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LOAN AND SECURITY AGREEMENT
BY AND AMONG
XXXXXX XXXXXXX FUNDING LLC
AS BORROWER,
THE LENDERS THAT ARE SIGNATORIES HERETO
AS THE LENDERS,
AND
FOOTHILL CAPITAL CORPORATION
AS THE ARRANGER AND ADMINISTRATIVE AGENT
DATED AS OF AUGUST 15, 2002
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LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this "Agreement"), is
entered into as of August 15, 2002, between and among, on the one hand, the
lenders identified on the signature pages hereof (such lenders, together with
their respective successors and assigns, are referred to hereinafter each
individually as a "Lender" and collectively as the "Lenders"), FOOTHILL CAPITAL
CORPORATION, a California corporation, as the arranger and administrative agent
for the Lenders ("Agent"), and, on the other hand, XXXXXX XXXXXXX FUNDING LLC, a
Delaware limited liability company ("Borrower").
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. As used in this Agreement, the following terms shall
have the following definitions:
"Account Debtor" means any Person who is or who may become obligated
under, with respect to, or on account of, an Account, chattel paper, or a
General Intangible.
"Accounts" means all of Borrower's now owned or hereafter acquired
right, title, and interest with respect to any right to receive payment, whether
constituting an "account", "chattel paper", "instrument" or "general intangible"
(as each such term is defined in the Code), and any and all supporting
obligations in respect thereof.
"Additional Documents" has the meaning set forth in SECTION 4.4.
"Additional Originator" means any Originator made a party to the
Purchase Agreement after the Closing Date in accordance with Section 10.12 of
the Purchase Agreement.
"Advances" has the meaning set forth in SECTION 2.1.
"Affiliate" means, as applied to any Person, any other Person who,
directly or indirectly, controls, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" means the
possession, directly or indirectly, of the power to direct the management and
policies of a Person, whether through the ownership of Stock, by contract, or
otherwise; PROVIDED, HOWEVER, that, in any event: (a) any Person which owns
directly or indirectly 10% or more of the securities having ordinary voting
power for the election of directors or other members of the governing body of a
Person or 10% or more of the partnership or other ownership interests of a
Person (other than as a limited partner of such Person) shall be deemed to
control such Person, (b) each director (or comparable manager) of a Person shall
be deemed to be an Affiliate of such Person, and (c) each partnership or joint
venture in which a Person is a partner or joint venturer shall be deemed to be
an Affiliate of such Person, PROVIDED FURTHER that, solely for purposes of
clause (c) of the definition of "Eligible Accounts", a partnership or joint
venture in which a Person is a partner or joint venturer shall not be deemed to
be an Affiliate of such Person unless such Person owns directly or indirectly 5%
or more of the outstanding Stock of such partnership or joint venture or
otherwise possesses, directly or indirectly, the power to direct the management
and policies of such partnership or joint venture.
"Agent" means Foothill, solely in its capacity as agent for the
Lenders hereunder, and any successor thereto.
"Agent's Account" means an account at a bank designated by Agent
from time to time as the account into which Borrower shall make all payments to
Agent for the benefit of the Lender Group and into which the Lender Group shall
make all payments to Agent under this Agreement and the other Loan Documents;
unless and until Agent notifies Borrower and the Lender Group to the contrary,
Agent's Account shall be that certain deposit account bearing account number
323-266193 and maintained by Agent with JPMorgan Chase Bank, 4 New York Plaza,
15th Floor, New York, New York 10004, ABA #000000000.
"Agent Advances" has the meaning set forth in SECTION 2.3(E)(I).
"Agent's Liens" means the Liens granted by Borrower to Agent for the
benefit of the Lender Group under this Agreement or the other Loan Documents.
"Agent-Related Persons" means Agent together with its Affiliates,
officers, directors, employees, and agents.
"Agreement" has the meaning set forth in the preamble hereto.
"Applicable Prepayment Premium" means, as of any date of
determination, an amount equal to (a) during the period of time from and after
the date of the execution and delivery of this Agreement up to the date that is
the first anniversary of the Closing Date, 3.0% times the Maximum Revolver
Amount, (b) during the period of time from and including the date that is the
first anniversary of the Closing Date up to the date that is the second
anniversary of the Closing Date, 2.0% times the Maximum Revolver Amount, and (c)
during the period of time from and including the date that is the second
anniversary of the Closing Date up to the Maturity Date, 1.0% times the Maximum
Revolver Amount.
"A/R Turnover Period" means, as of the end of any calendar month,
the number of days equal to the product of (a) a fraction, the numerator of
which shall be the aggregate amount of Accounts as of the first day of such
month, and the denominator of which shall be the aggregate amount of Collections
with respect to Accounts during such month, TIMES (b) 30 days.
"Asset Sale" means any sale, lease or other disposition (including
any such transaction effected by way of merger or consolidation) by FW LLC or
any of its Subsidiaries of any asset, including, without limitation, any
Sale/Leaseback Transaction, whether or not involving a capital lease, but
excluding (a) dispositions of inventory, equipment or materials in the ordinary
course of business, (b) dispositions of Temporary Cash Investments and cash
payments otherwise permitted under the Existing Credit Agreement, (c)
dispositions pursuant to a Securitization Transaction, (d) dispositions to any
Existing Credit Party or any wholly-owned Subsidiary thereof, (e) the sale or
discount, in each case without recourse, of accounts receivable arising in the
ordinary course of business, but only in connection with the compromise or
collection thereof, (f) licenses or sublicenses of intellectual property and
other know-how in the ordinary course of business and (g) subleases of real
property in the ordinary course of business. To the extent that, in connection
with a reduction in the proportionate interest of FW LLC or any of its
Subsidiaries in a joint venture, FW LLC or any of its Subsidiaries receives Net
Cash Proceeds (determined as if such transaction were an Asset Sale), then such
transaction shall be treated as an Asset Sale to the extent of such Net Cash
Proceeds.
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"Assignee" has the meaning set forth in SECTION 14.1.
"Assignment and Acceptance" means an Assignment and Acceptance in
the form of Exhibit A-1.
"Authorized Person" means any officer or other employee of Borrower.
"Availability" means, as of any date of determination, if such date
is a Business Day, and determined at the close of business on the immediately
preceding Business Day, if such date of determination is not a Business Day, the
amount that Borrower is entitled to borrow as Advances under SECTION 2.1 (after
giving effect to all then outstanding Obligations and all sublimits and reserves
applicable hereunder).
"Bankruptcy Code" means the United States Bankruptcy Code, as in
effect from time to time.
"Base Rate" means, the rate of interest announced within Xxxxx Fargo
at its principal office in San Francisco as its "prime rate", with the
understanding that the "prime rate" is one of Xxxxx Fargo's base rates (not
necessarily the lowest of such rates) and serves as the basis upon which
effective rates of interest are calculated for those loans making reference
thereto and is evidenced by the recording thereof after its announcement in such
internal publication or publications as Xxxxx Fargo may designate.
"Base Rate Margin" means 3.0 percentage points.
"Benefit Plan" means a "defined benefit plan" (as defined in SECTION
3(35) of ERISA) for which Borrower or any ERISA Affiliate of Borrower has been
an "employer" (as defined in SECTION 3(5) of ERISA) within the past six years.
"Board of Directors" means the board of directors (or comparable
managers) of Borrower or any committee thereof duly authorized to act on behalf
of the board.
"Books" means Borrower's now owned or hereafter acquired books and
records (including all of its Records indicating, summarizing, or evidencing its
assets (including the Collateral) or liabilities, all of its Records relating to
its business operations or financial condition, and all of its goods or General
Intangibles related to such information).
"Borrower" has the meaning set forth in the preamble to this
Agreement.
"Borrowing" means a borrowing hereunder consisting of Advances made
on the same day by the Lenders (or Agent on behalf thereof), or by Swing Lender
in the case of a Swing Loan, or by Agent in the case of an Agent Advance.
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"Borrowing Base" has the meaning set forth in SECTION 2.1.
"Borrowing Base Certificate" means a certificate in the form of
EXHIBIT B-1.
"Business Day" means any day that is not a Saturday, Sunday, or
other day on which national banks are authorized or required to close.
"Capital Expenditures" means, with respect to any Person for any
period, the sum of (i) the aggregate of all expenditures by such Person and its
Subsidiaries during such period that in accordance with GAAP are or should be
included in "property, plant and equipment" or in a similar fixed asset account
on its balance sheet, whether such expenditures are paid in cash or financed and
including all Capitalized Lease Obligations paid or payable during such period,
and (ii) to the extent not covered by clause (i) above, the aggregate of all
expenditures by such Person and its Subsidiaries during such period to acquire
by purchase or otherwise the business or fixed assets of, or the capital Stock
of, any other Person.
"Capital Lease" means a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP.
"Capitalized Lease Obligation" means any Indebtedness represented by
obligations under a Capital Lease.
"Cash Equivalents" means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States or issued by any agency thereof
and backed by the full faith and credit of the United States, in each case
maturing within 1 year from the date of acquisition thereof, (b) marketable
direct obligations issued by any state of the United States or any political
subdivision of any such state or any public instrumentality thereof maturing
within 1 year from the date of acquisition thereof and, at the time of
acquisition, having the highest rating obtainable from either S&P or Xxxxx'x,
(c) commercial paper maturing no more than 1 year from the date of acquisition
thereof and, at the time of acquisition, having a rating of A-1 or P-1, or
better, from S&P or Xxxxx'x, (d) certificates of deposit or bankers' acceptances
maturing within 1 year from the date of acquisition thereof either (i) issued by
any bank organized under the laws of the United States or any state thereof
which bank has a rating of A or A2, or better, from S&P or Xxxxx'x, or (ii)
certificates of deposit less than or equal to $100,000 in the aggregate issued
by any other bank insured by the Federal Deposit Insurance Corporation, and (e)
any shares of money market mutual funds having assets in excess of $500,000,000
which are invested in instruments of the kind described in clauses (a), (b), (c)
or (d) hereof.
"Cash Management Bank" has the meaning set forth in SECTION 2.7(A).
"Cash Management Account" has the meaning set forth in SECTION
2.7(A).
"Cash Management Agreements" means those certain cash management
service agreements, in form and substance satisfactory to Agent, each of which
is among Agent, Borrower and the Cash Management Bank.
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"Change of Control" means (a) Servicer and the Originators cease to
directly own and control 100% of the outstanding capital Stock of Borrower, free
and clear of all Liens, other than the Lien securing the obligations under the
Existing Credit Documents, or (b) Parent ceases to own, directly or indirectly,
100% of the outstanding capital Stock of Borrower, Servicer and each Originator,
free and clear of all Liens, other than the Lien securing the obligations under
the Existing Credit Documents.
"Closing Date" means the date of the making of the initial Advance
(or other extension of credit) hereunder.
"Closing Date Business Plan" means the set of Projections of the
Originators for the period following the Closing Date through December 31, 2002
(on a month by month basis, and for the 1 year period thereafter, on a quarter
by quarter basis), in form and substance (including as to scope and underlying
assumptions) satisfactory to Agent.
"Code" means the New York Uniform Commercial Code, as in effect from
time to time.
"Collateral" means all assets of the Borrower, including all of
Borrower's now owned or hereafter acquired right, title, and interest in and to
each of the following:
1. Accounts,
2. Books,
3. Equipment,
4. General Intangibles,
5. Inventory,
6. Investment Property,
7. Negotiable Collateral,
8. money, deposit accounts or other assets of Borrower that now or
hereafter come into the possession, custody, or control of any member of the
Lender Group, and
9. the proceeds and products, whether tangible or intangible, of any
of the foregoing, including proceeds of insurance covering any or all of the
foregoing, and any and all Accounts, Books, Equipment, General Intangibles,
Inventory, Investment Property, Negotiable Collateral, money, deposit accounts,
or other tangible or intangible property resulting from the sale, exchange,
collection, or other disposition of any of the foregoing, or any portion thereof
or interest therein, and the proceeds thereof.
"Collateral Access Agreement" means a landlord waiver,
acknowledgement agreement or other written waiver or acknowledgement of any
lessor or other Person in possession of, having a Lien upon, or having rights or
interests in any of the books and records of Borrower, Servicer or any
Originator relating to any of the Subject Accounts or the Collateral, in each
case, in form and substance satisfactory to Agent.
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"Collections" means all cash, checks, notes, instruments, and other
items of payment (including insurance proceeds, proceeds of cash sales, rental
proceeds, and tax refunds) of Borrower and shall in any event include all
"Collections" as such term is defined in the Purchase Agreement.
"Commitment" means, with respect to each Lender, its Commitment,
and, with respect to all Lenders, their Commitments, in each case as such Dollar
amounts are set forth beside such Lender's name under the applicable heading on
Schedule C-1 or on the signature page of the Assignment and Acceptance pursuant
to which such Lender became a Lender hereunder in accordance with the provisions
of SECTION 14.1.
"Companies" means Parent and the Subsidiaries of Parent, including
Borrower, Servicer and the Originators.
"Compliance Certificate" means a certificate substantially in the
form of Exhibit C-1 delivered by the chief financial officer of Borrower to
Agent.
"Consolidated Adjusted EBITDA" for any period, with respect to
Parent and its consolidated Subsidiaries, means the sum of (a) Consolidated Net
Income for such period and (b) to the extent deducted in determining
Consolidated Net Income, (i) Consolidated Adjusted Interest Expense for such
period, (ii) charges against income for foreign, federal, state and local income
taxes for such period and (iii) the amount of all expenses for depreciation and
amortization for such period, all as determined on a consolidated basis in
accordance with GAAP; PROVIDED that, if an Asset Sale occurs during such period,
"Consolidated Adjusted EBITDA" shall be determined after giving pro forma effect
thereto as if such Asset Sale had occurred at the beginning of such period.
"Consolidated Adjusted Interest Expense" for any period means the
sum, without duplication, of (a) the total interest expense of Parent and its
consolidated Subsidiaries, (b) the portion of rental expense in respect of
Financing Leases representative of an interest factor and (c) any dividend paid
or accrued on the Trust Preferred, in each case for such period and determined
on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" for any period means the net earnings (or
loss) after taxes of Parent and its consolidated Subsidiaries for such period as
determined on a consolidated basis in accordance with GAAP; provided that
"Consolidated Net Income" shall not include, without duplication, (i) any gains
or losses (A) from Asset Sales or other Prepayment Events, (B) that are (x)
extraordinary or (y) non-cash and nonrecurring or unusual or (C) that are
associated with claims settlements, (ii) any additions to reserves for asbestos
liabilities which are not offset by a corresponding increase in insurance
recoveries and which are not a cash item during the period for which
Consolidated Net Income is to be determined (provided that Consolidated Net
Income shall include any cash expenses in respect of asbestos liabilities during
the period for which Consolidated Net Income is to be determined which are (x)
charged against a reserve referred to in this clause (ii) which was established
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in a prior period (but only to the extent such reserves were taken from and
after the first day of the Company's fiscal quarter beginning closest to April
1, 2002) and (y) not otherwise deducted in the determination of such
Consolidated Net Income), (iii) any income recorded as a result of commuting
insurance policies that relate to asbestos exposure and (iv) non-cash charges
relating to writedowns of assets to market value and writedowns of claims.
"Contract" means, with respect to any Subject Account, any and all
contracts, instruments, agreements, leases, invoices, notes or other writings
pursuant to which such Subject Account arises or that evidence such Subject
Account or under which the applicable Account Debtor becomes or is obligated to
make payment in respect of such Subject Account.
"Contract Trial Balance" means a monthly report on each Contract,
updated to reflect any changes in earned revenue to date, final estimated
profits and actual costs to date.
"Control Agreement" means a control agreement, in form and substance
satisfactory to Agent, executed and delivered by Borrower, Agent, and the
applicable securities intermediary with respect to a Securities Account or bank
with respect to a deposit account.
"Convertible Subordinated Notes" shall mean Parent's 6.50%
Subordinated Convertible Notes due 2007 issued pursuant to the Indenture dated
as of May 31, 2001 among Parent, FW LLC and BNY Midwest Trust Company.
"Credit and Collection Policy" means those receivables credit and
collection policies and practices of the Originators in effect on the Closing
Date and described in SCHEDULE C-2, as modified with the written consent of
Agent.
"Daily Balance" means, with respect to each day during the term of
this Agreement, the amount of an Obligation owed at the end of such day.
"DDA" means any checking or other demand deposit account maintained
by Borrower.
"Debt Documents" means the Existing Credit Documents, the
Indentures, the Trust Preferred, the Xxxxxxx Debt Documents, the Perryville
Lease Facilities and each other agreement or instrument pursuant to which
Parent, FW LLC, Servicer, any Originator or Borrower has incurred Indebtedness
to another Person (other than to another Company) in excess of $10,000,000 but
excluding the Transaction Documents.
"Debt Incurrence" means any incurrence of Indebtedness after May 9,
2002 by FW LLC or any of its Subsidiaries that results in Net Cash Proceeds,
other than the incurrence of (i) an aggregate amount of up to $50,000,000 of
Indebtedness from a Securitization Transaction outstanding at any time, (ii)
$32,829,119 of Indebtedness under the Perryville Lease Facilities and (iii) any
other Indebtedness permitted by Section 6.03 of the Existing Credit Agreement as
in effect on the date hereof (except subsections (f), (g) and (k) thereof).
"Default" means an event, condition, or default that, with the
giving of notice, the passage of time, or both, would be an Event of Default.
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"Defaulting Lender" means any Lender that fails to make any Advance
(or other extension of credit) that it is required to make hereunder on the date
that it is required to do so hereunder.
"Defaulting Lender Rate" means (a) the Base Rate for the first 3
days from and after the date the relevant payment is due, and (b) thereafter, at
the interest rate then applicable to Advances (inclusive of the Base Rate Margin
applicable thereto).
"Delinquency Ratio" means, as of any date, the ratio, expressed as a
percentage, of (a) the aggregate amount of all Accounts as to which payment, or
any part thereof, remains unpaid for more than 90 days from the original invoice
date, to (b) the aggregate amount of all Accounts.
"Designated Account" means account number 200-0011-054-483 of
Borrower maintained with Borrower's Designated Account Bank, or such other
deposit account of Borrower (located within the United States) that has been
designated as such, in writing, by Borrower to Agent.
"Designated Account Bank" means Wachovia Bank, N.A., whose office is
located at 000 Xxxxxxxxx Xxxxxx, XX, Mail Code GA 8056, Xxxxxxx, XX 00000, Attn:
Xxxxxxxxxxx Xxxxxxx, and whose ABA number is 000000000.
"Dilution" means, as of any date of determination, a percentage,
based upon the experience of the immediately prior 90 days, that is the result
of dividing the Dollar amount of (a) bad debt write-downs, discounts,
advertising allowances, credits, or other dilutive items with respect to the
Accounts during such period, by (b) Borrower's Collections with respect to
Accounts during such period (excluding extraordinary items) plus the Dollar
amount of clause (a), PROVIDED that, for purposes of the financial covenant
contained in SECTION 7.20(A)(III), such percentage shall be based upon the
experience of the immediately prior six-month period.
"Dilution Reserve" means, as of any date of determination, an amount
sufficient to reduce the advance rate against Eligible Accounts by one
percentage point for each percentage point by which Dilution is in excess of
5.0%.
"Disbursement Letter" means an instructional letter executed and
delivered by Borrower to Agent regarding the extensions of credit to be made on
the Closing Date, the form and substance of which is satisfactory to Agent.
"Dollars" or "$" means United States dollars.
"Domestic Subsidiary" means any Subsidiary of Parent which is not a
Foreign Subsidiary.
"Eligible Accounts" means those Subject Accounts acquired from time
to time by Borrower from any Originator pursuant to the Purchase Agreement that
comply with each of the representations and warranties respecting Eligible
Accounts made by Borrower in the Loan Documents, and that are not excluded as
ineligible by virtue of one or more of the criteria set forth below; PROVIDED,
HOWEVER, that such criteria may be fixed and revised from time to time by Agent
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in Agent's Permitted Discretion to address the results of any audit performed by
Agent from time to time after the Closing Date. In determining the amount to be
included, Eligible Accounts shall be calculated net of customer deposits and
unapplied cash remitted by the applicable Account Debtor. Eligible Accounts
shall not include the following:
(a) Accounts that the Account Debtor has failed to pay within 90
days of original invoice date or Accounts with selling terms of more than 90
days,
(b) Accounts owed by an Account Debtor (or its Affiliates) where 50%
or more of all Accounts owed by that Account Debtor (or its Affiliates) are
deemed ineligible under clause (a) above,
(c) Accounts with respect to which the Account Debtor is an
employee, Affiliate, or agent of Borrower, the Servicer, any Originator or any
other Company,
(d) Accounts which do not arise under a duly authorized Contract,
(e) Accounts for which the related Contract is not in full force and
effect or is otherwise not a legal, valid and binding obligation of the related
Account Debtor, enforceable against such Account Debtor in accordance with its
terms,
(f) Accounts (i) in which Borrower does not own good and marketable
title, free and clear of any Liens other than Permitted Liens, or (ii) that are
not freely assignable by Borrower (including without any consent of the related
Account Debtor),
(g) Accounts that fail to conform in all material respects with all
applicable laws, rulings and regulations in effect,
(h) Accounts that fail to satisfy, in any material respect, all
applicable requirements of the Credit and Collection Policy,
(i) Accounts that have been modified, waived or restructured since
their creation, except as permitted pursuant to SECTION 7.10,
(j) Accounts arising in a transaction wherein goods are placed on
consignment or are sold pursuant to a guaranteed sale, a sale or return, a sale
on approval, a xxxx and hold, or any other terms by reason of which the payment
by the Account Debtor may be conditional,
(k) Accounts that are either not payable in Dollars or not
denominated in Dollars,
(l) Accounts with respect to which the Account Debtor either (i)
does not maintain its chief executive office in the United States, or (ii) is
not organized under the laws of the United States or any state thereof, or (iii)
is the government of any foreign country or sovereign state, or of any state,
province, municipality, or other political subdivision thereof, or of any
department, agency, public corporation, or other instrumentality thereof, unless
(y) the Account is supported by an irrevocable letter of credit satisfactory to
Agent (as to form,
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substance, and issuer or domestic confirming bank) that has been delivered to
Agent and is directly drawable by Agent, or (z) the Account is covered by
credit insurance in form, substance, and amount, and by an insurer,
satisfactory to Agent,
(m) Accounts with respect to which the Account Debtor is either (i)
the United States or any department, agency, or instrumentality of the United
States (exclusive, however, of Accounts with respect to which Borrower or any
Originator has complied, to the reasonable satisfaction of Agent, with the
Assignment of Claims Act, 31 USC ss. 3727), or (ii) any state of the United
States (exclusive, however, of (y) Accounts owed by any state that does not have
a statutory counterpart to the Assignment of Claims Act, or (z) Accounts owed by
any state that does have a statutory counterpart to the Assignment of Claims Act
as to which Borrower or any Originator has complied to Agent's satisfaction),
(n) Accounts with respect to which the Account Debtor is a creditor
of any Company, has or has asserted a right of setoff, has disputed its
liability, or has made any claim with respect to its obligation to pay the
Account, to the extent of such claim, right of setoff, or dispute,
(o) Accounts with respect to an Account Debtor whose total
obligations owing to Borrower exceed 10% of all Eligible Accounts, to the extent
of the obligations owing by such Account Debtor in excess of such percentage,
(p) Accounts with respect to which the Account Debtor is subject to
an Insolvency Proceeding, is not Solvent, has gone out of business, or as to
which any Company has received notice of an imminent Insolvency Proceeding or a
material impairment of the financial condition of such Account Debtor,
(q) Accounts with respect to which the Account Debtor is located in
the states of New Jersey, Minnesota, or West Virginia (or any other state that
requires a creditor to file a business activity report or similar document in
order to bring suit or otherwise enforce its remedies against such Account
Debtor in the courts or through any judicial process of such state), unless
Servicer has qualified to do business in New Jersey, Minnesota, West Virginia,
or such other states, or has filed a business activities report with the
applicable division of taxation, the department of revenue, or with such other
state offices, as appropriate, for the then-current year, or is exempt from such
filing requirement,
(r) Accounts, the collection of which, Agent, in its Permitted
Discretion, believes to be doubtful by reason of the Account Debtor's financial
condition,
(s) Accounts that are not subject to a valid and perfected first
priority Agent's Lien,
(t) Accounts with respect to which (i) the goods giving rise to such
Account have not been shipped and billed to the Account Debtor, or (ii) the
services giving rise to such Account have not been performed and billed to the
Account Debtor,
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(u) Accounts, or the portion thereof, that represent retention, the
right to receive progress payments or other advance xxxxxxxx that are due prior
to the completion of performance by the applicable Originator of the subject
contract for goods or services,
(v) Accounts that are due in respect of any project which is less
than 50% complete,
(w) Accounts in respect of which a surety bond, performance bond or
similar instrument grants a lien or common law right of subrogation in favor of
the issuer of such bond or instrument was provided in favor of the Account
Debtor for the purpose of supporting the obligations of the applicable
Originator to such Account Debtor,
(x) Accounts that are evidenced by instruments or chattel paper; or
(y) Accounts purchased from an Originator with respect to which a
Single Originator Default has occurred to the extent that Borrower has requested
and received a waiver of the Event of Default resulting from such Single
Originator Default in accordance with SECTION 8.
