Exhibit 10.1
CREDIT AGREEMENT
Dated as of July 15, 1999
among
THE BORROWERS SIGNATORY HERETO
FROM TIME TO TIME,
as Borrowers,
SUPERIOR ENERGY SERVICES, INC.,
THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME,
as Lenders,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent and Lender
TABLE OF CONTENTS
PAGE
1. AMOUNT AND TERMS OF CREDIT 2
1.1 Credit Facilities 2
1.2 Letters of Credit 9
1.3 Prepayments 9
1.4 Use of Proceeds 11
1.5 Interest and Applicable Margins 12
1.6 Eligible Accounts 16
1.7 [Reserved] 18
1.8 Cash Management Systems 18
1.9 Fees 19
1.10 Receipt of Payments 19
1.11 Application and Allocation of Payments 20
1.12 Loan Account and Accounting 20
1.13 Indemnity 21
1.14 Access 22
1.15 Taxes 23
1.16 Capital Adequacy; Increased Costs; Illegality 23
1.17 Joint and Several Obligation; Single Loan 25
2. CONDITIONS PRECEDENT 25
2.1 Conditions to the Initial Loans 25
2.2 Further Conditions to Each Loan 27
3. REPRESENTATIONS AND WARRANTIES 27
3.1 Corporate Existence; Compliance with Law 28
3.2 Executive Offices; FEIN 28
3.3 Power, Authorization, Enforceable Obligations 28
3.4 Financial Statements and Projections 29
3.5 Material Adverse Effect 30
3.6 Ownership of Property; Liens 30
3.7 Labor Matters 31
3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock
and Indebtedness 32
3.9 Government Regulation 32
3.10 Margin Regulations 32
3.11 Taxes 32
3.12 ERISA 33
3.13 No Litigation 34
3.14 Brokers 34
3.15 Intellectual Property 34
3.16 Full Disclosure 34
3.17 Environmental Matters 35
3.18 Insurance 36
3.19 Deposit and Disbursement Accounts 36
3.20 Government Contracts 36
3.21 Customer and Trade Relations 36
3.22 Agreements and Other Documents 36
3.23 Solvency 37
3.24 Agreement and Plan of Merger 37
3.25 Year 2000 37
4. FINANCIAL STATEMENTS AND INFORMATION 38
4.1 Reports and Notices 38
4.2 Communication with Accountants 38
5. AFFIRMATIVE COVENANTS 38
5.1 Maintenance of Existence and Conduct of Business 38
5.2 Payment of Obligations 39
5.3 Books and Records 39
5.4 Insurance; Damage to or Destruction of Collateral 39
5.5 Compliance with Laws 41
5.6 Supplemental Disclosure 41
5.7 Intellectual Property 42
5.8 Environmental Matters 42
5.9 Landlords' Agreements, Mortgagee Agreements, Charterer
Agreements and Bailee Letters 43
5.10 Interest Rate Protection 43
5.11 Further Assurances 43
5.12 Real Estate Surveys 43
5.13 Real Estate Mortgages 44
5.14 Additional Real Estate Mortgages 44
5.15 Repayment of Indebtedness to MidSouth National Bank 44
5.16 Cash Management System; Blocked Account Agreements 44
5.17 Environmental Reports 44
5.18 Appraisals 45
5.19 Additional Real Estate Documents 45
5.20 Pledge of Stock of Concentric Rentals, S.A. 45
5.21 Subordination Agreement 45
5.22 Code Search Reports 45
6. NEGATIVE COVENANTS 45
6.1 Mergers, Subsidiaries, Etc. 45
6.2 Investments; Loans and Advances 48
6.3 Indebtedness 49
6.4 Employee Loans and Affiliate Transactions 50
6.5 Capital Structure and Business 50
6.6 Guaranteed Indebtedness 50
6.7 Liens 50
6.8 Sale of Stock and Assets 51
6.9 ERISA 51
6.10 Financial Covenants 52
6.11 Hazardous Materials 52
6.12 Sale-Leasebacks 52
6.13 Cancellation of Indebtedness 52
6.14 Restricted Payments 52
6.15 Change of Corporate Name or Location; Change of Fiscal
Year 52
6.16 No Impairment of Intercompany Transfers 53
6.17 No Speculative Transactions 53
6.18 Leases 53
6.19 Changes Relating to Subordinated Debt 53
6.20 Acquisition of New Real Estate and Vessels 53
6.21 Vessel Charters 54
6.22 Waiver of Stay, Extension or Usury Laws 54
6.23 Capital Expenditures 54
7. TERM 54
7.1 Termination 54
7.2 Survival of Obligations Upon Termination of Financing
Arrangements 54
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES 55
8.1 Events of Default 55
8.2 Remedies 57
8.3 Waivers by Credit Parties 57
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF ADMINISTRATIVE
AGENT 58
9.1 Assignment and Participations 58
9.2 Appointment of Administrative Agent 60
9.3 Administrative Agent's Reliance, Etc. 61
9.4 GE Capital and Affiliates 61
9.5 Lender Credit Decision 62
9.6 Indemnification 62
9.7 Successor Administrative Agent 62
9.8 Setoff and Sharing of Payments 63
9.9 Advances; Payments; Non-Funding Lenders; Information;
Actions in Concert 64
10. SUCCESSORS AND ASSIGNS 66
10.1 Successors and Assigns 66
11. MISCELLANEOUS 67
11.1 Complete Agreement; Modification of Agreement 67
11.2 Amendments and Waivers 67
11.3 Fees and Expenses 69
11.4 No Waiver 70
11.5 Remedies 71
11.6 Severability 71
11.7 Conflict of Terms 71
11.8 Confidentiality 71
11.9 GOVERNING LAW 72
11.10 Notices 72
11.11 Section Titles 73
11.12 Counterparts 73
11.13 WAIVER OF JURY TRIAL 73
11.14 Press Releases 74
11.15 Reinstatement 74
11.16 Advice of Counsel; Reliance on Opinions of Counsel 74
11.17 No Strict Construction 74
11.18 Borrower Representative 74
12. CROSS-GUARANTY 75
12.1 Cross-Guaranty 75
12.2 Waivers by Borrowers 75
12.3 Benefit of Guaranty 76
12.4 Subordination of Subrogation, Etc. 76
12.5 Election of Remedies 76
12.6 [Reserved] 77
12.7 [Reserved] 77
12.8 Liability Cumulative 77
12.9 Subordination 77
INDEX OF APPENDICES
Exhibit 1.1(a)(i) - Form of Notice of Revolving Credit Advance
Exhibit 1.1(a)(ii) - Form of Revolving Note
Exhibit 1.1(b)(i) - Form of Term A Note
Exhibit 1.1(b)(iv) - Form of Term B Note
Exhibit 1.1(b)(vii) - Form of Contingent Payment Note
Exhibit 1.1(b)(vii)(x) - Form of Notice of Contingent Payment Loan
Drawdown Request
Exhibit 1.1(c)(ii) - Form of Swing Line Note
Exhibit 1.5(e) - Form of Notice of Conversion/Continuation
Exhibit 4.1(b) - Form of Borrowing Base Certificate
Exhibit 9.1(a) - Form of Assignment Agreement
Schedule 1.1 - Responsible Individual
Schedule 1.4 - Sources and Uses; Funds Flow Memorandum
Schedule 3.2 - FEIN
Schedule 3.4(A) - Financial Statements
Schedule 3.4(B) - Pro Forma
Schedule 3.4(C) - Projections
Schedule 3.6(a) - Real Estate and Leases
Schedule 3.6(b) - Vessels
Schedule 3.7 - Labor Matters
Schedule 3.8 - Ventures, Subsidiaries and Affiliates; Outstanding
Stock
Schedule 3.11 - Tax Matters
Schedule 3.12 - ERISA Plans
Schedule 3.13 - Litigation
Schedule 3.15 - Intellectual Property
Schedule 3.17 - Hazardous Materials
Schedule 3.19 - Deposit and Disbursement Accounts
Schedule 3.20 - Government Contracts
Schedule 3.22 - Material Agreements
Schedule 5.1 - Trade Names
Schedule 5.4 - Insurance
Schedule 6.2 - Investments, Loans, Advances
Schedule 6.3 - Indebtedness
Schedule 6.4(a) - Transactions with Affiliates
Schedule 6.7 - Existing Liens
Schedule A-1 - Additional Phase I Environmental Site Assessments
Schedule D-1 - Mortgaged Properties
Annex A (Recitals) - Definitions
Annex B (Section 1.2) - Letters of Credit
Annex C (Section 1.8) - Cash Management Systems
Annex D (Section 2.1(a))- Schedule of Additional Closing Documents
Annex E (Section 4.1(a))- Financial Statements and Projections --
Reporting
Annex F (Section 4.1(b))- Collateral Reports
Annex G (Section 6.10) - Financial Covenants
Annex H (Section 9.9(a))- Wire Transfer Information
Annex I (Section 11.10) - Notice Addresses
CREDIT AGREEMENT, dated as of July 15, 1999, among the borrowers
signatory hereto from time to time ("BORROWERS"); SUPERIOR ENERGY
SERVICES, INC., a Delaware corporation ("HOLDINGS"); GENERAL ELECTRIC
CAPITAL CORPORATION, a New York corporation (in its individual capacity,
"GE CAPITAL"), for itself, as Lender, and as Administrative Agent for
Lenders; and the Lenders signatory hereto from time to time.
RECITALS
WHEREAS, Borrowers desire that Lenders extend revolving and
term credit facilities to Borrowers of up to One Hundred Fifty-Two
Million Dollars ($152,000,000) in the aggregate for the purpose of
refinancing certain indebtedness of Borrowers and to provide (a) working
capital financing for Borrowers, and (b) funds for other general
corporate purposes of Borrowers; and for these purposes, Lenders are
willing to make certain loans and other extensions of credit to Borrowers
of up to such amount upon the terms and conditions set forth herein; and
WHEREAS, Borrowers desire to have the ability to request
Lenders to increase certain term facilities by up to Fourteen Million
Dollars ($14,000,000) to facilitate certain acquisitions.
WHEREAS, Borrowers are operated as an integrated enterprise,
and each Borrower obtains value from the business of each other Borrower
and will benefit from the extensions of credit by Lenders to each other
Borrower hereunder.
WHEREAS, Borrowers desire to be jointly and severally liable to
repay all revolving and term credit facilities extended by the Lenders
and to be jointly and severally liable for all of the other obligations
of Borrowers under the Loan Documents, and desire to secure all of their
obligations under the Loan Documents by granting to Administrative Agent,
for the benefit of Administrative Agent and Lenders, a security interest
in and lien upon substantially all of their existing and after-acquired
personal and real property within the terms and conditions of the Loan
Documents and by pledging to Administrative Agent, for the benefit of
Administrative Agent and Lenders, all of the capital stock of their
Subsidiaries; and
WHEREAS, Holdings is willing to guaranty all of the obligations
of Borrowers to Lenders under the Loan Documents and to pledge to
Administrative Agent, for the benefit of Administrative Agent and
Lenders, all of the capital stock of all of its Subsidiaries to secure
such guaranty; and
WHEREAS, capitalized terms used in this Agreement shall have
the meanings ascribed to them in ANNEX A. All Annexes, Disclosure
Schedules, Exhibits and other attachments (collectively, "APPENDICES")
hereto, or expressly identified to this Agreement, are incorporated
herein by reference, and taken together, shall constitute but a single
agreement. These Recitals shall be construed as part of the Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and for other good and valuable
consideration, the parties hereto agree as follows:
1. AMOUNT AND TERMS OF CREDIT
1.1 CREDIT FACILITIES.
(a) REVOLVING CREDIT FACILITY.
(i)Subject to the terms and conditions hereof, each
Revolving Lender agrees to make available from time to time until the
Commitment Termination Date its Pro Rata Share of advances (each, a
"REVOLVING CREDIT ADVANCE"). The Pro Rata Share of the Revolving Loan of
any Revolving Lender shall not at any time exceed its separate Revolving
Loan Commitment. The obligations of each Revolving Lender hereunder
shall be several and not joint. The aggregate amount of Revolving Credit
Advances outstanding shall not exceed at any time the lesser of (A) the
Maximum Amount and (B) the Borrowing Base, in each case minus the sum of
the Letter of Credit Obligations and the Swing Line Loan outstanding at
such time ("BORROWING AVAILABILITY"). Until the Commitment Termination
Date, Borrowers may from time to time borrow, repay and reborrow under
this SECTION 1.1(a). Each Revolving Credit Advance shall be made on
notice by Borrower Representative to the representative of Administrative
Agent identified on SCHEDULE 1.1 at the address specified thereon. Those
notices must be given no later than (1) 11:00 a.m. (Chicago time) on the
Business Day of the proposed Revolving Credit Advance, in the case of an
Index Rate Loan, or (2) 11:00 a.m. (Chicago time) on the date which is
three (3) Business Days prior to the proposed Revolving Credit Advance,
in the case of a LIBOR Loan. Each such notice (a "NOTICE OF REVOLVING
CREDIT ADVANCE") must be given in writing (by telecopy or overnight
courier) substantially in the form of EXHIBIT 1.1(a)(i), and shall
include the information required in such Exhibit and such other
information as may be reasonably required by Administrative Agent. If
Borrowers desire to have the Revolving Credit Advances bear interest by
reference to a LIBOR Rate, they must comply with SECTION 1.5(e).
(ii)Borrowers shall execute and deliver to each Revolving
Lender a note to evidence the revolving loan commitment of that Revolving
Lender. Each note shall be in the maximum principal amount of the
Revolving Loan Commitment of the applicable Revolving Lender, dated the
Closing Date and substantially in the form of Exhibit 1.1(a)(ii) (Each a
"Revolving Note" and, collectively, the "Revolving Notes"). Each
Revolving Note shall represent the obligation of Borrowers to pay the
Amount of each Revolving Lender's Revolving Loan Commitment or, if less,
the applicable Revolving Lender's Pro Rata Share of the aggregate unpaid
principal amount of all Revolving Credit Advances to Borrowers together
with interest thereon as prescribed in Section 1.5. The entire unpaid
balance of the Revolving Loan and all other non-contingent Obligations
(other than Term Loan B, unless otherwise herein expressly provided)
shall be immediately due and payable in full in immediately available
funds on the Commitment Termination Date.
(iii)At the request of Borrower Representative, in its
discretion Administrative Agent may (but shall have absolutely no
obligation to), make Revolving Credit Advances to Borrowers on behalf of
Revolving Lenders in amounts which cause the outstanding balance of the
aggregate Revolving Loan to exceed the Borrowing Base (minus the Swing
Line Loan) (any such excess Revolving Credit Advances are herein referred
to collectively as "OVERADVANCES"), and no such event or occurrence shall
cause or constitute a waiver by Administrative Agent or Lenders of any
Default or Event of Default that may result therefrom or of
Administrative Agent's, the Swing Line Lender's or Revolving Lenders'
right to refuse to make any further Overadvances, Swing Line Advances or
Revolving Credit Advances, or incur any Letter of Credit Obligations, as
the case may be, at any time that an Overadvance exists or would result
therefrom. In addition, Overadvances may be made even if the conditions
to lending set forth in SECTION 2 have not been met. All Overadvances
shall constitute Index Rate Loans, shall bear interest at the Default
Rate and shall be payable on demand. Except as otherwise provided in
SECTION 1.11(B), the authority of Administrative Agent to make
Overadvances is limited to an aggregate amount not to exceed $1,000,000
at any time, shall not cause the Revolving Loan to exceed the Maximum
Amount, and may be revoked prospectively by a written notice to
Administrative Agent signed by Requisite Revolving Lenders.
(b)
(i)TERM LOAN A. Subject to the terms and conditions
hereof, each Term A Lender agrees to make a term loan on the Closing Date
to Borrowers (in aggregate, as may be increased as described below, "TERM
LOAN A") in the original principal amount of its Term Loan A Commitment.
After the Closing Date, Borrowers may request Lenders to increase the
amount of Term Loan A and Term Loan B (defined below) pro rata by up to
Fourteen Million Dollars ($14,000,000) to facilitate Permitted
Acquisitions. Such increase shall become effective only with the consent
of all of the Lenders. The obligations of each Term A Lender hereunder
shall be several and not joint. Term Loan A shall be evidenced by
promissory notes substantially in the form of EXHIBIT 1.1(b)(i) (each a
"TERM A NOTE" and collectively the "TERM A NOTES"), and Borrowers shall
execute and deliver a Term A Note to each Term A Lender on the Closing
Date. Each Term A Note shall represent the obligation of Borrowers to
pay the amount of the applicable Term A Lender's Term Loan A Commitment,
together with interest thereon as prescribed in SECTION 1.5.
(ii)Borrowers shall pay the principal amount of the Term
Loan A in twenty-four (24) consecutive quarterly installments on the last
day of March, June, September and December of each year, commencing
December 31, 1999, as follows (subject to pro rata adjustment should the
amount of Term Loan A be increased after the Closing Date):
Payment Date Installment Amount
December 31, 1999 $250,000
March 31, 2000 $250,000
June 30, 2000 $250,000
September 30, 2000 $250,000
December 31, 2000 $500,000
March 31, 2001 $500,000
June 30, 2001 $500,000
September 30, 2001 $500,000
December 31, 2001 $750,000
March 31, 2002 $750,000
June 30, 2002 $750,000
September 30, 2002 $750,000
December 31, 2002 $1,000,000
March 31, 2003 $1,000,000
June 30, 2003 $1,000,000
September 30, 2003 $1,000,000
December 31, 2003 $1,250,000
March 31, 2004 $1,250,000
June 30, 2004 $1,250,000
September 30, 2004 $1,250,000
December 31, 2004 $1,250,000
March 31, 2005 $1,250,000
June 30, 2005 $1,250,000
September 30, 2005 $1,250,000
Notwithstanding the foregoing, the aggregate outstanding principal
balance of Term Loan A shall be due and payable in full in immediately
available funds on the Commitment Termination Date, if not sooner paid in
full.
(iii)Each payment of principal with respect to Term Loan A
shall be paid to Administrative Agent for the ratable benefit of each
Term A Lender, ratably in proportion to each such Term A Lender's
respective Term Loan A Commitment.
(iv)TERM LOAN B. Subject to the terms and conditions
hereof, each Term B Lender agrees to make a term loan on the Closing Date
to Borrowers (in aggregate, as may be increased as described below, "TERM
LOAN B") in the original principal amount of its Term Loan B Commitment.
After the Closing Date, Borrowers may request Lenders to increase the
amount of Term Loan B and Term Loan A pro rata by up to Fourteen Million
Dollars ($14,000,000) to facilitate Permitted Acquisitions. Such
increase shall become effective only with the consent of all of the
Lenders. The obligations of each Term B Lender hereunder shall be
several and not joint. Term Loan B shall be evidenced by promissory
notes substantially in the form of EXHIBIT 1.1(b)(iv) (each a "TERM B
NOTE" and collectively the "TERM B NOTES"), and Borrowers shall execute
and deliver a Term B Note to each Term B Lender. Each Term B Note shall
represent the obligation of Borrowers to pay the amount of the applicable
Term B Lender's Term Loan B Commitment, together with interest thereon as
prescribed in SECTION 1.5.
(v)Borrowers shall pay the principal amount of the Term
Loan B in twenty-six (26) quarterly installments, as follows (subject to
pro rata adjustment should the amount of Term Loan B be increased after
the Closing Date):
Payment Date Installment Amount
December 31, 1999 $250,000
March 31, 2000 $250,000
June 30, 2000 $250,000
September 30, 2000 $250,000
December 31, 2000 $250,000
March 31, 2001 $250,000
June 30, 2001 $250,000
September 30, 2001 $250,000
December 31, 2001 $250,000
March 31, 2002 $250,000
June 30, 2002 $250,000
September 30, 2002 $250,000
December 31, 2002 $250,000
March 31, 2003 $250,000
June 30, 2003 $250,000
September 30, 2003 $250,000
December 31, 2003 $250,000
March 31, 2004 $250,000
June 30, 2004 $250,000
September 30, 2004 $250,000
December 31, 2004 $250,000
March 31, 2005 $250,000
June 30, 2005 $250,000
September 30, 2005 $250,000
December 31, 2005 $0
March 31, 2006 $42,000,000
June 30, 2006 $42,000,000
Notwithstanding the foregoing, if the Commitment Termination Date
occurs prior to September 30, 2005, the aggregate outstanding principal balance
of Term Loan B shall be due and payable in full in immediately available
funds on the Commitment Termination Date, if not sooner paid in full.
(vi)Each payment of principal with respect to Term Loan B
shall be paid to Administrative Agent for the ratable benefit of each
Term B Lender, ratably in proportion to each such Term B Lender's
respective Term Loan B Commitment.
(vii)CONTINGENT PAYMENT LOAN. Subject to the terms and
conditions hereof, each Contingent Payment Lender agrees to make its Pro
Rata Share of advances (each, a "CONTINGENT PAYMENT ADVANCE"). The Pro
Rata Share of the Contingent Payment Loan of any Contingent Payment
Lender shall not exceed at any time its separate Contingent Payment Loan
Commitment. The obligations of each Contingent Payment Lender hereunder
shall be several and not joint. The aggregate amount of Contingent
Payment Advances shall not exceed at any time the Contingent Payment Loan
Commitment. Until the Contingent Payment Loan Commitment Termination
Date, Borrowers may from time to time borrow under this Section
1.1(a)(vii). Each Contingent Payment Advance shall be made on notice by
Borrower Representative to the representative of Administrative Agent
identified on SCHEDULE 1.1 at the address specified thereon. Each such
notice must be given no later than 11:00 a.m. (Chicago time) on the date
which is three (3) Business Days prior to the proposed Contingent Payment
Advance. Each such notice (a "NOTICE OF CONTINGENT PAYMENT LOAN
DRAWDOWN REQUEST") must be given in writing (by telecopy or overnight courier)
substantially in the form of EXHIBIT 1.1(b)(vii)(x) and shall include the
information required in such Exhibit and such other information as may
reasonably be required by Administrative Agent. The Contingent Payment
Loan shall be evidenced by promissory notes substantially in the form of
EXHIBIT 1.1(b)(vii) (each a "CONTINGENT PAYMENT NOTE" and collectively
the "CONTINGENT PAYMENT NOTES"), and Borrowers shall execute and deliver
a Contingent Payment Note to each Contingent Payment Lender on the date
of the initial Contingent Payment Advance. Each Contingent Payment Note
shall represent the obligation of Borrowers to pay the amount of the
applicable Contingent Payment Lender's Contingent Payment Loan
Commitment, together with interest thereon as prescribed in SECTION 1.5
and shall be in the amount of such Contingent Payment Lender's Contingent
Payment Commitment. The portion of the Contingent Payment Facility
unfunded by the Contingent Payment Loan Commitment Termination Date shall
be cancelled.
(viii)Borrowers shall pay the principal amount of each
Contingent Payment Advance in equal quarterly installments on the last
day of each of March, June, September and December, commencing on the
first such date after the date of such Contingent Payment Advance, in an
annual amount equal to 15% of the original amount of such Contingent
Payment Advance, with the balance to be paid in full on the Commitment
Termination Date.
Notwithstanding the foregoing, the aggregate outstanding
principal balance of Contingent Payment Loan shall be due and payable in
full in immediately available funds on the Commitment Termination Date,
if not sooner paid in full.
(ix)Each payment of principal with respect to Contingent
Payment Loan shall be paid to Administrative Agent for the ratable
benefit of each Contingent Payment Lender, ratably in proportion to each
such Contingent Payment Lender's respective Contingent Payment Loan
Commitment.
(c) SWING LINE FACILITY.
(i)Administrative Agent shall notify the Swing Line Lender
upon Administrative Agent's receipt of any Notice of Revolving Credit
Advance. Subject to the terms and conditions hereof, the Swing Line
Lender may, in its discretion, make available from time to time until the
Commitment Termination Date advances (each, a "SWING LINE ADVANCE") in
accordance with any such notice. The aggregate amount of Swing Line
Advances outstanding shall not exceed the lesser of (A) the Swing Line
Commitment and (B) the Borrowing Base less the outstanding balance of the
Revolving Loan at such time ("SWING LINE AVAILABILITY"). Until the
Commitment Termination Date, Borrowers may from time to time borrow,
repay and reborrow under this SECTION 1.1(c). Each Swing Line Advance
shall be made pursuant to a Notice of Revolving Credit Advance delivered
by Borrower Representative to Administrative Agent in accordance with
SECTION 1.1(a). Those notices must be given no later than 12:00 noon
(Chicago time) on the Business Day of the proposed Swing Line Advance.
Notwithstanding any other provision of this Agreement or the other Loan
Documents, the Swing Line Loan shall constitute an Index Rate Loan.
Borrowers shall repay the aggregate outstanding principal amount of the
Swing Line Loan upon demand therefor by Administrative Agent and in any
case with the proceeds of any Revolving Credit Advance made thereafter.
(ii)Borrowers shall execute and deliver to the Swing Line
Lender a promissory note to evidence the Swing Line Commitment. Such
note shall be in the maximum principal amount of the Swing Line
Commitment of the Swing Line Lender, dated the Closing Date and
substantially in the form of EXHIBIT 1.1(c)(ii) (the "SWING LINE NOTE").
The Swing Line Note shall represent the obligation of Borrowers to pay
the amount of the Swing Line Commitment or, if less, the aggregate unpaid
principal amount of all Swing Line Advances made to Borrowers together
with interest thereon as prescribed in SECTION 1.5. The entire unpaid
balance of the Swing Line Loan shall be immediately due and payable in
full in immediately available funds on the Commitment Termination Date if
not sooner paid in full.
(iii)REFUNDING OF SWING LINE LOANS. The Swing Line Lender,
at any time and from time to time in its sole and absolute discretion,
may on behalf of Borrowers (and each Borrower hereby irrevocably
authorizes the Swing Line Lender to so act on its behalf) request each
Revolving Lender (including the Swing Line Lender) to make a Revolving
Credit Advance to Borrowers (which shall be an Index Rate Loan) in an
amount equal to such Revolving Lender's Pro Rata Share of the principal
amount of the Swing Line Loan (the "REFUNDED SWING LINE LOAN")
outstanding on the date such notice is given. Unless any of the events
described in SECTIONS 8.1(g), 8.1(h) or 8.1(i) shall have occurred (in
which event the procedures of SECTION 1.1(c)(iv) shall apply) and
regardless of whether the conditions precedent set forth in this
Agreement to the making of a Revolving Credit Advance are then satisfied,
each Revolving Lender shall disburse directly to Administrative Agent,
its Pro Rata Share of a Revolving Credit Advance on behalf of the Swing
Line Lender, prior to 2:00 p.m. (Chicago time), in immediately available
funds on the Business Day next succeeding the date such notice is given.
The proceeds of such Revolving Credit Advances shall be immediately paid
to the Swing Line Lender and applied to repay the Refunded Swing Line
Loan.
