THIRD AMENDED AND RESTATED
CREDIT AGREEMENT
among
GENMAR HOLDINGS, INC.,
THE FINANCIAL INSTITUTIONS NAMED HEREIN
THE BANK OF NEW YORK
As Agent
and
BNY CAPITAL MARKETS, INC.
As Sole Lead Arranger and Book Runner
Dated as of July 30, 1999
$95,000,000
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THIRD AMENDED AND RESTATED CREDIT AGREEMENT (hereinafter the
"Agreement"), dated as of July 30, 1999, among GENMAR HOLDINGS, INC., a Delaware
corporation (the "Borrower"), the Lenders (as hereinafter defined), THE BANK OF
NEW YORK, acting in its capacity as agent for the Lenders and as Issuing Bank
(as hereinafter defined) and BNY CAPITAL MARKETS, INC., as Sole Lead Arranger
(the "Arranger").
W I T N E S S E T H
WHEREAS, the Borrower, the Lenders and the Agent are parties to
the Second Amended and Restated Credit Agreement dated as of July 1, 1997, as
amended by Amendment No. 1, dated as of October 27, 1997, by Amendment No. 2,
dated as of December 18, 1998, by Amendment No. 3, dated as of March 18, 1999
and by Amendment Xx. 0, xxxxx xx xx Xxx 0, 0000 (xx so amended and as otherwise
in effect immediately prior to the Effective Date, the "Existing Credit
Agreement"), pursuant to which the Lenders agreed to make and have made certain
credit facilities available to the Borrower;
WHEREAS, the Borrower has requested that the Existing Credit
Agreement be amended and restated in its entirety to provide, among other
things, that (a) the Lenders extend credit in order to enable the Borrower (i)
to borrow on a revolving basis from time to time an aggregate principal amount
not to exceed $29,000,000, and (ii) to borrow on a term loan basis an aggregate
principal amount not to exceed $45,000,000 and (b) the Issuing Bank issue
standby letters of credit in an aggregate face amount not to exceed $21,000,000
outstanding at any time; and
WHEREAS, (a) the proceeds of the revolving loans and the term
loans shall be used solely for general corporate purposes, to fund ongoing
working capital needs of the Borrower and its Subsidiaries, to redeem and repay
all of Borrower's outstanding 13.5% Subordinated Notes (including accrued
interest and call premiums) and to repay the Subordinated Demand Note and (b)
the letters of credit will be used to support contingent liabilities related to
the Borrower's insurance needs and for general corporate purposes.
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the Borrower, the
Lenders, and the Agent hereby agree that, upon the satisfaction of the
conditions precedent set forth in SECTION 4.1 hereof, the Existing Credit
Agreement is hereby amended and restated in its entirety to read as follows:
SECTION 1. DEFINITIONS.
SECTION 1.1. DEFINITIONS. As used herein, the following terms shall have
the meanings herein specified unless the context otherwise requires. Defined
terms in this
Agreement shall include in the singular number the plural and in the plural
number the singular.
"ACCOUNTS" shall mean all accounts, accounts receivable, other
receivables, contract rights, chattel paper, instruments, documents and notes,
whether now owned or hereafter acquired by the Borrower or any of its
Subsidiaries.
"ACCOUNT DEBTOR" shall mean any Person who is or who may become
obligated to the Borrower or any of its Subsidiaries under, with respect to, or
on account of, an Account.
"AFFILIATE" shall mean, with respect to any Person, any other
Person directly or indirectly controlling (including but not limited to all
directors and officers of such Person), controlled by, or under direct or
indirect common control with such Person. A Person shall be deemed to control a
corporation if such Person possesses, directly or indirectly, the power to (i)
vote 5% or more of the securities having ordinary voting power for the election
of directors of such corporation or (ii) direct or cause the direction of the
management an policies of such corporation, whether through the ownership of
voting securities, by contract or otherwise.
"AGENT" shall mean The Bank of New York acting in its capacity as
agent for the Lenders and any successor agent appointed in accordance with
SECTION 9.9.
"AGENT'S OFFICE" shall mean the office of the Agent located at Xxx
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other office as the Agent may
hereafter designate in writing as such to the other parties hereto.
"AGREEMENT" shall mean this Credit Agreement as the same may from
time to time hereafter be modified, restated, supplemented or amended.
"ALTERNATE BASE RATE" shall mean, at any particular date, the
interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%)
equal to the greater of (a) the Prime Rate in effect on such day and (b) the
Federal Funds Rate in effect on such day plus 1/2%. For purposes hereof, the
term "PRIME RATE" shall mean the prime commercial lending rate of The Bank of
New York as publicly announced from time to time, such rate to be adjusted
automatically, without notice, on the effective date of any change in such rate.
The term "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 that is a Business Day, the average of the
quotations for the day of such transaction received by the Agent from three
Federal funds brokers of recognized standing selected by it. If the Agent shall
have determined that it is unable to ascertain the Federal Funds Rate for any
reason, including the inability or failure of the Agent to obtain sufficient
quotations in accordance with the terms hereof,
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the Alternative Base Rate shall be determined with regard to clause (a) of
the first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist. Any change in
the Alternate Base Rate due to a change in the Prime Rate or the Federal
Funds Rate shall be effective on the effective date of such change in the
Prime Rate or Federal Funds Rate, respectively.
"ARRANGER" shall have the meaning provided in the preamble to this
Agreement.
"ASSIGNMENT OF RENTS AND LEASES" shall mean the assignment of
rents and leases which have been executed and delivered by the Loan Parties
under and in connection with the Original Agreement (as any such assignment of
rents and leases have been, are being or hereafter may be amended, modified or
supplemented from time to time).
"BANKRUPTCY CODE" shall mean Title 11 of the United States Code
entitled "Bankruptcy", as amended from time to time, and any successor statute
or statutes.
"BASE RATE LOANS" shall mean Revolving Loans and Term Loans made
and/or being maintained at a rate of interest based upon the Alternate Base
Rate.
"BORROWER" shall have the meaning provided in the first paragraph
of this Agreement.
"BORROWING" shall mean the incurrence of one Type of Revolving
Loan or Term Loans from all the Lenders on a given date (or resulting from
conversions or continuations on a given date), having in the case of Eurodollar
Loans the same Interest Period.
"BORROWING BASE" shall mean during any month the sum of (i) 95% of
Eligible Financed Receivables, (ii) 80% of Eligible Other Receivables, (iii) 30%
of net property and equipment of the Borrower and its Subsidiaries and (iv) the
lesser of (x) 50% of the Eligible Inventory and (y) $55,000,000. The applicable
Borrowing Base for any given day shall be the Borrowing Base set forth in the
Borrowing Base Certificate most recently delivered pursuant to SECTION 6.9.
"BORROWING BASE CERTIFICATE" shall mean a certificate in the form
attached hereto as EXHIBIT 1.1, signed by a senior financial officer of the
Borrower and stating the amount of the Borrower's Borrowing Base.
"BRITISH POUNDS" shall mean the lawful currency of the United
Kingdom.
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"BUSINESS DAY" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day excluding Saturday, Sunday and any day
which shall be in New York City, Milwaukee or Minneapolis a legal holiday or a
day on which banking institutions are authorized or required by law or other
government actions to close and (ii) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
Eurodollar Loans, any day which is a Business Day described in clause (i) and
which is also a day for trading by and between banks for U.S. dollar deposits in
the relevant interbank Eurodollar market.
"CAPITAL EXPENDITURES" shall mean, for any period, the sum of
expenditures (whether paid in cash or accrued as a liability, including the
portion of Capitalized Leases originally incurred during such period that is
capitalized on the consolidated balance sheet of the Borrower and its
Subsidiaries) by the Borrower and its Subsidiaries during such period that, in
conformity with GAAP, are included in "capital expenditures", "additions to
property, plant, tooling or equipment" or comparable items in the consolidated
financial statements of the Borrower and its Subsidiaries.
"CAPITAL STOCK" shall mean as to any Person, all shares,
interests, partnership interests, limited liability company interests,
membership interests, rights in or other equivalents (however designated) of
such Person's equity (however designated).
"CAPITALIZED LEASE" shall mean (i) any lease of property, real or
personal, the obligations under which are capitalized on the consolidated
balance sheet of the Borrower and its Subsidiaries, and (ii) any other such
lease to the extent that the then present value of the minimum rental commitment
thereunder should, in accordance with GAAP, be capitalized on a balance sheet of
the lessee.
"CAPITALIZED LEASE OBLIGATIONS" shall mean all obligations of the
Borrower and its Subsidiaries under or in respect of Capitalized Leases.
"XXXXXX" shall mean Xxxxxx Boat Corporation, a Delaware
corporation.
"CASH EQUIVALENTS" shall mean (i) securities issued or directly
and fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than 90 days from the date of acquisition, (ii) time deposits and certificates
of deposit of any Lender or any domestic commercial bank of recognized standing
having capital and surplus in excess of $500,000,000 with maturities of not more
than 90 days from the date of acquisition, (iii) fully secured repurchase
obligations with a term of not more than seven (7) days for underlying
securities of the types described in clause (i) entered into with any bank
meeting the qualifications specified in clause (ii) above, and (iv) commercial
paper issued by the parent corporation of any Lender or any domestic commercial
bank of recognized standing having capital and surplus in excess of $500,000,000
and commercial paper or master notes of issuers, rated at least A-2 or the
equivalent thereof by Standard & Poor's
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Corporation or at least P-2 or the equivalent thereof by Xxxxx'x Investor
Services, Inc. and in each case maturing within 90 days after the date of
acquisition.
"CODE" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and any successor statute.
"COLLATERAL" shall mean all property and interests in property now
owned or hereafter acquired in or upon which a Lien has been or is purported or
intended to have been granted to the Agent or any Lender under any of the
Security Documents.
"COLLATERAL AGENT" has the meaning assigned to that term in the
Security Agreement.
"COMMITMENT" shall mean, for each Lender at any given time, the
sum of such Lender's Revolving Loan Commitment, Term Loan Commitment and its
Standby Letter of Credit Commitment.
"COMMITMENT FEE" shall have the meaning provided in SECTION
2.16(b).
"CONSOLIDATED CASH FLOW" shall mean, on any determination date,
for the period of the four (4) consecutive fiscal quarters ending on or
immediately prior to such date, the sum of (i) Consolidated Operating Income for
such period, PLUS (ii) depreciation and amortization deducted in determining
Consolidated Operating Income for such period, all determined on a consolidated
basis for the Borrower and its Subsidiaries in accordance with GAAP.
"CONSOLIDATED FUNDED DEBT" shall mean Indebtedness of the types
referred to in subclauses (i), (ii) and (iii) of the definition of
"Indebtedness," as determined on a consolidated basis for the Borrower and its
Subsidiaries in accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE" shall mean on any determination
date, for the period of the four (4) consecutive fiscal quarters ending on or
immediately prior to such date, the total cash interest expense (including,
without limitation, interest expense attributable to Capitalized Leases in
accordance with GAAP) of the Borrower and its Subsidiaries accrued for such
period determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED NET WORTH" shall mean, at any time, the sum of the
amount by which the total consolidated assets (as determined in accordance with
GAAP) of the Borrower and its Subsidiaries exceeds the Consolidated Total
Liabilities of the Borrower and its Subsidiaries (as determined in accordance
with GAAP) at such time, excluding any write-downs for goodwill, provided that,
in order for any write-downs of goodwill to be excluded for purposes of this
definition, the Borrower shall have informed
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the Agent and the Lenders of its intention to take any such write-downs at
least 45 days prior to any such write-downs.
"CONSOLIDATED OPERATING INCOME" shall mean, for on any
determination date, for the period of the four (4) consecutive fiscal quarters
ending on or immediately prior to such date, the operating income of the
Borrower and its Subsidiaries on a consolidated basis for such period (taken as
a single accounting period) determined in accordance with GAAP.
"CONSOLIDATED SENIOR DEBT" shall mean, at any time, Funded Debt
MINUS the principal amount of the outstanding Subordinated Debt at such time.
"CONSOLIDATED TOTAL LIABILITIES" shall mean, at any time, all
indebtedness of the Borrower and its Subsidiaries on a consolidated basis, as
determined in accordance with GAAP.
"CONTINGENT OBLIGATION" as to any Person shall mean any obligation
of such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (iv) otherwise to assure or hold harmless the owner
of such primary obligation against loss in respect thereof; PROVIDED, HOWEVER,
that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"CREDIT EXPOSURE" shall have the meaning provided in SECTION
10.4(c).
"CREDIT SUISSE L/C" means the Standby Letter of Credit issued by
the Issuing Bank for the benefit of Credit Suisse.
"DEALER ACCOUNTS" shall mean Accounts resulting from the sale of
Inventory by the Borrower or one of its Restricted Subsidiaries to a dealer of
pleasure boats, secured by a Lien on Inventory so sold and with a Due Date
greater than 60 days
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and no later than 12 months from the invoice date of any such Account;
provided that such Dealer Accounts shall not include Accounts, generated from
any dealer of pleasure boats whose primary place of business is located
outside the United States of America, with terms greater than 60 days which
are secured by an irrevocable letter of credit, credit insurance or
acceptance terms.
"DEFAULT" shall mean any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"DEFAULT RATE" shall have the meaning provided in SECTION 2.6(c).
"DESIGNATED SUBSIDIARY" shall mean those Subsidiaries of the
Borrower listed as such on Schedule 1.1(d).
"DIVIDENDS" shall have the meaning provided in SECTION 7.7.
"DOMESTIC LENDING OFFICE" shall mean, as to any Lender, the office
of such Lender designated as such on Annex I, or such other office designated by
such Lender from time to time by written notice to the Agent and the Borrower.
"DUE DATE" shall mean the date on which payment is due with
respect to an Account, as indicated on the invoice or statement of Account
rendered to the Account Debtor.
"EFFECTIVE DATE" shall mean the date on which all conditions to
effectiveness set forth in SECTIONS 4.1 AND 4.2 have been satisfied or have
been effectively waived by the Lenders.
"ELIGIBLE FINANCED RECEIVABLES" shall mean Eligible Receivables
that have been authorized for purchase by Bombardier Credit Corp., Transamerica
Credit Corp., Newcourt Credit Group, Inc., TFC and any other finance companies
which have been approved in writing by the Agent.
"ELIGIBLE INVENTORY" shall mean the first-in, first-out cost of
such of the Inventory of the Borrower and its Subsidiaries in which the
Collateral Agent has a perfected first priority security interest as the Agent,
in its sole discretion exercised in a professional manner, shall deem eligible,
less such reserves as the Agent, in its sole discretion, shall from time to time
deem appropriate. The Agent does not intend to treat an item of Inventory as
eligible if (i) any warranty or representation contained in this Agreement or
any of the Loan Documents applicable either to Eligible Inventory in general or
to any such specific Inventory has been breached with respect to such Inventory
or (ii) such Inventory is slow moving or obsolete.
"ELIGIBLE OTHER RECEIVABLES" shall mean all Eligible Receivables
except Eligible Financed Receivables.
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"ELIGIBLE RECEIVABLES" shall mean the gross outstanding balance,
less all finance charges, late fees and other fees which are unearned, of
Accounts arising out of the lease or sale of goods or services by the Borrower
or its Subsidiaries in the ordinary course of their business in which the
Collateral Agent has a perfected first priority security interest which the
Agent, in its sole discretion exercised in a professional manner, shall deem
eligible, and less such reserves as the Agent, in its sole discretion, shall
deem appropriate. Without in any way limiting the discretion of the Agent to
deem an Account eligible or ineligible, the Agent does not currently intend to
treat an Account as eligible if:
(a) any warranty or representation contained in this Agreement,
or any of the Loan Documents applicable either to Accounts in general or to any
such specific Account has been breached with respect to such Account;
(b) twenty-five percent (25%) or more of the outstanding
Accounts from the Account Debtor which constituted Eligible Receivables at the
time they arose have become, or been determined by the Agent to be, ineligible;
(c) the Account Debtor has filed a petition for relief under
the Bankruptcy Code (or similar action under any successor law), made a general
assignment for the benefit of creditors, had filed against it any petition or
other application for relief under the Bankruptcy Code (or similar action under
any successor law), failed, suspended business operations, become insolvent,
called a meeting of its creditors for the purpose of obtaining any financial
concession or accommodation, or had or suffered a receiver or a trustee to be
appointed for all or a significant portion of its assets or affairs;
(d) it has remained unpaid for a period exceeding 60 days after
the Due Date;
(e) the sale represented by such Account is to an Account
Debtor outside the United States, unless the sale is on letter of credit, credit
insurance or acceptance terms, and the issuer, the insurer and such terms are
acceptable to the Agent;
(f) the Account Debtor is an Affiliate or employee of the
Borrower or any of its Subsidiaries;
(g) the Account Debtor is a supplier or creditor of the
Borrower or any of its Subsidiaries (excluding an Account Debtor who is (x) an
engine supplier or (y) a creditor solely by reason of its participation in a
joint cooperative advertising arrangement with the Borrower or any of its
Subsidiaries, in each such event such Account will be deemed ineligible to the
extent of the amount owed by the Borrower or any of its Subsidiaries to such
Account Debtor);
(h) the Account is denominated in other than United States or
Canadian dollars or is payable outside the United States or Canada;
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(i) the sale represented by such Account is on a xxxx-and-hold,
undelivered sale, guaranteed sale, sale or return, consignment, or sale on
approval basis;
(j) the sale represented by such Account is on terms longer
than 30 days unless such Account (x) is a Dealer Account, provided the aggregate
outstanding amount of Dealer Accounts to be included in Eligible Receivables
shall not exceed $2.5 million or (y) is to an Account Debtor outside the United
States on letter of credit, credit insurance or acceptance terms, and the
issuer, the insurer or such terms are acceptable to the Agent;
(k) the Agent has reason to believe that such Account may not
be paid;
(l) it is subject to any material claim or dispute by the
Account Debtor;
(m) it is subject to any set-off by the Account Debtor, in
which event such Account will be deemed ineligible to the extent of such
set-off;
(n) it is subject to any Lien whatsoever, other than Liens
in favor of the Agent and Liens permitted pursuant to SECTION 7.3(b), (c) and
(d);
(o) the Account is not evidenced by an invoice or other writing
in form acceptable to the Agent in its sole discretion;
(p) the Borrower or any of its Subsidiaries, in order to be
entitled to collect the Account, is required to perform any additional service
for, or perform or incur any additional obligation to, the Account Debtor (it
being understood that warranty obligations arising in the ordinary course of
business are not such obligations), except for Accounts of the Hatteras Yacht
division of the Borrower subject to "percentage of completion" accounting
treatment under GAAP; or
(q) the Account is an account of the United States government,
the government of any state of the United States or any political subdivision
thereof, or any agency or instrumentality of any of the foregoing, and the Agent
is not able to perfect a first priority security interest in such Account. The
Agent shall have discretion to classify Accounts into any of the foregoing
categories or such other categories as the Agent, in its sole discretion, deems
appropriate in determining the eligibility of Accounts.
"ENVIRONMENTAL AFFILIATE" shall mean, with respect to any Person,
any other Person whose liability for any Environmental Claim such Person has or
may have retained, assumed or otherwise become liable for (contingently or
otherwise), either contractually or by operation of law.
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"ENVIRONMENTAL APPROVALS" shall mean any permit, license,
approval, ruling, variance, exemption or other authorization required under
applicable Environmental Laws.
"ENVIRONMENTAL CLAIM" shall mean, with respect to the Borrower,
any notice, claim, demand or similar written communication made upon the
Borrower or any of its Subsidiaries by any other Person (including any
Environmental Affiliate) alleging potential liability in connection with
investigatory costs, cleanup costs, governmental response costs, natural
resources damages, property damages, personal injuries, fines or penalties
arising out of, based on or resulting from (i) the presence, or release into the
environment, of any Material of Environmental Concern at any location, whether
or not owned by such Person or (ii) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law.
"ENVIRONMENTAL LAWS" shall mean all Federal, state, local and
foreign laws and regulations relating to pollution or protection of human health
or the environment (including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata), including without limitation,
laws and regulations relating to emissions, discharges, releases or threatened
releases of Materials of Environmental Concern, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern.
"ENVIRONMENTAL LIEN" shall mean any Lien imposed pursuant to any
Environmental Law with respect to any of the Properties.
"EQUITY ISSUANCE" shall mean the public or private issuance of any
Capital Stock of the Borrower, provided, however, "Equity Issuance" shall not
include capital contributions to the Borrower, not to exceed $5,000,000 in the
aggregate, made from time to time by the Existing Shareholders.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time. Section references to ERISA are to ERISA, as
in effect at the date of this Agreement and any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA CONTROLLED GROUP" means a group consisting of any ERISA
Person and all members of a controlled group of corporations and all trades or
businesses (whether or not incorporated) under common control with such Person
that, together with such Person, are treated as a single employer under
regulations of the PBGC.
"ERISA PERSON" shall have the meaning set forth in Section 3(9) of
ERISA for the term "person."
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"ERISA PLAN" means any Plan that (i) is not a Multiemployer Plan
and (ii) has Unfunded Benefit Liabilities in excess of $250,000.
"EUROCURRENCY RESERVE REQUIREMENTS" shall mean, with respect to
each day during an Interest Period for Eurodollar Loans, that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Federal Reserve Board or other governmental authority or agency having
jurisdiction with respect thereto for determining the maximum reserves
(including, without limitation, basic, supplemental, marginal and emergency
reserves) for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D) maintained by a member bank of the Federal Reserve
System.
"EURODOLLAR BASE RATE" shall mean, with respect to each day during
an Interest Period for Eurodollar Loans, the rate per annum (rounded upwards to
the nearest whole multiple of one-sixteenth of one percent) equal to the offered
quotation to first class banks in the interbank eurodollar market by The Bank of
New York two Business Days prior to the beginning of such Interest Period at or
about 10:00 A.M., New York City time, for delivery on the first day of such
Interest Period for the number of days comprised therein and in an amount
comparable to the amount of the Eurodollar Loan of The Bank of New York to be
outstanding during such Interest Period.
"EURODOLLAR LENDING OFFICE" shall mean, as to any Lender, the
office of such Lender designated as such on Annex I, or such other office
designated by such Lender from time to time by written notice to the Agent and
the Borrower.
"EURODOLLAR LOANS" shall mean Revolving Loans and Term Loans made
and/or being maintained at a rate of interest based upon the Eurodollar Rate.
"EURODOLLAR RATE" shall mean with respect to each day during an
Interest Period for Eurodollar Loans, a rate per annum determined for such day
in accordance with the following formula (rounded upwards to the nearest whole
multiple of 1/100th of one percent): Eurodollar Base Rate/1.00 - Eurocurrency
Reserve Requirements
"EXISTING CREDIT AGREEMENT" shall have the meaning provided in the
preamble to this Agreement.
"EVENT OF DEFAULT" shall have the meaning provided in SECTION 8.
"EXISTING NOTES" shall mean, collectively, the Subordinated
Shareholder Note and the Subordinated Demand Note.
"EXISTING SHAREHOLDERS" shall mean Xx. Xxxxx X. Xxxxxx (or, upon
his death, his estate) and his Affiliates, Xx. Xxxx X. Xxxxxx (or, upon his
death, his estate) and his Affiliates and RDV (AJL) Holdings, Inc.
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"FAIR MARKET VALUE" shall mean, with respect to any asset or
property, the price which could be negotiated in an arm's-length free market
transaction, for cash, between a willing seller and a willing buyer, neither of
whom is under undue pressure or compulsion to complete the transaction. Fair
Market Value shall be determined by a majority of the members of the board of
directors of the Borrower and a majority of the disinterested members of such
board of directors, if any, acting in good faith and shall be evidenced by a
duly and properly adopted resolution of the board of directors; except that any
determination of Fair Market Value made with respect to any real property or
personal property which is customarily appraised shall be made by an independent
qualified appraiser acceptable to the Agent and the Required Lenders.
"FEDERAL RESERVE BOARD" shall mean the Board of Governors of the
Federal Reserve System as constituted from time to time.
"FEES" shall have the meaning provided in SECTION 2.16(e).
"FINAL MATURITY DATE" shall mean June 30, 2002.
"FLOOR PLAN FINANCING" shall mean that certain floor planning
arrangement among the Borrower and/or any of its Subsidiaries and one or more
financial institutions pursuant to which any such financial institution provides
credit to retail dealers and wholesale distributors which purchase goods from
the Borrower and any of its Subsidiaries.
"GAAP" shall mean United States generally accepted accounting
principles as in effect on the date hereof and consistent with those utilized in
the preparation of the financial statements referred to in SECTION 5.5.
"GENMAR LOGIC" shall mean Genmar Logic, L.L.C., a Delaware limited
liability company and a wholly-owned Subsidiary of GII.
"GENMAR MANUFACTURING" shall mean Genmar Manufacturing of Kansas,
L.L.C., a Delaware limited liability company and a wholly-owned Subsidiary of
the Borrower.
"GPV, INC." shall mean GPV, Inc., a Delaware corporation and a
wholly-owned Subsidiary of GII.
"GII" shall mean Genmar Industries, Inc., a Delaware corporation
and a wholly-owned indirect subsidiary of the Borrower.
"GUARANTORS" shall mean the Restricted Subsidiaries and each other
Person who executes and delivers to the Agent an agreement to become a Guarantor
in the form of Annex B to the Guaranty.
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"GUARANTY" shall mean each guaranty which has been executed and
delivered by each Guarantor under and in connection with the Original Agreement
and the Existing Credit Agreement, together with each other guaranty required to
be executed in accordance with the terms and provisions hereof (as any such
guaranty have been, are being or hereafter may be amended, modified or
supplemented from time to time).
"HATTERAS BUSINESS" shall mean the tangible and intangible assets
of, and all obligations and liabilities arising out of or associated with, the
Hatteras Division.
"HATTERAS DISPOSITION CORP." shall mean a wholly owned subsidiary
of the Borrower or GII into which the Hatteras Business shall be transferred in
anticipation of and in order to effect the Hatteras Disposition.
"HATTERAS DIVISION" shall mean the division of GII that
manufacturers boats under the tradename "Hatteras."
"HATTERAS DISPOSITION" shall mean a sale, transfer or other
disposition of the Hatteras Business by Hatteras Disposition Corp. or the sale
of the Capital Stock of Hatteras Disposition Corp.
"HATTERAS INTERNAL TRANSFER" shall mean the transfer of the
Hatteras Business to Hatteras Disposition Corp.
"HEDGING AGREEMENTS" shall mean interest rate swap, cap or collar
agreements, interest rate future or option contracts and other similar
agreements.
"HORIZON ACQUISITION" shall mean the acquisition by Genmar
Manufacturing of the Business (as defined in the Horizon Acquisition Agreement)
pursuant to the terms of the Horizon Acquisition Agreement.
"HORIZON ACQUISITION AGREEMENT" shall mean that certain Agreement
of Purchase and Sale of Assets, dated December 3, 1998, by and among Horizon
Marine, LC, a Kansas limited liability company, Genmar Manufacturing and
Xxxxxxxx X. Xxxxxx, as sole member of Horizon Marine, LC, as in effect on
December 3, 1998.
"HORIZON IRB ASSETS" shall mean the real property, plant,
equipment and other fixed assets acquired in the Horizon Acquisition.
"IMPROVEMENTS" shall mean have the meaning set forth therefor in
the Mortgages.
"INACTIVE SUBSIDIARIES" means Hatteras Yachts-High Point, Inc.,
Hatteras Yachts-New Bern, Inc. and Yachtscape LLC.
