EXHIBIT 10.1
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of August 30, 2002
Among
SAUCONY, INC.,
as Borrower,
THE LENDERS PARTY HERETO,
as Lenders
and
STATE STREET BANK AND TRUST COMPANY,
as Agent for the Lenders
(iv)
LIBC/1546305.8
TABLE OF CONTENTS
Page
ARTICLE 1 - DEFINITIONS AND ACCOUNTING TERMS............................1
Section 1.1. Definitions..................................1
Section 1.2. Accounting Terms............................11
ARTICLE 2 - THE REVOLVING CREDITS......................................11
Section 2.1. The Revolving Credit........................11
Section 2.2. Making of Advances..........................12
Section 2.3. Interest on Advances........................13
Section 2.4. Election of LIBOR Pricing Options...........13
Section 2.5. Additional Payments.........................14
Section 2.6. Computation of Interest, Etc................14
Section 2.7. Fees........................................14
Section 2.8. Set-Off.....................................15
Section 2.9. Sharing of Payments.........................15
Section 2.10. Increased Costs, Etc........................16
Section 2.11. Changed Circumstances.......................17
Section 2.12. Use of Proceeds.............................18
Section 2.13. Letters of Credit...........................18
ARTICLE 3 - CONDITIONS TO LOANS AND ADVANCES...........................22
Section 3.1. Conditions to First Advance.................22
Section 3.2. Conditions to All Advances..................24
ARTICLE 4 - PAYMENT AND REPAYMENT......................................25
Section 4.1. Mandatory Prepayment........................25
Section 4.2. Voluntary Prepayments.......................25
Section 4.3. Payment and Interest Cutoff.................25
Section 4.4. Payment or Other Actions on Non-Business Days.....25
Section 4.5. Method and Timing of Payments.....................26
Section 4.6. Payments Not at End of Interest Period............26
Section 4.7. Currency..........................................27
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES...................................27
Section 5.1. Corporate Existence, Charter Documents, Etc.......27
Section 5.2. Principal Place of Business; Location of Records..27
Section 5.3. Qualification.....................................27
Section 5.4. Subsidiaries......................................27
Section 5.5. Corporate Power...................................27
Section 5.6. Valid and Binding Obligations.....................28
Section 5.7. Other Agreements..................................28
Section 5.8. Payment of Taxes..................................28
Section 5.9. Financial Statements..............................29
Section 5.10. Other Materials Furnished.........................29
Section 5.11. Stock .........................................29
Section 5.12. Changes in Condition..............................29
Section 5.13. Assets, Licenses, Patents, Trademarks, Etc........29
Section 5.14. Litigation........................................30
Section 5.15. Pension Plans.....................................30
Section 5.16. Outstanding Indebtedness..........................30
Section 5.17. Environmental Matters.............................31
Section 5.18. Foreign Trade Regulations.........................32
Section 5.19. Governmental Regulations..........................32
Section 5.20. Margin Stock......................................32
ARTICLE 6 - REPORTS AND INFORMATION..........................................32
Section 6.1. Quarterly Financial Statements and Reports........32
Section 6.2. Annual Financial Statements.......................33
Section 6.3. Monthly Reports...................................33
Section 6.4. Notice of Defaults................................33
Section 6.5. Additional Quarterly Reports......................33
Section 6.6. Notice of Litigation..............................33
Section 6.7. Communications with Others........................34
Section 6.8. Reportable Events.................................34
Section 6.9. Annual Pension Reports............................34
Section 6.10. Reports to other Creditors........................34
Section 6.11. Communications with Independent Public Accountants.34
Section 6.12. Environmental Reports..............................35
Section 6.13. Projections........................................35
Section 6.14. Inspection of Premises.............................35
Section 6.15. Miscellaneous......................................36
ARTICLE 7 - FINANCIAL COVENANTS...............................................36
ARTICLE 8 - AFFIRMATIVE COVENANTS.............................................36
Section 8.1. Existence and Business.............................36
Section 8.2. Taxes and Other Obligations........................36
Section 8.3. Maintenance of Properties and Leases...............36
Section 8.4. Insurance..........................................37
Section 8.5. Records, Accounts and Places of Business...........37
Section 8.6. Maintenance of Accounts............................37
Section 8.7. Consolidated Pre-Tax Net Income....................37
Section 8.8. Dissolution........................................37
ARTICLE 9 - NEGATIVE COVENANTS................................................37
Section 9.1. Restrictions on Indebtedness.......................38
Section 9.2. Restriction on Liens...............................38
Section 9.3. Investments........................................39
Section 9.4. Dispositions of Assets.............................40
Section 9.5. Assumptions, Guaranties, Etc. of Indebtedness of
Other Persons......................................40
Section 9.6. Mergers, Etc.......................................40
Section 9.7. ERISA..............................................40
Section 9.8. Distributions......................................41
Section 9.9. Sale and Leaseback.................................41
Section 9.10. Transactions with Affiliates.......................41
Section 9.11. Creation of Subsidiaries...........................41
Section 9.12. Voluntary Payment..................................41
Section 9.13. Hyde International Services, Ltd. and Saucony SP
Pty, Ltd...........................................41
ARTICLE 10 - EVENTS OF DEFAULT AND REMEDIES...................................41
Section 10.1. Events of Default..................................41
Section 10.2. Remedies 43
Section 10.3. Distribution of Proceeds...........................43
ARTICLE 11 - CONSENTS; AMENDMENTS; WAIVERS; REMEDIES..........................44
Section 11.1. Actions by Lenders.................................44
Section 11.2. Actions by Borrower................................45
ARTICLE 12 - SUCCESSORS AND ASSIGNS...........................................45
Section 12.1. General 45
Section 12.2. Assignments........................................45
Section 12.3. Participations.....................................46
ARTICLE 13 - THE AGENT........................................................47
Section 13.1. Authorization and Action...........................47
Section 13.2. Agent's Reliance, Etc..............................48
Section 13.3. Agent as a Lender..................................48
Section 13.4. Lender Credit Decision.............................48
Section 13.5. Indemnification of Agent...........................48
Section 13.6. Successor Agent....................................49
Section 13.7. Amendment of Article 13............................49
ARTICLE 14 - MISCELLANEOUS....................................................49
Section 14.1. Notices 49
Section 14.2. Merger ..........................................50
Section 14.3. Governing Law; Consent to Jurisdiction.............50
Section 14.4. Counterparts.......................................50
Section 14.5. Expenses and Indemnification.......................51
Section 14.6. Confidentiality....................................52
Section 14.7. WAIVER OF JURY TRIAL...............................52
LIST OF EXHIBITS AND SCHEDULES
Exhibit A Form of Revolving Credit Note
Exhibit B Form of Notice of Borrowing
Exhibit C Form of Certificate of Permitted Acquisition
Exhibit D Form of Compliance Certificate
Exhibit E Form of LIBOR Pricing Notice
Exhibit F Form of Opinion of Borrower's Counsel
Exhibit G Form of Opinion of Domestic Guarantors' Counsel
Exhibit H Form of Assignment and Acceptance Agreement
Exhibit I Form of Letter of Credit Request
Exhibit J Form of Borrowing Base Certificate
Schedule 1 Schedule of Commitment Percentages
Schedule 5.2 Schedule of Locations
Schedule 5.4 Schedule of Subsidiaries
Schedule 5.7 Schedule of Agreements
Schedule 5.8 Schedule of Unaudited Tax Returns
Schedule 5.9 Schedule of Financial Statements
Schedule 5.11 Schedule of Issued and Outstanding Stock
Schedule 5.13 Schedule of Licenses, Patents, Copyrights and Trademarks
Schedule 5.15 Schedule of Pension Plans
Schedule 5.16 Schedule of Indebtedness, Liens, Charges and Encumbrances
Schedule 5.17 Environmental Matters
Schedule 8.4 Schedule of Insurance
55
LIBC/1546305.8
LIBC/1546305.8
AMENDED AND RESTATED
CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of August 30,
2002 by and among SAUCONY, INC. ("Borrower"), a Massachusetts corporation, the
lenders from time to time party hereto, and STATE STREET BANK AND TRUST COMPANY
(the "Agent"), as agent for the lenders from time to time party hereto.
RECITALS
WHEREAS, pursuant to a Revolving Credit Agreement dated as of August 31,
1998 (the "Original Credit Agreement") between the Borrower and the Agent, the
Agent, as lender, made loans to the Borrower for the purposes described
therein;.........
WHEREAS, the Borrower has requested to amend and restate the Original
Credit Agreement.
WHEREAS, on the basis of the terms and conditions specified in this
Agreement, the Agent and the Lenders are willing to amend and restate the
Original Credit Agreement and make the loan arrangements described herein.
NOW, THEREFORE, the Borrower, the Lenders and the Agent hereby agree that
the Original Credit Agreement is hereby amended and restated in its entirety and
shall remain in full force and effect only as expressly set forth herein.
ARTICLE 1 - DEFINITIONS AND ACCOUNTING TERMS
Section 1.1. Definitions. In addition to the terms defined elsewhere in this
Agreement, unless otherwise specifically provided herein, the following
terms shall have the following meanings for all purposes when used in this
Agreement, and, unless otherwise specified therein, when used in any note,
agreement, certificate, report or other document made or delivered in
connection with this Agreement:
"Advance or Advances" shall mean any loan or advance, including Letter of Credit
Outstandings, from any Lender to the Borrower under the Revolving Credit
Facility pursuant to Section 2.1 of this Agreement.
"Additional Guarantor" shall have the meaning set forth in Section 9.11 hereof.
"Affiliate" shall mean (a) any director or officer of the Borrower and (b) any
Person that controls, is controlled by or is under common control with the
Borrower. For purposes of this definition, "control" of a Person shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of its management or policies, whether through the ownership of
voting securities, by contract or otherwise.
"Agent" shall mean State Street Bank and Trust Company, in its capacity as agent
for the Lenders, and its successors in that capacity.
"Agreement" shall mean this Amended and Restated Credit Agreement, as amended or
supplemented from time to time. References to Articles, Sections, Exhibits,
Schedules and the like refer to the Articles, Sections, Exhibits, Schedules
and the like of this Agreement unless otherwise indicated, as amended and
supplemented from time to time.
"Applicable Prime Rate" shall mean the Prime Rate as is in effect from time to
time less the Prime Rate Margin.
"Applicable LIBOR Rate" shall mean the sum of (i) the LIBOR Rate plus (ii) the
LIBOR Rate Margin.
"Assignment and Acceptance Agreement" shall have the meaning set forth in
Section 12.2(a) hereof.
"Borrower" shall mean Saucony, Inc., a Massachusetts corporation.
"Borrowing Base Certificate" shall mean a certificate in the form of Exhibit J
hereto and executed by the chief executive officer or chief financial
officer of the Borrower.
"Business Day" shall mean (i) for all purposes other than as covered by clause
(ii) below, any day other than a Saturday, Sunday or legal holiday on which
banks in Boston, Massachusetts are open for the conduct of a substantial
part of their commercial banking business, and (ii) with respect to all
notices and determinations in connection with, and payments of principal
and interest on, LIBOR Rate Loans any day that is a Business Day described
in clause (i) and that is also a day for trading by and between banks in
U.S. Dollar deposits in the London interbank Eurodollar market.
"Capitalized Lease" shall mean any lease which is or should be capitalized on
the balance sheet of the lessee in accordance with generally accepted
accounting principles and Statement of Financial Accounting Standards No.
13.
"Capitalized Lease Obligations" shall mean the amount of the liability
reflecting the aggregate discounted amount of future payments under all
Capitalized Leases calculated in accordance with generally accepted
accounting principles and Statement of Financial Accounting Standards No.
13.
"Closing Date" shall mean the date on which all of the conditions set forth in
Section 3.1 have been satisfied.
"Commitment Amount" shall mean each Lender's Commitment Percentage multiplied by
the Maximum Credit Amount.
"Commitment Percentage" shall mean as to each Lender its percentage interest in
the Maximum Credit Amount as set forth on Schedule 1 hereto.
"Compliance Certificate" shall mean a certificate in the form of Exhibit D
hereto and executed by the chief executive officer or chief financial
officer of the Borrower.
"Consolidated" and "Consolidating," and "consolidated" and "consolidating" when
used with reference to any term, mean that term (or the terms "combined"
and "combining", as the case may be, in the case of partnerships, joint
ventures and Affiliates that are not Subsidiaries) as applied to the
accounts of the Borrower (or other specified Person) and all of its
Subsidiaries (or other specified Persons), or such of its Subsidiaries as
may be specified, consolidated (or combined) in accordance with generally
accepted accounting principles and with appropriate deductions for minority
interests in Subsidiaries, as required by generally accepted accounting
principles.
"Consolidated Current Liabilities" shall mean, at any date as of which the
amount thereof shall be determined, all liabilities of the Borrower and its
Subsidiaries which should properly be classified as current in accordance
with generally accepted accounting principles consistently applied,
including, without limitation, all fixed prepayments of, and sinking fund
payments with respect to, Indebtedness and all estimated taxes of the
Borrower and its Subsidiaries required to be made within one year from the
date of determination, including all Indebtedness of the Borrower hereunder
required to be paid within one year from the date of determination.
"Consolidated Pre-Tax Net Income" shall mean the net income (or deficit) from
operations of the Borrower and its Subsidiaries, before taxes, determined
in accordance with generally accepted accounting principles consistently
applied.
"Credit Termination Date" shall mean August __, 2004.
"Credit Participants" shall have the meaning set forth in Section 12.3 hereof.
"Default" shall mean an Event of Default or an event or condition which with the
passage of time or giving of notice, or both, would become such an Event of
Default.
"Default Rate" shall mean the interest rate otherwise in effect plus four
percent (4%) effective immediately in the event of an Event of Default.
"Distribution" shall mean as to any Person: (a) the declaration or payment of
any dividend on or in respect of any shares of any class of capital stock
of such Person, other than dividends payable solely in shares of common
stock of such Person, (b) the purchase, redemption, or other acquisition or
retirement of any shares of any class of capital stock of such Person
directly or indirectly, (c) any other distribution on or in respect of any
shares of any class of capital stock of such Person, (d) any setting apart
or allocating any sum for the payment of any dividend or distribution, or
for the purchase, redemption or retirement of any shares of capital stock
of such Person and (e) any payment of, principal of, interest on, or fees
or any other amounts with respect to Subordinated Indebtedness.
"Eligible Assignee" shall mean any entity which has a Fitch IBCA long-term
rating of not less than BBB+ and is (i) a commercial bank or finance
company organized under the laws of the United States, or any State thereof
or the District of Columbia, (ii) a commercial bank organized under the
laws of any other country which is a member of the Organization for
Economic Cooperation and Development (the "OECD"), or a political
subdivision of any such country, provided that such bank is acting through
a branch or agency located in the United States, or (iii) the central bank
of any country which is a member of the OECD.
"Eligible Receivables" shall mean and include, each Receivable of Borrower
arising in the ordinary course of Borrower's business and which Agent, in
its sole credit judgment, shall deem to be an Eligible Receivable, based on
such considerations as Agent may from time to time deem appropriate. A
Receivable shall not be deemed eligible unless such Receivable is not
subject to any lien or encumbrance (other than liens in favor of the Agent
for the benefit of the Lenders), and is evidenced by an invoice or other
documentary evidence satisfactory to Agent. In addition, no Receivable
shall be an Eligible Receivable if:
(a) it arises out of a sale made by any Borrower to an Affiliate of the
Borrower or to a Person controlled by an Affiliate of the Borrower;
(b) it is due or unpaid more than sixty-one (61) days after the original due
date;
(c) seventy-five percent (75%) or more of the Receivables from such Customer
are not deemed Eligible Receivables hereunder. Such percentage may, in
Agent's sole discretion, be increased or decreased from time to time;
(d) any covenant, representation or warranty contained in this Agreement or any
other Lender Agreement with respect to such Receivable has been breached;
(e) the Customer shall (i) apply for, suffer, or consent to the appointment of,
or the taking of possession by, a receiver, custodian, trustee or
liquidator of itself or of all or a substantial part of its property or
call a meeting of its creditors, (ii) admit in writing its inability, or be
generally unable, to pay its debts as they become due or cease operations
of its present business or related businesses, (iii) make a general
assignment for the benefit of creditors, (iv) commence a voluntary case
under any state or federal bankruptcy laws (as now or hereafter in effect),
(v) be adjudicated a bankrupt or insolvent, (vi) file a petition seeking to
take advantage of any other law providing for the relief of debtors, (vii)
acquiesce to, or fail to have dismissed any petition which is filed against
it in any involuntary case under such bankruptcy laws, or (viii) take any
action for the purpose of effecting any of the foregoing;
(f) the sale is to a Customer outside the continental United States of America,
unless the sale is on letter of credit, guaranty or acceptance terms, in
each case acceptable to Agent in its sole discretion;
(g) the sale to the Customer is on a xxxx-and-hold, guaranteed sale,
sale-and-return, sale on approval, consignment or any other similar
repurchase or return basis or is evidenced by chattel paper;
(h) Agent believes, in its sole judgment, that collection of such Receivable is
insecure or that such Receivable may not be paid by reason of the
Customer's financial inability to pay;
(i) Such Receivables are from any Customer which is the United States of
America, any state within the United States of America or any department,
agency or instrumentality of any of them (collectively, the "Government
Customers"), where the aggregate of otherwise Eligible Receivables from all
such Government Customers is greater than ten percent (10%) of all Eligible
Receivables (including such otherwise Eligible Receivables from such
Government Customers) at any one time, but only to the extent in excess of
ten percent (10%) of such Receivables, unless Borrower assigns its right to
payment of such Receivables to Agent pursuant to the Assignment of Claims
Act of 1940, as amended (31 U.S.C. Sub-Section 3727 et seq. and 41 U.S.C.
