Exhibit 10.8
EXECUTION COPY
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$25,000,000 CREDIT FACILITY
CREDIT AGREEMENT
DATED AS OF FEBRUARY 18, 2004
BY AND AMONG
WII COMPONENTS, INC.,
A Delaware corporation,
AS BORROWER,
ANTARES CAPITAL CORPORATION,
FOR ITSELF, AS A LENDER, AND AS AGENT FOR ALL LENDERS,
AND
THE FINANCIAL INSTITUTIONS PARTY HERETO,
AS LENDERS
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TABLE OF CONTENTS
PAGE
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ARTICLE I - THE CREDITS ................................................. 1
1.1 Amounts and Terms of Commitments ............................ 1
1.2 Notes ....................................................... 3
1.3 Interest .................................................... 3
1.4 Loan Accounts ............................................... 4
1.5 Procedure for Revolving Credit Borrowing .................... 4
1.6 Conversion and Continuation Elections ....................... 5
1.7 Optional Prepayments ........................................ 6
1.8 Mandatory Prepayments of Loans and Commitment Reductions .... 6
1.9 Fees ........................................................ 8
1.10 Payments by the Borrower .................................... 9
1.11 Payments by the Lenders to the Agent; Settlement ............ 10
ARTICLE II - CONDITIONS PRECEDENT ........................................ 11
2.1 Conditions of Initial Loans ................................. 11
2.2 Conditions to All Borrowings ................................ 15
2.3 Conditions to Certain Loans and Acquisitions ................ 16
ARTICLE III - REPRESENTATIONS AND WARRANTIES .............................. 17
3.1 Corporate Existence and Power ............................... 17
3.2 Corporate Authorization; No Contravention ................... 17
3.3 Governmental Authorization .................................. 18
3.4 Binding Effect .............................................. 18
3.5 Litigation .................................................. 18
3.6 No Default .................................................. 19
3.7 ERISA Compliance ............................................ 19
3.8 Use of Proceeds; Margin Regulations ......................... 19
3.9 Title to Property ........................................... 19
3.10 Taxes ....................................................... 20
3.11 Financial Condition ......................................... 20
3.12 Environmental Matters ....................................... 20
3.13 Loan Documents .............................................. 21
3.14 Regulated Entities .......................................... 21
3.15 Solvency .................................................... 21
3.16 Labor Relations ............................................. 21
3.17 Copyrights, Patents, Trademarks and Licenses, etc ........... 21
3.18 Subsidiaries ................................................ 22
3.19 Brokers' Fees; Transaction Fees ............................. 22
3.20 Insurance ................................................... 22
3.21 Full Disclosure ............................................. 22
3.22 Representations and Warranties Incorporated
from Related Agreements ................................... 23
3.23 Activities of Borrower ...................................... 23
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3.24 High Yield Unsecured Documents .............................. 23
3.25 Kentucky Reimbursement Obligations .......................... 23
ARTICLE IV - AFFIRMATIVE COVENANTS ....................................... 23
4.1 Financial Statements ........................................ 23
4.2 Certificates; Borrowing Base Certificates;
Other Information ......................................... 24
4.3 Notices ..................................................... 26
4.4 Preservation of Corporate Existence, Etc .................... 28
4.5 Maintenance of Property ..................................... 28
4.6 Insurance ................................................... 28
4.7 Payment of Obligations ...................................... 29
4.8 Compliance with Laws ........................................ 30
4.9 Inspection of Property and Books and Records ................ 30
4.10 Use of Proceeds; Proceeds of High Yield
Unsecured Offering ........................................ 30
4.11 Solvency .................................................... 31
4.12 Further Assurances .......................................... 31
4.13 Appraisals .................................................. 32
ARTICLE V - NEGATIVE COVENANTS .......................................... 32
5.1 Limitation on Liens ......................................... 32
5.2 Disposition of Assets ....................................... 34
5.3 Consolidations and Mergers .................................. 34
5.4 Loans and Investments ....................................... 34
5.5 Limitation on Indebtedness .................................. 35
5.6 Transactions with Affiliates ................................ 36
5.7 Management Fees and Compensation ............................ 36
5.8 Use of Proceeds ............................................. 37
5.9 Contingent Obligations ...................................... 37
5.10 Compliance with ERISA ....................................... 38
5.11 Restricted Payments ......................................... 38
5.12 Change in Business .......................................... 42
5.13 Change in Structure ......................................... 42
5.14 Accounting Changes .......................................... 42
5.15 Amendments to Related Agreements ............................ 43
5.16 No Negative Pledges ......................................... 43
5.17 Foreign Assets Control Regulations .......................... 44
5.18 Integration ................................................. 44
ARTICLE VI - FINANCIAL COVENANTS ......................................... 44
6.1 Reserved. ................................................... 44
6.2 Leverage Ratio .............................................. 44
6.3 Fixed Charge Coverage Ratio ................................. 45
6.4 Reserved. ................................................... 45
6.5 EBITDA ...................................................... 45
6.6 Equity Contribution ......................................... 45
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ARTICLE VII - EVENTS OF DEFAULT ........................................... 46
7.1 Event of Default ............................................ 46
7.2 Remedies .................................................... 48
7.3 Rights Not Exclusive ........................................ 49
7.4 Cash Collateral for Letters of Credit ....................... 49
ARTICLE VIII - THE AGENT .................................................. 49
8.1 Appointment and Authorization ............................... 49
8.2 Delegation of Duties ........................................ 50
8.3 Liability of Agent .......................................... 50
8.4 Reliance by Agent ........................................... 50
8.5 Notice of Default ........................................... 50
8.6 Credit Decision ............................................. 51
8.7 Indemnification ............................................. 51
8.8 Agent in Individual Capacity ................................ 52
8.9 Successor Agent ............................................. 52
8.10 Collateral Matters .......................................... 52
ARTICLE IX - MISCELLANEOUS ............................................... 53
9.1 Amendments and Waivers ...................................... 53
9.2 Notices ..................................................... 54
9.3 No Waiver; Cumulative Remedies .............................. 55
9.4 Costs and Expenses .......................................... 55
9.5 Indemnity ................................................... 55
9.6 Marshaling; Payments Set Aside .............................. 56
9.7 Successors and Assigns ...................................... 57
9.8 Assignments, Participations, etc. ........................... 57
9.9 Confidentiality ............................................. 59
9.10 Set-off; Sharing of Payments ................................ 60
9.11 Notification of Addresses, Lending Offices, Etc ............. 60
9.12 Counterparts ................................................ 61
9.13 Severability ................................................ 61
9.14 Captions .................................................... 61
9.15 Independence of Provisions .................................. 61
9.16 Interpretation .............................................. 61
9.17 No Third Parties Benefited .................................. 61
9.18 Governing Law and Jurisdiction .............................. 61
9.19 Waiver of Jury Trial ........................................ 62
9.20 Entire Agreement; Release ................................... 63
ARTICLE X - TAXES, YIELD PROTECTION AND ILLEGALITY ...................... 63
10.1 Taxes ....................................................... 63
10.2 Illegality .................................................. 66
10.3 Increased Costs and Reduction of Return. .................... 66
10.4 Funding Losses .............................................. 67
10.5 Inability to Determine Rates ................................ 68
10.6 Reserves on LIBOR Rate Loans ................................ 68
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10.7 Certificates of Lenders ..................................... 68
10.8 Survival .................................................... 68
10.9 Replacement of Lender in Respect of Increased Costs ......... 68
ARTICLE XI - RESERVED .................................................... 69
ARTICLE XII - DEFINITIONS ................................................. 69
12.1 Defined Terms ............................................... 69
12.2 Other Interpretive Provisions ............................... 88
12.3 Accounting Principles ....................................... 88
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SCHEDULES
Schedule 1.1(b) Revolving Loan Commitments
Schedule 3.2 Capitalization
Schedule 3.5 Litigation
Schedule 3.7 ERISA
Schedule 3.17 Intellectual Property
Schedule 5.1 Liens
Schedule 5.5 Indebtedness
Schedule 5.9 Contingent Obligations
Schedule 12.1 Prior Indebtedness
Schedule 12.2 Restricted Accounts
EXHIBITS
Exhibit 2.1 Incurrence Certificate
Exhibit 4.2(b) Compliance Certificate
Exhibit 12.1(a) Borrowing Base Certificate
Exhibit 12.1(b) Notice of Borrowing
Exhibit 12.1(c) Notice of Continuation/Conversion
Exhibit 12.1(d) Revolving Note
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CREDIT AGREEMENT
This CREDIT AGREEMENT (this "Agreement") is entered into as of February
18, 2004, by and among WII Components, Inc., a Delaware corporation (the
"Borrower"), Antares Capital Corporation, a Delaware corporation, as agent for
the several financial institutions from time to time party to this Agreement
(collectively, the "Lenders" and individually each a "Lender") and for itself as
a Lender, and such Lenders.
W I T N E S S E T H:
WHEREAS, the Borrower has requested, and the Lenders have agreed to make
available to the Borrower, a revolving credit facility (including a letter of
credit subfacility) upon and subject to the terms and conditions set forth in
this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties hereto agree as follows:
ARTICLE I - THE CREDITS
1.1 AMOUNTS AND TERMS OF COMMITMENTS.
(a) RESERVED.
(b) THE REVOLVING CREDIT. Each Lender severally and not jointly agrees,
on the terms and conditions hereinafter set forth, to make Loans to the Borrower
(each such Loan, a "Revolving Loan") from time to time on any Business Day
during the period from the Closing Date to the Revolving Termination Date, in an
aggregate amount not to exceed at any time outstanding the amount set forth
opposite such Lender's name in Schedule 1.1(b) under the heading "Revolving Loan
Commitment" (such amount as the same may be reduced from time to time pursuant
to subsection 1.8(h) hereof or as a result of one or more assignments pursuant
to Section 9.8, being referred to herein as such Lender's "Revolving Loan
Commitment"); PROVIDED, HOWEVER, that, after giving effect to any Borrowing of
Revolving Loans, the aggregate principal amount of all outstanding Revolving
Loans shall not exceed the Maximum Revolving Loan Balance. Subject to the other
terms and conditions hereof, amounts borrowed under this subsection 1.1(b) may
be repaid and reborrowed from time to time. The "Maximum Revolving Loan Balance"
from time to time will be the lesser of:
(i) the "Borrowing Base" (as calculated pursuant to the Borrowing
Base Certificate then most recently delivered to the Agent and Lenders in
accordance with the terms hereof) in effect from time to time, and
(ii) the Aggregate Revolving Loan Commitment then in effect;
LESS, in either case, the amount of any Letter of Credit Participation
Liability.
If at any time the Revolving Loans exceed the Maximum Revolving Loan Balance,
then Borrower shall, within three (3) Business Days, prepay Revolving Loans in
an amount sufficient to eliminate such excess.
(c) LENDER LETTERS OF CREDIT AND LETTER OF CREDIT PARTICIPATION
AGREEMENTS. Subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of Borrower herein set forth,
the Revolving Loan Commitment may, in addition to advances under the Revolving
Loan, be utilized, upon the request of the Borrower, for (i) the issuance of
letters of credit by Agent (each such letter of credit, a "Lender Letter of
Credit") or (ii) the issuance of letter of credit participation agreements by
Agent (each such letter of credit participation, a "Letter of Credit
Participation Agreement") to confirm payment to banks (whether or not such banks
are Lenders) which issue letters of credit for the account of Borrower on behalf
of each Lender having a Revolving Loan Commitment (severally and not jointly)
according to such Lender's Revolving Loan Commitment. The aggregate amount of
Letter of Credit Participation Liability with respect to all Lender Letters of
Credit and Letter of Credit Participation Agreements outstanding at any time
shall not exceed $2,000,000.
The Borrower shall be irrevocably and unconditionally obligated forthwith
without presentment, demand, protest or other formalities of any kind, to
reimburse the Agent for any amounts paid by the Agent under any Lender Letter of
Credit or Letter of Credit Participation Agreement. The Borrower hereby
authorizes and directs the Lenders, at the Agent's option, to make a Revolving
Loan in the amount of any payment made by the Agent with respect to any Lender
Letter of Credit or Letter of Credit Participation Agreement. All amounts paid
by the Agent with respect to any Lender Letter of Credit or Letter of Credit
Participation Agreement that are not immediately repaid by Borrower with the
proceeds of a Revolving Loan or otherwise shall bear interest at the interest
rate then applicable to Revolving Loans, calculated using the Base Rate and the
Applicable Margin then in effect. Each Lender agrees to fund its Commitment
Percentage of any Revolving Loan made pursuant to this subsection 1.1(c) and, if
no such Revolving Loans are made, each Lender agrees to purchase, and shall be
deemed to have purchased, a participation in such Lender Letter of Credit or
Letter of Credit Participation Agreement in an amount equal to its ratable share
of such Lender Letter of Credit or Letter of Credit Participation Agreement
based upon the Revolving Loan Commitments then in effect and each Lender agrees
to pay to the Agent such share of any payments made by the Agent under such
Lender Letter of Credit or Letter of Credit Participation Agreement. The
obligations of each Lender under the preceding two (2) sentences shall be
absolute and unconditional and such remittance shall be made notwithstanding the
occurrence or continuation of an Event of Default or Default or the failure to
satisfy any condition set forth in Section 2.2 hereof.
In addition to all other terms and conditions set forth in this
Agreement, the issuance by Agent of any Lender Letter of Credit or Letter of
Credit Participation Agreement shall be subject to the condition precedent that
the Lender Letter of Credit, Letter of Credit Participation Agreement or the
letter of credit or written contract for which the Borrower requests a Letter of
Credit Participation Agreement shall support a transaction entered into by one
of its Subsidiaries in the Ordinary Course of Business, or otherwise reasonably
acceptable to Agent, and shall be in such form, be for such amount, and contain
such terms as are reasonably satisfactory to Agent.
The expiration date of each Lender Letter of Credit shall be on a date
which is the earlier of (a) one year from its date of issuance, or (b) the
thirtieth (30th) day before the Revolving Termination Date. Each Letter of
Credit Participation Agreement shall provide that the Letter of Credit
Participation Agreement terminates and all demands or claims for payment must be
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presented by a date certain, which date will be the earlier of (a) one year from
its date of issuance, or (b) the thirtieth (30th) day before the Revolving
Termination Date.
The Borrower shall give Agent at least ten (10) Business Days' prior
written notice specifying the date a Lender Letter of Credit or Letter of Credit
Participation Agreement is to be issued, identifying the beneficiary and
describing the nature of the transactions proposed to be supported thereby. The
notice shall be accompanied by the drawing terms for the Lender Letter of Credit
or form of each letter of credit or other written contract which will be
supported by the Letter of Credit Participation Agreement.
1.2 NOTES. The Revolving Loans made by each Lender shall be evidenced by
a Revolving Note payable to the order of such Lender in an amount equal to such
Lender's Revolving Loan Commitment.
1.3 INTEREST.
(a) Subject to subsections 1.3(c) and 1.3(d), Revolving Loans shall bear
interest on the outstanding principal amount thereof from the date when made at
a rate per annum equal to the LIBOR or the Base Rate, as the case may be, PLUS
the Applicable Margin in effect from time to time. Each determination of an
interest rate by the Agent shall be conclusive and binding on the Borrower and
the Lenders in the absence of demonstrable error. All computations of fees and
interest payable under this Agreement shall be made on the basis of a 360-day
year and actual days elapsed. Interest and fees shall accrue during each period
during which interest or such fees are computed from the first day thereof to
the last day thereof.
(b) Interest on Revolving Loans shall be paid in cash, in arrears on each
Interest Payment Date and on the date of any payment or prepayment of Revolving
Loans in full.
(c) At the election of the Agent or the Required Lenders while any Event
of Default exists, the Borrower shall pay, in cash, interest (after as well as
before entry of judgment thereon to the extent permitted by law) on the
Obligations from and after the date of occurrence of such Event of Default, (i)
at a rate per annum which is determined by adding two percent (2.0%) per annum
to the Applicable Margin from time to time then in effect for such Obligations
(plus, the LIBOR or Base Rate, as the case may be) constituting Revolving Loans,
and (ii) in the case of Obligations not subject to the Applicable Margin (other
than the fees described in Section 1.9), at a rate per annum equal to the rate
per annum applicable to Revolving Loans which are (or if any were) Base Rate
Loans (including the Applicable Margin with respect thereto) plus two percent
(2.0%); PROVIDED, HOWEVER, that, on and after the expiration of any Interest
Period applicable to any LIBOR Rate Loan outstanding during the continuation of
such Event of Default, the principal amount of such Loan shall, during the
continuation of such Event of Default, bear interest at a rate per annum equal
to the Base Rate plus the Applicable Margin plus two percent (2.0%). All such
interest shall be payable on demand of the Agent or the Required Lenders.
(d) Anything herein to the contrary notwithstanding, the obligations of
the Borrower hereunder and under the other Loan Documents shall be subject to
the limitation that payments of interest shall not be required, for any period
for which interest is computed hereunder or thereunder, to the extent (but only
to the extent) that contracting for or receiving such payment
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by the respective Lender would be contrary to the provisions of any law
applicable to such Lender limiting the highest rate of interest which may be
lawfully contracted for, charged or received by such Lender, and in such event
the Borrower shall pay such Lender interest at the highest rate permitted by
applicable law.
1.4 LOAN ACCOUNTS. The Agent, on behalf of the Lenders, shall record on
its books and records the amount of each Loan made, the interest rate
applicable, all payments of principal and interest thereon and the principal
balance thereof from time to time outstanding. The Agent shall deliver to the
Borrower on a monthly basis a loan statement setting forth such record for the
immediately preceding month. Such record shall, absent demonstrable error, be
conclusive evidence of the amount of the Loans made by the Lenders to the
Borrower and the interest and payments thereon. Any failure to so record or any
error in doing so, or any failure to deliver such loan statement shall not,
however, limit or otherwise affect the obligation of the Borrower hereunder (and
under any Note) to pay any amount owing with respect to the Loans or provide the
basis for any claim against the Agent or any Lender.
1.5 PROCEDURE FOR REVOLVING CREDIT BORROWING.
(a) Each Borrowing under the Revolving Loan shall be made upon the
Borrower's irrevocable (subject to Section 10.5 hereof) written notice delivered
to the Agent in the form of a Notice of Borrowing, which notice must be received
by the Agent prior to 12:30 p.m. (Chicago time) (i) on the requested Borrowing
date in the case of each Base Rate Loan equal to or less than $1,000,000 and in
the case of the initial Loans to be made on the Closing Date, (ii) on the date
which is one (1) Business Day prior to the requested Borrowing date of each Base
Rate Loan in excess of $1,000,000 but equal to or less than $3,000,000 and (iii)
on the day which is three (3) Business Days prior to the requested Borrowing
date in the case of each LIBOR Rate Loan and each Base Rate Loan in excess of
$3,000,000; PROVIDED, that with respect to Loans subsequent to the initial
Loans, the Borrower may give notice of the requested Borrowing to the Agent by
telephone call, with such notice confirmed not later than the following Business
Day by delivery to the Agent of a signed Notice of Borrowing. Such Notice of
Borrowing shall specify:
(i) the amount of the Borrowing (which shall be in an aggregate
minimum principal amount of $100,000 and multiples of $50,000 in excess
thereof);
(ii) the requested Borrowing date, which shall be a Business Day;
(iii) whether the Borrowing is to comprise LIBOR Rate Loans and/or
Base Rate Loans; and
(iv) if the Borrowing is to comprise LIBOR Rate Loans, the
Interest Period applicable to such Loans.
PROVIDED, HOWEVER, that with respect to the Borrowing to be made on the Closing
Date, such Borrowing will consist of Base Rate Loans only and shall remain so
for not less than three (3) Business Days. Thereafter, the Borrower may request
that Revolving Loans be made as LIBOR Rate Loans and that Loans be converted to
or continued as LIBOR Rate Loans.
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(b) Upon receipt of the Notice of Borrowing, the Agent will promptly
notify each Lender with a Commitment affected thereby of such Notice and of the
amount of such Lender's Commitment Percentage of the Borrowing.
(c) Unless Agent is otherwise directed in writing by the Borrower, the
proceeds of each requested Borrowing after the Closing Date will be made
available to the Borrower by the Agent by wire transfer (or ACH transfer) of
such amount to the Borrower pursuant to the wire transfer instructions specified
on the signature page hereto.
1.6 CONVERSION AND CONTINUATION ELECTIONS.
(a) The Borrower may upon irrevocable (subject to subsection 10.2(c) and
Section 10.5) written notice to the Agent in accordance with subsection 1.6(b)
elect to convert on any Business Day, any Base Rate Loans into LIBOR Rate Loans
or elect to continue on the last day of the applicable Interest Period any LIBOR
Rate Loans having Interest Periods maturing on such day, in each instance, in
whole or in part in an amount not less than $100,000, or that is in an integral
multiple of $50,000 in excess thereof.
(b) The Borrower shall deliver a Notice of Continuation/Conversion to be
received by the Agent not later than 12:30 p.m. (Chicago time) at least three
(3) Business Days in advance of the requested Conversion Date or continuation
date, specifying:
(i) the proposed Conversion Date or continuation date;
(ii) the aggregate amount of Loans to be converted or continued;
and
(iii) the duration of the requested Interest Period with respect
to the Loans to be converted or continued as LIBOR Rate Loans.
(c) If upon the expiration of any Interest Period applicable to LIBOR
Rate Loans, the Borrower has failed to select timely a new Interest Period to be
applicable to such LIBOR Rate Loans or if any Event of Default shall then exist,
the Borrower shall be deemed to have elected to convert such LIBOR Rate Loans
into Base Rate Loans effective as of the expiration date of such current
Interest Period.
(d) Upon receipt of a Notice of Continuation/Conversion, the Agent will
promptly notify each Lender thereof. In addition, the Agent will, with
reasonable promptness, notify the Borrower and the Lenders of each determination
of LIBOR; PROVIDED, that any failure to do so shall not relieve the Borrower of
any liability hereunder or provide the basis for any claim against the Agent.
All conversions and continuations shall be made pro rata according to the
respective outstanding principal amounts of the Loans with respect to which the
notice was given held by each Lender.
(e) Unless the Required Lenders shall otherwise agree, during the
existence of an Event of Default, the Borrower may not elect to have a Loan
converted into or continued as a LIBOR Rate Loan.
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(f) Notwithstanding any other provision contained in this Agreement,
after giving effect to any Borrowing, or to any continuation or conversion of
any Loans, there shall not be more than seven (7) different Interest Periods in
effect.
1.7 OPTIONAL PREPAYMENTS.
(a) The Borrower may at any time upon at least one (1) Business Day's
prior written notice to the Agent, prepay the Loans in whole or in part in an
amount greater than or equal to $100,000, in each instance, without penalty or
premium except as provided in Section 10.4. Optional partial prepayments in
amounts less than $100,000 shall not be permitted.
(b) The notice of any prepayment shall not thereafter be revocable by the
Borrower and the Agent will promptly notify each Lender thereof and of such
Lender's Commitment Percentage of such prepayment. The payment amount specified
in such notice shall be due and payable on the date specified therein. Together
with each prepayment under this Section 1.7, the Borrower shall pay any amounts
required pursuant to Section 10.4.
1.8 MANDATORY PREPAYMENTS OF LOANS AND COMMITMENT REDUCTIONS.
(a) RESERVED.
(b) REVOLVING LOAN. The Borrower shall repay to the Lenders in full on
the date specified in clause (a) of the definition of "Revolving Termination
Date" the aggregate principal amount of the Revolving Loans outstanding on the
Revolving Termination Date.
(c) ASSET DISPOSITIONS. If the Borrower or any of its Subsidiaries shall
at any time or from time to time:
(i) make or agree to make a Disposition; or
(ii) suffer an Event of Loss;
and the aggregate amount of the Net Proceeds received by the Borrower and its
Subsidiaries in connection with such Disposition or Event of Loss and all other
Dispositions and Events of Loss occurring during the fiscal year exceeds
$1,000,000, then (A) the Borrower shall promptly notify the Agent of such
proposed Disposition or Event of Loss (including the amount of the estimated Net
Proceeds to be received by the Borrower and/or any of its Subsidiaries in
respect thereof) and (B) promptly upon receipt by the Borrower and/or any of its
Subsidiaries of the Net Proceeds of such Disposition or Event of Loss, the
Borrower shall deliver such Net Proceeds to the Agent for distribution to the
Lenders as a prepayment of the Loans, which prepayment shall be applied in
accordance with subsection 1.8(h) hereof. Notwithstanding the foregoing and
provided (x) no Default or Event of Default has occurred and is continuing and
(y) the Borrower otherwise shall have complied with Section 5.2 in respect
thereof, such prepayment shall not be required to the extent a Subsidiary of the
Borrower reinvests the Net Proceeds of such Disposition or Event of Loss, or a
portion thereof, in productive assets of a kind then used or usable in the
business of such Subsidiary, within one hundred eighty (180) days after the date
of such Disposition or Event of Loss, or enters into a binding commitment in
respect thereof within said one hundred eighty (180) day period and subsequently
makes such reinvestment. Pending such reinvestment,
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such Net Proceeds shall be either (i) delivered to the Agent, for distribution
to the Lenders, as a prepayment of the Revolving Loans, but not as a permanent
reduction of the Revolving Loan Commitment (which application shall not be
required if, under the terms of the Indenture, such application is required to
result in a permanent reduction of the Revolving Loan Commitment) or (ii) held
by the Borrower in an account of the Borrower subject to a deposit account
control agreement to which the Agent is a party, and which is in form and
substance acceptable to the Agent; PROVIDED, such Net Proceeds deposited into
such deposit account shall be used by a Subsidiary of the Borrower solely for
reinvestment as and to the extent permitted herein or otherwise delivered
promptly to the Agent, for distribution to the Lenders, as a prepayment of the
Loans, to be applied in accordance with Section 1.8(h). The foregoing
notwithstanding, if at any time pending such reinvestment the aggregate
outstanding principal balance of the Revolving Loans exceeds the Maximum
Revolving Loan Balance, then Agent hereby is directed to apply such Net Proceeds
deposited into such deposit account to the Loans in an amount sufficient to
eliminate such excess.
(d) ISSUANCE OF DEBT SECURITIES. Immediately upon the receipt by Borrower
or any of its Subsidiaries of the Net Issuance Proceeds of the issuance of debt
securities by Borrower or any of its Subsidiaries (other than Net Issuance
Proceeds from Permitted Issuances), Borrower shall deliver to Agent an amount
equal to one hundred percent (100%) of such proceeds for application to the
Loans in accordance with subsection 1.8(h).
(e) RESERVED.
(f) PROCEEDS UNDER MERGER DOCUMENTS OR OTHER ACQUISITION DOCUMENTS.
Immediately upon receipt of any Seller Merger Agreement Payments or
indemnification, purchase price adjustment, earnout, escrow or similar payment
under any other Acquisition Documents by the Borrower or any of its
Subsidiaries, the Borrower shall deliver to the Agent an amount equal to
fifty-six percent (56%) of each such Seller Merger Agreement Payment or such
other payments, as the case may be, for application to the Loans in accordance
with subsection 1.8(h); PROVIDED, that the remaining forty-four percent (44%) of
any such Seller Merger Agreement Payment or such other payments is used by a
Subsidiary of the Borrower solely for purposes otherwise permitted hereunder,
including general working capital purposes.
(g) EQUITY CONTRIBUTION. Immediately upon receipt by the Borrower or any
of its Subsidiaries of any equity contribution from Sponsor in accordance with
Section 6.6, Borrower shall deliver to Agent an amount equal to one hundred
percent (100%) of such proceeds (or otherwise repay the Loans in an amount equal
to one hundred percent (100%) of such proceeds) for application to the Loans in
accordance with subsection 1.8(h).
(h) APPLICATION OF PREPAYMENTS. Any prepayments pursuant to Section 1.7
or subsection 1.8(c) (other than prepayments of Revolving Loans pending
reinvestment as set forth therein), 1.8(d) or 1.8(f) shall be applied in
permanent reduction of the Revolving Loan, whereupon the Revolving Loan
Commitment of each Lender shall automatically and permanently be reduced by an
amount equal to such Lender's ratable share of the aggregate of principal
repaid, effective as of the earlier of the date that such prepayment is made or
the date by which such prepayment is due and payable hereunder; PROVIDED,
HOWEVER, that prepayments pursuant to Section 1.8(c) shall not result in a
permanent reduction of the Revolving Loan
7
Commitment if (i) the Borrower has complied with Section 5.2 in respect thereof,
including, without limitation, by delivering to the Agent a replacement
Borrowing Base Certificate setting forth the calculation of the "Borrowing Base"
after giving effect to each underlying Disposition and Event of Loss, (ii) at
the request of the Agent, an appraisal of the remaining equipment, machinery
and/or real Property to be included in such "Borrowing Base" has been undertaken
within sixty (60) days of the date of any such Disposition and Event of Loss,
which request shall be made, if ever, by the Agent within a reasonable period
after the date upon which the Borrower shall have notified the Agent in writing
of such Disposition or Event of Loss, and (iii) the Indenture does not otherwise
require such application to result in a permanent reduction of the Revolving
Loan Commitment. Any prepayments pursuant to subsection 1.8(g) shall be applied
to the Revolving Loan (without a corresponding reduction of the Revolving Loan
Commitment of any Lender). To the extent permitted by the foregoing sentences,
amounts prepaid shall be applied first to any Base Rate Loans then outstanding
and then to outstanding LIBOR Rate Loans with the shortest Interest Periods
remaining. Together with each prepayment under this Section 1.8, the Borrower
shall pay any amounts required pursuant to Section 10.4 hereof.
