Exhibit 10.3
EXECUTION COPY
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$35,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of April 28, 2005
among
WOLVERINE TUBE, INC.,
and
Certain of its Subsidiaries,
as Borrowers
EACH OF THE FINANCIAL INSTITUTIONS
INITIALLY A SIGNATORY HERETO,
TOGETHER WITH THOSE ASSIGNEES
PURSUANT TO SECTION 14.3 HEREOF,
as Lenders,
and
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent
================================================================================
WACHOVIA CAPITAL MARKETS, LLC,
as Sole Lead Arranger and Book Manager
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS............................... 1
1.1 General Definitions........................................... 1
1.2 Accounting Terms.............................................. 25
1.3 Other Definitional Provisions................................. 26
ARTICLE II THE REVOLVING LOANS........................................... 26
2.1 Revolving Loans............................................... 26
2.2 Letter of Credit Subfacility.................................. 27
2.3 [Intentionally Omitted]....................................... 32
2.4 [Intentionally Omitted]....................................... 32
2.5 [Intentionally Omitted]....................................... 32
2.6 Minimum Amounts of Loans...................................... 32
2.7 Funding of Loans to Borrowers................................. 32
2.8 Term.......................................................... 35
2.9 Revolving Notes............................................... 35
2.10 Reduction of Revolving Loan Commitment........................ 36
ARTICLE III CASH DOMINION ARRANGEMENTS................................... 36
3.1 Lockbox Arrangements.......................................... 36
3.2 [Intentionally Omitted]....................................... 37
3.3 Maintenance of Account........................................ 37
3.4 Statement of Account.......................................... 38
ARTICLE IV ADDITIONAL PROVISIONS REGARDING LOANS AND
LETTERS OF CREDIT.......................................... 38
4.1 Continuations and Conversions................................. 38
4.2 Interest...................................................... 39
4.3 Place and Manner of Payments.................................. 39
4.4 Prepayments................................................... 40
4.5 Fees.......................................................... 41
4.6 Pro Rata Treatment............................................ 42
4.7 Allocation of Payments After Event of Default................. 43
4.8 Sharing of Payments........................................... 44
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(continued)
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4.9 Capital Adequacy.............................................. 45
4.10 Inability To Determine Interest Rate.......................... 45
4.11 Illegality.................................................... 46
4.12 Requirements of Law........................................... 46
4.13 Taxes......................................................... 47
4.14 Compensation.................................................. 50
ARTICLE V CONDITIONS PRECEDENT........................................... 50
5.1 Closing Conditions............................................ 50
5.2 Conditions to All Extensions of Credit........................ 54
ARTICLE VI REPRESENTATIONS AND WARRANTIES................................ 55
6.1 Organization and Good Standing................................ 56
6.2 Due Authorization............................................. 56
6.3 No Conflicts.................................................. 56
6.4 Consents...................................................... 56
6.5 Enforceable Obligations....................................... 56
6.6 Financial Condition........................................... 57
6.7 No Default.................................................... 57
6.8 Liens......................................................... 57
6.9 Indebtedness.................................................. 58
6.10 Litigation.................................................... 58
6.11 Material Contracts............................................ 58
6.12 Taxes......................................................... 58
6.13 Compliance with Law........................................... 58
6.14 ERISA......................................................... 59
6.15 Subsidiaries.................................................. 60
6.16 Use of Proceeds; Margin Stock................................. 60
6.17 Government Regulation......................................... 60
6.18 Hazardous Substances.......................................... 61
6.19 Patents, Franchises, etc...................................... 61
6.20 Solvency...................................................... 61
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TABLE OF CONTENTS
(continued)
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6.21 Location of Assets............................................ 61
6.22 D/B/A or Trade Names.......................................... 62
6.23 No Employee Disputes.......................................... 62
6.24 Brokers' Fees................................................. 62
6.25 Labor Matters................................................. 62
6.26 Status of Accounts............................................ 63
6.27 [Intentionally Omitted]....................................... 63
6.28 Key Members of Management..................................... 63
6.29 Accuracy and Completeness of Information...................... 63
6.30 Compliance with OFAC Rules and Regulations.................... 64
6.31 Anti-Terrorism Laws........................................... 64
ARTICLE VII AFFIRMATIVE COVENANTS........................................ 64
7.1 Information Covenants......................................... 64
7.2 Preservation of Existence and Franchises...................... 67
7.3 Books and Records............................................. 67
7.4 Compliance with Law........................................... 67
7.5 Payment of Taxes and Other Indebtedness....................... 67
7.6 Insurance; Casualty Loss...................................... 68
7.7 Maintenance of Property....................................... 69
7.8 Performance of Obligations.................................... 69
7.9 ERISA......................................................... 69
7.10 Use of Proceeds............................................... 70
7.11 Additional Subsidiaries....................................... 70
7.12 Audits/Inspections............................................ 70
7.13 Inventory..................................................... 71
7.14 Collateral Records............................................ 71
7.15 Security Interests............................................ 71
7.16 Schedules of Accounts and Purchase Orders..................... 72
7.17 Collection of Accounts........................................ 72
7.18 Notice; Credit Memoranda; and Returned Goods.................. 73
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TABLE OF CONTENTS
(continued)
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7.19 Acknowledgment Agreements..................................... 73
7.20 Trademarks.................................................... 73
7.21 SPC Matters................................................... 73
ARTICLE VIII FINANCIAL COVENANTS......................................... 74
8.1 Fixed Charge Coverage Ratio................................... 74
8.2 Capital Expenditures.......................................... 74
8.3 Minimum Consolidated EBITDA................................... 74
8.4 Minimum Excess Availability................................... 75
ARTICLE IX NEGATIVE COVENANTS............................................ 75
9.1 Indebtedness.................................................. 75
9.2 Liens......................................................... 76
9.3 Nature of Business............................................ 77
9.4 Consolidation or Merger....................................... 77
9.5 Sale or Lease of Assets....................................... 77
9.6 Acquisitions.................................................. 77
9.7 Transactions with Affiliates.................................. 77
9.8 Ownership of Subsidiaries..................................... 78
9.9 Fiscal Year................................................... 78
9.10 Investments................................................... 78
9.11 Restricted Payments........................................... 78
9.12 No Additional Bank Accounts................................... 78
9.13 Amendments of Organizational Documents, Etc................... 79
9.14 Additional Negative Pledges................................... 79
9.15 Other Indebtedness............................................ 79
9.16 Licenses, Etc................................................. 80
9.17 Limitations................................................... 80
ARTICLE X POWERS......................................................... 80
10.1 Appointment of Administrative Agent as Attorney-in-Fact....... 80
10.2 Limitation on Exercise of Power............................... 81
ARTICLE XI EVENTS OF DEFAULT AND REMEDIES................................ 81
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TABLE OF CONTENTS
(continued)
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11.1 Events of Default............................................. 81
11.2 Acceleration; Remedies........................................ 83
ARTICLE XII TERMINATION.................................................. 84
ARTICLE XIII THE AGENT................................................... 84
13.1 Appointment................................................... 84
13.2 Delegation of Duties.......................................... 85
13.3 Exculpatory Provisions........................................ 85
13.4 Reliance on Communications.................................... 86
13.5 Notice of Default............................................. 86
13.6 Non-Reliance on Agent and Other Lenders....................... 86
13.7 Indemnification............................................... 87
13.8 Agent in its Individual Capacity.............................. 87
13.9 Successor Agent............................................... 87
13.10 Collateral Matters............................................ 88
13.11 Rights and Remedies to be Exercised by Agent Only............. 89
ARTICLE XIV MISCELLANEOUS................................................ 89
14.1 Notices....................................................... 89
14.2 Right of Set-Off.............................................. 90
14.3 Benefit of Agreement.......................................... 90
14.4 No Waiver; Remedies Cumulative................................ 92
14.5 Payment of Expenses; Indemnification.......................... 92
14.6 Amendments, Waivers and Consents.............................. 93
14.7 Defaulting Lender............................................. 94
14.8 Counterparts.................................................. 94
14.9 Headings...................................................... 94
14.10 Survival of Indemnification and Representations
and Warranties............................................. 94
14.11 Currency...................................................... 95
14.12 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.............. 95
14.13 Arbitration................................................... 96
14.14 Waiver of Jury Trial.......................................... 97
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(continued)
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14.15 Severability.................................................. 97
14.16 Loan Entirety................................................. 97
14.17 Binding Effect; Amendment and Restatement of Existing
Credit Agreement; Further Assurances....................... 97
14.18 Confidentiality............................................... 98
14.19 Judgment Currency............................................. 98
14.20 Maximum Rate.................................................. 99
14.21 Concerning Joint and Several Liability of the Borrowers....... 99
14.22 Nonliability of Agents and Lenders............................ 102
14.23 Independent Nature of Lenders' Rights......................... 102
14.24 Power of Attorney............................................. 102
14.25 Patriot Act Notice............................................ 102
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EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A Form of Acknowledgment Agreement
Exhibit B Form of Landlord Agreement
Exhibit C Form of Notice of Borrowing/Continuation/Conversion
Exhibit D Form of Revolving Credit Note
Exhibit E-1 Form of Security Agreement
Exhibit E-2 Form of Pledge Agreement
Exhibit F-1 Form of Lockbox Agreement
Exhibit F-2 Form of Blocked Account Agreement
Exhibit G Form of Borrowing Base Certificate
Exhibit H Form of Solvency Certificate
Exhibit I Form of Compliance Certificate
Exhibit J Form of Assignment and Acceptance
Exhibit K Form of Joinder Agreement
Exhibit L Adjustments to Consolidated Net Income
SCHEDULES
Schedule 1.1A Lenders and Commitments
Schedule 1.1B Investments
Schedule 1.1C Liens
Schedule 1.1D Existing Letters of Credit
Schedule 5.1(m) Corporate Structure
Schedule 6.1 Jurisdictions of Organization
Schedule 6.2 Authorization
Schedule 6.9 Indebtedness
Schedule 6.10 Litigation
Schedule 6.15 Subsidiaries
Schedule 6.18 Hazardous Substances
Schedule 6.21 Collateral Locations
Schedule 6.22 Fictitious Business Names
Schedule 6.28 Key Members of Management
Schedule 7.6 Insurance
Schedule 9.5 Permitted Asset Dispositions
Schedule 9.12 Bank Accounts
Schedule 14.1 Addresses for Notices
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AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of April 28,
2005, among WOLVERINE TUBE, INC., a Delaware corporation (the "Company"), its
Subsidiaries identified as Subsidiary Borrowers on the signature pages hereto
and any additional Subsidiaries of the Company which become parties hereto in
accordance with the terms hereof (collectively referred to as the "Subsidiary
Borrowers" or individually referred to as a "Subsidiary Borrower") (hereinafter,
the Company and the Subsidiary Borrowers are collectively referred to as the
"Borrowers" or individually referred to as a "Borrower"), each of the financial
institutions identified as Lenders on Schedule 1.1A hereto (together with each
of their successors and assigns, referred to individually as a "Lender" and,
collectively, as the "Lenders"), and WACHOVIA BANK, NATIONAL ASSOCIATION
("Wachovia"), acting in the manner and to the extent described in Article XIII
hereof (in such capacity, the "Agent" or the "Administrative Agent").
WITNESSETH:
WHEREAS, the Borrowers, certain lenders and the Administrative Agent have
entered into that certain Credit Agreement dated as of March 27, 2002 (together
with all amendments thereto, the "Existing Credit Agreement") and have requested
that the Existing Credit Agreement be amended and restated; and
WHEREAS, the Lenders have agreed to amend and restate the Existing Credit
Agreement on the terms and conditions contained herein and hereby acknowledge
and agree that the Canadian Borrowers and the Canadian Agent under the Existing
Credit Agreement are hereby released from their respective duties and
obligations hereunder and under the other Credit Documents and shall no longer
be parties to this Credit Agreement or any other Credit Documents.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Borrowers, the Lenders and the
Administrative Agent agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1 GENERAL DEFINITIONS
As used herein, the following terms shall have the meanings herein
specified:
"Accounts" means all of each Credit Party's "accounts" (as defined in the
UCC), whether now existing or existing in the future, and shall include (whether
or not otherwise included in such definitions, and without limiting the
generality thereof), all (i) accounts receivable (whether or not specifically
listed on schedules furnished to the Administrative Agent), including, without
limitation, all accounts created by or arising from all of each Credit Party's
sales of goods or rendition of services made under any of each Credit Party's
trade names or styles, or through any
of each Credit Party's divisions; (ii) unpaid seller's rights (including
rescission, replevin, reclamation and stopping in transit) relating to the
foregoing or arising therefrom, (iii) rights to any goods represented by any of
the foregoing, including returned or repossessed goods; (iv) reserves and credit
balances held by each Credit Party with respect to any such accounts receivable
or account debtors; (v) guarantees or collateral for any of the foregoing; and
(vi) insurance policies or rights relating to any of the foregoing.
"Acknowledgment Agreements" means (i) the acknowledgment agreements,
substantially in the form of Exhibit A hereto, between each Credit Party's
warehousemen, fillers, packers, processors and mortgagees and the Administrative
Agent, in each case acknowledging and agreeing, among other things, (A) that
such warehousemen, fillers, packers, processors and mortgagees waive any Liens
on any of the Collateral of any Credit Party and (B) to the collateral
assignment by each Credit Party to the Administrative Agent of each such Credit
Party's interest in the contracts with each of such warehousemen, fillers,
packers, processors and mortgagees and (ii) Landlord Agreements.
"Acquired Company" means any Person (or assets thereof) which is acquired
pursuant to an Acquisition.
"Acquisition" means the acquisition of (a) all of the capital stock of
another Person or (b) all or substantially all of the assets of another Person.
"Adjusted Eurodollar Rate" means the Eurodollar Rate, plus the Applicable
Percentage.
"Administrative Agent" means Wachovia Bank, National Association.
"Administrative Agent Fee Letter" means the letter agreement, dated as of
March 30, 2005, among the Company and Wachovia Bank, National Association, as
amended, modified and replaced from time to time.
"Affiliate" of any Person means any other Person directly or indirectly
controlling (including but not limited to all directors and officers of such
Person), controlled by or under direct or indirect common control with such
Person. A Person shall be deemed to control a corporation if such Person
possesses, directly or indirectly, the power (a) to vote fifteen percent (15%)
or more of the securities having ordinary voting power for the election of
directors of such corporation or (b) to direct or cause direction of the
management and policies of such corporation, whether through the ownership of
voting securities, by contract or otherwise.
"Anti-Terrorism Laws" means such term as defined in Section 6.31.
"Applicable Percentage" shall mean, for any day, the rate per annum set
forth below opposite the applicable Level then in effect, it being understood
that the Applicable Percentage for (i) Base Rate Loans shall be the percentage
set forth under the column "Base Rate Margin", (ii) Eurodollar Loans, LMIR Loans
and Letter of Credit Fees shall be the percentage set forth under the column
"Eurodollar Rate Margin; LMIR Margin; Letter of Credit Fee" and (iii) the Unused
Fees shall be the percentage set forth under the column "Unused Fee":
2
Eurodollar Rate
Margin; LMIR
Fixed Charge Margin; Letter of
Level Coverage Ratio Base Rate Margin Credit Fee Unused Fee
----- ---------------------- ---------------- ----------------- ----------
I > or = 1.45 to 1.0 0.00% 1.75% 0.25%
II > or = 1.30 to 1.0 but 0.00% 2.00% 0.35%
< 1.45 to 1.0
III > or = 1.15 to 1.0 but 0.00% 2.25% 0.50%
< 1.30 to 1.0
IV > or = 1.00 to 1.0 but 0.00% 2.50% 0.50%
< 1.15 to 1.0
V < 1.0 to 1.0 0.50 3.00% 0.50%
The Applicable Percentage shall, in each case, be determined and adjusted
quarterly on the first day of the first month immediately following the date on
which the Administrative Agent has received from the Borrowers the quarterly
company-prepared financial information (for each fiscal quarter of the
Consolidated Parties), annual financial information (in the case of the fourth
fiscal quarter of the Consolidated Parties) and certifications required to be
delivered to the Administrative Agent and the Lenders in accordance with the
provisions of Sections 7.1(a), 7.1(b) and 7.1(d) (each an "Interest
Determination Date"). Such Applicable Percentage shall be effective from such
Interest Determination Date until the next such Interest Determination Date. If
the Borrowers shall fail to provide the quarterly financial information and
certifications in accordance with the provisions of Sections 7.1(a), 7.1(b) and
7.1(d), the Applicable Percentage shall, on the date five (5) Business Days
after the date by which the Borrowers were so required to provide such financial
information and certifications to the Administrative Agent and the Lenders, be
based on Level IV until such time as such information and certifications are
provided, whereupon the Level shall be determined by the then current Fixed
Charge Coverage Ratio. Notwithstanding the foregoing, the Applicable Percentage
commencing on April 28, 2005 shall be based on the Fixed Charge Coverage Ratio
as set forth in the officer's certificate delivered pursuant to Section 7.1(d)
with respect to the fiscal year ending December 31, 2004.
"Asset Disposition" means the disposition of any or all of the Accounts or
Inventory of a Credit Party whether by sale, lease, transfer or otherwise, other
than (a) sales of Inventory in the ordinary course of business and (b) transfers
of Accounts or Inventory among the Credit Parties.
"Bankruptcy Event" means, with respect to any Person, the occurrence of any
of the following with respect to such Person: (a) a court or governmental agency
having jurisdiction in the premises shall enter a decree or order for relief in
respect of such Person in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its property or ordering
the winding up or liquidation of its affairs; or (b) any proceeding shall be
instituted against such Person seeking to adjudicate it as bankrupt or
insolvent, or seeking liquidation, winding-up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of
3
a receiver, trustee, or other similar official for it or for any substantial
part of its property including, but not limited to, an involuntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter in
effect is commenced against a Person and any such proceeding or petition remains
unstayed and in effect for a period of sixty (60) consecutive days; or (c) such
Person shall commence a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or consent to the
entry of an order for relief in an involuntary case under any such law, or
consent to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of such Person
or any substantial part of its property or make any general assignment for the
benefit of creditors; or (d) such Person shall generally not pay its debts as
such debts become due or shall admit in writing its inability to pay its debts
generally as they become due or any action shall be taken by such Person in
furtherance of any of the aforesaid purposes.
"BAPM" has the meaning set forth in the definition of Consignment Agreement
herein.
"Base Rate" shall mean, for any day, the rate per annum (rounded upwards,
if necessary, to the nearest whole multiple of 1/100 of 1%) equal to the greater
of (a) the Federal Funds Rate in effect on such day plus 1/2 of 1% or (b) the
Prime Rate in effect on such day. If for any reason the Agent shall have
determined (which determination shall be conclusive absent manifest error) that
it is unable after due inquiry to ascertain the Federal Funds Rate for any
reason, including the inability or failure of the Agent to obtain sufficient
quotations in accordance with the terms hereof, the Base Rate shall be
determined without regard to clause (a) of the first sentence of this definition
until the circumstances giving rise to such inability no longer exist. Any
change in the Base Rate due to a change in the Prime Rate or the Federal Funds
Rate shall be effective on the effective date of such change in the Prime Rate
or the Federal Funds Rate, respectively.
"Base Rate Loans" means all Loans accruing interest based on the Base Rate.
"Blocked Account Agreement" means a three party agreement among the
Administrative Agent, the applicable depository bank and a Credit Party in the
form of Exhibit F-2 hereto.
"Borrowers" means Wolverine Tube, Inc., TF Investor, Inc., Tube Forming
Holdings, Inc., Tube Forming, L.P., Wolverine Finance, LLC, Small Tube
Manufacturing, LLC, Wolverine China Investments, LLC, Wolverine Joining
Technologies, LLC, and WT Holding Company, Inc. and such other Persons organized
under the laws of, and resident in, the United States that become parties hereto
pursuant to a Joinder Agreement in accordance with Section 7.11.
"Borrowing Base" means a dollar amount equal to the sum of (a) up to 85% of
Eligible Accounts Receivable of the Credit Parties, plus (b) the sum of (i) up
to 60% of Eligible Inventory of all Credit Parties other than Wolverine Joining
Technologies, LLC consisting of raw materials and finished goods inventory and
(ii) the lesser of (A) $3,000,000 or (B) up to 60% of Eligible Inventory of
Wolverine Joining Technologies, LLC consisting of raw materials and finished
goods inventory minus, (c) reserves established from time to time by the
Administrative Agent in its sole discretion.
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"Borrowing Base Certificate" means such term as defined in Section 7.1(i).
"Business Day" means any day other than a Saturday, a Sunday, a legal
holiday in Charlotte, North Carolina, Atlanta, Georgia, or New York, New York or
a day on which banking institutions located in Charlotte, North Carolina,
Atlanta, Georgia, or New York, New York are authorized by law or other
governmental actions to close; except that in the case of Eurodollar Loans and
LMIR Loans, a Business Day shall also be a day on which dealings between banks
are carried on in U.S. dollar deposits in the London interbank Eurodollar
market.
"Capital Expenditures" means any current expenditure by the Consolidated
Parties for fixed or capital assets as reflected on the financial statements of
the Consolidated Parties, as prepared in accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, capital stock, (ii)
in the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of capital
stock, (iii) in the case of a partnership, partnership interests (whether
general or limited), (iv) in the case of a limited liability company, membership
interests and (v) any other equity interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"Cash Equivalents" means (a) securities issued directly or fully guaranteed
or insured by the United States of America or any agency or instrumentality
thereof (provided that the full faith and credit of the United States of America
is pledged in support thereof) having maturities of not more than one year from
the date of acquisition, (b) U.S. dollar denominated time deposits and
certificates of deposit of (i) any U.S. commercial bank of recognized standing
having capital and surplus in excess of $100,000,000 or (ii) any bank whose
short-term commercial paper rating from Standard & Poor's Corporation ("S&P") is
at least A-1 or the equivalent thereof or from Xxxxx'x Investors Service, Inc.
("Xxxxx'x") is at least P-1 or the equivalent thereof (any such bank being an
"Approved Bank"), in each case with maturities of not more than one year from
the date of acquisition, (c) commercial paper and variable or fixed rate notes
issued by any Approved Bank (or by the parent company thereof) or any variable
rate notes issued by, or guaranteed by, any U.S. corporation to the extent that
such paper or notes are rated A-1 (or the equivalent thereof) or better by S&P
or P-1 (or the equivalent thereof) or better by Moody's and maturing within one
year of the date of acquisition and (d) repurchase agreements with a bank or
trust company or recognized securities dealer having capital and surplus in
excess of $500,000,000 for direct obligations issued by or fully guaranteed by
the United States of America in which a Credit Party shall have a perfected
first priority security interest (subject to no other Liens) and having, on the
date of purchase thereof, a fair market value of at least 100% of the amount of
the repurchase obligations.
"Cash Dominion Period" means (i) any period beginning on the date an Event
of Default shall have occurred (beyond the expiration of the applicable grace or
cure period) and continuing until such Event of Default has been waived by the
Required Lenders or (ii) any period beginning on the date on which the
Obligations outstanding shall equal or exceed $18,000,000 and continuing until
the termination of this Credit Agreement and the repayment in full of all
Obligations hereunder.
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"Cash Management Products" means any one or more of the following types of
services or facilities extended to the Borrowers by any Lender or any Affiliate
of a Lender in reliance on such Lender's agreement to indemnify such Affiliate:
(i) ACH transactions; (ii) cash management, including controlled disbursement
services, and other treasury services; and (iii) establishing and maintaining
deposit accounts.
"Casualty Loss" means such term as defined in Section 7.6.
"Change of Control" means the occurrence of any of the following events:
(a) the acquisition, directly or indirectly, whether voluntarily or by operation
of law, by any person (as such term in used in Section 13(d) of the Exchange
Act) of (i) beneficial ownership of a sufficient portion of the voting power of
the outstanding Voting Stock of the Company to elect a majority of the Board of
Directors of the Company (the "Board") (either immediately or upon the
expiration of their respective current terms) pursuant to a transaction that is
not approved by such Board as constituted immediately prior to the consummation
of such transaction or (ii) all or substantially all of the assets of the
Company or (b) except as permitted by Section 9.5 or Section 9.8, the Company
shall fail to own, directly or indirectly, 100% of the outstanding shares of
Capital Stock of the other Credit Parties or (c) the occurrence of a "Change of
Control" under the 2008 Note Indenture, the 2008 Senior Notes, or other
documents evidencing the 2008 Senior Notes or (d) the occurrence of a "Change of
Control" under the 2009 Senior Note Indenture, the 2009 Senior Notes, or other
documents evidencing the 2009 Senior Notes.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto, as interpreted by the rules and regulations issued
thereunder, in each case as in effect from time to time. References to sections
of the Code shall be construed also to refer to any successor sections.
"Collateral" means any and all assets and rights and interests in or to
property of the Credit Parties pledged from time to time as security for the
Obligations pursuant to the Security Documents whether now owned or hereafter
acquired, including, without limitation, all of the Accounts and Inventory of
the Credit Parties, any Chattel Paper, Documents or Instruments evidencing or
relating to such Accounts or Inventory, Deposit Accounts, Equipment (subject to
the Security Agreement) and all Proceeds thereof, as defined in the Security
Agreement.
"Commitments" means, collectively, the commitment of each of the Lenders to
make Loans and purchase participations in the Letters of Credit hereunder.
"Commitment Percentage" means, with respect to any Lender, at any time
after the Commitments have terminated, the percentage which such Lender's Credit
Exposure constitutes of the aggregate principal amount of all Loans and LOC
Obligations then outstanding under this Credit Agreement.
"Company" has the meaning set forth in the introductory paragraph hereof.
"Concentration Account" means Account No. XXX-XXXX, ABA No. XXXXXXXXX, at
Mellon Bank, N.A., titled in the name of "Wachovia Bank, National Association,
as Collateral Agent."
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"Consignment Agreement" means the Amended and Restated Consignment
Agreement, dated as of April 28, 2005, by and between Fleet Precious Metals
Inc., a Rhode Island corporation operating as Bank of America Precious Metals
("BAPM"), and the Company and Wolverine Joining Technologies, LLC.
"Consignment Intercreditor Agreement" means the Amended and Restated
Intercreditor Agreement dated as of April 28, 2005 by and between BAPM and the
Agent.
"Consolidated Cash Interest Expense" means, for any applicable period of
computation, whether expensed or capitalized, all cash interest expense of the
Consolidated Parties for such period, net of interest income for such period,
all as determined in accordance with GAAP.
"Consolidated Cash Taxes" means, for any applicable period of computation,
the aggregate of all taxes of the Consolidated Parties determined in accordance
with applicable law and GAAP applied on a consistent basis, to the extent the
same are paid in cash during such period.
"Consolidated EBITDA" means, for any applicable period of computation,
without duplication, the sum of (i) Consolidated Net Income for such period, but
excluding therefrom all extraordinary items of income or loss, plus (ii) the
aggregate amount of depreciation and amortization charges made in calculating
Consolidated Net Income for such period, plus (iii) aggregate Consolidated
Interest Expense for such period, plus (iv) the aggregate amount of all income
taxes reflected on the consolidated statements of income of the Consolidated
Parties for such period. Except as otherwise provided herein, the applicable
period of computation shall be for the four (4) consecutive quarters ending as
of the date of determination.
"Consolidated Fixed Charges" means, for any applicable period of
computation, without duplication, the sum of (i) all Consolidated Cash Interest
Expense for the applicable period plus (ii) all Consolidated Scheduled Funded
Debt Payments for the applicable period.
"Consolidated Funded Debt" means, as of the date of determination, all
Funded Debt of the Company and its consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" means, for any applicable period of
computation, whether expensed or capitalized, all interest expense of the
Consolidated Parties for such period, net of interest income for such period,
all as determined in accordance with GAAP.
"Consolidated Parties" means the Company and all of its consolidated
Subsidiaries whether direct or indirect and whether now owned or hereafter
acquired.
"Consolidated Net Income" means, for any applicable period of computation,
the net income after taxes of the Consolidated Parties for such period, as
adjusted for (i) non-cash adjustments to Consolidated Net Income due to the
effect of changes in accounting methods required by GAAP and (ii) the tax
adjusted net value of (a) the non-cash adjustments to Consolidated Net Income on
account of gains or losses resulting from changes in the metal variance account
required by the xxxx to market of the Copper Hedge, as determined in
7
accordance with GAAP and (b) the non-cash adjustments to valuations of inventory
that consists of copper covered by the Copper Hedge resulting from the Company's
xxxx to market of inventory levels under the Copper Hedge at the time of testing
(with the submission of the certificate pursuant to Section 7.1(d), the Company
will provide the Administrative Agent with a reconciliation of these adjustments
in a format similar to that of Exhibit L).
"Consolidated Scheduled Funded Debt Payments" means, as of the end of each
fiscal quarter (or month, as applicable) of the Company and its consolidated
Subsidiaries on a consolidated basis, the sum of all scheduled payments of
principal on Consolidated Funded Debt (other than intercompany Indebtedness) for
the four (4) consecutive quarters (or 12 consecutive months, as applicable)
beginning on such date (including the principal component of payments due on
Capital Leases or under any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product during the
applicable period beginning on such date).
"Copper Hedge" means the Trading Agreements between PB Financial, Inc. and
Wolverine Tube, Inc., Wolverine Tube (Canada) Inc. and Wolverine Joining
Technologies, LLC related to hedging copper and any other copper hedging
contract permitted hereunder entered into by any Credit Party.
"Credit Agreement" or "Agreement" means this amended and restated credit
agreement, dated as of the date hereof, as the same may be modified, amended,
extended, restated or supplemented from time to time.
"Credit Documents" means this Credit Agreement, the Revolving Credit Notes,
the LOC Documents, the Security Documents and all other documents and
instruments executed or delivered in connection therewith, as the same may be
modified, amended, extended, restated or supplemented from time to time.
"Credit Exposure" means such term as defined in the definition of Required
Lenders.
"Credit Parties" means the Borrowers and "Credit Party" means any one of
them.
"Default" means any event, act or condition which with notice or lapse of
time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that, at such time, (a)
has failed to make a Loan or purchase a Participation Interest required pursuant
to the terms of this Agreement, (b) has failed to pay to the Administrative
Agent or any Lender an amount owed by such Lender pursuant to the terms of this
Agreement or (c) has become insolvent or has become subject to a receiver,
trustee or similar official.
"DOL" means the U.S. Department of Labor and any successor department or
agency.
"Effective Date" means the date on which all of the conditions set forth in
Section 5.1 have been fulfilled or waived by the Lenders.
"Eligible Accounts Receivable" means the aggregate face amount of the
Credit Parties' Accounts (excluding the Accounts of Wolverine Joining
Technologies, LLC) that (a) conform to
8
the warranties contained herein, less the aggregate amount of all returns,
discounts, claims, credits, charges (including warehousemen's charges) and
allowances of any nature (whether issued, owing, granted or outstanding), and
(b) are acceptable to the Agent in its sole discretion. In no event shall any
Account which has been sold, pledged or transferred pursuant to the Permitted
Securitization be deemed to be an Eligible Account Receivable.
"Eligible Assignee" means (a) any Lender or Affiliate or subsidiary of a
Lender and (b) any other commercial bank, financial institution, institutional
lender or "accredited investor" (as defined in Regulation D of the Securities
and Exchange Commission (other than a natural Person)) with a net worth of at
least $2,000,000,000.
"Eligible Inventory" means (i) the aggregate gross amount of each Credit
Party's Inventory, valued at cost (on a FIFO basis), which (A) is owned solely
by such Credit Party and with respect to which such Credit Party has good, valid
and marketable title, (B) is stored on property that is either (1) owned or
leased by such Credit Party or (2) owned or leased by a warehouseman that has
contracted with such Credit Party to store Inventory on such warehouseman's
property or by a filler, processor, packer or customer of such Credit Party
(provided that, with respect to Inventory stored on property not owned by such
Credit Party, such Credit Party shall have delivered in favor of the
Administrative Agent, an Acknowledgment Agreement from the landlord,
warehouseman, filler, processor, packer or customer with regard to any such
location, except that such Inventory will not be excluded solely as a result of
the failure to obtain any such Acknowledgement Agreement for a period of 90 days
following the Closing Date; and provided, further, that with respect to leased
locations for which an Acknowledgement Agreement has not been obtained from the
landlord, such Inventory may be included as Eligible Inventory (so long as it
meets the other criteria set forth elsewhere herein), but the Agent shall have
the right to impose rent reserves against such Inventory in its sole
discretion); (C) is subject to a valid, enforceable and first priority Lien in
favor of the Administrative Agent, except, with respect to Inventory stored at
sites described in clause (B)(2) above for normal and customary warehouseman,
filler, packer and processor charges); (D) is located in the United States; and
(E) is not obsolete or slow moving, and which otherwise conforms to the
warranties contained herein, less (ii) markdown reserves, less (iii) any goods
returned or rejected by such Credit Party's customers for which a credit has not
yet been issued and goods in transit to third parties (other than to such Credit
Party's agents, warehouses, fillers, processors or packers that comply with
clause (i)(B)(2) above), less (iv) damaged Inventory, less (v) any Inventory
that is a no charge or sample item, less (vi) packaging supplies, less (vii) a
reserve equal to the amount of all accounts payable of such Credit Party owed or
owing to any filler, packer or processor of such Credit Party, less (viii)
Inventory which is work in process, less (ix) Inventory consisting of MRO supply
parts, less (x) any reserves required by the Administrative Agent in its
reasonable discretion for special order goods and market value declines, less
(xi) any Inventory which is held by a Credit Party pursuant to consignment, sale
or return, sale on approval or similar arrangement, and less (xii) any Inventory
which constitutes "Related Security" (as such term is defined in the agreements
evidencing the Permitted Securitization).
"Environmental Laws" means any current or future Requirement of Law of any
Governmental Authority applicable to the Credit Parties pertaining to (a) the
protection of health, safety, and the environment, (b) the conservation,
management, or use of natural resources and wildlife, (c) the protection or use
of surface water and groundwater or (d) the management,
9
manufacture, possession, presence, use, generation, transportation, treatment,
storage, disposal, release, threatened release, abatement, removal, remediation
or handling of, or exposure to, any hazardous or toxic substance or material and
includes, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986, 42 USC 9601 et seq., Solid Waste Disposal Act,
as amended by the Resource Conservation and Recovery Act of 1976 and Hazardous
and Solid Waste Amendments of 1984, 42 USC 6901 et seq., Federal Water Pollution
Control Act, as amended by the Clean Water Act of 1977, 33 USC 1251 et seq.,
Clean Air Act of 1966, as amended, 42 USC 7401 et seq., Toxic Substances Control
Act of 1976, 15 USC 2601 et seq., Hazardous Materials Transportation Act, 49 USC
App. 1801 et seq., Occupational Safety and Health Act of 1970, as amended, 29
USC 651 et seq., Oil Pollution Act of 1990, 33 USC 2701 et seq., Emergency
Planning and Community Right-to-Know Act of 1986, 42 USC 11001 et seq., National
Environmental Policy Act of 1969, 42 USC 4321 et seq., Safe Drinking Water Act
of 1974, as amended, 42 USC 300(f) et seq., the Canadian Environmental
Assessment Act, the Canadian Environmental Protection Act, the Environmental
Assessment Act (Ontario), the Environmental Protection Act (Ontario) and all
other applicable Canadian federal or provincial environmental statutes, any
analogous implementing or successor law, and any amendment, rule, regulation,
order, or directive issued thereunder.