Sub-Section 15 et seq.) or has otherwise complied with other applicable
statutes or ordinances;
(j) the goods giving rise to such Receivable have not been shipped to the
Customer or the services giving rise to such Receivable have not been
performed by Borrower or the Receivable otherwise does not represent a
final sale;
(k) if the Receivable is owing from a Customer that is also a creditor or
supplier of the Borrower, the portion of such Receivable equal to the
amount of any offset, deduction, defense, dispute, or counterclaim, or the
Receivable is contingent in any respect or for any reason;
(l) the Borrower has made any agreement with any Customer for any deduction
therefrom, except for discounts or allowances made in the ordinary course
of business for prompt payment, all of which discounts or allowances are
(i) cooperative advertising discounts not reflected on the face value of
each respective invoice or (ii) discounts and allowances reflected in the
calculation of the face value of each respective invoice related thereto;
(m) any return, rejection or repossession of the merchandise has occurred or
the rendition of services has been disputed, but only to the extent of such
return, rejection or repossession or disputed amount;
(n) such Receivable is not payable to Borrower;
(o) all Receivables from any Customer where the aggregate of otherwise Eligible
Receivables from such Customer is greater than twenty percent (20%) of all
Eligible Receivables (including such otherwise Eligible Receivables from
such Customer) at any one time, but only to the extent in excess of twenty
percent (20%) of such Receivables;
(p) such Receivable originates from Hind and Spot-Bilt accounts/customers; or
(q) such Receivable is not otherwise satisfactory to Agent as determined in
good faith by Agent in the exercise of its discretion in a reasonable
manner.
"Eligible Finished Goods Inventory" means inventory consisting of finished
products owned by the Borrower held for the purpose of sale by the Borrower
in the ordinary course of business, valued on a first in, first out basis
and located at the domestic facilities of the Borrower, excluding samples,
international inventory, in-transit inventory and retail or consigned
inventory.
"Environmental Law" means any applicable judgment, decree, order, law, license,
rule or regulation pertaining to environmental matters, or any federal,
state, county or local statute, regulation, ordinance, order or decree
relating to public health, welfare, the environment, or to the storage,
handling, use or generation of hazardous substances in or at the workplace,
worker health or safety, whether now existing or hereafter enacted.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Event of Default" shall have the meaning set forth in Section 10.1 hereof.
"Facility Fee" shall have the meaning set forth in Section 2.7(a) hereof.
"Generally accepted accounting principles" shall mean generally accepted
accounting principles as defined by controlling pronouncements of the
Financial Accounting Standards Board, as from time to time supplemented and
amended.
"Guarantor" and "Guarantors" shall mean (a) Saucony UK, Inc., (b) Saucony Sports
BV, (c) Saucony Factory Outlet Stores of Florida, Inc., (d) Saucony
Deutschland Vcrtribs GmbH, (e) Hyde, Inc., (f) Saucony Asia Pacific, Ltd.
and (g) any other entity that guaranties all of the Lender Obligations.
"Guaranty Agreements" shall mean collectively the Guaranty (Unlimited) from each
Guarantor in favor of Agent and the Lenders dated as of even date herewith,
in form and substance satisfactory to Agent and the Lenders.
"Guaranty" or "Guarantee" or "Guaranties" shall include any arrangement whereby
a Person is or becomes liable in respect of any Indebtedness or other
obligation of another and any other arrangement whereby credit is extended
to another obligor on the basis of any promise of a guarantor, whether that
promise is expressed in terms of an obligation to pay the Indebtedness of
such obligor, or to purchase or lease assets under circumstances that would
enable such obligor to discharge one or more of its obligations, or to
maintain the capital, the working capital, solvency or general financial
condition of such obligor, whether or not such arrangement is listed in the
balance sheet of the guarantor or referred to in a footnote thereto.
"Indebtedness" shall mean, as to any Person, all obligations, contingent and
otherwise, which in accordance with generally accepted accounting
principles consistently applied should be classified upon such Person's
balance sheet as liabilities, but in any event including liabilities
secured by any mortgage, pledge, security interest, lien, charge or other
encumbrance existing on property owned or acquired by such Person whether
or not the liability secured thereby shall have been assumed, letters of
credit open for account, obligations under acceptance facilities,
Capitalized Lease Obligations and all obligations on account of Guaranties,
endorsements and any other contingent obligations in respect of the
Indebtedness of others whether or not reflected on such balance sheet or in
a footnote thereto.
"Interest Period" shall mean with respect to each LIBOR Rate Loan, the period
commencing on the date of such LIBOR Rate Loan and ending one, two, three,
four or six months or one year (if available) thereafter, as the Borrower
may request as provided in Section 2.4 hereof, provided, that:
(a) any Interest Period (other than an Interest Period determined pursuant
to clause (c) below) that would otherwise end on a day that is not a Business
Day shall be extended to the next succeeding Business Day unless such Business
Day falls in the next 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, subject to clause (c)
below, end on the last Business Day of a calendar month;
(c) any Interest Period in connection with an Advance that would otherwise
end after the Credit Termination Date shall end on the Credit Termination Date;
and
(d) notwithstanding clause (c) above, no Interest Period shall have a
duration of less than one month, and if any Interest Period applicable to any
LIBOR Rate Loan would be for a shorter period, such Interest Period shall not be
available hereunder.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986 as amended
from time to time.
"Investment" shall mean (a) any stock, evidence of Indebtedness or other
security of another Person, (b) any loan, advance, contribution to capital,
extension of credit (except for current trade and customer accounts
receivable for inventory sold or services rendered in the ordinary course
of business and payable in accordance with customary trade terms) to
another Person, and (c) any purchase of (i) stock or other securities of
another Person or (ii) any business or undertaking of another Person
(whether by purchase of assets or securities), any commitment or option to
make any such purchase if, in the case of an option, the aggregate
consideration paid for such option was in excess of $100, or (d) any other
investment, in all cases whether existing on the date of this Agreement or
thereafter made.
"Issuing Lender" shall mean a Lender issuing to Borrower a letter of credit
pursuant to Section 2.14 hereof.
"L/C Supportable Obligations" shall have the meaning set forth in Section 2.14
hereof.
"Lender Agreements" shall mean this Agreement, the LMCS Agreement, the Notes,
the Guaranty Agreements, the Open Account Trader Agreement and any other
present or future agreement from time to time entered into between the
Borrower or any Subsidiary and the Agent or the Lenders, each as from time
to time amended or supplemented, and all statements, reports and
certificates delivered by the Borrower to the Agent or the Lenders in
connection therewith.
"Lender Obligations" shall mean all present and future obligations and
Indebtedness of the Borrower or any Subsidiary owing to the Agent or the
Lenders under this Agreement or any other Lender Agreement, including,
without limitation, the obligations to pay the Indebtedness from time to
time evidenced by the Notes, and obligations to pay interest, commitment
fees, balance deficiency fees, charges, expenses and indemnification from
time to time owed under any Lender Agreement.
"Lenders" shall mean (i) initially, each Lender listed on the signature pages
hereof, (ii) any other Person who becomes a Successor Lender hereunder in
accordance with the terms of Section 12.2 hereof, and (iii) their
respective successors and their assigns.
"Letter of Credit Limit" shall mean $5,000,000.
"Letter of Credit Outstandings" shall mean, at any time, the sum of, without
duplication, (i) the aggregate Stated Amount of all Letter of Credit
Outstandings and (ii) the aggregate amount of all Unpaid Drawings in
respect of all Letters of Credit.
"Letter of Credit Request" shall mean a request by Borrower to an Issuing Lender
substantially in the form of Exhibit H hereto.
"LIBOR Pricing Option" shall mean the option granted to the Borrower pursuant to
Section 2.4 hereof to have interest on all or a portion of the Loans
computed on the basis of the Applicable LIBOR Rate for an applicable
Interest Period.
"LIBOR Rate" shall mean for any Interest Period for any LIBOR Rate Loan, the
quotient of (i) the rate of interest determined by the Agent, at about
10:00 a.m. (Boston time) on the LIBOR Rate Fixing Day as being the rate at
which deposits in U.S. dollars are offered to it by first-class banks in
the London interbank market for deposit for such Interest Period in amounts
comparable to the aggregate principal amount of LIBOR Rate Loans to which
such Interest Period relates, divided by (ii) the difference between one
(1) minus the Reserve Requirement (expressed as a decimal) applicable to
that Interest Period. The LIBOR Rate shall be adjusted automatically as of
the effective date of any change in the Reserve Requirement.
"LIBOR Rate Fixing Day" shall mean, in the case of any LIBOR Rate Loan, the
second Business Day preceding the Business Day on which an Interest Period
begins.
"LIBOR Rate Loan" shall mean any Loan hereunder upon which interest will accrue
on the basis of a formula including as a component thereof the LIBOR Rate.
The expiration date of any LIBOR Rate Loan shall be the last day of the
Interest Period applicable to such LIBOR Rate Loan.
"LIBOR Rate Margin" shall mean a rate per annum equal to one and one half
percent (1 1/2%).
"LMCSAgreement" shall mean an agreement entered into between the Agent and the
Borrower governing the cash management of the Borrower on terms
satisfactory to the Agent and Borrower.
"Loan" shall mean all or a portion of the Advances outstanding hereunder or made
to the Borrower by the Lenders pursuant to Article 2 of this Agreement, and
"Loans" means all of such loans, collectively.
"Material Adverse Effect" shall mean a material adverse effect on the business,
properties, prospects, assets or condition, financial or otherwise, of the
Borrower and its Subsidiaries on a consolidated basis.
"Maximum Credit Amount" shall mean as of any date of determination, the lesser
of (a) $15,000,000 or (b) the amount to which the Maximum Credit Amount may
have been reduced pursuant to Section 2.1(c) hereof; provided that if the
obligations of the Lenders to make further Advances is terminated upon the
occurrence of a Default, the Maximum Credit Amount as of any date of
determination thereafter shall be deemed to be $0.
"2001Financial Statements" shall mean the audited financial statements of the
Borrower and its Subsidiaries as of January 4, 2002.
"Noteor Notes" shall mean the Note or Notes issued by the Borrower to each
Lender in accordance with the provisions of Section 2.1(a) hereof.
"Notice of Borrowing" shall have the meaning set forth in Section 2.2(a).
"OpenAccount Trader Agreement" means the documentary purchase order agreement
dated on or about the date hereof between State Street Bank and Trust
Company and the Borrower.
"Pension Plan" shall mean an employee benefit plan or other plan maintained for
the employees of the Borrower or any Subsidiary as described in Section
4021(a) of ERISA.
"Permitted Acquisition Advance or Advances" shall mean any loan or advance from
any Lender to the Borrower for Permitted Acquisitions.
"Permitted Acquisitions" shall mean the acquisition of all or substantially all
of the assets, shares, partnership or other ownership interests of a Person
by the Borrower, provided that (a) any such Person must be in a
substantially similar or related line of business as the Borrower, (b) the
ratio of total consideration paid for such property to the fair market
value of such property must be comparable to recent industry transactions,
(c) immediately subsequent to the acquisition, the Borrower must be in
compliance with all terms of the Lender Agreements, (d) the aggregate
purchase price of all Permitted Acquisitions shall not exceed $5,000,000,
(e) the Borrower shall not assume any Indebtedness in connection with such
acquisition other than Capitalized Leases of such Person entered into prior
to the date of acquisition, and (f) the Person to be acquired shall be free
from all liens and encumbrances as of the date of such acquisition other
than liens permitted under Section 9.2(b) hereof.
"Person" shall mean an individual, corporation, partnership, joint venture,
association, estate, joint stock company, trust, organization, business, or
a government or agency or political subdivision thereof.
"Pricing Notice" shall have the meaning set forth in Section 2.4 hereof.
"Prime Rate" shall mean the greater of (i) the rate of interest announced from
time to time by the Agent at its head office located at 000 Xxxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx as its "Prime Rate" and (ii) the Federal
Funds Effective Rate plus 1/2 of 1% per annum (rounded upwards, if
necessary, to the next 1/8 of 1%).
"Prime Rate Loan" shall mean any Advance on the Loan bearing interest at a
fluctuating rate determined by reference to the Applicable Prime Rate.
"Prime Rate Margin" shall mean a rate per annum equal to one percent (1%).
"Receivable" shall have the meaning set forth in Article 9 of the UCC.
"Reportable Event" shall mean an event reportable to the Pension Benefit
Guaranty Corporation under Section 4043 of Title IV of ERISA.
"Required Lenders" shall mean, at any time, the Lenders having made not less
than 66.7% of the outstanding principal amount of the Loans and the unused
Commitment Amounts of the Lenders hereunder.
"Reserve Requirement" shall mean the maximum aggregate reserve requirement
(including all basic, supplemental, marginal and other reserves) which is
imposed under Regulation D on the Lenders against "Euro-currency
Liabilities" as defined in said Regulation D.
"Revolving Credit Facility" shall have the meaning set forth in Section 2.1.
"Solvent" shall mean, as to any Person, such Person (i) owns property whose fair
saleable value is greater than the amount required to pay all of such
Person's Indebtedness (including contingent debts, which 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) and (iii) has capital sufficient to
carry on its business and transactions and all business and transactions in
which it is about to engage.
"Stated Amount" of each Letter of Credit shall mean the maximum available to be
drawn thereunder (regardless of whether any conditions for drawing could
then be met).
"Subordinated Indebtedness" shall mean Indebtedness of the Borrower which is
subordinated to (i) the Indebtedness of the Borrower hereunder, (ii) the
Notes and (iii) to all other Lender Obligations, on terms and conditions
approved in writing by the Agent.
"Subsidiary" shall mean any Person of which the Borrower or other specified
parent shall now or hereafter at the time own, directly or indirectly
through one or more Subsidiaries or otherwise, sufficient voting stock (or
other beneficial interest) to entitle it to elect at least a majority of
the board of directors or trustees or similar managing body.
"Subsidiary Guarantor" shall mean any Subsidiary that is also a Guarantor.
"UCC"shall mean the Massachusetts Uniform Commercial Code, Massachusetts
General Laws c. 106, as amended from time to time.
"Unpaid Drawings" shall have the meaning set forth in Section 2.14(d).
Section 1.2. Accounting Terms. All accounting terms used and not defined in this
Agreement shall be construed in accordance with generally accepted
accounting principles consistently applied, and all financial data required
to be delivered hereunder shall be prepared in accordance with such
principles.
ARTICLE 2 - THE REVOLVING CREDITS
Section 2.1. The Revolving Credit.
(a) Subject to the terms and conditions of this Agreement and so long as there
exists no Default, at any time prior to the Credit Termination Date, each
Lender, severally and not jointly, shall make such Advances to the Borrower
as the Borrower may from time to time request, by notice to the Agent in
accordance with Section 2.2(a), in an aggregate amount (i) if all
outstanding Advances (excluding Letter of Credit Outstandings) is less than
$1,500,000, (A) as to each Lender, not to exceed at any time such Lender's
Commitment Percentage of the Maximum Credit Amount, and (B) as to all
Lenders, not to exceed the Maximum Credit Amount or (ii) if all outstanding
Advances (excluding Letter of Credit Outstandings) equal or exceed
$1,500,000, (A) as to each Lender, not to exceed at any time such Lender's
Commitment Percentage of the lesser of (1) the Maximum Credit Amount and
(2) 65% of Eligible Receivables, plus 20% of Eligible Finished Goods
Inventory and (B) as to all Lenders, not to exceed the lesser of (1) the
Maximum Credit Amount, and (2) 65% of Eligible Receivables plus 20% of
Eligible Finished Goods Inventory (the "Revolving Credit Facility"). The
outstanding principal amount of the Advances, together with all accrued
interest and other fees and charges related thereto, shall be repaid in
full on the Credit Termination Date. On the Closing Date the Borrower shall
execute and deliver to each Lender a Note to evidence the Advances from
time to time made by such Lender to the Borrower hereunder. Upon receipt of
an affidavit of an officer of any Lender as to the loss, theft, destruction
or mutilation of a Note and, in the case of any such loss, theft,
destruction or mutilation, upon execution by such Lender and the Borrower
of an agreement upon terms reasonably satisfactory to such Lender and the
Borrower indemnifying the Borrower against any loss incurred by the
Borrower in connection with such loss, theft, destruction or mutilation and
upon cancellation of such Note, Borrower will issue, in lieu thereof, a
replacement Note in the same principal amount thereof and otherwise of like
tenor.
(b) Subject to the foregoing limitations and the provisions of Section 4.2, the
Borrower shall have the right to make prepayments reducing the outstanding
balance of Advances and to request further Advances, all in accordance with
Section 2.2, without other restrictions hereunder; provided that the
Lenders shall have the absolute right to refuse to make any Advances for so
long as there exists any Default or any other condition which would
constitute a Default upon the making of such an Advance.
(c) The Borrower may at any time and from time to time, upon not less than ten
(10) Business Days' written notice to the Agent, elect to permanently
reduce the Maximum Credit Amount without premium or penalty in whole or in
part, provided that any partial reductions shall be in a minimum amount of
$500,000 and in integral multiples thereof, and provided, further, that any
amounts so terminated may not be reinstated. In connection with any such
reduction, the Borrower shall pay to the Agent, for the ratable accounts of
the Lenders, the principal amount of any outstanding Advances to the extent
required to reduce the aggregate outstanding principal balance thereof to
no more than (i) the Maximum Credit Amount as so reduced, if all
outstanding Advances (excluding Letter of Credit Outstandings) are less
than $1,500,000 or (ii) the lesser of (a) the Maximum Credit Amount as so
reduced and (b) 65% of Eligible Receivables plus 20% of Eligible Finished
Goods Inventory, if all outstanding Advances (excluding Letter of Credit
Outstandings) equal or exceed $1,500,000, together with all accrued but
unpaid interest on such prepaid amounts to the date of prepayment, and all
other amounts payable with respect to such prepaid amounts, if any.
Section 2.2. Making of Advances.