(iv)PARTICIPATION IN SWING LINE LOANS. If, prior to
refunding a Swing Line Loan with a Revolving Credit Advance pursuant to
SECTION 1.1(c)(iii), one of the events described in SECTIONS 8.1(g),
8.1(h) or 8.1(i) shall have occurred, then, subject to the provisions of
SECTION 1.1(c)(v) below, each Revolving Lender will, on the date such
Revolving Credit Advance was to have been made for the benefit of
Borrowers, purchase from the Swing Line Lender an undivided participation
interest in the Swing Line Loan in an amount equal to its Pro Rata Share
of such Swing Line Loan. Upon request, each Revolving Lender will
promptly transfer to the Swing Line Lender, in immediately available
funds, the amount of its participation.
(v)REVOLVING LENDERS' OBLIGATIONS UNCONDITIONAL. Each
Revolving Lender's obligation to make Revolving Credit Advances in
accordance with SECTION 1.1(c)(iii) and to purchase participating
interests in accordance with SECTION 1.1(c)(iv) shall be absolute and
unconditional and shall not be affected by any circumstance, including
(A) any setoff, counterclaim, recoupment, defense or other right which
such Revolving Lender may have against the Swing Line Lender, any
Borrower or any other Person for any reason whatsoever; (B) the
occurrence or continuance of any Default or Event of Default; (C) any
inability of Borrowers to satisfy the conditions precedent to borrowing
set forth in this Agreement on the date upon which such Refunded Swing
Line Loan is to be made or participating interest is to be purchased or
(D) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing. If any Revolving Lender does not make
available to Administrative Agent or the Swing Line Lender, as
applicable, the amount required pursuant to SECTION 1.1(c)(iii) or
1.1(c)(iv), as the case may be, the Swing Line Lender shall be entitled
to recover such amount on demand from such Revolving Lender, together
with interest thereon for each day from the date of non-payment until
such amount is paid in full at the Federal Funds Rate for the first two
Business Days and at the Index Rate thereafter.
(d)RELIANCE ON NOTICES. Administrative Agent shall be entitled
to rely upon, and shall be fully protected in relying upon, any Notice of
Revolving Credit Advance, Notice of Contingent Payment Loan Drawdown
Request, Notice of Conversion/Continuation or similar notice believed by
Administrative Agent to be genuine. Administrative Agent may assume that
each Person executing and delivering such a notice was duly authorized,
unless the responsible individual acting thereon for Administrative Agent
has actual knowledge to the contrary.
1.2 LETTERS OF CREDIT. Subject to and in accordance with the
terms and conditions contained herein and in ANNEX B, Borrowers shall
have the right to request, and Revolving Lenders agree to incur, or
purchase participations in, Letter of Credit Obligations in respect of
Borrowers and Borrowers agree to pay and perform its obligations as
provided in ANNEX B.
1.3 PREPAYMENTS.
(a) VOLUNTARY PREPAYMENTS. Borrowers may at any time on at
least three (3) days' prior written notice in the case of LIBOR Loans and
two (2) days' prior written notice in the case of Index Rate Loans, to
Administrative Agent (i) voluntarily prepay all or part of the Term
Loans, pro rata, in accordance with this SECTION 1.3(a), and/or (ii)
voluntarily prepay all or part of the Revolving Loan and/or permanently
reduce (but not terminate) the Revolving Loan Commitment; PROVIDED that
(A) any such prepayments or reductions shall be in a minimum amount of
$500,000 and integral multiples of $100,000 in excess of such amount, (B)
the Revolving Loan Commitment shall not be reduced to an amount less than
the greater of (x) $5,000,000 and (y) the L/C Sublimit and (C) Borrowers
shall pay to Administrative Agent in connection therewith the prepayment
premiums set forth in SECTION 1.9(c), if applicable. Borrowers may at
any time on at least three (3) days' prior written notice to
Administrative Agent terminate the Revolving Loan Commitment, PROVIDED
that upon such termination all Loans and other Obligations shall be
immediately due and payable in full. Any such voluntary prepayment and
any such reduction or termination of the Revolving Loan Commitment must
be accompanied by the payment of any LIBOR funding breakage costs in
accordance with SECTION 1.13(b). Upon any such prepayment and reduction
or termination of the Revolving Loan Commitment, Borrowers' right to
request Revolving Credit Advances, or request that Letter of Credit
Obligations be incurred on their behalf, or request Swing Line Advances,
shall simultaneously be permanently reduced or terminated, as the case
may be; PROVIDED that a permanent reduction of the Revolving Loan
Commitment shall not require a corresponding pro rata reduction in the
L/C Sublimit. Each partial prepayment of the Term Loans shall be applied
pro rata across all of the Term Loans, based upon the amounts outstanding
under each of the Term Loans, and shall reduce each unpaid installment of
principal on each Term Loan pro rata. Borrowers may at any time upon at
least three (3) days' prior written notice to Administrative Agent,
terminate or permanently reduce the Contingent Payment Loan Commitment,
PROVIDED that any such reductions shall be in a minimum amount of
$500,000 and integral multiples of $100,000 in excess of such amount.
(b)MANDATORY PREPAYMENTS.
(i)If at any time the outstanding balance of the Revolving
Loan exceeds the lesser of (A) the Maximum Amount and (B) the Borrowing
Base, minus, in each case, the outstanding Swing Line Loan at such time,
Borrowers shall immediately repay the aggregate outstanding Revolving
Credit Advances to the extent required to eliminate such excess. If any
such excess remains after repayment in full of the aggregate outstanding
Revolving Credit Advances, Borrowers shall provide cash collateral for
the Letter of Credit Obligations in the manner set forth in ANNEX B to
the extent required to eliminate such excess. Notwithstanding the
foregoing, any Overadvance made pursuant to SECTION 1.1(a)(iii) shall be
repaid on demand.
(ii)Immediately upon receipt by any Credit Party of
proceeds of any asset disposition (including condemnation proceeds, but
excluding proceeds of asset dispositions permitted by SECTION 6.8) or any
sale of Stock of any Subsidiary of any Credit Party, Borrowers shall
prepay the Obligations in an amount equal to all such proceeds, net of
(A) commissions and other reasonable and customary transaction costs,
fees and expenses properly attributable to such transaction and payable
by such Credit Party in connection therewith, other than such costs, fees
and expenses paid to Affiliates not on an arms' length basis, (B)
transfer taxes, (C) amounts payable to holders of senior Liens (to the
extent such Liens constitute Permitted Encumbrances hereunder), if any,
and (D) an appropriate reserve for income taxes required to be paid in
accordance with GAAP in connection therewith. Any such prepayment shall
be applied in accordance with CLAUSE (c) below.
(iii)[RESERVED.]
(iv)Until the Termination Date, Borrowers shall prepay the
Obligations on the earlier of the date which is ten (10) days after (A)
the date on which Borrowers' annual audited Financial Statements for the
immediately preceding Fiscal Year (beginning with the Fiscal Year ending
December 31, 2000) are delivered pursuant to ANNEX E or (B) the date on
which such annual audited Financial Statements were required to be
delivered pursuant to ANNEX E, in an amount equal to fifty percent (50%)
of Excess Cash Flow for the immediately preceding Fiscal Year MINUS the
aggregate principal amount of all voluntary prepayments of Term Loans
made during such Fiscal Year pursuant to SECTION 1.3(A), PROVIDED that
such percentage shall be reduced to thirty-five percent (35%) for any
Fiscal Year if Borrowers' Leverage Ratio for such Fiscal Year is 4.00:1
or less (and greater than or equal to 3.00:1), PROVIDED FURTHER that such
percentage shall be reduced to zero percent (0%) for any Fiscal Year if
Borrowers' Leverage Ratio for such Fiscal Year is 3.00:1 or less. Any
prepayments from Excess Cash Flow paid pursuant to this CLAUSE (iv) shall
be applied in accordance with CLAUSE (c) below. Each such prepayment
shall be accompanied by a certificate signed by Borrower Representative's
chief financial officer certifying the manner in which Excess Cash Flow
and the resulting prepayment were calculated, which certificate shall be
in form and substance satisfactory to Administrative Agent.
(c)APPLICATION OF CERTAIN MANDATORY PREPAYMENTS. Any
prepayments made by Borrowers pursuant to CLAUSES (b)(ii), (b)(iii), or
(b)(iv) above shall be applied as follows: FIRST, to Fees and
reimbursable expenses of Administrative Agent then due and payable
pursuant to any of the Loan Documents; SECOND, to interest then due and
payable, pro rata, on the outstanding Term Loans; THIRD, to prepay the
scheduled installments, pro rata, of the outstanding Term Loans, applied
to installments pro rata (on a pro rata basis, except that holders of
Term Loan B shall have the option to decline to receive any such
mandatory prepayments and any amount so declined shall be applied to
prepayments of or in respect of Loans, Advances or other Obligations in
the order herein provided), until such Loans shall have been prepaid in
full; FOURTH, to interest then due and payable on the Swing Line Loan;
FIFTH, to the principal balance of the Swing Line Loan until the same
shall have been repaid in full; SIXTH, to interest then due and payable
on the Revolving Credit Advances; SEVENTH, to the outstanding principal
balance of Revolving Credit Advances until the same shall have been paid
in full; and EIGHTH, to any Letter of Credit Obligations, to provide cash
collateral therefor in the manner set forth in ANNEX B, until all such
Letter of Credit Obligations have been fully cash collateralized in the
manner set forth in ANNEX B. Neither the Revolving Loan Commitment nor
the Swing Line Commitment shall be permanently reduced by the amount of
any such prepayments.
(d) APPLICATION OF PREPAYMENTS FROM INSURANCE PROCEEDS.
Prepayments from insurance proceeds in accordance with SECTION 5.4(c)
shall be applied as follows: insurance proceeds from casualties or
losses to cash or Inventory shall be applied first, to the Swing Line
Loans and second to the Revolving Credit Advances; insurance proceeds
from casualties or losses to Equipment, Fixtures and Real Estate shall be
applied to the Term Loans, pro rata. Neither the Revolving Loan
Commitment nor the Swing Line Loan Commitment shall be permanently
reduced by the amount of any such prepayments. If the precise amount of
insurance proceeds allocable to Inventory as compared to Equipment,
Fixtures and Real Estate is not otherwise determined, the allocation and
application of those proceeds shall be determined by Administrative
Agent, subject to the approval of Requisite Lenders.
(e) NOTHING IN THIS SECTION 1.3 shall be construed to constitute
Administrative Agent's or any Lender's consent to any transaction
referred to in CLAUSES (b)(ii) and (b)(iii) above which is not permitted
by other provisions of this Agreement or the other Loan Documents.
1.4 USE OF PROCEEDS. Borrowers shall utilize the proceeds of
Term Loan A, Term Loan B, the Revolving Loan and the Swing Line Loan
solely for the funding of the Refinancing (and to pay certain related
transaction fees and expenses), funding certain capital expenditures, and
for the financing of Borrowers' working capital and general corporate
needs, including acquisitions to the extent permitted by SECTION 6.1(v),
(but excluding in any event the making of any Restricted Payment not
specifically permitted by SECTION 6.14), except that the proceeds of the
portion of Term Loan A and Term Loan B that is uncommitted on the Closing
Date, if borrowed, shall be used solely to facilitate Permitted
Acquisitions. DISCLOSURE SCHEDULE (1.4) contains a description of
Borrowers' sources and uses of funds as of the Closing Date, including
Loans and Letter of Credit Obligations to be made or incurred on that
date, and a funds flow memorandum detailing how funds from each source
are to be transferred to particular uses. Borrowers shall utilize the
proceeds of the Contingent Payment Loan (to the extent drawn) solely to
pay contingent obligations relating to acquisitions made by Holdings
and/or its Subsidiaries (other than Cardinal Holdings and its
Subsidiaries) during calendar years 1997 and 1998 pursuant to the
Contingent Payment Agreements.
1.5 INTEREST AND APPLICABLE MARGINS.
(a)Borrowers shall pay interest to Administrative Agent, for
the ratable benefit of Lenders in accordance with the various Loans being
made by each Lender, in arrears on each applicable Interest Payment Date,
at the following rates: (i) with respect to the Revolving Credit
Advances, the Index Rate plus the Applicable Revolver Index Margin per
annum or, at the election of Borrowers, the applicable LIBOR Rate plus
the Applicable Revolver LIBOR Margin per annum, based on the aggregate
Revolving Credit Advances outstanding from time to time; (ii) with
respect to any Term Loan, the Index Rate plus the Applicable Term Loan
Index Margin per annum or, at the election of Borrowers, the applicable
LIBOR Rate plus the Applicable Term Loan LIBOR Margin per annum; and
(iii) with respect to the Swing Line Loan, the Index Rate plus the
Applicable Revolver Index Margin per annum.
The following Applicable Margins (consisting of per annum rate
margins) shall apply until the Applicable Margins are adjusted as
described below:
Applicable Revolver Index Margin 1.25%
Applicable Revolver LIBOR Margin 2.50%
Applicable Term Loan A Index Margin 1.50%
Applicable Term Loan A LIBOR Margin 2.75%
Applicable Term Loan B Index Margin 2.00%
Applicable Term Loan B LIBOR Margin 3.25%
Applicable Contingent Payment Loan Index Margin 1.25%
Applicable Contingent Payment Loan LIBOR Margin 2.50%
Applicable L/C Margin 2.00%
Applicable Facility Fee Margin 0.25%
Applicable Unused Facility Fee Margin 0.50%
The Applicable Margins will be adjusted (up or down) prospectively on a
quarterly basis as determined by Borrowers' Consolidated Leverage Ratio
as at the last day of each Fiscal Quarter, commencing on the first day of
the calendar month that occurs more than three (3) days after delivery to
Lenders of Borrowers' quarterly consolidated Financial Statements for the
quarter ending September 30, 2000 and thereafter on the first day of the
calendar month that occurs more than three (3) days after delivery of the
Borrowers' quarterly consolidated Financial Statements to Lenders.
Adjustments in Applicable Margins will be determined by reference to the
following grids:
If Consolidated Leverage Level of Applicable Margins:
Ratio is:
< 3.0 Level I
< 4.0, but _> 3.0 Level II
> 4.0 Level III
APPLICABLE MARGINS
Level I Level II Level III
Applicable Revolver Index Margin 1.00% 1.25% 1.50%
Applicable Revolver LIBOR Margin 2.25% 2.50% 2.75%
Applicable Term Loan A Index Margin 1.25% 1.50% 1.75%
Applicable Term Loan A LIBOR Margin 2.50% 2.75% 3.00%
Applicable Term Loan B Index Margin 1.75% 2.00% 2.25%
Applicable Term Loan B LIBOR Margin 3.00% 3.25% 3.50%
Applicable Contingent Payment Loan Index
Margin 1.00% 1.25% 1.50%
Applicable Contingent Payment Loan LIBOR
Margin 2.25% 2.50% 2.75%
Applicable L/C Margin 2.00% 2.00% 2.00%
Applicable Unused Facility Fee Margin 0.375% 0.50% 0.50%
Applicable Facility Fee Margin 0.25% 0.25% 0.25%
Concurrently with the delivery of all Financial Statements
specified above as a basis for adjustments in the Applicable Margins,
Borrower Representative shall deliver to Administrative Agent and Lenders
a certificate, signed by its chief financial officer, setting forth in
reasonable detail the basis for the continuance of, or any change in, the
Applicable Margins. Failure to timely deliver such Financial Statements
shall, in addition to any other remedy provided for in this Agreement,
result in an increase in the Applicable Margins to the highest level set
forth in the foregoing grid, until three (3) Business Days following the
delivery of those Financial Statements demonstrating that such an
increase is not required. If an Event of Default shall have occurred or
be continuing at the time any reduction in the Applicable Margins is to
be implemented, that reduction shall be deferred until three (3) Business
Days following the date on which such Event of Default is waived or
cured.
(b)If any payment on any Loan becomes due and payable on a day
other than a Business Day, the maturity thereof will be extended to the
next succeeding Business Day (except as set forth in the definition of
LIBOR period) and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such
extension.
(c)All computations of Fees calculated on a per annum basis and
interest shall be made by Administrative Agent on the basis of a three
hundred and sixty (360) day year, in each case for the actual number of
days occurring in the period for which such interest and Fees are
payable. The Index Rate shall be determined each day based upon the
Index Rate as in effect each day. Each determination by Administrative
Agent of an interest rate hereunder shall be conclusive, absent manifest
error.
(d)So long as any Event of Default shall have occurred and be
continuing, and at the election of Administrative Agent (or upon the
written request of Requisite Lenders) confirmed by written notice from
Administrative Agent to Borrower Representative, the interest rates
applicable to the Loans and the Letter of Credit Fees shall be increased
by two percentage points (2%) per annum above the rates of interest or
the rate of such fees otherwise applicable hereunder ("DEFAULT RATE"),
and all outstanding Obligations shall bear interest at the Default Rate
applicable to such Obligations. Interest and Letter of Credit Fees at the
Default Rate shall accrue from the initial date of such Event of Default
until that Event of Default is cured or waived and shall be payable upon
demand.
(e)So long as no Event of Default shall have occurred and be
continuing, and subject to the additional conditions precedent set forth
in SECTION 2.2, Borrowers shall have the option to (i) request that any
Revolving Credit Advances be made as a LIBOR Loan, (ii) convert at any
time all or any part of outstanding Loans (other than the Swing Line
Loan) from Index Rate Loans to LIBOR Loans, (iii) convert any LIBOR Loan
to an Index Rate Loan, subject to payment of LIBOR breakage costs in
accordance with SECTION 1.13(b) if such conversion is made prior to the
expiration of the LIBOR Period applicable thereto, or (iv) continue all
or any portion of any Loan (other than the Swing Line Loan) as a LIBOR
Loan upon the expiration of the applicable LIBOR Period and the
succeeding LIBOR Period of that continued Loan shall commence on the last
day of the LIBOR Period of the Loan to be continued. Any Loan to be made
or continued as, or converted into, a LIBOR Loan must be in a minimum
amount of $500,000 and integral multiples of $500,000 in excess of such
amount. Any such election must be made by 11:00 a.m. (Chicago time) on
the third (3rd) Business Day prior to (1) the date of any proposed
Advance which is to bear interest at the LIBOR Rate, (2) the end of each
LIBOR Period with respect to any LIBOR Loans to be continued as such, or
(3) the date on which Borrowers wish to convert any Index Rate Loan to a
LIBOR Loan for a LIBOR Period designated by Borrowers in such election.
If no election is received with respect to a LIBOR Loan by 11:00 a.m.
(Chicago time) on the third (3rd) Business Day prior to the end of the
LIBOR Period with respect thereto (or if an Event of Default shall have
occurred and be continuing or the additional conditions precedent set
forth in SECTION 2.2 shall not have been satisfied), that LIBOR Loan
shall be converted to an Index Rate Loan at the end of its LIBOR Period.
Borrowers must make such election by notice to Administrative Agent in
writing, by telecopy or overnight courier. In the case of any conversion
or continuation, such election must be made pursuant to a written notice
(a "NOTICE OF CONVERSION/CONTINUATION") in the form of EXHIBIT 1.5(e).
No Loan may be made as or converted into a LIBOR Loan until forty-five
(45) days after the Closing Date or such earlier date on which the
initial syndication of the Commitments shall have been completed, as
determined by Administrative Agent.
(f)NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THIS
SECTION 1.5, if a court of competent jurisdiction determines in a final
order that the rate of interest payable hereunder exceeds the highest
rate of interest permissible under law (the "MAXIMUM LAWFUL RATE"), then
so long as the Maximum Lawful Rate would be so exceeded, the rate of
interest payable hereunder shall be equal to the Maximum Lawful Rate;
PROVIDED, HOWEVER, that if at any time thereafter the rate of interest
payable hereunder is less than the Maximum Lawful Rate, Borrowers shall
continue to pay interest hereunder at the Maximum Lawful Rate until such
time as the total interest received by Administrative Agent, on behalf of
Lenders, is equal to the total interest which would have been received
had the interest rate payable hereunder been (but for the operation of
this paragraph) the interest rate payable since the Closing Date as
otherwise provided in this Agreement. Thereafter, interest hereunder
shall be paid at the rate(s) of interest and in the manner provided in
SECTIONS 1.5(a) through (e) above, unless and until the rate of interest
again exceeds the Maximum Lawful Rate, and at that time this paragraph
shall again apply. In no event shall the total interest received by any
Lender pursuant to the terms hereof exceed the amount which such Lender
could lawfully have received had the interest due hereunder been
calculated for the full term hereof at the Maximum Lawful Rate. If the
Maximum Lawful Rate is calculated pursuant to this paragraph, such
interest shall be calculated at a daily rate equal to the Maximum Lawful
Rate divided by the number of days in the year in which such calculation
is made. If, notwithstanding the provisions of this SECTION 1.5(f), a
court of competent jurisdiction shall finally determine that a Lender has
received interest hereunder in excess of the Maximum Lawful Rate,
Administrative Agent shall, to the extent permitted by applicable law,
promptly apply such excess in the order specified in SECTION 1.11 and
thereafter shall refund any excess to Borrowers or as a court of
competent jurisdiction may otherwise order.
1.6 ELIGIBLE ACCOUNTS. Based on the most recent Borrowing Base
Certificate delivered by Borrower Representative to Administrative Agent
and on other information available to Administrative Agent,
Administrative Agent shall in its reasonable credit judgment determine
which Accounts of Borrowers shall be "ELIGIBLE ACCOUNTS" for purposes of
this Agreement. In determining whether a particular Account constitutes
an Eligible Account, Administrative Agent shall not include any such
Account to which any of the exclusionary criteria set forth below
applies. Administrative Agent reserves the right, at any time and from
time to time after the Closing Date, to adjust any such criteria, to
establish new criteria and to adjust advance rates with respect to
Eligible Accounts, in its reasonable credit judgment, subject to the
approval of Requisite Revolving Lenders in the case of adjustments or new
criteria or changes in advance rates which have the effect of making more
credit available. Eligible Accounts shall not include any Account of
any Borrower:
(a)which does not arise from the sale of goods, leasing of
assets or property or the performance of services by such borrower in the
ordinary course of its business;
(b)upon which (i) such Borrower's right to receive payment is
not absolute, is not then due and payable, or is contingent upon the
fulfillment of any condition whatsoever or (ii) such Borrower is not able
to bring suit or otherwise enforce its remedies against the Account
Debtor through judicial process;
(c)to the extent any defense, counterclaim, setoff or dispute
is asserted as to such Account or if the Account represents a progress
billing consisting of an invoice for goods sold or used or services
rendered pursuant to a contract under which the Account Debtor's
obligation to pay that invoice is subject to such Borrower's completion
of further performance under such contract;
(d)that is not a true and correct statement of bona fide
indebtedness incurred in the amount of the Account for merchandise sold
or assets or property leased to or services rendered and accepted by the
applicable Account Debtor;
(e)with respect to which an invoice or other notice of amounts
owing has not been sent to the applicable Account Debtor;
(f)that (i) is not owned by such Borrower or (ii) is subject to
any right, claim, security interest or other interest of any other
Person, other than Liens in favor of Administrative Agent, on behalf of
itself and Lenders;
(g)that arises from a sale to any director, officer, other
employee or Affiliate of any Credit Party other than to portfolio
companies of First Reserve Corporation on an arm's length basis;
(h)that is the obligation of an Account Debtor that is the
United States government or a political subdivision thereof, or any state
or municipality or department, agency or instrumentality thereof unless
Administrative Agent, in its sole discretion, has agreed to the contrary
in writing and such Borrower, if necessary or desirable, has complied
with the Federal Assignment of Claims Act of 1940, and any amendments
thereto, or any applicable state statute or municipal ordinance of
similar purpose and effect, with respect to such obligation;
(i)that is the obligation of an Account Debtor located in a
foreign country other than Canada (excluding the provinces of Quebec,
Newfoundland, Nova Scotia and Xxxxxx Xxxxxx Island) unless payment
thereof is assured by a letter of credit, satisfactory to Administrative
Agent as to form, amount and issuer;
(j)to the extent such Borrower or any Subsidiary thereof is
liable for goods sold or services rendered by the applicable Account
Debtor to such Borrower or any Subsidiary thereof but only to the extent
of the potential offset;
(k)that arises with respect to goods which are delivered on a
xxxx-and-hold, cash-on-delivery basis or placed on consignment,
guaranteed sale or other terms by reason of which the payment by the
Account Debtor is or may be conditional;
(l)that is in default; PROVIDED, THAT, without limiting the
generality of the foregoing, an Account shall be deemed in default upon
the occurrence of any of the following:
(i)it is not paid within the earlier of: sixty (60) days
following its due date or ninety (90) days following its original invoice
date;
(ii)if any Account Debtor obligated upon such Account
suspends business, makes a general assignment for the benefit of
creditors or fails to pay its debts generally as they come due; or
(iii)if any petition is filed by or against any Account
Debtor obligated upon such Account under any bankruptcy law or any other
federal, state or foreign (including any provincial) receivership,
insolvency relief or other law or laws for the relief of debtors;
(m)which is the obligation of an Account Debtor if fifty
percent (50%) or more of the dollar amount of all Accounts owing by that
Account Debtor are ineligible under the other criteria set forth in this
SECTION 1.6;
(n)as to which Administrative Agent's interest, on behalf of
itself and Lenders, therein is not a first priority perfected security
interest;
(o)as to which any of the representations or warranties
pertaining to Accounts set forth in this Agreement or the Security
Agreement is untrue;
(p)to the extent such account is evidenced by a judgment,
Instrument or Chattel Paper;
(q)to the extent such Account exceeds any credit limit
established by Administrative Agent, in its reasonable discretion;
(r)which is payable in any currency other than Dollars; or
(s)which is unacceptable to Administrative Agent in its
reasonable credit judgment.
1.7 [RESERVED.]
1.8 CASH MANAGEMENT SYSTEMS. As soon as practicable, but in no
event later than sixty (60) days after the Closing Date, Borrowers will
establish and will maintain until the Termination Date, the cash
management systems described on ANNEX C (the "CASH MANAGEMENT SYSTEMS").
1.9 FEES.
(a)Borrowers shall pay to GE Capital, individually, the Fees
specified in that certain fee letter dated as of July 15, 1999 among
Borrowers, Holdings and GE Capital (the "GE CAPITAL FEE LETTER"), at the
times specified for payment therein.
(b)As additional compensation for the Revolving Lenders and the
Contingent Payment Lenders, Borrowers agree to pay to Administrative
Agent, for the ratable benefit of such Lenders, in arrears, on the first
Business Day of each month prior to the Commitment Termination Date and
on the Commitment Termination Date with respect to Revolving Loans and
prior to the Contingent Payment Loan Commitment Termination Date and on
the Contingent Payment Loan Commitment Termination Date with respect to
the Contingent Payment Loan Commitment, a fee for Borrowers' non-use of
available funds in an amount equal to the Applicable Unused Facility Fee
Margin per annum (calculated on the basis of a 360 day year for actual
days elapsed) on (i) in the case of the Revolving Loan, the difference
between (x) the Maximum Amount (as it may be reduced from time to time)
and (y) the average for the period of the daily closing balances of the
Revolving Loan and the Swing Line Loan, as applicable, during the period
for which such fee is due and, (ii) in the case of the Contingent Payment
Loan, the unused Contingent Payment Loan Commitment (as it may be reduced
From time to time).