In addition to, and without limitation of, the preceding
requirements and any requirements set forth in the Purchase Agreement, prior to
any Subject Account acquired from any Additional Originator becoming an
"Eligible Account", Agent shall have first received (i) a financial audit for
such Additional Originator, the results of which shall be satisfactory to Agent,
(ii) updated Projections for the Originators (including such Additional
Originator), in form and substance satisfactory to Agent, (iii) the results of a
UCC, tax and judgment lien search, showing the absence of any Lien on the
Subject Accounts of such Additional Originator, (iv) satisfactory legal opinions
with respect to such Additional Originator and comparable to the legal opinions
delivered on the Closing Date (including as to "true sale" and "substantive
non-consolidation"), (v) a UCC financing statement with respect to the Subject
Accounts of such Additional Originator, naming such Additional Originator as
debtor, Borrower as secured party and Agent as assignee and in appropriate form
for filing with the Secretary of State of the state of organization of such
Additional Originator, and (vi) such other documents as Agent may reasonably
request, including, without limitation, amendments and/or joinder agreements
adding such Additional Originator as a party to the Purchase Agreement.
"Eligible Affiliate Transferee" means any Affiliate (other than
individuals) of a Lender that was party hereto as of the Closing Date,
including, without limitation, a Related Fund.
"Eligible Subject Accounts" means Subject Accounts which, if
acquired by Borrower pursuant to the Purchase Agreement, would qualify as
Eligible Accounts under this Agreement.
"Eligible Transferee" means (a) a commercial bank organized under
the laws of the United States, or any state thereof, and having total assets in
excess of $250,000,000, (b) a commercial bank organized under the laws of any
other country which is a member of the Organization for Economic Cooperation and
Development or a political subdivision of any such country and which has total
assets in excess of $250,000,000, provided that such bank is acting through a
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branch or agency located in the United States, (c) a finance company, insurance
company, or other financial institution or fund that is engaged in making,
purchasing, or otherwise investing in commercial loans in the ordinary course of
its business and having (together with its Affiliates) total assets in excess of
$250,000,000, (d) any Eligible Affiliate Transferee, (e) so long as no Event of
Default has occurred and is continuing, any other Person approved by Agent and
Borrower, and (f) during the continuation of an Event of Default, any other
Person approved by Agent.
"Equipment" means all of Borrower's now owned or hereafter acquired
right, title, and interest with respect to equipment, machinery, machine tools,
motors, furniture, furnishings, fixtures, vehicles (including motor vehicles),
tools, parts, goods (other than consumer goods, farm products, or Inventory),
wherever located, including all attachments, accessories, accessions,
replacements, substitutions, additions, and improvements to any of the
foregoing.
"Equity Issuance" means any issuance of equity securities (including
any preferred equity securities) by Parent or any Subsidiary of Parent, other
than (i) equity securities issued to Parent or any Subsidiary of Parent, (ii)
equity securities issued pursuant to employee benefit and/or dividend
reinvestment plans in the ordinary course of business, (iii) other equity
issuances to employees, officers, directors or consultants of Parent or any
Subsidiary of Parent in the ordinary course of business and (iv) equity
issuances to holders of minority interests in Subsidiaries of the Parent to the
extent the proceeds of such equity issuance are used or are to be used for such
Subsidiary's working capital and other general business purposes.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute thereto.
"ERISA Affiliate" means (a) any Person subject to ERISA whose
employees are treated as employed by the same employer as the employees of
Borrower under IRC Section 414(b), (b) any trade or business subject to ERISA
whose employees are treated as employed by the same employer as the employees of
Borrower under IRC Section 414(c), (c) solely for purposes of Section 302 of
ERISA and Section 412 of the IRC, any organization subject to ERISA that is a
member of an affiliated service group of which Borrower is a member under IRC
Section 414(m), or (d) solely for purposes of Section 302 of ERISA and Section
412 of the IRC, any Person subject to ERISA that is a party to an arrangement
with Borrower and whose employees are aggregated with the employees of Borrower
under IRC Section 414(o).
"Event of Default" has the meaning set forth in SECTION 8.
"Exchange Act" means the Securities Exchange Act of 1934, as in
effect from time to time.
"Existing Credit Agreement" means the Third Amended and Restated
Term Loan and Revolving Credit Agreement dated as of August 2, 2002, as amended,
restated, supplemented or otherwise modified from time to time, among FW LLC, FW
USA, FW Power, FW Energy, the guarantors signatory thereto, the lenders
signatory thereto, Bank of America, N.A., as administrative agent and collateral
agent, and Bank of America Securities LLC, as Lead Arranger and Book Manager.
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"Existing Credit Agreement Specified Covenants" has the meaning set
forth in Section 7.20(b)(iv).
"Existing Credit Documents" means the Existing Credit Agreement and
the "Loan Documents", as such term is defined in the Existing Credit Agreement.
"Existing Credit Party" means any Company party to the Existing
Credit Agreement.
"Existing Foreign Sale-Leaseback Transactions" shall mean the
Sale-Leaseback Transactions involving Foreign Subsidiaries listed on Schedule
3.07 of the Existing Credit Agreement.
"Existing Italian Joint Venture Entities" means Xxxxxx Xxxxxxx
Italiana S.p.A., MF Energy s.r.l., MF Power s.r.l. and MF Waste s.r.l.
"Fee Letter" means that certain fee letter, dated as of even date
herewith, between Borrower and Agent, in form and substance satisfactory to
Agent.
"FEIN" means Federal Employer Identification Number.
"Financing Lease" means (i) any lease entered into in connection
with a Sale/Leaseback Transaction, (ii) any Capitalized Lease and (iii) any
other lease in respect of which the lessee is treated as the owner of the leased
property for purposes of the IRC.
"Foothill" means Foothill Capital Corporation, a California
corporation.
"Foreign Subsidiary" means (i) any Subsidiary of Parent created or
organized under the laws of a jurisdiction outside the United States of America
or (ii) (A) Xxxxxx Xxxxxxx Continental U.S., Inc. ("Xxxxxx Xxxxxxx Continental
I"), (B) a newly-created Subsidiary of Parent ("Xxxxxx Xxxxxxx Continental II")
formed to hold the Stock of another newly-created Subsidiary formed to hold the
energy division of Xxxxxx Xxxxxxx Iberia, S.A. or (C) any of their respective
Subsidiaries that otherwise would constitute a Domestic Subsidiary, in the case
of any Subsidiary described in this clause (ii), so long as (x) the Person that
directly owns all of the Stock in each of Xxxxxx Xxxxxxx Continental I and
Xxxxxx Xxxxxxx Continental II is a Foreign Subsidiary (within the meaning of
clause (i) of this definition) and (y) such Subsidiary is a holding company
substantially all of whose assets consist of Stock in a Foreign Subsidiary
(within the meaning of clause (i) of this definition).
"Funding Date" means the date on which a Borrowing occurs.
"FW Constructors" means Xxxxxx Xxxxxxx Constructors, Inc., a
Delaware corporation.
"FW Energy" means Xxxxxx Xxxxxxx Energy Corporation, a Delaware
corporation.
"FW Energy Services" means Xxxxxx Xxxxxxx Energy Services, Inc., a
California corporation.
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"FW LLC" means Xxxxxx Xxxxxxx LLC, a Delaware limited liability
company.
"FW Power" means Xxxxxx Xxxxxxx Power Group, Inc., a Delaware
corporation.
"FW USA" means Xxxxxx Xxxxxxx USA Corporation, a Delaware
corporation.
"XX Xxxx" means Xxxxxx Xxxxxxx Xxxx, Inc., a Delaware corporation.
"GAAP" means generally accepted accounting principles as in effect
from time to time in the United States, consistently applied, PROVIDED that, for
purposes of SECTION 7.20(B) and the defined terms used therein (the "Referenced
Provisions"), if Borrower notifies Agent that Borrower requests an amendment of
any Referenced Provision to eliminate the effect of any change occurring after
the date hereof in GAAP or in the application thereof (or if Agent notifies
Borrower that the Required Lenders request an amendment of any Referenced
Provision for such purpose), regardless of whether such notice is given before
or after such change in GAAP or in the application thereof, then such Referenced
Provision shall be applied on the basis of GAAP as in effect and applied
immediately before such change shall have become effective until such notice
shall have been withdrawn or such Referenced Provision amended in accordance
herewith.
"General Intangibles" means all of Borrower's now owned or hereafter
acquired right, title, and interest with respect to general intangibles
(including payment intangibles, contract rights, rights to payment, rights
arising under common law, statutes, or regulations, choses or things in action,
goodwill, patents, trade names, trademarks, servicemarks, copyrights,
blueprints, drawings, purchase orders, customer lists, monies due or recoverable
from pension funds, route lists, rights to payment and other rights under any
royalty or licensing agreements, infringement claims, computer programs,
information contained on computer disks or tapes, software, literature, reports,
catalogs, money, deposit accounts, insurance premium rebates, tax refunds, and
tax refund claims), and any and all supporting obligations in respect thereof,
and any other personal property other than goods, Accounts, Investment Property,
and Negotiable Collateral.
"Governing Documents" means, with respect to any Person, the
certificate or articles of incorporation, by-laws, or other organizational
documents of such Person.
"Governmental Authority" means any federal, state, local, or other
governmental or administrative body, instrumentality, department, or agency or
any court, tribunal, administrative hearing body, arbitration panel, commission,
or other similar dispute-resolving panel or body.
"Guarantor" means the Parent.
"Guaranty" means that certain performance guaranty executed and
delivered by Guarantor in favor of Agent, for the benefit of the Lender Group,
in form and substance satisfactory to Agent.
"Hazardous Materials" means (a) substances that are defined or
listed in, or otherwise classified pursuant to, any applicable laws or
regulations as "hazardous substances," "hazardous materials," "hazardous
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wastes," "toxic substances," or any other formulation intended to define, list,
or classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or "EP
toxicity", (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.
"Hedging Agreement" shall mean any interest rate protection
agreement, foreign currency exchange agreement, commodity price protection
agreement or other interest rate, currency exchange rate or commodity price
hedging agreement, whether or not classified as a hedge for purposes of GAAP.
"Indebtedness" means, with respect to any Person, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes, or other similar instruments and
all reimbursement or other obligations of such Person in respect of letters of
credit, bankers acceptances, interest rate swaps, or other financial products,
(c) all obligations of such Person under Capital Leases, (d) all obligations or
liabilities of others secured by a Lien on any asset of such Person,
irrespective of whether such obligation or liability is assumed, (e) all
obligations of such Person for the deferred purchase price of assets (other than
trade debt incurred in the ordinary course of such Person's business and
repayable in accordance with customary trade practices), and (f) any obligation
of such Person guaranteeing or intended to guarantee (whether directly or
indirectly guaranteed, endorsed, co-made, discounted, or sold with recourse to
such Person) any obligation of any other Person.
"Indemnified Liabilities" has the meaning set forth in SECTION 11.3.
"Indemnified Person" has the meaning set forth in SECTION 11.3.
"Indentures" means the Senior Indenture, the Subordinated Indenture
and the Trust Preferred Indenture.
"Initial Transactions" has the meaning set forth in SECTION 3.1(Y).
"Insolvency Proceeding" means any proceeding commenced by or against
any Person under any provision of the Bankruptcy Code or under any other state
or federal bankruptcy or insolvency law, assignments for the benefit of
creditors, formal or informal moratoria, compositions, extensions generally with
creditors, or proceedings seeking reorganization, arrangement, or other similar
relief.
"Intangible Assets" means, with respect to any Person, that portion
of the book value of all of such Person's assets that would be treated as
intangibles under GAAP.
"Inventory" means all Borrower's now owned or hereafter acquired
right, title, and interest with respect to inventory, including goods held for
sale or lease or to be furnished under a contract of service, goods that are
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leased by Borrower as lessor, goods that are furnished by Borrower under a
contract of service, and raw materials, work in process, or materials used or
consumed in Borrower's business.
"Investment" means, with respect to any Person, any investment by
such Person in any other Person (including Affiliates) in the form of loans,
guarantees, advances, or capital contributions (excluding (a) commission,
travel, and similar advances to officers and employees of such Person made in
the ordinary course of business, and (b) bona fide Accounts arising from the
sale of goods or rendition of services in the ordinary course of business
consistent with past practice), purchases or other acquisitions for
consideration of Indebtedness or Stock, and any other items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
"Investment Property" means all of Borrower's now owned or hereafter
acquired right, title, and interest with respect to "investment property" as
that term is defined in the Code, and any and all supporting obligations in
respect thereof.
"IRC" means the Internal Revenue Code of 1986, as in effect from
time to time.
"Lender" and "Lenders" have the respective meanings set forth in the
preamble to this Agreement, and shall include any other Person made a party to
this Agreement in accordance with the provisions of SECTION 14.1.
"Lender Group" means, individually and collectively, each of the
Lenders and Agent.
"Lender Group Expenses" means all (a) costs or expenses (including
taxes, and insurance premiums) required to be paid by Borrower under any of the
Transaction Documents that are paid or incurred by the Lender Group, (b)
reasonable fees or charges paid or incurred by the Lender Group in connection
with the Lender Group's transactions with Borrower, including, fees or charges
for photocopying, notarization, couriers and messengers, telecommunication,
public record searches (including tax lien, judgment, and UCC searches and
including searches with the patent and trademark office, the copyright office,
or the department of motor vehicles), filing, recording, publication, appraisal
(including periodic Collateral appraisals or business valuations to the extent
of the fees and charges (and up to the amount of any limitation) contained in
this Agreement), real estate surveys, real estate title policies and
endorsements, and environmental audits, (c) costs and expenses incurred by the
Lender Group in the disbursement of funds to Borrower (by wire transfer or
otherwise), (d) charges paid or incurred by the Lender Group resulting from the
dishonor of checks, (e) reasonable costs and expenses paid or incurred by the
Lender Group to correct any default or enforce any provision of the Loan
Documents, or in gaining possession of, maintaining, handling, preserving,
storing, shipping, selling, preparing for sale, or advertising to sell the
Collateral, or any portion thereof, irrespective of whether a sale is
consummated, (f) audit fees and expenses of the Lender Group related to audit
examinations of the Books to the extent of the fees and charges (and up to the
amount of any limitation) contained in this Agreement, (g) reasonable costs and
expenses of third party claims or any other suit paid or incurred by the Lender
Group in enforcing or defending the Transaction Documents or in connection with
the transactions contemplated by the Transaction Documents or the Lender Group's
relationship with Borrower or any guarantor of the Obligations, (h) Agent's and
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each Lender's reasonable fees and expenses (including reasonable attorneys fees)
incurred in advising, structuring, drafting, reviewing, administering, or
amending the Transaction Documents, PROVIDED that, so long as no Event of
Default shall have occurred and be continuing, Lender Group Expenses under this
clause (h) shall not include attorneys fees for more than one law firm, and (i)
Agent's and each Lender's reasonable fees and expenses (including attorneys
fees) incurred in terminating, enforcing (including attorneys fees and expenses
incurred in connection with a "workout," a "restructuring," or an Insolvency
Proceeding concerning Borrower or in exercising rights or remedies under the
Transaction Documents), or defending the Transaction Documents, irrespective of
whether suit is brought.
"Lender-Related Person" means, with respect to any Lender, such
Lender, together with such Lender's Affiliates, and the officers, directors,
employees, and agents of such Lender.
"Lien" means any interest in an asset securing an obligation owed
to, or a claim by, any Person other than the owner of the asset, whether such
interest shall be based on the common law, statute, or contract, whether such
interest shall be recorded or perfected, and whether such interest shall be
contingent upon the occurrence of some future event or events or the existence
of some future circumstance or circumstances, including the lien or security
interest arising from a mortgage, deed of trust, encumbrance, pledge,
hypothecation, assignment, deposit arrangement, security agreement, conditional
sale or trust receipt, or from a lease, consignment, or bailment for security
purposes and also including reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases, and other title
exceptions and encumbrances affecting real property.
"Loan Account" has the meaning set forth in SECTION 2.10.
"Loan Documents" means this Agreement, the Cash Management
Agreements, the Control Agreements, the Disbursement Letter, the Fee Letter, the
Guaranty, the Officers' Certificate, any note or notes executed by Borrower in
connection with this Agreement and payable to a member of the Lender Group, and
any other agreement entered into, now or in the future, by Borrower and the
Lender Group in connection with this Agreement.
"Major Casualty Proceeds" means (i) the aggregate insurance proceeds
received in connection with one or more related events by FW LLC or any
Subsidiary of FW LLC under any Property Insurance Policy or (ii) any award or
other cash compensation with respect to any one or more related condemnations of
property (or any transfer or disposition of property in lieu of condemnation)
received by FW LLC or any Subsidiary of FW LLC if the amount of such aggregate
insurance proceeds or award or other cash compensation exceeds $1,500,000.
"Material Adverse Change" means (a) a material adverse change in the
business, operations, results of operations, assets, liabilities or condition
(financial or otherwise) of the Parent and Originators (taken as a whole),
Borrower or Servicer, (b) a material impairment of Borrower's, Servicer's or any
Originator's ability to perform its obligations under the Transaction Documents
to which it is a party, (c) a material impairment of the enforceability or
priority of the Agent's Liens with respect to the Collateral as a result of an
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action or failure to act on the part of Borrower or (d) a material impairment of
the validity or enforceability of any of the Transaction Documents or the
validity, enforceability or collectibility of a material portion of the
Purchased Accounts (except as a result of the financial condition or bankruptcy
of an Account Debtor).
"Material Contracts" means the Debt Documents and, as of any date,
the top twenty five Contracts, each between an Originator and an Account Debtor,
ranked in accordance with gross revenue generated under such agreements during
the twelve-month period ending on the last day of the month preceding such date.
"Maturity Date" has the meaning set forth in SECTION 3.4.
"Maximum Revolver Amount" means $40,000,000.
"Moody's" means Xxxxx'x Investors Service, Inc. and any successor
thereto.
"Negotiable Collateral" means all of Borrower's now owned and
hereafter acquired right, title, and interest with respect to letters of credit,
letter of credit rights, instruments, promissory notes, drafts, documents, and
chattel paper (including electronic chattel paper and tangible chattel paper),
and any and all supporting obligations in respect thereof.
"Net Cash Proceeds" means, with respect to any Prepayment Event, an
amount equal to the cash proceeds received by FW LLC or any of its Subsidiaries
from or in respect of such Prepayment Event (including any cash proceeds
received by way of deferred payment (other than in respect of interest), but
only as and when received, less:
(a) any fees, costs and expenses reasonably incurred by such Person
in respect of such Prepayment Event;
(b) amounts required to be paid to holders of minority interests in
any Subsidiary as a result of such Prepayment Event;
(c) if such Prepayment Event is an Asset Sale or receipt of Major
Casualty Proceeds, (i) any taxes (including, without limitation, income taxes,
withholding taxes and repatriation taxes) actually paid or to be paid by such
Person or, if such Person is a partnership or a limited liability company, any
such taxes that would be payable assuming the highest corporate tax rate were
applicable to such Person, as estimated by an Authorized Officer of FW LLC,
giving effect to the overall tax position of FW LLC, in respect of such
Prepayment Event, (ii) the amount of all Indebtedness (other than the
Indebtedness under the Existing Credit Agreement or under the notes issued under
the Senior Indenture) secured by any assets subject to such Prepayment Event and
subject to mandatory prepayment as a result of such Prepayment Event and (iii)
in the case of a Prepayment Event involving a Foreign Subsidiary or Special
Purpose Subsidiary, any amount not permitted to be repatriated to a borrower
under the Existing Credit Agreement at such time because of contractual or legal
restrictions binding on such Foreign Subsidiary or Special Purpose Subsidiary
until such time as such amount is no longer restricted from being repatriated
(at which time such amount shall become Net Cash Proceeds); PROVIDED that the
Parent and its Subsidiaries shall have used commercially reasonable efforts to
ensure that any such contractual restriction is not materially more restrictive
than those in effect on the date hereof;
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(d) if such Prepayment Event is an Asset Sale, (i) the amount of any
reserves established by FW LLC and its Subsidiaries to fund purchase price
adjustments in respect of such Asset Sale and any reserves to fund contingent
liabilities payable by FW LLC and its Subsidiaries attributable to such Asset
Sale (as estimated by an Authorized Officer of FW LLC), including, without
limitation, liabilities under any indemnification obligations and severance and
other employee termination costs associated with such Asset Sale, until such
time as such amounts are no longer reserved or such reserve is no longer
necessary (at which time any remaining amounts will become Net Cash Proceeds),
(ii) amounts required to be paid at the closing of such Asset Sale with respect
to Indebtedness and other liabilities directly associated with the assets that
are the subject of such Asset Sale, including, without limitation, trade
payables and other accrued liabilities (to the extent not already reflected in
the amount of cash proceeds received by FW LLC or any of its Subsidiaries from
or in respect of such Prepayment Event), and (iii) in the case of an Asset Sale
with respect to the Existing Italian Joint Venture Entities (or the direct or
indirect Stock therein), up to $10,000,000 of the proceeds thereof contemplated
by the terms of such transaction to be reinvested in the Existing Italian Joint
Venture Entities and their Subsidiaries and/or in joint venture arrangements
entered into (or to be entered into) by such Persons; and
(e) if such Prepayment Event is the receipt of Major Casualty
Proceeds, the amount of the cash proceeds applied by FW LLC or a Subsidiary
within 180 days of the receipt thereof to the restoration or replacement of the
asset (or the reinvestment in an equivalent asset to be used in the business of
the respective Person) in respect of which such Major Casualty Proceeds were
received; PROVIDED that so long as FW LLC or a Subsidiary is at the end of such
180-day period diligently proceeding with the restoration or replacement of the
asset in respect of which such Major Casualty Proceeds were received, the
180-day period shall be extended to the date that is the earlier of (A) the date
on which FW LLC or such Subsidiary (x) completes such restoration or replacement
or (y) decides not to further pursue such restoration or replacement and (B) the
540th day after receipt thereof.
