EXHIBIT 10.1
LOAN AND SECURITY AGREEMENT
by and among
ELGIN NATIONAL INDUSTRIES, INC.
and
EACH OF ITS SUBSIDIARIES THAT ARE SIGNATORIES HERETO,
as Borrowers,
THE LENDERS THAT ARE SIGNATORIES HERETO,
as Lenders,
and
FOOTHILL CAPITAL CORPORATION,
as Arranger and Administrative Agent
Dated as of February 10, 2003
TABLE OF CONTENTS
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1. DEFINITIONS AND CONSTRUCTION..........................................................................1
1.1..................................................................................................Definitions 1
1.2.............................................................................................Accounting Terms 34
1.3.........................................................................................................Code 34
1.4.................................................................................................Construction 34
1.5.......................................................................................Schedules and Exhibits 35
2. LOAN AND TERMS OF PAYMENT............................................................................35
2.1............................................................................................Revolver Advances 35
2.2...................................................................................................Term Loans 37
2.3.........................................................................Borrowing Procedures and Settlements 39
2.4.....................................................................................................Payments 45
2.5.................................................................................................Overadvances 53
2.6..................................Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations 53
2.7..............................................................................................Cash Management 55
2.8.............................................................................Crediting Payments; Float Charge 57
2.9...........................................................................................Designated Account 57
2.10......................................................Maintenance of Loan Account; Statements of Obligations 57
2.11........................................................................................................Fees 58
2.12...........................................................................................Letters of Credit 58
2.13................................................................................................LIBOR Option 62
2.14........................................................................................Capital Requirements 64
2.15....................................................................Joint and Several Liability of Borrowers 65
2.16............................................................................................Registered Notes 67
3. CONDITIONS; TERM OF AGREEMENT........................................................................67
3.1......................................................Conditions Precedent to the Initial Extension of Credit 67
3.2.....................................................Conditions Subsequent to the Initial Extension of Credit 71
3.3.............................................................Conditions Precedent to All Extensions of Credit 72
3.4.........................................................................................................Term 73
3.5........................................................................................Effect of Termination 73
3.6...............................................................................Early Termination by Borrowers 73
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4. CREATION OF SECURITY INTEREST........................................................................74
4.1...................................................................................Grant of Security Interest 74
4.2........................................................................................Negotiable Collateral 74
4.3.......................................Collection of Accounts, General Intangibles, and Negotiable Collateral 75
4.4........Filing of Financing Statements; Commercial Tort Claims; Delivery of Additional Documentation Required 75
4.5............................................................................................Power of Attorney 76
4.6.............................................................................................Right to Inspect 76
4.7...........................................................................................Control Agreements 76
5. REPRESENTATIONS AND WARRANTIES.......................................................................77
5.1..............................................................................................No Encumbrances 77
5.2............................................................................................Eligible Accounts 77
5.3...........................................................................................Eligible Inventory 77
5.4...........................................................................................Eligible Equipment 77
5.5..........................................................................Location of Inventory and Equipment 77
5.6............................................................................................Inventory Records 77
5.7.State of Incorporation; Location of Chief Executive Office; FEIN; Organizational ID Number; Commercial Tort
Claims........................................................................................................78
5.8.............................................................Due Organization and Qualification; Subsidiaries 78
5.9...............................................................................Due Authorization; No Conflict 78
5.10..................................................................................................Litigation 80
5.11..................................................................................No Material Adverse Change 80
5.12.........................................................................................Fraudulent Transfer 80
5.13...........................................................................................Employee Benefits 80
5.14.....................................................................................Environmental Condition 80
5.15..............................................................................................Brokerage Fees 81
5.16.......................................................................................Intellectual Property 81
5.17......................................................................................................Leases 81
5.18........................................................................................................DDAs 81
5.19.........................................................................................Complete Disclosure 81
5.20................................................................................................Indebtedness 81
5.21................................................................................................Regulation U 81
5.22................................................................................................Permits, Etc 82
5.23..........................................................................................Material Contracts 82
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5.24..................................................................................Employee and Labor Matters 82
5.25.....................................................................................Customers and Suppliers 82
5.26..................................................................................................Properties 83
5.27.........................................................................................Indenture Documents 83
5.28.......................................................................................Inactive Subsidiaries 83
6. AFFIRMATIVE COVENANTS................................................................................83
6.1............................................................................................Accounting System 83
6.2.........................................................................................Collateral Reporting 84
6.3..................................................................Financial Statements, Reports, Certificates 86
6.4............................................................................................Guarantor Reports 89
6.5.......................................................................................................Return 89
6.6....................................................................................Maintenance of Properties 89
6.7........................................................................................................Taxes 89
6.8....................................................................................................Insurance 90
6.9..........................................................................Location of Inventory and Equipment 90
6.10........................................................................................Compliance With Laws 91
6.11......................................................................................................Leases 91
6.12.............................................................................................Customs Brokers 91
6.13.......................................................................................Brokerage Commissions 91
6.14...................................................................................................Existence 91
6.15...............................................................................................Environmental 91
6.16............................................................Organizational ID Number; Commercial Tort Claims 92
6.17....................................................................................Other Disclosure Updates 92
6.18...................................................................................Formation of Subsidiaries 92
7. NEGATIVE COVENANTS...................................................................................92
7.1.................................................................................................Indebtedness 93
7.2........................................................................................................Liens 94
7.3..........................................................................Restrictions on Fundamental Changes 94
7.4...........................................................................................Disposal of Assets 94
7.5..................................................................................................Change Name 94
7.6....................................................................................................Guarantee 95
7.7...........................................................................................Nature of Business 95
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7.8.........................................................................Payments, Prepayments and Amendments 95
7.9............................................................................................Change of Control 95
7.10................................................................................................Consignments 95
7.11...............................................................................................Distributions 96
7.12..........................................................................................Accounting Methods 96
7.13.................................................................................................Investments 96
7.14................................................................................Transactions With Affiliates 96
7.15..................................................................................................Suspension 97
7.16................................................................................................Compensation 97
7.17.............................................................................................Use of Proceeds 97
7.18..........................Change in Location of Chief Executive Office; Inventory and Equipment with Bailees 97
7.19.........................................................................................Securities Accounts 97
7.20.........................................................................................Financial Covenants 98
7.21...............................................................................Classification of Obligations 99
8. EVENTS OF DEFAULT....................................................................................99
9. THE LENDER GROUP'S RIGHTS AND REMEDIES..............................................................102
9.1..........................................................................................Rights and Remedies 102
9.2..........................................................................................Remedies Cumulative 104
10. TAXES AND EXPENSES..................................................................................104
11. WAIVERS; INDEMNIFICATION............................................................................104
11.1........................................................................................Demand; Protest; Etc 104
11.2.................................................................The Lender Group's Liability for Collateral 104
11.3.............................................................................................Indemnification 105
12. NOTICES.............................................................................................106
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER..........................................................107
14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS..........................................................108
14.1..............................................................................Assignments and Participations 108
14.2..................................................................................................Successors 111
15. AMENDMENTS; WAIVERS.................................................................................111
15.1......................................................................................Amendments and Waivers 111
15.2...............................................................................Replacement of Holdout Lender 113
15.3.............................................................................No Waivers; Cumulative Remedies 113
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16. AGENT; THE LENDER GROUP.............................................................................113
16.1......................................................................Appointment and Authorization of Agent 113
16.2........................................................................................Delegation of Duties 114
16.3..........................................................................................Liability of Agent 114
16.4...........................................................................................Reliance by Agent 115
16.5.......................................................................Notice of Default or Event of Default 115
16.6.............................................................................................Credit Decision 115
16.7.........................................................................Costs and Expenses; Indemnification 116
16.8................................................................................Agent in Individual Capacity 116
16.9.............................................................................................Successor Agent 117
16.10 Lender in Individual Capacity....................................................................117
16.11 Withholding Taxes................................................................................118
16.12 Collateral Matters...............................................................................119
16.13 Restrictions on Actions by Lenders; Sharing of Payments..........................................120
16.14 Agency for Perfection............................................................................121
16.15 Payments by Agent to the Lenders.................................................................121
16.16 Concerning the Collateral and Related Loan Documents.............................................121
16.17 Field Audits and Examination Reports; Confidentiality; Disclaimers by Lenders; Other Reports
and Information.................................................................................121
16.18 Several Obligations; No Liability................................................................122
17. GENERAL PROVISIONS..................................................................................123
17.1...............................................................................................Effectiveness 123
17.2............................................................................................Section Headings 123
17.3..............................................................................................Interpretation 123
17.4..................................................................................Severability of Provisions 123
17.5.......................................................................................Amendments in Writing 123
17.6.......................................................................Counterparts; Telefacsimile Execution 123
17.7....................................................................Revival and Reinstatement of Obligations 124
17.8.................................................................................................Integration 124
17.9...............................................................................Parent as Agent for Borrowers 124
17.10 CONFIDENTIALITY..................................................................................125
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LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this "Agreement"), is entered into
as of February 10, 2003, by and among, on the one hand, the lenders identified
on the signature pages hereof (such lenders, together with their respective
successors and assigns, are referred to hereinafter each individually as a
"Lender" and collectively as the "Lenders"), and FOOTHILL CAPITAL CORPORATION, a
California corporation, as the arranger and administrative agent for the Lenders
("Agent"), and, on the other hand, ELGIN NATIONAL INDUSTRIES, INC., a Delaware
corporation ("Parent"), and each of Parent's Subsidiaries identified on the
signature pages hereof (such Subsidiaries, together with Parent, are referred to
hereinafter each individually as a "Borrower", and individually and
collectively, jointly and severally, as "Borrowers").
The parties agree as follows:
DEFINITIONS AND CONSTRUCTION.
Definitions. As used in this Agreement, the following terms shall have the
following definitions:
"Ableco" means Ableco Finance LLC, a Delaware limited liability
company.
"Account Debtor" means any Person who is or who may become obligated
under, with respect to, or on account of, an Account, chattel paper, or a
General Intangible.
"Accounts" means, as to any Person, all of such Person's now owned or
hereafter acquired right, title, and interest with respect to "accounts" (as
that term is defined in the Code), and any and all supporting obligations in
respect thereof.
"ACH Transactions" means any cash management or related services
(including the Automated Clearing House processing of electronic fund transfers
through the direct Federal Reserve Fedline system) provided by Xxxxx Fargo or
its Affiliates for the account of Administrative Borrower or its Subsidiaries.
"Additional Documents" has the meaning set forth in Section 4.4(c).
"Administrative Borrower" has the meaning set forth in Section 17.9.
"Advances" has the meaning set forth in Section 2.1(a).
"Affiliate" means, as applied to any Person, any other Person who,
directly or indirectly, controls, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" means the
possession, directly or indirectly, of the power to direct the management and
policies of a Person, whether through the ownership of Stock, by contract, or
otherwise; provided, however, that, for purposes of the definition of Eligible
Accounts and Section 7.14 hereof: (a) any Person which owns directly or
indirectly 10% or more of the Stock having ordinary voting power for the
election of directors or other members of the governing body of a Person or 10%
or more of the partnership or other ownership interests of
a Person (other than as a limited partner of such Person) shall be deemed an
Affiliate of such Person; (b) each director (or comparable manager) of a Person
shall be deemed to be an Affiliate of such Person; and (c) each partnership or
joint venture in which a Person is a partner or joint venturer shall be deemed
to be an Affiliate of such Person.
"AIC Indemnity Agreement" means that certain Agreement of Indemnity,
dated November 5, 1997, made by Parent in favor of the member companies of the
American International Companies.
"Agent" means Foothill, solely in its capacity as agent for the
Lenders hereunder, and any successor thereto.
"Agent Advances" has the meaning set forth in Section 2.3(e)(i).
"Agent-Related Persons" means Agent together with its Affiliates,
officers, directors, employees, and agents.
"Agent's Account" means the account identified on Schedule A-1.
"Agent's Liens" means the Liens granted by the Loan Parties to Agent
under this Agreement or the other Loan Documents.
"Agreement" has the meaning set forth in the preamble hereto.
"Annualized" means, for any amount to be calculated as at the end of
any month during the period from January 1, 2003 through August 31, 2003, the
product of (a) the aggregate amount for the period from August 1, 2002 through
the end of such month divided by the number of months elapsed during the period
from August 1, 2002 through the end of such month times (b) 12.
"Applicable Prepayment Premium" means, as of any date of
determination, an amount equal to (a) during the period of time from and after
the Closing Date up to the date that is the first anniversary of the Closing
Date, 5% times the difference between (i) the Maximum Revolver Amount and (ii)
the outstanding principal balance of the Term Loan B on the date immediately
prior to the date of determination, (b) during the period of time from and
including the date that is the first anniversary of the Closing Date up to the
date that is the second anniversary of the Closing Date, 4% times the difference
between (i) the Maximum Revolver Amount and (ii) the outstanding principal
balance of the Term Loan B on the date immediately prior to the date of
determination, (c) during the period of time from and including the date that is
the second anniversary of the Closing Date up to the date that is the third
anniversary of the Closing Date, 3% times the difference between (i) the Maximum
Revolver Amount and (ii) the outstanding principal balance of the Term Loan B on
the date immediately prior to the date of determination, (d) during the period
of time from and including the date that is the third anniversary of the Closing
Date up to the date that is the fourth anniversary of the Closing Date, 1% times
the difference between (i) the Maximum Revolver Amount and (ii) the outstanding
principal balance of the Term Loan B on the date immediately prior to the date
of determination, and (e) during the period of time from and including the date
that is the fourth anniversary of the Closing Date up to the Maturity Date,
0.50% times the difference between (i) the Maximum
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Revolver Amount and (ii) the outstanding principal balance of the Term Loan B on
the date immediately prior to the date of determination.
"Appraised Value" means the net orderly liquidation value (net of
liquidation expenses) of any Equipment or the net market value (net of
liquidation expenses) of any Real Property Collateral, in each case, determined
by the most recent appraisal performed by a qualified independent appraiser, in
form and substance satisfactory to the Lender Group.
"Assignee" has the meaning set forth in Section 14.1.
"Assignment and Acceptance" means an Assignment and Acceptance in the
form of Exhibit A-1.
"Authorized Officer" means, with respect to any Person, the chief
executive officer, chief financial officer, president or vice president of such
Person.
"Authorized Person" means any officer or other employee of
Administrative Borrower.
"Availability" means, as of any date of determination, if such date is
a Business Day, and determined at the close of business on the immediately
preceding Business Day, if such date of determination is not a Business Day, the
amount that Borrowers are entitled to borrow as Advances under Section 2.1
(after giving effect to all then outstanding Obligations (other than Bank
Product Obligations) and all sublimits and reserves applicable hereunder).
"Bank Product" means any service or facility extended to Parent or its
Subsidiaries by Xxxxx Fargo or any Affiliate of Xxxxx Fargo including: (a)
credit cards, (b) credit card processing services, (c) debit cards, (d) purchase
cards, (e) ACH Transactions, (f) cash management, including controlled
disbursement, accounts or services, or (g) Hedge Agreements.
"Bank Product Agreements" means those certain agreements entered into
from time to time by Parent or its Subsidiaries in connection with any of the
Bank Products.
"Bank Product Obligations" means all obligations, liabilities,
contingent reimbursement obligations, fees, and expenses owing by Parent or its
Subsidiaries to Xxxxx Fargo or its Affiliates pursuant to or evidenced by the
Bank Product Agreements and irrespective of whether for the payment of money,
whether direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising, and including all such amounts that a Borrower is
obligated to reimburse to Agent or any member of the Lender Group as a result of
Agent or such member of the Lender Group purchasing participations or executing
indemnities or reimbursement obligations with respect to the Bank Products
provided to Administrative Borrower or its Subsidiaries pursuant to the Bank
Product Agreements.
"Bank Product Reserves" means, as of any date of determination, the
lesser of (a) $100,000, and (b) the amount of reserves that Agent has
established (based upon Xxxxx Fargo's or its Affiliate's determination of the
credit exposure in respect of then extant Bank Products) for Bank Products then
provided or outstanding, provided that in order to qualify as
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Bank Product Reserves such reserves must be established at the time Xxxxx Fargo
or its Affiliate provides that applicable Bank Product.
"Bankruptcy Code" means the United States Bankruptcy Code, as in
effect from time to time.
"Base LIBOR Rate" means the rate per annum, determined by Agent in
accordance with its customary procedures, and utilizing such electronic or other
quotation sources as it considers appropriate (rounded upwards, if necessary, to
the next 1/16%), to be the rate at which Dollar deposits are offered to major
banks in the London interbank market on or about 11:00 a.m. (California time) 2
Business Days prior to the commencement of the applicable Interest Period, for a
term and in amounts comparable to the Interest Period and amount of the LIBOR
Rate Loan requested by Administrative Borrower in accordance with this
Agreement, which determination shall be conclusive in the absence of manifest
error.
"Base Rate" means, the rate of interest announced from time to time
within Xxxxx Fargo at its principal office in San Francisco as its "prime rate",
with the understanding that the "prime rate" is one of Xxxxx Fargo's base rates
(not necessarily the lowest of such rates) and serves as the basis upon which
effective rates of interest are calculated for those loans making reference
thereto and is evidenced by the recording thereof after its announcement in such
internal publication or publications as Xxxxx Fargo may designate.
"Base Rate Loan" means each portion of an Advance or the Term Loans
that bears interest at a rate determined by reference to the Base Rate.
"Base Rate Margin" means, subject to reduction pursuant to Section
2.6(g), 1.00% per annum.
"Base Rate Term Loan A Margin" means, subject to reduction pursuant to
Section 2.6(g), 2.00% per annum.
"Base Rate Term Loan B Margin" means 3.00% per annum.
"Base Rate Term Loan C Margin" means 4.75% per annum.
"Benefit Plan" means a "defined benefit plan" (as defined in Section
3(35) of ERISA) for which any Loan Party or any Subsidiary or ERISA Affiliate of
any Loan Party has been an "employer" (as defined in Section 3(5) of ERISA)
within the past six years.
"Board of Directors" means the board of directors (or comparable
managers) of Parent or any committee thereof duly authorized to act on behalf
thereof.
"Books" means, as to any Person, all of such Person's now owned or
hereafter acquired books and records (including all of its Records indicating,
summarizing, or evidencing its assets (including the Collateral) or liabilities,
all of such Person's Records relating to its or their business operations or
financial condition, and all of its or their goods or General Intangibles
related to such information).
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"Borrower" and "Borrowers" have the respective meanings set forth in
the preamble to this Agreement.
"Borrowing" means a borrowing hereunder consisting of Advances (or
term loans, in the case of the Term Loans) made on the same day by the Lenders
(or Agent on behalf thereof), or by Swing Lender in the case of a Swing Loan, or
by Agent in the case of an Agent Advance.
"Borrowing Base" has the meaning set forth in Section 2.1(a).
"Business Day" means any day that is not a Saturday, Sunday, or other
day on which national banks are authorized or required to close in the State of
New York, except that, if a determination of a Business Day shall relate to a
LIBOR Rate Loan, the term "Business Day" also shall exclude any day on which
banks are closed for dealings in Dollar deposits in the London interbank market.
"Capital Expenditures" means, with respect to Parent and its
Subsidiaries for any period, the sum of (i) the aggregate of all expenditures by
Parent and its Subsidiaries during such period that in accordance with GAAP are
or should be included in "property, plant and equipment" or in a similar fixed
asset account on its balance sheet, whether such expenditures are paid in cash
or financed and including all Capitalized Lease Obligations paid or payable
during such period, and (ii) to the extent not covered by clause (i) above, the
aggregate of all expenditures by Parent and its Subsidiaries during such period
to acquire by purchase or otherwise the business or fixed assets of, or the
capital Stock of, any other Person.
"Capital Lease" means a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP.
"Capitalized Lease Obligation" means that portion of the obligations
under a Capital Lease that is required to be capitalized in accordance with
GAAP.
"Cash Collateral Account" means an account maintained by one or more
Loan Parties with a bank reasonably acceptable to Agent subject to the terms of
a Control Agreement.
"Cash Equivalents" means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States or issued by any agency thereof
and backed by the full faith and credit of the United States, in each case
maturing within 1 year from the date of acquisition thereof, (b) marketable
direct obligations issued by any state of the United States or any political
subdivision of any such state or any public instrumentality thereof maturing
within 1 year from the date of acquisition thereof and, at the time of
acquisition, having the highest rating obtainable from either S&P or Xxxxx'x,
(c) commercial paper maturing no more than 270 days from the date of acquisition
thereof and, at the time of acquisition, having a rating of A-1 or P-1, or
better, from S&P or Xxxxx'x, and (d) certificates of deposit or bankers'
acceptances maturing within 1 year from the date of acquisition thereof either
(i) issued by any bank organized under the laws of the United States or any
state thereof which bank has a rating of A or A2, or better, from S&P or
Xxxxx'x, or (ii) certificates of deposit less than or equal to $100,000 in the
aggregate issued by any other bank insured by the Federal Deposit Insurance
Corporation.
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"Cash Management Account" has the meaning set forth in Section 2.7(a).
"Cash Management Agreements" means those certain cash management
service agreements, in form and substance satisfactory to Agent, each of which
is among a Loan Party, Agent, and one of the Cash Management Banks.
"Cash Management Bank" has the meaning set forth in Section 2.7(a).
"CCC Indemnity Agreement" means that certain General Agreement of
Indemnity, dated December 9, 2002, made by the Parent and the Principals in
favor of Continental Casualty Company.
"Change of Control" means (a) any "person" or "group" (within the
meaning of Sections 13(d) and 14(d) of the Exchange Act), other than a Permitted
Holder, becomes the beneficial owner (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of 10%, or more, of the Stock of Parent
having the right to vote for the election of members of the Board of Directors,
or (b) a majority of the members of the Board of Directors do not constitute
Continuing Directors, or (c) Parent ceases to own and control, directly or
indirectly, at least the same percentage of the outstanding capital Stock of
each of its Subsidiaries extant as of the Closing Date, or (d) a "Change of
Control" occurs under any Indenture Document, or (e) any two of the Principals
shall cease to be involved in the day to day operations and management of the
business of Parent and its Subsidiaries, and successors reasonably acceptable to
Agent and Lenders are not appointed on terms reasonably acceptable to Agent and
Lenders within 30 days of such cessation of involvement.
"Closing Date" means the date of the making of the initial Advance (or
other extension of credit) hereunder.
"Closing Date Business Plan" means the set of Projections of Parent
and its Subsidiaries for the calendar years 2003, 2004 and 2005 (on a year by
year basis, and for the calendar year 2003, on a month by month basis), in form
and substance (including as to scope and underlying assumptions) satisfactory to
Agent.
"Code" means the New York Uniform Commercial Code, as in effect from
time to time.
"Collateral" means all assets and property of each Loan Party,
including all of each Loan Party's now owned or hereafter acquired right, title,
and interest in and to each of the following:
Accounts,
Books,
Equipment,
General Intangibles and DDAs,
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Inventory,
Investment Property, provided that only 65% of the shares of capital Stock of
each Loan Party's Subsidiaries organized outside of the United States shall be
included in the Collateral,
Negotiable Collateral,
Real Property Collateral,
money or other assets of each such Loan Party that now or hereafter come into
the possession, custody, or control of any member of the Lender Group, and
the proceeds and products, whether tangible or intangible, of any of the
foregoing, including proceeds of insurance covering any or all of the foregoing,
and any and all Accounts, Books, Equipment, General Intangibles, Inventory,
Investment Property, Negotiable Collateral, Real Property, money, deposit
accounts, or other tangible or intangible property resulting from the sale,
exchange, collection, or other disposition of any of the foregoing, or any
portion thereof or interest therein, and the proceeds thereof.
"Collateral Access Agreement" means a landlord waiver, bailee letter,
or acknowledgement agreement of any lessor, warehouseman, processor, consignee,
or other Person in possession of, having a Lien upon, or having rights or
interests in the Equipment or Inventory, or the premises on which such Equipment
or Inventory is located, in each case, in form and substance satisfactory to
Agent.
"Collateral Assignment of Commercial Tort Claim" has the meaning set
forth in Section 4.4(b).
"Collateral Assignment of Key Man Life Insurance Policy" means a
collateral assignment of life insurance, in form and substance satisfactory to
Agent, executed and delivered by Parent with respect to the collateral
assignment by Parent of a Key Man Life Insurance Policy.
"Collections" means all cash, checks, notes, instruments, and other
items of payment (including insurance proceeds, proceeds of cash sales, rental
proceeds, and tax refunds) of any Loan Party.
"Commitment" means, with respect to each Lender, its Revolver
Commitment, its Term Loan A Commitment, its Term Loan B Commitment, its Term
Loan C Commitment or its Total Commitment, as the context requires, and, with
respect to all Lenders, their Revolver Commitments, their Term Loan A
Commitments, their Term Loan B Commitments, their Term Loan C Commitments or
their Total Commitments, as the context requires, in each case as such Dollar
amounts are set forth beside such Lender's name under the applicable heading on
Schedule C-1 or in the Assignment and Acceptance pursuant to which such Lender
became a Lender hereunder in accordance with the provisions of Section 14.1.
"Compliance Certificate" means a certificate substantially in the form
of Exhibit C-1 delivered by an Authorized Officer of Parent to Agent.
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"Consolidated Net Income" means, for any period, without duplication,
net income (or loss) for the applicable period of measurement of Parent and its
Subsidiaries on a consolidated basis determined in accordance with GAAP, but
excluding: (a) non-cash gains and losses from the sale, exchange, transfer or
other disposition of property or assets not in the ordinary course of business
of Parent and its Subsidiaries, and related tax effects; and (b) any other
extraordinary or non-recurring non-cash gains and losses of Parent or its
Subsidiaries, and related tax effects.
"Continuing Director" means (a) any member of the Board of Directors
who was a director (or comparable manager) of Parent on the Closing Date, and
(b) any individual who becomes a member of the Board of Directors after the
Closing Date if such individual was appointed or nominated for election to the
Board of Directors by a majority of the Continuing Directors, but excluding any
such individual originally proposed for election in opposition to the Board of
Directors in office at the Closing Date in an actual or threatened election
contest relating to the election of the directors (or comparable managers) of
Parent (as such terms are used in Rule 14a-11 under the Exchange Act) and whose
initial assumption of office resulted from such contest or the settlement
thereof.
"Contribution Agreement" means a contribution agreement executed and
delivered by each Loan Party, the form and substance of which is satisfactory to
Agent.
"Control Agreement" means a control agreement, in form and substance
satisfactory to Agent, executed and delivered by a Loan Party, Agent, and the
applicable securities intermediary with respect to a Securities Account or a
bank with respect to a DDA or a Cash Collateral Account.
"Copyright Security Agreement" means a copyright security agreement
executed and delivered by each Loan Party and Agent, the form and substance of
which is satisfactory to Agent.
"Credit Facility Deficit" has the meaning set forth in Section
2.1(c)(i).
"Credit Facility Obligations" means, as of the date of any Borrowing
or the issuance of any Letter of Credit, that portion of the sum of the Revolver
Usage and the aggregate principal amount of the Term Loans that does not
constitute Senior Credit Facility Obligations.
"Daily Balance" means, for any Obligation, with respect to each day
during the term of this Agreement, the amount of such Obligation owed at the end
of such day.
"DDA" means any deposit account maintained by any Loan Party.
"Default" means an event, condition, or default that, with the giving
of notice, the passage of time, or both, would be an Event of Default.
"Defaulting Lender" means any Lender that fails to make any Advance
(or other extension of credit) that it is required to make hereunder on the date
that it is required to do so hereunder.
- 8 -
"Defaulting Lender Rate" means (a) the Base Rate for the first 3 days
from and after the date the relevant payment is due, and (b) thereafter, at the
interest rate then applicable to Advances that are Base Rate Loans (inclusive of
the Base Rate Margin applicable thereto).
"Designated Account" means that certain DDA of Administrative Borrower
identified on Schedule D-1.
"Designated Account Bank" has the meaning set forth on Schedule D-1.
"Dilution" means, as of any date of determination, a percentage, based
upon the experience of the immediately prior 90 days, that is the result of
dividing the Dollar amount of (a) bad debt write-downs, discounts, advertising
allowances, credits, or other dilutive items with respect to the Borrowers'
Accounts (other than Xxxxxxx and Xxxxxxxx Company's Accounts) during such
period, by (b) the Borrowers' xxxxxxxx (other than Xxxxxxx and Xxxxxxxx
Company's xxxxxxxx) with respect to Accounts during such period (excluding
extraordinary items).
"Dilution Reserve" means, as of any date of determination, an amount
sufficient to reduce the advance rates against Eligible Accounts by one
percentage point for each percentage point by which Dilution is in excess of 5%.
"Disbursement Letter" means an instructional letter executed and
delivered by Administrative Borrower to Agent regarding the extensions of credit
to be made on the Closing Date, the form and substance of which is satisfactory
to Agent.
"Dollars" or "$" means United States dollars.
"Dollar Equivalent" shall mean with respect to a Letter of Credit the
amount in Dollars (i) which is stated to be paid in Dollars under the Letter of
Credit, and (ii) which is equivalent to the amount paid or to be paid in a
currency other than Dollars under the Letter of Credit computed at the Agent's
then current selling rate of exchange, as reasonably determined by Agent, for
payment by teletransmission or otherwise to the place of payment in the currency
in which payment is to be made under the Letter of Credit, plus any costs,
premiums, and expenses arising from all currency conversions incurred by Agent
in connection therewith.
"Due Diligence Letter" means the due diligence letter sent by Agent's
counsel to Administrative Borrower, together with Administrative Borrower's
completed responses to the inquiries set forth therein, the form and substance
of such responses to be satisfactory to Agent.
"EBITDAP" means, with respect to any fiscal period, without
duplication, Parent's and its Subsidiaries' Consolidated Net Income, minus
extraordinary cash gains and non-cash pension income, plus interest expense,
income taxes, depreciation and amortization, non-cash pension expense, costs or
expenses paid by Borrowers in connection with Enterprise Valuations and
appraisals of Inventory, Equipment and Real Property Collateral pursuant to this
Agreement for such period, and the annual and servicing fees payable to Agent
pursuant to the Fee Letter for such period, as determined in accordance with
GAAP.
"EBITDAP Deficit" has the meaning set forth in Section 2.1(c)(ii).
- 9 -
"Eligible Accounts" means those Accounts created by any Borrower
(other than Xxxxxxx & Xxxxxxxx Company) in the ordinary course of its business,
that arise out of its sale of goods or rendition of services, that comply with
each of the representations and warranties respecting Eligible Accounts made
under the Loan Documents, and that are not excluded as ineligible by virtue of
one or more of the criteria set forth below; provided, however, that such
criteria may be fixed and revised from time to time by Agent in Agent's
Permitted Discretion to address the results of any audit performed by Agent from
time to time after the Closing Date. In determining the amount to be included,
Eligible Accounts shall be calculated net of customer deposits and unapplied
cash remitted to Borrowers. Eligible Accounts shall not include the following:
1. Accounts (i) that the Account Debtor has failed to pay
within 90 days of original invoice date or (ii) with selling terms of more than
90 days,
2. Accounts owed by an Account Debtor (or its Affiliates) where
50% or more of all Accounts owed by that Account Debtor (or its Affiliates) are
deemed ineligible under clause (a) above,
3. Accounts with respect to which the Account Debtor is an
employee, Affiliate, or agent of Parent or any of its Subsidiaries,
4. Accounts arising in a transaction wherein goods are placed
on consignment or are sold pursuant to a guaranteed sale, a sale or return, a
sale on approval, a xxxx and hold, or any other terms by reason of which the
payment by the Account Debtor may be conditional,
5. Accounts that are not payable in Dollars or Canadian
dollars,
6. Accounts with respect to which the Account Debtor either (i)
does not maintain its chief executive office in the United States or Canada, or
(ii) is not organized under the laws of the United States or any state thereof
or Canada or any province thereof, or (iii) is the government of any foreign
country or foreign sovereign state, or of any state, province, municipality, or
other political subdivision thereof, or of any department, agency, public
corporation, or other instrumentality thereof, unless (y) the Account is
supported by an irrevocable letter of credit satisfactory to Agent (as to form,
substance, and issuer or domestic confirming bank) that has been delivered to
Agent and is directly drawable by Agent, or (z) the Account is covered by credit
insurance in form, substance, and amount, and by an insurer, satisfactory to
Agent; provided, that the maximum aggregate amount of Availability supported by
Accounts with respect to which the Account Debtor maintains its chief executive
office in, or is organized under the laws of, Canada, and are not supported by
irrevocable letters of credit or credit insurance, from an issuer acceptable to
Agent and payable only in the United States and in Dollars, sufficient to cover
such Accounts, shall not exceed $1,000,000,
7. Accounts with respect to which the Account Debtor is either
(i) the United States, Canada, or any department, agency, or instrumentality of
the United States or Canada (exclusive, however, of Accounts with respect to
which the applicable Borrower has complied, to the reasonable satisfaction of
Agent, with the Assignment of Claims Act, 31 USC Section
- 10 -
3727), or (ii) any state of the United States or any province of Canada
(exclusive, however, of (y) Accounts owed by any state that does not have a
statutory counterpart to the Assignment of Claims Act or (z) Accounts owed by
any state that does have a statutory counterpart to the Assignment of Claims Act
as to which the applicable Borrower has complied to Agent's satisfaction),
8. Accounts with respect to which the Account Debtor is a
creditor of Parent or any of its Subsidiaries, has or has asserted a right of
setoff, has disputed its liability, or has made any claim with respect to its
obligation to pay the Account, to the extent of such claim, right of setoff, or
dispute,
9. Accounts with respect to an Account Debtor whose total
obligations owing to all Borrowers (including Xxxxxxx & Xxxxxxxx Company) exceed
10% (such percentage as applied to a particular Account Debtor being subject to
reduction by Agent in its Permitted Discretion if the creditworthiness of such
Account Debtor deteriorates) of all Eligible Accounts and R&S Eligible Accounts,
to the extent of the obligations owing by such Account Debtor in excess of such
percentage,
10. Accounts with respect to which the Account Debtor is subject
to an Insolvency Proceeding, is not Solvent, has gone out of business, or as to
which a Borrower has received notice of an imminent Insolvency Proceeding or a
material impairment of the financial condition of such Account Debtor,
11. Accounts with respect to which the Account Debtor is located
in the states of New Jersey, Minnesota, or West Virginia (or any other state
that requires a creditor to file a business activity report or similar document
in order to bring suit or otherwise enforce its remedies against such Account
Debtor in the courts or through any judicial process of such state), unless the
applicable Loan Party has qualified to do business in New Jersey, Minnesota,
West Virginia, or such other states, or has filed a business activities report
with the applicable division of taxation, the department of revenue, or with
such other state offices, as appropriate, for the then-current year, or is
exempt from such filing requirement,
12. Accounts, the collection of which, Agent, in its Permitted
Discretion, believes to be doubtful by reason of the Account Debtor's financial
condition,
13. Accounts that are not subject to a valid and perfected first
priority Agent's Xxxx,
00. Accounts with respect to which (i) the goods giving rise to
such Account have not been shipped and billed to the Account Debtor, or (ii) the
services giving rise to such Account have not been performed and billed to the
Account Debtor,
15. Accounts that represent the right to receive progress
payments or other advance xxxxxxxx that are due prior to the completion of
performance by the applicable Borrower of the subject contract for goods or
services, or
16. Accounts arising from the rendition of services or the sale
of goods arising under any contract referred to in, described in or supported by
any surety agreement,
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undertaking or instrument of guarantee signed by a bonding company or other
surety on behalf of any Borrower.
"Eligible Equipment" means Equipment of each Borrower located at one
of the business locations of Borrowers set forth on Schedule E-1, that complies
with each of the representations and warranties respecting Eligible Equipment
made by Borrowers in the Loan Documents, and that is not excluded as ineligible
by virtue of the one or more of the criteria set forth below; provided, however,
that such criteria may be fixed and revised from time to time by Agent in
Agent's Permitted Discretion to address the results of any audit or appraisal
performed by Agent from time to time after the Closing Date. In determining the
amount to be included, Equipment shall be valued based upon the Appraised Value
of such Equipment. An item of Equipment shall not be included in Eligible
Equipment if:
1. a Borrower does not have good, valid, and marketable title thereto,
17. it is not located at one of the locations in the United
States set forth on Schedule E-1,
18. it is located on real property leased by a Borrower, unless
(i)(A) it is subject to a Collateral Access Agreement executed by the lessor, or
other third party, as the case may be, or (B) Agent has instituted a reserve
equal to the rental costs under the applicable lease with respect to such
location for a 3 month period, and (ii) it is segregated or otherwise separately
identifiable from goods of others, if any, stored on the premises,
19. it is not subject to a valid and perfected first priority
Agent's Xxxx,
00. it is substantially worn, damaged, defective or obsolete, or
it constitutes furnishings, parts, fixtures or is affixed to real property,
unless such Equipment is affixed to Real Property that comprises Real Property
Collateral,
21. the Agent has not received evidence of the property
insurance required by this Agreement with respect to such Equipment, or
22. it is subject to a lease with any Person.
"Eligible Inventory" means Inventory of Borrowers consisting of good
and merchantable finished goods held for sale in the ordinary course of
Borrowers' business and raw materials located at one of the business locations
of Borrowers set forth on Schedule E-2 (or in transit between any such
locations), that complies with each of the representations and warranties
respecting Eligible Inventory made under the Loan Documents, and that is not
excluded as ineligible by virtue of the one or more of the criteria set forth
below; provided, however, that such criteria may be fixed and revised from time
to time by Agent in Agent's Permitted Discretion to address the results of any
audit or appraisal performed by Agent from time to time after the Closing Date.
In determining the amount to be included, Inventory shall be valued at the lower
of cost or market on a basis consistent with Borrowers' historical accounting
practices. An item of Inventory shall not be included in Eligible Inventory if:
2. a Borrower does not have good, valid, and marketable title thereto,
- 12 -
23. it is not located at one of the locations in the United
States set forth on Schedule E-2, or in transit from one such location to
another such location (provided that the aggregate book value of Inventory in
transit from one such location to another such location and otherwise
constituting Eligible Inventory shall in no event exceed $1,000,000),
24. it is located on real property leased by a Borrower or in a
contract warehouse, in each case, unless (i)(A) it is subject to a Collateral
Access Agreement executed by the lessor, warehouseman, or other third party, as
the case may be, or (B) Agent has instituted a reserve equal to the rental costs
under the applicable lease with respect to such location for a 3 month period,
and (ii) it is segregated or otherwise separately identifiable from goods of
others, if any, stored on the premises,
25. it is not subject to a valid and perfected first priority
Agent's Xxxx,
00. it consists of goods returned or rejected by a Borrower's
customers,
27. it consists of goods that are obsolete or slow moving,
restrictive or custom items (unless such custom items are produced by a Borrower
in the ordinary course of business pursuant to a purchase order from a
customer), work-in-process, or goods that constitute spare parts, packaging and
shipping materials, supplies used or consumed in a Borrower's business, xxxx and
hold goods, defective goods, or Inventory acquired on consignment, or
28. it consists of goods that are sold on consignment, unless
(i) the consignee thereof has executed and delivered a Collateral Access
Agreement, (ii) the consignor thereof has filed an appropriate UCC financing
statement with respect thereto, (iii) the Agent receives evidence satisfactory
to it (in its Permitted Discretion) that such goods shall not be subject to any
other Lien in favor of any other Person (including any Lien in favor of a
creditor of the applicable consignee), and (iv) the Agent is satisfied with the
financial condition of the applicable consignee.
"Eligible Real Property Collateral" has the meaning set forth in
Section 3.1(s).
"Eligible Transferee" means (a) a commercial bank organized under the
laws of the United States, or any state thereof, and having total assets in
excess of $250,000,000, (b) a commercial bank organized under the laws of any
other country which is a member of the Organization for Economic Cooperation and
Development or a political subdivision of any such country and which has total
assets in excess of $250,000,000, provided that such bank is acting through a
branch or agency located in the United States, (c) a finance company, insurance
company, or other financial institution or fund that is engaged in making,
purchasing, or otherwise investing in commercial loans in the ordinary course of
its business and having (together with its Affiliates) total assets in excess of
$250,000,000, (d) any Affiliate (other than individuals) of a Lender that was
party hereto as of the Closing Date, including a fund or account managed by such
Lender or an Affiliate of such Lender or its investment manager (a "Related
Fund"), (e) so long as no Event of Default has occurred and is continuing, any
other Person approved by Agent and Administrative Borrower (which approval by
Administrative Borrower shall not be unreasonably withheld, delayed or
conditioned), and (f) during the continuation of an Event of Default, any other
Person approved by Agent.
- 13 -
"Enterprise Valuation" means an "enterprise valuation" performed by an
appraisal company selected by the Lender Group and using a methodology
satisfactory to Lender Group.
"Enterprise Value" means the "enterprise value" of the Loan Parties as
determined by Lender Group based on an Enterprise Valuation.
"Environmental Actions" means any complaint, summons, citation,
notice, directive, order, claim, litigation, investigation, judicial or
administrative proceeding, judgment, letter, or other communication from any
Governmental Authority, or any third party involving violations of Environmental
Laws or releases of Hazardous Materials (a) from any assets, properties, or
businesses of any Loan Party or any predecessor in interest, (b) from adjoining
properties or businesses, or (c) from or onto any facilities which received
Hazardous Materials generated by any Loan Party or any predecessor in interest.
"Environmental Law" means any applicable federal, state, provincial,
foreign or local statute, law, rule, regulation, ordinance, code, binding and
enforceable guideline, binding and enforceable written policy, or rule of common
law now or hereafter in effect and in each case as amended, or any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, to the extent binding on any Loan Party,
relating to the environment, employee health and safety, or Hazardous Materials,
including CERCLA; RCRA; the Federal Water Pollution Control Act, 33 USC Section
1251 et seq.; the Toxic Substances Control Act, 15 USC, Section 2601 et seq.;
the Clean Air Act, 42 USC Section 7401 et seq.; the Safe Drinking Water Act, 42
USC. Section 3803 et seq.; the Oil Pollution Act of 1990, 33 USC. Section 2701
et seq.; the Emergency Planning and the Community Right-to-Know Act of 1986, 42
USC. Section 11001 et seq.; the Hazardous Material Transportation Act, 49 USC
Section 1801 et seq.; and the Occupational Safety and Health Act, 29 USC.
Section 651 et seq. (to the extent it regulates occupational exposure to
Hazardous Materials); any federal, state, local or foreign counterparts or
equivalents thereof, in each case as amended from time to time.
"Environmental Liabilities and Costs" means all liabilities, monetary
obligations, Remedial Actions, losses, damages, punitive damages, consequential
damages, treble damages, costs and expenses (including all reasonable fees,
disbursements and expenses of counsel, experts, or consultants, and costs of
investigation and feasibility studies), fines, penalties, sanctions, and
interest incurred as a result of any claim or demand by any Governmental
Authority or any third party, and which relate to any Environmental Action.
"Environmental Lien" means any Lien in favor of any Governmental
Authority for Environmental Liabilities and Costs.
"Equipment" means, with respect to any Person, all of such Person's
now owned or hereafter acquired right, title, and interest with respect to
equipment, machinery, machine tools, motors, furniture, furnishings, fixtures,
vehicles (including motor vehicles), tools, parts, goods (other than consumer
goods, farm products, or Inventory), wherever located, including all
attachments, accessories, accessions, replacements, substitutions, additions,
and improvements to any of the foregoing.
- 14 -
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto.