1.9 FEES.
(a) CLOSING AND AGENT'S FEES. The Borrower shall pay to the Agent, for
the ratable benefit of the Lenders, a closing fee, and for the Agent's own
account, an agent's fee, in the amounts and at the times set forth in a letter
agreement between the Borrower and the Agent dated of even date herewith.
(b) COMMITMENT FEE. The Borrower shall pay to Agent, for the ratable
benefit of the Lenders, a fee (the "Commitment Fee") in an amount equal to:
(i) the Aggregate Revolving Loan Commitment, less
(ii) the sum of (x) the average daily balance of all Revolving
Loans outstanding plus (y) the average daily amount of the Letter of
Credit Participation Liability, in each case, during the preceding
quarter,
multiplied by three-eighths of one percent (0.375%) per annum, such fee to be
payable quarterly in arrears on the first day of the quarter following the date
hereof and the first day of each quarter thereafter. The Commitment Fee provided
in this subsection 1.9(b) shall accrue at all times from and after mutual
execution and delivery of this Agreement.
(c) LETTER OF CREDIT PARTICIPATION FEE. The Borrower shall pay to Agent,
for the ratable benefit of the Lenders, fees for each Lender Letter of Credit
and each Letter of Credit Participation Agreement (the "Letter of Credit
Participation Fee") for the period from and including the date of issuance of
same to and excluding the date of expiration or termination, equal to the
average daily amount of Letter of Credit Participation Liability multiplied by a
rate per annum equal to three percent (3.00%); PROVIDED, HOWEVER, at the Agent's
or Required Lenders' option, while an Event of Default exists such percent shall
be increased by two percent (2.00%) per annum over the otherwise applicable
rate, such fees to be payable monthly in arrears on the first day of the month
following the date hereof and the first day of each month thereafter. The
Borrower shall also reimburse the Agent for any and all fees and expenses, if
any, paid by
8
the Agent to the issuer of any letter of credit subject to a Letter of Credit
Participation Agreement.
1.10 PAYMENTS BY THE BORROWER.
(a) All payments (including prepayments) to be made by the Borrower on
account of principal, interest, fees and other amounts required hereunder shall
be made without set-off, recoupment, counterclaim or deduction of any kind,
shall, except as otherwise expressly provided herein, be made to the Agent for
the ratable account of the Lenders at the address for payment specified in the
signature page hereof in relation to the Agent (or such other address as the
Agent may from time to time specify in accordance with Section 9.2), and shall
be made in dollars and in immediately available funds, no later than 12:30 p.m.
(Chicago time) on the date due. Any payment which is received by the Agent later
than 12:30 p.m. (Chicago time) shall be deemed to have been received on the
immediately succeeding Business Day and any applicable interest or fee shall
continue to accrue. The Borrower hereby authorizes the Agent and each Lender to
(but neither the Agent nor any Lender shall have any obligation to) make a
Revolving Loan (which shall be a Base Rate Loan) to pay (i) interest, agent
fees, Commitment Fees and Letter of Credit Participation Fees, in each instance,
on the date due, or (ii) after five (5) Business Days prior notice to the
Borrower, other fees, costs or expenses payable by the Borrower or any of its
Subsidiaries hereunder or under the other Loan Documents.
(b) Subject to the provisions set forth in the definition of "Interest
Period" herein, if any payment hereunder shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of interest or fees, as the case may be.
(c) Except for payments collected or received prior to the occurrence of
an Event of Default in respect to a specific Obligation, all amounts collected
or received by the Agent shall be applied as follows:
FIRST, to payment of fees, costs and expenses, including Attorney
Costs, of the Agent payable or reimbursable by the Borrower and/or its
Subsidiaries under the Loan Documents;
SECOND, to payment of Attorney Costs of Lenders payable or
reimbursable by the Borrower and/or its Subsidiaries under this
Agreement;
THIRD, to payment of all accrued unpaid interest on the
Obligations pro rata;
FOURTH, to payment of principal of the Obligations (including, if
an Event of Default has occurred and is continuing, cash
collateralization of Letter of Credit Participation Liability);
FIFTH, to payment of any other amounts owing constituting
Obligations; and
SIXTH, any remainder shall be for the account of and paid to
whomever may be lawfully entitled thereto.
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In carrying out the foregoing, (i) amounts received shall be applied in
the numerical order provided until exhausted prior to the application to the
next succeeding category; and (ii) each of the Lenders shall receive an amount
equal to its pro rata share of amounts available to be applied pursuant to
clauses second, third, fourth and fifth above.
1.11 PAYMENTS BY THE LENDERS TO THE AGENT; SETTLEMENT.
(a) As set forth in subsection 1.5(b), upon receipt of a Notice of
Borrowing, the Agent will promptly notify each Lender of such Lender's
Commitment Percentage of the Borrowing requested thereby. Each Lender will fund
its Commitment Percentage of Borrowings of Revolving Loans to the Agent at the
Agent's account specified on its signature page hereto, or to such other account
as the Agent may designate in writing, no later than 2:00 p.m. (Chicago time) on
the scheduled Borrowing date.
(b) Unless the Agent shall have received notice from a Lender on the
Closing Date or, with respect to each Borrowing after the Closing Date, by 1:00
p.m. (Chicago time) on the date of any proposed Borrowing, that such Lender will
not make available to the Agent as and when required hereunder for the account
of the Borrower the amount of such Lender's Commitment Percentage of the
proposed Borrowing, the Agent may assume that each Lender has made such amount
available to the Agent in immediately available funds on the applicable
Borrowing date and the Agent may (but shall not be so required), in reliance
upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent any Lender shall not have made its
full amount available to the Agent in immediately available funds and the Agent
in such circumstances has made available to the Borrower such amount, that
Lender shall on the next Business Day following the date of such Borrowing make
such amount available to the Agent, together with interest at the Federal Funds
Rate for and determined as of each day during such period. A notice of the Agent
submitted to any Lender with respect to amounts owing under this subsection
1.11(b) shall be conclusive, absent manifest error. If such amount is so made
available, such payment to the Agent shall constitute such Lender's Loan on the
date of Borrowing for all purposes of this Agreement. If such amount is not made
available to the Agent on the next Business Day following the date of such
Borrowing, the Agent shall notify the Borrower of such failure to fund and, upon
demand by the Agent, the Borrower shall pay such amount to the Agent for the
Agent's account, together with interest thereon for each day elapsed since the
date of such Borrowing, at a rate per annum equal to the interest rate
applicable at the time to the Loans comprising such Borrowing.
(c) The failure of any Lender to make any Loan on any date of Borrowing
shall not relieve any other Lender of any obligation hereunder to make a Loan on
the date of such Borrowing, but no Lender shall be responsible for the failure
of any other Lender to make the Loan to be made by such other Lender on the date
of any Borrowing. Without limiting the generality of the foregoing, each Lender
shall be obligated to fund its Commitment Percentage of any Revolving Loan made
after any acceleration of the Obligations with respect to any draw on any Lender
Letter of Credit or any payment made under any Letter of Credit Participation
Agreement.
(d) Provided that such Lender has made all payments required to be made
by it under this Agreement, the Agent will pay to such Lender, by wire transfer
to such Lender's account (as
10
specified by such Lender on such Lender's respective signature page to this
Agreement or the applicable Assignment and Acceptance) such Lender's Commitment
Percentage of principal, interest, Commitment Fees and Letter of Credit
Participation Fees, in each instance, received by the Agent, promptly after the
Agent's receipt thereof.
(e) Unless the Agent shall have received notice from the Borrower prior
to the date on which any payment is due to the Lenders hereunder that the
Borrower will not make such payment in full as and when required hereunder, the
Agent may assume that the Borrower has made such payment in full to the Agent on
such date in immediately available funds and the Agent may (but shall not be so
required), in reliance upon such assumption, cause to be distributed to each
Lender on such due date an amount equal to the amount then due such Lender. If
the Agent pays an amount to a Lender under this Agreement in the belief or
expectation that a related payment has been or will be received by the Agent
from the Borrower and such related payment is not received by the Agent, the
Agent shall be entitled to recover such amount from such Lender, and each Lender
shall repay to the Agent on demand such amount, together with interest thereon
for each day from the date such amount is distributed to such Lender until the
date such Lender repays such amount to the Agent, at the Federal Funds Rate,
without setoff, recoupment, counterclaim or deduction of any kind. If the Agent
determines at any time that any amount received by the Agent under this
Agreement must be returned to the Borrower or paid to any other Person pursuant
to any solvency, fraudulent conveyance or similar law or otherwise, then,
notwithstanding any other term or condition of this Agreement, the Agent will
not be required to distribute any portion of such payment to any Lender. In
addition, each Lender will repay to the Agent on demand any portion of such
amount that the Agent has distributed to such Lender, together with interest
thereon at such rate, if any, as the Agent is required to pay to the Borrower or
such other Person, without setoff, recoupment, counterclaim or deduction of any
kind.
ARTICLE II - CONDITIONS PRECEDENT
2.1 CONDITIONS OF INITIAL LOANS. The obligation of each Lender to make
its initial Loan and of the Agent to issue the initial Lender Letter of Credit
or Letter of Credit Participation Agreement hereunder is subject to the
condition that the Agent shall have received on or before the Closing Date all
of the following, in form and substance reasonably satisfactory to the Agent and
each Lender and (except for the Notes and any instruments or documents which are
Pledged Collateral) in sufficient counterparts for each Lender, duly executed by
all parties thereto:
(a) CREDIT AGREEMENT AND NOTES. This Agreement executed by the Borrower,
the Agent and each of the Lenders, and the Notes executed by the Borrower;
(b) SECRETARY'S CERTIFICATES; RESOLUTIONS; INCUMBENCY. A certificate of
the Secretary or Assistant Secretary of the Borrower and each Subsidiary of the
Borrower which is a party to any Loan Document, certifying:
(i) the names and true signatures of the officers of the Borrower
and each such Subsidiary authorized to execute, deliver and perform, as
applicable, this Agreement, and all other Loan Documents to be delivered
hereunder; and
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(ii) copies of the resolutions of the board of directors or other
governing body of the Borrower and each such Subsidiary approving and
authorizing the execution, delivery and performance, as applicable, by
the Borrower or such Subsidiary of this Agreement and the other Loan
Documents to be executed or delivered by it hereunder;
(c) ORGANIZATION DOCUMENTS AND GOOD STANDING. Each of the following
documents:
(i) the Organization Documents of the Borrower and each of its
Subsidiaries, as such Organization Documents are in effect on the Closing
Date, certified by the Secretary of State (or similar, applicable
Governmental Authority) of the state of incorporation or formation of the
Borrower or such Subsidiary as of a recent date, if and as applicable,
all certified by the Secretary or Assistant Secretary of the Borrower or
such Subsidiary as of the Closing Date; and
(ii) a good standing certificate for the Borrower and each of its
Subsidiaries from the Secretary of State (or similar, applicable
Governmental Authority) of its state of incorporation or formation, as
applicable, and each state where the Borrower or such Subsidiary is
qualified to do business as a foreign entity as of a recent date;
(d) COLLATERAL DOCUMENTS. The Collateral Documents, executed by the
Borrower and each of its Subsidiaries who are a party thereto in appropriate
form for recording, where necessary, together with:
(i) acknowledgment copies of all uniform commercial code financing
statements filed, registered or recorded to perfect the security
interests of the Agent, for the benefit of the Agent and the Lenders,
granted pursuant to the Collateral Documents, or other evidence
reasonably satisfactory to the Agent that there has been filed,
registered or recorded all financing statements and other filings,
registrations and recordings reasonably necessary and advisable to
perfect the Liens of the Agent, for the benefit of the Agent and the
Lenders, granted pursuant to the Collateral Documents, in accordance with
applicable law;
(ii) uniform commercial code financing statement, federal and
state tax lien, pending litigation and judgment searches as the Agent
shall have reasonably requested of the Borrower, each of its Subsidiaries
and such other Persons as the Agent may request, and such termination
statements, releases or other documents as may be reasonably necessary to
confirm that the Collateral is subject to no other Liens in favor of any
Persons (other than Permitted Liens);
(iii) all certificates and instruments representing the Pledged
Collateral, irrevocable proxies and stock transfer powers executed in
blank or other executed endorsements reasonably satisfactory to the
Agent, with signatures guaranteed as the Agent may require;
(iv) evidence that all other actions reasonably necessary or, in
the reasonable opinion of the Agent, desirable to perfect and protect the
Liens created by the Collateral Documents have been taken;
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(v) funds sufficient to pay any filing or recording tax or fee in
connection with any and all uniform commercial code financing statements
and, if applicable, the Mortgages, all title insurance premiums,
documentary stamp or intangible taxes, recording fees and mortgage taxes
payable in connection with the recording of any Mortgage or filing of any
uniform commercial code financing statements or the issuance of the title
insurance policies (whether due on the Closing Date or in the future)
including sums due in connection with any future advances;
(vi) with respect to each parcel of real Property in respect of
which there is delivered a Mortgage, if any, an A.L.T.A. mortgagee policy
of title insurance or a binder issued by a title insurance company
reasonably satisfactory to the Agent insuring (or undertaking to insure,
in the case of a binder) that the Mortgage creates and constitutes a
valid first Lien against such real Property in favor of the Agent, for
the benefit of Agent and the Lenders, in any amount and subject only to
exceptions reasonably acceptable to the Agent, with such endorsements and
affirmative insurance as the Agent may reasonably request;
(vii) if required by the Agent, flood insurance and earthquake
insurance on terms satisfactory to the Agent;
(viii) the most recent ALTA surveys and surveyor's certifications
certified to the Agent as to all real Property in respect of which there
is delivered a Mortgage, each in form and substance reasonably
satisfactory to the Agent; and
(ix) such consents, estoppels, subordination agreements and other
documents and instruments executed by landlords, tenants and other
Persons party to material contracts relating to any Collateral as to
which the Agent shall be granted a Lien for the benefit of Agent and the
Lenders, as reasonably requested by the Agent;
(e) LEGAL OPINIONS. Such opinions of counsel to the Borrower and its
Subsidiaries, in each instance addressed to the Agent and the Lenders, in form
and substance reasonably satisfactory to Agent;
(f) PAYMENT OF FEES. Evidence reasonably acceptable to it that the
Borrower shall have paid all accrued and unpaid fees, costs and expenses to the
extent then due and payable on the Closing Date, together with Attorney Costs of
the Agent;
(g) CERTIFICATE. A certificate signed on behalf of the Borrower by a
Responsible Officer, dated as of the Closing Date, stating that:
(i) the representations and warranties contained in Article III
hereof are true and correct in all material respects on and as of such
date, as though made on and as of such date;
(ii) no Default or Event of Default exists or would result from
the initial Borrowing or issuance of the initial Lender Letter of Credit
or Letter of Credit Participation Agreement; and
13
(iii) there has occurred since December 31, 2002 no event or
circumstance that has resulted or would reasonably be expected to result
in (A) a Material Adverse Effect or (B) a material adverse change in, or
a material adverse effect upon, the prospects of the Borrower or the
Borrower and its Subsidiaries taken as a whole;
(h) FINANCIAL STATEMENTS. Copies of all of the financial statements of
the Borrower and its Subsidiaries referred to in Section 3.11, certified on
behalf of the Borrower by a Responsible Officer of the Borrower, and management
reports for the 2000, 2001 and 2002 fiscal years of the Borrower and its
Subsidiaries, in reasonable detail, signed by the chief financial officer of the
Borrower, describing the operations and financial condition of the Borrower and
its Subsidiaries for the fiscal years then ended;
(i) INSURANCE POLICIES. Standard lenders' loss payable endorsements in
favor of the Agent with respect to the insurance policies or other instruments
or documents evidencing insurance coverage on the Property of the Borrower in
accordance with Section 4.6 and endorsements to all liability insurance policies
naming the Agent and the Lenders as additional insureds thereunder;
(j) DUE DILIGENCE. Evidence of completion to the satisfaction of the
Agent of such investigations, reviews and audits with respect to the Borrower
and its Subsidiaries and the transactions contemplated by the Related Agreements
as the Agent or any Lender may deem appropriate, including evidence that the
Borrower and its Subsidiaries are on course to achieve their 2004 budget as of
the Closing Date;
(k) INSURANCE REVIEW. A review of the insurance coverages of the Borrower
and its Subsidiaries, prepared by a qualified firm reasonably acceptable to the
Agent, dated as of a recent date prior to the Closing Date and otherwise in form
and substance reasonably satisfactory to the Agent;
(l) BORROWING BASE CERTIFICATE. A duly completed Borrowing Base
Certificate setting forth the "Borrowing Base" as of a date not more than thirty
(30) days prior to the Closing Date (or, if longer, as of the last day of the
month immediately preceding the month during which the Closing Date occurs);
further, not more than $4,000,000 in Revolving Loans shall be advanced on the
Closing Date, and after giving effect to the consummation of the Related
Transactions, payment of all costs and expenses in connection therewith and
funding of the initial Loans, the Maximum Revolving Loan Balance shall exceed
the outstanding principal balance of Revolving Loans by not less than
$8,000,000;
(m) RELATED TRANSACTIONS. Evidence reasonably acceptable to it that the
Related Transactions shall have closed in the manner contemplated by the Related
Agreements and shall otherwise be in form and substance reasonably satisfactory
to the Agent;
(n) HIGH YIELD UNSECURED INDEBTEDNESS. Evidence reasonably satisfactory
to it that no more than $120,000,000 in stated principal amount of High Yield
Unsecured Indebtedness is outstanding, the terms of which shall be satisfactory
to the Agent and the Lenders;
(o) PRIOR INDEBTEDNESS. A payoff letter from each lender of any Prior
Indebtedness in form and substance reasonably satisfactory to the Agent,
together with such uniform commercial
14
code termination statements, releases of mortgage Liens and other instruments,
documents and/or agreements necessary or appropriate to terminate any Liens in
favor of such lenders securing Prior Indebtedness which is to be paid off on the
Closing Date as the Agent may reasonably request, duly executed and in form and
substance reasonably satisfactory to the Agent;
(p) INCURRENCE CERTIFICATE. A certificate signed on behalf of the
Borrower by a Responsible Officer demonstrating to the Agent's reasonable
satisfaction that (i) the EBITDA (with such adjustments as the Agent may
reasonably approve) of the Borrower and its Subsidiaries for the twelve (12)
months most recently completed was at least $29,000,000 and (ii) the ratio of
the total Indebtedness of the Borrower and its Subsidiaries to such EBITDA did
not exceed 4.75:1.00;
(q) PROJECTIONS. Projections in form and substance satisfactory to the
Agent for the Borrower and its Subsidiaries for the period from 2004 through
2008, including projections on a quarter by quarter basis for 2004 and on an
annual basis thereafter;
(r) TERMINATION OF SQRC OBLIGATIONS. Evidence reasonably satisfactory to
it that (i) all of the SQRC Obligations shall have been terminated, fully
discharged and satisfied and shall be of no further force or effect, and (ii)
all costs, fees and expenses, including, without limitation, all termination
fees, which costs, fees and expenses shall not have exceeded $100,000 in the
aggregate, have been paid in full;
(s) CONVERSION OF XXXXXXX BRIDGE NOTES. Evidence reasonably satisfactory
to it, along with a written acknowledgment from the Sponsor certifying, that the
Xxxxxxx Bridge Notes shall have been converted in full into common stock of the
Borrower in accordance with the terms thereof, shall have been fully discharged
and satisfied and shall no longer remain outstanding;
(t) CERTIFIED COPIES. Copies of the High Yield Unsecured Documents, the
Xxxxxx Non-Competition Agreement, the Consulting Agreement and the Merger
Documents, certified by a Responsible Officer of the Borrower; and
(u) OTHER DOCUMENTS. Such other approvals, opinions, documents or
materials as the Agent may reasonably request.
2.2 CONDITIONS TO ALL BORROWINGS. The obligation of each Lender to make
any Loan and of the Agent to issue any Lender Letter of Credit or Letter of
Credit Participation Agreement, or to continue a Loan as, or convert any Loan
to, a LIBOR Rate Loan, is subject to the satisfaction of the following
conditions precedent on the relevant Borrowing date, continuation date or
Conversion Date:
(a) NOTICE OF BORROWING OR CONTINUATION/CONVERSION. The Agent shall have
received (with, in the case of the initial Loan only, a copy for each Lender) a
Notice of Borrowing or a Notice of Continuation/Conversion, as applicable, in
accordance with Section 1.5 or Section 1.6;
(b) CONTINUATION OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties contained in this Agreement that are made by the Borrower and the
representations and
15
warranties contained in the other Loan Documents and in the Related Agreements
that are made by the Borrower and each of its Subsidiaries party thereto shall
be true and correct in all material respects on and as of such Borrowing date,
continuation date or Conversion Date with the same effect as if made on and as
of such Borrowing date, continuation date or Conversion Date (except to the
extent such representations and warranties (i) expressly refer to an earlier
date, in which case they shall be true and correct as of such earlier date, (ii)
are not true and correct due to events or conditions, the occurrence or
existence of which are not prohibited by this Agreement or the other Loan
Documents and which do not, in and of themselves, constitute a Default or an
Event of Default, or (iii) are not true and correct as a result of disclosures
made in writing to, and approved by, the Agent and Lenders in connection with
Permitted Acquisitions);
(c) NO EXISTING DEFAULT. No Default or Event of Default shall exist or
shall result from such Borrowing or continuation or conversion; and
(d) PERMITTED ACQUISITIONS. To the extent the proceeds of any Loan are
used to finance a Permitted Acquisition, Borrower shall have complied with the
conditions included in Section 2.3 and the definition of "Permitted Acquisition"
contained in Section 11.1 hereof on or prior to the disbursement of such Loan.
Each Notice of Borrowing and Notice of Continuation/Conversion submitted by the
Borrower hereunder shall constitute a representation and warranty by the
Borrower hereunder, as of the date of each such notice or application and as of
the date of each Borrowing or continuation or conversion, as applicable, that
the conditions in Section 2.2 are satisfied.
2.3 CONDITIONS TO CERTAIN LOANS AND ACQUISITIONS. The consummation of any
Permitted Acquisition by any Subsidiaries of the Borrower and, in the event the
proceeds of the Revolving Loan are to be used to finance all or a portion of the
purchase price of a Permitted Acquisition, the obligations of each Lender to
make such Loan, in each case shall be subject to the satisfaction of the
following conditions precedent on the relevant Borrowing date:
(a) EVIDENCE OF PERFECTED FIRST PRIORITY SECURITY INTEREST. With respect
to the Target acquired, and prior to or simultaneously with the consummation of
such Acquisition and the funding of such Loan, the Agent shall have been
granted, for the benefit of Agent and the Lenders, a first priority Lien on and
security interest in such Target thereof, subject only to Permitted Liens, and
shall have received, without limitation, (i) the items described in subsection
2.1(d)(ii) and Section 4.12, and (ii) duly executed uniform commercial code
financing statements or amendments to existing financing statements with respect
to such Target, in form and substance reasonably satisfactory to the Agent and
which, upon filing, shall perfect the security interest of the Agent, for the
benefit of Agent and the Lenders, in such Property to the extent such security
interest can be perfected by filing such financing statements. In the event real
Property is being acquired in connection with such Acquisition, prior to or
simultaneously with the funding of such Loan, the Agent shall have received (x)
to the extent not encumbered with a Lien permitted under subsection 5.1(h), a
fully executed Mortgage, in form and substance reasonably satisfactory to the
Agent together with an A.L.T.A. lender's title insurance policy issued by a
title insurer reasonably satisfactory to the Agent, in form and substance and in
an amount reasonably satisfactory to the Agent insuring that the Mortgage is a
valid and enforceable first priority Lien on the respective Property, free and
clear of all defects, encumbrances and
16
Liens other than Permitted Liens, (y) to the extent not encumbered with a Lien
permitted under subsection 5.1(h), then current A.L.T.A. surveys, certified to
the Agent by a licensed surveyor sufficient to allow the issuer of the lender's
title insurance policy to issue such policy without a survey exception and (z)
an environmental site assessment prepared by a qualified firm reasonably
acceptable to the Agent and the Required Lenders, in form and substance
reasonably satisfactory to the Agent and the Required Lenders.
(b) APPROVAL. Such Acquisition is a Permitted Acquisition.
ARTICLE III - REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Agent and each Lender that
the following are, and after giving effect to the Related Transactions will be,
true, correct and complete:
3.1 CORPORATE EXISTENCE AND POWER. The Borrower and each of its
Subsidiaries:
(a) is a corporation, limited liability company or limited partnership,
as applicable, duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or formation, as applicable;
(b) has the power and authority and all governmental licenses,
authorizations, consents and approvals to own its assets, carry on its business
and execute, deliver, and perform its obligations under, the Loan Documents and
the Related Agreements to which it is a party;
(c) is duly qualified as a foreign corporation, limited liability company
or limited partnership, as applicable, and licensed and in good standing, under
the laws of each jurisdiction where its ownership, lease or operation of
Property or the conduct of its business requires such qualification or license;
and
(d) is in compliance with all Requirements of Law;
except, in each case referred to in clause (c) or clause (d), to the extent that
the failure to do so would not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect. Without limiting
the generality of the foregoing, neither Borrower nor any of its Subsidiaries
(i) is a blocked person described in Section 1 of Executive Order 13224 of the
September 23, 2001 Blocking Property and Prohibiting Transaction With Persons
Who Commit and Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49049
(2001)), or (ii) is engaged in transactions with any Person or country to the
extent restricted by the Trading with the Enemy Act, as amended.
3.2 CORPORATE AUTHORIZATION; NO CONTRAVENTION.
(a) The execution, delivery and performance by the Borrower of this
Agreement, and the Borrower and its Subsidiaries of any other Loan Document and
Related Agreement to which any of such Persons is party, have been duly
authorized by all necessary action, and do not and will not:
(i) contravene the terms of any of such Person's Organization
Documents;
17
(ii) conflict with or result in any material breach or
contravention of, or result in the creation of any Lien under, any
document evidencing any material Contractual Obligation to which such
Person is a party or any order, injunction, writ or decree of any
Governmental Authority to which such Person or its Property is subject;
or
(iii) violate any material Requirement of Law in any material
respect.
(b) SCHEDULE 3.2 sets forth the authorized equity securities of the
Borrower and each of its Subsidiaries. All issued and outstanding equity
securities of the Borrower and each of its Subsidiaries are duly authorized and
validly issued, fully paid, non-assessable, and free and clear of all Liens
other than, with respect to the equity securities of the Borrower's
Subsidiaries, those in favor of the Agent, for the benefit of the Agent and
Lenders, and such securities were issued in compliance with all applicable state
and federal laws concerning the issuance of securities. All of the issued and
outstanding equity securities of Woodcraft are owned by the Borrower. All of the
issued and outstanding equity securities of Primewood and Brentwood are owned by
Woodcraft. All of the issued and outstanding equity securities of Borrower are
owned by the Persons and in the amounts set forth on SCHEDULE 3.2. Except as set
forth on SCHEDULE 3.2, there are no pre-emptive or other outstanding rights,
options, warrants, conversion rights or other similar agreements or
understandings for the purchase or acquisition of any shares of capital stock or
other securities of any such entity.
3.3 GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, the Borrower or
any of its Subsidiaries of this Agreement, any other Loan Document or any
Related Agreement except (a) for recordings and filings in connection with the
Liens granted to the Agent under the Collateral Documents, (b) those obtained or
made on or prior to the Closing Date and (c) in the case of any Related
Agreement, those which, if not obtained or made, would not reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect.
3.4 BINDING EFFECT. This Agreement and each other Loan Document and
Related Agreement to which the Borrower or any of its Subsidiaries is a party
constitutes the legal, valid and binding obligations of the Borrower and each
such Subsidiary, enforceable against such Person in accordance with their
respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors'
rights generally or by equitable principles relating to enforceability.
3.5 LITIGATION. Except as specifically disclosed in SCHEDULE 3.5, there
are no actions, suits, proceedings, claims or disputes pending, or to the best
knowledge of the Borrower, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, against the Borrower, any of
its Subsidiaries or any of their respective Property which:
(a) purport to affect or pertain to this Agreement, any other Loan
Document or any Related Agreement, or any of the transactions contemplated
hereby or thereby; or
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(b) if determined adversely to the Borrower or any of its Subsidiaries,
could reasonably be expected to result in equitable relief or monetary
judgment(s), individually or in the aggregate, in excess of $800,000.
No injunction, writ, temporary restraining order or any order of any nature has
been issued by any court or other Governmental Authority purporting to enjoin or
restrain the execution, delivery or performance of this Agreement, any other
Loan Document or any Related Agreement, or directing that the transactions
provided for herein or therein not be consummated as herein or therein provided.
3.6 NO DEFAULT. No Default or Event of Default exists or would result
from the incurring of any Obligations by the Borrower or the grant or perfection
of the Agent's Liens on the Collateral or the consummation of the Related
Transactions. Neither the Borrower nor any of its Subsidiaries is in default
under or with respect to any Contractual Obligation in any respect which,
individually or together with all such defaults, would reasonably be expected to
have a Material Adverse Effect or that would, if such default had occurred after
the Closing Date, create an Event of Default under subsection 7.1(e).
3.7 ERISA COMPLIANCE.
(a) SCHEDULE 3.7 lists all Qualified Plans and Multiemployer Plans. The
Borrower and each of its Subsidiaries is in compliance in all material respects
with all requirements of each Plan, and each Plan complies in all material
respects, and is operated in compliance in all material respects, with all
applicable provisions of law. The Borrower is not aware, after due inquiry, of
any item of non-compliance which could reasonably be expected to result in the
loss of Plan qualification or tax-exempt status, or give rise to a material
excise tax or other penalty imposed by a Governmental Authority. No material
proceeding, claim, lawsuit and/or investigation is pending concerning any Plan.