13
"INDEBTEDNESS" of any Person shall mean, without duplication, (i)
all indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services, other than (x) trade payables on terms of 90 days
or less incurred in the ordinary course of business of such Person and (y) notes
issued in connection with insurance premiums payable in the ordinary course of
business of such Person in an aggregate principal amount not to exceed $750,000
outstanding at any time, (ii) all indebtedness of such Person evidenced by a
note (other than such notes referred to in subclause (i)(y) of this definition),
bond, debenture or similar instrument, (iii) the principal component of all
Capitalized Lease obligations of such Person, (iv) the face amount of all
letters of credit issued for the account of such Person and, without
duplication, all unreimbursed amounts drawn thereunder, (v) all indebtedness of
any other Person secured by any Lien on any property owned by such Person,
whether or not such indebtedness has been assumed, (vi) all Contingent
Obligations of such Person, and (vii) all Hedging Agreements and currency swaps
and similar agreements of such Person in accordance with GAAP.
"INTERCREDITOR AGREEMENT" shall mean that certain Intercreditor
Agreement, dated as of October 20, 1997, by and among the Borrower, the Agent
and the Subordinated Agent.
"INTEREST PERIOD" shall have the meaning provided in SECTION 2.7.
"INTERNAL FINANCIALS" shall have the meaning provided in
SECTION 5.5.
"INVENTORY" shall mean any and all now owned or hereafter acquired
inventory, goods, merchandise, and other tangible personal property intended for
sale or lease, in the custody or possession, actual or constructive, of the
Borrower or any of its Subsidiaries, or in transit to the Borrower or any of its
Subsidiaries, including such inventory as is on consignment to third parties,
leased to customers of the Borrower or any of its Subsidiaries, or otherwise
temporarily out of the custody or possession of the Borrower or any of its
Subsidiaries.
"ISSUING BANK" shall mean The Bank of New York acting in its
capacity as issuing bank of the Standby Letters of Credit and any successor
issuing bank appointed in accordance with SECTION 3.7.
"LC DISBURSEMENT" shall mean any payment or disbursement made by
the Issuing Bank under or pursuant to a Standby Letter of Credit.
"LC EXPOSURE" shall mean, at any time of determination, the sum of
(a) the aggregate undrawn amount of all Standby Letters of Credit outstanding at
such time and (b) the aggregate amount that has been drawn under any Standby
Letters of Credit but for which the Issuing Bank or the Lenders, as the case may
be, have not been reimbursed by the Borrower at such time.
14
"LENDERS" shall mean the financial institutions listed on Annex I
hereto and the financial institutions which from time to time become a party
hereto in accordance with SECTION 10.4(c).
"LETTER OF CREDIT APPLICATION" shall mean a standby letter of
credit application in the Issuing Bank's customary form, as such form may be
modified from time to time by the Issuing Bank.
"LEVERAGE RATIO" shall mean, for any period of determination, the
ratio of Consolidated Funded Debt to Consolidated Cash Flow.
"LIEN" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), or preference,
priority or other security agreement of any kind or nature whatsoever,
including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same effect as any of
the foregoing and the filing of any financing statement or similar instrument
under the Uniform Commercial Code or comparable law of any jurisdiction,
domestic or foreign.
"LOAN DOCUMENTS" shall mean this Agreement, the Revolving Notes,
the Term Notes, the Guaranties, the Security Documents, the Subordination
Agreements, Intercreditor Agreement and Hedging Agreements entered into by the
Borrower or its Subsidiaries, as applicable, with one or more Lenders.
"LOAN PARTY" shall mean and include the Borrower and the
Restricted Subsidiaries.
"LOANS" shall mean the Revolving Loans and the Term Loans.
"LOGIC" shall mean Logic Marine Corporation, a Delaware
corporation.
"LOGIC ACQUISITION" shall mean the acquisition by Genmar Logic of
the Business (as defined in the Logic Acquisition Agreement) pursuant to the
terms of the Logic Acquisition Agreement.
"LOGIC ACQUISITION AGREEMENT" shall mean that certain Agreement of
Purchase and Sale of Assets, dated May 6, 1999, by and among Logic, Genmar
Logic, PT Sumberdaya, Allied Plastics International, LTD. and Cheshire Holdings,
LTD.
"LOGIC ASSETS" shall mean all tangible and intangible assets
acquired by Genmar Logic pursuant to the Logic Acquisition Agreement.
"MARGIN PERCENTAGE" shall mean at any time that percentage (a) to
be added to the ABR Rate pursuant to SECTION 2.6(a), for purposes of determining
the
15
per annum rate of interest applicable from time to time to Base Rate Loans,
(b) to be added to the Eurodollar Rate pursuant to SECTION 2.6(b), for purposes
of determining the per annum rate of interest applicable from time to time to
Eurodollar Loans, and (c) to be used in computing the Commitment Fee pursuant to
SECTION 2.16(b), which in each case on any date shall be the applicable
percentage set forth under the appropriate column below opposite the category in
which the Borrower's Leverage Ratio, determined as of the end of the most recent
fiscal quarter for which financial statements are required to have been
delivered under SECTION 6.1(b) (whether or not such statements or statements for
any subsequent quarter shall in fact have been delivered, subject to the proviso
set forth below), shall fall (or which shall otherwise be applicable as provided
below):
WHEN THE
LEVERAGE AND LESS EURODOLLAR ABR
RATIO IS THAN OR REVOLVING REVOLVING COMMITMENT
LEVEL GREATER THAN EQUAL TO MARGIN MARGIN FEE
----- ------------ --------- ---------- --------- ----------
I 3.00:1.00 2.75% 1.50% 0.500%
II 2.50:1.00 3.00:1.00 2.50% 1.25% 0.375%
III 2.00:1.00 2.50:1.00 2.25% 1.00% 0.375%
IV 1.50:1.00 2.00:1.00 2.00% 0.75% 0.300%
V 1.50:1.00 1.75% 0.50% 0.300%
provided that, notwithstanding the foregoing (i) with respect to borrowings from
the Effective Date until the date on which the compliance certificate and
financial statements for the fiscal quarter ended March 31, 2000 are delivered
to the Agent the Margin Percentage shall be determined by reference to Level II
or to Level I if any compliance certificate and financial statements delivered
for any fiscal quarter between the Effective Date and the fiscal quarter ended
March 31, 2000 indicate that the Leverage Ratio is greater than or equal to
3:00:1:00 and (ii) at any time during which the Borrower has failed to deliver
the financial statements and the certificates described in SECTION 6.1(b) with
respect to a fiscal quarter in accordance with the provisions thereof, or at any
time during which an Event of Default shall have occurred and shall be
continuing, the Margin Percentage shall be determined by reference to Level I
and (iv) any decrease in the Margin Percentage resulting from a change in the
Leverage Ratio shall be effective only after being requested pursuant to the
certificate of the Borrower delivered in accordance with SECTION 6.1(f)(iii).
Except as set forth in subsection (ii) of this Definition, changes in the Margin
Percentage shall become effective on the first day on which the compliance
certificate and financial statements covering the quarter-end date as of which
such ratios are computed have been delivered to the Agent.
16
"MARGIN STOCK" shall have the meaning provided such term in
Regulation U of the Federal Reserve Board.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect
upon (i) the business, operations, properties, assets, prospects or condition
(financial or otherwise) of the Borrower and its Subsidiaries, taken as a whole,
or (ii) the ability of any Loan Party to perform, or of the Agent or any of the
Lenders to enforce, any of the Obligations.
"MATERIALS OF ENVIRONMENTAL CONCERN" shall mean and include
chemicals, pollutants, contaminants, wastes, toxic substances, petroleum and
petroleum products.
"MORTGAGE AMENDMENTS" shall have the meaning provided in SECTION
4.1(d) hereof.
"MORTGAGED PROPERTIES" shall mean each Property set forth on
Schedule 1.1(a) hereto.
"MORTGAGES" shall mean the mortgages and/or deeds of trust
encumbering the Mortgaged Property which have been executed and delivered to the
Agent by the Loan Parties party thereto under and in connection with the
Original Agreement, the Existing Credit Agreement and this Agreement (as any
such mortgages have been, are being or hereafter may be amended, modified or
supplemented from time to time).
"MULTIEMPLOYER PLAN" shall mean a Plan which is a "multiemployer
plan" as defined in SECTION 4001(a)(3) of ERISA.
"NEW SUBORDINATED CREDIT AGREEMENT" shall mean the Subordinated
Term Loan Credit Agreement, dated as of October 20, 1997, by and among the
Borrower, the financial institutions party thereto and The Bank of New York, as
agent, providing Term Loans in an aggregate principal amount not to exceed
$60,000,000 outstanding at any time, as the same may be amended, modified,
restated or supplemented only in accordance with the terms and provisions
hereof.
"NOTICE OF BORROWING" shall have the meaning provided in
SECTION 2.3(a).
"NOTICE OF CONVERSION OR CONTINUATION" shall have the meaning
provided in SECTION 2.9(b).
"OBLIGATIONS" shall mean all obligations, liabilities and
indebtedness of every nature of the Borrower and the Guarantors from time to
time owing to the
17
Agent, the Issuing Bank or any Lender under or in connection with this
Agreement or any other Loan Document.
"ORIGINAL AGREEMENT" shall mean the Credit Agreement, dated as of
July 19, 1994, among the Borrower, the Lenders party thereto, and the Agent, as
in effect prior to its amendment and restatement pursuant to the Existing Credit
Agreement.
"OUTSTANDING STANDBY LETTERS OF CREDIT" shall mean at any time the
Standby Letters of Credit outstanding at such time.
"PARTICIPANT" shall have the meaning provided in SECTION 10.4(b).
"PAYMENT DATE" shall mean the last day of each September,
December, March and June of each year.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established under ERISA, or any successor thereto.
"PERMITTED LIENS" shall have the meaning provided in SECTION
7.3(a).
"PERMITTED ORGANIZATIONAL CHANGES" shall mean changes to the
ownership of Subsidiaries and the transfer of assets among the Loan Parties (i)
described in Schedule 1.1(b) and (ii) required to effect the Hatteras Internal
Transfer and the Hatteras Disposition.
"PERSON" shall mean and include any individual, partnership, joint
venture, firm, corporation, association, trust or other enterprise or any
government or political subdivision or agency, department or instrumentality
thereof.
"PLAN" shall mean any employee benefit plan as to which the
Borrower or a member of its ERISA Controlled Group has any liability under Title
IV of ERISA (whether or not assessed), the funding requirements of which:
(i) are, as of the date of determination, the
responsibility of the Borrower or a member of its ERISA Controlled Group,
or
(ii) was the responsibility of the Borrower or a member of
its ERISA Controlled Group at any time within the five years preceding
the date of determination and was terminated or the responsibility for
which was transferred to a Person other than the Borrower or a member of
its ERISA Controlled Group.
"PLEDGE AGREEMENT" shall mean the pledge agreement which has been
executed and delivered by the Loan Parties party thereto under and in connection
18
with the Original Agreement (as such pledge agreement has been, is being or
hereafter may be amended, modified or supplemented from time to time).
"POS ACQUISITION" shall mean POS Acquisition Corporation, a
Delaware corporation and a wholly owned Subsidiary of the Borrower.
"PROPERTIES" shall mean the real properties, and the
improvements thereon, listed on Schedule 5.21(a)(i).
"PRO RATA SHARE" as to any Lender shall mean a fraction
(expressed as a percentage), the numerator of which shall be the aggregate
amount of such Lender's Commitments and the denominator of which shall be the
Total Commitment.
"PT SUMBERDAYA" shall mean PT Sumberdaya Pacific Corporation,
an Indonesian corporation.
"PURCHASING LENDERS" shall have the meaning provided in
SECTION 10.4(c).
"PYRAMID ACQUISITION AGREEMENT" shall mean the Agreement and Plan
of Reorganization, dated as of June 18, 1999, among the Borrower, POS
Acquisition, Pyramid Operating, and the shareholders of Pyramid Operating.
"PYRAMID ACQUISITION" shall mean the transactions contemplated by
the Pyramid Acquisition Agreement pursuant to which POS Acquisition will
acquire, by merger, all of the Capital Stock of Pyramid Operating.
"PYRAMID CAPITAL EXPENDITURES" shall mean Capital Expenditures (a)
related to the construction of a new boat manufacturing facility in Little
Falls, Minnesota and all equipment and fixtures related thereto; and (b) to
purchase a computerized router to be used in connection with the manufacture of
boat molds (the "Router") at a facility owned by the Pyramid Composites
Manufacturing Limited Partnership in Greenville, Pennsylvania (the "Greenville
Facility") provided (i) the Agent shall have received (1) confirmation that the
Borrower has title to the Router, free and clear of all Liens, except a security
interest in favor of the Agent for the benefit of the Lenders, (2) UCC-1
financing statements and such other documents as the Agent may request to
perfect the security interest of the Agent (for the benefit of the Lenders) in
the Router, (3) confirmation that the Router has been leased to Pyramid Marine
on terms satisfactory to the Agent (for the benefit of the Lenders), (4)
acknowledgment from Pyramid Marine that the Router is subject to the first
priority security interest in favor of the Agent, (5) confirmation that the
Router is not and will not become a fixture under local law, and (6)
acknowledgments and waivers from any landlord of and any party holding a Lien on
or security interest in the Greenville Facility confirming that the Router is
not subject to any claims or liens of such landlord or such secured parties and
(ii) the Capital Expenditures for the Router shall not exceed $1,500,000.
19
"PYRAMID MARINE" shall mean Pyramid Marine, LLC, a Delaware
limited liability company.
"PYRAMID MANAGEMENT AGREEMENT" shall mean the Management
Agreement, dated June 18, 1999 between the Borrower and Pyramid Operating.
"PYRAMID OPERATING" shall mean Pyramid Operating Systems Inc.,
a Delaware corporation organized by Pyramid Composites Manufacturing Limited
Partnership that owns 50% of Pyramid Marine.
"RECOURSE OBLIGATIONS" shall mean the recourse and repurchase
obligations of the Borrower and any of its Subsidiaries pursuant to a
Repurchase Agreement.
"REDEMPTION DATE" shall mean the date fixed in the Redemption
Notice for the repayment and redemption of the outstanding Subordinated Notes.
"REDEMPTION NOTICE" shall have the meaning provided in SECTION
4.3(f).
"REGULATION D" shall mean Regulation D of the Federal Reserve
Board as from time to time in effect and any successor to all or any portion
thereof.
"REPORTABLE EVENT" has the meaning set forth in SECTION 4043(b)
of ERISA (other than a Reportable Event as to which the provision of 30 days'
notice to the PBGC is waived under applicable regulations), or is the
occurrence of any of the events described in SECTION 4063(a) of ERISA.
"REPURCHASE AGREEMENT" shall mean that certain Manufacturer's
Repurchase Agreement to which the Borrower and any of its Subsidiaries is a
party with one or more financial institutions in the form heretofore provided
to the Agent, together with any similar agreement with any other vendors
providing transactions substantially similar to the agreement attached as
Annex II to this Agreement.
"REQUIRED LENDERS" shall mean Lenders holding more than 74% of
the principal amount of Loans outstanding or, if no Loans are outstanding,
more than 74% of the Total Commitments.
"RESPONSIBLE OFFICER" of any Person shall mean the chief
executive officer, the chief operating officer, the chief financial officer
or the general counsel of such Person.
20
"RESTRICTED SUBSIDIARIES" shall mean those Subsidiaries of the
Borrower set forth on Schedule 1.1(c) and each Person required to become a
Guarantor pursuant to SECTION 6.13.
"REVOLVING LOAN COMMITMENT" shall mean at any time, for any
Lender, the amount set forth opposite such Lender's name on Annex I hereto
under the heading "Revolving Loan Commitment," as such amount may be reduced
from time to time pursuant to SECTIONS 2.10, 2.11, OR 2.14 OR ADJUSTED
PURSUANT TO SECTION 10.4(c).
"REVOLVING LOANS" shall have the meaning provided in SECTION
2.1(a).
"REVOLVING NOTES" shall have the meaning provided in SECTION
2.5(a).
"SECURITY AGREEMENT" shall mean the security agreement which
has been executed and delivered by the Loan Parties party thereto under and
in connection with the Original Agreement, together with each other security
agreement required to be executed in accordance with the terms and provisions
of the Original Agreement, the Existing Credit Agreement and this Agreement
(as any such security agreement have been, are being or hereafter may be
amended, modified or supplemented from time to time).
"SECURITY DOCUMENTS" shall mean and include the Security
Agreement, the Pledge Agreement, the Trademark Security Agreement, the
Mortgages and the Assignments of Rents and Leases.
"SOLVENT" as to any Person shall mean that (i) the sum of the
assets of such Person, both at a fair valuation and at present fair salable
value, will exceed its liabilities, including contingent liabilities, (ii)
such Person will have sufficient capital with which to conduct its business
as presently conducted and as proposed to be conducted and (iii) such Person
has not incurred debts, and does not intend to incur debts, beyond its
ability to pay such debts as they mature. For purposes of this definition,
"debt" means any liability on a claim, and "claim" means (x) a right to
payment, whether or not such right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured, or unsecured, or (y) a right to an equitable
remedy for breach of performance if such breach gives rise to a payment,
whether or not such right to an equitable remedy is reduced to judgment,
fixed, contingent, matured, unmatured, disputed, undisputed, secured, or
unsecured. With respect to any such contingent liabilities, such liabilities
shall be computed at the amount which, in light of all the facts and
circumstances existing at the time, represents the amount which can
reasonably be expected to become an actual or matured liability.
21
"STANDBY LC PROVIDERS" shall mean the issuer or issuers of
standby letters of credit in favor of the Subordinated Lenders under with the
New Subordinated Credit Agreement.
"STANDBY LETTER OF CREDIT" shall have the meaning provided in
SECTION 3.1.
"STANDBY LETTER OF CREDIT COMMITMENT" shall mean at any time,
for any Lender, the amount set forth opposite such Lender's name on Annex I
hereto under the heading "Standby Letter of Credit Commitment," as such
amount may be reduced from time to time pursuant to SECTIONS 2.10, 2.11 OR
10.4(c).
"SUBORDINATED AGENT" shall mean The Bank of New York in its
capacity as agent for the Subordinated Lenders under the New Subordinated
Credit Agreement, or any such successor thereto in such capacity under the
terms of the New Subordinated Credit Agreement.
"SUBORDINATED CREDIT FACILITY DOCUMENTS" shall mean the New
Subordinated Credit Agreement, the Subordinated Collateral Documents and all
other documents and agreements in connection with the Subordinated
Refinancing Transaction.
"SUBORDINATED CREDIT LETTERS OF CREDIT" shall mean those
Standby Letters of Credit issued by the Standby LC Providers for the benefit
of the Subordinated Lenders.
"SUBORDINATED COLLATERAL" shall mean the collateral securing
the obligations under the New Subordinated Credit Agreement pursuant to the
terms of the Subordinated Collateral Documents.
"SUBORDINATED COLLATERAL DOCUMENTS" shall mean the agreements
and documents pursuant to which a lien and security interest in favor or for
the benefit of the Subordinated Lenders is granted.
"SUBORDINATED DEBT" shall mean the Indebtedness (a) in the
principal amount not to exceed $60,000,000 in the aggregate incurred pursuant
to the New Subordinated Credit Agreement, (b) under the Subordinated Notes
issued pursuant to the Subordinated Debt Financing Documents, (c) under the
Subordinated Demand Note and (d) under the Subordinated Shareholder Note.
"SUBORDINATED DEBT FINANCING DOCUMENTS" shall mean the
Indenture, dated as of July 1, 1994, among the Borrower, the parties listed
as "Guarantors" therein and First Trust National Association, as Trustee, and
the Purchase Agreement, dated July 12, 1994, among Wertheim Xxxxxxxx & Co.
Incorporated, the
22
Borrower and the "Guarantors" as defined therein together with the New
Subordinated Credit Agreement and the Subordinated Collateral Documents.
"SUBORDINATED DEMAND NOTE" shall mean the $25,000,000 demand
note dated March 31, 1994 payable to Xxxxx X. Xxxxxx or any replacement
thereof made in accordance with the terms of the applicable Subordination
Agreement.
"SUBORDINATED LENDERS" shall mean the financial institutions
party to the New Subordinated Credit Agreement.
"SUBORDINATED LOANS" shall mean the loans made to the Borrower
pursuant to the New Subordinated Credit Agreement in an aggregate principal
amount not to exceed $60,000,000 outstanding at any time.
"SUBORDINATED NOTES" shall mean the 13.5% Series A Senior
Subordinated Notes of the Borrower due 2001.
"SUBORDINATED SHAREHOLDER NOTE" shall mean the $4,104,422.12
shareholder note dated November 24, 1993 payable to Xxxxx X. Xxxxxx.
"SUBORDINATION AGREEMENTS" shall mean those certain
Subordination Agreements, each dated as of the Effective Date, between Xxxxx
X. Xxxxxx and The Bank of New York, as agent for the Lenders, as amended,
modified or supplemented in accordance with the terms hereof.
"SUBSIDIARY" of any Person shall mean and include (i) any
corporation 50% or more of whose stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the directors of
such corporation (irrespective of whether or not at the time stock of any
class or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time owned by such
Person directly or indirectly through Subsidiaries and (ii) any partnership,
association, joint venture or other entity in which such Person, directly or
indirectly through Subsidiaries, is either a general partner or has a 50% or
more equity interest at the time.
"TAXES" shall have the meaning provided in SECTION 2.20.
"TERMINATION EVENT" shall mean (i) a Reportable Event with
respect to an ERISA Plan, or (ii) the initiation of any action by the
Borrower, any member of the Borrower's ERISA Controlled Group or any ERISA
Plan fiduciary to terminate an ERISA Plan or the treatment of an amendment to
an ERISA Plan as a termination under ERISA, or (iii) the institution of
proceedings by the PBGC under SECTION 4042 of ERISA to terminate an ERISA
Plan or to appoint a trustee to administer any ERISA Plan.
23
"TERM LOANS" shall have the meaning provided in SECTION 2.2.
"TERM LOAN ADVANCE" shall have the meaning provided in SECTION
2.2.
"TERM LOAN BORROWING DATE" shall mean a date on which the
Borrower has borrowed a Term Loan Advance as provided by Section 2.3.
"TERM LOAN BORROWING PERIOD" shall have the meaning provided in
SECTION 2.2.
"TERM LOAN COMMITMENT" shall mean at any time, for any Lender,
the amount set forth opposite such Lender's name on Annex I hereto under the
heading "Term Loan Commitment", as such amount may be reduced from time to
time pursuant to SECTIONS 2.10, 2.14 OR 10.4(c).
"TERM LOAN MATURITY DATE" shall mean June 30, 2002.
"TERM NOTE" shall have the meaning provided in SECTION 2.2.
"TITLE COMPANY" shall have the meaning provided in SECTION 4.1.
"TFC" shall mean Textron Financial Corporation.
"TOTAL COMMITMENT" shall mean, at any time, the sum of the
Commitments of all of the Lenders at such time.
"TOTAL REVOLVING LOAN COMMITMENT" shall have the meaning
provided in SECTION 2.1(a).
"TOTAL TERM LOAN COMMITMENT" shall have the meaning provided in
SECTION 2.2(a).
"TOTAL STANDBY LETTER OF CREDIT COMMITMENT" shall mean the sum
of the Standby Letter of Credit Commitments of all Lenders, which on the
Effective Date shall be $21,000,000.00.
"TRADEMARK SECURITY AGREEMENT" shall mean that certain
trademark security agreement which was entered into in connection with the
Original Agreement, between the Loan Parties party thereto and the Collateral
Agent, together with each other trademark security agreement required to be
executed in accordance with the terms and provisions of the Original
Agreement, the Existing Credit Agreement and this Agreement (as any such
trademark security agreement have been, are being or hereafter may be
amended, modified or supplemented from time to time).
24
"TRANSACTION DOCUMENTS" shall mean the Loan Documents and the
Subordinated Debt Financing Documents.
"TRANSACTIONS" shall mean each of the transactions contemplated
by the Loan Documents including the payment of the Subordinated Demand Note
and the repurchase and redemption of the outstanding Subordinated Notes.
"TRANSFEREE" shall have the meaning provided in SECTION 10.4(d)
"TRANSFER SUPPLEMENT" shall have the meaning provided in
SECTION 10.4(c).
"TYPE" shall mean any type of Revolving Loan or Term Loans
determined with respect to the interest option applicable thereto, i.e., a
Base Rate Loan or a Eurodollar Loan.
"UNFUNDED BENEFIT LIABILITIES" means with respect to any ERISA
Plan at any time, the amount (if any) by which (i) the present value of all
benefit liabilities under such Plan as defined in SECTION 4001(a)(16) of
ERISA, exceeds (ii) the fair market value of all assets of such Plan
allocable to such benefits, all determined as of the then most recent
valuation date for such Plan (on the basis of reasonable assumptions used by
the actuary for such Plan for funding purposes in the most recent actuarial
valuation with respect to such Plan.
"YEAR 2000 ISSUE" means the failure of computer software,
hardware and firmware systems and equipment containing embedded computer
chips to properly receive, transmit, process, manipulate, store, retrieve,
re-transmit or in any other way utilize data and information due to the
occurrence of the year 2000.
SECTION 2. AMOUNT AND TERMS OF CREDIT FACILITIES.
SECTION 2.1. REVOLVING LOANS. (a) Subject to and upon the terms and
conditions herein set forth, each Lender severally and not jointly agrees, at
any time and from time to time on and after the Effective Date and prior to the
Final Maturity Date, to make revolving loans (collectively, "REVOLVING LOANS")
to the Borrower, which Revolving Loans shall not exceed in aggregate principal
amount at any time outstanding the Revolving Loan Commitment of such Lender at
such time; PROVIDED, HOWEVER, that such Lender shall not have any obligation to
make any Revolving Loan if the sum of (x) the aggregate principal amount of
outstanding Revolving Loans, before and after such Revolving Loan is made, (y)
the aggregate principal amount of the outstanding Term Loans and (z) the LC
Exposure exceeds the Borrowing Base as then in effect. The sum of the Revolving
Loan Commitments of all of the Lenders (the "TOTAL REVOLVING LOAN COMMITMENT")
on the Effective Date is $29,000,000.00. On the Final Maturity Date the Total
Revolving Loan Commitment shall terminate, expire
25
and be reduced to zero. The Revolving Loans of each Lender may be maintained
at the option of the Borrower as a Base Rate Loan or a Eurodollar Loan, in
accordance with the provisions hereof.
(b) Revolving Loans may be voluntarily prepaid pursuant to
SECTION 2.12, and, subject to the other provisions of this Agreement, any
amounts so prepaid may be reborrowed. Each Lender's Revolving Loan Commitment
shall expire, and each Revolving Loan shall mature on, the Final Maturity
Date, without further action on the part of the Lenders or the Agent.
(c) Each Borrowing of Revolving Loans shall be in the
aggregate minimum amount of $1,000,000 or any integral multiple of $1,000,000
in excess thereof.
SECTION 2.2. TERM LOAN. (a) Subject to and upon the terms and
conditions hereof, each Lender severally and not jointly agrees to make term
loans (each a "TERM LOANS ADVANCE" and collectively the "TERM LOANS") to the
Borrower in an aggregate principal amount not to exceed such Lender's Term
Loans Commitment; PROVIDED, HOWEVER, that such Lender shall not have any
obligation to make any Term Loan Advances if the sum of (x) the aggregate
principal amount of the outstanding Term Loans, before and after such Term
Loan Advance is made, (y) the aggregate principal amount of outstanding
Revolving Loans and (z) the LC Exposure exceeds the Borrowing Base then in
effect. The sum of the Term Loan Commitments of all of the Lenders is
$45,000,000 (the "TOTAL TERM LOAN COMMITMENT"). The Term Loan Advances will
be available to be borrowed on any Business Day during the period from the
Effective Date to and including the Redemption Date but in no event later
than August 31, 1999 (such period, the "TERM LOAN BORROWING PERIOD"),
provided that in no event shall there be more than two (2) borrowings of Term
Loan Advances. Each Borrowing of Term Loan Advances shall be in the aggregate
minimum amount of $1,000,000 or any integral multiple of $1,000,000 in excess
thereof.
