EXHIBIT 10.37
AMENDED AND RESTATED REVOLVING CREDIT
AGREEMENT
DATED AS OF NOVEMBER 9, 2006
AMONG
QUAKER FABRIC CORPORATION OF FALL RIVER
AS BORROWER,
BANK OF AMERICA, N.A., AND THE OTHER LENDING
INSTITUTIONS LISTED ON SCHEDULE 1 HERETO,
AND
BANK OF AMERICA, N.A.
AS ADMINISTRATIVE AGENT, ISSUING BANK AND CASH MANAGEMENT BANK
TABLE OF CONTENTS
1. DEFINITIONS AND RULES OF INTERPRETATION.................................................................1
1.1. Definitions....................................................................................1
1.2. Rules of Interpretation.......................................................................22
2. REVOLVING LOANS........................................................................................23
2.1. Revolving Loans...............................................................................23
2.2. Commitment Fee................................................................................23
2.3. Reduction of Commitments......................................................................23
2.4. The Revolving Notes...........................................................................24
2.5. Interest on Revolving Loans...................................................................24
2.6. Requests for Revolving Loans..................................................................25
2.6.1. General..............................................................................25
2.6.2. Swing Line...........................................................................25
2.7. Conversion Options............................................................................25
2.7.1. Conversion to Different Type of Revolving Loan.......................................25
2.7.2. Continuation of Type of Revolving Loan...............................................26
2.7.3. LIBOR Rate Loans.....................................................................26
2.8. Funds for Revolving Loans.....................................................................26
2.8.1. Funding Procedures for Revolving Loans...............................................26
2.8.2. Advances by Administrative Agent for Revolving Loans.................................26
2.9. Change in Borrowing Base......................................................................27
2.10. Settlements...................................................................................27
2.10.1. General..............................................................................27
2.10.2. Failure to Make Funds Available......................................................27
2.10.3. No Effect on Other Lenders...........................................................28
2.11. Repayments of Revolving Loans Prior to Event of Default.......................................28
2.11.1. Credit for Funds Received in Concentration Account...................................28
2.11.2. Application of Payments Prior to Event of Default....................................29
2.12. Repayments of Loans After Event of Default....................................................29
2.13. [Intentionally Omitted].......................................................................30
2.14. [Intentionally Omitted].......................................................................30
2.15. [Intentionally Omitted].......................................................................30
2.16. Administrative Agent Advances.................................................................30
3. REPAYMENT OF LOANS.....................................................................................30
3.1. Revolving Loans...............................................................................30
3.1.1. Maturity.............................................................................30
3.1.2. Mandatory Repayments of Revolving Loans..............................................30
3.1.3. Optional Repayments of Revolving Loans...............................................31
3.2. Mandatory Prepayments.........................................................................31
3.2.1. Additional Mandatory Prepayments of Revolving Loans..................................31
4. LETTERS OF CREDIT......................................................................................32
4.1. Letter of Credit Commitments..................................................................32
4.1.1. Commitment to Issue Letters of Credit................................................32
4.1.2. Letter of Credit Applications........................................................32
4.1.3. Terms of Letters of Credit...........................................................32
4.1.4. Reimbursement Obligations of Lenders.................................................33
4.1.5. Participations of Lenders............................................................33
4.2. Reimbursement Obligation of the Borrower......................................................33
4.3. Letter of Credit Payments.....................................................................34
4.4. Obligations Absolute..........................................................................35
4.5. Reliance by Issuer............................................................................35
4.6. Letter of Credit Fee..........................................................................35
4.7. Existing Letters of Credit....................................................................36
5. CERTAIN GENERAL PROVISIONS.............................................................................36
5.1. Fees..........................................................................................36
5.1.1. Administrative Agent's Fee...........................................................36
5.1.2. Closing Fee..........................................................................36
5.1.3. Other Fees...........................................................................36
5.2. Funds for Payments............................................................................36
5.2.1. Payments to Administrative Agent.....................................................36
5.2.2. No Offset, etc.......................................................................36
5.2.3. Non-U.S. Lenders.....................................................................37
5.3. Computations..................................................................................37
5.4. Interest Limitation...........................................................................38
5.5. Inability to Determine LIBOR Rate.............................................................38
5.6. Illegality....................................................................................38
5.7. Additional Costs, etc.........................................................................38
5.8. Capital Adequacy..............................................................................40
5.9. Certificate...................................................................................40
5.10. Indemnity.....................................................................................40
5.11. Interest After Default........................................................................40
5.12. Collateral Security and Guaranties............................................................41
6. REPRESENTATIONS AND WARRANTIES.........................................................................41
6.1. Corporate Authority, Etc......................................................................41
6.1.1. Existence, Good Standing.............................................................41
6.1.2. Authorization........................................................................41
6.1.3. Delivery.............................................................................42
6.1.4. Enforceability.......................................................................42
6.2. Financial Statements; Projections.............................................................42
6.3. Solvency......................................................................................43
6.4. No Material Adverse Changes, etc.............................................................43
6.5. Absence of Mortgages and Liens................................................................43
6.6. Franchises, Patents, Copyrights, etc..........................................................44
6.7. Litigation....................................................................................44
6.8. No Materially Adverse Contracts, etc..........................................................44
6.9. Compliance with Other Instruments, Laws, etc..................................................44
6.10. Tax Status....................................................................................44
6.11. No Default or Event of Default................................................................44
6.12. Holding Company and Investment Company Acts...................................................45
6.13. Employee Benefit Plans........................................................................45
6.13.1. In General...........................................................................45
6.13.2. Terminability of Welfare Plans.......................................................45
6.13.3. Guaranteed Pension Plans.............................................................45
6.13.4. Multiemployer Plans..................................................................45
6.14. Regulations U and X...........................................................................46
6.15. True Copies of Governing Documents............................................................46
6.16. Fiscal Year...................................................................................46
6.17. Perfection of Security Interest...............................................................46
6.18. Subsidiaries, etc.............................................................................46
6.19. Environmental Compliance......................................................................46
6.20. Bank Accounts.................................................................................48
6.21. Labor Contracts...............................................................................48
6.22. Disclosure....................................................................................48
6.23. Title to Properties; Leases...................................................................48
6.24. Certain Transactions..........................................................................49
6.25. Foreign Assets Control Regulations, Etc.......................................................49
6.26. Compliance....................................................................................49
6.27. Contracts.....................................................................................50
6.28. Utilities and Public Access...................................................................50
6.29. Physical Condition............................................................................50
7. AFFIRMATIVE COVENANTS OF THE PARENT AND THE BORROWER...................................................50
7.1. Punctual Payment..............................................................................50
7.2. Maintenance of Office.........................................................................50
7.3. Records and Accounts..........................................................................51
7.4. Financial Statements, Certificates and Information............................................51
7.5. Notices.......................................................................................53
7.5.1. Defaults.............................................................................53
7.5.2. Notice of Litigation and Judgments...................................................53
7.5.3. Notification of Claim Against Collateral.............................................54
7.5.4. Notices Concerning Inventory Collateral..............................................54
7.5.5. Notification of Additional Intellectual Property Rights..............................54
7.5.6. Environmental Events.................................................................54
7.5.7. Notification Regarding the Real Property.............................................54
7.6. Legal Existence; Maintenance of Properties....................................................55
7.7. Insurance.....................................................................................55
7.8. Taxes.........................................................................................55
7.9. Compliance with Laws, Contracts, Licenses, and Permits........................................56
7.10. Employee Benefit Plans........................................................................56
7.11. Use of Proceeds...............................................................................56
7.12. Certain Changes...............................................................................56
7.13. Conduct of Business...........................................................................56
7.14. Further Assurances............................................................................56
7.15. Inspection of Properties and Books, etc.......................................................57
7.15.1. General..............................................................................57
7.15.2. Appraisals...........................................................................57
7.15.3. Communications with Accountants......................................................57
7.15.4. Environmental Assessments............................................................57
7.16. Additional Mortgaged Property.................................................................58
7.17. Bank Accounts.................................................................................58
7.17.1. General..............................................................................58
7.18. Domestic Subsidiaries.........................................................................59
7.19. [Intentionally Omitted].......................................................................59
7.20. Financial Consultant..........................................................................59
8. NEGATIVE COVENANTS OF THE PARENT AND THE BORROWER......................................................59
8.1. Investments...................................................................................59
8.2. Restrictions on Indebtedness..................................................................60
8.3. Restrictions on Liens.........................................................................61
8.3.1. Permitted Liens......................................................................61
8.3.2. Restrictions on Negative Pledges and Upstream Limitations............................62
8.4. Restricted Payments...........................................................................62
8.5. Merger, Consolidation and Disposition of Assets...............................................62
8.5.1. Mergers and Acquisitions.............................................................62
8.5.2. Disposition of Assets................................................................62
8.6. Sale and Leaseback............................................................................63
8.7. Change of Fiscal Year.........................................................................63
8.8. Employee Benefit Plans........................................................................63
8.9. Compliance with Environmental Laws............................................................63
8.10. Change in Terms of Governing Documents........................................................63
8.11. Creation of Subsidiaries......................................................................63
8.12. Transactions with Affiliates..................................................................64
8.13. Agency Account................................................................................64
8.14. Business Activities...........................................................................65
8.15. Changes Relating to Term Loan Documents.......................................................65
9. FINANCIAL COVENANTS OF THE PARENT AND THE BORROWER.....................................................65
9.1. Fixed Charge Coverage Ratio...................................................................65
9.2. [Intentionally Omitted].......................................................................65
9.3. Capital Expenditures..........................................................................65
10. CLOSING CONDITIONS.....................................................................................65
10.1. Loan Documents................................................................................66
10.2. Certified Copies of Governing Documents.......................................................66
10.3. Corporate or Other Action.....................................................................66
10.4. Incumbency Certificate........................................................................66
10.5. Validity of Liens.............................................................................66
10.6. Perfection Certificates and UCC Search Results................................................66
10.7. Certificates of Insurance.....................................................................66
10.8. Agency Account Agreements.....................................................................66
10.9. Borrowing Base and Collateral Update Certificates.............................................67
10.10. Accounts Receivable Aging Report..............................................................67
10.11. Payment of Closing Fees.......................................................................67
10.12. Existing Credit Agreement.....................................................................67
10.13. Intercreditor Agreement; Term Loan Documents..................................................67
10.14. Opinions of Counsel...........................................................................67
10.15. [Intentionally Omitted].......................................................................67
10.16. [Intentionally Omitted].......................................................................67
10.17. [Intentionally Omitted].......................................................................67
10.18. [Intentionally Omitted].......................................................................67
10.19. No Material Adverse Change....................................................................68
10.20. Landlord Waivers..............................................................................68
10.21. Landlord Consents.............................................................................68
10.22. Collateral Examinations/Appraisals............................................................68
10.23. Financial Statement and Projections...........................................................68
11. CONDITIONS TO ALL BORROWINGS...........................................................................68
11.1. Representations True; No Default or Event of Default..........................................68
11.2. No Legal Impediment...........................................................................68
11.3. Governmental Regulation.......................................................................68
11.4. Proceedings and Documents.....................................................................69
11.5. Payment of Fees...............................................................................69
11.6. Exchange Limitations..........................................................................69
11.7. Validity of Liens.............................................................................69
11.8. Financial Covenants...........................................................................69
12. EVENTS OF DEFAULT; ACCELERATION; ETC...................................................................69
12.1. Events of Default and Acceleration............................................................69
12.2. Termination of Commitments....................................................................72
12.3. Remedies......................................................................................72
12.4. Distribution of Collateral Proceeds...........................................................73
13. SETOFF.................................................................................................74
14. THE ADMINISTRATIVE AGENT...............................................................................74
14.1. Authorization.................................................................................74
14.2. Employees and Administrative Agents...........................................................75
14.3. No Liability..................................................................................75
14.4. No Representations............................................................................75
14.4.1. General..............................................................................75
14.4.2. Closing Documentation, etc...........................................................76
14.5. Payments......................................................................................76
14.5.1. Payments to Administrative Agent.....................................................76
14.5.2. Distribution by Administrative Agent.................................................76
14.5.3. Delinquent Lenders...................................................................76
14.6. Holders of Letters of Credit Participation....................................................77
14.7. Indemnity.....................................................................................77
14.8. Administrative Agent as Lender................................................................77
14.9. Resignation...................................................................................77
14.10. Notification of Defaults and Events of Default................................................78
14.11. Duties in the Case of Enforcement.............................................................78
14.12. Administrative Agent May File Proofs of Claim.................................................78
15. EXPENSES...............................................................................................79
16. INDEMNIFICATION........................................................................................80
17. SURVIVAL OF COVENANTS, ETC.............................................................................80
18. ASSIGNMENT AND PARTICIPATION...........................................................................81
18.1. General Conditions............................................................................81
18.2. Assignments...................................................................................81
18.3. Register......................................................................................82
18.4. Participations................................................................................82
18.5. Payments to Participants......................................................................82
18.6. Miscellaneous Assignment Provisions...........................................................82
18.7. Assignee or Participant Affiliated with the Parent............................................83
18.8. New Notes.....................................................................................83
18.9. Special Purpose Funding Vehicle...............................................................83
19. NOTICES, ETC...........................................................................................84
20. GOVERNING LAW..........................................................................................85
21. HEADINGS...............................................................................................85
22. COUNTERPARTS...........................................................................................85
23. ENTIRE AGREEMENT, ETC..................................................................................85
24. WAIVER OF JURY TRIAL...................................................................................85
25. CONSENTS, AMENDMENTS, WAIVERS, ETC.....................................................................86
26. SEVERABILITY...........................................................................................87
27. CONFIDENTIALITY........................................................................................87
28. USA PATRIOT ACT........................................................................................89
29. DESIGNATION OF PERMITTED LIENS.........................................................................89
30. TRANSITIONAL ARRANGEMENTS..............................................................................89
SCHEDULES AND EXHIBITS
Schedule 1 Lenders, Commitment Percentages, Lending Offices
Schedule 1.1(a) Mortgaged Properties
Schedule 1.2 Certain Account Debtors
Schedule 4.7 Existing Letters of Credit
Schedule 6.6 Intellectual Property
Schedule 6.7 Litigation
Schedule 6.8 Material Adverse Contracts
Schedule 6.10 Municipal Taxes
Schedule 6.13.1 Employment Matters
Schedule 6.18 Subsidiaries
Schedule 6.19(a) Environmental Notices
Schedule 6.19(b) Material Environmental Notices
Schedule 6.19(e) Material Environmental Reports
Schedule 6.20 Bank Accounts
Schedule 6.21 Labor Contracts
Schedule 6.23 Title to Properties
Schedule 8.1 Existing Investments
Schedule 8.2 Existing Indebtedness
Schedule 8.3.1 Existing Liens
Schedule 10.20(a) Landlord Waivers
Exhibit A Form of Loan Request
Exhibit B Form of Compliance Certificate
Exhibit C Form of Assignment and Acceptance
Exhibit D-1 Form of Borrowing Base Certificate
Exhibit D-2 Form of Collateral Update Certificate
Exhibit D-3 Form of Accounts Receivable/Loan Reconciliation Report
Exhibit E Form of Revolving Note
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
THIS AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT dated as of
November 9, 2006 is by and among Quaker Fabric Corporation of Fall River, a
Massachusetts corporation (the "Borrower"), Quaker Fabric Corporation, a
Delaware corporation (the "Parent"), Bank of America, N.A. and the other Lenders
from time to time party hereto and Bank of America, N.A., as Administrative
Agent, Issuing Bank and Cash Management Bank.
WHEREAS, the Borrower, the Parent, the Lenders, the Administrative
Agent, the Issuing Bank and the Cash Management Bank are parties to that
Existing Credit Agreement (as hereinafter defined), pursuant to which the
Lenders have made loans and other extensions of credit to the Borrower.
WHEREAS, the Lenders are willing to amend and restate the Existing
Credit Agreement, and the Lenders are willing to make loans and other extensions
of credit to the Borrower, all on the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged (these recitals being an integral part of this Credit Agreement)
the Borrower, the Parent, the Administrative Agent, the Lenders, the Issuing
Bank and the Cash Management Bank hereby agree that, as of the Closing Date (as
defined below), the Existing Credit Agreement shall be amended and restated in
its entirety and shall remain in full force and effect only as set forth herein
and the parties hereto hereby agree as follows:
The parties hereto agree as follows:
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1. DEFINITIONS. The following terms shall have the meanings set forth
in this ss.1 or elsewhere in the provisions of this Credit Agreement referred to
below:
ACCOUNTS RECEIVABLE. All rights of a Person to payment for goods sold,
leased or otherwise marketed in the ordinary course of business and all rights
of a Person to payment for services rendered in the ordinary course of business
and all sums of money or other proceeds due thereon pursuant to transactions
with account debtors recorded on books of account in accordance with GAAP.
ACCOUNTS RECEIVABLE/LOAN RECONCILIATION REPORT. A certificate signed by
the senior financial officer (or another officer designated by such senior
financial officer) of the Borrower in substantially the form of EXHIBIT D-3
hereto.
ADMINISTRATIVE AGENT. Bank of America, acting as administrative agent
for the Lenders, and each other person appointed as the successor Administrative
Agent in accordance with ss.14.9.
ADMINISTRATIVE QUESTIONNAIRE. An Administrative Questionnaire in a form
supplied by the Administrative Agent.
ADMINISTRATIVE AGENTS ADVANCES. See ss.2.16.
ADMINISTRATIVE AGENT'S FEE. See ss.5.1.1.
ADMINISTRATIVE AGENT'S OFFICE. The Administrative Agent's office
located at Xxx Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or at such other
location as the Administrative Agent may designate from time to time.
ADMINISTRATIVE AGENT'S SPECIAL COUNSEL. Xxxxxxx XxXxxxxxx LLP of
Boston, Massachusetts or such other counsel as may be approved by the
Administrative Agent.
AFFILIATE. With respect to any Person, any other Person which directly
or indirectly, controls, is controlled by or is under common control with such
Person. "Control" means the power, directly or indirectly, (a) to vote ten
percent (10%) or more of the Capital Stock (on a fully diluted basis) of a
Person having ordinary voting power for the election of directors, managing
members or general partners (as applicable); or (b) to direct or cause the
direction of the management and policies of a Person (whether by contract or
otherwise).
AGENCY ACCOUNT AGREEMENT. See ss.7.17.1.
AMENDMENT AND REAFFIRMATION OF LOAN DOCUMENTS. The Amendment and
Reaffirmation of Loan Documents, dated as of the Closing Date, among the
Borrower, the Guarantors and the Administrative Agent, in form and substance
satisfactory to the Administrative Agent.
APPLICABLE MARGIN. With respect to (a) Base Rate Loans, 1.25%, and (b),
with respect to LIBOR Rate Loans, 2.75%.
APPLICABLE PENSION LEGISLATION. At any time, any pension or retirement
benefits legislation (be it national, federal, provincial, territorial or
otherwise) then applicable to the Parent or any of its Subsidiaries.
APPROVED FUND. Any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
ARRANGER. Banc of America Securities LLC.
ASSET SALE. Any one or series of related transactions in which the
Parent or any of its Subsidiaries conveys, sells, leases, licenses or otherwise
disposes of, directly or indirectly, any of its properties, businesses or assets
(including the sale or issuance of Capital Stock of any Subsidiary other than to
the Parent) whether owned on the Closing Date or thereafter acquired.
ASSIGNMENT AND ACCEPTANCE. An assignment and acceptance entered into by
a Lender and an Eligible Assignee (with the consent of any party whose consent
is required by ss.18.2), and accepted by the Administrative Agent, in
substantially the form of EXHIBIT C or any other form approved by the
Administrative Agent.
AVAILABILITY RESERVE. The sum of (a) $4,250,000 PLUS (b) $0.75 for
every $1.00 released from the Environmental Escrow Funds (as defined in the Term
Loan Agreement as in effect on the date hereof), other than amounts released to
fund Remediation Costs (as defined in the Term Loan Agreement as in effect on
the date hereof).
BALANCE SHEET DATE. September 30, 2006.
BANK OF AMERICA. Bank of America, N.A and its successors and assigns.
BASE RATE. The higher of (i) the variable annual rate of interest so
designated from time to time by Bank of America as its "prime rate", such rate
being a reference rate and not necessarily representing the lowest or best rate
being charged to any customer, and (ii) one-half of one percent (0.5%) above the
Federal Funds Effective Rate. For the purposes of this definition, "FEDERAL
FUNDS EFFECTIVE RATE" shall mean for any day, the rate per annum equal to 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 for such day (or, if such day is not a Business Day, for the next
preceding 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 such day on such transactions received by the Administrative
Agent from three funds brokers of recognized standing selected by the
Administrative Agent. Changes in the Base Rate resulting from any changes in
Bank of America's "PRIME RATE" shall take place immediately without notice or
demand of any kind.
BASE RATE LOANS. All or any portion of the Revolving Loans bearing
interest calculated by reference to the Base Rate.
BORROWER. As defined in the preamble hereto.
BORROWING BASE. As of any date of determination, an amount equal to the
result of the following:
(a) eighty-five percent (85%) of the net amount of Eligible
Accounts Receivable of the Borrower outstanding at such date; PLUS
(b) the lesser of
(i) $12,500,000 and
(ii) the sum of
(A) the lesser of (x) 65% of the Net Book
Value of Eligible Finished Goods Inventory
of the Borrower, determined in accordance
with GAAP and (y) 85% of the Net Orderly
Liquidation Value of Eligible Finished Goods
Inventory of the Borrower; PLUS
(B) the lesser of (x) 35% of the Net Book
Value of Eligible Raw Materials Inventory of
the Borrower, in each case, determined in
accordance with GAAP and (y) 85% of the Net
Orderly Liquidation Value of Eligible Raw
Materials Inventory of the Borrower; MINUS
(c) the Availability Reserve; MINUS
(d) Reserves.
The Administrative Agent may, from time to time in its sole discretion (not to
be exercised unreasonably), (x) reduce the lending formula with respect to
Eligible Accounts Receivable of the Borrower to the extent that the
Administrative Agent determines that: (i) the dilution with respect of the
Accounts Receivable of the Borrower for any period has increased in any material
respect or may be reasonably anticipated to increase in any material respect
above historical levels, or (ii) the general creditworthiness of account debtors
or other obligors of the Borrower has declined or (y) reduce the lending
formula(s) with respect to Eligible Inventory of the Borrower to the extent that
the Administrative Agent determines that: (i) the number of days of the turnover
of the inventory of the Borrower for any period has changed in any material
adverse respect, (ii) the liquidation value of the Eligible Inventory of the
Borrower, or any category thereof, has decreased, or (iii) the nature and
quality of the inventory of the Borrower has deteriorated in any material
respect or the mix of such inventory has changed materially. In determining
whether to reduce the lending formula(s), the Administrative Agent may consider
events, conditions, contingencies or risks which are also considered in
determining Eligible Accounts Receivable of the Borrower, Eligible Inventory of
the Borrower or in establishing the Reserves.
BORROWING BASE CERTIFICATE. A certificate signed by the senior
financial officer (or another officer designated by such senior financial
officer) of the Borrower demonstrating calculation of the Borrowing Base in the
form of EXHIBIT D-1 hereto.
BUSINESS DAY. Any day on which commercial banking institutions in
Boston, Massachusetts, are open for the transaction of banking business and, in
the case of LIBOR Rate Loans, also a day which is a LIBOR Business Day.
BUSINESS PLAN. The "Quaker Fabric Bank Presentation" by Xxxxxxx and
Marsal, dated May 19, 2006, as supplemented on September 29, 2006, October 30,
2006 and November 9, 2006, as the same may be updated from time to time.
CAPITAL ASSETS. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and goodwill); PROVIDED that Capital Assets shall not
include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with GAAP.
CAPITAL EXPENDITURES. Amounts paid or Indebtedness incurred by the
Parent or any Subsidiary of the Parent in connection with (i) the purchase or
lease by the Parent or such Subsidiary of Capital Assets that would be required
to be capitalized and shown on the balance sheet of such Person in accordance
with GAAP or (ii) the lease of any assets by the Parent or such Subsidiary as
lessee under any Synthetic Lease to the extent that such assets would have been
Capital Assets had the Synthetic Lease been treated for accounting purposes as a
Capitalized Lease.
CAPITALIZED LEASES. Leases under which the Parent or any of its
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with GAAP.
CAPITAL STOCK. Any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants, rights or options to purchase any of the foregoing (including
convertible debt instruments).
CASH MANAGEMENT BANK. Bank of America, in its capacity as the provider
of cash management services to the Parent and its Subsidiaries.
CASH MANAGEMENT OBLIGATIONS. All present and future liabilities,
obligations and Indebtedness of the Parent and its Subsidiaries owing to any
Lender, the Administrative Agent, the Cash Management Bank or any Affiliate
thereof under or in connection with any cash management or related services or
products provided by any Lender, the Administrative Agent, the Cash Management
Bank or any Affiliate thereof to or for the account of the Parent or any
Subsidiary of the Parent, including, without limitation, liabilities,
obligations or Indebtedness in respect of automated clearing house and other
fund transfers, checks, money orders, drafts, instruments, funds, payments and
other items and forms of remittances paid, deposited or otherwise credited to
any deposit, disbursement or other account of the Parent or any Subsidiary of
the Parent, any overdraft or other extension of credit made to cover any funds
transfer, check, draft, instrument or amount paid for the account or benefit of
the Parent or any Subsidiary of the Parent, and all fees, charges, indemnities,
expenses and other amounts from time to time owing to any Lender, the
Administrative Agent, the Cash Management Bank or any Affiliate thereof in
connection therewith (all whether accruing before or after the commencement of
any bankruptcy proceeding by or against the Parent or any Subsidiary of the
Parent and regardless of whether allowed as a claim in any such proceeding).
CASUALTY EVENT. With respect to any property (including any interest in
property) of the Parent or any Subsidiary of the Parent, any loss of, damage to,
or condemnation or other taking of, such property for which the Parent or such
Subsidiary receives insurance proceeds, proceeds of a condemnation award or
other compensation.
CHANGE OF CONTROL. An event or series of events by which:
(a) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but
excluding any employee benefit plan of such person or its subsidiaries,
and any person or entity acting in its capacity as trustee, agent or
other fiduciary or administrator of any such plan), other than Nortex
Holdings, Inc. or any Affiliate thereof, becomes the "beneficial owner"
(as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act
of 1934, except that a person or group shall be deemed to have
"beneficial ownership" of all securities that such person or group has
the right to acquire (such right, an "OPTION RIGHT"), whether such
right is exercisable immediately or only after the passage of time),
directly or indirectly, of 30% or more of the equity securities of the
Parent entitled to vote for members of the board of directors or
equivalent governing body of the Parent on a fully-diluted basis (and
taking into account all such securities that such person or group has
the right to acquire pursuant to any option right);
(b) during any period of 12 consecutive months, a majority of
the members of the board of directors or other equivalent governing
body of the Parent ceases to be composed of individuals (i) who were
members of that board or equivalent governing body on the first day of
such period, (ii) whose election or nomination to that board or
equivalent governing body was approved by individuals referred to in
clause (i) above constituting at the time of such election or
nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other
equivalent governing body was approved by individuals referred to in
clauses (i) and (ii) above constituting at the time of such election or
nomination at least a majority of that board or equivalent governing
body (excluding, in the case of both clause (ii) and clause (iii), any
individual whose initial nomination for, or assumption of office as, a
member of that board or equivalent governing body occurs as a result of
an actual or threatened solicitation of proxies or consents for the
election or removal of one or more directors by any person or group
other than a solicitation for the election of one or more directors by
or on behalf of the board of directors); or
(c) any Person, other than Nortex Holdings, Inc. or any
Affiliate thereof, or two or more Persons acting in concert shall have
acquired by contract or otherwise, or shall have entered into a
contract or arrangement that, upon consummation thereof, will result in
its or their acquisition of the power to exercise, directly or
indirectly, a controlling influence over the management or policies of
the Parent, or control over the equity securities of the Parent
entitled to vote for members of the board of directors or equivalent
governing body of the Parent on a fully-diluted basis (and taking into
account all such securities that such Person or group has the right to
acquire pursuant to any option right) representing 30% or more of the
combined voting power of such securities.
CLOSING DATE. The first date on which the conditions set forth in
ss.ss.10 and 11 have been satisfied and any Loans are to be made or any Letters
of Credit are to be issued hereunder.
CLOSING FEE. See ss.5.1.2.
CODE. The Internal Revenue Code of 1986.
COLLATERAL. All of the property, rights and interests of (a) the
Borrower, (b) the Parent, (c) each Subsidiary of the Parent, and (d) all other
Guarantors from time to time party to the Guaranties, that are or are intended
to be subject to the Liens created by the Security Documents.
COLLATERAL UPDATE CERTIFICATE. A certificate signed by the senior
financial officer (or another officer designated by such senior financial
officer) of the Borrower in substantially the form of EXHIBIT D-2 hereto.
COMMITMENT. With respect to each Lender, (a) the Dollar amount set
forth on SCHEDULE 1 hereto as the amount of such Lender's commitment (i) to make
Revolving Loans to the Borrower and (ii) to participate in the issuance,
extension and renewal of Letters of Credit issued for the account of the
Borrower or Quaker Textile, as the same may be reduced from time to time; or (b)
if such commitment is terminated pursuant to the provisions hereof, zero.
COMMITMENT FEE. See ss.2.2.
COMMITMENT PERCENTAGE. With respect to each Lender, the percentage set
forth on SCHEDULE 1 hereto reflecting such Lender's commitment to make Revolving
Loans and to participate in the issuance, extension and renewal of Letters of
Credit issued for the account of the Borrower or Quaker Textile.
COMPLIANCE CERTIFICATE. See ss.7.4(d).
CONCENTRATION ACCOUNT. See ss.7.17.1.
CONSOLIDATED OR CONSOLIDATED. With reference to any term defined
herein, shall mean that term as applied to the accounts of the Parent and its
Subsidiaries, consolidated in accordance with GAAP.
CONSOLIDATED EBITDA. For any period, (a) the net income (or deficit) of
the Parent and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP) for such period, PLUS (b) to the extent
deducted in calculating net income (i) income taxes accrued during such period,
(ii) interest and fees in respect of Indebtedness (including amounts accrued or
paid in respect of Derivative Agreements) during such period (whether or not
actually paid in cash during such period), (iii) depreciation, amortization and
other non-cash charges (including asset impairment charges) accrued for such
period, (iv) extraordinary losses during such period, (v) costs and expenses
incurred by the Parent and its Subsidiaries in connection with the Parent's
retention of the Financial Consultant (as defined in ss.7.20), (vi) severance
charges incurred by the Parent and its Subsidiaries, (vii) up to $300,000 per
month of plant consolidation expenses specifically identified to the
satisfaction of the Administrative Agent, and (viii) transaction costs incurred
during such period in connection with the transactions contemplated hereby and
in the Term Loan Agreement not to exceed $2,600,000 in the aggregate, MINUS (c)
to the extent such items were added in calculating net income (i) extraordinary
gains during such period and (ii) proceeds received during such period in
respect of Casualty Events and dispositions of any property (other than
dispositions in the ordinary course of business on ordinary business terms).
CONSOLIDATED INTEREST EXPENSE. For any period, the sum, without
duplication, for the Parent and its Subsidiaries (determined on a consolidated
basis without duplication in accordance with GAAP), of the following: (a) all
interest in respect of Indebtedness required to be paid or accrued during such
period (whether or not actually paid during such period), but excluding
capitalized debt acquisition costs (including fees and expenses related to this
Credit Agreement and the Term Loan Agreement) PLUS (b) the net amounts payable
(or MINUS the net amounts receivable) in respect of Derivative Agreements
accrued during such period (whether or not actually paid or received during such
period) excluding reimbursement of legal fees and other similar transaction
costs and further excluding payments required by reason of the early termination
of Derivative Agreements in effect on the date hereof PLUS (c) all fees,
including letter of credit fees and expenses (but excluding reimbursement of
legal fees and any early termination fee paid by the Borrower pursuant to ss.2.3
of the Existing Credit Agreement in connection with the Borrower's reduction of
the Total Commitment (as defined in the Existing Credit Agreement) effective as
of February 3, 2006) incurred hereunder during such period.
CONVERSION REQUEST. A notice given by the Borrower to the
Administrative Agent of the Borrower's election to convert or continue a Loan in
accordance with ss.2.7.
COPYRIGHT MORTGAGE. The Memorandum of Grant of Security Interest in
Copyrights, dated as of the Original Closing Date, made by the Borrower and the
Guarantors in favor of the Administrative Agent, in form and substance
satisfactory to the Administrative Agent.
CREDIT AGREEMENT. This Amended and Restated Revolving Credit Agreement,
including the Schedules and Exhibits hereto.
DEFAULT. See ss.12.1.
DEFAULT RATE. (a) When used with respect to Obligations other than
Letter of Credit Fees, an interest rate equal to (i) the Base Rate PLUS (ii) the
Applicable Margin applicable to the Base Rate Loans PLUS (iii) 2% per annum;
PROVIDED, HOWEVER, that with respect to a LIBOR Rate Loan, the Default Rate
shall be an interest rate equal to the LIBOR Rate PLUS the Applicable Margin
applicable to such Loan PLUS 2% per annum, and (b) when used with respect to
Letter of Credit Fees, a rate equal to the Applicable Margin applicable to
Revolving Loans bearing interest at the LIBOR Rate PLUS 2% per annum, in all
cases to the fullest extent permitted by applicable laws.
DELINQUENT LENDER. See ss.14.5.3.
DERIVATIVE AGREEMENT. Any forward contract, futures contract, swap,
option or other similar agreement or arrangement (including, without limitation,
caps, floors, collars and similar agreements), the value of which is dependent
upon interest rates, currency exchange rates, commodities or other indices
(including foreign exchange lines).
DISTRIBUTION. The declaration or payment of any dividend on or in
respect of any shares of any class of Capital Stock of the Parent or any
Subsidiary of the Parent, other than dividends payable solely in shares of
common stock of the Parent or such Subsidiary; the payment or prepayment of
principal of, premium, if any, or interest on, or purchase, redemption,
defeasance, retirement or other acquisition of with respect to any shares of any
class of Capital Stock of the Parent or any Subsidiary of the Parent, directly
or indirectly through a Subsidiary of such Person or otherwise (including the
setting apart of assets for a sinking or other analogous fund to be used for
such purpose); the return of capital by the Parent or any Subsidiary of the
Parent to its shareholders as such; or any other distribution on or in respect
of any shares of any class of Capital Stock of the Parent or any Subsidiary of
the Parent.
DOLLARS OR $. Dollars in lawful currency of the United States of
America.
DOMESTIC LENDING OFFICE. Initially, the office of each Lender
designated as such in SCHEDULE 1 hereto; thereafter, such other office of such
Lender, if any, located within the United States that will be making or
maintaining Base Rate Loans.
DOMESTIC SUBSIDIARY. Any Subsidiary that is organized under the laws of
the United States of America, any state or territory thereof or the District of
Columbia.
DRAWDOWN DATE. The date on which any Revolving Loan is made or is to be
made, and the date on which any Revolving Loan is converted or continued in
accordance with ss.2.7.