(a) Except as otherwise provided for in the LMCS Agreement, each Advance other
than a Letter of Credit Request which shall be submitted in accordance with
the provisions of Section 2.14 hereof, shall be made on notice given by the
Borrower to the Agent not later than 12:00 noon (Boston time) one Business
Day prior to the date of the proposed Borrowing (a "Notice of Borrowing")
substantially in the form of Exhibit B hereto; provided, however, that (i)
if the Borrower elects a LIBOR Rate Pricing Option with respect to any
Advance in accordance with Section 2.4 hereof, such Notice of Borrowing
shall be given by the Borrower contemporaneously with a Pricing Notice in
the manner and within the time specified in Section 2.4, and (ii) if such
Advance is a Permitted Acquisition Advance, such Notice of Borrowing shall
be given by the Borrower contemporaneously with a Certificate of Permitted
Acquisition substantially in the form of Exhibit C hereto. The Agent shall
give the Lenders notice of each Notice of Borrowing in accordance with the
Agent's customary practice. Each such Notice of Borrowing shall be by
telephone or telecopy, in each case confirmed immediately in writing by the
Borrower in substantially the form of Exhibit B hereto, specifying therein
(i) the requested date of such Advance, and (ii) the amount of such Advance
(which must be a minimum of $50,000). The Borrower agrees to indemnify and
hold the Lenders harmless for any action, including the making of any
Advances hereunder, or loss or expense, taken or incurred by the Agent and
the Lenders in good faith reliance upon such telephone request. At the time
of the initial request for an Advance made under this Section 2.2(a), the
Borrower shall have provided the Agent with a Compliance Certificate. The
Borrower hereby agrees (i) that the Lenders shall be entitled to rely upon
the Compliance Certificate most recently delivered to the Agent until it is
superseded by a more recent Compliance Certificate, and (ii) that each
request for an Advance, whether by telephone or in writing or otherwise,
shall constitute a confirmation of the representations and warranties
(except as to representations and warranties made as of a certain date,
which shall be true and correct only as of such date) contained in the most
recent Compliance Certificate then in the Agent's possession.
(b) Subject to the terms and conditions of this Agreement, each Lender shall
make available on or before 2:00 p.m. on the date of each proposed Advance,
to the Agent at the Agent's address and in immediately available funds,
such Lender's Commitment Percentage of such Advance. After the Agent's
receipt of such funds and upon fulfillment of the applicable conditions set
forth in Article 3, the Agent will credit such funds to the Borrower's
account on the date of the proposed Advance.
(c) Unless the Agent shall have received notice from a Lender prior to the date
of any Advance that such Lender will not make available to the Agent such
Lender's Commitment Percentage of such Advance, the Agent may assume that
such Lender has made such amount available to the Agent on the date of such
Advance in accordance with and as provided in this Section 2.2 and the
Agent may, in reliance upon such assumption, make available on such date a
corresponding amount to the Borrower. If and to the extent such Lender
shall not have so made its Commitment Percentage of such Advance available
to the Agent and the Agent shall have made available such corresponding
amount to the Borrower, such Lender agrees to pay to the Agent forthwith on
demand, and the Borrower agrees to repay to the Agent within two Business
Days after demand (but only after demand for payment has first been made to
such Lender and such Lender has failed to make such payment), an amount
equal to such corresponding amount together with interest thereon for each
day from the date the Agent shall make such amount available to the
Borrower until the date such amount is paid or repaid to the Agent, at an
interest rate equal to the interest rate applicable at the time to such
Advances. If such Lender shall pay to the Agent such corresponding amount,
such amount so paid shall constitute such Lender's Advance for purposes of
this Agreement. If the Borrower makes a repayment required by the foregoing
provisions of this Section 2.2(c) and thereafter the applicable Lender or
Lenders make the payments to the Agent required by this Section 2.2(c), the
Agent shall promptly refund the amount of the Borrower's payment.
(d) The failure of any Lender to make the Advance to be made by it on any date
shall not relieve any other Lender of its obligation, if any, hereunder to
make its Advance on such date, but no Lender shall be responsible for the
failure of any other Lender to make the Advance to be made by such other
Lender.
Section 2.3. Interest on Advances.
(a) Subject to the terms of Section 2.4 relating to LIBOR Pricing Options, the
Borrower shall pay interest on the unpaid balance of the Advances from time
to time outstanding at a per annum rate equal to the Applicable Prime Rate.
Interest on the Advances shall be payable monthly in arrears on the first
day of the month commencing September 1, 2002, and continuing until all of
the Indebtedness of the Borrower to the Lenders under the Notes shall have
been paid in full.
Section 2.4. Election of LIBOR Pricing Options.
(a) Subject to all the terms and conditions hereof and so long as there exists
no Default, the Borrower may, by delivering a pricing notice (the "Pricing
Notice") to the Agent received at or before 10:00 a.m. Boston time on the
date two Business Days prior to the commencement of the Interest Period
selected in such Pricing Notice, elect to have all or a portion of the
outstanding Advances, as the Borrower may specify in such Pricing Notice,
accrue and bear daily interest during the Interest Period so selected at a
per annum rate equal to the Applicable LIBOR Rate for such Interest Period;
provided, however, that any such election made with respect to the Advances
shall be in an amount not less than $500,000 and in increments of $500,000;
and provided further that no such election will be made if it would result
in there being more than four (4) LIBOR Pricing Options in the aggregate
outstanding at any one time. Interest on Loans bearing interest at the
Applicable LIBOR Rate shall be paid for the applicable Interest Period on
the last day thereof and when such Loan is due (whether at maturity, by
reason of acceleration or otherwise).
(b) Each Pricing Notice shall be substantially in the form of Exhibit E
attached hereto and shall specify: (i) the selection of a LIBOR Pricing
Option; (ii) the effective date and amount of Advances or a portion thereof
subject to such LIBOR Pricing Option, subject to the limitations set forth
herein; and (iii) the duration of the applicable Interest Period. Each
Pricing Notice shall be irrevocable.
(c) The Agent will promptly inform each Lender of a Pricing Notice and the
Interest Period specified by the Borrower therein. Upon determination by
the Agent of the Applicable LIBOR Rate for any Interest Period selected by
the Borrower, the Agent will promptly inform the Borrower and each Lender
of such Applicable LIBOR Rate so determined or, if applicable, the reason
why the Borrower's election will not become effective.
Section 2.5. Additional Payments.
(a) During the continuance of any Default, the Borrower shall, on demand, pay
to the Agent for the account of the Lenders interest on the unpaid
principal balance of the Advances and, to the extent permitted by law, on
any overdue installments of interest, at a rate per annum equal to the
lesser of (i) the stated interest rate(s) applicable thereto plus 4% per
annum, and (ii) the maximum rate of interest permitted to be charged under
applicable law.
(b) In addition to any amounts payable under Section 2.5(a) above, if any
payment of principal or interest due hereunder is not made within the later
of (i) ten (10) days of its due date and (ii) five (5) days after notice
thereof has been given to the Borrower by the Agent, the Borrower will pay
to the Agent, for the ratable account of the Lenders, a late payment charge
equal to 5% of the amount of such payment; provided, however, that the
provisions of this Section 2.5(b) shall not limit the Agent's and the
Lenders' rights to exercise any of their rights or remedies, including
those provided in Section 10.2, if an Event of Default has occurred.
Section 2.6. Computation of Interest, Etc. Interest hereunder and under the
Advances shall be computed on the basis of a 360-day year for the number of
days actually elapsed. Any increase or decrease in the interest rate on the
Advances resulting from a change in the Prime Rate shall be effective
immediately from the date of such change. No interest payment or interest
rate charged hereunder shall exceed the maximum rate authorized from time
to time by applicable law. The outstanding balance of the Notes as
reflected on the Agent's records from time to time shall be considered
correct and binding on the Borrower and the Lenders (absent manifest error)
unless within thirty (30) days after receipt of any notice by the Agent or
any Lender of such outstanding amount, the Borrower or a Lender notifies
the Agent to the contrary.
Section 2.7. Fees.
(a) The Borrower shall pay to the Agent, for the accounts of the Lenders in
accordance with their respective Commitment Percentages, a facility fee
(the "Facility Fee") computed at a rate of one quarter percent (1/4%) per
annum on the average daily unused amount of the Maximum Credit Amount from
time to time in effect from the date hereof to and including the Credit
Termination Date. The Facility Fee shall be payable quarterly in arrears on
the first day of each of the quarter, e.g. July 1, October 1, January 1 and
April 1, commencing October 1, 2002.
(b) The Borrower agrees to pay in connection with each documentary Letter of
Credit issued hereto to the Agent (i) on behalf of each Lender, pro rata in
accordance with each Lender's Commitment Percentage, a negotiation fee of
the greater of (A) $60 or (B) 1/8% of the face amount of each drawing
thereunder and (ii) on behalf of the Issuing Lender all customary fees and
out of pocket expenses incurred by the Issuing Lender in issuing, amending,
processing or enforcing such Letter of Credit, including telex and courier
charges. As of the date hereof, the Agent's issuance and amendment fees
with respect to documentary Letters of Credit are $30.
(c) The Borrower agrees to pay in connection with each Stand-by Letter of
Credit issued hereto to the Agent (i) on behalf of each Lender, pro rata in
accordance with each Lender's Commitment Percentage, the then applicable
LIBOR Rate Margin and (ii) on behalf of the Issuing Lender all customary
fees and out of pocket expenses incurred by the Issuing Lender in issuing,
amending, processing or enforcing such Stand-by Letter of Credit, including
telex and courier charges. As of the date hereof, the Agent's issuance fee
with respect to Standby Letters of credit is $250.
Section 2.8. Set-Off. Notwithstanding the right to set-off under Section 10.2
and to the extent not prohibited by applicable law, the Borrower hereby
authorizes the Agent and each Lender, upon notice to the Borrower, if and
to the extent payment is not promptly made when due pursuant to the Notes
or pursuant to any provision hereof or of any other Lender Agreement, to
charge against any account of the Borrower with the Agent or such Lender,
an amount equal to the accrued interest and principal and other amounts
from time to time then due and payable to the Agent and the Lenders
hereunder and under all other Lender Agreements. If an Event of Default has
occurred and is continuing no notice to Borrower is required to make a
charge under this Section 2.8.
Section 2.9. Sharing of Payments. If any Lender shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Loans made by it in excess of its
ratable share (according to the then outstanding principal amount of the
Loans) of payments on account of the Loans obtained by all the Lenders,
such Lender shall purchase from the other Lenders such participations in
the Loans held by such other Lenders as shall cause such purchasing Lender
to share such payment ratably according to the then outstanding principal
amount of the Loans with each of such other Lenders; provided, however,
that if all or any portion of such payment is thereafter recovered from
such purchasing Lender, the purchase shall be rescinded and the purchase
price restored to the extent of such recovery, with interest at an interest
rate per annum equal to the Applicable Prime Rate. The Borrower agrees that
any Lender so purchasing a participation in the Loans from another Lender
pursuant to this Section 2.9 may, to the fullest extent permitted by law,
exercise all its rights of payment with respect to such participation as
fully as if such Lender were the direct creditor of the Borrower in the
amount of such participation.
Section 2.10. Increased Costs, Etc.
(a) Anything herein to the contrary notwithstanding, if any changes in present
or future applicable law (which term "applicable law", as used in this
Agreement, includes statutes and rules and regulations thereunder and
interpretations thereof by any competent court or by any governmental or
other regulatory body or official charged with the administration or the
interpretation thereof and requests, directives, instructions and notices
at any time or from time to time heretofore or hereafter made upon or
otherwise issued to any Lender by any central bank or other fiscal,
monetary or other authority, whether or not having the force of law),
including without limitation any change according to a prescribed schedule
of increasing requirements, whether or not known or in effect as of the
date hereof, shall (i) subject such Lender to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with respect to this
Agreement or the payment to such Lender of any amounts due to it hereunder,
or (ii) materially change the basis of taxation of payments to such Lender
of the principal of or the interest on the Advances or any other amounts
payable to such Lender hereunder, or (iii) impose or increase or render
applicable any special or supplemental deposit or reserve or similar
requirements or assessment against assets held by, or deposits in or for
the account of, or any liabilities of, or loans by an office of such Lender
in respect of the transactions contemplated herein, or (iv) impose on such
Lender any other condition or requirement with respect to this Agreement or
any Advance, and the result of any of the foregoing is (A) to increase the
cost to such Lender of making, funding or maintaining all or any part of
the Advances or its commitment hereunder, or (B) to reduce the amount of
principal, interest or other amount payable to such Lender hereunder, or
(C) to require such Lender to make any payment or to forego any interest or
other sum payable hereunder, the amount of which payment or foregone
interest or other sum is calculated by reference to the gross amount of any
sum receivable or deemed received by such Lender from the Borrower
hereunder, then, and in each such case not otherwise provided for
hereunder, the Borrower will upon demand made by such Lender promptly
following such Lender's receipt of notice pertaining to such matters
accompanied by calculations thereof in reasonable detail, pay to such
Lender such additional amounts as will be sufficient to compensate such
Lender for such additional cost, reduction, payment or foregone interest or
other sum; provided that the foregoing provisions of this sentence shall
not apply in the case of any additional cost, reduction, payment or
foregone interest or other sum resulting from any taxes charged upon or by
reference to the overall net income, profits or gains of any Lender. In
determining the additional amounts payable hereunder, the Lenders may use
any reasonable method of averaging, allocating or attributing such
additional costs, reductions, payments, foregone interest or other sums
among their respective customers.
(b) Anything herein to the contrary notwithstanding, if, after the date hereof,
any Lender shall have determined that any present or future applicable law,
rule, regulation, guideline, directive or request (whether or not having
force of law), including without limitation any change according to a
prescribed schedule of increasing requirements, whether or not known or in
effect as of the date hereof, regarding capital requirements for banks or
bank holding companies generally, or any change therein or in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by such Lender with any of the
foregoing, either imposes a requirement upon such Lender to allocate
additional capital resources or increases such Lender's requirement to
allocate capital resources or such Lender's commitment to make, or to such
Lender's maintenance of, the Advances hereunder, which has or would have
the effect of reducing the return on such Lender's capital to a level below
that which such Lender could have achieved (taking into consideration such
Lender's then existing policies with respect to capital adequacy and
assuming full utilization of such Lender's capital) but for such
applicability, change, interpretation, administration or compliance, by any
amount deemed by such Lender to be material, such Lender shall promptly
after its determination of such occurrence give notice thereof to the
Borrower. In such event, commencing on the date of such notice (but not
earlier than the effective date of any such applicability, change,
interpretation, administration or compliance), the fees payable hereunder
shall increase by an amount which will, in such Lender's reasonable
determination, evidenced by calculations in reasonable detail furnished to
the Borrower, compensate such Lender for such reduction, such Lender's
determination of such amount to be conclusive and binding upon the
Borrower, absent manifest error. In determining such amount, such Lender
may use any reasonable methods of averaging, allocating or attributing such
reduction among its customers.
Section 2.11. Changed Circumstances. In the event that:
(a) on any date on which the Applicable LIBOR Rate would otherwise be set the
Agent shall have determined in good faith (which determination shall be
final and conclusive) that adequate and fair means do not exist for
ascertaining the LIBOR Rate, as applicable; or
(b) at any time the Agent shall have determined in good faith (which
determination shall be final and conclusive) that
(i) the implementation of LIBOR Pricing Option has been made impracticable or
unlawful by (A) the occurrence of a contingency that materially and
adversely affects the London interbank market, or (B) compliance by any
Lender in good faith with any applicable law or governmental regulation,
guideline or order or interpretation or change thereof by any governmental
authority charged with the interpretation or administration thereof or with
any request or directive of any such governmental authority (whether or not
having the force of law); or
(ii) the LIBOR Rate shall no longer represent the effective cost to the Lenders
for U.S. dollar deposits in the London interbank market, as applicable for
deposits in which they regularly participate;
then, and in such event, the Agent shall forthwith so notify the Borrower
thereof. Until the Agent notifies the Borrower that the circumstances
giving rise to such notice no longer apply, the obligation of the Lenders
and the Agent to allow election by the Borrower of a LIBOR Pricing Option
shall be suspended. If at the time the Agent so notifies the Borrower, the
Borrower has previously given the Agent a Pricing Notice with respect to a
LIBOR Pricing Option, but the LIBOR Pricing Option requested therein has
not yet gone into effect, such Pricing Notice shall automatically be deemed
to be withdrawn and be of no force or effect. Upon such date as shall be
specified in such notice given by the Agent (which shall not be earlier
than the date such notice is given), the LIBOR Pricing Option with respect
to all LIBOR Rate Loans shall be terminated and the Borrower shall pay all
interest due on such LIBOR Rate Loans and any amounts required to be paid
pursuant to Section 4.6.
Section 2.12. Use of Proceeds. The proceeds of all Advances shall be used by the
Borrower for corporate and general working capital purposes, repurchases or
redemptions by Borrower of Borrower's capital stock in an aggregate amount
not to exceed $3,000,000 per annum and for Permitted Acquisitions. The
Borrower will not, directly or indirectly, use any part of such proceeds
for the purpose of purchasing or carrying any margin stock within the
meaning of Regulation U of the Board of Governors of the Federal Reserve
System or to extend credit to any Person for the purpose of purchasing or
carrying any such margin stock.
Section 2.13. Letters of Credit.
(a) Letters of Credit.
(i) Subject to and upon the terms and conditions herein set forth, the Borrower
may request that any Issuing Lender issue, at any time and from time to
time on and after the Closing Date and prior to the Credit Termination
Date, for the account of the Borrower an irrevocable standby letter of
credit, in a form customarily used by such Issuing Lender or in such other
form as has been approved by such Issuing Lender, such approval not to be
unreasonably withheld or delayed (each such standby letter of credit, a
"Letter of Credit") in support of standby obligations of the Borrower
incurred in the ordinary course of business and acceptable to the Agent
(the "L/C Supportable Obligations").
(ii) Subject to the terms and conditions contained herein, the Agent hereby
agrees that it will (and at the Borrower's request each other Issuing
Lender may, at its option, agree that it will), at any time and from time
to time on or after the Closing Date and prior to the Credit Termination
Date, following its receipt of the respective Letter of Credit Request,
issue for the account of the Borrower one or more Letters of Credit in
support of such L/C Supportable Obligations of the Borrower or any of its
Subsidiaries as is permitted to remain outstanding without giving rise to a
Default or Event of Default hereunder, provided that the respective Issuing
Lender shall be under no obligation to issue any Letter of Credit if at the
time of such issuance:
(A) any order, judgment or decree of any governmental authority or arbitrator
shall purport by its terms to enjoin or restrain such Issuing Lender from
issuing such Letter of Credit or any requirement of law applicable to such
Issuing Lender or any request or directive (whether or not having the force
of law) from any governmental authority with jurisdiction over such Issuing
Lender shall prohibit, or request that such Issuing Lender refrain from,
the issuance of letters of credit generally or such Letter of Credit in
particular or shall impose upon such Issuing Lender with respect to such
Letter of Credit any restriction or reserve or capital requirement (for
which such Issuing Lender is not otherwise compensated) not in effect on
the date hereof, or any unreimbursed loss, cost or expense which was not
applicable, in effect or known to such Issuing Lender as of the date hereof
and which such Issuing Lender in good xxxxx xxxxx material to it; or
(B) such Issuing Lender shall have received notice from any Lender prior to the
issuance of such Letter of Credit of the type described in Section
2.13(a)(i), i.e. that another Lender has issued a Letter of Credit based on
the same Letter of Credit Request.