(c)In the event that Borrowers terminate the Revolving Loan
Commitment or prepay any Term Loan, or the Revolving Loan Commitment is
terminated or any Term Loan is prepaid as the result of an Event of
Default, in each case prior to the first anniversary of the Closing Date,
then Borrowers shall pay to Administrative Agent an amount equal to 1% of
the Revolving Loan Commitment and/or the amount of the Term Loan being
prepaid, as applicable. Except as required by SECTION 1.3 or this
SECTION 1.9, no other prepayment fee shall be payable by Borrowers upon
any voluntary or mandatory prepayment.
(d)As additional compensation for the Contingent Payment
Lenders, Borrowers agree to pay to Administrative Agent, for the ratable
benefit of such Lenders, in advance on the Closing Date and on each
anniversary thereof prior to the Commitment Termination Date, a fee in an
amount equal to the Applicable Facility Fee Margin per annum (calculated
on the basis of a 360 day year for actual days elapsed) on the Contingent
Payment Loan Commitment, whether or not used.
1.10 RECEIPT OF PAYMENTS. Borrowers shall make each payment
under this Agreement not later than 1:00 p.m. Chicago time on the day
when due in immediately available funds in Dollars to the Collection
Account. For purposes of computing interest and Fees and determining
Borrowing Availability or Net Borrowing Availability as of any date, all
payments shall be deemed received on the day of receipt of immediately
available funds therefor in the Collection Account prior to 1:00 p.m.
Chicago time. Payments received after 1:00 p.m. Chicago time on any
Business Day shall be deemed to have been received on the following
Business Day.
1.11 APPLICATION AND ALLOCATION OF PAYMENTS.
(a)So long as no Event of Default shall have occurred and be
continuing, (i) payments matching specific scheduled payments then due
shall be applied to those scheduled payments; (ii) voluntary prepayments
shall be applied as determined by Borrowers, subject to the provisions of
SECTION 1.3(A); and (iii) mandatory prepayments shall be applied as set
forth in SECTION 1.3. As to all payments made when an Event of Default
shall have occurred and be continuing or following the Commitment
Termination Date, Borrowers hereby irrevocably waive the right to direct
the application of any and all payments received from or on behalf of
Borrowers, and each Borrower hereby irrevocably agrees that
Administrative Agent shall have the continuing exclusive right to apply
any and all such payments against the Obligations of Borrowers as
Administrative Agent may deem advisable notwithstanding any previous
entry by Administrative Agent in the Loan Account or any other books and
records. In the absence of a specific determination by Administrative
Agent with respect thereto, payments shall be applied to amounts then due
and payable in the following order: (1) to Fees and Administrative
Agent's expenses reimbursable hereunder; (2) to interest on the Swing
Line Loan; (3) to principal payments on the Swing Line Loan; (4) to
interest on the other Loans, ratably in proportion to the interest
accrued as to each Loan; (5) to principal payments on the other Loans and
to provide cash collateral for Letter of Credit Obligations in the manner
described in ANNEX B, ratably to the aggregate, combined principal
balance of the other Loans and outstanding Letter of Credit Obligations;
and (6) to all other Obligations including expenses of Lenders to the
extent reimbursable under SECTION 11.3.
(b)Administrative Agent is authorized to, and at its sole
election may, charge to the Revolving Loan balance on behalf of Borrowers
and cause to be paid all Fees, expenses, Charges, costs (including
insurance premiums in accordance with SECTION 5.4(a)) and interest and
principal, other than principal of the Revolving Loan, owing by Borrowers
under this Agreement or any of the other Loan Documents if and to the
extent Borrowers fail after due notice to promptly pay any such amounts,
even if such charges would cause the aggregate balance of the Revolving
Loan and the Swing Line Loan to exceed Borrowing Availability. At
Administrative Agent's option and to the extent permitted by law, any
charges so made shall constitute part of the Revolving Loan hereunder.
1.12 LOAN ACCOUNT AND ACCOUNTING. Administrative Agent shall
maintain a loan account (the "LOAN ACCOUNT") on its books to record: (a)
all Advances and all Term Loans, (b) all payments made by Borrowers, and
(c) all other debits and credits as provided in this Agreement with
respect to the Loans or any other Obligations. All entries in the Loan
Account shall be made in accordance with Administrative Agent's customary
accounting practices as in effect from time to time. The balance in the
Loan Account, as recorded on Administrative Agent's most recent printout
or other written statement, shall be presumptive evidence of the amounts
due and owing to Administrative Agent and Lenders by Borrowers; PROVIDED
that any failure to so record or any error in so recording shall not
limit or otherwise affect Borrowers' duty to pay the Obligations.
Administrative Agent shall render to Borrower Representative a monthly
accounting of transactions with respect to the Loans setting forth the
balance of the Loan Account. Unless Borrower Representative notifies
Administrative Agent in writing of any objection to any such accounting
(specifically describing the basis for such objection), within sixty (60)
days after the date thereof, each and every such accounting shall (absent
manifest error) be deemed final, binding and conclusive upon each
Borrower in all respects as to all matters reflected therein. Only those
items expressly objected to in such notice shall be deemed to be disputed
by Borrowers.
1.13 INDEMNITY.
(a)Each Credit Party that is a signatory hereto shall jointly
and severally indemnify and hold harmless each of Administrative Agent,
Lenders and their respective Affiliates, and each such Person's
respective officers, directors, employees, attorneys, agents and
representatives (each, an "INDEMNIFIED PERSON"), from and against any and
all suits, actions, proceedings, claims, damages, losses, liabilities and
expenses (including reasonable attorneys' fees and disbursements and
other reasonable costs of investigation or defense, including those
incurred upon any appeal) which may be instituted or asserted against or
incurred by any such Indemnified Person as the result of credit having
been extended, suspended or terminated under this Agreement and the other
Loan Documents and the administration of such credit, and in connection
with or arising out of the transactions contemplated hereunder and
thereunder and any actions or failures to act in connection therewith,
including any and all Environmental Liabilities and legal costs and
expenses arising out of or incurred in connection with disputes between
or among ANY PARTIES to any of the Loan Documents (collectively,
"INDEMNIFIED LIABILITIES"); PROVIDED, that no such Credit Party shall be
liable for any indemnification to an Indemnified Person to the extent
that any such suit, action, proceeding, claim, damage, loss, liability or
expense results solely from that Indemnified Person's gross negligence
or willful misconduct, as finally determined by a court of competent
jurisdiction. NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO
ANY OTHER PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR
THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS
DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY
OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT
HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN DOCUMENT
OR AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER OR
THEREUNDER.
(b)To induce Lenders to provide the LIBOR Rate option on the
terms provided herein, if (i) any LIBOR Loans are repaid in whole or in
part prior to the last day of any applicable LIBOR Period (whether that
repayment is made pursuant to any provision of this Agreement or any
other Loan Document or is the result of acceleration, by operation of law
or otherwise); (ii) Borrowers shall default in payment when due of the
principal amount of or interest on any LIBOR Loan; (iii) Borrowers shall
default in making any borrowing of, conversion into or continuation of
LIBOR Loans after Borrowers have given notice requesting the same in
accordance herewith; or (iv) Borrowers shall fail to make any prepayment
of a LIBOR Loan after Borrowers have given a notice thereof in accordance
herewith, Borrowers shall indemnify and hold harmless each Lender from
and against all losses, costs and expenses resulting from or arising from
any of the foregoing. Such indemnification shall include any loss or
expense arising from the reemployment of funds obtained by it or from
fees payable to terminate deposits from which such funds were obtained.
For the purpose of calculating amounts payable to a Lender under this
subsection, each Lender shall be deemed to have actually funded its
relevant LIBOR Loan through the purchase of a deposit bearing interest at
the LIBOR Rate in an amount equal to the amount of that LIBOR Loan and
having a maturity comparable to the relevant Interest Period; provided,
however, that each Lender may fund each of its LIBOR Loans in any manner
it sees fit, and the foregoing assumption shall be utilized only for the
calculation of amounts payable under this subsection. This covenant
shall survive the termination of this Agreement and the payment of the
Notes and all other amounts payable hereunder. As promptly as
practicable under the circumstances, each Lender shall provide Borrower
Representative with its written calculation of all amounts payable
pursuant to this SECTION 1.13(b), and such calculation shall be binding
on the parties hereto unless Borrower Representative shall object in
writing within ten (10) Business Days of receipt thereof, specifying the
basis for such objection in detail.
1.14 ACCESS. Each Credit Party which is a party hereto shall,
during normal business hours and without undue disruption of such Credit
Party's business, from time to time upon two (2) Business Days' prior
notice as frequently as Administrative Agent reasonably determines to be
appropriate: (a) provide Administrative Agent and any of its officers,
employees and agents access to its properties, facilities, advisors and
employees (including officers) of each Credit Party and to the
Collateral, (b) permit Administrative Agent, and any of its officers,
employees and agents, to inspect, audit and make extracts from any Credit
Party's books and records, and (c) permit Administrative Agent, and its
officers, employees and agents, to inspect, review, evaluate and make
test verifications and counts of the Accounts, Inventory and other
Collateral of any Credit Party. If a Default or Event of Default shall
have occurred and be continuing, each such Credit Party shall provide
such access to Administrative Agent and to each Lender at all times and
without advance notice. Furthermore, so long as any Event of Default
shall have occurred and be continuing, each Borrower shall provide
Administrative Agent with access to its suppliers and customers. Each
Credit Party shall make available to Administrative Agent and its
counsel, as quickly as is possible under the circumstances, originals or
copies of all books and records which Administrative Agent may reasonably
request. Each Credit Party shall deliver any document or instrument
necessary for Administrative Agent, as it may from time to time request,
to obtain records from any service bureau or other Person which maintains
records for such Credit Party. Administrative Agent will give Lenders at
least ten (10) days' prior written notice of regularly scheduled audits.
Representatives of other Lenders may accompany Administrative Agent's
representatives on regularly scheduled audits at no charge to Borrowers.
1.15 TAXES.
(a)Any and all payments by Borrowers hereunder or under the
Notes shall be made, in accordance with this SECTION 1.15, free and clear
of and without deduction for any and all present or future Taxes. If
Borrowers shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder or under the Notes, (i) the sum payable
shall be increased as much as shall be necessary so that after making all
required deductions (including deductions applicable to additional sums
payable under this SECTION 1.15) Administrative Agent or Lenders, as
applicable, receive an amount equal to the sum they would have received
had no such deductions been made, (ii) Borrowers shall make such
deductions, and (iii) Borrowers shall pay the full amount deducted to the
relevant taxing or other authority in accordance with applicable law.
Within thirty (30) days after the date of any payment of Taxes, Borrower
Representative shall furnish to Administrative Agent the original or a
certified copy of a receipt evidencing payment thereof.
(b)Each Credit Party that is a signatory hereto shall indemnify
and, within ten (10) days of demand therefor, pay Administrative Agent
and each Lender for the full amount of Taxes (including any Taxes imposed
by any jurisdiction on amounts payable under this SECTION 1.15) paid by
Administrative Agent or such Lender, as appropriate, and any liability
(including penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not such Taxes were correctly or legally
asserted.
(c)FOREIGN LENDERS. Each Lender organized under the laws of a
jurisdiction outside the United States (a "FOREIGN LENDER") as to which
payments to be made under this Agreement or under the Notes are exempt
from United States withholding tax under an applicable statute or tax
treaty shall provide to Borrower Representative and Administrative Agent
a properly completed and executed IRS Form 4224 or Form 1001 or other
applicable form, certificate or document prescribed by the IRS or the
United States certifying as to such Foreign Lender's entitlement to such
exemption (a "CERTIFICATE OF EXEMPTION"). Any foreign Person that seeks
to become a Lender under this Agreement shall provide a Certificate of
Exemption to Borrower Representative and Administrative Agent prior to
becoming a Lender hereunder. No foreign Person may become a Lender
hereunder if such Person is unable to deliver a Certificate of Exemption.
1.16 CAPITAL ADEQUACY; INCREASED COSTS; ILLEGALITY.
(a)If any Lender shall determine that the adoption after the
date hereof of any law, treaty, governmental (or quasi-governmental)
rule, regulation, guideline or order regarding capital adequacy, reserve
requirements or similar requirements or compliance by any Lender with any
request or directive imposed after the date hereof regarding capital
adequacy, reserve requirements or similar requirements (whether or not
having the force of law) from any central bank or other Governmental
Authority increases or would have the effect of increasing the amount of
capital, reserves or other funds required to be maintained by such Lender
and thereby reducing the rate of return on such Lender's capital as a
consequence of its obligations hereunder, then Borrowers shall from time
to time upon demand by such Lender (with a copy of such demand to
Administrative Agent) pay to Administrative Agent, for the account of
such Lender, additional amounts sufficient to compensate such Lender for
such reduction. A certificate as to the amount of that reduction and
showing the basis of the computation thereof submitted by such Lender to
Borrower Representative and to Administrative Agent shall, absent
manifest error, be final, conclusive and binding for all purposes.
(b)If, due to either (i) the introduction of or any change in
any law or regulation (or any change in the interpretation thereof) or
(ii) the compliance with any guideline or request imposed after the date
hereof from any central bank or other Governmental Authority (whether or
not having the force of law), there shall be any increase in the cost to
any Lender of agreeing to make or making, funding or maintaining any
Loan, then Borrowers shall from time to time, upon demand by such Lender
(with a copy of such demand to Administrative Agent), pay to
Administrative Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such increased cost. A
certificate as to the amount of such increased cost, submitted to
Borrower Representative and to Administrative Agent by such Lender, shall
be conclusive and binding on Borrowers for all purposes, absent manifest
error. Each Lender agrees that, as promptly as practicable after it
becomes aware of any circumstances referred to above which would result
in any such increased cost, the affected Lender shall, to the extent not
inconsistent with such Lender's internal policies of general application,
use reasonable commercial efforts to minimize costs and expenses incurred
by it and payable to it by borrowers pursuant to this SECTION 1.16(b).
(c)Notwithstanding anything to the contrary contained herein,
if the introduction of or any change in any law or regulation (or any
change in the interpretation thereof) shall make it unlawful, or any
central bank or other Governmental Authority shall assert that it is
unlawful, for any Lender to agree to make or to make or to continue to
fund or maintain any LIBOR Loan, then, unless that Lender is able to make
or to continue to fund or to maintain such LIBOR Loan at another branch
or office of that Lender without, in that Lender's opinion, adversely
affecting it or its Loans or the income obtained therefrom, on notice
thereof and demand therefor by such Lender to Borrower Representative
through Administrative Agent, (i) the obligation of such Lender to agree
to make or to make or to continue to fund or maintain LIBOR Loans shall
terminate and (ii) Borrowers shall forthwith prepay in full all
outstanding LIBOR Loans owing to such Lender, together with interest
accrued thereon, UNLESS Borrowers, within five (5) Business Days after
the delivery of such notice and demand, convert all such Loans into Loans
bearing interest based on the Index Rate.
(d)REPLACEMENT OF LENDER IN RESPECT OF INCREASED COSTS. After
receipt by Borrower Representative of written notice and demand from any
Lender (an "AFFECTED LENDER") for payment of additional amounts or
increased costs as provided in SECTION 1.15(a), 1.16(a) or 1.16(b),
Borrowers may, at their option, notify Administrative Agent and such
Affected Lender of their intention to replace the Affected Lender. So
long as no Default or Event of Default shall have occurred and be
continuing, Borrowers, with the consent of Administrative Agent, may
obtain, at Borrowers' expense, a replacement Lender ("REPLACEMENT
LENDER") for the Affected Lender, which Replacement Lender must be
reasonably satisfactory to Administrative Agent. If Borrowers obtain a
Replacement Lender, the Affected Lender must sell and assign its Loans
and Commitments to such Replacement Lender for an amount equal to the
principal balance of all Loans held by the Affected Lender and all
accrued interest and Fees with respect thereto through the date of such
sale, PROVIDED that Borrowers shall have reimbursed such Affected Lender
for the additional amounts or increased costs that it is entitled to
receive under this Agreement through the date of such sale and
assignment.
(Notwithstanding the foregoing, Borrowers shall not have the right to
obtain a Replacement Lender if the Affected Lender rescinds its demand
for increased costs or additional amounts within fifteen (15) days
following its receipt of Borrowers' notice of intention to replace such
Affected Lender.
1.17 JOINT AND SEVERAL OBLIGATION; SINGLE LOAN.All Obligations
of Borrowers hereunder shall be joint and several, and all Loans to
Borrowers and all of the other Obligations of Borrowers arising under
this Agreement and the other Loan Documents shall constitute one general
obligation of Borrowers secured, until the Termination Date, by all of
their Collateral.
2. CONDITIONS PRECEDENT
2.1 CONDITIONS TO THE INITIAL LOANS.
No Lender shall be obligated to make any Loan or incur any
Letter of Credit Obligations on or after the Closing Date, or to take,
fulfill, or perform any other action hereunder, until the following
conditions have been satisfied or provided for in a manner satisfactory
to Administrative Agent, or waived in writing by Administrative Agent and
Lenders:
(a)CREDIT AGREEMENT; LOAN DOCUMENTS. This Agreement or
counterparts hereof shall have been duly executed by, and delivered to,
each Credit Party, Administrative Agent and Lenders; and Administrative
Agent shall have received such documents, instruments, agreements and
legal opinions as Administrative Agent shall reasonably request in
connection with the transactions contemplated by this Agreement and the
other Loan Documents, including all those listed on the Closing Checklist
attached hereto as ANNEX D, each in form and substance reasonably
satisfactory to Administrative Agent.
(b)REPAYMENT OF PRIOR LENDER OBLIGATIONS; SATISFACTION OF
OUTSTANDING L/CS. (i) Administrative Agent shall have received a fully
executed original of a pay-off letter satisfactory to Administrative
Agent confirming that all of the Prior Lender Obligations will be repaid
in full from the proceeds of the Term Loans and the initial Revolving
Credit Advance to be made on the Closing Date and the proceeds of the
Related Transactions received by Borrowers on the Closing Date, and all
Liens upon any of the property of Borrowers or any of their Subsidiaries
in favor of any Prior Lender shall be terminated by such Prior Lender
immediately upon such payment; and (ii) all letters of credit issued or
guaranteed by any Prior Lender shall have been cash collateralized,
supported by a guaranty of Administrative Agent or supported by a Letter
of Credit issued pursuant to ANNEX B or deemed issued hereunder as
provided in ANNEX B, as mutually agreed upon by Administrative Agent,
Borrowers and such Prior Lender.
(c)APPROVALS. Administrative Agent shall have received (i)
satisfactory evidence that the Credit Parties have obtained all required
consents and approvals of all Persons including all requisite
Governmental Authorities, to the execution, delivery and performance by
the Credit Parties of this Agreement and the other Loan Documents and the
consummation of the Related Transactions or (ii) an officer's certificate
in form and substance satisfactory to Administrative Agent affirming that
no such consents or approvals are required.
(d)OPENING AVAILABILITY. The Eligible Accounts of Borrowers
supporting the initial Revolving Credit Advance and the initial Letter of
Credit Obligations incurred and the amount of the Reserves to be
established on the Closing Date shall be sufficient in value, as
determined by Administrative Agent, to provide Borrowers with Net
Borrowing Availability, after giving effect to the initial Revolving
Credit Advance, the incurrence of any initial Letter of Credit
Obligations and the consummation of the Related Transactions (on a pro
forma basis, with trade payables being paid currently, and expenses and
liabilities being paid in the ordinary course of business and without
acceleration of sales) of at least $7,500,000.
(e)PAYMENT OF FEES. Borrowers shall have paid the Fees required
to be paid on the Closing Date in the respective amounts specified in
SECTION 1.9 (including the Fees specified in the GE Capital Fee Letter),
and shall have reimbursed Administrative Agent for all reasonable out-of-
pocket costs and expenses of closing presented as of the Closing Date.
(f)CAPITAL STRUCTURE: OTHER INDEBTEDNESS. The capital
structure of each Credit Party and the terms and conditions of all
Indebtedness of each Credit Party shall be acceptable to Administrative
Agent in its sole discretion.
(g)CONSUMMATION OF RELATED TRANSACTIONS. Administrative Agent
shall have received fully executed copies of the Agreement and Plan of
Merger and each of the other Related Transactions Documents, each of
which shall be in form and substance satisfactory to Administrative Agent
and its counsel. The Transaction and the other Related Transactions shall
be simultaneously consummated in accordance with the terms of the
Agreement and Plan of Merger and the other Related Transactions
Documents. Pursuant to the Transaction and the other Related
Transactions, the aggregate fees and closing costs (including those
payable to Agents and Lenders) shall not exceed $9 million. Cardinal
Holdings shall have received cash proceeds of $50,000,000 from an
offering of equity prior to the consummation of the Transaction, on terms
and conditions reasonably acceptable to Administrative Agent. Total
aggregate Indebtedness of Borrowers on the Closing Date, after taking
into account the Loans and the Transaction, shall not exceed $150
million.
2.2 FURTHER CONDITIONS TO EACH LOAN. Except as otherwise
expressly provided herein, no Lender shall be obligated to fund any Loan
(including Contingent Payment Loan) or incur any Letter of Credit
Obligation, if, as of the date thereof:
(a)Any representation or warranty by any Credit Party contained
herein or in any of the other Loan Documents shall be untrue or incorrect
as of such date, except to the extent that such representation or
warranty expressly relates to an earlier date and except for changes
therein expressly permitted or expressly contemplated by this Agreement;
or
(b)Any event or circumstance having a Material Adverse Effect
shall have occurred since the date hereof; or
(c)(i) Any Event of Default shall have occurred and be
continuing or would result after giving effect to any Loan (or the
incurrence of any Letter of Credit Obligations), or (ii) a Default
shall have occurred and be continuing or would result after giving
effect to any Loan (or the incurrence of any Letter of Credit Obligations),
and Administrative Agent or Requisite Revolving Lenders shall have
determined not to make any Loan or incur any Letter of Credit Obligation so
long as that Default is continuing; or
(d)After giving effect to any Advance (or the incurrence of any
Letter of Credit Obligations), the outstanding principal amount of the
Revolving Loan would exceed the lesser of the Borrowing Base and the
Maximum Amount, MINUS, in each case, the then outstanding principal
amount of the Swing Line Loan; or
(e)After giving effect to any Swing Line Advance, the
outstanding principal amount of the Swing Line Loan would exceed
Swing Line Availability. The request and acceptance by any Borrower of
the proceeds of any Loan, the incurrence of any Letter of Credit
Obligations or the conversion or continuation of any Loan into, or as, a LIBOR
Loan, as the case may be, shall be deemed to constitute, as of the date of
suchrequest or acceptance, (i) a representation and warranty by each
Borrower that the conditions in this SECTION 2.2 have been satisfied and (ii) a
reaffirmation by each Borrower of the granting and continuance of
Administrative Agent's Liens, on behalf of itself and Lenders, pursuant
to the Collateral Documents.
3. REPRESENTATIONS AND WARRANTIES
To induce Lenders to make the Loans and to incur Letter of Credit
Obligations, the Credit Parties executing this Agreement, jointly
and severally, make the following representations and warranties to
Administrative Agent and each Lender with respect to all Credit
Parties, each and all of which shall survive the execution and
delivery of this Agreement.
3.1 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each Credit Party
(a) is a corporation or limited liability company duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization; (b) is duly qualified to conduct business and is in good
standing in each other jurisdiction where its ownership or lease of
property or the conduct of its business requires such qualification,
except as could not reasonably be expected to have a Material Adverse
Effect; (c) has the requisite corporate or limited liability company
power and authority and the legal right to own, pledge, mortgage or
otherwise encumber and operate its properties, to lease the property it
operates under lease and to conduct its business as now conducted and
proposed to be conducted; (d) has all licenses, permits, consents or
approvals from or by, and has made all filings with, and has given all
notices to, all Governmental Authorities having jurisdiction, to the
extent required for such ownership, operation and conduct, except as
could not reasonably be expected to have a Material Adverse Effect; (e)
is in compliance with its charter and by-laws (or analogous
organizational documents); and (f) subject to specific representations
set forth herein regarding ERISA, Environmental Laws, tax and other laws,
is in compliance with all applicable provisions of law, except where the
failure to comply, individually or in the aggregate, could not reasonably
be expected to have a Material Adverse Effect.
3.2 EXECUTIVE OFFICES; FEIN. As of the Closing Date, the
current location of each Credit Party's chief executive office and
principal place of business is set forth in DISCLOSURE SCHEDULE (3.2),
and none of such locations have changed within the twelve (12) months
preceding the Closing Date. In addition, DISCLOSURE SCHEDULE (3.2) lists
the federal employer identification number of each Credit Party.
3.3 POWER, AUTHORIZATION, ENFORCEABLE OBLIGATIONS. The
execution, delivery and performance by each Credit Party of the Loan
Documents to which it is a party and the creation of all Liens provided
for therein: (a) are within such Person's corporate or limited liability
company power; (b) have been duly authorized by all necessary or proper
corporate and shareholder action (or limited liability company and member
action); (c) do not contravene any provision of such Person's charter or
bylaws (or analogous organizational documents); (d) do not violate any
law or regulation, or any order or decree of any court or Governmental
Authority; (e) except for obligations to Prior Lenders which are being
paid in full and terminated as part of the Related Transactions, do not
conflict with or result in the breach or termination of, constitute a
default under or accelerate or permit the acceleration of any performance
required by, any indenture, mortgage, deed of trust, lease, agreement or
other instrument to which such Person is a party or by which such Person
or any of its property is bound; (f) do not result in the creation or
imposition of any Lien upon any of the property of such Person other than
those in favor of Administrative Agent, on behalf of itself and Lenders,
pursuant to the Loan Documents or in favor of the Vessel Mortgagee on
behalf of Administrative Agent and the Lenders pursuant to the
Vessel Mortgage; and (g) do not require the consent or approval of any
Governmental Authority or any other Person. On or prior to the
Closing Date, each of the Loan Documents shall have been duly executed
and delivered by each Credit Party thereto and each such Loan
Document shall then constitute a legal, valid and binding obligation of such
Credit Party enforceable against it in accordance with its terms (subject
to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally).
3.4 FINANCIAL STATEMENTS AND PROJECTIONS. Except for the
Projections, all Financial Statements which are referenced below have
been prepared in accordance with GAAP consistently applied throughout the
periods covered (except as disclosed therein and except, with respect to
unaudited Financial Statements, for the absence of footnotes and normal
year-end audit adjustments) and present fairly in all material respects
the financial position of the Persons covered thereby as at the dates
thereof and the results of their operations and cash flows for the
periods then ended.