"Equity Issuance" means any issuance by any Borrower or any Subsidiary to
any Person which is not a Credit Party of (a) shares of its Capital Stock, (b)
any shares of its Capital Stock pursuant to the exercise of options or warrants
or (c) any shares of its Capital Stock pursuant to the conversion of any debt
securities to equity. The term "Equity Issuance" shall not include any Asset
Disposition or any issuance of Indebtedness.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
"ERISA Affiliate" means an entity, whether or not incorporated, which is
under common control with the Borrowers within the meaning of Section
4001(a)(14) of ERISA, or is a member of a group which includes the Borrowers and
which is treated as a single employer under Sections 414(b) or (c) of the Code.
"ERISA Event" means (a) with respect to any Plan, the occurrence of a
Reportable Event or the substantial cessation of operations (within the meaning
of Section 4062(e) of ERISA); (b) the withdrawal of the Borrowers or any ERISA
Affiliate from a Multiple Employer Plan during a plan year in which it was a
substantial employer (as such term is defined in Section 4001(a)(2) of ERISA),
or the termination of a Multiple Employer Plan; (c) the distribution of a notice
of intent to terminate or the actual termination of a Single Employer Plan or
Multi-Employer Plan pursuant to Section 4041(a)(2) or 4041A of ERISA; (d) the
institution of proceedings to terminate or the actual termination of a Single
Employer Plan or a Multiemployer Plan by the PBGC under Section 4042 of ERISA;
(e) the termination of, or the appointment of a trustee to administer, any
Single Employer Plan or Multiemployer Plan pursuant to Section 4042 of ERISA;
(f) the complete or partial withdrawal of the Borrowers or any ERISA Affiliate
from a Multiemployer Plan; (g) the conditions for imposition of a Lien under
Section 302(f) of ERISA exist with respect to any Single Employer
10
Plan; or (h) the adoption of an amendment to any Single Employer Plan requiring
the application of Section 307 of ERISA.
"Eurodollar Loans" means Loans accruing interest at the Adjusted Eurodollar
Rate.
"Eurodollar Rate" means, for the Interest Period for each Eurodollar Loan
comprising part of the same borrowing (including continuations and conversions),
a per annum interest rate determined pursuant to the following formula:
London Interbank Offered Rate
Eurodollar Rate = ---------------------------------
1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" means for any day, that percentage
(expressed as a decimal) which is in effect from time to time under Regulation D
of the Board of Governors of the Federal Reserve System (or any successor), as
such regulation may be amended from time to time or any successor regulation, as
the maximum reserve requirement (including, without limitation, any basic,
supplemental, emergency, special, or marginal reserves) applicable with respect
to Eurocurrency liabilities as that term is defined in Regulation D (or against
any other category of liabilities that includes deposits by reference to which
the interest rate of Eurodollar Loans is determined), whether or not a Lender
has any Eurocurrency liabilities subject to such reserve requirement at that
time. Eurodollar Loans shall be deemed to constitute Eurocurrency liabilities
and as such shall be deemed subject to reserve requirements without benefits of
credits for proration, exceptions or offsets that may be available from time to
time to a Lender. The Eurodollar Rate shall be adjusted automatically on and as
of the effective date of any change in the Eurodollar Reserve Percentage.
"Excess Availability" means at any time (a) the lesser of (i) the Revolving
Loan Commitment and (ii) the Borrowing Base minus (b) the sum of (i) the
aggregate amount of Revolving Loans outstanding plus (ii) the LOC Obligations
plus (iii) reserves imposed by the Agent from time to time in accordance with
Section 2.1(a) hereof.
"Existing Letters of Credit" means the existing letters of credit described
by date of issuance, letter of credit number, undrawn amount, name of
beneficiary and date of expiry on Schedule 1.1D.
"Event of Default" means such terms as defined in Section 11.1.
"Federal Funds Rate" means, for any day, the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve Bank
of New York, or if such rate is not released on any Business Day, the arithmetic
average (rounded upwards to the next 1/100th of 1%), as determined by the
Administrative Agent, of the quotations for the day of such transactions,
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.
"Financial Statements" means such term as defined in Section 6.6.
"Fixed Charge Coverage Ratio" means, for any applicable period of
computation, the ratio of (i) Consolidated EBITDA less Unfinanced Capital
Expenditures less all Consolidated
11
Cash Taxes paid during the applicable period less cash dividends paid by the
Company for the applicable period to (ii) total Consolidated Fixed Charges. The
applicable period of computation shall be (a) for the purpose of determining the
Applicable Percentage, the four (4) consecutive quarters ending as of the date
of determination, except with respect to the Consolidated Scheduled Funded Debt
Payments component of Consolidated Fixed Charges, which shall be for the four
(4) consecutive quarters beginning as of the date of determination and (b) for
the purpose of determining compliance with Section 8.1 hereof, the 12
consecutive month period ending as of the date of determination, except with
respect to the Consolidated Scheduled Funded Debt Payments component of
Consolidated Fixed Charges, which shall be for the 12 consecutive month period
beginning as of the date of determination.
"Funded Debt" means, without duplication, the sum of (a) all Indebtedness
of the Consolidated Parties for borrowed money, (b) the principal portion of all
obligations of the Consolidated Parties under capital leases (including capital
leases incurred in accordance with the terms of Section 9.1), (c) all commercial
letters of credit and the maximum or face amount of all performance and standby
letters of credit issued for the account of a member of the Consolidated
Parties, including, without duplication, all unreimbursed draws thereunder, (d)
all Guaranty Obligations of the Consolidated Parties with respect to Funded Debt
of another Person, (e) all Funded Debt of another entity secured by a Lien on
any property of the Consolidated Parties, to the extent of the book value of the
property secured thereby, whether or not such Funded Debt has been assumed by a
member of the Consolidated Parties, (f) all Funded Debt of any partnership or
unincorporated joint venture to the extent a member of the Consolidated Parties
is legally obligated or has a reasonable expectation of being liable with
respect thereto, net of any assets of such partnership or joint venture and (g)
the principal balance outstanding under any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet financing
product of a member of the Consolidated Parties where such transaction is
considered borrowed money indebtedness for tax purposes but is classified as an
operating lease in accordance with GAAP.
"GAAP" means generally accepted accounting principles in the United States
applied on a consistent basis and subject to the terms of Section 1.2.
"Government Acts" means such term as defined in Section 2.2(k)(i).
"Governmental Authority" means any Federal, State, Provincial, local or
foreign court or governmental agency, authority, instrumentality or regulatory
body.
"Guaranty Obligations" of any Person means any obligations (other than (a)
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection and (b) obligations arising under guaranties by a Credit
Party of another Credit Party) guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations of any other Person in any
manner, whether direct or indirect, and including, without limitation, any
obligation, whether or not contingent to, (i) purchase any such Indebtedness or
other obligation or any property constituting security therefor, (ii) advance or
provide funds or other support for the payment or purchase of such indebtedness
or obligation or to maintain working capital, solvency or other balance sheet
condition of such other Person (including, without limitation, keep well
agreements, maintenance agreements, comfort letters or similar agreements or
arrangements), (iii) lease or purchase property, securities or services
primarily for the purpose of assuring the owner of such
12
Indebtedness or obligation, or (iv) otherwise assure or hold harmless the owner
of such Indebtedness or obligation against loss in respect thereof.
"Hedging Agreements" means any Interest Rate Protection Agreement or other
interest rate protection agreement, foreign currency exchange agreement,
commodity purchase or option agreement or other interest or exchange rate or
commodity price hedging agreements or any other derivative product hedging
arrangement.
"Highest Lawful Rate" means, at any given time during which any Obligations
shall be outstanding hereunder, the maximum nonusurious interest rate, if any,
that at any time or from time to time may be contracted for, taken, reserved,
charged or received on the indebtedness under this Credit Agreement, under the
laws of the State of North Carolina (or the law of any other jurisdiction whose
laws may be mandatorily applicable notwithstanding other provisions of this
Credit Agreement and the other Credit Documents), or under applicable United
States federal laws which may presently or hereafter be in effect and which
allow a higher maximum nonusurious interest rate than under North Carolina or
such other jurisdiction's law, in any case after taking into account, to the
extent permitted by applicable law, any and all relevant payments or charges
under this Credit Agreement and any other Credit Documents executed in
connection herewith, and any available exemptions, exceptions and exclusions.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person with respect to Funded Debt, (b) all obligations of
such Person evidenced by bonds, debentures, notes or similar instruments, or
upon which interest payments are customarily made, (c) all obligations of such
Person under conditional sale or other title retention agreements relating to
property purchased by such Person to the extent of the value of such property
(other than customary reservations or retentions of title under agreements with
suppliers entered into in the ordinary course of business), (d) all obligations,
including without limitation intercompany items, of such Person issued or
assumed as the deferred purchase price of property or services purchased by such
Person which would appear as liabilities on a balance sheet of such Person, (e)
all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on, or payable out of the proceeds of Property owned or acquired by
such Person, whether or not the obligations secured thereby have been assumed,
(f) all Guaranty Obligations of such Person, (g) the principal portion of all
obligations of such Person under (i) capital leases and (ii) any synthetic
lease, tax retention operating lease, off-balance sheet loan or similar
off-balance sheet financing product where such transaction is considered
borrowed money indebtedness for tax purposes but is classified as an operating
lease in accordance with GAAP, (h) all payment obligations of such Person in
respect of Hedging Agreements, (i) the maximum amount of all standby letters of
credit issued or bankers' acceptances facilities created for the account of such
Person and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed), (j) all preferred stock issued by such Person and required by the
terms thereof to be redeemed, or for which mandatory sinking fund payments are
due, by a fixed date, in cash or other property (other than shares of common
stock or the same class of preferred stock), (k) all other obligations which
would be shown as a liability on the balance sheet of such Person and (l) the
aggregate purchase price paid by third parties for the purchase of the accounts
receivable of such Person subject at such time to a sale of receivables (or
similar transaction) regardless of whether such transaction is effected without
recourse to such Person or in a manner that would not be reflected on the
balance sheet of such Person in accordance with GAAP. The Indebtedness of any
13
Person shall include the Indebtedness of any partnership or unincorporated joint
venture but only to the extent such Person is legally obligated or has a
reasonable expectation of being liable with respect thereto; provided, however,
Indebtedness shall not include (i) any accumulated provisions for deferred taxes
or deferred credits reflected as a liability on the balance sheet of such
Person, or (ii) any Indebtedness in respect of which moneys sufficient to pay
and discharge the same in full (either on the expressed date of maturity thereof
or on such earlier date as such indebtedness may be duly called for redemption
and payment) have been deposited with a depository, agency or trustee in trust
for the payment thereof.
"Intercreditor Agreement" means the Intercreditor Agreement dated as of the
Closing Date by and among Wachovia Bank, National Association, as agent for
certain secured parties to the Permitted Securitization (in such capacity,
together with the successors and assigns, the "Securitization Agent"), the
Administrative Agent, the SPC, the Company, Tube Forming, L.P., and Small Tube
Manufacturing, LLC.
"Interest Determination Date" means such term as defined in the definition
of Applicable Percentage.
"Interest Payment Date" means (a) as to all Loans, other than Eurodollar
Loans, the last day of each month and (b) as to Eurodollar Loans having an
Interest Period of three months or less, the last day of each applicable
Interest Period; provided, that if an Interest Payment Date falls on a date
which is not a Business Day, such Interest Payment Date shall be deemed to be
the next succeeding Business Day, except that in the case of an Interest Period
where the next succeeding Business Day falls in the next succeeding calendar
month, then on the next preceding Business Day.
"Interest Period" means, with respect to Eurodollar Loans, a period of one,
two or three month's duration, as the Borrowers may elect from time to time,
commencing, in each case, on the date of the borrowing (or continuation or
conversions thereof); provided, however, (a) if any Interest Period would end on
a day which is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day (except that where the next succeeding Business Day
falls in the next succeeding calendar month, then on the next preceding Business
Day), (b) no Interest Period shall extend beyond the Maturity Date, and (c)
where an Interest Period begins on a day for which there is no numerically
corresponding day in the calendar month in which the Interest Period is to end,
such Interest Period shall end on the last Business Day of such calendar month.
"Interest Rate Protection Agreement" means any interest rate protection
agreement, foreign currency exchange agreement, commodity purchase or option
agreement or other interest or exchange rate or commodity price hedging
agreements or any other derivative product hedging arrangement between any
Borrower and any Lender, or any affiliate of a Lender.
"Inventory" means all of each Credit Party's inventory, including without
limitation, (i) all raw materials, work in process, parts, components,
assemblies, supplies and materials used or consumed in the Credit Parties'
business; (ii) all goods, wares and merchandise, finished or unfinished, held
for sale; and (iii) all goods returned to or repossessed by the Credit Parties.
"Investment" means, with respect to any Person, (a) the acquisition
(whether for cash, property, services, assumption of Indebtedness or securities
or otherwise) of assets comprising a
14
business, shares of capital stock, bonds, notes, debentures, partnership or
other ownership interests or other securities of another Person, (b) any deposit
with, or advance, loan or other extension of credit to, such other Person (other
than deposits made in connection with the purchase of equipment or other assets
in the ordinary course of business) or (c) any other investment in such other
Person, including without limitation, any Guaranty Obligation for the benefit of
such other Person.
"IRPA Obligations" means, a continuing reserve, calculated at a frequency
determined by the Administrative Agent in its sole discretion, for the aggregate
amount of liabilities and obligations arising under Interest Rate Protection
Agreements, each valued as the termination value thereof calculated according to
a method approved by the International Swap and Derivatives Association and as
such International Swap and Derivatives Association method may be further
specified in each Interest Rate Protection Agreement.
"Issuing Lender" means Wachovia or such other Issuing Lender reasonably
acceptable to the Company and the Administrative Agent.
"Issuing Lender Fee" means such term as defined in Section 4.5.
"Joinder Agreement" means the form of Joinder Agreement to be executed by
each new Borrower under the Credit Agreement pursuant to Section 7.11 hereof,
substantially in the form of Exhibit K hereto.
"Landlord Agreement" means a Landlord Lien Waiver Agreement, substantially
in the form of Exhibit B hereto, between a Credit Party's landlord and the
Administrative Agent acknowledging and agreeing, among other things, (i) that
such landlord waives any Liens on any of the Collateral of such Credit Party and
(ii) to permit the Administrative Agent access to the property for the purposes
of exercising its remedies under the Security Agreement.
"Lenders" means the Lenders identified as such on Schedule 1.1A and such
other Lenders as may be added in accordance with the terms of this Agreement.
"Letter of Credit" means a Letter of Credit issued for the account of a
Borrower or one of its Subsidiaries by the Issuing Lender pursuant to Section
2.2, as such Letter of Credit may be amended, modified, extended, renewed or
replaced.
"Letter of Credit Fee" means such term as defined in Section 4.5.
"Leverage Ratio" means, as of the last day of each fiscal quarter of the
Company, the ratio of (a) the sum of Consolidated Funded Debt as of such date
plus the aggregate outstanding amount advanced to the Credit Parties under the
Permitted Securitization as of such date to (b) Consolidated EBITDA.
"Lien" means any mortgage, pledge, hypothecation, collateral assignment,
deposit arrangement, security interest, encumbrance, lien (statutory or
otherwise), hypothec, preference, priority, or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or other title
retention agreement, any financing or similar statement filed under the Uniform
Commercial Code as adopted and in effect in the relevant jurisdiction, or other
similar recording or notice statute, and any lease in the nature thereof).
15
"LMIR" means, for any day, the rate of interest per annum (rounded upwards,
if necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or
any successor page) as the London interbank offered rate for one month deposits
in U.S. dollars at approximately 11:00 A.M. (London time), on such day, or if
such day is not a Business Day, then the immediately preceding Business Day (or
if not so reported, then as determined by the Agent from another recognized
source or interbank quotation). If no such rate is available or can be
determined, any request for an LMIR Loan shall be deemed a request for a Base
Rate Loan.
"LMIR Loans" means Loans accruing interest based on the LMIR.
"Loans" means the Revolving Loans.
"LOC Documents" means, with respect to any Letter of Credit, such Letter of
Credit, any amendments thereto, any documents delivered thereunder, and any
other agreements, instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit) governing or providing
for (a) the rights and obligations of the parties concerned or at risk or (b)
any collateral security for such obligations.
"LOC Obligations" means, at any time, the sum of (a) the maximum amount
which is, or at any time thereafter may become, available to be drawn under all
Letters of Credit then outstanding, assuming compliance with all requirements
for drawings referred to in such Letters of Credit plus (b) the aggregate amount
of all drawings under Letters of Credit honored by the Issuing Lender but not
theretofore reimbursed.
"Lockbox" means such term as defined in Section 3.1.
"Lockbox Account" means such term as defined in Section 3.1.
"Lockbox Agreement" means such term as defined in Section 3.1.
"Lockbox Bank" means such term as defined in Section 3.1.
"London Interbank Offered Rate" means, with respect to any Eurodollar Loan
for the Interest Period applicable thereto, the rate of interest per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Telerate Page 3750 (or any successor page) as the London interbank offered rate
for deposits in U.S. dollars at approximately 11:00 A.M. (London time) two (2)
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided, however, if more than one rate is
specified on Telerate Page 3750, the applicable rate shall be the arithmetic
mean of all such rates. If, for any reason, such rate is not available, the term
"London Interbank Offered Rate" shall mean, with respect to any Eurodollar Loan
for the Interest Period applicable thereto, the rate of interest per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters
Screen LIBO Page as the London interbank offered rate for deposits in U.S.
dollars at approximately 11:00 A.M. (London time) two (2) Business Days prior to
the first day of such Interest Period for a term comparable to such Interest
Period; provided, however, if more than one rate is specified on Reuters Screen
LIBO Page, the applicable rate shall be the arithmetic mean of all such rates.
16
"Material Adverse Effect" means a material adverse effect, after taking
into account any applicable insurance (to the extent the provider of such
insurance has the financial ability to support its obligations with respect
thereto and is not disputing or refusing to acknowledge same), on (a) the
business, assets, operations, prospects or condition (financial or otherwise) of
the Consolidated Parties, taken as a whole, (b) the ability of (i) the Borrowers
to perform their obligations under this Credit Agreement or any of the other
Credit Documents or (ii) the Credit Parties to perform their obligations under
this Agreement or any of the other Credit Documents, (c) the Collateral or (d)
the validity or enforceability of this Agreement, any of the other Credit
Documents, or the rights and remedies of the Lenders hereunder or thereunder
taken as a whole.
"Material Contract" means any contract or other arrangement (other than any
of the Leases or the Credit Documents), whether written or oral, to which any
Credit Party is a party as to which the breach, nonperformance, cancellation or
failure to renew by any party thereto could reasonably be expected to have a
Material Adverse Effect.
"Maturity Date" means April 28, 2008.
"Multiemployer Plan" means a Plan which is a multiemployer plan as defined
in Sections 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan (other than a Multiemployer Plan)
which the Borrowers or any ERISA Affiliate and at least one other employer other
than any Borrower or any ERISA Affiliate are contributing sponsors.
"Net Proceeds" means all cash proceeds received in connection with an Asset
Disposition, net of (a) the actual cash costs incurred in connection with and
attributable to such Asset Disposition, (b) any tax liability attributable to
such transaction and (c) amounts applied to repayment of Indebtedness (other
than the Obligations) secured by a Permitted Lien on a disposed asset.
"Notes" means the Revolving Credit Notes.
"Notice of Borrowing" means the request by a Borrower for a Revolving Loan
in the form of Exhibit C.
"Notice of Continuation/Conversion" means a request by the Borrowers to (i)
continue an existing Eurodollar Loan, (ii) convert a Base Rate Loan or LMIR Loan
to a Eurodollar Loan, or (iii) convert a Eurodollar Loan to a Base Rate Loan or
LMIR Loan, in the form of Exhibit C.
"Obligations" means the Loans, any other loans and advances or extensions
of credit made or to be made by any Lender to any Borrower, or to others for any
Borrower's account in each case pursuant to the terms and provisions of this
Credit Agreement, together with interest thereon (including interest which would
be payable as post-petition interest in connection with any bankruptcy or
similar proceeding) and, including, without limitation, any reimbursement
obligation or indemnity of the Borrowers on account of Letters of Credit and all
other LOC Obligations, and all indebtedness, fees, liabilities, guarantees and
obligations which may at any time be owing by any Borrower or any other Credit
Party to any Lender in each case pursuant to this Credit Agreement or any other
Credit Document, whether now in existence or incurred by a
17
Borrower or any other Credit Party from time to time hereafter, whether
unsecured or secured by pledge, Lien upon or security interest in any of a
Borrower's or other Credit Party's assets or property or the assets or property
of any other Person, whether such indebtedness is absolute or contingent, joint
or several, matured or unmatured, direct or indirect and whether such Borrower
or other Credit Party is liable to such Lender for such indebtedness as
principal, surety, endorser, guarantor or otherwise. Obligations shall also
include any other indebtedness owing to any Lender by any Borrower or other
Credit Party under this Credit Agreement and the other Credit Documents, any
Borrower's liability to any Lender pursuant to this Credit Agreement as maker or
endorser of any promissory note or other instrument for the payment of money,
any Borrower's or other Credit Party's liability to any Lender pursuant to this
Credit Agreement or any other Credit Document under any instrument of guaranty
or indemnity, or arising under any guaranty, endorsement or undertaking which
any Lender may make or issue to others for any such Borrower's account pursuant
to this Credit Agreement, including any accommodation extended with respect to
applications for Letters of Credit, and all liabilities and obligations owing
from any Borrower to any Lender, or any affiliate of a Lender, arising under
Interest Rate Protection Agreements, all liabilities and obligations now or
hereafter arising from or in connection with any Cash Management Products, and
all other obligations of the Credit Parties to any Lender (or an Affiliate of
any Lender) and the Agent arising under or in connection with the any other
Credit Document.
"OFAC" means the U.S. Department of the Treasury's Office of Foreign Assets
Control.
"Participation Interest" means a participation in Letters of Credit or LOC
Obligations purchased pursuant to Section 2.2 or Section 2.4 or in Loans
purchased pursuant to Section 4.6 or Section 11.3.
"PBGC" means the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA, and any successor thereof.
"Permitted Investments" means:
(a) cash and Cash Equivalents;
(b) money market investment programs that invest exclusively in Cash
Equivalents and that are classified as a current asset in accordance with GAAP
and that are administered by broker-dealers reasonably acceptable to the
Administrative Agent;
(c) Investments of a Credit Party into another Credit Party;
(d) loans or advances in the usual and ordinary course of business to
officers, directors and employees for expenses incidental to carrying on the
business of the Credit Parties, including, without, limitation, relocation and
other reasonable expenses associated with employee compensation and perquisites;
(e) accounts receivable arising from the sale of goods and services in
the ordinary course of business of the Credit Parties;
18
(f) stock or securities received in settlement of debts (created in
the ordinary course of business) owing to a Credit Party;
(g) Investments existing on the Closing Date and set forth on Schedule
1.1B attached hereto;
(h) loans to officers and employees of the Company to purchase the
Capital Stock of the Company in an amount up to $1,000,000 in the aggregate at
any time outstanding;
(i) transactions permitted pursuant to Section 9.10;
(j) promissory notes issued as consideration in connection with asset
sales permitted hereunder;
(k) Investments by the Credit Parties in their direct or indirect
Subsidiaries which are not Credit Parties, in an amount up to $5,000,000 in the
aggregate at any time outstanding;
(l) [intentionally omitted];
(m) Investments consisting of prepayments, redemptions or purchases of
the 2009 Senior Notes permitted under Section 9.15(b);
(n) [intentionally omitted];
(o) Investments in Hedging Agreements permitted under Section 9.1(a);
(p) the Guaranty dated September 22, 2004 by the Company in favor of
Cambridge 16, S. de X.X. de C.V. ("Landlord"), guarantying obligations under
that certain Lease dated September 22, 2004 between Landlord and WLVN de
Latinoamerica, S. de. X.X. de C.V. not exceeding $10.0 million in the aggregate;
(q) Investments (other than the Guaranty permitted under clause (p)
hereof) in WLVN de Latinoamerica, S. de. X.X. de C.V. and WLV Mexico, S. de.
X.X. de C.V. not exceeding $12.5 million in the aggregate (when added to any
dispositions of equipment made as permitted under clause (g) of Section 9.5);
and
(r) such other Investments as the Administrative Agent and the
Required Lenders may approve in their reasonable discretion.
"Permitted Liens" means:
(a) Liens in favor of the Lenders pursuant to any Credit Document or
any Interest Rate Protection Agreement;
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(b) Liens for taxes not yet due or Liens for taxes being contested in
good faith by appropriate proceedings for which adequate reserves determined in
accordance with GAAP have been established;
(c) Liens in respect of property imposed by law arising in the
ordinary course of business such as materialmen's, mechanics', warehousemen's,
supplier's or vendor's and other like Liens provided that such Liens secure only
amounts not yet due and payable or if overdue are being contested in good faith
by appropriate actions or proceedings and adequate reserves have been
established;
(d) pledges or deposits made to secure payment of worker's
compensation insurance, unemployment insurance, pensions or social security
programs;
(e) Liens arising from good faith deposits in connection with or to
secure performance of tenders, statutory obligations, surety and appeal bonds,
bids, leases, government contracts, performance and return-of-money bonds and
other similar obligations incurred in the ordinary course of business (other
than obligations in respect of the payment of borrowed money);
(f) easements, rights-of-way, restrictions (including zoning
restrictions), minor defects or irregularities in title and other similar
charges or encumbrances not impairing, in any material respect, the use of such
property for its intended purposes or interfering, in any material respect, with
the ordinary conduct of business of the Credit Parties;
(g) Liens securing purchase money indebtedness (it being understood
for the purposes of this Agreement that conditional sales contracts shall
constitute purchase money indebtedness) permitted by Section 9.1(d);
(h) Liens existing on property or assets of any Consolidated Party as
of the date of this Agreement and disclosed on Schedule 1.1C; provided that the
Liens set forth on Schedule 1.1C shall not extend to or secure any Indebtedness
other than any such Indebtedness outstanding on the date hereof;
(i) financing statements filed in connection with operating leases
made in the ordinary course of business; and
(j) judgments and other similar Liens arising in connection with court
proceedings to the extent such judgments do not constitute Events of Default;
provided the execution or other enforcement of such Lien is effectively stayed
and the claims secured thereby are being actively contested in good faith and by
appropriate proceedings.
"Permitted Securitization" means the trade securitization transaction for
an aggregate principal amount of third party investments or advances of up to
$45,000,000, evidenced by that certain Receivables Sale Agreement, dated as of
April 28, 2005 among the Securitization Companies and the SPC and that certain
Receivables Purchase Agreement, dated as of April 28, 2005 among the SPC,
Wolverine Finance, LLC, the Company, Blue Ridge Asset Funding
20
Corporation, the liquidity banks from time to time party thereto and Wachovia
Bank, National Association.
"Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" means any employee benefit plan (as defined in Section 3(3) of
ERISA) which is covered by ERISA and with respect to which the Borrowers or any
ERISA Affiliate is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an "employer" within the meaning of
Section 3(5) of ERISA.
"Pledge Agreement" means the Pledge Agreement, dated as of March 27, 2002,
and amended on the Closing Date, between the Administrative Agent and the Credit
Parties, in the form attached hereto as Exhibit E-2.
"Prime Rate" means the per annum rate of interest established from time to
time by the Administrative Agent at its principal office in Charlotte, North
Carolina (or such other principal office of the Administrative Agent as
communicated in writing to the Borrowers and the Lenders) as its Prime Rate. Any
change in the interest rate resulting from a change in the Prime Rate shall
become effective as of 12:01 a.m. of the Business Day on which each change in
the Prime Rate is announced by the Administrative Agent. The Prime Rate is a
reference rate used by the Administrative Agent in determining interest rates on
certain loans and is not intended to be the lowest rate of interest charged on
any extension of credit to any debtor.
"Production Month" means for the first two Production Months of a quarter a
4 week production period and for the third Production Month of a production
quarter a five week production period of the Credit Parties.
"Production Quarter" means each thirteen week production period of the
Credit Parties.
"Regulation U or X" means Regulation U or X, respectively, of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing reserve requirements.
"Reportable Event" means any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the notice requirement has been
waived by regulation.
"Required Lenders" means Lenders whose aggregate Credit Exposure (as
hereinafter defined) constitute at least 51% of the aggregate Credit Exposure of
all Lenders at such time; provided, however, that Required Lenders shall be
comprised of at least two (2) Lenders if there is more than one Lender, and
provided, further, that if any Lender shall be a Defaulting Lender at such time
then there shall be excluded from the determination of Required Lenders at such
time the aggregate principal amount of Credit Exposure of such Lender at such
time. For purposes of the preceding sentence, the term "Credit Exposure" as
applied to each Lender shall mean (a) at any time prior to the termination of
the Commitments, the Revolving Loan Commitment Percentage of such Lender
multiplied times the Revolving Loan Commitment, and (b) at any time after the
termination of the Commitments, the sum of (i) the principal balance of
outstanding Revolving Loans of such
21
Lender, plus (ii) such Lender's Participation Interests in the face amount of
outstanding Letters of Credit.
"Requirement of Law" means, as to any Person, any law, treaty, rule or
regulation or final, non-appealable determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to our binding upon such
Person or to which any of its property is subject.
"Restricted Payment" means (i) any cash dividend or other cash
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of any member of the Consolidated Parties, now or hereafter
outstanding, (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares of
any class of Capital Stock of any member of the Consolidated Parties now or
hereafter outstanding by such member of the Consolidated Parties, except for any
redemption, retirement, sinking funds or similar payment payable solely in such
shares of that class of stock or in any class of stock junior to that class or
(iii) any cash payment made to redeem, purchase, repurchase or retire, or to
obtain the surrender of, any outstanding warrants, options or other rights to
acquire any shares of any class of Capital Stock of any member of the
Consolidated Parties now or hereafter outstanding.
"Revolving Credit Notes" means the promissory notes of the Borrowers in
favor of each Lender evidencing the Revolving Loans and substantially in the
form of Exhibit D, as such promissory notes may be amended, modified,
supplemented or replaced from time to time.
"Revolving Loan Commitment" means $35,000,000 (U.S.), as such amount may be
reduced in accordance with Section 2.10.
"Revolving Loan Commitment Percentage" means, for each Lender, the
percentage identified as its Revolving Loan Commitment Percentage opposite such
Lender's name on Schedule 1.1A, as such percentage may be modified by assignment
in accordance with the terms of this Agreement.
"Revolving Loans" means the revolving loans made by the Lenders to the
Borrowers pursuant to Section 2.1.
"Sanctioned Country" means a country subject to a sanctions program
identified on the list maintained by OFAC and available at
xxxx://xxx.xxxxx.xxx/xxxxxxx/xxxxxxxxxxx/xxxx/xxxxxxxxx/xxxxx.xxxx, or as
otherwise published from time to time.
"Sanctioned Person" means (a) a Person named on the list of "Specially
Designated Nationals and Blocked Persons" maintained by OFAC available at
xxxx://xxx.xxxxx.xxx/xxxxxxx/xxxxxxxxxxx/xxxx/xxxxxxxxx/xxxxx.xxxx, or as
otherwise published from time to time, or (b) (i) an agency of the government of
a Sanctioned Country, (ii) an organization controlled by a Sanctioned Country,
or (iii) a person resident in a Sanctioned Country, to the extent subject to a
sanctions program administered by OFAC.
22
"Securitization Account" means Account No. XXXXXXXXXXXXX, ABA No.
XXXXXXXXX, at Wachovia Bank, National Association, titled in the name of
"Wachovia Bank, National Association."
"Securitization Companies" means the Company, Tube Forming, L.P. and Small
Tube Manufacturing, LLC.
"Security Agreement" means the Security Agreement, dated as of March 27,
2002, and amended on the Closing Date, between the Administrative Agent and the
Credit Parties, in the form attached hereto as Exhibit E-1.
"Security Documents" means, collectively, the Security Agreement, the
Pledge Agreement, any Acknowledgment Agreements and any Lockbox Agreement.
"Senior Financial Officers" means the Chief Executive Officer, Chief
Financial Officer, Controller and Treasurer of the Company or any other Credit
Party.
"Senior Management Members" means such term as defined in Section 6.28.
"Senior Officers" means each of the Senior Financial Officers and each
Senior Management Member of the Credit Parties.
"Settlement Period" means such term as defined in Section 2.7(a) and (b).
"Single Employer Plan" means any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan or a Multiple Employer Plan.
"Solvent" means, with respect to any Person as of a particular date, that
on such date (a) such Person is able to pay its debts and other liabilities,
contingent obligations and other commitments as they mature in the normal course
of business, (b) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person's ability to pay as such
debts and liabilities mature in their ordinary course, (c) such Person is not
engaged in a business or a transaction, and is not about to engage in a business
or a transaction, for which such Person's assets would constitute unreasonably
small capital after giving due consideration to the prevailing practice in the
industry in which such Person is engaged or is to engage, (d) the fair value of
the assets of such Person is greater than the total amount of liabilities,
including, without limitation, contingent liabilities, of such Person and (e)
the present fair saleable value of the assets of such Person is not less than
the amount that will be required to pay the probable liability of such Person on
its debts as they become absolute and matured. In computing the amount of
contingent liabilities at any time, it is intended that such liabilities will be
computed at the amount which, in light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"SPC" means DEJ 98 FINANCE, LLC, a Delaware limited liability company.
"Subsidiary" of any Person means (a) any corporation more than 50% of whose
stock of any class or classes having by the terms thereof ordinary voting power
to elect a majority of the directors of such corporation (irrespective of
whether or not at the time, any class or classes of the
23
capital stock of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time owned by such Person
directly or indirectly through Subsidiaries of such Person, and (b) any
partnership, association, joint venture or other entity in which such Person
directly or indirectly through Subsidiaries of such Person has more than 50% of
the equity interest at any time; provided, however, that the SPC shall not be
considered a Subsidiary of the Company or any of its other Subsidiaries.
"Termination Event" means (i) a Reportable Event with respect to any
Benefit Plan or Multiemployer Plan; (ii) the withdrawal of any Borrower, any
Subsidiary or any ERISA Affiliate from a Benefit Plan during a plan year in
which such entity was a "substantial employer" as defined in Section 4001(a)(2)
of ERISA; (iii) the providing of notice of intent to terminate a Benefit Plan
pursuant to Section 4041 of ERISA; (iv) the institution by the PBGC of
proceedings to terminate a Benefit Plan or Multiemployer Plan; (v) any event or
condition (a) which might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Benefit Plan
or Multiemployer Plan, or (b) that may result in termination of a Multiemployer
Plan pursuant to Section 4041A of ERISA; or (vi) the partial or complete
withdrawal within the meaning of Sections 4203 and 4205 of ERISA, of any
Borrower, any Subsidiary or any ERISA Affiliate from a Multiemployer Plan.
"UCC" means such term as defined in Section 1.3.
"Unfinanced Capital Expenditures" means, for any period, all Capital
Expenditures not financed from proceeds of Consolidated Funded Debt (other than
Loans made under this Agreement or from proceeds of the Permitted
Securitization).