"ERISA Affiliate" means (a) any Person subject to ERISA whose
employees are treated as employed by the same employer as the employees of a
Loan Party under IRC Section 414(b), (b) any trade or business subject to ERISA
whose employees are treated as employed by the same employer as the employees of
a Loan Party under IRC Section 414(c), (c) solely for purposes of Section 302 of
ERISA and Section 412 of the IRC, any organization subject to ERISA that is a
member of an affiliated service group of which a Loan Party is a member under
IRC Section 414(m), or (d) solely for purposes of Section 302 of ERISA and
Section 412 of the IRC, any Person subject to ERISA that is a party to an
arrangement with a Loan Party and whose employees are aggregated with the
employees of a Loan Party under IRC Section 414(o).
"ERISA Event" means (a) a Reportable Event with respect to any Benefit
Plan or Multiemployer Plan, (b) the withdrawal of a Loan Party, any of its
Subsidiaries or any of its ERISA Affiliates from a Benefit Plan during a plan
year in which it was a "substantial employer" (as defined in Section 4001(a)(2)
of ERISA), (c) the providing of notice of intent to terminate a Benefit Plan in
a distress termination (as described in Section 4041(c) of ERISA), (d) the
institution by the PBGC of proceedings to terminate a Benefit Plan or
Multiemployer Plan, (e) any event or condition (i) that provides a basis under
Section 4042(a)(1), (2), or (3) of ERISA for the termination of, or the
appointment of a trustee to administer, any Benefit Plan or Multiemployer Plan,
or (ii) that may result in termination of a Multiemployer Plan pursuant to
Section 4041A of ERISA, (f) the partial or complete withdrawal within the
meaning of Sections 4203 and 4205 of ERISA, of a Loan Party, any of its
Subsidiaries or ERISA Affiliates from a Multiemployer Plan, (g) providing any
security to any Plan under Section 401(a)(29) of the IRC by a Loan Party or its
Subsidiaries or any of their ERISA Affiliates or (h) any equivalent event,
action, condition, proceeding or otherwise under any federal, state, local or
foreign counterparts or equivalents thereof, in each case as amended from time
to time.
"Event of Default" has the meaning set forth in Section 8.
"Excess Availability" means the amount, as of the date any
determination thereof is to be made, equal to Availability minus the aggregate
amount, if any, of all trade payables of Parent and its Subsidiaries aged in
excess of their historical levels with respect thereto and all book overdrafts
in excess of their historical practices with respect thereto, in each case as
determined by Agent in its Permitted Discretion.
"Excess Cash Flow" means, for any fiscal period of Parent, without
duplication, (i) Consolidated Net Income for such period, plus (ii) all non-cash
charges of Parent and its Subsidiaries deducted in arriving at such Consolidated
Net Income for such period, less (iii) all non-cash credits of Parent and its
Subsidiaries included in arriving at such Consolidated Net Income for such
period, less (iv) all scheduled and mandatory cash principal payments on the
Advances and Term Loans made during such period (but, in the case of the
Advances, only to the extent that the Revolver Commitment is permanently reduced
by the amount of such payments), and all scheduled cash principal payments on
other Indebtedness of Parent or any of its Subsidiaries during such period to
the extent such other Indebtedness is permitted to be
- 15 -
incurred, and such payments are permitted to be made, under this Agreement, less
(v) the cash portion of net Capital Expenditures made by Parent and its
Subsidiaries during such period to the extent permitted to be made under this
Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as in effect
from time to time.
"Existing Lender" means PNC Bank, National Association, as agent for
certain lenders.
"Extraordinary Receipts" means any Collections received by the Parent
or any of its Subsidiaries not in the ordinary course of business (and not
consisting of proceeds described in Section 2.4(c)(viii) hereof), including, (i)
foreign, United States, state or local tax refunds, (ii) pension plan
reversions, (iii) proceeds of insurance (including proceeds of the Key Man Life
Insurance Policies, except to the extent otherwise applied in accordance with
Section 7.11), (iv) judgments, proceeds of settlements or other consideration of
any kind in connection with any cause of action, (v) condemnation awards (and
payments in lieu thereof), (vi) indemnity payments and (vii) any purchase price
adjustment received in connection with any purchase agreement.
"Family Member" means, with respect to any individual, any other
individual having a relationship by blood (to the second degree of
consanguinity), marriage, or adoption to such individual.
"Family Trusts" means, with respect to any individual, trusts or other
estate planning vehicles established for the benefit of Family Members of such
individual and in respect of which such individual serves as trustee or in a
similar capacity.
"Fee Letter" means that certain fee letter, dated as of even date
herewith, among Borrowers and Agent, in form and substance satisfactory to
Agent.
"FEIN" means Federal Employer Identification Number.
"Fiscal Year" means the fiscal year of Parent and its Subsidiaries
ending on December 31 of each calendar year.
"Foothill" means Foothill Capital Corporation, a California
corporation.
"Foreign Subsidiary" means any direct or indirect Subsidiary of Parent
that is not organized under the laws of the United States or any state thereof.
"Funding Date" means the date on which a Borrowing occurs.
"Funding Losses" has the meaning set forth in Section 2.13(b)(ii).
"GAAP" means generally accepted accounting principles in effect from
time to time in the United States, consistently applied, provided that for the
purpose of Section 7.20 and the definitions used therein, "GAAP" shall mean
generally accepted accounting principles in
- 16 -
effect on the date hereof and consistent with those used in the preparation of
the financial statements delivered by Borrowers pursuant to Section 6.3,
provided, further, that if there occurs after the date of this Agreement any
change in GAAP that affects in any respect the calculation of any covenant
contained in Section 7.20, Lender Group and Parent shall negotiate in good faith
amendments to the provisions of this Agreement that relate to the calculation of
such covenant with the intent of having the respective positions of Lenders and
Borrowers after such change in GAAP conform as nearly as possible to their
respective positions as of the date of this Agreement and, until any such
amendments have been agreed upon, the covenants in Section 7.20 shall be
calculated as if no such change in GAAP has occurred.
"General Intangibles" means, with respect to any Person, all of such
Person's now owned or hereafter acquired right, title, and interest with respect
to general intangibles (including Intellectual Property, payment intangibles,
contract rights, rights to payment, judgments, rights arising under common law,
statutes, or regulations, choses or things in action, goodwill, designs,
inventions, trade secrets, d/b/a's, Internet domain names, logos, blueprints,
drawings, purchase orders, customer lists, monies due or recoverable from
pension funds, route lists, rights to payment and other rights under any royalty
or licensing agreements, computer programs, information contained on computer
disks or tapes, software, literature, reports, catalogs, insurance premium
rebates, tax refunds, and tax refund claims), and any and all supporting
obligations in respect thereof, and any other personal property other than
goods, Accounts, DDAs, Investment Property, and Negotiable Collateral.
"Governing Documents" means, with respect to any Person, the
certificate or articles of incorporation, by-laws, or other organizational
documents of such Person.
"Governmental Authority" means any federal, state, local, or other
governmental or administrative body (including the federal government of Canada,
or any province or other authority thereof), instrumentality, department, or
agency or any court, tribunal, administrative hearing body, arbitration panel,
commission, or other similar dispute-resolving panel or body.
"Guarantor" means each Person that guarantees, pursuant to Section
6.18 or otherwise, all or any part of the Obligations.
"Guaranty" means a general continuing guaranty executed and delivered
by a Guarantor in favor of Agent, for the benefit of the Lender Group, in form
and substance satisfactory to Agent.
"Hazardous Materials" means (a) substances that are defined or listed
in, or otherwise classified pursuant to, any applicable laws or regulations as
"hazardous substances," "hazardous materials," "hazardous wastes," "toxic
substances," or any other formulation intended to define, list, or classify
substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or "EP
toxicity", (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any
- 17 -
oil or dielectric fluid containing levels of polychlorinated biphenyls in excess
of 50 parts per million.
"Hedge Agreement" means any and all transactions, agreements, or
documents now existing or hereafter entered into between Parent or its
Subsidiaries and (a) Xxxxx Fargo or its Affiliates, which provide for an
interest rate, credit, commodity or equity swap, cap, floor, collar, forward
foreign exchange transaction, currency swap, cross currency rate swap, currency
option, or any combination of, or option with respect to, these or similar
transactions, for the purpose of hedging Administrative Borrower's or its
Subsidiaries' exposure to fluctuations in interest or exchange rates, loan,
credit exchange, security or currency valuations or commodity prices or (b) any
other Person, which provide for an interest rate swap, forward foreign exchange
transaction or currency swap, secured by one or more L/Cs (but not by any other
property or assets of any Loan Party or any of its Subsidiaries), for the
purpose of hedging Administrative Borrower's or its Subsidiaries' exposure to
fluctuations in interest or exchange rates or currency valuations.
"Inactive Subsidiary" means each of the Subsidiaries of Parent
identified on Schedule I-1; provided, that the Parent may designate any Inactive
Subsidiary as a New Subsidiary for purposes of this Agreement by giving the
Agent written notice of such designation if (i) such designation would not cause
a Default or an Event of Default to occur and be continuing immediately after
such designation and (ii) the Loan Parties comply with the provisions of Section
6.18 with respect to the Inactive Subsidiary so designated.
"Indebtedness" means, without duplication, (a) all obligations for
borrowed money, (b) all obligations evidenced by bonds, debentures, notes, or
other similar instruments and all reimbursement or other obligations in respect
of letters of credit, bankers acceptances, interest rate swaps, or other
financial products, (c) all obligations under Capital Leases, (d) all
obligations or liabilities of others secured by a Lien on any asset of a Person
or its Subsidiaries, irrespective of whether such obligation or liability is
assumed, (e) all obligations to pay the deferred purchase price of assets (other
than trade payables incurred in the ordinary course of business and repayable in
accordance with customary trade practices), (f) all obligations owing under
Hedge Agreements, and (g) any obligation guaranteeing or intended to guarantee
(whether directly or indirectly guaranteed, endorsed, co-made, discounted, or
sold with recourse) any obligation of any other Person.
"Indemnified Liabilities" has the meaning set forth in Section 11.3.
"Indemnified Person" has the meaning set forth in Section 11.3.
"Indenture" means the Indenture, dated as of November 5, 1997, among
Parent, the Guarantors identified therein and the Indenture Trustee.
"Indenture Deficit" has the meaning set forth in Section 2.1(c)(iii).
"Indenture Documents" means the Indenture, the Senior Notes, and all
agreements, instruments and other documents delivered in connection with the
foregoing.
- 18 -
"Indenture Trustee" means Norwest Bank Minnesota, National
Association, as trustee under the Indenture, or any successor thereof.
"Insolvency Proceeding" means any proceeding commenced by or against
any Person under any provision of the Bankruptcy Code or under any other
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.
"Intellectual Property" means all foreign and domestic (i) trademarks,
service marks, brand names, certification marks, collective marks, d/b/a's,
Internet domain names, logos, symbols, trade dress, assumed names, fictitious
names, trade names, and other indicia of origin, all applications and
registrations for all of the foregoing, and all goodwill associated therewith
and symbolized thereby, including all extensions, modifications and renewals of
same; (ii) inventions, discoveries and ideas, whether patentable or not, and all
patents, registrations, and applications therefor, including divisions,
continuations, continuations-in-part and renewal applications, and including
renewals, extensions and reissues; (iii) confidential and proprietary
information, trade secrets and know-how, including processes, schematics,
databases, formulae, drawings, prototypes, models, designs and customer lists;
(iv) published and unpublished works of authorship, whether copyrightable or
not, copyrights therein and thereto, and registrations and applications
therefor, and all renewals, extensions, restorations and reversions thereof; and
(v) all other intellectual property or proprietary rights and claims or causes
of action arising out of or related to any infringement, misappropriation or
other violation of any of the foregoing, including rights to recover for past,
present and future violations thereof.
"Intercompany Subordination Agreement" means a subordination agreement
executed and delivered by the Loan Parties and Agent, the form and substance of
which is satisfactory to Agent.
"Interest Period" means, with respect to each LIBOR Rate Loan, a
period commencing on the date of the making of such LIBOR Rate Loan and ending
1, 2, 3 or 6 months thereafter; provided, however, that (a) if any Interest
Period would end on a day that is not a Business Day, such Interest Period shall
be extended (subject to clauses (c)-(e) below) to the next succeeding Business
Day, (b) interest shall accrue at the applicable rate based upon the LIBOR Rate
from and including the first day of each Interest Period to, but excluding, the
day on which any Interest Period expires, (c) any Interest Period that would end
on a day that is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Business Day, (d) with
respect to an Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period), the Interest Period shall
end on the last Business Day of the calendar month that is 1, 2, 3 or 6 months
after the date on which the Interest Period began, as applicable, and (e)
Borrowers (or Administrative Borrower on behalf thereof) may not elect an
Interest Period which will end after the Maturity Date.
"Inventory" means, with respect to any Person, such Person's now owned
or hereafter acquired right, title, and interest with respect to inventory,
including goods held for sale
- 19 -
or lease or to be furnished under a contract of service, goods that are leased
by such Person as lessor, goods that are furnished by such Person under a
contract of service, and raw materials, work in process, or materials used or
consumed in such Person's business.
"Inventory Reserves" means reserves (determined from time to time by
Agent in its Permitted Discretion) for (a) the estimated reclamation claims of
unpaid sellers of Inventory sold to Borrowers, as determined by Agent, plus (b)
the estimated rental costs for not more than a 3 month period for Inventory
locations for which Collateral Access Agreements are required, but have not been
received, as determined by Agent in its Permitted Discretion.
"Investment" means, with respect to any Person, any investment by such
Person in any other Person (including Affiliates) in the form of loans,
guarantees, advances, or capital contributions (excluding (a) commission,
travel, and similar advances to officers and employees of such Person made in
the ordinary course of business, and (b) bona fide Accounts arising in the
ordinary course of business consistent with past practices), purchases or other
acquisitions for consideration of Indebtedness or Stock, and any other items
that are or would be classified as investments on a balance sheet prepared in
accordance with GAAP.
"Investment Property" means, with respect to any Person, all of such
Person's now owned or hereafter acquired right, title, and interest with respect
to "investment property" as that term is defined in the Code, and any and all
supporting obligations in respect thereof.
"IRC" means the Internal Revenue Code of 1986, as in effect from time
to time.
"Issuing Lender" means Foothill or any other Lender that, at the
request of Administrative Borrower and with the consent of Agent, agrees, in
such Lender's sole discretion, to become an Issuing Lender for the purpose of
issuing L/Cs or L/C Undertakings pursuant to Section 2.12.
"Key Man Life Insurance Policy" means a life insurance policy on the
life of a Principal, for the benefit of Parent and assigned by Parent to Agent
pursuant to Section 3.1(aa), to the extent permitted by this Agreement.
"Key Man Agreement" means the agreement, dated as of the date hereof,
between Parent and Agent, regarding the application of proceeds of each Key Man
Life Insurance Policy.
"Leased Real Property" means any leasehold interests in real property
now held or hereafter acquired by a Loan Party and the improvements thereto.
"L/C" has the meaning set forth in Section 2.12(a).
"L/C Disbursement" means a payment made by the Issuing Lender pursuant
to a Letter of Credit.
"L/C Undertaking" has the meaning set forth in Section 2.12(a).
- 20 -
"Lender" and "Lenders" have the respective meanings set forth in the
preamble to this Agreement, and shall include any other Person made a party to
this Agreement in accordance with the provisions of Section 14.1.
"Lender Group" means, individually and collectively, each of the
Lenders (including the Issuing Lender) and Agent.
"Lender Group Expenses" means all (a) costs or expenses (including
taxes, and insurance premiums) required to be paid by a Borrower under any of
the Loan Documents that are paid or incurred by any one or more members of the
Lender Group, (b) fees or charges paid or incurred by any one or more members of
the Lender Group in connection with the Lender Group's transactions with any of
the Borrowers, including, fees or charges for photocopying, notarization,
couriers and messengers, telecommunication, public record searches (including
tax lien, judgment, UCC searches and including searches with the patent and
trademark office, the copyright office, or the department of motor vehicles),
filing, recording, publication, appraisal (including periodic Collateral
appraisals or business valuations to the extent of the fees and charges (and up
to the amount of any limitation) contained in this Agreement), real estate
surveys, real estate title policies and endorsements, and environmental audits,
(c) costs and expenses incurred by any one or more members of the Lender Group
in the disbursement of funds to or for the account of Borrowers (by wire
transfer or otherwise), (d) charges paid or incurred by any one or more members
of the Lender Group resulting from the dishonor of checks, (e) reasonable costs
and expenses paid or incurred by the Lender Group to correct any default or
enforce any provision of the Loan Documents, or in gaining possession of,
maintaining, handling, preserving, storing, shipping, selling, preparing for
sale, or advertising to sell the Collateral, or any portion thereof,
irrespective of whether a sale is consummated, (f) audit fees and expenses of
any one or more members of the Lender Group related to audit examinations of the
Books to the extent of the fees and charges (and up to the amount of any
limitation) contained in this Agreement, (g) reasonable costs and expenses of
third party claims or any other suit paid or incurred by any one or more members
of the Lender Group in enforcing or defending the Loan Documents or in
connection with the transactions contemplated by the Loan Documents or any one
or more members of the Lender Group's relationship with any Borrower or any
guarantor of the Obligations, (h) Agent's and each Lender's reasonable costs and
expenses (including attorneys' fees) incurred in advising, structuring,
drafting, reviewing, administering, or amending the Loan Documents, and (i)
Agent's and each Lender's reasonable costs and expenses (including attorneys',
accountants' and other advisors' fees and expenses) incurred in terminating,
enforcing (including attorneys' fees and expenses incurred in connection with a
"workout," a "restructuring," or an Insolvency Proceeding concerning any Loan
Party or in exercising rights or remedies under the Loan Documents), or
defending the Loan Documents, irrespective of whether suit is brought, or in
taking any Remedial Action concerning the Collateral.
"Lender-Related Person" means, with respect to any Lender, such
Lender, together with such Lender's Affiliates, and the officers, directors,
employees, and agents of such Lender.
"Letter of Credit" means an L/C or an L/C Undertaking, as the context
requires.
- 21 -
"Letter of Credit Usage" means, as of any date of determination, the
Dollar Equivalent of the aggregate undrawn amount of all outstanding Letters of
Credit plus 100% of the Dollar Equivalent of the amount of outstanding time
drafts accepted by an Underlying Issuer as a result of drawings under Underlying
Letters of Credit.
"LIBOR Deadline" has the meaning set forth in Section 2.13(b)(i).
"LIBOR Notice" means a written notice in the form of Exhibit L-1.
"LIBOR Option" has the meaning set forth in Section 2.13(a).
"LIBOR Rate" means, for each Interest Period for each LIBOR Rate Loan,
the rate per annum determined by Agent (rounded upwards, if necessary, to the
next 1/16%) by dividing (a) the Base LIBOR Rate for such Interest Period, by (b)
100% minus the Reserve Percentage. The LIBOR Rate shall be adjusted on and as of
the effective day of any change in the Reserve Percentage.
"LIBOR Rate Loan" means each portion of an Advance or the Term Loan A
that bears interest at a rate determined by reference to the LIBOR Rate.
"LIBOR Rate Margin" means, subject to reduction pursuant to Section
2.6(g), 4.25% per annum.
"LIBOR Rate Term Loan A Margin" means, subject to reduction pursuant
to Section 2.6(g), 5.25% per annum.
"Lien" means any interest in an asset securing an obligation owed to,
or a claim by, any Person other than the owner of the asset, whether such
interest shall be based on the common law, statute, or contract, whether such
interest shall be recorded or perfected, and whether such interest shall be
contingent upon the occurrence of some future event or events or the existence
of some future circumstance or circumstances, including the lien or security
interest arising from a mortgage, deed of trust, encumbrance, pledge,
hypothecation, assignment, deposit arrangement, security agreement, conditional
sale or trust receipt, or from a lease, consignment, or bailment for security
purposes and also including reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases, and other title
exceptions and encumbrances affecting Real Property.
"Loan Account" has the meaning set forth in Section 2.10.
"Loan Documents" means this Agreement, the Bank Product Agreements,
the Cash Management Agreements, the Contribution Agreement, the Collateral
Assignment of Commercial Tort Claim, the Collateral Assignments of Key Man Life
Insurance Policy, the Control Agreements, the Copyright Security Agreement, the
Disbursement Letter, the Due Diligence Letter, the Fee Letter, the Intercompany
Subordination Agreement, the Key Man Agreement, the Letters of Credit, the
Mortgages, the Officers' Certificate, the Patent Security Agreement, the Pledge
Agreement, the Shareholder Subordination Agreement, the Trademark Security
Agreement, any note or notes executed by a Borrower in connection with this
- 22 -
Agreement and payable to a member of the Lender Group, and any other agreement
entered into, now or in the future, by a Loan Party and the Lender Group in
connection with this Agreement.
"Loan Party" means any Borrower and any Guarantor.
"Material Adverse Change" means (a) a material adverse change in the
business, prospects, operations, results of operations, assets, liabilities or
condition (financial or otherwise) of (i) the Loan Parties taken as a whole or
(ii) the Borrowers comprising the "manufacturing products segment" taken as a
whole, (b) a material impairment of the ability of (i) the Loan Parties taken as
a whole or (ii) the Borrowers comprising the "manufacturing products segment"
taken as a whole, in each case, to perform their obligations under the Loan
Documents to which they are parties or of the Lender Group's ability to enforce
the Obligations or realize upon the Collateral, or (c) a material impairment of
the enforceability or priority of the Agent's Liens with respect to the
Collateral as a result of an action or failure to act on the part of a Loan
Party.
"Material Contract" means any agreement or contract of any Loan Party
or any Subsidiary of a Loan Party (other than (x) any agreement that by its
terms may be terminated by such Person upon 60 days' notice or less and (y) any
agreement for the rendition of engineering, procurement or construction related
services to be performed by a Loan Party, any Subsidiary of a Loan Party or any
subcontractor or third party engaged by a Loan Party or a Subsidiary of a Loan
Party) which (a) involves consideration to such Person of $500,000 or more in
any year, (b) involves consideration by such Person of $500,000 or more in any
year, (c) imposes financial obligations on such Person of $500,000 or more in
any year or (d) is otherwise material (or together with related agreements and
contracts, is material) to the business, prospects, operations, financial
condition, performance or properties of Parent and its Subsidiaries, taken as a
whole.
"Maturity Date" has the meaning set forth in Section 3.4.
"Maximum Revolver Amount" means $27,500,000.
"Mortgages" means, individually and collectively, one or more
mortgages, deeds of trust, or deeds to secure debt, executed and delivered by a
Loan Party in favor of Agent, in form and substance satisfactory to Agent, that
encumber the Real Property Collateral and the related improvements thereto.
"Multiemployer Plan" means a "multiemployer plan" (as defined in
Section 4001(a)(3) of ERISA) to which a Loan Party, any of its Subsidiaries, or
any ERISA Affiliate has contributed, or was obligated to contribute, within the
past six years.
"Negotiable Collateral" means, with respect to any Person, all of such
Person's now owned and hereafter acquired right, title, and interest with
respect to letters of credit, letter of credit rights, instruments, promissory
notes, drafts, documents, and chattel paper (including electronic chattel paper
and tangible chattel paper), and any and all supporting obligations in respect
thereof.
"Net Cash Proceeds" means, with respect to any sale or disposition by
any Person or any Subsidiary thereof of property or assets, the amount of
Collections received (directly or indirectly) from time to time (whether as
initial consideration or through the payment of deferred
- 23 -
consideration) by or on behalf of such Person or such Subsidiary, in connection
therewith after deducting therefrom only (i) the amount of any Indebtedness
secured by any Permitted Lien on any asset (other than (A) Indebtedness owing to
Agent or any Lender under this Agreement or the other Loan Documents and (B)
Indebtedness assumed by the purchaser of such asset) which is required to be,
and is, repaid in connection with such disposition, (ii) reasonable expenses
related thereto incurred by such Person or such Subsidiary in connection
therewith, and (iii) taxes paid or payable to any taxing authorities by such
Person or such Subsidiary in connection therewith, in each case to the extent,
but only to the extent, that the amounts so deducted are, at the time of receipt
of such cash, actually paid or payable to a Person that is not an Affiliate and
are properly attributable to such transaction.
"Net Liquidation Percentage" means the percentage of the book value of
a Borrower's Inventory that is estimated to be recoverable in an orderly
liquidation of such Inventory, such percentage to be as determined from time to
time by a qualified appraisal company selected by Agent.
"New Subsidiary " has the meaning set forth in Section 6.18.
"Obligations" means (a) all loans (including the Term Loans),
Advances, debts, principal, interest (including the Term Loan C PIK Amount)
(including any interest that, but for the provisions of the Bankruptcy Code,
would have accrued), contingent reimbursement obligations with respect to
outstanding Letters of Credit, premiums, liabilities (including all amounts
charged to the Loan Account pursuant hereto), obligations, fees (including the
fees provided for in the Fee Letter), charges, costs, Lender Group Expenses
(including any fees or expenses that, but for the provisions of the Bankruptcy
Code, would have accrued), lease payments, guaranties, covenants, and duties of
any kind and description owing by the Loan Parties to the Lender Group pursuant
to or evidenced by the Loan Documents and irrespective of whether for the
payment of money, whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising, and including all interest not
paid when due and all Lender Group Expenses that the Loan Parties are required
to pay or reimburse by the Loan Documents, by law, or otherwise, and (b) all
Bank Product Obligations. Any reference in this Agreement or in the Loan
Documents to the Obligations shall include all amendments, changes, extensions,
modifications, renewals replacements, substitutions, and supplements, thereto
and thereof, as applicable, both prior and subsequent to any Insolvency
Proceeding.
"Officers' Certificate" means the representations and warranties of
officers form submitted by Agent to Parent, together with Parent's completed
responses to the inquiries set forth therein, the form and substance of such
responses to be satisfactory to Agent.
"Operating Lease" means, with respect to any Person, any lease
(including leases which may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) which is not a Capital Lease other
than any such lease in which that Person is the lessor or sublessor.
"Originating Lender" has the meaning set forth in Section 14.1(e).
"Overadvance" has the meaning set forth in Section 2.5.
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"Owned Real Property" means any fee interests in real property now
owned or hereafter acquired by any Loan Party and the improvements thereto.
"Parent" has the meaning set forth in the preamble to this Agreement.
"Participant" has the meaning set forth in Section 14.1(e).
"Participant Register" has the meaning set forth in Section 14.1(i).
"Patent Security Agreement" means a patent security agreement executed
and delivered by each of the Loan Parties and Agent, the form and substance of
which is satisfactory to Agent.
"Pay-Off Letter" means a letter, in form and substance satisfactory to
Agent, from Existing Lender to Agent respecting the amount necessary to repay in
full all of the obligations of the Loan Parties owing to Existing Lender and to
obtain a release of all of the Liens existing in favor of Existing Lender in and
to the assets of the Loan Parties.
"PBGC" means the Pension Benefit Guaranty Corporation as defined in
Title IV of ERISA, or any successor thereto.
"Permitted Discretion" means a determination made in the exercise of
reasonable (from the perspective of a secured asset-based lender) business
judgment.
"Permitted Dispositions" means (a) provided no Default or Event of
Default shall have occurred and be continuing or would result from the
consummation of the proposed sale or other disposition, sales or other
dispositions by a Loan Party of Equipment that is substantially worn, damaged,
obsolete, or no longer useful to or needed for the business of such Loan Party
in the ordinary course of such Loan Party's business, provided that (i) the
gross sales price of such Equipment is not less than fair market value thereof,
(ii) at least 75% of the total consideration received by such Loan Party in
respect of such Equipment consists of cash, Cash Equivalents or checks and (iii)
such sale or other disposition does not cause the aggregate fair market value of
all such Equipment sold by all Loan Parties in any Fiscal Year to exceed
$500,000, (b) sales by a Loan Party or its Subsidiaries of Inventory to buyers
in the ordinary course of business, (c) the use or transfer of money or Cash
Equivalents by a Loan Party or its Subsidiaries in a manner that is not
prohibited by the terms of this Agreement or the other Loan Documents, and (d)
the licensing by a Loan Party or its Subsidiaries, on a non-exclusive basis, of
patents, trademarks, copyrights, and other intellectual property rights in the
ordinary course of such Person's business.
"Permitted Foreign Subsidiary Advances" means loans, advances or
transfers of cash in the ordinary course of business from a Loan Party to a
Foreign Subsidiary, so long as:
3. no Default or Event of Default exists at the time of the making of such
loan, advance, or transfer of cash or would exist after giving effect
thereto,
29. the Borrowers have aggregate Excess Availability of not less
than $3,000,000 both for the 30 consecutive day period immediately prior to the
date of such loan, advance or transfer of cash and immediately after giving
effect thereto,
- 25 -
30. both before and after giving effect to the making of such
loan, advance or transfer of cash, the Person that is acting as the transferor
with respect thereto is Solvent,
31. both before and after giving effect to the making of such
loan, advance or transfer of cash, the Person that is acting as the transferee
with respect thereto is Solvent,
32. both before and after giving effect to the making of such
loan, advance or transfer of cash, all of the Foreign Subsidiaries, taken as a
whole, do not have cash or Cash Equivalents in excess of $3,000,000 in the
aggregate (or the Dollar equivalent thereof) for more than 3 consecutive
Business Days, and
33. the making of such loan, advance or transfer of cash shall
not cause the aggregate amount of all loans, advances or transfers of cash made
by all Loan Parties to all Foreign Subsidiaries from and after the Closing Date
to exceed $3,000,000.
"Permitted Holder" means (a) each of the Principals, (b) one or more
Family Members of a Principal, (c) one or more Family Trusts of a Principal, and
(d) the heirs, executors, administrators or personal representatives upon the
death of one or more of the Persons described in the preceding clauses (a) and
(b) or upon disability of one or more of such Persons for the protection and
management of such Person's assets.
"Permitted Investments" means (a) Investments in Cash Equivalents, (b)
Investments in negotiable instruments for collection, (c) advances made in
connection with purchases of goods or services in the ordinary course of
business, (d) Investments by any Loan Party in any other Loan Party, provided
that if any such Investment is in the form of Indebtedness, such Indebtedness
shall be subject to the terms and conditions of the Intercompany Subordination
Agreement, (e) advances made by any Loan Party to any Foreign Subsidiary
outstanding as of the Closing Date as set forth on Schedule P-1, (f) Permitted
Foreign Subsidiary Advances, (g) advances made by any Loan Party to any
Principal prior to the Closing Date as set forth on Schedule P-1, provided that
any such advance is evidenced by a promissory note and such promissory note is
endorsed and delivered to Agent on or prior to the Closing Date in accordance
with the Pledge Agreement, and (h) Investments consisting of Senior Notes held
by Parent as of the Closing Date as set forth on Schedule P-1.
"Permitted Liens" means (a) with respect to the Personal Property
Collateral, (i) Liens held by Agent for the benefit of Agent and the Lenders,
(ii) Liens for unpaid taxes that either (A) are not yet delinquent, or (B) do
not constitute an Event of Default hereunder and are the subject of Permitted
Protests, (iii) Liens set forth on Schedule P-2, (iv) the interests of lessors
under Operating Leases, (v) purchase money Liens or the interests of lessors
under Capital Leases to the extent that such Liens or interests secure Permitted
Purchase Money Indebtedness and so long as such Lien attaches only to the asset
purchased or acquired and the proceeds thereof, (vi) Liens arising by operation
of law in favor of warehousemen, landlords, carriers, mechanics, materialmen,
laborers, or suppliers, incurred in the ordinary course of business and not in
connection with the borrowing of money, which Liens described in this clause
(vi) either (A) are for sums not yet delinquent, or (B) are the subject of
Permitted Protests, (vii) Liens
- 26 -
arising from deposits made in connection with obtaining worker's compensation or
other unemployment insurance, (viii) Liens or deposits to secure performance of
bids, tenders, or leases incurred in the ordinary course of business and not in
connection with the borrowing of money, (ix) Liens granted (A) under the CCC
Indemnity Agreement (as in effect on the Closing Date), provided that any such
Lien shall be junior and subordinate to the Lien granted in favor of Agent
pursuant to this Agreement (except as to Accounts owing pursuant to any contract
supported by such surety's bonds, with respect to any subrogation rights), (B)
under the AIC Indemnity Agreement (as in effect on the Closing Date) with
respect to surety or appeals bonds issued pursuant thereto prior to the Closing
Date, provided that any such Lien shall be junior and subordinate to the Lien
granted in favor of Agent pursuant to this Agreement (except as to Accounts
owing pursuant to any contract supported by such surety's bonds, with respect to
any subrogation rights), and (C) under any other surety or bonding agreements on
the contracts and the products and proceeds thereof as security for surety or
appeal bonds in connection with obtaining such bonds in the ordinary course of
business, the terms and conditions of which, including waiver of subrogation
rights of the surety and collateral and payment sharing arrangements or other
intercreditor arrangements between the surety and Agent, are acceptable to
Lender Group in its sole discretion, (x) Liens resulting from any judgment or
award that is not an Event of Default hereunder so long as (A) the enforcement
of such judgment or award has been stayed by reason of a pending appeal or
otherwise and (B) the aggregate amount of the claims payable in accordance with
such judgments and awards shall not exceed $250,000, (b) with respect to the
Real Property Collateral, Liens, easements, rights of way, and zoning
restrictions that are exceptions to the policies for title insurance issued in
connection with the Mortgages, as accepted by Agent, and (c) with respect to any
Real Property that is not part of the Real Property Collateral or for which the
Agent has elected not to obtain a policy for title insurance, title defects,
title exceptions, easements, rights of way, and zoning restrictions that do not
materially interfere with or impair the use or operation thereof.
"Permitted Protest" means the right of Parent or any of its
Subsidiaries, as applicable, to protest any Lien (other than any such Lien that
secures the Obligations), taxes (other than payroll taxes or taxes that are the
subject of a United States federal tax lien), or rental payment, provided that
(a) a reserve with respect to such obligation is established on the Books in an
amount no less than the amount required under GAAP to be so reserved, (b) any
such protest is instituted promptly and prosecuted diligently by Parent or any
of its Subsidiaries, as applicable, in good faith, and (c) Agent is satisfied
that, while any such protest is pending, there will be no impairment of the
enforceability, validity, or priority of any of the Agent's Liens.
"Permitted Purchase Money Indebtedness" means, as of any date of
determination, Purchase Money Indebtedness incurred from and after the Closing
Date in an aggregate amount outstanding at any one time not in excess of
$2,500,000.
"Person" means natural persons, corporations, limited liability
companies, limited partnerships, general partnerships, limited liability
partnerships, joint ventures, trusts, land trusts, business trusts, or other
organizations, irrespective of whether they are legal entities, and governments
and agencies and political subdivisions thereof.
"Personal Property Collateral" means all Collateral other than Real
Property.
- 27 -
"Plan" means any employee benefit plan, program, or arrangement
maintained or contributed to by a Loan Party or with respect to which it may
incur liability subject to ERISA.
"Pledge Agreement" means a pledge and security agreement, in form and
substance satisfactory to Agent, executed and delivered by each Loan Party that
owns Stock of a Subsidiary of Parent or that is the holder of any promissory
notes to be delivered to Agent pursuant to Section 4.2.
"Principal" means any of Xxxx X. Xxxxxxx, Xxxxxxx X. Xxxx or Xxxxx X.
Xxxxxx.
"Projections" means Parent's forecasted (a) balance sheets, (b) profit
and loss statements, and (c) cash flow statements, all prepared on a consistent
basis with Parent's historical financial statements, together with appropriate
supporting details and a statement of underlying assumptions.
"Pro Rata Share" means:
4. with respect to a Lender's obligation to make Advances and receive payments
of principal, interest, fees, costs, and expenses with respect thereto, (x)
prior to the Revolver Commitment being terminated or reduced to zero, the
percentage obtained by dividing (i) such Lender's Revolver Commitment, by
(ii) the aggregate Revolver Commitments of all Lenders, and (y) from and
after the time that the Revolver Commitment has been terminated or reduced
to zero, the percentage obtained by dividing (i) the aggregate principal
amount of such Lender's Advances by (ii) the aggregate principal amount of
all Advances,
34. with respect to a Lender's obligation to participate in
Letters of Credit, to reimburse the Issuing Lender, and to receive payments of
fees with respect thereto, (x) prior to the Revolver Commitment being terminated
or reduced to zero, the percentage obtained by dividing (i) such Lender's
Revolver Commitment, by (ii) the aggregate Revolver Commitments of all Lenders,
and (y) from and after the time that the Revolver Commitment has been terminated
or reduced to zero, the percentage obtained by dividing (i) the aggregate
principal amount of such Lender's Advances by (ii) the aggregate principal
amount of all Advances,
35. with respect to a Lender's obligation to make the Term Loan
A and receive payments of interest, fees, and principal with respect thereto,
(x) prior to the making of the Term Loan A, the percentage obtained by dividing
(i) such Lender's Term Loan A Commitment, by (ii) the aggregate amount of all
Lenders' Term Loan A Commitments, and (y) from and after the making of the Term
Loan A, the percentage obtained by dividing (i) the principal amount of such
Lender's Term Loan A by (ii) the principal amount of the Term Loan A,
36. with respect to a Lender's obligation to make the Term Loan
B and receive payments of interest, fees, and principal with respect thereto,
(x) prior to the making of the Term Loan B, the percentage obtained by dividing
(i) such Lender's Term Loan B Commitment, by (ii) the aggregate amount of all
Lenders' Term Loan B Commitments, and (y) from and after the making of the Term
Loan B, the percentage obtained by dividing (i) the principal amount of such
Lender's Term Loan B by (ii) the principal amount of the Term Loan B,
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37. with respect to a Lender's obligation to make the Term Loan
C and receive payments of interest, fees, and principal with respect thereto,
(x) prior to the making of the Term Loan C, the percentage obtained by dividing
(i) such Lender's Term Loan C Commitment, by (ii) the aggregate amount of all
Lenders' Term Loan C Commitments, and (y) from and after the making of the Term
Loan C, the percentage obtained by dividing (i) the principal amount of such
Lender's Term Loan C by (ii) the principal amount of the Term Loan C,
38. with respect to all other matters as to a particular Lender
(including the indemnification obligations arising under Section 16.7), the
percentage obtained by dividing (i) such Lender's Revolver Commitment plus the
unpaid principal amount of such Lender's portion of the Term Loan A plus the
unpaid principal amount of such Lender's portion of the Term Loan B plus the
unpaid principal amount of such Lender's portion of the Term Loan C, by (ii) the
aggregate amount of Revolver Commitments of all Lenders plus the unpaid
principal amount of the Term Loan A plus the unpaid principal amount of the Term
Loan B plus the unpaid principal amount of the Term Loan C; provided, however,
that, if such Lender's Revolver Commitment shall have been terminated or reduced
to zero, such Lender's Revolver Commitment shall be deemed to be the aggregate
unpaid principal amount of such Lender's Advances and if all Revolver
Commitments shall have been terminated or reduced to zero, the aggregate
Revolver Commitments shall be deemed to be the principal amount of all
outstanding Advances.
"Purchase Money Indebtedness" means purchase money Indebtedness
(excluding the Obligations) and Capitalized Lease Obligations incurred at the
time of, or within 20 days after, the acquisition of any fixed assets for the
purpose of financing all or any part of the acquisition cost thereof.
"R&S Availability" means, as of any date of determination, an amount
equal to the least of (a) $1,500,000, (b) 50% of the amount of Xxxxxxx &
Xxxxxxxx Company's Collections with respect to its Accounts for the 30 day
period immediately preceding such date, and (c) 45% of the amount of R&S
Eligible Accounts.
"R&S Dilution" means, as of any date of determination, a percentage,
based upon the experience of the immediately prior 90 days, that is the result
of dividing the Dollar amount of (a) bad debt write-downs, discounts,
advertising allowances, credits, or other dilutive items with respect to Xxxxxxx
and Xxxxxxxx Company's Accounts during such period, by (b) Xxxxxxx and Xxxxxxxx
Company's xxxxxxxx with respect to Accounts during such period (excluding
extraordinary items).
"R&S Dilution Reserve" means, as of any date of determination, an
amount sufficient to reduce the advance rates against R&S Eligible Accounts by
one percentage point for each percentage point by which R&S Dilution is in
excess of 5%.
"R&S Eligible Accounts" means those Accounts created by Xxxxxxx &
Xxxxxxxx Company that would qualify as Eligible Accounts but for the fact that
they (a) are Accounts of Xxxxxxx & Xxxxxxxx Company, (b) represent the right to
receive progress payments or other advance xxxxxxxx that are due prior to the
completion of performance by Xxxxxxx & Xxxxxxxx Company of the subject contract
for goods or services, and (c) do not comply with subsection (i)
- 29 -
of the definition of "Eligible Accounts", provided that Accounts of Xxxxxxx &
Xxxxxxxx Company with respect to (i) any single Account Debtor whose total
obligations owing to all Borrowers exceeds 20% of all Eligible Accounts and R&S
Eligible Accounts, and (ii) any two Account Debtors, each of whose total
obligations owing to all Borrowers exceeds 15% of all Eligible Accounts and R&S
Eligible Accounts, shall not constitute R&S Eligible Accounts to the extent of
the obligations by any such Account Debtor in excess of such percentage (such
percentage as applied to a particular Account Debtor being subject to reduction
by Agent in its Permitted Discretion if the creditworthiness of such Account
Debtor deteriorates).
"Real Property" means Owned Real Property and Leased Real Property.
"Real Property Collateral" means the parcel or parcels of Owned Real
Property identified on Schedule R-1 and any Owned Real Property hereafter
acquired by a Loan Party.
"Record" means information that is inscribed on a tangible medium or
which is stored in an electronic or other medium and is retrievable in
perceivable form.
"Register" has the meaning set forth in Section 14.1(h).
"Registered Loan" has the meaning set forth in Section 2.16.
"Registered Note" has the meaning set forth in Section 2.16.
"Related Fund" has the meaning set forth in the definition of Eligible
Transferee.
"Remedial Action" means all actions taken to (a) clean up, remove,
remediate, contain, treat, monitor, assess, evaluate, or in any way address
Hazardous Materials in the indoor or outdoor environment, (b) prevent or
minimize a release or threatened release of Hazardous Materials so they do not
migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment, (c) perform any pre-remedial studies,
investigations, or post-remedial operation and maintenance activities, or (d)
conduct any other actions authorized by 42 USC Section 9601.
"Replacement Lender" has the meaning set forth in Section 15.2(o).
"Report" has the meaning set forth in Section 16.17.
"Reportable Event" means any of the events described in Section
4043(c) of ERISA or the regulations thereunder other than a Reportable Event as
to which the provision of 30 days' notice to the PBGC is waived under applicable
regulations.
"Required Availability" means Excess Availability and unrestricted
cash and Cash Equivalents that is subject to a Control Agreement in an amount of
not less than $5,000,000.
"Required Lenders" means, at any time, Lenders whose Pro Rata Shares
aggregate 51% or more as determined pursuant to clause (f) of the definition of
"Pro Rata Share"; provided that, (a) so long as Foothill and its Affiliates hold
not less than 30% of the aggregate principal
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amount of the sum of (x) the Revolver Commitment, or, if the Revolver Commitment
has been terminated or reduced to zero, the then extant Revolver Usage, (y) the
Term Loan A, and (z) the Term Loan B, "Required Lenders" shall include Foothill,
and (b) so long as Ableco and its Affiliates or funds, money market accounts,
investment accounts, or other account managed by Ableco or its Affiliates hold
not less than 30% of the aggregate principal amount of the Term Loan C,
"Required Lenders" shall include Ableco.
