FINANCING AGREEMENT
-------------------
The CIT Group/Business Credit, Inc.
(as Administrative Agent and Lender)
Citicorp USA, Inc. (as Syndication Agent and Lender)
Citibank N.A. (as Issuing Bank)
each other entity that becomes a party hereto as a Lender
Harvard Industries, Inc.,
Xxxxxxx-Xxxxxx, Inc.,
Harvard Transportation Corporation,
Xxxxxxx-Xxxxxx Greeneville, Inc.,
Pottstown Precision Casting, Inc.,
Harvard Industries Risk Management, Inc.,
Xxxxxxx-Xxxxxx Toledo, Inc.,
Xxxxxx Automotive, Inc.,
Xxxxx-Albion Corporation,
And
KWCI Liquidating Corporation,
(as joint and several obligors)
Trim Trends Canada Limited
And
000000 Xxxxxx Inc.
(as joint and several Guarantors)
And
The CIT Group/Business Credit, Inc.
And
Xxxxxxx Xxxxx Barney Inc
(as Arrangers)
Dated: As of May 31, 2001
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TABLE OF CONTENTS
Page
SECTION 1. Definitions...................................................................................5
1.1 Certain Defined Terms.............................................................................5
1.2 Construction of Certain Terms....................................................................33
1.3 GAAP Terminology.................................................................................33
1.4 No Presumption in Construction...................................................................34
1.5 Independence of Provisions.......................................................................34
1.6 Inactive Guarantor...............................................................................34
SECTION 2. Conditions Precedent.........................................................................35
2.1 Conditions relating to the Closing Date..........................................................35
2.2 Conditions to Each Extension of Credit...........................................................41
2.3 Conditions Relating to Issuance of Letters of Credit.............................................43
SECTION 3. Revolving Loans..............................................................................43
3.1 Revolving Loans..................................................................................43
3.2 Covenants Involving Accounts and Inventory.......................................................44
3.3 Representations Regarding Accounts and Inventory.................................................45
3.4 Establishment of Blocked Accounts; Matters Relating to Accounts..................................45
3.5 Reports Involving Accounts and Related Matters...................................................48
3.6 Revolving Loan Account...........................................................................48
3.7 Overadvances Due on Demand.......................................................................51
SECTION 4. Term Loans...................................................................................51
4.1 Term Loan Promissory Note A......................................................................51
4.2 Term Loan A......................................................................................51
4.3 Payment of Principal of Term Loan A..............................................................51
4.4 Term Loan Promissory Note B......................................................................52
4.5 Term Loan B......................................................................................52
4.6 Payment of Principal of Term Loan B..............................................................52
4.7 Payment of Term Loans Upon Termination...........................................................52
SECTION 5. Letters of Credit............................................................................52
5.1 Letter of Credit Commitment......................................................................52
5.2 Procedure for Issuance of Letters of Credit......................................................53
5.3 Reimbursement Agreement..........................................................................54
5.4 Responsibilities of Issuing Bank.................................................................54
5.5 L/C Participations...............................................................................55
5.6 Reimbursement Obligations........................................................................55
5.7 Payments by Revolving Facility Lenders...........................................................56
5.8 Reimbursement Obligations Absolute...............................................................56
5.9 Actions and Reliance by the Issuing Bank.........................................................57
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SECTION 6. Termination or Reduction of Commitments; Reimbursement and Loan Obligations Generally........57
6.1 Revolving Line of Credit.........................................................................57
6.2 Term Loan A Commitments..........................................................................58
6.3 Term Loan B Commitments..........................................................................58
6.4 Letter of Credit Sub-Line........................................................................58
6.5 Reimbursement and Loan Obligations Generally.....................................................58
SECTION 7. Prepayments of Loans.........................................................................58
7.1 Prepayments......................................................................................58
7.2 Optional Prepayment of Term Loans................................................................58
7.3 Mandatory Application of Certain Proceeds........................................................59
7.4 Mandatory Application of Insurance Proceeds and Sale of Asset Proceeds...........................59
7.5 Other Mandatory Prepayments......................................................................60
SECTION 8. Collateral for Obligations...................................................................61
8.1 Security Interest................................................................................61
8.2 Related Collateral Matters and Financing Statements..............................................61
8.3 Certain Dealings, Rights and Matters Relating to Collateral......................................62
8.4 Continuing Nature of Security Interest and Rights................................................64
8.5 Administrative Agent's Exercise of Rights and Remedies...........................................64
8.6 Application of Credit Balances as Security; Loan Account Charges.................................64
8.7 Insurance on Collateral..........................................................................65
8.8 Taxes Relating to Collateral.....................................................................67
8.9 Mortgages........................................................................................67
SECTION 9. Representations; Warranties and Covenants....................................................67
9.1 Representations and Warranties...................................................................67
9.2 Covenants........................................................................................73
9.3 Indemnification..................................................................................85
SECTION 10. Interest, Fees and Expenses Involving Obligations............................................88
10.1 Revolving Loans..................................................................................88
10.2 Term Loans.......................................................................................88
10.3 L/C Participation Fees...........................................................................89
10.4 Charges Relating to Letters of Credit............................................................89
10.5 Other Expenses...................................................................................89
10.6 Line of Credit Commitment Fee....................................................................89
10.7 Closing Fee......................................................................................90
10.8 Administrative Management Fee....................................................................90
10.9 Other Charges of the Administrative Agent........................................................90
10.10 Success Fee......................................................................................90
10.11 Taxes............................................................................................90
10.12 Revolving Loan Account Charges...................................................................91
10.13 Capital Adequacy Changes.........................................................................92
10.14 Additional Costs.................................................................................92
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SECTION 11. Powers Involving Obligations; Obligations Absolute...........................................93
11.1 Power of Attorney................................................................................93
11.2 Joint and Several Liability of Companies.........................................................94
SECTION 12. Events of Default and Remedies...............................................................96
12.1 Events of Default................................................................................96
12.2 Remedies Upon an Event of Default................................................................99
12.3 Additional Remedies Upon an Event of Default....................................................100
12.4 Right of Set-Off................................................................................101
SECTION 13. Termination.................................................................................102
SECTION 14. Miscellaneous...............................................................................102
14.1 Waivers.........................................................................................102
14.2 Entire Agreement................................................................................103
14.3 Usury...........................................................................................103
14.4 Severability....................................................................................103
14.5 Waiver of Jury Trial............................................................................104
14.6 Notices.........................................................................................104
14.7 Governing Laws..................................................................................106
14.8 Submission to Jurisdiction; Service of Process..................................................106
14.10 Headings........................................................................................107
14.11 Replacement of Promissory Note..................................................................107
14.12 Counterparts....................................................................................107
14.13 Assignments and Participations..................................................................107
14.14 Currency........................................................................................110
14.15 Rate of Interest for Canadian Companies.........................................................110
14.16 Amendments; Waivers.............................................................................110
14.17 Confidentiality.................................................................................112
14.18 Contribution....................................................................................113
SECTION 15. Agreement between the Lenders...............................................................114
15.1 Disbursements...................................................................................114
15.2 Lender and Administrative Agent Adjustments.....................................................114
15.3 Statement of Company Accounts...................................................................116
15.4 Sharing of Payments.............................................................................116
15.5 Intentionally Deleted...........................................................................116
15.6 Pro Rata Responsibility.........................................................................116
SECTION 16. Agents and Issuing Bank.....................................................................116
16.1 Appointment of Agent............................................................................116
16.2 Delegation......................................................................................117
16.3 Exculpatory Provisions..........................................................................117
16.4 Reliance........................................................................................117
16.5 Notice of Default...............................................................................118
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16.6 Non-Reliance on Agents, Issuing Bank and Other Lenders..........................................118
16.7 Indemnification by Lenders......................................................................118
16.8 The Agents and the Issuing Bank in Their Individual Capacities..................................119
16.9 Successor Agents................................................................................119
16.10 Arrangements Requiring Consent of Lenders; Administrative Agent's Discretion....................120
16.11 Nonconsenting Lenders...........................................................................120
16.12 Refund of Payments..............................................................................121
16.13 Arrangers.......................................................................................121
16.14 Relationship....................................................................................121
SECTION 17. Guaranty....................................................................................121
17.1 Guaranty........................................................................................121
17.2 Guaranty Obligations Unconditional..............................................................122
17.3 Waivers.........................................................................................124
17.4 Subrogation.....................................................................................124
17.5 Canadian Debenture..............................................................................125
EXHIBIT
Exhibit A - Form of Term Loan A Promissory Note
Exhibit B - Form of Term Loan B Promissory Note
Exhibit C - Form of Revolving Loan Promissory Note
Exhibit D - Form of Assignment and Transfer Agreement
SCHEDULES
Schedule 1 - Collateral Information
Schedule 2 - Litigation
Schedule 3 - Capital Stock
Schedule 4 - Certain Indebtedness and Permitted Encumbrances
Schedule 5 - Real Estate
Schedule 6 - Liabilities and Asset Dispositions
Schedule 7 - Defaults
Schedule 8 - Taxes
Schedule 9 - ERISA Matters
Schedule 10 - Environmental Matters
Schedule 11 - Intellectual Property Matters
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THE CIT GROUP/BUSINESS CREDIT, INC., a New York corporation, with offices
located at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000 (hereinafter "CIT"),
as administrative agent for the Lenders (in that capacity, the "Administrative
Agent"), CITICORP USA, INC., a Delaware corporation, with offices located at 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000 (hereinafter, "CUSA"), as syndication agent
in connection with the Loans referred to below (in that capacity, the
"Syndication Agent"), CIT and XXXXXXX XXXXX XXXXXX INC. as arrangers in
connection with the Loans (each an "Arranger"), each Lender (as that term is
defined below) party hereto from time to time, CITIBANK, N.A. ("Citibank"), as
issuing bank in respect of Letters of Credit as contemplated herein, and HARVARD
INDUSTRIES, INC., a Delaware corporation (herein "Harvard"), and each of its
direct and indirect subsidiaries identified on the signature pages hereof as
Companies (each individually a "Company" and collectively, the "Companies"), or
Guarantors (each individually a "Guarantor" and collectively, the "Guarantors"),
as joint and several obligors in respect of the Obligations (as defined below),
in the case of the Companies, or , in the case of the Guarantors, as joint and
several guarantors of the Harvard Obligations (as defined below) and, severally,
as obligors in respect of their own Reimbursement Obligations, if any (as
defined below).
SECTION 1. Definitions
1.1 Certain Defined Terms
---------------------
The following terms shall have the meanings indicated below.
Access and Security Agreement shall mean the Access and Security Agreement dated
as of January 1, 2001, between Harvard and Pottstown, on the one hand, and
General Motors Corporation, on the other hand, and each of the three Access and
Security Agreements dated as of the same date between Harvard and Xxxxx-Albion,
on the one hand, and General Motors Corporation, on the other hand, relating to
the Xxxxx-Albion facility in Jackson, Michigan, the Trim-Trend facility in
Bryan, Ohio, and the Trim-Trend facility in Spencerville, Ohio.
Accounts shall mean all of an Obligor's now existing and future: (a) accounts
(as defined in the UCC), and any and all other receivables (whether or not
specifically listed on schedules furnished to the Administrative Agent),
including, without limitation, all accounts created by, or arising from, all of
such Obligor's sales, leases, rentals of goods or renditions of services to its
customers, including but not limited to, those accounts arising under such
Obligor's trade names or styles, or through any of such Obligor's divisions; (b)
any and all instruments, documents, chattel paper (including electronic chattel
paper) (all as defined in the UCC); (c) unpaid seller's or lessor's rights
(including rescission, replevin, reclamation, repossession and stoppage in
transit) relating to the foregoing or arising therefrom; (d) rights to any goods
represented by any of the foregoing, including rights to returned, reclaimed or
repossessed goods; (e) reserves and credit balances arising in connection with
or pursuant hereto; (f) guarantees, supporting obligations, payment intangibles
and letter of credit rights (all as defined in the UCC); (g) insurance policies
or rights relating to any of the foregoing; (h) general intangibles pertaining
to any and all of the foregoing (including all rights to payment, including
those arising in connection with bank and non-bank credit cards), and including
books and records and any electronic media and software thereto; (i) notes,
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deposits or property of account debtors securing the obligations of any such
account debtors to such Obligor; and (j) cash and non-cash proceeds (as defined
in the UCC) of any and all of the foregoing.
Administrative Management Fee shall mean the sum of $75,000.00 per annum, which
shall be paid to the Administrative Agent, for its own account, in accordance
with Paragraph 10.8 of Section 10 hereof to offset the expenses and costs
(excluding Out-of-Pocket Expenses and auditor fees) of the Administrative Agent
in connection with administration, record keeping, analyzing and evaluating the
Collateral.
Agents shall mean each of the Administrative Agent and the Syndication Agent.
Agents' Commitment Letter shall mean the Commitment Letter, dated April 19,
2001, issued by the Agents to, and accepted by, Harvard.
Anniversary Date shall mean the date occurring one (1) year from the Closing
Date and the same date in every year thereafter.
Approved Fund shall mean any Fund that is advised or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or Affiliate of an entity that
administers or manages a Lender.
Assignment and Transfer Agreement shall mean an Assignment and Transfer
Agreement in the form of Exhibit E hereto.
Authorized Officer shall mean with respect to an Obligor, the chairman of the
board of directors, the chief executive officer or the president of that Obligor
or, with respect to financial matters, the chief financial officer or
comptroller of that Obligor, in each case, acting in that Person's capacity as
such (or any other officer of the relevant Obligor who is duly authorized to
take the relevant action or issue the relevant certification or other document
on behalf of that Obligor as contemplated herein or in another relevant Loan
Document).
Availability shall mean, at any time of calculation, the amount by which: (i)
the Borrowing Base exceeds (ii) the outstanding aggregate amount of all
Obligations, including without limitation, all Obligations with respect to the
Revolving Loans, excluding Obligations in respect of the Term Loans and L/C
Obligations in respect of which there is an Availability Reserve.
Availability Reserve shall mean the sum of the following items as calculated in
relation to the Obligors: (a) (i) the sum of the lesser of (A) three (3) months'
rental payments or similar charges for leased premises or other Collateral
locations for which the Administrative Agent has not received a landlord's
waiver in form and substance reasonably satisfactory to the Administrative Agent
and (B) the aggregate value of Collateral at such location (subject to the final
sentence of this definition), plus (ii) three (3) months' estimated payments
plus any other fees or charges owing by any Obligor to any applicable
warehousemen or third party processor (as determined by the Administrative Agent
in its reasonable business judgment), provided that any of the foregoing amounts
shall be adjusted from time to time hereafter upon (x) delivery to the
Administrative Agent of any such acceptable waiver, (y) the opening or closing
of a Collateral location and/or (z) any change in the amount of rental, storage
or processor payments or similar charges, plus (iii) until such time as the
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Administrative Agent has received, in form and substance satisfactory to the
Agents and the Lenders, the title insurance required in respect of the Canadian
Real Estate satisfying the criteria identified in Paragraph 2.1(v) of Section 2
of this Financing Agreement, $405,000.00; and (b) any reserve which the
Administrative Agent may reasonably require from time to time pursuant to this
Financing Agreement (including without limitation, for Letters of Credit
pursuant to Paragraph 5.1(b) of Section 5 hereof, for certain Insurance
Proceeds, pursuant to Paragraph 8.7(e) of Section 8 hereof) and, in respect of
Eligible Accounts Receivable, a dilution reserve for each percentage point, or
portion of a percentage point, by which actual dilution exceeds five percent
(5%); provided that, if the aggregate of the Revolving Loan principal plus the
L/C Obligations at any time is at least equal to the Reserve Increase Level, it
is understood that the Administrative Agent shall be entitled to establish
increased levels of reserves in its sole discretion. For this purpose, "Reserve
Increase Level" shall at any time mean 88.889% of the Revolving Line of Credit
as in effect at the time. For purposes of clause (a)(i)(B) of this definition,
the value of any Collateral at a location shall be as determined by the
Administrative Agent in its reasonable business judgment and may, among other
things, take into account a value ascribed by it to the books and records of any
Obligor maintained at such location which may relate to any Collateral. However,
it is understood that the value so ascribed may not exceed the amount specified
in clause (a)(i)(A) for such location.
Bankruptcy Code shall mean each of the United States Bankruptcy Code, 11
U.S.C.ss.ss.101 et seq. and the Bankruptcy and Insolvency Act (Canada).
Beneficiary shall have the meaning set forth in Paragraph 17.1(a) of Section 17
hereof.
Blocked Accounts shall have the meaning set forth in Paragraph 3.4(b) of Section
3 hereof.
Borrowing Base shall mean the sum of (a) eighty-five percent (85%) of the
aggregate outstanding Eligible Accounts Receivable of the Obligors, plus (b) the
lesser of (i) the Inventory Loan Cap or (ii) the sum of (A) sixty percent (60%)
of the aggregate value of the Eligible Raw Material Inventory of the Obligors,
(B) twenty-five percent (25%) of Eligible Work-in-Process Inventory of the
Obligors plus (C) sixty percent (60%) of Eligible Finished Goods Inventory of
the Obligors (each of (A), (B) and (C), valued at the lower of cost or market,
on a first in, first out basis), less (c) any applicable Availability Reserves.
Borrowing Base Certificate shall mean a certificate, in form and substance
satisfactory to the Agents, of Harvard signed by an Authorized Officer of
Harvard certifying as to the amount calculated by the Companies, in accordance
with this Financing Agreement, to be the Borrowing Base on the date of such
certificate, setting out in reasonable detail the basis for such calculation,
together with a schedule setting out with respect to each of the Obligors, as at
the same date, its outstanding Eligible Accounts Receivable, the value of its
Eligible Raw Material Inventory, Eligible Work-in-Process Inventory and Eligible
Finished Goods Inventory, in each case at the lower of cost or market, on a
first in, first out basis.
Business Day shall mean any day on which the Administrative Agent and the
principal office in New York City of Citibank are open for business.
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Canadian Debenture shall have the meaning set forth in Paragraph 17.5 of Section
17 of this Financing Agreement.
Canadian Deposit Account shall have the meaning set forth in Paragraph 2.1(ee)
of Section 2.
Capital Expenditures shall mean, for any period, the aggregate expenditures of
the Obligors during such period on account of, property, plant, equipment or
similar fixed assets that, in conformity with GAAP, are required to be reflected
in the balance sheets of the Obligors, including, without limitation, the
portion of each Capital Lease.
Capital Lease shall mean any lease of property (whether real, personal or mixed)
to the extent that, in conformity with GAAP, it is or should be accounted for as
a capital lease or a Capital Expenditure in the balance sheets of the Obligors.
Cash Collateral Account shall have the meaning set forth in Paragraph 2.1(hh) of
Section 2 hereof.
Change in Control shall mean (a) the acquisition by any Person or group (within
the meaning given to the term in the Securities Exchange Act of 1934 (the
"Exchange Act")), other than Contrarian Capital Management, of beneficial
ownership (within the meaning of Rule 13d-3 promulgated by the Securities and
Exchange Commission under the Exchange Act) of more than fifty percent (50%) of
the issued and outstanding shares of the capital stock of Harvard having the
right to vote for the election of directors of Harvard under ordinary
circumstances; (b) during any period of twelve (12) consecutive calendar months,
individuals who at the beginning of such period constituted the board of
directors of Harvard (together with any new directors whose election by the
board of directors of Harvard or nomination for election by the stockholders of
Harvard was approved by a vote of at least two-thirds of the directors then
still in office who were either directors at the beginning of such period or
whose election or nomination for election was previously so approved) cease for
any reason other than death or disability to constitute a majority of the
directors then in office; or (c) the capital stock of any Obligor (other than
Harvard) presently held (directly or indirectly) by Harvard is transferred to
any Person other than any Obligor.
Citibank Base Rate shall mean , for any period, a fluctuating interest rate per
annum as shall be in effect from time to time, which rate per annum shall be
equal at all times to the highest of:
(a) the rate of interest announced publicly by Citibank in New
York, New York, from time to time, as Citibank's base rate;
(b) the sum (adjusted to the nearest quarter of one percent
(0.25%) or, if there is no nearest quarter of one percent (0.25%), to the next
higher quarter of one percent (0.25%) of
(i) 0.50% per annum plus
----
(ii) the rate per annum obtained by dividing (A) the
latest three-week moving average of secondary market
morning offering rates in the United States for
three-month certificates of deposit of major United
States money market banks, such three-week
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moving average being determined weekly on each Monday
(or, if any such day is not a Business Day, on the
next succeeding Business Day) for the three-week
period ending on the previous Friday by Citibank on
the basis of such rates reported by certificate of
deposit dealers to and published by the Federal
Reserve Bank of New York or, if such publication
shall be suspended or terminated, on the basis of
quotations for such rates received by Citibank from
three New York certificate of deposit dealers of
recognized standing selected by Citibank, by (B) a
percentage equal to one hundred percent (100%) minus
the average of the daily percentages specified during
such three-week period by the Federal Reserve Board
for determining the maximum reserve requirement
(including any emergency, supplemental or other
marginal reserve requirement) for Citibank in respect
of liabilities consisting of or including (among
other liabilities) three-month U.S. dollar
nonpersonal time deposits in the United States, plus
(iii) the average during such three-week period of the
maximum annual assessment rates estimated by Citibank
for determining the then current annual assessment
payable by Citibank to the Federal Deposit Insurance
Corporation (or any successor) for insuring U.S.
dollar deposits in the United States; and
(c) the sum of (i) one-half of one percent (0.50%) per annum plus
(ii) the Federal Funds Rate.
Closing Date shall mean the date that this Financing Agreement has been duly
executed by the parties hereto and delivered to the Administrative Agent.
Closing Fee shall mean the closing fee payable to the Agents as contemplated in
Paragraph 10.7 of Section 10 of this Financing Agreement. Code shall mean the
Internal Revenue Code of 1986, as amended from time to time, and the rules and
regulations promulgated thereunder from time to time.
Collateral shall have the meaning set forth in Paragraph 8.1 of Section 8 of
this Financing Agreement.
Collective Borrowers shall mean each and all of the Companies, as specified in
Paragraph 3.6(b) of Section 3 of this Financing Agreement.
Commitment shall mean each Lender's commitment in accordance with this Financing
Agreement to make Revolving Loans and acquire L/C Participations (the "Revolving
Credit Commitment") and to provide the Term Loan funding (the "Term Loan
Commitment"), in the amount of their respective pro rata shares of the Revolving
Credit Commitment and the Term Loan Commitment allocable to Term Loan A (the
"Term Loan A Commitment") and to Term Loan B (the "Term Loan B Commitment") set
forth in the schedules prepared by the Administrative Agent or the Assignment
and Transfer Agreement executed by the relevant Lender, and the commitment of
the Issuing Bank to issue Letters of Credit pursuant to Section 5 of this
Financing Agreement.
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Consolidated Balance Sheet shall mean a consolidated or compiled, as applicable,
balance sheet for the Obligors and their consolidated subsidiaries, eliminating
all inter-company transactions and prepared in accordance with GAAP.
Consolidating Balance Sheet shall mean (subject to Paragraph 1.3 of this Section
1) a Consolidated Balance Sheet plus individual balance sheets for the Obligors
and their consolidated subsidiaries, showing all eliminations of intercompany
transactions, including a balance sheet for each of the Obligors exclusively,
all prepared in accordance with GAAP.
Contaminant means any substance (including, without limitation, any product)
regulated, restricted or addressed by or under Environmental Law, including,
without limitation, any pollutant, contaminant, hazardous substance, radioactive
substance, toxic substance, hazardous waste, medical waste, radioactive waste,
or special waste, petroleum (including, without limitation, crude-oil) or
petroleum-derived substance or waste asbestos, lead, polychlorinated biphenyls,
or any hazardous or toxic constituent or breakdown product thereof.
Contractual Obligations shall mean, as to any Person, any provision of any
security issued by such Person or any agreement, instrument or other undertaking
to which such Person is a party or by which it or any of its property is bound.
Copyrights shall mean all of each of the Obligors' present and hereafter
acquired copyrights, copyright registrations, recordings, copyright
applications, designs, styles, marks, prints and labels bearing any of the
foregoing, copyright licenses, and all of the Obligors' cash and non-cash
proceeds thereof.
Current Assets shall mean those assets of the Obligors which, in accordance with
GAAP, are classified as current.
Current Liabilities shall mean those liabilities of the Obligors which, in
accordance with GAAP, are classified as "current," provided however, that,
notwithstanding GAAP, the Revolving Loans and the current portion of Permitted
Indebtedness shall be considered "current liabilities."
Default shall mean any event specified in Section 12 hereof, whether or not any
requirement for the giving of notice, the lapse of time, or both, or any other
condition, event or act, has been satisfied.
Default Rate of Interest shall mean a rate of interest per annum equal to the
sum of: (a) two percent (2%) and (b) the applicable increment over the Citibank
Base Rate (as set forth in Paragraph 10.1 or Paragraph 10.2 of Section 10
hereof) plus the Citibank Base Rate, which shall apply to the Reimbursement
Obligations as provided in Paragraph 5.5 of Section 5 of this Financing
Agreement and to all other Obligations or Guaranty Obligations (as applicable)
due from the Obligors as provided in Paragraph 10.1(c) of Section 10 of this
Financing Agreement.
Depository Account shall mean a collection account subject to the Administrative
Agent's control.
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Disposition shall mean any transaction, or series of related transactions,
pursuant to which any Obligor or any of its subsidiaries sells, assigns,
transfers or otherwise disposes of any property or assets (whether now owned or
hereafter acquired) to any other Person, in each case, whether or not the
consideration therefor consists of cash, securities or other assets owned by the
acquiring Person, excluding any sales of Inventory in the ordinary course of
business on ordinary business terms.
Documents of Title shall mean all of each of the Obligors' present and future
documents (as defined in the UCC), and any and all warehouse receipts, bills of
lading, shipping documents, chattel paper, instruments and similar documents,
all whether negotiable or not and all goods and Inventory relating thereto and
all cash and non-cash proceeds of the foregoing.
Xxxxxxx-Xxxxxx Plan shall mean the Xxxxxxx-Xxxxxx Pension Plan for Wage-Basis
Employees.
Early Termination Date shall mean the date on which the Companies or any one of
them terminates this Financing Agreement or the Revolving Line of Credit or any
portion of the Revolving Credit Commitment, the Term Loan A Commitment or the
Term Loan B Commitment, or, if applicable, the date of prepayment of any Term
Loan, in any case, which date is prior to an Anniversary Date. Notice of
termination, as aforesaid, by any one Company shall be deemed to be notice by
the Companies for purposes hereof.
Early Termination Fee shall: (a) mean the fee the Administrative Agent on behalf
of the Lenders is entitled to charge the Companies in the event the Companies or
any one of them either (i) terminates the Revolving Line of Credit or any
portion of the Revolving Credit Commitment, pursuant to Section 6.1, on a date
prior to an Anniversary Date or (ii) prepays all or any portion of a Term Loan
pursuant to Paragraph 7.2 on a date prior to an Anniversary Date; and (b) be
determined by multiplying an amount equal to the portion of the relevant
commitment being terminated or, as applicable, an amount equal to the principal
of the Term Loan being prepaid by (w) three percent (3%) if the Early
Termination Date occurs on or before one (1) year from the Closing Date, (x) two
percent (2%) if the Early Termination Date occurs after one (1) year from the
Closing Date but on or before two (2) years from the Closing Date; (y) one
percent (1%) if the Early Termination Date occurs after two (2) years from the
Closing Date but more than thirty days before the third Anniversary Date; and
(z) zero thereafter.
EBITDA shall mean, for any applicable period, consolidated net income minus (to
the extent included in determining net income) each of the following: (A) income
tax credits, (B) interest income, (C) gains from extraordinary items, (D)
aggregate non-cash net gains (but not any aggregate net loss) arising from the
sale, exchange or other disposition of capital assets, (E) any other non-cash
gains that would have been included in consolidated net income under GAAP but
for this provision, and (F) any other income that does not arise in the ordinary
course of business; plus (to the extent included in determining net income) each
of the following: (A) any provision for income taxes, (B) interest expense, (C)
the amount of any non-cash charges (including amortization, depreciation and the
non-cash portion of imputed interest on employee post-retirement benefits other
than pension benefits), (D) amortized debt discount and (E) any aggregate
non-cash net loss arising from the sale, exchange or other disposition of
capital assets. All items and classifications relevant to the determination of
11
EBITDA for a period shall be determined in accordance with GAAP applied on a
basis consistent with its application in the audited financial statements of the
Obligors for the 2000 Fiscal Year.
Eligible Accounts Receivable shall mean, as to any Obligor, the gross amount of
such Obligor's Trade Accounts Receivable that are subject to a valid, first
priority and fully perfected security interest in favor of the Administrative
Agent, on behalf of the Lenders, which conform to the warranties contained
herein and which, at all times, continue to be acceptable to the Administrative
Agent in the exercise of its reasonable business judgment, less, without
duplication, the sum of:
(a) any returns, discounts, claims, credits and allowances of any
nature (whether issued, owing, granted, claimed or outstanding), and
(b) reserves for any such Trade Accounts Receivable that arise
from or are subject to or include:
(i) sales (A) to the United States, any state or other
governmental entity of or in the United States or to
any agency, department or division thereof, except
for any such sales as to which such Obligor has
complied with the Assignment of Claims Act of 1940 or
(B) to Canada, any province or other governmental
entity of or in Canada or to any agency, department
or division thereof, except where the Administrative
Agent is satisfied that the Administrative Agent
holds a valid perfected first priority security
interest in the Accounts Receivable, in any case
covered by (A) or (B), any other applicable statute,
rules or regulation, to the Administrative Agent's
satisfaction in the exercise of its reasonable
business judgment;
(ii) foreign sales, other than sales which otherwise
comply with all of the other criteria for eligibility
hereunder and are (x) secured by letters of credit
(in form and substance satisfactory to the
Administrative Agent) issued or confirmed by, and
payable at, banks having a place of business in the
United States, or (y) to customers located in Canada
provided such Accounts do not exceed $5,000,000.00 in
the aggregate at any one time;
(iii) Accounts that remain unpaid more than ninety (90)
days from original invoice date;
(iv) contra accounts;
(v) sales to any other Obligor, any subsidiary, or to any
company affiliated with the Obligors in any way;
(vi) xxxx and hold (deferred shipment) or consignment
sales;
(vii) sales to any customer which is: (A) insolvent, (B)
the debtor in any bankruptcy, insolvency,
arrangement, reorganization, receivership or similar
proceedings under any federal, state law or
provincial, (C) negotiating, or has called a meeting
of its creditors for purposes of negotiating, a
12
compromise of its debts, or (D) financially
unacceptable to the Agents or has a credit rating
unacceptable to the Agents;
(viii) all sales to any customer if fifty percent (50%) or
more of the aggregate U.S. dollar amount (or
equivalent) of all outstanding invoices to such
customer are unpaid more than ninety (90) days from
invoice date;
(ix) pre-billed receivables and receivables arising from
progress billing;
(x) an amount representing returns, discounts, claims,
credits, allowances and applicable terms;
(xi) sales not payable in United States or Canadian
currency; and
(xii) any other reasons deemed necessary by the less any
reserves required by the Administrative Agent in its
reasonable discretion, and which are customary either
in the commercial finance industry or in the lending
practices of either of the Agents and/or the Lenders.
It is understood that any payment due under the GM
Transition Supply Agreement, or any similar agreement
to the extent such agreement provides for a lump sum
or scheduled payments to the applicable Obligors not
in the ordinary course and not in the form of per
item price adjustments will not be included in
Eligible Accounts Receivable.
Eligible Assignee shall mean (a) a Lender or any Affiliate or Approved Fund of
such Lender, (b) a commercial bank having total assets in excess of
$5,000,000,000, (c) a finance company, insurance company, other financial
institution or fund reasonably acceptable to the Administrative Agent, regularly
engaged in making, purchasing or investing in loans and having a net worth,
determined in accordance with GAAP, in excess of $500,000,000 (or, to the extent
net worth is less than such amount, a finance company, insurance company, other
financial institution or fund, reasonably acceptable to the Administrative Agent
or (d) a savings and loan association or savings bank organized under the laws
of the United States or any State thereof having a net worth, determined in
accordance with GAAP, in excess of $500,000,000.
Eligible Finished Goods Inventory shall mean, as to any Obligor, the gross
amount of such Obligor's Inventory that is subject to a valid, first priority
and fully perfected security interest in favor of the Administrative Agent, on
behalf of the Lenders, and which conforms to the warranties contained herein and
which, at all times, continues to be acceptable to the Administrative Agent in
the exercise of its reasonable business judgment, less, without duplication, any
(a) Inventory at the relevant time treated as Eligible Raw Materials Inventory
or Eligible Work-in-Process Inventory or other raw materials or work-in-process
or OMC Reserve Inventory or Tooling, (b) supplies, (c) Inventory not present in
the United States or Canada or constituting a test count variance, (d) Inventory
returned or rejected by any of such Obligor's customers (other than goods that
are undamaged and re-sellable in the normal course of business) and goods to be
returned to such Obligor's suppliers, (e) Inventory in transit to third parties
(other than such Obligor's agents or warehouses), or in the possession of a
warehouseman, bailee, third party processor, or other third party, unless such
13
warehouseman, bailee or third party has executed a notice of security interest
agreement (in form and substance satisfactory to the Administrative Agent) and
the Administrative Agent, on behalf of the Lenders, the Agents and the Issuing
Bank, shall have a first priority perfected security interest in such Inventory,
and (f) less any reserves required by the Administrative Agent in its reasonable
discretion, including without limitation for special order goods, discontinued,
slow-moving and obsolete Inventory, market value declines, xxxx and hold
(deferred shipment), consignment sales, shrinkage and any applicable customs,
freight, duties and Taxes.
Eligible Inventory shall mean all (a) Eligible Finished Goods Inventory, (b)
Eligible Raw Material Inventory and (c) Eligible Work-in-Process Inventory.
Eligible Raw Materials Inventory shall mean, as to any Obligor, the gross amount
of such Obligor's Inventory which consists of raw materials and is subject to a
valid, first priority and fully perfected security interest in favor of the
Administrative Agent, on behalf of the Lenders, the Agents and the Issuing Bank,
and which conforms to the warranties contained herein and which, at all times,
continues to be acceptable to the Administrative Agent in the exercise of its
reasonable business judgment, less, without duplication, any such raw materials
Inventory (a) at the relevant time treated as Eligible Finished Goods Inventory
or Eligible Work-in-Process Inventory or OMC Reserve Inventory or Tooling, (b)
not present in the United States or Canada or constituting a test count
variance, (c) not usable in the normal course of such Obligor's business to
produce Eligible Finished Goods Inventory, whether as a result of obsolescence
or otherwise, (d) in transit to third parties (other than such Obligor's agents
or warehouses), or in the possession of a warehouseman, bailee, third party
processor, or other third party, unless such warehouseman, bailee or third party
has executed a notice of security interest agreement (in form and substance
satisfactory to the Administrative Agent) and the Administrative Agent, on
behalf of the Lenders, the Agents and the Issuing Bank, shall have a first
priority perfected security interest in such Inventory, and (e) less any
reserves required by the Administrative Agent in its reasonable discretion,
including without limitation for market value declines, shrinkage and any
applicable customs, freight, duties and Taxes.
Eligible Work-in-Process Inventory shall mean, as to any Obligor, the gross
amount of such Obligor's Inventory that is subject to a valid, first priority
and fully perfected security interest in favor of the Administrative Agent, on
behalf of the Lenders, the Agents and the Issuing Bank, and which conforms to
the warranties contained herein and which, at all times, continues to be
acceptable to the Administrative Agent in the exercise of its reasonable
business judgment, less, without duplication, any (a) Inventory at the relevant
time treated as Eligible Raw Materials Inventory or Eligible Finished Goods
Inventory or OMC Reserve Inventory or Tooling, (b) supplies, (c) Inventory not
present in the United States or Canada or constituting a test count variance,
(d) Inventory not usable in the ordinary course of such Obligor's business to
produce Eligible Finished Goods Inventory and goods to be returned to such
Obligor's suppliers, (e) Inventory in transit to third parties (other than such
Obligor's agents or warehouses), or in the possession of a warehouseman, bailee,
third party processor, or other third party, unless such warehouseman, bailee or
third party has executed a notice of security interest agreement (in form and
substance satisfactory to the Administrative Agent) and the Administrative
Agent, on behalf of the Lenders, the Agents and the Issuing Bank, shall have a
first priority perfected security interest in such Inventory, and (f) less any
reserves required by the Administrative Agent in its reasonable discretion,
14
including without limitation for obsolete Inventory, market value declines,
shrinkage and any applicable customs, freight, duties and Taxes.
Environmental Laws shall mean all international, national, state, provincial,
regional, federal, municipal and local laws (including, without limitation,
principles of common law and decisional law), statutes, treaties, codes,
ordinances, rules, regulations, decrees, judgments, directives, binding
policies, permits, authorizations, consents, licenses, or orders relating to or
addressing the environment (including, without limitation, natural resources) or
the health or safety of humans or other living organisms.
Equipment shall mean, as to any Obligor, all of such Obligor's present and
hereafter acquired equipment (as defined in the UCC) including, without
limitation, all machinery, equipment, furnishings and fixtures, and all
additions, substitutions and replacements thereof, wherever located, together
with all attachments, components, parts, equipment and accessories installed
thereon or affixed thereto and all proceeds thereof of whatever sort.
ERISA shall mean the Employee Retirement Income Security Act of 1974, as amended
from time to time and the rules and regulations promulgated thereunder from time
to time.
ERISA Affiliate shall mean any corporation or trade or business which is a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as any Obligor or is under common control (within
the meaning of Section 414(c) of the Code) with any Obligor.
ERISA Event shall mean (a) with respect to a Plan subject to Title IV of ERISA,
a Reportable Event or an event described in Section 4068 of ERISA, (b) the
withdrawal of any Company or ERISA Affiliate from a Multiple Employer Plan
during a plan year in which it was a "substantial employer", as such term is
defined in Section 4001(a)(2) of ERISA, or the incurrence of liability by any
Company or ERISA Affiliate under Section 4064 of ERISA upon the termination of a
Multiple Employer Plan, (c) providing notice of intent to terminate a Plan
pursuant to Section 4041(c) of ERISA or the treatment of a Plan amendment as a
termination under Section 4041 of ERISA, (d) the institution of proceedings to
terminate a Plan by the PBGC under Section 4042 of ERISA, (e) a complete or
partial withdrawal by any Company or ERISA Affiliate from a Multiemployer Plan,
(f) a failure by any Company or ERISA Affiliate to make required contributions
to a Plan, (g) the imposition of any liability under Title IV of ERISA, other
than PBGC premiums due but not delinquent under Section 4007 of ERISA, upon any
Company or ERISA Affiliate, (h) an application for a funding waiver or an
extension of any amortization period pursuant to Section 412 of the Code with
respect to any Single Employer Plan, (i) the imposition of a lien upon any
Company or ERISA Affiliate pursuant to Section 412 of the Code or Section 302 of
ERISA, (j) any event or condition that results in the reorganization or
insolvency of a Multiemployer Plan under Section 4241 or 4245 of ERISA, (k) any
Company or ERISA Affiliate engages in a Prohibited Transaction or otherwise
becomes liable with respect to a Prohibited Transaction, or (l) any breach by
Harvard of the Agreement Between Harvard Industries, Inc. and the PBGC, dated
October 15, 1998 and as hereafter amended, or any action by the PBGC to enforce
the terms of such agreement.
15
Event(s) of Default shall have the meaning set forth in Paragraph 12.1 of
Section 12 of this Financing Agreement.
Excluded Property shall mean any contract, lease, license or other agreement
that contains a provision prohibiting the assignment or grant of a security
interest therein without the consent of another Person to the extent (but only
to the extent) that such consent has not been obtained and the prohibition
either exists on the date of this Financing Agreement or, after the date of this
Financing Agreement is included in such contract, lease, license or other
agreement with the prior written consent of the Agents and Required Facility
Lenders (other than any of the foregoing constituting an account or a general
intangible for money due or to be come due to which Section 9-318(4) of the UCC
applies). Notwithstanding anything set forth herein to the contrary, the
Administrative Agent will be deemed to have, and at all times to have had, a
security interest in the proceeds of such Excluded Property.
Excluded Stock shall mean capital stock of the subsidiaries of the Companies
that are organized outside the United States representing thirty-five percent
(35%) of their capital stock on the Closing Date.
Existing Credit Agreements shall have the meaning set forth in Paragraph 2.1(s)
of Section 2 of this Financing Agreement.
Existing Lender shall have the meaning set forth in Paragraph 2.1(t) of Section
2 of this Financing Agreement.
Federal Funds Rate shall mean, for any day, the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the quotations for
the day of such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
Federal Reserve Board shall mean the Board of Governors of the Federal Reserve
System.
Fiscal Quarter shall mean, with respect to the Obligors, each three (3) month
period ending on or about December 31, March 31, June 30 or September 30 of each
Fiscal Year.
Fiscal Year shall mean each twelve (12) month period commencing on October 1 of
each year and ending on the following September 30.
Fixed Charge Coverage Ratio shall mean, for the relevant period, the ratio
determined by dividing EBITDA by the sum of (a) all interest obligations paid or
due, (b) the amount of principal repaid or scheduled to be repaid on the Term
Loans, the Junior Secured Obligations and all other Indebtedness of the Obligors
and their subsidiaries other than (i) the Revolving Loans, (ii) Reimbursement
Obligations in respect of Letters of Credit and (iii) principal prepayments of
the Term Loans made pursuant to Section 7 of this Financing Agreement, (c)
Capital Expenditures actually incurred which were not financed or refinanced
hereunder, (d) all mandatory dividends and other distributions of a similar
nature made in cash by the Obligors to anyone other than Harvard or the other
Obligors, and (e) all federal, state, provincial and local income tax expenses
due and payable.
16
Fund shall mean any investment fund or commingled investment vehicle (however
organized) that invests in commercial loans or advances made under credit
agreements.
Funded Debt shall mean, with respect to the Obligors, without duplication, the
aggregate of all Indebtedness of the Obligors other than any referred to in
clause (b) of the definition of "Indebtedness" or in clause (d) of that
definition, to the extent that such Indebtedness under clause (d) arises in
respect of Indebtedness under clause (b) or clause (d) of that definition
including PIK interest. Without limiting the foregoing, Funded Debt shall
include the Obligations (including the L/C Obligations), the Guaranty
Obligations and the obligations of the Obligors under the Junior Lien Financing
Documents.
GAAP shall mean generally accepted accounting principles in the United States as
in effect from time to time and for the period as to which such accounting
principles are to apply, provided that in the event any of the Obligors modifies
its accounting principles and procedures as applied as of the Closing Date, such
Obligor shall provide to the Agents and the Lenders such statements of
reconciliation as shall be in form and substance acceptable to the Agents.
GECC shall mean General Electric Capital Corporation.
General Intangibles shall mean, as to any Obligor, all of each of such Obligor's
present and hereafter acquired general intangibles (as defined in the UCC), and
shall include, without limitation, all present and future right, title and
interest in and to: (a) all Trademarks, tradenames, corporate names, business
names, logos and any other designs or sources of business identities, (b)
Patents, together with any improvements on said Patents, utility models,
industrial models, and designs, (c) Copyrights, (d) trade secrets, (e) licenses,
permits and franchises, (f) all applications with respect to the foregoing, (g)
all right, title and interest in and to any and all extensions and renewals, (h)
goodwill with respect to any of the foregoing, (i) any other forms of similar
intellectual property, (j) all customer lists, distribution agreements, supply
agreements, blue prints, indemnification rights and Tax refunds, together with
all monies and claims for monies now or hereafter due and payable in connection
with any of the foregoing or otherwise, and all cash and non-cash proceeds
thereof, including, without limitation, the proceeds or royalties of any
licensing agreements between such Obligor and any licensee of any such Obligor's
General Intangibles other than Excluded Property.
GM Transition Supply Agreement shall mean the Transition Supply Agreement dated
as of January 1, 2001 between Harvard and Pottstown, on the one hand, and
General Motors Corporation, on the other hand.
Governmental Authority shall mean any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
Guarantors shall mean each of Trim Trends Canada Limited and 000000 Xxxxxx Inc.
and each other direct and indirect subsidiary of a Company that from time to
time becomes a "Guarantor" hereto pursuant to Paragraph 9.2(p) of Section 9 of
this Financing Agreement.
17
Guaranty shall have the meaning set forth in Paragraph 17.1(a) of Section 17 of
this Financing Agreement.
Guaranty Obligations shall have the meaning set forth in Paragraph 17.2(a) of
Section 17 of this Financing Agreement.
Harvard Obligations shall have the meaning set forth in Paragraph 17.1(a) of
Section 17 of this Financing Agreement.
Xxxxx-Albion shall mean Xxxxx-Albion Corporation or any successor.
Hedging Agreement shall mean, in relation to any Person, (a) any interest rate
protection agreement, interest rate future, interest rate option, interest rate
swap, interest rate cap or other interest rate hedge or arrangement to which
that Person is a party and (b) any other agreement, transaction or other
arrangement for the transfer or assumption of risk and/or exposure to
fluctuations in currency exchange rates, credit risk or any other variable that
is not within that Person's control.
Inactive Guarantor shall mean 177192 Canada Inc.
Indebtedness shall mean, without duplication, in relation to any Person, all
liabilities, contingent or otherwise, which are any of the following: (a)
obligations in respect of borrowed money (including obligations in respect of
interest that is capitalized or paid in kind (PIK interest)), (b) obligations
(contingent or other) in respect of any Hedging Agreement or the deferred
purchase price of property, services or assets, other than Inventory, (c)
Capital Lease obligations, (d) the maximum available amount of all standby
letters of credit or acceptances issued or created for the account of such
Person and (e) all other indebtedness of another Person assumed or guaranteed by
such Person, in respect of which such Person is secondarily liable, or which are
secured by a lien on any property of such Person, to the extent there is
recourse to such Person in respect of such liabilities, or to the extent of the
fair market value of the property which is subject to such lien, if less. The
Indebtedness of a Person shall include the Indebtedness of any partnership or
joint venture in which such Person is a general partner or joint venturer, but
only to the extent to which there is recourse to such Person for the payment of
such Indebtedness.