ELIGIBLE ACCOUNTS RECEIVABLE. With respect to the Borrower, the
aggregate of the unpaid portions of Accounts Receivable (net of any contra
accounts, credits, rebates, offsets, holdbacks or other adjustments or
commissions payable to third parties that are adjustments to such Accounts
Receivable) of the Borrower, except any Account Receivable to which any of the
exclusionary criteria set forth below applies. The Administrative Agent shall
have the right to establish, modify or eliminate Reserves against Eligible
Accounts Receivable from time to time in its reasonable credit judgment. In
addition, the Administrative Agent reserves the right, at any time and from time
to time after the Closing Date, to adjust any of the criteria set forth below
and to establish new criteria, in its reasonable credit judgment, reflecting
changes in the collectibility or realization values of such Accounts Receivable
arising or discovered by the Administrative Agent after the Closing Date,
subject to the approval of the Required Lenders in the case of adjustments or
new criteria which have the effect of making additional credit available
hereunder. Eligible Accounts Receivable shall not include any Account Receivable
if:
(i) it is unpaid for more than sixty (60) days after the
original due date shown on the invoice; or
(ii) (x) with respect to Accounts Receivable from account
debtors listed on SCHEDULE 1.2 (as such schedule may be updated from
time to time by the Borrower with the prior written consent of the
Administrative Agent) arising from sample book orders from such account
debtors, such Account Receivable is due and unpaid more than one
hundred and twenty (120) days after the original invoice date and (y)
with respect to all other Accounts Receivable, such Account Receivable
is due and unpaid more than ninety (90) days after the original invoice
date; or
(iii) 50% or more of the Accounts Receivable from the account
debtor are not deemed Eligible Accounts Receivable; or
(iv) the total unpaid Accounts Receivable of the account
debtor exceed 25% of the net amount of all Eligible Accounts
Receivable, to the extent of such excess; or
(v) any material covenant, representation or warranty
contained in the agreement with respect to such Account Receivable has
been breached by the Borrower; or
(vi) the account debtor is also the Borrower's creditor or
supplier, or the account debtor has disputed liability with respect to
such Account Receivable, or the account debtor has made any claim with
respect to any other Account Receivable due from such account debtor to
the Borrower, or the Account Receivable otherwise is or may become
subject to any right of setoff by the account debtor; PROVIDED that,
only the portion of the Account Receivable equal to the amount of such
dispute, claim or setoff shall not be an Eligible Account Receivable
pursuant to this clause (vi); or
(vii) the account debtor has commenced a voluntary case under
the federal bankruptcy laws, as now constituted or hereafter amended,
or other insolvency, reorganization or adjustment laws of any other
jurisdiction, or made an assignment for the benefit of creditors, or a
decree or order for relief has been entered by a court having
jurisdiction in the premises in respect of the account debtor in an
involuntary case under the federal bankruptcy laws, as now constituted
or hereafter amended, or other insolvency, reorganization or adjustment
laws of any other jurisdiction, or any other petition or other
application for relief under the federal bankruptcy laws or other
insolvency, reorganization or adjustment laws of any other jurisdiction
has been filed against the account debtor, or if the account debtor has
failed, suspended business, ceased to be solvent, or consented to or
suffered a receiver, trustee, liquidator or custodian to be appointed
for it or for all or a significant portion of its assets or affairs; or
(viii) it arises from a sale to an account debtor outside the
United States and Canada or is denominated in a currency other than
Dollars, unless, in each case, the sale is covered by credit insurance
or on letter of credit, guaranty or acceptance terms, in each case
acceptable to Administrative Agent in its sole discretion; or
(ix) it arises from a sale to the account debtor on a xxxx and
hold, guaranteed sale, sale or return, sale on approval, consignment or
any other repurchase or return basis; or
(x) the account debtor is the United States of America or any
state located therein or any department, agency or instrumentality
thereof, unless the Borrower assigns its right to payment of such
Account Receivable to the Administrative Agent, in a manner
satisfactory to the Administrative Agent, so as to comply with the
Assignment of Claims Act of 1940 (31 U.S.C. ss.203 ET SEQ.), as amended
or any equivalent state law; or
(xi) it is not at all times subject to the Administrative
Agent's duly perfected, first priority security interest and no other
Lien except a Permitted Lien; or
(xii) the goods giving rise to such Account Receivable have
not been delivered to and accepted by the account debtor or the
services giving rise to such Account Receivable have not been performed
by the Borrower and accepted by the account debtor or the Account
Receivable otherwise does not represent a final sale; or
(xiii) the Account Receivable is evidenced by chattel paper or
an instrument of any kind, or has been reduced to judgment; or
(xiv) the Borrower has made any agreement with the account
debtor for any deduction therefrom, except for discounts or allowances
which are made in the ordinary course of business for prompt payment or
quality credits related to such Account Receivable; or
(xv) the Borrower has made an agreement with the account
debtor to extend the time of payment thereof; or (xvi) it arises out of
a sale made by the Borrower to a Subsidiary of the Borrower or an
Affiliate of the Borrower or to a Person controlled by an Affiliate of
the Borrower.
ELIGIBLE ASSIGNEE. Any of (a) a Lender, (b) an Affiliate of a Lender,
(c) an Approved Fund and (d) any other Person (other than a natural person)
approved by (i) the Administrative Agent and (ii) unless a Default or an Event
of Default has occurred and is continuing, the Borrower (each such approval not
to be unreasonably withheld or delayed).
ELIGIBLE FINISHED GOODS INVENTORY. That portion of Eligible Inventory
consisting of finished goods.
ELIGIBLE INVENTORY. With respect to the Borrower, all of the inventory
owned by the Borrower shall be "Eligible Inventory" for purposes of this Credit
Agreement, excluding any inventory to which any of the exclusionary criteria set
forth below applies. The Administrative Agent shall have the right to establish,
modify or eliminate Reserves against Eligible Inventory from time to time in its
reasonable credit judgment. In addition, the Administrative Agent reserves the
right, at any time and from time to time after the Closing Date, to adjust the
criteria set forth below and to establish new criteria, in its reasonable credit
judgment, reflecting changes in the saleability or realization values of
inventory arising or discovered by the Administrative Agent after the Closing
Date, subject to the approval of the Required Lenders in the case of adjustments
or new criteria which have the effect of making additional credit available
hereunder. Eligible Inventory shall not include any inventory if:
(i) it is not readily marketable in its current form; or
(ii) it is not in good, new and saleable condition; or
(iii) it is slow moving, obsolete, defective or
unmerchantable; or
(iv) it consists of supplies, packing materials, shipping
materials or work-in-process; or
(v) it does not meet all standards imposed by any governmental
agency or authority, including, without limitation, the Fair Labor
Standards Act; or
(vi) it does not conform in all respects to the warranties and
representations set forth in this Credit Agreement; or
(vii) it is not at all times subject to the Administrative
Agent's duly perfected, first priority security interest and no other
Lien except a Permitted Lien; or
(viii) it is not situated at a location in compliance with
this Credit Agreement or is in transit; or
(ix) it is not located in the United States of America; or
(x) it is held on consignment, or not otherwise owned by the
Borrower; or
(xi) it has been shipped to a customer, regardless of whether
such shipment is on a consignment basis; or
(xii) it is held at a location leased by the Borrower, unless
the Administrative Agent has received a waiver from the lessor (and any
sublessor) of such property, in form and substance satisfactory to the
Administrative Agent; or
(xiii) it has been returned by a customer and has not been
qualified by the Borrower within thirty (30) days as being Eligible
Inventory; or
(xiv) it is not in the possession of the Borrower, unless the
Administrative Agent has received a waiver from the party in possession
of such inventory in form and substance satisfactory to the
Administrative Agent; or
(xv) it is subject to a third party's trademark or other
proprietary right unless the Administrative Agent determines that such
inventory could be sold pursuant to the exercise of remedies by the
Administrative Agent hereunder or under applicable law on terms
satisfactory to the Administrative Agent in its sole discretion; or
(xvi) it is subject to capitalized variances.
ELIGIBLE RAW MATERIALS INVENTORY. That portion of Eligible Inventory
consisting of raw materials.
EMPLOYEE BENEFIT PLAN. Any employee benefit plan within the meaning of
ss.3(3) of ERISA maintained or contributed to by the Parent, the Borrower or any
ERISA Affiliate, other than a Guaranteed Pension Plan or a Multiemployer Plan.
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA AFFILIATE. Any Person which is treated as a single employer with
the Parent or any Subsidiary of the Parent under ss.414 of the Code.
ERISA REPORTABLE EVENT. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of ss.4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
EUROCURRENCY RESERVE RATE. For any day, the maximum rate (expressed as
a decimal) at which any bank subject thereto would be required to maintain
reserves under Regulation D of the Board of Governors of the Federal Reserve
System (or any successor or similar regulations relating to such reserve
requirements) against "EUROCURRENCY LIABILITIES" (as that term is used in
Regulation D), if such liabilities were outstanding. The Eurocurrency Reserve
Rate shall be adjusted automatically on and as of the effective date of any
change in the Eurocurrency Reserve Rate.
EVENT OF DEFAULT. See ss.12.1.
EXCESS AVAILABILITY. As of any date of determination thereof, the
difference between (a) the lesser of (i) the Total Commitment at such time and
(ii) the Borrowing Base at such time, and (b) the Revolving Exposure at such
time.
EXCLUDED TAXES. With respect to the Administrative Agent, any Lender,
the Issuing Bank, the Cash Management Bank or any other recipient of any payment
to be made by or on account of any obligation of the Borrower hereunder, (a)
taxes imposed on or measured by its overall net income (however denominated),
and franchise taxes imposed on it (in lieu of net income taxes), by the
jurisdiction (or any political subdivision thereof) under the laws of which such
recipient is organized or in which its principal office is located, (b) any
branch profits taxes imposed by the United States or any similar tax imposed by
any other jurisdiction in which the Borrower is located, (c) in the case of a
Non-U.S. Lender, any withholding tax that is imposed on amounts payable to such
Non-U.S. Lender at the time such Non-U.S. Lender becomes a party hereto and (d)
any taxes imposed on a Lender as a result of such Lender's failure to comply
with ss.5.2.3.
EXISTING CREDIT AGREEMENT. The Revolving Credit and Term Loan
Agreement, dated as of May 18, 2005 (as amended as of July 27, 2005, October 25,
2005, December 30, 2005, March 22, 2006 and May 6, 2006), among the Parent, the
Borrower, the Lenders, the Administrative Agent, the Issuing Bank and the Cash
Management Bank.
EXISTING LETTERS OF CREDIT. See ss.4.7 hereof.
FEE LETTER. The fee letter, dated as November 9, 2006, among the
Borrower and Bank of America.
FEES. Collectively, the Commitment Fee, the Letter of Credit Fees, the
Administrative Agent's Fee and the Closing Fee.
FISCAL QUARTER(S). The thirteen (13) or fourteen (14) week periods, the
first of which shall commence on the first day of each Fiscal Year, and each of
which shall be referred to as "FQ1", "FQ2", "FQ3" and "FQ4", respectively.
FISCAL YEAR. The fifty-two (52) or fifty-three (53) week period ending
on the Saturday closest to January 1 of each calendar year.
FIXED ASSET COLLATERAL. All of the Real Estate, Equipment (as defined
in the UCC) and Fixtures (as defined in the UCC) of the Borrower, the Parent,
each Subsidiary of the Parent, and all other Guarantors from time to time party
to the Guaranties, which is subject to a mortgage, lien or security interest
pursuant to the Term Loan Documents, together with all identifiable proceeds of
the foregoing.
FIXED CHARGE COVERAGE RATIO. As at any date of determination, the ratio
of (a) (i) Consolidated EBITDA for the four Fiscal Quarter period ending on such
date of determination MINUS (ii) the aggregate amount of all Non-Financed
Capital Expenditures made during such period MINUS (iii) the aggregate amount
paid, or required to be paid (without duplication), in cash in respect of the
current portion of all income taxes for such period MINUS (iv) the aggregate
amount of dividends and distributions permitted to be paid by the Parent under
ss.8.4 (if any) and actually paid in cash during such period PLUS (v) tax
refunds received in cash during such period to (b) the sum for the Parent and
its Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of (i) the aggregate amount of Consolidated Interest
Expense for such period and (ii) the aggregate amount of regularly scheduled
payments of principal in respect of Indebtedness for borrowed money (including
the principal component of any payments in respect of Capitalized Leases) paid
or required to be paid during such period (excluding payments made pursuant to
3.1.3, 3.1.4, 3.1.5 and 3.1.6 of the Term Loan Agreement as in effect on the
date hereof).
FOREIGN SUBSIDIARY. Any Subsidiary that is not a Domestic Subsidiary.
FUND. Any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
GAAP. (i) When used in ss.9, whether directly or indirectly through
reference to a capitalized term used therein, means (A) principles that are
consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, in effect for the Fiscal Year
ended on December 31, 2005, and (B) to the extent consistent with such
principles, the accounting practice of the Parent and its Subsidiaries reflected
in the Parent's financial statements for the period ended on the Balance Sheet
Date, and (ii) when used in general, other than as provided above, means
principles that are (A) consistent with the principles promulgated or adopted by
the Financial Accounting Standards Board and its predecessors, as in effect from
time to time, and (B) consistently applied with past financial statements of the
Parent and its Subsidiaries adopting the same principles, provided that in each
case referred to in this definition of "GAAP" a certified public accountant
would, insofar as the use of such accounting principles is pertinent, be in a
position to deliver an unqualified opinion (other than qualifications regarding
changes in GAAP and as to normal year-end adjustments) as to financial
statements in which such principles have been properly applied.
GOVERNING DOCUMENTS. With respect to any Person, its certificate or
articles of incorporation, certificate of formation, or, as the case may be,
certificate of limited partnership, its by-laws, operating agreement or, as the
case may be, partnership agreement or other constitutive documents and all
shareholder agreements, voting trusts and similar arrangements applicable to any
of its Capital Stock.
GOVERNMENTAL AUTHORITY. Any foreign, federal, state, provincial,
regional, local municipal or other government, or any department, commission,
board, bureau, agency, public authority or instrumentality thereof, or any court
or arbitrator.
GUARANTEED PENSION PLAN. Any employee pension benefit plan within the
meaning of ss.3(2) of ERISA maintained or contributed to by the Parent, the
Borrower or any ERISA Affiliate, the benefits of which are guaranteed on
termination in full or in part by the PBGC pursuant to Title IV of ERISA, other
than a Multiemployer Plan.
GROSS AVAILABILITY. At any time, the lesser of (a) the Borrowing Base
at such time and (b) the Total Commitment at such time.
GUARANTIES. The Guaranties made by each Guarantor in favor of the
Lenders and the Administrative Agent pursuant to which such Guarantor guaranties
to the Lenders and the Administrative Agent the payment and performance in full
of the Obligations.
GUARANTORS. Collectively, (i) the Parent, Quaker Mexico and Quaker
Textile and (ii) any direct or indirect Domestic Subsidiary of the Parent.
INDEBTEDNESS. As to any Person and whether recourse is secured by or is
otherwise available against all or only a portion of the assets of such Person
and whether or not contingent, but without duplication:
(a) every obligation of such Person for money borrowed,
(b) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including obligations
incurred in connection with the acquisition of property, assets or
businesses,
(c) every reimbursement obligation of such Person with respect
to letters of credit, bankers' acceptances, or similar facilities
issued for the account of such Person,
(d) every obligation of such Person issued or assumed as the
deferred purchase price of property or services (including securities
repurchase agreements but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business),
(e) every obligation of such Person under any Capitalized
Lease,
(f) every obligation of such Person under any Synthetic Lease,
(g) all sales by such Person of (i) accounts or general
intangibles for money due or to become due, (ii) chattel paper,
instruments or documents creating or evidencing a right to payment of
money or (iii) other receivables (collectively "RECEIVABLES"), whether
pursuant to a purchase facility or otherwise, other than in connection
with the disposition of the business operations of such Person relating
thereto or a disposition of defaulted receivables for collection (or as
a sale of claims in bankruptcy) and not as a financing arrangement, and
together with any obligation of such Person to pay any discount,
interest, fees, indemnities, penalties, recourse, expenses or other
amounts in connection therewith,
(h) every obligation of such Person (an "EQUITY RELATED
PURCHASE OBLIGATION") to purchase, redeem, retire or otherwise acquire
for value any shares of Capital Stock issued by such Person or any
rights measured by the value of such Capital Stock,
(i) every obligation of such Person under any Derivative
Agreement,
(j) every obligation in respect of Indebtedness of any other
entity (including any partnership in which such Person is a general
partner) to the extent that such Person is liable therefor as a result
of such Person's ownership interest in or other relationship with such
entity, except to the extent that the terms of such Indebtedness
provide that such Person is not liable therefor and such terms are
enforceable under applicable law, and
(k) every obligation, contingent or otherwise, of such Person
guaranteeing, or having the economic effect of guarantying or otherwise
acting as surety for, any obligation of a type described in any of
clauses (a) through (j) (the "PRIMARY obligation") of another Person
(the "PRIMARY OBLIGOR"), in any manner, whether directly or indirectly,
and including, without limitation, any obligation of such Person (i) to
purchase or pay (or advance or supply funds for the purchase of) any
security for the payment of such primary obligation, (ii) to purchase
property, securities or services for the purpose of assuring the
payment of such primary obligation, or (iii) to maintain working
capital, equity capital or other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to
pay such primary obligation.
The "AMOUNT" or "PRINCIPAL AMOUNT" of any Indebtedness at any
time of determination represented by (1) any Indebtedness, issued at a
price that is less than the principal amount at maturity thereof, shall
be the amount of the liability in respect thereof determined in
accordance with GAAP, (2) any Capitalized Lease shall be the present
value of the aggregate of the rentals obligation under such Capitalized
Lease payable over the term thereof that is not subject to termination
by the lessee, (3) any sale of receivables shall be the amount of
unrecovered capital or principal investment of the purchaser (other
than the Parent or any of its wholly-owned Subsidiaries) thereof,
excluding amounts representative of yield or interest earned on such
investment, (4) any Synthetic Lease shall be the stipulated loss value,
termination value or other equivalent amounts, (5) any derivative
contract shall be the maximum amount of any termination or loss payment
required to be paid by such Person if such derivative contract were, at
the time of determination, to be terminated by reason of any event of
default or early termination event thereunder, whether or not such
event of default or early termination event has in fact occurred, (6)
any equity related purchase obligation shall be the maximum fixed
redemption or purchase price thereof inclusive of any accrued and
unpaid dividends to be comprised in such redemption or purchase price
and (7) any guaranty or other contingent liability referred to in
clause (k) shall be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such guaranty or
other 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.
INTERCREDITOR AGREEMENT. That certain Intercreditor Agreement, dated as
of the date hereof, among the Borrower, the Guarantors the Term Loan Agent and
the Administrative Agent, in form and substance satisfactory to the
Administrative Agent.
INTEREST PAYMENT DATE. (i) As to any Base Rate Loan, the first day of
each calendar month (including the month which includes the Drawdown Date
thereof) and the Maturity Date and (ii) as to any LIBOR Rate Loan, the last day
of each Interest Period applicable to such Loan and the Maturity Date; PROVIDED,
HOWEVER, that if any Interest Period for a LIBOR Rate Loan exceeds three (3)
months, the respective dates that fall every three months after the beginning of
such Interest Period shall also be Interest Payment Dates.
INTEREST PERIOD. With respect to each Revolving Loan, (i) initially,
the period commencing on the Drawdown Date of such Loan and ending on the last
day of one of the periods set forth below, as selected by the Borrower in a Loan
Request or as otherwise required by the terms of this Credit Agreement (A) for
any Base Rate Loan, the last day of the calendar month and (B) for any LIBOR
Rate Loan 1, 2, 3, or 6 months, and (ii) thereafter, each period commencing on
the last day of the next preceding Interest Period applicable to such Revolving
Loan and ending on the last day of one of the periods set forth above, as
selected by the Borrower in a Conversion Request; PROVIDED that all of the
foregoing provisions relating to Interest Periods are subject to the following:
(a) if any Interest Period with respect to a LIBOR Rate Loan
would otherwise end on a day that is not a Business Day, that Interest
Period shall be extended to the next succeeding Business Day unless the
result of such extension would be to carry such Interest Period into
another calendar month, in which event such Interest Period shall end
on the immediately preceding Business Day;
(b) if any Interest Period with respect to a Base Rate Loan
would end on a day that is not a Business Day, that Interest Period
shall end on the next succeeding Business Day;
(c) if the Borrower fails to give notice as provided in
ss.2.7, the Borrower shall be deemed to have requested a conversion of
the affected LIBOR Rate Loan to a Base Rate Loan and the continuance of
all Base Rate Loans as Base Rate Loans on the last day of the then
current Interest Period with respect thereto;
(d) any Interest Period relating to any LIBOR Rate Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day
of a calendar month; and
0
(e) any Interest Period relating to any LIBOR Rate Loan that would
otherwise extend beyond the Maturity Date shall end on the Maturity
Date.
INVESTMENTS. All loans, advances (other than commission, travel and
similar advances to officers, directors and employees made in the ordinary
course of business), extensions of credit (other than accounts receivable
arising in the ordinary course of business provided that in no event shall such
extension of credit exceed 180 days in accordance with its terms), deposit
account or contribution of capital to any Person or any investment in, or
purchase or other acquisition of, the Capital Stock of, or in respect of any
guaranty of the obligations of, any Person. In determining the aggregate amount
of Investments outstanding at any particular time: (i) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (ii) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(iii) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (iv) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (ii) may be
deducted when paid; and (v) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
ISSUING BANK. Bank of America.
LC GUARANTY. A guaranty or indemnity in form and substance satisfactory
to the Administrative Agent and the Issuing Bank pursuant to which the
Administrative Agent shall guaranty the payment or performance by the Borrower
of its reimbursement obligations in respect of Letters of Credit.
LENDER OR LENDERS. Bank of America and the other lending institutions
listed on SCHEDULE 1 hereto and any other person who becomes an assignee of any
rights and obligations of a Lender pursuant to ss.18 and, unless the context
otherwise requires, the Issuing Bank and the Cash Management Bank.
LETTER OF CREDIT. See ss.4.1.
LETTER OF CREDIT APPLICATION. With respect to any Letter of Credit
issued for the account of the Borrower or Quaker Textile hereunder, an
application for such Letter of Credit made to the Issuing Bank on its customary
form.
LETTER OF CREDIT FEE. See ss.4.6.
LIBOR BUSINESS DAY. Any day on which commercial banks are open for
international business (including dealings in U.S. dollar deposits) in London.
LIBOR LENDING OFFICE. Initially, the office of each Lender designated
as such by notice to the Borrower; thereafter, such other office of such Lender,
if any, that shall be making or maintaining LIBOR Rate Loans.
LIBOR RATE. For any Interest Period with respect to a LIBOR Rate Loan,
the rate of interest equal to (i) the rate determined by the Administrative
Agent at which Dollar deposits for such Interest Period are offered based on
information presented on Page 3750 of the Dow Xxxxx Market Service (formerly
known as the Telerate Service) or such other commercially available source
providing such information and designated by the Administrative Agent, as of
11:00 a.m. London time on the second LIBOR Business Day prior to the first day
of such Interest Period, divided by (ii) a number equal to 1.00 minus the
Eurocurrency Reserve Rate. If the rate described above does not appear on the
Dow Xxxxx Market Service or such other commercially available source providing
such information and designated by the Administrative Agent on any applicable
interest determination date, the LIBOR Rate shall be the rate (rounded upward,
if necessary, to the nearest one hundred-thousandth of a percentage point),
determined on the basis of the offered rates for deposits in Dollars for a
period of time comparable to such LIBOR Rate Loan which are offered by four
major banks in the London interbank market at approximately 11:00 a.m. London
time, on the second LIBOR Business Day prior to the first day of such Interest
Period as selected by the Administrative Agent. The principal London office of
each of the four major London banks will be requested to provide a quotation of
its Dollar deposit offered rate. If at least two such quotations are provided,
the rate for that date will be the arithmetic mean of the quotations. If fewer
than two quotations are provided as requested, the rate for that date will be
determined on the basis of the rates quoted for loans in Dollars to leading
European banks for a period of time comparable to such Interest Period offered
by major banks in New York City at approximately 11:00 a.m. New York City time,
on the second LIBOR Business Day prior to the first day of such Interest Period.
In the event that the Administrative Agent is unable to obtain any such
quotation as provided above, it will be considered that LIBOR Rate pursuant to a
LIBOR Rate Loan cannot be determined.
LIBOR RATE LOANS. All or any portion of the Revolving Loans bearing
interest calculated by reference to the LIBOR Rate.
LICENSES. See ss.6.26.
LIENS. Any encumbrance, mortgage, deed of trust, assignment,
attachment, deposit arrangement, lien (statutory, judgment or otherwise),
pledge, hypothecation, charge, restriction or other security interest, security
agreement, or any interest of any kind securing any obligation of any entity or
person, whether such interest is based on common law, civil law, statute or
contract.
LOAN DOCUMENTS. This Credit Agreement, the Notes, the Letter of Credit
Applications, the Letters of Credit, the Guaranties, the Security Documents, the
LC Guaranty, the Fee Letter, the Intercreditor Agreement, the Amendment and
Reaffirmation of Loan Documents and any other agreement between the Borrower
and/or any Guarantor and the Administrative Agent and/or any Lender relating to
fee arrangements.
LOAN REQUEST. See ss.2.6.1.
LOANS. The Revolving Loans.
MATURITY DATE. May 18, 2010.
MAXIMUM DRAWING AMOUNT. The maximum aggregate amount that the
beneficiaries may at any time draw under outstanding Letters of Credit issued
for the account of the Borrower or Quaker Textile, as such aggregate amount may
be reduced from time to time pursuant to the terms of the Letters of Credit
issued for the account of the Borrower or Quaker Textile.
MORTGAGED PROPERTY. Any Real Estate which is subject to any Mortgage.
MORTGAGES. (a) The mortgage(s) and, if applicable, deed(s) of trust,
dated on or prior to the Closing Date, from the Borrower to the Administrative
Agent with respect to the fee and, if applicable, leasehold interests of the
Borrower in the properties listed on SCHEDULE 1.1(A) hereto and (b) any other
deeds of mortgage, deeds of trust, or deeds of leasehold mortgage executed and
delivered to the Administrative Agent after the Closing Date pursuant to ss.7.16
hereof, in each case, in form and substance satisfactory to the Administrative
Agent.
MULTIEMPLOYER PLAN. Any multiemployer plan within the meaning of
ss.3(37) of ERISA maintained or contributed to by the Parent, the Borrower or
any ERISA Affiliate.
NET BOOK VALUE. At the relevant time of reference thereto, the net book
value of Eligible Inventory determined on a first-in first-out basis at lower of
cost or market as expressed on the Borrower's perpetual inventory report.
NET ORDERLY LIQUIDATION VALUE. With respect to any inventory, the net
appraised orderly liquidation value of such inventory, as determined from time
to time by the Administrative Agent by reference to the most recent appraisal of
the inventory of the Borrower performed by an appraisal firm acceptable to the
Administrative Agent.
NON-FINANCED CAPITAL EXPENDITURES Capital Expenditures paid in cash and
not financed with Indebtedness for borrowed money; PROVIDED that Capital
Expenditures financed with the proceeds of Revolving Loans shall be deemed to
constitute "Non-Financed Capital Expenditures" for purposes of this Agreement.
NON-U.S. LENDER. See ss.5.2.3.
NOTES. The Revolving Notes.
OBLIGATIONS. All indebtedness, obligations and liabilities of the
Parent and its Subsidiaries to any of the Lenders, the Issuing Bank, the
Administrative Agent, the Cash Management Bank or any of their Affiliates,
individually or collectively, existing on the date of this Credit Agreement or
arising thereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, arising or
incurred under this Credit Agreement or any of the other Loan Documents or any
Derivative Agreement or in respect of any of the Loans made, or any obligations
under Derivative Agreements or Cash Management Obligations or Reimbursement
Obligations incurred or any of the Letter of Credit Applications, Letters of
Credit or other instruments at any time evidencing any thereof.
ORIGINAL CLOSING DATE. May 18, 2005.
OUTSTANDING or OUTSTANDING. With respect to the Loans, the aggregate
unpaid principal thereof as of any date of determination.
PARENT. As defined in the preamble hereto.
PATENT AGREEMENT. The Patent Collateral Assignment and Security
Agreement, dated as of the Original Closing Date, made by the Borrower and the
Guarantors in favor of the Administrative Agent, in form and substance
satisfactory to the Administrative Agent.
PBGC. The Pension Benefit Guaranty Corporation created by ss.4002 of
ERISA and any successor entity or entities having similar responsibilities.
PERFECTION CERTIFICATES. The Perfection Certificates, dated as of the
Closing Date, in each case, in form and substance satisfactory to the
Administrative Agent.
PERMITTED LIENS. Liens permitted by ss.8.3 hereof.
PERSON. Any individual, corporation, limited liability company,
partnership, limited partnership, trust, unincorporated association, business,
or other legal entity, or any Governmental Authority.
PLEDGE AGREEMENT. The Pledge Agreement, executed by the Parent and the
Borrower in favor of the Administrative Agent, in form and substance
satisfactory to the Administrative Agent.
PROJECTIONS. Those certain treasury cash flow forecasts of receipts and
disbursements delivered to the Administrative Agent pursuant to Section 3(e) of
the Fifth Amendment (as defined in the Existing Credit Agreement), as such
forecasts may be updated from time to time pursuant to Section 7.4(n).
QUAKER MEXICO. Quaker Fabric Mexico, S.A. de C.V., a corporation
organized under the laws of Mexico.
QUAKER TEXTILE Quaker Textile Corporation, a Massachusetts corporation.
REAL ESTATE. All real property at any time owned or leased (as lessee
or sublessee) by the Parent or any Subsidiary of the Parent.
RECORD. The grid attached to a Note, or the continuation of such grid,
or any other similar record, including computer records, maintained by any
Lender with respect to any Loan referred to in such Note.
REGISTER. See ss.18.3.
REIMBURSEMENT OBLIGATION. The Borrower's obligation to reimburse the
Administrative Agent and the Lenders on account of any drawing under any Letter
of Credit issued for the account of the Borrower or Quaker Textile as provided
in ss.4.2.
RELATED PARTIES. With respect to any specified Person, such Person's
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person's Affiliates.
REQUIRED LENDERS. As of any date, any combination of two or more
Lenders, excluding Delinquent Lenders, holding Loans and participating interests
in the risks relating to Letters of Credit constituting at least fifty-one
percent (51%) of the outstanding Loans and Letters of Credit; or, if no Loans or
Letters of Credit are then outstanding, any combination of two or more Lenders,
excluding Delinquent Lenders, having at least fifty-one percent (51%) of the
Total Commitment.
RESERVES. As determined by the Administrative Agent in the exercise of
its reasonable discretion and upon written notice to the Borrower, such amounts
as the Administrative Agent may from time to time establish and revise (a) to
reflect (i) any Default or Event of Default or (ii) events, conditions,
contingencies or risks which do or may have a material adverse effect on the
business, assets, operations or financial condition of the Borrower and the
Guarantors (taken as a whole), or the ability of the Parent and its Subsidiaries
to fulfill their obligations under this Credit Agreement or the other Loan
Documents or (b) to reflect the belief of the Administrative Agent that any
Borrowing Base Certificate or other collateral report or financial information
furnished by or on behalf of the Parent and the Borrower to the Administrative
Agent or any of the Lenders is or may have been incomplete, inaccurate or
misleading in any material respect or (c) to reflect events, conditions,
contingencies or risks which would reasonably be expected to have a material
adverse effect on the value of the Collateral, taken as a whole, or the value of
the security interests and other rights of the Administrative Agent and the
Lenders in the Collateral (including the enforceability, perfection or priority
thereof) or (d) to reflect any costs and expenses (or anticipated costs and
expenses) determined by the Administrative Agent in order to realize on the
Collateral or (e) in respect of any Derivative Agreements or cash management or
similar arrangements.
RESTRICTED PAYMENT. In relation to the Parent and any Subsidiary of the
Parent, any (a) Distribution or (b) any payment made to any Affiliates of the
Parent or a Subsidiary of the Parent in respect of management, consulting or
other similar services provided to the Parent or a Subsidiary of the Parent.
REVOLVING EXPOSURE. At any time, the sum of the outstanding amount of
all Revolving Loans PLUS the Maximum Drawing Amount and all Unpaid Reimbursement
Obligations.
REVOLVING LOANS. The revolving credit loans to be made by the Lenders
to the Borrower (including Swing Line Loans) pursuant to ss.2.
REVOLVING NOTES. See ss.2.4.
XXXXXXXX-XXXXX ACT. The Xxxxxxxx-Xxxxx Act of 2002.
SECURITY AGREEMENT. The Security Agreement, dated as of the Original
Closing Date, among the Parent, the Borrower, Quaker Textile, Quaker Mexico and
the Administrative Agent.
SECURITY DOCUMENTS. The Guaranties, the Security Agreement, the
Copyright Mortgage, the Patent Agreement, the Pledge Agreement, the Mortgages,
the Trademark Agreement, and all other instruments and documents, including
without limitation Uniform Commercial Code financing statements and other
equivalent registration documents, control agreements and the like, required to
be executed or delivered pursuant to, or in connection with, this Credit
Agreement or any other Loan Document.
SENIOR MANAGEMENT. The chairman, president, chief executive officer,
chief financial officer, any executive vice president, any senior vice
president, the vice-president - legal and environmental, the treasurer, the
controller, or the general counsel of the Parent or a Subsidiary of the Parent.
SETTLEMENT. With respect to any Swing Line Loans, the making or
receiving of payments, in immediately available funds, by the Lenders, to the
extent necessary to cause each Lender's actual share of the outstanding amount
of Revolving Loans (after giving effect to any Loan Request) to be equal to such
Lender's Commitment Percentage of the outstanding amount of such Revolving Loans
(after giving effect to any Loan Request), in any case where, prior to such
event or action, the actual share is not so equal.
SETTLEMENT AMOUNT. See ss.2.10.1.
SETTLEMENT DATE. (a) Friday of each week, or if a Friday is not a
Business Day, the Business Day immediately following such Friday, (b) at the
option of the Administrative Agent, on any Business Day following a day on which
the account officers of the Administrative Agent active upon the Borrower's
account become aware of the existence of an Event of Default, (c) the Business
Day immediately following any day on which the Administrative Agent gives
written notice to the Lenders to effect a Settlement, (d) the Maturity Date and
(e) on the third (3rd) Business Day following any date on which the Borrower
requests a conversion of a Swing Line Loan to a LIBOR Rate Loan.
SETTLING LENDER. See ss.2.10.1.
SUBSIDIARY. Any corporation, association, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes) of the outstanding Voting Stock.
SWING LINE LOANS. See ss.2.6.2.
SYNTHETIC LEASE. Any lease of goods or other property, whether real or
personal, which is treated as an operating lease under GAAP and as a loan or
financing for U.S. income tax purposes.
TAXES. All present or future taxes, levies, imposts, duties,
deductions, withholdings, assessments, fees or other charges imposed by any
Governmental Authority, including any interest, additions to tax or penalties
applicable thereto.
TERM LOANS. The "Term Loans" as defined in the Term Loan Agreement as
in effect on the date hereof.
TERM LOAN AGENT. GB Merchant Partners, LLC, a Delaware limited
liability company.
TERM LOAN AGREEMENT. The Term Loan Agreement, dated as of the date
hereof, by and among the Credit Parties, certain financial institutions party
thereto and the Term Loan Agent, as agent for such financial institutions.
TERM LOAN DOCUMENTS. The "Loan Documents" as defined in the Term Loan
Agreement.
TERM LOAN OBLIGATIONS. The "Obligations" as defined in the Term Loan
Agreement as in effect on the date hereof.
TOTAL COMMITMENT. The sum of the Commitments of the Lenders, as in
effect from time to time.
TRADEMARK AGREEMENT. The Trademark Collateral Security and Pledge
Agreement, dated as of the Original Closing Date, made by the Borrower and the
Guarantors in favor of the Administrative Agent and the Assignments of
Trademarks executed in connection therewith, in form and substance satisfactory
to the Administrative Agent.
TYPE. As to any Revolving Loan, its nature as a Base Rate Loan or LIBOR
Rate Loan.
UCC. The Uniform Commercial Code, as the same may, from time to time,
be enacted and in effect in the Commonwealth of Massachusetts; PROVIDED, that to
the extent that the UCC is used to define any term herein or in any other Loan
Document and such term is defined differently in different Articles or Divisions
of the UCC, the definition of such term contained in Article or Division 9 shall
govern; PROVIDED FURTHER, that if, by reason of mandatory provisions of law, any
or all of the attachment, perfection or priority of, or remedies with respect to
the Administrative Agent's Lien on any Collateral is governed by the Uniform
Commercial Code as enacted and in effect in a jurisdiction other than the
Commonwealth of Massachusetts, the term "UCC" shall mean the Uniform Commercial
Code as enacted and in effect in such other jurisdiction solely for purposes of
the provisions thereof relating to such attachment, perfection, priority or
remedies and for purposes of definitions related to such provisions.
UNPAID REIMBURSEMENT OBLIGATION. The Reimbursement Obligations for
which the Borrower does not reimburse the Administrative Agent and the Lenders
on the date specified in, and in accordance with, ss.4.3.
VOTING STOCK. Stock or similar interests, of any class or classes
(however designated), the holders of which are at the time entitled, as such
holders, to vote for the election of a majority of the directors (or persons
performing similar functions) of the corporation, association, trust or other
business entity involved, whether or not the right so to vote exists by reason
of the happening of a contingency.
