Exhibit 4.38
EXECUTION COPY
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AMENDED AND RESTATED CREDIT AGREEMENT
BY AND AMONG
BAIRNCO CORPORATION
AS PARENT
CERTAIN OF ITS SUBSIDIARIES THAT ARE SIGNATORIES HERETO
AS BORROWERS,
AND
STEEL PARTNERS II, L.P.,
AS LENDER
DATED AS OF JULY 17, 2007
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Anything herein to the contrary notwithstanding, the repayment of the
obligations evidenced by this Agreement, the liens and security interests
securing the obligations evidenced by this Agreement, the exercise of any right
or remedy with respect thereto, and certain of the rights of the holder hereof
are subject to the provisions of the Intercreditor and Subordination Agreement
dated as of July 17, 2007 (as amended, restated, supplemented, or otherwise
modified from time to time, the "INTERCREDITOR AGREEMENT"), by and between Xxxxx
Fargo Foothill, Inc., and Ableco Finance LLC, as Senior Agents, and Steel
Partners II, L.P., as Subordinated Creditor. In the event of any conflict
between the terms of the Intercreditor Agreement and this Agreement, the terms
of the Intercreditor Agreement shall govern and control.
1. DEFINITIONS AND CONSTRUCTION...........................................1
1.1 DEFINITIONS......................................................1
1.2 ACCOUNTING TERMS.................................................1
1.3 CODE.............................................................2
1.4 CONSTRUCTION.....................................................2
1.5 PROVINCE OF QUEBEC...............................................2
1.6 SCHEDULES AND EXHIBITS...........................................2
2. LOAN AND TERMS OF PAYMENT..............................................2
2.1 TERM LOAN........................................................2
2.2 PROTECTIVE ADVANCES AND NOTATION.................................3
2.3 PAYMENTS.........................................................3
2.4 INTEREST RATES AND FEES: RATES, PAYMENTS, AND CALCULATIONS......6
2.5 [INTENTIONALLY OMITTED]..........................................7
2.6 CREDITING PAYMENTS...............................................7
2.7 DESIGNATED ACCOUNT...............................................7
2.8 MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF OBLIGATIONS...........7
2.9 CAPITAL REQUIREMENTS.............................................7
2.10 JOINT AND SEVERAL LIABILITY OF BORROWERS.........................8
2.11 SECURITIZATION..................................................10
3. CONDITIONS; TERM OF AGREEMENT.........................................11
3.1 CONDITIONS PRECEDENT TO THE TERM LOAN...........................11
3.2 TERM............................................................11
3.3 EFFECT OF TERMINATION...........................................11
3.4 EARLY TERMINATION BY BORROWERS..................................11
4. REPRESENTATIONS AND WARRANTIES........................................12
4.1 NO ENCUMBRANCES.................................................12
4.2 ORIGINAL LSA....................................................12
4.3 [INTENTIONALLY OMITTED.]........................................12
4.4 EQUIPMENT.......................................................12
4.5 LOCATION OF COLLATERAL..........................................12
4.6 INVENTORY RECORDS...............................................12
4.7 JURISDICTION OF ORGANIZATION; LOCATION OF CHIEF EXECUTIVE
OFFICE; ORGANIZATIONAL IDENTIFICATION NUMBER; COMMERCIAL
TORT CLAIMS.....................................................12
4.8 DUE ORGANIZATION AND QUALIFICATION; SUBSIDIARIES................13
4.9 DUE AUTHORIZATION; NO CONFLICT..................................13
4.10 LITIGATION......................................................15
4.11 NO MATERIAL ADVERSE CHANGE......................................15
4.12 FRAUDULENT TRANSFER.............................................15
4.13 EMPLOYEE BENEFITS; LABOR MATTERS................................15
4.14 ENVIRONMENTAL CONDITION.........................................16
4.15 INTELLECTUAL PROPERTY...........................................17
4.16 LEASES; ETC.....................................................17
4.17 DEPOSIT ACCOUNTS AND SECURITIES ACCOUNTS........................17
4.18 COMPLETE DISCLOSURE.............................................17
4.19 INDEBTEDNESS....................................................17
4.20 MATERIAL CONTRACTS..............................................17
4.21 PERMITS, LICENSES, ETC..........................................18
4.22 SUPPLIERS.......................................................18
4.23 MARGIN STOCK....................................................18
4.24 INSURANCE.......................................................18
4.25 INVESTMENT COMPANY ACT, ETC.....................................18
4.26 TAXES, ETC......................................................18
4.27 NATURE OF BUSINESS..............................................19
4.28 RELATED TRANSACTION DOCUMENTS...................................19
4.29 NO IMMUNITY.....................................................19
4.30 NO TAXES........................................................19
5. AFFIRMATIVE COVENANTS.................................................19
5.1 ACCOUNTING SYSTEM...............................................19
5.2 COLLATERAL REPORTING............................................19
5.3 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES.....................20
5.4 GUARANTOR REPORTS...............................................20
5.5 INSPECTION......................................................20
5.6 MAINTENANCE OF PROPERTIES.......................................20
5.7 TAXES...........................................................20
5.8 INSURANCE.......................................................20
5.9 LOCATION OF COLLATERAL..........................................21
5.10 COMPLIANCE WITH LAWS............................................21
5.11 LEASES..........................................................21
5.12 EXISTENCE.......................................................21
5.13 ENVIRONMENTAL...................................................21
5.14 DISCLOSURE UPDATES..............................................22
5.15 CONTROL AGREEMENTS..............................................22
5.16 FORMATION OF SUBSIDIARIES.......................................22
5.17 FURTHER ASSURANCES..............................................22
5.18 MATERIAL CONTRACTS..............................................23
5.19 SUBORDINATION...................................................23
5.20 AFTER ACQUIRED REAL PROPERTY....................................23
6. NEGATIVE COVENANTS....................................................24
6.1 INDEBTEDNESS....................................................24
6.2 LIENS...........................................................24
6.3 RESTRICTIONS ON FUNDAMENTAL CHANGES.............................24
6.4 DISPOSAL OF ASSETS..............................................24
6.5 CHANGE NAME, ETC................................................24
6.6 NATURE OF BUSINESS..............................................25
6.7 PREPAYMENTS AND AMENDMENTS......................................25
6.8 CHANGE OF CONTROL...............................................25
6.9 CONSIGNMENTS....................................................25
6.10 DISTRIBUTIONS...................................................25
6.11 ACCOUNTING METHODS..............................................25
6.12 INVESTMENTS.....................................................26
6.13 INVENTORY AND EQUIPMENT WITH BAILEES............................26
6.14 FINANCIAL COVENANTS.............................................26
6.15 PARENT AS HOLDING COMPANY.......................................26
6.16 EMPLOYEE BENEFITS...............................................26
6.17 LIMITATIONS ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES..........................................26
6.18 LEASE OBLIGATIONS...............................................27
6.19 FEDERAL RESERVE REGULATIONS.....................................27
6.20 INVESTMENT COMPANY ACT OF 1940..................................27
7. EVENTS OF DEFAULT.....................................................27
8. THE LENDER'S RIGHTS AND REMEDIES......................................30
9. TAXES AND EXPENSES....................................................30
10. WAIVERS; INDEMNIFICATION..............................................31
10.1 DEMAND; PROTEST; ETC............................................31
10.2 LENDER'S LIABILITY FOR COLLATERAL...............................31
10.3 INDEMNIFICATION.................................................31
11. NOTICES...............................................................32
12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER............................33
13. [INTENTIONALLY OMITTED]...............................................33
14. AMENDMENTS; WAIVERS...................................................33
14.2 NO WAIVERS; CUMULATIVE REMEDIES.................................34
15. [INTENTIONALLY OMITTED]...............................................34
16. WITHHOLDING TAXES.....................................................34
17. GENERAL PROVISIONS....................................................35
17.1 EFFECTIVENESS...................................................35
17.2 SECTION HEADINGS................................................35
17.3 INTERPRETATION..................................................35
17.4 SEVERABILITY OF PROVISIONS......................................35
17.5 DEBTOR-CREDITOR RELATIONSHIP....................................35
17.6 COUNTERPARTS; ELECTRONIC EXECUTION..............................35
17.7 REVIVAL AND REINSTATEMENT OF OBLIGATIONS........................35
17.8 CONFIDENTIALITY.................................................36
17.9 LENDER EXPENSES.................................................36
17.10 USA PATRIOT ACT.................................................36
17.11 INTEGRATION; RESTATEMENT OF ORIGINAL LSA........................36
17.12 PARENT AS AGENT FOR BORROWERS...................................36
17.13 INTERCREDITOR AGREEMENT.........................................37
17.14 JUDGMENT CURRENCY...............................................37
17.15 IMMUNITY........................................................38
EXHIBITS AND SCHEDULES
Exhibit A-1 Form of Assignment and Acceptance
Exhibit C-1 Form of Compliance Certificate
Schedule A-1 Lender's Account
Schedule A-2 Authorized Persons
Schedule C-1 [omitted]
Schedule D-1 Designated Account
Schedule P-1 Permitted Holders
Schedule P-2 Permitted Liens
Schedule P-3 Survey Exceptions
Schedule R-1 Real Property Collateral
Schedule 1.1 Definitions
Schedule 3.1 Conditions Precedent
Schedule 4.5 Locations of Collateral
Schedule 4.7(a) States of Organization
Schedule 4.7(b) Chief Executive Offices
Schedule 4.7(c) Organizational Identification Numbers
Schedule 4.7(d) Commercial Tort Claims
Schedule 4.8(b) Capitalization of Borrowers
Schedule 4.8(c) Capitalization of Borrowers' Subsidiaries
Schedule 4.10 Litigation
Schedule 4.13 Labor and Employee Matters
Schedule 4.14 Environmental Matters
Schedule 4.15 Intellectual Property
Schedule 4.16 Properties
Schedule 4.17 Deposit Accounts and Securities Accounts
Schedule 4.19 Permitted Indebtedness
Schedule 4.20 Material Contracts
Schedule 4.24 Insurance
Schedule 5.2 Collateral Reporting
Schedule 5.3 Financial Statements, Reports, Certificates
Schedule 6.6 Description of Business
Schedule 6.17 Holding Company Operations
EXECUTION COPY
THIS AMENDED AND RESTATED CREDIT AGREEMENT (this "AGREEMENT"), is
entered into as of July __, 2007, by and among STEEL PARTNERS II, L.P. (the
Lender"), BAIRNCO CORPORATION, a Delaware corporation ("PARENT"), and each of
Parent's Subsidiaries identified on the signature pages hereof as a Borrower
(such Subsidiaries are referred to hereinafter each individually as a
"BORROWER", and individually and collectively, jointly and severally, as the
"BORROWERS").
RECITALS:
WHEREAS, Parent and BZ Acquisition Corp. ("BZ Acquisition")(Parent
and BZ Acquisition being sometimes collectively referred to as the "Original
Borrowers") and Lender entered into a Loan and Security Agreement, dated as of
April 17, 2007 (the "Original LSA"), pursuant to which Lender agreed to lend the
sum of up to $90,000,000 to BZ Acquisition for the purposes of the acquisition
of no less than 50% of the outstanding common stock of Parent (the
"Acquisition") through the shareholders of Parent tendering their Equity
Interests in Parent to BZ Acquisition and the subsequent merger of BZ
Acquisition with and into Parent with Parent being the surviving corporation
(the "Merger"), and to pay expenses incurred in connection with the Acquisition
and the Merger, and the joinder of Parent as a Borrower under the Original LSA
subsequent to the Merger, on the terms and subject to the provisions contained
in the Original LSA; and
WHEREAS, the Original LSA provides that it may be amended by written
consent of the Original Borrowers and Lender; and
WHEREAS, the Original Borrowers and the other subsidiaries of Parent that
are named as Borrowers on the signature pages of this Agreement (collectively,
the "Borrowers") are entering into a Credit Agreement dated of even date
herewith (the "Working Capital Credit Agreement") with Xxxxx Fargo Foothill,
Inc., a California corporation, as agent for itself and certain other lenders
(the "Working Capital Agent"), and a Credit Agreement (the "Term A Credit
Agreement") with ABLECO FINANCE LLC, a Delaware limited liability company, as
administrative agent for the Lenders (in such capacity, together with its
successors and assigns in such capacity, the "Term Loan AGENT") (the Working
Capital Credit Agreement and the Term A Credit Agreement, collectively sometimes
referred to herein as the "Senior Financing Agreements"); and
WHEREAS, in connection with the Senior Financing Agreements, the Original
Borrowers and Lender wish to amend and restate the Original LSA in its entirety
so that this Agreement states the entire agreement of the parties hereto with
respect to the transactions that are the subject of the Original LSA and the
matters set forth herein.
NOW, THEREFORE, the parties hereto agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. Capitalized terms used in this Agreement shall have the
meanings specified therefor on SCHEDULE 1.1.
1.2 ACCOUNTING TERMS. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP. When used herein, the term
"financial statements" shall include the notes and schedules thereto. Whenever
the term "Borrowers" or the term "Parent" is used in respect of a financial
covenant or a related definition, it shall be understood to mean Parent and its
Subsidiaries on a consolidated basis, unless the context clearly requires
otherwise.
1.3 CODE. Any terms used in this Agreement that are defined in the Code
shall be construed and defined as set forth in the Code unless otherwise defined
herein; PROVIDED, HOWEVER, that to the extent that the Code is used to define
any term herein and such term is defined differently in different Articles of
the Code, the definition of such term contained in Article 9 of the Code shall
govern.
1.4 CONSTRUCTION. Unless the context of this Agreement or any other Loan
Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the terms "includes"
and "including" are not limiting, and the term "or" has, except where otherwise
indicated, the inclusive meaning represented by the phrase "and/or." The words
"hereof," "herein," "hereby," "hereunder," and similar terms in this Agreement
or any other Loan Document refer to this Agreement or such other Loan Document,
as the case may be, as a whole and not to any particular provision of this
Agreement or such other Loan Document, as the case may be. Section, subsection,
clause, schedule, and exhibit references herein are to this Agreement unless
otherwise specified. Any reference in this Agreement or in any other Loan
Document to any agreement, instrument, or document shall include all
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements, thereto and thereof, as
applicable (subject to any restrictions on such alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements set forth herein). References to statutes or
regulations are to be construed as including all statutory and regulatory
provisions consolidating, amending, supplementing, interpreting, or replacing
the statute or regulation referred to, and, to the extent the context so
requires, any equivalent, similar or comparable statute or regulation in any
applicable jurisdiction. Any reference herein or in any other Loan Document to
the satisfaction or repayment in full of the Obligations shall mean the
repayment in full in cash of all Obligations other than unasserted contingent
indemnification Obligations. Any reference herein to any Person shall be
construed to include such Person's successors and assigns. Any requirement of a
writing contained herein or in any other Loan Document shall be satisfied by the
transmission of a Record and any Record transmitted shall be treated and have
the same effect as if such Record was furnished in writing. An Event of Default,
if one occurs, shall "exist", "continue" or "be continuing" until such Event of
Default has been waived in writing in accordance with SECTION 14.1.
1.5 PROVINCE OF QUEBEC. With respect to real or tangible personal
property located in the Province of Quebec, (a) the terms "real property",
"personal property" and "real and personal property" and words of similar import
shall be deemed to also refer to "immovable property", "movable property" and
"immovable and movable property". The terms "tangible" and "intangible" and
words of similar import shall be deemed to also refer to "corporeal" and
"incorporeal".
1.6 SCHEDULES AND EXHIBITS. All of the schedules and exhibits attached
to this Agreement shall be deemed incorporated herein by reference.
2. LOAN AND TERMS OF PAYMENT.
2.1 TERM LOAN.
(a) The Lender has previously made a term loan to Original
Borrowers under the Original LSA pursuant to which the Original Borrowers are
currently indebted to Lender for principal and accrued interest aggregating
$88,474,095.94 (the "Term Loan"). Concurrent with the execution and delivery of
this Agreement, Parent is repaying an aggregate of $56,659,776.38 in principal
and accrued interest on the Term Loan from the proceeds of the Senior Financing
Agreements, leaving a principal balance of $31,814,319.56.
(b) as of the consummation of the Closing Date Transactions (the
"Term Loan Amount"). The outstanding unpaid principal balance and all accrued
and unpaid interest on the Term Loan shall be due and payable on the earliest of
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(i) the Maturity Date, (ii) the date of the acceleration of the Term Loan in
accordance with the terms hereof, and (iii) the date of termination of this
Agreement pursuant to SECTION 8.1(B). All principal of, interest on, and other
amounts payable in respect of the Term Loan shall constitute Obligations.
(c) Any principal amount of the Term Loan that has been repaid or
prepaid, including the amounts repaid on the Closing Date, may not be
reborrowed.
2.2 PROTECTIVE ADVANCES AND NOTATION.
(a) PROTECTIVE ADVANCES.
(i) Lender hereby is authorized by Borrowers, from time to
time in Lender's sole discretion, (A) after the occurrence and during the
continuance of a Default or an Event of Default, or (B) at any time that Lender,
in its Permitted Discretion deems necessary or desirable, to make extensions of
credit to (or on behalf of) Borrowers (1) to preserve or protect the Collateral,
or any portion thereof, (2) to enhance the likelihood of repayment of the
Obligations, or (3) to pay any other amount chargeable to Borrowers pursuant to
the terms of this Agreement, including Lender Expenses and the costs, fees, and
expenses described in SECTION 9 (any of the advances described in this SECTION
2.2(C)(I) shall be referred to as "PROTECTIVE ADVANCES").
(ii) The Protective Advances shall be repayable on demand,
secured by the Liens, constitute Obligations hereunder, and bear interest at the
Cash Interest Rate. The provisions of this SECTION 2.2(A) are for the exclusive
benefit of the Lender and are not intended to benefit any Loan Party in any way.
(b) NOTATION. Lender shall record on its books the principal
amount of the Protective Advances owing to Lender, from time to time and such
records shall, absent manifest error, conclusively be presumed to be correct and
accurate.
2.3 PAYMENTS.
(a) PAYMENTS BY BORROWERS. Except as otherwise expressly provided
herein, all payments by (or on behalf of) Borrowers shall be made to Lender's
Account and shall be made in immediately available funds, no later than 4:00
p.m. (New York time) on the date specified herein. Any payment received by
Lender later than 4:00 p.m. (New York time), shall be deemed to have been
received on the following Business Day and any applicable interest or fee shall
continue to accrue until such following Business Day.
(b) APPORTIONMENT AND APPLICATION.
(i) All payments to be made hereunder by Borrowers shall be
remitted to Lender and all (and subject to Section 2.3(b)(iv) hereof) such
payments, and all proceeds of Collateral received by Lender, shall be applied,
so long as no Event of Default has occurred and is continuing, (subject to the
terms of the Intercreditor Agreement) to reduce the balance of the Term Loan
outstanding and, thereafter, to Borrowers (to be wired to the Designated
Account) or such other Person entitled thereto under applicable law.
(ii) At any time that an Event of Default has occurred and is
continuing (and subject to the terms of the Intercreditor Agreement) all
payments remitted to Lender and all proceeds of Collateral received by Lender
shall be applied as follows:
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(A) FIRST, to pay any Lender Expenses (including
cost or expense reimbursements) or indemnities then due to Lender under the
Loan Documents, until paid in full,
(B) SECOND, to pay any fees or premiums then due to
Lender under the Loan Documents until paid in full,
(C) THIRD, to pay interest due in respect of all
Protective Advances until paid in full,
(D) FOURTH, to pay the principal of all Protective
Advances until paid in full,
(E) FIFTH, to pay interest due in respect of the
Term Loan until paid in full,
(F) SIXTH, to pay the outstanding principal balance
of the Term Loan until the Term Loan is paid in full,
(G) SEVENTH, to pay any other Obligations, and
(H) EIGHTH, to Borrowers (to be wired to the
Designated Account) or such other Person entitled thereto under applicable law.
(iii) In each instance, so long as no Event of Default has
occurred and is continuing, SECTION 2.3(B)(I) shall not apply to any payment
made by Borrowers to Lender and specified by Borrowers to be for the payment of
specific Obligations then due and payable (or prepayable) under any provision of
this Agreement.
(iv) For purposes of SECTION 2.3(B)(II), "paid in full" means
payment of all amounts owing under the Loan Documents according to the terms
thereof, including loan fees, service fees, professional fees, interest (and
specifically including interest accrued after the commencement of any Insolvency
Proceeding), default interest, interest on interest, and expense reimbursements,
whether or not any of the foregoing would be or is allowed or disallowed in
whole or in part in any Insolvency Proceeding.
(v) In the event of a direct conflict between the priority
provisions of this SECTION 2.3 and any other provision contained in any other
Loan Document, it is the intention of the parties hereto that such provisions be
read together and construed, to the fullest extent possible, to be in concert
with each other. In the event of any actual, irreconcilable conflict that cannot
be resolved as aforesaid, the terms and provisions of this SECTION 2.3 shall
control and govern; except in the case of a conflict with the terms and
conditions of the Intercreditor Agreement, in which case the applicable
provisions of the Intercreditor Agreement shall govern.
(c) OPTIONAL PREPAYMENTS. Borrowers may voluntarily prepay the
Term Loan in full or in part at any time and from time to time upon at least
three (3) Business Days prior written notice to Lender so long as any such
payment is (i) in an amount equal to or greater than $100,000 and an integral
multiple of $100,000, and (ii) not prohibited under the Senior Financing
Agreements or the Intercreditor Agreement. Any prepayments of the Term Loan made
pursuant to this SECTION 2.3(C) shall be accompanied by payment in full of (i) a
prepayment fee in an amount equal to (x) during the period from the Closing Date
to the first anniversary of the Closing Date, three percent (3%) of the amount
of such prepayment, (y) during the period from the first anniversary of the
Closing Date to the second anniversary of the Closing Date, two percent (2%) of
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the amount of such prepayment and (z) during the period from the second
anniversary of the Closing Date to the third anniversary of the Closing Date,
one percent (1%) of the amount of such prepayment, plus (ii) all accrued
interest and applicable fees on the principal amount being prepaid to the date
of prepayment; PROVIDED, HOWEVER, if an Event of Default then exists, such
prepayment shall be applied to the Obligations pursuant to SECTION 2.3(B)(II).
From and after the third anniversary of the Closing Date, there shall be no
prepayment fee.
(d) MANDATORY PREPAYMENTS.
(i) Immediately upon the receipt by Parent or any of its
Subsidiaries of the proceeds of any Permitted Kasco Sale Transaction, Borrowers
shall prepay the outstanding principal amount of the Obligations, the Working
Capital Indebtedness and the Term A Indebtedness, as the case may be, in
accordance with the Intercreditor Agreement and SECTION 2.3(E)(I) in an
aggregate amount equal to 100% of the Net Cash Proceeds received by Parent or
its Subsidiaries in connection with such sale. Nothing contained in this SECTION
2.3(D)(I) shall permit Parent or any of its Subsidiaries to sell or otherwise
dispose of any property or assets other than in accordance the requirements of
the definition of Permitted Kasco Sale Transaction or as otherwise permitted
hereunder.
(ii) Immediately upon the receipt by Parent or any of its
Subsidiaries of the proceeds of any voluntary or involuntary sale or disposition
by Parent or any of its Subsidiaries of property or assets (including casualty
losses or condemnations but excluding sales or dispositions which qualify as
Permitted Dispositions under clauses (a), (b), (c), or (d) of the definition of
Permitted Dispositions or any Permitted Kasco Sale Transaction), Borrowers shall
prepay the outstanding principal amount of the Obligations, the Working Capital
Indebtedness and the Term A Indebtedness in accordance with the Intercreditor
Agreement and SECTION 2.3(E)(II) in an amount equal to 100% of the Net Cash
Proceeds (including condemnation awards and payments in lieu thereof) received
by Parent or its Subsidiaries in connection with such sales or dispositions;
PROVIDED that, so long as (A) no Default or Event of Default shall have occurred
and is continuing, (B) Administrative Borrower shall have given Agent prior
written notice of Borrowers' intention to apply such monies to the costs of
replacement of the properties or assets that are the subject of such sale or
disposition, casualty loss or condemnation, or the cost of purchase or
construction of other assets useful in the business of Borrowers or their
Subsidiaries, (C) the monies are held in a cash collateral account in which
Lender (or, so long as the Working Capital Credit Agreement or the Term A Loan
Agreement is in effect, Working Capital Agent or Term A Agent, as applicable,
acting as agent for the Lender) has a perfected first-priority security
interest, and (D) Borrowers or their Subsidiaries, as applicable, complete such
replacement, purchase, or construction within 180 days after the initial receipt
of such monies, Borrowers and their Subsidiaries shall have the option to apply
such monies to the costs of replacement of the property or assets that are the
subject of such sale or disposition or the costs of purchase or construction of
other assets useful in the business of Borrowers and their Subsidiaries unless
and to the extent that such applicable period shall have expired without such
replacement, purchase or construction being made or completed, in which case,
any amounts remaining in the cash collateral account shall be paid to Lender and
applied in accordance with SECTION 2.3(E)(II). Nothing contained in this SECTION
2.3(D)(II) shall permit Parent or any of its Subsidiaries to sell or otherwise
dispose of any property or assets other than in accordance with SECTION 6.4.