(iii)Notwithstanding the foregoing, (A) no Letter of Credit shall be issued the
Stated Amount of which, when added to the Letter of Credit Outstandings
(exclusive of Unpaid Drawings which are repaid on the date of, and prior to
the issuance of, the respective Letter of Credit) and the aggregate
principal amount of all Advances made by the Lenders and then outstanding,
would exceed the Maximum Credit Amount at such time, (B) each Letter of
Credit shall be denominated in Dollars, (C) each Letter of Credit shall by
its terms terminate on or before the earlier of (x) the date which occurs
12 months after the date of the issuance thereof (although any such Letter
of Credit may be automatically extendable for successive periods of up to
12 months, but not beyond the tenth Business Day prior to the Credit
Termination Date (except as otherwise expressly permitted below), on terms
acceptable to the Issuing Lender thereof) and (y) the tenth Business Day
prior to the Credit Termination Date, provided that such Letter of Credit
may remain outstanding until the Credit Termination Date in the event that
it is cash collateralized in an amount equal to 110% of the Stated Amount
of such Letter of Credit, (D) the Stated Amount of each Letter of Credit
upon issuance shall be not less than $20,000 or such lesser amount as is
acceptable to the respective Issuing Lender and (E) no Letter of Credit
shall be issued the Stated Amount of which, when added to the Letter of
Credit Outstandings (exclusive of Unpaid Drawings which are repaid on the
date of, and prior to the issuance of, the respective Letter of Credit)
would exceed the Letter of Credit Limit.
(b) Letter of Credit Requests.
(i) Whenever the Borrower desires that a Letter of Credit be issued for its
account, the Borrower shall give the Agent and the respective Issuing
Lender at least three Business Days' (or such shorter period as is
acceptable to the respective Issuing Lender) written notice thereof. Each
notice shall be in the form of Exhibit I (each a "Letter of Credit
Request").
(ii) The making of each Letter of Credit Request shall be deemed to be a
representation and warranty by the Borrower that such Letter of Credit may
be issued in accordance with, and will not violate the requirements of,
Section 2.13(a)(iii). Upon the issuance of any Letter of Credit, such
Issuing Lender shall promptly notify each Lender of such issuance and such
notice shall be accompanied by a copy of the issued Letter of Credit.
(c) Letter of Credit Participations.
(i) Immediately upon the issuance by any Issuing Lender of any Letter of
Credit, such Issuing Lender shall be deemed to have sold and transferred to
each Lender, other than such Issuing Lender (each such Lender, in its
capacity under this Section 2.13(c), a "Participant"), and each such
Participant shall be deemed irrevocably and unconditionally to have
purchased and received from such Issuing Lender, without recourse or
warranty, an undivided interest and participation, to the extent of such
Participant's Commitment Percentage, in such Letter of Credit, each drawing
made thereunder and the obligations of the Borrower under this Agreement
with respect thereto and any security therefor or guaranty pertaining
thereto. Upon any change in the Commitment Percentages of the Lenders
pursuant hereto, it is hereby agreed that, with respect to all Letter of
Credit Outstandings and Unpaid Drawings, there shall be an automatic
adjustment to the participations pursuant to this Section 2.13(c) to
reflect the new Commitment Percentages of the assignor and assignee Lender
or of all Lenders, as the case may be.
(ii) In determining whether to pay under any Letter of Credit, the respective
Issuing Lender shall have no obligation relative to the other Lenders other
than to confirm that any documents required to be delivered under such
Letter of Credit appear to have been delivered and that they appear to
comply on their face with the requirements of such Letter of Credit. Any
action taken or omitted to be taken by any Issuing Lender under or in
connection with any Letter of Credit, if taken or omitted in the absence of
gross negligence or willful misconduct, shall not create for such Issuing
Lender any resulting liability to the Borrower or any Lender.
(iii)In the event that any Issuing Lender makes any payment under any Letter of
Credit and the Borrower shall not have reimbursed such amount in full to
such Issuing Lender pursuant to Section 2.13(d)(i), such Issuing Lender
shall promptly notify the Agent, which shall promptly notify each
Participant, of such failure, and each Participant shall promptly and
unconditionally pay to such Issuing Lender the amount of such Participant's
Commitment Percentage of such unreimbursed payment in Dollars and same day
funds. If the Agent so notifies any Participant prior to 11:00 A.M. (Boston
time) on any Business Day, such Participant shall make available such funds
to such Issuing Lender on such Business Day. If and to the extent such
Participant shall not have so made its Commitment Percentage of the amount
of such payment available to such Issuing Lender, such Participant agrees
to pay to such Issuing Lender, forthwith on demand such amount, together
with interest thereon, for each day from such date until the date such
amount is paid to such Issuing Lender at the overnight federal funds rate.
The failure of any Participant to make available to such Issuing Lender its
Commitment Percentage of any payment under any Letter of Credit shall not
relieve any other Participant of its obligation hereunder to make available
to such Issuing Lender its Commitment Percentage of any payment under any
Letter of Credit on the date required, as specified above, but no
Participant shall be responsible for the failure of any other Participant
to make available to such Issuing Lender such other Participant's
Commitment Percentage of any such payment.
(iv) Whenever any Issuing Lender receives a payment of a reimbursement
obligation as to which it has received any payments from the Participants
pursuant to clause (c) above, such Issuing Lender shall forward such
payment to the Agent, which in turn shall distribute to each Participant
which has paid its Commitment Percentage thereof, in United States dollars
and in same day funds, an amount equal to such Participant's share (based
upon the proportionate aggregate amount originally funded by such
Participant to the aggregate amount funded by all Participants) of the
principal amount of such reimbursement obligation and interest thereon
accruing after the purchase of the respective participations.
(v) Upon the request of any Participant, each Issuing Lender shall furnish to
such Participant copies of any Letter of Credit issued by it and such other
documentation as may reasonably be requested by such Participant.
(vi) The obligations of the Participants to make payments to each Issuing Lender
with respect to Letters of Credit issued by it shall be irrevocable and,
except as provided in Section 2.13(c)(ii), not subject to any qualification
or exception whatsoever and shall be made in accordance with the terms and
conditions of this Agreement under all circumstances, including, without
limitation, any of the following circumstances:
(A) any lack of validity or enforceability of this Agreement or any of the
other Lender Agreement;
(B) the existence of any claim, setoff, defense or other right which the
Borrower or any of its Subsidiaries may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), the
Agent, any Issuing Lender, any Participant, or any other Person, whether in
connection with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any underlying
transaction between the Borrower and the beneficiary named in any such
Letter of Credit);
(C) any draft, certificate or any other document presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect;
(D) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Lender Agreements; or
(E) the occurrence of any Default or Event of Default.
(d) Agreement to Repay Letter of Credit Drawings.
(i) The Borrower hereby agrees to reimburse the respective Issuing Lender, by
making payment to the Agent in immediately available funds, for any drawing
(each, a "Drawing") made under any Letter of Credit (each such Drawing
until reimbursed, an "Unpaid Drawing"), no later than four Business Days
after the date of such Drawing, with interest on the amount of such
Drawing, to the extent not reimbursed prior to 12:00 Noon (Boston time) on
the date of such Drawing, from and including the date of such Drawing to
but excluding the date such Issuing Lender was reimbursed by the Borrower
therefor at a rate per annum which shall be the Applicable Prime Rate;
provided, however, to the extent such amounts are not reimbursed prior to
12:00 Noon (Boston time) on the seventh Business Day following such
Drawing, interest shall thereafter accrue on the amount (and until
reimbursed by the Borrower) at a rate per annum which shall be the Prime
Rate in effect from time to time plus 4%, in each such case, with interest
to be payable on demand. The respective Issuing Lender shall give the
Borrower prompt written notice of each Drawing under any Letter of Credit,
provided that the failure to give any such notice shall in no way affect,
impair or diminish the Borrower's obligations hereunder.
(ii) The obligations of the Borrower under this Section 2.13(d) to reimburse the
respective Issuing Lender with respect to Drawings (including interest
thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Borrower may have or have had against any Lender
(including in its capacity as an Issuing Lender or as a Participant), or
any nonapplication or misapplication by the beneficiary of the proceeds of
such Drawing, the respective Issuing Lender's only obligation to the
Borrower being to confirm that any documents required to be delivered under
such Letter of Credit appear to have been delivered and that they appear to
comply on their face with the requirements of such Letter of Credit. Any
action taken or omitted to be taken by any Issuing Lender under or in
connection with any Letter of Credit if taken or omitted in the absence of
gross negligence or willful misconduct, shall not create for such Issuing
Lender any resulting liability to the Borrower.
ARTICLE 3 - CONDITIONS TO LOANS AND ADVANCES
Section 3.1. Conditions to First Advance. The Lenders' obligations to make the
first Advance shall be subject to compliance by the Borrower with its
agreements contained in this Agreement, and to the condition precedent that
the Agent shall have received each of the following, in form and substance
satisfactory to the Agent, Lenders and their counsel or in the form
attached hereto as an Exhibit, as the case may be:
(a) The Lender Agreements, including but not limited to the Guaranty Agreements
and the Notes, duly executed by the Borrower and the Guarantors.
(b) Copies of the resolutions of the Board of Directors of the Borrower
authorizing the execution, delivery and performance of this Agreement, the
Notes and the other Lender Agreements to which the Borrower is a party,
certified by the Secretary or an Assistant Secretary (or Clerk or Assistant
Clerk) of the Borrower (which certificate shall state that such resolutions
are in full force and effect).
(c) A certificate of the Secretary or an Assistant Secretary (or Clerk or
Assistant Clerk) of the Borrower certifying the name and signatures of the
officers of the Borrower authorized to sign this Agreement, the Notes, the
other Lender Agreements to which the Borrower is a party and the other
documents to be delivered by the Borrower hereunder.
(d) Certificates of legal existence and corporate good standing for the
Borrower of recent date issued by the appropriate governmental authorities.
(e) Evidence that a certificate of tax good standing for the Borrower has been
requested from the appropriate governmental authorities.
(f) Certificates of foreign qualification for the Borrower of recent date
issued by the appropriate governmental authorities in the states of New
Jersey, Minnesota and West Virginia.
(g) Certified copies of the Certificate of Incorporation of Borrower.
(h) Copies of By-laws of the Borrower certified by the Secretary or Assistant
Secretary (or Clerk or Assistant Clerk) to be a true and correct copy
thereof.
(i) The opinions of counsel to the Borrower, dated the date of execution of
this Agreement, in substantially the form of Exhibit F hereto.
(j) A certificate of a duly authorized officer of the Borrower, dated the date
of the first Advance, to the effect that (i) all conditions precedent on
the part of the Borrower to the execution and delivery hereof and the
making of the first Advance has been satisfied, (ii) the representations
and warranties of the Borrower herein and in all other Lender Agreements
are true and correct as of the date hereof, (iii) the Borrower has received
all necessary governmental and third party approvals and is, and will be
after giving effect to the transactions contemplated by this Agreement, in
compliance with all applicable laws, except for any immaterial violations,
and (iv) upon execution and delivery of this Agreement and all other Lender
Agreements no Default will exist hereunder and thereunder.
(k) A Compliance Certificate dated the date of the first Advance if requested
by Agent.
(l) A Certificate of the Chief Financial Officer of Borrower, in form
satisfactory to Agent, dated the date of the first Advance, certifying (i)
as to the payment of all taxes by Borrower, (ii) as to the filing of all
required tax returns, and (iii) that the Borrower is Solvent.
(m) If requested by the Agent, certificates of insurance issued to the Agent
from an independent insurance broker dated the Closing Date, in form and
substance satisfactory to the Agent, certifying as to the insurance on the
assets of the Borrower and its Subsidiaries as required by the Agent.
(n) Copies of the resolutions of the Board of Directors of each of the
Guarantors authorizing the execution, delivery and performance of the
Lender Agreements to which such Guarantor is a party, certified by the
Secretary or an Assistant Secretary (or Clerk or Assistant Clerk) of the
Guarantor (which certificate shall state that such resolutions are in full
force and effect).
(o) A certificate of the Secretary or an Assistant Secretary (or Clerk or
Assistant Clerk) of each of the Guarantors certifying the name and
signatures of the officers of such Guarantor authorized to sign the Lender
Agreements to which such Guarantor is a party and the other documents to be
delivered by such Guarantor hereunder.
(p) Certificates of legal existence and corporate good standing for each of the
domestic Guarantors of recent date issued by the appropriate governmental
authorities.
(q) Certificates of tax good standing for each of the domestic Guarantors of
recent date issued by the appropriate governmental authorities.
(r) Certified copies of the Certificates of Incorporation of each of the
Guarantors.
(s) Copies of By-laws of each of the Guarantors certified by the Secretary or
Assistant Secretary (or Clerk or Assistant Clerk) to be a true and correct
copy thereof.
(t) The opinions of counsel to each domestic Guarantor in substantially the
form of Exhibit G hereto.
(u) A certificate of a duly authorized officer of each of the Guarantors, dated
the date of the first Advance, to the effect that (i) the representations
and warranties of the Borrower and such Guarantor as they relate to such
Guarantor herein and in all other Lender Agreements are true and correct as
of the date hereof, (ii) such Guarantor has received all necessary
governmental and third party approvals in connection with its Guaranty
Agreement and all other Lender Agreements to which it is a party and is,
and will be after giving effect to the transactions contemplated by its
Guaranty Agreement and all other Lender Agreements to which it is a party,
in compliance with all applicable laws, except for any immaterial
violations, and (iii) upon execution and delivery by such Guarantor of its
Guaranty Agreement and all other Lender Agreements to which it is a party,
no Default will exist thereunder.
(v) A Certificate of the Chief Financial Officer of each of the Guarantors, in
form satisfactory to Agent, dated the date of the first Advance, certifying
(i) as to the payment of all taxes by such Guarantor, (ii) as to the filing
of all required tax returns by such Guarantor, and (iii) that such
Guarantor is Solvent.
(w) Such other documents, certificates and opinions as the Agent or the Lenders
may reasonably request.
Section 3.2. Conditions to All Advances. The Lenders' obligations to make any
Advances pursuant to this Agreement shall be subject to compliance by the
Borrower with its agreements contained in this Agreement and each other
Lender Agreement, and to the satisfaction, at or before the making of each
Advance, of all of the following conditions precedent:
(a) The representations and warranties herein and those made by or on behalf of
the Borrower in any other Lender Agreement shall be true and correct as of
the date on which any Advance is made, with the same effect as if made at
and as of such time (except for representations and warranties made as of a
certain date, which shall be true and correct only as of such date).
(b) On the date of any Advances hereunder, there shall exist no Default.
(c) The making of the requested Advances shall not be prohibited by any law or
governmental order or regulation applicable to the Lenders or to the
Borrower, and all necessary consents, approvals and authorizations of any
Person for any such Advances shall have been obtained.
ARTICLE 4 - PAYMENT AND REPAYMENT
Section 4.1. Mandatory Prepayment. If at any time the aggregate outstanding
principal balance of all Advances made hereunder exceeds (i) the Maximum
Credit Amount, if all outstanding Advances (excluding Letter of Credit
Outstandings) are less than $1,500,000 or (ii) the lesser of (a) the
Maximum Credit Amount and (b) 65% of Eligible Receivables plus 20% of
Eligible Finished Goods Inventory, if all outstanding Advances (excluding
Letter of Credit Outstandings) equal or exceed $1,500,000, the Borrower
shall immediately repay to the Agent for the ratable accounts of the
Lenders an amount equal to such excess.
Section 4.2. Voluntary Prepayments.
(a) The Borrower may make prepayments to the Agent for the ratable accounts of
the Lenders of any outstanding principal amount of the Advances which are
Prime Rate Loans in amounts equal to or exceeding $500,000 in accordance
with Section 4.3 at any time prior to 2:00 p.m. (Boston time) on any
Business Day without premium or penalty.
(b) The Borrower may make prepayments to the Agent for the ratable accounts of
the Lenders of any Advances which are LIBOR Rate Loans in amounts equal to
or exceeding $500,000 in accordance with Section 4.3 at any time prior to
2:00 p.m. (Boston time) on any Business Day subject, however, to the
premiums and penalties set forth in Section 4.6.
Section 4.3. Payment and Interest Cutoff. Notice of each prepayment pursuant to
Section 4.2 shall be given to the Agent (a) in the case of prepayment of
Prime Rate Loans, not later than 2:00 p.m. (Boston time) on the date of
payment, and (b) in the case of prepayment of LIBOR Rate Loans on any day
other than the last day of the Interest Period applicable thereto, not
later than 2:00 p.m. (Boston time) two (2) Business Days prior to the
proposed date of payment, and, in each case, shall specify the total
principal amount of the Advances to be paid on such date. Notice of
prepayment having been given in compliance with this Section 4.3, the
amount specified to be prepaid shall become due and payable on the date
specified for prepayment and from and after said date (unless the Borrower
shall default in the payment thereof) interest thereon shall cease to
accrue. Unpaid interest on the principal amount of any Advances so prepaid
accrued to the date of prepayment shall be due on the date of prepayment.
Section 4.4. Payment or Other Actions on Non-Business Days. Whenever any payment
to be made hereunder shall be stated to be due on a day other than a
Business Day, such payment shall be made on the next succeeding Business
Day, and such extension of time shall in such case be included in the
computation of payment of interest or fees, as the case may be. In the case
of any other action the last day for performance of which shall be a day
other than a Business Day, the date for performance shall be extended to
the next succeeding Business Day.
Section 4.5. Method and Timing of Payments.