1.2. RULES OF INTERPRETATION.
(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to time in
accordance with its terms and the terms of this Credit Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) Unless otherwise expressly indicated, a reference to any law or
regulation includes any amendment or modification to such law or regulation.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
(e) Accounting terms not otherwise defined herein have the meanings
assigned to them by GAAP applied on a consistent basis by the accounting entity
to which they refer.
(f) The words "include", "includes" and "including" are not limiting.
(g) All terms not specifically defined herein or by GAAP, which terms
are defined in the Uniform Commercial Code as in effect in the Commonwealth of
Massachusetts, have the meanings assigned to them therein, with the term
"instrument" being that defined under Article 9 of the Uniform Commercial Code.
(h) Reference to a particular "ss." refers to that section of this
Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like import
shall refer to this Credit Agreement as a whole and not to any particular
section or subdivision of this Credit Agreement.
(j) Unless otherwise expressly indicated, in the computation of periods
of time from a specified date to a later specified date, the word "from" means
"from and including," the words "to" and "until" each mean "to but excluding,"
and the word "through" means "to and including."
(k) This Credit Agreement and the other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are, however, cumulative
and are to be performed in accordance with the terms thereof.
(l) This Credit Agreement and the other Loan Documents are the result
of negotiation among, and have been reviewed by counsel to, among others, the
Administrative Agent, the Parent and the Borrower and are the product of
discussions and negotiations among all parties. Accordingly, this Credit
Agreement and the other Loan Documents are not intended to be construed against
the Administrative Agent or any of the Lenders merely on account of the
Administrative Agent's or any Lender's involvement in the preparation of such
documents.
(m) If at any time any change in GAAP would affect the computation of
any financial ratio or requirement set forth in any Loan Document, and either
the Borrower or the Required Lenders shall so request, the Administrative Agent,
the Lenders and the Borrower shall negotiate in good faith to amend such ratio
or requirement to preserve the original intent thereof in light of such change
in GAAP (subject to the approval of the Required Lenders); provided that, until
so amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Borrower shall
provide to the Administrative Agent and the Lenders financial statements and
other documents required under this Credit Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.
2. REVOLVING LOANS.
2.1. REVOLVING LOANS. Subject to the terms and conditions set forth in
this Credit Agreement, each of the Lenders severally agrees to lend to the
Borrower and the Borrower may borrow, repay, and reborrow from time to time from
the Closing Date up to but not including the Maturity Date upon notice by the
Borrower to the Administrative Agent given in accordance with ss.2.6, such sums
as are requested by the Borrower up to a maximum aggregate amount outstanding
(after giving effect to all amounts requested) at any one time equal to such
Lender's Commitment MINUS such Lender's Commitment Percentage of the sum of (a)
the Maximum Drawing Amount and all Unpaid Reimbursement Obligations and (b) the
outstanding Swing Line Loans; PROVIDED that the Revolving Exposure (after giving
effect to all amounts requested) shall not at any time exceed the Gross
Availability. The Revolving Loans shall be made PRO RATA in accordance with each
such Lender's Commitment Percentage. Each request for a Revolving Loan hereunder
shall constitute a representation and warranty by the Borrower that the
conditions set forth in ss.10 and ss.11, in the case of the initial Revolving
Loans to be made on the Closing Date, and ss.11, in the case of all other
Revolving Loans, have been satisfied on the date of such request.
2.2. COMMITMENT FEE. The Borrower agrees to pay to the Administrative
Agent for the accounts of the Lenders in accordance with their respective
Commitment Percentages a commitment fee (the "Commitment Fee") calculated at the
rate of 0.50% per annum on the average daily amount during each calendar month
or portion thereof from the date hereof to the Maturity Date by which the Total
Commitment MINUS the sum of the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations exceeds the outstanding amount of Revolving Loans
(excluding Swing Line Loans) during such calendar month. The Commitment Fee
shall be payable monthly in arrears on the first day of each calendar month for
the immediately preceding calendar month commencing on the first such date
following the date hereof, with a final payment on the Maturity Date or any
earlier date on which the Commitments shall terminate.
2.3. REDUCTION OF COMMITMENTS. The Borrower shall have the right at any
time and from time to time upon five (5) Business Days prior written notice to
the Administrative Agent to reduce by $5,000,000 or an integral multiple of
$1,000,000 in excess thereof or to terminate entirely the Total Commitment in
excess of the Revolving Exposure at such time, whereupon the Commitments of the
Lenders shall be reduced pro rata in accordance with their respective Commitment
Percentages of the amount specified in such notice or, as the case may be,
terminated. Promptly after receiving any notice of the Borrower delivered
pursuant to this ss.2.3, the Administrative Agent will notify the Lenders of the
substance thereof. Upon the effective date of any such reduction or termination,
the Borrower shall pay to the Administrative Agent for the respective accounts
of such Lenders the full amount of any Commitment Fee then accrued on the amount
of the reduction. No reduction or termination of the Commitments may be
reinstated. If the Total Commitment is terminated or reduced by the Borrower in
whole or in part on or prior to the second anniversary of the Closing Date, the
Borrower shall pay to the Administrative Agent for the benefit of the Lenders an
early termination fee in an amount calculated as follows:
(a) if such termination or reduction is concluded on or prior
to the second anniversary of the Original Closing Date, an amount equal
to one-half of one percent (0.5%) of the Total Commitment immediately
prior to such termination or in the case of a partial reduction,
one-half of one percent (0.5%) of the amount of such reduction; or
(b) if such termination or reduction is concluded after the
second anniversary of the Original Closing Date, the Borrower will not
be required to pay an early termination fee.
For greater clarity, the Borrower acknowledges and agrees that as a direct and
proximate result of such termination under the aforesaid circumstances, the
Lenders will suffer a loss in an amount which is difficult to calculate and
determine with certainty and, therefore, as a result of the Borrower's and each
Lender's reasonable endeavour to ascertain and agree in advance to the amount
necessary to compensate the Lenders for said loss, the Borrower has agreed to
pay the aforesaid early termination fees described in this ss.2.3 in the
circumstances described.
2.4. THE REVOLVING NOTES. The Revolving Loans shall be evidenced by
separate promissory notes of the Borrower in substantially the form of EXHIBIT E
hereto (each a "Revolving Note"), dated as of the Closing Date (or such other
date on which a Lender may become a party hereto in accordance with ss.18
hereof) and completed with appropriate insertions. One Revolving Note shall be
payable to the order of each Lender in a principal amount equal to such Lender's
Commitment Percentage of the Total Commitment or, if less, the outstanding
amount of all Revolving Loans made by such Lender, plus interest accrued
thereon, as set forth below. The Borrower irrevocably authorizes each such
Lender to make or cause to be made, at or about the time of the Drawdown Date of
any Revolving Loan or at the time of receipt of any payment of principal on such
Lender's Revolving Note, an appropriate notation on such Lender's Revolving Note
Record reflecting the making of such Revolving Loan or (as the case may be) the
receipt of such payment. The outstanding amount of the Revolving Loans set forth
on such Lender's Revolving Note Record shall be PRIMA FACIE evidence of the
principal amount thereof owing and unpaid to such Lender, but the failure to
record, or any error in so recording, any such amount on such Lender's Revolving
Note Record shall not limit or otherwise affect the obligations of the Borrower
hereunder or under any Revolving Note to make payments of principal of or
interest on any Revolving Note when due.
2.5. INTEREST ON REVOLVING LOANS. Except as otherwise provided in
ss.5.11,
(a) Each Revolving Loan which is a Base Rate Loan shall bear
interest for the period commencing with the Drawdown Date thereof and
ending on the last day of the Interest Period with respect thereto at
the rate per annum equal to the Base Rate PLUS the Applicable Margin as
in effect from time to time applicable to Revolving Loans bearing
interest at the Base Rate.
(b) Each Revolving Loan which is a LIBOR Rate Loan shall bear
interest for the period commencing with the Drawdown Date thereof and
ending on the last day of the Interest Period with respect thereto at
the rate per annum equal to the LIBOR Rate determined for such Interest
Period PLUS the Applicable Margin as in effect from time to time
applicable to Revolving Loans bearing interest at the LIBOR Rate.
The Borrower promises to pay interest on each Revolving Loan in arrears on each
Interest Payment Date with respect thereto.
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2.6. REQUESTS FOR REVOLVING LOANS.
2.6.1. GENERAL. The Borrower shall give to the Administrative
Agent written notice in the form of EXHIBIT A hereto of each Revolving
Loan requested hereunder (a "Loan Request") no less than (a) one (1)
Business Day prior to the proposed Drawdown Date of any Base Rate Loan
and (b) three (3) Business Days prior to the proposed Drawdown Date of
any LIBOR Rate Loan. Each such notice shall specify (i) the principal
amount of the Revolving Loan requested, (ii) the proposed Drawdown Date
of such Revolving Loan, (iii) the Interest Period for such Revolving
Loan and (iv) the Type of such Revolving Loan. Promptly upon receipt of
any such notice, the Administrative Agent shall notify each of the
Lenders thereof. Each Loan Request shall be irrevocable and binding on
the Borrower and shall obligate the Borrower to accept the Revolving
Loan requested from such Lenders on the proposed Drawdown Date. Each
Loan Request with respect to a Base Rate Loan shall be in a minimum
aggregate amount of $500,000 or an integral multiple of $100,000 in
excess thereof and each Loan Request with respect to a LIBOR Rate Loan
shall be in a minimum aggregate amount of $1,000,000 or an integral
multiple of $100,000 in excess thereof.
2.6.2. SWING LINE. Notwithstanding the notice and minimum
amount requirements set forth in ss.2.6.1 but otherwise in accordance
with the terms and conditions of this Credit Agreement, the
Administrative Agent may, in its sole discretion and without conferring
with the Lenders, make Revolving Loans to the Borrower (a) by entry of
credits to the Borrower's operating account (No. 00000000) (the
"Operating Account") with the Cash Management Bank to cover checks or
other charges which the Borrower has drawn or made against such account
or (b) in an amount as otherwise requested by the Borrower; provided
that the maximum outstanding amount of advances made by the
Administrative Agent pursuant to this ss.2.6.2 (each a "Swing Line
Loan") shall not, at any time, exceed $5,000,000. The Borrower hereby
requests and authorizes the Administrative Agent to make from time to
time the Swing Line Loans by means of appropriate entries of such
credits sufficient to cover checks and other charges then presented for
payment from the Operating Account or as otherwise so requested. The
Borrower acknowledges and agrees that the making of the Swing Line
Loans shall, in each case, be subject in all respects to the provisions
of this Credit Agreement as if they were Revolving Loans covered by a
Loan Request including, without limitation, the limitations set forth
in ss.2.1 and the requirements that the applicable provisions of ss.10
(in the case of Swing Line Loans made on the Closing Date) and ss.11 be
satisfied. Swing Line Loans made pursuant to this ss.2.6.2 shall be
Base Rate Loans until converted in accordance with the provisions of
this Credit Agreement and, prior to a Settlement, such interest shall
be for the account of the Administrative Agent.
2.7. CONVERSION OPTIONS.
2.7.1. CONVERSION TO DIFFERENT TYPE OF REVOLVING LOAN. The
Borrower may elect from time to time to convert any outstanding
Revolving Loan to a Revolving Loan of another Type, provided that (a)
with respect to any such conversion of a LIBOR Rate Loan to a Base Rate
Loan, the Borrower shall give the Administrative Agent at least three
(3) Business Days prior written notice of such election; (b) with
respect to any such conversion of a Base Rate Loan to a LIBOR Rate
Loan, the Borrower shall give the Administrative Agent at least three
(3) Business Days prior written notice of such election; (c) with
respect to any such conversion of a LIBOR Rate Loan into a Base Rate
Loan, such conversion shall only be made on the last day of the
Interest Period with respect thereto and (d) no Revolving Loan may be
converted into, or continued as, a LIBOR Rate Loan when any Default or
Event of Default has occurred and is continuing. Promptly upon the
receipt of any such election, the Administrative Agent shall notify the
Lenders thereof. On the date on which such conversion is being made,
each Lender shall take such action as is necessary to transfer its
Commitment Percentage of such Revolving Loans to its Domestic Lending
Office or its LIBOR Lending Office, as the case may be. All or any part
of outstanding Revolving Loans of any Type may be converted into a
Revolving Loan of another Type as PROVIDED herein, provided that any
partial conversion with respect to -------- Revolving Loans shall be in
an aggregate principal amount of $1,000,000 or a whole multiple of
$100,000 in excess thereof. Each Conversion Request relating to the
conversion of a Revolving Loan to a LIBOR Rate Loan shall be
irrevocable by the Borrower.
1
2.7.2. CONTINUATION OF TYPE OF REVOLVING LOAN. Any Revolving
Loan of any Type may be continued as a Revolving Loan of the same Type
upon the expiration of an Interest Period with respect thereto by
compliance by the Borrower with the notice provisions contained in
ss.2.7.1; PROVIDED that no LIBOR Rate Loan may be continued as such
when any Default or Event of Default has occurred and is continuing,
but shall be automatically converted to a Base Rate Loan on the last
day of the first Interest Period relating thereto ending during the
continuance of any Default or Event of Default of which officers of the
Administrative Agent active upon the Borrower's account have actual
knowledge. In the event that the Borrower fails to provide any such
notice with respect to the continuation of any LIBOR Rate Loan, then
such LIBOR Rate Loan shall be automatically converted to a Base Rate
Loan on the last day of the first Interest Period relating thereto. The
Administrative Agent shall notify the Lenders thereof promptly when any
such automatic conversion contemplated by this ss.2.7 is scheduled to
occur.
2.7.3. LIBOR RATE LOANS. Any conversion to or from LIBOR Rate
Loans shall be in such amounts and be made pursuant to such elections
so that, after giving effect thereto, the aggregate principal amount of
all LIBOR Rate Loans having the same Interest Period shall not be less
than $1,000,000 or a whole multiple of $100,000 in excess thereof. No
more than ten (10) LIBOR Rate Loans having different Interest Periods
may be outstanding at any time.
2.8. FUNDS FOR REVOLVING LOANS.
2.8.1. FUNDING PROCEDURES FOR REVOLVING LOANS. Not later than
2 p.m. (Boston time) on the proposed Drawdown Date of any Revolving
Loans, each of the Lenders will make available to the Administrative
Agent, at the Administrative Agent's Office, in immediately available
funds, the amount of such Lender's Commitment Percentage of the amount
of the requested Revolving Loans. Upon receipt from such Lender of such
amount, and upon receipt of the documents required by ss.ss.10 and 11
and the satisfaction of the other conditions set forth therein, to the
extent applicable, the Administrative Agent will make available to the
Borrower the aggregate amount of such Revolving Loans made available to
the Administrative Agent by such Lenders. The failure or refusal of any
such Lender to make available to the Administrative Agent at the
aforesaid time and place on any Drawdown Date the amount of its
Commitment Percentage of the requested Revolving Loans shall not
relieve any other Lender of its several obligation hereunder to make
available to the Administrative Agent the amount of such other Lender's
Commitment Percentage of any requested Revolving Loans.
2.8.2. ADVANCES BY ADMINISTRATIVE AGENT FOR REVOLVING LOANS.
The Administrative Agent may, unless notified to the contrary by any
Lender prior to a Drawdown Date, assume that such Lender has made
available to the Administrative Agent on such Drawdown Date the amount
of such Lender's Commitment Percentage of the Revolving Loans to be
made on such Drawdown Date, and the Administrative Agent may (but it
shall not be required to), in reliance upon such assumption, make
available to the Borrower a corresponding amount. If any such Lender
makes available to the Administrative Agent such amount on a date after
such Drawdown Date, such Lender shall pay to the Administrative Agent
on demand an amount equal to the product of (a) the average computed
for the period referred to in clause (c) below, of the weighted average
interest rate paid by the Administrative Agent for federal funds
acquired by the Administrative Agent during each day included in such
period, times (b) the amount of such Lender's Commitment Percentage of
such Revolving Loans, times (c) a fraction, the numerator of which is
the number of days that elapse from and including such Drawdown Date to
the date on which the amount of such Lender's Commitment Percentage of
such Revolving Loans shall become immediately available to the
Administrative Agent, and the denominator of which is 360. A statement
of the Administrative Agent submitted to such Lender with respect to
any amounts owing under this paragraph shall be prima facie evidence of
the amount due and owing to the Administrative Agent by such Lender. If
the amount of such Lender's Commitment Percentage of such Revolving
Loans is not made available to the Administrative Agent by such Lender
within three (3) Business Days following such Drawdown Date, the
Administrative Agent shall be entitled to recover such amount from the
Borrower on demand, with interest thereon at the rate per annum
applicable to the Revolving Loans made on such Drawdown Date.
2
2.9. CHANGE IN BORROWING BASE. The Borrowing Base shall be determined
weekly (or at such other interval as may be specified pursuant to ss.7.4(f)) by
the Administrative Agent by reference to the Borrowing Base Certificate
delivered to the Lenders and the Administrative Agent pursuant to ss.7.4(f) and
other information obtained by or provided to the Administrative Agent. The
Administrative Agent shall give to the Borrower written notice of any change in
the Borrowing Base determined by the Administrative Agent, which notice shall be
effective upon its receipt by the Borrower.
2.10. SETTLEMENTS.
2.10.1. GENERAL. On each Settlement Date, the Administrative
Agent shall, not later than 11:00 a.m. (Boston time), give telephonic
or facsimile notice (a) to the Lenders and the Borrower of the
respective outstanding amount of Swing Line Loans made by the
Administrative Agent on behalf of the Lenders from the immediately
preceding Settlement Date through the close of business on the prior
day and (b) to such Lenders of the amount (a "Settlement Amount") that
each such Lender (a "Settling Lender") shall pay to effect a Settlement
of any Swing Line Loan. A statement of the Administrative Agent
submitted to such Lenders and the Borrower or to the Lenders with
respect to any amounts owing under this ss.2.10 shall be PRIMA FACIE
evidence of the amount due and owing. Each Settling Lender shall, not
later than 2:00 p.m. (Boston time) on such Settlement Date, effect a
wire transfer of immediately available funds to the Administrative
Agent in the amount of the Settlement Amount for such Settling Lender.
All funds advanced by such Lender as a Settling Lender pursuant to this
ss.2.10 shall for all purposes be treated as a Revolving Loan made by
such Settling Lender to the Borrower and all funds received by such
Lender pursuant to this ss.2.10 shall for all purposes be treated as
repayment of amounts owed with respect to Revolving Loans made by such
Lender. In the event that any bankruptcy, reorganization, liquidation,
receivership or similar cases or proceedings in which the Borrower is a
debtor prevent a Settling Lender from making any Revolving Loan to
effect a Settlement as contemplated hereby, such Settling Lender will
make such dispositions and arrangements with the other Lenders with
respect to such Revolving Loans, either by way of purchase of
participations, distribution, pro tanto assignment of claims,
subrogation or otherwise as shall result in each Lender's share of the
outstanding Revolving Loans being equal, as nearly as may be, to such
Lender's Commitment Percentage of the outstanding amount of the
Revolving Loans.
2.10.2. FAILURE TO MAKE FUNDS AVAILABLE. The Administrative
Agent may, unless notified to the contrary by any Settling Lender prior
to a Settlement Date, assume that such Settling Lender has made or will
make available to the Administrative Agent on such Settlement Date the
amount of such Settling Lender's Settlement Amount, and, if applicable,
the Administrative Agent may (but it shall not be required to), in
reliance upon such assumption, make available to the Borrower a
corresponding amount. If any Settling Lender makes available to the
Administrative Agent such amount on a date after such Settlement Date,
such Settling Lender shall pay to the Administrative Agent on demand an
amount equal to the product of (a) the average computed for the period
referred to in clause (c) below, of the weighted average interest rate
paid by the Administrative Agent for federal funds acquired by the
Administrative Agent during each day included in such period, times (b)
the amount of such Settlement Amount, times (c) a fraction, the
numerator of which is the number of days that elapse from and including
such Settlement Date to the date on which the amount of such Settlement
Amount shall become immediately available to the Administrative Agent,
and the denominator of which is 360. A statement of the Administrative
Agent submitted to such Settling Lender with respect to any amounts
owing under this ss.2.10.2 shall be prima facie evidence of the amount
due and owing to the Administrative Agent by such Settling Lender. If
such Settling Lender's Settlement Amount is not made available to the
Administrative Agent by such Settling Lender within three (3) Business
Days following such Settlement Date, the Administrative Agent shall be
entitled to recover such amount from the Borrower on demand, with
interest thereon at the rate per annum applicable to the Revolving
Loans as of such Settlement Date.
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2.10.3. NO EFFECT ON OTHER LENDERS. The failure or refusal of
any Settling Lender to make available to the Administrative Agent at
the aforesaid time and place on any Settlement Date the amount of such
Settling Lender's Settlement Amount shall not (a) relieve any other
Settling Lender from its several obligations hereunder to make
available to the Administrative Agent the amount of such other Settling
Lender's Settlement Amount or (b) impose upon any Lender, other than
the Settling Lender so failing or refusing, any liability with respect
to such failure or refusal or otherwise increase the Commitment of such
other Lender.
2.11. REPAYMENTS OF REVOLVING LOANS PRIOR TO EVENT OF DEFAULT.
2.11.1. CREDIT FOR FUNDS RECEIVED IN CONCENTRATION ACCOUNT.
Prior to the occurrence of an Event of Default as to which the account
officers of the Administrative Agent active upon the Borrower's account
have actual knowledge, (a) all funds and cash proceeds in the form of
money, checks and like items received in the Concentration Account (as
defined in and as contemplated by ss.7.17.1) shall be credited to the
Borrower, on the same Business Day on which the Administrative Agent
determines that good collected funds have been received, and, prior to
the receipt of good collected funds, on a provisional basis until final
receipt of good collected funds, (b) all funds and cash proceeds in the
form of a wire transfer received in the Concentration Account as
contemplated by ss.7.17 shall be credited to the Borrower on the same
Business Day as the Cash Management Bank's receipt of such amounts in
good collected funds, (c) all funds and cash proceeds in the form of an
automated clearing house transfer received in the Concentration Account
as contemplated by ss.7.17 shall be credited to the Borrower, on the
next Business Day following the Cash Management Bank's receipt of such
amounts in good collected funds. For purposes of the foregoing
provisions of this ss.2.11.1, the Cash Management Bank shall not be
deemed to have received any such funds or cash proceeds on any day
unless received by the Cash Management Bank before 2:30 p.m. (Boston
time) on such day. The Borrower further acknowledges and agrees that
any such provisional credits or credits in respect of wire or automatic
clearing house funds transfers shall be subject to reversal if final
collection in good funds of the related item is not received by, or
final settlement of the funds transfer is not made in favor of, the
Cash Management Bank in accordance with Cash Management Bank's
customary procedures and practices for collecting provisional items or
receiving settlement of funds transfers.
4
2.11.2. APPLICATION OF PAYMENTS PRIOR TO EVENT OF DEFAULT.
(a) [Intentionally Omitted].
(b) Prior to the occurrence of an Event of Default of which
the account officers of the Administrative Agent active on the
Borrower's account have knowledge, all funds transferred to the
Concentration Account and for which the Borrower has received credits
shall, subject to the Intercreditor Agreement, be applied to the
Obligations of the Borrowers as follows:
(i) first, to pay amounts then due and payable by the
Borrower under this Credit Agreement, the Notes and the other
Loan Documents and in respect of any other Obligations of the
Borrower;
(ii) second, to repay Swing Line Loans made by the
Administrative Agent pursuant to ss.2.6.2 and for which
Settlement has not then been made;
(iii) third, to repay Revolving Loans which are Base
Rate Loans;
(iv) fourth, to repay Revolving Loans which are LIBOR
Rate Loans; and
(v) fifth, except as otherwise required by
ss.ss.4.2(b) and (c), to the Operating Account.
(c) All prepayments of LIBOR Rate Loans prior to the end of an
Interest Period shall obligate the Borrower to pay any breakage costs
associated with such LIBOR Rate Loans in accordance with ss.5.10. Prior
to the occurrence of an Event of Default, the Borrower may elect to
avoid such breakage costs by providing to the Administrative Agent cash
in an amount sufficient to cash collateralize such LIBOR Rate Loans,
but in no event shall the Borrower be deemed to have paid such LIBOR
Rate Loans until such cash has been paid to the Administrative Agent
and has been applied to such LIBOR Rate Loans. Until such application,
the Administrative Agent may elect to cause such cash collateral to be
deposited into either (i) a cash collateral account pursuant to the
terms of a cash collateral agreement executed by the Borrower and the
Administrative Agent and in form and substance satisfactory to the
Administrative Agent or (ii) the Operating Account with appropriate
instructions prohibiting the Borrower's withdrawal of such funds so
long as they remain cash collateral. In each such case, the Borrower
agrees to execute and deliver to the Administrative Agent such
instruments and documents, including Uniform Commercial Code or other
financing statements and agreements with any third party depository
banks, as the Administrative Agent may request.
(d) All prepayments of the Revolving Loans pursuant to this
ss.2.11.2 shall be allocated among the Lenders making such Revolving
Loans, in proportion, as nearly as practicable, to the respective
unpaid principal amount of such Revolving Loans outstanding, with
adjustments to the extent practicable to equalize any prior payments or
repayments not exactly in proportion. Prior to any Settlement Date,
however, all prepayments of the Revolving Loans shall be applied in
accordance with this ss.2.11.2, first to outstanding Revolving Loans of
the Administrative Agent.
2.12. REPAYMENTS OF LOANS AFTER EVENT OF DEFAULT. Following the
occurrence and during the continuance of an Event of Default of which the
account officers of the Administrative Agent active on the Borrower's account
have knowledge, all funds transferred to the Concentration Account and for which
the Borrower has received credits shall be, subject to the Intercreditor
Agreement, applied to the Obligations in accordance with ss.12.4.
2.13. [INTENTIONALLY OMITTED].
2.14. [INTENTIONALLY OMITTED].
2.15. [INTENTIONALLY OMITTED].
2.16. ADMINISTRATIVE AGENT ADVANCES. Notwithstanding anything to the
contrary contained herein (including, without limitation, the borrowing
limitations set forth in ss.2.1 hereof), but subject to the limitations set
forth in the proviso contained in this ss.2.16, the Administrative Agent is
hereby authorized by the Borrower and the Lenders, from time to time at the
request of the Borrower but in the Administrative Agent's sole discretion, (a)
after the occurrence and during the continuance of a Default or an Event of
Default, or (b) at any time that any of the other applicable conditions
precedent set forth in ss.11 have not been satisfied, to make Revolving Loans to
the Borrower on behalf of the Lenders which the Administrative Agent, in its
reasonable business judgment, deems necessary or desirable (i) to preserve or
protect the Collateral, or any portion thereof, (ii) to enhance the likelihood
of, or maximize the amount of, repayment of the Loans and other Obligations
(other than amounts in respect of Cash Management Obligations), or (iii) to pay
any other amount chargeable to the Borrower pursuant to the terms of this
Agreement (other than amounts in respect of Cash Management Obligations),
including, without limitation, costs, fees and expenses as described in ss.15
(any of the advances described in this ss.2.16 being hereinafter referred to as
"Administrative Agent Advances"); PROVIDED, that (w) the Administrative Agent
Advances shall be due and payable on the earlier of (1) demand by the
Administrative Agent and (2) sixty (60) days after the making thereof, (x) the
aggregate outstanding principal amount of all Administrative Agent Advances
shall not exceed $2,500,000 and (y) the Administrative Agent shall not make any
Administrative Agent Advance to the Borrower if the amount thereof would cause
the Revolving Exposure to exceed the Total Commitment. The Administrative Agent
Advances shall be repayable on demand and secured by the Collateral, shall
constitute Revolving Loans and Obligations hereunder, and shall bear interest at
the rate applicable to Base Rate Loans which are Revolving Loans from time to
time. The Administrative Agent shall notify each Lender and the Borrower in
writing of each such Administrative Agent Advance promptly following the making
thereof, which notice shall include a description of the purpose of such
Administrative Agent Advance. Each Lender irrevocably agrees to purchase from
the Administrative Agent, upon demand, its pro rata share (in accordance with
its Commitment Percentage) of the amount of the outstanding Administrative Agent
Advances. Until such purchase, all payments in respect of the Administrative
Agent Advances shall be for the account of the Administrative Agent.
3. REPAYMENT OF LOANS.
3.1. REVOLVING LOANS.
3.1.1. MATURITY. The Borrower promises to pay on the Maturity
Date, and there shall become absolutely due and payable on the Maturity
Date, all of the Revolving Loans outstanding on such date, together
with any and all accrued and unpaid interest thereon and all other fees
and other amounts then accrued and outstanding with respect thereto.
3.1.2. MANDATORY REPAYMENTS OF REVOLVING LOANS. If at any time
the sum of the Revolving Exposure exceeds the Gross Availability, then
the Borrower shall immediately pay the amount of such excess to the
Administrative Agent for the respective accounts of the Lenders for
application: first, to any Swing Line Loans outstanding, second, to any
Unpaid Reimbursement Obligations; third, to all Revolving Loans
advanced to the Borrower; and fourth, to provide to the Administrative
Agent cash collateral for Reimbursement Obligations as contemplated by
ss.4.2(b) and (c). Each payment of any Unpaid Reimbursement Obligation
or prepayment of Revolving Loans shall be allocated among the Lenders,
in proportion, as nearly as practicable, to each Reimbursement
Obligation or (as the case may be) the respective unpaid principal
amount of each Lender's Revolving Note or loan account (as the case may
be) with adjustments to the extent practicable to equalize any prior
payments or repayments not exactly in proportion. In addition, the
Borrower shall repay the Revolving Loans in accordance with
ss.3.2.1(d).
3.1.3. OPTIONAL REPAYMENTS OF REVOLVING LOANS. The Borrower
shall have the right, at their election, to repay the outstanding
amount of the Revolving Loans, as a whole or in part, at any time
without penalty or premium, provided that any full or partial
prepayment of the outstanding amount of any LIBOR Rate Loans pursuant
to this ss.3.1.3 may be made only on the last day of the Interest
Period relating thereto (unless breakage costs are paid by the Borrower
pursuant to ss.5.10 or cash collateral is provided in accordance with
ss.2.11.2(c)) . The Borrower shall provide to the Administrative Agent,
no later than 10:00 a.m., Boston time, at least three (3) Business Days
prior written notice of any proposed prepayment pursuant to this
ss.3.1.3, specifying the proposed date of prepayment of any LIBOR Rate
Loans and the principal amount to be prepaid. Each such partial
prepayment of the Revolving Loans shall be accompanied by the payment
of accrued interest on the principal prepaid to the date of prepayment
and shall be applied, in the absence of instruction by the Borrower,
first to the principal of Base Rate Loans which are Revolving Loans and
second to the principal of LIBOR Rate Loans which are Revolving Loans.
Each partial prepayment shall be allocated among the Lenders, in
proportion, as nearly as practicable, to the respective unpaid
principal amount of each such Lender's Revolving Note or loan account,
as the case may be, with adjustments to the extent practicable to
equalize any prior repayments not exactly in proportion.
3.2. MANDATORY PREPAYMENTS.
3.2.1. ADDITIONAL MANDATORY PREPAYMENTS OF REVOLVING LOANS.
(a) [Intentionally Omitted].
(b) [Intentionally Omitted].
(c) Concurrently with the receipt by the Parent or any
Subsidiary of the Parent of:
(i) net cash proceeds from any Asset Sales by the
Parent or such Subsidiary (other than the sale, lease, license
or other disposition of assets in the ordinary course of
business consistent with past practices);
(ii) net cash proceeds from the issuance by the
Parent or such Subsidiary of any debt (other than debt
permitted under ss.8.2) or equity securities (other than
equity securities issued in connection with any compensatory
employee benefit or option plan); or
(iii) net cash proceeds received by the Parent or
such Subsidiary from Casualty Events which have not been
utilized by the Parent or such Subsidiary to repair or replace
the property so damaged, destroyed or taken within one hundred
and eighty (180) days of receipt of such proceeds;
0
the Borrower shall pay to the Administrative Agent for the
respective accounts of the Lenders an amount equal to one
hundred percent (100%) of such proceeds, to be applied in the
manner set forth in ss.3.2.1(d); PROVIDED that (A) to the
extent that any such amounts received as a result of any Asset
Sale of, or any Casualty Event related to, Fixed Asset
Collateral, are applied to prepay the Term Loans, such amounts
shall not be required to be applied to prepay the Loans
pursuant to this ss.3.2.1(c) and (B) the Borrower shall only
be required to apply 50% pursuant to this ss.3.2.1(c) of the
net cash proceeds from the issuance by the Parent or any
Subsidiary of any debt or equity securities so long as 50% of
such proceeds are applied to prepay the Term Loans.
Notwithstanding the foregoing, the provisions of this
ss.3.2.1(c) shall not impair any restrictions set forth in the
Loan Documents with respect to the incurrence of Indebtedness
or Asset Sales by the Parent or any of its Subsidiaries.
(d) All payments made pursuant to ss.3.2.1(c) shall be applied
to repay the outstanding principal amount of the Revolving Loans, with
a permanent reduction of the Total Commitment in the amount of such
Revolving Loan prepayment required under this ss.3.2.1 and
corresponding permanent reductions of each Lender's Commitment. Such
mandatory prepayments shall be allocated among the Lenders in
proportion, as nearly as practicable, to the respective outstanding
amounts of each such Lender's Notes or loan accounts, as the case may
be, with adjustments to the extent practicable to equalize any prior
prepayments not exactly in proportion.
4. LETTERS OF CREDIT.
4.1. LETTER OF CREDIT COMMITMENTS.
4.1.1. COMMITMENT TO ISSUE LETTERS OF CREDIT. Subject to the
terms and conditions hereof and the execution and delivery by the
Borrower of a letter of credit application on the Issuing Bank's
customary form (a "Letter of Credit Application"), the Administrative
Agent on behalf of the Lenders and in reliance upon the agreement of
such Lenders set forth in ss.4.1.4 and upon the representations and
warranties of the Borrower contained herein, agrees to (a) cause the
Issuing Bank to issue, extend and renew for the account of the Borrower
or Quaker Textile one or more standby or documentary letters of credit
(each individually, a "Letter of Credit"), in such form as may be
requested from time to time by the Borrower and agreed to by the
Administrative Agent and the Issuing Bank and (b) enter into an LC
Guaranty to support the reimbursement obligations of the Borrower with
respect to Letters of Credit requested by the Borrower; PROVIDED,
HOWEVER, that after giving effect to such request, (i) the sum of the
aggregate Maximum Drawing Amount on all Letters of Credit and all
Unpaid Reimbursement Obligations shall not exceed $7,500,000 at any one
time and (ii) the Revolving Exposure shall not exceed the Gross
Availability at such time.
4.1.2. LETTER OF CREDIT APPLICATIONS. Each Letter of Credit
Application shall be completed to the satisfaction of the
Administrative Agent and the Issuing Bank. In the event that any
provision of any Letter of Credit Application shall be inconsistent
with any provision of this Credit Agreement, then the provisions of
this Credit Agreement shall, to the extent of any such inconsistency,
govern.
4.1.3. TERMS OF LETTERS OF CREDIT. Each Letter of Credit
issued, extended or renewed hereunder shall, among other things, (a)
provide for the payment of sight drafts for honor thereunder when
presented in accordance with the terms thereof and when accompanied by
the documents described therein, and (b) have an expiry date no later
than the date which is fourteen (14) days (or, if the Letter of Credit
is confirmed by a confirmer or otherwise provides for one or more
nominated persons, forty-five (45) days) prior to the Maturity Date.