"Unused Fees" means such term as defined in Section 4.5.
"Unutilized Revolving Commitment" means, for any period, the amount by
which (a) the Revolving Loan Commitment exceeds (b) the daily average sum for
such period of the outstanding aggregate principal amount of all Revolving Loans
plus the daily average balance of LOC Obligations for such period.
"U.S. Subsidiary" means any direct or indirect Subsidiary of the Borrowers
which is incorporated or organized under the laws of any State of the United
States or the District of Columbia.
"Voting Stock" means, with respect to any Person, Capital Stock issued by
such Person, the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even if the right so to vote has
been suspended by the happening of such a contingency.
"Wachovia" means Wachovia Bank, National Association, having its principal
office in North Carolina, and its successors and permitted assigns.
"Wachovia Cash Collateral Accounts" means any Wachovia account established
and maintained in the name of the Borrowers at Wachovia, with the Administrative
Agent named as secured party thereon, into which funds transferred from any
Lockbox or from the Concentration Account or from the Securitization Account
will be deposited.
24
"Wachovia Funding Account" means any account established and maintained in
the name of the Borrowers at Wachovia, with the Administrative Agent named as
secured party thereon.
"WLV Joining Technologies Account" means Account No. XXX-XXXX, ABA No.
XXXXXXXXX, at Mellon Bank, N.A., titled in the name of "Wolverine Joining
Technologies, LLC."
"2008 Senior Note Indenture" means the Indenture, dated as of August 4,
1998 by and among the Company and Wachovia Bank, National Association (f/k/a
First Union National Bank), as trustee, as the same may be amended, modified,
restated or supplemented and in effect from time to time in accordance with the
terms hereof..
"2008 Senior Noteholders" means a collective reference to the holders from
time to time of the 2008 Senior Notes and "2008 Senior Noteholder" means any one
of them.
"2008 Senior Notes" means a reference to any one of the Company's
$150,000,000 7 3/8% Senior Notes, due August, 2008 issued by the Company in
favor of the 2008 Senior Noteholders pursuant to the 2008 Senior Note Indenture,
as such 2008 Senior Notes may be amended, modified, restated or supplemented and
in effect from time to time in accordance with the terms hereof.
"2009 Senior Note Indenture" means that certain Indenture dated as of March
27, 2002 by and among the Company, the Subsidiaries listed therein and Wachovia
Bank, National Association, as Trustee, as such 2009 Senior Note Indenture may
be amended, modified, restated, replaced or supplemented and in effect from time
to time in accordance with the terms hereof.
"2009 Senior Noteholders" means a collective reference to the holders from
time to time of the 2009 Senior Notes and "2009 Senior Noteholder" means any one
of them.
"2009 Senior Notes" means a reference to any one of the Company's
$120,000,000 10.5% Senior Notes, due April 1, 2009 issued by the Company in
favor of the 2009 Senior Noteholders pursuant to the 2009 Senior Note Indenture,
as such 2009 Senior Notes may be amended, modified, restated, replaced or
supplemented and in effect from time to time in accordance with the terms
hereof.
1.2 ACCOUNTING TERMS
Except as otherwise expressly provided herein, all accounting terms used
herein shall be interpreted, and all financial statements and certificates and
reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared in accordance with GAAP applied on a consistent
basis. All calculations made for the purposes of determining compliance with
this Agreement shall (except as otherwise expressly provided herein) be made by
application of GAAP applied on a basis consistent with those used in the
preparation of the latest annual or quarterly financial statements under Section
7.1 (or prior to the delivery of the first financial statements under Section
7.1 used in the preparation of the financial statements described in Section
6.6). In determining "pro forma" compliance with the financial covenants herein,
as required pursuant to any provision hereof, any Indebtedness incurred or asset
sale made or Acquisition completed shall
25
be deemed to have been incurred, made or completed, as the case may be, on the
first day of the four fiscal quarters most recently ended prior to such
occurrence.
The Borrowers shall deliver to the Lenders at the same time as the delivery
of any annual or quarterly financial statement under Section 7.1, (a) a
description in reasonable detail of any material variation between the
application of accounting principles employed in the preparation of such
statement and the application of accounting principles employed in the
preparation of the most recent preceding annual or quarterly financial
statements and (b) reasonable estimates of the difference between such
statements arising as a consequence thereof.
1.3 OTHER DEFINITIONAL PROVISIONS
Terms not otherwise defined herein which are defined in the Uniform
Commercial Code as in effect in the State of North Carolina (the "UCC") shall
have the meanings given them in the UCC. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Credit Agreement shall
refer to the Credit Agreement as a whole and not to any particular provision of
this Credit Agreement, unless otherwise specifically provided. References in
this Agreement to "Articles", "Sections", "Schedules" or "Exhibits" shall be to
Articles, Sections, Schedules or Exhibits of or to this Agreement unless
otherwise specifically provided. Any of the terms defined in Section 1.1 may,
unless the context otherwise requires, be used in the singular or plural
depending on the reference. "Include", "includes" and "including" shall be
deemed to be followed by "without limitation" whether or not they are in fact
followed by such words or words of like import. "Writing", "written" and
comparable terms refer to printing, typing, computer disk, e-mail and other
means of reproducing words in a visible form. References to any agreement or
contract are to such agreement or contract as amended, modified or supplemented
from time to time in accordance with the terms hereof and thereof. References to
any Person include the successors and permitted assigns of such Person.
References "from" or "through" any date mean, unless otherwise specified, "from
and including" or "through and including", respectively. References to any times
herein unless otherwise specified herein shall refer to Eastern Standard or
Daylight time, as from time to time in effect.
ARTICLE II
THE REVOLVING LOANS
2.1 REVOLVING LOANS
(a) Revolving Loan Commitment. Subject to the terms and conditions set
forth herein, each Lender agrees, severally and not jointly, at any time and
from time to time from the Effective Date to the Maturity Date, to make
revolving loans (each a "Revolving Loan" and collectively, the "Revolving
Loans") in U.S. dollars to the Borrowers; provided, however, that (i) the
aggregate amount of Revolving Loans outstanding plus IRPA Obligations plus LOC
Obligations outstanding at any one time may not exceed the lesser of the
Borrowing Base and the Revolving Loan Commitment; and (ii) with regard to each
individual Lender, the Lender's pro rata share of outstanding Revolving Loans
plus IRPA Obligations plus LOC Obligations outstanding shall not exceed such
Lender's Revolving Loan Commitment Percentage of the Revolving Loan Commitment.
26
Revolving Loans shall consist of Base Rate Loans, LMIR Loans or
Eurodollar Loans (or a combination thereof) as the Borrowers may request, and
the Borrowers may borrow, repay and reborrow in accordance with the terms
hereof. The Administrative Agent shall have the continuing right to deduct
reserves from the Borrowing Base, and to increase and decrease such reserves
from time to time, if and to the extent that in the Administrative Agent's
reasonable discretion, such reserves are necessary, including to protect the
Administrative Agent's and/or Lender's interest in the Collateral or to protect
the Administrative Agent against possible non-payment of Accounts for any reason
by account debtors or possible diminution of the value of any of the Collateral
or possible non-payment of any of the Obligations or for any Taxes or in respect
of any state of facts that could constitute a Default. The Administrative Agent
may, at its option, or shall at the request of the Required Lenders, implement
reserves by designating as ineligible a sufficient amount of the Account or
Inventory that would otherwise be Eligible Accounts or Eligible Inventory, as
the case may be, so as to reduce the Borrowing Base by the amount of the
intended reserves. Notwithstanding the foregoing to the contrary or any other
term or provision herein, LMIR Loans shall be available to be made only when
there is a single Lender under this Credit Agreement.
(b) Method of Borrowing for Revolving Loans.
(i) Base Rate Loans and LMIR Loans. By no later than 11:00 a.m.,
on the date of the request, the applicable Borrower shall submit a Notice of
Borrowing to the Administrative Agent setting forth the amount requested, the
desire to have such Revolving Loan made as a Base Rate Loan or LMIR Loan and
complying in all respects with Section 5.2; provided, however, that certain Base
Rate Loans may be made without a Notice of Borrowing in accordance with Section
2.7(a).
(ii) Eurodollar Loans. By no later than 11:00 a.m., three (3)
Business Days prior to the date of the requested Eurodollar Loan, the applicable
Borrower shall submit a Notice of Borrowing to the Administrative Agent setting
forth the amount thereof, the desire to have such Revolving Loan made as a
Eurodollar Loan, the Interest Period applicable thereto and complying in all
respects with Section 5.2.
2.2 LETTER OF CREDIT SUBFACILITY.
(a) Issuance. Subject to the terms and conditions hereof and of the
LOC Documents, if any, and any other terms and conditions which the Issuing
Lender may reasonably require, the Issuing Lender shall from time to time upon
request issue, in U.S. dollars, and the Lenders shall participate in, letters of
credit (the "Letters of Credit") for the account of the Borrowers or any of
their Subsidiaries, from the Effective Date until the Maturity Date, in a form
reasonably acceptable to the Issuing Lender; provided, however, that (i) the
aggregate amount of LOC Obligations shall not at any time exceed $12,000,000,
(ii) the sum of the aggregate amount of LOC Obligations outstanding plus
Revolving Loans plus IRPA Obligations shall not exceed the lesser of the
Borrowing Base and the Revolving Loan Commitment, and (iii) with respect to each
individual Lender, the Lender's pro rata share of outstanding Revolving Loans
plus its pro rata share of outstanding LOC Obligations shall not exceed such
Lender's Revolving Loan Commitment Percentage of the Revolving Loan Commitment.
The issuance and expiry date of each Letter of Credit shall be a Business Day.
Except as otherwise expressly agreed upon by all
27
the Lenders, no Letter of Credit shall have an original expiry date more than
one year from the date of issuance, or as extended, shall have an expiry date
extending beyond the Maturity Date, except that prior to the Maturity Date a
Letter of Credit may be issued or extended with an expiry date extending beyond
the Maturity Date, if and to the extent that the Borrowers shall provide cash
collateral to the Issuing Lender on the Maturity Date in an amount equal to the
maximum amount available to be drawn under such Letter of Credit and the
Required Lenders or the Issuing Lender shall not otherwise object. Each Letter
of Credit shall be either (x) a standby letter of credit issued to support the
obligations (including pension or insurance obligations), contingent or
otherwise, of a Borrower or any of its Subsidiaries, or (y) a commercial letter
of credit in respect of the purchase of goods or services by a Borrower or any
of its Subsidiaries in the ordinary course of business. Each Letter of Credit
shall comply with the related LOC Documents.
(b) Notice and Reports. The request for the issuance of a Letter of
Credit shall be submitted to the Issuing Lender at least three (3) Business Days
prior to the requested date of issuance. The Issuing Lender will, at least
quarterly and more frequently upon request, provide to the Administrative Agent
for dissemination to the Lenders a detailed report specifying the Letters of
Credit which are then issued and outstanding and any activity with respect
thereto which may have occurred since the date of the prior report, and
including therein, among other things, the account party, the beneficiary, the
face amount, and the expiry date as well as any payments or expirations which
may have occurred. The Issuing Lender will further provide to the Administrative
Agent, promptly upon request, copies of the Letters of Credit.
(c) Participations. Each Lender, upon issuance of a Letter of Credit,
shall be deemed to have purchased without recourse a risk participation from the
Issuing Lender in such Letter of Credit and the obligations arising thereunder
and any collateral relating thereto, in each case in an amount equal to its
Revolving Loan Commitment Percentage of the obligations under such Letter of
Credit, and shall absolutely, unconditionally and irrevocably assume, as primary
obligor and not as surety, and be obligated to pay to the Issuing Lender
therefor and discharge when due, its Revolving Loan Commitment Percentage of the
obligations arising under such Letter of Credit. Without limiting the scope and
nature of each Lender's participation in any Letter of Credit, to the extent
that the Issuing Lender has not been reimbursed as required hereunder or under
any such Letter of Credit, each such Lender shall pay to the Issuing Lender its
Revolving Loan Commitment Percentage of such unreimbursed drawing in same day
funds on the day of notification by the Issuing Lender of an unreimbursed
drawing pursuant to the provisions of subsection (d) hereof. The obligation of
each Lender to so reimburse the Issuing Lender shall be absolute and
unconditional and shall not be affected by the occurrence of a Default, an Event
of Default or any other occurrence or event. Any such reimbursement shall not
relieve or otherwise impair the obligation of the Borrowers or any other Credit
Party to reimburse the Issuing Lender under any Letter of Credit, together with
interest as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any Letter of
Credit, the Issuing Lender will promptly notify the Borrowers. Unless the
Borrowers shall immediately notify the Issuing Lender of its intent to otherwise
reimburse the Issuing Lender, the Borrowers shall be deemed to have requested a
Revolving Loan made as a Base Rate Loan, in the amount of the drawing as
provided in subsection (e) hereof, the proceeds of which will be used to satisfy
28
the reimbursement obligations. The Borrowers shall reimburse the Issuing Lender
on the day of drawing under any Letter of Credit either with the proceeds of a
Revolving Loan obtained hereunder or otherwise in same day funds as provided
herein or in the LOC Documents. If the Borrowers shall fail to reimburse the
Issuing Lender as provided hereinabove, the unreimbursed amount of such drawing
shall bear interest at a per annum rate equal to the Base Rate, plus the sum of
the Applicable Percentage for Base Rate Loans and two percent (2%). Subject to
Section 2.2(k)(v), the Borrowers' reimbursement obligations hereunder shall be
absolute and unconditional under all circumstances irrespective of (but without
waiver of) any rights of set-off, counterclaim or defense to payment that the
applicable account party or the Borrowers may claim or have against the Issuing
Lender, the Administrative Agent, the Lenders, the beneficiary of the Letter of
Credit drawn upon or any other Person, including without limitation, any defense
based on any failure of the applicable account party, the Borrowers or any other
Credit Party to receive consideration or the legality, validity, regularity or
unenforceability of the Letter of Credit. The Issuing Lender will promptly
notify the Lenders of the amount of any unreimbursed drawing and each Lender
shall promptly pay to the Administrative Agent for the account of the Issuing
Lender, in Dollars and in immediately available funds, the amount of such
Lender's Revolving Loan Commitment Percentage of such unreimbursed drawing. Such
payment shall be made on the day such notice is received by such Lender from the
Issuing Lender if such notice is received at or before 2:00 p.m., otherwise such
payment shall be made at or before 12:00 Noon on the Business Day next
succeeding the day such notice is received. If such Lender does not pay such
amount to the Issuing Lender in full upon such request, such Lender shall, on
demand, pay to the Administrative Agent for the account of the Issuing Lender
interest on the unpaid amount during the period from the date the Lender
received the notice regarding the unreimbursed drawing until such Lender pays
such amount to the Issuing Lender in full at a rate per annum equal to, if paid
within two (2) Business Days of the date of drawing, the Federal Funds Rate and
thereafter at a rate equal to the Base Rate. Each Lender's obligation to make
such payment to the Issuing Lender, and the right of the Issuing Lender to
receive the same, shall be absolute and unconditional, shall not be affected by
any circumstance whatsoever and without regard to the termination of this
Agreement or the Commitments hereunder, the existence of a Default or Event of
Default or the acceleration of the obligations hereunder and shall be made
without any offset, abatement, withholding or reduction whatsoever.
Simultaneously with the making of each such payment by a Lender to the Issuing
Lender, such Lender shall, automatically and without any further action on the
part of the Issuing Lender or such Lender, acquire a participation in an amount
equal to such payment (excluding the portion of such payment constituting
interest owing to the Issuing Lender) in the related unreimbursed drawing
portion of the LOC Obligation and in the interest thereon and in the related LOC
Documents, and shall have a claim against the Borrowers and the other applicable
Credit Parties with respect thereto.
(e) Repayment with Revolving Loans. On any day on which the Borrowers
shall have requested, or been deemed to have requested, a Revolving Loan
borrowing to reimburse a drawing under a Letter of Credit, the Administrative
Agent shall give notice to the Lenders that a Revolving Loan has been requested
or deemed requested in connection with a drawing under a Letter of Credit, in
which case a Revolving Loan borrowing comprised solely of Base Rate Loans (each
such borrowing, a "Mandatory Borrowing") shall be immediately made from all
Lenders (without giving effect to any termination of the Commitments pursuant to
Section 9.2) pro rata based on each Lender's respective Revolving Loan
Commitment
29
Percentage and the proceeds thereof shall be paid directly to the Issuing Lender
for application to the respective LOC Obligations. Each such Lender hereby
irrevocably agrees to make such Revolving Loans immediately upon any such
request or deemed request on account of each such Mandatory Borrowing in the
amount and in the manner specified in the preceding sentence and on the same
such date notwithstanding (i) the amount of Mandatory Borrowing may not comply
with the minimum amount for borrowings of Revolving Loans otherwise required
hereunder, (ii) whether any conditions specified in Section 5.2 are then
satisfied, (iii) whether a Default or Event of Default then exists, (iv) the
failure of any such request or deemed request for Revolving Loans to be made by
the time otherwise required hereunder, (v) the date of such Mandatory Borrowing,
or (vi) any reduction in the Revolving Loan Commitment or any termination of the
Commitments. In the event that any Mandatory Borrowing cannot for any reason be
made on the date otherwise required above (including, without limitation, as a
result of the commencement of a proceeding under the U.S. Bankruptcy Code with
respect to the Borrowers or any other Credit Party), then each such Lender
hereby agrees that it shall forthwith fund (as of the date the Mandatory
Borrowing would otherwise have occurred, but adjusted for any payments received
from the Borrowers on or after such date and prior to such purchase) its
Participation Interest in the outstanding LOC Obligations; provided, further,
that in the event any Lender shall fail to fund its Participation Interest on
the day the Mandatory Borrowing would otherwise have occurred, then the amount
of such Lender's unfunded Participation Interest therein shall bear interest
payable to the Issuing Lender upon demand, at the rate equal to, if paid within
two (2) Business Days of such date, the Federal Funds Rate, and thereafter at a
rate equal to the Base Rate.
(f) Designation of Subsidiaries as Account Parties. Notwithstanding
anything to the contrary set forth in this Agreement, a Letter of Credit issued
hereunder may contain a statement to the effect that such Letter of Credit is
issued for the account of a Subsidiary of a Borrower; provided that
notwithstanding such statement, such Borrower shall be the actual account party
for all purposes of this Agreement for such Letter of Credit and such statement
shall not affect the Borrowers' reimbursement obligations hereunder with respect
to such Letter of Credit.
(g) Modification and Extension. The issuance of any supplement,
modification, amendment, renewal, or extensions to any Letter of Credit shall,
for purposes hereof, be treated in all respects the same as the issuance of a
new Letter of Credit hereunder.
(h) Uniform Customs and Practices. The Letters of Credit shall be
subject to The Uniform Customs and Practice for Documentary Credits, as
published as of the date of issue by the International Chamber of Commerce
(Publication No. 500 or the most recent publication, the "UCP").
(i) Responsibility of Issuing Lender. It is expressly understood and
agreed that the obligations of the Issuing Lender hereunder to the Lenders are
only those expressly set forth in this Agreement and that the Issuing Lender
shall be entitled to assume that the conditions precedent set forth in Section
5.2 have been satisfied unless it shall have acquired actual knowledge that any
such condition precedent has not been satisfied; provided, however, that nothing
set forth in this Section 2.2 shall be deemed to prejudice the right of any
Lender to recover from the Issuing Lender any amounts made available by such
Lender to the Issuing
30
Lender pursuant to this Section 2.2 in the event that it is determined by a
court of competent jurisdiction that the payment with respect to a Letter of
Credit constituted gross negligence or willful misconduct on the part of the
Issuing Lender.
(j) Conflict with LOC Documents. In the event of any conflict between
this Agreement and any LOC Document, this Agreement shall govern.
(k) Indemnification of Issuing Lender.
(i) In addition to its other obligations under this Agreement,
the Borrowers hereby agree to protect, indemnify, pay and save the Issuing
Lender harmless from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable attorneys'
fees) that the Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (A) the issuance of any Letter of Credit or (B) the
failure of the Issuing Lender to honor a drawing under a Letter of Credit as a
result of any act or omission, whether rightful or wrongful, of any present or
future de jure or de facto government or governmental authority (all such acts
or omissions, herein called "Government Acts").
(ii) As between the Borrowers and the Issuing Lender, the
Borrowers shall assume all risks of the acts, omissions or misuse of any Letter
of Credit by the beneficiary thereof. The Issuing Lender shall not be
responsible for: (A) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted by any party in connection with the
application for and issuance of any Letter of Credit, even if it should in fact
prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent
or forged; (B) the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, that may prove
to be invalid or ineffective for any reason; (C) failure of the beneficiary of a
Letter of Credit to comply fully with conditions required in order to draw upon
a Letter of Credit; (D) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (E) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under a Letter of Credit or of the proceeds thereof; and (F) any consequences
arising from causes beyond the control of the Issuing Lender, including, without
limitation, any Government Acts. None of the above shall affect, impair, or
prevent the vesting of the Issuing Lender's rights or powers hereunder.
(iii) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by the
Issuing Lender, under or in connection with any Letter of Credit or the related
certificates, if taken or omitted in good faith, shall not put the Issuing
Lender under any resulting liability to the Borrowers or any Credit Party. It is
the intention of the parties that this Agreement shall be construed and applied
to protect and indemnify the Issuing Lender against any and all risks involved
in the issuance of the Letters of Credit, all of which risks are hereby assumed
by the Borrowers, including, without limitation, any and all risks of the acts
or omissions, whether rightful or wrongful, of any present or future Government
Acts. The
31
Issuing Lender shall not, in any way, be liable for any failure by the Issuing
Lender or anyone else to pay any drawing under any Letter of Credit as a result
of any Government Acts or any other cause beyond the control of the Issuing
Lender.
(iv) Nothing in this subsection (k) is intended to limit the
reimbursement obligation of the Borrowers contained in this Section 2.2. The
obligations of the Borrowers under this subsection (k) shall survive the
termination of this Agreement. No act or omission of any current or prior
beneficiary of a Letter of Credit shall in any way affect or impair the rights
of the Issuing Lender to enforce any right, power or benefit under this
Agreement.
(v) Notwithstanding anything to the contrary contained in this
subsection (k), the Borrowers shall have no obligation to indemnify the Issuing
Lender in respect of any liability incurred by the Issuing Lender arising out of
the gross negligence or willful misconduct of the Issuing Lender, as determined
by a court of competent jurisdiction. Nothing in this Agreement shall relieve
the Issuing Lender of any liability to the Borrowers in respect of any action
taken by the Issuing Lender which action constitutes gross negligence or willful
misconduct of the Issuing Lender or a violation of the UCP or Uniform Commercial
Code (as applicable), as determined by a court of competent jurisdiction.
2.3 [INTENTIONALLY OMITTED]
2.4 [INTENTIONALLY OMITTED]
2.5 [INTENTIONALLY OMITTED]
2.6 MINIMUM AMOUNTS OF LOANS
Revolving Loans made as Base Rate Loans or LMIR Loans shall be in minimum
principal amounts of $500,000 and in $100,000 increments in excess thereof.
Revolving Loans made as Eurodollar Loans shall be in minimum principal amounts
of $1,000,000 and in $100,000 increments in excess thereof. No more than four
(4) Eurodollar Loans shall be outstanding hereunder at any one time. For the
purposes of this Section, (i) Eurodollar Loans with the same Interest Period
shall be considered as one Eurodollar Loan and (ii) Eurodollar Loans with
different Interest Periods shall be considered as separate Eurodollar Loans,
even if they begin on the same date, although borrowings, conversions and
continuations may, in accordance with the provisions hereof, be combined at the
end of existing Interest Periods to constitute a new Eurodollar Loan with a
single Interest Period.
2.7 FUNDING OF LOANS TO BORROWERS
(a) Revolving Loans.
(i) Upon receipt of a Notice of Borrowing requesting Revolving
Loans, the Administrative Agent shall promptly inform the Lenders as to the
terms thereof. Each Lender will make its pro rata share of each Revolving Loan
available to the Administrative Agent by 1:00 p.m. (EST), on the date specified
in the Notice of
32
Borrowing by deposit (in U.S. dollars) of immediately available funds at the
offices of the Administrative Agent at the address provided in Section 14.1, or
at such other address as the Administrative Agent may designate in writing. All
Revolving Loans shall be made by the Lenders pro rata on the basis of each
Lender's Revolving Loan Commitment Percentage. The amount of the Revolving Loans
will then be made available to the Borrowers by the Administrative Agent by
crediting the account of the Borrowers on the books of such office of the
Administrative Agent to the extent of the amount of such Revolving Loans are
made available to the Administrative Agent.
(ii) Because the Borrowers anticipate requesting borrowings of
Revolving Loans on a daily basis and repaying Revolving Loans on a daily basis
through the collection of Accounts and the proceeds of other Collateral,
resulting in the amount of outstanding Revolving Loans fluctuating from day to
day, in order to administer the Revolving Loans in an efficient manner and to
minimize the transfer of funds between the Administrative Agent and the Lenders,
the Lenders hereby instruct the Administrative Agent, and the Administrative
Agent may (but is not obligated to) (A) make available, on behalf of the
Lenders, the full amount of all Revolving Loans requested by the Borrowers (by
telephone, followed by written confirmation) not to exceed $5,000,000 in the
aggregate at any one time outstanding without requiring that the Borrowers give
the Administrative Agent a written Notice of Borrowing with respect to such
borrowing and without giving each Lender prior notice of the proposed borrowing,
of such Lender's Revolving Loan Commitment Percentage thereof and the other
matters covered by the Notice of Borrowing and (B) if the Administrative Agent
has made any such amounts available as provided in clause (A), upon repayment of
Revolving Loans by the Borrowers, apply such amounts repaid directly to the
amounts made available by the Administrative Agent in accordance with clause (A)
and not yet settled as described below; provided that the Administrative Agent
shall not advance funds as described in clause (A) above if the Administrative
Agent has actually received prior to such borrowing (1) an officer's certificate
from the Company or any Borrower pursuant to and in accordance with Section
7.1(d) that a Default or Event of Default is in existence, which Default or
Event of Default has not been cured or waived in accordance with the terms
hereof, or (2) a Notice of Borrowing with respect to such borrowing from any
Borrower wherein the certification provided therein states that the conditions
to the making of the requested Revolving Loans have not been satisfied or (3) a
written notice from any Lender that the conditions to such borrowing have not
been satisfied, which officer's certificate, Notice of Borrowing or notice, in
each case, shall not have been rescinded.
During any Cash Dominion Period, proceeds of Revolving Loans made
pursuant to this Section 2.7(a)(ii) shall be transferred directly to the
Wachovia Funding Account and applied to the payment of controlled disbursement
checks and other appropriate charges to such account designated from time to
time by the Borrowers or as otherwise provided for herein and in the other
Credit Documents. Wire transfers on any Business Day from the Wachovia Funding
Account must be specifically requested by the Borrowers by telecopy by no later
than 1:00 P.M. (Eastern time) on such Business Day.
33
If the Administrative Agent advances Revolving Loans on behalf of the
Lenders, as provided in the immediately preceding paragraphs, the amount of
outstanding Revolving Loans and each Lender's Revolving Loan Commitment
Percentage thereof shall be computed weekly rather than daily and shall be
adjusted upward or downward on the basis of the amount of outstanding Revolving
Loans as of 5:00 P.M. on the Business Day immediately preceding the date of each
computation; provided, however, that the Administrative Agent retains the
absolute right at any time or from time to time to make the aforedescribed
adjustments at intervals more frequent than weekly. The Administrative Agent
shall deliver to each of the Lenders after the end of each week, or such lesser
period or periods as the Administrative Agent shall determine, a summary
statement of the amount of outstanding Revolving Loans for such period (such
week or lesser period or periods being hereafter referred to as a "Settlement
Period"). If the summary statement is sent by the Administrative Agent and
received by the Lenders prior to 12:00 Noon on any Business Day each Lender
shall make the transfers described in the next succeeding sentence no later than
3:00 P.M. on the day such summary statement was sent; and if such summary
statement is sent by the Administrative Agent and received by the Lenders after
12:00 Noon on any Business Day, each Lender shall make such transfers no later
than 3:00 P.M. on the next succeeding Business Day. If in any Settlement Period,
the amount of a Lender's Revolving Loan Commitment Percentage of the Revolving
Loans is in excess of the amount of Revolving Loans actually funded by such
Lender, such Lender shall forthwith (but in no event later than the time set
forth in the next preceding sentence) transfer to the Administrative Agent by
wire transfer in immediately available funds the amount of such excess; and, on
the other hand, if the amount of a Lender's Revolving Loan Commitment Percentage
of the Revolving Loans in any Settlement Period is less than the amount of
Revolving Loans actually funded by such Lender, the Administrative Agent shall
forthwith transfer to such Lender by wire transfer in immediately available
funds the amount of such difference. The obligation of each of the Lenders to
transfer such funds shall be irrevocable and unconditional and without recourse
to or warranty by the Administrative Agent.
Each of the Administrative Agent and the Lenders agree to xxxx their
respective books and records at the end of each Settlement Period to show at all
times the dollar amount of their respective Revolving Loan Commitment
Percentages of the outstanding Revolving Loans. Because the Administrative Agent
on behalf of the Lenders may be advancing and/or may be repaid Revolving Loans
prior to the time when the Lenders will actually advance and/or be repaid
Revolving Loans, interest with respect to Revolving Loans shall be allocated by
the Administrative Agent to each Lender (including the Administrative Agent) in
accordance with the amount of Revolving Loans actually advanced by and repaid to
each Lender (including the Administrative Agent) during each Settlement Period
and shall accrue from and including the date such Revolving Loans are advanced
by the Administrative Agent to but excluding the date such Revolving Loans are
repaid by the Borrowers in accordance with Section 4.3 or actually settled by
the applicable Lender as described in this Section 2.7(a)(ii). For purposes
hereof, the Revolving Loans shall be deemed paid as and to the extent set forth
in Section 3.1(b). All such Revolving Loans shall be made as Base Rate Loans.
(b) [Intentionally Omitted].
(c) Funding of Revolving Loans.
34
No Lender shall be responsible for the failure or delay by any other
Lender in its obligation to make Revolving Loans hereunder; provided, however,
that the failure of any Lender to fulfill its Commitment hereunder shall not
relieve any other Lender of its Commitment hereunder. Unless the Administrative
Agent shall have been notified by any Lender prior to the date of any Revolving
Loan advance pursuant to a Notice of Borrowing that such Lender does not intend
to make available to the Administrative Agent its portion of the Revolving Loan
advance to be made on such date, the Administrative Agent may assume that such
Lender has made such amount available to the Administrative Agent on the date of
such Revolving Loan advance, and the Administrative Agent, in reliance upon such
assumption, may (in its sole discretion without any obligation to do so) make
available to the applicable Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Administrative Agent,
the Administrative Agent shall be entitled to recover such corresponding amount
from such Lender. If such Lender does not pay such corresponding amount
forthwith upon the Administrative Agent's demand therefor, the Administrative
Agent will promptly notify the applicable Borrower and such Borrower shall
immediately pay such corresponding amount to the Administrative Agent. The
Administrative Agent shall also be entitled to recover from such Lender or such
Borrower, as the case may be, interest on such corresponding amount in respect
of each day from the date such corresponding amount was made available by the
Administrative Agent to such Borrower to the date such corresponding amount is
recovered by the Administrative Agent, at a per annum rate equal to the Federal
Funds Rate.
2.8 TERM
The obligation of the Lenders to make Revolving Loans shall expire at the
Administrative Agent's close of business in Charlotte, North Carolina on the
Maturity Date, or such earlier date if the Commitments are terminated pursuant
to Section 11.2. On the Maturity Date, the entire outstanding principal balance
of all amounts outstanding under the Revolving Loan Commitment, together with
accrued but unpaid interest and all other sums owing under this Agreement, shall
be due and payable in full, unless accelerated sooner pursuant to Section 11.2.
With respect to all Letters of Credit outstanding on the Maturity Date (or such
earlier date if the Commitments are terminated pursuant to Section 11.2), if
any, the Credit Parties will immediately pay to the Administrative Agent
sufficient cash, to be held by the Administrative Agent, for the benefit of the
Lenders, in a cash collateral account as security for the LOC Obligations in
respect of subsequent drawings under all then outstanding Letters of Credit in
an aggregate amount equal to 105% of the maximum aggregate amount which may be
drawn under all Letters of Credits then outstanding. Accrued interest on the
cash collateral account shall be for the account of the Borrowers, subject to
the prior payment in full in cash of all of the Obligations.
2.9 REVOLVING NOTES
The Revolving Loans made by each Lender shall be evidenced by a duly
executed promissory note of the applicable Borrower, dated as of the Closing
Date, in an original principal amount equal to such Lender's Revolving Loan
Commitment, and substantially in the form of Exhibit D.
35
2.10 REDUCTION OF REVOLVING LOAN COMMITMENT
Upon at least three (3) Business Days' notice, the Borrowers may from time
to time permanently reduce the Revolving Loan Commitment to an amount no less
than $25,000,000; provided that, (a) such reduction must be in a minimum amount
of $3,000,000 and in integral multiples of $1,000,000 above such amount and (b)
no reduction shall be made which would reduce the Revolving Loan Commitment to
an amount less than the sum of Revolving Loans then outstanding plus LOC
Obligations then outstanding.
ARTICLE III
CASH DOMINION ARRANGEMENTS
3.1 LOCKBOX ARRANGEMENTS
(a) The Borrowers shall have each established and shall maintain one
or more lockboxes (each a "Lockbox") with financial institutions selected by
them and reasonably acceptable to the Administrative Agent (each a "Lockbox
Bank") and shall instruct all account debtors on the Accounts of each Credit
Party to remit all payments to its respective Lockboxes. All amounts received by
the Credit Parties from any account debtor, in addition to all other cash
proceeds from the Collateral, shall be promptly deposited into the applicable
Lockbox Account (as defined below).
(b) Each Credit Party, the Administrative Agent and each Lockbox Bank
shall enter into three party agreements in the form of Exhibit F-1 hereto (each
a "Lockbox Agreement"), providing, among other things, for the following (except
as may otherwise be consented to by the Administrative Agent):
(i) The Credit Parties will open and establish for the benefit of
the Administrative Agent on behalf of the Lenders an account at each Lockbox
Bank (each a "Lockbox Account").
(ii) All receipts of Accounts of the Securitization Companies
held in the Lockboxes shall be remitted daily to the Concentration Account. All
receipts of all other Accounts held in the Lockboxes shall be remitted daily to
the WLV Joining Technologies Account. During any Cash Dominion Period and upon
notice by the Administrative Agent to the Lockbox Bank, so directing (without
further consent by any Borrower) ("Notice of Cash Dominion"), (x) all funds
deposited into the Concentration Account on any Business Day shall be
transferred as follows: (A) so long as the Permitted Securitization is in
effect, to the Securitization Account, with funds transferred to be applied in
accordance with the Intercreditor Agreement (funds payable to the Agent for the
benefit of the Lenders pursuant to the terms hereof and the Intercreditor
Agreement, will be further transferred to the Wachovia Cash Collateral Account)
and (B) after the termination of the Permitted Securitization, to the Wachovia
Cash Collateral Account and (y) all funds deposited into the WLV Joining
Technologies Account on any Business Day shall be transferred to the Wachovia
Cash Collateral Account. All funds deposited prior to 2:00 p.m. (EST) on any
Business Day to the Wachovia Cash Collateral
36
Account shall be applied by the Administrative Agent on the same Business Day to
reduce the then outstanding balance of the Revolving Loans and to pay accrued
interest thereon and to pay any other outstanding Obligations of the Borrowers
which are then due and payable hereunder. All amounts received directly by the
Credit Parties from any account debtor, in addition to all other cash proceeds
from the Collateral, shall be held in trust by the Credit Parties and promptly
deposited into the applicable Lockbox Account during the aforesaid Cash Dominion
Period or, if made by wire transfer, directly to the Concentration Account or
the WLV Joining Technologies Account, as applicable.