All required contributions have been and will be made in accordance with the
provisions of each Qualified Plan and Multiemployer Plan, and with respect to
the Borrower or any ERISA Affiliate, there are, have been and will be no
material Unfunded Pension Liabilities or Withdrawal Liabilities.
(b) No ERISA Event has occurred or is expected to occur with respect to
any Qualified Plan, Multiemployer Plan or Plan.
(c) Members of the Controlled Group currently comply and have complied in
all material respects with the notice and continuation coverage requirements of
Section 4980B of the Code.
3.8 USE OF PROCEEDS; MARGIN REGULATIONS. The proceeds of the Loans are
intended to be and shall be used solely for the purposes set forth in and
permitted by Section 4.10, and are intended to be and shall be used in
compliance with Section 5.8. Neither the Borrower nor any of its Subsidiaries is
generally engaged in the business of purchasing or selling Margin Stock or
extending credit for the purpose of purchasing or carrying Margin Stock.
Proceeds of the Loans shall not be used for the purpose of purchasing or
carrying Margin Stock.
3.9 TITLE TO PROPERTY. The Borrower and each of its Subsidiaries have
good record and marketable title in fee simple to, or valid leasehold interests
in, all real Property necessary or
19
used in the ordinary conduct of their respective businesses, except for
Permitted Liens. As of the Closing Date, none of the Property of the Borrower or
any of its Subsidiaries is subject to any Liens, other than Permitted Liens.
3.10 TAXES. The Borrower and its Subsidiaries have filed all Federal and
other material tax returns and reports required to be filed, and have paid all
Federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their Property, income or assets
otherwise due and payable, except those which are being contested in good faith
by appropriate proceedings diligently prosecuted and for which adequate reserves
have been provided in accordance with GAAP and no notice of Lien has been filed
or recorded. There is no proposed tax assessment against the Borrower or any of
its Subsidiaries which would, if the assessment were made, either individually
or in the aggregate, have a Material Adverse Effect.
3.11 FINANCIAL CONDITION.
(a) Each of (i) the audited consolidated balance sheet of Woodcraft and
its Subsidiaries for its 2002 fiscal year, and the related audited consolidated
statements of income or operations, shareholders' equity and cash flows for the
fiscal year ended on that date and (ii) the unaudited interim consolidated
balance sheet of the Borrower and its Subsidiaries dated December 31, 2003 and
the related unaudited consolidated statements of income, shareholders' equity
and cash flows for the twelve (12) months then ended:
(x) were prepared in accordance with GAAP consistently applied
throughout the respective periods covered thereby, except as otherwise
expressly noted therein, subject to, in the case of the unaudited interim
financial statements, normal year-end adjustments and the lack of
footnote disclosures; and
(y) present fairly in all material respects the consolidated
financial condition of Borrower and its Subsidiaries as of the dates
thereof and results of operations for the periods covered thereby.
(b) Since December 31, 2002, there has been no Material Adverse Effect.
(c) Borrower and its Subsidiaries have no Indebtedness other than
Indebtedness permitted pursuant to Section 5.5 and have no Contingent
Obligations other than Contingent Obligations permitted pursuant to Section 5.9.
3.12 ENVIRONMENTAL MATTERS.
(a) The ongoing operations of the Borrower and each of its Subsidiaries
comply in all respects with all Environmental Laws, except those for which
non-compliance which would not (if enforced in accordance with applicable law)
reasonably be expected to result in, either individually or in the aggregate, a
Material Adverse Effect.
(b) The Borrower and each of its Subsidiaries have obtained all licenses,
permits, authorizations and registrations required under any Environmental Law
("Environmental Permits") and necessary for their respective Ordinary Courses of
Business, all such
20
Environmental Permits are in good standing, and the Borrower and each of its
Subsidiaries are in compliance with all material terms and conditions of such
Environmental Permits, except where the failure to obtain, to maintain in good
standing, or to be in compliance with such Environmental Permits would not
reasonably be expected to result in material liability to the Borrower or any of
its Subsidiaries and could not reasonably be expected to result in, either
individually or in the aggregate, a Material Adverse Effect.
(c) None of the Borrower, any of its Subsidiaries or any of their
respective present Property or operations, is subject to any outstanding written
order from or agreement with any Governmental Authority, nor subject to any
judicial or docketed administrative proceeding, respecting any Environmental
Law, Environmental Claim or Hazardous Material.
(d) There are no Hazardous Materials or other conditions or circumstances
existing with respect to any Property, or arising from operations prior to the
Closing Date, of the Borrower or any of its Subsidiaries that would reasonably
be expected to result, either individually or in the aggregate, in a Material
Adverse Effect. In addition, neither the Borrower nor any of its Subsidiaries
has any underground storage tanks (i) that are not properly registered or
permitted under applicable Environmental Laws, or (ii) that are leaking or
disposing of Hazardous Materials.
3.13 LOAN DOCUMENTS. All representations and warranties of the Borrower,
its Subsidiaries and any other party to any Loan Document (other than the Agent
and/or any Lender) contained in the Loan Documents are true and correct in all
material respects.
3.14 REGULATED ENTITIES. None of the Borrower, any Person controlling the
Borrower, or any Subsidiary of the Borrower, is (a) an "investment company"
within the meaning of the Investment Company Act of 1940; or (b) subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, any state public utilities code, or any
other Federal or state statute or regulation limiting its ability to incur
Indebtedness.
3.15 SOLVENCY. The Borrower and each of its Subsidiaries, individually,
is, and the Borrower and each of its Subsidiaries, on a consolidated basis, are,
Solvent.
3.16 LABOR RELATIONS. There are no strikes, lockouts or other labor
disputes against the Borrower or any of its Subsidiaries, or, to the best of the
Borrower's knowledge, threatened against or affecting the Borrower or any of its
Subsidiaries, in any case which would reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect and no significant
unfair labor practice complaint is pending against the Borrower or any of its
Subsidiaries or, to the best knowledge of the Borrower, threatened against any
of them before any Governmental Authority in any case which would reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect.
3.17 COPYRIGHTS, PATENTS, TRADEMARKS AND LICENSES, ETC. SCHEDULE 3.17
identifies all United States and foreign patents, trademarks, material service
marks, material trade names and registered copyrights, and all registrations and
applications for registration thereof and all licenses thereof, owned or held by
the Borrower and its Subsidiaries on the Closing Date after
21
giving effect to the Related Transactions, and identifies the jurisdictions in
which such registrations and applications have been filed. Except as otherwise
disclosed in SCHEDULE 3.17, as of the Closing Date, the Borrower and its
Subsidiaries are the sole beneficial owners of, or have the right to use, free
from any restrictions, claims, rights encumbrances or burdens, all intellectual
property, including the intellectual property identified on SCHEDULE 3.17, and
all other processes, designs, formulas, computer programs, computer software
packages, trade secrets, inventions, product manufacturing instructions,
technology, research and development, know-how and all other intellectual
property that are necessary for the operation of the Borrower's and its
Subsidiaries' businesses as being operated on the Closing Date after giving
effect to the Related Transactions. Each patent, trademark, service xxxx, trade
name, copyright and license listed on SCHEDULE 3.17 is in full force and effect
except to the extent the failure to be in effect will not and would not
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect. Except as set forth in SCHEDULE 3.17, to the best
knowledge of the Borrower, as of the Closing Date (a) none of the present or
contemplated products or operations of the Borrower or its Subsidiaries
infringes any patent, trademark, service xxxx, trade name, copyright, license of
intellectual property or other right owned by any other Person, and (b) there is
no pending or threatened claim or litigation against or affecting the Borrower
or any of its Subsidiaries contesting the right of any of them to manufacture,
process, sell or use any such product or to engage in any such operation except
for claims and/or litigation which would not reasonably be expected to have a
Material Adverse Effect. None of the trademark registrations set forth on
SCHEDULE 3.17 is an "intent-to-use" registration.
3.18 SUBSIDIARIES. The Borrower has no Subsidiaries or equity investments
in any other corporation or entity other than those specifically disclosed in
SCHEDULE 3.2.
3.19 BROKERS' FEES; TRANSACTION FEES. Neither the Borrower nor any of its
Subsidiaries has any obligation to any Person in respect of any finder's,
broker's or investment banker's fee in connection with the transactions
contemplated hereby.
3.20 INSURANCE. The Borrower and each of its Subsidiaries and its
Property are insured with financially sound and reputable insurance companies
which are not Affiliates of the Borrower, in such amounts, with such deductibles
and covering such risks as are customarily carried by companies engaged in
similar businesses and owning similar Property in localities where the Borrower
or its Subsidiaries operate. A true and complete listing of such insurance,
including issuers, coverages and deductibles, has been provided to the Agent.
3.21 FULL DISCLOSURE. None of the representations or warranties made by
the Borrower or any of its Subsidiaries in the Loan Documents as of the date
such representations and warranties are made or deemed made, and none of the
statements contained in each exhibit, report, statement or certificate furnished
by or on behalf of the Borrower or any of its Subsidiaries in connection with
the Loan Documents (including the offering and disclosure materials, if any,
delivered by or on behalf of the Borrower to the Lenders prior to the Closing
Date), contains any untrue statement of a material fact or omits any material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they are made, not misleading
as of the time when made or delivered.
22
3.22 REPRESENTATIONS AND WARRANTIES INCORPORATED FROM RELATED AGREEMENTS.
As of the Closing Date, each of the representations and warranties made in each
of the Related Agreements by each of the parties thereto is true and correct in
all material respects, and such representations and warranties are hereby
incorporated herein by reference with the same effect as though set forth in
their entirety herein, as qualified therein, except to the extent that such
representations or warranties relate to a specific date, in which case such
representations and warranties shall be true as of such earlier date.
3.23 ACTIVITIES OF BORROWER. The Borrower was formed for the sole purpose
of acquiring and holding all of the outstanding equity securities of Woodcraft
and, except for the foregoing, the Borrower has conducted no business
activities, entered into no transactions, incurred no liability and taken no
actions, directly or indirectly, that would have violated Section 5.12 of this
Agreement.
3.24 HIGH YIELD UNSECURED DOCUMENTS. The Obligations are permitted and
constitute "Senior Indebtedness" under the terms of the High Yield Unsecured
Documents. The execution, delivery and performance by the Borrower of this
Agreement, and by the Borrower and its Subsidiaries of any other Loan Document
and Related Agreement to which such Person is party, do not and will not
conflict with or result in any material breach or contravention of, or result in
the creation of any Lien or default or event of default under, any of the High
Yield Unsecured Documents. None of the High Yield Unsecured Documents prohibits
or otherwise restricts in any manner the making of any payments hereunder by the
Borrower or any of its Subsidiaries. The High Yield Unsecured Offering was made
in compliance with all Requirements of Law, including, without limitation, the
Trust Indenture Act of 1939 (15 U.S.C. xx.xx. 77aaa-77bbbb), as amended.
3.25 KENTUCKY REIMBURSEMENT OBLIGATIONS. Each of the Kentucky Cash
Collateral Account, the Kentucky Letter of Credit and the Kentucky Reimbursement
Agreement has been closed, terminated and/or canceled, as the case may be, and
is of no further force or effect, and the Borrower and its Subsidiaries have
fully satisfied and discharged all of the Kentucky Reimbursement Obligations.
ARTICLE IV - AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that, so long as any Lender shall have
any Commitment hereunder, or any Loan or other Obligation (other than contingent
indemnification Obligations to the extent no claim giving rise thereto has been
asserted) shall remain unpaid or unsatisfied, unless the Required Lenders waive
compliance in writing:
4.1 FINANCIAL STATEMENTS. The Borrower shall maintain, and shall cause
each of its Subsidiaries to maintain, a system of accounting established and
administered in accordance with sound business practices to permit the
preparation of financial statements in conformity with GAAP (PROVIDED that
quarterly financial statements shall not be required to have footnote disclosure
and shall be subject to normal year-end adjustments). The Borrower shall deliver
to the Agent and each Lender in form and detail reasonably satisfactory to the
Agent and the Required Lenders:
23
(a) as soon as available, but not later than ninety (90) days after the
end of each fiscal year, a copy of the audited consolidated and consolidating
balance sheets of Borrower and its Subsidiaries as at the end of such year and
the related consolidated and consolidating statements of income or operations,
shareholders' equity and cash flows for such fiscal year, setting forth in each
case in comparative form the figures for the previous fiscal year, and
accompanied by the unqualified opinion of any "Big Four" or other
nationally-recognized independent public accounting firm reasonably acceptable
to the Agent which report shall state that such consolidated financial
statements present fairly in all material respects the financial position for
the periods indicated in conformity with GAAP applied on a basis consistent with
prior years;
(b) as soon as available, but not later than thirty (30) days after the
end of each fiscal quarter of each year, a copy of the unaudited consolidated
and consolidating balance sheets of Borrower and its Subsidiaries, and the
related consolidated and consolidating statements of income, shareholders'
equity and cash flows as of the end of such quarter and for the portion of the
fiscal year then ended, all certified on behalf of the Borrower by an
appropriate Responsible Officer of the Borrower as being complete and correct
and fairly presenting, in accordance with GAAP, the financial position and the
results of operations of the Borrower and its Subsidiaries, subject to normal
year-end adjustments and absence of footnote disclosure.
4.2 CERTIFICATES; BORROWING BASE CERTIFICATES; OTHER INFORMATION. The
Borrower shall furnish to the Agent and each Lender:
(a) concurrently with the delivery of the annual financial statements
referred to in subsection 4.1(a) above, a certificate of the independent
certified public accountants reporting on such financial statements stating that
in making the examination necessary therefor no knowledge was obtained of any
Default or Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements referred
to in subsections 4.1(a) and 4.1(b) above, a fully and properly completed
Compliance Certificate in the form of EXHIBIT 4.2(B), certified on behalf of the
Borrower by a Responsible Officer of the Borrower;
(c) promptly after the same are sent, copies of all financial statements
and material reports which the Borrower sends to its shareholders or other
equity holders, as applicable, generally; and promptly after the same are filed,
copies of all financial statements and regular, periodic or special reports
which the Borrower may make to, or file with, the Securities and Exchange
Commission or any successor or similar Governmental Authority;
(d) as soon as available and in any event within ten (10) Business Days
after the end of each calendar month, as otherwise required under Section 5.2
and at such other times as the Agent may reasonably require, a Borrowing Base
Certificate, certified on behalf of the Borrower by a Responsible Officer of the
Borrower, setting forth the "Borrowing Base" of the Borrower as at the end of
the most-recently ended fiscal month or as at such other date as the Agent may
reasonably require;
24
(e) (i) together with each delivery of financial statements pursuant to
subsection 4.1(a) and subsection 4.1(b), a management report, in reasonable
detail, signed by the chief financial officer of the Borrower, describing the
operations and financial condition of the Borrower and its Subsidiaries for the
quarter and the portion of the fiscal year then ended (or for the fiscal year
then ended in the case of annual financial statements), it being understood that
such report may be in the form of a "Management's Discussion and Analysis of
Financial Condition and Results of Operation", as required to be delivered
pursuant to the High Yield Unsecured Indenture, and (ii) together with each
delivery of financial statements pursuant to subsection 4.1(b), a report setting
forth in comparative form the corresponding figures for the corresponding
periods of the previous fiscal year and the corresponding figures from the most
recent projections for the current fiscal year delivered pursuant to subsection
4.2(g) and discussing the reasons for any significant variations;
(f) upon the request of the Agent, at any time if an Event of Default
shall have occurred and be continuing but otherwise not more often than once a
year, the Borrower will, at the Borrower's expense, obtain and deliver to the
Agent a report of an independent collateral auditor satisfactory to the Agent
with respect to the Accounts and Inventory, 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;
(g) concurrently with delivery thereof to the Trustee, copies of any and
all notices, certificates, statements, reports and other deliveries required to
be made pursuant to Section 4.02 of the High Yield Unsecured Indenture,
including, without limitation, all reports required to be filed pursuant to
Sections 13 and 15(d) of the Securities Exchange Act of 1934, as amended, and
Section 4.14 of the High Yield Unsecured Indenture, including, without
limitation, all compliance certificates required to be delivered pursuant
thereto;
(h) as soon as available and in any event no later than thirty (30) days
after the last day of each fiscal year of the Borrower, projections of the
Borrower's and its Subsidiaries' consolidated and consolidating financial
performance for the forthcoming fiscal year on a quarterly basis, which
projections shall include balance sheets and statements of income, shareholders'
equity and cash flows;
(i) annually, concurrently with the Borrower's delivery of the
projections under subsection 4.2(h), the Borrower shall supplement in writing
and deliver to the Agent revisions of and supplements to the Schedules hereto
related to Article III hereof to the extent necessary to disclose new or changed
facts or circumstances after the Closing Date; PROVIDED, that delivery or
receipt of such subsequent disclosure shall not constitute a waiver by the Agent
or any Lender or a cure of any Default or Event of Default resulting in
connection with the matters disclosed;
(j) promptly upon receipt thereof, copies of any material reports
submitted by the Borrower's certified public accountants in connection with each
annual, interim or special audit or review of any type of the financial
statements or internal control systems of the Borrower made by such accountants,
including any comment letters submitted by such accountants to management of the
Borrower in connection with their services;
25
(k) from time to time, if the Agent reasonably determines that obtaining
appraisals is necessary in order for the Agent or any Lender to comply with
applicable laws or regulations, and at any time if a Default or an Event of
Default shall have occurred and be continuing, the Agent may, or may require the
Borrower to, in either case at the Borrower's expense, obtain appraisals in form
and substance and from appraisers reasonably satisfactory to the Agent stating
the then current fair market value of all or any portion of the real or personal
property of the Borrower and any of its Subsidiaries; and
(l) promptly, such additional business, financial, corporate affairs,
perfection certificates and other information as the Agent may from time to time
reasonably request.
4.3 NOTICES. The Borrower shall notify promptly the Agent and each Lender
of each of the following (and in no event later than three (3) Business Days
after a Responsible Officer becoming aware thereof):
(a) the occurrence or existence of any Default or Event of Default, or
any event or circumstance that would reasonably be expected to result in a
Default or Event of Default;
(b) any breach or non-performance of, or any default under, any
Contractual Obligation of the Borrower or any of its Subsidiaries, or any
violation of, or non-compliance with, any Requirement of Law, which would
reasonably be expected to result, either individually or in the aggregate, in a
Material Adverse Effect, including a description of such breach,
non-performance, default, violation or non-compliance and the steps, if any, the
Borrower or any such Subsidiary has taken, is taking or proposes to take in
respect thereof;
(c) any dispute, litigation, investigation, proceeding or suspension
which may exist at any time between the Borrower or any of its Subsidiaries and
any Governmental Authority which would reasonably be expected to result, either
individually or in the aggregate, in a Material Adverse Effect;
(d) the commencement of, or any material development in, any litigation
or proceeding affecting the Borrower or any of its Subsidiaries in which: (i)
the amount of damages claimed is $800,000 (or its equivalent in any other
currency or currencies) or more, (ii) injunctive or similar relief is sought and
which, if adversely determined, would reasonably be expected to have a Material
Adverse Effect, or (iii) the relief sought is an injunction or other stay of the
performance of this Agreement, any Loan Document or any Related Agreement;
(e) any of the following if the same would reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect: (i)
any enforcement, cleanup, removal or other governmental or regulatory actions
instituted, completed or threatened against the Borrower, any of its
Subsidiaries or any of its Property pursuant to any applicable Environmental
Laws, (ii) any other Environmental Claims, and (iii) any environmental or
similar condition on any real property adjoining the Property of the Borrower or
any of its Subsidiaries that could reasonably be anticipated to cause the
Borrower's or any such Subsidiary's Property or any part thereof to be subject
to any material restrictions on the ownership, occupancy, transferability or use
of such Property under any Environmental Laws;
26
(f) any of the following if the same would reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect,
together with a copy of any notice with respect to such event that may be
required to be filed with a Governmental Authority and any notice delivered by a
Governmental Authority to the Borrower or any member of its Controlled Group
with respect to such event:
(i) an ERISA Event;
(ii) the adoption of any new Qualified Plan that is subject to
Title IV of ERISA or Section 412 of the Code by any member of the
Controlled Group;
(iii) the adoption of any amendment to a Qualified Plan that is
subject to Title IV of ERISA or Section 412 of the Code, if such
amendment results in a material increase in benefits or unfunded
liabilities; or
(iv) the commencement of contributions by any member of the
Controlled Group to any Multiemployer Plan or any Qualified Plan that is
subject to Title IV of ERISA or Section 412 of the Code;
(g) any Material Adverse Effect subsequent to the date of the most recent
audited financial statements of the Borrower and its Subsidiaries delivered to
the Agent and Lenders pursuant to this Agreement;
(h) any material change in accounting policies or financial reporting
practices by the Borrower or any of its Subsidiaries;
(i) any labor controversy resulting in or threatening to result in any
strike, work stoppage, boycott, shutdown or other labor disruption against or
involving the Borrower or any of its Subsidiaries if the same would reasonably
be expected to have, either individually or in the aggregate, a Material Adverse
Effect;
(j) the creation, establishment or acquisition of any Subsidiary or the
issuance by the Borrower of any capital stock or warrant option or similar
agreement in respect thereof;
(k) the occurrence of a default, an event of default or a "Change of
Control" under any of the High Yield Unsecured Documents; and
(l) promptly from time to time, copies of any notices or other deliveries
from time to time made or received by the Borrower or any of its Subsidiaries
under or pursuant to the Related Agreements, including, without limitation, any
working capital or other purchase price adjustments, and any indemnification
claims and disbursements of escrowed funds under the Merger Agreement or any
other Related Agreement;
Each notice pursuant to this Section shall be accompanied by a written statement
by a Responsible Officer of the Borrower, setting forth reasonable details of
the occurrence referred to therein, and stating what action the Borrower
proposes to take with respect thereto and at what time. Each notice under
subsection 4.3(a) shall describe with reasonable particularity any and all
27
clauses or provisions of this Agreement or other Loan Document that have been
breached or violated.
4.4 PRESERVATION OF CORPORATE EXISTENCE, ETC. The Borrower shall, and
shall cause each of its Subsidiaries to:
(a) preserve and maintain in full force and effect its organizational
existence and good standing under the laws of its state or jurisdiction of
incorporation, organization or formation, as applicable, except in connection
with any transaction permitted by Section 5.3;
(b) preserve and maintain in full force and effect all rights,
privileges, qualifications, permits, licenses and franchises necessary in the
normal conduct of its business except in connection with transactions permitted
by Section 5.3 and sales of assets permitted by Section 5.2 and except as would
not reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect;
(c) use its reasonable efforts, in the Ordinary Course of Business, to
preserve its business organization and preserve the goodwill and business of the
customers, suppliers and others having material business relations with it,
except where failure to do so would not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect; and
(d) preserve or renew all of its registered trademarks, trade names and
service marks, the non-preservation of which would reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect.
4.5 MAINTENANCE OF PROPERTY. The Borrower shall maintain, and shall cause
each of its Subsidiaries to maintain, and preserve all of their respective
Property which are used or useful in their respective businesses in good working
order and condition, ordinary wear and tear and casualty excepted and shall make
all necessary repairs thereto and renewals and replacements thereof except where
the failure to do so would not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.
4.6 INSURANCE. The Borrower shall maintain, and shall cause each of its
Subsidiaries to maintain, with financially sound and reputable independent
insurers, insurance with respect to their respective Property and businesses
against loss or damage of the kinds customarily insured against by Persons
engaged in the same or similar businesses, of such types and in such amounts as
are customarily carried under similar circumstances by such other Persons,
including workers' compensation insurance, public liability and property and
casualty insurance, which amounts shall not be reduced by the Borrower or any of
its Subsidiaries in the absence of thirty (30) days' prior notice to the Agent
and business interruption insurance in an amount not less than projected EBITDA
(EBITDA is computed in the manner set forth in EXHIBIT 4.2(B)) for a period of
not less than six (6) months and, in any event, in an amount not less than
$12,500,000. All property damage and casualty insurance shall name the Agent as
loss payee/mortgagee, all liability insurance shall name the Agent and the
Lenders as additional insureds and all business interruption insurance shall
name the Agent as assignee. Upon request of the Agent or any Lender, the
Borrower shall furnish the Agent, with sufficient copies for each Lender, at
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reasonable intervals (but not more than once per calendar year), a certificate
of a Responsible Officer of the Borrower (and, if requested by the Agent, any
insurance broker of the Borrower) setting forth the nature and extent of all
insurance maintained by the Borrower and its Subsidiaries in accordance with
this Section 4.6. Unless the Borrower provides the Agent with evidence of the
insurance coverage required by this Agreement, the Agent may purchase insurance
at the Borrower's expense to protect the Agent's and Lenders' interests in the
Borrower's and its Subsidiaries' Property; PROVIDED, that the Agent shall
provide notice to the Borrower of its intentions to purchase such insurance so
long as no Default or Event of Default has occurred and is continuing. This
insurance may, but need not, protect Borrower's and its Subsidiaries' interests.
The coverage that the Agent purchases may not pay any claim that the Borrower or
any of its Subsidiaries makes or any claim that is made against the Borrower or
any of its Subsidiaries in connection with said Property. The Borrower may later
cancel any insurance purchased by the Agent, but only after providing the Agent
with evidence that the Borrower has obtained insurance as required by this
Agreement. If the Agent purchases insurance, the Borrower will be responsible
for the costs thereof, including interest and any other charges the Agent may
impose in connection with the placement of insurance, until the effective date
of the cancellation or expiration of such insurance. The costs of such insurance
may be added to the Obligations. The costs of the insurance may be more than the
cost of insurance the Borrower may be able to obtain on its own. Notwithstanding
anything herein to the contrary, if the Agent shall directly receive any
proceeds of any business interruption insurance policy by reason of this
Agreement, then, so long as no Default or Event of Default has occurred and is
continuing on the date such proceeds are received by the Agent, or would result
therefrom, the Agent shall disburse such proceeds promptly to the Borrower;
PROVIDED, that any such disbursement of such proceeds to the Borrower shall not
be deemed, or operate as, a waiver or alteration of or modification to any of
the obligations or covenants of the Borrower or any of its Subsidiaries under
this Agreement or any other Loan Document and such proceeds received by the
Borrower shall be used only for purposes otherwise permitted hereunder.
4.7 PAYMENT OF OBLIGATIONS. The Borrower shall, and shall cause each of
its Subsidiaries to, pay, discharge and perform as the same shall become due and
payable or required to be performed, all of their respective obligations and
liabilities, including, without limitation:
(a) all tax liabilities, assessments and governmental charges or levies
upon them or their property or assets, unless the same are being contested in
good faith by appropriate proceedings diligently prosecuted which stay the
enforcement of any Lien and for which adequate reserves in accordance with GAAP
are being maintained by the Borrower or such Subsidiaries;
(b) all lawful claims which, if unpaid, would by law become a Lien upon
their Property unless the same are being contested in good faith by appropriate
proceedings diligently prosecuted which stay the imposition or enforcement of
the Lien and for which adequate reserves in accordance with GAAP are being
maintained by the Borrower;
(c) all Indebtedness, as and when due and payable, but subject to any
subordination provisions contained herein or in any instrument or agreement
evidencing such Indebtedness; and
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(d) the performance of all obligations under any Contractual Obligation
to which the Borrower or any of its Subsidiaries is bound, or to which it or any
of its Property is subject, including the Related Agreements, except where the
failure to perform would not reasonably be expected to have, either individually
or in the aggregate, a Material Adverse Effect.
4.8 COMPLIANCE WITH LAWS. The Borrower shall comply, and shall cause each
of its Subsidiaries to comply, in all material respects, with all Requirements
of Law of any Governmental Authority having jurisdiction over it or its business
(including, without limitation, all Environmental Laws), except (a)(i) such as
may be contested in good faith by appropriate proceedings diligently prosecuted
without risk of loss of any Collateral, (ii) as to which a bona fide dispute
exists, and (iii) for which appropriate reserves have been established on the
Borrower's financial statements or (b) where the failure to comply would not
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.
4.9 INSPECTION OF PROPERTY AND BOOKS AND RECORDS. The Borrower shall
maintain and shall cause each of its Subsidiaries to maintain proper books of
record and account, in which full, true and correct entries in conformity with
GAAP consistently applied shall be made of all financial transactions and
matters involving the assets and business of the Borrower and its Subsidiaries.
The Borrower shall permit, and shall cause each of its Subsidiaries to permit:
(i) representatives and independent contractors of the Agent to visit and
inspect any of their respective Property, to examine their respective corporate,
financial and operating records, and make copies thereof or abstracts therefrom,
and to discuss their respective affairs, finances and accounts with their
respective directors, officers, and independent public accountants; PROVIDED,
that (a) if no Event of Default exists, any such visits and inspections may only
occur during normal business hours and upon reasonable advance notice and the
number of such visits and inspections combined shall not exceed more than one
(1) time per year, and (b) if any Event of Default exists, any such visits and
inspections may occur at any time during normal business hours and without
advance notice; and (ii) representatives and independent contractors of any
Lender to do any of the foregoing during the existence of any Event of Default
and, in any such case described in this clause (ii), any such visits and
inspections may occur at any time during normal business hours and without
advance notice. All actions permitted to be taken by the Agent and any Lender
under this Section 4.9 shall be at the sole cost and expense of the Borrower.