(b) The Term Loans shall be payable in quarterly
installments in the following amounts on the following dates:
Date Amount
---- ------
December 31, 1999 $2,000,000
March 31, 2000 $2,000,000
June 30, 2000 $2,000,000
September 30, 2000 $2,000,000
December 31, 2000 $2,000,000
March 31, 2001 $2,000,000
June 30, 2001 $2,000,000
September 30, 2001 $7,750,000
December 31, 2001 $7,750,000
March 31, 2002 $7,750,000
26
together with accrued and unpaid interest in accordance with SECTION 2.6(d),
with the entire unpaid principal amount together with all accrued and unpaid
interest being due and payable on the Term Loan Maturity Date.
(c) The Borrower's obligation to pay the principal of, and
interest on, each Lender's Term Loans will be evidenced by a promissory note
(collectively, the "TERM NOTES") duly executed and delivered by the Borrower
in the form of Exhibit 2.2 hereto in a principal amount equal to such
Lender's Term Loans, with blanks appropriately completed in conformity
herewith. Each Term Note issued to a Lender shall (w) bear interest as
provided in SECTION 2.6, (x) be payable to the order of such Lender, (y) be
dated the initial Term Loan Borrowing Date and (z) mature on the Term Loan
Maturity Date.
Each Lender is hereby authorized, at its option, either (i) to
endorse on the schedule attached to its Term Note (or on a continuation of
such schedule attached to such Term Note and made a part thereof) an
appropriate notation evidencing the date and amount of each principal and
interest payment in respect thereof, or (ii) to record such payments in its
books and records; PROVIDED that the failure of any Lender to make such
notation or any error therein shall not affect the obligation of the Borrower
to repay the Term Loans made by such Lender in accordance with the terms of
this Agreement and the other Loan Documents. Such schedule or such books and
records, as the case may be, shall constitute prima facie evidence of the
accuracy of the information contained therein.
SECTION 2.3. NOTICE OF BORROWING. (a) Whenever the Borrower desires
to borrow Loans hereunder, it shall give the Agent at the Agent's Office
prior to 12:00 noon, New York City time, on the day of each requested Base
Rate Loan prior telex, telecopy or telephonic notice (promptly confirmed in
writing) of each Base Rate Loan, and at least three Business Days' prior
telex, telecopy or telephonic notice (promptly confirmed in writing) of each
Eurodollar Loan to be made hereunder. Each such notice (a "NOTICE OF
BORROWING") shall be irrevocable and shall specify (i) the aggregate
principal amount of the requested Loans, (ii) the date of Borrowing (which
shall be a Business Day), and (iii) whether such Loans shall consist of Base
Rate Loans or Eurodollar Loans and, if Eurodollar Loans, the initial Interest
Period to be applicable thereto (provided, that no Eurodollar Loans may be
requested or made when any Default or Event of Default has occurred and is
continuing).
(b) Promptly after receipt of a Notice of Borrowing, the
Agent shall provide each Lender with a copy thereof and inform each Lender as
to its Pro Rata Share of the Loans requested thereunder.
SECTION 2.4. DISBURSEMENT OF FUNDS. (a) No later than 1:00 P.M., New
York City time, on the date specified in each Notice of Borrowing, each
Lender will make available its Pro Rata Share of the Loans requested to be
made on such date, in U.S. dollars and immediately available funds, at the
Agent's office. After the Agent's receipt of
27
the proceeds of such Loans, the Agent will make available to the Borrower by
depositing in the Borrower's account at the Agent's Office the aggregate of
the amounts so made available in the type of funds actually received. After
the end of the Term Loan Borrowing Period, the balance, if any, of the Term
Loan Commitment of each Lender shall be reduced to zero.
(b) Unless the Agent shall have been notified by any Lender
prior to the date of a Borrowing that such Lender does not intend to make
available to the Agent its portion of the Loans to be made on such date, the
Agent may assume that such Lender has made such amount available to the Agent
on such date and the Agent in its sole discretion may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Agent by such
Lender and the Agent has made such amount available to the Borrower, the
Agent shall be entitled to recover such corresponding amount on demand from
such Lender. If such Lender does not pay such corresponding amount forthwith
upon the Agent's demand therefor, the Agent shall promptly notify the
Borrower and the Borrower shall immediately repay such corresponding amount
to the Agent. The Agent shall also be entitled to recover from such Lender or
the Borrower, as the case may be, interest on such corresponding amount in
respect of each day from the date such corresponding amount was made
available by the Agent to the Borrower to the date such corresponding amount
is recovered by the Agent, at a rate per annum equal to (i) in the case of
the Borrower, the then applicable rate of interest, calculated in accordance
with SECTION 2.6, for the respective Loans and (ii) in the case of such
Lender, at the Federal Funds Rate until the day three (3) Business Days from
such date and thereafter at the then applicable rate of interest, calculated
in accordance with SECTION 2.6, for the respective Loans. Nothing herein
shall be deemed to relieve any Lender from its obligation to fulfill its
commitments hereunder or to prejudice any rights which the Borrower may have
against any Lender as a result of any default by such Lender hereunder.
Notwithstanding anything contained herein or in any other Loan Document to
the contrary, the Agent may apply all funds and proceeds of Collateral
available for the payment of any Obligations first to repay any amount owing
by any Lender to the Agent as a result of such Lender's failure to fund its
Loans hereunder.
SECTION 2.5. REVOLVING NOTES. (a) The Borrower's obligation to pay
the principal of, and interest on, each Lender's Revolving Loans is evidenced
by a promissory note (collectively, the "REVOLVING NOTES") duly executed and
delivered by the Borrower in the form of Exhibit 2.5 hereto in a principal
amount equal to such Lender's Revolving Loan Commitment, with blanks
appropriately completed in conformity herewith. Each Revolving Note issued to
a Lender shall (w) bear interest as provided in SECTIONS 2.6 (x) be payable
to the order of such Lender, (y) be dated the Effective Date and (z) mature
on the Final Maturity Date.
(b) Each Lender is hereby authorized, at its option, either
(i) to endorse on the schedule attached to its Revolving Note (or on a
continuation of such
28
schedule attached to such Revolving Note and made a part thereof) an
appropriate notation evidencing the date and amount of each Revolving Loan
evidenced thereby and the date and amount of each principal and interest
payment in respect thereof, or (ii) to record such Revolving Loans and such
payments in its books and records; PROVIDED that the failure of any Lender to
make such notation or any error therein shall not affect the obligation of
the Borrower to repay the Revolving Loans made by such Lender in accordance
with the terms of this Agreement and the other Loan Documents. Such schedule
or such books and records, as the case may be, shall constitute prima facie
evidence of the accuracy of the information contained therein.
SECTION 2.6. INTEREST. (a) The Borrower agrees to pay interest in
respect of the unpaid principal amount of each Base Rate Loan from the date
of the making of such Loan until such Loan shall be paid in full at a rate
per annum which shall be equal to the sum of the Alternate Base Rate in
effect from time to time plus the Margin Percentage, such rate to change as
and when the Alternate Base Rate changes, such interest to be computed (i) if
calculated by reference to the Federal Funds Rate, on the basis of a 360-day
year, and (ii) if calculated by reference to the Prime Rate, on the basis of
a 365- or 366-day year, as applicable.
(b) The Borrower agrees to pay interest in respect of the
unpaid principal amount of each Eurodollar Loan from the date of the making
of such Eurodollar Loan until such Eurodollar Loan shall be paid in full at a
rate per annum which shall be equal to the sum of the relevant Eurodollar
Rate plus the Margin Percentage, such interest to be computed on the basis of
a 360-day year.
(c) In the event that, and for so long as, any Event of
Default shall have occurred and be continuing, the outstanding principal
amount of all Loans and, to the extent permitted by law, overdue interest in
respect of all Loans, shall bear interest at a rate per annum (the "DEFAULT
RATE") equal to the sum of two percent (2%) plus the interest rate otherwise
applicable hereunder to such principal amount in effect from time to time.
(d) Interest on each Loan shall accrue from and including
the date of the Borrowing thereof to but excluding the date of any repayment
thereof (provided that any Revolving Loan borrowed and repaid on the same day
shall accrue one day's interest) and shall be payable (i) in respect of each
Base Rate Loan, quarterly in arrears on each Payment Date, (ii) in respect of
each Eurodollar Loan, on the last day of each Interest Period applicable to
such Loan and, in the case of an Interest Period of six months, on the date
occurring three months from the first day of such Interest Period and on the
last day of such Interest Period, and (iii) in the case of all Loans, on any
prepayment or conversion (on the amount prepaid or converted), at maturity
(whether by acceleration or otherwise) and, after such maturity, on demand.
(e) The Agent shall, upon determining the Eurodollar Rate
for any Interest Period, promptly notify the Borrower and the Lenders
thereof.
29
SECTION 2.7. INTEREST PERIODS. (a) The Borrower shall, in each Notice
of Borrowing or Notice of Conversion or Continuation in respect of the making
of, conversion into or continuation of a Eurodollar Loan, select the interest
period (each an "INTEREST PERIOD") applicable to such Eurodollar Loan, which
Interest Period shall, at the option of the Borrower, be either a one-month,
two-month, three-month or six-month period, provided that:
(i) the initial Interest Period for any Eurodollar Loan
shall commence on the date of the making of such Eurodollar Loan
(including the date of any conversion from a Base Rate Loan) and each
Interest Period occurring thereafter in respect of such Eurodollar Loan
shall commence on the date on which the next preceding Interest Period
ends;
(ii) if any Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day; PROVIDED, HOWEVER, that if any Interest Period
would otherwise end on a day which is not a Business Day but is a day of
the month after which no further Business Day occurs in such month, such
Interest Period shall end on the next preceding Business Day;
(iii) if any Interest Period begins on a day for which
there is no numerically corresponding day in the calendar month at the
end of such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month;
(iv) no Interest Period in respect of the Term Loans (or
portion thereof) the principal of which is required to be repaid prior to
the Term Loan Maturity Date shall extend beyond the date on which such
principal is required to be repaid; and
(v) no Interest Period in respect of any Revolving Loan
shall extend beyond the Final Maturity Date and no Interest Period in
respect of the Term Loans shall extend beyond the Term Loan Maturity
Date.
(b) If upon the last day of any Interest Period, the
Borrower has failed to elect a new Interest Period to be applicable to the
respective Eurodollar Loan as provided above, the Borrower shall be deemed to
have elected to convert such Eurodollar Loans into Base Rate Loans effective
as of the last day of such current Interest Period.
SECTION 2.8. MINIMUM AMOUNT OF EURODOLLAR LOANS. All borrowings,
conversions, continuations, payments, prepayments and selection of Interest
Periods hereunder shall be made or selected so that, after giving effect
thereto, (i) the aggregate principal amount of any Borrowing comprised of
Eurodollar Loans shall not be less than $3,000,000 or an integral multiple of
$1,000,000 in excess thereof, and (ii) there shall be no more than 6
Borrowings comprised of Eurodollar Loans outstanding at any time.
30
SECTION 2.9. CONVERSION OR CONTINUATION. (a) Subject to the other
provisions hereof, the Borrower shall have the option (i) to convert at any
time all or any part of outstanding Base Rate Loans which comprise part of
the same Borrowing to Eurodollar Loans, (ii) to convert all or any part of
outstanding Eurodollar Loans which comprise part of the same Borrowing to
Base Rate Loans, on the last day of the Interest Period applicable thereto,
or (iii) to continue all or any part of outstanding Eurodollar Loans which
comprise part of the same Borrowing as Eurodollar Loans for an additional
Interest Period, on the last day of the Interest Period applicable thereto;
PROVIDED that no Loan may be continued as, or converted into, a Eurodollar
Loan when any Default or Event of Default has occurred and is continuing.
(b) In order to elect to convert or continue a Loan under
this SECTION 2.9, the Borrower shall deliver an irrevocable notice thereof (a
"NOTICE OF CONVERSION OR CONTINUATION)" to the Agent no later than 12:00
noon, New York City time, (i) at least one Business Day in advance of the
proposed conversion date in the case of a conversion to a Base Rate Loan and
(ii) at least three Business Days in advance of the proposed conversion or
continuation date in the case of a conversion to, or a continuation of, a
Eurodollar Loan. A Notice of Conversion or Continuation shall specify (w) the
requested conversion or continuation date (which shall be a Business Day),
(x) the amount of the Loan to be converted or continued, (y) whether a
conversion or continuation is requested, and (z) in the case of a conversion
to, or a continuation of, a Eurodollar Loan, the requested Interest Period.
Promptly after receipt of a Notice of Conversion or Continuation under this
Section 2.9, the Agent shall provide each Lender with a copy thereof.
SECTION 2.10. VOLUNTARY REDUCTION OF COMMITMENTS. Upon at least three
Business Days' prior irrevocable written notice (or telephonic notice
promptly confirmed in writing) to the Agent (which notice the Agent shall
promptly transmit to each of the Lenders), the Borrower shall have the right,
without premium or penalty, to permanently reduce each Lender's Pro Rata
Share of all or part of the unused Total Revolving Loan Commitment, unused
Total Term Loan Commitment or the unused Total Standby Letter of Credit
Commitment, provided that any such partial reduction shall be in the minimum
aggregate amount of $1,000,000 or any integral multiple of $1,000,000 in
excess thereof.
SECTION 2.11. MANDATORY REDUCTIONS. The Total Revolving Loan
Commitment or Revolving Loans, as the case may be, shall be reduced as
follows:
(a) For a period of 30 consecutive calendar days during the
period between April 1 through June 30 of each year, the outstanding amounts
of Revolving Loans shall be reduced to, and shall not at any time during such
30 day period exceed the following amounts during the following periods:
31
PERIOD AMOUNT
April 1 to June 30, 2000 $15,000,000
April 1 to June 30, 2001 $10,000,000
April 1 to June 30, 2002 $10,000,000
The obligations of the Borrower under the preceding sentence are in
addition to, and shall not in any manner limit, any other obligation of the
Borrower hereunder to prepay or repay Loans.
(b) [Intentionally Omitted - 1999].
(c) The Total Revolving Loan Commitment shall be reduced
permanently by an amount equal to proceeds of any payments on casualty
insurance or condemnation awards in respect of any of the assets of the
Borrower or any of its Subsidiaries; PROVIDED that so long as no Default or
Event of Default has occurred and is continuing, no such mandatory reduction
shall be required if (i) the aggregate amount of insurance or condemnation
proceeds received by the Borrower and its Subsidiaries in connection with the
event that resulted in the loss, damage, destruction or taking of such assets
is less than $1,000,000 or (ii) the Agent receives written notice in form and
substance satisfactory to it within 60 days of receipt of any such proceeds
from the Borrower describing how such proceeds are to be promptly reinvested
in equipment, vehicles or other assets used in the Borrower's principal lines
of business.
(d) The Total Revolving Loan Commitment shall be reduced at
any time the amount of aggregate proceeds (cash or otherwise) of sales of
assets made pursuant to SECTIONS 7.5(b) and (c), net of reasonable,
documented expenses and withholding taxes arising from such sale (PROVIDED
that any amounts subsequently recovered, or any amounts received as a result
of credits earned, with respect to such withholding taxes shall be additional
proceeds from such sale at the time such amount is received by a Loan Party),
exceeds $7,500,000, permanently by an amount equal to such excess amount
(less the amount of any reductions of the Revolving Loan Commitments
previously made pursuant to this clause (d)); PROVIDED that (i) no such
reduction shall be required pursuant to this clause (d) unless such reduction
would be of at least $1,000,000, (ii) sales of assets listed on Schedule
7.5(c) sold pursuant to Section 7.5(c) shall not be included for the purposes
of this subsection (d) to the extent, and only to the extent, the aggregate
amount of proceeds pursuant to such sales is equal to or less than $9,000,000
and (iii) [Intentionally Omitted 1999].
In the event that, after giving effect to the reductions in the
Total Revolving Loan Commitment set forth in SECTIONS 2.11(c) OR (d), the
Total Revolving Loan Commitment has been reduced to zero, then any excess
amounts shall be applied to the permanent reduction of the Total Standby
Letter of Credit Commitment.
32
SECTION 2.12. VOLUNTARY PREPAYMENTS. The Borrower shall have the right
to prepay the Loans in whole or in part from time to time on the following
terms and conditions: (a) the Borrower shall give the Agent written notice
(or telephonic notice promptly confirmed in writing), which notice shall be
irrevocable, of its intent to prepay the Loans at least three Business Days
prior to a prepayment of Eurodollar Loans and at least one Business Day prior
to a prepayment of Base Rate Loans, which notice shall specify the amount of
such prepayment and what Types of Loans are to be prepaid and, in the case of
Eurodollar Loans, the specific Borrowing(s) pursuant to which such Eurodollar
Loan was made, and which notice the Agent shall promptly transmit to each of
the Lenders and (b) each prepayment shall be in an aggregate principal amount
of $1,000,000 or any integral multiple of $1,000,000 in excess thereof. All
prepayments shall be accompanied by accrued interest on the principal amount
being prepaid to but excluding the day of payment. Notwithstanding anything
to the contrary set forth herein, Term Loans, once repaid, may not be
reborrowed.
SECTION 2.13. Mandatory Prepayments.
(a) [Intentionally Omitted].
(b) On each day on which the Total Revolving Loan Commitment
or Total Standby Letter of Credit Commitment, as the case may be, is reduced
pursuant to SECTION 2.11, the Borrower shall prepay the Revolving Loans and,
in the case of reductions in the Total Standby Letter of Credit Commitment,
cash collateralize outstanding Standby Letters of Credit, to the extent, if
any, that such aggregate outstanding principal amount exceeds the reduced
Total Revolving Loan Commitment or Total Standby Letter of Credit Commitment,
as the case may be.
(c) On each day that the sum of (x) the aggregate principal
amount of outstanding Loans and (y) the LC Exposure exceeds the Borrowing
Base as then in effect, the Borrower shall immediately repay its then
outstanding Loans in such amount as may be necessary to eliminate such
excess.
(d) On each date after the Effective Date on which the
Borrower or any of its Subsidiaries receives any proceeds from any capital
contribution or from any Equity Issuance, in each case, utilizing or
facilitated by one or more underwriters, placement agents or similar Persons,
the Borrower shall prepay the outstanding Loans in an amount equal to 50% of
such proceeds (net of any underwriting discounts or commissions and any other
reasonable costs or expenses directly attributable to such incurrence or
issuance), in accordance with the provisions of SECTION 2.14.
(e) On each day after the Effective Date on which the
Borrower or any of its Subsidiaries receives any proceeds from any sale of
any assets, the Hatteras Disposition, the sale and leaseback of any asset or
the mortgaging of any real property other than pursuant to a Mortgage by the
Borrower or any of its Subsidiaries permitted by the terms of this Agreement
or a refinancing thereof permitted by SECTION 7.2(b), or a
33
sale and leaseback transaction permitted by SECTION 7.14, the Borrower shall
prepay the Loans in an amount equal to 100% of such proceeds (net of
reasonable costs or expenses directly attributable to such transaction), in
accordance with the provisions of SECTION 2.14. All prepayments shall be
accompanied by accrued interest on the principal amount being prepaid to but
excluding the day of payment.
SECTION 2.14. APPLICATION OF PREPAYMENTS. All prepayments of the Loans
required by SECTION 2.13 (other than subparagraph (c) thereof) shall be
applied FIRST, to all fees and expenses then due and payable to the Agent or
the Lenders pursuant to the terms of this Agreement and the other Loan
Documents, SECOND, to any interest then due and payable on the Term Loans,
THIRD, to prepay the Term Loans until the Term Loans shall have been repaid
in full, together with accrued and unpaid interest thereon, FOURTH, to any
interest then due and payable on the Revolving Loans, FIFTH, to prepay the
Revolving Loans until such Revolving Loans shall have been repaid in full,
together with accrued and unpaid interest thereon, and SIXTH, to all other
outstanding Obligations then due and payable. Simultaneously with any
prepayment of the principal amount of the Term Loans pursuant to the
preceding sentence, each Lender's Term Loan Commitment shall be permanently
reduced by such Lender's Pro Rata Share of such prepayment. Prepayments of
the Revolving Loans made pursuant to this Section shall not affect any
Lender's Revolving Loan Commitment. All prepayments of the Term Loans shall
be applied to the installment thereof due on the Term Loan Maturity Date and
then to the remaining installments thereof in inverse order of maturity.
SECTION 2.15. METHOD AND PLACE OF PAYMENT. (a) Except as otherwise
specifically provided herein, all payments and prepayments under this
Agreement and the Revolving Notes and the Term Notes shall be made to the
Agent for the account of the Lenders entitled thereto not later than 12:00
noon, New York City time, on the date when due and shall be made in lawful
money of the United States of America in immediately available funds at the
Agent's office, and any funds received by the Agent after such time shall,
for all purposes hereof (including the following sentence), be deemed to have
been paid on the next succeeding Business Day. Except as otherwise
specifically provided herein, the Agent shall thereafter cause to be
distributed on the date of receipt thereof to each Lender in like funds its
Pro Rata Share of payments so received.
(b) Whenever any payment to be made hereunder or under any
Revolving Note or any Term Note shall be stated to be due on a day which is
not a Business Day, the due date thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
shall be payable at the applicable rate during such extension.
(c) All payments made by the Borrower hereunder and under
the other Loan Documents shall be made irrespective of, and without any
reduction for, any setoff or counterclaims.
34
SECTION 2.16. FEES.(a) The Borrower agrees to pay the fees in the
amounts and on the dates specified in the separate fee letters between the
Borrower and the Agent and the Borrower and each of the other Lenders.
(b) The Borrower agrees to pay to the Agent for the account
of each Lender a commitment fee (the "Commitment Fee"), computed at the per
annum rate set forth in the definition of Margin Percentage, in each case on
the basis of a 360-day year for the actual number of days elapsed, payable on
the average daily unused portion of the Revolving Loan Commitment, the Term
Loan Commitment and the Standby Letter of Credit Commitment, from and
including the Effective Date to the Final Maturity Date, payable quarterly in
arrears on each Payment Date and on the Final Maturity Date or such earlier
date, if any, on which the Revolving Loan Commitment, the Term Loan
Commitment or the Standby Letter of Credit Commitment shall be terminated in
accordance with the terms hereof.
(c) The Borrower agrees to pay to the Agent for the account
of each Lender a Standby Letter of Credit fee computed at the per annum rate
of the Margin Percentage applicable to Eurodollar Loans on the daily
aggregate LC Exposure, payable quarterly in arrears on each Payment Date and
upon termination of the Standby Letter of Credit Commitment.
(d) In addition to the Commitment Fee and such Standby
Letter of Credit fee referred to in this Section 2.16, the Borrower (i)
acknowledges that certain commitment fees and fees with respect to Standby
Letters of Credit issued under the Existing Credit Agreement and payable, in
each case, pursuant to Section 2.15 of the Existing Credit Agreement have
accrued through the Effective Date and agrees to pay such fees on the Payment
Date next succeeding the Effective Date and (ii) agrees to pay to the Issuing
Bank its customary fees for the issuance, amendment and processing of the
Standby Letters of Credit.
(e) The fees described in subsections (a) through (d) of
this Section 2.16 and any other fees payable under this Agreement are
collectively referred to herein as the "Fees."
SECTION 2.17. INTEREST RATE UNASCERTAINABLE, INCREASED COSTS,
ILLEGALITY. (a) In the event that the Agent, in the case of clause (i) below,
or any Lender, in the case of clauses (ii) and (iii) below, shall have
determined (which determination shall, absent manifest error, be final and
conclusive and binding upon all parties hereto):
(i) on any date for determining the Eurodollar Rate for
any Interest Period, that by reason of any changes arising after the date
of this Agreement affecting the interbank Eurodollar market, adequate and
fair means do not exist for ascertaining the applicable interest rate on
the basis provided for in the definition of the Eurodollar Rate; or
35
(ii) at any time, that the relevant Eurodollar Rate
applicable to any of its Eurodollar Loans shall not represent the
effective pricing to such Lender for funding or maintaining a Eurodollar
Loan, or such Lender shall incur increased costs or reductions in the
amounts received or receivable hereunder in respect of any Eurodollar
Loan (other than by reason of a tax, or an increased tax, on the net
income of such Lender), in any such case because of (x) any change since
the date of this Agreement in any applicable law or governmental rule,
regulation, guideline or order or any interpretation thereof and
including the introduction of any new law or governmental rule,
regulation, guideline or order (such as for example but not limited to a
change in official reserve requirements, but, in all events, excluding
reserves required under Regulation D to the extent included in the
computation of the Eurodollar Rate), whether or not having the force of
law and whether or not failure to comply therewith would be unlawful,
and/or (y) other circumstances affecting such Lender or the interbank
Eurodollar market or the position of such Lender in such market; or
(iii) at any time, that the making or continuance by it of
any Eurodollar Loan has become unlawful by compliance by such Lender in
good faith with any law or governmental rule, regulation, guideline or
order (whether or not having the force of law and whether or not failure
to comply therewith would be unlawful) or has become impracticable as a
result of a contingency occurring after the date of this Agreement which
materially and adversely affects the interbank Eurodollar market;
then, and in any such event, the Agent or such Lender shall, promptly after
making such determination, give notice (by telephone promptly confirmed in
writing) to the Borrower and (if applicable) the Agent of such determination
(which notice the Agent shall promptly transmit to each of the other
Lenders). Thereafter (x) in the case of clause (i) above, the Borrower's
right to request Eurodollar Loans shall be suspended, and any Notice of
Borrowing or Notice of Conversion or Continuation given by the Borrower with
respect to any Borrowing of Eurodollar Loans which has not yet been made
shall be deemed cancelled and rescinded by the Borrower, (y) in the case of
clause (ii) above, the Borrower shall pay to such Lender, upon such Lender's
delivery of written demand therefor to the Borrower with a copy to the Agent,
such additional amounts (in the form of an increased rate of interest, or a
different method of calculating interest, or otherwise, as such Lender in its
sole discretion exercised in a professional manner shall determine) as shall
be required to compensate such Lender for such increased costs or reduction
in amounts received or receivable hereunder and (z) in the case of clause
(iii) above, the Borrower shall take one of the actions specified in clause
(b) below as promptly as possible and, in any event, within the time period
required by law. The written demand provided for in clause (y) shall, absent
manifest error, be final and conclusive and binding upon all of the parties
hereto.
36
(b) In the case of any Eurodollar Loan or requested
Eurodollar Loan affected by the circumstances described in clause (a)(ii)
above, the Borrower may, and in the case of any Eurodollar Loan affected by
the circumstances described in clause (a)(iii) above the Borrower shall,
either (i) if any such Eurodollar Loan has not yet been made but is then the
subject of a Notice of Borrowing or a Notice of Conversion or Continuation,
be deemed to be a request for a Base Rate Loan with respect to the affected
Lender, or (ii) if any such Eurodollar Loan is then outstanding, require the
affected Lender to convert each such Eurodollar Loan into a Base Rate Loan at
the end of the applicable Interest Period or such earlier time as may be
required by law, in each case by giving the Agent notice (by telephone
promptly confirmed in writing) thereof on the Business Day that the Borrower
was notified by the Lender pursuant to clause (a) above; PROVIDED, HOWEVER,
that all Lenders whose Eurodollar Loans are affected by the circumstances
described in clause (a) above shall be treated in the same manner under this
clause (b).
(c) In the event that the Agent determines at any time
following its giving of notice based on the conditions described in clause
(a)(i) above that none of such conditions exist, the Agent shall promptly
give notice thereof to the Borrower and the Lenders, whereupon the Borrower's
right to request Eurodollar Loans from the Lenders and the Lenders'
obligation to make Eurodollar Loans shall be restored.
(d) In the event that a Lender determines at any time
following its giving of a notice based on the conditions described in clause
(a)(iii) above that none of such conditions exist, such Lender shall promptly
give notice thereof to the Borrower and the Agent, whereupon the Borrower's
right to request Eurodollar Loans from such Lender and such Lender's
obligation to make Eurodollar Loans shall be restored.