Subject to clause (b) above, each Letter of Credit shall expire
(without giving effect to any extension thereof by reason of an
interruption of business) at or prior to the close of business 365
days, in the case of standby Letters of Credit, or 180 days, in the
case of documentary Letters of Credit, after the date of the issuance
of such Letter of Credit (or, in the case of any renewal or extension
thereof, 365 days or 180 days, as applicable, after such renewal or
extension) provided that the Issuing Bank may, in its sole and absolute
discretion, agree to issue any such standby Letter of Credit providing
for automatic extensions thereof to a date not later than 365 days
beyond its current expiration date; PROVIDED that any such automatic
extension Letter of Credit must permit the Issuing Bank to prevent any
such extension at least once in each twelve-month period (commencing
with the date of issuance of such Letter of Credit) by giving prior
notice to the beneficiary thereof not later than a day in each such
twelve-month period to be agreed upon at the time such Letter of Credit
is issued. Each Letter of Credit so issued, extended or renewed shall
be subject to the Uniform Customs and Practice for Documentary Credits
(1993 Revision), International Chamber of Commerce Publication No. 500
or any successor version thereto adopted by the Issuing Bank in the
ordinary course of its business as a letter of credit issuer and in
effect at the time of issuance of such Letter of Credit (the "Uniform
Customs") or, in the case of a standby Letter of Credit, either the
Uniform Customs or the International Standby Practices (ISP98),
International Chamber of Commerce Publication No. 590, or any successor
code of standby letter of credit practices among banks adopted by the
Issuing Bank in the ordinary course of its business as a standby letter
of credit issuer and in effect at the time of issuance of such Letter
of Credit.
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4.1.4. REIMBURSEMENT OBLIGATIONS OF LENDERS. Each Lender
severally agrees that it shall be absolutely liable, without regard to
the occurrence of any Default or Event of Default or any other
condition precedent whatsoever, to the extent of such Lender's
Commitment Percentage, to reimburse the Administrative Agent on demand
for the amount of each draft paid by the Issuing Bank under each Letter
of Credit issued for the account of the Borrower or Quaker Textile and
each payment made by the Administrative Agent to the Issuing Bank under
the LC Guaranty relating to any Letter of Credit issued for the account
of the Borrower or Quaker Textile to the extent that such amount is not
reimbursed by the Borrower pursuant to ss.4.2 (such agreement by a
Lender being called herein the "Letter of Credit Participation" of such
Lender).
4.1.5. PARTICIPATIONS OF LENDERS. Each such payment made by a
Lender shall, unless the applicable Reimbursement Obligation has been
otherwise funded as a Revolving Loan bearing interest at the Base Rate
pursuant to ss.4.2, be treated as the purchase by such Lender of a
participating interest in the Borrower's Reimbursement Obligation under
ss.4.2 in an amount equal to such payment. To that extent, each Lender
shall share in accordance with its participating interest in any
interest which accrues pursuant to ss.4.2.
4.2. REIMBURSEMENT OBLIGATION OF THE BORROWER. In order to induce the
Administrative Agent to cause the Issuing Bank to issue, extend and renew each
Letter of Credit for the account of the Borrower or Quaker Textile, the Borrower
agrees to reimburse or pay to the Administrative Agent, for the account of the
Administrative Agent and/or the Issuing Bank or (as the case may be) the
Lenders, with respect to each Letter of Credit issued, extended or renewed for
the Borrower's or Quaker Textile's account,
(a) except as otherwise expressly provided in ss.ss.4.2(b) and
(c), on each date that any draft presented under such Letter of Credit
is honored by the Issuing Bank, or the Issuing Bank or the
Administrative Agent otherwise makes a payment with respect thereto or
the Administrative Agent makes any payment under the LC Guaranty, (i)
the amount paid by the Issuing Bank or the Administrative Agent under
or with respect to such Letter of Credit, and (ii) the amount of any
taxes, fees, charges or other costs and expenses whatsoever incurred by
the Issuing Bank or Administrative Agent or any Lender in connection
with any payment made by the Issuing Bank, Administrative Agent or any
Lender under, or with respect to, such Letter of Credit; PROVIDED that,
subject to the conditions to borrowing set forth herein, payment of
each Reimbursement Obligation by the Borrower under this ss.4.2(a)
shall be made through the automatic funding of a Revolving Loan bearing
interest at the Base Rate applicable to Revolving Loans in an amount
equal to the amount of such Reimbursement Obligation, and the Borrower
hereby irrevocably authorizes and directs the Administrative Agent and
Issuing Bank to take such actions as may be necessary to effectuate
such automatic funding of any such Base Rate Loans;
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(b) upon the reduction (but not termination) of the Total
Commitment to an amount less than the Maximum Drawing Amount, an amount
equal to such difference, which amount shall be held by the
Administrative Agent for the benefit of the Lenders and the
Administrative Agent as cash collateral for all Reimbursement
Obligations, and
(c) upon the termination of the Total Commitment, or the
acceleration of the Reimbursement Obligations with respect to all
Letters of Credit issued for the account of the Borrower or Quaker
Textile in accordance with ss.12, an amount equal to the then Maximum
Drawing Amount on all Letters of Credit issued for the account of the
Borrower or Quaker Textile, which amount shall be held by the
Administrative Agent for the benefit of the Lenders and the
Administrative Agent as cash collateral for all Reimbursement
Obligations.
Each such payment shall be made to the Administrative Agent at the
Administrative Agent's Office in immediately available funds. Interest on any
and all amounts remaining unpaid by the Borrower under this ss.4.2 at any time
from the date such amounts become due and payable (whether as stated in this
ss.4.2, by acceleration or otherwise) until payment in full (whether before or
after judgment) shall be payable to the Administrative Agent on demand at the
Default Rate.
4.3. LETTER OF CREDIT PAYMENTS. If any draft shall be presented or
other demand for payment shall be made under any Letter of Credit, the
Administrative Agent shall notify the Borrower of the date and amount of the
draft presented or demand for payment and of the date and time when it expects
to pay such draft or honor such demand for payment. If the Borrower fails to
reimburse the Administrative Agent as provided in ss.4.2 on or before the date
that such draft is paid or other payment is made by the Issuing Bank or the
Administrative Agent or, as a result of the applicable borrowing limits
described therein being exceeded such Reimbursement Obligations are not
satisfied by the making of a Revolving Loan bearing interest at the Base Rate
applicable to Revolving Loans, the Administrative Agent may at any time
thereafter notify the Lenders of the amount of any such Unpaid Reimbursement
Obligation. No later than 2:00 p.m. (Boston time) on the Business Day next
following the receipt of such notice, each such Lender shall make available to
the Administrative Agent, at the Administrative Agent's Office, in immediately
available funds, such Lender's Commitment Percentage of such Unpaid
Reimbursement Obligation, together with an amount equal to the product of (a)
the average, computed for the period referred to in clause (c) below, of the
weighted average interest rate paid by the Administrative Agent for federal
funds acquired by the Administrative Agent during each day included in such
period, times (b) the amount equal to such Lender's Commitment Percentage of
such Unpaid Reimbursement Obligation, times (c) a fraction, the numerator of
which is the number of days that elapse from and including the date the Issuing
Bank or the Administrative Agent paid the draft presented for honor or otherwise
made payment to the date on which such Lender's Commitment Percentage of such
Unpaid Reimbursement Obligation, shall become immediately available to the
Administrative Agent, and the denominator of which is 360. The responsibility of
the Issuing Bank and the Administrative Agent to the Borrower and the Lenders
shall be only to determine that the documents (including each draft) delivered
under each Letter of Credit in connection with such presentment shall be in
conformity in all material respects with such Letter of Credit.
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4.4. OBLIGATIONS ABSOLUTE. The Borrower's obligations under this ss.4
shall be absolute and unconditional under any and all circumstances and
irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which the Borrower or Quaker Textile may have or have had against the Issuing
Bank or the Administrative Agent, any Lender or any beneficiary of a Letter of
Credit. The Borrower further agrees with the Administrative Agent and the
Lenders that none of the Issuing Bank, the Administrative Agent and the Lenders
shall be responsible for, and the Borrower's Reimbursement Obligations under
ss.4.2 shall not be affected by, among other things, the validity or genuineness
of documents or of any endorsements thereon, even if such documents should in
fact prove to be in any or all respects invalid, fraudulent or forged, or any
dispute between or among the Borrower or Quaker Textile, the beneficiary of any
Letter of Credit or any financing institution or other party to which any Letter
of Credit may be transferred or any claims or defenses whatsoever of the
Borrower or Quaker Textile against the beneficiary of any Letter of Credit or
any such transferee. None of the Issuing Bank, the Administrative Agent and the
Lenders shall be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit. The Borrower agrees that
any action taken or omitted by the Issuing Bank, the Administrative Agent or any
Lender under or in connection with each Letter of Credit and the related drafts
and documents, if done in good faith and in the absence of gross negligence,
shall be binding upon the Borrower and Quaker Textile and shall not result in
any liability on the part of the Issuing Bank, the Administrative Agent or any
Lender to the Borrower or Quaker Textile.
4.5. RELIANCE BY ISSUER. To the extent not inconsistent with ss.4.4,
the Issuing Bank and the Administrative Agent shall be entitled to rely, and
shall be fully protected in relying upon, any Letter of Credit, draft, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document believed by such Person 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, independent accountants and other experts selected
by the Issuing Bank or the Administrative Agent. Each of the Issuing Bank and
the Administrative Agent shall be fully justified in failing or refusing to take
any action under this Credit Agreement unless it shall first have received such
advice or concurrence of the Required Lenders as they reasonably deem
appropriate or it shall first be indemnified to its reasonable satisfaction by
the other 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
Issuing Bank and the Administrative Agent shall in all cases be fully protected
in acting, or in refraining from acting, under this Credit Agreement 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 the
Lenders and all future holders of the Revolving Notes or of a Letter of Credit
Participation.
4.6. LETTER OF CREDIT FEE. The Borrower shall pay a fee (in each case,
a "Letter of Credit Fee") to the Administrative Agent, in respect of each Letter
of Credit issued for the account of the Borrower or Quaker Textile, (a) in an
amount equal to the Applicable Margin per annum with respect to LIBOR Rate Loans
that are Revolving Loans on the available amount of each such Letter of Credit,
which Letter of Credit Fee shall be for the accounts of the Lenders in
accordance with their respective Commitment Percentages and (b) in an amount
equal to one-eighth of one percent (0.125%) per annum on the available amount of
each such Letter of Credit, which amount shall be for the account of the
Administrative Agent or the Issuing Bank as a fronting fee. The Letter of Credit
Fee shall be paid monthly in arrears on the first Business Day of each month for
the immediately preceding calendar month. In respect of each Letter of Credit
issued for the account of the Borrower or Quaker Textile, the Borrower shall
also pay to the Administrative Agent for the Issuing Bank's or the
Administrative Agent's own account, at such other time or times as such charges
are customarily made by the Issuing Bank or the Administrative Agent, the
Issuing Bank's and/or the Administrative Agent's customary issuance, amendment,
negotiation, payment or document examination and other administrative fees as in
effect from time to time.
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4.7. EXISTING LETTERS OF CREDIT. SCHEDULE 4.7 contains a list of
certain letters of credit issued prior to the Closing Date for the account of
the Borrower or Quaker Textile under the Existing Credit Agreement (the
"Existing Letters of Credit"). On the Closing Date, (a) the Existing Letters of
Credit shall be deemed to be Letters of Credit issued pursuant to this ss.4 and
shall be subject to all of the provisions applicable to Letters of Credit under
this Credit Agreement and (b) all liabilities of the Borrower with respect to
the Existing Letters of Credit shall constitute Obligations of the Borrower with
respect to Letters of Credit in accordance with this Credit Agreement and the
other Loan Documents as though the Borrower had delivered a Letter of Credit
Application under this Credit Agreement. The letter of credit fees owing with
respect to the Existing Letters of Credit under ss.4.6 of the Existing Credit
Agreement shall be calculated as of the Closing Date and shall be paid in full
at the time Letter of Credit Fees under ss.4.6 are required to be paid. From and
after the Closing Date, the Borrower shall pay Letter of Credit Fees and such
other fees as provided in ss.4.6, in each case when due pursuant to ss.4.6, with
respect to each of the Existing Letters of Credit.
5. CERTAIN GENERAL PROVISIONS.
5.1. FEES.
5.1.1. ADMINISTRATIVE AGENT'S FEE. The Borrower shall pay to
the Administrative Agent, for its own account, an administrative
agent's fee as set forth in the Fee Letter (the "Administrative Agent's
Fee"), in the amounts and at the times referred to therein.
5.1.2. CLOSING FEE. The Borrower shall pay to the
Administrative Agent on the Closing Date, for the pro rata account of
the Lenders, a closing fee in the amount of $437,500 (the "Closing
Fee").
5.1.3. OTHER FEES. The Borrower shall pay to the
Administrative Agent on the Closing Date any additional fees set forth
in the Fee Letter, in the amounts and at the times referred to therein.
5.2. FUNDS FOR PAYMENTS.
5.2.1. PAYMENTS TO ADMINISTRATIVE AGENT. All payments of
principal and interest on Loans and all Reimbursement Obligations, Fees
and any other amounts due hereunder or under any of the other Loan
Documents (unless the provisions of this Credit Agreement require
otherwise) shall be made on the due date thereof to the Administrative
Agent in Dollars for the respective accounts of the Lenders and the
Administrative Agent, at the Administrative Agent's Office or at such
other place that the Administrative Agent may from time to time
designate, in each case no later than 12:00 noon (Boston,
Massachusetts, time or other local time at the place of payment) and in
immediately available funds.
5.2.2. NO OFFSET, ETC. All payments by the Borrower hereunder
and under any of the other Loan Documents shall be made without
recoupment, setoff or counterclaim and free and clear of and without
deduction for any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings, compulsory loans, restrictions or conditions
of any nature now or hereafter imposed or levied by any jurisdiction or
any political subdivision thereof or taxing or other authority therein
(other than Excluded Taxes) unless the Borrower is compelled by law to
make such deduction or withholding. If any such obligation is imposed
upon the Borrower with respect to any amount payable by it hereunder or
under any of the other Loan Documents, the Borrower will pay to the
Administrative Agent, for the account of the Lenders or (as the case
may be) the Administrative Agent, on the date on which such amount is
due and payable hereunder or under such other Loan Document, such
additional amount in Dollars as shall be necessary to enable the
Lenders or the Administrative Agent to receive the same net amount
which the Lenders or the Administrative Agent would have received on
such due date had no such obligation been imposed upon the Borrower.
The Borrower will deliver promptly to the Administrative Agent
certificates or other valid vouchers for all taxes or other charges
deducted from or paid with respect to payments made by the Borrower
hereunder or under such other Loan Document.
5.2.3. NON-U.S. LENDERS. Each Lender and the Administrative
Agent that is not a U.S. Person as defined in Section 7701(a)(30) of
the Code for federal income tax purposes (a "Non-U.S. Lender") hereby
agrees that, if and to the extent it is legally able to do so, it
shall, prior to the date on which it becomes a Lender hereunder,
deliver to the Borrower and the Administrative Agent, as applicable,
such certificates, documents or other evidence, as and when required by
the Code or Treasury Regulations issued pursuant thereto, including (a)
in the case of a Non-U.S. Lender that is a "bank" for purposes of
Section 881(c)(3)(A) of the Code, two (2) duly completed copies of
Internal Revenue Service Form W-8BEN or Form W-8ECI and any other
certificate or statement of exemption required by Treasury Regulations,
or any subsequent versions thereof or successors thereto, properly
completed and duly executed by such Lender or the Administrative Agent
establishing that with respect to payments of principal, interest or
fees hereunder it is (i) not subject to United States federal
withholding tax under the Code because such payment is effectively
connected with the conduct by such Lender or Administrative Agent of a
trade or business in the United States or (ii) totally exempt from
United States federal withholding tax under a provision of an
applicable tax treaty and (b) in the case of a Non-U.S. Lender that is
not a "bank" for purposes of Section 881(c)(3)(A) of the Code, a
certificate in form and substance reasonably satisfactory to the
Administrative Agent and the Borrower and to the effect that (i) such
Non-U.S. Lender is not a "bank" for purposes of Section 881(c)(3)(A) of
the Code, is not subject to regulatory or other legal requirements as a
bank in any jurisdiction, and has not been treated as a bank for
purposes of any tax, securities law or other filing or submission made
to any governmental authority, any application made to a rating agency
or qualification for any exemption from any tax, securities law or
other legal requirements, (ii) is not a ten percent (10%) shareholder
for purposes of Section 881(c)(3)(B) of the Code and (iii) is not a
controlled foreign corporation receiving interest from a related person
for purposes of Section 881(c)(3)(C) of the Code, together with a
properly completed Internal Revenue Service Form W-8 or W-9, as
applicable (or successor forms). Each Lender or the Administrative
Agent agrees that it shall, promptly upon a change of its lending
office or the selection of any additional lending office, to the extent
the forms previously delivered by it pursuant to this section are no
longer effective, and promptly upon the Borrower's or the
Administrative Agent's reasonable request after the occurrence of any
other event (including the passage of time) requiring the delivery of a
Form W-8BEN, Form W-8ECI, Form W-8 or W-9 in addition to or in
replacement of the forms previously delivered, deliver to the Borrower
and the Administrative Agent, as applicable, if and to the extent it is
properly entitled to do so, a properly completed and executed Form
W-8BEN, Form W-8ECI, Form W-8 or W-9, as applicable (or any successor
forms thereto).
5.3. COMPUTATIONS. All computations of interest on Loans, any Fees or
any other amount due hereunder shall, unless otherwise expressly provided
herein, be based on a 360-day year and paid for the actual number of days
elapsed. Except as otherwise provided in the definition of the term "Interest
Period" with respect to LIBOR Rate Loans, whenever a payment hereunder or under
any of the other Loan Documents becomes due on a day that is not a Business Day,
the due date for such payment shall be extended to the next succeeding Business
Day, and interest and fees shall accrue during such extension.
5.4. INTEREST LIMITATION. Notwithstanding any other term of this Credit
Agreement or any other document referred to herein or therein, the maximum
amount of interest which may be charged to or collected from any person liable
hereunder by the Lenders shall be absolutely limited to, and shall in no event
exceed, the maximum amount of interest which could lawfully be charged or
collected under applicable law (including, to the extent applicable, the
provisions of Section 5197 of the Revised Statutes of the United States of
America, as amended or 12 U.S.C. Section 85, as amended), so that the maximum of
all amounts constituting interest under applicable law, howsoever computed,
shall never exceed as to any Person liable therefor such lawful maximum, and any
term of this Credit Agreement or any other document referred to herein or
therein which could be construed as providing for interest in excess of such
lawful maximum, shall be and hereby is made expressly subject to and modified by
the provisions of this paragraph.
5.5. INABILITY TO DETERMINE LIBOR RATE. In the event, prior to the
commencement of any Interest Period relating to any LIBOR Rate Loan, the
Administrative Agent shall determine or be notified by the Required Lenders that
(a) adequate and reasonable methods do not exist for ascertaining the LIBOR Rate
that would otherwise determine the rate of interest to be applicable to any
LIBOR Rate Loan during any Interest Period or (b) the LIBOR Rate determined or
to be determined for such Interest Period will not adequately and fairly reflect
the cost to the Lenders of making or maintaining their LIBOR Rate Loans during
such period, the Administrative Agent shall forthwith give notice of such
determination (which shall be conclusive and binding on the Borrower and the
Lenders) to the Borrower and the Lenders. In such event (i) any Loan Request or
Conversion Request with respect to LIBOR Rate Loans shall be automatically
withdrawn and shall be deemed a request for Base Rate Loans, (ii) each LIBOR
Rate Loan will automatically, on the last day of the then current Interest
Period relating thereto, become a Base Rate Loan and (iii) the obligations of
the Lenders to make LIBOR Rate Loans shall be suspended until the Administrative
Agent or the Required Lenders determine that the circumstances giving rise to
such suspension no longer exist, whereupon the Administrative Agent or, as the
case may be, the Administrative Agent upon the instruction of the Required
Lenders, shall so notify the Borrower and the Lenders.
5.6. ILLEGALITY. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or in the interpretation
or application thereof shall make it unlawful for any Lender to (i) make or
maintain LIBOR Rate Loans, or (ii) perform its obligations in respect of any
LIBOR Rate Loan, such Lender shall forthwith give notice of such circumstances
to the Borrower and the other Lenders and thereupon (a) the commitment of such
Lender to make LIBOR Rate Loans or convert Loans of another Type to LIBOR Rate
Loans shall forthwith be suspended, and (b) such Lender's Loans then outstanding
as LIBOR Rate Loans if any such Loans exist, shall be converted automatically to
Base Rate Loans on the last day of each Interest Period applicable to such LIBOR
Rate Loans or within such earlier period as may be required by law. The Borrower
hereby agrees promptly to pay to the Administrative Agent for the account of
such Lender, upon demand by such Lender, any additional amounts necessary to
compensate such Lender for any costs incurred by such Lender in making any
conversion in accordance with this ss.5.6, including any interest or fees
payable by such Lender to lenders of funds obtained by it in order to make or
maintain its LIBOR Rate Loans hereunder.
5.7. ADDITIONAL COSTS, ETC. If any present or future applicable law,
which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Lender, the Administrative Agent, the Issuing Bank or
the Cash Management Bank by any central bank or other fiscal, monetary or other
authority (whether or not having the force of law), shall:
(a) subject any Lender, the Administrative Agent, the Issuing
Bank or the Cash Management Bank to any Tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with respect to
this Credit Agreement, the other Loan Documents, any Letters of Credit,
such Lender's Commitment or the LIBOR Rate Loans, or change in the
basis of taxation of payments to such Lender, the Administrative Agent,
the Issuing Bank or the Cash Management Bank (other than Taxes, levies,
imposts. charges, fees, deductions or withholdings covered by ss.5.2.2
and the imposition of, or any change in the rate of, any Excluded Tax
payable by such Lender, the Administrative Agent, the Issuing Bank or
the Cash Management Bank), or
(b) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Credit Agreement)
any special deposit, reserve, assessment, liquidity, capital adequacy
or other similar requirements (whether or not having the force of law)
against assets held by, or deposits in or for the account of, or loans
by, or letters of credit issued by, or commitments of an office of any
Lender, the Administrative Agent, the Issuing Bank or the Cash
Management Bank, or
(c) impose on any Lender, the Administrative Agent, the
Issuing Bank or the Cash Management Bank any other conditions or
requirements with respect to this Credit Agreement, the other Loan
Documents, such Lender's Commitment, any Letters of Credit or, the
LIBOR Rate Loans, and the result of any of the foregoing is:
(i) to increase the cost to any Lender or the Issuing
Bank of making, funding, issuing, renewing, extending or
maintaining any of the LIBOR Rate Loans, such Lender's
Commitment or any Letter of Credit, or
(ii) to reduce the amount of principal, interest,
Reimbursement Obligation or other amount payable to such
Lender, the Administrative Agent or the Issuing Bank hereunder
on account of such Lender's Commitment, any Letter of Credit
or any of the Loans, or
(iii) to require such Lender, the Administrative
Agent, the Issuing Bank or the Cash Management Bank to make
any payment or to forego any interest or Reimbursement
Obligation or other sum payable hereunder, the amount of which
payment or foregone interest or Reimbursement Obligation or
other sum is calculated by reference to the gross amount of
any sum receivable or deemed received by such Lender, the
Administrative Agent, the Issuing Bank or the Cash Management
Bank from the Borrower hereunder,
then, and in each such case, the Borrower will, upon demand made by such Lender,
the Administrative Agent, the Issuing Bank or the Cash Management Bank at any
time and from time to time and as often as the occasion therefor may arise, pay
to such Lender, the Administrative Agent, the Issuing Bank or the Cash
Management Bank such additional amounts as will be sufficient to compensate such
Lender, the Administrative Agent, the Issuing Bank or the Cash Management Bank
for such additional cost, reduction, payment or foregone interest or
Reimbursement Obligation or other sum upon presentation by such Lender, the
Administrative Agent, the Issuing Bank or the Cash Management Bank of a
certificate in accordance with ss.5.9 hereof; PROVIDED that the Borrower shall
not be liable to any Lender, the Administrative Agent, the Issuing Bank or the
Cash Management Bank for costs incurred more than one hundred and twenty (120)
days prior to receipt by the Borrower of such certificate from such Lender, the
Administrative Agent, the Issuing Bank, or the Cash Management Bank, as
applicable, unless such costs were incurred prior to such 120-day period solely
as a result of such present or future applicable law being retroactive to a date
which occurred prior to such 120-day period.
5.8. CAPITAL ADEQUACY. If after the date hereof any Lender, the
Administrative Agent or the Issuing Bank determines that (i) the adoption of or
change in any law, governmental rule, regulation, policy, guideline or directive
(whether or not having the force of law) regarding capital requirements for
banks or bank holding companies or any change in the interpretation or
application thereof by a court or governmental authority with appropriate
jurisdiction, or (ii) compliance by such Lender, the Administrative Agent or the
Issuing Bank or any corporation controlling such Lender, the Administrative
Agent or the Issuing Bank with any law, governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law) of any such
entity regarding capital adequacy, has the effect of reducing the return on such
Lender's, the Administrative Agent's or the Issuing Bank's commitment with
respect to any Loans to a level below that which such Lender, the Administrative
Agent or the Issuing Bank could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's, the Administrative Agent's
or Issuing Bank's then existing policies with respect to capital adequacy and
assuming full utilization of such entity's capital) by any amount deemed by such
Lender, the Administrative Agent or the Issuing Bank to be material, then such
Lender, the Administrative Agent or the Issuing Bank may notify the Borrower of
such fact upon presentation of a certificate in accordance with ss.5.9 hereof.
To the extent that the amount of such reduction in the return on capital is not
reflected in the Base Rate, the Borrower and such Lender shall thereafter
attempt to negotiate in good faith, within thirty (30) days of the day on which
the Borrower receives such notice, an adjustment to the compensation payable
hereunder which will adequately compensate such Lender in light of these
circumstances. If the Borrower and such Lender are unable to agree to such
adjustment within thirty (30) days of the date on which the Borrower receives
such notice, then commencing on the date of such notice (but not earlier than
the effective date of any such increased capital requirement), the fees payable
hereunder shall increase by an amount that will, in the Administrative Agent's,
Issuing Bank's or such Lender's reasonable determination, provide adequate
compensation; PROVIDED that the Borrower shall not be liable to any Lender, the
Administrative Agent or the Issuing Bank for costs incurred more than one
hundred and twenty (120) days prior to receipt by the Borrower of such notice.
Each Lender shall allocate such cost increases among its customers in good faith
and on an equitable basis.
5.9. CERTIFICATE. A certificate setting forth any additional amounts
payable pursuant to ss.5.7 or ss.5.8 and a brief explanation of such amounts
which are due, submitted by any Lender, the Administrative Agent, the Issuing
Bank or the Cash Management Bank to the Borrower, shall be PRIMA FACIE evidence
that such amounts are due and owing.
5.10. INDEMNITY. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from and against any loss, cost or expense that such
Lender may sustain or incur as a consequence of (a) default by the Borrower in
payment of the principal amount of or any interest on any LIBOR Rate Loans as
and when due and payable, including any such loss or expense arising from
interest or fees payable by such Lender to banks of funds obtained by it in
order to maintain its LIBOR Rate Loans, (b) default by the Borrower in making a
borrowing or conversion after the Borrower has given (or are deemed to have
given) a Loan Request or a Conversion Request relating thereto in accordance
with ss.2.7 or (c) the making of any payment of a LIBOR Rate Loan or the making
of any conversion of any such Loan to a Base Rate Loan on a day that is not the
last day of the applicable Interest Period with respect thereto, including
interest or fees payable by such Lender to lenders of funds obtained by it in
order to maintain any such Loans.
5.11. INTEREST AFTER DEFAULT. Immediately upon the occurrence and
during the continuance of an Event of Default, the Borrower shall pay interest
on the principal amount of all outstanding Obligations and Letter of Credit Fees
at a fluctuating interest rate per annum at all times equal to the Default Rate
to the fullest extent permitted by applicable laws.
5.12. COLLATERAL SECURITY AND GUARANTIES. Each of the Parent and the
Borrower covenants and agrees that:
(a) Pursuant to the terms of the Security Documents, the
Obligations shall be secured by a perfected first priority security
interest (subject only to Permitted Liens, including, without
limitation, the Lien of the Term Loan Agent on Fixed Asset Collateral)
in the Collateral;
(b) If at any time the Parent or any of its Subsidiaries
grants any security interest to the Term Loan Agent or any lender party
to Term Loan Agreement, or any of their respective successors, assigns
or transferees, on any property of the Parent or such Subsidiary or any
other party, then the Parent, such Subsidiary or such other party, as
the case may be, shall simultaneously grant to the Administrative Agent
a security interest in such property, and such security interest shall
be subject to the Intercreditor Agreement.
(c) The Obligations shall also be guaranteed pursuant to the
terms of the Guaranties.
6. REPRESENTATIONS AND WARRANTIES.
Each of the Parent and the Borrower represents and warrants to the
Lenders and the Administrative Agent as follows:
6.1. CORPORATE AUTHORITY, ETC.
6.1.1. EXISTENCE, GOOD STANDING.
(a) Each of the Parent and its Subsidiaries (i) is a
corporation (or similar business entity) duly organized,
validly existing and in good standing under the laws of its
jurisdiction of incorporation or formation, (ii) has taken all
actions which, by reason of its ownership of property or
carrying on of business, are required to be taken by it under
the laws of any jurisdiction, wherein it owns property or
carries on business, except where the failure to do so would
not materially and adversely affect the Borrower and the
Guarantors (taken as a whole) and (iii) has all corporate
authority (or the equivalent company) power to own its
property and conduct its business as now conducted and as
presently contemplated.
(b) Each of the Parent and its Subsidiaries has
adequate power and authority and has full legal right to enter
into each of the Loan Documents to which it is or is to become
a party, to perform, observe and comply with all of its
agreements and obligations under each of such documents, and
to make all of the borrowings and obtain the extensions of
credit contemplated by this Credit Agreement.
6.1.2. AUTHORIZATION. The execution and delivery by each of
the Parent and its Subsidiaries of each of the Loan Documents executed
and delivered on the Closing Date to which, by the terms of such
document, it is a party, the performance by each of the Parent and its
Subsidiaries of all of its agreements and obligations under each of
such documents, and the making by the Borrower of all of the borrowings
contemplated by this Credit Agreement, are within the corporate (or the
equivalent company) authority of the Parent and each of its
Subsidiaries, as applicable, have been duly authorized by all necessary
corporate or other action on the part of the Parent and its
Subsidiaries, as applicable, and do not and will not (i) except as
otherwise expressly contemplated by the Loan Documents, conflict with,
or result in a breach of any material term, condition or provision of,
or constitute a default under or result in the creation of any
mortgage, lien, pledge, charge, security interest or other encumbrance
upon any of the property of the Parent or its Subsidiaries, under any
agreement, trust deed, indenture, mortgage or other instrument to which
the Parent or any of its Subsidiaries is a party or by which the Parent
or any of its Subsidiaries or any of the property of the Parent or any
of its Subsidiaries is bound, the consequences of which would have a
material and adverse effect on the financial condition, assets or
operations of the Borrower and the Guarantors (taken as a whole), (ii)
violate or contravene any provision of any law, regulation, order,
ruling or interpretation thereunder or any decree, order or judgment of
any court or governmental or regulatory authority, bureau, agency or
official (all as from time to time in effect and applicable to the
Parent or any of its Subsidiaries) except where such violation or
contravention would not materially and adversely affect the financial
condition, assets or operations of the Borrower and the Guarantors
(taken as a whole), (iii) require any waivers, consents or approvals by
any of the creditors of the Parent or any of its Subsidiaries which
have not been obtained (except when failure to do so would not
materially and adversely affect the financial condition, assets or
operations of the Borrower and the Guarantors, taken as a whole, (iv)
in the case of the Parent and its Subsidiaries, require any consents or
approvals by any shareholders or members of such Person, (except such
as will be obtained on or prior to the Closing Date and will be in full
force and effect on and as of the Closing Date), (v) require any
approval, consent, order, authorization or license by, or giving notice
to, or taking any other action with respect to, any governmental or
regulatory authority or agency under any provision of any law
applicable to the Parent or any of its Subsidiaries, except those
actions which have been taken or will be taken prior to the Closing
Date and except where failure to take such actions would not materially
and adversely affect the financial condition, assets or operations of
the Borrower and the Guarantors (taken as a whole), or (vi) conflict
with any provision of the Governing Documents of the Parent or any
Subsidiary of the Parent.
6.1.3. DELIVERY. Each of the Parent and its Subsidiaries has
duly executed and delivered each of the Loan Documents to which it is a
party and each of such documents is in full force and effect.
6.1.4. ENFORCEABILITY. The execution and delivery of this
Credit Agreement and the other Loan Documents to which the Parent or
any of its Subsidiaries is or is to become a party will result in valid
and legally binding obligations of such Person enforceable against it
in accordance with the respective terms and provisions hereof and
thereof, except as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditors' rights and except to the extent
that availability of the remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any
proceeding therefor may be brought.
6.2. FINANCIAL STATEMENTS; PROJECTIONS.
(a) There has been furnished to the Administrative Agent and
each of the Lenders the audited consolidated balance sheet of the
Parent and its Subsidiaries as at December 31, 2005, and consolidated
statements of income and cash flow of the Parent and its Subsidiaries
for the Fiscal Year then ended, certified by PricewaterhouseCoopers.
Such balance sheet and statements of income and cash flow have been
prepared in accordance with GAAP and fairly present the financial
condition of the Parent and its Subsidiaries as at the close of
business on the date thereof and the results of operations for the
Fiscal Year then ended. There are no contingent liabilities of the
Parent or any of its Subsidiaries as of such date involving material
amounts, known to the officers of the Parent or the Borrower, which
were not disclosed in such balance sheet and the notes related thereto.
(b) There has been furnished to the Administrative Agent and
each of the Lenders an unaudited consolidated balance sheet of the
Parent and its Subsidiaries as at September 30, 2006, and unaudited
consolidated statements of income and cash flow of the Parent and its
Subsidiaries for the period(s) then ended. Such balance sheet and
statements of income and cash flow have been prepared in accordance
with GAAP and fairly present the financial condition of the Parent and
its Subsidiaries as at the close of business on the date thereof and
the results of operations for the period(s) then ended. There are no
contingent liabilities of the Parent or any of its Subsidiaries as of
such date involving material amounts, known to the officers of the
Parent or the Borrower, which were not disclosed in such balance sheet
and the notes related thereto.
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(c) There has also been furnished to the Administrative Agent
and each of the Lenders the Projections and the Business Plan, in each
case, on a consolidated basis. To the knowledge of the Parent and its
Subsidiaries, no facts exist that (individually or in the aggregate)
would result in any material change in any of such projections (taken
as a whole). The Projections and the Business Plan are based upon
reasonable estimates and assumptions and reflect the reasonable
estimates of the Parent and its Subsidiaries of the results of
operations and other information projected therein (it being understood
that such projections are not a guarantee of future performance).
6.3. SOLVENCY. As of the Closing Date and after giving effect to the
Loans hereunder and the other transactions contemplated hereby:
(a) the aggregate value of all properties of the Parent and
its Subsidiaries, on a consolidated basis, at their present fair
saleable value exceed the amount of all the probable debts and
liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities) of the Parent and its Subsidiaries as they
become absolute and mature;
(b) the present fair saleable value of the assets of the
Parent and its Subsidiaries, on a consolidated basis, is not less than
the amount that will be required to pay the probable liability on their
debts as they become absolute and mature;
(c) the Parent and its Subsidiaries will not, on a
consolidated basis, have an unreasonably small capital with which to
conduct their business operations as heretofore conducted; and
(d) the Parent and its Subsidiaries do not, on a consolidated
basis, intend to incur debts or liabilities beyond their ability to pay
such debts and liabilities as they mature.
6.4. NO MATERIAL ADVERSE CHANGES, ETC. Since the Balance Sheet Date,
there has occurred no material adverse change in the financial condition or
business of the Parent or any of its Subsidiaries, taken as a whole. Since the
Balance Sheet Date, neither the Parent nor any Subsidiary of the Parent has made
any Restricted Payment (other than Restricted Payments permitted under ss.8.4).
6.5. ABSENCE OF MORTGAGES AND LIENS. Except with respect to Permitted
Liens, there is no financing statement, security agreement, chattel mortgage,
real estate mortgage or other document filed or recorded with any filing
records, registry or other public office, that purports to cover, affect or give
notice of any present or possible future Lien on, or security interest in, any
of the material assets or property of the Parent or any Subsidiary of the Parent
or of any of the rights relating thereto.
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6.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC. Each of the Parent and its
Subsidiaries possesses all franchises, patents, copyrights, trademarks, trade
names, licenses and permits, and rights in respect of the foregoing, adequate
for the conduct of its business substantially as now conducted without known
conflict with any rights of others unless the failure of such possession would
not have a material adverse effect on the business, assets, operations or
financial condition of the Borrower and the Guarantors (taken as a whole).