4.10 USE OF PROCEEDS; PROCEEDS OF HIGH YIELD UNSECURED OFFERING. The
Borrower shall use the proceeds of the Loans solely as follows: (a) to pay costs
and expenses of the Related Transactions and costs and expenses required to be
paid pursuant to Section 2.1, (b) to finance the payment of the cash purchase
price of Permitted Acquisitions and (c) for working capital and other general
corporate purposes of its Subsidiaries not in contravention of any Requirement
of Law and not in violation of this Agreement. For clarification, all proceeds
of the Loans shall be utilized by the Subsidiaries of Borrower for the purposes
described above and, except with respect to (a) and (b) above, not by Borrower
itself. The Borrower shall (i) deposit a portion of the proceeds of the High
Yield Unsecured Offering sufficient to make the Restricted Payments described in
Sections 5.11(g) and 5.11(h) into an existing deposit account of the Borrower,
which account is subject to a control agreement, within five (5) Business Days
of the Closing Date, and (ii) contribute one hundred percent (100%) of the
remaining proceeds of the High
30
Yield Unsecured Offering to its Subsidiaries to refinance the Prior Indebtedness
and to pay costs, fees and expenses of the Related Transactions.
4.11 SOLVENCY. Borrower and each of its Subsidiaries, individually, and
Borrower and each of its Subsidiaries, on a consolidated basis, shall at all
times be Solvent.
4.12 FURTHER ASSURANCES.
(a) The Borrower shall ensure that all written information, exhibits and
reports furnished to the Agent or the Lenders do not and will not contain any
untrue statement of a material fact and do not and will not omit to state any
material fact or any fact necessary to make the statements contained therein not
misleading in light of the circumstances in which made, and will promptly
disclose to the Agent and the Lenders and correct any defect or error that may
be discovered therein or in any Loan Document or in the execution,
acknowledgement or recordation thereof.
(b) Promptly upon request by the Agent, the Borrower shall (and shall
cause each of its Subsidiaries to) take such additional actions as the Agent may
reasonably require from time to time in order (i) to subject to the Liens
created by any of the Collateral Documents any of the Property, rights or
interests covered by any of the Collateral Documents, (ii) to perfect and
maintain the validity, effectiveness and priority of any of the Collateral
Documents and the Liens intended to be created thereby, and (iii) to better
assure, convey, grant, assign, transfer, preserve, protect and confirm to the
Agent and Lenders the rights granted or now or hereafter intended to be granted
to the Agent and the Lenders under any Loan Document or under any other document
executed in connection therewith. Without limiting the generality of the
foregoing and except as otherwise approved in writing by Required Lenders, the
Borrower shall cause each of its Subsidiaries to guaranty the Obligations and to
cause each such Subsidiary to grant to the Agent, for the benefit of the Agent
and Lenders, a security interest in all of such Subsidiary's Property to secure
such guaranty. Furthermore and except as otherwise approved in writing by
Required Lenders, the Borrower shall, and shall cause each of its Subsidiaries
to, pledge the stock or other equity interest of each of their respective
Subsidiaries to the Agent, for the benefit of the Agent and Lenders, to secure
the Obligations. In connection with each pledge of stock or other equity
interests, the Borrower shall deliver, or cause to be delivered, to the Agent,
the items described in subsection 2.1(d)(iii), if applicable.
(c) The Borrower shall, and shall cause each of its Subsidiaries to, in
accordance with the terms of the applicable Collateral Documents, cause each
financial institution (other than U.S. Bank in respect of the Restricted
Accounts) at which the Borrower or any such Subsidiary maintains any lockbox,
deposit account, securities account or other similar account to deliver to the
Agent a control agreement, in form and substance satisfactory to the Agent. The
foregoing and anything contained in any Collateral Document to the contrary
notwithstanding, the Borrower shall not be required to deliver any such control
agreement in respect of any Restricted Account (to the extent the Borrower
otherwise is in compliance with the other terms of this paragraph); PROVIDED,
that, the Borrower shall not, and shall not cause or permit any of its
Subsidiaries to, deposit or maintain funds in excess of (i) $10,000 in any
Restricted Account (other than the Restricted Credit Card Account or the
Restricted Payroll Account) at any time, (ii) $70,000 in the Restricted Credit
Card Account at any time or (iii) $50,000 in the aggregate in
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all Restricted Accounts (other than the Restricted Credit Card Account and the
Restricted Payroll Account) at any time; PROVIDED, FURTHER, that, the Borrower
shall not, and shall not cause or permit any of its Subsidiaries to, deposit or
maintain funds in the Restricted Payroll Account other than funds deposited
therein in the Ordinary Course of Business for purposes of funding current
payroll liabilities.
4.13 APPRAISALS. The Borrower acknowledges that, as of the Closing Date,
no machinery, equipment or owned real Property of its Subsidiaries is permitted
to be included in the calculation of the "Borrowing Base" under the Borrowing
Base Certificate. Accordingly, and in addition to any appraisals undertaken by
or at the request of Agent pursuant to Section 4.2(k) or Section 5.2, for
purposes of calculating the "Borrowing Base" pursuant to and in accordance with
the terms of the Borrowing Base Certificate, and for Borrower and its
Subsidiaries to be permitted to include machinery, equipment and owned real
Property in the Borrowing Base Certificate at any time after the Closing Date,
the Agent shall have received, at the Borrower's expense, initial appraisals in
form and substance and from appraisers reasonably satisfactory to the Agent
setting forth the orderly liquidation value of such machinery and equipment and
the fair market value of all or any portion of such real Property of Borrower or
any of its Subsidiaries, in each case appraised at the time of such appraisals.
After receipt of such initial appraisals, appraisals in respect of such Property
may be undertaken or required by Agent pursuant to Section 4.2(k) and/or Section
5.2, the results of which shall result in changes in the "Borrowing Base" based
upon changes in the components thereof relating to such Property as necessary
and required. Further, if a Subsidiary of the Borrower exercises reinvestment
rights under Section 1.8(c) and the Property in which such Subsidiary reinvests
constitutes equipment, machinery and/or real Property that the Borrower desires
to include in the "Borrowing Base" under the Borrowing Base Certificate, then
Agent may require, as a condition thereto, appraisals of such Property that
otherwise comply with the requirements of Section 4.2(k). The "Borrowing Base"
shall be calculated in accordance with the terms of the Borrowing Base
Certificate.
ARTICLE V - NEGATIVE COVENANTS
The Borrower covenants and agrees that, so long as any Lender shall have
any Commitment hereunder, or any Loan or other Obligation (other than contingent
indemnification Obligations to the extent no claim giving rise thereto has been
asserted) shall remain unpaid or unsatisfied, unless the Required Lenders waive
compliance in writing:
5.1 LIMITATION ON LIENS. The Borrower shall not, and shall not suffer or
permit any of its Subsidiaries to, directly or indirectly, make, create, incur,
assume or suffer to exist any Lien upon or with respect to any part of its
Property, whether now owned or hereafter acquired, other than, with respect to
its Subsidiaries, the following, provided the same is permitted and solely to
the extent permitted, under the High Yield Unsecured Documents ("Permitted
Liens"):
(a) any Lien existing on the Property of the Borrower's Subsidiaries on
the Closing Date and set forth in SCHEDULE 5.1 securing Indebtedness outstanding
on such date and permitted by subsection 5.5(c), including replacement Liens on
the Property currently subject to such Liens securing Indebtedness permitted by
Section 5.5(c);
32
(b) any Lien created under any Loan Document;
(c) Liens for taxes, fees, assessments or other governmental charges (i)
which are not delinquent or remain payable without penalty or (ii) the
non-payment of which is permitted by Section 4.7; PROVIDED, that in respect of
this clause (ii), all such Liens secure claims in the aggregate at any time
outstanding for the Borrower's Subsidiaries not exceeding $500,000;
(d) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other similar Liens arising in the Ordinary Course of Business
which are not delinquent for more than ninety (90) days or remain payable
without penalty or which are being contested in good faith and by appropriate
proceedings diligently prosecuted, which proceedings have the effect of
preventing the forfeiture or sale of the Property subject thereto and for which
adequate reserves in accordance with GAAP are being maintained;
(e) Liens (other than any Lien imposed by ERISA) consisting of pledges or
deposits required in the Ordinary Course of Business in connection with workers'
compensation, unemployment insurance and other social security legislation or to
secure the performance of tenders, statutory obligations, surety, stay, customs
and appeals bonds, bids, leases, governmental contract, trade contracts,
performance and return of money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money) or to secure liability to
insurance carriers;
(f) Liens consisting of judgment or judicial attachment liens, PROVIDED,
that the enforcement of such Liens is effectively stayed and all such Liens
secure claims in the aggregate at any time outstanding for the Borrower's
Subsidiaries not exceeding $500,000;
(g) easements, rights-of-way, zoning and other restrictions, minor
defects or other irregularities in title, and other similar encumbrances
existing on the Closing Date or incurred in the Ordinary Course of Business
which, in each case, either individually or, in the aggregate, are not
substantial in amount, and which do not in any case materially detract from the
value of the Property subject thereto or interfere in any material respect with
the ordinary conduct of the businesses of the Borrower and its Subsidiaries;
(h) Liens on any Property acquired or held by the Borrower's Subsidiaries
in the Ordinary Course of Business, securing Indebtedness incurred or assumed
for the purpose of financing (or refinancing) all or any part of the cost of
acquiring such Property and permitted under subsection 5.5(d); PROVIDED, that
(i) any such Lien attaches to such Property concurrently with or within twenty
(20) days after the acquisition thereof, (ii) such Lien attaches solely to the
Property so acquired in such transaction, and (iii) the principal amount of the
debt secured thereby does not exceed 100% of the cost of such Property;
(i) Liens securing Capital Lease Obligations permitted under subsection
5.5(d);
(j) any interest or title of a lessor or sublessor, as lessor or
sublessor, under any lease permitted by this Agreement; and
(k) Liens arising from precautionary uniform commercial code financing
statements filed under any lease permitted by this Agreement.
33
5.2 DISPOSITION OF ASSETS. The Borrower shall not, and shall not suffer
or permit any of its Subsidiaries to, directly or indirectly, sell, assign,
lease, convey, transfer or otherwise dispose of (whether in one or a series of
transactions) any Property (including accounts and notes receivable, with or
without recourse) or enter into any agreement to do any of the foregoing,
except, with respect to the Borrower's Subsidiaries and in each instance,
provided the same is permitted, and solely to the extent permitted, under the
High Yield Unsecured Documents:
(a) dispositions of inventory, or used, worn-out or surplus equipment,
all in the Ordinary Course of Business; and
(b) dispositions not otherwise permitted hereunder which are made for
fair market value and the mandatory prepayment in the amount of the Net Proceeds
of such disposition is made as provided in Section 1.8; PROVIDED, that (i) at
the time of any disposition, no Event of Default shall exist or shall result
from such disposition, (ii) the aggregate sales price from such disposition
shall be paid in cash, (iii) the aggregate fair market value of all assets so
sold by the Borrower's Subsidiaries, together, shall not exceed in any fiscal
year $2,000,000, (iv) if the aggregate Net Proceeds received by the Borrower and
its Subsidiaries for all dispositions and Events of Loss occurring during the
current fiscal year exceeds $1,000,000, and such dispositions and Events of Loss
involved machinery, equipment and/or real Property that previously was included
in the "Borrowing Base" under the Borrowing Base Certificate then in effect, the
Borrower shall have delivered to the Agent a replacement Borrowing Base
Certificate setting forth the calculation of the "Borrowing Base" after giving
effect to such dispositions and/or Events of Loss and, if requested by the
Agent, appraisals of the remaining equipment, machinery and/or real Property to
be included in such "Borrowing Base", and (v) after giving effect to such
disposition, the Borrower shall be in compliance on a pro forma basis with the
covenants set forth in Article VI, recomputed for the most recent quarter for
which financial statements have been delivered.
5.3 CONSOLIDATIONS AND MERGERS. The Borrower shall not, and shall not
suffer or permit any of its Subsidiaries to, merge, consolidate with or into, or
convey, transfer, lease or otherwise dispose of (whether in one transaction or
in a series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except upon not less
than five (5) Business Days' prior written notice to the Agent, any Subsidiary
of the Borrower may merge with, or dissolve or liquidate into a Wholly-Owned
Subsidiary of the Borrower; PROVIDED, that such Wholly-Owned Subsidiary shall be
the continuing or surviving entity.
5.4 LOANS AND INVESTMENTS. The Borrower shall not and shall not suffer or
permit any of its Subsidiaries to (i) purchase or acquire, or make any
commitment to purchase or acquire any capital stock, equity interest, or any
obligations or other securities of, or any interest in, any Person, including
the establishment or creation of a Subsidiary, or (ii) make or commit to make
any Acquisitions, or any other acquisition of all or substantially all of the
assets of another Person, or of any business or division of any Person,
including without limitation, by way of merger, consolidation or other
combination or (iii) make or commit to make any advance, loan, extension of
credit or capital contribution to or any other investment in, any Person
including any Affiliate of the Borrower or any Subsidiary of the Borrower (the
items described in clauses (i),
34
(ii) and (iii) are referred to as "Investments"), except for, in each instance,
provided the same is permitted, and solely to the extent permitted, under the
High Yield Unsecured Documents:
(a) Investments in cash and Cash Equivalents;
(b) extensions of credit by the Borrower to any of its Wholly-Owned
Subsidiaries; PROVIDED, that the obligations of each obligor shall be evidenced
by notes, which notes shall be pledged to the Agent, for the benefit of the
Agent and Lenders, and have such other terms as the Agent may reasonably
require;
(c) loans and advances by the Borrower's Subsidiaries to employees in the
Ordinary Course of Business not to exceed $250,000 in the aggregate at any time
outstanding; and
(d) Permitted Acquisitions.
5.5 LIMITATION ON INDEBTEDNESS. The Borrower shall not, and shall not
suffer or permit any of its Subsidiaries to, create, incur, assume, suffer to
exist, or otherwise become or remain directly or indirectly liable with respect
to, any Indebtedness, except, in each instance, provided the same is permitted,
and solely to the extent permitted, under the High Yield Unsecured Documents:
(a) Indebtedness incurred pursuant to this Agreement;
(b) Indebtedness consisting of Contingent Obligations described in clause
(i) of the definition thereof and permitted pursuant to Section 5.9;
(c) Indebtedness of the Borrower's Subsidiaries existing on the Closing
Date and set forth in SCHEDULE 5.5 including extensions and refinancings thereof
which do not increase the principal amount of such Indebtedness as of the date
of such extension or refinancing;
(d) Indebtedness of the Borrower's Subsidiaries not to exceed $10,000,000
in the aggregate at any time outstanding, consisting of Capital Lease
Obligations or secured by Liens permitted by subsection 5.1(h);
(e) High Yield Unsecured Indebtedness not to exceed $120,000,000 in the
aggregate principal amount at any time outstanding (reduced from time to time by
principal payments made thereon, the making of which remain subject to the
provisions of this Agreement) evidenced by the High Yield Unsecured Notes and
Contingent Obligations of the Borrower's Subsidiaries resulting from unsecured
guarantees thereof;
(f) unsecured intercompany Indebtedness permitted pursuant to subsection
5.4(b); and
(g) other unsecured Indebtedness of the Borrower's Subsidiaries not
exceeding in the aggregate at any time outstanding $800,000, reduced by the
aggregate amount of Contingent Obligations outstanding that are permitted
pursuant to Section 5.9(i).
35
5.6 TRANSACTIONS WITH AFFILIATES. The Borrower shall not, and shall not
suffer or permit any of its Subsidiaries to, enter into any transaction with any
Affiliate of the Borrower or of any such Subsidiary, except:
(a) as expressly permitted by this Agreement; or
(b) in the Ordinary Course of Business and pursuant to the reasonable
requirements of the business of the Borrower or such Subsidiary; PROVIDED, that
in the case of this clause (b), upon fair and reasonable terms no less favorable
to the Borrower or such Subsidiary than would be obtained in a comparable
arm's-length transaction with a Person not an Affiliate of the Borrower or such
Subsidiary and which are disclosed in writing to the Agent.
5.7 MANAGEMENT FEES AND COMPENSATION. The Borrower shall not, and shall
not permit any of its Subsidiaries to, pay any management, consulting or similar
fees to any Affiliate of the Borrower or to any officer, director or employee of
the Borrower or any of its Subsidiaries or Affiliates except:
(a) payment of reasonable compensation to officers and employees for
actual services rendered to the Borrower and its Subsidiaries in the Ordinary
Course of Business;
(b) payment of directors' fees and reimbursement of actual out-of-pocket
expenses incurred in connection with attending board of director meetings not to
exceed in the aggregate, with respect to all such items, $100,000 in any fiscal
year of the Borrower;
(c) regularly scheduled, non-accelerated payments of consulting fees by
Woodcraft under the Consulting Agreement in an aggregate amount not to exceed
$600,000 during any fiscal year, which fees shall be payable in equal monthly
installments and in accordance with and subject to the terms of subsection
5.11(c);
(d) regularly scheduled, non-accelerated payments of non-competition fees
by Woodcraft under the Xxxxxx Non-Competition Agreement in an aggregate amount
not to exceed $166,667 during any fiscal year, which fees shall be payable in
equal monthly installments and in accordance with and subject to the terms of
subsection 5.11(d);
(e) payment of a one-time closing fee to Xxxxxxx Brothers Management
Corp. on the Closing Date in an amount not to exceed $2,400,000; and
(f) payment of transaction or similar fees to Xxxxxxx Brothers Management
Corp. from time to time in connection with (i) equity offerings or raises by the
Borrower, (ii) the sale, merger or other business combination involving the
business, securities or assets of the Borrower, (iii) the acquisition by the
Borrower of any portion of the business, securities or assets of another entity
constituting a Permitted Acquisition and (iv) any extraordinary distribution of
assets or dividends in connection with a recapitalization of the Borrower (each
such transaction described in the foregoing clauses (i), (ii), (iii) and (iv), a
"Transaction"), in each case provided that (x) such fee does not exceed two
percent (2%) of aggregate transaction value and is paid from the proceeds of
such Transaction, (y) no Event of Default would arise as a result of the
consummation of the applicable Transaction and (z) such Transaction was not
consummated for purposes of Section 6.6 (it being agreed and understood that
nothing contained in this paragraph
36
(f) shall be deemed to constitute (I) a waiver of, or otherwise affect or impair
any obligation of the Borrower or its Subsidiaries to comply with, any provision
contained herein or in any other Loan Document prohibiting or otherwise not
permitting the consummation of any such Transaction, or (II) express or implied
consent or approval by the Agent or any Lender to the consummation of any such
Transaction);
PROVIDED, HOWEVER, that no such fees or other payments described in the
foregoing clauses (c), (d) or (f) shall be paid during any period while any
Event of Default has occurred and is continuing or would arise as a result of
such payment.
5.8 USE OF PROCEEDS. The Borrower shall not and shall not suffer or
permit any of its Subsidiaries to use any portion of the Loan proceeds, directly
or indirectly, to purchase or carry Margin Stock or repay or otherwise refinance
Indebtedness of the Borrower or others incurred to purchase or carry Margin
Stock, or otherwise in any manner which is in contravention of any Requirement
of Law or in violation of this Agreement.
5.9 CONTINGENT OBLIGATIONS. The Borrower shall not, and shall not suffer
or permit any of its Subsidiaries to, create, incur, assume or suffer to exist
any Contingent Obligations except in respect of the Obligations and except:
(a) endorsements of the Borrower's Subsidiaries for collection or deposit
in the Ordinary Course of Business;
(b) Rate Contracts entered into in the Ordinary Course of Business for
bona fide hedging purposes and not for speculation with the Agent's prior
written consent;
(c) unsecured Contingent Obligations of the Borrower and its Subsidiaries
existing as of the Closing Date and listed in SCHEDULE 5.9, including extension
and renewals thereof which do not increase the amount of such Contingent
Obligations as of the date of such extension or renewal;
(d) Contingent Obligations incurred in the Ordinary Course of Business of
the Borrower's Subsidiaries with respect to surety and appeal bonds, performance
bonds and other similar obligations;
(e) Contingent Obligations arising under indemnity agreements to title
insurers to cause such title insurers to issue to the Agent title insurance
policies;
(f) Contingent Obligations arising with respect to customary
indemnification obligations in favor of (i) sellers in connection with Permitted
Acquisitions and (ii) purchasers in connection with dispositions permitted under
subsection 5.2(b);
(g) Contingent Obligations arising under Lender Letters of Credit and
other letters of credit which are the subject of a Letter of Credit
Participation Agreement;
(h) Contingent Obligations arising under permitted guarantees of the
Subordinated Indebtedness evidenced by the High Yield Unsecured Notes; and
37
(i) other Contingent Obligations not exceeding $800,000 at any time
outstanding reduced by the aggregate amount of Indebtedness outstanding that is
permitted pursuant to Section 5.5(g).
5.10 COMPLIANCE WITH ERISA. The Borrower shall not, and shall not suffer
or permit any of its Subsidiaries to:
(a) terminate any Plan subject to Title IV of ERISA so as to result in
any material liability to the Borrower;
(b) permit to exist any ERISA Event or any other event or condition,
which would reasonably be expected to have a Material Adverse Effect;
(c) make a complete or partial withdrawal (within the meaning of ERISA
Section 4201) from any Multiemployer Plan so as to result in any material
liability to the Borrower or any of its Subsidiaries;
(d) enter into any new Plan or modify any existing Plan so as to increase
its obligations thereunder which would reasonably be expected to have a Material
Adverse Effect; or
(e) permit the present value of all nonforfeitable accrued benefits under
any Plan (using the actuarial assumptions utilized by the PBGC upon termination
of a Plan) materially to exceed the fair market value of Plan assets allocable
to such benefits, all determined as of the most recent valuation date for each
such Plan.
5.11 RESTRICTED PAYMENTS. The Borrower shall not, and shall not suffer or
permit any of its Subsidiaries to, (i) declare or make any dividend payment or
other distribution of assets, properties, cash, rights, obligations or
securities on account of any shares of any class of its capital stock,
partnership interests, membership interests or other equity securities, (ii)
purchase, redeem or otherwise acquire for value any shares of its capital stock,
partnership interests, membership interests or other equity securities or any
warrants, rights or options to acquire such shares, interests or securities now
or hereafter outstanding, (iii) make any payment or prepayment of principal of,
premium, if any, interest, fees, redemption, exchange, purchase, retirement,
defeasance, payment in trust, sinking fund or similar payment with respect to,
Subordinated Indebtedness, (iv) make any payment or prepayment of principal of,
premium, if any, interest, fees, redemption, exchange, purchase, retirement,
defeasance, payment in trust, sinking fund or similar payment with respect to,
the High Yield Unsecured Indebtedness, or (v) make any direct or indirect
payment in respect of any consulting, management, non-competition or similar
agreement, arrangement or fee (the items described in clauses (i), (ii), (iii),
(iv) and (v) above are referred to as "Restricted Payments"); except that any
Wholly-Owned Subsidiary of the Borrower may declare and pay dividends to any
Wholly-Owned Subsidiary of the Borrower and except as follows, in each instance
provided the same is permitted, and solely to the extent permitted, under the
High Yield Unsecured Documents:
(a) the Borrower may declare and make dividend payments or other
distributions payable solely in its Permitted Securities;
38
(b) the Borrower's Subsidiaries may make distributions to Borrower in
amounts necessary to enable Borrower to redeem from management stockholders
shares of the Borrower's common stock or warrants or options to acquire any such
shares, and the Borrower promptly shall so redeem such shares, warrants or
options with the proceeds thereof; PROVIDED, that any such redemptions are made
promptly by the Borrower after its receipt of such proceeds; and PROVIDED,
FURTHER, that all of the following conditions are satisfied:
(i) no Default or Event of Default has occurred and is continuing
or would arise as a result of such Restricted Payment;
(ii) after giving effect to such Restricted Payment, the Borrower
shall be in compliance on a pro forma basis with the covenants set forth
in Article VI, recomputed for the most recent month for which financial
statements have been delivered;
(iii) the aggregate amount of such Restricted Payments permitted
(x) in any fiscal year of the Borrower shall not exceed $350,000 and (y)
during the term of this Agreement shall not exceed $2,000,000; and
(iv) after giving effect to such Restricted Payment, the Maximum
Revolving Loan Balance shall exceed the aggregate outstanding principal
balance of Revolving Loans by not less than $2,000,000;
(c) Woodcraft may pay in equal monthly installments the regularly
scheduled, non-accelerated consulting fee under the Consulting Agreement to
Primeboard; PROVIDED, that all of the following conditions are satisfied:
(i) no Default or Event of Default shall have occurred and be
continuing or would arise as a result of such Restricted Payment;
(ii) after giving effect to such Restricted Payment, the Borrower
shall be in compliance on a pro forma basis with the covenants set forth
in Article VI, recomputed for the most recent quarter for which financial
statements have been delivered;
(iii) the aggregate amount of such Restricted Payments permitted
(x) in any fiscal year of the Borrower shall not exceed $600,000 and (y)
during the term of this Agreement shall not exceed $725,000; and
(iv) after giving effect to such Restricted Payment, the Maximum
Revolving Loan Balance shall exceed the aggregate outstanding principal
balance of Revolving Loans by not less than $2,000,000;
39
(d) the Borrower's Subsidiaries may make distributions to Borrower in
amounts necessary to enable Borrower to pay in equal monthly installments the
regularly scheduled, non-accelerated non-competition fee under the Xxxxxx
Non-Competition Agreement to Xxxxxx, and the Borrower promptly shall pay such
fee with the proceeds thereof; PROVIDED, that any such payments are made
promptly by the Borrower after its receipt of such proceeds; and PROVIDED,
FURTHER, that all of the following conditions are satisfied:
(i) no Default or Event of Default shall have occurred and be
continuing or would arise as a result of such Restricted Payment;
(ii) after giving effect to such Restricted Payment, the Borrower
shall be in compliance on a pro forma basis with the covenants set forth
in Article VI, recomputed for the most recent quarter for which financial
statements have been delivered;
(iii) the aggregate amount of such Restricted Payments permitted
(x) in any fiscal year of the Borrower shall not exceed $166,667 and (y)
during the term of this Agreement shall not exceed $210,000; and
(iv) after giving effect to such Restricted Payment, the Maximum
Revolving Loan Balance shall exceed the aggregate outstanding principal
balance of Revolving Loans by not less than $2,000,000;
(e) in the event the Borrower files a consolidated income tax return with
its Subsidiaries, the Borrower's Subsidiaries may make distributions to Borrower
to permit Borrower to pay federal and state income taxes then due and owing,
franchise taxes and other similar licensing expenses incurred in the Ordinary
Course of Business; PROVIDED, that the amount of such distribution shall not be
greater, nor the receipt by the Borrower of tax benefits less, than they would
have been had the Borrower not filed a consolidated return with its
Subsidiaries;
(f) the Borrower's Subsidiaries may make distributions to Borrower in
amounts necessary to enable Borrower to pay, as and when due and payable, and
the Borrower may pay with the proceeds thereof, provided, that any such payments
are made promptly by the Borrower after its receipt of such proceeds, (i)
regularly scheduled semi-annual payments of interest on the High Yield Unsecured
Indebtedness at a rate not to exceed ten percent (10%) per annum in accordance
with the terms set forth in the High Yield Unsecured Documents, (ii) regularly
scheduled payments of interest and principal on any Subordinated Indebtedness to
the extent permitted under the subordination terms with respect thereto and
(iii) any other payments that are required under this Agreement and any of the
other Loan Documents;
(g) the Borrower may declare and make a one-time cash dividend payment to
its holders of capital stock, and may repurchase or redeem shares of its capital
stock, in an aggregate amount not to exceed $42,000,000, which dividend shall be
paid and repurchases and redemptions shall be made within thirty (30) days of
the Closing Date solely with proceeds from the High Yield Unsecured Offering
that are deposited into a deposit account of the Borrower in accordance with
Section 4.10; PROVIDED, that no Default or Event of Default shall have occurred
and be continuing or would arise as a result of such Restricted Payment;
40
(h) the Borrower may declare and make a one-time cash distribution
payment to its holders of options to purchase shares of its capital stock in an
aggregate amount not to exceed $1,000,000, which distribution shall be paid
within thirty (30) days of the Closing Date solely with proceeds from the High
Yield Unsecured Offering that are deposited into a deposit account of the
Borrower in accordance with Section 4.10; PROVIDED, that no Default or Event of
Default shall have occurred and be continuing or would arise as a result of such
Restricted Payment; and
(i) the Borrower's Subsidiaries may make distributions to Borrower in
amounts necessary to enable Borrower to make cash dividends or distributions to
its holders of capital stock so long as the aggregate amount of such Restricted
Payments and all other Restricted Payments made under this Section 5.11(i) since
the Closing Date does not exceed the sum of (without duplication):
(i) fifty-percent (50%) of the "Consolidated Net Income" (as
defined in the High Yield Unsecured Indenture) accrued during the period
(treated as one accounting period) from the beginning of the fiscal
quarter immediately following the fiscal quarter during which the Closing
Date occurs to the end of the most recent fiscal quarter ending prior to
the date of such Restricted Payment for which quarterly financial
statements are available and have been delivered to the Agent and the
Lenders in accordance with the terms hereof (or, in case such
Consolidated Net Income shall be a deficit, minus 100% of such deficit);
PLUS
(ii) one hundred percent (100%) of the aggregate Net Proceeds
received by the Borrower from the issuance or sale of its Permitted
Securities subsequent to the Closing Date (other than an issuance or sale
to a Subsidiary of the Borrower and other than an issuance or sale to an
employee stock ownership plan or to a trust established by the Borrower
or any of its Subsidiaries for the benefit of their employees) and one
hundred percent (100%) of any cash capital contribution received by the
Borrower from its shareholders subsequent to the Closing Date (other than
for purposes of Section 6.6); PLUS
(iii) the amount by which Indebtedness of the Borrower is reduced
on the Borrower's balance sheet upon the conversion or exchange
subsequent to the Closing Date of any Indebtedness of the Borrower
convertible or exchangeable for Permitted Securities (less the amount of
any cash, or the fair value of any other property, distributed by the
Borrower upon such conversion or exchange) to the extent the same shall
have been permitted under this Agreement; PROVIDED, HOWEVER, that the
foregoing amount shall not exceed the net cash proceeds received by the
Borrower or any of its Subsidiaries from the sale of such Indebtedness
(excluding Net Proceeds from sales to a Subsidiary of the Borrower or to
an employee stock ownership plan or to a trust established by the
Borrower or any of its Subsidiaries for the benefit of their employees);
PLUS
(iv) an amount equal to the net reduction in the Investments made
by the Borrower or any Subsidiary in any Person (other than the Borrower
or any of its Subsidiaries) resulting from repurchases, repayments or
redemptions of such Investments by such Person, proceeds realized on the
sale of such Investments and proceeds representing the return of capital
(excluding dividends and distributions), in each case
41
received by the Borrower or any of its Subsidiaries and to the extent the
same shall have been permitted under this Agreement; and
PROVIDED, that all of the following conditions are satisfied:
(i) no Default or Event of Default shall have occurred and be
continuing or would arise as a result of such Restricted Payment;
(ii) after giving effect to such Restricted Payment, the Borrower
shall be in compliance on a pro forma basis with the covenants set forth
in Article VI, recomputed for the most recent quarter for which financial
statements have been delivered;
(iii) after giving effect to such Restricted Payment, the Leverage
Ratio, recalculated for the twelve (12) month period ending on the last
day of the most recently ended quarter for which the Agent and the
Lenders shall have received financial statements in accordance with the
terms of this Agreement, shall be less than 4.00 to 1.00; and
(iv) after giving effect to such Restricted Payment, the Maximum
Revolving Loan Balance shall exceed the aggregate outstanding principal
balance of Revolving Loans by not less than $5,000,000.