SECTION 2.18. FUNDING LOSSES. The Borrower shall compensate each
Lender, upon such Lender's delivery of a written demand therefor to the
Borrower, with a copy to the Agent (which demand shall, absent manifest
error, be final and conclusive and binding upon all of the parties hereto),
for all reasonable losses, expenses and liabilities (including, without
limitation, any loss, expense or liability incurred by such Lender in
connection with the liquidation or reemployment of deposits or funds required
by it to make or carry its Eurodollar Loans) that such Lender sustains or may
sustain: (i) if for any reason (other than a default by such Lender) a
Borrowing of, or conversion from or into, or a continuation of, Eurodollar
Loans does not occur on a date specified therefor in a Notice of Borrowing or
Notice of Conversion or Continuation (whether or not rescinded, cancelled or
withdrawn or deemed rescinded, cancelled or withdrawn, pursuant to SECTION
2.17(a) OR 2.17(b) or otherwise), (ii) if any repayment (including, without
limitation, payment after acceleration) or conversion of any of its
Eurodollar Loans occurs on a date which is not the last day of the Interest
Period applicable thereto, (iii)if any prepayment of any of its Eurodollar
Loans is not made on any date specified in a notice of prepayment given by
the Borrower, or (iv) as a consequence of any default by the Borrower in
repaying its Eurodollar Loans or any other amounts owing hereunder in
37
respect of its Eurodollar Loans when required by the terms of this Agreement.
Calculation of all amounts payable to a Lender under this SECTION 2.18 shall
be made on the assumption that such Lender has funded its relevant Eurodollar
Loan through the purchase of a Eurodollar deposit bearing interest at the
Eurodollar Rate in an amount equal to the amount of such Eurodollar Loan with
a maturity equivalent to the Interest Period applicable to such Eurodollar
Loan, and through the transfer of such Eurodollar deposit from an offshore
office of such Lender to a domestic office of such Lender in the United
States of America, provided that each Lender may fund its Eurodollar Loans in
any manner that it in its sole discretion chooses and the foregoing
assumption shall only be made in order to calculate amounts payable under
this SECTION 2.18. Such compensation may include an amount equal to the
excess, if any, of (i) the amount of interest which would have accrued on the
amount so prepaid, or not so borrowed, converted or continued, for the period
from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of such Interest Period (or, in the case of a
failure to borrow, convert or continue, the interest Period that would have
commenced on the date of such failure) in each case at the applicable rate of
interest for such Loans provided for herein over (ii) the amount of interest
(as reasonably determined by such Lender) which would have accrued to such
Lender on such amount by placing such amount on deposit for a comparable
period with leading banks in the interbank eurodollar market.
SECTION 2.19. INCREASED CAPITAL. If the Issuing Bank or any Lender
shall have determined that compliance with any applicable law, rule,
regulation, guideline, request or directive (whether or not having the force
of law) of any governmental authority, central bank or comparable agency
(other than by reason of a tax or an increased tax, on the net income of such
Lender), has or would have the effect of reducing the rate of return on the
capital or assets of the Issuing Bank or such Lender as the case may be, or
any Person Controlling the Issuing Bank or such Lender as the case may be, as
a consequence of its commitments or obligations hereunder, then from time to
time, upon the Issuing Bank's or such Lender's, as the case may be,
delivering a written demand therefor to the Agent and the Borrower, the
Borrower shall pay to the Issuing Bank or such Lender, as the case may be,
such additional amount or amounts as will compensate the Issuing Bank, such
Lender or Person, as the case may be, for such reduction.
SECTION 2.20. TAXES. (a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without reduction or
withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any governmental authority excluding, in the case of the Agent,
the Issuing Bank and each Lender, net income and franchise taxes imposed on
the Agent, the Issuing Bank or such Lender by the jurisdiction under the laws
of which the Agent, the Issuing Bank or such Lender is organized or any
political subdivision or taxing authority thereof or therein, or by any
jurisdiction in which such Lender's Domestic Lending office or Eurodollar
Lending Office, as the case may be, is located or any
38
political subdivision or taxing authority thereof or therein or by reason of
such Lender's failure to comply with SECTION 2.20(b) hereof (all such
non-excluded taxes, levies, imposts, deductions, charges or withholdings
being hereinafter called "TAXES"). If any Taxes are required to be withheld
from any amounts payable to the Agent, the Issuing Bank or any Lender
hereunder or under the Revolving Notes or under the Term Notes, the amounts
so payable to the Agent, the Issuing Bank or such Lender shall be increased
to the extent necessary to yield to the Agent, the Issuing Bank or such
Lender (after payment of all Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this Agreement
and the Revolving Notes and the Term Notes. Whenever any Taxes are payable by
the Borrower, as promptly as possible thereafter, the Borrower shall send to
the Agent for its own account or for the account of the Issuing Bank or such
Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof or other evidence thereof
reasonably satisfactory to the Agent. If the Borrower fails to pay any Taxes
when due to the appropriate taxing authority or fails to remit to the Agent
the required receipts or other documentary evidence, the Borrower shall
indemnify the Agent, the Issuing Bank, and the Lenders for any incremental
taxes, interest or penalties that may become payable by the Agent, the
Issuing Bank, or any Lender as a result of any such failure. The agreements
in this SECTION 2.20 shall survive the termination of this Agreement and the
payment of the Revolving Notes and the Term Notes and all other Obligations
and the expiration of the Standby Letters of credit.
(b) Each Lender that is not incorporated under the laws of
the United States of America or a state thereof (including each Purchasing
Lender that becomes a party to this Agreement pursuant to SECTION 10.4(c))
agrees that, prior to the first date on which any payment is due to it
hereunder, it will deliver to the Borrower and the Agent (i) two duly
completed copies of United States Internal Revenue Service Form 1001 or 4224
or successor applicable form, as the case may be, certifying in each case
that such Lender is entitled to receive payments under this Agreement and the
Revolving Notes and the Term Notes payable to it, without deduction or
withholding of any United States Federal income taxes, and (ii) an Internal
Revenue Service Form W-8 or W-9 or successor applicable form, as the case may
be, to establish an exemption from United States backup withholding tax. Each
Lender which delivers to the Borrower and the Agent a Form 1001 or 4224 and
Form W-8 or W-9 pursuant to the preceding sentence further undertakes to
deliver to the Borrower and the Agent two further copies of the said letter
and Form 1001 or 4224 and Form W-8 or W-9, or successor applicable forms, or
other manner of certification, as the case may be, on or before the date that
any such letter or form expires or becomes obsolete or after the occurrence
of any event requiring a change in the most recent letter and form previously
delivered by it to the Borrower, and such extensions or renewals thereof as
may reasonably be requested by the Borrower, certifying in the case of a Form
1001 or 4224 that such Lender is entitled to receive payments under this
Agreement without deduction or withholding of any United States Federal
income taxes, unless there has been a change in law (including, without
limitation, any change in treaty, statute, regulation or official
interpretation) prior to the
39
date on which any such delivery would otherwise be required which renders all
such forms inapplicable or which would prevent such Lender from duly
completing and delivering any such letter or form with respect to it and such
Lender advises the Borrower that it is not capable of receiving payments
without any deduction or withholding of United States Federal income tax, and
in the case of a Form W-8 or W-9, establishing an exemption from United
States backup withholding tax.
SECTION 2.21. CHANGE OF OFFICE, ETC. Any of the Agent, the Issuing
Bank or any Lender claiming any additional amounts payable pursuant to
SECTIONS 2.17(a)(iii) OR 2.20 shall use reasonable efforts (consistent with
legal and regulatory restrictions) (including reasonable efforts to change
the jurisdiction of its applicable lending office) to avoid the need for or
reduce the amount of any such additional amounts that may thereafter accrue,
provided that such efforts would not, in the sole determination of such
Lender, the Agent or the Issuing Bank, as the case may be, be otherwise
disadvantageous to such Lender, the Agent or the Issuing Bank.
SECTION 2.22. USE OF PROCEEDS. The proceeds of the Revolving Loans
and the Term Loans shall be used for the Borrower's working capital, for
general corporate purposes, to repay and redeem the outstanding Subordinated
Notes (including accrued interest and call premiums) and to repay the
Subordinated Demand Note.
SECTION 2.23. ADJUSTMENTS IN COMMITMENTS AND OUTSTANDING LOANS.
(a) TOTAL COMMITMENTS. From and after the Effective Date,
the Total Commitment of each Lender shall be the sum of the amounts set forth
opposite each Lender's name in Annex 1, as such Commitments may be reduced
pursuant to the terms of this Agreement, and, with respect to each Lender,
such amount shall supersede and be deemed to amend the amount of its
respective Total Commitment as set forth in Annex 1 to the Existing Credit
Agreement.
(b) (i) ADJUSTMENT OF OUTSTANDING LOANS. If any Loans and
Standby Letters of Credit are outstanding under the Existing Credit Agreement
on the date hereof, the Lenders shall on the date hereof, at the direction of
the Agent, make appropriate adjustments among themselves in order to insure
that the amount (and Type) of the Loans outstanding to the Borrower from any
Lender and Standby Letters of Credit issued for the account of Borrower under
this Agreement (as of the date hereof) are proportionate to the aggregate
amount of all of the Total Commitments, after giving effect to the increased
amount of the aggregate Total Commitments and the reallocation of the amounts
of the Total Commitments of the Lenders.
(ii) The Borrower (1) agrees and consents to the terms of
SECTION 2.23(b)(i) and (2) agrees (unless on the date of such adjustments and
prepayments all outstanding Loans are Base Rate Loans) to pay to the
applicable Lender, upon any Lender's delivery of a written demand therefor,
any amounts due under SECTION 2.18
40
arising from the adjustments and prepayments of any Loans required to effect
the reallocations of the Loans and the Commitments under this SECTION 2.23.
SECTION 3. STANDBY LETTERS OF CREDIT
SECTION 3.1. ISSUANCE OF STANDBY LETTERS OF CREDIT. (a) The Issuing
Bank (i) agrees, within five (5) Business Days of the receipt of an
appropriately completed and properly authorized Letter of Credit Application,
in a form and containing terms and conditions that are reasonably acceptable
to the Issuing Bank and consistent with the terms hereof, and on the terms
and subject to the conditions hereinafter set forth, to issue irrevocable
letters of credit ("STANDBY LETTERS OF CREDIT") under which the Issuing Bank
agrees to make payments for the account of the Borrower in respect of ongoing
contingent obligations of the Borrower and/or one or more of its Subsidiaries
related to insurance, performance bonds and fuel bonds, to replace existing
standby letters of credit and for other general corporate purposes acceptable
to the Issuing Bank and the Agent, at any time and from time to time on and
after the Effective Date until the termination of the Total Standby Letter of
Credit Commitment in accordance with SECTION 2.10 hereof and (ii) issued on
the Original Effective Date the Standby Letters of Credit set forth on
Schedule 3.1 of the Original Agreement, PROVIDED, HOWEVER, that any Standby
Letter of Credit shall be issued only if, and each request by the Borrower
for the issuance of any Standby Letter of Credit shall be deemed a
representation and warranty of the Borrower that, immediately following the
issuance of any such Standby Letter of Credit, (x) the LC Exposure at such
time shall not exceed the Total Standby Letter of Credit Commitment in effect
at such time and (y) (A) the sum of (I) the aggregate principal amount of
outstanding Loans and (II) the LC Exposure, before or after such Standby
Letter of Credit is issued, does not exceed (B) the Borrowing Base as then in
effect.
(b) Each Standby Letter of Credit shall be (1) in a minimum
amount of $100,000 (other than in respect of the renewal of the Existing
Standby Letter of Credit, which may be in a minimum amount of $50,000) and
(2) shall be denominated in United States dollars, provided, however, that
the Borrower may maintain the Credit Suisse L/C that was issued and
denominated in British Pounds.
(c) No Standby Letter of Credit shall be issued with a
stated expiration date later than the earlier of (i) ten Business Days prior
to the Final Maturity Date and (ii) the close of business on the date that is
12 months after the date of issuance of such Standby Letter of Credit.
(d) [Intentionally omitted 1999].
(e) Each Standby Letter of Credit may, in the absolute
discretion of the Issuing Bank, include a provision whereby such Standby
Letter of Credit shall be renewed automatically for additional consecutive
periods of 12 months or less (but not
41
beyond the Final Maturity Date) unless the Issuing Bank notifies the
beneficiary thereof at least 60 days (or such shorter period as is acceptable
to the Issuing Bank) prior to the then-applicable expiry date that such
Standby Letter of Credit will not be renewed.
(f) The Borrower may request the extension or renewal of a
Standby Letter of Credit that is not automatically renewed in accordance with
its terms by giving written notice to the Issuing Bank at least five Business
Days prior to the then-current expiry date of such Standby Letter of Credit.
If no Default or Event of Default has occurred and is continuing, the Issuing
Bank shall promptly issue such extension or renewal; PROVIDED, HOWEVER, that
the Issuing Bank shall have no obligation to extend or renew any Standby
Letter of Credit (i) for a period in excess of 12 months or (ii) to any
expiry date beyond the Final Maturity Date.
(g) Each request for the issuance of a Standby Letter of
Credit shall be made on five (5) Business Days' prior electronic, written or
facsimile authenticated Letter of Credit Application from the Borrower to the
Issuing Bank specifying the date on which such Standby Letter of Credit is to
be issued, the date on which such Standby Letter of Credit is to expire, the
amount of such Standby Letter of Credit, the name and address of the
beneficiary of such Standby Letter of Credit and such other information as
may be necessary or desirable to complete such Standby Letter of Credit.
SECTION 3.2. PARTICIPATIONS; UNCONDITIONAL OBLIGATIONS. (a) By the
issuance of a Standby Letter of Credit and without any further action on the
part of the Issuing Bank or the Lenders in respect thereof, the Issuing Bank
hereby grants to each Lender, and each Lender hereby agrees to acquire from
the Issuing Bank, a participation in such Standby Letter of Credit, equal to
such Lender's Pro Rata Share of the face amount of such Standby Letter of
Credit. In consideration and in furtherance of the foregoing, each Lender
hereby absolutely and unconditionally agrees to pay to the Agent, on behalf
of the Issuing Bank, such Lender's Pro Rata Share of each LC Disbursement
made by the Issuing Bank; PROVIDED, HOWEVER, that the Lenders shall not be
obligated to make any such payment to the Issuing Bank with respect to any
wrongful payment or disbursement made under any Standby Letter of Credit as a
result of the gross negligence or willful misconduct of the Issuing Bank.
(b) Each Lender acknowledges and agrees that its obligation
to acquire participations pursuant to paragraph (a) above in respect of
Standby Letters of Credit is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including the occurrence and
continuance of an Event of Default or Default hereunder, and that each such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever.
SECTION 3.3. AGREEMENT TO REPAY LETTER OF CREDIT DISBURSEMENTS. (a)
If the Issuing Bank shall pay any draft presented under a Standby Letter of
Credit, the Borrower shall pay on the date of such payment by the Issuing
Bank to the Issuing Bank an amount equal to the amount of such draft
(PROVIDED that for drafts requiring
42
payment in British Pounds, the Borrower shall pay the U.S. dollar equivalent
as calculated by the Agent at the British Pound Reference Rate on the date
any such draft was paid by the Issuing Bank). If the Borrower receives notice
after 3:00 p.m., New York City time, of the payment by the Issuing Bank of a
draft presented under a Standby Letter of Credit, it shall repay such LC
Disbursement no later 11:00 a.m., New York City time, on the next Business
Day; PROVIDED that if such next Business Day is not the next succeeding
calendar day, then the Borrower shall pay interest, on demand, on the amount
of such LC Disbursement from the date it was made by the Issuing Bank until
it is reimbursed by the Borrower at the rate set forth in clause (b) below.
(b) The Borrower agrees to pay interest on LC Disbursements
which are not paid to the Issuing Bank as set forth in clause (a) above, on
demand, at a rate per annum equal to the sum of the Alternate Base Rate then
in effect plus three and one half percent (3.5%).
(c) The Borrower's obligation to pay the Issuing Bank for LC
Disbursements under the Outstanding Standby Letters of Credit shall be
absolute, unconditional and irrevocable under any and all circumstances and
irrespective of:
(i) any lack of validity or enforceability of any
Standby Letter of Credit;
(ii) the existence of any claim, setoff, defense or other
right that the Borrower or any other person may at any time have against
the beneficiary under any Standby Letter of Credit, the Issuing Bank, the
Agent, any Lender or any other Person (other than the defense of payment
in accordance with the terms of this Agreement or a defense based on the
gross negligence or willful misconduct of the Issuing Bank) or any other
Person in connection with this Agreement or any other agreement or
transaction;
(iii) any draft or other document presented under a
Standby 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, PROVIDED that payment by the Issuing Bank
under such Standby Letter of Credit against presentation of such draft or
document shall not have constituted gross negligence or willful
misconduct of the Issuing Bank;
(iv) payment by the Issuing Bank under a Standby Letter
of Credit against presentation of a draft or other document that does not
comply with the terms of such Letter of Credit, PROVIDED that such
payment shall not have constituted gross negligence or willful misconduct
of the Issuing Bank; and
(v) other circumstances or event whatsoever, whether or
not similar to any of the foregoing, PROVIDED that such other
circumstance or event
43
shall not have been the result of gross negligence or willful misconduct
of the Issuing Bank.
It is understood that in making any payment under a Standby
Letter of Credit (i) the Issuing Bank's exclusive reliance on the documents
presented to it under such Standby Letter of Credit as to any and all matters
set forth therein, including reliance on the amount of any draft presented
under such Standby Letter of Credit, whether or not the amount due to the
beneficiary equals the amount of such draft and whether or not any document
presented pursuant to such Standby 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 Standby Letter of Credit proves to be forged or invalid or any
statement therein proves to be inaccurate or untrue in any respect
whatsoever, and (ii) any noncompliance in any immaterial respect of the
documents presented under a Standby Letter of Credit with the terms thereof
shall, in each case, not be deemed willful misconduct or gross negligence of
the Issuing Bank.
SECTION 3.4. LETTER OF CREDIT OPERATIONS. The Issuing Bank shall,
within a reasonable time after its receipt thereof, examine all documents
purporting to represent a demand for payment under an Outstanding Letter of
Credit to ascertain that the same appear on their face to be in conformity
with the terms and conditions of such Outstanding Letter of Credit. The
Issuing Bank shall promptly give electronic or facsimile notification or
telephonic notification, confirmed by electronic or facsimile notice, to the
Borrower of such demand of payment and of the determination by the Issuing
Bank as to whether such demand for payment was in conformity with the terms
and conditions of such Outstanding Letter of Credit and whether the Issuing
Bank has made or will make a LC Disbursement thereunder, provided that the
failure to give such notice shall not relieve the Borrower of its obligation
to reimburse the Issuing Bank with respect to any such LC Disbursement.
SECTION 3.5. CASH COLLATERALIZATION. If any Event of Default shall
occur and be continuing, the Borrower shall on the Business Day it receives
notice from the Agent or the Required Lenders therefor, deposit in an account
with the Collateral Agent, for the benefit of the Lenders, an amount in cash
equal to the LC Exposure as of such date. Such deposit shall be held by the
Collateral Agent as collateral for the payment and performance of the
Obligations. The Collateral Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal, over such account. Other than
any interest earned on the investment of such deposits in Cash Equivalents,
which investments shall be made at the option and sole discretion of the
Collateral Agent, such deposits shall not bear interest. Interest or profits,
if any, on such investments shall accumulate in such account. Moneys in such
account shall (a) automatically be applied by the Agent to reimburse the
Issuing Bank for LC Disbursements, (b) be held for the satisfaction of the
reimbursement obligations of the Borrower of the LC Exposure at such time and
(c) if the maturity of the Revolving Loans has been accelerated, be applied
to
44
satisfy the Obligations. If the Borrower is required to provide an amount of
cash collateral hereunder as a result of the occurrence of an Event of
Default, such amount (to the extent not applied as aforesaid) shall be
returned to the Borrower within three Business Days after all Events of
Default have been cured or waived.
SECTION 3.6. INDEMNIFICATION. The Lenders agree to indemnify the
Issuing Bank and its officers, directors, employees, representatives and
agents (to the extent not reimbursed by the Loan Parties and without limiting
the obligation of the Loan Parties to do so), ratably according to their Pro
Rata Shares, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever (including, without
limitation, the fees and disbursements of counsel for the Issuing Bank or
such Person in connection with any investigative, administrative or judicial
proceeding commenced or threatened, whether or not the Issuing Bank or such
Person shall be designated a party thereto) that may at any time (including,
without limitation, at any time following the payment of the Obligations) be
imposed on, incurred by or asserted against the Issuing Bank or such Person
as a result of, or arising out of, or in any way related to or by reason of
the issuing of any Standby Letter of Credit or the Issuing Bank acting in its
capacity as Issuing Bank (but excluding any such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from the gross negligence or willful
misconduct of the Issuing Bank or such Person as finally determined by a
court of competent jurisdiction).
SECTION 3.7. RESIGNATION OF THE ISSUING BANK. (a) The Issuing Bank
may resign by giving five Business Days' prior written notice to the Agent,
the Lenders and the Borrower and upon the appointment of any Lender as
successor Issuing Bank. Subject to paragraph (b) below, upon the acceptance
of any appointment as the Issuing Bank hereunder by a successor Issuing Bank,
such successor shall succeed to and become vested with all the interests,
rights and obligations of the retiring Issuing Bank and the retiring Issuing
Bank shall be discharged from its obligations to issue additional Standby
Letters of Credit hereunder. Notwithstanding such resignation, the Borrower
shall pay all accrued and unpaid fronting fees when such fees would otherwise
become due hereunder. The acceptance of any appointment as the Issuing Bank
hereunder by a Lender shall be evidenced by an agreement entered into by such
successor, in a form satisfactory to the Borrower and the Agent, and, from
and after the effective date of such agreement, (i) such Issuing Bank shall
have all the rights and obligations of the previous Issuing Bank under this
Agreement and the other Loan Documents and (ii) references herein and in the
other Loan Documents to "Issuing Bank" shall be deemed to refer to such
successor or to any previous Issuing Bank, or to such successor and all
previous Issuing Banks, as the context shall require.
(b) After the resignation of the Issuing Bank hereunder, the
retiring Issuing Bank shall remain a party hereto and shall continue to have
all the rights and obligations of the Issuing Bank under this Agreement and
the other Loan Documents
45
with respect to Standby Letters of Credit issued by it prior to such
resignation, but shall not be required to issue additional Standby Letters of
Credit and shall be entitled to all accrued and unpaid fronting fees due and
owing to it through and including the date of resignation.
SECTION 4. CONDITIONS PRECEDENT.
SECTION 4.1. CONDITIONS PRECEDENT TO EFFECTIVENESS. This Agreement
shall become effective as of the date hereof when the following conditions
precedent have been satisfied:
(a) THIRD AMENDED AND RESTATED CREDIT AGREEMENT. The
Borrower, the Agent, the Arranger and the Lenders shall have executed and
delivered this Agreement to the other parties hereto.
(b) REVOLVING NOTES. The Borrower shall have executed and
delivered to each of the Lenders the appropriate Revolving Notes in the
amount, maturity and as otherwise provided herein.
(c) CONFIRMATIONS, ACKNOWLEDGEMENTS. AND WAIVERS.
(i) Acknowledgements of Loan Parties. Each of the Loan
Parties shall have acknowledged that the Existing Credit Agreement has
been amended and restated and superseded in its entirety by this
Agreement.
(ii) Confirmation of Parties To The Security Documents.
Each of the parties to the Security Documents shall have executed and
delivered to the Agent the acknowledgement in the form of Exhibit
4.1(c)(i) hereto.
(iii) Acknowledgement of Guarantors. Each of the
Guarantors shall have executed and delivered to the Agent the
Acknowledgement in the form of Exhibit 4.1(c)(ii) hereto.
(iv) Acknowledgement of Subordination Agreements. Xx.
Xxxxx X. Xxxxxx shall have executed and delivered to the Agent the
Acknowledgement in the form of Exhibit 4.1(c)(iii) hereto.
(v) Waiver of Subordinated Lenders. The Subordinated
Lenders shall have executed a Waiver to permit repayment and redemption
of the Subordinated Demand Note.
(d) MORTGAGE AMENDMENTS. Each of the Loan Parties party
thereto shall have executed and delivered to the Agent an amendment to each
of the
46
Mortgages, each substantially in the form set forth as Exhibit 4.1(d)(as
amended, modified or supplemented from time to time, each a "MORTGAGE
AMENDMENT" and collectively, the "MORTGAGES AMENDMENTS").
(e) ASSIGNMENT AMENDMENTS. To the extent that any Lender
shall have been advised by special counsel that the same is legally required
in such jurisdiction, the Loan Parties party thereto shall have executed and
delivered to the Lender an amendment to each of the Assignment of Rents and
Leases relating to each applicable Property substantially in the form set
forth as Exhibit 4.1(e) (as amended, modified or supplemented from time to
time, the "ASSIGNMENT AMENDMENTS".
(f) OPINIONS OF COUNSEL.
(i) The Agent shall have received a legal opinion, dated
the Effective Date, from Weil, Gotshal & Xxxxxx LLP, special New York
counsel to the Loan Parties, substantially in the form set forth as
Exhibit 4.1(f)(i).
(ii) The Agent shall have received a legal opinion, dated
the Effective Date, from Xxxx XxXxxxxxx, general counsel of the Borrower,
substantially in the form set forth as Exhibit 4.1(f)(ii).
(g) INSURANCE. The Agent shall have received a certificate
of insurance demonstrating insurance coverage in respect of each of the Loan
Parties of types, in amounts, with insurers and with other terms satisfactory
to the Lenders, which certificate shall indicate that the Agent and the
Lenders are named additional insured as their interests may appear and shall
contain a lenders loss payee endorsement in favor of the Agent in form and
substance satisfactory to the Agent.
(h) LIEN SEARCH REPORTS. The Agent shall have received
satisfactory reports of UCC, tax lien, judgment and litigation searches
conducted by a search firm acceptable to the Agent and the Lenders with
respect to the Loan Parties in each of the locations set forth in Schedule
4.1(h).
(i) UCC-1 FINANCING STATEMENTS. The Agent shall have
received signed copies of each UCC-1 financing statement signed by a Loan
Party as debtor naming the Agent as secured party in form suitable for filing
in the jurisdictions set forth in Schedule 1 to the Security Agreement, to
the extent requested by the Agent.
(j) RECORDATION OF AMENDMENTS. The Agent shall have received
(x) the Borrower's written instructions to the Title Company authorizing the
recordation of the Mortgage Amendments and Assignment Amendments in the
appropriate real estate records of the applicable jurisdiction in which each
and every Mortgaged Property is located and (y) evidence (including, without
limitation, payment instructions given by the Borrower) that all mortgage or
intangible taxes or recording charges required to be paid in connection with
the execution, delivery or recording of the
47
Security Documents (including, without limitation, the Mortgage Amendments
and the Assignment Amendments) as well as all title premiums and other title
and survey charges have been deposited with the Title Company.
(k) TITLE REPORTS. The Agent shall have received a title
report or title insurance commitment (a "TITLE REPORT") issued by Chicago
Title Insurance Company (or other title insurance company reasonably
satisfactory to the Agent and the Lenders) (the "TITLE COMPANY") wherein such
Title Company certifies to the Agent that an examination of title to each of
the Mortgaged Properties has been made in accordance with the Title Company's
usual procedures for the issuance of a lender's form of title insurance
policy and such examination shows the lien of each Mortgage as a first
priority mortgage and/or deed of trust and good and marketable title to each
of the Mortgaged Properties being vested in the Loan Party which granted the
Mortgage relating thereto, in each case free and clear of all Liens except
the Liens permitted pursuant to SECTION 7.3 (hereinafter collectively
referred to as "PERMITTED LIENS"). The Borrower shall be responsible for
paying the full amount of all charges due in connection with the issuance of
the Title Reports.
(l) ENVIRONMENTAL MATTERS. The Agent shall be satisfied that
neither the Borrower nor any of its Subsidiaries is subject to any present or
contingent environmental liability or potential Environmental Claim which
could reasonably be expected to have a Material Adverse Effect.
