CREDIT AGREEMENT Dated as of February 28, 2005 among TURBOCHEF TECHNOLOGIES, INC., as the Borrower, THE SUBSIDIARIES OF THE BORROWER, as the Guarantors, and BANK OF AMERICA, N.A., as the Lender
Exhibit 99.1
Dated as
of February 28, 2005
among
TURBOCHEF
TECHNOLOGIES, INC.,
as the
Borrower,
THE
SUBSIDIARIES OF THE BORROWER,
as the
Guarantors,
and
BANK OF
AMERICA, N.A.,
as the
Lender
TABLE OF
CONTENTS
Page
ARTICLE
I DEFINITIONS AND ACCOUNTING TERMS |
1 | |
1.01 |
Defined
Terms. |
1 |
1.02 |
Other
Interpretive Provisions. |
15 |
1.03 |
Accounting
Terms. |
15 |
1.04 |
Rounding. |
16 |
1.05 |
References
to Agreements and Laws. |
16 |
1.06 |
Times
of Day. |
16 |
1.07 |
Letter
of Credit Amounts. |
16 |
ARTICLE
II THE COMMITMENT AND CREDIT EXTENSIONS |
16 | |
2.01 |
Revolving
Loans. |
16 |
2.03 |
Prepayments. |
21 |
2.04 |
Termination
or Reduction of Commitment. |
21 |
2.05 |
Repayment
of Loans. |
21 |
2.06 |
Interest. |
21 |
2.07 |
Fees. |
22 |
2.09 |
Evidence
of Debt. |
22 |
2.10 |
Payments
Generally. |
23 |
ARTICLE
III TAXES, YIELD PROTECTION AND ILLEGALITY |
23 | |
3.01 |
Taxes. |
23 |
3.02 |
Increased
Cost and Reduced Return; Capital Adequacy. |
24 |
3.03 |
Matters
Applicable to all Requests for Compensation. |
24 |
3.04 |
Survival. |
24 |
ARTICLE
IV GUARANTY |
24 | |
4.01 |
The
Guaranty. |
24 |
4.02 |
Obligations
Unconditional. |
25 |
4.03 |
Reinstatement. |
25 |
4.04 |
Certain
Additional Waivers. |
26 |
4.05 |
Remedies. |
26 |
4.06 |
Rights
of Contribution. |
26 |
4.07 |
Guarantee
of Payment; Continuing Guarantee. |
26 |
ARTICLE
V CONDITIONS PRECEDENT TO CREDIT EXTENSIONS |
27 | |
5.01 |
Conditions
of Initial Credit Extension. |
27 |
5.02 |
Conditions
to all Credit Extensions. |
28 |
ARTICLE
VI REPRESENTATIONS AND WARRANTIES |
29 | |
6.01 |
Existence,
Qualification and Power. |
29 |
6.02 |
Authorization;
No Contravention. |
30 |
6.03 |
Governmental
Authorization; Other Consents. |
30 |
6.04 |
Binding
Effect. |
30 |
6.05 |
Financial
Statements; No Material Adverse Effect. |
30 |
6.06 |
Litigation. |
31 |
6.07 |
No
Default. |
31 |
6.08 |
Ownership
of Property; Liens. |
31 |
i
6.09 |
Environmental
Compliance. |
31 |
6.10 |
Insurance. |
32 |
6.11 |
Taxes. |
32 |
6.12 |
ERISA
Compliance. |
32 |
6.13 |
Subsidiaries. |
33 |
6.14 |
Margin
Regulations; Investment Company Act; Public Utility Holding Company
Act. |
33 |
6.15 |
Disclosure. |
33 |
6.16 |
Compliance
with Laws. |
34 |
6.17 |
Intellectual
Property; Licenses, Etc. |
34 |
6.18 |
Labor
Matters. |
34 |
6.19 |
Business
Locations. |
34 |
6.20 |
Solvency. |
35 |
6.21 |
Perfection
of Security Interests in the Collateral. |
35 |
ARTICLE
VII AFFIRMATIVE COVENANTS |
35 | |
7.01 |
Financial
Statements. |
35 |
7.02 |
Certificates;
Other Information. |
36 |
7.03 |
Notices. |
37 |
7.04 |
Payment
of Obligations. |
37 |
7.05 |
Preservation
of Existence, Etc. |
38 |
7.06 |
Maintenance
of Properties. |
38 |
7.07 |
Maintenance
of Insurance. |
38 |
7.08 |
Compliance
with Laws. |
38 |
7.09 |
Books
and Records. |
38 |
7.10 |
Inspection
Rights. |
38 |
7.11 |
Use
of Proceeds. |
39 |
7.12 |
Additional
Subsidiaries. |
39 |
7.13 |
ERISA
Compliance. |
39 |
7.14 |
Pledged
Assets. |
39 |
7.15 |
Cash
Management Accounts. |
39 |
7.16 |
Dissolution
of Subsidiary. |
39 |
7.17 |
Post-Closing
Deliverables. |
39 |
ARTICLE
VIII NEGATIVE COVENANTS |
40 | |
8.01 |
Liens. |
40 |
8.02 |
Investments. |
42 |
8.03 |
Indebtedness. |
42 |
8.04 |
Fundamental
Changes. |
43 |
8.05 |
Dispositions. |
43 |
8.06 |
Restricted
Payments. |
43 |
8.07 |
Change
in Nature of Business. |
44 |
8.08 |
Transactions
with Affiliates and Insiders. |
44 |
8.09 |
Burdensome
Agreements. |
44 |
8.10 |
Use
of Proceeds. |
44 |
8.11 |
Minimum
Consolidated EBITDA. |
45 |
8.12 |
Capital
Expenditures. |
45 |
8.13 |
Amendments. |
45 |
8.14 |
Organization
Documents; Fiscal Year. |
45 |
ii
8.15 |
Ownership
of Subsidiaries. |
45 |
8.16 |
Sale
Leasebacks. |
46 |
ARTICLE
IX EVENTS OF DEFAULT AND REMEDIES |
46 | |
9.01 |
Events
of Default. |
46 |
9.02 |
Remedies
Upon Event of Default. |
48 |
9.03 |
Application
of Funds. |
48 |
ARTICLE
X MISCELLANEOUS |
49 | |
10.01 |
Amendments,
Etc. |
49 |
10.02 |
Notices
and Other Communications; Facsimile Copies. |
49 |
10.03 |
No
Waiver; Cumulative Remedies. |
49 |
10.04 |
Attorney
Costs, Expenses and Taxes. |
50 |
10.05 |
Indemnification
by the Borrower. |
50 |
10.06 |
Payments
Set Aside. |
51 |
10.07 |
Successors
and Assigns. |
51 |
10.08 |
Set-off. |
52 |
10.09 |
Interest
Rate Limitation. |
52 |
10.10 |
Counterparts. |
52 |
10.11 |
Integration. |
52 |
10.12 |
Survival
of Representations and Warranties. |
52 |
10.13 |
Severability. |
53 |
10.14 |
Confidentiality. |
53 |
10.15 |
Governing
Law. |
54 |
10.16 |
Waiver
of Jury Trial. |
54 |
10.17 |
U.S.
Patriot Act Notice. |
54 |
iii
SCHEDULES
6.13 |
Subsidiaries |
6.17 |
IP
Rights |
6.19(a) |
Real
Property Locations |
6.19(b)
|
Tangible
Personal Property Locations |
6.19(c) |
Chief
Executive Office Locations |
8.01 |
Liens
Existing on the Closing Date |
8.02 |
Investments
Existing on the Closing Date |
8.03 |
Indebtedness
Existing on the Closing Date |
10.02 |
Notice
Addresses |
EXHIBITS
A |
Form
of Loan Notice |
B |
Form
of Revolving Note |
C |
Form
of Compliance Certificate |
D |
Form
of Borrowing Base Certificate |
E |
Form
of Joinder Agreement |
iv
This
CREDIT AGREEMENT is entered into as of February 28, 2005 among TURBOCHEF
TECHNOLOGIES, INC., a Delaware corporation (the “Borrower”), the
Guarantors (defined herein) and BANK OF AMERICA, N.A. (the “Lender”).
The
Borrower has requested that the Lender provide a $10,000,000 revolving credit
facility for the purposes set forth herein, and the Lender is willing to do so
on the terms and conditions set forth herein.
In
consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:
ARTICLE
I
DEFINITIONS
AND ACCOUNTING TERMS
1.01 Defined
Terms.
As used
in this Agreement, the following terms shall have the meanings set forth
below:
“Acquisition”, by any
Person, means the acquisition by such Person, in a single transaction or in a
series of related transactions, all or any substantial portion of the Property
of another Person or at least a majority of the Voting Stock of another Person,
in each case whether or not involving a merger or consolidation with such other
Person and whether for cash, property, services, assumption of Indebtedness,
securities or otherwise.
“Affiliate” means,
with respect to any Person, another Person that directly, or indirectly through
one or more intermediaries, Controls or is Controlled by or is under common
Control with the Person specified. “Control” means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability
to exercise voting power, by contract or otherwise. “Controlling” and
“Controlled” have
meanings correlative thereto. Without limiting the generality of the foregoing,
a Person shall be deemed to be Controlled by another Person if such other Person
possesses, directly or indirectly, power to vote 5% or more of the securities
having ordinary voting power for the election of directors, managing general
partners or the equivalent.
“Agreement” means
this Credit Agreement, as amended, modified, supplemented and extended from time
to time.
“Attributable
Indebtedness” means,
on any date, (a) in respect of any capital lease of any Person, the capitalized
amount thereof that would appear on a balance sheet of such Person prepared as
of such date in accordance with GAAP, (b) in respect of any Synthetic Lease of
any Person, the capitalized amount of the remaining lease payments under the
relevant lease that would appear on a balance sheet of such Person prepared as
of such date in accordance with GAAP if such lease were accounted for as a
capital lease and (c) in respect of any Securitization Transaction of any
Person, the outstanding principal amount of such financing, after taking into
account reserve accounts and making appropriate adjustments, determined by the
Lender in its reasonable judgment.
“Audited
Financial Statements” means
the audited balance sheet of the Borrower and its Subsidiaries as of December
31, 2003, and the related statements of income or operations, consolidated and
consolidating shareholders' equity and cash flows for the year ended December
31, 2003 for the Borrower and its Subsidiaries, including the notes
thereto.
1
“Base
Rate” means
for any day a fluctuating rate per annum equal to the higher of (a) the Federal
Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as
publicly announced from time to time by the Lender as its “prime rate.” The
“prime rate” is a rate set by the Lender based upon various factors including
the Lender’s costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate. Any change in the “prime rate”
announced by the Lender shall take effect at the opening of business on the day
specified in the public announcement of such change.
“Base
Rate Loan” means a
Revolving Loan that bears interest based on the Base Rate.
“Borrower” has the
meaning specified in the introductory paragraph hereto.
“Borrowing
Base” means,
as of any day, 75% of Eligible Receivables, as set forth in the most recent
Borrowing Base Certificate delivered to the Lender in accordance with the terms
of Section
7.02(b).
“Borrowing
Base Certificate” shall
have the meaning assigned to such term in Section
7.02(b).
“Business
Day” means
any day other than a Saturday, Sunday or other day on which commercial banks are
authorized to close under the Laws of, or are in fact closed in, the state of
Georgia and, if such day relates to any Eurodollar Rate Loan, means any such day
on which dealings in Dollar deposits are conducted by and between banks in the
London interbank Eurodollar market.
“Businesses” means,
at any time, a collective reference to the businesses operated by the Borrower
and its Subsidiaries at such time.
“Capital
Lease”
means, as
applied to any Person, any lease of any Property by that Person as lessee which,
in accordance with GAAP, is required to be accounted for as a capital lease on
the balance sheet of that Person.
“Capital
Stock” means
(i) in the case of a corporation, capital stock, (ii) in the case of
an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of capital
stock, (iii) in the case of a partnership, partnership interests (whether
general or limited), (iv) in the case of a limited liability company,
membership interests and (v) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
“Cash
Collateralize” has the
meaning specified in Section
2.02(f).
“Cash
Equivalents” means,
as at any
date, (a) securities
issued or directly and fully guaranteed or insured by the United States or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition, (b) Dollar denominated
time deposits and certificates of deposit of (i) the Lender, (ii) any
domestic commercial bank of recognized standing having capital and surplus in
excess of $500,000,000 or (iii) any bank whose short-term commercial paper
rating from S&P is at least A-1 or the equivalent thereof or from Xxxxx'x is
at least P-1 or the equivalent thereof (any such bank being an “Approved
Bank”), in
each case with maturities of not more than 270 days from the date of
acquisition, (c) commercial paper and variable or fixed rate notes issued
by any Approved Bank (or by the Borrower company thereof) or any variable rate
notes issued by, or guaranteed by, any domestic corporation rated A-1 (or the
equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or
better by Moody's and maturing within six months of
2
the date
of acquisition, (d) repurchase agreements entered into by any Person with a
bank or trust company (including the Lender) or recognized securities dealer
having capital and surplus in excess of $500,000,000 for direct obligations
issued by or fully guaranteed by the United States in which such Person shall
have a perfected first priority security interest (subject to no other Liens)
and having, on the date of purchase thereof, a fair market value of at least
100% of the amount of the repurchase obligations and (e) Investments,
classified in accordance with GAAP as current assets, in money market investment
programs registered under the Investment Company Act of 1940, as amended, which
are administered by reputable financial institutions having capital of at least
$500,000,000 and the portfolios of which are limited to Investments of the
character described in the foregoing subdivisions (a) through (d).
“Change
of Control” means
the occurrence of any of the following events:
(i) any
“person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the
Securities Exchange Act) shall have acquired beneficial ownership, directly or
indirectly, of, or shall have acquired by contract or otherwise, or shall have
entered into a contract or arrangement that, upon consummation, will result in
its or their acquisition of, or control over, more than 15% of the outstanding
Voting Stock of the Borrower, or
(ii) during
any period of two consecutive calendar years, individuals who at the beginning
of such period constituted the board of directors of the Borrower together with
any new members of such board of directors whose elections by such board of
directors or whose nomination for election by the stockholders of the Borrower
was approved by a vote of a majority of the members of such board of directors
then still in office who either were directors at the beginning of such period
or whose election or nomination for election was previously so approved, cease
for any reason to constitute a majority of the directors of the Borrower then in
office.
As used
herein, “beneficial ownership” shall have the meaning provided in Rule 13d-3 of
the Securities and Exchange Commission under the Securities Exchange
Act.
“Closing
Date” means
the date hereof.
“Collateral” means a
collective reference to all real and personal Property with respect to which
Liens in
favor of the Lender are
purported to be granted pursuant to and in accordance with the terms of the
Collateral Documents.
“Collateral
Documents” means a
collective reference to the Security Agreement, the Pledge Agreement and such
other security documents as may be executed and delivered by the Loan Parties
pursuant to the terms of Section 7.14.
“Commitment” means
the obligation of the Lender to (a) make Revolving Loans to the Borrower
pursuant to Section
2.01 and (b)
issue Letters of Credit for the account of the Borrower pursuant to Section
2.02.
“Commitment
Amount” means
TEN MILLION DOLLARS ($10,000,000), as such amount may be reduced from time to
time in accordance with the provisions hereof.
“Compliance
Certificate” means a
certificate substantially in the form of Exhibit
C.
3
“Consolidated
Capital Expenditures” means,
for any period for the Borrower and its Subsidiaries on a consolidated basis,
all capital expenditures, as determined in accordance with GAAP.
“Consolidated
EBITDA” means,
for any period, for the Borrower and its Subsidiaries on a consolidated basis,
an amount equal to Consolidated Net Income for such period plus the
following to the extent deducted in calculating such Consolidated Net Income:
(a) Consolidated Interest Charges for such period, (b) the provision for
federal, state, local and foreign income taxes payable by the Borrower and its
Subsidiaries for such period and (c) the amount of depreciation and amortization
expense for such period, all as determined in accordance with GAAP.
“Consolidated
Interest Charges” means,
for any period, for the Borrower and its Subsidiaries on a consolidated basis,
an amount equal to the sum of (i) all interest, premium payments, debt discount,
fees, charges and related expenses of the Borrower and its Subsidiaries in
connection with Indebtedness (including capitalized interest) or in connection
with the deferred purchase price of assets, in each case to the extent treated
as interest in accordance with GAAP, and (ii) the portion of rent expense of the
Borrower and its Subsidiaries with respect to such period under Capital Leases
or other leases that is treated as interest in accordance with
GAAP.
“Consolidated
Net Income” means,
for any period, for the Borrower and its Subsidiaries on a consolidated basis,
the net income of the Borrower and its Subsidiaries (excluding extraordinary
gains and extraordinary non-cash losses) for that period determined in
accordance with GAAP.
“Contractual
Obligation” means,
as to any Person, any provision of any security issued by such Person or of any
agreement, instrument or other undertaking to which such Person is a party or by
which it or any of its Property is bound.
“Control” has the
meaning specified in the definition of “Affiliate.”
“Credit
Extensions” means
each of the following: (a) a borrowing consisting of Revolving Loans and (b) an
L/C Credit Extension.
“Debtor
Relief Laws” means
the Bankruptcy Code of the United States, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief Laws of the United States or other applicable jurisdictions from
time to time in effect and affecting the rights of creditors
generally.
“Default” means
any event or condition that constitutes an Event of Default or that, with the
giving of any notice, the passage of time, or both, would be an Event of
Default.
“Default
Rate” means
an interest rate equal to the two percent (2%) per annum greater than the rate
which would otherwise be applicable (or if no rate is applicable, whether in
respect of interest, fees or other amounts, then the Base Rate plus 4.50%) to
the fullest extent permitted by applicable Laws.
“Disposition” or
“Dispose” means
the sale, transfer, license, lease or other disposition (including any Sale and
Leaseback Transaction) of any Property by the Borrower or any Subsidiary
(including the Capital Stock of any Subsidiary), including any sale, assignment,
transfer or other disposal, with or without recourse, of any notes or accounts
receivable or any rights and claims associated therewith, but excluding (i) the
sale, lease, license, transfer or other disposition of inventory in the ordinary
course of business of the Borrower and its Subsidiaries, (ii) the lease or
license of intellectual property in the ordinary course of business of the
Borrower and its Subsidiaries, (iii) the sale, lease, license, transfer or
4
other
disposition of machinery and equipment no longer used or useful in the conduct
of business of the Borrower and its Subsidiaries, (iv) any sale, lease, license,
transfer or other disposition of Property by the Borrower or any Subsidiary to
any Loan Party, (v) any Involuntary Disposition by the Borrower or any
Subsidiary, (vi) any Disposition by the Borrower or any Subsidiary constituting
a Permitted Investment, (vii) the sale of real property of the Borrower located
at 0000 Xxxxxx Xxxx Xxxx in Dallas, Texas for aggregate consideration not
exceeding $400,000 in the aggregate and (viii) any other sale, transfer,
license, lease or other disposition of Property of the Borrower or any
Subsidiary; provided that the net book value of all such Property sold,
transferred, licensed, leased or otherwise disposed of pursuant to this clause
(viii) shall not exceed $100,000 in the aggregate.