Insurance Proceeds shall mean proceeds or payments from an insurance carrier
with respect to any loss, casualty or damage to Collateral.
Intercompany Transfer shall mean any sale, lease, license, assignment, transfer
or other disposition (including without limitation any dividend or distribution)
of assets of any of the Obligors or any subsidiary of any of them that is to
another Obligor.
Intercreditor Agreement shall mean an intercreditor agreement, in form and
substance satisfactory to the Agents and the Lenders, among the Lenders, the
Junior Lien Lender and the Administrative Agent, in its capacity as such.
Interest Expense shall mean the total interest obligations (paid or accrued) of
the Obligors, determined in accordance with GAAP, applied on a consistent basis
with the latest audited financial statements of the Obligors.
18
Inventory shall mean, as to any Obligor, all of such Obligor's present and
hereafter acquired inventory (as defined in the UCC) and including, without
limitation, all merchandise, inventory and goods, and all additions,
substitutions and replacements thereof, wherever located, together with all
goods and materials used or usable in manufacturing, processing, packaging or
shipping same in all stages of production from raw materials through
work-in-process to finished goods.
Inventory Loan Cap shall mean the amount of $15,000,000.
Investment Property shall mean all present and hereafter acquired investment
property (as defined in the UCC), including, without limitation, (a) all
securities and capital stock or other interests in any other Person whether
certificated or uncertificated; all warrants, options and other rights to
acquire securities, capital stock or other interests in any other Person; all
securities entitlements; and all securities accounts, together with all
financial assets credited thereto; (b) all accessions and additions to,
substitutions for, and replacements, products and proceeds of any of the
foregoing, and, to the extent not otherwise included, all (c) payments under
insurance, or (d) any indemnity, warranty, guaranty or letter of credit, payable
by reason of loss or damage to or otherwise with respect to any of the
foregoing, and (e) any and all supporting obligations in respect of any of the
foregoing.
IP Security Agreement shall mean a security agreement, in form and substance
satisfactory to the Agents and the Lenders, pursuant to which each of Harvard,
Xxxxxxx-Xxxxxx, Inc., Harvard Industries Risk Management, Inc., Xxxxxx
Automotive, Inc. and Xxxxx-Albion grants to the Administrative Agent, for the
benefit of the Agents, the Issuing Bank and the Lenders, a security interest in
certain patents and other intellectual property rights and interests and related
Collateral to secure the Obligations.
Issuing Bank shall mean Citibank (understood to include any successor), as
issuer of any Letter of Credit (or, in substitution for Citibank, any Lender or
Affiliate of a Lender acceptable to the Agents, Harvard and the Required
Revolving Facility Lenders which assumes all functions, rights and obligations
under the Loan Documents given to the Issuing Bank, pursuant to an agreement
with and in form and substance satisfactory to Harvard and the Agents and the
institution previously acting as the Issuing Bank).
Junior Financing Agreement shall mean a financing agreement substantially in the
form of this Financing Agreement and, insofar as it is different, in form and
substance satisfactory to the Agents, between the Junior Lien Lender, the
Companies and the Guarantors and providing for a loan in an amount of
$10,000,000.00 to be made by the Junior Lien Lender to the Companies on the
terms and subject to the conditions set forth therein and in the Junior Lien
Lender's Commitment Letter.
19
Junior Lien Financing Documents shall mean the Junior Financing Agreement, the
promissory notes provided for therein, the Securities Purchase Agreement and the
security documents, substantially in the respective forms of the Security
Documents provided for herein, but providing for liens junior to the liens of
this Financing Agreement and the other Loan Documents, and other closing
documents substantially in the respective forms contemplated or required
hereunder, and any other ancillary loan and security agreements executed from
time to time in connection with Junior Secured Obligations, the Junior Secured
Guaranty Obligations or the Junior Financing Agreement.
Junior Lien Lender means Hilco Capital LP, in its capacity as lender under the
Junior Financing Agreement and, where relevant in the context, in its capacity
as party to the other Junior Lien Financing Documents.
Junior Lien Lender's Commitment Letter shall mean the Commitment Letter, dated
April 17, 2001, issued by the Hilco Capital LP to, and accepted by, the
Companies.
Junior Secured Guaranty Obligations shall have the meaning set forth in
Paragraph 14.2(b) of Section 14 of the Junior Financing Agreement.
Junior Secured Obligations shall mean all indebtedness and other obligations of
the Companies, or any one of them, which may at any time be owing by the
Companies or any one of them to the Junior Lien Lender under or in respect of
any of the Junior Lien Financing Documents or the transactions or interests
contemplated therein, whether such indebtedness is absolute or contingent, joint
or several, matured or unmatured, direct or indirect and whether the Companies
are liable to the Junior Lien Lender for such indebtedness and obligations as
principal, surety, endorser, guarantor or otherwise. Junior Secured Obligations
shall also include indebtedness owing to the Junior Lien Lender by the Companies
or any one of them under any Junior Lien Financing Document or under any other
agreement or arrangement now or hereafter entered into between the Companies and
the Junior Lien Lender; indebtedness or obligations incurred by, or imposed on,
the Junior Lien Lender as a result of environmental claims arising out of any of
the Companies' operations, premises or waste disposal practices or sites in
accordance with the Junior Financing Agreement and the Companies' liability to
the Junior Lien Lender as maker or endorser of any promissory note or other
instrument for the payment of money in connection with other Junior Secured
Obligations.
L/C Application shall have the meaning set forth in Paragraph 5.2 of Section 5
of this Financing Agreement.
L/C Eligible Account Parties shall mean each of the Companies and Trim Trends.
L/C Obligations shall mean at any time, an amount equal to the sum of (a) the
aggregate of the Letter of Credit Undrawn Amounts at the time and (b) the
aggregate of the Reimbursement Obligations at the time.
L/C Participant shall mean each Revolving Facility Lender.
L/C Participation shall have the meaning set forth in Paragraph 5.5 of Section 5
of this Financing Agreement.
L/C Participation Fee shall mean the fee the Administrative Agent and the
Revolving Facility Lenders may charge the Companies under Paragraph 10.3 of
Section 10 of this Financing Agreement for: (a) making extensions of credit by
taking L/C Participations hereunder, and/or (b) otherwise aiding the L/C
Eligible Account Parties, or any one of them, in obtaining Letters of Credit,
all pursuant to Section 5 hereof.
20
Lender shall mean each financial institution or other entity that (a) is listed
on the signature pages hereof as a "Lender" or (b) from time to time becomes a
party hereto by execution of an Assignment and Transfer Agreement.
Letter of Credit Sub-Line shall mean the commitment of the Issuing Bank to issue
Letters of Credit, pursuant to Section 5 hereof, in an aggregate amount of up to
$15,000,000.00 outstanding at any time (subject to reduction as contemplated in
this Financing Agreement), and the commitment of the Revolving Facility Lenders
to assist the Companies in obtaining those Letters of Credit by taking L/C
Participations.
Letter of Credit Undrawn Amounts shall mean, at any time, the aggregate undrawn
and unexpired face amount of all Letters of Credit outstanding at such time.
Letters of Credit shall mean all letters of credit issued in accordance with
Section 5 hereof by the Issuing Bank for or on behalf of any of the L/C Eligible
Account Parties.
Line of Credit shall mean the aggregate commitment of the Lenders (a) to make
Revolving Loans pursuant to Section 3 of this Financing Agreement, (b) as
Issuers, to assist any of the L/C Eligible Account Parties in opening Letters of
Credit pursuant to Section 5 of this Financing Agreement and (c) to make Term
Loan A pursuant to Section 4 of this Financing Agreement, in the aggregate
amount of $10,000,000.00, and (d) to make Term Loan B pursuant to Section 4 of
this Financing Agreement, in the aggregate of $10,000,000.00, provided that
nothing herein shall be deemed to increase any Lender's commitment hereunder, as
it shall be set forth in the applicable schedules prepared by the Administrative
Agent or in the Assignment and Transfer Agreements executed by such Lender, and
the aggregate amount of all such commitments shall not exceed $65,000,000.00.
Line of Credit Commitment Fee shall: (a) mean the fee due the Administrative
Agent, for allocation among the Lenders, at the end of each month beginning with
June 2001 for the Line of Credit, and (b) be determined by multiplying the
difference between (i) the Revolving Line of Credit and (ii) the sum, for that
month, of (x) the average daily balance of Revolving Loans plus (y) the average
daily balance of Letters of Credit outstanding for that month, by one half of
one percent (0.50%) per annum for the number of days in that month.
Loan Documents shall mean this Financing Agreement, the Promissory Notes, the
Security Documents, the L/C Applications, the Reimbursement Agreements, the
Intercreditor Agreement, the mortgages and/or deeds of trust, the other closing
documents and any other ancillary loan and security agreements executed from
time to time in connection with the Obligations, the Guaranty Obligations or
this Financing Agreement, all as may be renewed, amended, extended, increased or
supplemented from time to time.
Loans shall mean the Revolving Loans and the Term Loans, and each or any of
them.
Material Adverse Change shall mean a material adverse change in (i) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Obligors and their subsidiaries, taken as a
whole, since Xxxxx 00, 0000, (xx) the ability of the Obligors to perform their
21
respective obligations under the Loan Documents or the Junior Lien Financing
Documents or (iii) the ability of the Agents and the Lenders to enforce the Loan
Documents.
Material Adverse Effect shall mean a material adverse effect on (i) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Obligors and their subsidiaries, taken as a whole
or, for purposes of Paragraphs 9.1(o) and 9.2(k)(ii) of any Obligor taken
individually, in any case, since Xxxxx 00, 0000, (xx) the ability of the
Obligors to perform their respective obligations under the Loan Documents or the
Junior Lien Financing Documents or (iii) the ability of the Agents and the
Lenders to enforce, or the validity or enforceability of, the Loan Documents.
Minimum Availability shall mean, (a) on the Closing Date, $20,000,000, and (b)
thereafter, $5,000,000.
Multiemployer Plan shall mean a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which any Company or ERISA Affiliate is making or
accruing an obligation to make contributions, or with respect to which it has
any liability.
Multiple Employer Plan shall mean a Single Employer Plan, which (a) is
maintained for employees of any Company or ERISA Affiliate and at least one
Person other than any of the Companies or ERISA Affiliates or (b) was so
maintained and in respect of which any Company or ERISA Affiliate could have
liability under Section 4064 or 4069 of ERISA in the event such Plan has been or
were to be terminated.
Net Cash Proceeds shall mean, (i) with respect to any Disposition by any Obligor
or any of its subsidiaries, the amount of cash received (directly or indirectly)
from time to time (whether as initial consideration or through the payment of
deferred consideration) by or on behalf of such Obligor or such subsidiary, in
connection therewith after deducting therefrom only (A) the amount of any
Indebtedness secured by any lien permitted by Paragraph 9.2(j)(i) on any asset
(other than Indebtedness assumed by the purchaser of such asset) which is
required to be, and is, repaid in connection with such Disposition (other than
Indebtedness under this Financing Agreement), (B) reasonable expenses related
thereto incurred by such Obligor or such subsidiary in connection therewith, (C)
transfer taxes paid to any taxing authorities by such Obligor or such subsidiary
in connection therewith, and (D) net income taxes to be paid in connection with
such Disposition (after taking into account any tax credits or deductions and
any tax sharing arrangements) and (ii) with respect to the issuance or
incurrence of any Indebtedness by any Obligor or any of its subsidiaries, or the
sale or issuance by any Obligor or any of its subsidiaries of any shares of its
capital stock, the aggregate amount of cash received (directly or indirectly)
from time to time (whether as initial consideration or through the payment of
deferred consideration) by or on behalf of such Obligor or such subsidiary in
connection therewith, after deducting therefrom only (A) reasonable brokerage
commissions, underwriting fees and discounts, legal fees and similar fees and
commissions, (B) transfer taxes paid by such Obligor or such subsidiary in
connection therewith and (C) net income taxes to be paid in connection therewith
(after taking into account any tax credits or deductions and any tax sharing
arrangements).
22
Net Worth shall mean, at any date of determination, an amount equal to (a) Total
Assets minus (b) Total Liabilities, and shall be determined (i) amortizing
intangible assets applying on a consistent basis the principles and practices
applied in the Obligors' audited financial statements for the 2000 Fiscal Year,
(ii) excluding any extraordinary gains in any period beginning after March 31,
2001, and (iii) otherwise in accordance with GAAP, on a consistent basis with
the latest audited financial statements of the Obligors.
Nonconsensual Overadvances shall mean Overadvances to the extent they exist as a
result of (a) a decline in the value of any of the Collateral, (b) any act or
omission of any Company or Guarantor in violation of this Financing Agreement or
(c) any other circumstance that is not caused by the Administrative Agent or any
of the Lenders.
Obligations shall mean all loans, advances and extensions of credit made or to
be made hereunder or under any of the other Loan Documents by the Administrative
Agent, the Issuing Bank or the Lenders to the Companies, or any one of them, or
to others for the Companies' account in respect of any of the Loans (including,
without limitation, all Revolving Loans and Term Loans and all L/C Obligations);
any and all Indebtedness and obligations which may at any time be owing by the
Companies or any one of them to either Agent, the Issuing Bank or any of the
Lenders howsoever arising, whether now in existence or incurred by the Companies
or any one of them from time to time hereafter; whether principal, interest
(including, without limitation, all interest that accrues, after the
commencement of any case, proceeding or other action relating to bankruptcy,
insolvency or reorganization of any Obligor), fees, costs, expenses or
otherwise; whether secured by pledge, lien upon or security interest in any of
the Collateral, or any assets or property of any Person, firm, entity or
corporation; whether such Indebtedness is absolute or contingent, joint or
several, matured or unmatured, direct or indirect and whether the Companies are
liable to either Agent, the Issuing Bank or any of the Lenders for such
Indebtedness as principal, surety, endorser, guarantor or otherwise. Obligations
shall also include all Trim Trends L/C Reimbursement Obligations and Obligations
for interest and other amounts arising in respect thereof for all purposes
(except, in relation to Trim Trends itself, to the extent the inclusion would
give rise to a duplicative obligation of Trim Trends as Guarantor) and all other
Indebtedness owing to either Agent, the Issuing Bank or any of the Lenders by
the Companies or any one of them under any Loan Document (including the
obligations owing from time to time by the Companies to the Lenders by way of
subrogation of such Lenders to the rights of the Issuing Bank in respect of the
Letters of Credit, or under any other agreement or arrangement now or hereafter
entered into between the Companies and either Agent, the Issuing Bank or the
Lenders in connection with any of the Loan Documents; Indebtedness or
obligations incurred by, or imposed on, an Agent, the Issuing Bank or any of the
Lenders as a result of environmental claims arising out of any of the Companies'
operations, premises or waste disposal practices or sites; and the Companies'
liability to either Agent, the Issuing Bank or any of the Lenders as maker or
endorser of any promissory note or other instrument for the payment of money;
the Companies' liability to either Agent, the Issuing Bank or any of the Lenders
under any instrument of guaranty or indemnity, or arising under any guaranty,
endorsement or undertaking which such Agent, the Issuing Bank and/or such Lender
may make or issue to others for the Companies' account, including any
accommodation extended with respect to L/C Applications, an Agent's and/or a
Lender's or the Issuing Bank's acceptance of drafts or an Agent's and/or a
Lender's or Issuing Bank's endorsement of notes or other instruments for the
Companies' account and benefit in connection with other Obligations.
23
Obligor shall mean each of the Companies and each of the Guarantors.
OMC Reserve Inventory shall mean, at any time, reserve for unsaleable Inventory
manufactured for Outboard Marine Corporation which was purchased or manufactured
prior to December 31, 2000, that is maintained on the books and records of any
Obligor in a manner satisfactory to the Administrative Agent.
Operating Cash Flow shall mean EBITDA less Capital Expenditures consistently
applied.
Operating Leases shall mean all leases of property (whether real, personal or
mixed) other than Capital Leases.
Other Collateral shall mean, as to any Obligor, the Cash Collateral Account and
all of such Obligor's now owned and hereafter acquired lockbox, blocked accounts
and any other deposit accounts maintained with any bank or financial
institutions into which the proceeds of Collateral are or may be deposited; all
cash and other monies and property in the possession or control of the any
Agent, the Issuing Bank and/or any of the Lenders; all books, records, ledger
cards, disks and related data processing software at any time evidencing or
containing information relating to any of the Collateral described herein or
otherwise necessary or helpful in the collection thereof or realization thereon;
and all cash and non-cash proceeds of the foregoing; and all contract rights,
letters of credit, letter of credit rights, claims and causes of action, all
governmental approvals, licenses, franchises and authorizations, to the maximum
extent permitted by applicable law, in each case other than Excluded Property.
Out-of-Pocket Expenses shall mean all of the Agents' (and the Lenders' upon the
occurrence of an Event of Default which is not waived by the Required Lenders),
Issuing Bank's and Arrangers' present and future reasonable expenses (including
reasonable fees and expenses of counsel) incurred relative to this Financing
Agreement or any other Loan Documents (including without limitation, all due
diligence, syndication efforts and all efforts in connection with monitoring
and/or enforcing compliance with the terms of this Financing Agreement and any
other Loan Document ) whether incurred heretofore or hereafter; which expenses
shall include, without being limited to: the cost of record searches, all costs
and expenses incurred by the Agents or the Issuing Bank in opening bank
accounts, depositing checks, receiving and transferring funds, and wire transfer
charges, any charges imposed on an Agent due to returned items and "insufficient
funds" of deposited checks and the applicable Agent's standard fees relating
thereto, any amounts paid by, incurred by or charged to, an Agent and/or a
Revolving Facility Lender by the Issuing Bank in connection with an L/C
Participation or a Reimbursement Obligation in respect of any Letter of Credit
or in connection with an L/C Application or other like document which pertain
either directly or indirectly to such Letter of Credit, and any drafts
thereunder, travel, lodging and similar expenses of any Agent's personnel in
connection with inspecting and monitoring the Collateral for the Obligations and
the Guaranty Obligations from time to time hereunder, any applicable counsel
fees and disbursements relating to documenting, advising and enforcing the
Obligations and the Guaranty Obligations (which shall be understood to include,
without limitation, subsequent to the Closing Date, the Agents' and Issuing
Bank's standard fees and their standard allocated fees and expenses of internal
counsel relating to any and all modifications, waivers, releases, amendments or
additional collateral with respect to this Financing Agreement, the Collateral
and/or the Obligations and the Guaranty Obligations), fees and taxes relative to
24
the filing of financing statements, all expenses, costs and fees set forth in
Paragraph 14.3 of Section 14 of this Financing Agreement, and title insurance
premiums, real estate survey costs, costs of preparing and recording
mortgages/deeds of trust against the Real Estate.
Overadvance Rate shall mean a rate equal to one-half of one percent (1/2%) per
annum in excess of the applicable contract rate of interest determined in
accordance with Section 10, Paragraph 10.1(a) of this Financing Agreement.
Overadvances shall mean the amount by which (a) the sum of all outstanding
Revolving Loans, Letters of Credit and advances (other than Term Loans) made
hereunder exceed (b) the Borrowing Base.
Patents shall mean as to any Obligor, such Obligor's present and hereafter
acquired patents, patent applications, patent registrations, any reissues or
renewals thereof, any inventions and improvements claimed thereunder, patent
licenses, and all patent rights with respect thereto and all income, royalties,
cash and non-cash proceeds thereof.
PBGC shall mean the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA or any successor thereto.
Permitted Asset Transfer shall mean any sale, lease, license, assignment,
transfer or other disposition of assets of any of the Obligors that is any of
the following:
(i) an Intercompany Transfer;
(ii) a sale of Inventory in the ordinary course of business;
(iii) a license of intellectual property in the ordinary course
of business;
(iv) a sale, exchange or other disposition of obsolete or
surplus Equipment in the ordinary course of business; and
(v) a sale, exchange or other disposition of assets the fair
market value of which, when added to all other dispositions
not otherwise permitted by clauses (i) through (iv) hereof
or any other provision of this Financing Agreement, does
not exceed $250,000 in any consecutive period of twelve
(12) months;
provided that the aggregate Net Cash Proceeds to any Obligor of such sale,
exchange, license or other disposition of assets, if identified in any of
clauses (ii) through (v), are paid upon consummation of the sale, exchange,
license or disposition to the Administrative Agent for application to repayment
of the Revolving Loans or, if applicable, as otherwise required by Section 8 of
this Financing Agreement; and provided, further, that no sale, exchange, license
or other disposition of assets will constitute a Permitted Asset Transfer at any
time if it does not at the time also constitute a "Permitted Asset Transfer"
under and as defined in the Junior Financing Agreement as in effect on the
Closing Date.
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Permitted Encumbrances shall mean:
(a) liens existing on the date hereof on specific items of Equipment
and other liens expressly permitted, or consented to in writing by the
Agents and the Required Facility Lenders, as identified in Schedule 4;
(b) Purchase Money Liens;
(c) liens of local or state authorities for franchise or other like
Taxes, provided that the aggregate amounts of such Taxes secured by
such liens shall not exceed $100,000.00 in the aggregate at any one
time;
(d) statutory liens of landlords and liens of carriers, warehousemen,
bailees, mechanics, materialmen and other like liens imposed by law,
except for liens imposed by any Environmental Laws, created in the
ordinary course of business and for amounts not yet due (or which are
being contested in good faith, by appropriate proceedings or other
appropriate actions which are sufficient to prevent imminent
foreclosure of such liens) and with respect to which adequate reserves
or other appropriate provisions are being maintained by each of the
Obligors, as applicable, in accordance with GAAP;
(e) deposits made (and the liens thereon) in the ordinary course of
business of any of the Obligors (including, without limitation,
security deposits for leases, indemnity bonds, surety bonds and appeal
bonds) or in connection with workers' compensation, unemployment
insurance and other types of social security benefits or to secure the
performance of tenders, bids, contracts (other than for the repayment
or guarantee of borrowed money or purchase money obligations),
statutory obligations and other similar obligations arising as a result
of progress payments under government contracts;
(f) easements (including, without limitation, reciprocal easement
agreements and utility agreements), encroachments, minor defects or
irregularities in title, variation and other restrictions, charges or
encumbrances (whether or not recorded) affecting the Real Estate, if
applicable, and which in the aggregate (A) do not materially interfere
with the occupation, use or enjoyment by any of the Obligors of its
business or property so encumbered and (B) do not materially and
adversely affect the value of such Real Estate (i) in the reasonable
business judgment of the Agents and/or the Required Lenders;
(g) liens granted to the Administrative Agent by the Obligors or any
one of them to secure the Obligations and/or the Guaranty Obligations
arising under this Financing Agreement or the other Loan Documents;
(h) and liens junior thereto in the same collateral, granted to the
Junior Lien Lender by (i) the Companies or any one of them to secure
the Junior Secured Obligations and (ii) the Guarantors or any one of
them to secure the Junior Secured Guaranty Obligations, in the Junior
Financing Agreement or any other Junior Lien Financing Document as
approved of by the Agents and in existence on the Closing Date (but no
further or different lien, or change in any such lien, for the benefit
of the Junior Lien Lender shall be a Permitted Encumbrance unless its
creation or existence has received the prior written consent of the
Required Facility Lenders);
26
(i) liens of judgment creditors provided such liens do not exceed, in
the aggregate, at any time, $50,000.00 (other than liens bonded or
insured to the reasonable satisfaction of the Agents and/or the
Required Lenders);
(j) Tax liens which are not yet due and payable or which are being
diligently contested in good faith by the Obligors by appropriate
proceedings, and which liens are not (x) filed on any public records,
(y) other than with respect to Real Estate, senior to the liens of the
Administrative Agent; or (z) for Taxes due the United States or Canada
or any state or province thereof having similar priority statutes, as
further set forth in Paragraph 8.8 hereof;
(k) set-off rights arising in the ordinary course of business; and
(l) liens granted to General Motors Corporation in the Access and
Security Agreement as in effect on the Closing Date (but no further or
different lien or change in any such lien, for the benefit of the
General Motors Corporation, shall be a Permitted Encumbrance unless its
creation or existence has received the prior written consent of the
Agents and the Lenders.
Permitted Indebtedness shall exclude all Indebtedness in respect of Hedging
Agreements but otherwise shall mean: (a) current Indebtedness maturing in less
than one year and incurred in the ordinary course of business for raw materials,
supplies, equipment, services, Taxes or labor; (b) the Indebtedness secured by
Purchase Money Liens; (c) Indebtedness arising under the Letters of Credit and
this Financing Agreement; (d) the Junior Secured Obligations, on the terms
provided for in the Junior Lien Financing Documents as approved by the Agents on
the Closing Date; (e) deferred Taxes and other expenses incurred in the ordinary
course of business; (f) other Indebtedness existing on the date of execution of
this Financing Agreement and listed in the most recent financial statements
delivered to the Agents and the Lenders or otherwise disclosed to the Agents and
the Lenders in writing prior to the Closing Date; (g) Indebtedness between or
among the Obligors (provided that any instruments evidencing such Indebtedness
are Pledged Notes), and (h) unsecured Indebtedness of the Guarantors in an
aggregate principal amount not to exceed $1,000,000.00 at any one time
outstanding.
Permitted Liquidation shall mean, in relation to any Obligor, its dissolution or
liquidation at or after the transfer of all its remaining assets in an
Intercompany Transfer or otherwise as agreed upon in writing in advance by the
Agents and Required Facility Lenders.
Person shall mean an individual, corporation, limited liability company,
partnership, association, joint-stock company, trust, unincorporated
organization, joint venture or other enterprise or entity or Governmental
Authority.
Plan shall mean any Single Employer Plan or Multiemployer Plan.
Pledge Agreement shall mean a Pledge Agreement, in form and substance
satisfactory to the Agents and the Lenders, dated as of the Closing Date
executed by certain Obligors in favor of the Administrative Agent (on behalf of
the Agent, the Issuing Bank and the Lenders), which is to be delivered as
provided in Section 2, Paragraph 2.1(m) of this Financing Agreement.
27
Pledged Notes shall mean all promissory notes now or hereafter owned by any of
the Obligors.
Pledged Stock shall mean any and all of the capital stock (other than Excluded
Stock) of all subsidiaries of the Companies and the Guarantors now or hereafter
held by any of the Companies or the Guarantors.
Pottstown shall mean Pottstown Precision Casting, Inc.
PPSA shall mean the Personal Property Security Act (Ontario) as in effect from
time to time.
Prohibited Transaction shall mean any transaction set forth in Section 406 of
ERISA or Section 4975 of the Code for which there is no applicable statutory,
regulatory or administrative exemption (including a class exemption or an
individual exemption).
Promissory Notes shall mean the notes, in the form of Exhibits A and B attached
hereto, delivered by the Companies to the Administrative Agent to evidence any
Term Loan pursuant to, and repayable in accordance with, the provisions of
Section 4 of this Financing Agreement and the note, in the form of Exhibit C
attached hereto, delivered by the Companies to the Administrative Agent to
evidence the loans made under the Revolving Line of Credit pursuant to, and
repayable in accordance with this Financing Agreement.
Purchase Money Liens shall mean liens on any item of Equipment (1) acquired
after the date of this Financing Agreement provided that (a) each such lien
shall attach only to the property to be acquired, (b) a description of the
Equipment so acquired is furnished to the Administrative Agent, and (c) the
Indebtedness incurred in connection with such acquisitions shall not, in the
aggregate, exceed in any Fiscal Year the maximum amount of Capital Expenditures
for such Fiscal Year permitted pursuant to Paragraph 9.2(i)(ii) of Section 9 of
this Financing Agreement, unless consented to by the Agents and the Required
Lenders or (2) identified on Schedule 4, in the case of liens on any item of
Equipment existing on the date of this Financing Agreement.
Real Estate shall mean each of the Obligors' fee and/or leasehold interests in
the real property (other than the Miami Street, St. Louis, Missouri property),
including any such real property which has been, or will be, encumbered,
mortgaged, pledged or assigned to the Administrative Agent or its designee.
Register shall have the meaning specified in Paragraph 14.12(c) of Section 14
hereof.
Reimbursement Agreement shall have the meaning set forth in Paragraph 5.3 of
Section 5 of this Financing Agreement.
Reimbursement Obligations shall mean at any time the aggregate of the
liabilities of each of the L/C Eligible Account Parties to reimburse the Issuing
Bank pursuant to Section 5 for amounts that at or before that time have been
drawn under Letters of Credit (from the date of the drawing, regardless of
whether any notice remains to be given or any period remains to lapse before
such reimbursement is due).
Reorganization shall mean, with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of ERISA.
28
Reportable Event shall mean any of the events set forth in Section 4043(c) of
ERISA other than those events for which the notice requirement has been waived
under applicable regulations.
Required Facility Lenders shall mean, at any time, the Lenders whose aggregate
Commitments and outstanding Loans and L/C Participations at the time total more
than fifty percent (50%) of the Commitments and outstanding Loans at the time.
Required Lenders shall mean, in relation to any matter, the Lenders and, if
applicable, other Persons whose consent or approval is required under Paragraph
14.16 in relation to such matter.
Required Revolving Facility Lenders shall mean, at any time, the Revolving
Facility Lenders whose aggregate Revolving Credit Commitments and outstanding
Revolving Loans and L/C Participations at the time total more than fifty percent
(50%) of the Revolving Credit Commitments and outstanding Revolving Loans and
L/C Participations at the time.
Required Term Loan A Lenders shall mean, at any time, the Lenders whose
aggregate Term Loan A Commitments and pro rata shares of Term Loan A total more
than fifty percent (50%) of the Term Loan A Commitment and the outstanding
principal of Term Loan A.
Required Term Loan B Lenders shall mean, at any time, the Lenders whose
aggregate Term Loan B Commitments and pro rata shares of Term Loan B total more
than fifty percent (50%) of the Term Loan B Commitment and the outstanding
principal of Term Loan B.
Requirements of Law shall mean, as to any Person, the certificate of
incorporation or by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
Revolving Credit Commitment shall have the meaning set forth in the definition
of "Commitment" herein.
Revolving Credit Percentage shall mean, as to any Revolving Facility Lender at
any time, the percentage which such Lender's Revolving Credit Commitment then
constitutes of the aggregate Revolving Credit Commitments (or, at any time after
the Revolving Credit Commitments shall have expired or terminated, the
percentage which the aggregate principal amount of such Lender's Revolving Loans
then outstanding constitutes of the aggregate principal amount of the Revolving
Loans then outstanding).
Revolving Facility Lender shall mean each Lender with a Revolving Credit
Commitment or an outstanding Revolving Loan.
Revolving Line of Credit shall mean the aggregate commitment of the Revolving
Facility Lenders to make loans and advances to the Companies pursuant to Section
3 of this Financing Agreement and to acquire L/C Participations pursuant to
Section 5 hereof, in the aggregate amount of up to $45,000,000.00 outstanding at
any time (subject to reduction as contemplated in this Financing Agreement).
29
Revolving Loan Account(s) shall mean the account or accounts on the
Administrative Agent's books, in each Company's name (or the names of the
Companies collectively) in which each Company will be charged with all
applicable Obligations under this Financing Agreement.
Revolving Loans shall mean the loans and advances made, from time to time, to or
for the account of the Companies by the Administrative Agent on behalf of the
Lenders pursuant to Section 3 of this Financing Agreement and, subject to
Paragraph 6.5 of Section 6 of this Financing Agreement, the Reimbursement
Obligations that become Revolving Loans from time to time hereunder pursuant to
Paragraph 5.5 of Section 5 of this Financing Agreement and all other Obligations
(other than in respect of the principal of the Term Loans) that arise hereunder
or under any other Loan Document that are charged from time to time to the
Revolving Loan Account(s), as authorized herein or therein.
Secured Transaction Laws shall mean the Uniform Commercial Code as the same may
be amended and in effect from time to time in the State of New York, and the
Personal Property Security Act (Ontario), the expression Secured Transaction
Laws meaning each and every of these personal security statutes.
Security Documents shall mean the Pledge Agreement, the IP Security Agreement
and the mortgages and deeds to be executed and delivered as provided in Section
2.1, Xxxxxxxxx 0(x) of this Financing Agreement.
Settlement Date shall mean (a) with respect to the making of the Term Loans, the
Closing Date, and (b) the date, weekly (and more frequently, at the discretion
of the Administrative Agent, upon the occurrence of an Event of Default or a
continuing decline or increase of the Revolving Loans) on which the
Administrative Agent and the Lenders shall settle amongst themselves so that (x)
the Administrative Agent shall not have, as the Administrative Agent, any money
at risk and (y) on such Settlement Date the Lenders shall each have a pro rata
amount (proportionate to their respective Commitments) of all outstanding
Revolving Loans made (or deemed made) for the Lenders by the Administrative
Agent and so that the Lenders shall have received their respective pro rata
shares of all payments made or collections otherwise received on the Term Loans,
provided that each Settlement Date for a Lender shall be a Business Day on which
such Lender and its bank are open for business.
Single Employer Plan shall mean a "single-employer plan", as defined in Section
4001(a)(15) of ERISA, which any Company or ERISA Affiliate maintains,
administers, contributes to or is required to contribute to, or under which any
Company or ERISA Affiliate has any liability.
Stock Purchase Agreement shall mean the Stock Purchase Agreement to be executed
and delivered by Harvard under the Junior Lien Financing Documents.
Success Fee shall mean the fee the Lenders may charge the Companies as
contemplated in Paragraph 10.10 of Section 10 of this Financing Agreement.
Surplus Cash shall mean, for any Fiscal Year, without duplication, EBITDA plus,
without duplication, each of the following: (a) any income excluded in
calculating EBITDA that does not arise in the ordinary course of business, (b)
any cash gains arising from the sale, exchange or other disposition of assets
other than any Permitted Asset Transfer, (c) cash interest income, and (d) any
30
cash tax refund, less, without duplication, each of the following: (a) all cash
interest for such Fiscal Year, (b) any cash loss from the sale, exchange or
other disposition of assets, (c) the aggregate scheduled amounts of principal
paid or payable on the Term Loans and the term loan under the Junior Financing
Agreement, (d) the aggregate scheduled payments on Capital Leases, (e) all
Capital Expenditures actually made during such Fiscal Year which are not
financed, (f) all cash income Taxes for such Fiscal Year, (g) cash payments due
in respect of post-retirement employee benefit pension and workers compensation
obligations, and (h) mandatory prepayments made pursuant to Section 7 hereof or
Section 5 of the Junior Financing Agreement (as in effect on the date hereof) in
such Fiscal Year.
Taxes shall mean all federal, state, provincial, municipal and other
governmental taxes, levies, charges, claims and assessments which are or may be
due from the Companies or the Guarantors (as applicable) with respect to their
business, operations, Collateral or otherwise.
Term Loan A shall mean a term loan in the principal amount of $10,000,000.00
made by the Administrative Agent on behalf of certain Lenders pursuant to, and
repayable in accordance with, the provisions of Section 4 of this Financing
Agreement.
Term Loan A Commitment shall have the meaning set forth in the definition of
"Commitment" herein.
Term Loan A Lenders shall have the meaning set forth in Paragraph 4.1 of Section
4 hereof.
Term Loan A Maturity Date shall have the meaning set forth in Paragraph 4.3 of
Section 4 hereof.
Term Loan B shall mean a term loan in the principal amount of $10,000,000.00
made by the Administrative Agent on behalf of certain Lenders pursuant to, and
repayable in accordance with, the provisions of Section 4 of this Financing
Agreement.
Term Loan B Commitment shall have the meaning set forth in the definition of
"Commitment" herein.
Term Loan B Lenders shall have the meaning set forth in Paragraph 4.4 of Section
4 hereof.
Term Loan B Maturity Date shall have the meaning set forth in Paragraph 4.6 of
Section 4 hereof.
Term Loan Commitment shall have the meaning set forth in the definition of
"Commitment" herein.
Term Loan Promissory Note A shall mean the promissory note in the form of
Exhibit A hereto executed by the Companies to evidence Term Loan A made by the
Administrative Agent under Section 4 hereof.
Term Loan Promissory Note B shall mean the promissory note in the form of
Exhibit B hereto executed by the Companies to evidence Term Loan B made by the
Administrative Agent under Section 4 hereof.
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Term Loans shall mean the Term Loan A and the Term Loan B.
Termination Date shall mean May 31, 2004.
Tooling shall mean all tooling, fixtures, gauges, jigs, patterns, casting
patterns, dyes, cavities, moulds and documentation together with any accessions,
attachments, parts, accessories, substitutions, replacements and appurtenances
to any of the foregoing, but excluding machinery, Equipment and Equipment spare
parts.
Total Assets shall mean total assets of the Obligors determined in accordance
with GAAP, on a basis consistent with the latest audited financial statements of
the Obligors.
Total Liabilities shall mean total liabilities of the Obligors determined in
accordance with GAAP, on a basis consistent with the latest audited financial
statements of the Obligors.
Trade Accounts Receivable shall mean, with respect to an Obligor, that portion
of such Obligor's Accounts which arises from the sale of Inventory or the
rendition of services in the ordinary course of such Obligor's business.
Trademarks shall mean, as to any Obligor, all of such Obligor's present and
hereafter acquired trademarks, trademark registrations, trademark applications,
tradenames, trade styles, service marks, prints and labels (on which any of the
foregoing may appear), reissues and renewals of the foregoing, trademark
licenses, internet domain names and URLs and any trademark rights of the
Obligors pertaining to any of the foregoing, together with the goodwill
associated therewith, and all of the Obligors' cash and non-cash proceeds
thereof.
Trim Trends shall mean Trim Trends Canada Limited (or any successor).
Trim Trends L/C Reimbursement Obligation shall have the meaning specified in
Paragraph 5.6(a) of Section 5 of this Financing Agreement.
UCC shall mean the Uniform Commercial Code as the same may be amended and in
effect from time to time in the State of New York.
Unfunded Pension Liabilities shall mean, with respect to any Single Employer
Plan, any amount by which the present value of the aggregate benefit liabilities
under the Plan (whether or not vested), determined as of the date of such Plan's
most recent actuarial report on the basis of the actuarial assumptions specified
for funding purposes in such report, exceeds the aggregate current value of the
assets of such Plan allocable to such benefit liabilities as specified in such
report. For purposes of this definition of "Unfunded Pension Liabilities," the
term "benefit liabilities" has the meaning specified in Section 4001 of ERISA
and the terms "current value" and "present value" have the meaning specified in
Xxxxxxx 0 xx XXXXX.
Xxxxxx Xxxxxx shall mean the United States of America.
U.S. dollar or $ shall mean lawful currency of the United States.
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Voluntary Overadvances shall mean the Revolving Loans (if any) that constitute
Overadvances at the time they are made and shall exclude Nonconsensual
Overadvances.
Withdrawal Liability shall have the meaning set forth under Part I of Subtitle E
of Title IV of ERISA.
Working Capital shall mean Current Assets in excess of Current Liabilities.
Working Day shall mean any Business Day on which dealings in foreign currencies
and exchanges between banks may be transacted.
1.2 Construction of Certain Terms. (a) As used in this Financing Agreement,
(i) the words "hereof," "herein" and "hereunder" and words of similar import
refer to this Financing Agreement as a whole and not to any particular provision
of this Financing Agreement, and Paragraph, Section, Schedule and Exhibit
references are to this Financing Agreement unless otherwise specified; (ii) the
words "include," "includes" and "including" shall be deemed to be followed by
the phrase "without limitation," (iii) the word "or" shall not be exclusive,
(iv) the word "will" shall be construed to have the same meaning and effect as
the word "shall" and (v) the plural form of any term defined in the singular in
this Financing Agreement shall merely express the grammatical plural of that
defined term unless otherwise expressly provided herein.
(b) Unless the context requires otherwise (i) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to that agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(ii) any reference herein to any Person shall be construed to include that
Person's successors and assigns (without prejudice to any restrictions on
transfer or other consequences of a transfer contemplated herein), and (iii) the
words "asset" and "property" shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.
1.3 GAAP Terminology. (a) As used herein, and in the other Loan Documents,
accounting terms relating to any Obligor or any of its subsidiaries that are not
defined in Paragraph 1.1 of Section 1 and accounting terms that are partly
defined in Paragraph 1.1 of Section 1, to the extent not defined, shall have the
respective meanings given to them under GAAP, except as otherwise provided in
such Loan Document. All financial statements that any Obligor is required to
deliver hereunder shall be prepared in accordance with GAAP applied on a
consistent basis, except as otherwise expressly prescribed herein, subject to
the following paragraph and except that any financial statements which are not
audited shall not be required to have footnotes.
(b) If GAAP changes while any of the Obligations or Guaranty Obligations
remains outstanding or any Lender or the Issuing Bank has any further commitment
to make a Loan or issue a Letter of Credit hereunder and, as a result, the
financial covenants set forth in subparagraphs (h) and (i) of Paragraph 9.2 of
Section 9 would be calculated in a manner or with components different from
those applicable prior to the change, (i) the Obligors and the Lenders will
enter into good faith negotiations to amend this Financing Agreement in such
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respects as are necessary to conform those financial covenants as criteria for
evaluating the Obligors' financial condition to substantially the same criteria
as were effective prior to the relevant change in GAAP and (ii) the Obligors
shall be deemed to be in compliance with those financial covenants during the
period of 30 days beginning with the effective date of that change in GAAP if
and to the extent that the Obligors would have been in compliance therewith
under GAAP if the change had not occurred and compliance were tested applying
GAAP as in effect immediately before the change. At the end of that period of 30
days, if an amendment of the kind described above has not been executed by all
parties to this Financing Agreement, GAAP as modified by the relevant change
shall automatically be taken into account in determining whether the Obligors
are in compliance with those financial covenants.
(c) Any reference in this Financing Agreement or other Loan Documents to
"consolidating" balance sheets or other financial statements or to
"consolidating" Borrowing Base computations shall mean such balance sheets,
financial statements or Borrowing Base computations (in a format submitted to
and accepted by the Lenders) showing consolidating entries only for the major
entities listed below, some of which consist of multiple entities (and such
other entities as may become successors or transferees of any of the business
owned or operated on the date of this Financing Agreement by any entity listed
below (if such business would be consolidated in accordance with GAAP) and any
other direct or indirect subsidiary of Harvard, if consolidating balance sheets
or other financial statements are hereafter prepared by any such other
subsidiary):
Xxxxx-Albion (excluding Trim Trends)
Trim Trends
Harvard Electronics
Pottstown
Harvard Corporate/Other.
1.4 No Presumption in Construction. Neither this Financing Agreement nor
any other Loan Document nor any uncertainty or ambiguity herein or therein shall
be construed or resolved against any Lender, any Agent, or the Issuing Bank
under any rule of construction or otherwise merely by virtue of being a party
involved in its drafting. On the contrary, this Financing Agreement and the
other Loan Documents have been reviewed by each of the parties and their counsel
and shall be construed and interpreted according to the ordinary meaning of the
words used so as to fairly accomplish the purposes and intentions of the
parties.
1.5 Independence of Provisions. All agreements and covenants herein and in
the other Loan Documents shall be given independent effect so that, if a
particular action or condition is prohibited by the terms of any such agreement
or covenant, the fact that such action or condition would be permitted within
the limitations of another agreement or covenant shall not be construed as
allowing such action to be taken or condition to exist.
1.6 Inactive Guarantor. Notwithstanding anything else to the contrary
elsewhere in this Financing Agreement (including the definitions of the term
"Permitted Asset Transfer" and "Intercompany Transfer") none of the terms of
this Financing Agreement or any other Loan Documents shall be interpreted to
permit, or constitute the consent by the Agents, the Issuing Bank or the Lenders
to any transaction or action by the Inactive Guarantor (other than those
incidental to maintaining its existence and compliance with the Loan Documents
and the Junior Financing Documents or its liquidation or dissolution) or by any
other Obligor with the Inactive Guarantor.
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SECTION 2. Conditions Precedent
2.1 Conditions relating to the Closing Date
The obligation of the Administrative Agent, on behalf of the Lenders, and
the Lenders to make the initial loans to be made by them hereunder are subject
to the satisfaction of, extension of or waiver in writing of, on or prior to,
the Closing Date, the following conditions precedent:
(a) Lien Searches - The Administrative Agent shall have received Tax,
judgment and Secured Transaction Laws searches satisfactory to the Required
Facility Lenders for all locations presently occupied or used by each of the
Companies.
(b) Casualty Insurance - Each of the Obligors shall have delivered to the
Administrative Agent evidence satisfactory to the Required Facility Lenders that
casualty insurance policies listing the Administrative Agent as an additional
insured, loss payee or mortgagee, as the case may be, are in full force and
effect, all as set forth in Paragraph 9.2(d) of Section 9 of this Financing
Agreement (and the certificates evidencing such insurance shall be issued on
form Xxxxx 27).
(c) UCC Filings - Any financing statements required to be filed in order to
create, in favor of the Administrative Agent, on behalf of the Lenders, a first
perfected security interest in the Collateral, subject only to the Permitted
Encumbrances, shall have been properly filed in each office in each jurisdiction
required in order to create in favor of the Administrative Agent for the benefit
of the Agents, the Issuing Bank and the Lenders a first perfected lien on the
Collateral (subject only to Permitted Encumbrances). The Administrative Agent
shall have received acknowledgment copies of all such filings (or, in lieu
thereof, the Administrative Agent shall have received other evidence
satisfactory to the Required Facility Lenders that all such filings have been
made) and the Administrative Agent shall have received evidence that all
necessary filing fees and all Taxes or other expenses related to such filings
have been paid in full.