(a) All payments required to be made pursuant to the provisions of this
Agreement and any other Lender Agreement, and all prepayments pursuant to
Section 4.1, may be charged by the Agent against the Borrower's accounts
with the Agent. The Borrower hereby authorizes the Agent and the Lenders,
without notice to the Borrower, to charge against any account of the
Borrower with the Agent or such Lender an amount equal to the accrued
interest, principal and other amounts from time to time due and payable to
the Agent and the Lenders hereunder and under all other Lender Agreements.
(b) The Borrower shall make each payment to be made by it hereunder not later
than 12:00 noon (Boston time) on the day when due in lawful money of the
United States to the Agent at its address set forth in Section 14.1 in
immediately available funds. The Agent will, after its receipt thereof,
distribute like funds relating to the payment of principal, interest or any
other amounts payable hereunder ratably to the Lenders in accordance with
their respective Commitment Percentages. Any payment made by the Borrower
to the Agent under this Agreement or under the Notes in the manner provided
in this Agreement shall be deemed to be a payment to each of the respective
Lenders, unless the provisions of this Agreement expressly provide that any
such payment shall be solely for the account of the Agent or any specific
Lender.
Section 4.6. Payments Not at End of Interest Period. If the Borrower for any
reason makes any payment of principal with respect to any LIBOR Rate Loan
on any day other than the last day of the Interest Period applicable to
such LIBOR Rate Loan, including without limitation by reason of
acceleration, or fails to borrow a LIBOR Rate Loan after electing a LIBOR
Pricing Option with respect thereto pursuant to Section 2.4, the Borrower
shall pay to the Agent, for the ratable account of the Lenders, any amounts
required to compensate the Lenders for any reasonable losses, costs or
expenses which they may reasonably incur as a result of such payment or
failure to borrow, including without limitation, any loss, including lost
profits, costs or expenses incurred by reason of the liquidation,
reutilization or reemployment of deposits or other funds acquired by the
Lenders to fund or maintain such Advances, provided, however, that the
Lenders shall not be entitled to compensation for lost profits in
connection with any such payment or failure to borrow resulting from the
occurrence of any event described in Section 2.11 hereof. Such compensation
may include, without limitation, an amount equal to (a) the amount of
interest which would have accrued on the amount so paid or not borrowed,
for the period from the date of such payment or failure to borrow, to the
last day of the then current Interest Period for such Advance (or, in the
case of a failure to borrow, to the last day of the Interest Period for the
Advance which would have commenced on the date of such failure to borrow),
at the applicable rate of interest for such Advance provided for herein
minus (b) the amount of interest (as reasonably determined by the Agent),
which would accrue and become payable to the Lenders during such period on
the principal repaid or not borrowed if the Lenders, following such
repayment or failure to borrow, were to reinvest such principal in U.S.
Treasury securities selected by the Agent in an amount equal (as nearly as
may be) to the principal so repaid or not borrowed and having a term equal
(as near as may be) to such period. The Borrower shall pay such amount upon
presentation by the Agent of a statement setting forth the amount and the
Agent's calculation thereof pursuant hereto, which statement shall be
deemed true and correct absent manifest error.
Section 4.7. Currency. All payments and prepayments provided for under this
Agreement shall be made in lawful currency of the United States of America
in immediately available funds.
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES
In order to induce the Agent and the Lenders to enter into this Agreement
and to induce the Lenders to make the Advances as contemplated hereby, the
Borrower hereby makes the following representations and warranties:
Section 5.1. Corporate Existence, Charter Documents, Etc. The Borrower and each
Subsidiary is a corporation or limited liability company validly organized,
legally existing and in good standing under the laws of the jurisdiction in
which it is organized and has corporate or limited liability company power,
as applicable, to own its properties and conduct its business as now
conducted and as proposed to be conducted by it. Certified copies of the
charter documents, By-Laws and limited liability company agreements, and
other organizational documents of similar nature, as applicable, of the
Borrower and each Subsidiary have been delivered to the Lenders and are
true, accurate and complete as of the date hereof.
Section 5.2. Principal Place of Business; Location of Records. Except as
described on Schedule 5.2 attached hereto, the Borrower's and each
Subsidiary's principal place of business is located at 00 Xxxxxxxxxx Xxxxx,
Xxxxxxx, XX and the Borrower and each Subsidiary has had no other principal
place of business during the last six months except as listed on Schedule
5.2 hereto. All of the books and records or true and complete copies
thereof relating to the accounts and contracts of the Borrower and each
Subsidiary are and will be kept at such location except as listed on
Schedule 5.2 hereto.
Section 5.3. Qualification. The Borrower and each Subsidiary is duly qualified,
licensed and authorized to do business and is in good standing as a foreign
corporation in each jurisdiction where a failure to do so could be
reasonably likely to have a Material Adverse Effect.
Section 5.4. Subsidiaries. The Borrower has no Subsidiaries except for those
listed in Schedule 5.4. Except as described on Schedule 5.4 attached
hereto, all of the issued and outstanding capital stock of each Subsidiary
listed on Schedule 5.4 is owned of record and beneficially by the Borrower
or by one of the Subsidiaries.
Section 5.5. Corporate Power. The execution, delivery and performance of this
Agreement, the Notes and all other Lender Agreements and other documents
delivered or to be delivered by the Borrower or any Subsidiary to the Agent
or the Lenders, and the incurrence of Indebtedness to the Lenders hereunder
or thereunder, now or hereafter owing:
(a) are within the corporate or limited liability company powers, as
applicable, of the Borrower and each Subsidiary, as the case may be, having
been duly authorized by its Board of Directors or other similar governing
body, and, if required by law, by its charter documents or by its By-Laws,
by its stockholders;
(b) do not require any approval or consent of, or filing with, any governmental
agency or other Person (or such approvals and consents have been obtained
and delivered to the Lenders) and are not in contravention of law or the
terms of the charter documents or By-Laws of the Borrower and each
Subsidiary or any amendment thereof;
(c) do not and will not
(i) result in a breach of or constitute a default under any indenture or loan
or credit agreement or any other material agreement, lease or instrument to
which the Borrower or any Subsidiary is a party or by which the Borrower,
any Subsidiary or any of their respective properties are bound or affected,
(ii) result in, or require, the creation or imposition of any mortgage, deed of
trust, pledge, lien, security interest or other charge or encumbrance of
any nature on any property now owned or hereafter acquired by the Borrower
or any Subsidiary, except as provided in the Lender Agreements, or
(iii)result in a violation of or default under any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award having
applicability to the Borrower or any Subsidiary, or to any of their
respective properties.
Section 5.6. Valid and Binding Obligations. This Agreement, the Notes and all
the other Lender Agreements executed in connection herewith and therewith
constitute, or will constitute when delivered, the valid and binding
obligations of the Borrower and its Subsidiaries, as the case may be,
enforceable in accordance with their respective terms, except as the
enforceability thereof may be subject to bankruptcy, insolvency, moratorium
and other laws affecting the rights and remedies of creditors and secured
parties and to the exercise of judicial discretion in accordance with
general equitable principles.
Section 5.7. Other Agreements. Except as set forth in Schedule 5.7 hereto,
neither the Borrower nor any Subsidiary is a party to any indenture, loan
or credit agreement, or any lease or other agreement or instrument, or
subject to any charter or corporate restriction, which is likely to have a
Material Adverse Effect, or which restricts the ability of the Borrower or
any Subsidiary to carry out any of the provisions of this Agreement, the
Notes or any of the Lender Agreements executed in connection herewith and
therewith.
Section 5.8. Payment of Taxes. The Borrower and its Subsidiaries have filed all
tax returns which are required to be filed by them and have paid, or made
adequate provision for the payment of, all taxes which have or may become
due pursuant to said returns or to assessments received. Except as set
forth on Schedule 5.8 hereto, all federal tax returns of the Borrower and
its Subsidiaries through their fiscal year ended in 2001 have been audited
by the Internal Revenue Service or are not subject to such audit by virtue
of the expiration of the applicable statute of limitation, and the results
of such audits are fully reflected in the balance sheet contained in the
2001 Financial Statements. The Borrower knows of no material additional
assessments since such date for which adequate reserves appearing in the
balance sheet contained in the 2001 Financial Statements have not been
established. The Borrower and its Subsidiaries have made adequate provision
for all current taxes, and to the best of the Borrower's knowledge there
will not be any additional assessments for any fiscal periods prior to and
including that which ended on the date of said balance sheet in excess of
the amounts reserved therefor.
Section 5.9. Financial Statements. All balance sheets, statements and other
financial information furnished to the Lenders in connection with this
Agreement and the transactions contemplated hereby (each of which is listed
on Schedule 5.9), including, without limitation, the 2001 Financial
Statements, have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved
(except for normal year-end adjustments and for the absence of footnotes
with interim statements) and present fairly the consolidated financial
condition of the Borrower and its Subsidiaries as of the dates and for the
periods described therein, and all such information so furnished was true,
correct and complete in all material respects as of the date thereof.
Section 5.10. Other Materials Furnished. No written information, exhibits,
memoranda or reports furnished to the Lenders by or on behalf of the
Borrower or any Subsidiary in connection with the negotiation of this
Agreement contains any material misstatement of fact or omits to state a
material fact necessary to make the statements contained therein not
misleading.
Section 5.11. Stock. There are presently issued by the Borrower and its
Subsidiaries and outstanding the shares of capital stock indicated on
Schedule 5.11. The Borrower and its Subsidiaries have received the
consideration for such stock, have authorized such stock to be issued and
have otherwise complied with all legal requirements relating to the
authorization and issuance of shares of stock and all such shares are
validly issued, fully paid and non-assessable except for when a failure to
do so could not reasonably be expected to have a Material Adverse Effect.
Except as set forth on Schedule 5.11, the Borrower and its Subsidiaries
have no other capital stock or other equity interest of any class
outstanding.
Section 5.12. Changes in Condition. Since the date of the balance sheet
contained in the 2001 Financial Statements, there has been no material
adverse change in the business or assets or in the condition, financial or
otherwise, of the Borrower and its Subsidiaries on a consolidated basis,
and neither the Borrower nor any Subsidiary has entered into any
transaction outside of the ordinary course of business which is material to
the Borrower and its Subsidiaries on a consolidated basis. Neither the
Borrower nor any Subsidiary has any contingent liabilities of any material
amount which are not referred to in the 2001 Financial Statements
(including the footnotes thereto).
Section 5.13. Assets, Licenses, Patents, Trademarks, Etc.
(a) The Borrower and its Subsidiaries have good and marketable title to, or
valid leasehold interests in, all of their assets, real and personal,
including the assets carried on their books and reflected in the 2001
Financial Statements, subject to no liens, charges or encumbrances, except
for (i) liens, charges and encumbrances described in Schedule 5.16 and
permitted by Section 9.2 hereof, and (ii) assets sold, abandoned or
otherwise disposed of in the ordinary course of business.
(b) The Borrower and its Subsidiaries own or license all material licenses,
patents, patent applications, registered copyrights, registered service
marks, registered trademarks, trademark applications, and trade names
necessary to continue to conduct their business as heretofore conducted by
them, now conducted by them and proposed to be conducted by them, each of
which is listed, together with Patent and Trademark Office application or
registration numbers, where applicable, on Schedule 5.13 hereto. The
Borrower and its Subsidiaries conduct their respective businesses without
infringement or pending or threatened claim of infringement of any license,
patent, copyright, service xxxx, trademark, trade name, trade secret or
other intellectual property right of others, except where such claim or
infringement would have no Material Adverse Effect. To the best knowledge
of the Borrower, there is no infringement or pending or threatened claim of
infringement by others of any material license, patent, copyright, service
xxxx, trademark, trade name, trade secret or other intellectual property
right of Borrower and its Subsidiaries.
Section 5.14. Litigation. There is no litigation, at law or in equity, or any
proceeding before any federal, state, provincial or municipal board or
other governmental or administrative agency pending or, to the knowledge of
the Borrower, threatened, which involves a material risk of any judgment or
liability which could result in any material adverse change in the business
or assets or in the condition, financial or otherwise, of the Borrower and
its Subsidiaries on a consolidated basis, and no judgment, decree, or order
of any federal, state, provincial or municipal court, board or other
governmental or administrative agency has been issued against the Borrower
or any Subsidiary which has or may have a Material Adverse Effect.
Section 5.15. Pension Plans. No employee benefit plan established or maintained
by the Borrower or any Subsidiary or any other Person a member of the same
"control group," as the Borrower (a "Pension Affiliate"), within the
meaning of Section 302(f)(6)(b) of ERISA, (including any multi-employer
plan to which the Borrower or any Subsidiary contributes) which is subject
to Part 3 of Subtitle B of Title I of the ERISA, had a material accumulated
funding deficiency (as such term is defined in Section 302 of ERISA) as of
the last day of the most recent fiscal year of such plan ended prior to the
date hereof, or would have had an accumulated funding deficiency (as so
defined) on such day if such year were the first year of such plan to which
Part 3 of Subtitle B of Title I of ERISA applied, and no material liability
under Title IV of ERISA has been, or is expected by the Borrower or any
Subsidiary to be, incurred with respect to any such plan by the Borrower or
any Subsidiary or any Pension Affiliate. The execution, delivery and
performance by the Borrower of this Agreement and the other Lender
Agreements executed on the date hereof will not involve any prohibited
transaction within the meaning of ERISA or Section 4975 of the Internal
Revenue Code. The Borrower and its Subsidiaries have no Pension Plan other
than those described on Schedule 5.15.
Section 5.16. Outstanding Indebtedness. The outstanding amount of Indebtedness
for borrowed money, including Capitalized Lease Obligations and Guaranties
of borrowed money, of the Borrower and its Subsidiaries as of the date
hereof, in excess of $250,000 is correctly set forth in Schedule 5.16
hereto, and said schedule sets forth the credit agreements, guaranties,
leases and other instruments pursuant to which such Indebtedness has been
incurred and all liens, charges and encumbrances securing such
Indebtedness. Said schedule also describes all agreements and other
arrangements pursuant to which the Borrower or any Subsidiary may borrow
any money.
Section 5.17. Environmental Matters. Except as set forth in Schedule 5.17:
(a) None of the Borrower, any Subsidiary or, to the Borrower's knowledge, any
operator of any of their respective properties is in violation, or to the
Borrower's knowledge is in alleged violation, of any Environmental Law,
which violation would have a Material Adverse Effect.
(b) None of the Borrower, any Subsidiary or any operator of any of their
respective properties has received written notice from any third party,
including without limitation any federal, state, county, or local
governmental authority, (i) that it has been identified as a potentially
responsible party under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 as amended ("CERCLA") or any
equivalent state law, with respect to any site or location; (ii) that any
hazardous waste, as defined in 42 U.S.C. ss. 6903(5), any hazardous
substances, as defined in 42 U.S.C. ss. 9601(14), any pollutant or
contaminant, as defined in 42 U.S.C. ss. 9601(33), or any toxic substance,
oil or hazardous materials or other chemicals or substances regulated by
any Environmental Laws ("Hazardous Substances") which it has generated,
transported or disposed of, has been found at any site at which a federal,
state, county, or local agency or other third party has conducted or has
ordered the Borrower, any Subsidiary or another third party or parties
(e.g. a committee of potentially responsible parties) to conduct a remedial
investigation, removal or other response action pursuant to any
Environmental Law; or (iii) that it is or shall be a named party to any
claim, action, cause of action, complaint (contingent or otherwise) or
legal or administrative proceeding arising out of any actual or alleged
release or threatened release of Hazardous Substances, in each case which
could have a Material Adverse Effect. For purposes of this Agreement,
"release" means any past or present releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, disposing or
dumping of Hazardous Substances into the environment.
(c) (i) The Borrower, each Subsidiary and each operator of any real property
owned or operated by the Borrower is in compliance, in all material
respects, with all provisions of the Environmental Laws relating to the
handling, manufacturing, processing, generation, storage or disposal of any
Hazardous Substances; (ii) to the best of the Borrower's knowledge, no
portion of property owned, operated or controlled by the Borrower or any
Subsidiary has been used for the handling, manufacturing, processing,
generation, storage or disposal of Hazardous Substances except in material
compliance with applicable Environmental Laws; (iii) to the best of the
Borrower's knowledge, there have been no releases or threatened releases of
Hazardous Substances on, upon, into or from any property owned, operated or
controlled by the Borrower or any Subsidiary, which releases could have a
Material Adverse Effect; (iv) to the best of the Borrower's knowledge,
there have been no releases of Hazardous Substances on, upon, from or into
any real property in the vicinity of the real properties owned, operated or
controlled by the Borrower or any Subsidiary which, through soil or
groundwater contamination, may have come to be located on the properties of
the Borrower or any Subsidiary which releases could have a Material Adverse
Effect; (v) to the best of the Borrower's knowledge, there have been no
releases of Hazardous Substances on, upon, from or into any real property
formerly but no longer owned, operated or controlled by the Borrower or any
Subsidiary during the period of such former ownership or operation, which
release could have a Material Adverse Effect.
(d) None of the properties of the Borrower or any Subsidiary is or, to their
knowledge, shall be subject to any applicable environmental cleanup
responsibility law or environmental restrictive transfer law or regulation
by virtue of the transactions set forth herein and contemplated hereby.
Section 5.18. Foreign Trade Regulations. Neither the Borrower nor any Subsidiary
is (a) a person included within the definition of "designated foreign
country" or "national" of a "designated foreign country" in Executive Order
No. 8389, as amended, in Executive Order No. 9193, as amended, in the
Foreign Assets Control Regulations (31 C.F.R., Chapter V, Part 500, as
amended), in the Cuban Assets Control Regulations of the United States
Treasury Department (31 C.F.R., Chapter V, Part 515, as amended) or in the
Regulations of the Office of Alien Property, Department of Justice (8
C.F.R., Chapter II, Part 507, as amended) or within the meanings of any of
the said Orders or Regulations, or of any regulations, interpretations, or
rulings issued thereunder, or in violation of said Orders or Regulations or
of any regulations, interpretations or rulings issued thereunder; or (b) an
entity listed in Section 520.101 of the Foreign Funds Control Regulations
(31 C.F.R., Chapter V, Part 520, as amended).