5.12 CHANGE IN BUSINESS. The Borrower shall not permit any of its
Subsidiaries to engage in any material line of business substantially different
from those respective lines of business carried on by each of them on the date
hereof. The Borrower shall not (i) engage in any business activity other than
(A) its ownership of the equity securities of Woodcraft, (B) activities
incidental to maintenance of its corporate existence and (C) performance of its
obligations under the Loan Documents, the High Yield Unsecured Documents and the
other Related Agreements to which it is a party, (ii) receive or retain any
Restricted Payment except to the extent expressly permitted hereunder (provided
Borrower uses the proceeds thereof solely for such specified purposes) or (iii)
incur, grant or suffer to exist any Liens, Indebtedness or Contingent
Obligations other than (x) Liens granted to the Agent, for the benefit of the
Agent and the Lenders, or (y) Indebtedness and Contingent Obligations pursuant
to the Loan Documents, the High Yield Unsecured Documents and the other Related
Agreements to which it is a party.
5.13 CHANGE IN STRUCTURE. Except as expressly permitted under Section
5.3, the Borrower shall not, and shall not permit any of its Subsidiaries to,
make any material changes in its equity capital structure (including in the
terms of its outstanding capital stock), or amend any of its Organization
Documents in any material respect or in any respect adverse to the Agent or
Lenders.
5.14 ACCOUNTING CHANGES. The Borrower shall not, and shall not suffer or
permit any of its Subsidiaries to, make any significant change in accounting
treatment or reporting practices, except as required by GAAP, or change the
fiscal year of the Borrower or of any of its Subsidiaries.
42
5.15 AMENDMENTS TO RELATED AGREEMENTS.
(a) The Borrower shall not, and shall not permit any of its Subsidiaries
to, (i) amend, supplement, waive or otherwise modify any provision of, any
Related Agreement in a manner adverse to the Agent or Lenders or which could
reasonably be expected to have a Material Adverse Effect, or (ii) take or fail
to take any action under any Related Agreement that would reasonably be expected
to have a Material Adverse Effect.
(b) The Borrower shall not, and shall not permit any of its Subsidiaries
directly or indirectly to, change or amend the terms of any Subordinated
Indebtedness, if the effect of such amendment would be to: (i) increase the
interest rate on such Indebtedness; (ii) shorten the dates upon which payments
of principal or interest are due on such Indebtedness; (iii) add or change in a
manner adverse to the Borrower any event of default or add or make more
restrictive any covenant with respect to such Indebtedness; (iv) change in a
manner adverse to the Borrower the prepayment provisions of such Indebtedness;
(v) change the subordination provisions thereof (or the subordination terms of
any guaranty thereof); or (vi) change or amend any other term if such change or
amendment would materially increase the obligations of the obligor or confer
additional material rights on the holder of such Indebtedness in a manner
adverse to the Borrower, any of its Subsidiaries, the Agent or the Lenders.
(c) The Borrower shall not, and shall not permit any of its Subsidiaries
directly or indirectly to, change or amend the terms of the High Yield Unsecured
Indebtedness or any of the High Yield Unsecured Documents, if the effect of such
change or amendment would be to: (i) increase the interest rate on or principal
amount of such Indebtedness; (ii) shorten the dates upon which payments of
principal or interest are due on such Indebtedness; (iii) add or change in a
manner adverse to the Borrower any event of default or add or make more
restrictive any covenant with respect to such Indebtedness; (iv) change in a
manner adverse to the Borrower the prepayment or redemption provisions of such
Indebtedness; (v) change or amend any other term if such change or amendment
would increase the obligations of the obligor or confer additional rights on the
holder of such Indebtedness in a manner adverse to the Borrower, any of its
Subsidiaries, the Agent or the Lenders; (vi) provide that any such Indebtedness
will become secured, or (vii) provide that such Indebtedness will become
guaranteed, except by any Subsidiaries that are also providing guarantees of the
Obligations hereunder; and provided that the Borrower and any such Subsidiaries
have complied with all of the conditions set forth in Section 4.12 hereof on or
prior to the provision of such guarantee.
(d) The Borrower shall not, and shall not permit any of its Subsidiaries
directly or indirectly to, change, amend, supplement, waive or otherwise modify
any provision of the Xxxxxx Non-Competition Agreement, the Consulting Agreement
or the Merger Agreement.
5.16 NO NEGATIVE PLEDGES.
(a) The Borrower shall not, and shall not permit any of its Subsidiaries
directly or indirectly to, create or otherwise cause or suffer to exist or
become effective any consensual restriction or encumbrance of any kind on the
ability of any such Subsidiary to pay dividends or make any other distribution
on any of such Subsidiary's equity securities or to pay fees, including
management fees, or make other payments and distributions to the Borrower or any
of
43
its Subsidiaries, other than restrictions contained herein or in the High Yield
Unsecured Documents with respect to distributions by a Subsidiary of the
Borrower which is not a Wholly-Owned Subsidiary of Borrower. The Borrower shall
not, and shall not permit any of its Subsidiaries directly or indirectly to,
enter into, assume or become subject to any Contractual Obligation prohibiting
or otherwise restricting the existence of any Lien upon any of its assets in
favor of the Agent, whether now owned or hereafter acquired except in connection
with any document or instrument governing Liens permitted pursuant to
subsections 5.1(h) and (i); PROVIDED, that any such restriction contained
therein relates only to the asset or assets subject to such Permitted Liens.
(b) The Borrower shall not issue any shares of the Borrower's equity
securities, including, without limitation, Permitted Securities, if such
issuance would result in an Event of Default under subsection 7.1(l).
5.17 FOREIGN ASSETS CONTROL REGULATIONS. Borrower will not, and will not
permit any of its Subsidiaries to, (i) use any proceeds from the Loans to
knowingly engage in any material dealings or transactions with any blocked
persons described in Section 1 of Executive Order 13224 of the September 23,
2001 Blocking Property and Prohibiting Transaction With Persons Who Commit and
Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49049 (2001)), or (ii)
engage in transactions with any Person or country to the extent restricted by
the Trading with the Enemy Act, as amended, or use the proceeds from the Loans
to so engage.
5.18 INTEGRATION. Notwithstanding anything in this Article V to the
contrary, no action otherwise permitted under this Article V shall be permitted
if such action is prohibited or is otherwise not permitted under any of the High
Yield Unsecured Documents and the Agent shall have the right, at any time, to
require the Borrower to deliver a certificate executed by a Responsible Officer
of Borrower and otherwise in form and substance reasonably satisfactory to Agent
which certifies to Agent and Lenders that any such action, at the time such
action is to be taken, is permitted under the High Yield Unsecured Documents.
Furthermore, all covenants contained in each of the High Yield Unsecured
Documents hereby are incorporated herein, MUTATIS MUTANDIS, as if such covenants
were set forth in this Agreement, and shall be deemed in addition to, and not in
substitution of, the covenants contained in the Loan Documents.
ARTICLE VI - FINANCIAL COVENANTS
The Borrower covenants and agrees that, so long as any Lender shall have
any Commitment hereunder, or any Loan or other Obligation (other than contingent
indemnification Obligations to the extent no claim giving rise thereto has been
asserted) shall remain unpaid or unsatisfied, unless the Required Lenders waive
compliance in writing:
6.1 RESERVED.
6.2 LEVERAGE RATIO. The Borrower shall not permit its Leverage Ratio for
the twelve (12) month period ending on the last day of any fiscal quarter of the
Borrower (commencing with the fiscal quarter of the Borrower ending March 31,
2004) to be greater than 7.00 to 1.00.
"Leverage Ratio" shall be calculated in the manner set forth in EXHIBIT 4.2(b).
44
6.3 FIXED CHARGE COVERAGE RATIO. The Borrower shall not permit its Fixed
Charge Coverage Ratio for the twelve (12) month period ending on the last day of
any fiscal quarter of the Borrower (commencing with the fiscal quarter of the
Borrower ending March 31, 2004) to be less than 1.20 to 1.00.
"Fixed Charge Coverage Ratio" shall be calculated in the manner set forth in
EXHIBIT 4.2(b).
6.4 RESERVED.
6.5 EBITDA. The Borrower shall not permit its EBITDA for the twelve (12)
month period ending on the last day of any fiscal quarter of the Borrower
(commencing with the fiscal quarter of the Borrower ending March 31, 2004) to be
less than $21,000,000.
"EBITDA" shall be calculated in the manner set forth in Exhibit 4.2(b).
6.6 EQUITY CONTRIBUTION. Anything contained in this Article VI to the
contrary notwithstanding, if the Borrower violates any financial covenant
contained in Sections 6.2, 6.3 and/or 6.5 as of any date of measurement, no
Event of Default shall occur in respect thereof to the extent each of the
following conditions is satisfied in respect thereof:
(a) contemporaneously with the delivery of the Compliance Certificate in
accordance with the terms of this Agreement relating to such date of
measurement, Sponsor delivers to Agent a writing by which Sponsor
unconditionally and irrevocably commits, for the benefit of Agent and the
Lenders, to contribute cash common equity to Borrower in an amount at least
equal to the relevant EBITDA Plug Amount for purposes of this paragraph;
(b) on or before the fifth (5th) day after the date on which such
Compliance Certificate and writing are delivered to the Agent, Sponsor makes a
cash common equity contribution in a net cash amount at least equal to the
relevant EBITDA Plug Amount and the terms of such equity shall not provide for,
include or grant any mandatory or required redemption or repurchase rights or
any rights to mandatory or required dividends, distributions or other payments
thereon or in respect thereto (each such contribution, a "Cash Contribution");
(c) upon receipt of such Cash Contribution by the Borrower, the Borrower
immediately makes a mandatory prepayment of the Loans and other Obligations with
the proceeds thereof in accordance with the terms of subsection 1.8(g); and
(d) no other Default or Event of Default exists or otherwise would be
created by the making of any such contributions;
it being understood that the amount of any such contributions shall be added to
EBITDA (or, in respect of the Fixed Charge Coverage ratio under Section 6.3,
Cash Flow) solely for the applicable test period and date of measurement and
shall not be included or considered (or credited) in the calculation of EBITDA
(or Cash Flow, as applicable) for any subsequent test period or date of
measurement. The Borrower agrees and acknowledges that an Event of Default shall
occur immediately and automatically upon the failure of Sponsor or the Borrower
to timely comply with any of the foregoing.
45
ARTICLE VII - EVENTS OF DEFAULT
7.1 EVENT OF DEFAULT. Any of the following shall constitute an "Event of
Default":
(a) NON-PAYMENT. The Borrower fails to pay (i) when and as required to be
paid herein, any amount of principal of or interest on any Loan, including after
maturity of the Loans, whether by acceleration or otherwise, or (ii) within ten
(10) days after the same shall become due, any fee or any other amount payable
hereunder or pursuant to any other Loan Document; or
(b) REPRESENTATION OR WARRANTY. Any representation, warranty or
certification by or on behalf of the Borrower or any of its Subsidiaries made or
deemed made herein, in any other Loan Document, or which is contained in any
certificate, document or financial or other statement by the Borrower, any of
its Subsidiaries, or any of their respective Responsible Officers, furnished at
any time under this Agreement, or in or under any other Loan Document, shall
prove to have been incorrect in any material respect on or as of the date made
or deemed made; or
(c) SPECIFIC DEFAULTS. The Borrower fails to perform or observe any term,
covenant or agreement contained in Sections 4.1, 4.2(b), 4.2(d), 4.4 (other than
4.4(c)), 4.6, 4.9, 4.13 or Article V or, subject to Section 6.6, Article VI
hereof; or
(d) OTHER DEFAULTS. The Borrower or any of its Subsidiaries fails to
perform or observe any other term, covenant or agreement contained in this
Agreement or any other Loan Document, and such default shall continue unremedied
for a period of thirty (30) days after the earlier to occur of (i) the date upon
which a Responsible Officer becomes aware of such default and (ii) the date upon
which written notice thereof is given to the Borrower by the Agent or Required
Lenders; or
(e) CROSS-DEFAULT. (i) The Borrower or any of its Subsidiaries (A) fails
to make any payment in respect of any Indebtedness (other than the Obligations)
or Contingent Obligation having an aggregate principal amount (including undrawn
committed or available amounts and including amounts owing to all creditors
under any combined or syndicated credit arrangement) of more than $1,000,000
when due (whether by scheduled maturity, required prepayment, acceleration,
demand, or otherwise) and such failure continues after the applicable grace or
notice period, if any, specified in the document relating thereto on the date of
such failure; or (B) fails to perform or observe any other condition or
covenant, or any other event shall occur or condition exist, under any agreement
or instrument relating to any such Indebtedness or Contingent Obligation, if the
effect of such failure, event or condition is to cause, or to permit the holder
or holders of such Indebtedness or beneficiary or beneficiaries of such
Indebtedness (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause such Indebtedness to be declared to be
due and payable prior to its stated maturity, or such Contingent Obligation to
become payable or cash collateral in respect thereof to be demanded; or (ii) any
default or event of default occurs under or in respect of the High Yield
Unsecured Indebtedness or any of the High Yield Unsecured Documents; or (iii)
any default or event of default occurs under or in respect of any Subordinated
Indebtedness;
46
(f) INSOLVENCY; VOLUNTARY PROCEEDINGS. The Borrower or any of its
Subsidiaries: (i) ceases or fails to be Solvent; (ii) generally fails to pay, or
admits in writing its inability to pay, its debts as they become due, subject to
applicable grace periods, if any, whether at stated maturity or otherwise; (iii)
voluntarily ceases to conduct its business in the ordinary course; (iv)
commences any Insolvency Proceeding with respect to itself; or (v) takes any
action to effectuate or authorize any of the foregoing; or
(g) INVOLUNTARY PROCEEDINGS. (i) Any involuntary Insolvency Proceeding is
commenced or filed against the Borrower or any of its Subsidiaries, or any writ,
judgment, warrant of attachment, execution or similar process, is issued or
levied against a substantial part of the Borrower's or any of its Subsidiaries'
Property, and any such proceeding or petition shall not be dismissed, or such
writ, judgment, warrant of attachment, execution or similar process shall not be
released, vacated or fully bonded within sixty (60) days after commencement,
filing or levy; (ii) the Borrower or any of its Subsidiaries admits the material
allegations of a petition against it in any Insolvency Proceeding, or an order
for relief (or similar order under non-U.S. law) is ordered in any Insolvency
Proceeding; or (iii) the Borrower or any of its Subsidiaries acquiesces in the
appointment of a receiver, trustee, custodian, conservator, liquidator,
mortgagee in possession (or agent therefor), or other similar Person for itself
or a substantial portion of its Property or business;
(h) ERISA. (i) A member of the Controlled Group shall fail to pay when
due, after the expiration of any applicable grace period, any installment
payment with respect to its Withdrawal Liability under a Multiemployer Plan;
(ii) a member of the Controlled Group shall fail to satisfy its contribution
requirements under Section 412(c)(11) of the Code, whether or not it has sought
a waiver under Section 412(d) of the Code; (iii) the occurrence of an ERISA
Event; (iv) a Plan that is intended to be qualified under Section 401(a) of the
Code shall lose its qualification; (v) any member of the Controlled Group
engages in or otherwise becomes liable for a non-exempt prohibited transaction;
(vi) a violation of Section 404 or 405 of ERISA or the exclusive benefit rule
under Section 401(a) of the Code; or (vii) any member of the Controlled Group is
assessed a tax under Section 4980B of the Code or incurs a liability under
Section 601 ET SEQ. of ERISA; and, the occurrence of any such event listed in
clauses (i) through (vii), or the occurrence of any combination of events listed
in clauses (i) through (vii) results in, or could reasonably be expected to
result in, a Material Adverse Effect or result in exposure to the Borrower in an
amount in excess of $800,000;
(i) MONETARY JUDGMENTS. One or more judgments, non-interlocutory orders,
decrees or arbitration awards shall be entered against the Borrower or any of
its Subsidiaries involving in the aggregate a liability (to the extent not
covered by independent third-party insurance) as to any single or related series
of transactions, incidents or conditions, of $800,000 or more, and the same
shall remain unsatisfied, unvacated and unstayed pending appeal for a period of
thirty (30) days after the entry thereof; or
(j) NON-MONETARY JUDGMENTS. One or more non-monetary judgments, orders or
decrees shall be rendered against the Borrower or any of its Subsidiaries which
does or would reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect, and there shall be any period of ten (10)
consecutive days during which a stay of
47
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(k) COLLATERAL. Any material provision of any Collateral Document shall
for any reason cease to be valid and binding on or enforceable against the
Borrower or any Subsidiary of the Borrower party thereto or the Borrower or any
of its Subsidiaries shall so state in writing or bring an action to limit its
obligations or liabilities thereunder; or any Collateral Document shall for any
reason (other than pursuant to the terms thereof) cease to create a valid
security interest in the Collateral purported to be covered thereby or such
security interest shall for any reason (other than the failure of the Agent to
take any action within its control) cease to be a perfected and first priority
security interest subject only to Permitted Liens; or
(l) OWNERSHIP. (i) Sponsor at any time shall cease to own, beneficially,
at least eighty percent (80%) of each class of the issued and outstanding
capital stock of Borrower owned by it on the Closing Date (as the same may be
adjusted for any combination, recapitalization or reclassification into a
greater or smaller number of shares); or (ii) Sponsor at any time shall fail to
own, beneficially, directly or indirectly, at least fifty-one percent (51%) of
the issued and outstanding voting capital stock of Borrower or, in any event,
capital stock representing voting control of Borrower; or (iii) Borrower shall
cease to own, beneficially, one hundred percent (100%) of the issued and
outstanding equity securities of Woodcraft; or (iv) the Borrower or any of its
Subsidiaries shall cease to own, beneficially, one hundred percent (100%) of the
issued and outstanding equity securities of any of its Subsidiaries (except as
otherwise permitted pursuant to Section 5.3) in each instance in clauses (i),
(ii), (iii) and (iv), free and clear of all Liens, rights, options, warrants or
other similar agreements or understandings, other than Liens in favor of Agent,
for the benefit of Agent; or (vi) a "Change of Control" (as defined in the High
Yield Unsecured Indenture) shall have occurred; or
(m) INVALIDITY OF SUBORDINATION PROVISIONS. The subordination provisions
of any agreement or instrument governing any Subordinated Indebtedness shall for
any reason be revoked or invalidated, or otherwise cease to be in full force and
effect, or any Person shall contest in any manner the validity or enforceability
thereof or deny that it has any further liability or obligation thereunder, or
the Obligations, for any reason shall not have the priority contemplated by this
Agreement or such subordination provisions.
7.2 REMEDIES. Upon the occurrence and during the continuation of any
Event of Default, the Agent may, and shall at the request of the Required
Lenders:
(a) declare all or any portion of the Commitment of each Lender to make
Loans or issue Lender Letters of Credit or Letter of Credit Participation
Agreements to be terminated, whereupon such Commitments shall forthwith be
terminated;
(b) declare all or any portion of the unpaid principal amount of all
outstanding Loans, all interest accrued and unpaid thereon, and all other
amounts owing or payable hereunder or under any other Loan Document to be
immediately due and payable; without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the Borrower;
and
48
(c) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents or applicable law;
PROVIDED, HOWEVER, that upon the occurrence of any event specified in
subsections 7.1(f) or 7.1(g) above (in the case of clause (i) of subsection
7.1(g) upon the expiration of the sixty (60) day period mentioned therein), the
obligation of each Lender to make Loans and the obligation of Agent to issue
Lender Letters of Credit and Letter of Credit Participation Agreements shall
automatically terminate and the unpaid principal amount of all outstanding Loans
and all interest and other amounts as aforesaid shall automatically become due
and payable without further act of the Agent or any Lender.
7.3 RIGHTS NOT EXCLUSIVE. The rights provided for in this Agreement and
the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
7.4 CASH COLLATERAL FOR LETTERS OF CREDIT. If an Event of Default has
occurred and is continuing or this Agreement (or the Revolving Loan Commitment)
shall be terminated for any reason, then the Agent may, and upon request of the
Lenders holding at least sixty six and two-thirds percent (66-2/3%) of the
Revolving Loan Commitments shall, demand (which demand shall be deemed to have
been delivered automatically upon any acceleration of the Loans and other
obligations hereunder pursuant to Section 7.2 hereof), and the Borrower shall
thereupon deliver to the Agent, to be held for the benefit of the Agent and the
Lenders entitled thereto, an amount of cash equal to the amount of Letter of
Credit Participation Liability (determined in accordance with subsection 1.1(c)
hereof) as additional collateral security for the Borrower's Obligations in
respect of any outstanding Lender Letter of Credit and Letter of Credit
Participation Agreement. The Agent may at any time apply any or all of such cash
and cash collateral to the payment of any or all of the Borrower's Obligations
in respect of any Lender Letters of Credit or Letter of Credit Participation
Agreements. Pending such application, the Agent may (but shall not be obligated
to) invest the same in an interest bearing account in the Agent's name, for the
benefit of the Agent and the Lenders entitled thereto, under which deposits are
available for immediate withdrawal, at such bank or financial institution as the
Agent may, in its discretion, select.
ARTICLE VIII - THE AGENT
8.1 APPOINTMENT AND AUTHORIZATION. Each Lender hereby irrevocably
appoints, designates and authorizes the Agent to take such action on its behalf
under the provisions of this Agreement and each other Loan Document and to
exercise such powers and perform such duties as are expressly delegated to it by
the terms of this Agreement or any other Loan Document, together with such
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary contained elsewhere in this Agreement or in any other Loan
Document, the Agent shall not have any duties or responsibilities, except those
expressly set forth herein, nor shall the Agent have or be deemed to have any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Agent.
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8.2 DELEGATION OF DUTIES. The Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
8.3 LIABILITY OF AGENT. None of the Agent-Related Persons shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document (except for its own
gross negligence or willful misconduct), or (ii) be responsible in any manner to
any of the Lenders for any recital, statement, representation or warranty made
by the Borrower or any of its Subsidiaries, or any officer thereof, contained in
this Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Agent under or in connection with, this Agreement or any other Loan Document, or
for the value of any Collateral or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document, or
for any failure of the Borrower or any other party to any Loan Document to
perform its obligations hereunder or thereunder. No Agent-Related Person shall
be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the Property, books
or records of the Borrower or any of its Subsidiaries or Affiliates.
8.4 RELIANCE BY AGENT. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile or telephone message,
statement or other document or conversation believed by it to be genuine and to
have been signed, sent or made by the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel to the Borrower), independent
accountants and other experts selected by the Agent. The Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Lenders (or, where an action or waiver need only be approved by the Required
Lenders, by the Required Lenders) as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement or
any other Loan Document in accordance with a request or consent of the Lenders
(or, where an action or waiver need only be approved by the Required Lenders, by
the Required Lenders) and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Lenders.
8.5 NOTICE OF DEFAULT. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default, except with respect
to defaults in the payment of principal, interest and fees required to be paid
to the Agent for the account of the Lenders, unless the Agent shall have
received written notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default." In the event that the Agent receives such a
notice, the Agent shall give notice thereof to the Lenders. The Agent shall take
such action with respect to such Default or Event of Default as shall be
requested by the Required Lenders in accordance with Article VII; PROVIDED,
HOWEVER, that unless and until the Agent shall have received any such request,
the
50
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable or in the best interest of the Lenders.
8.6 CREDIT DECISION. Each Lender expressly acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Borrower and its Subsidiaries shall be deemed to constitute any representation
or warranty by the Agent to any Lender. Each Lender represents to the Agent that
it has, independently and without reliance upon the Agent and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, prospects, operations, property,
financial and other condition and creditworthiness of the Borrower and its
Subsidiaries, and all applicable bank regulatory laws relating to the
transactions contemplated thereby, and made its own decision to enter into this
Agreement and extend credit to the Borrower hereunder. Each Lender also
represents that it will, independently and without reliance upon the Agent and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly herein required to be furnished to the Lenders by the Agent,
the Agent shall not have any duty or responsibility to provide any Lender with
any credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of the Borrower
which may come into the possession of the Agent.
8.7 INDEMNIFICATION. Whether or not the transactions contemplated hereby
shall be consummated, upon demand therefor the Lenders shall indemnify the Agent
(to the extent not reimbursed by or on behalf of the Borrower and without
limiting the obligation of the Borrower to do so), ratably from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses and disbursements of any kind whatsoever which
may at any time (including at any time following the repayment of the Loans and
the termination or resignation of the Agent) be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of this
Agreement or any document contemplated by or referred to herein or the
transactions contemplated hereby or thereby or any action taken or omitted by
the Agent under or in connection with any of the foregoing; provided, HOWEVER,
that no Lender shall be liable for the payment to the Agent of any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements to the extent resulting from the Agent's
gross negligence or willful misconduct. In addition, each Lender shall reimburse
the Agent upon demand for its ratable share of any costs or out-of-pocket
expenses (including Attorney Costs) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein
to the extent that the Agent is not reimbursed for such expenses by or on behalf
of the Borrower. Without limiting the generality of the foregoing, if the
Internal Revenue Service or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that the Agent did not properly
withhold tax from amounts paid to or
51
for the account of any Lender (because the appropriate form was not delivered,
was not properly executed, or because such Lender failed to notify the Agent of
a change in circumstances which rendered the exemption from, or reduction of,
withholding tax ineffective, or for any other reason) such Lender shall
indemnify the Agent fully for all amounts paid, directly or indirectly, by the
Agent as tax or otherwise, including penalties and interest, and including any
taxes imposed by any jurisdiction on the amounts payable to the Agent under this
Section 8.7, together with all related costs and expenses (including Attorney
Costs). The obligation of the Lenders in this Section 8.7 shall survive the
payment of all Obligations hereunder.
8.8 AGENT IN INDIVIDUAL CAPACITY. Antares and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory or other business with the Borrower and its Subsidiaries and
Affiliates as though Antares were not the Agent hereunder and without notice to
or consent of the Lenders. With respect to its Loans, Antares shall have the
same rights and powers under this Agreement as any other Lender and may exercise
the same as though it were not the Agent, and the terms "Lender" and "Lenders"
shall include Antares in its individual capacity.
8.9 SUCCESSOR AGENT. The Agent may resign as Agent upon thirty (30) days'
prior notice to the Lenders and to the Borrower. If the Agent shall resign as
Agent under this Agreement, the Required Lenders shall appoint from among the
Lenders a successor agent for the Lenders. If no successor agent is appointed
prior to the effective date of the resignation of the Agent, the Agent may
thereupon appoint a successor agent from among the Lenders reasonably acceptable
to the Borrower. Upon the acceptance of its appointment as successor agent
hereunder, such successor agent shall succeed to all the rights, powers and
duties of the retiring Agent and the term "Agent" shall mean such successor
agent and the retiring Agent's appointment, powers and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article VIII and Sections 9.4 and 9.5 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement. If no successor agent has accepted appointment as Agent by
the date which is thirty (30) days following a retiring Agent's notice of
resignation (or, if later, ten (10) days after the date upon which the Agent
designates a successor agent), the retiring Agent's resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of the
duties of the Agent hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above.
8.10 COLLATERAL MATTERS.
(a) The Agent is authorized (but not required) on behalf of all the
Lenders, without the necessity of any notice to or further consent from the
Lenders, from time to time to take any action with respect to any Collateral or
the Collateral Documents which may be necessary to perfect and maintain
perfected the security interest in and Liens upon the Collateral granted
pursuant to the Collateral Documents.