(a)The following Financial Statements attached hereto as
DISCLOSURE SCHEDULE (3.4(a)) have been delivered on the date hereof:
(i)The audited consolidated and unaudited consolidating
balance sheets at December 31, 1997 and 1998 and the related statements
of income and cash flows (except for unaudited consolidating statements
of cash flows) of Holdings and its Subsidiaries for the Fiscal Years then
ended, certified by KPMG LLP.
(ii)The audited consolidated balance sheets at December 31,
1998 and the related statements of income and cash flows of Cardinal
Holdings and its Subsidiaries for the Fiscal Year than ended, certified
by Ernst & Young LLP.
(iii)The unaudited consolidated and consolidating balance
sheets at March 31, 1999 and the related statements of income and cash
flows of (x) Holdings and its Subsidiaries (except for unaudited
consolidating statements of cash flows) and (y) Cardinal Holdings and its
Subsidiaries, for the Fiscal Quarter then ended.
(b)PRO FORMA. The Pro Forma delivered on the date hereof and
attached hereto as DISCLOSURE SCHEDULE (3.4(b)) was prepared by Borrowers
giving PRO FORMA effect to the Related Transactions, was based on the
unaudited consolidated balance sheets of Holdings and its Subsidiaries
dated March 31, 1999, and was prepared in accordance with GAAP, with only
such adjustments thereto as would be required in accordance with GAAP.
(c)PROJECTIONS. The Projections delivered on the date hereof
and attached hereto as DISCLOSURE SCHEDULE (3.4(c)) have been prepared by
Borrowers in light of the past operations of their businesses, and
reflect projections for the seven-year period beginning on January 1,
1999, on a quarterly basis for 1999 and on an annual basis thereafter.
The Projections are based upon estimates and assumptions stated therein,
all of which Borrowers believe to be reasonable and fair in light of
current conditions and current facts known to Borrowers and, as of the
Closing Date, reflect Borrowers' good faith and reasonable estimates of
the future financial performance of Holdings and its Subsidiaries and of
the other information projected therein for the period set forth therein.
3.5 MATERIAL ADVERSE EFFECT. Between December 31, 1998 and the
Closing Date, (a) no Credit Party has incurred any obligations,
contingent or non-contingent liabilities, liabilities for Charges, long-
term leases or unusual forward or long-term commitments which, alone or
in the aggregate, could reasonably be expected to have a Material Adverse
Effect, (b) no contract, lease or other agreement or instrument has been
entered into by any Credit Party or has become binding upon any Credit
Party's assets and no law or regulation applicable to any Credit Party
has been adopted which has had or could reasonably be expected to have a
Material Adverse Effect, and (c) no Credit Party is in default and to the
best of Borrowers' knowledge no third party is in default under any
material contract, lease or other agreement or instrument, which alone or
in the aggregate could reasonably be expected to have a Material Adverse
Effect. Between December 31, 1998 and the Closing Date no event has
occurred, which alone or together with other events, could reasonably be
expected to have a Material Adverse Effect.
3.6 OWNERSHIP OF PROPERTY; LIENS.
(a)AS OF THE CLOSING DATE, THE REAL ESTATE ("REAL ESTATE")
listed on DISCLOSURE SCHEDULE (3.6)(a) constitutes all of the real
property owned, leased or subleased by any Credit Party. Each Credit
Party owns good and marketable fee simple title to all of its owned Real
Estate, and valid leasehold interests in all of its leased Real Estate,
all as described on DISCLOSURE SCHEDULE (3.6)(a), and copies of all such
leases or a summary of terms thereof have been delivered to
Administrative Agent. DISCLOSURE SCHEDULE (3.6)(a) further describes any
Real Estate with respect to which any Credit Party is a lessor, sublessor
or assignor as of the Closing Date. Each Credit Party also has good and
marketable title to, or valid leasehold interests in, all of its personal
properties and assets. As of the Closing Date, after giving effect to
the Related Transactions, none of the properties and assets of any Credit
Party are subject to any Liens other than Permitted Encumbrances, and
there are no facts, circumstances or conditions known to any Credit Party
that may reasonably be expected to result in any Liens (including Liens
arising under Environmental Laws) other than Permitted Encumbrances.
Each Credit Party has received all deeds, assignments, waivers,
estoppels, consents, non-disturbance and recognition or similar
agreements, bills of sale and other documents, and has duly effected all
recordings, filings and other actions necessary to establish, protect and
perfect such Credit Party's right, title and interest in and to all such
Real Estate and other properties and assets, except where the failure to
do so could not reasonably be expected to have a Material Adverse Effect.
As of the Closing Date, DISCLOSURE SCHEDULE (3.6)(a) also describes any
purchase options, rights of first refusal or other similar contractual
rights pertaining to any Real Estate. As of the Closing Date, no portion
of any Credit Party's Real Estate has suffered any material damage by
fire or other casualty loss which has not heretofore been repaired and
restored in all material respects to its original condition or otherwise
remedied. As of the Closing Date, all material permits required to have
been issued or appropriate to enable the Real Estate to be lawfully
occupied and used for all of the purposes for which they are currently
occupied and used have been lawfully issued and are in full force and
effect.
(b)As of the Closing Date, the Vessels listed by name and
official number in SCHEDULE 3.6(b) constitute all of the Vessels owned or
operated by Borrowers. Each Vessel is owned by a Borrower, is duly
registered under the laws of the United States, is eligible to engage in
the coastwide trade and no Vessel has been the subject (including by
virtue of her trade or the actions of her owner at any time) of such
facts or circumstances as would cause her to be declared ineligible for
the coastwide trade of the United States by the U.S. Coast Guard, the
Custom Service or the United States Maritime Association. At all
relevant times, each Borrower that operates a Vessel has been "a citizen
of the United States" within the meaning of Section 2 of the Shipping Act
of 1916, as amended, for the purpose of operating its Vessels in the
coastwide trade of the United States. Each Vessel is duly documented (to
the extent required for its current use) in the name of a Borrower with
the U.S. Coast Guard and each of the Vessels has (to the extent required
for its current use) current certificates of inspection and documentation
(with coastwide trade endorsements) in effect with the U.S. Coast Guard
and all other certificates and documentation required by any Governmental
Authority to operate offshore in the U.S. Gulf of Mexico, in each case
free of reportable exceptions or notations of record which would affect
her class, except for such which may be postponed until the Vessel's next
scheduled or other future drydocking. Each Vessel and engine and other
major component thereof is in a good state of repair and operating
condition, ordinary wear and tear excepted, which is adequate to enable
such Vessel to perform the functions for the related Borrower for which
it has been historically used and operated in the ordinary course of
business, in each case except as could not reasonably be expected to have
a Material Adverse Effect.
3.7 LABOR MATTERS. As of the Closing Date (a) no strikes or
other material labor disputes against any Credit Party are pending or, to
any Credit Party's knowledge, threatened; (b) hours worked by and payment
made to employees of each Credit Party comply in all material respects
with the Fair Labor Standards Act and each other federal, state, local or
foreign law applicable to such matter; (c) all payments due from any
Credit Party for employee health and welfare insurance have been paid or
accrued as a liability on the books of such Credit Party; (d) except as
set forth in DISCLOSURE SCHEDULE (3.7), no Credit Party is a party to or
bound by any collective bargaining agreement, management agreement,
consulting agreement or any employment agreement (and true and complete
copies of any agreements described on DISCLOSURE SCHEDULE (3.7) have been
delivered to Administrative Agent); (e) except as set forth in DISCLOSURE
SCHEDULE (3.7), to any Credit Party's knowledge, there is no organizing
activity involving any Credit Party pending or threatened by any labor
union or group of employees; (f) there are no representation proceedings
pending or, to any Credit Party's knowledge, threatened with the National
Labor Relations Board, and no labor organization or group of employees of
any Credit Party has made a pending demand for recognition; and (g)
except as set forth in DISCLOSURE SCHEDULE (3.7), there are no complaints
or charges against any Credit Party pending or, to the knowledge of any
Credit Party, threatened to be filed with any Governmental Authority or
arbitrator based on, arising out of, in connection with, or otherwise
relating to the employment or termination of employment by any Credit
Party of any individual.
3.8 VENTURES, SUBSIDIARIES AND AFFILIATES; OUTSTANDING STOCK AND
INDEBTEDNESS. Except as set forth in DISCLOSURE SCHEDULE (3.8), as of
the Closing Date, no Credit Party has any Subsidiaries, is engaged in any
joint venture or partnership with any other Person, or is an Affiliate of
any other Person. As of the Closing Date, all of the issued and
outstanding Stock of each Credit Party is owned by the stockholders (or
members) and in the amounts set forth on DISCLOSURE SCHEDULE (3.8)
(except that for Holdings, only those stockholders that own five percent
(5%) or more of Holdings are listed on such Disclosure Schedule) and
except as set forth therein there are no outstanding rights to purchase,
options, warrants or similar rights or agreements pursuant to which any
Credit Party (other than Holdings) may be required to issue, sell,
repurchase or redeem any of its Stock or other equity securities or any
Stock or other equity securities of its Subsidiaries. All outstanding
Indebtedness of each Credit Party as of the Closing Date is described in
Section 6.3 (including DISCLOSURE SCHEDULE (6.3)).
3.9 GOVERNMENT REGULATION. No Credit Party is an "investment
company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in
the Investment Company Act of 1940 as amended. No Credit Party is
subject to regulation under the Public Utility Holding Company Act of
1935, the Federal Power Act, or any other federal or state statute that
restricts or limits its ability to incur Indebtedness or to perform its
obligations hereunder. The borrowing of the Loans by Borrowers, the
incurrence of the Letter of Credit Obligations on behalf of Borrowers,
the application of the proceeds thereof and repayment thereof and the
consummation of the Related Transactions by the Credit Parties will not
violate any provision of any such statute or any rule, regulation or
order issued by the Securities and Exchange Commission and applicable to
any Credit Party.
3.10 MARGIN REGULATIONS. No Credit Party is engaged, nor will
it engage, principally or as one of its important activities, in the
business of extending credit for the purpose of "purchasing" or
"carrying" any "margin security" as such terms are defined in Regulation
U or G of the Federal Reserve Board as now and from time to time
hereafter in effect (such securities being referred to herein as "MARGIN
STOCK"). None of the proceeds of the Loans or other extensions of credit
under this Agreement will be used, directly or indirectly, for the
purpose of purchasing or carrying any Margin Stock, for the purpose of
reducing or retiring any Indebtedness which was originally incurred to
purchase or carry any Margin Stock or for any other purpose which might
cause any of the Loans or other extensions of credit under this Agreement
to be considered a "purpose credit" within the meaning of Regulation T, U
or X of the Federal Reserve Board. No Credit Party will take any action
which might cause any Loan Document to violate any regulation of the
Federal Reserve Board.
3.11 TAXES. All tax returns, reports and statements, including
information returns, required by any Governmental Authority to be filed
by any Credit Party have been filed with the appropriate Governmental
Authority and all Charges have been paid prior to the date on which any
fine, penalty, interest or late charge may be added thereto for
nonpayment thereof (or any such fine, penalty, interest, late charge or
loss has been paid), excluding Charges or other amounts being contested
in accordance with SECTION 5.2(b), except those which could not
reasonably be expected to have a Material Adverse Effect. Proper and
accurate amounts have been withheld by each Credit Party from its
respective employees for all periods in full and complete compliance with
all applicable federal, state, local and foreign law and such
withholdings have been timely paid to the respective Governmental
Authorities, except those which could not reasonably be expected to have
a Material Adverse Effect. DISCLOSURE SCHEDULE (3.11) sets forth as of
the Closing Date those taxable years for which any Credit Party's tax
returns are currently being audited by the IRS or any other applicable
Governmental Authority and any assessments or threatened assessments in
connection with such audit, or otherwise currently outstanding. Except
as described on DISCLOSURE SCHEDULE (3.11) or as otherwise disclosed to
Administrative Agent in writing, no Credit Party has executed or filed
with the IRS or any other Governmental Authority any agreement or other
document extending, or having the effect of extending, the period for
assessment or collection of any Charges. None of the Credit Parties and
their respective predecessors are liable for any Charges: (a) under any
agreement (including any tax sharing agreements) or (b) to each Credit
Party's knowledge, as a transferee. As of the Closing Date, no Credit
Party has agreed or been requested to make any adjustment under IRC
Section 481(a), by reason of a change in accounting method or otherwise,
which would have a Material Adverse Effect.
3.12 ERISA.
(a)EXCEPT AS LISTED AND SEPARATELY IDENTIFIED ON DISCLOSURE
SCHEDULE (3.12) or as otherwise disclosed to Administrative Agent in
writing, there are no Title IV Plans, Multiemployer Plans, ESOPs and
Retiree Welfare Plans. Copies of all such listed or disclosed Plans,
together with a copy of the latest form 5500 for each such Plan, will be
made available to Administrative Agent upon written request by
Administrative Agent. Except as set forth in DISCLOSURE SCHEDULE (3.12),
each Qualified Plan has received a determination letter from the IRS to
qualify under Section 401 of the IRC, and the trusts created thereunder
have been determined to be exempt from tax under the provisions of
Section 501 of the IRC, and nothing has occurred which would cause the
loss of such qualification or tax-exempt status. Each Plan is in
compliance with the applicable provisions of ERISA and the IRC, including
the filing of reports required under the IRC or ERISA, except to the
extent such non-compliance would not reasonably be expected to result in
a liability of more than $1,000,000. No Credit Party or ERISA Affiliate
has failed to make any contribution or pay any amount due as required by
either Section 412 of the IRC or Section 302 of ERISA or the terms of any
such Plan, except to the extent such failure would not reasonably be
expected to result in a liability of more than $1,000,000. No Credit
Party or ERISA Affiliate has engaged in a prohibited transaction, as
defined in Section 4975 of the IRC, in connection with any Plan, which
would subject any Credit Party to a material tax on prohibited
transactions imposed by Section 4975 of the IRC which would reasonably be
expected to result in a liability of more than $1,000,000.
(b)Except as set forth in DISCLOSURE SCHEDULE (3.12): (i) no
Title IV Plan has any Unfunded Pension Liability; (ii) no ERISA Event or
event described in Section 4062(e) of ERISA with respect to any Title IV
Plan has occurred or is reasonably expected to occur; (iii) there are no
pending, or to the knowledge of any Credit Party, threatened claims
(other than claims for benefits in the normal course), sanctions, actions
or lawsuits, asserted or instituted against any Plan or any Person as
fiduciary or sponsor of any Plan; (iv) no Credit Party or ERISA Affiliate
has incurred or reasonably expects to incur any liability as a result of
a complete or partial withdrawal from a Multiemployer Plan; (v) within
the last five years no Title IV Plan with Unfunded Pension Liabilities
has been transferred outside of the "controlled group" (within the
meaning of Section 4001(a)(14) of ERISA) of any Credit Party or ERISA
Affiliate; and (vi) no liability under any Title IV Plan has been
satisfied with the purchase of a contract from an insurance company that
is not rated AAA by the Standard & Poor's Corporation or the equivalent
by another nationally recognized rating agency; PROVIDED, HOWEVER, that
there shall not be a misrepresentation to the extent that any of the
liabilities in (i) through (vi) above would not reasonably be expected,
in the aggregate, to result in liability of more than $1,000,000.
3.13 NO LITIGATION. No action, claim, lawsuit, demand,
investigation or proceeding is now pending or, to the knowledge of any
Credit Party, threatened against any Credit Party, before any
Governmental Authority, or before any arbitrator or panel of arbitrators
(collectively, "LITIGATION"), (a) which challenges any Credit Party's
right or power to enter into or perform any of its obligations under the
Loan Documents to which it is a party, or the validity or enforceability
of any Loan Document or any action taken thereunder, or (b) which has a
reasonable risk of being determined adversely to any Credit Party and
which, if so determined, could reasonably be expected to have a Material
Adverse Effect. Except as set forth on DISCLOSURE SCHEDULE (3.13), as of
the Closing Date there is no Litigation pending or threatened which seeks
damages in excess of $500,000 or injunctive relief or alleges criminal
misconduct of any Credit Party.
3.14 BROKERS. No broker or finder acting on behalf of any
Credit Party brought about the obtaining, making or closing of the Loans
or the Related Transactions, and no Credit Party has any obligation to
any Person in respect of any finder's or brokerage fees in connection
therewith.
3.15 INTELLECTUAL PROPERTY. As of the Closing Date, each Credit
Party owns or has rights to use all Intellectual Property necessary to
continue to conduct its business as now or heretofore conducted by it or
proposed to be conducted by it, and each such Patent, Trademark,
Copyright and License is listed, together with application or
registration numbers, as applicable, in DISCLOSURE SCHEDULE (3.15)
hereto. Each Credit Party conducts its business and affairs without
infringement of or interference with any Intellectual Property of any
other Person, except as which could not reasonably be expected to have a
Material Adverse Effect.
3.16 FULL DISCLOSURE. No information contained in this
Agreement, any of the other Loan Documents, any Projections, Financial
Statements or Collateral Reports or other reports from time to time
delivered hereunder or any written statement furnished by or on behalf of
any Credit Party to Administrative Agent or any Lender pursuant to the
terms of this Agreement contains any untrue statement of a material fact
or omits or will omit to state a material fact necessary to make the
statements contained herein or therein not misleading in light of the
circumstances under which they were made. The Liens granted to
Administrative Agent, on behalf of itself and Lenders, and to the Vessel
Mortgagee, on behalf of Administrative Agent and the Lenders, pursuant to
the Collateral Documents will at all times be fully perfected first
priority Liens in and to the Collateral described therein (except for
motor vehicles), subject, as to priority, only to Permitted Encumbrances
with respect to the Collateral other than Accounts.
3.17 ENVIRONMENTAL MATTERS.
(a)Except as set forth in DISCLOSURE SCHEDULE (3.17), as of the
Closing Date: (i) the Real Estate is free of contamination from any
Hazardous Material except for such contamination that would not
materially adversely impact the value or marketability of such Real
Estate and which would not result in Environmental Liabilities which
could reasonably be expected to exceed $200,000; (ii) no Credit Party has
caused or suffered to occur any Release of Hazardous Materials on, at,
in, under, above, to, from or about any of its Real Estate which has not
been remedied in accordance with applicable Environmental Law; (iii) the
Credit Parties are and have been in compliance with all Environmental
Laws, except for such noncompliance which would not result in
Environmental Liabilities which could reasonably be expected to exceed
$200,000; (iv) the Credit Parties have obtained, and are in compliance
with, all Environmental Permits required by Environmental Laws for the
operations of their respective businesses as presently conducted or as
proposed to be conducted, except where the failure to so obtain or comply
with such Environmental Permits would not result in Environmental
Liabilities which could reasonably be expected to exceed $200,000, and
all such Environmental Permits are valid, uncontested and in good
standing; (v) no Credit Party is involved in operations or knows of any
facts, circumstances or conditions, including any Releases of Hazardous
Materials, that are likely to result in any Environmental Liabilities of
such Credit Party which could reasonably be expected to exceed $200,000,
and no Credit Party has permitted any current or former tenant or
occupant of the Real Estate to engage in any such operations; (vi) the
estimated cost of compliance by the Credit Parties with Environmental
Laws and Environmental Permits for each of the two Fiscal Years following
the Closing Date is less than $100,000; (vii) there is no pending or, to
the knowledge of the Credit Parties, threatened Litigation against any
Credit Party arising under or related to any Environmental Laws,
Environmental Permits or Hazardous Material which seeks damages,
penalties, fines, costs or expenses from any Credit Party in excess of
$200,000 or injunctive relief, or which alleges criminal misconduct by
any Credit Party; (viii) no notice has been received by any Credit Party
identifying it as a "potentially responsible party" or requesting
information under CERCLA or analogous state statutes, and to the
knowledge of the Credit Parties, there are no facts, circumstances or
conditions that may result in any Credit Party being identified as a
"potentially responsible party" under CERCLA or analogous state statutes;
and (ix) the Credit Parties have provided to Administrative Agent copies
of all existing environmental reports, reviews and audits and all written
information pertaining to actual or potential Environmental Liabilities,
in each case relating to any Credit Party.
(b)Each Credit Party hereby acknowledges and agrees that
Administrative Agent (i) is not now, and has not ever been, in control
of any of the Real Estate or any Credit Party's affairs, and (ii) does not
have the capacity through the provisions of the Loan Documents or
otherwise to influence any Credit Party's conduct with respect to
the ownership, operation or management of any of its Real Estate or
compliance with Environmental Laws or Environmental Permits.
3.18 INSURANCE. DISCLOSURE SCHEDULE (3.18) lists all insurance
policies of any nature maintained, as of the Closing Date, for current
occurrences by each Credit Party, as well as a summary of the terms of
each such policy.
3.19 DEPOSIT AND DISBURSEMENT ACCOUNTS. DISCLOSURE SCHEDULE
(3.19) lists all banks and other financial institutions at which any
Credit Party maintains deposits and/or other accounts as of the Closing
Date, including any Disbursement Accounts, and such Schedule correctly
identifies the name, address and telephone number of each depository, the
name in which the account is held, a description of the purpose of the
account, and the complete account number.
3.20 GOVERNMENT CONTRACTS. Except as set forth in DISCLOSURE
SCHEDULE (3.20), as of the Closing Date, no Credit Party is a party to
any contract or agreement with any Governmental Authority and no Credit
Party's Accounts are subject to the Federal Assignment of Claims Act, as
amended (31 U.S.C. Section 3727) or any similar state or local law.
3.21 CUSTOMER AND TRADE RELATIONS. As of the Closing Date,
there exists no actual or, to the knowledge of any Credit Party,
threatened termination or cancellation of: (a) the business relationship
of any Credit Party with any customer or group of customers whose
purchases or other activities during the preceding twelve (12)
months caused them to be ranked among the ten largest customers of such
Credit Party; or (b) the business relationship of any Credit Party with any
supplier material to its operations.
3.22 AGREEMENTS AND OTHER DOCUMENTS. As of the Closing Date,
each Credit Party has made available to Administrative Agent or its
counsel, on behalf of Lenders, accurate and complete copies (or
summaries) of all of the following agreements or documents to which it is
subject and each of which are listed on DISCLOSURE SCHEDULE (3.22): (a)
supply agreements and purchase agreements not terminable by such Credit
Party within sixty (60) days following written notice issued by such
Credit Party and involving transactions in excess of $1,000,000 per
annum; (b) any lease of Equipment having a remaining term of one year or
longer and requiring aggregate rental and other payments in excess of
$500,000 per annum; (c) licenses and permits held by the Credit Parties,
the absence of which could be reasonably likely to have a Material
Adverse Effect; (d) instruments or documents evidencing Indebtedness of
such Credit Party and any security interest granted by such Credit Party
with respect thereto; and (e) instruments and agreements evidencing the
issuance of any equity securities, warrants, rights or options to
purchase equity securities of such Credit Party.
3.23 SOLVENCY. Both before and after giving effect to (a) the
Loans and Letter of Credit Obligations to be made or extended on the
Closing Date or such other date as Loans and Letter of Credit Obligations
requested hereunder are made or extended, (b) the disbursement of the
proceeds of such Loans pursuant to the instructions of Borrowers, (c) the
Transaction, the Refinancing and the consummation of the other Related
Transactions and (d) the payment and accrual of all transaction costs in
connection with the foregoing, each Credit Party is Solvent.
3.24 AGREEMENT AND PLAN OF MERGER. As of the Closing Date,
Borrower Representative has delivered to Administrative Agent a complete
and correct copy of the Agreement and Plan of Merger (including, to the
extent requested by Administrative Agent, all schedules, exhibits,
amendments, supplements, modifications, assignments and all other
documents delivered pursuant thereto or in connection therewith). As of
the Closing Date, no Credit Party and no other Person party thereto is in
default in the performance or compliance with any provisions thereof.
The Agreement and Plan of Merger complies with, and the Transaction has
been consummated in accordance with, all applicable laws. The Agreement
and Plan of Merger is in full force and effect as of the Closing Date,
and has not been terminated, rescinded or withdrawn. All requisite
approvals by Governmental Authorities having jurisdiction over any Credit
Party and other Persons referenced therein, with respect to the
transactions contemplated by the Agreement and Plan of Merger, have been
obtained, and no such approvals impose any conditions to the consummation
of the transactions contemplated by the Agreement and Plan of Merger or
to the conduct by any Credit Party of its business thereafter. To the
best of each Credit Party's knowledge, as of the Closing Date, none of
the representations or warranties made by any Credit Party in the
Agreement and Plan of Merger contain any untrue statement of a material
fact or omit any fact necessary to make the statements therein not
misleading. As of the Closing Date, except as could not reasonably be
expected to have a Material Adverse Effect, each of the representations
and warranties given by each applicable Credit Party in the Agreement and
Plan of Merger is true and correct in all material respects.
3.25 YEAR 2000. Any reprogramming required to permit the proper
functioning, in and following the year 2000, of (i) Borrowers' and their
Subsidiaries' computer systems and (ii) equipment containing embedded
microchips (including systems and equipment supplied by others) and the
testing of all such systems and equipment, as so reprogrammed, are
expected by Borrowers to be completed in all material respects by August
31, 1999. The cost to Borrowers of such reprogramming and testing and of
the reasonably foreseeable consequences of year 2000 to Borrowers
(including, without limitation, reprogramming errors) will not result in
a Default, an Event of Default or a Material Adverse Effect. Except for
such of the reprogramming referred to in the preceding sentence as may be
necessary, the computer and management information systems of Borrowers
and their Subsidiaries are and, with ordinary course upgrading and
maintenance, will continue for the term of the Agreement to be able to
interpret dates after December 31, 1999 except to the extent the failure
to interpret such dates will not have a Material Adverse Effect.
4. FINANCIAL STATEMENTS AND INFORMATION
4.1 REPORTS AND NOTICES.
(a)Each Credit Party executing this Agreement hereby agrees
that from and after the Closing Date and until the Termination Date, it
shall deliver to Administrative Agent and/or Lenders, as required, the
Financial Statements, notices, Projections and other information at the
times, to the Persons and in the manner set forth in ANNEX E.
(b)Each Credit Party executing this Agreement hereby agrees
that from and after the Closing Date and until the Termination
Date, it shall deliver to Administrative Agent and/or Lenders, as required,
the various Collateral Reports (including Borrowing Base Certificates
in the form of Exhibit 4.1(b)) at the times, to the Persons and in the manner
set forth in ANNEX F.
4.2 COMMUNICATION WITH ACCOUNTANTS. Each Credit Party executing
this Agreement authorizes Administrative Agent and, so long as an Event
of Default shall have occurred and be continuing or upon not less than
two (2) Business Days' prior notice to the Borrower Representative if no
Event of Default has occurred or is continuing, each Lender, to
communicate directly with the independent certified public accountants
(including KPMG LLP) of any Credit Party (provided that, if the related
Credit Party so requests and no Event of Default has occurred, it may
participate in any such communication), and authorizes and shall instruct
those accountants and advisors to disclose and make available to
Administrative Agent and each Lender any and all Financial Statements and
other supporting financial documents, schedules and information relating
to any Credit Party (including copies of any issued management letters)
with respect to the business, financial condition and other affairs of
any Credit Party.