"Required Revolver Lenders" means Lenders whose Pro Rata Shares
aggregate 51% of the Revolver Commitment, the Term Loan A and the Term Loan B.
"Reserve Percentage" means, on any day, for any Lender, the maximum
percentage prescribed by the Board of Governors of the Federal Reserve System
(or any successor Governmental Authority) for determining the reserve
requirements (including any basic, supplemental, marginal, or emergency
reserves) that are in effect on such date with respect to eurocurrency funding
(currently referred to as "eurocurrency liabilities") of that Lender, but so
long as such Lender is not required or directed under applicable regulations to
maintain such reserves, the Reserve Percentage shall be zero.
"Revolver Commitment" means, with respect to each Lender, its Revolver
Commitment, and, with respect to all Lenders, their Revolver Commitments, in
each case as such Dollar amounts are set forth beside such Lender's name under
the applicable heading on Schedule C-1 or in the Assignment and Acceptance
pursuant to which such Lender became a Lender hereunder in accordance with the
provisions of Section 14.1.
"Revolver Usage" means, as of any date of determination, the sum of
(a) the then extant amount of outstanding Advances, plus (b) the then extant
amount of the Letter of Credit Usage.
"Risk Participation Liability" means, as to each Letter of Credit, all
reimbursement obligations of Borrowers to the Issuing Lender with respect to an
L/C Undertaking, consisting of (a) the amount available to be drawn or which may
become available to be drawn, (b) all amounts that have been paid by the Issuing
Lender to the Underlying Issuer to the extent not reimbursed by Borrowers,
whether by the making of an Advance or otherwise, and (c) all accrued and unpaid
interest, fees, and expenses payable with respect thereto.
"SEC" means the United States Securities and Exchange Commission and
any successor thereto.
"Securities Account" means a "securities account" as that term is
defined in the Code.
"Senior Credit Facility Obligations" means, as of the date of any
Borrowing or the issuance of any Letter of Credit, that portion of the sum of
the Revolver Usage and the aggregate principal amount of the Term Loans that
does not exceed the greater of (x) (A) $20 million plus, if and only if the
Revolver Usage includes Letters of Credit, an additional amount equal to the
then extant Letter of Credit Usage up to a maximum additional amount of $5
million less (B) the aggregate amount of all Net Proceeds (as defined in the
Indenture) of Asset Sales (as defined in the Indenture) applied to permanently
reduce the Commitments with respect to this Agreement
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pursuant to Section 4.10 of the Indenture and (y) the Borrowing Base (as defined
in the Indenture).
"Senior Debt Ratio" means, at any date, the ratio of (i) the sum of
the Revolver Usage and the aggregate outstanding principal amount of the Term
Loans (including the Term Loan C PIK Amount) at such date to (ii) EBITDAP for
the trailing four fiscal quarter period most recently ended on or prior to such
date; provided, that for the period from January 1, 2003 through August 31,
2003, EBITDAP shall be calculated on an Annualized basis.
"Senior Notes" means the 11% Senior Notes due 2007 issued by Parent
pursuant to the Indenture.
"Settlement" has the meaning set forth in Section 2.3(f)(i).
"Settlement Date" has the meaning set forth in Section 2.3(f)(i).
"Shareholder Subordination Agreement" means a subordination agreement,
in form and substance satisfactory to Lender Group, executed and delivered by
Parent and any shareholder of Parent that is the holder of any promissory note
referred to in Section 7.1(j).
"Solvent" means, with respect to any Person on a particular date, that
such Person is not insolvent (as such term is defined in the Uniform Fraudulent
Transfer Act, the Uniform Fraudulent Conveyance Act and the Bankruptcy Code).
"Stock" means all shares, options, warrants, interests,
participations, or other equivalents (regardless of how designated) of or in a
Person, whether voting or nonvoting, including common stock, preferred stock,
preferred stock units (and related dividend equivalent accounts), or any other
"equity security" (as such term is defined in Rule 3a11-1 of the General Rules
and Regulations promulgated by the SEC under the Exchange Act).
"Subsidiary" of a Person means a corporation, partnership, limited
liability company, or other entity in which that Person directly or indirectly
owns or controls the shares of Stock having ordinary voting power to elect a
majority of the board of directors (or appoint other comparable managers) of
such corporation, partnership, limited liability company, or other entity.
"Swing Lender" means Foothill or any other Lender that, at the request
of Administrative Borrower and with the consent of Agent agrees, in such
Lender's sole discretion, to become the Swing Lender hereunder.
"Swing Loan" has the meaning set forth in Section 2.3(d)(i).
"Taxes" has the meaning set forth in Section 16.11.
"Term Loan A" has the meaning set forth in Section 2.2(a).
"Term Loan A Amount" means the lesser of (a) $7,500,000, and (b) the
sum of (i) 80% of the Appraised Value of Eligible Equipment and (ii) 60% of the
Appraised Value of
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Eligible Real Property Collateral, less the amount, if any, of reserves
established by Agent, for potential environmental remediation costs relating to
such Eligible Real Property Collateral.
"Term Loan A Commitment" means, with respect to each Lender, its Term
Loan A Commitment, and, with respect to all Lenders, their Term Loan A
Commitments, in each case as such Dollar amounts are set forth beside such
Lender's name under the applicable heading on Schedule C-1 or in the Assignment
and Acceptance pursuant to which such Lender became a Lender hereunder in
accordance with the provisions of Section 14.1.
"Term Loan B" has the meaning set forth in Section 2.2(b).
"Term Loan B Amount" means $2,500,000.
"Term Loan B Commitment" means, with respect to each Lender, its Term
Loan B Commitment, and, with respect to all Lenders, their Term Loan B
Commitments, in each case as such Dollar amounts are set forth beside such
Lender's name under the applicable heading on Schedule C-1 or in the Assignment
and Acceptance pursuant to which such Lender became a Lender hereunder in
accordance with the provisions of Section 14.1.
"Term Loan B Deficit" has the meaning set forth in Section 2.1(c)(iv).
"Term Loan C" has the meaning set forth in Section 2.2(c).
"Term Loan C Amount" means $15,000,000.
"Term Loan C Commitment" means, with respect to each Lender, its Term
Loan C Commitment, and, with respect to all Lenders, their Term Loan C
Commitments, in each case as such Dollar amounts are set forth beside such
Lender's name under the applicable heading on Schedule C-1 or in the Assignment
and Acceptance pursuant to which such Lender became a Lender hereunder in
accordance with the provisions of Section 14.1.
"Term Loan C Deficit" has the meaning set forth in Section 2.1(c)(v).
"Term Loan C PIK Amount" means, as of any date of determination, the
amount of all interest accrued with respect to the Term Loan C that has been
paid in kind by being added to the balance thereof in accordance with Section
2.6(a)(v).
"Term Loans" means, collectively, the Term Loan A, the Term Loan B and
the Term Loan C.
"Termination Event" means (i) a Reportable Event with respect to any
Benefit Plan, (ii) any event that causes any Loan Party or any of its ERISA
Affiliates to incur liability under Section 409, 502(i), 502(l), 515, 4062,
4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4971 or 4975 of the
IRC, (iii) the filing of a notice of intent to terminate a Benefit Plan or the
treatment of a Benefit Plan amendment as a termination under Section 4041 of
ERISA, (iv) the institution of proceedings by the PBGC to terminate a Benefit
Plan, (v) any other event or condition which might constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Benefit Plan, or (vi) any equivalent event, action,
- 33 -
condition, proceeding or otherwise under any federal, state, local or foreign
counterparts or equivalents thereof, in each case as amended from time to time.
"Total Commitment" means, with respect to each Lender, its Total
Commitment, and, with respect to all Lenders, their Total Commitments, in each
case as such Dollar amounts are set forth beside such Lender's name under the
applicable heading on Schedule C-1 attached hereto or on the signature page of
the Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of Section 14.1.
"Trademark Security Agreement" means a trademark security agreement
executed and delivered by each of the Loan Parties and Agent, the form and
substance of which is satisfactory to Agent.
"UCC Filing Authorization Letter" means a letter executed by each Loan
Party authorizing Agent to file appropriate financing statements on Form UCC-1
in such office or offices as may be necessary or, in the opinion of Agent,
desirable to perfect the Liens to be created by each applicable Loan Document.
"Underlying Issuer" means a third Person which is the beneficiary of
an L/C Undertaking and which has issued a letter of credit at the request of the
Issuing Lender for the benefit of Borrowers.
"Underlying Letter of Credit" means a letter of credit that has been
issued by an Underlying Issuer.
"Voidable Transfer" has the meaning set forth in Section 17.7.
"Xxxxx Fargo" means Xxxxx Fargo Bank, National Association, a national
banking association.
Accounting Terms. All accounting terms not specifically defined herein shall be
construed in accordance with GAAP. When used herein, the term "financial
statements" shall include the notes and schedules thereto. Whenever the term
"Parent" is used in respect of a financial covenant or a related definition, it
shall be understood to mean Parent and its Subsidiaries on a consolidated basis
unless the context clearly requires otherwise.
Code. Any terms used in this Agreement that are defined in the Code shall be
construed and defined as set forth in the Code unless otherwise defined herein.
Construction. Unless the context of this Agreement or any other Loan Document
clearly requires otherwise, references to the plural include the singular,
references to the singular include the plural, the term "including" is not
limiting, and the term "or" has, except where otherwise indicated, the inclusive
meaning represented by the phrase "and/or." The words "hereof," "herein,"
"hereby," "hereunder," and similar terms in this Agreement or any other Loan
Document refer to this Agreement or such other Loan Document, as the case may
be, as a whole and not to any particular provision of this Agreement or such
other Loan Document, as the case may be. Section, subsection, clause, schedule,
and exhibit references herein are to this Agreement unless otherwise specified.
Any reference in this Agreement or in the other Loan
- 34 -
Documents to any agreement, instrument, or document shall include all
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements, thereto and thereof, as
applicable (subject to any restrictions on such alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements set forth herein). Any reference herein to any Person
shall be construed to include such Person's successors and assigns. Any
requirement of a writing contained herein or in the other Loan Documents shall
be satisfied by the transmission of a Record and any Record transmitted shall
constitute a representation and warranty as to the accuracy and completeness of
the information contained therein.
Schedules and Exhibits. All of the schedules and exhibits attached to this
Agreement shall be deemed incorporated herein by reference.
LOAN AND TERMS OF PAYMENT.
REVOLVER ADVANCES.
Subject to the terms and conditions of this Agreement, and during the term of
this Agreement, each Lender with a Revolver Commitment agrees (severally, not
jointly or jointly and severally) to make advances ("Advances") to Borrowers in
an amount at any one time outstanding not to exceed such Lender's Pro Rata Share
of an amount equal to the lesser of (i) the Maximum Revolver Amount less the sum
of (A) the Letter of Credit Usage plus (B) the aggregate principal amount of the
Term Loan A outstanding at such time plus (C) the aggregate principal amount of
the Term Loan B outstanding at such time and (ii) the Borrowing Base less the
sum of (A) the Letter of Credit Usage plus (B) the aggregate amount of the
Inventory Reserves. For purposes of this Agreement, "Borrowing Base," as of any
date of determination, shall mean the result of:
(1) an amount equal to the sum of:
(x) 85% of the amount of Eligible Accounts, less the
amount, if any, of the Dilution Reserve, plus,
(y) the R&S Availability, less the amount, if any, of
the R&S Dilution Reserve,
plus
(2) an amount equal to the least of:
(w) $7,500,000,
(x) 45% of the value of Eligible Inventory,
(y) 75% times the then extant Net Liquidation
Percentage with respect to Inventory times the book
value of Borrowers' Inventory, and
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(z) 55% of the amount of credit availability created
by clause (1) above,
minus
(3) the sum of (x) the Bank Product Reserves and (y) the
aggregate amount of reserves (other than the Inventory
Reserves), if any, established by Agent under Section
2.1(b).
Anything to the contrary in this Section 2.1 notwithstanding, Agent shall have
the right to establish reserves in such amounts, and with respect to such
matters, as Agent in its Permitted Discretion shall deem necessary or
appropriate, against the Borrowing Base, including reserves with respect to (i)
sums that Loan Parties are required to pay (such as taxes (including taxes
applicable to the sale of any goods and services in Canada), assessments,
insurance premiums, or, in the case of leased assets, rents or other amounts
payable under such leases) and has failed to pay under any Section of this
Agreement or any other Loan Document, and (ii) amounts owing by Loan Parties to
any Person to the extent secured by a Lien on, or trust over, any of the
Collateral (other than any existing Permitted Lien set forth on Schedule P-2
which is specifically identified thereon as entitled to have priority over the
Agent's Liens), which Lien or trust, in the Permitted Discretion of Agent,
likely would have a priority superior to the Agent's Liens (such as Liens or
trusts in favor of landlords, warehousemen, carriers, mechanics, materialmen,
laborers, or suppliers, or Liens or trusts for ad valorem, excise, sales, or
other taxes where given priority under applicable law) in and to such item of
the Collateral. In addition to the foregoing, Agent shall have the right to have
the Inventory reappraised by a qualified appraisal company or audited by a field
auditor selected by Agent from time to time after the Closing Date for the
purpose of redetermining the Net Liquidation Percentage of the Eligible
Inventory portion of the Collateral and, as a result, redetermining the
Borrowing Base, provided that, so long as no Default of Event of Default has
occurred and is continuing, Borrowers shall only be obligated to pay for fees
and charges incurred for not more than 1 such Inventory appraisal in any
calendar year and 3 such Inventory field audits in any calendar year; provided,
further, that such Inventory appraisal shall be in the form of a "desktop
appraisal" if (A) at least 1 full Inventory appraisal was performed in the prior
calendar year and (B) at the time of the commencement of such appraisal (1) no
Default of Event of Default has occurred and is continuing, (2) Borrowers had
Excess Availability of not less than $5,000,000 for the 30 consecutive day
period immediately prior to such date and (3) the trailing 12 month EBITDAP of
Parent and its Subsidiaries for the immediately preceding 12 month period was
not less than 80% of the projected EBITDAP for such 12 month period, based on
the most recent Projections delivered to Agent in accordance with Section
6.3(c); provided, that for the period from January 1, 2003 through August 31,
2003, EBITDAP shall be calculated on an Annualized basis.
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Notwithstanding the foregoing, the Lenders with Revolver Commitments shall have
no obligation to make any additional Advances if, either immediately before or
after giving effect to any such Advance:
the Credit Facility Obligations then outstanding exceed the result of (y) the
Borrowing Base minus (z) $2,500,000 (the amount of such excess hereafter
referred to as the "Credit Facility Deficit");
the sum of the Revolver Usage plus the aggregate principal amount of the Term
Loans (including the Term Loan C PIK Amount) then outstanding exceeds 3.25 times
the trailing 12 months EBITDAP of Parent and its Subsidiaries for the
immediately preceding 12 month period (the amount of such excess is hereafter
referred to as the "EBITDAP Deficit"); provided, that for the period from
January 1, 2003 through August 31, 2003, EBITDAP shall be calculated on an
Annualized basis;
the sum of the Revolver Usage plus the aggregate principal amount of the Term
Loans (including the Term Loan C PIK Amount) then outstanding exceeds the result
of (A) 85% of the face amount of all Accounts of Parent and its Restricted
Subsidiaries (as defined in the Indenture) that are not more than 90 days past
due, plus (B) 65% of the book value of all Inventory of Parent and its
Restricted Subsidiaries (as defined in the Indenture), in the case of each of
clauses (A) and (B), calculated on a consolidated basis and in accordance with
GAAP, plus (C) the amount of Indebtedness that on such day remains available to
be incurred by Parent and its Restricted Subsidiaries (as defined in the
Indenture) under clause (k) of the definition of "Permitted Debt" contained in
Section 4.09 of the Indenture, minus (D) $2,500,000 (the amount of such excess
is hereafter referred to as the "Indenture Deficit");
the sum of the Revolver Usage plus the aggregate principal amount of the Term
Loans (other than the Term Loan C) then outstanding exceeds 2.00 times the
trailing 12 months EBITDAP of Parent and its Subsidiaries (the amount of such
excess is hereafter referred to as the "Term Loan B Deficit"); provided, that
for the period from January 1, 2003 through August 31, 2003, EBITDAP shall be
calculated on an Annualized basis;
the sum of the Revolver Usage plus the aggregate principal amount of the Term
Loans (including the Term Loan C PIK Amount) then outstanding exceeds 50% of the
Enterprise Value of the Loan Parties (the amount of such excess is hereafter
referred to as the "Term Loan C Deficit"); or
such additional Advance would cause the sum of (A) the Revolver Usage plus (B)
the aggregate principal amount of the Term Loan A plus (C) the aggregate
principal amount of the Term Loan B to exceed the Maximum Revolver Amount.
Amounts borrowed pursuant to this Section may be repaid and, subject to the
terms and conditions of this Agreement, reborrowed at any time during the term
of this Agreement.
Term Loans. 39. Subject to the terms and conditions of this Agreement, on the
Closing Date, each Lender with a Term Loan A Commitment agrees (severally, not
jointly or jointly and severally) to make term loans (collectively, the "Term
Loan A") to Borrowers in an amount equal to such Lender's Pro Rata Share of the
Term Loan A Amount. The Term Loan A shall be repaid in consecutive monthly
installments, each in a principal amount equal to (i) for the period
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from the Closing Date through the second anniversary of the Closing Date,
$62,500 and (ii) thereafter, $100,000, on the first day of each month,
commencing on May 1, 2003; provided that the last such installment shall be in
the amount necessary to repay in full the unpaid principal amount of the Term
Loan A. Subject to Section 3.6, Borrowers may at any time prepay all or a
portion of the Term Loan A. Each such prepayment of the Term Loan A shall be
applied against the remaining installments of principal thereof in the inverse
order of maturity. The outstanding unpaid principal balance and all accrued and
unpaid interest under the Term Loan A shall be due and payable on the date of
termination of this Agreement, whether by its terms, by prepayment, or by
acceleration. All amounts outstanding under the Term Loan A shall constitute
Obligations. Any principal amount of the Term Loan A repaid or prepaid may not
be reborrowed.
Subject to the terms and conditions of this Agreement, on the Closing Date, each
Lender with a Term Loan B Commitment agrees (severally, not jointly or jointly
and severally) to make term loans (collectively, the "Term Loan B") to Borrowers
in an amount equal to such Lender's Pro Rata Share of the Term Loan B Amount.
The Term Loan B shall be repaid in consecutive monthly installments, each in a
principal amount equal to $104,167, on the first day of each month, commencing
May 1, 2003; provided that the last such installment shall be in the amount
necessary to repay in full the unpaid principal amount of the Term Loan B.
Borrowers may at any time prepay all or a portion of the Term Loan B without
penalty or premium. Each such prepayment of the Term Loan B shall be applied
against the remaining installments of principal thereof in the inverse order of
maturity. The outstanding unpaid principal balance and all accrued and unpaid
interest under the Term Loan B shall be due and payable on the earlier of (i)
the second anniversary of the Closing Date and (ii) the date of termination of
this Agreement, whether by its terms, by prepayment, or by acceleration. All
amounts outstanding under the Term Loan B shall constitute Obligations. Any
principal amount of the Term Loan B repaid or prepaid may not be reborrowed.
Subject to the terms and conditions of this Agreement, on the Closing Date, each
Lender with a Term Loan C Commitment agrees (severally, not jointly or jointly
and severally) to make term loans (collectively, the "Term Loan C") to Borrowers
in an amount equal to such Lender's Pro Rata Share of the Term Loan C Amount.
Borrowers may at any time prepay all or a portion of the Term Loan C without
penalty or premium, provided that (i) no Event of Default shall have occurred
and be continuing or would result from such prepayment, (ii) the outstanding
principal amount of Term Loan B has been paid in full, (iii) Borrowers have
Excess Availability of not less than $5,000,000 both (A) for the 30 consecutive
day period immediately prior to the date of such prepayment and (B) immediately
after giving effect to such prepayment, (iv) each partial prepayment shall be in
a principal amount equal to $500,000 or an integral multiple thereof, and (v)
any partial prepayment which would reduce the outstanding principal amount of
the Term Loan C below $5,000,000 shall be in an amount necessary to repay in
full the unpaid principal amount of the Term Loan C. The outstanding unpaid
principal balance (including the outstanding Term Loan C PIK Amount) and all
accrued and unpaid interest under the Term Loan C (including the Term Loan C PIK
Amount) shall be due and payable on the earlier of (x) the third anniversary of
the Closing Date and (y) the date of termination of this Agreement, whether by
its terms, by prepayment, or by acceleration. All amounts outstanding under the
Term Loan C (including the Term Loan C PIK Amount) shall constitute Obligations.
Any principal amount of the Term Loan C repaid or prepaid may not be reborrowed.
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BORROWING PROCEDURES AND SETTLEMENTS.
Procedure for Borrowing. Each Borrowing of an Advance shall be made by an
irrevocable written request by an Authorized Person delivered to Agent (which
notice must be received by Agent no later than 10:00 a.m. (California time) on
the Business Day prior to the date that is the requested Funding Date,
specifying (i) the amount of such Borrowing, and (ii) the requested Funding
Date, which shall be a Business Day; provided, however, that in the case of a
request for Swing Loan in an amount of $5,000,000, or less, such notice will be
timely received if it is received by Agent no later than 10:00 a.m. (California
time) on the Business Day that is the requested Funding Date). At Agent's
election, in lieu of delivering the above-described written request, any
Authorized Person may give Agent telephonic notice of such request by the
required time, with such telephonic notice to be confirmed in writing within 24
hours of the giving of such notice.
Agent's Election. Promptly after receipt of a request for a Borrowing pursuant
to Section 2.3(a), Agent shall elect, in its discretion, (i) to have the terms
of Section 2.3(c) apply to such requested Borrowing, or (ii) if the Borrowing is
for an Advance, to request Swing Lender to make a Swing Loan pursuant to the
terms of Section 2.3(d) in the amount of the requested Borrowing; provided,
however, that if Swing Lender declines in its sole discretion to make a Swing
Loan pursuant to Section 2.3(d), Agent shall elect to have the terms of Section
2.3(c) apply to such requested Borrowing.
MAKING OF ADVANCES.
In the event that Agent shall elect to have the terms of this Section 2.3(c)
apply to a requested Borrowing as described in Section 2.3(b), then promptly
after receipt of a request for a Borrowing pursuant to Section 2.3(a), Agent
shall notify the Lenders, not later than 1:00 p.m. (California time) on the
Business Day immediately preceding the Funding Date applicable thereto, by
telecopy, telephone, or other similar form of transmission, of the requested
Borrowing. Each Lender shall make the amount of such Lender's Pro Rata Share of
the requested Borrowing available to Agent in immediately available funds, to
Agent's Account, not later than 10:00 a.m. (California time) on the Funding Date
applicable thereto. After Agent's receipt of the proceeds of such Advances, upon
satisfaction of the applicable conditions precedent set forth in Section 3
hereof, Agent shall make the proceeds thereof available to Administrative
Borrower on the applicable Funding Date by transferring immediately available
funds equal to such proceeds received by Agent to Administrative Borrower's
Designated Account; provided, however, that, subject to the provisions of
Section 2.3(i), Agent shall not request any Lender to make, and no Lender shall
have the obligation to make, any Advance if Agent shall have actual knowledge
that (1) one or more of the applicable conditions precedent set forth in Section
3 will not be satisfied on the requested Funding Date for the applicable
Borrowing unless such condition has been waived, or (2) the requested Borrowing
would exceed the Availability on such Funding Date.
Unless Agent receives notice from a Lender on or prior to the Closing Date or,
with respect to any Borrowing after the Closing Date, at least 1 Business Day
prior to the date of such Borrowing, that such Lender will not make available as
and when required hereunder to Agent for the account of Borrowers the amount of
that Lender's Pro Rata Share of the Borrowing,
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Agent may assume that each Lender has made or will make such amount available to
Agent in immediately available funds on the Funding Date and Agent may (but
shall not be so required), in reliance upon such assumption, make available to
Borrowers on such date a corresponding amount. If and to the extent any Lender
shall not have made its full amount available to Agent in immediately available
funds and Agent in such circumstances has made available to Borrowers such
amount, that Lender shall on the Business Day following such Funding Date make
such amount available to Agent, together with interest at the Defaulting Lender
Rate for each day during such period. A notice submitted by Agent to any Lender
with respect to amounts owing under this subsection shall be conclusive, absent
manifest error. If such amount is so made available, such payment to Agent shall
constitute such Lender's Advance on the date of Borrowing for all purposes of
this Agreement. If such amount is not made available to Agent on the Business
Day following the Funding Date, Agent will notify Administrative Borrower of
such failure to fund and, upon demand by Agent, Borrowers shall pay such amount
to Agent for Agent's account, together with interest thereon for each day
elapsed since the date of such Borrowing, at a rate per annum equal to the
interest rate applicable at the time to the Advances composing such Borrowing.
The failure of any Lender to make any Advance on any Funding Date shall not
relieve any other Lender of any obligation hereunder to make an Advance on such
Funding Date, but no Lender shall be responsible for the failure of any other
Lender to make the Advance to be made by such other Lender on any Funding Date.
Agent shall not be obligated to transfer to a Defaulting Lender any payments
made by Borrowers to Agent for the Defaulting Lender's benefit, and, in the
absence of such transfer to the Defaulting Lender, Agent shall transfer any such
payments to each other non-Defaulting Lender member of the Lender Group ratably
in accordance with their Commitments (but only to the extent that such
Defaulting Lender's Advance was funded by the other members of the Lender Group)
or, if so directed by Administrative Borrower and if no Default or Event of
Default had occurred and is continuing (and to the extent such Defaulting
Lender's Advance was not funded by the Lender Group), retain same to be
re-advanced to Borrowers as if such Defaulting Lender had made Advances to
Borrowers. Subject to the foregoing, Agent may hold and, in its Permitted
Discretion, re-lend to Borrowers for the account of such Defaulting Lender the
amount of all such payments received and retained by it for the account of such
Defaulting Lender. Solely for the purposes of voting or consenting to matters
with respect to the Loan Documents, such Defaulting Lender shall be deemed not
to be a "Lender" and such Lender's Commitment shall be deemed to be zero. This
Section shall remain effective with respect to such Lender until (x) the
Obligations under this Agreement shall have been declared or shall have become
immediately due and payable, (y) the non-Defaulting Lenders, Agent, and
Administrative Borrower shall have waived such Defaulting Lender's default in
writing, or (z) the Defaulting Lender makes its Pro Rata Share of the applicable
Advance and pays to Agent all amounts owing by Defaulting Lender in respect
thereof. The operation of this Section shall not be construed to increase or
otherwise affect the Commitment of any Lender, to relieve or excuse the
performance by such Defaulting Lender or any other Lender of its duties and
obligations hereunder, or to relieve or excuse the performance by Borrowers of
their duties and obligations hereunder to Agent or to the Lenders other than
such Defaulting Lender. Any such failure to fund by any Defaulting Lender shall
constitute a material breach by such Defaulting Lender of this Agreement and
shall entitle Administrative Borrower at its option, upon written notice to
Agent, to arrange for a substitute Lender to assume the Commitment of such
Defaulting Lender, such substitute Lender to be acceptable to Agent. In
connection with the arrangement of such a
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substitute Lender, the Defaulting Lender shall have no right to refuse to be
replaced hereunder, and agrees to execute and deliver a completed form of
Assignment and Acceptance Agreement in favor of the substitute Lender (and
agrees that it shall be deemed to have executed and delivered such document if
it fails to do so) subject only to being repaid its share of the outstanding
Obligations (other than Bank Product Obligations) (including an assumption of
its Pro Rata Share of the Risk Participation Liability) without any premium or
penalty of any kind whatsoever; provided further, however, that any such
assumption of the Commitment of such Defaulting Lender shall not be deemed to
constitute a waiver of any of the Lender Groups' or Borrowers' rights or
remedies against any such Defaulting Lender arising out of or in relation to
such failure to fund.
MAKING OF SWING LOANS.
In the event Agent shall elect, with the consent of Swing Lender, as a Lender,
to have the terms of this Section 2.3(d) apply to a requested Borrowing as
described in Section 2.3(b), Swing Lender as a Lender shall make such Advance in
the amount of such Borrowing (any such Advance made solely by Swing Lender as a
Lender pursuant to this Section 2.3(d) being referred to as a "Swing Loan" and
such Advances being referred to collectively as "Swing Loans") available to
Borrowers on the Funding Date applicable thereto by transferring immediately
available funds to Administrative Borrower's Designated Account. Each Swing Loan
is an Advance hereunder and shall be subject to all the terms and conditions
applicable to other Advances, except that no such Swing Loan shall be eligible
for the LIBOR Option and all payments on any Swing Loan shall be payable to
Swing Lender as a Lender solely for its own account (and for the account of the
holder of any participation interest with respect to such Swing Loan). Subject
to the provisions of Section 2.3(i), Agent shall not request Swing Lender as a
Lender to make, and Swing Lender as a Lender shall not make, any Swing Loan if
Agent has actual knowledge that (i) one or more of the applicable conditions
precedent set forth in Section 3 will not be satisfied on the requested Funding
Date for the applicable Borrowing unless such condition has been waived, or (ii)
the requested Borrowing would exceed the Availability on such Funding Date.
Swing Lender as a Lender shall not otherwise be required to determine whether
the applicable conditions precedent set forth in Section 3 have been satisfied
on the Funding Date applicable thereto prior to making, in its sole discretion,
any Swing Loan.
The Swing Loans shall be secured by the Agent's Liens, shall constitute Advances
and Obligations hereunder, and shall bear interest at the rate applicable from
time to time to Advances that are Base Rate Loans.
AGENT ADVANCES.
Agent hereby is authorized by Borrowers and the Lenders, from time to time in
Agent's sole discretion, (1) after the occurrence and during the continuance of
a Default or an Event of Default, or (2) at any time that any of the other
applicable conditions precedent set forth in Section 3 have not been satisfied,
to make Advances to Borrowers on behalf of the Lenders that Agent, in its
Permitted Discretion deems necessary or desirable (A) to preserve or protect the
Collateral, or any portion thereof, (B) to enhance the likelihood of repayment
of the Obligations (other than the Bank Product Obligations), or (C) to pay any
other amount chargeable to Borrowers pursuant to the terms of this Agreement,
including Lender Group Expenses and the
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costs, fees, and expenses described in Section 10 (any of the Advances described
in this Section 2.3(e) shall be referred to as "Agent Advances"); provided, that
notwithstanding anything to the contrary contained in this Section 2.3(e), the
aggregate principal amount of Agent Advances outstanding at any time, when taken
together with the aggregate principal amount of Overadvances made in accordance
with Section 2.3(i) hereof outstanding at any time, shall not exceed an amount
equal to the lesser of (x) 10% of the Borrowing Base then in effect and (y)
$2,750,000. Each Agent Advance is an Advance hereunder and shall be subject to
all the terms and conditions applicable to other Advances, except that no such
Agent Advance shall be eligible for the LIBOR Option and all payments thereon
shall be payable to Agent solely for its own account (and for the account of the
holder of any participation interest with respect to such Agent Advance).
The Agent Advances shall be repayable by Borrowers on demand and secured by the
Agent's Liens granted to Agent under the Loan Documents, shall constitute
Advances and Obligations hereunder, and shall bear interest at the rate
applicable from time to time to Advances that are Base Rate Loans.
Settlement. It is agreed that each Lender's funded portion of the Advances is
intended by the Lenders to equal, at all times, such Lender's Pro Rata Share of
the outstanding Advances. Such agreement notwithstanding, Agent, Swing Lender,
and the other Lenders agree (which agreement shall not be for the benefit of or
enforceable by Borrowers) that in order to facilitate the administration of this
Agreement and the other Loan Documents, settlement among them as to the
Advances, the Swing Loans, and the Agent Advances shall take place on a periodic
basis in accordance with the following provisions:
Agent shall request settlement ("Settlement") with the Lenders on a weekly
basis, or on a more frequent basis if so determined by Agent, (1) on behalf of
Swing Lender, with respect to each outstanding Swing Loan, (2) for itself, with
respect to each Agent Advance, and (3) with respect to Collections received, as
to each by notifying the Lenders by telecopy, telephone, or other similar form
of transmission, of such requested Settlement, no later than 2:00 p.m.
(California time) on the Business Day immediately prior to the date of such
requested Settlement (the date of such requested Settlement being the
"Settlement Date"). Such notice of a Settlement Date shall include a summary
statement of the amount of outstanding Advances, Swing Loans, and Agent Advances
for the period since the prior Settlement Date. Subject to the terms and
conditions contained herein (including Section 2.3(c)(iii)): (y) if a Lender's
balance of the Advances, Swing Loans, and Agent Advances exceeds such Lender's
Pro Rata Share of the Advances, Swing Loans, and Agent Advances as of a
Settlement Date, then Agent shall, by no later than 12:00 p.m. (California time)
on the Settlement Date, transfer in immediately available funds to the account
of such Lender as such Lender may designate, an amount such that each such
Lender shall, upon receipt of such amount, have as of the Settlement Date, its
Pro Rata Share of the Advances, Swing Loans, and Agent Advances, and (z) if a
Lender's balance of the Advances, Swing Loans, and Agent Advances is less than
such Lender's Pro Rata Share of the Advances, Swing Loans, and Agent Advances as
of a Settlement Date, such Lender shall no later than 12:00 p.m. (California
time) on the Settlement Date transfer in immediately available funds to the
Agent's Account, an amount such that each such Lender shall, upon transfer of
such amount, have as of the Settlement Date, its Pro Rata Share of the Advances,
Swing Loans, and Agent Advances. Such amounts made available to Agent under
clause (z) of the immediately preceding
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sentence shall be applied against the amounts of the applicable Swing Loan or
Agent Advance and, together with the portion of such Swing Loan or Agent Advance
representing Swing Lender's Pro Rata Share thereof, shall constitute Advances of
such Lenders. If any such amount is not made available to Agent by any Lender on
the Settlement Date applicable thereto to the extent required by the terms
hereof, Agent shall be entitled to recover for its account such amount on demand
from such Lender together with interest thereon at the Defaulting Lender Rate.
In determining whether a Lender's balance of the Advances, Swing Loans, and
Agent Advances is less than, equal to, or greater than such Lender's Pro Rata
Share of the Advances, Swing Loans, and Agent Advances as of a Settlement Date,
Agent shall, as part of the relevant Settlement, apply to such balance the
portion of payments actually received in good funds by Agent with respect to
principal, interest and fees payable by Borrowers and allocable to the Lenders
hereunder, and proceeds of Collateral. To the extent that a net amount is owed
to any such Lender after such application, such net amount shall be distributed
by Agent to that Lender as part of such next Settlement.
Between Settlement Dates, Agent, to the extent no Agent Advances or Swing Loans
are outstanding, may pay over to Swing Lender any payments received by Agent,
that in accordance with the terms of this Agreement would be applied to the
reduction of the Advances, for application to Swing Lender's Pro Rata Share of
the Advances. If, as of any Settlement Date, Collections received since the then
immediately preceding Settlement Date have been applied to Swing Lender's Pro
Rata Share of the Advances other than to Swing Loans, as provided for in the
previous sentence, Swing Lender shall pay to Agent for the accounts of the
Lenders, and Agent shall pay to the Lenders, to be applied to the outstanding
Advances of such Lenders, an amount such that each Lender shall, upon receipt of
such amount, have, as of such Settlement Date, its Pro Rata Share of the
Advances. During the period between Settlement Dates, Swing Lender with respect
to Swing Loans, Agent with respect to Agent Advances, and each Lender (subject
to the effect of letter agreements between Agent and individual Lenders) with
respect to the Advances other than Swing Loans and Agent Advances, shall be
entitled to interest at the applicable rate or rates payable under this
Agreement on the daily amount of funds employed by Swing Lender, Agent, or the
Lenders, as applicable.
Notation. Agent shall record on its books the principal amount of the Advances
owing to each Lender, including the Swing Loans owing to Swing Lender, and Agent
Advances owing to Agent, and the interests therein of each Lender, from time to
time. In addition, each Lender is authorized, at such Lender's option, to note
the date and amount of each payment or prepayment of principal of such Lender's
Advances in its books and records, including computer records, such books and
records constituting conclusive evidence, absent manifest error, of the accuracy
of the information contained therein.
Lenders' Failure to Perform. All Advances (other than Swing Loans and Agent
Advances) shall be made by the Lenders contemporaneously and in accordance with
their Pro Rata Shares. It is understood that (i) no Lender shall be responsible
for any failure by any other Lender to perform its obligation to make any
Advance (or other extension of credit) hereunder, nor shall any Commitment of
any Lender be increased or decreased as a result of any failure by any other
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Lender to perform its obligations hereunder, and (ii) no failure by any Lender
to perform its obligations hereunder shall excuse any other Lender from its
obligations hereunder.
OPTIONAL OVERADVANCES.
Any contrary provision of this Agreement notwithstanding, the Lenders hereby
authorize Agent or Swing Lender, as applicable, and Agent or Swing Lender, as
applicable, may, but is not obligated to, knowingly and intentionally, continue
to make Advances (including Swing Loans) to Borrowers notwithstanding that an
Overadvance exists or thereby would be created, so long as (A) after giving
effect to such Advances (including a Swing Loan), the Revolver Usage does not
exceed the Borrowing Base less the aggregate amount of the Inventory Reserves by
more than an amount equal to the lesser of (x) 10% of the Borrowing Base then in
effect and (y) $2,750,000, (B) after giving effect to such Advances (including a
Swing Loan), the sum of (x) the outstanding Revolver Usage (except for and
excluding amounts charged to the Loan Account for interest, fees, or Lender
Group Expenses) plus (y) the aggregate principal amount of the Term Loan A then
outstanding plus (z) the aggregate principal amount of the Term Loan B then
outstanding does not exceed the Maximum Revolver Amount, (C) the aggregate
principal amount of Overadvances made pursuant to this Section 2.3(i) when taken
together with the aggregate principal amount of Agent Advances made pursuant to
Section 2.3(e) does not exceed at any time an amount equal to the lesser of (x)
10% of the Borrowing Base then in effect and (y) $2,750,000, (D) at the time of
the making of any such Advance (including a Swing Loan), Agent does not believe,
in good faith, that the Overadvance created by such Advance will be outstanding
for more than 90 days and (E) after giving effect to such Advances (including a
Swing Loan), no Indenture Deficit would exist. The foregoing provisions are for
the exclusive benefit of Agent, Swing Lender, and the Lenders and are not
intended to benefit Borrowers in any way. The Advances and Swing Loans, as
applicable, that are made pursuant to this Section 2.3(i) shall be subject to
the same terms and conditions as any other Advance or Swing Loan, as applicable,
except that they shall not be eligible for the LIBOR Option and the rate of
interest applicable thereto shall be the rate applicable to Advances that are
Base Rate Loans under Section 2.6(c) hereof without regard to the presence or
absence of a Default or Event of Default.
In the event Agent obtains actual knowledge that the Revolver Usage exceeds the
amounts permitted by the preceding paragraph, regardless of the amount of, or
reason for, such excess, Agent shall notify Lenders as soon as practicable (and
prior to making any (or any additional) intentional Overadvances (except for and
excluding amounts charged to the Loan Account for interest, fees, or Lender
Group Expenses) unless Agent determines that prior notice would result in
imminent harm to the Collateral or its value), and the Lenders with Revolver
Commitments thereupon shall, together with Agent, jointly determine the terms of
arrangements that shall be implemented with Borrowers and intended to reduce,
within a reasonable time, the outstanding principal amount of the Advances to
Borrowers to an amount permitted by the preceding paragraph. In the event Agent
or any Lender disagrees over the terms of reduction or repayment of any
Overadvance, the terms of reduction or repayment thereof shall be implemented
according to the determination of the Required Lenders.
Each Lender with a Revolver Commitment shall be obligated to settle with Agent
as provided in Section 2.3(f) for the amount of such Lender's Pro Rata Share of
any unintentional Overadvances by Agent reported to such Lender, any intentional
Overadvances made as permitted under this
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Section 2.3(i), and any Overadvances resulting from the charging to the Loan
Account of interest, fees, or Lender Group Expenses.
PAYMENTS.
PAYMENTS BY BORROWERS.
Except as otherwise expressly provided herein, all payments by Borrowers shall
be made to Agent's Account for the account of the Lender Group and shall be made
in immediately available funds, no later than 11:00 a.m. (California time) on
the date specified herein. Any payment received by Agent later than 11:00 a.m.
(California time), shall be deemed to have been received on the following
Business Day and any applicable interest or fee shall continue to accrue until
such following Business Day.
Unless Agent receives notice from Administrative Borrower prior to the date on
which any payment is due to the Lenders that Borrowers will not make such
payment in full as and when required, Agent may assume that Borrowers have made
(or will make) such payment in full to Agent on such date in immediately
available funds and Agent may (but shall not be so required), in reliance upon
such assumption, distribute to each Lender on such due date an amount equal to
the amount then due such Lender. If and to the extent Borrowers do not make such
payment in full to Agent on the date when due, each Lender severally shall repay
to Agent on demand such amount distributed to such Lender, together with
interest thereon at the Defaulting Lender Rate for each day from the date such
amount is distributed to such Lender until the date repaid.
APPORTIONMENT AND APPLICATION OF PAYMENTS.