Attached hereto as SCHEDULE 6.6 is a true, correct and complete list of all
patents, patent applications, federally registered copyrights, trademarks,
trademark applications, trade names and other intellectual property owned by the
Parent or any Subsidiary of the Parent as of the Closing Date.
6.7. LITIGATION. Except as set forth in SCHEDULE 6.7 hereto, there are
no actions, suits, proceedings or investigations of any kind pending, or, to the
best knowledge of the Senior Management after all due investigation appropriate
under the circumstances, threatened against the Parent or any of its
Subsidiaries, before any court, tribunal or administrative agency or board that
would be likely to, either in any case or in the aggregate, materially adversely
affect the properties, assets, financial condition or business of the Borrower
and the Guarantors, taken as a whole, or materially impair the right of the
Borrower and the Guarantors, taken as a whole, to carry on business
substantially as now conducted by them, or that questions the validity of this
Credit Agreement or any of the other Loan Documents.
6.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. Except as set forth on
SCHEDULE 6.8, neither the Parent nor any of its Subsidiaries is subject to any
charter, partnership or other legal restriction, or any judgment, decree, order,
law, statute, rule or regulation that has or is expected in the future to have a
material adverse effect on the business, assets or financial condition of the
Borrower or the Guarantors, taken as a whole. Except as listed on SCHEDULE 6.8
hereto, neither the Parent nor any of its Subsidiaries is a party to any
contract or agreement that has or is expected, in the judgment of the Parent's
or the Borrower's officers, to have any material adverse effect on the business
of the Borrower and the Guarantors, taken as a whole.
6.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. Neither the Parent
nor any of its Subsidiaries is in violation of any provision of its Governing
Documents, or, except for environmental issues more specifically dealt with in
SECTION 6.19, any agreement or instrument to which it may be subject or by which
it or any of its properties may be bound or any decree, order, judgment,
statute, license, rule or regulation, in any of the foregoing cases in a manner
that could materially and adversely affect the financial condition, properties
or business of the Parent and its Subsidiaries.
6.10. TAX STATUS. Except as set forth on SCHEDULE 6.10, the Parent and
its Subsidiaries (i) have made or filed all federal, provincial and all material
state, provincial and foreign income and all other material tax returns, reports
and declarations required by any jurisdiction to which any of them is subject,
(ii) have paid all material Taxes and other governmental assessments and charges
imposed on them, except those being contested in good faith and by appropriate
proceedings and for which the Parent and its Subsidiaries have set aside on
their books reasonably adequate provisions therefor (unless foreclosure or other
enforcement action has been commenced in respect thereof or any Lien has
attached as security therefor, in which case such exception does not apply), and
(iii) have set aside on their books provisions reasonably adequate for the
payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply. There are no unpaid Taxes in any
material amount claimed to be due by the taxing authority of any jurisdiction,
except those being contested in good faith and as to which adequate reserves are
maintained, and the officers of the Parent and the Borrower know of no basis for
any such claim.
6.11. NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of Default
has occurred and is continuing.
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6.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. Neither the Parent
nor any of its Subsidiaries is a "holding company", or a "subsidiary company" of
a "holding company", or an affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935; nor is it an
"investment company", or an "affiliated company" or a "principal underwriter" of
an "investment company", as such terms are defined in the Investment Company Act
of 1940.
6.13. EMPLOYEE BENEFIT PLANS.
6.13.1. IN GENERAL. Each Employee Benefit Plan and each
Guaranteed Pension Plan has been maintained and operated in compliance
in all material respects with applicable law including without
limitation the provisions of ERISA and all Applicable Pension
Legislation and, to the extent applicable, the Code, including but not
limited to the provisions thereunder respecting prohibited
transactions, other than as set forth on SCHEDULE 6.13.1 attached
hereto. The Parent and the Borrower have heretofore delivered to the
Administrative Agent the most recently completed annual report, Form
5500, with all required attachments, and actuarial statement required
to be submitted under ss.103(d) of ERISA, with respect to each
Guaranteed Pension Plan.
6.13.2. TERMINABILITY OF WELFARE PLANS. Under each Employee
Benefit Plan which is an employee welfare benefit plan within the
meaning of ss.3(1) or ss.3(2)(B) of ERISA, no benefits are due unless
the event giving rise to the benefit entitlement occurs prior to plan
termination (except as required by Title I, Part 6 of ERISA). The
Parent, the Borrower or an ERISA Affiliate, as appropriate, may
terminate each such Plan at any time (or at any time subsequent to the
expiration of any applicable bargaining agreement) in the discretion of
the Parent, the Borrower or such ERISA Affiliate without liability to
any Person, other than for benefits which have accrued prior to
termination.
6.13.3. GUARANTEED PENSION PLANS. Each contribution required
to be made to a Guaranteed Pension Plan, whether required to be made to
avoid the incurrence of an accumulated funding deficiency, the notice
or lien provisions of ss.302(f) of ERISA, or otherwise, has been timely
made. No waiver of an accumulated funding deficiency or extension of
amortization periods has been received with respect to any Guaranteed
Pension Plan and none of the Parent, the Borrower nor any ERISA
Affiliate is obligated to or has posted security in connection with an
amendment to a Guaranteed Pension Plan pursuant to ss.307 of ERISA or
ss.401(a)(29) of the Code. No liability to the PBGC (other than
required insurance premiums, all of which have been paid) has been
incurred by the Parent, the Borrower or any ERISA Affiliate with
respect to any Guaranteed Pension Plan and there has not been any ERISA
Reportable Event, or any other event or condition which presents a
material risk of termination of any Guaranteed Pension Plan by the
PBGC. Based on the latest valuation of each Guaranteed Pension Plan
(which in each case occurred within twelve months of the date of this
representation), and on the actuarial methods and assumptions employed
for that valuation, the aggregate benefit liabilities of all such
Guaranteed Pension Plans within the meaning of ss.4001 of ERISA did not
exceed the aggregate value of the assets of all such Guaranteed Pension
Plans.
6.13.4. MULTIEMPLOYER PLANS. None of the Parent, the Borrower
nor any ERISA Affiliate has incurred any material liability (including
secondary liability) to any Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan under
ss.4201 of ERISA or as a result of a sale of assets described in
ss.4204 of ERISA. None of the Parent, the Borrower nor any ERISA
Affiliate has been notified that any Multiemployer Plan is in
reorganization or insolvent under and within the meaning of ss.4241 or
ss.4245 of ERISA or is at risk of entering reorganization or becoming
insolvent, or that any Multiemployer Plan intends to terminate or has
been terminated under ss.4041A of ERISA.
6.14. REGULATIONS U AND X. The proceeds of the Loans and Letters of
Credit shall be used solely for the purposes specified in ss.7.11. No portion of
any Loan is to be used, and no portion of any Letter of Credit is to be
obtained, for the purpose of purchasing or carrying any "margin security" or
"margin stock" as such terms are used in Regulations U and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.
6.15. TRUE COPIES OF GOVERNING DOCUMENTS. The Parent and the Borrower
have furnished or caused to be furnished to each of the Lenders true and
complete copies of the Governing Documents (together with any amendments
thereto) of the Parent and each Subsidiary of the Parent.
6.16. FISCAL YEAR. The Parent has a Fiscal Year which is the fifty-two
(52) or fifty-three (53) week period ending on the Saturday closest to January 1
of each calendar year.
6.17. PERFECTION OF SECURITY INTEREST. All filings, assignments,
pledges and deposits of documents or instruments have been made and all other
actions have been taken that are necessary or advisable, under applicable United
States federal and state law, to establish and perfect the Administrative
Agent's (a) first-priority Lien and security interest in the Collateral (other
than the Fixed Asset Collateral) and (b) second-priority Lien and security
interest in the Fixed Asset Collateral. The Collateral and the Administrative
Agent's rights with respect to the Collateral are not subject to any setoff,
claims, withholdings or other defenses. The Borrower and the Guarantors party to
the Security Agreements are the owners of the Collateral free from any Lien,
except for Permitted Liens.
6.18. SUBSIDIARIES, ETC. The Parent does not have any Subsidiaries
except as set forth on SCHEDULE 6.18 hereto, as such schedule may be updated
from time to time by the Borrower in accordance with ss.8.11.
6.19. ENVIRONMENTAL COMPLIANCE. With respect to the past and present
condition and usage of the Real Estate and the operations conducted thereon:
(a) except as disclosed on SCHEDULE 6.19(A), none of the
Parent, its Subsidiaries or any operator of the Real Estate or any
operations thereon is in violation, or alleged violation, of any
judgment, decree, order, law, license, rule, permit or regulation
pertaining to environmental matters, including without limitation,
those arising under the Resource Conservation and Recovery Act
("RCRA"), the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 as amended ("CERCLA"), the Superfund Amendments
and Reauthorization Act of 1986 ("XXXX"), the Federal Clean Water Act,
the Federal Clean Air Act, the Toxic Substances Control Act, or any
other state, local, foreign or common law, statute, regulation,
ordinance, order, decree or any other binding requirement of any
Governmental Authority relating to health, safety or the environment
(all of the foregoing, collectively, the "Environmental Laws"), which
violation could reasonably be expected to have a material adverse
effect on the business, assets, operations or financial condition of
the Borrower and the Guarantors (taken as a whole), or the ability of
the Parent or any Subsidiary of the Parent to fulfill its obligations
under this Credit Agreement or the other Loan Documents;
(b) (i) except as set forth on SCHEDULE 6.19(A) hereto, as of
the Closing Date, neither the Parent nor any of its Subsidiaries has
received notice from any third party including, without limitation, any
Governmental Authority, (A) that any one of them has been identified by
the United States Environmental Protection Agency ("EPA") as a
potentially responsible party under CERCLA with respect to a site
listed on the National Priorities List, 40 C.F.R. Part 000 Xxxxxxxx X;
(B) that any hazardous waste, as defined by 42 U.S.C. ss.6903(5), any
hazardous substances as defined by 42 U.S.C. ss.9601(14), any pollutant
or contaminant as defined by 42 U.S.C. ss.9601(33) and any toxic
substances, oil or hazardous materials or other chemicals or substances
regulated by any Environmental Laws ("Hazardous Substances") which any
one of them has generated, transported or disposed of has been found at
any site at which a Governmental Authority has conducted or has ordered
that the Parent or any Subsidiary of the Parent conduct a remedial
investigation, removal or other response action pursuant to any
Environmental Law; or (C) that it is or shall be a named party to any
claim, action, cause of action, complaint, or legal or administrative
proceeding (in each case, contingent or otherwise) arising out of any
third party's incurrence of costs, expenses, losses or damages of any
kind whatsoever in connection with the release of Hazardous Substances
and (ii) except as set forth on SCHEDULE 6.19(B), as such schedule may
be updated from time to time by the Borrower (subject to the prior
approval of the Administrative Agent), neither the Parent nor any of
its Subsidiaries has received any notices referred to in clause (i)
above identifying any event or condition that could materially and
adversely affect the financial condition, properties or business of the
Borrower and the Guarantors, taken as a whole;
(c) except as set forth on SCHEDULE 6.19(A) attached hereto:
(i) no portion of the Real Estate is used for the handling, processing,
storage or disposal of Hazardous Substances except in material
accordance with applicable Environmental Laws; and, to the best of the
Parent's and Borrower's knowledge, no underground tank or other
underground storage receptacle for Hazardous Substances is located on
any portion of the Real Estate; (ii) in the course of any activities
conducted by the Parent, its Subsidiaries or operators of its
properties, no Hazardous Substances have been generated or are being
used on the Real Estate except in material accordance with applicable
Environmental Laws; (iii) there have been no releases (i.e. any past or
present releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, disposing or dumping) or
threatened releases of Hazardous Substances on, upon, into or from the
properties of the Parent or its Subsidiaries, which releases could
reasonably be expected to have a material adverse effect on the value
of any of the Real Estate or on the business, assets, operations or
financial condition of the Borrower and the Guarantors (taken as a
whole), or the ability of the Parent or the Borrower to fulfill its
obligations under this Credit Agreement or the other Loan Documents;
(iv) to the best of the Parent's and the Borrower's knowledge, there
have been no releases on, upon, from or into any real property in the
vicinity of any of the Real Estate which, through soil or groundwater
contamination, may have come to be located on, and which could
reasonably be expected to have a material adverse effect on the value
of any of the Real Estate or adjacent properties or the environment or
on the business, assets, operations or financial condition of the
Borrower and the Guarantors (taken as a whole), or the ability of the
Parent or any Subsidiary of the Parent to fulfill its obligations under
this Credit Agreement or the other Loan Documents; and (v) in addition,
to the best of the Parent's and the Borrower's knowledge, any Hazardous
Substances that have been generated on any of the Real Estate have been
transported offsite only by carriers having an identification number
issued by the EPA (or the equivalent thereof in any foreign
jurisdiction), treated or disposed of only by treatment or disposal
facilities maintaining valid permits as required under applicable
Environmental Laws, which transporters and facilities have been and
are, to the best of the Parent's and the Borrower's knowledge,
operating in compliance with such permits and applicable Environmental
Laws;
(d) none of the Parent nor its Subsidiaries, any Mortgaged
Property or any of the other Real Estate is subject to any applicable
Environmental Law requiring the performance of Hazardous Substances
site assessments, or the removal or remediation of Hazardous
Substances, or the giving of notice to any Governmental Authority or
the recording or delivery to other Persons of an environmental
disclosure document or statement by virtue of the transactions set
forth herein and contemplated hereby, or as a condition to the
recording of any Mortgage or to the effectiveness of any other
transactions contemplated hereby; and
(e) to the best of their knowledge after due inquiry, there
are listed on SCHEDULE 6.19(E), all material environmental reports
relating to the Parent and its Subsidiaries and their properties and
operations, copies of which have been furnished to the Administrative
Agent's Special Counsel.
6.20. BANK ACCOUNTS. SCHEDULE 6.20, as such schedule may be updated
from time to time by the Borrower (subject to the prior approval of the
Administrative Agent), sets forth the account numbers and location of all bank
accounts of the Parent and its Subsidiaries.
6.21. LABOR CONTRACTS. Except as set forth on SCHEDULE 6.21, as of the
Closing Date, neither the Parent nor any of its Subsidiaries is party to any
collective bargaining agreement. Except as disclosed to the Administrative Agent
and the Lenders in writing, (a) neither the Parent nor any of its Subsidiaries
is a party to any collective bargaining agreement and (b) there are no material
grievances, disputes or controversies with any union or other organization of
the Parent's or any of its Subsidiary's employees, or threats of strikes or work
stoppages.
6.22. DISCLOSURE. Neither this Credit Agreement nor any of the other
Loan Documents contains any untrue statement of a material fact or omits to
state a material fact (known to the Parent or any of its Subsidiaries in the
case of any document or information not furnished by the Parent or any of its
Subsidiaries) necessary in order to make the statements herein or therein not
misleading. Except as disclosed to the Administrative Agent and the Lenders in
writing, there is no fact known to the Parent or any of its Subsidiaries which
could reasonably be expected to have a material adverse effect on the business,
assets, operations or financial condition of the Borrower and the Guarantors
(taken as a whole), or the ability of the Parent or any Subsidiary of the Parent
to fulfill its obligations under this Credit Agreement or the other Loan
Documents, exclusive of effects resulting from changes in general economic
conditions, legal standards or regulatory conditions.
6.23. TITLE TO PROPERTIES; LEASES.
(a) Except as set forth on SCHEDULE 6.23, the Parent and its
Subsidiaries own all of the assets reflected in the consolidated
balance sheet of the Parent and its Subsidiaries delivered to the
Administrative Agent pursuant to ss.10.23, subject to no Liens or other
rights of others, except Permitted Liens.
(b) The Borrower has good, marketable and indefeasible title
in fee to the Mortgaged Property free and clear of all Liens except
Permitted Liens. All transfer taxes, deed stamps, intangible taxes or
other amounts in the nature of transfer taxes required to be paid by
any Person under applicable legal requirements in connection with the
transfer of the Mortgaged Property to the Borrower have been paid. Each
Mortgage when properly recorded in the appropriate records, together
with any Uniform Commercial Code Financing Statements required to be
filed in connection therewith, will create (a) a valid, perfected first
priority Lien on the Borrower's interest in the respective Mortgaged
Property, (b) valid and perfected collateral assignments of, all leases
relating to such Mortgaged Property, and (c) valid and perfected
security interests in all other related assets constituting Fixed Asset
Collateral, all in accordance with the terms thereof, in each case
subject only to any applicable Permitted Liens. All mortgage,
recording, stamp, intangible or other similar taxes required to be paid
by any Person under applicable legal requirements in connection with
the execution, delivery, recordation, filing, registration, perfection
or enforcement of any of the Loan Documents have been paid. No
condemnation or other material proceeding has been commenced or, to
Borrower's best knowledge, is contemplated with respect to all or part
of the Mortgaged Property or for the relocation of roadways providing
access to the Mortgaged Property. There are no claims for payment for
work, labor or materials affecting the Mortgaged Property which are or
may become a Lien prior to, or of equal priority with, the Liens
created by the Loan Documents. Other than as disclosed to the
Administrative Agent, there are no outstanding options to purchase or
rights of first refusal affecting all or any portion of the Mortgaged
Property. To the best of the Borrower's knowledge, the ALTA survey
delivered by Borrower with respect to each parcel of Mortgaged Property
does not fail to reflect any material matter affecting the applicable
Mortgaged Property or the title thereto. To the best of Borrower's
knowledge, all of the improvements included in determining the
appraised value of each parcel of Mortgaged Property lie wholly within
the boundaries and building restriction lines of such Mortgaged
Property, and no improvement on an adjoining property encroaches upon
such Mortgaged Property, and no easement or other encumbrance upon the
Real Estate encroaches upon any of the improvements, except in each
case those insured against by the title insurance policy insuring the
Lien of the applicable Mortgage. Each parcel comprising each Mortgaged
Property is a separate tax lot and is not a portion of any other tax
lot that is not a part of the applicable Mortgaged Property. To
Borrower's knowledge, there are no pending or proposed special or other
assessments for public improvements or otherwise affecting any of the
Mortgaged Property, or any contemplated improvements to the Mortgaged
Property that may result in such special or other assessments.
6.24. CERTAIN TRANSACTIONS. Except for arm's length transactions
pursuant to which the Parent, the Borrower, any of the Guarantors or any of
their Subsidiaries make payments in the ordinary course of business upon terms
no less favorable than the Parent, the Borrower, the Guarantors or such
Subsidiary could obtain from third parties, none of the officers, directors, or
employees of the Parent, the Borrower, the Guarantors or any of their
Subsidiaries is presently a party to any transaction with the Parent, the
Borrower, the Guarantors or any of their Subsidiaries (other than for services
as employees, officers and directors), including any contract, agreement or
other arrangement providing for the furnishing of services to or by, providing
for rental of real or personal property to or from, or otherwise requiring
payments to or from any officer, director or such employee or, to the knowledge
of the Parent and the Borrower, any corporation, partnership, trust or other
entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee or partner.
3
6.25. FOREIGN ASSETS CONTROL REGULATIONS, ETC. None of the requesting
or borrowing of the Loans, the requesting or issuance, extension or renewal of
any Letters of Credit or the use of the proceeds of any thereof will violate the
Trading With the Enemy Act (50 U.S.C. ss. 1 et seq., as amended) (the "Trading
With the Enemy Act") or any of the foreign assets control regulations of the
United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended)
(the "Foreign Assets Control Regulations") or any enabling legislation or
executive order relating thereto (which for the avoidance of doubt shall
include, but shall not be limited to (a) Executive Order 13224 of September 21,
2001 Blocking Property and Prohibiting Transactions With Persons Who Commit,
Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) (the
"Executive Order") and (b) the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001
(Public Law 107-56)). Furthermore, neither the Parent nor any of its
Subsidiaries or other Affiliates (a) is or will become a "blocked person" as
described in the Executive Order, the Trading With the Enemy Act or the Foreign
Assets Control Regulations or (b) engages or will engage in any dealings or
transactions, or be otherwise associated, with any such "blocked person".
6.26. COMPLIANCE. The Borrower and each parcel of Mortgaged Property
and the use thereof comply in all material respects with all applicable legal
requirements (including with respect to parking and applicable zoning and land
use laws, regulations and ordinances) or constitute permitted, preexisting
conditions with respect thereto. Borrower is not in default or violation of any
order, writ, injunction, decree or demand of any Governmental Authority, the
violation of which could reasonably be expected to have a material adverse
effect on the business, assets or financial condition of the Borrower or the
Guarantors, taken as a whole. In the event that all or any part of the
improvements on any of the Mortgaged Property are destroyed or damaged, said
improvements can be legally reconstructed to their condition prior to such
damage or destruction, and thereafter exist for the same use without violating
any material zoning or other ordinances applicable thereto and without the
necessity of obtaining any variances or special permits (provided that a
casualty affecting more than 50% of the assessed value of the structure may
require such relief if not then in conformity with the zoning bylaw). No legal
proceedings are pending or, to the best of Borrower's knowledge, threatened with
respect to the zoning of the Real Estate the consequences of which could
reasonably be expected to have a material adverse effect on the business, assets
or financial condition of the Borrower or the Guarantors, taken as a whole.
Neither the zoning nor any other right to construct, use or operate the Real
Estate is in any way dependent upon or related to any property other than the
Real Estate. All material certifications, permits, licenses and approvals,
including certificates of completion and occupancy permits required for the
legal use, occupancy and operation of the Real Estate (collectively, the
"LICENSES"), have been obtained and are in full force and effect. The use being
made of the Real Estate is in conformity with the certificates of occupancy
issued for the Real Estate and all other restrictions, covenants and conditions
affecting the Real Estate.
6.27. CONTRACTS. There are no service, maintenance or repair contracts
affecting the Mortgaged Property that are not terminable on one month's notice
or less without cause and without penalty or premium. All such service,
maintenance or repair contracts affecting the Real Estate have been entered into
at arms-length in the ordinary course of Borrower's business and provide for the
payment of fees in amounts and upon terms comparable to existing market rates.
6.28. UTILITIES AND PUBLIC ACCESS. Excluding the Bleachery Pond
property, there is reasonable utility and public access to the Real Estate.
6.29. PHYSICAL CONDITION. The Real Estate is in good condition, order
and repair in all material respects; there exists no structural or other
material defect or damages to the Real Estate, whether latent or otherwise. The
Borrower has not received notice from any insurance company or bonding company
of any defect or inadequacy in the Real Estate, or any part thereof, which would
materially adversely affect its insurability or cause the imposition of
extraordinary premiums or charges thereon or any termination of any policy of
insurance or bond. Except as may be expressly disclosed on the compilation
drawing of the Mortgage Property certified to the Administrative Agent, no
portion of the Mortgaged Property is located in an area identified by the
Federal Emergency Management Agency as an area having special flood hazards.
7. AFFIRMATIVE COVENANTS OF THE PARENT AND THE BORROWER.
Each of the Parent and the Borrower covenants and agrees that, so long
as any Loan, Unpaid Reimbursement Obligation or Letter of Credit is outstanding
or any Lender has any obligation to make any Loans or the Administrative Agent
has any obligation to cause the Issuing Bank to issue, extend or renew any
Letter of Credit:
7.1. PUNCTUAL PAYMENT. Each of the Parent and the Borrower will duly
and punctually pay or cause to be paid when due all principal and interest on
the Loans, all Reimbursement Obligations, the Fees and all other Obligations and
amounts provided for in this Credit Agreement and the other Loan Documents to
which it is a party and will cause to be paid any amounts owing by any of
Subsidiary of the Parent, all in accordance with the terms of this Credit
Agreement and such other Loan Documents.
7.2. MAINTENANCE OF OFFICE. Each of the Parent and the Borrower will
maintain its chief executive office in Fall River, Massachusetts or at such
other place as the Parent and the Borrower shall designate upon written notice
to the Administrative Agent, where notices, presentations and demands to or upon
the Parent or the Borrower in respect of the Loan Documents to which the Parent
or the Borrower is a party may be given or made.
7.3. RECORDS AND ACCOUNTS. Each of the Parent and the Borrower will (i)
keep, and cause each of its Subsidiaries to keep, true and accurate records and
books of account in which full, true and correct entries will be made in
accordance with, and all financial statements provided for herein shall be
prepared in accordance with GAAP consistently applied; (ii) maintain adequate
accounts and reserves for all taxes (including incomes taxes), depreciation,
depletion, obsolescence and amortization of its properties and the properties of
its Subsidiaries, contingencies, and other reserves; and (iii) at all times,
maintain independent certified public accountants as the Parent's and the
Borrower's accountants which shall be satisfactory to the Administrative Agent.
7.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The Parent and
the Borrower will deliver to each of the Lenders:
(a) as soon as practicable, but in any event not later than
ninety (90) days after the end of each Fiscal Year, the consolidated
balance sheet of the Parent and its Subsidiaries, as at the end of such
year, and the related consolidated statements of income and retained
earnings and consolidated statement of cash flow for such year, each
setting forth in comparative form the figures for the previous Fiscal
Year and all such consolidated financial statements to be in reasonable
detail, prepared in accordance with GAAP consistently applied, and
certified without qualification and without expression of uncertainty
as to the ability of the Parent and its Subsidiaries to continue as
going concerns, by PricewaterhouseCoopers or by other independent
certified public accountants satisfactory to the Administrative Agent
(PROVIDED, that for the 2006 Fiscal Year only, such certification may
be issued with a going concern qualification if such qualification is
reasonable and necessary in the reasonable judgment of the independent
certified public accountant), together with (i) a written statement
from such accountants to the effect that they have read a copy of this
Credit Agreement, and that, in making the examination necessary to said
certification, they have obtained no knowledge of any Default or Event
of Default, or, if such accountants shall have obtained knowledge of
any then existing Default or Event of Default they shall disclose in
such statement any such Default or Event of Default; PROVIDED that such
accountants shall not be liable to the Lenders for failure to obtain
knowledge of any Default or Event of Default; and (ii) a copy of their
accountants' management letter (if any) for such Fiscal Year;
(b) as soon as practicable, but in any event within forty-five
(45) days after the end of each Fiscal Quarter, unaudited quarterly
consolidated and consolidating financial statements of the Parent and
its Subsidiaries for such Fiscal Quarter (i.e., the consolidated and
consolidating balance sheet of the Parent and its Subsidiaries, as at
the end of such Fiscal Quarter, and the related consolidated and
consolidating statements of income and retained earnings and
consolidated and consolidating statement of cash flow for such Fiscal
Quarter) and the unaudited consolidated and consolidating financial
statements of the Parent and its Subsidiaries for the period commencing
at the end of the previous Fiscal Year and ending with the end of such
Fiscal Quarter, each prepared in accordance with GAAP consistently
applied, together with a certification by the principal financial or
accounting officer(s) of the Parent that the information contained in
such financial statements fairly presents in all material respects the
financial condition of the Parent and its Subsidiaries (as a whole) on
the date thereof (subject to year-end adjustments);
(c) as soon as practicable, but in any event within thirty
(30) days after the end of each month in each Fiscal Year, unaudited
monthly consolidated and consolidating financial statements of Parent
and its Subsidiaries for such month (i.e., the consolidated and
consolidating balance sheet of the Parent and its Subsidiaries, as at
the end of such month, and the related consolidated and consolidating
statements of income and retained earnings and consolidated and
consolidating statement of cash flow for such month) and the unaudited
consolidated and consolidating financial statements of the Parent and
its Subsidiaries for the period commencing at the end of the previous
Fiscal Year and ending with the end of such month, each, prepared in
accordance with GAAP consistently applied, together with a
certification by the principal financial or accounting officer(s) of
the Parent that the information contained in such financial statements
fairly presents in all material respects the financial condition of the
Parent and its Subsidiaries (as a whole) on the date thereof (subject
to year-end adjustments);
(d) simultaneously with the delivery of the financial
statements referred to in subsections (a) and (b) above, a statement
certified by the principal financial or accounting officer(s) of the
Parent in substantially the form of EXHIBIT B hereto (a "Compliance
Certificate") (i) setting forth in reasonable detail computations
evidencing compliance with the covenants contained in ss.9 and (if
applicable) reconciliations to reflect changes in GAAP since the
Balance Sheet Date and (ii) stating that such officer(s) has caused
this Credit Agreement to be reviewed and has no knowledge of any
Default or Event of Default during such Fiscal Quarter or at the end of
such year, or if such officer(s) has such knowledge, specifying each
Default or Event of Default and the nature thereof;
(e) as soon as available and in any event no later than within
fifteen (15) days after the end of each calendar month, (i) a
Collateral Update Certificate, (ii) an Accounts Receivable/Loan
Reconciliation Report, (iii) a summary of inventory by type and
location, (v) an accounts receivable aging report, and (iv) such other
information relating to the Collateral as the Administrative Agent
shall reasonably request, in each case, accompanied by such supporting
detail and documentation as the Administrative Agent shall reasonably
request;
(f) as soon as available and in any event no later than 1:00
p.m. (Boston time) on Tuesday of each week (or, if such Tuesday is not
a Business Day or if the preceding Monday is not a Business Day, in
each case, on Wednesday of such week) (or with greater frequency as the
Administrative Agent may request), a Borrowing Base Certificate with
respect to the Collateral of the Borrower as of the close of business
on the previous Saturday (or, if such day is not a Business Day, on the
preceding Business Day), together with such other information relating
to the Collateral as the Administrative Agent shall reasonably request,
and accompanied by such supporting detail and documentation as the
Administrative Agent shall reasonably request;
(g) not later than December 31st of each calendar year, the
annual business plan of the Parent and its Subsidiaries for the
succeeding Fiscal Year on a monthly basis in reasonable detail,
including projected consolidated balance sheets, statements of income
and retained earnings and cash flow statements of the Parent and its
Subsidiaries for the succeeding Fiscal Year on a monthly basis, in each
case in the same format as the audited balance sheet, statement of
income and retained earnings and cash flow statement respectively;
(h) promptly after the sending or filing thereof, copies of
all reports which the Parent or any Subsidiary of the Parent sends to
any of its security holders, and copies of all reports and registration
statements which the Parent or any Subsidiary of the Parent files with
the Securities and Exchange Commission or any national securities
exchange (including, without limitation, all 10-K, 10-Q and 8-K
reports), which reports are required to be sent to security holders or
so filed by law or by regulation or under the terms of the Parent's
listing agreement with NASDAQ or any other stock exchange;
(i) from time to time such other financial data and
information (including accountants' management letters) as the
Administrative Agent or any Lender may reasonably request;
(j) simultaneously with the delivery of the financial
statements referred to in subsection (c) above, a Compliance
Certificate setting forth in reasonable detail computations evidencing
compliance with the financial covenant contained in ss.9;
(k) promptly after delivery or receipt thereof, copies of all
notices and other written communications delivered or received by the
Parent or any of its Subsidiaries in connection with the Term Loans;
(l) [intentionally omitted];
(m) on Wednesday of each week, a comparison of actual results
for the immediately prior one week period to the previously projected
results for such one week period as set forth in the Projections; and
(n) within five (5) Business Days after the end of each month,
updated 13-week projections reflecting any changes to the previously
provided Projections. Without limiting the generality of the foregoing,
such projections shall detail, on a weekly basis, the projected
outstanding amount of Revolving Loans and the Maximum Drawing Amount
for all Letters of Credit for such period.
7.5. NOTICES.
7.5.1. DEFAULTS. The Parent and the Borrower will promptly
notify the Administrative Agent in writing of the occurrence of any
Default or Event of Default. If any Person shall give any notice to the
Parent or its Subsidiaries or take any other action in respect of a
claimed default (whether or not constituting an Event of Default) under
this Credit Agreement or any other note, evidence of indebtedness,
indenture or other obligation for borrowed money in excess of $500,000
to which or with respect to which the Parent or any of its Subsidiaries
is a party or obligor, whether as principal, guarantor, surety or
otherwise, the Parent shall forthwith give written notice thereof to
the Administrative Agent, describing the notice or action and the
nature of the claimed default. The Borrower shall promptly notify the
Administrative Agent in writing of the occurrence of any default or
event of default under the Term Loan Agreement, stating the nature of
such default or event of default.
7.5.2. NOTICE OF LITIGATION AND JUDGMENTS. The Parent and the
Borrower will give notice to the Administrative Agent in writing within
fifteen (15) days of Senior Management becoming aware of any litigation
or proceedings threatened in writing or any pending litigation and
proceedings affecting the Parent or any of its Subsidiaries or to which
the Parent or any of its Subsidiaries is or becomes a party involving
(i) an uninsured claim against the Parent or any of its Subsidiaries
that would reasonably be expected to result in damages of more than
$1,000,000 against the Parent or any of its Subsidiaries or have a
material adverse effect on the Borrower and the Guarantors taken as a
whole or (ii) any litigation proceeding against Persons with which the
Parent or any of its Subsidiaries has a business relationship which is
likely to materially and adversely affect the business, financial
condition, assets or operations of the Borrower and the Guarantors
(taken as a whole) and stating the nature and status of such litigation
or proceedings. The Parent will give notice to the Administrative
Agent, in writing, in form and detail satisfactory to the
Administrative Agent, within ten (10) days of any judgment not covered
by insurance, final or otherwise, against the Parent or any of its
Subsidiaries in an amount in excess of $1,000,000.
7.5.3. NOTIFICATION OF CLAIM AGAINST COLLATERAL. The Parent
and the Borrower will, immediately upon becoming aware thereof, notify
the Administrative Agent and each of the Lenders in writing of any
setoff, claims (including, with respect to the Real Estate,
environmental claims), withholdings or other defenses in amounts
greater than $250,000 to which any of the Collateral, or the
Administrative Agent's rights with respect to the Collateral, are
subject.
7.5.4. NOTICES CONCERNING INVENTORY COLLATERAL. The Parent and
the Borrower shall provide to the Administrative Agent prompt notice of
(a) any quarterly physical count of the Parent's or any of its
Subsidiaries' inventory, together with a copy of the results thereof
certified by the Parent or such Subsidiary, (b) any determination by
the Parent or any of its Subsidiaries that the inventory levels of the
Parent or such Subsidiary are not adequate to meet the sales
projections of the Parent or such Subsidiary, and (c) any failure of
the Parent or any of its Subsidiaries to pay rent at any leased
location, which failure continues for more than ten (10) days following
the day on which such rent is due and payable by the Parent or such
Subsidiary.
7.5.5. NOTIFICATION OF ADDITIONAL INTELLECTUAL PROPERTY
RIGHTS. Within ten (10) days of the end of each Fiscal Quarter, the
Parent and the Borrower will (a) notify the Administrative Agent in
writing of (i) any patents, patent applications, patent application
disclosures filed with any patent office during such Fiscal Quarter or
which the intellectual property committee of the Parent or such
Subsidiary has approved for filing during such Fiscal Quarter as a
patent application, registered copyrights or mask works registered
during such Fiscal Quarter, applications for registration of copyrights
or mask works filed during such Fiscal Quarter, trademark and service
xxxx registrations during such Fiscal Quarter, trademark and service
xxxx registration applications filed during such Fiscal Quarter,
trademarks, service marks and trade names for which the intellectual
property committee of the Parent or such Subsidiary has approved filing
trademark registration applications during such Fiscal Quarter, all of
the foregoing whether a foreign or United States right and whether
owned by the Parent or such Subsidiary, to the extent not listed on
SCHEDULE 6.6, (ii) the abandonment of any of the foregoing during such
Fiscal Quarter and (b) deliver to the Administrative Agent (i) a list
of the fifty (50) most valuable copyrights of the Parent and its
Subsidiaries as of the end of such Fiscal Quarter (based on the revenue
derived therefrom) and (ii) evidence that such fifty (50) copyrights
have been registered with the United States Copyright Office, or
applications regarding the same have been filed with the United States
Copyright Office.
7.5.6. ENVIRONMENTAL EVENTS. The Parent and the Borrower will
promptly give notice to the Administrative Agent and each of the
Lenders (a) of any violation of any Environmental Law that the Parent
or any of its Subsidiaries reports in writing or is reportable by such
Person in writing (or for which any written report supplemental to any
oral report is made) to any Governmental Authority and (b) upon Senior
Management becoming aware thereof, of any inquiry, proceeding,
investigation, or other action, including a notice from any agency of
potential environmental liability, of any Governmental Authority that,
in the case of clauses (a) or (b) above, could have a material and
adverse affect on the financial position, business, operations, or
affairs of the Borrower and the Guarantors (taken as a whole).