(iii) All funds deposited into the Wachovia Cash Collateral
Account and all funds in all Lockbox Accounts during any Cash Dominion Period,
shall, subject to the provisions of the Intercreditor Agreement, immediately
fall under the sole dominion and control of the Administrative Agent, and the
Credit Parties shall obtain the agreement by the Lockbox Banks to waive any
offset rights against the funds so deposited. The Administrative Agent assumes
no responsibility for the Lockbox arrangements, including without limitation,
any claim of accord and satisfaction or release with respect to deposits
accepted by the Lockbox Banks thereunder.
(iv) Prior to a Cash Dominion Period, the Credit Parties may
close Lockboxes and/or open new Lockboxes with the prior written consent of the
Administrative Agent and subject to prior execution and delivery to the
Administrative Agent of Lockbox Agreements consistent with the provisions of
this Section 3.1(b) and in form and substance satisfactory to the Administrative
Agent. The Company shall have the right to close account number XXX-XXXX (Tube
Forming Operating Account) and account number XXX-XXXX (STP Operating Account).
(v) Notwithstanding the foregoing to the contrary, with respect
to Lockboxes and related Lockbox Accounts in existence prior to the Closing
Date, the Borrowers may, in lieu of entering into a Lockbox Agreement, deliver a
Blocked Account Agreement, countersigned by the applicable Lockbox Bank.
(c) The Borrowers hereby authorize each Lender to charge from time to
time against any or all of the Credit Parties' accounts with such Lender any of
the Obligations which are then due and payable by such Borrowers. Each Lender
receiving any payment as a result of charging any such account shall promptly
notify the Administrative Agent thereof and make such arrangements as the
Administrative Agent shall request to share the benefit thereof in accordance
with Section 4.8.
3.2 [INTENTIONALLY OMITTED]
3.3 MAINTENANCE OF ACCOUNT
The Agent shall maintain an account on its books in the name of the
Borrowers in which such Borrowers will be charged with all loans and advances
made by the applicable Lenders to such Borrowers or for such Borrowers' account,
including the Revolving Loans, the LOC Obligations, and any other Obligations,
including any and all costs, expenses and attorney's fees which the Agent may
incur, including, without limitation, in connection with the exercise by or
37
for the Lenders of any of the rights or powers herein conferred upon the Agent
(other than in connection with any assignments or participations by any Lender)
or in the prosecution or defense of any action or proceeding by or against any
Borrower, any other Credit Party or the Lenders concerning any matter arising
out of, connected with, or relating to this Credit Agreement or the Accounts, or
any Obligations owing to the Lenders by any Borrower. The Borrowers will be
credited in accordance with Section 3.1 or 3.2 above, as applicable, with all
amounts received by the Lenders from the Borrowers or from others for the
Borrowers' account, including, as above set forth, all amounts received by the
Agent in payment of Accounts. In no event shall prior recourse to any Accounts
or other Collateral be a prerequisite to the Agent's right to demand payment of
any Obligation upon its maturity. Further, it is understood that the Agent shall
have no obligation whatsoever to perform in any respect any of the Credit
Parties' contracts or obligations relating to the Accounts.
3.4 STATEMENT OF ACCOUNT
After the end of each month the Agent shall send the applicable Borrowers
(directed to the Borrowers' Huntsville, Alabama office) a statement showing the
accounting for the charges, loans, advances and other transactions occurring
between the Lenders and the applicable Borrowers during that month. The monthly
statements, absent manifest error, shall be deemed correct and binding upon the
applicable Borrowers and shall constitute an account stated between the
applicable Borrowers and the Lenders unless the Agent receives a written
statement of the applicable Borrowers' exceptions within thirty (30) days after
same is mailed to the applicable Borrowers.
ARTICLE IV
ADDITIONAL PROVISIONS REGARDING LOANS AND LETTERS OF CREDIT
4.1 CONTINUATIONS AND CONVERSIONS
(a) Borrowers. The Borrowers shall have the option, on any Business
Day, to continue an existing Eurodollar Loan into a subsequent Interest Period,
to convert a Base Rate Loan or LMIR Loan into a Eurodollar Loan or to convert a
Eurodollar Loan into a Base Rate Loan or LMIR Loan; provided, however, that (i)
each such continuation must be requested by the Borrowers pursuant to a written
Notice of Continuation/Conversion, in the form of Exhibit C, in compliance with
the terms set forth below and (ii) except as provided in Section 4.11,
Eurodollar Loans may be converted into Base Rate Loans or LMIR Loans only on the
last day of an Interest Period applicable thereto; (iii) Eurodollar Loans may be
continued and Base Rate Loans and LMIR Loans may be converted into Eurodollar
Loans only if no Default or Event of Default is in existence on the date of
continuation or conversion; and (iv) failure by the Borrowers to properly
continue a Eurodollar Loan at the end of an Interest Period shall be deemed a
conversion to a Base Rate Loan. Each continuation or conversion must be
requested by the Borrowers, directed to the Administrative Agent at the address
set forth on Schedule 1.1A hereto, no later than 11:00 a.m., (A) on the date of
a requested conversion of a Eurodollar Loan to a Base Rate Loan or LMIR Loan or
(B) three (3) Business Days prior to the date of a requested continuation of a
Eurodollar Loan or conversion of a Base Rate Loan or LMIR Loan to a Eurodollar
Loan, in each case pursuant to a written Notice of Continuation/Conversion
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submitted to the Administrative Agent which shall set forth (x) whether the
applicable Borrower wishes to continue or convert such Loans and (y) if the
request is to continue a Eurodollar Loan or convert a Base Rate Loan or LMIR
Loan to a Eurodollar Loan, the Interest Period applicable thereto. The
Administrative Agent shall give each Lender notice as promptly as practicable of
any such proposed extension or conversion pursuant to this section.
(b) [Intentionally Omitted].
4.2 INTEREST
(a) Interest Rate. All Base Rate Loans shall accrue interest at the
Base Rate, plus the Applicable Percentage. All LMIR Loans shall accrue interest
at the LMIR, plus the Applicable Percentage. All Eurodollar Loans shall accrue
interest at the Adjusted Eurodollar Rate for the applicable Interest Period.
(b) Default Rate of Interest. Upon the occurrence, and during the
continuance, of an Event of Default, the principal of and, to the extent
permitted by law, interest on the Loans and any other amounts owing (but not
timely paid) hereunder or under the other Credit Documents (including without
limitation fees and expenses) may, at the election of the Administrative Agent,
and shall at the direction of the Required Lenders, bear interest, payable on
demand, at a per annum rate equal to the Base Rate, plus the sum of the
Applicable Percentage for Base Rate Loans and two percent (2%) per annum.
(c) Interest Payments. Interest on Loans shall be due and payable in
arrears on each Interest Payment Date. If an Interest Payment Date falls on a
date which is not a Business Day, such Interest Payment Date shall be deemed to
be the next succeeding Business Day, except that in the case of Eurodollar Loans
where the next succeeding Business Day falls in the next succeeding calendar
month, then on the next preceding day.
(d) Computation of Interest. All computations of interest hereunder on
the Loans shall be made on the basis of the actual number of days elapsed over a
year of 360 days.
4.3 PLACE AND MANNER OF PAYMENTS
All payments of principal, interest, fees, expenses and other amounts to be
made by the Borrowers under this Agreement (including, but not limited to, the
Revolving Loans) shall be received not later than 2:00 p.m. (EST), on the date
when due in U.S. Dollars and in immediately available funds or by direct charge
against the Revolving Loan Commitment, if available, pursuant to Section 3.1(b)
hereof, in each case, without setoff, deduction, counterclaim or withholding of
any kind, by the Administrative Agent at its offices located at the address set
forth on Schedule 1.1A hereto. A Borrower shall, at the time it makes any
payment under this Agreement, specify to the Administrative Agent, the Loans,
Letters of Credit, fees or other amounts payable by the Borrowers hereunder to
which such payment is to be applied (and in the event that it fails to specify,
or if such application would be inconsistent with the terms hereof, the
Administrative Agent shall distribute such payment to the Lenders in the manner
described in Section 4.6). The Administrative Agent will distribute such
payments to the applicable Lenders on the date of receipt if any such payment is
received prior to 2:00 p.m. (EST time); otherwise the Administrative Agent will
distribute such payment to the applicable Lenders on the next succeeding
Business Day. The Borrowers'
39
obligations to the Lenders with respect to such payments shall be discharged by
making such payments to the applicable agent pursuant to this Section 4.3 or if
not timely paid or an Event of Default then exists, may be added to the
principal amount of the Revolving Loans outstanding. Whenever any payment
hereunder shall be stated to be due on a day which is not a Business Day, the
due date thereof shall be extended to the next succeeding Business Day (subject
to accrual of interest and fees for the period of such extension), except that
in the case of Eurodollar Loans, if the extension would cause the payment to be
made in the next following calendar month, then such payment shall instead be
made on the next preceding Business Day.
4.4 PREPAYMENTS
(a) Voluntary Prepayments. The Borrowers shall have the right to
prepay Revolving Loans in whole or in part from time to time without premium or
penalty; provided, however, that (i) Eurodollar Loans may only be prepaid on
three (3) Business Day's prior written notice to the Administrative Agent, and
any prepayment of Eurodollar Loans will be subject to Section 4.14 and (ii) each
such partial prepayment of Eurodollar Loans shall be in the minimum principal
amount of $1,000,000. Amounts prepaid under this Section 4.4(a) shall be applied
as the Borrowers may elect; provided, that if the Borrowers shall fail to
specify a voluntary prepayment as to the Revolving Loans then such prepayment
shall be applied first to Base Rate Loans, second to LMIR Loans and then to
Eurodollar Loans in direct order of Interest Period maturities.
(b) Mandatory Prepayments.
(i) Revolving Loan Overadvance. If, at any time (A) the Revolving
Loans outstanding plus the LOC Obligations outstanding plus IRPA Obligations
exceed the lesser of the Borrowing Base and the Revolving Loan Commitment; or
(B) all Indebtedness for borrowed money of the Company or any Subsidiary of the
Company hereunder in an aggregate principal amount which, together with the
aggregate amount of Attributable Indebtedness deemed to be outstanding in
respect of all Sale/Leaseback Transactions entered into pursuant to clause (a)
Section 4.4 of the 2008 Senior Note Indenture (exclusive of any such
Sale/Leaseback Transaction otherwise permitted under clauses (a) through (h) of
such Indenture), shall exceed 10% of Consolidated Net Tangible Assets (with each
of the defined terms used in this subsection (B) having the meaning assigned to
such terms in the 2008 Senior Note Indenture), then the Borrowers (or the
applicable Borrower) shall immediately make a payment hereunder in an amount
equal to such excess. Payments made under (A) and (B) shall be applied first pro
rata to Base Rate Loans, second to LMIR Loans and then to Eurodollar Loans in
direct order of Interest Period maturities.
(ii) Asset Sales. Immediately upon the receipt by any Credit
Party of proceeds from any (A) Asset Disposition, the Borrowers shall prepay the
Loans in an amount equal to 100% of the Net Proceeds of such Asset Disposition
(such prepayment to be applied as set forth in Section 4.4(c) below) or (B) any
sale, transfer or other disposition of assets or properties permitted by Section
9.5(f), the Borrowers shall use all net proceeds (but not amounts other than net
proceeds) to prepay the Loans in an amount necessary to cause Excess
Availability immediately following such prepayment to be at a
40
minimum $10,000,000 (such prepayment to be applied as set forth in Section
4.4(c)) and any remaining net proceeds may be used as permitted herein.
(iii) Casualty Loss. To the extent of cash proceeds received in
connection with a Casualty Loss by any Credit Party with respect to the
Collateral, the Borrowers shall prepay the Loans in an amount equal to one
hundred percent (100%) of such cash proceeds if the Administrative Agent shall
have elected to apply the proceeds realized from such Casualty Loss to the
prepayment of the Loans (such prepayment to be applied as set forth in Section
4.4(c) below).
(c) Application of Certain Prepayments. All amounts required to prepay
Loans pursuant to Section 4.4(b)(ii) or (iii) above shall be applied to the
Revolving Loans (first to Base Rate Loans, second to LMIR Loans and then to
Eurodollar Loans in direct order of maturities). All prepayments shall be
subject to Section 4.14.
4.5 FEES
(a) Unused Fees. In consideration of the Revolving Loan Commitment
being made available by the Lenders hereunder, the Borrowers agree to pay to the
Administrative Agent, for the account of the Lenders, a per annum fee equal to
the Applicable Percentage for the Unused Fees (calculated on the basis of the
actual number of days elapsed in a 360 day year) on the Unutilized Revolving
Commitment (the "Unused Fees"). The accrued Unused Fees shall be due and payable
quarterly in arrears on the last day of each calendar quarter (as well as on the
Maturity Date and on any date that a Revolving Loan Commitment is reduced) for
the calendar quarter then ending (or portion thereof), beginning with the first
of such dates to occur after the Closing Date.
(b) Letter of Credit Fees.
(i) Letter of Credit Fee. In consideration of the issuance of
Letters of Credit hereunder, the Borrowers agree to pay to the applicable
Issuing Lender in respect of outstanding Letters of Credit for the pro rata
benefit of the Lenders (based on each Lender's Revolving Loan Commitment
Percentage of the Revolving Loan Commitment (calculated on the basis of the
actual number of days elapsed in a 360 day year)), an annual fee (the "Letter of
Credit Fee") equal to the Applicable Percentage for the Letter of Credit Fee on
the average daily maximum amount available to be drawn under each such Letter of
Credit from the date of issuance to the date of expiration. The Letter of Credit
Fee will be payable quarterly in arrears on the last day of each calendar
quarter and on the Maturity Date.
(ii) Issuing Lender Fee. In addition to the Letter of Credit Fees
payable pursuant to subsection (i) above, each of the Borrowers shall pay to the
applicable Issuing Lender for its own account, without sharing by the other
Lenders, a fee equal to one-eighth of one percent (0.125%) per annum on the
total sum of all Letters of Credit issued by the Issuing Lender, such fee to be
paid quarterly in arrears on the last day of each calendar quarter (as well as
on the Maturity Date) (the "Issuing Lender Fee").
41
(c) Administrative Fees. The Borrowers agree to pay to the
Administrative Agent, for its own account, an annual fee as agreed to between
the Borrowers and the Administrative Agent in the Administrative Agent Fee
Letter.
(d) Authorization to Charge Account. The Borrowers hereby authorize
the Administrative Agent to charge the Borrowers' Revolving Loan accounts with
the amount of all payments and fees and expenses due hereunder to the Lenders,
the Administrative Agent, and the Issuing Lender as and when such payments
become due. The Borrowers confirm that any charges which the Agent may so make
to the Borrowers' Revolving Loan accounts as herein provided will be made as an
accommodation to the Borrowers and solely at the Agent's discretion.
4.6 PRO RATA TREATMENT
Except to the extent otherwise provided herein:
(a) Loans. Each Revolving Loan borrowing (including, without
limitation, each Mandatory Borrowing), each payment or prepayment of principal
of any Loan, each payment of fees (other than the Issuing Lender Fee retained by
each of the Issuing Lenders for its own account and the administrative fees
retained by the Administrative Agent for its own account), each reduction of the
Revolving Loan Commitment, and each conversion or continuation of any Loan,
shall be allocated pro rata among the relevant Lenders in accordance with the
respective Revolving Loan Commitment Percentages of such Lenders; it being
understood that payments under the Revolving Loans shall be allocated pro rata
among the Lenders (or, if the Commitments of such Lenders have expired or been
terminated, in accordance with the respective principal amounts of the
outstanding Loans and Participation Interests of such Lenders); provided that,
if any Lender shall have failed to pay its applicable pro rata share of any
Revolving Loan, then any amount to which such Lender would otherwise be entitled
pursuant to this subsection (a) shall instead be payable to the Administrative
Agent; provided further, that in the event any amount paid to any Lender
pursuant to this subsection (a) is rescinded or must otherwise be returned by
the Administrative Agent, each Lender shall, upon the request of the
Administrative Agent, repay to the Administrative Agent the amount so paid to
such Lender, with interest for the period commencing on the date such payment is
returned by the Administrative Agent until the date the Administrative Agent
receives such repayment at a rate per annum equal to, during the period to but
excluding the date two (2) Business Days after such request, the Federal Funds
Rate, and thereafter, the Base Rate plus two percent (2%) per annum; and
(b) Letters of Credit. Each payment of unreimbursed drawings in
respect of LOC Obligations shall be allocated to each Lender pro rata in
accordance with its Lender Revolving Loan Commitment Percentage; provided that,
if any Lender shall have failed to pay its applicable pro rata share of any
drawing under any Letter of Credit, then any amount to which such Lender would
otherwise be entitled pursuant to this subsection (b) shall instead be payable
to the Issuing Lender; provided further, that in the event any amount paid to
any Lender pursuant to this subsection (b) is rescinded or must otherwise be
returned by the Issuing Lender, each Lender shall, upon the request of the
Issuing Lender, repay to the Administrative Agent for the account of the Issuing
Lender the amount so paid to such Lender, with interest for the period
42
commencing on the date such payment is returned by the Issuing Lender until the
date the Issuing Lender receives such repayment at a rate per annum equal to,
during the period to but excluding the date two (2) Business Days after such
request, the Federal Funds Rate, and thereafter, the Base Rate, plus two percent
(2%) per annum.
4.7 ALLOCATION OF PAYMENTS AFTER EVENT OF DEFAULT
Notwithstanding any other provisions of this Agreement, after the
occurrence and during the continuance of an Event of Default, all amounts
collected or received by the Agent or any Lender on account of amounts
outstanding under any of the Credit Documents or in respect of the Collateral
shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of the Agent
in connection with enforcing the rights of the Lenders under the Credit
Documents and any protective advances made by the Agent with respect to the
Collateral under or pursuant to the terms of the Security Documents;
SECOND, to payment of any fees owed to the Agent or an Issuing Lender
hereunder or under any other Credit Document;
THIRD, to the payment of all reasonable out-of-pocket costs and
expenses, (including, without limitation, reasonable attorneys' fees) of each of
the Lenders in connection with enforcing its rights under the Credit Documents;
FOURTH, to the payment of all accrued fees and interest payable to the
Lenders hereunder;
FIFTH, to the payment of the outstanding principal amount of the
Loans, to the payment or cash collateralization of the outstanding LOC
Obligations (in an amount equal to 105% of the aggregate amount thereof), and
all obligations of the Credit Parties in respect of Interest Rate Protection
Agreements, pro rata, as set forth below;
SIXTH, to all other Obligations which shall have become due and
payable under the Credit Documents and not repaid pursuant to clauses "FIRST"
through "FIFTH" above;
SEVENTH, to all other Obligations which shall have become due and
payable and not repaid pursuant to clauses "FIRST" through "SIXTH" above; and
EIGHTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
In carrying out the foregoing, (a) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (b) each of the Lenders shall receive an amount equal to
its pro rata share (based on the proportion that its then outstanding Revolving
Loans, LOC Obligations and, in the case of clause "FIFTH," obligations
outstanding under the Interest Rate Protection Agreements, bears to the
aggregate then outstanding Revolving Loans, LOC Obligations, and, in the case of
clause "FIFTH," obligations
43
outstanding under Interest Rate Protection Agreements) of amounts available to
be applied pursuant to clauses "THIRD", "FOURTH," "FIFTH," and "SIXTH" above;
and (c) to the extent that any amounts available for distribution pursuant to
clause "FIFTH" above are attributable to the issued but undrawn amount of
outstanding Letters of Credit, such amounts shall be held by the Administrative
Agent in a cash collateral account and applied (x) first, to reimburse the
Issuing Lender from time to time for any drawings under such Letters of Credit
and (y) then, following the expiration of all Letters of Credit, to all other
obligations of the types described in clauses "FIFTH", "SIXTH" and "SEVENTH"
above in the manner provided in this Section 4.7 and in the Security Documents.
4.8 SHARING OF PAYMENTS
The Lenders agree among themselves that, except to the extent otherwise
provided herein, in the event that any Lender shall obtain payment in respect of
any Loan, unreimbursed drawing with respect to any LOC Obligations or any other
obligation owing to such Lender under this Agreement through the exercise of a
right of setoff, banker's lien or counterclaim, or pursuant to a secured claim
under Section 506 of the U.S. Bankruptcy Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, in excess of its pro rata share of such payment as provided for
in this Agreement, such Lender shall promptly pay in cash or purchase from the
other applicable Lenders a participation in such Loans, LOC Obligations, and
other obligations in such amounts, and make such other adjustments from time to
time, as shall be equitable to the end that all Lenders share such payment in
accordance with their respective ratable shares as provided for in this
Agreement. The Lenders further agree among themselves that if payment to a
Lender obtained by such Lender through the exercise of a right of setoff,
banker's lien, counterclaim or other event as aforesaid shall be rescinded or
must otherwise be restored, each applicable Lender which shall have shared the
benefit of such payment shall, by payment in cash or a repurchase of a
participation theretofore sold, return its share of that benefit (together with
its share of any accrued interest payable with respect thereto) to each Lender
whose payment shall have been rescinded or otherwise restored. The Borrowers
agree that any Lender so purchasing such a participation may, to the fullest
extent permitted by law, exercise all rights of payment, including setoff,
banker's lien or counterclaim, with respect to such participation as fully as if
such Lender were a holder of such Loan, LOC Obligation, or other obligation in
the amount of such participation. Except as otherwise expressly provided in this
Agreement, if any Lender shall fail to remit to the Agent or any other Lender an
amount payable by such Lender to the Agent or such other Lender pursuant to this
Agreement on the date when such amount is due, such payments shall be made
together with interest thereon for each date from the date such amount is due
until the date such amount is paid to the Agent or such other Lender at a rate
per annum equal to the Federal Funds Rate. If under any applicable bankruptcy,
insolvency or other similar law, any Lender receives a secured claim in lieu of
a setoff to which this Section 4.8 applies, such Lender shall, to the extent
practicable, exercise its rights in respect of such secured claim in a manner
consistent with the rights of the Lenders under this Section 4.8 to share in the
benefits of any recovery on such secured claim.
44
4.9 CAPITAL ADEQUACY
If, after the date hereof, any Lender has determined that the adoption or
the becoming effective of, or any change in, or any change by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof in the interpretation or administration of, any
applicable law, rule or regulation regarding capital adequacy, or compliance by
such Lender, or its parent corporation, with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on such Lender's (or parent corporation's) capital or assets as a
consequence of its commitments or obligations hereunder to a level below that
which such Lender, or its parent corporation, could have achieved but for such
adoption, effectiveness, change or compliance (taking into consideration such
Lender's (or parent corporation's) policies with respect to capital adequacy),
then, upon notice from such Lender to the Borrowers, the Borrowers shall be
obligated to pay to such Lender such additional amount or amounts as will
compensate such Lender on an after-tax basis (after taking into account
applicable deductions and credits in respect of the amount indemnified) for such
reduction. Each determination by any such Lender of amounts owing under this
Section shall, absent manifest error, be conclusive and binding on the parties
hereto. This covenant shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.
4.10 INABILITY TO DETERMINE INTEREST RATE
(a) If prior to the first day of any Interest Period, (i) the
Administrative Agent shall have determined in good faith (which determination
shall be conclusive and binding upon the Borrowers) that, by reason of
circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate for such Interest Period, (ii)
the Administrative Agent has received notice from the Required Lenders that the
Eurodollar Rate determined or to be determined for such Interest Period will not
adequately and fairly reflect the cost to such Lenders of making or maintaining
their Eurodollar Loans during such Interest Period, or (iii) U.S. Dollar
deposits in the principal amounts of the Eurodollar Loans to which such Interest
Period is to be applicable are not generally available in the London interbank
market, the Administrative Agent shall give telecopy or telephonic notice
thereof to the Borrowers and the Lenders as soon as practicable thereafter, and
will also give prompt written notice to the Borrowers when such conditions no
longer exist. If such notice is given, (A) any Eurodollar Loans requested to be
made on the first day of such Interest Period shall be made as Base Rate Loans,
(B) any Revolving Loans that were to have been converted on the first day of
such Interest Period to or continued as Eurodollar Loans shall be converted to
or continued as Base Rate Loans and (C) each outstanding Eurodollar Loan shall
be converted, on the last day of the then-current Interest Period thereof, to
Base Rate Loans. Until such notice has been withdrawn by the Administrative
Agent, no further Eurodollar Loans shall be made or continued as such, nor shall
the Borrowers have the right to convert Base Rate Loans or LMIR Loans to
Eurodollar Loans.
(b) [Intentionally Omitted]
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4.11 ILLEGALITY
Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
occurring after the Closing Date shall make it unlawful for any Lender to make
or maintain Eurodollar Loans as contemplated by this Agreement, (a) such Lender
shall promptly give written notice of such circumstances to the Borrowers and
the Administrative Agent (which notice shall be withdrawn whenever such
circumstances no longer exist), (b) the commitment of such Lender hereunder to
make Eurodollar Loans, continue Eurodollar Loans as such and convert a Base Rate
Loan or LMIR Loan to Eurodollar Loans shall forthwith be suspended and, until
such time as it shall no longer be unlawful for such Lender to make or maintain
Eurodollar Loans, such Lender shall then have a commitment only to make a Base
Rate Loan when a Eurodollar Loan is requested and (c) such Lender's Loans then
outstanding as Eurodollar Loans, if any, shall be converted automatically to
Base Rate Loans on the respective last days of the then current Interest Periods
with respect to such Loans or within such earlier period as required by law. If
any such conversion of a Eurodollar Loan occurs on a day which is not the last
day of the then current Interest Period with respect thereto, the Borrowers
shall pay to such Lender such amounts, if any, as may be required pursuant to
Section 4.14.
4.12 REQUIREMENTS OF LAW
If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof applicable to any Lender, or compliance by
any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority, in each case made
subsequent to the Closing Date (or, if later, the date on which such Lender
becomes a Lender):
(a) shall subject such Lender to any tax of any kind whatsoever with
respect to any Letter of Credit or any Loans made or issued by it or its
obligation to make or issue any of the foregoing, or change the basis of
taxation of payments to such Lender in respect thereof (except for Non-Excluded
Taxes covered by Section 4.13 and changes in taxes measured by or imposed upon
the overall net income, or franchise tax imposed in lieu of such net income tax,
of such Lender or its applicable lending office, branch, or any affiliate
thereof);
(b) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by, deposits
or other liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other acquisition of funds by, any office of
such Lender which is not otherwise included in the determination of the
Eurodollar Rate hereunder; or
(c) shall impose on such Lender any other condition (excluding any tax
of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender, acting reasonably, deems to be material, of
making, converting into, continuing or maintaining Loans or issuing or
participating in Letters of Credit or to reduce any amount receivable hereunder
in respect thereof, then, in any such case, upon notice to the Borrowers from
such Lender, through the Agent, in accordance herewith, the Borrowers shall be
obligated
46
to promptly pay such Lender, upon its demand, any additional amounts necessary
to compensate such Lender on an after-tax basis (after taking into account
applicable deductions and credits in respect of the amount indemnified) for such
increased cost or reduced amount receivable, provided that, in any such case,
the Borrowers may elect to convert the Eurodollar Loans made by such Lender
hereunder to Base Rate Loans by giving the Administrative Agent at least one (1)
Business Day's notice of such election, in which case the Borrowers shall
promptly pay to such Lender, upon demand, without duplication, such amounts, if
any, as may be required pursuant to Section 4.14. If any Lender becomes entitled
to claim any additional amounts pursuant to this Section 4.12, it shall provide
prompt notice thereof to the Borrowers, through the Administrative Agent,
certifying (x) that one of the events described in this Section 4.12 has
occurred and describing in reasonable detail the nature of such event, (y) as to
the increased cost or reduced amount resulting from such event and (z) as to the
additional amount demanded by such Lender and a reasonably detailed explanation
of the calculation thereof. Such a certificate as to any additional amounts
payable pursuant to this Section 4.12 submitted by such Lender, through the
Administrative Agent, to the Borrowers shall be conclusive and binding on the
parties hereto in the absence of manifest error. This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
4.13 TAXES
(a) Except as provided below in this Section 4.13, all payments made
by the Borrowers under this Agreement, any Notes and any documents relating
hereto shall be made free and clear of, and without deduction or withholding for
or on account of, any present or future income, stamp or other taxes, levies,
imposts, duties, charges, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any court, or governmental
body, agency or other official, including interest, penalties and liabilities
with respect thereto ("Taxes"), excluding taxes measured by or imposed upon the
overall net income of any Lender or its applicable lending office, or any branch
or affiliate thereof, and all franchise taxes, branch taxes, taxes on doing
business or taxes on the overall capital or net worth of any Lender or its
applicable lending office, or any branch or affiliate thereof, in each case
imposed in lieu of net income taxes (other than franchise taxes), imposed: (i)
by the jurisdiction under the laws of which such Lender, applicable lending
office, branch or affiliate is organized or is located, or in which its
principal executive office is located, or any nation within which such
jurisdiction is located or any political subdivision thereof; or (ii) by reason
of any connection between the jurisdiction imposing such tax and such Lender,
applicable lending office, branch or affiliate other than a connection arising
solely from such Lender having executed, delivered or performed its obligations,
or received payment under or enforced, this Agreement or any Notes. If any such
non-excluded Taxes, ("Non-Excluded Taxes") are required to be withheld from any
amounts payable to the Agent or any Lender hereunder or under any Notes or other
documents relating thereto, (A) the Borrowers shall withhold and remit such
Taxes to the relevant authority when and as due, (B) the amounts so payable to
the Agent or such Lender shall be increased to the extent necessary to yield to
the Agent or such Lender (after payment of all Non-Excluded Taxes, including
Non-Excluded Taxes in respect of additional amounts payable hereunder) interest
or any such other amounts payable hereunder or under the Notes or any other
document relating hereto at the rates or in the amounts specified in this
Agreement and any Notes, provided, however, that the Borrowers shall be entitled
to deduct and withhold any Non-Excluded Taxes and shall not be required to
increase any such amounts payable to any Lender
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that is not organized under the laws of the United States of America or a state
thereof if such Lender fails to comply with the requirements of paragraph (b) of
this Section 4.13 whenever any Non-Excluded Taxes are payable by the Borrowers,
and (C) as promptly as possible thereafter the Borrowers shall send to such
Agent for its own account or for the account of such Lender, as the case may be,
a certified copy of an original official receipt received by the Borrowers
showing prompt payment thereof. If the Borrowers fail to pay any Non-Excluded
Taxes when due to the appropriate taxing authority or fails to remit to the
Administrative Agent the required receipts or other required documentary
evidence, the Borrowers shall indemnify the Agent and any Lender for any
incremental Taxes, interest or penalties that may become payable by the Agent or
any Lender as a result of any such failure. If a Lender shall change its office
that makes or maintains a Loan hereunder, the Borrowers shall not be required to
pay any increased amounts to the Lender in respect of any Non-Excluded Taxes
pursuant to this Section 4.13 over and above any obligation to withhold or
deduct any amount with respect to such Non-Excluded Taxes that existed on the
date the Lender changed such office, unless the Lender changed the office at the
request of the Borrowers in which case the Borrower shall indemnify the Lender
in respect of such increased amounts. The agreements in this subsection shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof shall:
(i) (A) on or before the date of any payment by the Borrowers
under this Agreement or Notes to such Lender, deliver to the Borrowers and the
Administrative Agent two duly completed copies of United States Internal Revenue
Service Form W-8BEN, W-8ECI, W-8 EXP, W-8IMY or W-9 (or successor thereto or
other appropriate form), or successor applicable form, as the case may be,
certifying that it is entitled to receive payments under this Agreement and any
Notes without deduction, withholding or backup withholding of any United States
federal income taxes;
(B) deliver to the Borrowers and the Administrative Agent two
further copies of any such form or certification on or before the date
that any such form or certification expires or becomes obsolete and
after the occurrence of any event requiring a change in the most
recent form previously delivered by it to the Borrowers; and
(C) obtain such extensions of time for filing and complete such
forms or certifications as may reasonably be requested by the
Borrowers or the Administrative Agent; or
(ii) in the case of any such Lender that is not a "bank" within
the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (A) represent
to the Borrowers (for the benefit of the Borrowers and the Administrative Agent)
that (x) it is not a bank within the meaning of Section 881(c)(3)(A) of the
Internal Revenue Code, is not subject to regulatory or other legal requirements
as a bank in any jurisdiction, and has not been treated as a bank for purposes
of any tax, securities law or other filing or submission made to any
governmental authority, any application made to a rating agency
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or qualification for any exemption from any tax, securities law or other legal
requirements, (y) is not a 10-percent shareholder for purposes of section
881(c)(3)(B) of the Internal Revenue Code and (z) is not a controlled foreign
corporation receiving interest from a related person for purposes of Section
881(c)(3)(C) of the Internal Revenue Code, (B) agree to furnish to the
Borrowers, on or before the date of any payment by the Borrowers, with a copy to
the Administrative Agent, two accurate and complete original signed copies of
Internal Revenue Service Form W-8BEN, W-8ECI, W-8EXP or W-8IMY, (or successor
applicable form) certifying to such Lender's legal entitlement at the date of
such certificate to an exemption from U.S. withholding tax under the provisions
of Section 881(c) of the Internal Revenue Code with respect to payments to be
made under this Agreement and any Notes (and to deliver to the Borrowers and the
Administrative Agent two further copies of such form on or before the date it
expires or becomes obsolete and after the occurrence of any event (including a
change in its applicable lending office) requiring a change in the most recently
provided form and, if necessary, obtain any extensions of time reasonably
requested by the Borrowers or the Administrative Agent for filing and completing
such forms), and (C) agree, to the extent legally entitled to do so, upon
reasonable request by the Borrowers, to provide to the Borrowers (for the
benefit of the Borrowers and the Administrative Agent) such other forms as may
be reasonably required in order to establish the legal entitlement of such
Lender to an exemption from withholding with respect to payments under this
Agreement and any Notes.
Notwithstanding the above, if any change in treaty, law or regulation has
occurred after the date such Person becomes a Lender hereunder which renders all
such forms inapplicable or which would prevent such Lender from duly completing
and delivering any such form with respect to it and such Lender so advises the
Borrowers and the Administrative Agent then such Lender shall be exempt from
such requirements. Each such Lender will promptly notify the Administrative
Agent and the Borrowers of any changes in circumstances that could reasonably
modify or render invalid any claimed exemption. Each Person that shall become a
Lender or a participant of a Lender pursuant to Section 14.3 shall, upon the
effectiveness of the related transfer, be required to provide all of the forms,
certifications and statements required pursuant to this subsection (b); provided
that in the case of a participant of a Lender, the obligations of such
participant of a Lender pursuant to this subsection (b) shall be determined as
if the participant of a Lender were a Lender except that such participant of a
Lender shall furnish all such required forms, certifications and statements to
the Lender from which the related participation shall have been purchased.