(d) Board Resolution - The Administrative Agent shall have received a copy
of the resolutions of the Board of Directors or shareholders of each of the
Obligors authorizing the execution, delivery and performance of each Loan
Document to which it is a party, in each case certified by the Secretary or
Assistant Secretary of each of the Obligors as of the date hereof, together with
a certificate of the Secretary or Assistant Secretary of each of the Obligors as
to the incumbency and signature of the officers of each of the Obligors
executing such Loan Documents and any certificate or other documents to be
delivered by them pursuant hereto, together with evidence of the incumbency of
such Secretary or Assistant Secretary.
(e) Corporate Organization - The Administrative Agent shall have received
(i) a copy of the certificate or articles of incorporation of each of the
Obligors certified by the Secretary of State or equivalent authority of the
jurisdiction of their incorporation, (ii) a copy of the by-laws of each of the
Obligors certified by the respective Secretary or Assistant Secretary
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thereof, all as amended through the date hereof, and (iii) evidence that each of
the Obligors is in good standing in the jurisdiction of its organization and
duly qualified to carry on business in each jurisdiction in which the character
of the properties owned or leased by it therein or in which the transaction of
its business makes such qualification necessary.
(f) Officer's Certificate - The Administrative Agent shall have received a
certificate of each of the Obligors, executed by an Authorized Officer in each
case, satisfactory in form and substance to the Agents, certifying that (i) the
representations and warranties of such Obligors contained herein and in the
other Loan Documents to which such Obligor is a party are true and correct in
all material respects on and as of the Closing Date; (ii) such Obligor is in
compliance with all of the terms and provisions set forth herein and in the
other Loan Documents to which such Obligor is a party and (iii) no Default or
Event of Default has occurred.
(g) Opinions - Counsel for the Obligors shall have delivered to the
Administrative Agent on behalf of the Lenders opinions satisfactory to the
Agents addressing and opining to such matters as the Agents and the Required
Facility Lenders shall reasonably request, including, without limitation, that,
subject to (i) the filing, priority and remedies provisions of the Secured
Transaction Laws and any applicable state or other laws relating to the
recording of the mortgage Liens on Real Estate created by the Security
Documents, (ii) the provisions of the Bankruptcy Code, insolvency statutes or
other like laws, (iii) the equity powers of a court of law and (iv) such other
matters as may be agreed upon with the Agents: (x) this Financing Agreement, and
all other Loan Documents of each of the Obligors (A) are valid, binding and
enforceable according to their terms, (B) are duly authorized, executed and
delivered, and (C) do not violate any terms, provisions, representations or
covenants in the charter or by-laws of any of the Obligors or, to the best
knowledge of such counsel, of any loan agreement, mortgage, deed of trust, note,
security or pledge agreement, indenture or other contract to which the Obligors,
or any one of them, are signatories or by which the relevant Obligors, or any
one of them, or their assets are bound; (y) the perfection of all security
interests purported to be granted in this Financing Agreement or under any other
Loan Document.
(h) Absence of Default; No Material Adverse Change - No Default or Event of
Default shall have occurred and be continuing and no Material Adverse Change
shall have occurred.
(i) Legal Restraints/Litigation - As of the Closing Date, there shall be
no: (x) litigation, investigation or proceeding (judicial or administrative)
pending or threatened against the Obligors, or any one of them, or their assets,
by any agency, division or department of any county, city, state, provincial or
federal government arising out of this Financing Agreement or any of the other
Loan Documents; (y) injunction, writ or restraining order restraining or
prohibiting the financing arrangements contemplated under this Financing
Agreement and the other Loan Documents; or (z) suit, action, investigation or
proceeding (judicial or administrative) pending against the Obligors, or any one
of them, or their assets, which, in the opinion of the Required Facility Lenders
(i) could reasonably be expected to result in a Material Adverse Change or, (ii)
except as set forth in Schedule 2 hereto, if adversely determined, could
reasonably be expected to have a Material Adverse Effect.
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(j) Intercreditor Agreement - Hilco Capital LP shall have executed and
delivered the Intercreditor Agreement to the Administrative Agent on behalf of
the Lenders, the Agents and the Issuing Bank, in form and substance satisfactory
to the Required Facility Lenders.
(l) Junior Lien Financing Documents - Hilco Capital LP and the Obligors
shall have executed and delivered the Junior Lien Financing Documents, which
shall in all respects be satisfactory in form and substance to the Required
Facility Lenders, as delivered to the Administrative Agent together with a
certificate of the Junior Lien Lender certifying that the copies of the Junior
Lien Financing Documents delivered to the Administrative Agent are true, correct
and complete and represent the entire agreement among the parties thereto
relating to the Junior Secured Obligations and the Junior Secured Guaranty
Obligations and liens and other interests granted for the benefit of the Junior
Lien Lender in relation to the Junior Secured Obligations and the Junior Secured
Guaranty Obligations.
(m) Financials; Projections - The Lenders shall have received and the
Required Facility Lenders shall be satisfied with (i) a pro forma estimated
balance sheet of the Obligors at the Closing Date giving effect to the
termination of the Existing Credit Agreements and the transactions contemplated
hereby, (ii) interim unaudited consolidated and consolidating monthly and
quarterly financial statements of the Obligors through the fiscal month ending
no earlier than forty-five (45) days prior to the Closing Date and (iii) the
Obligors' business plan, which shall include a financial forecast, including,
without limitation, cash projections and projections of Revolving Credit
Availability, in a format previously submitted to and accepted by the Lenders
and in substance reasonably satisfactory to the Required Facility Lenders, on a
monthly basis through June 30, 2002 and on an annual basis thereafter through
the year of the Termination Date and Term Loan B Maturity Date.
(n) Pledge Agreement and IP Security Documents - Each of Harvard, Xxxxxxx
Xxxxxx, Inc., Xxxxx-Albion and Trim Trends shall have executed and delivered to
the Administrative Agent on behalf of the Lenders, the Agents and the Issuing
Bank, (i) a Pledge Agreement granting a security interest to the Administrative
Agent on behalf of the Lenders, the Agents and the Issuing Bank as collateral
for the Obligations, in the case of the Companies, and in the case of Trim
Trends, its Guaranty Obligations, (x) all of the Pledged Notes held by the
Obligor and (y) all the Pledged Stock owned by such Company. In addition, the IP
Security Agreement shall have been executed and delivered to the Administrative
Agent on behalf of the Lenders, the Agents and the Issuing Bank by each of the
Companies identified as a required party in the definition of "IP Security
Agreement" in Paragraph 1.1 of Section 1 of this Financing Agreement.
(o) Stock Certificates, Notes and Resolutions - Each of the Obligors which
is a party to the Pledge Agreement shall have delivered to the Administrative
Agent on behalf of the Lenders, the Agents and the Issuing Bank the stock
certificates evidencing the Pledged Stock, together with duly executed stock
powers (undated and in blank) with respect thereto, and all instruments
evidencing the Pledged Notes, together with duly executed instruments of
assignment (undated and in blank) with respect thereto, all in form and
substance satisfactory to the Agents. In addition, each Obligor which holds any
of the capital stock of either Guarantor shall deliver to the Administrative
Agent such documents (including evidence of the adoption of
37
such resolutions) as the Agents may require to protect and preserve their rights
and enable them to enforce their rights and remedies in respect of such Pledged
Stock.
(p) Loan Documents; Additional Documents - (i) Each of the Agents and the
Lenders shall have received an original of each Loan Document necessary to
consummate the lending and other arrangements contemplated among the Obligors,
the Agents and the Lenders, each of which Loan Documents shall be duly executed
by the respective parties thereto, in each case in form and substance
satisfactory to the Agents and the Required Facility Lenders, and each such Loan
Document shall be in full force and effect; and (ii) the Agents shall have
received such other certificates, opinions and other documents as the Required
Facility Lenders reasonably may require.
(q) Disbursement Authorization - The Companies shall have delivered to the
Administrative Agent all information necessary for the Administrative Agent and
the Lenders to issue wire transfer instructions on behalf of each of the
Companies for the initial and subsequent loans and/or advances to be made under
this Financing Agreement including, but not limited to, disbursement
authorizations in form acceptable to the Agents.
(r) Examination & Verification - The Administrative Agent and each of the
Lenders shall have completed, to their respective satisfaction, an examination
and verification of the Accounts, Inventory, financial statements, books and
records of each of the Obligors which examination shall indicate that, after
giving effect to all Revolving Loans, advances and extensions of credit to be
made at closing, including the loan contemplated in the Junior Lien Financing
Documents, and the aggregate opening Availability shall be at least
$20,000,000.00, as evidenced by a Borrowing Base Certificate delivered by
Harvard to the Administrative Agent as of the Closing Date. It is understood
that such requirement contemplates that all debts, obligations, taxes and
dividends are current, and that all payables are being handled in the normal
course of the Obligors' business and consistent with their past practice.
(s) Existing Accounts; Depository Accounts - Each of the Obligors and each
of their subsidiaries shall have used its best efforts to cause each Existing
Lender, or if applicable, its agent, to assign its rights under the
concentration accounts existing on the date of this Financing Agreement to the
Administrative Agent, on behalf of the Agents, the Issuing Bank and the Lenders.
(t) Existing Credit Agreements - The Companies' existing credit agreement
with GECC, as agent, and the existing credit agreement of Trim Trends with
Canadian Imperial Bank of Commerce ("CIBC" and, together with GECC, the
"Existing Lenders" and each an "Existing Lender," and those agreements, the
"Existing Credit Agreements") shall be: (i) terminated; (ii) all loans and
obligations of the Obligors thereunder shall be paid and satisfied in full,
including through utilization of the proceeds of the initial Revolving Loans,
the Term Loans and the loan to be made under the Junior Lien Financing
Documents; and (iii) all liens or security interests in favor of the Existing
Lenders (which, in the case of GECC, shall include any liens and security
interests in favor of any agent acting on its behalf) which are on the
Collateral and otherwise in connection therewith shall be terminated and/or
released upon such payment, all to the satisfaction of the Required Facility
Lenders.
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(u) Mortgages/Deeds of Trust - Each Obligor shall have executed and
delivered to the Administrative Agent, an agent of the Administrative Agent or
to a title insurance company acceptable to the Agents, such mortgages and/or
deeds of trust (including, without limitation, the Canadian Debenture on the
Real Estate (and personal property) in Canada) as the Administrative Agent and
the Required Facility Lenders may reasonably require to obtain first liens on
the Real Estate owned by such Obligor on the Closing Date (which is identified
in Schedule 5), subject only to Permitted Encumbrances.
(v) Title Insurance Policies - The Administrative Agent shall have
received, in respect of each mortgage or deed of trust referred to in the
preceding paragraph (u), other than the Canadian Debenture's mortgage provisions
relating to Real Estate in Canada, a mortgagee's title policy or marked-up
unconditional binder for such insurance. Each such policy shall be in an amount
satisfactory to the Required Facility Lenders; (ii) insure that the mortgage or
deed of trust insured thereby creates a valid first lien on the property covered
by such mortgage or deed of trust for the benefit of the Administrative Agent,
on behalf of the Lenders, the Agents and the Issuing Bank in each case free and
clear of all defects and encumbrances except Permitted Encumbrances and all
other defects and encumbrances acceptable to the Agents. Each such policy
delivered to the Administrative Agent shall name the Administrative Agent on
behalf of the Lenders as the insured thereunder and contain such endorsements
and effective coverage as the Agents may reasonably request, including, without
limitation, the revolving line of credit endorsement. The Administrative Agent
shall also each have received evidence that all premiums in respect of such
policies have been paid and that all charges for mortgage recording Taxes, if
any, shall have been paid.
(w) Surveys - The Administrative Agent and, where applicable, the title
insurance company issuing each policy referred to in the immediately preceding
Paragraph (each, a "Title Insurance Company") shall have received (or the Agents
shall be satisfied with the arrangements and a committed schedule for the
subsequent receipt of) maps or plats of a perimeter or boundary of the site of
each of the properties covered by the mortgages or deeds of trust covered by
such policy, dated a date satisfactory to the Administrative Agent, the Required
Facility Lenders and the relevant Title Insurance Company prepared by an
independent professional licensed land surveyor satisfactory to the
Administrative Agent, the Required Facility Lenders and the relevant Title
Insurance Company; and there shall be surveyed and shown on the maps or plats or
surveys the following: (i) the locations on such sites of all the buildings,
structures and other improvements; (ii) any encroachments on any adjoining
property by the building, structures and improvements on the sites; and (iii) if
the site is designated as being on a filed map, a legend relating the survey to
said map; and (iv) such other matters as are covered by the surveys prepared in
connection with the Existing Agreements and related mortgages. Further, each
survey shall be certified to the Administrative Agent and the Title Insurance
Company.
(x) Appraisals - The Administrative Agent shall have received satisfactory
appraisals on each of the Obligors' Equipment and Real Estate, which appraisals:
(i) shall be by an appraiser acceptable to the Required Facility Lenders and to
the Junior Lien Lender, and (ii) shall indicate (A) with respect to Equipment,
an orderly liquidation value of not less than $41,125,000.00, and (B) with
respect to Real Estate, a fair market value of not less than $22,500,000.00.
39
(y) Environmental Report - The Administrative Agent shall have received
environmental audit reports on (i) all of each of the Obligors' leasehold and
fee interests, and (ii) the Obligors' operations and waste disposal practices.
The reports must (x) be satisfactory to the Required Facility Lenders and (y)
not disclose or indicate any material liability (real or potential) stemming
from the Obligors' premises, their operations, their waste disposal practices or
waste disposal sites used by Companies.
(z) Schedules - Each Obligor or its counsel shall have provided the
Administrative Agent with schedules of: (i) all of such Obligor's and its
subsidiaries' (A) Trademarks, (B) Patents, and (C) Copyrights, as applicable,
and all in such detail as to provide appropriate recording information with
respect thereto, (ii) any tradenames, (iii) monthly rental payments for any
leased premises or any other premises where any Collateral may be stored or
processed, (iv) all insurance policies of any nature maintained by an Obligor,
(v) all joint ventures or partnerships engaged in by an Obligor with any other
Person, and (vi) existing Indebtedness and Permitted Encumbrances, as well as
all other schedules required by this Financing Agreement or any of the other
Loan Documents, all of the foregoing in form and substance satisfactory to the
Required Facility Lenders.
(aa) The Commitment Letter - Each of the Obligors shall have fully
complied, to the reasonable satisfaction of the Agents, with all of the terms
and conditions of the Agents' Commitment Letter.
(bb) Consents; Requirements of Law - All necessary governmental and third
party consents and approvals necessary in connection with this Financing
Agreement and the transactions contemplated hereby shall have been obtained
(without the imposition of any conditions that are not reasonably acceptable to
the Required Facility Lenders) and shall remain in effect, unless the failure to
obtain and keep in effect any such third-party consent and approval has been
disclosed to the Agents and such failure could not reasonably be expected to
result in a Material Adverse Change; and all applicable governmental filings
shall have been made and all applicable waiting periods shall have expired
without in either case any action being taken by any competent authority; and no
law or regulation shall be applicable in the judgment of the Lenders that
restrains, prevents or imposes materially adverse conditions upon this Financing
Agreement or the transactions contemplated hereby.
(cc) Fees; Expenses - All fees and expenses (including, without limitation,
reasonable fees and expenses of counsel) required to be paid to the Agents,
Arrangers, the Issuing Bank and the Lenders on or before the Closing Date shall
have been paid.
(dd) ERISA - The Agents shall be satisfied that, as of the Closing Date, no
event or condition constituting an ERISA Event has occurred or exists with
respect to any Plan that could result in a Material Adverse Effect.
(ee) Access and Security Agreements; Transition Agreement - All matters
relating to each Access and Security Agreement and the GM Transition Supply
Agreement shall be satisfactory to the Required Facility Lenders. Without
limiting the foregoing, the Agents and the Lenders shall have received a
certification from the chief executive officer of Harvard that the Obligors are
not in violation of any terms of the Access and Security Agreements or
40
Transition Agreement and that, to the best knowledge of the Obligors, General
Motors Corporation has not asserted any rights of set-off against amounts due to
any of the Obligors by GM other than in the ordinary course of business, as well
as certified copies of amendments to each such agreement satisfactory to the
Required Facility Lenders, reflecting the security interests provided under the
Loan Documents to the Administrative Agent.
(ff) Canadian Collateral Account - The Administrative Agent and the
Required Facility Lenders shall be satisfied with all matters relating to
arrangements for payment of Accounts due from time to time to Trim Trends, and
any other active Obligor organized in Canada, directly to an account of Trim
Trends established and maintained with Canadian Imperial Bank of Commerce (the
"Canadian Deposit Account"), with acknowledgment by that depositary of the
security interest granted by the relevant Guarantor to the Administrative Agent
for the benefit of the Lenders, the Agents and the Issuing Bank (including
waiver by that depositary of any right of setoff that it might otherwise have in
respect of that account).
(gg) Cash Collateral Account - The Lenders shall be satisfied with all
arrangements relating to the establishment of an account subject to the lien
created by this Financing Agreement and the control of the Administrative Agent,
with a depository institution satisfactory to the Lenders, established for
amounts that the Companies may be required to maintain as cash Collateral
pursuant to this Financing Agreement (the "Cash Collateral Account").
(hh) Inactive Guarantor Certificate - The Administrative Agent shall have
received a certificate of Harvard, executed by an Authorized Officer, in form
and substance satisfactory to the Agents and the Lenders, certifying that the
Inactive Guarantor (i) is not currently actively engaged in business and (ii)
currently has no assets whatsoever (other than its corporate name, corporate
charter and goodwill) and the Administrative Agent and the Lenders shall be
satisfied with the truth and accuracy of such certifications.
(ii) Process Agent Acceptance - The Administrative Agent shall have
received evidence satisfactory to the Agents and Lenders that the Agent for
service of process appointed by each of the Obligors in Paragraph 14.9(d) of
this Financing Agreement, Section 9.9(d) of the Pledge Agreement and Section
5.06(d) of the IP Security Agreement, and has irrevocably accepted such
appointment.
Upon the execution of this Financing Agreement and the initial disbursement of
Loans, all of the above Conditions Precedent shall have been deemed satisfied or
waived as set forth above in the introductory paragraph of Paragraph 2.1 of this
Section 2 or as the Obligors and the Administrative Agent shall otherwise agree
in writing.
2.2 Conditions to Each Extension of Credit
Subject to the terms of this Financing Agreement, including without
limitation the Administrative Agent's rights pursuant to Paragraph 12.2 of
Section 12 hereof, the agreement of the Administrative Agent on behalf of the
Lenders, the Agents and the Issuing Bank to make any extension of credit
requested to be made by it to any of the Companies on any date (including
without limitation, the initial extension of credit hereunder, unless otherwise
specified below in this Paragraph), is subject to the satisfaction of the
following conditions precedent:
41
(a) Representations and Warranties - After giving effect to the extension
of credit requested to be made on such date, each of the representations and
warranties made by each of the Obligors in or pursuant to this Financing
Agreement or any other Loan Document shall be true and correct in all material
respects on and as of such date as if made on and as of such date except those
which are expressly made only as of the Closing Date and, if the Administrative
Agent or the Required Facility Lenders shall so request, the Obligors shall
deliver to the Administrative Agent a certificate to that effect.
(b) No Default - No Default or Event of Default shall have occurred and be
continuing on such date or after giving effect to the extension of credit
requested to be made on such date.
(c) Minimum Availability - Except as may be otherwise agreed to from time
to time by the Agents, the Lenders and the Companies in writing, in making the
request for the extension of credit the Companies shall have provided for
payment of all fees and expenses that at the time are payable hereunder and
under the other Loan Documents and, after giving effect to the extension of
credit on such date, the Availability shall be in an amount not less than the
Minimum Availability at the time.
(d) No Material Adverse Change - No Material Adverse Change shall have
occurred as of such date or after giving effect to the extension of credit
requested to be made on such date.
(e) Requirements of Law - The extension of credit requested to be made on
such date shall not violate any Requirement of Law and no Requirement of Law
shall be applicable in the judgment of the Lenders, in each case that restrains,
prevents, enjoins or imposes materially adverse conditions upon the transactions
contemplated by the Loan Documents or the rights of the Obligors or any of their
subsidiaries freely to transfer or otherwise dispose of, or to create any lien
on, any properties now owned or hereafter acquired by any of them.
(f) Existing Accounts; Deposit Accounts - With respect to each extension of
credit requested on or after the 45th date after the Closing Date, each of the
applicable Obligors and each of their subsidiaries shall have caused the
relevant Existing Agent to assign its rights under the concentration accounts
existing on the Closing Date to the Administrative Agent, on behalf of the
Lenders, the Agents and the Issuing Bank and shall have established and
maintained the Blocked Accounts and the main concentration accounts to the
satisfaction of the Administrative Agent and the Required Facility Lenders.
(g) Canadian Real Estate Title Insurance - With respect to each extension
of credit on or after June 5, 2001, the Administrative Agent shall have
received, in form and substance satisfactory to the Agents, title insurance with
respect to the Canadian Real Estate which satisfies the criteria set forth in
Paragraph 2.1(v) hereof.
Each borrowing by the Companies hereunder shall constitute a representation and
warranty by the Companies to the Agents, the Lenders and the Issuing Bank as of
the date of such loan or advance that each of the representations, warranties
and covenants contained in this Financing Agreement and the other Loan Documents
have been satisfied and are true and correct, in all
42
material respects, except those expressly made only as of the Closing Date and
except as the Companies and the Agents and/or the Required Facility Lenders
shall otherwise agree herein or in a separate writing.
2.3 Conditions Relating to Issuance of Letters of Credit
The obligation of the Issuing Bank to issue any Letter of Credit as
contemplated in Section 5 of this Financing Agreement is subject to the
satisfaction of each of conditions precedent set forth above in this Section 2
(as if the related request for issuance of the Letter of Credit were a request
for a borrowing from the Administrative Agent on behalf of the Revolving
Facility Lenders) as well as such additional conditions precedent as are set
forth in Section 5 and any related L/C Application or Reimbursement Agreement.
For all purposes of this Section 2, a renewal of a Letter of Credit shall be
treated as the issuance of a Letter of Credit.
SECTION 3. Revolving Loans
3.1 (a) Revolving Loans. Until the Termination Date, the Administrative
Agent and the Lenders, severally, agree, subject to the terms and conditions of
this Financing Agreement, from time to time, and within (x) Availability and (y)
the Revolving Line of Credit (but subject to the provisions of this Financing
Agreement on Overadvances), to make loans and advances to the Companies on a
revolving basis (i.e. subject to the limitations set forth herein, the Companies
may borrow, repay and re-borrow Revolving Loans). Such loans and advances to the
Companies shall be the joint and several obligations of the Companies and shall
be in amounts not to exceed the Borrowing Base. Except as otherwise expressly
provided in Paragraph 16.10 of Section 16 hereof, Voluntary Overadvances shall
be made by the Administrative Agent only with the consent of all the Lenders
and, when so required by the Intercreditor Agreement, with the consent of the
Junior Lien Lender, and in all cases, subject to any additional terms that the
Administrative Agent and/or the Revolving Facility Lenders deem necessary.
(b) Borrowing Requests and Procedures. (i) Whenever the Companies
desire the Administrative Agent, on behalf of the Revolving Facility Lenders, to
make a Revolving Loan pursuant to this Section 3, Harvard shall give the
Administrative Agent notice in writing or irrevocable telephonic notice
confirmed promptly in writing, specifying (A) the amount to be borrowed, and (B)
the requested borrowing date (which shall be a Business Day and shall be prior
to the third Anniversary Date, and if applicable, any Early Termination Date on
which the Revolving Credit Commitment is reduced to zero, or prior to any
effective termination date of this Financing Agreement, all as further set forth
herein). All requests for Revolving Loans pursuant to this provision must be
received by an officer of the Administrative Agent no later than 1:00 P.M. New
York time on any borrowing date. The procedure for Revolving Loans to be made on
a requested borrowing date may be such other procedure as is mutually
satisfactory to Harvard and the Administrative Agent. The Administrative Agent
shall make Revolving Loans to the account designated by Harvard for such
purpose.
(ii) Subject to Paragraph 16.10 hereof, should the Administrative Agent, on
behalf of the Revolving Facility Lenders, for any reason honor a request for a
Voluntary Overadvance, such Voluntary Overadvance shall be made by the
Administrative Agent only with the consent of
43
all the Revolving Facility Lenders and subject to any additional terms that the
Administrative Agent and/or the Revolving Facility Lenders deem necessary.
Requests for Voluntary Overadvances pursuant to this provision shall be made
solely by Harvard and shall be directed to the Administrative Agent.
(c) Funding Settlements. The Administrative Agent shall on any Settlement
Date, and upon notice given by the Administrative Agent no later than 2:00 P.M.
New York time, request each Lender to make, and each Lender hereby agrees to
make, a Revolving Loan in an amount equal to such Lender's Revolving Credit
Commitment percentage (calculated with respect to the aggregate Revolving Credit
Commitments then outstanding) of the aggregate amount of the Revolving Loans
made by the Administrative Agent from the preceding Settlement Date to the date
of such notice. Each Lender's obligation to make the Revolving Loans referred to
in subsection (a) and to make the settlements pursuant to this subsection (c)
shall be absolute and unconditional and shall not be affected by any
circumstance, including without limitation (i) any set-off, counterclaim,
recoupment, defense or other right which any such Lender or any of the Companies
may have against the Administrative Agent, the other Companies, any other Lender
or any other Person for any reason whatsoever; (ii) the occurrence or
continuance of a Default or an Event of Default; (iii) any adverse change in the
condition (financial or otherwise) of the Companies or any one of them; (iv) any
breach of this Financing Agreement or any other Loan Document by any of the
Companies, any Guarantor or any one of them or any other Lender; or (v) any
other circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing. Without limiting the liability and obligation of each Lender
to make such advances, the Companies authorize the Administrative Agent to
charge the Companies' Revolving Loan Account(s) with the Administrative Agent to
the extent amounts received from the Lenders are not sufficient to repay in full
the amount of any such deficiency.
(d) Revolving Loan Promissory Note. The Companies' Revolving Loan
Obligations hereunder, which are joint and several, shall be evidenced by
promissory notes in the form of Exhibit C attached hereto to be delivered by
each of the Companies.
3.2 Covenants Involving Accounts and Inventory. (a) In furtherance of
the continuing assignment and security interest by each Obligor in such
Obligor's Accounts and Inventory in favor of the Administrative Agent, for the
benefit of the Lenders, the Issuing Bank and the Agents, as security for the
Obligations, in the case of each Company, or, in the case of each Guarantor, as
security for its Guaranty Obligations (which shall be a first lien, senior to
the liens created in Junior Lien Financing Documents), each of the Obligors
will, upon the creation of Accounts and purchase or acquisition of Inventory,
execute and deliver to the Administrative Agent in such form and manner as the
Administrative Agent may reasonably require, solely for the Administrative
Agent's convenience in maintaining records of Collateral, such confirmatory
schedules of Accounts and Inventory as the Administrative Agent may reasonably
request, including without limitation, weekly schedules of Accounts and monthly
schedules of Inventory, all in form and substance satisfactory to the
Administrative Agent, and such other appropriate reports designating,
identifying and describing the Accounts and Inventory as the Administrative
Agent may reasonably request, and provided further that the Administrative Agent
may request any such information more frequently, from time to time, upon its
reasonable prior request.
44
(b) In addition, upon the Administrative Agent's request, each of the
Obligors shall provide the Administrative Agent with copies of agreements with,
or purchase orders from, such Obligor's customers, and copies of invoices to
customers, proof of shipment or delivery, access to their computers, electronic
media and software programs associated therewith (including any electronic
records, contracts and signatures) and such other documentation and information
relating to said Accounts and other Collateral as the Administrative Agent may
reasonably require. Failure to provide the Administrative Agent with any of the
foregoing shall in no way affect, diminish, modify or otherwise limit the
security interests granted herein. Each of the Obligors hereby authorizes the
Administrative Agent to regard the printed name or rubber stamp signature of
such Obligor on assignment schedules or invoices as the equivalent of a manual
signature by an Authorized Officers or agent of such Obligor.
3.3 Representations Regarding Accounts and Inventory. Each of the Obligors
hereby represents and warrants to the Agents and the Lenders that: each Trade
Account Receivable of such Obligor is based on an actual and bona fide sale and
delivery of Inventory or rendition of services to their respective customers,
any other Account of such Obligor is bona fide, made by such Obligor in the
ordinary course of its business; the Inventory of such Obligor being sold, and
Trade Accounts Receivable created, are the exclusive property of such Obligor
and are not and shall not be subject to any lien, consignment arrangement,
encumbrance, security interest or financing statement whatsoever, other than the
Permitted Encumbrances; the invoices evidencing such Trade Accounts Receivable
are in the name of such Obligor, as applicable; and the customers of the
relevant Obligor have accepted the Inventory or services, owe and are obligated
to pay the full amounts stated in the invoices according to their terms, without
dispute, offset, defense, counterclaim or contra, except for disputes and other
matters arising in the ordinary course of business with respect to which such
Obligor has complied with the notification requirements of Paragraph 3.5 of this
Section 3. Each Obligor confirms to the Administrative Agent and the Lenders
that any and all Taxes or fees relating to its business, its sales, the Accounts
or Inventory relating thereto, are its sole responsibility and that same will be
paid by such Obligor when due, subject to Paragraph 9.2(e) of Section 9 of this
Financing Agreement, and that none of said Taxes or fees represents a lien on or
claim against the Accounts. Each of the Obligors hereby further represents and
warrants to the Administrative Agent and the Lenders that such Obligor shall not
acquire any Inventory on a consignment basis, nor co-mingle its Inventory with
any of inventory of any of its customers or any other Person (other than
Inventory of another Obligor which constitutes Collateral), including pursuant
to any xxxx and hold sale or otherwise, and that such Obligor's Inventory is
marketable to its customers in the ordinary course of business of such Obligor,
except as such Obligor may otherwise report in writing to the Administrative
Agent pursuant to Paragraph 3.5 hereof from time to time.
3.4 Establishment of Blocked Accounts; Matters Relating to Accounts.
(a) (i) Until the Administrative Agent has advised the Obligors to the contrary
after the occurrence of an Event of Default, the Obligors, at their expense,
will enforce, collect and receive all amounts owing on their respective Accounts
in the ordinary course of their business and any proceeds they so receive shall
be subject to the terms hereof, and held on behalf of and in trust for the
Administrative Agent on behalf of the Lenders, the Issuing Bank and the Agents.
Such privilege shall terminate at the election of the Administrative Agent, upon
the occurrence of an Event of Default, and until such Event of Default is waived
in writing by the Required Facility Lenders or cured to the Administrative
Agent's and/or the Required Facility Lender's satisfaction.
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(ii) Each Obligor shall ensure that any checks, cash, credit card sales and
receipts, notes or other instruments or property received by such Obligor with
respect to any Collateral, including Accounts, shall be held by such Obligor in
trust for the Administrative Agent, on behalf of the Lenders, the Issuing Bank
and the Agents, separate from such Obligor's own property and funds, and
promptly turned over to the Administrative Agent with proper assignments or
endorsements by deposit to the Depository Account, subject to subparagraph (c)
of this Paragraph 3.4, where Trim Trends is concerned.
(iii) Each of the Obligors shall do each of the following, subject to
subparagraph (c) of this Paragraph 3.4 where Trim Trends is concerned: (A)
indicate on all of its invoices that funds should be delivered to and deposited
in a Blocked Account; (B) direct all payments due to any of the Obligors to be
made into a Blocked Account; (C) irrevocably authorize and direct any banks
which maintain the Obligors' initial receipt of cash, checks and other items to
promptly wire transfer all available funds to a Blocked Account; and (D) advise
all such banks of the Administrative Agent's security interest in such funds.
(iv) Each Obligor shall provide the Administrative Agent with prior written
notice of any and all deposit accounts opened or to be opened subsequent to the
Closing Date. All amounts received by the Administrative Agent in payment of
Accounts will be credited to the Revolving Loan Account when the Administrative
Agent is advised by its bank of its receipt of "collected funds" at the
Administrative Agent's bank account in New York, New York on the Business Day of
such advice if advised no later than 1:00 p.m. EST or on the next succeeding
Business Day if so advised after 1:00 PM EST. However, the Revolving Loan
Account will be charged monthly with the cost of one (1) additional Business Day
on all such collections at the interest rate (based upon the Citibank Base Rate)
applicable to Revolving Loans (the aggregate amount of such interest, the
"Collection Day Interest" for the relevant month). No checks, drafts or other
instrument received by the Administrative Agent shall constitute final payment
to the Administrative Agent and/or the Lenders or the Agents unless and until
such instruments have actually been collected.
(b) (i) The Obligors shall establish and maintain, in their name and at
their expense, the deposit accounts, including the Canadian Deposit Account,
with such banks as are acceptable to the Administrative Agent (the "Blocked
Accounts") into which each of the Obligors shall promptly cause to be deposited:
(i) all proceeds of Collateral received by any of the Obligors, including all
amounts payable to the Obligors from credit card issuers and credit card
processors, and (ii) all amounts on deposit in deposit accounts used by the
Obligors at each of their locations, all as further provided in Paragraph 3.4(a)
above.
(ii) The Obligors shall cause each of the banks at which any of the Blocked
Accounts is established to enter into an agreement, in form and substance
satisfactory to the Administrative Agent (the "Blocked Account Agreements"),
providing that (A) all cash, checks and items received or deposited in the
Blocked Accounts are the property of the Administrative Agent (or, in the case
of the Canadian Deposit Account, are subject to the lien of this Financing
Agreement in favor of the Administrative Agent), (B) the depository bank has no
lien upon, or right of set off against, the Blocked Accounts and any cash,
checks, items, wires or other funds from time to time on deposit therein, except
as otherwise provided in the Blocked Account Agreements, and (C), subject to
subparagraph (c) of this Paragraph 3.4, where Trim Trends is concerned,
46
automatically, on a daily basis the depository bank will wire, or otherwise
transfer, in immediately available funds, on a daily basis, all funds received
or deposited into the Blocked Accounts to such bank account as the
Administrative Agent may from time to time designate for such purpose. Each of
the Obligors hereby confirms and agrees that all amounts deposited in such
Blocked Accounts and any other funds received and collected by the
Administrative Agent, whether as proceeds of Inventory or other Collateral or
otherwise, shall be the property of the Administrative Agent.
(c) Notwithstanding anything to the contrary elsewhere in this Paragraph
3.4, but subject to the final sentence of this subparagraph (c), so long as
there is no continuing Default or Event of Default: (i) if Availability is
greater than $10,000,000 at any time, an average daily balance of the equivalent
of up to $1,000,000 may remain in the Canadian Deposit Account, and (ii) if
Availability is equal to or less than $10,000,000 at any time, an average daily
balance of the equivalent of up to $500,000 may remain in the Canadian Deposit
Account (the excess over any such permitted average daily balance, and all funds
in the Canadian Deposit Account at any time there is a Default or Event of
Default, an "Excess Amount"); and the amounts permitted by this sentence to
remain therein may be used by Trim Trends for its working capital purposes. The
provisions of this Paragraph 3.4(b), clause (ii)(C), requiring the automatic
daily wire or other transfer of funds to an account designated by the
Administrative Agent shall not apply to the depositary at which the Canadian
Deposit Account is maintained; however, the Administrative Agent is hereby
irrevocably authorized by Trim Trends to instruct that depositary to transfer
all Excess Amounts believed by the Administrative Agent to exist from time to
time as follows:
(1) at any time when a Default or Event of Default is continuing to an
account designated by the Administrative Agent for application to
repayment of the Revolving Loan; and
(2) at all other times, to a Blocked Account established and maintained in
the name of Xxxxx-Albion (or if such an account acceptable to the
Administrative Agent does not at the time exist, to a Blocked Account
established and maintained in the name of a Company to the
satisfaction of the Administrative Agent).
Xxxxx-Albion and each of the other Companies hereby irrevocably directs, and the
Administrative Agent hereby acknowledges, that all Excess Amounts transferred at
any time to a Blocked Account in the name of Xxxxx-Albion or such other Company,
as the case may be, shall be transferred directly from the Canadian Deposit
Account as provided above. The Administrative Agent shall have no responsibility
to any Person for any failure by it to give, or delay by it in giving, any
instructions of the kind referred to above in this subparagraph (c) in
connection with the Canadian Deposit Account. In addition, unless the
Administrative Agent, at the direction of the Required Facility Lenders, shall
determine otherwise, the first sentence of this subparagraph (c) shall cease to
apply if, by the fifteenth Business Day after the statement cutoff date for each
month or monthly fiscal period, and at such other times as the Administrative
Agent shall request, as promptly as practicable after the request, Trim Trends
shall have not caused the Administrative Agent to receive a correct and full
copy of a bank statement for the Canadian Deposit Account and each other account
maintained by Trim Trends.
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3.5 Reports Involving Accounts and Related Matters. The Obligors shall
notify the Administrative Agent: (a) of any matters affecting the value,
enforceability or collectibility of any Account and of all customer disputes,
offsets, defenses, counterclaims, returns, rejections and all reclaimed or
repossessed merchandise or goods, and of any adverse effect in the value of
their Inventory, in their weekly and monthly collateral reports (as applicable)
provided to the Administrative Agent hereunder, in such detail and format as the
Administrative Agent may reasonably require from time to time and (b) promptly
of any such matters which are material, as a whole, to the Accounts and/or the
Inventory. The Obligors agree to issue credit memoranda promptly (with
duplicates to the Administrative Agent upon request after the occurrence of an
Event of Default) upon accepting returns or granting allowances. Upon the
occurrence of an Event of Default (which is not waived in writing by the
Required Facility Lenders or cured to the satisfaction of the Required Facility
Lenders) and on notice from the Administrative Agent, the Obligors agree to
ensure that all returned, reclaimed or repossessed merchandise or goods shall be
set aside by the Obligors, marked with the Administrative Agent's name (as
secured party) and held by the Obligors for the Administrative Agent's account.
3.6 Revolving Loan Account. (a) Subject to the provisions of paragraph
(b) below, the Administrative Agent shall maintain a Revolving Loan Account on
its books in which each of the Companies will be charged with all Revolving
Loans, L/C Obligations and Voluntary Overadvances made or delivered by the
Administrative Agent to any of the Companies or for the account of any of the
Companies, and with any other Obligations (other than Term Loans), including any
and all costs, expenses and reasonable attorney's fees which the Administrative
Agent may incur in connection with the exercise by or for the Administrative
Agent of any of the rights or powers herein or in any other Loan Document
conferred upon the Administrative Agent, or in the prosecution or defense of any
action or proceeding to enforce or protect any rights of any of the Agents, the
Issuing Bank or any of the Lenders in connection with this Financing Agreement,
the other Loan Documents or the Collateral assigned hereunder, or any
Obligations. The Companies will be credited with all amounts received by the
Administrative Agent and/or the Lenders (or in respect of amounts owing to them
hereunder, the Issuing Bank or the Agents) from the Companies or from others for
the Companies' account, including, as above set forth, all amounts received by
the Administrative Agent in payment of Accounts, and such amounts will be
applied to payment of the Obligations as set forth herein. In no event shall
prior recourse to any Accounts or other security granted to or by the Companies
be a prerequisite to the Administrative Agent's right to demand payment of any
Obligation. Further, it is understood that the Agents, the Issuing Bank and/or
the Lenders shall have no obligation whatsoever to perform in any respect any of
the Obligors' contracts or obligations relating to the Accounts.
(b) In order to utilize the collective borrowing powers of the Companies
(collectively the "Collective Borrowers") in the most efficient and economical
manner, and in order to facilitate the handling of the accounts of the
Collective Borrowers on the Administrative Agent's books, the Collective
Borrowers have requested, and the Administrative Agent has agreed to handle
accounts of the Collective Borrowers on the Administrative Agent's books on a
combined basis, all in accordance with the following provisions:
(i) In lieu of maintaining separate accounts on the Administrative
Agent's books in the name of each of the Collective Borrowers, the
Administrative Agent shall
48
maintain one account under the name: Harvard Industries et al (herein the
"Collective Account"). Confirmatory assignments of Accounts will continue
to be made to the Administrative Agent by each of the Collective Borrowers.
Loans, L/C Obligations and Voluntary Overadvances made to any of the
Collective Borrowers will be joint and several obligations of the Companies
and charged to the Collective Account indicated above, along with any
charges and expenses under this Financing Agreement made in relation to any
of the Obligations. The Collective Account will be credited, with all
amounts received by the Administrative Agent from any of the Collective
Borrowers or from others for their account including all amounts received
by the Administrative Agent in payment of Accounts assigned to the
Administrative Agent as provided in this Financing Agreement.
(ii) Each month the Administrative Agent will render to the Collective
Borrowers one extract of the combined Collective Account, which shall be
deemed to be an account stated as to each of the Collective Borrowers and
which will be deemed correct and accepted by all of the Collective
Borrowers unless the Administrative Agent receives a written statement of
exceptions from them, through Harvard, within thirty (30) days after such
extract has been rendered by the Administrative Agent. It is expressly
understood and agreed by each of the Collective Borrowers that the
Administrative Agent shall have no obligation to account separately to any
of the Collective Borrowers.
(iii) Requests for Loans, L/C Obligations and Voluntary Overadvances
hereunder by the Administrative Agent on behalf of the Lenders and/or the
Lenders may be made by Harvard as agent for the Collective Borrowers and
the Administrative Agent is hereby authorized and directed to accept, honor
and rely on such instructions and requests, subject to the limitation and
provisions set forth in this Financing Agreement. It is expressly
understood and agreed by each of the Collective Borrowers that none of the
Agents, the Issuing Bank or the Lenders shall have any responsibility to
inquire into the correctness of the apportionment, allocation, or
disposition of (x) any Loans (including Overadvances), L/C Obligations made
to any of the Collective Borrowers or (y) any of the expenses and charges
of either Agent relating thereto. All loans and advances made by the
Administrative Agent (on behalf of the Lenders, the Agents and the Issuing
Bank) and/or the Lenders are made for the Collective Account.
(iv) The Collective Borrowers jointly and severally and
unconditionally guarantee to the Agents and the Lenders the prompt payment
in full of (A) all Loans (including Overadvances) and L/C Obligations made
and to be made hereunder by any Lender (directly or through the
Administrative Agent) to any of the Companies, as well as (B) all other
Obligations of the Collective Borrowers to the Agents and/or the Lenders
and hereby expressly confirm in all respects the agreements and instruments
executed by each of the Collective Borrowers in any Agent's and/or the
Lenders' favor as more fully set forth therein.
(v) All Accounts assigned to the Administrative Agent for the benefit
of the Lenders by any of the Collective Borrowers or any of their
subsidiaries and any other collateral security now or hereafter given to
the Administrative Agent and/or the Lenders by any of the Collective
Borrowers or any of their subsidiaries (be it Accounts or
49
otherwise), shall secure all Loans (including Overadvances) and L/C
Obligations made by the Lenders, directly or through the Administrative
Agent, to any of the Collective Borrowers, and shall be deemed to be
pledged to the Administrative Agent as security for any and all other
Obligations and Guaranty Obligations to the Agents, the Issuing Bank and/or
the Lenders as set forth under this Financing Agreement, or any other
agreements between any Agent and/or the Lenders and any of the Collective
Borrowers or Guarantors.
(vi) The handling of the accounts of the Collective Borrowers in a
combined fashion, as more fully set forth herein, is done solely as an
accommodation to the Collective Borrowers and at their request, and the
Agents, the Issuing Bank and Lenders shall incur no liability to the
Collective Borrowers as a result hereof.
It is expressly understood that the foregoing request was made because the
Collective Borrowers are engaged in an integrated operation that requires
financing on a basis permitting the availability of credit from time to time to
each of the Collective Borrowers as required for the continued successful
operation of each of the Collective Borrowers. Each of the Collective Borrowers
expects to derive benefit, directly or indirectly, from such availability since
the successful operation of each of the Collective Borrowers is dependent on the
continued successful performance of the functions of the integrated group. In
addition, the Companies have informed the Agents and the Lenders that:
(A) Harvard, in order to increase the efficiency and productivity of
each of the other Collective Borrowers, has centralized in itself a
cash management system which entails, in part, central disbursement
and operating accounts in which it provides the working capital needs
of each of the other Collective Borrowers and manages and timely pays
the accounts payable of each of the other Collective Borrowers;
(B) Harvard is further enhancing the operating efficiencies of the
other Collective Borrowers by purchasing, or causing to be purchased,
in its name for its account all materials, supplies, inventory and
services required by the other Collective Borrowers which will result
in reducing the operating costs of the other Collective Borrowers; and
(C) Since all of the Collective Borrowers are now engaged in an
integrated operation that requires financing on an integrated basis
and since each Collective Borrower expects to benefit from the
continued successful performance of such integrated operations and in
order to best utilize the collective borrowing powers of each
Collective Borrower in the most effective and cost efficient manner
and to avoid adverse effects on the operating efficiencies of each
Collective Borrower and the existing back-office practices of the
Collective Borrowers, each Collective Borrower has requested that all
Revolving Loans (including Overadvances) and
50
L/C Obligations be disbursed solely upon the request of Harvard and to
bank accounts managed solely by Harvard and that Harvard will manage
for the benefit of each Collective Borrower the expenditure and usage
of such funds.
3.7 Overadvances Due on Demand. In the event that any requested Revolving
Loan exceeds Availability or that (a) the sum of (i) the outstanding balance of
Revolving Loans and (ii) outstanding balance of Letters of Credit exceeds (b)(x)
the Borrowing Base or (y) the Revolving Line of Credit, any such Voluntary
Overadvance or Nonconsensual Overadvance shall be due and payable by the
Companies to the Administrative Agent on behalf of the Revolving Facility
Lenders immediately upon the Administrative Agent's demand therefor.
SECTION 4. Term Loans
By their execution and delivery of this Financing Agreement, the Companies
are irrevocably requesting that the Administrative Agent, on behalf of the Term
Loan A Lenders and the Term Loan B Lenders, make Term Loan A and Term Loan B to
the Companies on the Closing Date to the account specified by Harvard to the
Administrative Agent, as contemplated in this Section.