Except as otherwise provided with respect to Defaulting Lenders and except as
otherwise provided in the Loan Documents (including in letter agreements between
Agent and individual Lenders), aggregate principal and interest payments shall
be apportioned ratably among the Lenders (according to the unpaid principal
balance of the Obligations to which such payments relate held by each Lender)
and payments of fees and expenses (other than fees or expenses that are for
Agent's separate account, after giving effect to any letter agreements between
Agent and individual Lenders) shall be apportioned ratably among the Lenders
having a Pro Rata Share of the type of Commitment or Obligation to which a
particular fee relates. Except as otherwise specifically provided in paragraph
(b)(iii) below or Section 2.4(d), all payments shall be remitted to Agent and
all such payments (other than payments received while no Default or Event of
Default has occurred and is continuing and which relate to the payment of
principal or interest of specific Obligations or which relate to the payment of
specific fees or other amounts), and all proceeds of Accounts or other
Collateral received by Agent, shall be applied as follows:
first, to pay any Lender Group Expenses then due to Agent under the Loan
Documents, until paid in full,
second, to pay any Lender Group Expenses then due to the Lenders under the Loan
Documents, on a ratable basis, until paid in full,
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third, to pay any fees then due to Agent (for its separate account, after giving
effect to any letter agreements between Agent and the individual Lenders) under
the Loan Documents, until paid in full,
fourth, to pay any fees then due to any or all of the Lenders (after giving
effect to any letter agreements between Agent and individual Lenders) under the
Loan Documents, on a ratable basis, until paid in full, provided that, if an
Event of Default has occurred and is continuing, the priority of the payment of
any fee payable to any Lender in respect of its Term Loan C shall, unless the
Required Revolver Lenders agree in their sole discretion to forgo deferring such
payment, be deferred to item "seventeenth" below,
fifth, to pay interest due in respect of all Agent Advances, until paid in full,
sixth, ratably to pay interest due in respect of the Advances (other than Agent
Advances), the Swing Loans, the Term Loan A and the Term Loan B until paid in
full,
seventh, so long as no Event of Default has occurred and is continuing or, if an
Event of Default has occurred and is continuing and the Required Revolver
Lenders agree in their sole discretion, ratably to pay interest due in respect
of the Term Loan C, until paid in full (if an Event of Default has occurred and
is continuing, the priority of the payment of interest on the Term Loan C,
including the Term Loan C PIK Amount, is deferred to item "eighteenth" below),
eighth, to pay the principal of all Agent Advances until paid in full,
ninth, ratably to pay all principal amounts then due and payable (other than as
a result of an acceleration thereof) with respect to the Term Loan A and the
Term Loan B until paid in full,
tenth, so long as no Event of Default has occurred and is continuing or, if an
Event of Default has occurred and is continuing and the Required Revolver
Lenders agree in their sole discretion, ratably to pay all principal amounts
then due and payable (other than as a result of an acceleration thereof) with
respect to the Term Loan C, until paid in full (if an Event of Default has
occurred or is continuing, the priority of the payment of principal then due
with respect to the Term Loan C is deferred to item "nineteenth" below),
eleventh, to pay the principal of all Swing Loans until paid in full,
twelfth, so long as no Event of Default has occurred and is continuing, and at
Agent's election (which election Agent agrees will not be made if an Overadvance
would be created thereby), to pay amounts then due and owing by Parent or its
Subsidiaries in respect of all Bank Products, until paid in full,
thirteenth, so long as no Event of Default has occurred and is continuing, to
pay, first, the principal of all Advances that are Base Rate Loans and, second,
the principal of all Advances that are LIBOR Rate Loans, until paid in full,
fourteenth, if an Event of Default has occurred and is continuing, ratably (i)
to pay the principal of all Advances until paid in full, and (ii) to Agent, to
be held by Agent, for the benefit of Xxxxx Fargo or its Affiliates, as
applicable, as cash collateral in an amount up to the amount of the
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Bank Products Reserve established prior to the occurrence of, and not in
contemplation of, the subject Event of Default until Parent's and its
Subsidiaries' obligations in respect of the then extant Bank Products have been
paid in full or the cash collateral amount has been exhausted,
fifteenth, if an Event of Default has occurred and is continuing, ratably to pay
the outstanding principal balance of the Term Loan A and the Term Loan B (in
each case in the inverse order of the maturity of the installments due
thereunder) until the Term Loan A and the Term Loan B are paid in full,
sixteenth, if an Event of Default has occurred and is continuing, to Agent, to
be held by Agent, for the ratable benefit of Issuing Lender and those Lenders
having a Revolver Commitment, as cash collateral in an amount up to 105% of the
then extant Letter of Credit Usage until paid in full,
seventeenth, if an Event of Default has occurred and is continuing, to pay fees
due in respect of the Term Loan C, until paid in full,
eighteenth, if an Event of Default has occurred and is continuing, to pay
interest due in respect of the Term Loan C, including the Term Loan C PIK
Amount, until paid in full,
nineteenth, if an Event of Default has occurred and is continuing, to pay the
outstanding principal balance of the Term Loan C, until the Term Loan C is paid
in full,
twentieth, to pay any other Obligations (including Bank Product Obligations)
until paid in full, and
twenty-first, to Borrowers (to be remitted by wire transfer to the Designated
Account) or such other Person entitled thereto under applicable law.
Agent promptly shall distribute to each Lender, pursuant to the applicable wire
instructions received from each Lender in writing, such funds as it may be
entitled to receive, subject to a Settlement delay as provided in Section
2.3(f).
In each instance, so long as no Event of Default has occurred and is continuing,
Section 2.4(b) shall not be deemed to apply to any payment by Borrowers
specified by Borrowers to be for the payment of specific Obligations then due
and payable (or prepayable) under any provision of this Agreement.
For purposes of the foregoing (other than clause (T)), "paid in full" means
payment of all amounts owing under the Loan Documents according to the terms
thereof, including loan fees, service fees, professional fees, interest (and
specifically including interest accrued after the commencement of any Insolvency
Proceeding), default interest, interest on interest, and expense reimbursements,
except to the extent that default or overdue interest (but not any other
interest) and loan fees, each arising from or related to a default, are
disallowed in any Insolvency Proceeding; provided, however, that for the
purposes of clause (T), "paid in full" means payment of all amounts owing under
the Loan Documents according to the terms thereof, including loan fees, service
fees, professional fees, interest (and specifically including interest accrued
after the commencement of any Insolvency Proceeding), default interest, interest
on interest, and expense
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reimbursements, whether or not the same would be or is allowed or disallowed in
whole or in part in any Insolvency Proceeding.
Notwithstanding anything to the contrary, the Applicable Prepayment Premium
shall not be paid to any Lender until all other Obligations have been paid in
full.
In the event of a direct conflict between the priority provisions of this
Section 2.4 and other provisions contained in any other Loan Document, it is the
intention of the parties hereto that such priority provisions in such documents
shall be read together and construed, to the fullest extent possible, to be in
concert with each other. In the event of any actual, irreconcilable conflict
that cannot be resolved as aforesaid, the terms and provisions of this Section
2.4 shall control and govern.
Notwithstanding anything to the contrary contained in this Agreement or any
other Loan Document, if at any time any Credit Facility Obligations are
outstanding and either an Event of Default has occurred and is continuing or
Agent determines in its sole discretion that a Credit Facility Deficit could
reasonably be expected to result if Collections are applied in accordance with
this Section 2.4 or if any Borrowing were to occur:
Agent may, in its sole discretion, apply all proceeds of Accounts and Inventory
to the payment of Credit Facility Obligations for application, first, to pay the
principal of all Agent Advances, until paid in full, second, to pay the
principal of all Advances, until paid in full, third, to pay the outstanding
principal balance of the Term Loan B, until paid in full, fourth, to pay the
outstanding principal balance of the Term Loan A, until paid in full, fifth, to
cash collateralize Letter of Credit Usage in an amount up to 105% thereof, and
sixth, to pay the outstanding principal balance of the Term Loan C, until paid
in full, and
if any Credit Facility Obligations owing to Lenders with a Revolver Commitment,
a Term Loan A or a Term Loan B shall remain outstanding after the application of
all of the proceeds of Accounts and Inventory of the Loan Parties that Agent
determines (in its Permitted Discretion) may be realized in a commercially
reasonable manner and in a commercially reasonable time in accordance with
clause (A) above (such remaining amount, a "Credit Facility Shortfall"), then
all proceeds of Collateral subsequently received by Lenders with a Term Loan C
shall be used to fund the purchase of a participation by such Lenders in the
Credit Facility Obligations owing to Lenders with a Revolver Commitment, a Term
Loan A or a Term Loan B in the amount of such Credit Facility Shortfall in
accordance with a participation agreement by and among Lenders with a Revolver
Commitment, a Term Loan A or a Term Loan B and Lenders with a Term Loan C, in
form and substance satisfactory to Agent and Lenders, unless such Credit
Facility Shortfall arises as a direct result of Agent Advances or Overadvances
made by Agent or Swing Lender or Advances made by Lenders with Revolver
Commitments to Borrowers at a time when Agent or such Lenders actually knew that
the aggregate principal amount of Agent Advances, Overadvances and Advances
would result in a Credit Facility Shortfall (in which case such Credit Facility
Shortfall shall be allocated to the Revolver Commitment, Term Loan A or Term
Loan B, as the Agent may determine).
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MANDATORY PREPAYMENTS.
If on any day a Credit Facility Deficit exists, Borrowers shall immediately pay
to Agent an amount equal to such Credit Facility Deficit to be applied to the
outstanding principal amount of the Term Loans and the Advances in accordance
with clause (d) below.
If on any day an EBITDAP Deficit exists, Borrowers shall immediately pay to
Agent an amount equal to such EBITDAP Deficit to be applied to the outstanding
principal amount of the Term Loans and the Advances in accordance with clause
(d) below.
If on any day an Indenture Deficit exists, Borrowers shall immediately pay to
Agent an amount equal to such Indenture Deficit to be applied to the outstanding
principal amount of the Term Loans and the Advances in accordance with clause
(d) below.
If at any time the outstanding principal amount of the Term Loan A exceeds the
Term Loan A Amount, Borrowers shall immediately pay to Agent an amount equal to
such excess, to be applied to the principal installments of the Term Loan A in
the inverse order of maturity. Agent shall have the right to have the Eligible
Equipment and Eligible Real Property Collateral reappraised by a qualified
appraisal company selected by Agent in its Permitted Discretion from time to
time after the Closing Date for the purposes of the definition of "Term Loan A
Amount" and this Section 2.4(c)(iv); provided, that so long as no Default or
Event of Default has occurred and is continuing, Borrowers shall only be
obligated to pay for fees and charges incurred for not more than 1 such
appraisal of the Eligible Equipment in any calendar year and not more than 1
such appraisal of the Eligible Real Property Collateral in any calendar year;
provided, further, that such appraisal of the Eligible Equipment or the Eligible
Real Property Collateral, as the case may be, shall be in the form of a "desktop
appraisal" if (A) at least 1 full appraisal of the Eligible Equipment or the
Eligible Real Property Collateral, as the case may be, was performed in the
prior calendar year and (B) if at the time of the commencement of such appraisal
(1) no Default of Event of Default has occurred and is continuing, (2) Borrowers
had Excess Availability of not less than $5,000,000 for the 30 consecutive day
period immediately prior to such date and (3) the trailing 12 month EBITDAP of
Parent and its Subsidiaries for the immediately preceding 12 month period was
not less than 80% of the projected EBITDAP for such 12 month period, based on
the most recent Projections delivered to Agent in accordance with Section
6.3(c); provided, that for the period from January 1, 2003 through August 31,
2003, EBITDAP shall be calculated on an Annualized basis.
If on any day a Term Loan B Deficit exists (based upon the most recent financial
statements of Parent and its Subsidiaries delivered to Agent pursuant to Section
6.3), Borrowers shall immediately pay to Agent an amount equal to such Term Loan
B Deficit to be applied to the outstanding principal of the Term Loans and the
Advances in accordance with clause (d) below.
If on any day a Term Loan C Deficit exists (based upon the most recent financial
statements of Parent and its Subsidiaries delivered to Agent pursuant to Section
6.3 or Enterprise Valuation with respect to the Loan Parties, as applicable),
Borrowers shall immediately pay to Agent an amount equal to such Term Loan C
Deficit to be applied to the outstanding principal of the Term Loans and the
Advances in accordance with clause (d) below. The Lender Group shall have the
right to have an Enterprise Valuation performed from time to time after the
Closing Date for the
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purposes of the definition of "Term Loan C Deficit" and this Section 2.4(c)(vi);
provided, that so long as no Default or Event of Default has occurred and is
continuing, Borrowers shall only be obligated to pay for fees and charges
incurred for not more than 1 such Enterprise Valuation in any calendar year.
Within 10 days of delivery to Agent and Lenders of audited annual financial
statements pursuant to Section 6.3(b), commencing with the delivery to Agent and
Lenders of the financial statements for the Fiscal Year ended December 31, 2003,
or, if such financial statements are not delivered to Agent and Lenders on the
date such statements are required to be delivered pursuant to Section 6.3(b), 10
days after the date such statements are required to be delivered to Agent and
Lenders pursuant to Section 6.3(b), Borrowers shall prepay the outstanding
principal amount of the Term Loans and the Advances in accordance with clause
(d) below in an amount equal to 50% of the Excess Cash Flow of Parent and its
Subsidiaries for such Fiscal Year to the extent that the Excess Cash Flow of
Parent and its Subsidiaries for such Fiscal Year exceeds $200,000.
Immediately upon any sale or disposition by any Loan Party or any of its
Subsidiaries of property or assets, Borrowers shall prepay the outstanding
principal amount of the Term Loans and the Advances in accordance with clause
(d) below in an amount equal to 100% of the Net Cash Proceeds received by such
Person in connection with such sales or dispositions to the extent that the
aggregate amount of Net Cash Proceeds received by all Loan Parties and their
Subsidiaries (and not paid to Agent as a prepayment of the Term Loans and the
Advances) for all such sales or dispositions shall exceed $100,000 in any Fiscal
Year (other than sales or dispositions of Inventory or insurance policy or
condemnation awards with respect to Inventory). Nothing contained in this
subclause (viii) shall permit any Loan Party or any of its Subsidiaries to sell
or otherwise dispose of any property or assets other than in accordance with
Section 7.4.
Upon the receipt by any Loan Party or any of its Subsidiaries of any
Extraordinary Receipts, Borrowers shall prepay the outstanding principal of the
Term Loans and the Advances in accordance with clause (d) below in an amount
equal to 100% of such Extraordinary Receipts, net of any reasonable expenses
incurred in collecting such Extraordinary Receipts.
APPLICATION OF PAYMENTS.
Each prepayment pursuant to subclauses (c)(i), (c)(ii) and (c)(iii) above shall,
(A) so long as no Event of Default shall have occurred and be continuing, be
applied, first, to the outstanding principal amount of the Advances, until paid
in full, second, to the outstanding principal amount of the Term Loan B, until
paid in full, third, to the outstanding principal amount of the Term Loan A,
until paid in full, and fourth, to the outstanding principal amount of the Term
Loan C and (B) if an Event of Default shall have occurred and be continuing, be
applied in the manner set forth in Section 2.4(b)(i). Each such prepayment of
the Term Loans shall be applied against the remaining installments of principal
of the applicable Term Loan (if any) in the inverse order of maturity.
Each prepayment pursuant to subclauses (c)(v), (c)(vi) and, subject to the
proviso in clause (d)(iv)(A)(2) below with respect to insurance proceeds and
condemnation awards, (c)(ix) above shall, (A) so long as no Event of Default
shall have occurred and be continuing, be applied, first, to the outstanding
principal amount of the Term Loan B, until paid in full, second, to the
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outstanding principal amount of the Term Loan A, until paid in full, third to
the outstanding principal amount of the Term Loan C, until paid in full, and
fourth, to the outstanding principal amount of the Advances and (B) if an Event
of Default shall have occurred and be continuing, be applied in the manner set
forth in Section 2.4(b)(i). Each such prepayment of the Term Loans shall be
applied against the remaining installments of principal of the applicable Term
Loan (if any) in the inverse order of maturity.
Each prepayment pursuant to subclause (c)(vii) above shall, (A) so long as no
Event of Default shall have occurred and be continuing, be applied, first, to
the outstanding principal amount of the Term Loan C, until paid in full, second,
to the outstanding principal amount of the Term Loan B until paid in full,
third, to the outstanding principal amount of the Term Loan A, until paid in
full, and fourth, to the outstanding principal amount of the Advances and (B) if
an Event of Default shall have occurred and be continuing, be applied in the
manner set forth in Section 2.4(b)(i). Each such prepayment of the Term Loans
shall be applied against the remaining installments of principal of the
applicable Term Loan (if any) in the inverse order of maturity.
Each prepayment pursuant to subclauses (c)(viii) and, with respect to insurance
proceeds and condemnation awards, (c)(ix) above shall, (A) so long as no Event
of Default shall have occurred and be continuing, be applied as follows:
(1) if the proceeds are from any sale or disposition of any
Accounts or Inventory or any insurance policy or condemnation award with
respect to Inventory, such proceeds shall be applied, first, to the
outstanding principal amount of the Advances, until paid in full, second,
to the outstanding principal amount of the Term Loan B, until paid in full,
third, to the outstanding principal amount of the Term Loan A, until paid
in full, and fourth, to the outstanding principal amount of the Term Loan
C, until paid in full. Each such prepayment of the Term Loans shall be
applied against the remaining installments of principal of the applicable
Term Loan (if any) in the inverse order of maturity;
(2) subject to clause (3) below, if the proceeds are from
the sale or disposition of any other assets or any insurance policy or
condemnation award not described in clause (1) above, such proceeds shall
be applied, first, to the outstanding principal amount of the Term Loan B,
until paid in full, second, to the outstanding principal amount of the Term
Loan A, until paid in full, third to the outstanding principal amount of
the Term Loan C, until paid in full, and fourth, to the outstanding
principal amount of the Advances; provided, that, except during the
continuance of a Default or an Event of Default, such proceeds shall not be
required to be so applied to the extent that such proceeds are used to
replace, repair or restore the properties or assets in respect of which
such proceeds were paid if (i) the amount of proceeds received in respect
of such sale, disposition or insurance policy or condemnation award is less
than $500,000, (ii) Administrative Borrower delivers a certificate to Agent
within 10 days after such sale or 30 days after the date of such loss,
destruction or taking, as the case may be, stating that such proceeds shall
be used to replace, repair or restore such properties or assets within a
period specified in such certificate not to exceed 180 days after the
receipt of such proceeds (which certificate shall set forth estimates of
the proceeds to be so expended) and (iii) such proceeds are immediately
deposited in a DDA subject to a
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Control Agreement. If all or any portion of such proceeds not so applied to
the prepayment of the Term Loans and Advances in accordance with this
clause (2) are not used in accordance with the preceding sentence within
the period specified in the relevant certificate furnished pursuant hereto,
such remaining portion shall be applied to the Term Loans and Advances in
accordance with this clause (2) on the last day of such specified period.
Each such prepayment of the Term Loans shall be applied against the
remaining installments of principal of the applicable Term Loan (if any) in
the inverse order of maturity; and
(3) if the proceeds are from a sale or disposition of all
or substantially all of the assets or Stock of any Person or any insurance,
which sale, disposition or proceeds of insurance includes both Accounts or
Inventory and other assets, such proceeds shall be applied as follows: (x)
an amount equal to the net book value of such Accounts and Inventory, or if
greater, an amount equal to the Advances supported by such assets
determined using the effective advance rate under the Borrowing Base
against such Accounts and Inventory (determined at the time of such sale or
disposition or event resulting in such insurance proceeds), shall be
applied to the outstanding principal amount of the Advances and (y) the
remaining proceeds shall be applied, first, to the outstanding principal
amount of the Term Loan B, until paid in full, second, to the outstanding
principal amount of the Term Loan A, until paid in full, third to the
outstanding principal amount of the Term Loan C, until paid in full, and
fourth, to the outstanding principal amount of the Advances, until paid in
full. Each such prepayment of the Term Loans shall be applied against the
remaining installments of principal of the applicable Term Loan (if any) in
the inverse order of maturity; and
(B) if an Event of Default shall have occurred and be continuing, be
applied in the manner set forth in Section 2.4(b)(i).
Notwithstanding anything to the contrary contained herein, if Excess
Availability is less than or equal to $5,000,000 either (x) at any time during
the 30 consecutive day period immediately prior to the date of any prepayment of
the Term Loan C or (y) immediately after giving effect to any prepayment of the
Term Loan C pursuant to any of clauses (c)(v) through (c)(ix) above, no such
prepayment of the Term Loan C shall be made and (1) Agent shall apply such
amounts to the payment of the Advances and, concurrently with such payment of
the Advances, establish and maintain a corresponding reserve against the
Borrowing Base and the Maximum Revolver Amount in an amount equal to the amount
that would have otherwise been applied by Borrowers to the prepayment of the
Term Loan C, and (2) the amount that is applied to the Advances pursuant to
subclause (1) shall be applied to the prepayment of the Term Loan C, and the
corresponding reserve against the Borrowing Base and the Maximum Revolver Amount
shall be released, at such time as Excess Availability is greater than
$5,000,000 both for (x) the 30 consecutive day period immediately prior to the
date of such prepayment of the Term Loan C and (y) immediately after giving
effect to such prepayment of the Term Loan C.
Interest and Fees. Any prepayment made pursuant to Section 2.4(c) in respect of
the Term Loans shall be accompanied by accrued interest on the principal amount
being prepaid to the date of prepayment.
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Cumulative Prepayments. Except as otherwise expressly provided in Section
2.4(c), payments with respect to any subclause of Section 2.4(c) are in addition
to payments made or required to be made under any other subclause of Section
2.4(c).
Overadvances. If, at any time or for any reason, the amount of Obligations
(other than Bank Product Obligations) owed by Borrowers to the Lender Group
pursuant to Sections 2.1 and 2.12 is greater than either the Dollar or
percentage limitations set forth in Sections 2.1 or 2.12, (an "Overadvance"),
Borrowers immediately shall pay to Agent, in cash, the amount of such excess,
which amount shall be used by Agent to reduce the Obligations in accordance with
the priorities set forth in Section 2.4(b). In addition, Borrowers hereby
promise to pay the Obligations (including principal, interest, fees, costs, and
expenses) in Dollars in full to the Lender Group as and when due and payable
under the terms of this Agreement and the other Loan Documents.
INTEREST RATES AND LETTER OF CREDIT FEE: RATES, PAYMENTS, AND CALCULATIONS.
Interest Rates. Subject to Section 2.6(g), except as provided in clause (c)
below, all Obligations (except for undrawn Letters of Credit and Bank Product
Obligations) whether or not charged to the Loan Account pursuant to the terms
hereof shall bear interest on the Daily Balance thereof as follows:
if the relevant Obligation is an Advance that is a LIBOR Rate Loan, at a per
annum rate equal to the LIBOR Rate from time to time in effect plus the LIBOR
Rate Margin;
if the relevant Obligation is all or a portion of the Term Loan A that is a
LIBOR Rate Loan, at a per annum rate equal to the LIBOR Rate from time to time
in effect plus the LIBOR Rate Term Loan A Margin;
if the relevant Obligation is all or a portion of the Term Loan A that is a Base
Rate Loan, at a per annum rate equal to the Base Rate from time to time in
effect plus the Base Rate Term Loan A Margin;
if the relevant Obligation is the Term Loan B, at a per annum rate equal to the
Base Rate from time to time in effect plus the Base Rate Term Loan B Margin;
if the relevant Obligation is the Term Loan C (inclusive of any Term Loan C PIK
Amount), at a per annum rate equal to the sum of (A) the Base Rate from time to
time in effect plus the Base Rate Term Loan C Margin and (B) 3.50%; provided,
however, that, in the case of this subclause (v), so long as no Event of Default
shall have occurred and be continuing and no Indenture Deficit would exist as a
result thereof, that portion of such interest equal to 3.50% per annum shall, in
the absence of an election by Borrowers to pay such interest in cash, be
paid-in-kind by being added to the outstanding principal balance of the Term
Loan C (inclusive of any Term Loan C PIK Amount theretofore so added) on the
first day of each month; and
otherwise, at a per annum rate equal to the Base Rate from time to time in
effect plus the Base Rate Margin;
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provided, that, at no time shall any Obligation (except for undrawn Letters of
Credit and Bank Product Obligations) bear interest (including after giving
effect to any reduction in the interest rate margin applicable thereto pursuant
to Section 2.6(g)) at a per annum rate less than 4.00%.
Letter of Credit Fee. Subject to Section 2.6(g), Borrowers shall pay Agent (for
the ratable benefit of the Lenders with a Revolver Commitment, subject to any
letter agreement between Agent and individual Lenders), a Letter of Credit fee
(in addition to the charges, commissions, fees, and costs set forth in Section
2.12(e)) which shall accrue at a per annum rate equal to 2.50% times the Daily
Balance of the undrawn amount of all outstanding Letters of Credit.
Default Rate. Upon the occurrence and during the continuation of an Event of
Default (and at the election of Agent or the Required Lenders),
all Obligations (except for undrawn Letters of Credit and Bank Product
Obligations) shall bear interest on the Daily Balance thereof at a per annum
rate equal to 4 percentage points above the per annum rate otherwise applicable
to such Obligations hereunder, and
the Letter of Credit fee provided for above shall be increased to 4 percentage
points above the per annum rate otherwise applicable hereunder.
Payment. Except as otherwise provided in Section 2.13(a), interest (other than
the Term Loan C PIK Amount), Letter of Credit fees, and all other fees payable
hereunder shall be due and payable, in arrears, on the first day of each month
at any time that Obligations or Commitments are outstanding. Borrowers hereby
authorize Agent, from time to time, without prior notice to Borrowers, to charge
such interest and fees, all Lender Group Expenses (as and when incurred), the
charges, commissions, fees, and costs provided for in Section 2.12(e) (as and
when accrued or incurred), the fees and costs provided for in Section 2.11 (as
and when accrued or incurred), and all other payments as and when due and
payable under any Loan Document (including the installments due and payable with
respect to the Term Loans and including any amounts due and payable to Xxxxx
Fargo or its Affiliates in respect of Bank Products up to the amount of the then
extant Bank Product Reserves) to Borrowers' Loan Account, which amounts
thereafter shall constitute Advances hereunder and shall accrue interest at the
rate then applicable to Advances hereunder; provided, however, that if, at the
time that any amounts due in respect of interest on the Term Loan C are charged
to Borrowers' Loan Account an Event of Default or Overadvance exists or would
result from such charge to the Loan Account, such amounts shall not constitute
Advances but instead shall continue to remain outstanding as amounts due in
respect of the Term Loan C and such amounts shall be compounded and added to the
outstanding principal balance of the Term Loan C, provided that the failure to
make any such payment and the compounding of such interest shall nonetheless
constitute an Event of Default under Section 8.1. Any interest not paid when due
shall be compounded by being charged to Borrowers' Loan Account and shall
thereafter constitute Advances hereunder and shall accrue interest at the rate
then applicable to Advances that are Base Rate Loans hereunder; provided,
however, that if, at the time that any amounts due in respect of interest on the
Term Loan C are charged to Borrowers' Loan Account an Event of Default or
Overadvance exists or would result from such charge to the Loan Account, such
amounts shall not constitute Advances but instead shall continue to remain
outstanding as amounts due in respect of the Term Loan C and such amounts shall
be compounded and added to the outstanding principal balance of the Term Loan C,
provided that
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the failure to make any such payment and the compounding of such interest shall
nonetheless constitute an Event of Default under Section 8.1.
Computation. All interest and fees chargeable under the Loan Documents shall be
computed on the basis of a 360 day year for the actual number of days elapsed.
In the event the Base Rate is changed from time to time hereafter, the rates of
interest hereunder based upon the Base Rate automatically and immediately shall
be increased or decreased by an amount equal to such change in the Base Rate.
Intent to Limit Charges to Maximum Lawful Rate. In no event shall the interest
rate or rates payable under this Agreement, plus any other amounts paid in
connection herewith, exceed the highest rate permissible under any law that a
court of competent jurisdiction shall, in a final determination, deem
applicable. Borrowers and the Lender Group, in executing and delivering this
Agreement, intend legally to agree upon the rate or rates of interest and manner
of payment stated within it; provided, however, that, anything contained herein
to the contrary notwithstanding, if said rate or rates of interest or manner of
payment exceeds the maximum allowable under applicable law, then, ipso facto, as
of the date of this Agreement, Borrowers are and shall be liable only for the
payment of such maximum as allowed by law, and payment received from Borrowers
in excess of such legal maximum, whenever received, shall be applied to reduce
the principal balance of the Obligations to the extent of such excess.
Reduction of Interest Rate. Notwithstanding the foregoing, so long as (i) the
Term Loan B shall have been paid in full and (ii) no Default or Event of Default
shall have occurred and be continuing, for each period commencing on the date of
the delivery to Agent and Lenders of the audited annual financial statements for
the preceding Fiscal Year pursuant to Section 6.3(b) and ending on the date of
the delivery to Agent and Lenders of the audited annual financial statements for
the then current Fiscal Year pursuant to Section 6.3(b) (each such period, an
"Adjusted Interest Period"), commencing with the delivery to Agent and Lenders
of the audited annual financial statements for the Fiscal Year ending December
31, 2003, if the EBITDAP of Parent and its Subsidiaries for such preceding
Fiscal Year is greater than the amount set forth below, then, subject to the
proviso at the end of Section 2.6(a), the Base Rate Margin, the LIBOR Rate
Margin, the Base Rate Term Loan A Margin, the LIBOR Rate Term Loan A Margin and
the Letter of Credit Fee shall, for the Adjusted Interest Period, be equal to
the percentage per annum set forth below:
Base Rate LIBOR Rate Base Rate Term LIBOR Rate Term Letter of
EBITDAP Margin Margin Loan A Margin Loan A Margin Credit Fee
----------- --------- ---------- -------------- --------------- ----------
$16,000,000 0.75% 4.00% 1.75% 4.00% 2.00%
$18,000,000 0.50% 3.50% 1.25% 3.00% 1.50%
CASH MANAGEMENT.
Borrowers shall (i) establish and maintain cash management services of a type
and on terms satisfactory to Agent at one or more of the banks set forth on
Schedule 2.7(a) (each a "Cash Management Bank"), and shall request in writing
and otherwise take such reasonable steps to
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ensure that all of its Account Debtors forward payment of the amounts owed by
them directly to such Cash Management Bank, and (ii) deposit or cause to be
deposited promptly, and in any event no later than the first Business Day after
the date of receipt thereof, all Collections (including those sent directly by
Account Debtors to a Cash Management Bank) into a bank account in Agent's name
(a "Cash Management Account") at one of the Cash Management Banks.
Each Cash Management Bank shall establish and maintain Cash Management
Agreements with Agent and Borrowers, in form and substance acceptable to Agent.
Each such Cash Management Agreement shall provide, among other things, that (i)
all items of payment deposited in such Cash Management Account and proceeds
thereof are held by such Cash Management Bank as agent or bailee-in-possession
for Agent, (ii) the Cash Management Bank has no rights of setoff or recoupment
or any other claim against the applicable Cash Management Account, other than
for payment of its service fees and other charges directly related to the
administration of such Cash Management Account and for returned checks or other
items of payment, and (iii) it immediately will forward by daily sweep all
amounts in the applicable Cash Management Account to the Agent's Account.
So long as no Default or Event of Default has occurred and is continuing,
Administrative Borrower may amend Schedule 2.7(a) to add or replace a Cash
Management Bank or Cash Management Account; provided, however, that (i) such
prospective Cash Management Bank shall be satisfactory to Agent and Agent shall
have consented in writing in advance to the opening of such Cash Management
Account with the prospective Cash Management Bank, and (ii) prior to the time of
the opening of such Cash Management Account, Borrowers and such prospective Cash
Management Bank shall have executed and delivered to Agent a Cash Management
Agreement. Borrowers shall close any of their Cash Management Accounts (and
establish replacement cash management accounts in accordance with the foregoing
sentence) promptly and in any event within 30 days of notice from Agent that the
creditworthiness of any Cash Management Bank is no longer acceptable in Agent's
reasonable judgment, or as promptly as practicable and in any event within 60
days of notice from Agent that the operating performance, funds transfer, or
availability procedures or performance of the Cash Management Bank with respect
to Cash Management Accounts or Agent's liability under any Cash Management
Agreement with such Cash Management Bank is no longer acceptable in Agent's
reasonable judgment.
The Cash Management Accounts shall be Cash Collateral Accounts, with all cash,
checks and similar items of payment in such accounts securing payment of the
Obligations, and in which Borrowers are hereby deemed to have granted a Lien to
Agent.
Borrowers shall, at the end of each Business Day, deposit or cause to be
deposited into a Cash Management Account all Collections sent directly by
Account Debtors to Borrowers' operating accounts (i) during the period from the
Closing Date through the 3 month anniversary of the Closing Date, at any time
that the Collections sent directly by Account Debtors to Borrowers' operating
accounts exceeds $25,000 in the aggregate for all of Borrowers' operating
accounts during any day, and (ii) thereafter, at any time that the Collections
sent directly by Account Debtors to Borrowers' operating accounts exceeds $5,000
in the aggregate for all of Borrowers' operating accounts during any day.
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Crediting Payments; Float Charge. The receipt of any payment item by Agent
(whether from transfers to Agent by the Cash Management Banks pursuant to the
Cash Management Agreements or otherwise) shall not be considered a payment on
account unless such payment item is a wire transfer of immediately available
federal funds made to the Agent's Account or unless and until such payment item
is honored when presented for payment. Should any payment item not be honored
when presented for payment, then Borrowers shall be deemed not to have made such
payment and interest shall be calculated accordingly. Anything to the contrary
contained herein notwithstanding, any payment item shall be deemed received by
Agent only if it is received into the Agent's Account on a Business Day on or
before 11:00 a.m. (California time). If any payment item is received into the
Agent's Account on a non-Business Day or after 11:00 a.m. (California time) on a
Business Day, it shall be deemed to have been received by Agent as of the
opening of business on the immediately following Business Day. From and after
the Closing Date, Agent shall be entitled to charge Borrowers for 1 Business Day
of 'clearance' or 'float' at the rate applicable to Base Rate Loans under
Section 2.6 on all Collections (regardless of whether forwarded by the Cash
Management Banks to Agent). This across-the-board 1 Business Day clearance or
float charge on all Collections is acknowledged by the parties to constitute an
integral aspect of the pricing of the financing of Borrowers and shall apply
irrespective of whether or not there are any outstanding monetary Obligations;
the effect of such clearance or float charge being the equivalent of charging 1
Business Day of interest on such Collections. The parties acknowledge and agree
that the economic benefit of the foregoing provisions of this Section 2.8 shall
be for the exclusive benefit of Agent.
Designated Account. Agent is authorized to make the Advances and the Term Loans,
and Issuing Lender is authorized to issue the Letters of Credit, under this
Agreement based upon telephonic or other instructions received from anyone
purporting to be an Authorized Person, or without instructions if pursuant to
Section 2.6(d). Administrative Borrower agrees to establish and maintain the
Designated Account with the Designated Account Bank for the purpose of receiving
the proceeds of the Advances requested by Borrowers and made by Agent or the
Lenders hereunder. So long as no Default or Event of Default has occurred and is
continuing, Administrative Borrower may add or replace, the Designated Account
Bank or the Designated Account on 30 days' prior written notice to Agent;
provided, however, that (i) such prospective Designated Account Bank shall be
satisfactory to Agent and Agent shall have consented in writing in advance to
the opening of such Designated Account with the prospective Designated Account
Bank, and (ii) prior to the time of the opening of such Designated Account,
Borrowers and such prospective Designated Account Bank shall have executed and
delivered to Agent a Control Agreement. Unless otherwise agreed by Lender and
Administrative Borrower, any Advance requested by Borrowers and made by Lender
hereunder shall be made to the Designated Account. Unless otherwise agreed by
Agent and Administrative Borrower, any Advance, Agent Advance, or Swing Loan
requested by Borrowers and made by Agent or the Lenders hereunder shall be made
to the Designated Account.
Maintenance of Loan Account; Statements of Obligations. Agent shall maintain an
account on its books in the name of Borrowers (the "Loan Account") on which
Borrowers will be charged with the Term Loans, all Advances (including Agent
Advances and Swing Loans) made by Agent, Swing Lender, or the Lenders to
Borrowers or for Borrowers' account, the Letters of Credit issued by Issuing
Lender for Borrowers' account, and with all other payment Obligations hereunder
or under the other Loan Documents (except for Bank Product Obligations),
including,
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accrued interest, fees and expenses, and Lender Group Expenses. In accordance
with Section 2.8, the Loan Account will be credited with all payments received
by Agent from Borrowers or for Borrowers' account, including all amounts
received in the Agent's Account from any Cash Management Bank. Agent shall
render statements regarding the Loan Account to Administrative Borrower,
including principal, interest, fees, and including an itemization of all charges
and expenses constituting Lender Group Expenses owing, and such statements shall
be conclusively presumed to be correct and accurate and constitute an account
stated between Borrowers and the Lender Group unless, within 30 days after
receipt thereof by Administrative Borrower, Administrative Borrower shall
deliver to Agent written objection thereto describing the error or errors
contained in any such statements. All Obligations shall at all times be deemed,
first, to be Senior Credit Facility Obligations up to the applicable limit set
forth in the definition thereof and, second, to be Credit Facility Obligations
and all repayments and applications of payments on account of the Obligations
shall at all times be deemed applied, first, to the Credit Facility Obligations
and, second, to the Senior Credit Facility Obligations; provided, however, that
the repayments and applications of payments shall be subject to the provisions
of Section 2.4(b)(vii).
Fees. Borrowers shall pay to Agent the following fees and charges, which fees
and charges shall be non-refundable when paid (irrespective of whether this
Agreement is terminated thereafter) and shall be apportioned among the Lenders
in accordance with the terms of letter agreements between Agent and individual
Lenders:
Unused Line Fee. On the first day of each month during the term of this
Agreement, an unused line fee in an amount equal to 0.50% per annum times the
result of (i) the Maximum Revolver Amount, less (ii) the sum of (A) the average
Daily Balance of Advances that were outstanding during the immediately preceding
month, plus (B) the average Daily Balance of the Letter of Credit Usage during
the immediately preceding month plus (C) the outstanding principal amount of the
Term Loan A plus (D) the outstanding principal amount of the Term Loan B,
Fee Letter Fees. As and when due and payable under the terms of the Fee Letter,
Borrowers shall pay to Agent the fees set forth in the Fee Letter, and
Audit, Appraisal, and Valuation Charges. For the separate account of Agent or
the applicable Lender, audit, appraisal, and valuation fees and charges as
follows: (i) a fee of $850 per day, per auditor, plus out-of-pocket expenses for
each financial audit of a Loan Party performed by personnel employed by Agent or
any Lender; (ii) if implemented, a one time charge of $5,000 plus out-of-pocket
expenses for expenses for the establishment of electronic collateral reporting
systems; (iii) a fee of $1,500 per day per appraiser, plus out-of-pocket
expenses, for each appraisal of the Collateral performed by personnel employed
by Agent or any Lender; and (iv) subject to the limitations set forth in Section
2.1(b), Section 2.4(c)(iv) and Section 2.4(c)(vi), the actual charges paid or
incurred by Agent or any Lender if it elects to employ the services of one or
more third Persons to perform financial audits of the Loan Parties, to appraise
the Collateral, or any portion thereof, or to assess a Loan Party's Enterprise
Value.
LETTERS OF CREDIT.
Subject to the terms and conditions of this Agreement, the Issuing Lender agrees
to issue letters of credit for the account of Borrowers (each, an "L/C") or to
purchase participations or execute
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indemnities or reimbursement obligations (each such undertaking, an "L/C
Undertaking") with respect to letters of credit issued by an Underlying Issuer
(as of the Closing Date, the prospective Underlying Issuer is to be Xxxxx Fargo)
for the account of Borrowers. Each L/C shall be denominated in Dollars or, if a
different currency is requested by a Borrower, a currency satisfactory to Agent.
To request the issuance of an L/C or an L/C Undertaking (or the amendment,
renewal, or extension of an outstanding L/C or L/C Undertaking), Administrative
Borrower shall hand deliver or telecopy (or transmit by electronic
communication, if arrangements for doing so have been approved by the Issuing
Lender) to the Issuing Lender and Agent (reasonably in advance of the requested
date of issuance, amendment, renewal, or extension) a notice requesting the
issuance of an L/C or L/C Undertaking, or identifying the L/C or L/C Undertaking
to be amended, renewed, or extended, the date of issuance, amendment, renewal,
or extension, the date on which such L/C or L/C Undertaking is to expire, the
amount of such L/C or L/C Undertaking, the requested currency of such L/C, the
name and address of the beneficiary thereof (or of the Underlying Letter of
Credit, as applicable), and such other information as shall be necessary to
prepare, amend, renew, or extend such L/C or L/C Undertaking. If requested by
the Issuing Lender, Borrowers also shall be an applicant under the application
with respect to any Underlying Letter of Credit that is to be the subject of an
L/C Undertaking. The Issuing Lender shall have no obligation to issue a Letter
of Credit if any of the following would result (x) after giving effect to the
requested Letter of Credit or (y) as a result of currency fluctuations relating
to one or more L/Cs denominated in a currency other than Dollars:
the Letter of Credit Usage would exceed the Borrowing Base less the then extant
amount of outstanding Advances and the aggregate amount of the Inventory
Reserves, or
the Letter of Credit Usage would exceed $5,000,000,
the Letter of Credit Usage would exceed the Maximum Revolver Amount less the sum
of (A) the then extant amount of outstanding Advances plus (B) the then extent
aggregate principal amount of the Term Loan A outstanding plus (C) the then
extent aggregate principal amount of the Term Loan B outstanding, or
an Indenture Deficit would exist.
Borrowers and the Lender Group acknowledge and agree that certain
Underlying Letters of Credit may be issued to support letters of credit that
already are outstanding as of the Closing Date. Each Letter of Credit (and
corresponding Underlying Letter of Credit) shall be in form and substance
acceptable to the Issuing Lender (in the exercise of its Permitted Discretion),
including the requirement that the amounts payable thereunder must be payable in
Dollars. If Issuing Lender is obligated to advance funds under a Letter of
Credit, Borrowers immediately shall reimburse such L/C Disbursement to Issuing
Lender by paying to Agent an amount equal to the Dollar Equivalent of such L/C
Disbursement not later than 11:00 a.m., California time, on the date that such
L/C Disbursement is made, if Administrative Borrower shall have received written
or telephonic notice of such L/C Disbursement prior to 10:00 a.m., California
time, on such date, or, if such notice has not been received by Administrative
Borrower prior to such time on such date, then not later than 11:00 a.m.,
California time, on (i) the Business Day that Administrative Borrower receives
such notice, if such notice is received prior to 10:00 a.m., California time, or
(ii) if such notice is received after 10:00 a.m., California time, the Business
Day immediately
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succeeding the date Administrative Borrower receives such notice, and, in the
absence of such reimbursement, the L/C Disbursement immediately and
automatically shall be deemed to be an Advance hereunder in the Dollar
Equivalent of such L/C Disbursement and, thereafter, shall bear interest at the
rate then applicable to Advances that are Base Rate Loans under Section 2.6. To
the extent an L/C Disbursement is deemed to be an Advance hereunder, Borrowers'
obligation to reimburse such L/C Disbursement shall be discharged and replaced
by the resulting Advance in the Dollar Equivalent of such L/C Disbursement.
Promptly following receipt by Agent of any payment from Borrowers pursuant to
this paragraph, Agent shall distribute such payment to the Issuing Lender or, to
the extent that Lenders have made payments pursuant to Section 2.12(c) to
reimburse the Issuing Lender, then to such Lenders and the Issuing Lender as
their interest may appear.
Each L/C that is denominated in a currency other than Dollars shall be
recorded on the books of Agent in Dollars. Agent shall calculate the Dollar
Equivalent thereof on the date when such L/C is issued, and, at the election of
Agent (in its sole and absolute discretion), every week during which such L/C is
outstanding or at any time if a Default or an Event of Default exists. Such
Dollar Equivalent shall remain in effect until the same is recalculated by Agent
as provided above and notice of such recalculation is received by Administrative
Borrower, it being understood that until such notice is received, the Dollar
Equivalent of such L/C shall be that Dollar Equivalent as last reported to
Administrative Borrower by Agent. Agent shall promptly notify Administrative
Borrower and Lenders of each such determination of the Dollar Equivalent.
