealings in Dollar deposits in the London, England (U.K.)
market.
"Capital Expenditures" means all expenditures (including deposits)
for, or contracts for expenditures (excluding contracts for expenditures under
or with respect to Capital Leases, but including cash down payments for assets
acquired under Capital Leases) with respect to any fixed assets or
improvements, or for replacements, substitutions or additions thereto, which
have a useful life of more than one year, including the direct or indirect
acquisition of such assets by way of increased product or service charges,
offset items or otherwise.
"Capital Lease" means any lease of any property (whether real,
personal or mixed) that, in conformity with GAAP, should be accounted for as a
capital lease.
"Cash Equivalents" means: (a) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within six months from the date of acquisition thereof; (b)
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commercial paper maturing no more than six months from the date issued and, at
the time of acquisition, having a rating of at least A-1 from Standard & Poor's
Corporation or at least P-1 from Xxxxx'x Investors Service, Inc.; and (c)
certificates of deposit or bankers' acceptances maturing within six months from
the date of issuance thereof issued by, or overnight reverse repurchase
agreements from any commercial bank organized under the laws of the United
States of America, or any state thereof or the District of Columbia, having
combined capital and surplus of not less than $250,000,000 and not subject to
setoff rights in favor of such bank.
"Closing Date" means March 10, 1999.
"Collateral" has the meaning assigned to that term in subsection 2.7.
"Commitment" or "Commitments" means the commitment or commitments of
Lenders to make Loans as set forth in subsections 2.1(A) and/or 2.1(B) and to
provide Lender Letters of Credit as set forth in subsection 2.1(H).
"Compliance Certificate" means a certificate duly executed by the
chief executive officer or chief financial officer of Borrower appropriately
completed and in substantially the form of Exhibit C.
"Default" means a condition, act or event that, after notice or lapse
of time or both, would constitute an Event of Default if that condition, act or
event were not cured or removed within any applicable grace or cure period.
"Defaulted Amount" means, with respect to any Lender at any time, any
amount required to be paid by such Lender to the Agent or any other Lender
hereunder or under any other Loan Document which has not been so paid.
"Defaulting Lender" means, at any time, any Lender that owes a
Defaulted Amount.
"Default Rate" has the meaning assigned to that term in subsection 2.2.
"EBITDA" means, for any period, without duplication, the total of the
following for Borrower and its Subsidiaries on a consolidated basis, each
calculated for such period: (1) net income determined in accordance with GAAP;
plus, to the extent included in the calculation of net income, (2) the sum of
(a) income and franchise taxes paid or accrued; (b) interest expense, net of
interest income, paid or accrued; (c) amortization and depreciation and (d)
other non-cash charges (including any occurring on an extraordinary or
non-recurring basis, but excluding accruals for cash expenses made in the
ordinary course of business); less, to the
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extent included in the calculation of net income, (3) the sum of (a) the income
of any Person (other than wholly-owned Subsidiaries of Borrower) in which
Borrower or a wholly owned Subsidiary of Borrower has an ownership interest
except to the extent such income is received by Borrower or such wholly-owned
Subsidiary in a cash distribution during such period; (b) gains from sales or
other dispositions of assets (other than Inventory in the normal course of
business); and (c) extraordinary or non-recurring gains.
"Eligible Assignee" shall mean (a) a commercial bank organized under
the laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $100,000,000 (or $250,000,000 in the case of an
assignment of a Revolving Loan Commitment); (b) a commercial bank organized
under the laws of any other country which is a member of the Organization for
Economic Cooperation and Development (the "OECD"), or a political subdivision
of any such country, and having a combined capital and surplus of at least
$100,000,000 (or $250,000,000 in the case of an assignment of a Revolving Loan
Commitment), provided that such bank is acting through a branch or agency
located in the country in which it is organized or another country which is
also a member of the OECD; (c) any other entity which is an "accredited
investor" (as defined in Regulation D under the Securities Act) which extends
credit or buys loans as one of its businesses, including but not limited to,
insurance companies, mutual funds and lease financing companies, and (d) a
Person that is primarily engaged in the business of lending that is (i) a
Subsidiary of a Lender, (ii) a Subsidiary of a Person of which a Lender is a
Subsidiary, or (iii) a Person of which a Lender is a Subsidiary; provided
however, that no Affiliate of Borrower shall be an Eligible Assignee.