TERM LOAN A
4.1 Term Loan Promissory Note A. On the Closing Date, each Company hereby
agrees to execute and deliver to the Administrative Agent on behalf of the
Lenders a Term Loan Promissory Note A, to evidence Term Loan A to be extended by
the Administrative Agent on behalf of the Lenders with Term Loan A Commitments
(the "Term Loan A Lenders").
4.2 Term Loan A. Upon receipt of each such Term Loan Promissory Note A, the
Term Loan A Lenders hereby agree to extend to the Companies, as the Companies'
joint and several obligations, Term Loan A, on the terms and subject to the
conditions set forth in this Financing Agreement.
4.3 Payment of Principal of Term Loan A. The principal amount of Term Loan
A shall be repaid to the Administrative Agent on behalf of the Term Loan A
Lenders by the Companies, as the Companies' joint and several obligations, in 24
monthly principal installments payable on the first Business Day of each month
as set forth in the following table:
Post-Closing Month Monthly Payment
------------------ ---------------
1-3 $ 0.00
4-6 $208,334.00
7-23 $520,833.00
24 $520,837.00
The final maturity date for Term Loan A shall be two years from the Closing Date
(the "Term Loan A Maturity Date").
51
TERM LOAN B
4.4 Term Loan Promissory Note B. On the Closing Date, each Company hereby
agrees to execute and deliver to the Administrative Agent on behalf of the
Lenders with Term Loan B Commitments (the "Term Loan B Lenders") a Term Loan
Promissory Note B to evidence Term Loan B to be extended by the Administrative
Agent on behalf of the Lenders.
4.5 Term Loan B. Upon receipt of each such Term Loan Promissory Note B, the
Term Loan B Lenders hereby agree to extend to the Companies, as the Companies'
joint and several obligations, Term Loan B, on the terms and subject to the
conditions set forth in this Financing Agreement.
4.6 Payment of Principal of Term Loan B. The principal amount of Term Loan
B shall be repaid to the Administrative Agent on behalf of the Lenders by the
Companies, as their joint and several obligations, in 36 monthly principal
installments payable on the first Business Day of each month as set forth in the
following table:
Post-Closing Month Monthly Payment
------------------ ---------------
1-24 $ 0.00
25-35 $ 416,667.00
36 $5,416,663.00
The final maturity date for Term Loan B shall be three years from the Closing
Date (the "Term Loan B Maturity Date").
4.7 Payment of Term Loans Upon Termination. In the event this Financing
Agreement or the Line of Credit is terminated by the Administrative Agent, the
Required Lenders or the Companies or any one of them for any reason whatsoever
in accordance with the terms of this Financing Agreement, the Term Loans shall
become due and payable on the effective date of such termination notwithstanding
any provision to the contrary in the Promissory Notes or this Financing
Agreement.
SECTION 5. Letters of Credit
5.1 Letter of Credit Commitment. (a) On the terms and subject to the
conditions contained in this Financing Agreement, from time to time during the
period commencing on the Closing Date and ending on the earlier of the
termination of the Revolving Credit Commitment and thirty (30) days prior to the
Termination Date, the Issuing Bank agrees to issue one or more Letters of Credit
for the account of the L/C Eligible Account Parties, at the request of the L/C
Eligible Account Parties, made by Harvard, in accordance with Paragraph 5.2 of
this Section 5; provided, however, that the Issuing Bank shall be under no
obligation to issue any Letter of Credit if:
(i) any order, judgment or decree of any Governmental Authority or
arbitrator not in effect on the date of this Financing Agreement shall
purport by its terms to enjoin or restrain the Issuing Bank from
issuing such Letter of Credit or any Requirement of Law applicable to
the Issuing Bank or any request or directive (whether or not having
the force of law) from any
52
Governmental Authority with jurisdiction over the Issuing Bank shall
prohibit, or request that the Issuing Bank refrain from, the issuance
of letters of credit generally or such Letter of Credit in particular
or shall impose upon the Issuing Bank with respect to such Letter of
Credit any restriction or reserve or capital requirement (for which
the Issuing Bank is not otherwise compensated hereunder by an L/C
Eligible Account Party) or shall result in any unreimbursed loss, cost
or expense that was not applicable, in effect or known to the Issuing
Bank as of the date of this Financing Agreement and which the Issuing
Bank in good xxxxx xxxxx material to it;
(ii) the Issuing Bank shall have received written notice from the
Administrative Agent, any Lender or the Companies, on or prior to the
requested date of issuance of such Letter of Credit, that one or more
of the conditions contained in Section 2 applicable to the Issuing
Bank's obligation to issue such Letter of Credit is not then satisfied
(if not theretofore waived as provided herein);
(iii) after giving effect to the issuance of such Letter of Credit, the L/C
Obligations would exceed the Revolving Line of Credit as then in
effect or the Availability would not at least equal the Minimum
Availability;
(iv) after giving effect to the issuance of such Letter of Credit, the L/C
Obligations would exceed the Letter of Credit Sub-Line as then in
effect; or
(v) any fees due in connection with a requested issuance have not been
paid.
For all purposes of the foregoing and the other provisions of this Section 5,
the renewal of a Letter of Credit shall be treated as an issuance. None of the
Lenders (other than the Issuing Bank in its capacity as such) shall have any
obligation to issue any Letter of Credit.
(b) In no event shall the expiration date of any Letter of Credit (i) be
more than one year after the date of issuance thereof or (ii) be less than
thirty (30) days prior to the Termination Date. Any and all L/C Obligations in
respect of Letters of Credit issued hereunder shall be reserved dollar for
dollar from Availability as an Availability Reserve.
5.2 Procedure for Issuance of Letters of Credit. (a) In connection with the
issuance of each Letter of Credit, the L/C Eligible Account Parties, through
Harvard, shall give the Issuing Bank and the Administrative Agent at least two
Business Days' prior written notice, in such written or electronic form as is
acceptable to the Issuing Bank), of the requested issuance of such Letter of
Credit (an "L/C Application"). Such notice shall be irrevocable and shall
specify the stated amount of the Letter of Credit requested, which stated amount
shall not be less than $50,000 (unless otherwise agreed by the Issuing Bank),
the requested date of issuance of such Letter of Credit (which shall be a
Business Day), the date on which such Letter of Credit is to expire (which shall
be a Business Day), and the beneficiary of such requested Letter of Credit. Such
notice, to be effective, must be received by the Issuing Bank and the
Administrative Agent
53
not later than 12:00 noon (New York City time) on the second Business Day prior
to the requested date for issuance of such Letter of Credit.
(b) Subject to the satisfaction of the conditions applicable under
Paragraph 2.3 of Section 2 hereof to the issuance of Letters of Credit and the
conditions set forth in this Section 5, the Issuing Bank shall, on the requested
date, issue a Letter of Credit on behalf of the L/C Eligible Account Parties in
accordance with the Issuing Bank's usual and customary business practices. The
Issuing Bank shall not issue any Letter of Credit in the period commencing on
the first Business Day after it receives written notice from any Agent or Lender
that one or more of the conditions precedent contained in Paragraph 2.3 of
Section 2 hereof shall not on such date be satisfied (unless previously waived),
and ending when such conditions are satisfied or waived. The Issuing Bank shall
not otherwise be required to determine that, or take notice whether, the
conditions precedent set forth in Paragraph 2.3 of Section 2 hereof have been
satisfied or waived in connection with the issuance of any Letter of Credit.
5.3 Reimbursement Agreement. If requested by the Issuing Bank, prior to the
issuance of each Letter of Credit by the Issuing Bank, and as a condition of
such issuance and of the participation of each Revolving Facility Lender in the
L/C Obligations arising with respect thereto, the L/C Eligible Account Parties
shall have delivered to the Issuing Bank a letter of credit reimbursement
agreement, in such form as the Issuing Bank may employ in its ordinary course of
business for its own account, with such modification thereto as may be agreed
upon by the Issuing Bank and Harvard, on behalf of the L/C Eligible Account
Parties, and as are not materially adverse (in the judgment of the Issuing Bank
and the Agents) to the interests of the Lenders (a "Reimbursement Agreement"),
signed by each of the L/C Eligible Account Parties, and such other documents or
items as may be required pursuant to the terms thereof. It shall, however, be
understood the inclusion of Trim Trends as a party to a Reimbursement Agreement
shall be required only in connection with a Letter of Credit issued for the
account of Trim Trends. In the event of any conflict between the terms of any
Reimbursement Agreement and this Financing Agreement, the terms of this
Financing Agreement shall govern.
5.4 Responsibilities of Issuing Bank. The Issuing Bank shall:
(a) give the Administrative Agent written notice (or telephonic notice
confirmed promptly thereafter in writing), which writing may be a telecopy or
electronic mail, of the issuance or renewal of a Letter of Credit issued by it,
of all drawings under a Letter of Credit issued by it and of the payment (or the
failure to pay when due) by the L/C Eligible Account Parties of any
Reimbursement Obligation when due (which notice the Administrative Agent shall
promptly transmit by telecopy, electronic mail or similar transmission to each
Revolving Facility Lender);
(b) upon the request of any Agent or Lender, furnish to such Lender copies
of any Reimbursement Agreement to which the Issuing Bank is a party and such
other documentation as may reasonably be requested by such Agent or Lender; and
(c) no later than ten (10) Business Days following the last day of each
calendar month, provide to the Administrative Agent (and the Administrative
Agent shall provide a copy to each Lender requesting the same) a schedule of the
Letters of Credit issued by it, in form and
54
substance reasonably satisfactory to the Administrative Agent, setting forth the
aggregate L/C Obligations outstanding at the end of each month and any
information requested by the L/C Eligible Account Parties (through Harvard) or
the Administrative Agent relating thereto.
5.5 L/C Participations. Immediately upon the issuance by the Issuing Bank
of a Letter of Credit in accordance with the terms and conditions of this
Financing Agreement, the Issuing Bank shall be deemed to have sold and
transferred to each Revolving Facility Lender, and each Revolving Facility
Lender shall be deemed irrevocably and unconditionally to have purchased and
received from the Issuing Bank, without recourse or warranty, an undivided
interest and participation (each, an "L/C Participation"), to the extent of such
Revolving Facility Lender's Revolving Credit Percentage, in such Letter of
Credit and the Obligations of the L/C Eligible Account Parties with respect
thereto (including all L/C Obligations with respect thereto) and any security
therefor and the Guaranty and any other guaranty pertaining thereto.
5.6 Reimbursement Obligations. (a) The Companies shall pay to the
Issuing Bank the amount of all Reimbursement Obligations owing to the Issuing
Bank under any Letter of Credit issued for the account of any of the L/C
Eligible Account Parties, and Trim Trends shall pay to the Issuing Bank the
amount of all Reimbursement Obligations arising in connection with any Letter of
Credit issued for its account (the "Trim Trends L/C Reimbursement Obligations")
no later than the date (the "Reimbursement Date") which is one Business Day
after the L/C Eligible Account Parties receive written notice from the Issuing
Bank that payment has been made under such Letter of Credit, irrespective of any
claim, set-off, defense or other right that any of the L/C Eligible Account
Parties may have at any time against the Issuing Bank or any other Person.
(b) In the event that the Issuing Bank makes any payment under any Letter
of Credit and any of the L/C Eligible Account Parties shall not have repaid such
amount to the Issuing Bank pursuant to this Paragraph 5.6 or such payment is
rescinded or set aside for any reason, such Reimbursement Obligation shall be
payable by the Companies on demand with interest thereon computed (i) from and
including the date on which such Reimbursement Obligation arose to but excluding
the Reimbursement Date at the rate of interest applicable during such period to
Revolving Loans pursuant to Paragraph 10.1(a) of Section 10 of this Financing
Agreement and, (ii) from and including the Reimbursement Date to but excluding
the date of payment in full of such Reimbursement Obligation at the Default Rate
of Interest during such period, and the Issuing Bank shall promptly notify the
Administrative Agent, which shall promptly notify each Revolving Facility Lender
of such failure.
(c) Upon receipt of any such notice, the Administrative Agent, on behalf of
each Revolving Facility Lender, shall promptly and unconditionally pay to the
Issuing Bank the amount of such Revolving Facility Lender's Revolving Credit
Percentage of such payment in U.S. dollars and in immediately available funds.
If the Issuing Bank gives the relevant notice to the Administrative Agent prior
to 11:00 A.M. (New York City time) on any Business Day, the Administrative Agent
shall make available to the Issuing Bank each Revolving Facility Lender's
Revolving Credit Percentage of the amount of such payment on such Business Day
as provided above. Upon such payment by the Administrative Agent, each Revolving
Facility Lender shall, except during the continuance of a Default or Event of
Default under subparagraphs (a) through (c) of Paragraph 12.1 of Section 12
hereof and notwithstanding whether or not the conditions
55
precedent set forth in Paragraph 2.3 of Section 2 shall have been satisfied
(which conditions precedent the Lenders hereby irrevocably waive) be deemed to
have made a Revolving Loan to the Companies in the principal amount of such
Revolving Facility Lender's Revolving Credit Percentage of the total amount of
such payment.
(d) Whenever the Issuing Bank receives from any Obligor (or any of the
Collateral or by way of right of setoff) a payment of a Reimbursement Obligation
as to which the Administrative Agent, on behalf of the Revolving Facility
Lenders, has made a payment to the Issuing Bank pursuant to this Paragraph 5.6,
the Issuing Bank shall pay to the Administrative Agent (for distribution by the
Administrative Agent to each Revolving Facility Lender as provided in Paragraph
15.2 of Section 15 hereof), in immediately available funds, an amount equal to
such Revolving Facility Lender's Revolving Credit Percentage of the amount of
such payment (adjusted, as necessary, to reflect the respective amounts the
Revolving Facility Lenders have paid in respect of such Reimbursement Obligation
through any settlement required from them under Paragraph 15.2 of Section 15
hereof).
5.7 Payments by Revolving Facility Lenders. If and to the extent the
Administrative Agent, on behalf of the Revolving Facility Lenders, shall not
have so made the amount of any payment required by Paragraph 5.6 of this Section
5 available to the Issuing Bank, such amount shall be payable by the Revolving
Facility Lenders pro rata, in accordance with their respective Revolving
Facility Percentages thereof, forthwith on demand together with interest
thereon, for the first Business Day after payment was first due at the Federal
Funds Rate and, thereafter until such amount is paid to the Issuing Bank, at the
rate per annum applicable to Revolving Loans under Paragraph 10.1(a) of Section
10 of this Financing Agreement.
5.8 Reimbursement Obligations Absolute. The L/C Eligible Account Parties'
obligations to pay each Reimbursement Obligation and the obligations of the
Revolving Facility Lenders to make payments to the Administrative Agent for the
account of the Issuing Bank with respect to Letters of Credit shall be absolute,
unconditional and irrevocable and shall be performed strictly in accordance with
the terms of this Financing Agreement, under any and all circumstances
whatsoever, including the occurrence of any Default or Event of Default, and
irrespective of:
(a) any lack of validity or enforceability of any Letter of Credit or any
Loan Document, or any term or provision therein;
(b) any amendment or waiver of or any consent to departure from all or any
of the provisions of any Letter of Credit or any Loan Document;
(c) the existence of any claim, set off, defense or other right that the
L/C Eligible Account Parties, the Guarantors, any other party guaranteeing, or
otherwise obligated with, the L/C Eligible Account Parties, any subsidiary or
other affiliate thereof or any other Person may at any time have against the
beneficiary under any Letter of Credit, the Issuing Bank, the Administrative
Agent or any Lender or any other Person, whether in connection with this
Financing Agreement, any other Loan Document or any other related or unrelated
agreement or transaction;
56
(d) any draft or other document presented under a Letter of Credit proving
to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
(e) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the terms of
such Letter of Credit; and
(f) any other act or omission to act or delay of any kind of the Issuing
Bank, the Lenders, the Administrative Agent or any other Person or any other
event or circumstance whatsoever, whether or not similar to any of the
foregoing, that might, but for the provisions of this Paragraph 5.8 of this
Section 5, constitute a legal or equitable discharge of any L/C Eligible Account
Party's obligations hereunder or any Guarantor's obligations under the Guaranty.
5.9 Actions and Reliance by the Issuing Bank. Without prejudice to the
provisions of Section 16, in determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof, the Issuing
Bank may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary (subject to the gross negligence or willful
misconduct of the Issuing Bank) and, in making any payment under any Letter of
Credit the Issuing Bank may rely exclusively on the documents presented to it
under such Letter of Credit as to any and all matters set forth therein,
including reliance on the amount of any draft presented under such Letter of
Credit, whether or not the amount due to the beneficiary thereunder equals the
amount of such draft and whether or not any document presented pursuant to such
Letter of Credit proves to be insufficient in any respect, if such document on
its face appears to be in order, and whether or not any other statement or any
other document presented pursuant to such Letter of Credit proves to be forged
or invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever, and any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit with the terms thereof shall, in
each case, be deemed not to constitute willful misconduct or gross negligence of
the Issuing Bank. The Issuing Bank shall use reasonable efforts to notify
Harvard (which shall be solely responsible for further notice to the other L/C
Eligible Account Parties) prior to paying any Letter of Credit (it being
understood that the Issuing Bank shall have no liability to the L/C Eligible
Account Parties or the Guarantors for the Issuing Bank's failure to deliver such
notice). Notwithstanding anything herein to the contrary, nothing shall relieve
the Issuing Bank of liability for its own gross negligence or willful
misconduct, as finally determined by a court of competent jurisdiction.
SECTION 6. Termination or Reduction of Commitments; Reimbursement and Loan
Obligations Generally
6.1 Revolving Line of Credit. Subject to payment of any applicable Early
Termination Fee, Harvard, on behalf of the Obligors may, upon at least three
Business Days' notice to the Administrative Agent, terminate in whole or reduce
in part the unused portion of the Revolving Line of Credit (determined by
subtracting the sum (without duplication) of the Revolving Loans and the L/C
Obligations from the then total amount of the Revolving Line of Credit);
provided, however, that each partial reduction of the Revolving Line of Credit
(i) shall be in an aggregate amount of $5,000,000.00 or an integral multiple of
$1,000,000.00 in excess thereof and (ii) shall be made ratably among the Lenders
in accordance with their Revolving
57
Credit Commitments; and provided, further, that any mandatory prepayment
resulting from such reduction shall have been made in accordance with Section 7.
6.2 Term Loan A Commitments. On the date of each repayment or prepayment of
the Term A Loan, the aggregate Term A Commitments of the Lenders shall be
automatically and permanently reduced, on a pro rata basis, by an amount equal
to the amount by which the aggregate Term A Commitments immediately prior to
such reduction exceed the aggregate unpaid principal amount the Term A Loans
then outstanding.
6.3 Term Loan B Commitments. On the date of each repayment or prepayment of
the Term B Loan, the aggregate Term B Commitments of the Lenders shall be
automatically and permanently reduced, on a pro rata basis, by an amount equal
to the amount by which the aggregate Term B Commitments immediately prior to
such reduction exceed the aggregate unpaid principal amount the Term B Loans
then outstanding.
6.4 Letter of Credit Sub-Line. The Letter of Credit Sub-Line shall be
permanently reduced from time to time on the date of each reduction in the
Revolving Line of Credit so that, after giving effect to each reduction of the
Revolving Line of Credit the Letter of Credit Sub-Line equals one-third of the
Revolving Line of Credit.
6.5 Reimbursement and Loan Obligations Generally. The Companies and the
Guarantors confirm their understanding with the Agents, the Issuing Bank and the
Lenders that the amount of each payment made by the Issuing Bank under any
Letter of Credit shall thereafter until fully, finally and indefeasibly paid in
full by the Companies or the Guarantors constitute a Reimbursement Obligation
payable to the Issuing Bank and, in the circumstances contemplated in Paragraph
5.6(d) of Section 5 hereof, Obligations payable to the Lenders in respect of
Revolving Loans and, so long as there is no duplication in the treatment of any
such amount in the calculation of the Availability or the total of the
Obligations in respect of interest payable hereunder, its treatment as a
Reimbursement Obligation or an Obligation in respect of a Revolving Loan shall
be as determined by the Administrative Agent, the Issuing Bank and the Lenders
so as to reflect and preserve their respective rights and interests vis-a-vis
each other, the obligations of the L/C Eligible Account Parties to pay each such
amount in full and the related Guaranty Obligations of the Guarantors.
SECTION 7. Prepayments of Loans
7.1 Prepayments. For purposes of this Financing Agreement it should be
understood that, whenever it is stated that funds shall be applied to the
prepayment of all or any portion of the principal of any Loan, such application
shall be deemed to require simultaneous payment of interest accrued to but
excluding the date of prepayment, to the extent then unpaid.
7.2 Optional Prepayment of Term Loans. The Companies may, upon at least
three (3) Business Days' notice, prepay, at their option, in whole or in part,
the Term Loans (or either of them), provided that on each such prepayment, the
Companies shall pay: (a) accrued interest on the principal so prepaid to the
date of such prepayment, and (b) the Early Termination Fee, if any. Each such
partial prepayment shall be in an aggregate principal amount of $5,000,000.00 or
an integral multiple of $1,000,000.00 in excess thereof. Each partial prepayment
shall be applied
58
to installments of principal in the inverse order of their maturities. The
principal amount of any Term Loan that has been prepaid may not be reborrowed.
7.3 Mandatory Application of Certain Proceeds
To the extent that (x) there is any Surplus Cash for any Fiscal Year
beginning after September 30, 2001, and, in addition, (y) on any date on which
any of the Obligors receives Net Cash Proceeds from:
(A) the incurrence or issuance by any of the Obligors of any balance
sheet debt other than Permitted Indebtedness, or
(B) the sale or issuance of any equity securities and capital
contributions (other than in connection with (x) the capital stock of
Harvard issued pursuant to the Stock Purchase Agreement and any
warrants outstanding on the date of this Financing Agreement or (y)
the exercise of employee stock options or (z) securities issued or
capital contributions made to any Obligor) or
(C) any payment due under (i) the GM Transition Supply Agreement or
(ii) the Stock Purchase Agreement or (iii) the letter agreement with
GECC regarding, among other things, release of all liens and security
interests in favor of GECC, for itself or as agent under any Existing
Credit Agreement,
the Companies shall (1) apply an amount equal to 100% of the payment referred to
in clause (C), first, to prepay the outstanding Revolving Loans (without any
corresponding decrease in the Lenders' Commitments under the Revolving Line of
Credit), and, second, to prepay the principal installments of Term Loan B, in
inverse order of maturities, and then of Term Loan A, in inverse order of
maturities, in each case until the obligations in respect of Term Loan B and
Term Loan A, respectively, have been paid in full; and (2) apply an amount equal
to 100% of the other Net Cash Proceeds and Surplus Cash referred to above in
this Paragraph 7.3 to prepay the aggregate principal amount of the Term Loans
and the Revolving Loans. Each such prepayment under clause (2) of the preceding
sentence shall be applied first to prepay the principal installments of Term
Loan B in inverse order of maturities until the Obligations in respect of Term
Loan B have been repaid-in-full, second to prepay the principal installments of
Term Loan A in inverse order of maturities until the obligations in respect of
Term Loan A have been repaid-in-full, and third to repay the Revolving Loans
(without any corresponding decrease in the Lenders' Commitments under the
Revolving Line of Credit). The application of the amount of any such Surplus
Cash shall be so applied not later than one hundred (100) days after the end of
the relevant Fiscal Year in which such Surplus Cash was generated.
7.4 Mandatory Application of Insurance Proceeds and Sale of Asset
Proceeds. (a) On the date of receipt by any Obligor of
(i) Insurance Proceeds (other than Insurance Proceeds that are
reinvested in compliance with Paragraph 8.7), or
(ii) Net Cash Proceeds from the sale, lease, transfer or other
disposition of any assets of any of the Obligors (except for Permitted
Asset Transfers and as otherwise
59
provided in accordance with subparagraph (b) of this Paragraph 7.4 and
Paragraph 8.3(c) of Section 8),
the Companies shall prepay the aggregate principal amount of the Term Loans and
the Revolving Loans in an amount equal to 100% of the amount of said Insurance
Proceeds and/or net sale proceeds. Each such prepayment shall be applied (1) in
the case of Net Cash Proceeds of Accounts and/or Inventory, to repay the
Revolving Loans (without any corresponding decrease in the Lenders' Commitments
under the Revolving Line of Credit); and (2) in all other cases, (A) if the
Insurance Proceeds are less than $100,000.00, to repay the Revolving Loans
(without any corresponding decease in the Lenders' Commitments under the
Revolving Line of Credit) and (B), otherwise, first to prepay Term Loan B, in an
amount equal to such Insurance Proceeds, until the Obligations in respect of
Term Loan B have been paid-in-full, second (x) to the extent such Obligor does
not or cannot, or is not permitted under Paragraph 8.7 to, then use the
Insurance Proceeds for the repair, replacement or restoration of any Real Estate
and/or Equipment to prepay Term Loan A until the Obligations under Term Loan A
have been paid-in-full, or (y) to the extent such Obligor does (and under
Paragraph 8.7 is permitted to) use the Insurance Proceeds at the time for the
repair, replacement or restoration of Real Estate and/or Equipment, to repay the
Revolving Loans (without any corresponding decrease in the Lenders' Commitments
under the Revolving Line of Credit), and third to repay the Revolving Loans
(without any corresponding decrease in the Lenders' Commitments under the
Revolving Line of Credit); provided, however, that (i) with respect to any Net
Cash Proceeds from the sale of Pottstown fixed assets or operations, such
proceeds shall be applied equally to payment of the Obligations in respect of
the Revolving Loans (without any corresponding decrease in the Lenders'
Commitments under the Revolving Line of Credit) and Term Loan B and (ii) with
respect to Net Cash Proceeds from the sale of Pottstown accounts receivable
and/or Inventory, such proceeds shall be applied solely to payment of
Obligations in respect of the Revolving Loans (without any corresponding
decrease in the Lenders' Commitments under the Revolving Line of Credit). All
such mandatory prepayments of the Term Loans shall be applied to remaining
installments of the Term Loans in inverse order of maturity.
(b) Notwithstanding anything to the contrary in subparagraph (a) of this
Paragraph 7.4, so long as no Default or Event of Default is continuing at the
time any of the Obligors receives the Net Cash Proceeds from the sale of the
Real Estate identified in Schedule 5 as the Salem Property or the Xxxxxx
Property, $300,000 of the Net Cash Proceeds of each such sale need not be
applied to any repayment or prepayment of the Term Loan contemplated in
subparagraph (a) of this Paragraph 7.4 but shall be applied to prepay the
Revolving Loans (without any corresponding decrease in the Lender's Commitments
under the Revolving Line of Credit).
7.5 Other Mandatory Prepayments. As and when required by the Junior
Financing Agreement, the Companies shall prepay such of the Loans, and to such
extent, as is required therein and, if and to the extent there required, shall
deposit cash in U.S. dollars, by wire transfer of immediately available funds,
to the Cash Collateral Account, in respect of the L/C Obligations.
60
SECTION 8. Collateral for Obligations
8.1 Security Interest. As security for the prompt payment in full of all
Obligations (in the case of each Company) or all Guaranty Obligations (in the
case of each Guarantor), each of the Obligors hereby pledges and grants to the
Administrative Agent on behalf of the Lenders, the Issuing Bank and the Agents a
continuing general lien upon, and security interest in, all the assets of such
Obligor, including, without limitation, in the case of Harvard, all its rights
and interests in and under the Access and Security Agreements and the GM
Transition Supply Agreement, and in the case of all Obligors, all of their:
(a) Accounts;
(b) Inventory;
(c) General Intangibles;
(d) Documents of Title;
(e) Equipment;
(f) Real Estate;
(g) Investment Property other than the Excluded Stock; and
(h) Other Collateral; and
all cash and non-cash proceeds of any and all of the foregoing Collateral and,
to the extent not otherwise included, all payments under insurance (whether or
not the Administrative Agent is the loss payee thereof) and any indemnity,
warranty or guaranty payable by reason of loss or damages to or otherwise with
respect to any of the foregoing (all of the foregoing, collectively, the
"Collateral").
8.2 Related Collateral Matters and Financing Statements. The security
interests granted hereunder shall
extend and attach to:
(a) All Collateral which is owned by any of the Obligors or in which the
Obligors have any interest, whether held by the Obligors or held by others for
their account, and, if any Collateral is Equipment, whether the Obligors'
interest in such Equipment is as owner, finance lessee or conditional vendee;
(b) All Equipment, whether the same constitutes personal property or
fixtures, including, but without limiting the generality of the foregoing, all
Tooling dies, jigs, tools, benches, molds, tables, accretions, component parts
thereof and additions thereto, as well as all accessories, motors, engines and
auxiliary parts used in connection with, or attached to, the Equipment;
(c) All Inventory and any portion thereof which may be returned, rejected,
reclaimed or repossessed by either the Administrative Agent or any of the
Obligors from the Obligors'
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customers, as well as to all supplies, goods, incidentals, packaging materials,
labels and any other items which contribute to the finished goods or products
manufactured or processed by the Obligors, or to the sale, promotion or shipment
thereof; and
(d) The Administrative Agent is hereby authorized by each of the Obligors
to file (including pursuant to the applicable terms of the Secured Transaction
Laws) from time to time any financing statements, registrations, continuations
or amendments covering the Collateral whether or not the Obligors' signature(s)
appears thereon. Each Obligor hereby consents to and ratifies any and all
execution and/or filing of financing statements and or registrations on or prior
to the Closing Date by the Administrative Agent with respect to the Collateral.
8.3 Certain Dealings, Rights and Matters Relating to Collateral.
(a) Inventory. Each Obligor shall safeguard, protect and hold all Inventory
for the Administrative Agent's account and make no disposition thereof except
Permitted Asset Transfers. Each of the Obligors shall sell and ship Inventory to
its customers only in the ordinary course of such Obligor's business, and then
only on open account and on terms currently being extended by such Obligor to
its customers, provided that, absent the prior written consent of the
Administrative Agent and the Required Facility Lenders, such Obligor shall not
sell Inventory on a consignment basis nor retain any lien or security interest
in any sold Inventory. Upon the sale, exchange, or other disposition of
Inventory, as herein provided, the security interest in the Inventory provided
for herein shall, without break in continuity and without further formality or
act, continue in, and attach to, all proceeds, including any instruments for the
payment of money, Trade Accounts Receivable, documents of title, shipping
documents, chattel paper and all other cash and non-cash proceeds of such sale,
exchange or disposition. As to any such sale, exchange or other disposition, the
Administrative Agent shall have all of the rights of an unpaid seller, including
stoppage in transit, replevin, rescission and reclamation. Each of the Companies
shall immediately forward any and all proceeds of any sale or other disposition
of Inventory to the Depository Account, and hold any such proceeds (including
any notes and instruments), in trust for the Administrative Agent on behalf of
the Lenders pending delivery to the Administrative Agent. Irrespective of the
Administrative Agent's perfection status in any and all of the General
Intangibles, including, without limitations, any Patents, Trademarks, Copyrights
or licenses with respect thereto, each of the Obligors hereby irrevocably grants
the Administrative Agent on behalf of the Agents, the Issuing Bank and the
Lenders a royalty free license to sell, or otherwise dispose or transfer, in
accordance with Paragraph 12.3 of Section 12 of this Financing Agreement, and
the applicable terms hereof, of any of the Inventory upon the occurrence of an
Event of Default which has not been waived in writing by the Administrative
Agent.
(b) General Intangibles. Each of the Obligors shall maintain its rights in,
and the value of, its General Intangibles in the ordinary course of its
business, including, without limitation, by making timely payment with respect
to any applicable licensed rights, except for Permitted Asset Transfers. Each of
the Obligors shall deliver to the Administrative Agent, and/or shall cause the
appropriate party to deliver to the Administrative Agent, from time to time such
pledge or security agreements with respect to General Intangibles (now or
hereafter acquired) of such Obligor as the Administrative Agent shall (except as
to Excluded Property) require to obtain valid (and, subject to any Permitted
Encumbrance with priority) first liens
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thereon. In furtherance of the foregoing, each of the Obligors shall provide
timely notice to the Administrative Agent of any additional Patents, Trademarks,
tradenames, service marks, Copyrights, brand names, trade names, logos and other
trade designations acquired or applied for by such Obligor subsequent to the
Closing Date and each of the Obligors shall execute such documentation as the
Administrative Agent or the Required Facility Lenders may reasonably require to
obtain and perfect the Administrative Agent's lien thereon. Each of the Obligors
hereby irrevocably grants to the Administrative Agent on behalf of the Agents,
the Issuing Bank and the Lenders a royalty-free, non-exclusive license in the
General Intangibles, including tradenames, Trademarks, Copyrights, Patents,
licenses, and any other proprietary and intellectual property rights and any and
all right, title and interest in any of the foregoing, for the sole purpose,
upon the occurrence of an Event of Default, of the right to: (i) advertise for
sale and sell or transfer any Inventory bearing any of the General Intangibles,
and (ii) make, assemble, prepare for sale or complete, or cause others to do so,
any applicable raw materials or Inventory bearing any of the General
Intangibles, including use of the Equipment and Real Estate for the purpose of
completing the manufacture of unfinished goods, raw materials or work-in-process
comprising Inventory, and apply the proceeds thereof to the Obligations (in the
case of a Company) or the Guaranty Obligations (in the case of a Guarantor)
hereunder, all as further set forth in this Financing Agreement and irrespective
of the Administrative Agent's lien and perfection in any General Intangibles.
Notwithstanding any of the foregoing, an Obligor may, in the ordinary course of
its business, abandon any of its rights, title and interest in certain
Trademarks, Copyrights, Patents, licenses or any other proprietary or
intellectual property rights (collectively, the "IP Interest") if such IP
Interest has ceased to be useful to such Obligor; provided, that any abandonment
of an Obligor's IP Interest which is (x) identified in Schedule A or Schedule B
to the IP Security Agreement or (y) is necessary for the operation of any
material portion of any Obligor's business is subject to the delivery by such
Obligor with the IP Interest to the Administrative Agent and the Lenders of a
certificate of an Authorized Officer of such Obligor (which certificate shall be
in form and substance satisfactory to the Administrative Agent and the Lenders)
explaining the circumstances causing the applicable IP interest to cease to be
useful and; provided further that no such abandonment shall be allowed with
respect to any IP Interest referred to in clause (x) or clause (y) of the
preceding proviso which is maintainable merely by the payment of maintenance
fees.
(c) Equipment. Each of the Obligors shall use the Equipment owned by such
Obligor only in the business of the Obligors and such Equipment shall not be
held for sale or lease, or removed from their premises, or otherwise disposed of
by any Obligors except for Permitted Asset Transfers. Each of the Obligors
shall, at such Obligor's own cost and expense, keep the Equipment in as good and
substantial repair and condition as the same is now or at the time the lien and
security interest granted herein shall attach thereto, reasonable wear and tear
excepted, making any and all repairs and replacements when and where necessary.
Each of the Obligors shall safeguard, protect and hold all Equipment in
accordance with the terms hereof and subject to the Administrative Agent's
security interest. The proceeds of any Permitted Asset Transfer of Equipment
shall be held in trust by the Obligors for the Administrative Agent and shall be
immediately delivered to the Administrative Agent by deposit to the Depository
Account designated by the Administrative Agent, except that the Obligors may
retain and use such proceeds to purchase forthwith replacement Equipment which
the Obligors determine in their reasonable business judgment to have a
collateral value at least equal to the Equipment so disposed of or sold;
provided, however, that the aforesaid right shall automatically cease upon
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the occurrence of a Default or an Event of Default which is not waived in
writing by the Administrative Agent. Upon the sale, exchange, or other
disposition of the Equipment, as herein provided, the security interest provided
for herein shall, without break in continuity and without further formality or
act, continue in, and attach to, all proceeds, including any instruments for the
payment of money, Accounts, documents of title, shipping documents, chattel
paper and all other cash and non-cash proceeds of such sale, exchange or
disposition. As to any such sale, exchange or other disposition, the
Administrative Agent and the Lenders shall have all of the rights of an unpaid
seller, including stoppage in transit, replevin, rescission and reclamation.
(d) Pledged Stock and Pledged Notes. Each of the Obligors hereby confirms
that, if it is not a party to the Pledge Agreement on the date of this Financing
Agreement but thereafter obtains any Pledged Stock or Pledged Notes, it shall
promptly give notice to that effect to the Administrative Agent and become a
party to the Pledge Agreement through an amendment thereto, in form and
substance satisfactory to the Required Lenders, and pursuant to the Pledge
Agreement, it shall deliver, or cause to be delivered, all such Pledged Stock or
Pledged Notes to the Administrative Agent in accordance with the applicable
terms of the Pledge Agreement and, prior to such delivery, shall hold any such
stock in trust for the Administrative Agent.
8.4 Continuing Nature of Security Interest and Rights. The rights and
security interests granted to the Administrative Agent and the Lenders hereunder
are to continue in full force and effect, notwithstanding the termination of
this Financing Agreement or the fact that the Revolving Loan Accounts maintained
in the Companies' name on the books of the Administrative Agent may from time to
time be temporarily in a credit position, until the final payment in full to the
Administrative Agent of all Obligations and with respect to a Guarantor, all
Guaranty Obligations, and the termination of this Financing Agreement.
8.5 Administrative Agent's Exercise of Rights and Remedies. Notwithstanding
the Administrative Agent's security interest in the Collateral for the benefit
of the Lenders, the Issuing Bank and the Agents and to the extent that the
Obligations or Guaranty Obligations (as the case may be) are now or hereafter
secured by any assets or property other than the Collateral or by the guarantee,
endorsement, assets or property of any other Person, the Administrative Agent
shall have the right, pursuant to direction from the Required Facility Lenders,
to determine which rights, liens, security interests or remedies the
Administrative Agent shall at any time pursue, foreclose upon, relinquish,
subordinate, modify or take any other action with respect to, without in any way
modifying or affecting any of them, or any of the Administrative Agent's and/or
the Issuing Bank's or the Lenders' rights hereunder.
8.6 Application of Credit Balances as Security; Loan Account Charges. Any
balances to the credit of the Obligors, or any one of them, and any other
property or assets of the Obligors, or any one of them, in the possession or
control of the Administrative Agent and/or any of the Lenders may be held by
such Agent, the Issuing Bank or such Lender as security for any Obligations or
Guaranty Obligations (as the case may be) and applied in whole or partial
satisfaction of such Obligations or Guaranty Obligations (as the case may be)
when due. The liens and security interests granted herein, and any other lien or
security interest the any Agent, the Issuing Bank and/or the Lenders may have in
any other assets of the Obligors, shall secure payment and performance of all
now existing and future Obligations. The Administrative Agent
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may in its discretion charge any or all of the Obligations (other than the Term
Loans) to the Revolving Loan Account when due.
8.7 Insurance on Collateral. (a) At the request of any Obligor, or if
any Obligor fails to maintain insurance in respect of any of the Collateral as
required by Paragraph 9.2(d) of Section 9, or fails to provide the
Administrative Agent with timely evidence, acceptable to the Administrative
Agent, of its maintenance of such insurance coverage, the Administrative Agent
may purchase, at the Companies' or, in the case where such Obligor is a
Guarantor, the Guarantors', expense (as contemplated in subparagraph (d) of this
Paragraph of 8.7), arrange for and acquire insurance to protect the
Administrative Agent's interests in the Collateral, but at the Companies' or, in
the case where such Obligor is a Guarantor, the Guarantors', expense and without
any responsibility on the Administrative Agent's part for: (i) obtaining the
insurance; (ii) the solvency of the insurance companies; (iii) the adequacy of
the coverage; or (iv) the collection of claims. Upon the occurrence of an Event
of Default which is not waived in writing by the Required Facility Lenders, the
Administrative Agent shall, subject to the rights of any holders of Permitted
Encumbrances holding claims senior to the Administrative Agent, have the sole
right and at its option, in the name of the Administrative Agent or the Obligors
or any of them, to file claims under any insurance policies, to receive, receipt
and give acquittance for any payments that may be payable thereunder, and to
execute any and all endorsements, receipts, releases, assignments, reassignments
or other documents that may be necessary to effect the collection, compromise or
settlement of any claims under any such insurance policies.
(b) In the event of any loss or damage by fire or other casualty, Insurance
Proceeds relating to the Obligors' or an Obligor's Inventory shall be applied to
reduce the Obligations as provided by and in accordance with Paragraph 7.4 of
Section 7 or otherwise as provided therein. Upon the occurrence of a Default or
Event of Default, such Insurance Proceeds may be applied to the Obligations in
such order as the Administrative Agent may elect.
(c) In the event any part of the Obligors' or an Obligor's Real Estate or
Equipment is damaged by fire or other casualty and the Insurance Proceeds for
such damage or other casualty is less than or equal to $100,000.00, the
Administrative Agent shall promptly apply such proceeds in accordance with
Paragraph 7.4 of Section 7. Upon the occurrence of a Default or Event of
Default, such Insurance Proceeds may be applied to the Obligations in such order
as the Administrative Agent may elect.
(d) Absent the occurrence of an Event of Default (which has not been waived
in writing by the Required Lenders), and provided that (x) the Obligors have
sufficient business interruption insurance to replace the lost profits of any of
the Obligors' facilities, and (y) the Insurance Proceeds are in excess of
$100,000.00, Harvard may request the consent of the Agents and the Lenders (by
delivering a request to the Administrative Agent) to replace, repair or restore
such Real Estate or Equipment to substantially the equivalent condition prior to
such fire or other casualty as set forth herein. If Harvard is not permitted by
the Agents or the Lenders, or cannot, elect to use the Insurance Proceeds as set
forth above, the Administrative Agent may, subject to the rights of any holders
of Permitted Encumbrances holding claims senior to the Administrative Agent,
apply the Insurance Proceeds to the payment of the Obligations in such manner
and in such order as the Required Facility Lenders may reasonably elect.
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(e) If Harvard receives the written consent of the Administrative Agent and
elects to use the Insurance Proceeds for the repair, replacement or restoration
of any Real Estate and/or Equipment, and there is then no Event of Default,
Insurance Proceeds for any such loss in excess of $100,000.00 on Equipment
and/or Real Estate will be applied to the reduction of the Revolving Loans in
accordance with and pursuant to Paragraph 7.4 of Section 7, and the
Administrative Agent will set up an Availability Reserve for an amount equal to
such Insurance Proceeds. The Availability Reserve will be reduced
dollar-for-dollar upon receipt of evidence satisfactory to the Administrative
Agent of payment for or on account of the price for the replacement, repair or
restoration of Equipment and/or the Real Estate and disbursements in connection
therewith provided that the delivery or completion date, as applicable, is
determined by the Required Lender, in their reasonable business judgment, to be
sufficiently imminent to warrant the reduction and the Junior Lien Lender has
agreed with that determination. Prior to the commencement of any material
restoration, repair or replacement of Real Estate, Harvard shall provide the
Administrative Agent with a restoration plan and a total budget certified by an
independent third party experienced in construction costing. If there are
insufficient Insurance Proceeds to cover the cost of restoration as so
determined, the Companies and, if a Guarantor has an interest in the relevant
Real Estate and/or Equipment, such Guarantor shall be responsible for the amount
of any such insufficiency, prior to the commencement of restoration and shall
demonstrate evidence of such before the reserve will be reduced. Completion of
restoration shall be evidenced by a final, unqualified certification of the
design architect employed, if any; an unconditional Certificate of Occupancy, if
applicable; such other certification as may be required by law; or if none of
the above is applicable, a written good faith determination of completion by
Harvard (herein collectively the "Completion"). Upon Completion, any remaining
reserve as established hereunder will be automatically released.
(f) Any insurance acquired by the Administrative Agent as contemplated in
subparagraph (a) of this Paragraph 8.7 may, but need not, protect the Obligors'
respective interests in the Collateral, and therefore the Obligors acknowledge
that such insurance may not pay claims which the Obligors may have with respect
to the Collateral or pay any claim which may be made against the Obligors in
connection with the Collateral. In the event the Administrative Agent purchases,
obtains or acquires insurance covering all or any portion of the Collateral, the
Companies and, if a Guarantor has an interest in such Collateral, such
Guarantor, shall be responsible for all of the applicable costs of such
insurance, including premiums, interest (at the applicable Citibank Base Rate
for Revolving Loans set forth in Paragraph 10.1 of Section 10 hereof), fees and
any other charges with respect thereto, until the effective date of the
cancellation or the expiration of such insurance. The Administrative Agent may
charge all of such premiums, fees, costs, interest and other charges to the
Companies' Revolving Loan Accounts. Each of the Companies hereby acknowledges
that the costs of the premiums of any insurance acquired by the Administrative
Agent may exceed the costs of insurance which the Companies may be able to
purchase on their own. In the event that the Administrative Agent purchases such
insurance, the Administrative Agent will notify Harvard of said purchase within
thirty (30) days of the date of such purchase. If, within thirty (30) days after
the date of such notice, Harvard provides the Administrative Agent with proof
that the Obligors had the insurance coverage required pursuant to Paragraph
9.2(d) (in form and substance satisfactory to the Administrative Agent) as of
the date on which the Administrative Agent purchased insurance and the Companies
continued at all times to have such insurance, then the Administrative Agent
agrees to cancel the insurance purchased by the Administrative Agent and credit
the Companies' Revolving Loan Account with the amount of all
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costs, interest and other charges associated with any insurance purchased by the
Administrative Agent, including with any amounts previously charged to any
Revolving Loan Accounts.
8.8 Taxes Relating to Collateral. If, notwithstanding the Obligors'
covenants regarding the payment of Taxes, in Paragraph 9.2(e), any lien shall be
filed or claimed (i) for Taxes due the United States or Canada or any state or
province of either such jurisdiction, or (ii) which in the Administrative
Agent's opinion might create a valid obligation having priority over the rights
granted to the Administrative Agent herein (exclusive of Real Estate), such lien
shall not be deemed to be a Permitted Encumbrance hereunder and the Obligors
(and, if such lien relates to any asset of a Guarantor, such Guarantor) shall
immediately pay such Taxes and remove the lien of record. If the Companies or
any one of them or, if applicable, a Guarantor, fails to do so promptly, then
the Administrative Agent may (or, upon direction of the Required Facility
Lenders, shall) do either of the following, in its discretion: (a) create an
Availability Reserve in such amount as it may deem appropriate in its business
judgement, or (b) upon the occurrence of a Default or Event of Default, imminent
risk of seizure, filing of any priority lien, forfeiture, or sale of the
Collateral, pay such Taxes on the Obligors' or such Guarantor's behalf, and the
amount thereof shall be an Obligation (in the case of a Company) or a Guaranty
Obligation (in the case of a Guarantor) secured hereby and due on demand.