(iii) Immediately upon the receipt by Parent or any of its
Subsidiaries of any Extraordinary Receipts, Borrowers shall prepay the
outstanding principal amount of the Obligations, the Working Capital
Indebtedness and the Term A Indebtedness in accordance with SECTION 2.3(e)(ii)
in an amount equal to 100% of such Extraordinary Receipts, net of any reasonable
expenses incurred in collecting such Extraordinary Receipts.
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(iv) Immediately upon the issuance or incurrence by Parent or
any of its Subsidiaries of any Indebtedness (other than Indebtedness permitted
under SECTION 6.1(A), (B), (C), (D), or (E)) or the issuance by Parent or any of
its Subsidiaries of any shares of Parent's or its Subsidiaries' Stock (other
than (A) the issuance of Stock under an employee stock option or incentive plan
of any Loan Party to the extent permitted hereunder or (B) in the event that
Parent or any Subsidiary of Parent forms a Subsidiary in accordance with the
terms hereof, the issuance by such Subsidiary of Stock to Parent or such
Subsidiary, as applicable), Borrowers shall prepay the outstanding principal
amount of the Obligations, the Working Capital Indebtedness and the Term A
Indebtedness in accordance with SECTION 2.3(E)(II) in an amount equal to 100% of
the Net Cash Proceeds received by Parent or its Subsidiaries in connection with
such issuance or incurrence. The provisions of this SECTION 2.3(D)(IV) shall not
be deemed to be implied consent to any such issuance or incurrence otherwise
prohibited by the terms and conditions of this Agreement.
2.4 INTEREST RATES AND FEES: RATES, PAYMENTS, AND CALCULATIONS.
(a) INTEREST RATE. Except as provided in SECTION 2.4(B), all
Obligations whether or not charged to the Loan Account pursuant to the terms
hereof shall bear interest on the Daily Balance thereof at a per annum rate
equal to the Base Rate of Interest, plus the Base Rate Margin.
(b) DEFAULT RATE. Upon the occurrence and during the continuation
of an Event of Default (and at the election of Lender), all Obligations whether
or not charged to the Loan Account pursuant to the terms hereof shall bear
interest on the Daily Balance thereof at a per annum rate equal to 2.0
percentage points above the per annum rate otherwise applicable hereunder.
(c) PAYMENT.
(i) Except as otherwise permitted by the Intercreditor
Agreement, and pursuant to clause (ii) immediately below, interest and all fees
payable hereunder shall be due and payable, in arrears, on the date that is 15
days from the end of each fiscal quarter of Parent at any time that Obligations
are outstanding. Without limiting the obligations of the Borrowers to make
payments in accordance with the terms hereof, Borrowers hereby authorize Lender,
from time to time, without prior notice to Borrower or any other Person, to
charge all interest and fees (when due and payable), all Lender Expenses (as and
when due and payable), all fees and costs provided for in SECTION 2.9 (as and
when due and payable), and all other payments as and when due and payable under
any Loan Document to Borrowers' Loan Account. All such amounts, whether or not
charged to the Loan Account, shall constitute Obligations hereunder and shall
accrue interest at the rate then applicable. Any interest not paid when due
shall be compounded by being charged to the Loan Account and shall thereafter
constitute Obligations hereunder and shall accrue interest at the then
applicable Base Rate of Interest, plus the Base Rate Margin.
(ii) From and after the date that is twelve (12) months
following the Closing Date, interest shall be due and payable, in arrears, on
the date that is 15 days from the end of each fiscal quarter of Parent with the
first such interest payment being due and payable for the fiscal quarter of the
Parent ended on September 30, 2008; PROVIDED that (x) Leverage (as defined in
the Term A Credit Agreement) is less than 3.0 : 1 after giving effect to any
such payments; and (y) Excess Availability (as defined in the Working Capital
Credit Agreement) is greater than $20,000,000 after giving effect to any such
payment. To the extent that cash interest payments are not permitted by this
SECTION 2.4(C)(II), interest shall continue to accrue and shall be paid in
accordance with Section 2.4(c)(i), above. If payment of a portion, but not the
entire amount, of the interest then due and owing would satisfy the conditions
set forth in clauses (x) and (y), immediately above, then Borrowers shall make a
cash interest payment in the largest amount that would be in compliance with
such conditions and the balance of the payment then due and owing shall accrue
but remain unpaid.
6
(d) COMPUTATION. All interest and fees chargeable under the Loan
Documents shall be computed on the basis of a 360 day year for the actual number
of days elapsed.
(e) INTENT TO LIMIT CHARGES TO MAXIMUM LAWFUL RATE. In no event
shall the interest rate or rates payable under this Agreement, plus any other
amounts paid in connection herewith, exceed the highest rate permissible under
any law that a court of competent jurisdiction shall, in a final determination,
deem applicable. Borrowers and the Lender, in executing and delivering this
Agreement, intend legally to agree upon the rate or rates of interest and manner
of payment stated within it; PROVIDED, HOWEVER, that, anything contained herein
to the contrary notwithstanding, if said rate or rates of interest or manner of
payment exceeds the maximum allowable under applicable law, then, IPSO FACTO, as
of the date of this Agreement, Borrowers are and shall be liable only for the
payment of such maximum as allowed by law, and payment received from Borrowers
in excess of such legal maximum, whenever received, shall be applied to reduce
the principal balance of the Obligations to the extent of such excess.
2.5 [INTENTIONALLY OMITTED]
2.6 CREDITING PAYMENTS. The receipt of any payment item by Lender shall
not be considered a payment on account unless such payment item is a wire
transfer of immediately available federal funds made to the Lender's Account or
unless and until such payment item is honored when presented for payment. Should
any payment item not be honored when presented for payment, then Borrowers shall
be deemed not to have made such payment and interest shall be calculated
accordingly. Anything to the contrary contained herein notwithstanding, any
payment item shall be deemed received by Lender only if it is received into the
Lender's Account on a Business Day on or before 2:00 p.m. (New York time). If
any payment item is received into the Agent's Account on a non-Business Day or
after 2:00 p.m. (New York time) on a Business Day, it shall be deemed to have
been received by Agent as of the opening of business on the immediately
following Business Day.
2.7 DESIGNATED ACCOUNT. Lender is authorized to take any permitted
action under this Agreement based upon instructions received from anyone
purporting to be an Authorized Person. Administrative Borrower agrees to
establish and maintain the Designated Account with the Designated Account Bank.
2.8 MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF OBLIGATIONS. Lender shall
maintain an account on its books in the name of Borrowers (the "LOAN ACCOUNT")
on which Borrowers will be charged with the Term Loan, all Protective Advances
made by Lender to Borrowers or for Borrowers' account, and with all other
payment Obligations hereunder or under the other Loan Documents, including,
accrued interest, fees and expenses, and Lender Expenses. In accordance with
SECTION 2.6, the Loan Account will be credited with all payments received by
Lender from Borrowers or for Borrowers' account. Lender shall render statements
regarding the Loan Account to Administrative Borrower, including principal,
interest, fees, and including an itemization of all charges and expenses
constituting Lender Expenses owing, and such statements, absent manifest error,
shall be conclusively presumed to be correct and accurate and constitute an
account stated between Borrowers and the Lender unless, within 30 days after
receipt thereof by Administrative Borrower, Administrative Borrower shall
deliver to Lender written objection thereto describing the error or errors
contained in any such statements.
2.9 CAPITAL REQUIREMENTS. If, after the date hereof, Lender determines
that (i) the adoption of or change in any law, rule, regulation or guideline
applicable to Lender, or any change in the interpretation or application thereof
by any Governmental Authority charged with the administration thereof, or (ii)
7
compliance by Lender with any guideline, request or directive of any such entity
regarding capital adequacy (whether or not having the force of law), has the
effect of reducing the return on Lender's capital as a consequence of Lender's
Commitments hereunder to a level below that which Lender could have achieved but
for such adoption, change, or compliance (taking into consideration Lender's
then existing policies with respect to capital adequacy and assuming the full
utilization of Lender's capital) by any amount deemed by Lender to be material,
then Lender may notify Administrative Borrower thereof. Following receipt of
such notice, Borrowers agree to pay to Lender on demand the amount of such
reduction of return of capital as and when such reduction is determined, payable
within 90 days after presentation by Lender of a statement in the amount and
setting forth in reasonable detail Lender's calculation thereof and the
assumptions upon which such calculation was based (which statement shall be
deemed true and correct absent manifest error). In determining such amount,
Lender may use any reasonable averaging and attribution methods.
2.10 JOINT AND SEVERAL LIABILITY OF BORROWERS.
(a) Each Borrower is accepting joint and several liability
hereunder and under the other Loan Documents in consideration of the financial
accommodations to be provided by the Lender under this Agreement, for the mutual
benefit, directly and indirectly, of each Borrower and in consideration of the
undertakings of the other Borrowers to accept joint and several liability for
the Obligations. Each Borrower hereby further irrevocably and unconditionally
guaranties as and for its own debt, until final payment in full thereof has been
made, (a) the payment of the Obligations, when and as the same shall become due
and payable, whether at maturity, pursuant to a mandatory prepayment
requirement, by acceleration, or otherwise; it being the intent of each Borrower
that the guaranty set forth herein shall be a guaranty of payment and not a
guaranty of collection; and (b) the punctual and faithful performance, keeping,
observance, and fulfillment by each Borrower of all of the agreements,
conditions, covenants, and obligations of such Borrower contained in this
Agreement and under each of the other Loan Documents.
(b) Each Borrower, 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 (including any Obligations arising under
this SECTION 2.10), it being the intention of the parties hereto that all the
Obligations shall be the joint and several obligations of each Borrower without
preferences or distinction among them.
(c) If and to the extent that any Borrower 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 2.10 constitute the absolute and unconditional, full recourse
Obligations of each Borrower enforceable against each Borrower to the full
extent of its properties and assets, irrespective of the validity, regularity or
enforceability of this Agreement or any other circumstances whatsoever.
(e) Except as otherwise expressly provided in this Agreement, each
Borrower hereby waives notice of acceptance of its joint and several liability,
notice of the Term Loan, any Protective Advance or any other advance or
extension of credit made under or pursuant to this Agreement, notice of the
occurrence of any Default, Event of Default, or of any demand for any payment
under this Agreement, notice of any action at any time taken or omitted by
Lender under or in respect of any of the Obligations, any requirement of
diligence or to mitigate damages and, generally, to the extent permitted by
applicable law, all demands, notices and other formalities of every kind in
connection with this Agreement (except as otherwise provided in this Agreement).
8
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 payment of any of the Obligations, the acceptance of any
partial payment thereon, any waiver, consent or other action or acquiescence by
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 Agreement, any and all other indulgences whatsoever by 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 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
Lender with respect to the failure by any Borrower to comply with any of its
respective Obligations, including, without limitation, any failure strictly or
diligently to assert any right or to pursue any remedy or to comply fully with
applicable laws or regulations thereunder, which might, but for the provisions
of this SECTION 2.10 afford grounds for terminating, discharging or relieving
any Borrower, in whole or in part, from any of its Obligations under this
SECTION 2.10, it being the intention of each Borrower that, so long as any of
the Obligations hereunder remain unsatisfied, the Obligations of each Borrower
under this SECTION 2.10 shall not be discharged except by performance and then
only to the extent of such performance. The Obligations of each Borrower under
this SECTION 2.10 shall not be diminished or rendered unenforceable by any
unenforceability of this Agreement or any other Loan Document against one or
more of the other Borrowers or any winding up, reorganization, arrangement,
liquidation, reconstruction or similar proceeding with respect to any Borrower
or Lender.
(f) Each Borrower represents and warrants to Lender that such
Borrower is currently informed of the financial condition of all Borrowers and
of all other circumstances which a diligent inquiry would reveal and which bear
upon the risk of nonpayment of the Obligations. Each Borrower further represents
and warrants to Lender that such Borrower has read and understands the terms and
conditions of the Loan Documents. Each Borrower hereby covenants that such
Borrower will continue to keep informed of Borrowers' financial condition, the
financial condition of other guarantors, if any, and of all other circumstances
which bear upon the risk of nonpayment or nonperformance of the Obligations.
(g) Each Borrower waives all rights and defenses arising out of an
election of remedies by Lender, even though that election of remedies, such as a
nonjudicial foreclosure with respect to security for a guaranteed obligation,
has destroyed Lender's rights of subrogation and reimbursement against such
Borrower by the operation of Section 580(d) of the California Code of Civil
Procedure or otherwise.
(h) Each Borrower waives all rights and defenses that such
Borrower may have because the Obligations are secured by Real Property. This
means, among other things:
(i) Lender may collect from such Borrower without first
foreclosing on any Real or Personal Property Collateral pledged by Borrowers.
(ii) If Lender forecloses on any Real Property Collateral
pledged by Borrowers:
(A) The amount of the Obligations may be reduced
only by the price for which that collateral is sold at the foreclosure sale,
even if the collateral is worth more than the sale price.
(B) Lender may collect from such Borrower even if
Lender, by foreclosing on the Real Property Collateral, has destroyed any right
such Borrower may have to collect from the other Borrowers.
9
This is an unconditional and irrevocable waiver of any rights and defenses such
Borrower may have because the Obligations are secured by Real Property. These
rights and defenses include, but are not limited to, any rights or defenses
based upon Section 580a, 580b, 580d or 726 of the California Code of Civil
Procedure.
(i) The provisions of this SECTION 2.10 are made for the benefit of
Lender and its successors and assigns, and may be enforced by it or them from
time to time against any or all Borrowers as often as occasion therefor may
arise and without requirement on the part of Lender, successor or assign first
to marshal any of its or their claims or to exercise any of its or their rights
against any Borrower or to exhaust any remedies available to it or them against
any Borrower or to resort to any other source or means of obtaining payment of
any of the Obligations hereunder or to elect any other remedy. The provisions of
this SECTION 2.10 shall remain in effect until all of 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 Lender upon the insolvency, bankruptcy
or reorganization of any Borrower, or otherwise, the provisions of this SECTION
2.10 will forthwith be reinstated in effect, as though such payment had not been
made.
(j) Until the Obligations have been paid in full, each Borrower
hereby agrees that it will not enforce any of its rights of contribution or
subrogation against any other Borrower with respect to any liability incurred by
it hereunder or under any of the other Loan Documents, any payments made by it
to Lender with respect to any of the Obligations or any collateral security
therefor. Any claim which any Borrower may have against any other Borrower with
respect to any payments to Lender hereunder or under any other Loan Documents
are hereby expressly made subordinate and junior in right of payment to the
prior payment in full in cash of the Obligations and, in the event of any
insolvency, bankruptcy, receivership, liquidation, reorganization or other
similar proceeding under the laws of any jurisdiction relating to any Borrower,
its debts or its assets, whether voluntary or involuntary, all such Obligations
shall be paid in full in cash before any payment or distribution of any
character, whether in cash, securities or other property, shall be made to any
other Borrower therefor.
(k) Each Borrower hereby agrees that, after the occurrence and
during the continuance of any Default or Event of Default, the payment of any
amounts due with respect to the indebtedness owing by any Borrower to any other
Borrower is hereby subordinated to the prior payment in full in cash of the
Obligations. Each Borrower hereby agrees that after the occurrence and during
the continuance of any Default or Event of Default, such Borrower will not
demand, xxx for or otherwise attempt to collect any indebtedness of any other
Borrower owing to such Borrower until the Obligations shall have been paid in
full in cash. If, notwithstanding the foregoing sentence, such Borrower shall
collect, enforce or receive any amounts in respect of such indebtedness, such
amounts shall be collected, enforced and received by such Borrower as trustee
for Lender, and such Borrower shall deliver any such amounts to Agent for
application to the Obligations in accordance with SECTION 2.3(B).
2.11 SECURITIZATION. Parent and each Borrower (on behalf of themselves
and their respective Subsidiaries) hereby acknowledge that Lender and its
Affiliates and Related Funds may sell or securitize its portion of the Term Loan
(a "SECURITIZATION") through the pledge of its portion of the Term Loan as
collateral security for loans to such Lender or its Affiliates or Related Funds
or through the sale of its portion of the Term Loan or the issuance of direct or
indirect interests in its portion of the Term Loan, which loans to Lender or its
Affiliates or Related Funds or direct or indirect interests will be rated by
Xxxxx'x, S&P or one or more other rating agencies (the "RATING AGENCIES").
Parent and each Borrower (on behalf of themselves and their Subsidiaries) agree
to cooperate with Lender and its Affiliates and Related Funds to effect the
Securitization, including, without limitation, by (a) executing such additional
documents, as reasonably requested by Lender in connection with the
Securitization, provided that (i) any such additional documentation does not
impose additional costs on Borrowers (other than costs of a de minimis nature),
10
and (ii) any such additional documentation does not adversely affect the rights,
or increase the obligations (other than increases of a de minimis nature), of
Borrowers under the Loan Documents or change or affect in a manner adverse to
Borrowers the financial terms of the Term Loan and (b) providing such
information as may be reasonably requested by Lender in connection with the
rating of the Term Loan or the Securitization.
3. CONDITIONS; TERM OF AGREEMENT.
3.1 CONDITIONS PRECEDENT TO THE TERM LOAN. The obligations of the Lender
hereunder, including the obligation to refinance the Term Loan, are subject to
the fulfillment, to the satisfaction of Lender of (a) each of the conditions
precedent set forth on SCHEDULE 3.1, and (b) each of the following conditions
precedent:
(i) the representations and warranties of the Loan Parties
and their Subsidiaries contained in the Original LSA, this Agreement or in the
other Loan Documents shall be true and correct in all material respects (except
that such materiality qualifier shall not be applicable to any representations
and warranties that already are qualified or modified by materiality in the text
thereof) on and as of the date made and on the date hereof, (except to the
extent that such representations and warranties relate solely to an earlier
date);
(ii) no Default or Event of Default shall have occurred and
be continuing under the Original LSA or hereunder on the date hereof, nor shall
either result from the execution and delivery hereof or the transactions
contemplated hereby;
(iii) no injunction, writ, restraining order, or other order,
or any law, rule or regulation, of any nature restricting or prohibiting,
directly or indirectly, the extension of credit under the Original LSA or this
Agreement shall have been issued and remain in force by any Governmental
Authority against any Loan Party, or Lender; and
(iv) no Material Adverse Change shall have occurred since
December 31, 2006, PROVIDED that the transactions contemplated by this Agreement
and the transactions made in connection with the Permitted Merger shall not
constitute a Material Adverse Change.
3.2 TERM. This Agreement shall continue in full force and effect for a
term ending on January 17, 2013 (the "MATURITY DATE"). The foregoing
notwithstanding, the Lender shall have the right to terminate its obligations
under this Agreement immediately and without notice upon the occurrence and
during the continuation of an Event of Default.
3.3 EFFECT OF TERMINATION. On the date of termination of this Agreement,
all Obligations immediately shall become due and payable without notice or
demand. No termination of this Agreement, however, shall relieve or discharge
Loan Parties or their Subsidiaries of their duties, Obligations, or covenants
hereunder or under any other Loan Document and the Liens in the Collateral shall
remain in effect until all Obligations have been paid in full. When this
Agreement has been terminated and all of the Obligations have been paid in full,
Lender will, at Borrowers' sole expense, execute and deliver any termination
statements, lien releases, mortgage releases, re-assignments of trademarks,
discharges of security interests, and other similar discharge or release
documents (and, if applicable, in recordable form) as are reasonably necessary
to release, as of record, the Liens and all notices of security interests and
liens previously filed by Lender with respect to the Obligations.
3.4 EARLY TERMINATION BY BORROWERS. Borrowers have the option, at any
time following the payment in full of the Working Capital Indebtedness and the
Term A Indebtedness, upon 30 days prior written notice to Lender, to terminate
11
this Agreement, by paying to Lender, in cash, the Obligations, in full. If
Borrowers have sent a notice of termination pursuant to the provisions of this
Section, then Borrowers shall be obligated to repay the Obligations, in full, on
the date set forth as the date of termination of this Agreement in such notice.
4. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lender to enter into this Agreement, Parent
and each Borrower make the following representations and warranties to the
Lender which shall be true, correct, and complete as of the Closing Date (except
to the extent that such representations and warranties relate solely to an
earlier date or any Schedule or Projection referred to herein has been updated
or amended in accordance herewith) and such representations and warranties shall
survive the execution and delivery of this Agreement:
4.1 NO ENCUMBRANCES. Each Loan Party and its Subsidiaries has good and
indefeasible title to, or a valid leasehold interest in, their personal property
assets and good and marketable title to, or a valid leasehold interest in, their
Real Property, in each case, free and clear of Liens except for Permitted Liens.
4.2 ORIGINAL LSA. Each of the representations and warranties of the Loan
Parties contained in the Original LSA remains true, accurate and complete as of
the Closing Date (except to the extent that such representations and warranties
relate solely to an earlier date). Each Loan Party has complied with each and
every covenant applicable to it under the Original LSA and since the execution
and delivery of the Original LSA, there has been no Default or Event of Default
by any Loan Party under the Original LSA.
4.3 [INTENTIONALLY OMITTED.].
4.4 EQUIPMENT. Each material item of Equipment of Loan Parties and their
Subsidiaries is used or held for use in their business and is in good working
order, ordinary wear and tear and damage by casualty excepted.
4.5 LOCATION OF COLLATERAL. The Collateral (other than vehicles or
Equipment out for repair) of Loan Parties and their Subsidiaries is not stored
with a bailee, warehouseman, or similar party (except with respect to Inventory
in the ordinary course of business), and is located only at, or in-transit
between, the locations identified on SCHEDULE 4.5 (as such Schedule may be
updated pursuant to SECTION 5.9).
4.6 INVENTORY RECORDS. Each Loan Party keeps correct and accurate
records in all material respects itemizing and describing the type, quality, and
quantity of its and its Subsidiaries' Inventory and the book value thereof.
4.7 JURISDICTION OF ORGANIZATION; LOCATION OF CHIEF EXECUTIVE OFFICE;
ORGANIZATIONAL IDENTIFICATION NUMBER; COMMERCIAL TORT CLAIMS.
(a) The name of (within the meaning of Section 9-503 of the Code)
and jurisdiction of organization of each Loan Party and each of its Subsidiaries
is set forth on SCHEDULE 4.7(A) (as such Schedule may be updated from time to
time to reflect changes permitted to be made under SECTION 6.5).
(b) The chief executive office of each Loan Party is located at
the address indicated on SCHEDULE 4.7(B) (as such Schedule may be updated from
time to time to reflect changes permitted to be made under SECTION 5.9).
12
(c) Each Loan Party's tax identification numbers and
organizational identification numbers, if any, are identified on SCHEDULE 4.7(C)
(as such Schedule may be updated from time to time to reflect changes permitted
to be made under SECTION 6.5).
(d) As of the Closing Date, the Loan Parties and their
Subsidiaries do not hold any commercial tort claims, except as set forth on
SCHEDULE 4.7(D).
4.8 DUE ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.
(a) Each Loan Party (i) is duly organized and existing and in good
standing (or the non-U.S. equivalent thereof) under the laws of the jurisdiction
of its organization and qualified to do business in each jurisdiction where the
failure to be so qualified reasonably could be expected to result in a Material
Adverse Change, and (ii) has all requisite power and authority to conduct its
business as now conducted and as currently contemplated, to incur the
Obligations hereunder (in the case of the Borrowers), and to execute and deliver
each Loan Document to which it is a party, and to consummate the transactions
contemplated thereby.