“Dollar” and
“$” mean
lawful money of the United States.
“Domestic
Subsidiary” means
any Subsidiary that is organized under the laws of any political subdivision of
the United States.
“Eligible
Receivables” means,
as of any date of determination and without duplication, the aggregate book
value of all accounts receivable, receivables, and obligations for payment
created or arising from the sale of inventory or the rendering of services in
the ordinary course of business (collectively, the “Receivables”), owned by or
owing to the Borrower or any of its Subsidiaries, net of allowances and reserves
for doubtful or uncollectible accounts and sales adjustments consistent with
such Person’s internal policies and in any event in accordance with GAAP, but
excluding in any event (i) any Receivable which is (a) not subject to
a perfected, first priority Lien in favor of the Lender (other than a Permitted
Lien) to secure the Obligations or (b) subject to any other Lien that is
not a Permitted Lien, (ii) Receivables which are more than 60 days past due
date and more than 90 days past invoice date, (iii) 50% of the book value
of any Receivable not otherwise excluded by clause (ii) above but owing
from an account debtor which is the account debtor on any existing Receivable
then excluded by such clause (ii), unless the exclusion by such
clause (ii) is a result of a legitimate dispute by the account debtor and
the applicable Receivable is no more than 60 days past due,
(iv) Receivables evidenced by notes, chattel paper or other instruments,
unless such notes, chattel paper or instruments have been delivered to and are
in the possession of the Lender, (v) Receivables owing by an account debtor
which is not solvent or is subject to any bankruptcy or insolvency proceeding of
any kind, (vi) Receivables owing by an account debtor located outside of
the United States (unless payment for the goods shipped is secured by an
irrevocable letter of credit in a form and from an institution acceptable to the
Lender), (vii) Receivables which are contingent or subject to offset, deduction,
counterclaim, dispute or other defense to payment, in each case to the extent of
such offset, deduction, counterclaim, dispute or other defense,
(viii) Receivables for which any direct or indirect Subsidiary or any
Affiliate is the account debtor, (ix) Receivables representing a sale to
the government of the United
States or any agency or instrumentality thereof unless
the Federal Assignment of Claims Act has been complied with to the satisfaction
of the Lender with respect to the granting of a security interest in such
Receivable, with or other similar applicable law and (x) Receivables which
fail to meet such other specifications and requirements as may from time to time
be established by the Lender in its reasonable discretion.
“Enersyst” means
Enersyst Development Center, L.L.C., a Delaware limited liability
company.
“Environmental
Laws” means
any and all federal, state, local, foreign and other applicable statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits, approvals,
licenses or governmental restrictions relating to pollution and the protection
of the environment or the release of any materials into the environment,
including those related to hazardous substances or wastes, air emissions and
discharges to waste or public systems.
5
“Environmental
Liability” means
any liability, contingent or otherwise (including any liability for damages,
costs of environmental remediation, fines, penalties or indemnities), of the
Borrower or any Subsidiary directly or indirectly resulting from or based upon
(a) violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
“ERISA” means
the Employee Retirement Income Security Act of 1974.
“ERISA
Affiliate” means
any trade or business (whether or not incorporated) under common control with
the Borrower within the meaning of Section 414(b) or (c) of the Internal Revenue
Code (and Sections 414(m) and (o) of the Internal Revenue Code for purposes of
provisions relating to Section 412 of the Internal Revenue Code).
“ERISA
Event” means
(a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the
Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of
ERISA during a plan year in which it was a substantial employer (as defined in
Section 4001(a)(2) of ERISA) or a cessation of operations that is treated
as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial
withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or
notification that a Multiemployer Plan is in reorganization; (d) the filing of a
notice of intent to terminate, the treatment of a Plan amendment as a
termination under Sections 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e)
an event or condition which constitutes grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any Pension
Plan or Multiemployer Plan; or (f) the imposition of any liability under Title
IV of ERISA, other than for PBGC premiums due but not delinquent under Section
4007 of ERISA, upon the Borrower or any ERISA Affiliate.
“Eurodollar
Rate” means,
for any Interest Period with respect to a Eurodollar Rate Loan, the rate per
annum equal to the British Bankers Association LIBOR Rate (“BBA
LIBOR”), as
published by Reuters (or other commercially available source providing
quotations of BBA LIBOR as designated by the Lender from time to time) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, for Dollar deposits (for delivery on the
first day of such Interest Period) with a term equivalent to such Interest
Period. If such rate is not available at such time for any reason, then the
“Eurodollar Rate” for such Interest Period shall be the rate per annum
determined by the Lender to be the rate at which deposits in Dollars for
delivery on the first day of such Interest Period in same day funds in the
approximate amount of the Eurodollar Rate Loan being made, continued or
converted by Bank of America and with a term equivalent to such Interest Period
would be offered by Bank of America’s London Branch to major banks in the London
interbank eurodollar market at their request at approximately 11:00 a.m. (London
time) two Business Days prior to the commencement of such Interest
Period.
“Eurodollar
Rate Loan” means a
Revolving Loan that bears interest at a rate based on the Eurodollar
Rate.
“Event
of Default” has the
meaning specified in Section
9.01.
“Facilities” means,
at any time, a collective reference to the facilities and real properties owned,
leased or operated by the Borrower or any Subsidiary.
6
“Federal
Funds Rate” means,
for any day, the rate per annum equal to the weighted average of the rates on
overnight federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers on such day, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding such day;
provided that (a)
if such day is not a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate (rounded upward, if necessary, to a whole multiple
of 1/100 of 1%) charged to Lender on such day on such transactions as determined
by the Lender.
“Foreign
Subsidiary” means
any Subsidiary that is not a Domestic Subsidiary.
“FRB” means
the Board of Governors of the Federal Reserve System of the United
States.
“GAAP” means
generally accepted accounting principles in the United States set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board, consistently applied.
“Governmental
Authority” means
any nation or government, any state or other political subdivision thereof, any
agency, authority, instrumentality, regulatory body, court, administrative
tribunal, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
“Guarantee” means,
as to any Person, without duplication (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person. In the case of any Guarantee described in
clause (a) above, the amount of such Guarantee shall be deemed to be an amount
equal to the stated or determinable amount of the related primary obligation, or
portion thereof, in respect of which such Guarantee is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as
determined by the guaranteeing Person in good faith. In the case of any
Guarantee described in clause (b) above, the amount of such Guarantee shall be
deemed to be an amount equal to the lower of the stated or determinable amount
of the related primary obligation in respect of which such Guarantee is made or
the book value of the assets securing such related primary obligation in respect
of which such Guarantee is made. The term “Guarantee” as a verb has a
corresponding meaning.
“Guaranty” means
the Guaranty made by the Guarantors in favor of the Lender pursuant to
Article
IV
hereof.
“Guarantors” means
each Person identified as a “Guarantor” on the signature pages hereto and each
other Person that becomes a Guarantor after the Closing Date,
together with their successors and permitted assigns.
7
“Hazardous
Materials” means
all explosive or radioactive substances or wastes and all hazardous or toxic
substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos-containing materials, polychlorinated
biphenyls, radon gas, infectious or medical wastes and all other substances or
wastes of any nature regulated pursuant to any Environmental Law.
“Honor
Date” shall
have the meaning specified in Section
2.02(c).
“Indebtedness” means,
as to the Borrower or any Subsidiary at a particular time, without duplication,
all of the following, whether or not included as indebtedness or liabilities in
accordance with GAAP:
(a) all
obligations for borrowed money, whether current or long-term (including the
Obligations) and all obligations evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;
(b) all
purchase money Indebtedness (other than trade payables in the ordinary course of
business);
(c) all
obligations arising under letters of credit (including standby and commercial),
bankers' acceptances, bank guaranties, surety bonds and similar
instruments;
(d) all
obligations in respect of the deferred purchase price of property or services
(other than trade accounts payable in the ordinary course of
business);
(e) the
principal portion of all obligations under conditional sale or other title
retention agreements relating to Property purchased (other than customary
reservations or retentions of title under agreements with suppliers entered into
in the ordinary course of business);
(f) the
Attributed Indebtedness with respect to Capital Leases and Synthetic
Leases;
(g) the
Attributed Indebtedness with respect to Securitization
Transactions;
(h) all
preferred stock or other equity interests providing for mandatory redemptions,
sinking fund or like payments prior to the Maturity Date;
(i) all
obligations under any Swap Contract;
(j) all
Guarantees with respect to outstanding Indebtedness of the types specified in
clauses (a) through (i) above of any other Person;
(k) all
Indebtedness of the
types specified in clauses (a) through (j) above of any other Person secured
by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on, or payable out of the
proceeds of production from, Property owned or acquired by the Borrower or such
Subsidiary, whether or not the obligations secured thereby have been assumed but
only to the extent of the book value of the Property securing such
Indebtedness;
(l) all
Indebtedness of the types referred to in clauses (a) through (j) above of any
partnership or joint venture (other than a joint venture that is itself a
corporation or limited liability company) in which the Borrower or such
Subsidiary is a general partner or joint venturer, unless such Indebtedness is
expressly made non-recourse to the Borrower or such Subsidiary.
8
For
purposes hereof, (x) the amount of any obligation arising under letters of
credit (including standby and commercial), bankers' acceptances, bank
guaranties, surety bonds and similar instruments shall be the maximum amount
available to be drawn thereunder, (y) the amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date, and (z) the amount of any Guarantee shall be the amount
of the Indebtedness subject to such Guarantee.
“Indemnified
Liabilities” has the
meaning set forth in Section
10.05.
“Indemnitees” has the
meaning set forth in Section
10.05.
“Interest
Payment Date” means
(a) as to any Revolving Loan other than a Base Rate Loan, the last day of each
Interest Period applicable to such Revolving Loan and the Maturity Date;
provided,
however, that if
any Interest Period for a Eurodollar Rate Loan exceeds three months, the
respective dates that fall every three months after the beginning of such
Interest Period shall also be Interest Payment Dates; and (b) as to any Base
Rate Loan, the last Business Day of each March, June, September and December and
the Maturity Date.
“Interest
Period” means,
as to each Eurodollar Rate Loan, the period commencing on the date such
Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar
Rate Loan and ending on the date one, two, three or six months
thereafter, as selected by the Borrower in its Loan Notice; provided
that:
(a) any
Interest Period that would otherwise end on a day that is not a Business Day
shall be extended to the immediately succeeding Business Day unless such
Business Day falls in another calendar month, in which case such Interest Period
shall end on the immediately preceding Business Day;
(b) 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 end on the last Business Day of the
calendar month at the end of such Interest Period; and
(c) no
Interest Period with respect to any Revolving Loan shall extend beyond the
Maturity Date.
“Internal
Revenue Code” means
the Internal Revenue Code of 1986, as amended.
“Investment” means,
as to any Person, any direct or indirect acquisition or investment by such
Person, whether by means of (a) the purchase or other acquisition of Capital
Stock of another Person, (b) a loan, advance or capital contribution to,
Guarantee or assumption of debt of, or purchase or other acquisition of any
other debt or equity participation or interest in, another Person, including any
partnership or joint venture interest in such other Person, or (c) an
Acquisition. For purposes of covenant compliance, the amount of any Investment
shall be the amount actually invested, without adjustment for subsequent
increases or decreases in the value of such Investment.
“Involuntary
Disposition” means
any loss of, damage to or destruction of, or
any condemnation or other taking for public use of, any
Property of the Borrower or any Subsidiary.
9
“IP
Rights” has the
meaning set forth in Section
6.17.
“IRS” means
the United States Internal Revenue Service.
“Joinder
Agreement” means
a joinder
agreement substantially in the form of Exhibit
E executed
and delivered by a Subsidiary in accordance with the provisions of Section
7.12.
“JPT” means
JPT Financial Corp., a Delaware corporation.
“Laws” means,
collectively, all international, foreign, federal, state and local statutes,
treaties, rules, guidelines, regulations, ordinances, codes and administrative
or judicial precedents or authorities, including the interpretation or
administration thereof by any Governmental Authority charged with the
enforcement, interpretation or administration thereof, and all applicable
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authority, in each case having
the force of law.
"L/C
Borrowing" means
an extension of credit resulting from a drawing under any Letter of Credit which
has not been reimbursed on the date when made or refinanced as a borrowing of
Revolving Loans.
“L/C
Credit Extension” means,
with respect to any Letter of Credit, the issuance thereof or extension of the
expiry date thereof, or the renewal or increase of the amount
thereof.
“L/C
Obligations” means,
as at any date of determination, the aggregate undrawn amount of all outstanding
Letters of Credit plus, without
duplication, the aggregate of all Unreimbursed Amounts, including all L/C
Borrowings.
“Lender” has the
meaning specified in the introductory paragraph hereof.
“Letter
of Credit” means
any standby letter of credit issued under this Agreement.
“Letter
of Credit Application” means
an application and agreement for the issuance or amendment of a letter of credit
in the form from time to time in use by the Lender.
“Letter
of Credit Expiration Date” means
the day that is thirty days prior to the Maturity Date (or, if such day is not a
Business Day, the next preceding Business Day).
"Letter
of Credit Sublimit" means
an amount equal to $2,000,000. The Letter of Credit Sublimit is part of, and not
in addition to, the Commitment Amount.
“Lien” means
any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge, or preference, priority or other
security interest or preferential arrangement of any kind or nature whatsoever
(including any conditional sale or other title retention agreement, and any
financing lease having substantially the same economic effect as any of the
foregoing).
“Loan
Documents” means
this Agreement, the Revolving Note, each Letter of Credit, each Letter of Credit
Application, each Joinder Agreement, each Request for Credit Extension, each
Compliance Certificate, each Borrowing Base Certificate, the Collateral
Documents and each other document, instrument or agreement from time to time
executed by any Loan Party and delivered in connection with this Agreement.
10
“Loan
Notice” means a
notice of a borrowing of Revolving Loans substantially in the form of
Exhibit A.
“Loan
Parties” means,
collectively, the Borrower and the Guarantors.
“Material
Adverse Effect” means
(a) a material adverse change in, or a material adverse effect upon, the
operations, business, properties, liabilities (actual or contingent), condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries taken
as a whole; (b) a material impairment of the ability of any Loan Party to
perform its obligations under any Loan Document to which it is a party; or (c) a
material adverse effect upon the legality, validity, binding effect or
enforceability against any Loan Party of any Loan Document to which it is a
party.
“Maturity
Date” means
February __, 2006.
“Moody's” means
Xxxxx'x Investors Service, Inc. and any successor thereto.
“Multiemployer
Plan” means
any employee benefit plan of the type described in Section 4001(a)(3) of ERISA,
to which the Borrower or any ERISA Affiliate makes or is obligated to make
contributions, or during the preceding five plan years, has made or been
obligated to make contributions.
“Obligations” means
(a) all advances to, and debts, liabilities, obligations, covenants and duties
of, any Loan Party arising under any Loan Document or otherwise with respect to
any Revolving Loan or Letter of Credit, whether direct or indirect (including
those acquired by assumption), absolute or contingent, due or to become due, now
existing or hereafter arising and including interest and fees that accrue after
the commencement by or against any Loan Party of any proceeding under any Debtor
Relief Laws naming such Person as the debtor in such proceeding, regardless of
whether such interest and fees are allowed claims in such proceeding, (b) all
obligations under any Swap Contract between any Loan Party and the Lender or an
Affiliate of the Lender to the extent permitted hereunder and (c) all
obligations under any Treasury Management Agreement between any Loan Party and
the Lender or an Affiliate of the Lender.
“Organization
Documents” means,
(a) with respect to any corporation, the certificate or articles of
incorporation and the bylaws (or equivalent or comparable constitutive documents
with respect to any non-U.S. jurisdiction); (b) with respect to any limited
liability company, the certificate or articles of formation or organization and
operating agreement; and (c) with respect to any partnership, joint venture,
trust or other form of business entity, the partnership, joint venture or other
applicable agreement of formation or organization and any agreement, instrument,
filing or notice with respect thereto filed in connection with its formation or
organization with the applicable Governmental Authority in the jurisdiction of
its formation or organization and, if applicable, any certificate or articles of
formation or organization of such entity.
“Other
Taxes” has the
meaning set forth in Section
3.01(b).
“PBGC” means
the Pension Benefit Guaranty Corporation.
“Pension
Plan” means
any “employee pension benefit plan” (as such term is defined in Section 3(2) of
ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA
and is sponsored or maintained by the Borrower or any ERISA Affiliate or to
which the Borrower or any ERISA Affiliate contributes or has an obligation to
contribute, or in the case of a multiple employer or other plan described in
Section 4064(a) of ERISA, has made contributions at any time during the
immediately preceding five plan years.
11
“Preferred
Unit Exchange Agreement” means
that certain Preferred Unit Exchange Agreement dated as of May 21, 2004 by and
among the Borrower and those Persons set forth on the signature pages
thereto.
“Permitted
Investments” means,
at any time, Investments by the Borrower and its Subsidiaries permitted to exist
at such time pursuant to the terms of Section
8.02.
“Permitted
Liens” means,
at any time, Liens in respect of Property of the Borrower and its Subsidiaries
permitted to exist at such time pursuant to the terms of Section
8.01.
“Person” means
any natural person, corporation, limited liability company, trust, joint
venture, association, company, partnership, Governmental Authority or other
entity.
“Plan” means
any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA)
established by the Borrower or, with respect to any such plan that is subject to
Section 412 of the Internal Revenue Code or Title IV of ERISA, any ERISA
Affiliate.
“Pledge
Agreement” means
the pledge agreement dated as of the Closing Date executed in favor of the
Lender by each of the Loan Parties, as
amended, modified, restated or supplemented from time to time.
“Property” means
any interest of any kind in any property or asset, whether real, personal or
mixed, or tangible or intangible.
“Reportable
Event” means
any of the events set forth in Section 4043(c) of ERISA, other than events for
which the thirty-day notice period has been waived.
“Request
for Credit Extension” means
(a) with respect to a borrowing of Loans, a Loan Notice, and (b) with respect to
an L/C Credit Extension, a Letter of Credit Application.
“Responsible
Officer” means
the chief executive officer, president or chief financial officer of a Loan
Party. Any document delivered hereunder that is signed by a Responsible Officer
of a Loan Party shall be conclusively presumed to have been authorized by all
necessary corporate, partnership and/or other action on the part of such Loan
Party and such Responsible Officer shall be conclusively presumed to have acted
on behalf of such Loan Party.