Promptly following receipt of a notice of L/C Disbursement pursuant to Section
2.12(a), each Lender with a Revolver Commitment agrees to fund its Pro Rata
Share of any Advance deemed made pursuant to the foregoing subsection on the
same terms and conditions as if Borrowers had requested such Advance and Agent
shall promptly pay to Issuing Lender the amounts so received by it from the
Lenders. By the issuance of a Letter of Credit (or an amendment to a Letter of
Credit increasing the amount thereof) and without any further action on the part
of the Issuing Lender or the Lenders with Revolver Commitment, the Issuing
Lender shall be deemed to have granted to each Lender with a Revolver
Commitment, and each Lender with a Revolver Commitment shall be deemed to have
purchased, a participation in each Letter of Credit, in an amount equal to its
Pro Rata Share of the Dollar Equivalent of the Risk Participation Liability of
such Letter of Credit, and each such Lender agrees to pay to Agent, for the
account of the Issuing Lender, such Lender's Pro Rata Share of the Dollar
Equivalent of any payments made by the Issuing Lender under such Letter of
Credit. In consideration and in furtherance of the foregoing, each Lender with a
Revolver Commitment hereby absolutely and unconditionally agrees to pay to
Agent, for the account of the Issuing Lender, such Lender's Pro Rata Share of
the Dollar Equivalent of each L/C Disbursement made by the Issuing Lender and
not reimbursed by Borrowers on the date due as provided in clause (a) of this
Section, or the Dollar Equivalent of any reimbursement payment required to be
refunded to Borrowers for any reason. Each Lender with a Revolver Commitment
acknowledges and agrees that its obligation to deliver to Agent, for the account
of the Issuing Lender, an amount equal to its respective Pro Rata Share pursuant
to this Section 2.12(b) shall be absolute and unconditional and such remittance
shall be made notwithstanding the occurrence or continuation of an Event of
Default or Default or the failure to satisfy any condition set forth in Section
3 hereof. If any such Lender fails to make available to Agent the amount of such
Lender's Pro Rata Share of the Dollar Equivalent of any payments
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made by the Issuing Lender in respect of such Letter of Credit as provided in
this Section, Agent (for the account of the Issuing Lender) shall be entitled to
recover such amount on demand from such Lender together with interest thereon at
the Defaulting Lender Rate until paid in full.
Each Borrower hereby agrees to indemnify, save, defend, and hold the Lender
Group harmless from any loss, cost, expense, or liability, and reasonable
attorneys fees incurred by the Lender Group arising out of or in connection with
any Letter of Credit; provided, however, that no Borrower shall be obligated
hereunder to indemnify for any loss, cost, expense, or liability that is caused
by the gross negligence or willful misconduct of the Issuing Lender or any other
member of the Lender Group. Each Borrower agrees to be bound by the Underlying
Issuer's regulations and interpretations of any Underlying Letter of Credit or
by Issuing Lender's interpretations of any L/C issued by Issuing Lender to or
for such Borrower's account, even though this interpretation may be different
from such Borrower's own, and each Borrower understands and agrees that the
Lender Group shall not be liable for any error, negligence, or mistake, whether
of omission or commission, in following Borrowers' instructions or those
contained in the Letter of Credit or any modifications, amendments, or
supplements thereto. Each Borrower understands that the L/C Undertakings may
require Issuing Lender to indemnify the Underlying Issuer for certain costs or
liabilities arising out of claims by Borrowers against such Underlying Issuer.
Each Borrower hereby agrees to indemnify, save, defend, and hold the Lender
Group harmless with respect to any loss, cost, expense (including reasonable
attorneys fees), or liability incurred by the Lender Group under any L/C
Undertaking as a result of the Lender Group's indemnification of any Underlying
Issuer; provided, however, that no Borrower shall be obligated hereunder to
indemnify for any loss, cost, expense, or liability that is caused by the gross
negligence or willful misconduct of the Issuing Lender or any other member of
the Lender Group.
Each Borrower hereby authorizes and directs any Underlying Issuer to deliver to
the Issuing Lender all instruments, documents, and other writings and property
received by such Underlying Issuer pursuant to such Underlying Letter of Credit
and to accept and rely upon the Issuing Lender's instructions with respect to
all matters arising in connection with such Underlying Letter of Credit and the
related application.
Any and all charges, commissions, fees, and costs incurred by the Issuing Lender
relating to Underlying Letters of Credit shall be Lender Group Expenses for
purposes of this Agreement and immediately shall be reimbursable by Borrowers to
Agent for the account of the Issuing Lender; it being acknowledged and agreed by
each Borrower that, as of the Closing Date, the issuance charge imposed by the
prospective Underlying Issuer is .825% per annum times the Dollar Equivalent of
the face amount of each Underlying Letter of Credit, that such issuance charge
may be changed from time to time, and that the Underlying Issuer also imposes a
schedule of charges for amendments, extensions, drawings, and renewals.
If by reason of (i) any change in any applicable law, treaty, rule, or
regulation or any change in the interpretation or application thereof by any
Governmental Authority, or (ii) compliance by the Underlying Issuer or the
Lender Group with any direction, request, or requirement (irrespective of
whether having the force of law) of any Governmental Authority or monetary
authority, including Regulation D of the Federal Reserve Board as from time to
time in effect (and any successor thereto):
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any reserve, deposit, or similar requirement is or shall be imposed or modified
in respect of any Letter of Credit issued hereunder, or
there shall be imposed on the Underlying Issuer or the Lender Group any other
condition regarding any Underlying Letter of Credit or any Letter of Credit
issued pursuant hereto;
and the result of the foregoing is to increase, directly or indirectly, the cost
to the Lender Group of issuing, making, guaranteeing, or maintaining any Letter
of Credit or to reduce the amount receivable in respect thereof by the Lender
Group, then, and in any such case, Agent may, at any time within a reasonable
period after the additional cost is incurred or the amount received is reduced,
notify Administrative Borrower, and Borrowers shall pay on demand such amounts
as Agent may specify to be necessary to compensate the Lender Group for such
additional cost or reduced receipt, together with interest on such amount from
the date of such demand until payment in full thereof at the rate then
applicable to Base Rate Loans hereunder. The determination by Agent of any
amount due pursuant to this Section, as set forth in a certificate setting forth
the calculation thereof in reasonable detail, shall, in the absence of manifest
or demonstrable error, be final and conclusive and binding on all of the parties
hereto.
Each Borrower acknowledges and agrees that certain of the Letters of Credit may
provide for the presentation of time drafts to the Underlying Issuer. If an
Underlying Issuer accepts such a time draft that is presented under an
Underlying Letter of Credit, it is acknowledged and agreed that (i) the Letter
of Credit will require the Issuing Lender to reimburse the Underlying Issuer for
the Dollar Equivalent of the amounts paid on account of such time draft on or
after the maturity date thereof, (ii)the pricing provisions hereof (including
Sections 2.6(b) and 2.12(e)) shall continue to apply, until payment of such time
draft on or after the maturity date thereof, as if the Underlying Letter of
Credit were still outstanding, and (iii) on the date on which Issuing Lender
makes payment to the Underlying Issuer of the Dollar Equivalent of the amounts
paid on account of such time draft, the Borrowers immediately shall reimburse
such amount to Issuing Lender and such amount shall constitute an L/C
Disbursement hereunder.
LIBOR OPTION.
Interest and Interest Payment Dates. In lieu of having interest charged at the
rate based upon the Base Rate, Borrowers shall have the option (the "LIBOR
Option") to have interest on all or a portion of the Advances or the Term Loan A
be charged at a rate of interest based upon the LIBOR Rate. Interest on LIBOR
Rate Loans shall be payable on the earliest of (i) the last day of the Interest
Period applicable thereto, (ii) the occurrence of an Event of Default in
consequence of which the Required Lenders or Agent on behalf thereof elect to
accelerate the maturity of all or any portion of the Obligations, or (iii)
termination of this Agreement pursuant to the terms hereof. On the last day of
each applicable Interest Period, unless Administrative Borrower properly has
exercised or continued the LIBOR Option with respect thereto, the interest rate
applicable to such LIBOR Rate Loan automatically shall convert to the rate of
interest then applicable to Base Rate Loans of the same type hereunder. At any
time that an Event of Default has occurred and is continuing, Borrowers no
longer shall have the option to request that Advances or the Term Loan A bear
interest at the LIBOR Rate and Agent shall have the right to convert the
interest rate on all outstanding LIBOR Rate Loans to the rate then applicable to
Base Rate Loans hereunder.
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LIBOR ELECTION.
Administrative Borrower may, at any time and from time to time, so long as no
Event of Default has occurred and is continuing, elect to exercise the LIBOR
Option by notifying Agent prior to 11:00 a.m. (California time) at least 3
Business Days prior to the commencement of the proposed Interest Period (the
"LIBOR Deadline"). Notice of Administrative Borrower's election of the LIBOR
Option for a permitted portion of the Advances or the Term Loan A and an
Interest Period pursuant to this Section shall be made by delivery to Agent of a
LIBOR Notice received by Agent before the LIBOR Deadline, or by telephonic
notice received by Agent before the LIBOR Deadline (to be confirmed by delivery
to Agent of a LIBOR Notice received by Agent prior to 5:00 p.m. (California
time) on the same day). Promptly upon its receipt of each such LIBOR Notice,
Agent shall provide a copy thereof to each of the Lenders having a Revolver
Commitment.
Each LIBOR Notice shall be irrevocable and binding on Borrowers. In connection
with each LIBOR Rate Loan, each Borrower shall indemnify, defend, and hold Agent
and the Lenders harmless against any loss, cost, or expense incurred by Agent or
any Lender as a result of (a) the payment of any principal of any LIBOR Rate
Loan other than on the last day of an Interest Period applicable thereto
(including as a result of an Event of Default), (b) the conversion of any LIBOR
Rate Loan other than on the last day of the Interest Period applicable thereto,
or (c) the failure to borrow, convert, continue or prepay any LIBOR Rate Loan on
the date specified in any LIBOR Notice delivered pursuant hereto (such losses,
costs, and expenses, collectively, "Funding Losses"). Funding Losses shall, with
respect to Agent or any Lender, be deemed to equal the amount determined by
Agent or such Lender to be the excess, if any, of (i) the amount of interest
that would have accrued on the principal amount of such LIBOR Rate Loan had such
event not occurred, at the LIBOR Rate that would have been applicable thereto,
for the period from the date of such event to the last day of the then current
Interest Period therefor (or, in the case of a failure to borrow, convert or
continue, for the period that would have been the Interest Period therefor),
minus (ii) the amount of interest that would accrue on such principal amount for
such period at the interest rate which Agent or such Lender would be offered
were it to be offered, at the commencement of such period, Dollar deposits of a
comparable amount and period in the London interbank market. A certificate of
Agent or a Lender delivered to Administrative Borrower setting forth any amount
or amounts that Agent or such Lender is entitled to receive pursuant to this
Section shall be conclusive absent manifest error.
Borrowers shall have not more than 10 LIBOR Rate Loans in effect at any given
time. Borrowers only may exercise the LIBOR Option for LIBOR Rate Loans of at
least $1,000,000 and integral multiples of $500,000 in excess thereof.
Prepayments. Borrowers may prepay LIBOR Rate Loans at any time; provided,
however, that in the event that LIBOR Rate Loans are prepaid on any date that is
not the last day of the Interest Period applicable thereto, including as a
result of any automatic prepayment through the required application by Agent of
proceeds of Collections in accordance with Section 2.4(b) or for any other
reason, including early termination of the term of this Agreement or
acceleration of all or any portion of the Obligations pursuant to the terms
hereof, each Borrower shall indemnify, defend, and hold Agent and the Lenders
and their Participants harmless against any and all Funding Losses in accordance
with clause (b) above.
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SPECIAL PROVISIONS APPLICABLE TO LIBOR RATE.
The LIBOR Rate may be adjusted by Agent with respect to any Lender on a
prospective basis to take into account any additional or increased costs to such
Lender of maintaining or obtaining any eurodollar deposits or increased costs
due to changes in applicable law occurring subsequent to the commencement of the
then applicable Interest Period, including changes in tax laws (except changes
of general applicability in corporate income tax laws) and changes in the
reserve requirements imposed by the Board of Governors of the Federal Reserve
System (or any successor), excluding the Reserve Percentage, which additional or
increased costs would increase the cost of funding loans bearing interest at the
LIBOR Rate. In any such event, the affected Lender shall give Administrative
Borrower and Agent notice of such a determination and adjustment and Agent
promptly shall transmit the notice to each other Lender and, upon its receipt of
the notice from the affected Lender, Administrative Borrower may, by notice to
such affected Lender (y) require such Lender to furnish to Administrative
Borrower a statement setting forth the basis for adjusting such LIBOR Rate and
the method for determining the amount of such adjustment, or (z) repay the LIBOR
Rate Loans with respect to which such adjustment is made (together with any
amounts due under clause (b)(ii) above).
In the event that any change in market conditions or any law, regulation,
treaty, or directive, or any change therein or in the interpretation of
application thereof, shall at any time after the date hereof, in the reasonable
opinion of any Lender, make it unlawful or impractical for such Lender to fund
or maintain LIBOR Advances or to continue such funding or maintaining, or to
determine or charge interest rates at the LIBOR Rate, such Lender shall give
notice of such changed circumstances to Agent and Administrative Borrower and
Agent promptly shall transmit the notice to each other Lender and (y) in the
case of any LIBOR Rate Loans of such Lender that are outstanding, the date
specified in such Lender's notice shall be deemed to be the last day of the
Interest Period of such LIBOR Rate Loans, and interest upon the LIBOR Rate Loans
of such Lender thereafter shall accrue interest at the rate then applicable to
Base Rate Loans, and (z) Borrowers shall not be entitled to elect the LIBOR
Option until such Lender determines that it would no longer be unlawful or
impractical to do so.
No Requirement of Matched Funding. Anything to the contrary contained herein
notwithstanding, neither Agent, nor any Lender, nor any of their Participants,
is required actually to acquire eurodollar deposits to fund or otherwise match
fund any Obligation as to which interest accrues at the LIBOR Rate. The
provisions of this Section shall apply as if each Lender or its Participants had
match funded any Obligation as to which interest is accruing at the LIBOR Rate
by acquiring eurodollar deposits for each Interest Period in the amount of the
LIBOR Rate Loans.
Capital Requirements. If, after the date hereof, any Lender determines that (i)
the adoption of or change in any law, rule, regulation or guideline regarding
capital requirements for banks or bank holding companies, or any change in the
interpretation or application thereof by any Governmental Authority charged with
the administration thereof, or (ii) compliance by such Lender or its parent bank
holding company with any guideline, request or directive of any such entity
regarding capital adequacy (whether or not having the force of law), will have
the effect of reducing the return on such Lender's or such holding company's
capital as a consequence of such Lender's Commitments hereunder to a level below
that which such Lender or such holding
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company could have achieved but for such adoption, change, or compliance (taking
into consideration such Lender's or such holding company's then existing
policies with respect to capital adequacy and assuming the full utilization of
such entity's capital) by any amount deemed by such Lender to be material, then
such Lender may notify Administrative Borrower and Agent thereof. Following
receipt of such notice, Borrowers agree to pay such Lender on demand the amount
of such reduction of return of capital as and when such reduction is determined,
payable within 90 days after presentation by such Lender of a statement in the
amount and setting forth in reasonable detail such Lender's calculation thereof
and the assumptions upon which such calculation was based (which statement shall
be deemed true and correct absent manifest error). In determining such amount,
such Lender may use any reasonable averaging and attribution methods.
JOINT AND SEVERAL LIABILITY OF BORROWERS.
Each Borrower is accepting joint and several liability hereunder and under the
other Loan Documents in consideration of the financial accommodations to be
provided by the Agent and the Lenders under this Agreement, for the mutual
benefit, directly and indirectly, of each Borrower and in consideration of the
undertakings of the other Borrowers to accept joint and several liability for
the Obligations.
Each Borrower, jointly and severally, hereby irrevocably and unconditionally
accepts, not merely as a surety but also as a co-debtor, joint and several
liability with the other Borrowers, with respect to the payment and performance
of all of the Obligations (including any Obligations arising under this Section
2.15), it being the intention of the parties hereto that all the Obligations
shall be the joint and several obligations of each Person composing Borrowers
without preferences or distinction among them.
If and to the extent that any of Borrowers shall fail to make any payment with
respect to any of the Obligations as and when due or to perform any of the
Obligations in accordance with the terms thereof, then in each such event the
other Persons composing Borrowers will make such payment with respect to, or
perform, such Obligation.
The Obligations of each Person composing Borrowers under the provisions of this
Section 2.15 constitute the absolute and unconditional, full recourse
Obligations of each Person composing Borrowers enforceable against each such
Borrower to the full extent of its properties and assets, irrespective of the
validity, regularity or enforceability of this Agreement or any other
circumstances whatsoever.
Except as otherwise expressly provided in this Agreement, each Person composing
Borrowers hereby waives notice of acceptance of its joint and several liability,
notice of any Advances or Letters of Credit issued under or pursuant to this
Agreement, notice of the occurrence of any Default, Event of Default, or of any
demand for any payment under this Agreement, notice of any action at any time
taken or omitted by Agent or Lenders under or in respect of any of the
Obligations, any requirement of diligence or to mitigate damages and, generally,
to the extent permitted by applicable law, all demands, notices and other
formalities of every kind in connection with this Agreement (except as otherwise
provided in this Agreement). Each Person composing Borrowers hereby assents to,
and waives notice of, any extension or postponement of
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the time for the payment of any of the Obligations, the acceptance of any
payment of any of the Obligations, the acceptance of any partial payment
thereon, any waiver, consent or other action or acquiescence by Agent or Lenders
at any time or times in respect of any default by any other Person composing
Borrowers in the performance or satisfaction of any term, covenant, condition or
provision of this Agreement, any and all other indulgences whatsoever by Agent
or Lenders in respect of any of the Obligations, and the taking, addition,
substitution or release, in whole or in part, at any time or times, of any
security for any of the Obligations or the addition, substitution or release, in
whole or in part, of any Person composing Borrowers. Without limiting the
generality of the foregoing, each Borrower assents to any other action or delay
in acting or failure to act on the part of any Agent or Lender with respect to
the failure by any Person composing Borrowers to comply with any of its
respective Obligations, including any failure strictly or diligently to assert
any right or to pursue any remedy or to comply fully with applicable laws or
regulations thereunder, which might, but for the provisions of this Section 2.15
afford grounds for terminating, discharging or relieving any Person composing
Borrowers, in whole or in part, from any of its Obligations under this Section
2.15, it being the intention of each Person composing Borrowers that, so long as
any of the Obligations hereunder remain unsatisfied, the Obligations of such
Person composing Borrowers under this Section 2.15 shall not be discharged
except by performance and then only to the extent of such performance. The
Obligations of each Person composing Borrowers under this Section 2.15 shall not
be diminished or rendered unenforceable by any winding up, reorganization,
arrangement, liquidation, reconstruction or similar proceeding with respect to
any Person composing Borrowers or any Agent or Lender. The joint and several
liability of the Persons composing Borrowers hereunder shall continue in full
force and effect notwithstanding any absorption, merger, amalgamation or any
other change whatsoever in the name, constitution or place of formation of any
of the Persons composing Borrowers or any Agent or Lender.
Each Person composing Borrowers represents and warrants to Agent and Lenders
that such Borrower is currently informed of the financial condition of Borrowers
and of all other circumstances which a diligent inquiry would reveal and which
bear upon the risk of nonpayment of the Obligations. Each Person composing
Borrowers further represents and warrants to Agent and Lenders that such
Borrower has read and understands the terms and conditions of the Loan
Documents. Each Person composing Borrowers hereby covenants that such Borrower
will continue to keep informed of Borrowers' financial condition, the financial
condition of other guarantors, if any, and of all other circumstances which bear
upon the risk of nonpayment or nonperformance of the Obligations.
The provisions of this Section 2.15 are made for the benefit of the Agent, the
Lenders and their respective successors and assigns, and may be enforced by it
or them from time to time against any or all of the Persons composing Borrowers
as often as occasion therefor may arise and without requirement on the part of
any such Agent, Lender, successor or assign first to marshal any of its or their
claims or to exercise any of its or their rights against any of the other
Persons composing Borrowers or to exhaust any remedies available to it or them
against any of the other Persons composing Borrowers or to resort to any other
source or means of obtaining payment of any of the Obligations hereunder or to
elect any other remedy. The provisions of this Section 2.15 shall remain in
effect until all of the Obligations shall have been paid in full or otherwise
fully satisfied. If at any time, any payment, or any part thereof, made in
respect of any of the Obligations, is rescinded or must otherwise be restored or
returned by any Agent or Lender upon
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the insolvency, bankruptcy or reorganization of any of the Persons composing
Borrowers, or otherwise, the provisions of this Section 2.15 will forthwith be
reinstated in effect, as though such payment had not been made.
Each of the Persons composing Borrowers hereby agrees that it will not enforce
any of its rights of contribution or subrogation against the other Persons
composing Borrowers with respect to any liability incurred by it hereunder or
under any of the other Loan Documents, any payments made by it to the Agent or
the Lenders with respect to any of the Obligations or any collateral security
therefor until such time as all of the Obligations have been paid in full in
cash. Any claim which any Borrower may have against any other Borrower with
respect to any payments to any Agent or Lender hereunder or under any other Loan
Documents are hereby expressly made subordinate and junior in right of payment,
without limitation as to any increases in the Obligations arising hereunder or
thereunder, to the prior payment in full in cash of the Obligations and, in the
event of any insolvency, bankruptcy, receivership, liquidation, reorganization
or other similar proceeding under the laws of any jurisdiction relating to any
Borrower, its debts or its assets, whether voluntary or involuntary, all such
Obligations shall be paid in full in cash before any payment or distribution of
any character, whether in cash, securities or other property, shall be made to
any other Borrower therefor.
Each of the Persons composing Borrowers hereby agrees that, after the occurrence
and during the continuance of any Default or Event of Default, the payment of
any amounts due with respect to the indebtedness owing by any Borrower to any
other Borrower is hereby subordinated to the prior payment in full in cash of
the Obligations. Each Borrower hereby agrees that after the occurrence and
during the continuance of any Default or Event of Default, such Borrower will
not demand, xxx for or otherwise attempt to collect any indebtedness of any
other Borrower owing to such Borrower until the Obligations shall have been paid
in full in cash. If, notwithstanding the foregoing sentence, such Borrower shall
collect, enforce or receive any amounts in respect of such indebtedness, such
amounts shall be collected, enforced and received by such Borrower as trustee
for the Lender Group, and such Borrower shall deliver any such amounts to Agent
for application to the Obligations in accordance with Section 2.4(b).
Registered Notes. Administrative Borrower agrees to record each Term Loan C on
the Register referred to in Section 14.1(h). Each Term Loan C recorded on the
Register (the "Registered Loan") may not be evidenced by promissory notes other
than Registered Notes (as defined below). Upon the registration of any Term Loan
C, each Borrower agrees, at the request of any Lender with a Term Loan C
Commitment, to execute and deliver to such Lender a promissory note, in
conformity with the terms of this Agreement, in registered form to evidence such
Registered Loan, in form and substance satisfactory to such Lender, and
registered as provided in Section 14.1(h) (a "Registered Note"), payable to the
order of such Lender and otherwise duly completed. Once recorded on the
Register, a Registered Loan may not be removed from the Register so long as it
remains outstanding, and a Registered Note may not be exchanged for a promissory
note that is not a Registered Note.
CONDITIONS; TERM OF AGREEMENT.
Conditions Precedent to the Initial Extension of Credit. The obligation of the
Lender Group (or any member thereof) to make the initial Advance (or otherwise
to extend any initial credit
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provided for hereunder), is subject to the fulfillment, to the satisfaction of
Agent, of each of the conditions precedent set forth below:
the Closing Date shall occur on or before February 12, 2003;
Agent shall have received (i) the UCC Filing Authorization Letter duly executed
by each Borrower and (ii) satisfactory evidence of the filing of all UCC
financing statements in such office or offices as may be necessary or, in the
opinion of Agent, desirable to perfect the security interests purported to be
created by each applicable Loan Document;
Agent shall have received each of the following documents, in form and substance
satisfactory to Agent and Lenders, duly executed, and each such document shall
be in full force and effect:
the Cash Management Agreements,
the Collateral Assignment of Commercial Tort Claim,
the Contribution Agreement,
the Copyright Security Agreement,
the Disbursement Letter,
the Due Diligence Letter,
the Fee Letter,
the Intercompany Subordination Agreement,
the Key Man Agreement;
the Mortgages,
the Officers' Certificate,
the Pay-Off Letter, together with UCC termination statements and other
documentation evidencing the termination by Existing Lender of its Liens in and
to and control over the properties and assets of the Loan Parties,
the Patent Security Agreement,
the Pledge Agreement, together with (A) all certificates representing the shares
of Stock of Parent's direct and indirect domestic Subsidiaries pledged
thereunder, as well as Stock powers with respect thereto endorsed in blank, and
(B) all promissory notes pledged thereunder, as well as allonges thereto or
other appropriate transfer certificates endorsed in blank,
the Shareholder Subordination Agreement; and
the Trademark Security Agreement;
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Agent shall have received a certificate from the Secretary or the Assistant
Secretary of each Borrower (i) attesting to the resolutions of such Borrower's
board of directors authorizing its execution, delivery, and performance of this
Agreement and the other Loan Documents to which such Borrower is a party and
authorizing specific officers of such Borrower to execute the same and (ii)
certifying the names and true signatures of the officers of such Borrower
authorized to sign each Loan Document to which such Borrower is a party;
Agent shall have received copies of each Borrower's Governing Documents, as
amended, modified, or supplemented to the Closing Date, certified by the
Secretary or the Assistant Secretary of such Borrower and, as of a recent date,
by an appropriate official of the jurisdiction of organization of such Borrower;
Agent shall have received a certificate of status with respect to each Borrower,
dated within 30 days of the Closing Date, such certificate to be issued by the
appropriate officer of the jurisdiction of organization of such Borrower, which
certificate shall indicate that such Borrower is in good standing in such
jurisdiction;
Agent shall have received certificates of status with respect to each Borrower,
each dated within 30 days of the Closing Date, such certificates to be issued by
the appropriate officer of the jurisdictions (other than the jurisdiction of
organization of such Borrower) in which its failure to be duly qualified or
licensed would constitute a Material Adverse Change, which certificates shall
indicate that such Borrower is in good standing in such jurisdictions;
Agent shall have received a certificate of insurance, together with the
endorsements thereto, as are required by Section 6.8, the form and substance of
which shall be satisfactory to Agent;
Agent shall have received a certificate from an Authorized Officer of Parent
certifying as to (i) the optional and mandatory payments and prepayments made by
the Loan Parties, and the reductions of the commitments, under the loan
documents between the Loan Parties and the Existing Lender and (ii) such other
matters regarding the Indenture Documents as Agent may reasonably request;
Agent shall have received opinions of the following counsel to Borrowers in form
and substance satisfactory to the Lender Group:
Mayer, Brown, Xxxx & Maw;
Xxxxx Xxxxxx & Xxxxxxx PLLC (Tennessee);
Hunton & Xxxxxxxx (Virginia);
Xxxxxxx Xxxxx PLLC (W. Virginia); and
Xxxxxxxxxx Xxxxxxxx LLP (Georgia);
Agent shall have received satisfactory evidence (including a certificate of an
Authorized Officer of each Borrower) that all tax returns required to be filed
by Parent and its Subsidiaries have been timely filed and all taxes upon Parent
and its Subsidiaries or their properties, assets,
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income, and franchises (including Real Property taxes and payroll taxes) have
been paid prior to delinquency, except such taxes that are the subject of
Permitted Protests;
Agent shall have received a certificate from an Authorized Officer of each
Borrower certifying (i) as to (A) the truth and accuracy of the representations
and warranties of Borrowers contained in Article 5 and (B) the absence of any
Defaults or Events of Default and (ii) that after giving effect to the
incurrence of Indebtedness under this Agreement, each Borrower is Solvent;
Borrowers shall have the Required Availability after giving effect to the
initial extensions of credit hereunder and the payment of all fees and expenses
required to be paid by Borrowers on the Closing Date under this Agreement and
the other Loan Documents;
Lender Group shall have completed its business, legal, and collateral due
diligence, including (i) a collateral audit and review of Borrowers' books and
records and verification of Borrowers' representations and warranties to the
Lender Group, (ii) a review of all Material Contracts, and (iii) receipt and
review of an Enterprise Valuation of the Loan Parties, in each case of clauses
(i) through (iii), the results of which shall be satisfactory to Lender Group;
Agent shall have received completed reference checks with respect to Borrowers'
senior management, the results of which are satisfactory to Lender Group in its
sole discretion;
Agent shall have received an appraisal of the Net Liquidation Percentage
applicable to Borrowers' Inventory and Equipment, the results of which shall be
satisfactory to Lender Group;
Agent shall have received the Closing Date Business Plan;
Borrowers shall have paid up to, and shall not be required to pay more than,
$567,500 of the Lender Group Expenses (not more than $100,000 of which may be
comprised of legal fees and expenses) incurred prior to the Closing Date and for
which Administrative Borrower has received invoices in connection with the
transactions evidenced by this Agreement;
Agent shall have received (i) appraisals of the Real Property Collateral listed
on Schedule 3.1(s) (the "Eligible Real Property Collateral") satisfactory to
Agent and (ii) mortgagee title insurance policies (or marked commitments to
issue the same) for the Real Property Collateral issued by a title insurance
company satisfactory to Agent (each a "Mortgage Policy" and, collectively, the
"Mortgage Policies") in amounts satisfactory to Agent assuring Agent for the
benefit of Lenders that the Mortgages on such Real Property Collateral are valid
and enforceable first priority mortgage Liens on such Real Property Collateral
free and clear of all defects and encumbrances except Permitted Liens, and the
Mortgage Policies otherwise shall be in form and substance satisfactory to
Agent;
Agent shall have received a phase-I environmental report with respect to each
parcel composing the Eligible Real Property Collateral; the environmental
consultants retained for such reports, the scope of the reports, the
consultant's certification with respect to such reports and the substantive
information reflected in such reports shall be acceptable to Agent;
Agent shall have received fully executed copies of each of the Material
Contracts and the Indenture Documents, together with a certificate of the
Secretary of Parent certifying each such
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document as being a true, correct, and complete copy thereof and that such
agreements remain in full force and effect and that none of the Loan Parties has
breached or defaulted in any of its obligations under such agreements;
Agent shall have received an amendment to the Certificate of Incorporation of
Parent, dated November 5, 1997, providing for payment of any Mandatory
Redemption (as defined therein) not earlier than 91 days after the indefeasible
payment in full of all Obligations, certified by the Secretary of Parent and, as
of a recent date, by an appropriate official of the jurisdiction of organization
of Parent;
Agent shall have received an amendment to each Preferred Stock Unit Award
Agreement, dated as of September 23, 1993, between Parent and the applicable
Principal, in each case, providing for payment by Parent of any or all Preferred
Stock Units or Dividend Equivalents (as defined therein) to such Principal only
in accordance with the terms of this Agreement;
Agent shall have received an amendment to the promissory note dated September
24, 1993, made by Parent in favor of Xxxx X. Xxxxxxx, providing for extension of
the maturity date thereof to a date not earlier than 91 days after the Maturity
Date;
Agent shall have received an amendment to each Employment and Non-Competition
Agreement, dated as of November 5, 1997, between Parent and the applicable
Principal, in each case, providing for (i) a maximum annual management incentive
bonus payable to such Principal for any Fiscal Year pursuant to Section 4(b) of
such agreement in an amount not to exceed 1.5% of Parent's EBITA (as defined
therein) for such Fiscal Year and (ii) an acknowledgment by such Principal that
the proceeds of the Parent may under certain circumstances be prohibited by the
terms of the Loan Agreement from applying the proceeds of the keyman life
insurance policy referenced in Section 7 of such agreement in accordance with
the terms of such agreement;
Agent shall have received a Collateral Assignment of Commercial Tort Claim duly
executed by Xxxxxxx & Xxxxxxxx Company with respect to any and all commercial
tort claims arising out of or otherwise related to Xxxxxxx & Xxxxxxxx Company's
dealings with National Cement Company of California;
Agent shall have received a Collateral Assignment of Key Man Life Insurance
Policy with respect to each Principal (it being understood that the application
of the proceeds of each such Key Man Life Insurance Policy shall be made in
accordance with the Key Man Agreement);
Borrowers shall have received all licenses, approvals or evidence of other
actions required by any Governmental Authority in connection with the execution
and delivery by Borrowers of this Agreement or any other Loan Document or with
the consummation of the transactions contemplated hereby and thereby; and
all other documents and legal matters in connection with the transactions
contemplated by this Agreement shall have been delivered, executed, or recorded
and shall be in form and substance satisfactory to Agent.
Conditions Subsequent to the Initial Extension of Credit. The obligation of the
Lender Group (or any member thereof) to continue to make Advances (or otherwise
extend credit
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hereunder) is subject to the fulfillment, on or before the date applicable
thereto, of each of the conditions subsequent set forth below (the failure by
Borrowers to so perform or cause to be performed constituting an Event of
Default):
within 30 days of the Closing Date, Agent shall have received all certificates
representing the shares of Stock of Parent's direct and indirect Foreign
Subsidiaries pledged to Agent under the Pledge Agreement (to the extent such
Foreign Subsidiary issues certificated Stock and, to the extent such Foreign
Subsidiary does not issue certificated Stock, execute and deliver such other
documents and take such other action as Agent may reasonably request to perfect
Agent's security interest therein), together with Stock powers with respect
thereto endorsed in blank;
within 30 days of the Closing Date, Agent shall have received a Control
Agreement duly executed by Parent and Xxxxxxx Xxxxx Xxxxxx with respect to the
Securities Account in which Parent's Senior Notes are held;
within 30 days of the Closing Date, Agent shall have received evidence that
Parent has used reasonable efforts to amend its indemnity and bonding agreements
with respect to the scope of the security interests provided therein;
within 30 days of the Closing Date, Agent shall have received (i) evidence of
the recording of each Collateral Assignment of Key Man Life Insurance Policy
with the issuer of such Key Man Life Insurance Policy and (ii) proof of
acceptance of such assignment by the issuer of such Key Man Life Insurance
Policy;
within 60 days of the Closing Date, Agent shall have received certified copies
of the Borrowers' policies of insurance, together with the endorsements thereto,
as are required by Section 6.8, the form and substance of which shall be
satisfactory to Agent and its counsel; and
Best Metal Finishing, Inc. shall use its best efforts to provide to Agent within
90 days of the Closing Date a consent by the first mortgagee thereof to the
recording by Agent of a Mortgage on the Real Property located at 0000 Xxxxxxxx
Xxxxxx, Xxxxxx, XX (it being understood that the failure by Best Metal
Finishing, Inc. to obtain such consent, notwithstanding its best efforts to do
so, shall not constitute an Event of Default).
Conditions Precedent to all Extensions of Credit. The obligation of the Lender
Group (or any member thereof) to make any Advances (or to extend any other
credit hereunder) shall be subject to the following conditions precedent:
the representations and warranties contained in this Agreement and the other
Loan Documents shall be true and correct in all material respects on and as of
the date of such extension of credit, as though made on and as of such date
(except to the extent that such representations and warranties relate solely to
an earlier date);
no Default or Event of Default shall have occurred and be continuing on the date
of such extension of credit, nor shall either result from the making thereof;
no injunction, writ, restraining order, or other order of any nature
prohibiting, directly or indirectly, the extending of such credit shall have
been issued and remain in force by any
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Governmental Authority against any Loan Party, Agent or any Lender, or any of
their Affiliates; and
no Material Adverse Change shall have occurred.
Term. This Agreement shall become effective upon the execution and delivery
hereof by Borrowers, Agent, and the Lenders and shall continue in full force and
effect for a term ending on February 10, 2008 (the "Maturity Date"). The
foregoing notwithstanding, the Lender Group, upon the election of the Required
Lenders, shall have the right to terminate its obligations under this Agreement
immediately and without notice upon the occurrence and during the continuation
of an Event of Default.
Effect of Termination. On the date of termination of this Agreement, all
Obligations (including contingent reimbursement obligations of Borrowers with
respect to any outstanding Letters of Credit and including all Bank Product
Obligations) immediately shall become due and payable without notice or demand
(including (a) either (i) providing cash collateral (or at Agent's option, a
letter of credit issued for the account of Borrowers and at Borrowers' expense,
in form and substance satisfactory to Agent, by an issuer and in a currency
acceptable to Agent and payable to Agent as beneficiary) to be held by Agent for
the benefit of those Lenders with a Revolver Commitment in an amount (or in the
case of a letter of credit, a face amount) equal to 105% of the then extant
Letter of Credit Usage, or (ii) causing the original Letters of Credit to be
returned to the Issuing Lender, and (b) providing cash collateral to be held by
Agent for the benefit of Xxxxx Fargo or its Affiliates with respect to the then
extant Bank Product Obligations). No termination of this Agreement, however,
shall relieve or discharge Borrowers of their duties, Obligations, or covenants
hereunder and the Agent's Liens in the Collateral shall remain in effect until
all Obligations have been fully and finally discharged and the Lender Group's
obligations to provide additional credit hereunder have been terminated. When
this Agreement has been terminated and all of the Obligations have been fully
and finally discharged and the Lender Group's obligations to provide additional
credit under the Loan Documents have been terminated irrevocably, Agent will, at
Borrowers' sole expense, execute and deliver any UCC termination statements,
lien releases, mortgage releases, releases or re-assignments of the Key Man Life
Insurance Policies, re-assignments of trademarks, discharges of security
interests, and other similar discharge or release documents (and, if applicable,
in recordable form) as are reasonably necessary to release, as of record, the
Agent's Liens and all notices of security interests and liens previously filed
by Agent with respect to the Obligations.
Early Termination by Borrowers. Borrowers have the option, at any time upon 90
days' prior written notice by Administrative Borrower to Agent, to terminate
this Agreement by paying to Agent, for the benefit of the Lender Group, in cash,
the Obligations (including (a) either (i) providing cash collateral to be held
by Agent for the benefit of those Lenders with a Revolver Commitment in an
amount equal to 105% of the then extant Letter of Credit Usage, or (ii) causing
the original Letters of Credit to be returned to the Issuing Lender, and (b)
providing cash collateral to be held by Agent for the benefit of Xxxxx Fargo or
its Affiliates with respect to the then extant Bank Product Obligations), in
full, together with the Applicable Prepayment Premium (to be allocated based
upon letter agreements between Agent and individual Lenders). If Administrative
Borrower has sent a notice of termination pursuant to the provisions of this
Section, then the Lender Group's obligations to provide credit hereunder shall
terminate and
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Borrowers shall be obligated to repay the Obligations (including (a) either (i)
providing cash collateral to be held by Agent for the benefit of those Lenders
with a Revolver Commitment in an amount equal to 105% of the then extant Letter
of Credit Usage, or (ii) causing the original Letters of Credit to be returned
to the Issuing Lender, and (b) providing cash collateral to be held by Agent for
the benefit of Xxxxx Fargo or its Affiliates with respect to the then extant
Bank Product Obligations), in full, together with the Applicable Prepayment
Premium, on the date set forth as the date of termination of this Agreement in
such notice. In the event of the termination of this Agreement and repayment of
the Obligations at any time prior to the Maturity Date, for any other reason,
including (a) termination upon the election of the Required Lenders to terminate
after the occurrence of an Event of Default, (b) foreclosure and sale of
Collateral, (c) sale of the Collateral in any Insolvency Proceeding, or (d)
restructure, reorganization or compromise of the Obligations by the confirmation
of a plan of reorganization, or any other plan of compromise, restructure, or
arrangement in any Insolvency Proceeding, then, in view of the impracticability
and extreme difficulty of ascertaining the actual amount of damages to the
Lender Group or profits lost by the Lender Group as a result of such early
termination, and by mutual agreement of the parties as to a reasonable
estimation and calculation of the lost profits or damages of the Lender Group,
Borrowers shall pay the Applicable Prepayment Premium to Agent (to be allocated
based upon letter agreements between Agent and individual Lenders), measured as
of the date of such termination. Notwithstanding anything to the contrary
contained herein, (a) Borrowers shall not be obligated to pay any Applicable
Prepayment Premium if this Agreement is terminated as a direct result of a
refinancing of this Agreement by Xxxxx Fargo (or any of its Affiliates), and (b)
the Applicable Prepayment Premium shall not be payable in connection with any
prepayment of the Term Loan B or the Term Loan C.
CREATION OF SECURITY INTEREST.
Grant of Security Interest. Each Borrower hereby grants to Agent, for the
benefit of the Lender Group, a continuing security interest in all of its right,
title, and interest in all of its currently existing and hereafter acquired or
arising Personal Property Collateral in order to secure prompt repayment of any
and all of the Obligations in accordance with the terms and conditions of the
Loan Documents and in order to secure prompt performance by Borrowers of each of
their covenants and duties under the Loan Documents; provided, that, as of the
date of any Borrowing or the issuance of any Letter of Credit, that portion of
such Borrowing or Letter of Credit constituting Credit Facility Obligations (as
determined in accordance with the provisions hereof and in an amount not to
exceed $12,500,000) shall be secured solely by Borrowers' Accounts and Inventory
(and the proceeds and products thereof). The Agent's Liens in and to Borrowers'
Personal Property Collateral shall attach to all such Personal Property
Collateral without further act on the part of Agent or Borrowers. Anything
contained in this Agreement or any other Loan Document to the contrary
notwithstanding, except for Permitted Dispositions, Borrowers have no authority,
express or implied, to dispose of any item or portion of the Collateral.
Negotiable Collateral. In the event that any Collateral, including proceeds, is
evidenced by or consists of Negotiable Collateral, and if and to the extent that
perfection or priority of Agent's security interest is dependent on or enhanced
by possession, the applicable Borrower, immediately upon (but in any event
within 1 Business Day after) the request of Agent, shall endorse and deliver
physical possession of such Negotiable Collateral to Agent.
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Collection of Accounts, General Intangibles, and Negotiable Collateral. At any
time after the occurrence and during the continuation of an Event of Default,
Agent or Agent's designee may (a) notify Account Debtors of Borrowers that the
Accounts, chattel paper, or General Intangibles have been assigned to Agent or
that Agent has a security interest therein, or (b) collect the Accounts, chattel
paper, or General Intangibles directly and charge the collection costs and
expenses to the Loan Account. Each Borrower agrees that it will hold in trust
for the Lender Group, as the Lender Group's trustee, any Collections that it
receives and immediately will deliver said Collections to Agent or a Cash
Management Bank in their original form as received by the applicable Loan Party.
Filing of Financing Statements; Commercial Tort Claims; Delivery of Additional
Documentation Required.
Each Borrower authorizes Agent to file any financing statement required
hereunder, and any continuation statement or amendment with respect thereto, in
any appropriate filing office without the signature of such Borrower where
permitted by applicable law. Each Borrower hereby ratifies the filing of any
financing statement, and any continuation statement or amendment with respect
thereto, filed without the signature of such Borrower prior to the date hereof.
If any Borrower acquires any commercial tort claim (the gross recovery from
which could reasonably be expected to exceed $100,000) after the date hereof,
such Borrower shall immediately (but in any event within 10 days after such
acquisition) deliver to Agent a written description of such commercial tort
claim and shall deliver a written agreement, in form and substance satisfactory
to Agent, pursuant to which such Borrower shall pledge and collaterally assign
all of its right, title and interest in and to such commercial tort claim to
Agent, for the benefit of the Lender Group, as security for the Obligations (a
"Collateral Assignment of Commercial Tort Claim").