"Notice of Sole Control" means a written notice delivered by Agent
to any Cash Management Bank directing such Cash Management Bank to forward all
amounts on deposit in each Cash Management Account maintained with such Cash
Management Bank to the Agent's Account in accordance with SECTION 2.7(B)(III).
"Obligations" means all loans, Advances, debts, principal, interest
(including any interest that, but for the provisions of the Bankruptcy Code,
would have accrued), premiums, liabilities (including all amounts charged to
Borrower's Loan Account pursuant hereto), obligations, fees (including the fees
provided for in the Fee Letter), charges, costs, Lender Group Expenses
(including any fees or expenses that, but for the provisions of the Bankruptcy
Code, would have accrued), lease payments, guaranties, covenants, and duties of
any kind and description owing by Borrower to the Lender Group pursuant to or
evidenced by the Loan Documents and irrespective of whether for the payment of
money, whether direct or indirect, absolute or contingent, due or to become due,
now existing or hereafter arising, and including all interest not paid when due
and all Lender Group Expenses that Borrower is required to pay or reimburse by
the Transaction Documents, by law, or otherwise. Any reference in this Agreement
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or in the Transaction Documents to the Obligations shall include all amendments,
changes, extensions, modifications, renewals replacements, substitutions, and
supplements, thereto and thereof, as applicable, both prior and subsequent to
any Insolvency Proceeding.
"Officers' Certificate" means the representations and warranties of
officers form submitted by Agent to Borrower, together with Borrower's completed
responses to the inquiries set forth therein, the form and substance of such
responses to be satisfactory to Agent.
"Originating Lender" has the meaning set forth in SECTION 14.1(E).
"Originators" means (i) FW Constructors, FW Energy, FW Energy
Services, FW Power, FW USA and XX Xxxx and (ii) each Additional Originator.
"Overadvance" has the meaning set forth in SECTION 2.5.
"Parent" means Xxxxxx Xxxxxxx Ltd., a Bermuda limited company.
"Participant" has the meaning set forth in SECTION 14.1(E).
"Participant Register" has the meaning set forth in SECTION 14.1(H).
"Permitted Assets" has the meaning set forth in SECTION 5.11.
"Permitted Discretion" means a determination made in good faith and
in the exercise of reasonable business judgment.
"Permitted Dispositions" means the use or transfer of money or Cash
Equivalents by Borrower in a manner that is not prohibited by the terms of this
Agreement or the other Loan Documents.
"Permitted Investments" means (a) investments in Cash Equivalents,
and (b) investments in negotiable instruments for collection.
"Permitted Liens" means Liens held by Agent for the benefit of Agent
and the Lenders.
"Permitted Protest" means the right of Borrower to protest taxes
(other than payroll taxes or taxes that are the subject of a United States
federal tax lien) or rental payment, provided that (a) a reserve with respect to
such obligation is established on the Books in such amount as is required under
GAAP, (b) any such protest is instituted promptly and prosecuted diligently by
Borrower in good faith, and (c) Agent is satisfied that, while any such protest
is pending, there will be no impairment of the enforceability, validity, or
priority of any of the Agent's Liens.
"Perryville Lease Facilities" means the Perryville I Lease Facility
and the Perryville III Lease Facility.
"Perryville I Lease Facility" means that certain Financing Lease and
any Indebtedness secured directly or indirectly by an assignment of such
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Financing Lease of the property located at Perryville I Corporate Park, 00 Xxxxx
000 Xxxx, Xxxxx Xxxxxxxx, Xxx Xxxxxx.
"Perryville III Lease Facility" means the $37,000,000 Participation
Agreement and Loan Facility, dated as of December 16, 1994, among National
Westminster Bank PLC, the other lenders named therein and Perryville III Trust
and Master Lease, Subordinated Ground Lease and Construction Agreement between
Perryville III Trust and Xxxxxx Xxxxxxx Corporation and any Indebtedness secured
directly or indirectly by an assignment of such Financing Lease of the property
located at Perryville III Corporate Park, 00 Xxxxx 000 Xxxx, Xxxxx Xxxxxxxx, Xxx
Xxxxxx.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, limited liability company or other entity, or a government or any
political subdivision or agency thereof.
"Prepayment Event" means (i) any Asset Sale (other than any Asset
Sale, the Net Cash Proceeds of which, when aggregated with the Net Cash Proceeds
of any related Asset Sale, do not exceed $1,500,000), (ii) any Debt Incurrence,
(iii) any Equity Issuance or (iv) the receipt by FW LLC or any Subsidiary of FW
LLC of Major Casualty Proceeds.
"Project" means any municipal solid waste project or any other
project the assets of which are financed on a limited recourse basis.
"Projections" means with respect to any Person, such Person's
forecasted (a) balance sheets, (b) profit and loss statements, and (c) cash flow
statements, all prepared on a basis consistent with such Person's historical
financial statements, together with appropriate supporting details and a
statement of underlying assumptions.
"Property Insurance Policy" means any insurance policy maintained by
FW LLC or any of its Subsidiaries covering losses with respect to tangible real
or personal property or improvements, but excluding coverage for losses from
business interruption.
"Pro Rata Share" means, with respect to a Lender's obligation to
make Advances, receive payments of principal, interest, fees, costs, and
expenses with respect thereto, and all other matters (including the
indemnification obligations arising under SECTION 16.7), (i) prior to the
Commitments being terminated or reduced to zero, the percentage obtained by
dividing (A) such Lender's Commitment, by (B) the aggregate amount of
Commitments of all Lenders, and (ii) from and after the time that the
Commitments have been terminated or reduced to zero, the percentage obtained by
dividing (A) the aggregate unpaid principal amount of such Lender's Advances, by
(B) the aggregate unpaid principal amount of all Advances.
"Purchase Agreement" means the Purchase, Sale and Contribution
Agreement, dated as of the date hereof, among the Originators, Borrower and
Servicer.
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"Purchased Accounts" means Subject Accounts that are purchased by or
contributed to Borrower from any Originator pursuant to the Purchase Agreement.
"Record" means information that is inscribed on a tangible medium or
which is stored in an electronic or other medium and is retrievable in
perceivable form.
"Register" has the meaning set forth in SECTION 14.1(H).
"Related Fund" means, with respect to any Lender, a fund or account
managed by such Lender or an Affiliate of such Lender or its investment manager.
"Report" has the meaning set forth in SECTION 16.17.
"Required Lenders" means, at any time, Lenders whose Pro Rata Shares
aggregate 51% of the Commitments, or if the Commitments have been terminated
irrevocably, 51% of the Obligations then outstanding.
"Revolver Usage" means, as of any date of determination, the then
extant amount of outstanding Advances.
"Xxxxxxx Debt Documents" means the Exit Funding Agreement and each
other agreement or instrument relating to the Xxxxxxx Obligations as currently
in effect.
"Xxxxxxx Obligations" means, collectively, (a) FW LLC's obligations
under the $20,350,000 4.9% 1997 Construction (Equity) Bonds and (b) the
subordinated obligations under the Exit Funding Agreement relating to the
$95,000,000 7.25% 1999 Series C Term Bonds and the $18,000,000 7.0% 1999 Series
D Accretion Bonds.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc. and any successor thereto.
"Sale/Leaseback Transaction" means any arrangement whereby FW LLC or
any of its Subsidiaries shall sell or transfer any property, real or personal,
used or useful in its business, whether now owned or hereafter acquired, and
thereafter rent or lease property that it intends to use for substantially the
same purpose or purposes as the property sold or transferred. For purposes of
calculating "Senior Debt", the "principal amount" of any obligations of any
Person under any leases entered into in connection with a Sale/Leaseback
Transaction shall be determined as set forth in Schedule S-1.
"SEC" means the United States Securities and Exchange Commission and
any successor thereto.
"Securities Account" means a "securities account" as that term is
defined in the Code.
"Securitization Transaction" means the Transactions or any other
transaction in which FW LLC or any of its Subsidiaries sells or otherwise
transfers or pledges accounts receivable and related assets (a) to one or more
third party purchasers or lenders or (b) to a special purpose entity that
borrows against such accounts receivable or sells or pledges such accounts
receivable and related assets to one or more third party purchasers or lenders.
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"Senior Debt" shall mean the total principal amount of Indebtedness
of FW LLC and its consolidated Subsidiaries, determined on a consolidated basis,
excluding (a) the Convertible Subordinated Notes, (b) the subordinated portion
of the Xxxxxxx Obligations, (c) the Trust Preferred, (d) all Hedging Agreements,
(e) all Indebtedness to the extent of any cash collateral deposited to secure
such Indebtedness, (f) any other Subordinated Indebtedness and (g) the Existing
Foreign Sale/Leaseback Transactions (and any replacements, renewals or
refinancings thereof).
"Senior Debt Ratio" shall mean, at any date, the ratio of (i) Senior
Debt at such date to (ii) Consolidated Adjusted EBITDA for the period of four
fiscal quarters most recently ended on or prior to such date.
"Senior Indenture" means the Indenture, dated as of November 5,
1995, as amended, restated, supplemented or otherwise modified from time to
time, among FW LLC, FW USA, FW Power, FW Energy, Xxxxxx Xxxxxxx Inc., Xxxxxx
Xxxxxxx International Holdings, and the Senior Indenture Trustee regarding FW
LLC's 6 3/4% Notes due November 15, 2005.
"Senior Indenture Trustee" means BNY Midwest Trust Company or any
successor trustee appointed under the Senior Indenture.
"Servicer" means Xxxxxx Xxxxxxx Capital & Finance Corporation, a
Delaware corporation.
"Servicing Agreement" means the Servicing Agreement, dated as of the
date hereof, among Servicer, Borrower, the Originators and Agent.
"Servicing Fee" has the meaning set forth in SECTION 6.6(F).
"Settlement" has the meaning set forth in SECTION 2.3(F)(I).
"Settlement Date" has the meaning set forth in SECTION 2.3(F)(I).
"Single Originator Default" means (i) (A) any Event of Default
arising under SECTIONS 8.6, 8.8 or 8.15 or (B) any Material Adverse Change, in
each case, that is caused by the actions or failure to act of a Single
Originator or that is caused by events affecting only a Single Originator or
(ii) the failure of a Single Originator to be Solvent.
"Solvent" has the meaning set forth in the Purchase Agreement.
"Special Purpose Subsidiary" means (a) a Subsidiary of FW LLC formed
with the express and sole purpose of, and which is engaged solely in the
business of, constructing or owning, leasing or operating a specific Project,
and with respect to which Subsidiary, neither FW LLC nor any of its other
Subsidiaries is obligated (except as guarantor of completion or performance) to
pay any Indebtedness (including lease obligations) incurred to construct, own,
lease or operate any such Project or any other Indebtedness of such Subsidiary,
under the Exit Funding Agreement, so long as such companies otherwise qualify
under this definition or (b) a Domestic Subsidiary formed with the express and
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sole purpose of, and which is engaged solely in the business of, acting as a
bankruptcy-remote conduit in connection with a Securitization Transaction.
"Specified Financial Covenants" means the financial covenants set
forth in Section 7.20(b).
"Specified Provisions" has the meaning set forth in Section
7.20(b)(iv).
"Stock" means all shares, options, warrants, interests,
participations, or other equivalents (regardless of how designated) of or in a
Person, whether voting or nonvoting, including common stock, preferred stock, or
any other "equity security" (as such term is defined in Rule 3a11-1 of the
General Rules and Regulations promulgated by the SEC under the Exchange Act).
"Subject Accounts" means any right to receive payment, whether
constituting an "account", "chattel paper", "instrument" or "general intangible"
(as each such term is defined in the Code), and any and all supporting
obligations in respect thereof, that are created by any Originator, and that
arise out of such Originator's sale of goods or rendition of services, and any
and all supporting obligations in respect thereof.
"Subordinated Indebtedness" shall mean the Convertible Subordinated
Notes, the subordinated portion of the Xxxxxxx Obligations and Indebtedness
incurred pursuant to Section 6.03(k) of the Existing Credit Agreement.
"Subordinated Indenture" means the Indenture, dated as of May 31,
2001, as amended, restated, supplemented or otherwise modified from time to
time, among Parent, FW LLC and the Subordinated Indenture Trustee regarding
Parent's 6.50% Convertible Subordinated Notes due 2007.
"Subordinated Indenture Trustee" means BNY Midwest Trust Company or
any successor trustee appointed under the Subordinated Indenture.
"Subordinated Notes" means the Subordinated Promissory Notes, each
dated the date hereof, made by Borrower in favor of the Originators, which
Subordinated Promissory Notes shall be subordinate to the Obligations on terms
satisfactory to the Lenders.
"Subsidiary" of a Person means a corporation, partnership, limited
liability company, or other entity in which that Person directly or indirectly
owns or controls the shares of Stock having ordinary voting power to elect a
majority of the board of directors (or appoint other comparable managers) of
such corporation, partnership, limited liability company, or other entity.
"Swing Lender" means Foothill or any other Lender that, at
the request of Borrower and with the consent of Agent agrees, in such Lender's
sole
discretion, to become the Swing Lender hereunder.
"Swing Loan" has the meaning set forth in SECTION 2.3(D)(I).
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"Tangible Net Worth" means, as of any date of determination, the
result of (a) Borrower's total stockholder's equity, minus (b) the sum of (i)
all Intangible Assets of Borrower, (ii) all of Borrower's prepaid expenses, and
(iii) all amounts due to Borrower from Affiliates.
"Taxes" has the meaning set forth in SECTION 16.11.
"Temporary Cash Investment" means any Investment in (a) securities
issued or directly and fully guaranteed or insured by the United States of
America government or any agency or instrumentality thereof having maturities of
not more than one year from the date of acquisition, (b) marketable direct
obligations issued by any State of the United States or any political
subdivision of any such State or any public instrumentality thereof maturing
within one year from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from either S&P or
Xxxxx'x, (c) demand deposits, time deposits and certificates of deposits with
maturities of one year or less from the date of acquisition, bankers'
acceptances with maturities not exceeding one year from the date of acquisition
and overnight bank deposits, in each case with any bank or trust company
organized or licensed under the laws of the United States of America or any
State thereof having capital, surplus and undivided profits in excess of $250
million, (d) repurchase obligations with a term of not more than seven days for
underlying securities of the type described in clauses (a), (b) and (c) above
entered into with any financial institution meeting the qualifications specified
in clause (c) above, (e) commercial paper rated at least P-1 by Xxxxx'x and A-1
by S&P at the time of acquisition thereof or, if such commercial paper is rated
by only one such agency, at least such rating from such agency, (f) investments
in any Dollar denominated money market fund as defined by Rule 2a-7 of the
General Rules and Regulations promulgated under the Investment Company Act of
1940 and (g) in the case of a Foreign Subsidiary, substantially similar
investments denominated in foreign currencies (including similarly capitalized
foreign banks).
"Testing Period" means, with respect to any week, the eight-week
period ending at the end of such week, PROVIDED that, if any such eight-week
period encompasses an entire fiscal month consisting of five weeks, then such
Testing Period shall be expanded to the nine-week period ending at the end of
such week.
"Transaction Documents" means the Loan Documents, the Servicing
Agreement, the Purchase Agreement and the Subordinated Note.
"Transactions" means the Initial Transactions and the purchase by
Borrower of Subject Accounts, or the acceptance by Borrower of the contribution
thereof, from the Originators from time to time pursuant to the Purchase
Agreement.
"Trust Preferred" means the 9% $175,000,000 Trust Preferred
Securities of FW LLC (as successor to Xxxxxx Xxxxxxx Corporation) issued on or
about January 13, 1999, and the related junior subordinated debentures.
"Trust Preferred Indenture" means, collectively, the Indenture and
the First Supplemental Indenture, each dated January 13, 1999, as amended,
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restated, supplemented or otherwise modified from time to time, between FW LLC
and the Trust Preferred Indenture Trustee regarding the Trust Preferred.
"Trust Preferred Indenture Trustee" means Xxxxxx Trust and Savings
Bank or any successor trustee appointed under the Trust Preferred Indenture.
"Voidable Transfer" has the meaning set forth in SECTION 17.7.
"Xxxxx Fargo" means Xxxxx Fargo Bank, National Association, a
national banking association.
1.2 ACCOUNTING TERMS. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP. When used herein, the term
"financial statements" shall include the notes and schedules thereto.
1.3 CODE. Any terms used in this Agreement that are defined in the
Code shall be construed and defined as set forth in the Code unless otherwise
defined herein.
1.4 CONSTRUCTION. Unless the context of this Agreement or any other
Loan Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the term "including" is
not limiting, and the term "or" has, except where otherwise indicated, the
inclusive meaning represented by the phrase "and/or." The words "hereof,"
"herein," "hereby," "hereunder," and similar terms in this Agreement or any
other Loan Document refer to this Agreement or such other Loan Document, as the
case may be, as a whole and not to any particular provision of this Agreement or
such other Loan Document, as the case may be. Section, subsection, clause,
schedule, and exhibit references herein are to this Agreement unless otherwise
specified. Any reference in this Agreement or in the other Loan Documents to any
agreement, instrument, or document shall include all alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements, thereto and thereof, as applicable (subject to any
restrictions on such alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and supplements
set forth herein). Any reference herein to any Person shall be construed to
include such Person's successors and assigns. Any requirement of a writing
contained herein or in the other Loan Documents shall be satisfied by the
transmission of a Record and any Record transmitted shall constitute a
representation and warranty as to the accuracy and completeness of the
information contained therein.
1.5 SCHEDULES AND EXHIBITS. All of the schedules and exhibits
attached to this Agreement shall be deemed incorporated herein by reference.
2. LOAN AND TERMS OF PAYMENT.
2.1 REVOLVER ADVANCES.
(a) Subject to the terms and conditions of this Agreement, and
during the term of this Agreement, each Lender with a Commitment agrees
(severally, not jointly or jointly and severally) to make advances ("ADVANCES")
to Borrower in an amount at any one time outstanding not to exceed such Lender's
Pro Rata Share of an amount equal to THE LESSER OF (i) the Maximum Revolver
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Amount, or (ii) the Borrowing Base. For purposes of this Agreement, "BORROWING
BASE," as of any date of determination, shall mean the result of:
(x) THE LESSER OF
(i) 85% of the amount of Eligible Accounts,
LESS the amount, if any, of the Dilution Reserve, and
(ii) an amount equal to Borrower's Collections with\
respect to Accounts for the immediately preceding 30
day period, MINUS
(y) the aggregate amount of reserves, if any, established by
Agent under SECTION 2.1(B).
(b) Anything to the contrary in this SECTION 2.1 notwithstanding,
Agent shall have the right to establish reserves in such amounts, and with
respect to such matters, as Agent in its Permitted Discretion shall deem
necessary or appropriate, against the Borrowing Base, including reserves with
respect to (i) sums that Borrower is required to pay (such as taxes and
assessments) and has failed to pay under any Section of this Agreement or any
other Loan Document, and (ii) amounts owing by Borrower to any Person to the
extent secured by a Lien on, or trust over, any of the Collateral, which Lien or
trust, in the Permitted Discretion of Agent likely would have a priority
superior to the Agent's Liens (such as Liens or trusts in favor of landlords,
carriers, mechanics, materialmen, laborers, or suppliers, or Liens or trusts for
AD VALOREM, excise, sales, or other taxes where given priority under applicable
law) in and to such item of the Collateral.
(c) The Lenders with Commitments shall have no obligation to make
additional Advances hereunder to the extent such additional Advances would cause
the Revolver Usage to exceed the Maximum Revolver Amount.
(d) Amounts borrowed pursuant to this Section may be repaid (without
premium or penalty except as provided in SECTION 3.6) and, subject to the terms
and conditions of this Agreement, reborrowed at any time during the term of this
Agreement.
2.2 [INTENTIONALLY OMITTED].
2.3 BORROWING PROCEDURES AND SETTLEMENTS.
(a) PROCEDURE FOR BORROWING. Each Borrowing shall be made by an
irrevocable written request by an Authorized Person delivered to Agent (which
notice must be received by Agent no later than 10:00 a.m. (California time) on
the Business Day prior to the date that is the requested Funding Date specifying
(i) the amount of such Borrowing, and (ii) the requested Funding Date, which
shall be a Business Day; PROVIDED, HOWEVER, that in the case of a request for
Swing Loan in an amount of $5,000,000, or less, such notice will be timely
received if it is received by Agent no later than 10:00 a.m. (California time)
on the Business Day that is the requested Funding Date) specifying (i) the
amount of such Borrowing, and (ii) the requested Funding Date, which shall be a
Business Day. At Agent's election, in lieu of delivering the above-described
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written request, any Authorized Person may give Agent telephonic notice of such
request by the required time, with such telephonic notice to be confirmed in
writing within 24 hours of the giving of such notice.
(b) AGENT'S ELECTION. Promptly after receipt of a request for a
Borrowing pursuant to SECTION 2.3(A), Agent shall elect, in its discretion, (i)
to have the terms of SECTION 2.3(C) apply to such requested Borrowing, or (ii)
to request Swing Lender to make a Swing Loan pursuant to the terms of SECTION
2.3(D) in the amount of the requested Borrowing; PROVIDED, HOWEVER, that if
Swing Lender declines in its sole discretion to make a Swing Loan pursuant to
SECTION 2.3(D), Agent shall elect to have the terms of SECTION 2.3(C) apply to
such requested Borrowing.