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(b) The Lenders irrevocably authorize the Agent, at its option and in its
discretion, to release any Lien granted to or held by the Agent upon any
Collateral:
(i) upon termination of the Commitments and payment in full of all
Loans and all other Obligations then payable under this Agreement and
under any other Loan Document;
(ii) constituting Property sold or to be sold or disposed of as
part of or in connection with any disposition permitted hereunder;
(iii) consisting of an instrument evidencing Indebtedness or of
any other debt instrument, if the Indebtedness evidenced thereby has been
paid in full; or
(iv) if approved, authorized or ratified in writing by the
Required Lenders or all the Lenders, as the case may be, as provided in
subsection 9.1(f).
Upon request by the Agent at any time, the Lenders will confirm in writing the
Agent's authority to release particular types or items of Collateral pursuant to
this subsection 8.10(b).
(c) Each Lender agrees with and in favor of each other Lender (which
agreement shall not be for the benefit of the Borrower or any of its
Subsidiaries) that the Borrower's obligation to such Lender under this Agreement
and the other Loan Documents shall be equally and ratably secured by any real
property and/or other collateral now or hereafter securing any obligations of
the Borrower or any of its Subsidiaries to such Lender, whether or not the same
constitutes Collateral hereunder.
ARTICLE IX - MISCELLANEOUS
9.1 AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by the Borrower therefrom, shall be effective unless the same shall be
in writing and signed by the Required Lenders, the Borrower and acknowledged by
the Agent, and then such waiver shall be effective only in the specific instance
and for the specific purpose for which given; PROVIDED, HOWEVER, that no such
waiver, amendment, or consent shall, unless in writing and signed by all the
Lenders, the Borrower and acknowledged by the Agent, do any of the following:
(a) increase or extend the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to subsection 7.2(a)) or increase the Aggregate
Revolving Loan Commitment;
(b) postpone or delay any date fixed for, or waive, any payment of
principal, interest, fees or other amounts due to the Lenders (or any of them)
hereunder or under any other Loan Document (other than any postponement or delay
of any date fixed for any mandatory prepayment of the Loans pursuant to
subsection 1.8(c) or 1.8(d));
53
(c) reduce the principal of, or the rate of interest specified herein or
the amount of interest payable in cash specified herein on any Loan, or of any
fees or other amounts payable hereunder or under any other Loan Document;
(d) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans which shall be required for the Lenders or any of
them to take any action hereunder;
(e) amend this Section 9.1 or the definition of "Required Lenders" or any
provision providing for consent or other action by all Lenders; or
(f) discharge the Borrower or any of its Subsidiaries from their
respective Obligations under the Loan Documents, or release all or substantially
all of the Collateral except as otherwise may be provided in this Agreement or
the other Loan Documents;
and, PROVIDED FURTHER, that no amendment, waiver or consent shall, unless in
writing and signed by the Agent in addition to the Required Lenders or all the
Lenders, as the case may be, affect the rights or duties of the Agent under this
Agreement or any other Loan Document.
9.2 NOTICES.
(a) All notices, requests and other communications provided for hereunder
shall be in writing (including, unless the context expressly otherwise provides,
by facsimile transmission) and mailed by certified or registered mail, faxed or
delivered by personal or overnight delivery, to the address or facsimile number
specified for notices on the applicable signature page hereof; or, if directed
to the Borrower or the Agent, to such other address as shall be designated by
such party in a written notice to each of the other parties hereto given in
compliance herewith, or, if directed to any other party hereto, to such other
address as shall be designated by such party in a written notice given in
compliance herewith to the Borrower and the Agent.
(b) All such notices, requests and communications shall be effective (i)
if delivered in person, when delivered, (ii) if delivered by facsimile
transmission on the date of transmission if transmitted on a Business Day before
4:00 p.m. Chicago Time, otherwise on the next Business Day, (iii) if delivered
by overnight courier, one (1) Business Day after delivery to the courier
properly addressed and (iv) if mailed, upon the third (3rd) Business Day after
the date deposited into the U.S. Mail, certified or registered; except that
notices pursuant to Article I shall not be effective until actually received by
the Agent.
(c) The Borrower acknowledges and agrees that any agreement of the Agent
and the Lenders in Article I hereof to receive certain notices by telephone and
facsimile transmission is solely for the convenience and at the request of the
Borrower. The Agent and the Lenders shall be entitled to rely on the authority
of any Person purporting to be a Person authorized by the Borrower to give such
notice and the Agent and the Lenders shall not have any liability to the
Borrower or other Persons on account of any action taken or not taken by the
Agent or the Lenders in reliance upon such telephonic or facsimile notice. The
obligation of the Borrower to repay the Loans shall not be affected in any way
or to any extent by any failure by the Agent and the Lenders to receive written
confirmation of any telephonic or facsimile notice or the receipt
54
by the Agent and the Lenders of a confirmation which is at variance with the
terms understood by the Agent and the Lenders to be contained in the telephonic
or facsimile notice.
9.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no delay
in exercising, on the part of the Agent or any Lender, any right, remedy, power
or privilege hereunder, shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. No course of dealing between the Borrower, any
Affiliate of the Borrower, Agent or any Lender shall be effective to amend,
modify or discharge any provision of this Agreement or any of the other Loan
Documents.
9.4 COSTS AND EXPENSES. Whether or not the transactions contemplated
hereby shall be consummated, the Borrower shall pay or reimburse:
(a) Antares (including in its capacity as Agent) within five (5) Business
Days after demand (except as otherwise provided in subsection 2.1(f)) for all
reasonable out-of-pocket costs and expenses incurred by Antares (including in
its capacity as Agent) in connection with the development, preparation,
syndication, delivery, administration and execution of, and any amendment,
supplement, waiver or modification to (in each case, whether or not
consummated), this Agreement, any other Loan Document and any other documents
prepared in connection herewith or therewith, and the consummation of the
transactions contemplated hereby and thereby, including the Attorney Costs
incurred by Antares (including in its capacity as Agent) with respect thereto
and for all out-of-pocket costs and expenses incurred by it in connection with
the enforcement, attempted enforcement, or preservation of any rights or
remedies during the existence of an Event of Default (including in connection
with any "workout" or restructuring regarding the Loans, and including in any
Insolvency Proceeding or appellate proceeding) under this Agreement, any other
Loan Document, and any such other documents;
(b) pay or reimburse Lenders within five (5) Business Days after demand
for all Attorney Costs of one law firm, on behalf of all Lenders (other than
Antares) incurred by them in connection with the enforcement, attempted
enforcement, or preservation of any rights or remedies during the existence of
an Event of Default (including in connection with any "workout" or restructuring
regarding the Loans, and including in any Insolvency Proceeding or appellate
proceeding) under this Agreement, any other Loan Document; and
(c) pay or reimburse Agent within five (5) Business Days after demand for
all out-of-pocket appraisal, audit, environmental inspection and review
(including the allocated cost of such internal services), search and filing
costs, fees and expenses, incurred or sustained by Agent in connection with the
matters referred to under clause (a) of this Section 9.4.
9.5 INDEMNITY. The Borrower shall indemnify, defend and hold harmless
each Lender, the Agent and each of their respective officers, directors,
employees, counsel, agents and attorneys-in-fact (each, an "Indemnified Person")
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, charges, expenses or disbursements
(including Attorney Costs):
55
(a) of any kind or nature whatsoever with respect to the enforcement of
this Agreement and any other Loan Documents, or the transactions contemplated
hereby and thereby, and with respect to any investigation, litigation or
proceeding (including any Insolvency Proceeding or appellate proceeding) related
to this Agreement or the Loans or transactions contemplated hereby or the use of
the proceeds thereof, whether or not any Indemnified Person is a party thereto;
and
(b) which may be incurred by or asserted against such Indemnified Person
in connection with or arising out of any pending or threatened investigation,
litigation or proceeding, or any action taken by any Person, with respect to any
Environmental Claim arising out of or related to any Property of the Borrower or
any of its Subsidiaries;
(all the foregoing, collectively, the "Indemnified Liabilities"); PROVIDED, that
the Borrower shall have no obligation hereunder to any Indemnified Person with
respect to Indemnified Liabilities to the extent arising from the gross
negligence or willful misconduct of such Indemnified Person as determined by a
court of competent jurisdiction.
No action taken by legal counsel chosen by the Agent or any Lender in
defending against any investigation, litigation or proceeding or requested
remedial, removal or response action shall vitiate or any way impair the
Borrower's obligation and duty hereunder to indemnify and hold harmless the
Agent and each Lender. In no event shall any site visit, observation, or testing
by the Agent or any Lender (or any contractee of the Agent or any Lender) be
deemed a representation or warranty that Hazardous Materials are or are not
present in, on, or under, the site, or that there has been or shall be
compliance with any Environmental Law. Neither the Borrower nor any other Person
is entitled to rely on any site visit, observation, or testing by the Agent or
any Lender. Neither the Agent nor any Lender owes any duty of care to protect
the Borrower or any other Person against, or to inform the Borrower or any other
Person of, any Hazardous Materials or any other adverse condition affecting any
site or Property. Neither the Agent nor any Lender shall be obligated to
disclose to the Borrower or any other Person any report or findings made as a
result of, or in connection with, any site visit, observation, or testing by the
Agent or any Lender.
The obligations in this Section 9.5 shall survive payment of all other
Obligations. At the election of any Indemnified Person, the Borrower shall
defend such Indemnified Person using legal counsel satisfactory to such
Indemnified Person in such Person's sole discretion, at the sole cost and
expense of the Borrower. All amounts owing under this Section 9.5 shall be paid
within thirty (30) days after demand.
9.6 MARSHALING; PAYMENTS SET ASIDE. Neither the Agent nor any Lender
shall be under any obligation to marshal any assets in favor of the Borrower or
any other Person or against or in payment of any or all of the Obligations. To
the extent that the Borrower makes a payment or payments to the Agent or any
Lender, or the Agent or any Lender enforces its Liens or exercises its rights of
setoff, and such payment or payments or the proceeds of such enforcement or
setoff or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Agent in its discretion) to be repaid to a
trustee, receiver or any other party in connection with any Insolvency
Proceeding, or otherwise, then:
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(a) to the extent of such recovery the Obligation or part thereof
originally intended to be satisfied shall be revived and continued in full force
and effect as if such payment had not been made or such enforcement or setoff
had not occurred; and
(b) each Lender severally agrees to pay to the Agent upon demand its
ratable share of the total amount so recovered from or repaid by the Agent.
9.7 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns; PROVIDED that any assignment by any Lender shall be
subject to the provisions of Section 9.8 hereof, and PROVIDED FURTHER that the
Borrower may not assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of the Agent and each Lender.
9.8 ASSIGNMENTS, PARTICIPATIONS, ETC.
(a) Any Lender may, with the written consent of Borrower, which consent
shall not be unreasonably withheld (provided that such consent of Borrower shall
not be required at any time that a Default or an Event of Default exists), and
Agent (provided that the written consent of neither the Agent nor the Borrower
shall be required in connection with any assignment and delegation by a Lender
to an Eligible Assignee that is an Affiliate of such Lender), at any time assign
and delegate to one or more Eligible Assignees (each an "Assignee") all, or any
part of, the Loans, the Commitments and the other rights and obligations of such
Lender hereunder, in a minimum amount of $3,000,000 (or such lesser amount to
which Agent, in its sole discretion, may agree) or, if less, the entire
Commitment or Loan(s) of such Lender; PROVIDED, THAT, the Borrower and the Agent
may continue to deal solely and directly with such Lender in connection with the
interest so assigned to an Assignee until:
(i) written notice of such assignment, together with payment
instructions, addresses and related information with respect to the
Assignee, shall have been given to the Borrower and the Agent by such
Lender and the Assignee;
(ii) such Lender and its Assignee shall have delivered to the
Borrower and the Agent an Assignment and Acceptance in form and substance
reasonably satisfactory to Agent, such Lender and its Assignee (an
"Assignment and Acceptance"); and
(iii) the assignor Lender or the Assignee has paid to the Agent a
processing fee in the amount of $3,500; provided no processing fee shall
be required to be paid in connection with an assignment by a Lender to an
Eligible Assignee that is an Affiliate of such Lender or a Related Fund
of such Lender.
(b) Subject to the provisions of subsection 9.8(f) below, from and after
the date that the Agent notifies the assignor Lender that the Agent has received
and provided its consent with respect to an executed Assignment and Acceptance
and payment of the above-referenced processing fee (if applicable):
(i) the Assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it
pursuant to such Assignment
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and Acceptance, shall have the rights and obligations of a Lender under
this Agreement and the other Loan Documents; and
(ii) the assignor Lender shall, to the extent that rights and
obligations hereunder and under the other Loan Documents have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights and be released from its obligations under the Loan Documents.
(c) Subject to the provisions of subsection 9.8(f) below, immediately
upon the making of the processing fee payment to the Agent in respect of the
Assignment and Acceptance, if applicable, this Agreement shall be deemed to be
amended to the extent, but only to the extent, necessary to reflect the addition
of the Assignee and the resulting adjustment of the Commitments arising
therefrom. The Commitment allocated to each Assignee shall reduce such
Commitment of the assigning Lender to the same extent.
(d) Any Lender may at any time sell to one or more commercial banks or
other Persons not Affiliates of the Borrower (a "Participant") participating
interests in any Loans, the Commitment of that Lender and the other interests of
that Lender (the "Originating Lender") hereunder and under the other Loan
Documents; PROVIDED, HOWEVER, that:
(i) the Originating Lender's obligations under this Agreement
shall remain unchanged;
(ii) the Originating Lender shall remain solely responsible for
the performance of such obligations;
(iii) the Borrower and the Agent shall continue to deal solely and
directly with the Originating Lender in connection with the Originating
Lender's rights and obligations under this Agreement and the other Loan
Documents; and
(iv) no Lender shall transfer or grant any participating interest
under which the Participant shall have rights to approve any amendment
to, or any consent or waiver with respect to, this Agreement or any other
Loan Document, except to the extent such amendment, consent or waiver
would require unanimous consent of the Lenders as described in the FIRST
proviso to Section 9.1.
In the case of any such participation, the Participant shall not have any rights
under this Agreement, or any of the other Loan Documents, and all amounts
payable by the Borrower hereunder shall be determined as if such Lender had not
sold such participation.
(e) Notwithstanding any other provision contained in this Agreement or
any other Loan Document to the contrary, any Lender may (i) assign all or any
portion of the Loans held by it to any Federal Reserve Bank or the United States
Treasury as collateral security pursuant to Regulation A of the Federal Reserve
Board and any Operating Circular issued by such Federal Reserve Bank, or (ii)
pledge all or any portion of the Loans held by it (and Notes evidencing such
Loans) to its unaffiliated lenders for collateral security purposes; PROVIDED,
that any payment in respect of such assigned Loans made by the Borrower to or
for the account of the assigning or pledging Lender in accordance with the terms
of this Agreement shall satisfy the
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Borrower's obligations hereunder in respect to such assigned or pledged Loans to
the extent of such payment. No such assignment or pledge shall release the
assigning Lender from its obligations hereunder.
(f) The Agent shall, on behalf of the Borrower, maintain at its address
referred to in Section 9.2 a copy of each Assignment and Acceptance delivered to
it and a register (the "Register") for the recordation of the names and
addresses of the Lenders and the Commitment of, and principal amount of the
Loans owing to, each Lender from time to time. The entries in the Register shall
be conclusive, in the absence of demonstrable error, and the Borrower, the Agent
and the Lenders shall treat each Person whose name is recorded in the Register
as the owner of the Commitments, Loans and any Notes evidencing such Loans
recorded therein for all purposes of this Agreement. Any assignment of any
Commitment and/or Loan, whether or not evidenced by a Note, shall be effective
only upon appropriate entries with respect thereto being made in the Register.
Any assignment or transfer of all or part of a Commitment and/or Loan evidenced
by a Note shall be registered on the Register only upon a surrender or
registration of assignment or transfer of the Note evidencing such Loan,
accompanied by a duly executed Assignment and Acceptance; thereupon one or more
new Notes in the same aggregate principal amount shall be issued to the
designated assignee and, if applicable, assignor, and the old Notes shall be
returned by the Agent to the Borrower marked "cancelled." The Register shall be
available for inspection by the Borrower or any Lender (with respect to any
entry relating to such Lender's Commitments and Loans) at any reasonable time
and from time to time upon reasonable prior notice.
9.9 CONFIDENTIALITY. Each of the Agent and the Lenders shall maintain and
hold in confidence in accordance with its customary procedures for handling
confidential information and in accordance with safe and sound banking
practices, all nonpublic information that the Borrower or any of its
Subsidiaries, or any of their authorized representatives, furnishes to the Agent
or any Lender pursuant to the requirements of this Agreement ("Confidential
Information"), other than any such Confidential Information that becomes
generally available to the public other than as a result of a breach by the
Agent or any Lender of its obligations hereunder or that is or becomes available
to the Agent or such Lender from a source other than the Borrower or any of its
Subsidiaries, or any of their authorized representatives, and that is not, to
the actual knowledge of the recipient thereof, subject to obligations of
confidentiality with respect thereto; PROVIDED, HOWEVER, that the Agent and each
Lender shall in any event have the right to deliver copies of any such
documents, and to disclose any such information, to:
(a) its directors, officers, trustees, partners, employees, agents,
attorneys, professional consultants, portfolio management services and rating
agencies; PROVIDED, that such information shall be disclosed to the extent a
legitimate business purpose exists for doing so and such purpose relates to the
existing relationship among the Borrower, the Agent and the Lenders evidenced by
this Agreement, the credit facility evidenced hereby or the loan portfolio of
the Agent or such Lender containing the credit evidenced hereby;
(b) any other Lender and any successor Agent;
(c) any potential Assignee or potential Participant to which such Lender
offers to sell any Loan or any part thereof or interest or participation therein
or any other Person necessary for
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purposes of effectuating any transaction contemplated by subsection 9.8(e)
(PROVIDED such Person agrees to keep such information confidential on the terms
set forth in this Section 9.9);
(d) any federal or state regulatory authority or examiner, or any
insurance industry association or any stock exchange, regulating or having
jurisdiction over the Agent or such Lender or any of their respective
Affiliates; and
(e) any other Person to which such delivery or disclosure may be
necessary or appropriate (i) in compliance with any applicable law, rule,
regulation or order, (ii) in response to any subpoena or other legal process or
informal investigative demand, (iii) in connection with any litigation to which
the Agent or such Lender is a party, or (iv) in connection with the enforcement
of the rights and remedies of the Agent or the Lenders under this Agreement and
the other Loan Documents at any time when an Event of Default shall have
occurred and be continuing.
9.10 SET-OFF; SHARING OF PAYMENTS. In addition to any rights and remedies
now or hereafter granted under applicable law, and not by way of limitation of
any such rights or remedies at any time and from time to time, upon the
occurrence and during the continuation of any Event of Default, each Lender is
hereby authorized by the Borrower, with reasonably prompt subsequent notice to
the Borrower or to any other Person (any prior or contemporaneous notice being
hereby expressly waived by the Borrower) to set off and to appropriate and to
apply any and all:
(a) balances held by such Lender at any of its offices for the account of
the Borrower or any of its Subsidiaries (regardless of whether such balances are
then due to the Borrower or any of its Subsidiaries); and
(b) other Property at any time held or owing by such Lender to or for the
credit or for the account of the Borrower or any of its Subsidiaries;
against and on account of any and all Obligations which are not paid when due;
except that no Lender shall exercise such right without the prior written
consent of the Agent. Any Lender having a right to set off shall purchase for
cash (and the other Lenders shall sell) participations in each such other
Lender's pro rata share of the Obligations as would be necessary to cause such
Lender to share the benefit of such right of set-off with each other Lender in
accordance with their respective pro rata shares of the Obligations. The
Borrower agrees, to the fullest extent permitted by law, that (i) any Lender may
exercise its right to set off with respect to amounts in excess of its pro rata
share of the Obligations and may sell participations to other Lenders, and (ii)
any Lender so purchasing a participation in the Obligations held by other
Lenders may exercise all rights of setoff, bankers' lien, counterclaim or
similar rights with respect to such participation as fully as if such Lender
were a direct holder of Obligations in the amount of such participation. The
Borrower hereby grants to each Lender a security interest in all such deposits
and other Property, whether now existing or hereafter arising, held by each
Lender for the purposes set forth herein.
9.11 NOTIFICATION OF ADDRESSES, LENDING OFFICES, ETC. Each Lender shall
notify the Agent in writing of any changes in the address to which notices to
such Lender should be
60
directed, of addresses of its Lending Office, of payment instructions in respect
of all payments to be made to it hereunder and of such other administrative
information as the Agent shall reasonably request.
9.12 COUNTERPARTS. This Agreement may be executed by one or more of the
parties to this Agreement in any number of separate counterparts, each of which,
when so executed, shall be deemed an original, and all of said counterparts
taken together shall be deemed to constitute but one and the same instrument. A
set of the copies of this Agreement signed by all the parties shall be lodged
with each of the Borrower and the Agent.
9.13 SEVERABILITY. The illegality or unenforceability of any provision of
this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
Any Loan Document, or other agreement, document or instrument, delivered by
facsimile transmission shall have the same force and effect as if the original
thereof had been delivered.
9.14 CAPTIONS. The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
9.15 INDEPENDENCE OF PROVISIONS. The parties hereto acknowledge that this
Agreement and other Loan Documents may use several different limitations, tests
or measurements to regulate the same or similar matters, and that such
limitations, tests and measurements are cumulative and must each be performed,
except as expressly stated to the contrary in this Agreement.
9.16 INTERPRETATION. This Agreement is the result of negotiations among
and has been reviewed by counsel to the Agent, the Borrower and other parties
hereto, and is the product of all parties hereto. Accordingly, this Agreement
and the other Loan Documents shall not be construed against the Lenders or the
Agent merely because of the Agent's or Lenders' involvement in the preparation
of such documents and agreements.
9.17 NO THIRD PARTIES BENEFITED. This Agreement is made and entered into
for the sole protection and legal benefit of the Borrower, the Lenders and the
Agent, and their permitted successors and assigns, and no other Person shall be
a direct or indirect legal beneficiary of, or have any direct or indirect cause
of action or claim in connection with, this Agreement or any of the other Loan
Documents. Neither the Agent nor any Lender shall have any obligation to any
Person not a party to this Agreement or the other Loan Documents.
9.18 GOVERNING LAW AND JURISDICTION.
(A) THIS AGREEMENT AND EACH NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS AND DECISIONS OF THE STATE OF ILLINOIS,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES; PROVIDED, THAT THE AGENT AND THE
LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(B) THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
00
XXX-XXXXXXXXX XXXXXXXXXXXX XX XXX XXXXXX XXXXXX FEDERAL OR ILLINOIS STATE COURT
SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENT AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER
HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT
THE RIGHT OF AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN
THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER
AGAINST AGENT OR ANY LENDER OR ANY AFFILIATE THEREOF INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
(C) THE BORROWER DESIGNATES AND APPOINTS CT CORPORATION SYSTEM AND SUCH
OTHER PERSONS AS MAY HEREAFTER BE SELECTED BY THE BORROWER WHICH IRREVOCABLY
AGREE IN WRITING TO SO SERVE AS ITS AGENT TO RECEIVE ON ITS BEHALF SERVICE OF
ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY
ACKNOWLEDGED BY THE BORROWER TO BE EFFECTIVE AND BINDING SERVICE IN EVERY
RESPECT. A COPY OF ANY SUCH PROCESS SO SERVED SHALL BE MAILED BY REGISTERED MAIL
TO THE BORROWER AT ITS ADDRESS PROVIDED IN SECTION 9.2 EXCEPT THAT UNLESS
OTHERWISE PROVIDED BY APPLICABLE LAW, ANY FAILURE TO MAIL SUCH COPY SHALL NOT
AFFECT THE VALIDITY OF SERVICE OF PROCESS. IF ANY AGENT APPOINTED BY THE
BORROWER REFUSES TO ACCEPT SERVICE, THE BORROWER HEREBY AGREES THAT SERVICE UPON
IT BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE. NOTHING HEREIN SHALL AFFECT THE
RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
9.19 WAIVER OF JURY TRIAL. THE BORROWER, THE LENDERS AND THE AGENT EACH
WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST
ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT
CLAIMS, OR OTHERWISE. THE BORROWER, THE LENDERS AND THE AGENT EACH AGREE THAT
ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A
JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR
RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO
ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART,
TO CHALLENGE
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THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR
ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS.
9.20 ENTIRE AGREEMENT; RELEASE. This Agreement, together with the other
Loan Documents, embodies the entire agreement and understanding among the
Borrower, the Lenders and the Agent, and supersedes all prior or contemporaneous
Agreements and understandings of such Persons, oral or written, relating to the
subject matter hereof and thereof, and any prior arrangements made with respect
to the payment by the Borrower of (or any indemnification for) any fees, costs
or expenses payable to or incurred (or to be incurred) by or on behalf of the
Agent or the Lenders. The Borrower has relied exclusively on the terms and
provisions contained in this Agreement and the other Loan Documents in its
execution and delivery hereof and thereof and entering into the transactions
which are the subject hereof and thereof. Execution of this Agreement by the
Borrower constitutes a full, complete and irrevocable release of any and all
claims which the Borrower may have at law or in equity in respect of all prior
discussions and understandings, oral or written, relating to the subject matter
of this Agreement and the other Loan Documents as of the date hereof. Neither
Agent nor any Lender shall be liable to the Borrower or any other Person on any
theory of liability for any special, indirect, consequential or punitive
damages.
ARTICLE X - TAXES, YIELD PROTECTION AND ILLEGALITY
10.1 TAXES.
(a) Subject to subsection 10.1(g), any and all payments by the Borrower
to each Lender or the Agent under this Agreement shall be made free and clear
of, and without deduction or withholding for, any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all liabilities
with respect thereto, excluding, in the case of each Lender and the Agent, such
taxes (including income taxes or franchise taxes) as are imposed on or measured
by each Lender's net income by the jurisdiction under the laws of which such
Lender or the Agent, as the case may be, is organized or maintains a Lending
Office, or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes").
(b) In addition, the Borrower shall pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Loan Document (hereinafter referred to as "Other Taxes").
(c) Subject to subsection 10.1(g), the Borrower shall indemnify and hold
harmless each Lender and the Agent for the full amount of Taxes or Other Taxes
(including any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 10.1) paid by such Lender or the Agent and any
liability (including penalties, interest, additions to tax and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes
63
were correctly or legally asserted; PROVIDED, that each Lender or the Agent, as
the case may be, making demand for such indemnity payment shall provide the
Borrower with evidence that such Lender or the Agent, as the case may be, has
made payment of such Taxes or Other Taxes. Payment under this indemnification
shall be made within thirty (30) days from the date any Lender or the Agent
makes written demand therefor.
(d) If the Borrower shall be required by law to deduct or withhold any
Taxes or Other Taxes from or in respect of any sum payable hereunder to any
Lender or the Agent, then, subject to subsection 10.1(g):
(i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to
additional sums payable under this Section 10.1) such Lender or the
Agent, as the case may be, receives an amount equal to the sum it would
have received had no such deductions been made;
(ii) the Borrower shall make such deductions; and
(iii) the Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with
applicable law;
PROVIDED, that, if any additional payment is made by the Borrower under this
clause (d) for the benefit of the Agent or any Lender and the Agent or such
Lender, as applicable, determines that it has obtained a credit against, a
relief or remission for, or repayment of, the underlying Tax or Other Tax from
the appropriate taxing authority, then, to the extent the Agent or such Lender,
as applicable, determines that such credit, relief, remission or repayment is in
respect of, or calculated or determined with reference to, and retroactively
applies to, such additional payment made by the Borrower for the benefit of the
Agent or such Lender pursuant to this clause (d), the Agent or such Lender, as
applicable, shall, to the extent that it can do so without prejudice to the
retention of the amount of such credit, relief, remission or repayment, pay to
the Borrower such amount as the Agent or such Lender, as applicable, shall
determine to be the amount which shall leave it (after such payment to the
Borrower) in no better or worse after-tax position that it would have been in
had the respective withholding or deduction not been required.
(e) Within thirty (30) days after the date of any payment by the Borrower
of Taxes or Other Taxes, the Borrower shall furnish to the Agent the original or
a certified copy of a receipt evidencing payment thereof, or other evidence of
payment satisfactory to the Agent.
(f) Each Lender that is not a citizen or resident of the United States of
America, a corporation, partnership or other entity created or organized in or
under the laws of the United States (or any jurisdiction thereof), or any estate
or trust that is subject to federal income taxation regardless of the source of
its income (a "Non-U.S. Lender") shall deliver to the Borrower and the Agent two
copies of each U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, or any
subsequent versions thereof or successors thereto, or, in the case of a Non-U.S.
Lender claiming exemption from U.S. federal withholding tax under Section 871(h)
or 881(c) of the Code with respect to payments of "portfolio interest," a Form
W-8BEN, or any subsequent versions thereof or successors thereto (and, if such
Non-U.S. Lender delivers a Form W-8BEN, a certificate representing that such
Non-U.S. Lender is not a "bank" for purposes of Section 881(c)
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of the Code, is not a ten (10%) percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Code) of the Borrower and is not a controlled
foreign corporation related to the Borrower (within the meaning of Section
864(d)(4) of the Code)), properly completed and duly executed by such Non-U.S.
Lender claiming complete exemption from, or a reduced rate of, U.S. federal
withholding tax on all payments by the Borrower and its Subsidiaries under this
Agreement and the other Loan Documents. Such forms shall be delivered by each
Non-U.S. Lender on or before the date it becomes a party to this Agreement. In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this subsection, a Non-U.S. Lender shall not be required to
deliver any form pursuant to this subsection that such Non-U.S. Lender is not
legally able to deliver.