Section 5.19. Governmental Regulations. None of the Borrower, any Subsidiary or
any Affiliate of the Borrower is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the Investment
Company Act of 1940, or is engaged in a business or activity subject to any
statute or regulation which regulates the incurring by the Borrower of
Indebtedness for borrowed money, including statutes or regulations relating
to common or contract carriers or to the sale of electricity, gas, steam,
water, telephone or telegraph or other public utility services.
Section 5.20. Margin Stock. Neither the Borrower nor any Subsidiary owns any
"margin stock" within the meaning of Regulation U of the Board of Governors
of the Federal Reserve System, or any regulations, interpretations or
rulings thereunder, nor is the Borrower or any Subsidiary engaged
principally or as one of its important activities in extending credit which
is used for the purpose of purchasing or carrying margin stock.
ARTICLE 6 - REPORTS AND INFORMATION
Section 6.1. Quarterly Financial Statements and Reports. As soon as available
and in any event within forty-five (45) days after the end each of the
first three quarters of each fiscal year of the Borrower, the Borrower
shall furnish to the Agent a copy of the Borrower's 10-Q report as filed
with the Securities and Exchange Commission, or if the Borrower ceases to
be a reporting company under the Securities and Exchange Act of 1934,
consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries, including, without limitation, Saucony Canada, Inc., as of
the end of such quarter, and consolidated and consolidating statements of
income and consolidated statements of cash flow of the Borrower and its
Subsidiaries, including, without limitation, Saucony Canada, Inc., for the
period commencing at the end of the previous fiscal year and ending with
the end of such quarter, all in reasonable detail and stating in
comparative form the respective figures for the corresponding date and
period in the previous fiscal year and all prepared in accordance with GAAP
consistently applied and certified by the chief financial officer of the
Borrower (subject to year-end adjustments and the absence of footnotes).
Section 6.2. Annual Financial Statements. As soon as available and in any event
within one hundred and twenty (120) days after the end of each fiscal year
of the Borrower, the Borrower shall furnish to the Agent a copy of the
Borrower's 10-K report as filed with the SEC, provided that the Borrower is
at such time a reporting company under the Securities and Exchange Act of
1934, and, either as part of the 10-K or otherwise, the consolidated and
consolidating balance sheets of the Borrower and its Subsidiaries as of the
end of such fiscal year, and consolidated and consolidating statements of
income and consolidated statements of cash flow of the Borrower and its
Subsidiaries for the period commencing at the end of the previous fiscal
year, which, in the case of such consolidated statements, shall be audited
and certified by accountants of recognized national standing, such
certificate to be in such form as generally recognized as unqualified,
together with an opinion of such certified public accountants that, to
their knowledge, there has occurred no Default or Event of Default, or, if
the contrary has appeared from their examination, to state the facts found
by them.
Section 6.3. Monthly Reports. In the event that Advances (excluding Letter of
Credit Outstandings) exceed $1,500,000 at any time during any month, the
Borrower shall furnish to the Agent a Borrowing Base Certificate within
fifteen (15) days after the end of such month, certified as correct in all
material respects by the chief executive officer, chief operating officer
or the chief financial officer of the Borrower.
Section 6.4. Notice of Defaults. As soon as possible, and in any event within
ten (10) days after the occurrence of each Default, the Borrower shall
furnish to the Agent and each Lender the statement of its chief executive
officer or chief financial officer setting forth details of such Default
and the action which the Borrower has taken or proposes to take with
respect thereto.
Section 6.5. Additional Quarterly Reports. Within forty-five days after the end
of each fiscal quarter of the Borrower, the Borrower shall furnish to the
Agent (i) a duly completed Compliance Certificate, (ii) detailed accounts
receivable reports of the Borrower with respect to the Borrower's ten
largest customers and accounts payable aging reports of the Borrower with
respect to the Borrower's ten largest suppliers/vendors as of the fiscal
quarter then ended, (iii) an updated budget for the Borrower and its
Subsidiaries through the remainder of the Borrower's fiscal year, all
certified as correct in all material respects by the chief executive
officer, chief operating officer or the chief financial officer of the
Borrower.
Section 6.6. Notice of Litigation. Promptly after the commencement thereof, the
Borrower shall furnish to the Agent and each Lender written notice of all
actions, suits and proceedings before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
affecting the Borrower or any Subsidiary, which, if adversely determined,
would have a Material Adverse Effect.
Section 6.7. Communications with Others. Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements, and reports
which the Borrower or any Subsidiary sends to its stockholders, and copies
of all regular, periodic, and special reports, and all registration
statements which the Borrower or any Subsidiary files with the Securities
and Exchange Commission or any governmental authority which may be
substituted therefor, or with any national securities exchange, the
Borrower shall furnish the same to the Agent.
Section 6.8. Reportable Events. At any time that the Borrower or any Subsidiary
has a Pension Plan, the Borrower shall furnish to the Agent and each
Lender, as soon as possible, but in any event within thirty (30) days after
the Borrower knows or has reason to know that any Reportable Event with
respect to any Pension Plan has occurred, the statement of its chief
executive officer or chief financial officer setting forth the details of
such Reportable Event and the action which the Borrower or any Subsidiary
has taken or proposes to take with respect thereto, together with a copy of
the notice of such Reportable Event to the Pension Benefit Guaranty
Corporation.
Section 6.9. Annual Pension Reports. At any time that the Borrower or any
Subsidiary has a Pension Plan, the Borrower shall furnish to the Agent and
each Lender, promptly after the filing thereof with the Secretary of Labor
or the Pension Benefit Guaranty Corporation, copies of each annual report
which is filed with respect to each Pension Plan for each plan year,
including:
(a) a statement of assets and liabilities of such Pension Plan as of the end of
such plan year and statements of changes in fund balance and in financial
position, or a statement of changes in net assets available for plan
benefits, for such plan year;
(b) an opinion of Deloitte & Touche (or other independent certified public
accountants of recognized standing reasonably acceptable to the Agent)
relating to such Pension Plan to the extent that any such opinion for the
Pension Plan is required by law; and
(c) an actuarial statement of such Pension Plan applicable to such plan year,
together with an opinion of an enrolled actuary of recognized standing
acceptable to the Lenders, to the extent that any such statement and/or
opinion for the Pension Plan is required by law.
Section 6.10. Reports to other Creditors. Promptly after filing the same, the
Borrower shall furnish to the Agent and each Lender copies of any
compliance certificate and other information furnished to any other holder
of the securities (including debt obligations) of the Borrower or any
Subsidiary pursuant to the terms of any indenture, loan or credit or
similar agreement and not otherwise required to be furnished to the Agent
or the Lenders pursuant to any other provision of this Agreement.
Section 6.11. Communications with Independent Public Accountants. At any
reasonable time and from time to time and upon notice to the Borrower, the
Borrower shall provide the Agent and the Lenders and any agents or
representatives of the Lenders access to the independent public accountants
of the Borrower to discuss the Borrower's and its Subsidiaries' financial
condition, including, without limitation any recommendations of such
independent public accountants concerning the management, finances,
financial controls or operations of the Borrower and its Subsidiaries, and
the Borrower shall have the opportunity to be a party to any such
discussion. Promptly after the receipt thereof, the Borrower shall furnish
to the Agent and each Lender copies of any written recommendations
concerning the management, finances, financial controls, or operations of
the Borrower or any Subsidiary received from the Borrower's independent
public accountants.
Section 6.12. Environmental Reports. The Borrower shall furnish to the Agent and
each Lender: (a) not later than seven (7) days after notice thereof, notice
of any enforcement actions, or, to the knowledge of the Borrower,
threatened enforcement actions by any Governmental Agency related to
Environmental Laws which to Borrower's knowledge affects the Borrower, any
Subsidiary or their properties; (b) copies, promptly after they are
received, of all orders, notices of responsibility, notices of violation,
notices of enforcement actions, and assessments, and other written
communications pertaining to any such orders, notices, claims and
assessments received by the Borrower or any Subsidiary from any
Governmental Agency; (c) not later than seven (7) days after notice
thereof, notice of any civil claims or threatened civil claims affecting
the Borrower or any Subsidiary by any third party alleging any violation of
Environmental Laws or harm to human health or the environment; (d) copies
of all cleanup plans, site assessment reports, response plans, remedial
proposals, or other submissions of the Borrower or any Subsidiary, other
third party (e.g., committee of potentially responsible parties at a
Superfund site), or any combination of same, submitted by the Borrower or
any Subsidiary to a Governmental Agency in response to any communication
referenced in subsections (a) and (b) herein simultaneously with their
submission to such Governmental Agency or promptly upon receipt by the
Borrower or any Subsidiary of any such plans, reports or proposals
submitted by a third party to such Governmental Agency; and (e) from time
to time, on request of the Agent, evidence reasonably satisfactory to the
Agent of the Borrower's and its Subsidiaries' insurance coverage, if any,
for any environmental liabilities.
Section 6.13. Projections. The Borrower shall furnish to the Agent no later than
January 30th of each year commencing with January 30, 2003, one year
projections including a quarter by quarter projected operating budget and
cash flow of the Borrower and each of its Subsidiaries for such fiscal year
(including a consolidated and consolidating income statement for each
fiscal quarter, a balance sheet as at the end of the last fiscal month and
cash flow projections in each fiscal quarter), such projections to be
accompanied by a certificate signed by the President, Chief Financial
Officer or Controller of the Borrower to the effect that such projections
have been prepared on the basis of sound financial planning practice
consistent with past budgets and financial statements and that such officer
has no reason to question the reasonableness of any material assumptions on
which such projections were prepared.
Section 6.14. Inspection of Premises. At any reasonable time and from time to
time and upon reasonable notice to the Borrower, Agent and each Lender (a)
shall have full access to and the right to audit, check, inspect and make
abstracts and copies from the Borrower's and its Subsidiaries' books,
records, audits, correspondence and all other papers relating to the
Collateral and the operation of the Borrower's or its Subsidiaries'
business and (b) may enter upon any of the Borrower's or its Subsidiaries'
premises for the purpose of inspecting the premises and any and all records
pertaining thereto and the operation of Borrower's or its Subsidiaries'
business, provided that, absent the existence of an Event of Default, the
Agent and the Lenders may not exercise their rights provided under
paragraphs (a) and (b) above more than twice per annum. All costs and
expenses of inspections permitted under this Section 6.14 shall be borne by
the Borrower.
Section 6.15. Miscellaneous. The Borrower shall provide the Agent and the
Lenders with such other information as the Agent or the Lenders may from
time to time reasonably request respecting the business, properties,
prospects, condition or operations, financial or otherwise, of the Borrower
and its Subsidiaries.
ARTICLE 7 - FINANCIAL COVENANTS
[Intentionally omitted.]
ARTICLE 8 - AFFIRMATIVE COVENANTS
On and after the date hereof, until all of the Lender Obligations shall
have been paid in full and the Lenders shall have no commitment hereunder, the
Borrower covenants that it will, and will cause each of its Subsidiaries to,
comply with the following covenants and provisions:
Section 8.1. Existence and Business. The Borrower and each Subsidiary will,
except where a failure to do so could not reasonably be expected to have a
Material Adverse Effect, (a) subject to Section 9.6, preserve and maintain
its corporate or limited liability company existence, as the case may be,
in the jurisdiction in which it is currently organized, and qualify and
remain qualified as a foreign corporation in each jurisdiction in which
such qualification is required, (b) preserve and maintain in full force and
effect all material rights, licenses, patents and franchises, (c) comply in
all material respects with all valid and applicable statutes, rules and
regulations necessary for the conduct of business, and (d) engage only in
the businesses which it is conducting on the date of this Agreement and
substantially related businesses.
Section 8.2. Taxes and Other Obligations. The Borrower and each Subsidiary (a)
will duly pay and discharge, or cause to be paid and discharged, before the
same shall become in arrears, all material taxes, assessments and other
governmental charges, imposed upon it and its properties, sales and
activities, or upon the income or profits therefrom, as well as the claims
for labor, materials, or supplies which if unpaid might by law result in a
lien or charge upon any of its properties, and (b) will promptly pay or
cause to be paid when due, or in conformance with customary trade terms
(but, unless contested in good faith, not later than 60 days from the due
date in the case of trade debt), all lease obligations, trade debt and all
other Indebtedness incident to its operations, provided, however, that the
Borrower and any Subsidiary may contest any such charges, claims or
obligations in good faith so long as (i) an adequate reserve therefor has
been established and is maintained if and as required by generally accepted
accounting principles and (ii) no action to foreclose any such lien has
been commenced. The Borrower and each Subsidiary shall cause all applicable
tax returns and all amounts due thereunder to be filed and paid, as the
case may be, in order to maintain its good standing with the Internal
Revenue Service and state, local and foreign tax authorities.
Section 8.3. Maintenance of Properties and Leases. The Borrower and each
Subsidiary shall maintain, keep and preserve all of its properties
(tangible and intangible) in good repair and working order, except for
ordinary wear and tear and obsolete property not used by the Borrower or
such Subsidiary in the course of its business. The Borrower and each
Subsidiary shall replace and improve its properties as necessary for the
conduct of its business. The Borrower and each Subsidiary shall comply in
all material respects with all leases naming it as lessee.
Section 8.4. Insurance. The Borrower and each Subsidiary (a) will keep its
principal assets which are of an insurable character insured by financially
sound and reputable insurers against loss or damage by fire, explosion or
hazards, by extended coverage in an amount sufficient to avoid co-insurance
liability, and (b) will maintain with financially sound and reputable
insurers insurance against other hazards and risks and liability to persons
and property to the extent and in a manner satisfactory to the Lenders, and
in any event as customary for companies in similar businesses similarly
situated; provided, however, that on prior notice to the Agent and the
Lenders it may effect workmen's compensation insurance through an insurance
fund operated by such state or jurisdiction and may also be a self-insurer
with respect to workmen's compensation and with respect to group medical
benefits under any medical benefit plan. On request of the Agent from time
to time, the Borrower will render to the Agent and the Lenders a statement
in reasonable detail as to all insurance coverage required by this Section
8.4. A description of the material elements of insurance coverage of the
Borrower and its Subsidiaries as of the date hereof is set forth on
Schedule 8.4.
Section 8.5. Records, Accounts and Places of Business. The Borrower and each
Subsidiary shall maintain comprehensive and accurate records and accounts
in accordance with generally accepted accounting principles consistently
applied. The Borrower and each Subsidiary shall maintain adequate and
proper reserves.
Section 8.6. Maintenance of Accounts. The Borrower shall maintain its primary
operating, concentration and disbursement accounts with the Agent.
Section 8.7. Consolidated Pre-Tax Net Income.
(a) For any fiscal quarter, the Borrower and its Subsidiaries shall maintain
Consolidated Pre-Tax Net Income of at least ($2,500,000).
(b) For any two consecutive fiscal quarters, the Borrower and its Subsidiaries
shall maintain the Consolidated Pre-Tax Net Income of at least
($1,000,000).
Section 8.8. Dissolution. Borrower shall dissolve Saucony SP Pty, Ltd., Hyde
International Services, Ltd. and QR Divestiture, Inc. by March 31, 2003,
provided, however, if such Subsidiaries are not dissolved by March 31,
2003, Borrower shall provide Agent with such information as Agent may
request in its reasonable discretion and cause such Subsidiaries to become
Guarantors and provide all fully executed documentation as Agent may
request, including, without limitation, all authority documents,
organizational documents, certificates, guaranties and opinions.
ARTICLE 9 - NEGATIVE COVENANTS
On and after the date hereof, until all of the Lender Obligations shall
have been paid in full and the Lenders shall have no commitments to make any
loans or advances to the Borrower hereunder, the Borrower covenants that neither
the Borrower nor any of its Subsidiaries will:
Section 9.1. Restrictions on Indebtedness. Create, incur, suffer or permit to
exist, or assume or guarantee, either directly or indirectly, or otherwise
become or remain liable with respect to, any Indebtedness, except the
following:
(a) Indebtedness outstanding at the date of this Agreement as set forth on
Schedule 5.16 but no refinancings thereof.
(b) Indebtedness on account of Consolidated Current Liabilities (other than for
money borrowed) incurred in the normal and ordinary course of business.
(c) Indebtedness in respect of (i) taxes, assessments, governmental charges or
levies and claims for labor, materials and supplies to the extent that
payment thereof shall not at the time be required to be made in accordance
with the provisions of Section 8.2 hereof, (ii) judgments or awards for an
amount in excess of $250,000 which have been in force for less than the
applicable appeal period so long as execution is not levied thereunder and
in respect of which the Borrower or any Subsidiary shall at the time in
good faith be prosecuting an appeal or proceedings for review in a manner
satisfactory to the Lenders and in respect of which a stay of execution
shall have been obtained pending such appeal or review and for which
adequate reserves have been established in accordance with generally
accepted accounting principles, and (iii) endorsements made in connection
with the deposit of items for credit or collection in the ordinary course
of business.
(d) Indebtedness in an amount not to exceed $2,000,000 in the aggregate with
respect to equipment financing, Capitalized Leases, and purchase money
security interests or as otherwise approved by the Agent.
(e) Indebtedness to the Lenders.
(f) Guarantees permitted under Section 9.5 hereof.
(g) Indebtedness between the Borrower and any Subsidiary Guarantor or between
Subsidiary Guarantors.
(h) In addition to the Indebtedness described in Section 9.1(a) through (g)
above, unsecured Indebtedness not to exceed $5,000,000.
Section 9.2. Restriction on Liens. Create or incur or suffer to be created or
incurred or to exist any encumbrance, mortgage, pledge, lien, charge or
other security interest of any kind upon any of its property or assets of
any character, whether now owned or hereafter acquired, or transfer any of
such property or assets for the purposes of subjecting the same to the
payment of Indebtedness or performance of any other obligation in priority
to payment of its general creditors, or acquire or agree or have an option
to acquire any property or assets upon conditional sale or other title
retention agreement, device or arrangement (including Capitalized Leases)
or suffer to exist for a period of more than 30 days after the same shall
have been incurred any Indebtedness against it which if unpaid might by law
or upon bankruptcy or insolvency, or otherwise, be given any priority
whatsoever over the claims of its general creditors, or sell, assign,
pledge or otherwise transfer for security any of its accounts, contract
rights, general intangibles, or chattel paper (as those terms are defined
in the UCC) with or without recourse; provided, however, that the Borrower
or any Subsidiary may create or incur or suffer to be created or incurred
or to exist: (a) Existing liens and security interests described in
Schedule 5.16.