5. AFFIRMATIVE COVENANTS
Each Credit Party executing this Credit Agreement jointly and
severally agrees as to all Credit Parties that from and after the date hereof
and until the Termination Date:
5.1 MAINTENANCE OF EXISTENCE AND CONDUCT OF BUSINESS. Each
Credit Party shall: (a) do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate or limited
liability company existence and its rights and franchises; (b)
continue to conduct its business substantially as now conducted or as
otherwise permitted hereunder; (c) at all times maintain, preserve and protect
all of its assets and properties used or useful in the conduct of its
business, and keep the same in good repair, working order and
condition in all material respects (taking into consideration ordinary wear
and tear) and from time to time make, or cause to be made, all necessary
or appropriate repairs, replacements and improvements thereto
consistent with industry practices; and (d) transact business only in such
corporate (or limited liability company) and trade names as are set forth in
DISCLOSURE SCHEDULE 5.1 or such other names as to which Administrative
Agent has received advance notice pursuant to the provisions of the
Security Agreement; PROVIDED that nothing contained in this SECTION 5.1
shall prohibit any Credit Party from being dissolved, making dispositions
or taking any other action, in each case in accordance with other express
provisions of the Agreement.
5.2 PAYMENT OF OBLIGATIONS.
(a)SUBJECT TO SECTION 5.2(b), each Credit Party shall pay and
discharge or cause to be paid and discharged promptly all Charges payable
by it, including (A) Charges imposed upon it, its income and profits, or
any of its property (real, personal or mixed) and all Charges with
respect to tax, social security and unemployment withholding with respect
to its employees, and (B) lawful claims for labor, materials, supplies
and services or otherwise, before any thereof shall become past due,
except where failure to do so would not have a Material Adverse Effect.
(b)Each Credit Party may in good faith contest, by appropriate
proceedings, the validity or amount of any Charges or claims described in
SECTION 5.2(a); PROVIDED, that (i) adequate reserves with respect to such
contest are maintained on the books of such Credit Party, in accordance
with GAAP, (ii) such contest is maintained and prosecuted continuously
and with diligence and operates to suspend collection or enforcement of
such Charges or claims or any Lien in respect thereof, (iii) none of the
Collateral becomes subject to forfeiture or loss as a result of such
contest, (iv) no Lien shall be imposed to secure payment of such Charges
or claims other than Permitted Encumbrances and (v) such Credit Party
shall promptly pay or discharge such contested Charges or claims and all
additional charges, interest, penalties and expenses, if any, and shall
deliver to Administrative Agent evidence acceptable to Administrative
Agent of such compliance, payment or discharge, if such contest is
terminated or discontinued adversely to such Credit Party or the
conditions set forth in this SECTION 5.2(b) are no longer met.
5.3 BOOKS AND RECORDS. Each Credit Party shall keep adequate
books and records with respect to its business activities in which proper
entries, reflecting all financial transactions, are made in accordance
with GAAP and on a basis consistent with the Financial Statements
attached as DISCLOSURE SCHEDULE (3.4(a)).
5.4 INSURANCE; DAMAGE TO OR DESTRUCTION OF COLLATERAL.
(a)The Credit Parties shall, at their sole cost and expense,
maintain the policies of insurance described on DISCLOSURE SCHEDULE
(3.18) and the insurance required by the Collateral Documents in form and
with insurers acceptable to Administrative Agent. If any Credit Party at
any time or times hereafter shall fail to obtain or maintain any of the
policies of insurance required above or to pay all premiums relating
thereto, Administrative Agent may at any time or times thereafter obtain
and maintain such policies of insurance and pay such premiums and take
any other action with respect thereto which Administrative Agent deems
advisable. Administrative Agent shall have no obligation to obtain
insurance for any Credit Party or pay any premiums therefor. By doing
so, Administrative Agent shall not be deemed to have waived any Default
or Event of Default arising from any Credit Party's failure to maintain
such insurance or pay any premiums therefor. All sums so disbursed,
including attorneys' fees, court costs and other charges related thereto,
shall be payable on demand by Borrowers to Administrative Agent and shall
be additional Obligations hereunder secured by the Collateral.
(b)Administrative Agent reserves the right at any time upon any
change in any Credit Party's risk profile (including any change in the
product mix maintained by any Credit Party or any laws affecting the
potential liability of such Credit Party) to require additional forms and
limits of insurance to, in Administrative Agent's opinion, adequately
protect both Administrative Agent's and Lender's interests in all or any
portion of the Collateral and to ensure that each Credit Party is
protected by insurance in amounts and with coverage customary for its
industry. If requested by Administrative Agent, each Credit Party shall
deliver to Administrative Agent from time to time a report of a reputable
insurance broker, satisfactory to Administrative Agent, with respect to
its insurance policies.
(c)Each Borrower shall deliver to Administrative Agent, in form
and substance reasonably satisfactory to Administrative Agent,
endorsements to (i) all "All Risk" insurance naming Administrative
Agent, on behalf of itself and Lenders, as loss payee, and (ii) all general
liability and other liability policies naming Administrative Agent,
on behalf of itself and Lenders, as additional insured. Each Borrower
irrevocably makes, constitutes and appoints Administrative Agent
(and all officers, employees or agents designated by Administrative Agent),
so long as any Default or Event of Default shall have occurred and
be continuing or the anticipated insurance proceeds exceed $5,000,000, as
such Borrower's true and lawful agent and attorney-in-fact for
the purpose of making, settling and adjusting claims under such
Borrower's "All Risk" policies of insurance, endorsing the name of such
Borrower on any check or other item of payment for the proceeds of such "All
Risk" policies of insurance and for making all determinations and
decisions with respect to such "All Risk" policies of insurance. Administrative
Agent shall have no duty to exercise any rights or powers granted
to it pursuant to the foregoing power-of-attorney. Borrower
Representative shall promptly notify Administrative Agent of any loss, damage,
or destruction to the Collateral in the amount of $500,000 or more (or,
with respect to Vessels, $1,000,000 or more, as is provided in the Vessel
Mortgage), whether or not covered by insurance. After deducting
from such proceeds the expenses, if any, incurred by Administrative Agent
in the collection or handling thereof, Administrative Agent may, at
its option, apply such proceeds to the reduction of the obligations in
accordance with SECTION 1.3(d), or permit or require Borrowers to use
such money, or any part thereof, to replace, repair, restore or rebuild
the Collateral in a diligent and expeditious manner with materials and
workmanship of substantially the same quality as existed before the loss,
damage or destruction. Notwithstanding the foregoing, if the casualty
giving rise to such insurance proceeds would not reasonably be expected
to have a Material Adverse Effect and such insurance proceeds do not
exceed $5,000,000 in the aggregate, Administrative Agent shall permit
Borrowers to replace, restore, repair or rebuild the property; PROVIDED
that if Borrowers have not completed or entered into binding agreements
to complete such replacement, restoration, repair or rebuilding within
180 days of such casualty, Administrative Agent may apply such insurance
proceeds to the Obligations in accordance with SECTION 1.3(d). All
insurance proceeds which are to be made available to Borrowers to
replace, repair, restore or rebuild the Collateral shall be applied by
Administrative Agent to reduce the outstanding principal balance of the
Revolving Loan (which application shall not result in a permanent
reduction of the Revolving Loan Commitment) and upon such application,
Administrative Agent shall establish a Reserve against the Borrowing Base
in an amount equal to the amount of such proceeds so applied.
Thereafter, such funds shall be made available to Borrowers to provide
funds to replace, repair, restore or rebuild the Collateral as follows:
(i) the related Borrowers shall request a Revolving Credit Advance in the
amount requested to be released; (ii) so long as the conditions set forth
in SECTION 2.2 have been met, Revolving Lenders shall make such Revolving
Credit Advance; and (iii) the Reserve established with respect to such
insurance proceeds shall be reduced by the amount of such Revolving
Credit Advance. To the extent not used to replace, repair, restore or
rebuild the Collateral, such insurance proceeds shall be applied in
accordance with SECTION 1.3(d) and the Reserve established hereunder
shall be correspondingly reduced.
5.5 COMPLIANCE WITH LAWS. Each Credit Party shall comply with
all federal, state, local and foreign laws and regulations applicable to
it, including those relating to the ownership and operation of the
Vessels in the U.S. coastwide trade, ownership and operation of the Real
Estate, licensing, ERISA and labor matters and Environmental Laws and
Environmental Permits, except to the extent that the failure to comply,
individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
5.6 SUPPLEMENTAL DISCLOSURE. From time to time as may be
requested by Administrative Agent (which request will not be made more
frequently than once each year absent the occurrence and continuance of a
Default or an Event of Default), the Credit Parties shall supplement each
Disclosure Schedule hereto, or any representation herein or in any other
Loan Document, with respect to any matter hereafter arising which, if
existing or occurring at the date of this Agreement, would have been
required to be set forth or described in such Disclosure Schedule or as
an exception to such representation or which is necessary to correct any
information in such Disclosure Schedule or representation which has been
rendered inaccurate thereby (and, in the case of any supplements to any
Disclosure Schedule, such Disclosure Schedule shall be appropriately
marked to show the changes made therein); PROVIDED that (a) no such
supplement to any such Disclosure Schedule or representation shall be or
be deemed a waiver of any Default or Event of Default resulting from the
matters disclosed therein, except as consented to by Administrative Agent
and Requisite Lenders in writing; and (b) no supplement shall be required
as to representations and warranties that relate solely to the Closing
Date.
5.7 INTELLECTUAL PROPERTY. Each Credit Party will conduct its
business and affairs without infringement of or interference with any
Intellectual Property of any other Person, except where the failure to do
so could not reasonably be expected to have a Material Adverse Effect.
5.8 ENVIRONMENTAL MATTERS. Each Credit Party shall: (a) conduct
its operations and keep and maintain its Real Estate in compliance with
all Environmental Laws and Environmental Permits other than noncompliance
which could not reasonably be expected to have a Material Adverse Effect;
(b) implement any and all investigation, remediation, removal and
response actions which are appropriate or necessary, in such Credit
Party's reasonable judgment, to maintain the value and marketability of
the Real Estate or to otherwise comply with Environmental Laws and
Environmental Permits pertaining to the presence, generation, treatment,
storage, use, disposal, transportation or Release of any Hazardous
Material on, at, in, under, above, to, from or about any of its Real
Estate; (c) notify Administrative Agent promptly after such Credit Party
becomes aware of any violation of Environmental Laws or Environmental
Permits or any Release on, at, in, under, above, to, from or about any
Real Estate which is reasonably likely to result in Environmental
Liabilities in excess of $200,000; (d) promptly forward to Administrative
Agent a copy of any order, notice, request for information or any
communication or report received by such Credit Party in connection with
any such violation or Release or any other matter relating to any
Environmental Laws or Environmental Permits that could reasonably be
expected to result in Environmental Liabilities in excess of $200,000, in
each case whether or not the Environmental Protection Agency or any
Governmental Authority has taken or threatened any action in connection
with any such violation, Release or other matter; and (e) shall use its
best efforts to address and, where possible resolve, those environmental
issues identified in the Environmental Reports no later than 180 days
after the execution of this Agreement and shall notify Administrative
Agent within 190 days following the Closing of the status thereof and
shall provide periodic updates each quarter thereafter until all of the
issues identified in the Environmental Reports have been resolved. If
Administrative Agent at any time has a reasonable basis to believe that
there may be a violation of any Environmental Laws or Environmental
Permits by any Credit Party or any Environmental Liability arising
thereunder, or a Release of Hazardous Materials on, at, in, under, above,
to, from or about any of its Real Estate, which, in each case, could
reasonably be expected to have a Material Adverse Effect, then each
Credit Party shall, upon Administrative Agent's written request (i) cause
the performance of such environmental audits including subsurface
sampling of soil and groundwater, and preparation of such environmental
reports, at Borrowers' expense, as Administrative Agent may from time to
time reasonably request, which shall be conducted by reputable
environmental consulting firms reasonably acceptable to Administrative
Agent and shall be in form and substance reasonably acceptable to
Administrative Agent, and (ii) permit Administrative Agent or its
representatives to have access to all Real Estate for the purpose of
conducting such environmental audits and testing as Administrative Agent
reasonably deems appropriate, including subsurface sampling of soil and
groundwater. Borrowers shall reimburse Administrative Agent for the
costs of such audits and tests and the same will constitute a part of the
Obligations secured hereunder.
5.9 LANDLORDS' AGREEMENTS, MORTGAGEE AGREEMENTS, CHARTERER
AGREEMENTS AND BAILEE LETTERS. Unless waived by Administrative Agent,
each Credit Party shall obtain within 60 days after the Closing Date a
landlord's agreement, or bailee letter, as applicable, from the lessor of
each leased property or with respect to any warehouse, processor or
converter facility or other location where Collateral is located, which
agreement or letter shall contain a waiver or subordination of all Liens
or claims that the landlord or bailee may assert against such Collateral
or the Collateral at that location, and shall otherwise be reasonably
satisfactory in form and substance to Administrative Agent. Each Credit
Party shall timely and fully pay and perform its obligations under all
leases and other agreements with respect to each leased location or
public warehouse where any Collateral is or may be located, except where
the failure to do so could not reasonably be expected to have a Material
Adverse Effect.
5.10 INTEREST RATE PROTECTION. Within ninety (90) days after the
Closing Date and for a period of three (3) years thereafter, Borrowers
shall enter into and maintain interest rate cap, swap and/or collar
agreements, or other agreements or arrangements designed to provide
protection against fluctuations in interest rates, which shall be on
terms, for periods and with counterparties reasonably acceptable to
Administrative Agent, and by which Borrowers are protected against
increases in interest rates from and after the date of such contracts as
to a notional amount of not less than $35,000,000.
5.11 FURTHER ASSURANCES. Each Credit Party executing this
Agreement agrees that it shall and shall cause each other Credit Party
(whether now existing or hereafter acquired) to, at such Credit Party's
expense and upon request of Administrative Agent, duly execute and
deliver, or cause to be duly executed and delivered, to Administrative
Agent such further instruments and do and cause to be done such further
acts as may be necessary or proper in the reasonable opinion of
Administrative Agent to carry out more effectually the provisions and
purposes of this Agreement or any other Loan Document.
5.12 REAL ESTATE SURVEYS. Within sixty (60) days after the
Closing Date Borrower Representative shall deliver or cause to be
delivered to Administrative Agent (i) surveys, satisfactory to
Administrative Agent in its sole discretion, of all Real Estate which is
the subject of a Mortgage given by any Borrower, as mortgagor, to
Administrative Agent, as mortgagee, as security for the obligations
hereunder (collectively, the "SURVEYS"), and (ii) title endorsements
removing all Survey exceptions from mortgagee title policies, or such
other endorsements which are satisfactory to Administrative Agent in its
sole discretion insuring that any easements or encroachments which are
disclosed by the Surveys shall not interfere with the use and enjoyment
of the mortgaged Real Estate and will not result in a reversion or
forfeiture of title.
5.13 REAL ESTATE MORTGAGES. Borrowers shall within 60 days after
the Closing Date deliver Mortgages and assignments of rents and leases
(which in the case of Cardinal Holdings and Cardinal Services, Inc. may
consist of amendments satisfactory to Administrative Agent of the
existing Mortgages and assignments of rents and leases in favor of GE
Capital as administrative agent on behalf of certain Prior Lenders)
covering all of the Real Estate listed on SCHEDULE D-1 hereto (the
"MORTGAGED PROPERTIES") together with: (a) title insurance policies,
current as-built surveys, zoning letters and certificates of occupancy,
in each case satisfactory in form and substance to Administrative Agent,
in its sole discretion; (b) evidence that counterparts of the Mortgages
have been recorded in all places to the extent necessary or desirable, in
the judgment of Administrative Agent, to create a valid and enforceable
first priority lien (subject to Permitted Encumbrances) on each Mortgaged
Property in favor of Administrative Agent for the benefit of itself and
Lenders (or in favor of such other trustee as may be required or desired
under local law); and (c) an opinion of counsel in each state in which
any Mortgaged Property is located in form and substance and from counsel
satisfactory to Administrative Agent.
5.14 ADDITIONAL REAL ESTATE MORTGAGES. In the event that the
Borrowers' aggregate investment in any Real Estate that is not required
on the Closing Date to be subject to a Mortgage increases to an amount
greater than $1,000,000, Borrowers shall within 30 days thereof deliver
to Administrative Agent a Mortgage in respect of such Real Estate and
such other documents as are specified in SECTION 5.13 hereto.
5.15 REPAYMENT OF INDEBTEDNESS TO MIDSOUTH NATIONAL BANK. The
Borrowers shall repay the Indebtedness owed to MidSouth National Bank
listed on SCHEDULE 6.3 hereto in full, and cause the corresponding Lien
listed on SCHEDULE 6.7 hereto to be extinguished, by September 30, 1999.
5.16 CASH MANAGEMENT SYSTEM; BLOCKED ACCOUNT AGREEMENTS.
Within
60 days after the Closing Date, Borrowers shall deliver to Administrative
Agent evidence satisfactory to Administrative Agent that Cash Management
Systems complying with ANNEX C to the Agreement have been established and
are being maintained in the manner set forth in such ANNEX C, together
with copies of duly executed tri-party blocked account and lock box
agreements, satisfactory to Administrative Agent, with the banks as
required by ANNEX C.
5.17 ENVIRONMENTAL REPORTS. Borrowers shall deliver to
Administrative Agent no later than 60 days after the Closing Date Phase I
Environmental Site Assessment Reports, consistent with the most recent
version of American Society for Testing and Materials (ASTM) Standard E
1527, and applicable state requirements, on all of the Real Estate, dated
no more than 6 months prior to the Closing Date (except with respect to
Cardinal Holdings and its Subsidiaries), prepared by environmental
engineers satisfactory to Administrative Agent, all in form and substance
satisfactory to Administrative Agent, in its sole discretion.
Administrative Agent shall have received by the 30th day after the
Closing Date letters executed by the environmental firms preparing such
environmental reports, in form and substance satisfactory to
Administrative Agent, authorizing Administrative Agent and Lenders to
rely on such reports.
5.18 APPRAISALS. Borrowers shall deliver to Administrative
Agent within 30 days after the Closing Date appraisals as to the Vessels
subject to the Vessel Mortgage, each of which shall be in form and
substance satisfactory to Administrative Agent.
5.19 ADDITIONAL REAL ESTATE DOCUMENTS. Borrowers shall deliver
to Administrative Agent within 60 days after the Closing Date landlord
consents, estoppel and subordination, nondisturbance and attornment
agreements and/or landlord estoppels with respect to the leased Real
Estate, as Administrative Agent may reasonably request.
5.20 PLEDGE OF STOCK OF CONCENTRIC RENTALS, S.A. Within 30 days
after the Closing Date, Holdings shall (i) cause Concentric Rentals, S.A.
to issue capital Stock and (ii) pledge 65% of such capital Stock to
Administrative Agent (and shall deliver to Administrative Agent in
connection therewith such legal opinions as Administrative Agent may
reasonably request).
5.21 SUBORDINATION AGREEMENT. Borrowers shall use their best
efforts to deliver to Administrative Agent within 10 days after the
Closing Date the original signature of Xxxxx X. Xxxxxx to the
Subordination Agreement dated as the date hereof among Xxx X. Xxxxxx,
individually and as Trustee of the Xxx X. Xxxxxx Testamentary Trust,
Xxxxx X. Xxxxxx, Xxxx X. Xxxxxx, Xx Xxx Xxxxxx and Administrative Agent.
5.22 CODE SEARCH REPORTS. Borrowers shall deliver to
Administrative Agent within 20 days after the Closing Date copies of Code
search reports listing all effective financing statements that name any
Credit Party as debtor, together with copies of such financing
statements, none of which shall cover the Collateral, except for those
relating to the Prior Lender Obligations (all of which shall be
terminated as of the Closing Date) and except as set forth on SCHEDULE
6.7.
6. NEGATIVE COVENANTS
Each Credit Party executing this Agreement jointly and severally
agrees as to all Credit Parties that, without the prior written consent of
Administrative Agent and the Requisite Lenders, from and after the
date hereof until the Termination Date:
6.1 MERGERS, SUBSIDIARIES, ETC. No Credit Party shall directly
or indirectly, by operation of law or otherwise, (a) form or acquire any
Subsidiary, or (b) merge with, consolidate with, acquire all or
substantially all of the assets or capital stock of, or otherwise combine
with or acquire, any Person or any operating division of any Person.
Notwithstanding the foregoing, any Borrower (or Holdings, so long as
contemporaneously therewith, all assets so acquired are transferred to a
Borrower), may acquire all or substantially all of the assets or capital
Stock of any Person (the "TARGET") (in each case, a "PERMITTED
ACQUISITION") subject to the satisfaction of each of the following
conditions (provided that nothing contained in this SECTION 6.1 shall
prohibit any Borrower from merging into another Borrower or from being
dissolved so long as in connection therewith all of its assets are
transferred to other Borrowers):
(i)Administrative Agent shall receive at least fifteen
(15) days' prior written notice of such proposed Permitted Acquisition,
which notice shall include a reasonably detailed description of such
proposed Permitted Acquisition;
(ii)such Permitted Acquisition shall only involve assets of
which at least 90% (based on fair market value) are located in the
United States and/or Canada and comprising a business, or those assets of a
business, of the type engaged in by such Borrower as of the Closing
Date or a business reasonably related thereto, and which business
would not subject Administrative Agent or any Lender to regulatory or third
party approvals in connection with the exercise of its rights and remedies
under this Agreement or any other Loan Documents other than
approvals applicable to the exercise of such rights and remedies with respect
to such Borrower prior to such Permitted Acquisition;
(iii)such Permitted Acquisition shall be consensual and
shall have been approved by the Target's board of directors;
(iv)no additional indebtedness, Guaranteed Indebtedness,
contingent obligations or other liabilities shall be incurred,
assumed or otherwise be reflected on a consolidated balance sheet of such
Borrower and Target after giving effect to such Permitted Acquisition, except
ordinary course trade payables and accrued expenses (to the
extent of current assets being acquired of the Target) and unsecured
Indebtedness of the Target to the extent no Default or Event of Default shall
have occurred and be continuing or would result after giving effect to
such Permitted Acquisition; PROVIDED that; the aggregate amount of unsecured
Indebtedness, contingent obligations (excluding "earn-outs" from future
earnings of the acquired entity) and other liabilities assumed in the
acquisition or retained by the Target after giving effect to the
acquisition shall not exceed 30% of the total acquisition price of the
Permitted Acquisition;
(v)[Reserved.]
(vi)the Target shall not have incurred an operating loss
for the trailing twelve-month period preceding the date of the
Permitted Acquisition, as determined based upon the Target's Financial
Statements (computed on a pro forma basis excluding Target's private
ownership expenses to the extent such expenses will not be continuing after
giving effect to the Acquisition), and shall not be projected to have an
operating loss during the twelve-month period following the date
of the Permitted Acquisition, based on reasonable projections with respect
to the Target contained in the Acquisition Projections referred to in
SECTION 6.1(ix)(b);
(vii)the business and assets acquired in such Permitted
Acquisition shall be free and clear of all Liens (other than Permitted
Encumbrances);
(viii)at or prior to the closing of any Permitted Acquisition
(or within 30 days after such closing in the case of Real Estate),
Administrative Agent will be granted a first priority perfected Lien
(subject to Permitted Encumbrances) in all assets acquired
pursuant thereto or in the assets and capital stock of the Target (or in the
case of Real Estate, only those assets the aggregate Borrowers'
investment in which exceeds $1,000,000), and Holdings and such Borrower and the
Target shall have executed such documents and taken such actions as may
be required by Administrative Agent in connection therewith;
(ix)Concurrently with delivery of the notice referred to in
CLAUSE (i) above, such Borrower shall have delivered to Administrative
Agent, in form and substance satisfactory to Administrative Agent:
(A) A PRO FORMA CONSOLIDATED BALANCE SHEET OF HOLDINGS
AND ITS SUBSIDIARIES (THE "ACQUISITION PRO FORMA"), based on
recent financial data, which shall be complete and shall
accurately and fairly represent the assets, liabilities,
financial condition and results of operations of Holdings and
its Subsidiaries in accordance with GAAP consistently applied,
but taking into account such Permitted Acquisition and the
equity contribution made in connection therewith, and such
Acquisition Pro Forma shall reflect that (x) on a pro forma
basis, no Event of Default shall have occurred and be
continuing or would result after giving effect to such
Permitted Acquisition and the Borrowers would have been in
compliance with the financial covenants set forth in ANNEX G
for the four quarter period reflected in the Compliance
Certificate most recently delivered to Agent pursuant to ANNEX
E prior to the consummation of such Permitted Acquisition
(giving effect to such Permitted Acquisition as if made on the
first day of such period), and (y) the Acquisition Projections
(as hereinafter defined) shall reflect that the average daily
Net Borrowing Availability, after giving effect to payment of
accounts payable (including those assumed in connection with
such Permitted Acquisition) consistent with past practices, of
$5,000,000 shall continue for at least 90 days after the
consummation of such Permitted Acquisition, PROVIDED that such
requisite average daily Net Borrowing Availability shall be
$3,000,000 if the proceeds used to fund such Permitted
Acquisition are comprised solely of equity contributions and/or
Stock of Holdings and there are no contingent obligations or
liabilities associated with the Target assumed in connection
with such Permitted Acquisition;
(B) updated versions of the most recently delivered
Projections covering the one (1) year period commencing on the
date of such Permitted Acquisition and otherwise prepared in
accordance with the Projections (the "ACQUISITION PROJECTIONS")
and based upon historical financial data of a recent date
satisfactory to Administrative Agent, taking into account such
Permitted Acquisition; and
(C) A certificate of the chief financial officer of
Holdings and such Borrower to the effect that: (w) such
Borrower (after taking into consideration all rights of
contribution and indemnity such borrower has against Holdings
and each other Subsidiary of Holdings) will be Solvent upon the
consummation of the Permitted Acquisition; (x) the Acquisition
Pro Forma fairly presents the financial condition of Holdings
and such Borrower (on a consolidated basis) as of the date
thereof after giving effect to the Permitted Aquisition; (y)
the Acquisition Projections are reasonable estimates of the
future financial performance of Holdings and such Borrower
subsequent to the date thereof based upon the historical
performance of Holdings, such Borrower and the Target; and (z)
Holdings and such Borrower have completed their due diligence
investigation with respect to the Target and such Permitted
Acquisition, which investigation was conducted in a manner
similar to that which would have been conducted by a prudent
purchaser of a comparable business and the results of which
investigation were delivered to Administrative Agent and
Lenders;
(x)on or prior to the date of such Permitted Acquisition,
Administrative Agent shall have received, in form and substance
satisfactory to Administrative Agent, all opinions, certificates, lien
search results and other documents reasonably requested by Administrative
Agent; and
(xi)at the time of such Permitted Acquisition and after
giving effect thereto, no Default or Event of Default shall have
occurred and be continuing.