(b) Set forth on SCHEDULE 4.8(B) (as such Schedule may be updated
from time to time to reflect changes permitted to be made under SECTION 5.16),
is a complete and accurate description of the authorized capital Stock of each
Loan Party, by class, and, as of the Closing Date, a description of the number
of shares of each such class that are issued and outstanding. Other than as
described on SCHEDULE 4.8(B), there are no subscriptions, options, warrants, or
calls relating to any shares (or other equity interest) of each Loan Party's
capital Stock, including any right of conversion or exchange under any
outstanding security or other instrument. No Loan Party is subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its capital Stock or any security convertible into or
exchangeable for any of its capital Stock.
(c) Set forth on SCHEDULE 4.8(C) (as such Schedule may be updated
from time to time to reflect changes permitted to be made under SECTION 5.16),
is a complete and accurate list of each Loan Party's direct and indirect
Subsidiaries, showing: (i) the jurisdiction of their organization, (ii) the
number of shares of each class of common and preferred Stock authorized for each
of such Subsidiaries, and (iii) the number and the percentage of the outstanding
shares of each such class owned directly or indirectly by the applicable Loan
Party. All of the outstanding capital Stock of each such Subsidiary has been
validly issued and is fully paid and non-assessable.
(d) Except as set forth on SCHEDULE 4.8(C), there are no
subscriptions, options, warrants, or calls relating to any shares of any Loan
Party's Subsidiaries' capital Stock, including any right of conversion or
exchange under any outstanding security or other instrument. No Loan Party or
any of its respective Subsidiaries is subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any shares of any Loan
Party's Subsidiaries' capital Stock or any security convertible into or
exchangeable for any such capital Stock.
4.9 DUE AUTHORIZATION; NO CONFLICT.
(a) As to each Borrower, the execution, delivery, and performance
by such Borrower of this Agreement and the Loan Documents to which it is a party
have been duly authorized by all necessary action on the part of such Borrower.
(b) As to each Borrower, the execution, delivery, and performance
by such Borrower of this Agreement and the other Loan Documents to which it is a
party do not and will not (i) violate any provision of federal, state, or local
law or regulation applicable to such Borrower, the Governing Documents of such
13
Borrower, or any order, judgment, or decree of any court or other Governmental
Authority binding on such Borrower, (ii) conflict with, result in a breach of,
or constitute (with due notice or lapse of time or both) a default under any
Material Contract of such Borrower, (iii) result in or require the creation or
imposition of any Lien of any nature whatsoever upon any properties or assets of
such Borrower, other than Permitted Liens, (iv) do not and will not result in
any default, noncompliance, suspension, revocation, impairment, forfeiture or
nonrenewal of any permit, license, authorization or approval applicable to its
operations or any of its properties, or (v) require any approval of such
Borrower's interestholders or any approval or consent of any Person under any
Material Contract of such Borrower, other than consents or approvals that have
been obtained and that are still in force and effect.
(c) Other than the filing of financing statements, the recordation
of the Mortgages, and other filings or actions necessary to perfect Liens
granted to Lender in the Collateral, the execution, delivery, and performance by
each Borrower of this Agreement and the other Loan Documents to which such
Borrower is a party do not and will not require any registration with, consent,
or approval of, or notice to, or other action with or by, any Governmental
Authority, other than consents or approvals that have been obtained and that are
still in force and effect.
(d) As to each Borrower, this Agreement and the other Loan
Documents to which such Borrower is a party, and all other documents
contemplated hereby and thereby, when executed and delivered by such Borrower
will be the legally valid and binding obligations of such Borrower, enforceable
against such Borrower in accordance with their respective terms, except as
enforcement may be limited by equitable principles or by bankruptcy, insolvency,
reorganization, moratorium, or similar laws relating to or limiting creditors'
rights generally.
(e) The Liens are validly created, perfected (other than (i) in
respect of motor vehicles and (ii) any Deposit Accounts and Securities Accounts
not subject to a Control Agreement as permitted by SECTION 6.12, and subject
only to the filing of financing statements and the recordation of the Mortgages,
and (ii) to the extent such Liens are not validly created or perfected solely as
a result of the gross negligence of Lender), and first priority Liens (subject
only to Permitted Priority Liens).
(f) The execution, delivery, and performance by each Guarantor of
the Loan Documents to which it is a party have been duly authorized by all
necessary action on the part of such Guarantor.
(g) The execution, delivery, and performance by each Guarantor of
the Loan Documents to which it is a party do not and will not (i) violate any
provision of federal, state, or local law or regulation applicable to such
Guarantor, the Governing Documents of such Guarantor, or any order, judgment, or
decree of any court or other Governmental Authority binding on such Guarantor,
(ii) conflict with, result in a breach of, or constitute (with due notice or
lapse of time or both) a default under any Material Contract of such Guarantor,
(iii) result in or require the creation or imposition of any Lien of any nature
whatsoever upon any properties or assets of such Guarantor, other than Permitted
Liens, (iv) do not and will not result in any default, noncompliance,
suspension, revocation, impairment, forfeiture or nonrenewal of any permit,
license, authorization or approval applicable to its operations or any of its
properties, or (v) require any approval of such Guarantor's interestholders or
any approval or consent of any Person under any Material Contract of such
Guarantor, other than consents or approvals that have been obtained and that are
still in force and effect.
(h) Other than the filing of financing statements and the
recordation of the Mortgages, and other filings or actions necessary to perfect
Liens granted to Lender in the Collateral, the execution, delivery, and
performance by each Guarantor of the Loan Documents to which such Guarantor is a
party do not and will not require any registration with, consent, or approval
of, or notice to, or other action with or by, any Governmental Authority, other
than consents or approvals that have been obtained and that are still in force
and effect.
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(i) The Loan Documents to which each Guarantor is a party, and all
other documents contemplated hereby and thereby, when executed and delivered by
such Guarantor will be the legally valid and binding obligations of such
Guarantor, enforceable against such Guarantor in accordance with their
respective terms, except as enforcement may be limited by equitable principles
or by bankruptcy, insolvency, reorganization, moratorium, or similar laws
relating to or limiting creditors' rights generally.
4.10 LITIGATION. Other than those matters disclosed on SCHEDULE 4.10 and
other than matters arising after the Closing Date that reasonably could not be
expected to result in a Material Adverse Change, there are no actions, suits, or
proceedings pending or, to the knowledge of Parent and each Borrower, threatened
against any Loan Party or any of its Subsidiaries. As of the Closing Date, none
of the Loan Parties holds any commercial tort claims in respect of which a claim
has been filed in a court of law or a written notice by an attorney has been
given to a potential defendant
4.11 NO MATERIAL ADVERSE CHANGE. All financial statements relating to
Parent and its Subsidiaries that have been delivered by any Loan Party to the
Lender have been prepared in accordance with GAAP (except, in the case of
unaudited financial statements, for the lack of footnotes and being subject to
year-end audit adjustments) and present fairly in all material respects,
Parent's and its Subsidiaries' financial condition as of the date thereof and
results of operations for the period then ended. There has not been a Material
Adverse Change with respect to Parent and its Subsidiaries since December 31,
2006. Notwithstanding anything to the contrary herein, for purposes of this
Agreement, no Material Adverse Change shall be deemed to have occurred as a
result of the transactions contemplated by this Agreement and the other Loan
Documents or from the transactions and transfers which arose out of and in
connection with the Permitted Merger.
4.12 FRAUDULENT TRANSFER.
(a) Each Loan Party and each Subsidiary of a Loan Party is
Solvent.
(b) No transfer of property is being made by any Loan Party or any
Subsidiary of a Loan Party and no obligation is being incurred by any Loan Party
or any Subsidiary of a Loan Party in connection with the transactions
contemplated by this Agreement or the other Loan Documents with the intent to
hinder, delay, or defraud either present or future creditors of the Loan Parties
or their Subsidiaries.
4.13 EMPLOYEE BENEFITS; LABOR MATTERS. (a) Except as set forth on
Schedule 4.13, (i) each Employee Plan is in substantial compliance with ERISA
and the IRC, (ii) no Termination Event has occurred nor is reasonably expected
to occur with respect to any Employee Plan, (iii) the most recent annual report
(Form 5500 Series) with respect to each Employee Plan, including any required
Schedule B (Actuarial Information) thereto, copies of which have been filed with
the Internal Revenue Service and delivered to Agent, is to the knowledge of
Borrower complete and correct, and since the date of such report there has been
no Material Adverse Change in such funding status, (iv) copies of each agreement
entered into with the PBGC, the U.S. Department of Labor or the Internal Revenue
Service with respect to any Employee Plan have been delivered to Agent, (v) no
Employee Plan had an accumulated or waived funding deficiency or permitted
decrease which would create a deficiency in its funding standard account or has
applied for an extension of any amortization period within the meaning of
Section 412 of the IRC at any time during the previous 60 months, and (vi) no
Lien imposed under the IRC or ERISA exists or is likely to arise on account of
any Employee Plan within the meaning of Section 412 of the IRC. Except as set
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forth on Schedule 4.13, no Loan Party or any of its ERISA Affiliates has
incurred any withdrawal liability under ERISA with respect to any Multiemployer
Plan, or is aware of any facts indicating that it or any of its ERISA Affiliates
may in the future reasonably be expected to incur any such withdrawal liability.
Except as set forth on Schedule 4.13, no Loan Party or any of its ERISA
Affiliates nor any fiduciary of any Employee Plan has (A) engaged in a nonexempt
prohibited transaction described in Sections 406 of ERISA or 4975 of the IRC
that could reasonably be expected to result in a Material Adverse Change, (B)
failed to pay any required installment or other payment required under Section
412 of the IRC on or before the due date for such required installment or
payment if such failure is not cured within 3 Business Days, (C) engaged in a
transaction within the meaning of Section 4069 of ERISA or (D) incurred any
liability to the PBGC which remains outstanding other than the payment of
premiums, and there are no premium payments which have become due which are
unpaid. There are no pending or, to the knowledge of any Loan Party, threatened
claims, actions, proceedings or lawsuits (other than claims for benefits in the
normal course) asserted or instituted against (1) any Employee Plan or its
assets, (2) any fiduciary with respect to any Employee Plan, or (3) any Loan
Party or any of its ERISA Affiliates with respect to any Employee Plan. Except
as required by Section 4980B of the IRC, no Loan Party or any of its ERISA
Affiliates maintains an employee welfare benefit plan (as defined in Section
3(1) of ERISA) which provides health or welfare benefits (through the purchase
of insurance or otherwise) for any retired or former employee of any Loan Party
or any of its ERISA Affiliates or coverage after a participant's termination of
employment.
(b) Except as set forth on SCHEDULE 4.13, there is (a) no unfair
labor practice complaint pending or, to Parent's and each Borrower's knowledge,
threatened against any Loan Party before any Governmental Authority and no
grievance or arbitration proceeding pending or threatened against any Loan Party
which arises out of or under any collective bargaining agreement, (b) no strike,
labor dispute, slowdown, stoppage or similar action or grievance pending or, to
the best knowledge of Parent and each Borrower, threatened against any Loan
Party and (c) no union representation question existing with respect to the
employees of any Loan Party and no union organizing activity taking place with
respect to any of the employees of any of them. No Loan Party, nor any ERISA
Affiliate of any Loan Party has incurred any liability or obligation under the
Worker Adjustment and Retraining Notification Act or similar state law, which
remains unpaid or unsatisfied. The hours worked and payments made to employees
of Loan Parties have not been in violation of the Fair Labor Standards Act or
any other applicable legal requirements. All material payments due from any Loan
Party on account of workers compensation, wages and employee health and welfare
insurance and other benefits have been paid or accrued as a liability on the
books of such Loan Party.
4.14 ENVIRONMENTAL CONDITION. Except as set forth on SCHEDULE 4.14, (a)
to Parent's and each Borrower's knowledge, none of the Loan Parties' or their
Subsidiaries' properties or assets has ever been used by the Loan Parties or
their Subsidiaries, or, to their knowledge, by previous owners or operators in
the disposal of, or to produce, store, handle, treat, release, or transport, any
Hazardous Materials, where such use, production, storage, handling, treatment,
release or transport was in violation, in any material respect, of any
applicable material Environmental Law, (b) to Parent's and each Borrower's
knowledge, none of the Loan Parties' nor their Subsidiaries' properties or
assets has ever been designated or identified in any manner pursuant to any
environmental protection statute as a Hazardous Materials disposal site, (c)
none of the Loan Parties nor any of their Subsidiaries have received written
notice that a Lien arising under any Environmental Law has attached to any
revenues or to any Real Property owned or operated by the Loan Parties or their
Subsidiaries, and (d) none of the Loan Parties nor any of their Subsidiaries
have received a summons, citation, written notice, or directive from the United
States Environmental Protection Agency or any other federal or state
governmental agency concerning any material action or omission by any Loan Party
or any Subsidiary of a Loan Party resulting in the releasing or disposing of
Hazardous Materials into the environment.
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4.15 INTELLECTUAL PROPERTY. Each Loan Party and each Subsidiary of a Loan
Party owns, or holds licenses in, all trademarks, trade names, copyrights,
patents, patent rights, and licenses that are necessary to the conduct of its
business as currently conducted, and attached hereto as SCHEDULE 4.15 (as
updated from time to time) is a true, correct, and complete listing of all
material patents, patent applications, trademarks, trademark applications,
copyrights, and copyright registrations as to which each Loan Party or one of
its Subsidiaries is the owner or is an exclusive licensee; PROVIDED, HOWEVER,
that Administrative Borrower may amend SCHEDULE 4.15 to add additional property
so long as such amendment occurs by written notice to Lender not less than 10
days before the date on which a Loan Party or any Subsidiary of a Loan Party
acquires any such property after the Closing Date.
4.16 LEASES; ETC.. (a) Loan Parties and their Subsidiaries enjoy peaceful
and undisturbed possession in all material respects, under all leases material
to their business and to which they are parties or under which they are
operating and all of such material leases are valid and subsisting and no
material default by Loan Parties or their Subsidiaries exists under any of them.
(b) Schedule 4.16 sets forth a complete and accurate list, as of
the Closing Date, of the location, by street address, of all real property owned
or leased by each Loan Party. No consent or approval of any landlord or other
third party in connection with any such lease is necessary for any Loan Party to
enter into and execute the Loan Documents to which it is a party, except as set
forth on Schedule 4.16. To the best knowledge of any Loan Party, no other party
to any such lease is in default of its obligations thereunder, and no Loan Party
(or any other party to any such lease) has at any time delivered or received any
notice of default which remains uncured under any such lease and, as of the
Closing Date, no event has occurred which, with the giving of notice or the
passage of time or both, would constitute a material default under any such
lease.
4.17 DEPOSIT ACCOUNTS AND SECURITIES ACCOUNTS. Set forth on SCHEDULE 4.17
is a listing of all of the Loan Parties' and their Subsidiaries' Deposit
Accounts and Securities Accounts, including, with respect to each bank or
securities intermediary (a) the name and address of such Person, and (b) the
account numbers of the Deposit Accounts or Securities Accounts maintained with
such Person.
4.18 COMPLETE DISCLOSURE. All factual information (taken as a whole)
furnished by or on behalf of the Loan Parties or their Subsidiaries in writing
to Lender (including all information contained in the Schedules hereto or in the
other Loan Documents) for purposes of or in connection with this Agreement, the
other Loan Documents, or any transaction contemplated herein or therein is, and
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
fact necessary to make such information (taken as a whole) not misleading in any
material respect at such time in light of the circumstances under which such
information was provided.
4.19 INDEBTEDNESS. Set forth on SCHEDULE 4.19 is a true and complete list
of all Indebtedness of each Loan Party and each Subsidiary of a Loan Party
outstanding immediately prior to the Closing Date that is to remain outstanding
after the Closing Date and such Schedule accurately sets forth the aggregate
principal amount of such Indebtedness and the principal terms thereof.
4.20 MATERIAL CONTRACTS. Set forth on SCHEDULE 4.20 is a description of
all Material Contracts of Parent and its Subsidiaries, showing the parties and
principal subject matter thereof and amendments and modifications thereto;
PROVIDED, HOWEVER, that Administrative Borrower may amend SCHEDULE 4.20 to add
additional Material Contracts so long as such amendment occurs by written notice
to Lender not less than 5 days after the date on which Parent or its Subsidiary
enters into such Material Contract after the Closing Date. Except for matters
which, either individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Change, each Material Contract (other than those
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that have expired at the end of their normal terms) (a) is in full force and
effect and is binding upon and enforceable against Parent or its Subsidiary and,
to the best of Parent's and each Borrower's knowledge, each other Person that is
a party thereto in accordance with its terms, (b) has not been otherwise amended
or modified (other than amendments or modifications permitted by SECTION
6.7(C)), and (c) is not in default due to the action or inaction of Parent or
any of its Subsidiaries.
4.21 PERMITS, LICENSES, ETC. Parent and its Subsidiaries are in
compliance in all respects with all governmental permits, licenses,
authorizations, approvals, entitlements and accreditations required and material
for such Person lawfully to own, lease, manage or operate, or to acquire, each
business currently owned, leased, managed or operated, or previously acquired,
by such Person. No condition exists or event has occurred which could reasonably
be expected to result in the suspension, revocation, impairment, forfeiture or
non-renewal of any such permit, license, authorization, approval, entitlement or
accreditation, and there is no outstanding claim by any Governmental Authority
that any such permit, license, authorization, approval, entitlement or
accreditation is not in full force and effect.
4.22 SUPPLIERS. There exists no actual or, to the best knowledge of
Parent and each Borrower, threatened termination, cancellation or limitation of,
or modification to or change in, the business relationship between Parent and
any Subsidiary of Parent, on the one hand, and any material supplier thereof, on
the other hand which could reasonably be expected to result in a Material
Adverse Change; and, to the best knowledge of Parent and each Borrower, there
exists no present state of facts or circumstances that could give rise to or
result in any such termination, cancellation, limitation, modification or
change.
4.23 MARGIN STOCK. None of Loan Parties or any of their respective
Subsidiaries is, nor will any thereof be, engaged in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulations T, U or X of the Board of Governors of the Federal
Reserve System), and no proceeds of the Term Loan will be used to purchase or
carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock.
4.24 INSURANCE. Parent and each of its Subsidiaries keeps its property
adequately insured and maintains (a) insurance to such extent and against such
risks, including fire, as is customary with companies in the same or similar
businesses, (b) workers' compensation insurance in the amount required by
applicable law, (c) public liability insurance in the amount customary with
companies in the same or similar business against claims for personal injury or
death on properties owned, occupied or controlled by it, and (d) such other
insurance as may be required by law or as may be reasonably required by Lender
(including, without limitation, against larceny, embezzlement or other criminal
misappropriation). SCHEDULE 4.24 sets forth a list of all insurance maintained
by Parent and its Subsidiaries on the Closing Date.
4.25 INVESTMENT COMPANY ACT, ETC.. No Loan Party is (a) an "investment
company" or an "affiliated person" or "promoter" of, or "principal underwriter"
of or for, an "investment company", as such terms are defined in the Investment
Company Act of 1940, as amended, or (b) subject to regulation under any xxxxxxx,
xxxxx, xxxxxxxxxx, xxxxxxxxxxx, local or foreign statute or regulation which may
limit its ability to incur Indebtedness or which may otherwise render all or any
portion of the Obligations unenforceable.
4.26 TAXES, ETC. All federal, state, provincial, territorial,
supranational, local and foreign tax returns and other reports required by
applicable law to be filed by any Loan Party have been filed, or extensions have
been obtained, and all taxes, assessments and other governmental charges imposed
upon any Loan Party or any property of any Loan Party and which have become due
and payable on or prior to the date hereof have been paid, except as otherwise
permitted under SECTION 5.7.
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4.27 NATURE OF BUSINESS. No Loan Party is engaged in any business other
than (a) designing, manufacturing, and selling engineered materials and
components for the electronic, industrial and commercial markets, (b) providing,
manufacturing and distributing meat-room products and maintenance services for
the meat and deli departments of supermarkets; mass merchants; restaurants;
meat, poultry and fish processing plants; and (c) manufacturing and distributing
electrical saws and cutting food processing equipment
4.28 RELATED TRANSACTION DOCUMENTS. The Parent has delivered to Lender a
complete and correct copy of each Related Transaction Document, including all
schedules and exhibits thereto. The Related Transaction Documents set forth the
entire agreement and understanding of the parties thereto relating to the
subject matter thereof, and there are no other agreements, arrangements or
understandings, written or oral, relating to the matters covered thereby. The
execution, delivery and performance of the Related Transaction Documents have
been duly authorized by all necessary action (including, without limitation, the
obtaining of any consent of stockholders or other holders of Capital Stock
required by law or by any applicable corporate or other organizational
documents) on the part of each such Person. No authorization or approval or
other action by, and no notice to filing with or license from, any Governmental
Authority is required for such sale other than such as have been obtained on or
prior to the Closing Date. The Related Transaction Documents are the legal,
valid and binding obligation of the parties thereto, enforceable against such
parties in accordance with their terms.
4.29 NO IMMUNITY. No Loan Party nor any Subsidiary of any Loan Party or
any of their respective property has any immunity from jurisdiction of any court
or from any legal process (whether through service or notice, attachment prior
to judgment, attachment in aid of execution, execution or otherwise) under the
laws of the United States or its jurisdiction of organization.
4.30 NO TAXES. Except for any withholding tax imposed on interest payable
by any Loan Party hereunder, there is no tax, levy, impost, duty, fee,
assessment or other governmental charge, or any deduction or withholding,
imposed by any Governmental Authority either (i) on or by virtue of the
execution or delivery of the Loan Documents or (ii) on any payment to be made by
any Loan Party pursuant to the Loan Documents.
5. AFFIRMATIVE COVENANTS.
Parent and each Borrower covenants and agrees that, until the
payment in full of the Obligations, Parent and each of the Borrowers shall and
shall cause each of their respective Subsidiaries to do all of the following:
5.1 ACCOUNTING SYSTEM. Maintain a system of accounting that enables Loan
Parties to produce financial statements in accordance with GAAP and maintain
records pertaining to the Collateral that contain information as from time to
time reasonably may be requested by Lender. Loan Parties also shall keep a
reporting system that shows all additions, sales, claims, returns, and
allowances with respect to their and their Subsidiaries' sales. Loan Parties
shall also maintain their billing systems/practices as approved by Lender prior
to the Closing Date and shall only make material modifications thereto with
notice to, and consent of, Lender.
5.2 COLLATERAL REPORTING. Provide Lender with each of the reports set
forth on SCHEDULE 5.2 at the times specified therein. In addition, each Borrower
agrees to cooperate fully with Lender to facilitate and implement a system of
electronic collateral reporting in order to provide electronic reporting of each
of the items set forth above.
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5.3 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES. Deliver to Lender each
of the financial statements, reports, or other items set forth on SCHEDULE 5.3
at the times specified therein. In addition, Parent agrees that no Subsidiary of
Parent will have a fiscal year different from that of Parent.
5.4 GUARANTOR REPORTS. Cause each Guarantor to deliver its annual
financial statements at the time when Parent provides its audited financial
statements to Agent, but only to the extent such Guarantor's financial
statements are not consolidated with Parent's financial statements.
5.5 INSPECTION. Permit Lender and its duly authorized representatives or
agents to visit any of its properties and inspect any of its assets or books and
records, to examine and make copies of its books and records, and to discuss its
affairs, finances, and accounts with, and to be advised as to the same by, its
officers and employees at such reasonable times and intervals as Lender may
designate and, so long as no Default or Event of Default exists, with reasonable
prior notice to Administrative Borrower.
5.6 MAINTENANCE OF PROPERTIES. Maintain and preserve all of their
properties which are necessary or useful in the proper conduct of their business
in good working order and condition, ordinary wear, tear, and casualty excepted
(and except where the failure to do so could not be expected to result in a
Material Adverse Change), and comply at all times with the provisions of all
material leases to which it is a party as lessee, so as to prevent any material
loss or forfeiture thereof or thereunder.