(b) Purchase money security interests (which term shall include mortgages,
conditional sale contracts, Capitalized Leases in accordance with Section
9.1(d) hereof, and all other title retention or deferred purchase devices)
to secure the purchase price of property acquired hereafter by the Borrower
or a Subsidiary, or to secure Indebtedness incurred solely for the purpose
of financing such acquisitions; provided, however, that no such purchase
money security interests shall extend to or cover any property other than
the property the purchase price of which is secured by it, and that the
principal amount of Indebtedness (whether or not assumed) with respect to
each item of property subject to such a security interest shall not exceed
the fair value of such item on the date of its acquisition.
(c) Deposits or pledges made in connection with, or to secure payment of,
workmen's compensation, unemployment insurance, old age pensions or other
social security; liens in respect of judgments or awards to the extent such
judgments or awards are permitted as Indebtedness by the provisions of
Section 9.1(c); and liens for taxes, assessments or governmental charges or
levies and liens to secure claims for labor, material or supplies to the
extent that payment thereof shall not at the time be required to be made in
accordance with Section 8.2.
(d) Encumbrances in the nature of zoning restrictions, easements, and rights or
restrictions of record on the use of real property which do not materially
detract from the value of such property or materially impair its use in the
business of the owner or lessee.
(e) Liens (other than judgments and awards) created by or resulting from any
litigation or legal proceeding, provided the execution or other enforcement
thereof is effectively stayed and the claims secured thereby are being
actively contested in good faith by appropriate proceedings satisfactory to
the Agent.
(f) Liens arising by operation of law to secure landlords, lessors or renters
under leases or rental agreements made in the ordinary course of business
and confined to the premises or property rented.
(g) Liens in favor of the Agent for the benefit of the Lenders.
Nothing contained in this Section 9.2 shall permit the Borrower to incur
any Indebtedness or take any other action or permit to exist any other condition
which would be in contravention of any other provision of this Agreement.
Section 9.3. Investments. Have outstanding or hold or acquire or make or commit
itself to acquire or make any Investment except the following:
(a) Investments having a maturity of less than one year from the date thereof
by the Borrower in: (i) obligations of the Agent or any of the Lenders;
(ii) obligations of the United States of America or any agency or
instrumentality thereof; (iii) repurchase agreements involving securities
described in clauses (i) and (ii) with the Agent or any of the Lenders; and
(iv) commercial paper which is rated not less than prime-one or A-1 or
their equivalents by Xxxxx'x Investor Service, Inc. or Standard & Poor's
Corporation, respectively, or their successors.
(b) Investments resulting from mergers permitted under Section 9.6 hereto.
(c) Permitted Acquisitions financed with Permitted Acquisition Advances.
(d) Investments in Subsidiary Guarantors.
(e) Investments in Subsidiaries described on Schedule 5.4 hereto.
(f) Investments in State Street Bank and Trust Company money market accounts.
(g) Investments in mutual funds that invest in the Investments described in
Section 9.3(a)(ii) and (iv).
Section 9.4. Dispositions of Assets. Sell, lease or otherwise dispose of any
assets except for (i) the sale, lease or other disposition of inventory or
other property (not including receivables) in the ordinary course of
business or (ii) the sale or other disposition of obsolete assets no longer
used in the business of the Borrower or any Subsidiary.
Section 9.5. Assumptions, Guaranties, Etc. of Indebtedness of Other Persons.
Assume, guarantee, endorse or otherwise be or become directly or
contingently liable (including, without limitation, by way of agreement,
contingent or otherwise, to purchase, provide funds for payment, supply
funds to or otherwise invest in any Person or otherwise assure the
creditors of any such Person against loss) in connection with any
Indebtedness of any other Person, except (i) for Guaranties by endorsement
of negotiable instruments for deposit or collection or similar transactions
in the ordinary course of business and (ii) Guarantees from Borrower to The
Bank of Nova Scotia to secure up to Canadian $1,500,000 in principal amount
of Indebtedness of Saucony Canada, Inc.
Section 9.6. Mergers, Etc. Enter into any merger or consolidation with or
acquire all or substantially all of the assets of any Person, or sell,
assign, lease or otherwise 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 any Person, except that (a) any Subsidiary
may merge into the Borrower or any other Subsidiary, (b) the Borrower and
any Subsidiary may enter into a merger with or acquire all or substantially
all of the assets of another entity, provided that immediately after and
giving effect thereto, no event shall occur and be continuing which
constitutes or which, upon the passage of time or giving of notice or both
would constitute, a Default (including under Section 8.1 and including
under Article 7, assuming that the financial restrictions set forth in
Article 7 are applied immediately after and giving effect to such merger or
acquisition) and provided further that the Borrower or such Subsidiary is
the surviving corporation to any such merger and (c) the Borrower may enter
into Permitted Acquisitions.
Section 9.7. ERISA. At any time while the Borrower or any Subsidiary has a
Pension Plan, permit any accumulated funding deficiency to occur with
respect to any Pension Plan or other employee benefit plans established or
maintained by the Borrower or any Subsidiary or to which contributions are
made by the Borrower or any Subsidiary (the "Plans"), and which are subject
to Section 412 of the Internal Revenue Code, and at all times comply in all
material respects with the provisions of the Act and Code which are
applicable to the Plans.
Section 9.8. Distributions. Make any Distribution or make any other payment on
account of the purchase, acquisition, redemption, or other retirement of
any shares of stock, whether now or hereafter outstanding, other than (i)
repurchase or redemption of Borrower's capital stock not to exceed
$3,000,000 and (ii) any Subsidiary may make a Distribution to the Borrower.
Section 9.9. Sale and Leaseback. Sell or transfer any of its properties with the
intention of taking back a lease of the same property for substantially the
same use as the property being sold or transferred.
Section 9.10. Transactions with Affiliates. Enter into any transaction,
including, without limitation, the purchase, sale or exchange of property
or the rendering of any service, with any Affiliate, except that the
Borrower and its Subsidiaries (a) may pay salaries, fees and bonuses to its
directors, officers and employees as are usual and customary in the
Borrower's or its Subsidiaries' business, (b) may enter into transactions
permitted under Sections 9.1 and 9.3, and (c) may, in the ordinary course
of business, enter into other transactions with Affiliates on terms that
are no less favorable to the Borrower or any Subsidiary than those which
could be obtained at the time from Persons who are not Affiliates.
Section 9.11. Creation of Subsidiaries. Borrower shall not, without prior
written consent by Agent, create or cause the creation of any Subsidiary
other than those in existence at the Closing, unless such Subsidiary
becomes an additional guarantor ("Additional Guarantor") under the Guaranty
Agreements immediately upon the creation of such Subsidiary.
Section 9.12. Voluntary Payment. While any amount remains outstanding under the
Notes, Borrower shall not make any voluntary prepayments on any borrowed
money debt or Capitalized Lease, except under a Lender Agreement.
Section 9.13. Hyde International Services, Ltd. and Saucony SP Pty, Ltd. On and
after the date hereof, no assets or property of any kind or nature shall be
transferred from any of the Borrower or any Subsidiary to Hyde
International Services, Ltd., Saucony SP Pty, Ltd. or QR Divestiture, Inc.
ARTICLE 10 - EVENTS OF DEFAULT AND REMEDIES
Section 10.1. Events of Default. Each of the following events shall be deemed to
be Events of Default hereunder:
(a) The Borrower shall fail to make any payment in respect of (i) the principal
of any of the Lender Obligations as the same shall become due, whether at
the stated payment dates, required prepayment or by acceleration, demand or
otherwise, or (ii) interest or commitment fees on or in respect of any of
the Lender Obligations within five (5) days after the same shall become
due.
(b) The Borrower or any Subsidiary shall fail to perform or observe any of the
terms, covenants, conditions or provisions of Articles 6, 7, 8 or 9 hereof.
(c) The Borrower or any Subsidiary shall fail to perform or observe any other
term, covenant, condition or provision to be performed or observed by the
Borrower under this Agreement or any other Lender Agreement, and such
failure shall not be rectified or cured to the Agent's satisfaction within
thirty (30) days after the occurrence thereof.
(d) Any representation or warranty of the Borrower herein or in any other
Lender Agreement or any amendment to any thereof shall have been materially
false or misleading at the time made or intended to be effective.
(e) The Borrower shall fail to make any payment of principal of or interest on
Indebtedness for money borrowed by the Borrower or any Guaranty of money
borrowed, in either case an outstanding principal amount of not less than
$5,000,000, when such payment is due (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise) or shall fail to
perform or observe any provision of any agreement or instrument relating to
such Indebtedness, and such failure shall permit the holder thereof to
accelerate such Indebtedness.
(f) The Borrower or any Subsidiary shall be involved in financial difficulties
as evidenced:
(i) by its commencement of a voluntary case under Title 11 of the United
States Code as from time to time in effect, or by its authorizing, by
appropriate proceedings of its board of directors or other governing
body, the commencement of such a voluntary case;
(ii) by its filing an answer or other pleading admitting or failing to deny
the material allegations of a petition filed against it commencing an
involuntary case under said Title 11, or seeking, consenting to or
acquiescing in the relief therein provided, or by its failing to
controvert timely the material allegations of any such petition;
(iii)by the entry of an order for relief in any involuntary case commenced
under said Title 11;
(iv) by its seeking relief as a debtor under any applicable law, other than
said Title 11, of any jurisdiction relating to the liquidation or
reorganization of debtors or to the modification or alteration of the
rights of creditors, or by its consenting to or acquiescing in such
relief;
(v) by the entry of an order by a court of competent jurisdiction (1) by
finding it to be bankrupt or insolvent, (2) ordering or approving its
liquidation, reorganization or any modification or alteration of the
rights of its creditors, or (3) assuming custody of, or appointing a
receiver or other custodian for all or a substantial part of its
property and such order shall not be vacated or stayed on appeal or
otherwise stayed within 30 days;
(vi) by the filing of a petition against the Borrower or any Subsidiary
under said Title 11 which shall not be vacated within 30 days; or
(vii)by its making an assignment for the benefit of, or entering into a
composition with, its creditors, or appointing or consenting to the
appointment of a receiver or other custodian for all or a substantial
part of its property.
(g) There shall have occurred a judgment against the Borrower or any Subsidiary
in any court (i) for an amount in excess of $1,000,000, and from which no
appeal has been taken or with respect to which all appeal periods have
expired, unless such judgment is, to the Agent's satisfaction, insured
against in full, or (ii) which shall have a materially adverse effect upon
the assets, properties or condition, financial or otherwise, of the
Borrower.
(h) Any "Event of Default" under any other Lender Agreement shall have
occurred.
Section 10.2. Remedies. Upon the occurrence of an Event of Default, in each and
every case, the Agent may, and upon the request of the Required Lenders,
shall proceed to protect and enforce the rights of the Agent and the
Lenders by suit in equity, action at law and/or other appropriate
proceeding either for specific performance of any covenant or condition
contained in this Agreement or any other Lender Agreement or in any
instrument delivered to the Agent or the Lenders pursuant hereto or
thereto, or in aid of the exercise of any power granted in this Agreement,
any Lender Agreement or any such instrument, and (unless there shall have
occurred an Event of Default under Section 10.1(f), in which case the
unpaid balance of Lender Obligations shall automatically become due and
payable without notice or demand) by notice in writing to the Borrower
declare (a) the obligations of the Lenders to make Advances to be
terminated, whereupon such obligations shall be terminated, and (b) all or
any part of the unpaid balance of the Lender Obligations then outstanding
to be forthwith due and payable, whereupon such unpaid balance or part
thereof shall become so due and payable without presentation, protest or
further demand or notice of any kind, all of which are hereby expressly
waived, and the Agent may proceed to enforce payment of such balance or
part thereof in such manner as the Agent may elect, and the Agent and each
Lender may offset and apply toward the payment of such balance or part
thereof any Indebtedness of the Agent or any Lender to the Borrower or to
any Subsidiary, or to any obligor of the Lender Obligations, including any
Indebtedness represented by deposits in any general or (to the extent
permitted by applicable law) special account maintained with the Agent or
any Lender or with any other Person controlling, controlled by or under
common control with the Agent or any Lender.
Section 10.3. Distribution of Proceeds. Notwithstanding anything to the contrary
contained herein, in the event that following the occurrence or during the
continuance of any Event of Default, the Agent or any Lender receives any
monies on account of the Lender Obligations from the Borrower or otherwise,
such monies shall be distributed for application as follows:
(a) First, to the payment of or the reimbursement of, the Agent for or in
respect of all reasonable costs, expenses, disbursements and losses which
shall have been incurred or sustained by the Agent in connection with the
collection of such monies by the Agent, or in connection with the exercise,
protection or enforcement by the Agent of all or any of the rights,
remedies, powers and privileges of the Agent or the Lenders under this
Agreement or any other Lender Agreement;
(b) Second, to the payment of all interest, including interest on overdue
amounts, and late charges, then due and payable with respect to the Loans,
allocated among the Lenders in proportion to their respective Commitment
Percentages;
(c) Third, to the payment of the outstanding principal balance of the Loans,
allocated among the Lenders in proportion to their respective Commitment
Percentages;
(d) Fourth, to any other outstanding Lender Obligations, allocated among the
Lenders in proportion to their respective Commitment Percentages; and
(e) Fifth, the excess, if any, shall be returned to the Borrower or to such
other Persons as are entitled thereto.
ARTICLE 11 - CONSENTS; AMENDMENTS; WAIVERS; REMEDIES
Section 11.1. Actions by Lenders. Except as otherwise expressly set forth in any
particular provision of this Agreement, any consent or approval required or
permitted by this Agreement to be given by the Lenders, including without
limitation under Section 11.2, may be given, and any term of this Agreement
or of any other instrument related hereto or mentioned herein may be
amended, and the performance or observance by the Borrower of any term of
this Agreement may be waived (either generally or in a particular instance
and either retroactively or prospectively) with, but only with, the written
consent of the Borrower and the Required Lenders; provided, however, that
without the written consent of all Lenders:
(a) no reduction in the interest rates on or any fees relating to the Advances
shall be made;
(b) no extension or postponement shall be made of the stated time of payment of
the principal amount of, interest on, or fees payable to the Lenders
relating to the Advances;
(c) no increase in the Maximum Credit Amount, or extension of the Credit
Termination Date shall be made;
(d) no release of all or substantially all of the collateral security for the
Lender Obligations or of the obligations of any Guarantor under the
Guaranty Agreements shall be made;
(e) no change in the definition of the term "Required Lenders" shall be made;
and
(f) no change in the provisions of this Section 11.1 shall be made.
Section 11.2. Actions by Borrower. No delay or omission on the Agent's or the
Lenders' part in exercising their rights and remedies against the Borrower
or any other interested party shall constitute a waiver. A breach by the
Borrower of its obligations under this Agreement may be waived only by a
written waiver executed by the Agent and the Lenders in accordance with
Section 11.1. The Agent's and the Lenders' waiver of the Borrower's breach
in one or more instances shall not constitute or otherwise be an implicit
waiver of subsequent breaches. To the extent permitted by applicable law,
the Borrower hereby agrees to waive, and does hereby absolutely and
irrevocably waive (a) all presentments, demands for performance, notices of
protest and notices of dishonor in connection with any of the Indebtedness
evidenced by the Term Notes, (b) any requirement of diligence or promptness
on the Agent's or the Lenders' part in the enforcement of its rights under
the provisions of this Agreement or any Lender Agreement, and (c) except as
otherwise expressly provided herein, any and all notices of every kind and
description which may be required to be given by any statute or rule of law
with respect to its liability (i) under this Agreement or in respect of the
Indebtedness evidenced by the Notes or any other Lender Obligation or (ii)
under any other Lender Agreement. No course of dealing between the Borrower
and the Agent or the Lenders shall operate as a waiver of any of the
Agent's or the Lenders' rights under this Agreement or any Lender Agreement
or with respect to any of the Lender Obligations. This Agreement shall be
amended only by a written instrument executed by the Borrower, the Agent
and the Lenders (or Required Lenders) in accordance with Section 11.1
making explicit reference to this Agreement. The Agent's and the Lenders'
rights and remedies under this Agreement and under all subsequent
agreements between the Agent, the Lenders and the Borrower shall be
cumulative and any rights and remedies expressly set forth herein shall be
in addition to, and not in limitation of, any other rights and remedies
which may be applicable to the Agent and the Lenders in law or at equity.
ARTICLE 12 - SUCCESSORS AND ASSIGNS
Section 12.1. General. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors (which
shall include in the case of the Agent or any Lender any entity resulting
from a merger or consolidation) and assigns, except that (a) the Borrower
may not assign its rights or obligations under this Agreement, and (b) each
Lender may assign its rights in this Agreement only as set forth below in
this Article 12.
Section 12.2. Assignments.
(a) Assignments. In compliance with applicable laws with respect to such
assignment a Lender may assign to one or more financial institutions or
Persons (each a "Successor Lender") a proportionate part of its rights and
obligations in connection with this Agreement, its Note, and the related
Lender Agreements and each such Successor Lender shall assume such rights
and obligations pursuant to an Assignment and Acceptance Agreement
("Assignment and Acceptance Agreement") duly executed by such Successor
Lender and such assigning Lender and acknowledged and consented to by the
Agent, substantially in the form of Exhibit H attached hereto. If no Event
of Default has occurred and is continuing any assignment under this Section
(a) shall be (i) in a minimum amount of $2,000,000, (ii) upon five (5) days
notice to Borrower and (iii) only to an Eligible Assignee. In an Event of
Default has occurred and is continuing an assignment may be made to any
Eligible Assignee. In connection with any assignment under this Section
12.2(a) there shall be paid to the Agent by the assigning Lender or the
Successor Lender an administrative processing fee in the amount of $5,000;
provided, however, that no such administrative processing fee shall be paid
if the Lender or Successor Lender makes an assignment to an affiliate of
such Lender or Successor Lender.