6.2 INVESTMENTS; LOANS AND ADVANCES. No Credit Party shall make
or permit to exist any investment in, or make, accrue or permit to exist
loans or advances of money to, any Person, through the direct or indirect
lending of money, holding of securities or otherwise, except as disclosed
on SCHEDULE 6.2 hereto or as otherwise expressly permitted by SECTION 6
hereto, and except that (a) Borrowers may hold investments comprised of
notes payable, or stock or other securities issued by Account Debtors to
Borrowers pursuant to negotiated agreements with respect to settlement of
such Account Debtor's Accounts in the ordinary course of business, so
long as the aggregate amount of such Accounts so settled by Borrowers
does not exceed $500,000 at any one time outstanding; (b) any Credit
Party may make investments in, or loans to, any other Credit Party
(PROVIDED that the aggregate outstanding amount of such investments in
and loans to Foreign Subsidiaries shall not exceed $1,000,000 at any
time) and (c) so long as Administrative Agent has not delivered an
Activation Notice, no Default or Event of Default shall have occurred and
be continuing and (except during the 60-day period beginning on the
Closing Date) no Revolving Loans (other than Letter of Credit
Obligations) are then outstanding, Borrowers may make investments,
subject to Control Letters in favor of Administrative Agent for the
benefit of Lenders or otherwise subject to a perfected security interest
in favor of Administrative Agent for the benefit of Lenders, in (i)
marketable direct obligations issued or unconditionally guaranteed by the
United States of America or any agency thereof maturing within one year
from the date of acquisition thereof, (ii) commercial paper maturing no
more than one year from the date of creation thereof and currently having
the highest rating obtainable from either Standard & Poor's Corporation
or Xxxxx'x Investors Service, Inc., (iii) certificates of deposit,
maturing no more than one year from the date of creation thereof, issued
by commercial banks incorporated under the laws of the United States of
America, each having combined capital, surplus and undivided profits of
not less than $300,000,000 and having a senior secured rating of "A" or
better by a nationally recognized rating agency or by any Lender (an "A
RATED BANK"), (iv) time deposits, maturing no more than 30 days from the
date of creation thereof with A Rated Banks, and (v) other investments
not exceeding $100,000 in the aggregate at any time outstanding.
6.3 INDEBTEDNESS. No Credit Party shall create, incur, assume
or permit to exist any Indebtedness, except (without duplication) (i)
Indebtedness secured by purchase money security interests and Capital
Leases permitted in CLAUSE (c) of SECTION 6.7, (ii) the Loans and the
other Obligations, (iii) deferred taxes, (iv) unfunded pension fund and
other employee benefit plan obligations and liabilities to the extent
they are permitted to remain unfunded under applicable law, (v) existing
Indebtedness described in DISCLOSURE SCHEDULE (6.3) and refinancings
thereof or amendments or modifications thereto which do not have the
effect of increasing the principal amount thereof or changing the
amortization thereof (other than to extend the same) and which are
otherwise on terms and conditions no less favorable to any Credit Party,
Administrative Agent or any Lender, as determined by Administrative
Agent, than the terms of the Indebtedness being refinanced, amended or
modified; (vi) Indebtedness specifically permitted under SECTION 6.1,
(vii) Indebtedness required under the interest rate protection agreements
referred to in SECTION 5.10; and (viii) Indebtedness consisting of
intercompany loans and advances made by any Borrower to any other Credit
Party that is a Guarantor or by any Guarantor to any Borrower; PROVIDED
that (A) Borrowers shall record all intercompany transactions on their
books and records in a manner satisfactory to Administrative Agent; (B)
the obligations of Borrowers under any such intercompany transactions
shall be subordinated to the Obligations of Borrowers hereunder in a
manner satisfactory to Administrative Agent; (C) at the time any such
intercompany loan or advance is made by any Borrower and after giving
effect thereto, such Borrower shall be Solvent; and (D) no Default or
Event of Default would occur and be continuing after giving effect to any
such proposed such intercompany loan.
(a)No Credit Party shall, directly or indirectly, voluntarily
purchase, redeem, defease or prepay any principal of, premium, if any,
interest or other amount payable in respect of any Indebtedness, other
than (i) the Obligations and (ii) Indebtedness secured by a Permitted
Encumbrance if the asset securing such Indebtedness has been sold or
otherwise disposed of in accordance with SECTION 6.8(b).
6.4 EMPLOYEE LOANS AND AFFILIATE TRANSACTIONS.
(a)Except as otherwise expressly permitted in this SECTION 6
with respect to Affiliates, no Credit Party shall enter into or be a
party to any transaction with any other Credit Party or any Affiliate
thereof except in the ordinary course of and pursuant to the reasonable
requirements of such Credit Party's business and upon fair and reasonable
terms that are no less favorable to such Credit Party than would be
obtained in a comparable arm's length transaction with a Person not an
Affiliate of such Credit Party. In addition, if any such transaction or
series of related transactions involves payments in excess of $1,000,000
in the aggregate, the terms of these transactions (other than
transactions in the ordinary course of business entered into with
portfolio companies of First Reserve Corporation on an arm's length
basis) must be disclosed in advance to Administrative Agent and Lenders.
All such transactions existing as of the Closing Date (after giving
effect to the Related Transactions) are described on DISCLOSURE SCHEDULE
(6.4(a)).
(b)No Credit Party shall enter into any lending or borrowing
transaction with any employees of any Credit Party, except loans or
advances to their respective employees (i) for travel expenses,
relocation costs and other business purposes up to a maximum of $500,000
in the aggregate at any one time outstanding, and (ii) in the form of
non-cash financing for the purchase of stock of Holdings by
employees.
6.5 CAPITAL STRUCTURE AND BUSINESS. No Credit Party shall (a)
make any changes in any of its business objectives, purposes or
operations which could reasonably be expected to have or result in a
Material Adverse Effect, (b) make any change in its capital structure as
described on DISCLOSURE SCHEDULE (3.9), including the issuance of any
shares of Stock, warrants or other securities convertible into Stock or
any revision of the terms of its outstanding Stock, except that Holdings
may issue additional common Stock, warrants, options and similar equity
instruments or (c) amend its charter or bylaws (or analogous documents)
in a manner which would adversely affect Administrative Agent or Lenders
or such Credit Party's duty or ability to repay the Obligations. No
Credit Party shall engage in any business other than the businesses
currently engaged in by it or businesses reasonably related thereto,
PROVIDED that Holdings shall not engage in any business or other
activities other than the owning of the Stock of Borrowers and any other
Subsidiary formed or acquired in accordance with the Agreement.
6.6 GUARANTEED INDEBTEDNESS. No Credit Party shall create,
incur, assume or permit to exist any Guaranteed Indebtedness except (a)
by endorsement of instruments or items of payment for deposit to the
account of any Credit Party, and (b) for Guaranteed Indebtedness incurred
for the benefit of any other Credit Party if the primary obligation is
not prohibited by this Agreement other than Indebtedness, if any, of a
Target existing at the time such Target is acquired.
6.7 LIENS. No Credit Party shall create, incur, assume or
permit to exist any Lien on or with respect to its Accounts or any of its
other properties or assets (whether now owned or hereafter acquired)
except for (a) Permitted Encumbrances; (b) Liens created after the date
hereof by conditional sale or other title retention agreements (including
Capital Leases) or in connection with purchase money Indebtedness with
respect to Equipment (other than Vessels) and Fixtures acquired by any
Credit Party in the ordinary course of business, involving the incurrence
of an aggregate amount of purchase money Indebtedness and Capital Lease
Obligations of not more than $2,000,000 outstanding at any one time for
all such Liens (PROVIDED that such Liens attach only to the assets
subject to such purchase money debt and such Indebtedness is incurred
within thirty (30) days following such purchase and does not exceed 100%
of the purchase price of the subject assets); and (c) other Liens
securing Indebtedness not exceeding $250,000 in the aggregate at any time
outstanding, so long as such Liens do not attach to any Accounts, Vessels
or Real Estate Collateral. In addition, no Credit Party shall become a
party to any agreement, note, indenture or instrument, or take any other
action, which would prohibit the creation of a Lien on any of its
properties or other assets in favor of Administrative Agent, on behalf of
itself and Lenders, as additional collateral for the Obligations, except
operating leases, Capital Leases, Licenses or instruments creating Liens
permitted by SECTION 6.7(b) above, which prohibit Liens upon the assets
that are subject thereto. With respect to any assets a Lien on which is
permitted pursuant to CLAUSE (b) above, Administrative Agent shall have
the authority (notwithstanding any provision of SECTION 11.2 hereof) and
agrees on reasonable prior written notice to release its Lien on such
assets and shall execute and deliver to Borrower Representative, at
Borrowers' expense, appropriate UCC-3 termination statements and other
releases as reasonably requested by Borrower Representative.
6.8 SALE OF STOCK AND ASSETS. No Credit Party shall sell,
transfer, convey, assign or otherwise dispose of any of its properties or
other assets, including its capital Stock or the capital Stock of any of
its Subsidiaries (whether in a public or a private offering or otherwise
but subject, in the case of Holdings, to the provisions of SECTION
6.5(b)) or any of their Accounts, other than (a) the sale, transfer,
conveyance or other disposition by a Credit Party of assets that are
obsolete or no longer used or useful in such Credit Party's business and
having value not exceeding $1,000,000 in any single transaction or
$2,000,000 in the aggregate in any Fiscal Year, (b) sales and leases of
Inventory and other assets in the ordinary course of business and (c) the
sale, transfer, conveyance or other disposition by the Credit Parties of
other assets having a value not exceeding $500,000 in any single
transaction or $1,000,000 in the aggregate in any Fiscal Year. With
respect to any disposition of assets or other properties permitted
pursuant to CLAUSE (c) above, Administrative Agent shall have the
authority (notwithstanding any provision of SECTION 11.2 hereof) and
agrees on reasonable prior written notice to release its Lien on such
assets or other properties in order to permit the applicable Credit Party
to effect such disposition and shall execute and deliver to Borrower
Representative, at Borrowers' expense, appropriate UCC-3 termination
statements and other releases as reasonably requested by Borrower
Representative.
6.9 ERISA. No Credit Party shall, or shall cause or permit any
ERISA Affiliate to fail to make a required contribution or take other
action with respect to a Qualified Plan that results in, or would be
reasonably likely to result in, the imposition of a Lien under Section
412 of the IRC or Section 302 or 4068 of ERISA in an amount in excess of
$1,000,000.
6.10 FINANCIAL COVENANTS. Borrowers shall not breach or fail to
comply with any of the Financial Covenants (the "FINANCIAL COVENANTS")
set forth in ANNEX G.
6.11 HAZARDOUS MATERIALS. No Credit Party shall cause or permit
a Release of any Hazardous Material on, at, in, under, above, to, from or
about any of the Real Estate where such Release would (a) violate in any
respect, or form the basis for any Environmental Liabilities under, any
Environmental Laws or Environmental Permits or (b) otherwise adversely
impact the value or marketability of any of the Real Estate or any of the
Collateral, other than such violations or impacts which could not
reasonably be expected to have a Material Adverse Effect.
6.12 SALE-LEASEBACKS. No Credit Party shall engage in any
sale-leaseback, synthetic lease or similar transaction involving any of
its assets.
6.13 CANCELLATION OF INDEBTEDNESS. No Credit Party shall cancel
any claim or debt owing to it, except for reasonable consideration
negotiated on an arm's-length basis and in the ordinary course of its
business consistent with past practices.
6.14 RESTRICTED PAYMENTS. No Credit Party shall make any
Restricted Payment, except (a) payments by Borrowers to Holdings to fund
payment of Holdings' cash Taxes due and payable, (b) payments by
Borrowers to Holdings to cover Holdings' operating expenses, (c) employee
loans permitted under SECTION 6.4(b) above, and (d) payments by any
Subsidiary of a Borrower to such Borrower.
6.15 CHANGE OF CORPORATE NAME OR LOCATION; CHANGE OF FISCAL
YEAR. No Credit Party shall (a) change its corporate (or limited
liability company) name, or (b) change its chief executive office,
principal place of business, corporate (or limited liability company)
offices or warehouses or locations at which Collateral is held or stored,
or the location of its records concerning the Collateral, in any case
without at least thirty (30) days prior written notice to Administrative
Agent and after Administrative Agent's written acknowledgment that any
reasonable action requested by Administrative Agent in connection
therewith, including to continue the perfection of any Liens in favor of
Administrative Agent, on behalf of Lenders, in any Collateral, has been
completed or taken, and PROVIDED that any such new location shall be in
the continental United States and FURTHER PROVIDED that Vessels may be
located outside the United States if such location could not reasonably
be expected to have a Material Adverse Effect on the priority of Liens on
such Vessels under the Vessel Mortgage or the receipt of earnings from
such Vessels. Without limiting the foregoing, no Credit Party shall
change its name, identity or corporate (or limited liability company)
structure in any manner which might make any financing or continuation
statement filed in connection herewith seriously misleading within the
meaning of Section 9-402(7) of the Code or any other then applicable
provision of the Code except upon prior written notice to Administrative
Agent and Lenders and after Administrative Agent's written acknowledgment
that any reasonable action requested by Administrative Agent in
connection therewith, including to continue the perfection of any Liens
in favor of Administrative Agent, on behalf of Lenders, in any
Collateral, has been completed or taken. No Credit Party shall change
its Fiscal Year.
6.16 NO IMPAIRMENT OF INTERCOMPANY TRANSFERS. No Credit Party
shall directly or indirectly enter into or become bound by any agreement,
instrument, indenture or other obligation (other than this Agreement and
the other Loan Documents) which could directly or indirectly restrict,
prohibit or require the consent of any Person with respect to the payment
of dividends or distributions or the making or repayment of intercompany
loans by a Subsidiary of any Borrower to such Borrower.
6.17 NO SPECULATIVE TRANSACTIONS. No Credit Party shall engage
in any transaction involving commodity options, futures contracts or
similar transactions, except solely to hedge against fluctuations in the
prices of commodities owned or purchased by it and the values of foreign
currencies receivable or payable by it and interest swaps, caps or
collars.
6.18 LEASES. No Credit Party shall enter into any operating
lease for Equipment or Real Estate, if the aggregate of all such
operating lease payments payable in any calendar year on a consolidated
basis would exceed $3,000,000.
6.19 CHANGES RELATING TO SUBORDINATED DEBT. No Credit Party
shall change or amend the terms of any Subordinated Debt (or any
indenture or agreement in connection therewith) if the effect of such
amendment is to: (a) increase the interest rate on such Subordinated
Debt; (b) change the dates upon which payments of principal or interest
are due on such Subordinated Debt other than to extend such dates; (c)
change any default or event of default other than to delete or make less
restrictive any default provision therein, or add any covenant with
respect to such Subordinated Debt; (d) change the redemption or
prepayment provisions of such Subordinated Debt other than to extend the
dates therefor or to reduce the premiums payable in connection therewith;
(e) grant any security or collateral to secure payment of such
Subordinated Debt; or (f) change or amend any other term if such change
or amendment would materially increase the obligations of the obligor or
confer additional material rights to the holder of such Subordinated Debt
in a manner adverse to any Credit Party, Administrative Agent or any
Lender.
6.20 ACQUISITION OF NEW REAL ESTATE AND VESSELS. No Credit
Party shall acquire any Real Estate (including a leasehold interest)
through an investment of $1,000,000 or more or Vessel unless such Credit
Party's interest therein is subject to a Mortgage or Vessel Mortgage
thereon properly recorded and granting the mortgagee a first priority
perfected or preferred lien thereon for the benefit of Administrative
Agent and the Lenders and in connection therewith such Credit Party shall
have delivered to Administrative Agent evidence thereof (including an
opinion of counsel in form and substance reasonably satisfactory to
Administrative Agent) and in respect of such Real Estate the items
contemplated by SECTION 5.13.
6.21 VESSEL CHARTERS. No Credit Party shall enter into any
charter or similar agreements or arrangements with respect to any Vessel
other than in the ordinary course of business.
6.22 WAIVER OF STAY, EXTENSION OR USURY LAWS. No Credit Party
shall (to the extent that it may lawfully agree not to do so) at any time
insist upon, plead, or in any manner whatsoever claim or take the benefit
or advantage of, any stay or extension law or any usury law or other law
that would prohibit or forgive such Credit Party from paying all or any
portion of the principal of or interest on the Notes or any of the other
Obligations as contemplated herein, wherever enacted, now or at any time
hereafter in force, or which may affect the covenants or the performance
of this Agreement or any of the other Loan Documents; and (to the extent
that it may lawfully do so) each Credit Party hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not
hinder, delay or impede the execution of any power herein granted to
Administrative Agent, but will suffer and permit the execution of every
such power as though no such law had been enacted.
6.23 CAPITAL EXPENDITURES. The Credit Parties shall not incur
Capital Expenditures in any Fiscal Year in excess of 110% of the amount
budgeted therefor in the Operating Plan delivered to Administrative Agent
pursuant to Section (b) of Annex E hereto, PROVIDED that the Credit
Parties may incur Capital Expenditures in excess of such amount in any
Fiscal Year so long as at least $5,000,000 remains unborrowed and
available to be borrowed under the Revolving Credit Facility for the
remainder of such Fiscal Year.
7. TERM
7.1 TERMINATION. The financing arrangements contemplated hereby
shall be in effect until the Commitment Termination Date, and the Loans
and all other Obligations (other than the Term Loan B) shall be
automatically due and payable in full on such date.
7.2 SURVIVAL OF OBLIGATIONS UPON TERMINATION OF FINANCING
ARRANGEMENTS. Except as otherwise expressly provided for in the Loan
Documents, no termination or cancellation (regardless of cause or
procedure) of any financing arrangement under this Agreement shall in any
way affect or impair the obligations, duties and liabilities of Borrowers
or the rights of Administrative Agent and Lenders relating to any unpaid
portion of the Loans or any other Obligations, due or not due,
liquidated, contingent or unliquidated or any transaction or event
occurring prior to such termination, or any transaction or event, the
performance of which is required after the Commitment Termination Date.
Except as otherwise expressly provided herein or in any other Loan
Document, all undertakings, agreements, covenants, warranties and
representations of or binding upon Borrowers, and all rights of
Administrative Agent and each Lender, all as contained in the Loan
Documents, shall not terminate or expire, but rather shall survive any
such termination or cancellation and shall continue in full force and
effect until the Termination Date; provided, however, that in all events
the provisions of Section 11, the payment obligations under Sections 1.15
and 1.16 and the indemnities contained in the Loan Documents shall
survive the Termination Date.
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
8.1 EVENTS OF DEFAULT. The occurrence and continuance of any
one or more of the following events (regardless of the reason therefor)
shall constitute an "EVENT OF DEFAULT" hereunder:
(a)Borrowers (i) fail to make any payment of principal of, or
interest on, or Fees owing in respect of, the Loans or any of the other
Obligations when due and payable, or (ii) fail to pay or reimburse
Administrative Agent or Lenders for any expense reimbursable hereunder or
under any other Loan Document within ten (10) Business Days following
Administrative Agent's demand for such reimbursement or payment of
expenses.
(b)Any Credit Party shall fail or neglect to perform, keep or
observe any of the provisions of SECTIONS 1.4, 1.8, 5.4 or 6, or any of
the provisions set forth in ANNEXES C or G, respectively.
(c)Any Borrower shall fail or neglect to perform, keep or
observe any of the provisions of SECTION 4 or any provisions set forth in
ANNEXES E or F, respectively, and the same shall remain unremedied for
ten (10) days or more.
(d)Any Credit Party shall fail or neglect to perform, keep or
observe any other provision of this Agreement or of any of the
other Loan
Documents (other than any provision embodied in or covered by any other
clause of this SECTION 8.1) and the same shall remain unremedied for
thirty (30) days or more after the earlier to occur of actual knowledge
by any Credit Party or notice from Administrative Agent.
(e)A default or breach shall occur and be continuing under any
other agreement, document or instrument to which any Credit Party is a
party relating to Indebtedness incurred by it which is not cured within
any applicable grace period, and such default or breach (i) involves the
failure to make any payment when due in respect of any Indebtedness
(other than the Obligations) of any Credit Party in excess of $500,000 in
the aggregate, or (ii) causes, or permits any holder of such Indebtedness
or a trustee to cause, Indebtedness or a portion thereof in excess of
$500,000 in the aggregate to become due prior to its stated maturity or
prior to its regularly scheduled dates of payment, regardless of whether
such right is exercised by such holder or trustee.
(f)Any information contained in any Borrowing Base Certificate
is untrue or incorrect in any respect (other than insignificant clerical
errors), or any representation or warranty herein or in any loan document
or in any written statement, report, financial statement or certificate
(other than a borrowing base certificate) made or delivered to
administrative agent or any lender by any credit party is untrue or
incorrect in any material respect as of the date when made or deemed made.
(g)Assets of any Credit Party with a fair market value of
$500,000 or more shall be attached, seized, levied upon or subjected to a
writ or distress warrant, or come within the possession of any receiver,
trustee, custodian or assignee for the benefit of creditors of any Credit
Party and such condition continues for thirty (30) days or more.
(h)A case or proceeding shall have been commenced against any
Credit Party seeking a decree or order in respect of any Credit Party (i)
under Title 11 of the United States Code, as now constituted or hereafter
amended or any other applicable federal, state or foreign bankruptcy or
other similar law, (ii) appointing a custodian, receiver, liquidator,
assignee, trustee or sequestrator (or similar official) for any Credit
Party or of any substantial part of any such Person's assets, or (iii)
ordering the winding-up or liquidation of the affairs of any Credit
Party, and such case or proceeding shall remain undismissed or unstayed
for sixty (60) days or more or such court shall enter a decree or order
granting the relief sought in such case or proceeding.
(i)Any Credit Party (i) shall file a petition seeking relief
under Title 11 of the United States Code, as now constituted or hereafter
amended, or any other applicable federal, state or foreign bankruptcy or
other similar law, (ii) shall fail to contest in a timely and appropriate
manner or shall consent to the institution of proceedings thereunder or
to the filing of any such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee or
sequestrator (or similar official) of any Credit Party or of any
substantial part of any such Person's assets, (iii) shall make an
assignment for the benefit of creditors, (iv) shall take any corporate
(or limited liability company) action in furtherance of any of the
foregoing, or (v) shall admit in writing its inability to, or shall be
generally unable to, pay its debts as such debts become due.
(j)A final judgment or judgments for the payment of money in
excess of $1,000,000 in the aggregate at any time outstanding shall be
rendered against any Credit Party and the same shall not, within thirty
(30) days after the entry thereof, have been discharged or execution
thereof stayed or bonded pending appeal, or shall not have been
discharged prior to the expiration of any such stay.
(k)Any material provision of any Loan Document shall for any
reason cease to be valid, binding and enforceable in accordance with its
terms (or any Credit Party shall challenge the enforceability of any Loan
Document or shall assert in writing, or engage in any action or inaction
based on any such assertion, that any provision of any of the Loan
Documents has ceased to be or otherwise is not valid, binding and
enforceable in accordance with its terms), or any security interest
created under any Loan Document shall cease to be a valid and perfected
first priority security interest or Lien (except as otherwise permitted
herein or therein) in any of the Collateral purported to be covered
thereby.
(l)Any Change of Control shall occur.
8.2 REMEDIES.
(a)If any Event of Default shall have occurred and be
continuing or if a Default shall have occurred and be continuing and
Administrative Agent or Requisite Revolving Lenders shall have determined
not to make any Advances or incur any Letter of Credit Obligations so
long as that specific Default is continuing, Administrative Agent may
(and at the written request of the Requisite Revolving Lenders shall),
upon written notice to the Borrower Representative, suspend this facility
with respect to further Advances and/or the incurrence of further Letter
of Credit Obligations whereupon any further Advances and Letter of Credit
Obligations shall be made or extended in Administrative Agent's sole
discretion (or in the sole discretion of the Requisite Revolving Lenders,
if such suspension occurred at their direction) so long as such Default
or Event of Default is continuing. If any Event of Default shall have
occurred and be continuing, Administrative Agent may (and at the written
request of Requisite Lenders shall), without notice except as otherwise
expressly provided herein, increase the rate of interest applicable to
the Loans and the Letter of Credit Fees to the Default Rate.
(b)If any Event of Default shall have occurred and be
continuing, Administrative Agent may (and at the written request of the
Requisite Lenders shall), upon written notice to the Borrower
Representative, (i) terminate this facility with respect to further
Advances or the incurrence of further Letter of Credit Obligations; (ii)
declare all or any portion of the Obligations, including all or any
portion of any Loan, to be forthwith due and payable, and require that
the Letter of Credit Obligations be cash collateralized as provided in
ANNEX B, all without presentment, demand, protest or further notice of
any kind, all of which are expressly waived by Borrower Representative
and each other Credit Party; and (iii) exercise any rights and remedies
provided to Administrative Agent under the Loan Documents and/or at law
or equity, including all remedies provided under the Code; PROVIDED,
HOWEVER, that upon the occurrence of an Event of Default specified in
SECTIONS 8.1(h) or (i), with respect to any Borrower, this facility shall
automatically terminate with respect to further Advances and the
incurrence of further Letter of Credit Obligations and all of the
Obligations, including the Revolving Loan, shall become immediately due
and payable without declaration, notice or demand by any Person.
8.3 WAIVERS BY CREDIT PARTIES. Except as otherwise provided for
in this Agreement, the other Loan Documents or by applicable law, each
Credit Party waives: (a) presentment, demand and protest and notice of
presentment, dishonor, notice of intent to accelerate, notice of
acceleration, protest, default, nonpayment, maturity, release,
compromise, settlement, extension or renewal of any or all commercial
paper, accounts, contract rights, documents, instruments, chattel paper
and guaranties at any time held by Administrative Agent on which any
Credit Party may in any way be liable, and hereby ratifies and confirms
whatever Administrative Agent may do in this regard, (b) all rights to
notice and a hearing prior to Administrative Agent's taking possession or
control of, or to Administrative Agent's replevy, attachment or levy
upon, the Collateral or any bond or security which might be required by
any court prior to allowing Administrative Agent to exercise any of its
remedies, and (c) the benefit of all valuation, appraisal, marshalling
and exemption laws.