(c) If any such Taxes shall be or become applicable after the date of
this Agreement to such payments by the Borrowers to a Lender, such Lender shall
use reasonable efforts to make, fund or maintain the Loan or Loans, as the case
may be, through another lending office located in another jurisdiction so as to
reduce, to the fullest extent possible, the Borrowers' liability hereunder, if
the making, funding or maintenance of such Loan or Loans through such other
office does not, in the reasonable judgment of the Lender, materially affect the
Lender of such Loan. If the Borrowers are required to make any additional
payment to a Lender pursuant to this Section 4.13, and any such Lender receives,
or is entitled to receive, a credit against, remission for, or repayment of, any
tax paid or payable by it in respect of, or calculated with
49
reference to, the taxes giving rise to such payment, such Lender shall, within a
reasonable time after it receives such credit, relief, remission or repayment,
reimburse the Borrowers the amount of any such credit, relief, remission or
repayment.
4.14 COMPENSATION
The Borrowers promise to indemnify each Lender and to hold each Lender
harmless from any loss or expense which such Lender may sustain or incur (other
than through such Lender's gross negligence or willful misconduct) as a
consequence of (a) default by a Borrower in making a borrowing of, conversion
into or continuation of Eurodollar Loans after such Borrower has given a notice
requesting the same in accordance with the provisions of this Agreement, (b)
default by a Borrower in making any prepayment of a Eurodollar Loan after such
Borrower has given a notice thereof in accordance with the provisions of this
Agreement and (c) the making of a prepayment of Eurodollar Loans on a day which
is not the last day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to (i) the amount of interest which
would have accrued on the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment or of such failure to
borrow, convert or continue to the last day of the applicable Interest Period
(or, in the case of a failure to borrow, convert or continue, the Interest
Period that would have commenced on the date of such failure) in each case at
the applicable rate of interest for such Eurodollar Loans provided for herein
(excluding, however, the Applicable Percentage included therein, if any) minus
(ii) the amount of interest (as reasonably determined by such Lender) which
would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank Eurodollar
market. Such a certificate as to any amounts payable pursuant to this Section
4.14 submitted by a Lender, through the Administrative Agent to the Lenders,
shall be conclusive and binding in the absence of manifest error. The agreements
in this Section shall survive the termination of this Agreement and the payment
of the Loans and all other amounts payable hereunder.
ARTICLE V
CONDITIONS PRECEDENT
5.1 CLOSING CONDITIONS
The obligation of the Lenders to enter into this Agreement is subject to
satisfaction of the following conditions (in form and substance acceptable to
the Administrative Agent):
(a) Executed Credit Documents. Receipt by the Administrative Agent of
duly executed copies of (i) this Agreement; (ii) the Revolving Credit Notes;
(iii) the Security Agreement; (iv) the Pledge Agreement; and (v) all other
Credit Documents. The Security Agreement shall have been amended to provide for,
among other things, the springing lien on the equipment (as such term is defined
in the UCC) of the Credit Parties.
(b) No Default; Representations and Warranties. As of the Closing Date
(i) there shall exist no Default or Event of Default and (ii) all
representations and warranties contained herein and in the other Credit
Documents shall be true and correct in all material respects.
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(c) Opinion of Counsel. Receipt by the Administrative Agent of an
opinion, or opinions, in form and substance satisfactory to the Administrative
Agent, addressed to the Agent on behalf of the Lenders and dated as of the
Closing Date, from legal counsel to the Credit Parties which covers, among other
matters, valid corporate existence and authority, legality, validity and binding
effect of all loan and security documents, perfection of security interests,
and, in connection with the execution and delivery of the Credit Documents, the
absence of any violation of law or regulation or conflict with any existing
contracts (including, without limitation, that the granting of the security
interests by the Credit Parties pursuant to the Security Documents and the
entering into the Permitted Securitization will not constitute a violation of
the 2008 Senior Note Indenture or the 2009 Senior Note Indenture or require pro
rata sharing of the Collateral with the 2008 Senior Noteholders or the 2009
Senior Noteholders).
(d) Corporate Documents. Receipt by the Administrative Agent of the
following:
(i) Charter Documents. Copies of the articles or certificates of
incorporation or other charter documents of each Borrower that is a party to a
Credit Document, certified to be true and complete as of a recent date by the
appropriate Governmental Authority of the state or other jurisdiction of its
incorporation and certified by a secretary or assistant secretary as of the
Closing Date to be true and correct.
(ii) Resolutions. Copies of resolutions of the Board of Directors
or other comparable managing body of each Credit Party that is party to a Credit
Document, approving and adopting the Credit Documents to which it is a party,
the transactions contemplated therein and authorizing execution and delivery
thereof, certified by a secretary or assistant secretary as of the Closing Date
to be true and correct and in force and effect as of such date.
(iii) Bylaws. A copy of the bylaws of each Credit Party that is a
party to a Credit Document, certified by a secretary or assistant secretary as
of the Closing Date to be true and correct and in force and effect as of such
date.
(iv) Good Standing. Copies of (i) certificates of good standing,
existence or its equivalent with respect to each Credit Party that is a party to
a Credit Document, certified as of a recent date by the appropriate Governmental
Authorities of the state or other jurisdiction of organization and (ii) where
applicable, a certificate indicating payment of all corporate franchise taxes
certified as of a recent date by the appropriate governmental taxing
authorities.
(e) Compliance with Financial Obligations. The Credit Parties shall be
in compliance with all existing material financial obligations owed to third
parties.
(f) Personal Property Collateral. The Administrative Agent shall have
received:
(i) searches of filings under the UCC (or corresponding local
laws) in the jurisdiction of the chief executive office of each Credit Party,
the jurisdiction of organization of each Credit Party and each jurisdiction
where any Collateral is located or
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where a filing would need to be made in order to perfect the Administrative
Agent's security interest in the Collateral, copies of the financing statements
on file in such jurisdictions and evidence that no Liens exist other than
Permitted Liens;
(ii) duly completed financing statements under the UCC for each
appropriate jurisdiction as is necessary, in the Administrative Agent's
reasonable discretion, to perfect the Administrative Agent's security interest
in the Collateral;
(iii) duly executed consents as are necessary, in the
Administrative Agent's reasonable discretion, to perfect the Lenders' security
interest in the Collateral including, without limitation, such Acknowledgment
Agreements from lessors of real property as the Administrative Agent may
require; and
(iv) Blocked Account Agreements with respect to each of the
deposit accounts of the Credit Parties not maintained with the Administrative
Agent substantially in the form of Exhibit F-2 or other tri-party agreements in
form and substance satisfactory to the Administrative Agent.
(g) No Material Adverse Effect. No event shall have occurred since
December 31, 2004 that has had or could be reasonably expected to have a
Material Adverse Effect.
(h) Litigation. Except as disclosed in Schedule 6.10, no litigation
shall be pending or threatened which, in the reasonable determination of the
Administrative Agent, would have or reasonably be expected to have a Material
Adverse Effect.
(i) Consents and Approvals. Receipt by the Administrative Agent of
evidence that all material governmental, shareholder and third party consents
and approvals necessary or desirable in connection with the execution and
delivery of the Credit Documents and the consummation of the transactions set
forth therein.
(j) Officer's Certificate. The Administrative Agent shall have
received a certificate or certificates executed by a Senior Financial Officer of
the Company on behalf of the Credit Parties as of the Closing Date stating that
(A) each Credit Party is in compliance with all existing material financial
obligations, (B) all material governmental, shareholder and third party consents
and approvals, if any, with respect to the Credit Documents and the other
transactions contemplated thereby have been obtained, (C) except as disclosed
pursuant to the Credit Agreement, no action, suit, investigation or proceeding
is pending or threatened in any court or before any arbitrator or governmental
instrumentality that purports to effect a member of the Consolidated Parties or
any other transaction contemplated by the Credit Documents, if such action,
suit, investigation or proceeding could have or could be reasonably expected to
have a Material Adverse Effect, and (D) immediately after giving effect to this
Agreement, the other Credit Documents and the other transactions contemplated
therein to occur on such date, (1) each Credit Party is Solvent, (2) no Default
or Event of Default exists, (3) all representations and warranties contained
herein and in the other Credit Documents are true and correct in all material
respects, and (4) the Consolidated Parties are in compliance with each of the
financial covenants set forth in Article VIII.
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(k) Opening Borrowing Base Certificate. Receipt by the Agent of a
Borrowing Base Certificate as of the close of business on a date acceptable to
the Administrative Agent, substantially in the form of Exhibit G and certified
by a Senior Financial Officer of the Company to be true and correct as of the
Closing Date.
(l) Evidence of Insurance. Receipt by the Administrative Agent of
copies of insurance policies or certificates of insurance of the Credit Parties
evidencing general comprehensive liability and property insurance meeting the
requirements set forth in the Credit Documents, including, without limitation,
naming the Administrative Agent as loss payee on behalf of the Lenders and each
Lender as additional insured and copies of credit insurance policies insuring
foreign Accounts to be included as Eligible Accounts Receivable.
(m) Corporate Structure. The corporate capital and ownership structure
of the Consolidated Parties shall be as described in Schedule 5.1(m).
(n) Other Indebtedness. Receipt by the Administrative Agent of
evidence that, after giving effect to the making of the Loans made on the
Closing Date, the Credit Parties shall have no Indebtedness other than the
Indebtedness under the Credit Documents, as disclosed on Schedule 6.9 and as
otherwise permitted by the terms of this Agreement.
(o) Solvency Certificate. Receipt by the Administrative Agent of an
officer's certificate for each of the Credit Parties prepared by a Senior
Financial Officer of such Credit Party as to the financial condition, solvency
and related matters of such Credit Party, in each case after giving effect to
the initial borrowings under the Credit Documents, in substantially the form of
Exhibit H hereto.
(p) Sources and Uses; Payment Instructions. Receipt by the
Administrative Agent from the Company of (i) a statement of sources and uses of
funds covering all payments reasonably expected to be made by the Company in
connection with the transactions contemplated by the Credit Documents to be
consummated on the Closing Date, including an itemized estimate of all fees,
expenses and other closing costs and (ii) payment instructions with respect to
each wire transfer to be made by the Agent on behalf of the Lenders or the
Company or the Borrowers on the Closing Date setting forth the amount of such
transfer, the purpose of such transfer, the name and number of the account to
which such transfer is to be made, the name and ABA number of the bank or other
financial institution where such account is located and the name and telephone
number of an individual that can be contacted to confirm receipt of such
transfer.
(q) Financial Statements. The Administrative Agent shall have received
the Financial Statements described in Section 6.6 and financial and operational
projections for the Consolidated Parties quarterly for the fiscal year ending
December 31, 2005.
(r) Fees and Expenses. All fees and expenses required to be paid under
this Agreement on or prior to the Closing Date shall have been paid in full.
(s) Due Diligence. The Administrative Agent shall have completed its
due diligence with respect to the Company and its Subsidiaries, including,
without limitation its field
53
examination, and the results of such due diligence shall be satisfactory to the
Administrative Agent is all respects in its sole discretion.
(t) Agent for Service of Process. The Administrative Agent shall have
received satisfactory evidence that CT Corporation System shall have been
appointed as agent for service of process in the State of North Carolina on
behalf of the Company.
(u) Minimum Excess Availability. The Credit Parties shall have Excess
Availability of at least $5,000,000 as of the Closing Date, after giving effect
to the payment of fees and expenses associated with the closing of this
Agreement, after giving effect to the making of Loans and the application of the
proceeds thereof to be made on the Closing Date. Accounts payable of the
Borrowers must be at a level and in a condition reasonably acceptable to the
Administrative Agent.
(v) Permitted Securitization. The Permitted Securitization shall have
been consummated on terms and conditions satisfactory to the Agent. The
Intercreditor Agreement shall have been executed and delivered by the parties
thereto and shall be in form and substance satisfactory to the Agent.
(w) Perfection Certificate. The Credit Parties shall have delivered
updated perfection certificates to the Agent, in form and substance satisfactory
to the Agent.
(x) Blocked Account Agreements. Wachovia Bank, National Association,
in its capacity as collateral agent for (i) the secured parties under the
Permitted Securitization and (ii) the Administrative Agent, on behalf of the
Lenders, shall have entered into a new blocked account agreement relating to the
Concentration Account; the existing Blocked Account Agreement among the
Administrative Agent, Mellon Bank, N.A. and the Company and certain of its
Subsidiaries shall be amended as of the Closing Date to cover the WLV Joining
Technologies Account; and a new Blocked Account Agreement among the
Administrative Agent, Mellon Bank, N.A. and the Company and certain of its
Subsidiaries shall have been entered into to cover various operating accounts of
the Credit Parties, each in form and substance satisfactory to the Agent.
(y) Consignment Agreement. BAPM and the Company and certain of its
Subsidiaries shall have entered into and delivered the Consignment Agreement
having terms and provisions reasonably satisfactory to the Agent. The
Consignment Intercreditor Agreement shall have been executed and delivered by
the parties thereto and shall be in form and substance satisfactory to the
Agent.
(z) Other. The receipt by the Administrative Agent of such other
documents, agreements or information as reasonably requested by any Lender.
5.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT
In addition to the conditions precedent stated elsewhere herein, the
Lenders shall not be obligated to make Loans, nor shall the Issuing Lender be
required to issue or extend a Letter of Credit, unless:
54
(a) Notice. The applicable Borrower shall have delivered (i) in the
case of any Loan, a Notice of Borrowing, duly executed and completed, by the
time specified in Sections 2.1 or 2.3, as appropriate and (ii) in the case of
any Letter of Credit, the Issuing Lender shall have received an appropriate
request for issuance in accordance with the provisions of Section 2.2 or 2.4, as
applicable;
(b) Representations and Warranties. The representations and warranties
made by a Credit Party in any Credit Document are true and correct in all
material respects at and as if made as of such date;
(c) No Default. No Default or Event of Default shall exist or be
continuing either prior to or after giving effect thereto;
(d) No Material Adverse Effect. There shall not have occurred any
Material Adverse Effect;
(e) Availability. Immediately after giving effect to the making of a
Loan or the issuance of a Letter of Credit, the Borrowers shall be in compliance
with Section 4.4(b)(i) and shall have Excess Availability of at least
$5,000,000;
(f) 2008 Senior Note Indenture. Immediately after giving effect to the
making of a Loan or the issuance of a Letter of Credit, the Company shall not be
in violation of the terms of the 2008 Senior Note Indenture;
(g) 2009 Senior Note Indenture. Immediately after giving effect to the
making of a Loan or the issuance of a Letter of Credit, the Company shall not be
in violation of the terms of the 2009 Senior Note Indenture;
(h) Lien Sharing Provisions. Immediately after giving effect to the
making of a Loan or the issuance of a Letter of Credit, no requirement shall be
in effect that any of the Borrowers make effective provision whereby any or all
of the 2008 Senior Notes or 2009 Senior Notes will be secured by a Lien equally
and ratably with the Obligations; and
(i) Interest Rate Protection Agreements. Immediately after giving
effect to the making of a Loan or the issuance of a Letter of Credit, the
Company shall not be in violation of the terms of any Interest Rate Protection
Agreement.
The delivery of each Notice of Borrowing and each request for a Letter of Credit
shall constitute a representation and warranty by the applicable Borrower of the
correctness of the matters specified in subsections (b), (c), (d), (e), (f),
(g), (h) and (i) above.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The Borrowers hereby represent and warrant to each Lender that:
55
6.1 ORGANIZATION AND GOOD STANDING
Except as set forth on Schedule 6.1, each Credit Party (i) is a
corporation, limited partnership or a limited liability company duly
incorporated or formed, as the case may be, validly existing and in good
standing under the laws of the State of its incorporation or formation, as the
case may be, (ii) is duly qualified and in good standing as a foreign
corporation, limited partnership or limited liability company authorized to do
business in every jurisdiction where the failure to so qualify could have or
reasonably be expected to have a Material Adverse Effect, and (iii) has the
requisite corporate, limited partnership or limited liability company power and
authority to own its properties and to carry on its business as now conducted
and as proposed to be conducted.
6.2 DUE AUTHORIZATION
Except as set forth on Schedule 6.2, each Credit Party (a) has the
requisite corporate, limited partnership or limited liability company power and
authority to execute, deliver and perform such of the Credit Documents to which
it is a party and to incur the obligations herein and therein provided for, and
(b) is duly authorized to, and has been authorized by all necessary corporate,
limited partnership or limited liability company action, to execute, deliver and
perform such of the Credit Documents to which it is a party.
6.3 NO CONFLICTS
With respect to each Credit Party, neither the execution and delivery of
the Credit Documents, nor the consummation of the transactions contemplated
therein, nor performance of and compliance with the terms and provisions thereof
will (a) violate or conflict in any material respect with any material provision
of its articles or certificate of incorporation or, certificate of limited
partnership or certificate of formation, bylaws, agreement of limited
partnership or limited liability company agreement (b) violate, contravene or
conflict in any material respect with any material law, regulation (including
without limitation Regulation U or Regulation X), order, writ, judgment,
injunction, decree or permit applicable to it, (c) violate, contravene or
conflict in any material respect with contractual provisions of, or cause an
event of default under, any indenture, loan agreement, mortgage, deed of trust,
contract or other agreement or instrument to which it is a party or by which it
may be bound, or (d) result in or require the creation of any material Lien upon
or with respect to its properties except in favor of the Lenders.
6.4 CONSENTS
No consent, approval, authorization or order of, or filing, registration or
qualification with, any court or Governmental Authority or third party in
respect of any Credit Party is required in connection with the execution,
delivery or performance of this Agreement or any of the other Credit Documents
other than those consents which have been obtained and copies of which have been
delivered to the Administrative Agent.
6.5 ENFORCEABLE OBLIGATIONS
This Agreement and the other Credit Documents have been duly executed and
delivered and constitute legal, valid and binding obligations of each Credit
Party (with regard to each agreement or instrument to which it is a party)
enforceable in accordance with their respective terms, except as
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may be limited by bankruptcy or insolvency laws or similar laws affecting
creditors' rights generally.
6.6 FINANCIAL CONDITION
(a) The financial statements provided to the Lenders, consisting of
(i) an audited balance sheet of the Consolidated Parties, together with related
consolidated statements of income, stockholders' equity and cash flow for the
fiscal year 2004 and (ii) unaudited consolidated balance sheets of the
Consolidated Parties, together with related consolidated statements of income,
and consolidated statements of cash flow for the month ended February 28, 2005,
fairly present the financial condition and business operations of the
Consolidated Parties as of such respective dates (together, the "Financial
Statements"); such financial statements were prepared in accordance with GAAP;
and since December 31, 2004, there have occurred no changes or circumstances
which have had or are reasonably expected to have a Material Adverse Effect.
(b) The financial statements delivered to the Lenders pursuant to
Sections 7.1(a), (b) and (c) have been prepared in accordance with GAAP and will
present fairly the consolidated and/or consolidating (as applicable) financial
condition, results of operations and cash flows of the Consolidated Parties as
of such date and for such periods.
6.7 NO DEFAULT
None of the Credit Parties is in default under any term of any indenture,
contract, lease, agreement, instrument or other commitment to which any of them
is a party or by which any of them is bound which default has had or could be
reasonably expected to have a Material Adverse Effect. None of the Credit
Parties knows of any dispute regarding any indenture, contract, lease,
agreement, instrument or other commitment which could reasonably be expected to
have a Material Adverse Effect. No Default or Event of Default has occurred and
is continuing.
6.8 LIENS
There are no Liens in favor of third parties with respect to any of the
Collateral, including, without limitation, with respect to the Inventory,
wherever located, other than Permitted Liens. To the best knowledge of the
applicable Credit Party, no lessor, warehouseman, filler, processor or packer of
any such Credit Party has granted any Lien with respect to the Inventory
maintained by such Credit Party at the property of any such lessor,
warehousemen, filler, processor or packer. Upon the proper filing of financing
statements and the proper recordation of other applicable documents with the
appropriate filing or recordation offices in each of the necessary
jurisdictions, the security interests granted pursuant to the Credit Documents
constitute and shall at all times constitute valid and enforceable first, prior
and perfected Liens on the Collateral (other than Permitted Liens). The Credit
Parties are or will be at the time additional Collateral is acquired by them,
the absolute owners of the Collateral with full right to pledge, sell, consign,
transfer and create a Lien therein, free and clear of any and all Liens in favor
of third parties, except Permitted Liens. The Credit Parties will at their
expense warrant, until payment in full of the Obligations and termination of the
Commitments, and, at the Administrative Agent's request, defend the Collateral
from any and all Liens (other than
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Permitted Liens) of any third party. The Credit Parties will not grant, create
or permit to exist, any Lien upon the Collateral, or any proceeds thereof, in
favor of any third party (other than Permitted Liens).
6.9 INDEBTEDNESS
The Consolidated Parties have no Indebtedness (including without limitation
guaranty, reimbursement or other contingent obligations) except (a) as disclosed
in the Financial Statements referenced in Section 6.6, (b) as set forth in
Schedule 6.9, and (c) as otherwise permitted under the terms of this Agreement.
6.10 LITIGATION
Except as disclosed in Schedule 6.10, there are no actions, suits or legal,
equitable, arbitration or administrative proceedings, pending or, to the
knowledge of the Borrowers threatened, against any Credit Party which, if
adversely determined, would have or reasonably be expected to have a Material
Adverse Effect.
6.11 MATERIAL CONTRACTS
No Credit Party is in default under any Material Contract which default
could reasonably be expected to have a Material Adverse Effect.
6.12 TAXES
Each Credit Party has filed, or caused to be filed, all material tax
returns (federal, state, local and foreign) required to be filed and paid all
amounts of taxes shown thereon to be due (including interest and penalties) and
has paid all other material taxes, fees, assessments and other governmental
charges (including mortgage recording taxes, documentary stamp taxes and
intangibles taxes) owing by it, except for such taxes (a) that are not yet
delinquent or (b) that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP. None of the Credit Parties is aware of any proposed
material tax assessments against it or any other Credit Party.
6.13 COMPLIANCE WITH LAW
None of the Credit Parties has violated or failed to comply with any
statute, law, ordinance, regulation, rule or order of any foreign, federal,
state or local government, or any other Governmental Authority or any self
regulatory organization, or any judgment, decree or order of any court,
applicable to its business or operations except where the aggregate of all such
violations or failures to comply would not have or reasonably be expected to
have a Material Adverse Effect. The conduct of the business of each of the
Credit Parties is in conformity with all securities, commodities, energy, public
utility, zoning, building code, health, OSHA and environmental requirements and
all other foreign, federal, state, provincial and local governmental and
regulatory requirements and requirements of any self regulatory organizations,
except where such non-conformities could not reasonably be expected to have a
Material Adverse Effect. None of the Credit Parties has received any notice to
the effect that, or otherwise been advised that, it is not in compliance with,
and none of such Credit Parties has any
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reason to anticipate that any currently existing circumstances are likely to
result in the violation of any such statute, law, ordinance, regulation, rule,
judgment, decree or order which failure or violation could reasonably be
expected to have a Material Adverse Effect.
6.14 ERISA
(a) Except as would not reasonably be expected to have a Material
Adverse Effect, during the five-year period prior to the date on which this
representation is made or deemed made: (i) no ERISA Event has occurred, and, to
the best of the Borrowers' or any ERISA Affiliate's knowledge, no event or
condition has occurred or exists as a result of which any ERISA Event could
reasonably be expected to occur, with respect to any Plan; (ii) no "accumulated
funding deficiency," as such term is defined in Section 302 of ERISA and Section
412 of the Code, whether or not waived, has occurred with respect to any Single
Employer Plan; (iii) each Plan, Single Employer Plan and, to the best of the
Borrowers' or any ERISA Affiliate's knowledge, each Multiemployer Plan has been
maintained, operated, and funded in compliance in all material respects with its
own terms and in material compliance with the provisions of ERISA, the Code, and
any other applicable federal or state laws; and (iv) no Lien in favor of the
PBGC or a Single Employer Plan has arisen or is reasonably likely to arise on
account of any Single Employer Plan.
(b) Except as set forth in the Financial Statements, the actuarial
present value of all "benefit liabilities" on a going concern basis, whether or
not vested, under each Single Employer Plan, as of the last annual valuation
date prior to the date on which this representation is made or deemed made
(determined, in each case, utilizing the actuarial assumptions used in such
Plan's most recent actuarial valuation report), did not exceed as of such
valuation date the fair market value of the assets of such Plan.
(c) Except as would not reasonably be expected to have a Material
Adverse Effect, neither the Borrowers nor any ERISA Affiliate has incurred, or,
to the best of the Borrowers' or any ERISA Affiliate's knowledge, is reasonably
expected to incur, any withdrawal liability under ERISA with respect to any
Multiemployer Plan or Multiple Employer Plan. Except as would not reasonably be
expected to have a Material Adverse Effect, neither Borrower nor any ERISA
Affiliate would become subject to any withdrawal liability under ERISA if such
Borrower or any such ERISA Affiliate were to withdraw completely from all
Multiemployer Plans and Multiple Employer Plans as of the valuation date most
closely preceding the date on which this representation is made or deemed made.
Neither Borrower nor any ERISA Affiliate has received any notification that any
Multiemployer Plan is in reorganization (within the meaning of Section 4241 of
ERISA), is insolvent (within the meaning of Section 4245 of ERISA), or has been
terminated (within the meaning of Title IV of ERISA), and no Multiemployer Plan
is, to the best of the Borrowers' or any ERISA Affiliate's knowledge, reasonably
expected to be in reorganization, insolvent, or terminated.
(d) No prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Code) or breach of fiduciary responsibility has
occurred with respect to a Plan which has subjected or may subject the Borrowers
or any ERISA Affiliate to any liability under Sections 406, 409, 502(i), or
502(l) of ERISA or Section 4975 of the Code, or under any agreement or other
instrument pursuant to which the Borrowers or any ERISA Affiliate has
59
agreed or is required to indemnify any person against any such liability, except
for any such prohibited transaction or breach which would not reasonably be
expected to have a Material Adverse Effect.
(e) Except as set forth in the Financial Statements, the Borrowers and
their ERISA Affiliates have no material liability with respect to "expected
post-retirement benefit obligations" within the meaning of the Financial
Accounting Standards Board Statement 106. Each Plan which is a welfare plan (as
defined in Section 3(1) of ERISA) to which Sections 601-609 of ERISA and Section
4980B of the Code apply has been administered in compliance in all material
respects with such sections.
6.15 SUBSIDIARIES
Set forth in Schedule 6.15 is a complete and accurate list of all
Subsidiaries of each of the Consolidated Parties. Information on the attached
Schedule 6.15 includes a complete and accurate list of the jurisdiction of
incorporation of each of the Consolidated Parties and the percentage ownership
interest of voting stock owned by the direct parent company in each such member
and the number and effect, if exercised, of all outstanding options, warrants,
rights of conversion or purchase and all other similar rights with respect
thereto. The outstanding capital stock and other equity interests of all Credit
Parties is validly issued, fully paid and non-assessable and is owned by the
Borrowers, directly or indirectly, free and clear of all Liens (other than those
arising under or contemplated in connection with the Credit Documents). Other
than as set forth in Schedule 6.15, no Subsidiary has outstanding any securities
convertible into or exchangeable for its Capital Stock nor does any such Person
have outstanding any rights to subscribe for or to purchase or any options for
the purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to
its Capital Stock.
6.16 USE OF PROCEEDS; MARGIN STOCK
The proceeds of the Loans hereunder will be used solely for the purposes
specified in Section 7.10. None of such proceeds will be used for the purpose of
purchasing or carrying any "margin stock" as defined in Regulation U or
Regulation X, or for the purpose of reducing or retiring any Indebtedness which
was originally incurred to purchase or carry "margin stock" or for any other
purpose which might constitute this transaction a "purpose credit" within the
meaning of Regulation U or Regulation X.
6.17 GOVERNMENT REGULATION
No Credit Party is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Investment Company Act of 1940
or the Interstate Commerce Act, each as amended. In addition, none of the Credit
Parties is (a) an "investment company" registered or required to be registered
under the Investment Company Act of 1940, as amended, and is not controlled by
such a company, or (b) a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary"
or a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, as amended. No director, executive officer or principal shareholder
of any Credit Party is a director, executive officer or principal shareholder of
any Lender. For purposes hereof, the terms "director",
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"executive officer" and "principal shareholder" (when used with reference to any
Lender) shall have the meanings ascribed to them in Regulation O issued by the
Board of Governors of the Federal Reserve System.
6.18 HAZARDOUS SUBSTANCES
Except as disclosed on Schedule 6.18 or except as would not reasonably be
expected to have a Material Adverse Effect, all real property owned or leased by
any Credit Party or on which any Credit Party operates (the "Subject Property")
is free from "hazardous substances" "contaminants" or "pollutants" or similar
substances as defined in the applicable Environmental Laws in concentrations or
amounts that require cleanup under any Environmental Laws; no portion of the
Subject Property is subject to federal, provincial, state or local, complaint,
investigation or, to the Borrowers' knowledge, liability under applicable
Environmental Laws because of the presence of leaked or spilled petroleum
products, waste materials or debris, "PCB's" or PCB items (as defined in 40
C.F.R. Section 763.3), underground storage tanks, "asbestos" (as defined in 40
C.F.R. Section 763.63) or the past or present accumulation, spillage or leakage
of any such substance subject to regulation under the Environmental Laws; and
each Credit Party is in compliance with all Environmental Laws applicable in
connection with the operation of its businesses, except to the extent that the
failure to be in compliance would not have or reasonably be expected to have a
Material Adverse Effect; and no Borrower knows of any complaint or investigation
under Environmental Laws regarding real property which it or any other Credit
Party owns or leases or on which it or any other Credit Party operates.
6.19 PATENTS, FRANCHISES, ETC
Each Credit Party possesses or has the right to use all material patents,
trademarks, service marks, trade names, copyrights, licenses and other rights,
free of adverse claims, that are necessary for the operation of its respective
business as presently conducted and as proposed to be conducted. Each Credit
Party has obtained all material licenses, permits, franchises or other
governmental authorizations necessary to the ownership of its respective
property and to the conduct of its business, except to the extent that the
failure to have obtained any such licenses, permits, franchises or other
governmental authorizations would not have or reasonably be expected to have a
Material Adverse Effect.
6.20 SOLVENCY
Each Credit Party individually, and the Credit Parties as a whole, are and,
after consummation of this Agreement and after giving effect to all Indebtedness
incurred hereunder will be Solvent.
6.21 LOCATION OF ASSETS
The Credit Parties' chief executive offices are set forth on Schedule 6.21
hereto, and the books and records of the Credit Parties and all chattel paper
and all records of accounts are located at the chief executive offices of the
Credit Parties or as otherwise noted on Schedule 6.21. All other locations where
the Credit Parties keep, store or maintain any Collateral are set forth on
Schedule 6.21 hereto. There is no jurisdiction in which any Credit Party has any
Collateral (except for Inventory held for shipment by third Persons, Inventory
in transit,
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Inventory held for processing by third Persons, or immaterial quantities of
Inventory) other than those jurisdictions listed on Schedule 6.21. Schedule 6.21
is a true, correct and complete list of (i) the names and addresses of each
warehouseman, filler, processor and packer at which Inventory is stored, (ii)
the address of the chief executive offices of the Credit Parties, (iii) the
address of all offices where records and books of account of the Credit Parties
are kept or where Collateral is kept, stored or maintained and (iv) the state of
incorporation or formation of each of the Credit Parties. None of the receipts
received by any of the Credit Parties from any warehouseman, filler, processor
or packer states that the goods covered thereby are to be delivered to bearer or
to the order of a named person or to a named person and such named person's
assigns. Each of the Credit Parties agrees to provide the Administrative Agent
with a revised Schedule 6.21 setting forth current principal places of business,
chief executive offices, information concerning Inventory locations and
jurisdictions of incorporation or formation on a quarterly basis at the time the
financial statements described in Section 7.1(b) are required to be delivered to
the Administrative Agent and the Lenders.
6.22 D/B/A OR TRADE NAMES
None of the Credit Parties has used any corporate, d/b/a or trade name
during the five (5) years preceding the date hereof, other than the corporate
name shown on its or such Subsidiary's Articles or Certificate of Incorporation
and as set forth on Schedule 6.22.
6.23 NO EMPLOYEE DISPUTES
There are no controversies pending or, to the best knowledge of the
Borrowers after diligent inquiry, threatened between any Credit Parties and any
of their respective employees, other than employee grievances arising in the
ordinary course of business which could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
6.24 BROKERS' FEES
Except for fees payable to the Arranger in connection with the closing and
syndication of this Credit Agreement, no Credit Party has any obligation to any
Person in respect of any finder's, broker's, investment banking or other similar
fee in connection with any of the transactions contemplated under the Credit
Documents to occur on the Closing Date.
6.25 LABOR MATTERS
None of the Credit Parties is engaged in any unfair labor practice. There
is (a) no material unfair labor practice complaint pending against any Credit
Party or, to the best knowledge of the Borrowers, threatened against any of
them, before the National Labor Relations Board, the Canadian Labour Relations
Board or any applicable provincial labour relations board, and no grievance or
arbitration proceeding arising out of or under collective bargaining agreements
that has or would reasonably be expected to have a Material Adverse Effect is so
pending against any Credit Party or, to the best knowledge of the Borrowers,
threatened against any of them, (b) no strike, labor dispute, slowdown or
stoppage pending against any Credit Party or, to the best knowledge of the
Borrowers, threatened against any of them, which would have or reasonably be
expected to have a Material Adverse Effect and (c) to the best of the knowledge
of the Borrowers, no union representation questions with respect to the
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employees of any of the Credit Parties and no union organizing activities
which would have or reasonably be expected to have a Material Adverse Effect.
6.26 STATUS OF ACCOUNTS
Each of the Accounts (other than Accounts owing from one Credit Party to
another Credit Party) is based on an actual and bona fide sale and delivery of
goods or rendering of services to customers, made by the Credit Parties in the
ordinary course of business; the goods and inventory being sold and the Accounts
created are exclusive property of the Credit Parties and are not and shall not
be subject to any Lien, consignment arrangement, encumbrance, security interest
or financing statement whatsoever, other than the Permitted Liens; and each of
the Credit Parties' customers have accepted the goods or services, owe and are
obligated to pay in cash the full amounts stated in the invoices according to
their terms, without any dispute, offset, defense or counterclaim that could
reasonably be expected to have, when aggregated with any such other disputes,
offsets, defenses or counterclaims, a Material Adverse Effect. Each of the
Credit Parties confirms to the Lenders that any and all taxes or fees relating
to its business, its sales, the Accounts or the goods relating thereto, are its
sole responsibility and that same will be paid by such Credit Party when due
(unless duly contested and adequately reserved for) and that none of said taxes
or fees is or will become a lien on or claim against the Accounts. Each of the
Credit Parties confirms to the Lenders that since January 1, 2005, (i) it has
not lost any account or customer which could reasonably be expected to have a
Material Adverse Effect and (ii) each written contract or other arrangement to
which any Credit Party is a party as to which the breach, nonperformance,
cancellation or failure to renew by any party thereto could materially adversely
effect the business, assets, operations, prospects or condition of such Credit
Party, are in full force and effect.