8.9 Mortgages. (a) This Financing Agreement and the obligation of the
Obligors to perform all of their covenants and obligations hereunder are further
secured by mortgage(s), deed(s) of trust or assignment(s) on the Real Estate.
(b) Each of the Obligors shall give to the Administrative Agent from time
to time such mortgage(s), deed(s) of trust or assignment(s) on the Real Estate
or real estate acquired by such Obligor after the date hereof as the
Administrative Agent or the Required Facility Lenders shall require to obtain
for the Administrative Agent a valid first lien thereon, for the benefit of the
Agents, the Issuing Bank and the Lenders, subject only to Permitted Encumbrances
and to those exceptions of title as set forth in future title insurance policies
that are satisfactory to the Administrative Agent and the Required Facility
Lenders.
SECTION 9. Representations; Warranties and Covenants
9.1 Representations and Warranties. Each of the Obligors hereby makes the
representations and warranties set forth in each of the following subparagraphs
of this Paragraph 9.1 to the Agents, the Lenders and the Issuing Bank.
(a) Financial Condition. The fair value of the Obligors' total assets
exceeds the book value of their total liabilities, on a consolidated basis, and
on that basis the Obligors are generally able to pay their debts as they become
due and payable and do not have unreasonably small capital to carry on business
as it is currently conducted absent extraordinary and unforeseen circumstances.
(b) Perfection and Related Matters. (i) Schedule 1 hereto correctly and
completely sets forth such Obligor's (A) chief executive office, (B) Collateral
locations, (C) tradenames, and (D) all the other information listed on said
Schedule; and
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(ii) (1) upon filing of financing statements in the applicable
filing clerks' offices, in the case of the Companies,
this Financing Agreement creates a valid, perfected
and first priority security interest in the
Collateral (other than the Real Estate) securing the
Obligations or the Guaranty Obligations, to the
extent that a security interest may be perfected by
the filing of a financing statement under the UCC (in
the case of the Companies) or the PPSA (in the case
of the Guarantors) and the security interests granted
herein constitute in favor of the Administrative
Agent for the benefit of the Lenders, the Agents and
the Issuing Bank and shall at all times constitute,
subject only to the Permitted Encumbrances, the first
and only liens in the assets of such Obligor other
than (1) Real Estate and (2) any such Collateral for
which possession or control is required under the UCC
(in the case of the Companies) or the PPSA (in the
case of the Guarantors) for perfection of a security
interest, including any Pledged Stock or Pledged
Notes or proceeds thereof; and
(2) upon the recordation of the Security Documents
consisting of mortgages in respect of Real Estate
owned by such Obligor, the security interest granted
in such mortgage will create (and shall at all times
constitute) a valid, perfected and (except for any
Permitted Encumbrance) first lien in favor of the
Administrative Agent for the benefit of the Lenders,
the Agents and the Issuing Bank, securing the
Obligations, in the case of a Company, or the
Guaranty Obligations of Trim Trends, in the case of
Real Estate of Trim Trends (other than Permitted
Encumbrances);
(3) the Pledge Agreement creates a valid security
interest in the Pledged Stock and Pledged Notes of
such Obligor, which, upon delivery by such Obligor of
such Pledged Stock and Pledged Notes as required in
Section 2 of this Financing Agreement, will
constitute a first priority perfected security
interest in favor of the Administrative Agent for the
benefit of the Lenders, the Agents and the Issuing
Bank.
(c) Collateral and Related Matters. (i) Except for the Permitted
Encumbrances, such Obligor is, or will be, at the time additional Collateral is
acquired by it, the absolute owner of the Collateral owned by such Obligor, with
full right to pledge, sell, consign, transfer and create a security interest
therein, free and clear of any and all claims or liens in favor of others (other
than Permitted Encumbrances).
(ii) The Equipment constituting Collateral does not comprise a part of such
Obligor's Inventory.
(iii) Such Obligor possesses all General Intangibles and rights thereto
necessary to conduct its business as conducted as of the Closing Date.
(d) Organization- and Qualification. Such Obligor and each of its
subsidiaries is a corporation, duly incorporated and validly existing in good
standing under the laws of the jurisdiction of its incorporation; each has the
corporate power to own its property and to carry on
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its business as now being conducted; and each is duly qualified to do business
and is in good standing in each jurisdiction in which the character of the
properties owned or leased by it therein or in which the transaction of its
business makes such qualification necessary except where the failure to so
qualify would not have an Material Adverse Effect or materially adversely affect
its ability to enforce collection of Accounts due from customers residing in
such jurisdiction.
(e) Loan Documents. Such Obligor and each of its subsidiaries has full
corporate power and authority to execute and deliver, and to incur and perform
its obligations under, each of the Loan Documents to which it is party, all of
which have been duly authorized by all proper and necessary corporate action. No
consent or approval of stockholders is required as a condition to the validity
or performance of, or the exercise by the Administrative Agent or the Lenders of
any of their rights or remedies under any Loan Document. Such Obligor has duly
executed and delivered this Financing Agreement, and this Financing Agreement
constitutes, and upon such Obligor's execution and delivery of each other Loan
Document that it is required hereunder to execute and deliver, such other Loan
Document will constitute, the legal, valid and binding obligation of such
Obligor, enforceable against it in accordance with the terms of this Financing
Agreement or such other Loan Document, as the case may be, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
generally and to general principles of equity.
(f) Governmental Action. All authorizations, consents, approvals,
registrations, notices, exceptions, licenses with or from any Governmental
Authority or other Person necessary for the execution, delivery and performance
by such Obligor or any of its subsidiaries, and the incurrence and performance
of each of its obligations under, each of the Loan Documents, and the exercise
by the Administrative Agent, the Issuing Bank, the Syndication Agent and the
Lenders of their remedies under each of the Loan Documents have been effected or
obtained and are in full force and effect.
(g) Litigation. There are no proceedings or investigations now pending or,
to the knowledge of such Obligor, threatened before any court or arbitrator or
before or by any Governmental Authority which, individually or in the aggregate,
if determined adversely to the interests of the Obligors or any of their
subsidiaries, could reasonably be expected to have a Material Adverse Effect.
(h) No Conflicts. There is no statute, regulation, rule order or judgment,
and no provision of any agreement or instrument binding upon such Obligor or any
of its subsidiaries, or affecting their properties, and no provision of the
certificate of incorporation or by-laws (or similar constitutive instruments) of
such Obligor or any of its subsidiaries, that would prohibit, conflict with or
in any way impair the execution or delivery of, or the incurrence or performance
of any obligations of the Obligors under, any Loan Document, or result in or
require the creation or imposition of any Lien on property of the Obligors or
any of their subsidiaries as a consequence of the execution, delivery and
performance of the Loan Documents, other than the Liens in favor of the
Administrative Agent or in favor of the Junior Lien Lender expressly provided
for in this Financing Agreement and the other Loan Documents or in the Junior
Lien Financing Documents as approved by the Agents on the Closing Date.
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(i) No Material Adverse Change. No Material Adverse Change has occurred.
(j) Regulatory Status. Neither such Obligor nor any of its subsidiaries is
(i) an "investment company" registered or required to be registered under the
Investment Company Act of 1940, as amended, or (ii) subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act, each as
amended, or any foreign, federal, state or local statute or regulation limiting
its ability to incur indebtedness for money borrowed as contemplated hereby.
(k) Intellectual Property Except as set forth on Schedule 11: (i) such
Obligor and each of its subsidiaries owns, or is licensed to use, all
Trademarks, Copyrights, technology, know-how and processes necessary for the
conduct of its business as currently conducted (the "Intellectual Property")
except for those the failure to own or license which could not have a Material
Adverse Effect; (ii) no claim has been asserted in writing (or is otherwise
known to such Obligor to exist) and is pending by any Person challenging or
questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does such Obligor know of
any valid basis for any such claim; and (iii) the use of such Intellectual
Property by such Obligor and its subsidiaries does not infringe the rights of
any Person, except for such claims and infringements that, in the aggregate do
not have a Material Adverse Effect. The Obligors, however, make no
representations or warranties regarding the Intellectual Property identified in
the schedules of Intellectual Property entitled "Schedule Foreign Patents" and
"Schedule Foreign Trademarks" delivered pursuant to Paragraph 2.1(z) of Section
2 of this Financing Agreement.
(l) Requirements of Law and Contractual Obligations. No Requirements of Law
or Contractual Obligation of the Obligors or any of their subsidiaries has a
Material Adverse Effect.
(m) Capital Stock. Schedule 3 identifies (i) all capital stock of each
Obligor, other than Harvard, and of the subsidiaries of each Obligor, the
respective jurisdictions in which they are organized and how and by whom such
stock is owned, and (ii) all of the authorized capital stock of Harvard, by
class, and, as of the Closing Date, the number of shares of each such class that
are issued and outstanding. All such shares of the capital stock of any Obligor
which constitutes Pledged Stock have been validly issued and, as of the Closing
Date, are fully paid, non-assessable shares free of preemptive rights or, other
similar rights suffered or permitted by such Obligor. Other than as described on
Schedule 3, as of the Closing Date, (A) there are no subscriptions, options,
warrants, rights to subscribe for, or calls or commitments or similar rights
relating to any shares of such Obligor's capital stock, including any right of
conversion or exchange under any outstanding security or other instrument, and
(B) such Obligor is not 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. Harvard
may amend Schedule 3 from time to time to reflect any Permitted Asset Transfer,
merger or liquidation effected in accordance with the terms of this Financing
Agreement and in accordance with the terms of the Junior Lien Financing
Documents as in effect on the Closing Date and approved by the Lenders as
contemplated in Paragraph 2.1.
(n) Indebtedness. Schedule 4 identifies all Indebtedness for borrowed money
of such Obligor and all its subsidiaries which is outstanding on the date of
this Financing
70
Agreement as well as all other Indebtedness of such Obligor and its subsidiaries
which is secured by any lien or other encumbrance on any of the property of any
of such Obligor or any of its Subsidiaries.
(o) Environmental Matters. Except as disclosed in Schedule 10 hereto, such
Obligor and each of its subsidiaries (i) is in compliance in all material
respects with all applicable Environmental Laws; (ii) has obtained or has taken
steps to obtain all necessary permits, consents, licenses, and other approvals
applicable under any Environmental Laws; (iii) is not subject to any
investigation, or any judicial or administrative proceeding, notice, order,
judgment, decree or settlement alleging or pertaining to any violation of
Environmental Laws that could result in a Material Adverse Effect; (iv) is not
subject to any claims or liabilities arising from any Environmental Laws that
could result in a Material Adverse Effect; and (v) does not have any lien
attached based on any Environmental Laws that could result in a Material Adverse
Effect. Except for certain summary reports in respect of the environmental
database research results performed in 1998 (and referenced in the Financing
Transaction Checklist, dated September 30, 1999 in connection with the financing
set forth in the Existing Credit Agreement with GECC, as "Environmental Reports
(done in 1998)"), such Obligor has provided all environmental reports relating
to the Real Estate to the Lenders and the Agents or has disclosed the
information in such reports in Schedule 10.
(p) Federal Margin Regulations. None of the transactions contemplated in
this Financing Agreement will violate or result in a violation of Section 7 of
the Securities Exchange Act of 1934, as amended, or any regulations issued
pursuant thereto, including, without limitation, Regulations T, U and X of the
Federal Reserve Board. If any Lender or the Administrative Agent so requests,
the Obligors will furnish to the Administrative Agent, for itself, any relevant
Lenders and the Arranger a statement to the foregoing effect in conformity with
the requirements of an applicable form referred to in Regulation U.
(q) Financial Statements and Other Information. (i) Except as set forth
in Schedule 6 or reflected in financial statements delivered to the
Administrative Agent and the Lenders on or before the date of this Financing
Agreement, (A) neither such Obligor nor any of its subsidiaries has, on the date
of this Financing Agreement, any material obligation, contingent liability or
liability for Taxes, or any long-term lease or unusual forward or long-term
exchange transaction, any Hedging Agreement or other financial derivative which
is not reflected in those financial statements; and (B) there has been no sale,
transfer or other disposition by such Obligor or any of its subsidiaries of any
material part of its business or property other than any Permitted Asset
Transfer and no purchase or other acquisition of any business or property,
including capital stock of any other Person (other than any Company or
Guarantor), that is material in relation to the consolidated financial position
of the Obligors at September 30, 2000, as reflected in those financial
statements, except, on a date after the date of this Financing Agreement on
which this representation is repeated or deemed repeated or required to be true
as if then made, for any other acquisition or transfer made after the date of
this Financing Agreement which at the time was expressly permitted in or
pursuant to this Financing Agreement and reported as required herein to the
Agents and the Lenders.
(ii) The audited consolidated and unaudited consolidating balance sheets of
such Obligor and its subsidiaries as of September 30, 2000, and the related
consolidated and
71
consolidating statements of operations, changes in stockholder's equity and cash
flows for the fiscal year ended on that date, copies of which have been
furnished to the Administrative Agent and the Lenders, fairly present in all
material respects the consolidated financial condition of such Obligor and its
consolidated subsidiaries as at such date, and the results of their operations
and their retained earnings and cash flows for the fiscal year then ended. All
such financial statements, including the related schedules and notes thereto
relating to those financial statements, have been prepared in accordance with
GAAP applied consistently throughout the periods involved, except as disclosed
therein.
(iii) The operating forecast and cash flow projections of such Obligor and
its subsidiaries which have been furnished to the Lenders have been prepared in
good faith under the direction of Authorized Officers of such Obligor and the
relevant subsidiaries. Those forecasts and projections with respect to such
Obligor and its subsidiaries were prepared and presented in good faith based
upon facts and assumptions that such Obligor believes to have been reasonable in
light of current and foreseeable conditions, it being understood that
projections are subject to significant uncertainties and contingencies, many of
which are beyond the control of such Obligor and its subsidiaries and that no
assurance can be given that the financial results set forth in those forecasts
and projections will actually be realized.
(iv) All information, reports and other papers and data (other than
projections) with respect to such Obligor and its subsidiaries furnished by such
Obligor or Harvard, on behalf of such Obligor, to the Lenders or the Issuing
Bank or to the Administrative Agent for the Lenders or the Issuing Bank in
connection with the negotiation, preparation or execution of this Financing
Agreement or any of the other Loan Documents was, at the time furnished,
complete and correct in all material respects. The information, reports and
other papers and data (other than projections) with respect to such Obligor and
its subsidiaries, and the representations made by or on behalf of such Obligor
therein or in any other document delivered by or on behalf of such Obligor under
or in connection with any Loan Document after the date of this Financing
Agreement were, in each case, at the time furnished complete and correct or, in
the case of a representation, as at the time made, true and correct, in all
material respects.
(r) No Default. No Default or Event of Default has occurred and is
continuing and, except as set forth in Schedule 7, neither such Obligor nor any
of its subsidiaries is in default in any material respect in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any agreement or instrument material to its business.
(s) Taxes. Except as set forth in Schedule 8, such Obligor and each of its
subsidiaries has filed or caused to be filed all federal, state, provincial and
other material tax returns which are required to be filed and has paid all Taxes
shown to be due and payable on those returns or on any assessments made against
it or any of its property and all other Taxes, fees or other charges imposed on
it or any of its property by any Governmental Authority (other than any tax, fee
or other charge the amount or validity of which is currently being contested in
good faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of such Obligor or
subsidiary). No tax lien has been filed, and, to the knowledge of such Obligor,
no claim is being asserted, with respect to any such tax, fee or other charge.
Neither such Obligor nor any of its subsidiaries has waived or extended
72
or has been requested to waive or extend the statute of limitations relating to
the payment of any Taxes.
(t) ERISA. Each Plan has been and is being maintained and funded in
accordance with its terms and in material compliance with all provisions of
ERISA and the Code applicable thereto. No Obligor nor any ERISA Affiliate has
incurred any liability (other than routine liability for premiums) under Title
IV of ERISA which could reasonably be expected to have a Material Adverse
Effect. No ERISA Event has occurred, nor has any other event occurred that may
result in an ERISA Event, which could reasonably be expected to have a Material
Adverse Effect. Each Single Employer Plan has been determined by the Internal
Revenue Service to qualify under Section 401 of the Code, and to the best
knowledge of the Obligors nothing has occurred which would cause the loss of
such qualification or tax-exempt status. No Single Employer Plan subject to
Title IV of ERISA has any Unfunded Pension Liability as to which any Obligor or
ERISA Affiliate is or may be liable and which could reasonably be expected to
have a Material Adverse Effect. No Plan maintained or sponsored by any Obligor
or ERISA Affiliate provides medical or other welfare benefits or extends
coverage relating to such benefits beyond the date of a participant's
termination of employment with such Obligor or ERISA Affiliate, except to the
extent required by Section 4980B of the Code or as otherwise set forth in
Schedule 9 hereto. Each Obligor and ERISA Affiliate has complied in all material
respects with the notice and continuation coverage requirements of Section 4980B
of the Code. There are no pending or, to the best knowledge of the Obligors,
threatened claims, actions or lawsuits, other than routine claims for benefits
in the usual and ordinary course, with respect to any Single Employer Plan for
which any Obligor or ERISA Affiliate may be directly or indirectly liable,
through indemnification obligations or otherwise, which could reasonably be
expected to have a Material Adverse Effect. Neither any Obligor nor any ERISA
Affiliate has transferred any Unfunded Pension Liability to an entity other than
an ERISA Affiliate or otherwise engaged in a transaction that could be subject
to Section 4069 or 4212(c) of ERISA. Each Plan that is not subject to the laws
of the United States (a "Foreign Plan") is being maintained and funded in
compliance with its terms and in compliance with any and all provisions of the
laws applicable thereto, and there are no unfunded pension or benefit
liabilities or claims or causes of action (other than routine claims for
benefits) with respect to such Foreign Plan which, in the aggregate and together
with the liabilities, claims or causes of action with respect to any other
Foreign Plans, could reasonably be expected to have a Material Adverse Effect.
9.2 Covenants. Each of the Obligors shall perform and comply with each of
the covenants and agreements set forth in following subparagraphs of this
Paragraph 9.2 (it being understood that, where the relevant covenant calls for
compliance by the Obligors on a consolidated basis, each Obligor shall take or
refrain from taking such action as is necessary to cause compliance by the
Obligors on a consolidated basis.
(a) Books and Records Relating to Collateral; Change in Location. Such
Obligor shall, and shall cause each of its subsidiaries to, maintain books and
records pertaining to the Collateral in such detail, form and scope as the
Administrative Agent shall reasonably require, shall maintain such financial
books and records as shall be required to enable it to provide the financial
statements required by Paragraph (g) of this Section 9.2 and shall cause the
books and records of such Obligor to reflect the Administrative Agent's interest
in the Accounts, Inventory and other Assets of such Obligor. Such Obligor shall
permit and cause each of its subsidiaries to
73
permit the Agent(s) (or either of them) or their agents and any of the Lenders
who may wish to accompany the Agent(s) (or either of them) at their own cost and
expense, upon reasonable notice to enter upon such Obligor's premises at any
time during normal business hours, and from time to time in its reasonable
business judgment, for the purpose of inspecting the Collateral and any and all
records pertaining thereto, and shall make all such books and records available
in such inspections, including any records handled or maintained for such
Obligor by any other company or entity. Such Obligor shall afford the
Administrative Agent thirty (30) days' prior written notice of any (i) change in
the location of any such Collateral, other than to locations, that as of the
Closing Date, are known to the Administrative Agent and at which the
Administrative Agent has filed financing statements and otherwise fully
perfected its liens thereon, (ii) change in the location of its chief executive
office/chief place of business from its address specified for notices herein, or
(iii) change of its name (including the adoption of any new trade name),
jurisdiction of incorporation, identity or corporate structure. In addition,
such Obligor shall not make any of the changes described in this paragraph
9.2(a) of this Section 9 until such filings and other measures as may be
required under applicable law to continue uninterrupted the perfected lien or
security interest created hereunder shall have been taken, and until the
Administrative Agent shall have received such opinions of counsel with respect
thereto as it may have reasonably requested. Such Obligor shall also advise the
Administrative Agent promptly, in sufficient detail, of any material adverse
change relating to the type, quantity or quality of the Collateral or on the
security interests granted to the Administrative Agent herein or in any other
Loan Document.
(b) Information Regarding Collateral. Such Obligor shall, and shall cause
each of its subsidiaries to, execute and deliver to the Administrative Agent,
from time to time, solely for the Administrative Agent's convenience in
maintaining a record of the Collateral, such written statements, and schedules
as the Administrative Agent may reasonably require, designating, identifying or
describing the Collateral. Any failure, however, to promptly give the
Administrative Agent such statements, or schedules shall not affect, diminish,
modify or otherwise limit the Administrative Agent's and/or the Lenders'
security interests in the Collateral.
(c) Action Relating to Security Interest. Such Obligor shall, and shall
cause each of its subsidiaries to, comply with the requirements of all state,
provincial and federal laws in order to grant to the Administrative Agent valid
and perfected first security interests in the Collateral, subject only to the
Permitted Encumbrances. Such Obligor shall do whatever the Administrative Agent
may reasonably request, from time to time, by way of: (i) filing notices of
liens, financing statements, registrations, amendments, renewals and
continuations thereof; (ii) cooperating with the Administrative Agent's agents
and employees; (iii) keeping Collateral records; (iv) transferring proceeds of
Collateral to the Administrative Agent's possession; (v) performing such further
acts as the Administrative Agent and/or the Lenders may reasonably require in
order to effect the purposes of this Financing Agreement and the Security
Documents; and (vi) defend the Collateral against all claims and demands of all
Persons (other than the Administrative Agent and the holders of Permitted
Encumbrances) claiming an interest therein.
(d) Insurance. Such Obligor shall maintain insurance on its Real Estate,
Equipment and Inventory under such policies of insurance, with such insurance
companies, in such reasonable amounts and covering such insurable risks as are
at all times reasonably satisfactory
74
to the Agents. All policies covering the Real Estate, Equipment and Inventory of
such Obligor shall, subject to the rights of any holders of Permitted
Encumbrances holding claims senior to the Administrative Agent, be made payable
to the Administrative Agent on behalf of the Lenders, in case of loss, under a
standard non-contributory "mortgagee", "lender" or "secured party" clause and
are to contain such other provisions as the Administrative Agent may require to
fully protect the Administrative Agent's interest in the Real Estate, Inventory
and Equipment and to any payments to be made under such policies. All original
policies or true copies thereof shall be delivered by such Obligor to the
Administrative Agent, premium prepaid, with the loss payable endorsement in the
Administrative Agent's favor, and shall provide for not less than thirty (30)
days' prior written notice to the Administrative Agent of the exercise of any
right of cancellation.
(e) Taxes. Such Obligor shall pay, when due, all Taxes, including sales
taxes, assessments, claims and other charges lawfully levied or assessed upon
such Obligor or the Collateral unless such Taxes are being diligently contested
in good faith by the applicable Obligor by appropriate proceedings and adequate
reserves are established in accordance with GAAP.
(f) Compliance with Requirements of Law. Such Obligor: (i) shall comply
with all acts, rules, regulations and orders of any legislative, administrative
or judicial body or official and other Requirements of Law, which the failure to
comply with would have a Material Adverse Effect, provided that such Obligor may
contest any acts, rules, regulations, orders and directions of such bodies or
officials in any reasonable manner which will not, in the Administrative Agent's
reasonable opinion, materially and adversely effect the Administrative Agent's
and/or the Lenders' rights or priority in the Collateral; (ii) shall comply with
all Environmental Laws, applicable to the Collateral, the ownership and/or use
of their real property and operation of their business, which the failure to
comply with would have a material adverse effect on the Collateral, or any
material part thereof, or on the operation of the business of such Obligor or
any other Obligor; and (iii) shall not be deemed to have breached any provision
of this Paragraph 9.2(f) if (x) the failure to comply with the requirements of
this Paragraph 9.2(f) resulted from good faith error or innocent omission, (y)
the Obligors promptly commence and diligently pursue a cure of such breach, and
(z) such failure is cured within (30) days following such Obligor's receipt of
notice of such failure, or if such failure cannot in good faith be cured within
thirty (30) days, then such breach is cured within a reasonable time frame based
upon the extent and nature of the breach and the necessary remediation, and in
conformity with any applicable consent order, consensual agreement and
applicable law.
(g) Financial Information. The Obligors (or in the case of clauses (i) and
(ii), Harvard) shall furnish to the Agents and each Lender, at the times
indicated, each of the following:
(i) within ninety (90) days after the end of each Fiscal Year, an
audited Consolidated Balance Sheet, with a Consolidating Balance Sheet
attached thereto, as at the close of such year, and consolidated and
consolidating statements of profit and loss, cash flow and reconciliation
of surplus of the Obligors and their subsidiaries for such year, audited by
independent public accountants selected by Harvard and satisfactory to the
Agents;
75
(ii) within forty-five (45) days after the end of the first three
Fiscal Quarters of each Fiscal Year a Consolidated Balance Sheet and
Consolidating Balance Sheet as at the end of such period and consolidated
and consolidating statements of profit and loss, cash flow and surplus of
the Obligors and their subsidiaries, certified by an authorized financial
or accounting officer of the Obligors (or relevant Obligor);
(iii) within thirty (30) days after the end of each month a
Consolidated Balance Sheet as at the end of such period and consolidated
and consolidating statements of profit and loss, cash flow and surplus of
the Obligors and their subsidiaries for such period, certified by an
authorized financial or accounting officer of the Obligors (or relevant
Obligor);
(iv) from time to time, such further information regarding the
business affairs and financial condition of the Obligors and/or any
subsidiaries thereof as the Agents may reasonably request, including,
without limitation (A) the accountant's management practice letter and (B)
not later than the 45th day of each Fiscal Year, annual cash flow
projections in form satisfactory to the Required Facility Lenders;
(v) within fifteen (15) days after the end of each month, a statement
setting forth each of the following for the Obligors: (i) all Accounts
(including and distinguishing Accounts that are not Eligible Accounts
Receivable); (ii) accounts payable; and (iii) Inventory (including and
distinguishing Inventory that is not Eligible Inventory), together with a
certification as to all such matters prepared by an Authorized Officer of
Harvard; and
(vi) on the second Business Day of each week and at such other times
as the Administrative Agent shall request, a Borrowing Base Certificate
showing Eligible Accounts as of the close of business on the last Business
Day of the preceding week and Eligible Inventory as of the close of
business on the last Business Day of the preceding month and as of such
other times as the Administrative Agent in its reasonable business judgment
shall require; provided, however, that upon the occurrence of any change in
the information provided on the most recently provided Borrowing Base
Certificate which could have or could reasonably be expected to have a
Material Adverse Effect, Harvard shall promptly provide to the
Administrative Agent a new Borrowing Base Certificate reflecting such
change.
Each of the financial statements which the Obligors are required to submit as
provided above in clauses (i) and (ii) of this Paragraph 9.2(g) must be
accompanied by an officer's certificate, signed by the President, Vice
President, Controller, or Treasurer or other Authorized Officer, pursuant to
which any one such officer must certify that: (x) the financial statement(s)
present fairly, in all material respects, the relevant Obligors' financial
condition at the end of the particular accounting period, as well as such
Obligors' operating results during such accounting period, subject to year-end
audit adjustments; and (y) during the particular accounting period: (A) there
has been no Default or Event of Default under this Financing Agreement or
default or event of default under the Junior Lien Financing Agreement, provided,
however, that if any such officer has knowledge that any such Default or Event
of Default, has occurred during such period, the existence of and a detailed
description of same shall be set forth in such officer's
76
certificate; (B) the Obligors have not received any notice of cancellation with
respect to their property insurance policies; (C) the Companies have not
received any notice that could result in a material adverse effect on the value
of the Collateral taken as a whole; and (D) the exhibits attached to such
financial statement(s) constitute detailed calculations showing compliance with
all financial covenants contained in this Financing Agreement.
(h) Affirmative Financial Covenants. The Obligors, on a consolidated basis,
shall:
(i) maintain a Fixed Charge Coverage Ratio not less than that
specified below at the end of each Fiscal Quarter specified, which, for the
Fiscal Quarters ending June 30, September 30 and December 31, 2001, shall
be determined on a cumulating basis for the periods of three (3), six (6)
and nine (9) months, respectively, so ending, and, for each Fiscal Quarter
thereafter shall be determined for the period of four consecutive Fiscal
Quarters ending with such Fiscal Quarter specified below:
Fiscal Quarter Ratio
-------------- -----
(i) Ending June 30, 2001 0.80
(ii) Ending September 30, 2001 1.45
(iii) Ending December 31, 2001 1.00
(iv) Ending March 31, 2002 1.00
(v) Ending June 30, 2002 1.00
(vi) Ending September 30, 2002 0.85
(vii) Ending December 31, 2002 1.00
(viii) Ending March 31, 2003 1.00
(ix) Ending June 30, 2003 1.00
(x) Ending September 30, 2003 1.00
(xi) Thereafter 1.00
(ii) maintain at the end of each Fiscal Quarter identified below, a
leverage ratio of Adjusted Funded Debt (as defined below) to cumulative
EBITDA for the period of four consecutive Fiscal Quarters ending with such
Fiscal Quarter (calculated on an annualized basis for the first three
Fiscal Quarters indicated), not greater than the ratio specified below. For
this purpose, (A) in relation to each Fiscal Quarter, "Adjusted Funded
Debt" shall mean Funded Debt on the last day of such Fiscal Quarter,
reduced by the aggregate amount of cash received by the Obligors from
General Motors Corporation during the relevant period of five (5) Business
Days after the last day of such Fiscal Quarter, and (B) for the Fiscal
Quarters ending June 30 2001, September 30, 2001 and December 31, 2001 the
EBITDA for such Fiscal Quarters shall be multiplied by four (4), two (2)
and four thirds (4/3), respectively, to obtain the cumulative EBITDA for
such Fiscal Quarters.
Fiscal Quarter Ratio
-------------- -----
(i) Ending June 30, 2001 3.80
(ii) Ending September 30, 2001 3.10
(iii) Ending December 31, 2001 3.45
(iv) Ending March 31, 2002 3.30
(v) Ending June 30, 2002 3.00
(vi) Ending September 30. 2002 3.00
(vii) Ending December 31, 2002 2.90
(viii) Ending March 31, 2003 2.90
(ix) Ending June 30, 2003 2.90
(x) Ending September 30, 2003 2.50
(xi) Thereafter 2.50
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(iii) maintain EBITDA of at least $2,900,000.00 at the end of the
Fiscal Quarter ending June 30, 2001, determined on a cumulating basis for
the period of three (3) months ending on that date.
(i) Negative Financial Covenants. Such Obligor shall not, and shall not
permit any of its subsidiaries to do any of the following:
(i) incur expenses under or relating to any Operating Lease
(understood to mean any lease other than a Capital Lease) if, as a result,
the aggregate expenses of the Obligors under or relating to Operating
Leases in any Fiscal Year would exceed $3,600,000;
(ii) contract for, purchase, make expenditures for, lease pursuant to
a Capital Lease or otherwise incur obligations with respect to Capital
Expenditures (whether subject to a security interest or otherwise) if, as a
result, the aggregate of Capital Expenditures for the Obligors during any
period specified below would exceed the amount set forth below for such
period:
(A) $6,500,000.00 for the 2001 Fiscal Year; and
(B) $7,000,000.00 for each Fiscal Year thereafter;
provided that, if the aggregate amount of the Capital Expenditures made
by the Obligors in a Fiscal Year is less than the amount permitted
above in this provision, up to $750,000 of the difference shall
automatically be added to the amount specified above as the maximum
permitted for the following Fiscal Year.
(iii) for any Fiscal Quarter ended on or after June 30, 2001, permit
Net Worth to be less than the Net Worth for the immediately preceding
Fiscal Quarter by an amount in excess of the amount specified below in
relation to such Fiscal Quarter:
Fiscal Quarter Amount
-------------- ------
(i) Ending June 30, 2001 $12,500,000
(ii) Ending September 30, 2001 $10,800,000
(iii) Ending December 31, 2001 $12,200,000
(iv) Ending March 31, 2002 $11,350,000
(v) Ending June 30, 2002 $11,000,000
(vi) Ending September 30. 2002 $12,100,000
(vii) Ending December 31, 2002 $11,600,000
(viii) Ending March 31, 2003 $10,700,000
(ix) Ending June 30, 2003 $10,100,000
(x) Ending September 30, 2003 $11,000,000
(xi) Ending after September 30, 2003 $11,000,000
78
(j) Other Negative Covenants. Such Obligor shall not, and shall not permit
its subsidiaries to do any of the following, except as otherwise expressly
permitted in this Financing Agreement or, in the case of the actions
contemplated in clause (iii), pursuant to the Stock Purchase Agreement:
(i) Mortgage, assign, pledge, transfer or otherwise permit any lien,
charge, security interest, encumbrance or judgment (whether as a
result of a purchase money or title retention transaction, or
other security interest, or otherwise) to exist on any of the
Collateral or any other assets, whether now owned or hereafter
acquired, of such Obligor or subsidiary except for the Permitted
Encumbrances (which include the Liens contemplated herein and in
the other Loan Documents and in the Junior Lien Financing
Documents which secure the Junior Secured Obligations as approved
on the Closing Date by the Agents);
(ii) Enter into, or permit any subsidiary to enter into, any Hedging
Agreement (regardless of whether the purpose thereof is to
hedge), or incur or create any other Indebtedness other than the
Permitted Indebtedness;
(iii) Except for Permitted Asset Transfers, sell, lease, assign,
transfer or otherwise dispose of any of its assets or any
beneficial interest therein or, in the case of any capital stock
owned by an Obligor, in any way relinquish control over any
related voting power except pursuant to the Security Documents
and the Junior Lien Financing Documents (in the latter case, as
in effect on the Closing Date and approved by the Lenders as
contemplated in Paragraph 2.1(l) of Section 2 of this Financing
Agreement);
(iv) Except with respect to the transfer of Pledged Stock of one
Obligor to another and except for a Permitted Liquidation, merge,
amalgamate, consolidate or otherwise alter or modify their
respective corporate names, principal places of business,
structure, or existence, re-incorporate or re-organize, or enter
into or engage in any operation or activity materially different
from that presently being conducted by such Obligor (or such
subsidiary), except that (A) an Obligor may change its corporate
name or address, or (B) a Company may merge or amalgamate with
and into any other Company and a Guarantor may merge or
amalgamate with and into any other Guarantor (other than the
Inactive Guarantor) or Company so long as a Company is the
survivor of such merger or amalgamation, provided that: (i) in
any such instance under clause (A) or (B) above Harvard shall
give the Administrative Agent thirty (30) days' prior written
79
notice thereof and; and (ii) the relevant Obligors shall execute
and deliver, prior to or simultaneously with any such action, any
and all documents and agreements reasonably requested by the
Administrative Agent to confirm the continuation and preservation
of all security interests and liens granted to the Administrative
Agent hereunder or under any other Loan Document;
(v) Assume, guarantee, endorse, or otherwise become liable upon the
obligations of any Person, firm, entity or corporation (other
than any obligation of another Obligor which such Obligor is
permitted hereunder to incur), except by the endorsement of
negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business and except for
any Obligations under the Loan Documents and obligations under
the Junior Financing Documents (to the extent contemplated in
those documents as in effect on the date hereof and approved by
the Lenders on the Closing Date as contemplated in Section 2 or
as subsequently modified with the prior approval of the Required
Facility Lenders);
(vi) Declare or pay any dividend or distributions of any kind on, or
purchase, acquire, redeem or retire, any capital stock or equity
interest of any class whatsoever, whether now or hereafter
outstanding, except that the Obligors may declare and pay
dividends or distributions on their capital stock, (A) in the
case of Obligors other than Harvard, to Harvard or any other
Obligor that, directly or indirectly, is a wholly owned
subsidiary of Harvard, and, (B) in the case of Harvard, in an
amount sufficient to enable Harvard to (i) redeem the capital
stock owned by their respective retired, deceased or terminated
officers or shareholders which Harvard is contractually obligated
to redeem, provided that in no event shall the aggregate amount
of such dividends under this clause exceed $100,000.00 in the
aggregate in any Fiscal Year, provided, further, that such
redemptions may be made only if (x) no Default or Event of
Default has occurred hereunder, (y) after giving effect to such
redemption, no Default and/or Event of Default has occurred or
would occur hereunder and (z) the Obligor making such redemption
has sufficient Working Capital to pay its debts as they come due;
or (ii) pay income or franchise Taxes of the Obligors due as a
result of the filing of a consolidated, combined or unitary tax
return in which the operations of any of the Obligors are
included;
(vii) Except with respect to loans or capital contributions to other
Obligors and customary travel advances made in the ordinary
course of business to employees, officers and directors of
Obligors, make any advance or loan to, or any investment in, any
firm, entity, Person or corporation or purchase or acquire all or
substantially all of the stock or assets of any entity, Person or
corporation; provided, however, with respect to loans to other
Obligors, a promissory note in form and substance satisfactory to
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the Administrative Agent and the Lenders shall, on the date such
loan is made, be delivered to the Administrative Agent; and
provided, further, that the aggregate principal amount of such
travel advances made by the Obligors to employees, officers and
directors of Obligors shall not exceed $100,000.00 at any time
outstanding;
(viii) Pay any management, consulting or other similar fees to any
Person, corporation or other entity affiliated with any Obligor
other than a guarantee fee payable to the Guarantors for the
guaranty in Section 14 of the Junior Lien Financing Agreement or
Section 17 of the Guaranty hereof or any other guaranty permitted
by this Financing Agreement;
(ix) Permit any change in accounting treatment or reporting practices
of such Obligor, except as required by applicable GAAP or as
permitted by applicable GAAP existing on the Closing Date and as
otherwise permitted by this Financing Agreement;
(x) Prepay, redeem, purchase, defease, exchange or repurchase any
debt (other than Loans and, in accordance with the prepayment
terms in the Junior Lien Financing Documents as in effect on the
date of this Financing Agreement or subsequently modified with
the prior written consent of the Required Facility Lenders, the
Junior Loans) or amend or modify any of the terms of any such
debt or other similar agreements entered into by such Obligor or
its subsidiaries;
(xi) Except with respect to loans permitted under clause (vii) of this
Paragraph 9.2(j) (and subject to the provisos therein), enter
into any transaction, including, without limitation, any
purchase, sale, lease, loan or exchange of property with any
subsidiary or affiliate of any of the Obligors, provided that,
except as otherwise set forth in this Financing Agreement, the
Obligors or any one of them may enter into sale and service
transactions in the ordinary course of their business and
pursuant to the reasonable requirements of any such Obligor,
provided that any such transaction involving the price paid by an
Obligor in any such sale of Inventory is no greater than the
prevailing market price therefor or the price that could be
obtained in a comparable arms' length transaction with an
unrelated third party, provided further that no Default or Event
of Default exists or will occur hereunder prior to and after
giving effect to any such transaction;
(xii) use the proceeds of the Loans to purchase or carry margin stock
(as defined in Regulation U of the Federal Reserve Board) or to
extend credit to others for the purpose of purchasing or carrying
any margin stock (as so defined) in violation of Regulation T, U
or X of the Federal Reserve Board; or permit the aggregate value
of margin stock (as so defined) at any time owned or held by such
Obligor or any of its subsidiaries to exceed an amount equal to
25% of the value of all consolidated assets subject at such time
to any "arrangement" (as such term is used in the definition of
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"indirectly secured" in Section 221.2 of Regulation U of the
Federal Reserve Board);
(xiii) amend, modify or waive or request an amendment, modification or
waiver of any provision of the Junior Lien Financing Agreement)
or any other document evidencing any of the Junior Secured
Obligations or the Junior Secured Guaranty Obligations (except
for any such amendment to correct a manifest error);
(xiv) request or use any Letter of Credit for the purchase of domestic
Inventory or to secure present or future debt of domestic
Inventory supplies (domestic understood in relation to each
Obligor to refer to purchases with and debt owed to suppliers
located in such Obligor's country of organization); or
(k) Reports. Harvard shall advise the Administrative Agent in writing of
each of the following promptly upon learning of the relevant event, circumstance
or condition:
(i) all expenditures (actual or anticipated) in excess of $150,000.00
from the budgeted amount therefor in any Fiscal Year for (x)
environmental clean-up, (y) environmental compliance or (z)
environmental testing and the impact of said expenses on such
Obligor's Working Capital;
(ii) (A) any notices such Obligor and each of its subsidiaries
receives from any local, state, provincial or federal authority
advising such Obligor or any of its subsidiaries of any
environmental liability (real or potential) arising from any of
such Obligor's operations, premises, waste disposal practices, or
waste disposal sites used by any of the Obligors or any of its
subsidiaries that could result in a Material Adverse Effect,
together with copies of all such notices if so required, and (B)
any formal notice, violation, order or service of any lawsuit
which contains an allegation of a violation of an Environmental
Law or responsibility for any environmental remedial liabilities
that could result in a Material Adverse Effect, together with
copies of all such notices if so required.
(iii) any material labor dispute to which such Obligor or any of its
subsidiaries may become a party and which involves any group of
employees, any strikes or walkouts relating to any of its
facilities and the expiration or termination of any labor
contract to which such Obligor or subsidiary is a party or by
which such Obligor or subsidiary is bound, if the dispute could
reasonably be expected to materially disrupt the operations of
such Obligor or subsidiary;
(iv) any Obligor or ERISA Affiliate knows or has reason to know that
(x) any ERISA Event has occurred or exists, (y) any Single
Employer Plan (other than the Xxxxxxx-Xxxxxx Plan) subject to
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Title IV of ERISA has any Unfunded Pension Liabilities or (z) the
Xxxxxxx-Xxxxxx Plan has Unfunded Pension Liabilities in excess of
$10,000,000.00;
(v) receipt by any Obligor or ERISA Affiliate from the PBGC of any
notice of the PBGC's intention to terminate any Single Employer
Plan or to have a trustee appointed to administer such Plan;
(vi) any notice is given or required to be given to the PBGC under
Section 302(f)(4)(A) of ERISA of the failure of any Obligor or
ERISA Affiliate to make timely payments to a Plan;
(vii) receipt by any Obligor or ERISA Affiliate, from a Multiemployer
Plan sponsor, of any notice concerning (a) the imposition of
Withdrawal Liability by a Multiemployer Plan, (b) the
determination that a Multiemployer Plan is, or is expected to be,
in reorganization or insolvent within the meaning of Title IV of
ERISA, (c) the termination of a Multiemployer Plan within the
meaning of Title IV of ERISA, or (d) the amount of liability
incurred, or which may be incurred, by such Obligor or ERISA
Affiliate in connection with any event described in clause (a),
(b) or (c) above;
Each notice pursuant to this Paragraph 9.2(k) shall be accompanied by a
statement of an Authorized Officer setting forth details of the occurrence
referred to therein and stating what action the relevant Obligor or subsidiary
has taken or proposes to take with respect thereto. For the purposes of this
Paragraph 9.2(k), an Obligor shall be deemed to have knowledge when any officer
of such Obligor charged with responsibility for any matter that is the subject
of such notice requirement knows that such notice was required.
(l) RICO. Each Obligor shall comply, and cause each of its subsidiaries to
comply with all applicable laws, rules, regulations and orders, such compliance
to include, without limitation, compliance with the Racketeer Influenced and
Corrupt Organizations Chapter of the Organized Crime Control Act of 1970.
(m) Perform Obligations. Each Obligor shall perform, and cause each of its
subsidiaries to perform its respective obligations under the Loan Documents and
its material obligations under other material agreements (it being understood
that any obligation under any such other agreement will be deemed material if
its nonperformance could reasonably be expected to have a Material Adverse
Effect or result in a Material Adverse Change).
(n) Maintain Existence, Structure and Licenses. Except for a Permitted
Liquidation or as permitted by Paragraph 9.2(j)(iv) of this Section 9, each
Obligor shall preserve and maintain, and cause each of its subsidiaries to
preserve and maintain, its existence, legal structure, legal name, rights
(charter and statutory), and all permits, licenses, approvals, privileges and
franchises used or useful in the conduct of its business.
(o) Use of Proceeds. The Obligors shall use, and cause their respective
subsidiaries to use, the proceeds of the Loans and the Letters of Credit for the
sole purposes of (i) repaying the Indebtedness incurred and paying other amounts
owing under the Existing Credit
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Agreements, (ii) paying transaction costs, fees and expenses due under the Loan
Documents and Junior Lien Financing Documents, (iii) providing Working Capital
from time to time for the Obligors, and (iv) other general corporate purposes.
(p) Additional Obligors. Each Obligor shall cause each entity that becomes
a subsidiary of such Obligor after the date of this Financing Agreement, if such
subsidiary is organized in the United States, to become a joint and several
obligor as a Company hereunder in respect of the Obligations, or, if such
subsidiary is organized outside the United States, to become a Guarantor in
respect of the Harvard Obligations or a joint and several obligor as a Company
hereunder in respect of the Obligations (and if the Obligors propose that any
Letter of Credit be issued for the account of such subsidiary and it is to
become a Guarantor, also cause it to become an L/C Eligible Account Party
obligated hereunder with respect to its own Reimbursement Obligations) and, in
each case, cause such subsidiary to secure its obligations in the relevant
capacities referred to above by executing and delivering to the Administrative
Agent, for the benefit of the Lenders, the Agents and the Issuing Bank, an
amendment to this Financing Agreement and all other Loan Documents, to the
extent determined by Required Lenders to be necessary or desirable to implement
the intent of this subparagraph. All such amendments shall be in form and
substance satisfactory to the Administrative Agent and the Required Lenders.