(c) MAKING OF ADVANCES.
(i) In the event that Agent shall elect to have the terms of
this SECTION 2.3(C) apply to a requested Borrowing as described in
SECTION 2.3(B), then promptly after receipt of a request for a
Borrowing pursuant to SECTION 2.3(A), Agent shall notify the
Lenders, not later than 1:00 p.m. (California time) on the Business
Day immediately preceding the Funding Date applicable thereto, by
telecopy, telephone, or other similar form of transmission, of the
requested Borrowing. Each Lender shall make the amount of such
Lender's Pro Rata Share of the requested Borrowing available to
Agent in immediately available funds, to Agent's Account, not later
than 10:00 a.m. (California time) on the Funding Date applicable
thereto. After Agent's receipt of the proceeds of such Advances,
upon satisfaction of the applicable conditions precedent set forth
in SECTION 3 hereof, Agent shall make the proceeds thereof available
to Borrower on the applicable Funding Date by transferring
immediately available funds equal to such proceeds received by Agent
to Borrower's Designated Account; PROVIDED, HOWEVER, that, subject
to the provisions of SECTION 2.3(I), Agent shall not request any
Lender to make, and no Lender shall have the obligation to make, any
Advance if Agent shall have actual knowledge that (1) one or more of
the applicable conditions precedent set forth in SECTION 3
will not be satisfied on the requested Funding Date for the
applicable Borrowing unless such condition has been waived, or (2)
the requested Borrowing would exceed the Availability on such
Funding Date.
(ii) Unless Agent receives notice from a Lender on or prior to
the Closing Date or, with respect to any Borrowing after the Closing
Date, at least one (1) Business Day prior to the date of such
Borrowing, that such Lender will not make available as and when
required hereunder to Agent for the account of Borrower the amount
of that Lender's Pro Rata Share of the Borrowing, Agent may assume
that each Lender has made or will make such amount available to
Agent in immediately available funds on the Funding Date and Agent
may (but shall not be so required), in reliance upon such
assumption, make available to Borrower on such date a corresponding
amount. If and to the extent any Lender shall not have made its full
amount available to Agent in immediately available funds and Agent
in such circumstances has made available to Borrower such amount,
that Lender shall on the Business Day following such Funding Date
make such amount available to Agent, together with interest at the
Defaulting Lender Rate for each day during such period. A notice
submitted by Agent to any Lender
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with respect to amounts owing under this subsection shall be
conclusive, absent manifest error. If such amount is so made
available, such payment to Agent shall constitute such Lender's
Advance on the date of Borrowing for all purposes of this Agreement.
If such amount is not made available to Agent on the Business Day
following the Funding Date, Agent will notify Borrower of such
failure to fund and, upon demand by Agent, Borrower shall pay such
amount to Agent for Agent's account, together with interest thereon
for each day elapsed since the date of such Borrowing, at a rate per
annum equal to the interest rate applicable at the time to the
Advances composing such Borrowing. The failure of any Lender to make
any Advance on any Funding Date shall not relieve any other Lender
of any obligation hereunder to make an Advance on such Funding Date,
but no Lender shall be responsible for the failure of any other
Lender to make the Advance to be made by such other Lender on any
Funding Date.
(iii) Agent shall not be obligated to transfer to a Defaulting
Lender any payments made by Borrower to Agent for the Defaulting
Lender's benefit, and, in the absence of such transfer to the
Defaulting Lender, Agent shall transfer any such payments to each
other non-Defaulting Lender member of the Lender Group ratably in
accordance with their Commitments (but only to the extent that such
Defaulting Lender's Advance was funded by the other members of the
Lender Group) or, if so directed by Borrower and if no Default or
Event of Default had occurred and is continuing (and to the extent
such Defaulting Lender's Advance was not funded by the Lender
Group), retain same to be re-advanced to Borrower as if such
Defaulting Lender had made Advances to Borrower. Subject to the
foregoing, Agent may hold and, in its Permitted Discretion, re-lend
to Borrower for the account of such Defaulting Lender the amount of
all such payments received and retained by it for the account of
such Defaulting Lender. Solely for the purposes of voting or
consenting to matters with respect to the Loan Documents, such
Defaulting Lender shall be deemed not to be a "Lender" and such
Lender's Commitment shall be deemed to be zero. This Section shall
remain effective with respect to such Lender until (x) the
Obligations under this Agreement shall have been declared or shall
have become immediately due and payable, (y) the non-Defaulting
Lenders, Agent, and Borrower shall have waived such Defaulting
Lender's default in writing, or (z) the Defaulting Lender makes its
Pro Rata Share of the applicable Advance and pays to Agent all
amounts owing by Defaulting Lender in respect thereof. The operation
of this Section shall not be construed to increase or otherwise
affect the Commitment of any Lender, to relieve or excuse the
performance by such Defaulting Lender or any other Lender of its
duties and obligations hereunder, or to relieve or excuse the
performance by Borrower of its duties and obligations hereunder to
Agent or to the Lenders other than such Defaulting Lender. Any such
failure to fund by any Defaulting Lender shall constitute a material
breach by such Defaulting Lender of this Agreement and shall entitle
Borrower at its option, upon written notice to Agent, to arrange for
a substitute Lender to assume the Commitment of such Defaulting
Lender, such substitute Lender to be acceptable to Agent. In
connection with the arrangement of such a substitute Lender, the
Defaulting Lender shall have no right to refuse to be replaced
hereunder, and agrees to execute and deliver a completed form of
Assignment and Acceptance Agreement in favor of the substitute
Lender (and agrees that it shall be deemed to have executed and
delivered such document if it fails to do so) subject only to being
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repaid its share of the outstanding Obligations without any premium
or penalty of any kind whatsoever; PROVIDED FURTHER, HOWEVER, that
any such assumption of the Commitment of such Defaulting Lender
shall not be deemed to constitute a waiver of any of the Lender
Groups' or Borrower's rights or remedies against any such Defaulting
Lender arising out of or in relation to such failure to fund.
(d) MAKING OF SWING LOANS.
(i) In the event Agent shall elect, with the consent of Swing
Lender, as a Lender, to have the terms of this SECTION 2.3(D) apply
to a requested Borrowing as described in SECTION 2.3(B), Swing
Lender as a Lender shall make such Advance in the amount of such
Borrowing (any such Advance made solely by Swing Lender as a Lender
pursuant to this SECTION 2.3(D) being referred to as a "SWING LOAN"
and such Advances being referred to collectively as "SWING LOANS")
available to Borrower on the Funding Date applicable thereto by
transferring immediately available funds to Borrower's Designated
Account. Each Swing Loan is an Advance hereunder and shall be
subject to all the terms and conditions applicable to other
Advances, except that all payments on any Swing Loan shall be
payable to Swing Lender as a Lender solely for its own account (and
for the account of the holder of any participation interest with
respect to such Swing Loan). Subject to the provisions of SECTION
2.3(I), Agent shall not request Swing Lender as a Lender to make,
and Swing Lender as a Lender shall not make, any Swing Loan if Agent
has actual knowledge that (i) one or more of the applicable
conditions precedent set forth in SECTION 3 will not be satisfied on
the requested Funding Date for the applicable Borrowing unless such
condition has been waived, or (ii) the requested Borrowing would
exceed the Availability on such Funding Date. Swing Lender as a
Lender shall not otherwise be required to determine whether the
applicable conditions precedent set forth in SECTION 3 have been
satisfied on the Funding Date applicable thereto prior to making, in
its sole discretion, any Swing Loan.
(ii) The Swing Loans shall be secured by the Agent's Liens,
shall constitute Advances and Obligations hereunder, and shall bear
interest at the rate applicable from time to time to Advances.
(e) AGENT ADVANCES.
(i) Agent hereby is authorized by Borrower and the Lenders,
from time to time in Agent's sole discretion, (1) after the
occurrence and during the continuance of a Default or an Event of
Default, or (2) at any time that any of the other applicable
conditions precedent set forth in SECTION 3 have not been satisfied,
to make Advances to Borrower on behalf of the Lenders that Agent, in
its Permitted Discretion deems necessary or desirable (A) to
preserve or protect the Collateral, or any portion thereof, (B) to
enhance the likelihood of repayment of the Obligations, or (C) to
pay any other amount chargeable to Borrower pursuant to the terms of
this Agreement, including Lender Group Expenses and the costs, fees,
and expenses described in SECTION 10 (any of the Advances described
in this SECTION 2.3(E) shall be referred to as "Agent Advances"),
PROVIDED, that notwithstanding anything to the contrary contained in
this SECTION 2.3(E), the aggregate principal amount of Advances
outstanding at any time, when taken together with the aggregate
principal amount of Overadvances made in accordance with SECTION
2.3(I) outstanding at any time, shall not exceed an amount equal to
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the lesser of (x) 10% of the Borrowing Base then in effect and (y)
$4,000,000. Each Agent Advance is an Advance hereunder and shall be
subject to all the terms and conditions applicable to other
Advances, except that all payments thereon shall be payable to Agent
solely for its own account (and for the account of the holder of any
participation interest with respect to such Agent Advance).
(ii) The Agent Advances shall be repayable by Borrower on
demand and secured by the Agent's Liens granted to Agent under the
Loan Documents, shall constitute Advances and Obligations hereunder,
and shall bear interest at the rate applicable from time to time to
Advances.
(f) SETTLEMENT. It is agreed that each Lender's funded portion
of the Advances is intended by the Lenders to equal, at all times,
such Lender's Pro Rata Share of the outstanding Advances. Such
agreement notwithstanding, Agent, Swing Lender, and the other
Lenders agree (which agreement shall not be for the benefit of or
enforceable by Borrower) that in order to facilitate the
administration of this Agreement and the other Loan Documents,
settlement among them as to the Advances, the Swing Loans, and the
Agent Advances shall take place on a periodic basis in accordance
with the following provisions:
(i) Agent shall request settlement ("SETTLEMENT") with the
Lenders on a weekly basis, or on a more frequent basis if so
determined by Agent, (1) on behalf of Swing Lender, with respect to
each outstanding Swing Loan, (2) for itself, with respect to each
Agent Advance, and (3) with respect to Collections received, as to
each by notifying the Lenders by telecopy, telephone, or other
similar form of transmission, of such requested Settlement, no later
than 2:00 p.m. (California time) on the Business Day immediately
prior to the date of such requested Settlement (the date of such
requested Settlement being the "SETTLEMENT DATE"). Such notice of a
Settlement Date shall include a summary statement of the amount of
outstanding Advances, Swing Loans, and Agent Advances for the period
since the prior Settlement Date. Subject to the terms and conditions
contained herein (including SECTION 2.3(C)(III)): (y) if a Lender's
balance of the Advances, Swing Loans, and Agent Advances exceeds
such Lender's Pro Rata Share of the Advances, Swing Loans, and Agent
Advances as of a Settlement Date, then Agent shall, by no later than
12:00 p.m. (California time) on the Settlement Date, transfer in
immediately available funds to the account of such Lender as such
Lender may designate, an amount such that each such Lender shall,
upon receipt of such amount, have as of the Settlement Date, its Pro
Rata Share of the Advances, Swing Loans, and Agent Advances, and (z)
if a Lender's balance of the Advances, Swing Loans, and Agent
Advances is less than such Lender's Pro Rata Share of the Advances,
Swing Loans, and Agent Advances as of a Settlement Date, such Lender
shall no later than 12:00 p.m. (California time) on the Settlement
Date transfer in immediately available funds to the Agent's Account,
an amount such that each such Lender shall, upon transfer of such
amount, have as of the Settlement Date, its Pro Rata Share of the
Advances, Swing Loans, and Agent Advances. Such amounts made
available to Agent under clause (z) of the immediately preceding
sentence shall be applied against the amounts of the applicable
Swing Loan or Agent Advance and, together with the portion of such
Swing Loan or Agent Advance representing Swing Lender's Pro Rata
Share thereof, shall constitute Advances of such Lenders. If any
such amount is not made available to Agent by any Lender on the
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Settlement Date applicable thereto to the extent required by the
terms hereof, Agent shall be entitled to recover for its account
such amount on demand from such Lender together with interest
thereon at the Defaulting Lender Rate.
(ii) In determining whether a Lender's balance of the Advances,
Swing Loans, and Agent Advances is less than, equal to, or greater
than such Lender's Pro Rata Share of the Advances, Swing Loans, and
Agent Advances as of a Settlement Date, Agent shall, as part of the
relevant Settlement, apply to such balance the portion of payments
actually received in good funds by Agent with respect to principal,
interest, and fees payable by Borrower and allocable to the Lenders
hereunder, and proceeds of Collateral. To the extent that a net
amount is owed to any such Lender after such application, such net
amount shall be distributed by Agent to that Lender as part of such
next Settlement.
(iii) Between Settlement Dates, Agent, to the extent no Agent
Advances or Swing Loans are outstanding, may pay over to Swing
Lender any payments received by Agent, that in accordance with the
terms of this Agreement would be applied to the reduction of the
Advances, for application to Swing Lender's Pro Rata Share of the
Advances. If, as of any Settlement Date, Collections received since
the then immediately preceding Settlement Date have been applied to
Swing Lender's Pro Rata Share of the Advances other than to Swing
Loans, as provided for in the previous sentence, Swing Lender shall
pay to Agent for the accounts of the Lenders, and Agent shall pay to
the Lenders, to be applied to the outstanding Advances of such
Lenders, an amount such that each Lender shall, upon receipt of such
amount, have, as of such Settlement Date, its Pro Rata Share of the
Advances. During the period between Settlement Dates, Swing Lender
with respect to Swing Loans, Agent with respect to Agent Advances,
and each Lender (subject to the effect of letter agreements between
Agent and individual Lenders) with respect to the Advances other
than Swing Loans and Agent Advances, shall be entitled to interest
at the applicable rate or rates payable under this Agreement on the
daily amount of funds employed by Swing Lender, Agent, or the
Lenders, as applicable.
(g) NOTATION. Agent shall record on its books the principal
amount of the Advances owing to each Lender, including the Swing
Loans owing to Swing Lender, and Agent Advances owing to Agent, and
the interests therein of each Lender, from time to time. In
addition, each Lender is authorized, at such Lender's option, to
note the date and amount of each payment or prepayment of principal
of such Lender's Advances in its books and records, including
computer records, such books and records constituting conclusive
evidence, absent manifest error, of the accuracy of the information
contained therein.
(h) LENDERS' FAILURE TO PERFORM. All Advances (other than Swing
Loans and Agent Advances) shall be made by the Lenders
contemporaneously and in accordance with their Pro Rata Shares. It
is understood that (i) no Lender shall be responsible for any
failure by any other Lender to perform its obligation to make any
Advance (or other extension of credit) hereunder, nor shall any
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Commitment of any Lender be increased or decreased as a result of
any failure by any other Lender to perform its obligations
hereunder, and (ii) no failure by any Lender to perform its
obligations hereunder shall excuse any other Lender from its
obligations hereunder.
(i) OPTIONAL OVERADVANCES.
(i) Any contrary provision of this Agreement (including SECTION
2.3(I)(II)) notwithstanding, the Lenders hereby authorize Agent or
Swing Lender, as applicable, and Agent or Swing Lender, as
applicable, may, but is not obligated to, knowingly and
intentionally, continue to make Advances (including Swing Loans) to
Borrower notwithstanding that an Overadvance exists or thereby would
be created, so long as (A) after giving effect to such Advances
(including a Swing Loan), the outstanding Revolver Usage does not
exceed the Borrowing Base by more than an amount equal to the lesser
of (x) 10% of the Borrowing Base then in effect and (y) $4,000,000,
(B) after giving effect to such Advances (including a Swing Loan),
the outstanding Revolver Usage (except for and excluding amounts
charged to the Loan Account for interest, fees, or Lender Group
Expenses) does not exceed the Maximum Revolver Amount, (C) the
aggregate principal amount of Overadvances made pursuant to this
SECTION 2.3(I), when taken together with the aggregate principal
amount of Agent Advances made pursuant to SECTION 2.3(E), does not
exceed at any time an amount equal to the lesser of (x) 10% of the
Borrowing Base then in effect and (y) $4,000,000 and (D) at the time
of the making of any such Advance (including any Swing Loan), Agent
does not believe, in good faith, that the Overadvance created by
such Advance will be outstanding for more than 90 days. The
foregoing provisions are for the exclusive benefit of Agent, Swing
Lender, and the Lenders and are not intended to benefit Borrower in
any way. The Advances and Swing Loans, as applicable, that are made
pursuant to this SECTION 2.3(I) shall be subject to the same terms
and conditions as any other Advance or Swing Loan, as applicable,
except that the rate of interest applicable thereto shall be the
rate applicable to Advances under SECTION 2.6(C) hereof without
regard to the presence or absence of a Default or Event of Default.
(ii) In the event Agent obtains actual knowledge that the
Revolver Usage exceeds the amounts permitted by the preceding
paragraph, regardless of the amount of, or reason for, such excess,
Agent shall notify Lenders as soon as practicable (and prior to
making any (or any additional) intentional Overadvances (except for
and excluding amounts charged to the Loan Account for interest,
fees, or Lender Group Expenses) unless Agent determines that prior
notice would result in imminent harm to the Collateral or its
value), and the Lenders with Commitments thereupon shall, together
with Agent, jointly determine the terms of arrangements that shall
be implemented with Borrower intended to reduce, within a reasonable
time, the outstanding principal amount of the Advances to Borrower
to an amount permitted by the preceding paragraph. In the event
Agent or any Lender disagrees over the terms of reduction or
repayment of any Overadvance, the terms of reduction or repayment
thereof shall be implemented according to the determination of the
Required Lenders.
(iii) Each Lender with a Commitment shall be obligated to
settle with Agent as provided in Section 2.3(f) for the amount of
such Lender's Pro Rata Share of any unintentional Overadvances by
Agent reported to such Lender, any intentional Overadvances made as
permitted under this Section 2.3(i), and any Overadvances resulting
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from the charging to the Loan Account of interest, fees, or Lender
Group Expenses.
2.4 PAYMENTS.
(a) PAYMENTS BY BORROWER.
(i) Except as otherwise expressly provided herein, all payments
by Borrower shall be made to Agent's Account for the account of the
Lender Group and shall be made in immediately available funds, no
later than 11:00 a.m. (California time) on the date when due. Any
payment received by Agent later than 11:00 a.m. (California time)
shall be deemed to have been received on the following Business Day
and any applicable interest or fee shall continue to accrue until
such following Business Day.
(ii) Unless Agent receives notice from Borrower prior to the
date on which any payment is due to the Lenders that Borrower will
not make such payment in full as and when required, Agent may assume
that Borrower has made (or will make) such payment in full to Agent
on such date in immediately available funds and Agent may (but shall
not be so required), in reliance upon such assumption, distribute to
each Lender on such due date an amount equal to the amount then due
such Lender. If and to the extent Borrower does not make such
payment in full to Agent on the date when due, each Lender severally
shall repay to Agent on demand such amount distributed to such
Lender, together with interest thereon at the Defaulting Lender Rate
for each day from the date such amount is distributed to such Lender
until the date repaid.
(b) APPORTIONMENT AND APPLICATION OF PAYMENTS.
(i) Except as otherwise provided with respect to Defaulting
Lenders and except as otherwise provided in the Loan Documents
(including letter agreements between Agent and individual Lenders),
aggregate principal and interest payments shall be apportioned
ratably among the Lenders (according to the unpaid principal balance
of the Obligations to which such payments relate held by each
Lender) and payments of fees and expenses (other than fees or
expenses that are for Agent's separate account, after giving effect
to any letter agreements between Agent and individual Lenders) shall
be apportioned ratably among the Lenders. All payments shall be
remitted to Agent and all such payments (other than payments
received while no Default or Event of Default has occurred and is
continuing and which relate to the payment of principal or interest
of specific Obligations or which relate to the payment of specific
fees), and all proceeds of Accounts or other Collateral received by
Agent, shall be applied as follows:
(A) FIRST, to pay any Lender Group Expenses then due to Agent
under the Loan Documents, until paid in full,
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(B) SECOND, to pay any Lender Group Expenses then due to the
Lenders under the Loan Documents, on a ratable basis, until paid in
full,
(C) THIRD, to pay any fees then due to Agent (for its separate
account, after giving effect to any letter agreements between Agent
and individual Lenders) under the Loan Documents until paid in full,
(D) FOURTH, to pay any fees then due to any or all of the
Lenders (after giving effect to any letter agreements between Agent
and individual Lenders) under the Loan Documents, on a ratable
basis, until paid in full,
(E) FIFTH, to pay interest due in respect of all Agent
Advances, until paid in full,
(F) SIXTH, ratably to pay interest due in respect of the
Advances (other than Agent Advances), and the Swing Loans, until
paid in full,
(G) SEVENTH, to pay the principal of all Agent Advances until
paid in full,
(H) EIGHTH, to pay the principal of all Swing Loans until paid
in full,
(I) NINTH, to pay the principal of all Advances (other than
Agent Advances), until paid in full,
(J) TENTH, to pay any other Obligations until paid in full, and
(K) ELEVENTH, to Borrower (to be wired to the Designated
Account) or such other Person entitled thereto under applicable law.
(ii) Agent promptly shall distribute to each Lender, pursuant
to the applicable wire instructions received from each Lender in
writing, such funds as it may be entitled to receive, subject to a
Settlement delay as provided in SECTION 2.3(H).
(iii) In each instance, so long as no Event of Default has
occurred and is continuing, SECTION 2.4(B) shall not be deemed to
apply to any payment by Borrower specified by Borrower to be for the
payment of specific Obligations then due and payable (or prepayable)
under any provision of this Agreement.
(iv) For purposes of the foregoing, "paid in full" means
payment of all amounts owing under the Loan Documents according to
the terms thereof, including loan fees, service fees, professional
fees, interest (and specifically including interest accrued after
the commencement of any Insolvency Proceeding), default interest,
interest on interest, and expense reimbursements, whether or not the
same would be or is allowed or disallowed in whole or in part in any
Insolvency Proceeding.
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(v) Notwithstanding anything to the contrary, the Applicable
Prepayment Premium shall not be paid to any Lender until all other
Obligations have been paid in full.
(vi) In the event of a direct conflict between the priority
provisions of this SECTION 2.4 and other provisions contained in any
other Loan Document, it is the intention of the parties hereto that
such priority provisions in such documents shall be read together
and construed, to the fullest extent possible, to be in concert with
each other. In the event of any actual, irreconcilable conflict that
cannot be resolved as aforesaid, the terms and provisions of this
SECTION 2.4 shall control and govern.