"Employee Benefit Plan" means any employee benefit plan within the
meaning of Section 3(3) of ERISA which (a) is maintained for employees of any
Loan Party or any ERISA Affiliate or (b) has at any time within the preceding 6
years been maintained for the employees of any Loan Party or any current or
former ERISA Affiliate.
"Environmental Claims" means claims, liabilities, investigations,
litigation, administrative proceedings, judgments or orders relating to
Hazardous Materials.
"Environmental Laws" means any present or future federal, state or
local law, rule, regulation or order relating to pollution, waste, disposal or
the protection of human health or safety, plant life or animal life, natural
resources or the environment.
"Equipment" means all "equipment" (as defined in the UCC), all
furniture, furnishings, fixtures, machinery, motor vehicles, trucks, trailers,
vessels, aircraft
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and rolling stock and all parts thereof and all additions and accessions thereto
and replacements therefor.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute and all rules and
regulations promulgated thereunder.
"ERISA Affiliate", as applied to any Loan Party, means any Person who
is a member of a group which is under common control with any Loan Party, who
together with any Loan Party is treated as a single employer within the meaning
of Section 414(b) and (c) of the IRC.
"Excess Cash Flow" means, for any period, the greater of (A) zero (0);
or (B) without duplication, the total of the following for Borrower and its
Subsidiaries on a consolidated basis, each calculated for such period: (1)
EBITDA; plus (2) tax refunds actually received; less (3) Capital Expenditures
(to the extent actually made in cash and/or due to be made in cash within such
period but in no event more than the amount permitted by subsection 6.5
hereof); less (4) income and franchise taxes paid or accrued excluding any
provision for deferred taxes included in the determination of net income; less
(5) decreases in deferred income taxes resulting from payments of deferred
taxes accrued in prior periods; less (6) Cash Interest paid or accrued; less
(7) scheduled amortization of Indebtedness actually paid in cash and/or due to
be paid in cash within such period and permitted under subsection 7.5; less (8)
voluntary prepayments made under subsection 2.4(c); less (9) mandatory
prepayments made under subsection 2.4(B)(2), but only to the extent that the
transaction that precipitated the mandatory prepayment increased net income of
Borrower determined in accordance with GAAP.
"Federal Funds Effective Rate" means, for any day, the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers, as published on
the immediately following Business Day by the Board of Governors of the Federal
Reserve System as the Federal Funds Rate or Federal Reserve Statistical Release
H.15(519) entitled "Selected Interest Rates" or any successor publication of
the Federal Reserve System reporting the Federal Funds Effective Rate or its
equivalent or, if such rate is not published for any Business Day, the average
of the quotations for the day of the requested Loan received by Agent from
three Federal funds brokers of recognized standing selected by Agent.
"Fiscal Year" means each twelve month period ending on February 25th
in each year.
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"Fixed Charge Coverage" means, for any period, Operating Cash Flow
divided by Fixed Charges.
"Fixed Charges" means, for any period, and each calculated for such
period (without duplication), (a) Interest Expense of Borrower and its
Subsidiaries; plus (b) scheduled payments of principal with respect to all
Indebtedness of Borrower and its Subsidiaries; plus (c) any provision for (to
the extent it is greater than zero) income or franchise taxes included in the
determination of net income, excluding any provision for deferred taxes; plus
(d) payment of deferred taxes accrued in any prior period; plus (e) Restricted
Junior Payments made in cash to the extent permitted under subsection 7.5.