“Restricted
Payment” means
any dividend or other distribution (whether in cash, securities or other
property) with respect to any Capital Stock of the Borrower or any Subsidiary,
or any payment (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any such Capital Stock
or of any option, warrant or other right to acquire any such Capital
Stock.
“Revolving
Loans” has the
meaning specified in Section
2.01(a).
“Revolving
Note”
has the
meaning specified in Section
2.09.
12
“S&P” means
Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx Companies,
Inc. and any successor thereto.
“Sale
and Leaseback Transaction” means,
with respect to the Borrower or any Subsidiary, any arrangement, directly or
indirectly, with any person whereby the Borrower or such Subsidiary shall sell
or transfer any property, real or personal, used or useful in its business,
whether now owned or hereafter acquired, and thereafter rent or lease such
property or other property that it intends to use for substantially the same
purpose or purposes as the property being sold or transferred.
“SEC” means
the Securities and Exchange Commission, or any Governmental Authority succeeding
to any of its principal functions.
“Securitization
Transaction” means
any financing transaction or series of financing transactions (including
factoring arrangements) pursuant to which the Borrower or any Subsidiary may
sell, convey or otherwise transfer, or grant a security interest in, accounts,
payments, receivables, rights to future lease payments or residuals or similar
rights to payment to a special purpose subsidiary or affiliate or any other
Person.
“Security
Agreement” means
the security agreement dated as of the Closing Date executed in favor of the
Lender by the Loan Parties, as amended, modified, restated or supplemented from
time to time.
“Solvent” or
“Solvency” means,
with respect to any Person as of a particular date, that on such date (a) such
Person is able to pay its debts and other liabilities, contingent obligations
and other commitments as they mature in the ordinary course of business, (b)
such Person does not intend to, and does not believe that it will, incur debts
or liabilities beyond such Person’s ability to pay as such debts and liabilities
mature in their ordinary course, (c) such Person is not engaged in a business or
a transaction, and is not about to engage in a business or a transaction, for
which such Person’s Property would constitute unreasonably small capital after
giving due consideration to the prevailing practice in the industry in which
such Person is engaged or is to engage, (d) the fair value of the Property of
such Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person and (e) the present fair
salable value of the assets of such Person is not less than the amount that will
be required to pay the probable liability of such Person on its debts as they
become absolute and matured. In computing the amount of contingent liabilities
at any time, it is intended that such liabilities will be computed at the amount
which, in light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.
“Subsidiary” of a
Person means a corporation, partnership, joint venture, limited liability
company or other business entity of which a majority of the shares of Capital
Stock having ordinary voting power for the election of directors or other
governing body (other than Capital Stock having such power only by reason of the
happening of a contingency) are at the time beneficially owned, or the
management of which is otherwise controlled, directly, or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise specified, all
references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a
Subsidiary or Subsidiaries of the Borrower.
“Subway
Contract” means
that certain Equipment Supplier Approval Agreement dated as of March 5, 2004
among the Borrower, Doctor’s Associates, Inc. and the Independent Purchasing
Cooperative, Inc.
13
“Swap
Contract” means
(a) any and all rate swap transactions, basis swaps, credit derivative
transactions, forward rate transactions, commodity swaps, commodity options,
forward commodity contracts, equity or equity index swaps or options, bond or
bond price or bond index swaps or options or forward bond or forward bond price
or forward bond index transactions, interest rate options, forward foreign
exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap transactions,
currency options, spot contracts, or any other similar transactions or any
combination of any of the foregoing (including any options to enter into any of
the foregoing), whether or not any such transaction is governed by or subject to
any master agreement, and (b) any and all transactions of any kind, and the
related confirmations, which are subject to the terms and conditions of, or
governed by, any form of master agreement published by the International Swaps
and Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, or any other similar master agreement (any such master agreement,
together with any related schedules, a “Master
Agreement”),
including any such obligations or liabilities under any Master
Agreement.
“Swap
Termination Value” means,
in respect of any one or more Swap Contracts, after taking into account the
effect of any legally enforceable netting agreement relating to such Swap
Contracts, (a) for any date on or after the date such Swap Contracts have been
closed out and termination value(s) determined in accordance therewith, such
termination value(s), and (b) for any date prior to the date referenced in
clause (a), the amount(s) determined as the xxxx-to-market value(s) for such
Swap Contracts, as determined based upon one or more mid-market or other readily
available quotations provided by any recognized dealer in such Swap Contracts
(which may include a Lender or any Affiliate of a Lender).
“Synthetic
Lease” means
any synthetic lease, tax retention operating lease, off-balance sheet loan or
similar off-balance sheet financing arrangement whereby the arrangement is
considered borrowed money indebtedness for tax purposes but is classified as an
operating lease or does not otherwise appear on the balance sheet under
GAAP.
“Taxes” has the
meaning set forth in Section
3.01(a).
“Threshold
Amount” means
$250,000.
“Treasury
Management Agreement” means
any agreement governing the provision of treasury or cash management services,
including deposit accounts, funds transfer, automated clearinghouse, zero
balance accounts, returned check concentration, controlled disbursement,
lockbox, account reconciliation and reporting and trade finance
services.
“Unfunded
Pension Liability” means
the excess of a Pension Plan's benefit liabilities under Section 4001(a)(16) of
ERISA, over the current value of that Pension Plan's assets, determined in
accordance with the assumptions used for funding the Pension Plan pursuant to
Section 412 of the Internal Revenue Code for the applicable plan
year.
“United
States” and
“U.S.” mean
the United States of America.
“Unreimbursed
Amount” shall
have the meaning specified in Section
2.02(c).
“Voting
Stock”
means, with
respect to any Person, Capital Stock issued by such Person the holders of which
are ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such Person,
even though the right so to vote has been suspended by the happening of such a
contingency.
14
“Wholly
Owned Subsidiary” means
any Person 100% of whose Capital Stock is at the time owned by the Borrower
directly or indirectly through other Persons 100% of whose Capital Stock is at
the time owned, directly or indirectly, by the Borrower.
1.02 Other
Interpretive Provisions.
With
reference to this Agreement and each other Loan Document, unless otherwise
specified herein or in such other Loan Document:
(a) The
meanings of defined terms are equally applicable to the singular and plural
forms of the defined terms.
(b) (i) The words
“herein,”
“hereto,”
“hereof” and
“hereunder” and
words of similar import when used in any Loan Document shall refer to such Loan
Document as a whole and not to any particular provision thereof.
(ii) Article,
Section, Exhibit and Schedule references are to the Loan Document in which such
reference appears.
(iii) The term
“including” is by
way of example and not limitation.
(iv) The term
“documents”
includes any and all instruments, documents, agreements, certificates, notices,
reports, financial statements and other writings, however evidenced, whether in
physical or electronic form.
(c) In the
computation of periods of time from a specified date to a later specified date,
the word “from” means
“from
and including;” the
words “to” and
“until” each
mean “to but
excluding;” and
the word “through” means
“to and
including.”
(d) Section
headings herein and in the other Loan Documents are included for convenience of
reference only and shall not affect the interpretation of this Agreement or any
other Loan Document.
1.03 Accounting
Terms.
(a) Except as
otherwise specifically prescribed herein, all accounting terms not specifically
or completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with GAAP, applied on a consistent basis, as in effect from time to
time; provided, however, that calculations of Attributable Indebtedness under
any Synthetic Lease or the implied interest component of any Synthetic Lease
shall be made by the Borrower in accordance with accepted financial practice and
consistent with the terms of such Synthetic Lease.
(b) The
Borrower will provide a written summary of material changes in GAAP and in the
consistent application thereof with each annual and quarterly Compliance
Certificate delivered in accordance with Section 7.02(b). If at any time any
change in GAAP would affect the computation of any financial ratio or
requirement set forth in any Loan Document, and either the Borrower or the
Lender shall so request, the Lender and the Borrower shall negotiate in good
faith to amend such ratio or requirement to preserve the original intent thereof
in light of such change in GAAP; provided that, until
so amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Borrower
shall provide to the Lender financial statements and other documents required
under this Agreement or as reasonably requested hereunder setting forth a
reconciliation between calculations of such ratio or requirement made before and
after giving effect to such change in GAAP.
15
1.04 Rounding.
Any
financial ratios required to be maintained by the Loan Parties pursuant to this
Agreement shall be calculated by dividing the appropriate component by the other
component, carrying the result to one place more than the number of places by
which such ratio is expressed herein and rounding the result up or down to the
nearest number (with a rounding-up if there is no nearest number).
1.05 References
to Agreements and Laws.
Unless
otherwise expressly provided herein, (a) references to Organization Documents,
agreements (including the Loan Documents) and other contractual instruments
shall be deemed to include all subsequent amendments, restatements, extensions,
supplements and other modifications thereto, but only to the extent that such
amendments, restatements, extensions, supplements and other modifications are
not prohibited by any Loan Document; and (b) references to any Law shall include
all statutory and regulatory provisions consolidating, amending, replacing,
supplementing or interpreting such Law.
1.06 Times
of Day.
Unless
otherwise specified, all references herein to times of day shall be references
to Eastern time (daylight or standard, as applicable).
1.07 Letter
of Credit Amounts.
Unless
otherwise specified, all references herein to the amount of a Letter of Credit
at any time shall be deemed to mean the maximum face amount of such Letter of
Credit after giving effect to all increases thereof contemplated by such Letter
of Credit or the Letter of Credit Application therefor, whether or not such
maximum face amount is in effect at such time.
ARTICLE
II
THE
COMMITMENT AND CREDIT EXTENSIONS
2.01 Revolving
Loans.
(a) Commitment. Subject
to the terms and conditions set forth herein, the Lender agrees to make loans
(each such loan, a “Revolving
Loan”) to the
Borrower in Dollars from time to time on any Business Day during the period from
the Closing Date to but not including the Maturity Date; provided,
however, that
after giving effect to any advance of Revolving Loans, the sum of the
outstanding principal amount of Revolving Loans plus the
outstanding amount of L/C Obligations shall not exceed the lesser of (i) the
Commitment Amount and (ii) the Borrowing Base. Subject to the other terms and
conditions hereof, the Borrower may borrow under this Section
2.01, prepay
under Section
2.03, and
reborrow under this Section
2.01.
(b) Borrowing
Procedures. Each
borrowing of Revolving Loans shall be made upon the Borrower’s Loan Notice to
the Lender. Each such Loan Notice must be received by the Lender not later than
11:00 a.m. on the requested date of borrowing. Each borrowing shall be in a
principal amount of $100,000 or a whole multiple of
$50,000 in excess thereof.
16
2.02
Letters
of Credit.
(a) The
Letter of Credit Commitment.
(i) Subject
to the terms and conditions set forth herein, the Lender agrees from time to
time on any Business Day during the period from the Closing Date to but not
including the Letter of Credit Expiration Date to issue Letters of Credit in
Dollars for the account of the Borrower or any Subsidiary, and to amend or
extend Letters of Credit previously issued by it, in accordance with subsection
(b) below; provided that
after giving effect to any L/C Credit Extension with respect to any Letter of
Credit (A) the sum of the outstanding principal amount of Revolving Loans
plus the
outstanding amount of L/C Obligations shall not exceed the lesser of (1) the
Commitment Amount and (2) the Borrowing Base or (B) the outstanding
amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit.
Within the foregoing limits, and subject to the terms and conditions hereof, the
Borrower’s ability to obtain Letters of Credit shall be fully revolving, and
accordingly the Borrower may, during the foregoing period, obtain Letters of
Credit to replace Letters of Credit that have expired or that have been drawn
upon and reimbursed.
(ii) The
Lender shall be under no obligation to issue any Letter of Credit
if:
(A) after
giving effect to such Letter of Credit, the sum of the outstanding principal
amount of Revolving Loans plus the
outstanding amount of L/C Obligations would exceed the lesser of (I) the
Commitment Amount and (II) the Borrowing Base;
(B) any
order, judgment or decree of any Governmental Authority or arbitrator shall by
its terms purport to enjoin or restrain the Lender from issuing such Letter of
Credit, or any Law applicable to the Lender or any request or directive (whether
or not having the force of law) from any Governmental Authority with
jurisdiction over the Lender shall prohibit, or request that the Lender refrain
from, the issuance of Letters of Credit generally or such Letter of Credit in
particular or shall impose upon the Lender with respect to such Letter of Credit
any restriction, reserve or capital requirement (for which the Lender is not
otherwise compensated hereunder) not in effect on the Closing Date, or shall
impose upon the Lender any unreimbursed loss, cost or expense which was not
applicable on the Closing Date and which the Lender in good xxxxx xxxxx material
to it;
(C) the
expiry date of such Letter of Credit would occur subject to Section
2.02(b)(ii), more
than twelve months after the date of issuance or last renewal; or
(D) the
issuance of such Letter of Credit would violate one or more policies of the
Lender applicable to borrowers generally.
(iii) The
Lender shall be under no obligation to amend any Letter of Credit if (A) the
Lender would have no obligation at such time to issue such Letter of Credit in
its amended form under the terms hereof, or (B) the beneficiary of such Letter
of Credit does not accept the proposed amendment to such Letter of
Credit.
17
(b) Procedures
for Issuance and Amendment of Letters of Credit; Auto-Extension.
(i) Each
Letter of Credit shall be issued or amended, as the case may be, upon the
request of the Borrower delivered to the Lender in the form of a Letter of
Credit Application, appropriately completed and signed by a Responsible Officer
of the Borrower. Such Letter of Credit Application must be received by the
Lender not later than 11:00 a.m. at least five Business Days (or such later date
and time as the Lender may agree in a particular instance in its sole
discretion) prior to the proposed issuance date or date of amendment, as the
case may be. In the case of a request for an initial issuance of a Letter of
Credit, such Letter of Credit Application shall specify in form and detail
satisfactory to the Lender: (A) the proposed issuance date of the requested
Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C)
the expiry date thereof; (D) the name and address of the beneficiary thereof;
(E) the documents to be presented by such beneficiary in case of any drawing
thereunder; (F) the full text of any certificate to be presented by such
beneficiary in case of any drawing thereunder; and (G) such other matters as the
Lender may reasonably require. In the case of a request for an amendment of any
outstanding Letter of Credit, such Letter of Credit Application shall specify in
form and detail satisfactory to the Lender (A) the Letter of Credit to be
amended; (B) the proposed date of amendment thereof (which shall be a Business
Day); (C) the nature of the proposed amendment; and (D) such other matters as
the Lender may reasonably require.
(ii) If the
Borrower so requests in any applicable Letter of Credit Application, the Lender
may, in its sole and absolute discretion, agree to issue a Letter of Credit that
has automatic extension provisions (each, an “Auto-Extension
Letter of Credit”);
provided that any
such Auto-Extension Letter of Credit must permit the Lender to prevent any such
extension at least once in each twelve-month period (commencing with the date of
issuance of such Letter of Credit) by giving prior notice to the beneficiary
thereof not later than a day (the “Non-Extension
Notice Date”) in
each such twelve-month period to be agreed upon at the time such Letter of
Credit is issued. Unless otherwise directed by the Lender, the Borrower shall
not be required to make a specific request to the Lender for any such extension.
Once an Auto-Extension Letter of Credit has been issued, the Lender shall permit
the extension of such Letter of Credit at any time to an expiry date not later
than the Letter of Credit Expiration Date; provided,
however, that
the Lender shall not permit
any such extension if (A) the Lender has determined that it would not be
permitted, or would have no obligation at such time to issue such Letter of
Credit in its revised form under the terms hereof (by reason of the provisions
of clause (ii) or (iii) of Section
2.02(a) or
otherwise), or (B) it has received notice (which may be by telephone or in
writing) on or before the day that is five Business Days before the
Non-Extension Notice Date from any Loan Party that one or more of the applicable
conditions specified in Section
5.02 is not
then satisfied, and in each case the Lender shall not permit such extension.
(c) Drawings
and Reimbursements; Funding of Participations. Upon
receipt from the beneficiary of any Letter of Credit of any notice of drawing
under such Letter of Credit, the Lender shall notify the Borrower thereof. Not
later than 11:00 a.m. on the date of any payment by the Lender under a Letter of
Credit (each such date, an “Honor
Date”), the
Borrower shall reimburse the Lender in an amount equal to the amount of such
drawing. In the event the Borrower fails to so reimburse the Lender, the
Borrower shall be deemed to have requested a borrowing of Revolving Loans to be
disbursed on the Honor Date in an amount equal to the amount of the unreimbursed
drawing (the “Unreimbursed
Amount”),
without regard to the minimum and multiples specified in Section 2.01 for the
principal amount of Revolving Loans, but subject to the amount of the unutilized
portion of the Commitment Amount and the conditions set forth in Section
5.02 (other
than the delivery of a Loan Notice). With respect to any Unreimbursed Amount
that is not fully refinanced by a borrowing of Revolving Loans because the
conditions set forth in Section 5.02 (other
than delivery of a Loan Notice) cannot be satisfied or for any other reason, the
Borrower shall be deemed to have incurred from the Lender an L/C Borrowing in
the amount of the Unreimbursed Amount that is not so refinanced, which L/C
Borrowing shall be due and payable on demand (together with interest) and shall
bear interest at the Default Rate.
18
(d) Obligations
Absolute. The
obligation of the Borrower to reimburse the Lender for each drawing under each
Letter of Credit and to repay each L/C Borrowing shall be absolute,
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances, including the
following:
(i) any lack
of validity or enforceability of such Letter of Credit, this Agreement, any
other Loan Document or any other agreement or instrument relating
thereto;
(ii) the
existence of any claim, counterclaim, set-off, defense or other right that the
Borrower may have at any time against any beneficiary or any transferee of such
Letter of Credit (or any Person for whom any such beneficiary or any such
transferee may be acting), the Lender or any other Person, whether in connection
with this Agreement, the transactions contemplated hereby or by such Letter of
Credit or any agreement or instrument relating thereto, or any unrelated
transaction;
(iii) any
draft, demand, certificate or other document presented under such Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect; or any loss
or delay in the transmission or otherwise of any document required in order to
make a drawing under such Letter of Credit;
(iv) any
payment by the Lender under such Letter of Credit against presentation of a
draft or certificate that does not strictly comply with the terms of such Letter
of Credit; or any payment made by the Lender under such Letter of Credit to any
Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee
for the benefit of creditors, liquidator, receiver or other representative of or
successor to any beneficiary or any transferee of such Letter of Credit,
including any arising in connection with any proceeding under any Debtor Relief
Law; or
(v) any other
circumstance or happening whatsoever, whether or not similar to any of the
foregoing, including any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Borrower.
The
Borrower shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to them and, in the event of any claim of
noncompliance with the Borrower’s instructions or other irregularity, the
Borrower will immediately notify the Lender. The Borrower shall be conclusively
deemed to have waived any such claim against the Lender and its correspondents
unless such notice is given as aforesaid.