(q) Inventories, Appraisals, and Field Examinations; Environmental Surveys.
(i) The Obligors, at their own expense, shall cause not less than one
(1) physical inventory to be undertaken in each twelve (12) month
period during which this Financing Agreement is in effect which
shall be conducted by such inventory takers and following such
methodology as is consistent with the Obligors' past practices.
(a) The Obligors shall provide the Agents and the Lenders with a
copy of the preliminary results of each such inventory (as well
as of any other physical inventory undertaken by any Obligor)
within ten (10) days following the completion of such inventory.
(b) The Obligors shall provide the Administrative Agent and the
Lenders with a reconciliation of the results of each stock
inventory (as well as of any other physical inventory undertaken
by any Obligor) within thirty (30) days following the completion
of such inventory, and shall post such results to the Obligors'
stock ledger and, as applicable, to the Obligors' other financial
books and records.
(c) Upon the occurrence and during the continuance of a Default
or an Event of Default, the Administrative Agent may, at the
expense of the Companies, cause such additional inventories to be
taken as the Administrative Agent may determine in its discretion
or as Required Facility Lenders may require.
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(d) The Agents and the Lenders shall be entitled to obtain
appraisals of the Collateral from time to time (in all events, at
the Companies' expense), conducted by such appraisers as are
satisfactory to the Agents and the Required Facility Lenders,
including, without limitation, desktop appraisals and full
appraisals of the Collateral. The Obligors shall cooperate with
and provide information relating to the Collateral reasonably
requested by each of the appraisers engaged by any Agent or the
Lenders to conduct the appraisals of the Collateral.
(e) The Administrative Agent and the Lenders shall be entitled to
conduct four (4) commercial finance field examinations (in each
event, at the Companies' expense) of the Companies' books and
records during each twelve (12) month period during which this
Financing Agreement is in effect, provided that upon the
occurrence and during the continuance of a Default or an Event of
Default, the Administrative Agent and the Lenders may, at the
expense of the Companies, undertake such additional field
examinations as the Agents or Required Facility Lenders may
determine in their discretion.
(ii) The Obligors, at their own expense, shall arrange for a Phase I
environmental assessment, by a consultant satisfactory to the
Agents and the Lenders, with respect to the properties and
operations of the Obligors, from time to time as requested by the
Agents and the Lenders or shall permit the Agents and the Lenders
themselves to arrange for such assessments, and copies of the
results of such assessments shall be delivered to the Agents and
the Lenders upon request. The Obligors shall cooperate with the
conduct of the assessments and arrange for consultations between
the consultant and the Agents and the Lenders during the conduct
of such assessments.
(r) Accounts. To the extent it has not already done so on or before the
Closing Date, such Obligor shall, not later than the 45th day thereafter,
establish, and shall thereafter maintain, Blocked Accounts and concentration
accounts as required in Paragraph 3.4 of Section 3 hereof.
(s) Canadian Real Estate Title Insurance. Trim Trends shall deliver, on or
before June 5, 2001, the title insurance policy in respect of the Canadian
Debenture, which title insurance policy shall satisfy the criteria set forth in
Paragraph 2.1(v) of Section 2 hereof and shall otherwise be in form and
substance satisfactory to the Agents.
9.3 Indemnification (a) Each of the Companies hereby, jointly and
severally, agrees to indemnify and hold harmless the Agents, the Arrangers, the
Issuing Bank, each Lender and each of their affiliates and each of the
respective officers, directors, employees, attorneys and agents of each (each an
"Indemnified Party" under this subparagraph) from and against any and all
claims, damages, losses, liabilities, obligations, payments, made or required to
be made by the Agents or the Issuing Bank (or any of them) pursuant to any
indemnity provided by the Agents or the Issuing Bank (or any of them) and
reasonable expenses (including, without limitation,
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reasonable fees and disbursements of counsel) that may be
incurred by or asserted or awarded against any Indemnified Party
(including, without limitation, in connection with or by reason
of
(i) the Line of Credit, the Letters of Credit (or any of them) or any
drafts or acceptances relating thereto,
(ii) this Financing Agreement or the other Loan Documents or any of
the transactions contemplated thereby,
(iii) the Blocked Accounts, the lockbox, the Revolving Loan Account,
and/or any other deposit accounts and/or the agreements executed
in connection therewith,
(iv) the method of handling the accounts and Accounts of the
Collective Borrowers and Guarantors as herein provided,
(v) the Administrative Agent's or the Issuing Bank's or any Lender's
relying on any instructions of any of the Collective Borrowers or
any Guarantor,
(vi) any other action taken by the Administrative Agent in accordance
with subparagraph (b) of Paragraph 3.6 of Section 3 of this
Financing Agreement,
(vii) any violation or alleged violation of any Environmental Law by
the Obligor and each of its subsidiaries; or any claim or expense
which results from any of the Obligor's and each of its
subsidiaries' operations, or from the release or threatened
release at, to, or from any Real Estate of any Contaminants, or
remedial action (as defined under the Comprehensive,
Environmental Response, Compensation and Liability Act, 42
U.S.C.Ass. 9601 et seq., or any equivalent state, local or
foreign law) or corrective action (as this term is used in
Section 3004(u), 3004(v), and 3008(h) of the Resource
Conservation and Recovery Act or any equivalent state, local or
foreign law),
(viii) any other matter relating to or arising in connection with this
Financing Agreement or any of the other Loan Documents or any
part of the Collateral,
which such Indemnified Party may sustain or incur, all whether through the
alleged or actual negligence of such Person or otherwise, except and to the
extent that the same results solely and directly from the gross negligence or
willful misconduct of such Indemnified Party, as finally determined in a
non-appealable judgment by a court of competent jurisdiction. Trim Trends agrees
to indemnify and hold harmless each of the Indemnified Parties from and against
any and all claims, damages, losses, liabilities, obligations, and payments,
made or required to be made by any of them as contemplated above to the extent
they relate to the Trim Trends L/C Reimbursement Obligations or otherwise to any
Letter of Credit issued for the account of Trim Trends pursuant to Section 5 of
this Financing Agreement. Each of the Companies and Trim
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Trends hereby agrees that this indemnity shall survive termination of this
Financing Agreement, as well as payment of the Obligations and the Guaranty
Obligations.
(b) The Agents may, in their sole business judgment, establish such
Availability Reserves with respect to the indemnity provided for in subparagraph
(a) of this Paragraph 9.3 as they may deem advisable under the circumstances
and, upon any termination of the Revolving Line of Credit, the Administrative
Agent may hold such reserves as cash reserves in the Cash Collateral Account for
any such contingent liabilities. In the case of an investigation, litigation or
other proceeding to which the indemnity in this paragraph applies, such
indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by any of the Companies or Guarantors, any of their
respective directors, securityholders or creditors, an Indemnified Party or any
other Person, or an Indemnified Party is otherwise a party thereto and whether
or not the transactions contemplated by the Loan Documents are consummated.
(c) None of the Indemnified Parties shall have any liability (whether
direct or indirect, in contract, tort or otherwise) to any of the Obligors or
any of their respective securityholders or creditors for or in connection with
the transactions contemplated by the Loan Documents except for direct damages
(as opposed to special, indirect, consequential or punitive damages (including,
without limitation, any loss of profits, business or anticipated savings)) that
are determined in a final non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence or
willful misconduct.
(d) Each of the Companies hereby indemnifies the Administrative Agent and
holds the Administrative Agent harmless from any and all costs, expenses,
claims, liabilities, Out-of-Pocket Expenses or otherwise, incurred or imposed on
the Administrative Agent and/or the Agents, the Issuing Bank or the Lenders by
reason of the exercise of the rights, remedies and interests under Section 12 of
this Financing Agreement or any rights or remedies exercised under any of the
other Loan Documents in respect of any of the Collateral, including, without
limitation, from any sale or transfer of Collateral, preserving, maintaining or
securing the Collateral, defending its interests in Collateral (including
pursuant to any claims brought by the Obligors, any of the Obligors as
debtor-in-possession, the Junior Lien Lender or any other secured or unsecured
creditors of any of the Obligors, any trustee or receiver in bankruptcy, or
otherwise) or dealing with any of the Collateral as provided in the Loan
Documents or the Intercreditor Agreement (or any claim brought against the
Obligors or the Administrative Agent by the Junior Lien Lender in respect of any
of the foregoing), and the Companies hereby agree to so indemnify and hold the
Administrative Agent harmless, absent the Administrative Agent's gross
negligence or willful misconduct as finally determined in a non-appealable
judgment by a court of competent jurisdiction. The foregoing indemnification
shall survive termination of the Line of Credit and this Financing Agreement
until such time as all Obligations (including the foregoing) and Guaranty
Obligations have been fully, finally and indefeasibly paid in full. In
furtherance thereof the Administrative Agent, may establish such Availability
Reserve for Obligations and Guaranty Obligations hereunder (including any
contingent Obligations) as it may deem advisable in its reasonable business
judgment. Any additional indemnity provided for in any applicable mortgage(s),
deed(s) of trust or assignment(s) issued to the Administrative Agent on the Real
Estate shall govern the rights and remedies of the Administrative Agent relating
thereto.
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SECTION 10. Interest, Fees and Expenses Involving Obligations
10.1 Revolving Loans. (a) Interest on the Revolving Loans shall be
payable monthly as of the end of each month and accrue at the rate per annum
equal for each day to the sum of the Citibank Base Rate for such day plus one
and three quarters percent (1.75%) on the average of the net balances owing by
each of the Companies to the Administrative Agent in their Revolving Loan
Accounts at the close of each day during such month. In the event of any change
in the Citibank Base Rate, the rate hereunder for the Revolving Loans shall
change, as of the date of such change, so as to remain one and three quarters
percent (1.75%) above the Citibank Base Rate. The rate hereunder for the
Revolving Loans shall be calculated based on a 360-day year. The Administrative
Agent shall be entitled to charge each such Companies' Revolving Loan Account at
the rate provided for herein when due until all Obligations have been paid in
full.
(b) Notwithstanding any provision to the contrary contained in this Section
10, in the event that the sum of (i) the outstanding Revolving Loans and (ii)
the outstanding Letters of Credit exceeds the lesser of either (x) the maximum
aggregate amount available under Sections 3 and 5 of this Financing Agreement or
(y) the Revolving Line of Credit: (A) as a result of any Voluntary Overadvance,
for any one (1) or more days in any month, or (B) any Nonconsensual Overadvance
and such Nonconsensual Overadvance continues for five (5) or more days in any
month, the average net balance of all Revolving Loans for such month shall bear
interest at the Overadvance Rate.
(c) Upon and after the occurrence of an Event of Default and the giving of
any required notice by the Administrative Agent in accordance with the
provisions of Section 10, Paragraph 10.2 hereof, all Obligations shall bear
interest at the Default Rate of Interest.
10.2 Term Loans. (a) Interest on Term Loan A shall be payable monthly
as of the end of each month on the unpaid balance or on payment in full prior to
maturity and shall accrue at a rate per annum for each day in the relevant month
equal to the sum of the Citibank Base Rate for such day plus one and three
quarters percent (1.75%) per annum. In the event of any change in said Citibank
Base Rate the rate hereunder for any such Revolving Loans shall change, as of
the date of such change, so as to remain one and three quarters percent (1.75%)
above the Citibank Base Rate. The rate hereunder shall be calculated based on a
360 day year. The Administrative Agent shall be entitled to charge the Revolving
Loan Account at the rate provided for herein when due until all Obligations have
been paid in full.
(b) Interest on Term Loan B shall be payable monthly as of the end of each
month on the unpaid balance or on payment in full prior to maturity and shall
accrue at a rate per annum for each day in the relevant month equal to the sum
of the Citibank Base Rate for such day plus two and one half percent (2.50%) per
annum. In the event of any change in said Citibank Base Rate the rate hereunder
for any such Revolving Loans shall change, as of the date of such change, so as
to remain two and one half percent (2.50%) per annum above the Citibank Base
Rate. The rate hereunder shall be calculated based on a 360 day year. The
Administrative Agent shall be entitled to charge the Revolving Loan Account at
the rate provided for herein when due until all Obligations have been paid in
full.
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10.3 L/C Participation Fees. In consideration of each of the L/C
Participations and the Commitment of the Revolving Facility Lenders hereunder to
acquire them, as well as the Administrative Agent's agreement herein to make
payments to the Issuing Bank on behalf of the Revolving Facility Lenders, the
Companies shall pay to the Administrative Agent for the ratable benefit of the
Revolving Facility Lenders, the Letter of Credit Participation Fee, which shall
be an amount equal to the sum of the Citibank Base Rate for such day plus one
and three quarters percent (1.75%) per annum, payable monthly, on the face
amount of each Letter of Credit less the amount of any and all amounts
previously drawn under such Letter of Credit; provided, however, notwithstanding
any of the foregoing, during the continuance of an Event of Default, the Letter
of Credit Participation Fee shall be increased by an additional two percent (2%)
per annum.
10.4 Charges Relating to Letters of Credit. (a) Any and all charges, fees,
commissions, costs and expenses charged to any of the Lenders for the account of
any L/C Eligible Account Party by the Issuing Bank in connection with, or
arising out of, Letters of Credit or out of transactions relating thereto
(including the L/C Participations) will be charged to the Revolving Loan Account
in full when charged to, or paid by any Lender, or as may be due upon any
termination of the Revolving Line of Credit, and when made by the Issuing Bank
shall be conclusive on the Revolving Facility Lenders.
(b) The Issuing Bank's standard charges, fees, commissions, costs and
expenses payable to the Issuing Bank by the L/C Eligible Account Parties in
connection with the issuance of the Letters of Credit shall be as separately
agreed by Harvard, for the L/C Eligible Account Parties, with the Issuing Bank
in connection with each L/C Application and may include, without limitation, any
amounts of the kinds identified in Paragraph 10.5 of this Section 10.
10.5 Other Expenses. Each of the Companies shall reimburse or pay the
Agents, the Arrangers and/or the Lenders, as applicable, for (a) all
Out-of-Pocket Expenses, (b) in the case of the Administrative Agent, an audit
fee in the amount of $750.00 per Person per day or such higher amount as at the
time is being charged by the Administrative Agent or the agent or agents used by
it for the purpose, for each Person who, for or at the request of the
Administrative Agent, is engaged in appraising, valuing, inspecting or
monitoring the Collateral from time to time hereunder and (c) reasonable fees
and costs incurred in connection with the enforcement and protection of the
rights of the Agents (or any either of them) and, after any Event of Default or,
whether or not it ultimately becomes an Event of Default, any Default of a kind
contemplated in any of sub-paragraphs (c) or (g) of Paragraph 12.1, the Lenders
and the Issuing Bank, under this Financing Agreement or any other Loan Document,
including the protection of the rights of the Agents (or either of them) and the
Lenders and the Issuing Bank in any bankruptcy, reorganization, liquidation or
insolvency proceeding, whether or not litigation is commenced.
10.6 Line of Credit Commitment Fee. On the last Business Day of each month,
commencing with June, 2001, and on the Termination Date, the Companies shall pay
to the Administrative Agent the Line of Credit Commitment Fee plus the
Collection Day Interest for such month pursuant to Paragraph 3.4(a)(iv).
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10.7 Closing Fee. On the Closing Date, the Companies shall pay to the
Agents a Closing Fee in the amount separately agreed upon by them, to the extent
not previously paid, which shall be deemed fully earned when paid.
10.8 Administrative Management Fee. On the Closing Date and each
Anniversary Date thereafter until all Obligations and/or Guaranty Obligations
(as the case may be) of the Obligors under the Loan Documents shall have been
fully, finally and indefeasibly paid and all the Commitments have expired or
terminated (for purposes of this provision "Completion"), the Companies shall
pay to the Administrative Agent, for its own account, the annual Administrative
Management Fee in the amount of $75,000.00. This fee shall be deemed fully
earned when paid in advance for each year, provided that, for the year beginning
on the Anniversary Date in 2004, if Completion occurs on the Termination Date,
the annual Administrative Management Fee due on such Anniversary Date (but only
if then paid as and when due) shall be prorated (on the basis of a year of
twelve (12) months of thirty (30) days each), only the portion thereof
corresponding to May 2004 shall be deemed fully earned and the balance shall be
returned by the Administrative Agent to Harvard (for distribution by it among
the Companies as they may separately agree), to the account designated by
Harvard by notice to the Administrative Agent, within ten (10) Business Days
after the Termination Date.
10.9 Other Charges of the Administrative Agent. Without duplication of the
fees provided for in Paragraph 10.5(b) and as Out-of-Pocket Expense, the
Companies shall pay the Administrative Agent's standard charges and fees for the
Administrative Agent's Personnel used by the Agent for reviewing the books and
records of the Companies and for appraising, valuing, examining, verifying,
testing, protecting, safeguarding, preserving or disposing of all or any part of
the Collateral (which fees shall be in addition to the Administrative Management
Fee and any Out-of-Pocket Expenses).
10.10 Success Fee. Upon the earliest to occur of (i) the payment-in-full of
all Obligations, (ii) two years from the Closing Date or (iii) the sale of all,
or substantially all of, Xxxxx-Albion or Trim Trends operations, the Companies
shall pay to the Administrative Agent a Success Fee in the amount previously
agreed upon by them, for application among the Agents and the Lenders as
separately agreed upon by them.
10.11 Taxes. (a) Each payment by each Obligor under this Financing
Agreement or any other Loan Document shall be made without withholding on
account of any present or future Tax, levy, impost, duty, charge, assessment or
fee of any nature that is imposed by any Governmental Authority or taxing
authority unless withholding is required by applicable law. If applicable law
requires any such withholding by any Obligor, such Obligor shall give notice to
that effect to the Administrative Agent, make the necessary withholding and make
timely payment of the amount withheld to the appropriate Governmental Authority.
All amounts so withheld shall be paid before penalties attach thereto or
interest accrues thereon. If any such penalties or interest nonetheless become
due, the Companies shall make prompt payment thereof to the appropriate
Governmental Authority. If any Lender or Agent pays any amount in respect of any
such tax, levy, impost, duty, charge, assessment or fee that is not a net income
or net receipts Tax or a franchise Tax imposed in lieu of such net income or
receipts Tax (each such non-excluded tax, an "Indemnifiable Tax") which is
imposed on any payment due from any Obligor hereunder or penalties or interest
thereon, the Companies shall reimburse such Lender or
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Agent in U.S. dollars for that payment on demand. If any Obligor pays any such
Indemnifiable Taxes or penalties or interest thereon, it shall deliver official
tax receipts evidencing the payment or certified copies thereof to the
Administrative Agent (for the relevant Lender or Agent) not later than the
thirtieth (30th) day after payment.
(b) If any Lender or Agent that is organized outside the United States is
or becomes entitled to a reduced withholding rate or a complete exemption from
withholding with respect to Indemnifiable Taxes on payments to it by an Obligor
under this Financing Agreement or any of the other Loan Documents, within thirty
(30) days after receipt of a request of such Obligor, such Lender or Agent shall
as promptly as practicable, and provided it is not burdensome for it to do so,
complete and deliver from time to time to such Obligor such form as such Obligor
is required to obtain from such Lender or Agent in order to give effect to the
reduced rate or exemption.
(c) If any Indemnifiable Taxes are withheld from a payment due to a Lender
or an Agent in accordance with this Paragraph, the Companies shall promptly pay
to the Administrative Agent, for such Lender or Agent, such additional amount as
is necessary to ensure that the net amount actually received by such Lender or
Agent free and clear of those Indemnifiable Taxes is equal to the amount that
such Lender or Agent would have received had those Indemnifiable Taxes not been
withheld, except that, if an Agent or Lender is organized outside the United
States no such additional amount shall be payable to such Lender to the extent
that the relevant Indemnifiable Taxes would not have been imposed but for
failure by such relevant Agent or Lender to comply with the provisions of
Paragraph 10.11(b) hereof. The obligation of the Companies to pay these
additional amounts shall constitute Obligations and shall survive the
termination of the Lenders' Commitments, repayment of the principal of the Loans
and payment of all other Obligations.
(d) The Companies shall pay any registration or transfer taxes, stamp
duties or similar levies, and any penalties or interest that may be due with
respect thereto, that may be imposed by any jurisdiction in connection with this
Financing Agreement or the other Loan Documents. If any Lender or Agent pays any
amount in respect of any such taxes, duties, levies, penalties or interest, (or
if any Lender pays any such amount to the Issuing Bank in connection with an L/C
Participation) the Companies shall reimburse such Lender or such Agent for that
payment on demand.
10.12 Revolving Loan Account Charges. Each of the Obligors hereby
authorizes the Administrative Agent to charge the Revolving Loan Account(s) with
the amount of all Obligations due hereunder as such payments become due. The
Companies hereby confirm and agree that they shall promptly pay the Obligations
to the Administrative Agent upon its request therefor. Each of the Companies
confirms that (i) its liability for any and all of the fee obligations
(including without limitation, those set forth in Paragraphs 10.6 through 10.10
above) and Out-of-Pocket Expenses, set forth in this Financing Agreement and in
any of the other Loan Documents is joint and several, (ii) the Companies, as
between themselves, shall determine how to pro-rate any such payments due
hereunder (and how to pro-rate any such payment in respect of any Letter of
Credit issued for the account of Trim Trends, as between themselves and Trim
Trends) and (iii) for ease of administration, the Administrative Agent may
charge any of the Revolving Loan
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Accounts with the amount of any such fee payments, and any such charges which
the Administrative Agent may so make to any of the Companies' Revolving Loan
Account(s) as herein provided will be made as an accommodation to the Companies
and solely at the Administrative Agent's discretion.
10.13 Capital Adequacy Changes. In the event that any Agent, the Issuing
Bank or Lender (or any financial institution which may from time to time become
a participant in a Loan hereunder) shall have determined in the exercise of its
reasonable business judgment that, subsequent to the Closing Date, any change in
applicable law, rule, regulation or guideline regarding capital adequacy, or any
change in the interpretation or administration thereof, or compliance by such
Agent, the Issuing Bank or such Lender or participant (or any corporation
controlling any of them) with any new request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Agent's, the Issuing Bank's or such Lender's or participant's (or
controlling corporation's) capital as a consequence of its obligations hereunder
to a level below that which such Agent, the Issuing Bank, such Lender or
participant (or controlling corporation) could have achieved but for such
adoption, change or compliance (taking into consideration the policies with
respect to capital adequacy of such Agent, the Issuing Bank, such Lender or
participant (or controlling corporation)) by an amount reasonably deemed by such
Agent, the Issuing Bank, such Lender or participant (or controlling
corporation)) to be material, then, from time to time, the Companies shall pay
no later than five (5) days following demand to such Agent, the Issuing Bank or
Lender (for itself or for any participant in any of its Loans or for its
respective controlling corporation)) such additional amount or amounts as will
compensate such Agent, the Issuing Bank, such Lender or participant (or
controlling corporation)) for such reduction. In determining such amount or
amounts, such Agent, the Issuing Bank, such Lender or participant (or
controlling corporation)) may use any reasonable averaging or attribution
methods. The protection of this Paragraph 10.13 shall be available to such
Agent, the Issuing Bank, such Lender or participant (or controlling
corporation)) regardless of any possible contention of invalidity or
inapplicability with respect to the applicable law, regulation or condition. A
certificate of such Agent, the Issuing Bank, such Lender or participant (or
controlling corporation)) setting forth such amount or amounts as shall be
necessary to compensate such Agent, the Issuing Bank, such Lender or participant
(or holding company)) with respect to this Section 10 and the calculation
thereof when delivered to the Companies shall be conclusive on the Companies
absent manifest error. Notwithstanding anything in this paragraph to the
contrary, in the event such Agent, the Issuing Bank, such Lender or participant
(or controlling corporation)) has exercised its rights (directly or through an
Agent, the Issuing Bank or Lender) pursuant to this paragraph, and subsequent
thereto determines that the additional amounts paid by the Companies in whole or
in part exceed the amount which such Agent, Lender or participant (or
controlling corporation)) actually required to be made whole, the excess, if
any, shall be returned to the Companies by such Agent, the Issuing Bank, such
Lender or, through the Issuing Bank, the relevant Agent or Lender, such
participant or controlling corporation, as applicable.
10.14 Additional Costs. In the event that on or after the date hereof any
applicable law, treaty or governmental regulation is adopted, or any change
therein or in the interpretation or application thereof becomes effective, or
compliance by any Agent, the Issuing Bank, any Lender or any such participant
with any request or directive (whether or not having the force of law) from any
central bank or other financial, monetary or other authority, shall:
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(a) subject such Agent, the Issuing Bank, such Lender or participant to any
tax of any kind whatsoever with respect to this Financing Agreement or change
the basis of taxation of payments to such Agent, the Issuing Bank, such Lender
or participant of principal, fees, interest or any other amount payable
hereunder or under any other Loan Documents (except for changes in the rate of
tax on the overall net income or gross receipts of such Agent, the Issuing Bank,
such Lender or participant by the federal government or the jurisdiction in
which it maintains its principal office);
(b) impose, modify or hold applicable any reserve, special deposit,
assessment or similar requirement against assets held by, or deposits in or for
the account of, advances or loans by, or other credit extended by such Agent,
the Issuing Bank, such Lender or participant by reason of or in respect to this
Financing Agreement and the Loan Documents, including (without limitation)
pursuant to Regulation D of the Board of Governors of the Federal Reserve
System; or
(c) impose on such Agent, the Issuing Bank, such Lender or participant any
other condition with respect to this Financing Agreement or any other Loan
Document, and the result of any of the foregoing is to increase the cost to such
Agent, the Issuing Bank, such Lender or participant of making, renewing or
maintaining its Loans or interests therein or any such other extension of credit
provided pursuant to this Financing Agreement or any other Loan Document by an
amount that such Agent, the Issuing Bank, such Lender or participant deems to be
material in the exercise of its reasonable business judgment or to reduce the
amount of any payment (whether of principal, interest or otherwise) in respect
of any of such Loans, interests or other extensions of credit by an amount that
such Agent, the Issuing Bank, such Lender or participant (or controlling
corporation)) deems to be material in the exercise of its reasonable business
judgment, then, in any such case the Companies shall pay such Agent, the Issuing
Bank, such Lender or participant, within five (5) days following its demand,
such additional cost or such reduction, as the case may be. Such Agent, the
Issuing Bank, or such Lender or, through the relevant Lender, such participant
shall certify the amount of such additional cost or reduced amount to the
Companies and the calculation thereof and such certification shall be conclusive
upon the Obligors absent manifest error. Notwithstanding anything in this
paragraph to the contrary, in the event such Agent, the Issuing Bank, such
Lender or participant has exercised its rights pursuant to this paragraph, and
subsequent thereto determines that the additional amounts paid by the Companies
in whole or in part exceed the amount which such Agent, the Issuing Bank, such
Lender or participant actually required pursuant hereto, the excess, if any,
shall be returned to the Companies by such Agent, the Issuing Bank, such Lender
or, through the relevant Lender, such participant.
SECTION 11. Powers Involving Obligations; Obligations Absolute
11.1 Power of Attorney. Each Obligor hereby appoints the Administrative
Agent, or any Person or agent the Administrative Agent may designate, as its
attorney-in-fact, at the Obligor's cost and expense, to exercise all of the
following powers, which being coupled with an interest, shall be irrevocable
until all Obligations, in the case of any Company, all Trim Trends L/C
Reimbursement Obligations and related obligations, in the case of Trim Trends,
or all Guaranty Obligations, in the case of any Guarantor, have been fully,
finally and indefeasibly paid:
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(a) To receive, take, endorse, sign, assign and deliver, all in the name of
the Administrative Agent or the Obligors or any one of them, any and all checks,
notes, drafts, and other documents or instruments relating to the Collateral;
(b) To receive, open and dispose of all mail addressed to the Obligors or
any one of them and to notify postal authorities to change the address for
delivery thereof to such address as the Administrative Agent may designate;
(c) To request from customers indebted on Accounts at any time, in the name
of the Administrative Agent information concerning the amounts owing on the
Accounts;
(d) To request from customers indebted on Accounts at any time, in the name
of the Obligors or any one of them, in the name of certified public accountant
designated by the Administrative Agent (after consultation with the Syndication
Agent) or in the name of the Administrative Agent's designee, information
concerning the amounts owing on the Accounts;
(e) To transmit to customers indebted on Accounts notice of the
Administrative Agent's interest therein and to notify customers indebted on
Accounts to make payment directly to the Administrative Agent for the relevant
Obligor's account;
(f) To take or bring, in the name of the Administrative Agent or the
Obligors or any one of them, all steps, actions, suits or proceedings deemed by
the Administrative Agent necessary or desirable to enforce or effect collection
of the Accounts; and
(g) To take and refrain from taking any and all actions contemplated for it
in the Intercreditor Agreement or any Security Document.
Notwithstanding anything hereinabove contained to the contrary, the powers set
forth in clauses (b), (c), (e) and (f) of this Paragraph 11.1 may only be
exercised after the occurrence of an Event of Default or a Default of a kind
referred to in subparagraph (c) or (g) of Paragraph 12.1 of Section 12 hereof,
and until such time as such Default is remedied or, in the case of any Event of
Default, until such time as it is waived in writing by the Required Lenders,
subject to the following. If, in connection with any such Event of Default, the
Administrative Agent has (as provided in Paragraph 12.2) declared all
Obligations to be immediately due and payable (or they have, as contemplated in
Section 12 hereof, become so payable without need for any such declaration), the
Administrative Agent shall not be limited in the further exercise of the powers
set forth in this Paragraph 11.1, regardless of any subsequent remedy of any
such Event of Default, until all the Obligations and Guaranty Obligations have
been fully, finally and indefeasibly paid.
11.2 Joint and Several Liability of Companies. (a) Notwithstanding
anything in this Financing Agreement or any other Loan Document to the contrary,
each of the Companies hereby accepts joint and several liability hereunder and
under the other Loan Documents in consideration of the financial accommodations
to be provided by the Administrative Agent, the Lenders and the Issuing Bank
under this Financing Agreement and the other Loan Documents, for the mutual
benefit, directly and indirectly, of each of the Companies and other L/C
Eligible Account Parties and in consideration of the undertakings of the other
Companies to accept joint and several liability for the Loans and the other
Obligations hereunder, as well as the undertaking
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of Trim Trends for its own obligations relating to Letters of Credit issued for
its account. Each of the Companies, 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 Companies, with respect to the
payment and performance of all of the Obligations (including, without
limitation, any Obligations arising under this Paragraph 11.2), it being the
intention of the parties hereto that all of the Obligations shall be the joint
and several obligations of each of the Companies without preferences or
distinction among them. If and to the extent that any of the Companies 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 Companies will make such payment with respect to,
or perform, such Obligation.
(b) Subject to the terms and conditions hereof, the Obligations of each of
the Companies under the provisions of this Paragraph 11.2 constitute the
absolute and unconditional, full recourse Obligations of each of the Companies
enforceable against each Company to the full extent of its properties and
assets, irrespective of all of the following:
(i) any lack of validity or enforceability, any irregularity,
default or omission in any relevant documentation, including
any Loan Document, or of the Obligations, or any delay,
failure or omission to enforce or agreement not to enforce, or
the stay or enjoining, by order of court, by operation of law
or otherwise, of the exercise of any right with respect to the
foregoing (including, in each case, without limitation, as a
result of the insolvency, bankruptcy or reorganization of the
Issuing Bank, any Agent, any Lender, any Company or any other
Person);
(ii) any change in the time, manner or place of payment of, or in
any other term in respect of, all or any of the Loan
Documents;
(iii) any exchange or release of, or non-perfection of any lien on
or in, any Collateral, any release or amendment or waiver of
or consent to any departure from any guaranty or security, for
all or any of the Obligations or any release of any other
Obligor from all or any part of its obligations under this
Financing Agreement or any of the terms of any other Loan
Document;
(iv) any claim, set-off, counterclaim, defense or other rights,
including any as to marshalling of any security or guaranties
that any Obligor may have at any time and from time to time
against the Issuing Bank, any Agent, any Lender, or any other
Person, whether in connection with the transactions
contemplated in the Loan Documents or any other transaction;
or
(v) any other circumstances which might otherwise constitute a
defense based on suretyship or otherwise available to, or a
discharge of, any Company in respect of (A) the Obligations
of any Company, (B) the release of or waiver of any rights
against any other Obligor and the settlement, compromise or
release of any Obligations of any of them or (C) the failure
by the Administrative Agent, the Issuing Bank or any Lender
to attempt, or delay by it in attempting, to collect any
Obligations from any other Company or Guaranty Obligations
from any Guarantor or to realize upon any Collateral; and
the Issuing Bank, the Agents and the Lenders may deal with
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any of the Companies as they see fit without prejudice or
effect on this Financing Agreement or the security for the
Obligations;
and each Company hereby irrevocably waives all defenses that it might otherwise
have based on any of the matters identified above in this Paragraph 11.2 or
based on any other circumstances other than the full, final and indefeasible
payment of all Obligations; provided that the foregoing provisions of this
sentence relating to any Company and an Obligation shall not be understood to
constitute a waiver of any defense based on the full and final release of all
responsibility of such Company for such Obligation given in writing by the
Agents, the Issuing Bank and the Lenders.
(c) The provisions of this Paragraph 11.2 are made for the benefit of the
Agents, the Issuing Bank and the Lenders and their successors and assigns, and
may be enforced by it or them from time to time against any or all of the
Companies as often as occasion therefor may arise and without requirement on the
part of the Agents, the Issuing Bank and/or the Lenders or such successors or
assigns first to marshal any of its or their claims or to exercise any of its or
their rights against any other Company or to exhaust any remedies available to
it or them against any other Company 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 Paragraph 11.2 shall remain in effect until all
of the Obligations have been fully, finally and indefeasibly paid in cash.
(d) Each of the Companies hereby agrees that it will not enforce any of its
rights of contribution or subrogation against any other Company with respect to
any liability incurred by it hereunder or under any of the other Loan Documents,
any payments made by it with respect to any of the Obligations or the
application of any Collateral owned by it in respect of any of the Obligations,
until such time as all the Obligations have been fully, finally and indefeasibly
paid in cash. Any claim which any Company may have against any other Company
with respect to any such payments made by it or the application of any such
Collateral in respect of any of the Obligations are hereby expressly made
subordinate and junior in right of payment, without limitation, as to any
increases in the Obligations arising hereunder or thereunder, 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 Company, its debts
or its assets, whether voluntary or involuntary, all such Obligations shall be
fully, finally and indefeasibly paid in cash before any payment or distribution
of any character, whether in cash, securities or other property, shall be made
by any Company to any other Company therefor.
SECTION 12. Events of Default and Remedies
12.1 Events of Default. Each of the events and circumstances listed below
in this Paragraph 12.1 (each an "Event of Default") shall constitute an event of
default and material breach by the Companies of their obligations to the Agents,
the Issuing Bank and the Lenders:
(a) cessation of the business of any Obligor or the calling of a meeting
of the creditors of any Obligor in each case for purposes of
compromising the debts and obligations of such Obligor;
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(b) the failure of any Obligor to generally meet its debts as they mature
or its admission of its inability to do so;
(c) (i) the liquidation of any Obligor (other than in a Permitted
Liquidation); (ii) the commencement by any Obligor of any bankruptcy,
insolvency, arrangement, reorganization, receivership or similar
proceedings under any federal, provincial or state law; (iii) the
commencement against any Obligor of any bankruptcy, insolvency,
arrangement, reorganization, receivership or similar proceeding under
any federal, provincial or state law by creditors of such Obligor,
which proceeding shall not have been controverted within forty-five
(45) days or shall not have been dismissed and vacated within sixty
(60) days of commencement, or any of the actions sought in any such
proceeding shall occur or any Obligor shall take action to authorize
or effect any of the actions in any such proceeding; or (iv) the
commencement (x) by any of the subsidiaries of any Obligor which
itself is not a party hereto, of any bankruptcy, insolvency,
arrangement, reorganization, receivership or similar proceeding under
any applicable state or provincial law, or (y) against any subsidiary
of any Obligor, of any involuntary bankruptcy, insolvency,
arrangement, reorganization, receivership or similar proceeding under
applicable law, which proceeding shall not have been controverted
within forty-five (45) days and shall not have been dismissed or
vacated within sixty (60) days of commencement, or any of the actions
sought in any such proceeding shall occur or any of the subsidiaries
of any Obligor shall take action to authorize or effect any of the
actions in any such proceeding;
(d) any warranty or representation of any Obligor set forth in any of the
Loan Documents shall prove to have been incorrect in any material
respect when made or, if applicable, deemed made or repeated
thereunder;
(e) any Obligor fails to perform or be in compliance with any of its
covenants or other agreements contained herein, other than those
referred to in subparagraph (f) or subparagraph (g) below, or in any
other Loan Document or other written agreement between such Obligor
and any Agent or Lender, provided that such failure of performance or
noncompliance by such Obligor of any of the covenants referred in this
subparagraph (e) shall not be deemed to be an Event of Default unless
and until it shall remain unremedied to the Administrative Agent's
satisfaction for a period of ten (10) days from the date the failure
of performance or noncompliance occurs;
(f) any Obligor fails to perform or be in compliance with any of its
covenants or other agreements set forth in any of the following
provisions: Paragraph 3.4 subsection (a) of Section 3 hereof (other
than the second sentence of subclause (i) and the second, third and
fourth sentences of subclause (iv) thereof); Paragraphs 7.3, 7.4 and
7.5, Paragraph 8.3 of Section 8 hereof (other than the second sentence
of Paragraph 8.3 subparagraph (c)); Paragraph 9.2 subsections (a), (d)
(other than the first sentence thereof), (e), (f), (g), (except for
clauses (i), (ii) and (iii) thereof), (h), (i), (j), (k), (l), (o),
(p), (q) and (r) thereof; or (ii) this Financing Agreement or any of
the Security Documents fails or ceases for any reason to create a
perfected first priority mortgage or security interest in and lien on
any of the Collateral except as expressly permitted by this Financing
Agreement or any of the Security Documents;
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(g) failure by any of the Companies to make a prepayment as and when
required in Paragraph 7.3, Paragraph 7.4 or Paragraph 7.5 of Section 7
hereof or failure of the Obligors or any one of them otherwise to pay
(or to remit the proceeds of any Permitted Asset Transfer other than
an Intercompany Transfer to Administrative Agent for payment of) any
of the Obligations (in the case of the Company) or Guaranty
Obligations (in the case of a Guarantor) on the due date thereof;
(h) an event or condition constituting an ERISA Event or Unfunded Pension
Liabilities shall occur or exist with respect to any Plan, which event
or condition could reasonably be expected to have a Material Adverse
Effect;
(i) except as expressly permitted in the Loan Documents or in the
Intercreditor Agreement, the Obligors or any one of them shall amend
or otherwise modify any of the Junior Secured Obligations or Junior
Lien Financing Documents;
(j) the occurrence or existence of any event or circumstance the effect of
which is to cause, or to permit the holder or holders or beneficiary
or beneficiaries of (x) the Junior Secured Obligations or Junior
Secured Guaranty Obligations or (y) any other Indebtedness of the
Obligors or any one of them (other than the Obligations and the
Guaranty Obligations) having an aggregate principal amount in excess
of $250,000 (or a trustee or agent on behalf of such holder or holders
or beneficiary or beneficiaries) to cause, with the giving of notice
or the lapse of time, or both, such Junior Secured Obligations or
Junior Secured Guaranty Obligations or other Indebtedness to become
due prior to its stated maturity or which constitutes a failure to pay
when due (whether at maturity, by acceleration or otherwise) such an
aggregate amount of such Indebtedness;
(k) (i) any of Xxxxx X. Xxxxxxxx, Xxxxx X. Xxxx, Xxxxxxxx X. Xxxxxxx or J.
Xxxxxxx Xxxxxxx ceases for any reason whatsoever (other than as a
result of death) to be actively engaged in the management of the
Companies or (ii) a Change in Control occurs;
(l) General Motors Corporation gives notice that it proposes to take, or
General Motors Corporation takes, any action to exercise the Rights of
Access contemplated in section 3 of any Access and Security Agreement
or any similar right in any similar agreement involving any of the
properties of any of the Obligors;
(m) One or more judgments or decrees shall be entered against one or more
of the Obligors (or any subsidiary of any of them that is not a party
to this Financing Agreement) involving in the aggregate a liability
(to the extent not covered by third-party insurance as to which the
insurer has acknowledged coverage) of $50,000.00 or more and all such
judgments or decrees shall not have been vacated, discharged, stayed
or bonded pending appeal within thirty (30) days from the entry
thereof; or
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(n) The Inactive Guarantor shall, at any time after the date of this
Financing Agreement, engage in any business or receive any assets or
be involved in any transaction whatsoever other than those incidental
to maintaining its existence in compliance with the Loan Documents and
with the Junior Lien Financing Documents as in effect on the Closing
Date and approved by the Lenders on that date, or its own orderly
liquidation and dissolution.
12.2 Remedies Upon an Event of Default. (a) Upon the occurrence of an
Event of Default and the written direction of the Required Facility Lenders, the
Administrative Agent shall, declare that, all loans, advances and extensions of
credit provided for in Sections 3, 4 and 5 of this Financing Agreement shall be
thereafter in the Required Facility Lenders' discretion and, in the case of
issuance of any Letter of Credit, the discretion of the Issuing Bank and the
Required Facility Lenders, and the obligation of the Administrative Agent and/or
the Lenders or the Issuing Bank (as the case may be) to make Revolving Loans,
issue Letters of Credit and acquire L/C Participations shall cease unless such
Event of Default is waived in writing by the Required Facility Lenders or cured
to the Required Facility Lenders' satisfaction in the exercise of the Required
Facility Lenders' reasonable judgment.
(b) Upon the occurrence of an Event of Default, and the written direction
of the Required Facility Lenders the Administrative Agent shall,
(i) declare that all Obligations (including all Reimbursement Obligations
arising from drawings under Letters of Credit) are immediately due and
payable;
(ii) charge the Companies the Default Rate of Interest on all then
outstanding or thereafter incurred Obligations in lieu of the interest
at any lower rate provided for in Section 10 of this Financing
Agreement, provided that, with respect to this clause "(ii)" the
Administrative Agent has given the Companies written notice of the
Event of Default, provided further however, that no notice is required
if the Event of Default is an event or circumstance listed in any of
subparagraphs (a) through (c) of Paragraph 12.1 of this Section 12;
(iii) declare that the Line of Credit is immediately terminated, upon
notice to the Companies, provided, however, that upon the occurrence
of an Event of Default listed in Paragraph 12.1(c) of this Section 12,
the Line of Credit shall automatically terminate and all Obligations
shall become due and payable, without any action, declaration, notice
or demand by the Administrative Agent; and
(iv) direct the Companies to pay (and each of the Companies agrees that
upon receipt of such notice, or upon the occurrence of an Event of
Default under Paragraphs 12.1(a) and 12.1(c), it will immediately pay)
to the Administrative Agent additional cash in U.S. dollars, to be
held by the Administrative Agent in the Cash Collateral Account, in an
amount equal to the maximum aggregate amount which may be drawn under
all Letters of Credits then outstanding.
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The exercise of any of these options or alternatives is not exclusive of any
other option or alternative or right or remedy, which may be exercised at any
time by the Administrative Agent, the Issuing Bank and/or the Lenders (or any of
them).
12.3 Additional Remedies Upon an Event of Default. Immediately upon the
occurrence of any Event of Default, upon the written direction of the Required
Facility Lenders, the Administrative Agent shall, to the extent permitted by
law:
(a) remove from any premises where same may be located any and all books
and records, computers, electronic media and software programs
associated with any Collateral (including any electronic records,
contracts and signatures pertaining thereto), documents, instruments,
files and records, and any receptacles or cabinets containing same,
relating to the Accounts, or the Administrative Agent may use, at the
Obligors' expense, such of the Obligors' personnel, supplies or space
at the Obligors' places of business or otherwise, as may be necessary
to properly administer and control the Accounts or the handling of
collections and realizations thereon or on any other Collateral, and
the Obligors hereby irrevocably grant the Administrative Agent right
of access to their premises therefor;
(b) bring suit, in the name of the Obligors (or any of them) or the
Administrative Agent, and generally shall have all other rights
respecting said Accounts, including without limitation the right to:
extend the time of payment, settle, compromise, release in whole or in
part any amounts owing on any Accounts and issue credits in the name
of the Obligors (or any of them) or the Administrative Agent;
(c) sell, assign and deliver the Collateral and any returned, reclaimed or
repossessed Inventory, with or without advertisement, at public or
private sale, for cash, on credit or otherwise, at the Administrative
Agent's sole option and discretion, and the Administrative Agent may
bid or become a purchaser at any such sale, free from any right of
redemption, which right is hereby expressly waived by the Obligors (or
any of them);
(d) foreclose the security interests in the Collateral created herein or
by any of the other Loan Documents to secure the Obligations by any
available judicial procedure, or to take possession of any or all of
the Collateral, including any Inventory, Equipment and/or Other
Collateral without judicial process, and to enter any premises where
any Inventory and Equipment and/or Other Collateral may be located for
the purpose of taking possession of or removing the same;
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(e) exercise all rights and remedies provided in any mortgage or other
Security Document; and
(f) exercise any other rights and remedies provided in law, in equity, by
contract or otherwise.