"Funding Date" means the date of each funding of a Loan or issuance of
a Lender Letter of Credit.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board that are applicable to the
circumstances as of the date of determination.
"Hazardous Material" means all or any of the following: (a) substances
that are defined or listed in, or otherwise classified pursuant to, any
Environmental Laws or regulations as "hazardous substances", "hazardous
materials", "hazardous wastes", "toxic substances" or any other formulation
intended to define, list or classify substances by reason of deleterious
properties such as ignitability, corrosivity, reactivity, carcinogenicity, or
toxicity; (b) oil, petroleum or petroleum derived substances, natural gas,
natural gas liquids or synthetic gas and drilling fluids, produced waters and
other wastes associated with the exploration, development or production of
crude oil, natural gas or geothermal resources; (c) any flammable substances or
explosives or any radioactive materials; and (d) asbestos in any form or
electrical equipment which contains any oil or dielectric fluid containing
polychlorinated biphenyls.
"Indebtedness", as applied to any Person, means without duplication:
(a) all indebtedness for borrowed money; (b) obligations under leases which in
accordance with GAAP constitute Capital Leases; (c) notes payable and drafts
accepted representing extensions of credit whether or not representing
obligations for borrowed money; (d) any obligation owed for all or any part of
the deferred purchase price of property or services if the purchase price is
due more than six months from the date the obligation is incurred or is
evidenced by a note or similar written instrument; (e) all indebtedness secured
by any Lien on any property or asset
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owned or held by that Person regardless of whether the indebtedness secured
thereby shall have been assumed by that Person or is non recourse to the credit
of that Person and (f) obligations in respect of letters of credit.
"Intangible Assets" means all intangible assets (determined in
conformity with GAAP) including, without limitation, goodwill, Intellectual
Property, licenses, organizational costs, deferred amounts, covenants not to
compete, unearned income and restricted funds.
"Intellectual Property" means all present and future designs, patents,
patent rights and applications therefor, trademarks and registrations or
applications therefor, trade names, inventions, copyrights and all applications
and registrations therefor, software or computer programs, license rights,
trade secrets, methods, processes, know-how, drawings, specifications,
descriptions, and all memoranda, notes and records with respect to any research
and development, whether now owned or hereafter acquired, all goodwill
associated with any of the foregoing, and proceeds of all of the foregoing,
including, without limitation, proceeds of insurance policies thereon.
"Interest Coverage" means, for any period, Operating Cash Flow divided
by Interest Expense.
"Interest Determination Date" for a LIBOR Loan will be the third
Business Day preceding the beginning of the next Interest Period elected by
Borrower.
"Interest Expense" means, without duplication, for any period, the
following, for Borrower and its Subsidiaries each calculated for such period:
interest expenses deducted in the determination of net income (excluding (i)
the amortization of fees and costs with respect to the transactions
contemplated by this Agreement which have been capitalized as transaction costs
in accordance with the provisions of subsection 11.2; and (ii) interest paid in
kind).
"Interest Period" In connection with each LIBOR Loan, Borrower shall
elect an interest period (each an "Interest Period") to be applicable to such
Loan, which Interest Period shall be either a one, two, three, or six month
period; provided that:
(1) the initial Interest Period for any LIBOR Loan shall commence on
the Funding Date of such Loan;
(2) in the case of successive Interest Periods, each successive
Interest Period shall commence on the day on which the immediately preceding
Interest Period expires;
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(3) if an Interest Period expiration date is not a Business Day, such
Interest Period shall expire on the next succeeding Business Day; provided that
if any Interest Period expiration date is not a Business Day but is a day of
the month after which no further Business Day occurs in such month, such
Interest Period shall expire on the immediately preceding Business Day;
(4) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall, subject to
part (5) below, end on the last Business Day of a calendar month;
(5) no Interest Period shall extend beyond the Termination Date;
(6) no Interest Period may extend beyond a scheduled principal payment
date unless the sum of (a) the aggregate principal amount of Loans that are
Base Rate Loans or that have Interest Periods expiring on or before such date
and (b) the available, unused Revolving Loan Commitment or Borrowing Base
equals or exceeds the principal amount required to be paid on the Loans on such
date; and
(7) there shall be no more than 5 Interest Periods relating to LIBOR
Loans outstanding at any time.