(m) CERTIFIED RESOLUTIONS, ETC. The Agent shall have
received (1) a certificate of the secretary or assistant secretary of each of
the Loan Parties and dated the Effective Date certifying (i) the names and
true signatures of the incumbent officers of such Person authorized to sign
the applicable Loan Documents, (ii) the resolutions of such Person's Board of
Directors approving and authorizing the execution, delivery and performance
of all Transaction Documents executed by such Person, (iii) that there have
been no changes in the by-laws of such Person since March 27, 1996, except as
otherwise set forth in such certificate, and, to the extent of any such
changes, a copy thereof and (iv) that there have been no changes in the
certificate of incorporation of such Person since March 27, 1996, except as
otherwise set forth in such certificate, and, to the extent of any such
changes, a copy thereof certified by the Secretary of State of incorporation
of such Loan Party and (2) a good standing certificate from the Secretary of
State of incorporation of the Borrower dated not more than ten Business Days
prior to the Effective Date.
(n) FEES AND EXPENSES. The Agent shall have received, for
its account and for the account of each Lender, as applicable, all Fees and
other fees and expenses due and payable hereunder on or before the Effective
Date to the extent statements therefor have been delivered to the Agent and
the Borrower, including, without limitation, the fees and expenses accrued
through the Effective Date, of Xxxxx, Xxxxxx & Xxxxxx, LLP, counsel to the
Agent.
48
(o) CONSENTS, LICENSES, APPROVALS, ETC. The Agent shall have
received copies of all consents, licenses and approvals, if any, required in
connection with the execution, delivery and performance by the Loan Parties
or any of their respective Subsidiaries, and the validity and enforceability,
of the Transaction Documents, or in connection with any of the Transactions,
and such consents, licenses and approvals shall be in full force and effect.
(p) PROJECTIONS. The Agent shall have received projections
prepared by the Borrower demonstrating the projected consolidated financial
condition and results of operations of the Borrower and its Subsidiaries for
the period from the Effective Date through the fiscal quarter of the Borrower
ending June 30, 2002, which projections shall be accompanied by a written
statement of assumptions underlying the projections, and all the foregoing
shall be satisfactory to the Agent and the Lenders.
(q) INDEBTEDNESS. The Existing Notes shall be subordinated
to the Loans and the Standby Letters of Credit on terms and conditions
satisfactory to the Agent and the Lenders.
SECTION 4.2. CONDITIONS PRECEDENT TO EACH TERM LOAN ADVANCE. The
obligation of each Lender to make each Term Loan Advance is subject to the
satisfaction on the date the initial Term Loan Advance is made of the
following conditions precedent:
(a) TERM NOTES. The Borrower shall have executed and
delivered to each of the Lenders the appropriate Term Notes in the amount,
maturity and as otherwise provided herein.
(b) OPINIONS OF COUNSEL.
(i) The Agent shall have received a legal opinion, dated
the date the initial Term Loan Advance is made from Weil, Gotshal &
Xxxxxx LLP, special New York counsel to the Loan Parties, substantially
in the form set forth as Exhibit 4.1(f)(i).
(ii) The Agent shall have received a legal opinion, dated
the date the initial Term Loan Advance is made from Xxxx XxXxxxxxx,
general counsel of the Borrower, substantially in the form set forth as
Exhibit 4.1(f)(ii).
(c) ADDITIONAL MATTERS. The Agent shall have received such
other certificates, opinions, documents and instruments relating to such Term
Loan as may have been reasonably requested by the Agent or Required Lenders.
SECTION 4.3. CONDITIONS PRECEDENT TO ALL REVOLVING LOANS, THE TERM
LOAN ADVANCES AND ISSUANCES OF LETTERS OF CREDIT. The obligation of each
Lender to make any Revolving Loan or Term Loan Advance, or the Issuing Bank
to issue any Standby Letter of Credit, is subject to the satisfaction on the
date such Revolving Loan or Term
49
Loan Advance is made or Standby Letter of Credit is issued of the
following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained herein and in the other Loan Documents (other than
representations and warranties which expressly speak only as of a different
date) shall be true and correct in all material respects on such date both
before and after giving effect to the making of such Revolving Loans, the
Term Loan Advances or issuing of such Standby Letter of Credit.
(b) NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of
Default shall have occurred and be continuing on such date either before or
after giving effect to the making of such Revolving Loans, Term Loan Advances
or issuing of such Standby Letter of Credit.
(c) NO INJUNCTION. No law or regulation shall have been
adopted, no order, judgment or decree of any governmental authority shall
have been issued, and no litigation shall be pending or threatened, which in
the judgment of the Required Lenders would enjoin, prohibit or restrain, or
impose or result in the imposition of any material adverse condition upon,
the making or repayment of the Revolving Loans, the Term Loan Advances or the
consummation of the Transactions.
(d) NO MATERIAL ADVERSE CHANGE. No event, act or condition
shall have occurred after June 30, 1998 which, in, the judgment of the
Required Lenders, has had or could have a Material Adverse Effect.
(e) NOTICE OF BORROWING. The Agent shall have received a
fully executed Notice of Borrowing in respect of the Loans to be made on such
date.
(f) NOTICE OF REDEMPTION. The Borrower shall have issued a
notice under the Subordinated Debt Financing Documents to repurchase and
redeem all of the outstanding Subordinated Notes (the "Redemption Notice").
(g) AUTHORIZATIONS AND DIRECTIONS REGARDING SUBORDINATED
DEMAND NOTE. The Agent shall have received (i) an irrevocable written
authorization and direction from the Borrower to disburse proceeds of the
Revolving Loans and Term Loans (in amounts selected by the Borrower) to or
for the benefit of Xx. Xxxxx X. Xxxxxx in an amount sufficient to repay the
Subordinated Demand Note and (ii) irrevocable written authorization and
direction from Xx. Xxxxx X. Xxxxxx to remit such proceeds directly to The
Bank of New York in payment of the indebtedness of Xxxxx X. Xxxxxx to The
Bank of New York which is secured by the Subordinated Demand Note.
(h) ADDITIONAL MATTERS. The Agent shall have received such
other certificates, opinions, documents and instruments relating to the
Transactions as
50
may have been reasonably requested by the Agent or Required Lenders. The
acceptance of the proceeds of each Revolving Loan, each Term Loan Advance and
the issuance of each Standby Letter of Credit shall constitute a
representation and warranty by the Borrower to each of the Lenders and the
Issuing Bank that all of the conditions required to be satisfied under this
SECTION 4 in connection with the making of such Revolving Loan or such Term
Loan Advance or issuance of such Standby Letter of Credit have been
satisfied. All of the Revolving Notes, the Term Notes, if any, certificates,
agreements, legal opinions and other documents and papers referred to in this
Section 4, unless otherwise specified, shall be delivered to the Agent for
the account of each of the Lenders and, except for the Revolving Notes and
the Term Notes, if any, in sufficient counterparts for each of the Lenders,
and shall be satisfactory in form and substance to each Lender in its sole
discretion.
SECTION 5. REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and
to make the Revolving Loans, the Term Loans and the Issuing Bank to issue the
Standby Letters of Credit, the Borrower makes the following representations
and warranties, which shall survive the execution and delivery of this
Agreement and the Revolving Notes and the making of the Revolving Loans, the
Term Loans and the issuing of the Standby Letters of Credit:
SECTION 5.1. CORPORATE STATUS; INACTIVE SUBSIDIARIES. (i) Each Loan
Party (1) is a duly organized and validly existing corporation in good
standing under the laws of the jurisdiction of its incorporation, (2) has the
corporate power and authority to own its property and assets and to transact
the business in which it is engaged or presently proposes to engage and (3)
except where the failure to do so would not, in the aggregate, result in a
Material Adverse Effect, has duly qualified and is authorized to do business
and is in good standing as a foreign corporation in every jurisdiction in
which it owns or leases real property or in which the nature of its business
requires it to be so qualified and (ii) none of the Inactive Subsidiaries
conducts or transacts any business or owns any material assets and none of
the Inactive Subsidiaries will receive any transfer of property from the
Borrower or any Restricted Subsidiary.
SECTION 5.2. CORPORATE POWER AND AUTHORITY. Each Loan Party has the
corporate power and authority to execute, deliver and carry out the terms and
provisions of each of the Transaction Documents to which it is a party and
has taken all necessary corporate action to authorize the execution, delivery
and performance by it of such Transaction Documents. Each Loan Party has duly
executed and delivered each of the Transaction Documents to which it is
party, and each such Transaction Document constitutes its legal, valid and
binding obligation, enforceable in accordance with its terms.
51
SECTION 5.3. NO VIOLATION. Neither the execution, delivery or
performance by any Loan Party of the Transaction Documents to which it is a
party, nor compliance by it with the terms and provisions thereof nor the
consummation of the Transactions, (i) will contravene any applicable
provision of any law, statute, rule, regulation, order, writ, injunction or
decree of any court or governmental instrumentality or (ii) will conflict or
be inconsistent with or result in any breach of, any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien
(except pursuant to the Security Documents) upon any of the property or
assets of any Loan Party pursuant to the terms of any indenture, mortgage,
deed of trust, agreement or other instrument to which such Loan Party is a
party or by which it or any of its property or assets is bound or to which it
may be subject, or (iii) will violate any provision of the certificate of
incorporation or by-laws of any Loan Party.
SECTION 5.4. LITIGATION. There are no actions, suits or proceedings
pending or, to the best knowledge of the Borrower, threatened (i) with
respect to any of the Transactions or Transaction Documents or (ii) that
could, individually or in the aggregate, result in a Material Adverse Effect.
SECTION 5.5. FINANCIAL STATEMENTS; FINANCIAL CONDITION; ETC. The
internally prepared financial statements of the Borrower and its Subsidiaries
dated as of May 31, 1999 (the "INTERNAL FINANCIALS") delivered to the Agent
and the Lenders in connection with this Agreement were prepared in accordance
with GAAP consistently applied and fairly present the financial condition and
the results of operations of the entities covered thereby on the dates and
for the periods covered thereby and subject to normally recurring year-end
adjustments. No Loan Party has any material liability (contingent or
otherwise) other than those reflected on the Internal Financials or as set
forth on Schedule 5.5.
SECTION 5.6. SOLVENCY. On the Effective Date and after and giving
effect to the Transactions, (x) the Borrower and (y) the Borrower and its
Subsidiaries, on a consolidated basis, will be Solvent.
SECTION 5.7. PROJECTIONS. The projections delivered to the Agent and
the Lenders in connection with this Agreement have been prepared on the basis
of the assumptions accompanying them, and such projections and assumptions,
as of the date of preparation thereof, are reasonable and represent the
Borrower's good faith estimate of its future financial performance, it being
understood that nothing contained in this SECTION shall constitute a
representation or warranty that such future financial performance or results
of operations will in fact be achieved.
SECTION 5.8. MATERIAL ADVERSE CHANGE. Since the date of the most
recent audited consolidated financial statements of the Borrower dated June
30, 1998, there has occurred no event, act or condition which has or could
have resulted in a Material Adverse Effect.
52
SECTION 5.9. USE OF PROCEEDS; MARGIN REGULATIONS. All proceeds of
each Revolving Loan, the Term Loans and each Standby Letter of Credit will be
used by the Borrower only in accordance with the provisions of SECTIONS 2.22
and 3.1. No part of the proceeds of any Revolving Loan, the Term Loans or any
Standby Letter of Credit will be used by the Borrower to purchase or carry
any Margin Stock or to extend credit to others for the purpose of purchasing
or carrying any Margin Stock. Neither the making of any Revolving Loan or the
Term Loans nor the use of the proceeds thereof will violate or be
inconsistent with the provisions of Regulation U of the Federal Reserve
Board.
SECTION 5.10. GOVERNMENTAL APPROVALS. No order, consent, approval,
license, authorization, or validation of, or filing, recording or
registration with, or exemption by, any governmental or public body or
authority, or any subdivision thereof, is required to authorize, or is
required in connection with (i) the execution, delivery and performance of
any Transaction Document or the consummation of any of the Transactions or
(ii) the legality, validity, binding effect or enforceability of any
Transaction Document, except those listed on Schedule 5.10 that have already
been duly made or obtained and remain in full force and effect.
SECTION 5.11. SECURITY INTERESTS AND LIENS. The Security Documents
create, as security for the Obligations, valid and enforceable security
interests in and Liens on all of the Collateral, in favor of the Agent for
the ratable benefit of the Lenders, and subject to no other Liens other than
those Liens permitted pursuant to SECTION 7.3 and such security interests in
and Liens on the Collateral shall be superior to and prior to the rights of
all third parties (except as disclosed on Schedule 5.11), and no further
recordings or filings are or will be required in connection with the
creation, perfection or enforcement of such security interests and Liens,
other than the filing of continuation statements in accordance with
applicable law.
SECTION 5.12. TAX RETURNS AND PAYMENTS. Each Loan Party has filed all
tax returns required to be filed by it and has paid all taxes and assessments
payable by it which have become due other than those not yet delinquent or
those that are adequately reserved against in accordance with GAAP which are
being diligently contested in good faith by appropriate proceedings.
SECTION 5.13. ERISA. The Borrower has no Plans other than those listed
on Schedule 5.13. No accumulated funding deficiency (as defined in Section
412 of the Code or Section 302 of ERISA) or, Reportable Event has occurred
with respect to any ERISA Plan as to which there remains any liabilities
under Title IV of ERISA. There are no Unfunded Benefit Liabilities under any
ERISA Plan. The Borrower and each member of its ERISA Controlled Group have
complied with the requirements of Section515 of ERISA with respect to each
Multiemployer Plan and is not in "default" (as defined in Section 4219(c)(5)
of ERISA) with respect to payments to a Multiemployer Plan. The aggregate
potential total withdrawal liability, and the aggregate potential annual
withdrawal liability payments of the Borrower and the members of its ERISA
Controlled
53
Group as determined in accordance with Title IV of ERISA as if the Borrower
and the members of its ERISA Controlled Group had completely withdrawn from
all Multiemployer Plans is not greater than $250,000 and $100,000,
respectively. To the best knowledge of the Borrower and each member of its
ERISA Controlled Group, no Multiemployer Plan is or is likely to be in
reorganization (as defined in Section 4241 of ERISA or Section 418 of the
Code) or is insolvent (as defined in Section 4245 of ERISA). No material
liability to the PBGC (other than required premium payments), the Internal
Revenue Service, any Plan or any trust established under Title IV of ERISA
has been, or is expected by the Borrower or any member of its ERISA
Controlled Group to be, incurred by the Borrower or any member of its ERISA
Controlled Group. Except as otherwise disclosed on Schedule 5.13 hereto,
neither the Borrower nor any member of its ERISA Controlled Group has any
contingent liability with respect to any post-retirement benefit under any
"welfare plan" (as defined in Section 3(l) of ERISA), other than liability
for continuation coverage under Part 6 of Title I of ERISA. No lien under
Section 412(n) of the Code or 302(f) of ERISA or requirement to provide
security under Section 401(a)(29) of the Code or Section 307 of ERISA has
been or is reasonably expected by the Borrower or any member of its ERISA
Controlled Group to be imposed on the assets of the Borrower or any member of
its ERISA Controlled Group.
SECTION 5.14. INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY
ACT. Neither the Borrower nor any of its Subsidiaries is (x) an "investment
company" or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended, (y) a "holding
company" or a "subsidiary company" of a "holding company" or an "affiliate"
of either a "holding company" or a "subsidiary company" within the meaning of
the Public Utility Holding Company Act of 1935, as amended, or (z) subject to
any other Federal or state law or regulation which purports to restrict or
regulate its ability to borrow money.
SECTION 5.15. REPRESENTATIONS AND WARRANTIES IN TRANSACTION DOCUMENTS.
All representations and warranties made by any Loan Party in the Transaction
Documents (other than the Loan Documents) are true and correct in all
material respects. None of such representations and warranties are
inconsistent in any material respect with the representations and warranties
of any Loan Party made herein or in any other Loan Document.
SECTION 5.16. TRUE AND COMPLETE DISCLOSURE; FINANCIAL STATEMENTS. All
factual information (taken as a whole) furnished by or on behalf of any Loan
Party in writing to the Agent or any Lender for purposes of or in connection
with this Agreement or any of the Transactions is true and accurate in all
material respects on the date as of which such information is dated or
furnished and not incomplete by omitting to state any material fact necessary
to make such information (taken as a whole) not misleading at such time. All
of the financial statements of the Borrower and its Subsidiaries furnished by
or on behalf of any Loan Party to the Agent or any Lender for purposes of or
in connection with the Transactions were prepared in accordance with GAAP and
fairly present the
54
financial condition and results of operations of the appropriate Loan Parties
at the dates and for the periods respectively covered thereby. As of the
Effective Date, there are no facts, events or conditions known to the
Borrower which, individually or in the aggregate, have or could be expected
to have a Material Adverse Effect.
SECTION 5.17. CORPORATE STRUCTURE; CAPITALIZATION. Schedule 5.17
hereto sets forth the number of authorized and issued shares of Capital Stock
of the Borrower and each of its Subsidiaries, the par value thereof and the
registered owner(s) thereof as of the Effective Date and prior to any changes
resulting from any Equity Issuance. All of such Capital Stock has been duly
and validly issued and is fully paid and non-assessable. Neither any Loan
Party nor any such Subsidiary has outstanding any securities convertible into
or exchangeable for its Capital Stock nor does any Loan Party or any such
Subsidiary have outstanding any rights to subscribe for or to purchase, or
any options for the purchase of, or any agreements providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to, its Capital Stock.
SECTION 5.18. ENVIRONMENTAL MATTERS. Except for matters which in the
aggregate would not reasonably be expected to give rise to a Material Adverse
Effect:
(a) (i) each of the Loan Parties is in compliance with all
applicable Environmental Laws, (ii) each of the Loan Parties has all
Environmental Approvals required to operate their businesses as presently
conducted or as reasonably anticipated to be conducted, (iii) none of the
Loan Parties has received any communication, whether from a governmental
authority, citizens group, employee or otherwise, that alleges that such Loan
Party is not in compliance with all Environmental Laws, and (iv) to the
Borrower's best knowledge after due inquiry, there are no circumstances that
may prevent or interfere with such compliance in the future;
(b) there is no Environmental Claim pending or threatened
against any Loan Party;
(c) there are no past or present actions, activities,
circumstances, conditions, events or incidents, including, without
limitation, the release, emission, discharge or disposal of any Material of
Environmental Concern, that could form the basis of any Environmental Claims
against any of the Loan Parties; and
(d) (i) there are no on-site or off-site locations in which
any Loan Party has stored, disposed or arranged for the disposal of materials
of Environmental Concern, (ii) there are no underground storage tanks located
on property owned or leased by any Loan Party, (iii) there is no friable
asbestos contained in or forming part of any building, building component,
structure or office space owned or leased by any Loan Party, and (iv) no
polychlorinated biphenyls (PCB's) are used or stored at any property owned or
leased by any Loan Party.
55
SECTION 5.19. SENIOR INDEBTEDNESS. All of the Obligations constitute
"Senior Indebtedness" within the meaning ascribed to such term in the
Subordinated Debt Financing Documents and the Subordination Agreements,
including, without limitation, in the New Subordinated Credit Agreement.
SECTION 5.20. PATENTS, TRADEMARKS, ETC. Schedule 5.20 is a complete
list of all patents and copyrights owned by the Loan Parties and each of the
Loan Parties has obtained and holds in full force and effect, free from
burdensome restrictions, all patents, trademarks, servicemarks, trade names,
copyrights and other such rights, in each case which are necessary for the
operation of its business as presently conducted. No product, process,
method, substance, part or other material presently manufactured by any Loan
Party in connection with such business infringes any patent, trademark,
service xxxx, trade name, copyright, license or other right owned by any
other Person, which infringement could result in a Material Adverse Effect.
There is not pending or overtly threatened any claim or litigation against or
affecting any Loan Party contesting its right to sell or use any such
product, process, method, substance, part or other material.
SECTION 5.21. OWNERSHIP OF PROPERTY.(a) Schedule 5.21(a)(i) sets forth
all the real property owned or leased by the Loan Parties and used or held
for use in connection with the business of the Loan Parties and identifies
the street address (or a legal description of such property), the current
owner (and current record owner, if different) and whether such property is
leased or owned. The Loan Parties have good and marketable fee simple title
to or valid and subsisting leasehold interests in all of such real property
free and clear of all liens, claims, encumbrances, restrictions, rights of
way, easements, encroachments and charges or adverse claims or interests of
any nature other than Liens permitted by Section 7.3, and good and valid
title to all of their personal property other than such immaterial real
property set forth on Schedule 5.21(a)(ii) subject to no Lien of any kind
except Liens permitted hereby. The Loan Parties enjoy peaceful and
undisturbed possession under all of their respective leases.
(b) Except as set forth on Schedule 5.21(b), all buildings,
structures, heating and air conditioning equipment, plumbing, electrical and
other mechanical systems and equipment and the roofs, walls and other
structural components included in the Properties are in good operating
condition and repair (normal wear and tear excepted), do not require any
material repairs and are adequate for the uses for which they are currently
utilized and comply in all material respects with all applicable laws,
building, fire, health and safety codes, ordinances and zoning rules and
zoning ordinances. There are no pending or, to the Loan Parties' knowledge,
threatened material suits, actions or proceedings, including, without
limitation, condemnation or eminent domain proceedings, affecting the
Mortgaged Property or any part thereof.
(c) Except as otherwise disclosed to the Agent, to the best
knowledge of the Borrower, based on the Flood Hazard Certificates prepared by
the Central Flood
56
Hazard Agency, none of the Properties are located in a flood hazard area as
defined by the Federal Insurance Administration.
(d) Except as disclosed in the surveys or Title Insurance
Policies delivered to the Agent hereunder as of the Effective Date, all
Improvements comprising a portion of any Property lie wholly within the
boundary and building restriction lines of such Property and no improvements
on adjoining properties encroach upon any Property.
SECTION 5.22. NO DEFAULT. No Loan Party is in default under or with
respect to any Transaction Document or any other agreement, instrument or
undertaking to which it is a party or by which it or any of its property is
bound in any respect which could result in a Material Adverse Effect. No
Default or Event of Default exists.
SECTION 5.23. LICENSES, ETC. The Loan Parties have obtained and hold
in full force and effect, all franchises, licenses, permits, certificates,
authorizations, qualifications, accreditations, easements, rights of way and
other rights, consents and approvals which are necessary for the operation of
their respective businesses as presently conducted.
SECTION 5.24. COMPLIANCE WITH LAW. Each Loan Party is in compliance
with all laws, rules, regulations, orders, judgments, writs and decrees other
than such non-compliance which, individually or in the aggregate, could not
have a Material Adverse Effect.
SECTION 5.25. NO BURDENSOME RESTRICTIONS. No Loan Party is a party to
any agreement or instrument or subject to any other obligation or any charter
or corporate restriction or any provision of any applicable law, rule or
regulation which, individually or in the aggregate, could have a Material
Adverse Effect.
SECTION 5.26. BROKERS' FEES. Other than as set forth in the Offering
Memorandum, none of the Loan Parties has any obligation to any Person in
respect of any finder's, broker's, investment banking or other similar fee in
connection with any of the Transactions (other than with respect to the Agent
and the Lenders).
SECTION 5.27. LABOR MATTERS. There is no presently existing dispute or
controversy between the Borrower or any of its Subsidiaries and any of their
respective employees which has had or is likely to have, and the Borrower has
no reason to believe that the relationship of the Borrower and its
Subsidiaries with their unions or employees is likely to have, a Material
Adverse Effect. The Borrower and each of its Subsidiaries are in compliance
in all material respect with all federal and state laws with respect to
non-discrimination in employment and the payment of wages.
SECTION 5.28. DEALER ACCOUNT FINANCING. The Borrower and its
Subsidiaries do not have in the aggregate in excess of $2,500,000 outstanding
of Dealer Accounts or any other Accounts with payment terms of greater than
12 months.
57
SECTION 5.29. YEAR 2000. Any reprogramming required to permit the
proper functioning, in and following the year 2000, of (i) the Borrower's and
its Subsidiaries' computer systems and (ii) equipment containing embedded
microchips (including systems and equipment supplied by others or with which
the Borrower's or its Subsidiaries' systems interact) and the testing of all
such systems and equipment, as so reprogrammed, in a manner sufficient to
permit the Borrower and its Subsidiaries to conduct their business without
Material Adverse Effect, will be completed by October 31, 1999. The cost to
the Borrower and its Subsidiaries of such reprogramming and testing and of
the reasonably foreseeable consequences of year 2000 to the Borrower and its
Subsidiaries (including reprogramming errors and the failure of others'
systems or equipment) will not result in a Default or a Material Adverse
Effect. Except for such of the reprogramming referred to in the preceding
sentence as may be necessary, the computer and management information systems
of the Borrower and its Subsidiaries are and, with ordinary course upgrading
and maintenance, will continue for the term of this Agreement to be,
sufficient to permit the Borrower and its Subsidiaries to conduct their
business without Material Adverse Effect.
SECTION 6. AFFIRMATIVE COVENANTS.
The Borrower covenants and agrees that on and after the
Effective Date and until the Total Commitment has terminated and the
Obligations are paid in full:
SECTION 6.1. INFORMATION COVENANTS. The Borrower will furnish to the
Agent and each Lender:
(a) ANNUAL FINANCIAL STATEMENTS. Within 90 days after the
close of each fiscal year of the Borrower, commencing with the fiscal year
ending June 30, 1999, the consolidated and consolidating balance sheet of the
Borrower and its Subsidiaries as at the end of such fiscal year and the
related consolidated and consolidating statements of income and consolidated
cash flow and retained earnings for such fiscal year setting forth
comparative figures for the preceding fiscal year disclosing all loss
contingencies of a type requiring disclosure under standards promulgated by
FASB and, with respect to such consolidated financial statements, audited by
Xxxxxx Xxxxxxxx & Co. or other independent certified public accountants of
recognized national standing reasonably acceptable to the Required Lenders,
and accompanied by an opinion of such accountants (which shall not be
qualified) to the effect that such consolidated financial statements fairly
present the financial condition and result of operations of the Borrower and
its Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied.
(b) QUARTERLY FINANCIAL STATEMENTS. Within 45 days after the
close of each quarterly accounting period in each fiscal year of the
Borrower, the consolidated and consolidating balance sheet of the Borrower
and its Subsidiaries as at the end of such quarterly period and the related
consolidated and consolidating statements
58
of income and consolidated cash flow and retained earnings for such quarterly
period and for the elapsed portion of the fiscal year ended with the last day
of such quarterly period disclosing all material changes in loss
contingencies of a type requiring disclosure under standards promulgated by
FASB, in each case setting forth comparative figures for the related periods
in the prior fiscal year and accompanied by a certificate of the chief
financial officer of the Borrower which certifies that such consolidated
financial statements fairly present the financial condition and result of
operations of the Borrower and its Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied, subject to normal year-end
adjustments.
(c) MONTHLY FINANCIAL STATEMENTS. Within 30 days after the
end of each monthly reporting period in each fiscal year of the Borrower, the
consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries as at the end of such monthly reporting period and the related
consolidated and consolidating statements of income and consolidated cash
flow and retained earnings for such monthly reporting period and for the
elapsed portion of the fiscal year ended on the last day of such monthly
reporting period disclosing all material changes in loss contingencies of a
type requiring disclosure under standards promulgated by FASB, in each case
setting forth comparative figures for the related periods in the prior fiscal
year and accompanied by a certificate of the chief financial officer of the
Borrower which certifies that such consolidated financial statements fairly
present the financial condition and result of operations of the Borrower and
its Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, subject to normal year-end and quarter-end adjustments.
(d) MANAGEMENT LETTERS. Promptly after the Borrower's
receipt thereof, a copy of any "management letter" or other material report
received by the Borrower from its certified public accountants.