2.5 OVERADVANCES. If, at any time or for any reason, the amount
of Obligations owed by Borrower to the Lender Group pursuant to
SECTION 2.1 is greater than either the Dollar or percentage
limitations set forth in SECTION 2.1, (an "Overadvance"), Borrower
immediately shall pay to Agent, in cash, the amount of such excess,
which amount shall be used by Agent to reduce the Obligations in
accordance with the priorities set forth in SECTION 2.4(B). In
addition, Borrower hereby promises to pay the Obligations (including
principal, interest, fees, costs, and expenses) in Dollars in full
to the Lender Group as and when due and payable under the terms of
this Agreement and the other Loan Documents.
2.6 INTEREST RATES: RATES, PAYMENTS, AND CALCULATIONS.
(a) INTEREST RATE. Except as provided in paragraphs (b) and (c)
below, all Obligations that have been charged to the Loan Account
pursuant to the terms hereof shall bear interest on the Daily
Balance thereof at a per annum rate equal to the Base Rate plus the
Base Rate Margin.
(b) MINIMUM INTEREST. The foregoing paragraph (a)
notwithstanding, at no time shall any portion of the Obligations
bear interest on the Daily Balance thereof at a per annum rate less
than 10.0%. To the extent that interest accrued hereunder at the
rate set forth herein would be less than the foregoing minimum daily
rate, the interest rate chargeable hereunder for such day
automatically shall be deemed increased to the minimum rate.
(c) DEFAULT RATE. Upon the occurrence and during the
continuation of an Event of Default (and at the election of Agent or
the Required Lenders), all Obligations that are due and payable,
whether or not such Obligations have been charged to the Loan
Account pursuant to the terms hereof, shall bear interest on the
Daily Balance thereof at a per annum rate equal to 2.0 percentage
points above the per annum rate otherwise applicable hereunder.
(d) PAYMENT. Interest and all fees payable hereunder shall be
payable, in arrears, on the first Business Day of each month at any
time that Obligations or Commitments are outstanding, PROVIDED that
such interest and fees shall not be due and payable until three (3)
Business Days after written notice of such interest and fees is
delivered by facsimile, overnight courier, electronic mail or
personally to Borrower. All costs payable hereunder and all Lender
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Group Expenses (as and when incurred) shall be due and payable three
(3) Business Days after written notice of such costs and Lender
Group Expenses is delivered to Borrower as provided in the
immediately preceding sentence. Borrower hereby authorizes Agent,
from time to time without prior notice to Borrower, to, and Agent
may, charge such interest and fees, all Lender Group Expenses, the
fees and costs provided for in SECTION 2.11 (as and when accrued or
incurred), and all other payments, in each case, as and when due and
payable under any Loan Document to Borrower's Loan Account, which
amounts thereafter constitute Advances hereunder and shall accrue
interest at the rate then applicable to Advances hereunder, PROVIDED
that, for the avoidance of doubt (i) Advances may be charged to the
Borrower's Loan Account without the necessity of any notice to
Borrower and (ii) interest, fees, Lender Group Expenses and costs
shall not be charged to the Borrower's Loan Account or accrue
interest until the three (3) Business Day's notice described above
is delivered to Borrower and such three (3) Business Day period has
expired. Any interest not paid when due and payable shall be
compounded by being charged to Borrower's Loan Account and shall
thereafter constitute Advances hereunder and shall accrue interest
at the rate then applicable to Advances hereunder.
(e) COMPUTATION. All interest and fees chargeable under the
Loan Documents shall be computed on the basis of a 360 day year for
the actual number of days elapsed. In the event the Base Rate is
changed from time to time hereafter, the rates of interest hereunder
based upon the Base Rate automatically and immediately shall be
increased or decreased by an amount equal to such change in the Base
Rate.
(f) INTENT TO LIMIT CHARGES TO MAXIMUM LAWFUL RATE. In no event
shall the interest rate or rates payable under this Agreement, plus
any other amounts paid in connection herewith, exceed the highest
rate permissible under any law that a court of competent
jurisdiction shall, in a final determination, deem applicable.
Borrower and the Lender Group, in executing and delivering this
Agreement, intend legally to agree upon the rate or rates of
interest and manner of payment stated within it; PROVIDED, HOWEVER,
that, anything contained herein to the contrary notwithstanding, if
said rate or rates of interest or manner of payment exceeds the
maximum allowable under applicable law, then, IPSO FACTO, as of the
date of this Agreement, Borrower is and shall be liable only for the
payment of such maximum as allowed by law, and payment received from
Borrower in excess of such legal maximum, whenever received, shall
be applied to reduce the principal balance of the Obligations to the
extent of such excess.
2.7 CASH MANAGEMENT.
(a) Borrower and Servicer shall (i) establish and maintain cash
management services of a type and on terms satisfactory to Agent at
one or more of the banks set forth on Schedule 2.7(a) (each, a "Cash
Management Bank"), and shall request in writing and otherwise take
such reasonable steps to ensure that all of its Account Debtors
forward payment of the amounts owed by them directly to such Cash
Management Bank, and (ii) deposit or cause to be deposited promptly,
and in any event no later than the first Business Day after the date
of receipt thereof, all Collections (including those sent directly
by Account Debtors to a Cash Management Bank) into a bank account in
Agent's name (a "Cash Management Account") at one of the Cash
Management Banks.
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(b) Each Cash Management Bank shall establish and maintain Cash
Management Agreements with Agent, Borrower and Servicer, in form and
substance acceptable to Agent. Each such Cash Management Agreement
shall provide, among other things, that (i) all items of payment
deposited in such Cash Management Account and proceeds thereof are
held by such Cash Management Bank as agent or bailee-in-possession
for Agent, (ii) the Cash Management Bank has no rights of setoff or
recoupment or any other claim against the applicable Cash Management
Account other than for payment of its service fees and other charges
directly related to the administration of such Cash Management
Account and for returned checks or other items of payment, and (iii)
on and after the date on which it receives a Notice of Sole Control
from Agent, it immediately will forward by daily sweep all amounts
in the applicable Cash Management Account to the Agent's Account.
Agent agrees that it shall not deliver a Notice of Sole Control
unless an Event of Default has occurred and is continuing. So long
as no Event of Default has occurred and is continuing, Borrower may
withdraw amounts on deposit in the Cash Management Accounts (i) to
purchase Eligible Subject Accounts pursuant to the Purchase
Agreement, subject to the proviso to SECTION 6.14, (ii) to pay or
prepay Obligations, (iii) to pay obligations permitted by the
proviso to SECTION 7.7, (iv) to make distributions or pay dividends
to the extent permitted under SECTION 7.11, or (v) to make loans or
advances to the extent permitted under SECTION 7.13, and for no
other purpose. Upon the occurrence and during the continuance of an
Event of Default, Borrower shall not withdraw any amount from the
Cash Management Accounts and, following delivery by Agent of a
Notice of Sole Control, all such amounts shall be forwarded to the
Agent's Account in accordance with clause (iii) above.
(c) So long as no Default or Event of Default has occurred and
is continuing, Borrower and Servicer may amend Schedule 2.7(a) to
add or replace a Cash Management Bank or Cash Management Account;
PROVIDED, HOWEVER, that (i) such prospective Cash Management Bank
shall be satisfactory to Agent and Agent shall have consented (which
consent shall not be unreasonably withheld or delayed) in writing in
advance to the opening of such Cash Management Account with the
prospective Cash Management Bank, and (ii) prior to the time of the
opening of such Cash Management Account, Borrower and such
prospective Cash Management Bank shall have executed and delivered
to Agent a Cash Management Agreement. Borrower shall close any of
its Cash Management Accounts (and establish replacement cash
management accounts in accordance with the foregoing sentence)
promptly and in any event within 30 days of notice from Agent that
the creditworthiness of any Cash Management Bank is no longer
acceptable in Agent's reasonable judgment, or as promptly as
practicable and in any event within 60 days of notice from Agent
that the operating performance, funds transfer, or availability
procedures or performance of the Cash Management Bank with respect
to Cash Management Accounts or Agent's liability under any Cash
Management Agreement with such Cash Management Bank is no longer
acceptable in Agent's reasonable judgment.
(d) The Cash Management Accounts shall be cash collateral
accounts, with all cash, checks and similar items of payment in such
accounts securing payment of the Obligations, and in which Borrower
is hereby deemed to have granted a Lien to Agent.
2.8 CREDITING PAYMENTS. The receipt of any payment item by
Agent (whether from transfers to Agent by the Cash Management Banks
pursuant to the Cash Management Agreements or otherwise) shall not
be considered a payment on account unless such payment item is a
wire transfer of immediately available federal funds made to the
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Agent's Account or unless and until such payment item is honored
when presented for payment. Should any payment item not be honored
when presented for payment, then Borrower shall be deemed not to
have made such payment and interest shall be calculated accordingly.
Anything to the contrary contained herein notwithstanding, any
payment item shall be deemed received by Agent only if it is
received into the Agent's Account on a Business Day on or before
11:00 a.m. (California time). If any payment item is received into
the Agent's Account on a non-Business Day or after 11:00 a.m.
(California time) on a Business Day, it shall be deemed to have been
received by Agent as of the opening of business on the immediately
following Business Day.
2.9 DESIGNATED ACCOUNT. Agent is authorized to make the
Advances under this Agreement based upon telephonic or other
instructions received from anyone purporting to be an Authorized
Person, or without instructions if pursuant to SECTION 2.6(D).
Borrower agrees to establish and maintain the Designated Account
with the Designated Account Bank for the purpose of receiving the
proceeds of the Advances requested by Borrower and made by Agent or
the Lenders hereunder. Unless otherwise agreed by Agent and
Borrower, any Advance, Agent Advance, or Swing Loan requested by
Borrower and made by Agent or the Lenders hereunder shall be made to
the Designated Account.
2.10 MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF OBLIGATIONS.
(a) Agent shall maintain an account on its books in the name of
Borrower (the "Loan Account") on which Borrower will be charged with
all Advances (including Agent Advances and Swing Loans) made by
Agent, Swing Lender, or the Lenders to Borrower or for Borrower's
account, and, subject to Section 2.6(d), with all other payment
Obligations hereunder or under the other Loan Documents that are due
and payable, including, accrued interest, fees and expenses, and
Lender Group Expenses, in each case that are due and payable. In
accordance with SECTION 2.8, the Loan Account will be credited with
all payments received by Agent from Borrower or for Borrower's
account, including all amounts received in the Agent's Account from
any Cash Management Bank. Agent shall render statements regarding
the Loan Account to Borrower, including principal, interest, fees,
and including an itemization of all charges and expenses
constituting Lender Group Expenses owing, and such statements shall
be conclusively presumed to be correct and accurate and constitute
an account stated between Borrower and the Lender Group unless,
within 30 days after receipt thereof by Borrower, Borrower shall
deliver to Agent written objection thereto describing the error or
errors contained in any such statements.
(b) Any Lender may request that any Advance made by it be
evidenced by a promissory note. In such event, Borrower shall
execute and deliver to such Lender a promissory note payable to the
order of such Lender (or, if requested by such Lender, to such
Lender and its registered assigns) in a form furnished by Agent and
reasonably acceptable to Borrower. Thereafter, any Advance evidenced
by such promissory note and interest thereon shall at all times
(including after assignment pursuant to SECTION 14.1) be represented
by one or more promissory notes in such form payable to the order of
the payee named therein (or, if such promissory note is a registered
note, to such payee and its registered assigns).
2.11 FEES. Borrower shall pay to Agent the following fees and
charges, which fees and charges shall be non-refundable when paid
(irrespective of whether this Agreement is terminated thereafter)
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and shall be apportioned among the Lenders in accordance with the
terms of letter agreements between Agent and individual Lenders:
(a) UNUSED LINE FEE. On the first day of each month during the
term of this Agreement, an unused line fee in an amount equal to
.50% per annum TIMES the result of (a) the Maximum Revolver Amount,
LESS (b) the average Daily Balance of Advances that were outstanding
during the immediately preceding month,
(b) FEE LETTER FEES. As and when due and payable under the
terms of the Fee Letter, Borrower shall pay to Agent the fees set
forth in the Fee Letter, and
(c) AUDIT, APPRAISAL, AND VALUATION CHARGES. For the separate
account of Agent, audit, appraisal, and valuation fees and charges
as follows (i) a fee of $850 per day, per auditor, plus
out-of-pocket expenses for each financial audit of Borrower
performed by personnel employed by Agent, (ii) if implemented, a one
time charge of $25,000 plus out-of-pocket expenses for expenses for
the establishment of electronic collateral reporting systems, and
(iii) the actual charges paid or incurred by Agent if it elects to
employ the services of one or more third Persons to perform
financial audits of Borrower or to appraise the Collateral, or any
portion thereof, PROVIDED that, so long as no Default or Event of
Default shall have occurred and be continuing, Borrower shall not be
responsible for the fees, charges and other costs of more than four
(4) such audits, appraisals or valuations in any calendar year.
2.12 CAPITAL REQUIREMENTS. If, after the date hereof, any
Lender, in its Permitted Discretion, determines that (i) the
adoption of or change in any law, rule, regulation or guideline
regarding capital requirements for banks or bank holding companies,
or any change in the interpretation or application thereof by any
Governmental Authority charged with the administration thereof, or
(ii) compliance by such Lender or its parent bank holding company
with any guideline, request, or directive of any such entity
regarding capital adequacy (whether or not having the force of law),
the effect of reducing the return on such Lender's or such holding
company's capital as a consequence of such Lender's Commitments
hereunder to a level below that which such Lender or such holding
company could have achieved but for such adoption, change, or
compliance (taking into consideration such Lender's or such holding
company's then existing policies with respect to capital adequacy
and assuming the full utilization of such entity's capital) by any
amount deemed by such Lender to be material, then such Lender may
notify Borrower and Agent thereof. Following receipt of such notice,
Borrower agrees to pay such Lender on demand the amount of such
reduction of return of capital as and when such reduction is
determined, payable within 90 days after presentation by such Lender
of a statement in the amount and setting forth in reasonable detail
such Lender's calculation thereof and the assumptions upon which
such calculation was based (which statement shall be deemed true and
correct absent manifest error), PROVIDED that, except to the extent
such law, rule, regulation, guideline, request, or directive shall
have retroactive effect, if a Lender shall fail to give notice of
such law, rule, regulation, guideline, request, or directive within
180 days after such Lender obtains actual knowledge thereof, then
Borrower shall not be liable for any such reduction suffered more
than 180 days prior to the date such notice is provided. In
determining such amount, such Lender may use any reasonable
averaging and attribution methods.
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3. CONDITIONS; TERM OF AGREEMENT.
3.1 CONDITIONS PRECEDENT TO THE INITIAL EXTENSION OF CREDIT.
The obligation of the Lender Group (or any member thereof) to make
the initial Advance (or otherwise to extend any credit provided for
hereunder), is subject to the fulfillment, to the satisfaction of
Agent, of each of the conditions precedent set forth below:
(a) the Closing Date shall occur on or before August 19, 2002;
(b) Agent shall have received (i) a letter authorizing Agent to
pre-file the financing statements required hereunder and under the
Purchase Agreement, duly executed by Borrower, Servicer and each
Originator, (ii) all financing statements required by Agent, naming
Borrower as debtor and Agent as secured party, (iii) all financing
statements required by Agent, naming each Originator as debtor,
Borrower as secured party and Agent as assignee, and (iii) evidence
satisfactory to Agent of the filing of all such financing
statements;
(c) Agent shall have received each of the following documents,
in form and substance satisfactory to Agent, duly executed, and each
such document shall be in full force and effect:
(i) the Control Agreements,
(ii) the Disbursement Letter,
(iii) the Fee Letter,
(iv) the Guaranty,
(v) the Cash Management Agreements,
(vi) the Officers' Certificate,
(vii) the Purchase Agreement, and
(viii) the Servicing Agreement;
(d) Agent shall have received a certificate from the Secretary
of Borrower, Servicer and each Originator (i) attesting to the
resolutions of such Person's Board of Directors authorizing its
execution, delivery, and performance of the Transaction Documents to
which such Person is a party and authorizing specific officers of
such Person to execute the same, and (ii) certifying the names and
true signatures of the officers of such Person authorized to sign
each Transaction Document to which such Person is a party;
(e) Agent shall have received copies of Borrower's, Servicer's
and each Originator's Governing Documents, as amended, modified, or
supplemented to the Closing Date, certified by the Secretary of such
Person;
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(f) Agent shall have received a certificate of status with
respect to Borrower, Servicer and each Originator, dated within 10
days of the Closing Date, such certificate to be issued by the
appropriate officer of the jurisdiction of organization of such
Person, which certificate shall indicate that such Person is in good
standing in such jurisdiction;
(g) Agent shall have received certificates of status with
respect to Borrower, Servicer and each Originator, each dated within
30 days of the Closing Date, such certificates to be issued by the
appropriate officer of the jurisdiction in which each such Person
maintains its chief executive office (but only to the extent that
such Person's failure to be duly qualified or licensed in such
jurisdiction would constitute a Material Adverse Change), which
certificates shall indicate that such Person is in good standing in
such jurisdictions;
(h) Agent shall have received a certificate from the Secretary
of Guarantor (i) attesting to the resolutions of Guarantor's Board
of Directors authorizing its execution, delivery, and performance of
the Loan Documents to which Guarantor is a party and authorizing
specific officers of Guarantor to execute the same, and (ii)
certifying the names and true signatures of the officers of
Guarantor authorized to sign each Loan Document to which Guarantor
is a party;
(i) Agent shall have received copies of Guarantor's Governing
Documents, as amended, modified, or supplemented to the Closing
Date, certified by the Secretary of Guarantor;
(j) Agent shall have received a certificate of status with
respect to Guarantor, dated within 10 days of the Closing Date, such
certificate to be issued by the appropriate officer of the
jurisdiction of organization of Guarantor, which certificate shall
indicate that Guarantor is in good standing in such jurisdiction;
(k) Agent shall have received certificates of status with
respect to Guarantor, each dated within 30 days of the Closing Date,
such certificates to be issued by the appropriate officer of the
jurisdiction in which each Guarantor maintains its chief executive
office (but only to the extent that Guarantor's failure to be duly
qualified or licensed in such jurisdiction would constitute a
Material Adverse Change), which certificates shall indicate that
Guarantor is in good standing in such jurisdictions;
(l) [INTENTIONALLY OMITTED]
(m) [INTENTIONALLY OMITTED]
(n) Agent shall have received an opinion of Borrower's counsel in form and
substance satisfactory to the Lenders, such opinion to include, without
limitation, an opinion that the Transactions will be deemed a "true sale" under
the Bankruptcy Code and other applicable law;
(o) Agent shall be satisfied with the Companies' cash
management systems, including as to the absence of commingling of
funds among Borrower and the other Companies;
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(p) the Lenders shall have completed their business, legal, and
collateral due diligence, including a takeover audit, a roll-forward
of accounts receivable, the senior-sponsor visit and review of
Borrower's, Servicer's and each Originator's books and records and
verification of Borrower's, Servicer's and each Originator's
representations and warranties to the Lender Group, the results of
which shall in each case be satisfactory to the Lenders;
(q) Agent shall have received completed reference checks with
respect to Borrower's senior management, the results of which are
satisfactory to Agent in its sole discretion;
(r) the Lenders shall have received the Closing Date Business
Plan;
(s) Borrower shall pay all Lender Group Expenses incurred in
connection with the transactions evidenced by the Transaction
Documents, PROVIDED that Borrower has received invoices, each in
reasonable detail, with respect thereto;
(t) Agent shall have received copies of each Material Contract,
together with a certificate of the Secretary of Borrower certifying
each such document as being a true, correct, and complete copy
thereof;
(u) Borrower shall have received all licenses, approvals or
evidence of other actions required by any Governmental Authority in
connection with the execution and delivery by Borrower of this
Agreement or any other Transaction Document or with the consummation
of the transactions contemplated hereby and thereby;
(v) any consent, waiver or other approval required to be
obtained from any Person under any of the Debt Documents in order to
permit the execution, delivery and performance of the Transaction
Documents and the consummation of the Transactions shall have been
duly executed and delivered by such Person, shall be in form and
substance satisfactory to Agent, and a copy of the same shall have
been delivered to Agent, together with a certificate of the
Secretary of Borrower certifying each such consent, waiver or other
approval as being a true, correct and complete copy thereof;
(w) the parties to the Existing Credit Agreement shall have
entered into the Existing Credit Agreement, the terms of which shall
be satisfactory to Agent, and a copy of the same shall have been
delivered to Agent, together with a certificate of the Secretary of
Borrower certifying such agreement as being a true, correct and
complete copy thereof;
(x) Agent and its counsel shall be satisfied that upon the
execution and delivery of the documents referred to in clauses (v)
and (w) above, no other waivers, consents or other approvals shall
be required under any Material Contract in order to permit the
execution, delivery and performance of the Transaction Documents and
the consummation of the Transactions;
(y) Borrower, Servicer and the Originators shall have duly
executed and delivered the Purchase Agreement and the following
transactions shall have been consummated pursuant to the terms of
the Purchase Agreement (the "Initial Transactions"): (i) the
Originators shall have contributed to Borrower Subject Accounts in
an aggregate amount of not less than $190,094,197.30; (ii) Borrower
shall have issued to the Originators shares of its capital Stock in
exchange therefore; (iii) concurrently with the making of the
initial Advance hereunder, Borrower shall have purchased additional
Subject Accounts from the Originators in an aggregate principal
amount of not less than $25,880,874.61, shall have paid to the
Originators cash consideration of at least $21,998,743.42 and shall
have delivered to the Originators the Subordinated Note; and (iv)
after giving effect to the preceding clauses (i) and (iii), Borrower
shall have acquired good and marketable title to all Subject
Accounts then in existence, free and clear of any Lien other than
Permitted Liens;
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(z) Borrower shall have Availability in an amount of not less
than $5,000,000 after giving effect to the initial Advances
hereunder and the payment of all fees and expenses required to be
paid by Borrower on the Closing Date under this Agreement and the
other Loan Documents;
(aa) Borrower shall have implemented a system of electronic
collateral reporting, satisfactory to Agent in all respects, in
order to provide electronic reporting of the Borrowing Base in
accordance with SECTION 6.2(F);
(bb) the Lenders shall have received and be satisfied with the
preliminary financial statements of Parent and its Subsidiaries for
the fiscal quarter ending June 30, 2002; and
(cc) all other documents and legal matters in connection with
the transactions contemplated by this Agreement shall have been
delivered, executed, or recorded and shall be in form and substance
satisfactory to Agent.
3.2 CONDITIONS SUBSEQUENT TO THE INITIAL EXTENSION OF CREDIT.
The obligation of the Lender Group (or any member thereof) to
continue to make Advances (or otherwise extend credit hereunder) is
subject to the fulfillment, on or before the date applicable
thereto, of each of the conditions subsequent set forth below (the
failure by Borrower to so perform or cause to be performed
constituting an Event of Default):
(a) Within 30 days of the Closing Date, the Agent shall have
received Collateral Access Agreements with respect to the corporate
headquarters (or other location where the books and records with
respect to the Subject Accounts or the Collateral are maintained)
of Borrower, Servicer and each Originator.