(e) Role
of Lender. The
Borrower agrees that, in paying any drawing under a Letter of Credit, the Lender
shall not have any responsibility to obtain any document (other than any sight
draft, certificates and documents expressly required by the Letter of Credit) or
to ascertain or inquire as to the validity or accuracy of any such document or
the authority of the Person executing or delivering any such document. The
Borrower hereby assumes all risks of the acts or omissions of any beneficiary or
transferee with respect to its use of any Letter of Credit; provided,
however, that
this assumption is not intended to, and shall not, preclude the Borrower’s
pursuing such rights and remedies as they may have against the beneficiary or
transferee at law or under any other agreement. The Lender shall not be liable
or responsible for (i) any action taken or omitted in the absence of gross
negligence or willful misconduct; or (ii) the due execution, effectiveness,
validity or enforceability of any document or instrument related to any Letter
of Credit or Letter of Credit Application; provided,
however, that
anything in such clauses to the contrary notwithstanding, the Borrower may have
a claim against the Lender, and the Lender may be liable to the Borrower, to the
extent, but only to the extent, of any direct, as opposed to consequential or
19
exemplary,
damages suffered by the Borrower which the Borrower proves were caused by the
Lender's bad faith, willful misconduct or gross negligence or the Lender's
willful failure to pay under any Letter of Credit after the presentation to it
by the beneficiary of a sight draft and certificate(s) strictly complying with
the terms and conditions of a Letter of Credit. In furtherance and not in
limitation of the foregoing, the Lender may accept documents that appear on
their face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary, and the Lender shall
not be responsible for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign a 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.
(f) Cash
Collateral. If, as
of the Letter of Credit Expiration Date, any Letter of Credit for any reason
remains outstanding and partially or wholly undrawn, the Borrower shall
immediately pledge and deposit with the Lender cash in an amount equal to at
least 105% of the then outstanding amount of such Letter of Credit pursuant to
documentation in form and substance satisfactory to the Lender. If any Letter of
Credit has failed to be reimbursed and such failure has resulted in a L/C
Borrowing, the Borrower shall immediately Cash Collateralize the then
outstanding amount of all L/C Obligations. For purposes hereof, “Cash
Collateralize” means
to pledge and deposit with or deliver to the Lender, as collateral for the L/C
Obligations, cash or deposit account balances in an amount equal to the then
outstanding amount of all L/C Obligations pursuant to documentation in form and
substance satisfactory to the Lender. Derivatives of such term have
corresponding meanings. Cash Collateral shall be maintained in blocked,
non-interest bearing deposit account with the Lender.
(g) Applicability
of ISP98. Unless
otherwise expressly agreed by the Lender and the Borrower when a Letter of
Credit is issued (including any such agreement applicable to an Existing Letter
of Credit), the rules of the “International Standby Practices 1998” published by
the Institute of International Banking Law & Practice (or such later version
thereof as may be in effect at the time of issuance) shall apply to each Letter
of Credit.
(h) Letter
of Credit Fees. The
Borrower shall pay to the Lender on a quarterly basis a Letter of Credit fee for
each Letter of Credit equal to the 3.50% per annum times the
daily maximum amount available to be drawn under such Letter of Credit (whether
or not such maximum amount is then in effect under such Letter of Credit) for
the duration of such Letter of Credit. Such Letter of Credit fee shall be
payable in arrears on the last Business Day of each calendar
quarter.
(i) Fronting
Fee and Documentary and Processing Charges Payable to Lender. The
Borrower shall pay directly to the Lender for its own account the customary
issuance, presentation, amendment and other processing fees, and other standard
costs and charges, of such the Lender relating to letters of credit as from time
to time in effect. Such customary fees and standard costs and charges are due
and payable on demand and are nonrefundable.
(j) Conflict
with Letter of Credit or Letter of Credit Application. In the
event of any conflict between the terms hereof and the terms of any Letter of
Credit or Letter of Credit Application, the terms hereof shall
control.
(k) Designation
of Subsidiaries as Account Parties.
Notwithstanding anything to the contrary set forth in this Agreement, including
without limitation Section
2.02(a), a
Letter of Credit issued hereunder may contain a statement to the effect that
such letter of Credit is issued for the account of a Subsidiary of the Borrower,
provided that notwithstanding such statement, the Borrower shall be the actual
account party for all purposes of this Agreement for such Letter of Credit and
such statement shall not affect the Borrower’s reimbursement obligations
hereunder with respect to such Letter of Credit.
20
2.03 Prepayments.
(a) Voluntary
Prepayments of Loans. The
Borrower may, upon notice from the Borrower to the Lender, at any time or from
time to time voluntarily prepay Revolving Loans in whole or in part without
premium or penalty; provided that (i) such notice must be received by the Lender
not later than 11:00 a.m. on the date of any such prepayment; and (ii) any such
payment shall be in a principal amount of $100,000 or a whole multiple of
$50,000 in excess thereof (or, if less, the entire principal amount thereof then
outstanding).
(b) Mandatory
Prepayments of Loans. If for
any reason the sum of the outstanding principal amount of Revolving Loans
plus the
outstanding amount of L/C Obligations at any time exceeds the lesser of (i) the
Commitment Amount and (ii) the Borrowing Base, the Borrower shall immediately
prepay Revolving Loans and/or Cash Collateralize the L/C Obligations in an
aggregate amount equal to such excess.
2.04 Termination
or Reduction of Commitment.
The
Borrower may, upon notice from the Borrower to the Lender, terminate the
Commitment or permanently reduce the Commitment Amount; provided that (a)
any reduction of the Commitment Amount shall not be to an amount less than the
sum of the outstanding principal amount of Revolving Loans plus the
outstanding amount of L/C Obligations, (b) any such notice shall be received by
the Lender not later than 11:00 a.m. three Business Days prior to the date of
termination or reduction and (c) any such partial reduction shall be in an
aggregate amount of $100,000 or any whole multiple of $50,000 in excess thereof.
All commitment fees accrued as provided in Section
2.07 until
the effective date of the termination of the Commitment or reduction of the
Commitment Amount shall be paid on the effective date of such termination or
reduction.
2.05 Repayment
of Loans.
The
Borrower shall repay the aggregate outstanding principal amount of all Revolving
Loans on the Maturity Date.
2.06 Interest.
(a) Subject
to the provisions of subsections (b) and (c) below, (i) each Eurodollar Rate
Loan shall bear interest on the outstanding principal amount thereof for each
Interest Period at a rate per annum equal to the Eurodollar Rate plus 3.50%
and (ii) each Base Rate Loan shall bear interest on the outstanding principal
amount thereof from the applicable borrowing date at a rate per annum equal to
the Base Rate plus 2.50%.
(b) If the
Lender determines that at any time, (i) any Law
has made it unlawful, or that any Governmental Authority has asserted that it is
unlawful, for the Lender or its applicable lending office to make, maintain or
fund Eurodollar Rate Loans, or to determine or charge interest rates based upon
the Eurodollar Rate, or (ii) for any
reason adequate and reasonable means do not exist for determining the
Eurodollar Rate or that the Eurodollar Rate does not adequately and fairly
reflect the cost to the Lender of funding such Revolving Loan, then, in each
case, upon notice thereof by the Lender to the Borrower, each Revolving Loan
shall bear interest on the outstanding principal amount thereof from the date of
such notice, in the case of outstanding Revolving Loans, and from the applicable
borrowing date, in the case of Revolving Loans advanced after the date of such
notice, at a rate per annum equal to the Base Rate plus 2.50%.
21
(c) Upon the
occurrence and during the continuation of an Event of Default, the Borrower
shall pay interest on the principal amount of all outstanding Obligations at a
fluctuating interest rate per annum at all times equal to the Default Rate to
the fullest extent permitted by applicable Laws.
(d) Interest
on each Revolving Loan shall be due and payable in arrears on each Interest
Payment Date applicable thereto and at such other times as may be specified
herein. Interest hereunder shall be due and payable in accordance with the terms
hereof before and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Law.
2.07 Fees.
(a) Commitment
Fee. The
Borrower shall pay to the Lender a commitment fee equal to the product of (i)
0.65% per annum times (ii) the
actual daily amount by which the Commitment Amount exceeds the sum of (y) the
outstanding principal amount of Revolving Loans and (z) the outstanding amount
of L/C Obligations. The commitment fee shall accrue at all times during the
period from the Closing Date to the Maturity Date, including at any time during
which one or more of the conditions in Article
V is not
met, and shall be due and payable monthly in arrears on the last Business Day of
each month, commencing with the first such date to occur after the Closing Date,
and on the Maturity Date. The commitment fee shall be calculated monthly in
arrears.
(b) Upfront
Fee. The
Borrower shall pay to the Lender an upfront fee of $50,000 due and payable at
the time of the initial borrowing of a Revolving Loan.
2.08
Computation
of Interest and Fees.
All
computations of interest determined by the Base Rate shall be made on the basis
of a year of 365 or 366 days, as the case may be, and actual days elapsed. All
other computations of fees and interest shall be made on the basis of a 360-day
year and actual days elapsed (which results in more fees or interest, as
applicable, being paid than if computed on the basis of a 365-day year).
Interest shall accrue on each Revolving Loan for the day on which the Revolving
Loan is made, and shall not accrue on a Revolving Loan, or any portion thereof,
for the day on which the Revolving Loan or such portion is paid, provided that any
Revolving Loan that is repaid on the same day on which it is made shall, subject
to Section
2.10, bear
interest for one day.
2.09 Evidence
of Debt.
The
Credit Extensions made by the Lender shall be evidenced by one or more accounts
or records maintained by the Lender in the ordinary course of business. The
accounts or records maintained by the Lender shall be conclusive absent manifest
error of the amount of the Credit Extensions made by the Lender to the Borrower
and the interest and payments thereon. Any failure to so record or any error in
doing so shall not, however, limit or otherwise affect the obligation of the
Borrower hereunder to pay any amount owing with respect to the Obligations. The
Borrower shall execute and deliver to the Lender a promissory note, which shall
evidence the Revolving Loans in addition to such accounts or records. The
promissory note shall be in the form of Exhibit
B (a
“Revolving
Note”). The
Lender may attach schedules to the Revolving Note and endorse thereon the date,
amount and maturity of the Revolving Loans and payments with respect
thereto.
22
2.10 Payments
Generally.
(a) All
payments to be made by the Borrower shall be made without condition or deduction
for any counterclaim, defense, recoupment or setoff. Except as otherwise
expressly provided herein, all payments by the Borrower hereunder shall be made
to the Lender in Dollars and in immediately available funds not later than 3:00
p.m. on the date specified herein. All payments received by the Lender after
3:00 p.m. shall be deemed received on the next succeeding Business Day and any
applicable interest or fee shall continue to accrue.
(b) If any
payment to be made by the Borrower shall come due on a day other than a Business
Day, payment shall be made on the next following Business Day, and such
extension of time shall be reflected in computing interest or fees, as the case
may be.
ARTICLE
III
TAXES,
YIELD PROTECTION AND ILLEGALITY
3.01 Taxes.
(a) Any and
all payments by any Loan Party to or for the account of the Lender under any
Loan Document shall be made free and clear of and without deduction for any and
all present or future taxes, duties, levies, imposts, deductions, assessments,
fees, withholdings or similar charges, and all liabilities with respect thereto,
excluding taxes
imposed on or measured by the Lender’s overall net income, and franchise or
similar taxes imposed on the Lender (in lieu of, or in addition to, net income
taxes), by the jurisdiction (or any political subdivision thereof) under the
Laws of which the Lender is organized or maintains a lending office (all such
non-excluded taxes, duties, levies, imposts, deductions, assessments, fees,
withholdings or similar charges, and liabilities being hereinafter referred to
as “Taxes”). If
any Loan Party shall be required by any Laws to deduct any Taxes from or in
respect of any sum payable under any Loan Document to the Lender, (i) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section), the Lender receives an amount equal to the sum it would have
received had no such deductions been made, (ii) such Loan Party shall make such
deductions, (iii) such Loan Party shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
Laws, and (iv) within thirty days after the date of such payment, such Loan
Party shall furnish to the Lender the original or a certified copy of a receipt
evidencing payment thereof or, if no such receipt is available, other evidence
of payment reasonably satisfactory to the Lender.
(b) In
addition, the Borrower agrees to pay any and all present or future stamp, court
or documentary taxes and any other excise or property taxes or charges or
similar levies which arise from any payment made under any Loan Document or from
the execution, delivery, performance, enforcement or registration of, or
otherwise with respect to, any Loan Document (hereinafter referred to as
“Other
Taxes”).
(c) The
Borrower agrees to indemnify the Lender for (i) the full amount of Taxes and
Other Taxes (including any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section) paid by the Lender, and (ii)
any liability (including additions to tax, penalties, interest and expenses)
arising therefrom or with respect thereto, in each case whether or not such
Taxes or Other Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. Payment under this subsection (c) shall be made
within thirty days after the date the Lender makes a demand
therefor.
23
3.02 Increased
Cost and Reduced Return; Capital Adequacy.
(a) If the
Lender determines that as a result of the introduction of or any change in or in
the interpretation of any Law, or the Lender's compliance therewith, there shall
be any increase in the cost to the Lender of agreeing to make or making, funding
or maintaining Eurodollar Rate Loans or (as the case may be) issuing Letters of
Credit, or a reduction in the amount received or receivable by the Lender in
connection with any of the foregoing (excluding for purposes of this subsection
(a) any such increased costs or reduction in amount resulting from (i) Taxes or
Other Taxes (as to which Section
3.01 shall
govern) and (ii) changes in the basis of taxation of overall net income or
overall gross income by the United States or any foreign jurisdiction or any
political subdivision of either thereof under the Laws of which the Lender is
organized or has its lending office), then from time to time upon demand of the
Lender, the Borrower shall pay to the Lender such additional amounts as will
compensate the Lender for such increased cost or reduction.
(b) If the
Lender determines that the introduction of any Law regarding capital adequacy or
any change therein or in the interpretation thereof, in each case after the date
hereof, or compliance by the Lender (or its lending office) therewith, has the
effect of reducing the rate of return on the capital of the Lender or any
corporation controlling the Lender as a consequence of the Lender's obligations
hereunder (taking into consideration its policies with respect to capital
adequacy and the Lender's desired return on capital), then from time to time
upon demand of the Lender, the Borrower shall pay to the Lender such additional
amounts as will compensate the Lender for such reduction.
3.03 Matters
Applicable to all Requests for Compensation.
A
certificate of the Lender claiming compensation under this Article
III and
setting forth the additional amount or amounts to be paid to it hereunder shall
be prime facie evidence of such amount. In determining such amount, the Lender
may use any reasonable averaging and attribution methods.
3.04 Survival.
All of
the Borrower’s obligations under this Article
III shall
survive termination of the Commitment and repayment of all
Obligations.
ARTICLE
IV
GUARANTY
4.01 The
Guaranty.
Each of
the Guarantors hereby jointly and severally guarantees to the Lender, as
hereinafter provided, as primary obligor and not as surety, the prompt payment
of the Obligations in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration, as a mandatory cash collateralization or otherwise)
strictly in accordance with the terms thereof. The Guarantors hereby further
agree that if any of the Obligations are not paid in full when due (whether at
stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise), the Guarantors will, jointly and severally,
promptly pay the same, without any demand or notice whatsoever, and that in the
case of any extension of time of payment or renewal of any of the Obligations,
the same will be promptly paid in full when due (whether at extended maturity,
as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise) in accordance with the terms of such extension
or renewal.
24
Notwithstanding
any provision to the contrary contained herein or in any other of the Loan
Documents, the
obligations of each Guarantor under
this Agreement and the other Loan Documents shall be
limited to an aggregate amount equal to the largest amount that would not render
such obligations subject to avoidance under the Debtor Relief Laws or any
comparable provisions of any applicable state law.
4.02 Obligations
Unconditional.
The
obligations of the Guarantors under Section 4.01 are
joint and several, absolute and unconditional, irrespective of the value,
genuineness, validity, regularity or enforceability of any of the Loan
Documents, or any other agreement or instrument referred to therein, or any
substitution, release, impairment or exchange of any other guarantee of or
security for any of the Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever which might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section 4.02 that the
obligations of the Guarantors hereunder shall be absolute and unconditional
under any and all circumstances. Each Guarantor agrees that such Guarantor shall
have no right of subrogation, indemnity, reimbursement or contribution against
the Borrower or any other Guarantor for amounts paid under this Article IV until
such time as the Obligations have been paid in full and the Commitment has
expired or terminated. Without limiting the generality of the foregoing, it is
agreed that, to the fullest extent permitted by law, the occurrence of any one
or more of the following shall not alter or impair the liability of any
Guarantor hereunder, which shall remain absolute and unconditional as described
above:
(a) at any
time or from time to time, without notice to any Guarantor, the time for any
performance of or compliance with any of the Obligations shall be extended, or
such performance or compliance shall be waived;
(b) any of
the acts mentioned in any of the provisions of any of the Loan Documents, or any
other agreement or instrument referred to in the Loan Documents, shall be done
or omitted;
(c) the
maturity of any of the Obligations shall be accelerated, or any of the
Obligations shall be modified, supplemented or amended in any respect, or any
right under any of the Loan Documents or any other agreement or instrument
referred to in the Loan Documents shall be waived, or any other guarantee of any
of the Obligations or any security therefor shall be released, impaired or
exchanged in whole or in part or otherwise dealt with;
(d) any Lien
granted to, or in favor of, the Lender as security for any of the Obligations
shall fail to attach or be perfected; or
(e) any of
the Obligations shall be determined to be void or voidable (including, without
limitation, for the benefit of any creditor of any Guarantor) or shall be
subordinated to the claims of any Person (including, without limitation, any
creditor of any Guarantor).
With
respect to its obligations hereunder, each Guarantor hereby expressly waives
diligence, presentment, demand of payment, protest and all notices whatsoever,
and any requirement that the Lender exhaust any right, power or remedy or
proceed against any Person under any of the Loan Documents or any other
agreement or instrument referred to in the Loan Documents or against any other
Person under any other guarantee of, or security for, any of the
Obligations.
4.03 Reinstatement
The
obligations of the Guarantors under this Article IV shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Obligations is rescinded or must be
otherwise restored by any holder of any of the Obligations, whether as a result
of any proceedings in bankruptcy or reorganization or otherwise, and each
Guarantor agrees that it will indemnify the Lender on demand for all reasonable
costs and expenses (including, without limitation, fees and expenses of counsel
and allocated costs of internal counsel) incurred by the Lender in connection
with such rescission or restoration, including any such costs and expenses
incurred in defending against any claim alleging that such payment constituted a
preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law.
25
4.04 Certain
Additional Waivers.
Each
Guarantor agrees that such Guarantor shall have no right of recourse to security
for the Obligations, except through the exercise of rights of subrogation
pursuant to Section 4.02 and
through the exercise of rights of contribution pursuant to Section 4.06.