(b) Assignment Procedures. In the event of an assignment in accordance with
Section 12.2(a), upon execution and delivery of such an assignment at least
five (5) Business Days prior to the proposed assignment date, and payment
by such Successor Lender to the assigning Lender of an amount equal to the
purchase price agreed between such assigning Lender and such Successor
Lender, such Successor Lender shall become party to this Agreement as a
signatory hereto and shall have all the rights and obligations of a Lender
under this Agreement and the other Lender Agreements with an interest
therein as set forth in such assignment, and such assignor making such
assignment shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by any party shall
be required. Upon the consummation of any such assignment, notice of such
assignment shall be given to the Borrower and the assigning Lender, the
Successor Lender and the Borrower shall make appropriate arrangements so
that, if required, a new Note is issued to the Successor Lender and a
replacement Note is issued to the assigning Lender in principal amounts
reflecting their respective revised interests.
(c) Register. The Agent shall maintain a register (the "Register") for the
recordation of (i) the names and addresses of all Successor Lenders that
enter into Assignment and Acceptance Agreements, (ii) the interests of each
Lender, and (iii) the amounts of the Advances owing to each Lender from
time to time. The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrower, the Agent and the Lenders may
treat each Person whose name is registered therein for all purposes as a
party to this Agreement. The Register shall be available for inspection by
the Borrower or any Lender at any reasonable time and from time to time
upon reasonable prior notice.
(d) Further Assurances. The Borrower shall sign such documents and take such
other actions from time to time reasonably requested by the Agent or a
Lender to enable any Successor Lender to share in the benefits and rights
created by the Lender Agreements.
(e) Assignments to Federal Reserve Bank. Any Lender at any time may assign all
or any portion of its rights under this Agreement and its Notes to a
Federal Reserve Bank. No such assignment shall release the transferor
Lender from its obligations hereunder.
Section 12.3. Participations. Any Lender may at any time grant or offer to grant
to one or more financial institutions ("Credit Participants") participating
interests in such Lender's rights and obligations in this Agreement, its
Notes and the related Lender Agreements, and each such Credit Participant
shall acquire such participation subject to the terms set forth below.
(a) Amount. Each such participation shall be in a minimum amount of at least
$2,000,000.
(b) Procedure. Each Lender granting such participation shall comply with all
applicable laws with respect to such transfer and shall remain responsible
for the performance of its obligations hereunder and under the other Lender
Agreements and shall retain the sole right and responsibility to exercise
its rights and to enforce the obligations of the Borrower hereunder and
under the other Lender Agreements, including the right to consent to any
amendment, modification or waiver of any provision of any Lender Agreement,
except for those matters referred to in Section 11.1 which require the
consent of all Lenders and which may also require the consent of each
Credit Participant.
(c) Dealing with Lenders. The Borrower shall continue to deal solely and
directly with the Lenders in connection with their rights and obligations
under this Agreement and the other Lender Agreements.
(d) Rights of Credit Participants. The Borrower agrees that each Credit
Participant shall, to the extent provided in its participation instrument,
be entitled to the benefits of Sections 2.7, 2.8, 2.9, 2.11, 2.12, and
14.5, and the setoff rights in Section 10.2 with respect to its
participating interest; provided, however, that no Credit Participant shall
be entitled to receive any greater payment under such Sections than the
Lender granting such participation would have been entitled to receive with
respect to the interests transferred.
(e) Notice. At the time of granting any participation, the Lender granting such
participation shall notify the Agent and the Borrower.
ARTICLE 13 - THE AGENT
Section 13.1. Authorization and Action. Each Lender hereby appoints and
authorizes the Agent to take such action on its behalf and to exercise such
powers under this Agreement and the other Lender Agreements as are
delegated to the Agent by the terms hereof and thereof, together with such
powers as are reasonably incidental thereto. As to any matters not
expressly provided for by this Agreement and the other Lender Agreements
(including, without limitation, enforcement or collection of the Notes),
the Agent shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall
be fully protected in so acting or refraining from acting) upon the
instructions of the Required Lenders, and such instructions shall be
binding upon all Lenders; provided, however, that the Agent shall not be
required to take any action which exposes the Agent to liability or which
is contrary to this Agreement or the other Lender Agreements or applicable
law. Subject to the foregoing provisions and to the other provisions of
this Article 13, the Agent shall, on behalf of the Lenders: (a) execute any
documents on behalf of the Lenders providing collateral for or guarantees
of the Lender Obligations; (b) hold and apply any collateral for the Lender
Obligations, and the proceeds thereof, at any time received by it, in
accordance with the provisions of this Agreement and the other Lender
Agreements; (c) exercise any and all rights, powers and remedies of the
Lenders under this Agreement or any of the other Lender Agreements,
including the giving of any consent or waiver or the entering into of any
amendment, subject to the provisions of Section 11.1; (d) at the direction
of the Lenders, execute, deliver and file UCC financing statements,
mortgages, deeds of trust, lease assignments and such other agreements in
respect of any collateral for the Lender Obligations, and possess
instruments included in the collateral on behalf of the Lenders; and (e) in
the event of acceleration of the Borrower's Indebtedness hereunder, act at
the direction of the Required Lenders to exercise the rights of the Lenders
hereunder and under the other Lender Agreements.
Section 13.2. Agent's Reliance, Etc. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Lenders for any action
taken or omitted to be taken by it or them under or in connection with this
Agreement or the other Lender Agreements, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of
the foregoing, the Agent: (a) may treat the payee of any Note as the holder
thereof until the Agent receives written notice of the assignment or
transfer thereof signed by such payee and in form required under Article 12
hereof; (b) may consult with legal counsel, independent public accountants
and other experts selected by it and shall not be liable for any action
taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (c) makes no warranty or
representations to any Lender and shall not be responsible to any Lender
for any statements, warranties or representations made in or in connection
with this Agreement or the other Lender Agreements; (d) shall not have any
duty to ascertain or to inquire as to the performance or observance of any
of the terms, covenants or conditions of this Agreement or the other Lender
Agreements on the part of the Borrower or any other Person or to inspect
the property (including the books and records) of the Borrower or any other
Person; (e) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of
this Agreement or the other Lender Agreements or any other instrument or
document furnished pursuant hereto or thereto; and (f) shall incur no
liability under or in respect of this Agreement or the other Lender
Agreements by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telecopy or telegram) believed by
the Agent to be genuine and signed or sent by the proper party or parties.
Section 13.3. Agent as a Lender. With respect to its interest in the Commitment
Percentage of the Advances hereunder, State Street Bank and Trust Company
shall have the same rights and powers under this Agreement and the other
Lender Agreements as any other Lender and may exercise the same as though
it were not the Agent; and the term "Lender" or "Lender(s)" shall, unless
otherwise expressly indicated, include State Street Bank and Trust Company
in its individual capacity. State Street Bank and Trust Company and its
affiliates may lend money to, and generally engage in any kind of business
with, the Borrower, any of the Borrower's Affiliates and any Person who may
do business with or own securities of the Borrower or any such Affiliate of
the Borrower, all as if State Street Bank and Trust Company were not the
Agent and without any duty to account therefor to the Lenders.
Section 13.4. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and
based on the financial statements referred to in Section 5.9 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement.
Section 13.5. Indemnification of Agent. Each Lender agrees to indemnify the
Agent and its directors, officers, employees and agents (to the extent that
the Agent is not reimbursed by the Borrower), ratably according to each
Lender's Commitment Percentage, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against the Agent or its directors,
officers, employees or agents in any way relating to or arising out of this
Agreement or any other Lender Agreement or any action taken or omitted by
the Agent in such capacity under this Agreement; provided that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agent's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender agrees to
reimburse the Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including counsel fees) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement and each other Lender Agreement, to
the extent that the Agent is not reimbursed for such expenses by the
Borrower.
Section 13.6. Successor Agent. Except as provided below, the Agent may resign at
any time by giving written notice thereof to the Lenders and the Borrower.
Upon any such resignation, the Lenders shall have the right to appoint a
successor Agent (the "Successor Agent") which, absent the existence of a
Default, shall be reasonably acceptable to the Borrower. If no Successor
Agent shall have been so appointed by the Lenders (other than the resigning
Agent), and shall have accepted such appointment, within thirty (30) days
after the retiring Agent's giving notice of resignation, then the retiring
Agent may, on behalf of the Lenders, appoint a Successor Agent which,
absent the existence of a Default, shall be reasonably acceptable to
Borrower, which shall be a commercial bank or financial institution
organized under the laws of the United States of America or of any state
thereof and having a combined capital and surplus of at least $50,000,000.
Upon the acceptance of any appointment as Agent hereunder by a Successor
Agent, such Successor Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
under this Agreement and the other Lender Agreements. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Article 13
shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Agent under this Agreement and the other Lender
Agreements.
Section 13.7. Amendment of Article 13. The Borrower hereby agrees that the
foregoing provisions of this Article 13 constitute an agreement among the
Agent and the Lenders (and the Agent and the Lenders acknowledge that
except for the provisions of Section 13.6, the Borrower is not a party to
or bound by such foregoing provisions) and that any and all of the
provisions of this Article 13, with the exception of the reasonable
approval of Borrower as may be required under Section 13.6 hereto, may be
amended at any time by the Lenders without the consent or approval of, or
notice to, the Borrower (other than the requirement of notice to the
Borrower of the resignation of the Agent and the appointment of a successor
Agent).
ARTICLE 14 - MISCELLANEOUS
Section 14.1. Notices. All notices and other communications made or required to
be given pursuant to this Agreement shall be in writing and shall be mailed
by United States mail, postage prepaid, or sent by hand, by telecopy or by
nationally-recognized overnight carrier service, addressed as follows:
(a) If to the Agent, at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, Attention:
Xxxx Xxxxxxx, with a copy to Xxxxxxx Procter LLP, Xxxxxxxx Xxxxx, Xxxxxx,
XX 00000, Telecopier No. 000-000-0000, Attention: Xxxxxx X. Xxxxx, P.C. or
at such other address(es) or to the attention of such other Person(s) as
the Agent shall from time to time designate in writing to the Borrower and
the Lenders.
(b) If to the Borrower, at 00 Xxxxxxxxxx Xxxxx, Xxxxxxx, XX 00000, Telecopier
No. 000-000-0000, Attention: Chief Financial Officer, with a copy to Xxxx
and Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx, XX 00000, Telecopier No.
617-526-5000, Attn: Xxxx Xxxxx, Esquire, or at such other address(es) or to
the attention of such other Person(s) as the Borrower shall from time to
time designate in writing to the Agent and the Lenders.
(c) If to any Lender, at the address(es) and to the attention of the Person(s)
specified below such Lender's name on the execution page of this Agreement
(or in the case of a Successor Lender, at the address(es) and to the
attention of the Person(s) specified in the Assignment and Acceptance
Agreement executed by such Successor Lender), or at such other address(es)
and to the attention of such other Person(s) as any Lender shall from time
to time designate in writing to the Agent and the Borrower.
Any notice so addressed and mailed by registered or certified mail shall be
deemed to have been given two (2) days after being deposited in the mail. Any
notice so addressed and sent by hand, by telecopy or by overnight carrier
service shall be deemed to have been given when received.
A notice from the Agent stating that it has been given on behalf of the
Lenders shall be relied upon by the Borrower as having been given by the
Lenders.
Section 14.2. Merger. This Agreement and the other Lender Agreements and
documents contemplated hereby constitute the entire agreement of the
Borrower and the Agent and the Lenders and express their entire
understanding with respect to credit advanced or to be advanced by the
Lenders to the Borrower.
Section 14.3. Governing Law; Consent to Jurisdiction. This Agreement shall be
governed by and construed and enforced under the laws of The Commonwealth
of Massachusetts. The Borrower and each Subsidiary hereby irrevocably
submits itself to the non-exclusive jurisdiction of the courts of The
Commonwealth of Massachusetts and to the non-exclusive jurisdiction of any
Federal court of the United States located in the District of Massachusetts
for the purpose of any suit, action or other proceeding arising out of this
Agreement or any other Lender Agreement or any of the transactions
contemplated hereby or thereby.
Section 14.4. Counterparts. This Agreement and all amendments to this Agreement
may be executed in several counterparts, each of which shall be an
original. The several counterparts shall constitute a single Agreement.
Section 14.5. Expenses and Indemnification.
(a) The Borrower agrees to pay, on demand, all of the Agent's reasonable
expenses in preparing, executing, delivering and administering (excluding
overhead) this Agreement, the Lender Agreements and all related instruments
and documents, including, without limitation, the reasonable fees and
out-of-pocket expenses of the Agent's special counsel, Xxxxxxx Procter LLP,
and, the Agent's and Lenders' expenses in connection with periodic audits
of the Borrower. The Borrower also agrees to pay, on demand, all reasonable
out-of-pocket expenses incurred by the Agent and the Lenders, including,
without limitation, reasonable legal and accounting fees, in connection
with the collection of amounts due hereunder and under all other Lender
Agreements upon the occurrence of an Event of Default hereunder, the
revision, protection or enforcement of any of the Agent's or the Lenders'
rights against the Borrower under this Agreement, the Notes and all other
Lender Agreements and the administration of special problems that may arise
under this Agreement or any other Lender Agreement. The Borrower also
agrees to pay all stamp and other taxes in connection with the execution
and delivery of this Agreement and related instruments and documents.
(b) Without limitation of any other obligation or liability of the Borrower or
right or remedy of the Agent or the Lenders contained herein, the Borrower
hereby covenants and agrees to indemnify and hold the Agent, the Lenders,
and the directors, officers, subsidiaries, shareholders, agents, affiliates
and Persons controlling the Agent and the Lenders, harmless from and
against any and all damages, losses, settlement payments, obligations,
liabilities, claims, including, without limitation, claims for finder's or
broker's fees, actions or causes of action, and reasonable costs and
expenses incurred, suffered, sustained or required to be paid by any such
indemnified party in each case by reason of or resulting from any claim
relating to the transactions contemplated hereby, other than any such
claims which are determined by a final, non-appealable judgment or order of
a court of competent jurisdiction to be the result of the gross negligence
or willful misconduct of such indemnified party. Promptly upon receipt by
any indemnified party hereunder of notice of the commencement of any action
against such indemnified party for which a claim is to be made against the
Borrower hereunder, such indemnified party shall notify the Borrower in
writing of the commencement thereof, although the failure to provide such
notice shall not affect the indemnification rights of any such indemnified
party hereunder. The Borrower shall have the right, at its option upon
notice to the indemnified parties, to defend any such matter at its own
expense and with its own counsel, except as provided below, which counsel
must be reasonably acceptable to the indemnified parties. The indemnified
party shall cooperate with the Borrower in the defense of such matter. The
indemnified party shall have the right to employ separate counsel and to
participate in the defense of such matter at its own expense. In the event
that (a) the employment of separate counsel by an indemnified party has
been authorized in writing by the Borrower, (b) the Borrower has failed to
assume the defense of such matter within thirty (30) days of notice thereof
from the indemnified party, or (c) the named parties to any such action
(including impleaded parties) include any indemnified party who has been
advised by counsel that there may be one or more legal defenses available
to it or prospective bases for liability against it, which are different
from those available to or against the Borrower, then the Borrower shall
not have the right to assume the defense of such matter with respect to
such indemnified party. The Borrower shall not compromise or settle any
such matter against an indemnified party without the written consent of the
indemnified party, which consent may not be unreasonably withheld or
delayed.
Section 14.6. Confidentiality. The Agent and the Lenders agree to keep in
confidence all financial data and other information relative to the affairs
of the Borrower and its Subsidiaries heretofore furnished or which may
hereafter be furnished to them pursuant to the provisions of this
Agreement; provided, however, that this Section 14.6 shall not be
applicable to information otherwise disseminated to the public by the
Borrower or any of its Affiliates; and provided further, however, that such
obligation of the Agent and the Lenders shall be subject to the Agent's or
the Lenders', as the case may be, (a) obligation to disclose such
information pursuant to a request or order under applicable laws and
regulations or pursuant to a subpoena or other legal process, (b) right to
disclose any such information to bank examiners, affiliates, auditors,
accountants and counsel who agree to keep such information confidential,
and (c) right to disclose any such information (i) in connection with the
transactions set forth herein including assignments or the sale of
participation interests pursuant to Article 12, so long as such potential
assignees or participants shall agree in writing to be bound by the terms
of this Section 14.6, or (ii) in connection with any litigation or dispute
involving the Agent or any transfer or other disposition by the Agent or
the Lenders, as the case may be, of any of the Lender Obligations; provided
that information disclosed pursuant to this provision shall be so disclosed
subject to such procedures as are reasonably calculated to maintain the
confidentiality thereof.
Section 14.7. WAIVER OF JURY TRIAL. THE AGENT, THE LENDERS AND THE BORROWER
AGREE THAT NONE OF THEM NOR ANY ASSIGNEE OR SUCCESSOR SHALL (A) SEEK A JURY
TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER ACTION
BASEDUPON OR ARISING OUT OF, THIS AGREEMENT, NOTES, ANY LENDER AGREEMENT,
ANY RELATED INSTRUMENTS, ANY COLLATERAL OR THE DEALINGS OR THE RELATIONSHIP
BETWEEN OR AMONG ANY OF THEM, OR (B) SEEK TO CONSOLIDATE ANY SUCH ACTION
WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN
WAIVED. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY EACH
OF THE AGENT, THE LENDERS AND THE BORROWER WITH THEIR RESPECTIVE COUNSEL,
AND THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NONE OF THE AGENT,
THE LENDERS OR THE BORROWER HAS AGREED WITH OR REPRESENTED TO ANY OTHER
PARTY THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN
ALL INSTANCES.
IN WITNESS WHEREOF, the Borrower, the Agent and the Lenders have caused
this Credit Agreement to be executed by their duly authorized officers as of the
date set forth above.
SAUCONY, INC.
By:/s/ Xxxxxxx Xxxxx
---------------------
Name: Xxxxxxx Xxxxx
Title: Chief Operating Officer/Chief Financial Officer
STATE STREET BANK AND TRUST COMPANY, as Agent and Lender
By:/s/ Xxxx Xxxxxxx
-------------------
Name: Xxxx Xxxxxxx
Title: Vice President
SCHEDULE 1
Commitment Percentages
Lender Commitment Percentage Commitment Amount
State Street Bank 100.00% $ 15,000,000
and Trust Company
TOTALS 100.00% $ 15,000,000