6.27 [INTENTIONALLY OMITTED]
6.28 KEY MEMBERS OF MANAGEMENT
Attached hereto as Schedule 6.28 (as updated from time to time) is a true,
correct and complete list of the executive officers of the Credit Parties who
report to the Chief Executive Officer of the Company as of the date hereof
(collectively, the "Senior Management Members").
6.29 ACCURACY AND COMPLETENESS OF INFORMATION
All factual information heretofore, contemporaneously or hereafter
furnished by or on behalf of the Credit Parties in writing to the Administrative
Agent or any Lender for purposes of or in connection with this Credit Agreement
or any Credit Documents, or any transaction contemplated hereby or thereby is or
will be true and accurate in all material respects on the date as of which such
information is dated or certified and not incomplete by omitting to state any
material fact necessary to make such information not misleading at such time.
There is no fact now known to any Senior Officer of any Credit Party which has,
or would reasonably be expected to have, a Material Adverse Effect which fact
has not been set forth herein, in the Financial Statements, or any certificate,
opinion or other written statement made or furnished by any Credit Party to the
Administrative Agent.
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6.30 COMPLIANCE WITH OFAC RULES AND REGULATIONS.
None of the Company, any Subsidiary of the Company or any Affiliate of the
Company (a) is a Sanctioned Person, (b) has more than 15% of its assets in
Sanctioned Countries, or (c) derives more than 15% of its operating income from
investments in, or transactions with Sanctioned Persons or Sanctioned Countries.
No part of the proceeds of any Loans or Letters of Credit hereunder will be used
directly or indirectly to fund any operations in, finance any investments or
activities in or make any payments to, a Sanctioned Person or a Sanctioned
Country.
6.31 ANTI-TERRORISM LAWS.
Neither the making of the Loans hereunder nor the Borrowers' use of the
proceeds thereof will violate the Patriot Act, the Trading with the Enemy Act,
as amended, or any of the foreign assets control regulations of the United
States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any
enabling legislation or executive order relating thereto, or is in violation of
any Federal statute or Presidential Executive Order, including without
limitation Executive Order 13224 66 Fed. Reg. 49079 (September 25, 2001)
(Blocking Property and Prohibiting Transactions with Persons who Commit,
Threaten to Commit or Support Terrorism)(collectively, "Anti-Terrorism Laws").
ARTICLE VII
AFFIRMATIVE COVENANTS
Each Borrower hereby covenants and agrees that so long as this Agreement is
in effect and until the Loans and LOC Obligations, together with interest, fees
and other Obligations hereunder, have been paid in full and the Commitments and
Letters of Credit hereunder shall have terminated that they will do or cause to
be done the following:
7.1 INFORMATION COVENANTS
The Borrowers will furnish, or cause to be furnished, to the Administrative
Agent and each Lender:
(a) Annual Financial Statements. As soon as available and in any event
within ninety (90) days after the close of each fiscal year of the Consolidated
Parties, a consolidated balance sheet of the Consolidated Parties as at the end
of such fiscal year together with related consolidated statements of income,
shareholder's equity and of cash flows for such fiscal year, setting forth in
comparative form consolidated figures for the preceding fiscal year, all in
reasonable detail and audited by independent certified public accountants of
recognized national standing and whose opinion shall be to the effect that such
consolidated financial statements have been prepared in accordance with GAAP and
shall not be limited as to the scope of the audit or qualified as to the status
of the Consolidated Parties as a going concern. It is specifically understood
and agreed that failure of the annual financial statements to be accompanied by
an opinion of such accountants in form and substance as provided herein shall
constitute an Event of Default hereunder. The financial statements delivered
pursuant to this Section 7.1(a) will have been prepared in accordance with GAAP
and will present fairly the
64
consolidated financial condition, results of operations and cash flows of the
Consolidated Parties as of the date thereof.
(b) Quarterly Financial Statements. As soon as available and in any
event within forty-five (45) days after the end of each Production Quarter
(other than the fourth Production Quarter, in which case ninety (90) days after
the end thereof) of each fiscal year of the Consolidated Parties, a consolidated
balance sheet and statements of income and of cash flows of the Consolidated
Parties as at the end of such quarterly period together with related
consolidated statements of retained earnings, shareholder's equity and of cash
flows for such quarterly period and for the portion of the fiscal year ending
with such period, in each case setting forth in comparative form figures for the
corresponding period of the preceding fiscal year, all in reasonable form and
detail acceptable to the Administrative Agent, and accompanied by a certificate
of a Senior Financial Officer of the Company as being true and correct and as
having been prepared in accordance with GAAP, subject to changes resulting from
audit and normal year-end audit adjustments. The financial statements delivered
pursuant to this Section 7.1(b) will have been prepared in accordance with GAAP
and will present fairly the consolidated financial condition, results of
operations and cash flows of the Consolidated Parties as of the date thereof.
(c) Monthly Financial Statements. As soon as available and in any
event within thirty (30) days after the end of each Production Month of the
Consolidated Parties, (i) unaudited consolidated financial statements similar to
those required by clause (a) above as of the end of such period and for such
period then ended and for the period from the beginning of the current fiscal
year to the end of such period and (ii) unaudited balance sheets, income
statements and statements of cash flow by unit, in each case prepared in
accordance with GAAP (except that such monthly statements need not include
footnotes) and certified by a Senior Financial Officer of the Company.
(d) Officer's Certificate. At the time of delivery of the financial
statements provided for in Sections 7.1(a) and (b), a certificate of a Senior
Financial Officer of the Company substantially in the form of Exhibit I to the
effect that no Default or Event of Default exists, or if any Default or Event of
Default does exist specifying the nature and extent thereof and what action the
Borrowers propose to take with respect thereto. In addition, for each fiscal
quarter and, if the Fixed Charge Coverage Ratio is required to be complied with
in accordance with Section 8.1, monthly, such certificate shall (i) demonstrate
compliance with the financial covenants contained in Article VIII by calculation
thereof as of the end of each such fiscal period and (ii) contain information
regarding expenditures made by the Credit Parties as to Permitted Investments
and Capital Expenditures during the prior fiscal quarter. In addition to the
foregoing, at the time of delivery of the financial statements provided for in
Sections 7.1(a) and (b), a certificate of the Company substantially in the form
of Exhibit L demonstrating the adjustments made to Consolidated Net Income
pursuant to subsection (iii) of Consolidated Net Income.
(e) Auditor's Reports. Promptly upon receipt thereof, a copy of any
other report or "management letter" submitted by independent accountants to a
member of the Consolidated Parties in connection with any annual, interim or
special audit of the books of the Consolidated Parties.
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(f) SEC and Other Reports. Promptly upon transmission or receipt
thereof, (i) copies of any filings and registrations with, and material reports
to or from, the Securities and Exchange Commission, or any successor agency, and
copies of all financial statements, proxy statements, notices and reports as the
Consolidated Parties shall send to its shareholders or to the holders of any
other Indebtedness in their capacity as such holders and (ii) upon the request
of the Administrative Agent, all material reports and written information to and
from the United States Environmental Protection Agency, or any Canadian, state,
provincial or local agency responsible for environmental matters, the United
States Occupational Safety and Health Administration, or any Canadian, state,
provincial or local agency responsible for health and safety matters, or any
successor agencies or authorities concerning environmental, health or safety
matters relating to a member of the Consolidated Parties.
(g) Notices. Each Borrower will give written notice to the
Administrative Agent (i) immediately of the occurrence of an event or condition
consisting of a Default or Event of Default, specifying the nature and existence
thereof and what action the Borrowers propose to take with respect thereto, and
(ii) promptly, but in any event within five (5) Business Days, following the
occurrence of any of the following with respect to a Credit Party (A) the
pendency or commencement of any litigation, arbitral or governmental proceeding
against such Credit Party which, if adversely determined, would have or
reasonably be expected to have, a Material Adverse Effect, (B) any levy of an
attachment, execution or other process against the assets of a Credit Party
having a value of $1,000,000 or more, (C) the occurrence of an event or
condition which shall constitute a default or event of default under any
Indebtedness of a member of the Consolidated Parties in excess of $1,000,000,
(D) any development in the business or affairs of any of the Consolidated
Parties which has resulted in, or which the Company reasonably believes may
result in, a Material Adverse Effect, (E) the institution of any proceedings
against a Credit Party with respect to, or the receipt of notice by such Person
of potential liability or responsibility for violation, or alleged violation of
any federal, foreign, state, provincial or local law, rule or regulation,
including but not limited to, Environmental Laws, the violation of which would
have or be reasonably expected to have a Material Adverse Effect or (F)
promptly, of any change in the name of any Credit Party.
(h) Annual Budget and Projections. Not later than March 31st of each
fiscal year, an annual budget of the Consolidated Parties containing, among
other things, pro forma financial statements and projected loan usage and excess
availability on a quarterly basis under the Credit Agreement for such fiscal
year and financial and operational projections for such fiscal year.
(i) Borrowing Base Certificate, etc.. Not later than 12:00 Noon on the
25th day of each Production Month (or if such day is not a Business Day, then on
the next succeeding Business Day) and within three (3) Business Days following
the date of any Asset Disposition or Casualty Loss in excess of $1,000,000, the
Borrowers shall deliver a borrowing base certificate (the "Borrowing Base
Certificate") in substantially the form of Exhibit G hereto, duly completed and
certified by a Senior Financial Officer of the Company detailing the Eligible
Accounts Receivable and Eligible Inventory of the Credit Parties as of the last
day of the immediately preceding Production Month. In addition, on the 25th day
of each Production Month (or if such day is not a Business Day, then on the next
succeeding Business Day), the Company shall furnish a written report to the
Lenders setting forth (i) the accounts receivable aged trial balance
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at the immediately preceding Production Month end for each account debtor, (ii)
the accounts payable aging summary for the immediately preceding Production
Month, (iii) an inventory summary as of the immediately preceding Production
Month by inventory location and reflecting inventory composition (i.e, consigned
versus owned, raw versus work-in-process, finished goods versus MRO, etc. or any
such category as the Agent may request) and (iv) a sales and cash receipt
summary for such immediately preceding Production Month. Such aging reports
shall indicate which Accounts are current, up to 30, 30 to 60 and over sixty
(60) days past due and shall list the names of all applicable account debtors.
The Administrative Agent may, but shall not be required to, rely on each
Borrowing Base Certificate delivered hereunder as accurately setting forth the
available Borrowing Base for all purposes of this Credit Agreement until such
time as a new Borrowing Base Certificate is delivered to the Administrative
Agent in accordance herewith; Borrowing Base Certificates may be prepared and
submitted to the Lenders, and the Administrative Agent may request delivery of
Borrowing Base Certificates, on a more frequent basis than each Production
Month, provided that such certificate shall comply with the requirements set
forth elsewhere herein.
(j) Other Information. With reasonable promptness upon any such
request, such other information regarding the business, properties or financial
condition of the Consolidated Parties as the Administrative Agent or the Lenders
may reasonably request.
7.2 PRESERVATION OF EXISTENCE AND FRANCHISES
Each Consolidated Party will do all things necessary to preserve and keep
(and will cause each of its Subsidiaries to keep) in full force and effect its
existence, franchises and authority, except for corporate reorganizations,
corporate dissolution and other similar transactions which would not have or
reasonably be expected to have a Material Adverse Effect.
7.3 BOOKS AND RECORDS
The Consolidated Parties will keep complete and accurate books and records
of its transactions in accordance with good accounting practices on the basis of
GAAP. In addition, each Credit Party will maintain books and records pertaining
to the Collateral in such detail, form and scope as is consistent with good
business practice.
7.4 COMPLIANCE WITH LAW
Each of the Consolidated Parties will comply with all material laws, rules,
regulations and orders of, and all applicable restrictions imposed by all
applicable Governmental Authorities applicable to it, including applicable
Environmental Laws if noncompliance would have or be reasonably likely to have a
Material Adverse Effect.
7.5 PAYMENT OF TAXES AND OTHER INDEBTEDNESS
Each of the Consolidated Parties will pay and discharge (a) all material
taxes, assessments and governmental charges or levies imposed upon it or them,
or upon its or their capital, income or profits, or upon any of its or their
properties, before they shall become delinquent, (b) all lawful claims
(including claims for labor, materials and supplies) which, if unpaid, would
give rise to a Lien or charge upon any of its or their properties, and (c)
except as prohibited hereunder, all of its
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other Indebtedness as it shall become due; provided, however, that there is no
requirement to pay any such tax, assessment, charge, levy, claim or Indebtedness
which is being contested in good faith by appropriate proceedings and as to
which adequate reserves therefor have been established in accordance with GAAP,
unless the failure to make any such payment (i) shall give rise to an immediate
right to foreclosure on a Lien securing such amounts or (ii) otherwise would
have or reasonably be expected to have a Material Adverse Effect.
7.6 INSURANCE; CASUALTY LOSS
(a) Each of the Credit Parties will maintain comprehensive general
liability insurance covering third party property damage and insurance covering
the Collateral up to the replacement value thereof, with such insurance
companies, in such amounts and covering such risks as are at all times
satisfactory to the Administrative Agent in its commercially reasonable
judgment. The present coverage of the Credit Parties is outlined as to carrier,
policy number, expiration date, type and amount on Schedule 7.6 hereto. All
policies covering the Collateral are to name the applicable Credit Parties and
the Administrative Agent as loss payees in case of loss, as their interests may
appear, and are to contain such other provisions as the Administrative Agent may
reasonably require to fully protect such Agent's interest in the Collateral and
to any payments to be made under such policies. All comprehensive general
liability policies of the Credit Parties are to name the Administrative Agent
and each Lender as an additional insured. True copies of all original insurance
policies or certificates of insurance evidencing such insurance covering the
Collateral are to be delivered to the Administrative Agent on or prior to the
Closing Date, premium prepaid, with the loss payable endorsement in the
Administrative Agent's favor, and shall provide for not less than thirty (30)
days prior written notice to the Administrative Agent, of the exercise of any
right of cancellation. In the event any Credit Party fails to respond in a
timely and appropriate manner (as determined by the Administrative Agent in its
reasonable discretion) with respect to collecting under any insurance policies
required to be maintained under this Section 7.6, the Administrative Agent shall
have the right, in the name of itself or any Credit Party, to file claims under
such insurance policies, to receive and give acquittance for any payments that
may be payable thereunder, and to execute any and all endorsements, receipts,
releases, assignments, reassignments or other documents that may be necessary to
effect the collection, compromise or settlement of any claims under any such
insurance policies.
(b) Each of the Credit Parties will provide written notice to the
Lenders of the occurrence of any of the following events within five (5)
Business Days after the occurrence of such event: any of the Collateral is (i)
damaged or destroyed, or suffers any other loss or (ii) is condemned,
confiscated or otherwise taken, in whole or in part, or the use thereof is
otherwise diminished so as to render impracticable or unreasonable the use of
such Collateral for the purpose to which such Collateral was used immediately
prior to such condemnation, confiscation or taking, by exercise of the powers of
condemnation or eminent domain or otherwise, and in either case the amount of
the damage, destruction, loss or diminution in value of such Collateral is in
excess of $500,000 (collectively, a "Casualty Loss"). Each Credit Party will
diligently file and prosecute its claim or claims for any award or payment in
connection with a Casualty Loss. In connection with any Casualty Loss, the
Credit Parties will pay to the Administrative Agent, promptly upon receipt
thereof, any and all insurance proceeds and payments received by any of the
Credit Parties on account of damage, destruction or loss of all or any portion
of the Collateral
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and the Administrative Agent shall, at its election and in its sole discretion,
either (A) apply the proceeds realized from such loss to payment of accrued and
unpaid interest or outstanding principal of the Revolving Loans in accordance
with Section 4.4 hereof or (B) pay such proceeds to the Credit Parties to be
used to repair, replace or rebuild the Collateral or portion thereof that was
the subject of the loss. No settlement on account of any Casualty Loss shall be
made without the consent of the Lenders and (2) the Administrative Agent may
participate in any such proceedings and the Credit Parties will deliver to the
Administrative Agent such documents as may be requested by the Administrative
Agent in connection therewith and will consult with the Administrative Agent,
its attorneys and agents in the making and prosecution of such claim or claims.
Each of the Credit Parties hereby irrevocably authorizes and appoints the
Administrative Agent its attorney-in-fact, after the occurrence and continuance
of an Event of Default, to collect and receive for any such award or payment and
to file and prosecute such claim or claims, which power of attorney shall be
irrevocable and shall be deemed to be coupled with an interest, and each of the
Credit Parties shall, upon demand of the Administrative Agent, make, execute and
deliver any and all assignments and other instruments sufficient for the purpose
of assigning any such award or payment to the Administrative Agent for the
benefit of the Lenders, free and clear of any encumbrances of any kind or nature
whatsoever.
7.7 MAINTENANCE OF PROPERTY
Each of the Consolidated Parties will maintain and preserve its properties
and equipment used or necessary in its business (in whomever's possession as
they may be) in good repair, working order and condition, normal wear and tear
excepted (and having regard to their respective ages), and will make, or cause
to be made, in such properties and equipment from time to time all repairs,
renewals, replacements, extensions, additions, betterments and improvements
thereto as may be needed or proper, to the extent and in the manner customary
for companies in similar businesses.
7.8 PERFORMANCE OF OBLIGATIONS
Each of the Consolidated Parties will perform in all material respects all
of its obligations under the terms of all material agreements, indentures,
mortgages, security agreements or other debt instruments to which it is a party
or by which it is bound.
7.9 ERISA
Upon the Company or any ERISA Affiliate obtaining knowledge thereof, the
Company will give written notice to the Administrative Agent promptly (and in
any event within five (5) Business Days) of: (a) any event or condition,
including, but not limited to, any Reportable Event, that constitutes, or might
reasonably lead to, a ERISA Event; (b) with respect to any Multiemployer Plan,
the receipt of notice as prescribed in ERISA or otherwise of any withdrawal
liability assessed against the Company or any ERISA Affiliate, or of a
determination that any Multiemployer Plan is in reorganization or insolvent
(both within the meaning of Title IV of ERISA); (c) the failure to make full
payment on or before the due date (including extensions) thereof of all amounts
which the Company or any ERISA Affiliate is required to contribute to each
Single Employer Plan or Multiemployer Plan pursuant to its terms and as required
to meet the minimum funding standard set forth in ERISA and the Code with
respect thereto; or (d) any change in the funding status of any
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Single Employer Plan that could have or be reasonably expected to have a
Material Adverse Effect; together, with a description of any such event or
condition or a copy of any such notice and a statement by a Senior Financial
Officer of the Company briefly setting forth the details regarding such event,
condition, or notice, and the action, if any, which has been or is being taken
or is proposed to be taken by the Company or any ERISA Affiliate with respect
thereto. Promptly upon request, the Company shall furnish the Administrative
Agent and the Lenders with such additional information concerning any Plan as
may be reasonably requested, including, but not limited to, copies of each
annual report/return (Form 5500 series), as well as all schedules and
attachments thereto required to filed with the DOL and/or the Internal Revenue
Service pursuant to ERISA and the Code, respectively, for each "plan year"
(within the meaning of Section 3(39) of ERISA).
7.10 USE OF PROCEEDS
The proceeds of the Loans hereunder will be used solely (a) for repayment
of certain amounts of existing Funded Debt of the Consolidated Parties, (b) for
general corporate, working capital purposes and capital expenditures of the
Credit Parties in the ordinary course of business and (c) as otherwise permitted
under this Agreement.
7.11 ADDITIONAL SUBSIDIARIES
Promptly, or in any event within thirty (30) days, upon any Person becoming
a direct or indirect U.S. Subsidiary of a Borrower, the Borrowers shall so
notify the Administrative Agent and shall cause (a) such Person to become a
Borrower hereunder pursuant to a Joinder Agreement, (b) the Collateral of such
Person to be pledged to the Lenders pursuant to a Security Document similar to
those executed by the Borrowers, (c) such Person to execute Revolving Notes in
favor of the Lenders and (d) such Person to deliver such other documentation as
the Administrative Agent may reasonably request in connection with the
foregoing, including, without limitation, appropriate UCC-1 Financing
Statements, Acknowledgment Agreements, certified resolutions and other
organizational and authorizing documents of such Person and favorable opinions
of counsel to such Person (which shall cover, among other things, the legality,
validity, binding effect and enforceability of the documentation referred to
above), all in form, content and scope reasonably satisfactory to the
Administrative Agent.
7.12 AUDITS/INSPECTIONS
Each of the Credit Parties agrees that the Administrative Agent or its
agents may enter upon the premises of any of the Credit Parties at any time and
from time to time, during normal business hours, upon reasonable notice and, on
and after the occurrence and during the continuation of an Event of Default
which continues and is continuing beyond the expiration of any grace or cure
period applicable thereto and which has not otherwise been waived by the
Administrative Agent, at any time at all, for the purpose of (a) enabling the
Administrative Agent's internal auditors or other designees to conduct field
examinations at such of the Credit Party's expense, (b) inspecting the
Collateral, (c) inspecting and/or copying (at the Credit Parties' expense) any
and all records pertaining thereto, (d) discussing the affairs, finances and
business of any Credit Party or with any officers, employees and directors of
any Credit Party with its certified independent accountant and (e) verifying
Eligible Accounts Receivable and/or Eligible Inventory. The Lenders, in the
reasonable discretion of the Administrative Agent, may
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accompany the Administrative Agent at their sole expense in connection with the
foregoing inspections.
7.13 INVENTORY
Within thirty (30) days after the end of each month, upon the request of
the Administrative Agent from time to time, the Credit Parties will provide to
the Administrative Agent written statements listing categories of Inventory in
reasonable detail as requested by the Administrative Agent. The Credit Parties
will conduct annually a physical count of their Inventory and will provide the
Administrative Agent with prior written notice indicating when the physical
count is to be performed, and a copy of such count will be promptly supplied to
the Administrative Agent accompanied by a report of the value (valued at FIFO)
of such Inventory; provided that the Credit Parties will conduct such a physical
count at such other times and as of such dates as the Administrative Agent shall
reasonably request.
7.14 COLLATERAL RECORDS
Each Credit Party agrees to maintain such books and records regarding
Accounts and the other Collateral as the Administrative Agent may reasonably
require, and agrees that such books and records will reflect the Lenders'
interest in the Accounts and such other Collateral. Each of the Credit Parties
agrees to afford the Administrative Agent thirty (30) days prior written notice
of any change in the location at which any Collateral is stored or maintained
(other than Inventory held for shipment by third Persons, Inventory in transit,
Inventory held for processing by third Persons or immaterial quantities of
assets, equipment or Inventory) or in the location of its chief executive office
or place of business from the locations specified in Schedule 6.21, and to
execute in advance of such change, cause to be filed and/or delivered to the
Administrative Agent any financing statements or other documents required by the
Administrative Agent, all in form and substance satisfactory to the
Administrative Agent. Each of the Credit Parties agrees to advise the
Administrative Agent promptly, in sufficient detail, of any material change
relating to the type, quantity or quality of the Collateral or any event which
could reasonably be expected to have a Material Adverse Effect. Each of the
Credit Parties agrees to furnish any Lender with such other information
regarding its business affairs and financial condition as such Lender may
reasonably request from time to time.
7.15 SECURITY INTERESTS
Each Credit Party will defend all or any portion of the Collateral against
all claims and demands of all Persons at any time claiming the same or any
interest therein, except where the amount of such Collateral is immaterial and
the failure to so defend such Collateral would not reasonably be expected to
have a Material Adverse Effect. Each Credit Party agrees to comply with the
requirements of all state, provincial and federal laws in order to grant to the
Lenders a valid and perfected first security interest in the Collateral. The
Administrative Agent is hereby authorized by each Credit Party to file any
financing statements covering the Collateral. Each Credit Party agrees to do
whatever the Administrative Agent may reasonably request, from time to time, by
way of: filing notices of liens, financing statements, fixture filings and
amendments, renewals and continuations thereof; cooperating with the
Administrative Agent's custodians; keeping stock records; obtaining waivers from
landlords and mortgagees and from
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warehousemen, fillers, processors and packers and their respective landlords and
mortgagees; paying claims, which might if unpaid, become a Lien (other than a
Permitted Lien) on the Collateral; and performing such further acts as the
Administrative Agent may require in order to effect the purposes of this Credit
Agreement and the other Credit Documents. Any and all fees, costs and expenses
of whatever kind and nature (including any Taxes, reasonable attorneys' fees or
costs for insurance of any kind), which the Administrative Agent may reasonably
incur with respect to the Collateral or the Obligations: in filing public
notices; in preparing or filing documents; making title examinations or
rendering opinions; in protecting, maintaining, or preserving the Collateral or
its interest therein; in enforcing or foreclosing the Liens hereunder, whether
through judicial procedures or otherwise; or in defending or prosecuting any
actions or proceedings arising out of or relating to its transactions with any
of the Credit Parties under this Credit Agreement or any other Credit Document,
will be borne and paid by the Credit Parties. If same are not promptly paid by
the Credit Parties, the Administrative Agent may pay same on the Credit Parties'
behalf, and the amount thereof shall be an Obligation secured hereby and due to
the Administrative Agent on demand.
7.16 SCHEDULES OF ACCOUNTS AND PURCHASE ORDERS
In furtherance of the continuing assignment and security interest in the
Accounts of each of the Credit Parties granted pursuant to the Security
Agreement, at the request of the Administrative Agent, upon the creation of
Accounts, each of the Credit Parties will execute and deliver to the
Administrative Agent in such form and manner as the Administrative Agent may
reasonably require, solely for its convenience in maintaining records of
collateral, such confirmatory schedules of Accounts, and other appropriate
reports designating, identifying and describing the Accounts as the
Administrative Agent may require. In addition, upon the Administrative Agent's
request, upon the occurrence and during the continuation of an Event of Default,
each Credit Party will provide the Administrative Agent with copies of
agreements with, or purchase orders from, the customers of each of the Credit
Parties, and copies of invoices to customers, proof of shipment or delivery and
such other documentation and information relating to said Accounts and other
collateral as the Administrative Agent may reasonably require. Failure to
provide the Administrative Agent with any of the foregoing shall in no way
affect, diminish, modify or otherwise limit the security interests granted
herein. Each Credit Party hereby authorizes the Administrative Agent to regard
such Credit Party's printed name or rubber stamp signature on assignment
schedules or invoices as the equivalent of a manual signature by such Credit
Party's authorized officers or agents.
7.17 COLLECTION OF ACCOUNTS
Unless an Event of Default has occurred and is continuing beyond the
expiration of the applicable grace or cure period, or has not otherwise been
waived by the Administrative Agent, each Credit Party may and will in accordance
with prudent business practices enforce, collect and receive all amounts owing
on the Accounts (subject to any amounts that such Credit Party is required to
rebate to the applicable account debtor pursuant to any agreement between such
Credit Party and such account debtor), for the Lenders' benefit and on the
Lenders' behalf but at the Credit Parties' expense in accordance with the
provisions of Section 3.1 or 3.2, as applicable; the Administrative Agent may,
and upon the request of the Required Lenders shall, shall terminate such
privilege, without notice to the Credit Parties which is hereby expressly waived
by
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the Credit Parties, upon the occurrence of any Event of Default which occurs and
continues beyond the expiration of any applicable grace or cure period, or which
has not otherwise been waived by the Required Lenders. Any checks, cash, notes
or other instruments or property received by any Credit Party with respect to
any Accounts shall be held by such Credit Party in trust for the benefit of the
Lenders, separate from such Credit Party's own property and funds, and
immediately turned over to the Administrative Agent, with proper assignments or
endorsements. No checks, drafts or other instruments received by the Agent shall
constitute final payment unless and until such instruments have actually been
collected.
7.18 NOTICE; CREDIT MEMORANDA; AND RETURNED GOODS
Each Credit Party will notify the Administrative Agent promptly of any
matters materially affecting the value, enforceability or collectibility of any
Account, and of all material customer disputes, offsets, defenses,
counterclaims, returns and rejections, and all reclaimed or repossessed
merchandise or goods, provided, however, that such notice shall only be required
as to any such matter that affects Accounts outstanding at any one time from any
account debtor, which affected Accounts have a value greater than $500,000, or
to the extent that the outcome of such matter could reasonably be expected to
have a Material Adverse Effect. Each Credit Party will issue credit memoranda
promptly (with duplicates to the Administrative Agent upon its request for same)
upon accepting returns or granting allowances, and may continue to do so until
the occurrence of an Event of Default which continues beyond the expiration of
the applicable grace or cure period, or which has not otherwise been waived by
the Required Lenders or upon the request of the Administrative Agent or upon the
request of the Required Lenders. After the occurrence and during the continuance
of an Event of Default, each Credit Party agrees that all returned, reclaimed or
repossessed merchandise or goods shall be set aside by such Credit Party, marked
with the Lenders' name and held by such Credit Party for the Lenders' account as
owner and assignee.
7.19 ACKNOWLEDGMENT AGREEMENTS
Each Credit Party will use commercially reasonable efforts (which shall not
require any Credit Party to expend any material sums) to assist the
Administrative Agent in obtaining executed Acknowledgment Agreements from each
of the warehousemen, processors, packers, fillers, landlords and mortgagees with
whom such Credit Party conducts business from time to time or who have an
interest in any real property on which any of the Collateral is located.
7.20 TRADEMARKS
Each Consolidated Parties will do and cause to be done all things necessary
to preserve and keep in full force and effect all registrations of trademarks,
service marks and other marks, trade names or other trade rights owned or
licensed by such Consolidated Parties, except where the failure to do so would
not reasonably be expected to have a Material Adverse Effect.
7.21 SPC MATTERS
After the termination of the Permitted Securitization, promptly upon the
request of the Agent, the Company shall cause the SPC to merge with one or more
of the Borrowers or cause the assets of the SPC to be distributed to one or more
of the Borrowers.
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ARTICLE VIII
FINANCIAL COVENANTS
Each Borrower hereby covenants and agrees that so long as this Agreement is
in effect and until the Loans and LOC Obligations, together with interest, fees
and other Obligations hereunder, have been paid in full and the Commitments and
Letters of Credit hereunder shall have terminated that they will do or cause to
be done the following:
8.1 FIXED CHARGE COVERAGE RATIO
During any period beginning on the date on which the Obligations
outstanding shall equal or exceed $18,000,000 and continuing until the
termination of this Credit Agreement and the repayment in full of all
Obligations hereunder, the Consolidated Parties shall maintain a Fixed Charge
Coverage Ratio of not less than the following amounts as of the last day of each
month ended in the periods indicated below:
Period Ratio
------ -----------
1st Fiscal Quarter 2005 through 1st Fiscal Quarter 2006 1.00 to 1.0
2nd Fiscal Quarter 2006 through 3rd Fiscal Quarter 2006 1.05 to 1.0
4th Fiscal Quarter 2006 through 2nd Fiscal Quarter 2007 1.10 to 1.0
3rd Fiscal Quarter 2007 1.15 to 1.0
4th Fiscal Quarter 2007 and thereafter 1.20 to 1.0
8.2 CAPITAL EXPENDITURES
The Consolidated Parties shall not make Consolidated Capital Expenditures
in excess of $15,000,000 during any fiscal year.
8.3 MINIMUM CONSOLIDATED EBITDA
Commencing with the fiscal quarter of the Consolidated Parties ending April
3, 2005, Consolidated EBITDA for the Consolidated Parties shall be greater than
or equal to the following amounts for the indicated fiscal quarter, calculated
on a rolling four quarter basis:
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Minimum Consolidated
Fiscal Quarter EBITDA
----------------------- --------------------
1st Fiscal Quarter 2005 $33,500,000
2nd Fiscal Quarter 2005 $27,500,000
3rd Fiscal Quarter 2005 $30,000,000
4th Fiscal Quarter 2005 $32,000,000
1st Fiscal Quarter 2006 $33,500,000
2nd Fiscal Quarter 2006 $34,500,000
3rd Fiscal Quarter 2006 $36,000,000
4th Fiscal Quarter 2006 $37,000,000
1st Fiscal Quarter 2007 $37,000,000
2nd Fiscal Quarter 2007 $38,500,000
3rd Fiscal Quarter 2007 $39,500,000
4th Fiscal Quarter 2007 $41,000,000
and thereafter
8.4 MINIMUM EXCESS AVAILABILITY
Excess Availability shall be at least $5,000,000 at all times.
ARTICLE IX
NEGATIVE COVENANTS
Each Borrower hereby covenants and agrees that so long as this Agreement is
in effect and until the Loans and LOC Obligations, together with interest, fees
and other Obligations hereunder, have been paid in full and the Commitments and
Letters of Credit hereunder shall have terminated that it will do or cause to be
done the following:
9.1 INDEBTEDNESS
The Consolidated Parties will not contract, create, incur, assume or permit
to exist any Indebtedness, except:
(a) Indebtedness arising under this Agreement and the other Credit
Documents or any Interest Rate Protection Agreement;
(b) Indebtedness existing as of the Closing Date as referenced in
Section 6.9 (and renewals, refinancings or extensions thereof, in whole or in
part, on terms and conditions substantially the same as such existing
Indebtedness and in a principal amount not in excess of that outstanding as of
the date of such renewal, refinancing or extension);
(c) Indebtedness in respect of current accounts payable and accrued
expenses incurred in the ordinary course of business including, to the extent
not current, accounts payable and accrued expenses that are subject to bona fide
dispute;
(d) purchase money Indebtedness (including capital leases and
synthetic leases) incurred by the Consolidated Parties to finance the purchase
of fixed assets; provided that
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(i) the total of all such Indebtedness for all of the Consolidated Parties taken
together shall not exceed an aggregate principal amount of $2,500,000 at any one
time outstanding (including any such Indebtedness referred to in subsection (b)
above); (ii) such Indebtedness when incurred shall not exceed the purchase price
of the asset(s) financed; and (iii) no such Indebtedness shall be refinanced for
a principal amount in excess of the principal balance outstanding thereon at the
time of such refinancing;
(e) unsecured Indebtedness owing from one Credit Party to another
Credit Party;
(f) the guaranty by one Credit Party of another Credit Party's
Indebtedness, to the extent such Indebtedness is permitted hereunder;
(g) Indebtedness of the Company arising under the 2008 Senior Note
Indenture and the 2008 Senior Notes in an aggregate principal amount of up to
$150,000,000;
(h) Indebtedness of the Company arising under the 2009 Senior Note
Indenture and the 2009 Senior Notes in an aggregate principal amount of up to
$120,000,000 (and renewals, exchanges, refinancings or extensions thereof, in
whole or in part, on terms and conditions substantially the same as such
existing Indebtedness and in a principal amount not in excess of that
outstanding as of the date of such renewal, exchange, refinancing or extension);
(i) Indebtedness in respect of Existing Letters of Credit;
(j) Indebtedness of non-Credit Party, Consolidated Parties to Credit
Parties, permitted pursuant to clause (k) of the definition of Permitted
Investments;
(k) the Guaranty dated September 22, 2004 by the Company in favor of
Cambridge 16, S. de X.X. de C.V. ("Landlord"), guarantying obligations under
that certain Lease dated September 22, 2004 between Landlord and WLVN de
Latinoamerica, S. de. X.X. de C.V. not exceeding $10.0 million in the aggregate;
(l) Indebtedness incurred in connection with the Permitted
Securitization; and
(m) other Indebtedness, so long as (i) such Indebtedness is unsecured;
(ii) no Default or Event of Default shall exist immediately prior to or after
the incurrence of such Indebtedness; (iii) the Borrowers shall be in pro forma
compliance with all financial covenants contained in Article VIII hereof; (iv)
the documentation evidencing such Indebtedness shall not contain covenants which
are more restrictive than the covenants contained herein and (v) such
Indebtedness shall not exceed an aggregate principal amount of $5,000,000 at any
one time outstanding.