5.7 TAXES. Cause all assessments and taxes, whether real, personal, or
otherwise, due or payable by, or imposed, levied, or assessed against Loan
Parties, their Subsidiaries, or any of their respective assets to be paid in
full, before delinquency or before the expiration of any extension period,
except to the extent that the validity of such assessment or tax shall be the
subject of a Permitted Protest and except for assessments and taxes not
exceeding $100,000 in the aggregate. Loan Parties will and will cause their
Subsidiaries to make timely payment or deposit of all tax payments and
withholding taxes required of them by applicable laws, including those laws
concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal
income taxes, and will, upon request, furnish Agent with proof satisfactory to
Agent indicating that the applicable Loan Party or Subsidiary of a Loan Party
has made such payments or deposits.
5.8 INSURANCE.
(a) At Parent's or Borrowers' expense, maintain insurance (with
responsible and reputable insurance companies) respecting their and their
Subsidiaries' assets wherever located, covering loss or damage by fire, theft,
explosion, and all other hazards and risks as ordinarily are insured against by
other Persons engaged in the same or similar businesses. Parent or the Borrowers
also shall maintain business interruption, public liability, and product
liability insurance, as well as insurance against larceny, embezzlement, and
criminal misappropriation. All such policies of insurance shall be in such
amounts and with such insurance companies as are reasonably satisfactory to
Agent. Administrative Borrower shall deliver copies of all such policies to
Lender with an endorsement naming Lender as the loss payee (under a satisfactory
lender's loss payable endorsement) or additional insured, as appropriate. Each
policy of insurance or endorsement shall contain a clause requiring the insurer
to give not less than 30 days prior written notice to Lender in the event of
cancellation of the policy for any reason whatsoever.
(b) Administrative Borrower shall give Lender prompt notice of any
loss exceeding $250,000 covered by such insurance. So long as no Event of
Default has occurred and is continuing, Borrowers shall have the exclusive right
to adjust any losses payable under any such insurance policies which are less
than $500,000. Following the occurrence and during the continuation of an Event
of Default, or in the case of any losses payable under such insurance exceeding
$500,000, Lender shall have the exclusive right to adjust any losses payable
under any such insurance policies, without any liability to Loan Parties or
20
their Subsidiaries whatsoever in respect of such adjustments; PROVIDED, HOWEVER,
that if no Event of Default exists, the Borrowers and Lender shall use
commercially reasonable efforts to adjust any losses by agreement of the
parties.
5.9 LOCATION OF COLLATERAL. Keep each Loan Party's and its Subsidiaries'
Inventory and Equipment (other than vehicles, Inventory maintained on vehicles
and Equipment out for repair) only at the locations identified on SCHEDULE 4.5
and their chief executive offices only at the locations identified on SCHEDULE
4.7(B); PROVIDED, HOWEVER, that Administrative Borrower may amend SCHEDULE 4.5
or SCHEDULE 4.7 so long as such amendment occurs by written notice to Lender not
less than 30 days after the date on which such Inventory or Equipment is moved
to such new location or such chief executive office is relocated, so long as
such new location is within the continental United States or Canada, and so long
as, at the time of such written notification, the Loan Party provides Lender a
Collateral Access Agreement with respect thereto.
5.10 COMPLIANCE WITH LAWS. Comply with the requirements of all applicable
laws, rules, regulations, and orders of any Governmental Authority, other than
laws, rules, regulations, and orders the non-compliance with which, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Change, such compliance to include, without limitation, (a) paying
before the same become delinquent all taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits or upon any of
its properties, (b) paying all lawful claims which if unpaid might become a Lien
or charge upon any of its properties, except to the extent contested in good
faith by proper proceedings which stay the imposition of any penalty, fine or
Lien resulting from the non-payment thereof and with respect to which adequate
reserves have been set aside for the payment thereof in accordance with GAAP,
(c) withholding from each payment made to any of its past or present employees,
officers or directors, and to any non resident of the country in which it is
resident, the amount of all Taxes and other deductions required to be withheld
therefrom and paying the same to the proper tax or other receiving officers
within the time required under any applicable laws, and (d) collect from all
Persons the amount of all Taxes required to be collected from them and remit the
same to the proper tax or other receiving officers within the time required
under any applicable laws.
5.11 LEASES. Pay when due all rents and other amounts payable under any
material leases to which any Loan Party or any Subsidiary of a Loan Party is a
party or by which any Loan Party's or any of its Subsidiaries' properties and
assets are bound, unless such payments are the subject of a Permitted Protest.
5.12 EXISTENCE. At all times preserve and keep in full force and effect
each Loan Party's and each of its Subsidiaries', valid existence, good standing
in its jurisdiction of organization and qualifications to do business as a
foreign entity in each jurisdiction in which it is required to be so qualified
and, except as could not reasonably be expected to result in a Material Adverse
Change, any rights, franchises, permits, licenses, accreditations,
authorizations, or other approvals material to their businesses.
5.13 ENVIRONMENTAL.
(a) Keep any property either owned or operated by any Loan Party
or any Subsidiary of a Loan Party free of any Environmental Liens or post bonds
or other financial assurances sufficient to satisfy the obligations or liability
evidenced by such Environmental Liens,
(b) comply, in all material respects, with Environmental Laws and
provide to Agent documentation of such compliance which Agent reasonably
requests,
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(c) promptly notify Agent of any release of a Hazardous Material
in any reportable quantity from or onto property owned or operated by any Loan
Party or any Subsidiary of a Loan Party and take any Remedial Actions required
to xxxxx said release or otherwise to come into compliance with applicable
Environmental Law, and
(d) promptly, but in any event within 5 days of its receipt
thereof, provide Agent with written notice of any of the following: (i) actual
knowledge or written notice that an Environmental Lien has been filed against
any of the real or personal property of any Loan Party or any Subsidiary of a
Loan Party, (ii) actual knowledge or written notice of the commencement of any
Environmental Action or written notice that an Environmental Action will be
filed against any Loan Party or any Subsidiary of a Loan Party, and (iii)
written notice of a violation, citation, or other administrative order which
reasonably could be expected to result in a Material Adverse Change.
5.14 DISCLOSURE UPDATES. Promptly and in no event later than 5 Business
Days after obtaining knowledge thereof, notify Lender if any written
information, exhibit, or report furnished to Lender contained, at the time it
was furnished, any untrue statement of a material fact or omitted to state any
material fact necessary to make the statements contained therein not misleading
in light of the circumstances in which made. The foregoing to the contrary
notwithstanding, any notification pursuant to the foregoing provision will not
cure or remedy the effect of the prior untrue statement of a material fact or
omission of any material fact nor shall any such notification have the effect of
amending or modifying this Agreement or any of the Schedules hereto.
5.15 CONTROL AGREEMENTS. Take all reasonable steps in order for Lender to
obtain control in accordance with Sections 8-106, 9-104, 9-105, 9-106, and 9-107
of the Code with respect to (subject to the proviso contained in SECTION 6.12)
all of its Securities Accounts, Deposit Accounts, electronic chattel paper,
investment property, and letter-of-credit rights.
5.16 FORMATION OF SUBSIDIARIES. At the time that any Loan Party forms any
direct or indirect Subsidiary or acquires any direct or indirect Subsidiary
after the Closing Date, such Loan Party shall (a) cause such new Subsidiary to
provide to Agent a joinder to the Guaranty and the Security Agreement, together
with such other security documents (including Mortgages with respect to any Real
Property of such new Subsidiary), as well as appropriate financing statements
(and with respect to all property subject to a Mortgage, fixture filings), all
in form and substance satisfactory to Lender (including being sufficient to
grant Lender a first priority Lien (subject to Permitted Priority Liens) in and
to the assets of such newly formed or acquired Subsidiary), (b) provide to
Lender a pledge agreement and appropriate certificates and powers or financing
statements, hypothecating all of the direct or beneficial ownership interest in
such new Subsidiary, in form and substance satisfactory to Lender, and (c)
provide to Lender all other documentation, including one or more opinions of
counsel satisfactory to Lender, which in its opinion is appropriate with respect
to the execution and delivery of the applicable documentation referred to above
(including policies of title insurance or other documentation with respect to
all property subject to a Mortgage). Any document, agreement, or instrument
executed or issued pursuant to this SECTION 5.16 shall be a Loan Document.
5.17 FURTHER ASSURANCES. At any time upon the request of Lender, the Loan
Parties shall execute or deliver to Lender, and shall cause their Subsidiaries
to execute or deliver to Lender, any and all financing statements, fixture
filings, security agreements, pledges, assignments, endorsements of certificates
of title, mortgages, deeds of trust, opinions of counsel, and all other
documents (collectively, the "ADDITIONAL DOCUMENTS") that Xxxxx may request in
form and substance reasonably satisfactory to Lender, to create, perfect, and
continue perfected or to better perfect the Liens in all of the properties and
assets of the Loan Parties and their Subsidiaries (whether now owned or
hereafter arising or acquired, tangible or intangible, real or personal), to
create and perfect Liens in favor of Lender in any Real Property acquired by the
22
Loan Parties or their Subsidiaries after the Closing Date, and in order to fully
consummate all of the transactions contemplated hereby and under the other Loan
Documents. To the maximum extent permitted by applicable law, Parent and each
Borrower authorize Lender to execute any such Additional Documents in the Loan
Party's or their Subsidiaries' names, as applicable, and authorizes Lender to
file such executed Additional Documents in any appropriate filing office.
5.18 MATERIAL CONTRACTS. Contemporaneously with the delivery of each
Compliance Certificate pursuant hereto, provide Agent with copies of (a) each
Material Contract entered into since the delivery of the previous Compliance
Certificate, and (b) each amendment or modification of any Material Contract
entered into since the delivery of the previous Compliance Certificate.
5.19 SUBORDINATION. Cause all Indebtedness and other obligations now or
hereafter owed by it to any of its Affiliates, to be subordinated in right of
payment and security to the Indebtedness and other Obligations owing to Lender
in accordance with a subordination agreement in form and substance satisfactory
to Lender.
5.20 AFTER ACQUIRED REAL PROPERTY. Upon the acquisition by it or any of
its Subsidiaries after the date hereof of any interest (whether fee or
leasehold) in any Real Property (wherever located) (each such interest being an
"AFTER ACQUIRED PROPERTY") (x) with a Current Value (as defined below) in excess
of $150,000 in the case of a fee interest, or (y) requiring the payment of
annual rent exceeding in the aggregate $250,000 in the case of leasehold
interest, immediately so notify the Lender, setting forth with specificity a
description of the interest acquired, the location of the real property, any
structures or improvements thereon and either an appraisal or such Loan Party's
good-faith estimate of the current value of such real property (for purposes of
this Section, the "CURRENT VALUE"). Lender shall notify such Loan Party in
writing whether it intends to require a Mortgage and the other documents
referred to below or in the case of leasehold, a leasehold Mortgage or a
Collateral Access Agreement. Upon receipt of such notice requesting a Mortgage,
the Person which has acquired such After Acquired Property shall furnish to
Lender, within a reasonable time thereafter, the following, each in form and
substance reasonably satisfactory to Lender: (a) in the case of a fee interest,
a Mortgage with respect to such real property and related assets located at the
After Acquired Property, each duly executed by such Person and in recordable
form; (b) in the case of a fee interest, evidence of the recording of the
Mortgage referred to in clause (a) above in such office or offices as may be
necessary or, in the reasonable opinion of Lender, desirable to create and
perfect a valid and enforceable first priority lien on the property purported to
be covered thereby or to otherwise protect the rights of Lender thereunder, (c)
in the case of a fee interest, a title insurance policy satisfactory to Lender,
(d) in the case of a fee interest, a survey of such real property, certified to
Lender and to the issuer of the title insurance policy referred to in clause (c)
above by a licensed professional surveyor reasonably satisfactory to Lender, (v)
in the case of a fee interest, Phase I environmental site assessments with
respect to such real property, certified to Lender by a company reasonably
satisfactory to Lender, or such other evidence or description of the
environmental status of the property reasonably acceptable to Lender, (e) in the
case of a leasehold interest, a certified copy of the lease between the landlord
and such Person with respect to such Real Property in which such Person has a
leasehold interest, and the certificate of occupancy, if any, with respect
thereto and (f) such other documents or instruments (including guarantees and
opinions of counsel) as Lender may reasonably require. The Borrowers shall pay
all fees and expenses, including reasonable attorneys' fees and expenses, and
all title insurance charges and premiums, in connection with each Loan Party's
obligations under this SECTION 5.21.
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6. NEGATIVE COVENANTS.
Parent and each Borrower covenants and agrees that until the payment
in full of the Obligations, Parent and each of the Borrowers will not and will
not permit any of their respective Subsidiaries to do any of the following:
6.1 INDEBTEDNESS. Create, incur, assume, suffer to exist, guarantee, or
otherwise become or remain, directly or indirectly, liable with respect to any
Indebtedness, except:
(a) Indebtedness evidenced by this Agreement and the other Loan
Documents,
(b) Indebtedness set forth on SCHEDULE 4.19 and any Refinancing
Indebtedness in respect of such Indebtedness,
(c) Permitted Purchase Money Indebtedness and any Refinancing
Indebtedness in respect of such Indebtedness,
(d) endorsement of instruments or other payment items for deposit,
(e) Indebtedness composing Permitted Investments,
(f) Working Capital Indebtedness and any Refinancing Indebtedness
of such Indebtedness,
(g) the Term A Indebtedness and any Refinancing Indebtedness of
such Indebtedness, and
(h) Other Subordinated Indebtedness.
6.2 LIENS. Create, incur, assume, or suffer to exist, directly or
indirectly, any Lien on or with respect to any of its assets, of any kind,
whether now owned or hereafter acquired, or any income or profits therefrom,
except for Permitted Liens.
6.3 RESTRICTIONS ON FUNDAMENTAL CHANGES.
(a) Enter into any merger, consolidation, amalgamation,
reorganization, or recapitalization, or reclassify its Stock except that so long
as no Default or Event of Default exists or would result therefrom, (i) a
Borrower or any Domestic Subsidiary thereof may merge with one or more other
Borrowers, provided the continuing or surviving Person of such Merger is a
Borrower, (ii) the Loan Parties may consummate a merger or similar transaction
in connection with a Permitted Kasco Sale Transaction and Loan Parties may
effectuate a restructuring for tax purposes with the prior written consent of
Lender.
(b) Liquidate, wind up, or dissolve itself (or suffer any
liquidation or dissolution),
(c) Suspend or go out of a substantial portion of its or their
business.
6.4 DISPOSAL OF ASSETS. Other than Permitted Dispositions or a Permitted
Kasco Sale Transaction, convey, sell, lease, license, assign, transfer, or
otherwise dispose of (or enter into an agreement to convey, sell, lease,
license, assign, transfer, or otherwise dispose of) any of the assets of any
Loan Party or any Subsidiary of a Loan Party.
6.5 CHANGE NAME, ETC.. Change any Loan Party's or any of its
Subsidiaries' name, organizational identification number, FEIN, state or other
jurisdiction of organization or organizational identity; PROVIDED, HOWEVER, that
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a Loan Party or a Subsidiary of a Loan Party may change its name upon at least
30 days prior written notice by Administrative Borrower to Lender of such change
and so long as, at the time of such written notification, such Loan Party or
such Subsidiary provides any financing statements necessary to perfect and
continue perfected the Liens.
6.6 NATURE OF BUSINESS. Make any change in the nature of their business
as described in SCHEDULE 6.6 or acquire any properties or assets that are not
reasonably related to the conduct of such business activities.
6.7 PREPAYMENTS AND AMENDMENTS. Except in connection with Refinancing
Indebtedness permitted by SECTION 6.1:
(a) optionally prepay, redeem, defease, purchase, or otherwise
acquire any Indebtedness of any Loan Party or any Subsidiary of a Loan Party,
other than (i) the Obligations in accordance with this Agreement, (ii) the
Working Capital Indebtedness in accordance with the Working Capital Credit
Agreement and (iii) the Term A Indebtedness in accordance with the Term A Credit
Agreement;
(b) make any payment on account of Indebtedness that has been
contractually subordinated in right of payment if such payment is not permitted
at such time under the subordination terms and conditions; or
(c) directly or indirectly, amend, modify, alter, increase, or
change any of the terms or conditions of (i) the Working Capital Loan Documents
or the Term A Debt Documents (except as specifically permitted by the
Intercreditor Agreement), (ii) any other agreement, instrument, document,
indenture, or other writing evidencing or concerning Indebtedness permitted
under SECTION 6.1 or (iii) except to the extent that such amendment,
modification, alteration, increase, or change could not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Change, any
other Material Contract or (iv) its certificate of incorporation or bylaws (or
other similar organizational documents), including, without limitation, by the
filing or modification of any certificate of designation, or any agreement or
arrangement entered into by it, with respect to any of its Stock (including any
shareholders' agreement), or enter into any new agreement with respect to any of
its Stock, without the prior written consent of Agent, except any such
amendments, modifications or changes or any such new agreements or arrangements
pursuant to this clause (iv) that are not adverse to the interests of the
Lender.
6.8 CHANGE OF CONTROL. Cause, permit, or suffer, directly or
indirectly, any Change of Control.
6.9 CONSIGNMENTS. Consign any of their Inventory or sell any of their
Inventory on xxxx and hold, sale or return, sale on approval, or other
conditional terms of sale, in an aggregate amount at any time outstanding
exceeding $1,000,000.
6.10 DISTRIBUTIONS. Make any distribution or declare or pay any dividends
(in cash or other property, other than common Stock of the Parent) on, or
purchase, acquire, redeem, or retire any of Parent's Stock, of any class,
whether now or hereafter outstanding.
6.11 ACCOUNTING METHODS. Modify or change their fiscal year, method of
accounting (other than as may be required to conform to GAAP) or auditors, or
enter into, modify, or terminate any agreement currently existing, or at any
time hereafter entered into, with any third party accounting firm or service
bureau for the preparation or storage of Loan Parties' or their Subsidiaries'
accounting records without said accounting firm or service bureau agreeing to
provide Lender information regarding Loan Parties' and their Subsidiaries'
financial condition.
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6.12 INVESTMENTS. Except for Permitted Investments, directly or
indirectly, make or acquire any Investment or incur any liabilities (including
contingent obligations) for or in connection with any Investment; PROVIDED,
HOWEVER, that the Loan Parties shall not have Permitted Investments (other than
in the Cash Management Accounts) in Deposit Accounts or Securities Accounts in
an aggregate amount in excess of $100,000 at any one time unless the applicable
Loan Party and the applicable securities intermediary or bank have entered into
Control Agreements governing such Permitted Investments in order to perfect (and
further establish) the Liens in such Permitted Investments. Subject to the
foregoing proviso, Loan Parties shall not and shall not permit their Domestic
Subsidiaries to establish or maintain any Deposit Account or Securities Account
unless Lender shall have received a Control Agreement in respect of such Deposit
Account or Securities Account.
6.13 INVENTORY AND EQUIPMENT WITH BAILEES. Except in the ordinary course
of business, store any Inventory or Equipment of Loan Parties or their
Subsidiaries at any time now or hereafter with a bailee, warehouseman, or
similar party.
6.14 FINANCIAL COVENANTS. [INTENTIONALLY DELETED].
6.15 PARENT AS HOLDING COMPANY. [INTENTIONALLY DELETED]
6.16 EMPLOYEE BENEFITS. Employee Benefits. (i) Engage, or permit any
ERISA Affiliate to engage, in any transaction described in Section 4069 of
ERISA; (ii) engage, or permit any ERISA Affiliate to engage, in any prohibited
transaction described in Section 406 of ERISA or 4975 of the IRC for which a
statutory or class exemption is not available or a private exemption has not
previously been obtained from the U.S. Department of Labor; (iii) adopt or
permit any ERISA Affiliate to adopt any employee welfare benefit plan within the
meaning of Section 3(1) of ERISA which provides benefits to employees after
termination of employment other than as required by Section 601 of ERISA or
applicable law; (iv) fail to make any contribution or payment to any
Multiemployer Plan which it or any ERISA Affiliate may be required to make under
any agreement relating to such Multiemployer Plan, or any law pertaining
thereto; (v) fail, or permit any ERISA Affiliate to fail, to pay any required
installment or any other payment required under Section 412 of the IRC on or
before the due date for such installment or other payment; or (vi) merge or
otherwise consolidate any Employee Plan of any Loan Party with any other
Employee Plan without the prior written consent of Agent, such consent to be
granted or withheld by Agent in sole and absolute discretion (provided that so
long as such merger or consolidation is not adverse to the interests of the
Lender Group, as determined by Agent in its sole discretion, Agent's consent
shall not be unreasonably withheld).
6.17 LIMITATIONS ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES. 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 Subsidiary of any Loan Party (i) to pay dividends or to
make any other distribution on any shares of Stock of such Subsidiary owned by
any Loan Party or any of its Subsidiaries, (ii) to pay or prepay or to
subordinate any Indebtedness owed to any Loan Party or any of its Subsidiaries,
(iii) to make loans or advances to any Loan Party or any of its Subsidiaries or
(iv) to transfer any of its property or assets to any Loan Party or any of its
Subsidiaries, or permit any of its Subsidiaries to do any of the foregoing;
PROVIDED, HOWEVER, that nothing in any of clauses (i) through (iv) of this
SECTION 6.19 shall prohibit or restrict compliance with:
(a) this Agreement, the other Loan Documents, the Working Capital
Loan Documents and the Term A Debt Documents;
26
(b) any applicable law, rule or regulation (including applicable
currency control laws and applicable state corporate statutes
restricting the payment of dividends in certain circumstances);
(c) in the case of clause (iv), any agreement setting forth
customary restrictions on the subletting, assignment or transfer of
any property or asset that is leased or licensed; or
(d) in the case of clause (iv), any agreement, instrument or other
document evidencing a Permitted Lien that restricts, on customary
terms, the transfer of any property or assets subject thereto.
6.18 LEASE OBLIGATIONS. Create, incur or suffer to exist, or permit any
of its Subsidiaries to create, incur or suffer to exist, any obligations as
lessee (i) for the payment of rent for any real or personal property in
connection with any sale and leaseback transaction, or (ii) for the payment of
rent for any real or personal property under leases or agreements to lease other
than (A) Capital Lease Obligations which would not cause the aggregate amount of
all obligations under Capital Leases entered into after the Closing Date owing
by all Loan Parties and their Subsidiaries in any fiscal year to exceed the
amounts set forth in SECTION 6.15(D), and (B) Operating Lease Obligations which
would not cause the aggregate amount of all Operating Lease Obligations owing by
all Loan Parties and their Subsidiaries in any fiscal year to exceed $5,000,000.
6.19 FEDERAL RESERVE REGULATIONS. Permit the Term Loan, or the proceeds
thereof, to be used for any purpose that would cause the Term Loan to be a
margin loan under the provisions of Regulation T, U or X of the Board of
Governors of the Federal Reserve System.
6.20 INVESTMENT COMPANY ACT OF 1940. Engage in any business, enter into
any transaction, use any securities or take any other action or permit any of
its Subsidiaries to do any of the foregoing, that would cause it or any of its
Subsidiaries to become subject to the registration requirements of the
Investment Company Act of 1940, as amended, by virtue of being an "investment
company" or a company "controlled" by an "investment company" not entitled to an
exemption within the meaning of such Act.
7. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an event of
default (each, an "EVENT OF DEFAULT") under this Agreement:
7.1 If any Loan Party fail to pay when due and payable, or when declared
due and payable, (a) all or any portion of the Obligations consisting of
interest, fees, or charges due the Lender, reimbursement of Lender Expenses, or
other amounts (other than any portion thereof constituting principal)
constituting Obligations (including any portion thereof that accrues after the
commencement of an Insolvency Proceeding, regardless of whether allowed or
allowable in whole or in part as a claim in any such Insolvency Proceeding), and
such failure continues for a period of 3 Business Days, or (b) all or any
portion of the principal of the Obligations;
7.2 If any Loan Party or any Subsidiary of any Loan Party:
(a) fails to perform or observe any covenant or other agreement
contained in any of SECTIONS 2.5, 5.2, 5.3, 5.4, 5.5, 5.8, 5.12, 5.14, 5.16,
5.17 and 6.1 through 6.21 of this Agreement or Section 6 of the Security
Agreement; provided, that no more than two (2) times during any fiscal year of
27
Parent, any Loan Party may fail to deliver in a timely manner a delivery
required under SECTIONS 5.2, 5.3 or 5.4, if such delivery shall occur no later
than two (2) Business Days following notice by Lender;
(b) fails to perform or observe any covenant or other agreement
contained in any of SECTIONS 5.6, 5.7, 5.9, 5.10, 5.11 and 5.15 of this
Agreement and such failure continues for a period of 10 days after the earlier
of (i) the date on which such failure shall first become known to any officer of
any Loan Party, or (ii) written notice thereof is given to Administrative
Borrower by Lender; or
(c) fails to perform or observe any covenant or other agreement
contained in this Agreement, or in any of the other Loan Documents, in each
case, other than any such covenant or agreement that is the subject of another
provision of this SECTION 7 (in which event such other provision of this SECTION
7 shall govern), and such failure continues for a period of 20 days after the
earlier of (i) the date on which such failure shall first become known to any
officer of any Loan Party, or (ii) written notice thereof is given to
Administrative Borrower by Lender.
7.3 If any material portion of any Loan Party's or any of its
Subsidiaries' assets is attached, seized, subjected to a writ or distress
warrant, or is levied upon, or comes into the possession of any third Person and
the same is not discharged before the earlier of 30 days after the date it first
arises or 5 days prior to the date on which such property or asset is subject to
forfeiture by such Loan Party or the applicable Subsidiary;
7.4 4. If an Insolvency Proceeding is commenced by any Loan Party
or any Subsidiary of a Loan Party;
7.5 If an Insolvency Proceeding is commenced against any Loan Party or
any Subsidiary of a Loan Party, and any of the following events occur: (a) the
applicable Loan Party or Subsidiary consents to the institution of such
Insolvency Proceeding against it, (b) the petition commencing the Insolvency
Proceeding is not timely controverted, (c) the petition commencing the
Insolvency Proceeding is not dismissed within 60 calendar days of the date of
the filing thereof, (d) an interim trustee is appointed to take possession of
all or any substantial portion of the properties or assets of, or to operate all
or any substantial portion of the business of, any Loan Party or any Subsidiary
of a Loan Party, or (e) an order for relief shall have been issued or entered
therein;
7.6 If any Loan Party or any Subsidiary of a Loan Party is enjoined,
restrained, or in any way prevented by court order from continuing to conduct
all or any material part of its business affairs;
7.7 If one or more judgments, orders, or awards involving an aggregate
amount of $250,000, or more (except to the extent fully covered by insurance
pursuant to which the insurer has accepted liability therefor in writing) shall
be entered or filed against any Loan Party or any Subsidiary of any Loan Party
or with respect to any of their respective assets, and the same is not released,
discharged, bonded against, or stayed pending appeal before the earlier of 30
days after the date it first arises or 5 days prior to the date on which such
asset is subject to being forfeited by the applicable Loan Party or the
applicable Subsidiary;
7.8 If there is a default in one or more agreements to which any Loan
Party or any Subsidiary of a Loan Party is a party with one or more third
Persons relative to Indebtedness of any Loan Party or any Subsidiary of any Loan
Party involving an aggregate amount of $250,000, or more, and such default (i)
occurs at the final maturity of the obligations thereunder, or (ii) results in
such third Person(s) actual acceleration of the maturity of the applicable Loan
Party's or Subsidiary's obligations thereunder;
28
7.9 If any warranty, representation, material written statement, or
material Record made herein or in any other Loan Document or delivered to Lender
in connection with this Agreement or any other Loan Document proves to be untrue
in any material respect (except that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or
modified by materiality in the text thereof) as of the date of issuance or
making or deemed making thereof;
7.10 If the obligation of any Guarantor under the Guaranty is limited or
terminated by operation of law or by such Guarantor, or any such Guarantor
becomes the subject of an Insolvency Proceeding;
7.11 If the Security Agreement, the Canadian Security Agreement, any
Mortgage or any other Loan Document that purports to create a Lien, shall, for
any reason, fail or cease to create a valid and perfected and, except to the
extent permitted by the terms hereof or thereof, first priority Lien (subject to
Permitted Priority Liens) on or security interest in the Collateral covered
hereby or thereby, except (a) as a result of a disposition of the applicable
Collateral in a transaction permitted under this Agreement or (b) solely as a
result of the gross negligence of Lender;
7.12 Any provision of any Loan Document shall at any time for any reason
be declared to be null and void (except solely as a result of the gross
negligence of Lender), or the validity or enforceability thereof shall be
contested by any Loan Party or any Subsidiary of a Loan Party, or a proceeding
shall be commenced by any Loan Party or any Subsidiary of a Loan Party, or by
any Governmental Authority having jurisdiction over any Loan Party or any
Subsidiary of a Loan Party, seeking to establish the invalidity or
unenforceability thereof, or any Loan Party or any Subsidiary of a Loan Party
shall deny that it has any liability or obligation purported to be created under
any Loan Document;
7.13 Any material damage to, or loss, theft or destruction of, any
Collateral, whether or not insured, or any strike, lockout, labor dispute,
embargo, condemnation, act of God or public enemy, or other casualty which
causes, for more than thirty (30) consecutive days or which is not reasonably
susceptible of cure within such thirty (30) days, the cessation or substantial
curtailment of revenue producing activities at any facility of any Loan Party,
if any such event or circumstance could reasonably be expected to have a
Material Adverse Effect; or
7.14 Any cessation of a substantial part of the business of the Parent or
any of its Subsidiaries for a period which materially and adversely affects the
ability of the Parent and its Subsidiaries (taken as a whole) to continue its
business on a profitable basis.
7.15 Any Loan Party or any of its ERISA Affiliates shall have made a
complete or partial withdrawal from a Multiemployer Plan, and, as a result of
such complete or partial withdrawal, any Loan Party or any of its ERISA
Affiliates incurs a withdrawal liability in an annual amount exceeding $250,000;
or a Multiemployer Plan enters reorganization status under Section 4241 of
ERISA, and, as a result thereof any Loan Party's or any of its ERISA Affiliates'
annual contribution requirements with respect to such Multiemployer Plan
increases in an annual amount exceeding $250,000; or
7.16 Any Termination Event with respect to any Employee Plan shall have
occurred, and, 30 days after notice thereof shall have been given to any Loan
Party by any Agent, (i) such Termination Event (if correctable) shall not have
been corrected, and (ii) the then current value of such Employee Plan's vested
benefits exceeds the then current value of assets allocable to such benefits in
such Employee Plan by more than $250,000 (or, in the case of a Termination Event
involving liability under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064,
4069, 4201, 4204 or 4212 of ERISA or Section 4971 of the IRC, which liabilities
will not be aggregated, the liability is in excess of such amount).
29
7.17 If at any time there shall be an Event of Default under either of
the Senior Creditor Agreements.
8. THE LENDER'S RIGHTS AND REMEDIES.
8.1 RIGHTS AND REMEDIES. Upon the occurrence, and during the
continuation, of an Event of Default, but subject to the Intercreditor
Agreement, Lender (at its election but without notice of its election and
without demand) may do any one or more of the following, all of which are
authorized by Parent and each of the Borrowers:
(a) Declare all or any portion of the Obligations, whether
evidenced by this Agreement, by any of the other Loan Documents, or otherwise,
immediately due and payable;
(b) Terminate this Agreement and any of the other Loan Documents
as to any future liability or obligation of Lender, but without affecting any of
the Liens in the Collateral and without affecting the Obligations; and
(c) Lender shall have all other rights and remedies available at
law or in equity or pursuant to any other Loan Document.
The foregoing to the contrary notwithstanding, upon the occurrence of any Event
of Default described in SECTION 7.4 or SECTION 7.5, in addition to the remedies
set forth above, without any notice to Loan Parties or any other Person or any
act by Lender, the Obligations then outstanding, together with all accrued and
unpaid interest thereon and all fees and all other amounts due under this
Agreement and the other Loan Documents, shall automatically and immediately
become due and payable, without presentment, demand, protest, or notice of any
kind, all of which are expressly waived by Parent and each of the Borrowers.
8.2 REMEDIES CUMULATIVE. The rights and remedies of Lender under this
Agreement, the other Loan Documents, and all other agreements shall be
cumulative. Lender shall have all other rights and remedies not inconsistent
herewith as provided under the Code, by law, or in equity. No exercise by Lender
of one right or remedy shall be deemed an election, and no waiver by Lender of
any Event of Default shall be deemed a continuing waiver. No delay by Lender
shall constitute a waiver, election, or acquiescence by it.
9. TAXES AND EXPENSES.
If any Loan Party or its Subsidiaries fail to pay any monies
(whether taxes, assessments, insurance premiums, or, in the case of leased
properties or assets, rents or other amounts payable under such leases) due to
third Persons, or fails to make any deposits or furnish any required proof of
payment or deposit, all as required under the terms of this Agreement, then,
Lender, in its sole discretion and without prior notice to any Loan Party, may
do any or all of the following: (a) make payment of the same or any part
thereof, or (b) in the case of the failure to comply with SECTION 5.8 hereof,
obtain and maintain insurance policies of the type described in SECTION 5.8 and
take any action with respect to such policies as Lender deems prudent. Any such
amounts paid by Lender shall constitute Lender Expenses and any such payments
shall not constitute an agreement by Lender to make similar payments in the
future or a waiver by Lender of any Event of Default under this Agreement.
Lender need not inquire as to, or contest the validity of, any such expense,
tax, or Lien and the receipt of the usual official notice for the payment
thereof shall be conclusive evidence that the same was validly due and owing.
30
10. WAIVERS; INDEMNIFICATION.
10.1 DEMAND; PROTEST; ETC. Except to the extent expressly provided
herein, Parent and each Borrower waive (on behalf of themselves and their
respective Subsidiaries) demand, protest, notice of protest, notice of default
or dishonor, notice of payment and nonpayment, nonpayment at maturity, release,
compromise, settlement, extension, or renewal of documents, instruments, chattel
paper, and guarantees at any time held by Lender on which Parent, such Borrower
or any Subsidiary may in any way be liable.
10.2 LENDER'S LIABILITY FOR COLLATERAL. Parent and each Borrower hereby
agree (on behalf of themselves and their Subsidiaries) that: (a) so long as
Lender complies with its obligations, if any, under the Code, Lender shall not
in any way or manner be liable or responsible for: (i) the safekeeping of the
Collateral, (ii) any loss or damage thereto occurring or arising in any manner
or fashion from any cause, (iii) any diminution in the value thereof, or (iv)
any act or default of any carrier, warehouseman, bailee, forwarding agency, or
other Person, and (b) all risk of loss, damage, or destruction of the Collateral
shall be borne by Loan Parties.
10.3 INDEMNIFICATION. Parent and each Borrower, jointly and severally,
shall pay, indemnify, defend, and hold the Lender-Related Persons, and each
Participant (each, an "INDEMNIFIED PERSON") harmless (to the fullest extent
permitted by law) from and against any and all claims, demands, suits, actions,
investigations, proceedings, liabilities, fines, costs, penalties, and damages,
and all reasonable fees and disbursements of attorneys, experts, or consultants
and all other costs and expenses actually incurred in connection therewith or in
connection with the enforcement of this indemnification (as and when they are
incurred and irrespective of whether suit is brought), at any time asserted
against, imposed upon, or incurred by any of them (a) in connection with or as a
result of or related to the execution, delivery, enforcement, performance, or
administration (including any restructuring or workout with respect hereto) of
this Agreement, any of the other Loan Documents, or the transactions
contemplated hereby or thereby or the monitoring of the Loan Parties' and their
Subsidiaries' compliance with the terms of the Loan Documents, (b) with respect
to any investigation, litigation, or proceeding related to this Agreement, any
other Loan Document, or the use of the proceeds of the credit provided hereunder
(irrespective of whether any Indemnified Person is a party thereto), or any act,
omission, event, or circumstance in any manner related thereto, and (c) in
connection with or arising out of any presence or release of Hazardous Materials
at, on, under, to or from any assets or properties owned, leased or operated by
Parent or any of its Subsidiaries or any Environmental Actions, Environmental
Liabilities and Costs or Remedial Actions related in any way to any such assets
or properties of Parent or any of its Subsidiaries (each and all of the
foregoing, the "INDEMNIFIED LIABILITIES"). The foregoing to the contrary
notwithstanding, Parent and the Borrowers shall have no obligation to any
Indemnified Person under this SECTION 10.3 with respect to any Indemnified
Liability that a court of competent jurisdiction finally determines to have
resulted from the gross negligence or willful misconduct of such Indemnified
Person or from such Indemnified Person's breach of its material obligations
under the Loan Documents. This provision shall survive the termination of this
Agreement and the repayment of the Obligations. If any Indemnified Person makes
any payment to any other Indemnified Person with respect to an Indemnified
Liability as to which Parent or the Borrowers were required to indemnify the
Indemnified Person receiving such payment, the Indemnified Person making such
payment is entitled to be indemnified and reimbursed by Parent and the Borrowers
with respect thereto. WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO
EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE
OR IN PART ARE CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH
INDEMNIFIED PERSON OR OF ANY OTHER PERSON.
31
11. NOTICES.
Unless otherwise provided in this Agreement, all notices or demands
by Parent or Borrowers or Lender to the other relating to this Agreement or any
other Loan Document shall be in writing and (except for financial statements and
other informational documents which may be sent by first-class mail, postage
prepaid) shall be personally delivered or sent by registered or certified mail
(postage prepaid, return receipt requested), overnight courier, electronic mail
(at such email addresses as Administrative Borrower or Lender, as applicable,
may designate to each other in accordance herewith), or telefacsimile to
Borrowers in care of Administrative Borrower or to Lender, as the case may be,
at its address set forth below:
If to Administrative Borrower: BAIRNCO CORPORATION
000 Xxxxxxx Xxxx., Xxxxx 000
Xxxx Xxxx, Xxxxxxx 00000
Attn: CEO
Fax No.: 000-000-0000
With copies to: XXXXXX XXXXXXXX FROME XXXXXXXXXX &
WOLOSKY LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx , Xxx Xxxx 00000-0000
Attn: Xxxxx Xxxxxxx, Esq.
Fax No.: 000-000-0000
If to Lender: STEEL PARTNERS II, L.P.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx XxXxxxxx
Fax No.: (000) 000-0000
With copies to: XXXXXXX XXXXXX LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Fax No.: 000-000-0000
Lender and Parent and the Borrowers may change the address at which
they are to receive notices hereunder, by notice in writing in the foregoing
manner given to the other party. All notices or demands sent in accordance with
this SECTION 11, other than notices by Lender in connection with enforcement
rights against the Collateral under the provisions of the Code, shall be deemed
received on the earlier of the date of actual receipt or 3 Business Days after
the deposit thereof in the mail. Parent and each Borrower acknowledge and agree
(on behalf of themselves and their Subsidiaries) that notices sent by Lender in
connection with the exercise of enforcement rights against Collateral under the
provisions of the Code shall be deemed sent when deposited in the mail or
personally delivered, or, where permitted by law, transmitted by telefacsimile
or any other method set forth above.
32
12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT
OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT
HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH
RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR
THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND
LITIGATED ONLY IN THE STATE AND TO THE EXTENT PERMITTED BY APPLICABLE LAW,
FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK; PROVIDED,
HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER
PROPERTY MAY BE BROUGHT, AT LENDER'S OPTION, IN THE COURTS OF ANY JURISDICTION
WHERE LENDER ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. EACH OF THE PARTIES HERETO WAIVE, TO THE EXTENT PERMITTED
UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM
NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
ACCORDANCE WITH THIS SECTION 12(B).
(c) EACH OF THE PARTIES HERETO HEREBY WAIVE THEIR RESPECTIVE RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY
OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. EACH OF THE PARTIES HERETO REPRESENT THAT EACH HAS REVIEWED
THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
13. [INTENTIONALLY OMITTED]
14. AMENDMENTS; WAIVERS.
(a) 14.1 AMENDMENTS AND WAIVERS. No amendment or waiver of any
provision of this Agreement or any other Loan Document, and no consent with
respect to any departure by any Loan Party therefrom, shall be effective unless
the same shall be in writing and signed by Lender and Administrative Borrower
(on behalf of all Loan Parties) and then any such waiver or consent shall be
effective, but only in the specific instance and for the specific purpose for
which given; PROVIDED, HOWEVER, that no such waiver, amendment, or consent
shall, other than in connection with a merger, liquidation, dissolution or sale
of such Person expressly permitted by the terms hereof or the other Loan
Documents, release (A) a Borrower or (B) all or substantially all of the
Guarantors from any obligation for the payment of money under the Loan
Documents, in each case without the written consent of each Lender.
33
14.2 NO WAIVERS; CUMULATIVE REMEDIES. No failure by Lender to exercise any
right, remedy, or option under this Agreement or any other Loan Document, or
delay by Lender in exercising the same, will operate as a waiver thereof. No
waiver by Lender will be effective unless it is in writing, and then only to the
extent specifically stated. No waiver by Lender on any occasion shall affect or
diminish Lender's rights thereafter to require strict performance by Parent and
each of the Borrowers of any provision of this Agreement. Lender's rights under
this Agreement and the other Loan Documents will be cumulative and not exclusive
of any other right or remedy that Lender may have.
15. [INTENTIONALLY OMITTED]
16. WITHHOLDING TAXES.
(a) Any and all payments by any Loan Party hereunder or under any
other Loan Document shall be made free and clear of and without deduction for
any and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, EXCLUDING taxes imposed
on the net income of any Lender (or any transferee or assignee thereof,
including a participation holder (any such entity, a "TRANSFEREE")) by the
jurisdiction in which such Person is organized or has its principal lending
office (all such nonexcluded taxes, levies, imposts, deductions, charges
withholdings and liabilities, collectively or individually, "Taxes"). If any
Loan Party shall be required to deduct any Taxes from or in respect of any sum
payable hereunder to Lender (or any Transferee), (i) the sum payable shall be
increased by the amount (an "ADDITIONAL AMOUNT") necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this SECTION 16) Agent or such Lender (or such Transferee) shall
receive an amount equal to the sum it would have received had no such deductions
been made, (ii) such Loan Party shall make such deductions and (iii) such Loan
Party shall pay the full amount deducted to the relevant Governmental Authority
in accordance with applicable law.
(b) In addition, each Loan Party agrees to pay to the relevant
Governmental Authority in accordance with applicable law any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Loan Document ("OTHER TAXES"). Each Loan Party shall deliver to Lender
official receipts in respect of any Taxes or Other Taxes payable hereunder
promptly after payment of such Taxes or Other Taxes.
(c) The Loan Parties hereby jointly and severally indemnify and
agree to hold Lender harmless from and against Taxes and Other Taxes (including,
without limitation, Taxes and Other Taxes imposed on any amounts payable under
this SECTION 16) paid by such Person, whether or not such Taxes or Other Taxes
were correctly or legally asserted. Such indemnification shall be paid within 10
days from the date on which any such Person makes written demand therefore
specifying in reasonable detail the nature and amount of such Taxes or Other
Taxes.
(d) [Intentionally Omitted]
(e) [Intentionally Omitted]
(f) Lender in claiming any indemnity payment or additional payment
amounts payable pursuant to this SECTION 16 shall use reasonable efforts
(consistent with legal and regulatory restrictions) to file any certificate or
document reasonably requested in writing by the Administrative Borrower or to
change the jurisdiction of its applicable lending office if the making of such a
34
filing or change would avoid the need for or reduce the amount of any such
indemnity payment or additional amount that may thereafter accrue, would not
require Lender to disclose any information Lender deems confidential and would
not, in the sole determination of Lender, be otherwise disadvantageous to
Lender.
(g) The obligations of the Loan Parties under this SECTION 16 shall
survive the termination of this Agreement and the payment of the Term Loan and
all other amounts payable hereunder.
17. GENERAL PROVISIONS.
17.1 EFFECTIVENESS. This Agreement shall be binding and deemed effective
when executed by Parent, Borrowers, and Lender whose signatures are provided for
on the signature pages hereof.
17.2 SECTION HEADINGS. Headings and numbers have been set forth herein
for convenience only. Unless the contrary is compelled by the context,
everything contained in each Section applies equally to this entire Agreement.
17.3 INTERPRETATION. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed against any Lender, Parent, or Borrowers,
whether under any rule of construction or otherwise. On the contrary, this
Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.
17.4 SEVERABILITY OF PROVISIONS. Each provision of this Agreement shall
be severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.
17.5 DEBTOR-CREDITOR RELATIONSHIP. The relationship between Lender, on
the one hand, and Parent and Borrowers, on the other hand, under this Agreement
and the other Loan Documents is solely that of creditor and debtor. No Lender
has (or shall be deemed to have) any fiduciary relationship or duty to Parent or
Borrowers arising out of or in connection with, and there is no agency or joint
venture relationship between Lender, on the one hand, and Parent and Borrowers,
on the other hand, by virtue of this Agreement, any other Loan Document or any
transaction contemplated herein or therein.
17.6 COUNTERPARTS; ELECTRONIC EXECUTION. This Agreement may be executed
in any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be an original,
and all of which, when taken together, shall constitute but one and the same
Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this Agreement. Any
party delivering an executed counterpart of this Agreement by telefacsimile or
other electronic method of transmission also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement. The foregoing shall apply to each other Loan Document MUTATIS
MUTANDIS.
17.7 REVIVAL AND REINSTATEMENT OF OBLIGATIONS. If the incurrence or
payment of the Obligations by any Borrower or any Guarantor or the transfer to
any Lender of any property should for any reason subsequently be declared to be
void or voidable under any state or federal law relating to creditors' rights,
including provisions of the Bankruptcy Code relating to fraudulent conveyances,
preferences, or other voidable or recoverable payments of money or transfers of
property (each, a "VOIDABLE TRANSFER"), and if the Lender is required to repay
or restore, in whole or in part, any such Voidable Transfer, or elects to do so
35
upon the reasonable advice of its counsel, then, as to any such Voidable
Transfer, or the amount thereof that the Lender is required or elects to repay
or restore, and as to all reasonable costs, expenses, and attorneys fees of the
Lender related thereto, the liability of Loan Parties automatically shall be
revived, reinstated, and restored and shall exist as though such Voidable
Transfer had never been made.
17.8 CONFIDENTIALITY.
Lender may provide information concerning the terms and conditions
of this Agreement and the other Loan Documents to loan syndication and pricing
reporting services and the provision of such information shall not be a breach
of or default under any confidentiality obligation of Lender under this
Agreement or any other Loan Document.
17.9 LENDER EXPENSES. Parent and Borrowers, jointly and severally, agree
to pay any and all Lender Expenses promptly after demand therefor by Lender and
agrees that their obligations contained in this SECTION 17.9 shall survive
payment or satisfaction in full of all other Obligations.
17.10 USA PATRIOT ACT. Each Lender that is subject to the requirements of
the USA Patriot Act (Title 111 of Pub. L. 107-56 (signed into law October 26,
2001)) (the "ACT") hereby notifies Parent and Borrowers that pursuant to the
requirements of the Act, it is required to obtain, verify and record information
that identifies Parent and Borrowers, which information includes the name and
address of Parent and each of the Borrowers and other information that will
allow such Lender to identify Parent and each of the Borrowers in accordance
with the Act.
17.11 INTEGRATION; RESTATEMENT OF ORIGINAL LSA. This Agreement, together
with the other Loan Documents, reflects the entire understanding of the parties
with respect to the transactions contemplated hereby and shall not be
contradicted or qualified by any other agreement, oral or written, before the
date hereof. The parties hereto agree that as of the Closing of the Closing Date
Transactions, the terms, conditions, agreements, covenants, representations and
warranties set forth in the Original LSA are hereby amended and restated in
their entirety, and as so amended and restated, are replaced and superseded, by
the terms, conditions, agreements, covenants, representations and warranties set
forth in this Agreement and the other Loan Documents.