At any time upon the request of Agent, Borrowers shall execute and deliver to
Agent, and cause their Subsidiaries to execute and deliver to Agent, any and all
financing statements, original financing statements in lieu of continuation
statements, amendments to financing statements, fixture filings, security
agreements, pledges, assignments, Collateral Assignments of Commercial Tort
Claim, endorsements of certificates of title, and all other documents
(collectively, the "Additional Documents") that Agent may request in its
Permitted Discretion, in form and substance satisfactory to Agent, to create and
perfect and continue perfected or better perfect the Agent's Liens in the
Collateral (whether now owned or hereafter arising or acquired, tangible or
intangible, real or personal), to create and perfect Liens in favor of Agent in
any Owned Real Property acquired after the Closing Date, and in order to fully
consummate all of the transactions contemplated hereby and under the other Loan
Documents, including any Mortgages. To the maximum extent permitted by
applicable law, each Borrower authorizes Agent to execute any such Additional
Documents in the applicable Borrower's name and authorize Agent to file such
executed Additional Documents in any appropriate filing office. To the maximum
extent permitted by applicable law, each Borrower authorizes the filing of any
such Additional Documents without the signature of such Borrower in any
appropriate filing office. In addition, on such periodic basis as Agent shall
require, Borrowers shall (i) provide Agent with a report of all new patentable,
copyrightable, or trademarkable materials acquired or
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generated by Borrowers during the prior period, (ii) cause all patents,
copyrights, and trademarks acquired or generated by Borrowers that are not
already the subject of a registration with the appropriate filing office (or an
application therefor diligently prosecuted) to be registered with such
appropriate filing office in a manner sufficient to impart constructive notice
of Borrowers' ownership thereof, and (iii) cause to be prepared, executed, and
delivered to Agent supplemental schedules to the applicable Loan Documents to
identify such patents, copyrights, and trademarks as being subject to the
security interests created thereunder.
Power of Attorney. Each Borrower hereby irrevocably makes, constitutes, and
appoints Agent (and any of Agent's officers, employees, or agents designated by
Agent) as such Borrower's true and lawful attorney, with power to (a) if such
Borrower refuses to, or fails timely to execute and deliver any of the documents
described in Section 4.4, sign the name of such Borrower on any of the documents
described in Section 4.4, (b) at any time that an Event of Default has occurred
and is continuing, sign such Borrower's name on any invoice or xxxx of lading
relating to the Collateral, drafts against Account Debtors, or notices to
Account Debtors, (c) send requests for verification of Accounts, (d) endorse
such Borrower's name on any Collection item that may come into the Lender
Group's possession, (e) subject to Section 6.8, at any time that an Event of
Default has occurred and is continuing, make, settle, and adjust all claims
under such Borrower's policies of insurance and make all determinations and
decisions with respect to such policies of insurance, and (f) at any time that
an Event of Default has occurred and is continuing, settle and adjust disputes
and claims respecting the Accounts, chattel paper, or General Intangibles
directly with Account Debtors, for amounts and upon terms that Agent determines
to be reasonable, and Agent may cause to be executed and delivered any documents
and releases that Agent determines to be necessary. The appointment of Agent as
each such Borrower's attorney, and each and every one of its rights and powers,
being coupled with an interest, is irrevocable until all of the Obligations have
been fully and finally repaid and performed and the Lender Group's obligations
to extend credit hereunder are terminated.
Right to Inspect. Agent and each Lender (through any of their respective
officers, employees, or agents) shall have the right, from time to time
hereafter, to inspect the Books and to check, test, and appraise the Collateral
in order to verify the financial condition of the Parent and its Subsidiaries or
the amount, quality, value, condition of, or any other matter relating to, the
Collateral.
Control Agreements. Except as otherwise permitted under Sections 7.13 and 7.19
or in the applicable Control Agreement, each Borrower agrees that it will not
transfer any Collateral or any other assets out of any Securities Accounts or
DDAs and, if to another securities intermediary or depository, unless each of
the applicable Borrower, Agent, and the substitute securities intermediary or
depository have entered into a Control Agreement. Upon the occurrence and during
the continuance of a Default or an Event of Default, Agent may notify any
securities intermediary or depository to liquidate the applicable Securities
Account or DDA or any related Investment Property maintained or held thereby and
remit the proceeds thereof to the Agent's Account. Each Borrower hereby agrees
to take any and all action that Agent requests in order for Agent to obtain
control in accordance with Sections 9-104, 9-105, 9-106 and 9-107 of the Code
with respect to any Collateral constituting Securities Accounts, DDAs, chattel
paper, Investment Property and letter-of-credit rights. No arrangement
contemplated hereby or by any Control Agreement in respect of any Securities
Accounts or other Investment Property, or any
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DDAs, electronic paper or letter-of-credit rights, shall be modified by Parent
or any of its Subsidiaries without the prior written consent of Agent. Upon the
occurrence and during the continuance of a Default or Event of Default, Agent
may notify any securities intermediary to liquidate the applicable Securities
Account or any related Investment Property maintained or held thereby and remit
the proceeds thereof to the Agent's Account.
REPRESENTATIONS AND WARRANTIES.
In order to induce the Lender Group to enter into this Agreement, each
Borrower makes the following representations and warranties to the Lender Group
which shall be true, correct, and complete, in all material respects, as of the
Closing Date, and in all material respects at and as of the date of the making
of each Advance (or other extension of credit) made thereafter, as though made
on and as of the date of such Advance (or other extension of credit) (except to
the extent that such representations and warranties relate solely to an earlier
date) and such representations and warranties shall survive the execution and
delivery of this Agreement:
No Encumbrances. Each Loan Party has good and indefeasible title to its
Collateral and its Owned Real Property, free and clear of Liens except for
Permitted Liens.
Eligible Accounts. The Eligible Accounts and R&S Eligible Accounts are bona fide
existing payment obligations of Account Debtors created by the sale and delivery
of Inventory or the rendition of services to such Account Debtors in the
ordinary course of Borrowers' business, owed to Borrowers without defenses,
disputes, offsets, counterclaims, or rights of return or cancellation. As to
each Account that is identified by Administrative Borrower as an Eligible
Account or an R&S Eligible Account, in a borrowing base report submitted to
Agent, such Account is not excluded as ineligible by virtue of one or more of
the excluding criteria set forth in the definition thereof.
Eligible Inventory. All Eligible Inventory is of good and merchantable quality,
free from defects. As to each item of Inventory that is identified by
Administrative Borrower as Eligible Inventory in the borrowing base report most
recently submitted to Agent, such Inventory is not excluded as ineligible by
virtue of one or more of the excluding criteria set forth in the definition of
Eligible Inventory.
Eligible Equipment. All of the Eligible Equipment is used or held for use in
Borrowers' business and is fit for such purposes. As to each item of Equipment
that is identified from time to time by Administrative Borrower as Eligible
Equipment, such equipment is not excluded as ineligible by virtue of one or more
of the excluding criteria set forth in the definition of Eligible Equipment.
Location of Inventory and Equipment. Except as otherwise permitted under Section
6.9, the Inventory and Equipment are not stored with a bailee, warehouseman, or
similar party and are located only at, or are in transit from or to, the
locations identified on Schedule 5.5.
Inventory Records. Each Loan Party keeps correct and accurate records itemizing
and describing the type, quality, and quantity of its Inventory and the book
value thereof.
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STATE OF INCORPORATION; LOCATION OF CHIEF EXECUTIVE OFFICE; FEIN; ORGANIZATIONAL
ID NUMBER; COMMERCIAL TORT CLAIMS.
The jurisdiction of incorporation of each Loan Party is set forth in Schedule
5.7(a).
The chief executive office of each Loan Party is located at the address
indicated in Schedule 5.7(b).
Each Loan Party's FEIN and organizational identification number, if any, are
identified in Schedule 5.7(c).
None of the Loan Parties holds any commercial tort claims, except as set forth
in Schedule 5.7(d).
DUE ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.
Each Loan Party is duly organized and existing and in good standing under the
laws of the jurisdiction of its organization and qualified to do business in any
state where the failure to be so qualified reasonably could be expected to have
a Material Adverse Change.
Set forth on Schedule 5.8(b), is a complete and accurate description of the
authorized capital Stock of each Loan Party, by class, and, as of the Closing
Date, a description of the number of shares of each such class that are issued
and outstanding. Other than as described on Schedule 5.8(b), (i) there are no
subscriptions, options, warrants, or calls relating to any shares of each such
Person's capital Stock, including any right of conversion or exchange under any
outstanding security or other instrument and (ii) no Loan Party is subject to
any obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its capital Stock or any security convertible into or
exchangeable for any of its capital Stock.
Set forth on Schedule 5.8(c), is a complete and accurate list of each Loan
Party's direct and indirect Subsidiaries, showing: (i) the jurisdiction of their
organization; (ii) the number of shares of each class of common and preferred
Stock authorized for each of such Subsidiaries; and (iii) the number and the
percentage of the outstanding shares of each such class owned directly or
indirectly by the applicable Loan Party. All of the outstanding capital Stock of
each such Subsidiary has been validly issued and is fully paid and
non-assessable.
Except as set forth on Schedule 5.8(c), there are no subscriptions, options,
warrants, or calls relating to any shares of any Loan Party's Subsidiaries'
capital Stock, including any right of conversion or exchange under any
outstanding security or other instrument. No Loan Party or any of its respective
Subsidiaries is subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of any Loan Party's
Subsidiaries' capital Stock or any security convertible into or exchangeable for
any such capital Stock.
DUE AUTHORIZATION; NO CONFLICT.
As to each Borrower, the execution, delivery, and performance by such Borrower
of this Agreement and the Loan Documents to which it is a party have been duly
authorized by all necessary action on the part of such Borrower.
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As to each Borrower, the execution, delivery, and performance by such Borrower
of this Agreement and the Loan Documents to which it is a party do not and will
not (i) violate any provision of federal, state, or local law or regulation
applicable to such Borrower, the Governing Documents of such Borrower, or any
order, judgment, or decree of any court or other Governmental Authority binding
on such Borrower, (ii) conflict with, result in a breach of, or constitute (with
due notice or lapse of time or both) a default under any Material Contract of
such Borrower, (iii) result in or require the creation or imposition of any Lien
of any nature whatsoever upon any properties or assets of such Borrower, other
than Permitted Liens, or (iv) require any approval of any such Borrower's
interestholders or any approval or consent of any Person under any Material
Contract of such Borrower.
Other than the filing of financing statements, fixture filings, and Mortgages,
the execution, delivery, and performance by each Borrower of this Agreement and
the Loan Documents to which such Borrower is a party do not and will not require
any registration with, consent, or approval of, or notice to, or other action
with or by, any Governmental Authority or other Person.
As to each Borrower, this Agreement and the other Loan Documents to which such
Borrower is a party, and all other documents contemplated hereby and thereby,
when executed and delivered by such Borrower will be the legally valid and
binding obligations of such Borrower, enforceable against such Borrower in
accordance with their respective terms, except as enforcement may be limited by
equitable principles or by bankruptcy, insolvency, reorganization, moratorium,
or similar laws relating to or limiting creditors' rights generally.
The Agent's Liens are validly created, duly perfected, and first priority Liens,
subject only to Permitted Liens.
The execution, delivery, and performance by each Guarantor of the Loan Documents
to which it is a party have been duly authorized by all necessary action on the
part of such Guarantor.
The execution, delivery, and performance by each Guarantor of the Loan Documents
to which it is a party do not and will not (i) violate any provision of federal,
state, or local law or regulation applicable to such Guarantor, the Governing
Documents of such Guarantor, or any order, judgment, or decree of any court or
other Governmental Authority binding on such Guarantor, (ii) conflict with,
result in a breach of, or constitute (with due notice or lapse of time or both)
a default under any Material Contract of such Guarantor, (iii) result in or
require the creation or imposition of any Lien of any nature whatsoever upon any
properties or assets of such Guarantor, other than Permitted Liens, or (iv)
require any approval of such Guarantor's interestholders or any approval or
consent of any Person under any Material Contract of such Guarantor.
The execution, delivery, and performance by each Guarantor of the Loan Documents
to which such Guarantor is a party do not and will not require any registration
with, consent, or approval of, or notice to, or other action with or by, any
Governmental Authority or other Person.
The Loan Documents to which each Guarantor is a party, and all other documents
contemplated hereby and thereby, when executed and delivered by such Guarantor
will be legally valid and binding obligations of such Guarantor, enforceable
against such Guarantor in accordance with
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their respective terms, except as enforcement may be limited by equitable
principles or by bankruptcy, insolvency, reorganization, moratorium, or similar
laws relating to or limiting creditors' rights generally.
Litigation. Other than those matters disclosed on Schedule 5.10, there are no
actions, suits, or proceedings pending or, to the best knowledge of Borrowers,
threatened against any Loan Party, or any of its Subsidiaries, as applicable,
except for (a) matters that are fully covered by insurance (subject to customary
deductibles), and (b) matters arising after the Closing Date that, if decided
adversely to such Loan Party, or any of its Subsidiaries, as applicable,
reasonably could not be expected to result in a Material Adverse Change.
No Material Adverse Change. All financial statements relating to the Loan
Parties that have been delivered by any Loan Party to the Lender Group have been
prepared in accordance with GAAP (except, in the case of unaudited financial
statements, for the lack of footnotes and being subject to year-end audit
adjustments) and present fairly in all material respects, Loan Parties'
financial condition as of the date thereof and results of operations for the
period then ended. There has not been a Material Adverse Change with respect to
the Loan Parties since the date of the latest financial statements submitted to
the Lender Group on or before the Closing Date.
FRAUDULENT TRANSFER.
Each Loan Party is Solvent.
No transfer of property is being made by any Loan Party and no obligation is
being incurred by any Loan Party in connection with the transactions
contemplated by this Agreement or the other Loan Documents with the intent to
hinder, delay, or defraud either present or future creditors of any Loan Party.
Employee Benefits. None of the Loan Parties, or any of their ERISA Affiliates
maintains or contributes to any Benefit Plan, other than those listed on
Schedule 5.13. Each Loan Party and each ERISA Affiliate has satisfied the
minimum funding standards of ERISA and the IRC with respect to each Benefit Plan
to which it is obligated to contribute. No ERISA Event has occurred nor has any
other event occurred that may result in an ERISA Event that reasonably could be
expected to result in a Material Adverse Change. No Loan Party or any ERISA
Affiliate is required to provide security to any Benefit Plan under Section
401(a)(29) of the IRC.
Environmental Condition. Except as set forth on Schedule 5.14, (a) to Borrowers'
knowledge, none of the Loan Parties' properties or assets has ever been used by
the Loan Parties' or by previous owners or operators in the disposal of, or to
produce, store, handle, treat, release, or transport, any Hazardous Materials,
where such production, storage, handling, treatment, release or transport was in
violation, in any material respect, of applicable Environmental Law, (b) to
Borrowers' knowledge, none of the Loan Parties' properties or assets has ever
been designated or identified in any manner pursuant to any environmental
protection statute as a Hazardous Materials disposal site, (c) none of the Loan
Parties have received notice that a Lien arising under any Environmental Law has
attached to any revenues or to any Real Property owned or operated by the Loan
Parties, and (d) none of the Loan Parties have received a summons, citation,
notice, or directive from the Environmental Protection Agency or any other
federal or
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state governmental agency concerning any action or omission by any Loan Party
resulting in the releasing or disposing of Hazardous Materials into the
environment.
Brokerage Fees. Borrowers have not utilized the services of any broker or finder
(other than Durham Capital Corporation) in connection with Borrowers' obtaining
financing from the Lender Group under this Agreement and no brokerage commission
or finders fee is payable by Borrowers in connection herewith (other than a
brokers fee of $300,000 (of which $150,000 was paid prior to the Closing Date)
payable to Durham Capital Corporation).
Intellectual Property. Each Loan Party owns, or holds valid licenses in, all
Intellectual Property that is necessary to the conduct of its business as
currently conducted. Attached hereto as Schedule 5.16 is a true, correct, and
complete listing of all registered or otherwise material patents, trademarks,
and copyrights as to which each Loan Party is the owner or is an exclusive
licensee.
Leases. The Loan Parties enjoy peaceful and undisturbed possession under all
leases material to the business of the Loan Parties and to which the Loan
Parties are a party or under which the Loan Parties are operating. All of such
leases are valid and subsisting and no material default by the Loan Parties
exists under any of them.
DDAs. Set forth on Schedule 5.18 are all of the DDAs of each Loan Party,
including, with respect to each depository (i) the name and address of that
depository, and (ii) the account numbers of the accounts maintained with such
depository.
Complete Disclosure. All factual information (taken as a whole) furnished by or
on behalf of the Loan Parties in writing to Agent or any Lender (including all
information contained in the Schedules hereto or in the other Loan Documents)
for purposes of or in connection with this Agreement, the other Loan Documents
or any transaction contemplated herein or therein is, and all other such factual
information (taken as a whole) hereafter furnished by or on behalf of any Loan
Party in writing to the Agent or any Lender will be, true and accurate in all
material respects on the date as of which such information is dated or certified
and not incomplete by omitting to state any fact necessary to make such
information (taken as a whole) not misleading in any material respect at such
time in light of the circumstances under which such information was provided. On
the Closing Date, the Closing Date Business Plan represents, and as of the date
on which any other Projections are delivered to Agent, such additional
Projections represent Borrowers' good faith best estimate of the future
performance of Parent and its Subsidiaries for the periods covered thereby.
Indebtedness. Set forth on Schedule 5.20 is a true and complete list of all
Indebtedness of each Loan Party outstanding immediately prior to the Closing
Date that is to remain outstanding after the Closing Date and such Schedule
accurately reflects the aggregate principal amount of such Indebtedness and the
principal terms thereof.
Regulation U. None of the Loan Parties is nor will be engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulations T, U or X of the Board of Governors of the Federal
Reserve System), and no proceeds of any
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Advance or Term Loan will be used to purchase or carry any margin stock or to
extend credit to others for the purpose of purchasing or carrying any margin
stock.
Permits, Etc. Each Loan Party has, and is in compliance with, all permits,
licenses, authorizations, approvals, entitlements and accreditations required
for such Person lawfully to own, lease, manage or operate, or to acquire, each
business and the Real Property currently owned, leased, managed or operated, or
to be acquired, by such Person except for such permits, licenses,
authorizations, approvals, entitlements and accreditations the absence of which
could not reasonably be expected to result in a Material Adverse Change. No
condition exists or event has occurred which, in itself or with the giving of
notice or lapse of time or both, would result in the suspension, revocation,
impairment, forfeiture or non-renewal of any such permit, license,
authorization, approval, entitlement or accreditation, and to Borrowers'
knowledge, there is no claim that any thereof is not in full force and effect.
Material Contracts. Set forth on Schedule 5.23 is a complete and accurate list
as of the Closing Date of all Material Contracts of the Loan Parties, showing
the parties and subject matter thereof and amendments and modifications thereto.
Each such Material Contract (i) is in full force and effect and is binding upon
and enforceable against each Loan Party that is a party thereto and, to
Borrowers' knowledge, all other parties thereto in accordance with its terms,
(ii) has not been otherwise amended or modified, and (iii) is not in default due
to the action of any Loan Party or, to Borrowers' knowledge, any other party
thereto, except for such defaults that could not reasonably be expected to
result in a Material Adverse Change.
Employee and Labor Matters. Except as set forth on Schedule 5.24, there is (a)
no unfair labor practice complaint pending or, to Borrowers' knowledge,
threatened against any Loan Party before any Governmental Authority and no
grievance or arbitration proceeding pending or threatened against any Loan Party
which arises out of or under any collective bargaining agreement, (b) no strike,
labor dispute, slowdown, stoppage or similar action or grievance pending or, to
the best knowledge of Borrowers, threatened against any Loan Party and (c) no
union representation question existing with respect to the employees of any Loan
Party and no union organizing activity taking place with respect to any of the
employees of any of them. Neither any Loan Party nor any ERISA Affiliate of any
Loan Party has incurred any liability or obligation under the Worker Adjustment
and Retraining Notification Act ("WARN") or similar state law, which remains
unpaid or unsatisfied. The hours worked and payments made to employees of each
Loan Party have not been in violation of the Fair Labor Standards Act or any
other applicable legal requirements. All material payments due from any Loan
Party on account of workers compensation, wages and employee health and welfare
insurance and other benefits have been paid or accrued as a liability on the
books of such Loan Party.
Customers and Suppliers. There exists no actual or, to Borrowers' knowledge,
threatened termination, cancellation or limitation of, or modification to or
change in, the business relationship between (a) any Loan Party, on the one
hand, and any municipality, customer or any group thereof, on the other hand or
(b) any Loan Party, on the one hand, and any supplier thereof or distributor
therefor, on the other hand, which termination, cancellation, limitation,
modification or change in any such case could, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Change.
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Properties. 40. Each Loan Party has good and marketable title to, or valid
leasehold interests in, all property and assets material to its business
(collectively, the "Properties"), free and clear of all Liens except Permitted
Liens. The Properties are in good working order and condition, ordinary wear and
tear excepted.
Schedule 5.26 sets forth a complete and accurate list of the location, by state
and street address, of all Real Property.
Indenture Documents. 41. The incurrence of Indebtedness by Borrowers pursuant to
this Agreement, including through (i) the Advances and Term Loans made by the
Lenders to the Borrowers on and after the Closing Date and (ii) the issuance of
Letters of Credit, in each case, subject to the limitations set forth in this
Agreement, does not and will not conflict with or result in a default under any
Indenture Document.
The Obligations constitute "Permitted Debt" as such term is defined in the
Indenture. The Revolver Usage and the aggregate principal amount of the Term
Loans shall first constitute Senior Credit Facility Obligations to the extent
permitted by the definition of Senior Credit Facility Obligations before the
Revolver Usage and the aggregate principal amount of the Term Loans shall
constitute Credit Facility Obligations. The Senior Credit Facility Obligations
constitute the "Senior Credit Facility" as such term is defined in the
Indenture. The Credit Facility Obligations constitute a "Credit Facility" as
such term is defined in the Indenture.
The Loan Parties have not created, incurred, assumed, permitted, guaranteed, or
otherwise become, directly or indirectly, liable with respect to any
Indebtedness permitted pursuant to clauses (a) or (k) of the definition of
"Permitted Debt" contained in Section 4.09 of the Indenture, other than in
respect of the Obligations and other Indebtedness of the Loan Parties that has
been repaid in full prior to or on the Closing Date.
Inactive Subsidiaries. 42. None of the Inactive Subsidiaries (i) has any
material operations or conducts any material business, (ii) owns any material
assets or (iii) has any material liabilities.
The Inactive Subsidiaries taken as a whole do not (i) own assets with an
aggregate fair market value in excess of $250,000 or (ii) have liabilities in an
aggregate amount in excess of $250,000.
AFFIRMATIVE COVENANTS.
Each Borrower covenants and agrees that, so long as any credit
hereunder shall be available and until full and final payment of the Obligations
and the termination of this Agreement, Borrowers shall and shall cause each of
their respective Subsidiaries to do all of the following:
Accounting System. Maintain a system of accounting that enables Parent and its
Subsidiaries to produce financial statements in accordance with GAAP and
maintain records pertaining to the Collateral that contain information as from
time to time reasonably may be requested by Agent. Parent and its Subsidiaries
also shall keep an inventory reporting system that shows all additions, sales,
claims, returns, and allowances with respect to the Inventory.
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Collateral Reporting. Provide Agent (with copies for each Lender) with the
following documents at the following times in form satisfactory to Agent:
================================================================================
Weekly (a) on the first Business Day of each
week, a calculation of the Borrowing
Base as of the immediately preceding
Friday; provided that, for any week that
includes the final calendar day of a
month, such Borrowing Base calculation
shall be provided on the first Business
Day of the immediately following month,
(b) on the first Business Day of each week,
copies of any invoices billed during the
immediately preceding week in an amount
in excess of $500,000 and credit memos
with respect to credits given during the
immediately preceding week in an amount
in excess of $200,000, and
(c) a detailed calculation of R&S
Availability, together with a
reconciliation to the detailed
calculation of R&S Availability
previously provided to Agent.
--------------------------------------------------------------------------------
Monthly (not later than the 10th (d) a detailed calculation of the
Business Day of each month) "Borrowing Base" (as defined in the
Indenture),
(e) Inventory reports specifying each Loan
Party's cost of its Inventory, by
category and location, with additional
detail showing additions to and
deletions from the Inventory.
(f) a detailed calculation of Accounts that
are not Eligible Accounts,
(g) a detailed aging, by total, of the
Accounts, together with a
reconciliation to the detailed
calculation of the Borrowing Base
previously provided to Agent,
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(h) a summary aging, by vendor, of the
accounts payable of each of Clinch
River Corporation, Xxxxxx Screen and
Manufacturing, Inc., Xxxxxx-Xxxxxx
Fasteners, Inc., Xxxxxxx & Xxxxxxxx
Company, Ohio Rod Products, division
of Elgin National Industries, Inc.
and Centrifugal and Mechanical
Industries, division of Elgin National
Industries, Inc., and an open payable
listing, by vendor, for all other
Loan Parties (such other Loan Parties,
the "Open Payable Parties"); provided
that Borrowers shall use their best
efforts to provide, commencing 60
days after the Closing Date,
monthly summary agings, by vendor, of
the accounts payable for each of the
Open Payable Parties, and
(i) a calculation of Dilution and R&S
Dilution for the prior month.
--------------------------------------------------------------------------------
Upon request by Agent or any (j) a physical inventory of the Loan
Lender Parties' Inventory, conducted by a third
party service acceptable to Agent, the
results of which shall be satisfactory
to Agent and be reflected by appropriate
adjustments to the Borrowing Base,
(k) an appraisal of the Loan Parties'
Equipment and Real Property Collateral,
conducted by a third party appraiser
acceptable to Agent, the results of
which shall be satisfactory to Agent and
be reflected by appropriate adjustments
to the Term Loan A Amount,
(l) an Enterprise Valuation of the Loan
Parties, the results of which shall be
satisfactory to Agent and be reflected
by appropriate recalculation of the Term
Loan C Deficit,
(m) a detailed list of each Loan Party's
customers,
(n) a report regarding each Loan Party's
accrued, but unpaid, ad valorem taxes,
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(o) copies of invoices in connection with
the Accounts, credit memos, remittance
advices, deposit slips, shipping and
delivery documents in connection with
the Accounts and, for Inventory and
Equipment acquired by any Loan Party,
purchase orders and invoices,
and
(p) such other reports as to the Collateral,
or the financial condition of any Loan
Party, as Agent or any Lender may
request.
================================================================================
Agent shall have the right to increase the frequency of reporting
(including the institution of daily reporting) set forth above if Excess
Availability shall be less than $5,000,000 for any 30 consecutive day period. In
addition, each Borrower agrees to cooperate fully with Agent to facilitate and
implement a system of electronic collateral reporting in order to provide
electronic reporting of each of the items set forth above.
Financial Statements, Reports, Certificates. Deliver to Agent, with copies to
each Lender:
as soon as available, but in any event within 30 days (45 days in the case of a
month that is the end of a fiscal quarter) after the end of each month during
each Fiscal Year,
a company prepared consolidated and consolidating balance sheet (including the
amount of any book overdraft) and income statement, and consolidated statement
of cash flow, in each case, covering Parent's and its Subsidiaries' operations
during such period,
a certificate signed by an Authorized Officer of Parent to the effect that:
the financial statements delivered hereunder have been prepared in accordance
with GAAP (except for the lack of footnotes and being subject to year-end audit
adjustments) and fairly present in all material respects the financial condition
of Parent and its Subsidiaries,
the representations and warranties of the Loan Parties contained in this
Agreement and the other Loan Documents are true and correct in all material
respects on and as of the date of such certificate, as though made on and as of
such date (except to the extent that such representations and warranties relate
solely to an earlier date), and
there does not exist any condition or event that constitutes a Default or Event
of Default (or, to the extent of any non-compliance, describing such
non-compliance as to which he or she may have knowledge and what action
Borrowers have taken, are taking, or propose to take with respect thereto), and
for each month that is the date on which a financial covenant in Section 7.20 is
to be tested, a Compliance Certificate demonstrating, in reasonable detail,
compliance at the end of such period with the applicable financial covenants
contained in Section 7.20, and
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as soon as available, but in any event within 90 days after the end of each
Fiscal Year,
consolidated financial statements of Parent and its Subsidiaries for each such
Fiscal Year, audited by independent certified public accountants reasonably
acceptable to Agent and certified, without any qualifications (including (A) any
"going concern" or like qualification or exception or (B) any qualification as
to the scope of such audit), by such accountants to have been prepared in
accordance with GAAP (such audited financial statements to include a
consolidated balance sheet, income statement, and statement of cash flow and, if
prepared, such accountants' letter to management),
a certificate of such accountants addressed to Agent and the Lenders stating
that such accountants do not have knowledge of the existence of any Default or
Event of Default under Section 7.20, and
a company prepared consolidating balance sheet, income statement, and statement
of cash flow covering Parent's and its Subsidiaries' operations during such
period, together with a reconciliation, in form and substance satisfactory to
Agent, to the audited financial statements delivered to Agent pursuant to clause
(i) above,
as soon as available, but in any event within 30 days prior to the start of each
Fiscal Year, copies of Parent's Projections, in form and substance (including as
to scope and underlying assumptions) satisfactory to Agent, in its sole
discretion, for the forthcoming 3 Fiscal Years, year by year, and for the
forthcoming Fiscal Year, month by month, certified by an Authorized Officer of
Parent as being such officer's good faith best estimate of the financial
performance of Parent and its Subsidiaries during the period covered thereby,
if and when filed by any Loan Party,
10-Q quarterly reports, Form 10-K annual reports, and Form 8-K current reports,
any other filings made by such Loan Party with the SEC,
upon Agent's or any Lender's request, copies of such Loan Party's federal income
tax returns, and any amendments thereto, filed with the Internal Revenue
Service, and
any other information that is provided by such Loan Party to its shareholders
generally,
if and when filed by any Loan Party and as requested by Agent, satisfactory
evidence of payment of applicable excise taxes in each jurisdictions in which
(i) any Loan Party conducts business or is required to pay any such excise tax,
(ii) where any Loan Party's failure to pay any such applicable excise tax would
result in a Lien on the properties or assets of any Loan Party, or (iii) where
any Loan Party's failure to pay any such applicable excise tax reasonably could
be expected to result in a Material Adverse Change,
promptly after the commencement thereof, but in any event within 15 days after
the service of process with respect thereto on any Loan Party, notice of all
actions, suits or proceedings brought by or against any Loan Party before any
Governmental Authority which, if determined adversely to such Loan Party, could
reasonably be expected to result in a Material Adverse Change,
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(i) promptly after receipt or delivery thereof, copies of any material notices
that any Loan Party receives from or sends to any Person in connection with the
Indenture Documents, and (ii) within 2 days of the effective date thereof, any
amendments, modifications, waivers or other changes to any of the Indenture
Documents,
as soon as any Loan Party has knowledge of any event or condition that
constitutes a Default or an Event of Default, notice thereof and a statement of
the curative action that the Loan Parties propose to take with respect thereto,
(i) promptly and in any event (A) within 10 days after any Loan Party or any
ERISA Affiliate thereof knows or has reason to know that any Termination Event
described in clause (i) of the definition of Termination Event with respect to
any Benefit Plan has occurred, (B) within 10 days after any Loan Party or any
ERISA Affiliate thereof knows or has reason to know that any other Termination
Event with respect to any Benefit Plan has occurred, or (C) within 10 days after
any Loan Party or any ERISA Affiliate thereof knows or has reason to know that
an accumulated funding deficiency has been incurred or an application has been
made to the Secretary of the Treasury for a waiver or modification of the
minimum funding standard (including installment payments) or an extension of any
amortization period under Section 412 of the IRC or the equivalent provision
under any federal, state, local or foreign counterparts or equivalents thereof
with respect to a Benefit Plan, a statement of an Authorized Person setting
forth the details of such occurrence and the action, if any, which such Loan
Party or such ERISA Affiliate propose to take with respect thereto, (ii)
promptly and in any event within 3 days after receipt thereof by any Loan Party
or any ERISA Affiliate thereof from the PBGC, copies of each notice received by
any Loan Party or any ERISA Affiliate thereof of the PBGC's intention to
terminate any Plan or to have a trustee appointed to administer any Plan, (iii)
promptly and in any event within 10 days after the filing thereof with the
Internal Revenue Service if requested by Agent, copies of each Schedule B
(Actuarial Information) or the federal, state, local or foreign equivalent
thereof to the annual report (Form 5500 Series) or the federal, state, local or
foreign equivalent thereof with respect to each Benefit Plan and Multiemployer
Plan, (iv) promptly and in any event within 10 days after any Loan Party or any
ERISA Affiliate thereof knows or has reason to know that a required installment
within the meaning of Section 412 of the IRC or the equivalent provision under
any federal, state, local or foreign counterparts or equivalents thereof has not
been made when due with respect to a Benefit Plan, (v) promptly and in any event
within 3 days after receipt thereof by any Loan Party or any ERISA Affiliate
thereof from a sponsor of a Multiemployer Plan or from the PBGC, a copy of each
notice received by any Loan Party or any ERISA Affiliate thereof concerning the
imposition or amount of withdrawal liability under Section 4202 of ERISA or the
equivalent provision under any federal, state, local or foreign counterparts or
equivalents thereof or indicating that such Multiemployer Plan may enter
reorganization status under Section 4241 of ERISA or the equivalent provision
under any federal, state, local or foreign counterparts or equivalents thereof,
and (vi) promptly and in any event within 10 days after any Loan Party or any
ERISA Affiliate thereof send notice of a plant closing or mass layoff (as
defined in the Worker Adjustment and Retraining Notification Act) to employees,
copies of each such notice sent by any Loan Party or any ERISA Affiliate
thereof,
upon the request of Agent or any Lender, any other report reasonably requested
relating to the financial condition of Parent or any of its Subsidiaries.
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In addition to the financial statements referred to above, Borrowers agree to
deliver financial statements prepared on both a consolidated and consolidating
basis and agree that no Subsidiary of the Parent, will have a fiscal year
different from that of Parent. Borrowers agree that their independent certified
public accountants are authorized to communicate with Agent and to release to
Agent whatever financial information concerning the Parent and its Subsidiaries
that Agent reasonably may request. Each Borrower waives the right to assert a
confidential relationship, if any, it may have with any accounting firm or
service bureau in connection with any information requested by Agent pursuant to
or in accordance with this Agreement, and agree that Agent may contact directly
any such accounting firm or service bureau in order to obtain such information.
Guarantor Reports. Cause each Guarantor to deliver its annual financial
statements at the time when Parent provides its audited financial statements to
Agent, but only to the extent such Guarantor's financial statements are not
consolidated with Parent's financial statements, and copies of all federal
income tax returns as soon as the same are available and in any event no later
than 30 days after the same are required to be filed by law.
Return. Cause returns and allowances as between Loan Parties and their Account
Debtors, to be on the same basis and in accordance with the usual customary
practices of the Loan Parties, as they exist at the time of the execution and
delivery of this Agreement. If, at a time when no Event of Default has occurred
and is continuing, any Account Debtor returns any Inventory to any Loan Party,
the applicable Loan Party promptly shall determine the reason for such return
and, if the applicable Loan Party accepts such return, issue a credit memorandum
(with a copy to be sent to Agent) in the appropriate amount to such Account
Debtor. If, at a time when an Event of Default has occurred and is continuing,
any Account Debtor returns any Inventory to any Loan Party, the applicable Loan
Party promptly shall determine the reason for such return and, if Agent consents
(which consent shall not be unreasonably withheld), issue a credit memorandum
(with a copy to be sent to Agent) in the appropriate amount to such Account
Debtor.
Maintenance of Properties. Subject to Section 7.4, maintain and preserve all of
their properties which are necessary or useful in the proper conduct of their
business in good working order and condition, ordinary wear and tear excepted,
and comply at all times with the provisions of all leases to which it is a party
as lessee, so as to prevent any loss or forfeiture thereof or thereunder.
Taxes. Cause all assessments and taxes, whether real, personal, or otherwise,
due or payable by, or imposed, levied, or assessed against the Loan Parties or
any of their assets to be paid in full, before delinquency or before the
expiration of any extension period, except to the extent that the validity of
such assessment or tax shall be the subject of a Permitted Protest. Borrowers
will make timely payment or deposit of all tax payments and withholding taxes
required of it by applicable laws, including those laws concerning F.I.C.A.,
F.U.T.A., state disability, and local, state, and federal income taxes, and
will, upon request, furnish Agent with proof satisfactory to Agent indicating
that they have made such payments or deposits. Borrowers shall deliver
satisfactory evidence of payment of applicable excise taxes in each
jurisdictions in which any Loan Party is required to pay any such excise tax.
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INSURANCE.
At Borrowers' expense, maintain insurance respecting the Loan Parties' property
and assets wherever located, covering loss or damage by fire, theft, explosion,
and all other hazards and risks as ordinarily are insured against by other
Persons engaged in the same or similar businesses. The Loan Parties also shall
maintain business interruption, public liability, and product liability
insurance, as well as insurance against larceny, embezzlement, and criminal
misappropriation. All such policies of insurance shall be in such amounts and
with such insurance companies as are reasonably satisfactory to Agent. Borrowers
shall deliver copies of all such policies to Agent with a satisfactory lender's
loss payable endorsement naming Agent as sole loss payee or additional insured,
as appropriate. Each policy of insurance or endorsement shall contain a clause
requiring the insurer to give not less than 30 days' prior written notice to
Agent in the event of cancellation of the policy for any reason whatsoever.
Administrative Borrower shall give Agent prompt notice of any loss covered by
such insurance. Agent shall have the exclusive right to adjust any losses
payable under any such insurance policies in excess of $500,000 (or in any
amount after the occurrence and during the continuance of an Event of Default),
without any liability to the Loan Parties whatsoever in respect of such
adjustments. Except as provided in the proviso at the end of this sentence, any
monies in excess of $500,000 received as payment for any loss under any
insurance policy mentioned above (other than liability insurance policies) or as
payment of any award or compensation for condemnation or taking by eminent
domain, shall be paid over to Agent to be applied at the option of the Agent
either to the prepayment of the Obligations or shall be disbursed to
Administrative Borrower under staged payment terms reasonably satisfactory to
the Agent for application to the cost of repairs, replacements, or restorations;
provided that, so long as no Default or Event of Default shall have occurred and
be continuing, monies received as payment for any such loss under any insurance
policy or any such condemnation or taking in an amount not exceeding $500,000
for any such occurrence may be used to replace, repair or restore Collateral if
such payments are immediately deposited in a DDA subject to a Control Agreement
and in accordance with Section 2.4(d)(iii)(B). Any such repairs, replacements,
or restorations shall be effected with reasonable promptness and shall be of a
value at least equal to the value of the items or property destroyed prior to
such damage or destruction.
The Loan Parties shall not take out separate insurance concurrent in form or
contributing in the event of loss with that required to be maintained under this
Section 6.8, unless Agent is included thereon as named insured with the loss
payable to Agent under a lender's loss payable endorsement or its equivalent.
Administrative Borrower immediately shall notify Agent whenever such separate
insurance is taken out, specifying the insurer thereunder and full particulars
as to the policies evidencing the same, and copies of such policies promptly
shall be provided to Agent.
Location of Inventory and Equipment. Keep the Inventory and Equipment only at,
or in transit from or to, the locations identified on Schedule 5.5; provided,
however, that (a) Borrowers may move Inventory on consignment with an aggregate
book value not to exceed $200,000 at any time to locations within the
continental United States not identified on Schedule 5.5, provided that (i) such
Inventory does not constitute Eligible Inventory and (ii) notice of the new
location thereof is given by Administrative Borrower to Agent within 30 days of
movement to
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such new location and (b) Administrative Borrower may amend Schedule 5.5 so long
as such amendment occurs by written notice to Agent not less than 30 days prior
to the date on which the Inventory or Equipment is moved to such new location,
so long as such new location is within the continental United States, and so
long as, at the time of such written notification, the applicable Loan Party
provides any financing statements or fixture filings necessary to perfect and
continue perfected the Agent's Liens on such assets and also provides to Agent a
Collateral Access Agreement.
Compliance with Laws. Comply with the requirements of all applicable laws,
rules, regulations, and orders of any Governmental Authority, including the Fair
Labor Standards Act and the Americans With Disabilities Act, other than laws,
rules, regulations, and orders the non-compliance with which, individually or in
the aggregate, would not result in and reasonably could not be expected to
result in a Material Adverse Change.
Leases. Pay when due all rents and other amounts payable under any leases to
which any Loan Party is a party or by which any Loan Party's properties and
assets are bound, unless such payments are the subject of a Permitted Protest.
Customs Brokers. Pay when due all amounts payable to customs brokers, unless
such payments are the subject of a Permitted Protest.
Brokerage Commissions. Pay any and all brokerage commission or finders fees
incurred in connection with or as a result of Borrowers' obtaining financing
from the Lender Group under this Agreement. Borrowers agree and acknowledge that
payment of all such brokerage commissions or finders fees shall be the sole
responsibility of Borrowers, and each Borrower agrees to indemnify, defend, and
hold Agent and the Lender Group harmless from and against any claim of any
broker or finder arising out of Borrowers' obtaining financing from the Lender
Group under this Agreement.
Existence. Subject to Section 7.3, at all times preserve and keep in full force
and effect each Loan Party's valid existence and good standing and any rights
and franchises material to any Loan Party's business.
ENVIRONMENTAL.
Keep any property either owned or operated by any Loan Party free of any
Environmental Liens or post bonds or other financial assurances sufficient to
satisfy the obligations or liability evidenced by such Environmental Liens, (b)
comply, in all material respects, with Environmental Laws and provide to Agent
documentation of such compliance which Agent reasonably requests, (c) promptly
notify Agent of any release of a Hazardous Material of any reportable quantity,
from or onto property owned or operated by any Loan Party and take any Remedial
Actions required to xxxxx said release or otherwise to come into compliance with
applicable Environmental Law, and (d) promptly, but in any event within 5 days
of receipt thereof, provide Agent with written notice of the following: (i)
notice that an Environmental Lien has been filed against any of the real or
personal property of any Loan Party, (ii) notice of commencement of any
Environmental Action or that an Environmental Action will be filed against any
Loan Party, and (iii) notice of a violation, citation, or other administrative
order with respect to an
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Environmental Action which reasonably could be expected to result in a Material
Adverse Change.
Organizational ID Number; Commercial Tort Claims. Immediately, (i) but in any
event within 5 Business Days, upon obtaining an organizational identification
number (to the extent that any Loan Party has not been issued such number on or
prior to the Closing Date), notify Agent in writing and deliver an updated
Schedule 5.7(c), and (ii) but in any event within 10 days, upon obtaining any
commercial tort claim (the gross recovery from which could reasonably be
expected to exceed $100,000), deliver an updated Schedule 5.7(d) and the other
documents required under Section 4.4.
Other Disclosure Updates. Promptly and in no event later than 5 Business Days
after obtaining knowledge thereof, (a) notify Agent if any written information,
exhibit, or report furnished to the Lender Group contained any untrue statement
of a material fact or omitted to state any material fact necessary to make the
statements contained therein not misleading in light of the circumstances in
which made, and (b) correct any defect or error that may be discovered therein
or in any Loan Document or in the execution, acknowledgement, filing, or
recordation thereof.
Formation of Subsidiaries. At the time that either (x) any Loan Party forms any
direct or indirect Subsidiary organized under the laws of the United States or
any state thereof or acquires any direct or indirect Subsidiary organized under
the laws of the United States or any state thereof after the Closing Date or (y)
designates an Inactive Subsidiary to be an active Subsidiary (each a "New
Subsidiary"), such Loan Party shall (a) cause such New Subsidiary to provide to
Agent a subsidiary guaranty, subsidiary security agreement, and such other
security documents (including Mortgages with respect to any Real Property of
such New Subsidiary), together with appropriate UCC-1 financing statements (and
with respect to all property subject to a Mortgage, fixture filings), all in
form and substance satisfactory to Agent, (b) provide to Agent a pledge
agreement and appropriate certificates and powers or UCC-1 financing statements,
pledging all (or in the case of a New Subsidiary organized outside of the United
States, 65%) of the direct or beneficial ownership interest in such New
Subsidiary, in form and substance satisfactory to Agent, and (c) provide to
Agent all other documentation, including one or more opinions of counsel
satisfactory to Agent, which in its opinion is appropriate with respect to such
formation and the execution and delivery of the applicable documentation
referred to above (including policies of title insurance or other documentation
with respect to all property subject to a Mortgage). Any document, agreement or
instrument executed or issued pursuant to this Section 6.18 shall be a "Loan
Document" for purposes of this Agreement.