9.2 LIENS
No Consolidated Party shall contract, create, incur, assume or permit to
exist any Lien except for Permitted Liens; provided that in no event shall any
Consolidated Party contract, create, incur, assume or permit to exist any Lien
on any of its Capital Stock except for Liens arising under
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this Agreement and the other Credit Documents or any Interest Rate Protection
Agreement to secure the Obligations.
9.3 NATURE OF BUSINESS
No Consolidated Party shall substantively alter the character of its
business from that conducted as of the Closing Date.
9.4 CONSOLIDATION OR MERGER
No Consolidated Party shall dissolve, liquidate or wind up its affairs or
enter into any transaction of merger, amalgamation or consolidation; provided,
however, that (i) the Company may merge or consolidate with any Subsidiary so
long as the Company shall be the continuing or surviving corporation, (ii) any
Credit Party (other than the Company) may merge or consolidate with any other
Credit Party, (iii) any Subsidiary of the Company that is not a Credit Party may
be merged with or into any other Subsidiary of the Company that is not a Credit
Party and (iv) any Subsidiary of the Company that is not a Credit Party may
merge or consolidate with any Credit Party so long as the Credit Party shall be
the continuing or surviving corporation.
9.5 SALE OR LEASE OF ASSETS
No Consolidated Party will convey, sell, lease, assign, transfer or
otherwise dispose of any assets (including the Capital Stock of any Subsidiary
of the Company) other than (a) sales of Inventory in the ordinary course of
business, (b) sales or other dispositions in the ordinary course of business of
assets or properties that are obsolete or that are no longer used or useful in
the conduct of such Borrower's or Subsidiary's business (not to exceed in the
aggregate in any fiscal year assets with a net book value of $3,000,000), (c)
[intentionally omitted], (d) sales in the ordinary course of business of assets
or properties (other than Inventory) used in such Borrower's or Subsidiary's
business that are worn out or in need of replacement and that are replaced with
assets of reasonably equivalent value or utility, (e) sales, leases,
assignments, transfers and other dispositions among the Credit Parties, (f)
sales of assets or properties set forth on Schedule 9.5; provided, that the net
cash proceeds of such sales are applied in accordance with Section 4.4(b)(ii),
(g) dispositions of equipment to WLVN de Latinoamerica, S. de. X.X. de C.V. and
WLV Mexico, S. de. X.X. de C.V. not to exceed equipment with a net book value of
$12.5 million in the aggregate (when added to any Investments made as permitted
under clause (q) of the definition of Permitted Investments); (h) sales or other
dispositions of accounts receivables in connection with the Permitted
Securitization; and (i) sales, leases, assignments, transfers and other
dispositions approved by the Required Lenders.
9.6 ACQUISITIONS
The Consolidated Parties will not make any Acquisitions.
9.7 TRANSACTIONS WITH AFFILIATES
The Consolidated Parties will not enter into any transaction or series of
transactions (other than transactions between the Credit Parties), whether or
not in the ordinary course of business, with any officer, director, shareholder,
Subsidiary or Affiliate except (i) upon terms and conditions that
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would be obtainable in a comparable arm's-length transaction with a Person other
than an Affiliate, (ii) employment arrangements, payment of directors' fees, and
transactions pursuant to employees' and directors' stock option plans, each in
the ordinary course of business and (iii) transactions permitted pursuant to
Sections 9.4, 9.5, or 9.11.
9.8 OWNERSHIP OF SUBSIDIARIES
The Credit Parties will not sell, transfer or otherwise dispose of, any
shares of capital stock of any of their Subsidiaries who are Credit Parties, or
permit any of their Subsidiaries who are Credit Parties to issue, sell or
otherwise dispose of, any shares of capital stock of any of their Subsidiaries,
except to other Credit Parties.
9.9 FISCAL YEAR
The Consolidated Parties will not change any of their respective fiscal
years without the prior written consent of the Required Lenders.
9.10 INVESTMENTS
The Consolidated Parties will not make any Investments except for Permitted
Investments.
9.11 RESTRICTED PAYMENTS
The Consolidated Parties will not make a Restricted Payment, other than (a)
dividends, distributions or other payments from any Subsidiary to any Borrower
or from any Consolidated Party to a Credit Party, (b) dividends payable solely
in the same class of Capital Stock of the Company, (c) [intentionally omitted],
and (d) dividends, distributions or other payments applied to the payment of the
2008 Senior Notes and to the payment of the 2009 Senior Notes to the extent any
such payments are permitted to be made pursuant to Section 9.15 hereof;
provided, however, that in each case described under clause (d) hereof,
immediately before and after giving effect to such dividend, distribution or
other payment, no Event of Default shall exist and the Company shall be in
compliance with the terms and provisions of the 2008 Senior Note Indenture and
the terms and provisions of the 2009 Senior Note Indenture.
9.12 NO ADDITIONAL BANK ACCOUNTS
The Credit Parties will not open, maintain or otherwise have any checking,
savings or other accounts at any bank or other financial institution, or any
other account where money is or may be deposited or maintained with any Person,
other than the accounts set forth on Schedule 9.12 hereto and, after the Closing
Date, such other accounts so long as each such account is subject to a tri-party
lockbox or other blocked account agreement satisfactory to the Administrative
Agent. To the extent required by Section 3.1 or 3.2, as the case may be, all
such checking, savings or other accounts of the Credit Parties shall be under
the sole dominion and control of the Administrative Agent in accordance with
Section 3.1 or 3.2.
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9.13 AMENDMENTS OF ORGANIZATIONAL DOCUMENTS, ETC
The Consolidated Parties will not, without the prior written consent of the
Administrative Agent, amend, modify, cancel or terminate or permit the
amendment, modification, cancellation of the Articles or Certificate of
Incorporation or other equivalent organizational document of any of the
Consolidated Parties, except to the extent (i) permitted under Section 7.2 and
Section 9.4 and (ii) such amendment or modification would not materially
adversely effect the Lenders. The Consolidated Parties will not, without the
prior written consent of the Administrative Agent, amend, modify, cancel or
terminate or permit the amendment or modification of the Consignment Agreement
or the agreements evidencing the Permitted Securitization except to the extent
such amendment or modification would not (a) make the covenants or events of
default contained therein more restrictive or (b) materially adversely effect
the Lenders.
9.14 ADDITIONAL NEGATIVE PLEDGES
The Consolidated Parties will not create or otherwise cause or suffer to
exist or become effective, directly or indirectly, (i) any prohibition or
restriction (including any agreement to provide equal and ratable security to
any other Person in the event a Lien is granted to or for the benefit of the
Administrative Agent and the Lenders) on the creation or existence of any Lien
upon the assets of any Consolidated Party, other than (x) Permitted Liens and
(y) the 2008 Senior Note Indenture and the 2009 Senior Note Indenture or (ii)
any contractual obligation which may restrict or inhibit the Administrative
Agent's rights or ability to sell or otherwise dispose of the Collateral or any
part thereof after the occurrence of an Event of Default.
9.15 OTHER INDEBTEDNESS
The Consolidated Parties will not effect or permit any change in or
amendment to any document or instrument pertaining to the terms of payment or
required prepayments of the 2008 Senior Notes or the 2009 Senior Notes, effect
or permit any change in or amendment to any document or instrument pertaining to
the covenants or events of default of the 2008 Senior Notes or the 2009 Senior
Notes if the effect of any such change or amendment is to make such covenants or
events of default more restrictive, give any notice of optional redemption or
optional prepayment or offer to repurchase under any such document or
instrument, or, directly or indirectly, make any payment of principal of or
interest on or in redemption, retirement or repurchase of the 2008 Senior Notes
or the 2009 Senior Notes, except for (a) scheduled payments required by the
terms of the documents and instruments evidencing 2008 Senior Notes and the 2009
Senior Notes, as the case may be and (b) so long as no Default or Event of
Default shall have occurred and be continuing immediately prior to or
immediately after giving effect to any of the actions or payments contemplated
by this subsection 9.15(b), the Consolidated Parties may prepay, redeem or
repurchase long-term (as such term is defined in accordance with GAAP)
Indebtedness of any Borrower (i) in an amount not to exceed $10,000,000 in any
fiscal year, provided the Excess Availability immediately prior to and
immediately after giving effect to such prepayment shall be equal to or greater
than $20,000,000 or (ii) with the proceeds from (1) the sale of any assets or
properties permitted by Section 9.5(f) after compliance with Section 4.4(b)(ii)
or (2) any Equity Issuance occurring after the Closing Date.
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9.16 LICENSES, ETC
The Consolidated Parties will not enter into licenses of, or otherwise
restrict the use of, any patents, trademarks or copyrights which would prevent
any Consolidated Party from selling, transferring, encumbering or otherwise
disposing of any such patent, trademark or copyright.
9.17 LIMITATIONS
The Consolidated Parties will not, directly or indirectly, create or
otherwise cause, incur, assume, suffer or permit to exist or become effective
any consensual encumbrance or restriction of any kind on the ability of any
Consolidated Party to (a) pay dividends or make any other distribution on any of
its Capital Stock, (b) pay any Indebtedness owed to a Credit Party, (c) make
loans or advances to a Credit Party or (d) transfer any of its property to a
Credit Party, except for encumbrances or restrictions existing under or by
reason of (i) customary non-assignment provisions in any lease governing a
leasehold interest, (ii) any agreement or other instrument of a Person existing
at the time it becomes a Subsidiary of a Borrower; provided that such
encumbrance or restriction is not applicable to any other Person, or any
property of any other Person, other than such Person becoming a Subsidiary of a
Borrower and was not entered into in contemplation of such Person becoming a
Subsidiary of a Borrower, (iii) this Credit Agreement and the other Credit
Documents and (iv) the 2008 Senior Note Indenture and the 2009 Senior Note
Indenture.
ARTICLE X
POWERS
10.1 APPOINTMENT OF ADMINISTRATIVE AGENT AS ATTORNEY-IN-FACT
(a) Power of Administrative Agent. Each Borrower hereby irrevocably
authorizes and appoints the Administrative Agent, or any Person or agent the
Administrative Agent may designate, as such Borrower's attorney-in-fact, at the
Borrowers' cost and expense, to exercise, subject to the limitations set forth
in Section 10.2, all of the following powers, which being coupled with an
interest, shall be irrevocable until all of the Obligations to the Lenders have
been paid and satisfied in full (other than contingent indemnification
obligations) and all of the Commitments have been terminated:
(i) To receive, take, endorse, sign, assign and deliver, all in
the name of the Administrative Agent, the Lenders or such Borrower, as the case
may be, any and all checks, notes, drafts, and other documents or instruments
relating to the Collateral;
(ii) To receive, open and dispose of all mail addressed to such
Borrower and to notify postal authorities to change the address for delivery
thereof to such address as the Administrative Agent may designate;
(iii) To request at any time from customers indebted on Accounts,
in the name of such Borrower or a third party designee of the Administrative
Agent, information concerning the Accounts and the amounts owing thereon;
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(iv) To give customers indebted on Accounts notice of the
Lenders' interest therein, and/or to instruct such customers to make payment
directly to the Administrative Agent for such Borrower's account; and
(v) To take or bring, in the name of the Administrative Agent,
the Lenders or such Borrower, all steps, actions, suits or proceedings deemed by
the Administrative Agent necessary or desirable to enforce or effect collection
of the Accounts.
10.2 LIMITATION ON EXERCISE OF POWER
Notwithstanding anything hereinabove to the contrary, the powers set forth
in Section 10.1(a) and (b) above may only be exercised by the Administrative
Agent on and after the occurrence and during the continuation of an Event of
Default which has not otherwise been waived by the Administrative Agent.
ARTICLE XI
EVENTS OF DEFAULT AND REMEDIES
11.1 EVENTS OF DEFAULT
An Event of Default shall exist upon the occurrence of any of the following
specified events (each an "Event of Default"):
(a) Payment. Any Borrower shall default in the payment of (i) any
principal owing hereunder, under any of the Credit Documents or in connection
herewith when due or (ii) any interest, fees or other amounts owing hereunder,
under any of the other Credit Documents or in connection herewith within five
days after the date due;
(b) Representations. Any representation, warranty or statement made or
deemed to be made by any Credit Party herein, in any of the Credit Documents, or
in any written statement or certificate delivered pursuant hereto or thereto
shall prove untrue in any material respect on the date as of which it was made
or deemed to have been made;
(c) Covenants. Any Credit Party shall
(i) default in the due performance or observance of any term
condition or agreement contained in Sections 7.1(i), 7.12, Article VIII or
Article IX, or
(ii) default in the due performance or observance of any term or
condition in Section 7.1(a), (b), (c) or (d) and such default shall remain
unremedied for a period of fifteen (15) Business Days after the occurrence
thereof.
(iii) default in the due performance or observance of any term,
covenant or agreement (other than those referred to in subsections (a), (b),
(c)(i) or (c)(ii)
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of this Section 11.1) contained in this Agreement and such default shall
continue unremedied for a period of thirty (30) days after the occurrence
thereof;
(d) Other Credit Documents. (i) Any Credit Party shall default in the
due performance or observance of any term, covenant or agreement in any of the
other Credit Documents (subject to applicable grace or cure periods, if any), or
(ii) any covenant, agreement or obligation of any party (other than the
Administrative Agent or any of the Lenders) contained in or evidenced by any of
the Credit Documents shall cease to be enforceable in accordance with its terms,
or any party (other than the Administrative Agent or the Lenders) to any Credit
Document shall deny or disaffirm its obligations under any of the Credit
Documents, or any Credit Document shall be canceled, terminated, revoked or
rescinded without the express prior written consent of the Administrative Agent,
or any action or proceeding shall have been commenced by any Person (other than
the Administrative Agent or any Lender) seeking to cancel, revoke, rescind or
disaffirm the obligations of any party to any Credit Document, or any court or
other Governmental Authority shall issue a judgment, order, decree or ruling to
the effect that any of the obligations of any party to any Credit Document are
illegal, invalid or unenforceable;
(e) Termination Event, Etc. The occurrence of an amortization event,
termination event, event of default or other similar event under the Permitted
Securitization or the occurrence of an event of default under the Consignment
Agreement;
(f) Bankruptcy, etc. The occurrence of any Bankruptcy Event with
respect to a Credit Party;
(g) Defaults under Other Agreements. With respect to any Indebtedness
in excess of $2,500,000 (other than Indebtedness outstanding under this
Agreement), the 2008 Senior Notes, the 2009 Senior Notes or any Interest Rate
Protection Agreement, (i) a Credit Party shall (A) default in any payment
(beyond the applicable grace period with respect thereto, if any, but not more
than ten(10) days) with respect to any such Indebtedness, or (B) default in the
observance or performance relating to such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event or condition shall occur or condition exist, the effect of which default
or other event or condition is to cause, or permit, the holder or holders of
such Indebtedness (or trustee or agent on behalf of such holders) to cause
(determined without regard to whether any notice or lapse of time is required),
any such Indebtedness to become due prior to its stated maturity; or (ii) any
such Indebtedness shall be declared due and payable, or required to be prepaid
other than by a regularly scheduled required prepayment, prior to the stated
maturity thereof;
(h) Judgments. One or more judgments or decrees shall be entered
against a Credit Party involving a liability of $2,500,000 or more in the
aggregate (to the extent not paid or fully covered by insurance (subject to
payment of the applicable deductible) provided by a carrier who, upon request,
has not denied coverage) and any such judgments or decrees shall not have been
vacated, discharged, stayed or bonded pending appeal within thirty (30) days
from the entry thereof;
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(i) ERISA. Any Termination Event with respect to a Benefit Plan shall
have occurred and be continuing thirty (30) days after notice thereof shall have
been given to the Company by the Agent or any Lender, and the then current value
of such Benefit Plan's benefits guaranteed under Title IV of ERISA exceeds the
then current value of such Benefit Plan's assets allocable to such benefits by
more than $100,000 (or in the case of a Termination Event involving the
withdrawal of a substantial employer, the withdrawing employer's proportionate
share of such excess exceeds such amount);
(j) Ownership. There shall occur a Change of Control; or
(k) Defective Liens. Any other Credit Document shall fail to be in
full force and effect or to give the Administrative Agent and/or the Lenders the
security interests, liens, rights, powers and privileges purported to be created
thereby (except as such documents may be terminated or no longer in force and
effect in accordance with the terms thereof, other than those indemnities and
provisions which by their terms shall survive).
11.2 ACCELERATION; REMEDIES
Upon the occurrence of an Event of Default, and at any time thereafter, the
Administrative Agent shall, upon the request and direction of the Required
Lenders, by written notice to the Borrowers, take any of the following actions
without prejudice to the rights of the Administrative Agent or any Lender to
enforce its claims against any Credit Party, except as otherwise specifically
provided for herein:
(a) Termination of Commitments. Declare the Commitments terminated
whereupon the Commitments shall be immediately terminated.
(b) Acceleration of Loans. Declare the unpaid principal of and any
accrued interest in respect of all Loans and any and all other indebtedness or
obligations of any and every kind owing by the Borrowers to any of the Lenders
hereunder to be due whereupon the same shall be immediately due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrowers.
(c) Cash Collateral. Direct the Borrowers to pay (and the Borrowers
agree that upon receipt of such written notice, or upon the occurrence of an
Event of Default under Section 11.1(f), they will immediately pay) to the
Administrative Agent additional cash, to be held by the Administrative Agent,
for the benefit of the Lenders, in a cash collateral account as security for the
LOC Obligations in respect of subsequent drawings under all then outstanding
Letters of Credit in an aggregate amount equal to 105% of the maximum aggregate
amount which may be drawn under all Letters of Credits then outstanding. Accrued
interest on the cash collateral account shall be for the account of the
Borrowers, subject to the prior payment in full in cash of all of the
Obligations.
(d) Enforcement of Rights. Enforce any and all rights and interests
created and existing under the Credit Documents or at law, including, without
limitation, the Security Agreement, the Pledge Agreement, and all rights of
set-off.
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Notwithstanding the foregoing, if an Event of Default specified in Section
11.1(f) shall occur, then the Commitments shall automatically terminate and all
Loans, all reimbursement obligations under Letters of Credit, all accrued
interest in respect thereof, all accrued and unpaid fees and other indebtedness
or obligations owing to the Lenders hereunder shall immediately become due and
payable without the giving of any notice or other action by the Agent or the
Lenders which notice or other action is expressly waived by the Borrowers.
ARTICLE XII
TERMINATION
Except as otherwise provided in Article XI of this Credit Agreement, the
Commitments made hereunder shall terminate on the Maturity Date, and all then
outstanding Loans and LOC Obligations shall be immediately due and payable in
full. The Credit Parties may terminate in full the Commitments hereunder at any
time and all then outstanding Loans and LOC Obligations shall be immediately due
and payable in full. Unless sooner demanded in accordance with this Agreement,
all Obligations shall become due and payable as of any termination hereunder or
under Article XI and, pending a final accounting, the Administrative Agent may
withhold, or cause to be withheld, any balances in the Borrowers' Loan accounts,
in an amount sufficient, in the Administrative Agent's reasonable discretion, to
cover all of the Obligations, whether absolute or contingent, unless supplied
with a satisfactory indemnity to cover all of such Obligations. All of the
Agent's and the Lenders' rights, liens and security interests shall continue
after any termination until all Obligations have been paid and satisfied in
full.
ARTICLE XIII
THE AGENT
13.1 APPOINTMENT
Each Lender hereby designates and appoints Wachovia as Administrative Agent
to act as specified herein and the other Credit Documents, and each such Lender
hereby authorizes the Administrative Agent as the agent for such Lender, to take
such action on its behalf under the provisions of this Agreement and the other
Credit Documents and to exercise such powers and perform such duties as are
expressly delegated by the terms hereof and of the other Credit Documents,
together with such other powers as are reasonably incidental thereto, including,
without limitation, holding all Collateral and all payments of principal,
interest, fees, charges and expenses received pursuant to this Credit Agreement
or any other Credit Document for the benefit of the Lenders. Notwithstanding any
provision to the contrary elsewhere herein and in the other Credit Documents,
the Agent shall not have any duties or responsibilities, except those expressly
set forth herein and therein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any of the other Credit
Documents, or shall otherwise exist against the Agent. The provisions of this
Article are solely for the benefit of the Agent and the Lenders and none of the
Consolidated Parties
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shall have any rights as a third party beneficiary of the provisions hereof. In
performing its functions and duties under this Agreement and the other Credit
Documents, the Agent shall act solely as agent of the Lenders and do not assume
and shall not be deemed to have assumed any obligation or relationship of agency
or trust with or for the Borrowers or any of the Consolidated Parties.
Without limiting the generality of this Section 13.1, each Lender expressly
authorizes the Administrative Agent to determine, subject to the terms of this
Credit Agreement, on behalf of such Lender whether or not Accounts shall be
deemed to constitute Eligible Accounts Receivable or Inventory shall be deemed
to constitute Eligible Inventory, to deduct reserves from the Borrowing Base,
and to increase and decrease such reserves from time to time. Such authorization
may be withdrawn by the Required Lenders; provided, however, that unless
otherwise agreed by the Administrative Agent such withdrawal of authorization
shall not become effective until the thirtieth Business Day after receipt of
such notice by the Administrative Agent. Thereafter, the Required Lenders shall
jointly instruct the Administrative Agent in writing regarding such matters with
such frequency as the Required Lenders shall jointly determine.
13.2 DELEGATION OF DUTIES
The Agent may execute any of their respective duties hereunder or under the
other Credit Documents by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
The Agent shall not be responsible for the negligence or misconduct of any
agents or attorneys-in-fact selected with reasonable care.
13.3 EXCULPATORY PROVISIONS
The Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates shall not be (a) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection
herewith or in connection with any of the other Credit Documents (except for its
or such Person's own gross negligence or willful misconduct), or (b) responsible
in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any of the Consolidated Parties contained
herein or in any of the other Credit Documents or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Agent under or in connection herewith or in connection with the other Credit
Documents, or enforceability or sufficiency therefor of any of the other Credit
Documents, or for any failure of any of the Borrowers to perform its obligations
hereunder or thereunder. The Agent shall not be responsible to any Lender for
the effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of this Agreement, or any of the other Credit Documents or for any
representations, warranties, recitals or statements made herein or therein or
made by the Borrowers or any of the Consolidated Parties in any written or oral
statement or in any financial or other statements, instruments, reports,
certificates or any other documents in connection herewith or therewith
furnished or made by the Agent to the Lenders or by or on behalf of the
Consolidated Parties to the Agent or any Lender or be required to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained herein or therein or as to the use
of the proceeds of the Loans or of the existence or possible existence of any
Default or Event of Default or to inspect the properties,
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books or records of the Consolidated Parties. The Agent is not a trustee for the
Lenders and owes no fiduciary duty to any of the Lenders.
13.4 RELIANCE ON COMMUNICATIONS
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, e-mail, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrowers or any of the Consolidated Parties,
independent accountants and other experts selected by the Administrative Agent
with reasonable care). The Agent may deem and treat the Lenders as the owner of
its respective interests hereunder for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the Agent
in accordance with Section 14.3(b). The Agent shall be fully justified in
failing or refusing to take any action under this Agreement or under any of the
other Credit Documents unless it shall first receive such advice or concurrence
of the Required Lenders as it deems appropriate or it shall first be indemnified
to its satisfaction by the Lenders against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action. The Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder or under any of the other Credit Documents in
accordance with a request of the Required Lenders (or to the extent specifically
provided in Section 14.6, all the Lenders) and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders
(including their successors and assigns).
13.5 NOTICE OF DEFAULT
The Agent shall not be deemed to have knowledge or notice of the occurrence
of any Default or Event of Default hereunder unless the Agent has received
notice from a Lender or a Consolidated Parties referring to the Credit Document,
describing such Default or Event of Default and stating that such notice is a
"notice of default." In the event that the Agent receives such a notice, the
Agent shall give prompt notice thereof to the Lenders. The Administrative Agent
shall take such action with respect to such Default or Event of Default as shall
be directed by the Required Lenders.
13.6 NON-RELIANCE ON AGENT AND OTHER LENDERS
Each Lender expressly acknowledges that neither of the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates
(including, without limitation, Wachovia Capital Markets, LLC (the "Arranger");
it being understood that each reference to affiliate in this Section 13.6 shall
include the Arranger) has made any representations or warranties to it and that
no act by the Agent or any affiliate thereof hereinafter taken, including any
review of the affairs of the Consolidated Parties, shall be deemed to constitute
any representation or warranty by the Agent to any Lender. Each Lender
represents to the Agent that it has, independently and without reliance upon the
Agent or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, assets, operations, property, financial and other conditions,
prospects and creditworthiness of the Consolidated Parties and made its own
decision to make its Loans hereunder and enter into this
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Agreement. Each Lender also represents 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 analysis, appraisals and decisions in taking or not taking action under
this Agreement, and to make such investigation as it deems necessary to inform
itself as to the business, assets, operations, property, financial and other
conditions, prospects and creditworthiness of the Consolidated Parties. Except
for notices, reports and other documents expressly required to be furnished to
the Lenders by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, assets, property, financial or other
conditions, prospects or creditworthiness of the Consolidated Parties which may
come into the possession of the Agent or any of its respective officers,
directors, employees, agents, attorneys-in-fact or affiliates.
13.7 INDEMNIFICATION
The Lenders agree to indemnify the Agent in its capacity as such (to the
extent not reimbursed by the Borrowers and without limiting the obligation of
the Borrowers to do so), ratably according to their respective Commitments, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including without limitation at any time
following the payment of the Obligations) be imposed on, incurred by or asserted
against the Agent in its respective capacity as such in any way relating to or
arising out of this Agreement or the other Credit Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agent under
or in connection with any of the foregoing; provided that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the gross negligence or willful misconduct of the Agent. If any
indemnity furnished to the Agent for any purpose shall, in the opinion of the
Agent, acting reasonably, be insufficient or become impaired, the Agent may call
for additional indemnity and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished. The agreements in this
Section shall survive the payment of the Obligations and all other amounts
payable hereunder and under the other Credit Documents.
13.8 AGENT IN ITS INDIVIDUAL CAPACITY
The Agent and its affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Borrowers or any other member
of the Consolidated Parties as though the Agent were not agent hereunder. With
respect to the Loans made, the Agent shall have the same rights and powers under
this Agreement as any Lender and may exercise the same as though it were not
agent hereunder, and the terms "Lender" and "Lenders" shall include the
Administrative Agent in its individual capacity.
13.9 SUCCESSOR AGENT
The Agent may, at any time, resign upon twenty (20) days' written notice to
the Lenders and the Company. Upon any such resignation, the Required Lenders
shall have the right to appoint a successor Administrative Agent, which
successor, so long as no Event of Default then exists, shall be reasonably
acceptable to the Company. If no successor Agent shall have been so appointed by
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the Required Lenders, and shall have accepted such appointment, within thirty
(30) days after the notice of resignation, then the retiring Agent shall select
a successor Agent provided that such successor is a Lender hereunder or a
commercial bank or financial institution organized or licensed under the laws of
the United States of America or any State thereof, and has a combined capital
and surplus of at least $500,000,000. Upon the acceptance of any appointment as
Administrative Agent, hereunder by a successor, such successor Administrative
Agent, shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations as
Administrative Agent under this Agreement and the other Credit Documents and the
provisions of this Section 13.9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was the Agent under this Agreement.
13.10 COLLATERAL MATTERS
(a) Each Lender authorizes and directs the Agent to enter into the
Security Documents for the benefit of the Lenders. Each Lender authorizes and
directs the Administrative Agent to make such changes to the form of
Acknowledgment Agreement attached hereto as Exhibit A as it deems necessary from
time to time in order to obtain any Acknowledgment Agreement from any landlord,
warehouseman, filler, packer, processor, mortgagee or any other party who has an
interest in any real property where Collateral is located with respect to any
Credit Party. Each Lender also authorizes and directs the Agent to review and
approve all agreements regarding the lockboxes and the lockbox accounts
(including the Lockbox Agreements) on such terms as the Agent deems necessary.
Each Lender hereby agrees, and each holder of any Note by the acceptance thereof
will be deemed to agree, that, except as otherwise set forth herein, any action
taken by the Required Lenders or each of the Lenders, as applicable, in
accordance with the provisions of this Credit Agreement or the Security
Documents, and the exercise by the Required Lenders or each of the Lenders, as
applicable, of the powers set forth herein or therein, together with such other
powers as are reasonably incidental thereto, shall be authorized and binding
upon all of the Lenders. The Administrative Agent is hereby authorized on behalf
of all of the Lenders, without the necessity of any notice to or further consent
from any Lender, from time to time prior to an Event of Default, to take any
action with respect to any Collateral or Security Document which may be
necessary or appropriate to perfect and maintain perfected the security interest
in and liens upon the Collateral granted pursuant to the Security Documents.
(b) The Lenders hereby authorize the Administrative Agent, at its
option and in its discretion, to release any Lien granted to or held by it upon
any Collateral (i) upon termination of the Commitments and payment in cash and
satisfaction of all of the Obligations (including the LOC Obligations) at any
time arising under or in respect of this Credit Agreement or the Credit
Documents or the transactions contemplated hereby or thereby, (ii) constituting
property being sold or disposed of upon receipt of the proceeds of such sale by
the Agent if the applicable Credit Party certifies to the Agent that the sale or
disposition is made in compliance with Section 9.5 (and the Agent may rely
conclusively on any such certificate, without further inquiry) or (iii) if
approved, authorized or ratified in writing by the Required Lenders, unless such
release is required to be approved by all of the Lenders hereunder. Upon request
by the Agent at any time, the Lenders will confirm in writing the Agent's
authority to release particular types or items of Collateral pursuant to this
Section 13.10(b).
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(c) Upon any sale and transfer of Collateral which is expressly
permitted pursuant to the terms of this Credit Agreement, or consented to in
writing by the Required Lenders or all of the Lenders, as applicable, and upon
at least five (5) Business Days' prior written request by the applicable Credit
Party, the Administrative Agent shall (and is hereby irrevocably authorized by
the Lenders to) execute such documents as may be necessary to evidence the
release of the Liens granted to the Administrative Agent for the benefit of the
Lenders herein or pursuant hereto upon the Collateral that was sold or
transferred; provided that (i) the Agent shall not be required to execute any
such document on terms which, in the Agent's opinion, acting reasonably, would
expose the Agent to liability or create any obligation or entail any consequence
other than the release of such Liens without recourse or warranty and (ii) such
release shall not in any manner discharge, affect or impair the Obligations or
any Liens upon (or obligations of such Credit Party in respect of) all interests
retained by such Credit Party, including, without limitation, the proceeds of
the sale, all of which shall continue to constitute part of the Collateral. In
the event of any sale or transfer of Collateral, or any foreclosure with respect
to any of the Collateral, the Administrative Agent shall be authorized to deduct
all of the expenses reasonably incurred by it from the proceeds of any such
sale, transfer or foreclosure.
(d) The Agent shall have no obligation whatsoever to the Lenders or to
any other Person to assure that the Collateral exists or is owned by the Credit
Parties or is cared for, protected or insured or that the liens granted to the
Agent herein or pursuant hereto have been properly or sufficiently or lawfully
created, perfected, protected or enforced or are entitled to any particular
priority, or to exercise or to continue exercising at all or in any manner or
under any duty of care, disclosure or fidelity any of the rights, authorities
and powers granted or available to the Agent in this Section 13.10 or in any of
the Security Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission or event related thereto, the Administrative
Agent may act in any manner it may deem appropriate, in its reasonable
discretion, given the Agent's own interest in the Collateral as one of the
Lenders and that the Agent shall have no duty or liability whatsoever to the
Lenders, except for its gross negligence or willful misconduct.
13.11 RIGHTS AND REMEDIES TO BE EXERCISED BY AGENT ONLY
Each Lender agrees that, except as set forth in Subsection 14.2, no Lender
shall have any right individually (i) to realize upon the security created by
the Security Documents or any other Credit Document, (ii) to enforce any
provision of this Credit Agreement or any other Credit Document against one or
more of the Credit Parties, or (iii) to make demand under this Credit Agreement
or any other Credit Document against one or more of the Credit Parties.
ARTICLE XIV
MISCELLANEOUS
14.1 NOTICES
Except as otherwise expressly provided herein, all notices, requests and
other communications shall have been duly given and shall be effective (a) when
delivered by hand, (b) when transmitted via telecopy (or other facsimile
device), (c) the Business Day following the day on
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which the same is sent by certified or registered mail, postage prepaid, in each
case to the respective parties at the address or telecopy numbers set forth on
Schedule 14.1 attached hereto, or at such other address as such party may
specify by written notice to the other parties hereto; provided, however, that
if any notice is delivered on a day other than a Business Day, or after 5:00
P.M. (Eastern time) on any Business Day, then such notice shall not be effective
until the next Business Day; and provided further, that notices of default shall
be effective only upon delivery by hand or by a reputable national overnight air
courier service (unless a telecopy notice of default is sent and receipt is
confirmed by telephone or telecopy by a Senior Management Member or Senior
Financial Officer of the Company, in which case such notice of default shall be
effective upon receipt).
14.2 RIGHT OF SET-OFF
In addition to any rights now or hereafter granted under applicable law or
otherwise, and not by way of limitation of any such rights, upon the occurrence
and during the continuation of an Event of Default, each Lender is authorized at
any time and from time to time, without presentment, demand, protest or other
notice of any kind (all of which rights being hereby expressly waived), to
set-off and to appropriate and apply any and all deposits (general or special)
and any other indebtedness at any time held or owing by such Lender (including,
without limitation branches, agencies or Affiliates of such Lender wherever
located) to or for the credit or the account of a Credit Party against
obligations and liabilities of a Credit Party to such Lender hereunder, under
the Notes, the other Credit Documents or otherwise, irrespective of whether such
Lender shall have made any demand hereunder and although such obligations,
liabilities or claims, or any of them, may be contingent or unmatured, and any
such set-off shall be deemed to have been made immediately upon the occurrence
of an Event of Default even though such charge is made or entered on the books
of such Lender subsequent thereto. Each Credit Party hereby agrees that any
Person purchasing a participation in the Loans and Commitments hereunder
pursuant to Section 14.3(c) may exercise all rights of set-off with respect to
its participation interest as fully as if such Person were a Lender hereunder.
14.3 BENEFIT OF AGREEMENT
(a) Generally. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of the
parties hereto; provided that a Borrower may not assign and transfer any of its
interests without prior written consent of the Lenders; and provided further
that the rights of each Lender to transfer, assign or grant participations in
its rights and/or obligations hereunder shall be limited as set forth in this
Section 14.3.