(g) The Borrower will not be required to pay any additional amounts in
respect of United States Federal income tax pursuant to subsection 10.1(d) to
any Lender for the account of any Lending Office of such Lender:
(i) if the obligation to pay such additional amounts would not
have arisen but for a failure by such Lender to comply with its
obligations under subsection 10.1(f) in respect of such Lending Office;
or
(ii) if such Lender shall have delivered to the Borrower a Form
W-8BEN and/or Form W-8ECI (or any subsequent versions thereof or
successors thereto) in respect of such Lending Office pursuant to
subsection 10.1(f), and such Lender shall not at any time be entitled to
exemption from deduction or withholding of United States Federal income
tax in respect of payments by the Borrower hereunder for the account of
such Lending Office for any reason other than a change in United States
law, treaty or regulations or in the official interpretation of such law
or regulations by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force
of law) after the date of delivery of such Form W-8BEN and/or Form W-8ECI
(or any subsequent versions thereof or successors thereto); or
(iii) if such Lender has been notified by the Internal Revenue
Service that such Lender is subject to backup withholding for failing to
report interest and dividends received, unless and except to the extent
such notice is revoked, terminated or otherwise overturned or vacated.
(h) If, at any time, the Borrower requests any Lender to deliver any
forms or other documentation pursuant to subsection 10.1(f), then the Borrower
shall, on demand of such Lender through the Agent, reimburse such Lender for any
costs and expenses (including Attorney Costs) reasonably incurred by such Lender
in the preparation or delivery of such forms or other documentation.
(i) If the Borrower is required to pay additional amounts to any Lender
or the Agent pursuant to subsection 10.1(d), then such Lender shall use its
reasonable best efforts (consistent
65
with legal and regulatory restrictions) to change the jurisdiction of its
Lending Office so as to eliminate any such additional payment by the Borrower
which may thereafter accrue if such change in the judgment of such Lender is not
otherwise disadvantageous to such Lender. Further, within thirty (30) days of
written request of the Borrower therefor, the Agent or the applicable Lender, as
the case may be, shall execute and deliver to the Borrower, at the sole cost of
the Borrower, such certificates, forms or other documents reasonably requested
by the Borrower that can be furnished consistent with the facts and which are
reasonably necessary to assist the Borrower in applying for refunds of those
taxes remitted hereunder.
10.2 ILLEGALITY. (a) If after the date hereof any Lender shall determine
in good faith that the introduction of any Requirement of Law, or any change in
any Requirement of Law or in the interpretation or administration thereof, has
made it unlawful, or that any central bank or other Governmental Authority has
asserted that it is unlawful, for any Lender or its Lending Office to make LIBOR
Rate Loans, then, on notice thereof by such Lender to the Borrower through the
Agent, the obligation of that Lender to make LIBOR Rate Loans shall be suspended
until such Lender shall have notified the Agent and the Borrower that the
circumstances giving rise to such determination no longer exists.
(a) Subject to clause (c) below, if any Lender shall determine that it is
unlawful to maintain any LIBOR Rate Loan, the Borrower shall prepay in full all
LIBOR Rate Loans of such Lender then outstanding, together with interest accrued
thereon, either on the last day of the Interest Period thereof if such Lender
may lawfully continue to maintain such LIBOR Rate Loans to such day, or
immediately, if such Lender may not lawfully continue to maintain such LIBOR
Rate Loans, together with any amounts required to be paid in connection
therewith pursuant to Section 10.4.
(b) If the obligation of any Lender to make or maintain LIBOR Rate Loans
has been terminated, the Borrower may elect, by giving notice to such Lender
through the Agent that all Loans which would otherwise be made by any such
Lender as LIBOR Rate Loans shall be instead Base Rate Loans.
(c) Before giving any notice to the Agent pursuant to this Section 10.2,
the affected Lender shall designate a different Lending Office with respect to
its LIBOR Rate Loans if such designation will avoid the need for giving such
notice or making such demand and will not, in the judgment of the Lender, be
illegal or otherwise disadvantageous to the Lender.
10.3 INCREASED COSTS AND REDUCTION OF RETURN.
(a) If any Lender shall determine in good faith that, due to either (i)
the introduction of, or any change in, or in the interpretation of, any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other Governmental Authority (whether or not having the force of law),
in the case of either clause (i) or (ii) subsequent to the date hereof, there
shall be any increase in the cost to such Lender of agreeing to make or making,
funding or maintaining any LIBOR Rate Loans, then the Borrower shall be liable
for, and shall from time to time, within thirty (30) days of demand therefor by
such Lender (with a copy of such demand to the Agent), pay to the Agent for the
account of such Lender, additional amounts as are sufficient to compensate such
Lender for such increased costs.
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(b) If any Lender shall have determined in good faith that:
(i) the introduction of any Capital Adequacy Regulation;
(ii) any change in any Capital Adequacy Regulation;
(iii) any change in the interpretation or administration of any
Capital Adequacy Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof; or
(iv) compliance by such Lender (or its Lending Office) or any
corporation controlling the Lender, with any Capital Adequacy Regulation;
affects the amount of capital required or expected to be maintained by such
Lender or any corporation controlling such Lender and (taking into consideration
such Lender's or such corporation's policies with respect to capital adequacy
and such Lender's desired return on capital) determines that the amount of such
capital is increased as a consequence of its Commitment(s), loans, credits or
obligations under this Agreement, then, within thirty (30) days of demand of
such Lender (with a copy to the Agent), the Borrower shall pay to such Lender,
from time to time as specified by such Lender, additional amounts sufficient to
compensate such Lender for such increase.
10.4 FUNDING LOSSES. The Borrower agrees to reimburse each Lender and to
hold each Lender harmless from any loss or expense which such Lender may sustain
or incur as a consequence of:
(a) the failure of the Borrower to make any payment or mandatory
prepayment of principal of any LIBOR Rate Loan (including payments made after
any acceleration thereof);
(b) the failure of the Borrower to borrow, continue or convert a Loan
after the Borrower has given (or is deemed to have given) a Notice of Borrowing
or a Notice of Continuation/Conversion;
(c) the failure of the Borrower to make any prepayment after the Borrower
has given a notice in accordance with Section 1.7;
(d) the prepayment (including pursuant to Section 1.8 or as a result of
an acceleration) of a LIBOR Rate Loan on a day which is not the last day of the
Interest Period with respect thereto; or
(e) the conversion pursuant to Section 1.6 of any LIBOR Rate Loan to a
Base Rate Loan on a day that is not the last day of the applicable Interest
Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its LIBOR Rate Loans hereunder or from fees
payable to terminate the deposits from which such funds were obtained. Solely
for purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 10.4 and under subsection 10.3(a): each LIBOR Rate Loan made by a
Lender (and each related reserve, special deposit or similar
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requirement) shall be conclusively deemed to have been funded at the LIBOR used
in determining the interest rate for such LIBOR Rate Loan by a matching deposit
or other borrowing in the interbank eurodollar market for a comparable amount
and for a comparable period, whether or not such LIBOR Rate Loan is in fact so
funded.
10.5 INABILITY TO DETERMINE RATES. If the Agent shall have determined in
good faith that for any reason adequate and reasonable means do not exist for
ascertaining the LIBOR for any requested Interest Period with respect to a
proposed LIBOR Rate Loan or that the LIBOR applicable pursuant to subsection
1.3(a) for any requested Interest Period with respect to a proposed LIBOR Rate
Loan does not adequately and fairly reflect the cost to the Lenders of funding
such Loan, the Agent will forthwith give notice of such determination to the
Borrower and each Lender. Thereafter, the obligation of the Lenders to make or
maintain LIBOR Rate Loans hereunder shall be suspended until the Agent revokes
such notice in writing. Upon receipt of such notice, the Borrower may revoke any
Notice of Borrowing or Notice of Continuation/ Conversion then submitted by the
Borrower. If the Borrower does not revoke such notice, the Lenders shall make,
convert or continue the Loans, as proposed by the Borrower, in the amount
specified in the applicable notice submitted by the Borrower, but such Loans
shall be made, converted or continued as Base Rate Loans.
10.6 RESERVES ON LIBOR RATE LOANS. The Borrower shall pay to each Lender,
as long as such Lender shall be required under regulations of the Federal
Reserve Board to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency funds or deposits (currently known as
"Eurocurrency liabilities"), additional costs on the unpaid principal amount of
each LIBOR Rate Loan equal to actual costs of such reserves allocated to such
Loan by such Lender (as determined by such Lender in good faith, which
determination shall be conclusive absent demonstrable error), payable on each
date on which interest is payable on such Loan; PROVIDED the Borrower shall have
received at least fifteen (15) days' prior written notice (with a copy to the
Agent) of such additional interest from the Lender. If a Lender fails to give
notice fifteen (15) days prior to the relevant Interest Payment Date, such
additional interest shall be payable fifteen (15) days from receipt of such
notice.
10.7 CERTIFICATES OF LENDERS. Any Lender claiming reimbursement or
compensation pursuant to this Article X shall deliver to the Borrower (with a
copy to the Agent) a certificate setting forth in reasonable detail the amount
payable to such Lender hereunder and such certificate shall be conclusive and
binding on the Borrower in the absence of manifest error.
10.8 SURVIVAL. The agreements and obligations of the Borrower in this
Article X shall survive the payment of all other Obligations.
10.9 REPLACEMENT OF LENDER IN RESPECT OF INCREASED COSTS. Within
forty-five (45) days after receipt by the Borrower of written notice and demand
from any Lender (an "Affected Lender") for payment of additional costs as
provided in Sections 10.1, 10.3 and 10.6, the Borrower may, at its option,
notify the Agent and such Affected Lender of the Borrower's intention to obtain,
at the Borrower's expense, a replacement Lender ("Replacement Lender") for such
Affected Lender, which Replacement Lender shall be reasonably satisfactory to
the Agent. In the event the Borrower obtains a Replacement Lender within ninety
(90) days following notice of its intention to do so, the Affected Lender shall
sell and assign its Loans and
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Commitments to such Replacement Lender; PROVIDED, that the Borrower has
reimbursed such Affected Lender for its increased costs for which it is entitled
to reimbursement under this Agreement through the date of such sale and
assignment.
ARTICLE XI - RESERVED
ARTICLE XII - DEFINITIONS
12.1 DEFINED TERMS. The following terms are defined in the Sections or
subsections referenced opposite such terms:
"Accrual Period" 1.3(b)
"Affected Lender" 10.9
"Assignee" 9.8(a)
"Assignment and Acceptance" 9.8(a)(ii)
"Borrower" Preamble
"Borrowing Base" 1.1(b)
"Cash Contribution" 6.6(b)
"Commitment Fee" 1.9(b)
"Confidential Information" 9.9
"EBITDA" Exhibit 4.2(b)
"Event of Default" 7.1
"Fixed Charge Coverage Ratio" Exhibit 4.2(b)
"Indemnified Person" 9.5
"Indemnified Liabilities" 9.5
"Lender" Preamble
"Lender Letter of Credit" 1.1(c)
"Letter of Credit Participation Agreement" 1.1(c)
"Letter of Credit Participation Fee" 1.9(c)
"Leverage Ratio" Exhibit 4.2(b)
"Maximum Revolving Loan Balance" 1.1(b)
"Originating Lender" 9.8(d)
"Other Taxes" 10.1(b)
"Participant" 9.8(d)
"Permitted Liens" 5.1
"Restricted Payments" 5.11
"Replacement Lender" 10.9
"Revolving Loan Commitment" 1.1(b)
"Revolving Loan" 1.1(b)
"Taxes" 10.1(a)
"Transaction" 5.7(f)
In addition to the terms defined elsewhere in this Agreement, the following
terms have the following meanings:
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"Account" means, as at any date of determination, all "accounts" (as such
term is defined in the UCC) of the Borrower and its Subsidiaries, including,
without limitation, the unpaid portion of the obligation of a customer of the
Borrower and its Subsidiaries in respect of Inventory purchased by and shipped
to such customer and/or the rendition of services by the Borrower and its
Subsidiaries, as stated on the respective invoices of the Borrower and its
Subsidiaries, net of any credits, rebates or offsets owed to such customer.
"Account Debtor" means the customer of a Borrower and its Subsidiaries
who is obligated on or under an Account.
"Acquisition" means any transaction or series of related transactions for
the purpose of or resulting, directly or indirectly, in (a) the acquisition of
all or substantially all of the assets of a Person, or of any business or
division of a Person, (b) the acquisition of in excess of fifty percent (50%) of
the capital stock, partnership interests or equity of any Person or otherwise
causing any Person to become a Subsidiary of the Borrower, or (c) a merger or
consolidation or any other combination with another Person.
"Affiliate" means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract or otherwise. Without
limitation, any director, executive officer or beneficial owner of five percent
(5%) or more of the equity of a Person shall for the purposes of this Agreement,
be deemed to control the other Person. Notwithstanding the foregoing, neither
the Agent nor any Lender shall be deemed an "Affiliate" of the Borrower or of
any of its Subsidiaries.
"Agent" means Antares in its capacity as agent for the Lenders hereunder,
and any successor agent.
"Agent-Related Persons" means Antares and any successor agent arising
under Section 8.9, together with their respective Affiliates, and the officers,
directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.
"Aggregate Revolving Loan Commitment" means the combined Revolving Loan
Commitments of the Lenders, which shall initially be in the amount of
$25,000,000, as such amount may be reduced from time to time pursuant to this
Agreement.
"Antares" means Antares Capital Corporation, a Delaware corporation,
acting in its capacity as agent for the Lenders hereunder.
"Applicable Margin" means (a) during the period commencing on the Closing
Date through the date on which quarterly financial statements are delivered to
the Agent and the Lenders pursuant to Section 4.1 for the quarter ending March
31, 2005 (i) if a Base Rate Loan, two and one-quarter percent (2.25%) per annum
and (ii) if a LIBOR Rate Loan, three and one-half percent (3.50%) per annum; and
(b) thereafter, the Applicable Margin shall equal the applicable LIBOR margin or
Base Rate margin in effect from time to time determined as set
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forth below based upon the applicable Leverage Ratio then in effect pursuant to
the appropriate column under the tables below:
LEVERAGE RATIO LIBOR MARGIN BASE RATE MARGIN
-------------- ------------ ----------------
4.00 or greater 3.50% 2.25%
less than 4.00 to 1.0 3.25% 2.00%
The Applicable Margin shall be adjusted from time to time upon delivery to the
Agent and the Lenders of the quarterly financial statements required to be
delivered pursuant to Section 4.1 accompanied by a written calculation of the
Leverage Ratio certified on behalf of the Borrower by a Responsible Officer of
the Borrower as of the end of the fiscal quarter for which such financial
statements are delivered, commencing with the delivery of financial statements
for the quarter ending March 31, 2005. If such calculation indicates that the
Applicable Margin shall increase or decrease, then on the first day of the month
following the date of delivery of such quarterly financial statements and
written calculation the Applicable Margin shall be adjusted in accordance
therewith; PROVIDED, however, that if the Borrower shall fail to deliver any
such quarterly financial statements for any such fiscal quarter by the date
required pursuant to Section 4.1, then, at Agent's election, effective as of the
first day of the month following the date on which such financial statements
were to have been delivered, and continuing through the first day of the quarter
following the date (if ever) when such financial statements and such written
calculation are finally delivered, the Applicable Margin shall be conclusively
presumed to equal the highest Applicable Margin specified in the pricing table
set forth above.
"Attorney Costs" means and includes all reasonable fees and disbursements
of any law firm or other external counsel, the allocated cost of internal legal
services and all disbursements of internal counsel.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
U.S.C.ss.101, ET SEQ.), as amended and in effect from time to time and the
regulations issued from time to time thereunder.
"Base Rate" means, for any day, a rate of interest equal to the greater
of (a) the rate of interest which is identified as the "Prime Rate" and normally
published in the Money Rates section of THE WALL STREET JOURNAL (or, if such
rate ceases to be so published, as quoted from such other generally available
and recognizable source as the Agent may select) and (b) the sum of the Federal
Funds Rate plus one half of one percent (0.5%). Any change in the Base Rate due
to a change in the "Prime Rate" or the Federal Funds Rate shall be effective on
the effective date of such change in the "Prime Rate" or the Federal Funds Rate.
"Base Rate Loan" means a Loan that bears interest based on the Base Rate.
"Xxxxxxx Bridge Notes" means collectively, (i) that certain Convertible
Promissory Note of WII Holdings, Inc. dated as of April 9, 2003 executed and
delivered by Borrower in favor of the Sponsor in the original principal amount
of $19,829,966.92 and (ii) that certain Convertible Promissory Note of WII
Holdings, Inc. dated as of April 9, 2003 executed and delivered by
71
Borrower in favor of Strategic Entrepreneur Fund in the original principal
amount of $170,033.08.
"Xxxxxxx Subordination Agreement" means that certain Subordination
Agreement dated as of April 9, 2003 by and among the Agent, the Sponsor,
Strategic Entrepreneur Fund and Borrower providing for the subordination of all
obligations, indebtedness and liabilities owing under the terms of the Xxxxxxx
Bridge Notes to the holders thereof to the "Obligations" under the Prior Loan
Documents.
"Borrower Pledge Agreement" means that certain Pledge Agreement dated of
even date herewith, by and between Borrower and the Agent, for the benefit of
the Lenders, to be in form and substance acceptable to the Agent, pursuant to
which Borrower shall pledge one hundred percent (100%) of the issued and
outstanding capital stock of its directly-owned Subsidiaries.
"Borrower Security Agreement" means that certain Security Agreement dated
of even date herewith, by and between Borrower and the Agent, for the benefit of
the Lenders, to be in form and substance acceptable to the Agent.
"Borrowing" means a borrowing hereunder consisting of Loans made to the
Borrower on the same day by the Lenders pursuant to Article I.
"Borrowing Base Certificate" means a certificate of the Borrower, in
substantially the form of EXHIBIT 12.1(A) hereto, duly completed as of a date
acceptable to the Agent in its reasonable discretion.
"Brentwood" means Brentwood Acquisition Corp., a Minnesota corporation
and wholly-owned subsidiary of Woodcraft.
"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks in Chicago,
Illinois or New York, New York are
authorized or required by law to close and, if the applicable Business Day
relates to any LIBOR Rate Loan, a day on which dealings are carried on in the
London interbank market.
"Capital Adequacy Regulation" means any guideline, request or directive
of any central bank or other Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each case, regarding
capital adequacy of any Lender or of any corporation controlling a Lender.
"Capital Lease" means any leasing or similar arrangement which, in
accordance with GAAP, is classified as a capital lease.
"Capital Lease Obligations" means all monetary obligations of the
Borrower and its Subsidiaries under any Capital Leases.
"Cash Equivalents" means: (a) securities issued or fully guaranteed or
insured by the United States Government or any agency thereof having maturities
of not more than six (6) months from the date of acquisition; (b) certificates
of deposit, time deposits, repurchase agreements, reverse repurchase agreements,
or bankers' acceptances, having in each case a tenor
72
of not more than six (6) months, issued by any Lender, or by any U.S. commercial
bank or any branch or agency of a non-U.S. bank licensed to conduct business in
the U.S. having combined capital and surplus of not less than $250,000,000; (c)
commercial paper of an issuer rated at least A-1 by Standard & Poor's
Corporation or P-1 by Xxxxx'x Investors Service Inc. and in either case having a
tenor of not more than three (3) months and (d) money market funds; PROVIDED,
that substantially all of the assets of such fund are comprised of securities of
the type described in clauses (a) through (c).
"Closing Date" means the date on which all conditions precedent set forth
in Section 2.1 are satisfied or waived by the Agent and all Lenders.
"Code" means the Internal Revenue Code of 1986, and regulations
promulgated thereunder.
"Collateral" means all Property and interests in Property and proceeds
thereof now owned or hereafter acquired by the Borrower and its Subsidiaries or
any other Person as debtor and any other Person who has granted a lien to Agent,
in or upon which a Lien now or hereafter exists in favor of any Lender or the
Agent for the benefit of the Agent and Lenders, whether under this Agreement or
under any other documents executed by any such Persons and delivered to the
Agent.
"Collateral Documents" means, collectively, the Security Agreements, the
Mortgages, the Guaranty, the Pledge Agreements and all other security
agreements, patent and trademark assignments, lease assignments, deposit account
control agreements, guarantees and other similar agreements, and all amendments,
restatements, modifications or supplements thereof or thereto, by or between any
one or more of the Borrower, its Subsidiaries or any other Person pledging or
granting a lien on Collateral and any Lender or the Agent for the benefit of
Agent and the Lenders now or hereafter delivered to the Lenders or the Agent
pursuant to or in connection with the transactions contemplated hereby, and all
financing statements (or comparable documents now or hereafter filed in
accordance with the UCC or comparable law) against the Borrower or its
Subsidiaries as debtor in favor of any Lender or the Agent for the benefit of
Agent and the Lenders, as secured party.
"Commitment" means, for each Lender, its Revolving Loan Commitment.
"Commitment Percentage" means, as to any Lender, the percentage
equivalent of such Lender's Revolving Loan Commitment divided by the Aggregate
Revolving Loan Commitment.
"Consulting Agreement" means that certain Consulting Agreement dated as
of June 16, 1998 by and between Woodcraft and Primeboard.
"Contingent Obligation" means, as to any Person, any direct or indirect
liability, contingent or otherwise, of that Person: (i) with respect to any
Indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary
effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto; (ii) with
respect to any letter of credit issued for the account of that Person or as
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to which that Person is otherwise liable for reimbursement of drawings; (iii)
under any Rate Contracts; (iv) to make take-or-pay or similar payments if
required regardless of nonperformance by any other party or parties to an
agreement; or (v) for the obligations of another through any agreement to
purchase, repurchase or otherwise acquire such obligation or any Property
constituting security therefor, to provide funds for the payment or discharge of
such obligation or to maintain the solvency, financial condition or any balance
sheet item or level of income of another Person. The amount of any Contingent
Obligation shall be equal to the amount of the obligation so guaranteed or
otherwise supported or, if not a fixed and determined amount, the maximum amount
so guaranteed or supported.
"Contractual Obligations" means, as to any Person, any provision of any
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument, document or agreement to
which such Person is a party or by which it or any of its Property is bound.
"Controlled Group" means the Borrower and all Persons (whether or not
incorporated) under common control or treated as a single employer with the
Borrower pursuant to Section 414(b), (c), (m) or (o) of the Code or Section 4001
of ERISA.
"Conversion Date" means any date on which the Borrower converts a Base
Rate Loan to a LIBOR Rate Loan or a LIBOR Rate Loan to a Base Rate Loan.
"Default" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured or otherwise remedied or
waived in writing during such time) constitute an Event of Default.
"Disposition" means (a) the sale, lease (other than the lease of real
property or fixtures resulting in lease payments received by the Borrower and
its Subsidiaries, either individually or in the aggregate, of less than
$50,000), conveyance or other disposition of Property, other than sales or other
dispositions expressly permitted under subsection 5.2(a), and (b) the sale or
transfer by the Borrower or any of its Subsidiaries of any equity securities
issued by any of its Subsidiaries and held by such transferor Person.
"Dollars," "dollars" and "$" each mean lawful money of the United States
of America.
"EBITDA Plug Amount" means, if the Borrower violated any financial
covenants contained in Sections 6.2, 6.3 and/or 6.5 for any test period, an
amount which, when added to actual EBITDA (or, with respect to Section 6.3, Cash
Flow) of the Borrower for such test period (and treating such amount as
additional EBITDA (or Cash Flow, as applicable) for such purposes), and, solely
for the Leverage Ratio contained in Section 6.2, when also deducted from the
then outstanding principal amount of the Obligations (which deduction assumes
compliance by the Borrower with subsection 1.8(g)), would cause the Borrower to
be in compliance with such financial covenants for such test period; PROVIDED,
that if the Borrower violated more than one such financial covenant for any test
period, the EBITDA Plug Amount applicable for such test period for purposes of
Sections 6.2, 6.3 and/or 6.5 shall be the greatest of the amounts that so cause
the Borrower to be in compliance with each such financial covenant in accordance
with the foregoing.
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"Eligible Assignee" means any of: (a) a commercial bank organized under
the laws of the United States, or any state thereof; (b) a commercial bank
organized under the laws of any other country; (c) a finance company, insurance
company or other financial institution or fund which is engaged in making,
purchasing or otherwise investing in commercial loans for its own account in its
ordinary course of business; or (d) a Related Fund.
"Environmental Claims" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for release or injury
to the environment or threat to public health, personal injury (including
sickness, disease or death), property damage, natural resources damage, or
otherwise alleging liability or responsibility for damages (punitive or
otherwise), cleanup, removal, remedial or response costs, restitution, civil or
criminal penalties, injunctive relief, or other type of relief, resulting from
or based upon the presence, placement, discharge, emission or release (including
intentional and unintentional, negligent and non-negligent, sudden or
non-sudden, accidental or non-accidental, placement, spills, leaks, discharges,
emissions or releases) of any Hazardous Material at, in, or from Property,
whether or not owned by the Borrower.
"Environmental Laws" means all foreign, federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes, together
with all administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental
Authorities, in each case relating to environmental, health, safety and land use
matters; including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, the Clean Air Act, the Federal
Water Pollution Control Act of 1972, the Solid Waste Disposal Act, the Federal
Resource Conservation and Recovery Act, the Toxic Substances Control Act, the
Emergency Planning and Community Right-to-Know Act.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of
Section 414(b), 414(c), 414(m) or 414(o) of the Code or Section 4001 of ERISA.
"ERISA Event" means (a) a Reportable Event with respect to a Qualified
Plan or a Multiemployer Plan; (b) a withdrawal by the Borrower or any ERISA
Affiliate from a Qualified Plan subject to Section 4063 of ERISA during a plan
year in which it was a substantial employer (as defined in Section 4001(a)(2) of
ERISA); (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan; (d) the filing of a notice of intent to
terminate, the treatment of a plan amendment as a termination under Section 4041
or 4041A of ERISA or the commencement of proceedings by the PBGC to terminate a
Qualified Plan or Multiemployer Plan subject to Title IV of ERISA; (e) a failure
by the Borrower or any member of the Controlled Group to make required
contributions to a Qualified Plan or Multiemployer Plan subject to Title IV of
ERISA; (f) an event or condition which might reasonably be expected to
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Qualified Plan or Multiemployer
Plan; (g) the imposition of any liability under Title IV of ERISA, other than
PBGC premiums due but not delinquent under
75
Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate; (h) an
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code with respect to any Plan; (i) a non-exempt
prohibited transaction occurs with respect to any Plan for which the Borrower or
any of its Subsidiaries may be directly or indirectly liable; or (j) a violation
of the applicable requirements of Section 404 or 405 of ERISA or the exclusive
benefit rule under Section 401(a) of the Code by any fiduciary or disqualified
person with respect to any Plan for which the Borrower or any member of the
Controlled Group may be directly or indirectly liable.
"Event of Loss" means, with respect to any Property, any of the
following: (a) any loss, destruction or damage of such Property; (b) any pending
proceedings for the condemnation or seizure of such Property or for the exercise
of any right of eminent domain; or (c) any actual condemnation, seizure or
taking, by exercise of the power of eminent domain or otherwise, of such
Property, or confiscation of such Property or the requisition of the use of such
Property.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward to the nearest 1/100th of 1%) 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 on such day, as published by the
Federal Reserve Bank of New York on the Business Day next succeeding such day;
provided, that if no such rate is so published on such next succeeding Business
Day, the Federal Fund Rate for such day shall be the average rate quoted to the
Agent on such day on such transactions as determined by the Agent in a
commercially reasonable manner.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any entity succeeding to any of its principal functions.
"GAAP" means generally accepted accounting principles set forth from time
to time in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the accounting
profession), which are applicable to the circumstances as of the date of
determination.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"Guaranty" means that certain Guaranty, dated as of even date herewith,
in form and substance reasonably acceptable to Agent, made by each of the
Subsidiaries of the Borrower in favor of the Agent, for the benefit of Agent and
Lenders.
"Hazardous Materials" means all those substances which are regulated
by, or which may form the basis of liability under, any Environmental Law.
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"High Yield Unsecured Documents" means, collectively, the High Yield
Unsecured Indenture, the High Yield Unsecured Notes and all related agreements,
documents and instruments evidencing or relating to the High Yield Unsecured
Indebtedness.
"High Yield Unsecured Indebtedness" means the unsecured Indebtedness of
the Borrower which is incurred pursuant to the High Yield Unsecured Offering.
"High Yield Unsecured Indenture" means that certain Indenture dated as of
February __, 2004 between Trustee and Borrower, as the same may be amended,
modified and/or supplemented from time to time as permitted herein and including
any other indenture pursuant to which any High Yield Unsecured Notes are issued.
"High Yield Unsecured Notes" means those certain 10.0% Senior Unsecured
Notes due 2012 in the aggregate principal amount of up to $120,000,000 issued by
Borrower pursuant to the High Yield Unsecured Indenture, including all notes
issued in exchange or substitution therefor.
"High Yield Unsecured Offering" means the offering by Borrower of up to
an aggregate of $120,000,000.00 in principal amount of High Yield Unsecured
Indebtedness upon the terms and conditions set forth in that certain
Confidential Offering Circular of the Borrower dated as of February ___, 2004.