17.12 PARENT AS AGENT FOR BORROWERS. Each Borrower hereby irrevocably
appoints Parent as the borrowing agent and attorney-in-fact for all Borrowers
(the "ADMINISTRATIVE BORROWER") which appointment shall remain in full force and
effect unless and until Lender shall have received prior written notice signed
by each Borrower that such appointment has been revoked and that another
Borrower has been appointed Administrative Borrower. Each Borrower hereby
irrevocably appoints and authorizes the Administrative Borrower (i) to provide
Lender with all notices with respect to the Term Loan obtained for the benefit
of any Borrower and all other notices and instructions under this Agreement and
(ii) to take such action as the Administrative Borrower deems appropriate on its
behalf to the Term Loan and to exercise such other powers as are reasonably
incidental thereto to carry out the purposes of this Agreement. It is understood
that the handling of the Loan Account and Collateral of Borrowers in a combined
fashion, as more fully set forth herein, is done solely as an accommodation to
Borrowers in order to utilize the collective borrowing powers of Borrowers in
the most efficient and economical manner and at their request, and that Lender
shall not incur liability to any Borrower as a result hereof. Each Borrower
expects to derive benefit, directly or indirectly, from the handling of the Loan
Account and the Collateral in a combined fashion since the successful operation
of each Borrower is dependent on the continued successful performance of the
integrated group. To induce the Lender to do so, and in consideration thereof,
each Borrower hereby jointly and severally agrees to indemnify each Lender and
hold each Lender harmless against any and all liability, expense, loss or claim
of damage or injury, made against the Lender by any Borrower or by any third
36
party whosoever, arising from or incurred by reason of (a) the handling of the
Loan Account and Collateral of Borrowers as herein provided, (b) the Lender's
relying on any instructions of the Administrative Borrower, or (c) any other
action taken by the Lender hereunder or under the other Loan Documents, except
that Borrowers will have no liability to the relevant Lender-Related Person
under this SECTION 17.12 with respect to any liability that has been finally
determined by a court of competent jurisdiction to have resulted solely from the
gross negligence or willful misconduct of such Lender-Related Person, or from
such Lender-Related Person's breach of its material obligations under the Loan
Documents, as the case may be.
17.13 INTERCREDITOR AGREEMENT. Notwithstanding anything herein to the
contrary, the liens and security interests granted to Lender pursuant to the
Loan Documents in the Collateral, the right of Lender to receive any payments or
distributions on account of the Obligations, and the exercise of any right or
remedy by Lender with respect to the Collateral hereunder or under any other
Loan Document are subject to the provisions of the Intercreditor Agreement. In
the event of any conflict between the terms of the Intercreditor Agreement and
this Agreement with respect to (a) the priority of liens and security interests
granted to Lender in the Collateral pursuant to the Loan Documents, (b) the
right of Lender to receive any payments or distributions on account of the
obligations, or (c) the rights of Lender under this Agreement, the terms of the
Intercreditor Agreement shall govern and control as between the Lender, on the
one hand, and the Working Capital Agent, on behalf of itself, and on behalf of
the Working Capital Lenders, the Term A Agent, on behalf of itself, and on
behalf of the Term A Lenders, on the other hand.
17.14 JUDGMENT CURRENCY. (a) This is an international financial
transaction in which the specification of a currency and payment in New York
City is of the essence. Dollars shall be the currency of account in the case of
all payments pursuant to or arising under this Agreement or under any other Loan
Document, and all such payments shall be made to the Lender's Account in
immediately available funds. To the fullest extent permitted by applicable law,
the Obligations of each Loan Party to Lender under this Agreement and under the
other Loan Documents shall not be discharged by any amount paid in any other
currency or in any other manner than to the Lender's Account to the extent that
the amount so paid after conversion under this Agreement and transfer to the
Lender's Account does not yield the amount of Dollars in New York City due under
this Agreement and under the other Loan Documents.
(b) If, for the purposes of obtaining or enforcing judgment against
the Loan Parties in any court in any jurisdiction in connection with this
Agreement or any other Loan Document, it becomes necessary to convert into any
other currency (such other currency being referred to as the "JUDGMENT
CURRENCY") an amount due under this Agreement or any Loan Document in Dollars
other than Judgment Currency, the conversion shall be made at the rate of
exchange prevailing on the Business Day immediately preceding (a) the date of
actual payment of the amount due, in the case of any proceeding in the courts of
any jurisdiction that would give effect to such conversion being made on such
date, or (b) the date on which the judgment is given, in the case of any
proceeding in the courts of any other jurisdiction (the applicable date as of
which such conversion is made pursuant to this SECTION 17.14 being hereinafter
referred to as the "JUDGMENT CONVERSION DATE").
(c) If, in the case of any proceeding in the court of any
jurisdiction referred to in subsection (a) above, there is a change in the rate
of exchange prevailing between the Judgment Conversion Date and the date of
actual receipt for value of the amount due, the Loan Parties shall pay such
additional amount (if any, and in any event not a lesser amount) as may be
necessary to ensure that the amount actually received in the Judgment Currency,
when converted at the rate of exchange prevailing on the date of payment, will
produce the amount of Dollars which could have been purchased with the amount of
the Judgment Currency stipulated in the judgment or judicial order at the rate
of exchange prevailing on the Judgment Conversion Date. The term "rate of
exchange" in this Section means the Spot Rate at which Lender would be prepared
to sell Dollars against the Judgment Currency (or if Lender is not in the
37
business of selling Dollars against the Judgment Currency, the Spot Rate
applicable to such transactions published by the banking institution at which
Lender maintains the Lender's Account).
(d) Any amount due from the Loan Parties under this SECTION 17.14
shall not be affected by judgment being obtained for any other amounts due under
or in respect of this Agreement or any other Loan Document.
17.15 IMMUNITY. To the extent that any Loan Party or any of its
Subsidiaries has or hereafter may acquire any immunity (sovereign or otherwise)
from jurisdiction of any court or from set-off or from any legal process,
action, suit or proceeding (whether through service or notice, attachment prior
to judgment, attachment in aid of execution, execution of judgment or otherwise)
with respect to itself or any of its property, the Parent and each Borrower
hereby irrevocably waives (on behalf of itself and its Subsidiaries) and agrees
not to plead or claim such immunity in respect of its Obligations hereunder and
under the other Loan Documents to which it is a party to the extent permitted by
applicable law and, without limiting the generality of the foregoing, agrees
that the waivers set forth in this SECTION 17.15 shall be to the fullest extent
permitted under the Foreign Sovereign Immunities Act of 1976 of the United
States and are intended to be irrevocable for purposes of such Act.
[Signature pages to follow.]
38
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered as of the date first above written.
BORROWERS: XXXXX, INC.,
a Delaware corporation
By:
--------------------------------
Title:
--------------------------------
XXXXX VISCOR LTD.,
a Texas limited partnership
By: XXXXX ADHESIVES & FILMS, INC.
General Partner
By: By:
Title: Title:
XXXXX SIGNTECH, LTD.,
a Texas limited partnership
By: XXXXX ADHESIVES & FILMS, INC.
General Partner
By: By:
Title: Title:
KASCO CORPORATION,
a Delaware corporation
By:
--------------------------------
Title:
--------------------------------
SOUTHERN SAW ACQUISITION CORPORATION,
a Delaware corporation
By:
--------------------------------
Title:
--------------------------------
PARENT: BAIRNCO CORPORATION,
a Delaware corporation
By:
--------------------------------
Title:
--------------------------------
39
LENDER: STEEL PARTNERS II, L.P.,
a Delaware limited partnership, as
Lender
By: STEEL PARTNERS, L.L.C
General Partner
-------------------------------
By:
-------------------------------
Xxxxxx Xxxxxxxxxxxx
Managing Member
40
EXECUTION COPY
LK LLP Draft of July 5, 2007
SCHEDULE 1.1
As used in the Agreement, the following terms shall have the following
definitions:
"ACCOUNT" means an account (as that term is defined in the Code).
"ACCOUNT DEBTOR" means any Person who is obligated on an Account,
chattel paper, or a general intangible.
"ACT" has the meaning specified therefor in SECTION 17.10.
"ADDITIONAL DOCUMENTS" has the meaning specified therefor in
SECTION 5.17.
"ADMINISTRATIVE BORROWER" has the meaning specified therefor in
SECTION 17.12.
"AFFILIATE" means, as applied to any Person, any other Person who
controls, is controlled by, or is under common control with, such Person and in
the case of any Loan Party, the immediate family members, spouses and lineal
descendants of individuals that are Affiliates of such Loan Party. For purposes
of this definition, "control" means the possession, directly or indirectly
through one or more intermediaries, of the power to direct the management and
policies of a Person, whether through the ownership of Stock, by contract, or
otherwise; PROVIDED, HOWEVER, that, for purposes of SECTION 6.13 of the
Agreement: (a) any Person which owns directly or indirectly 10% or more of the
Stock having ordinary voting power for the election of directors or other
members of the governing body of a Person or 10% or more of the partnership or
other ownership interests of a Person (other than as a limited partner of such
Person) shall be deemed an Affiliate of such Person, (b) each director (or
comparable manager) of a Person shall be deemed to be an Affiliate of such
Person, and (c) each partnership in which a Person is a general partner shall be
deemed an Affiliate of such Person. Notwithstanding anything herein to the
contrary, in no event shall the Agent or any Lender be considered an "Affiliate"
of any Loan Party solely by virtue of having entered into any Loan Document.
"AGREEMENT" means the Credit Agreement to which this SCHEDULE 1.1 is
attached.
"AUTHORIZED PERSON" means any one of the individuals identified on
SCHEDULE A-2.
"BANKRUPTCY CODE" means (i) title 11 of the United States Code, and
(ii) any similar legislation in any relevant jurisdiction, in each case, as in
effect from time to time.
"BASE RATE OF INTEREST" means the rate of interest publicly
announced by the Reference Bank in New York, New York from time to time as its
reference rate, base rate or prime rate. The reference rate, base rate or prime
rate is determined from time to time by the Reference Bank as a means of pricing
some loans to its borrowers and neither is tied to any external rate of interest
or index nor necessarily reflects the lowest rate of interest actually charged
by the Reference Bank to any particular class or category of customers. Each
change in the Base Rate shall be effective from and including the date such
change is publicly announced as being effective.
"BASE RATE MARGIN" means 6.75 percentage points.
"BOARD OF DIRECTORS" means the board of directors (or comparable
managers) of Parent or any committee thereof duly authorized to act on behalf of
the board of directors (or comparable managers).
"BORROWER" and "BORROWERS" have the respective meanings specified
therefor in the preamble to the Agreement.
"BUSINESS DAY" means any day that is not a Saturday, Sunday, or
other day on which banks are authorized or required to close in the state of New
York, except that, if a determination of a Business Day shall relate to a LIBOR
Rate Loan, the term "Business Day" also shall exclude any day on which banks are
closed for dealings in Dollar deposits in the London interbank market.
"CANADIAN GUARANTY" means a Guaranty executed and delivered by the
Canadian Obligor in favor of Lender, in form and substance satisfactory to
Lender.
"CANADIAN OBLIGOR" means Atlantic Service Company Limited, an
Ontario corporation.
"CANADIAN SECURITY AGREEMENT" means a Security Agreement executed
and delivered by the Canadian Obligor in favor of Lender, in form and substance
satisfactory to Lender.
"CANADIAN SECURITY DOCUMENTS" means the Canadian Security Agreement,
the Quebec Security Documents, and such other instruments, agreements, and
documents governed by the laws of Canada or any political subdivision thereof,
as Lender may require in order to secure the obligations of the Canadian Obligor
under the Canadian Guaranty.
"CAPITAL EXPENDITURES" means, with respect to any Person for any
period, the aggregate of all expenditures by such Person and its Subsidiaries
during such period that are capital expenditures as determined in accordance
with GAAP, whether such expenditures are paid in cash or financed.
"CAPITAL LEASE OBLIGATION" means that portion of the obligations
under a Capital Lease that is required to be capitalized in accordance with
GAAP.
"CAPITAL LEASE" means a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP.
"CASH EQUIVALENTS" means (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States or issued by any agency
thereof and backed by the full faith and credit of the United States, in each
case maturing within 1 year from the date of acquisition thereof, (b) marketable
direct obligations issued by any state of the United States or any political
subdivision of any such state or any public instrumentality thereof maturing
within 1 year from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from either
Standard & Poor's Rating Group ("S&P") or Xxxxx'x Investors Service, Inc.
("Moody's"), (c) commercial paper maturing no more than 270 days from the date
of creation thereof and, at the time of acquisition, having a rating of at least
A-1 from S&P or at least P-1 from Moody's, (d) certificates of deposit or
bankers' acceptances maturing within 1 year from the date of acquisition thereof
issued by any bank organized under the laws of the United States or any state
thereof having at the date of acquisition thereof combined capital and surplus
of not less than $250,000,000, (e) Deposit Accounts maintained with (i) any bank
that satisfies the criteria described in clause (d) above, or (ii) any other
bank organized under the laws of the United States or any state thereof so long
as the amount maintained with any such other bank is less than or equal to
$100,000 and is insured by the Federal Deposit Insurance Corporation, (f)
Investments in money market funds substantially all of whose assets are invested
in the types of assets described in clauses (a) through (e) above.
"CFC" means a controlled foreign corporation (as that term is
defined in the IRC).
"CHANGE OF CONTROL" means that (a) Permitted Holders fail to
beneficially own, directly or indirectly, at least 25% of the Stock of WHX or
(b) a majority of the members of WHX's Board of Directors do not constitute
Continuing Directors or (c) WHX fails to own and control, directly or
indirectly, 100% of the Stock of Parent.
"CLOSING DATE" means the date of the refinancing of the Term Loan
hereunder.
"CLOSING DATE TRANSACTIONS" means, collectively, (a) the refinancing
of the Term Loan, (b) the making of the Working Capital Term Loan, (c) the
making of the Working Capital Advances to be made on the Closing Date, (d) the
making of the Term A Loan, (e) the issuance of the Working Capital Letters of
Credit to be issued on the Closing Date, (f) the repayment of the Indebtedness
owing to the Existing Lender and the portion of the Indebtedness owed to Lender
that is outstanding under the Original LSA and which is to be repaid on the
Closing Date, and the termination of the Existing Lender's credit facilities and
the amendment and restatement of the Original LSA pursuant to this Agreement,
and (g) the payment of all fees and expenses in connection with the foregoing.
"CODE" means the New York Uniform Commercial Code, as in effect from
time to time.
"COLLATERAL" means all assets and interests in assets and proceeds
thereof now owned or hereafter acquired by Parent or its Subsidiaries in or upon
which a Lien is granted under any of the Loan Documents.
"COLLATERAL ACCESS AGREEMENT" means a landlord waiver, bailee
letter, or acknowledgement agreement of any lessor, warehouseman, processor,
consignee, or other Person in possession of, having a Lien upon, or having
rights or interests in Parent's or its Subsidiaries' books and records,
Equipment, or Inventory, in each case, in form and substance satisfactory to
Agent.
"COLLECTIONS" means ALL cash, checks, notes, instruments, and other
items of payment (including insurance proceeds, proceeds of cash sales, rental
proceeds, and tax refunds).
"COMPLIANCE CERTIFICATE" means a certificate substantially in the
form of EXHIBIT C-1 delivered by the chief financial officer of Parent to Agent.
"CONTINUING DIRECTOR" means (a) any member of the Board of Directors
who was a director (or comparable manager) of WHX on the Closing Date, (b) any
individual who becomes a member of the Board of Directors after the Closing Date
if such individual was appointed or nominated for election to the Board of
Directors by a majority of the Continuing Directors, but excluding any such
individual originally proposed for election in opposition to the Board of
Directors in office at the Closing Date in an actual or threatened election
contest relating to the election of the directors (or comparable managers) of
WHX and whose initial assumption of office resulted from such contest or the
settlement thereof or (c) any individual who becomes a member of the Board of
Directors after the Closing Date if such individual was appointed or nominated
by Permitted Holder for or Permitted Holder voted in favor of such individual's
election to the Board of Directors.
"CONTROL AGREEMENT" means a control agreement, in form and substance
satisfactory to Lender, executed and delivered by Parent or one of its
Subsidiaries, Lender, Term A Agent, Working Capital Agent and the applicable
securities intermediary (with respect to a Securities Account) or bank (with
respect to a Deposit Account).
"COPYRIGHT SECURITY AGREEMENT" has the meaning specified therefor in
the Security Agreement.
"DAILY BALANCE" means, as of any date of determination and with
respect to any Obligation, the amount of such Obligation owed at the end of such
day.
"DEFAULT" means an event, condition, or default that, with the
giving of notice, the passage of time, or both, would be an Event of Default.
"DEPOSIT ACCOUNT" means any deposit account (as that term is defined
in the Code).
"DESIGNATED ACCOUNT" means the Deposit Account of Administrative
Borrower identified on SCHEDULE D-1.
"DESIGNATED ACCOUNT BANK" has the meaning specified therefor in
SCHEDULE D-1.
"DOLLARS" or "$" means United States dollars.
"DOMESTIC SUBSIDIARY" means a Subsidiary organized under the laws of
the United States or any jurisdiction thereof.
"EBITDA" has the meaning ascribed to such term in the Senior
Financing Agreements.
"EMPLOYEE PLAN" means an employee benefit plan (other than a
Multiemployer Plan) covered by Title IV of ERISA and maintained (or that was
maintained at any time during the six (6) calendar years preceding the date of
any borrowing hereunder) for employees of any Loan Party or any of its ERISA
Affiliates.
"ENVIRONMENTAL ACTIONS" means any written complaint, summons,
citation, written notice, directive, order, claim, litigation, investigation,
judicial or administrative proceeding, judgment, letter, or other communication
from any Governmental Authority, or any third party involving violations of
Environmental Laws or releases of Hazardous Materials from (a) any assets,
properties, or businesses of any Loan Party, any Subsidiary of a Loan Party, or
any of their predecessors in interest, (b) from adjoining properties or
businesses, or (c) from or onto any facilities which received Hazardous
Materials generated by any Loan Party, any Subsidiary of a Loan Party, or any of
their predecessors in interest.
"ENVIRONMENTAL LAW" means any applicable federal, state, provincial,
foreign or local statute, law, rule, regulation, ordinance, code, binding and
enforceable guideline, binding and enforceable written policy, or rule of common
law now or hereafter in effect and in each case as amended, or any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, in each case, to the extent binding on any
Loan Party or any Subsidiary of a Loan Party, relating to the environment, the
effect of the environment on employee health, or Hazardous Materials, in each
case as amended from time to time.
"ENVIRONMENTAL LIABILITIES" means all liabilities, monetary
obligations, losses, damages, punitive damages, consequential damages, treble
damages, costs and expenses (including all reasonable fees, disbursements and
expenses of counsel, experts, or consultants, and costs of investigation and
feasibility studies), fines, penalties, sanctions, and interest incurred as a
result of any claim or demand, or Remedial Action required, by any Governmental
Authority or any third party, and which relate to any Environmental Action.
"ENVIRONMENTAL LIEN" means any Lien in favor of any Governmental
Authority for Environmental Liabilities.
"EQUIPMENT" means equipment (as that term is defined in the Code).
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute thereto or the non-U.S. equivalent
thereof.
"ERISA AFFILIATE" means (a) any Person subject to ERISA whose
employees are treated as employed by the same employer as the employees of a
Loan Party or a Subsidiary of a Loan Party under IRC Section 414(b), (b) any
trade or business subject to ERISA whose employees are treated as employed by
the same employer as the employees of a Loan Party or a Subsidiary of a Loan
Party under IRC Section 414(c), (c) solely for purposes of Section 302 of ERISA
and Section 412 of the IRC, any organization subject to ERISA that is a member
of an affiliated service group of which a Loan Party or a Subsidiary of a Loan
Party is a member under IRC Section 414(m), or (d) solely for purposes of
Section 302 of ERISA and Section 412 of the IRC, any Person subject to ERISA
that is a party to an arrangement with a Loan Party or a Subsidiary of a Loan
Party and whose employees are aggregated with the employees of a Loan Party or a
Subsidiary of a Loan Party under IRC Section 414(o), or the non-U.S. equivalent
thereof.
"EVENT OF DEFAULT" has the meaning specified therefor in SECTION 7.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as in
effect from time to time.
"EXISTING LENDER" means Bank of America, N.A. and each of the
lenders party to the credit facilities agented by Bank of America, N.A.
"EXTRAORDINARY RECEIPTS" means any Net Cash Proceeds received by
Parent or any of its Subsidiaries not in the ordinary course of business,
including as a result of, without duplication, (a) foreign, United States, state
or local tax refunds (other than amounts automatically applied to future tax
payments or representing overpayments of estimated taxes for the current or
immediately preceding tax year), (b) pension plan reversions, (c) proceeds of
insurance (including key man life insurance and business interruption insurance,
but excluding any casualty insurance), (d) judgments, proceeds of settlements or
other consideration of any kind in connection with any cause of action, (e)
indemnity payments, and (f) any purchase price adjustment received in connection
with any purchase agreement.
"FUNDING LOSSES" has the meaning specified therefor in SECTION
2.10(B)(II).
"FUNDS FLOW AGREEMENT" means a funds flow agreement, in form and
substance reasonably satisfactory to Lender, executed and delivered by Loan
Parties, Lender, Term A Agent, and Working Capital Agent.
"GAAP" means generally accepted accounting principles as in effect
from time to time in the United States, consistently applied.
"GOVERNING DOCUMENTS" means, with respect to any Person, the
certificate or articles of incorporation, by-laws, or other organizational
documents of such Person.
"GOVERNMENTAL AUTHORITY" means any federal, state, local,
supra-national or other governmental or administrative body, instrumentality,
board, department, or agency or any court, tribunal, administrative hearing
body, arbitration panel, commission, or other similar dispute-resolving panel or
body.
"GUARANTORS" means (a) Parent, and (b) each Subsidiary of Parent
(other than Borrowers, or any other Subsidiary that is a CFC and that is not
required to guaranty the Obligations pursuant to Section 5.16), and "Guarantor"
means any one of them.
"GUARANTY" means that certain general continuing guaranty executed
and delivered by each Guarantor in favor of Lender, for the benefit of any
Lender, in form and substance satisfactory to Lender.
"HAZARDOUS MATERIALS" means (a) substances that are defined or
listed in, or otherwise classified pursuant to, any applicable laws or
regulations as "hazardous substances," "hazardous materials," "hazardous
wastes," "toxic substances," or any other formulation intended to define, list,
or classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or "EP
toxicity", (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.
"HEDGE AGREEMENT" means any and all agreements, or documents now
existing or hereafter entered into by Parent or any of its Subsidiaries that
provide for an interest rate, credit, commodity or equity swap, cap, floor,
collar, forward foreign exchange transaction, currency swap, cross currency rate
swap, currency option, or any combination of, or option with respect to, these
or similar transactions, for the purpose of hedging Parent's or any of its
Subsidiaries' exposure to fluctuations in interest or exchange rates, loan,
credit exchange, security, or currency valuations or commodity prices.
"INDEBTEDNESS" means (a) all obligations for borrowed money, (b) all
obligations evidenced by bonds, debentures, notes, or other similar instruments
and all reimbursement or other obligations in respect of letters of credit,
bankers acceptances, interest rate swaps, or other financial products, (c) all
obligations as a lessee under Capital Leases, (d) all obligations or liabilities
of others secured by a Lien on any asset of a Person or its Subsidiaries,
irrespective of whether such obligation or liability is assumed, (e) all
obligations to pay the deferred purchase price of assets (other than trade
payables incurred in the ordinary course of business, repayable in accordance
with customary trade practices), (f) all obligations owing under Hedge
Agreements, and (g) any obligation guaranteeing or intended to guarantee
(whether directly or indirectly guaranteed, endorsed, co-made, discounted, or
sold with recourse) any obligation of any other Person that constitutes
Indebtedness under any of clauses (a) through (f) above.
"INDEMNIFIED LIABILITIES" has the meaning specified therefor in
SECTION 10.3.
"INDEMNIFIED PERSON" has the meaning specified therefor in SECTION
10.3.
"INSOLVENCY PROCEEDING" means any proceeding commenced by or against
any Person under any provision of the Bankruptcy Code or under any other state
or federal bankruptcy or insolvency law, assignments for the benefit of
creditors, formal or informal moratoria, compositions, extensions generally with
creditors, or proceedings seeking reorganization, arrangement, or other similar
relief.