(b) Assignments. Subject to the consent of the Borrowers (provided,
however, that no consent shall be required during the existence and continuation
of an Event of Default) and of the Administrative Agent, which consents shall
not be unreasonably withheld, each Lender may assign all or a portion of its
rights and obligations hereunder pursuant to an assignment agreement
substantially in the form of Exhibit J to one or more Eligible Assignees;
provided that any such assignment shall be in a minimum aggregate amount of
$5,000,000 of the Commitments and in integral multiples of $1,000,000 above such
amount and that each such
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assignment shall be of a constant, not varying, percentage of all of the
assigning Lender's rights and obligations under this Agreement. Any assignment
hereunder shall be effective upon satisfaction of the conditions set forth in
the preceding sentence and delivery to the Administrative Agent of written
notice of the assignment, together with a transfer fee of $3,500 payable to the
Administrative Agent for its own account. Upon the effectiveness of any such
assignment, the assignee shall become a "Lender" for all purposes of this
Agreement and the other Credit Documents and, to the extent of such assignment,
the assigning Lender shall be relieved of its obligations hereunder to the
extent of the Loans and Commitment components being assigned. Along such lines,
the Borrowers agree that upon effectiveness of any such assignment and surrender
of the appropriate Note or Notes, it will promptly provide to the assigning
Lender and to the assignee separate promissory notes in the amount of their
respective interests substantially in the form of the original Note (but with
notation thereon that it is given in substitution for and replacement of the
original Note or any replacement notes thereof). In addition to the assignments
permitted under this Section 14.3(b), any Lender may (without notice to the
Borrowers, the Administrative Agent or any other Lender and without payment of
any fee) (i) assign and pledge all or any portion of its Loans and its Notes to
any Federal Reserve Bank as collateral security pursuant to Regulation A and any
Operating Circular issued by such Federal Reserve Bank and (ii) assign all or
any portion of its rights under this Agreement and its Loans and its Notes to an
Affiliate. No such assignment, as set forth in the preceding sentence, shall
release the assigning Lender from its obligations hereunder.
By executing and delivering an assignment agreement in accordance with
this Section 14.3(b), the assigning Lender thereunder and the assignee
thereunder shall be deemed to confirm to and agree with each other and the other
parties hereto as follows: (i) such assigning Lender warrants that it is the
legal and beneficial owner of the interest being assigned thereby free and clear
of any adverse claim and the assignee warrants that it is an Eligible Assignee;
(ii) except as set forth in clause (i) above, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement, any of the other Credit Documents or any other instrument or document
furnished pursuant hereto or thereto, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, any of the
other Credit Documents or any other instrument or document furnished pursuant
hereto or thereto or the financial condition of the Consolidated Parties or the
performance or observance by any of the Consolidated Parties of any of their
obligations under this Agreement, any of the other Credit Documents or any other
instrument or document furnished pursuant hereto or thereto; (iii) such assignee
represents and warrants that it is legally authorized to enter into such
assignment agreement; (iv) such assignee confirms that it has received a copy of
this Agreement, the other Credit Documents and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such assignment agreement; (v) such assignee will
independently and without reliance upon the Agent, such assigning Lender or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement and the other Credit Documents; (vi) such
assignee appoints and authorizes the Agent to take such action on its behalf and
to exercise such powers under this Agreement or any other Credit Document as are
delegated to the Agent by the terms hereof or thereof, together with such powers
as are reasonably incidental thereto; and (vii) such assignee agrees that it
will perform in accordance with their terms all the obligations which by the
terms
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of this Agreement and the other Credit Documents are required to be performed by
it as a Lender.
(c) Participations. Each Lender may sell, transfer, grant or assign
participations in all or any part of such Lender's rights, obligations or rights
and obligations hereunder; provided that (i) such selling Lender shall remain a
"Lender" for all purposes under this Agreement (such selling Lender's
obligations under the Credit Documents remaining unchanged) and the participant
shall not constitute a Lender hereunder, (ii) no such participant shall have, or
be granted, rights to approve any amendment or waiver relating to this Agreement
or the other Credit Documents except to the extent any such amendment or waiver
would (A) reduce the principal of or rate of interest on or fees in respect of
any Loans in which the participant is participating, (B) postpone the date fixed
for any payment of principal (including extension of the Maturity Date, but
excluding any mandatory prepayment), interest or fees in which the participant
is participating, or (C) release all or substantially all of the collateral
(except as expressly provided in the Credit Documents) supporting any of the
Loans or Commitments in which the participant is participating, and (iii)
sub-participations by the participant (except to an affiliate, parent company or
affiliate of a parent company of the participant) shall be prohibited. In the
case of any such participation, the participant shall not have any rights under
this Agreement or the other Credit Documents (the participant's rights against
the selling Lender in respect of such participation to be those set forth in the
participation agreement with such Lender creating such participation) and all
amounts payable by the Borrowers hereunder shall be determined as if such Lender
had not sold such participation, provided, however, that such participant shall
be entitled to receive additional amounts under Sections 4.9 through 4.14;
provided that such participant shall not be entitled to receive any amount
greater than such selling Lender would have received had such Lender not sold
such participation.
14.4 NO WAIVER; REMEDIES CUMULATIVE
The Borrowers hereby waive due diligence, demand, presentment and protest
and any notices thereof as well as notice of nonpayment. No failure or delay on
the part of the Agent or any Lender in exercising any right, power or privilege
hereunder or under any other Credit Document and no course of dealing between
the Borrowers or any other Credit Party and the Agent or any Lender shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or under any other Credit Document preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege hereunder or thereunder. The rights and remedies provided herein
are cumulative and not exclusive of any rights or remedies which the Agent or
any Lender would otherwise have. No notice to or demand on the Borrowers in any
case shall entitle the Borrowers or any other Credit Party to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Administrative Agent or the Lenders to any other or
further action in any circumstances without notice or demand.
14.5 PAYMENT OF EXPENSES; INDEMNIFICATION
The Borrowers agree to: (a) pay all reasonable out-of-pocket costs and
expenses of (i) the Administrative Agent and the Arranger in connection with the
negotiation, preparation, execution and delivery, and the administration, of
this Agreement and the other Credit Documents and the
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documents and instruments referred to therein (including, without limitation,
the reasonable fees and expenses of legal counsel to the Agent and all due
diligence, appraisal, field exam, environmental audit and other similar costs
(including ongoing per diem and out of pocket expenses related to field exams
and appraisals)) and any amendment, waiver or consent relating hereto and
thereto including, but not limited to, any such amendments, waivers or consents
resulting from or related to any work-out, renegotiation or restructure relating
to the performance by the Borrowers under this Agreement or any other Credit
Party under the other Credit Documents and (ii) the Agent and the Lenders in
connection with (A) enforcement of the Credit Documents and the documents and
instruments referred to therein (including, without limitation, in connection
with any such enforcement, the reasonable fees and disbursements of counsel for
the Agent and each of the Lenders), and (B) any investigation (including,
without limitation, background checks) performed to determine whether any Credit
Party, or any officer, director or Affiliate of a Credit Party has violated any
Anti-Terrorism Law or other similar law; (b) pay and hold each of the Lenders
harmless from and against any and all claims for Non-Excluded Taxes as set forth
in Section 4.13 and hold each of the Lenders harmless from and against any and
all liabilities with respect to or resulting from any delay or omission (other
than to the extent attributable to such Lender) to pay such Non-Excluded Taxes;
and (c) indemnify each Agent, the Arranger and each Lender, its officers,
directors, employees, representatives and agents from and hold each of them
harmless against any and all losses, liabilities, claims, damages or expenses
incurred by any of them as a result of, or arising out of, or in any way related
to, or by reason of, any investigation, litigation or other proceeding (whether
or not any Agent, the Arranger or Lender is a party thereto) related to the
entering into and/or performance of any Credit Document or the use of proceeds
of any Loans (including other extensions of credit) hereunder or the
consummation of any other transactions contemplated in any Credit Document,
including, without limitation, the reasonable fees and disbursements of counsel
incurred in connection with any such investigation, litigation or other
proceeding (but excluding any such losses, liabilities, claims, damages or
expenses to the extent they relate to disputes solely between or among the
Lenders (excluding Wachovia acting in its capacity as Administrative Agent) or
they are incurred by reason of gross negligence or willful misconduct on the
part of the Person to be indemnified).
14.6 AMENDMENTS, WAIVERS AND CONSENTS
Neither the amendment or waiver of any provision of this Credit Agreement
or any other Credit Document, nor the consent to any departure by any Borrower
or other Credit Party therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Required Lenders, or if the Lenders shall
not be parties thereto, by the parties thereto and consented to by the Required
Lenders, and each such amendment, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided
that no amendment, waiver or consent shall unless in writing and signed by all
the Lenders, do any of the following: (a) increase the Commitments of the
Lenders or subject the Lenders to any additional obligations, (b) except as
otherwise expressly provided in this Credit Agreement, reduce the principal of,
or interest on, any Note or any Letter of Credit reimbursement obligations or
any fees hereunder, (c) postpone any date fixed for any payment in respect of
principal of, or interest on, any Note or any Letter of Credit reimbursement
obligations or any fees hereunder, (d) change the percentage of the Commitments,
or any minimum requirement necessary for the Lenders or the Required Lenders to
take any action hereunder, (e) amend or waive this Section 14.6, or change the
definition of Required Lenders, (f) release any Borrower,
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(g) except as otherwise expressly provided in this Credit Agreement, and other
than in connection with the financing, refinancing, sale or other disposition of
any asset of the Credit Parties permitted under this Credit Agreement, release
any Liens in favor of the Lenders on any material portion of the Collateral or
(h) amend or modify the definition of "Borrowing Base" or any defined term or
component set forth in the definition thereof such that more credit would be
available to the Borrowers; provided, however, that (i) the foregoing shall not
limit the adjustment by the Administrative Agent of any reserve implemented by
Administrative Agent, and (ii) the foregoing shall not prevent the
Administrative Agent from restoring any component of the Borrowing Base which
had been lowered by the Administrative Agent back to the value of such component
as in effect on the Closing Date or to an intermediate value; and provided,
further, that no amendment, waiver or consent affecting the rights or duties of
the Agent or the Issuing Lender under any Credit Document shall in any event be
effective, unless in writing and signed by the Agent and/or the Issuing Lender,
as applicable, in addition to the Lenders required hereinabove to take such
action. Notwithstanding any of the foregoing to the contrary, the consent of the
Borrowers shall not be required for any amendment, modification or waiver of the
provisions of Article XIII (other than the provisions of Section 13.9). In
addition, the Borrowers and the Lenders hereby authorize the Administrative
Agent to modify this Credit Agreement by unilaterally amending or supplementing
Schedule 1.1A from time to time in the manner requested by the Borrowers, the
Agent or any Lender in order to reflect any assignments or transfers of the
Loans as provided for hereunder; provided, however, that the Administrative
Agent shall promptly deliver a copy of any such modification to the Borrowers
and each Lender.
14.7 DEFAULTING LENDER
Each Lender understands and agrees that if such Lender is a Defaulting
Lender then it shall not be entitled to vote on any matter requiring the consent
of the Required Lenders or to object to any matter requiring the consent of all
the Lenders; provided, however, that all other benefits and obligations under
the Credit Documents shall apply to such Defaulting Lender.
14.8 COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which
where so executed and delivered shall be an original, but all of which shall
constitute one and the same instrument. It shall not be necessary in making
proof of this Agreement to produce or account for more than one such
counterpart. Delivery of an executed counterpart by telecopy shall be as
effective as delivery of a manually executed counterpart hereto and shall
constitute a representation that an original executed counterpart will be
provided.
14.9 HEADINGS
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Agreement.
14.10 SURVIVAL OF INDEMNIFICATION AND REPRESENTATIONS AND WARRANTIES
All indemnities set forth herein and all representations and warranties
made herein shall survive the execution and delivery of this Agreement, the
making of the Loans, the issuance of the
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Letters of Credit, and the repayment of the Loans, LOC Obligations and other
obligations and the termination of the Commitments hereunder.
14.11 CURRENCY
The use of term "dollars" or "Dollars" or the symbol "$" or "U.S. $" in the
Credit Documents shall mean a reference to lawful money of the United States of
America unless specifically indicated otherwise.
14.12 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED
BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NORTH CAROLINA. Any legal action or proceeding with respect to this Credit
Agreement or any other Credit Document shall be brought in the courts of the
State of North Carolina in Mecklenburg County or of the United States for the
Western District of North Carolina, and, by execution and delivery of this
Credit Agreement, each of the Borrowers hereby irrevocably accepts for itself
and in respect of its property, generally and unconditionally, the nonexclusive
jurisdiction of such courts. Each of the Borrowers further irrevocably consents
to the service of process out of any of the aforementioned courts in any such
action or proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to it at the address set out for notices pursuant to
Section 14.1, such service to become effective three (3) days after such
mailing. Nothing herein shall affect the right of the Administrative Agent or
any Lender to serve process in any other manner permitted by law or to commence
legal proceedings or to otherwise proceed against any Borrower in any other
jurisdiction.
(b) Each of the Borrowers hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Credit Agreement or any other Credit Document brought in the courts referred to
in subsection (a) above and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum.
(c) The Company hereby irrevocably appoints CT Corporation System,
which currently maintains a North Carolina office situated at 000 Xxxxxxxxxxxx
Xxxxxx, Xxxxxxx, Xxxxx Xxxxxxxx 00000, as its agent to receive service of
process or other legal summons for purposes of any legal action or proceeding.
So long as the Company has any obligation under this Credit Agreement or any of
the Credit Documents, it will maintain a duly appointed agent in North Carolina
for the service of such process or summons, and if it fails to maintain such an
agent, any such process or summons may be served by mailing a copy thereof by
registered mail, or a form of mail substantially equivalent thereto, addressed
to it at its address as provided for notices hereunder.
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14.13 ARBITRATION
(a) Notwithstanding the provisions of Section 14.12 to the contrary,
upon demand of any party hereto, whether made before or after institution of any
judicial proceeding, any dispute, claim or controversy arising out of, connected
with or relating to this Credit Agreement and other Credit Documents
("Disputes") between or among parties to this Credit Agreement shall be resolved
by binding arbitration as provided herein. Institution of a judicial proceeding
by a party does not waive the right of that party to demand arbitration
hereunder. Disputes may include, without limitation, tort claims, counterclaims,
disputes as to whether a matter is subject to arbitration, claims brought as
class actions, claims arising from Credit Documents executed in the future, or
claims arising out of or connected with the transaction reflected by this Credit
Agreement.
Arbitration shall be conducted under and governed by the Commercial
Financial Disputes Arbitration Rules (the "Arbitration Rules") of the American
Arbitration Association (the "AAA") and Title 9 of the U.S. Code. All
arbitration hearings shall be conducted in Charlotte, North Carolina. A hearing
shall begin within ninety (90) days of demand for arbitration and all hearings
shall be concluded within one hundred twenty (120) days of demand for
arbitration. These time limitations may not be extended unless a party shows
cause for extension and then no more than a total extension of sixty (60) days.
The expedited procedures set forth in Rule 51 et seq. of the Arbitration Rules
shall be applicable to claims of less than $1,000,000. All applicable statutes
of limitation shall apply to any Dispute. The panel from which all arbitrators
are selected shall be comprised of licensed attorneys selected from the
Commercial Financial Dispute Arbitration Panel of the AAA. The single arbitrator
selected for expedited procedure shall be a retired judge from the highest court
of general jurisdiction, state or federal, of the state where the hearing will
be conducted or if such person is not available to serve, the single arbitrator
may be a licensed attorney. The parties hereto do not waive applicable Federal
or state substantive law except as provided herein. A judgment upon the award
may be entered in any court having jurisdiction. Notwithstanding the foregoing,
this arbitration provision does not apply to disputes under or related to
Hedging Agreements.
(b) Notwithstanding the preceding binding arbitration provisions, the
Administrative Agent, the Lenders and the Borrowers agree to preserve, without
diminution, certain remedies that the Administrative Agent on behalf of the
Lenders may employ or exercise freely, independently or in connection with an
arbitration proceeding or after an arbitration action is brought. The
Administrative Agent on behalf of the Lenders shall have the right to proceed in
any court of proper jurisdiction or by self-help to exercise or prosecute the
following remedies, as applicable (i) all rights to foreclose against any real
or personal property or other security by exercising a power of sale granted
under Credit Documents or under applicable law or by judicial foreclosure and
sale, including a proceeding to confirm the sale; (ii) all rights of self-help
including peaceful occupation of real property and collection of rents, setoff,
and peaceful possession of personal property; (iii) obtaining provisional or
ancillary remedies including injunctive relief, sequestration, garnishment,
attachment, appointment of receiver and filing an involuntary bankruptcy
proceeding; and (iv) when applicable, a judgment by confession of judgment. Any
claim or controversy with regard to the Administrative Agent's entitlement on
behalf of the Lenders to exercise such remedies is a Dispute. Preservation of
these remedies
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does not limit the power of an arbitrator to grant similar remedies that may be
requested by a party in a Dispute.
(c) The parties hereto agree that they shall not have a remedy of
punitive or exemplary damages against the other in any Dispute and hereby waive
any right or claim to punitive or exemplary damages they have now or which may
arise in the future in connection with any Dispute whether the Dispute is
resolved by arbitration or judicially.
(d) By execution and delivery of this Credit Agreement, each of the
parties hereto accepts, for itself and in connection with its properties,
generally and unconditionally, the non-exclusive jurisdiction relating to any
arbitration proceedings conducted under the Arbitration Rules in Charlotte,
North Carolina and irrevocably agrees to be bound by any final judgment rendered
thereby in connection with this Credit Agreement from which no appeal has been
taken or is available.
14.14 WAIVER OF JURY TRIAL
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES TO THIS
AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OF
THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
14.15 SEVERABILITY
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
14.16 LOAN ENTIRETY
This Agreement together with the other Credit Documents represent the
entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence relating to the Credit Documents or the transactions
contemplated herein and therein; provided, however, that the Administrative
Agent Fee Letter shall remain in effect subsequent to the execution and delivery
of this Agreement.
14.17 BINDING EFFECT; AMENDMENT AND RESTATEMENT OF EXISTING CREDIT
AGREEMENT; FURTHER ASSURANCES
This Agreement shall become effective at such time, on or after the Closing
Date, that the conditions precedent set forth in Section 5.1 have been satisfied
and when it shall have been executed by each Borrower and the Agent, and the
Agent shall receive copies hereof (telecopied or otherwise) which, when taken
together, bear the signatures of each Lender (including the Issuing Lenders),
and thereafter this Agreement shall be binding upon and inure to the benefit of
each Borrower, each Lender (including the Issuing Lenders) and the Agent,
together with their respective
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successors and assigns. The Borrowers agree, upon the request of the
Administrative Agent and/or the Required Lenders, to promptly take such actions,
as reasonably requested, as are appropriate to carry out the intent of this
Agreement and the other Credit Documents, including, but not limited to, such
actions as are reasonably necessary to ensure that the Lenders have a perfected
security interest in all collateral securing the Obligations, subject to no
Liens other than Permitted Liens. This Agreement amends and restates the
Existing Credit Agreement and is not intended to be or operate as a novation or
an accord and satisfaction of the Existing Credit Agreement or the Obligations
evidenced or secured thereby or provided for thereunder.
14.18 CONFIDENTIALITY
The Agent and the Lenders agree to keep confidential (and to cause their
respective affiliates, officers, directors, employees, agents and
representatives to keep confidential) all information, materials and documents
furnished to the Agent or any such Lender by or on behalf of the Credit Parties
(whether before or after the Closing Date) which relates to the Credit Parties
(the "Information"). Notwithstanding the foregoing, the Agent and Lenders shall
be permitted to disclose Information (i) to its affiliates, officers, directors,
employees, agents and representatives in connection with their participation in
any of the transactions evidenced by this Agreement or any other Credit
Documents or the administration of this Agreement or any other Credit Documents
(so long as such Persons are notified of the confidential nature of the
information); (ii) to the extent required by applicable laws and regulations or
by any subpoena or similar legal process, or requested by any Governmental
Authority; (iii) to the extent such Information (A) becomes publicly available
other than as a result of a breach of this Credit Agreement or any agreement
entered into pursuant to clause (iv) below, (B) becomes available to the Agent
or any Lender on a non-confidential basis or (C) was available to the Agent or
Lenders on a non-confidential basis prior to its disclosure to the Agent or any
Lender by the Credit Parties; (iv) to any assignee or participant (or
prospective assignee or participant) so long as such assignee or participant (or
prospective assignee or participant) first specifically agrees in a writing
furnished to and for the benefit of the parties hereto to be bound by the terms
of this Section; (v) to Gold Sheets and other similar bank trade publications;
such information to consist of deal terms and other information customarily
found in such publications or (vi) to the extent that the Credit Parties shall
have consented in writing to such disclosure. Nothing set forth in this Section
shall obligate the Agent or any Lender to return any materials furnished by the
Credit Parties.
14.19 JUDGMENT CURRENCY
(a) If for the purposes of obtaining judgment in any court it is
necessary to convert all or any part of the Indebtedness or any other amount due
to the Lenders hereunder or under any security in respect of the Borrowers'
obligations hereunder in any currency (the "Original Currency") into another
currency (the "Other Currency") each Borrower to the fullest extent that it may
effectively do so, agrees that the rate of exchange used shall be that at which,
in accordance with normal banking procedures, the Administrative Agent could
purchase the Original Currency with the Other Currency at its principal offices
in Charlotte, North Carolina on the day (a "Business Day") on which the
Administrative Agent is open for the transaction of its banking business at such
offices immediately preceding the day on which any such judgment, or any
relevant part thereof, is paid or otherwise satisfied.
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(b) The obligation of each Borrower in respect of any sum due in the
Original Currency from it to the Lenders hereunder or under any security in
respect of the Borrowers' obligation hereunder shall, notwithstanding any
judgment in any Other Currency, be discharged only to the extent that on the
Business Day following receipt by the Agent of any sum adjudged to be so due in
such Other Currency or of any other sum in any Other Currency the Agent may, in
accordance with their normal banking procedures, purchase the Original Currency
with such Other Currency. If the amount of the Original Currency so purchased is
less than the sum originally due to the Lenders in the Original Currency, the
Borrowers shall, as a separate obligation and notwithstanding any such judgment,
indemnify the Agent against such loss, and if the amount of the Original
Currency so purchased exceeds the sum originally due to the Lenders, the Agent
shall remit such excess to the Borrowers.
14.20 MAXIMUM RATE
Notwithstanding anything to the contrary contained elsewhere in this Credit
Agreement or in any other Credit Document, the Borrowers, the Administrative
Agent and the Lenders hereby agree that all agreements among them under this
Credit Agreement and the other Credit Documents, whether now existing or
hereafter arising and whether written or oral, are expressly limited so that in
no contingency or event whatsoever shall the amount paid, or agreed to be paid,
to the Administrative Agent or any Lender for the use, forbearance, or detention
of the money loaned to any Borrower and evidenced hereby or thereby or for the
performance or payment of any covenant or obligation contained herein or
therein, exceed the Highest Lawful Rate. If due to any circumstance whatsoever,
fulfillment of any provisions of this Credit Agreement or any of the other
Credit Documents at the time performance of such provision shall be due shall
exceed the Highest Lawful Rate, then, automatically, the obligation to be
fulfilled shall be modified or reduced to the extent necessary to limit such
interest to the Highest Lawful Rate, and if from any such circumstance any
Lender should ever receive anything of value deemed interest by applicable law
which would exceed the Highest Lawful Rate, such excessive interest shall be
applied to the reduction of the principal amount then outstanding hereunder or
on account of any other then outstanding Obligations and not to the payment of
interest, or if such excessive interest exceeds the principal unpaid balance
then outstanding hereunder and such other then outstanding Obligations, such
excess shall be refunded to the applicable Borrower. All sums paid or agreed to
be paid to the Administrative Agent or any Lender for the use, forbearance, or
detention of the Obligations and other indebtedness of the Borrowers to the
Administrative Agent or any Lender shall, to the extent permitted by applicable
law, be amortized, prorated, allocated and spread throughout the full term of
such indebtedness until payment in full so that the actual rate of interest on
account of all such indebtedness does not exceed the Highest Lawful Rate
throughout the entire term of such indebtedness. The terms and provisions of
this Section shall control every other provision of this Credit Agreement and
all agreements among the Borrowers, the Administrative Agent and the Lenders.
14.21 CONCERNING JOINT AND SEVERAL LIABILITY OF THE BORROWERS
(a) Each of the Borrowers is accepting joint and several liability
hereunder in consideration of the financial accommodation to be provided by the
Lenders under this Credit Agreement, for the mutual benefit, directly and
indirectly, of each of the Borrowers and in
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consideration of the undertakings of each of the Borrowers to accept joint and
several liability for the obligations of each of them.
(b) Each of the Borrowers jointly and severally hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other Borrowers with respect to the payment and
performance of all of the Obligations, it being the intention of the parties
hereto that all the Obligations shall be the joint and several obligations of
each of the Borrowers without preferences or distinction among them.
(c) If and to the extent that any of the Borrowers shall fail to make
any payment with respect to any of the Obligations as and when due or to perform
any of the Obligations in accordance with the terms thereof, then in each such
event, the other Borrowers will make such payment with respect to, or perform,
such Obligation.
(d) The obligations of each Borrower under the provisions of this
Section 14.21 constitute full recourse obligations of such Borrower, enforceable
against it to the full extent of its properties and assets, irrespective of the
validity, regularity or enforceability of this Credit Agreement or any other
circumstances whatsoever.
(e) Except as otherwise expressly provided herein or in the other
Credit Documents, each Borrower hereby waives notice of acceptance of its joint
and several liability, notice of any Loan made under this Credit Agreement,
notice of occurrence of any Event of Default, or of any demand for any payment
under this Credit Agreement, notice of any action at any time taken or omitted
by any Lender under or in respect of any of the Obligations, any requirement of
diligence and, generally, all demands, notices and other formalities of every
kind in connection with this Credit Agreement. Each Borrower hereby assents to,
and waives notice of, any extension or postponement of the time for the payment
of any of the Obligations, the acceptance of any partial payment thereon, any
waiver, consent or other action or acquiescence by any Lender at any time or
times in respect of any default by any Borrower in the performance or
satisfaction of any term, covenant, condition or provision of this Credit
Agreement, any and all other indulgences whatsoever by any Lender in respect of
any of the Obligations, and the taking, addition, substitution or release, in
whole or in part, at any time or times, of any security for any of the
Obligations or in part, at any time or times, of any security for any of the
Obligations or the addition, substitution or release, in whole or in part, of
any Borrower. Without limiting the generality of the foregoing, each Borrower
assents to any other action or delay in acting or failure to act on the part of
any Lender, including, without limitation, any failure strictly or diligently to
assert any right or to pursue any remedy or to comply fully with the applicable
laws or regulations thereunder which might, but for the provisions of this
Section 14.21, afford grounds for terminating, discharging or relieving such
Borrower, in whole or in part, from any of its obligations under this Section
14.21, it being the intention of each Borrower that, so long as any of the
Obligations remain unsatisfied, the obligations of such Borrower under this
Section 14.21 shall not be discharged except by performance and then only to the
extent of such performance. The Obligations of each Borrower under this Section
14.21 shall not be diminished or rendered unenforceable by any winding up,
reorganization, arrangement, liquidation, reconstruction or similar proceeding
with respect to any Borrower or any Lender. The joint and several liability of
the Borrowers hereunder shall continue in full force and effect
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notwithstanding any absorption, merger, amalgamation or any other change
whatsoever in the name, membership, constitution or place of formation of any
Borrower or any Lender.
(f) The provisions of this Section 14.21 are made for the benefit of
the Lenders and their respective successors and assigns, and may be enforced by
any such Person from time to time against any of the Borrowers as often as
occasion therefor may arise and without requirement on the part of any Lender
first to marshal any of its claims or to exercise any of its rights against any
of the other Borrowers or to exhaust any remedies available to it against any of
the other Borrowers or to resort to any other source or means of obtaining
payment of any of the Obligations or to elect any other remedy. The provisions
of this Section 14.21 shall remain in effect until all the Obligations shall
have been paid in full or otherwise fully satisfied. If at any time, any
payment, or any part thereof, made in respect of any of the Obligations, is
rescinded or must otherwise be restored or returned by any Lender upon the
insolvency, bankruptcy or reorganization of any of the Borrowers, or otherwise,
the provisions of this Section 14.21 will forthwith be reinstated in effect, as
though such payment had not been made.
(g) Notwithstanding any provision to the contrary contained herein or
in any other of the Credit Documents, to the extent the joint obligations of a
Borrower shall be adjudicated to be invalid or unenforceable for any reason
(including, without limitation, because of any applicable state or federal law
relating to fraudulent conveyances or transfers) then the obligations of each
Borrower hereunder shall be limited to the maximum amount that is permissible
under applicable law (whether federal or state and including, without
limitation, the U.S. federal Bankruptcy Code).
(h) The Borrowers hereby agree, as among themselves, that if any
Borrower shall become an Excess Funding Borrower (as defined below), each other
Borrower shall, on demand of such Excess Funding Borrower (but subject to the
next sentence hereof and to subsection (B) below), pay to such Excess Funding
Borrower an amount equal to such Borrower's Pro Rata Share (as defined below and
determined, for this purpose, without reference to the properties, assets,
liabilities and debts of such Excess Funding Borrower) of such Excess Payment
(as defined below). The payment obligation of any Borrower to any Excess Funding
Borrower under this Section 14.21(h) shall be subordinate and subject in right
of payment to the prior payment in full of the Obligations of such Borrower
under the other provisions of this Credit Agreement, and such Excess Funding
Borrower shall not exercise any right or remedy with respect to such excess
until payment and satisfaction in full of all of such Obligations. For purposes
hereof, (i) "Excess Funding Borrower" shall mean, in respect of any Obligations
arising under the other provisions of this Credit Agreement (hereafter, the
"Joint Obligations"), a Borrower that has paid an amount in excess of its Pro
Rata Share of the Joint Obligations; (ii) "Excess Payment" shall mean, in
respect of any Joint Obligations, the amount paid by an Excess Funding Borrower
in excess of its Pro Rata Share of such Joint Obligations; and (iii) "Pro Rata
Share", for the purposes of this Section 14.21(h), shall mean, for any Borrower,
the ratio (expressed as a percentage) of (A) the amount by which the aggregate
present fair salable value of all of its assets and properties exceeds the
amount of all debts and liabilities of such Borrower (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of such Borrower hereunder) to (B) the amount by which the aggregate
present fair salable value of all assets and other properties of such Borrower
and all of the other Borrowers exceeds the amount of all of the debts and
liabilities (including contingent, subordinated,
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unmatured, and unliquidated liabilities, but excluding the obligations of such
Borrower and the other Borrowers hereunder) of such Borrower and all of the
other Borrowers, all as of the Closing Date (if any Borrower becomes a party
hereto subsequent to the Closing Date, then for the purposes of this Section
14.21(h) such subsequent Borrower shall be deemed to have been a Borrower as of
the Closing Date and the information pertaining to, and only pertaining to, such
Borrower as of the date such Borrower became a Borrower shall be deemed true as
of the Closing Date).
14.22 NONLIABILITY OF AGENTS AND LENDERS
The relationship between any Borrower on the one hand and the Lenders and
the Agent on the other hand shall be solely that of borrower and lender. Neither
the Agent nor any Lender shall have any fiduciary responsibilities to any
Borrower. Neither the Agent nor any Lender undertakes any responsibility to any
Borrower to review or inform such Borrower of any matter in connection with any
phase of such Borrower's business or operations.
14.23 INDEPENDENT NATURE OF LENDERS' RIGHTS
The amounts payable at any time hereunder to each Lender under such
Lender's Note or Notes shall be a separate and independent debt.
14.24 POWER OF ATTORNEY
Each Subsidiary Borrower hereby agrees that by its execution of this
Agreement, such Subsidiary Borrower appoints each of Xxxxxx X. Xxxxxxx, Xx.
President and Chief Operating Officer, Xxxxxx Xxxxxxxx, Chief Executive Officer
and Chairman, Xxxxxx X. Xxxxx, Senior Vice President, Chief Financial Officer
and Secretary, and Xxxxx X. Xxxxxxxxxx, Corporate Controller, to be its
attorneys ("its Attorneys") and in its name and on its behalf and as its act and
deed or otherwise to sign all documents and carry out all such acts as are
necessary or appropriate in connection with executing any Notice of Borrowing,
Notice of Extension/Conversion or any Borrowing Base Certificate or any security
documents (the "Documents") in connection with this Agreement or any other
Credit Document. This Power of Attorney shall be valid for the duration of the
term of this Agreement; provided, however, the above referenced persons may be
replaced upon written notice by the Borrower to the Administrative Agent. Each
Subsidiary Borrower hereby undertakes to ratify everything which either of its
Attorneys shall do in order to execute the Documents mentioned herein.
14.25 PATRIOT ACT NOTICE.
Each Lender and the Administrative Agent (for itself and not on behalf of
any other party) hereby notifies the Company and each other Credit Party that,
pursuant to the requirements of the USA Patriot Act, Title III of Pub. L.
107-56, signed into law October 26, 2001 (the "Patriot Act"), it is required to
obtain, verify and record information that identifies the Company and each other
Credit Party, which information includes the name and address of the Company,
each other Credit Party and other information that will allow such Lender or the
Administrative Agent, as applicable, to identify the Company and each other
Credit Party in accordance with the Patriot Act.
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Each of the parties hereto has caused a counterpart of this Credit
Agreement to be duly executed and delivered as of the date first above written.
COMPANY:
WOLVERINE TUBE, INC.
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Name: XXXXXX X. XXXXX
Title: Senior Vice President,
CFO And Secretary
SUBSIDIARY BORROWERS:
TF INVESTOR, INC.
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Name: XXXXXX X. XXXXX
Title: Vice President, And Treasurer
TUBE FORMING HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Name: XXXXXX X. XXXXX
Title: Vice President, And Treasurer
TUBE FORMING, L.P.
By: Tube Forming Holdings, Inc.,
its General Partner
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Name: XXXXXX X. XXXXX
Title: Vice President, And Treasurer
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WOLVERINE FINANCE, LLC
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Name: XXXXXX X. XXXXX
Title: Vice Manager And Treasurer
SMALL TUBE MANUFACTURING, LLC
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Name: XXXXXX X. XXXXX
Title: Vice President, And Treasurer
WOLVERINE JOINING TECHNOLOGIES, LLC
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Name: XXXXXX X. XXXXX
Title: Vice President, And Treasurer
WOLVERINE CHINA INVESTMENTS, LLC
By: Wolverine Tube, Inc.,
its Managing Member
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Name: XXXXXX X. XXXXX
Title: Senior Vice President, CFO
And Secretary
WT HOLDING COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Name: XXXXXX X. XXXXX
Title: Vice President, And Treasurer
S-2
LENDERS:
WACHOVIA BANK,
NATIONAL ASSOCIATION, in its capacity
as Administrative Agent and as a Lender
By: /s/ Xxxxxx X. X'Xxxxxx
------------------------------------
Name: Xxxxxx X. X'Xxxxxx
Title: Director
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