4.05 Remedies.
The
Guarantors agree that, to the fullest extent permitted by law, as between the
Guarantors, on the one hand, and the Lender, on the other hand, the Obligations
may be declared to be forthwith due and payable as provided in Section 9.02 (and
shall be deemed to have become automatically due and payable in the
circumstances provided in said Section 9.02) for
purposes of Section 4.01
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or preventing the Obligations from becoming automatically due and
payable) as against any other Person and that, in the event of such declaration
(or the Obligations being deemed to have become automatically due and payable),
the Obligations (whether or not due and payable by any other Person) shall
forthwith become due and payable by the Guarantors for purposes of Section 4.01.
4.06 Rights
of Contribution.
The
Guarantors hereby agree as among themselves that, in connection with payments
made hereunder, each Guarantor shall have a right of contribution from each
other Guarantor in accordance with applicable Law. Such contribution rights
shall be subordinate and subject in right of payment to the Obligations until
such time as the Obligations have been irrevocably paid in full and the
commitments relating thereto shall have expired or been terminated, and none of
the Guarantors shall exercise any such contribution rights until the Obligations
have been irrevocably paid in full and the commitments relating thereto shall
have expired or been terminated.
4.07 Guarantee
of Payment; Continuing Guarantee.
The
guarantee in this Article IV is a
guaranty of payment and not of collection, is a continuing guarantee, and shall
apply to all Obligations whenever arising.
26
ARTICLE
V
CONDITIONS
PRECEDENT TO CREDIT
EXTENSIONS
5.01 Conditions
of Initial Credit Extension.
The
obligation of the Lender to make the initial Credit Extension hereunder is
subject to satisfaction of the following conditions precedent:
(a) Loan
Documents. Receipt
by the Lender of executed counterparts of this Agreement and the other Loan
Documents, each property executed by a Responsible Officer of the signing Loan
Party and, in the case of this Agreement, by the Lender.
(b) No
Material Adverse Change.
No
material adverse change shall have occurred since December 31, 2003 in the
business, assets, properties, liabilities (actual or contingent), operations,
conditions (financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole.
(c) Opinions
of Counsel. Receipt
by the Lender of originals or facsimiles (followed promptly by originals) of a
favorable opinion of counsel to the Loan Parties addressed to the Lender, dated
as of the Closing Date, and in form and substance reasonably satisfactory to the
Lender.
(d) Organization
Documents, Resolutions, Etc. Receipt
by the Lender of the following, each of which shall be originals or facsimiles
(followed promptly by originals) and in form and substance satisfactory to the
Lender:
(i) copies of
the Organization Documents of the Borrower and each Guarantor certified
to be true and complete as of a recent date by the appropriate Governmental
Authority of the state of its incorporation or organization and certified by a
secretary or assistant secretary of such Person to be true and correct as of the
Closing Date;
(ii) such
certificates of resolutions or other action, incumbency certificates and/or
other certificates of Responsible Officers of each Loan Party as the Lender may
require evidencing the identity, authority and capacity of each Responsible
Officer thereof authorized to act as a Responsible Officer in connection with
this Agreement and the other Loan Documents to which such Loan Party is a party;
and
(iii) such
documents and certifications as the Lender may reasonably require to evidence
that the Borrower and each Guarantor is duly incorporated, validly existing, in
good standing and qualified to engage in business in its state of incorporation.
(e) Consents.
All
governmental, shareholder and third party consents and approvals necessary in
connection with this Agreement and the other Loan Documents shall have been
obtained and shall be in force and effect.
(f) Judgments;
Litigation.
There
shall not exist (a) any order, decree, judgment, ruling or injunction which
restrains the ability of the Loan Parties to enter into this Agreement and the
other Loan Documents, and (b) any pending or, to the knowledge of the Loan
Parties, threatened, action, suit, investigation or proceeding which, if
adversely determined, would reasonably be expected to have a Material Adverse
Effect.
27
(g) Financial
Statements. The
Lender shall have received (i) a forecast prepared by management of the balance
sheets, income statements and cash flow statements for the Borrower for the year
subsequent to the Closing Date and (ii) such other financial information
regarding the Borrower and its Subsidiaries as the Lender shall request.
(h) Personal
Property Collateral.
The
Lender shall have received the following, each in form and substance
satisfactory to the Lender:
(i) Lien
Priority.
Evidence that (A) the Lender, holds a perfected, first priority Lien on all
Collateral and (B) none of the Collateral is subject to any Liens (other than
Permitted Liens);
(ii) UCC
Financing Statements. Such
UCC financing statements as are necessary or appropriate, in the Lender’s
discretion, to perfect the security interests in the Collateral;
(iii) Intellectual
Property. Such
patent, trademark and copyright notices and recordations as are necessary or
appropriate, in the Lender’s discretion, to perfect the security interests in
the Loan Parties’ IP Rights; and
(iv) Capital
Stock.
Original certificates evidencing the Capital Stock pledged pursuant to the
Collateral Documents (to the extent such Capital Stock is certificated),
together with undated stock transfer powers executed in blank.
(i) Evidence
of Insurance. The
Lender’s receipt of copies of insurance certificates or policies with respect to
all insurance required to be maintained pursuant to the Loan Documents
identifying the Lender as sole loss payee, with respect to flood hazard and
casualty insurance, and as additional insured, with respect to liability
insurance.
(j) Fees. Receipt
by the Lender of all fees due and owing on the Closing Date.
(k) Attorney
Costs. The
Borrower shall have paid all reasonable fees and expenses of counsel and
allocated costs of internal counsel to the Lender incurred in connection with
the execution and delivery by the Lender of this Agreement.
(l) Opening
Borrowing Base Report. The
Lender shall have received (i) a Borrowing Base Certificate executed by a
Responsible Officer certifying the Borrowing Base as of the Closing Date, (ii) a
certificate executed by a Responsible Officer certifying the balance of the
Eligible Receivables as of the Closing Date, and (iii) in form and substance
reasonably satisfactory to it, such other reports as the Lender may reasonably
request.
5.02 Conditions
to all Credit Extensions.
The
obligation of the Lender to honor any Request for Credit Extension is subject to
the following conditions precedent:
(a) The
representations and warranties of the Loan Parties contained in Article
VI and the
other Loan Documents, or which are contained in any document furnished at any
time under or in connection herewith or therewith, shall be true and correct in
all material respects on and as of the date of such Credit Extension, except to
the extent that such representations and warranties specifically refer to an
earlier date, in which case they shall be true and correct in all material
respects as of such earlier date.
28
(b) No
Default or Event of Default shall exist or would result from such proposed
Credit Extension.
(c) There
shall not have been commenced against the Borrower or any Subsidiary an
involuntary case under any applicable Debtor Relief Law, now or hereafter in
effect, or any case, proceeding or other action for the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or for the
winding up or liquidation of its affairs, and such involuntary case or other
case, proceeding or other action shall remain undismissed.
(d) The
Lender shall have received a Request for Credit Extension in accordance with the
requirements hereof.
(e) The
Lender shall have received a Borrowing Base Certificate demonstrating compliance
with the Borrowing Base after giving effect to such Revolving Loan.
(f) Immediately
after giving effect to the making of such Revolving Loan (and the application of
the proceeds thereof), the sum of the aggregate principal amount of outstanding
Revolving Loans shall not exceed the lesser of (i) the Committed Amount and (ii)
the Borrowing Base.
(g) At the
time of the initial borrowing of a Revolving Loan, the Lender shall have
received from the Borrower an upfront fee of $50,000.
Each
Request for Credit Extension submitted by the Borrower shall be deemed to be a
representation and warranty that the conditions specified in Sections
5.02(a),
(b) and
(c) have
been satisfied on and as of the date of the applicable Credit
Extension.
ARTICLE
VI
REPRESENTATIONS
AND WARRANTIES
The Loan
Parties represent and warrant to the Lender that:
6.01 Existence,
Qualification and Power.
Each of
the Borrower and its Subsidiaries (a) is a corporation, partnership or limited
liability company duly organized or formed, validly existing and in good
standing under the Laws of the jurisdiction of its incorporation or
organization, (b) has all requisite power and authority and all requisite
governmental licenses, authorizations, consents and approvals to (i) own its
assets and carry on its business and (ii) execute, deliver and perform its
obligations under the Loan Documents to which it is a party, and (c) is duly
qualified and is licensed and in good standing under the Laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification or license; except in each
case referred to in clause (b)(i) or (c), to the extent that failure to do so
would not reasonably be expected to have a Material Adverse Effect.
29
6.02 Authorization;
No Contravention.
The
execution, delivery and performance by each Loan Party of each Loan Document to
which such Person is party, have been duly authorized by all necessary corporate
or other organizational action, and do not (a) contravene the terms of any of
such Person's Organization Documents; (b) violate or result in any breach or
contravention of, or the creation of any Lien under, (i) any Contractual
Obligation to which such Person is a party or (ii) any order, injunction, writ
or decree of any Governmental Authority or any arbitral award to which such
Person or its property is subject; or (c) violate any Law (including, without
limitation, Regulation U or Regulation X issued by the FRB).
6.03 Governmental
Authorization; Other Consents.
No
approval, consent, exemption, authorization, or other action by, or notice to,
or filing with, any Governmental Authority or any other Person is necessary or
required in connection with the execution, delivery or performance by, or
enforcement against, any Loan Party of this Agreement or any other Loan
Document, other than those that have already been obtained and are in full force
and effect.
6.04 Binding
Effect.
This
Agreement and each other Loan Document has been duly executed and delivered by
each Loan Party that is party thereto. This Agreement and each other Loan
Document constitutes a legal, valid and binding obligation of each Loan Party
that is party thereto, enforceable against each such Loan Party in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally and by general principles of equity.
6.05 Financial
Statements; No Material Adverse Effect.
(a) The
Audited Financial Statements fairly present the financial condition of the
Borrower and its Subsidiaries, as of the date thereof and their results of
operations for the period covered thereby.
(b) The
Audited Financial Statements were prepared in good faith based on the books and
records of the Borrower and the Subsidiaries and in accordance with GAAP (except
as may be indicated in the notes attached thereto).
(c) From
December 31, 2003 to and
including the Closing Date, there has been no Disposition by the Borrower or any
Subsidiary, or any Involuntary Disposition, of any material part of the business
or Property of the Borrower and its Subsidiaries, taken as a whole, and no
purchase or other acquisition by any of them of any business or property
(including any Capital Stock of any other Person) material in relation to the
consolidated financial condition of the Borrower and its Subsidiaries, taken as
a whole, in each case, which is not reflected in the Audited Financial
Statements or in the notes thereto and has not otherwise been disclosed in
writing to the Lender on or prior to the Closing Date.
(d) The
financial statements delivered pursuant to Section
7.01 have
been prepared in accordance with GAAP (except as may otherwise be permitted
under Section
7.01), and
present fairly (on the basis disclosed in the footnotes to such financial
statements) the consolidated and consolidating financial condition, results of
operations and cash flows of the Borrower and its Subsidiaries as of such date
and for such periods.
(e) Since
December 31, 2003, there has been no event or circumstance that has had or could
reasonably be expected to have a Material Adverse Effect.
30
6.06 Litigation.
There are
no actions, suits, investigations, criminal prosecutions, civil investigative
demands, imposition of criminal fines or penalties, proceedings, claims or
disputes pending or, to the knowledge of the Loan Parties after due and diligent
investigation, threatened or contemplated, at law, in equity, in arbitration or
before any Governmental Authority, by or against the Borrower or any of its
Subsidiaries or against any of their properties or revenues that (a) purport to
affect or pertain to this Agreement or any other Loan Document, or any of the
transactions contemplated hereby or (b) could reasonably be expected to have a
Material Adverse Effect.
6.07 No
Default.
(a) Neither
the Borrower nor any Subsidiary is in default under or with respect to any
Contractual Obligation that could reasonably be expected to have a Material
Adverse Effect.
(b) No
Default or Event of Default has occurred and is continuing.
(c) No
“Default” or “Event of Default” (or any comparable terms) under, and as defined
in, the Subway Contract has occurred and is continuing.
6.08
Ownership
of Property; Liens.
Each of
the Borrower and its Subsidiaries has good record and marketable title in fee
simple to, or valid leasehold interests in, all real property necessary or used
in the ordinary conduct of its business, except for such defects in title as
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. The property of the Borrower and its Subsidiaries is
subject to no Liens, other than Permitted Liens.
6.09 Environmental
Compliance.
Except as
could not reasonably be expected to have a Material Adverse Effect:
(a) Since the
occupation thereof by the Borrower or its Subsidiaries, each of the Facilities
and all operations of the Borrower and its Subsidiaries at the Facilities are in
compliance with all applicable Environmental Laws, and there is no violation of
any Environmental Law with respect to the operations by the Borrower or the
Subsidiaries at the Facilities or the Businesses, and, to the knowledge of the
Responsible Officers of the Loan Parties, there are no conditions relating to
the Facilities or the Businesses that could give rise to liability under any
applicable Environmental Laws.
(b) To the
knowledge of the Responsible Officers of the Loan Parties, none of
the Facilities contains, or has previously contained, any Hazardous Materials
at, on or under the Facilities in amounts or concentrations that constitute or
constituted a violation of, or could give rise to liability under, Environmental
Laws.
(c) Neither
the Borrower nor any Subsidiary has received any written notice of, or inquiry
from any Governmental Authority regarding, any violation, alleged violation,
non-compliance, liability or potential liability regarding environmental matters
or compliance with Environmental Laws with regard to any of the Facilities or
the Businesses, nor does any Responsible Officer of any Loan Party have
knowledge or reason to believe that any such notice will be received or is being
threatened.
31
(d) Hazardous
Materials
have not been transported or disposed of from the Facilities, or generated,
treated, stored or disposed of at, on or under any of the Facilities or any
other location, in each case by or on behalf of the Borrower or any Subsidiary
in violation of, or in a manner that would be reasonably likely to give rise to
liability under, any applicable Environmental Law.
(e) No
judicial proceeding or governmental or administrative action is pending or, to
the knowledge of the
Responsible Officers of the Loan
Parties, threatened, under any Environmental Law to which the Borrower or any
Subsidiary is or will be named as a party, nor are there any consent decrees or
other decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental Law
with respect to the Borrower, any Subsidiary, the Facilities or the
Businesses.
(f) There has
been no release or, threat of release of Hazardous Materials by the Borrower or
its Subsidiaries at or from the Facilities, or arising from or related to the
operations (including, without limitation, disposal) of the Borrower or any
Subsidiary in connection with the Facilities or otherwise in connection with the
Businesses, in violation of or in amounts or in a manner that could give rise to
liability under Environmental Laws.
6.10 Insurance.
The
properties of the Borrower and its Subsidiaries are insured with financially
sound and reputable insurance companies not Affiliates of the Borrower, in such
amounts, with such deductibles and covering such risks as are customarily
carried by companies engaged in similar businesses and owning similar properties
in localities where the Borrower or the applicable Subsidiary
operates.
6.11 Taxes.
The
Borrower and its Subsidiaries have filed all federal, state and other material
tax returns and reports required to be filed, and have paid all federal, state
and other material taxes, assessments, fees and other governmental charges
levied or imposed upon them or their properties, income or assets otherwise due
and payable, except those which are being contested in good faith by appropriate
proceedings diligently conducted and for which adequate reserves have been
provided in accordance with GAAP. There is no proposed tax assessment against
the Borrower or any Subsidiary that would, if made, have a Material Adverse
Effect.
6.12 ERISA
Compliance.
(a) Each Plan
is in compliance in all material respects with the applicable provisions of
ERISA, the Internal Revenue Code and other federal or state Laws except to the
extent that noncompliance could not reasonably be expected to have a Material
Adverse Effect. Each Plan that is intended to qualify under Section 401(a) of
the Internal Revenue Code has received a favorable determination letter from the
IRS, an application for such a letter is currently being processed by the IRS
with respect thereto and, to the best knowledge of the Loan Parties, nothing has
occurred which would prevent, or cause the loss of, such qualification except to
the extent the event could not reasonably be expected to have a Material Adverse
Effect. Each Loan Party and each ERISA Affiliate has made all required
contributions to each Plan subject to Section 412 of the Internal Revenue Code,
and no application for a funding waiver or an extension of any amortization
period pursuant to Section 412 of the Internal Revenue Code has been made with
respect to any Plan except as could not reasonably be expected to have a
Material Adverse Effect.
32
(b) There are
no pending or, to the knowledge of the Loan Parties, threatened claims, actions
or lawsuits, or action by any Governmental Authority, with respect to any Plan
that could be reasonably be expected to have a Material Adverse Effect. There
has been no prohibited transaction or violation of the fiduciary responsibility
rules with respect to any Plan that has resulted or could reasonably be expected
to result in a Material Adverse Effect.
(c) Except as
could not reasonably be expected to have a Material Adverse Effect, (i) no ERISA
Event has occurred or is reasonably expected to occur; (ii) no Pension Plan has
any Unfunded Pension Liability; (iii) no Loan Party nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability under Title IV of ERISA
with respect to any Pension Plan (other than premiums due and not delinquent
under Section 4007 of ERISA); (iv) no Loan Party nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA, would
result in such liability) under Sections 4201 or 4243 of ERISA with respect to a
Multiemployer Plan; and (v) no Loan Party nor any ERISA Affiliate has engaged in
a transaction that could be subject to Sections 4069 or 4212(c) of
ERISA.
6.13 Subsidiaries.
Set forth
on Schedule
6.13 is a
complete and accurate
list as of the Closing Date of each Subsidiary of the Borrower, together with
(i)
jurisdiction of formation, (ii) number
of shares of each class of Capital Stock outstanding, (iii) number
and percentage of outstanding shares of each class owned (directly or
indirectly) by each of the Loan Parties and (iv) the number and effect, if
exercised, of all outstanding options, warrants, rights of conversion or
purchase and all other similar rights with respect thereto of each Subsidiary.
The outstanding Capital Stock of each Subsidiary is validly issued, fully paid
and non-assessable.
6.14 Margin
Regulations; Investment Company Act; Public Utility Holding Company
Act.
(a) The
Borrower is not engaged and will not engage, principally or as one of its
important activities, in the business of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the FRB), or extending credit for
the purpose of carrying margin stock. Following the application of the proceeds
of each borrowing of Revolving Loans or drawing under each Letter of Credit, not
more than 25% of the value of the assets (of the Borrower only, or of the
Borrower and its Subsidiaries on a consolidated basis) subject to the provisions
of Section
8.01 or
Section
8.05 or
subject to any restriction contained in any agreement or instrument between the
Borrower and the Lender or any Affiliate of the Lender relating to Indebtedness
will be margin stock, or
(b) None of
the Borrower, any Subsidiary, or to the best of its knowledge, after due
inquiry, any Person Controlling the Borrower, is a “holding company,” or a
“subsidiary company” of a “holding company,” or an “affiliate” of a “holding
company” or of a “subsidiary company” of a “holding company,” within the meaning
of the Public Utility Holding Company Act of 1935, or (ii) is or is required to
be registered as an “investment company” under the Investment Company Act of
1940.