"INTERCREDITOR AGREEMENT" means an intercreditor agreement executed
and delivered by Lender, Term A Agent and Working Capital Agent, and
acknowledged and consented to by each Borrower and each Guarantor, as amended,
supplemented, restated or otherwise modified from time to time.
"INTEREST EXPENSE" means, for any period, the aggregate of the
interest expense of Parent and its Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP.
"INVENTORY" means inventory (as that term is defined in the Code).
"INVESTMENT" means, with respect to any Person, any investment by
such Person in any other Person (including Affiliates) in the form of loans,
guarantees, advances, capital contributions (excluding (a) commission, travel,
and similar advances to officers and employees of such Person made in the
ordinary course of business, and (b) BONA FIDE Accounts arising in the ordinary
course of business consistent with past practice), or acquisitions of
Indebtedness, Stock, or all or substantially all of the assets of such other
Person (or of any division or business line of such other Person), and any other
items that are or would be classified as investments on a balance sheet prepared
in accordance with GAAP.
"IRC" means the Internal Revenue Code of 1986, as in effect from
time to time.
"JUDGMENT CONVERSION DATE" has the meaning specified therefor in
SECTION 17.14.
"JUDGMENT CURRENCY" has the meaning specified therefor in SECTION
17.14.
"KASCO" means Kasco Corporation, a Delaware corporation.
"KASCO NON-RECURRING EXPENSES" means, with respect to any period
specified on SCHEDULE K-1, the lesser of (a) the actual amount expended by the
Parent and its Subsidiaries in respect of the items specified on SCHEDULE K-1
during such period, and (b) the amount specified on SCHEDULE K-1 during such
period.
"LENDER" and has the meaning set forth in the preamble to the
Agreement.
"LENDER'S ACCOUNT" means the Deposit Account of Lender identified on
SCHEDULE A-1.
"LENDER EXPENSES" means all (a) costs or expenses (including taxes,
and insurance premiums) required to be paid by a Loan Party or its Subsidiaries
under any of the Loan Documents that are paid, advanced, or incurred by any one
or more members of the Lender Group, (b) fees or charges paid or incurred by
Agent in connection with any Lender's transactions with Loan Parties or their
Subsidiaries, including, fees or charges for photocopying, notarization,
couriers and messengers, telecommunication, public record searches (including
tax lien, judgment lien, litigation, and UCC searches and including searches
with the patent and trademark office, the copyright office, or the department of
motor vehicles), filing, recording, publication, appraisal (including periodic
collateral appraisals or business valuations to the extent of the fees and
charges (and up to the amount of any limitation) contained in the Agreement),
real estate surveys, real estate title policies and endorsements, and
environmental audits, (c) costs and expenses incurred by any Lender in the
disbursement of funds to (or on behalf of) Borrowers (by wire transfer or
otherwise), (d) charges paid or incurred by any Lender resulting from the
dishonor of checks, (e) reasonable costs and expenses paid or incurred by any
Lender to correct any default or enforce any provision of the Loan Documents, or
in gaining possession of, maintaining, handling, preserving, storing, shipping,
selling, preparing for sale, or advertising to sell the Collateral, or any
portion thereof, irrespective of whether a sale is consummated, (f) audit fees
and expenses (including travel, meals, and lodging) of Lender related to any
inspections or audits to the extent of the fees and charges (and up to the
amount of any limitation) contained in the Agreement, (g) reasonable costs and
expenses of third party claims or any other suit paid or incurred by any one or
more Lenders in enforcing or defending the Loan Documents or in connection with
the transactions contemplated by the Loan Documents or the Lender's relationship
with any Loan Party or any Subsidiary of a Loan Party, (h) Agent's and each
Lender's reasonable costs and expenses (including attorneys fees) incurred in
advising, structuring, drafting, reviewing, administering (including travel,
meals, and lodging), syndicating (including rating the Term Loan), or amending
the Loan Documents, and (i) Agent's and each Lender's reasonable costs and
expenses (including attorneys, accountants, consultants, and other advisors fees
and expenses) incurred in terminating, enforcing (including attorneys,
accountants, consultants, and other advisors fees and expenses incurred in
connection with a "workout," a "restructuring," or an Insolvency Proceeding
concerning any Loan Party or any Subsidiary of a Loan Party or in exercising
rights or remedies under the Loan Documents), or defending the Loan Documents,
irrespective of whether suit is brought, or in taking any Remedial Action
concerning the Collateral.
"LENDER-RELATED PERSON" means, with respect to any Lender, such
Lender, together with such Lender's Affiliates, Related Funds, officers,
directors, employees, attorneys, and agents.
"LEVERAGE RATIO" has the meaning ascribed to such term in the Senior
Financing Agreements.
"LIEN" means any mortgage, deed of trust, pledge, hypothecation,
assignment, charge, deposit arrangement, encumbrance, easement, lien (statutory
or other), security interest, or other security arrangement and any other
preference, priority, or preferential arrangement of any kind or nature
whatsoever, including any conditional sale contract or other title retention
agreement, the interest of a lessor under a Capital Lease and any synthetic or
other financing lease having substantially the same economic effect as any of
the foregoing.
"LIENS" means the Liens granted by any Loan Party to any Lender
under the Loan Documents.
"LOAN ACCOUNT" has the meaning specified therefor in SECTION 2.8.
"LOAN DOCUMENTS" means this Agreement, the Canadian Guaranty, the
Canadian Security Documents, the Cash Management Agreements, the Collateral
Access Agreements, the Control Agreements, the Copyright Security Agreement, the
Guaranty, the Intercreditor and Subordination Agreement, the Mortgages, the
Patent Security Agreement, the Security Agreement, the Trademark Security
Agreement, any note or notes executed by a Borrower in connection with this
Agreement and payable to a Lender, and any other agreement entered into, now or
in the future, by any Loan Party or any of their Subsidiaries, and any Lender in
connection with this Agreement.
"LOAN PARTY" means any Borrower or any Guarantor.
"MATERIAL ADVERSE CHANGE" means (a) a material adverse change in the
business, prospects, operations, results of operations, assets, liabilities or
condition (financial or otherwise) of Borrowers and their Subsidiaries, taken as
a whole, (b) a material impairment of a Borrower's or any of its Subsidiaries'
ability to perform its obligations under the Loan Documents to which it is a
party or of Lender's ability to enforce the Obligations or realize upon the
Collateral, or (c) a material impairment of the enforceability or priority of
the Liens with respect to the Collateral as a result of an action or failure to
act on the part of a Borrower or a Subsidiary of a Borrower.
"MATERIAL CONTRACT" means, with respect to any Person, (i) each
contract or agreement to which such Person or any of its Subsidiaries is a party
involving aggregate consideration payable to or by such Person or such
Subsidiary of $250,000 or more (other than purchase orders in the ordinary
course of the business of such Person or such Subsidiary and other than
contracts that by their terms may be terminated by such Person or Subsidiary in
the ordinary course of its business upon less than 60 days notice without
penalty or premium), (ii) the Related Transaction Documents, and (iii) all other
contracts or agreements material to the business, operations, condition
(financial or otherwise), performance, prospects or properties of such Person or
such Subsidiary.
"MATURITY DATE" has the meaning specified therefor in SECTION 3.2.
"XXXXX'X" has the meaning specified therefor in the definition of
Cash Equivalents.
"MORTGAGE POLICY" has the meaning specified therefor in SCHEDULE
3.1(Y).
"MORTGAGES" means, individually and collectively, one or more
mortgages, deeds of trust, or deeds to secure debt, executed and delivered by a
Loan Party or a Subsidiary of a Loan Party in favor of Lender, in form and
substance satisfactory to Lender, that encumber the Real Property Collateral.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which any Loan Party or any of its ERISA
Affiliates has contributed to, or has been obligated to contribute, at any time
during the preceding six (6) years.
"NET CASH PROCEEDS" means:
(a) with respect to any sale or disposition by a Loan Party or
a Subsidiary of a Loan Party of property or assets, the amount of cash proceeds
received (directly or indirectly) from time to time (whether as initial
consideration or through the payment of deferred consideration) by or on behalf
of a Loan Party or a Subsidiary of a Loan Party, in connection therewith after
deducting therefrom only (i) the amount of any Indebtedness secured by any
Permitted Lien on any asset (other than (A) Indebtedness owing to any Lender
under this Agreement or the other Loan Documents and (B) Indebtedness assumed by
the purchaser of such asset) which is required to be, and is, repaid in
connection with such sale or disposition, (ii) reasonable fees, commissions, and
expenses related thereto and required to be paid by a Loan Party or such
Subsidiary of a Loan Party in connection with such sale or disposition and (iii)
taxes paid or payable to any taxing authorities by a Loan Party or such
Subsidiary of a Loan Party in connection with such sale or disposition, in each
case to the extent, but only to the extent, that the amounts so deducted are, at
the time of receipt of such cash, actually paid or payable to a Person that is
not an Affiliate of a Loan Party or a Subsidiary of a Loan Party, and are
properly attributable to such transaction; and
(b) with respect to the issuance or incurrence of any
Indebtedness by a Loan Party or a Subsidiary of a Loan Party, or the issuance by
a Loan Party or a Subsidiary of a Loan Party of any shares of its Stock, the
aggregate amount of cash received (directly or indirectly) from time to time
(whether as initial consideration or through the payment or disposition of
deferred consideration) by or on behalf of a Loan Party or such Subsidiary in
connection with such issuance or incurrence, after deducting therefrom only (i)
reasonable fees, commissions, and expenses related thereto and required to be
paid by a Loan Party or such Subsidiary in connection with such issuance or
incurrence, (ii) taxes paid or payable to any taxing authorities by a Loan Party
or such Subsidiary in connection with such issuance or incurrence, in each case
to the extent, but only to the extent, that the amounts so deducted are, at the
time of receipt of such cash, actually paid or payable to a Person that is not
an Affiliate of a Loan Party or Subsidiary of a Loan Party, and are properly
attributable to such transaction.
"NEW LENDING OFFICE" has the meaning specified therefor in SECTION
16(D).
"OBLIGATIONS" means all loans (including the Term Loan), Advances,
debts, principal, interest (including any interest that accrues after the
commencement of an Insolvency Proceeding regardless of whether allowed or
allowable in whole or in part as a claim in any such Insolvency Proceeding),
premiums, liabilities (including all amounts charged to Borrowers' Loan Account
pursuant to the Agreement), obligations (including indemnification obligations),
fees, charges, costs, Lender Expenses (including any fees or expenses that
accrue after the commencement of an Insolvency Proceeding, regardless of whether
allowed or allowable in whole or in part as a claim in any such Insolvency
Proceeding), lease payments, guaranties, covenants, and duties of any kind and
description owing by Loan Parties to any Lender pursuant to or evidenced by the
Loan Documents and irrespective of whether for the payment of money, whether
direct or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, and including all interest not paid when due and all other
expenses or other amounts that Loan Parties are required to pay or reimburse by
the Loan Documents or by law or otherwise in connection with the Loan Documents.
Any reference in the Agreement or in the Loan Documents to the Obligations shall
include all or any portion thereof and any extensions, modifications, renewals,
or alterations thereof, both prior and subsequent to any Insolvency Proceeding.
"ORIGINAL LSA" has the meaning specified therefor in the Recitals to
this Agreement.
"OTHER SUBORDINATED INDEBTEDNESS" means any Indebtedness (i) which
is expressly subordinated in right of payment to all Indebtedness evidenced by
the Working Capital Indebtedness and the Term A Indebtedness and subordinated
to, or pari passu with, the Indebtedness evidenced by this Agreement, (ii) which
does not mature prior to the date that is six-months following the stated
maturity date for each of the foregoing Indebtedness, whichever is latest, (iii)
which does not contain a cash interest payment requirement and (iv) which has
terms and conditions reasonably acceptable to Lender.
"OTHER TAXES" has the meaning specified therefor in SECTION 16(B).
"PARENT" has the meaning specified therefor in the preamble to the
Agreement.
"PARTICIPANT REGISTER" has the meaning specified therefor in SECTION
13.1(F).
"PATENT SECURITY AGREEMENT" has the meaning specified therefor in
the Security Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"PERMITTED DISCRETION" means a determination made in the exercise of
reasonable (from the perspective of a secured lender) business judgment.
"PERMITTED DISPOSITIONS" means (a) sales or other dispositions of
Equipment that is substantially worn, damaged, or obsolete in the ordinary
course of business; PROVIDED that the Net Cash Proceeds from such sales or other
dispositions do not exceed $100,000 in the aggregate during any fiscal year, and
such Equipment is sold (or otherwise disposed of) for fair market value, (b)
sales of Inventory to buyers in the ordinary course of business, (c) the use or
transfer of money or Cash Equivalents in a manner that is not prohibited by the
terms of the Agreement or the other Loan Documents, and (d) the licensing, on a
non-exclusive basis, of patents, trademarks, copyrights, and other intellectual
property rights in the ordinary course of business.
"PERMITTED HOLDER" means Steel Partners II, L.P. and its
Affiliates.
"PERMITTED INVESTMENTS" means (a) Investments in cash and Cash
Equivalents, (b) Investments in negotiable instruments for collection, (c)
advances made in connection with purchases of goods or services in the ordinary
course of business, and (d) Investments received in settlement of amounts due to
a Loan Party or any Subsidiary of a Loan Party effected in the ordinary course
of business or owing to a Loan Party or any Subsidiary of a Loan Party as a
result of Insolvency Proceedings involving an Account Debtor or upon the
foreclosure or enforcement of any Lien in favor of a Loan Party or any
Subsidiary of a Loan Party.
"PERMITTED KASCO SALE TRANSACTION" means the sale of all of the
Stock or substantially all of the assets of Kasco and its Subsidiaries subject
to satisfaction of the conditions set forth in the Permitted Kasco Sale Letter.
"PERMITTED KASCO SALE LETTER" means that certain side letter between
Borrowers and Senior Agents, in form and substance satisfactory to Senior
Agents, pertaining to the sale of all of the Stock or substantially all of the
assets of Kasco and its Subsidiaries.
"PERMITTED LIENS" means (a) Liens held by Lender to secure the
Obligations (provided that such Liens are subject to the provisions of the
Subordination Agreement), (b) Liens for unpaid taxes, assessments, or other
governmental charges or levies that either (i) are not yet delinquent, or (ii)
do not have priority over the Liens and the underlying taxes, assessments, or
charges or levies are the subject of Permitted Protests, (c) judgment Liens that
do not constitute an Event of Default under SECTION 7.7 of the Agreement, (d)
Liens set forth on SCHEDULE P-2, provided that any such Lien only secures the
Indebtedness that it secures on the Closing Date and any Refinancing
Indebtedness in respect thereof, (e) the interests of lessors under operating
leases, (f) purchase money Liens or the interests of lessors under Capital
Leases to the extent that such Liens or interests secure Permitted Purchase
Money Indebtedness and so long as (i) such Lien attaches only to the asset
purchased or acquired and the proceeds thereof, and (ii) such Lien only secures
the Indebtedness that was incurred to acquire the asset purchased or acquired or
any Refinancing Indebtedness in respect thereof, (g) Liens arising by operation
of law in favor of warehousemen, landlords, carriers, mechanics, materialmen,
laborers, or suppliers, incurred in the ordinary course of business and not in
connection with the borrowing of money, and which Liens either (i) are for sums
not yet delinquent, or (ii) are the subject of Permitted Protests, (h) Liens on
amounts deposited in connection with obtaining worker's compensation or other
unemployment insurance, (i) Liens on amounts deposited in connection with the
making or entering into of bids, tenders, or leases in the ordinary course of
business and not in connection with the borrowing of money, (j) Liens on amounts
deposited as security for surety or appeal bonds in connection with obtaining
such bonds in the ordinary course of business, (k) (i) with respect to any Real
Property Collateral, any encumbrance or restriction contained in Schedule B of
the title insurance policies for such Real Property which have been approved by
Lenders, shown on the surveys listed on SCHEDULE P-3, encumbrances,
restrictions, easements, rights of way, and zoning restrictions that do not
materially interfere with or impair the use or operation thereof, and (ii) with
respect to all other Real Property, encumbrances, restrictions, easements,
rights of way, and zoning restrictions that do not materially interfere with or
impair the use or operation thereof, (l) Liens held by Working Capital Agent to
secure the Working Capital Indebtedness, and (m) Liens held by Term A Agent to
secure the Term A Indebtedness. For the avoidance of doubt and notwithstanding
anything else to the contrary contained herein, under no circumstances shall
Permitted Liens include any Liens imposed under the IRC or ERISA, or otherwise
that secures any liability or obligation with respect to any Employee Plan.
"PERMITTED MERGER" means the merger, effective as of April 24, 2007,
of BZ Acquisition Corp., a Delaware corporation and an affiliate of Steel
Partners II, L.P. ("BZ"), with and into Bairnco with Bairnco continuing as the
surviving entity, pursuant to that certain Agreement and Plan of Merger, dated
as of February 23, 2007, by and among Steel Partners II, L.P., BZ and Baimco
(the "BZ MERGER AGREEMENT"), and as assigned by Steel Partners II, L.P. to WHX
pursuant to the Stock Purchase Agreement, dated as of April 12, 2007, by and
between Steel Partners II, L.P. and WHX.
"PERMITTED PRIORITY LIENS" means any Permitted Lien that has (and is
permitted to have) priority over the Liens in favor of the Lender pursuant to
any applicable law or agreement.
"PERMITTED PROTEST" means the right of Parent or any of its
Subsidiaries to protest any Lien (other than any Lien that secures the
Obligations), taxes (other than payroll taxes or taxes that are the subject of a
United States federal tax lien), or rental payment, provided that (a) a reserve
with respect to such obligation is established on Parent's or any of its
Subsidiaries' books and records in such amount as is required under GAAP, (b)
any such protest is instituted promptly and prosecuted diligently by Parent or
any of its Subsidiaries, as applicable, in good faith, and (c) Agent is
satisfied that, while any such protest is pending, there will be no impairment
of the enforceability, validity, or priority of any of the Agent's Liens.
"PERMITTED PURCHASE MONEY INDEBTEDNESS" means, as of any date of
determination, Purchase Money Indebtedness incurred after the Closing Date in an
aggregate principal amount outstanding at any one time not in excess of
$1,000,000.
"PERSON" means natural persons, corporations, limited liability
companies, limited partnerships, general partnerships, limited liability
partnerships, joint ventures, trusts, land trusts, business trusts, or other
organizations, irrespective of whether they are legal entities, and governments
and agencies and political subdivisions thereof.
"PROTECTIVE ADVANCES" has the meaning specified therefor in SECTION
2.2(C)(I).
"PURCHASE MONEY INDEBTEDNESS" means Indebtedness (other than the
Obligations, but including Capital Lease Obligations), incurred at the time of,
or within 20 days after, the acquisition of any fixed assets for the purpose of
financing all or any part of the acquisition cost thereof.
"QUALIFIED CASH" means, as of any date of determination, the amount
of unrestricted cash and Cash Equivalents of Borrowers and their Subsidiaries
that is in Deposit Accounts or in Securities Accounts, or any combination
thereof, and which such Deposit Account or Securities Account is the subject of
a Control Agreement and is maintained by a branch office of the bank or
securities intermediary located within the United States.
"QUEBEC SECURITY DOCUMENTS" means (i) a Deed of Hypothec and Issue
of Bonds in favour of Lender, as fonde de pouvoir under Article 2692 of the
Civil Code of Quebec, to be executed before a notary of the Province of Quebec,
(ii) a bond issued by a Canadian Obligor pursuant to such Deed of Hypothec and
Issue of Bonds, and (iii) a pledge agreement to be granted by a Canadian Obligor
in respect of any bond issued under such Deed of Hypothec and Issue of Bonds.
"RATING AGENCIES" has the meaning specified therefor in SECTION
2.14.
"REAL PROPERTY" means any estates or interests in real property now
owned or hereafter acquired by any Loan Party or a Subsidiary of any Loan Party
and the improvements thereto.
"REAL PROPERTY COLLATERAL" means the Real Property identified on
SCHEDULE R-1 and any Real Property hereafter acquired by a Loan Party or any
Subsidiary of a Loan Party.
"RECORD" means information that is inscribed on a tangible medium or
that is stored in an electronic or other medium and is retrievable in
perceivable form.
"REFERENCE BANK" means JPMorgan Chase Bank, its successors or any
other commercial bank designated by Lender to the Administrative Borrower from
time to time.
"REFINANCING INDEBTEDNESS" means refinancings, renewals, or
extensions of Indebtedness so long as: (a) such refinancings, renewals, or
extensions do not result in an increase in the principal amount of the
Indebtedness so refinanced, renewed, or extended, (b) such refinancings,
renewals, or extensions do not result in an increase in the cash interest rate
with respect to the Indebtedness so refinanced, renewed, or extended, (c) such
refinancings, renewals, or extensions do not result in a shortening of the
average weighted maturity of the Indebtedness so refinanced, renewed, or
extended, nor are they on terms or conditions that, taken as a whole, are
materially more burdensome or restrictive to Loan Parties, (d) if the
Indebtedness that is refinanced, renewed, or extended was subordinated in right
of payment to the Obligations, then the terms and conditions of the refinancing,
renewal, or extension must include subordination terms and conditions that are
at least as favorable to Lender as those that were applicable to the refinanced,
renewed, or extended Indebtedness, and (e) the Indebtedness that is refinanced,
renewed, or extended is not recourse to any Person that is liable on account of
the Obligations other than those Persons which were obligated with respect to
the Indebtedness that was refinanced, renewed, or extended.
"RELATED FUND" means a fund, money market account, investment
account or other account managed by a Lender or an Affiliate of such Lender or
its investment manager.
"RELATED TRANSACTION DOCUMENTS" means, collectively, the Working
Capital Documents and the Term A Debt Documents.
"REMEDIAL ACTION" means all actions taken to (a) clean up, remove,
remediate, contain, treat, monitor, assess, evaluate, or in any way address
Hazardous Materials in the indoor or outdoor environment, (b) prevent or
minimize a release or threatened release of Hazardous Materials so they do not
migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment, (c) restore or reclaim natural resources or the
environment, (d) perform any pre-remedial studies, investigations, or
post-remedial operation and maintenance activities, or (e) conduct any other
actions with respect to Hazardous Materials authorized by Environmental Laws.
"REPLACEMENT LENDER" has the meaning specified therefor in SECTION
14.2(A).
"REPORT" has the meaning specified therefor in SECTION 15.16.
"REPORTABLE EVENT" means an event in Section 4043 of ERISA (other
than an event not subject to the provision for 30-day notice to the PBGC under
the regulations promulgated under such Section).
"REQUIRED LENDERS" means, at any time, Lenders whose aggregate pro
rata share of the Obligations exceed 50%.
"SEC" means the United States Securities and Exchange Commission and
any successor thereto.
"SECURITIES ACCOUNT" means a securities account (as that term is
defined in the Code).
"SECURITIZATION" has the meaning specified therefor in SECTION 2.14.
"SECURITY AGREEMENT" means a security agreement, in form and
substance satisfactory to Lender, executed and delivered by Borrowers and
Guarantors to Lender, as Secured Party.
"SENIOR FINANCING AGREEMENTS" has the meaning set forth in the
Recitals to this Agreement.
"SOLVENT" means, with respect to any Person on a particular date,
that, at fair valuations, the sum of such Person's assets is greater than all of
such Person's debts.
"SPOT RATE" means the prevailing spot rate of exchange of the Lender
(or, if such rate is not available from the Lender, the bank at which the Lender
maintains the Lender's Account) for the purpose of conversion of one currency to
another, at or around 1:00 p.m. (New York City time), on the date on which any
such conversion of currency is to be made under this Agreement.
"S&P" has the meaning specified therefor in the definition of Cash
Equivalents.
"STOCK" means all shares, options, warrants, interests,
participations, or other equivalents (regardless of how designated) of or in a
Person, whether voting or nonvoting, including common stock, preferred stock, or
any other "equity security" (as such term is defined in Rule 3a11-1 of the
General Rules and Regulations promulgated by the SEC under the Exchange Act).
"SUBORDINATION AGREEMENT" means an Intercreditor and Subordination
Agreement executed and delivered by Lender, Term A Agent and Working Capital
Agent, and acknowledged and consented to by each Borrower and each Guarantor, as
amended, supplemented, restated or otherwise modified from time to time.