(e) FINANCIAL PROJECTIONS. Within 60 days after the first
day of each fiscal year of the Borrower, commencing with the fiscal year
beginning July 1, 1999, a financial forecast of results of operations and
sources and uses of cash (in the form of the projections provided to the
Agent and the Lenders in connection with this Agreement) prepared by the
Borrower for the period extending through the quarterly period ending with
June 30, 2002, which financial forecast shall include calculations showing
PRO FORMA compliance with the financial covenants set forth in Section 7.1
for such period, accompanied by a written statement of the assumptions used
in connection therewith, together with a certificate of the chief financial
officer of the Borrower to the effect that such budget and financial forecast
and assumptions, taken as a whole, are reasonable and represent the
Borrower's good faith estimate of its future financial requirements and
performance. The financial statements required to be delivered pursuant to
clauses (a), (b) and (c) above shall be accompanied by a comparison of the
actual financial results set forth in such financial statements to those
contained in the forecasts delivered pursuant to this clause (e) together,
upon request of
59
the Agent or any Lender, with an explanation of any material variations from
the results anticipated in such forecasts.
(f) CERTIFICATES. At the time of the delivery of the
financial statements under clauses (a), (b) and (c) above, a certificate of
the accounting firm or the chief financial officer of the Borrower which
opines or certifies with respect to such financial statements (i) that after
due investigation and reasonable inquiry, no Default or Event of Default has
occurred during the period commencing at the beginning of the accounting
period covered by the financial statements accompanied by such certificate
and ending on the date of such certificate or, if any Default or Event of
Default has occurred, specifying the nature and extent thereof and, if
continuing, the action the Borrower proposes to take in respect thereof, (ii)
setting forth the calculations required to establish whether the Borrower was
in compliance with the provisions of SECTION 7.1 during and as at the end of
the accounting period covered by the financial statements accompanied by such
certificate and (iii) with respect to the delivery of the financial
statements set forth in clause (b) above, specifying the Leverage Ratio and
the category (as set forth in the definition of Margin Percentage) for which
reference to the applicable Margin Percentage shall be determined.
(g) NOTICE OF DEFAULT OR LITIGATION. Promptly and in any
event within three (3) Business Days after any Loan Party obtains knowledge
thereof, notice of (i) the occurrence of any Default or Event of Default,
(ii) any litigation or governmental proceeding pending or threatened against
the Borrower or any or its Subsidiaries which could result in a Material
Adverse Effect and (iii) any other event, act or condition which could result
in a Material Adverse Effect.
(h) ERISA. (i) As soon as possible and in any event within
10 days after the Borrower or any member of its ERISA Controlled Group knows,
or has reason to know, that:
(A) any Termination Event with respect to an ERISA Plan
has occurred or will occur, or
(B) any condition exists with respect to an ERISA Plan
which presents a material risk of termination of the ERISA Plan
or imposition of an excise tax or other material liability on the
Borrower or any member of its ERISA Controlled Group, or
(C) the Borrower or any member of its ERISA Controlled
Group has applied for a waiver of the minimum funding standard
under Section 412 of the Code or Section 302 of ERISA, or
(D) the Borrower or any member of its ERISA Controlled
Group has engaged in a "prohibited transaction," as defined in
Section
60
4975 of the Code or as described in Section 406 of ERISA,
that is not exempt under Section 4975 of the Code and Section 408
of ERISA, or
(E) the aggregate present value of the Unfunded Benefit
Liabilities under all ERISA Plans has in any year increased by
$100,000 or to an amount in excess of $250,000, or
(F) any condition exists with respect to a
Multiemployer Plan which presents a material risk of a partial or
complete withdrawal (as described in Section 4203 or 4205 of
ERISA) by the Borrower or any member of its 75 ERISA Controlled
Group from a Multiemployer Plan, or
(G) the Borrower or any member of its ERISA Controlled
Group is in "default" (as defined in Section 4219(c)(5) of ERISA)
with respect to payments to a Multiemployer Plan, or
(H) a Multiemployer Plan is in "reorganization" (as
defined in Section 418 of the Code or Section 4241 of ERISA) or
is "insolvent" (as defined in Section 4245 of ERISA), or
(I) the potential withdrawal liability (as determined
in accordance with Title IV of ERISA) of the Borrower and the
members of its ERISA Controlled Group with respect to all
Multiemployer Plans has in any year increased by $100,000 or to
an amount in excess of $250,000, or
(J) there is an action brought against the Borrower or
any member of its ERISA Controlled Group under Section 502 of
ERISA with respect to its failure to comply with Section 515
of ERISA,
a certificate of the president or chief financial officer of the
Borrower setting forth the details of each of the events
described in clauses (A) through (J) above as applicable and the
action which the Borrower or the applicable member of its ERISA
Controlled Group proposes to take with respect thereto, together
with a copy of any notice or filing from the PBGC or which may
be required by the PBGC or other agency of the United States
government with respect to each of the events described in
clauses (A) through (J) above, as applicable.
(ii) As soon as possible and in any event within two
Business Days after the receipt by the Borrower or any member of its
ERISA Controlled Group of a demand letter from the PBGC notifying the
Borrower or such member of its ERISA Controlled Group of its final
decision finding liability and 76 the date by which such liability must
be paid, a copy of such letter, together with a certificate of the
president or chief financial officer of the Borrower setting forth
61
the action which the Borrower or such member of its ERISA Controlled
Group proposes to take with respect thereto.
(i) SEC FILINGS. Promptly upon transmission thereof, copies
of all regular and periodic financial information, proxy materials and other
information and reports, if any, which any Loan Party shall file with the
Securities and Exchange Commission or any governmental agencies substituted
therefor or which any Loan Party shall send to its stockholders.
(j) ENVIRONMENTAL. Promptly upon knowledge of a Responsible
Officer of the Borrower of any of the following conditions (if such condition
could reasonably give rise to a Material Adverse Effect), notice from the
Borrower specifying the nature of such condition and the applicable Loan
Party's proposed response thereto: (i) the receipt by any Loan Party of any
written communication, whether from a governmental authority, citizens group,
employee or otherwise, that alleges that such Loan Party is not in compliance
with applicable Environmental Laws, (ii) any Loan Party shall obtain actual
knowledge that there exists any Environmental Claim pending or threatened
against such Loan Party, (iii) any release, emission, discharge or disposal
of any Material of Environmental Concern that could form the basis of any
Environmental Claim against any Loan Party; (iv) actual knowledge of a
Responsible Officer of the Borrower that the Borrower or any of its
Subsidiaries is subject to investigation by any governmental authority
evaluating whether any Remedial Action is needed to respond to the Release or
threatened Release of any Material of Environmental Concern into the
environment; or (v) actual knowledge that would make the representation in
SECTION 5.18(c) false as of the time such knowledge is obtained by a
Responsible Officer of the Borrower.
(k) REFINANCINGS. No later than five (5) Business Days prior
to any extension, refinancing or refunding of Indebtedness pursuant to
Section 7.2(b), shall deliver to the Agent copies of the documentation
relating to such extension, refinancing or refunding together with such other
information related thereto as the Agent may reasonably request.
(l) CHARTER DOCUMENTS. No later than five (5) Business Days
prior to any change therein, the proposed changes to the certificate of
incorporation or the by-laws of the Borrower or any of its Subsidiaries.
(m) NOTICE OF DISSOLUTION. Promptly upon any dissolution of
a Designated Subsidiary, notice thereof.
(n) [Intentionally Omitted - 1999].
(o) OTHER INFORMATION. From time to time, such other
information or documents (financial or otherwise) as the Agent or any Lender
may reasonably request.
62
SECTION 6.2. BOOKS, RECORDS AND INSPECTIONS. The Borrower shall, and
shall cause each of its Subsidiaries to, keep proper books of record and
account in which full, true and correct entries in conformity with GAAP and
all requirements of law shall be made of all dealings and transactions in
relation to its business and activities. The Borrower shall, and shall cause
each of its Subsidiaries to, permit officers and designated representatives
of the Agent or any Lender to visit and inspect any of the properties of the
Borrower or any of its Subsidiaries, and to examine the books of record and
account of the Borrower or any of its Subsidiaries, and discuss the affairs,
finances and accounts of the Borrower or any of its Subsidiaries with, and be
advised as to the same by, its and their officers and independent
accountants, all upon reasonable notice to the Borrower and at such
reasonable times as the Agent or such Lender may desire.
SECTION 6.3. MAINTENANCE OF INSURANCE. The Borrower shall, and shall
cause each of its Subsidiaries to, (a) maintain with financially sound and
reputable insurance companies insurance on itself and its properties in at
least such amounts and against at least such risks as are customarily insured
against in the same general area by companies engaged in the same or a
similar business, which insurance shall in any event not provide for
materially less coverage than the insurance in effect on the Original
Effective Date and (b) furnish to the Agent and each Lender from time to
time, upon written request, the policies under which such insurance is
issued, certificates of insurance (which shall indicate that the Agent (for
the benefit of the Lenders) is named as additional insured as its interests
may appear) and such other information relating to such insurance as the
Agent or such Lender may request.
SECTION 6.4. TAXES. (a) The Borrower shall pay or cause to be paid,
and shall cause each of its Subsidiaries to pay or cause to be paid, prior to
becoming past due, all taxes, charges and assessments and all other lawful
claims required to be paid by the Borrower or such Subsidiaries, except as
contested in good faith and by appropriate proceedings diligently conducted,
if adequate reserves have been established with respect thereto in accordance
with GAAP.
(b) Except to the extent required by applicable law, the
Borrower shall not, and shall not permit any of its Subsidiaries to, file or
consent to the filing of any consolidated, combined or unitary tax return
with any Person (other than the Borrower and/or its Subsidiaries).
SECTION 6.5. CORPORATE FRANCHISES. The Borrower shall, and shall
cause each of its Subsidiaries to, do or cause to be done, all things
necessary to preserve and keep in full force and effect its existence and its
patents, trademarks, servicemarks, tradenames, copyrights, franchises,
licenses, permits, certificates, authorizations, qualifications,
accreditations, easements, rights of way and other rights, consents and
approvals other than those which (a) the board of directors of the Borrower
has determined that the preservation thereof is no longer desirable in the
conduct of the Borrower and its
63
Subsidiaries taken as a whole and (b) individually or in the aggregate, could
not have a Material Adverse Effect.
SECTION 6.6. COMPLIANCE WITH LAW. The Borrower shall, and shall cause
each of its Subsidiaries to, comply in all material respects with all
applicable laws, rules, statutes, regulations, decrees and orders of, and all
applicable restrictions imposed by, all governmental bodies, domestic or
foreign, in respect of the conduct of their business and the ownership of
their property, including, without limitation, all Environmental Laws, other
than those which, individually or in the aggregate, could not have a Material
Adverse Effect.
SECTION 6.7. PERFORMANCE OF OBLIGATIONS. The Borrower shall, and
shall cause each of its Subsidiaries to, perform all of its obligations in
all material respects under the terms of each mortgage, indenture, security
agreement, debt instrument, lease, undertaking and contract by which it or
any of its properties is bound or to which it is a party except where such
non-performance could not have a Material Adverse Effect and shall perform
all of its obligations to make payment when due of all amounts payable
pursuant to the Subordinated Debt Financing Documents to the extent permitted
by the subordination terms thereof.
SECTION 6.8. MAINTENANCE OF PROPERTIES. The Borrower shall, and shall
cause each of its Subsidiaries to, ensure that its properties used or useful
in its business are kept in good repair, working order and condition, normal
wear and tear excepted, and make all repairs, renewals, replacements,
additions, betterments and improvements thereto, as shall be reasonable
necessary for the proper conduct of the Borrower and its subsidiaries taken
as a whole.
SECTION 6.9. BORROWING BASE CERTIFICATE. The Borrower shall deliver
(i) on or prior to the twentieth day of each month (or if such day is not a
Business Day, the first Business Day thereafter), a Borrowing Base
Certificate showing the Borrowing Base as of the last Business Day of the
prior month, (ii) within thirty (30) days after the consummation of any sale
of any assets requiring a prepayment of Loans as a result of a reduction in
the Total Revolving Loan Commitment pursuant to SECTION 2.11, an updated
Borrowing Base Certificate which shall reflect any reduction in the Borrowing
Base as a result of such asset sale(s), and (iii) within ten (10) Business
Days after a request by the Agent, an updated Borrowing Base Certificate
showing the Borrowing Base then in effect adjusted to reflect the projected
effects of any event (other than an asset sale covered by clause (ii) hereof)
identified by the Agent in such request and deemed reasonably likely to have
a material effect on the Borrowing Base by the Agent.
SECTION 6.10. LICENSES, PERMITS, ETC. The Borrower shall obtain and
maintain in full force and effect, or cause each of its Subsidiaries on
behalf of the Borrower and its Subsidiaries to obtain and maintain in full
force and effect, all licenses, permits, governmental approvals, franchises,
authorizations or other rights necessary for the operation of its respective
business; and notify the Agent in writing, promptly after any
64
Loan Party learns thereof, of the suspension, cancellation, revocation or
discontinuance of or any pending or threatened action or proceeding seeking
to suspend, cancel, revoke or discontinue any such license, permit,
governmental approval, franchise authorization or right.
SECTION 6.11. ENVIRONMENTAL REPORTS. Upon the reasonable written
request by the Agent, the Borrower shall promptly submit to the Agent and the
Lenders a report providing an update of the status of each environmental,
health or safety compliance, hazard or liability issue identified in any
notice or report required pursuant to SECTION 6.1(j) above and any other
environmental, health and safety compliance obligation, remedial obligation
or liability that could have a Material Adverse Effect.
SECTION 6.12. APPRAISALS AND COLLATERAL AUDITS. Within ninety (90)
days after a request by the Agent, the Borrower shall deliver to the Agent at
the Borrower's cost and expense (a) appraisals of the Mortgaged Property in
the event that the Agent determines such appraisals are required by
applicable law (including, without limitation, the regulations promulgated
under the Financial Institutions Reform, Recovery and Enforcement Act of
1989, as amended), which appraisals shall be in form and substance
satisfactory to the Agent, and conducted by appraisers selected or approved
by the Agent and (b) audits of the Lenders' Collateral, which audits shall be
in form and substance satisfactory to the Agent and be conducted by auditors
selected or approved by the Agent.
SECTION 6.13. ADDITIONAL GUARANTORS. If (i) any Person becomes a
Subsidiary of the Borrower after the Effective Date, including, without
limitation, any Person that becomes a Subsidiary pursuant to the Pyramid
Acquisition or the Hatteras Internal Transfer, (ii) the Borrower or any
Subsidiary of the Borrower that is a Guarantor transfers or causes to be
transferred, in one transaction or a series of related transactions, property
or assets (including, without limitation, businesses, divisions, real
property, assets or equipment) which in the aggregate have a value equal to
or greater than the lesser of $1,000,000 and 5% of the Borrower's total
assets determined on a consolidated basis as of the time of transfer to any
Subsidiary or Subsidiaries of the Borrower that is not a Guarantor or are not
Guarantors (other than AMF Insurance Company of Bermuda Ltd.), or (iii) any
Subsidiary (other than AMF Insurance Company of Bermuda Ltd.) of the Borrower
which is not a Guarantor has a value equal to or greater than the lesser of
$1,000,000 and 5% of the Borrower's total assets determined on a consolidated
basis as of the time of determination, the Borrower shall cause such
Subsidiary or Subsidiaries to execute and deliver to the Agent an agreement
to become a Guarantor in the form of Annex B to the Guaranty and such other
documents, including Security Documents, as the Agent shall require.
SECTION 6.14. AMF INSURANCE COMPANY OF BERMUDA LTD. As of June 30,
1999, the principal asset of AMF Insurance Company of Bermuda Ltd. is a
promissory note from Minstar, Inc. on which $1,085,319.00 is outstanding.
The Borrower shall cause that neither it nor any of its Subsidiaries make any
other loan, advance, investment or
65
payment of any kind whatsoever to, nor incur or permit to exist any other
obligation, contingent or otherwise, to or on behalf of, AMF Insurance
Company of Bermuda Ltd., other than (i) payments on such promissory note to
meet insurance claims payable by AMF Insurance Company of Bermuda Ltd. as
they are due, (ii) additional payments with respect to the operating expenses
of AMF Insurance Company of Bermuda Ltd. in an aggregate yearly amount not to
exceed $100,000 and (iii) reimbursement of fees paid by AMF Insurance Company
of Bermuda Ltd. with respect to letters of credit with an aggregate face
amount outstanding at any time not to exceed $3,285,000.
SECTION 6.15. [Intentionally Omitted 1999].
SECTION 6.16. NOTICES UNDER NEW SUBORDINATED CREDIT AGREEMENT, ETC.
Immediately after receiving any notice or communication by the Subordinated
Agent or the Subordinated Lenders under the New Subordinated Credit
Agreement, the Borrower shall provide copies of the same to the Agent and
each Lender.
SECTION 6.17. HEDGING AGREEMENTS. Within six months of the Effective
Date, the Borrower shall enter into and obtain, and thereafter maintain, one
or more Hedging Agreements with respect to interest rate risk for the term of
the Term Loans, satisfactory to the Agent, for not less than 50% of the then
outstanding principal balance of the Term Loans.
SECTION 6.18. YEAR 2000 ISSUE. The Borrower shall, and shall cause
each of its Subsidiaries to, take all necessary action to complete by October
31, 1999, the reprogramming of computer software, hardware and firmware
systems and equipment containing embedded microchips owned or operated by or
for the Borrower and the Subsidiaries or used or relied upon in the conduct
of their business (including systems and equipment supplied by others or with
which such systems of the Borrower and the Subsidiaries interface) required
as a result of the Year 2000 Issue to permit the proper functioning of such
computer systems and other equipment and the testing of such systems and
equipment, as so reprogrammed, except where the failure to do so could not
reasonably be expected to result in a Material Adverse Effect. At the
request of the Agent, the Borrower will, and will cause each of the
Subsidiaries to, provide to the Agent reasonable assurance of its compliance
with the preceding sentence.
SECTION 6.19. SUBORDINATED NOTES. The Borrower shall redeem and repay
the outstanding Subordinated Notes on or before the Redemption Date.
SECTION 7. NEGATIVE COVENANTS.
The Borrower covenants and agrees that on and after the
Effective Date until the Total Commitment has terminated and the Obligations
are paid in full:
SECTION 7.1. FINANCIAL COVENANTS.
66
(a) INTEREST COVERAGE RATIO. The Borrower shall not permit
the ratio of Consolidated Cash Flow to Consolidated Interest Expense to be
less than 2.50 to 1:00 at anytime.
(b) CAPITAL EXPENDITURES. The Borrower shall not make or
incur and shall not permit any of its Subsidiaries to make or incur any
Capital Expenditures in an amount exceeding $15,000,000 in the aggregate
during any fiscal year of the Borrower, provided however, during the fiscal
year ending June 30, 2000, in the event (a) an Equity Issuance is consummated
which yields $30,000,000 or more to the Borrower or (b) the Consolidated Cash
Flow of the Borrower is at least $48,000,000 for two consecutive fiscal
quarters following the Effective Date, then the Borrower and/or its
Subsidiaries may make Capital Expenditures (during the fiscal year ending
June 30, 2000) of up to $27,000,000, of which additional $12,000,000, not
more than $5,000,000 may be used for Capital Expenditures other than Pyramid
Capital Expenditures, subject, to the extent applicable, in the case of
Pyramid Capital Expenditures, to the conditions set forth in the definition
of "Pyramid Capital Expenditures." In addition, such amount of Capital
Expenditures in any fiscal year may be increased by an amount, not to exceed
$5,000,000 in any such fiscal year, equal to the excess of (a) $15,000,000
over (b) the amount of Capital Expenditures actually made or incurred in the
immediately preceding year.
(c) MINIMUM CONSOLIDATED NET WORTH. The Borrower shall not
permit Consolidated Net Worth at the end of each fiscal quarter to be less
than the sum of (i) $8,000,000 PLUS (ii) for each fiscal quarter of the
Borrower ending after the Effective Date, an amount equal to 50% of the
Consolidated Net Income (if positive) for such fiscal quarter and (without
duplication) each previous fiscal quarter following the Effective Date PLUS
for each Equity Issuance, an amount equal to 100% of the amount by which
Consolidated Net Worth is increased on account of such Equity Issuance.
(d) LEVERAGE RATIO. The Borrower shall not permit its
Leverage Ratio to exceed the following during each of the following periods:
Period Leverage Ratio
------ --------------
Effective Date to June 29, 2000 3.25:1.00
June 30, 2000 to June 29, 2001 3.00:1.00
June 30, 2001 and thereafter 2.50:1.00
SECTION 7.2. INDEBTEDNESS. The Borrower shall not, and shall not permit any
of its Subsidiaries to, create, incur, assume, suffer to exist or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness, other than:
67
(a) Indebtedness hereunder and under the other Loan Documents
(other than Hedging Agreements);
(b) Indebtedness outstanding on the Effective Date and set
forth on Schedule 7.2 hereto and any extension, refinancing or refunding
thereof, PROVIDED that the principal amount of the Indebtedness so extended,
refinanced or refunded shall not be increased above the principal amount thereof
outstanding immediately prior to such extension, refinancing or refunding, the
final maturity of the Indebtedness so extended, refinanced or refunded shall not
be changed to an earlier date, nor shall the amortization schedule be changed in
a manner which results in a shorter average life to maturity, nor shall the
terms (financial and otherwise) of such extension, refinancing or refunding be
less favorable to the Borrower or its Subsidiary, as the case may be;
(c) Indebtedness comprising Subordinated Debt, provided that
(i) the principal amount outstanding under the New Subordinated Credit Agreement
shall not exceed $60,000,000, (ii) all outstanding Subordinated Notes shall be
redeemed and repurchased on or before the Redemption Date and (iii) the
Subordinated Demand Note shall be repaid with proceeds of the first Advances of
the Revolving Loans or the Term Loans;
(d) [Intentionally Omitted]
(e) Indebtedness permitted under SECTION 7.6;
(f) Indebtedness with respect to Capital Leases and other
purchase money Indebtedness, in each case incurred to finance Capital
Expenditures permitted under Section 7.1, not in excess of $5,000,000 in the
aggregate at any one time outstanding; provided that any such Indebtedness shall
not exceed the lesser of the purchase price or the initial fair market value of
the asset so financed;
(g) in the case of the Borrower, Indebtedness to any of the
Restricted Subsidiaries and, in the case of any Subsidiary (other than AMF
Insurance Company of Bermuda Ltd.), Indebtedness to the Borrower or any of the
Restricted Subsidiaries (but only so long as such indebtedness is held by the
Borrower or a Restricted Subsidiary);
(h) Indebtedness of the Borrower in respect of Hedging
Agreements entered into with one or more Lenders on terms and conditions
satisfactory to the Agent; and
(i) Indebtedness of Minstar, Inc. to AMF Insurance Company of
Bermuda Ltd. described in SECTION 6.14;
(j) Indebtedness of the Borrower or Genmar Manufacturing in
respect of an industrial revenue bond financing of $5,000,000;
68
(k) the Earn-Out Consideration (as defined in the Horizon
Acquisition Agreement);
(l) [Intentionally omitted 1999];
(m) Indebtedness of Genmar Logic in respect of the Earn-Out
Consideration (as defined in the Logic Acquisition Agreement) not in excess of
$450,000;
(n) Indebtedness of Genmar Logic in respect of an unsecured
subordinated non-negotiable promissory note made payable to Logic in the
principal amount of $500,000 with annual interest thereon at a rate of 8%;
(o) Indebtedness of Genmar Logic in respect of advances made by
PT Sumberdaya to Logic, not in excess of $250,000 in the aggregate and assumed
by Genmar Logic as a trade account payable pursuant to Section 7.29 of the Logic
Acquisition Agreement; and
(p) Indebtedness of Genmar Logic in respect of advances made by
Brunswick Corporation to Logic, not in excess of $347,000 in the aggregate
pursuant to the Logic Acquisition Agreement.
(q) Indebtedness of Hatteras Disposition Corp. incurred
concurrently with the Hatteras Disposition, with respect to which neither the
Borrower nor any Subsidiary has any liability except to the extent permitted
under Section 7.6(f).
(r) Indebtedness of POS Acquisition incurred in connection with
the Pyramid Acquisition, provided such Indebtedness does not exceed $5,000,000.
(s) Indebtedness of the Borrower under the note required to be
delivered under the Pyramid Acquisition Agreement to pay the purchase price due
thereunder, provided that (i) a public Equity Issuance has not been completed by
the date required under the Pyramid Acquisition Agreement, (ii) such note is
subordinated to all obligations and indebtedness of the Borrower to the Agent,
the Issuer and the Lenders (including obligations and indebtedness hereunder and
under the New Subordinated Credit Agreement) on terms and conditions
satisfactory to the Agent and (iii) the principal amount of such note shall not
exceed the net amount of $11,000,000.
SECTION 7.3. LIENS. The Borrower shall not, and shall not permit any of
its Subsidiaries to, create, incur, assume or suffer to exist, directly or
indirectly, any Lien on any of its property now owned or hereafter acquired,
other than:
(a) Liens existing on the Effective Date and set forth on
Schedule 7.3 hereto ("Permitted Liens");
69
(b) Liens for taxes not yet due or which are being contested in
good faith by appropriate proceedings diligently conducted and with respect to
which adequate reserves are being maintained in accordance with GAAP;
(c) Statutory Liens of landlords, carriers, warehousemen,
mechanics, materialmen and other Liens imposed by law (other than any Lien
imposed by ERISA or an Environmental Lien) created in the ordinary course of
business for amounts not yet due or which are being contested in good faith by
appropriate proceedings diligently conducted and with respect to which adequate
bonds have been posted;
(d) Liens (other than any Lien imposed by ERISA or an
Environmental Lien) incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other types
of social security, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money);
(e) Easements, rights-of-way, zoning and similar restrictions
and other similar charges or encumbrances of record listed in Schedule B II of
the title insurance policies issued by the Title Company to the Agent in
connection with the Original Agreement and other such charges or encumbrances
not interfering with the ordinary conduct of the business of the Borrower or any
of its Subsidiaries and which do not detract materially 86 from the value of the
property to which they attach or impair materially the use thereof by the
Borrower or any of its Subsidiaries or materially adversely affect the security
interests of the Agent or the Lenders therein;
(f) Liens granted to the Agent for the benefit of the Lenders
pursuant to the Security Documents securing the Obligations;
(g) Liens created pursuant to Capital Leases and to secure
other purchase-money Indebtedness permitted pursuant to SECTION 7.2(f), PROVIDED
that such Liens are only in respect of the property or assets subject to, and
secure only, the respective Capital Lease or other purchase-money Indebtedness
and attach within sixty (60) days of the construction or acquisition of such
property or asset; and
(h) Liens securing progress payments made by customers of the
Hatteras Yacht division (i) for yachts of at least 50 feet in length with a
price of no less than $1,000,000, (ii) so long as the amount of the progress
payments at all times exceeds or is approximately comparable to the cost of time
and materials then completed on such yacht, and (iii) such Lien is solely on the
yacht for which such progress payments were made and does not extend to any
other asset or property of any Loan Party.
(i) Liens granted to the Subordinated Agent for the benefit of
the Subordinated Lenders under the Subordinated Collateral Documents securing
the
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Subordinated Loans and the other obligations thereunder; PROVIDED that all
such Liens are subordinate and junior to the Liens granted to secure the
Obligations pursuant to the Security Documents and are subject to the terms and
provisions of the Intercreditor Agreement.
(j) Purchase Money Liens existing on the date of the Horizon
Acquisition on certain equipment acquired in the Horizon Acquisition securing
Indebtedness in a principal amount not exceeding $75,000; and
(k) Liens on any or all of the Horizon IRB Assets existing on
the date of the Horizon Acquisition.
SECTION 7.4. RESTRICTION ON FUNDAMENTAL CHANGES.