7.5.7. NOTIFICATION REGARDING THE REAL PROPERTY. The Borrower
will promptly give notice to the Administrative Agent and each of the
Lenders of receipt or knowledge of any notice or correspondence by a
Governmental Authority concerning the Real Estate along with a copy of
any such notice or correspondence by the Governmental Authority,
including, but not limited to any notice of casualty loss and eminent
domain proceedings.
7.6. LEGAL EXISTENCE; MAINTENANCE OF PROPERTIES. (a) Except as
permitted by ss.8.5, the Parent and the Borrower will do and will cause each of
their Subsidiaries to do all things necessary to (i) in the case of each of the
Parent and the Borrower, maintain in full force and effect its legal existence
and good standing under the laws of its jurisdiction of organization or
incorporation, (ii) in the case of each of their Subsidiaries (excluding the
Borrower), maintain in full force and effect its legal existence and good
standing under the laws of its jurisdiction of organization or incorporation
except where the failure to do so would not have a material adverse affect on
the financial condition, properties or business of the Borrower and the
Guarantors, taken as a whole, (iii) maintain its qualification to do business in
each state or other jurisdiction in which the failure to do so would have a
material adverse effect on the condition, financial or otherwise, of the
Borrower and the Guarantors (taken as a whole), and (iv) maintain all of its
rights and franchises, except where the failure to maintain such right or
franchise would not have a material adverse effect on the conduct of the
business of the Borrower and the Guarantors, taken as a whole.
(b) Each of the Parent and the Borrower (i) will cause all of
its properties and those of its Subsidiaries used or useful in the
conduct of the Parent's business or the business of its Subsidiaries to
be maintained and kept in good condition, repair and working order and
supplied with all necessary equipment, (ii) will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Parent and the Borrower may be
necessary so that the business carried on in connection therewith may
be properly and advantageously conducted at all times, and (iii) will,
and will cause each of its Subsidiaries to, continue to engage
primarily in the businesses now conducted by them and in related or
complementary businesses; PROVIDED that nothing in this ss.7.6(b) shall
prevent either the Parent or the Borrower from discontinuing the
operation and maintenance of any of its properties or any of those of
its Subsidiaries if such discontinuance is, in the judgment of the
Parent and the Borrower, desirable in the conduct of its or their
business and that do not in the aggregate materially adversely affect
the business of the Parent and its Subsidiaries on consolidated basis.
7.7. INSURANCE. Each of the Parent and the Borrower will and will cause
each of its Subsidiaries to, maintain with financially sound and reputable
insurers insurance with respect to its properties and business against such
casualties and contingencies as shall be in accordance with the general
practices of businesses engaged in similar activities in similar geographic
areas and in amounts, containing such terms, in such forms and for such periods
as may be reasonable and prudent and in accordance with the terms of the
Security Documents. Each of the Parent and the Borrower will, and will cause
each of its Subsidiaries to, maintain insurance, in form, substance and amounts
satisfactory to the Administrative Agent, on the Mortgaged Properties in
accordance with the terms of the Mortgages.
7.8. TAXES. Each of the Parent and the Borrower will, and will cause
each of its Subsidiaries to, duly pay and discharge, or cause to be paid and
discharged, before the same shall become overdue, all Taxes, assessments and
other governmental charges imposed upon it and its real properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies that if unpaid might by law
become a Lien or charge upon any of its property; PROVIDED that any such Tax,
assessment, charge, levy or claim need not be paid if the validity or amount
thereof shall currently be contested in good faith by appropriate proceedings
and if the Parent, the Borrower or such Subsidiary shall have set aside on its
books adequate reserves with respect thereto; and PROVIDED FURTHER that the
Parent and each Subsidiary of the Parent will pay all such Taxes, assessments,
charges, levies or claims forthwith upon the commencement of proceedings to
foreclose or otherwise enforce any Lien that may have attached as security
therefor.
7.9. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. Each of
the Parent and the Borrower will, and will cause each of its Subsidiaries to,
comply with (i) the applicable laws and regulations wherever its business is
conducted, including all environmental laws, (ii) the provisions of its
Governing Documents, (iii) all agreements and instruments by which it or any of
its properties may be bound and (iv) all applicable decrees, orders, and
judgments, PROVIDED, that in each case, such compliance shall be required by
this Credit Agreement only where noncompliance with ss.ss.7.9(i)-(iv) would have
a material adverse effect on the business, assets, operations or financial
condition of the Borrower and the Guarantors (taken as a whole), or the ability
of either the Parent or the Borrower to fulfill its obligations under this
Credit Agreement or the other Loan Documents. If any authorization, consent,
approval, permit or license from any officer, agency or instrumentality of any
government or any central bank or other fiscal or monetary authority shall
become necessary or required in order that the Parent, the Borrower or any of
their Subsidiaries may fulfill any of their obligations hereunder or any of the
other Loan Documents to which the Parent, the Borrower or such Subsidiary is a
party, the Parent and the Borrower will, or (as the case may be) will cause such
Subsidiary to, promptly take or cause to be taken all reasonable steps within
the power of the Parent, the Borrower or such Subsidiary to obtain such
authorization, consent, approval, permit or license, and upon request of the
Administrative Agent, to furnish the Administrative Agent and the Lenders with
evidence thereof.
7.10. EMPLOYEE BENEFIT PLANS. Each of the Parent and the Borrower will
(i) promptly upon filing (if required by applicable law) the same with the
Department of Labor or Internal Revenue Service upon request of the
Administrative Agent, furnish to the Administrative Agent a copy of the most
recent actuarial statement required to be submitted under ss.103(d) of ERISA and
Annual Report, Form 5500, with all required attachments, in respect of each
Guaranteed Pension Plan and (ii) promptly upon receipt or dispatch, furnish to
the Administrative Agent any notice, report or demand sent or received in
respect of a Guaranteed Pension Plan under ss.ss.302, 4041, 4042, 4043, 4063,
4065, 4066 and 4068 of ERISA, or in respect of a Multiemployer Plan, under
ss.ss.4041A, 4202, 4219, 4242, or 4245 of ERISA.
7.11. USE OF PROCEEDS. The proceeds of the Loans and Letters of Credit
contemplated to be advanced or made available to the Borrower shall be used
solely for working capital and general business purposes, subject to the
restrictions set forth in this Credit Agreement.
7.12. CERTAIN CHANGES. Each of the Parent and the Borrower shall notify
the Administrative Agent, in writing, not less than thirty (30) days prior (i)
to any change in its chief executive office, its name or the type of its
organization, (ii) the acquisition of any real estate pursuant to ss.7.16 or
(iii) the acquisition of any asset in any jurisdiction other than those
jurisdictions specified on the Parent's and the Borrower's Perfection
Certificate.
7.13. CONDUCT OF BUSINESS. Except as permitted by ss.8.5, each of the
Parent and the Borrower will and will cause their Subsidiaries to continue to
engage primarily in the businesses engaged in by the Parent, the Borrower and
their Subsidiaries on the Closing Date, or such businesses as are reasonably
related or complementary to the businesses engaged in by the Parent, the
Borrower and their Subsidiaries on the Closing Date.
7.14. FURTHER ASSURANCES. Each of the Parent and the Borrower will, and
will cause each of its Subsidiaries to, cooperate with the Lenders and the
Administrative Agent and execute such further instruments and documents as the
Lenders or the Administrative Agent shall reasonably request to carry out to
their satisfaction the transactions contemplated by this Credit Agreement and
the other Loan Documents.
7.15. INSPECTION OF PROPERTIES AND BOOKS, ETC.
7.15.1. GENERAL. The Parent and the Borrower shall permit the
Lenders, through the Administrative Agent or any of the Lenders' other
designated representatives, at the Borrower's expense (such expense to
include a $850 per day field examination charge plus all out of pocket
expenses related thereto), to visit and inspect any of the properties
of the Parent or any of its Subsidiaries, to examine the books of
account of the Parent and its Subsidiaries (and to make copies thereof
and extracts therefrom), and to discuss the affairs, finances and
accounts of the Parent and its Subsidiaries with, and to be advised as
to the same by, its and their officers, and to conduct examinations and
verifications (whether by internal commercial finance examiners or
independent auditors satisfactory to the Administrative Agent (which
may be affiliated with one or more of the Lenders)) of all components
included in the Borrowing Base, all at such reasonable times and
intervals and with prior notice as the Administrative Agent or any
Lender may reasonably request, which report shall indicate whether or
not the information set forth in the Borrowing Base Certificate most
recently delivered is accurate and complete in all material respects
based upon a review by such auditors of the Accounts Receivable
(including verification with respect to the amount, aging, identity and
credit of the respective account debtors and the billing practices of
the Borrower) and inventory (including verification as to the value,
location and respective types). The Administrative Agent may at the
Borrower's expense, participate in or observe any physical count of any
inventory of the Parent or such Subsidiary included in the Collateral.
7.15.2. APPRAISALS. At the request of the Administrative Agent
or the Required Lenders, which requests may be made annually (or with
such other frequency as the Administrative Agent shall request upon the
occurrence and continuation of a Default or an Event of Default), the
Parent and the Borrower will obtain and deliver to the Administrative
Agent and the Lenders appraisal reports in form and substance and from
appraisers satisfactory to the Administrative Agent, stating (a) the
then current fair market, Net Orderly Liquidation Value and forced
liquidation values of all or any portion of the inventory, equipment or
real estate owned by the Parent or any of its Subsidiaries and (b) the
then current business value of the Parent and its Subsidiaries. Each
such appraisal shall be conducted and made at the expense of the
Borrower. Notwithstanding the foregoing, prior to an Event of Default,
the Administrative Agent and the Required Lenders shall not have the
right to request such annual appraisals of equipment or Real Estate if
the Term Loan Agent has (a) requested and received such annual
appraisals and (b) copies of such annual appraisals have been provided
to the Administrative Agent.
7.15.3. COMMUNICATIONS WITH ACCOUNTANTS. Upon the
Administrative Agent's reasonable request, each of the Parent and the
Borrower will request that the Parent's and the Borrower's independent
certified public accountants communicate with the Administrative Agent,
and, if accompanied by the Administrative Agent, the Lenders, with
respect to the financial condition of the Parent or any of its
Subsidiaries; PROVIDED that the Parent and the Borrower shall
participate in all such communications.
7.15.4. ENVIRONMENTAL ASSESSMENTS. No more frequently than
once during each calendar year (or with such other frequency as the
Administrative Agent shall request upon the occurrence and continuation
of a Default or an Event of Default), the Administrative Agent may, for
the purpose of assessing and ensuring the value of any Mortgaged
Property, obtain one or more environmental assessments or audits of
such Mortgaged Property prepared by a hydrogeologist, an independent
engineer or other qualified consultant or expert approved by the
Administrative Agent to evaluate or confirm (a) whether any Hazardous
Substances are present in the soil or water at such Mortgaged Property
and (b) whether the use and operation of such Mortgaged Property
complies with all Environmental Laws. Environmental assessments may
include without limitation detailed visual inspections of such
Mortgaged Property including any and all storage areas, storage tanks,
drains, dry xxxxx and leaching areas, and the taking of soil samples,
surface water samples and ground water samples, as well as such other
investigations or analyses as the Administrative Agent deems
appropriate. All such environmental assessments shall be conducted and
made at the expense of the Borrower. Notwithstanding the foregoing, so
long as no Event of Default has occurred and is continuing, prior to
the repayment in full of the Term Loans, the Administrative Agent shall
not have the right to request such annual environmental assessments so
long as any copies of such annual environmental assessments requested
and received by the Term Loan Agent have been provided to the
Administrative Agent.
7.16. ADDITIONAL MORTGAGED PROPERTY. At any time following the Closing
Date, upon request of the Administrative Agent, each of the Parent and the
Borrower shall, and shall cause each of its Subsidiaries to, forthwith (but in
any event within sixty (60) days following any such request therefor) deliver to
the Administrative Agent for the benefit of the Lenders a fully executed
mortgage or deed of trust over any or all parcels of Real Estate acquired or
leased by the Parent, the Borrower or such Subsidiary after the Closing Date,
each of which shall be in form and substance satisfactory to the Administrative
Agent and shall be deemed to be a Security Document hereunder, together with
such title insurance policies, surveys, environmental site assessments,
evidences of insurance with the Administrative Agent named as loss payee and
additional insured, legal opinions and other documents and certificates with
respect to such Real Estate as the Administrative Agent may reasonably request.
Each of the Parent and the Borrower further agrees that, following the taking of
such actions with respect to such Real Estate, the Administrative Agent shall
have, for the benefit of the Lenders, a valid and enforceable first priority
(subject to the Lien of the Term Loan Agent on Fixed Asset Collateral) mortgage
or deed of trust over such Real Estate, free and clear of all defects and
encumbrances except for Permitted Liens.
7.17. BANK ACCOUNTS.
7.17.1. GENERAL.
(a) Each of the Parent and the Borrower will, and
will cause each of their Subsidiaries to, maintain their
principal accounts for operation, administration, cash
management and other deposit accounts for the conduct of the
Parent's, the Borrower's and their Subsidiaries' business with
the Cash Management Bank.
(b) Without limiting the generality of (a) above,
each of the Parent and the Borrower will, and will cause each
of its Subsidiaries to, (i) establish a depository account
with the Cash Management Bank (the "Concentration Account")
which will be structured to assure that all amounts in such
account shall only be applied in accordance with ss.ss.2.11.2
and 2.12, (ii) instruct all account debtors and other obligors
of the Parent, the Borrower or any Subsidiary of the Parent,
pursuant to notices of assignment and instruction letters in
form and substance satisfactory to the Administrative Agent,
to remit all cash proceeds of Accounts Receivable to local
depository accounts maintained by the Parent, the Borrower or
any Subsidiary of the Parent ("Local Accounts") with financial
institutions which have entered into agency account agreements
and, if applicable, lock box agreements (collectively, "Agency
Account Agreements") in form and substance satisfactory to the
Administrative Agent, or the Concentration Account, (iii)
direct all depository institutions with Local Accounts to
cause all funds held in each such Local Account to be
transferred no less frequently than once each week to, and
only to, the Concentration Account; PROVIDED that the Parent
and its Subsidiaries may maintain an aggregate amount of no
more than $150,000 in such Local Accounts, which amount shall
not be subject to such transfers, (iv) at all times, subject
to the Intercreditor Agreement, ensure that immediately upon
the Parent's, the Borrower's or any of their Subsidiaries'
receipt of any funds constituting cash proceeds of any
Collateral, all such amounts shall have been deposited in a
Local Account or the Concentration Account. Subject to the
Intercreditor Agreement, the Borrower hereby agrees that all
amounts received by the Administrative Agent in the
Concentration Account will be the sole and exclusive property
of the Administrative Agent, for the accounts of the
applicable Lenders and the Administrative Agent, to be applied
in accordance with ss.2.11 or ss.2.12 as applicable
7.18. DOMESTIC SUBSIDIARIES. The Parent shall cause each Domestic
Subsidiary of the Parent (other than the Borrower) to be a Guarantor at all
times.
7.19. [INTENTIONALLY OMITTED].
7.20. FINANCIAL CONSULTANT. The Parent and the Borrower shall continue
to retain, at the Borrower's and Guarantors' expense, Xxxxxxx & Marsal (the
"Financial Consultant") on terms and conditions satisfactory to the
Administrative Agent for a period of not less than three (3) months following
the Closing Date, as its financial consultant. Parent acknowledges that the
Financial Consultant has been chosen solely by Parent and the Financial
Consultant will be an agent only of Parent, and not of the Administrative Agent
or any Lender, in all respects. At any time and from time to time, the Borrower
and the Guarantors shall make the Financial Consultant, its officers and other
consultants of the Parent and its Subsidiaries available, whether by telephone
or in person, to review and discuss the Parent's and its Subsidiaries' financial
condition; PROVIDED that the Parent shall have the option to participate in such
communications.
8. NEGATIVE COVENANTS OF THE PARENT AND THE BORROWER.
Each of the Parent and the Borrower covenants and agrees that, so long
as any Loan, Unpaid Reimbursement Obligation or Letter of Credit is outstanding
or any Lender has any obligation to make any Loans or the Administrative Agent
has any obligations to cause the Issuing Bank to issue, extend or renew any
Letter of Credit:
8.1. INVESTMENTS. Neither the Parent nor the Borrower will or
will permit any of their Subsidiaries to make any Investment in any
Person, except for Investments which consist of:
(a) marketable direct or guaranteed obligations of
the United States of America that mature within one (1) year
from the date of purchase by the Parent or any Subsidiary of
the Parent;
(b) demand deposits, certificates of deposit, bankers
acceptances and time deposits of United States banks having
total assets in excess of $100,000,000;
(c) securities commonly known as "COMMERCIAL PAPER"
issued by a corporation organized and existing under the laws
of the United States of America or any state thereof that at
the time of purchase have been rated and the ratings for which
are not less than "P 1" if rated by Xxxxx'x, and not less than
"A 1" if rated by S&P;
(d) overnight Investments in money market funds with
portfolios comprised of the items described in clauses (a)
through (c) above;
(e) Investments consisting of the Guaranties;
(f) Investments existing on the date hereof and
listed on SCHEDULE 8.1;
(g) Investments with respect to Indebtedness
permitted by ss.8.2(d) so long as such entities remain
Subsidiaries of the Borrower;
(h) Investments (i) by the Parent in Domestic
Subsidiaries of the Parent and (ii) by the Borrower in
Domestic Subsidiaries of the Borrower;
(i) Investments consisting of loans and advances to
employees for moving, entertainment, travel, housing and other
similar expenses in the ordinary course of business not to
exceed $250,000 in the aggregate at any time outstanding; and
(j) Notes receivable and securities received in
connection with the insolvency or inability to pay of any of
the Parent's or the Borrower's account debtors in an aggregate
amount not to exceed at any time the greater of (i) $3,000,000
and (ii) ten percent (10%) of the outstanding face amount of
the Borrower's Accounts Receivable at such time;
PROVIDED, HOWEVER, such Investments shall be permitted hereunder only
to the extent such Investments (if held by the Parent or any Domestic Subsidiary
of the Parent) are subject to the first priority perfected Lien in favor of the
Administrative Agent securing the Obligations free of all Liens other than
Permitted Liens.
8.2. RESTRICTIONS ON INDEBTEDNESS. The Parent and the Borrower will
not, and will not permit any of their Subsidiaries to, create, incur, assume,
guarantee or be or remain liable, contingently or otherwise, with respect to any
Indebtedness other than:
(a) Indebtedness created hereunder;
(b) Indebtedness existing on the Closing Date which is set
forth in SCHEDULE 8.2;
(c) other Indebtedness incurred after the Closing Date
(determined on a consolidated basis without duplication in accordance
with GAAP) in respect of Capitalized Leases and/or secured by Liens
permitted under ss.8.3(h), in an aggregate principal amount at any time
outstanding not in excess of $2,500,000;
(d) Indebtedness of a Domestic Subsidiary of the Borrower to
the Borrower; PROVIDED that, in each case, such Indebtedness is
evidenced by a note which is pledged to the Administrative Agent;
(e) Indebtedness of the Parent or any Subsidiary of the Parent
in respect of Derivative Agreements;
(f) Indebtedness of the Parent and its Subsidiaries consisting
of (i) the Term Loan Obligations; provided that the principal amount
thereof does not exceed the Priority Term Loan Debt and (ii) any
refinancings thereof; PROVIDED that the principal amount of such
Indebtedness is not increased at the time of such refinancing and such
refinancing and the intercreditor arrangements with the holders of such
Indebtedness are otherwise on terms and conditions satisfactory to the
Administrative Agent; and
(g) Indebtedness of the Parent and its Subsidiaries consisting
of the financing of insurance premiums incurred in the ordinary course
of business.
8.3. RESTRICTIONS ON LIENS.
8.3.1. PERMITTED LIENS. Neither the Parent nor the Borrower
will, nor will they permit any of their Subsidiaries to, create, incur,
assume or permit to exist any Lien on any of its property or assets of
any character now owned or hereafter acquired by it, or assign or sell
any income or revenues (including accounts receivable) or rights in
respect of any thereof, except (the following being called "PERMITTED
LIENS"):
(a) Liens created hereunder or under the other Loan
Documents;
(b) any Lien on any property or asset of the Parent
or any Subsidiary of the Parent existing on the date hereof
and set forth in SCHEDULE 8.3.1, PROVIDED that (i) such Lien
shall not apply to any other property or asset of the Parent
or any Subsidiary of the Parent and (ii) such Lien shall
secure only those obligations which it secures on the date
hereof;
(c) Liens imposed by any Governmental Authority for
taxes, assessments or charges not yet delinquent or which are
being contested in good faith and by appropriate proceedings
if adequate reserves with respect thereto are maintained on
the books of the Parent and Subsidiaries of the Parent in
accordance with GAAP and which reserves shall be acceptable to
the Administrative Agent;
(d) landlords', carriers', warehousemen's,
mechanics', materialmen's, repairmen's or other like Liens,
and vendors' Liens imposed by statute or common law not
securing the repayment of Indebtedness, arising in the
ordinary course of business which are not overdue for a period
of more than sixty (60) days or which are being contested in
good faith and by appropriate proceedings and Liens securing
judgments (including, without limitation, pre-judgment
attachments);
(e) pledges or deposits under worker's compensation,
unemployment insurance and other social security legislation
and pledges or deposits to secure the performance of bids,
tenders, trade contracts (other than for borrowed money),
leases (other than Capitalized Leases), utility purchase
obligations, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(f) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of
business and encumbrances consisting of zoning restrictions,
easements, licenses, restrictions on the use of Real Property
or minor imperfections in title thereto which, in the
aggregate, are not material in amount, and which do not, in
the aggregate, materially detract from the value of the Real
Property of the Parent or any Subsidiary of the Parent or
materially interfere with the ordinary conduct of the business
of the Parent or any Subsidiary of the Parent;
(g) Liens consisting of bankers' liens and rights of
setoff, in each case, arising by operation of law, and Liens
on documents presented in letter of credit drawings;
(h) Liens on Capital Assets, acquired, constructed or
improved by the Parent or any Subsidiary of the Parent,
PROVIDED that (i) such Liens secure Indebtedness (including
Indebtedness with respect to Capitalized Leases) permitted by
ss.8.2(c), (ii) such Liens and the Indebtedness secured
thereby are incurred prior to or within ninety 90 days after
such acquisition or the completion of such construction or
improvement or were in effect at the time the Parent or a
Subsidiary of the Parent acquired the assets or stock, (iii)
the Indebtedness secured thereby does not exceed the cost of
acquiring, constructing or improving such fixed or capital
assets, and (iv) such security interests shall not apply to
any other property or assets of the Parent or its
Subsidiaries;
(i) Other nonconsensual Liens; PROVIDED that the
aggregate amount of obligations secured thereby does not
exceed $100,000 at any time;
(j) Liens granted to the Term Loan Agent under the
Term Loan Documents to secure the Indebtedness permitted under
ss.8.2(f), and any Liens securing any permitted refinancing
thereof; and
(k) Liens on insurance policies and the proceeds
thereof pursuant to insurance premium financing arrangements
permitted under ss.8.2(g).
8.3.2. RESTRICTIONS ON NEGATIVE PLEDGES AND UPSTREAM
LIMITATIONS. The Parent and the Borrower will not, nor will they permit
any of their Subsidiaries to (a) enter into or permit to exist any
arrangement or agreement (excluding this Credit Agreement, the other
Loan Documents and the Term Loan Documents) which directly or
indirectly prohibits the Parent or any of its Subsidiaries from
creating, assuming or incurring any Lien upon its properties, revenues
or assets or those of any of its Subsidiaries whether now owned or
hereafter acquired, or (b) enter into any agreement, contract or
arrangement (excluding this Credit Agreement, the other Loan Documents
and the Term Loan Documents) restricting the ability of any Subsidiary
of the Parent and the Borrower to pay or make dividends or
distributions in cash or kind to the Parent or the Borrower, to make
loans, advances or other payments of whatsoever nature to the Parent or
the Borrower, or to make transfers or distributions of all or any part
of its assets to the Parent or the Borrower; in each case other than
customary anti-assignment provisions contained in leases and licensing
agreements entered into by the Parent or any Subsidiary in the ordinary
course of its business, but only if consents by the counterparty
thereto have been obtained by the Parent or its Subsidiaries in form
and substance satisfactory to the Administrative Agent.
8.4. RESTRICTED PAYMENTS. The Parent, the Borrower and their
Subsidiaries will not make any Restricted Payments other than
Distributions to the Parent from a Subsidiary of the Parent or to the
Borrower from a Subsidiary of the Borrower.
8.5. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS.
8.5.1. MERGERS AND ACQUISITIONS. Neither the Parent nor the
Borrower will, or will permit any of their Subsidiaries to, become a
party to any merger or consolidation, or agree to or effect any asset
acquisition or stock acquisition (other than the acquisition of assets
in the ordinary course of business consistent with past practices)
except for (i) the merger or consolidation of one or more of the
Subsidiaries of the Borrower with and into the Borrower, (ii) the
merger or consolidation of two or more Subsidiaries of the Borrower.
8.5.2. DISPOSITION OF ASSETS. Neither the Parent nor the
Borrower will, or will permit any of their Subsidiaries to, become a
party to or agree to or effect any disposition of any assets, other
than (i) the sale of inventory, the licensing of intellectual property
and the disposition of obsolete assets, in each case in the ordinary
course of business consistent with past practices and (ii) prior to the
indefeasible payment in full of the Term Loan Obligations, the sale of
Fixed Asset Collateral so long as, (x) the sale of such Real Estate is
permitted under the Term Loan Agreement and (y) all of the net proceeds
from such sale are applied in accordance with the Term Loan Agreement
as in effect on the date hereof.
8.6. SALE AND LEASEBACK. Neither the Parent nor the Borrower will, or
will permit any of their Subsidiaries to, enter into any arrangement, directly
or indirectly, whereby the Parent or any Subs idiary of the Parent shall sell or
transfer any property owned by it in order then or thereafter to lease such
property (other than short-term or transitional leases entered into in
connection with the disposition of any Real Estate and/or consolidation of
operations) that Parent or any Subsidiary of the Parent intends to use for
substantially the same purpose as the property being sold or transferred.
8.7. CHANGE OF FISCAL YEAR. The Parent will not at any time change its
Fiscal Year without the prior written consent of the Required Lenders.
8.8. EMPLOYEE BENEFIT PLANS. Neither the Parent, the Borrower nor any
ERISA Affiliate will:
(a) engage in any "prohibited transaction" within the meaning
of ss.406 of ERISA or ss.4975 of the Code which could result in a
material liability for the Parent or any of its Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an
"accumulated funding deficiency", as such term is defined in ss.302 of
ERISA, whether or not such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an
extent which, or terminate any Guaranteed Pension Plan in a manner
which, could result in the imposition of a Lien or encumbrance on the
assets of the Parent or any of its Subsidiaries pursuant to ss.302(f)
or ss.4068 of ERISA; or
(d) amend any Guaranteed Pension Plan in circumstances
requiring the posting of security pursuant to ss.307 of ERISA or
ss.401(a)(29) of the Code.
8.9. COMPLIANCE WITH ENVIRONMENTAL LAWS. The Parent and the Borrower
will not, and will not permit any of their Subsidiaries to, (a) use any of the
Real Estate or any portion thereof for the handling, processing, storage or
disposal of Hazardous Substances, (b) cause or permit to be located on any of
the Real Estate any underground tank or other underground storage receptacle for
Hazardous Substances, (c) generate any Hazardous Substances on any of the Real
Estate, (d) conduct any activity at any Real Estate or use any Real Estate in
any manner so as to cause a release (i.e. releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
disposing or dumping) or threatened release of Hazardous Substances on, upon or
into the Real Estate or (e) otherwise conduct any activity at any Real Estate or
use any Real Estate in any manner that would violate any Environmental Law or
bring such Real Estate in violation of any Environmental Law, unless, in each
case, such violation, use, condition, generation or activity could not
reasonably be expected to have a material adverse effect on the value of such
Real Estate or the business, assets, operations or financial condition of the
Borrower and the Guarantors (taken as a whole), or the ability of the Parent,
the Borrower or any of their Subsidiaries to fulfill its obligations under this
Credit Agreement or the other Loan Documents.
8.10. CHANGE IN TERMS OF GOVERNING DOCUMENTS. The Parent and the
Borrower shall not effect or permit any change in or amendment to the Governing
Documents of the Parent or any of its Subsidiaries, which could reasonably be
expected to adversely affect the Lenders.
8.11. CREATION OF SUBSIDIARIES. Neither the Parent nor the Borrower
shall, or shall permit any of their `Subsidiaries to, create or permit to exist
any Subsidiary unless (a) one hundred percent (100%) of the Capital Stock or
other equity interests of such Subsidiary are owned by a Guarantor or the
Borrower, (b) prior to the formation of such Subsidiary, the Parent and the
Borrower shall notify the Administrative Agent and the Lenders thereof in
writing and deliver to the Administrative Agent an updated SCHEDULE 6.18, (c)
contemporaneously with the formation of any Domestic Subsidiary, the Parent and
the Borrower shall, and shall cause each of their Subsidiaries to, (i) take all
steps as may be necessary or advisable in the opinion of the Administrative
Agent to pledge to the Administrative Agent, for the benefit of the Lenders and
the Administrative Agent, on a perfected, first-priority basis, all of the
Capital Stock or other equity interests of such Domestic Subsidiary pursuant to
a pledge agreement in form and substance satisfactory to the Administrative
Agent, which such pledge agreement shall be a Pledge Agreement and a Security
Document hereunder, (ii) cause any such Domestic Subsidiary to guaranty all of
the Obligations hereunder pursuant to a guaranty in form and substance
satisfactory to the Administrative Agent, which such guaranty shall be a
Guaranty and a Security Document hereunder, (iii) cause any such Subsidiary to
take all steps as may be necessary or advisable in the opinion of the
Administrative Agent to grant to the Administrative Agent, for the benefit of
the Lenders and the Administrative Agent, a first priority (subject to the Lien
of the Term Loan Agent on Fixed Asset Collateral), perfected security interest
in substantially all of its assets as collateral security for such Guaranty,
pursuant to security documents, mortgages, pledges and other documents in form
and substance satisfactory to the Administrative Agent, each of which documents
shall be a Security Document hereunder, and (iv) deliver to the Administrative
Agent all such evidence of corporate or other authorization, legal opinions
(including local counsel opinions where applicable) and other documentation as
the Administrative Agent may request, and (d) contemporaneously with the
formation of any Foreign Subsidiary, the Parent and the Borrower shall, and
shall cause each of their Subsidiaries to, take all steps as may be necessary or
advisable in the opinion of the Administrative Agent to pledge to the
Administrative Agent, for the benefit of the Lenders and the Administrative
Agent, sixty-five percent (65%) of the Capital Stock or other equity interests
of such Foreign Subsidiary pursuant to a pledge agreement in form and substance
satisfactory to the Administrative Agent, which such pledge agreement shall be a
Pledge Agreement and a Security Document hereunder.
8.12. TRANSACTIONS WITH AFFILIATES. The Parent and the Borrower will
not, and will not permit any of their Subsidiaries to, engage in any transaction
with any Affiliate (excluding Domestic Subsidiaries of the Parent) of the Parent
(other than for services by individuals as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any such
Affiliate or, to the knowledge of the Parent and the Borrower, any corporation,
partnership, trust or other entity in which any such Affiliate has a substantial
interest or is an officer, director, trustee or partner, on terms more favorable
to such Person than would have been obtainable on an arm's-length basis in the
ordinary course of business.
8.13. AGENCY ACCOUNT. The Parent and the Borrower will not, and will
not permit any of their Subsidiaries to, (a) establish any bank accounts other
than those listed on SCHEDULE 6.20, without the Administrative Agent's prior
written consent, (b) violate directly or indirectly any Agency Account Agreement
or other bank agency or lock box agreement in favor of the Administrative Agent
for the benefit of the Lenders and the Administrative Agent with respect to such
account, (c) deposit into any of the payroll accounts listed on SCHEDULE 6.20
any amounts in excess of amounts necessary to pay current payroll obligations
from such accounts (other than balances not in excess of $250,000 in accordance
with the Parent's and the Borrower's usual practices), or (d) cause the
aggregate balance maintained in all deposit accounts (other than payroll
accounts referred to in clause (c)) which are not subject to an Agency Account
Agreement in favor of the Administrative Agent to exceed $750,000.
8.14. BUSINESS ACTIVITIES. The Parent and the Borrower will not, and
will not permit any of their Subsidiaries to, engage directly or indirectly
(whether through Subsidiaries or otherwise) in any type of business other than
the businesses conducted by them on the Closing Date and in related businesses.
8.15. CHANGES RELATING TO TERM LOAN DOCUMENTS. The Parent and the
Borrower will not, and will not permit any of their Subsidiaries to, amend the
terms of the Term Loan Agreement without the prior written consent of the
Administrative Agent.
9. FINANCIAL COVENANTS OF THE PARENT AND THE BORROWER.
9.1. FIXED CHARGE COVERAGE RATIO. Each of the Parent and the
Borrower covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation or Letter of Credit is outstanding or any
Lender has any obligation to make any Loans or the Administrative Agent
has any obligation to cause the Issuing Bank to issue, extend or renew
any Letters of Credit, and based on the consolidated financial
statements of the Parent and its Subsidiaries delivered in accordance
with the terms hereof: (a) at any time during any Fiscal Quarter (x)
ending prior to or at the end of FQ3 of 2008 and (y) during which
Excess Availability (prior to the application of the Availability
Reserve) is less than the sum of (1) $4,250,000 plus (2) any increases
in the Availability Reserve following the Closing Date plus (3)
$500,000, the Parent and the Borrower shall not permit the Fixed Charge
Coverage Ratio, determined as of the end of the most recently ended
Fiscal Quarter, to be less than 1.0:1.0 and (b) at any time during any
Fiscal Quarter (x) ending after FQ3 of 2008 and (y) during which Excess
Availability (prior to the application of the Availability Reserve) is
less than the sum of (1) $4,250,000 plus (2) any increases in the
Availability Reserve following the Closing Date plus (3) $2,500,000,
the Parent and the Borrower shall not permit the Fixed Charge Coverage
Ratio, determined as of the end of the most recently ended Fiscal
Quarter, to be less than 1.0:1.0.
9.2. [INTENTIONALLY OMITTED].
9.3. CAPITAL EXPENDITURES. During any period referenced in the table
set forth below, the Parent and the Borrower will not, and will not allow any of
their Subsidiaries to, make Capital Expenditures that exceed the aggregate
amount set forth in the table below opposite such period:
----------------------------------------------- ------------------------------
Period Amount
----------------------------------------------- ------------------------------
Fiscal Year 2006 $10,000,000
----------------------------------------------- ------------------------------
Fiscal Year 2007 $12,000,000
----------------------------------------------- ------------------------------
Fiscal Year 2008 and for each Fiscal Year $15,000,000
thereafter
----------------------------------------------- ------------------------------
10. CLOSING CONDITIONS.
The obligations of the Lenders to amend and restate the Existing Credit
Agreement shall be subject to the satisfaction of the following conditions
precedent, in each case, in form and substance satisfactory to the
Administrative Agent and the Lenders:
10.1. LOAN DOCUMENTS. Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to each of the
Lenders. Each Lender shall have received a fully executed copy of each such
document.
10.2. CERTIFIED COPIES OF GOVERNING DOCUMENTS. Each of the Lenders
shall have received from the Guarantors, the Borrower and each of its
Subsidiaries a copy, certified by a duly authorized officer of such Person or
other appropriate Person to be true and complete on the Closing Date, of each of
its Governing Documents as in effect on such date of certification or a
certification that such Governing Documents have not been amended or otherwise
modified since the Original Closing Date.
10.3. CORPORATE OR OTHER ACTION. All corporate (or other) action
necessary for the valid execution, delivery and performance by each of the
Guarantors, the Borrower and each of its Subsidiaries of this Credit Agreement
and the other Loan Documents to which it is or is to become a party shall have
been duly and effectively taken, and evidence thereof satisfactory to the
Lenders shall have been provided to each of the Lenders.