NEGATIVE COVENANTS.
Each Borrower covenants and agrees that, so long as any credit
hereunder shall be available and until full and final payment of the Obligations
and the termination of this Agreement, Borrowers will not and will not permit
any of their respective Subsidiaries to do any of the following:
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Indebtedness. Create, incur, assume, permit, guarantee, or otherwise become or
remain, directly or indirectly, liable with respect to any Indebtedness, except:
Indebtedness evidenced by this Agreement and the other Loan Documents, together
with Indebtedness owed to Underlying Issuers with respect to Underlying Letters
of Credit;
Indebtedness set forth on Schedule 5.20;
Permitted Purchase Money Indebtedness;
Indebtedness under the Indenture Documents;
refinancings, renewals, or extensions of Indebtedness permitted under clauses
(b), (c) and (d) of this Section 7.1 (and continuance or renewal of any
Permitted Liens associated therewith) so long as: (i) the terms and conditions
of such refinancings, renewals, or extensions do not, in Agent's reasonable
judgment, materially impair the prospects of repayment of the Obligations by the
Loan Parties or materially impair the Loan Parties' creditworthiness, (ii) such
refinancings, renewals, or extensions do not result in an increase in the
principal amount of, or interest rate with respect to, the Indebtedness so
refinanced, renewed, or extended or add one or more of the Loan Parties as
liable with respect thereto, if such additional Loan Parties were not liable
with respect to the original Indebtedness, (iii) such refinancings, renewals, or
extensions do not result in a shortening of the average weighted maturity of the
Indebtedness so refinanced, renewed, or extended, nor are they on terms or
conditions that, taken as a whole, are materially more burdensome or restrictive
to the applicable Loan Party, and (iv) if the Indebtedness that is refinanced,
renewed, or extended was subordinated in right of payment to the Obligations,
then the terms and conditions of the refinancing, renewal, or extension
Indebtedness must include subordination terms and conditions that are at least
as favorable to the Lender Group as those that were applicable to the
refinanced, renewed, or extended Indebtedness;
Indebtedness under Hedge Agreements that hedge against currency or interest rate
fluctuations and that are incurred in the ordinary course of business of Parent
and its Subsidiaries consistent with prudent business practice and not for
speculative purposes;
Indebtedness permitted under Section 7.6;
Indebtedness composing Permitted Investments;
Indebtedness under (i) the CCC Indemnity Agreement with respect to surety or
appeals bonds issued pursuant thereto, (ii) the AIC Indemnity Agreement with
respect to surety or appeals bonds issued pursuant thereto prior to the Closing
Date and (iii) any other surety or bonding agreements with respect to surety or
appeal bonds issued by or for the benefit of a Borrower in the ordinary course
of business, the terms and conditions of which, including waiver of subrogation
rights of the surety and collateral and payment sharing arrangements or other
intercreditor arrangements between the surety and Agent, are acceptable to Agent
in its sole discretion;
Indebtedness in an aggregate principal amount of $1,446,000 existing as of the
Closing Date and evidenced by the promissory note made by Parent in favor of
Xxxx X. Xxxxxxx, provided that such
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Indebtedness is fully subordinated to the Obligations pursuant to a Shareholder
Subordination Agreement; and
Indebtedness arising pursuant to Section 9.2 of the partnership agreement of SHC
Investment Partnership (as amended and in effect on the Closing Date) in respect
of any shortfall in amounts owed to a Principal's estate after giving effect to
distribution of proceeds from such Principal's Key Man Life Insurance Policy,
provided that such Indebtedness is evidenced by an unsecured promissory note,
the terms, form and substance of which shall be satisfactory to Agent, which
promissory note shall be fully subordinated to the Obligations pursuant to a
subordination agreement in form and substance satisfactory to Agent.
Notwithstanding anything to the contrary contained in this Agreement or any
other Loan Document, the Loan Parties shall not create, incur, assume, permit,
guarantee, or otherwise become or remain, directly or indirectly, liable with
respect to any Indebtedness permitted pursuant to clauses (a) and (k) of the
definition of "Permitted Debt" contained in Section 4.09 of the Indenture, other
than in respect of the Obligations.
Liens. Create, incur, assume, or permit to exist, directly or indirectly, any
Lien on or with respect to any of its assets, of any kind, whether now owned or
hereafter acquired, or any income or profits therefrom, except for Permitted
Liens (including Liens that are replacements of Permitted Liens to the extent
that the original Indebtedness is refinanced, renewed, or extended under Section
7.1(e) and so long as the replacement Liens only encumber those assets that
secured the refinanced, renewed, or extended Indebtedness).
RESTRICTIONS ON FUNDAMENTAL CHANGES.
Enter into any merger, consolidation, reorganization, or recapitalization, or
reclassify its Stock.
Liquidate, wind up, or dissolve itself (or suffer any liquidation or
dissolution).
Convey, sell, lease, license, assign, transfer, or otherwise dispose of, in one
transaction or a series of transactions, all or any substantial part of its
assets.
Clauses (a), (b) and (c) of this Section 7.3 shall not apply to the merger,
consolidation or liquidation of (i) a Borrower with and into another Borrower or
the Parent (so long as the Parent is the surviving entity), (ii) a Guarantor
with and into another Guarantor or a Borrower, (iii) an Inactive Subsidiary with
and into a Guarantor or a Borrower or (iv) a Foreign Subsidiary with and into
another Foreign Subsidiary, each of which shall be permitted hereunder, in each
case, so long as Agent has received not less than 5 Business Days prior written
notice of such merger, consolidation or liquidation.
Disposal of Assets. Other than Permitted Dispositions, convey, sell, lease,
license, assign, transfer, or otherwise dispose of any of the assets of any Loan
Party.
Change Name. Change any Loan Party's name, FEIN, organizational identification
number, state of incorporation, corporate structure or identity, or add any new
fictitious name; provided, however, that a Loan Party may change its name, FEIN,
organizational identification number or state of incorporation upon at least 30
days prior written notice by Administrative Borrower to
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Agent of such change and Agent's acknowledgment thereof and so long as, at the
time of such written notification, such Person provides any financing statements
or fixture filings necessary to perfect and continue perfected the Agent's
Liens.
Guarantee. Guarantee or otherwise become in any way liable with respect to the
obligations of any third Person except (i) by endorsement of instruments or
items of payment for deposit to the account of the Loan Parties or which are
transmitted or turned over to Agent, (ii) for guarantees of Indebtedness
permitted under Section 7.1 and guarantees set forth on Schedule 5.20, and (iii)
any guarantee of Indebtedness or any other obligation permitted by the terms of
this Agreement.
Nature of Business.
43. Make any change in the principal nature of any Loan Party's
business.
44. Permit any Inactive Subsidiary to (i) have any material
operations or conduct any material business, (ii) own any material assets or
(iii) incur any material liabilities.
45. Permit the Inactive Subsidiaries taken as a whole to (i) own
assets with an aggregate fair market value in excess of $250,000 or (ii) incur
liabilities in an aggregate amount in excess of $250,000.
46. Designate any Subsidiary as an "Unrestricted Subsidiary"
under the Indenture.
PAYMENTS, PREPAYMENTS AND AMENDMENTS.
Except in connection with (i) a refinancing permitted by Section 7.1(e) or (ii)
a prepayment of Purchase Money Indebtedness in connection with the sale of the
fixed assets acquired with the proceeds thereof, prepay, redeem, defease,
purchase, or otherwise acquire any Indebtedness of any Loan Party, other than
the Obligations in accordance with this Agreement.
Except in connection with a refinancing permitted by Section 7.1(e), directly or
indirectly, amend, modify, alter, increase, or change any of the terms or
conditions of any agreement, instrument, document, indenture, or other writing
evidencing or concerning Indebtedness permitted under Sections 7.1(b), (c) or
(d).
(i) Amend, modify or otherwise change its Governing Documents, including by the
filing or modification of any certificate of designation, or any agreement or
arrangement entered into by it with respect to any of its Stock (including any
shareholders' agreement), or enter into any new agreement with respect to any of
its Stock, or (ii) amend, modify or otherwise change any Material Contract,
except any such amendments, modifications or changes or any such new agreements
or arrangements pursuant to this paragraph (c) that, either individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Change.
Change of Control. Cause, permit, or suffer, directly or indirectly, any Change
of Control.
Consignments. Consign any Inventory or sell any Inventory on xxxx and hold, sale
or return, sale on approval, or other conditional terms of sale other than
consignments of Inventory at the
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consignment locations set forth on Schedule 5.5 and other locations as permitted
under Section 6.9 provided that the aggregate book value of all such consigned
Inventory shall not at any time exceed $2,000,000.
Distributions. Make any distribution or declare or pay any dividends (in cash or
other property, other than common Stock) on, or purchase, acquire, redeem, or
retire any of any Loan Party's Stock, of any class, whether now or hereafter
outstanding, other than (a) distributions or declaration and payment of
dividends by any Subsidiary of a Loan Party to a Loan Party, (b) accruals of
dividends on preferred Stock and grants of preferred stock units to, and
non-cash credits to the dividend equivalent account of, a Principal, in each
case, pursuant to the Preferred Stock Unit Award Agreement between Parent and
such Principal (as in effect on the Closing Date), and (c) subject to the terms
of the Key Man Agreement and to the extent permitted by the Indenture, (i)
payments to the estate of a Principal or to a Permitted Holder in respect of
such Principal's preferred stock units and dividend equivalent account, in each
case, calculated pursuant to the Preferred Stock Unit Award Agreement between
Parent and such Principal (as in effect on the Closing Date) and (ii)
redemptions by Parent of shares of its Stock from a Principal or a Permitted
Holder pursuant to the employment agreement between such Principal and Parent
(as in effect on the Closing Date) and, in the case of each of clauses (i) and
(ii), (A) pursuant to the partnership agreement of SHC Investment Partnership
(as amended and in effect on the Closing Date) and (B) solely from (1) the
proceeds of the Key Man Life Insurance Policy on the life of such Principal and
(2) the issuance of Indebtedness by Parent that is evidenced by an unsecured,
fully subordinated promissory note to the extent permitted by Section 7.1(k);
provided, that in the event that the proceeds of the Key Man Life Insurance
Policy on the life of such Principal exceed the aggregate amount of all such
payments and redemptions to the estate of such Principal or to its Permitted
Holders, such excess shall be applied in accordance with Section 2.4(c)(ix).
Accounting Methods. Modify or change its method of accounting (other than as may
be required to conform to GAAP) or enter into, modify, or terminate any
agreement currently existing, or at any time hereafter entered into with any
third party accounting firm or service bureau for the preparation or storage of
the Loan Parties' accounting records without said accounting firm or service
bureau agreeing to provide Agent information regarding the Collateral or the
Loan Parties' financial condition.
Investments. Except for Permitted Investments, directly or indirectly, make or
acquire any Investment, or incur any liabilities (including contingent
obligations) for or in connection with any Investment; provided, however, that
the Loan Parties shall not have Permitted Investments (other than in the Cash
Management Accounts and payroll accounts) in deposit accounts or Securities
Accounts in excess of $200,000 outstanding at any one time (excluding amounts
with respect to which checks are outstanding and amounts necessary to meet
minimum balance requirements) unless the applicable Loan Party, and the
applicable securities intermediary or bank have entered into Control Agreements
or similar arrangements governing such Permitted Investments, as Agent shall
determine in its Permitted Discretion, to perfect (and further establish) the
Agent's Liens in such Permitted Investments.
Transactions with Affiliates. Except for the transactions set forth in Schedule
7.14, directly or indirectly enter into or permit to exist any transaction with
any Affiliate of any Loan Party except
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for transactions that are in the ordinary course of the Loan Parties' business,
upon fair and reasonable terms, that are fully disclosed to Agent, and that are
no less favorable to the Loan Parties than would be obtained in an arm's length
transaction with a non-Affiliate.
Suspension. Suspend or go out of a substantial portion of its business.
Compensation. Increase the annual fee or per-meeting fees paid to the members of
its Board of Directors during any Fiscal Year by more than 15% over the prior
Fiscal Year; make payments of life insurance premiums in respect of the Key Man
Life Insurance Policies in excess of $150,000 in the aggregate in any Fiscal
Year; or pay or accrue total cash compensation, during any Fiscal Year, to its
officers and senior management employees in an aggregate amount in excess of
115% of that paid or accrued in the prior Fiscal Year other than (a) in the case
of any Principal, in accordance with the employment agreement between such
Principal and Parent (as in effect on the Closing Date) and (b) in the case of
any other officer or senior management employee, in accordance with an
incentive, bonus or other compensation plan authorized in writing by the
Principals in accordance with past practices.
Use of Proceeds. Use the proceeds of the Advances and the Term Loans for any
purpose other than (a) on the Closing Date, (i) to repay in full the outstanding
principal, accrued interest, and accrued fees and expenses owing to Existing
Lender, and (ii) to pay transactional fees, costs, and expenses incurred in
connection with this Agreement, the other Loan Documents, and the transactions
contemplated hereby and thereby, and (b) thereafter, consistent with the terms
and conditions hereof, for its lawful and permitted purposes.
Change in Location of Chief Executive Office; Inventory and Equipment with
Bailees. Relocate its chief executive office to a new location without
Administrative Borrower providing 30 days' prior written notification thereof to
Agent and so long as, at the time of such written notification, the applicable
Loan Party provides any financing statements or fixture filings necessary to
perfect and continue perfected the Agent's Liens and, if such new location is
leased by such Loan Party, provides to Agent a Collateral Access Agreement with
respect to such new location. Except as otherwise expressly permitted by the
terms of this Agreement, the Inventory and Equipment shall not at any time now
or hereafter be stored with a bailee, warehouseman, or similar party without
Agent's prior written consent unless such bailee, warehouseman or similar party
has executed a Collateral Access Agreement.
Securities Accounts. Subject to Section 7.13, establish or maintain any
Securities Account unless Agent shall have received a Control Agreement in
respect of such Securities Account. Borrowers agree to not transfer assets out
of any Securities Account; provided, however, that, so long as no Event of
Default has occurred and is continuing or would result therefrom, Borrowers may
use such assets (and the proceeds thereof) to the extent not prohibited by this
Agreement.
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FINANCIAL COVENANTS.
Minimum EBITDAP. Fail to maintain EBITDAP, measured on a quarter-end basis, of
not less than the required amount set forth in the following table for the
applicable period set forth opposite thereto:
Applicable Amount Applicable Period
---------------------------------------------------------------------------------------
$ 1,730,000 For the 1 fiscal quarter period ending March 31, 2003
---------------------------------------------------------------------------------------
$ 4,200,000 For the 2 fiscal quarter period ending June 30, 2003
---------------------------------------------------------------------------------------
$ 6,400,000 For the 3 fiscal quarter period ending September 30, 2003
---------------------------------------------------------------------------------------
$ 9,200,000 For the 4 fiscal quarter period ending December 31, 2003
---------------------------------------------------------------------------------------
$ 10,306,975 For the 4 fiscal quarter period ending March 31, 2004
---------------------------------------------------------------------------------------
$ 10,301,550 For the 4 fiscal quarter period ending June 30, 2004
---------------------------------------------------------------------------------------
$ 10,745,525 For the 4 fiscal quarter period ending September 30, 2004
---------------------------------------------------------------------------------------
$ 10,601,500 For the 4 fiscal quarter period ending December 31, 2004
---------------------------------------------------------------------------------------
$ 10,780,350 For the 4 fiscal quarter period ending March 31, 2005
---------------------------------------------------------------------------------------
$ 10,959,200 For the 4 fiscal quarter period ending June 30, 2005
---------------------------------------------------------------------------------------
$ 11,138,050 For the 4 fiscal quarter period ending September 30, 2005
---------------------------------------------------------------------------------------
$ 11,316,900 For the 4 fiscal quarter period ending December 31, 2005
---------------------------------------------------------------------------------------
$ 11,401,777 For the 4 fiscal quarter period ending March 31, 2006
---------------------------------------------------------------------------------------
$ 11,486,654 For the 4 fiscal quarter period ending June 30, 2006
---------------------------------------------------------------------------------------
$ 11,571,530 For the 4 fiscal quarter period ending September 30, 2006
---------------------------------------------------------------------------------------
$ 11,656,407 For the 4 fiscal quarter period ending December 31, 2006
---------------------------------------------------------------------------------------
$ 11,743,830 For the 4 fiscal quarter period ending March 31, 2007
---------------------------------------------------------------------------------------
$ 11,831,253 For the 4 fiscal quarter period ending June 30, 2007
---------------------------------------------------------------------------------------
$ 11,918,676 For the 4 fiscal quarter period ending September 30, 2007
---------------------------------------------------------------------------------------
$ 12,006,009 For the 4 fiscal quarter period ending December 31, 2007
---------------------------------------------------------------------------------------
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Capital Expenditures. Make Capital Expenditures in any Fiscal Year in excess of
the amount set forth in the following table for the applicable period (excluding
the aggregate amount of cash proceeds of sales, dispositions or insurance
proceeds permitted to be reinvested and being held for reinvestment and/or
actually reinvested by Borrowers in accordance with Section 2.4(d)(iv) during
such period):
Fiscal Year Amount
------------------------------------------------------
Fiscal Year 2003 $1,500,000
------------------------------------------------------
Fiscal Year 2004 $2,000,000
------------------------------------------------------
Fiscal Year 2005
and each Fiscal Year thereafter $2,500,000
------------------------------------------------------
Senior Debt Ratio. Permit the Senior Debt Ratio at the end of each fiscal
quarter of Parent for the trailing 4 fiscal quarter period ending at the end of
such fiscal quarter to exceed 3.25 : 1.00.
CLASSIFICATION OF OBLIGATIONS.
Classify any "Indebtedness" (as defined in the Indenture) of Parent or any of
its Subsidiaries (other than Indebtedness constituting Obligations) as
"Indebtedness" (as defined in the Indenture) under Sections 4.09(a) or 4.09(k)
of the Indenture.
Classify any of the Revolver Usage or the Term Loans as "Indebtedness" (as
defined in the Indenture) under Section 4.09(k) of the Indenture or as Credit
Facility Obligations hereunder at any time that any of the Revolver Usage or the
Term Loans may be classified as "Indebtedness" (as defined in the Indenture)
under Section 4.09(a) of the Indenture and as Senior Credit Facility Obligations
hereunder.
EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an event
of default (each, an "Event of Default") under this Agreement:
47. If Borrowers fail to pay when due and payable or when
declared due and payable, all or any portion of the Obligations (whether of
principal, interest (including any interest which, but for the provisions of the
Bankruptcy Code, would have accrued on such amounts), fees, expenses and charges
due the Lender Group, reimbursement of Lender Group Expenses, or other amounts
constituting Obligations) and, in the case of any Obligation constituting
interest, fees, expenses, charges or reimbursements only, such failure shall
continue for 3 days;
48. (i) If any Loan Party fails to perform, keep, or observe any
term, provision, condition, covenant, or agreement contained in Sections 6.1,
6.4, 6.5, 6.7 and 6.15 of this Agreement, or comparable provisions of the other
Loan Documents, and such failure
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continues for 15 Business Days, (ii) if any Loan Party fails to perform, keep,
or observe any term, provision, condition, covenant or agreement contained in
Sections 6.2 (but only up to three times during any 12-month period), 6.3, 6.9
and 6.11 of this Agreement, or comparable provisions of the other Loan
Documents, and such failure continues for 5 days, or (iii) if any Loan Party
otherwise fails to perform, keep, or observe any other term, provision,
condition, covenant, or agreement contained in this Agreement or in any of the
other Loan Documents;
49. If any material portion of any Loan Party's or any of its
Subsidiaries' assets is attached, seized, subjected to a writ or distress
warrant, levied upon, or comes into the possession of any third Person;
50. If an Insolvency Proceeding is commenced by any Loan Party
or any of its Subsidiaries;
51. If an Insolvency Proceeding is commenced against any Loan
Party, or any of its Subsidiaries, and any of the following events occur: (a)
the applicable Loan Party or the Subsidiary consents to the institution of the
Insolvency Proceeding against it, (b) the petition commencing the Insolvency
Proceeding is not timely controverted, (c) the petition commencing the
Insolvency Proceeding is not dismissed within 60 calendar days of the date of
the filing thereof; provided, however, that, during the pendency of such period,
Agent (including any successor agent) and each other member of the Lender Group
shall be relieved of their obligation to extend credit hereunder, (d) an interim
trustee is appointed to take possession of all or any substantial portion of the
properties or assets of, or to operate all or any substantial portion of the
business of, any Loan Party or any of its Subsidiaries, or (e) an order for
relief shall have been entered therein;
52. If any Loan Party or any of its Subsidiaries is enjoined,
restrained, or in any way prevented by court order from continuing to conduct
all or any material part of its business affairs;
53. If a notice of Lien, levy, or assessment is filed of record
with respect to any Loan Party's or any of its Subsidiaries' assets by the
United States or any department, agency, or instrumentality thereof, or by any
state, county, municipal, or governmental agency, or if any taxes or debts owing
at any time hereafter to any one or more of such entities becomes a Lien,
whether xxxxxx or otherwise, upon any Loan Party's or any of its Subsidiaries'
assets to secure an aggregate amount in excess of $250,000 and the same is not
paid on or before the payment date thereof;
54. If a judgment or other claim for an amount in excess of
$250,000 becomes a Lien or encumbrance upon any material portion of any Loan
Party's or any of its Subsidiaries' properties or assets;
55. If there is a default under any Indenture Document, any
other Material Contract or any indemnity, bonding or surety agreement to which
any Loan Party or any of its Subsidiaries is a party and such default (a) occurs
at the final maturity of the obligations thereunder, or (b) results in a right
by the other party thereto, irrespective of whether exercised, to accelerate the
maturity of the applicable Loan Party's or its Subsidiaries' obligations
- 100 -
thereunder, to terminate such agreement, or to refuse to renew such agreement
pursuant to an automatic renewal right therein;
56. If any Loan Party or any of its Subsidiaries makes any
payment on account of Indebtedness that has been contractually subordinated in
right of payment to the payment of the Obligations, except to the extent such
payment is permitted by the terms of the subordination provisions applicable to
such Indebtedness;
57. If any material misstatement or misrepresentation exists now
or hereafter in any warranty, representation, statement, or Record made to the
Lender Group by any Loan Party, its Subsidiaries, or any officer, employee,
agent, or director of any Loan Party or any of its Subsidiaries;
58. If there is a loss, suspension or revocation of, or failure
to renew, any license or permit now held or hereafter acquired by any Loan Party
or any of its Subsidiaries and such loss, suspension, revocation or failure to
renew could reasonably be expected to result in a Material Adverse Change;
59. If the obligation of any Guarantor under its Guaranty is
limited or terminated by operation of law or by such Guarantor thereunder;
60. If this Agreement or any other Loan Document that purports
to create a Lien, shall, for any reason, fail or cease to create a valid and
perfected and, except to the extent permitted by the terms hereof or thereof,
first priority Lien on or security interest in the Collateral covered hereby or
thereby;
61. If any Loan Party or any of its Subsidiaries or any of their
ERISA Affiliates shall have made a complete or partial withdrawal from a
Multiemployer Plan, and, as a result of such complete or partial withdrawal,
such Loan Party or any of its Subsidiaries or such ERISA Affiliate incurs a
withdrawal liability in an annual amount exceeding $250,000; or a Multiemployer
Plan enters reorganization status under Section 4241 of ERISA, and, as a result
thereof, a Loan Party's or such Subsidiary's, or such ERISA Affiliate's annual
contribution requirement with respect to such Multiemployer Plan increases in an
annual amount exceeding $250,000;
62. If any Termination Event with respect to any Benefit Plan
shall have occurred, and, 30 days thereafter, (i) such Termination Event (if
correctable) shall not have been corrected, and (ii) the then current value of
such Benefit Plan's vested benefits exceeds the then current value of assets
allocable to such benefits in such Benefit Plan by more than $250,000 (or, in
the case of a Termination Event involving liability under Section 409, 502(i),
502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4971
or 4975 of the Code, the liability is in excess of such amount);
63. If any provision of any Loan Document shall at any time for
any reason be declared to be null and void, or the validity or enforceability
thereof shall be contested by any Loan Party, or a proceeding shall be commenced
by any Loan Party, or by any Governmental Authority having jurisdiction over any
Loan Party, seeking to establish the invalidity or
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unenforceability thereof, or any Loan Party shall deny that any Loan Party has
any liability or obligation purported to be created under any Loan Document; or
64. If Parent fails to refinance its Senior Notes with
Indebtedness having a maturity date not earlier than 90 days after the Maturity
Date, or Parent fails to otherwise extend the maturity date of its Senior Notes
to a date not earlier than 90 days after the Maturity Date, in each case, not
later than 90 days prior to the due date of the Senior Notes.
THE LENDER GROUP'S RIGHTS AND REMEDIES.
Rights and Remedies. Upon the occurrence, and during the continuation, of an
Event of Default, the Required Lenders (at their election but without notice of
their election and without demand) may authorize and instruct Agent to do any
one or more of the following on behalf of the Lender Group (and Agent, acting
upon the instructions of the Required Lenders, shall do the same on behalf of
the Lender Group), all of which are authorized by Borrowers:
Declare all or any portion of the Obligations, whether evidenced by this
Agreement, by any of the other Loan Documents, or otherwise, immediately due and
payable;
Cease advancing money or extending credit to or for the benefit of Borrowers
under this Agreement, under any of the Loan Documents, or under any other
agreement between Borrowers and the Lender Group;
Terminate this Agreement and any of the other Loan Documents as to any future
liability or obligation of the Lender Group, but without affecting any of the
Agent's Liens in the Collateral and without affecting the Obligations;
Settle or adjust disputes and claims directly with Account Debtors for amounts
and upon terms which Agent considers advisable, and in such cases, Agent will
credit the Loan Account with only the net amounts received by Agent in payment
of such disputed Accounts after deducting all Lender Group Expenses incurred or
expended in connection therewith;
Cause the Loan Parties to hold all returned Inventory in trust for the Lender
Group, segregate all such returned Inventory from all other assets of the Loan
Parties or in the Loan Parties' possession and conspicuously label said returned
Inventory as the property of the Lender Group;
Without notice to or demand upon any Loan Party, make such payments and do such
acts as Agent considers necessary or reasonable to protect its security
interests in the Collateral. Each Borrower agrees to assemble the Personal
Property Collateral if Agent so requires, and to make the Personal Property
Collateral available to Agent at a place that Agent may designate which is
reasonably convenient to both parties. Each Borrower authorizes Agent to enter
the premises where the Personal Property Collateral is located, to take and
maintain possession of the Personal Property Collateral, or any part of it, and
to pay, purchase, contest, or compromise any Lien that in Agent's determination
appears to conflict with the Agent's Liens and to pay all expenses incurred in
connection therewith and to charge the Loan Account therefor. With respect to
any of Borrowers' owned or leased premises, each Borrower hereby grants Agent a
license to enter into possession of such premises and to occupy the same,
without charge, in order to exercise any of the Lender Group's rights or
remedies provided herein, at law, in equity, or otherwise;
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Without notice to any Loan Party (such notice being expressly waived), and
without constituting an acceptance of any collateral in full or partial
satisfaction of an obligation (within the meaning of the Code), set off and
apply to the Obligations any and all (i) balances and deposits of any Loan Party
held by the Lender Group (including any amounts received in the Cash Management
Accounts), or (ii) Indebtedness at any time owing to or for the credit or the
account of any Loan Party held by the Lender Group;
Hold, as cash collateral, any and all balances and deposits of any Loan Party
held by the Lender Group, and any amounts received in the Cash Management
Accounts, to secure the full and final repayment of all of the Obligations;
Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale,
advertise for sale, and sell (in the manner provided for herein) the Personal
Property Collateral. Agent is hereby granted a license or other right to use,
without charge, for the benefit of the Lender Group, each Borrower's labels,
patents, copyrights, trade secrets, trade names, trademarks, service marks, and
advertising matter, or any property of a similar nature, as it pertains to the
Personal Property Collateral, in completing production of, advertising for sale,
and selling any Personal Property Collateral and each Borrower's rights under
all licenses and all franchise agreements shall inure to the Lender Group's
benefit;
Sell the Personal Property Collateral at either a public or private sale, or
both, by way of one or more contracts or transactions, for cash or on terms, in
such manner and at such places (including any Loan Party's premises) as Agent
determines is commercially reasonable. It is not necessary that the Personal
Property Collateral be present at any such sale;
Agent shall give notice of the disposition of the Personal Property Collateral
as follows:
Agent shall give Administrative Borrower (for the benefit of the Loan Parties) a
notice in writing of the time and place of public sale, or, if the sale is a
private sale or some other disposition other than a public sale is to be made of
the Personal Property Collateral, the time on or after which the private sale or
other disposition is to be made; and
The notice shall be personally delivered or mailed, postage prepaid, to
Administrative Borrower as provided in Section 12, at least 10 days before the
earliest time of disposition set forth in the notice; no notice needs to be
given prior to the disposition of any portion of the Personal Property
Collateral that is perishable or threatens to decline speedily in value or that
is of a type customarily sold on a recognized market;
Agent, on behalf of the Lender Group may credit bid and purchase at any public
sale;
Agent may seek the appointment of a receiver or keeper to take possession of all
or any portion of the Collateral or to operate same and, to the maximum extent
permitted by law, may seek the appointment of such a receiver without the
requirement of prior notice or a hearing;
Agent, on behalf of the Lender Group, may foreclose any or all of the Mortgages
and sell the Real Property or cause the Real Property to be sold in accordance
with the provisions of the Mortgages and applicable law, and exercise any and
all other rights or remedies available to
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Agent, on behalf of the Lender Group, under the Mortgages, any of the other Loan
Documents, at law or in equity with respect to the Collateral encumbered by the
Mortgages;
The Lender Group shall have all other rights and remedies available to it at law
or in equity or pursuant to any other Loan Document; and
Any deficiency that exists after disposition of the Personal Property Collateral
as provided above will be paid immediately by the Loan Parties. Any excess will
be promptly returned, without interest and subject to the rights of third
Persons, by Agent to Administrative Borrower (for the benefit of the Loan
Parties).
Remedies Cumulative. The rights and remedies of the Lender Group under this
Agreement, the other Loan Documents, and all other agreements shall be
cumulative. The Lender Group shall have all other rights and remedies not
inconsistent herewith as provided under the Code, by law, or in equity. No
exercise by the Lender Group of one right or remedy shall be deemed an election,
and no waiver by the Lender Group of any Event of Default shall be deemed a
continuing waiver. No delay by the Lender Group shall constitute a waiver,
election, or acquiescence by it.
TAXES AND EXPENSES.
If any Loan Party fails to pay any monies (whether taxes, assessments,
insurance premiums, or, in the case of leased properties or assets, rents or
other amounts payable under such leases) due to third Persons, or fails to make
any deposits or furnish any required proof of payment or deposit, all as
required under the terms of this Agreement, then, Agent, in its sole discretion
and without prior notice to any Loan Party, may do any or all of the following:
(a) make payment of the same or any part thereof, (b) set up such reserves in
the Loan Account as Agent deems necessary to protect the Lender Group from the
exposure created by such failure, or (c) in the case of the failure to comply
with Section 6.8 hereof, obtain and maintain insurance policies of the type
described in Section 6.8 and take any action with respect to such policies as
Agent deems prudent. Any such amounts paid by Agent shall constitute Lender
Group Expenses and any such payments shall not constitute an agreement by the
Lender Group to make similar payments in the future or a waiver by the Lender
Group of any Event of Default under this Agreement. Agent need not inquire as
to, or contest the validity of, any such expense, tax, or Lien and the receipt
of the usual official notice for the payment thereof shall be conclusive
evidence that the same was validly due and owing.
WAIVERS; INDEMNIFICATION.
Demand; Protest; etc. Each Borrower waives demand, protest, notice of protest,
notice of default or dishonor, notice of payment and nonpayment, nonpayment at
maturity, release, compromise, settlement, extension, or renewal of documents,
instruments, chattel paper, and guarantees at any time held by the Lender Group
on which each such Borrower may in any way be liable.
The Lender Group's Liability for Collateral. Each Borrower hereby agrees that:
(a) so long as the Agent complies with its obligations, if any, under the Code,
the Lender Group shall not in any way or manner be liable or responsible for:
(i) the safekeeping of the Collateral, (ii) any loss
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or damage thereto occurring or arising in any manner or fashion from any cause,
(iii) any diminution in the value thereof, or (iv) any act or default of any
carrier, warehouseman, bailee, forwarding agency, or other Person, and (b) all
risk of loss, damage, or destruction of the Collateral shall be borne by
Borrowers.
INDEMNIFICATION.
General Indemnity. Each Borrower shall pay, indemnify, defend, and hold the
Agent-Related Persons, the Lender-Related Persons with respect to each Lender,
each Participant, and each of their respective officers, directors, employees,
agents, and attorneys-in-fact (each, an "Indemnified Person") harmless (to the
fullest extent permitted by law) from and against any and all claims, demands,
suits, actions, investigations, proceedings, and damages, and all reasonable
attorneys fees and disbursements and other costs and expenses actually incurred
in connection therewith (as and when they are incurred and irrespective of
whether suit is brought), at any time asserted against, imposed upon, or
incurred by any of them (a) in connection with or as a result of or related to
the execution, delivery, enforcement, performance, or administration of this
Agreement, any of the other Loan Documents, or the transactions contemplated
hereby or thereby, and (b) with respect to any investigation, litigation, or
proceeding related to this Agreement, any other Loan Document, or the use of the
proceeds of the credit provided hereunder (irrespective of whether any
Indemnified Person is a party thereto), or any act, omission, event, or
circumstance in any manner related thereto.
Environmental Indemnity. Without limiting Section 11.3(a) hereof, each Borrower
shall pay, indemnify, defend, and hold harmless each Indemnified Person against
any and all Environmental Liabilities and Costs and all other claims, demands,
penalties, fines, liability (including strict liability), losses, damages, costs
and expenses (including reasonable legal fees and expenses, consultant fees and
laboratory fees), arising out of (i) any releases or threatened releases of any
Hazardous Materials (x) at any property presently or formerly owned or operated
by such Borrower or any Subsidiary of such Borrower, or any predecessor in
interest, or (y) generated and disposed of by such Borrower or any Subsidiary of
such Borrower, or any predecessor in interest; (ii) any violations of
Environmental Laws; (iii) any Environmental Action relating to such Borrower or
any Subsidiary of such Borrower, or any predecessor in interest; (iv) any
personal injury (including wrongful death) or property damage (real or personal)
arising out of exposure to Hazardous Materials used, handled, generated,
transported or disposed by such Borrower or any Subsidiary of such Borrower, or
any predecessor in interest; and (v) any breach of any warranty or
representation regarding environmental matters made by the Loan Parties in
Section 5.14 or the breach of any covenant made by the Loan Parties in Section
6.15.
The foregoing to the contrary notwithstanding, Borrowers shall have no
obligation to any Indemnified Person under this Section 11.3 with respect to any
of the foregoing claims, demands, suits, actions, investigations, proceedings,
and damages, and all reasonable attorneys fees and disbursements and other costs
and expenses (collectively, the "Indemnified Liabilities") that a court of
competent jurisdiction finally determines to have resulted from the gross
negligence or willful misconduct of such Indemnified Person (or any of its
officers, directors, employees, agents, or attorneys-in-fact). This provision
shall survive the termination of this Agreement and the repayment of the
Obligations. If any Indemnified Person makes any payment
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to any other Indemnified Person with respect to an Indemnified Liability as to
which Borrowers were required to indemnify the Indemnified Person receiving such
payment, the Indemnified Person making such payment is entitled to be
indemnified and reimbursed by Borrowers with respect thereto.
WITHOUT LIMITATION, THE FOREGOING INDEMNITIES SHALL APPLY TO EACH INDEMNIFIED
PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE
CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED
PERSON OR OF ANY OTHER PERSON.
NOTICES.
Unless otherwise provided in this Agreement, all notices or demands by
Borrowers or Agent to the other relating to this Agreement or any other Loan
Document shall be in writing and (except for financial statements and other
informational documents which may be sent by first-class mail, postage prepaid)
shall be personally delivered or sent by registered or certified mail (postage
prepaid, return receipt requested), overnight courier, electronic mail (at such
email addresses as the Administrative Borrower or Agent, as applicable, may
designate to each other in accordance herewith), or telefacsimile to Borrowers
in care of Administrative Borrower or to Agent, as the case may be, at its
address set forth below:
If to Administrative Borrower: ELGIN NATIONAL INDUSTRIES, INC.
0000 Xxxxxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx
Fax No. 000-000-0000
with copies to: MAYER, BROWN, XXXX & MAW
000 X. XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxx, Esq.
Xxxx X. Xxxxxxxx, Esq.
Fax No: 000-000-0000
If to Agent: FOOTHILL CAPITAL CORPORATION
Xxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Business Finance
Division Manager
Fax No. 000-000-0000
- 106 -
with copies to: XXXXXXX XXXX & XXXXX LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx X. Xxxxxxxx, Esq.
Fax No. 000-000-0000
If to Ableco: ABLECO FINANCE LLC
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxx
Fax No. 000-000-0000
with copies to: XXXXXXX, PHLEGER & XXXXXXXX LLP
000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxxxx Hilson, Esq.
Fax No: 000-000-0000
Agent and Borrowers may change the address at which they are to
receive notices hereunder, by notice in writing in the foregoing manner given to
the other party. All notices or demands sent in accordance with this Section 12,
other than notices by Agent in connection with enforcement rights against the
Collateral under the provisions of the Code, shall be deemed received on the
earlier of the date of actual receipt or 3 Business Days after the deposit
thereof in the mail. Each Borrower acknowledges and agrees that notices sent by
the Lender Group in connection with the exercise of enforcement rights against
Collateral under the provisions of the Code shall be deemed sent when deposited
in the mail or personally delivered, or, where permitted by law, transmitted by
telefacsimile or any other method set forth above.
CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
65. THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT
OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT
HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH
RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR
THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE VALIDITY AND
PERFECTION OR THE PERFECTION AND EFFECT OF PERFECTION OR NON-PERFECTION OF THE
SECURITY INTEREST CREATED HEREBY OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR COLLATERAL, ARE GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN THE
STATE OF NEW YORK.
- 107 -
66. THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND
LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF NEW
YORK, STATE OF NEW YORK, PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT'S OPTION, IN
THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE
SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. BORROWERS AND THE LENDER GROUP
WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO
ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT
ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 13(b).
BORROWERS AND THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO
A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF
THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. BORROWERS AND THE LENDER GROUP REPRESENT THAT EACH HAS
REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A
COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
ASSIGNMENTS AND PARTICIPATIONS.
Any Lender may, with the written consent of Agent (provided that no written
consent of Agent shall be required in connection with any assignment and
delegation by a Lender to an Eligible Transferee), assign and delegate to one or
more assignees (each an "Assignee") all, or any ratable part of all, of the
Obligations, the Commitments and the other rights and obligations of such Lender
hereunder and under the other Loan Documents, in a minimum amount of $5,000,000
(except such minimum amount shall not apply to an Eligible Transferee that is a
Related Fund of a Lender or an Affiliate of a Lender); provided, however, that
Borrowers and Agent may continue to deal solely and directly with such Lender in
connection with the interest so assigned to an Assignee until (i) written notice
of such assignment, together with payment instructions, addresses, and related
information with respect to the Assignee, have been given to Administrative
Borrower and Agent by such Lender and the Assignee, (ii) such Lender and its
Assignee have delivered to Administrative Borrower and Agent an Assignment and
Acceptance and (iii) the assignor Lender or Assignee has paid to Agent for
Agent's separate account a processing fee in the amount of $5,000. Anything
contained herein to the contrary notwithstanding, the consent of Agent shall not
be required (and payment of any fees shall not be required) if (x) such
assignment is in connection with any merger, consolidation, sale, transfer, or
other disposition of all or any substantial portion of the business or loan
portfolio of such Lender
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or (y) the assignee is an Eligible Transferee that is a Related Fund of a Lender
or an Affiliate of a Lender.
From and after the date that Agent notifies the assignor Lender (with a copy to
Administrative Borrower) that it has received an executed Assignment and
Acceptance and payment (if applicable) of the above-referenced processing fee,
(i) the Assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, shall have the rights and obligations of a Lender
under the Loan Documents, and (ii) the assignor Lender shall, to the extent that
rights and obligations hereunder and under the other Loan Documents have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
(except with respect to Section 11.3 hereof) and be released from its
obligations under this Agreement (and in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement and the other Loan Documents, such Lender
shall cease to be a party hereto and thereto), and such assignment shall affect
a novation between Borrowers and the Assignee.
By executing and delivering an Assignment and Acceptance, the assigning Lender
thereunder and the Assignee thereunder confirm to and agree with each other and
the other parties hereto as follows: (1) other than as provided in such
Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other Loan Document furnished pursuant hereto,
(2) such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Borrowers or the
performance or observance by Borrowers of any of their obligations under this
Agreement or any other Loan Document furnished pursuant hereto, (3) such
Assignee confirms that it has received a copy of this Agreement, together with
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance,
(4) such Assignee will, independently and without reliance upon Agent, such
assigning Lender 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, (5) such
Assignee appoints and authorizes Agent to take such actions and to exercise such
powers under this Agreement as are delegated to Agent, by the terms hereof,
together with such powers as are reasonably incidental thereto, and (6) such
Assignee agrees that it will perform all of the obligations which by the terms
of this Agreement are required to be performed by it as a Lender.
Immediately upon each Assignee's making its processing fee payment under the
Assignment and Acceptance and receipt and acknowledgment by Agent of such fully
executed Assignment and Acceptance, this Agreement shall be deemed to be amended
to the extent, but only to the extent, necessary to reflect the addition of the
Assignee and the resulting adjustment of the Commitments arising therefrom. The
Commitment allocated to each Assignee shall reduce such Commitments of the
assigning Lender pro tanto.
Any Lender may at any time sell to one or more commercial banks, financial
institutions, or other Persons not Affiliates of such Lender (a "Participant")
participating interests in its
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Obligations, the Commitment, and the other rights and interests of that Lender
(the "Originating Lender") hereunder and under the other Loan Documents;
provided, however, that (i) the Originating Lender shall remain a "Lender" for
all purposes of this Agreement and the other Loan Documents and the Participant
receiving the participating interest in the Obligations, the Commitments, and
the other rights and interests of the Originating Lender hereunder shall not
constitute a "Lender" hereunder or under the other Loan Documents and the
Originating Lender's obligations under this Agreement shall remain unchanged,
(ii) the Originating Lender shall remain solely responsible for the performance
of such obligations, (iii) Borrowers, Agent, and the Lenders shall continue to
deal solely and directly with the Originating Lender in connection with the
Originating Lender's rights and obligations under this Agreement and the other
Loan Documents, (iv) no Originating Lender shall transfer or grant any
participating interest under which the Participant has the right to approve any
amendment to, or any consent or waiver with respect to, this Agreement or any
other Loan Document, except to the extent such amendment to, or consent or
waiver with respect to this Agreement or of any other Loan Document would (A)
extend the final maturity date of the Obligations hereunder in which such
Participant is participating, (B) reduce the interest rate applicable to the
Obligations hereunder in which such Participant is participating, (C) release
all or a material portion of the Collateral or guaranties (except to the extent
expressly provided herein or in any of the Loan Documents) supporting the
Obligations hereunder in which such Participant is participating, (D) postpone
the payment of, or reduce the amount of, the interest or fees payable to such
Participant, or (E) change the amount or due dates of scheduled principal
repayments or prepayments or premiums; and (v) all amounts payable by Borrowers
hereunder shall be determined as if such Lender had not sold such participation;
except that, if amounts outstanding under this Agreement are due and unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to have the
right of set-off in respect of its participating interest in amounts owing under
this Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Agreement. The rights of any
Participant only shall be derivative through the Originating Lender with whom
such Participant participates and no Participant shall have any rights under
this Agreement or the other Loan Documents or any direct rights as to the other
Lenders, Agent, Borrowers, the Collections, the Collateral, or otherwise in
respect of the Obligations. No Participant shall have the right to participate
directly in the making of decisions by the Lenders among themselves. The
provisions of this Section 14.1(e) (other than clause (v) of this Section) are
solely for the benefit of the Lender Group, and none of the Borrowers shall have
any rights as a third party beneficiary of such provisions.
In connection with any such assignment or participation or proposed assignment
or participation, a Lender may disclose all documents and information which it
now or hereafter may have relating to Borrowers or Borrowers' business.
Any other provision in this Agreement notwithstanding, any Lender may at any
time create a security interest in, or pledge, all or any portion of its rights
under and interest in this Agreement in favor of any Federal Reserve Bank in
accordance with Regulation A of the Federal Reserve Bank or U.S. Treasury
Regulation 31 CFR Sections 203.14, and such Federal Reserve Bank may enforce
such pledge or security interest in any manner permitted under applicable law.
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Administrative Borrower shall maintain, or cause to be maintained, a register
(the "Register") on which it enters the name of a Lender as the registered owner
of the Term Loan C held by such Lender. A Registered Loan (and the Registered
Note, if any, evidencing the same) may be assigned or sold in whole or in part
only by registration of such assignment or sale on the Register (and each
Registered Note shall expressly so provide). Any assignment or sale of all or
part of such Registered Loan (and the Registered Note, if any, evidencing the
same) may be effected only by registration of such assignment or sale on the
Register, together with the surrender of the Registered Note, if any, evidencing
the same duly endorsed by (or accompanied by a written instrument of assignment
or sale duly executed by) the holder of such Registered Note, whereupon, at the
request of the designated assignee(s) or transferee(s), one or more new
Registered Notes in the same aggregate principal amount shall be issued to the
designated assignee(s) or transferee(s). Prior to the registration of assignment
or sale of any Registered Loan (and the Registered Note, if any evidencing the
same), Borrowers shall treat the Person in whose name such Term Loan (and the
Registered Note, if any, evidencing the same) is registered as the owner thereof
for the purpose of receiving all payments thereon and for all other purposes,
notwithstanding notice to the contrary. In the case of an assignment or
delegation covered by Section 14.1(a)(y), the assigning Lender shall maintain a
comparable Register on behalf of Administrative Borrower.
In the event that a Lender sells participations in the Registered Loan, such
Lender shall maintain a register on which it enters the name of all participants
in the Registered Loans held by it (the "Participant Register"). A Registered
Loan (and the Registered Note, if any, evidencing the same) may be participated
in whole or in part only by registration of such participation on the
Participant Register (and each Registered Note shall expressly so provide). Any
participation of such Registered Loan (and the Registered Note, if any,
evidencing the same) may be effected only by the registration of such
participation on the Participant Register.
Successors. This Agreement shall bind and inure to the benefit of the respective
successors and assigns of each of the parties; provided, however, that Borrowers
may not assign this Agreement or any rights or duties hereunder without the
Lenders' prior written consent and any prohibited assignment shall be absolutely
void ab initio. No consent to assignment by the Lenders shall release any
Borrower from its Obligations. A Lender may assign this Agreement and the other
Loan Documents and its rights and duties hereunder and thereunder pursuant to
Section 14.1 hereof and, except as expressly required pursuant to Section 14.1
hereof, no consent or approval by any Borrower is required in connection with
any such assignment.
AMENDMENTS; WAIVERS.
Amendments and Waivers. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent with respect to any
departure by Borrowers therefrom, shall be effective unless the same shall be in
writing and signed by the Required Lenders (or by Agent at the written request
of the Required Lenders) and Administrative Borrower (on behalf of all
Borrowers) and then any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that no such waiver, amendment, or consent shall, unless in writing and
signed by all of the Lenders affected thereby and Administrative Borrower (on
behalf of all Borrowers) and acknowledged by Agent, do any of the following:
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increase or extend any Commitment of any Lender,
postpone or delay any date fixed by this Agreement or any other Loan Document
for any payment of principal, interest, fees, or other amounts due hereunder or
under any other Loan Document,
reduce the principal of, or the rate of interest on, any loan or other extension
of credit hereunder, or reduce any fees or other amounts payable hereunder or
under any other Loan Document,
change the percentage of the Commitments that is required to take any action
hereunder,
amend, modify or waive this Section or any provision of the Agreement providing
for consent or other action by all Lenders,
release Collateral other than as permitted by Section 16.12,
change the definition of "Required Lenders" or "Pro Rata Share",
contractually subordinate any of the Agent's Liens,
release any Borrower or Guarantor from any obligation for the payment of money,
change the definitions of Borrowing Base, Dilution, Dilution Reserve, Eligible
Accounts, Eligible Inventory, Maximum Revolver Amount, Net Liquidation
Percentage, R&S Availability, R&S Dilution, R&S Dilution Reserve, or R&S
Eligible Accounts in a manner that would result in an increase in the Borrowing
Base (or in any definition contained in this Agreement used in connection with
the definition of the foregoing terms that would result in an increase in the
Borrowing Base),
change the definitions of EBITDAP, Eligible Equipment, Eligible Real Property
Collateral, Enterprise Valuation, Enterprise Value, Maximum Revolver Amount,
Term Loan A Amount, Term Loan B Amount or Term Loan C Amount in a manner that
would result in an increase in the Term Loan A Amount, the Term Loan B Amount or
the Term Loan C Amount (or in any definition contained in this Agreement used in
connection with the definition of the foregoing terms that would result in an
increase in the Term Loan A Amount, the Term Loan B Amount or the Term Loan C
Amount), or
amend, modify or waive any of the provisions of Section 16 or Section 2.1(a),
Section 2.1(b), Section 2.2, Section 2.3(e), Section 2.3(i), Section 2.4(b),
Section 2.4(c), the last sentence of Section 2.10, Section 4.1 or Section 7.21
(or change any definition of a term used in any such Section in a manner adverse
to any Lender);
and, provided further, however, that no amendment, waiver or consent shall,
unless in writing and signed by Agent, Issuing Lender, or Swing Lender, affect
the rights or duties of Agent, Issuing Lender, or Swing Lender, as applicable,
under this Agreement or any other Loan Document. The foregoing notwithstanding,
any amendment, modification, waiver, consent, termination, or release of, or
with respect to, any provision of this Agreement or any other Loan Document that
relates only to the relationship of the Lender Group among themselves, and that
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does not affect the rights or obligations of Borrowers, shall not require
consent by or the agreement of Borrowers.
Replacement of Holdout Lender. If any action to be taken by the Lender Group or
Agent hereunder requires the unanimous consent, authorization, or agreement of
all Lenders, and a Lender ("Holdout Lender") fails to give its consent,
authorization, or agreement, then Agent, upon at least 5 Business Days prior
irrevocable notice to the Holdout Lender, may permanently replace the Holdout
Lender with one or more substitute Lenders (each, a "Replacement Lender"), and
the Holdout Lender shall have no right to refuse to be replaced hereunder. Such
notice to replace the Holdout Lender shall specify an effective date for such
replacement, which date shall not be later than 15 Business Days after the date
such notice is given.
Prior to the effective date of such replacement, the Holdout Lender
and each Replacement Lender shall execute and deliver an Assignment and
Acceptance Agreement, subject only to the Holdout Lender being repaid its share
of the outstanding Obligations (including an assumption of its Pro Rata Share of
the Risk Participation Liability) without any premium or penalty of any kind
whatsoever. If the Holdout Lender shall refuse or fail to execute and deliver
any such Assignment and Acceptance Agreement prior to the effective date of such
replacement, the Holdout Lender shall be deemed to have executed and delivered
such Assignment and Acceptance Agreement. The replacement of any Holdout Lender
shall be made in accordance with the terms of Section 14.1. Until such time as
the Replacement Lenders shall have acquired all of the Obligations, the
Commitments, and the other rights and obligations of the Holdout Lender
hereunder and under the other Loan Documents, the Holdout Lender shall remain
obligated to make the Holdout Lender's Pro Rata Share of Advances and to
purchase a participation in each Letter of Credit, in an amount equal to its Pro
Rata Share of the Risk Participation Liability of such Letter of Credit.
No Waivers; Cumulative Remedies. No failure by Agent or any Lender to exercise
any right, remedy, or option under this Agreement or, any other Loan Document,
or delay by Agent or any Lender in exercising the same, will operate as a waiver
thereof. No waiver by Agent or any Lender will be effective unless it is in
writing, and then only to the extent specifically stated. No waiver by Agent or
any Lender on any occasion shall affect or diminish Agent's and each Lender's
rights thereafter to require strict performance by Borrowers of any provision of
this Agreement. Agent's and each Lender's rights under this Agreement and the
other Loan Documents will be cumulative and not exclusive of any other right or
remedy that Agent or any Lender may have.
AGENT; THE LENDER GROUP.
Appointment and Authorization of Agent. Each Lender hereby designates and
appoints Foothill as its representative under this Agreement and the other Loan
Documents and each Lender hereby irrevocably authorizes Agent to take such
action on its behalf under the provisions of this Agreement and each other Loan
Document and to exercise such powers and perform such duties as are expressly
delegated to Agent by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto. Agent agrees to
act as such on the express conditions contained in this Section 16. The
provisions of this Section 16 are solely for the benefit of Agent, and the
Lenders, and the Loan Parties shall have no rights as a
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third party beneficiary of any of the provisions contained herein. Any provision
to the contrary contained elsewhere in this Agreement or in any other Loan
Document notwithstanding, Agent shall not have any duties or responsibilities,
except those expressly set forth herein, nor shall Agent have or be deemed to
have any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against Agent;
it being expressly understood and agreed that the use of the word "Agent" is for
convenience only, that Foothill is merely the representative of the Lenders, and
only has the contractual duties set forth herein. Except as expressly otherwise
provided in this Agreement, Agent shall have and may use its sole discretion
with respect to exercising or refraining from exercising any discretionary
rights or taking or refraining from taking any actions that Agent expressly is
entitled to take or assert under or pursuant to this Agreement and the other
Loan Documents. Without limiting the generality of the foregoing, or of any
other provision of the Loan Documents that provides rights or powers to Agent,
Lenders agree that Agent shall have the right to exercise the following powers
as long as this Agreement remains in effect: (a) maintain, in accordance with
its customary business practices, ledgers and records reflecting the status of
the Obligations, the Collateral, the Collections, and related matters, (b)
execute or file any and all financing or similar statements or notices,
amendments, renewals, supplements, documents, instruments, proofs of claim,
notices and other written agreements with respect to the Loan Documents, (c)
make Advances, for itself or on behalf of Lenders as provided in the Loan
Documents, (d) exclusively receive, apply, and distribute the Collections as
provided in the Loan Documents, (e) open and maintain such bank accounts and
cash management accounts as Agent deems necessary and appropriate in accordance
with the Loan Documents for the foregoing purposes with respect to the
Collateral and the Collections, (f) perform, exercise, and enforce any and all
other rights and remedies of the Lender Group with respect to the Loan Parties,
the Obligations, the Collateral, the Collections, or otherwise related to any of
same as provided in the Loan Documents, and (g) incur and pay such Lender Group
Expenses as Agent may deem necessary or appropriate for the performance and
fulfillment of its functions and powers pursuant to the Loan Documents.
Delegation of Duties. Agent may execute any of its duties under this Agreement
or any other Loan Document by or through agents, employees or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. Agent shall not be responsible for the negligence or misconduct of
any agent or attorney-in-fact that it selects as long as such selection was made
without gross negligence or willful misconduct.
Liability of Agent. None of the Agent-Related Persons shall (i) be liable for
any action taken or omitted to be taken by any of them under or in connection
with this Agreement or any other Loan Document or the transactions contemplated
hereby (except for its own gross negligence or willful misconduct), or (ii) be
responsible in any manner to any of the Lenders for any recital, statement,
representation or warranty made by any Loan Party or any Subsidiary or Affiliate
of any Loan Party, or any officer or director thereof, contained in this
Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by Agent
under or in connection with, this Agreement or any other Loan Document, or the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of any Loan Party or
any other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Lender
to ascertain or to inquire as to the observance
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or performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the Books or properties of
any Loan Party or the books or records or properties of any Loan Party's
Subsidiaries or Affiliates.
Reliance by Agent. Agent shall be entitled to rely, and shall be fully protected
in relying, upon any writing, resolution, notice, consent, certificate,
affidavit, letter, telegram, facsimile, telex or telephone message, statement or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent, or made by the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel to the Loan Parties or
counsel to any Lender), independent accountants and other experts selected by
Agent. Agent shall be fully justified in failing or refusing to take any action
under this Agreement or any other Loan Document unless Agent shall first receive
such advice or concurrence of the Lenders as it deems appropriate and until such
instructions are received, Agent shall act, or refrain from acting, as it deems
advisable. If Agent so requests, it shall first be indemnified to its reasonable
satisfaction by Lenders against any and all liability and expense that may be
incurred by it by reason of taking or continuing to take any such action. Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement or any other Loan Document in accordance with a request or
consent of the Lenders and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Lenders.
Notice of Default or Event of Default. Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest, fees, and
expenses required to be paid to Agent for the account of the Lenders, except
with respect to Defaults and Events of Default of which Agent has actual
knowledge, unless Agent shall have received written notice from a Lender or
Administrative Borrower referring to this Agreement, describing such Default or
Event of Default, and stating that such notice is a "notice of default." Agent
promptly will notify the Lenders of its receipt of any such notice or of any
Event of Default of which Agent has actual knowledge. If any Lender obtains
actual knowledge of any Event of Default, such Lender promptly shall notify the
other Lenders and Agent of such Event of Default. Each Lender shall be solely
responsible for giving any notices to its Participants, if any. Subject to
Section 16.4, Agent shall take such action with respect to such Default or Event
of Default as may be requested by the Required Lenders in accordance with
Section 9; provided, however, that unless and until Agent has received any such
request, Agent may (but shall not be obligated to) take such action, or refrain
from taking such action, with respect to such Default or Event of Default as it
shall deem advisable.
Credit Decision. Each Lender acknowledges that none of the Agent-Related Persons
has made any representation or warranty to it, and that no act by Agent
hereinafter taken, including any review of the affairs of the Loan Parties and
their Subsidiaries or Affiliates, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender. Each
Lender represents to Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Loan Parties and any other Person (other than the Lender
Group) party to a Loan Document, and all applicable bank regulatory laws
relating to the transactions contemplated hereby, and made its own decision to
enter into this Agreement and to extend credit to the Loan Parties. Each Lender
also represents that it will,
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independently and without reliance upon any Agent-Related Person and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Loan Parties and any other Person (other than the Lender
Group) party to a Loan Document. Except for notices, reports, and other
documents expressly herein required to be furnished to the Lenders by Agent,
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of the Loan Parties
and any other Person party to a Loan Document that may come into the possession
of any of the Agent-Related Persons.
Costs and Expenses; Indemnification. Agent may incur and pay Lender Group
Expenses to the extent Agent reasonably deems necessary or appropriate for the
performance and fulfillment of its functions, powers, and obligations pursuant
to the Loan Documents, including court costs, reasonable attorneys fees and
expenses, costs of collection by outside collection agencies and auctioneer fees
and costs of security guards or insurance premiums paid to maintain the
Collateral, whether or not Borrowers are obligated to reimburse Agent or Lenders
for such expenses pursuant to the Loan Agreement or otherwise. Agent is
authorized and directed to deduct and retain sufficient amounts from Collections
received by Agent to reimburse Agent for such out-of-pocket costs and expenses
prior to the distribution of any amounts to Lenders. In the event Agent is not
reimbursed for such costs and expenses from Collections received by Agent, each
Lender hereby agrees that it is and shall be obligated to pay to or reimburse
Agent for the amount of such Lender's Pro Rata Share thereof. Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand the Agent-Related Persons (to the extent not reimbursed by or on
behalf of Borrowers and without limiting the obligation of Borrowers to do so),
according to their Pro Rata Shares, from and against any and all Indemnified
Liabilities; provided, however, that no Lender shall be liable for the payment
to any Agent-Related Person of any portion of such Indemnified Liabilities
resulting solely from such Person's gross negligence or willful misconduct nor
shall any Lender be liable for the obligations of any Defaulting Lender in
failing to make an Advance or other extension of credit hereunder. Without
limitation of the foregoing, each Lender shall reimburse Agent upon demand for
such Lender's ratable share of any costs or out-of-pocket expenses (including
attorneys fees and expenses) incurred by Agent in connection with the
preparation, execution, delivery, administration, modification, amendment, or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that Agent is not reimbursed for such expenses by or on behalf of
Borrowers. The undertaking in this Section shall survive the payment of all
Obligations hereunder and the resignation or replacement of Agent.
Agent in Individual Capacity. Foothill and its Affiliates may make loans to,
issue letters of credit for the account of, accept deposits from, acquire equity
interests in, and generally engage in any kind of banking, lending, trust,
financial advisory, underwriting, or other business with the Loan Parties and
their Subsidiaries and Affiliates and any other Person party to any Loan
Documents as though Foothill were not Agent hereunder, and, in each case,
without notice to or
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consent of the other members of the Lender Group. The other members of the
Lender Group acknowledge that, pursuant to such activities, Agent or its
Affiliates may receive information regarding the Loan Parties or their
Affiliates and any other Person (other than the Lender Group) party to any Loan
Documents that is subject to confidentiality obligations in favor of the Loan
Parties or such other Person and that prohibit the disclosure of such
information to the Lenders, and the Lenders acknowledge that, in such
circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver Agent will use its reasonable best efforts to obtain),
Agent shall not be under any obligation to provide such information to them. The
terms "Lender" and "Lenders" include Foothill in its individual capacity.
Successor Agent. Agent may resign as Agent upon 45 days' notice to the Lenders.
If Agent resigns under this Agreement, the Required Lenders shall appoint a
successor Agent for the Lenders. If no successor Agent is appointed prior to the
effective date of the resignation of Agent, Agent may appoint, after consulting
with the Lenders, a successor Agent. If Agent has materially breached or failed
to perform any material provision of this Agreement or of applicable law, the
Required Lenders may agree in writing to remove and replace Agent with a
successor Agent from among the Lenders. In any such event, upon the acceptance
of its appointment as successor Agent hereunder, such successor Agent shall
succeed to all the rights, powers, and duties of the retiring Agent and the term
"Agent" shall mean such successor Agent and the retiring Agent's appointment,
powers, and duties as Agent shall be terminated. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Section 16 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement. If no successor Agent has accepted appointment as
Agent by the date which is 45 days following a retiring Agent's notice of
resignation, the retiring Agent's resignation shall nevertheless thereupon
become effective and the Lenders shall perform all of the duties of Agent
hereunder until such time, if any, as the Lenders appoint a successor Agent as
provided for above.
Lender in Individual Capacity. Any Lender and its respective Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Loan Parties and
their Subsidiaries and Affiliates and any other Person (other than the Lender
Group) party to any Loan Documents as though such Lender were not a Lender
hereunder without notice to or consent of the other members of the Lender Group.
The other members of the Lender Group acknowledge that, pursuant to such
activities, such Lender and its respective Affiliates may receive information
regarding the Loan Parties or their Affiliates and any other Person (other than
the Lender Group) party to any Loan Documents that is subject to confidentiality
obligations in favor of the Loan Parties or such other Person and that prohibit
the disclosure of such information to the Lenders, and the Lenders acknowledge
that, in such circumstances (and in the absence of a waiver of such
confidentiality obligations, which waiver such Lender will use its reasonable
best efforts to obtain), such Lender not shall be under any obligation to
provide such information to them. With respect to the Swing Loans and Agent
Advances, Swing Lender shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not
the sub-agent of the Agent.
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WITHHOLDING TAXES.
If any Lender is a "foreign corporation, partnership or trust" within the
meaning of the IRC and such Lender claims exemption from, or a reduction of,
U.S. withholding tax under Sections 1441 or 1442 of the IRC, such Lender agrees
with and in favor of Agent and Borrowers, to deliver to Agent and Administrative
Borrower:
if such Lender claims an exemption from withholding tax pursuant to its
portfolio interest exception, (A) a statement of the Lender, signed under
penalty of perjury, that it is not a (I) a "bank" as described in Section
881(c)(3)(A) of the IRC, (II) a 10% shareholder (within the meaning of Section
881(c)(3)(B) of the IRC), or (III) a controlled foreign corporation described in
Section 881(c)(3)(C) of the IRC, and (B) a properly completed IRS Form W-8BEN,
before the first payment of any interest under this Agreement and at any other
time reasonably requested by Agent or Administrative Borrower;
if such Lender claims an exemption from, or a reduction of, withholding tax
under a United States tax treaty, properly completed IRS Form W-8BEN before the
first payment of any interest under this Agreement and at any other time
reasonably requested by Agent or Administrative Borrower;
if such Lender claims that interest paid under this Agreement is exempt from
United States withholding tax because it is effectively connected with a United
States trade or business of such Lender, two properly completed and executed
copies of IRS Form W-8ECI before the first payment of any interest is due under
this Agreement and at any other time reasonably requested by Agent or
Administrative Borrower;
such other form or forms as may be required under the IRC or other laws of the
United States as a condition to exemption from, or reduction of, United States
withholding tax.
Such Lender agrees promptly to notify Agent and Administrative
Borrower of any change in circumstances which would modify or render invalid any
claimed exemption or reduction.
If any Lender claims exemption from, or reduction of, withholding tax under a
United States tax treaty by providing IRS Form W-8BEN and such Lender sells,
assigns, grants a participation in, or otherwise transfers all or part of the
Obligations of Borrowers to such Lender, such Lender agrees to notify Agent of
the percentage amount in which it is no longer the beneficial owner of
Obligations of Borrowers to such Lender. To the extent of such percentage
amount, Agent will treat such Lender's IRS Form W-8BEN as no longer valid.
If any Lender is entitled to a reduction in the applicable withholding tax,
Agent may withhold from any interest payment to such Lender an amount equivalent
to the applicable withholding tax after taking into account such reduction. If
the forms or other documentation required by subsection (a) of this Section are
not delivered to Agent, then Agent may withhold from any interest payment to
such Lender not providing such forms or other documentation an amount equivalent
to the applicable withholding tax.
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If the IRS or any other Governmental Authority of the United States or other
jurisdiction asserts a claim that Agent did not properly withhold tax from
amounts paid to or for the account of any Lender (because the appropriate form
was not delivered, was not properly executed, or because such Lender failed to
notify Agent of a change in circumstances which rendered the exemption from, or
reduction of, withholding tax ineffective, or for any other reason) such Lender
shall indemnify and hold Agent harmless for all amounts paid, directly or
indirectly, by Agent as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable to Agent
under this Section, together with all costs and expenses (including attorneys
fees and expenses). The obligation of the Lenders under this subsection shall
survive the payment of all Obligations and the resignation or replacement of
Agent.
All payments made by Borrowers hereunder or under any note or other Loan
Document will be made without setoff, counterclaim, or other defense, except as
required by applicable law other than for Taxes (as defined below). All such
payments will be made free and clear of, and without deduction or withholding
for, any present or future taxes, levies, imposts, duties, fees, assessments or
other charges of whatever nature now or hereafter imposed by any jurisdiction
(other than the United States) or by any political subdivision or taxing
authority thereof or therein (other than of the United States) with respect to
such payments (but excluding, any tax imposed by any jurisdiction or by any
political subdivision or taxing authority thereof or therein (i) measured by or
based on the net income or net profits of a Lender, or (ii) to the extent that
such tax results from a change in the circumstances of the Lender, including a
change in the residence, place of organization, or principal place of business
of the Lender, or a change in the branch or lending office of the Lender
participating in the transactions set forth herein) and all interest, penalties
or similar liabilities with respect thereto (all such non-excluded taxes,
levies, imposts, duties, fees, assessments or other charges being referred to
collectively as "Taxes"). If any Taxes are so levied or imposed, each Borrower
agrees to pay the full amount of such Taxes, and such additional amounts as may
be necessary so that every payment of all amounts due under this Agreement or
under any note, including any amount paid pursuant to this Section 16.11(e)
after withholding or deduction for or on account of any Taxes, will not be less
than the amount provided for herein; provided, however, that Borrowers shall not
be required to increase any such amounts payable to Agent or any Lender (i) that
is not organized under the laws of the United States, if such Person fails to
comply with the other requirements of this Section 16.11, or (ii) if the
increase in such amount payable results from Agent's or such Lender's own
willful misconduct or gross negligence. Administrative Borrower will furnish to
Agent as promptly as possible after the date the payment of any Taxes is due
pursuant to applicable law certified copies of tax receipts evidencing such
payment by Borrowers.
COLLATERAL MATTERS.
The Lenders hereby irrevocably authorize Agent, at its option and in its sole
discretion, to release any Lien on any Collateral (i) upon the termination of
the Commitments and payment and satisfaction in full by Borrowers of all
Obligations, (ii) constituting property being sold or disposed of if a release
is required or desirable in connection therewith and if Administrative Borrower
certifies to Agent that the sale or disposition is permitted under Section 7.4
of this Agreement or the other Loan Documents (and Agent may rely conclusively
on any such certificate, without further inquiry), (iii) constituting property
in which no Loan Party owned any
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interest at the time the security interest was granted or at any time
thereafter, or (iv) constituting property leased to a Loan Party under a lease
that has expired or is terminated in a transaction permitted under this
Agreement. Except as provided above, Agent will not execute and deliver a
release of any Lien on any Collateral without the prior written authorization of
(y) if the release is of all or any substantial portion of the Collateral, all
of the Lenders, or (z) otherwise, the Required Lenders. Upon request by Agent or
Administrative Borrower at any time, the Lenders will confirm in writing Agent's
authority to release any such Liens on particular types or items of Collateral
pursuant to this Section 16.12; provided, however, that (1) Agent shall not be
required to execute any document necessary to evidence such release on terms
that, in Agent's opinion, would expose Agent to liability or create any
obligation or entail any consequence other than the release of such Lien without
recourse, representation, or warranty, and (2) such release shall not in any
manner discharge, affect, or impair the Obligations or any Liens (other than
those expressly being released) upon (or obligations of a Loan Party in respect
of) all interests retained by a Loan Party, including, the proceeds of any sale,
all of which shall continue to constitute part of the Collateral.
Agent shall have no obligation whatsoever to any of the Lenders to assure that
the Collateral exists or is owned by a Loan Party or is cared for, protected, or
insured or has been encumbered, or that the Agent's Liens have been properly or
sufficiently or lawfully created, perfected, protected, or enforced or are
entitled to any particular priority, or to exercise at all or in any particular
manner or under any duty of care, disclosure or fidelity, or to continue
exercising, any of the rights, authorities and powers granted or available to
Agent pursuant to any of the Loan Documents, it being understood and agreed that
in respect of the Collateral, or any act, omission, or event related thereto,
subject to the terms and conditions contained herein, Agent may act in any
manner it may deem appropriate, absent Agent's gross negligence or willful
misconduct in its sole discretion given Agent's own interest in the Collateral
in its capacity as one of the Lenders and that Agent shall have no other duty or
liability whatsoever to any Lender as to any of the foregoing, except as
otherwise provided herein.
RESTRICTIONS ON ACTIONS BY LENDERS; SHARING OF PAYMENTS.
Each of the Lenders agrees that it shall not, without the express consent of
Agent, and that it shall, to the extent it is lawfully entitled to do so, upon
the request of Agent, set off against the Obligations, any amounts owing by such
Lender to the Loan Parties or any deposit accounts of the Loan Parties now or
hereafter maintained with such Lender. Each of the Lenders further agrees that
it shall not, unless specifically requested to do so by Agent, take or cause to
be taken any action, including, the commencement of any legal or equitable
proceedings, to foreclose any Lien on, or otherwise enforce any security
interest in, any of the Collateral the purpose of which is, or could be, to give
such Lender any preference or priority against the other Lenders with respect to
the Collateral.
If, at any time or times any Lender shall receive (i) by payment, foreclosure,
setoff, or otherwise, any proceeds of Collateral or any payments with respect to
the Obligations arising under, or relating to, this Agreement or the other Loan
Documents, except for any such proceeds or payments received by such Lender from
Agent pursuant to the terms of this Agreement, or (ii) payments from Agent in
excess of such Lender's Pro Rata Share of all such distributions by Agent, such
Lender promptly shall (1) turn the same over to Agent, in kind, and with such
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endorsements as may be required to negotiate the same to Agent, or in
immediately available funds, as applicable, for the account of all of the
Lenders and for application to the Obligations in accordance with the applicable
provisions of this Agreement, or (2) purchase, without recourse or warranty, an
undivided interest and participation in the Obligations owed to the other
Lenders so that such excess payment received shall be applied ratably as among
the Lenders in accordance with their Pro Rata Shares; provided, however, that if
all or part of such excess payment received by the purchasing party is
thereafter recovered from it, those purchases of participations shall be
rescinded in whole or in part, as applicable, and the applicable portion of the
purchase price paid therefor shall be returned to such purchasing party, but
without interest except to the extent that such purchasing party is required to
pay interest in connection with the recovery of the excess payment.
Agency for Perfection. Agent hereby appoints each other Lender as its agent (and
each Lender hereby accepts such appointment) for the purpose of perfecting the
Agent's Liens in assets which, in accordance with Article 9 of the Code can be
perfected only by possession. Should any Lender obtain possession of any such
Collateral, such Lender shall notify Agent thereof, and, promptly upon Agent's
request therefor shall deliver such Collateral to Agent or in accordance with
Agent's instructions.
Payments by Agent to the Lenders. All payments to be made by Agent to the
Lenders shall be made by bank wire transfer or internal transfer of immediately
available funds pursuant to such wire transfer instructions as each party may
designate for itself by written notice to Agent. Concurrently with each such
payment, Agent shall identify whether such payment (or any portion thereof)
represents principal, premium, or interest of the Obligations.
Concerning the Collateral and Related Loan Documents. Each member of the Lender
Group authorizes and directs Agent to enter into this Agreement and the other
Loan Documents relating to the Collateral, for the benefit of the Lender Group.
Each member of the Lender Group agrees that any action taken by Agent in
accordance with the terms of this Agreement or the other Loan Documents relating
to the Collateral and the exercise by Agent of its powers set forth therein or
herein, together with such other powers that are reasonably incidental thereto,
shall be binding upon all of the Lenders.
Field Audits and Examination Reports; Confidentiality; Disclaimers by Lenders;
Other Reports and Information. By becoming a party to this Agreement, each
Lender:
is deemed to have requested that Agent furnish such Lender, promptly after it
becomes available, a copy of each field audit or examination report (each a
"Report" and collectively, "Reports") prepared by or at the request of Agent,
and Agent shall so furnish each Lender with such Reports,
expressly agrees and acknowledges that Agent does not (i) make any
representation or warranty as to the accuracy of any Report, and (ii) shall not
be liable for any information contained in any Report,
expressly agrees and acknowledges that the Reports are not comprehensive audits
or examinations, that Agent or other party performing any audit or examination
will inspect only
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specific information regarding the Loan Parties and will rely significantly upon
the Books, as well as on representations of the Loan Parties' personnel,
agrees to keep all Reports and other material, non-public information regarding
the Loan Parties and their Subsidiaries and their operations, assets, and
existing and contemplated business plans in a confidential manner; it being
understood and agreed by Borrowers that in any event such Lender may make
disclosures (a) to counsel for and other advisors, accountants, and auditors to
such Lender, (b) reasonably required by any bona fide potential or actual
Assignee or Participant in connection with any contemplated or actual assignment
or transfer by such Lender of an interest herein or any participation interest
in such Lender's rights hereunder, (c) of information that has become public by
disclosures made by Persons other than such Lender, its Affiliates, assignees,
transferees, or Participants, or (d) as required or requested by any court,
governmental or administrative agency, pursuant to any subpoena or other legal
process, or by any law, statute, regulation, or court order; provided, however,
that, unless prohibited by applicable law, statute, regulation, or court order,
such Lender shall notify Administrative Borrower of any request by any court,
governmental or administrative agency, or pursuant to any subpoena or other
legal process for disclosure of any such non-public material information
concurrent with, or where practicable, prior to the disclosure thereof, and
without limiting the generality of any other indemnification provision contained
in this Agreement, agrees: (i) to hold Agent and any such other Lender preparing
a Report harmless from any action the indemnifying Lender may take or conclusion
the indemnifying Lender may reach or draw from any Report in connection with any
loans or other credit accommodations that the indemnifying Lender has made or
may make to Borrowers, or the indemnifying Lender's participation in, or the
indemnifying Lender's purchase of, a loan or loans of Borrowers; and (ii) to pay
and protect, and indemnify, defend and hold Agent, and any such other Lender
preparing a Report harmless from and against, the claims, actions, proceedings,
damages, costs, expenses, and other amounts (including, attorneys fees and
costs) incurred by Agent and any such other Lender preparing a Report as the
direct or indirect result of any third parties who might obtain all or part of
any Report through the indemnifying Lender.
In addition to the foregoing: (x) any Lender may from time to time
request of Agent in writing that Agent provide to such Lender a copy of any
report or document provided by a Loan Party to Agent that has not been
contemporaneously provided by such Loan Party to such Lender, and, upon receipt
of such request, Agent shall provide a copy of same to such Lender, (y) to the
extent that Agent is entitled, under any provision of the Loan Documents, to
request additional reports or information from a Loan Party, any Lender may,
from time to time, reasonably request Agent to exercise such right as specified
in such Lender's notice to Agent, whereupon Agent promptly shall request of such
Loan Party the additional reports or information reasonably specified by such
Lender, and, upon receipt thereof from such Loan Party, Agent promptly shall
provide a copy of same to such Lender, and (z) any time that Agent renders to a
Loan Party a statement regarding the Loan Account, Agent shall send a copy of
such statement to each Lender.
Several Obligations; No Liability. Notwithstanding that certain of the Loan
Documents now or hereafter may have been or will be executed only by or in favor
of Agent in its capacity as such, and not by or in favor of the Lenders, any and
all obligations on the part of Lenders to make any
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credit available hereunder shall constitute the several (and not joint)
obligations of the respective Lenders on a ratable basis, according to their
respective Commitments, to make an amount of such credit not to exceed, in
principal amount, at any one time outstanding, the amount of their respective
Commitments. Nothing contained herein shall confer upon any Lender any interest
in, or subject any Lender to any liability for, or in respect of, the business,
assets, profits, losses, or liabilities of any other Lender. Each Lender shall
be solely responsible for notifying its Participants of any matters relating to
the Loan Documents to the extent any such notice may be required, and no Lender
shall have any obligation, duty, or liability to any Participant of any other
Lender. Except as provided in Section 16.7, no member of the Lender Group shall
have any liability for the acts or any other member of the Lender Group. No
Lender shall be responsible to any Loan Party or any other Person for any
failure by any other Lender to fulfill its obligations to make credit available
hereunder, nor to advance for it or on its behalf in connection with its
Commitment, nor to take any other action on its behalf hereunder or in
connection with the financing contemplated herein.
GENERAL PROVISIONS.
Effectiveness. This Agreement shall be binding and deemed effective when
executed by Borrowers, Agent, and each Lender whose signature is provided for on
the signature pages hereof.
Section Headings. Headings and numbers have been set forth herein for
convenience only. Unless the contrary is compelled by the context, everything
contained in each Section applies equally to this entire Agreement.
Interpretation. Neither this Agreement nor any uncertainty or ambiguity herein
shall be construed or resolved against the Lender Group or Borrowers, whether
under any rule of construction or otherwise. On the contrary, this Agreement has
been reviewed by all parties and shall be construed and interpreted according to
the ordinary meaning of the words used so as to accomplish fairly the purposes
and intentions of all parties hereto.
Severability of Provisions. Each provision of this Agreement shall be severable
from every other provision of this Agreement for the purpose of determining the
legal enforceability of any specific provision.
Amendments in Writing. This Agreement only can be amended by a writing in
accordance with Section 15.1.
Counterparts; Telefacsimile Execution. This Agreement may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which, when executed and delivered, shall be deemed to be an original, and
all of which, when taken together, shall constitute but one and the same
Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile shall be equally as effective as delivery of an original executed
counterpart of this Agreement. Any party delivering an executed counterpart of
this Agreement by telefacsimile also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and
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binding effect of this Agreement. The foregoing shall apply to each other Loan
Document mutatis mutandis.
Revival and Reinstatement of Obligations. If the incurrence or payment of the
Obligations by any Loan Party or the transfer to the Lender Group of any
property should for any reason subsequently be declared to be void or voidable
under any state, or federal law relating to creditors' rights, including
provisions of the Bankruptcy Code relating to fraudulent conveyances,
preferences, or other voidable or recoverable payments of money or transfers of
property (collectively, a "Voidable Transfer"), and if the Lender Group is
required to repay or restore, in whole or in part, any such Voidable Transfer,
or elects to do so upon the reasonable advice of its counsel, then, as to any
such Voidable Transfer, or the amount thereof that the Lender Group is required
or elects to repay or restore, and as to all reasonable costs, expenses, and
attorneys fees of the Lender Group related thereto, the liability of each Loan
Party automatically shall be revived, reinstated, and restored and shall exist
as though such Voidable Transfer had never been made.
Integration. This Agreement, together with the other Loan Documents, reflects
the entire understanding of the parties with respect to the transactions
contemplated hereby and shall not be contradicted or qualified by any other
agreement, oral or written, before the date hereof.
Parent as Agent for Borrowers. Each Borrower hereby irrevocably appoints Parent
as the borrowing agent and attorney-in-fact for all Borrowers (the
"Administrative Borrower") which appointment shall remain in full force and
effect unless and until Agent shall have received prior written notice signed by
each Borrower that such appointment has been revoked and that another Borrower
has been appointed Administrative Borrower. Each Borrower hereby irrevocably
appoints and authorizes the Administrative Borrower (i) to provide Agent with
all notices with respect to Advances and Letters of Credit obtained for the
benefit of any Borrower and all other notices and instructions under this
Agreement and (ii) to take such action as the Administrative Borrower deems
appropriate on its behalf to obtain Advances and Letters of Credit and to
exercise such other powers as are reasonably incidental thereto to carry out the
purposes of this Agreement. It is understood that the handling of the Loan
Account and Collateral of Borrowers in a combined fashion, as more fully set
forth herein, is done solely as an accommodation to Borrowers in order to
utilize the collective borrowing powers of Borrowers in the most efficient and
economical manner and at their request, and that Lender Group shall not incur
liability to any Borrower as a result hereof. Each Borrower expects to derive
benefit, directly or indirectly, from the handling of the Loan Account and the
Collateral in a combined fashion since the successful operation of each Borrower
is dependent on the continued successful performance of the integrated group. To
induce the Lender Group to do so, and in consideration thereof, each Borrower
hereby jointly and severally agrees to indemnify each member of the Lender Group
and hold each member of the Lender Group harmless against any and all liability,
expense, loss or claim of damage or injury, made against the Lender Group by any
Borrower or by any third party whosoever, arising from or incurred by reason of
(a) the handling of the Loan Account and Collateral of Borrowers as herein
provided, (b) the Lender Group's relying on any instructions of the
Administrative Borrower, or (c) any other action taken by the Lender Group
hereunder or under the other Loan Documents, except that Borrowers will have no
liability to the relevant Agent-Related Person or Lender-Related Person under
this Section 17.9 with respect to any liability that has been finally determined
by a court of competent jurisdiction to have resulted
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solely from the gross negligence or willful misconduct of such Agent-Related
Person or Lender-Related Person, as the case may be.
Confidentiality The Agent and each Lender agrees that material, non-public
information regarding Parent and its Subsidiaries, their operations, assets, and
existing and contemplated business plans shall be treated by it in a
confidential manner, and shall not be disclosed by it to Persons who are not
parties to this Agreement, except: (a) to counsel for and other advisors,
accountants, and auditors to any member of the Lender Group, (b) to Subsidiaries
and Affiliates of any member of the Lender Group (including Xxxxx Fargo or any
of its Affiliates), provided that any such Subsidiary or Affiliate shall have
agreed to receive such information hereunder subject to the terms of this
Section, (c) as may be required by statute, decision, or judicial or
administrative order, rule, or regulation, (d) as may be agreed to in advance by
Parent or its Subsidiaries, (e) as to any such information that is or becomes
generally available to the public (other than as a result of prohibited
disclosure by the Lender Group), and (f) in connection with any assignment,
prospective assignment, sale, prospective sale, participation or prospective
participations, or pledge or prospective pledge of any Lender's interest under
this Agreement, provided that any such assignee, prospective assignee,
purchaser, prospective purchaser, participant, prospective participant, pledgee,
or prospective pledgee shall have agreed in writing to receive such information
hereunder subject to the terms hereof. The provisions of this Section 17.10
shall survive for 2 years after the full and final repayment of the Obligations
(other than contingent indemnification Obligations and other than any Bank
Product Obligations that remain outstanding after the termination of this
Agreement and the repayment of all other Obligations).
[Signature pages to follow.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered as of the date first above written.
BORROWERS:
BEST METAL FINISHING, INC.
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
XXXXXX CONSTRUCTION COMPANY
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
CENTRIFUGAL SERVICES, INC.
an Illinois corporation
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
CLINCH RIVER CORPORATION
a Virginia corporation
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
ELGIN INTERNATIONAL, LTD.
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
ELGIN NATIONAL INDUSTRIES, INC.
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
ELGIN REAL ESTATE HOLDINGS, LTD.
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
XXXXXX-XXXXXX FASTENERS, INC.
a Tennessee corporation
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
MINING CONTROLS, INC.
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
XXXXXX SCREEN AND MANUFACTURING, INC.
a West Virginia corporation
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
XXXXXXX & XXXXXXXX COMPANY
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
XXXXXXX & XXXXXXXX INTERNATIONAL, LTD.
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
XXXXX ASSOCIATES, INC.
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
XXXXX INTERNATIONAL, LTD.
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
XXXXX MACHINE COMPANY
a West Virginia corporation
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
TRANSERVICE, INC.
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
VANCO INTERNATIONAL, INC.
a Georgia corporation
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
AGENT AND LENDER:
FOOTHILL CAPITAL CORPORATION
a California corporation, as Agent and as
Lender
By: /s/ Xxxxxxx Xxxxx
---------------------------------------
Name: Xxxxxxx Xxxxx
Title: V.P.
LENDERS:
ABLECO FINANCE LLC
a Delaware limited liability company, as a
Lender
By: /s/ Xxxx X. Neporent
---------------------------------------
Name: Xxxx X. Neporent
Title: Senior Vice President