"Inventory" means all "inventory" (as defined in the UCC), including,
without limitation, finished goods, raw materials, work in process and other
materials and supplies used or consumed in a Person's business, and goods which
are returned or repossessed.
"IRC" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor statute and all rules and regulations promulgated
thereunder.
"Lender Letter of Credit" has the meaning assigned to that term in
subsection 2.1(F).
"Letter of Credit Liability" means, all reimbursement and other
liabilities of Borrower or any of its Subsidiaries with respect to each Lender
Letter of Credit, whether contingent or otherwise, including: (a) the amount
available to be drawn or which may become available to be drawn; (b) all amounts
which have been paid or made available by any Lender issuing a Lender Letter of
Credit or any bank issuing a Bank Letter of Credit to the extent not reimbursed;
and (c) all unpaid interest, fees and expenses related thereto.
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"Letter of Credit Reserve" means, at any time, an amount equal to (a)
the aggregate amount of Letter of Credit Liability with respect to all Lender
Letters of Credit outstanding at such time plus, without duplication, (b) the
aggregate amount theretofore paid by Agent or any Lender under Lender Letters
of Credit and not debited to the Loan Account pursuant to subsection 2.1(H)(2)
or otherwise reimbursed by Borrower.
"Liabilities" shall have the meaning given that term in accordance
with GAAP and shall include Indebtedness.
"LIBOR" means, for each Interest Period, a rate equal to the rate for
deposits in U.S. Dollars for the relevant Interest Period, commencing on the
second London Banking Day immediately following that Interest Determination
Date, that appears on the Telerate Page 3750 as of 11:00 a.m., London time, on
that Interest Determination Date ("LIBOR Telerate"); provided that if no rate
appears on the Telerate Page 3750, LIBOR in respect of that Interest
Determination Date will be determined on the basis of the rates at which
deposits in Dollars for the relevant Interest Period are offered at
approximately 11:00 a.m. London time, on that Interest Determination Date by
four major banks in the London interbank market selected by Agent ("Reference
Banks") to prime banks in the London interbank market commencing on the second
London Banking Day immediately following that Interest Determination Date and in
a principal amount equal to an amount of not less than $1,000,000 that is
representative for a single transaction in such market at such time. Agent will
request the principal London office of each of the Reference Banks to provide a
quotation of its rate. If at least two such quotations are provided, LIBOR in
respect of that Interest Determination Date will be the arithmetic mean of such
quotations. If fewer than two quotations are provided, LIBOR in respect of that
Interest Determination Date will be the arithmetic mean of the rates quoted at
approximately 11:00 a.m. New York City time, on that Interest Determination Date
by three major banks in the City of New York selected by Agent for loans in
Dollars to leading European banks for the relevant Interest Period commencing on
the second London Banking Day immediately following that Interest Determination
Date and in a principal amount equal to an amount of not less than $1,000,000
that is representative for a single transaction in such market at such time;
provided, however, that if the banks selected as aforesaid by Agent are not
quoting as mentioned in this sentence, LIBOR with respect to such Interest
Determination Date will be the rate of LIBOR in effect on the last most recent
date such banks were quoting. "Telerate Page 3750" means the display designated
as page "3750" on the Telerate Services (or such other page as may replace the
3750 page on that service or such other service or services as may be nominated
by the British Bankers' Association for the purpose of displaying London
interbank offered
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rates for Dollar deposits).