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF ADMINISTRATIVE AGENT
9.1 ASSIGNMENT AND PARTICIPATIONS.
(a)The Credit Parties signatory hereto consent to any Lender's
assignment of, and/or sale of participations in, at any time or times,
the Loan Documents, Loans, Letter of Credit Obligations and any
Commitment or of any portion thereof or interest therein, including any
Lender's rights, title, interests, remedies, powers or duties thereunder,
whether evidenced by a writing or not, in accordance with this SECTION
9.1. Any assignment by a Lender shall (i) require the consent of the
Borrower Representative and Administrative Agent (which in either case
shall not be unreasonably withheld or delayed) and the execution of an
assignment agreement (an "ASSIGNMENT AGREEMENT") substantially in the
form attached hereto as EXHIBIT 9.1(a) and otherwise in form and
substance satisfactory to, and acknowledged by, the Borrower
Representative and Administrative Agent; (ii) be conditioned on such
assignee Lender representing to the assigning Lender and Administrative
Agent that it is purchasing the applicable Loans to be assigned to it for
its own account, for investment purposes and not with a view to the
distribution thereof; (iii) if a partial assignment, be in an amount at
least equal to $5,000,000 and, after giving effect to any such partial
assignment, the assigning Lender shall have retained Commitments in an
amount at least equal to $5,000,000; and (iv) include a payment to
Administrative Agent of an assignment fee of $3,500. In the case of an
assignment by a Lender under this SECTION 9.1, the assignee shall have,
to the extent of such assignment, the same rights, benefits and
obligations as it would if it were a Lender hereunder. The assigning
Lender shall be relieved of its obligations hereunder with respect to its
Commitments or assigned portion thereof from and after the date of such
assignment. Each Borrower hereby acknowledges and agrees that any
assignment will give rise to a direct obligation of such Borrower to the
assignee and that the assignee shall be considered to be a "Lender". In
all instances, each Lender's liability to make Loans hereunder shall be
several and not joint and shall be limited to such Lender's Pro Rata
Share of the applicable Commitment. In the event Administrative Agent or
any Lender assigns or otherwise transfers all or any part of a Note,
Administrative Agent or any such Lender shall so notify Borrower
Representative and Borrowers shall, upon the request of Administrative
Agent or such Lender, execute new Notes in exchange for the Notes being
assigned. Notwithstanding the foregoing provisions of this SECTION
9.1(a), any Lender may at any time pledge or assign all or any portion of
such Lender's rights under this Agreement and the other Loan Documents to
a Federal Reserve Bank; PROVIDED, HOWEVER, that no such pledge or
assignment shall release such Lender from such Lender's obligations
hereunder or under any other Loan Document.
(b)Any participation by a Lender of all or any part of its
Commitments shall be in an amount at least equal to $5,000,000, and with
the understanding that all amounts payable by Borrowers hereunder shall
be determined as if that Lender had not sold such participation, and that
the holder of any such participation shall not be entitled to require
such Lender to take or omit to take any action hereunder except actions
directly affecting (i) any reduction in the principal amount of, or
interest rate or Fees payable with respect to, any Loan in which such
holder participates, (ii) any extension of the scheduled amortization of
the principal amount of any Loan in which such holder participates or the
final maturity date thereof, and (iii) any release of all or
substantially all of the Collateral (other than in accordance with the
terms of this Agreement, the Collateral Documents or the other Loan
Documents). Solely for purposes of SECTIONS 1.13, 1.15, 1.16 and 9.8,
each Borrower acknowledges and agrees that a participation shall give
rise to a direct obligation of such Borrower to the participant and the
participant shall be considered to be a "Lender" (provided that the
amounts claimed by any participant pursuant thereto shall not exceed the
amounts that could be claimed by the relevant Lender). Except as set
forth in the preceding sentence neither any Borrower nor any other Credit
Party shall have any obligation or duty to any participant. Neither
Administrative Agent nor any Lender (other than the Lender selling a
participation) shall have any duty to any participant and may continue to
deal solely with the Lender selling a participation as if no such sale
had occurred.
(c)Except as expressly provided in this SECTION 9.1, no Lender
shall, as between Borrowers and that Lender, or Administrative Agent and
that Lender, be relieved of any of its obligations hereunder as a result
of any sale, assignment, transfer or negotiation of, or granting of
participation in, all or any part of the Loans, the Notes or other
Obligations owed to such Lender.
(d)Each Credit Party executing this Agreement shall assist
Administrative Agent and Syndication Agent in selling assignments or
participations under this SECTION 9.1 as reasonably required to enable
the assigning or selling Lender to effect any such assignment or
participation, including the execution and delivery of any and all
agreements, notes and other documents and instruments as shall be
requested and, if requested by Administrative Agent, the preparation of
informational materials for, and the participation of management in
meetings with, potential assignees or participants. Each Credit Party
executing this Agreement shall certify the correctness, completeness and
accuracy of all descriptions of the Credit Parties and their affairs
contained in any selling materials provided by it and all other
information provided by it and included in such materials, except that
any Projections delivered by or on behalf of Borrowers shall only be
certified by Borrowers as having been prepared by Borrowers in compliance
with the representations contained in SECTION 3.4(c).
(e)A Lender may furnish any information concerning Credit
Parties in the possession of such Lender from time to time to assignees
and participants (including prospective assignees and participants).
Prior to any such disclosure, each Lender shall obtain from assignees or
participants (including prospective assignees and participants)
confidentiality covenants substantially equivalent to those contained in
SECTION 11.8.
(f)So long as no Event of Default shall have occurred and be
continuing, no Lender shall assign or sell participations in any portion
of its Loans or Commitments to a potential Lender or participant, if, as
of the date of the proposed assignment or sale, the assignee Lender or
participant would be subject to capital adequacy or similar requirements
under SECTION 1.16(a), increased costs under SECTION 1.16(b), an
inability to fund LIBOR Loans under SECTION 1.16(c), or withholding taxes
in accordance with SECTION 1.16(d).
9.2 APPOINTMENT OF ADMINISTRATIVE AGENT. GE Capital is hereby
appointed to act on behalf of all Lenders as Administrative Agent under
this Agreement and the other Loan Documents. The provisions of this
SECTION 9.2 are solely for the benefit of Administrative Agent and
Lenders and no Credit Party nor any other Person shall have any rights as
a third party beneficiary of any of the provisions hereof. In performing
its functions and duties under this Agreement and the other Loan
Documents, Administrative Agent shall act solely as an agent of Lenders
and does not assume and shall not be deemed to have assumed any
obligation toward or relationship of agency or trust with or for any
Credit Party or any other Person. Administrative Agent shall have no
duties or responsibilities except for those expressly set forth in this
Agreement and the other Loan Documents. The duties of Administrative
Agent shall be mechanical and administrative in nature and Administrative
Agent shall not have, or be deemed to have, by reason of this Agreement,
any other Loan Document or otherwise a fiduciary relationship in respect
of any Lender. Neither Administrative Agent nor any of its Affiliates
nor any of their respective officers, directors, employees, agents or
representatives shall be liable to any Lender for any action taken or
omitted to be taken by it hereunder or under any other Loan Document, or
in connection herewith or therewith, except for damages solely caused by
its or their own gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction.
If Administrative Agent shall request instructions from
Requisite Lenders, Requisite Revolving Lenders or all affected Lenders
with respect to any act or action (including failure to act) in
connection with this Agreement or any other Loan Document, then
Administrative Agent shall be entitled to refrain from such act or taking
such action unless and until Administrative Agent shall have received
instructions from Requisite Lenders, Requisite Revolving Lenders, or all
affected Lenders, as the case may be, and Administrative Agent shall not
incur liability to any Person by reason of so refraining. Administrative
Agent shall be fully justified in failing or refusing to take any action
hereunder or under any other Loan Document (a) if such action would, in
the opinion of Administrative Agent, be contrary to law or the terms of
this Agreement or any other Loan Document, (b) if such action would, in
the opinion of Administrative Agent, expose Administrative Agent to
Environmental Liabilities or (c) if Administrative Agent shall not first
be indemnified to its satisfaction against any and all liability and
expense which may be incurred by it by reason of taking or continuing to
take any such action. Without limiting the foregoing, no Lender shall
have any right of action whatsoever against Administrative Agent as a
result of Administrative Agent acting or refraining from acting hereunder
or under any other Loan Document in accordance with the instructions of
Requisite Lenders, Requisite Revolving Lenders or all affected Lenders,
as applicable.
9.3 ADMINISTRATIVE AGENT'S RELIANCE, ETC. Neither
Administrative Agent nor any of its Affiliates nor any of their
respective directors, officers, agents or employees shall be liable for
any action taken or omitted to be taken by it or them under or in
connection with this Agreement or the other Loan Documents, except for
damages solely caused by its or their own gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction.
Without limitation of the generality of the foregoing, Administrative
Agent: (a) may treat the payee of any Note as the holder thereof until
Administrative Agent receives written notice of the assignment or
transfer thereof signed by such payee and in form satisfactory to
Administrative Agent; (b) may consult with legal counsel, independent
public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (c)
makes no warranty or representation to any Lender and shall not be
responsible to any Lender for any statements, warranties or
representations made in or in connection with this Agreement or the other
Loan Documents; (d) shall not have any duty to ascertain or to inquire as
to the performance or observance of any of the terms, covenants or
conditions of this Agreement or the other Loan Documents on the part of
Borrowers or to inspect the Collateral (including the books and records)
of Borrowers; (e) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement or the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto; and (f)
shall incur no liability under or in respect of this Agreement or the
other Loan Documents by acting upon any notice, consent, certificate or
other instrument or writing (which may be by telecopy, telegram, cable or
telex) believed by it to be genuine and signed or sent by the proper
party or parties.
9.4 GE CAPITAL AND AFFILIATES. With respect to its Commitments
hereunder, GE Capital shall have the same rights and powers under this
Agreement and the other Loan Documents as any other Lender and may
exercise the same as though it were not Administrative Agent; and the
term "Lender" or "Lenders" shall, unless otherwise expressly indicated,
include GE Capital in its individual capacity. GE Capital and its
Affiliates may lend money to, invest in, and generally engage in any kind
of business with, any Credit Party, any of their Affiliates and any
Person who may do business with or own securities of any Credit Party or
any such Affiliate, all as if GE Capital were not Administrative Agent
and without any duty to account therefor to Lenders. GE Capital and its
Affiliates may accept fees and other consideration from any Credit Party
for services in connection with this Agreement or otherwise without
having to account for the same to Lenders. GE Capital has also purchased
certain equity interests in Holdings, which is a corporation which
currently owns (directly or indirectly) one hundred percent (100%) of the
outstanding Stock of each Borrower. Each Lender acknowledges the
potential conflict of interest between GE Capital as a Lender holding
disproportionate interests in the Loans, GE Capital as a stockholder of
Holdings, and GE Capital as Administrative Agent.
9.5 LENDER CREDIT DECISION. Each Lender acknowledges that it
has, independently and without reliance upon Administrative Agent or any
other Lender and based on the Financial Statements referred to in SECTION
3.4(a) and such other documents and information as it has deemed
appropriate, made its own credit and financial analysis of the Credit
Parties and its own decision to enter into this Agreement. Each Lender
also acknowledges that it will, independently and without reliance upon
Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make
its own credit decisions in taking or not taking action under this
Agreement. Each Lender acknowledges the potential conflict of interest
of each other Lender as a result of Lenders holding disproportionate
interests in the Loans, and expressly consents to, and waives any claim
based upon, such conflict of interest.
9.6 INDEMNIFICATION. Lenders agree to indemnify Administrative
Agent (to the extent not reimbursed by Borrowers and without limiting the
obligations of Borrowers hereunder), ratably according to their
respective Pro Rata Shares, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by, or asserted against Administrative Agent
in any way relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted by Administrative Agent in
connection therewith; PROVIDED, HOWEVER, that no Lender shall be liable
for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from Administrative Agent's gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction.
Without limiting the foregoing, each Lender agrees to reimburse
Administrative Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including counsel fees) incurred by
Administrative 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 and each
other Loan Document, to the extent that Administrative Agent is not
reimbursed for such expenses by Borrowers.
9.7 SUCCESSOR ADMINISTRATIVE AGENT. Administrative Agent may
resign at any time by giving not less than thirty (30) days' prior
written notice thereof to Lenders and Borrower Representative. Upon any
such resignation, the Requisite Lenders (with the prior written consent
of Borrower Representative) shall have the right to appoint a successor
Administrative Agent. If no successor Administrative Agent shall have
been so appointed by the Requisite Lenders and shall have accepted such
appointment within 30 days after the resigning Administrative Agent's
giving notice of resignation, then the resigning Administrative Agent
may, on behalf of Lenders, appoint a successor Administrative Agent,
which shall be a Lender, if a Lender is willing to accept such
appointment, or otherwise shall be a commercial bank or financial
institution or a subsidiary of a commercial bank or financial institution
if such commercial bank or financial institution is organized under the
laws of the United States of America or of any State thereof and has a
combined capital and surplus of at least $300,000,000. If no successor
Administrative Agent has been appointed pursuant to the foregoing, by the
30th day after the date such notice of resignation was given by the
resigning Administrative Agent, such resignation shall become effective
and the Requisite Lenders shall thereafter perform all the duties of
Administrative Agent hereunder until such time, if any, as the Requisite
Lenders appoint a successor Administrative Agent as provided above. Any
successor Administrative Agent appointed by Requisite Lenders hereunder
shall be subject to the approval of Borrower Representative, such
approval not to be unreasonably withheld or delayed; PROVIDED that such
approval shall not be required if a Default or an Event of Default shall
have occurred and be continuing. Upon the acceptance of any appointment
as Administrative Agent hereunder by a successor Administrative Agent,
such successor Administrative Agent shall succeed to and become vested
with all the rights, powers, privileges and duties of the resigning
Administrative Agent. Upon the earlier of the acceptance of any
appointment as Administrative Agent hereunder by a successor
Administrative Agent or the effective date of the resigning
Administrative Agent's resignation, the resigning Administrative Agent
shall be discharged from its duties and obligations under this Agreement
and the other Loan Documents, except that any indemnity rights or other
rights in favor of such resigning Administrative Agent shall continue.
After any resigning Administrative Agent's resignation hereunder, the
provisions of this SECTION 9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent
under this Agreement and the other Loan Documents. Administrative Agent
may be removed at the written direction of the holders of two-thirds or
more of the sum of the Commitments and to the extent Commitments have
terminated (and without duplication), the outstanding Loans; provided
that in so doing, such Lenders shall be deemed to have waived and
released any and all claims they may have against Administrative Agent.
9.8 SETOFF AND SHARING OF PAYMENTS. In addition to any rights
now or hereafter granted under applicable law and not by way of
limitation of any such rights, upon the occurrence and during the
continuance of any Event of Default, each Lender and each holder of any
Note is hereby authorized at any time or from time to time, without
notice to any Borrower or to any other Person, any such notice being
hereby expressly waived, to set off and to appropriate and to apply any
and all balances held by it at any of its offices for the account of any
Borrower (regardless of whether such balances are then due to such
Borrower) and any other properties or assets any time held or owing by
that Lender or that holder to or for the credit or for the account of
such Borrower against and on account of any of the Obligations which are
not paid when due. Any Lender or holder of any Note exercising a right
to set off or otherwise receiving any payment on account of the
Obligations in excess of its Pro Rata Share thereof shall purchase for
cash (and the other Lenders or holders shall sell) such participations in
each such other Lender's or holder's Pro Rata Share of the Obligations as
would be necessary to cause such Lender to share the amount so set off or
otherwise received with each other Lender or holder in accordance with
their respective Pro Rata Shares. Each Lender's obligation under this
SECTION 9.8 shall be in addition to and not limitation of its obligations
to purchase a participation in an amount equal to its Pro Rata Share of
the Swing Line Loans under SECTION 1.1. Each Borrower agrees, to the
fullest extent permitted by law, that (a) any Lender or holder 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 in such
amount so set off to other Lenders and holders and (b) any Lender or
holders so purchasing a participation in the Loans made or other
Obligations held by other Lenders or holders may exercise all rights of
set-off, bankers' lien, counterclaim or similar rights with respect to
such participation as fully as if such Lender or holder were a direct
holder of the Loans and the other Obligations in the amount of such
participation. Notwithstanding the foregoing, if all or any portion of
the set-off amount or payment otherwise received is thereafter recovered
from the Lender that has exercised the right of set-off, to the extent
thereof the purchase of participations by that Lender shall be rescinded
and the purchase price restored without interest.
9.9 ADVANCES; PAYMENTS; NON-FUNDING LENDERS; INFORMATION;
ACTIONS IN CONCERT.
(a)ADVANCES; PAYMENTS.
(i)Revolving Lenders shall refund or participate in the
Swing Line Loan in accordance with CLAUSES (iii) and (iv) of SECTION
1.1(c). If the Swing Line Lender declines to make a Swing Line Loan or
if Swing Line Availability is zero, Administrative Agent shall notify
Revolving Lenders, promptly after receipt of a Notice of Revolving
Advance and in any event prior to 12:00 p.m. (Chicago time) on the date
such Notice of Revolving Advance is received, by telecopy, telephone or
other similar form of transmission. Each Revolving Lender shall make the
amount of such Lender's Pro Rata Share of each Revolving Credit Advance
available to Administrative Agent in same day funds by wire transfer to
Administrative Agent's account as set forth in ANNEX H not later than
2:00 p.m. (Chicago time) on the requested funding date, in the case of an
Index Rate Loan and not later than 10:00 a.m. (Chicago time) on the
requested funding date in the case of a LIBOR Loan. After receipt of
such wire transfers (or, in Administrative Agent's sole discretion,
before receipt of such wire transfers), subject to the terms hereof,
Administrative Agent shall make the requested Revolving Credit Advance to
the appropriate Borrowers. All payments by each Revolving Lender shall
be made without setoff, counterclaim or deduction of any kind.
(ii)On the second (2nd) Business Day of each calendar week
or more frequently as aggregate cumulative payments in excess of
$2,000,000 are received with respect to the Loans (other than the Swing
Line Loan) (each, a "SETTLEMENT DATE"), Administrative Agent will advise
each Lender by telephone or telecopy of the amount of such Lender's Pro
Rata Share of principal, interest and Fees paid for the benefit of
Lenders with respect to each applicable Loan. Provided that such Lender
has made all payments required to be made by it and purchased all
participations required to be purchased by it under this Agreement and
the other Loan Documents as of such Settlement Date, Administrative Agent
will pay to each Lender such Lender's Pro Rata Share of principal,
interest and Fees paid by Borrowers since the previous Settlement Date
for the benefit of that Lender on the Loans held by it. Such payments
shall be made by wire transfer to such Lender's account (as specified by
such Lender in ANNEX H or the applicable Assignment Agreement) not later
than 1:00 p.m. (Chicago time) on the next Business Day following each
Settlement Date.
(b)AVAILABILITY OF LENDER'S PRO RATA SHARE. Administrative
Agent may assume that each Lender will make its Pro Rata Share of each
Revolving Credit Advance or Term Loan available to Administrative Agent
on each funding date. If such Pro Rata Share is not, in fact, paid to
Administrative Agent by such Lender when due, Administrative Agent will
be entitled to recover such amount on demand from such Lender without
set-off, counterclaim or deduction of any kind. If any Lender fails to
pay the amount of its Pro Rata Share forthwith upon Administrative
Agent's demand, Administrative Agent shall promptly notify Borrower
Representative and Borrowers shall immediately repay such amount to
Administrative Agent. Nothing in this SECTION 9.9(b) or elsewhere in
this Agreement or the other Loan Documents shall be deemed to require
Administrative Agent to advance funds on behalf of any Lender or to
relieve any Lender from its obligation to fulfill its Commitments
hereunder or to prejudice any rights that Borrowers may have against any
Lender as a result of any default by such Lender hereunder. To the
extent that Administrative Agent advances funds to Borrowers on behalf of
any Lender and is not reimbursed therefor on the same Business Day as
such Advance or Term Loan is made, Administrative Agent shall be entitled
to retain for its account all interest accrued on such Advance or Term
Loan until reimbursed by the applicable Lender.
(c)RETURN OF PAYMENTS.
(i)If Administrative 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 Administrative Agent from Borrowers and
such related payment is not received by Administrative Agent, then
Administrative Agent will be entitled to recover such amount from such
Lender on demand without set-off, counterclaim or deduction of any kind.
(ii)If Administrative Agent determines at any time that any
amount received by Administrative Agent under this Agreement must be
returned to Borrowers or paid to any other Person pursuant to any
insolvency law or otherwise, then, notwithstanding any other term or
condition of this Agreement or any other Loan Document, Administrative
Agent will not be required to distribute any portion thereof to any
Lender. In addition, each Lender will repay to Administrative Agent on
demand any portion of such amount that Administrative Agent has
distributed to such Lender, together with interest at such rate, if any,
as Administrative Agent is required to pay to Borrowers or such other
Person, without set-off, counterclaim or deduction of any kind.
(d)NON-FUNDING LENDERS. The failure of any Lender (such
Lender, a "NON-FUNDING LENDER") to make any Revolving Credit Advance or
to purchase any participation in any Swing Line Loan or make a Term Loan
to be made or purchased by it on the date specified therefor shall not
relieve any other Lender (each such other Lender, an "OTHER LENDER") of
its obligations to make such Advance or purchase such participation or
make such Term Loan on such date, but neither any Other Lender nor
Administrative Agent shall be responsible for the failure of any Non-
Funding Lender to make an Advance to be made, or to purchase a
participation to be purchased or to make a Term Loan to be made, by such
Non-Funding Lender, and no Non-Funding Lender shall have any obligation
to Administrative Agent or any Other Lender for the failure by such Non-
Funding Lender. Notwithstanding anything set forth herein to the
contrary, a Non-Funding Lender (for so long as it shall remain in such
status) shall not have any voting or consent rights under or with respect
to any Loan Document or constitute a "Lender" or a "Revolving Lender" (or
be included in the calculation of "Requisite Lenders" or "Requisite
Revolving Lenders" hereunder) for any voting or consent rights under or
with respect to any Loan Document.
(e)DISSEMINATION OF INFORMATION. Administrative Agent will use
reasonable efforts to provide Lenders with any notice of Default or Event
of Default received by Administrative Agent from, or delivered by
Administrative Agent to, any Credit Party, with notice of any Event of
Default of which Administrative Agent has actually become aware and with
notice of any action taken by Administrative Agent following any Event of
Default; provided, however, that Administrative Agent shall not be liable
to any Lender for any failure to do so, except to the extent that such
failure is attributable solely to Administrative Agent's gross negligence
or willful misconduct as finally determined by a court of competent
jurisdiction.
(f)ACTIONS IN CONCERT. Anything in this Agreement to the
contrary notwithstanding, each Lender hereby agrees with each other
Lender that no Lender shall take any action to protect or enforce its
rights arising out of this Agreement or the Notes (including exercising
any rights of set-off) without first obtaining the prior written consent
of Administrative Agent or Requisite Lenders, it being the intent of
Lenders that any such action to protect or enforce rights under this
Agreement and the Notes shall be taken in concert and at the direction or
with the consent of Administrative Agent.
10. SUCCESSORS AND ASSIGNS
10.1 SUCCESSORS AND ASSIGNS. This Agreement and the other Loan
Documents shall be binding on and shall inure to the benefit of each
Credit Party, Administrative Agent, Lenders and their respective
successors and assigns (including, in the case of any Credit Party, a
debtor-in-possession on behalf of such Credit Party), except as otherwise
provided herein (including, without limitation, SECTION 6.1) or therein.
No Credit Party may assign, transfer, hypothecate or otherwise convey its
rights, benefits, obligations or duties hereunder or under any of the
other Loan Documents without the prior express written consent of
Administrative Agent and Requisite Lenders. Any such purported
assignment, transfer, hypothecation or other conveyance by any Credit
Party without the prior express written consent of Administrative Agent
and Requisite Lenders shall be void. The terms and provisions of this
Agreement are for the purpose of defining the relative rights and
obligations of each Credit Party, Administrative Agent and Lenders with
respect to the transactions contemplated hereby. Only the Syndication
Agent and the Documentation Agent, and no other Person, shall be third
party beneficiaries of the terms and provisions of this Agreement and the
other Loan Documents.
11. MISCELLANEOUS
11.1 COMPLETE AGREEMENT; MODIFICATION OF AGREEMENT. The Loan
Documents constitute the complete agreement between the parties with
respect to the subject matter thereof and may not be modified, altered or
amended except as set forth in SECTION 11.2 below. Any letter of
interest, commitment letter, and/or fee letter (other than the GE Capital
Fee Letter) and/or confidentiality agreement between any Credit Party and
Administrative Agent or any Lender or any of their respective affiliates,
predating this Agreement and relating to a financing of substantially
similar form, purpose or effect shall be superseded by this Agreement.
11.2 AMENDMENTS AND WAIVERS.
(a)Except for actions expressly permitted to be taken by
Administrative Agent, no amendment, modification, termination or waiver
of any provision of this Agreement or any of the Notes, or any consent to
any departure by any Credit Party therefrom, shall in any event be
effective unless the same shall be in writing and signed by
Administrative Agent and each Borrower, and by Requisite Lenders,
Requisite Revolving Lenders or all affected Lenders, as applicable.
Except as set forth in CLAUSES (b) and (c) below, all such amendments,
modifications, terminations or waivers requiring the consent of any
Lenders shall require the written consent of Requisite Lenders.
(b)No amendment, modification, termination or waiver of or
consent with respect to any provision of this Agreement which increases
the percentage advance rates set forth in the definition of the Borrowing
Base, or which makes less restrictive the nondiscretionary criteria for
exclusion from Eligible Accounts set forth in SECTION 1.6, shall be
effective unless the same shall be in writing and signed by
Administrative Agent, Requisite Revolving Lenders and each Borrower. No
amendment, modification, termination or waiver of or consent with respect
to any provision of this Agreement which (i) waives compliance with the
conditions precedent set forth in SECTION 2.2 to the making of any Loan
or the incurrence of any Letter of Credit Obligations shall be effective
unless the same shall be in writing and signed by Administrative Agent,
Requisite Revolving Lenders and each Borrower or (ii) which waives
compliance with the conditions precedent to Contingent Payment Loans
contained in SECTION 2.2 or the provisions of SECTION 1.1(b)(vii)
(including the definitions used therein) shall be effective unless the
same shall be in writing and signed by Administrative Agent and
Contingent Payment Lenders holding at least 50% of the Contingent Payment
Loan Commitment and each Borrower. Notwithstanding anything contained in
this Agreement to the contrary, no waiver or consent with respect to any
Default (if in connection therewith Administrative Agent or Requisite
Revolving Lenders, as the case may be, have exercised its or their right
to suspend the making or incurrence of further Advances or Letter of
Credit Obligations pursuant to SECTION 8.2(a)) or any Event of Default
shall be effective for purposes of the conditions precedent to the making
of Loans or the incurrence of Letter of Credit Obligations set forth in
SECTION 2.2 unless the same shall be in writing and signed by
Administrative Agent, Requisite Revolving Lenders and each Borrower.