3.3 CONDITIONS PRECEDENT TO ALL EXTENSIONS OF CREDIT. The
obligation of the Lender Group (or any member thereof) to make all
Advances (or to extend any other credit hereunder) shall be subject
to the following conditions precedent:
(a) the representations and warranties contained in this
Agreement and the other Transaction Documents shall be true and
correct in all material respects on and as of the date of such
extension of credit, as though made on and as of such date (except
to the extent that such representations and warranties relate solely
to an earlier date),
(b) no Default or Event of Default shall have occurred and be
continuing on the date of such extension of credit, nor shall either
result from the making thereof,
-44-
(c) no injunction, writ, restraining order, or other order of
any nature prohibiting, directly or indirectly, the extending of
such credit or the consummation of any of the Transactions shall
have been issued and remain in force by any Governmental Authority
against Borrower, Servicer, any Originator, Agent, any Lender, or
any of their Affiliates;
(d) the amount of the Revolver Usage, after giving effect to
the requested Advance, shall not exceed Availability; and
(e) no Material Adverse Change shall have occurred.
3.4 TERM. This Agreement shall become effective upon the
execution and delivery hereof by Borrower, Agent, and the Lenders
and shall continue in full force and effect for a term ending on
August 15, 2005 (the "Maturity Date"). The foregoing
notwithstanding, the Lender Group, upon the election of the Required
Lenders, shall have the right to terminate its obligations under
this Agreement immediately and without notice upon the occurrence
and during the continuation of an Event of Default.
3.5 EFFECT OF TERMINATION. On the date of termination of this
Agreement, all Obligations immediately shall become due and payable
without notice or demand. No termination of this Agreement, however,
shall relieve or discharge Borrower of its duties, Obligations, or
covenants hereunder and the Agent's Liens in the Collateral shall
remain in effect until all Obligations have been fully and finally
discharged and the Lender Group's obligations to provide additional
credit hereunder have been terminated. When this Agreement has been
terminated and all of the Obligations have been fully and finally
discharged and the Lender Group's obligations to provide additional
credit under the Loan Documents have been terminated irrevocably,
Agent will, at Borrower's sole expense, execute and deliver any UCC
termination statements, lien releases, mortgage releases,
re-assignments of trademarks, discharges of security interests, and
other similar discharge or release documents (and, if applicable, in
recordable form) as are reasonably necessary to release, as of
record, the Agent's Liens and all notices of security interests and
liens previously filed by Agent with respect to the Obligations.
3.6 EARLY TERMINATION BY BORROWER. Borrower has the option, at
any time upon 30 days prior written notice to Agent, to terminate
this Agreement by paying to Agent, for the benefit of the Lender
Group, in cash, the Obligations. If Borrower has sent a notice of
termination pursuant to the provisions of this Section, then the
Commitments shall terminate and Borrower shall be obligated to repay
the Obligations in full, together with the Applicable Prepayment
Premium, on the date set forth as the date of termination of this
Agreement in such notice. In the event of the termination of this
Agreement and repayment of the Obligations at any time prior to the
Maturity Date, for any other reason, including (a) termination upon
the election of the Required Lenders to terminate after the
occurrence of an Event of Default, (b) foreclosure and sale of
Collateral, (c) sale of the Collateral in any Insolvency Proceeding,
or (iv) restructure, reorganization, or compromise of the
Obligations by the confirmation of a plan of reorganization or any
other plan of compromise, restructure, or arrangement in any
Insolvency Proceeding, then, in view of the impracticability and
extreme difficulty of ascertaining the actual amount of damages to
the Lender Group or profits lost by the Lender Group as a result of
such early termination, and by mutual agreement of the parties as to
a reasonable estimation and calculation of the lost profits or
damages of the Lender Group, Borrower shall pay the Applicable
Prepayment Premium to Agent (to be allocated based upon letter
agreements between Agent and individual Lenders), measured as of the
date of such termination.
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4. CREATION OF SECURITY INTEREST.
4.1 GRANT OF SECURITY INTEREST. Borrower hereby grants to
Agent, for the benefit of the Lender Group, a continuing security
interest in all of its right, title, and interest in all currently
existing and hereafter acquired or arising Collateral in order to
secure prompt repayment of any and all of the Obligations in
accordance with the terms and conditions of the Loan Documents and
in order to secure prompt performance by Borrower of each of its
covenants and duties under the Loan Documents. The Agent's Liens in
and to the Collateral shall attach to all Collateral without further
act on the part of Agent or Borrower. Anything contained in this
Agreement or any other Loan Document to the contrary
notwithstanding, except for Permitted Dispositions, Borrower has no
authority, express or implied, to dispose of any item or portion of
the Collateral.
4.2 NEGOTIABLE COLLATERAL. In the event that any Collateral,
including proceeds, is evidenced by or consists of Negotiable
Collateral, and if and to the extent that perfection or priority of
Agent's security interest is dependent on or enhanced by possession,
Borrower, immediately upon the request of Agent, shall endorse and
deliver physical possession of such Negotiable Collateral to Agent.
4.3 COLLECTION OF ACCOUNTS, GENERAL INTANGIBLES, AND NEGOTIABLE
COLLATERAL. At any time after the occurrence and during the
continuation of an Event of Default, Agent or Agent's designee may
(a) notify Account Debtors of Borrower that the Accounts, chattel
paper, or General Intangibles have been assigned to Agent or that
Agent has a security interest therein, or (b) collect the Accounts,
chattel paper, or General Intangibles directly and charge the
collection costs and expenses to the Loan Account. Borrower agrees
that it will hold in trust for the Lender Group, as the Lender
Group's trustee, any Collections that it receives and immediately
will deliver said Collections to Agent or a Cash Management Bank in
their original form as received by Borrower.
4.4 DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED. At any time
upon the request of Agent, Borrower shall execute and deliver to
Agent, any and all financing statements, original financing
statements in lieu of continuation statements, security agreements,
pledges, assignments, endorsements of certificates of title, and all
other documents (the "Additional Documents") that Agent may request
in its Permitted Discretion, in form and substance satisfactory to
Agent, to perfect and continue perfected or better perfect the
Agent's Liens in the Collateral (whether now owned or hereafter
arising or acquired), and in order to fully consummate all of the
transactions contemplated hereby and under the other Transaction
Documents. To the maximum extent permitted by applicable law,
Borrower authorizes Agent to execute any such Additional Documents
in Borrower's name and authorizes Agent to file such executed
Additional Documents in any appropriate filing office.
4.5 POWER OF ATTORNEY. Borrower hereby irrevocably makes,
constitutes, and appoints Agent (and any of Agent's officers,
employees, or agents designated by Agent), to the extent permitted
by applicable law, as Borrower's true and lawful attorney, with
power to (a) if Borrower refuses to, or fails timely to execute and
deliver any of the documents described in SECTION 4.4, sign the name
of Borrower on any of the documents described in SECTION 4.4, (B) at
any time that an Event of Default has occurred and is continuing,
-46-
sign Borrower's name on any invoice or xxxx of lading relating to
the Collateral, drafts against Account Debtors, or notices to
Account Debtors, (c) send requests for verification of Accounts, (d)
endorse Borrower's name on any Collection item that may come into
the Lender Group's possession, (e) at any time that an Event of
Default has occurred and is continuing, make, settle, and adjust all
claims under Borrower's policies of insurance and make all
determinations and decisions with respect to such policies of
insurance, and (f) at any time that an Event of Default has occurred
and is continuing, settle and adjust disputes and claims respecting
the Accounts, chattel paper, or General Intangibles directly with
Account Debtors, for amounts and upon terms that Agent determines to
be reasonable, and Agent may cause to be executed and delivered any
documents and releases that Agent determines to be necessary. The
appointment of Agent as Borrower's attorney, and each and every one
of its rights and powers, being coupled with an interest, is
irrevocable until all of the Obligations have been fully and finally
repaid and performed and the Lender Group's obligations to extend
credit hereunder are terminated.
4.6 RIGHT TO INSPECT. Agent and each Lender (through any of
their respective officers, employees, or agents) shall have the
right, from time to time hereafter to inspect the Books and to
check, test, and appraise the Collateral in order to verify
Borrower's financial condition or the amount, quality, value,
condition of, or any other matter relating to, the Collateral,
PROVIDED that, so long as no Default or Event of Default shall have
occurred and be continuing, (i) such inspections shall only be
conducted during normal business hours and (ii) Borrower shall not
be responsible for the fees, charges and other costs of more than
four (4) such audits, appraisals or valuations during any calendar
year. Without limiting the foregoing, Agent shall have the right to
review the Material Contracts (other than the Debt Documents) on a
quarterly basis, or at such intervals as Agent shall determine.
Agent may retain advisors to assist in such review and the
out-of-pocket expenses incurred by Agent in connection therewith
shall constitute Lender Group Expenses and Obligations hereunder.
4.7 CONTROL AGREEMENTS. Borrower agrees that it will not
transfer assets out of any Securities Accounts other than as
permitted under SECTION 7.19 and, if to another securities
intermediary, unless each of Borrower, Agent, and the substitute
securities intermediary have entered into a Control Agreement. No
arrangement contemplated hereby or by any Control Agreement in
respect of any Securities Accounts or other Investment Property
shall be modified by Borrower without the prior written consent of
Agent. Upon the occurrence and during the continuance of a Default
or Event of Default, Agent may notify any securities intermediary to
liquidate the applicable Securities Account or any related
Investment Property maintained or held thereby and remit the
proceeds thereof to the Agent's Account.
5. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lender Group to enter into this
Agreement, Borrower makes the following representations and
warranties to the Lender Group which shall be true, correct, and
complete, in all material respects, as of the date hereof, and shall
be true, correct, and complete, in all material respects, as of the
Closing Date, and at and as of the date of the making of each
Advance (or other extension of credit) made thereafter, as though
made on and as of the date of such Advance (or other extension of
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credit) (except to the extent that such representations and
warranties relate solely to an earlier date) and such
representations and warranties shall survive the execution and
delivery of this Agreement:
5.1 NO ENCUMBRANCES. Borrower has good and indefeasible title
to the Collateral, free and clear of Liens except for Permitted
Liens.
5.2 ELIGIBLE ACCOUNTS. The Eligible Accounts are Purchased
Accounts which are bona fide existing payment obligations of Account
Debtors created by the sale and delivery of Inventory or the
rendition of services to such Account Debtors in the ordinary course
of the Originators' business, owed to Borrower without defenses,
disputes, offsets, counterclaims, or rights of return or
cancellation. Each such Eligible Account complies with each clause
of the definition thereof set forth in SECTION 1.1.
5.3 LOCATION OF CHIEF EXECUTIVE OFFICE; FEIN. The chief
executive office of Borrower, Servicer and each Originator is
located at the address indicated in Schedule 5.3 and Borrower's,
Servicer's and each Originator's FEIN is identified in Schedule 5.3.
5.4 DUE ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.
(a) Each of Borrower, Servicer and each Originator is duly
organized and existing and in good standing under the laws of the
jurisdiction of its organization and qualified to do business in any
state where the failure to be so qualified reasonably could
reasonably be expected to have a Material Adverse Change.
(b) Set forth on Schedule 5.4(b), is a complete and accurate
description of the authorized capital Stock of Borrower, by class,
and, as of the Closing Date, a description of the membership
interests that are outstanding, all of which outstanding membership
interests are owned by the Originators. There are no subscriptions,
options, warrants, or calls relating to any shares of Borrower's
capital Stock, including any right of conversion or exchange under
any outstanding security or other instrument. Borrower is not
subject to any obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire any shares of its capital Stock or any
security convertible into or exchangeable for any of its capital
Stock.
(c) Borrower has no direct or indirect Subsidiaries.
5.5 DUE AUTHORIZATION; NO CONFLICT.
(a) The execution, delivery, and performance by Borrower,
Servicer and each Originator of each Transaction Document to which
it is a party have been duly authorized by all necessary action on
the part of such Person.
(b) The execution, delivery, and performance by Borrower,
Servicer and each Originator of each Transaction Document to which
it is a party do not and will not (i) violate any provision of
federal, state, or local law or regulation applicable to such
Person, the Governing Documents of such Person, or any order,
judgment, or decree of any court or other Governmental Authority
binding on such Person, (ii) conflict with, result in a breach of,
or constitute (with due notice or lapse of time or both) a default
under any Material Contract or any other material contractual
obligation of such Person, (iii) result in or require the creation
-48-
or imposition of any Lien of any nature whatsoever upon any
properties or assets of Borrower or any Purchased Accounts, other
than Permitted Liens, or (iv) require any approval of such Person's
interestholders or any approval or consent of any other Person under
any Material Contract or under any other material contractual
obligation of such Person, except to the extent the same has been
granted in accordance with SECTION 3.1(R).
(c) Other than the filing of financing statements, the
execution, delivery, and performance by Borrower, Servicer and each
Originator of each Transaction Document to which it is a party do
not and will not require any registration with, consent, or approval
of, or notice to, or other action with or by, any Governmental
Authority.
(d) Each Transaction Document to which Borrower, Servicer or
any Originator is a party, and all other documents contemplated
hereby and thereby, when executed and delivered by such Person, will
be the legally valid and binding obligations of such Person,
enforceable against such Person in accordance with their respective
terms, except as enforcement may be limited by equitable principles
or by bankruptcy, insolvency, reorganization, moratorium, or similar
laws relating to or limiting creditors' rights generally.
(e) The Agent's Liens are validly created, perfected, and first
priority Liens, subject only to Permitted Liens.
5.6 LITIGATION. There are no actions, suits, or proceedings
pending or, to the best knowledge of Borrower, threatened against
Borrower or Servicer. There is no action, suit, proceeding or
investigation pending before any court, regulatory body, arbitrator,
administrative agency, or other tribunal or governmental
instrumentality (a) asserting the invalidity of any Transaction
Document, (b) seeking to prevent the issuance of any Originator's
Originator Assignment Certificate (as defined in the Purchase
Agreement) or the consummation of any of the transactions
contemplated by any Transaction Document, or (c) except as set forth
in the most recent Form 10-Q quarterly reports and Form 10-K annual
report of the Parent or FW LLC and in SCHEDULE 5.6, seeking any
determination or ruling that is reasonably likely to result in a
Material Adverse Change.
5.7 NO MATERIAL ADVERSE CHANGE. All financial statements
relating to the Companies that have been delivered by any Company to
the Lender Group have been prepared in accordance with GAAP (except,
in the case of unaudited financial statements, for the lack of
footnotes and being subject to year-end audit adjustments) and
present fairly in all material respects, such Company's financial
condition as of the date thereof and results of operations for the
period then ended. There has not been a Material Adverse Change with
respect to Borrower, Servicer or, except as set forth in SCHEDULE
5.7, any Originator since the date of the latest financial
statements submitted to the Lender Group on or before the Closing
Date.
5.8 FRAUDULENT TRANSFER.
(a) Assuming the consummation of the Existing Credit Agreement,
each of Borrower, Servicer and each Originator is Solvent.
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(b) No transfer of property is being made by Borrower, Servicer
or any Originator and no obligation is being incurred by Borrower,
Servicer or any Originator in connection with the transactions
contemplated by this Agreement or the other Transaction Documents
with the intent to hinder, delay, or defraud either present or
future creditors of any such Person.
5.9 EMPLOYEE BENEFITS. None of Borrower or any of its ERISA
Affiliates maintains or contributes to any Benefit Plan.
5.10 BROKERAGE FEES. Borrower has not utilized the services of
any broker or finder in connection with Borrower's obtaining
financing from the Lender Group under this Agreement and no
brokerage commission or finders fee is payable by Borrower in
connection herewith.
5.11 PROPERTY. Borrower does not own or lease any assets or
property other than (i) Purchased Accounts, (ii) Permitted
Investments, (iii) General Intangibles arising under the Transaction
Documents, (iv) Cash and Cash Equivalents constituting proceeds of
Purchased Accounts, and (v) the Cash Management Accounts, Securities
Accounts and deposit accounts permitted hereunder (collectively, the
"Permitted Assets").
5.12 OBLIGATIONS. Borrower is not a party to any agreement or
contract other than the Transaction Documents, its Governing
Documents, agreements with banks or Securities Intermediaries with
respect to the deposit accounts and Securities Accounts permitted
hereunder and as otherwise permitted under SECTION 7.7.
5.13 BUSINESS. The Borrower conducts no business other than the
acquisition of Subject Accounts pursuant to the Purchase Agreement,
the collection of payment on such Purchased Accounts and as
otherwise permitted under SECTION 7.7.
5.14 DDAS. Set forth on Schedule 5.14 are all of Borrower's
DDAs, including, with respect to each depository (i) the name and
address of such depository, and (ii) the account numbers of the
accounts maintained with such depository.
5.15 CREDIT AND COLLECTION POLICIES. Borrower has complied in
all material respects with the Credit and Collection Policy of each
Originator with regard to each Purchased Account.
5.16 COMPLETE DISCLOSURE. Each schedule, exhibit, financial
statement, document, book, record or report, and all factual
information (taken as a whole) contained therein or otherwise
furnished by or on behalf of Parent, Borrower, Servicer or any
Originator in writing to Agent or any Lender for purposes of or in
connection with this Agreement, the other Transaction Documents, or
any transaction contemplated herein or therein is, and all other
such factual information (taken as a whole) hereafter furnished by
or on behalf of any Company in writing to Agent or any Lender will
be, true and accurate, in all material respects, on the date as of
which such information is dated or certified and not incomplete by
omitting to state any fact necessary to make such information (taken
as a whole) not misleading in any material respect at such time in
light of the circumstances under which such information was
provided; PROVIDED, HOWEVER, that with respect to projections and
similar forward-looking financial information, no
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representation or warranty is made pursuant to this Section 5.16
except that such projections and similar forward-looking financial
information were prepared in good faith based upon assumptions
believed by management of Parent, Borrower, Servicer or such
Originator, as the case may be, to be reasonable at the time of
such preparation and on the date delivered to Agent and Lenders.
6. AFFIRMATIVE COVENANTS.
Borrower covenants and agrees that, so long as any credit
hereunder shall be available and until full and final payment of the
Obligations and the termination of this Agreement, Borrower shall do
all of the following:
6.1 ACCOUNTING SYSTEM. Maintain a system of accounting that
enables Borrower to produce financial statements in accordance with
GAAP and maintain records pertaining to the Collateral that contain
information as from time to time reasonably may be requested by
Agent.
6.2 COLLATERAL REPORTING. Provide Agent (with copies for each
Lender) with the following documents at the following times in form
satisfactory to the Lenders:
=================================================================================================================
Daily (a) a statement of Accounts purchased pursuant to the Purchase Agreement, and
(b) a statement of Collections
-----------------------------------------------------------------------------------------------------------------
Weekly (by the end of the
business day each (c) a detailed calculation of Collections with respect to Accounts for the prior
Tuesday) week,
(d) notice of all returns, disputes, or claims, and
(e) the Purchase Report
required under Section
2.1 of the Purchase
Agreement with respect
to purchases and
contributions of
Accounts pursuant to
the Purchase Agreement
during the prior week,
and
(f) a detailed calculation of the Borrowing Base (including detail regarding those
Accounts that are not Eligible Accounts).
---------------------------------------------------------------------------------------------------------------------
Monthly (not later than the (g) a detailed aging, by total, of the
10th Business Day Accounts, together with a reconciliation to
of each month) the detailed calculation of the Borrowing
Base previously provided to Agent,
-51-
(h) a detailed aging of the accounts payable of
each Originator,
(i) a calculation of Dilution, A/R Turnover
Period and the Delinquency Ratio for the
prior month,
(j) a calculation of Tangible Net Worth as of
the end of the prior month, and
(k) an updated Contract Trial Balance.
-------------------------------------------------------------------------------------------------------------------
Quarterly (l) a calculation of Consolidated Adjusted EBITDA and the Senior Debt Ratio,
(m) a detailed list of Borrower's Account
Debtors, and
(n) a report regarding Borrower's accrued, but
unpaid, AD VALOREM taxes.
-------------------------------------------------------------------------------------------------------------------
Upon request by Agent (o) copies of invoices in connection with the Accounts, credit memos, remittance
advices, deposit slips, shipping and delivery documents in connection with the
Accounts, and
(p) such other reports as to the Collateral, or
the financial condition of Borrower, as
Agent may request.
=====================================================================================================================
In addition, Borrower agrees to cooperate fully with Agent
to facilitate and implement a system of electronic collateral reporting in order
to provide electronic reporting of each of the items set forth above.