The rate determined pursuant to the foregoing shall be divided by a
number equal to 1.0 minus the aggregate (but without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on the day
which is two (2) Business Days prior to the beginning of such Interest Period
(including, without limitation, basic, supplemental, marginal, special emergency
or other reserves under any regulations of the Board of Governors of the Federal
Reserve System or other governmental authority having jurisdiction with respect
thereto, as now and from time to time in effect) for Eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D of such
Board) which are required to be maintained by a member bank of the Federal
Reserve System (such rate to be adjusted to the nearest (1/16 of 1%) or, if
there is not a nearest (1/16 of 1%), to the next higher (1/16 of 1%).
"LIBOR Loans" means at any time that portion of the Loans bearing
interest at rates determined by reference to LIBOR.
"Lien" means any lien, mortgage, pledge, security interest, charge or
encumbrance of any kind, whether voluntary or involuntary, (including any
conditional sale or other title retention agreement, any lease in the nature
thereof, and any agreement to give any security interest).
"Loan" or "Loans" means an advance or advances under the Term Loan
Commitment or the Revolving Loan Commitment.
"Loan Documents" means this Agreement and all other documents,
instruments and agreements executed by or on behalf of Borrower, Borrower's
Subsidiaries and delivered concurrently herewith or at any time hereafter to or
for Agent or any Lender in connection with the Loans, any Lender Letter of
Credit, and any other transaction contemplated by this Agreement, all as
amended, restated, supplemented or modified from time to time.
"Loan Party" means each of Borrower, Borrower's Subsidiaries, and any
other Person (other than Agent or any Lender) which is or becomes a party to
any Loan Document.
"Loan Year" means each period of 12 consecutive months commencing on
the Closing Date and on each anniversary thereof.
"London Banking Day" means any day on which dealings in deposits in
U.S. dollars are transacted in the London Interbank market.
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"Material Adverse Effect" means a material adverse effect upon (a) the
business, operations, prospects, properties, assets or condition (financial or
otherwise) of any Loan Party on an individual basis or taken as a whole or (b)
the ability of any Loan Party to perform its obligations under any Loan
Document to which it is a party or of Agent or any Lender to enforce or collect
any of the Obligations.
"Maximum Revolving Loan Amount" has the meaning assigned to that term
in subsection 2.1(B)(1).
"Minimum Availability" means that Borrower has, on average, not less
than $3,000,000 in funds available for borrowing under the Revolving Loan
Commitment, as computed by averaging the available funds under the Revolving
Loan Commitment for a 60 Business Day period composed of the 30 Business Days
immediately preceding the proposed Allied Principal Payment, and a reasonable,
good faith projection of such available funds 30 Business Days immediately
following the proposed Allied Principal Payment.
"Mortgage" means each of the mortgages, deeds of trust, leasehold
mortgages, leasehold deeds of trust, collateral assignments of leases or other
real estate security documents delivered by any Loan Party to Agent, on behalf
of Lenders, with respect to Mortgaged Property or Additional Mortgaged
Property, all in form and substance satisfactory to Agent.
"Mortgaged Property" means the real property owned by Borrower or its
Subsidiaries as described on Schedule 1.1(A).
"Net Worth" means, as of any date, the sum of the capital stock and
additional paid-in capital plus retained earnings (or less accumulated deficit)
calculated in conformity with GAAP.
"Notes" means the Revolving Notes and the Term Notes.
"Notice of Borrowing" means a Notice duly executed by an authorized
representative of Borrower appropriately completed and in the form of Exhibit
D.
"Obligations" means all obligations, liabilities and indebtedness of
every nature of each Loan Party from time to time owed to Agent or to any
Lender under the Loan Documents (whether incurred before or after the
Termination Date) including the principal amount of all debts, claims and
indebtedness, accrued and unpaid interest and all fees, costs and expenses,
whether primary, secondary,
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direct, contingent, fixed or otherwise, heretofore, now and/or from time to time
hereafter owing, due or payable including, without limitation, all interest,
fees, cost and expenses accrued or incurred after the filing of any petition
under any bankruptcy or insolvency law.