(c)No amendment, modification, termination or waiver shall,
unless in writing and signed by Administrative Agent and each Lender
directly affected thereby, do any of the following: (i) increase the
principal amount of any Lender's Commitment (which action shall be deemed
to directly affect all Lenders); (ii) reduce the principal of, rate of
interest on or Fees payable with respect to any Loan or Letter of Credit
Obligations of any affected Lender; (iii) extend any scheduled payment
date or final maturity date of the principal amount of any Loan of any
affected Lender; (iv) waive, forgive, defer, extend or postpone any
payment of interest or Fees as to any affected Lender; (v) release any
Guaranty or, except as otherwise permitted herein or in the other Loan
Documents, permit any Credit Party to sell, release or otherwise dispose
of any Collateral with a value exceeding $15,000,000 in the aggregate
(which action shall be deemed to directly affect all Lenders); (vi)
change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans which shall be required for Lenders or any
of them to take any action hereunder; and (vii) amend or waive this
SECTION 11.2 or the definitions of the terms "Requisite Lenders" or
"Requisite Revolving Lenders" insofar as such definitions affect the
substance of this SECTION 11.2. Furthermore, no amendment,
modification, termination or waiver affecting the rights or duties of
Administrative Agent under this Agreement or any other Loan Document
shall be effective unless in writing and signed by Administrative Agent,
in addition to Lenders required hereinabove to take such action. Each
amendment, modification, termination or waiver shall be effective only in
the specific instance and for the specific purpose for which it was
given. No amendment, modification, termination or waiver shall be
required for Administrative Agent to take additional Collateral pursuant
to any Loan Document. No amendment, modification, termination or waiver
of any provision of any Note shall be effective without the written
concurrence of the holder of that Note. No notice to or demand on any
Credit Party in any case shall entitle such Credit Party or any other
Credit Party to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver or
consent effected in accordance with this SECTION 11.2 shall be binding
upon each holder of the Notes at the time outstanding and each future
holder of the Notes.
(d)If, in connection with any proposed amendment, modification,
waiver or termination (a "PROPOSED CHANGE") requiring the consent of all
affected Lenders, the consent of Requisite Lenders is obtained, but the
consent of other Lenders whose consent is required is not obtained (any
such Lender whose consent is not obtained being referred to as a "NON-
CONSENTING LENDER"), then, so long as Administrative Agent is not a Non-
Consenting Lender, at Borrower Representative's request Administrative
Agent, or a Person acceptable to Administrative Agent, shall have the
right with Administrative Agent's consent and in Administrative Agent's
sole discretion (but shall have no obligation) to purchase from such Non-
Consenting Lenders, and such Non-Consenting Lenders agree that they
shall, upon Administrative Agent's request, sell and assign to
Administrative Agent or such Person, all of the Commitments of such Non-
Consenting Lender for an amount equal to the principal balance of all
Loans held by the Non-Consenting Lender and all accrued interest and Fees
with respect thereto through the date of sale, such purchase and sale to
be consummated pursuant to an executed Assignment Agreement.
(e)UPON PAYMENT IN FULL IN CASH OF ALL OF THE OBLIGATIONS
(OTHER THAN INDEMNIFICATION OBLIGATIONS UNDER SECTION 1.13), termination
of the Commitments and a release of all claims against Administrative
Agent and Lenders, and so long as no suits, actions, proceedings, or
claims are pending or threatened against (and not otherwise secured to
the satisfaction of) any Indemnified Person asserting any damages, losses
or liabilities that are Indemnified Liabilities, Administrative Agent
shall deliver to Borrower Representative termination statements, mortgage
releases and other documents necessary or appropriate to evidence the
termination of the Liens securing payment of the Obligations.
11.3 FEES AND EXPENSES. Borrowers shall reimburse
Administrative Agent for all reasonable out-of-pocket expenses incurred
in connection with the preparation of the Loan Documents (including the
reasonable fees and expenses of all of its special loan counsel,
advisors, consultants and auditors retained in connection with the Loan
Documents and the Related Transactions and advice in connection
therewith). Borrowers shall reimburse Administrative Agent (and, with
respect to CLAUSES (c) and (d) below, all Lenders) for all reasonable
out-of-pocket fees, costs and expenses, including the reasonable fees,
costs and expenses of counsel or other advisors (including environmental
and management consultants and appraisers) for advice, assistance, or
other representation in connection with:
(a)THE FORWARDING TO BORROWERS OR ANY OTHER PERSON ON BEHALF
OF BORROWERS BY ADMINISTRATIVE AGENT OF THE PROCEEDS OF THE LOANS;
(b)any amendment, modification or waiver of, or consent with
respect to, any of the Loan Documents or Related Transactions Documents
or advice in connection with the administration of the Loans made
pursuant hereto or its rights hereunder or thereunder;
(c)Any litigation, contest, dispute, suit, proceeding or action
(whether instituted by Administrative Agent, any Lender, any
Borrower or any other Person) in any way relating to the Collateral, any of the
Loan Documents or any other agreement to be executed or delivered in
connection therewith or herewith, whether as party, witness, or
otherwise, including any litigation, contest, dispute, suit, case,
proceeding or action, and any appeal or review thereof, in connection
with a case commenced by or against any Borrower or any other Person
that may be obligated to Administrative Agent by virtue of the Loan Documents;
including any such litigation, contest, dispute, suit, proceeding or
action arising in connection with any work-out or restructuring of the
Loans during the pendency of one or more Events of Default; PROVIDED that
in the case of reimbursement of counsel for Lenders other than
Administrative Agent, such reimbursement shall be limited to one counsel
for all such Lenders;
(d)any attempt to enforce any remedies of Administrative Agent
against any or all of the Credit Parties or any other Person that may be
obligated to Administrative Agent or any Lender by virtue of any of the
Loan Documents; including any such attempt to enforce any such remedies
in the course of any work-out or restructuring of the Loans during the
pendency of one or more Events of Default; PROVIDED that in the case of
reimbursement of counsel for Lenders other than Administrative Agent,
such reimbursement shall be limited to one counsel for all such Lenders;
(e)ANY WORK-OUT OR RESTRUCTURING OF THE LOANS DURING THE
PENDENCY OF ONE OR MORE EVENTS OF DEFAULT; AND
(f)efforts to (i) monitor the Loans or any of the other
Obligations, (ii) evaluate, observe or assess any of the Credit Parties
or their respective affairs, and (iii) verify, protect, evaluate, assess,
appraise, collect, sell, liquidate or otherwise dispose of any of the
Collateral;
including all reasonable attorneys' and other professional and service
providers' fees arising from such services, including those in connection
with any appellate proceedings; and all reasonable out-of-pocket
expenses, costs, charges and other fees incurred by such counsel and
others in any way or respect arising in connection with or relating to
any of the events or actions described in this SECTION 11.3 shall be
payable, on demand, by Borrowers to Administrative Agent. Without
limiting the generality of the foregoing, such expenses, costs, charges
and fees may include: fees, costs and expenses of accountants,
environmental advisors, appraisers, investment bankers, management and
other consultants and paralegals; court costs and expenses; photocopying
and duplication expenses; court reporter fees, costs and expenses; long
distance telephone charges; air express charges; telegram or telecopy
charges; secretarial overtime charges; and expenses for travel, lodging
and food paid or incurred in connection with the performance of such
legal or other advisory services; but shall not include general overhead
expenses of Administrative Agent or any Lender. Borrowers agree to pay
to Mortgagee (as defined in the Vessel Mortgage) all fees, expenses and
compensation payable to Mortgagee in connection with the Vessel Mortgage.
11.4 NO WAIVER. Administrative Agent's or any Lender's failure,
at any time or times, to require strict performance by the Credit Parties
of any provision of this Agreement and any of the other Loan Documents
shall not waive, affect or diminish any right of Administrative Agent or
such Lender thereafter to demand strict compliance and performance
therewith. Any suspension or waiver of an Event of Default shall not
suspend, waive or affect any other Event of Default whether the same is
prior or subsequent thereto and whether the same or of a different type.
Subject to the provisions of SECTION 11.2, none of the undertakings,
agreements, warranties, covenants and representations of any Credit Party
contained in this Agreement or any of the other Loan Documents and no
Default or Event of Default by any Credit Party shall be deemed to have
been suspended or waived by Administrative Agent or any Lender, unless
such waiver or suspension is by an instrument in writing signed by an
officer of or other authorized employee of Administrative Agent and the
applicable required Lenders and directed to Borrower Representative
specifying such suspension or waiver.
11.5 REMEDIES. Administrative Agent's and Lenders' rights and
remedies under this Agreement shall be cumulative and nonexclusive of any
other rights and remedies which Administrative Agent or any Lender may
have under any other agreement, including the other Loan Documents, by
operation of law or otherwise. Recourse to the Collateral shall not be
required.
11.6 SEVERABILITY. Wherever possible, each provision of this
Agreement and the other Loan Documents shall be interpreted in such a
manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
11.7 CONFLICT OF TERMS. Except as otherwise provided in this
Agreement or any of the other Loan Documents by specific reference to the
applicable provisions of this Agreement, if any provision contained in
this Agreement is in conflict with, or inconsistent with, any provision
in any of the other Loan Documents, the provision contained in this
Agreement shall govern and control.
11.8 CONFIDENTIALITY. Administrative Agent and each Lender
agree to use commercially reasonable efforts (equivalent to the efforts
Administrative Agent or such Lender applies to maintaining the
confidentiality of its own confidential information) to maintain as
confidential all confidential information provided to them by the Credit
Parties and designated as confidential for a period of two (2) years
following receipt thereof, except that Administrative Agent and each
Lender may disclose such information (a) to Persons employed or engaged
by Administrative Agent or such Lender in evaluating, approving,
structuring or administering the Loans and the Commitments; (b) to any
bona fide assignee or participant or potential assignee or participant
that has agreed to comply with the covenant contained in this SECTION
11.8 (and any such bona fide assignee or participant or potential
assignee or participant may disclose such information to Persons employed
or engaged by them as described in CLAUSE (a) above); (c) as required or
requested by any Governmental Authority or reasonably believed by
Administrative Agent or such Lender to be compelled by any court decree,
subpoena or legal or administrative order or process; (d) as, in the
opinion of Administrative Agent's or such Lender's counsel, required by
law; (e) in connection with the exercise of any right or remedy under the
Loan Documents or in connection with any Litigation to which
Administrative Agent or such Lender is a party; or (f) which ceases to be
confidential through no fault of Administrative Agent or such Lender.
11.9 GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN
ANY OF THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THE LOAN DOCUMENTS AND THE
OBLIGATIONS SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY APPLICABLE LAWS OF THE
UNITED STATES OF AMERICA. EACH BORROWER HEREBY CONSENTS AND AGREES THAT
THE STATE OR FEDERAL COURTS LOCATED IN XXX XXXX XXXXXX, XXXX XX XXX XXXX,
XXX XXXX SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY
CLAIMS OR DISPUTES BETWEEN ANY BORROWER, ADMINISTRATIVE AGENT AND LENDERS
PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY
MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS, PROVIDED, THAT ADMINISTRATIVE AGENT, LENDERS AND
BORROWERS ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK COUNTY, CITY OF NEW YORK,
NEW YORK AND, PROVIDED, FURTHER NOTHING IN THIS AGREEMENT SHALL BE DEEMED
OR OPERATE TO PRECLUDE ADMINISTRATIVE AGENT FROM BRINGING SUIT OR TAKING
OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL
OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR
OTHER COURT ORDER IN FAVOR OF ADMINISTRATIVE AGENT. EACH BORROWER
EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY
ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH BORROWER HEREBY
WAIVES ANY OBJECTION WHICH SUCH BORROWER MAY HAVE BASED UPON LACK OF
PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT. EACH BORROWER HEREBY WAIVES PERSONAL SERVICE
OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR
SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS
MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH BORROWER AT
THE ADDRESS SET FORTH IN ANNEX I OF THIS AGREEMENT AND THAT SERVICE SO
MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF SUCH BORROWER'S ACTUAL
RECEIPT THEREOF OR THREE (3) BUSINESS DAYS AFTER DEPOSIT IN THE U.S.
MAILS, PROPER POSTAGE PREPAID.
11.10 NOTICES. Except as otherwise provided herein, whenever it
is provided herein that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served
upon any of the parties by any other parties, or whenever any of the
parties desires to give or serve upon any other parties any communication
with respect to this Agreement, each such notice, demand, request,
consent, approval, declaration or other communication shall be in writing
and shall be deemed to have been validly served, given or delivered (a)
upon the earlier of actual receipt and three (3) Business Days after
deposit in the United States Mail, registered or certified mail, return
receipt requested, with proper postage prepaid, (b) upon transmission,
when sent by telecopy or other similar facsimile transmission (with such
telecopy or facsimile promptly confirmed by delivery of a copy by
personal delivery or United States Mail as otherwise provided in this
SECTION 11.10), (c) one (1) Business Day after deposit with a reputable
overnight courier with all charges prepaid or billed to the account of
the sender or (d) when delivered, if hand-delivered by messenger, all of
which shall be addressed to the party to be notified and sent to the
address or facsimile number indicated on ANNEX I or to such other address
(or facsimile number) as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in
writing by the party entitled to receive such notice. Failure or delay
in delivering copies of any notice, demand, request, consent, approval,
declaration or other communication to any Person (other than any Borrower
or Administrative Agent) designated on ANNEX I to receive copies shall in
no way adversely affect the effectiveness of such notice, demand,
request, consent, approval, declaration or other communication.
11.11 SECTION TITLES. The Section titles and Table of Contents
contained in this Agreement are and shall be without substantive meaning
or content of any kind whatsoever and are not a part of the agreement
between the parties hereto.
11.12 COUNTERPARTS. This Agreement may be executed in any
number of separate counterparts, each of which shall collectively and
separately constitute one agreement.
11.13 WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN
CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND
ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES
WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION
RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE
APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST
COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION,
THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT,
OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, AMONG ADMINISTRATIVE AGENT, LENDERS AND
BORROWER ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.
11.14 PRESS RELEASES. Each Credit Party executing this
Agreement agrees that neither it nor its Affiliates will in the future
issue any press releases or other public disclosure using the name of GE
Capital or its affiliates or referring to this Agreement, the other Loan
Documents or the Related Transactions Documents without at least two (2)
Business Days' prior notice to GE Capital and without the prior written
consent of GE Capital unless (and only to the extent that) such Credit
Party or Affiliate is required to do so under law and then, in any event,
such Credit Party or Affiliate will consult with GE Capital before
issuing such press release or other public disclosure. Each Credit Party
consents to the publication by Administrative Agent or any Lender of a
tombstone or similar advertising material relating to the financing
transactions contemplated by this Agreement.
11.15 REINSTATEMENT. This Agreement shall remain in full force
and effect and continue to be effective should any petition be filed by
or against any Borrower for liquidation or reorganization, should any
Borrower become insolvent or make an assignment for the benefit of any
creditor or creditors or should a receiver or trustee be appointed for
all or any significant part of such Borrower's assets, and shall continue
to be effective or to be reinstated, as the case may be, if at any time
payment and performance of the Obligations, or any part thereof, is,
pursuant to applicable law, rescinded or must otherwise be restored or
returned by any obligee of the Obligations, whether as a "voidable
preference," "fraudulent conveyance," or otherwise, all as though such
payment or performance had not been made. In the event that any payment,
or any part thereof, is rescinded, reduced, restored or returned, the
Obligations shall be reinstated and deemed reduced only by such amount
paid and not so rescinded, reduced, restored or returned.
11.16 ADVICE OF COUNSEL; RELIANCE ON OPINIONS OF COUNSEL. Each
of the parties represents to each other party hereto that it has
discussed this Agreement and, specifically, the provisions of SECTIONS
11.9 and 11.13, with its counsel. The Credit Parties jointly and
severally authorize and direct their legal counsel to address those legal
opinions deliverable in connection with this Agreement to Administrative
Agent (on behalf of Lenders) and authorize Administrative Agent and
Lenders to rely upon such opinions.
11.17 NO STRICT CONSTRUCTION. The parties hereto have
participated jointly in the negotiation and drafting of this Agreement.
In the event an ambiguity or question of intent or interpretation arises,
this Agreement shall be construed as if drafted jointly by the parties
hereto and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of
this Agreement.
11.18 BORROWER REPRESENTATIVE. Any election to be made by the
Borrowers hereunder may be made by Borrower Representative. Any notices
to be given by or to the Borrowers may be given by or to Borrower
Representative.
12. CROSS-GUARANTY
12.1 CROSS-GUARANTY. Each Borrower hereby agrees that such
Borrower is jointly and severally liable for, and hereby absolutely and
unconditionally guarantees to Administrative Agent and Lenders and their
respective successors and assigns, the full and prompt payment (whether
at stated maturity, by acceleration or otherwise) and performance of, all
Obligations owed or hereafter owing to Administrative Agent and Lenders
by each other Borrower. Each Borrower agrees that its guaranty
obligation hereunder is a continuing guaranty of payment and performance
and not of collection, and that its obligations under this SECTION 12
shall be absolute and unconditional, irrespective of, and unaffected by,
(a)the genuineness, validity, regularity, enforceability or any
future amendment of, or change in, this Agreement, any other Loan
Document or any other agreement, document or instrument to which any
Borrower is or may become a party;
(b)the absence of any action to enforce this Agreement
(including this SECTION 12) or any other Loan Document or the waiver or
consent by Administrative Agent and Lenders with respect to any of the
provisions thereof;
(c)the existence, value or condition of, or failure to perfect
its Lien against, any security for the Obligations or any action, or the
absence of any action, by Administrative Agent and Lenders in respect
thereof (including the release of any such security);
(d)the insolvency of any Borrower; or
(e)any other action or circumstances which might otherwise
constitute a legal or equitable discharge or defense of a surety or
guarantor,
(f)it being agreed by each Borrower that its obligations under
this SECTION 12 shall not be discharged until the payment and
performance, in full, of the Obligations has occurred. Each Borrower
shall be regarded, and shall be in the same position, as principal debtor
with respect to the Obligations guaranteed hereunder.
12.2 WAIVERS BY BORROWERS. Each Borrower expressly waives all
rights it may have now or in the future under any statute, or at common
law, or at law or in equity, or otherwise, to compel Administrative Agent
or Lenders to xxxxxxxx assets or to proceed in respect of the Obligations
guaranteed hereunder against any other Borrower, any other party or
against any security for the payment and performance of the Obligations
before proceeding against, or as a condition to proceeding against, such
Borrower. It is agreed among each Borrower, Administrative Agent and
Lenders that the foregoing waivers are of the essence of the transaction
contemplated by this Agreement and the other Loan Documents and that, but
for the provisions of this SECTION 12 and such waivers, Administrative
Agent and Lenders would decline to enter into this Agreement.
12.3 BENEFIT OF GUARANTY. Each Borrower agrees that the
provisions of this SECTION 12 are for the benefit of Administrative Agent
and Lenders and their respective successors, transferees, endorsees and
assigns, and nothing herein contained shall impair, as between any other
Borrower and Administrative Agent or Lenders, the obligations of such
other Borrower under the Loan Documents.
12.4 SUBORDINATION OF SUBROGATION, ETC. Notwithstanding
anything to the contrary in this Agreement or in any other Loan Document,
each Borrower hereby expressly and irrevocably subordinates to payment of
the Obligations any and all rights at law or in equity to subrogation,
reimbursement, exoneration, contribution, indemnification or set off and
any and all defenses available to a surety, guarantor or accommodation
co-obligor until the Obligations are indefeasibly paid in full in cash.
Each Borrower acknowledges and agrees that this subordination is intended
to benefit Administrative Agent and Lenders and shall not limit or
otherwise affect such Borrower's liability hereunder or the
enforceability of this SECTION 12, and that Administrative Agent, Lenders
and their respective successors and assigns are intended third party
beneficiaries of the waivers and agreements set forth in this SECTION
12.4.
12.5 ELECTION OF REMEDIES. If Administrative Agent or any
Lender may, under applicable law, proceed to realize its benefits under
any of the Loan Documents giving Administrative Agent or such Lender a
Lien upon any Collateral, whether owned by any Borrower or by any other
Person, either by judicial foreclosure or by non-judicial sale or
enforcement, Administrative Agent or any Lender may, at its sole option,
determine which of its remedies or rights it may pursue without affecting
any of its rights and remedies under this SECTION 12. If, in the
exercise of any of its rights and remedies, Administrative Agent or any
Lender shall forfeit any of its rights or remedies, including its right
to enter a deficiency judgment against any Borrower or any other Person,
whether because of any applicable laws pertaining to "election of
remedies" or the like, each Borrower hereby consents to such action by
Administrative Agent or such Lender and waives any claim based upon such
action, even if such action by Administrative Agent or such Lender shall
result in a full or partial loss of any rights of subrogation which each
Borrower might otherwise have had but for such action by Administrative
Agent or such Lender. Any election of remedies which results in the
denial or impairment of the right of Administrative Agent or any Lender
to seek a deficiency judgment against any Borrower shall not impair any
other Borrower's obligation to pay the full amount of the Obligations.
In the event Administrative Agent or any Lender shall bid at any
foreclosure or trustee's sale or at any private sale permitted by law or
the Loan Documents, Administrative Agent or such Lender may bid all or
less than the amount of the Obligations and the amount of such bid need
not be paid by Administrative Agent or such Lender but shall be credited
against the Obligations. The amount of the successful bid at any such
sale, whether Administrative Agent, Lender or any other party is the
successful bidder, shall be conclusively deemed to be the fair market
value of the Collateral and the difference between such bid amount and
the remaining balance of the Obligations shall be conclusively deemed to
be the amount of the Obligations guaranteed under this SECTION 12,
notwithstanding that any present or future law or court decision or
ruling may have the effect of reducing the amount of any deficiency claim
to which Administrative Agent or any Lender might otherwise be entitled
but for such bidding at any such sale.
12.6 [RESERVED.]
12.7 [RESERVED.]
12.8 LIABILITY CUMULATIVE. The liability of Borrowers under
this SECTION 12 is in addition to and shall be cumulative with all
liabilities of each Borrower to Administrative Agent and Lenders under
this Agreement and the other Loan Documents to which such Borrower is a
party or in respect of any Obligations or obligation of the other
Borrowers, without any limitation as to amount, unless the instrument or
agreement evidencing or creating such other liability specifically
provides to the contrary.
12.9 SUBORDINATION.
(a)Each Borrower (each a "PAYEE BORROWER") hereby subordinates
any and all indebtedness and/or obligations of any other Borrower (each,
an "OTHER BORROWER") now or hereafter owing to such Payee Borrower (an
"INTERCOMPANY OBLIGATION") to the full and prompt payment and performance
of all of the Obligations. Following the occurrence and during the
continuation of any Event of Default, any payments on such intercompany
obligations to any such Payee Borrower, if Administrative Agent or the
Requisite Lenders to request, shall be collected, enforced and received
by such Payee Borrower, in trust, as trustee for Administrative Agent and
shall be paid over to Administrative Agent on account of the Obligations,
but without reducing or affecting in any manner the liability of such
Payee Borrower under the other provisions of this Section 12.
Administrative Agent is authorized and empowered, but not obligated, in
its discretion following the occurrence and during the continuation of
any Event of Default, (a) in the name of any such Payee Borrower, to
collect and enforce, and to submit claims in respect of, any intercompany
obligations of any Other Borrower to such Payee Borrower and to apply any
amounts received thereon to the Obligations, and (b) to require each such
Payee Borrower (i) to collect and enforce, and to submit claims in
respect of, any intercompany obligations of any Other Borrower to such
Payee Borrower, and (ii) to pay any amounts received on such intercompany
obligations to Administrative Agent for application to the Obligations.
(b)Without limiting any of the provisions set forth in
subsection (a) above, upon any distribution of assets of Other Borrower
in any dissolution, winding up, liquidation or reorganization (whether in
bankruptcy, insolvency or receivership proceedings or upon an assignment
for the benefit of creditors or otherwise):
(i)Administrative Agent and Lenders shall first be
entitled to receive payment in full in cash of the Obligations before any
Payee Borrower is entitled to receive any payment on account of the
intercompany obligations owing to such Payee Borrower.
(ii)Any payment or distribution of assets of any Other
Borrower of any kind or character, whether in cash, property or
securities, to which any Payee Borrower would be entitled except for the
provisions of this Section 12.9, shall be paid by the liquidating trustee
or Administrative Agent or other Person making such payment or
distribution directly to Administrative Agent the extent necessary to
make payment in full of all Obligations remaining unpaid after giving
effect to any concurrent payment or distribution or provisions therefor
to Administrative Agent for itself and Lenders.
(iii)In the event that notwithstanding the foregoing
provisions of this Section 12.9, any payment or distribution of assets of
any Other Borrower of any kind or character, whether in cash, property or
securities, shall be received by any Payee Borrower on account of any
intercompany obligations owing to such Payee Borrower before all
Obligations are paid in full, such payment or distribution shall be
received and held in trust for and shall be paid over to Administrative
Agent for itself and Lenders for application to the payment of the
Obligations until all of the Obligations shall have been paid in full,
after giving effect to any concurrent payment or distribution or
provision therefor to Administrative Agent for itself and Lenders.
([Signature Page Follows]
IN WITNESS WHEREOF, this Credit Agreement has been duly executed as of
the date first written above.
CARDINAL HOLDING CORP.
By:
Name:
Title:
CARDINAL SERVICES, INC.
By:
Name:
(Title:
SUB-SURFACE TOOLS, INC.
By:
Name:
Title:
STABIL DRILL SPECIALTIES, INC.
By:
Name:
Title:
SUPERIOR WELL SERVICE, INC.
By:
Name:
Title:
NAUTILUS PIPE & TOOL RENTAL, INC.
By:
Name:
Title:
ACE RENTAL TOOLS, INC.
By:
Name:
Title:
CONNECTION TECHNOLOGY, LTD.
By:
Name:
Title:
FASTORQ, INC.
By:
Name:
Title:
F. & F. WIRELINE SERVICE, INC.
By:
Name:
Title:
OIL STOP, INC.
By:
Name:
Title:
STEERABLE ROTARY TOOLS, L.L.C.
By:
Name:
Title:
HYDRO-DYNAMICS OILFIELD CONTRACTORS, INC.
By:
Name:
Title:
0000 XXXXXX XXXX, INC.
By:
Name:
Title:
0000 XXXXXX XXXX, INC.
By:
Name:
Title:
DIMENSIONAL OIL FIELD SERVICES, INC.
By:
Name:
Title:
SUPERIOR BAREBOAT CHARTERS, INC.
By:
Name:
Title:
TONG RENTALS AND SUPPLY COMPANY, INC.
By:
Name:
Title:
SUPERIOR ENERGY SERVICES, INC.
By:
Name:
Title:
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent and Lender
By:
Name:
Title:
Revolving Loan Commitment (including a Swing
Line Commitment of $5,000,000): $20,000,000
Term Loan A Commitment: $20,000,000
Term Loan B Commitment: $90,000,000
Contingent Payment Commitment: $22,000,000