10.4. INCUMBENCY CERTIFICATE. Each of the Lenders shall have received
from each of the Guarantors, the Borrower and each of its Subsidiaries an
incumbency certificate, dated as of the Closing Date, signed by a duly
authorized officer of such Guarantor, the Borrower or such Subsidiary, and
giving the name and bearing a specimen signature of each individual who shall be
authorized: (a) to sign, in the name and on behalf of each such Person, each of
the Loan Documents to which the Borrower, a Guarantor or such Subsidiary is or
is to become a party; (b) in the case of the Borrower, to make Loan Requests and
Conversion Requests and to apply for Letters of Credit; and (c) to give notices
and to take other action on its behalf under the Loan Documents.
10.5. VALIDITY OF LIENS. The Security Documents shall be effective to
create in favor of the Administrative Agent a legal, valid and enforceable first
priority (subject to the Lien of the Term Loan Agent on Fixed Asset Collateral)
perfected security interest in and Lien upon the Collateral. All filings,
recordings, deliveries of instruments and other actions necessary or desirable
in the opinion of the Administrative Agent to protect and preserve such security
interests shall have been duly effected. The Administrative Agent shall have
received evidence thereof in form and substance satisfactory to the
Administrative Agent.
10.6. PERFECTION CERTIFICATES AND UCC SEARCH RESULTS. The
Administrative Agent shall have received from each of the Guarantors, the
Borrower and its Subsidiaries a completed and fully executed Perfection
Certificate and the results of UCC searches (and the equivalent thereof in all
applicable foreign jurisdictions) with respect to the Collateral, indicating no
Liens other than Permitted Liens and otherwise in form and substance
satisfactory to the Administrative Agent.
10.7. CERTIFICATES OF INSURANCE. The Administrative Agent shall have
received (a) a certificate of insurance from an independent insurance broker
dated as of the Closing Date, naming the Administrative Agent as loss payee
and/or additional insured, as applicable, identifying insurers, types of
insurance, insurance limits, and policy terms, and otherwise describing the
insurance obtained in accordance with the provisions of the Security Agreements
and (b) certified copies of all policies evidencing such insurance (or
certificates therefore signed by the insurer or an agent authorized to bind the
insurer).
10.8. AGENCY ACCOUNT AGREEMENTS. The Parent and its Subsidiaries shall
have established the Concentration Account, and the Administrative Agent shall
have received an Agency Account Agreement executed by the Cash Management Bank
and, to the extent required by ss.8.13, each depository institution with which
the Parent or any Subsidiary of the Parent maintains a Local Account.
10.9. BORROWING BASE AND COLLATERAL UPDATE CERTIFICATES. The
Administrative Agent shall have received an executed (a) Borrowing Base
Certificate, which Borrowing Base Certificate shall demonstrate Excess
Availability (after giving effect to the payment of all fees and expenses, the
issuance of all Letters of Credit and the funding of the Term Loans and all
Revolving Loans to be paid, issued or funded on the Closing Date) of not less
than the sum of (i) $1,000,000 plus (ii) accounts payable that are more than
seven (7) days past due in excess of $3,250,000, and (b) a Collateral Update
Certificate, in each case, in form and substance satisfactory to the
Administrative Agent.
10.10. ACCOUNTS RECEIVABLE AGING REPORT. The Administrative Agent shall
have received from the Borrower the most recent Accounts Receivable aging report
of the Borrower dated as of a date which shall be no more than fifteen (15) days
prior to the Closing Date and the Borrower shall have notified the
Administrative Agent in writing on the Closing Date of any material deviation
from the Accounts Receivable values reflected in such Accounts Receivable aging
report and shall have provided the Administrative Agent with such supplementary
documentation as the Administrative Agent may reasonably request.
10.11. PAYMENT OF CLOSING FEES. The Borrower shall have paid to the
Administrative Agent the Fees required to be paid by them on the Closing Date.
10.12. EXISTING CREDIT AGREEMENT. (a) The Administrative Agent shall
have received (i) payment in full of all principal of, and interest and fees on,
the Term Loan (as defined in the Existing Credit Agreement), (ii) the
termination fee required pursuant to ss.2.3 of the Existing Credit Agreement as
a result of the $5,000,000 reduction in the Total Commitment (as defined in the
Existing Credit Agreement) and (iii) the deferred amendment fee equal to
$319,900 earned in connection with the Fifth Amendment (as defined in the
Existing Credit Agreement) and (b) all commitments under the Existing Credit
Agreement of the Lenders party to this Credit Agreement shall be evidenced only
by this Credit Agreement.
10.13. INTERCREDITOR AGREEMENT; TERM LOAN DOCUMENTS. (a) The
Intercreditor Agreement shall have been duly executed and delivered by the
respective parties thereto, shall be in full force and effect and shall be in
form and substance satisfactory to each of the Administrative Agent, (b) the
Administrative Agent shall have received certified copies of the Term Loan
Documents and (c) the Administrative Agent shall have received evidence that the
Borrower has received proceeds of the Term Loans in an amount satisfactory to
the Administrative Agent.
10.14. OPINIONS OF COUNSEL. Each of the Lenders and the Administrative
Agent shall have received a favorable legal opinion addressed to the Lenders and
the Administrative Agent, dated as of the Closing Date, in form and substance
satisfactory to the Lenders and the Administrative Agent, from Xxxxxx Xxxxxx
Xxxxxxxxx Xxxx and Xxxx LLP, counsel to the Parent and its Subsidiaries.
10.15. [INTENTIONALLY OMITTED].
10.16. [INTENTIONALLY OMITTED].
10.17. [INTENTIONALLY OMITTED].
10.18. [INTENTIONALLY OMITTED].
10.19. NO MATERIAL ADVERSE CHANGE. Since the Balance Sheet Date, as
determined by the Administrative Agent, there has occurred no material adverse
change in the financial condition, business, assets, liabilities or business
prospects of the Borrower and the Guarantors, taken as a whole.
10.20. LANDLORD WAIVERS. The Administrative Agent shall have received
landlord waivers, each in form and substance satisfactory to the Administrative
Agent, relating to each of the leased properties listed on SCHEDULE 10.20(A)
hereto.
10.21. LANDLORD CONSENTS. The Parent and its Subsidiaries shall have
delivered to the Administrative Agent all consents required for the
Administrative Agent to receive, as part of the Security Documents, a collateral
assignment of each material leasehold of personal property, and a mortgage of
each material leasehold of real property, together in each case with such
estoppel certificates as the Administrative Agent may request.
10.22. COLLATERAL EXAMINATIONS/APPRAISALS. The Administrative Agent
shall have received the results of collateral examinations and appraisals
performed with respect to the Collateral, each in form and substance
satisfactory to the Administrative Agent.
10.23. FINANCIAL STATEMENT AND PROJECTIONS. The Administrative Agent
shall have received the financial statements and projections referred to in
ss.6.2, each in form and substance satisfactory to the Administrative Agent.
11. CONDITIONS TO ALL BORROWINGS.
The obligations of the Lenders to make any Loan, and of the
Administrative Agent to cause the Issuing Bank to issue, extend or renew any
Letter of Credit, in each case whether on or after the Closing Date, shall also
be subject to the satisfaction of the following conditions precedent:
11.1. REPRESENTATIONS TRUE; NO DEFAULT OR EVENT OF DEFAULT. Each of the
representations and warranties of the Parent and any of its Subsidiaries
contained in this Credit Agreement, the other Loan Documents or in any document
or instrument delivered pursuant to or in connection with this Credit Agreement
(other than the representations and warranties contained in ss.ss.6.23(b), 6.26,
6.27, 6.28 and 6.29) shall be true as of the date as of which they were made and
shall also be true at and as of the time of the making of such Loan or the
issuance, extension or renewal of such Letter of Credit, with the same effect as
if made at and as of that time (except to the extent of changes resulting from
transactions contemplated or permitted by this Credit Agreement and the other
Loan Documents and changes occurring in the ordinary course of business that
singly or in the aggregate are not materially adverse, and to the extent that
such representations and warranties relate expressly to an earlier date) and no
Default or Event of Default shall have occurred and be continuing, and no
condition shall exist on such date which constitutes an Event of Default.
11.2. NO LEGAL IMPEDIMENT. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of any Lender would make it illegal for such Lender to make such Loan or to
participate in the issuance, extension or renewal of such Letter of Credit or in
the reasonable opinion of the Administrative Agent would make it illegal for the
Issuing Bank to issue, extend or renew such Letter of Credit.
11.3. GOVERNMENTAL REGULATION. Each Lender shall have received such
statements in substance and form reasonably satisfactory to such Lender as such
Lender shall require for the purpose of compliance with any applicable
regulations of the Comptroller of the Currency or the Board of Governors of the
Federal Reserve System.
11.4. PROCEEDINGS AND DOCUMENTS. All proceedings in connection with the
transactions contemplated by this Credit Agreement, the other Loan Documents and
all other documents incident thereto shall be satisfactory in substance and in
form to the Lenders and to the Administrative Agent and the Administrative
Agent's Special Counsel, and the Lenders, the Administrative Agent and such
counsel shall have received all information and such counterpart originals or
certified or other copies of such documents as the Administrative Agent may
reasonably request.
11.5. PAYMENT OF FEES. The Borrower shall have complied with their
obligations to pay all Fees, Reimbursement Obligations and each other amount
arising hereunder at any time subsequent to the Closing Date and becoming due
and payable on or before the Drawdown Date of such Loan or the date of the
issuance of such Letter of Credit.
11.6. EXCHANGE LIMITATIONS. There exists no reason whatsoever,
including, without limitation, by reason of the application of any so-called
"currency exchange" laws, rules or regulations (as in effect at the time of any
proposed borrowings hereunder) which could reasonably be expected to interfere
with the Borrower satisfying any of its Obligations in full at such time as such
Obligations become due and payable pursuant to the terms hereof.
11.7. VALIDITY OF LIENS. The Security Documents shall be effective to
create in favor of the Administrative Agent a legal, valid and enforceable first
priority (subject to the Liens of the Term Loan Agent on the Fixed Asset
Collateral) perfected security interest in and Lien upon all material components
of the Collateral under applicable United States federal and state law. All
filings, recordings, deliveries of instruments and other actions necessary or
desirable in the opinion of the Administrative Agent to protect and preserve
such security interests shall have been duly effected. The Administrative Agent
shall have received evidence thereof in form and substance satisfactory to the
Administrative Agent.
11.8. FINANCIAL COVENANTS. There is no reasonable expectation that the
Parent and the Borrower were not in compliance with all covenants contained in
Article 9 at the end of their immediately preceding Fiscal Quarter if they have
not yet delivered their Compliance Certificate for that Fiscal Quarter (it being
understood that this ss.11.8 shall not impair the measurement of such covenants
as of such Fiscal Quarter end date).
12. EVENTS OF DEFAULT; ACCELERATION; ETC.
12.1. EVENTS OF DEFAULT AND ACCELERATION. If any of the following
events ("Events of Default" or, if the giving of notice or the lapse of time or
both is required, then, prior to such notice or lapse of time, "Defaults") shall
occur:
(a) the Borrower shall fail to pay any principal of the Loans
or any Reimbursement Obligation when the same shall become due and
payable, whether at the stated date of maturity or any accelerated date
of maturity or at any other date fixed for payment;
(b) the Parent, the Borrower or any of their Subsidiaries
shall fail to pay any interest on the Loans, the Fees, or other sums
due hereunder or under any of the other Loan Documents, when the same
shall become due and payable, whether at the stated date of maturity or
any accelerated date of maturity or at any other date fixed for payment
and such failure shall continue for three (3) days after written notice
of such failure has been given to the Parent and the Borrower by the
Administrative Agent;
(c) either the Parent or the Borrower shall fail to comply
with any of its covenants contained in ss.ss.7.1 7.2, 7.4, 7.5,
7.6(a)(i), 7.6(b)(iii), 7.7, 7.10, 7.11, 7.12, 7.13, 7.14, 7.15, 7.16,
7.17, 7.18, 7.20, Article 8 or Article 9 of this Credit Agreement or
any of the covenants contained in any of the Mortgages;
(d) the Parent or any of its Subsidiaries shall fail to
perform any term, covenant or agreement contained herein or in any of
the other Loan Documents (other than those specified elsewhere in this
ss.12.1) for thirty (30) days after written notice of such failure has
been given to the Parent and the Borrower by the Administrative Agent;
(e) any representation or warranty of the Parent or any of its
Subsidiaries in this Credit Agreement or any of the other Loan
Documents or in any other document or instrument delivered pursuant to
or in connection with this Credit Agreement shall prove to have been
false in any material respect upon the date when made or deemed to have
been made or repeated;
(f) the Parent or any of its Subsidiaries shall make an
assignment for the benefit of creditors, or admit in writing its
inability to pay or generally fail to pay its debts as they mature or
become due, or shall petition or apply for the appointment of a trustee
or other custodian, liquidator or receiver of the Parent or any of its
Subsidiaries or of any substantial part of the assets of the Parent or
any of its Subsidiaries or shall commence any case or other proceeding
relating to the Parent or any of its Subsidiaries under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction, now or
hereafter in effect, or shall take any action to authorize or in
furtherance of any of the foregoing, or if any such petition or
application (including bankruptcy application) shall be filed or any
such case or other proceeding shall be commenced against the Parent or
any of its Subsidiaries or the Parent or any of its Subsidiaries shall
indicate its approval thereof, consent thereto or acquiescence therein
or such petition or application shall not have been dismissed within
sixty (60) days following the filing thereof;
(g) a decree or order (including a bankruptcy order) is
entered appointing any such trustee, custodian, liquidator or receiver
or adjudicating the Parent or any of its Subsidiaries bankrupt or
insolvent, or approving a petition or bankruptcy application in any
such case or other proceeding, or a decree or order (including a
bankruptcy order) for relief is entered in respect of the Parent or any
Subsidiary of the Parent in an involuntary case under bankruptcy laws
as now or hereafter constituted;
(h) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty (30) days, whether or not consecutive,
any final judgment against the Parent and any of its Subsidiaries
(considered collectively) that, with other outstanding final judgments,
undischarged, against the Parent and its Subsidiaries (considered
collectively) exceeds in the aggregate $1,000,000;
(i) (A) the Parent, the Borrower or any ERISA Affiliate incurs
any liability to the PBGC or a Guaranteed Pension Plan pursuant to
Title IV of ERISA in an aggregate amount exceeding $1,000,000, or the
Parent, the Borrower or any ERISA Affiliate is assessed withdrawal
liability pursuant to Title IV of ERISA by a Multiemployer Plan
requiring aggregate annual payments exceeding $1,000,000, or any of the
following occurs with respect to a Guaranteed Pension Plan: (i) an
ERISA Reportable Event, or a failure to make a required installment or
other payment (within the meaning of ss.302(f)(1) of ERISA), PROVIDED
that the Administrative Agent determines in its reasonable discretion
that such event (A) could be expected to result in liability of the
Parent or any of its Subsidiaries to the PBGC or such Guaranteed
Pension Plan in an aggregate amount exceeding $1,000,000 and (B) could
constitute grounds for the termination of such Guaranteed Pension Plan
by the PBGC, for the appointment by the appropriate United States
District Court of a trustee to administer such Guaranteed Pension Plan
or for the imposition of a lien in favor of such Guaranteed Pension
Plan; or (ii) the appointment by a United States District Court of a
trustee to administer such Guaranteed Pension Plan; or (iii) the
institution by the PBGC of proceedings to terminate such Guaranteed
Pension Plan;
(j) the Parent or any of its Subsidiaries shall fail to pay at
maturity, or within any applicable period of grace, any obligation for
Indebtedness in excess of $500,000, or fail to observe or perform any
material term, covenant or agreement contained in any agreement by
which it is bound, evidencing or securing Indebtedness in excess of
$500,000 for such period of time as would permit (assuming the giving
of appropriate notice if required) the holder or holders thereof or of
any obligations issued thereunder to accelerate the maturity thereof;
(k) if any of the Loan Documents shall be cancelled,
terminated, revoked or rescinded or the Administrative Agent's security
interests, mortgages or liens in all or a substantial portion of the
Collateral shall cease to be perfected, or shall cease to have the
priority contemplated by the Security Documents and the Intercreditor
Agreement, in each case otherwise than in accordance with the terms
thereof or with the express prior written agreement, consent or
approval of the Lenders, or any action at law, suit or in equity or
other legal proceeding to cancel, revoke or rescind any of the Loan
Documents shall be commenced by or on behalf of the Parent, its
Subsidiaries, the Guarantors or any of their respective stockholders,
or any court or any other governmental or regulatory authority or
agency of competent jurisdiction shall make a determination that, or
issue a judgment, order, decree or ruling to the effect that, any one
or more of the Loan Documents is illegal, invalid or unenforceable in
accordance with the terms thereof;
(l) if any material covenant, agreement or obligation of the
Parent or the Borrower contained in or evidenced by the Loan Documents
shall cease to be legal, valid, binding, or enforceable in accordance
with the terms thereof other than as a result of a default or waiver
thereof by the Administrative Agent;
(m) a Change of Control shall occur;
(n) there shall occur any material damage to, or loss, theft
or destruction of, any Collateral, whether or not insured, or any
strike, lockout, labor dispute, embargo, condemnation, expropriation,
act of God or public enemy, or other casualty, which in any such case
causes, for more than thirty (30) consecutive days, the cessation or
substantial curtailment of revenue producing activities at any facility
of the Parent or any of its Subsidiaries if such event or circumstance
is not covered by business interruption insurance and would have a
material adverse effect on the business, assets, operation or financial
condition of the Borrower and the Guarantors (taken as a whole), or the
ability of the Parent or any Subsidiary of the Parent to fulfill its
obligations under this Credit Agreement or the other Loan Documents;
(o) the Parent or any of its Subsidiaries shall be enjoined,
restrained or in any way prevented by the order of any Governmental
Authority from conducting any part of their business and such order
shall continue in effect for more than thirty (30) days unless such
order would not have a material adverse effect on the business, assets,
operation or financial condition of the Borrower and the Guarantors
(taken as a whole), or the ability of the Parent or any Subsidiary of
the Parent to fulfill its obligations under this Credit Agreement or
the other Loan Documents;
(p) there shall occur the loss, suspension or revocation of,
or failure to renew, any license or permit now held or hereafter
acquired by the Parent or any of its Subsidiaries if such loss,
suspension, revocation or failure to renew would have a material
adverse effect on the business, assets, operation or financial
condition of the Borrower and the Guarantors (taken as a whole), or the
ability of the Parent or any Subsidiary of the Parent to fulfill its
obligations under this Credit Agreement or the other Loan Documents;
(q) any "event of default" under the Term Loan Agreement shall
occur and be continuing; or
(r) the subordination provisions in the Intercreditor
Agreement relative to the liens of the Term Loan Agent in the
Collateral (other than the Fixed Asset Collateral) shall cease, in
whole or in part, to be effective or cease to be legally valid, binding
and enforceable against the Term Loan Agent and the holders of the Term
Loans,
then, and in any such event, so long as the same may be continuing, the
Administrative Agent may, and upon the request of the Required Lenders shall, by
notice in writing to the Borrower, declare all amounts owing with respect to
this Credit Agreement and the other Loan Documents and all Reimbursement
Obligations to be, and they shall thereupon forthwith become, immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by each of the Parent and the Borrower;
provided that in the event of any Event of Default specified in ss.ss.12.1(f) or
12.1(g), all such amounts shall becOme immediately due and payable automatically
and without any requirement of notice from the Administrative Agent or any
Lender.
12.2. TERMINATION OF COMMITMENTS. If any one or more of the Events of
Default specified in ss.12.1(f) or ss.12.1(g) shall occur, Any unused portion of
the credit hereunder shall forthwith terminate and each of the Lenders shall be
relieved of all further obligations to make Loans to the Borrower, and the
Administrative Agent shall be relieved of all further obligations to cause the
Issuing Bank to issue, extend or renew Letters of Credit for the accounts of the
Borrower. If any other Event of Default shall have occurred and be continuing,
the Administrative Agent may and, upon the request of the Required Lenders,
shall, by notice to the Borrower, terminate the unused portion of the credit
hereunder, and upon such notice being given such unused portion of the credit
hereunder shall terminate immediately and each of the Lenders shall be relieved
of all further obligations to make Loans to the Borrower and the Administrative
Agent shall be relieved of all further obligations to cause the Issuing Bank to
issue, extend or renew Letters of Credit for the accounts of the Borrower. No
termination of the credit hereunder shall relieve the Parent or any of its
Subsidiaries of any of the Obligations. No termination of the credit hereunder
shall relieve the Lenders of their obligation to fund their participations in
the Letters of Credit as otherwise set out in this Credit Agreement.
12.3. REMEDIES. In case any one or more of the Events of Default shall
have occurred and be continuing, and whether or not the Lenders shall have
accelerated the maturity of the Loans pursuant to ss.12.1, each Lender, if owed
any amount with respect to the LoanS or the Reimbursement Obligations, may, with
the consent of the Required Lenders but not otherwise, proceed to protect and
enforce its rights by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Credit Agreement and the other Loan Documents or any
instrument pursuant to which the Obligations to such Lender are evidenced,
including as permitted by applicable law the obtaining of the ex parte
appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Lender. No remedy herein conferred upon any
Lender or the Administrative Agent or the purchaser of any Letter of Credit is
intended to be exclusive of any other remedy and each and every remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity or by statute or any other provision
of law.
12.4. DISTRIBUTION OF COLLATERAL PROCEEDS. In the event that, following
the occurrence or during the continuance of any Event of Default, the
Administrative Agent or any Lender, as the case may be, receives any monies in
connection with the enforcement of any of the Security Documents, or otherwise
with respect to the realization upon any of the Collateral, such monies shall,
subject to the Intercreditor Agreement, be distributed for application as
follows:
(a) FIRST, to the payment of, or (as the case may be) the
reimbursement of the Administrative Agent and the Issuing Bank for or
in respect of all amounts in respect of Administrative Agent Advances
and all fees, indemnities, costs, expenses, disbursements and other
amounts (including charges and disbursements of counsel to the
Administrative Agent and the Issuing Bank) and losses payable to the
Administrative Agent and the Issuing Bank or incurred or sustained by
the Administrative Agent and the Issuing Bank in their capacity as
such, including, without limitation, in connection with the collection
of such monies by the Administrative Agent and the Issuing Bank, for
the exercise, protection or enforcement by the Administrative Agent and
the Issuing Bank of all or any of the rights, remedies, powers and
privileges of the Administrative Agent and the Issuing Bank under this
Credit Agreement or any of the other Loan Documents or in respect of
the Collateral or in support of any provision of adequate indemnity to
the Administrative Agent and the Issuing Bank against any Taxes or
liens which by law shall have, or may have, priority over the rights of
the Administrative Agent and the Issuing Bank to such monies;
(b) SECOND, to the payment of that portion of the Obligations
constituting fees, indemnities, costs, expenses, disbursements and
other amounts (including charges and disbursements of counsel to the
Lenders but excluding principal, interest and Cash Management
Obligations) payable to the Lenders (including amounts payable under
ss.5.7), ratably among them in proportion tO the amounts described in
this clause SECOND payable to them;
(c) THIRD, to the payment of that portion of the Obligations
constituting accrued and unpaid interest on the Loans and other
Obligations, ratably among the Lenders in proportion to the respective
amounts described in this clause THIRD payable to them;
(d) FOURTH, ratably (a) to the payment of that portion of the
Obligations constituting unpaid principal of the Loans, ratably among
the Lenders in proportion to the respective amounts described in this
clause FOURTH payable to them and (b) to the Administrative Agent for
the account of the Issuing bank, to cash collateralize the
Reimbursement Obligations;
(e) FIFTH, to all Cash Management Obligations owing to any
Lender, the Administrative Agent, the Cash Management Bank or any
Affiliate thereof, ratably among such Persons;
(f) SIXTH, to all other Obligations in such order or
preference as the Required Lenders may determine; provided, however,
that (i) distributions shall be made with respect to each type of
Obligation owing to the Lenders among the Lenders pro rata, and (ii)
the Administrative Agent may in its discretion make proper allowance to
take into account any Obligations not then due and payable;
(g) SEVENTH, upon payment and satisfaction in full or other
provisions for payment in full satisfactory to the Lenders and the
Administrative Agent of all of the Obligations, to the payment of any
obligations required to be paid pursuant to ss.9-608(a)(1)(C) or 9
615(a)(3) of the Uniform Commercial Code of the Commonwealth of
Massachusetts; and
(h) EIGHTH, the excess, if any, shall be returned to the
Borrower or to such other Persons as are entitled thereto.
13. SETOFF.
Regardless of the adequacy of any collateral, if any Event of Default
shall have occurred and be continuing, any deposits or other sums credited by or
due from any of the Lenders to the Borrower or any of the Guarantors and any
securities or other property of the Borrower or any of the Guarantors in the
possession of such Lender or any of its Affiliates may, at any time, without
demand or notice (any such notice being expressly waived by the Borrower and the
Guarantors), in whole or in part, be applied to or set off by such Lender
against the payment of Obligations and any and all other liabilities or
obligations, direct, or indirect, absolute or contingent, due or to become due,
now existing or hereafter arising, of the Borrower or any of the Guarantors to
such Lender regardless of the adequacy of any other collateral securing the
Loan. Each of the Lenders agrees with each other Lender that (i) if an amount to
be set off is to be applied to Indebtedness of the Borrower or any of the
Guarantors to such Lender, such amount shall be applied ratably to such other
Indebtedness and to the Indebtedness evidenced by the Notes of such Lender or
constituting Reimbursement Obligations owed to such Lender, and (ii) if such
Lender shall receive from the Borrower or any Guarantor or any other source,
whether by voluntary payment, exercise of the right of setoff, counterclaim,
cross action, enforcement of the claim evidenced by the Notes in the name of, or
constituting Reimbursement Obligations, such Lender by proceedings against the
Borrower at law or in equity or by proof thereof in bankruptcy, reorganization,
liquidation, receivership or similar proceedings, or otherwise, and shall retain
and apply to the payment of its Notes, or the Reimbursement Obligations owed to
such Lender any amount in excess of its ratable portion of the payments received
by all of the Lenders with respect to the debt evidenced by the Notes
corresponding to, and Reimbursement Obligations owed to, all of the Lenders,
such Lender will make such disposition and arrangements with the other Lenders
with respect to such excess, either by way of distribution, pro tanto assignment
of claims, subrogation or otherwise as shall result in each Lender receiving in
respect of the debt evidenced by the Notes in its name or Reimbursement
Obligations owed it, its proportionate payment as contemplated by this Credit
Agreement; provided that if all or any part of such excess payment is thereafter
recovered from such Lender, such disposition and arrangements shall be rescinded
and the amount restored to the extent of such recovery, but without interest.
ANY AND ALL RIGHTS TO REQUIRE ANY LENDER TO EXERCISE ITS RIGHTS OR REMEDIES WITH
RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO
EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER
PROPERTY OF THE BORROWER OR ANY GUARANTOR ARE HEREBY KNOWINGLY, VOLUNTARILY AND
IRREVOCABLY WAIVED.
14. THE ADMINISTRATIVE AGENT.
14.1. AUTHORIZATION.
(a) The Administrative Agent is authorized to take such action
on behalf of each of the Lenders and to exercise all such powers as are
hereunder and under any of the other Loan Documents and any related
documents delegated to the Administrative Agent, together with such
powers as are reasonably incident thereto, including the authority,
without the necessity of any notice to or further consent of the
Lenders, from time to time to take any action with respect to any
Collateral or the Security Documents which may be necessary to perfect,
maintain perfected or insure the priority of the security interest in
and liens upon the Collateral granted pursuant to the Security
Documents, and, PROVIDED that no duties or responsibilities not
expressly assumed herein or therein shall be implied to have been
assumed by the Administrative Agent.
(b) The relationship between the Administrative Agent and each
of the Lenders is that of an independent contractor. The use of the
term "Administrative Agent" is for convenience only and is used to
describe, as a form of convention, the independent contractual
relationship between the Administrative Agent and each of the Lenders.
Nothing contained in this Credit Agreement nor the other Loan Documents
shall be construed to create an agency, trust or other fiduciary
relationship between the Administrative Agent and any of the Lenders.
(c) As an independent contractor empowered by the Lenders to
exercise certain rights and perform certain duties and responsibilities
hereunder and under the other Loan Documents, the Administrative Agent
is nevertheless a "REPRESENTATIVE" of the Lenders, as that term is
defined in Article 1 of the Uniform Commercial Code, for purposes of
actions for the benefit of the Lenders and the Administrative Agent
with respect to all collateral security and guaranties contemplated by
the Loan Documents. Such actions include the designation of the
Administrative Agent as "SECURED PARTY", "MORTGAGEE" or the like on all
financing statements and other documents and instruments, whether
recorded or otherwise, relating to the attachment, perfection, priority
or enforcement of any security interests, mortgages or deeds of trust
in collateral security intended to secure the payment or performance of
any of the Obligations, all for the benefit of the Lenders and the
Administrative Agent.
(d) The Administrative Agent is authorized and directed to
consent to any sale or other disposition of Collateral permitted to be
sold or disposed of hereunder, and to release its liens on such
Collateral, and the Administrative Agent is authorized to rely on a
certification from the Borrower that such sale or disposition is
permitted hereunder.
(e) The Administrative Agent is authorized and directed to
execute and deliver the Intercreditor Agreement and any mortgage and
leasehold mortgage subordination agreements in favor of the Term Loan
Agent on behalf of the Lenders and to act in accordance with the
provisions thereof. Each of the Lenders agrees to be bound by the
provisions thereof.
14.2. EMPLOYEES AND ADMINISTRATIVE AGENTS. The Administrative Agent may
exercise its powers and execute its duties by or through employees or agents and
shall be entitled to take, and to rely on, advice of counsel concerning all
matters pertaining to its rights and duties under this Credit Agreement and the
other Loan Documents. The Administrative Agent may utilize the services of such
Persons as the Administrative Agent in its sole discretion may reasonably
determine, and all reasonable fees and expenses of any such Persons shall be
paid by the Borrower.
14.3. NO LIABILITY. Neither the Administrative Agent (in its capacity
as Administrative Agent, lender of the swing line loans and/or Cash Management
Bank) nor any of its shareholders, directors, officers or employees nor any
other Person assisting them in their duties nor any agent or employee thereof,
shall be liable to any Lender for any waiver, consent or approval given or any
action taken, or omitted to be taken, in good faith by it or them hereunder or
under any of the other Loan Documents, or in connection herewith or therewith,
or be responsible for the consequences of any oversight or error of judgment
whatsoever, except that the Administrative Agent or such other Person, as the
case may be, may be liable for losses due to its willful misconduct or gross
negligence.
14.4. NO REPRESENTATIONS.
14.4.1. GENERAL. The Administrative Agent shall not be
responsible for the execution or validity or enforceability of this
Credit Agreement, the Letters of Credit, any of the other Loan
Documents or any instrument at any time constituting, or intended to
constitute, collateral security for any of the Loan Documents, or for
the value of any such collateral security or for the validity,
enforceability, or collectibility of any such amounts owing with
respect to any of the Loan Documents, or for any recitals or
statements, warranties or representations made herein or in any of the
other Loan Documents or in any certificate or instrument hereafter
furnished to it by or on behalf of the Parent or any of its
Subsidiaries, or be bound to ascertain or inquire as to the performance
or observance of any of the terms, conditions, covenants or agreements
herein or in any instrument at any time constituting, or intended to
constitute, collateral security for any of the Loan Documents or to
inspect any of the properties, books or records of the Parent or any of
its Subsidiaries. The Administrative Agent shall not be bound to
ascertain whether any notice, consent, waiver or request delivered to
it by the Parent or the Borrower shall have been duly authorized or is
true, accurate and complete. The Administrative Agent has not made nor
does it now make any representations or warranties, express or implied,
nor does it assume any liability to the Lenders, with respect to the
credit worthiness or financial conditions of the Parent or any of its
Subsidiaries. Each Lender acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and
based upon such information and documents as it has deemed appropriate,
made its own credit analysis and decision to enter into this Credit
Agreement.
14.4.2. CLOSING DOCUMENTATION, ETC. For purposes of
determining compliance with the conditions set forth in ss.10, each
Lender thaT has executed this Credit Agreement shall be deemed to have
consented to, approved or accepted, or to be satisfied with, each
document and matter either sent, or made available, by the
Administrative Agent to such Lender for consent, approval, acceptance
or satisfaction, or required thereunder to be to be consent to or
approved by or acceptable or satisfactory to such Lender, unless an
officer of the Administrative Agent active upon the Borrower's account
shall have received notice from such Lender not less than one (1)
Business Day prior to the Closing Date specifying such Lender's
objection thereto and such objection shall not have been withdrawn by
notice to the Administrative Agent to such effect on or prior to the
Closing Date.
14.5. PAYMENTS.
14.5.1. PAYMENTS TO ADMINISTRATIVE AGENT. A payment by the
Borrower to the Administrative Agent hereunder or under any of the
other Loan Documents for the account of any Lender shall constitute a
payment to such Lender. The Administrative Agent agrees promptly to
distribute to each Lender such Lender's pro rata share of payments
received by the Administrative Agent for the account of such Lender
except as otherwise expressly provided herein or in any of the other
Loan Documents.
14.5.2. DISTRIBUTION BY ADMINISTRATIVE AGENT. If in the
opinion of the Administrative Agent the distribution of any amount
received by it in such capacity hereunder or under any of the other
Loan Documents might involve it in liability, it may refrain from
making distribution until its right to make distribution shall have
been adjudicated by a court of competent jurisdiction. If a court of
competent jurisdiction shall adjudge that any amount received and
distributed by the Administrative Agent is to be repaid, each Person to
whom any such distribution shall have been made shall either repay to
the Administrative Agent its proportionate share of the amount so
adjudged to be repaid or shall pay over the same in such manner and to
such Persons as shall be determined by such court.
14.5.3. DELINQUENT LENDERS. Notwithstanding anything to the
contrary contained in this Credit Agreement or any of the other Loan
Documents, any Lender that fails (i) to make available to the
Administrative Agent its PRO RATA share of any Loan or to purchase any
Letter of Credit Participation in accordance with the terms of this
Credit Agreement or (ii) to comply with the provisions of ss.13 with
respect to making dispositions and arrangements with the other Lenders,
where such Lender's share oF any payment received, whether by setoff or
otherwise, is in excess of its pro rata share of such payments due and
payable to all of the Lenders, in each case as, when and to the full
extent required by the provisions of this Credit Agreement, shall be
deemed delinquent (a "Delinquent Lender") and shall be deemed a
Delinquent Lender until such time as such delinquency is satisfied. A
Delinquent Lender shall be deemed to have assigned any and all payments
due to it from the Borrower, whether on account of outstanding Loans,
Unpaid Reimbursement Obligations, interest, fees or otherwise, to the
remaining applicable non-delinquent Lenders for application to, and
reduction of, their respective pro rata shares of all outstanding Loans
and Unpaid Reimbursement Obligations. The Delinquent Lender hereby
authorizes the Administrative Agent to distribute such payments to the
applicable non-delinquent Lenders in proportion to their respective pro
rata shares of all applicable outstanding Loans and Unpaid
Reimbursement Obligations. A Delinquent Lender shall be deemed to have
satisfied in full a delinquency when and if, as a result of application
of the assigned payments to all applicable outstanding Loans and Unpaid
Reimbursement Obligations of the non-delinquent Lenders, the Lenders'
respective PRO RATA shares of all outstanding Loans and Unpaid
Reimbursement Obligations have returned to those in effect immediately
prior to such delinquency and without giving effect to the nonpayment
causing such delinquency.
14.6. HOLDERS OF LETTERS OF CREDIT PARTICIPATION. The Administrative
Agent may deem and treat the purchaser of any Letter of Credit Participation as
the absolute owner or purchaser thereof for all purposes hereof until it shall
have been furnished in writing with a different name by such payee or by a
subsequent holder, assignee or transferee.
14.7. INDEMNITY. The Lenders ratably agree hereby to indemnify and hold
harmless the Administrative Agent and the Issuing Bank from and against any and
all claims, actions and suits (whether groundless or otherwise), losses,
damages, costs, expenses (including any expenses for which the Administrative
Agent and/or the Issuing Bank has not been reimbursed by the Borrower as
required by ss.15), and liabilities of every nature and character arising out of
or related to this Credit Agreement or any of the other Loan Documents or the
transactions contemplated or evidenced hereby or thereby, or the Administrative
Agent's and/or the Issuing Bank's actions taken hereunder or thereunder, except
to the extent that any of the same shall be directly caused by the
Administrative Agent's or the Issuing Bank's willful misconduct or gross
negligence.