6.3 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES. Deliver to Agent,
with copies to each Lender:
(a) as soon as available, but in any event within 30 days (45 days in the case
of a month that is the end of one of the first 3 fiscal quarters in a fiscal
year and 90 days in the case of a month that is the last month in a fiscal year)
after the end of each month during each of Borrower's fiscal years,
(i) a company prepared balance sheet, income statement, and
statement of cash flow covering each Originator's operations during such
period,
(ii) copies of each Originator's Projections, in form and substance
(including as to scope and underlying assumptions) satisfactory to Agent,
in its sole discretion, for the forthcoming three-month period, which
Projections shall indicate Borrower's compliance with the financial
covenants set forth in SECTION 7.20,
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(iii) a certificate signed by the chief financial officer of each
Originator to the effect that:
(A) the financial statements delivered under clause (i) above
have been prepared in accordance with GAAP (except for the lack of
footnotes and being subject to year-end audit adjustments) and
fairly present in all material respects the financial condition of
such Originator, and,
(B) the Projections delivered under clause (ii) above
constitute such officer's good faith best estimate of such
Originator's financial performance during the period covered
thereby;
(iv) a certificate signed by the chief financial officer of Borrower
to the effect that:
(A) the representations and warranties of Borrower contained in
this Agreement and the other Transaction Documents are true and
correct in all material respects on and as of the date of such
certificate, as though made on and as of such date (except to the
extent that such representations and warranties relate solely to an
earlier date), and
(B) there does not exist any condition or event that
constitutes a Default or Event of Default (or, to the extent of any
non-compliance, describing such non-compliance as to which he or she
may have knowledge and what action Borrower has taken, is taking, or
proposes to take with respect thereto), and
(v) for each month that is the date on which a financial covenant in
SECTION 7.20 is to be tested, a Compliance Certificate demonstrating, in
reasonable detail, compliance at the end of such period with the
applicable financial covenants contained in SECTION 7.20,
(b) as and when required under the Guaranty, the statements and
certificates required pursuant to Section 7(b) thereof,
(c) not later than [October 31] of each year, (i) copies of each
Originator's Projections, in form and substance (including as to scope
and underlying assumptions) satisfactory to Agent, in its sole
discretion, for the forthcoming fiscal year, which Projections shall
indicate Borrower's compliance with the financial covenants set forth in
SECTION 7.20, and (ii) a certificate signed by the chief financial
officer of each Originator to the effect that the Projections delivered
under clause (i) above constitute such officer's good faith best estimate
of such Originator's financial performance during the period covered
thereby,
(d) as soon as available, but in any event, not later then Thursday
of each week, a statement of cash flow (indicating (i) the projected and
actual receipts and disbursements and the unrestricted cash position for
the immediately preceding week and (ii) the projected receipts and
disbursements and unrestricted cash position for the following 10-14 week
period) for (A) the Originators and (B) all domestic Subsidiaries of
Parent, in each case using the Parent's standard "Domestic Liquidity
Forecast",
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(e) if and when filed by Parent or FW LLC,
(i) Form 10-Q quarterly reports, Form 10-K annual reports, and Form
8-K current reports,
(ii) any other filings made with the SEC,
(iii) copies of such Person's federal income tax returns, and any
amendments thereto, filed with the Internal Revenue Service, and
(iv) any other information that is provided by Parent or FW LLC to
its shareholders or to the holders of the public Indebtedness generally,
(f) if and when filed by each Originator and as requested by Agent,
satisfactory evidence of payment of applicable excise taxes in each
jurisdictions in which (i) such Originator conducts business or is
required to pay any such excise tax, (ii) where such Originator's failure
to pay any such applicable excise tax would result in a Lien on any
Purchased Accounts, or (iii) where such Originator's failure to pay any
such applicable excise tax reasonably could reasonably be expected to
result in a Material Adverse Change,
(g) promptly after the commencement thereof, but in any event within
five days after the service of process with respect thereto on Borrower,
Servicer or any Originator, notice of all actions, suits or proceedings
brought by or against any such Person before any Governmental Authority
which, if determined adversely to such Person, could reasonably be
expected to result in a Material Adverse Change,
(h) as soon as Borrower has knowledge of any event or condition that
constitutes a Default or an Event of Default, notice thereof and a
statement of the curative action that Borrower proposes to take with
respect thereto, and
(i) upon the request of Agent, any other report reasonably requested
relating to the financial condition of any Company.
Borrower agrees that its independent certified public accountants
are authorized to communicate with Agent and to release to Agent whatever
financial information concerning Borrower Agent reasonably may request.
Borrower waives the right to assert a confidential relationship, if any,
it may have with any accounting firm or service bureau in connection with
any information requested by Agent pursuant to or in accordance with this
Agreement, and agrees that Agent may contact directly any such accounting
firm or service bureau in order to obtain such information.
6.4 SERVICER REPORTS. Cause Servicer to deliver its annual financial
statements at the time when Borrower provides its audited financial
statements to Agent and copies of all federal income tax returns as soon
as the same are available and in any event no later than 30 days after
the same are required to be filed by law.
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6.5 RETURN. Cause returns and allowances, as between Borrower and
its Account Debtors, to be on the same basis and in accordance with the
usual customary practices of Borrower, as they exist at the time of the
execution and delivery of this Agreement.
6.6 SEPARATE EXISTENCE. Borrower hereby acknowledges that the Agent
and Lenders are entering into the transactions contemplated by this
Agreement and the other Transaction Documents in reliance upon Borrower's
identity as a legal entity separate from any other Company and its
Affiliates. Therefore, from and after the date hereof, Borrower shall
take all steps specifically required by this Agreement or reasonably
required by Agent to continue Borrower's identity as a separate legal
entity and to make it apparent to third Persons that Borrower is an
entity with assets and liabilities distinct from those of the other
Companies and any other Person, and is not a division of any other
Company, its Affiliates or any other Person. Without limiting the
generality of the foregoing and in addition to and consistent with the
other covenants set forth herein, Borrower shall take such actions as
shall be required in order that:
(a) Borrower will be a limited purpose corporation whose
primary activities are restricted in its certificate of
incorporation to: (i) purchasing or otherwise acquiring from the
Originators, owning, holding, and collecting Subject Accounts, (ii)
entering into agreements for the selling and servicing of the
Purchased Accounts, and (iii) conducting such other activities as it
deems necessary or appropriate to carry out its primary activities;
(b) Borrower shall not engage in any business or activity, or
incur any Indebtedness or liability, other than as expressly
permitted by the Transaction Documents;
(c) Not less than one member of Borrower's Board of Directors
(the "Independent Director") shall be an individual who is not a
direct, indirect or beneficial stockholder, officer, director,
employee, affiliate, associate or supplier of any other Company or
any of its Affiliates; accordingly, the certificate of incorporation
of Borrower shall provide that: (i) Borrower's Board of Directors
shall not approve, or take any other action to cause the filing of,
a voluntary bankruptcy petition with respect to Borrower unless the
Independent Director shall approve the taking of such action in
writing before the taking of such action, and (ii) such provision
cannot be amended without the prior written consent of the
Independent Director;
(d) The Independent Director (to the extent such Independent
Director is necessary pursuant to the immediately preceding
paragraph) shall not at any time serve as a trustee in bankruptcy
for Borrower, or any other Company or any Affiliate thereof;
(e) Any employee, consultant or agent of Borrower will be
compensated from the Borrower's funds for services provided to
Borrower. Borrower will not engage any agents other than its
attorneys, auditors and other professionals, and a servicer and any
other agent contemplated by the Transaction Documents for the
Purchased Accounts, which servicer will be fully compensated for its
services in accordance with the Servicing Agreement, and a manager,
which manager will be fully compensated from the Seller's funds;
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(f) Borrower will contract with Servicer to perform for
Borrower all operations required on a daily basis to service the
Purchased Accounts. Borrower will pay Servicer a servicing fee (the
"Servicing Fee"); Borrower will not incur any material indirect or
overhead expenses for items shared with any other Company (or any
Affiliate thereof) that are not reflected in the Servicing Fee; to
the extent, if any, that any other Company (or any Affiliate
thereof) shares items of expenses not reflected in the Servicing Fee
or the manager's fee, such as legal, auditing and other professional
services, such expenses will be allocated to the extent practical on
the basis of actual use or the value of services rendered, and
otherwise on a basis reasonably related to the actual use or the
value of services rendered; it being understood that Xxxxxx Xxxxxxx,
Inc. shall pay all expenses relating to the preparation,
negotiation, execution and delivery of the Transaction Documents,
including legal, agency and other fees;
(g) Borrower's operating expenses will not be paid by any other
Company or any other Affiliate thereof;
(h) Borrower will have its own separate stationery;
(i) Borrower's books and records will be maintained separately
from those of each other Company and any other Affiliate thereof;
(j) All financial statements of Parent or any Affiliate thereof
that are consolidated to include Borrower will contain detailed
notes clearly stating that: (i) Borrower, a special purpose
corporation, exists as a Subsidiary of Parent, and (ii) the
Originators have sold accounts receivable and other related assets
to such special purpose Subsidiary;
(k) Borrower's assets will be maintained in a manner that
facilitates their identification and segregation from those of each
other Company or any Affiliate thereof;
(l) Borrower will strictly observe corporate formalities in its
dealings with each other Company or any Affiliate thereof, and funds
or other assets of Borrower will not be commingled with those of any
other Company or any Affiliate thereof except as permitted by this
Agreement in connection with servicing the Purchased Accounts.
Borrower shall not maintain joint bank accounts or other depository
accounts to which any other Company or any Affiliate thereof (other
than Servicer) has independent access; Borrower is not named, and
has not entered into any agreement to be named, directly or
indirectly, as a direct or contingent beneficiary or loss payee on
any insurance policy with respect to any loss relating to the
property of any other Company or any other Affiliate of Parent;
Borrower will pay to the appropriate Company the marginal increase
or, in the absence of such increase, the market amount of its
portion of the premium payable with respect to any insurance policy
that covers Borrower and such Company; and
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(m) Borrower will maintain arm's-length relationships with each
other Company (and any Affiliate thereof); any Person that renders
or otherwise furnishes services to Borrower will be compensated by
Borrower at market rates for such services it renders or otherwise
furnishes to Borrower; neither Borrower nor any other Company will
be or will hold itself out to be responsible for the debts of the
other or the decisions or actions respecting the daily business and
affairs of the other; Borrower and each other Company will
immediately correct any known misrepresentation with respect to the
foregoing, and they will not operate or purport to operate as an
integrated single economic unit with respect to each other or in
their dealing with any other entity.
6.7 TAXES. Cause all assessments and taxes, whether real,
personal, or otherwise, due or payable by, or imposed, levied, or
assessed against Borrower or any of its assets to be paid in full,
before delinquency or before the expiration of any extension period,
except to the extent that the validity of such assessment or tax
shall be the subject of a Permitted Protest. Borrower will make
timely payment or deposit of all tax payments and withholding taxes
required of it by applicable laws, including those laws concerning
F.I.C.A., F.U.T.A., state disability, and local, state, and federal
income taxes, and will, upon request, furnish Agent with proof
satisfactory to Agent indicating that Borrower has made such
payments or deposits. Borrower shall deliver satisfactory evidence
of payment of applicable excise taxes in each jurisdictions in which
Borrower is required to pay any such excise tax.
6.8 [INTENTIONALLY OMITTED]
6.9 COMPLIANCE WITH LAWS. Comply with the requirements of all
applicable laws, rules, regulations, and orders of any Governmental
Authority, including the Fair Labor Standards Act and the Americans
With Disabilities Act, other than laws, rules, regulations, and
orders the non-compliance with which, individually or in the
aggregate, would not result in and reasonably could not reasonably
be expected to result in a Material Adverse Change.
6.10 LEASES. Pay when due all rents and other amounts payable
under any leases to which Borrower is a party or by which Borrower's
properties and assets are bound, unless such payments are the
subject of a Permitted Protest.
6.11 BROKERAGE COMMISSIONS. Pay any and all brokerage
commission or finders fees incurred in connection with or as a
result of Borrower's obtaining financing from the Lender Group under
this Agreement. Borrower agrees and acknowledges that payment of all
such brokerage commissions or finders fees shall be the sole
responsibility of Borrower, and Borrower agrees to indemnify,
defend, and hold Agent and the Lender Group harmless from and
against any claim of any broker or finder arising out of Borrower's
obtaining financing from the Lender Group under this Agreement.
6.12 EXISTENCE. At all times preserve and keep in full force
and effect Borrower's valid existence and good standing in the
jurisdiction in which it is organized and any rights and franchises
material to Borrower's businesses.
6.13 DISCLOSURE UPDATES. Promptly and in no event later than 5
Business Days after obtaining knowledge thereof, (a) notify Agent if
any written information, exhibit, or report furnished to the Lender
Group contained any untrue statement of a material fact or omitted
to state any material fact necessary to make the statements
contained therein not misleading in light of the circumstances in
which made, and (b) correct any defect or error that may be
discovered therein or in any Transaction Document or in the
execution, acknowledgement, filing, or recordation thereof.
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6.14 PURCHASES. Purchase or receive as a contribution all
Subject Accounts created at any time by any Originator in accordance
with the Purchase Agreement, PROVIDED that (a) all Subject Accounts
that are not Eligible Subject Accounts shall be received as a
contribution, (b) at least 85% of the purchase price for all
Eligible Subject Accounts shall be paid in cash, (c) the portion of
such purchase price constituting Indebtedness, which shall not
exceed 15%, shall be evidenced by a Subordinated Note, and (d) no
Eligible Subject Account shall be purchased if, at the time of the
proposed purchase, the sum of Availability plus the Borrower's cash
is less than 85% of the purchase price of such Eligible Subject
Accounts.
7. NEGATIVE COVENANTS.
Borrower covenants and agrees that, so long as any credit hereunder
shall be available and until full and final payment of the Obligations and the
termination of this Agreement, Borrower will not do any of the following:
7.1 INDEBTEDNESS. Create, incur, assume, permit, guarantee, or
otherwise become or remain, directly or indirectly, liable with respect to any
Indebtedness, except:
(a) Indebtedness evidenced by this Agreement and the other Loan
Documents, and
(b) Indebtedness evidenced by the Subordinated Note.
7.2 LIENS. Create, incur, assume, or permit to exist, directly or
indirectly, any Lien on or with respect to any of its assets, of any kind,
whether now owned or hereafter acquired, or any income or profits therefrom,
except for Permitted Liens.
7.3 RESTRICTIONS ON CHANGES.
(a) Enter into any merger, consolidation, reorganization, or
recapitalization, or reclassify its Stock.
(b) Liquidate, wind up, or dissolve itself (or suffer any
liquidation or dissolution).
(c) Form or acquire any Subsidiary.
(d) Acquire any property or assets other than Permitted Assets.
(e) Make any material change in the Credit and Collection
Policy without the prior written consent of the Agent (which consent
shall not be unreasonably withheld or delayed), make any change in
the Credit and Collection Policy that would result in a Material
Adverse Change with respect to the Accounts, or make (or permit any
Originator to make) any other change in the Credit and Collection
Policy without giving prior written notice thereof to Agent.
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7.4 DISPOSAL OF ASSETS. Other than Permitted Dispositions, convey,
sell, lease, license, assign, transfer, or otherwise dispose of any of
Borrower's assets.
7.5 CHANGE NAME. Change Borrower's name, FEIN, corporate structure,
or identity, or add any new fictitious name.
7.6 GUARANTEE. Guarantee or otherwise become in any way liable with
respect to the obligations of any third Person except by endorsement of
instruments or items of payment for deposit to the account of Borrower or which
are transmitted or turned over to Agent.
7.7 NATURE OF BUSINESS. Conduct any business other than the
purchase, ownership and collection of Subject Accounts in accordance with the
Purchase Agreement; provided, HOWEVER, that Borrower shall be permitted to incur
minimal obligations to the extent necessary for the day-to-day operations of
Borrower (such as expenses for stationery, audits, maintenance of legal status,
etc.).
7.8 PREPAYMENTS AND AMENDMENTS.
(a) Agree to, consent to or otherwise permit any amendment,
supplement or other modification to the Purchase Agreement, the Subordinated
Note or (unless consented to by Agent) the Servicing Agreement,
(b) Prepay, redeem, defease, purchase, or otherwise acquire any
Indebtedness under the Subordinated Note or, except to the extent expressly
permitted under the Servicing Agreement, pay any Servicing Fee under the
Servicing Agreement, or
(c) Directly or indirectly, amend, modify, alter, increase, or
change any of the terms or conditions of the Subordinated Note or the
Indebtedness evidenced thereby or the terms or conditions of the Servicing
Agreement or of the Servicing Fee payable thereunder.
7.9 CHANGE OF CONTROL. Cause, permit, or suffer, directly or
indirectly, any Change of Control.
7.10 COMPROMISE OF ACCOUNTS. Compromise or adjust any Account (or
extend the time of payment thereof) or grant any discounts, allowances or
credits other than, provided no Default or Event of Default has occurred and is
continuing, in the ordinary course of its business and consistent with the
Credit and Collection Policy.
7.11 DISTRIBUTIONS. Make any distribution or declare or pay any
dividends (in cash or other property, other than common Stock) on, or purchase,
acquire, redeem, or retire any of Borrower's Stock, of any class, whether now or
hereafter outstanding, PROVIDED that Borrower may make distributions or declare
and pay dividends not more often than twice during any calendar week if, both
immediately before and immediately after giving effect to such distribution or
payment, (a) no Default or Event of Default shall have occurred and be
continuing and (b) the Borrower has aggregate Availability and/or cash in an
amount of not less than $5,000,000.
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7.12 ACCOUNTING METHODS. Modify or change its method of accounting
(other than as may be required to conform to GAAP) or enter into, modify, or
terminate any agreement currently existing, or at any time hereafter entered
into with any third party accounting firm or service bureau for the preparation
or storage of Borrower's accounting records without said accounting firm or
service bureau agreeing to provide Agent information regarding the Collateral or
Borrower's financial condition.
7.13 INVESTMENTS. Except for Permitted Investments, directly or
indirectly, make or acquire any Investment or incur any liabilities (including
contingent obligations) for or in connection with any Investment; PROVIDED,
HOWEVER, that (i) the Borrower may make loans or advances to the Originators not
more often than twice during any calendar week if (A) both immediately before
and after giving effect to any such loans or advances (x) no Default or Event of
Default shall have occurred and be continuing and (y) the Borrower has aggregate
Availability and/or cash in an amount of not less than $5,000,000, and (B) Agent
has received a certificate executed by an Authorized Person of Borrower,
certifying that such loan or advance is being made in compliance with the Senior
Indenture and that, after giving effect to the making of such loan or advance,
the aggregate outstanding amount of Debt of the Restricted Subsidiaries,
excluding all Secured Debt and Attributable Debt in respect of sale and
leaseback transactions, will not exceed 10% of Consolidated Net Tangible Assets
(as the terms "Debt", "Restricted Subsidiaries", "Secured Debt", "Attributable
Debt" and "Consolidated Net Tangible Assets" are defined in the Senior
Indenture), and (ii) except as provided in (i) above, Borrower shall not have
Permitted Investments (other than in the Cash Management Accounts) outstanding
at any time unless Borrower and the applicable securities intermediary or bank
have entered into Control Agreements governing such Permitted Investments, as
Agent shall determine in its Permitted Discretion, to perfect (and further
establish) the Agent's Liens in such Permitted Investments.
7.14 TRANSACTIONS WITH AFFILIATES. Directly or indirectly enter into
or permit to exist any transaction with any Affiliate of Borrower except for
transactions that are expressly permitted hereunder and are in the ordinary
course of Borrower's business, upon fair and reasonable terms, that are fully
disclosed to Agent, and that are no less favorable to Borrower than would be
obtained in an arm's length transaction with a non-Affiliate.
7.15 SUSPENSION. Suspend or go out of a substantial portion of its
business.
7.16 [INTENTIONALLY OMITTED].
7.17 USE OF PROCEEDS. Use the proceeds of the Advances for any
purpose other than (i) to finance the purchase of Eligible Subject Accounts in
accordance with the Purchase Agreement, and (ii) to pay transactional fees,
costs, and expenses incurred in connection with this Agreement, the other
Transaction Documents, and the transactions contemplated hereby and thereby.
7.18 CHANGE IN LOCATION OF CHIEF EXECUTIVE OFFICE. Relocate its
chief executive office to a new location without providing 30 days prior written
notification thereof to Agent and so long as, at the time of such written
notification, Borrower provides any financing statements necessary to perfect
and continue perfected the Agent's Liens and also provides to Agent a Collateral
Access Agreement with respect to such new location.
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7.19 SECURITIES ACCOUNTS. Establish or maintain any Securities
Account unless Agent shall have received a Control Agreement in respect of such
Securities Account. Borrower shall not transfer assets out of any Securities
Account; PROVIDED, HOWEVER, that, so long as no Default or Event of Default has
occurred and is continuing or would result therefrom, Borrower may use such
assets (and the proceeds thereof) to the extent not prohibited by this
Agreement.
7.20 FINANCIAL COVENANTS.
(a) Permit:
(i) MINIMUM COLLECTIONS. As of the end of any week, the average amount of
the weekly Collections with respect to Borrower's Accounts during the
Testing Period ending at the end of such week to be less than
$15,000,000; PROVIDED, HOWEVER, that the calculation of weekly
Collections determined under this SECTION 7.20(A)(I) shall include
all amounts not exceeding $4,000,000 paid to subcontractors for goods
and/or services that, pursuant to the terms of any commercial
contract between an Originator and its clients, such Originator pays
such subcontractor (on behalf of, and as agent for, such client)
directly from the clients' funds;
(ii) MINIMUM PURCHASES. As of the end of any week, the average amount of
Subject Accounts purchased by, or contributed to, Borrower each week
pursuant to the Purchase Agreement during the Testing Period ending
at the end of such week to be less than $18,000,00; PROVIDED,
HOWEVER, that the calculation of weekly purchases and contributions
determined under this SECTION 7.20(A)(II) shall include amounts not
exceeding $4,000,000 invoiced by any Originator for subcontractor
services for which, pursuant to the terms of a commercial contract
between such Originator and its client, such Originator acts as agent
for the client and pays for subcontractor goods and services directly
from the client's funds;
(iii) DILUTION. Dilution for any six-month period, measured each
month for the six-month period ending as of the last day of such month, to
exceed 18%;
(iv) A/R TURNOVER PERIOD. The A/R Turnover Period for any month,
measured as of the last day of such month, to exceed 80 days;
(v) DELINQUENCY RATIO. The Delinquency Ratio at any time to exceed
50%;
(vi) TANGIBLE NET WORTH. Tangible Net Worth at any time to be less
than $5,000,000;
(b) Permit:
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(i) MINIMUM EBITDA. On and after March 31, 2003, Consolidated
Adjusted EBITDA for any fiscal period set forth below to be less than the
applicable amount set forth below under the heading "Minimum Amount":
FISCAL PERIOD MINIMUM AMOUNT FLOOR AMOUNT
------------- -------------- ------------
Four Fiscal Quarters ended closest to 3/31/03 $ 81,700,000 $62,846,000
Four Fiscal Quarters ended closest to 6/30/03 $ 92,417,000 $71,090,000
Four Fiscal Quarters ended closest to 9/30/03 $101,378,000 $77,983,000
Four Fiscal Quarters ended closest to 12/31/03 $101,726,000 $78,251,000
Four Fiscal Quarters ended closest to 3/31/04 $111,693,000 $85,918,000
Four Fiscal Quarters ended closest to 6/30/04 $121,660,000 $93,585,000
Four Fiscal Quarters ended closest to 9/30/04 $131,627,000 $101,252,000
Four Fiscal Quarters ended closest to 12/31/04 $141,594,000 $108,918,000
Four Fiscal Quarters ended closest to 3/31/05 $143,243,000 $110,187,000
(ii) SENIOR DEBT RATIO. From and after March 31, 2003, the Senior Debt
Ratio, at any date during any period set forth below, to be more than
the applicable ratio set forth below opposite such period under the
heading "Maximum Ratio":
FISCAL PERIOD MAXIMUM RATIO CEILING AMOUNT
------------- ------------- --------------
The last day of the Fiscal Quarter ended closest to 3/31/03 6.05 7.80
through the day before the last day of the Fiscal Quarter ended
closest to 6/30/03
The last day of the Fiscal Quarter ended closest to 6/30/03 5.35 6.90
through the day before the last day of the Fiscal Quarter ended
closest to 9/30/03
The last day of the Fiscal Quarter ended closest to 9/30/03 4.85 6.30
through the day before the last day of the Fiscal Quarter ended
closest to 12/31/03
The last day of the Fiscal Quarter ended closest to 12/31/03 4.85 6.25
through the day before the last day of the Fiscal Quarter ended
closest to 3/31/04
The last day of the Fiscal Quarter ended closest to 3/31/04 4.40 5.70
through the day before the last day of the Fiscal Quarter ended
closest to 6/30/04
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FISCAL PERIOD MAXIMUM RATIO CEILING AMOUNT
------------- ------------- --------------
The last day of the Fiscal Quarter ended closest to 6/30/04 4.05 5.25
through the day before the last day of the Fiscal Quarter ended
closest to 9/30/04
The last day of the Fiscal Quarter ended closest to 9/30/04 3.75 4.85
through the day before the last day of the Fiscal Quarter ended
closest to 12/31/04
The last day of the Fiscal Quarter ended closest to 12/31/04 3.50 4.50
through the day before the last day of the Fiscal Quarter ended
closest to 3/31/05
The last day of the Fiscal Quarter ended closest to 3/31/05 3.45 4.45
through the day before the last day of the Fiscal Quarter ended
closest to 6/30/05
(iii) ADJUSTMENTS. In the event of any Asset Sale the
compliance levels specified in subparagraphs (i) and (ii) of this
paragraph (b) for each period ending on or after the date of
consummation of such Asset Sale shall be adjusted as determined
jointly by Borrower and Agent. Such determination shall be based
upon (A) with respect to Consolidated Adjusted EBITDA, for purposes
of both paragraphs (i) and (ii) above, a reduction for the
contribution of the assets or entity which was the subject of such
Asset Sale to the business plan as presented by FW LLC on May 9,
2002, adjusted for the cushion (35% in 2003 and 30% thereafter)
utilized in the initial determination of the minimum amounts
specified in paragraphs (i) and (ii) above and (B) with respect to
Senior Debt for purposes of paragraph (ii) above, an adjustment
based on the amount of the actual reduction of the Credit Exposures
(as defined in the Existing Credit Agreement) and the notes issued
under the Senior Indenture required pursuant to Section 2.12(b) of
the Existing Credit Agreement by reason of such Asset Sale. Agent
shall promptly notify the Lenders of each such adjustment.