"Indebtedness" of any Person means, without duplication: (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of Property or services (other than trade
payables entered into in the Ordinary Course of Business); (c) the face amount
of all letters of credit issued for the account of such Person and without
duplication, all drafts drawn thereunder and all reimbursement or payment
obligations with respect to letters of credit, surety bonds and other similar
instruments issued by such Person; (d) all obligations evidenced by notes,
bonds, debentures or similar instruments, including obligations so evidenced
incurred in connection with the acquisition of Property, assets or businesses;
(e) all indebtedness created or arising under any conditional sale or other
title retention agreement, or incurred as financing, in either case with respect
to Property acquired by the Person (even though the rights and remedies of the
seller or bank under such agreement in the event of default are limited to
repossession or sale of such Property); (f) all Capital Lease Obligations; (g)
the principal balance outstanding under any synthetic lease, off-balance sheet
loan or similar off balance sheet financing product; (h) all indebtedness
referred to in clauses (a) through (g) above secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien upon or in Property (including accounts and contracts
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such indebtedness; (i) all Contingent Obligations
described in clause (i) of the definition thereof in respect of indebtedness or
obligations of others of the kinds referred to in clauses (a) through (h) above;
and (j) all "Disqualified Stock" (as defined in the High Yield Unsecured
Indenture).
"Insolvency Proceeding" means (a) any case, action or proceeding before
any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors, or (b) any general assignment for the
77
benefit of creditors, composition, marshaling of assets for creditors, or other,
similar arrangement in respect of its creditors generally or any substantial
portion of its creditors; in each case in (a) and (b) above, undertaken under
U.S. Federal, state or foreign law, including the Bankruptcy Code.
"Interest Payment Date" means, (a) with respect to any LIBOR Rate Loan
(other than a LIBOR Rate Loan having an Interest Period of six (6) months) the
last day of each Interest Period applicable to such Loan, (b) with respect to
any LIBOR Rate Loan having an Interest Period of six (6) months, the last day of
each three (3) month interval during such Interest Period, and (c) with respect
to Base Rate Loans, the first day of each calendar month.
"Interest Period" means, with respect to any LIBOR Rate Loan, the period
commencing on the Business Day such Loan is disbursed or continued or on the
Conversion Date on which a Base Rate Loan is converted to the LIBOR Rate Loan
and ending on the date one, two, three or six (6) months thereafter, as selected
by the Borrower in its Notice of Borrowing or Notice of Conversion/Continuation;
PROVIDED, that:
(a) if any Interest Period pertaining to a LIBOR Rate Loan would
otherwise end on a day which 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) any Interest Period pertaining to a 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 the calendar month at the end of
such Interest Period; and
(c) no Interest Period for any Revolving Loan shall extend beyond the
Revolving Termination Date.
"Inventory" means all of the "inventory" (as such term is defined in the
UCC) of the Borrower, including, but not limited to, all merchandise, raw
materials, parts, supplies, work-in-process and finished goods intended for
sale, together with all the containers, packing, packaging, shipping and similar
materials related thereto, and including such inventory as is temporarily out of
the Borrower's custody or possession, including inventory on the premises of
others and items in transit.
"Kentucky Cash Collateral Account" means Account No. 1047-7393-8865
previously maintained by Woodcraft at U.S. Bank.
"Kentucky Cash Collateral Agreement" means that certain Cash Collateral
Agreement dated April 9, 2003 between Woodcraft and U.S. Bank.
"Kentucky Letter of Credit" means that certain Irrevocable Letter of
Credit No. SLC75691MMSP previously issued by U.S. Bank for the account of
Woodcraft in the face amount of $7,025,693.15.
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"Kentucky Reimbursement Agreement" means that certain Letter of Credit
and Reimbursement Agreement dated as of March 1, 1995 between Woodcraft and U.S.
Bank, as amended by a First Amendment dated as of February 29, 1996, a Second
Amendment dated as of June 16, 1998 and the Kentucky Cash Collateral Agreement.
"Kentucky Reimbursement Obligations" means Woodcraft's contingent
obligations under the Kentucky Letter of Credit, the Kentucky Reimbursement
Agreement and the Kentucky Cash Collateral Agreement.
"Lending Office" means, with respect to any Lender, the office or offices
of such Lender specified as its "Lending Office" opposite its name on the
applicable signature page hereto, or such other office or offices of such Lender
as it may from time to time notify the Borrower and the Agent.
"Letter of Credit Participation Liability" means, as to each Lender
Letter of Credit and each Letter of Credit Participation Agreement, all
reimbursement obligations and all other liabilities of the Borrower or any of
its Subsidiaries to Agent and the Lenders in connection with the Lender Letter
of Credit or to the obligee with respect to the transaction for which the Letter
of Credit Participation Agreement was issued, whether contingent or otherwise,
including with respect to any letter of credit: (a) the amount available to be
drawn or which may become available to be drawn; (b) without duplication, all
amounts which have been paid or made available by the issuing bank or by the
Agent under such Lender Letters of Credit or Letter of Credit Participation
Agreement, in each instance, to the extent not reimbursed; and (c) all unpaid
interest, fees and expenses.
"LIBOR" means, for each Interest Period, the offered rate per annum for
deposits of Dollars for the applicable Interest Period that appears on Telerate
Page 3750 as of 11:00 A.M. (London, England time) two (2) Business Days prior to
the first day in such Interest Period. If no such offered rate exists, such rate
will be the rate of interest per annum, as determined by the Agent (rounded
upwards, if necessary, to the nearest 1/16 of 1%) at which deposits of Dollars
in immediately available funds are offered at 11:00 A.M. (London, England time)
two (2) Business Days prior to the first day in such Interest Period by major
financial institutions reasonably satisfactory to the Agent in the London
interbank market for such Interest Period for the applicable principal amount on
such date of determination.
"LIBOR Rate Loan" means a Loan that bears interest based on LIBOR.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, charge or deposit arrangement, encumbrance, lien (statutory or
otherwise) or preference, priority or other security interest or preferential
arrangement of any kind or nature whatsoever (including those created by,
arising under or evidenced by any conditional sale or other title retention
agreement, the interest of a lessor under a Capital Lease, any financing lease
having substantially the same economic effect as any of the foregoing, or the
filing of any financing statement naming the owner of the asset to which such
lien relates as debtor, under the UCC or any comparable law) and any contingent
or other agreement to provide any of the foregoing, but not including the
interest of a lessor under a lease which is not a Capital Lease.
79
"Loan" means an extension of credit by a Lender to the Borrower pursuant
to Article I hereof, and may be a Base Rate Loan or a LIBOR Rate Loan.
"Loan Documents" means this Agreement, the Notes, the Collateral
Documents and all documents delivered to the Agent and/or any Lender in
connection with any of the foregoing (including the fee letter referenced in
subsection 1.9(a)).
"Margin Stock" means "margin stock" as such term is defined in Regulation
T, U or X of the Federal Reserve Board.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, Property, or condition
(financial or otherwise) of the Borrower, any of its Subsidiaries, or the
Borrower and its Subsidiaries taken as a whole; (b) a material impairment of the
ability of the Borrower, any of its Subsidiaries or any other Person (other than
the Agent or Lenders) to perform in any material respect its obligations under
any Loan Document; or (c) a material adverse effect upon (i) the legality,
validity, binding effect or enforceability of any Loan Document, or (ii) the
perfection or priority of any Lien granted to the Lenders or to the Agent for
the benefit of the Lenders under any of the Collateral Documents.
"Merger" means the merger of Merger Co. with and into Woodcraft, which
resulted in Woodcraft as the surviving entity.
"Merger Agreement" means that certain Agreement and Plan of Merger dated
as of April 9, 2003 among Borrower, Merger Co. and Woodcraft.
"Merger Co." means Woodcraft Acquisition Subsidiary, Inc., a Minnesota
corporation, that, prior to the Merger, was a Wholly-Owned Subsidiary of
Borrower.
"Merger Documents" means, collectively, (i) the Merger Agreement, (ii)
the Articles of Merger, (iii) the Merger Escrow Agreement and (iv) all related
agreements, documents and instruments.
"Merger Escrow Agreement" means that certain Escrow Agreement dated as of
April 9, 2003 among Borrower, Woodcraft, the parties thereto set forth on the
signature pages thereto under the heading "Escrow Contributors," U.S. Bank
National Association, a national banking association, in its capacity as the
Escrow Agent, and Xxxxxxx X. Xxxxxxx and Xxxxxxx X. Israel, as "Payee
Representative," as defined therein.
"Mortgage" means any deed of trust, leasehold deed of trust, mortgage,
leasehold mortgage, deed to secure debt, leasehold deed to secure debt or other
document creating a Lien on real Property or any interest in real Property.
"Multiemployer Plan" means a "multiemployer plan" (within the meaning of
Section 4001(a)(3) of ERISA) and to which the Borrower or any member of the
Controlled Group may have any liability.
"Net Issuance Proceeds" means, in respect of any issuance of debt or
equity, cash proceeds and non-cash proceeds received or receivable in connection
therewith, net of
80
reasonable out-of-pocket costs and expenses paid or incurred in connection
therewith in favor of any Person not an Affiliate of the Borrower.
"Net Proceeds" means proceeds in cash, checks or other cash equivalent
financial instruments (including Cash Equivalents) as and when received by the
Person making a Disposition and insurance proceeds received on account of an
Event of Loss, net of: (a) in the event of a Disposition (i) the direct costs
relating to such Disposition excluding amounts payable to the Borrower or any
Affiliate of the Borrower, (ii) sale, use or other transaction taxes paid or
payable as a result thereof, and (iii) amounts required to be applied to repay
principal, interest and prepayment premiums and penalties on Indebtedness
secured by a Lien on the asset which is the subject of such Disposition and (b)
in the event of an Event of Loss, (i) all money actually applied to repair or
reconstruct the damaged Property or Property affected by the condemnation or
taking, (ii) all of the costs and expenses reasonably incurred in connection
with the collection of such proceeds, award or other payments, and (iii) any
amounts retained by or paid to parties having superior rights to such proceeds,
awards or other payments.
"Note" means any Revolving Note and "Notes" means all such Notes.
"Notice of Borrowing" means a notice given by the Borrower to the Agent
pursuant to Section 1.5, in substantially the form of EXHIBIT 12.1(B) hereto.
"Notice of Continuation/Conversion" means a notice given by the Borrower
to the Agent pursuant to Section 1.6, in substantially the form of EXHIBIT
12.1(C) hereto.
"Obligations" means all Loans, and other Indebtedness, advances, debts,
liabilities, obligations, covenants and duties owing by the Borrower to any
Lender, the Agent, or any other Person required to be indemnified, that arises
under any Loan Document, whether or not for the payment of money, whether
arising by reason of an extension of credit, loan, guaranty, indemnification or
in any other manner, whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, now existing or
hereafter arising and however acquired.
"Ordinary Course of Business" means, in respect of any transaction
involving the Borrower or any of its Subsidiaries, the ordinary course of such
Person's business, as conducted by any such Person in accordance with past
practice and undertaken by such Person in good faith and not for purposes of
evading any covenant or restriction in any Loan Document.
"Organization Documents" means, (a) for any corporation, the certificate
or articles of incorporation, the bylaws, any certificate of determination or
instrument relating to the rights of preferred shareholders of such corporation,
any shareholder rights agreement, and all applicable resolutions of the board of
directors (or any committee thereof) of such corporation, (b) for any
partnership, the partnership agreement and, if applicable, certificate of
limited partnership or (c) for any limited liability company, the operating
agreement and articles or certificate of formation.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any of its principal functions under ERISA.
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"Permitted Acquisition" means any Acquisition by (i) any domestic
Wholly-Owned Subsidiary of the Borrower of substantially all of the assets of a
Person, which assets are located in the United States, or (ii) the Borrower or
any domestic Wholly-Owned Subsidiary of the Borrower of 100% of the equity
interests of a Person incorporated under the laws of any State in the United
States or the District of Columbia (such assets, in the case of an asset
acquisition, or entity, in the case of an acquisition of equity securities, are
referred to herein as the "Acquired Entity") to the extent that each of the
following conditions shall have been satisfied:
(a) the conditions set forth in Section 2.3 shall have been satisfied;
(b) the Borrower shall have furnished to the Agent and Lenders at least
twenty (20) Business Days (or ten (10) Business Days with respect to that
certain potential Acquisition that has been disclosed by the Borrower to the
Agent prior to the date of this Agreement) prior to the consummation of such
Acquisition (1) an executed term sheet and/or commitment letter (setting forth
in reasonable detail the terms and conditions of such Acquisition) and, at the
request of the Agent, such other information and documents that the Agent may
request, including, without limitation, executed counterparts of the respective
agreements, documents or instruments pursuant to which such Acquisition is to be
consummated (including, without limitation, any related management, non-compete,
employment, option or other material agreements), any schedules to such
agreements, documents or instruments and all other material ancillary
agreements, instruments and documents to be executed or delivered in connection
therewith, (2) pro forma financial statements of the Borrower and its
Subsidiaries after giving effect to the consummation of such Acquisition, (3) a
certificate of a Responsible Officer of the Borrower demonstrating on a pro
forma basis compliance with the covenants set forth in Article VI hereof after
giving effect to the consummation of such Acquisition and (4) copies of such
other agreements, instruments and other documents (including, without
limitation, the Loan Documents required by Section 4.12) as the Agent reasonably
shall request;
(c) the Borrower and its Subsidiaries (including any new Subsidiary)
shall execute and deliver the agreements, instruments and other documents
required by Section 4.12 and the Agent shall have received, for the benefit of
the Agent and Lenders, a collateral assignment of the seller's representations,
warranties and indemnities to the Borrower or any of its Subsidiaries under the
acquisition documents;
(d) such Acquisition shall not be hostile and shall have been approved by
the board of directors (or other similar body) and/or the stockholders or other
equityholders of the Acquired Entity;
(e) no Default or Event of Default shall then exist or would exist after
giving effect thereto;
(f) after giving effect to such Acquisition and any Loans to be disbursed
in connection therewith, the Maximum Revolving Loan Balance shall exceed the
aggregate outstanding principal balance of Revolving Loans by not less than
$5,000,000, and the Borrower shall deliver to the Agent a pro forma Borrowing
Base Certificate evidencing compliance with this condition, which pro forma
Borrowing Base Certificate shall give effect to such Acquisition and any such
Loans to be disbursed in connection therewith;
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(g) the Acquired Entity is in the same line of business as the Borrower
(h) the "Available Liquidity" (as defined in the High Yield Unsecured
Indenture) of the Borrower shall be at least $7,500,000;
(i) at least fifty percent (50%) of the costs of such Acquisition are
financed with "Acceptable Capital Contributions" (as defined in the High Yield
Unsecured Indenture); and
(j) such Acquisition is permitted under the terms of the High Yield
Unsecured Documents.
"Permitted Issuances" means the issuance of debt securities by any of the
Borrower's Subsidiaries in respect of Indebtedness permitted hereunder.
"Permitted Securities" shall mean equity interests of Borrower that by
their terms (or by the terms of any security into which they are convertible or
for which they are exchangeable) or upon the happening of any event or
otherwise: (A) are not convertible or exchangeable for Indebtedness or any
securities that are not Permitted Securities, (B) (i) do not mature and (ii) are
not putable or redeemable at the option of the holder thereof, in each case
under clause (i) or (ii) in whole or in part on or prior to the date six (6)
months after the earlier of the Revolving Termination Date or the actual payment
in full in cash of the Obligations, (C) do not have required payments of cash
dividends or other cash distributions on or prior to the date six (6) months
after the earlier of the Revolving Termination Date or the actual payment in
full in cash of the Obligations, (D) are unsecured and by operation of law or by
legally binding agreement are subordinated in right of repayment, liens,
security and remedies to all of the Obligations and to all of Agent's and
Lenders' rights, Liens and remedies, and (E) are not sold, issued or otherwise
transferred in connection with or as a part of a Public Offering.
"Person" means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture or Governmental Authority.
"Plan" means an employee benefit plan (as defined in Section 3(3) of
ERISA) which the Borrower or any member of the Controlled Group sponsors or
maintains or to which the Borrower or any member of the Controlled Group may
have liability.
"Pledge Agreements" means collectively, the Borrower Pledge Agreement,
the Woodcraft Pledge Agreement, and any other pledge agreement entered into by
any other Subsidiary of the Borrower, or any other Person, and the Agent, on
behalf of the Lenders in respect of the Obligations.
"Pledged Collateral" has the meaning specified in the Pledge Agreements.
"Primeboard" means Primeboard International, Inc., a North Dakota
corporation.
"Primewood" means
Primewood, Inc., a North Dakota corporation and
wholly-owned subsidiary of Woodcraft.
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"Prior
Credit Agreement" means that certain
Credit Agreement dated as of
April 9, 2003 (as amended, supplemented or otherwise modified from time to time
and previously in effect) among Woodcraft, Primewood and Brentwood, as the
Borrowers, the financial institutions party thereto (the "Prior Lenders"), and
Antares Capital Corporation, a Delaware corporation, as Agent for the Prior
Lenders (the "Prior Agent").
"Prior Indebtedness" means the Indebtedness and obligations specified on
SCHEDULE 12.1 hereto.
"Prior Loan Documents" means the Prior
Credit Agreement, the "Notes" (as
defined in the Prior
Credit Agreement), the "Collateral Documents" (as defined
in the Prior
Credit Agreement) and all documents delivered to the Prior Agent
and/or any Prior Lender in connection with any of the foregoing (including the
fee letter referenced in subsection 1.9(a) of the Prior
Credit Agreement).
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, and whether tangible or intangible.
"Public Offering" shall mean any offer or sale of securities pursuant to
any registration statement filed and effective with the Securities and Exchange
Commission or any other Governmental Authority.
"Qualified Plan" means a pension plan (as defined in Section 3(2) of
ERISA) intended to be tax-qualified under Section 401(a) of the Code and which
any member of the Controlled Group sponsors, maintains, or to which it makes, is
making or is obligated to make contributions, or in the case of a multiple
employer plan (as described in Section 4064(a) of ERISA) has made contributions
at any time during the immediately preceding period covering at least five (5)
plan years, but excluding any Multiemployer Plan.
"Rate Contracts" means swap agreements (as such term is defined in
Section 101 of the Bankruptcy Code) and any other agreements or arrangements
designed to provide protection against fluctuations in interest or currency
exchange rates.
"Related Agreements" means, collectively, the High Yield Unsecured
Documents, the Merger Documents and each instrument, document and purchase,
merger and other agreement executed or delivered by or on behalf of the Borrower
or any of its Subsidiaries in connection with a Permitted Acquisition.
"Related Fund" means (a) any fund, trust or similar entity that invests
in commercial loans in the ordinary course of business and is advised or managed
by (i) a Lender, (ii) an Affiliate of a Lender, (iii) the same investment
advisor that manages a Lender or (iv) an Affiliate of an investment advisor that
manages a Lender or (b) any finance company, insurance company or other
financial institution which temporarily warehouses Loans for any Lender or any
Person described in clause (a) above.
"Related Transactions" means the transactions contemplated by the Related
Agreements and includes, without limitation, the funding of the High Yield
Unsecured Notes, the consummation of the Merger and the consummation of any
Permitted Acquisitions.
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"Reportable Event" means, as to any Plan, (a) any of the events set forth
in Section 4043(b) of ERISA or the regulations thereunder, other than any such
event for which the thirty (30) day notice requirement under ERISA has been
waived in regulations issued by the PBGC, (b) a withdrawal from a Plan described
in Section 4063 of ERISA, or (c) a cessation of operations described in Section
4062(e) of ERISA.
"Required Lenders" means at any time (a) Lenders then holding more than
fifty (50%) of the sum of the Aggregate Revolving Loan Commitment then in
effect, or (b) if the Revolving Loan Commitments have been terminated, Lenders
then having more than fifty percent (50%) of the sum of the aggregate unpaid
principal amount of Loans then outstanding plus outstanding Letter of Credit
Participation Liability.
"Requirement of Law" means, as to any Person, any law (statutory or
common), ordinance, treaty, rule, regulation, order, policy, other legal
requirement or determination of an arbitrator or of a Governmental Authority, in
each case applicable to or binding upon such Person or any of its Property or to
which such Person or any of its Property is subject.
"Responsible Officer" means the chief executive officer or the president
of the Borrower or any other officer having substantially the same authority and
responsibility; or, with respect to compliance with financial covenants or
delivery of financial information, the chief financial officer or the treasurer
of the Borrower, or any other officer having substantially the same authority
and responsibility.
"Restricted Account" means each bank account of the Borrower and its
Subsidiaries set forth on SCHEDULE 12.2 maintained at U.S. Bank for purposes of
paying certain payroll and operating expenses in the Ordinary Course of
Business; PROVIDED, that in the event U.S. Bank delivers to the Agent a control
agreement in form and substance acceptable to the Agent, such account shall
cease to be a Restricted Account for purposes hereof.
"Restricted Credit Card Account" means Account No. 1-536-9138-1964
maintained at U.S. Bank.
"Restricted Payroll Account" means Account No. 1-536-9138-1823 maintained
at U.S. Bank.
"Revolving Note" means a promissory note of the Borrower payable to the
order of a Lender in substantially the form of EXHIBIT 12.1(D) hereto,
evidencing indebtedness of the Borrower under the Revolving Loan Commitment of
such Lender.
"Revolving Termination Date" means the earlier to occur of: (a) February
18, 2009; and (b) the date on which the Aggregate Revolving Loan Commitment
shall terminate in accordance with the provisions of this Agreement.
"Security Agreements" means, collectively, the Borrower Security
Agreement, the Subsidiary Security Agreement and any other security agreement
entered into by any other Subsidiary of the Borrower, or any other Person, and
the Agent, on behalf of the Lenders in respect of the Obligations.
85
"Sellers" means, collectively, the holders of capital stock of Woodcraft
and options, warrants and other rights or securities convertible into or
exercisable or exchangeable for, capital stock of Woodcraft, who held such
securities immediately prior to the effectiveness of the Merger.
"Seller Merger Agreement Payment" means any payment by any of the Sellers
of any amount pursuant to, as a result of or as required by any indemnification
provision or purchase price adjustment provision of any of the Related
Agreements, including, without limitation, the Merger Agreement, and including
any distribution made under the Merger Escrow Agreement.
"Xxxxxx" means Xxxxxx X. Xxxxxx, an individual.
"Xxxxxx Non-Competition Agreement" means that certain Non-Competition and
Proprietary Information Agreement (Xxxxxx X. Xxxxxx) dated as of June 16, 1998
by and among Xxxxxx, Woodcraft and Primewood.
"Solvent" means, as to any Person at any time, that (a) the fair value of
the Property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(32)(A) of the Bankruptcy Code and, in the alternative, for purposes of the
Uniform Fraudulent Transfer Act; (b) the present fair saleable value of the
Property of such Person is not less than the amount that will be required to pay
the probable liability of such Person on its debts as they become absolute and
matured; (c) such Person is able to realize upon its Property and pay its debts
and other liabilities (including disputed, contingent and unliquidated
liabilities) as they mature in the normal course of business; (d) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature; and (e) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
Property would constitute unreasonably small capital.
"Sponsor" means Xxxxxxx Capital III L.P., a Delaware limited partnership.
"SQRC Obligations" shall mean all of the obligations of Woodcraft under
the Subject Qualifying Rate Contract.
"Strategic Entrepreneur Fund" means Strategic Entrepreneur Fund III,
L.P., a Delaware limited partnership.
"Subject Qualifying Rate Contract" means that certain Rate Contract
between Woodcraft and Bear Xxxxxxx Bank PLC ("Bear Xxxxxxx") dated as of July
31, 2003, collectively with the related Form Master Agreement and Executed
Master Agreement dated as of the same date and attached thereto.
"Subordinated Indebtedness" means the Indebtedness of the Borrower or any
of its Subsidiaries which (i) contains terms, conditions, covenants, default
triggers and representations and warranties that are acceptable to the Agent and
the Required Lenders and (ii) is subordinated in right of payment and action to
the Obligations on terms and conditions satisfactory to the Agent and the
Required Lenders.
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"Subsidiary" of a Person means any corporation, association, limited
liability company, partnership, joint venture or other business entity of which
more than fifty percent (50%) of the voting stock or other equity interests (in
the case of Persons other than corporations), is owned or controlled directly or
indirectly by the Person, or one or more of the Subsidiaries of the Person, or a
combination thereof.
"Subsidiary Security Agreement" means that certain Security Agreement
dated of even date herewith, by and between each of Woodcraft, Primewood and
Brentwood and the Agent, for the benefit of the Lenders, to be in form and
substance acceptable to the Agent.
"Target" means any other Person or business unit or asset group of any
other Person acquired or proposed to be acquired in an Acquisition.
"Trustee" means U.S. Bank National Association.
"UCC" means the Uniform Commercial Code as in effect from time to time in
the State of
Illinois.
"Unfunded Pension Liabilities" means the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Plan's assets, determined in accordance with the assumptions used by the Plan's
actuaries for funding the Plan pursuant to section 412 for the applicable plan
year.
"United States" and "U.S." each means the United States of America.
"U.S. Bank" means U.S. Bank National Association, a national banking
association.
"Wholly-Owned Subsidiary" means any Subsidiary in which (other than
directors' qualifying shares required by law) one hundred percent (100%) of
equity securities, at the time as of which any determination is being made, is
owned, beneficially and of record, by the Borrower, or by one or more of the
other Wholly-Owned Subsidiaries, or both.
"Withdrawal Liabilities" means, as of any determination date, the
aggregate amount of the liabilities, if any, pursuant to Section 4201 of ERISA
if the Controlled Group made a complete withdrawal from all Multiemployer Plans
and any increase in contributions pursuant to Section 4243 of ERISA.
"Woodcraft" means Woodcraft Industries, Inc., a Minnesota corporation and
wholly-owned subsidiary of Borrower.
"Woodcraft Pledge Agreement" means that certain Pledge Agreement dated of
even date herewith, by and between Woodcraft and the Agent, for the benefit of
the Lenders, to be in form and substance acceptable to the Agent, pursuant to
which Woodcraft shall pledge one hundred percent (100%) of the issued and
outstanding capital stock of its Subsidiaries.
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12.2 OTHER INTERPRETIVE PROVISIONS.
(a) DEFINED TERMS. Unless otherwise specified herein or therein, all
terms defined in this Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto. The meanings of
defined terms shall be equally applicable to the singular and plural forms of
the defined terms. Terms (including uncapitalized terms) not otherwise defined
herein and that are defined in the UCC shall have the meanings therein
described.
(b) THE AGREEMENT. The words "hereof," "herein," "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; and subsection,
section, schedule and exhibit references are to this Agreement unless otherwise
specified. All references herein to schedules shall mean such schedules as
updated from time to time by written notice from the Borrower to the Agent.
(c) CERTAIN COMMON TERMS. The term "documents" includes any and all
instruments, documents, agreements, certificates, indentures, notices and other
writings, however evidenced. The term "including" is not limiting and means
"including without limitation."
(d) PERFORMANCE; TIME. Whenever any performance obligation hereunder
(other than a payment obligation) shall be stated to be due or required to be
satisfied on a day other than a Business Day, such performance shall be made or
satisfied on the next succeeding Business Day. 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." If any provision of this
Agreement refers to any action taken or to be taken by any Person, or which such
Person is prohibited from taking, such provision shall be interpreted to
encompass any and all means, direct or indirect, of taking, or not taking, such
action.
(e) CONTRACTS. Unless otherwise expressly provided herein, references to
agreements and other contractual instruments, including this Agreement and the
other Loan Documents, shall be deemed to include all subsequent amendments,
thereto, restatements and substitutions thereof and other modifications and
supplements thereto which are in effect from time to time, but only to the
extent such amendments and other modifications are not prohibited by the terms
of any Loan Document.
(f) LAWS. References to any statute or regulation are to be construed as
including all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting the statute or regulation.
12.3 ACCOUNTING PRINCIPLES.
(a) Unless the context otherwise clearly requires, all accounting terms
not expressly defined herein shall be construed, and all financial computations
required under this Agreement shall be made, in accordance with GAAP,
consistently applied.
(b) References herein to "fiscal year," "fiscal quarter" and "fiscal
month" refer to such fiscal periods of the Borrower.
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(c) If any change in GAAP results in a change in the calculation of the
financial covenants or interpretation of related provisions of this Agreement or
any other Loan Document, then the Borrower, the Agent and the Lenders agree to
amend such provisions of this Agreement so as to equitably reflect such changes
in GAAP with the desired result that the criteria for evaluating the Borrower's
financial condition shall be the same after such change in GAAP as if such
change had not been made; PROVIDED, that notwithstanding any other provision of
this Agreement, the Required Lenders' agreement to any amendment of such
provisions shall be sufficient to bind all Lenders.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their duly authorized officers as of the day and
year first above written.
WII COMPONENTS, INC.,
a Delaware corporation, as the Borrower
By: /S/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: Secretary
FEIN: 00-0000000
Address for notices for Borrower:
000 Xxxxxxx Xxxxxx XX
Xx. Xxxxx, Xxxxxxxxx 00000
Attn: President
Facsimile: (000) 000-0000
Address for Wire Transfers for Borrower:
U.S. Bank National Association
ABA Number: 000000000
Account Number: 149510174050
Reference: Woodcraft Industries, Inc.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their duly authorized officers as of the day and
year first above written
ANTARES CAPITAL CORPORATION,
as Agent and as a Lender
By: /S/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Director
Address for notices:
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Portfolio Manager - Woodcraft
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Address for payments:
Antares Capital Corporation
Account # 4070-6016
Citibank N.A., New York
ABA # 000000000
Reference: Woodcraft
Please advise Xxx Xxxxxxxxx at
(000) 000-0000 upon receipt
SCHEDULE 1.1(b)
REVOLVING LOAN COMMITMENTS
----------------------------------------- --------------------------------------
LENDER: REVOLVING LOAN COMMITMENT:
----------------------------------------- --------------------------------------
Antares Capital Corporation $25,000,000.00
----------------------------------------- --------------------------------------
TOTAL $25,000,000.00
----------------------------------------- --------------------------------------