The Administrative Agent shall have the right, without notice or advertisement,
to sell, lease, or otherwise dispose of all or any part of the Collateral,
whether in its then condition or after further preparation or processing, in the
name of any Obligor or the Administrative Agent, or in the name of such other
party as the Administrative Agent may designate, either at public or private
sale or at any broker's board, in lots or in bulk, for cash or for credit, with
or without warranties or representations, and upon such other terms and
conditions as the Administrative Agent in its sole discretion may deem
advisable, and the Administrative Agent shall have the right to purchase at any
such sale. If any Inventory and Equipment shall require rebuilding, repairing,
maintenance or preparation, the Administrative Agent shall have the right, at
its option, to do such of the aforesaid as is necessary, for the purpose of
putting the Inventory and Equipment in such saleable form as the Administrative
Agent shall deem appropriate and any such costs shall be deemed an Obligation
hereunder. The Obligors agree, at the request of the Administrative Agent, to
assemble the Inventory and Equipment and to make it available to the
Administrative Agent at premises of the Obligors or elsewhere and to make
available to the Administrative Agent the premises and facilities of the
Obligors for the purpose of the Administrative Agent's taking possession of,
removing or putting the Inventory and Equipment in saleable form. If notice of
intended disposition of any Collateral is required by law, it is agreed that ten
(10) days' notice shall constitute reasonable notification and full compliance
with the law. The net cash proceeds resulting from the Administrative Agent's
exercise of any of the foregoing rights, (after deducting all charges, costs and
expenses, including reasonable attorneys' fees) shall be applied by the
Administrative Agent to the payment of the Obligations, whether due or to become
due, in such order as the Administrative Agent may elect or as may be required
by the Intercreditor Agreement, and the Obligors shall remain liable to the
Administrative Agent for any deficiencies remaining. The Administrative Agent
shall remit to the Obligors or their successors or assigns, any surplus
resulting therefrom, subject to the terms of the Intercreditor Agreement
relating to remittance thereof to or to the order of the Junior Lien Lender,
except as may otherwise be required by order of a competent court. The
enumeration of the foregoing rights is not intended to be exhaustive and the
exercise of any right shall not preclude the exercise of any other rights, all
of which shall be cumulative. Any applicable mortgage(s), deed(s) of trust or
assignment(s) issued to the Administrative Agent on the Real Estate shall govern
the rights and remedies of the Administrative Agent thereto. Notwithstanding
anything to the contrary elsewhere in this Financing Agreement, if the
Obligations are declared or automatically become immediately due and payable
pursuant to Paragraph 12.2 of this Financing Agreement, in connection with an
Event of Default, the rights and remedies of the Administrative Agent provided
for herein, including, without limitation, the Administrative Agent's rights to
exercise the powers granted to it in the power of attorney included in this
Financing Agreement, shall continue and shall not cease to be effective until
the full, final and indefeasible payment of all the Obligations, regardless of
whether such Event of Default is subsequently remedied.
12.4 Right of Set-Off. Upon the occurrence and during the continuance of
any Event of Default, each Agent and each Lender and the Issuing Bank is hereby
authorized at any time and from time to time, to the fullest extent permitted by
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law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Agent or such Lender or the Issuing Bank to or for the credit
or the account of any Obligor against any and all of the Obligations (in the
case of any Obligor which is a Company), against any and all of the Guaranty
Obligations (in the case of any Guarantor), and against any and all of the
obligations of Trim Trends relating to any Letter of Credit issued for its
account (in the case of any such deposits or indebtedness held for or owing to
Trim Trends), in each case, including all such relevant Obligations or Guaranty
Obligations (as the case may be) now or hereafter existing under any of the Loan
Documents, irrespective of whether or not such Lender or any Agent or the
Issuing Bank shall have made any demand and although such Obligations or
Guaranty Obligations (as the case may be) may be unmatured. Each Lender and each
Agent and the Issuing Bank agrees promptly to notify the Obligors after any such
set-off and application made by such Lender or Agent or the Issuing Bank, as the
case may be; provided that the failure to give such notice shall not affect the
validity of such set-off and application.
SECTION 13. Termination
The Companies or any one of them may request the termination of this
Financing Agreement at any time with such advance notice as is required and
otherwise as contemplated in the provisions of this Financing Agreement
providing for reduction to zero of the Line of Credit and Commitments of the
Lenders and prepayment in full of the Loans, provided that the Companies pay to
the Administrative Agent immediately on demand the Early Termination Fee, if
applicable, but the actual termination shall be subject to the following. Notice
of request of termination, as aforesaid, by Harvard shall be deemed to be notice
by the Companies for purposes hereof. All Obligations shall become due and
payable as of any termination under this provision and, pending a final
accounting, the Administrative Agent may withhold any balances in the Companies'
accounts (unless supplied with an indemnity satisfactory to the Administrative
Agent) to cover all of the Obligations, whether absolute or contingent,
including, but not limited to, cash reserves for any L/C Obligations, or
otherwise, including an amount of one hundred five percent (105%) of the face
amount of any outstanding Letters of Credit with an expiry date on, or within
thirty (30) days of the effective date of termination of this Financing
Agreement, and cash reserves for any contingent obligation relating to expenses
and indemnities associated with turning over to the Junior Lien Lender or its
designee any of the Collateral to which it is entitled, as contemplated in the
Intercreditor Agreement. Upon satisfaction of the Agents, the Lenders and the
Issuing Bank as to all of the foregoing, the Agents, the Issuing Bank and
Lenders, at the expense of the Companies, shall execute and deliver such
releases, termination statements or other documents and take such actions as
Harvard may reasonably request, to confirm the release of the security interest
and liens created in the Collateral by this Financing Agreement and the other
Loan Documents and to confirm the termination of this Financing Agreement.
SECTION 14. Miscellaneous
14.1 Waivers. Each Obligor hereby waives diligence, notice of intent to
accelerate, notice of acceleration, demand, presentment and protest and any
notices thereof as well as notice of nonpayment except as otherwise expressly
provided in this Financing Agreement. No delay or omission of any Agent or any
Lender, the Issuing Bank or any Obligor to exercise any right or remedy
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hereunder, whether before or after the happening of any Event of Default, shall
impair any such right or shall operate as a waiver thereof or as a waiver of any
such Event of Default. No single or partial exercise by an Agent, the Issuing
Bank or any Lender of any right or remedy precludes any other or further
exercise thereof, or precludes any other right or remedy. A waiver on any one
occasion shall not be construed as a bar to, or waiver of, any right or remedy
on any future occasion. No waiver of any right or remedy provided for herein
shall be effective as a waiver unless it is in writing and signed by the
Administrative Agent
14.2 Entire Agreement. This Financing Agreement and the Loan Documents
executed and delivered in connection therewith constitute the entire agreement
between the Companies, the Guarantors, the Agents, the Issuing Bank and the
Lenders relating to the subject matter hereof and thereof; supersede any
agreements relating to that subject matter existing on the date of this
Financing Agreement other than the Agents' Commitment Letter (including, insofar
as it relates to certain fees payable thereunder and hereunder, the terms of the
Fee Letter referred to therein relating to those fees); may, subject to
Paragraph 16.10, be changed only by a writing signed by the Companies, the
Guarantors, the Administrative Agent (acting on behalf of the Required Lenders)
and the Issuing Bank; and shall bind the Obligors, the Agents, the Lenders, the
Issuing Bank and their respective successors and assigns, and shall benefit the
Obligors, the Agents, the Issuing Bank, the Arrangers and the Lenders and their
respective successors and assigns. The foregoing is subject to the exception
that, except as otherwise expressly provided in Paragraph 16.10, the signature
of the Issuing Bank on any such writing shall not be required at any time unless
the relevant change affects any right, commitment or obligation hereunder of the
Issuing Bank.
14.3 Usury. In no event shall an Obligor, upon demand by the Administrative
Agent for payment of any Indebtedness relating to any Obligation or Guaranty
Obligation, by acceleration of the maturity thereof, or otherwise, be obligated
to pay interest and fees in excess of the amount permitted by applicable law.
Regardless of any provision herein or in any agreement made in connection
herewith, none of the Lenders or Agents or the Issuing Bank shall ever be
entitled to receive, charge or apply, as interest on any indebtedness relating
hereto, any amount in excess of the maximum amount of interest permissible under
applicable law. If an Agent or a Lender or the Issuing Bank ever receives,
collects or applies any such excess, it shall be deemed a partial repayment of
principal owed to it hereunder and treated as such; and if principal is paid in
full, any remaining excess shall be refunded to the Obligors, as the case may
be. This paragraph shall control every other provision hereof, the Loan
Documents and of any other agreement made in connection herewith. As used
herein, the term "applicable law" shall mean the law in effect as of the date
hereof provided, however, that in the event there is a change in the law which
results in a higher permissible rate of interest, then this Financing Agreement
and the Loan Documents shall be governed by such new law insofar as it relates
to the permissible rate of interest as of its effective date.
14.4 Severability. If any provision hereof or of any other agreement made
in connection herewith is held to be illegal or unenforceable, such provision
shall be fully severable, and the remaining provisions of the applicable
agreement shall remain in full force and effect and shall not be affected by
such provision's severance. Furthermore, in lieu of any such provision, there
shall be added automatically as a part of the applicable agreement a legal and
enforceable provision as similar in terms to the severed provision as may be
possible.
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14.5 Waiver of Jury Trial. NONE OF THE COMPANIES, THE GUARANTORS, THE
LENDERS, THE AGENTS OR THE ISSUING BANK AND NO SUCCESSOR, ASSIGN OR PERSONAL
REPRESENTATIVE OF ANY OF THEM SHALL SEEK A JURY TRIAL IN ANY LAWSUIT,
PROCEEDING, COUNTERCLAIM OR ANY OTHER LITIGATION PROCEDURE INVOLVING ANY OF THE
COMPANIES, THE GUARANTORS, THE LENDERS, THE AGENTS OR THE ISSUING BANK (OR ANY
OFFICER, DIRECTOR, EMPLOYEE OR AGENT OF ANY OF THEM) BASED UPON OR ARISING OUT
OF THIS FINANCING AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, ANY COLLATERAL
FOR THE PAYMENT OF ANY OF THE OBLIGATIONS OR THE DEALINGS OR THE RELATIONSHIP
BETWEEN OR AMONG SUCH PERSONS OR ENTITIES, OR ANY OF THEM. NONE OF THE
COMPANIES, THE GUARANTORS, THE LENDERS, THE AGENTS OR THE ISSUING BANK WILL SEEK
TO CONSOLIDATE ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY
OTHER ACTION IN WHICH A JURY TRIAL CANNOT OR HAS NOT BEEN WAIVED. THE PROVISIONS
OF THIS PARAGRAPH 14.5 OF THIS SECTION 14 HAVE BEEN FULLY DISCUSSED BY THE
COMPANIES, THE AGENTS, THE LENDERS AND THE ISSUING BANK, AND THE PROVISIONS
HEREOF SHALL BE SUBJECT TO NO EXCEPTIONS. NO PARTY HAS IN ANY WAY AGREED WITH OR
REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS PARAGRAPH 14.5 OF
THIS SECTION 14 WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
14.6 Notices. Except as otherwise herein provided, any notice or other
communication required hereunder or relating to this Financing Agreement or any
other Loan Document shall except as otherwise expressly provided herein or in
such other Loan Document be in writing and may be given by personal delivery,
including by any commercial courier or overnight delivery service, or by United
States registered or certified mail, return receipt requested, with all postage
and fees fully prepaid. Notices shall be effective upon receipt by the party
being given notice, as indicated by the return receipt if mailed; except that if
a party has relocated without providing the other party with its new address for
service of notices, or if a party refuses delivery of a notice upon its tender,
the notice shall be effective upon the attempt to serve the notice at the last
address given for service of notices upon that party. In addition to (but not in
lieu of) the foregoing, notice may be served by facsimile transmission, in which
case service shall be deemed effective only upon receipt by the party serving
the notice of telephonic or return facsimile transmission confirmation that the
party to whom the notice is directed has received a complete and legible copy of
the notice (provided that, any electronic communications from any of the
Obligors with respect to any request, transmission, document, electronic
signature, electronic mail or facsimile transmission shall be deemed binding on
the Obligors for purposes of this Financing Agreement, provided further that any
such transmission shall not relieve the Obligors from any other obligation
hereunder to communicate further in writing). Notices shall be addressed to the
party to be notified as follows or to such other address as that party may
designate for itself by notice to the sender:
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(A) if to the Administrative Agent, at:
CIT Group/Business Credit, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Regional Manager
Fax No.: 000-000-0000
(B) if to the Syndication Agent, at:
Citicorp USA Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xx. Xxxxxx Xxxxxx, Vice President
Fax No.: 000-000-0000
(C) if to the Issuing Bank as follows, except as otherwise provided
in a Letter of Credit or, if applicable in the related L/C Application:
Citicorp USA, Inc.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx XxXxxxx
Fax No.: 000-000-0000
(D) if to any of the Companies or Guarantors at:
Harvard Industries, Inc.
0 Xxxxxx Xxx
Xxxxxxx, Xxx Xxxxxx 00000
Attn: Xx. Xxxxx Xxxxxxxx
Fax No.: 000-000-0000
With a courtesy copy of any material notice to the Companies' counsel
at:
Xxxxxxxxxx & Xxxxx LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xx. Xxxxxx Xxxxxxxxx
Fax No.: 000-000-0000
(provided, however, that the failure of any Agent to provide the Companies' or
Guarantors' counsel with a copy of such notice shall not invalidate any notice
given to the Companies and shall not give the Companies any rights, claims or
defenses due to the failure of any Agent to provide such additional notice);
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(E) if to any Lender hereunder,
at the address set forth for that Lender below or in the applicable Assignment
and Assumption Agreement:
As Lenders:
CIT Group/Business Credit, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Regional Manager
Fax No.: 000-000-0000
Citicorp USA Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xx. Xxxxxx Xxxxxx, Vice President
Fax No.: 000-000-0000
14.7 Governing Laws. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS
FINANCING AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS,
EXCEPT TO THE EXTENT THAT ANY OTHER LOAN DOCUMENT INCLUDES AN EXPRESS ELECTION
TO BE GOVERNED BY THE LAWS OF ANOTHER JURISDICTION AND EXCEPT AS OTHERWISE
REQUIRED BY THE UNIFORM COMMERCIAL CODE.
14.8 Submission to Jurisdiction; Service of Process. Each of the Obligors
hereby irrevocably: (a) Submits for itself and its property in any legal
action or proceeding relating to this Financing Agreement and the other Loan
Documents to which it is a party, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, in the county of New York of the United States
District Court for the Southern District of New York, and appellate courts from
any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that nothing contained herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the right
to xxx in any other jurisdiction;
(d) appoints CT Corporation, Inc., at 000 Xxxxxx Xxxxxx, 00xx xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, as its agent to receive service of process or other
summons in connection with any such action or proceeding and waives personal
service of process and consents to service of process by certified or registered
mail, return receipt requested, addressed to such Obligor at its address for
notices hereunder.
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14.10 Headings. The headings of this Financing Agreement are solely for the
purpose of identification and shall not be construed as a part of the paragraphs
or sections they head.
14.11 Replacement of Promissory Note. Upon receipt of an affidavit of an
officer of the Administrative Agent or a Lender, as applicable, as to the loss,
theft, destruction or mutilation of a Promissory Note or any other Loan
Document, and, in the case of any such loss, theft, destruction or mutilation,
upon cancellation of such Promissory Note or other Loan Document, the Companies
will issue, in lieu thereof, a replacement Promissory Note or other Loan
Document in the same principal amount thereof and otherwise of like tenor. In
addition, if any Lender shall so request, the Companies shall execute and
deliver to such Lender, through the Administrative Agent, Promissory Notes
evidencing such Lender's share of the Term Loans and, in substitution for the
Promissory Notes previously delivered to the Administrative Agent evidencing the
Term Loans, shall execute and deliver to the Administrative Agent new Promissory
Notes evidencing the portions thereof not evidenced by separate Promissory Notes
delivered to evidence any individual Lender's share of the Term Loans.
14.12 Counterparts. This Financing Agreement may be signed in any number of
counterparts with the same effect as if the signatures hereto were upon the same
instrument.
14.13 Assignments and Participations. (a) The Companies may not assign
or transfer any of their rights under this Financing Agreement, the Promissory
Notes or the other Loan Documents without the prior written consent of the
Agents and the Lenders, and any such assignment or transfer without the Agents
and the Lenders' prior written consent shall be null and void.
(b) Each Lender may sell, transfer, negotiate or assign to one or more
Eligible Assignees all or a portion of its rights and obligations hereunder
(including all of its rights and obligations with respect to the Term Loans, the
Revolving Loans and the L/C Participations); provided, however, that (i) if any
such assignment shall be of the assigning Lender's Revolving Loans or Revolving
Credit Commitment or any related L/C Participation, such assignment shall cover
the same percentage of such Lender's Revolving Loans and Revolving Credit
Commitment and L/C Participations, (ii) the aggregate amount being assigned
pursuant to each such assignment (determined as of the date of the Assignment
and Acceptance with respect to such assignment) shall in no event (if less than
the assigning Lender's entire interest) be less than $5,000,000 and, unless such
assigning Lender is assigning its entire interest, the aggregate amount retained
by any such assigning Lender (determined as of such date) shall in no event be
less than $5,000,000, except, in either case, (A) with the consent of the
Administrative Agent or (B) if such assignment is being made to a Lender or an
Affiliate or Approved Fund of such Lender and (iii) if such Eligible Assignee is
not, prior to the date of such assignment, a Lender or an Affiliate or Approved
Fund of a Lender, such assignment shall be subject to the prior consent of the
Administrative Agent and the Issuing Bank (which consent shall not be
unreasonably withheld or delayed.
(c) The parties to each assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording, an Assignment and
Transfer Agreement, together with any Promissory Note (if the assigning Lender's
Loans are evidenced by a Promissory Note) subject to such assignment, and if any
Revolving Loan or Revolving Credit Commitment is involved, shall at the same
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time deliver a copy to the Issuing Bank. Upon such execution, delivery,
acceptance and recording and the receipt by the Administrative Agent from the
assignee of an assignment fee in the amount of $1,000 (subject to any consents
required pursuant to the preceding subparagraph), from and after the effective
date specified in such Assignment and Transfer Agreement, (i) the assignee
thereunder shall become a party hereto and, to the extent that rights and
obligations under the Loan Documents have been assigned to such assignee
pursuant to such Assignment and Transfer Agreement, have the rights and
obligations of a Lender and L/C Participant and (ii) the assignor thereunder
shall, to the extent that rights and obligations under this Financing Agreement
have been assigned by it pursuant to such Assignment and Transfer Agreement,
relinquish its rights (except those that survive the payment in full of the
Obligations) and be released from its obligations under the Loan Documents,
other than those relating to events or circumstances occurring prior to such
assignment (and, in the case of an Assignment and Transfer Agreement covering
all or the remaining portion of an assigning Lender's rights and obligations
under the Loan Documents, such Lender shall cease to be a party hereto).
(d) The Administrative Agent shall maintain at its address referred to in
Paragraph 14.6 a copy of each Assignment and Transfer Agreement delivered to and
accepted by it and a register for the recording of the names and addresses of
the Lenders and the Commitments of and principal amount of the Loans and, where
applicable, Revolving Credit Percentage of L/C Obligations owing to each Lender
from time to time (the "Register"). Any assignment pursuant to this Paragraph
14.13(d) shall not be effective until such assignment is recorded in the
Register. The entries in the Register shall be conclusive and binding for all
purposes absent manifest error, and each party to any of the Loan Documents may
treat each Person whose name is recorded in the Register as a Lender as such for
all purposes of this Financing Agreement. The Register shall be available for
inspection by the Companies, the Guarantors, the Agents, the Issuing Bank or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Notwithstanding anything to the contrary contained in the preceding
subparagraph of this Paragraph 14.13, the Loans (including the Promissory Notes
evidencing the Loans) are registered obligations and the right, title, and
interest of the Lenders and their assignees in and to the Loans shall be
transferable only upon notation of such transfer in the Register. A Promissory
Note shall only evidence a Lender's or an assignee's right title and interest in
and to the related Loan, and in no event is any such Promissory Note to be
considered a bearer instrument or obligation. This Paragraph 14.13 shall be
construed so that the Loans are at all times maintained in "registered form"
within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code and
any related regulations (or any successor provisions of the Code or such
regulations). Solely for purposes of this Paragraph and for tax purposes only,
the Administrative Agent shall act as the Companies' agent for purposes of
maintaining such notations of transfer in the Register.
(f) Upon its receipt of an Assignment and Transfer Agreement executed by an
assigning Lender and an assignee, the Administrative Agent shall, if such
Assignment and Transfer Agreement has been completed, and subject to any
consents required pursuant to subparagraph (b) of this Paragraph 14.13, (i)
accept such Assignment and Transfer Agreement, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to
Harvard (for it to give to the other Companies). Within five (5) Business Days
after its receipt of such notice, the Companies, at their own expense, shall, if
108
requested by such assignee, execute and deliver to the Administrative Agent, new
Promissory Notes to the order of such assignee in an amount equal to the Term
Loans assigned to it pursuant to such Assignment and Acceptance and, if the
assigning Lender has surrendered any Promissory Note for exchange in connection
with the assignment and has retained Term Loans hereunder, new Promissory Notes
to the order of the assigning Lender in an amount equal to the Term Loans
retained by it hereunder. Such new Promissory Notes shall be dated the same date
as the surrendered Promissory Notes and be in substantially the form of Exhibit
B or Exhibit C, as applicable.
(g) In addition to the other assignment rights provided in this Paragraph
14.13, each Lender may assign, as collateral or otherwise, any of its rights
under this Agreement (including rights to payments of principal or interest on
the Loans) to (i) any Federal Reserve Bank pursuant to Regulation A of the
Federal Reserve Board without notice to or consent of the Companies or the
Administrative Agent or the Issuing Bank and (ii) any trustee for the benefit of
the holders of such Lender's securities; provided, however, that no such
assignment shall release the assigning Lender from any of its obligations
hereunder.
(h) Each Lender may sell participations to one or more Persons in or to all
or a portion of its rights and obligations under the Loan Documents. The terms
of such participation shall not, in any event, require the participant's consent
to any amendments, waivers or other modifications of any provision of any Loan
Documents, the consent to any departure by any party to a Loan Document, or to
the exercising or refraining from exercising any powers or rights such Lender
may have under or in respect of the Loan Documents (including the right to
enforce the obligations of the parties to the Loan Documents), except if any
such amendment, waiver or other modification or consent would (i) reduce the
amount, or postpone any date fixed for, any amount (whether of principal,
interest or fees) payable to such participant under the Loan Documents, to which
such participant would otherwise be entitled under such participation or (ii)
result in the release of all or substantially all of the Collateral. In the
event of the sale of any participation by any Lender, (A) such Lender's
obligations under the Loan Documents shall remain unchanged, (B) such Lender
shall remain solely responsible to the other parties for the performance of such
obligations, (C) such Lender shall remain the holder of such Obligations for all
purposes of this Financing Agreement and other relevant Loan Documents and (D)
the Obligors, the Administrative Agent and the other Lenders and the Issuing
Bank shall continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Financing Agreement and
other relevant Loan Documents. Each participant shall be entitled to the
benefits of Paragraph 10.11, Paragraph 10.13 and Paragraph 10.14 as if it were a
Lender; provided, however, that anything herein to the contrary notwithstanding,
the Companies shall not, at any time, be obligated to make under Paragraph
10.11, Paragraph 10.13 and Paragraph 10.14 to the participants in the rights and
obligations of any Lender (together with such Lender) any payment in excess of
the amount the Companies would have been obligated to pay to such Lender in
respect of such interest had such participation not been sold.
(i) The Obligors authorize each Lender to disclose to any participant or
purchasing lender (each, a "Transferee") and any prospective Transferee any and
all financial information in such Lender's possession concerning such Obligors
which has been delivered to such Lender by or on behalf of an Obligor pursuant
to this Financing Agreement or which has been delivered to such Lender by or on
behalf of an Obligor in connection with such Lender's credit evaluation of an
Obligor prior to entering into this Financing Agreement, provided that such
Transferee agrees in writing to hold such information, to the extent it is
marked confidential, in confidence.
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(j) Notwithstanding any of the foregoing in this Paragraph 14.13, the
Obligors shall, if necessary, execute any documents reasonably required to
effectuate an assignment or transfer by a Lender contemplated by this Paragraph
14.13, including, without limitation, amendments to the Financing Agreement, the
Promissory Notes or any other Loan Document, as the Administrative Agent shall
reasonably deem necessary to effect the foregoing.
14.14 Currency. All Obligations and Guaranty Obligations shall be payable
in U.S. dollars. The foregoing reference to U.S. dollars is of the essence. The
Obligations and Guaranty Obligations shall, notwithstanding any payment in any
other currency (whether pursuant to a judgment or otherwise), be discharged only
to the extent of the amount in U.S. dollars that the Administrative Agent may,
in accordance with normal banking procedures, purchase with the sum paid in that
other currency (after deducting any premium and costs of exchange) on the
Business Day immediately following the day on which the Administrative Agent
receives that payment. If the amount in U.S. dollars that may be so purchased
for any reason falls short of the amount originally due, the Obligors shall pay
to the Administrative Agent such additional amount, in U.S. dollars, as is
necessary to compensate for the shortfall. Any Obligation and Guaranty
Obligation not discharged by that payment shall, to the fullest extent permitted
by applicable law, be due as a separate and independent Obligation or Guaranty
Obligation, as applicable, and, until discharged as provided herein, shall
continue in full force and effect.
14.15 Rate of Interest for Canadian Companies. For purposes of disclosure
pursuant to the Interest Act (Canada), the yearly rate of interest to which any
rate of interest payable under this Financing Agreement which is to be
calculated on any basis other than a full calendar year is equivalent may be
determined by multiplying such rate by a fraction, the numerator of which is the
number of days in the calendar year in which the period for which the interest
at such rate is payable ends and the denominator of which is the number of days
comprising such other basis.
14.16 Amendments; Waivers. (a) The Administrative Agent may, in its
discretion, waive any of the conditions specified in Paragraph 2.2 as they apply
after the Closing Date with respect to making a Revolving Loan, unless the
Required Facility Lenders have affirmatively informed the Administrative Agent
in writing that they oppose the waiver. Except as provided in the preceding
sentence, no amendment or waiver of any provision of this Financing Agreement or
any other Loan Document nor consent to any departure by any Company or Guarantor
therefrom shall in any event be effective unless the same shall be in writing
and signed by the Required Facility Lenders and, in the case of any amendment,
by the Companies or, if a party to the relevant Loan Documents, the Guarantors,
and then any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however, that
no amendment, waiver or consent shall, unless in writing and signed by each
Lender directly affected thereby do any of the following (it being understood
that the amendments described in clauses (iv) through (x) below shall be deemed
to directly affect each Lender), in addition to the Required Facility Lenders:
(i) waive any of the conditions specified in Paragraph 2.1
(Conditions Relating to the Closing Date), Paragraph 2.2
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(Conditions of Each Extension of Credit) as it applies to the
Loans made on the Closing Date, or Paragraph 2.3 (Conditions
Relating to Issuance of Letters of Credit) of Section 2 except
with respect to a condition based upon another provision hereof,
the waiver of which requires only the concurrence of the Required
Facility Lenders;
(ii) increase the Commitment of such Lender or subject such Lender to
any additional obligations; provided, however, that any such
increase with respect to the Term Loan Commitments or the
Revolving Credit Commitments shall require the consent of the
Required Term Loan Lenders or the Required Revolving Credit
Lenders, as the case may be.
(iii) extend the scheduled final maturity of any Loan of such Lender,
or waive, reduce or postpone any scheduled date fixed for the
payment or reduction of principal of such Loan (it being
understood that Paragraphs 7.3 and 7.4 of Section 7 do not
provide for scheduled dates fixed for payment);
(iv) reduce the principal amount of any Loan or due to such Lender
(other than by the payment or prepayment thereof);
(v) reduce the rate of interest (or change the manner in which such
interest is paid) on any Loan or Obligations outstanding to such
Lender or any fee payable hereunder to such Lender;
(vi) postpone any scheduled date fixed for payment of interest or fees
due to such Lender;
(vii) change any provision hereof expressly requiring the consent of
all Lenders, the Required Term Loan Lenders, the Required
Revolving Facility Lenders or the Required Facility Lenders;
change the definition of "Required Facility Lenders", "Required
Revolving Facility Lenders", "Required Term Loan Lenders" or
"Required Term Loan B Lenders"; or change this Paragraph 14.16 of
this Section 14;
(viii) change the definitions of Eligible Accounts Receivable,
Eligible Inventory, Inventory Loan Cap, Collateral or any
provision of the Intercreditor Agreement or any provision of any
Loan Document relating to the Intercreditor Agreement or the
rights, interests or duties of the Junior Lien Lender vis-a-vis
the Lenders or the Agents;
(ix) increase the advance percentages against Eligible Accounts or
Eligible Inventory or amend the definitions of "Eligible Accounts
Receivable" and/or "Eligible Inventory" (it being understood,
however, that the foregoing shall not restrict the power of the
Administrative Agent, in its reasonable business judgment, to
determine whether an Account or piece of Inventory falls within
the reach of any of these clauses) or alter the minimum
Availability required under Paragraph 2.2(c) of Section 2, if the
effect of any thereof is to increase the Availability or reduce
such minimum required Availability; or
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(x) release any guaranty or Collateral in excess of $500,000.00
during any year, or release any Guarantor from its obligations
under this Financing Agreement, except as permitted pursuant to a
waiver or consent of a transaction otherwise prohibited by this
Financing Agreement;
and provided, further, that (A) any modification of the application of, or the
order of application of, payments to Term Loan A or Term Loan B pursuant to
Section 7.3 or 7.4 shall require the consent of the Required Term Loan A Lenders
and Required Term Loan B Lenders and any such modification of the application to
the Revolving Loans pursuant to Section 7.3 or 7.4 or the reduction of the
Revolving Credit Commitments pursuant to Section 6.1 shall require the consent
of the Required Revolving Facility Lenders, (B) no amendment, waiver or consent
shall, unless in writing and signed by the Administrative Agent in addition to
the Lenders required above to take such action, affect the rights or duties of
the Administrative Agent under this Financing Agreement or the other Loan
Documents, (C) no amendment, waiver or consent shall, unless in writing and
signed by the Issuing Bank in addition to the Lenders required above to take
such action, affect the rights or duties of the Issuing Bank under this
Financing Agreement or the other Loan Documents, and (D) no amendment, waiver or
consent shall, unless in writing and signed by the Syndication Agent, in
addition to the Lenders required above to take such action, affect the rights or
duties of the Syndication Agent under this Financing Agreement or the other Loan
Documents.
(b) The Administrative Agent may, but shall have no obligation to, with the
written concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of such Lender. Any waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it was given. No
notice to or demand on the Obligors (or any of them) in any case shall entitle
the Obligors (or any of them) to any other or further notice or demand in
similar or other circumstances.
14.17 Confidentiality. The Lenders, the Agents and the Issuing Bank agree
to maintain the confidentiality of any non-public information provided by the
Obligors to them, in the ordinary course of their business, provided that the
foregoing confidentiality provision shall terminate one (1) year after the
termination of the Line of Credit, and provided further that the Lenders may
disclose such information (a) after such information shall have become public
other than through a violation of this Paragraph 16.14 of this Section 16, (b)
to the extent required by statute, rule, regulation or judicial process, (c) to
counsel for any of the Lenders or any Agent, (d) to bank examiners or any other
regulatory authority having jurisdiction over any Lender or any Agent, or to
auditors or accountants, (e) to any Agent, or any Lender, (f) in connection with
any litigation to which any one or more of the Lenders or any Agent is a party,
or in connection with the enforcement of rights or remedies hereunder or under
any other Loan Document, (g) to a subsidiary or affiliate of such Lender, (h) to
any assignee or participant (or prospective assignee or participant) so long as
such assignee or participant agrees to be bound by the provisions hereof or (i)
to the Junior Lien Lender.
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14.18 Contribution. (a) Notwithstanding anything to the contrary in
Paragraph 11.3 of Section 11 or Paragraph 17.4 of Section 17, if any Obligor
makes any payment in respect of any of the Obligations or Guaranty Obligations,
other than Obligations in respect of Loans to the extent the proceeds thereof
were received by or for such Obligor, through Harvard or otherwise (an "Obligor
Payment") and, taking into account all other Obligor Payments then previously
made or concurrently being made by any of the other Obligors, the amount of such
Obligor Payment exceeds the amount such Obligor would otherwise have paid if
each Obligor had paid the aggregate Obligations satisfied by such Obligor
Payment in the same proportion as such Obligor's Allocable Amount (as defined
below), determined immediately prior to such Obligor Payment, bore to the
aggregate Allocable Amounts of all the Obligors as determined immediately prior
to the making of such Obligor Payment, then, following full, final and
indefeasible payment of the Obligations and the Guaranty Obligations and the
termination of the Commitments, such Obligor shall be entitled to receive
contribution and indemnification payments from, and be reimbursed by, each other
Obligor for the amount of the excess, pro rata, based upon their respective
Allocable Amounts of the Obligors in effect immediately prior to such Obligor
Payment.
(b) As of any date of determination, the "Allocable Amount" of each
Obligor shall be equal to the maximum amount of the claim that could then be
recovered from such Obligor under this Paragraph without rendering such claim
voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or
under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent
Conveyance Act or similar statute or common law.
(c) This Paragraph 14.18 is intended only to define certain relative
rights of the Obligors vis-a-vis each other, and nothing set forth in this
Paragraph 14.18 is intended to or shall impair the obligations of the Obligors
to pay any amounts as and when the same shall become due and payable in
accordance with the terms of this Financing Agreement, as their joint and
several obligations in respect of the Obligations, in the case of the Companies,
as their joint and several obligations in respect of the Harvard Obligations, in
the case of the Guarantors, and as their own Guaranty Obligations, in the case
of the Guarantors (to the extent those Guaranty Obligations exceed the Harvard
Obligations). Nothing in this Paragraph 14.18 shall limit the liability of any
Company to pay the Loans made directly or indirectly to that Company and accrued
interest and expenses with respect thereto, for which such Company shall be
primarily liable, or shall limit the liability of Trim Trends to pay the Trim
Trends L/C Reimbursement Obligations and its related Guaranty Obligations, for
which Trim Trends shall be primarily liable.
(d) The parties hereto acknowledge that the rights of contribution and
indemnification provided for in this Paragraph 14.18 shall constitute assets of
the Obligor to which such contribution and indemnification is owing.
(e) The rights of the indemnifying Obligors against other Obligors
under this Paragraph 14.18 shall be exercisable upon the full, final and
indefeasible payment of the Obligations and the Guaranty Obligations and the
termination of the Commitments.
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SECTION 15. Agreement between the Lenders
15.1 Disbursements. (a) The Administrative Agent, for the account of the
Lenders, shall disburse all loans and advances to the Companies to be made
hereunder by the Lenders and shall handle all collections of Collateral and
repayment of Obligations and Guaranty Obligations. It is understood that for
purposes of advances to the Companies and for purposes of this Section 15 the
Administrative Agent is using the funds of the Administrative Agent.
(b) Unless the Administrative Agent shall have been notified in writing by
any Lender prior to any advance to the Companies that such Lender will not make
the amount which would constitute its share of the borrowing of any Loan on such
date available to the Administrative Agent, the Administrative Agent may assume
that such Lender shall make such amount available to the Administrative Agent on
a Settlement Date, and the Administrative Agent may, in reliance upon such
assumption, make available to the Companies a corresponding amount. A
certificate of the Administrative Agent submitted to any Lender with respect to
any amount owing under this subsection shall be conclusive, absent manifest
error. If such Lender's share of such borrowing is not in fact made available to
the Administrative Agent by such Lender on the Settlement Date, the
Administrative Agent shall be entitled to recover such amount with interest
thereon at the rate per annum applicable to Revolving Loans hereunder, on
demand, from the Companies without prejudice to any rights which the
Administrative Agent may have against such Lender hereunder. Nothing contained
in this subsection shall relieve any Lender which has failed to make available
its ratable portion of any borrowing hereunder from its obligation to do so in
accordance with the terms hereof. Nothing contained herein shall be deemed to
obligate the Administrative Agent to make available to the Companies the full
amount of a requested advance when the Administrative Agent has any notice
(written or otherwise) that any of the Lenders will not advance its ratable
portion thereof.
15.2 Lender and Administrative Agent Adjustments. (a) On each Settlement
Date, the Administrative Agent and the Lenders shall (subject to Paragraph
15.2(c)) each remit to the other, in immediately available funds, all amounts
necessary so as to ensure that, as of the Settlement Date, the Lenders shall
have their proportionate shares of all outstanding Obligations and Guaranty
Obligations as provided below in this Paragraph 15.2 (where "Lender" shall be
understood to include the Administrative Agent), each of the Revolving Facility
Lenders shall have paid to the Administrative Agent an amount equal to such
Revolving Facility Lender's Revolving Credit Percentage of each payment made by
the Administrative Agent to the Issuing Bank, on behalf of the Revolving
Facility Lenders, pursuant to Paragraph 5.7 of Section 5 of this Financing
Agreement (taking into account the provisions of Paragraph 15.2(b)), and each
Revolving Facility Lender shall have received its Revolving Credit Percentage of
each payment made by the Issuing Bank to the Administrative Agent for
distribution among the Revolving Facility Lenders as contemplated in Paragraph
5.6(d) of Section 5 of this Financing Agreement.
(b) The amounts payable by each Revolving Facility Lender to the
Administrative Agent on account of such Lender's Revolving Facility Percentage
of each such payment made on its behalf by the Administrative Agent to the
Issuing Bank shall be increased by the interest payable to the Issuing Bank on
the same percentage of such payment pursuant to Paragraph 5.7 of Section 5
hereof, to the extent paid by the Administrative Agent. The failure of any
Revolving Facility Lender to make available to the Administrative Agent its
Revolving Credit
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Percentage or other relevant proportionate share of any such payment shall not
relieve any other Lender of its obligation hereunder to make available to the
Administrative Agent its Revolving Credit Percentage or other relevant
proportionate share of any payment on a Settlement Date, but no Lender shall be
responsible for the failure of any other Lender to make available to the
Administrative Agent such other Revolving Facility Lender's Revolving Credit
Percentage or other relevant proportionate share of any such payment.
(c) The Administrative Agent is hereby irrevocably authorized by each of
the Lenders to make the settlements provided for in Paragraph 15.2(a) on a net
basis, setting off against the amounts otherwise distributable to any Lender by
the Administrative Agent all amounts payable by such Lender to the
Administrative Agent hereunder at the time, but each Lender shall remain
responsible for remitting to the Administrative Agent and the Lenders the net
amount payable by such Lender to the Administrative Agent or another Lender (as
the case may be) on each Settlement Date.
(d) In the event that any Lender shall obtain payment in respect of any
Loan, L/C Obligations or any other Obligation or Guaranty Obligation owing to
such Lender under this Financing Agreement or any other Loan Document through
the exercise of a right of setoff, banker's lien or counterclaim, or pursuant to
a secured claim under Section 506 of Title 11 of the United States Code or other
security or interest arising from, or in lieu of, such secured claim, received
by such Lender under any applicable bankruptcy, insolvency or other similar law
or otherwise, or by any other means, in excess of its pro rata share of such
payment as provided for in this Financing Agreement, such Lender shall promptly,
by way of assignment or participation, purchase from the other Lenders an
interest (an "Interest") in such Loans, L/C Obligations and other Obligations
and Guaranty Obligations in such amounts, and make such other adjustments from
time to time, as shall be equitable to the end that all Lenders share such
payment in accordance with their respective ratable shares as provided for in
this Financing Agreement. The Lenders further agree among themselves that if
payment to a Lender obtained by such Lender through the exercise of a right of
setoff, banker's lien, counterclaim or other event as aforesaid shall be
rescinded or must otherwise be restored, each Lender which shall have shared the
benefit of such payment shall, by repurchase of the Interest theretofore sold,
return its share of that benefit (together with its share of any accrued
interest payable with respect thereto) to each Lender whose payment shall have
been rescinded or otherwise restored.
(e) The Obligors agrees that any Lender so purchasing such an Interest by
way of participation may, to the fullest extent permitted by law, exercise all
rights of payment, including setoff, banker's lien or counterclaim, with respect
to such Interest as fully as if such Lender were a holder of such Loan, L/C
Obligations or other obligation in the amount of such Interest. Except as
otherwise expressly provided in this Financing Agreement, if any Lender or the
Administrative Agent shall fail to remit to the Administrative Agent or any
other Lender an amount payable by such Lender or the Administrative Agent to the
Administrative Agent or such other Lender pursuant to this Financing Agreement
on the date when such amount is due, such payments shall be made together with
interest thereon for each date from the date such amount is due until the date
such amount is paid to the Administrative Agent or such other Lender at a rate
per annum equal to the Federal Funds Rate. If under any applicable bankruptcy,
insolvency or other similar law, any Lender receives a secured claim in lieu of
a setoff to which this Paragraph applies, such Lender shall, to the extent
practicable, exercise its rights in respect of such secured
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claim in a manner consistent with the rights of the Lenders under this Paragraph
to share in the benefits of any recovery on such secured claim.
15.3 Statement of Company Accounts. The Administrative Agent shall forward
to each Lender, at the end of each month, a copy of the account statement
rendered by the Administrative Agent hereunder to the Obligors.
15.4 Sharing of Payments. The Administrative Agent shall, after receipt of
any interest and fees earned under this Financing Agreement, promptly remit to
the Lenders: (a) their respective pro rata portions of all fees, provided,
however, that the Lenders (other than CIT in its role as the Administrative
Agent) shall (x) not share in the Administrative Management Fee or the fees
provided for in Paragraphs 10.8 and 10.5 of Section 10; and (y) receive their
respective shares of the Loan Closing Fee in accordance with their respective
agreements with the Administrative Agent; (b) interest computed at the rate and
as provided for in Section 10 of this Financing Agreement on all outstanding
amounts advanced by the Lenders on each Settlement Date, prior to adjustment,
that are subsequent to the last remittance by the Administrative Agent to the
Lenders of the Companies' interest; (c) their respective pro rata portions of
all principal repaid on any Term Loan; and (d) interest on the Term Loans
computed at the rate and as provided for in Section 10 of this Financing
Agreement.
15.5 Intentionally Deleted.
15.6 Pro Rata Responsibility. The Companies hereby agree that each Lender
is acting hereunder individually and is solely responsible for its portion of
the Line of Credit and that the Issuing Bank, the Agents and the other Lenders
shall not be responsible for, nor assume any obligations for, the failure of any
other Lender to make available its portion of the Line of Credit. Further,
should any Lender refuse to make available its portion of the Line of Credit,
then the other Lenders may, but without obligation to do so, increase,
unilaterally, their respective portions of the Line of Credit, in which event
the Companies are so obligated to the other Lenders. The Companies hereby
further agree that the Junior Lien Lender is solely responsible for the line of
credit contemplated in the Junior Lien Financing Documents and making the loan
provided for therein and that the Issuing Bank, the Agents and the Lenders shall
not be responsible for, nor assume any obligations for, the failure of the
Junior Lien Lender to make available the line of credit and loan contemplated in
the Junior Lien Financing Documents, or for failure of the Junior Lien Lender to
enter into the Junior Lien Financing Documents.
SECTION 16. Agents and Issuing Bank
16.1 Appointment of Agent. Each Lender hereby irrevocably designates and
appoints CIT as the Administrative Agent for the Lenders and CUSA as Syndication
Agent for the Lenders under this Financing Agreement and any ancillary loan
documents and irrevocably authorizes CIT as the Administrative Agent for such
Lender, and CUSA as Syndication Agent for such Lender, to take such action on
its behalf under the provisions of this Financing Agreement and all ancillary
documents and to exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent or the Syndication Agent, as the case may
be, by the terms of this Financing Agreement and all ancillary documents
together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary
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elsewhere in this Financing Agreement, neither the Administrative Agent nor the
Syndication Agent shall have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Financing Agreement and the ancillary
documents or otherwise exist against the Administrative Agent or the Syndication
Agent. Further, without limiting any of the foregoing, each Lender hereby
confirms its irrevocable authorization to the Administrative Agent to execute
the acknowledgments and consents required by General Motors Corporation in
connection with its interest under the Access and Security Agreements and
ratifies such action by the Administrative Agent.
16.2 Delegation. (a) The Administrative Agent may execute any of its duties
under this Financing Agreement and all ancillary documents by or through agents
or attorneys-in-fact and shall be entitled to the advice of counsel concerning
all matters pertaining to such duties or functions.
(b) The Syndication Agent (in its capacity as such, as distinct from CUSA,
acting as Lender) shall have no duties, obligations or liabilities hereunder. It
may exercise any rights given to it hereunder or under any ancillary documents
by or through agents or other attorneys-in-fact and shall be entitled to the
advice of counsel concerning all matters pertaining to this Financing Agreement
and the other Loan Documents.
16.3 Exculpatory Provisions. None of the Agents or the Issuing Bank nor any
of the officers, directors, employees, agents, or attorneys-in-fact of any of
them shall be (i) liable to any Lender for any action lawfully taken or omitted
to be taken by it or such Person under or in connection with any Loan Document
or all ancillary documents (except for its or such Person's own gross negligence
or willful misconduct as finally determined by a court of competent
jurisdiction), or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the Obligors or any
officer thereof contained in any Loan Document or ancillary document or
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent or such Agent under or in connection
with, any Letter of Credit, all ancillary documents or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of any Loan Document,
all ancillary documents or for any failure of the Obligors to perform their
obligations thereunder. The Agents and the Issuing Bank shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Financing Agreement and all ancillary documents or to inspect the properties,
books or records of the Obligors.
16.4 Reliance. Each of the Obligors, Agents and the Issuing Bank shall be
entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Obligors), independent accountants and other experts selected by such Agent or
the Issuing Bank. Each Agent and the Issuing Bank shall be fully justified in
failing or refusing to take any action under this Financing Agreement and all
ancillary documents unless it shall first receive such advice or concurrence of
the
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Lenders, or the Required Lenders, as the case may require, as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. Each Agent and the Issuing Bank
shall in all cases be fully protected in acting, or in refraining from acting,
under this Financing Agreement and all ancillary documents in accordance with a
request of the Lenders, or the Required Lenders, as the case may be, and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders. The foregoing is without prejudice to Paragraph 5.5 of
Section 5 relating to certain actions and reliance by the Issuing Bank.