6.15 Disclosure.
Each Loan
Party has disclosed to the Lender all agreements, instruments and corporate or
other restrictions to which it or any of its Subsidiaries is subject, and all
other matters known to it, that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect. No report,
financial statement, certificate or other information furnished (whether in
writing or orally) by or on behalf of the Borrower or any Subsidiary to the
Lender in connection with the transactions contemplated hereby and the
negotiation of this Agreement or delivered hereunder (as modified or
33
supplemented
by other information so furnished) contains any material misstatement of fact or
omits to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided that,
with respect to projected financial information, the Loan Parties represent only
that such information was prepared in good faith based upon assumptions believed
to be reasonable at the time.
6.16 Compliance
with Laws.
Each of
the Borrower and its Subsidiaries is in compliance in all material respects with
the requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its properties, except in such instances in which (a)
such requirement of Law or order, writ, injunction or decree is being contested
in good faith by appropriate proceedings diligently conducted or (b) the failure
to comply therewith could not reasonably be expected to have a Material Adverse
Effect.
6.17 Intellectual
Property; Licenses, Etc.
Each Loan
Party owns, or possesses the legal right to use, all of the trademarks, service
marks, trade names, copyrights, patents, patent rights, franchises, licenses and
other intellectual property rights (collectively, “IP
Rights”) that
are reasonably necessary for the operation of their respective
businesses. Set
forth on Schedule
6.17 is a
list of all IP Rights registered or pending registration with the United States
Copyright Office or the United States Patent and Trademark Office and owned by
each Loan Party as of the Closing Date. Except for such claims and infringements
that could not reasonably be expected to have a Material Adverse Effect, no
claim has been asserted and is pending by any Person challenging or questioning
the use of any IP Rights or the validity or effectiveness of any IP Rights, nor
does any Loan Party know of any such claim, and, to the knowledge of the
Responsible Officers of the Loan Parties, the use of any IP Rights by the
Borrower or any Subsidiary or the granting of a right or a license in respect of
any IP Rights from the Borrower or any Subsidiary does not infringe on the
rights of any Person. None of
the IP Rights owned by any of the Loan
Parties is
subject to any licensing agreement or similar arrangement other than (a)
licenses of software in the ordinary course of business to customers, resellers
and distributors, (b) licenses of trademarks and tradenames in the ordinary
course of business to value added resellers and distributors, (c) as set forth
on Schedule
6.17 or (d)
as otherwise not prohibited hereunder.
6.18 Labor
Matters.
There are
no collective bargaining agreements or Multiemployer Plans covering the
employees of the Borrower or any Subsidiary as of the Closing Date and neither
the Borrower nor any Subsidiary has suffered any strikes, walkouts, work
stoppages or other material labor difficulty within the last five years.
6.19 Business
Locations.
Set forth
on Schedule
6.19(a) is a
list of all real property that is owned or
leased by the Loan Parties as of the
Closing Date. Set forth on Schedule
6.19(b) is a
list of all locations where any tangible personal property of any Loan Party is
located as of the Closing Date. Set forth on Schedule
6.19(c) is the
chief executive office of each Loan Party as of the Closing Date. The exact
legal name and state of organization of each Loan Party is as set forth on the
signature pages hereto or on the signature pages of any Joinder Agreement
delivered in connection herewith.
34
6.20 Solvency.
The Loan
Parties are Solvent on a consolidated basis.
6.21 Perfection
of Security Interests in the Collateral.
The
Collateral Documents create
valid security interests in, and Liens on, the Collateral purported to be
covered thereby, which security interests and Liens are currently perfected
security interests and Liens, prior to all other Liens other than Permitted
Liens.
ARTICLE
VII
AFFIRMATIVE
COVENANTS
So long
as the Commitment is outstanding or any Obligation (other than any indemnity
obligations that, by their terms, survive the termination of this Agreement)
shall remain unpaid or unsatisfied or any Letter of Credit shall remain
outstanding, the Loan Parties shall and shall cause each Subsidiary
to:
7.01 Financial
Statements.
Deliver
to the Lender, in form and detail satisfactory to the Lender:
(a) Annual
Financial Statements. As soon
as available, but in any event within ninety (90) days after the end of each
fiscal year of the Borrower, a consolidated balance sheet of the Borrower and
its Subsidiaries as at the end of such fiscal year, and the related consolidated
statements of income or operations, shareholders' equity and cash flows for such
fiscal year, in each case setting forth in comparative form the consolidated
figures for the previous fiscal year, all in reasonable form and detail, audited
by independent certified public accounts of recognized national standing
acceptable to the Lender and whose opinion shall be to the effect that such
financial statements have been prepared in accordance with GAAP, and shall not
be limited as to scope of the audit or qualified as to the status of the
Borrower and its Subsidiaries as a “going concern”.
(b) Quarterly
Financial Statements. As soon
as available, but in any event within forty-five (45) days after the end of each
of the first three fiscal quarters of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its Subsidiaries as at the end of
such fiscal quarter, and the related consolidated statements of income or
operations, shareholders' equity and cash flows for such fiscal quarter and for
the portion of the Borrower's fiscal year then ended, all in the form of the
September 30, 2004 financial statements provided to the Lender prior to the
Closing Date and in reasonable detail and certified by a Responsible Officer of
the Borrower as fairly presenting the financial condition, results of
operations, shareholders' equity and cash flows of the Borrower and its
Subsidiaries in accordance with GAAP, subject only to normal year-end audit
adjustments and the absence of footnotes.
(c) Monthly
Financial Statements. As soon
as available, but in any event within thirty (30) days after the end of each
calendar month of the fiscal year of the Borrower, a consolidated balance sheet
of the Borrower and its Subsidiaries as at the end of such calendar month, and
the related consolidated statements of income or operations, shareholders’
equity and cash flows for such calendar month, all in the form of the September
30, 2004 financial statements provided to the Lender prior to the Closing Date
and in reasonable detail and certified by a Responsible Officer of the Borrower
as fairly presenting the financial condition, results of operations,
shareholders' equity and cash flows of the Borrower and its Subsidiaries in
accordance with GAAP, subject only to normal year-end audit adjustments and the
absence of footnotes.
35
7.02 Certificates;
Other Information.
Deliver
to the Lender, in form and detail satisfactory to the Lender:
(a) concurrently
with the delivery of the financial statements referred to in Sections 7.01(a) and
(b), a duly
completed Compliance Certificate signed by a Responsible Officer of the
Borrower;
(b) as soon
as available, but in any event within fifteen (15) days after the end of each
calendar month, a certificate as of the end of the immediately preceding month,
substantially in the form of Exhibit
D and
certified by a Responsible Officer of the Borrower to be true and correct as of
the date thereof (the “Borrowing
Base Certificate”);
provided, that if
at any time there are any Revolving Loans outstanding, such Borrowing Base
Certificate must be provided as soon as available, but in any event within two
days after the end of each week;
(c) at least
30 days prior to the end of the fiscal year ending December 31, 2004, an annual
business plan and budget of the Borrower and its Subsidiaries containing, among
other things, pro forma financial statements for each quarter of the next fiscal
year;
(d) copies of
any detailed audit reports, management letters or recommendations, in each case
submitted to the board of directors (or the audit committee of the board of
directors) of the Borrower by independent accountants in connection with the
accounts or books of the Borrower or any Subsidiary, or any audit of any of them
(and promptly upon completion, any written response of the Borrower or any
Subsidiary to any such audit report, management letter or
recommendation);
(e) concurrently
with the delivery of the financial statements referred to in Section
7.01(a), a
certificate of a Responsible Officer of the Borrower containing information
regarding the amount of all Dispositions, Involuntary Dispositions, and Equity
Issuances that occurred during the period covered by such financial
statements;
(f) promptly
after the same are available, copies of each annual report, proxy or financial
statement or other report or communication sent to the stockholders of the
Borrower, and copies of all annual, regular, periodic and special reports and
registration statements which the Borrower may file or be required to file with
the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934
or to a
holder of any Indebtedness owed by the Borrower or any Subsidiary in its
capacity as such a holder and not
otherwise required to be delivered to the Lender pursuant hereto;
(g) promptly,
and in any event within five Business Days after receipt thereof by any Loan
Party or any Subsidiary thereof, copies of each notice or other correspondence
received from the SEC (or comparable agency in any applicable non-U.S.
jurisdiction) concerning any investigation or possible investigation or other
inquiry by such agency regarding financial or other operational results of any
Loan Party or any Subsidiary thereof;
36
(h) concurrently
with the delivery of the financial statements referred to in Section
7.01(a) and
(b), a
certificate of a Responsible Officer of the Borrower (i) listing (A) all
applications, if any, for Copyrights, Patents or Trademarks (each such term as
defined in the Security Agreements) made since the date of the prior certificate
(or, in the case of the first such certificate, the Closing Date), (B) all
issuances of registrations or letters on existing applications for Copyrights,
Patents and Trademarks (each such term as defined in the Security Agreements)
received since the date of the prior certificate (or, in the case of the first
such certificate, the Closing Date) and (C) all Trademark Licenses, Copyright
Licenses and Patent Licenses (each such term as defined in the Security
Agreements) entered into since the date of the prior certificate (or, in the
case of the first such certificate, the Closing Date), and (ii) attaching the
insurance binder or other evidence of insurance for any insurance coverage of
the Borrower or any Subsidiary that was renewed, replaced or modified during the
period covered by such financial statements; and
(i) promptly,
such additional information regarding the business, financial or corporate
affairs of the Borrower or any Subsidiary, or compliance with the terms of the
Loan Documents, as the Lender may from time to time reasonably
request.
7.03 Notices.
(a) Promptly
notify the Lender of the occurrence of any Default or Event of
Default.
(b) Promptly
notify the Lender of any matter that has resulted or could reasonably be
expected to result in a Material Adverse Effect, including, (i) breach or
non-performance of, or any default under, a Contractual Obligation of the
Borrower or any Subsidiary; (ii) any dispute, litigation, investigation,
proceeding or suspension between the Borrower or any Subsidiary and any
Governmental Authority; or (iii) the commencement of, or any material
development in, any litigation or proceeding affecting the Borrower or any
Subsidiary, including pursuant to any applicable Environmental
Laws.
(c) Promptly
notify the Lender after any Responsible Officer of any Loan Party obtains
knowledge of the occurrence of any ERISA Event.
(d) Promptly
notify the Lender of any material change in accounting policies or financial
reporting practices by the Borrower or any Subsidiary except to the extent
required by GAAP.
Each
notice pursuant to this Section
7.03(a) through
(d) shall be
accompanied by a statement of the Borrower signed by a Responsible Officer of
the Borrower setting forth details of the occurrence referred to therein and
stating what action the Borrower has taken and proposes to take with respect
thereto. Each notice pursuant to Section
7.03(a) shall
describe with particularity any and all provisions of this Agreement and any
other Loan Document that have been breached.
7.04 Payment
of Obligations.
Pay and
discharge as the same shall become due and payable, all its obligations and
liabilities, including (a) all tax liabilities, assessments and governmental
charges or levies upon it or its properties or assets, unless, the same are
being contested in good faith by appropriate proceedings diligently conducted
and adequate reserves in accordance with GAAP are being maintained by the
Borrower and its Subsidiaries and (b) all lawful claims which, if unpaid, would
by law become a Lien upon its property (other than Permitted Liens).
Notwithstanding the foregoing, the Borrower shall be free at any time to satisfy
in full the liability to Whitbread Group PLC described in the Borrower’s Form
10-K filed with the U.S. Securities and Exchange Commission for the fiscal year
ended December 31, 2003.
37
7.05 Preservation
of Existence, Etc.
(a) Preserve,
renew and maintain in full force and effect its legal existence under the Laws
of the jurisdiction of its organization except in a transaction permitted by
Section
8.04 or
8.05;
(b) Preserve,
renew and maintain in full force and effect its good standing under the Laws of
the jurisdiction of its organization except in a transaction permitted by
Section
8.04 or
8.05;
(c) Take all
reasonable actions to maintain all material rights, privileges, permits,
licenses and franchises necessary or desirable in the normal conduct of its
business; and
(d) Preserve
or renew all of its material registered patents, trademarks, trade names and
service marks.
7.06 Maintenance
of Properties.
(a) Maintain,
preserve and protect all of its material properties and equipment necessary in
the operation of its business in good working order and condition, ordinary wear
and tear and Involuntary Dispositions excepted; (b) make all necessary repairs
thereto and renewals and replacements thereof; and (c) use the standard of care
typical in the industry in the operation and maintenance of its
facilities.
7.07 Maintenance
of Insurance.
Maintain
in full force and effect insurance (including
worker's compensation insurance, liability insurance, casualty insurance and
business interruption insurance) with
financially sound and reputable insurance companies not Affiliates of the
Borrower or any Subsidiary, in such amounts, with such deductibles and covering
such risks as are customarily carried by companies engaged in similar businesses
and owning similar properties in localities where the Borrower or the applicable
Subsidiary operates.
7.08 Compliance
with Laws.
Comply
with the requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which (i) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted; or (ii)
the failure to comply therewith could not reasonably be expected to have a
Material Adverse Effect.
7.09 Books
and Records.
(a) Maintain
proper books of record and account, in which full, true and correct entries in
conformity with GAAP, as applicable, consistently applied shall be made of all
financial transactions and matters involving the assets and business of the
Borrower and its Subsidiaries; and (b) maintain such books of record and account
in material conformity with all applicable requirements of any Governmental
Authority having regulatory jurisdiction over the Borrower and its
Subsidiaries.
7.10 Inspection
Rights.
Permit
representatives and independent contractors of the Lender to visit and inspect
any of its properties, to examine its corporate, financial and operating
records, and make copies thereof or abstracts therefrom, and to discuss its
affairs, finances and accounts with its directors, officers, and independent
public accountants, all at the expense of the Borrower and at such reasonable
times during normal business hours and as often as may be reasonably desired,
upon reasonable advance notice to the Borrower; provided,
however, that
when an Event of Default exists the Lender (or any of its respective
representatives or independent contractors) may do any of the foregoing at the
expense of the Borrower at any time during normal business hours and without
advance notice.
38
7.11 Use of
Proceeds.
Use the
proceeds of the Credit Extension solely for working capital, capital
expenditures and other lawful corporate purposes.
7.12 Additional
Subsidiaries.
Within
thirty (30) days after the acquisition or formation of any
Subsidiary:
(a) notify
the Lender thereof in writing, together
with (i) jurisdiction of formation, (ii) number of shares of each class of
Capital Stock outstanding, (iii) number and percentage of outstanding shares of
each class owned (directly or indirectly) by the Borrower or any Subsidiary and
(iv) number and effect, if exercised, of all outstanding options, warrants,
rights of conversion or purchase and all other similar rights with respect
thereto; and
(e) if such
Subsidiary is a Domestic Subsidiary, cause such Person to (i) become a Guarantor
by executing and delivering to the Lender a Joinder Agreement or such other
documents as the Lender shall deem appropriate for such purpose, and (ii)
deliver to the Lender documents of the types referred to in Sections
5.01(d) and
(h) and
favorable opinions of counsel to such Person (which shall cover, among other
things, the legality, validity, binding effect and enforceability of the
documentation referred to in clause (a)), all in form, content and scope
reasonably satisfactory to the Lender.
7.13 ERISA
Compliance.
Do, and
cause each of its ERISA Affiliates to do, each of the following: (a) maintain
each Plan in compliance in all material respects with the applicable provisions
of ERISA, the Internal Revenue Code and other federal or state law; (b) cause
each Plan that is qualified under Section 401(a) of the Internal Revenue
Code to maintain such qualification; and (c) make all required contributions to
any Plan subject to Section 412 of the Internal Revenue Code.
7.14 Pledged
Assets.
Each Loan
Party will (i)
cause all
of its owned and leased real and personal Property other than Excluded Property
to be subject at all times to first priority, perfected and, in the case of real
Property (whether leased or owned), title insured Liens in favor of the Liens to
secure the Obligations pursuant to the terms and conditions of the Collateral
Documents or, with respect to any such Property acquired subsequent to the
Closing Date, such other additional security documents as the Lender shall
reasonably request, subject in any case to Permitted Liens and (ii) deliver such
other documentation as the Lender may reasonably request in connection with the
foregoing, including, without limitation, appropriate UCC-1 financing
statements, real estate title insurance policies, surveys, environmental
reports, landlord's waivers, certified resolutions and other organizational and
authorizing documents of such Person, favorable opinions of counsel to such
Person (which shall cover, among other things, the legality, validity, binding
effect and enforceability of the documentation referred to above and the
perfection of the Lender's Liens thereunder) and other items of the types
required to be delivered pursuant to Section
5.01(h), all in
form, content and scope reasonably satisfactory to the Lender. Without limiting
the generality of the above, the Loan
Parties will cause (a)
100% of the issued
and outstanding Capital
Stock of each Domestic Subsidiary and (b) 65% (or such
greater percentage that, due
to a change in an applicable Law after the date hereof, (1) could not reasonably
be expected to cause the undistributed earnings of such Foreign Subsidiary as
determined for United States federal income tax purposes to be treated as a
39
deemed
dividend to such Foreign Subsidiary's United States parent and (2) could not
reasonably be expected to cause any material
adverse tax consequences) of the
issued and
outstanding Capital
Stock entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2))
and 100% of the issued
and outstanding Capital
Stock not entitled to vote (within the meaning of Treas. Reg. Section
1.956-2(c)(2)) in each Foreign Subsidiary directly owned by the Borrower or any
Domestic Subsidiary to be subject at all times to a first priority, perfected
Lien in favor of the Lender pursuant to the terms and conditions of the
Collateral Documents or such other security documents as the Lender shall
reasonably request.
7.15 Cash
Management Accounts. Each
Loan Party will transfer all deposit and operating accounts to the Lender within
90 days of the Closing Date, and thereafter maintain all primary deposit and
operating accounts with the Lender.
7.16 Dissolution
of Subsidiary. As
promptly as practicable, and in any event within 60 days of the Closing Date,
the
Borrower shall liquidate, dissolve or merge JPT in a transaction expressly
permitted by Section
8.04 and
provide the Lender with evidence of such liquidation, dissolution or merger in
form and substance satisfactory to the Lender.
7.17 Post-Closing
Deliverables.
(a) Landlord
Lien Waivers. Within
30 days of the Closing Date, the Loan Parties shall obtain landlord lien
waivers, in form and substance reasonably satisfactory to the Lender, for each
of the leased real property locations located in Dallas, Texas.