(a) The Borrower shall not, and shall not permit any of its
Subsidiaries to, in a single transaction or through a series of related
transactions, enter into any merger or consolidation, or liquidate, wind-up or
dissolve (or suffer any liquidation or dissolution), discontinue its business or
convey, lease, sell, transfer or otherwise dispose of, in one transaction or
series of transactions, all or any substantial part of its business or property,
whether now or hereafter acquired, except (i) as otherwise permitted under
SECTION 7.5, (ii) any direct or indirect wholly-owned Subsidiary of the Borrower
may merge into or convey, sell, lease or transfer all or substantially all of
its assets to, the Borrower or any other direct or indirect wholly-owned
Subsidiary of the Borrower in a transaction in which no Person other than the
Borrower or its direct or indirect wholly-owned Subsidiaries receives any
consideration, PROVIDED that immediately following such transaction, the Agent
shall have a perfected security interest in all of the assets and properties
which were Collateral prior to such transaction, and such security interest in
such Collateral (other than the stock of a corporation which was not a survivor
of a merger) shall be of the same priority as existed prior to such transaction,
and the survivor of such transaction shall execute and deliver any Security
Documents requested by the Agent, and (iii) pursuant to any Permitted
Organizational Changes; PROVIDED that (x) no Permitted Organizational Change
shall take place during the continuance of a Default or an Event of Default, and
(y) prior to the occurrence of any Permitted Organizational Change, the Borrower
shall deliver to the Agent an officer's certificate in the form of Exhibit
7.4(a).
(b) Except as set forth in SECTION 7.8, the Borrower shall not,
and shall not permit any of its Subsidiaries to, (i) acquire by purchase or
otherwise any property or assets of, or stock or other evidence of beneficial
ownership of, any Person, except purchases of inventory, equipment, materials
and supplies in the ordinary course of the Borrower's or such Subsidiary's
business, (ii) during the continuance of any Default or Event of Default, create
any Subsidiary, or (iii) enter into any partnership or joint venture.
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(c) Borrower shall not, and shall not permit any of its
Subsidiaries to, amend its certificate of incorporation, by-laws or other
organizational documents, provided that so long as no Default or Event of
Default has occurred and is continuing, the Borrower and its Subsidiaries may
make changes to their respective certificates of incorporation and by-laws
other than (i) those changes which, individually or in the aggregate, could
have a Material Adverse Effect or (ii) those changes that would effect an
election pursuant to which an interest in a partnership or limited liability
company shall be a security governed by Article 8 of the Uniform Commercial
Code in any jurisdiction (A) that has adopted revisions to Article 8 of the
Uniform Commercial Code substantially consistent with the 1994 revisions to
Article 8 adopted by the American Law Institute and the National Conference
of Commissioners on Uniform State Laws and (B) the laws of which may be
applicable, from time to time, to the issues of perfection, the effect of
perfection or non-perfection and the priority of a security interest in an
interest in a partnership or limited liability company (except to the extent
the Borrower shall have delivered, or shall have caused to be delivered to
the Agent, duly executed stock powers in blank with respect to such
partnership or membership interests).
SECTION 7.5. SALE OF ASSETS. The Borrower shall not, and shall not
permit any of its Subsidiaries to, convey, lease, sell, transfer or otherwise
dispose of (or agree to do so at any future time) all or any part of its
property or assets, except (a) sales of inventory in the ordinary course of
business, (b) sales of property which is uneconomic, obsolete or no longer
useful in its business provided that the aggregate net book value of all
property so sold does not exceed $4,000,000 per fiscal year; PROVIDED, HOWEVER,
that the Borrower or such Subsidiary, as the case may be, may only make sales
permitted pursuant to clause (b) above if it receives consideration at the time
of such sale at least equal to the Fair Market Value of the property sold, and
at least 50% of the consideration therefor received by the Borrower or such
Subsidiary, as the case may be, is in the form of cash; PROVIDED, FURTHER, that
the amount of (i) any liabilities of the Borrower or such Subsidiary (as shown
on the Borrower's or such Subsidiary's most recent balance sheet or in the notes
thereto), as the case may be, that are assumed by the purchaser in such
transactions (other than securities which are subordinated to the Obligations)
and (ii) any cash equivalents, notes or other obligations received by the
Borrower or such Subsidiary, as the case may be, from such transferee that are
immediately (and in any event within ninety (90) days) converted by the Borrower
or such Subsidiary, as the case may be, into cash, shall be deemed to be cash
for purposes of this Section, (c) in addition to the sales permitted pursuant to
clause (b) above, the sales of assets listed in Schedule 7.5(c) hereof, (d)
Intentionally Omitted - 1999, (e) subject in each case to the review and written
approval of the Agent (which approval shall be in the Agent's sole discretion)
leases of Real Property during such periods that such Real Property is not being
used in the business of the Borrower, PROVIDED, HOWEVER, that any such lease
shall not be for a period longer than 24 months, and (f) a sale, transfer or
disposition of the Hatteras Business pursuant to the Hatteras Internal Transfer
and the Hatteras Disposition.
72
SECTION 7.6. CONTINGENT OBLIGATIONS. The Borrower shall not, and
shall not permit any of its Subsidiaries to, create or become or be liable
with respect to any Contingent Obligation, except:
(a) pursuant to the Guaranty or any other Transaction
Document;
(b) obligations (other than any such obligations permitted
pursuant to Sections 7.6(d) and 7.6(e))incurred by dealers of pleasure boats
selling products of the Borrower or one or more of its Subsidiaries in the
ordinary course of business in an aggregate amount at any one time
outstanding not to exceed $5,000,000;
(c) Contingent Obligations which were in existence on the
Effective Date which are set forth on Schedule 7.6(c) hereof, and
continuations or replacements of any such Contingent Obligation so long as
the amount in respect of any such Contingent Obligation so continued or
replaced has not been and will not be increased, or which are either (i)
disclosed in the audited financial statements of the Borrower and its
consolidated Subsidiaries dated as of June 30, 1998, (ii) disclosed in the
internally prepared financial statements of the Borrower and its Subsidiaries
for the eleven month period ending May 31, 1999 or (iii) are immaterial to
the Borrower and its Subsidiaries taken as a whole or to such Subsidiary;
(d) [Intentionally Omitted - 1999];
(e) notwithstanding subsections (a) through (c) of this
Section 7.6, solely to permit the Recourse Obligations of the Borrower and
any of its Subsidiaries in connection with the Floor Plan Financing, pursuant
to the terms of the Repurchase Agreement, PROVIDED that the Recourse
Obligations shall not exceed an aggregate amount of $20,000,000 for any
annual period of July 1 through June 30, of which an aggregate amount not to
exceed $20,000,000 during each such annual period may constitute obligations
on the part of the Borrower and any of its Subsidiaries to repurchase goods
which were financed by the financial institutions pursuant to the Floor Plan
Financing and an aggregate amount not to exceed $3,000,000 during each such
annual period may constitute indemnity payments by the Borrower and any of
its Subsidiaries relating to losses incurred by the financial institutions
resulting from the financial institutions' financing or refinancing of goods
to Dealers; and
(f) Contingent Obligations not to exceed $5,000,000 in the
aggregate in respect of indebtedness incurred by Hatteras Disposition Corp.,
provided that, (i) the indebtedness in respect of which such Contingent
Obligations have been incurred does not have a term of more than five years,
(ii) concurrent with the incurrence of such Contingent Obligations, the
Hatteras Disposition to the Existing Shareholders shall have been
consummated, (iii) a public Equity Issuance shall have been consummated or
will be consummated within one (1) Business Day thereafter, and (iv) the
Borrower and its Subsidiaries shall have been irrevocably released from any
and all liabilities and obligations with respect to the Hatteras Division.
73
SECTION 7.7. DIVIDENDS. The Borrower shall not, and shall not permit any
of its Subsidiaries to, declare or pay any dividends (other than dividends
payable solely in common stock), or return any capital to, its stockholders or
authorize or make any other distribution, payment or delivery of property or
cash to its stockholders as such, or redeem, retire, purchase or otherwise
acquire, directly or indirectly, any shares of any class of its Capital Stock
now or hereafter outstanding (or any options or warrants issued with respect to
its Capital Stock), or set aside any funds for any of the foregoing purposes
(all the foregoing "DIVIDENDS"), except (1) that Dividends may be made to the
Borrower or any of its Subsidiaries by any of its wholly-owned Subsidiaries and
(2) to the extent that the Hatteras Disposition is treated as or is deemed to be
a Dividend, the Hatteras Disposition may be made.
SECTION 7.8. ADVANCES, INVESTMENTS AND REVOLVING LOANS. The Borrower
shall not, and shall not permit any of its Subsidiaries to, lend money or credit
or make advances to, any Person, or directly or indirectly purchase or acquire
any stock, obligations or securities of, or any other interest in, or make any
capital contribution to any Person, except that the following shall be
permitted:
(a) accounts receivable owned by the Borrower and its
Subsidiaries, if created in the ordinary course of the business of the Borrower
and its Subsidiaries and payable or dischargeable in accordance with customary
trade terms;
(b) loans and advances to the Borrower by any of its
Subsidiaries and capital contributions by the Borrower or any Subsidiary to any
Restricted Subsidiary;
(c) investments existing as of the Effective Date and set forth
on Schedule 7.8 hereto;
(d) investments pursuant to any Permitted Organizational
Changes; PROVIDED that (x) no Permitted Organizational Change shall take place
during the continuance of a Default or an Event of Default, and (y) prior to the
occurrence of any Permitted Organizational Change, the Borrower shall deliver to
the Agent an officer's certificate in the form of Exhibit 7.4(a);
(e) Contingent Obligations permitted pursuant to Section 7.6;
(f) promissory notes received in connection with sales of
assets of the Borrower or its Subsidiaries sold pursuant to Section 7.5 (b) or
(c), PROVIDED that such promissory notes are secured with the assets so sold;
(g) [Intentionally omitted];
(h) up to an aggregate investment of $5,000,000 in connection
with minority interests in foreign companies, joint ventures or partnerships on
terms acceptable to the Agent and the Required Lenders;
74
(i) [Intentionally omitted];
(j) loans to directors and employees of the Borrower or its
Subsidiaries in an aggregate amount outstanding at any time not to exceed
$500,000;
(k) the Borrower and its Subsidiaries may acquire and hold Cash
Equivalents;
(l) [Intentionally omitted - 1999];
(m) [Intentionally omitted];
(n) the Recourse Obligations of the Borrower and its
Subsidiaries in connection with the Floor Plan Financing pursuant to the terms
of a Repurchase Agreement, to the extent permitted under Section 7.6(e); and
(o) the Pyramid Acquisition, provided the consideration
therefor is paid by the Borrower and its Subsidiaries solely in Capital Stock or
by Indebtedness to the extent and on the conditions set forth in Section 7.2(s),
or, if the Pyramid Acquisition is not closed on or before March 31, 2000,
investments in the senior subordinated note required under Section 6.10 of the
Pyramid Acquisition Agreement.
SECTION 7.9. TRANSACTIONS WITH AFFILIATES. Borrower shall not, directly
or indirectly, enter into any transaction or series of related transactions with
or for the benefit of any of its Affiliates, except on an arm's-length basis
and, except for sales of Inventory in the ordinary course of business, (x)(i) in
the case of any such transactions in which the aggregate rental value,
remuneration or other consideration (including the value of a loan) together
with the aggregate rental value, remuneration or other consideration (including
the value of a loan) of all such other transactions consummated in the year
during which such transaction is proposed to be consummated, exceeds $500,000,
the board of directors and the independent directors of the Borrower that are
disinterested, each have (by a majority vote) determined in good faith that the
aggregate rental value, remuneration or other consideration (including the value
of any loan) inuring to the benefit of such Affiliates from any such transaction
is not greater than that which would be charged to or extended by the Borrower
or its Subsidiary, as the case may be, on an arm's-length basis for similar
properties, assets, rights, goods or services by or to a Person not affiliated
with the Borrower or its Subsidiaries, as the case may be, and (ii) in the case
of any such transaction in which the aggregate rental value, remuneration or
other consideration (including the value of any loan), together with the
aggregate rental value, remuneration or other consideration (including the value
of any loan) of all such other transactions consummated in the year during which
such transaction proposed to be consummated, exceeds $5,000,000, the board of
directors of the Borrower and the independent directors of the Borrower that are
disinterested (each a majority vote), and a nationally recognized investment
banking firm, unaffiliated with the Borrower and the Affiliate which is party to
such transaction has determined that the
75
aggregate rental price, remuneration or other consideration (including the
value of a loan) inuring to the benefit of such Affiliate from any such
transaction is not greater than that which would be charged to or extended by
the Borrower or its Subsidiary, as the case may be, on an arm's-length basis
for similar properties, assets, rights, goods or services by or to a Person
not affiliated with the Borrower or its Subsidiaries, as the case may be, and
that (y) in the case of all such transactions referred to in clauses (x)(i)
and (ii) are entered into in good faith. Any transaction required to be
approved by independent directors pursuant to this SECTION shall be approved
by at least one such independent director; PROVIDED that the foregoing
restrictions shall not apply to the payment of an annual fee to Xxxxxx
Management Corporation for rendering of management consulting and financial
services to the Borrower and its Subsidiaries in an aggregate amount not in
excess of $2,250,000 and except for repurchases of the Subordinated Notes
from Affiliates at par or less than par, provided such repurchases of
Subordinated Notes would be permitted under Section 7.10 hereof.
SECTION 7.10. LIMITATION ON VOLUNTARY PAYMENTS AND MODIFICATIONS OF
CERTAIN DOCUMENTS. The Borrower shall not, and shall not permit any of its
Subsidiaries to, (a) make any sinking fund payment or voluntary or optional
payment or prepayment on or redemption or acquisition for value of (including,
without limitation, by way of depositing with the trustee with respect thereto
money or securities before due for the purpose of paying when due) or exchange
of any Subordinated Debt or make any payment in respect of the Subordinated Debt
(including, without limitation, payments in respect of options to repurchase any
Subordinated Debt), or (b) amend, modify or waive, or permit the amendment,
modification or waiver of, any provision of any Transaction Document (other than
the Loan Documents), including without limitation, the New Subordinated Credit
Agreement, the Subordinated Loan Documents, the Subordinated Collateral
Documents or any other document or agreement relating thereto; PROVIDED that, in
accordance with this Agreement, the Borrower may, with the proceeds of the
Revolving Loans and/or the Term Loans (i) repay and redeem all outstanding
Subordinated Notes and (ii) repay the Subordinated Demand Note.
SECTION 7.11. CHANGES IN BUSINESS. The Borrower shall not, and shall not
permit any of its Subsidiaries to, engage in any business other than the
manufacturing or selling of pleasure boats or in lines of business reasonably
related thereto.
SECTION 7.12. CERTAIN RESTRICTIONS. The Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, create or otherwise
cause or suffer to exist or become effective any consensual encumbrance or
restriction, or enter into any agreement (other than the Transaction Documents
as in effect on the Effective Date and other than the Subordinated Credit
Facility Documents as in effect on the Effective Date), which restricts the
ability of the Borrower or any of its Subsidiaries to (a) enter into amendments,
modifications or waivers of the Loan Documents, (b) sell, transfer or otherwise
dispose of its assets, (c) create, incur, assume or suffer to exist any Lien
upon any of its property, (d) create, incur, assume, suffer to exist or
otherwise become liable
76
with respect to any Indebtedness, or (e) pay any Dividend, provided that
Capital Leases or agreements governing purchase money Indebtedness which
contain restrictions of the types referred to in clauses (b) or (c) with
respect to the property covered thereby shall be permitted.
SECTION 7.13. LEASE PAYMENTS. The Borrower shall not, and shall not
permit any of its Subsidiaries to, incur, assume or suffer to exist, any
obligation for payments under Capital Leases and operating leases whether for
real or personal or mixed property (including, without limitation, rental
payments and payments of taxes thereunder), except that the Borrower and its
Subsidiaries may incur rental payment obligations not to exceed $6,000,000 in
the aggregate during each fiscal year of the Borrower.
SECTION 7.14. SALES AND LEASEBACKS. From and after the date hereof, the
Borrower shall not, and shall not permit any of its Subsidiaries to, become
liable, directly or indirectly, with respect to any lease (other than any such
lease entered into in connection with a sale of any real property permitted
hereunder, which lease is necessary or desirable to wind down the operations of
such property so sold), whether an operating lease or a Capital Lease, of any
property (whether real or personal or mixed) whether now owned or hereafter
acquired, (i) which the Borrower or such Subsidiary has sold or transferred or
is to sell or transfer to the purchaser thereof, or (ii) which the Borrower or
such Subsidiary intends to use for substantially the same purposes as any other
property which has been or is to be sold or transferred by the Borrower or such
Subsidiary to the purchaser thereof in connection with such Lease.
SECTION 7.15. PLANS. The Borrower shall not, nor shall it permit any
member of its ERISA Controlled Group to, take any action which would increase
the aggregate present value of the Unfunded Benefit Liabilities under all Plans
to an amount in excess of $250,000.
SECTION 7.16. FISCAL YEAR; FISCAL QUARTER. The Borrower shall not, and
shall not permit any of its Subsidiaries to, change its fiscal year or any of
its fiscal quarters.
SECTION 7.17. DEALER ACCOUNTS. The Borrower shall not, nor shall it
permit any of its Subsidiaries to, have in the aggregate Dealer Accounts, or any
other Accounts with payment terms of greater than 12 months, in excess of
$2,500,000 outstanding at any time from the Effective Date through and including
the Final Maturity Date.
SECTION 7.18. INACTIVE SUBSIDIARIES. The Borrower shall not permit any of
the Designated Subsidiaries from owning or acquiring any property or assets
other than such property or assets owned as of the Effective Date, provided that
the Permitted Organizational Changes shall be permitted.
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SECTION 8. EVENTS OF DEFAULT
SECTION 8.1. EVENTS OF DEFAULT. Each of the following events, acts,
occurrences or conditions shall constitute an Event of Default under this
Agreement, regardless of whether such event, act, occurrence or condition is
voluntary or involuntary or results from the operation of law or pursuant to
or as a result of compliance by any Person with any judgment, decree, order,
rule or regulation of any court or administrative or governmental body:
(a) FAILURE TO MAKE PAYMENTS. The Borrower shall (i) default
in the payment when due of any principal of the Loans or LC Disbursement or
(ii) default and such default shall continue unremedied for two or more
Business Days, in the payment when due of any interest on the Loans or in the
payment when due of any Fees or any other amounts owing hereunder.
(b) BREACH OF REPRESENTATION OR WARRANTY. Any representation
or warranty made by any Loan Party herein or in any other Loan Document or in
any certificate or statement delivered pursuant hereto or thereto shall prove
to be false or misleading on the date as of which made or deemed made.
(c) BREACH OF COVENANTS. (i) The Borrower shall fail to
perform or observe any agreement, covenant or obligation arising under
SECTIONS 6.1(g), 6.5, 6.13, 6.19 OR 7.1 THROUGH 7.18, inclusive; (ii) the
Borrower shall fail to perform or observe any agreement, covenant or
obligation arising under this Agreement (except those described in
subsections (a), (b) and (c)(i) above), and such failure shall continue for
30 days; or (iii) any Loan Party shall fail to perform or observe any
agreement, covenant or obligation arising under any provision of the Loan
Documents other than this Agreement, which failure shall continue after the
end of the applicable grace period, if any, provided therein.
(d) DEFAULT UNDER OTHER AGREEMENTS. The Borrower or any of
its Subsidiaries shall default in the payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) of any
amount owing in respect of any Indebtedness (other than the Obligations) in
the aggregate principal amount in excess of $500,000; or the Borrower or any
of its Subsidiaries shall default in the performance or observance of any
obligation or condition with respect to any such Indebtedness or any other
event shall occur or condition exist, if the effect of such default, event or
condition is to accelerate the maturity of any such Indebtedness or to permit
(without regard to any required notice or lapse of time) the holder or
holders thereof, or any trustee or agent for such holders, to accelerate the
maturity of any such Indebtedness, or any such Indebtedness shall become or
be declared to be due and payable prior to its stated maturity other than as
a result of a regularly scheduled payment.
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(e) BANKRUPTCY, ETC. (i) Any Loan Party shall commence a
voluntary case concerning itself under the Bankruptcy Code; or (ii) an
involuntary case is commenced against any Loan Party and the petition is not
controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case; or (iii) a custodian (as defined in the Bankruptcy
Code) is appointed for, or takes charge of, all or substantially all of the
property of any Loan Party or any Loan Party commences any other proceedings
under any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to any Loan Party or there is
commenced against any Loan Party any such proceeding which remains
undismissed for a period of 60 days; or (iv) any order of relief or other
order approving any such case or proceeding is entered; or (v) any Loan Party
is adjudicated insolvent or bankrupt; or (vi) any Loan Party suffers any
appointment of any custodian or the like for it or any substantial part of
its property to continue undischarged or unstayed for a period of 60 days; or
(vii) any Loan Party makes a general assignment for the benefit of creditors;
or (viii) any Loan Party shall fail to pay, or shall state that it is unable
to pay, or shall be unable to pay, its debts generally as they become due; or
(ix) any Loan Party shall call a meeting of its creditors with a view to
arranging a composition or adjustment of its debts; or (x) any Loan Party
shall by any act or failure to act consent to, approve of or acquiesce in any
of the foregoing; or (xi) any corporate action is taken by any Loan Party for
the purpose of effecting any of the foregoing.
(f) SUBORDINATED DEBT FINANCING DOCUMENTS. The Borrower or
any of its Subsidiaries (i) does not redeem and repay all outstanding
Subordinated Notes on or before the Redemption Date, (ii) does not pay when
due (x) whether at maturity, upon redemption or otherwise, any payment of
principal, or premium, due under the New Subordinated Credit Agreement or (y)
any interest due under the New Subordinated Credit Agreement, and such
interest remains unpaid for a period of ten (10) Business Days; or (ii)
denies or disaffirms any of its obligations under any Subordinated Debt
Financing Document.
(g) RESTRICTED SUBSIDIARIES. Any Person becomes a
"Restricted Subsidiary", as such term is defined in the Subordinated Debt
Financing Documents, unless such Person is also a Guarantor.
(h) ERISA. (i) Any Termination Event shall occur, or (ii)
any ERISA Plan shall incur an "accumulated funding deficiency" (as defined in
SECTION 412 of the Code or Section 302 of ERISA), whether or not waived or
(iii) the Borrower or a member of its ERISA Controlled Group shall have
engaged in a transaction which is prohibited under Section 4975 of the Code
or Section 406 of ERISA which could reasonably be expected to result in the
imposition of liability in excess of $2,000,000 on the Borrower or any member
of its ERISA Controlled Group, or (iv) the Borrower or any member of its
ERISA Controlled Group shall fail to pay when due an amount which it shall
have become liable to pay to the PBGC, any Plan or a trust established under
Title IV of
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ERISA, or (v) a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that an ERISA Plan must be
terminated or have a trustee appointed to administer any ERISA Plan, or (vi)
the Borrower or a member of its ERISA Controlled Group suffers a partial or
complete withdrawal from a Multiemployer Plan or is in "default" (as defined
in SECTION 4219(c)(5) of ERISA) with respect to payments to a Multiemployer
Plan, or (vii) a proceeding shall be instituted against the Borrower or any
member of its ERISA Controlled Group to enforce Section 515 of ERISA, or
(viii) any other event or condition shall occur or exist with respect to any
Plan which could subject the Borrower or any member of its ERISA Controlled
Group to any tax, penalty or other liability in excess of $2,000,000.
(i) SECURITY DOCUMENTS. Any of the Security Documents shall
for any reason cease to be in full force and effect, or shall cease to give
the Agent the Liens, rights, powers and privileges purported to be created
thereby including, without limitation, a perfected first priority security
interest in, and Lien on, all of the Collateral in accordance with the terms
thereof other than as a result of a release of Collateral by the Agent
pursuant to the terms of this Agreement and the Security Documents.
(j) GUARANTY. Any Guaranty or any provision thereof shall
cease to be in full force and effect, or the Guarantor or any Person acting
by or on behalf of the Guarantor shall deny or disaffirm all or any portion
of the Guarantor's obligations under such Guaranty.
(k) CHANGE OF CONTROL. (i) [Intentionally Omitted - 1999],
(ii) the Existing Shareholders shall in the aggregate cease to beneficially
own and control at least 50.1%, prior to a public Equity Issuance, and,
thereafter, at least 30%, of the issued and outstanding shares of each class
of Capital Stock of the Borrower entitled (without regard to the occurrence
of any contingency) to vote for the election of members of the board of
directors of the Borrower, (iii) so long as the applicable Subordinated Debt
is outstanding, a "Change of Control" as defined in any of the Subordinated
Debt Financing Documents shall occur or (iv) any party other than any of the
Existing Shareholders shall control any class of Capital Stock of the
Borrower entitled to vote for the election of the members of the Board of
Directors of the Borrower.
(l) JUDGMENTS. One or more judgments or decrees in an
aggregate amount (i) in excess of $250,000 shall be entered by a court or
courts of competent jurisdiction against the Loan Parties (other than any
judgment as to which, and only to the extent, a reputable insurance company
has acknowledged coverage of such claim in writing) and (x) any such
judgments or decrees shall not be stayed, discharged, paid, bonded or vacated
within 30 days or (y) enforcement proceedings shall be commenced by any
creditor on any such judgments or decrees or (ii) in excess of $5,000,000 and
such judgment or judgments shall not be stayed, discharged or bonded within
60 days.
(m) ENVIRONMENTAL MATTERS. (i) Any Environmental Claim shall
have been asserted against any Loan Party which, if determined adversely,
could have a
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Material Adverse Effect, (ii) any release, emission, discharge or disposal of
any Material of Environmental Concern shall have occurred, and such event
could form the basis of an Environmental Claim against any Loan Party which,
if determined adversely, could have a Material Adverse Effect, or (iii) any
Loan Party shall have failed to obtain any Environmental Approval necessary
for the management, use, control, ownership, or operation of its business,
property or assets or any such Environmental Approval shall be revoked,
terminated, or otherwise cease to be in full force and effect, in each case,
if the existence of such condition could have a Material Adverse Effect.
(n) USE OF PROCEEDS. The Borrower shall use the proceeds of
any Loan for a purpose other than that set forth in SECTION 2.22.
(o) LICENSES AND PERMITS. Any Loan Party shall lose, or
shall fail to obtain or maintain, any necessary license or permit, which loss
or failure to maintain would, in each case, have a Material Adverse Effect.
(p) NEGATIVE PLEDGE. Any Person controlling the Borrower
shall enter into any agreement (other than the Transaction Documents as in
effect on the Effective Date) which restricts the ability of the Borrower or
any of its Subsidiaries to (i) enter into amendments, modifications or
waivers of the Loan Documents, (ii) sell, transfer or otherwise dispose of
its assets, (iii) create, incur, assume or suffer to exist any Lien upon any
of its property, (iv) create, incur, assume, suffer to exist or otherwise
become liable with respect to any Indebtedness, or (v) except with respect to
the Borrower, pay any Dividend, provided that Capital Leases or agreements
governing purchase money Indebtedness which contain restrictions of the types
referred to in clauses (ii) or (iii) with respect to the property covered
thereby shall be permitted.
(q) MATERIAL ADVERSE CHANGE. The occurrence of any material
adverse change in the financial condition, business, properties, prospects or
operations of the Borrower and its Subsidiaries on a consolidated basis.
(r) EVENT OF DEFAULT UNDER NEW SUBORDINATED CREDIT
AGREEMENT. An Event of Default (or similar event, howsoever phrased) shall
have occurred under and as defined in the New Subordinated Credit Agreement
or the Subordinated Collateral Documents.