16.5 Notice of Default. In no circumstance will the Syndication Agent or
the Issuing Bank be deemed to have knowledge or notice of any Default or Event
of Default or any duty or responsibility relating thereto. The Administrative
Agent shall not be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default hereunder unless the Administrative Agent has
received written notice from a Lender or Harvard describing such Default or
Event of Default. In the event that the Administrative Agent receives such a
notice, the Administrative Agent shall promptly give notice thereof to the
Lenders and the Issuing Bank. The Administrative Agent shall take such action
with respect to such Default or Event of Default as shall be reasonably directed
by the Lenders, or Required Lenders, as the case may require; provided that
unless and until the Administrative Agent shall have received such direction,
the Administrative Agent may in the interim (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable and in the best interests of the
Lenders.
16.6 Non-Reliance on Agents, Issuing Bank and Other Lenders. Each Lender
expressly acknowledges that neither of the Agents nor the Issuing Bank nor any
of the officers, directors, employees, agents or attorneys-in-fact of any of
them has made any representations or warranties to it and that no act by such
Agent or the Issuing Bank hereinafter taken, including any review of the affairs
of the Obligors shall be deemed to constitute any representation or warranty by
such Agent or the Issuing Bank to any Lender. Each Lender represents to each
Agent, the Issuing Bank and each other Lender that it has, independently and
without reliance upon such Agent, the Issuing Bank or any other Lender and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Obligors and made its
own decision to enter into this Financing Agreement. Each Lender also represents
that it will, independently and without reliance upon either Agent, the Issuing
Bank or any other Lender and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under the Financing
Agreement and to make such investigation as it deems necessary to inform itself
as to the business, operations, property, financial and other condition or
creditworthiness of the Obligors. The Administrative Agent, however, shall
provide the Lenders with copies of all financial statements, projections and
business plans which come into the possession of the Administrative Agent in its
capacity as such pursuant to this Financing Agreement.
16.7 Indemnification by Lenders. (a) Each of the Lenders agrees to
indemnify each Agent in its capacity as such (to the extent not reimbursed by
the Obligors and without limiting the obligation of the Obligors to do so), from
and against any and all liabilities, obligations,
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losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements (including, without limitation, all Out-of-Pocket Expenses) of any
kind whatsoever (including negligence on the part of such Agent) which may at
any time be imposed on, incurred by or asserted against such Agent in any way
relating to or arising out of this Financing Agreement or any ancillary
documents or any documents contemplated by or referred to herein or the
transactions contemplated hereby or any action taken or omitted by such Agent
under or in connection with any of the foregoing; provided that no Lender shall
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from such Agent's gross negligence or willful
misconduct, as finally determined by a court of competent jurisdiction. The
agreements in this paragraph shall survive the payment of the Obligations and
the Guaranty Obligations.
(b) The Administrative Agent will use its reasonable business judgment in
handling the collection of the Accounts, enforcement of its rights hereunder and
realization upon the Collateral but shall not be liable to the Lenders or any
other Person for any action taken or omitted to be taken in good faith or on the
written advice of counsel or otherwise as contemplated in Paragraph 16.4 of this
Section 16. Each of the Lenders expressly releases the Administrative Agent from
any and all liability and responsibility (express or implied), for any loss,
depreciation of or delay in collecting or failing to realize on any Collateral,
the Obligations, the Guaranty Obligations or any guaranties therefor (including
the Guaranty) and for any mistake, omission or error in judgment in passing upon
or accepting any Collateral or in making (or in failing to make) examinations or
audits or for granting indulgences or extensions to the Obligors, any account
debtor or any guarantor, other than resulting from the Administrative Agent's
gross negligence or willful misconduct, as finally determined by a court of
competent jurisdiction.
16.8 The Agents and the Issuing Bank in Their Individual Capacities. Each
of the Issuing Bank and each Agent may make loans to, and generally engage in
any kind of business with the Companies as though it were not an Agent or the
Issuing Bank hereunder. With respect to its Loans made or deemed made by it or
obligations hereunder as Lender, the Administrative Agent or the Syndication
Agent or Issuing Bank, as the case may be, shall have the same rights and
powers, duties and liabilities under this Financing Agreement and the other Loan
Documents as any other Lender and may exercise the same as though it was not the
Administrative Agent or the Syndication Agent or the Issuing Bank, as the case
may be, and the terms "Lender" and "Lenders" shall include each of the
Administrative Agent and the Syndication Agent and the Issuing Bank in its
individual capacity as a Lender.
16.9 Successor Agents. An Agent may resign as the Administrative Agent or
Syndication Agent (as the case may be) upon 30 days' notice to the Lenders and
such resignation shall be effective upon the appointment of a successor Agent
acting in the same capacity. If either the Administrative Agent or the
Syndication Agent shall resign as Administrative Agent or Syndication Agent, as
the case may be, then the Lenders shall appoint a successor Administrative Agent
or, if appropriate, Syndication Agent, as applicable, for the Lenders whereupon
such successor Administrative Agent or Syndication Agent shall succeed to the
rights, powers and duties of the Administrative Agent or Syndication Agent, as
applicable, and the term "Administrative Agent" or "Syndication Agent", as the
case may be, shall mean such successor agent effective upon its appointment, and
the former Administrative Agent's or Syndication
119
Agent's (as the case may be) rights, powers and duties as Administrative Agent
or Syndication Agent (as the case may be) shall be terminated, without any other
or further act or deed on the part of such former Agent or any of the parties to
this Financing Agreement. After any retiring Administrative Agent's or
Syndication Agent's (as the case may be) resignation hereunder as the
Administrative Agent or Syndication Agent, as applicable, the provisions of this
Section 16 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was the Administrative Agent or Syndication Agent, as
applicable.
16.10 Arrangements Requiring Consent of Lenders; Administrative Agent's
Discretion. Notwithstanding anything contained in this Financing Agreement to
the contrary, the Administrative Agent shall not, without the prior written
consent of all Lenders, knowingly make any Voluntary Overadvance at the request
of any of the Companies, provided that the foregoing limitations shall not
prohibit or restrict (x) Nonconsensual Overadvances or (y) Overadvances by the
Administrative Agent to preserve and protect Collateral if such Overadvance may
be made without the prior consent of the Junior Lien Lender under the
Intercreditor Agreement and immediately after such Voluntary Overadvance the
aggregate amount of the Revolving Loans and the outstanding Letters of Credit
would not exceed the Revolving Credit Line ("Administrative Agent Permitted
Overadvances"). Subject to the provisions of Section 14, Paragraph 14.2 and the
provisions of this Paragraph 16.10 of Section 16 of this Financing Agreement, in
all other respects the Administrative Agent is authorized by each of the Lenders
to take such actions or fail to take such actions under this Financing Agreement
and any other Loan Document if the Administrative Agent, in its reasonable
discretion, deems such to be advisable and in the best interest of the Lenders.
Notwithstanding any provision to the contrary contained in this Financing
Agreement (including the provisions of Section 14, Paragraphs 14.2 and 14.16 and
this Section 16, Paragraph 16.10 hereof) the Administrative Agent is authorized
to take such actions or fail to take such actions in connection with (a) the
exercise of (i) any and all rights and remedies under this Financing Agreement
(including but not limited to the exercise of rights and remedies under Section
12, Paragraph 12.2 of this Financing Agreement) and (ii) its discretion in (x)
determining compliance with the eligibility requirements of Eligible Accounts
Receivable and/or Eligible Inventory and establishing reserves against
Availability in connection therewith and/or (y) the making of Administrative
Agent Permitted Overadvances, and/or (b) the release of Collateral not to exceed
$250,000 in the aggregate during any Fiscal Year, and/or (c) curing any
ambiguity, defect or inconsistency in the terms of this Financing Agreement;
provided that the Administrative Agent, in its reasonable discretion, deems such
to be advisable and in the best interests of the Lenders. In the event the
Administrative Agent terminates this Financing Agreement pursuant to the written
instructions of the Required Lenders, the Administrative Agent will cease making
any loans or advances upon the effective date of termination except for any
loans or advances which the Administrative Agent deems, in its sole discretion,
to be reasonably required to maintain, protect or realize upon the Collateral.
16.11 Nonconsenting Lenders. In the event any Lender's consent is required
pursuant to the provisions of this Financing Agreement and such Lender does not
respond to any request by the Administrative Agent for such consent within ten
(10) days after such request is made to such Lender, such failure to respond
shall be deemed a consent. In addition, in the event that any Lender declines to
give its consent to any such request, it is hereby mutually agreed that the
Administrative Agent and/or any other Lender shall have the right (but not the
obligation) to
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purchase such Lender's share of the Loans and, if applicable, L/C Participations
for the full amount thereof together with accrued interest thereon to the date
of such purchase.
16.12 Refund of Payments. If the Administrative Agent is required at any
time to return to the Companies or to a trustee, receiver, liquidator, custodian
or other similar official any portion of the payments received by the
Administrative Agent in respect of any of the Obligations as result of a
bankruptcy or similar proceeding with respect to the Companies, any guarantor or
any other Person or entity or otherwise, then each Lender shall, on demand of
the Administrative Agent, forthwith return to the Administrative Agent its
ratable share of any such payments made to such Lender by the Administrative
Agent, together with its ratable share of interest and/or penalties, if any,
payable by the Lenders. This provision shall survive the termination of this
Financing Agreement.
16.13 Arrangers. The parties acknowledge and agree that the Arrangers, in
their respective capacities as such (but not in their capacities as Lenders)
shall not have any obligations or liabilities hereunder but shall be party
beneficiaries of the rights granted to them herein without need to execute this
Financing Agreement in their capacity as Arrangers.
16.14 Relationship. The Obligors acknowledge that the relationship between
and among the Agents and the Lenders and the Issuing Bank, on the one hand, and
the Junior Lien Lender, on the other hand, pursuant to the Intercreditor
Agreement shall not be construed as giving rise to or constituting a joint
venture, and the Agents, the Issuing Bank, the Lenders and the Obligors agree
that none of the Agents or Lenders or the Issuing Bank is a partner or joint
venturer with the Obligors or with any entity comprising the Obligors, in any
manner whatsoever.
SECTION 17. Guaranty
17.1 Guaranty
(a) Each Guarantor, as primary obligor and not merely as surety, hereby
irrevocably, absolutely and unconditionally guarantees to each Lender, to the
Issuing Bank and to each Agent (each, and the respective successors, transferees
and assigns of each, a "Beneficiary") the prompt and full payment in cash as and
when due (whether at stated maturity or by required or optional prepayment,
acceleration, demand or otherwise), of all existing and future Obligations
payable by Harvard, hereunder and under the other Loan Documents, including but
not limited to the Obligations payable by Harvard in respect of the principal of
and interest (including, without limitation, all interest that accrues after the
commencement of any case, proceeding or other action relating to bankruptcy,
insolvency or reorganization of any Obligor) on the Loans, Reimbursement
Obligations, and the fees, expenses and other amounts payable under this
Financing Agreement or any other Loan Document and specifically including all
amounts payable by Harvard arising from its joint and several obligations as a
co-obligor in respect of the Obligations, whether its obligations in respect of
such amounts are in the nature of a guaranty or otherwise (all such amounts
payable by Harvard in respect of the Obligations, the "Harvard Obligations").
The guaranty set forth in this Section 17 is the "Guaranty" referred to herein
and in the other Loan Documents. The statement of account issued by the
Administrative Agent to
121
Harvard as to the amount and status of the Harvard Obligations shall be
conclusive in the absence of manifest error.
(b) If any Harvard Obligation is not paid as and when due by Harvard, each
Guarantor shall pay such Harvard Obligation on demand, together with interest
thereon, which shall accrue from and including the date such Harvard Obligation
fell due, to but excluding the date such Harvard Obligation is paid in full, at
the highest rate of interest then applicable to any of the Harvard Obligations
at the time which is overdue and unpaid. This interest shall be calculated on
the basis of a year of 360 days for the actual number of days elapsed in the
relevant period.
(c) Each Guarantor shall, on demand, pay to each Beneficiary any and all
expenses (including reasonable fees and expenses of counsel) which may be paid
or incurred by such Beneficiary in collecting any or all of the Harvard
Obligations and/or enforcing the rights of the Beneficiaries against such
Guarantor under the Guaranty, and the Guaranty specifically includes all such
expenses, as well as all obligations of such Guarantor (in respect of Taxes and
otherwise, including, in the case of Trim Trends, relating to Letters of Credit
issued for its account) provided for in this Financing Agreement or any other
Loan Document (together with the Harvard Obligations, such obligations, in
relation to each Guarantor, its "Guaranty Obligations").
17.2 Guaranty Obligations Unconditional.
(a) Each Guarantor shall perform its obligations under the Guaranty in
respect of the Harvard Obligations so that they are paid strictly in accordance
with the terms of the Loan Documents.
(b) Without limiting the foregoing, this Guaranty is a guaranty of payment
by each Guarantor, and not merely a guaranty of collection, and shall not be
affected in any way by the absence of, or conditioned or contingent upon, any
action to obtain payment of any of the Harvard Obligations (by way of setoff or
otherwise) from Harvard or any other Person who now or hereafter may be
responsible for all or any part of the Harvard Obligations, including any other
Guarantor or any Company, or from any Collateral or other property, and each
Guarantor specifically waives any argument or defense that the Beneficiaries or
any of them make, seek or exhaust any recourse of any nature, including any
right to realize as to security held, against any other Person before making
demands under this Guaranty. In addition, this Guaranty shall be absolute and
unconditional irrespective of:
(i) any change in, or in the interpretation or application of, the law
in any jurisdiction which affects or purports to affect any of the
terms giving rise to any of the Harvard Obligations or the rights
of any Beneficiary with respect thereto;
(ii) any lack of validity or enforceability, any irregularity, default
or omission in any relevant documentation, including, without
limitation, any Loan Document, of any of the Harvard Obligations,
or any delay, failure or omission to enforce or agreement not to
enforce, or the stay or enjoining, by order of court, by operation
of law or otherwise, of the exercise of any right with respect to
the foregoing
122
(including, in each case, without limitation, as a result of the
insolvency, bankruptcy or reorganization of any Beneficiary,
Harvard, any other Obligor or any other Person);
(iii) any change in the time, manner or place of payment of, or in any
other term in respect of, all or any of the Loan Documents;
(iv) any exchange or release of, or non-perfection of any lien on or
in, any Collateral, any release or amendment or waiver of or
consent to any departure from any other guaranty or security, for
all or any of the Harvard Obligations or any release of any
Company or any other Guarantor from all or any part of its
obligations under this Guaranty, any other part of this Financing
Agreement or any of the terms of any other Loan Document;
(v) any claim, set-off, counterclaim, defense or other rights,
including, without limitation, any as to marshalling of any
security or other guaranties that any Obligor may have at any time
and from time to time against any Beneficiary or any other Person,
whether in connection with the transactions contemplated in the
Loan Documents or any other transaction;
(vi) the merger, consolidation or amalgamation of Harvard with or into
any other Person or the loss by Harvard or any other Guarantor of
its separate legal identity, or its ceasing to exist; or
(vii) any other circumstances which might otherwise constitute a defense
based on suretyship or otherwise available to, or a discharge of,
any other Obligor or any other Guarantor in respect of (A) the
Harvard Obligations or the Guaranty Obligations, (B) the release
of or waiver of any rights against any other Obligor and the
settlement, compromise or release of any other Obligor, or (C) the
failure by any Beneficiary to attempt, or delay by it in
attempting, to collect any Guaranty Obligations from any other
Guarantor or any Obligations from any Company or to realize upon
any Collateral; and the Beneficiaries may deal with Harvard, and
any of the Obligors as it sees fit without prejudice to or effect
on this Guaranty or the security for the Guaranty Obligations;
and each Guarantor hereby irrevocably waives all defenses that it might
otherwise have based on any of the matters identified above in this Paragraph
17.02 or based on any other circumstances other than, in each case, the full,
final and indefeasible payment of all Harvard Obligations and all Guaranty
Obligations of such Guarantor.
(c) This Guaranty is a continuing guaranty and shall remain in full force
and effect in relation to each Guarantor until the payment in full and
indefeasible satisfaction of (i) all the Harvard Obligations and (ii) all of
such Guarantor's Guaranty Obligations. This Guaranty shall continue to be
effective or shall be reinstated, as the case may require, if at any time any
payment, or any part thereof, of any of the Harvard Obligations is rescinded or
must otherwise be returned by any Beneficiary upon the insolvency, bankruptcy,
dissolution, liquidation or
123
reorganization of Harvard or any Guarantor or otherwise, all as though such
payment had not been made. This Guaranty shall not be affected by any change in
status, of any kind, of Harvard, any Company or any Guarantor or of any
Beneficiary.
(d) Without the necessity of any reservation of rights against any Obligor
and without notice to or further assent by any Obligor, any demand for payment
of any of the Harvard Obligations made by any Beneficiary to any Guarantor may
be rescinded by such Beneficiary and any of the Harvard Obligations continued
after such rescission.
(e) Each Guarantor confirms there has been no agreement, promise,
representation or stipulation by any Person which in any way affects this
Guaranty or its Guaranty Obligations.
17.3 Waivers.
To the extent permitted by applicable law (and without limiting the waivers
of defenses of the Guarantors in Paragraph 17.2 of this Section 17), each
Guarantor hereby irrevocably waives:
(a) promptness and diligence;
(b) notice of or proof of reliance by any Beneficiary upon this Guaranty
or acceptance of this Guaranty;
(c) notice of the incurrence of any Harvard Obligation or of any Guaranty
Obligation of any Guarantor, or of the renewal, extension or accrual
of any Harvard Obligation or Guaranty Obligation;
(d) notice of any actions taken by any Beneficiary, Harvard, any other
Company, any Guarantor or any other party to any Harvard Obligation
Document;
(e) all other notices, demands and protests, and all other formalities of
every kind in connection with the enforcement of the Harvard
Obligations or the Guaranty Obligations of any Guarantor, the omission
of or delay in which, but for the provisions of this Paragraph 17.3,
might constitute grounds for relieving Harvard of any of the Harvard
Obligations or any Guarantor of any of its Guaranty Obligations;
(f) any requirement that any Beneficiary protect, secure, perfect or
insure any lien on any Collateral or other property subject thereto or
exhaust any right or take any action against Harvard, any other
Company or any other Guarantor or any other Person or any Collateral;
and
(g) each other circumstance, other than the payment of the Harvard
Obligations in full, that might otherwise result in a discharge or
exoneration of, or constitute a defense to, such Guarantor's
obligations under the Guaranty.
124
17.4 Subrogation.
Each Guarantor hereby irrevocably waives and releases any rights which it
may acquire by way of subrogation under or in respect of this Guaranty, whether
acquired by any payment made hereunder, by any setoff or application of funds of
Harvard or any other Guarantor by any Beneficiary or otherwise. Each Guarantor
further hereby agrees that, if any of the Harvard Obligations is paid (by way of
setoff or otherwise) by such Guarantor, any claim or right that such Guarantor
may, as a result, have against any other Guarantor or any Company, for
contribution or otherwise, shall be subordinate to the rights and claims of the
Beneficiaries in respect of all Harvard Obligations and the Guaranty Obligations
of each Guarantor, without limitation, as to any increases in the Harvard
Obligations or the Guaranty Obligations arising hereunder or thereunder, and
shall not be payable until all the Harvard Obligations and the Guaranty
Obligations of each Guarantor have been fully, finally and indefeasibly paid in
full in cash and, in the event of any insolvency, bankruptcy, receivership,
liquidation, reorganization or other similar proceeding under the laws of any
jurisdiction relating to any Guarantor, its debts or its assets, whether
voluntary or involuntary, all such Harvard Obligations and Guaranty Obligations
shall be fully, finally and indefeasibly paid in cash before any payment or
distribution of any character, whether in cash, securities or other property,
shall be made by any Guarantor to any other Obligor therefor. If,
notwithstanding the foregoing, any Guarantor receives, in respect of any payment
made by it under the Guaranty, any amount from Harvard or any other Company or
another Guarantor, such Guarantor shall promptly pay such amount received by it
to the Administrative Agent for the Beneficiaries, for application to the
Harvard Obligations or the Guaranty Obligations in such order as the
Administrative Agent shall elect and, until such payment is paid to the
Administrative Agent, such amount shall be held by such Guarantor for the
benefit of the Beneficiaries.
17.5 Canadian Debenture.
If there is an inconsistency between the terms of this Financing Agreement
and the terms of the Security Document entered into by Trim Trends on the
Closing Date in the form of a debenture (the "Canadian Debenture"), the
provisions hereof shall prevail to the extent of the inconsistency, but the
foregoing shall not apply to limit or restrict in any way the rights and
remedies of the Agents, the Lenders or the Issuing Bank under the terms of the
Canadian Debenture after the security thereby constituted shall have become
enforceable. For greater certainty:
(a) notwithstanding that the rate of interest stipulated in the Canadian
Debenture may exceed the rate of interest stipulated in this Financing
Agreement in respect of the Harvard Obligations and the Guaranty
Obligations, the rate or rates of interest applicable to the
Obligations shall be as stipulated herein; and
(b) notwithstanding that the Canadian Debenture may contain a promise by
Trim Trends to pay to an Agent, any Lender or the Issuing Bank a
principal amount which may be in excess of the Harvard Obligations,
Trim Trends shall only be liable to pay to the Agents, the Lenders and
the Issuing Bank, the amount of the Harvard Obligations and Trim
Trends' Guaranty Obligations (which shall, however, include such
expenses and indemnities as are provided for in the Canadian Debenture
in connection with the protection, preservation and enforcement of the
interest created therein and rights and remedies thereunder of
125
the Agents, the Lenders and the Issuing Bank (and such stamp,
documentation, recordation, value added and other taxes and duties
related to the foregoing)).
126
IN WITNESS WHEREOF, the parties hereto have caused this Financing Agreement
to be effective, executed, accepted and delivered at New York, New York, by
their proper and duly authorized officers as of the date set forth above.
THE CIT GROUP/BUSINESS CREDIT, INC.
(as Administrative Agent, Arranger and Lender)
By:
-----------------------------------------
Vice President
CITICORP USA, INC.,
(as Syndication Agent and Lender)
By:
-----------------------------------------
CITIBANK, N.A.,
(as Issuing Bank)
By:
-----------------------------------------
Vice President
127
COMPANIES:
HARVARD INDUSTRIES, INC.
By: ______________
Title:
By: ______________
Title:
XXXXXXX-XXXXXX, INC.
By: ______________
Title:
By: ______________
Title:
HARVARD TRANSPORTATION CORPORATION
By:
------------------------------------------------
Title:
XXXXXXX-XXXXXX GREENEVILLE, INC.
By:
------------------------------------------------
Title:
POTTSTOWN PRECISION CASTING, INC.
By:
------------------------------------------------
Title:
HARVARD INDUSTRIES RISK MANAGEMENT, INC.
By:
--------------------------------------------------
Title:
128
XXXXXXX-XXXXXX TOLEDO, INC.
By:
--------------------------------------------------
Title:
XXXXXX AUTOMOTIVE, INC.
By:
------------------------------------------------
Title:
XXXXX-ALBION CORPORATION
By:
------------------------------------------------
Title:
KWCI LIQUIDATION CORPORATION
By:
------------------------------------------------
Title:
GUARANTORS:
TRIM TRENDS CANADA LIMITED
By:
-----------------------------------------
Title:
177192 CANADA INC.
By:
-----------------------------------------
Title:
129
EXHIBIT A
TERM LOAN PROMISSORY NOTE A
May __, 2001
$10,000,000.00
FOR VALUE RECEIVED, the undersigned, HARVARD INDUSTRIES, INC., a Delaware
corporation, XXXXXXX-XXXXXX, INC., a Delaware corporation, HARVARD
TRANSPORTATION CORPORATION, a Michigan corporation, XXXXXXX-XXXXXX GREENEVILLE,
INC., a Delaware corporation, POTTSTOWN PRECISION CASTING, INC., a Delaware
corporation, HARVARD INDUSTRIES RISK MANAGEMENT, INC., a Delaware corporation,
XXXXXXX-XXXXXX TOLEDO, INC., a Delaware corporation, XXXXXX AUTOMOTIVE, INC., a
Delaware corporation, XXXXX-ALBION CORPORATION, a Michigan corporation, KWCI
LIQUIDATING CORPORATION, a New Hampshire corporation (each, a "Company" and
collectively, the "Companies"), promises to pay to the order of THE CIT
GROUP/BUSINESS CREDIT, INC. (herein "CIT") as Administrative Agent for the
Lenders referred to in the Financing Agreement identified below (in that
capacity, the "Administrative Agent") at its office located at 0000 Xxxxxx xx
xxx Xxxxxxxx, Xxx Xxxx, XX 00000, in lawful money of the United States and in
immediately available funds, the principal amount of Ten Million Dollars and No
Cents ($10,000,000.00) ("Term Loan A") in 24 monthly principal installments
payable on the first Business Day of each month as set forth in the following
table:
Post-Closing Month Monthly Payment
------------------ ---------------
1-3 $ 0.00
4-6 $208,334.00
7-23 $520,833.00
24 $520,837.00
Each Company further agrees to pay interest at said office, in like money, on
the unpaid principal amount owing hereunder from time to time from the date
hereof on the date or dates, at the rates and otherwise as specified in Section
10 of the Financing Agreement, of even date herewith between the Companies, the
Guarantors, and the entities identified therein as the Lenders, the Arrangers,
the Administrative Agent, the Syndication Agent and the Issuing Bank (the
"Financing Agreement"). Capitalized terms used herein and defined in the
Financing Agreement shall have the same meanings as set forth therein unless
otherwise specifically defined herein.
If any payment on this Note becomes due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day, and with respect to payments of principal, interest thereon shall
be payable at the then applicable rate during such extension.
This Note is a Term Loan Promissory Note A referred to in the Financing
Agreement, evidences the obligations of the Companies in respect of Term Loan A
thereunder, and is subject to, and entitled to, all provisions and benefits
thereof and is subject to optional and mandatory prepayment, in whole or in
part, as provided therein.
130
Upon the occurrence of any Event of Default specified in the Financing Agreement
or upon termination of the Financing Agreement, all amounts then remaining
unpaid on this Note may become, or be declared to be, immediately due and
payable as provided in the Financing Agreement.
For purposes of disclosure pursuant to the Interest Act (Canada), the yearly
rate of interest to which any rate of interest payable under this Note which is
to be calculated on any basis other than a full calendar year is equivalent may
be determined by multiplying such rate by a fraction, the numerator of which is
the number of days in the calendar year in which the period for which the
interest at such rate is payable ends and the denominator of which is the number
of days comprising such other basis.
HARVARD INDUSTRIES, INC.,
XXXXXXX-XXXXXX, INC.,
HARVARD TRANSPORTATION CORPORATION,
XXXXXXX-XXXXXX GREENEVILLE, INC.,
POTTSTOWN PRECISION CASTING, INC.,
HARVARD INDUSTRIES RISK MANAGEMENT, INC.,
XXXXXXX-XXXXXX TOLEDO, INC.,
XXXXXX AUTOMOTIVE, INC.,
XXXXX-ALBION CORPORATION,
KWCI LIQUIDATING CORPORATION,
By:
---------------------------------------
Title:
131
EXHIBIT B
TERM LOAN PROMISSORY NOTE B
May __, 2001
$10,000,000.00
FOR VALUE RECEIVED, the undersigned, HARVARD INDUSTRIES, INC., a Delaware
corporation, XXXXXXX-XXXXXX, INC., a Delaware corporation, HARVARD
TRANSPORTATION CORPORATION, a Michigan corporation, XXXXXXX-XXXXXX GREENEVILLE,
INC., a Delaware corporation, POTTSTOWN PRECISION CASTING, INC., a Delaware
corporation, HARVARD INDUSTRIES RISK MANAGEMENT, INC., a Delaware corporation,
XXXXXXX-XXXXXX TOLEDO, INC., a Delaware corporation, XXXXXX AUTOMOTIVE, INC., a
Delaware corporation, XXXXX-ALBION CORPORATION, a Michigan corporation, KWCI
LIQUIDATING CORPORATION, a New Hampshire corporation (each, a "Company" and
collectively, the "Companies"), promises to pay to the order of THE CIT
GROUP/BUSINESS CREDIT, INC. (herein "CIT") as Administrative Agent for the
Lenders referred to in the Financing Agreement identified below (in that
capacity, the "Administrative Agent") at its office located at 0000 Xxxxxx xx
xxx Xxxxxxxx, Xxx Xxxx, XX 00000, in lawful money of the United States of
America and in immediately available funds, the principal amount of Ten Million
Dollars and No Cents ($10,000,000.00) ( "Term Loan B") in 12 monthly principal
installments payable on the first Business Day of each month as set forth in the
following table:
Post-Closing Month Monthly Payment
1-24 $ 0.00
25-35 $ 416,667.00
36 $5,416,663.00
Each Company further agrees to pay interest at said office, in like money, on
the unpaid principal amount owing hereunder from time to time from the date
hereof on the date or dates, at the rates and otherwise as specified in Section
10 of the Financing Agreement, of even date herewith between the Companies, the
Guarantors, and the entities identified therein as the Lenders, the Arrangers,
the Administrative Agent, the Syndication Agent and the Issuing Bank (the
"Financing Agreement"). Capitalized terms used herein and defined in the
Financing Agreement shall have the same meanings as set forth therein unless
otherwise specifically defined herein.
If any payment on this Note becomes due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day, and with respect to payments of principal, interest thereon shall
be payable at the then applicable rate during such extension.
This Note is a Term Loan Promissory Note B referred to in the Financing
Agreement, evidences the obligations of the Companies in respect of Term Loan B
thereunder, and is subject to, and entitled to, all provisions and benefits
thereof and is subject to optional and mandatory prepayment, in whole or in
part, as provided therein.
Upon the occurrence of any Event of Default specified in the Financing Agreement
or upon termination of the Financing Agreement, all amounts then remaining
unpaid on this Note may become, or be declared to be, immediately due and
payable as provided in the Financing Agreement.
For purposes of disclosure pursuant to the Interest Act (Canada), the yearly
rate of interest to which any rate of interest payable under this Note which is
to be calculated on any basis other than a full calendar year is equivalent may
be determined by multiplying such rate by a fraction, the numerator of which is
the number of days in the calendar year in which the period for which the
interest at such rate is payable ends and the denominator of which is the number
of days comprising such other basis.
HARVARD INDUSTRIES, INC.,
XXXXXXX-XXXXXX, INC.,
HARVARD TRANSPORTATION CORPORATION,
XXXXXXX-XXXXXX GREENEVILLE, INC.,
POTTSTOWN PRECISION CASTING, INC.,
HARVARD INDUSTRIES RISK MANAGEMENT, INC.,
XXXXXXX-XXXXXX TOLEDO, INC.,
XXXXXX AUTOMOTIVE, INC.,
XXXXX-ALBION CORPORATION,
KWCI LIQUIDATING CORPORATION,
By:
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Title:
2
EXHIBIT C
REVOLVING LOAN PROMISSORY NOTE
May __, 2001
$45,000,000.00
FOR VALUE RECEIVED, the undersigned, HARVARD INDUSTRIES, INC., a Delaware
corporation, XXXXXXX-XXXXXX, INC., a Delaware corporation, HARVARD
TRANSPORTATION CORPORATION, a Michigan corporation, XXXXXXX-XXXXXX GREENEVILLE,
INC., a Delaware corporation, POTTSTOWN PRECISION CASTING, INC., a Delaware
corporation, HARVARD INDUSTRIES RISK MANAGEMENT, INC., a Delaware corporation,
XXXXXXX-XXXXXX TOLEDO, INC., a Delaware corporation, XXXXXX AUTOMOTIVE, INC., a
Delaware corporation, XXXXX-ALBION CORPORATION, a Michigan corporation, KWCI
LIQUIDATING CORPORATION, a New Hampshire corporation (each, a "Company" and
collectively, the "Companies"), promises to pay to the order of THE CIT
GROUP/BUSINESS CREDIT, INC. (herein "CIT") as Administrative Agent for the
Lenders referred to in the Financing Agreement identified below (in that
capacity, the "Administrative Agent") at its office located at 0000 Xxxxxx xx
xxx Xxxxxxxx, Xxx Xxxx, XX 00000, in lawful money of the United States of
America and in immediately available funds, the principal amount of Forty-Five
Million Dollars and No Cents ($45,000,000.00) or such other principal amount as
may from time to time be advanced or deemed advanced under the Revolving Credit
Line, as defined in the Financing Agreement (each a "Revolving Loan") pursuant
to the Financing Agreement (as herein defined). Such Revolving Loan advances
shall be repaid on a daily basis as a result of the application of the proceeds
of collections of the Accounts and the making of additional Revolving Loans as
described in Section 3 of the Financing Agreement. Subject to the terms of the
Financing Agreement, the Revolving Loans may be borrowed, repaid and reborrowed
by the Companies. A final balloon payment in an amount equal to the outstanding
aggregate balance of principal and interest remaining unpaid, if any, under this
Note as shown on the books and records of the Administrative Agent shall be due
and payable on the termination of the Financing Agreement or such earlier time
as is provided in the Financing Agreement.
Each Company further agrees to pay interest at said office, in like money, on
the unpaid principal amount owing hereunder from time to time from the date
hereof on the dates, at the rates and otherwise as specified in Section 10 of
the Financing Agreement, of even date herewith between the Companies, the
Guarantors, and the entities identified therein as the Lenders, the Arrangers,
the Administrative Agent, the Syndication Agent and the Issuing Bank identified
therein (the "Financing Agreement"). Capitalized terms used herein and defined
in the Financing Agreement shall have the same meanings as set forth therein
unless otherwise specifically defined herein.
If any payment on this Note becomes due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day, and with respect to payments of principal, interest thereon shall
be payable at the then applicable rate during such extension.
This Note is a Revolving Loan Promissory Note referred to in Section 3.1(d) of
the Financing Agreement, evidences the obligations of the Companies in respect
of Revolving Loans thereunder, and is subject to, and entitled to, all
provisions and benefits thereof and is subject to mandatory prepayment, in whole
or in part, as provided therein.
The date and amount of the advances made hereunder may be recorded on the grid
page or pages which are attached hereto and hereby made part of this Note or the
separate ledgers maintained by the Administrative Agent. The aggregate unpaid
principal amount of all Revolving Loan advances may be set forth in the balance
column on said grid page or such ledgers maintained by the Administrative Agent.
All such advances, whether or not so recorded, shall be due as part of this
Note. The holder of this Note is authorized to record the date and amount of
each Revolving Loan and the date and amount of each payment or prepayment of
principal thereof on those grid page or pages.
Each Company confirms that any amount received by or paid to the Administrative
Agent in connection with the Financing Agreement and/or any balances standing to
its credit on any of its accounts or those of any other Company on the
Administrative Agent's books under the Financing Agreement may in accordance
with the terms of the Financing Agreement be applied in reduction of this Note,
but no balance or amounts shall be deemed to effect payment in whole or in part
of this Note or the Revolving Loans unless the Administrative Agent shall have
actually charged such account or accounts for the purposes of such reduction or
payment of this Note.
Upon the occurrence of any Event of Default specified in the Financing Agreement
or upon termination of the Financing Agreement, all amounts then remaining
unpaid on this Note may become, or be declared to be, immediately due and
payable as provided in the Financing Agreement.
For purposes of disclosure pursuant to the Interest Act (Canada), the yearly
rate of interest to which any rate of interest payable under this Note which is
to be calculated on any basis other than a full calendar year is equivalent may
be determined by multiplying such rate by a fraction, the numerator of which is
the number of days in the calendar year in which the period for which the
interest at such rate is payable ends and the denominator of which is the number
of days comprising such other basis.
HARVARD INDUSTRIES, INC.,
XXXXXXX-XXXXXX, INC.,
HARVARD TRANSPORTATION CORPORATION,
XXXXXXX-XXXXXX GREENEVILLE, INC.,
POTTSTOWN PRECISION CASTING, INC.,
HARVARD INDUSTRIES RISK MANAGEMENT, INC.,
XXXXXXX-XXXXXX TOLEDO, INC.,
XXXXXX AUTOMOTIVE, INC.,
XXXXX-ALBION CORPORATION,
KWCI LIQUIDATING CORPORATION,
By:
-------------------------------------------
Title:
2
GRID PAGES TO REVOLVING NOTE
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3
GRID PAGES TO REVOLVING NOTE
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Date Loan Payment Balance
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4
EXHIBIT D
FORM OF
ASSIGNMENT AND TRANSFER
ASSIGNMENT AND TRANSFER AGREEMENT dated as of ___________, ____ between
[insert name of assigning Lender] (the "Assignor") and [insert name of Assignee]
(the "Assignee").
PRELIMINARY STATEMENTS
1. This Assignment and Transfer Agreement (this "Agreement") relates to the
Financing Agreement dated as of May 31, 2001 (as amended from time to time, the
"Financing Agreement"), among THE CIT GROUP/BUSINESS CREDIT, INC., ("CIT"), as
administrative agent for the Lenders party thereto from time to time (in that
capacity, the "Administrative Agent"), CITICORP USA, INC., as syndication agent,
CIT and XXXXXXX XXXXX BARNEY INC. as arrangers, each Lender party thereto from
time to time, CITIBANK, N.A., as Issuing Bank, and HARVARD INDUSTRIES, INC., and
certain of its direct and indirect subsidiaries as joint and several co-obligors
and guarantors. All capitalized terms used and not otherwise defined herein
shall have the respective meanings set forth in the Financing Agreement.
The Assignor, at commencement of business on the date hereof
(i) is the lender in respect of Loans in an aggregate amount of
$__________, of which amount,
(A) $__________ represents its share of Term Loan A,
(B) $__________ represents its share of Term Loan B,
(C) $__________ represents Revolving Loans*, and
(ii) the Assignor's Revolving Credit Percentage is _______ percent (____%)
of the total Revolving Credit Commitment.
2. This Agreement shall become effective prior to the making of any Loan
that is made on the date hereof.
3. The Assignor proposes to sell and assign to the Assignee all of the
rights and interests of the Assignor under the Financing Agreement, and the
Assignee proposes to accept assignment of such rights and assume the
corresponding obligations from the Assignor on such terms, in each case in
respect and to the extent of the interests set forth in the table below (the
"Transferred Interest"):
--------
* As confirmed by the Administrative Agent.
Principal Amount of
Transferred Interest
(Principal or %) Percentage Assigned*
-------------------- --------------------
(i) Term Loan A $ %
(ii) Term Loan B $ %
(iii) Revolving Loans; $ %
(iv) Revolving Credit Percentage
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:
A. Assignment. (1) The Assignor hereby assigns and sells to the Assignee
the Transferred Interest, and the Assignee hereby accepts such assignment from
the Assignor and assumes all of the obligations of the Assignor under the
Financing Agreement corresponding to the Transferred Interest including, without
limitation, the related portion of the Assignor's Commitments. Upon such
execution, delivery, acceptance and recording hereof by the Assignor and
Assignee and the receipt by the Administrative agent from the Assignee of an
assignment fee of $1,000 (subject to any consent required in subparagraph (b) of
paragraph 14.13 of the Financing Agreement) and the payment by the Assignee of
the amount specified in Part B required to be paid on the date hereof, (2) the
Assignee shall, as of the commencement of business on the date hereof, succeed
to the rights and be obligated to perform the obligations of a Lender under the
Financing Agreement and the Loan Documents, in respect of the Transferred
Interest and (3) the Loans and Commitments of the Assignor shall, as of the
commencement of business on the date hereof, be reduced correspondingly and the
Assignor released from its obligations under the Financing Agreement and Loan
Documents to the extent such obligations have been assumed by the Assignee. The
assignment provided for herein shall be without recourse to the Assignor.
(2) After giving effect to this Assignment and Transfer Agreement the
parties hereto agree that the Loans and Commitment of each of the Assignor and
the Assignee will be as set forth on Schedule I following the signature lines
hereof.
B. Payments. As consideration for the assignment and sale contemplated in
Section 1 hereof, the Assignee shall pay to the Assignor on the date hereof in
immediately available funds an amount equal to ________________ ($________). It
is understood that interest and fees payable to the Assignor under the Financing
Agreement accrued to the date hereof are for the account of the Assignor and
such interest and fees accruing from and including the date
2
----------------
* After the Closing Date only.
hereof are for the account of the Assignee. Each of the Assignor and the
Assignee hereby agrees that if it receives any amount under the Financing
Agreement which is for the account of the other party hereto, it shall receive
the same for the account of such other party to the extent of such other party's
interest therein and shall promptly pay the same to such other party.
C. Financing Agreement. Each of the Assignor and the Assignee agrees that
this Assignment and Transfer Agreement is made in accordance with and subject to
the terms of Section 10.03 of the Financing Agreement, which is hereby
incorporated by reference herein.
D. Representations and Warranties of Assignee. The Assignee represents and
warrants that (i) the Assignee is legally authorized to enter into this
Agreement and is an Eligible Assignee under the terms of the Financing Agreement
and (ii) the Assignee has received copies of the Financing Agreement and the
Loan Documents, such financial statements and such other documents and
information as it has requested or deemed appropriate to make its own credit
analysis and decision to enter into this Agreement and the transactions
contemplated herein.
E. Non-Reliance on Assignor. The Assignee expressly acknowledges that
neither the Assignor nor the Agents nor the Issuing Bank nor any of the
officers, directors, employees, agents or attorneys-in-fact of any of them has
made any representations or warranties to it and that no act by such Assignor,
Agent or the Issuing Bank hereinafter taken, including any review of the affairs
of the Obligors shall be deemed to constitute any representation or warranty by
such Assignor, Agent or the Issuing Bank to the Assignee. The Assignee
represents to each of the Assignor, the Agents, the Issuing Bank and each other
Lender that it has, independently and without reliance upon the Assignor or any
Agent, the Issuing Bank or any Lender and based on such documents and
information as the Assignee alone has deemed appropriate, made its own appraisal
of and investigation into the business, operations, property, financial and
other condition and creditworthiness of the Obligors and made its own decision
to enter into this Agreement.
F. Governing Law. This Agreement and any disputes that may arise in
connection with this Agreement or any transaction hereunder shall be governed by
and construed in accordance with the internal laws of the State of New York
without respect to principles of conflicts of laws.
G. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
H. Other Documentation. Any notice or other communication required under or
relating to the Financing Agreement shall be addressed to the Assignee as
identified in Schedule II.
I. Notice. Upon receipt of this Agreement and payment of the fee referred
to in Paragraph A from the Assignee, the Administrative Agent is hereby
requested, if this Agreement has been completed, and subject to any consents
required pursuant to subparagraph (b) of Paragraph 14.13 of the Financing
Agreement, to (i) accept such Assignment and Transfer Agreement, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to Harvard (for further notice from Harvard to the other Companies).
3
[INTENTIONALLY LEFT BLANK]
4
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their duly authorized officers as of the date first above
written.
[NAME OF ASSIGNOR]
By:
----------------------------------
Name:
Title:
[NAME OF ASSIGNEE]
By:
----------------------------------
Name:
Title:
ACCEPTED AND ACKNOWLEDGED* TO:
THE CIT GROUP/BUSINESS CREDIT, INC.,
as Administrative Agent
By:
-------------------------------------
Name:
Title:
-----------------
* Subject to any consents required pursuant to subparagraph (b) of Paragraph
14.13 of the Financing Agreement.
*[CONSENTED TO:
HARVARD INDUSTRIES INC.,
By:
-------------------------------------
Name:
Title: ]
---------------------
*If required.
5
Schedule I
After giving effect to this Assignment and Transfer Agreement the amount of the
Commitment, each of the Loans and the Revolving Credit Percentage of each of the
Assignor and the Assignee will be as follows:
Assignor:
--------
Amount Percentage
------ ----------
Term Loan A $ %
Term Loan B $ %
Revolving Loans $
Revolving Credit Percentage %
Assignee:
--------
Amount Percentage
------ ----------
Term Loan A $ %
Term Loan B $ %
Revolving Loans $
Revolving Credit Percentage %
6
Schedule II
LEGAL NAME OF ASSIGNEE TO APPEAR IN DOCUMENTATION
------------------------------------------------------------------------------
GENERAL INFORMATION
LENDING OFFICE:
Institution Name: ______________________________________________________________
Street Address: ________________________________________________________________
City, State, Country, Zip Code: ________________________________________________
CONTACTS/NOTIFICATION METHODS
CREDIT CONTACTS
Contact: _______________________________________________________________________
Street Address: ________________________________________________________________
City, State, Country, Zip Code: ________________________________________________
Phone Number: __________________________________________________________________
Fax Number: ____________________________________________________________________
ADMINISTRATIVE CONTACTS -- BORROWINGS, PAYDOWNS, INTEREST, FEES, ETC.
Contact: _______________________________________________________________________
Street Address: ________________________________________________________________
City, State, Country, Zip Code: ________________________________________________
Phone Number: __________________________________________________________________
Fax Number: ____________________________________________________________________
7
SCHEDULE 1 -- COLLATERAL IFNORMATION
[Attached Behind This Page]
SCHEDULE 2 -- LITIGATION
[Attached Behind This Page]
SCHEDULE 3 -- CAPITAL STOCK
[Attached Behind This Page]
SCHEDULE 4 -- CERTAIN INDEBTEDNESS AND PERMITTED ENCUMBRANCES
[Attached Behind This Page]
SCHEDULE 5 -- REAL ESTATE
[Attached Behind This Page]
SCHEDULE 6 -- LIABILITIES AND ASSET DISPOSITIONS
[Attached Behind This Page]
SCHEDULE 7 -- DEFAULTS
[Attached Behind This Page]
SCHEDULE 8 -- TAXES
[Attached Behind This Page]
SCHEDULE 9 -- ERISA MATTERS
[Attached Behind This Page]
SCHEDULE 10 -- ENVIRONMENTAL MATTERS
[Attached Behind This Page]
SCHEDULE 11 -- INTELLECTUAL PROPERTY MATTERS
[Attached Behind This Page]