"SUBSIDIARY" of a Person means a corporation, partnership, limited
liability company, or other entity in which that Person directly or indirectly
owns or controls the shares of Stock having ordinary voting power to elect a
majority of the board of directors (or appoint other comparable managers) of
such corporation, partnership, limited liability company, or other entity.
"TAX PARTY" has the meaning specified therefore in SECTION 4.28.
"TAXES" has the meaning specified therefor in SECTION 16(A).
"TERM A AGENT" means the "Agent" as such term is defined in the Term
A Credit Agreement and any Person acting in a similar capacity under any
amendment, restatement, supplement, replacement or refinancing thereof.
"TERM A CREDIT AGREEMENT" means that certain Credit Agreement, dated
as of even date herewith, by and among Parent, Borrowers, Term A Agent, and the
lenders from time to time party thereto, as such is amended, modified,
supplemented, restated, replaced or refinanced from time to time in accordance
with the terms thereof, the terms of this Agreement, and the Intercreditor
Agreement.
"TERM A DEBT DOCUMENTS" means the ["Loan Documents"] as such term is
defined in the Term A Credit Agreement and any documents, instruments and
agreements entered into in connection with any amendment, supplement,
restatement, replacement or refinancing thereof, as amended, modified,
supplemented or restated from time to time in accordance with the terms thereof,
the terms of the Agreement, and the Intercreditor Agreement.
"TERM A INDEBTEDNESS" means the Indebtedness incurred by Parent
under the Term A Debt Documents in an aggregate principal amount of not less
than $40,000,00 plus the amount of interest accrued thereon that is
paid-in-kind, minus the aggregate amount of all repayments and prepayments of
the principal of the obligations under the Term A Debt Credit Agreement (other
than repayments or prepayments of such term loan obligations in connection with
a Refinancing thereof).
"TERM A LOAN" has the meaning set forth in the Recitals to this
Agreement.
"TERM LOAN" has the meaning specified therefor in SECTION 2.1.
"TERM LOAN AMOUNT" means $31,814,319.56..
"TERMINATION EVENT" means (i) a Reportable Event with respect to any
Employee Plan, with respect to which the reporting requirement has not been
waived, (ii) any event that causes any Loan Party or any of its ERISA Affiliates
directly to incur liability under Section 409, 502(i), 502(l), 515, 4062, 4063,
4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4971 or 4975 of the IRC,
(iii) the filing of a notice of intent to terminate an Employee Plan (other than
in connection with a standard termination) or the treatment of an Employee Plan
amendment as a termination under Section 4041 of ERISA, (iv) the institution of
proceedings by the PBGC to terminate an Employee Plan, or (v) any other event or
condition which might reasonably constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Employee Plan.
"TRADEMARK SECURITY AGREEMENT" has the meaning specified therefor in
the Security Agreement.
"TRANSFEREE" has the meaning specified therefor in SECTION 16(A).
"UNITED STATES" means the United States of America.
"VOIDABLE TRANSFER" has the meaning specified therefor in SECTION
17.7.
"WHX" means WHX Corporation, a Delaware Corporation.
"WORKING CAPITAL AGENT" means Xxxxx Fargo Foothill, Inc., a
California corporation, in its capacity as agent for the Working Capital Lenders
under the Working Capital Credit Agreement.
"WORKING CAPITAL AVAILABILITY" means "Availability" as such term in
defined in the Working Capital Credit Agreement.
"WORKING CAPITAL CREDIT AGREEMENT" means that certain Credit
Agreement dated as of even date herewith by and among the Loan Parties, the
Working Capital Lenders, and the Working Capital Agent as such is amended,
modified, supplemented, restated, refinanced, renewed or replaced from time to
time in accordance with the terms thereof and the terms of this Agreement and
the Intercreditor Agreement.
"WORKING CAPITAL DOCUMENTS" means the Working Capital Credit
Agreement and each other agreement, instrument or document executed or delivered
pursuant to or in connection with the Working Capital Credit Agreement, as such
documents are amended, modified, supplemented, or restated from time to time in
accordance with the terms of this Agreement and the Intercreditor Agreement.
"WORKING CAPITAL INDEBTEDNESS" means the Indebtedness incurred by
the Loan Parties under the Working Capital Credit Agreement.
"WORKING CAPITAL LENDERS" means the lenders from time to time party
to the Working Capital Credit Agreement.
SCHEDULE 3.1
The obligation of the Lender to refinance the Term Loan is subject to the
fulfillment, to the satisfaction of Lender, of each of the following conditions
precedent:
(a) the Closing Date shall occur on or before [July __, 2007];
(b) Lender shall have received a letter duly executed by each
Borrower and each Guarantor authorizing Agent to file appropriate financing
statements in such office or offices as may be necessary or, in the opinion of
Lender, desirable to perfect the security interests to be created by the Loan
Documents;
(c) Lender shall have received evidence that appropriate financing
statements have been duly filed in such office or offices as may be necessary
or, in the opinion of Lender, desirable to perfect the Liens in and to the
Collateral, and Lender shall have received searches reflecting the filing of all
such financing statements;
(d) Lender shall have received each of the following documents, in
form and substance satisfactory to Lender, duly executed, and each such document
shall be in full force and effect:
(i) the Copyright Security Agreement,
(ii) a disbursement letter executed and delivered by
Borrowers to Lender, Term A Agent and Working Capital Agent regarding the
extensions of credit and the repayment of the amounts outstanding under the
Original LSA to be made on the Closing Date, the form and substance of which is
satisfactory to Lender,
(iii) the Guaranty,
(iv) the Intercreditor and Subordination Agreement,
(v) the Mortgages,
(vi) the Patent Security Agreement,
(vii) the Canadian Security Agreement,
(viii) the Canadian Guaranty,
(ix) the Hypothec,
(x) a letter, in form and substance satisfactory to
Lender, from Bank of America, N.A. ("EXISTING LENDER") to Agent respecting the
amount necessary to repay in full all of the obligations of Loan Parties and
their Subsidiaries owing to Existing Lender and obtain a release of all of the
Liens existing in favor of Existing Lender in and to the assets of Loan Parties
and their Subsidiaries, together with termination statements and other
documentation evidencing the termination by Existing Lender of its Liens in and
to the properties and assets of Loan Parties and their Subsidiaries.
(xi) the Security Agreement, [together with copies of all
certificates representing the shares of Stock that are delivered to Working
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Capital Agent as Collateral under the Working Capital Credit Agreement], as well
as Stock powers and allonges with respect thereto endorsed in blank,
(xii) the Trademark Security Agreement, and
(xiii) the Collateral Assignment of each Approved Policy
with respect to Eligible Foreign Accounts (as each term is defined in the
Working Capital Credit Agreement).
(e) Lender shall have received a certificate from the Secretary of
each Borrower (i) attesting to the resolutions of such Borrower's Board of
Directors authorizing its execution, delivery, and performance of this Agreement
and the other Loan Documents to which such Borrower is a party, (ii) authorizing
specific officers of such Borrower to execute the same, and (iii) attesting to
the incumbency and signatures of such specific officers of such Borrower;
(e) Lender shall have received copies of each Borrower's Governing
Documents, as amended, modified, or supplemented to the Closing Date, certified
by the Secretary of such Borrower;
(f) Lender shall have received a certificate of status with respect
to each Borrower, dated within 10 days of the Closing Date, such certificate to
be issued by the appropriate officer of the jurisdiction of organization of such
Borrower, which certificate shall indicate that such Borrower is in good
standing in such jurisdiction;
(g) Lender shall have received certificates of status with respect
to each Borrower, each dated within 30 days of the Closing Date, such
certificates to be issued by the appropriate officer of the jurisdictions (other
than the jurisdiction of organization of such Borrower) in which (i) its failure
to be duly qualified or licensed would constitute a Material Adverse Change,
which certificates shall indicate that such Borrower is in good standing in such
jurisdictions, and (ii) it maintains any Collateral;
(h) Lender shall have received a certificate from the Secretary of
each Guarantor (i) attesting to the resolutions of such Guarantor's Board of
Directors authorizing its execution, delivery, and performance of the Loan
Documents to which such Guarantor is a party, (ii) authorizing specific officers
of such Guarantor to execute the same and (iii) attesting to the incumbency and
signatures of such specific officers of Guarantor;
(i) Lender shall have received copies of each Guarantor's Governing
Documents, as amended, modified, or supplemented to the Closing Date, certified
by the Secretary of such Guarantor;
(j) Lender shall have received a certificate of status with respect
to each Guarantor, dated within 10 days of the Closing Date, such certificate to
be issued by the appropriate officer of the jurisdiction of organization of such
Guarantor, which certificate shall indicate that such Guarantor is in good
standing in such jurisdiction;
(k) Lender shall have received certificates of status with respect
to each Guarantor, each dated within 30 days of the Closing Date, such
certificates to be issued by the appropriate officer of the jurisdictions (other
than the jurisdiction of organization of such Guarantor) in which (i) its
failure to be duly qualified or licensed would constitute a Material Adverse
Change, which certificates shall indicate that such Borrower is in good standing
in such jurisdictions, and (ii) it maintains any Collateral;
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(l) Lender shall have received a certificate of insurance, together
with the endorsements thereto, as are required by SECTION 5.8, the form and
substance of which shall be satisfactory to Agent;
(m) Lender shall have received Collateral Access Agreements with
respect to the following locations: [Lake Mary, Florida; Dallas, Texas (2
locations); San Antonio, Texas (2 locations); Santa Ana, California; Montreal,
Canada; ];
(n) Lender shall have received shall have received Collateral Access
Agreement with respect to 00000 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx;
(o) Lender shall have received an opinion of Loan Parties' counsel
under New York, Delaware, Texas and Canadian laws, in form and substance
satisfactory to Lender;
(p) Lender shall have received evidence that the Canadian Obligor
has appointed an agent in New York City for the purpose of service of process
and such agent agrees in writing to give Lender notice of any resignation of
such service agent or other termination of agency;
(q) Borrowers shall have paid all Lender Expenses incurred in
connection with the transactions evidenced by this Agreement;
(r) Lender shall have received (i) appraisals of the Real Property
Collateral satisfactory to Lender, and (ii) mortgagee title insurance policies
(or marked commitments to issue the same) for the Real Property Collateral
issued by a title insurance company satisfactory to Agent (each a "MORTGAGE
POLICY" and, collectively, the "MORTGAGE POLICIES") in amounts satisfactory to
Lender assuring Lender that the Mortgages on such Real Property Collateral are
valid and enforceable first priority mortgage Liens (subject to Permitted
Priority Liens) on such Real Property Collateral free and clear of all defects
and encumbrances except Permitted Liens, and the Mortgage Policies otherwise
shall be in form and substance satisfactory to Agent;
(s) Lender shall have received copies of each of the Working Capital
Documents, and the Term A Debt Documents, together with a certificate of the
Secretary of the Parent certifying that (i) each such document is a true,
correct, and complete copy thereof, (ii) each such document is in full force and
effect, and (iii) none of the Loan Parties has breached or defaulted in any of
its obligations thereunder;
(t) Loan Parties and each of their Subsidiaries shall have received
all licenses, approvals or evidence of other actions required by any
Governmental Authority in connection with the execution and delivery by Loan
Parties or their Subsidiaries of the Loan Documents or with the consummation of
the transactions contemplated thereby;
(u) Lender shall have determined, in its sole judgment, that no
event or development shall have occurred since December 31, 2006, which could
reasonably be expected to have a Material Adverse Effect provided that the
transactions contemplated by this Agreement and the transactions made in
connection with the Permitted Merger shall not constitute a Material Adverse
Effect
(v) All consents, authorizations and approvals of, and filings and
registrations with, and all other actions in respect of, any Governmental
Authority or other Person required in connection with the making of the Term
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Loan, the consummation of any of the transactions contemplated by any of the
Related Transaction Documents, or the conduct of the Loan Parties' business
shall have been obtained and shall be in full force and effect; and
(w) all other documents and legal matters in connection with the
transactions contemplated by this Agreement shall have been delivered, executed,
or recorded and shall be in form and substance satisfactory to Lender.
(x) To the extent that any of the closing documents referenced in
this Schedule 3.1 are duplicative of closing documents to be delivered by any
Loan Party pursuant to the Working Capital Documents or the Term A Debt
Documents, the parties shall endeavor to satisfy the requirements of this
Schedule 3.1 through delivery of the applicable Working Capital Documents or
Term A Debt Documents, as applicable, together with a letter from the Loan
Parties authorizing Lender to rely on any document so delivered as if it were
addressed directly to Lender.
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SCHEDULE 5.2
THE TERM "AGENT" IN THIS SCHEDULE 5.2 SHALL MEAN "LENDER" AND ALL OTHER
TERMS USED IN THIS SCHEDULE 5.2 AND NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE
MEANINGS ASCRIBED TO SUCH TERMS IN THE SENIOR FINANCING AGREEMENTS.
Provide Agent (and if so requested by Agent, with copies for each Lender)
with each of the documents set forth below at the following times in form
satisfactory to Agent:
================================================================================
Daily (a) an Account roll-forward with supporting details supplied
from sales journals, collection journals, credit registers and
any other records,
(b) notice of all claims, offsets, or disputes asserted by
Account Debtors with respect to Loan Parties' and their
Subsidiaries' Accounts, and
(c) copies of invoices together with corresponding shipping and
delivery documents, and credit memos together with corresponding
supporting documentation, with respect to invoices and credit
memos in excess of an amount determined in the sole discretion
of Agent, from time to time.
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Weekly (d) Inventory system/perpetual reports specifying the cost and
the wholesale market value of Loan Parties' and their
Subsidiaries' Inventory, by category (i.e., finished goods,
work-in-process or raw materials), with additional detail
showing additions to and deletions therefrom (delivered
electronically in an acceptable format, if Loan Parties have
implemented electronic reporting); and
(e) a detailed reporting of Loan Parties' and their Subsidiaries
intercompany activity.
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Monthly (no (f) a Working Capital Borrowing Base Certificate,
later than the
15th day of (g) a detailed aging, by total, of Borrowers' Accounts, together
each month) with a reconciliation and supporting documentation for any
reconciling items noted (delivered electronically in an
acceptable format, if Borrowers have implemented electronic
reporting),
(h) a detailed calculation of those Accounts that are not
eligible for the Working Capital Borrowing Base, if Borrowers
have not implemented electronic reporting,
--------------------------------------------------------------------------------
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(i) a detailed Inventory system/perpetual report together with a
reconciliation to Borrowers' general ledger accounts (delivered
electronically in an acceptable format, if Borrowers have
implemented electronic reporting),
(j) a detailed calculation of Inventory categories that are not
eligible for the Working Capital Borrowing Base, if Borrowers
have not implemented electronic reporting,
(k) a summary aging, by vendor, of Loan Parties' and their
Subsidiaries' accounts payable and any book overdrafts
(delivered electronically in an acceptable format, if Borrowers
have implemented electronic reporting), an aging, by vendor, of
any held checks and detailed listing of all accrued expenses,
(l) a detailed report regarding Loan Parties' and their
Subsidiaries' cash and Cash Equivalents, including an indication
of which amounts constitute Qualified Cash,
(m) a monthly Account roll-forward, in a format acceptable to
Agent in its discretion, tied to the beginning and ending
account receivable balances of Borrowers' general ledgers; and
(n) a detailed report of all slow moving and obsolete Inventory.
--------------------------------------------------------------------------------
Monthly (no (o) a reconciliation of Accounts, trade accounts payable, and
later than the Inventory of Loan Parties' general ledger accounts to their
30th day of monthly financial statements including any book reserves related
each month) to each category;
(p) a report regarding Loan Parties' and their Subsidiaries'
accrued, but unpaid, taxes including, without limitation,
property taxes, real estate taxes, ad valorem taxes, income
taxes, payroll taxes and withholding taxes (Canadian or
otherwise); together with proof of payment of such applicable
taxes;
(q) a detailed report by customer of all deferred revenue,
together with a reconciliation of such deferred revenue to
Parent's general ledger accounts and monthly financial
statements; and
(r) a detailed reporting of any deemed dividend tax liability.
--------------------------------------------------------------------------------
Semi-Annual (s) inventory appraisal, which shall be conducted by an
appraiser, and in form and substance satisfactory to Agent.
--------------------------------------------------------------------------------
Annually (t) a detailed list of Borrowers' and their Subsidiaries'
customers, with address and contact information;
(u) machinery and equipment appraisal, which shall be conducted
by an appraiser, and in form and substance satisfactory to
Agent; and
(v) real estate appraisals, which shall be conducted by an
appraiser, and in form and substance satisfactory to Agent.
--------------------------------------------------------------------------------
Upon request (w) copies of purchase orders and invoices for Inventory and by
Agent Equipment acquired by Borrowers or their Subsidiaries, and
(x) such other reports as to the Collateral or the financial
condition of Loan Parties and their Subsidiaries, as Agent may
reasonably request.
================================================================================
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SCHEDULE 5.3
THE TERM "AGENT" IN THIS SCHEDULE 5.3 SHALL MEAN "LENDER" AND ALL OTHER TERMS
USED IN THIS SCHEDULE 5.3 AND NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE
MEANINGS ASCRIBED TO SUCH TERMS IN THE SENIOR FINANCING AGREEMENTS.
Deliver to Agent, with copies to each Lender, each of the financial
statements, reports, or other items set forth set forth below at the following
times in form satisfactory to Agent:
================================================================================
as soon as available, but (a) an unaudited consolidated and consolidating
in any event within 30 balance sheet, income statement, and statement of
days (45 days in the case cash flow covering Parent's and its Subsidiaries'
of a month that is the operations during such period, and
end of one of Parent's
fiscal quarters) after (b) a Compliance Certificate.
the end of each month
during each of Parent's
fiscal years
--------------------------------------------------------------------------------
as soon as but in any (c) audited consolidated financial statements of
event within 120 days WHX and available, its Subsidiaries (such audited
after the end of each of financial statements to include balance sheets,
WHX's fiscal years statements of income and loss, statements of cash
flow and statements of shareholders' equity) and
unaudited consolidating financial statements of
WHX and its Subsidiaries (to include balance
sheets and statements of income and loss), and
the accompanying notes thereto, all in reasonable
detail, fairly presenting in all material
respects the financial position and the results
of the operations of WHX and its Subsidiaries as
of the end of and for such fiscal year, together
with the unqualified opinion (for the avoidance
of doubt, which shall not include any
qualification related to (A) "going concern" or
like qualification or exception, (B)
qualification or exception as to the scope of
such audit, or (C) qualification which relates to
the treatment or classification of any item and
which, as a condition to the removal of such
qualification, would require an adjustment to
such item, the effect of which would be to cause
any noncompliance with the provisions of Section
6.18) with respect to the audited consolidated
financial statements, which accountants shall be
an independent accounting firm selected by WHX
and acceptable to Agent, that such audited
consolidated financial statements have been
prepared in accordance with GAAP, and present
fairly in all material respects the results of
operations and financial condition of WHX and its
Subsidiaries as of the end of and for the fiscal
year then ended, and
(d) a Compliance Certificate.
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as soon as available, but (e) copies of Parent's Projections, in form and
in any event within 30 substance (including as to scope and underlying
days after the start of assumptions) satisfactory to Agent, in its
each of Parent's fiscal Permitted Discretion, for the forthcoming 3
years, years, year by year, and for the forthcoming
fiscal year, month by month, certified by the
chief financial officer of Parent as being such
officer's good faith estimate of the financial
performance of Parent during the period covered
thereby.
--------------------------------------------------------------------------------
-1-
if and when filed by any (f) Form 10-Q quarterly reports, Form 10-K annual
Loan Party, reports, and Form 8-K current reports,
(g) any other filings made by any Loan Party with
the SEC, and
(h) any other information that is provided by
Parent to its shareholders generally.
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promptly, but in any (i) notice of such event or condition and a
event within 5 Business statement of the curative action that Borrowers
Days after a Loan proposes to take with respect thereto.
Partyhas knowledge of any
event or condition that
constitutes a Default or
an Event of Default,
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promptly after the (j) notice of all actions, suits, or proceedings
commencement thereof, but brought by or against any Loan Party or any
in event within 5 Subsidiary of a Loan Party before any
Business Days after the Governmental Authority which reasonably any could
service of process with be expected to result in a Material Adverse
respect thereto on any Change.
Loan Party or any
Subsidiary of a Loan
Party,
--------------------------------------------------------------------------------
as soon as possible and (k) a statement of an Authorized Officer of the
in any event within 5 applicable Loan Party setting forth the details
Business Days after any of such occurrence and the action, if any, which
Loan Party or any ERISA such Loan Party or such ERISA Affiliate proposes
Affiliate thereof knows to take with respect thereto.
or has reason to know
that (1) any Reportable For purposes hereof, "Reportable Event" shall
Event with respect to any mean an event described in Section 4043 of ERISA
Employee Plan has (other than an event not subject to the provision
occurred, (2) any other for 30-day notice to the PBGC under the
Termination Event with regulations promulgated under such Section).
respect to any Employee
Plan has occurred, or (3)
an accumulated funding
deficiency has been
incurred or an
application has been made
to the Secretary of the
Treasury for a waiver or
modification of the
minimum funding standard
--------------------------------------------------------------------------------
-2-
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(including installment
payments) or an extension
of any amortization
period under Section 412
of the IRC with respect
to an Employee Plan,
--------------------------------------------------------------------------------
promptly and in any event (l) copies of each notice received by any Loan
within 5 Business Days Party or any ERISA Affiliate thereof of the
after receipt thereof by PBGC's intention to terminate any Plan or to have
any Loan Party or any a trustee appointed to administer any Plan.
ERISA Affiliate thereof
from the PBGC,
--------------------------------------------------------------------------------
promptly and in any event (m) copies of each Schedule B (Actuarial
within 10 Business Days Information) to the annual report (Form 5500
after the filing thereof Series) with respect to each Employee Plan and
with the Internal Revenue Multiemployer Plan.
Service,
--------------------------------------------------------------------------------
promptly and inany event (n) notice of such event or condition and a
within 10 Business Days statement of the curative action that Borrowers
after any Loan Party or proposes to take with respect thereto.
any ERISA Affiliate
thereof knows or has
reason to know that a
required installment
within the meaning of
Section 412 of the IRC
has not been made when
due with respect to an
Employee Plan,
--------------------------------------------------------------------------------
promptly and in any event (o) a copy of each notice received by any Loan
within 3 Business Days Party or any ERISA Affiliate thereof concerning
after receipt thereof by the imposition or amount of withdrawal liability
any Loan Party or any under Section 4202 of ERISA or indicating that
ERISA Affiliate thereof such Multiemployer Plan may enter reorganization
from a sponsor of a status under Section 4241 of ERISA.
Multiemployer Plan or
from the PBGC,
--------------------------------------------------------------------------------
-3-
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promptly and in any event (p) copies of each such notice sent by such Loan
within 10 Business Days Party or such ERISA Affiliate thereof.
after any Loan Party or any
ERISA Affiliate thereof
sends notice of a plant
closing or mass layoff (as
defined in Worker
Adjustment and Retraining
Notification Act) to
employees,
--------------------------------------------------------------------------------
promptly and in any event (q) evidence, in form and substance satisfactory
within 5 Business Days to Agent, that such payment or contribution has
after the due date for been made.
any payment or
contribution which was
not paid, but required of
any Loan Party or any
ERISA Affiliate thereof
with respect to any
Employee Plan,
--------------------------------------------------------------------------------
promptly and in any event (r) strike, labor dispute, slowdown, stoppage or
within 5 Business Days similar action or grievance against against or
after any Loan Party has involving any Loan Party if the same could
knowledge of any, reasonably be expected to result in, either
individually or in the aggregate, a Material
Adverse Change.
--------------------------------------------------------------------------------
promptly and in any event (s) amendment, termination, modification,
within 5 Business Days alteration, increase, or change to any Material
after any Loan Party has Contract if the same could reasonably be expected
knowledge of any, to result in a Material Adverse Change.
--------------------------------------------------------------------------------
upon the request of (t)any other information reasonably requested
Agent, relating to the financial condition of Borrowers
or their Subsidiaries.
--------------------------------------------------------------------------------
-4-