(b) Insurance
Coverage.
Within 30
days of the Closing Date, the Loan Parties shall deliver to the Lender copies of
insurance certificates or policies evidencing casualty insurance coverage
sufficient to cover the carrying value of inventory held by the Loan Parties,
naming the Lender as sole loss payee.
ARTICLE
VIII
NEGATIVE
COVENANTS
So long
as the Commitment is outstanding or any Obligation (other than any indemnity
obligations that, by their terms, survive the termination of this Agreement)
shall remain unpaid or unsatisfied or any Letter of Credit shall remain
outstanding, no Loan Party shall, nor shall it permit any Subsidiary to,
directly or indirectly:
8.01 Liens.
Create,
incur, assume or suffer to exist any Lien upon any of its property, assets or
revenues, whether now owned or hereafter acquired, other than the following:
(a) Liens
existing on the date hereof and listed on Schedule
8.01 and any
renewals or extensions thereof, provided that the
property covered thereby is not increased and any renewal or extension of the
obligations secured or benefited thereby is permitted by Section
8.03(b);
40
(b) Liens
(other than Liens imposed under ERISA) for taxes, assessments or governmental
charges or levies not yet due and payable or which are being contested in good
faith and by appropriate proceedings diligently conducted and for which adequate
reserves with respect thereto are maintained on the books of the applicable
Person in accordance with GAAP;
(c) statutory
Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen
and suppliers and other Liens imposed by law or pursuant to customary
reservations or retentions of title arising in the ordinary course of business,
provided that
such Liens secure only amounts not yet due and payable or, if due and payable,
are (i) unfiled and no other action has been taken to enforce the same or (ii)
are being contested in good faith by appropriate proceedings for which adequate
reserves determined in accordance with GAAP have been established;
(d) pledges
or deposits in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other social security legislation,
other than any Lien imposed by ERISA;
(c) deposits
to secure the performance of bids, trade contracts and leases (other than
Indebtedness), statutory obligations, surety bonds (other than bonds related to
judgments or litigation), performance bonds and other obligations of a like
nature incurred in the ordinary course of business;
(d) easements,
rights-of-way, restrictions and other similar encumbrances affecting real
property which, in the aggregate, are not substantial in amount, and which do
not in any case materially detract from the value of the property subject
thereto or materially interfere with the ordinary conduct of the business of the
applicable Person;
(e) Liens
securing judgments for the payment of money (or appeal or other surety bonds
relating to such judgments) not in excess of the Threshold Amount (except to the
extent covered by independent third-party insurance as to which the insurer has
acknowledged in writing its obligation to cover), unless any such judgment
remains undischarged for a period of more than thirty consecutive days during
which execution is not effectively stayed;
(h) Liens
securing Indebtedness permitted under Section
8.03(e);
provided that (i)
such Liens do not at any time encumber any Property other than the Property
financed by such Indebtedness, (ii) the Indebtedness secured thereby does not
exceed the cost or fair market value on the date of acquisition, whichever is
lower, of the Property being acquired and (iii) such Liens attach to such
Property concurrently with or within ninety days after the acquisition
thereof;
(f) leases or
subleases granted
to others not interfering in any material respect with the business of the
Borrower or any Subsidiary;
(g) any
interest of title
of a lessor under, and Liens arising from UCC financing statements (or
equivalent filings, registrations or agreements in foreign jurisdictions)
relating to, leases permitted by this Agreement;
(h) normal
and customary rights
of setoff upon deposits of cash in favor of banks or , minuteother
depository institutions;
(i) Liens of
a collection bank
arising under Section 4-210 of the Uniform Commercial Code on items in the
course of collection; and
(j) Liens of
sellers of goods to the Borrower and any of its Subsidiaries arising under
Article 2 of the Uniform
Commercial Code or
similar provisions of applicable law in the ordinary course of business,
covering only the goods sold and securing only the unpaid purchase price for
such goods and related expenses.
41
8.02 Investments.
Make any
Investments, except:
(a) Investments
held by the Borrower or any Subsidiary in the form of cash or Cash
Equivalents;
(b) Investments
existing as of the Closing Date and set forth in Schedule
8.02;
(c) Investments
in any Person that is a Loan Party prior to giving effect to such
Investment;
(d) |
Guarantees
permitted by Section
8.03;
and |
(e) other
Investments not to exceed $250,000 in the aggregate during the term of this
Agreement.
8.03 Indebtedness.
Create,
incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness
under the Loan Documents;
(b) Indebtedness
of the Borrower and its Subsidiaries set forth in Schedule
8.03 (and
renewals, refinancings and extensions thereof on terms and conditions not
materially less favorable to the applicable debtor(s));
(c) Indebtedness owing
from one Loan Party to another Loan Party;
(d) obligations
(contingent or otherwise) of the Borrower or any Subsidiary existing or arising
under any Swap Contract, provided that (i)
such obligations are (or were) entered into by such Person in the ordinary
course of business for the purpose of directly mitigating risks associated with
liabilities, commitments, investments, assets, or property held or reasonably
anticipated by such Person, or changes in the value of securities issued by such
Person, and not for purposes of speculation or taking a “market view;” and (ii)
such Swap Contract does not contain any provision exonerating the non-defaulting
party from its obligation to make payments on outstanding transactions to the
defaulting party;
(e) purchase
money Indebtedness (including obligations in respect of capital leases) incurred
by the Borrower or any
of its Subsidiaries to finance the purchase of fixed assets, provided that (i)
the total of all such Indebtedness for all such Persons taken together shall not
exceed an aggregate principal amount of $750,000 at any one time outstanding;
(ii) such Indebtedness when incurred shall not exceed the purchase price of the
asset(s) financed; and (iii) no such Indebtedness shall be refinanced for a
principal amount in excess of the aggregate of the principal balance outstanding
thereon at the time of such refinancing plus the amount of fees, costs and
expenses in connection with such refinancing;
and
42
(f) Guaranty
Obligations of the Borrower and its
Subsidiaries with respect to Indebtedness permitted under clauses (a) through
(e) of this Section
8.03.
8.04 Fundamental
Changes.
Merge,
dissolve, liquidate, consolidate with or into another Person, or Dispose of
(whether in one transaction or in a series of transactions) all or substantially
all of its assets (whether now owned or hereafter acquired) to or in favor of
any Person;
provided that, notwithstanding the foregoing provisions of this Section
8.04, (a) any
Loan Party may merge or consolidate with any other Loan Party provided that if
the Borrower is a party thereto, the Borrower shall be the continuing or
surviving corporation, (b) any Subsidiary of a Loan Party may merge or
consolidate with any Loan Party, provided that the Loan Party shall be the
continuing or surviving corporation and (c) JPT may dissolve, liquidate or wind
up its affairs at any time provided that its assets are transferred to a Loan
Party prior to giving effect to such dissolution, liquidation or wind up.
8.05 Dispositions.
Make any
Disposition unless
(a) the consideration paid in connection therewith shall be cash or Cash
Equivalents (payment to be contemporaneous with consummation of transaction) and
shall be in an amount not less than the fair market value of the Property
disposed of, (b) such transaction does not involve the sale or other disposition
of a minority equity interest in any Subsidiary, (c) such transaction does not
involve a sale or other disposition of receivables other than receivables owned
by or attributable to other Property concurrently being disposed of in a
transaction otherwise permitted under this Section
8.05, and (d)
the aggregate net book value of all of the assets sold or otherwise disposed of
by the Borrower and its Subsidiaries in all such transactions in the aggregate
shall not exceed $250,000.
8.06 Restricted
Payments.
Declare
or make, directly or indirectly, any Restricted Payment, or incur any obligation
(contingent or otherwise) to do so, except that:
(a) each
Subsidiary may make Restricted Payments (directly or indirectly) to any Loan
Party;
(b) the
Borrower and each Subsidiary may declare and make dividend payments or other
distributions payable solely in the Capital Stock of such Person;
(c) each
holder of preferred Capital Stock in Enersyst as of the Closing Date may
exchange such preferred Capital Stock for common stock in the Borrower pursuant
to the terms of the Preferred Unit Exchange Agreement; and
(d) if the
Borrower decides to carry out a reverse stock split, the Borrower may repurchase
fractional shares of its Capital Stock in any amount not to exceed $30,000 in
the aggregate during the term of this Agreement; provided, that no
Default or Event of Default exists immediately prior to or immediately after
giving effect to any such repurchase.
43
8.07 Change
in Nature of Business.
Engage in
any material line of business substantially different from those lines of
business conducted by the Borrower and its Subsidiaries on the Closing Date or
any business reasonably related or incidental thereto.
8.08 Transactions
with Affiliates and Insiders.
Enter
into or
permit to exist any transaction or series of transactions with any officer,
director or Affiliate of such Person other than (a) transfers between Loan
Parties, (b) intercompany transactions expressly permitted by Section
8.02,
Section
8.03,
Section
8.04,
Section
8.05 or
Section
8.06, (c)
reasonable compensation and reimbursement of expenses of officers and directors,
and (d) except as otherwise specifically limited in this Agreement, other
transactions which are entered into in the ordinary course of such Person's
business on terms and conditions substantially as favorable to such Person as
would be obtainable by it in a comparable arms-length transaction with a Person
other than an officer, director or Affiliate.
8.09 Burdensome
Agreements.
(a) Enter
into or permit to exist any Contractual Obligation that encumbers or restricts
the ability of any such Person to (i) pay dividends or make any other
distributions to any Loan
Party on
its Capital Stock or with respect to any other interest or participation in, or
measured by, its profits, (ii) pay any Indebtedness or other obligation owed to
any Loan
Party,
(iii) make loans or advances to any Loan
Party,
(iv) sell, lease or transfer any of its Property to any Loan
Party, or
(v) act as a
Loan Party pursuant to the Loan Documents
or any renewals, refinancings, exchanges, refundings or extension thereof,
except (in respect of any of the matters referred to in clauses (i)-(iv) above)
for (1) this Agreement and the other Loan
Documents,
(2) any
document or instrument governing Indebtedness incurred pursuant to Section
8.03(e), provided that any
such restriction contained therein relates only to the asset or assets
constructed or acquired in connection therewith, (3) any Permitted Lien or any
document or instrument governing any Permitted Lien, provided that any
such restriction contained therein relates only to the asset or assets subject
to such Permitted Lien, (4) customary restrictions and conditions contained in
any agreement relating to the sale of any Property permitted under Section
8.05 pending
the consummation of such sale or (5) customary non-assignment provisions
contained in operating leases and licenses of Property, provided that any
such provisions relates only to the Property leased or licensed.
(b) Enter
into or permit to exist any Contractual Obligation that prohibits
or otherwise restricts the existence of any Lien upon any of its Property in
favor of the Lender for the purpose of securing the Obligations, whether now
owned or hereafter acquired, or requiring the grant of any security for any
obligation if such Property is given as security for the Obligations, except (i)
any
document or instrument governing
Indebtedness incurred pursuant to Section
8.03(e), provided that any
such restriction contained therein relates only to the asset or assets
constructed or acquired in connection therewith, (ii) in connection with any
Permitted Lien or any document or instrument governing any Permitted Lien,
provided that any
such restriction contained therein relates only to the asset or assets subject
to such Permitted Lien, (iii) pursuant to customary restrictions and conditions
contained in any agreement relating to the sale of any Property permitted under
Section
8.05, pending
the consummation of such sale or (iv) customary non-assignment provisions
contained in operating leases and licenses of Property, provided that any
such provisions relates only to the Property leased or licensed.
8.10 Use of
Proceeds.
Use the
proceeds of any Credit Extension, whether directly or indirectly, and whether
immediately, incidentally or ultimately, to purchase or carry margin stock
(within the meaning of Regulation U of the FRB) or to extend credit to
others for the purpose of purchasing or carrying margin stock or to refund
indebtedness originally incurred for such purpose.
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8.11 Minimum
Consolidated EBITDA. Permit
Consolidated EBITDA of the Borrower to be less than (a) $7,000,000 for the
fiscal quarter ended December 31, 2004, (b) $4,000,000 for the fiscal quarter
ended March 31, 2005 and (c) $1,000,000 for each fiscal quarter
thereafter.
8.12 Capital
Expenditures. Make or
become legally obligated to make any Consolidated Capital Expenditures
(excluding normal replacements and maintenance which are properly charged to
current obligations), except for (a) Consolidated Capital Expenditures of the
Borrower and its Subsidiaries in the ordinary course of business not exceeding
$1,500,000 in the aggregate and (b) Consolidated Capital Expenditures of the
Borrower and its Subsidiaries related to the development of ovens for
residential use not exceeding $2,000,000 in the aggregate.
8.13 Amendments.
(a) Amend or
modify any of the terms of any Indebtedness of the Borrower or any Subsidiary if
such amendment or modification would (i) add or change any terms in a manner
that could reasonably be expected to materially and adversely affect the Lender,
or (ii) shorten the final maturity or average life to maturity or require any
payment to be made sooner than originally scheduled or increase the interest
rate applicable thereto.
(b) With
respect to any Indebtedness of the Borrower or any Subsidiary make (or give any
notice with respect thereto) any voluntary or optional principal payment or
prepayment or redemption or acquisition for value of (including without
limitation, by way of depositing money or securities with the trustee with
respect thereto before due for the purpose of paying when due), refund,
refinance or exchange of any such Indebtedness.
(c) Subway
Contract.
(i) Cancel or
terminate the Subway Contract (other than in accordance with its terms) or
consent to or accept any cancellation or termination thereof (other than in
accordance with its terms).
(ii) Amend,
modify or waive any material term or condition of the Subway Contract or take
any other action in connection with the Subway Contract that would materially
impair the value of the interest or rights of any Loan Party thereunder or that
would materially impair the interest or rights of the Lender.
8.14 Organization
Documents; Fiscal Year.
(a) Amend,
modify or change its Organization Documents in a manner adverse to the
Lender.
(b) Change
its fiscal year.
8.15 Ownership
of Subsidiaries.
Notwithstanding
any other provisions of this Credit Agreement to the contrary, the Loan Parties
will not (a) permit any Person (other than the Borrower or any Wholly Owned
Subsidiary of the Borrower) to own any Capital Stock of any Subsidiary of the
Borrower, except to the extent required by applicable Law to qualify directors
with respect to the ownership of Capital Stock of Foreign Subsidiaries, (b)
permit any Subsidiary of the Borrower to issue any shares of preferred Capital
Stock (other than the shares of preferred Capital Stock issued by Enersyst as of
the Closing Date) or (c) create, incur or suffer to exist any Lien on any
Capital Stock of any Subsidiary of the Borrower other than Permitted
Liens.
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8.16 Sale
Leasebacks.
Enter
into any Sale and Leaseback Transaction.
ARTICLE
IX
EVENTS OF
DEFAULT AND REMEDIES
9.01 Events
of Default.
Any of
the following shall constitute an Event of Default:
(a) Non-Payment. The
Borrower fails to pay (i) when and as required to be paid herein, any amount of
principal of any Loan or on any L/C Obligation, or (ii) within three Business
Days after the same becomes due, any interest on any Loan, or any commitment fee
or other fee due hereunder, or (iii) within five Business Days after the same
becomes due, any other amount payable hereunder or under any other Loan
Document; or
(b) Specific
Covenants. The
Loan Parties fail to perform or observe any term, covenant or agreement
contained in any of Section
7.05(a),
7.08,
7.10,
7.11,
7.12 or
7.14 or
Article VIII; or
(c) Other
Defaults. Any
Loan Party fails to perform or observe any other covenant or agreement (not
specified in subsection (a) or (b)) contained in any Loan Document on its part
to be performed or observed and such failure continues for thirty days after the
earlier of (i) a Responsible Officer of any Loan Party becoming aware of such
failure or (ii) notice thereof to any Loan Party by the Lender; or
(d) Representations
and Warranties. Any
representation, warranty, certification or statement of fact made or deemed made
by or on behalf of any Loan Party herein, in any other Loan Document, or in any
document delivered in connection herewith or therewith shall be incorrect or
misleading in any material respect when made or deemed made; or
(e) Cross-Default. (i) The
Borrower or any Subsidiary (A) fails to make any payment when due (whether by
scheduled maturity, required prepayment, acceleration, demand, or otherwise)
beyond the applicable grace period, if any, in respect of any Indebtedness or
Guarantee (other than Indebtedness hereunder and Indebtedness under Swap
Contracts) having an aggregate principal amount (including undrawn committed or
available amounts and including amounts owing to all creditors under any
combined or syndicated credit arrangement) of more than the Threshold Amount, or
(B) fails to observe or perform any other agreement or condition beyond the
applicable grace period, if any, relating to any such Indebtedness or Guarantee
or contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event occurs, the effect of which default or other event
is to cause, or to permit the holder or holders of such Indebtedness or the
beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf
of such holder or holders or beneficiary or beneficiaries) to cause, with the
giving of notice if required, such Indebtedness to be demanded or to become due
or to be repurchased, prepaid, defeased or redeemed (automatically or
otherwise), or an offer to repurchase, prepay, defease or redeem such
Indebtedness to be made, prior to its stated maturity, or such Guarantee to
become payable or cash collateral in respect thereof to be demanded; or (ii)
there occurs under any Swap Contract an Early Termination Date (as defined in
such Swap Contract) resulting from
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(A) any event of default
under such Swap Contract as to which the Borrower or any Subsidiary is the
Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event
(as so defined) under such Swap Contract as to which the Borrower or any
Subsidiary is an Affected Party (as so defined) and, in either event, the Swap
Termination Value owed by the Borrower or such Subsidiary as a result thereof is
greater than the Threshold Amount; or
(f) Insolvency
Proceedings, Etc. The
Borrower or any Subsidiary institutes or consents to the institution of any
proceeding under any Debtor Relief Law, or makes an assignment for the benefit
of creditors; or applies for or consents to the appointment of any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar officer
for it or for all or any material part of its property; or any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar officer is
appointed without the application or consent of such Person and the appointment
continues undischarged or unstayed for sixty calendar days; or any proceeding
under any Debtor Relief Law relating to any such Person or to all or any
material part of its property is instituted without the consent of such Person
and continues undismissed or unstayed for sixty calendar days, or an order for
relief is entered in any such proceeding; or
(g) Inability
to Pay Debts; Attachment. (i) The
Borrower or any Subsidiary becomes unable or admits in writing its inability or
fails generally to pay its debts as they become due, or (ii) any writ or warrant
of attachment or execution or similar process is issued or levied against all or
any material part of the property of any such Person and is not released,
vacated or fully bonded within thirty days after its issue or levy;
or
(h) Judgments. There
is entered against the Borrower or any Subsidiary (i) one or more final
judgments or orders for the payment of money in an aggregate amount exceeding
the Threshold Amount (to the extent not covered by independent third-party
insurance as to which the insurer does not dispute coverage), or (ii) any one or
more non-monetary final judgments that have, or could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect and, in either
case, (A) enforcement proceedings are commenced by any creditor upon such
judgment or order, or (B) there is a period of twenty consecutive days during
which a stay of enforcement of such judgment, by reason of a pending appeal or
otherwise, is not in effect; or
(i) ERISA. (i) An
ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which
has resulted or could reasonably be expected to result in liability of the
Borrower under Title IV of ERISA to the Pension Plan, Multiemployer Plan or
the PBGC in an aggregate amount in excess of the Threshold Amount, or (ii) the
Borrower or any ERISA Affiliate fails to pay when due, after the expiration of
any applicable grace period, any installment payment with respect to its
withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in
an aggregate amount in excess of the Threshold Amount; or
(j) Invalidity
of Loan Documents. Any
Loan Document, at any time after its execution and delivery and for any reason
other than as expressly permitted hereunder or satisfaction in full of all the
Obligations, ceases to be in full force and effect; or any Loan Party or any
other Person contests in any manner the validity or enforceability of any Loan
Document; or any Loan Party denies that it has any or further liability or
obligation under any Loan Document, or purports to revoke, terminate or rescind
any Loan Document; or
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(k) Change
of Control. There
occurs any Change of Control; or
(l) Subway
Contract. (i)
There shall occur a “Default” or an “Event of Default” (or any comparable terms)
under, and as defined in, the Subway Contract, or (ii) the Subway Contract is
terminated.