"Operating Cash Flow" means, for any period, (a) EBITDA; less (b)
unfinanced Capital Expenditures.
"Permitted Encumbrances" means the following types of Liens: (a) Liens
(other than Liens relating to Environmental Claims or ERISA) for taxes,
assessments or other governmental charges not yet due and payable; (b)
statutory Liens of landlords, carriers, warehousemen, mechanics, materialmen
and other similar liens imposed by law, which are incurred in the ordinary
course of business for sums not more than 30 days delinquent; (c) Liens (other
than any Lien imposed by ERISA) incurred or deposits made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance and other types of social security, statutory obligations, surety and
appeal bonds, bids, leases, government contracts, trade contracts, performance
and return-of-money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money); (d) easements, rights-of-way,
restrictions, and other similar charges or encumbrances not interfering in any
material respect with the ordinary conduct of the business of any Loan Party or
any of its Subsidiaries; (e) Liens for purchase money obligations, provided
that (i) the purchase of the asset subject to any such Lien is permitted under
subsection 6.5, (ii) the Indebtedness secured by any such Lien is permitted
under subsection 7.1, and (iii) such Lien encumbers only the asset so
purchased; (f) Liens in favor of Agent, on behalf of Lenders, and (g) Liens set
forth on Schedule 7.3(B).
"Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, joint ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or
other organizations, whether or not legal entities, and governments and
agencies and political subdivisions thereof.
"Pro Forma" means the unaudited, consolidated and consolidating balance
sheet of Borrower and its Subsidiaries as of the Closing Date after giving
effect to the transactions contemplated by this Agreement. The Pro Forma is
attached hereto as Schedule 4.3.
"Pro Rata Share" means (a) with respect to matters relating to a
particular Commitment of a Lender, the percentage obtained by dividing (i) such
Commitment
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of that Lender by (ii) all such Commitments of all Lenders and (b) with respect
to all other matters, the percentage obtained by dividing (i) the Total Loan
Commitment of a Lender by (ii) the Total Loan Commitments of all Lenders, in
either case as such percentage may be adjusted by assignments permitted pursuant
to subsection 9.5; provided, however, if any Commitment is terminated pursuant
to the terms hereof, then "Pro Rata Share" means the percentage obtained by
dividing (x) the aggregate amount of such Lender's outstanding Loans related to
such Commitment by (y) the aggregate amount of all outstanding Loans related to
such Commitment.
"Projections" means Borrower's forecasted consolidated and
consolidating: (a) balance sheets; (b) profit and loss statements; (c) cash
flow statements; and (d) capitalization statements, all prepared on a division
by division and Subsidiary by Subsidiary basis consistent with Borrower's
historical financial statements and based upon good faith estimates and
assumptions by Borrower believed to be reasonable at the time made, together
with appropriate supporting details and a statement of underlying assumptions.
"Requisite Lenders" means Lenders, (other than a Defaulting Lender),
holding or being responsible for 66.67% or more of the sum of (a) outstanding
Loans, (b) outstanding Letter of Credit Liability and (c) unutilized
Commitments of all Lenders which are not Defaulting Lenders.
"Restricted Junior Payment" means: (a) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
stock of Borrower or any of its Subsidiaries now or hereafter outstanding,
except a dividend payable solely with shares of the class of stock on which
such dividend is declared; (b) any payment or prepayment of principal of,
premium, if any, or interest on, or any redemption, conversion, exchange,
retirement, defeasance, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any Indebtedness or any shares of
any class of stock of Borrower or any of its Subsidiaries now or hereafter
outstanding, or the issuance of a notice of an intention to do any of the
foregoing; (c) any payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any class of
stock of Borrower or any of its Subsidiaries now or hereafter outstanding; and
(d) any payment by Borrower or any of its Subsidiaries of any management,
consulting or similar fees to any Affiliate, whether pursuant to a management
agreement or otherwise.
"Revolving Advance" means each advance made by Lender(s) pursuant to
subsection 2.1 (B).