SECTION 8.2. RIGHTS AND REMEDIES. Upon the occurrence of any Event of
Default described in SECTION 8.1(e), the Commitments shall automatically and
immediately terminate and the unpaid principal amount of and any and all
accrued interest on the Revolving Loans, the Term Loans and any and all
accrued Fees and other Obligations shall automatically become immediately due
and payable, with all additional interest from time to time accrued thereon
and without presentation, demand, or protest or other requirements of any
kind (including, without limitation, valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and notice of
acceleration), all of which are hereby expressly waived by the Borrower, and
the
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obligation of each Lender to make any Revolving Loan, or the Term Loans or
issue any Standby Letter of Credit hereunder shall thereupon terminate; and
upon the occurrence and during the continuance of any other Event of Default,
the Agent shall at the request, or may with the consent, of the Required
Lenders, by written notice to the Borrower, (i) declare that the Commitments
are terminated, whereupon the Commitments and the obligation of each Lender
to make any Revolving Loan, or the Term Loans or issue any Standby Letter of
Credit hereunder shall immediately terminate, (ii) declare the unpaid
principal amount of and any and all accrued and unpaid interest on the
Revolving Loans, and the Term Loans and any and all accrued Fees and other
Obligations to be, and the same shall thereupon be, immediately due and
payable with all additional interest from time to time accrued thereon and
without presentation, demand, or protest or other requirements of any kind
(including, without limitation, valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and notice of
acceleration), all of which are hereby expressly waived by the Borrower,
(iii) require cash collateral as contemplated by SECTION 3.5 hereof and (iv)
exercise any remedies available under any Loan Document or otherwise.
SECTION 9. THE AGENT
SECTION 9.1. APPOINTMENT. Each Lender hereby irrevocably designates
and appoints The Bank of New York as the Agent of such Lender under this
Agreement and each other Loan Document, and each such Lender irrevocably
authorizes The Bank of New York as the Agent for such Lender, to take such
action on its behalf under the provisions of this Agreement and each other
Loan Document and to exercise such powers and perform such duties as are
expressly delegated to the Agent by the terms of this Agreement and each
other Loan Document, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere
in this Agreement, the Agent shall not 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 on the part of the Agent shall be read into this
Agreement or otherwise exist against the Agent. The provisions of this
SECTION 9 are solely for the benefit of the Agent and the Lenders and no Loan
Party shall have any rights as a third party beneficiary or otherwise under
any of the provisions hereof. In performing its functions and duties
hereunder and under the other Loan Documents, the Agent shall act solely as
the agent of the Lenders and does not assume nor shall be deemed to have
assumed any obligation or relationship of trust or agency with or for any
Loan Party or any of their respective successors and assigns.
SECTION 9.2. DELEGATION OF DUTIES. The Agent may execute any of its
duties under this Agreement or the other Loan Documents by or through agents
or attorneys-in-fact and shall be entitled to advice of counsel concerning
all matters pertaining to such duties. The Agent shall not be responsible for
the negligence or misconduct of any agents or attorneys-in-fact selected by
it with reasonable care.
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SECTION 9.3. EXCULPATORY PROVISIONS. The Agent shall not be (i)
liable for any action lawfully taken or omitted to be taken by it or any
Person described in SECTION 9.2 under or in connection with this Agreement or
any other Loan Document (except for its or such Person's own gross negligence
or willful misconduct), or (ii) responsible in any manner to any of the
Lenders for any recitals, statements, representations or warranties made by
any Loan Party contained in this Agreement or any other Loan Document or in
any certificate, report, statement or other document referred to or provided
for in, or received under or in connection with, this Agreement or any other
Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement, or any other Loan Document
or for any failure of any Loan Party to perform its obligations hereunder or
thereunder. Without limiting the duties and responsibilities of the Agent set
forth in the Loan Documents, the Agent shall not be under any obligation to
103 any Lender to ascertain or to inquire as to the observance or performance
of any of the agreements of any Loan Party contained in, or conditions of,
this Agreement or any other Loan Document, or to inspect the properties,
books or records of any Loan Party. This SECTION is intended solely to govern
the relationship between the Agent, on the one hand, and the Lenders, on the
other.
SECTION 9.4. RELIANCE BY AGENT. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any Revolving Note, any Term
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 any Loan Party), independent accountants and other experts
selected by the Agent. The Agent may deem and treat the payee of any
Revolving Note or any Term Note as the owner thereof for all purposes unless
the Agent shall have received an executed Transfer Supplement in respect
thereof. The Agent shall be fully justified in failing or refusing to take
any action under this Agreement or any other Loan Document unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it
by reason of taking or continuing to take any such action. The Agent shall in
all cases be fully protected in acting, or in refraining from acting, under
this Agreement and the other Loan Documents in accordance with a request of
the Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders
of the Revolving Notes and all future holders of the Term Notes.
SECTION 9.5. NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
unless the Agent has received notice from a Lender or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating
that such notice is a "notice of default." In the event that the Agent
receives such a notice, the Agent shall promptly give notice 104 thereof to
the Lenders. The Agent shall take such action with respect to such
83
Default or Event of Default as shall be directed by the Required Lenders;
PROVIDED that unless and until the Agent shall have received such directions,
the Agent may (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
the Agent shall deem advisable and in the best interests of the Lenders.
SECTION 9.6. NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender
expressly acknowledges that neither the Agent, nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates has made any
representations or warranties to it and that no act by the Agent hereafter
taken, including, without limitation, any review of the affairs of any Loan
Party, shall be deemed to constitute any representation or warranty by the
Agent. Each Lender represents and warrants to the Agent that it has,
independently and without reliance upon the Agent or any other Lender and
based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, operations,
property, prospects, financial and other conditions and creditworthiness of
the Loan Parties and made its own decision to make its Loans hereunder and
enter into this Agreement. Each Lender also represents that it will,
independently and without reliance upon the Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, prospects, financial and other condition and
creditworthiness of the Loan Parties. Except for notices, reports and other
documents expressly required under the Loan Documents to be furnished to the
Lenders by the Agent, the Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the
business, operations, property, prospects, financial and other condition or
creditworthiness of the Loan Parties which may come into the possession of
the Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
SECTION 9.7. INDEMNIFICATION. The Lenders agree to indemnify the
Agent, the Arranger and their respective officers, directors, employees,
representatives and agents (to the extent not reimbursed by the Loan Parties
and without limiting the obligation of the Loan Parties to do so), ratably
according to their Pro Rata Shares, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever (including,
without limitation, the fees and disbursements of counsel for the Agent, the
Arranger or such Person in connection with any investigative, administrative
or judicial proceeding commenced or threatened, whether or not the Agent, the
Arranger or such Person shall be designated a party thereto) that may at any
time (including, without limitation, at any time following the payment of the
Obligations) be imposed on, incurred by or asserted against the Agent, the
Arranger or such Person as a result of, or arising out of, or in any way
related to or by reason of, the execution, delivery or performance of any
Loan Document or any other Transaction Document (but excluding any such
liabilities,
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obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from the gross negligence or
willful misconduct of the Agent, the Arranger or such Person as finally
determined by a court of competent jurisdiction and excluding the actions of
the Agent when acting solely in its capacity as a Lender).
SECTION 9.8. AGENT IN ITS INDIVIDUAL CAPACITY. The Agent and its
affiliates may make loans to, accept deposits from and generally engage in
any kind of business with the Loan Parties as though the Agent were not the
Agent hereunder. With respect to Loans made or renewed by it and any
Revolving Note or Term Note issued to it, the Agent shall have the same
rights and powers under this Agreement as any Lender and may exercise the
same as though it were not the Agent, and the terms "Lender" and "Lenders"
shall include the Agent in its individual capacity.
SECTION 9.9. SUCCESSOR AGENT. The Agent may resign as Agent upon 30
days' notice to the Borrower and the Lenders. If the Agent shall resign as
Agent under this Agreement, then the Required Lenders during such 30-day
period shall appoint from among the Lenders a successor agent, whereupon such
successor agent, upon its acceptance, shall succeed to the rights, powers and
duties of the Agent and the term "Agent" shall mean such successor agent,
effective upon its appointment, and the former Agent's rights, powers and
duties as Agent 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 Agreement or
any holders of the Revolving Notes or any holders of the Term Notes. After
any retiring Agent's resignation hereunder as Agent, the provisions of this
SECTION 9 and SECTION 10.1 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement.
SECTION 10. MISCELLANEOUS
SECTION 10.1. PAYMENT OF EXPENSES, INDEMNITY, ETC. The Borrower shall:
(a) whether or not the transactions hereby contemplated are
consummated, pay all reasonable out-of-pocket costs and expenses of the Agent
in connection with the negotiation, preparation, execution and delivery of
the Loan Documents and the documents and instruments referred to therein, the
creation, perfection or protection of the Agent's Liens in the Collateral
(including, without limitation, fees and expenses for title and lien searches
and filing and recording fees), and any amendment, waiver or consent relating
to any of the Loan Documents (including, without limitation, as to, each of
the foregoing, the reasonable fees and disbursements of Xxxxx, Xxxxxx &
Xxxxxx, LLP, special counsel to the Agent and any other attorneys retained by
the Agent) and of the Agent and each Lender in connection with the
preservation of rights under, and enforcement of, the Loan Documents and the
documents and instruments referred to therein or in connection with any
restructuring or
85
rescheduling of the Obligations (including, without limitation, the
reasonable fees and disbursements of counsel for the Agent and for each of
the Lenders);
(b) pay the fees and disbursements of any independent
accountant or consultant retained by the Agent to audit the composition of
the Accounts and Inventory which are part of the Borrowing Base and to
prepare and deliver to the Agent such reports and information as the Agent
requests with respect thereto;
(c) pay, and hold the Agent and each of the Lenders harmless
from and against, any and all present and future stamp, excise and other
similar taxes with respect to the foregoing matters and hold the Agent and
each Lender harmless from and against any and all liabilities with respect to
or resulting from any delay or omission (other than to the extent
attributable to such Lender) to pay such taxes; and
(d) indemnify the Agent, the Arranger, the Issuing Bank and
each Lender, and their respective officers, directors, employees,
representatives and agents (each an "INDEMNITEE") from, and hold each of them
harmless against, any and all losses, liabilities, claims, damages, expenses,
obligations, penalties, actions, judgments, suits, costs or disbursements of
any kind or nature whatsoever (including, without limitation, the fees and
disbursements of counsel for such Indemnitee in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not such Indemnitee shall be designated a party thereto, but
excluding any tax or an increased tax on the net income of such Lender) that
may at any time (including, without limitation, at any time following the
payment of the Obligations) be imposed on, asserted against or incurred by
any Indemnitee as a result of, or arising out of, or in any way related to or
by reason of, (i) any of the Transactions or the execution, delivery or
performance of any Loan Document or any other Transaction Document, (ii) any
violation by any Loan Party of any applicable Environmental Law, (iii) any
Environmental Claim arising out of the management, use, control, ownership or
operation of property or assets by any of the Loan Parties, including,
without limitation, all on-site and off-site activities involving Materials
of Environmental Concern, (iv) the breach of any environmental representation
or warranty set forth in Section 5.18, (v) the grant to the Agent, the
Collateral Agent and the Lenders of any Lien in any property or assets of any
of the Loan Parties or any stock or other equity interest in any of the Loan
Parties, and (vi) the exercise by the Agent and the Lenders of their rights
and remedies (including, without limitation, foreclosure) under any
agreements creating any such Lien (but excluding, in each case, as to any
Indemnitee, any such losses, liabilities, claims, damages, expenses,
obligations, penalties, actions, judgments, suits, costs or disbursements
incurred solely by reason of the gross negligence or willful misconduct of
such Indemnitee as finally determined by a court of competent jurisdiction).
The Borrower's obligations under this Section shall survive the termination
of this Agreement and the payment of the Obligations.
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SECTION 10.2. RIGHT OF SETOFF. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and during the continuance
of any Event of Default, each Lender is hereby authorized at any time or from
time to time, without presentment, demand, protest or other notice of any
kind to any Loan Party or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and apply any and all
deposits (general or special, time or demand, provisional or final) and any
other indebtedness at any time held or owing by such Lender (including,
without limitation, by branches and agencies of such Lender wherever located)
to or for the credit or the account of any Loan Party against and on account
of the Obligations of the Loan Parties to such Lender under this Agreement or
under any of the other Loan Documents, including, without limitation, all
interests in Obligations purchased by such Lender pursuant to Section 10.7,
and all other claims of any nature or description arising out of or connected
with this Agreement or any other Loan Document, irrespective of whether or
not such Lender shall have made any demand hereunder and although said
Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured.
SECTION 10.3. NOTICES. Except as otherwise expressly provided herein,
all notices, requests and demands to or upon the respective parties hereto to
be effective shall be in writing (including by telecopy, telex, or cable
communication), and shall be deemed to have been duly given or made when
delivered by hand, or five days after being deposited in the United States
mail, postage prepaid, or, in the case of telex notice, when sent, answerback
received, or, in the case of telecopy notice, when sent, or, in the case of a
nationally recognized overnight courier service, one Business Day after
delivery to such courier service, addressed, in the case of each party
hereto, at its address specified opposite its signature below or on the
appropriate Transfer Supplement, or to such other address as may be
designated by any party in a written notice to the other parties hereto,
provided that notices and communications to the Agent shall not be effective
until received by the Agent.
SECTION 10.4. SUCCESSORS AND ASSIGNS; PARTICIPATION; ASSIGNMENTS.
(a) SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the Borrower, the Lenders, the Agent, all
future holders of the Revolving Notes and their respective successors and
assigns, all future holders of the Term Notes and their respective successors
and assigns, except that the Borrower may not assign or transfer any of its
rights or obligations under this Agreement without the prior written consent
of each Lender. No Lender may participate, assign or sell any of its Credit
Exposure (as defined in clause (c) below) except as required by operation of
law, in connection with the merger, consolidation or dissolution of any
Lender or as provided in this Section 10.4.
(b) PARTICIPATION. Any Lender may at any time sell to one or
more Persons (each a "PARTICIPANT") participating interests in any Loan owing
to
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such Lender, any Standby Letter of Credit issued by the Issuing Bank, any
Revolving Note held by such Lender, any Term Notes held by such Lender, any
Commitment of such Lender or any other interest of such Lender hereunder.
Notwithstanding any such sale by a Lender of participating interests to a
Participant, such Lender's rights and obligations under this Agreement shall
remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such
Revolving Note or Term Note for all purposes under this Agreement (except as
expressly provided below), and the Borrower and the Agent shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. The Borrower agrees that if any
Obligations are due and unpaid, or shall have been declared or shall have
become due and payable upon the occurrence and during the continuance of an
Event of Default, each Participant shall be deemed to have the right of
setoff in respect of its participating interest in amounts owing under this
Agreement and any Revolving Note or Term Note to the same extent as if the
amount of its participating interest were owing directly to it as a Lender
under this Agreement or any Revolving Note or Term Note, provided that such
right of setoff shall be subject to the obligations of such Participant to
share with the Lenders, and the Lenders agree to share with such Participant,
as provided in Section 10.7. The Borrower also agrees that each Participant
shall be entitled to the benefits of Sections 2.17, 2.18 and 2.19; PROVIDED
that the Borrower shall not be required to pay any amounts pursuant to such
Sections in excess of the amount the Borrower would have been obligated to
pay but for such sale of a participating interest to such Participant. Each
Lender agrees that any agreement beween such Lender and any such Participant
in respect of such participating interest shall not restrict such Lender's
right to agree to any amendment, supplement, waiver or modification to this
Agreement or any other Loan Document, other than amendments, supplements,
modifications and waivers requiring the written consent of all of the Lenders
pursuant to Section 10.5.
(c) ASSIGNMENTS. Any Lender may, in the ordinary course of
its business and in accordance with applicable law, at any time assign to any
Lender or any affiliate thereof or, with the consent of the Agent, to any
other Person (each a "PURCHASING LENDER") all or any part of any Revolving
Loan owing to such Lender, any part of the Term Loans owing to such Lender,
any Standby Letter of Credit issued by the Issuing Bank, the Revolving Note
held by such Lender, the Term Note held by such Lender, any Commitment of
such Lender or any other interest of such Lender hereunder (in respect of
such Lender, its "CREDIT EXPOSURE") pursuant to a supplement to this
Agreement, substantially in the form of Exhibit 10.4(c) hereto (a "TRANSFER
SUPPLEMENT"), executed by such Purchasing Lender, such transferor Lender and
the Agent; PROVIDED, that any assignment to any Purchasing Lender must be in
a minimum amount of $5,000,000 and any such partial assignment shall be an
assignment of an identical percentage of the transferor Lender's Revolving
Loans, Term Loans, L/C Exposure and Commitments. Upon (i) such execution of
such Transfer Supplement, (ii) delivery of an executed copy thereof to the
Borrower and the Agent, (iii) payment by such Purchasing Lender to such
transferor Lender of an amount equal to the
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purchase price agreed between such transferor Lender and such Purchasing
Lender and (iv) payment to the Agent of a processing fee of $3,500, such
transferor Lender shall be released from its obligations hereunder to the
extent of such assignment and such Purchasing Lender shall for all purposes
be a Lender party to this Agreement and shall have all the rights and
obligations of a Lender under this Agreement to the same extent as if it were
an original party hereto, and no further consent or action by the Borrower,
the Lenders or the Agent shall be required. Such Transfer Supplement shall be
deemed to amend this Agreement to the extent, and only to the extent,
necessary to reflect the addition of such Purchasing Lender as a Lender and
the rsulting adjustment of the Commitments, if any, arising from the purchase
by such Purchasing Lender of all or a portion of the Credit Exposure of such
transferor Lender. Promptly after the consummation of any transfer to a
Purchasing Lender pursuant hereto, the transferor Lender, the Agent and the
Borrower shall make appropriate arrangements so that a replacement Revolving
Note is issued to such transferor Lender and a new Revolving Note is issued
to such Purchasing Lender, in each case in principal amounts reflecting such
transfer.
(d) DISCLOSURE OF INFORMATION. The Borrower authorizes each
Lender to disclose, on a confidential basis, to any Participant or Purchasing
Lender (each, a "TRANSFEREE") and any prospective Transferee any and all
financial and other information in such Lender's possession concerning the
Borrower which has been delivered to such Lender by the Borrower pursuant to
this Agreement or which has been delivered to such Lender by the Borrower in
connection with such Lender's credit evaluation of the Borrower prior to
entering into this Agreement.
(e) The provisions of this SECTION 10.4 shall not apply to
the assignment and pledge for collateral purposes, of any Lender's rights
hereunder or under any Revolving Note or under any Term Note to any Federal
Reserve Bank pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal
Reserve Bank; PROVIDED that such assignment and pledge shall not relieve such
Lender of any of its obligations hereunder.
SECTION 10.5. AMENDMENTS AND WAIVERS. Neither this Agreement, any
Revolving Note, any Term Note, any other Loan Document to which the Borrower
is a party nor any terms hereof or thereof may be amended, supplemented,
modified or waived except in accordance with the provisions of this Section.
The Required Lenders and the Borrower may, from time to time, enter into
written amendments, supplements, modifications or waivers for the purpose of
adding, deleting, changing or waiving any provisions to this Agreement, the
Revolving Notes, the Term Notes, or the other Loan Documents to which the
Borrower is a party, PROVIDED, that no such amendment, supplement,
modification or waiver shall (a) extend either the Final Maturity Date or any
Term Loans Maturity Date or any installment or required prepayment of any
Obligations or reduce the rate or extend the time of payment of interest on
any Obligations, or reduce the principal amount of any Obligations or reduce
any fee payable to all the Lenders
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hereunder, or release all or substantially all of the Collateral (except as
expressly contemplated by the Loan Documents) or foreclose or otherwise
enforce any remedies with respect to any real property Collateral or change
the amount of any Commitment of any Lender, or amend, modify or waive any
material condition precedent to the making of any Revolving Loan or Term
Loans or the issuing of any Standby Letter of Credit, or amend, modify or
waive any term of subordination of the Subordinated Debt Financing Documents,
or release any Guarantor or amend, modify or waive any material term of any
Guaranty, or modify the manner in which the Lenders share in any payment
received by the Agent or any Lender with respect to any Obligation, or modify
the several nature of the Commitments and the other obligations of the Agent
and the Lenders pursuant to the Loan Documents, or amend, modify or waive any
provision of this SECTION 10.5 or the definition of Required Lenders, or
consent to or permit the assignment or transfer by the Borrower of any of its
rights and obligations under this Agreement or any other Loan Document, in
each case without the written consent of all the Lenders, or (b) amend,
modify or waive any provision of SECTION 9 or any other provision of any Loan
Document if the effect thereof is to affect the rights or duties of the
Agent, without the written consent of the then Agent. Any such amendment,
supplement, modification or waiver shall apply to each of the Lenders equally
and shall be binding upon the Borrower, the Lenders, the Agent, all future
holders of the Revolving Notes and all future holders of the Term Notes. In
the case of any waiver, the Borrower, the Lenders and the Agent shall be
restored to their former position and rights hereunder and under the
outstanding Revolving Notes and Term Notes, and any Default or Event of
Default waived shall be deemed to be cured and not continuing, but no such
waiver shall extend to any subsequent or other Default or Event of Default,
or impair any right consequent thereon.
SECTION 10.6. NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on
the part of the Agent or any Lender or any holder of a Revolving Note or any
holder of a Term Note in exercising any right, power or privilege hereunder
or under any other Loan Document and no course of dealing between any Loan
Party and the Agent or any Lender or the holder of any Revolving Note or the
holder of any Term Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder or
under any other Loan Document preclude any other or further exercise thereof
of the exercise of any other right, power or privilege hereunder or
thereunder. The rights and remedies herein expressly provided are cumulative
and not exclusive of any rights or remedies which the Agent or any Lender or
the holder of any Revolving Note or the holder of any Term Note would
otherwise have. No notice to or demand on any Loan Party in any case shall
entitle any Loan Party to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of the Agent, the
Lenders or the holder of any Revolving Note or the holder of the Term Note to
any other or further action in any circumstances without notice or demand.
SECTION 10.7. SHARING OF PAYMENTS. Each of the Lenders agrees that if
it should receive any amount hereunder (whether by voluntary payment, by
realization upon
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security, by the exercise of the right of setoff or banker's lien, by
counterclaim or cross action, by the enforcement of any right under the Loan
Documents, or otherwise) which is applicable to the payment of any
obligations, of a sum which with respect to the related sum or sums received
by other Lenders is in a greater proportion than the total of such Obligation
then owed and due to such Lender bears to the total of such Obligation then
owed and due to all of the Lenders immediately prior to such receipt, then
such Lender receiving such excess payment shall purchase for cash without
recourse or warranty from the other Lenders an interest in such Obligations
owing to such Lenders in such amount as shall result in a proportional
participation by all of the Lenders in such amount; provided that if all or
any portion of such excess amount is thereafter recovered from such Lender,
such purchase shall be rescinded and the purchase price restored to the
extent of such recovery, but without interest.
SECTION 10.8. GOVERNING LAW; SUBMISSION TO JURISDICTION. (a) THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE
PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW).
(b) Any legal action or proceeding with respect to this
Agreement or any other Loan Document and any action for enforcement of any
judgment in respect thereof may be brought in the courts of the State of New
York or of the United States of America for the Southern District of New
York, and, by execution and delivery of this Agreement, the Borrower hereby
accepts for itself and in respect of its property, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts and
appellate courts from any thereof. The Borrower irrevocably consents to the
service of process out of any of the aforementioned courts in any such action
or proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to the Borrower at its address set forth opposite its
signature below. The Borrower hereby irrevocably waives any objection which
it may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Agreement or
any other Loan Document brought in the courts referred to above and hereby
further irrevocably waives and agrees not to plead or claim in any such court
that any such action or proceeding brought in any such court has been brought
in an inconvenient forum. Nothing herein shall affect the right of the Agent,
any Lender or any holder of a Revolving Note or any holder of a Term Note to
serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against the Borrower in any other
jurisdiction.
SECTION 10.9. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument.
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SECTION 10.10. EFFECTIVENESS. This Agreement shall become effective on
the date on which all of the parties hereto shall have signed a counterpart
hereof and shall have delivered the same to the Agent which delivery, in the
case of the Lenders, may be given to the Agent by telecopy (with the
originals delivered promptly to the Agent via overnight courier service) and
the conditions precedent set forth in Section 4.1 have been satisfied.
SECTION 10.11. HEADINGS DESCRIPTIVE. The headings of the several
Sections and subsections of this Agreement are inserted for convenience only
and shall not in any way affect the meaning or construction of any provision
of this Agreement.
SECTION 10.12. MARSHALLING; RECAPTURE. Neither the Agent nor any
Lender shall be under any obligation to marshal any assets in favor of any
Loan Party or any other party or against or in payment of any or all of the
Obligations. To the extent any Lender receives any payment by or on behalf of
any Loan Party, which payment or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
to be repaid to such Loan Party or its estate, trustee, receiver, custodian
or any other party under any bankruptcy law, state or Federal law, common law
or equitable cause, then to the extent of such payment or repayment, the
obligation or part thereof which has been paid, reduced or satisfied by the
amount so repaid shall be reinstated by the amount so repaid and shall be
included within the liabilities of such Loan Party to such Lender as of the
date such initial payment, reduction or satisfaction occurred.
SECTION 10.13. SEVERABILITY. In case any provision in or obligation
under this Agreement or the Revolving Notes or the Term Note or the other
Loan Documents shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 10.14. SURVIVAL. All indemnities set forth herein including,
without limitation, in SECTIONS 2.17, 2.18, 2.19, 2.20, 9.7 and 10.1 shall
survive the execution and delivery of this Agreement and the Revolving Notes
and the Term Note and the making and repayment of the Loans hereunder.
SECTION 10.15. DOMICILE OF LOANS. Each Lender may transfer and carry
its Loans at, to or for the account of any branch office, subsidiary or
affiliate of such Lender.
SECTION 10.16. LIMITATION OF LIABILITY. No claim may be made by any
Loan Party or any other Person against the Agent or any Lender or the
Affiliates, directors, officers, employees, attorneys or agents of any of
them for any special, indirect, consequential or punitive damages in respect
of any claim for breach of contract or any other theory of liability arising
out of or related to the transactions contemplated by this Agreement or any
other Transactions, or any act, omission or event occurring in connection
therewith; and each Loan Party hereby waives, releases and agrees not to xxx
upon any claim for
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any such damages, whether or not accrued and whether or not known or
suspected to exist in its favor.
SECTION 10.17. CALCULATIONS; COMPUTATIONS. The financial statements to
be furnished to the Agent and the Lenders pursuant hereto shall be made and
prepared in accordance with GAAP consistently applied throughout the periods
involved and consistent with GAAP as used in the preparation of the financial
statements referred to in SECTION 5.5, and, except as otherwise specifically
provided herein, all computations determining compliance with SECTION 7.1
hereof shall utilize GAAP.
SECTION 10.18. WAIVER OF TRIAL BY JURY. EACH OF THE BORROWER, THE
AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY MATTER ARISING HEREUNDER OR
THEREUNDER.
SECTION 10.19. RELEASE OF SECURITY INTERESTS. The Agent and Lenders
agree to release their security interests in the assets of the Hatteras
Division and in the Capital Stock of Hatteras Disposition Corp. upon the
closing of the Hatteras Disposition, provided (a) no Default has occurred and
is continuing and (b) the Agent and the Lenders shall have received any
payment required under Section 2.13(e).
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date
first above written.
GENMAR HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxxxx XX
--------------------------------
Executive Vice President
and Chief Financial Officer
Genmar Holdings, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
00
XXX XXXX XX XXX XXXX, as Agent,
Issuing Bank and a Lender
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------
Vice President
The Bank of New York
One Wall Street
U.S. Commercial Banking
Central Division
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
BNY CAPITAL MARKETS, INC.,
as Sole Lead Arranger and
Book Runner
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Managing Director
BNY Capital Markets Inc.
Xxx Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
95
U.S. BANK NATIONAL ASSOCIATION
By: /s/ Xxxxxxx Xxxxxx
----------------------------------
Vice President
U.S. Bank Place
8th Floor
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attn: Xxxxxxx Xxxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
00
XXXX XXX, XXXXXXXXX
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Vice President
Bank One, Wisconsin
Main Xxxxxx
00 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
97