9.02 Remedies
Upon Event of Default.
If any
Event of Default occurs and is continuing, the Lender take any or all of the
following actions:
(a) declare
the Commitment to be terminated, whereupon the Commitment shall be terminated;
(b) declare
the unpaid principal amount of all outstanding Revolving Loans, all interest
accrued and unpaid thereon, and all other amounts owing or payable hereunder or
under any other Loan Document to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower;
(c) require
that the Borrower Cash Collateralize the L/C Obligations (in an amount equal to
the then outstanding amount thereof); and
(d) exercise
all rights and remedies available to it under the Loan Documents or applicable
law;
provided,
however, that
upon the occurrence of an actual or deemed entry of an order for relief with
respect to the Borrower under the Bankruptcy Code of the United States, the
Commitment shall automatically terminate, the unpaid principal amount of all
outstanding Revolving Loans and all interest and other amounts as aforesaid
shall automatically become due and payable and the obligation of the Borrower to
Cash Collateralize the L/C Obligations as aforesaid shall automatically become
effective, in each case without further act of the Lender.
9.03 Application
of Funds.
After the
exercise of remedies provided for in Section
9.02 (or
after the Revolving Loans have automatically become immediately due and payable
and the L/C Obligations have automatically been required to be Cash
Collateralized as set forth in the proviso to Section
9.02), any
amounts received on account of the Obligations shall be applied by the Lender in
the manner determined by the Lender in its sole discretion. Any surplus
remaining after payment in full of the Obligations shall be returned to the
Borrower or whomsoever a court of competent jurisdiction shall determine to be
entitled thereto.
48
ARTICLE
X
MISCELLANEOUS
10.01 Amendments,
Etc.
No
amendment or waiver of any provision of this Agreement or any other Loan
Document, and no consent to any departure by any Loan Party therefrom, shall be
effective unless in writing signed by the Lender and the Loan
Parties.
10.02 Notices
and Other Communications; Facsimile Copies.
(a) General. Unless
otherwise expressly provided herein, all notices and other communications
provided for hereunder shall be in writing (including by facsimile
transmission). All such written notices shall be mailed, faxed or delivered to
the applicable address, facsimile number or (subject to subsection (c) below)
electronic mail address, and all notices and other communications expressly
permitted hereunder to be given by telephone shall be made to the applicable
telephone number, specified for such Person on Schedule
10.02 or to
such other address, facsimile number, electronic mail address or telephone
number as shall be designated by such party in a notice to the other
parties.
All such
notices and other communications shall be deemed to be given or made upon the
earlier to occur of (i) actual receipt by the relevant party hereto and (ii) (A)
if delivered by hand or by courier, when signed for by or on behalf of the
relevant party hereto; (B) if delivered by mail, four Business Days after
deposit in the mails, postage prepaid; (C) the
Business Day following the day on which the same has been delivered prepaid to a
reputable national overnight air courier service; (D) if
delivered by facsimile, when sent and receipt has been confirmed by telephone;
and (E) if delivered by electronic mail (which form of delivery is subject to
the provisions of subsection (c) below), when delivered; provided,
however, that
notices and other communications to the Lender pursuant to Article
II shall
not be effective until actually received by the Lender. In no event shall a
voicemail message be effective as a notice, communication or confirmation
hereunder.
(b) Effectiveness
of Facsimile Documents and Signatures. Loan
Documents may be transmitted and/or signed by facsimile. The effectiveness of
any such documents and signatures shall, subject to applicable Law, have the
same force and effect as manually signed originals and shall be binding on all
Loan Parties and the Lender. The Lender may also require that any such documents
and signatures be confirmed by a manually signed original thereof; provided,
however, that
the failure to request or deliver the same shall not limit the effectiveness of
any facsimile document or signature.
(c) Reliance
by Lender. The
Lender shall be entitled to rely and act upon any notices (including telephonic
Loan Notices) purportedly given by or on behalf of the Borrower even if (i) such
notices were not made in a manner specified herein, were incomplete or were not
preceded or followed by any other form of notice specified herein, or (ii) the
terms thereof, as understood by the recipient, varied from any confirmation
thereof. The Borrower shall indemnify the Lender from all losses, costs,
expenses and liabilities resulting from the reliance by such Person on each
notice purportedly given by or on behalf of the Borrower. All telephonic notices
to and other communications with the Lender may be recorded by the Lender, and
each of the parties hereto hereby consents to such recording.
10.03 No
Waiver; Cumulative Remedies.
No
failure by the Lender to exercise, and no delay by the Lender in exercising, any
right, remedy, power or privilege hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
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10.04 Attorney
Costs, Expenses and Taxes.
The
Borrower agrees (a) to pay or reimburse the Lender for all reasonable
out-of-pocket costs and expenses incurred in connection with the development,
preparation, negotiation and execution of this Agreement and the other Loan
Documents and any amendment, waiver, consent or other modification of the
provisions hereof and thereof (whether or not the transactions contemplated
hereby or thereby are consummated), including all actual and reasonable
out-of-pocket fees and expenses of counsel, and (b) to pay or reimburse the
Lender for all costs and expenses incurred in connection with the enforcement,
attempted enforcement, or preservation of any rights or remedies under this
Agreement or the other Loan Documents (including all such costs and expenses
incurred during any “workout” or restructuring in respect of the Obligations and
during any legal proceeding, including any proceeding under any Debtor Relief
Law), including all actual and reasonable fees and expenses of counsel and
allocated costs of internal counsel. The foregoing costs and expenses shall
include all search, filing, recording, title insurance and appraisal charges and
fees and taxes related thereto, and other out-of-pocket expenses incurred by the
Lender and the reasonable, actual and documented cost of internal experts,
independent public accountants and other outside experts retained by the Lender.
All amounts due under this Section
10.04 shall be
payable within ten Business Days after demand therefor. The agreements in this
Section shall survive the termination of the Commitment and repayment of all the
Obligations.
10.05 Indemnification
by the Borrower.
Whether
or not the transactions contemplated hereby are consummated, the Loan Parties
agree jointly and severally to indemnify and hold harmless the Lender and the
Lender’s Affiliates, directors, officers, employees, counsel, advisors, agents
and attorneys-in-fact (collectively the “Indemnitees”) from
and against any and all liabilities, obligations, losses, damages, penalties,
claims, demands, actions, judgments, suits, costs, expenses and disbursements
(including actual and reasonable fees and expenses of counsel and allocated
costs of internal counsel) of any kind or nature whatsoever which may at any
time be imposed on, incurred by or asserted against any such Indemnitee in any
way relating to or arising out of or in connection with (a) the execution,
delivery, enforcement, performance or administration of any Loan Document or any
other agreement, letter or instrument delivered in connection with the
transactions contemplated thereby or the consummation of the transactions
contemplated thereby, (b) any of the Commitments, Loans or Letters of Credit or
the use or proposed use of the proceeds therefrom (including any refusal by the
Lender to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), (c) any actual or alleged presence or release of
Hazardous Materials on or from any property currently or formerly owned or
operated by the Borrower or any Subsidiary, or any Environmental Liability
related in any way to the Borrower or any Subsidiary, (d) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory (including
any investigation of, preparation for, or defense of any pending or threatened
claim, investigation, litigation or proceeding) and regardless of whether any
Indemnitee is a party thereto, and (e) the use by others of Information or other
materials obtained through internet or other similar information transmission
systems in connection with this Agreement and the other Loan Documents (all the
foregoing, collectively, the “Indemnified
Liabilities”);
provided that
such indemnity shall not, as to any Indemnitee, be available to the extent that
such liabilities, obligations, losses, damages, penalties, claims, demands,
actions, judgments, suits, costs, expenses or disbursements are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the bad faith, gross negligence or willful misconduct of such
Indemnitee. No Indemnitee shall have any liability for any indirect or
consequential damages relating to this Agreement or any other Loan Document or
arising out of its activities in connection herewith or therewith (whether
before or after the Closing Date). All amounts due under this Section
10.05 shall be
payable within ten Business Days after demand therefor. The agreements in this
Section shall survive the termination of the Commitment and the repayment,
satisfaction or discharge of all the Obligations.
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10.06 Payments
Set Aside.
To the
extent that any payment by or on behalf of any Loan Party is made to the Lender,
or the Lender exercises its right of set-off, and such payment or the proceeds
of such set-off or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Lender in its discretion) to be repaid to a
trustee, receiver or any other party, in connection with any proceeding under
any Debtor Relief Law or otherwise, then to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such set-off had not occurred.
10.07 Successors
and Assigns.
(a) The
provisions of this Credit Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Loan Parties may not assign or otherwise
transfer any of their rights or obligations hereunder without the prior written
consent of the Lender (and any attempted assignment or transfer by any Loan
Party without such consent shall be null and void). Nothing in this Credit
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby and, to the extent expressly contemplated hereby, the
Indemnitees) any legal or equitable right, remedy or claim under or by reason of
this Credit Agreement.
(b) The
Lender may assign all or a portion of its rights and obligations under this
Credit Agreement (including all or any portion of the Revolving Loans) provided
that, so long as no Default then exists, the Borrower shall have consented to
the assignment (such consent shall not be unreasonably withheld or delayed).
From and after the effective date of such assignment, the assignee thereunder
shall be a party hereto and, to the extent of the interest assigned by such
assignment, have the rights and obligations of the Lender under this Credit
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such assignment, be released from its obligations under
this Credit Agreement (and, in the case of an assignment covering all of the
assigning Lender’s rights and obligations under this Credit Agreement, the
assigning Lender shall cease to be a party hereto but shall continue to be
entitled to the benefits of Sections
3.04,
10.04,
10.05 and
10.12). Upon
request by the assigning Lender and/or the assignee Lender, the Borrower (at its
expense) shall execute and deliver new or replacement Revolving Notes to the
assigning Lender and the assignee Lender.
(c) Notwithstanding
anything herein to the contrary, the Lender may at any time, without the consent
of the Borrower, pledge or assign a security interest in all or any portion of
its rights under this Credit Agreement (including under the Revolving Note) to
secure obligations of the Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no
such pledge or assignment shall release the Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for the Lender as a party
hereto.
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10.08 Set-off.
In
addition to any rights and remedies of the Lender provided by law, upon the
occurrence and during the continuance of any Event of Default, the Lender and
its Affiliates are authorized at any time and from time to time, without prior
notice to any Loan Party, any such notice being waived by Loan Parties to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by,
and other indebtedness at any time owing by, the Lender to or for the credit or
the account of the respective Loan Parties against any and all Obligations owing
to the Lender hereunder or under any other Loan Document, now or hereafter
existing, irrespective of whether or not the Lender shall have made demand under
this Agreement or any other Loan Document and although such Obligations may be
contingent or unmatured or denominated in a currency different from that of the
applicable deposit or indebtedness. The Lender agrees promptly to notify the
Borrower after any such set-off and application made by the Lender; provided,
however, that
the failure to give such notice shall not affect the validity of such set-off
and application.
10.09 Interest
Rate Limitation.
Notwithstanding
anything to the contrary contained in any Loan Document, the interest paid or
agreed to be paid under the Loan Documents shall not exceed the maximum rate of
non-usurious interest permitted by applicable Law (the “Maximum
Rate”). If
the Lender shall receive interest in an amount that exceeds the Maximum Rate,
the excess interest shall be applied to the principal of the Revolving Loans or,
if it exceeds such unpaid principal, refunded to the Borrower. In determining
whether the interest contracted for, charged, or received by the Lender exceeds
the Maximum Rate, such Person may, to the extent permitted by applicable Law,
(a) characterize any payment that is not principal as an expense, fee, or
premium rather than interest, (b) exclude voluntary prepayments and the effects
thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal
parts the total amount of interest throughout the contemplated term of the
Obligations hereunder.
10.10 Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
10.11 Integration.
This
Agreement, together with the other Loan Documents, comprises the complete and
integrated agreement of the parties on the subject matter hereof and thereof and
supersedes all prior agreements, written or oral, on such subject matter. In the
event of any conflict between the provisions of this Agreement and those of any
other Loan Document, the provisions of this Agreement shall control;
provided that the
inclusion of supplemental rights or remedies in favor of the Lender in any other
Loan Document shall not be deemed a conflict with this Agreement. Each Loan
Document was drafted with the joint participation of the respective parties
thereto and shall be construed neither against nor in favor of any party, but
rather in accordance with the fair meaning thereof.
10.12 Survival
of Representations and Warranties.
All
representations and warranties made hereunder and in any other Loan Document or
other document delivered pursuant hereto or thereto or in connection herewith or
therewith shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the Lender,
regardless of any investigation made by the Lender or on its behalf and
notwithstanding that the Lender may have had notice or knowledge of any Default
at the time of any Credit Extension, and shall continue in full force and effect
as long as any Loan or any other Obligation hereunder shall remain unpaid or
unsatisfied or any Letter of Credit shall remain outstanding.
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10.13 Severability.
If any
provision of this Agreement or the other Loan Documents is held to be illegal,
invalid or unenforceable, (a) the legality, validity and enforceability of the
remaining provisions of this Agreement and the other Loan Documents shall not be
affected or impaired thereby and (b) the parties shall endeavor in good faith
negotiations to replace the illegal, invalid or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the illegal, invalid or unenforceable provisions. The invalidity of a
provision in a particular jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.14 Confidentiality.
The
Lender agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential); (b) to
the extent requested by any regulatory authority; (c) to the extent
required by applicable laws or regulations or by any subpoena or similar legal
process (the Lender agrees to provide notice of any such requirement to the
Borrower and, to the extent reasonably requested by the Borrower, cooperate with
the Borrower and its Subsidiaries if the Borrower or any of its Subsidiaries
seeks to have such Information subject to a protective order); (d) to any other
party to this Agreement; (e) in connection with the exercise of any remedies
hereunder or any suit, action or proceeding relating to this Agreement or the
enforcement of rights hereunder; (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any assignee
of or participant in, or any prospective assignee of or participant in, any of
its rights or obligations under this Agreement or (ii) any direct or indirect
contractual counterparty or prospective counterparty (or such contractual
counterparty's or prospective counterparty's professional advisor) to any credit
derivative transaction relating to obligations of the Loan Parties; (g) with the
consent of the Borrower; (h) to the extent such Information
(i) becomes publicly available other than as a result of a breach of this
Section or (ii) becomes available to the Lender on a nonconfidential basis
from a source other than the Loan Parties; or (i) to the National Association of
Insurance Commissioners or any other similar organization or any nationally
recognized rating agency that requires access to information about the Lender's
or its Affiliates' investment portfolio in connection with ratings issued with
respect to the Lender or its Affiliates. In addition, the Lender may disclose
the existence of this Agreement and information about this Agreement to market
data collectors, similar service providers to the lending industry, and service
providers to the Lender in connection with the administration and management of
this Agreement, the other Loan Documents, the Commitment, and the Credit
Extensions. For the purposes of this Section, “Information” means
all information received from any Loan Party or any Subsidiary relating to any
Loan Party or any Subsidiary or its business, other than any such information
that is available to the Lender on a nonconfidential basis prior to disclosure
by any Loan Party or any Subsidiary. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information. The Lender acknowledges
that it is aware that the Borrower is a public company with securities that are
publicly traded and that the Information includes material non-public
Information.
Without limiting the other terms and conditions of this Agreement, the Borrower
will not use, and will not cause any third party to use, any Information in any
manner in violation of any securities laws or any other applicable law,
including, without limitation, the purchase or sale of any shares of the
Borrower’s Capital Stock.
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10.15 Governing
Law.
(a) THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE
STATE OF NORTH CAROLINA APPLICABLE
TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE;
PROVIDED THAT THE
LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
MAY BE BROUGHT IN XXX XXXXXX XX XXX XXXXX XX XXXXX XXXXXXXX SITTING IN
CHARLOTTE, XXXXX XXXXXXXX XX XX XXX XXXXXX XXXXXX FOR THE WESTERN DISTRICT OF
SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH LOAN PARTY AND
THE LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH LOAN PARTY AND THE LENDER
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO.
EACH LOAN PARTY AND THE LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT
OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF
SUCH STATE.
10.16 Waiver
of Jury Trial.
EACH
PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF
ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR
IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE
PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE
TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
10.17 U.S.
Patriot Act Notice.
The
Lender hereby notifies the Borrower that pursuant to the requirements of the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the “Act”), it is
required to obtain, verify and record information that identifies the Borrower,
which information includes the name and address of the Borrower and other
information that will allow the Lender to identify the Borrower in accordance
with the Act.
[SIGNATURE
PAGES FOLLOW]
54
IN
WITNESS WHEREOF,
the
parties hereto have caused this Agreement to be duly executed as of the date
first above written.
BORROWER: |
TURBOCHEF
TECHNOLOGIES, INC., |
a
Delaware corporation | |
By:/s/
Xxxxx X. Xxxxxxx | |
Name:
Xxxxx X. Xxxxxxx | |
Title:
Senior Vice President | |
GUARANTORS: |
ENERSYST
DEVELOPMENT CENTER, L.L.C., |
a
Delaware limited liability company | |
By:
TurboChef Technologies, Inc., managing member | |
By:/s/
Xxxxx X. Xxxxxxx | |
Name: Xxxxx X. Xxxxxxx | |
Title:
Senior Vice President | |
LENDER: |
BANK
OF AMERICA, N.A. |
By:/s/
Xxxxxxx X. Xxxxxx | |
Name: Xxxxxxx X. Xxxxxx | |
Title:
Senior Vice President |
55