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"Revolving Loan" means the outstanding balance of all Revolving
Advances and any amounts added to the principal balance of the Revolving Loan
pursuant to this Agreement.
"Revolving Loan Commitment" means (a) as to any Lender, the commitment
of such Lender to make Revolving Advances pursuant to subsection 2.1 (B), and
to purchase participations in Lender Letters of Credit pursuant to subsection
2.1(H) in the aggregate amount set forth on the signature page of this
Agreement opposite such Lender's signature or in the most recent Assignment and
Assumption Agreement, if any, executed by such Lender and (b) as to all
Lenders, the aggregate commitment of all Lenders to make Revolving Advances and
to purchase participations in Lender Letters of Credit.
"Revolving Note" means each promissory note of Borrower in form and
substance reasonably acceptable to Agent, issued to evidence the Revolving Loan
Commitments.
"Scheduled A-1 Installment" has the meaning assigned to that term in
subsection 2.1(A)(1).
"Scheduled A-2 Installment" has the meaning assigned to that term in
subsection 2.1(A)(2).
"Scheduled B Installment" has the meaning assigned to that term in
subsection 2.1(A)(3).
"Second Allied Note Payment" has the meaning assigned to that term in
subsection 7.1(A)(6).
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of stock (or equivalent ownership or controlling interest)
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
subsidiaries of that Person or a combination thereof.
"Tangible Net Worth" of any Person means as of any date, an amount
equal to: (a) Net Worth of such Person; less (b) Intangible Assets of such
Person; less (c) all obligations owed to such Person by any Affiliate of such
Person or any of its Subsidiaries; and less (d) all loans by such Person to its
officers, stockholders, Subsidiaries or employees (determined in each case in
conformity with GAAP).
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"Term Loans" mean(s) the unpaid balance of the term loans made pursuant
to subsection 2.1(A).
"Term Loan A-1" means the advance made pursuant to subsection
2.1(A)(1).
"Term Loan A-2" means the advance made pursuant to subsection
2.1(A)(2).
"Term Loan A-2 Closing Date" means the date the Allied Acquisition is
completed to Agent's satisfaction in accordance with the conditions set forth in
this Agreement and in the other Loan Documents, which shall in no event be later
than April __, 1999.
"Term Loan B" means the advance made pursuant to subsection 2.1(A)(3).
"Term Loan Commitment" means (a) as to any Lender, the commitment of
such Lender to make its Pro Rata share of the Term Loans in the maximum
aggregate amount set forth on the signature page of this Agreement opposite such
Lender's signature or in the most recent Assignment and Assumption Agreements,
if any, executed by such Lender and (b) as to all Lenders, the aggregate
commitment of all Lenders to make the Term Loans.
"Term Note" or "Term Notes" means each promissory note of Borrower in
form and substance acceptable to Agent, issued to evidence the Term Loan
Commitments.
"Termination Date" means the date set forth in subsection 2.5.
"Total Loan Commitment" means as to any Lender the aggregate
commitments of such Lender with respect to its Revolving Loan Commitment and
Term Loan Commitment.
"UCC" means the Uniform Commercial Code as in effect on the date
hereof in the State of Illinois, as amended from time to time, and any
successor statute.
"Working Capital" means as to any Person: (a) current assets; less (b)
current liabilities; and less (c) the amount of any obligations owed to such
Person or any of its Subsidiaries by any Affiliate of such Person or any of its
Subsidiaries.
11.2 Accounting Terms. For purposes of this Agreement, all accounting
terms not otherwise defined herein shall have the meanings assigned to such
terms in conformity with GAAP. Financial statements and other information
furnished to
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Agent or any Lender pursuant to subsection 5.1 shall be prepared in accordance
with GAAP (as in effect at the time of such preparation) on a consistent basis.