14.8. ADMINISTRATIVE AGENT AS LENDER. In its individual capacity, Bank
of America shall have the same obligations and the same rights, powers and
privileges in respect to its Commitment and the Loans made by it and as the
purchaser of any Letter of Credit Participation as it would have were it not
also the Administrative Agent.
14.9. RESIGNATION. The Administrative Agent may resign at any time by
giving sixty (60) days prior written notice thereof to the Lenders and the
Borrower. Upon any such resignation, the Required Lenders shall have the right
to appoint a successor Administrative Agent. Unless a Default or Event of
Default shall have occurred and be continuing, such successor Administrative
Agent shall be reasonably acceptable to the Borrower. If no successor
Administrative Agent shall have been so appointed by the Required Lenders and
shall have accepted such appointment within thirty (30) days after the retiring
Administrative Agent's giving of notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be a financial institution having a rating of
not less than A or its equivalent by Standard & Poor's Corporation. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations hereunder. After any
retiring Administrative Agent's resignation, the provisions of this Credit
Agreement and the other Loan Documents shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as Administrative Agent.
14.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. Each Lender
hereby agrees that, upon learning of the existence of a Default or Event of
Default, it shall promptly notify the Administrative Agent thereof. The
Administrative Agent hereby agrees that upon receipt of any notice under this
ss.14.10 it shall promptly notify the other Lenders of the existence of such
Default or Event oF Default.
14.11. DUTIES IN THE CASE OF ENFORCEMENT. Subject to the terms of the
Intercreditor Agreement, in case one or more Events of Default have occurred and
shall be continuing, and whether or not acceleration of the Obligations shall
have occurred, the Administrative Agent shall, if (a) so requested by the
Required Lenders and (b) the Lenders have provided to the Administrative Agent
such additional indemnities and assurances against expenses and liabilities as
the Administrative Agent may reasonably request, proceed to enforce the
provisions of the Security Documents authorizing the sale or other disposition
of all or any part of the Collateral and exercise all or any such other legal
and equitable and other rights or remedies as it may have in respect of such
Collateral. The Required Lenders may direct the Administrative Agent in writing
as to the method and the extent of any such sale or other disposition, the
Lenders hereby agreeing to indemnify and hold the Administrative Agent, harmless
from all liabilities incurred in respect of all actions taken or omitted in
accordance with such directions, PROVIDED that the Administrative Agent need not
comply with any such direction to the extent that the Administrative Agent
reasonably believes the Administrative Agent's compliance with such direction to
be unlawful or commercially unreasonable in any applicable jurisdiction.
14.12. ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM.
(a) In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial, administrative or like proceeding or any
assignment for the benefit of creditors relative to the Parent or any
of its Subsidiaries, the Administrative Agent (irrespective of whether
the principal of any Loan, Reimbursement Obligation or Unpaid
Reimbursement Obligation shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether
the Administrative Agent shall have made any demand on the Borrower)
shall be entitled and empowered, by intervention in such proceeding,
under any such assignment or otherwise:
(i) to file and prove a claim for the whole amount of
the principal and interest owing and unpaid in respect of the
Loans, Reimbursement Obligations or Unpaid Reimbursement
Obligations and all other Obligations that are owing and
unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Lenders and the
Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the
Lenders and the Administrative Agent and their respective
agents and counsel and all other amounts due the Lenders and
the Administrative Agent under ss.ss.2.2, 4.6, 5.1 and 15)
allowed in such proceeding or under any sUch assignment; and
(ii) subject to the Intercreditor Agreement, to
collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
(b) Any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such proceeding or under
any such assignment is hereby authorized by each Lender to make such
payments to the Administrative Agent and, in the event that the
Administrative Agent shall consent to the making of such payments
directly to the Lenders, nevertheless to pay to the Administrative
Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Administrative Agent and its agents
and counsel, and any other amounts due the Administrative Agent under
ss.ss.2.2, 4.6, 5.1 and 15).
(c) Nothing contained herein shall authorize the
Administrative Agent to consent to or accept or adopt on behalf of any
Lender any plan of reorganization, arrangement, adjustment or
composition affecting the Obligations owed to such Lender or the rights
of any Lender or to authorize the Administrative Agent to vote in
respect of the claim of any Lender in any such proceeding or under any
such assignment.
15. EXPENSES.
The Borrower agrees to pay (i) the reasonable costs of producing and
reproducing this Credit Agreement, the other Loan Documents and the other
agreements and instruments mentioned herein, (ii) without duplication of any
amounts paid by the Borrower pursuant to ss.5.2.2, any Taxes (including any
interest and penalties in respect thereto) payable by the Administrative Agent,
thE Issuing Bank, the Cash Management Bank or any of the Lenders (other than
Excluded Taxes) on or with respect to the transactions contemplated by this
Credit Agreement (the Borrower hereby agreeing to indemnify the Administrative
Agent, the Issuing Bank, the Cash Management Bank and each Lender with respect
thereto), (iii) the reasonable fees, expenses and disbursements of the
Administrative Agent's Special Counsel or any local counsel to the
Administrative Agent incurred in connection with the preparation, administration
or interpretation of the Loan Documents and other instruments mentioned herein,
each closing hereunder, amendments, modifications, approvals, consents or
waivers hereto or hereunder, and proposed amendments, modifications, approvals,
consents or waivers hereto or hereunder, (iv) the reasonable fees, expenses and
disbursements of the Administrative Agent incurred by the Administrative Agent
in connection with the preparation and syndication of the Loan Documents and
other instruments mentioned herein, including, without limitation, collateral
examination, appraisal expenses and environmental audits, (v) the reasonable
fees, expenses and disbursements of the Administrative Agent incurred by the
Administrative Agent in connection with the administration or interpretation of
the Loan Documents and other instruments mentioned herein, including, without
limitation, collateral examination, appraisal expenses and environmental audits,
inspections, testing and reports, (vi) all reasonable out-of-pocket expenses
(including without limitation reasonable attorneys' fees and costs and
reasonable consulting, accounting, appraisal, investment banking and similar
professional fees and charges) incurred by the Issuing Bank, the Cash Management
Bank, the Administrative Agent or any Lender in connection with (A) the
enforcement of or preservation of rights under any of the Loan Documents against
any of the Guarantors, the Borrower or any of its Subsidiaries or the
administration thereof after the occurrence of a Default or Event of Default,
and (B) any litigation, proceeding or dispute whether arising hereunder or
otherwise, in any way related to any Lender's, the Issuing Bank's, the Cash
Management Bank's or the Administrative Agent's relationship with any the Parent
or any of its Subsidiaries, unless such Lender, the Issuing Bank, the Cash
Management Bank or the Administrative Agent, as applicable, is conclusively
determined to have breached its obligations hereunder, (vii) any fees, costs,
expenses and bank charges, including bank charges for returned checks, incurred
by the Administrative Agent, the Issuing Bank, the Cash Management Bank or any
of their Affiliates in establishing, maintaining or handling of any accounts for
the collection of any of the Collateral, (viii) all reasonable fees, expenses
and disbursements of the Issuing Bank, the Cash Management Bank or the
Administrative Agent incurred in connection with UCC searches, UCC filings,
intellectual property searches, intellectual property filings, mortgage
recordings and other personal and real property searches and filings and (ix)
all title insurance premiums and surveyor, engineering, appraisal and
examination charges. The Borrower and each of the Guarantors authorizes the
Administrative Agent, the Issuing Bank, the Cash Management Bank and the Lenders
to debit any account maintained by such Persons with the Administrative Agent,
the Issuing Bank, the Cash Management Bank, the Lenders, or any of their
Affiliates, in payment of amounts due hereunder. The covenants of this ss.15
shall survive payment or satisfaction of all otheR Obligations.
16. INDEMNIFICATION.
The Borrower agrees to indemnify and hold harmless the Administrative
Agent, the Issuing Bank, the Arranger, the Cash Management Bank and the Lenders,
together with each of their Affiliates and their officers, directors, employees,
agents, attorneys and advisors, from and against any and all claims, actions and
suits whether groundless or otherwise, and from and against any and all
liabilities, losses, damages and expenses of every nature and character arising
out of this Credit Agreement or any of the other Loan Documents or the
transactions contemplated hereby including, without limitation, (i) any actual
or proposed use by the Borrower or any of its Subsidiaries of the proceeds of
any of the Loans or Letters of Credit, (ii) the reversal or withdrawal of any
provisional credits granted by the Administrative Agent, the Issuing Bank, the
Arranger, the Cash Management Bank or any of their Affiliates upon the transfer
of funds from bank agency or lock box accounts or in connection with the
provisional honoring of checks or other items, (iii) the Parent or any of its
Subsidiaries entering into or performing this Credit Agreement or any of the
other Loan Documents, (iv) any actual or alleged infringement of any patent,
copyright, trademark, service xxxx or similar right of the Parent or any of its
Subsidiaries comprised in the Collateral, or (v) with respect to the Parent and
its Subsidiaries and their respective properties and assets, the violation of
any environmental law, the presence, disposal, escape, seepage, leakage,
spillage, discharge, emission, release or threatened release of any Hazardous
Substances or any action, suit, proceeding or investigation brought or
threatened with respect to any Hazardous Substances (including, but not limited
to, claims with respect to wrongful death, personal injury or damage to
property), in each case including, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding, PROVIDED, HOWEVER, that the Borrower shall not
be liable to the Administrative Agent, the Arranger the Issuing Bank, the Cash
Management Bank, any Lender, any of their Affiliates or any of their officers,
directors, employees, agents and advisors for any of the foregoing to the extent
that they arise from such Person's gross negligence, breach of contract or
willful misconduct. In litigation, or the preparation therefor, the Lenders, the
Issuing Bank, the Arranger, the Cash Management Bank and the Administrative
Agent shall be entitled to select their own counsel and, in addition to the
foregoing indemnity, the Borrower agrees to pay promptly the reasonable fees and
expenses of such counsel. If, and to the extent that the obligations of the
Borrower under this ss.16 are unenforceable for any reason, the Borrower hereby
agrees tO make the maximum contribution to the payment in satisfaction of such
obligations which is permissible under applicable law. The covenants contained
in this ss.16 shall survive payment or satisfaction in full of all other
Obligations. Each of the AdministrativE Agent, the Issuing Bank, the Arranger,
the Cash Management Bank and the Lenders agree to promptly notify the Borrower
of any such claim, action, suit, liability, loss, damage or expense after
becoming aware of the same; PROVIDED that the failure to provide such notice
shall not affect the Borrower's obligations under this Article 16.
17. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein,
in any of the other Loan Documents or in any documents or other papers delivered
by or on behalf of the Parent or any of its Subsidiaries pursuant hereto shall
be deemed to have been relied upon by the Lenders and the Administrative Agent,
notwithstanding any investigation heretofore or hereafter made by any of them,
and shall survive the making by the Lenders of any of the Loans and the
issuance, extension or renewal of any Letters of Credit, as herein contemplated,
and shall continue in full force and effect so long as any Letter of Credit or
any amount due under this Credit Agreement or any of the other Loan Documents
remains outstanding or any Lender has any obligation to make any Loans or the
Administrative Agent has any obligation to issue, extend or renew any Letter of
Credit, and for such further time as may be otherwise expressly specified in
this Credit Agreement. All statements contained in any certificate or other
paper delivered to any Lender or the Administrative Agent at any time by or on
behalf of the Parent or any of its Subsidiaries pursuant hereto or in connection
with the transactions contemplated hereby shall constitute representations and
warranties by the Parent or such Subsidiary hereunder.
18. ASSIGNMENT AND PARTICIPATION.
18.1. GENERAL CONDITIONS. The provisions of this Credit Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that neither the
Borrower nor the Parent may assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender and no
Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (a) to an Eligible Assignee in accordance with the provisions
of ss.18.2, (b) by way of participation in accordance with the provisions of
ss.18.4 or (c) by way of pledge or assignment of a security interest subject to
the restrictions of ss.18.6 (and any other attempted assignment or transfer by
any party hereto shall bE null and void). Nothing in this Credit Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
Participants to the extent provided in ss.18.4 and, to thE extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Credit Agreement or any of the other Loan Documents.
18.2. ASSIGNMENTS. Any Lender may at any time assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this
Credit Agreement (including all or a portion of its Commitment and the Loans at
the time owing to it); provided that:
(a) except in the cases of an assignment of the entire
remaining amount of the assigning Lender's Commitment and the Loans at
the time owing to it or of an assignment to a Lender or a Lender
Affiliate, the aggregate amount of the Commitment (which for this
purpose includes Loans outstanding thereunder) or, if the applicable
Commitment is not then in effect, the principal outstanding balance of
the Loan of the assigning Lender subject to each such assignment
(determined as of the date on which the Assignment and Acceptance with
respect to such assignment is delivered to the Administrative Agent)
shall not be less than $10,000,000 unless each of the Administrative
Agent and, so long as no Default or Event of Default has occurred and
is continuing, the Borrower otherwise consents (each such consent not
to be unreasonably withheld or delayed);
(b) each partial assignment shall be made as an assignment of
a proportionate part of all the assigning Lender's rights and
obligations under this Credit Agreement with respect to the Loan or the
Commitment assigned, it being understood that NON-PRO RATA assignments
of or among any of the Commitments, the Revolving Loans and
Reimbursement Obligations are not permitted;
(c) any assignment of a Commitment must be approved by the
Administrative Agent and the Issuing Bank (whether or not the proposed
assignee is itself a Lender with a commitment or would otherwise
qualify as an Eligible Assignee); and
(d) the parties to each assignment shall execute and deliver
to the Administrative Agent an Assignment and Acceptance, together with
a processing and recordation fee of $3,500, and the Eligible Assignee,
if it shall not be a Lender, shall deliver to the Administrative Agent
an Administrative Questionnaire.
Subject to acceptance and recording thereof by the Administrative Agent
pursuant to ss.18.3, from and after the effective datE specified in each
Assignment and Acceptance, the Eligible Assignee thereunder shall be a party to
this Credit Agreement and, to the extent of the interest assigned by such
Assignment and Acceptance have the rights and obligations of a Lender under this
Credit Agreement, and the assigning Lender thereunder shall, to the extent of
the interest assigned by such Assignment and Acceptance, be released from its
obligations under this Credit Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Credit Agreement, such Lender shall cease to be a party hereto) but shall
continue to be entitled to the benefits of (i) ss.ss.5.2.2, 5.7, 5.8, and 5.10
with respect to facts and circumstances occurring prior to the effective date of
such assignment and (ii) ss.16 notwithstanding such assignment. Any assignment
or transfer by a Lender oF rights or obligations under this Credit Agreement
that does not comply with this paragraph shall be treated for purposes of this
Credit Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with ss.18.4.
18.3. REGISTER. The Administrative Agent, acting solely for this
purpose as an agent of the Borrower, shall maintain at the Administrative
Agent's Office a copy of each Assignment and Acceptance delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive, and the Borrower, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Credit Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.
18.4. PARTICIPATIONS. Any Lender may at any time, without the consent
of, or notice to, the Parent, the Borrower or the Administrative Agent, sell
participations to any Person (other than a natural person) (each, a
"Participant") in all or a portion of such Lender's rights and/or obligations
under this Credit Agreement (including all or a portion of its Commitment and/or
the Loans owing to it); PROVIDED that (a) such Lender's obligations under this
Credit Agreement shall remain unchanged, (b) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (c) the Parent, the Borrower, the Administrative Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Credit Agreement. Any agreement
or instrument pursuant to which a Lender sells such a participation shall
provide that such Lender shall retain the sole right to enforce this Credit
Agreement and to approve any amendment, modification or waiver of any provision
of this Credit Agreement; PROVIDED that such agreement or instrument may provide
that such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver that would reduce the principal of or the
interest rate on any Loans, extend the term or increase the amount of the
Commitment of such Lender as it relates to such Participant, reduce the amount
of any Commitment Fee or Letter of Credit Fees to which such Participant is
entitled or extend any regularly scheduled payment date for principal or
interest. Subject to ss.18.5, the Parent and the Borrower agree thaT each
Participant shall be entitled to the benefits of ss.ss.5.2.2, 5.7, 5.8 and 5.10
to the same extent as if it were a Lender and Had acquired its interest by
assignment pursuant to ss.18.2. To the extent permitted by law, each Participant
also shall be entitled tO the benefits of ss.13 as though it were a Lender,
provided such Participant agrees to be subject to ss.13 as though it were a
Lender.
18.5. PAYMENTS TO PARTICIPANTS. A Participant shall not be entitled to
receive any greater payment under ss.ss.5.2.2, 5.7 and 5.8 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant.
18.6. MISCELLANEOUS ASSIGNMENT PROVISIONS. A Lender may at any time
grant a security interest in all or any portion of its rights under this Credit
Agreement to secure obligations of such Lender, including without limitation (a)
any pledge or assignment to secure obligations to any of the twelve Federal
Reserve Banks organized under ss.4 of the Federal Reserve Act, 12 U.S.C. ss.341
and (b) wIth respect to any Lender that is a Fund, to any lender or any trustee
for, or any other representative of, holders of obligations owed or securities
issued by such Fund as security for such obligations or securities or any
institutional custodian for such Fund or for such lender; PROVIDED that no such
grant shall release such Lender from any of its obligations hereunder, provide
any voting rights hereunder to the secured party thereof, substitute any such
secured party for such Lender as a party hereto or affect any rights or
obligations of the Parent, the Borrower or the Administrative Agent hereunder.
18.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE PARENT. If any
assignee Lender is an Affiliate of the Parent, then any such assignee Lender
shall have no right to vote as a Lender hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to any of the Loan Documents or
for purposes of making requests to the Administrative Agent pursuant to ss.12.1
or ss.12.2, and the determination of the Required Lenders shall for All purposes
of this Credit Agreement and the other Loan Documents be made without regard to
such assignee Lender's interest in any of the Loans or Reimbursement
Obligations. If any Lender sells a participating interest in any of the Loans or
Reimbursement Obligations to a Participant, and such Participant is the Parent
or an Affiliate of the Parent, then such transferor Lender shall promptly notify
the Administrative Agent of the sale of such participation. A transferor Lender
shall have no right to vote as a Lender hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or modifications to any of the Loan Documents or for
purposes of making requests to the Administrative Agent pursuant to ss.12.1 or
ss.12.2 to the extent that such participation is beneficially owned by the
Parent or any Affiliate of the Parent, and The determination of the Required
Lenders shall for all purposes of this Credit Agreement and the other Loan
Documents be made without regard to the interest of such transferor Lender in
the Loans or Reimbursement Obligations to the extent of such participation.
18.8. NEW NOTES. Upon its receipt of an Assignment and Acceptance
executed by the parties to such assignment, together with each Note subject to
such assignment, the Administrative Agent shall (a) record the information
contained therein in the Register, and (b) give prompt notice thereof to the
Borrower and the Lenders (other than the assigning Lender). Within five (5)
Business Days after receipt of such notice, the Borrower, at its own expense,
shall, if applicable, execute and deliver to the Administrative Agent, in
exchange for each surrendered Note, a new Note to the order of such Assignee in
an amount equal to the amount assumed by such Assignee pursuant to such
Assignment and Acceptance and, if the assigning Lender has retained some portion
of its obligations hereunder, a new Note to the order of the assigning Lender in
an amount equal to the amount retained by it hereunder. Such new Notes shall
provide that they are replacements for the surrendered Notes, shall be in an
aggregate principal amount equal to the aggregate principal amount of the
surrendered Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of the assigned
Notes.
18.9. SPECIAL PURPOSE FUNDING VEHICLE. Notwithstanding anything to the
contrary contained in this ss.18, any Lender (a "GrantinG Lender") may grant to
a special purpose funding vehicle (an "SPC") of such Granting Lender, identified
as such in writing from time to time delivered by the Granting Lender to the
Administrative Agent and the Borrower, the option to provide to the Borrower all
or any part of any Loan that such Granting Lender would otherwise be obligated
to make to the Borrower pursuant to this Credit Agreement, PROVIDED that (a)
nothing herein shall constitute a commitment to make any Loan by any SPC, (b)
the Granting Bank's obligations under this Credit Agreement shall remain
unchanged, (c) the Granting Lender shall retain the sole right to enforce this
Credit Agreement and to approve any amendment, modification or waiver of any
provision of this Credit Agreement and (d) if an SPC elects not to exercise such
option or otherwise fails to provide all or any part of such Loan, the Granting
Lender shall be obligated to make such Loan pursuant to the terms hereof. The
making of a Loan by an SPC hereunder shall utilize the Commitment of the
Granting Lender to the same extent, and as if, such Loan were made by the
Granting Lender. Each party hereto hereby agrees that no SPC shall be liable for
any expense reimbursement, indemnity or similar payment obligation under this
Credit Agreement (all liability for which shall remain with the Granting
Lender). In furtherance of the foregoing, each party hereto hereby agrees (which
agreement shall survive the termination of this Credit Agreement) that, prior to
the date that is one year and one day after the later of (i) the payment in full
of all outstanding senior indebtedness of any SPC and (ii) the Maturity Date, it
will not institute against, or join any other person in instituting against,
such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or similar proceedings under the laws of the United States of
America or any State thereof. In addition, notwithstanding anything to the
contrary contained in this ss.18.9, any SPC may (A) with notice to, but (except
as specified below) without the prioR written consent of, the Parent, the
Borrower or the Administrative Agent and without paying any processing fee
therefor, assign all or a portion of its interests in any Loans to its Granting
Lender or to any financial institutions (consented to by the Administrative
Agent and, so long as no Default or Event of Default has occurred and is
continuing, the Borrower, which consents shall not be unreasonably withheld or
delayed) providing liquidity and/or credit facilities to or for the account of
such SPC to fund the Loans made by such SPC or to support the securities (if
any) issued by such SPC to fund such Loans and (B) disclose on a confidential
basis any non-public information relating to its Loans (other than financial
statements referred to in ss.ss.6.2 or 7.4) to any rating agency, commercial
paper dealer or provider of a surety, guarantee or credit or liquidity
enhancement to such SPC. In no event shall the Borrower be obligated to pay to
an SPC that has made a Loan any greater amount than the Borrower would have been
obligated to pay under this Credit Agreement if the Granting Lender had made
such Loan. An amendment to this ss.18.9 without thE written consent of an SPC
shall be ineffective insofar as it alters the rights and obligations of such
SPC.
19. NOTICES, ETC.
Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given pursuant to this
Credit Agreement or any Letter of Credit Applications shall be in writing and
shall be (i) delivered in hand, (ii) mailed by United States registered or
certified first class mail, postage prepaid, (iii) sent by overnight courier, or
(iv) sent by telegraph, telecopy, facsimile or telex and confirmed by delivery
via courier or postal service, addressed as follows:
(a) if to the Parent or the Borrower, at 000 Xxxxxxxx Xxxxxx,
Xxxx Xxxxx, XX 00000, Attention: Chief Financial Officer or at such
other U.S. address for notice as the Parent or the Borrower shall last
have furnished in writing to the Person giving the notice;
(b) if to the Administrative Agent, at Xxx Xxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, XXX, Attention: Xxxxxxx X'Xxxxx, or such
other address for notice as the Administrative Agent shall last have
furnished in writing to the Person giving the notice; and
(c) if to any Lender, at such Lender's address for its
Domestic Lending Office set forth on SCHEDULE 1 hereto, or such other
address for notice as such Lender shall have last furnished in writing
to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or made and to
have become effective (i) if delivered by hand, overnight courier or facsimile
to a responsible officer of the party to which it is directed, at the time of
the receipt thereof by such officer or the sending of such facsimile and (ii) if
sent by registered or certified first-class mail, postage prepaid, on the third
Business Day following the mailing thereof.
20. GOVERNING LAW.
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). EACH OF THE
PARENT AND THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE
COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS
TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY
SUCH SUIT BEING MADE UPON THE PARENT AND THE BORROWER BY MAIL AT THE ADDRESS
SPECIFIED IN SS.19. EACH OF THE PARENT AND THE BORROWER HEREBY WAIVES ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY
SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
21. HEADINGS.
The captions in this Credit Agreement are for convenience of reference
only and shall not define or limit the provisions hereof.
22. COUNTERPARTS.
This Credit Agreement and any amendment hereof may be executed in
several counterparts and by each party on a separate counterpart, each of which
when executed and delivered shall be an original, and all of which together
shall constitute one instrument. In proving this Credit Agreement it shall not
be necessary to produce or account for more than one such counterpart signed by
the party against whom enforcement is sought. Delivery by facsimile by any of
the parties hereto of an executed counterpart hereof or of any amendment or
waiver hereto shall be as effective as an original executed counterpart hereof
or of such amendment or waiver and shall be considered a representation that an
original executed counterpart hereof or such amendment or waiver, as the case
may be, will be delivered.
23. ENTIRE AGREEMENT, ETC.
The Loan Documents are intended by the parties as the final, complete
and exclusive statement of the transactions evidenced by the Loan Documents. All
prior or contemporaneous promises, agreements and understandings, whether oral
or written, are deemed to be superseded by the Loan Documents, and no party is
relying on any promise, agreement or understanding not set forth in the Loan
Documents.
24. WAIVER OF JURY TRIAL.
EACH PARTY HERETO MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR
CLAIM BASED HEREON ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS CREDIT
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS
HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS OR ANY
COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY, INCLUDING ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS OR ACTIONS OF THE ADMINISTRATIVE AGENT OR ANY LENDER RELATING TO THE
ADMINISTRATION OF THE LOANS OR ENFORCEMENT OF THE LOAN DOCUMENTS AND AGREES THAT
IT WILL NOT SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A
JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. Except as prohibited by law, each
party hereto hereby waives any right it may have to claim or recover in any
litigation referred to in the preceding sentence any special, exemplary,
punitive or consequential damages or any damages other than, or in addition to,
actual damages. Each of the Parent and the Borrower (i) certifies that no
representative, agent or attorney of any Lender or the Administrative Agent has
represented, expressly or otherwise, that such Lender or the Administrative
Agent would not, in the event of litigation, seek to enforce the foregoing
waivers and (ii) acknowledges that this waiver constitutes a material inducement
for the Administrative Agent and the Lenders to execute this Credit Agreement
and make the Loans.
25. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Any consent or approval required or permitted by this Credit Agreement
to be given by all of the Lenders may be given, and any term of this Credit
Agreement, the other Loan Documents or any other instrument related hereto or
mentioned herein may be amended, and the performance or observance by the Parent
or any of its Subsidiaries of any terms of this Credit Agreement, the other Loan
Documents or such other instrument or the continuance of any Default or Event of
Default may be waived (either generally or in a particular instance and either
retroactively or prospectively) with, but only with, the written consent of the
Required Lenders. Notwithstanding the foregoing, no amendment, modification or
waiver shall:
(a) without the written consent of the Parent, the Borrower
and each Lender directly affected thereby:
(i) reduce or forgive the principal amount of any
Loans or Reimbursement Obligations, or reduce the rate of
interest on the Loans or the amount of the Commitment Fees or
Letter of Credit Fees (other than interest accruing pursuant
to ss.5.11 following the effective date of any waiver by the
Required Lenders of the Event of Default relating thereto);
(ii) increase the amount of the Total Commitment or
any Lender's Commitment or extend the expiration date of the
Total Commitment or any Lender's Commitment;
(iii) postpone or extend the Maturity Date or any
other regularly scheduled dates for payments of principal of,
or interest on, the Loans or Reimbursement Obligations or any
fees or other amounts payable to such Lender or waive any
Event of Default relating thereto (it being understood that
(A) a waiver of the application of the Default Rate, (B) any
vote to rescind any acceleration made pursuant to ss.12.1 of
amounts owing with respect to the Loans and other ObligationS
and (C) any modifications of the provisions relating to
amounts or timing of prepayments of Loans and other
Obligations shall require only the approval of the Required
Lenders); or
(iv) release the Borrower from any Obligations
consisting of principal, interest, fees, reimbursement
obligations, expenses, or indemnities, release all or
substantially all of the Collateral or release all or
substantially all of the Guarantors from their guaranty
obligations under the Guaranties (excluding, if the Parent or
any Subsidiary of the Parent becomes a debtor under the
federal Bankruptcy Code, the release of "cash collateral", as
defined in Section 363(a) of the federal Bankruptcy Code
pursuant to a cash collateral stipulation with the debtor
approved by the Required Lenders);
(b) without the written consent of all of the Lenders, (i)
amend or waive this ss.25 or the definition of Required Lenders, (ii)
increase the advance rates set forth in the definition of the Borrowing
Base, (iii) amend the definition of Availability Reserve, Borrowing
Base, Eligible Accounts Receivable, Eligible Finished Goods Inventory,
Eligible Inventory, Eligible Raw Materials Inventory, Net Book Value or
Net Orderly Liquidation Value, in each case, in a manner which would
result in more credit being made available to the Borrower hereunder;
or (iv) amend or waive ss.12.4;
(c) without the written consent of the Administrative Agent,
amend or waive ss.2.6.2, ss.2.16, ss.4, ss.14, the amount or Time of
payment of the Administrative Agent's Fee or any Letter of Credit Fees
payable for the Administrative Agent's or the Issuing Bank's account or
any other provision applicable to the Administrative Agent or the
Issuing Bank;
(d) without the written consent of the Cash Management Bank,
amend or waive any provision applicable to the Cash Management Bank;
(e) without the written consent of the Issuing Bank, amend or
waive ss.4 or any other provision applicable to the Issuing Bank; or
(f) in the event of any change in the Person acting as the
Administrative Agent, the Issuing Bank or the Cash Management Bank
hereunder, without the written consent of the Person formerly acting as
Administrative Agent, Issuing Bank or Cash Management Bank, amend or
waive any provision of this Credit Agreement accruing to the benefit of
such Person in respect of all actions taken or omitted to be taken by
either of them prior to such change.
No waiver shall extend to or affect any obligation not expressly waived or
impair any right consequent thereon. No course of dealing or delay or omission
on the part of the Administrative Agent or any Lender in exercising any right
shall operate as a waiver thereof or otherwise be prejudicial thereto. No notice
to or demand upon the Parent or the Borrower shall entitle the Parent or the
Borrower to other or further notice or demand in similar or other circumstances.
26. SEVERABILITY.
The provisions of this Credit Agreement are severable and if any one
clause or provision hereof shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction, and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Credit Agreement in any jurisdiction. The
parties agree that they will negotiate in good faith to replace any provision
hereof so held invalid or unenforceable with a valid provision which is as
similar as possible to the invalid or unenforceable provision.
27. CONFIDENTIALITY.
Each of the Administrative Agent, the Lenders and the Issuing Bank
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its Affiliates and to its and
its Affiliates' respective partners, directors, officers, employees, agents,
advisors and representatives in connection with this Credit Agreement and the
transactions contemplated hereby (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority purporting to have jurisdiction
over it (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party hereto, (e) in connection with the exercise of any remedies
hereunder or under any other Loan Document or any action or proceeding relating
to this Agreement or any other Loan Document or the enforcement of rights
hereunder or thereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Article 27, to (i) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Credit Agreement or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction
relating to the Parent and its obligations or the Borrower and its obligations,
(g) with the consent of the Parent or (h) to the extent such Information (x)
becomes publicly available other than as a result of a breach of this Article 27
or (y) becomes available to the Administrative Agent, any Lender, the Issuing
Bank or any of their respective Affiliates on a nonconfidential basis from a
source other than the Borrower.
For purposes of this Section, "INFORMATION" means all information
received from the Parent or any Subsidiary of the Parent relating to the Parent
or any Subsidiary of the Parent or any of their respective businesses, other
than any such information that is available to the Administrative Agent, any
Lender or the Issuing Bank on a nonconfidential basis prior to disclosure by the
Parent or any Subsidiary of the Parent. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
Each of the Administrative Agent, the Lenders and the Issuing Bank
acknowledges that (a) the Information may include material non-public
information concerning the Parent or a Subsidiary of the Parent, as the case may
be, (b) it has developed compliance procedures regarding the use of material
non-public information and (c) it will handle such material non-public
information in accordance with applicable Law, including Federal and state
securities Laws. To the extent practicable and possible in compliance with
applicable law, regulation, proceeding or court order, each of the Lenders and
the Administrative Agent shall, prior to disclosure thereof, notify the Borrower
of any request for disclosure of any such non-public information by any
governmental agency or representative thereof (other than any such request in
connection with an examination of the financial condition of such Lender by such
governmental agency) or pursuant to legal process.
The Parent and the Borrower hereby acknowledge that (a) the
Administrative Agent will make available to the Lenders and the Issuing Bank
materials and/or information provided by or on behalf of the Parent and the
Borrower hereunder (collectively, "BORROWER MATERIALS") by posting the Borrower
Materials on IntraLinks or another similar electronic system (the "PLATFORM")
and (b) certain of the Lenders may be "public-side" Lenders (i.e., Lenders that
do not wish to receive material non-public information with respect to the
Parent, the Borrower or their securities) (each, a "PUBLIC LENDER"). The Parent
and the Borrower hereby agree that (w) all Borrower Materials that are to be
made available to Public Lenders shall be clearly and conspicuously marked
"PUBLIC" which, at a minimum, shall mean that the word "PUBLIC" shall appear
prominently on the first page thereof; (x) by marking Borrower Materials
"PUBLIC," the Parent and the Borrower shall be deemed to have authorized the
Administrative Agent, the Issuing Bank and the Lenders to treat such Borrower
Materials as not containing any material non-public information with respect to
the Parent, the Borrower or its securities for purposes of United States Federal
and state securities laws (PROVIDED, HOWEVER, that to the extent such Borrower
Materials constitute Information, they shall be treated as set forth in this
Article 27); (y) all Borrower Materials marked "PUBLIC" are permitted to be made
available through a portion of the Platform designated "Public Investor;" and
(z) the Administrative Agent shall be entitled to treat any Borrower Materials
that are not marked "PUBLIC" as being suitable only for posting on a portion of
the Platform not designated "Public Investor."
28. USA PATRIOT ACT.
Each Lender hereby notifies the Borrower that pursuant to the
requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the "ACT"), it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name
and address of the Borrower and other information that will allow such Lender to
identify the Borrower in accordance with the Act.
29. DESIGNATION OF PERMITTED LIENS.
The designation of a Lien as a Permitted Lien is not, and shall not be
deemed to be, an acknowledgment by the Administrative Agent or the Lenders to
any Person that the Lien shall have priority over any Lien of the Administrative
Agent granted in any Loan Document.
30. TRANSITIONAL ARRANGEMENTS
On the Closing Date, this Agreement shall supersede the Existing Credit
Agreement in its entirety. On the Closing Date, the rights and obligations of
the parties evidenced by the Existing Credit Agreement shall be evidenced by
this Credit Agreement and the other Loan Documents, and the Existing Letters of
Credit issued by any Issuing Bank for the account of the Borrower prior to the
Closing Date shall be converted into Letters of Credit under this Credit
Agreement.
All interest and fees and expenses, if any, owing or accruing under or
in respect of the Existing Credit Agreement through the Closing Date shall be
calculated as of the Closing Date (pro rated in the case of any fractional
periods), and shall be paid in full at the times that interest, fees and
expenses under this Credit Agreement are required to be paid pursuant to this
Credit Agreement. Commencing on the Closing Date, the Commitment Fee shall be
payable by the Borrower to the Administrative Agent for the account of the
Lenders in accordance with ss.2.2.
IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
QUAKER FABRIC CORPORATION OF FALL RIVER
QUAKER FABRIC CORPORATION
By: /s/ Xxxx X. Xxxxx
---------------------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President Finance
BANK OF AMERICA, N.A.,
individually and as Administrative Agent,
Issuing Bank and Cash Management Bank
By: /s/ Xxxxxxx X. X'Xxxxx
---------------------------------------------
Name: Xxxxxxx X. X'Xxxxx
Title: Senior Vice President
XXXXX FARGO FOOTHILL, LLC
By:
----------------------------------------
Name:
Title:
XXXXXXX XXXXX CAPITAL, A DIVISION OF
XXXXXXX XXXXX BUSINESS FINANCIAL
SERVICES INC.
By:
----------------------------------------
Name:
