EXECUTION COPY
================================================================================
CREDIT AGREEMENT
DATED AS OF FEBRUARY 7, 2006
by and among
RATHGIBSON, INC.
as Borrower
and
THE OTHER PERSONS PARTY HERETO THAT ARE
DESIGNATED AS CREDIT PARTIES
and
GENERAL ELECTRIC CAPITAL CORPORATION
as Agent, L/C Issuer and a Lender
and
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
as Lenders
================================================================================
TABLE OF CONTENTS
PAGE
SECTION 1. AMOUNTS AND TERMS OF LOANS..........................................1
1.1 Loans...........................................................1
1.2 Interest and Applicable Margins.................................6
1.3 Fees............................................................8
1.4 Payments.......................................................10
1.5 Prepayments....................................................10
1.6 Maturity.......................................................11
1.7 Eligible Accounts..............................................12
1.8 Eligible Inventory.............................................14
1.8A Eligible M&E...................................................15
1.8B Eligible Real Estate...........................................16
1.9 Loan Accounts..................................................17
1.10 Yield Protection; Illegality...................................18
1.11 Taxes..........................................................18
SECTION 2. AFFIRMATIVE COVENANTS..............................................20
2.1 Compliance with Laws and Contractual Obligations...............20
2.2 Insurance; Damage to or Destruction of Collateral..............20
2.3 Inspection; Lender Meeting.....................................21
2.4 Organizational Existence.......................................21
2.5 Environmental Matters..........................................22
2.6 Landlords' Agreements, Mortgagee Agreements, Bailee
Letters and Real Estate Purchases..............................22
2.7 Conduct of Business............................................22
2.8 Further Assurances.............................................23
2.9 Omitted........................................................24
2.10 Cash Management Systems........................................24
2.11 Consents.......................................................24
2.12 Supplemental Disclosure........................................24
SECTION 3. NEGATIVE COVENANTS.................................................25
3.1 Indebtedness...................................................25
3.2 Liens and Related Matters......................................29
3.3 [Intentionally Omitted]........................................31
3.4 [Intentionally Omitted]........................................31
3.5 Restricted Payments............................................31
3.6 Restriction on Fundamental Changes.............................34
3.7 Disposal of Assets or Subsidiary Stock.........................36
3.8 Transactions with Affiliates...................................37
3.9 Conduct of Business............................................38
3.10 Changes Relating to Indebtedness...............................38
3.11 Fiscal Year....................................................39
3.12 Press Release; Public Offering Materials.......................39
-i-
3.13 Subsidiaries...................................................39
3.14 Bank Accounts..................................................39
3.15 Hazardous Materials............................................39
3.16 ERISA..........................................................39
3.17 Sale Leasebacks................................................39
3.18 Prepayments of Other Indebtedness..............................40
SECTION 4. FINANCIAL COVENANTS/REPORTING......................................40
4.1 Omitted........................................................40
4.2 Omitted........................................................40
4.3 Omitted........................................................40
4.4 Omitted........................................................40
4.5 Omitted........................................................40
4.6 Omitted........................................................40
4.7 Omitted........................................................40
4.8 Omitted........................................................40
4.9 Financial Statements and Other Reports.........................41
4.10 Accounting Terms; Utilization of GAAP for Purposes of
Calculations Under Agreement...................................45
SECTION 5. REPRESENTATIONS AND WARRANTIES.....................................45
5.1 Disclosure.....................................................45
5.2 No Material Adverse Effect.....................................45
5.3 No Conflict....................................................45
5.4 Organization, Powers, Capitalization and Good Standing.........46
5.5 Financial Statements and Projections...........................46
5.6 Intellectual Property..........................................47
5.7 Investigations, Audits, Etc....................................47
5.8 Employee Matters...............................................47
5.9 Solvency.......................................................47
5.10 Litigation; Adverse Facts......................................48
5.11 Use of Proceeds; Margin Regulations............................48
5.12 Ownership of Property; Liens...................................48
5.13 Environmental Matters..........................................48
5.14 ERISA..........................................................49
5.15 Brokers........................................................50
5.16 Deposit and Disbursement Accounts..............................50
5.17 Agreements and Other Documents.................................50
5.18 Insurance......................................................50
5.19 OFAC...........................................................50
5.20 Patriot Act and Foreign Corrupt Practices Act..................51
5.21 Taxes..........................................................51
SECTION 6. DEFAULT, RIGHTS AND REMEDIES.......................................51
6.1 Event of Default...............................................51
6.2 Suspension or Termination of Commitments.......................53
6.3 Acceleration and Other Remedies................................53
6.4 Performance by Agent...........................................54
6.5 Application of Proceeds........................................54
-ii-
SECTION 7. CONDITIONS TO LOANS................................................54
7.1 Conditions to Initial Loans....................................55
7.2 Conditions to All Loans........................................55
SECTION 8. ASSIGNMENT AND PARTICIPATION.......................................55
8.1 Assignment and Participations..................................55
8.2 Agent..........................................................57
8.3 Set Off and Sharing of Payments................................61
8.4 Disbursement of Funds..........................................61
8.5 Disbursements of Advances; Payment.............................62
8.6 Actions in Concert.............................................63
SECTION 9. MISCELLANEOUS......................................................64
9.1 Indemnities....................................................64
9.2 Amendments and Waivers.........................................64
9.3 Notices........................................................65
9.4 Failure or Indulgence Not Waiver; Remedies Cumulative..........66
9.5 Marshaling; Payments Set Aside.................................66
9.6 Severability...................................................67
9.7 Lenders' Obligations Several; Independent Nature of
Lenders' Rights................................................67
9.8 Headings.......................................................67
9.9 Applicable Law.................................................67
9.10 Successors and Assigns.........................................67
9.11 No Fiduciary Relationship; Limited Liability...................67
9.12 Construction...................................................67
9.13 Confidentiality................................................67
9.14 CONSENT TO JURISDICTION........................................68
9.15 WAIVER OF JURY TRIAL...........................................68
9.16 Survival of Warranties and Certain Agreements..................68
9.17 Entire Agreement...............................................68
9.18 Counterparts; Effectiveness....................................68
9.19 Replacement of Lenders.........................................69
9.20 Delivery of Termination Statements and Mortgage Releases.......70
9.21 Subordination of Intercompany Debt.............................70
-iii-
INDEX OF APPENDICES
Annexes
--------
Annex A - Definitions
Annex B - Pro Rata Shares and Commitment Amounts
Annex C - Closing Checklist
Annex D - Pro Forma
Annex E - Lenders' Bank Accounts
Exhibits
--------
Exhibit 1.1(a)(i) - Revolving Note
Exhibit 1.1(a)(ii) - Notice of Revolving Credit Advance
Exhibit 1.1(c) - Swing Line Note
Exhibit 1.2(e) - Notice of Continuation/Conversion
Exhibit 4.9(d) - Borrowing Base Certificate
Exhibit 4.9(k) - Compliance Certificate
Exhibit 8.1 - Assignment Agreement
Exhibit A-1 - Fixed Charge Coverage Ratio
Exhibit B - Form of Copyright Security Agreement
Exhibit C - Form of Patent Security Agreement
Schedules
---------
Schedule 2.7 - Corporate and Trade Names
Schedule 3.1 - Indebtedness
Schedule 3.3 - Investments
Schedule 3.4 - Contingent Obligations
Schedule 3.8 - Affiliate Transactions
Schedule 5.4(a) - Jurisdictions of Organization and Qualifications
Schedule 5.4(b) - Capitalization
Schedule 5.6 - Intellectual Property
Schedule 5.7 - Investigations and Audits
Schedule 5.8 - Employee Matters
Schedule 5.10 - Litigation
Schedule 5.12 - Real Estate
Schedule 5.13 - Environmental Matters
Schedule 5.14 - ERISA
Schedule 5.16 - Deposit and Disbursement Accounts
Schedule 5.17 - Agreements and Other Documents
Schedule 5.18 - Insurance
-iv-
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of February 7, 2006 and entered into
by and among RATHGIBSON, INC., a Delaware corporation ("RathGibson" or the
"Borrower"), the other persons designated as "Credit Parties" on the signature
pages hereof, the financial institutions who are or hereafter become parties to
this Agreement as Lenders, and GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware
corporation (in its individual capacity "GE Capital"), as the initial L/C Issuer
and as Agent.
R E C I T A L S:
WHEREAS, Borrower desires that Lenders extend a revolving credit
facility to Borrower to refinance existing Indebtedness (as hereinafter defined)
of Borrower and to provide working capital for Borrower; and
WHEREAS, pursuant to the Acquisition Agreement (as hereinafter defined),
RGCH Holdings Corp., a Delaware corporation ("Holdings") intends to acquire all
the Stock of Borrower contemporaneously with the Closing Date (the
"Acquisition"); and
WHEREAS, Borrower desires to secure all of its Obligations (as
hereinafter defined) under the Loan Documents (as hereinafter defined) by
granting to Agent, for the benefit of Agent and Lenders, a security interest in
and lien upon substantially all of its personal and real property; and
WHEREAS, after giving effect to the Acquisition, Holdings will own all
of the Stock of Borrower and is willing to guaranty the Obligations and to
pledge to Agent, for the benefit of Agent and Lenders, all of the Stock of
Borrower to secure the Obligations; and
WHEREAS, all capitalized terms herein shall have the meanings ascribed
thereto in Annex A hereto which is incorporated herein by reference.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Borrower, Credit Parties, Lenders and
Agent agree as follows:
SECTION 1.
AMOUNTS AND TERMS OF LOANS
1.1 Loans. Subject to the terms and conditions of this Agreement and
in reliance upon the representations and warranties of Borrower and the other
Credit Parties contained herein:
(a) Revolving Loans.
(i) Each Revolving Lender agrees, severally and not
jointly, to make available to Borrower from time to time until the Commitment
Termination Date its Pro Rata Share of advances (each a "Revolving Credit
Advance") requested by Borrower hereunder. The Pro Rata Share of the Revolving
Loan of any Revolving Lender (including, without duplication, Swing Line Loans)
shall not at any time exceed its separate Revolving Loan Commitment. Revolving
Credit Advances may be repaid and reborrowed; provided, that the amount of any
Revolving Credit Advance to be made at any time shall not exceed Borrowing
Availability. Borrowing Availability may be further reduced by Reserves imposed
by Agent in its reasonable credit judgment. All Revolving Loans shall be repaid
in full on the Commitment Termination Date. Borrower shall execute and deliver
to each Revolving Lender a note to evidence the Revolving Loan Commitment of
that Revolving Lender. Each note shall be in the principal amount of the
Revolving Loan Commitment of the applicable Revolving Lender, dated the
Closing Date and substantially in the form of Exhibit 1.1(a)(i) (as amended,
restated, renewed, replaced modified or supplemented from time to time, each a
"Revolving Note" and, collectively, the "Revolving Notes"). Other than pursuant
to Section 1.1(a)(ii), if at any time the outstanding Revolving Loans (including
the Swing Line Loans) exceed the Borrowing Base (any such excess Revolving Loans
are herein referred to as "Overadvances"), Lenders shall not be obligated to
make Revolving Credit Advances, no additional Letters of Credit shall be issued
and, except as provided in Section 1.1(a)(ii) below, Revolving Loans must be
repaid within one (1) Business Day and Letters of Credit cash collateralized in
an amount sufficient to eliminate any Overadvances. All Overadvances shall
constitute Index Rate Loans and shall bear interest at the Default Rate.
Revolving Loans which are Index Rate Loans may be requested in any amount with
one (1) Business Day prior written notice required for funding requests equal to
or greater than $5,000,000. For funding requests for such Loans less than
$5,000,000, written notice must be provided by 1:00 p.m. (New York time) on the
Business Day on which the Loan is to be made. All LIBOR Loans require three (3)
Business Days prior written notice. Written notices for funding requests shall
be in the form attached as Exhibit 1.1(a)(ii) ("Notice of Revolving Credit
Advance").
(ii) If Borrower requests that Revolving Lenders
make, or permit to remain outstanding any Overadvances, Agent may, in its sole
discretion, elect to make, or permit to remain outstanding such Overadvances;
provided, however, that Agent may not cause Revolving Lenders to make, or permit
to remain outstanding, aggregate Revolving Loans (including, without
duplication, Swing Line Loans) in excess of the Maximum Amount. If an
Overadvance is made, or permitted to remain outstanding, pursuant to the
preceding sentence, then all Revolving Lenders shall be bound to make, or permit
to remain outstanding such Overadvance based upon their Pro Rata Shares of the
Revolving Loan Commitments in accordance with the terms of this Agreement. If an
Overadvance remains outstanding for more than ninety (90) days during any one
hundred eighty (180) day period, Revolving Loans must be repaid immediately in
an amount sufficient to eliminate all of such Overadvances. Furthermore, holders
of a majority of the Revolving Loan Commitment may prospectively revoke Agent's
ability to make or permit Overadvances by written notice to Agent. Any
Overadvance may be made as a Swing Line Advance.
(b) Omitted.
(c) Swing Line Facility.
(i) Agent shall notify the Swing Line Lender upon
Agent's receipt of any Notice of Revolving Credit Advance. Subject to the terms
and conditions hereof, the Swing Line Lender may, in its discretion, make
available from time to time until the Commitment Termination Date advances
(each, a "Swing Line Advance") in accordance with any such notice. The
provisions of this Section 1.1(c) shall not relieve Revolving Lenders of their
obligations to make Revolving Credit Advances under Section 1.1(a); provided
that if the Swing Line Lender makes a Swing Line Advance pursuant to any such
notice, such Swing Line Advance shall be in lieu of any Revolving Credit Advance
that otherwise may be made by Revolving Lenders pursuant to such notice. Except
as provided in Section 1.1(a)(ii) above, the aggregate amount of Swing Line
Advances outstanding shall not exceed at any time the lesser of (A) the Swing
Line Commitment and (B) Borrowing Availability ("Swing Line Availability").
Until the Commitment Termination Date, Borrower may from time to time borrow,
repay and reborrow under this Section 1.1(c). Each Swing Line Advance shall be
made pursuant to a Notice of Revolving Credit Advance delivered by Borrower to
Agent in accordance with Section 1.1(a). Unless the Swing Line Lender has
received at least one (1) Business Day's prior written notice from Requisite
Lenders instructing it not to make a Swing Line Advance, the Swing Line Lender
shall, notwithstanding the failure of any condition precedent set forth in
Section 7.2, be entitled to fund that Swing Line Advance, and to have each
Revolving Lender make Revolving Credit Advances in accordance with
2
Section 1.1(c)(iii) or purchase participating interests in accordance with
Section 1.1(c)(iv). Notwithstanding any other provision of this Agreement or the
other Loan Documents, the Swing Line Loan shall constitute an Index Rate Loan.
The aggregate outstanding principal amount of the Swing Line Loan shall be
repaid with the proceeds of Revolving Credit Advances made hereunder from time
to time in accordance with Section 1.1(c)(iii). The entire unpaid balance of the
Swing Line Loan and all other noncontingent Obligations shall be immediately due
and payable in full in immediately available funds on the Commitment Termination
Date if not sooner paid in full.
(ii) Borrower shall execute and deliver to the Swing
Line Lender a promissory note to evidence the Swing Line Commitment. Each note
shall be in the principal amount of the Swing Line Commitment of the Swing Line
Lender, dated the Closing Date and substantially in the form of Exhibit 1.1(c)
(as amended, restated, renewed, replaced, modified or supplemented from time to
time, each a "Swing Line Note" and, collectively the "Swing Line Notes"). Each
Swing Line Note shall represent the obligation of Borrower to pay the amount of
the Swing Line Commitment or, if less, the aggregate unpaid principal amount of
all Swing Line Advances made to Borrower together with interest thereon as
prescribed in Section 1.2.
(iii) The Swing Line Lender, at any time and from time
to time in its sole and absolute discretion, may on behalf of Borrower (and
Borrower hereby irrevocably authorizes the Swing Line Lender to so act on its
behalf) request each Revolving Lender (including the Swing Line Lender) to make
a Revolving Credit Advance to Borrower (which shall be an Index Rate Loan) in an
amount equal to that Revolving Lender's Pro Rata Share of the principal amount
of Borrower's Swing Line Loan (the "Refunded Swing Line Loan") outstanding on
the date such notice is given. Unless any of the events described in Sections
6.1(f) and 6.1(g) has occurred (in which event the procedures of Section
1.1(c)(iv) shall apply) and regardless of whether the conditions precedent set
forth in this Agreement to the making of a Revolving Credit Advance are then
satisfied, each Revolving Lender shall disburse directly to Agent, its Pro Rata
Share of a Revolving Credit Advance on behalf of the Swing Line Lender, prior to
3:00 p.m. (New York time), in immediately available funds on the Business Day
next succeeding the date that notice is given. The proceeds of those Revolving
Credit Advances shall be immediately paid to the Swing Line Lender and applied
to repay the Refunded Swing Line Loan.
(iv) If, prior to refunding a Swing Line Loan with a
Revolving Credit Advance pursuant to Section 1.1(c)(iii), one of the events
described in Sections 6.1(f) or 6.1(g) has occurred, then, subject to the
provisions of Section 1.1(c)(v) below, each Revolving Lender shall, on the date
such Revolving Credit Advance was to have been made, purchase from the Swing
Line Lender an undivided participation interest in the Swing Line Loan to
Borrower in an amount equal to its Pro Rata Share (determined with respect to
Revolving Loans) of such Swing Line Loan. Upon request, each Revolving Lender
shall promptly transfer to the Swing Line Lender, in immediately available
funds, the amount of its participation interest.
(v) Each Revolving Lender's obligation to make
Revolving Credit Advances in accordance with Section 1.1(c)(iii) and to purchase
participation interests in accordance with Section 1.1(c)(iv) shall be absolute
and unconditional and shall not be affected by any circumstance, including (A)
any setoff, counterclaim, recoupment, defense or other right that such Revolving
Lender may have against the Swing Line Lender, Borrower or any other Person for
any reason whatsoever; (B) the occurrence or continuance of any Default or Event
of Default; (C) any inability of Borrower to satisfy the conditions precedent to
borrowing set forth in this Agreement at any time or (D) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.
Swing Line Lender shall be entitled to recover, on demand, from each Revolving
Lender the amounts required pursuant to Sections 1.1.(c)(iii) or 1.1(c)(iv), as
the case may be. If any Revolving Lender does not make available such amounts to
Agent or the Swing Line Lender, as applicable, the Swing Line Lender shall be
3
entitled to recover, on demand, such amount on demand from such Revolving
Lender, together with interest thereon for each day from the date of non payment
until such amount is paid in full at the Federal Funds Rate for the first two
Business Days and at the Index Rate thereafter.
(d) Letters of Credit. The Revolving Loan Commitment may,
in addition to advances under the Revolving Loan, be utilized, upon the
request of Borrower, for the issuance of Letters of Credit; provided, that no
Letter of Credit shall be issued in excess of Borrowing Availability.
Immediately upon the issuance by an L/C Issuer of a Letter of Credit, and
without further action on the part of Agent or any of the Lenders, each
Revolving Lender shall be deemed to have purchased from such L/C Issuer a
participation in such Letter of Credit (or in its obligation under a risk
participation agreement with respect thereto) equal to such Revolving
Lender's Pro Rata Share of the aggregate amount available to be drawn under
such Letter of Credit.
(i) Maximum Amount. The aggregate amount of Letter
of Credit Obligations with respect to all Letters of Credit outstanding at any
time shall not exceed $2,000,000 ("L/C Sublimit").
(ii) Reimbursement. Borrower shall be irrevocably and
unconditionally obligated forthwith without presentment, demand, protest or
other formalities of any kind, to reimburse any L/C Issuer on demand in
immediately available funds for any amounts paid by such L/C Issuer with respect
to a Letter of Credit, including all reimbursement payments, Fees, Charges,
costs and expenses paid by such L/C Issuer. Borrower hereby authorizes and
directs Agent, except as provided below, to debit Borrower's account (by
increasing the outstanding principal balance of the Revolving Credit Advances)
in the amount of any payment made by an L/C Issuer with respect to any Letter of
Credit; provided, however, that Agent, in its discretion, may elect not to debit
Borrower's account for such amount if it would result in an Overadvance or if
the conditions precedent set forth in this Agreement to the making of a
Revolving Credit Advance are not satisfied. All amounts paid by an L/C Issuer
with respect to any Letter of Credit that are not immediately repaid by Borrower
with the proceeds of a Revolving Credit Advance shall bear interest at the
interest rate applicable to Revolving Loans which are Index Rate Loans plus, at
the election of Agent or Requisite Lenders, an additional two percent (2.00%)
per annum. In the event Agent elects not to debit Borrower's account for the
reimbursement of any amounts paid by an L/C Issuer with respect to any Letter of
Credit, such reimbursement shall be made within one (1) Business Day of the date
that such L/C Issuer made such payment and until paid shall bear interest at the
interest rate applicable to Revolving Loans which are Index Rate Loans plus, at
the election of Agent or Requisite Lenders, an additional two percent (2.00%)
per annum. Each Revolving Lender agrees to fund its Pro Rata Share of any
Revolving Loan made pursuant to this Section 1.1(d)(ii). In the event Agent
elects not to debit Borrower's account as provided above and Borrower fails to
reimburse the L/C Issuer in full on the date of any payment in respect of a
Letter of Credit, Agent shall promptly notify each Revolving Lender of the
amount of such unreimbursed payment and the accrued interest thereon and each
Revolving Lender, on the next Business Day prior to 3:00 p.m. (New York time),
shall deliver to Agent an amount equal to its Pro Rata Share thereof in same day
funds. Each Revolving Lender hereby absolutely and unconditionally agrees to pay
to the L/C Issuer upon demand by the L/C Issuer such Revolving Lender's Pro Rata
Share of each payment made by the L/C Issuer in respect of a Letter of Credit
and not immediately reimbursed by Borrower or satisfied through a debit of
Borrower's account. Each Revolving Lender acknowledges and agrees that its
obligations pursuant to this subsection in respect of Letters of Credit are
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including setoff, counterclaim, the occurrence and continuance of a
Default or an Event of Default or any failure by Borrower to satisfy any of the
conditions set forth in Section 7.2. If any Revolving Lender fails to make
available to the L/C Issuer the amount of such Revolving Lender's Pro Rata Share
of any payments made by the L/C Issuer in respect of a Letter of Credit as
provided in this
4
Section 1.1(d)(ii), the L/C Issuer shall be entitled to recover such amount on
demand from such Revolving Lender together with interest at the Index Rate.
(iii) Request for Letters of Credit. Borrower shall
give Agent at least three (3) Business Days prior written notice specifying the
date a Letter of Credit is requested to be issued, the amount and the name and
address of the beneficiary and a description of the transactions proposed to be
supported thereby. If Agent informs Borrower that the L/C Issuer cannot issue
the requested Letter of Credit directly, Borrower may request that L/C Issuer
arrange for the issuance of the requested Letter of Credit under a risk
participation agreement with another financial institution reasonably acceptable
to Agent, L/C Issuer and Borrower. The issuance of any Letter of Credit under
this Agreement shall be subject to the conditions that the Letter of Credit (i)
supports a transaction entered into in the ordinary course of business of
Borrower and (ii) is in a form and contains such terms and conditions as are
reasonably satisfactory to the L/C Issuer and, in the case of standby letters of
credit, Agent. The initial notice requesting the issuance of a Letter of Credit
shall be accompanied by the form of the Letter of Credit and the Master Standby
Agreement or Master Documentary Agreement, as applicable, and an application for
a letter of credit, if any, then required by the L/C Issuer completed in a
manner satisfactory to such L/C Issuer. If any provision of any application or
reimbursement agreement is inconsistent with the terms of this Agreement, then
the provisions of this Agreement, to the extent of such inconsistency, shall
control. A request to amend an outstanding Letter of Credit to increase the
maximum amount thereof or to extend the expiration date of an outstanding Letter
of Credit shall be deemed to be a request to issue a Letter of Credit hereunder.
(iv) Expiration Dates of Letters of Credit. The
expiration date of each Letter of Credit shall be on a date which is not later
than the earlier of (a) one year from its date of issuance or (b) the date set
forth in clause (a) of the definition of the term Commitment Termination Date.
Notwithstanding the foregoing, a Letter of Credit may provide for automatic
extensions of its expiration date for one (1) or more successive one (1) year
periods provided that the L/C Issuer has the right to terminate such Letter of
Credit on each such annual expiration date and no renewal term may extend the
term of the Letter of Credit to a date that is later than the date set forth in
clause (a) of the definition of the term Commitment Termination Date. The L/C
Issuer may elect not to renew any such Letter of Credit and, upon direction by
Agent or Requisite Lenders, shall not renew any such Letter of Credit at any
time during the continuance of an Event of Default, provided that, in the case
of a direction by Agent or Requisite Lenders, the L/C Issuer receives such
directions prior to the date notice of non-renewal is required to be given by
the L/C Issuer and the L/C Issuer has had a reasonable period of time to act on
such notice.
(v) Obligations Absolute. The obligation of Borrower
to reimburse the L/C Issuer, Agent and Lenders for payments made in respect of
Letters of Credit issued by the L/C Issuer shall be unconditional and
irrevocable and shall be paid under all circumstances strictly in accordance
with the terms of this Agreement, including the following circumstances: (a) any
lack of validity or enforceability of any Letter of Credit; (b) any amendment or
waiver of or any consent or departure from all or any of the provisions of any
Letter of Credit or any Loan Document; (c) the existence of any claim, set-off,
defense or other right which Borrower, any of its Subsidiaries or Affiliates or
any other Person may at any time have against any beneficiary of any Letter of
Credit, Agent, any L/C Issuer, any Lender or any other Person, whether in
connection with this Agreement, any other Loan Document or any other related or
unrelated agreements or transactions; (d) any draft or other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect; (e) payment under any Letter of Credit against presentation of a
draft or other document that does not substantially comply with the terms of
such Letter of Credit; or (f) any other act or omission to act or delay of any
kind of any L/C Issuer, Agent, any Lender or any other
5
Person or any other event or circumstance whatsoever that might, but for the
provisions of this Section 1.1(d)(v), constitute a legal or equitable discharge
of Borrower's obligations hereunder.
(vi) Obligations of L/C Issuers. Each L/C Issuer
(other than GE Capital) hereby agrees that it will not issue a Letter of Credit
hereunder until it has provided Agent with written notice specifying the amount
and intended issuance date of such Letter of Credit and Agent has returned a
written acknowledgment of such notice to L/C Issuer. Each L/C Issuer (other than
GE Capital) further agrees to provide to Agent: (a) a copy of each Letter of
Credit issued by such L/C Issuer promptly after its issuance; (b) a weekly
report summarizing available amounts under Letters of Credit issued by such L/C
Issuer, the dates and amounts of any draws under such Letters of Credit, the
effective date of any increase or decrease in the face amount of any Letters of
Credit during such week and the amount of any unreimbursed draws under such
Letters of Credit; and (c) such additional information reasonably requested by
Agent from time to time with respect to the Letters of Credit issued by such L/C
Issuer. Without limiting the generality of the foregoing, it is expressly
understood and agreed by Borrower that the absolute and unconditional obligation
of Borrower to Agent and Lenders hereunder to reimburse payments made under a
Letter of Credit will not be excused by the gross negligence or willful
misconduct of the L/C Issuer. However, the foregoing shall not be construed to
excuse an L/C Issuer from liability to Borrower to the extent of any direct
damages (as opposed to consequential damages, with Borrower hereby waiving all
claims for any consequential damages to the extent permitted by Applicable Law)
suffered by Borrower that are subject to indemnification under the Master
Standby Agreement or the Master Documentary Agreement.
(e) Funding Authorization. The proceeds of all Loans made
pursuant to this Agreement subsequent to the Closing Date are to be funded by
Agent by wire transfer to the account designated by Borrower below (the
"Disbursement Account"):
Bank: Xxxxx Fargo Bank N.A.
ABA: 000000000
Bank Address: 420 Xxxxxxxxxx
MAC X0000-000
Xxx Xxxxxxxxx, XX 00000-0000
Account No: 0040000531
Reference: CFN6801
Borrower shall provide Agent with written notice of any change in the foregoing
instructions at least three (3) Business Days before the desired effective date
of such change.
1.2 Interest and Applicable Margins.
(a) Borrower shall pay interest to Agent, for the ratable
benefit of Lenders, in accordance with the various Loans being made by each
Lender, in arrears on each applicable Interest Payment Date, at the following
rates: (i) with respect to the Revolving Credit Advances which are designated
as Index Rate Loans (and for all other Obligations not otherwise set forth
below), the Index Rate plus the Applicable Revolver Index Margin per annum
or, with respect to Revolving Credit Advances which are designated as LIBOR
Loans, at the election of Borrower, the applicable LIBOR Rate plus the
Applicable Revolver LIBOR Margin per annum; and (ii) with respect to the
Swing Line Loan, the Index Rate plus the Applicable Revolver Index Margin per
annum.
The Applicable Margins are as follows:
6
Applicable Revolver Index Margin 1.00%
Applicable Revolver LIBOR Margin 2.00%
Applicable L/C Margin 2.00%
(b) If any payment on any Loan becomes due and payable on a
day other than a Business Day, the maturity thereof will be extended to the
next succeeding Business Day (except as set forth in the definition of LIBOR
Period) and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension
(c) All computations of Fees calculated on a per annum
basis and interest (other than on Loans which are designated as Index Rate
Loans) shall be made by Agent on the basis of a 360-day year, and in the case
of Loans which are designated as Index Rate Loans all computations of
interest shall be made by Agent on the basis of a 365/366-day year, in each
case for the actual number of days occurring in the period for which such
Fees and interest are payable. The Index Rate is a floating rate determined
for each day. Each determination by Agent of an interest rate and Fees
hereunder shall be presumptive evidence, absent manifest error.
(d) So long as an Event of Default has occurred and is
continuing under Section 6.1(a), (f) or (g) and without notice of any kind,
or so long as any other Event of Default has occurred and is continuing and
at the election of Agent (or upon the written request of Requisite Lenders)
confirmed by written notice from Agent to Borrower, the interest rates
applicable to the Loans and the Letter of Credit Fee shall be increased by
two percentage points (2%) per annum above the rates of interest or the rate
of such Fee otherwise applicable hereunder ("Default Rate"), and all
outstanding Obligations shall bear interest at the Default Rate applicable to
such Obligations. Interest and Letter of Credit Fees at the Default Rate
shall accrue, in the case of an Event of Default that has occurred and is
continuing under Section 6.1(a), (f) or (g), from the initial date of such
Event of Default until that Event of Default is cured or waived and in the
case of any other Event of Default, from the date Agent provides written
notice to Borrower of the election of the Default Rate until that Event of
Default is cured or waived, and in each case shall be payable upon demand,
but in any event, shall be payable on the next regularly scheduled payment
date sate forth herein for such Obligation.
(e) Borrower shall have the option to (i) request that any
Revolving Credit Advance be made as a LIBOR Loan, (ii) convert at any time
all or any part of outstanding Loans (other than the Swing Line Loan) from
Index Rate Loans to LIBOR Loans, (iii) convert any LIBOR Loan to an Index
Rate Loan, subject to payment of the LIBOR Breakage Fee in accordance with
Section 1.3(e) if such conversion is made prior to the expiration of the
LIBOR Period applicable thereto, or (iv) continue all or any portion of any
Loan (other than the Swing Line Loan) as a LIBOR Loan upon the expiration of
the applicable LIBOR Period and the succeeding LIBOR Period of that continued
Loan shall commence on the first day after the last day of the LIBOR Period
of the Loan to be continued. Any Loan or group of Loans having the same
proposed LIBOR Period to be made or continued as, or converted into, a LIBOR
Loan must be in a minimum amount of $2,000,000 and integral multiples of
$500,000 in excess of such amount. Any such election must be made by 1:00
p.m. (New York time) on the 3rd Business Day prior to (1) the date of any
proposed Revolving Credit Advance which is to bear interest at the LIBOR
Rate, (2) the end of each LIBOR Period with respect to any LIBOR Loans to be
continued as such, or (3) the date on which Borrower wishes to convert any
Index Rate Loan to a
7
LIBOR Loan for a LIBOR Period designated by Borrower in such election. If no
election is received with respect to a LIBOR Loan by 1:00 p.m. (New York
time) on the 3rd Business Day prior to the end of the LIBOR Period with
respect thereto, that LIBOR Loan shall be converted to an Index Rate Loan at
the end of its LIBOR Period. Borrower must make such election by notice to
Agent in writing, by fax or overnight courier. In the case of any conversion
or continuation, such election must be made pursuant to a written notice (a
"Notice of Conversion/Continuation") in the form of Exhibit 1.2(e). No Loan
shall be made, converted into or continued as a LIBOR Loan, if an Event of
Default has occurred and is continuing and Agent or Requisite Lenders have
determined not to make or continue any Loan as a LIBOR Loan as a result
thereof.
(f) Notwithstanding anything to the contrary set forth in
this Section 1.2, if a court of competent jurisdiction determines in a final
order that the rate of interest payable hereunder exceeds the highest rate of
interest permissible under law (the "Maximum Lawful Rate"), then so long as
the Maximum Lawful Rate would be so exceeded, the rate of interest payable
hereunder shall be equal to the Maximum Lawful Rate; provided, however, that
if at any time thereafter the rate of interest payable hereunder is less than
the Maximum Lawful Rate, Borrower shall continue to pay interest hereunder at
the Maximum Lawful Rate until such time as the total interest received by
Agent, on behalf of Lenders, is equal to the total interest that would have
been received had the interest rate payable hereunder been (but for the
operation of this paragraph) the interest rate payable since the Closing Date
as otherwise provided in this Agreement. Thereafter, interest hereunder shall
be paid at the rate(s) of interest and in the manner provided in Sections
1.2(a) through (e), unless and until the rate of interest again exceeds the
Maximum Lawful Rate, and at that time this paragraph shall again apply. In no
event shall the total interest received by any Lender pursuant to the terms
hereof exceed the amount that such Lender could lawfully have received had
the interest due hereunder been calculated for the full term hereof at the
Maximum Lawful Rate. If the Maximum Lawful Rate is calculated pursuant to
this paragraph, such interest shall be calculated at a daily rate equal to
the Maximum Lawful Rate divided by the number of days in the year in which
such calculation is made. If, notwithstanding the provisions of this Section
1.2(f), a court of competent jurisdiction shall determine by a final,
non-appealable order that a Lender has received interest hereunder in excess
of the Maximum Lawful Rate, Agent shall, to the extent permitted by
Applicable Law, promptly apply such excess as specified in Section 1.5(e) and
thereafter shall refund any excess to Borrower or as such court of competent
jurisdiction may otherwise order.
1.3 Fees.
(a) Fee Letter. Borrower shall pay to GE Capital,
individually, the Fees specified in that certain fee letter dated as of
February 7, 2006 between Borrower and GE Capital (the "GE Capital Fee
Letter"), at the times specified for payment therein.
(b) Unused Line Fee. As additional compensation for the
Revolving Lenders, Borrower shall pay to Agent, for the ratable benefit of
such Revolving Lenders, in arrears, on the last day of each calendar quarter
prior to the Commitment Termination Date and on the Commitment Termination
Date, a fee for Borrower's non use of available funds on the actual daily
amount by which Revolving Loan Commitments exceeds the sum of (i) the
aggregate outstanding principal amount of Revolving Credit Advances, (ii) the
aggregate outstanding principal amount of Swing Line Loans and (iii) the
outstanding amount of the Letter of Credit Obligations for all Letters of
Credit and (the "Unused Commitment Fee") from the date hereof through the
Commitment Termination Date at a rate of (i) in the event that for the
calendar quarter (or portion thereof in the case of the fee payable on the
Commitment Termination Date) ending on the date on which payment of the
Unused Commitment Fee is due, the average daily outstanding amount of
Revolving Loan (including Swing Line Advances) are not more than 50% of the
average daily amount of the Revolving Loan Commitments during such
8
period, 0.50% per annum or (b) in the event that for the calendar quarter (or
portion thereof in the case of the fee payable on the Commitment Date) ending
on the date on which payment of the Unused Commitment Fee is due the average
daily outstanding amount of the Revolving Loan is equal to or more than 50%
of the average daily amount of the Revolving Loan Commitments during such
period, 0.375% per annum.
(c) Omitted.
(d) Letter of Credit Fee. Borrower agrees to pay to Agent
for the benefit of Revolving Lenders, as compensation to such Revolving
Lenders for Letter of Credit Obligations incurred hereunder, (i) all
reasonable costs and expenses incurred by Agent or any Lender on account of
such Letter of Credit Obligations, and (ii) for each calendar quarter during
which any Letter of Credit Obligation shall remain outstanding, a fee (the
"Letter of Credit Fee") in an amount equal to the Applicable L/C Margin per
annum from time to time in effect multiplied by the daily undrawn face amount
of all Letters of Credit issued hereunder. Such fee shall be paid to Agent
for the benefit of the Revolving Lenders in arrears, on the first Business
Day of each calendar quarter and on the Commitment Termination Date. In
addition, Borrower shall pay (i) to any L/C Issuer, within five (5) days
following demand, such fees (including all per annum fees), charges and
expenses of such L/C Issuer in respect of the issuance, negotiation,
acceptance, amendment, transfer and payment of such Letter of Credit or
otherwise payable pursuant to the application and related documentation under
which such Letter of Credit is issued and (ii) to Agent, any bank fees or
charges incurred by Agent to any L/C Issuer.
(e) LIBOR Breakage Fee. Upon (i) any default by Borrower in
making any borrowing of, conversion into or continuation of any LIBOR Loan
following Borrower's delivery to Agent of any LIBOR Loan request in respect
thereof or (ii) any payment of a LIBOR Loan on any day that is not the last
day of the LIBOR Period applicable thereto (regardless of the source of such
prepayment and whether voluntary, by acceleration or otherwise), Borrower
shall pay Agent, for the benefit of all Lenders that funded or were prepared
to fund any such LIBOR Loan, the LIBOR Breakage Fee.
(f) Omitted.
(g) Expenses and Attorneys' Fees. Borrower agrees to
promptly pay all reasonable out-of-pocket fees, charges, costs and expenses
(including reasonable attorneys' fees and expenses of outside counsel, but
excluding the fees and expenses of internal legal staff) incurred by Agent in
connection with any matters contemplated by or arising out of the Loan
Documents, in connection with the examination, review, due diligence
investigation, documentation, negotiation, closing and syndication of the
transactions contemplated herein and in connection with the continued
administration of the Loan Documents including any amendments, modifications,
consents and waivers. Borrower agrees to reimburse Agent for all due and
payable out of pocket costs (including reasonable fees and expenses) as
incurred by Agent to third party appraisers and auditors, and a fee of $800
per audit day per in-house auditor, plus reasonable out-of-pocket expenses
incurred by any such appraisers and auditors. Borrower agrees to promptly pay
all reasonable out-of-pocket fees, charges, costs and expenses (including
fees, charges, costs and expenses of attorneys, auditors (whether internal or
external), appraisers, consultants and advisors) incurred by Agent in
connection with any Event of Default, work-out or action to enforce any Loan
Document or to collect any payments due from Borrower or any other Credit
Party. In addition, in connection with any action to enforce any Loan
Document or to collect any payments due from Borrower or any other Credit
Party, Borrower agrees to promptly pay all out-of-pocket fees, charges, costs
and expenses incurred by Lenders for one (1) counsel acting for all Lenders
other than Agent. All fees, charges, costs and expenses for which
9
Borrower is responsible under this Section 1.3(g) shall be deemed part of the
Obligations when incurred, payable within five (5) Business Days of demand or
in accordance with the final sentence of Section 1.4 and secured by the
Collateral.
1.4 Payments. All payments by Borrower of the Obligations shall be
without deduction, defense, setoff or counterclaim and shall be made in same day
funds and delivered to Agent, for the benefit of Agent and Lenders, as
applicable, by wire transfer to the following account or such other place as
Agent may from time to time designate in writing.
ABA No. 000000000
Account Number 502 328 54
Deutsche Bank Trust Company Americas
Jersey City, New Jersey
ACCOUNT NAME: GECC/CAF DEPOSITORY
Reference: GE Capital re RathGibson, Inc. CFN 6801
Borrower shall receive credit on the day of receipt for funds received by Agent
by 2:00 p.m. (New York time). In the absence of timely receipt, such funds shall
be deemed to have been paid on the next Business Day. Whenever any payment to be
made hereunder shall be stated to be due on a day that is not a Business Day,
the payment may be made on the next succeeding Business Day and such extension
of time shall be included in the computation of the amount of interest and Fees
due hereunder.
Borrower hereby authorize Lenders to make Revolving Credit Advances or
Swing Line Advances, on the basis of their Pro Rata Shares, for the payment of
interest, Fees and expenses, Letter of Credit reimbursement obligations and any
amounts required to be deposited with respect to outstanding Letter of Credit
Obligations pursuant to Sections 1.5(g) or 6.3.
1.5 Prepayments.
(a) Voluntary Prepayments of Loans. At any time, Borrower
may prepay the Loans, in whole or in part, subject to the payment of LIBOR
Breakage Fees, if applicable, and may terminate in whole or reduce in part
the Revolving Loan Commitment, without premium, fees or penalty.
(b) Excess Borrowings. Except as provided in Section
1.1(a)(ii), Borrower shall immediately repay the Revolving Loan to the extent
that the outstanding principal balance of the Revolving Loan exceeds the
lesser of the Borrowing Base and the Maximum Amount. The prepayments shall be
applied in accordance with Section 1.5(e).
(c) Prepayments from Asset Dispositions. Within five (5)
Business Days of receipt of any Net Proceeds of an Asset Disposition in
excess of $250,000 during any Fiscal Year, to the extent not reinvested (or
committed to be reinvested) pursuant to the following sentence, Borrower
shall prepay the Revolving Credit Advances (without a reduction of the
Revolving Loan Commitment, except to the extent that the Net Proceeds of
Asset Dispositions since the Closing Date exceed $10,000,000 in the
aggregate) by an amount equal to the amount of such Net Proceeds. Borrower or
its Subsidiaries may reinvest any Net Proceeds of such Asset Disposition
within two hundred seventy days from the date of receipt thereof (or enter
into binding commitments to reinvest and reinvest such Net Proceeds within
365 days from the receipt of such Net Proceeds), in productive replacement
assets of a kind then used or usable in the business of Borrower, and
Borrower shall not be required to apply such Net Proceeds to repayment of
Revolving Credit Advances pending such reinvestment. If Borrower does not
intend to so reinvest such Net Proceeds or if the 270 day period set forth in
the immediately
10
preceding sentence expires without Borrower having reinvested (or having
entered into binding commitments to reinvest) or if Borrower shall have
entered into binding commitments within such 270 day period and shall not
have reinvested such Net Proceeds within such 365 days period, Borrower shall
prepay the Obligations in an amount equal to such remaining Net Proceeds of
such Asset Disposition. The prepayments shall be applied in accordance with
Section 1.5(e).
(d) Prepayments from Issuance of Securities. Immediately
upon the receipt by Holdings or any of its Subsidiaries of the Net Proceeds
of Equity Issuances by Holdings or any of its Subsidiaries (other than (i)
Net Proceeds from Equity Issuances to members of the management of Holdings
or any of its Subsidiaries or used to repurchase, redeem or prepay Senior
Note in accordance with the Senior Notes Documents and Section 3.18, and (ii)
Net Proceeds from Equity Issuances that are applied to repay any Interim
Financing and interest thereon and fees payable in connection therewith)
Borrower shall prepay the Obligations in an amount equal to such Net
Proceeds. The prepayments shall be applied in accordance with Section 1.5(e).
(e) Application of Proceeds. With respect to any prepayments
made by Borrower pursuant to Sections 1.5(c) and 1.5(d), such prepayments
shall be applied as follows: first, to reduce the outstanding principal
balance of the Swing Line Loan until the same has been repaid in full; and
second, to the Revolving Credit Advances outstanding to that Borrower until
the same has been repaid in full but not (except, in the case of Section
1.5(c) where prepayments are made with the Net Proceeds of Asset
Dispositions, to the extent that the aggregate Net Proceeds from Asset
Dispositions after the Closing Date exceed $10,000,000) as a permanent
reduction of the Revolving Loan Commitment. Any excess of Net Proceeds
referred to in Section 1.5(c) or Section 1.5(d) remaining after such
applications may be applied by Borrower to repay any Interim Financing, and
interest and fees payable in connection therewith or for general corporate
purposes. Considering each type of Loan being prepaid separately, any such
prepayment shall be applied first to Index Rate Loans of the type required to
be prepaid before application to LIBOR Loans of the type required to be
prepaid, in each case in a manner which minimizes any resulting LIBOR
Breakage Fee.
(f) Omitted.
(g) Letter of Credit Obligations. In the event any Letters
of Credit are outstanding at the time that the Revolving Loan Commitment is
terminated, Borrower shall (1) deposit with Agent for the benefit of all
Revolving Lenders cash or, with the approval of Agent in each instance, back
to back letters of credit in form and issued by a Person acceptable to Agent
and L/C Issuer, in each case in an amount equal to 105% of the aggregate
outstanding Letter of Credit Obligations to be available to Agent to
reimburse payments of drafts drawn under such Letters of Credit and pay any
Fees and expenses related thereto and (2) prepay the fee payable under
Section 1.3(d) with respect to such Letters of Credit for the full remaining
terms of such Letters of Credit (assuming no renewal thereof beyond the then
current term). Upon termination of any such Letter of Credit, the unearned
portion of such prepaid fee attributable to such Letter of Credit shall be
refunded to Borrower.
1.6 Maturity. All of the Obligations shall become due and payable as
otherwise set forth herein, but in any event all of the remaining Obligations
(other than Contingent Indemnification Obligations) shall become due and payable
upon termination of this Agreement. Until all Obligations have been fully paid
and satisfied (other than Contingent Indemnification Obligations to the extent
no unsatisfied claim has been asserted), the Revolving Loan Commitment has been
terminated and all Letters of Credit have been terminated or otherwise secured
as provided in Section 1.5(g), Agent shall be entitled to retain the security
interests in the Collateral granted under the Collateral Documents and the
ability to exercise all rights and remedies available to them under the Loan
Documents and Applicable Laws.
11
Notwithstanding anything contained in this Agreement to the contrary, upon any
termination of the Revolving Loan Commitment, all of the Obligations (other than
Contingent Indemnification Obligations) shall be due and payable.
1.7 Eligible Accounts. All of the Accounts owned by each Credit
Party and reflected in the most recent Borrowing Base Certificate delivered by
Borrower to Agent shall be "Eligible Accounts" for purposes of this Agreement,
except any Account to which any of the exclusionary criteria set forth below
applies. Agent shall have the right to establish, modify or eliminate Reserves
against Eligible Accounts from time to time in its reasonable credit judgment
upon not less than five (5) Business Days' prior notice. In addition, Agent
reserves the right, at any time and from time to time after the Closing Date, to
adjust any of the criteria set forth below, to establish new criteria and to
adjust advance rates with respect to Eligible Accounts, in its reasonable credit
judgment upon not less than five (5) Business Days' prior notice, subject to the
approval of Supermajority Revolving Lenders in the case of adjustments, new
criteria or changes in advance rates which have the effect of making more credit
available; provided, that notwithstanding the foregoing, the consent of Agent
shall be sufficient for any such adjustment, adoption of new criteria or change
in advance rates that does not result in the criteria or advance rates being
more favorable to the Borrower than those in effect on the Closing Date.
Eligible Accounts shall not include any Account of any Credit Party:
(a) that does not arise from the sale of goods or the
performance of services by such Credit Party in the ordinary course of its
business;
(b) (i) upon which such Credit Party's right to receive
payment is not absolute or is contingent upon the fulfillment of any
condition whatsoever or (ii) as to which such Credit Party is not able to
bring suit or otherwise enforce its remedies against the Account Debtor
through judicial process, or (iii) if the Account represents a progress
billing consisting of an invoice for goods sold or used or services rendered
pursuant to a contract under which the Account Debtor's obligation to pay
that invoice is subject to such Credit Party's completion of further
performance under such contract or is subject to the equitable lien of a
surety bond issuer;
(c) to the extent of any defense, counterclaim, setoff or
dispute asserted as to such Account;
(d) that is not a true and correct statement of bona fide
obligations incurred in the amount of the Account for merchandise sold to or
services rendered and accepted by the applicable Account Debtor;
(e) with respect to which an invoice, reasonably acceptable
to Agent in form and substance, has not been sent to the applicable Account
Debtor;
(f) that (i) is not owned by such Credit Party or (ii) is
subject to any right, claim, security interest or other interest of any other
Person, other than Liens in favor of Agent, on behalf of itself and Lenders
and Permitted Encumbrances of the types described in clauses (vii) and
(xviii) of the definition of Permitted Encumbrance;
(g) that arises from a sale to any director, officer, other
employee or Affiliate of any Credit Party, or to any entity that has any
common officer or director with any Credit Party; provided that arm's length
sales to Sponsor Portfolio Companies not in excess of $250,000 in the
aggregate at any time outstanding shall not be ineligible under this
paragraph (g);
12
(h) that is the obligation of an Account Debtor that is the
United States government or a political subdivision thereof, or any state,
county or municipality or department, agency or instrumentality thereof
unless Agent, in its sole discretion, has agreed to the contrary in writing
and Borrower, if necessary or desirable, has complied with respect to such
obligation with the Federal Assignment of Claims Act of 1940, or any
applicable state, county or municipal law restricting the assignment thereof
with respect to such obligation;
(i) that is the obligation of an Account Debtor located in
a foreign country other than Canada unless payment thereof is assured by
credit insurance (reasonably satisfactory to Agent as to insurer, amount and
form) or a letter of credit assigned and delivered to Agent (and of which
Agent has "control" under Article 9 of the Code), reasonably satisfactory to
Agent as to form, amount and issuer;
(j) to the extent such Credit Party is liable for goods sold
or services rendered by the applicable Account Debtor to such Credit Party
but only to the extent of the potential offset;
(k) that arises with respect to goods that are delivered on
a xxxx and hold, cash on delivery basis or placed on consignment, guaranteed
sale or other terms by reason of which the payment by the Account Debtor is
or may be conditional;
(l) the Account is not paid within the earlier of: 60 days
following its due date or 90 days following its original invoice date;
(m) the Account Debtor obligated upon such Account suspends
business, makes a general assignment for the benefit of creditors or fails to
pay its debts generally as they come due; or
(n) a petition is filed by or against any Account Debtor
obligated upon such Account under any bankruptcy law or any other federal,
state or foreign (including any provincial) receivership, insolvency relief
or other law or laws for the relief of debtors;
(o) that is the obligation of an Account Debtor if 50% or
more of the Dollar amount of all Accounts owing by that Account Debtor are
ineligible under the criteria set forth in Section 1.7(l);
(p) as to which Agent, on behalf of itself and Lenders, does
not have a first priority perfected Lien;
(q) as to which any of the representations or warranties in
the Loan Documents are untrue;
(r) to the extent such Account is evidenced by a judgment,
Instrument or Chattel Paper;
(s) to the extent that such Account, together with all other
Accounts owing to such Account Debtor and its Affiliates as of any date of
determination exceed 20% of all Eligible Accounts of Credit Parties; or
(t) that is payable in any currency other than Dollars.
13
1.8 Eligible Inventory. All of the Inventory owned by each Credit
Party and reflected in the most recent Borrowing Base Certificate delivered by
Borrower to Agent shall be "Eligible Inventory" for purposes of this Agreement,
except any Inventory to which any of the exclusionary criteria set forth below
applies. Agent shall have the right to establish, modify, or eliminate Reserves
against Eligible Inventory from time to time in its reasonable credit judgment
upon not less than five (5) Business Days' prior notice. In addition, Agent
reserves the right, at any time and from time to time after the Closing Date, to
adjust any of the criteria set forth below, to establish new criteria and to
adjust advance rates with respect to Eligible Inventory in its reasonable credit
judgment upon not less than five (5) Business Days' prior notice, subject to the
approval of Supermajority Revolving Lenders in the case of adjustments, new
criteria or changes in advance rates which have the effect of making more credit
available; provided, that notwithstanding the foregoing, the consent of Agent
shall be sufficient for any such adjustment, adoption of new criteria or change
in advance rates that does not result in the criteria or advance rates being
more favorable to the Borrower than those in effect on the Closing Date.
Eligible Inventory shall not include any Inventory of such Credit Party that:
(a) is not owned by such Credit Party free and clear of all
Liens and rights of any other Person (including the rights of a purchaser
that has made progress payments and the rights of a surety that has issued a
bond to assure such Credit Party's performance with respect to that
Inventory), except the Liens in favor of Agent, on behalf of itself and
Lenders and Permitted Encumbrances of the types described in clauses (viii)
and (xviii) and to the extent (1) waived or subordinated in a manner
acceptable to Agent, (2) Reserves in respect thereof have been imposed by
Agent or (3) approved by Agent without imposition of a Reserve, clause (viii)
of the definition of Permitted Encumbrance;
(b) (i) is not located on premises owned, leased or rented
by such Credit Party and set forth in Disclosure Schedule 5.12 or (ii) is
stored at a leased location unless (x) a reasonably satisfactory landlord
waiver has been delivered to Agent (if requested by the Agent), or (y) if a
landlord waiver has been requested by the Agent and no such landlord waiver
has been obtained, Reserves equal to three months rent (based upon base rent
and such Credit Party's pro rata share of operating costs, utilities and
taxes payable by such Credit Party under the lease, but excluding any
supplemental rent or other costs, expenses or amounts or any indemnities
payable thereunder, upon default or otherwise) (without duplication of any
Reserves for rent established in respect of M&E at such location) reasonably
satisfactory to Agent have been established with respect thereto, (iii) is
stored with a bailee, converter, processor or warehouseman unless either a
reasonably satisfactory, acknowledged bailee letter has been received by
Agent (if requested by the Agent) or Reserves reasonably satisfactory to
Agent have been established with respect thereto, or (iv) is located at an
owned location subject to a mortgage in favor of a lender other than Agent,
unless, if requested by Agent, a reasonably satisfactory mortgagee waiver has
been delivered to Agent, or (v) is located at any site if the aggregate book
value of Inventory at any such location is less than $100,000;
(c) is placed on consignment or similar arrangement, unless
(A) as to each consignee (it being understood that for the purposes of this
paragraph (c), the term consignee shall include any Person to whom such
Credit Party has provided possession of Inventory prior to the consummation
of an irrevocable sale of such Inventory to such Person), such Credit Party
has, at such Credit Party's cost and expense (i) conducted Code, tax lien and
judgment searches against such consignee, (ii) filed UCC-1 financing
statements against each consignee naming such Credit Party as secured party
and Agent as assignee of secured party, (iii) provided to each secured party
of record that has filed a financing statement against such consignee
(whether or not such Inventory is Inventory in the hands of such consignee) a
notice, in form and substance reasonably satisfactory to Agent, pursuant to
Section 9-324 of the Code of such Credit Party's intent to provide purchase
money financing to such consignee and (iv) obtained from such consignee a
letter agreement, in form and substance reasonably satisfactory to Agent, in
which such consignee acknowledges the Lien of Agent and agrees that to the
14
extent that such consignee has not paid the purchase price of any item of
Inventory, Agent can take possession of and remove such item of Inventory
upon an Event of Default and (B) such Credit Party holds a perfected first
priority security interest against such consignee, such security interest
having been assigned of record to Agent;
(d) is in transit, except for Inventory in transit between
locations set forth on Schedule 5.12 as to which Agent's Liens on behalf of
itself and Lenders have been perfected at origin and destination;
(e) is covered by a negotiable document of title, unless
such document has been delivered to Agent with all necessary endorsements,
free and clear of all Liens except those in favor of Agent and Lenders;
(f) is excess, obsolete, unsaleable, shopworn, seconds,
damaged or unfit for sale to the extent in excess of its Scrap Value;
(g) consists of display items or packing or shipping
materials, manufacturing supplies, work in process Inventory (to the extent
in excess of its Scrap Value) or replacement parts;
(h) consists of goods which have been returned as defective
by the buyer to the extent in excess of its Scrap Value;
(i) is not of a type held for sale in the ordinary course of
such Credit Party's business;
(j) is not subject to a first priority perfected Lien in
favor of Agent on behalf of itself and Lenders;
(k) breaches any of the representations or warranties
pertaining to Inventory set forth in the Loan Documents;
(l) consists of any costs associated with "freight in"
charges;
(m) consists of Hazardous Materials or goods that can be
transported or sold only with licenses that are not readily available; or
(n) is not covered by casualty insurance reasonably
acceptable to Agent.
1.8A Eligible M&E. All of the M&E owned by each Credit Party and
reflected in the most recent Borrowing Base Certificate delivered by Borrower to
Agent shall be "Eligible M&E" for purposes of this Agreement, except any M&E to
which any of the exclusionary criteria set forth below applies. Agent shall have
the right to establish, modify or eliminate Reserves against Eligible M&E from
time to time in its reasonable credit judgment upon not less than five (5)
Business Days' prior notice. In addition, Agent reserves the right, at any time
and from time to time after the Closing Date, to adjust any of the criteria set
forth below, to establish new criteria and to adjust advance rates with respect
to Eligible M&E in its reasonable credit judgment upon not less than five (5)
Business Days' prior notice, subject to the approval of Supermajority Revolving
Lenders in the case of adjustments, new criteria or changes in advance rates
which have the effect of making more credit available; provided, that
notwithstanding the foregoing, the consent of Agent shall be sufficient for any
such adjustment, adoption of new criteria or change in advance rates that does
not result in the criteria or advance rates being more favorable to the
15
Borrower than those in effect on the Closing Date. Eligible M&E shall not
include any M&E of any Credit Party that:
(a) is not owned by such Credit Party free and clear of all
Liens, except the Liens in favor of Agent, on behalf of itself and Lenders
and Permitted Encumbrances of the types described in clauses (vii) and
(xviii) and to the extent (1) waived or subordinated in a manner acceptable
to Agent, (2) Reserves in respect thereof have been imposed by Agent or (3)
approved by Agent without imposition of a Reserve, clause (viii) of the
definition of Permitted Encumbrance;
(b) is not located on premises owned, leased or rented by
such Credit Party and set forth in Schedule 5.12;
(c) is located on premises leased or rented by such Credit
Party, (x) unless a reasonably satisfactory landlord's waiver has been
delivered to Agent in accordance herewith, or (y) Reserves equal to three
months' rent (based upon base rent and such Credit Party's pro rata share of
operating costs, utilities and taxes payable by such Credit Party under the
lease, but excluding any supplemental rent or other costs, expenses or
amounts or any indemnities payable thereunder, upon default or otherwise),
without duplication of Reserves for rent established in respect of Inventory
at such location, have been established with respect thereto;
(d) is located at an owned location subject to a mortgage in
favor of a Person other than Agent, unless a reasonably satisfactory
mortgagee waiver has been delivered to Agent;
(e) is located at any site if the aggregate book value of
M&E, of such Credit Party, at any such location is less than $100,000;
(f) that is covered by a certificate of title unless the
interest of Agent has been noted on such certificate of title, free and clear
of all Liens except those in favor of Agent and Lenders and Permitted
Encumbrances of the types described in clauses (vii) and (xviii) and to the
extent (1) waived or subordinated in a manner acceptable to Agent, (2)
Reserves in respect thereof have been imposed by Agent or (3) approved by
Agent without imposition of a Reserve, clause (viii) of the definition of
Permitted Encumbrance;
(g) is obsolete;
(h) is not subject to a first priority perfected Lien in
favor of Agent on behalf of itself and Lenders;
(i) breaches any of the representations or warranties
pertaining to M&E or Equipment set forth in the Loan Documents;
(j) consists of Hazardous Materials or goods that can be
transported or sold only with licenses that are not readily available; or
(k) is not covered by casualty insurance reasonably
acceptable to Agent.
1.8B Eligible Real Estate. All of the Real Estate owned by each
Credit Party and reflected in the most recent Borrowing Base Certificate
delivered by Borrower to Agent shall be "Eligible Real Estate" for purposes of
this Agreement, except any Real Estate to which any of the exclusionary criteria
set forth below applies. Agent shall have the right to establish, modify or
eliminate Reserves against Eligible Real Estate from time to time in its
reasonable credit judgment upon not less than five (5)
16
Business Days' prior notice. In addition, Agent reserves the right, at any time
and from time to time after the Closing Date, to adjust any of the criteria set
forth below, to establish new criteria and to adjust advance rates with respect
to Eligible Real Estate in its reasonable credit judgment upon not less than
five (5) Business Days' prior notice, subject to the approval of Supermajority
Revolving Lenders in the case of adjustments, new criteria or changes in advance
rates which have the effect of making more credit available; provided, that
notwithstanding the foregoing, the consent of Agent shall be sufficient for any
such adjustment, adoption of new criteria or change in advance rates that does
not result in the criteria or advance rates being more favorable to the Borrower
than those in effect on the Closing Date. Eligible Real Estate shall not include
any Real Estate of any Credit Party that:
(a) is not owned in fee by such Credit Party free and clear
of all Liens and rights of any other Person, except the Liens in favor of
Agent, on behalf of itself and Lenders and Permitted Encumbrances of the
types described in clauses (vi), (vii), (ix), (xi), (xv) and (xviii) and to
the extent (1) waived or subordinated in a manner acceptable to Agent, (2)
Reserves in respect thereof have been imposed by Agent or (3) approved by
Agent without imposition of a Reserve, clause (viii) of the definition of
Permitted Encumbrance;
(b) as to which Agent has not received a loan policy of
title insurance in favor of Agent and in form and amount, and issued by a
title insurance company, reasonably satisfactory to Agent, in its reasonable
credit judgment, together with such endorsements thereto as Agent shall
require, in its reasonable credit judgment (provided such endorsements are
available in the jurisdiction where such Real Estate is located);
(c) as to which Agent has not received an environmental
report reasonably satisfactory to Agent;
(d) is not subject to a first priority perfected Lien in
favor of Agent on behalf of itself and Lenders;
(e) breaches any of the representations or warranties
pertaining to Real Estate set forth in the Loan Documents; or
(f) is not covered by casualty insurance that is reasonably
acceptable to Agent.
1.9 Loan Accounts. Agent shall maintain a loan account (the "Loan
Account") on its books to record: all Advances, all payments made by Borrower,
and all other debits and credits as provided in this Agreement with respect to
the Loans or any other Obligations. All entries in the Loan Account shall be
made in accordance with Agent's customary accounting practices as in effect from
time to time. The balance in the Loan Account, as recorded on Agent's most
recent printout or other written statement, shall, absent manifest error, be
presumptive evidence of the amounts due and owing to Agent and Lenders by
Borrower; provided that any failure to so record or any error in so recording
shall not limit or otherwise affect Borrower's duty to pay the Obligations.
Agent shall render to Borrower a monthly accounting of transactions with respect
to the Loans setting forth the balance of the Loan Account as to Borrower for
the immediately preceding month. Unless Borrower notifies Agent in writing of
any objection to any such accounting (specifically describing the basis for such
objection), within thirty (30) days after the date thereof, each and every such
accounting shall, absent manifest error, be deemed final, binding and conclusive
on Borrower in all respects as to all matters reflected therein. Only those
items expressly objected to in such notice shall be deemed to be disputed by
Borrower. Notwithstanding any provision herein contained to the contrary, any
Lender may elect (which election may be revoked) to dispense with the issuance
of Notes to that Lender and may rely on the Loan Account as evidence of the
amount of Obligations from time to time owing to it.
17
1.10 Yield Protection; Illegality.
(a) Capital Adequacy and Other Adjustments. In the event
that any Lender shall have determined in good faith that the adoption after
the date hereof of any law, treaty, governmental (or quasi-governmental)
rule, regulation, guideline or order regarding capital adequacy, reserve
requirements or similar requirements or compliance by any Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy or similar requirements (whether or not having the force of
law and whether or not failure to comply therewith would be unlawful) from
any central bank or governmental agency or body having jurisdiction does or
shall have the effect of increasing the amount of capital or other funds
required to be maintained by such Lender or any corporation controlling such
Lender and thereby reducing the rate of return on such Lender's or such
corporation's capital as a consequence of its obligations hereunder, then
Borrower shall from time to time within fifteen (15) days after notice and
demand from such Lender (together with the certificate referred to in the
next sentence and with a copy to Agent) pay to Agent, for the account of such
Lender, additional amounts sufficient to compensate such Lender for such
reduction. A certificate as to the amount of such cost and showing the basis
of the computation of such cost submitted by such Lender to Borrower and
Agent shall, absent manifest error, be presumptive evidence for all purposes.
(b) Increased LIBOR Funding Costs; Illegality.
Notwithstanding anything to the contrary contained herein, if, after the date
hereof, the introduction of or any change in any law, rule, regulation,
treaty or directive (or any change in the interpretation thereof) shall make
it unlawful, or any central bank or other Governmental Authority shall assert
that it is unlawful, for any Lender to agree to make or to make or to
continue to fund or maintain any LIBOR Loan, then, unless that Lender is able
to make or to continue to fund or to maintain such LIBOR Loan at another
branch or office of that Lender without, in that Lender's opinion, adversely
affecting it or its Loans or the income obtained therefrom, on notice thereof
and demand therefor by such Lender to Borrower through Agent, (i) the
obligation of such Lender to agree to make or to continue to fund or maintain
LIBOR Loans shall terminate and (ii) Borrower shall forthwith prepay in full
all outstanding LIBOR Loans owing by Borrower to such Lender, together with
interest accrued thereon, unless Borrower, within five (5) Business Days
after the delivery of such notice and demand, converts all LIBOR Loans into
Index Rate Loans; provided that no such conversion shall be required as to
any LIBOR Loan prior to the end of its then LIBOR Period to the extent it is
not illegal for such Lender to maintain such LIBOR Loan until such time. If,
after the date hereof, the introduction of, change in or interpretation of
any law, rule, regulation, treaty or directive would impose or increase
reserve requirements (other than as taken into account in the definition of
LIBOR Rate) or otherwise increase the cost to any Lender of making or
maintaining a LIBOR Loan, then Borrower shall from time to time within
fifteen (15) days after notice and demand from Agent to Borrower (together
with the certificate referred to in the next sentence) pay to Agent, for the
account of all such affected Lenders, additional amounts sufficient to
compensate such Lenders for such increased cost. A certificate as to the
amount of such cost and showing the basis of the computation of such cost
submitted by Agent on behalf of all such affected Lenders to Borrower shall,
absent manifest error, be presumptive evidence for all purposes.
1.11 Taxes.
(a) No Deductions. Except as otherwise provided in this
Section 1.11, any and all payments or reimbursements made hereunder or under any
other Loan Document shall be made free and clear of and without deduction for
any and all present or future, taxes, levies, imposts, deductions or
withholdings, and all liabilities with respect thereto (including any interest,
additions to tax or penalties applicable thereto) of any nature whatsoever
imposed by any Governmental Authority ("Taxes"), excluding (a) such Taxes to the
extent imposed on or measured by Agent's or a Lender's net income or capital
(and franchise taxes, branch profits taxes, taxes on doing business or other
taxes imposed in lieu
18
thereof) as a result of a connection between such Agent or Lender and the
jurisdiction of the Governmental Authority imposing such Tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising from such Agent or Lender having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or any other Loan Document), (b) any U.S. federal withholding tax that
is imposed on amounts payable to a Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement, except to the extent that such Foreign
Lender's assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to this Section 1.11(a), (c) any U.S. federal withholding tax that
would not have been imposed but for such Foreign Lender's failure (other than as
a result of a change in law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental
Authority) to comply with Section 1.11(d), or (d) any U.S. federal withholding
tax that would not have been imposed but for a change by such Foreign Lender in
the jurisdiction of its applicable lending office (other than a change in
lending office made at the request of the Borrower) (collectively, "Excluded
Taxes," and all such non-Excluded Taxes being referred to herein as
"Non-Excluded Taxes").
(b) Additional Payments. If Borrower shall be required by
law to deduct any Taxes from or in respect of any sum payable hereunder or under
any other Loan Document to any Lender or Agent, then (i) in the case of
Non-Excluded Taxes, the sum payable hereunder shall be increased as may be
necessary so that, after making all required deductions (including deductions
applicable to additional sums payable pursuant to this Section 1.11), such
Lender or Agent receives, on an after-Tax basis, an amount equal to the sum it
would have received had no such deductions been made; and (ii) all required
deductions shall be withheld and timely paid over to the relevant Governmental
Authority in accordance with Applicable Law.
(c) Other Taxes. In addition, Borrower agrees to timely pay
to the relevant Governmental Authority in accordance with Applicable Law any
present or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies which arise from any payment made hereunder or
under any other Loan Document or from the execution, delivery, enforcement or
registration of, or otherwise with respect to, this Agreement or any other Loan
Document ("Other Taxes").
(d) Tax Forms.
(i) Prior to becoming a Lender under this Agreement
and within fifteen (15) days after a reasonable written request of Borrower or
Agent from time to time thereafter, each such Person or Lender that is not in
each case a "United States person" (as such term is defined in IRC Section
7701(a)(30)) for U.S. federal income tax purposes (a "Foreign Lender") shall
provide to Borrower and Agent, if it is legally entitled to, two properly
completed and executed IRS Forms W-8BEN or Forms W-8ECI or other applicable
forms, certificates or documents prescribed by the IRS, certifying as to such
Foreign Lender's entitlement to an exemption from, or reduction in, U.S.
withholding tax with respect to payments to be made to such Foreign Lender under
this Agreement and under the Notes.
(ii) Prior to becoming a Lender under this Agreement
and within fifteen (15) days after a reasonable written request of Borrower or
Agent from time to time thereafter, each such Person or Lender that is in each
case a "United States person" (as such term is defined in IRC Section
7701(a)(30)) for U.S. federal income tax purposes provide to Borrower and Agent,
if it is legally entitled to, two properly completed and executed IRS Forms W-9,
certifying as to such Lender's entitlement to an exemption from U.S. backup
withholding tax, or any successor form.
(e) Indemnification. Borrower will indemnify each Lender and
Agent for the full amount of Non-Excluded Taxes and Other Taxes (including any
Non-Excluded Taxes and Other Taxes
19
imposed by any jurisdiction on amounts payable under this Section 1.11) paid by
such Lender or Agent, as the case may be, and any liability (including
penalties, interest and expenses, including reasonable attorney's fees and
expenses) arising therefrom or with respect thereto, whether or not such
Non-Excluded Taxes or Other Taxes were correctly or legally asserted by the
relevant Governmental Authority. A certificate as to the amount of such payments
or liabilities submitted by Lender or Agent to Borrower (with a copy to Agent if
applicable) shall be presumptive evidence of the amount due. Borrower shall pay
Agent or such Lender, as the case may be, the amount shown as due on any such
certificate within ten (10) days after the receipt thereof.
(f) Evidence of Payments. As soon as practicable after any
payment of Taxes or Other Taxes by the Borrower to a Governmental Authority, the
Borrower shall deliver to the Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Agent.
SECTION 2.
AFFIRMATIVE COVENANTS
Each Credit Party executing this Agreement jointly and severally agrees
as to all Credit Parties that from and after the date hereof and until the
Termination Date:
2.1 Compliance with Laws and Contractual Obligations. Each Credit
Party will (a) comply with and shall cause each of its Subsidiaries to comply
with (i) the requirements of all Applicable Laws, rules, regulations and orders
of any Governmental Authority (including, without limitation, laws, rules,
regulations and orders relating to taxes, employer and employee contributions,
securities, employee retirement and welfare benefits, environmental protection
matters and employee health and safety) as now in effect and which may be
imposed in the future in all jurisdictions in which any Credit Party or any of
its Subsidiaries is now doing business or may hereafter be doing business and
(ii) the obligations, covenants and conditions contained in all Contractual
Obligations of such Credit Party or any of its Subsidiaries other than those
laws, rules, regulations, orders and provisions of such Contractual Obligations
the noncompliance with which could not be reasonably expected to have, either
individually or in the aggregate, a Material Adverse Effect, and (b) maintain or
obtain and shall cause each of its Subsidiaries to maintain or obtain all
licenses, qualifications and permits now held or hereafter required to be held
by such Credit Party or any of its Subsidiaries, for which the loss, suspension,
revocation or failure to obtain or renew, could reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect. This Section
2.1 shall not preclude any Credit Party or its Subsidiaries from contesting any
taxes or other payments, if they are being diligently contested in good faith in
a manner which stays enforcement thereof and if appropriate expense provisions
have been recorded in conformity with GAAP, subject to Section 3.2.
2.2 Insurance; Damage to or Destruction of Collateral.
(a) The Credit Parties shall, at their sole cost and
expense, maintain and provide Agent with policies or binders for property,
casualty, liability, business interruption and other insurance described on
Schedule 5.18 as in effect on the date hereof or otherwise as in effect on
the date hereof or in form and amounts and with insurers customary for their
industry or otherwise reasonably acceptable to Agent. Such policies of
insurance (or the loss payable, assignment, mortgage and additional insured,
as appropriate, endorsements delivered to Agent) shall contain provisions
pursuant to which the insurer agrees to provide 30 days prior written notice
to Agent in the event of any non-renewal, cancellation or amendment of any
such insurance policy. If any Credit Party at any time or times hereafter
shall fail to obtain or maintain any of the policies of insurance required
above or to pay all premiums relating
20
thereto, Agent may at any time or times thereafter obtain and maintain such
policies of insurance and pay such premiums and take any other action with
respect thereto that Agent deems advisable and Agent will use reasonable
efforts to provide prior written notice to the applicable Credit Party of any
such action. Agent shall have no obligation to obtain insurance for any
Credit Party or pay any premiums therefor. By doing so, Agent shall not be
deemed to have waived any Default or Event of Default arising from any Credit
Party's failure to maintain such insurance or pay any premiums therefor. All
sums so disbursed, including reasonable attorneys' fees, court costs and
other charges related thereto, shall be payable on demand by Borrower to
Agent and shall be additional Obligations hereunder secured by the
Collateral.
(b) Agent reserves the right at any time upon any materially
adverse change in any Credit Party's risk profile (including any materially
adverse change in the product mix maintained by any Credit Party or any laws
affecting the potential liability of such Credit Party) to require additional
forms and limits of insurance to, in Agent's reasonable opinion, adequately
protect both Agent's and Lenders' interests in all or any portion of the
Collateral and to ensure that each Credit Party is protected by insurance in
amounts and with coverage customary for its industry. If reasonably requested
by Agent, each Credit Party shall deliver to Agent from time to time a report
of a reputable insurance broker, reasonably satisfactory to Agent, with
respect to its insurance policies.
(c) On or prior to the date that is thirty (30) days
following the Closing Date, each Credit Party shall deliver to Agent, in form
and substance reasonably satisfactory to Agent, (i) endorsements to "All
Risk" insurance naming Agent, on behalf of itself and Lenders and (ii)
endorsements to all general liability and other liability policies naming
Agent, on behalf of itself and Lenders, as additional insured. Each Credit
Party irrevocably makes, constitutes and appoints Agent (and all officers,
employees or agents designated by Agent), so long as any Event of Default has
occurred and is continuing or the anticipated insurance proceeds exceed
$5,000,000, as each Credit Party's true and lawful agent and attorney in fact
for the purpose of making, settling and adjusting claims under such "All
Risk" policies of insurance, endorsing the name of each Credit Party on any
check or other item of payment for the proceeds of such "All Risk" policies
of insurance and for making all determinations and decisions with respect to
such "All Risk" policies of insurance. Agent shall have no duty to exercise
any rights or powers granted to it pursuant to the foregoing
power-of-attorney. Borrower shall promptly notify Agent of any loss, damage,
or destruction to the Collateral in the amount of $750,000 or more, whether
or not covered by insurance. Net Proceeds of casualty insurance shall be used
to prepay obligations or for reinvestment as provided in Section 1.5(c).
2.3 Inspection; Lender Xxxxxxx.Xx more than three (3) times per
Fiscal Year, each Credit Party shall permit any authorized representatives of
Agent to visit, audit and inspect any of the properties of such Credit Party and
its Subsidiaries, including its and their financial and accounting records, and
to make copies and take extracts therefrom, and to discuss its and their
affairs, finances and business with its and their officers and certified public
accountants, at such reasonable times during normal business hours and as often
as may be reasonably requested. Representatives of each Lender will be permitted
to accompany representatives of Agent during each visit, inspection and
discussion referred to in the immediately preceding sentence as often as may be
reasonably requested so as not to materially interfere with the normal business
operations of the Borrower; provided, that while an Event of Default is
continuing the three times per Fiscal Year limit shall not apply. Without in any
way limiting the foregoing, each Credit Party will participate and will cause
key management personnel of each Credit Party and its Subsidiaries to
participate in a meeting with Agent and Lenders at least once during each year,
which meeting shall be held at such time and such place as may be reasonably
requested by Agent.
2.4 Organizational Existence. Except as otherwise permitted by
Section 3.6, each Credit Party will and will cause its Subsidiaries to at all
times preserve and keep in full force and effect its
21
organizational existence and, except as would not reasonably be expected to
result in a Material Adverse Effect, all rights and franchises material to its
business.
2.5 Environmental Matters. Each Credit Party shall and shall cause
each Person within its control to: (a) conduct its operations and keep and
maintain its Real Estate in compliance with all Environmental Laws and
Environmental Permits other than noncompliance that could not reasonably be
expected to have a Material Adverse Effect; (b) implement any and all
investigation, remediation, removal and response actions that are appropriate or
necessary to maintain the value and marketability of the Real Estate which are
required by Environmental Laws and Environmental Permits pertaining to the
presence, generation, treatment, storage, use, disposal, transportation or
Release of any Hazardous Material on, at, in, under, above, to, from or about
any of its Real Estate; (c) notify Agent promptly after such Credit Party
becomes aware of any violation of Environmental Laws or Environmental Permits or
any Release on, at, in, under, above, to, from or about any Real Estate that is
reasonably likely to result in Environmental Liabilities to a Credit Party or
its Subsidiaries in excess of $250,000; and (d) promptly forward to Agent a copy
of any written order, notice, request for information or any communication or
report received by such Credit Party in connection with any such violation or
Release or any other matter relating to any Environmental Laws or Environmental
Permits that could reasonably be expected to result in Environmental Liabilities
in excess of $300,000, in each case whether or not the Environmental Protection
Agency or any Governmental Authority has taken or threatened any action in
writing in connection with any such violation, Release or other matter. If Agent
at any time while an Event of Default is continuing has a reasonable basis to
believe that there may be a violation of any Environmental Laws or Environmental
Permits by any Credit Party or any Person under its control or any Environmental
Liability arising thereunder, or a Release of Hazardous Materials on, at, in,
under, above, to, from or about any of its Real Estate, that, in each case,
could reasonably be expected to have a Material Adverse Effect, then each Credit
Party and its Subsidiaries shall, upon Agent's written request (i) cause the
performance of such environmental audits including subsurface sampling of soil
and groundwater, and preparation of such environmental reports, at Borrower's
expense, as Agent may from time to time reasonably request, but no more than one
time per year, with respect to such violation, Environmental Liability or
Release, which shall be conducted by reputable environmental consulting firms
reasonably acceptable to Agent and shall be in form and substance reasonably
acceptable to Agent, and (ii) permit Agent or its representatives to have access
to all Real Estate for the purpose of conducting such environmental audits and
testing as Agent deems appropriate, including subsurface sampling of soil and
groundwater. Borrower shall reimburse Agent for the costs of such audits and
tests and the same will constitute a part of the Obligations secured hereunder.
2.6 Landlords' Agreements, Mortgagee Agreements, Bailee Letters and
Real Estate Purchases. Each Credit Party shall notify Agent promptly upon
becoming a party to any lease for real property or warehouse space or any
arrangement whereby Inventory shall be shipped to a processor or converter after
the Closing Date, and upon request of the Agent, such Credit Party shall use
commercially reasonable efforts to obtain a landlord's agreement, mortgagee
agreement or bailee letter, as applicable, from the lessor of each leased
property, mortgagee of owned property or bailee with respect to any warehouse,
processor or converter facility or other location where Collateral is stored or
located, which agreement or letter shall contain a waiver or subordination of
all Liens or claims that the landlord, mortgagee or bailee may assert against
the Collateral at that location, and shall otherwise be reasonably satisfactory
in form and substance to Agent. Each Credit Party shall timely and fully pay and
perform in all material respects their obligations under all leases and other
agreements with respect to each leased location or public warehouse where any
Collateral is or may be located.
2.7 Conduct of Business. Except as could not reasonably be expected
to have a Material Adverse Effect, each Credit Party shall at all times
maintain, preserve and protect all of its assets and properties used or useful
in the conduct of its business, and keep the same in good repair, working order
22
and condition in all material respects (taking into consideration ordinary wear
and tear and loss from casualty or condemnation) and from time to time make, or
cause to be made, all necessary or appropriate repairs, replacements and
improvements thereto consistent with industry practices; and transact business
only in such corporate and trade names as are set forth in Schedule 2.7.
2.8 Further Assurances.
(a) Each Credit Party shall, from time to time, execute such
guaranties, financing statements, documents, security agreements and reports
as Agent or Requisite Lenders at any time may reasonably request to evidence,
perfect or otherwise implement the guaranties and security for repayment of
the Obligations contemplated by the Loan Documents.
(b) In the event that after the Closing Date any Credit
Party acquires directly or by means of a Permitted Acquisition (i) a fee
interest in real property having a fair market value in excess of $1,000,000
(unless such real property is acquired with the proceeds of Indebtedness
permitted under Section 3.1(b)(v)) or (ii) a leasehold interest in real
property upon which is located (or such Credit Party intends to locate) a
manufacturing facility, such Credit Party shall deliver to Agent a fully
executed mortgage or deed of trust over such real property in form and
substance reasonably satisfactory to Agent, together with such title
insurance policies, surveys, appraisals, evidence of insurance, legal
opinions, environmental assessments (which in any event shall disclose no
potential Environmental Liability in excess of $1,000,000 with respect to
such real property) and other documents and certificates as shall be
reasonably required by Agent.
(c) Each Credit Party shall (i) cause each Person, upon its
becoming a Domestic Subsidiary of such Credit Party (provided that this shall
not be construed to constitute consent by any of the Lenders to any
transaction referred to above which is not expressly permitted by the terms
of this Agreement), promptly to become a party to this Agreement, to guaranty
the Obligations and to grant to Agent, for the benefit of Agent and Lenders,
a security interest in the real, personal and mixed property of such Person
to secure the Obligations, (ii) pledge, or cause to be pledged, to Agent, for
the benefit of Agent and Lenders, all, or in the case of a Foreign Subsidiary
directly owned by Holdings or a Domestic Subsidiary thereof, 65%, of the
Stock of such Subsidiary to secure the Obligations and (iii) not issue any
additional Stock unless concurrently therewith (A) the Person obtaining
ownership of any such additional Stock pledges to Agent all of such
additional Stock and becomes a party to the Pledge Agreement by executing a
counterpart of the Pledge Agreement and delivering such counterpart to Agent
or (B) if the Person obtaining ownership of any such additional Stock is a
pledgor under the Pledge Agreement, such pledgor pledges all such additional
Stock to Agent in accordance with the provisions of Section 6(d) of the
Pledge Agreement. The documentation for such guaranty, security and pledge
shall be substantially similar to the Loan Documents executed concurrently
herewith with such modifications as are reasonably requested by Agent.
(d) With respect to each Person holding any Credit Party's
Inventory on consignment or under purchase money financing or similar
arrangements in an amount in excess of $250,000, Borrower will, at the
request of Agent, and at such Credit Party's cost and expense (i) conduct
Code, tax lien and judgment searches against all Persons who hold Borrower's
Inventory on consignment or under purchase money financing or similar
arrangements, (ii) file UCC-1 financing statements against each such Person
naming Borrower as secured party and Agent as assignee of secured party,
(iii) provide to each secured party of record that has filed a financing
statement against each such Person covering such Inventory (whether or not
such Inventory is Inventory in the hands of such Person) a notice, in form
and substance reasonably satisfactory to Agent, pursuant to Section 9-324 of
the Code of such Credit Party's intent to provide purchase money financing to
such Person and (iv) use reasonable efforts to obtain from such Person a
letter agreement, in form and substance
23
reasonably satisfactory to Agent, in which such Person acknowledges the Lien
of Agent and agrees that to the extent that such Person has not paid the
purchase price of such Inventory, Agent can take possession of and remove
such Inventory upon an Event of Default. Each Credit Party shall, promptly
following entry into any consignment or under purchase money financing or
similar arrangement after the Closing Date, provide notice thereof to Agent,
together with copies of all documents evidencing or governing such
arrangement and sufficient details regarding the consignee such that Code,
tax lien and judgment searches can be conducted.
(e) On or prior to the date that is forty-five (45) days
following the Closing Date, Borrower shall deliver to Agent (i) a
Subordination, Nondisturbance and Attornment Agreement with respect to the
North Branch, New Jersey property, duly executed by the Borrower and Wachovia
Bank, National Association and in form and substance satisfactory to Agent;
(ii) a Leasehold Mortgage with respect to the North Branch, New Jersey
property, in form and substance satisfactory to Agent and duly executed by
the Borrower and recorded with the Somerset County Recorder.
(f) On or prior to the date that is five (5) days following
the Closing Date, Borrower shall deliver to Agent certificates from the
appropriate Governmental Authorities of the State of New Jersey and the State
of Wisconsin indicating that Borrower is qualified in such states as a
foreign corporation.
2.9 Omitted.
2.10 Cash Management Systems. Borrower shall, and shall cause each
other Credit Party to, enter into Control Agreements with respect to each
deposit account maintained by Borrower or such Credit Party (other than any
payroll account or controlled disbursement account so long as such account is a
zero balance account) as of or after the Closing Date. Each such Control
Agreement shall be in form and substance reasonably satisfactory to Agent. The
Borrower and each other Credit Party shall enter into and maintain with one or
more banks and pursuant to agreements in form and substance reasonably
satisfactory to Agent, lockbox arrangements, it being understood that unless an
Event of Default shall be continuing and notice has been given by Agent in
accordance with the applicable Control Agreement, amounts credited to any
deposit account will not be transferred on a daily basis to the Agent's account
and shall be available to Borrower and each such Credit Party.
2.11 Consents. Holdings shall concurrently upon the issuance of any
Stock of Holdings to a Person who does not hold Stock in Holdings as of the
Closing Date, deliver to the Agent an agreement, in form and substance
reasonably satisfactory to the Agent, from such Person, pursuant to which such
Person, as a Stockholder of Holdings, consents to the Related Transactions and
the Related Transactions Documents.
2.12 Supplemental Disclosure. From time to time as may be requested
by Agent (which request will not be made more frequently than once each year
absent the occurrence and continuance of a Default or an Event of Default) and
from time to time with the approval of Agent (such approval not to be
unreasonably withheld, provided that no such supplement shall be permitted for
Schedules 3.2 through Schedule 3.8, inclusive), the Credit Parties shall
supplement each Disclosure Schedule hereto, or any representation herein or in
any other Loan Document, with respect to any matter hereafter arising which, if
existing or occurring at the date of this Agreement, would have been required to
be set forth or described in such Disclosure Schedule or as an exception to such
representation or which is necessary to correct any information in such
Disclosure Schedule or representation which has been rendered inaccurate thereby
(and, in the case of any supplements to any Disclosure Schedule, such Disclosure
Schedule shall be appropriately marked to show the changes made therein);
provided that (a) no such supplement to any such Disclosure Schedule or
representation shall be or be deemed a waiver of any Default or Event of
24
Default resulting from the matters disclosed therein, except as consented to by
Agent and Requisite Lenders in writing; and (b) no supplement shall be required
as to representations and warranties that relate solely to the Closing Date.
SECTION 3.
NEGATIVE COVENANTS
Each Credit Party executing this Agreement jointly and severally agrees
as to all Credit Parties that from and after the date hereof until the
Termination Date:
3.1 Indebtedness.
(a) The Credit Parties shall not and shall not cause or
permit their Subsidiaries directly or indirectly, to create, incur, issue,
assume, guarantee or otherwise become or, solely with respect to Indebtedness
incurred, issued, assumed or guaranteed in reliance on Section 3.1(b), remain
directly or indirectly liable, contingently or otherwise, with respect to any
Indebtedness (including Acquired Debt), and Holdings will not issue any
Disqualified Stock and will not permit any of its Subsidiaries to issue any
shares of preferred stock; provided, however, that Holdings may incur
Indebtedness (including Acquired Debt) or issue Disqualified Stock and its
Subsidiaries may incur Indebtedness (including Acquired Debt) or issue
preferred stock, if the Interest Coverage Ratio for Borrower's most recently
ended four full Fiscal Quarters for which internal financial statements are
available immediately preceding the date on which such additional
Indebtedness is incurred or such Disqualified Stock or such preferred stock
is issued, as the case may be, would have been at least 2.25 to 1.0,
determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if the additional Indebtedness had been incurred or
the Disqualified Stock or the preferred stock had been issued, as the case
may be, at the beginning of such four-quarter period;
(b) Notwithstanding the foregoing, Section 3.1(a) shall not
prohibit the incurrence, issuance, guarantee, or other becoming or remaining
liable, contingently or otherwise:
(i) by Borrower (and the Guaranty thereof by any
Guarantor) with respect to the Obligations;
(ii) by Borrower and its Subsidiaries with respect to
existing Indebtedness listed on Schedule 3.1;
(iii) by Borrower and its Subsidiaries with respect to
Indebtedness represented by the Senior Notes, not in excess of $200,000,000 in
aggregate principal amount less repayments of principal thereof and repurchases
and redemptions thereof;
(iv) by Borrower or any of its Subsidiaries with
respect to Attributable Debt in connection with a sale and leaseback of the
facility located in Janesville, Wisconsin and owned by Borrower on the date
hereof, in an aggregate principal amount for all Attributable Debt, including
all Permitted Refinancing Indebtedness incurred to renew, refund, refinance,
replace, defease or discharge any Attributable Debt incurred pursuant to this
clause (iv), not to exceed $5,000,000 at any time outstanding;
(v) by Borrower or any of its Subsidiaries with
respect to Indebtedness represented by Capital Lease Obligations, mortgage
financings or purchase money obligations, in each case, incurred for the purpose
of financing all or any part of the purchase price or cost of design,
development, construction, installation or improvement of property, plant or
equipment used in the
25
business of Borrower or any of its Subsidiaries (whether through the direct
acquisition or otherwise of such Equity Interests of any Person owning such
assets), in an aggregate principal amount for all such Indebtedness, including
all Permitted Refinancing Indebtedness incurred to renew, refund, refinance,
replace, defease or discharge any Indebtedness incurred pursuant to this clause
(v), not to exceed $5,000,000 at any time outstanding;
(vi) by Holdings or any of its Subsidiaries with
respect to Permitted Refinancing Indebtedness in exchange for, or the net
proceeds of which are used to renew, refund, refinance, replace, defease or
discharge any Indebtedness (other than intercompany Indebtedness) that was
permitted by this Agreement to be incurred under Section 3.1(a) or clauses (ii),
(iii), (iv), (v), (vi), (xii), (xv) or (xviii) of this Section 3.1(b);
(vii) by Holdings or any of its Subsidiaries with
respect to intercompany Indebtedness between or among Holdings and any of its
Subsidiaries; provided, however, that:
(a) if Borrower or any Guarantor is the
obligor on such Indebtedness and the payee is not Borrower or a
Guarantor, such Indebtedness must be expressly subordinated to the prior
payment in full in cash of all Obligations;
(b) any subsequent issuance or transfer of
Equity Interests that results in any such Indebtedness being held by a
Person other than Holdings or a Subsidiary and (ii) any sale or other
transfer of any such Indebtedness (other than solely as a result of the
creation of a Permitted Encumbrance upon such intercompany Indebtedness)
to a Person that is not either Holdings or a Subsidiary will be deemed,
in each case, to constitute an incurrence of such Indebtedness by
Holdings or such Subsidiary, as the case may be, that was not permitted
by this clause (vii);
(c) at the time that such intercompany
Indebtedness is incurred and after giving effect thereto, the obligor
and the obligee of such intercompany Indebtedness shall be Solvent, in
each case, on a consolidated basis;
(d) omitted;
(e) any intercompany Indebtedness made by
Credit Parties to Subsidiaries of Holdings that are not Credit Parties
shall not, together with Permitted Investments described in clause
(i)(y) of the definition of such term, Permitted Acquisitions of the
type described in Section 3.6(ii)(G) and the outstanding guarantees by
Credit Parties of Indebtedness or other obligations of Subsidiaries of
Holdings that are not Credit Parties under Section 3.1(b)(x), exceed
$5,000,000 in the aggregate at any time outstanding; and
(f) (1) Borrower shall have executed and
delivered to each such other Credit Party, and each such other Credit
Party shall have executed and delivered to Borrower, on the Closing Date
or on the later of the date of first advance of such intercompany loan
or advance, a demand note (collectively, the "Intercompany Notes") to
evidence any such intercompany Indebtedness owing at any time by
Borrower to such other Credit Party or by such other Credit Party to
Borrower, which Intercompany Notes shall be in form and substance
reasonably satisfactory to Agent and shall be pledged and delivered to
Agent pursuant to the applicable Pledge Agreement or Security Agreement
as additional collateral security for the Obligations; (2) Borrower
shall record all intercompany transactions on its books and records in a
manner reasonably satisfactory to Agent; and (3) the obligations of each
Credit Party under any such Intercompany Notes shall be subordinated to
the Obligations of such Credit Party hereunder pursuant to Section 9.21
or otherwise in a manner reasonably satisfactory to Agent;
(viii) by any of Borrower's Subsidiaries with respect
to the issuance thereby to Borrower or to any of its Subsidiaries of shares of
preferred stock; provided, however, that (a) any subsequent issuance or transfer
of Equity Interests that results in any such preferred stock being held by a
26
Person other than Borrower or a Subsidiary; and (b) any sale or other transfer
of any such preferred stock (other than solely as a result of the creation of a
Permitted Encumbrance upon such Equity Interests) to a Person that is not either
Borrower or a Subsidiary, will be deemed, in each case, to constitute an
issuance of such preferred stock by such Subsidiary that was not permitted by
this clause (viii);
(ix) by Holdings or any of its Subsidiaries with
respect to Indebtedness arising in connection with Hedge Agreements entered into
in the ordinary course of business;
(x) by Holdings or any of its Subsidiaries with
respect to the guarantee of Indebtedness of Holdings or a Subsidiary of Holdings
that was permitted to be incurred by Section 3.1 or with respect to Guaranteed
Indebtedness of obligations (other than Indebtedness) of which Holdings or a
Subsidiary of Holdings is the primary obligor; provided that if the Indebtedness
being guaranteed is subordinated to or pari passu with the Obligations, then the
Guarantee shall be subordinated or pari passu, as applicable, to the same extent
as the Indebtedness guaranteed; provided, further, that guarantees by Credit
Parties of Indebtedness or such other obligations of Subsidiaries of Holdings
are not Credit Parties shall not, together with intercompany Indebtedness then
outstanding under Section 3.1(b)(vii)(e), Permitted Investments described in
clause (i)(y) of the definition of such term and Permitted Acquisitions
described in Section 3.6(ii)(G), exceed $5,000,000 in the aggregate outstanding
at any time; provided, further, that in no event shall Holdings be permitted to
guarantee Indebtedness under the Senior Notes;
(xi) by Holdings or any of its Subsidiaries with
respect to obligations in respect of workers' compensation claims,
self-insurance obligations, bankers' acceptances, performance, completion and
surety bonds, completion guarantees and similar obligations in the ordinary
course of business;
(xii) by Holdings or any of its Subsidiaries with
respect to Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently drawn against
insufficient funds, so long as such Indebtedness is covered within five Business
Days;
(xiii) by Holdings or a Subsidiary with respect to
Indebtedness arising from agreements of Holdings or such Subsidiary providing
for indemnification, adjustment of purchase price or similar obligations, in
each case, incurred or assumed in connection with the sale or other disposition
of any business, assets or Capital Stock of Holdings or any Subsidiary, other
than guarantees of Indebtedness incurred by any Person acquiring all or any
portion of such business, assets or Capital Stock; provided that (A) the maximum
aggregate liability in respect of all such Indebtedness shall at no time exceed
the gross proceeds, whether or not cash, actually received by Holdings and its
Subsidiaries in connection with such disposition and (B) such Indebtedness is
not reflected in the balance sheet of Holdings or any Subsidiary (contingent
obligations referred to in a footnote to financial statements and not otherwise
reflected on the balance sheet will not be deemed to be reflected on such
balance sheet for purposes of this clause (B));
(xiv) by Holdings or any of its Subsidiaries with
respect to contingent liabilities arising out of endorsements of checks and
other negotiable instruments for deposit or collection in the ordinary course of
business;
(xv) by a Foreign Subsidiary with respect to
additional Indebtedness in an aggregate principal amount, including all
Permitted Refinancing Indebtedness incurred to renew, refund, refinance,
replace, defease or discharge any Indebtedness incurred pursuant to this clause
(xv), not to exceed $5,000,000 at any time outstanding;
27
(xvi) by Holdings or any of its Subsidiaries with
respect to earn-outs and similar obligations incurred in connection with the
Acquisition or Permitted Acquisitions; and
(xvii) by Holdings or any of its Subsidiaries of with
respect to additional Indebtedness in an aggregate principal amount at any time
outstanding, including all Permitted Refinancing Indebtedness incurred to renew,
refund, refinance, replace, defease or discharge any Indebtedness incurred
pursuant to this clause (xvii), not to exceed $10,000,000 in the aggregate.
(c) For purposes of determining compliance with this Section
3.1, in the event that an item of proposed Indebtedness meets the criteria of
more than one of the categories of Indebtedness described in subsection (b)
above, or is entitled to be incurred pursuant to subsection (a) of this
Section 3.1, Borrower (in its sole discretion) will be permitted to divide
and classify such item of Indebtedness on the date of its incurrence, or
later reclassify all or a portion of such item of Indebtedness, in any manner
that complies with this Section 3.1. The accrual of interest, the accretion
or amortization of original issue discount, the payment of interest on any
Indebtedness in the form of additional Indebtedness with the same terms, the
reclassification of preferred stock as Indebtedness due to a change in
accounting principles, and the payment of dividends on Disqualified Stock or
preferred stock in the form of additional shares of the same class of
Disqualified Stock or preferred stock will not be deemed to be an incurrence
of Indebtedness or an issuance of Disqualified Stock or preferred stock for
purposes of this covenant; provided, in each such case, that the amount of
any such accrual, accretion or payment is included in Interest Charges and
interest expense of Borrower as accrued. Notwithstanding any other provision
of this covenant, the maximum amount of Indebtedness that Borrower or any
Subsidiary may incur pursuant to this covenant shall not be deemed to be
exceeded solely as a result of fluctuations in exchange rates or currency
values.
(d) The amount of any Indebtedness outstanding as of any
date will be:
(i) subject to clauses (ii), (iii) and (iv) below,
the principal amount of the Indebtedness;
(ii) in respect of Indebtedness of another Person
secured by a Lien on the assets of the specified Person (as to which the
specified Person has no liability in excess of the assets subject to such Lien),
the lesser of: (A) the fair market value of such assets at the date of
determination; and (B) the amount of the Indebtedness subject to such Lien of
the other Person;
(iii) with respect to Indebtedness of others supported
by a guarantee of Holdings or a Subsidiary, the lesser of the amount of the
primary Indebtedness and any stated limit on recourse under the guarantee; and
(iv) the accreted value of such Indebtedness, in the
case of any such Indebtedness issued with original issue discount which provides
by its express terms that the holders thereof are not entitled to receive upon
acceleration or redemption more than the accreted value at such time;
(e) the amount of the Indebtedness in respect of any Hedge
Agreement at any time shall be equal to the amount payable as a result of the
termination of such Hedge Agreement at such time.
28
3.2 Liens and Related Matters.
(a) No Liens. The Credit Parties shall not and shall not
cause or permit their Subsidiaries to directly or indirectly create, incur,
assume or permit to exist any Lien on or with respect to any property or
asset of such Credit Party or any such Subsidiary, whether now owned or
hereafter acquired, or any income or profits therefrom, except Permitted
Encumbrances (including, without limitation, those Liens constituting
Permitted Encumbrances existing on the date hereof and renewals and
extensions thereof, as set forth on Schedule 3.2).
(b) No Negative Pledges. The Credit Parties shall not and
shall not cause or permit their Subsidiaries to directly or indirectly enter
into or assume any agreement (other than the Loan Documents) prohibiting the
creation or assumption of any Lien upon its properties or assets, whether now
owned or hereafter acquired, except (i) in connection with any document or
instrument governing Indebtedness permitted (A) under Section 3.1(b)(iii) or
(B) so long as such prohibition applies only to the assets securing such
Indebtedness, Section 3.1(b)(ii), (b)(v) or (b)(xv), or (C) so long as such
prohibition is not materially more restrictive, taken as a whole, than the
prohibitions in this Agreement, under Section 3.1(b)(xvii), or (D) under
Section 3.1(b)(vi), with respect to any Indebtedness described in subclauses
(A), (B) or (C) above, so long as the prohibition is not materially more
restrictive taken as a whole, than the prohibition in the Indebtedness that
was renewed, refunded, refinanced, replaced, defeased or discharged, and (ii)
licenses and contracts which by their terms prohibit the assignment of such
agreements (to the extent such prohibition is enforceable at law) or the
granting of Liens on the rights contained therein.
(c) No Restrictions on Subsidiary Distributions to Borrower.
Except as provided herein, the Credit Parties shall not and shall not cause
or permit their Subsidiaries to directly or indirectly create or otherwise
cause or suffer to exist or become effective any consensual encumbrance or
restriction of any kind on the ability of any such Subsidiary to: (1) pay
dividends or make any other distribution on any of such Subsidiary's Stock
owned by Borrower or any other Subsidiary; (2) pay any Indebtedness owed to
Borrower or any other Subsidiary; (3) make loans or advances to Borrower or
any other Subsidiary; or (4) transfer any of its property or assets to
Borrower or any other Subsidiary, except:
(i) agreements governing Indebtedness described in
Section 3.1(b)(ii) as in effect on the date of this Agreement and any
amendments, restatements, modifications, renewals, increases, supplements,
refundings, replacements or refinancings of those agreements; provided that the
amendments, restatements, modifications, renewals, increases, supplements,
refundings, replacements or refinancings are not materially more restrictive,
taken as a whole, with respect to such dividend and other payment restrictions
than those contained in those agreements on the date of this Agreement;
(ii) the Senior Notes Documents;
(iii) applicable law, rule, regulation or order;
(iv) any instrument governing Indebtedness or Capital
Stock of a Person acquired by Holdings or any of its Subsidiaries as in effect
at the time of such acquisition (except to the extent such Indebtedness or
Capital Stock was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired; provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of this Agreement to
be incurred;
29
(v) customary non-assignment provisions in contracts
and licenses entered into in the ordinary course of business;
(vi) purchase money obligations for property acquired
in the ordinary course of business and Capital Lease Obligations that impose
restrictions on the property purchased or leased of the nature described in
clause (4) of Section 3.2(c);
(vii) any agreement for the sale or other disposition
of all or substantially all of the Capital Stock or assets of a Subsidiary or an
agreement entered into for the sale by such Subsidiary of assets that restricts
distributions by that Subsidiary pending such sale or other disposition;
(viii) Permitted Refinancing Indebtedness; provided
that the restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are not materially more restrictive, taken as a whole,
than those contained in the agreements governing the Indebtedness being
refinanced;
(ix) Permitted Encumbrances that limit the right of
the debtor to dispose of the assets subject to such Liens;
(x) provisions limiting the disposition or
distribution of assets or property in joint venture agreements (by such joint
venture to the extent that it is not a Credit Party), limited liability company
operating agreements (by such limited liability company to the extent that it is
not a Credit Party), partnership agreements (by such partnership to the extent
that it is not a Credit Party), asset sale agreements, sale-leaseback
agreements, options, stock sale agreements, lease agreements, licenses and other
similar agreements entered into with the approval of Borrower's Board of
Directors, which limitation is applicable only to the assets that are the
subject of such agreements;
(xi) provisions in agreements or instruments that
prohibit the payment of dividends or the making of other distributions with
respect to any Capital Stock of a Person on other than a pro rata basis;
(xii) any encumbrance or restriction contained in any
Indebtedness incurred by a Foreign Subsidiary pursuant to Section 3.1(b)(xv)
that applies only to such Foreign Subsidiary; and
(xiii) in the case of clause (4) of Section 3.2(c) of
this covenant:
(A) that restrict in a customary manner the
subletting, assignment or transfer of any
property or asset that is a lease, license,
conveyance or contract or similar property or
asset, or
(B) existing by virtue of any transfer of,
agreement to transfer, option or right with
respect to, or Lien on, any property or assets
of Holdings or any of its Subsidiaries not
otherwise prohibited by this Agreement;
(xiv) any encumbrances or restrictions imposed by any
amendments, modifications restatements, renewals, increases, supplements,
refundings, replacements or refinancings of the contracts, instruments or
obligations referred to in clauses (i) through (xiii) above; provided that the
encumbrances or restrictions in such amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings are
not materially more restrictive, taken as a whole, in the good faith judgment of
the Board of Directors of Borrower than the encumbrances or restrictions prior
to such
30
amendment, modification, restatement, renewal, increase, supplement, refunding,
replacement or refinancing.
3.3 [Intentionally Omitted].
3.4 [Intentionally Omitted].
3.5 Restricted Payments.
(a) The Credit Parties shall not and shall not cause or
permit their Subsidiaries to directly or indirectly declare, order, pay, make
or set apart any sum for any Restricted Payment, unless, at the time of and
after giving effect to such Restricted Payment:
(i) no Default or Event of Default has occurred and
is continuing or would occur as a consequence of such Restricted Payment;
(ii) Borrower would, at the time of such Restricted
Payment and after giving pro forma effect thereto as if such Restricted Payment
had been made at the beginning of the applicable four-quarter period, have been
permitted to incur at least $1.00 of additional Indebtedness pursuant to Section
3.1(a); and
(iii) such Restricted Payment, together with the
aggregate amount of all other Restricted Payments made by Borrower and its
Subsidiaries since the Closing Date (excluding Restricted Payments permitted by
clauses (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (xiii), (xiv) and
(xv) of Section 3.5(b)), is less than the sum, without duplication, of:
(1) 50% of the Consolidated Net Income of Borrower
for the period (taken as one accounting period) from the beginning of the first
Fiscal Quarter commencing after the date of this Agreement to the end of
Borrower's most recently ended Fiscal Quarter for which financial statements
have been delivered hereunder to Agent at the time of such Restricted Payment
(or, if such Consolidated Net Income for such period is a deficit, less 100% of
such deficit); plus
(2) 100% of the aggregate Qualified Proceeds
received by Borrower since the Closing Date as a contribution to its common
equity capital or from the issue or sale of Equity Interests of Borrower (other
than Disqualified Stock) or from the issue or sale of convertible or
exchangeable Disqualified Stock or convertible or exchangeable debt securities
of Borrower that have been converted into or exchanged for such Equity Interests
(other than Equity Interests (or Disqualified Stock or debt securities) sold to
a Subsidiary of Borrower), together with the aggregate cash and Cash Equivalents
received by Borrower or any of its Subsidiaries at the time of such conversion
or exchange
(3) to the extent that any Restricted Investment
that was made after the Closing Date is sold for cash or is otherwise disposed
of or is repurchased, redeemed, liquidated or repaid for cash, the amount of
cash so received (less the cost of disposition, if any, and less any amount
included in clause (1) of this Section 3.5(a)(iii) in respect of such
transaction); and
(iv) after giving effect to such Restricted Payment
(x) Borrowing Availability shall be not less than $15,000,000 and (y) on a pro
forma basis for the period of four Fiscal Quarters for which financial
statements have been delivered to the Agent hereunder ending on or most recently
prior to such Restricted Payment, as though such Restricted Payment was made on
the first day of such period, the Fixed Charge Coverage Ratio shall be at least
1.0:1.0.
31
(b) The preceding subsection (a) shall not prohibit:
(i) the payment of any dividend or the consummation
of any irrevocable redemption within 60 days after the date of declaration of
the dividend or giving of the redemption notice, as the case may be, if at the
date of declaration or notice, the dividend or redemption payment would have
complied with the provisions of this Agreement;
(ii) the making of any Restricted Payment or a
purchase, redemption, defeasance or prepayment of Senior Notes contemplated by
Section 3.18, in exchange for, or out of the Net Proceeds of the substantially
concurrent sale (other than to a Subsidiary of Holdings) of, Equity Interests of
Holdings or Borrower (other than Disqualified Stock) or from the substantially
concurrent contribution of common equity capital to Holdings or Borrower;
provided that the amount of any such Net Proceeds that are utilized for any such
Restricted Payment will be excluded from Section 3.5(a)(iii)(2);
(iii) the repurchase, redemption, defeasance or other
acquisition or retirement for value of Indebtedness of Borrower or any Guarantor
that is contractually subordinated to the Obligations with the Net Proceeds from
a substantially concurrent incurrence of Permitted Refinancing Indebtedness;
(iv) the payment of any dividend (or, in the case of
any partnership or limited liability company, any similar distribution) by a
Subsidiary of Borrower to the holders of its Equity Interests on a pro rata
basis;
(v) so long as no Default has occurred and is
continuing or would be caused thereby, and after giving effect thereto, the
repurchase, redemption or other acquisition or retirement for value of any
Equity Interests of Borrower or any Subsidiary of Borrower and any distribution,
dividend, loan or advance to Holdings or any direct or indirect parent of
Holdings for the repurchase, redemption or other acquisition or retirement for
value of any Equity Interests of Holdings or any direct or indirect parent of
Holdings, in each case, held by any current or former officer, director, or
employee of Borrower or any of its Subsidiaries or, in each case to the extent
applicable, their respective estates, spouses, former spouses or family members,
in each case, pursuant to any equity subscription agreement, stock option
agreement, shareholders' agreement or similar agreement or benefit plan of any
kind; provided that the aggregate price paid for all such repurchased, redeemed,
acquired or retired Equity Interests may not exceed $1,500,000 in any Fiscal
Year or $5,000,000 in the aggregate from and after the Closing Date; provided
further that if after giving effect to any such repurchase, redemption,
acquisition or other retirement for value, (x) Borrowing Availability shall be
equal to or greater than $10,000,000 and (y) on a pro forma basis for the period
of four Fiscal Quarters for which financial statements have been delivered
hereunder to the Agent ending on or most recently prior to such repurchase,
redemption or other acquisition or retirement for value, as though such
repurchase, redemption or other acquisition or retirement for value occurred on
the first day of such period, the Fixed Charge Coverage Ratio shall be at least
1.0:1.0, Borrower may (X) carry over and (so long as no Default has occurred and
is continuing or would be caused thereby) make in subsequent Fiscal Years, in
addition to the amounts permitted for such Fiscal Year, the amount of such
repurchases, redemptions or other acquisitions or retirements for value,
distributions, loans or advances permitted to have been made but not made in any
preceding Fiscal Year up to a maximum of $3,000,000 in any Fiscal Year and (Y)
(so long as no Default has occurred and is continuing or would be caused
thereby) make such repurchases, redemptions or other acquisitions or retirements
for value in excess of an aggregate of $5,000,000, but not in excess of an
aggregate of $7,500,000; provided further that such amount in any Fiscal Year
may be increased by an amount not to exceed the Net Proceeds from the sale of
Equity Interests (other than Disqualified Stock) of Borrower (or any direct or
indirect parent of Borrower to the extent such Net Proceeds are contributed to
the common
32
equity of Borrower) to employees, officers, directors or consultants of Borrower
and its Subsidiaries that occurs after the date of this Agreement (to the extent
the cash proceeds from the sale of such Equity Interests have not otherwise been
applied to the payment of Restricted Payments (including pursuant to Section
3.5(a)(iii)(2) above)) less any amounts previously applied to the payment of
Restricted Payments pursuant to this clause (v); provided further that the Net
Proceeds from such sales of Equity Interests described in this clause (v) shall
be excluded from Section 3.5(a)(iii)(2) above to the extent such proceeds have
been or are applied to the payment of Restricted Payments pursuant to this
clause (v);
(vi) the repurchase of Equity Interests deemed to
occur upon the exercise of stock options or warrants to the extent such Equity
Interests represent a portion of the exercise price of those stock options or
warrants;
(vii) so long as no Default has occurred and is
continuing or would be caused thereby and after giving effect thereto, the
declaration and payment of regularly scheduled or accrued dividends to holders
of any class or series of Disqualified Stock issued on or after the Closing Date
in accordance with the Interest Coverage Ratio set forth in Section 3.1(a);
(viii) (x) so long as no Event of Default has occurred
and is continuing or would be caused thereby and after giving effect thereto
payments in connection with or as a result of the Acquisition (including,
without limitation, payment of the "Contingent Payment" or "Second Contingent
Payment" under and as such terms are defined in the Acquisition Agreement) and
(y) so long as no Event of Default has occurred and is continuing or would be
caused thereby and after giving effect thereto, on a pro forma basis for the
period of four Fiscal Quarters for which financial statements have been
delivered hereunder to the Agent ending on or most recently prior to such
payment, as though such payment occurred on the first day of such period, the
Fixed Charge Coverage Ratio shall be at least 1.0:1.0, payments in respect of
earnout obligations that have become due and payable in respect of Permitted
Acquisitions that are consummated after the Closing Date;
(ix) Permitted Payments to Parent;
(x) the redemption, repurchase or other acquisition
for value of any common Equity Interests of any Foreign Subsidiary of Holdings
that are held by a Person that is not an Affiliate of Holdings to the extent
required to satisfy applicable laws, rules or regulations in an aggregate amount
since the date of this Agreement not to exceed $1,000,000; provided that the
consideration for such redemption, repurchase or other acquisition is not in
excess of an amount equal to the lesser of (x) the fair market value of such
common Equity Interests or (y) such amount required by applicable laws, rules or
regulations;
(xi) so long as no Default has occurred and is
continuing or would be caused thereby, payments not to exceed $100,000 in the
aggregate since Closing Date to enable Holdings to make payments to holders of
its Capital Stock in lieu of issuance of fractional shares of its Capital Stock;
(xii) so long as no Default has occurred and is
continuing or would be caused thereby, the payment of intercompany Indebtedness
that is expressly subordinated to the Obligations, the incurrence of which is
permitted under Section 3.1(b)(vii);
(xiii) so long as no Default has occurred and is
continuing or would be caused thereby, and (x) after giving effect thereto,
Borrowing Availability shall be equal to or greater than $10,000,000 and (y) on
a pro forma basis for the period of four Fiscal Quarters for which financial
statements have been delivered hereunder to the Agent ending on or most recently
prior to such Restricted Payment, as though such Restricted Payment occurred on
the first day of such period, the Fixed Charge
33
Coverage Ratio shall be at least 1.0:1.0, other Restricted Payments in an
aggregate amount not to exceed $7,500,000 since the Closing Date;
(xiv) Permitted Acquisitions; and
(xv) so long as no Event of Default has occurred and
is continuing or would be caused thereby, and after giving effect thereto,
Restricted Payments constituting the payment of fees and reimbursement of
expenses not in excess of the amounts specified in, or determined pursuant to,
the Management Agreement as in effect on the Closing Date.
(c) The amount of all Restricted Payments (other than cash)
will be the fair market value on the date of the Restricted Payment of the
asset(s) or securities proposed to be transferred or issued by a Credit Party
or its Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any assets or securities that are required to be
valued by this covenant will be determined by the Board of Directors of
Borrower whose resolution with respect thereto will be delivered to the
Agent. The Board of Directors' determination must be based upon an opinion or
appraisal issued by an accounting, appraisal or investment banking firm of
national standing if the fair market value exceeds $10,000,000.
3.6 Restriction on Fundamental Changes. The Credit Parties shall not
and shall not cause or permit their Subsidiaries to directly or indirectly: (a)
amend, modify or waive in any manner adverse to any Lender any term or provision
of its organizational documents, including its articles of incorporation,
certificates of designations pertaining to preferred stock, by laws, partnership
agreement or operating agreement unless required by law; (b) enter into any
transaction of merger or consolidation; (c) liquidate, wind-up or dissolve
itself (or suffer any liquidation or dissolution); or (d) acquire by purchase or
otherwise all or a substantial part of the business or assets of any other
Person, except that:
(i) on the Closing Date, Xxxx Manufacturing Co.,
Inc. may merge with and into the Borrower with the Borrower as the surviving
Person,
(ii) Borrower may acquire all or substantially all of
the assets or all of the Stock of any Person (the "Target") (in each case, a
"Permitted Acquisition") subject to the satisfaction of each of the following
conditions:
(A) Agent shall receive at least 30 Business Days' prior written
notice of such proposed Permitted Acquisition, which notice
shall include a reasonably detailed description of such proposed
Permitted Acquisition;
(B) such Permitted Acquisition shall be consensual and shall
have been approved by the Target's board of directors;
(C) the Stock, business and/or assets acquired in such Permitted
Acquisition shall be free and clear of all Liens (other than
Permitted Encumbrances);
(D) at or prior to the closing of any Permitted Acquisition, the
Borrower shall have complied with Section 2.8 in respect of the
Target and acquired assets;
(E) concurrently with delivery of the notice referred to in
clause (i) above, Borrower shall have delivered to Agent, in
form and substance reasonably satisfactory to Agent, a pro forma
consolidated balance sheet, income statement and cash flow
statement of
34
Borrower and its Subsidiaries (the "Acquisition Pro Forma"),
based on recent financial statements, which shall be complete
and shall fairly present in all material respects the assets,
liabilities, financial condition and results of operations of
Borrower and its Subsidiaries in accordance with GAAP
consistently applied, but taking into account such Permitted
Acquisition and the funding of all Loans in connection
therewith, and such Acquisition Pro Forma shall reflect that (x)
average daily Borrowing Availability for the 90-day period
preceding the consummation of such Permitted Acquisition would
have exceeded $10,000,000 on a pro forma basis (after giving
effect to such Permitted Acquisition and all Loans funded in
connection therewith as if made on the first day of such period)
and the Acquisition Projections (as hereinafter defined) shall
reflect that such Borrowing Availability of $10,000,000 shall
continue for at least 90 days after the consummation of such
Permitted Acquisition and (y) on a pro forma basis, no Event of
Default has occurred and is continuing or would result after
giving effect to such Permitted Acquisition. The "Acquisition
Projections" shall be the updated versions of the most recently
delivered Projections covering the three-year period commencing
on the date of such Permitted Acquisition and otherwise prepared
in accordance with the Projections, based upon historical
financial data of a recent date reasonably satisfactory to
Agent, taking into account such Permitted Acquisitions;
(F) on or prior to the date of such Permitted Acquisition, Agent
shall have received, in form and substance reasonably
satisfactory to Agent, copies of the acquisition agreement and
related agreements and instruments, and all opinions,
certificates, lien search results and other documents reasonably
requested by Agent;
(G) in the event that such Permitted Acquisition constitutes the
acquisition of Stock in a Target that will become upon
consummation thereof a Foreign Subsidiary or an entity that is
not and is not required to be a Credit Party, the total
consideration paid for such Target and all prior Targets that
are Foreign Subsidiaries and are not and are not required to be
Credit Parties (including any Acquired Debt and, without
duplication, the fair market value of any property of the Target
subject to Liens described in clause (iii) of the definition of
Permitted Encumbrance and the amount of any earn-out or similar
obligations incurred with respect to such Permitted
Acquisition), shall not exceed, together with outstanding
guarantees and Guaranteed Indebtedness described in Section
3.1(b)(x), outstanding intercompany Indebtedness described in
Section 3.1(b)(vii)(e) and other Pemitted Investments of the
type described in clause (i)(y) of such term, $5,000,000; and
(H) at the time of such Permitted Acquisition and after giving
effect thereto, no Default or Event of Default has occurred and
is continuing.
Notwithstanding the foregoing, the Accounts, Inventory, M&E and
Real Estate of the Target shall not be included in Eligible
Accounts, Eligible Inventory, Eligible M&E or Eligible Real
Estate without the prior written consent of Agent and Requisite
Lenders (it being understood that Agent will in the ordinary
course of business undertake its customary efforts to assess the
value of such Collateral for the purposes of determining its
eligibility (or lack of eligibility) in the Borrowing Base).
(iii) any Wholly-Owned Subsidiary of the Borrower may
be merged or consolidated with or into the Borrower (provided that the Borrower
shall be the continuing or surviving
35
Person) or with or into any Subsidiary Guarantor (provided that the Subsidiary
Guarantor shall be the continuing or surviving Person);
(iv) any Wholly-Owned Subsidiary may sell, lease,
transfer or otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to the Borrower or any other Wholly-Owned Subsidiary;
(provided that if the transferor in such a transaction is a Subsidiary
Guarantor, then the transferee must either be the Borrower or a Subsidiary
Guarantor);
(v) any Wholly-Owned Subsidiary of the Borrower may
merge into the Person such Wholly-Owned Subsidiary was formed to acquire in
connection with a Permitted Acquisition;
(vi) any Subsidiary of the Borrower may wind-up into
the Borrower or any Subsidiary of the Borrower; provided that if the Subsidiary
being wound up is a Guarantor, it may be wound up into the Borrower or any
Subsidiary that is, or will become concurrently with the transaction, a
Guarantor; and
(vii) Holdings may merge with or into or consolidate
with, or wind-up or liquidate into or otherwise transfer all of its assets to, a
parent of Holdings or a Subsidiary of a parent of Holdings, so long as (i) the
Person surviving such transaction, if not Holdings, shall become a Guarantor and
assume all of Holdings' covenants and obligations hereunder pursuant to a
joinder agreement in form and substance reasonably satisfactory to the Agent
(and each reference to Holdings in this Agreement or any Loan Document shall
thereafter be deemed to refer and apply to such surviving person), (ii) after
giving effect to such transactions, Holdings and its Subsidiaries shall be in
compliance with the covenants set forth in Sections 2, 3 and 4 hereto (iii) the
representations and warranties contained in Section 5 that are subject to
materiality or Material Adverse Effect qualifications shall be true, correct and
complete in all respects and all representations and warranties that are not
subject to materiality or Material Adverse Effect qualification are true,
correct and complete in all material respects, after giving effect to such
transaction, (iv) no Change of Control shall have occurred as a result of such
transaction, (v) on or prior to the date of such transaction, Agent shall have
received all amendments, certificates and filings necessary or desirable in the
Agent's sole discretion to continue the Lien on all of Borrower's stock and
other "Pledged Collateral" under the Pledge Agreement and such surviving Person
shall have joined the Pledge Agreement as a pledgor in a manner acceptable to
Agent (vi) on or prior to the date of such transaction, Agent shall have
received such legal opinions as it may reasonably request; provided that for the
purposes of sub-clauses (ii) and (iii) of this Section 3.6 and any test related
thereto, any reference to Holdings shall be deemed to refer to the Person
surviving such transaction, if not Holdings.
3.7 Disposal of Assets or Subsidiary Stock. The Credit Parties shall
not and shall not cause or permit their Subsidiaries to directly or indirectly
convey, sell, lease, sublease, transfer or otherwise dispose of, or grant any
Person an option to acquire, in one transaction or a series of related
transactions, any of its property, business or assets, whether now owned or
hereafter acquired, except for:
(a) sales of inventory to customers in the ordinary course
of business;
(b) transfers of cash and Cash Equivalents otherwise
permitted by the terms of this Agreement;
(c) dispositions of obsolete or surplus assets not used or
useful in the business, the consideration for which shall not exceed $500,000
in any Fiscal Year;
36
(d) (i) the transfer of assets to the Borrower, (ii) the
transfer of assets by any Guarantor, to any other Guarantor, and (iii) the
transfer of assets by any Subsidiary that is not a Guarantor, to any
Subsidiary, each in accordance with any applicable provision of Section 3.6;
(e) (A) Asset Dispositions by Borrowers and their
Subsidiaries (excluding sales of Accounts) if all of the following conditions
are met: (i) the fair market value of assets sold or otherwise disposed of in
any single transaction or series of related transactions does not exceed
$500,000 and the aggregate market value of assets sold or otherwise disposed
of in any Fiscal Year does not exceed $1,000,000; (ii) the consideration
received is at least equal to the fair market value of such assets; (iii) 75%
of the consideration received is cash; (iv) the Net Proceeds of such Asset
Disposition are applied as required by Section 1.5(c); and (v) no Event of
Default then exists or would result from such disposition and (B) the Asset
Disposition consisting of the sale of the Borrower's facility located in
Janesville, Wisconsin as part of a sale and leaseback so long as (i) the Net
Proceeds of such Asset Disposition are applied as required by Section 1.5(c)
and (ii) no Event of Default then exists or would result from such Asset
Disposition;
(f) while no Event of Default has occurred and is
continuing, the sale or discount without recourse of accounts receivable
arising in the ordinary course of business in connection with the compromise
or collection thereof;
(g) transfers of assets pursuant to Investments permitted by
Section 3.5 or that are Permitted Investments;
(h) qualifying exchanges for solely like kind, owned Real
Estate with a value at least equal to the fair market value of Real Estate
exchanged therefor, pursuant to Section 1031 of the IRC, evidenced by an
opinion of counsel, together with an appraisal report in form and substance
and from an appraiser reasonably satisfactory to Agent, unless Agent in its
discretion elects to exclude such Real Estate from the Borrowing Base of
Eligible Real Estate; provided that to the extent the property to be
exchanged is subject to a Mortgage, the newly-acquired Real Estate shall also
be subject to a Mortgage and the Borrower shall comply with Section 2.8(a);
and
(i) sales of Capital Stock to Credit Parties that are
Domestic Subsidiaries of Holdings; and
(j) non-exclusive licenses of Intellectual Property granted
in the ordinary course of business.
3.8 Transactions with Affiliates. The Credit Parties shall not and
shall not cause or permit their Subsidiaries to directly or indirectly enter
into or permit to exist any transaction (including the purchase, sale, lease or
exchange of any property or the rendering of any management, consulting,
investment banking, advisory or other similar services) with any Affiliate
(other than between Credit Parties) or with any director, officer or employee of
any Credit Party, except on terms that are no less favorable to such Credit
Party or the relevant Subsidiary than those that would be obtained in a
comparable transaction by such Credit Party or such Subsidiary with an unrelated
Person. The following transaction shall not be subject to the prohibition in the
preceding sentence:
(a) any employment agreement or arrangement, incentive
compensation plan, stock option or stock ownership plan, employee benefit
plan, severance arrangements, officer or director indemnification agreement
or any similar arrangement entered into by Borrower or any of its
Subsidiaries in the ordinary course of business and payments pursuant
thereto;
37
(b) transactions between or among the Credit Parties and/or
their Subsidiaries;
(c) payment of reasonable directors fees to directors of
Borrower, Holdings, or any direct or indirect parent or any Subsidiary of
Borrower or Holdings and the provision of customary indemnification to
directors, officers and employees of Borrower or Holdings or direct or
indirect parent or any Subsidiary of Borrower or Holdings;
(d) any issuance of Equity Interests (other than
Disqualified Stock) of Holdings to Affiliates of Holdings or any contribution
to the capital of Holdings (other than as Disqualified Stock);
(e) Restricted Payments that do not violate Section 3.5;
(f) omitted;
(g) transaction with any joint venture in which a Credit
Party is an investor and which is controlled by a Person that is not an
Affiliate;
(h) any agreement or arrangements as in effect on the
Closing Date and described on Schedule 3.8 and any renewals, extensions or
replacements of any such agreement or arrangements (so long as such renewals,
extensions or replacements are not less favorable to the Lenders as
determined by the Board of Directors in its reasonable good faith judgment)
and the transactions contemplated thereby;
(i) loans or advances to employees in the ordinary course of
business not to exceed $1,000,000 in the aggregate at any one time
outstanding and expense reimbursements to employees in the ordinary course of
business; and
(j) repurchases of Senior Notes in accordance with Section
3.18 if repurchased on the same terms as offered to Persons that are not
Affiliates of the Credit Parties.
3.9 Conduct of Business. The Credit Parties will not and will not
permit their Subsidiaries to directly or indirectly engage in any business other
than (i) the businesses engaged in by such Credit Party on the Closing Date and
businesses that are reasonably similar, ancillary, complementary, or related to,
or a reasonable extension, development or expansion of the businesses engaged in
on the Closing Date and (ii) such other lines of business as may be consented to
by Requisite Lenders. Holdings will not engage in any type of business activity
other than the ownership of Stock of Borrower and performance of its obligations
under the Related Transaction Documents to which it is a party and activities
incidental thereto.
3.10 Changes Relating to Indebtedness. The Credit Parties shall not
and shall not cause or permit their Subsidiaries to directly or indirectly
change or amend the terms of any of its Indebtedness permitted by Section
3.1(b)(iii) if the effect of such amendment is to: (a) increase the interest
rate on such Indebtedness; (b) accelerate the dates upon which payments of
principal or interest are due on such Indebtedness; (c) add or make more
restrictive any event of default or covenant with respect to such Indebtedness;
(d) change in any manner adverse to any Lender or to any Credit Party the
redemption or prepayment provisions of such Indebtedness; (e) change or amend
any other term if such change or amendment would materially increase the
obligations of the obligor or confer additional material rights on the holder of
such Indebtedness in a manner materially adverse to any Credit Party or Lenders;
or (f) increase the portion of interest payable in cash with respect to any
Indebtedness for which interest is payable by the issuance of payment-in-kind
notes or is permitted to accrue;.
38
3.11 Fiscal Year. No Credit Party shall change its Fiscal Year or
permit any of its Subsidiaries to change their respective fiscal years without
the consent of Agent.
3.12 Press Release; Public Offering Materials. Each Credit Party
executing this Agreement agrees that neither it nor its Affiliates will in the
future issue any press releases or other public disclosure, including any
prospectus, proxy statement or other materials filed with any Governmental
Authority relating to a public offering of the Stock of any Credit Party, using
the name of GE Capital or its affiliates or referring to this Agreement, the
other Loan Documents or the Related Transactions Documents without at least two
(2) Business Days' prior notice to GE Capital and without the prior written
consent of GE Capital unless (and only to the extent that) such Credit Party or
Affiliate is required to do so under law and then, in any event, such Credit
Party or Affiliate will consult with GE Capital before issuing such press
release or other public disclosure. Each Credit Party consents to the
publication by Agent or any Lender of a tombstone or similar advertising
material relating to the financing transactions contemplated by this Agreement.
Agent or such Lender shall provide a draft of any such tombstone or similar
advertising material to each Credit Party for review and comment prior to the
publication thereof. Agent reserves the right to provide to industry trade
organizations information necessary and customary for inclusion in league table
measurements.
3.13 Subsidiaries. The Credit Parties shall not and shall not cause
or permit their Subsidiaries to directly or indirectly establish, create or
acquire any new Subsidiary unless it has complied, and caused such new
Subsidiary to comply, with Section 2.8(c) in connection with establishing,
creating or acquiring such new Subsidiary.
3.14 Bank Accounts. The Credit Parties shall not and shall not cause
or permit their Subsidiaries to establish any new deposit accounts without prior
written notice to Agent and unless the account to be opened is subject to a
Control Agreement, in form and substance reasonably satisfactory to Agent.
3.15 Hazardous Materials. The Credit Parties shall not and shall not
cause or permit their Subsidiaries to cause or permit a Release of any Hazardous
Material on, at, in, under, above, to, from or about any of the Real Estate
where such Release would (a) violate or form the basis for any Environmental
Liabilities by the Credit Parties or any of their Subsidiaries under, any
Environmental Laws or Environmental Permits or (b) otherwise adversely impact
the value or marketability of any of the Real Estate or any of the Collateral,
other than such violations, Environmental Liabilities or adverse impacts that
could not reasonably be expected to have a Material Adverse Effect.
3.16 ERISA. The Credit Parties shall not and shall not cause or
permit any ERISA Affiliate to, cause or permit to occur an ERISA Event to the
extent such ERISA Event could reasonably be expected to have a Material Adverse
Effect.
3.17 Sale Leasebacks. The Credit Parties shall not, and shall not
permit any of their Subsidiaries to, enter into any sale and leaseback
transaction, except if:
(a) Borrower could have incurred (i) Indebtedness in an
amount equal to the Attributable Debt relating to such sale and leaseback
transaction under the Interest Coverage Ratio test in Section 3.1(a) or
pursuant to Section 3.1(b)(iv) or 3.1(b)(v) and (ii) a Lien to secure such
Indebtedness pursuant to Section 3.2;
(b) the gross cash proceeds of such sale and leaseback
transaction are at least equal to the fair market value, as determined in
good faith by the Board of Directors of the Borrower
39
and set forth in an officers' certificate delivered to the Agent, of the
property that is the subject of that sale and leaseback transaction; and
(c) Borrower applies the proceeds of such transaction in
compliance with Section 1.5(c).
3.18 Prepayments of Other Indebtedness. The Credit Parties shall not,
directly or indirectly, voluntarily purchase, redeem, defease or prepay any
principal of, premium, if any, interest or other amount payable in respect of
any Indebtedness, other than (i) the Obligations; (ii) Indebtedness secured by a
Permitted Encumbrance if the asset securing such Indebtedness has been sold or
otherwise disposed of in accordance with Section 3.7(b); (iii) intercompany
Indebtedness reflecting amounts owing to Borrower or any Credit Party, subject
to any subordination restrictions to which such Indebtedness is subject; (iv)
prepayments of any portion of Interim Financing with the (x) Net Proceeds of any
Asset Disposition remaining after any prepayment of Obligations required by
Section 1.5(c) or of any issuance of Stock described in Section 1.5(d)(2) or (y)
proceeds of a Permitted Refinancing; (v) in connection with (and in an amount
not exceeding the Net Proceeds of) a Permitted Refinancing; and (vi) with the
proceeds of Equity Issuances not required to be applied to Interim Financing or
the Obligations in accordance with the terms hereof, (vii) as otherwise
permitted by Section 3.5, or (viii) provided that after giving effect to such
purchase, redemption, defeasance or prepayment, (x) Borrowing Availability shall
be equal to or greater than $12,500,000 and (y) on a pro forma basis for the
period of four Fiscal Quarters for which financial statements have been
delivered hereunder to the Agent ending on or most recently prior to such
redemption or deposit as though such purchase, redemption, defeasance or
prepayment occurred on the first day of such period, the Fixed Charge Coverage
Ratio shall be at least 1.0:1.0, the purchase, redemption, defeasance or
prepayment after the date of this Agreement of the Senior Notes, in the
aggregate cumulative amount not to exceed the sum of (1) $25,000,000 and (2) Net
Proceeds of Stock issued by Holdings and applied to such purchase, redemption,
defeasance or prepayment in accordance with the Senior Notes Documents as in
effect on the Closing Date.
SECTION 4.
FINANCIAL COVENANTS/REPORTING
Borrower covenants and agrees that from and after the date hereof until
the Termination Date, Borrower shall perform and comply with, and shall cause
each of the other Credit Parties to perform and comply with, all covenants in
this Section 4 applicable to such Person.
4.1 Omitted.
4.2 Omitted.
4.3 Omitted.
4.4 Omitted.
4.5 Omitted.
4.6 Omitted.
4.7 Omitted.
4.8 Omitted.
40
4.9 Financial Statements and Other Reports. Holdings will maintain,
and cause each of its Subsidiaries to maintain, a system of accounting
established and administered in accordance with sound business practices to
permit preparation of Financial Statements in conformity with GAAP (it being
understood that monthly Financial Statements are not required to have footnote
disclosures). Borrower will deliver each of the Financial Statements and other
reports described below to Agent.
(a) Monthly Financials. As soon as available and in any
event within thirty (30) days after the end of each month (including the last
month Borrower's Fiscal Year), Borrower will deliver (1) the consolidated and
consolidating balance sheets of Holdings and its Subsidiaries, as at the end
of such month, and the related consolidated and consolidating statements of
income, stockholders' equity and cash flow for such month and for the period
from the beginning of the then current Fiscal Year of Holdings to the end of
such month, (2) a report setting forth in comparative form the corresponding
figures for the corresponding periods of the previous Fiscal Year and the
corresponding figures from the most recent Projections for the current Fiscal
Year delivered pursuant to Section 4.9(F), (3) a schedule of the outstanding
Indebtedness for borrowed money of Holdings and its Subsidiaries describing
in reasonable detail each such debt issue or loan outstanding and the
principal amount and amount of accrued and unpaid interest with respect to
each such debt issue or loan, and (4) a schedule of Hedge Agreements to which
Holdings or any of its Subsidiaries is then a party, describing each such
Hedge Agreement in reasonable detail.
(b) Year-End Financials. As soon as available and in any
event within ninety (90) days after the end of each Fiscal Year (or 120 days
in the case of the Fiscal Year ended January 31, 2006), Borrower will deliver
(1) the consolidated and consolidating balance sheets of Holdings and its
Subsidiaries, as at the end of such year, and the related consolidated and
consolidating statements of income, stockholders' equity and cash flow for
such Fiscal Year, (2) a schedule of the outstanding Indebtedness for borrowed
money of Holdings and its Subsidiaries describing in reasonable detail each
such debt issue or loan outstanding and the principal amount and amount of
accrued and unpaid interest with respect to each such debt issue or loan and
(3) a report with respect to the consolidated Financial Statements from a
firm of Certified Public Accountants selected by Borrower and reasonably
acceptable to Agent, which report shall be prepared in accordance with
Statement of Auditing Standards No. 58 (the "Statement") "Reports on Audited
Financial Statements" and such report shall be "Unqualified" (as such term is
defined in such Statement).
(c) Accountants' Reports. Promptly upon receipt thereof,
Borrower will deliver copies of all significant reports submitted by
Borrower's firm of certified public accountants in connection with each
annual, interim or special audit or review of any type of the Financial
Statements or related internal control systems of Holdings or its
Subsidiaries made by such accountants, including any comment letter submitted
by such accountants to management in connection with their services.
(d) Additional Deliveries.
(i) To Agent, on or prior to noon New York time on
the date that is ten (10) Business Days after the end of each Fiscal Month
(together with a copy of any of the following reports requested by any Lender in
writing after the Closing Date), and, while any Event of Default is continuing,
upon request of Agent, each of the following reports, each of which shall be
prepared by Borrower as of the last day of the immediately preceding Fiscal
Month or the date 2 days prior to the date of any such request:
(1) a Borrowing Base Certificate with respect to the Credit Parties,
accompanied by such supporting detail and documentation as shall
be requested by Agent in its reasonable
41
credit judgment (each in substantially the same form as Exhibit
4.9(D) (a "Borrowing Base Certificate"));
(2) with respect to the Credit Parties, a summary of Inventory by
location and type with, to the extent requested by Agent, a
supporting perpetual Inventory report, and a summary of M&E by
location and type in each case accompanied by such supporting
detail and documentation as shall be requested by Agent in its
reasonable credit judgment; and
(3) with respect to the Credit Parties, a monthly trial balance
showing Accounts outstanding aged from invoice date as follows:
1 to 30 days, 31 to 60 days, 61 to 90 days and 91 days or more,
accompanied by such supporting detail and documentation as shall
be requested by Agent in its reasonable credit judgment.
(ii) To Agent, if (i) Borrowing Availability is less
than $5,000,000 or (ii) an Event of Default shall have occurred and be
continuing, and upon Agent's request (together with a copy of all or any part of
such delivery requested by any Lender in writing after the Closing Date),
collateral reports with respect to the Credit Parties, including all additions
and reductions (cash and non-cash) with respect to Accounts of the Credit
Parties, in each case accompanied by such supporting detail and documentation as
shall be requested by Agent in its reasonable credit judgment each of which
shall be prepared by Borrower as of the last day of the immediately preceding
week;
(iii) To Agent, at the time of delivery of each of
the monthly Financial Statements delivered pursuant to this Section 4.9:
(1) a reconciliation of the most recent Borrowing Base, general
ledger and month-end Inventory reports of the Credit Parties to
the Credit Parties' general ledger and monthly Financial
Statements delivered pursuant to this Section 4.9, in each case
accompanied by such supporting detail and documentation as shall
be requested by Agent in its reasonable credit judgment;
(2) a reconciliation of the summary of Inventory by location and
type to the most recent Borrowing Base Certificate, general
ledger and monthly Financial Statements delivered pursuant to
this Section 4.9, in each case accompanied by such supporting
detail and documentation as shall be requested by Agent in its
reasonable credit judgment;
(3) an aging of accounts payable and a reconciliation of that
accounts payable aging to Borrower's general ledger and monthly
Financial Statements delivered pursuant to this Section 4.9, in
each case accompanied by such supporting detail and
documentation as shall be requested by Agent in its reasonable
credit judgment; and
(4) a reconciliation of the outstanding Loans as set forth in the
monthly Loan Account statement provided by Agent to the Credit
Parties' general ledger and monthly Financial Statements
delivered pursuant to this Section 4.9, in each case accompanied
by such supporting detail and documentation as shall be
requested by Agent in its reasonable credit judgment.
(iv) To Agent, at the time of delivery of each of the
annual Financial Statements delivered pursuant to Section 4.9, (i) a listing of
government contracts of Borrower subject to the Federal Assignment of Claims Act
of 1940; and (ii) a list of any applications for the registration of any Patent,
Trademark or Copyright filed by any Credit Party with the United States Patent
and
00
Xxxxxxxxx Xxxxxx, xxx Xxxxxx Xxxxxx Copyright Office or any similar office or
agency in the prior Fiscal Year;
(e) Appraisals; Inspections.
(i) On or prior to the date that is forty-five (45)
days following the Closing Date, Borrower shall, at Borrower's expense, (x)
obtain appraisal reports in form and substance and from appraisers reasonably
satisfactory to Agent stating the then current fair market values or Net Orderly
Liquidation Value, as applicable, of all or any portion of the Real Estate, M&E
and Inventory owned by the Credit Parties, as applicable; (y) obtain from FIRREA
certified appraisers, appraisals, in form and substance reasonably satisfactory
to Agent and in compliance with FIRREA, of the fair market value of the owned
Real Estate of the Credit Parties and (z) permit Agent to conduct a field
examination performed by Agent or its representatives of the business,
operations, financial condition and assets of the Credit Parties.
(ii) From time to time, if Agent or any Lender
determines that obtaining appraisals is necessary in order for Agent or such
Lender to comply with Applicable Laws or regulations, Agent will, at Borrower's
expense, obtain appraisal reports in form and substance and from appraisers
reasonably satisfactory to Agent stating the then current fair market values of
all or any portion of the Real Estate owned by Credit Parties. In addition to
the foregoing, at Borrower's expense, at any time while and so long as an Event
of Default shall have occurred and be continuing, and in the absence of an Event
of Default not more than once during each calendar year (or, the case of
Inventory, twice during any calendar year in which Borrowing Availability is
less than $3,000,000 at any time), Agent may obtain appraisal reports in form
and substance and from appraisers reasonably satisfactory to Agent stating the
then current Net Orderly Liquidation Value or fair market value, as applicable,
of all or any portion of the Real Estate, M&E or Inventory owned by any of the
Credit Parties, as applicable.
(iii) Borrower, at its own expense, shall deliver to
Agent at the end of each Fiscal Year of Borrower or more frequently upon Agent's
request, the results of each physical verification, if any, that Borrower or any
of its Subsidiaries may in their discretion have made, or caused any other
Person to have made on their behalf, of all or any portion of their Inventory
(and, if an Event of Default has occurred and is continuing, Borrower shall,
upon the request of Agent, conduct, and deliver the results of, such physical
verifications as Agent may require).
(f) Projections. As soon as available and in any event no
later than thirty (30) days after the first day of each of Borrower's Fiscal
Years, Borrower will deliver Projections of Holdings and its Subsidiaries for
the forthcoming three (3) Fiscal Years and each Fiscal Month of the
forthcoming Fiscal Year.
(g) SEC Filings and Press Releases. Promptly upon their
becoming available, Borrower will deliver copies of (1) all Financial
Statements, reports, notices and proxy statements sent or made available by
Holdings or any of its Subsidiaries to their Stockholders generally in their
capacity as such, (2) all regular and periodic reports and all registration
statements and prospectuses, if any, filed by Holdings or any of its
Subsidiaries with any securities exchange or with the Securities and Exchange
Commission, any Governmental Authority or any private securities regulatory
authority, and (3) all press releases and other written statements made
available by Holdings or any of its Subsidiaries to the public concerning
developments in the business of any such Person.
(h) Events of Default, Etc. Promptly upon any officer of any
Credit Party obtaining knowledge of any of the following events or
conditions, Borrower shall deliver copies of all notices given or received by
Holdings or any of its Subsidiaries with respect to any such event or
43
condition and a certificate of Borrower's chief executive officer specifying
the nature and period of existence of such event or condition and what action
Holdings or any of its Subsidiaries has taken, is taking and proposes to take
with respect thereto: (1) any condition or event that constitutes an Event of
Default; (2) any notice that any Person has given to Borrower or any of their
Subsidiaries or any other action taken with respect to a claimed default or
event or condition of the type referred to in Section 6.1(B); or (3) any
event or condition that could reasonably be expected to result in any
Material Adverse Effect.
(i) Litigation. Promptly upon any officer of any Credit
Party obtaining knowledge of (1) the institution of any action, charge,
claim, demand, suit, proceeding, petition, governmental investigation, tax
audit or arbitration now pending or, to the knowledge of such Credit Party,
threatened in writing against or affecting any Credit Party or any of its
Subsidiaries or any property of any Credit Party or any of its Subsidiaries
("litigation") not previously disclosed by Borrower to Agent or (2) any
material development in any previously disclosed Litigation or Litigation
that was required to be disclosed which, in each case, could reasonably be
expected to have a Material Adverse Effect, Borrower will promptly give
notice thereof to Agent and provide such other information reasonably
requested by Agent as may be reasonably available to Borrower to enable Agent
and its counsel to evaluate such matter.
(j) Notice of Corporate and other Changes. Borrower shall
provide prompt written notice of (1) all jurisdictions in which a Credit
Party becomes qualified after the Closing Date to transact business, (2) any
change after the Closing Date in the jurisdiction of incorporation, federal
employer identification number, state corporate identification or
registration number or authorized and issued Stock of any Credit Party or any
Subsidiary of any Credit Party or any amendment to their articles or
certificate of incorporation, by laws, partnership agreement or other
organizational documents, (3) any Subsidiary created or acquired by any
Credit Party or any of its Subsidiaries after the Closing Date, such notice
to identify the jurisdictions of organization and qualification of such
Subsidiary and a description of the terms of, and complete list of holders
of, such Subsidiary's authorized and issued Stock, and (4) any other event
that occurs after the Closing Date which would cause any of the
representations and warranties in Section 5 of this Agreement or in any other
Loan Document to be untrue or misleading in any material respect. The
foregoing notice requirement shall not be construed to constitute consent by
any of the Lenders to any transaction or change referred to above which is
not expressly permitted by the terms of this Agreement.
(k) Compliance Certificate. Together with each delivery of
Financial Statements of Holdings and its Subsidiaries pursuant to SectionS
4.9(a) AND (b), Borrower will deliver a fully and properly completed
Compliance Certificate (in substantially the same form as Exhibit 4.9(k) (the
"Compliance Certificate") signed by Borrower's chief executive officer or
chief financial officer.
(l) Omitted.
(m) Other Information. With reasonable promptness, Borrower
will deliver such other information and data with respect to any Credit Party
or any Subsidiary of any Credit Party as from time to time may be reasonably
requested by Agent.
(n) Taxes. Borrower shall provide prompt written notice of
(i) the execution or filing with the IRS or any other Governmental Authority
of any agreement or other document extending, or having the effect of
extending, the period for assessment or collection of any Charges by any
Credit Party or any of its Subsidiaries and (ii) any agreement by any Credit
Party or any of its Subsidiaries or request directed to any Credit Party or
any of its Subsidiaries to make any adjustment
44
under IRC Section 481(a), by reason of a change in accounting method or
otherwise, which could reasonably be expected to have a Material Adverse
Effect.
4.10 Accounting Terms; Utilization of GAAP for Purposes of
Calculations Under Agreement. For purposes of this Agreement, all accounting
terms not otherwise defined herein shall have the meanings assigned to such
terms in conformity with GAAP. Financial statements and other information
furnished to Agent pursuant to Section 4.9 or any other Section (unless
specifically indicated otherwise) shall be prepared in accordance with GAAP as
in effect at the time of such preparation; provided that no Accounting Change
after the Closing Date shall affect financial covenants, standards or terms in
this Agreement; provided further that Borrower shall prepare footnotes to the
Financial Statements required to be delivered hereunder that show the
differences between the Financial Statements delivered (which reflect such
Accounting Changes) and the basis for calculating financial covenant compliance
(without reflecting such Accounting Changes).
SECTION 5.
REPRESENTATIONS AND WARRANTIES
To induce Agent and Lenders to enter into the Loan Documents, to make
Loans and to issue or cause to be issued Letters of Credit, Borrower and the
other Credit Parties executing this Agreement, jointly and severally, represent,
warrant and covenant to Agent and each Lender that the following statements are
and, after giving effect to the Related Transactions, will remain true, correct
and complete until the Termination Date with respect to all Credit Parties:
5.1 Disclosure. No representation or warranty of any Credit Party
contained in this Agreement, the Financial Statements referred to in Section 5.5
or any other document, certificate or written statement prepared by or on behalf
of any Credit Party and furnished to Agent or any Lender by or on behalf of any
such Person for use in connection with the Loan Documents contains any untrue
statement of a material fact or omitted, omits or will omit to state a material
fact necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances in which the same were made.
5.2 No Material Adverse Effect. Since January 31, 2005, there have
been no events or changes in facts or circumstances affecting any Credit Party
or any of its Subsidiaries which individually or in the aggregate have had or
could reasonably be expected to have a Material Adverse Effect and that have not
been disclosed herein or in the attached Disclosure Schedules.
5.3 No Conflict. (a) The consummation of the Related Transactions
does not and will not violate or conflict with any laws, rules, regulations or
orders of any Governmental Authority or violate, conflict with, result in a
breach of, or constitute a default (with due notice or lapse of time or both)
under any Contractual Obligation or organizational documents of any Credit Party
or any of its Subsidiaries except if such violations, conflicts, breaches or
defaults could not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect. None of the Credit Parties is an
"investment company" within the meaning of the Investment Company Act of 1940.
(b) Each Credit Party (i) is in compliance and each of its
Subsidiaries is in compliance with the requirements of all Applicable Laws,
rules, regulations and orders of any Governmental Authority and the
obligations, covenants and conditions contained in all Contractual
Obligations other than those laws, rules, regulations, orders and provisions
of such Contractual Obligations, in each case, the noncompliance with which
could not be reasonably expected to have,
45
either individually or in the aggregate, a Material Adverse Effect, and (ii)
maintains and each of its Subsidiaries maintains all licenses, qualifications
and permits referred to in Section 2.1.
5.4 Organization, Powers, Capitalization and Good Standing.
(a) Organization and Powers. Each of the Credit Parties and
each of their Subsidiaries is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization and qualified to
do business in all states where such qualification is required except where
failure to be so qualified could not reasonably be expected to have a
Material Adverse Effect. The jurisdiction of organization and all
jurisdictions in which each Credit Party is qualified to do business are set
forth on Schedule 5.4(a). Each of the Credit Parties and each of their
Subsidiaries has all requisite organizational power and authority to own and
operate its properties, to carry on its business as now conducted and
proposed to be conducted, to enter into each Related Transactions Document to
which it is a party and to incur the Obligations, grant liens and security
interests in the Collateral and carry out the Related Transactions.
(b) Capitalization. As of the Closing Date: (i) the
authorized Stock of each of the Credit Parties and each of their Subsidiaries
is as set forth on SCHEDULE 5.4(b); (ii) all issued and outstanding Stock of
each of the Credit Parties and each of their Subsidiaries is duly authorized
and validly issued, fully paid, nonassessable, free and clear of all Liens
other than those in favor of Agent for the benefit of Agent and Lenders and
Permitted Encumbrances, and such Stock was issued in compliance with all
applicable state, federal and foreign laws concerning the issuance of
securities; (iii) the identity of the holders of the Stock of each of the
Credit Parties and each of their Subsidiaries and the percentage of their
fully diluted ownership of the Stock of each of the Credit Parties and each
of their Subsidiaries is set forth on Schedule 5.4(b); and (iv) no Stock of
any Credit Party or any of their Subsidiaries, other than those described
above, are issued and outstanding. Except as provided in Schedule 5.4(b), as
of the Closing Date, there are no preemptive or other outstanding rights,
options, warrants, conversion rights or similar agreements or understandings
for the purchase or acquisition from any Credit Party or any of their
Subsidiaries of any Stock of any such entity.
(c) Binding Obligation. This Agreement is, and the other
Related Transactions Documents when executed and delivered will be, the legally
valid and binding obligations of the applicable parties thereto, each
enforceable against each of such parties, as applicable, in accordance with
their respective terms subject to bankruptcy, insolvency and similar laws
affecting creditors' rights generally.
5.5 Financial Statements and Projections. All Financial Statements
concerning Holdings and its Subsidiaries which have been or will hereafter be
furnished to Agent pursuant to this Agreement, including those listed below,
have been or will be prepared in accordance with GAAP consistently applied
(except as disclosed therein) and do or will present fairly the financial
condition of the entities covered thereby as at the dates thereof and the
results of their operations for the periods then ended, subject to, in the case
of unaudited Financial Statements, the absence of footnotes and normal year end
adjustments.
(a) The restated consolidated balance sheets at January 31,
2005 and the related statement of income of Holdings and its Subsidiaries,
for the Fiscal Year then ended, audited by Pricewaterhouse Coopers LLP.
(b) The consolidated balance sheet at November 30, 2005 and
the related statement of income of Holdings and its Subsidiaries for the ten
(10) months then ended.
46
The Projections delivered on or prior to the Closing Date and the updated
Projections delivered pursuant to Section 4.9(f) represent and will represent as
of the date thereof the good faith estimate of Borrower and its senior
management of the financial condition and operations of Borrower and its
Subsidiaries for the periods covered thereby, it being recognized that actual
results may differ from the projected results by a material amount.
5.6 Intellectual Property. Each of the Credit Parties and its
Subsidiaries owns, is licensed to use or otherwise has the right to use, all
Intellectual Property used in or necessary for the conduct of its business as
currently conducted and as proposed to be conducted that is material to the
condition (financial or other), business or operations of such Credit Party and
its Subsidiaries. All such Intellectual Property is identified on Schedule 5.6
and all such Intellectual Property owned by a Credit Party is properly
registered, filed or issued in the appropriate office and jurisdictions for such
registrations, filings or issuances. Except as disclosed in Schedule 5.6, to the
best knowledge of the Credit Parties (a) the conduct and operations of the
businesses of the Credit Parties and its Subsidiaries does not infringe,
misappropriate, dilute, violate, or otherwise impair any Intellectual Property
owned by any other Person in any material respect and (b) except as disclosed on
Schedule 5.6, no other Person has contested any right, title, or interest of any
of the Credit Parties and its Subsidiaries in, or relating to, any Intellectual
Property, other than, in each case, as cannot reasonably be expected to
materially adversely affect the Loan Documents and the transactions contemplated
therein and would no, in the aggregate, reasonably be expected to have a
Material Adverse Effect. In addition, except as disclosed in Schedule 5.6, (x)
there are no pending (or, to the knowledge of any of the Credit Parties and its
Subsidiaries, threatened) actions, investigations, suits, proceedings, audits,
claims, demands, orders, or disputes affecting any of the Credit Parties and its
Subsidiaries with respect to (y) no judgment or order regarding any such claim
has been rendered by any competent Governmental Authority, no settlement
agreement or similar Contractual Obligation has been entered into by any of the
Credit Parties and its Subsidiaries, with respect to and (z) none of the Credit
Parties and its Subsidiaries knows or has any reason to know of any valid basis
for any claim based on, any such infringement, misappropriation, dilution,
violation, or impairment or contest, other than, in each case, as cannot
reasonably be expected to materially adversely affect the Loan Documents and the
transactions contemplated therein and would not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
5.7 Investigations, Audits, Etc. As of the Closing Date, except as
set forth on Schedule 5.7, no Credit Party or any of their Subsidiaries is the
subject of any review or audit by the IRS or any governmental investigation
concerning the violation or possible violation of any law.
5.8 Employee Matters. Except as set forth on Schedule 5.8, (a) no
Credit Party or Subsidiary of a Credit Party nor any of their respective
employees is subject to any collective bargaining agreement, (b) no petition for
certification or union election is pending with respect to the employees of any
Credit Party or any of their Subsidiaries and since February 7, 2003 no union or
collective bargaining unit has sought such certification or recognition with
respect to the employees of any Credit Party or any of their Subsidiaries, (c)
there are no strikes, slowdowns, work stoppages or controversies pending or, to
the best knowledge of any Credit Party after due inquiry, threatened between any
Credit Party or any of their Subsidiaries and its respective employees, other
than employee grievances arising in the ordinary course of business which could
not reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect and (d) hours worked by and payment made to employees of
each Credit Party and each of their Subsidiaries comply in all material respects
with the Fair Labor Standards Act and each other federal, state, local or
foreign law applicable to such matters. Except as set forth on Schedule 5.8,
neither Borrower nor any of its Subsidiaries is party to a written employment
contract.
5.9 Solvency. Each of the Credit Parties and its Subsidiaries is
Solvent.
47
5.10 Litigation; Adverse Facts. Except as set forth on Schedule 5.10,
there are no judgments outstanding against any Credit Party or any of its
Subsidiaries or affecting any property of any Credit Party or any of its
Subsidiaries, nor is there any Litigation pending, or to the best knowledge of
any Credit Party threatened in writing, against any Credit Party or any of its
Subsidiaries which, in each case, could reasonably be expected to result in any
Material Adverse Effect.
5.11 Use of Proceeds; Margin Regulations. (a) No part of the proceeds
of any Loan will be used for "buying" or "carrying" "margin stock" within the
respective meanings of such terms under Regulation U of the Board of Governors
of the Federal Reserve System as now and from time to time hereafter in effect
or for any other purpose that violates the provisions of the regulations of the
Board of Governors of the Federal Reserve System. If requested by Agent, each
Credit Party will furnish to Agent and each Lender a statement to the foregoing
effect in conformity with the requirements of FR Form G 3 or FR Form U-1, as
applicable, referred to in Regulation U.
(b) Borrower shall utilize the proceeds of the Loans solely
for the Refinancing (and to pay any related transaction expenses), and for
the financing of Borrower's ordinary working capital and general corporate
needs and shall provide Agent on or prior to the Closing Date with a
description of Borrower's sources and uses of funds as of the Closing Date,
including Loans and Letter of Credit Obligations to be made or incurred on
that date, and a funds flow memorandum detailing how funds from each source
are to be transferred for particular uses.
5.12 Ownership of Property; Liens. As of the Closing Date, the real
estate ("Real Estate") listed in Schedule 5.12 constitutes all of the real
property owned, leased, subleased, or used by any Credit Party or any of its
Subsidiaries. Each of the Credit Parties and each of its Subsidiaries owns good
and marketable fee simple title to all of its owned Real Estate, and valid and
marketable leasehold interests in all of its leased Real Estate, all as
described on Schedule 5.12, and copies of all such leases or a summary of terms
thereof reasonably satisfactory to Agent have been delivered to Agent. Schedule
5.12 further describes any Real Estate with respect to which any Credit Party or
any of its Subsidiaries is a lessor, sublessor or assignor as of the Closing
Date. Each of the Credit Parties and each of its Subsidiaries also has good and
marketable title to, or valid leasehold interests in, all of its personal
property and assets. As of the Closing Date, and after giving effect to the
Related Transactions, none of the properties and assets of any Credit Party or
any of its Subsidiaries are subject to any Liens other than Permitted
Encumbrances, and there are no facts, circumstances or conditions known to any
Credit Party that may result in any Liens (including Liens arising under
Environmental Laws) other than Permitted Encumbrances against the properties or
assets of any Credit Party or any of its Subsidiaries. Each of the Credit
Parties and each of its Subsidiaries has received all deeds, assignments,
waivers, consents, nondisturbance and attornment or similar agreements, bills of
sale and other documents, and has duly effected all recordings, filings and
other actions necessary to establish, protect and perfect such Credit Party's or
Subsidiary's right, title and interest in and to all such Real Estate and other
properties and assets. Schedule 5.12 also describes any purchase options, rights
of first refusal or other similar contractual rights pertaining to any Real
Estate. As of the Closing Date, no portion of any Credit Party's or any of its
Subsidiaries' Real Estate has suffered any material damage by fire or other
casualty loss that has not heretofore been repaired and restored in all material
respects to its original condition or otherwise remedied. As of the Closing
Date, all material permits required to have been issued to enable the Real
Estate to be lawfully occupied and used for all of the purposes for which it is
currently occupied and used have been lawfully issued and are in full force and
effect.
5.13 Environmental Matters.
(a) Except as set forth in SCHEDULE 5.13, as of the Closing
Date: (i) the Real Estate is free of contamination from any Hazardous
Material except for such contamination that could not
48
reasonably be expected to have a Material Adverse Effect on the value or
marketability of such Real Estate; (ii) no Credit Party and no Subsidiary of
a Credit Party has caused or suffered to occur any Release of Hazardous
Materials on, at, in, under, above, to, from or about any of their Real
Estate that could reasonably be expected to result in a Material Adverse
Effect; (iii) the Credit Parties and their Subsidiaries are and have been in
compliance with all Environmental Laws, except for such noncompliance that
could not reasonably be expected to result in a Material Adverse Effect; (iv)
the Credit Parties and their Subsidiaries have obtained, and are in
compliance with, all Environmental Permits required by Environmental Laws for
the operations of their respective businesses as presently conducted or as
proposed to be conducted, except where the failure to so obtain or comply
with such Environmental Permits could not reasonably be expected to result in
a Material Adverse Effect, and all such Environmental Permits are valid,
uncontested and in good standing; (v) no Credit Party and no Subsidiary of a
Credit Party is involved in operations or knows of any facts, circumstances
or conditions, including any Releases of Hazardous Materials, that are likely
to result in any Environmental Liabilities of such Credit Party or Subsidiary
which could reasonably be expected to result in a Material Adverse Effect,
and no Credit Party or Subsidiary of a Credit Party has permitted any current
or former tenant or occupant of the Real Estate to engage in any such
operations; (vi) there is no Litigation arising under or related to any
Environmental Laws, Environmental Permits or Hazardous Material that seeks
damages, penalties, fines, costs or expenses or injunctive relief against, or
that alleges criminal misconduct by any Credit Party or any Subsidiary of a
Credit Party that could reasonably be expected to result in a Material
Adverse Effect; (vii) no notice has been received by any Credit Party or any
Subsidiary of a Credit Party identifying any of them as a "potentially
responsible party" or requesting information under CERCLA or analogous state
statutes, and to the knowledge of the Credit Parties, there are no facts,
circumstances or conditions that may result in any of the Credit Parties or
their Subsidiaries being identified as a "potentially responsible party"
under CERCLA or analogous state statutes; and (viii) the Credit Parties have
provided to Agent copies of all existing environmental reports, reviews and
audits and all written information pertaining to actual or potential
Environmental Liabilities, in each case relating to any of the Credit Parties
or their Subsidiaries.
(b) Each Credit Party hereby acknowledges and agrees that
Agent (i) is not now, and has not ever been, in control of any of the Real
Estate or affairs of such Credit Party or its Subsidiaries, and (ii) does not
have the capacity through the provisions of the Loan Documents or otherwise
to influence any Credit Party's or its Subsidiaries' conduct with respect to
the ownership, operation or management of any of their Real Estate or
compliance with Environmental Laws or Environmental Permits.
5.14 ERISA.
(a) Schedule 5.14 lists all Plans and separately identifies
all Pension Plans, including Title IV Plans, Multiemployer Plans and ESOPs,
including all Retiree Welfare Plans. Except with respect to Multiemployer
Plans, each Qualified Plan has been determined by the IRS to qualify under
Section 401 of the IRC, the trusts created thereunder have been determined to
be exempt from tax under the provisions of Section 501 of the IRC, and
nothing has occurred that would cause the loss of such qualification or tax
exempt status. Each Plan is in material compliance with its terms and the
applicable provisions of ERISA and the IRC, including the timely filing of
all reports required under the IRC or ERISA, including the statement required
by 29 CFR Section 2520.104 23. Neither any Credit Party nor ERISA Affiliate
has engaged in a nonexempt "prohibited transaction," as defined in Section
406 of ERISA and Section 4975 of the IRC, in connection with any Plan, that
would subject any Credit Party to a material tax on prohibited transactions
imposed by Section 502(i) of ERISA or Section 4975 of the IRC.
(b) Except as set forth in Schedule 5.14: (i) no Title IV
Plan has any Unfunded Pension Liability; (ii) no ERISA Event or event
described in Section 4062(e) of ERISA with respect to
49
any Title IV Plan has occurred or is reasonably expected to occur; (iii)
there are no pending, or to the knowledge of Borrower, threatened in writing
claims (other than claims for benefits in the normal course), sanctions,
actions or lawsuits, asserted or instituted against any Plan or any Person as
fiduciary or sponsor of any Plan; (iv) no Credit Party or ERISA Affiliate has
incurred or reasonably expects to incur any liability as a result of a
complete or partial withdrawal from a Multiemployer Plan; and (v) within the
last five years no Title IV Plan of any Credit Party or ERISA Affiliate has
been terminated, whether or not in a "standard termination" as that term is
used in Section 404(b)(1) of ERISA, nor has any Title IV Plan of any Credit
Party or ERISA Affiliate (determined at any time within the past five years)
with Unfunded Pension Liabilities been transferred outside of the "controlled
group" (within the meaning of Section 4001(a)(14) of ERISA) of any Credit
Party or ERISA Affiliate.
5.15 Brokers. No broker or finder acting on behalf of any Credit
Party or Affiliate thereof brought about the obtaining, making or closing of the
Loans or the Related Transactions, and no Credit Party or Affiliate thereof has
any obligation to any Person in respect of any finder's or brokerage fees in
connection therewith.
5.16 Deposit and Disbursement Accounts. Schedule 5.16 lists all banks
and other financial institutions at which any Credit Party maintains deposit or
securities or commodities accounts as of the Closing Date, including any
Disbursement Accounts, and such Schedule correctly identifies the name, address
and telephone number of each depository, the name in which the account is held,
a description of the purpose of the account, and the complete account number
therefor.
5.17 Agreements and Other Documents. As of the Closing Date, each
Credit Party has provided to Agent or its counsel, on behalf of Lenders,
accurate and complete copies (or summaries) of all of the following agreements
or documents to which it is subject and each of which is listed in SCHEDULE
5.17: supply agreements and purchase agreements not terminable by such Credit
Party within sixty (60) days following written notice issued by such Credit
Party and involving transactions in excess of $1,000,000 per annum; leases of
Equipment having a remaining term of one year or longer and requiring aggregate
rental and other payments in excess of $500,000 per annum; licenses and permits
held by the Credit Parties, the absence of which could reasonably be expected to
have a Material Adverse Effect; instruments and documents evidencing any
Indebtedness or Guaranteed Indebtedness of such Credit Party and any Lien
granted by such Credit Party with respect thereto (other than the Loan
Documents); and instruments and agreements evidencing the issuance of any equity
securities, warrants, rights or options to purchase equity securities of such
Credit Party.
5.18 Insurance. Schedule 5.18 lists all insurance policies of any
nature maintained, as of the Closing Date, for current occurrences by each
Credit Party, as well as a summary of the key business terms of each such policy
such as deductibles, coverage limits and term of policy.
5.19 OFAC. No Credit Party (a) is a person whose property or interest
in property is blocked or subject to blocking pursuant to any of the embargoes
or trade sanctions administered by the U.S. Department of Treasury, Office of
Foreign Assets Control, contained in 31 C.F.R. Chapter V (the "OFAC
Regulations"); (b) engages in any dealings or transactions prohibited by the
OFAC Regulations or is otherwise associated with any such person in any manner
violative of such regulations; or (c) is a person on the Specially Designated
Nationals and Blocked Persons List contained in Appendix A to the OFAC
Regulations (31 C.F.R. Chapter V, App. A), or (d) is otherwise in violation of
the limitations or prohibitions contained in the OFAC Regulations or any related
Executive Order. Each Credit Party is in compliance, in all material respects,
with the Trading With the Enemy Act, as amended, and each of the foreign assets
control regulations contained in the OFAC Regulations and any other applicable
enabling legislation or executive order relating thereto.
50
5.20 Patriot Act and Foreign Corrupt Practices Act. Each Credit Party
is in compliance, in all material respects, with the applicable provisions of
the Uniting And Strengthening America By Providing Appropriate Tools Required To
Intercept And Obstruct Terrorism (USA Patriot Act 2001). No part of the proceeds
of the Revolving Loans will be used, directly or indirectly, for any payments to
any governmental official or employee, political party, official of a political
party, candidate for political office, or anyone else acting in an official
capacity, in order to obtain, retain or direct business or obtain any improper
advantage, in violation of the United States Foreign Corrupt Practices Act of
1977, as amended.
5.21 Taxes. All federal and material state, local and foreign income
and franchise and other tax returns, reports and statements (collectively, the
Tax Returns") required to be filed by any Credit Party have been filed with the
appropriate Governmental Authorities in all jurisdictions in which such Tax
Returns are required to be filed. All such Tax Returns are true and correct in
all material respects. All Taxes, Charges and other impositions that are
reflected on such Tax Returns, or that are otherwise due and payable, have been
paid prior to the date on which any liability may be added thereto for
non-payment thereof except for amounts contested in good faith by appropriate
proceedings diligently conducted and for which adequate reserves are maintained
on the books of the appropriate Credit Party in accordance with GAAP. No Tax
Return is under audit or examination by any Governmental Authority and no
written notice of such an audit or examination or any assertion of any claim for
material Taxes has been given or made by any Governmental Authority, other than
those being contested in good faith by appropriate proceedings diligently
conducted and for which adequate reserves are maintained on the books of the
appropriate Credit Party in accordance with GAAP. Proper and accurate amounts
have been withheld by each Credit Party from their respective employees for all
periods in compliance in all material respects with the tax, social security and
unemployment withholding provisions of Applicable Law and such withholdings have
been timely paid to the respective Governmental Authorities. Except as would not
have a Material Adverse Effect, no Credit Party has participated in a
"reportable transaction" within the meaning of Treasury Regulation Section
1.6011-4(b). Except as would not have a Material Adverse Effect, no Credit Party
has been a member of an affiliated, combined or unitary group other than the
group of which a Tax Affiliate is the common parent.
SECTION 6.
DEFAULT, RIGHTS AND REMEDIES
6.1 Event of Default. "Event of Default" shall mean the occurrence
or existence of any one or more of the following:
(a) Payment. (1) Failure to pay any installment or other
payment of principal of any Loan when due, or to repay Revolving Loans to
reduce their balance to the maximum amount of Revolving Loans then permitted
to be outstanding or to reimburse any L/C Issuer for any payment made by such
L/C Issuer under or in respect of any Letter of Credit when due or (2)
failure to pay, within three (3) days after the due date, any interest on any
Loan or any other amount due under this Agreement or any of the other Loan
Documents;
(b) Default in Other Agreements. (1) Any Credit Party or any
of its Subsidiaries fails to pay when due or within any applicable grace
period any principal or interest on Indebtedness (other than the Loans) or
any Contingent Obligations or (2) breach or default of any Credit Party or
any of its Subsidiaries, or the occurrence of any condition or event, with
respect to any Indebtedness (other than the Loans) or any Contingent
Obligations, if the effect of such breach, default or occurrence is to cause
or to permit the holder or holders then to cause, Indebtedness and/or
Contingent Obligations
51
having an individual principal amount in excess of $2,000,000 or having an
aggregate principal amount in excess of $2,000,000 to become or be declared
due prior to their stated maturity;
(c) Breach of Certain Provisions; Breach of Warranty.
Failure of any Credit Party to perform or comply with any term or condition
contained in that portion of Section 2.2 relating to the Credit Parties'
obligation to maintain insurance, Section 2.3, Section 3 or Section 4 and,
solely with respect to the financial statements and reports required to be
delivered by paragraphs (a), (b), (d)(iii), (d)(iv), (e), (f) or (g) of
Section 4.9, such default is not cured within five (5) Business Days;
(d) Borrowing Base Certificate; Breach of Warranty. Any
information contained in any Borrowing Base Certificate is untrue or
incorrect in any respect (other than inadvertent, immaterial errors not
exceeding $100,000 in the aggregate in any Borrowing Base Certificate), or
any representation or warranty herein or in any Loan Document or in any
written statement, report, financial statement or certificate (other than a
Borrowing Base Certificate) made or delivered to Agent or any Lender by any
Credit Party is untrue or incorrect in any material respect (without
duplication of materiality qualifiers contained therein) as of the date when
made or deemed made;
(e) Other Defaults Under Loan Documents. Any Credit Party
defaults in the performance of or compliance with any term contained in this
Agreement or the other Loan Documents (other than occurrences described in
other provisions of this Section 6.1 for which a different grace or cure
period is specified, or for which no cure period is specified and which
constitute immediate Events of Default) and such default is not remedied or
waived within thirty (30) days after the earlier of (1) receipt by Borrower
of notice from Agent or Requisite Lenders of such default or (2) actual
knowledge of Borrower or any other Credit Party of such default;
(f) Involuntary Bankruptcy; Appointment of Receiver, Etc.
(1) A court enters a decree or order for relief with respect to any Credit
Party in an involuntary case under the Bankruptcy Code, which decree or order
is not stayed or other similar relief is not granted under any applicable
federal or state law; or (2) the continuance of any of the following events
for forty-five (45) days unless dismissed, bonded or discharged: (a) an
involuntary case is commenced against any Credit Party, under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect; or
(b) a decree or order of a court for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having similar
powers over any Credit Party, or over all or a substantial part of its
property, is entered; or (c) a receiver, trustee or other custodian is
appointed without the consent of a Credit Party, for all or a substantial
part of the property of the Credit Party;
(g) Voluntary Bankruptcy; Appointment of Receiver, Etc. (1)
any Credit Party commences a voluntary case under the Bankruptcy Code, or
consents to the entry of an order for relief in an involuntary case or to the
conversion of an involuntary case to a voluntary case under any such law or
consents to the appointment of or taking possession by a receiver, trustee or
other custodian for all or a substantial part of its property; or (2) any
Credit Party makes any general assignment for the benefit of creditors; or
(3) the Board of Directors of any Credit Party adopts any resolution or
otherwise authorizes action to approve any of the actions referred to in this
Section 6.1(G);
(h) Judgment and Attachments. Any money judgment, writ or
warrant of attachment, or similar process (other than those described
elsewhere in this Section 6.1) involving (1) an amount in any individual case
in excess of $2,000,000 or (2) an amount in the aggregate at any time in
excess of $2,000,000 (in either case to the extent not adequately covered by
insurance in Agent's sole discretion as to which the insurance company has
acknowledged coverage) is entered or filed against one or more of the Credit
Parties or any of their respective assets and remains undischarged,
52
unvacated, unbonded or unstayed for a period of thirty (30) days or in any
event later than five (5) Business Days prior to the date of any proposed
sale thereunder;
(i) Dissolution. Any order, judgment or decree is entered
against any Credit Party decreeing the dissolution or split up of such Credit
Party and such order remains undischarged or unstayed for a period in excess
of fifteen (15) days;
(j) Insolvency. Any Credit Party ceases to be Solvent,
fails to pay its debts as they become due or admits in writing its present or
prospective inability to pay its debts as they become due;
(k) Invalidity of Loan Documents. Any of the Loan Documents
for any reason, other than a partial or full release in accordance with the
terms thereof, ceases to be in full force and effect or is declared to be
null and void, or any Credit Party denies that it has any further liability
under any Loan Documents to which it is party, or gives notice to such
effect;
(l) Damage; Casualty. Any event occurs, whether or not
insured or insurable, as a result of which revenue-producing activities cease
or are substantially curtailed at any facility of any Credit Party generating
more than 20% of the consolidated revenues of Holdings and its Subsidiaries
for the Fiscal Year preceding such event and such cessation or curtailment
continues for more than thirty (30) days following the last day for which a
Credit Party has a claim under its business interruption insurance policy in
respect of such event;
(m) Omitted.
(n) Change of Control. A Change of Control occurs; or
(o) Subordinated Indebtedness. The failure of any Credit
Party or any creditor of Borrower or any of its Subsidiaries to comply with
the terms of any subordination or intercreditor agreement or any
subordination provisions of any note or other document running to the benefit
of Agent or Lenders, or if any such document becomes null and void or any
party denies further liability under any such document or provides notice to
that effect.
6.2 Suspension or Termination of Commitments. Upon the occurrence
and during the continuance of any Event of Default, Agent may, and at the
request of Requisite Lenders Agent shall, without notice or demand, immediately
suspend or terminate all or any portion of Lenders' obligations to make
additional Loans or issue or cause to be issued Letters of Credit under the
Revolving Loan Commitment.
6.3 Acceleration and Other Remedies. Upon the occurrence of any
Event of Default described in Sections 6.1(f) or 6.1(g), the Commitments shall
be immediately terminated and all of the Obligations, including the Revolving
Loans, shall automatically become immediately due and payable, without
presentment, demand, protest, notice of intent to accelerate, notice of
acceleration or other requirements of any kind, all of which are hereby
expressly waived (including for purposes of Section 10) by Borrower, and the
Commitments shall thereupon terminate. Upon the occurrence and during the
continuance of any other Event of Default, Agent may, and at the request of the
Requisite Lenders, Agent shall, by written notice to Borrower (a) reduce the
aggregate amount of the Commitments from time to time, (b) declare all or any
portion of the Loans and all or any portion of the other Obligations to be, and
the same shall forthwith become, immediately due and payable together with
accrued interest thereon, (c) terminate all or any portion of the obligations of
Agent, L/C Issuers and Lenders to make Revolving Credit Advances and issue
Letters of Credit, (d) demand that Borrower immediately deliver cash (or, with
53
the consent of Agent in each instance, back to back letters of credit in form
and issued by a Person acceptable to Agent) to Agent for the benefit of L/C
Issuers (and Borrower shall then immediately so deliver) in an amount equal to
105% of the aggregate outstanding Letter of Credit Obligations and (e) exercise
any other remedies which may be available under the Loan Documents or Applicable
Law. Borrower hereby grants to Agent, for the benefit of L/C Issuers and each
Lender with a participation in any Letters of Credit then outstanding, a
security interest in such cash collateral to secure all of the Letter of Credit
Obligations. Any such cash collateral shall be made available by Agent to L/C
Issuers to reimburse L/C Issuers for payments of drafts drawn under such Letters
of Credit and any Fees, Charges and expenses of L/C Issuers with respect to such
Letters of Credit and the unused portion thereof, after all such Letters of
Credit shall have expired or been fully drawn upon, shall be applied to repay
any other Obligations. After all such Letters of Credit shall have expired or
been fully drawn upon and all Obligations shall have been satisfied and paid in
full, the balance, if any, of such cash collateral shall be returned to
Borrower. Borrower shall from time to time execute and deliver to Agent such
further documents and instruments as Agent may request with respect to such cash
collateral.
6.4 Performance by Agent. If any Credit Party shall fail to perform
any covenant, duty or agreement contained in any of the Loan Documents, upon
five (5) days prior written notice to Borrowers (except that no such notice
shall be required for the purchase of insurance permitted by Section 2.2(a)),
Agent may perform or attempt to perform such covenant, duty or agreement on
behalf of such Credit Party after the expiration of any cure or grace periods
set forth herein, and Agent will use reasonable efforts to provide written
notice to the applicable Credit Party of any such action taken. In such event,
such Credit Party shall, at the request of Agent, promptly pay any amount
reasonably expended by Agent in such performance or attempted performance to
Agent, together with interest thereon at the highest rate of interest in effect
upon the occurrence of an Event of Default as specified in Section 1.2(d) from
the date of such expenditure until paid. Notwithstanding the foregoing, it is
expressly agreed that Agent shall not have any liability or responsibility for
the performance of any obligation of any Credit Party under this Agreement or
any other Loan Document.
6.5 Application of Proceeds. Notwithstanding anything to the
contrary contained in this Agreement, upon the occurrence and during the
continuance of an Event of Default, (a) Borrower irrevocably waives the right to
direct the application of any and all payments at any time or times thereafter
received by Agent from or on behalf of Borrower, and Agent shall have the
continuing and exclusive right to apply and to reapply any and all payments
received at any time or times after the occurrence and during the continuance of
an Event of Default against the Obligations in such manner as Agent may deem
advisable notwithstanding any previous application by Agent and (b) in the
absence of a specific determination by Agent with respect thereto, the proceeds
of any sale of, or other realization upon, all or any part of the Collateral
shall be applied: first, to all Fees, costs and expenses incurred by or owing to
Agent and any Lender with respect to this Agreement, the other Loan Documents or
the Collateral; second, to accrued and unpaid interest on the Obligations
(including any interest which but for the provisions of the Bankruptcy Code,
would have accrued on such amounts); third, to the principal amount of the
Obligations outstanding (other than Obligations owed to any Lender under an
Interest Rate Agreement); and fourth to any other obligations of Borrower owing
to Agent or any Lender under the Loan Documents or any Interest Rate Agreement.
Any balance remaining shall be delivered to Borrower or to whomever may be
lawfully entitled to receive such balance or as a court of competent
jurisdiction may direct.
SECTION 7.
CONDITIONS TO LOANS
The obligations of Lenders and L/C Issuers to make Loans and to issue or
cause to be issued Letters of Credit are subject to satisfaction or waiver of
all of the applicable conditions set forth below.
54
7.1 Conditions to Initial Loans. The obligations of Lenders and L/C
Issuers to make the initial Loans and to issue or cause to be issued Letters of
Credit on the Closing Date are, in addition to the conditions precedent
specified in Section 7.2, subject to the delivery of all documents listed on,
the taking of all actions set forth on and the satisfaction of all other
conditions precedent listed in the Closing Checklist attached hereto as annex C,
all in form and substance, or in a manner, reasonably satisfactory to Agent and
Lenders.
7.2 Conditions to All Loans. Except as otherwise expressly provided
herein, no Lender or L/C Issuer shall be obligated to fund any Advance or incur
any Letter of Credit Obligation, if, as of the date thereof (the "Funding
Date"):
(a) any representation or warranty by any Credit Party
contained herein or in any other Loan Document is untrue or incorrect in any
material respect (without duplication of any materiality qualifier contained
therein) as of such date, except to the extent that such representation or
warranty expressly relates to an earlier date, and Agent or Requisite Lenders
have determined not to make such Advance or incur such Letter of Credit
Obligation as a result of the fact that such warranty or representation is
untrue or incorrect;
(b) any Default or Event of Default has occurred and is
continuing or would result after giving effect to any Advance (or the
incurrence of any Letter of Credit Obligation), and Agent or Requisite
Lenders shall have determined not to make any Advance or incur any Letter of
Credit Obligation as a result of that Default or Event of Default; or
(c) after giving effect to any Advance (or the incurrence
of any Letter of Credit Obligations), the outstanding amount of the aggregate
Revolving Loan would exceed remaining Borrowing Availability (except as
provided in Section 1.1(a)(ii)).
The request and acceptance by Borrower of the proceeds of any Advance, the
incurrence of any Letter of Credit Obligations or the conversion or continuation
of any Loan into, or as, a LIBOR Loan shall be deemed to constitute, as of the
date thereof, a representation and warranty by Borrower that the conditions in
this Section 7.2 have been satisfied.
SECTION 8.
ASSIGNMENT AND PARTICIPATION
8.1 Assignment and Participations.
(a) Subject to the terms of this Section 8.1, any Lender may
make an assignment to a Qualified Assignee of, or sale of participations in,
at any time or times, the Loan Documents, Loans, Letter of Credit Obligations
and any Commitment or any portion thereof or interest therein, including any
Lender's rights, title, interests, remedies, powers or duties thereunder. Any
assignment by a Lender shall: (i) require the consent of Agent (which consent
shall not be unreasonably withheld or delayed with respect to a Qualified
Assignee) and the execution of an assignment agreement (an "Assignment
Agreement" substantially in the form attached hereto as Exhibit 8.1 and
otherwise in form and substance reasonably satisfactory to, and acknowledged
by, Agent); (ii) be conditioned on such assignee Lender representing to the
assigning Lender and Agent that it is purchasing the applicable Loans to be
assigned to it for its own account, for investment purposes and not with a
view to the distribution thereof; (iii) except as otherwise agreed by
Borrower (which agreement shall not be required while an Event of Default is
continuing) and Agent after giving effect to any such partial assignment, the
assignee Lender shall have Commitments in an amount at least equal to
$5,000,000 and the assigning Lender shall have retained Commitments in an
amount at least equal to $5,000,000 ; (iv)
55
require a payment to Agent of an assignment fee of $3,500 and (v) so long as
no Event of Default has occurred and is continuing, require the consent of
Borrower, which shall not be unreasonably withheld or delayed.
Notwithstanding the above, Agent may in its sole and absolute discretion
permit any assignment by a Lender to a Person or Persons that are not
Qualified Assignees but such assignment shall nonetheless require the consent
of Borrower to the extent required above. In the case of an assignment by a
Lender under this Section 8.1, the assignee shall have, to the extent of such
assignment, the same rights, benefits and obligations as all other Lenders
hereunder. The assigning Lender shall be relieved of its obligations
hereunder with respect to its Commitments or assigned portion thereof from
and after the date of such assignment. Borrower hereby acknowledges and
agrees that any assignment shall give rise to a direct obligation of Borrower
to the assignee and that the assignee shall be considered to be a "Lender."
In all instances, each Lender's liability to make Loans hereunder shall be
several and not joint and shall be limited to such Lender's Pro Rata Share of
the applicable Commitment. In the event Agent or any Lender assigns or
otherwise transfers all or any part of the Obligations, Agent or any such
Lender shall so notify Borrower and Borrower shall, upon the request of Agent
or such Lender, execute new Notes in exchange for the Notes, if any, being
assigned. Notwithstanding the foregoing provisions of this Section 8.1(a),
(a) any Lender may at any time pledge the Obligations held by it and such
Lender's rights under this Agreement and the other Loan Documents to a
Federal Reserve Bank, (b) any Lender that is an investment fund may assign
the Obligations held by it and such Lender's rights under this Agreement and
the other Loan Documents to another investment fund managed by the same
investment advisor or pledge such Obligations and rights to trustee for the
benefit of its investors and (c) any Lender may assign the Obligations to an
Affiliate of such Lender or to a Person that is a Lender prior to the date of
such assignment.
(b) Any participation by a Lender of all or any part of its
Commitments shall be made with the understanding that all amounts payable by
Borrower hereunder shall be determined as if that Lender had not sold such
participation, and that the holder of any such participation shall not be
entitled to require such Lender to take or omit to take any action hereunder
except actions directly affecting (i) any reduction in the principal amount
of, or interest rate or Fees payable with respect to, any Loan in which such
holder participates, (ii) any extension of the scheduled amortization of the
principal amount of any Loan in which such holder participates or the final
maturity date thereof, and (iii) any release of all or substantially all of
the Collateral (other than in accordance with the terms of this Agreement,
the Collateral Documents or the other Loan Documents). Solely for purposes of
Sections 1.10, 1.11, 8.3 and 9.1, Borrower acknowledges and agrees that a
participation shall give rise to a direct obligation of Borrower to the
participant and the participant shall be considered to be a "Lender." Except
as set forth in the preceding sentence no Borrower or any other Credit Party
shall have any obligation or duty to any participant. Neither Agent nor any
Lender (other than the Lender selling a participation) shall have any duty to
any participant and may continue to deal solely with the Lender selling a
participation as if no such sale had occurred. A participant shall not be
entitled to receive any greater payment under Sections 1.10, 1.11 and 9.1
than the applicable Lender would have been entitled to receive with respect
to the participation sold to such participant, unless the sale of the
participation to such participant is made with the Borrower's prior written
consent or while an Event of Default is continuing.
(c) Except as expressly provided in this Section 8.1, no
Lender shall, as between Borrower and that Lender, or Agent and that Lender,
be relieved of any of its obligations hereunder as a result of any sale,
assignment, transfer or negotiation of, or granting of participation in, all
or any part of the Loans, the Notes or other Obligations owed to such Lender.
(d) Each Credit Party shall assist each Lender permitted to
sell assignments or participations under this Section 8.1 as required to
enable the assigning or selling Lender to effect any such assignment or
participation, including the execution and delivery of any and all
agreements, notes
56
and other documents and instruments as shall be requested and the prompt
preparation of informational materials for, and the participation of
management in meetings with, potential assignees or participants, all on a
timetable established by Agent. Each Credit Party executing this Agreement
shall certify the correctness, completeness and accuracy of all descriptions
of the Credit Parties and their respective affairs contained in any selling
materials provided by it and all other information provided by it and
included in such materials, except that any Projections delivered by Borrower
shall only be certified by Borrower as having been prepared by Borrower in
compliance with the representations contained in Section 5.5.
(e) A Lender may furnish any information concerning Credit
Parties in the possession of such Lender from time to time to assignees and
participants (including prospective assignees and participants); provided
that such Lender shall obtain from assignees or participants confidentiality
covenants substantially equivalent to those contained in Section 9.13.
(f) Registration. The Agent shall, on behalf of and acting
solely for this purpose as the agent of the Borrower, maintain, or cause to
be maintained a copy of each Assignment Agreement delivered to and accepted
by it and a register (the "Register") for the recordation of the names and
addresses of the Lenders and the principal amount of the Loans (and stated
interest thereon) (the "Registered Loans"). The entries in the Register shall
be conclusive and binding for all purposes, absent manifest error. The
Borrower, the Agent and the Lenders shall treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement, including, without limitation, the right to receive payments of
principal and interest hereunder, notwithstanding notice to the contrary.
Copies of the Register shall be available for inspection by the Borrower at
any reasonable time and from time to time upon reasonable prior notice. Upon
its receipt of an Assignment Agreement executed by an assigning Lender and an
assignee, together with any Note subject to such assignment, the Agent shall,
if the Agent and the Borrower consent to such assignment, (i) accept such
Assignment Agreement, (ii) record the information contained therein in the
Register and (iii) issue one or more new Notes in the same aggregate
principal amount as the principal amount of the surrendered Note.
8.2 Agent.
(a) Appointment. Each Lender hereby designates and appoints
GE Capital as its Agent under this Agreement and the other Loan Documents,
and each Lender hereby irrevocably authorizes Agent to execute and deliver
the Collateral Documents and to take such action or to refrain from taking
such action on its behalf under the provisions of this Agreement and the
other Loan Documents and to exercise such powers as are set forth herein or
therein, together with such other powers as are reasonably incidental
thereto. Agent is authorized and empowered to amend, modify, or waive any
provisions of this Agreement or the other Loan Documents on behalf of Lenders
subject to the requirement that certain of Lenders' consent be obtained in
certain instances as provided in this Section 8.2 and Section 9.2. The
provisions of this Section 8.2 are solely for the benefit of Agent and
Lenders and neither Borrower nor any other Credit Party shall have any rights
as a third party beneficiary of any of the provisions hereof. In performing
its functions and duties under this Agreement, Agent shall act solely as
agent of Lenders and does not assume and shall not be deemed to have assumed
any obligation toward or relationship of agency or trust with or for Borrower
or any other Credit Party. Agent may perform any of its duties hereunder, or
under the Loan Documents, by or through its agents or employees.
(b) Nature of Duties. The duties of Agent shall be
mechanical and administrative in nature. Agent shall not have by reason of
this Agreement a fiduciary relationship in respect of any Lender. Nothing in
this Agreement or any of the Loan Documents, express or implied, is intended
to or shall be construed to impose upon Agent any obligations in respect of
this Agreement or any of the
57
Loan Documents except as expressly set forth herein or therein. Each Lender
shall make its own independent investigation of the financial condition and
affairs of each Credit Party in connection with the extension of credit
hereunder and shall make its own appraisal of the creditworthiness of each
Credit Party, and Agent shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any credit or
other information with respect thereto (other than as expressly required
herein). If Agent seeks the consent or approval of any Lenders to the taking
or refraining from taking any action hereunder, then Agent shall send notice
thereof to each Lender. Agent shall promptly notify each Lender any time that
the Requisite Lenders or Supermajority Revolving Lenders have instructed
Agent to act or refrain from acting pursuant hereto.
(c) Rights, Exculpation, Etc. Neither Agent nor any of its
officers, directors, employees or agents shall be liable to any Lender for
any action taken or omitted by them hereunder or under any of the Loan
Documents, or in connection herewith or therewith, except that Agent shall be
liable to the extent of its own gross negligence or willful misconduct as
determined by a final non-appealable order by a court of competent
jurisdiction. Agent shall not be liable for any apportionment or distribution
of payments made by it in good faith and if any such apportionment or
distribution is subsequently determined to have been made in error the sole
recourse of any Lender to whom payment was due but not made, shall be to
recover from other Lenders any payment in excess of the amount to which they
are determined to be entitled (and such other Lenders hereby agree to return
to such Lender any such erroneous payments received by them). In no event
shall Agent be liable for punitive, special, consequential, incidental,
exemplary or other similar damages. In performing its functions and duties
hereunder, Agent shall exercise the same care which it would in dealing with
loans for its own account, but neither Agent nor any of its agents or
representatives shall be responsible to any Lender for any recitals,
statements, representations or warranties herein or for the execution,
effectiveness, genuineness, validity, enforceability, collectibility, or
sufficiency of this Agreement or any of the Loan Documents or the
transactions contemplated thereby, or for the financial condition of any
Credit Party. Agent shall not be required to make any inquiry concerning
either the performance or observance of any of the terms, provisions or
conditions of this Agreement or any of the Loan Documents or the financial
condition of any Credit Party, or the existence or possible existence of any
Default or Event of Default. Agent may at any time request instructions from
Requisite Lenders, Supermajority Revolving Lenders or all affected Lenders
with respect to any actions or approvals which by the terms of this Agreement
or of any of the Loan Documents Agent is permitted or required to take or to
grant. If such instructions are promptly requested, Agent shall be absolutely
entitled to refrain from taking any action or to withhold any approval and
shall not be under any liability whatsoever to any Person for refraining from
any action or withholding any approval under any of the Loan Documents until
it shall have received such instructions from the Requisite Lenders,
Supermajority Revolving Lenders or such other portion of the Lenders as shall
be prescribed by this Agreement. Without limiting the foregoing, no Lender
shall have any right of action whatsoever against Agent as a result of Agent
acting or refraining from acting under this Agreement or any of the other
Loan Documents in accordance with the instructions of Requisite Lenders,
Supermajority Revolving Lenders or all affected Lenders, as applicable; and,
notwithstanding the instructions of Requisite Lenders, Supermajority
Revolving Lenders or all affected Lenders, as applicable, Agent shall have no
obligation to take any action if it believes, in good faith, that such action
is deemed to be illegal by Agent or exposes Agent to any liability for which
it has not received satisfactory indemnification in accordance with Section
8.2(e).
(d) Reliance. Agent shall be entitled to rely, and shall be
fully protected in relying, upon any written or oral notices, statements,
certificates, orders or other documents or any telephone message or other
communication (including any writing, telex, fax or telegram) believed by it
in good faith to be genuine and correct and to have been signed, sent or made
by the proper Person, and with respect to all matters pertaining to this
Agreement or any of the Loan Documents and its
58
duties hereunder or thereunder. Agent shall be entitled to rely upon the
advice of legal counsel, independent accountants, and other experts selected
by Agent in its sole discretion.
(e) Indemnification. Lenders will reimburse and indemnify
Agent for and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including, without
limitation, attorneys' fees and expenses), advances or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against Agent in any way relating to or arising out of this Agreement or any
of the Loan Documents or any action taken or omitted by Agent under this
Agreement or any of the Loan Documents, in proportion to each Lender's Pro
Rata Share, but only to the extent that any of the foregoing is not
reimbursed by Borrower; provided, however, that no Lender shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses, advances or disbursements to the
extent resulting from Agent's gross negligence or willful misconduct as
determined by a final non-appealable order by a court of competent
jurisdiction. If any indemnity furnished to Agent for any purpose shall, in
the opinion of Agent, be insufficient or become impaired, Agent may call for
additional indemnity and cease, or not commence, to do the acts indemnified
against even if so directed by the Requisite Lenders, Supermajority Revolving
Lenders or such other portion of the Lenders as shall be prescribed by this
Agreement until such additional indemnity is furnished. The obligations of
Lenders under this Section 8.2(e) shall survive the payment in full of the
Obligations and the termination of this Agreement.
(f) GE Capital Individually. With respect to its Commitments
hereunder, GE Capital shall have and may exercise the same rights and powers
hereunder and is subject to the same obligations and liabilities as and to
the extent set forth herein for any other Lender. The terms "Lenders",
"Requisite Lenders", "Supermajority Revolving Lenders" or any similar terms
shall, unless the context clearly otherwise indicates, include GE Capital in
its individual capacity as a Lender or one of the Requisite Lenders or
Supermajority Revolving Lenders. GE Capital, either directly or through
strategic affiliations, may lend money to, acquire equity or other ownership
interests in, provide advisory services to and generally engage in any kind
of banking, trust or other business with any Credit Party as if it were not
acting as Agent pursuant hereto and without any duty to account therefor to
Lenders. GE Capital, either directly or through strategic affiliations, may
accept fees and other consideration from any Credit Party for services in
connection with this Agreement or otherwise without having to account for the
same to Lenders.
(g) Successor Agent.
(i) Resignation. Agent may resign from the
performance of all its agency functions and duties hereunder at any time by
giving at least thirty (30) Business Days' prior written notice to Borrower and
Lenders. Such resignation shall take effect upon the acceptance by a successor
Agent of appointment pursuant to clause (ii) below or as otherwise provided in
clause (ii) below.
(ii) Appointment of Successor. Upon any such notice
of resignation pursuant to clause (i) above, Requisite Lenders shall appoint a
successor Agent which, unless an Event of Default has occurred and is
continuing, shall be reasonably acceptable to Borrower. If a successor Agent
shall not have been so appointed within the thirty (30) Business Day period
referred to in clause (i) above, the retiring Agent, upon notice to Borrower,
shall then appoint a successor Agent who shall serve as Agent until such time,
if any, as Requisite Lenders appoint a successor Agent as provided above.
(iii) Successor Agent. Upon the acceptance of any
appointment as Agent under the Loan Documents by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
59
Agent shall be discharged from its duties and obligations under the Loan
Documents. After any retiring Agent's resignation as Agent, the provisions of
this Section 8.2 shall continue to inure to its benefit as to any actions taken
or omitted to be taken by it in its capacity as Agent.
(h) Collateral Matters.
(i) Release of Collateral. Lenders hereby
irrevocably authorize Agent, at its option and in its discretion, to release any
Lien granted to or held by Agent upon any Collateral (x) upon termination of the
Commitments and payment and satisfaction of all Obligations (other than
Contingent Indemnification Obligations to the extent no claims giving rise
thereto have been asserted) or (y) constituting property being sold or disposed
of if Borrower certifies to Agent that the sale or disposition is made in
compliance with the provisions of this Agreement (and Agent may rely in good
faith conclusively on any such certificate, without further inquiry).
(ii) Confirmation of Authority; Execution of
Releases. Without in any manner limiting Agent's authority to act without any
specific or further authorization or consent by Lenders (as set forth in Section
8.2(h)(i)), each Lender agrees to confirm in writing, upon request by Agent or
Borrower, the authority to release any Collateral conferred upon Agent under
clauses (x) and (y) of Section 8.2(h)(i). Upon receipt by Agent of any required
confirmation from the Requisite Lenders of its authority to release any
particular item or types of Collateral, and upon at least ten (10) Business
Days' prior written request by Borrower, Agent shall (and is hereby irrevocably
authorized by Lenders to) execute such documents as may be necessary to evidence
the release of the Liens granted to Agent upon such Collateral; provided,
however, that (x) Agent shall not be required to execute any such document on
terms which, in Agent's reasonable opinion, would expose Agent to liability or
create any obligation or entail any consequence other than the release of such
Liens without recourse or warranty, and (y) such release shall not in any manner
discharge, affect or impair the Obligations or any Liens upon (or obligations of
any Credit Party, in respect of), all interests retained by any Credit Party,
including the proceeds of any sale, all of which shall continue to constitute
part of the Collateral.
(iii) Absence of Duty. Agent shall have no obligation
whatsoever to any Lender or any other Person to assure that the property covered
by the Collateral Documents exists or is owned by Borrower or any other Credit
Party or is cared for, protected or insured or has been encumbered or that the
Liens granted to Agent 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 in this Section 8.2(h) or
in any of the Loan Documents, it being understood and agreed that in respect of
the property covered by the Collateral Documents or any act, omission or event
related thereto, Agent may act in any manner it may deem appropriate, in its
discretion, given Agent's own interest in property covered by the Collateral
Documents as one of the Lenders and that Agent shall have no duty or liability
whatsoever to any of the other Lenders, provided that Agent shall exercise the
same care which it would in dealing with loans for its own account.
(i) Agency for Perfection. Agent and each Lender hereby
appoint each other Lender as agent for the purpose of perfecting Agent's
security interest in assets which, in accordance with the Code in any
applicable jurisdiction, can be perfected by possession or control. Should
any Lender (other than Agent) obtain possession or control of any such
assets, such Lender shall notify Agent thereof, and, promptly upon Agent's
request therefor, shall deliver such assets to Agent or in accordance with
Agent's instructions or transfer control to Agent in accordance with Agent's
instructions. Each Lender agrees that it will not have any right individually
to enforce or seek to enforce any Collateral Document or to realize upon any
collateral security for the Loans unless
60
instructed to do so by Agent in writing, it being understood and agreed that
such rights and remedies may be exercised only by Agent.
(j) Notice 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 and
Fees required to be paid to Agent for the account of Lenders, unless Agent
shall have received written notice from a Lender or Borrower referring to
this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default". Agent will use reasonable efforts to
notify each Lender of its receipt of any such notice, unless such notice is
with respect to defaults in the payment of principal, interest and fees, in
which case Agent will notify each Lender of its receipt of such notice. Agent
shall take such action with respect to such Default or Event of Default as
may be requested by Requisite Lenders in accordance with Section 6. 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 or in
the best interests of Lenders.
(k) Lender Actions Against Collateral. Each Lender agrees
that it will not take any action, nor institute any actions or proceedings,
with respect to the Loans, against Borrower or any Credit Party hereunder or
under the other Loan Documents or against any of the Real Estate encumbered
by Mortgages without the consent of the Requisite Lenders. With respect to
any action by Agent to enforce the rights and remedies of Agent and the
Lenders under this Agreement and the other Loan Documents, each Lender hereby
consents to the jurisdiction of the court in which such action is maintained,
and agrees to deliver its Notes to Agent to the extent necessary to enforce
the rights and remedies of Agent for the benefit of the Lenders under the
Mortgages in accordance with the provisions hereof.
8.3 Set Off and Sharing of Payments. In addition to any rights now
or hereafter granted under Applicable Law and not by way of limitation of any
such rights, during the continuance of any Event of Default, each Lender is
hereby authorized by Borrower at any time or from time to time, with reasonably
prompt subsequent notice to Borrower (any prior or contemporaneous notice being
hereby expressly waived) to set off and to appropriate and to apply any and all
(A) balances held by such Lender at any of its offices for the account of
Borrower or any of its Subsidiaries (regardless of whether such balances are
then due to Borrower or its Subsidiaries) (other than with respect to tax
withholding accounts, payroll accounts or employee benefit accounts, provided
that such accounts are used solely for the purpose of holding tax withholdings,
payroll funds and employee benefit funds, respectively, and such payroll
accounts are zero balance accounts), and (B) other property at any time held or
owing by such Lender to or for the credit or for the account of Borrower or any
of its Subsidiaries, against and on account of any of the Obligations; except
that no Lender shall exercise any such right without the prior written consent
of Agent. Any Lender exercising a right to set off shall purchase for cash (and
the other Lenders shall sell) interests in each of such other Lender's Pro Rata
Share of the Obligations as would be necessary to cause all Lenders to share the
amount so set off with each other Lender in accordance with their respective Pro
Rata Shares. Borrower agrees, to the fullest extent permitted by law, that any
Lender may exercise its right to set off with respect to amounts in excess of
its Pro Rata Share of the Obligations and upon doing so shall deliver such
amount so set off to the Agent for the benefit of all Lenders in accordance with
their Pro Rata Shares.
8.4 Disbursement of Funds. Agent may, on behalf of Lenders, disburse
funds to Borrower for Loans requested. Each Lender shall reimburse Agent on
demand for all funds disbursed on its behalf by Agent, or if Agent so requests,
each Lender will remit to Agent its Pro Rata Share of any Loan before Agent
disburses same to Borrower. If Agent elects to require that each Lender make
funds available to Agent prior to a disbursement by Agent to Borrower, Agent
shall advise each Lender by telephone or fax
61
of the amount of such Lender's Pro Rata Share of the Loan requested by Borrower
no later than 1:00 p.m. (New York time) on the Funding Date applicable thereto,
and each such Lender shall pay Agent such Lender's Pro Rata Share of such
requested Loan, in same day funds, by wire transfer to Agent's account on such
Funding Date. If any Lender fails to pay the amount of its Pro Rata Share within
one (1) Business Day after Agent's demand, Agent shall promptly notify Borrower,
and Borrower shall immediately repay such amount to Agent. Any repayment
required pursuant to this Section 8.4 shall be without premium or penalty.
Nothing in this Section 8.4 or elsewhere in this Agreement or the other Loan
Documents, including the provisions of Section 8.5, shall be deemed to require
Agent to advance funds on behalf of any Lender or to relieve any Lender from its
obligation to fulfill its commitments hereunder or to prejudice any rights that
Agent or Borrower may have against any Lender as a result of any default by such
Lender hereunder.
8.5 Disbursements of Advances; Payment.
(a) Advances; Payments.
(i) Revolving Lenders shall refund or participate in
the Swing Line Loan in accordance with clauses (iii) and (iv) of Section 1.1(c).
If the Swing Line Lender declines to make a Swing Line Loan or if Swing Line
Availability is zero, Agent shall notify Revolving Lenders, promptly after
receipt of a Notice of Revolving Credit Advance and in any event prior to 1:00
p.m. (New York time) on the date such Notice of a Revolving Credit Advance is
received, by fax, telephone or other similar form of transmission. Each
Revolving Lender shall make the amount of such Lender's Pro Rata Share of such
Revolving Credit Advance available to Agent in same day funds by wire transfer
to Agent's account as set forth in Section 1.1(e) not later than 3:00 p.m. (New
York time) on the requested Funding Date in the case of an Index Rate Loans and
not later than 11:00 a.m. (New York time) on the requested Funding Date in the
case of a LIBOR Loan. After receipt of such wire transfers (or, in the Agent's
sole discretion, before receipt of such wire transfers), subject to the terms
hereof, Agent shall make the requested Revolving Credit Advance to Borrower as
designated by Borrower in the Notice of Revolving Credit Advance. All payments
by each Revolving Lender shall be made without setoff, counterclaim or deduction
of any kind.
(ii) At least once each calendar week or more
frequently at Agent's election (each, a "Settlement Date"), Agent shall advise
each Lender by telephone or fax of the amount of such Lender's Pro Rata Share of
principal, interest and Fees paid for the benefit of Lenders with respect to
each applicable Loan. Provided that each Lender has funded all payments and
Advances required to be made by it and purchased all participations required to
be purchased by it under this Agreement and the other Loan Documents as of such
Settlement Date, Agent shall pay to each Lender such Lender's Pro Rata Share of
principal, interest and Fees paid by Borrower since the previous Settlement Date
for the benefit of such Lender on the Loans held by it. Such payments shall be
made by wire transfer to such Lender's account (as specified by such Lender in
Annex E or the applicable Assignment Agreement) not later than 2:00 p.m. (New
York time) on the next Business Day following each Settlement Date. To the
extent that any Lender (a "Non Funding Lender") has failed to fund all such
payments and Advances or failed to fund the purchase of all such participations,
Agent shall be entitled to set off the funding shortfall against that Non
Funding Lender's Pro Rata Share of all payments received from Borrower.
(b) Availability of Lender's Pro Rata Share. Agent may
assume that each Revolving Lender will make its Pro Rata Share of each Revolving
Credit Advance available to Agent on each Funding Date. If such Pro Rata Share
is not, in fact, paid to Agent by such Revolving Lender when due, Agent will be
entitled to recover such amount on demand from such Revolving Lender without
setoff, counterclaim or deduction of any kind. If any Revolving Lender fails to
pay the amount of its Pro Rata Share forthwith upon Agent's demand, Agent shall
promptly notify Borrower and
62
Borrower shall immediately repay such amount to Agent. Nothing in this
Section 8.5(B) or elsewhere in this Agreement or the other Loan Documents
shall be deemed to require Agent to advance funds on behalf of any Revolving
Lender or to relieve any Revolving Lender from its obligation to fulfill its
Commitments hereunder or to prejudice any rights that Borrower may have
against any Revolving Lender as a result of any default by such Revolving
Lender hereunder. To the extent that Agent advances funds to Borrower on
behalf of any Revolving Lender and is not reimbursed therefor on the same
Business Day as such Advance is made, Agent shall be entitled to retain for
its account all interest accrued on such Advance until reimbursed by the
applicable Revolving Lender.
(c) Return of Payments.
(i) If Agent pays an amount to a Lender under this
Agreement in the belief or expectation that a related payment has been or will
be received by Agent from Borrower and such related payment is not received by
Agent, then Agent will be entitled to recover such amount from such Lender on
demand without setoff, counterclaim or deduction of any kind.
(ii) If Agent determines at any time that any amount
received by Agent under this Agreement must be returned to Borrower or paid to
any other Person pursuant to any insolvency law or otherwise, then,
notwithstanding any other term or condition of this Agreement or any other Loan
Document, Agent will not be required to distribute any portion thereof to any
Lender. In addition, each Lender will repay to Agent on demand any portion of
such amount that Agent has distributed to such Lender, together with interest at
such rate, if any, as Agent is required to pay to Borrower or such other Person,
without setoff, counterclaim or deduction of any kind.
(d) Non-Funding Lenders. The failure of any Non Funding
Lender to make any Revolving Credit Advance or any payment required by it
hereunder, or to purchase any participation in any Swing Line Loan to be made
or purchased by it on the date specified therefor shall not relieve any other
Lender (each such other Revolving Lender, an "Other Lender") of its
obligations to make such Advance or purchase such participation on such date,
but neither any Other Lender nor Agent shall be responsible for the failure
of any Non-Funding Lender to make an Advance, purchase a participation or
make any other payment required hereunder. Notwithstanding anything set forth
herein to the contrary, a Non-Funding Lender shall not have any voting or
consent rights under or with respect to any Loan Document or constitute a
"Lender" or a "Revolving Lender" (or be included in the calculation of
"Requisite Lenders" or "Supermajority Revolving Lenders" hereunder) for any
voting or consent rights under or with respect to any Loan Document.
(e) Dissemination of Information. Agent shall use reasonable efforts
to provide Lenders with any notice of Default or Event of Default received by
Agent from, or delivered by Agent to, any Credit Party, with notice of any Event
of Default of which Agent has actually become aware and with notice of any
action taken by Agent following any Event of Default; provided, that Agent shall
not be liable to any Lender for any failure to do so.
8.6 Actions in Concert. Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no Lender
shall take any action to protect or enforce its rights arising out of this
Agreement or the Notes (including exercising any rights of setoff) without first
obtaining the prior written consent of Agent and Requisite Lenders, it being the
intent of Lenders that any such action to protect or enforce rights under this
Agreement and the Notes shall be taken in concert and at the direction or with
the consent of Agent or Requisite Lenders. Agent is authorized to issue all
notices to be issued by or on behalf of the Lenders with respect to any
Subordinated Indebtedness.
63
SECTION 9.
MISCELLANEOUS
9.1 Indemnities. Borrower agrees to indemnify, pay, and hold Agent,
each Lender, each L/C Issuer and their respective officers, directors,
employees, agents, and attorneys (the "Indemnitees") harmless from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs and expenses (including all reasonable fees and
expenses of counsel to such Indemnitees) of any kind or nature whatsoever that
may be imposed on, incurred by, or asserted against the Indemnitee as a result
of such Indemnitees being a party to this Agreement or the transactions
consummated pursuant to this Agreement or otherwise relating to any of the
Related Transactions; provided, that Borrower shall have no obligation to an
Indemnitee hereunder with respect to liabilities to the extent resulting from
the gross negligence or willful misconduct of that Indemnitee as determined by a
court of competent jurisdiction. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, Borrower agree to make the
maximum contribution to the payment and satisfaction thereof which is
permissible under Applicable Law. Notwithstanding anything to the contrary
contained in this Section 9.1, it is agreed that any indemnity by the Borrower
in respect of Taxes shall be limited to the indemnity set forth in Section
1.11(e), without duplication of amounts payable under Section 1.11 and shall
exclude Excluded Taxes.
9.2 Amendments and Waivers.
(a) Except for actions expressly permitted to be taken by
Agent, no amendment, modification, termination or waiver of any provision of
this Agreement or any other Loan Document, or any consent to any departure by
any Credit Party therefrom, shall in any event be effective unless the same
shall be in writing and signed by Borrower, and by Requisite Lenders,
Supermajority Revolving Lenders or all affected Lenders, as applicable. All
such amendments, modifications, terminations or waivers requiring the consent
of any Lenders shall require the written consent of Requisite Lenders and the
written consents set forth in clauses (b) and (c) below as applicable.
(b) No amendment, modification, termination or waiver of or
consent with respect to any provision of this Agreement that increases the
percentage advance rates set forth in the definition of the Borrowing Base,
or that makes less restrictive the nondiscretionary criteria for exclusion
from Eligible Accounts, Eligible Inventory, Eligible M&E or Eligible Real
Estate set forth in Exhibit 4.9(d), shall be effective unless the same shall
be in writing and signed by Agent, Supermajority Revolving Lenders and
Borrower. No amendment, modification, termination or waiver of or consent
with respect to any provision of this Agreement that waives compliance with
the conditions precedent set forth in Section 7.2 to the making of any Loan
or the incurrence of any Letter of Credit Obligations shall be effective
unless the same shall be in writing and signed by Agent, Requisite Lenders
and Borrower. Notwithstanding anything contained in this Agreement to the
contrary, no waiver or consent with respect to any Default or any Event of
Default shall be effective for purposes of the conditions precedent to the
making of Loans or the incurrence of Letter of Credit Obligations set forth
in Section 7.2 unless the same shall be in writing and signed by Agent,
Requisite Lenders and Borrower.
(c) No amendment, modification, termination or waiver shall,
unless in writing and signed by Agent and each Lender directly affected
thereby: (i) increase the principal amount of any Lender's Revolving Loan
Commitment (which action shall be deemed to directly affect any Lender whose
Revolving Loan Commitment is increased); (ii) reduce the principal of, rate
of interest on or Fees payable with respect to any Loan or Letter of Credit
Obligations of any affected Lender; (iii) extend any scheduled payment date
or final maturity date of the principal amount of any Loan of any affected
Lender; (iv) waive, forgive, defer, extend or postpone any payment of
interest or Fees as to any affected Lender (which action shall be deemed only
to affect those Lenders to whom such
64
payments are made); (v) release any Guaranty or, except as otherwise
permitted in Section 3.7, release Collateral with a book value exceeding 10%
of the book value of all assets in the aggregate in any one (1) year (which
action shall be deemed to directly affect all Lenders); (vi) change the
percentage of the Commitments or of the aggregate unpaid principal amount of
the Loans that shall be required for Lenders or any of them to take any
action hereunder; and (vii) amend or waive this Section 9.2 or the
definitions of the terms "Requisite Lenders" or "Supermajority Revolving
Lenders" insofar as such definitions affect the substance of this Section
9.2. Furthermore, no amendment, modification, termination or waiver affecting
the rights or duties of Agent or L/C Issuers under this Agreement or any
other Loan Document shall be effective unless in writing and signed by Agent
or L/C Issuers, as the case may be, in addition to Lenders required
hereinabove to take such action. Each amendment, modification, termination or
waiver shall be effective only in the specific instance and for the specific
purpose for which it was given. No amendment, modification, termination or
waiver shall be required for Agent to take additional Collateral pursuant to
any Loan Document. No amendment, modification, termination or waiver of any
provision of any Note shall be effective without the written concurrence of
the holder of that Note. No notice to or demand on any Credit Party in any
case shall entitle such Credit Party or any other Credit Party to any other
or further notice or demand in similar or other circumstances. Any amendment,
modification, termination, waiver or consent effected in accordance with this
Section 9.2 shall be binding upon each holder of the Notes at the time
outstanding and each future holder of the Notes.
9.3 Notices. Any notice or other communication required shall be in
writing addressed to the respective party as set forth below and may be
personally served, telecopied, sent by overnight courier service or U.S. mail
and shall be deemed to have been given: (a) if delivered in person, when
delivered; (b) if delivered by fax, on the date of transmission if transmitted
on a Business Day before 4:00 p.m. New York Time; (c) if delivered by overnight
courier, one (1) Business Day after delivery to the courier properly addressed;
or (d) if delivered by U.S. mail, four (4) Business Days after deposit with
postage prepaid and properly addressed.
Notices shall be addressed as follows:
If to Holdings: RGCH Holdings Corp.
c/o Xxxxxx Xxxxxx, Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
ATTN: Xxxxxxx Xxxxxxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000.
If to Borrower: RathGibson, Inc.
000 Xxxxx Xxxx Xxxx
P.O. Box 5399
North Branch, New Jersey 08876
ATTN: President
Fax No.: (000) 000-0000
With copies, in the case of c/o Xxxxxx Xxxxxx, Inc.
notices to either Borrower, to: 000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
ATTN: Xxxxxxx Xxxxxxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
65
Xxxxxxx Xxxx & Xxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ATTN: Xxxxxx X. Xxxxxx, Esq.
Fax No.: (000) 000-0000]
If to Agent or GE Capital: GENERAL ELECTRIC CORPORATION
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ATTN: RathGibson, Inc. Account Officer
Fax No.: (000) 000-0000
With a copy to: GENERAL ELECTRIC CAPITAL CORPORATION
000 Xxxxxxx #0
X.X. Xxx 0000
Xxxxxxx, Xxxxxxxxxxx 00000-0000
ATTN: Global Sponsor Finance General Counsel
Fax No.: (000) 000-0000
and GENERAL ELECTRIC CAPITAL CORPORATION
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
ATTN: Global Sponsor Finance Corporate Counsel
Fax No.: (000) 000-0000
and King & Spalding LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ATTN: Xxxxxx X. Xxxxxx, Esq.
Telephone No: (000) 000-0000
Fax No: (000) 000-0000
If to a Lender: To the address set forth on the signature page
hereto or in the applicable Assignment Agreement
9.4 Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of Agent or any Lender to exercise, nor any partial
exercise of, any power, right or privilege hereunder or under any other Loan
Documents shall impair such power, right, or privilege or be construed to be a
waiver of any Default or Event of Default. All rights and remedies existing
hereunder or under any other Loan Document are cumulative to and not exclusive
of any rights or remedies otherwise available.
9.5 Marshaling; Payments Set Aside. Neither Agent nor any Lender
shall be under any obligation to marshal any assets in payment of any or all of
the Obligations. To the extent that Borrower make payment(s) or Agent enforces
its Liens or Agent or any Lender exercises its right of set-off, and such
payment(s) or the proceeds of such enforcement or set-off is subsequently
invalidated, declared to be fraudulent or preferential, set aside, or required
to be repaid by anyone, then to the extent of such recovery, the Obligations or
part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor, shall be revived and continued in full force and effect as if
such payment had not been made or such enforcement or set off had not occurred.
66
9.6 Severability. The invalidity, illegality, or unenforceability in
any jurisdiction of any provision under the Loan Documents shall not affect or
impair the remaining provisions in the Loan Documents.
9.7 Lenders' Obligations Several; Independent Nature of Lenders'
Rights. The obligation of each Lender hereunder is several and not joint and no
Lender shall be responsible for the obligation or commitment of any other Lender
hereunder. In the event that any Lender at any time should fail to make a Loan
as herein provided, the Lenders, or any of them, at their sole option, may make
the Loan that was to have been made by the Lender so failing to make such Loan.
Nothing contained in any Loan Document and no action taken by Agent or any
Lender pursuant hereto or thereto shall be deemed to constitute Lenders to be a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt.
9.8 Headings. Section and subsection headings are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purposes or be given substantive effect.
9.9 Applicable Law. THIS AGREEMENT AND EACH OF THE OTHER LOAN
DOCUMENTS WHICH DOES NOT EXPRESSLY SET FORTH APPLICABLE LAW SHALL BE GOVERNED BY
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.
9.10 Successors and Assigns. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns and shall inure to
the benefit of their respective successors and permitted assigns except that
Borrower may not assign its rights or obligations hereunder without the written
consent of all Lenders.
9.11 No Fiduciary Relationship; Limited Liability. No provision in
the Loan Documents and no course of dealing between the parties shall be deemed
to create any fiduciary duty owing to Borrower by Agent or any Lender. Borrower
agrees that neither Agent nor any Lender shall have liability to Borrower
(whether sounding in tort, contract or otherwise) for losses suffered by
Borrower in connection with, arising out of, or in any way related to the
transactions contemplated and the relationship established by the Loan
Documents, or any act, omission or event occurring in connection therewith,
unless and to the extent that it is determined that such losses resulted from
the gross negligence or willful misconduct of the party from which recovery is
sought as determined by a final non-appealable order by a court of competent
jurisdiction. Neither Agent nor any Lender shall have any liability with respect
to, and Borrower hereby waives, releases and agree not to xxx for, any special,
indirect or consequential damages suffered by Borrower in connection with,
arising out of, or in any way related to the Loan Documents or the transactions
contemplated thereby.
9.12 Construction. Agent, each Lender, Borrower and each other Credit
Party acknowledge that each of them has had the benefit of legal counsel of its
own choice and has been afforded an opportunity to review the Loan Documents
with its legal counsel and that the Loan Documents shall be construed as if
jointly drafted by Agent, each Lender, Borrower and each other Credit Party.
9.13 Confidentiality. Agent and each Lender agree to exercise their
best efforts, to keep confidential any non-public information delivered pursuant
to the Loan Documents and identified as such by Borrower and not to disclose
such information to Persons other than to potential assignees or participants or
to Persons employed by or engaged by Agent a Lender or a Lender's assignees or
67
participants including attorneys, auditors, professional consultants, rating
agencies, insurance industry associations and portfolio management services. The
confidentiality provisions contained in this Section 9.13 shall not apply to
disclosures (i) required to be made by Agent or any Lender to any regulatory or
governmental agency or pursuant to legal process or (ii) consisting of general
portfolio information that does not identify Borrower. The obligations of Agent
and Lenders under this Section 9.13 shall supersede and replace the obligations
of Agent and Lenders under any confidentiality agreement in respect of this
financing executed and delivered by Agent or any Lender prior to the date
hereof.
9.14 CONSENT TO JURISDICTION. EACH PARTY HERETO HEREBY CONSENTS TO
THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN NEW YORK COUNTY,
STATE OF NEW YORK AND IRREVOCABLY AGREES THAT, ALL ACTIONS OR PROCEEDINGS
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS SHALL
BE LITIGATED IN SUCH COURTS. EACH PARTY HERETO EXPRESSLY SUBMITS AND CONSENTS TO
THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS. EACH PARTY HERETO HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON SUCH PERSON
BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO SUCH
PERSON, AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND SERVICE SO MADE SHALL BE
COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.
9.15 WAIVER OF JURY TRIAL. BORROWER, CREDIT PARTIES, AGENT AND EACH
LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS. BORROWER, CREDIT PARTIES, AGENT AND EACH LENDER ACKNOWLEDGE THAT THIS
WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH
HAS RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED
FUTURE DEALINGS. BORROWER, CREDIT PARTIES, AGENT AND EACH LENDER WARRANT AND
REPRESENT THAT EACH HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH
LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS.
9.16 Survival of Warranties and Certain Agreements. All agreements,
representations and warranties made herein shall survive the execution and
delivery of this Agreement, the making of the Loans, issuances of Letters of
Credit and the execution and delivery of the Notes. Notwithstanding anything in
this Agreement or implied by law to the contrary, the agreements of Borrower set
forth in Sections 1.3(g), 1.10, 1.11 and 9.1 shall survive the repayment of the
Obligations and the termination of this Agreement.
9.17 Entire Agreement. This Agreement, the Notes and the other Loan
Documents embody the entire agreement among the parties hereto and supersede all
prior commitments, agreements, representations, and understandings, whether oral
or written, relating to the subject matter hereof, and may not be contradicted
or varied by evidence of prior, contemporaneous, or subsequent oral agreements
or discussions of the parties hereto. All Exhibits, Schedules and Annexes
referred to herein are incorporated in this Agreement by reference and
constitute a part of this Agreement.
9.18 Counterparts; Effectiveness. This Agreement and any amendments,
waivers, consents or supplements may be executed in any number of counterparts
and by different parties hereto in separate
68
counterparts, each of which when so executed and delivered shall be deemed an
original, but all of which counterparts together shall constitute but one in the
same instrument. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto.
9.19 Replacement of Lenders.
(a) Within fifteen (15) days after receipt by Borrower of
written notice and demand from any Lender for payment pursuant to Section
1.10 or 1.11 or, in the case of refusal by any Lender to consent to a
modification, termination or waiver with respect to this Agreement that has
been approved by Requisite Lenders, Supermajority Revolving Lenders or all
affected Lenders, as applicable (any such Lender demanding such payment or
refusing to so consent being referred to herein as an "Affected Lender"),
Borrower may, at its option, notify Agent and such Affected Lender of its
intention to do one of the following:
(i) Borrower may obtain, at Borrower's expense, a
replacement Lender ("Replacement Lender") for such Affected Lender, which
Replacement Lender shall be reasonably satisfactory to Agent. In the event
Borrower obtains a Replacement Lender that will purchase all outstanding
Obligations owed to such Affected Lender and assume its Commitments hereunder
within ninety (90) days following notice of Borrower's intention to do so, the
Affected Lender shall sell and assign all of its rights and delegate all of its
obligations under this Agreement to such Replacement Lender in accordance with
the provisions of Section 8.1, provided that Borrower has reimbursed such
Affected Lender for any administrative fee payable pursuant to Section 8.1 and,
in any case where such replacement occurs as the result of a demand for payment
pursuant to Section 1.10 or 1.11, paid all amounts required to be paid to such
Affected Lender pursuant to Section 1.10 or 1.11 through the date of such sale
and assignment; or
(ii) Borrower may, with Agent's consent, prepay in
full all outstanding Obligations owed to such Affected Lender and terminate such
Affected Lender's Pro Rata Share of the Revolving Loan Commitment, in which case
the Revolving Loan Commitment will be reduced by the amount of such Pro Rata
Share. Borrower shall, within ninety (90) days following notice of its intention
to do so, prepay in full all outstanding Obligations owed to such Affected
Lender (including, in any case where such prepayment occurs as the result of a
demand for payment for increased costs, such Affected Lender's increased costs
for which it is entitled to reimbursement under this Agreement through the date
of such prepayment), and terminate such Affected Lender's obligations under the
Revolving Loan Commitment.
(b) In the case of a Non-Funding Lender pursuant to Section
8.5(a), at Borrower's request, Agent or a Person acceptable to Agent shall
have the right with Agent's consent and in Agent's sole discretion (but shall
have no obligation) to purchase from any Non-Funding Lender, and each
Non-Funding Lender agrees that it shall, at Agent's request, sell and assign
to Agent or such Person, all of the Loans and Commitments of that Non-Funding
Lender for an amount equal to the principal balance of all Loans held by such
Non-Funding Lender and all accrued interest and Fees with respect thereto
through the date of sale, such purchase and sale to be consummated pursuant
to an executed Assignment Agreement.
(c) If, in connection with any proposed amendment,
modification, waiver or termination pursuant to Section 9.2 (a "Proposed
Change"):
(i) requiring the consent of all affected Lenders,
the consent of Requisite Lenders is obtained, but the consent of other Lenders
whose consent is required is not obtained (any such
69
Lender whose consent is not obtained as described in this clause (i) and in
clause (ii) below being referred to as a "Non-Consenting Lender"), or
(ii) requiring the consent of Supermajority Revolving
Lenders, the consent of Requisite Lenders is obtained, but the consent of
Supermajority Revolving Lenders is not obtained, or
then at Borrower's request, so long as Agent is not a Non-Consenting Lender,
Agent, or a Person reasonably acceptable to Agent, shall have the right with
Agent's consent and in Agent's sole discretion (but shall have no obligation) to
purchase from such Non-Consenting Lenders, and such Non-Consenting Lenders agree
that they shall, upon Agent's request, sell and assign to Agent or such Person,
all of the Loans and Commitments of such Non-Consenting Lenders for an amount
equal to the principal balance of all Loans held by the Non-Consenting Lenders
and all accrued interest and Fees with respect thereto through the date of sale,
such purchase and sale to be consummated pursuant to an executed Assignment
Agreement.
9.20 Delivery of Termination Statements and Mortgage Releases. Upon
payment in full in cash and performance of all of the Obligations (other than
Contingent Indemnification Obligations for which no claim has been asserted),
termination of the Commitments and a release of all claims against Agent and
Lenders, Agent shall deliver to Borrower termination statements, mortgage
releases and other documents necessary or appropriate to evidence the
termination of the Liens securing payment of the Obligations.
9.21 Subordination of Intercompany Debt.
(a) Each Credit Party hereby agrees that any intercompany
Indebtedness or other intercompany payables or receivables, or intercompany
advances directly or indirectly owed to such Credit Party by any other Credit
Party (collectively, "Intercompany Debt"), of whatever nature at any time
outstanding shall be subordinate and subject in right of payment to the prior
payment in full in cash of the Obligations to the extent set forth in this
Section 9.21. Each Credit Party hereby agrees that, while any Event of
Default is continuing, to the extent so directed in writing by Agent, such
Credit Party will not accept any payment, including by offset, on any
Intercompany Debt until the Termination Date. Except during the continuation
of an Event of Default, each Credit Party shall be permitted to make and
accept payments of intercompany debt.
(b) In the event that any payment on any Intercompany Debt
shall be received by a Credit Party other than as permitted by this Section
9.21 before the Termination Date, such Credit Party shall receive such
payments and hold the same in trust for, segregate the same from its own
assets and shall immediately pay over to, the Agent for the benefit of the
Agent and Lenders all such sums to the extent necessary so that Agent and the
Lenders shall have been paid in full, in cash, all Obligations owed or which
may become owing.
(c) Upon any payment or distribution of any assets of any
Credit Party of any kind or character, whether in cash, property or
securities by set-off, recoupment or otherwise, to creditors in any
liquidation or other winding-up of such Credit Party or in the event of any
bankruptcy or similar proceeding, Agent and Lenders shall first be entitled
to receive payment in full in cash, in accordance with the terms of the
Obligations and of this Agreement, of all amounts payable under or in respect
of such Obligations, before any payment or distribution is made on, or in
respect of, any Intercompany Debt, in any such proceeding, and in furtherance
thereof, any distribution or payment, to which any Credit Party would be
entitled except for the provisions hereof shall be paid by such Credit Party
or by any receiver, trustee in bankruptcy, liquidating trustee, agent or
other person making such payment or distribution directly to Agent (for the
benefit of Agent and the Lenders) to the extent necessary to pay
70
all such Obligations in full in cash, after giving effect to any concurrent
payment or distribution to Agent and Lenders (or to Agent for the benefit of
Agent and Lenders).
[remainder of page intentionally left blank; signature pages follow]
71
Witness the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
RATHGIBSON, INC.
By: /s/ Xxxxxx X. Xxxxxx
_____________________________________
Name: Xxxxxx X. Xxxxxx
_____________________________________
Title: President & CEO
RGCH HOLDINGS CORP.
By: /s/ Xxxxxxx Xxxxxxxxx
_____________________________________
Name: Xxxxxxx Xxxxxxxxx
_____________________________________
Title: President
Credit Agreement
GENERAL ELECTRIC CAPITAL CORPORATION,
AS AGENT, AN L/C ISSUER AND A LENDER
By: /s/ Xxxx Cascade
---------------------------------------
Its Duly Authorized Signatory
Credit Agreement
ANNEX A
TO
CREDIT AGREEMENT
DEFINITIONS
Capitalized terms used in the Loan Documents shall have (unless
otherwise provided elsewhere in the Loan Documents) the following respective
meanings and all references to Sections, Exhibits, Schedules or Annexes in the
following definitions shall refer to Sections, Exhibits, Schedules or Annexes of
or to the Agreement:
"Account Debtor" means any Person who may become obligated to any
Credit Party under, with respect to, or on account of, an Account, Chattel Paper
or General Intangibles (including a payment intangible).
"Accounting Changes" means: (a) changes in accounting principles
required by GAAP and implemented by Holdings or any of its Subsidiaries; (b)
changes in accounting principles recommended by Borrower's certified public
accountants and implemented by Borrower; and (c) changes in carrying value of
Borrower's or any of its Subsidiaries' assets, liabilities or equity accounts
resulting from (i) the application of purchase accounting principles (A.P.B. 16
and/or 17, FASB 141 and EITF 88 16 and FASB 109) to the Related Transactions or
(ii) as the result of any other adjustments that, in each case, were applicable
to, but not included in, the Pro Forma.
"Accounts" means all "accounts," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, including (a) all
accounts receivable, other receivables, book debts and other forms of
obligations (other than forms of obligations evidenced by Chattel Paper or
Instruments), (including any such obligations that may be characterized as an
account or contract right under the Code), (b) all of each Credit Party's rights
in, to and under all purchase orders or receipts for goods or services, (c) all
of each Credit Party's rights to any goods represented by any of the foregoing
(including unpaid sellers' rights of rescission, replevin, reclamation and
stoppage in transit and rights to returned, reclaimed or repossessed goods), (d)
all rights to payment due to any Credit Party for property sold, leased,
licensed, assigned or otherwise disposed of, for a policy of insurance issued or
to be issued, for a secondary obligation incurred or to be incurred, for energy
provided or to be provided, for the use or hire of a vessel under a charter or
other contract, arising out of the use of a credit card or charge card, or for
services rendered or to be rendered by such Credit Party or in connection with
any other transaction (whether or not yet earned by performance on the part of
such Credit Party), (e) all healthcare insurance receivables, and (f) all
collateral security of any kind, now or hereafter in existence, given by any
Account Debtor or other Person with respect to any of the foregoing.
"Acquired Debt" means, with respect to any specified Person: (1)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, whether or
not such Indebtedness is incurred in connection with, or in contemplation of,
such other Person merging with or into, or becoming a Subsidiary of, such
specified Person; and (2) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.
"Acquisition" has the meaning ascribed to it in the recitals to the
Agreement.
"Acquisition Agreement" means the Stock Purchase Agreement, dated as
of December 6, 2005, by and among the Borrower, the Persons listed as "Sellers"
on the on the signature pages attached thereto and RGCH Holdings LLC, a Delaware
limited liability company.
"Acquisition Documents" means the Acquisition Agreement and all
documents, certificates, instruments, agreements and other writings executed or
delivered in connection therewith.
"Advances" means any Revolving Credit Advance or Swing Line Advance,
as the context may require.
"Affected Lender" has the meaning ascribed to it in Section 9.19(a).
"Affiliate" means, with respect to any Person, (a) each Person that,
directly or indirectly, owns or controls, whether beneficially, or as a trustee,
guardian or other fiduciary, 10% or more of the Stock having ordinary voting
power in the election of directors of such Person, (b) each Person that
controls, is controlled by or is under common control with such Person, (c) each
of such Person's officers, directors, joint venturers and partners and (d) in
the case of Borrower, the immediate family members, spouses and lineal
descendants of individuals who are Affiliates of Borrower. For the purposes of
this definition, "control" of a Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of its management or
policies, whether through the ownership of voting securities, by contract or
otherwise; provided, however, that the term "Affiliate" shall specifically
exclude Agent and each Lender.
"Agent" means GE Capital in its capacity as Agent for Lenders or its
successor appointed pursuant to Section 8.2.
"Agreement" means this Credit Agreement (including all schedules,
subschedules, annexes and exhibits hereto), as the same may be amended,
supplemented, restated or otherwise modified from time to time.
"Applicable Law" means all applicable provisions of constitutions,
laws, statutes, ordinances, rules, treaties, regulations, permits, licenses,
approvals, interpretations and orders of courts or Governmental Authorities and
all orders and decrees of all courts and arbitrators.
"Applicable L/C Margin" means the per annum fee, from time to time
in effect, payable with respect to outstanding Letter of Credit Obligations as
determined by reference to Section 1.2(a).
"Applicable Margins" means collectively the Applicable L/C Margin,
the Applicable Revolver Index Margin and the Applicable Revolver LIBOR Margin.
"Applicable Revolver Index Margin" means the per annum interest rate
margin from time to time in effect and payable in addition to the Index Rate
applicable to the Revolving Loan, as determined by reference to Section 1.2(a).
"Applicable Revolver LIBOR Margin" means the per annum interest rate
from time to time in effect and payable in addition to the LIBOR Rate applicable
to the Revolving Loan, as determined by reference to Section 1.2(a).
"Appraisal Date" means the date that Borrower has satisfied the
requirements of Section 4.9(e)(i) (within the time period required by such
Section).
A-2
"Asset Acquisition" means, with respect to any Person, (1) an
Investment by such Person or any Subsidiary of such Person in any third Person
pursuant to which such third Person shall become a Subsidiary of such Person or
any Subsidiary of such Person, or shall be merged with or into such Person or
any Subsidiary of such Person, or (2) the acquisition by such Person or any
Subsidiary of such Person of the assets of any third Person (other than a
Subsidiary of such Person) which constitutes all or substantially all of the
assets of such third Person or comprises any division or line of business of
such third Person or any other properties or assets of such third Person other
than in the ordinary course of business.
"Asset Disposition" means the disposition whether by sale, lease,
transfer, loss, damage, destruction, casualty, condemnation or otherwise of any
of the following (a) any of the Stock or other equity or ownership interest of
any of Borrower's Subsidiaries or (b) any or all of the assets of Borrower or
any of its Subsidiaries other than sales and dispositions permitted by Section
3.7(a) through (d) and (f) through (j).
"Assignment Agreement" has the meaning ascribed to it in Section
8.1(a).
"Attributable Debt" in respect of a sale and leaseback transaction
means, as at the time of determination, the present value of the total
obligations of the lessee for net rental payments during the remaining term of
the lease included in such sale and leaseback transaction including any period
for which such lease has been extended or may, at the option of the lessor, be
extended. Such present value shall be calculated using a discount rate equal to
the rate of interest implicit in such transaction, determined in accordance with
GAAP; provided, however, that if such sale and leaseback transaction results in
a Capital Lease Obligation, the amount of Indebtedness represented thereby will
be determined in accordance with the definition of "Capital Lease Obligation".
"Bankruptcy Code" means the provisions of Title 11 of the United
States Code, 11 U.S.C. xx.xx. 101 et seq. or other applicable bankruptcy,
insolvency or similar laws.
"Beneficial Owner" has the meaning assigned to such term in Rule
13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the
beneficial ownership of any particular "person" (as that term is used in Section
13(d)(3) of the Exchange Act), such "person" will be deemed to have beneficial
ownership of all securities that such "person" has the right to acquire by
conversion or exercise of other securities, whether such right is currently
exercisable or is exercisable only after the passage of time. The terms
"Beneficially Owns" and "Beneficially Owned" have a corresponding meaning
"Board of Directors" means (1) with respect to a corporation, the
board of directors of the corporation or any committee thereof duly authorized
to act on behalf of such board; (2) with respect to a partnership, the Board of
Directors of the general partner of the partnership; (3) with respect to a
limited liability company, the managing member or members or any controlling
committee or Board of Directors of such company or of the sole member or of the
managing member thereof; and (4) with respect to any other Person, the board or
committee of such Person serving a similar function.
"Borrower" has the meaning ascribed to it in the preamble to the
Agreement.
"Borrowing Availability" means as of any date of determination the
lesser of (i) the Maximum Amount and (ii) the Borrowing Base, in each case, less
the sum of the Revolving Loan then outstanding (including, without duplication,
the outstanding balance of Letter of Credit Obligations and the Swing Line Loan
then outstanding).
"Borrowing Base" means:
A-3
(1) as of any date of determination by Agent prior to the
Appraisal Date, an amount equal to the sum at such time of:
(a) 85% of the book value of Eligible Accounts at such time;
plus
(b) the lesser of (i) 55% of the book value of Eligible
Inventory valued at the lower of cost (determined on a first in,
first out basis) or market and (ii) 85% of the Net Orderly
Liquidation Value of Eligible Inventory, at such time; plus
(c) 85% of the Net Orderly Liquidation Value of Eligible
M&E; plus
(d) 50% of the Fair Market Value of Eligible Real Estate;
less
(e) $10,000,000; less
(f) such Reserves as Agent shall have imposed in its
reasonable credit judgment, and
(2) as of any date of determination by Agent from and after the
Appraisal Date, an amount equal to:
(a) 85% of the book value of Eligible Accounts at such time;
plus
(b) the lesser of (i) 55% of the book value of Eligible
Inventory valued at the lower of cost (determined on a first in,
first out basis) or market and (ii) 85% of the Net Orderly
Liquidation Value of Eligible Inventory, at such time; plus
(c) 85% of the Net Orderly Liquidation Value of Eligible
M&E; plus
(d) 50% of the Fair Market Value of Eligible Real Estate;
less
(e) in the event that Borrower shall not have a Fixed Charge
Coverage Ratio, as of the end of the most recent Fiscal Quarter for
which a Compliance Certificate has been delivered pursuant to
Section 4.9(k), of at least the minimum amount for such Fiscal
Quarter set forth on Schedule A-1 hereto, $5,000,000; less
(f) such Reserves as Agent shall have imposed in its
reasonable credit judgment.
"Borrowing Base Certificate" has the meaning ascribed to it in
Section 4.9(d).
"Business Day" means any day that is not a Saturday, a Sunday or a
day on which banks are required or permitted to be closed in the State of New
York, New Jersey or Wisconsin and in reference to LIBOR Loans shall mean any
such day that is also a LIBOR Business Day.
"Capital Expenditures" has the meaning ascribed to it in Schedule 5
to Exhibit 4.9(k).
"Capital Lease" means, with respect to any Person, any lease of any
property (whether real, personal or mixed) by such Person as lessee that, in
accordance with GAAP, would be required to be classified and accounted for as a
capital lease on a balance sheet of such Person.
A-4
"Capital Lease Obligation" means, with respect to any Capital Lease
of any Person, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease.
"Capital Stock" means (a) in the case of a corporation, capital
stock, (b) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
capital stock, (c) in the case of a partnership, partnership interests (whether
general or limited), (d) in the case of a limited liability company, membership
interests and (e) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person (other than earnouts or similar consideration
payable in connection with a Permitted Acquisition).
"Cash Equivalents" means: (i) marketable securities (A) issued or
directly and unconditionally guaranteed as to interest and principal by the
United States government or (B) issued by any agency of the United States
government the obligations of which are backed by the full faith and credit of
the United States, in each case maturing within one (1) year after acquisition
thereof; (ii) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any public
instrumentality thereof, in each case maturing within one year after acquisition
thereof and having, at the time of acquisition, a rating of at least A-1 from
S&P or at least P 1 from Xxxxx'x; (iii) commercial paper maturing no more than
one year from the date of acquisition and, at the time of acquisition, having a
rating of at least A 1 from S&P or at least P 1 from Xxxxx'x; (iv) certificates
of deposit or bankers' acceptances issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that is at least (A) "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (B) has Tier 1 capital (as defined in such regulations) of not
less than $250,000,000, in each case maturing within one year after issuance or
acceptance thereof; (v) shares of any money market mutual or similar funds that
(A) has substantially all of its assets invested continuously in the types of
investments referred to in clauses (i) through (iv) above, (B) has net assets of
not less than $500,000,000 and (C) has the highest rating obtainable from either
S&P or Xxxxx'x; and (vi) repurchase agreements secured by any one or more of the
investments described in clauses (i), (ii), (iii) or (iv).
"Change of Control" means the occurrence of any of the following:
(i) the direct or indirect sale, lease, transfer, conveyance
or other disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the properties or
assets of Borrower and its Subsidiaries taken as a whole to any "person" (as
that term is used in Section 13(d) of the Exchange Act) other than a Principal
or a Related Party of a Principal;
(ii) the adoption of a plan relating to the liquidation or
dissolution of Borrower; or
(iii) the consummation of any transaction (including, without
limitation, any merger or consolidation), the result of which is prior to the
consummation of an initial public offering of Capital Stock of Holdings that
Principals and Related Parties of Principals cease to own and control more than
fifty percent (50%) of each class of the Capital Stock of Holdings or from and
after the consummation of an initial public offering of Stock of Holdings, at
least thirty-five per cent (35%) of each class of Capital Stock of Holdings; or
A-5
(iv) the first day on which a majority of the members of the
Board of Directors of the Borrower are not Continuing Directors.
"Charges" means all federal, state, county, city, municipal, local,
foreign or other governmental taxes, levies, assessments, charges, liens, claims
or encumbrances upon or relating to (a) the Collateral, (b) the Obligations, (c)
the employees, payroll, income or gross receipts of any Credit Party, (d) any
Credit Party's ownership or use of any properties or other assets, or (e) any
other aspect of any Credit Party's business.
"Chattel Paper" means any "chattel paper," as such term is defined
in the Code, including electronic chattel paper, now owned or hereafter acquired
by any Credit Party, wherever located.
"Closing Checklist" means the schedule, including all appendices,
exhibits or schedules thereto, listing certain documents and information to be
delivered in connection with the Agreement, the other Loan Documents and the
transactions contemplated thereunder, substantially in the form attached hereto
as Annex C.
"Closing Date" means February 7, 2006.
"Code" means the Uniform Commercial Code as the same may, from time
to time, be enacted and in effect in the State of New York; provided, that to
the extent that the Code is used to define any term herein or in any Loan
Document and such term is defined differently in different Articles or Divisions
of the Code, the definition of such term contained in Article or Division 9
shall govern; provided further, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection or priority of, or
remedies with respect to, Agent's or any Lender's Lien on any Collateral is
governed by the Uniform Commercial Code as enacted and in effect in a
jurisdiction other than the State of New York, the term "Code" shall mean the
Uniform Commercial Code as enacted and in effect in such other jurisdiction
solely for purposes of the provisions thereof relating to such attachment,
perfection, priority or remedies and for purposes of definitions related to such
provisions.
"Collateral" means the property covered by the Security Agreement,
the Mortgages and the other Collateral Documents and any other property, real or
personal, tangible or intangible, now existing or hereafter acquired, that may
at any time be or become subject to a security interest or Lien in favor of
Agent, on behalf of itself and Lenders, to secure the Obligations or any portion
thereof.
"Collateral Documents" means the Security Agreement, the Pledge
Agreements, the Guaranties, the Intercreditor Agreement, the Mortgages, the
Patent Security Agreements, the Trademark Security Agreements, the Copyright
Security Agreements and all similar agreements entered into guaranteeing payment
of, or granting a Lien upon property as security for payment of, the Obligations
or any portion thereof and the Subordination Agreements.
"Commitment" means, collectively, the Revolving Loan Commitment and
the Swing Line Commitment.
"Commitment Termination Date" means the earliest of (a) February 7,
2011, (b) the date of termination of Lenders' obligations to make Advances and
to incur Letter of Credit Obligations or permit existing Loans to remain
outstanding pursuant to Section 6.3, and (c) the date of (i) payment in full by
Borrower of the Loans, (ii) the cancellation and return (or stand-by guarantee)
of all Letters of Credit or the provision of cash collateral (or to the extent
permitted hereby back to back letters of credit) for all Letter of Credit
Obligations pursuant to Section 1.5(g), and (iii) the permanent reduction of the
Commitments to zero dollars ($0).
A-6
"Compliance Certificate" has the meaning ascribed to it in Section
4.9(k).
"Consolidated Cash Flow" means, with respect to any specified Person
for any period, the Consolidated Net Income of such Person for such period plus,
without duplication:
(a) an amount equal to any extraordinary loss plus any net loss
realized by such Person or any of its Subsidiaries in connection with an
Asset Disposition, to the extent such losses were deducted in computing such
Consolidated Net Income; plus
(b) provision for taxes based on income or profits of such Person
and its Subsidiaries for such period, to the extent that such provision for
taxes was deducted in computing such Consolidated Net Income; plus
(c) the Interest Charges of such Person and its Subsidiaries for
such period, to the extent that such Interest Charges were deducted in
computing such Consolidated Net Income; plus
(d) an amount equal to imputed principal with respect to
Attributable Debt paid during such period, to the extent that such imputed
principal was deducted in computing such Consolidated Net Income; plus
(e) depreciation, amortization (including amortization of
intangibles but excluding amortization of prepaid cash expenses that were
paid in a prior period) and other non-cash expenses (excluding any such
non-cash expense to the extent that it represents an accrual of or reserve
for cash expenses in any future period or amortization of a prepaid cash
expense that was paid in a prior period) of such Person and its Subsidiaries
for such period to the extent that such depreciation, amortization and other
non-cash expenses were deducted in computing such Consolidated Net Income;
plus
(f) any management fees paid or accrued by Borrower to the Sponsor
or any of its respective Affiliates in such period pursuant to the terms of
the Management Agreement as in effect on the date hereof, or to Liberty
Partners or any of its Affiliates pursuant to the management services
agreement as in effect prior to Closing Date, to the extent that any such
management fees were deducted in computing such Consolidated Net Income; plus
(g) cash restructuring and/or nonrecurring charges not to exceed
$2,000,000 in any Fiscal Year and not to exceed $4,000,000 in the aggregate;
plus
(h) all transaction and restructuring costs incurred during such
period in connection with any Asset Acquisition in an aggregate amount not to
exceed five percent of the total enterprise value of such Asset Acquisition;
plus
(i) any severance payments made in cash to former employees not to
exceed $2,000,000 in the aggregate; minus
(j) non-cash items increasing such Consolidated Net Income for
such period, excluding any such items to the extent they represent (a) the
reversal in such period of an accrual of, or cash reserve for, cash expenses
in a prior period, to the extent such accrual or reserve did not increase
Consolidated Cash Flow in a prior period, (b) the amortization of income that
was paid in a prior period (c) the accrual of revenue or income consistent
with past practice or (d) extraordinary gains; minus
(k) gain from extraordinary items (net of loss from extraordinary
items) realized by such Person or any of its Subsidiaries in connection with
an Asset Disposition, to the extent such gains were included in computing
Consolidated Net Income,
A-7
in each case, on a consolidated basis and determined in accordance
with GAAP.
"Consolidated Net Income" means, with respect to any specified
Person for any period, the aggregate of the Net Income of such Person and its
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:
(a) the Net Income of any Person that is not a Subsidiary or that
is accounted for by the equity method of accounting will be included only to
the extent of the amount of dividends or similar distributions paid in cash
to the specified Person or a Subsidiary of the Person;
(b) solely for the purposes of calculating Consolidated Net Income
to determine the amount of Restricted Payments permitted under Section 3.5,
the Net Income of any Subsidiary (other than a Guarantor) will be excluded to
the extent that the declaration or payment of dividends or similar
distributions by that Subsidiary of that Net Income is not at the date of
determination permitted without any prior governmental approval (that has not
been obtained) or, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Subsidiary or its Stockholders;
(c) the cumulative effect of a change in accounting principles
will be excluded;
(d) all goodwill impairment charges will be excluded;
(e) non-cash charges relating to employee benefit or other
management compensation plans of any direct or indirect parent of Borrower
(to the extent such non-cash charges relate to plans of any direct or
indirect parent of Borrower for the benefit of members of the Board of
Directors of Borrower (in their capacity as such) or employees of Borrower
and its Subsidiaries), Borrower or any of its Subsidiaries or any non-cash
compensation charge arising from any grant of stock, stock options or other
equity-based awards of any direct or indirect parent of Borrower (to the
extent such non-cash charges relate to plans of any direct or indirect parent
of Borrower for the benefit of members of the Board of Directors of Borrower
(in their capacity as such) or employees of Borrower and its Subsidiaries),
Borrower or any of its Subsidiaries (excluding in each case any non-cash
charge to the extent that it represents an accrual of or reserve for cash
expenses in any future period or amortization of a prepaid cash expense
incurred in a prior period) in each case will be excluded;
(f) any non-cash charges from the application of the purchase
method of accounting in connection with the Acquisition or any future
acquisition will be excluded;
(g) transaction costs and restructuring charges incurred in
connection with the Acquisition will be excluded; and
(h) the amortization of the consideration for any non-competition
agreements entered into the connection with the Acquisition shall be
excluded.
"Contingent Indemnification Obligation" means at any time
obligations in respect of indemnities provided under the Loan Documents to the
extent that no claim for or notice of a claim for any such indemnity has been
made or given as of such time.
"Contingent Obligation" means, as applied to any Person, any direct
or indirect liability of that Person: (i) with respect to Guaranteed
Indebtedness; (ii) with respect to any letter of credit issued for the account
of that Person or as to which that Person is otherwise liable for reimbursement
of drawings; (iii) under any Hedge Agreement,or (iv) to make take-or-pay or
similar payments if required regardless of nonperformance by any other party or
parties to an agreement. The amount of any
A-8
Contingent Obligation shall be equal to the amount of the obligation so
guaranteed or otherwise supported or, if not a fixed and determined amount, the
maximum amount so guaranteed.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of Borrower who: (1) was a member of such Board
of Directors on the Closing Date; or (2) was nominated for election or elected
to such Board of Directors with the approval of a majority of the Continuing
Directors who were members of such Board of Directors at the time of such
nomination or election.
"Contractual Obligations" means, as applied to any Person, any
indenture, mortgage, deed of trust, contract, undertaking, agreement or other
instrument to which that Person is a party or by which it or any of its
properties is bound or to which it or any of its properties is subject including
the Related Transactions Documents.
"Control Agreements" means tri-party deposit account, securities
account or commodities account control agreements by and among the applicable
Credit Party, Agent and the depository, securities intermediary or commodities
intermediary, and each in form and substance reasonably satisfactory in all
respects to Agent and in any event providing to Agent control of such deposit
account, securities account or commodities account within the meaning of
Articles 8 and 9 of the Code.
"Copyright License" means any and all rights now owned or hereafter
acquired by any Credit Party under any written agreement granting any right to
use any Copyright or Copyright registration.
"Copyright Security Agreements" means the Copyright Security
Agreements made in favor of Agent, on behalf of itself and Lenders, by each
applicable Credit Party, as amended, restated, modified or supplemented from
time to time, in the form attached hereto as Exhibit B.
"Copyrights" means all of the following now owned or hereafter
created, adopted or acquired by any Credit Party: (a) all copyrights, mask
works, databases, design rights and General Intangibles of like nature (whether
or not registered or published), all registrations and recordations thereof, and
all applications in connection therewith, including all registrations,
recordations and applications in the United States Copyright Office or in any
similar office or agency of the United States, any state or territory thereof,
or any other country or any political subdivision thereof; and (b) all reissues,
extensions or renewals thereof.
"Credit Parties" means Holdings, Borrower, each Guarantor and each
other Person who executes this Agreement as a "Credit Party" or a Guaranty or
who grants a Lien on all or part of its assets to secure all of part of the
Obligations.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement, each of which is for the purpose of hedging
the foreign currency risk associated with Holdings' and its Subsidiaries'
operations and not for speculative purposes.
"Default" means any event that, with the passage of time or notice
or both, would, unless cured or waived, become an Event of Default.
"Default Rate" has the meaning ascribed to it in Section 1.2(d).
"Disbursement Account" has the meaning ascribed to it in Section
1.1(e).
A-9
"Disqualified Stock" means any Capital Stock that, by its terms (or
by the terms of any security into which it is convertible, or for which it is
exchangeable, in each case, at the option of the holder of the Capital Stock),
or upon the happening of any event, matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or redeemable at the option
of the holder of the Capital Stock, in whole or in part, on or prior to May 8,
2011. Notwithstanding the preceding sentence, any Capital Stock that would
constitute Disqualified Stock solely because the holders of the Capital Stock
have the right to require Borrower to repurchase such Capital Stock upon the
occurrence of a change of control or an asset sale will not constitute
Disqualified Stock if the terms of such Capital Stock provide that Borrower may
not repurchase or redeem any such Capital Stock pursuant to such provisions
unless the Termination Date has occurred. The amount of Disqualified Stock
deemed to be outstanding at any time for purposes hereof will be the maximum
amount that Borrower and its Subsidiaries may become obligated to pay upon the
maturity of, or pursuant to any mandatory redemption provisions of, such
Disqualified Stock, exclusive of accrued dividends.
"Disclosure Schedules" means the Schedules prepared by Borrower and
denominated as Schedules 2.7 through 5.18 in the index to the Agreement.
"Documents" means any "document," as such term is defined in the
Code, including electronic documents, now owned or hereafter acquired by any
Credit Party, wherever located.
"Dollars" or "$" means lawful currency of the United States of
America.
"Domestic Subsidiary" means any Subsidiary of any Person organized
under the laws of any state of the United States of America or the District of
Columbia.
"EBITDA" has the meaning ascribed to it in Schedule 4 to Exhibit
4.9(k).
"Eligible Accounts" has the meaning ascribed to it in Schedule 1 to
Exhibit 4.9(d).
"Eligible Inventory" has the meaning ascribed to it in Schedule 1 to
Exhibit 4.9(d).
"Eligible M&E" has the meaning ascribed to it in Schedule 1 to
Exhibit 4.9(d).
"Eligible Real Estate" has the meaning ascribed to it in Schedule 1
to Exhibit 4.9(d).
"Environmental Laws" means all applicable federal, state, local and
foreign laws, statutes, ordinances, codes, rules, legally binding standards and
regulations, now or hereafter in effect, and any applicable judicial or
administrative interpretation thereof, including any applicable judicial or
administrative order, consent decree, order or judgment, imposing liability or
standards of conduct for or relating to the regulation and protection of human
health, safety, the environment and natural resources (including ambient air,
surface water, groundwater, wetlands, land surface or subsurface strata,
wildlife, aquatic species and vegetation). Environmental Laws include the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980
(42 U.S.C. xx.xx. 9601 et seq.) ("CERCLA"); the Hazardous Materials
Transportation Authorization Act of 1994 (49 U.S.C. xx.xx. 5101 et seq.); the
Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. xx.xx. 136 et
seq.); the Solid Waste Disposal Act (42 U.S.C. xx.xx. 6901 et seq.); the Toxic
Substance Control Act (15 U.S.C. xx.xx. 2601 et seq.); the Clean Air Act (42
U.S.C. xx.xx. 7401 et seq.); the Federal Water Pollution Control Act (33 U.S.C.
xx.xx. 1251 et seq.); the Occupational Safety and Health Act (29 U.S.C. xx.xx.
651 et seq.); and the Safe Drinking Water Act (42 U.S.C. xx.xx. 300(f) et seq.),
and any and all regulations promulgated thereunder, and all analogous state,
local and foreign counterparts or equivalents and any transfer of ownership
notification or approval statutes.
A-10
"Environmental Liabilities" means, with respect to any Person, all
liabilities, obligations, responsibilities, response, remedial and removal
costs, investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising under
or related to any Environmental Laws, Environmental Permits, or in connection
with any Release or threatened Release or presence of a Hazardous Material
whether on, at, in, under, from or about or in the vicinity of any real or
personal property.
"Environmental Permits" means all permits, licenses, authorizations,
certificates, approvals or registrations required by any Governmental Authority
under any Environmental Laws.
"Equipment" means all "equipment," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located and,
in any event, including all such Credit Party's machinery and equipment,
including processing equipment, conveyors, machine tools, data processing and
computer equipment, including embedded software and peripheral equipment and all
engineering, processing and manufacturing equipment, office machinery,
furniture, materials handling equipment, tools, attachments, accessories,
automotive equipment, trailers, trucks, forklifts, molds, dies, stamps, motor
vehicles, rolling stock and other equipment of every kind and nature, trade
fixtures and fixtures not forming a part of real property, together with all
additions and accessions thereto, replacements therefor, all parts therefor, all
substitutes for any of the foregoing, fuel therefor, and all manuals, drawings,
instructions, warranties and rights with respect thereto, and all products and
proceeds thereof and condemnation awards and insurance proceeds with respect
thereto.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Issuance" means any issuance by Holdings or any Subsidiary
to any Person which is not a Credit Party of (a) shares of its Capital Stock,
(b) any shares of its Capital Stock pursuant to the exercise of options or
warrants or (c) any shares of its Capital Stock pursuant to the conversion of
any debt securities to equity. The term "Equity Issuance" shall not include (i)
any Asset Disposition or (ii) any debt issuance.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any regulations promulgated thereunder.
"ERISA Affiliate" means, with respect to any Credit Party, any trade
or business (whether or not incorporated) that, together with such Credit Party,
are treated as a single employer within the meaning of Sections 414(b), (c), (m)
or (o) of the IRC.
"ERISA Event" means, with respect to any Credit Party or any ERISA
Affiliate, (a) a "reportable event" described in Section 4043(c) of ERISA with
respect to a Title IV Plan for which the notice requirement has not been waived;
(b) the withdrawal of any Credit Party or ERISA Affiliate from a Title IV Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer, as defined in Section 4001(a)(2) of ERISA; (c) the
complete or partial withdrawal of any Credit Party or any ERISA Affiliate from
any Multiemployer Plan; (d) the filing of a notice of intent to terminate a
Title IV Plan or the treatment of a plan amendment as a termination under
Section 4041 of ERISA; (e) the institution of proceedings to terminate a Title
IV Plan or Multiemployer Plan by the PBGC; (f) the failure
A-11
by any Credit Party or ERISA Affiliate to make when due required contributions
to a Multiemployer Plan or Title IV Plan unless such failure is cured within 30
days; (g) any other event or condition that might reasonably be expected to
constitute grounds for the termination of, or the appointment of a trustee to
administer, any Title IV Plan or Multiemployer Plan under Section 4042 of ERISA
or for the imposition of liability under Section 4069 or 4212(c) of ERISA; (h)
the termination of a Multiemployer Plan under Section 4041A of ERISA or the
reorganization or insolvency of a Multiemployer Plan under Section 4241 or 4245
of ERISA; or (i) the loss of a Qualified Plan's qualification or tax exempt
status; or (j) the termination of a Plan described in Section 4064 of ERISA.
"ESOP" means a Plan that is intended to satisfy the requirements of
Section 4975(e)(7) of the IRC.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
or supplemented, or any successor statute, the rules and regulations promulgated
thereunder, as the same shall be in effect from time to time.
"Excluded Taxes" has the meaning ascribed to it in Section 1.11(a).
"Event of Default" has the meaning ascribed to it in Section 6.1.
"Fair Labor Standards Act" means the Fair Labor Standards Act, 29
U.S.C. ss.201 et seq.
"Fair Market Value" means, at any time, as to any Eligible Real
Estate, the fair market value as determined by the most recent appraisal thereof
obtained and approved by the Agent as of such time.
"Federal Funds Rate" means, for any day, a floating rate equal to
the weighted average of the rates on overnight federal funds transactions among
members of the Federal Reserve System, as determined by Agent in its sole
discretion, which determination shall be final, binding and conclusive (absent
manifest error).
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System.
"Fees" means any and all fees payable to Agent or any Lender
pursuant to the Agreement or any of the other Loan Documents.
"Financial Statements" means the consolidated and consolidating
income statements, statements of cash flows and balance sheets of Holdings and
its Subsidiaries delivered in accordance with Section 4.9.
"FIRREA" means the Financial Institutions Reform, Recovery and
Enforcement Act, and all regulations promulgated thereunder, in each case as
amended.
"Fiscal Month" means any of the monthly accounting periods of
Borrower.
"Fiscal Quarter" means any of the quarterly accounting periods of
Borrower, ending on January 31, April 30, July 31 and October 31 of each year.
"Fiscal Year" means any of the annual accounting periods of Borrower
ending on January 31 of each year.
A-12
"Fixed Charges" has the meaning ascribed to it in Section 4.4 of
Schedule 1 to Exhibit 4.9(k).
"Fixed Charge Coverage Ratio" has the meaning ascribed to it in
Section 4.4 of Schedule 1 to Exhibit 4.9(k).
"Fixtures" means all "fixtures" as such term is defined in the Code,
now owned or hereafter acquired by any Credit Party.
"Foreign Lender" has the meaning ascribed to it in Section 1.11(d).
"Foreign Subsidiary" means a Subsidiary of any Person that is not
organized under the laws any state of the United States of America or the
District of Columbia.
"Funded Debt" means, with respect to any Person, without
duplication, all Indebtedness for borrowed money evidenced by notes, bonds,
debentures, or similar evidences of Indebtedness and that by its terms matures
more than one year from, or is directly or indirectly renewable or extendible at
such Person's option under a revolving credit or similar agreement obligating
the lender or lenders to extend credit over a period of more than one year from
the date of creation thereof, and specifically including Capital Lease
Obligations, current maturities of long term debt, revolving credit and short
term debt extendible beyond one year at the option of the debtor, and also
including, in the case of Borrower, the Obligations (including Letter of Credit
Obligations) and, without duplication, Guaranteed Indebtedness consisting of
guaranties of Funded Debt of other Persons.
"Funding Date" has the meaning ascribed to it in Section 7.2.
"GAAP" means generally accepted accounting principles in the United
States of America, consistently applied.
"GE Capital" has the meaning ascribed to it in the Preamble.
"GE Capital Fee Letter" has the meaning ascribed to it in Section
1.3(a).
"GE Credit Agreement" means the Credit Agreement, dated as of
September 14, 2004, as amended by Waiver & Amendment No. 1, dated as of January
19, 2005 and by Consent, Waiver & Amendment No. 2, dated as of September 21,
2005, among the Borrower, the other Credit Parties identified therein and GE
Capital as Agent, L/C Issuer and a Lender.
"General Intangibles" means "general intangibles," as such term is
defined in the Code, now owned or hereafter acquired by any Credit Party,
including all right, title and interest that such Credit Party may now or
hereafter have in or under any Contractual Obligation, all payment intangibles,
customer lists, Intellectual Property, Licenses, Copyrights, Trademarks,
Patents, and all applications therefor and reissues, extensions or renewals
thereof, rights in Intellectual Property, interests in partnerships, joint
ventures and other business associations, licenses, permits, copyrights, trade
secrets, proprietary or confidential information, inventions (whether or not
patented or patentable), technical information, procedures, designs, knowledge,
know how, software, data bases, data, skill, expertise, experience, processes,
models, drawings, materials and records, goodwill (including the goodwill
associated with any Trademark or Trademark License), all rights and claims in or
under insurance policies (including insurance for fire, damage, loss and
casualty, whether covering personal property, real property, tangible rights or
intangible rights, all liability, life, key man and business interruption
insurance, and all unearned premiums), uncertificated securities, choses in
action, deposit, checking and
A-13
other bank accounts, rights to receive tax refunds and other payments, rights to
receive dividends, distributions, cash, Instruments and other property in
respect of or in exchange for pledged Stock and Investment Property, rights of
indemnification, all books and records, correspondence, credit files, invoices
and other papers, including all tapes, cards, computer runs and other papers and
documents in the possession or under the control of such Credit Party or any
computer bureau or service company from time to time acting for such Credit
Party.
"Goods" means any "goods," as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party, wherever located, including
embedded software to the extent included in "goods" as defined in the Code,
manufactured homes, standing timber that is cut and removed for sale and unborn
young of animals.
"Governmental Authority" means any nation or government, any state
or other political subdivision thereof, and any agency, department or other
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guaranteed Indebtedness" means, as to any Person, any obligation of
such Person guaranteeing, providing comfort or otherwise supporting any
Indebtedness, lease, dividend, or other obligation ("primary obligation") of any
other Person (the "primary obligor") in any manner, including any obligation or
arrangement of such Person to (a) purchase or repurchase any such primary
obligation, (b) advance or supply funds (i) for the purchase or payment of any
such primary obligation or (ii) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet condition of the primary obligor, (c) purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation, (d) protect the beneficiary of such arrangement from
loss (other than product warranties given in the ordinary course of business) or
(e) indemnify the owner of such primary obligation against loss in respect
thereof. The amount of any Guaranteed Indebtedness at any time shall be deemed
to be an amount equal to the lesser at such time of (x) the stated or
determinable amount of the primary obligation in respect of which such
Guaranteed Indebtedness is incurred and (y) the maximum amount for which such
Person may be liable pursuant to the terms of the instrument embodying such
Guaranteed Indebtedness, or, if not stated or determinable, the maximum
reasonably anticipated liability (assuming full performance) in respect thereof.
"Guaranties" means, collectively, the Guaranty of even date herewith
executed by Holdings and any other guaranty executed by any Guarantor in favor
of Agent and Lenders in respect of the Obligations, in each case, as amended,
restated, modified or supplemented from time to time.
"Guarantors" means Holdings, each Subsidiary of Borrower, and each
other Person, if any, in each case, that executes a guaranty or other similar
agreement in favor of Agent, for itself and the ratable benefit of Lenders, in
connection with the transactions contemplated by the Agreement and the other
Loan Documents.
"Hazardous Material" means any substance, material or waste that is
regulated by, or forms the basis of liability now or hereafter under, any
Environmental Laws, including any material or substance that is (a) defined as a
"solid waste," "hazardous waste," "hazardous material," "hazardous substance,"
"extremely hazardous waste," "restricted hazardous waste," "pollutant,"
"contaminant," "hazardous constituent," "special waste," "toxic substance" or
other similar term or phrase under any Environmental Laws, or (b) petroleum or
any fraction or by product thereof, asbestos, polychlorinated biphenyls (PCB's),
or any radioactive substance.
A-14
"Hedge Agreement" means an Interest Rate Agreement or a Currency
Agreement entered into with a Lender.
"Holdings" has the meaning ascribed thereto in the recitals to the
Agreement.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person (excluding accrued expenses and trade payables),
whether or not contingent: (1) in respect of borrowed money; (2) evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) (other than letters of credit
issued in respect of trade payables entered into in the ordinary course, to the
extent such obligations are cash collateralized or such letters of credit secure
obligations entered into in the normal course of business of such Person and
such letters of credit are not drawn upon or, if drawn upon, to the extent any
such drawing is reimbursed no later than three business days following receipt
by such Person of a demand for reimbursement); (3) in respect of banker's
acceptances; (4) representing Capital Lease Obligations or Attributable Debt;
(5) representing the balance deferred and unpaid of the purchase price of any
property or services due more than six months after such property is acquired or
such services are completed; (6) representing any Hedge Agreement, if and to the
extent any of the preceding items (other than letters of credit, Attributable
Debt and Hedge Agreement) would appear as a liability upon a balance sheet of
the specified Person prepared in accordance with GAAP; or (7) in respect of
earnouts and similar payment obligations. In addition, the term "Indebtedness"
includes all indebtedness of others secured by a Lien on any asset of the
specified Person (whether or not such indebtedness is assumed by the specified
Person) and, to the extent not otherwise included, Guaranteed Indebtedness of
the specified Person.
Notwithstanding the foregoing, in connection with the purchase by
Borrower or any Subsidiary of any business, the term "Indebtedness" will exclude
post-closing payment adjustments to which the seller may become entitled to the
extent such payment is determined by a final closing balance sheet or such
payment depends on the performance of such business after the closing; provided,
however, that at the time of closing, the amount of any such payment is not
determinable and, to the extent such payment thereafter becomes fixed,
determined and undisputed the amount is paid within 60 days thereafter.
"Indemnitees" has the meaning ascribed to it in Section 9.1.
"Index Rate" means, for any day, a floating rate equal to the higher
of (i) the rate publicly quoted from time to time by The Wall Street Journal as
the "base rate on corporate loans posted by at least 75% of the nation's 30
largest banks" (or, if The Wall Street Journal ceases quoting a base rate of the
type described, the highest per annum rate of interest published by the Federal
Reserve Board in Federal Reserve statistical release H.15 (519) entitled
"Selected Interest Rates" as the Bank prime loan rate or its equivalent), and
(ii) the Federal Funds Rate plus 50 basis points per annum. Each change in any
interest rate provided for in the Agreement based upon the Index Rate shall take
effect at the time of such change in the Index Rate.
"Index Rate Loan" means a Loan or portion thereof bearing interest
by reference to the Index Rate.
"Instruments" means all "instruments," as such term is defined in
the Code, now owned or hereafter acquired by any Credit Party, wherever located,
and, in any event, including transferable certificates of deposit, and all
promissory notes and other evidences of indebtedness, other than instruments
that constitute, or are a part of a group of writings that constitute, Chattel
Paper.
"Intellectual Property" means all rights, title, and interests in or
relating to intellectual property, including, as applicable, (a) all United
States and foreign counterparts to, and all divisionals,
A-15
reversions, continuations, continuations-in-part, reissues, reexaminations,
renewals and extensions of such intellectual property and all income, royalties,
proceeds and liabilities at any time due or payable or asserted under or with
respect to any of the foregoing or otherwise with respect to such intellectual
property, including all rights to xxx or recover at law or in equity for any
past, present, or future infringement, misappropriation, dilution, violation, or
other impairment thereof, arising under all Software, Licenses, Patents,
Copyrights, Trademarks, and the goodwill associated with such Trademarks, (b)
all information, without regard to form, including, but not limited to,
technical or nontechnical data, a formula, a pattern, a compilation, a program,
a device, a method, a technique, a drawing, a process, product plans, or a list
of actual or potential customers or suppliers which is not commonly known by or
available to the public and which information: (A) derives economic value,
actual or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other Persons who can obtain economic value
from its disclosure or use; and (B) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy; and (c) all other
unregistered intellectual property rights, including know-how, confidential
information, customer lists, technical documentation, technical information,
data, technology, research records, plans, drawings, schematics, compilations,
devices, formulas, designs, prototypes, methods, techniques, processes,
procedures, programs, or codes, whether tangible or intangible.
"Intercompany Debt" has the meaning ascribed to it in Section 9.21.
"Intercompany Notes" has the meaning ascribed to it in Section 3.1.
"Intercreditor Agreement" means any intercreditor agreement entered
into as contemplated by clause (l) of the definition of Permitted Encumbrance.
"Interest Charges" means, with respect to any specified Person for
any period, the sum, without duplication, of:
(a) the consolidated interest expense of such Person and its
Subsidiaries for such period, whether paid or accrued, including, without
limitation, amortization of debt issuance costs and original issue discount,
non-cash interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with Capital
Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of
letter of credit or bankers' acceptance financings, and net of the effect of
all payments made or received pursuant to Hedge Agreement (but, in
calculating Interest Charges for the purposes of determining the denominator
of Interest Coverage Ratio only, excluding any one-time non-cash charges or
expenses associated with the write off of deferred debt issuance costs
relating to (A) Indebtedness that is retired with the proceeds of the Senior
Notes issued on the Closing Date or (B) the repayment or retirement of the
Obligations or the Senior Notes); plus
(b) the consolidated interest expense of such Person and its
Subsidiaries that was capitalized during such period; plus
(c) any interest on Indebtedness of another Person that is
guaranteed by such Person or one of its Subsidiaries or secured by a Lien on
assets of such Person or one of its Subsidiaries, whether or not such
Guarantee or Lien is called upon; plus
(d) the product of (a) all dividends, whether paid or accrued and
whether or not in cash, on any series of preferred stock or Disqualified
Stock of such Person or any preferred stock of any of its Subsidiaries, other
than dividends on Equity Interests payable solely in Equity Interests of
Borrower (other than Disqualified Stock) or to Borrower or a Subsidiary of
Borrower, times (b) a
A-16
fraction, the numerator of which is one and the denominator of which is one
minus the then current combined federal, state and local statutory tax rate
of such Person, expressed as a decimal,
in each case, determined on a consolidated basis in accordance with
GAAP.
"Interest Coverage Ratio" means with respect to any specified Person
for any period, the ratio of the Consolidated Cash Flow of such Person for such
period to the Interest Charges of such Person for such period. In the event that
the specified Person or any of its Subsidiaries incurs, assumes, guarantees,
repays, repurchases, redeems, defeases or otherwise discharges any Indebtedness
(other than ordinary working capital borrowings) or issues, repurchases or
redeems preferred stock subsequent to the commencement of the period for which
the Interest Coverage Ratio is being calculated and on or prior to the date on
which the event for which the calculation of the Interest Coverage Ratio is made
(the "Calculation Date"), then the Interest Coverage Ratio will be calculated
giving pro forma effect to such incurrence, assumption, guarantee, repayment,
repurchase, redemption, defeasance or other discharge of Indebtedness, or such
issuance, repurchase or redemption of preferred stock, and the use of the
proceeds therefrom, as if the same had occurred at the beginning of the
applicable four-quarter reference period.
In addition, for purposes of calculating the Interest Coverage
Ratio:
(a) the Acquisition, future acquisitions, dispositions, mergers,
consolidations and discontinued operations that have been made by the
specified Person or any of its Subsidiaries, including through mergers or
consolidations, or any Person or any of its Subsidiaries acquired by the
specified Person or any of its Subsidiaries, and including any related
financing transactions and including increases in ownership of Subsidiaries,
during the four-quarter reference period or subsequent to such reference
period and on or prior to the Calculation Date will be given pro forma effect
(in accordance with Regulation S-X under the Securities Act), including Pro
Forma Cost Savings, whether or not such Pro Forma Cost Savings complies with
Regulation S-X, as if they had occurred on the first day of the four-quarter
reference period;
(b) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses (and ownership interests therein) disposed of prior to the
Calculation Date, will be excluded (including by adding back the amount of
any attributable Consolidated Cash Flow that was negative);
(c) the Interest Charges attributable to discontinued operations,
as determined in accordance with GAAP, and operations or businesses (and
ownership interests therein) disposed of prior to the Calculation Date, will
be excluded, but only to the extent that the obligations giving rise to such
Interest Charges will not be obligations of the specified Person or any of
its Subsidiaries following the Calculation Date;
(d) any Person that is a Subsidiary on the Calculation Date will
be deemed to have been a Subsidiary at all times during such four-quarter
period;
(e) any Person that is not a Subsidiary on the Calculation Date
will be deemed not to have been a Subsidiary at any time during such
four-quarter period; and
(f) if any Indebtedness bears a floating rate of interest, the
interest expense on such Indebtedness will be calculated as if the rate in
effect on the Calculation Date had been the applicable rate for the entire
period (taking into account any obligation under any Hedge Agreement
applicable to such Indebtedness if such obligation has a remaining term as at
the Calculation Date in excess of 12 months).
A-17
"Interest Payment Date" means (a) as to any Index Rate Loan, the
last day of each Fiscal Quarter while such Loan is outstanding, and (b) as to
any LIBOR Loan, the last day of the applicable LIBOR Period; provided, that in
the case of any LIBOR Period greater than three months in duration, interest
shall be payable at three month intervals and on the last day of such LIBOR
Period; and provided further that, in addition to the foregoing, each of (x) the
date upon which all of the Commitments have been terminated and the Loans have
been paid in full and (y) the Commitment Termination Date shall be deemed to be
an "Interest Payment Date" with respect to any interest that has then accrued
under the Agreement.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or similar agreement
or arrangement designed to protect Borrower against fluctuations in interest
rates entered into by Borrower and any Lender.
"Interim Financing" means a financing, in lieu of the issuance of
Senior Notes, to finance the Acquisition, on terms and conditions reasonably
acceptable to Agent, including any bridge loans and any exchange notes issued in
order to retire such bridge loans.
"Inventory" means any "inventory," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located,
including inventory, merchandise, goods and other personal property that are
held by or on behalf of any Credit Party for sale or lease or are furnished or
are to be furnished under a contract of service, or that constitute raw
materials, work in process, finished goods, returned goods, supplies or
materials of any kind, nature or description used or consumed or to be used or
consumed in such Credit Party's business or in the processing, production,
packaging, promotion, delivery or shipping of the same.
"Investment" means, with respect to any Person, all direct or
indirect investments by such Person in other Persons (including Affiliates) in
the forms of loans (including Guaranteed Indebtedness or other obligations),
advances or capital contributions (excluding (i) commission, travel and similar
advances to officers and employees made in the ordinary course of business and
(ii) extensions of credit to customers or advances, deposits or payments to or
with suppliers, lessors or utilities or for workers' compensation, in each case,
that are incurred in the ordinary course of business and recorded as accounts
receivable, prepaid expenses or deposits on the balance sheet of such Person
prepared in accordance with GAAP), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities, together
with all items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP. If Holdings or any Subsidiary of Holdings
sells or otherwise disposes of any Equity Interests of any direct or indirect
Subsidiary of Holdings such that, after giving effect to any such sale or
disposition, such Person is no longer a Subsidiary of Holdings, Holdings or such
Subsidiary, as applicable, will be deemed to have made an Investment on the date
of any such sale or disposition equal to the fair market value of Holdings' or
such Subsidiary's Investments in such Subsidiary that were not sold or disposed
of in an amount determined as provided in Section 3.5(c). Except as otherwise
provided in the indenture, the amount of an Investment will be determined at the
time the Investment is made and without giving effect to subsequent changes in
value.
"Investment Property" means all "investment property," as such term
is defined in the Code, now owned or hereafter acquired by any Credit Party,
wherever located, including: (i) all securities, whether certificated or
uncertificated, including stocks, bonds, interests in limited liability
companies (that constitute securities under Article 8 of the Code), partnership
interests (that constitute securities under Article 8 of the Code), treasuries
and mutual fund shares; (ii) all securities entitlements of any Credit Party,
including the rights of such Credit Party to any securities account and the
financial assets held by a securities intermediary in such securities account
and any free credit balance or other money owing by any securities intermediary
with respect to that account; (iii) all securities accounts of any
A-18
Credit Party; (iv) all commodity contracts of any Credit Party; and (v) all
commodity accounts held by any Credit Party.
"IRC" means the Internal Revenue Code of 1986, as amended, and all
regulations promulgated thereunder.
"IRS" means the Internal Revenue Service.
"L/C Issuer" means GE Capital or a Subsidiary thereof or a bank or
other legally authorized Person selected by or acceptable to Agent in its sole
discretion, in such Person's capacity as an issuer of Letters of Credit
hereunder.
"L/C Sublimit" has the meaning ascribed to it in Section 1.1(d).
"Lenders" means GE Capital, the other Lenders named on the signature
pages of the Agreement, and, if any such Lender shall decide to assign all or
any portion of the Obligations, such term shall include any permitted assignee
of such Lender.
"Letters of Credit" means documentary or standby letters of credit
issued for the account of Borrower by L/C Issuers, and bankers' acceptances
issued by Borrower, for which Agent and Lenders have incurred Letter of Credit
Obligations.
"Letter of Credit Fee" has the meaning ascribed to it in Section
1.3(d).
"Letter of Credit Obligations" means all outstanding obligations
incurred by Agent and Lenders at the request of Borrower, whether direct or
indirect, contingent or otherwise, due or not due, in connection with the
issuance of Letters of Credit by L/C Issuers or the purchase of a participation
as set forth in Section 1.1(d) with respect to any Letter of Credit. The amount
of such Letter of Credit Obligations shall equal the maximum amount that may be
payable by Agent and Lenders thereupon or pursuant thereto.
"Liberty Loan Agreement" means the Loan Agreement dated as of
November 1, 1999 among Liberty Partners Lenders 10, LLC, Liberty Holdings 10,
LLC, and Xxxxxx Tube, Inc., as amended by First Amendment of Loan Agreement,
dated as of February 3, 2000, Second Amendment of Loan Agreement, dated as of
March 15, 2002 and Third Amendment to Loan Agreement and Term Note, dated as of
September 14, 2004, and as further amended, modified, restated, refinanced,
replaced, supplemented or otherwise modified from time to time.
"LIBOR Breakage Fee" means an amount equal to the amount of any
losses, expenses, liabilities (including, without limitation, any loss
(including interest paid) in connection with the re-employment of such funds)
that any Lender may sustain as a result of (i) any default by Borrower in making
any borrowing of, conversion into or continuation of any LIBOR Loan following
Borrower's delivery to Agent of any LIBOR Loan request in respect thereof or
(ii) any payment of a LIBOR Loan on any day that is not the last day of the
LIBOR Period applicable thereto (regardless of the source of such prepayment and
whether voluntary, by acceleration or otherwise). For purposes of calculating
amounts payable to a Lender under Section 1.3(e), each Lender shall be deemed to
have actually funded its relevant LIBOR Loan through the purchase of a deposit
bearing interest at the LIBOR Rate in an amount equal to the amount of that
LIBOR Loan and having a maturity and repricing characteristics comparable to the
relevant LIBOR Period; provided, however, that each Lender may fund each of its
LIBOR Loans in any manner it sees fit, and the foregoing assumption shall be
utilized only for the calculation of amounts payable under Section 1.3(e).
A-19
"LIBOR Business Day" means a Business Day on which banks in the City
of London are generally open for interbank or foreign exchange transactions.
"LIBOR Loans" means a Loan or any portion thereof bearing interest
by reference to the LIBOR Rate.
"LIBOR Period" means, with respect to any LIBOR Loan, each period
commencing on a LIBOR Business Day selected by Borrower pursuant to the
Agreement and ending one, two, three or six months thereafter, as selected by
Borrower's irrevocable notice to Agent as set forth in Section 1.2(e); provided,
that the foregoing provision relating to LIBOR Periods is subject to the
following:
(a) if any LIBOR Period would otherwise end on a day that is not a
LIBOR Business Day, such LIBOR Period shall be extended to the next
succeeding LIBOR Business Day unless the result of such extension would be
to carry such LIBOR Period into another calendar month in which event such
LIBOR Period shall end on the immediately preceding LIBOR Business Day;
(b) any LIBOR Period that would otherwise extend beyond the date
set forth in clause (a) of the definition of "Commitment Termination Date"
shall end two (2) LIBOR Business Days prior to such date;
(c) any LIBOR Period that begins on the last LIBOR 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 LIBOR Period)
shall end on the last LIBOR Business Day of a calendar month;
(d) Borrower shall select LIBOR Periods so as not to require a
payment or prepayment of any LIBOR Loan during a LIBOR Period for such
Loan; and
(e) Borrower shall select LIBOR Periods so that there shall be no
more than 10 separate LIBOR Loans in existence at any one time.
"LIBOR Rate" means for each LIBOR Period, a rate of interest
determined by Agent equal to:
(a) the offered rate for deposits in United States Dollars for the
applicable LIBOR Period that is published by the British Bankers'
Association and currently appears on Telerate Page 3750 as of 11:00 a.m.
(London time), on the second full LIBOR Business Day next preceding the
first day of such LIBOR Period (unless such date is not a Business Day, in
which event the next succeeding Business Day will be used); divided by
(b) a number equal to 1.0 minus the aggregate (but without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the day that is two (2) LIBOR Business Days
prior to the beginning of such LIBOR Period (including basic,
supplemental, marginal and emergency reserves under any regulations of the
Federal Reserve Board or other Governmental Authority having jurisdiction
with respect thereto, as now and from time to time in effect) for
Eurocurrency funding (currently referred to as "Eurocurrency Liabilities"
in Regulation D of the Federal Reserve Board that are required to be
maintained by a member bank of the Federal Reserve System.
If such interest rates shall cease to be available from Telerate
News Service, the LIBOR Rate shall be determined from such financial reporting
service or other information as shall be available to Agent.
A-20
"License" means any Copyright License, Patent License, Trademark
License or other license of rights or interests now held or hereafter acquired
by any Credit Party.
"Lien" means any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, security interest, easement or
encumbrance, or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever, in each case for the purpose of
securing payment or performance (including any title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of, or agreement to give, any financing statement
perfecting a security interest under the Code or comparable law of any
jurisdiction, but excluding any financing statement filed for precautionary
purposes in connection with an operating lease).
"Litigation" has the meaning ascribed to it in Section 4.9(i).
"Loan Account" as the meaning ascribed to it in Section 1.9.
"Loan Documents" means the Agreement, the Notes, the Collateral
Documents, the GE Capital Fee Letter and all other agreements, instruments,
documents and certificates identified in the Closing Checklist or hereafter
executed by or on behalf of any Credit Party, or any employee of any Credit
Party, and delivered to Agent or any Lender in connection with the Agreement or
the transactions contemplated thereby. Any reference in the Agreement or any
other Loan Document to a Loan Document shall include all appendices, exhibits or
schedules thereto, and all amendments, restatements, supplements or other
modifications thereto, and shall refer to the Agreement or such Loan Document as
the same may be in effect at any and all times such reference becomes operative.
"Loans" means the Revolving Loan and the Swing Line Loan.
"Management Agreement" means that certain Management Agreement dated
as of February 7, 2006, by and among Xxxxxx Xxxxxx, Inc., Holdings, Borrower and
RGCH Holdings LLC, as in existence as of the Closing Date.
"Master Documentary Agreement" means the Master Agreement for
Documentary Letters of Credit, dated as of the Closing Date, among the Borrower,
as applicant, and GE Capital, as L/C Issuer, as amended, restated, modified or
supplemented from time to time.
"Master Standby Agreement" means the Master Agreement for Standby
Letters of Credit, dated as of the Closing Date, among the Borrower, as
applicant, and GE Capital, as L/C Issuer, as amended, restated, modified or
supplemented from time to time.
"Material Adverse Effect" means a material adverse effect on (a) the
financial condition, assets, properties or operating results of the Credit
Parties considered as a whole, (b) the Borrower's ability to pay any of the
Loans or any of the other Obligations in accordance with the terms of the
Agreement, (c) the Collateral or Agent's Liens, on behalf of itself and Lenders,
on the Collateral or the priority of such Liens, or (d) Agent's or any Lender's
rights and remedies under the Agreement and the other Loan Documents; provided,
however, that the following shall in no event be deemed to be a Material Adverse
Effect: (i) any effect or change (including any change in the laws, rules,
regulations, orders, or other binding directives issued by any governmental or
regulatory authority) which effects generally the United States economy or the
Borrower's industry as a whole except for those effects or changes that
disproportionately affect the Borrower and its Subsidiaries, taken as a whole;
(ii) any national or international political or social conditions, including the
engagement by the United States in hostilities, whether or not pursuant to the
declaration of a national emergency of war, or the occurrence of
A-21
any military or terrorist attack upon the United States, or any of its
territories, possessions, or diplomatic or consular offices or upon any military
installation, equipment or personnel of the United States except for those
effects or changes that disproportionately affect the Borrower and its
Subsidiaries, taken as a whole; or (iii) any adverse change, effect, event,
occurrence, state of facts or development arising from or relating to financial,
banking, or securities markets (including any disruption thereof or any decline
in the price of securities generally or any market or index).
"Maximum Amount" means, as of any date of determination, an amount
equal to the Revolving Loan Commitment of all Lenders as of that date.
"Maximum Lawful Rate" has the meaning ascribed to it in
Section 1.2(f).
"Xxxxx'x" means Xxxxx'x Investor's Services, Inc.
"Mortgages" means each of the mortgages, deeds of trust, collateral
assignments of leases or other real estate security documents delivered by any
Credit Party to Agent on behalf of itself and Lenders with respect to the Real
Estate.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA, and to which any Credit Party or ERISA Affiliate is
making, is obligated to make, contributions on behalf of participants who are or
were employed by any of them.
"Net Income" means, with respect to any specified Person, the net
income (or loss) of such Person, determined in accordance with GAAP and before
any reduction in respect of preferred stock dividends, excluding, however: (1)
any gain (or loss), together with any related provision for taxes on such gain
(or loss), realized in connection with: (a) any Asset Sale (as such term is
defined as of the Closing Date in the Senior Notes Documents and without giving
effect to the $2,000,000 threshold provided in such definition of "Asset Sale"),
or abandonment and reserves relating thereto; or (b) the disposition of any
securities by such Person or any of its Subsidiaries or the extinguishment of
any Indebtedness of such Person or any of its Subsidiaries; (2) any
extraordinary gain (or loss), together with any related provision for taxes on
such extraordinary gain (or loss); and (3) any unrealized non-cash gains or
losses in respect of Hedge Agreement (including those resulting from the
application of FAS 133), to the extent that such gains or losses are deducted in
computing Net Income.
"Net Orderly Liquidation Value" means, as to any asset at any time,
the net orderly liquidation value of such asset based on the most recent
appraisal prepared for Agent as to such asset as of such time.
"Net Proceeds" means (a) with respect to Asset Dispositions, the
aggregate cash proceeds received by Borrower or any of its Subsidiaries in
respect of any Asset Disposition (including, without limitation, any cash
received upon the sale or other disposition of any non-cash consideration), net
of the direct costs relating to such Asset Disposition, including, without
limitation, legal, accounting and investment banking fees, appraisal and
insurance adjuster fees and sales commissions, and any relocation expenses
incurred as a result of the Asset Disposition, taxes paid or payable as a result
of the Asset Disposition, in each case, after taking into account without
duplication, (1) any amounts required to be applied to the repayment of
Indebtedness secured by a Lien on the assets that were the subject of such Asset
Disposition, (2) any reserve or payment with respect to liabilities associated
with such asset or assets and retained by Borrower or a Subsidiary after such
sale or other disposition thereof, including, without limitation, severance
costs, pension and other post-employment benefit liabilities and liabilities
related to environmental matters or against any indemnification obligations
associated with such transaction, (3) any reserves for adjustment in respect of
the sale price of such asset, and (4) any cash
A-22
escrows in connection with purchase price adjustments, reserves or indemnities
(until released) and (b) with respect to any sale or issuance of Stock, the cash
proceeds received from any sale or issuance of Stock, in each case, net of
brokers', advisors' and investment banking fees and other out-of-pocket
underwriting discounts, commissions and other out-of-pocket cash costs, fees and
expenses, in each case, incurred in connection with such transaction.
"Non-Consenting Lender" has the meaning ascribed to it in Section
9.19(c).
"Non-Excluded Taxes" has the meaning ascribed to it in Section
1.11(a).
"Non-Funding Lender" has the meaning ascribed to it in Section
8.5(a).
"Notes" means, collectively, the Revolving Notes and the Swing Line
Note.
"Notice of Conversion/Continuation" has the meaning ascribed to it
in Section 1.2(e).
"Notice of Revolving Credit Advance" has the meaning ascribed to it
in Section 1.1(a).
"Obligations" means all loans, advances, debts, liabilities and
obligations, for the performance of covenants, tasks or duties or for payment of
monetary amounts (whether or not such performance is then required or
contingent, or such amounts are liquidated or determinable), including
obligations pursuant to Interest Rate Agreements and Letter of Credit
Obligations, owing by any Credit Party to Agent or any Lender, and all covenants
and duties regarding such amounts, of any kind or nature, present or future,
whether or not evidenced by any note, agreement or other instrument, arising
under the Agreement or any of the other Loan Documents. This term includes all
principal, interest (including all interest that accrues after the commencement
of any case or proceeding by or against any Credit Party in bankruptcy, whether
or not allowed in such case or proceeding), Fees, Charges, expenses, attorneys'
fees and any other sum chargeable to any Credit Party under the Agreement or any
of the other Loan Documents.
"Other Lender" has the meaning ascribed to it in Section 8.5(d).
"Other Taxes" has the meaning ascribed to it in Section 1.11(c).
"Overadvance" has the meaning ascribed to it in Section 1.1(a).
"Patent License" means rights under any written agreement now owned
or hereafter acquired by any Credit Party granting any right with respect to any
invention on which a Patent is in existence.
"Patent Security Agreements" means the Patent Security Agreements
made in favor of Agent, on behalf of itself and Lenders, by each applicable
Credit Party, as amended, restated, modified or supplemented from time to time,
in the form of Exhibit C.
"Patents" means all of the following in which any Credit Party now
holds or hereafter creates or acquires any interest in: (a) inventions and
discoveries that may be patentable, (b) all letters patent of the United States
or any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or of any other country,
including registrations, recordations and applications in the United States
Patent and Trademark Office or in any similar office or agency of the United
States, any State or any other country, and (c) all reissues, divisions,
continuations, continuations-in-part or extensions thereof.
A-23
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means a Plan described in Section 3(2) of ERISA.
"Permitted Acquisition" has the meaning ascribed to it in Section
3.6.
"Permitted Encumbrances" means the following encumbrances:
(i) Liens on assets of the applicable Foreign Subsidiary
securing Indebtedness (including Capital Lease Obligations) or Attributable Debt
and other obligations in respect thereof in an amount when incurred, together
with the aggregate amount of all other Indebtedness and other obligations at
that time outstanding secured by a Lien pursuant to this clause (i), not to
exceed the aggregate amount of Indebtedness and Attributable Debt that has been
incurred and such additional debt as would be permitted to be incurred at such
time under Section 3.1(b)(xv) and/or securing Hedge Agreement of such Foreign
Subsidiary related thereto;
(ii) Liens in favor of Borrower or the Guarantors;
(iii) Liens on property of a Person existing at the time
such Person is merged with or into or consolidated with Borrower or any
Subsidiary of Borrower; provided that such Liens were in existence prior to and
were not incurred in connection with or in the contemplation of such merger or
consolidation and do not extend to any assets other than those of the Person
merged into or consolidated with Borrower or the Subsidiary;
(iv) Liens on property (including Capital Stock) existing
at the time of acquisition of the property by Holdings or any Subsidiary of
Holdings; provided that such Liens were in existence prior to, such acquisition,
and not incurred in contemplation of, such acquisition;
(v) Liens to secure the performance of tenders, completion
guarantees, statutory obligations, surety or appeal bonds, bids, leases
performance bonds or other obligations of a like nature incurred in the ordinary
course of business in an amount not to exceed $1,000,000 in the aggregate
outstanding at any time;
(vi) Liens existing on the date hereof and listed on
Schedule 3.2;
(vii) Liens for taxes, assessments or governmental charges
or claims that (x) are not yet delinquent or that are being contested in good
faith by appropriate proceedings promptly instituted and diligently concluded
and (y) in the case of Liens in respect of federal or state income taxes, do not
have priority in any respect over the Lien of the Agent securing the
Obligations; provided that any reserve or other appropriate provision as is
required in conformity with GAAP has been made therefor;
(viii) Liens imposed by law, such as carriers'
warehousemen's, landlords', mechanics', suppliers, materialmen's and repairmen's
Liens, or in favor of customs or revenue authorities or freight forwarders or
handlers to secure payment of custom duties, in each case, incurred in the
ordinary course of business;
(ix) survey exceptions, easements or reservations of, or
rights of others for or pursuant to any leases, licenses, rights-of-way, or
other similar agreements or arrangements, development, air or water rights,
sewers, electric lines, telegraph and telephone lines and other utility lines,
pipelines, service lines, railroad lines, improvements and structures located
on, over or under any property, drains, drainage ditches, culverts, electric
power or gas generating or co-generation, storage and transmission
A-24
facilities and other similar purposes, or zoning or other restrictions as to the
use of real property which were not incurred to secure the payment of
Indebtedness and that do not in the aggregate materially adversely affect the
value of said properties or materially impair their use in the operation of the
business of such Person;
(x) Liens created for the benefit of (or to secure) the
Obligations;
(xi) Liens to secure any Permitted Refinancing Indebtedness
permitted to be incurred hereunder; provided, however, that the new Lien shall
be limited to all or part of the same property and assets that secured or, under
the written agreements pursuant to which the Indebtedness being refinanced
arose, could secure the original Lien (plus improvements and accessions to, such
property or proceeds or distributions thereof) and shall be subject to any
intercreditor agreement to which such prior Lien was subject;
(xii) Liens upon specific items of inventory or other goods
and proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other goods;
(xiii) judgment and attachment Liens not giving rise to an
Event of Default and notices of lis pendens and associated rights related to
litigation being contested in good faith by appropriate proceedings and for
which adequate reserves have been made in conformity with GAAP;
(xiv) Liens securing Indebtedness arising in connection with
Hedge Agreements incurred pursuant to Section 3.1(b)(ix);
(xv) any extension, renewal or replacement, in whole or in
part, of any Lien described in clauses (vi), (vii), (xvi), or (xvii) of this
definition of Permitted Encumbrances; provided that any such extension, renewal
or replacement is no more restrictive in any material respect than the Lien so
extended, renewed or replaced and does not extend to any additional property or
assets, in conformity with GAAP and shall be subject to any intercreditor
agreement to which such prior Lien was subject;
(xvi) any interest or title of a lessor, licensor or
sublicense under any operating lease, license or sublicense, as applicable;
(xvii) Liens in favor of collecting or payor banks having a
right of setoff, revocation, refund or chargeback with respect to money or
instruments of Borrower or any Subsidiary thereof on deposit with or in
possession of such bank;
(xviii) Liens securing other Indebtedness incurred in
accordance with the terms of this Agreement so long as the holders of such
Indebtedness and the holders of such Liens have entered into intercreditor
agreements in form and substance satisfactory in all respects to the Agent; and
(xix) Liens incurred or pledges or deposits made in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security and employee health
and disability benefits, or casualty or liability insurance or self insurance.
"Permitted Holders" means (1) Xxxxxx Xxxxxx Partners IV, L.P. and
any Person controlling, controlled by, or under common control with, and any
account controlled or managed by or under common control or management with
Xxxxxx Xxxxxx Partners IV, L.P. or (2) Xxxxxx Xxxxxx Inc. and employees,
management and directors of (including any of their heirs), and Persons owning
accounts managed or advised by or controlled by, any of the foregoing and their
respective Affiliates.
A-25
"Permitted Investments" means any:
(i) Investment in (x) Borrower or in a Subsidiary of
Borrower that is a Credit Party or (y) in a Foreign Subsidiary or a Person that
is not and is not required to be a Credit Party so long as the total amount of
Investments under this clause (y) shall not exceed, together with other
Investments under this clause (y), the then outstanding amount of intercompany
Indebtedness under Section 3.1(b)(vii)(e), the then outstanding guarantees and
Guaranteed Indebtedness under Section 3.1(b)(x), and the total consideration in
respect of Permitted Acquisitions described in Section 3.6(ii)(G), $5,000,000;
(i) any Investment in Cash Equivalents;
(ii) Permitted Acquisitions;
(iii) any Investment made as a result of the receipt of
non-cash consideration from (a) an Asset Disposition that was made pursuant to
and in compliance with Section 3.7 or (b) a sale or other disposition of assets
not constituting an Asset Disposition;
(iv) omitted.
(v) any acquisition of assets or Capital Stock solely in
exchange for the issuance of Equity Interests (other than Disqualified Stock) of
Borrower, Holdings, or a direct or indirect parent of Holdings;
(vi) any Investment acquired by Holdings or any of its
Subsidiaries (i) in exchange for any other Investment or accounts receivable
held by Holdings or any such Subsidiary in connection with or as a result of a
bankruptcy, workout, reorganization or recapitalization of a Person or the good
faith settlement of delinquent obligations of a Person or of a litigation
arbitration or other dispute, or (ii) result of a foreclosure by Holdings or any
of its Subsidiaries with respect to any secured Investment or other transfer of
title with respect to any secured Investment in default;
(vii) Investments represented by Hedge Agreements;
(viii) loans or advances to employees made in the ordinary
course of business of Holdings or any Subsidiary of Borrower in an aggregate
principal amount not to exceed $1,000,000 at any one time outstanding;
(ix) repurchases of the Senior Notes in accordance with
Section 3.18(viii);
(x) any Investment of Holdings or any of its Subsidiaries
existing on the Closing Date and any extension, modification or renewal of such
existing Investments, to the extent not involving any additional Investment
other than as the result of the accrual or accretion of interest or original
issue discount or the issuance of pay-in-kind securities, in each case pursuant
to the terms of such Investments as in effect on the date of the indenture;
(xi) guarantees otherwise permitted by Section 3.1;
(xii) Investments resulting from the acquisition of a
Person, otherwise permitted by this Agreement, which Investments at the time of
such acquisition were held by the acquired Person and were not acquired in
contemplation of the acquisition of such Person;
A-26
(xiii) other Investments not exceeding $10,000,000 in the
aggregate so long as no Event of Default has occurred and is continuing or would
be caused thereby and after giving effect thereto (1) Borrowing Availability
shall be at least $10,000,000 and (2), on a pro forma basis for the period of
four Fiscal Quarters for which financial statements have been delivered
hereunder to the Agent ending on or most recently prior to such payment, as
though such payment occurred on the first day of such period, the Fixed Charge
Coverage Ratio shall be at least 1.0:1.0; and
(xiv) Investments consisting of the licensing or
contribution of intellectual property pursuant to joint marketing arrangements
with other Persons.
"Permitted Payments to Parent" means, without duplication as to
amounts:
(a) payments to Holdings or any other direct or indirect parent of
Borrower to permit such direct or indirect parent to pay reasonable
accounting, legal and administrative expenses of such Person when due, in an
aggregate amount not to exceed $500,000 per annum (or $1,000,000 per annum
following the completion of an underwritten public offering of common stock
of any such direct or indirect parent holding company); and
(b) for so long as Borrower is a member of a group filing a
consolidated or combined tax return with Holdings or any other direct or
indirect parent of Borrower, payments to such direct or indirect parent in
respect of an allocable portion of the federal and state taxes then due and
owing by such group that are attributable to Borrower and its Subsidiaries
("Tax Payments") and to pay franchise or similar taxes and fees of such
direct or indirect parent required to maintain such direct or indirect
parent's corporate existence. The Tax Payments shall not exceed the lesser of
(i) the amount of the relevant tax (including any penalties and interest)
that Borrower would owe if Borrower were filing a separate tax return (or a
separate consolidated or combined return with its Subsidiaries that are
members of the consolidated or combined group), taking into account any
carryovers and carrybacks of tax attributes (such as net operating losses) of
Borrower and such Subsidiaries from other taxable years and (ii) the net
amount of the relevant tax that Holdings or such other direct or indirect
parent actually owes to the appropriate taxing authority. Any Tax Payments
received from Borrower shall be paid over to the appropriate taxing authority
within fifteen (15) days of direct or indirect parent's receipt of such Tax
Payments or refunded to Borrower.
"Permitted Refinancing Indebtedness" means any Indebtedness of
Holdings or any of its Subsidiaries issued in exchange for, or the net proceeds
of which are used to renew, refund, refinance, replace, defease or discharge
other Indebtedness of Holdings or any of its Subsidiaries (other than
intercompany Indebtedness); provided that:
(i) the principal amount (or accreted value, if
applicable) of such Permitted Refinancing Indebtedness does not exceed the
principal amount (or accreted value, if applicable) of the Indebtedness renewed,
refunded, refinanced, replaced, defeased or discharged (plus all accrued
interest on the Indebtedness and the amount of all fees and expenses, including
the amount of any reasonably determined premium and defeasance costs, incurred
in connection therewith and other amounts necessary to accomplish such
refinancing);
(ii) such Permitted Refinancing Indebtedness has a final
maturity date equal to or later than the final maturity date of, and has a
Weighted Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Indebtedness being renewed, refunded, refinanced,
replaced, defeased or discharged;
A-27
(iii) if the Indebtedness being renewed, refunded,
refinanced, replaced, defeased or discharged is subordinated in right of payment
to the notes, such Permitted Refinancing Indebtedness is subordinated in right
of payment to, the notes on terms, taken as a whole, at least as favorable to
the holders of notes as those contained in the documentation governing the
Indebtedness being renewed, refunded, refinanced, replaced, defeased or
discharged; and
(iv) such Indebtedness is incurred either by Holdings or by
the Subsidiary who is the obligor on the Indebtedness being renewed, refunded,
refinanced, replaced, defeased or discharged and by no other obligor and is on
terms no less favorable to Holdings or such Subsidiary than those of the
Indebtedness being renewed, refunded, refinanced, replaced, defeased or
discharged.
"Person" means any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
limited liability company, institution, public benefit corporation, other entity
or government (whether federal, state, county, city, municipal, local, foreign,
or otherwise, including any instrumentality, division, agency, body or
department thereof).
"Plan" means, an "employee benefit plan," as defined in Section 3(3)
of ERISA, that any Credit Party maintains, contributes to or has an obligation
to contribute to on behalf of participants who are or were employed by any
Credit Party.
"Pledge Agreements" means, the Pledge Agreement of even date
herewith executed by Holdings in favor of Agent, on behalf of itself and
Lenders, pledging all Stock of its Domestic Subsidiaries and 65% of the voting
Stock and 100% of the non-voting Stock of Foreign Subsidiaries owned directly by
Holdings or any Domestic Subsidiary of Holdings, if any, and all Intercompany
Notes owing to or held by them and any other pledge agreement entered into after
the Closing Date by any Credit Party, in each case, as amended, restated,
modified or supplemented from time to time.
"Principals" means (i) Xxxxxx Xxxxxx Partners IV, L.P., a Delaware
limited partnership or any Affiliate thereof or any fund or account controlled
or managed by or under common control with Xxxxxx Xxxxxx Partners IV, L.P. or
any Affiliate thereof, (ii) Xxxxxx Xxxxxx, Inc. and its employees, management
and directors, (iii) Xxxxxx Xxxxxx, (iv) Xxxxxxx Xxxxxxx, and (v) C. Xxxxxxx
Xxxxxxxx, Jr.
"Prior Lenders" means GE Capital, the State Board Administration of
Florida and Liberty Partners Lenders 10, LLC.
"Prior Lender Obligations" means the obligations, liabilities and
indebtedness of RathGibson, Inc. arising under the GE Credit Agreement, the
Liberty Loan Agreement and the State Board Subordinated Loan Agreement.
"Pro Forma" means the unaudited consolidated and consolidating
balance sheets of Holdings and its Subsidiaries prepared in accordance with GAAP
as of October 31, 2005, after giving effect to the Related Transactions. The Pro
Forma is annexed hereto as Annex D.
"Pro Forma Cost Savings" means, with respect to any period, the
reduction in net costs and related adjustments that (i) were directly
attributable to an acquisition that occurred during the four quarter period or
after the end of the four quarter period and on or prior to the Calculation Date
and calculated on a basis that is consistent with Regulation S-X under the
Securities Act as in effect and applied as of the date of the indenture, (ii)
were actually implemented by the business that was the subject of any such
acquisition within six months after the date of the acquisition and prior to the
Calculation Date that are supportable and quantifiable by the underlying
accounting records of such business or (iii) relate to the business that is the
subject of any such acquisition and that Borrower reasonably determines
A-28
are probable based upon specifically identifiable actions to be taken within six
months of the date of the acquisition and, in the case of each of (i), (ii) and
(iii), are described, as provided below, in an certificate, as if all such
reductions in costs had been effected as of the beginning of such period. Pro
Forma Cost Savings described above, shall have been (in the case of clause (iii)
only) approved by the Agent, shall be accompanied by a certificate delivered to
the Agent from Borrower's chief financial officer that outlines the specific
actions taken or to be taken, the net cost savings achieved or to be achieved
from each such action and that, in the case of clause (iii) above, such savings
have been determined to be probable.
"Pro Rata Share" means with respect to all matters relating to any
Lender (a) with respect to the Revolving Loan, the percentage obtained by
dividing (i) the Revolving Loan Commitment of that Lender by (ii) the aggregate
Revolving Loan Commitments of all Lenders, and (b) with respect to all Loans on
and after the Commitment Termination Date, the percentage obtained by dividing
(i) the aggregate outstanding principal balance of the Loans held by that
Lender, by (ii) the outstanding principal balance of the Loans held by all
Lenders, as such percentages may be adjusted by assignments pursuant to Section
8.1.
"Projections" means Holdings' forecasted consolidated and
consolidating: (a) balance sheets; (b) profit and loss statements; (c) cash flow
statements; and (d) capitalization statements, and consistent with the
historical Financial Statements of Holdings, together with appropriate
supporting details and a statement of underlying assumptions.
"Proposed Change" has the meaning ascribed to it in Section 9.19(c).
"Qualified Assignee" means (a) any Lender, any Affiliate of any
Lender and, with respect to any Lender that is an investment fund that invests
in commercial loans, any other investment fund that invests in commercial loans
and that is managed or advised by the same investment advisor as such Lender or
by an Affiliate of such investment advisor, and (b) any commercial bank, savings
and loan association or savings bank or any other entity which is an "accredited
investor" (as defined in Regulation D under the Securities Act) which extends
credit or buys loans as one of its businesses, including insurance companies,
mutual funds, lease financing companies and commercial finance companies, in
each case, which has a rating of BBB or higher from S&P and a rating of Baa2 or
higher from Xxxxx'x at the date that it becomes a Lender and which, through its
applicable lending office, is capable of lending to Borrower without the
imposition of any withholding or similar taxes; provided that no Person
determined by Agent to be acting in the capacity of a vulture fund or distressed
debt purchaser shall be a Qualified Assignee and no Person or Affiliate of such
Person (other than a Person that is already a Lender) holding Subordinated Debt
or Stock issued by any Credit Party shall be a Qualified Assignee.
"Qualified Plan" means a Pension Plan that is intended to be
tax-qualified under Section 401(a) of the IRC.
"Qualified Proceeds" means any of the following or any combination
of the following:
(a) Cash Equivalents; and
(b) the fair market value of assets that are used or useful in a
line of business permitted by Section 3.9; and
(c) the fair market value of the Capital Stock of any Person
engaged primarily in a line of business permitted by Section 3.9 if, in
connection with the receipt by Holdings or any of its Subsidiaries of such
Capital Stock, such Person becomes a Subsidiary or such Person is merged or
consolidated into Holdings or any Subsidiary.
A-29
The fair market value of any assets or Capital Stock that are
required to be valued by this definition will be determined by the Board of
Directors of Borrower whose resolution with respect thereto will be delivered to
the Agent. The Board of Directors' determination must be based upon an opinion
or appraisal issued by an accounting, appraisal or investment banking firm of
national standing if the fair market value exceeds $1,000,000.
"Real Estate" has the meaning ascribed to it in Section 5.12.
"Refinancing" means the repayment in full by Borrower of the Prior
Lender Obligations on the Closing Date.
"Refunded Swing Line Loan" has the meaning ascribed to it in Section
1.1(c)(iii).
"Related Party" means: (1) any controlling Stockholder, partners,
member, 80% (or more) owned Subsidiary, or immediate family member (in the case
of an individual) of any Principal; or (2) any trust, corporation, partnership,
limited liability company or other entity, the beneficiaries, Stockholders,
partners, members, owners or Persons beneficially holding an 80% or more
controlling interest of which consist of any one or more Principals and/or such
other Persons referred to in the immediately preceding clause (1).
"Related Transactions" means the initial borrowing under the
Revolving Loan on the Closing Date, the Refinancing, the Acquisition, the
payment of all Fees, costs and expenses associated with all of the foregoing and
the execution and delivery of all of the Related Transactions Documents.
"Related Transactions Documents" means the Loan Documents and the
Senior Notes Documents, the Acquisition Documents and all other agreements or
instruments executed in connection with the Related Transactions.
"Release" means any release, threatened release, spill, emission,
leaking, pumping, pouring, emitting, emptying, escape, injection, deposit,
disposal, discharge, dispersal, dumping, leaching or migration of Hazardous
Material in the indoor or outdoor environment, including the movement of
Hazardous Material through or in the air, soil, surface water, ground water or
property.
"Replacement Lender" has the meaning ascribed to it in Section
9.19(a).
"Requisite Lenders" means Lenders having (a) more than 50% of the
Revolving Loan Commitments of all Lenders, or (b) if the Revolving Loan
Commitments have been terminated, more than 50% of the aggregate outstanding
amount of the Loans.
"Reserves" means, with respect to the Borrowing Base (a) reserves
established by Agent from time to time in its reasonable credit judgment against
Eligible Accounts, Eligible Inventory, Eligible M&E and Eligible Real Estate
pursuant to Exhibit 4.9(d) and (b) such other reserves against Eligible
Accounts, Eligible Inventory or Borrowing Availability that Agent may, in its
reasonable credit judgment, establish from time to time. Without limiting the
generality of the foregoing, Reserves established to ensure the payment of
accrued interest expenses or Indebtedness shall be deemed to be within Agent's
reasonable credit judgment.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Payment" means, with respect to any Credit Party (1)
declare or pay any dividend or make any other payment or distribution on account
of such Credit Party's or any of its
A-30
Subsidiaries' Equity Interests (including, without limitation, any payment in
connection with any merger or consolidation involving Holdings or any of its
Subsidiaries) or to the direct or indirect holders of Holdings' or any of its
Subsidiaries' Equity Interests in their capacity as such (other than dividends
or distributions payable in Equity Interests (other than Disqualified Stock) of
Holdings and other than dividends or distributions payable to Holdings or a
Subsidiary of Holdings); (2) purchase, redeem or otherwise acquire or retire for
value (including, without limitation, in connection with any merger or
consolidation involving Borrower) any Equity Interests of Borrower, Holdings, or
any other direct or indirect parent of Borrower; (3) make any payment on or with
respect to, or purchase, redeem, defease or otherwise acquire or retire for
value any Indebtedness of Holdings or any Guarantor that is contractually
subordinated to the Obligations (excluding any intercompany Indebtedness between
or among Holdings and any of its Subsidiaries), except (a) a payment of interest
or principal at the stated maturity thereof or (b) the purchase, repurchase or
other acquisition of any such Indebtedness in anticipation of satisfying a
sinking fund obligation, principal installment or final maturity, in each case,
due within one year of the date of such purchase, repurchase or other
acquisition; (4) make any Restricted Investment. (5) make or pay any earn out or
similar obligation in connection with any Permitted Acquisition (other than the
Acquisition) or (6) make or payment any management (or similar) fee or expense
reimbursement under the Management Agreement or any similar agreement.
"Retiree Welfare Plan" means, at any time, a Welfare Plan that
provides for continuing coverage or benefits for any participant or any
beneficiary of a participant after such participant's termination of employment,
other than continuation coverage provided pursuant to Section 4980B of the IRC
and at the sole expense of the participant or the beneficiary of the
participant.
"Revolving Credit Advance" has the meaning ascribed to it in Section
1.1(a).
"Revolving Lenders" means those Lenders having a Revolving Loan
Commitment.
"Revolving Loan(s)" means, at any time, the sum of (i) the aggregate
amount of Revolving Credit Advances outstanding to Borrower (including Swing
Line Advances) plus (ii) the aggregate Letter of Credit Obligations incurred on
behalf of Borrower. Unless the context otherwise requires, references to the
outstanding principal balance of the Revolving Loan shall include the
outstanding balance of Letter of Credit Obligations.
"Revolving Loan Commitment" means (a) as to any Lender, the
commitment of such Lender to make its Pro Rata Share of Revolving Credit
Advances (including, in the case of the Swing Line Lender, its commitment to
make Swing Line Advances as a portion of its Revolving Loan Commitment) or incur
its Pro Rata Share of Letter of Credit Obligations as set forth on Annex B or in
the most recent Assignment Agreement, if any, executed by such Lender and (b) as
to all Lenders, the aggregate commitment of all Lenders to make the Revolving
Credit Advances (including, in the case of the Swing Line Lender, Swing Line
Advances) or incur Letter of Credit Obligations, which aggregate commitment
shall be Fifty Million Dollars ($50,000,000) on the Closing Date, as such amount
may be adjusted, if at all, from time to time in accordance with the Agreement.
"Revolving Notes" has the meaning ascribed to it in Section 1.1(a).
"S&P" means Standard & Poor's Ratings Services, a division of the
XxXxxx-Xxxx Companies, Inc.
"Scrap Value" means at any time for any metal, the price obtained by
Borrower most recently prior to and within one month of such time for scrap
metal of that type or, if neither Borrower
A-31
has consummated a sale for scrap metal of that type within one month of the date
of determination, a price reasonably determined by Agent in consultation with
Borrower.
"Securities Act" means the Securities Act of 1933, as amended or
supplemented, or any successor statute, the rules and regulations promulgated
thereunder, as the same shall be in effect from time to time.
"Security Agreement" means the Security Agreement of even date
herewith entered into by and among Agent, on behalf of itself and Lenders, and
the Credit Parties, and any other security agreement entered into after the
Closing Date by any Credit Party, in each case, as amended, restated, modified
or supplemented from time to time.
"Sellers" means Liberty Partners Holdings 10, L.L.C., Xxxxxx Xxxxxx,
Xxxxxxx X. Xxxxxxx, C. Xxxxxxx Xxxxxxxx, and Xxxxx X. Xxxxxx.
"Senior Loan Agreement Consolidated Net Income" has the meaning
ascribed to it in Schedule 4 to Exhibit 4.9(k).
"Senior Notes" means Borrower's 11.25% Senior Notes due 2014 issued
pursuant to the Senior Notes Documents and any registered notes issued by
Borrower in exchange for, and as contemplated by, such notes.
"Senior Notes Documents" means the Senior Notes, the indenture and
purchase agreement pursuant to which the Senior Notes are issued and originally
sold, the guarantees of the Senior Notes by Borrower's current and future
Domestic Subsidiaries, and all other documents executed and delivered pursuant
to or in connection with the Senior Notes and the other Senior Notes Documents.
"Settlement Date" has the meaning ascribed to it in Section
8.5(a)(ii).
"Software" means all "software" as such term is defined in the Code,
now owned or hereafter created or acquired by any Credit Party, other than
software embedded in any category of Goods, including (a) computer software in
both source code and object code; (b) any and all software implementations of
algorithms, models and methodologies, whether in source code or object code, (c)
databases and compilations, including any and all data and collections of data,
whether machine readable or otherwise, (d) descriptions, flow-charts and other
work product used to design, plan, organize and develop any of the foregoing,
(e) the technology supporting any Internet site(s), and (f) all documentation,
including system documentation, user manuals and training materials, relating to
any of the foregoing.
"Solvent" means, with respect to any Person on a particular date,
that on such date (a) the fair value of the property of such Person is greater
than the total amount of liabilities, including subordinated and contingent
liabilities, of such Person; (b) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts and liabilities, including
subordinated and contingent liabilities as they become absolute and matured; (c)
such Person does not intend to, and does not believe that it will, incur debts
or liabilities beyond such Person's ability to pay as such debts and liabilities
mature; and (d) such Person is not engaged in a business or transaction, and is
not about to engage in a business or transaction, for which such Person's
property would constitute an unreasonably small capital. The amount of
contingent liabilities (such as Litigation, guaranties and pension plan
liabilities) at any time shall be computed as the amount that, in light of all
the facts and circumstances existing at the time, represents the amount that can
be reasonably be expected to become an actual or matured liability.
A-32
"Sponsor" means Xxxxxx Xxxxxx, Inc.
"Sponsor Portfolio Company" means any Person that is owned and
controlled by any investment fund that is managed by the Sponsor or an Affiliate
of the Sponsor.
"State Board Subordinated Loan Agreement" means that certain
Subordinated Loan Agreement, dated as of April 3, 1995, between the State Board
Administration of Florida and Xxxx Manufacturing Co., Inc., as amended by First
Amendment to Subordination Agreement and Second Amendment to Subordinated Loan
Document, dated as of October 15, 1997, Consent, Waiver and Third Amendment to
Subordinated Loan Agreement, dated as of October 30, 1998, Consent, Waiver and
Fourth Amendment to Subordinated Loan Agreement, dated as of February 3, 0000,
Xxxxxx Xxxxxxxxx to Subordinated Loan Agreement, dated as of October 31, 2000,
Consent, Waiver and Sixth Amendment to Subordinated Loan Agreement, dated as of
March 15, 2002 and Consent and Seventh Amendment to Subordinated Loan Agreement,
dated as of September 14, 2004, and as further amended, restated, supplemented
or otherwise modified from time to time.
"Statement" has the meaning ascribed to it in Section 4.9(b).
"Stock" means all shares, options, warrants, general or limited
partnership interests, membership interests or other equivalents (regardless of
how designated) of or in a corporation, partnership, limited liability company
or equivalent entity whether voting or nonvoting, including common stock,
preferred stock or any other "equity security" (as such term is defined in Rule
3a11 1 of the General Rules and Regulations promulgated by the Securities and
Exchange Commission under the Exchange Act).
"Stockholder" means, with respect to any Person, each holder of
Stock of such Person.
"Subordinated Indebtedness" means the collective reference to any
Indebtedness of Holdings or any Subsidiary subordinated in right and time of
payment to the Obligations and containing such other terms and conditions, in
each case as are reasonably satisfactory to the Requisite Lenders.
"Subsidiary" means, with respect to any Person, (a) any corporation
of which an aggregate of more than 50% of the outstanding Stock having ordinary
voting power to elect a majority of the board of directors of such corporation
(irrespective of whether, at the time, Stock of any other class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person or one or more Subsidiaries of such
Person, or with respect to which any such Person has the exclusive right to vote
or designate the vote of 50% or more of such Stock whether by proxy, agreement,
operation of law or otherwise, and (b) any partnership or limited liability
company in which such Person and/or one or more Subsidiaries of such Person
shall have an interest (whether in the form of voting or participation in
profits or capital contribution) of more than 50% or of which any such Person is
a general partner or may exercise the powers of a general partner. Unless the
context otherwise requires, each reference to a Subsidiary shall be a reference
to a Subsidiary of Borrower.
"Subsidiary Guarantors" means each direct or indirect Subsidiary of
the Borrower in existence on the Closing Date or which becomes a Credit Party
and guarantees the Obligations of the Borrower pursuant to Section 2.8(c).
"Supermajority Revolving Lenders" means Lenders having (a) 66 2/3%
or more of the Revolving Loan Commitments of all Lenders, or (b) if the
Revolving Loan Commitments have been
A-33
terminated, 66 2/3% or more of the aggregate outstanding amount of the Revolving
Loan (with the Swing Line Loan being attributed to the Lender making such Loan).
"Swing Line Advance" has the meaning ascribed to it in Section
1.1(c).
"Swing Line Availability" has the meaning ascribed to it in Section
1.1(c).
"Swing Line Commitment" means the commitment of the Swing Line
Lender to make Swing Line Advances as set forth on Annex B to the Agreement,
which commitment constitutes a subfacility of the Revolving Loan Commitment of
the Swing Line Lender.
"Swing Line Lender" means GE Capital.
"Swing Line Loan" means at any time, the aggregate amount of Swing
Line Advances outstanding to Borrower.
"Swing Line Note" has the meaning ascribed to it in Section 1.1(c).
"Taxes" has the meaning ascribed to it in Section 1.11(a).
"Tax Return" has the meaning ascribed to it in Section 5.21.
"Termination Date" means the date on which (a) the Loans have been
indefeasibly repaid in full, (b) all other Obligations (other than Contingent
Indemnification Obligations) under the Agreement and the other Loan Documents
have been completely discharged, (c) all Letter of Credit Obligations have been
cash collateralized in the amount set forth in Section 1.5(g), cancelled or,
with the consent of Agent in each instance, backed by standby letters of credit
in form and issued by a Person acceptable to Agent and (d) no Borrower shall
have any further right to borrow any monies under the Agreement.
"Title IV Plan" means a Pension Plan (other than a Multiemployer
Plan), that is covered by Title IV of ERISA, and that any Credit Party or ERISA
Affiliate maintains, contributes to or has an obligation to contribute to on
behalf of participants who are or were employed by any of them.
"Trademark Security Agreements" means the Trademark Security
Agreements made in favor of Agent, on behalf of itself and Lenders, by each
applicable Credit Party, as amended, restated, modified or supplemented from
time to time.
"Trademark License" means rights under any written agreement now
owned or hereafter acquired by any Credit Party granting any right to use any
Trademark.
"Trademarks" means all of the following now owned or hereafter
adopted or acquired by any Credit Party: (a) all trademarks, trade names, trade
dress, corporate names, business names, trade styles, service marks, logos,
internet domain names, internet domain name registrations, other source or
business identifiers, prints and labels on which any of the foregoing have
appeared or appear, designs and general intangibles of like nature (whether
registered or unregistered, including common-law marks), all registrations and
recordations thereof, and all applications in connection therewith, including
registrations, recordations and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
state or territory thereof, or any other region, country or any political
subdivision thereof; and (b) all goodwill associated with or symbolized by any
of the foregoing.
A-34
"Unfunded Pension Liability" means, at any time, the aggregate
amount, if any, of the sum of (a) the amount by which the present value of all
accrued benefits under each Title IV Plan exceeds the fair market value of all
assets of such Title IV Plan allocable to such benefits in accordance with Title
IV of ERISA, all determined as of the most recent valuation date for each such
Title IV Plan using the actuarial assumptions for funding purposes in effect
under such Title IV Plan, and (b) for a period of 5 years following a
transaction which might reasonably be expected to be covered by Section 4069 of
ERISA, the liabilities (whether or not accrued) that could be avoided by any
Credit Party or any ERISA Affiliate as a result of such transaction.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing: (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect of the Indebtedness,
by (b) the number of years (calculated to the nearest one-twelfth) that will
elapse between such date and the making of such payment; by (2) the then
outstanding principal amount of such Indebtedness.
"Welfare Plan" means a Plan described in Section 3(1) of ERISA.
"Wholly-Owned" means, with respect to a Subsidiary, that all of the
shares of Capital Stock of such Subsidiary are, directly or indirectly, owned or
controlled by Borrower and/or one or more of its Wholly-Owned Subsidiaries
(except in the case of Foreign Subsidiaries for directors' qualifying shares or
other shares required by Applicable Law to be owned by a Person other than the
Borrower).
Rules of construction with respect to accounting terms used in the
Agreement or the other Loan Documents shall be as set forth or referred to in
this Annex A. All other undefined terms contained in any of the Loan Documents
shall, unless the context indicates otherwise, have the meanings provided for by
the Code to the extent the same are used or defined therein; in the event that
any term is defined differently in different Articles or Divisions of the Code,
the definition contained in Article or Division 9 shall control. Unless
otherwise specified, references in the Agreement or any of the Appendices to a
Section, subsection or clause refer to such Section, subsection or clause as
contained in the Agreement. The words "herein," "hereof" and "hereunder" and
other words of similar import refer to the Agreement as a whole, including all
Annexes, Exhibits and Schedules, as the same may from time to time be amended,
restated, modified or supplemented, and not to any particular section,
subsection or clause contained in the Agreement or any such Annex, Exhibit or
Schedule.
Wherever from the context it appears appropriate, each term stated
in either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter genders. The words "including", "includes" and
"include" shall be deemed to be followed by the words "without limitation"; the
word "or" is not exclusive; references to Persons include their respective
successors and assigns (to the extent and only to the extent permitted by the
Loan Documents) or, in the case of governmental Persons, Persons succeeding to
the relevant functions of such Persons; and all references to statutes and
related regulations shall include any amendments of the same and any successor
statutes and regulations. Whenever any provision in any Loan Document refers to
the knowledge (or an analogous phrase) of any Credit Party, such words are
intended to signify that such Credit Party has actual knowledge or awareness of
a particular fact or circumstance.
A-35