In the event any "Accounting Changes" (as defined below) shall occur and such
changes affect financial covenants, standards or terms in this Agreement, then
Borrower and Lenders agree to enter into negotiations in order to amend such
provisions of this Agreement so as to equitably reflect such Accounting Changes
with the desired result that the criteria for evaluating the financial condition
of Borrower shall be the same after such Accounting Changes as if such
Accounting Changes had not been made, and until such time as such an amendment
shall have been executed and delivered by Borrower and Requisite Lenders, (A)
all financial covenants, standards and terms in this Agreement shall be
calculated and/or construed as if such Accounting Changes had not been made, and
(B) Borrower shall prepare footnotes to each Compliance Certificate and the
financial statements required to be delivered hereunder that show the
differences between the financial statements delivered (which reflect such
Accounting Changes) and the basis for calculating financial covenant compliance
(without reflecting such Accounting Changes). "Accounting Changes" means: (a)
changes in accounting principles required by GAAP and implemented by Borrower;
(b) changes in accounting principles recommended by Borrower's Accountants; and
(c) changes in carrying value of Borrower's or any of its Subsidiaries' assets,
liabilities or equity accounts resulting from (i) the application of purchase
accounting principles (A.P.B. 16 and/or 17 and EITF 88-16 and FASB 109) to the
Borrower's acquisition of substantially all assets of (x) U.S. Parts
Corporation, (y) Allied Distributing Co. of Houston, Inc. and its wholly owned
subsidiary Auto Parts Investment Group, Inc. and (z) Automotive & Industrial
Supply Co., Inc. or (ii) any other adjustments that, in each case, were
applicable to, but not included in, the Pro Forma. All such adjustments
resulting from expenditures made subsequent to the Closing Date (including, but
not limited to, capitalization of costs and expenses or payment of pre-Closing
Date liabilities) shall be treated as expenses in the period the expenditures
are made and deducted as part of the calculation of EBITDA in such period.
11.3 Other Definitional Provisions. References to "Sections",
"subsections", "Riders", "Exhibits", "Schedules" and "Addendums" shall be to
Sections, subsections, Riders, Exhibits, Schedules and Addendums, respectively,
of this Agreement unless otherwise specifically provided. Any of the terms
defined in subsection 11.1 may, unless the context otherwise requires, be used
in the singular or the plural depending on the reference. In this Agreement,
words importing any gender include the other genders; the words "including,"
"includes" and "include" shall be deemed to be followed by the words "without
limitation"; references to agreements and other contractual instruments shall be
deemed to include subsequent amendments, assignments, and other modifications
thereto, but only to the extent
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such amendments, assignments and other modifications are not prohibited by the
terms of this Agreement or any other Loan Document; references to Persons
include their respective permitted successors and assigns or, in the case of
governmental Persons, Persons succeeding to the relevant functions of such
Persons; and all references to statutes and related regulations shall include
any amendments of same and any successor statutes and regulations.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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Witness the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
BORROWER: LENDERS:
XXXXXX AUTOMOTIVE GROUP, INC. XXXXXX FINANCIAL, INC.
By: By:
------------------------- ----------------------
Name: Xxxxxxx X. Xxxxxx Name:
Title: Chairman Title:
FEIN: -------------------
---------------------
Revolving Loan Commitment:
$21,666,684.00
Term A-1 Loan Commitment:
$638,889.40
Term A-2 Loan Commitment:
$472,222.60
Term B Loan Commitment:
$2,222,224.00
FINOVA CAPITAL CORPORATION
By:
----------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice-President
Revolving Loan Commitment:
$4,333,329.00
Term A-1 Loan Commitment:
$127,777.65
Term A-2 Loan Commitment:
$94,444.35
Term B Loan Commitment:
$444,444.00
BANK ONE, TEXAS, N.A.
By:
----------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
Revolving Loan Commitment:
$12,999,987.00
Term A-1 Loan Commitment:
$383,332.95
Term A-2 Loan Commitment:
$283,333.05
Term B Loan Commitment:
$1,333,332.00
Loan & Security Agreement