(iv) Notwithstanding anything to the contrary contained herein,
if at any time and from time to time, after the date hereof (i) any
of the financial covenants in the Existing Credit Agreement
corresponding to the Specified Financial Covenants or any definition
or term used in such covenants in the Existing Credit Agreement
(collectively, the "Existing Credit Agreement Specified Covenants")
is amended, modified, supplemented or waived and (ii) the Borrower
remains in compliance with the Specified Financial Covenants using
the "Floor Amount" in the case of the Minimum EBITDA in Section
7.20(b)(i) and using the "Ceiling Amount" in the case of the Senior
Debt Ratio in Section 7.20(b)(ii), the Agent and the Lenders agree
to amend, modify, supplement or waive the Specified Financial
Covenants and any definition or term used in the Specified Financial
Covenants (collectively, the "Specified Provisions"), on the same
basis and to the same extent that the Existing Credit Agreement
Specified Covenants are amended, modified, supplement or waived. The
only conditions to any such amendment, modification, supplement or
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waiver of the Specified Provisions based upon an amendment,
modification, supplement or waiver of the Existing Credit Agreement
Specified Covenants shall be (A) the receipt by the Agent and the
Lenders of a fully-executed copy of the amendment, modification,
supplement or waiver of the Existing Credit Agreement Specified
Covenants that contain no conditions to its effectiveness other than
the effectiveness of the corresponding amendment, modification,
supplement or waiver of the Specified Provisions, (B) the receipt by
the Agent and the Lenders of the same pro rata consideration as
received or to be received by the agent and the lenders under the
Existing Credit Agreement in connection with the amendment,
modification, supplement or waiver of the Existing Credit Agreement
Specified Covenants and (C) the execution and delivery by the Agent
and the Borrower of the amendment, modification, supplement or
waiver to the Specified Provisions incorporating the same terms and
conditions as the amendment, modification, supplement or waiver of
the Existing Credit Agreement Specified Covenants. Each of the
Agent, the Lenders and the Borrower hereby agrees to execute and
deliver all such documents required to reflect any amendment,
modification, supplement or waiver to the Specified Covenants
required by this Section 7.20(b)(iv).
(c) Make Capital Expenditures at any time.
8. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an
event of default (each, an "Event of Default") under this Agreement:
8.1 If Borrower fails to pay when due and payable, or when declared
due and payable, all or any portion of the Obligations (whether of principal,
interest in accordance with SECTION 2.6(D) (including any interest which, but
for the provisions of the Bankruptcy Code, would have accrued on such amounts),
fees and charges due the Lender Group, reimbursement of Lender Group Expenses,
or other amounts constituting Obligations);
8.2 If Borrower fails to perform, keep, or observe any term,
provision, condition, covenant, or agreement contained in (i) SECTION 6.1, 6.4,
6.5 or 6.13 and such failure continues for five days, (ii) clause (a) or (b) of
SECTION 6.2 and such failure continues for more than one (1) day, (iii) clause
(c), (d), (e) or (f) of SECTION 6.2 and such failure continues for a period of
two (2) days, (iv) any other clause of SECTION 6.2 or SECTION 6.3 (but only up
to three times during any 12-month period) and such failure continues for a
period of three (3) days, or (v) any other provision of this Agreement or in any
of the other Transaction Documents;
8.3 If any material portion of Borrower's assets is attached,
seized, subjected to a writ or distress warrant, levied upon, or comes into the
possession of any third Person;
8.4 If an Insolvency Proceeding is commenced by Borrower, Servicer,
any Originator or Parent;
8.5 If an Insolvency Proceeding is commenced against Borrower,
Servicer, any Originator or Parent, and any of the following events occur: (a)
Borrower, Servicer, such Originator or Parent (as applicable) consents to the
institution of such Insolvency Proceeding against it, (b) the petition
commencing the Insolvency Proceeding is not timely controverted, (c) the
petition commencing the Insolvency Proceeding is not dismissed within 45
calendar days of the date of the filing thereof; PROVIDED, HOWEVER, that, during
the pendency of such period, Agent (including any successor agent) and each
other member of the Lender Group shall be relieved of their obligations to
extend credit hereunder, (d) an interim trustee is appointed to take possession
of all or any substantial portion of the properties or assets of, or to operate
all or any substantial portion of the business of, Borrower, Servicer, such
Originator or Parent, or (e) an order for relief shall have been entered
therein;
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8.6 If Borrower, Servicer, any Originator or Parent is enjoined,
restrained, or in any way prevented by court order from continuing to conduct
all or any material part of its business affairs;
8.7 If a notice of Lien, levy, or assessment is filed of record with
respect to any of Borrower's assets by the United States, or any department,
agency, or instrumentality thereof, or by any state, county, municipal, or
governmental agency, or if any taxes or debts owing at any time hereafter to any
one or more of such entities becomes a Lien, whether xxxxxx or otherwise, upon
any of Borrower's assets and the same is not paid before such payment is
delinquent;
8.8 If a judgment or other claim becomes a Lien or encumbrance upon
any material portion of Borrower's or any Originator's assets and, in the case
of any Originator, enforcement of such judgment remains unstayed for a period of
30 consecutive days;
8.9 If there is a default in any material agreement (including,
without limitation, the Servicing Agreement, the Purchase Agreement and the
Subordinated Note) to which Borrower or Servicer is a party and such default (a)
occurs at the final maturity of the obligations thereunder, or (b) results in a
right by the other party thereto, irrespective of whether exercised, to
accelerate the maturity of Borrower's or Servicer's obligations thereunder, to
terminate such agreement, or to refuse to renew such agreement pursuant to an
automatic renewal right therein;
8.10 If Borrower makes any payment on account of the Subordinated
Note or of the Servicing Fee pursuant to the Servicing Agreement, except, in
each case, to the extent such payment is permitted by the terms hereof and
thereof;
8.11 If any material misstatement or misrepresentation exists now or
hereafter in any warranty, representation, statement, or Record made to the
Lender Group by Borrower, Servicer or any Originator, or any officer, employee,
agent, or director of Borrower, Servicer or Originator;
8.12 If this Agreement or any other Loan Document that purports to
create a Lien, shall, for any reason, fail or cease to create a valid and
perfected and, except to the extent permitted by the terms hereof or thereof,
first priority Lien on or security interest in the Collateral covered hereby or
thereby;
8.13 (a) Any provision of any Transaction Document shall at any time
for any reason be declared to be null and void, or the validity or
enforceability thereof shall be contested by any Company, or a proceeding shall
be commenced by any Company, or by any Governmental Authority having
jurisdiction over Parent, Borrower, Servicer or any Originator, seeking to
establish the invalidity or unenforceability thereof, or Parent, Borrower,
Servicer or any Originator, shall deny that such Person has any liability or
obligation purported to be created under any Transaction Document; or
(b) any Company shall deny that the sale of the Eligible Subject
Accounts pursuant to the Purchase Agreement should be treated as a "true sale"
for any reason or a proceeding shall be commenced by any Company, or by any
Governmental Authority having jurisdiction over Parent, Borrower, Servicer or
any Originator, seeking to establish that the sale of the Subject Accounts
pursuant to the Purchase Agreement should not be treated as a "true sale" for
any reason;
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8.14 Parent or any Originator shall fail to pay any principal of or
interest on any of its Indebtedness in excess of $10,000,000, or any interest or
premium thereon, when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) and such failure shall continue after the
applicable grace period, if any, specified in the agreement or instrument
relating to such Indebtedness, or any other default under any agreement or
instrument relating to any such Indebtedness, or any other event, shall occur
and shall continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such default or event is to
accelerate, or to permit the acceleration of, the maturity of such Indebtedness;
or any such Indebtedness shall be declared to be due and payable, or required to
be prepaid (other than by a regularly scheduled required prepayment), redeemed,
purchased or defeased or an offer to prepay, redeem, purchase or defease such
Indebtedness shall be required to be made, in each case, prior to the stated
maturity thereof; or
8.15 On any Business Day on which Eligible Subject Accounts are
available to be purchased by Borrower under the Purchase Agreement, the sum of
Availability plus Borrower's cash is less than 85% of the aggregate purchase
price of such Eligible Subject Accounts and such shortfall shall continue for a
period of three (3) Business Days.
Anything to the contrary contained herein notwithstanding, in the
event that an Event of Default shall have occurred and be continuing solely by
reason of the occurrence of a Single Originator Default, then Agent and Lenders
shall, upon the written request of Borrower, waive such Event of Default,
PROVIDED that (a) no Event of Default, other than such Single Originator
Default, shall have occurred and be continuing, (b) after excluding from the
Eligible Accounts and the Borrowing Base all Subject Accounts which were
purchased by the Borrower from the Originator involved in such Single Originator
Default, aggregate Availability and/or cash is not less than $5,000,000, and (c)
Borrower may request such waiver only once during the term of this Agreement.
9. THE LENDER GROUP'S RIGHTS AND REMEDIES.
9.1 RIGHTS AND REMEDIES. Upon the occurrence, and during the
continuation, of an Event of Default, the Required Lenders (at their election
but without notice of their election and without demand) may authorize and
instruct Agent to do any one or more of the following on behalf of the Lender
Group (and Agent, acting upon the instructions of the Required Lenders, shall do
the same on behalf of the Lender Group), all of which are authorized by
Borrower:
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(a) Declare all Obligations, whether evidenced by this Agreement, by
any of the other Loan Documents, or otherwise, immediately due and payable;
(b) Cease advancing money or extending credit to or for the benefit
of Borrower under this Agreement, under any of the Loan Documents, or under any
other agreement between Borrower and the Lender Group;
(c) Terminate this Agreement and any of the other Loan Documents as
to any future liability or obligation of the Lender Group, but without affecting
any of the Agent's Liens in the Collateral and without affecting the
Obligations;
(d) Settle or adjust disputes and claims directly with Account
Debtors for amounts and upon terms which Agent considers advisable, and in such
cases, Agent will credit Borrower's Loan Account with only the net amounts
received by Agent in payment of such disputed Accounts after deducting all
Lender Group Expenses incurred or expended in connection therewith;
(e) [Intentionally Omitted]
(f) Without notice to or demand upon Borrower, make such payments
and do such acts as Agent considers necessary or reasonable to protect its
security interests in the Collateral. Borrower agrees to assemble the Collateral
if Agent so requires, and to make the Collateral available to Agent at a place
that Agent may designate which is reasonably convenient to both parties.
Borrower authorizes Agent to enter the premises where the Collateral is located,
to take and maintain possession of the Collateral, or any part of it, and to
pay, purchase, contest, or compromise any Lien that in Agent's determination
appears to conflict with the Agent's Liens and to pay all expenses incurred in
connection therewith and to charge Borrower's Loan Account therefor. With
respect to any of Borrower's owned or leased premises, Borrower hereby grants
Agent a license to enter into possession of such premises and to occupy the
same, without charge, in order to exercise any of the Lender Group's rights or
remedies provided herein, at law, in equity, or otherwise;
(g) Without notice to Borrower (such notice being expressly waived),
and without constituting a retention of any collateral in satisfaction of an
obligation (within the meaning of the Code), set off and apply to the
Obligations any and all (i) balances and deposits of Borrower held by the Lender
Group (including any amounts received in the Cash Management Accounts), or (ii)
Indebtedness at any time owing to or for the credit or the account of Borrower
held by the Lender Group;
(h) Hold, as cash collateral, any and all balances and deposits of
Borrower held by the Lender Group, and any amounts received in the Cash
Management Accounts, to secure the full and final repayment of all of the
Obligations;
(i) Ship, reclaim, recover, store, finish, maintain, repair, prepare
for sale, advertise for sale, and sell (in the manner provided for herein) the
Collateral. Borrower hereby grants to Agent a license or other right to use,
without charge, Borrower's labels, patents, copyrights, trade secrets, trade
names, trademarks, service marks, and advertising matter, or any property of a
similar nature, as it pertains to the Collateral, in completing production of,
advertising for sale, and selling any Collateral and Borrower's rights under all
licenses and all franchise agreements shall inure to the Lender Group's benefit;
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(j) Sell the Collateral at either a public or private sale, or both,
by way of one or more contracts or transactions, for cash or on terms, in such
manner and at such places (including Borrower's premises) as Agent determines is
commercially reasonable. It is not necessary that the Collateral be present at
any such sale;
(k) Agent shall give notice of the disposition of the Collateral as
follows:
(i) Agent shall give Borrower a notice in writing of the time and
place of public sale, or, if the sale is a private sale or some other
disposition other than a public sale is to be made of the Collateral, the time
on or after which the private sale or other disposition is to be made; and
(ii) The notice shall be personally delivered or mailed, postage
prepaid, to Borrower as provided in SECTION 12, at least 10 days before the
earliest time of disposition set forth in the notice; no notice needs to be
given prior to the disposition of any portion of the Collateral that is
perishable or threatens to decline speedily in value or that is of a type
customarily sold on a recognized market;
(l) Agent, on behalf of the Lender Group, may credit bid and
purchase at any public sale; and
(m) Agent may seek the appointment of a receiver or keeper to take
possession of all or any portion of the Collateral or to operate same and, to
the maximum extent permitted by law, may seek the appointment of such a receiver
without the requirement of prior notice or a hearing;
(n) The Lender Group shall have all other rights and remedies
available at law or in equity or pursuant to any other Loan Document; and
(o) Any deficiency that exists after disposition of the Collateral
as provided above will be paid immediately by Borrower. Any excess will be
returned, without interest and subject to the rights of third Persons, by Agent
to Borrower.
9.2 REMEDIES CUMULATIVE. The rights and remedies of the Lender Group
under this Agreement, the other Loan Documents, and all other agreements shall
be cumulative. The Lender Group shall have all other rights and remedies not
inconsistent herewith as provided under the Code, by law, or in equity. No
exercise by the Lender Group of one right or remedy shall be deemed an election,
and no waiver by the Lender Group of any Event of Default shall be deemed a
continuing waiver. No delay by the Lender Group shall constitute a waiver,
election, or acquiescence by it.
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10. TAXES AND EXPENSES.
If Borrower fails to pay any monies (whether taxes, assessments,
insurance premiums, or, in the case of leased properties or assets, rents or
other amounts payable under such leases) due to third Persons, or fails to make
any deposits or furnish any required proof of payment or deposit, all as
required under the terms of this Agreement and except, in the case of
assessments and taxes, to the extent that the validity of such assessment or tax
shall be the subject of a Permitted Protest, then, Agent, in its sole discretion
and without prior notice to Borrower, may do any or all of the following: (a)
make payment of the same or any part thereof, (b) set up such reserves in
Borrower's Loan Account as Agent deems necessary to protect the Lender Group
from the exposure created by such failure, or (c) in the case of the failure to
comply with SECTION 6.8 hereof, obtain and maintain insurance policies of the
type described in SECTION 6.8 and take any action with respect to such policies
as Agent deems prudent. Any such amounts paid by Agent shall constitute Lender
Group Expenses and any such payments shall not constitute an agreement by the
Lender Group to make similar payments in the future or a waiver by the Lender
Group of any Event of Default under this Agreement. Agent need not inquire as
to, or contest the validity of, any such expense, tax, or Lien and the receipt
of the usual official notice for the payment thereof shall be conclusive
evidence that the same was validly due and owing.
11. WAIVERS; INDEMNIFICATION.
11.1 DEMAND; PROTEST; ETC. Borrower waives demand, protest, notice
of protest, notice of default or dishonor, notice of payment and nonpayment,
nonpayment at maturity, release, compromise, settlement, extension, or renewal
of documents, instruments, chattel paper, and guarantees at any time held by the
Lender Group on which Borrower may in any way be liable.
11.2 THE LENDER GROUP'S LIABILITY FOR COLLATERAL. Borrower hereby
agrees that: (a) so long as Agent complies with its obligations, if any, under
the Code, the Lender Group shall not in any way or manner be liable or
responsible for: (i) the safekeeping of the Collateral, (ii) any loss or damage
thereto occurring or arising in any manner or fashion from any cause, (iii) any
diminution in the value thereof, or (iv) any act or default of any carrier,
warehouseman, bailee, forwarding agency, or other Person; and (b) all risk of
loss, damage, or destruction of the Collateral shall be borne by Borrower.
11.3 INDEMNIFICATION. Borrower shall pay, indemnify, defend, and
hold the Agent-Related Persons, the Lender-Related Persons with respect to each
Lender, each Participant, and each of their respective officers, directors,
employees, agents, and attorneys-in-fact (each, an "Indemnified Person")
harmless (to the fullest extent permitted by law) from and against any and all
claims, demands, suits, actions, investigations, proceedings, and damages, and
all reasonable attorneys fees and disbursements and other costs and expenses
actually incurred in connection therewith (as and when they are incurred and
irrespective of whether suit is brought), at any time asserted against, imposed
upon, or incurred by any of them (a) in connection with or as a result of or
related to the execution, delivery, enforcement, performance, or administration
of this Agreement, any of the other Transaction Documents, or the transactions
contemplated hereby or thereby, and (b) with respect to any investigation,
litigation, or proceeding related to this Agreement, any other Transaction
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Document, or the use of the proceeds of the credit provided hereunder
(irrespective of whether any Indemnified Person is a party thereto), or any act,
omission, event, or circumstance in any manner related thereto (all the
foregoing, collectively, the "Indemnified Liabilities"). The foregoing to the
contrary notwithstanding, Borrower shall have no obligation to any Indemnified
Person under this SECTION 11.3 with respect to any Indemnified Liability that a
court of competent jurisdiction finally determines to have resulted from the
gross negligence or willful misconduct of such Indemnified Person. This
provision shall survive the termination of this Agreement and the repayment of
the Obligations. If any Indemnified Person makes any payment to any other
Indemnified Person with respect to an Indemnified Liability as to which Borrower
was required to indemnify the Indemnified Person receiving such payment, the
Indemnified Person making such payment is entitled to be indemnified and
reimbursed by Borrower with respect thereto. WITHOUT LIMITATION, THE FOREGOING
INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED
LIABILITIES WHICH IN WHOLE OR IN PART CAUSED BY OR ARISE OUT OF ANY NEGLIGENT
ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY OTHER PERSON.
12. NOTICES.
Unless otherwise provided in this Agreement, all notices or demands
by Borrower or Agent to the other relating to this Agreement or any other
Transaction Document shall be in writing and (except for financial statements
and other informational documents which may be sent by first-class mail, postage
prepaid) shall be personally delivered or sent by registered or certified mail
(postage prepaid, return receipt requested), overnight courier, electronic mail
(at such email addresses as Borrower or Agent, as applicable, may designate to
each other in accordance herewith), or telefacsimile to Borrower or Agent, as
the case may be, at its address set forth below:
If to Borrower: XXXXXX XXXXXXX FUNDING LLC
Xxxxxxxxxx Xxxxxxxxx Xxxx
Xxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxx, Chief Financial Officer
Fax No. 000.000.0000
with copies to: King & Spalding
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxx, Esq.
Fax No. 000.000.0000
If to Agent: FOOTHILL CAPITAL CORPORATION
Xxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxx Xxxx
Fax No. 000.000.0000
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with copies to: Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx X. Xxxxxxx, Esq.
Fax No. 000.000.0000
Agent and Borrower may change the address at which they are to
receive notices hereunder, by notice in writing in the foregoing manner given to
the other party. All notices or demands sent in accordance with this SECTION 12,
other than notices by Agent in connection with enforcement rights against the
Collateral under the provisions of the Code, shall be deemed received on the
earlier of the date of actual receipt or 3 Business Days after the deposit
thereof in the mail. Borrower acknowledges and agrees that notices sent by the
Lender Group in connection with the exercise of enforcement rights against
Collateral under the provisions of the Code shall be deemed sent when deposited
in the mail or personally delivered, or, where permitted by law, transmitted by
telefacsimile or any other method set forth above.
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT
OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT
HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH
RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR
THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
(b) THE PARTIES HERETO AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING
IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED
AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF NEW
YORK, STATE OF NEW YORK, PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT'S OPTION, IN
THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE
SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. BORROWER AND THE LENDER GROUP
WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO
ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT
ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 13(B).
(c) BORROWER AND THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW OR STATUTORY CLAIMS. BORROWER AND THE LENDER GROUP REPRESENT THAT
EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
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14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
14.1 ASSIGNMENTS AND PARTICIPATIONS.
(a) Any Lender may, with the written consent of Agent (provided that
no written consent of Agent shall be required in connection with any assignment
and delegation by a Lender to an Eligible Transferee), assign and delegate to
one or more assignees (each an "Assignee") all, or any ratable part of all, of
the Obligations, the Commitments and the other rights and obligations of such
Lender hereunder and under the other Loan Documents, in a minimum amount of
$5,000,000 (such minimum amount not to apply to an Eligible Affiliate
Transferee); PROVIDED, HOWEVER, that Borrower and Agent may continue to deal
solely and directly with such Lender in connection with the interest so assigned
to an Assignee until (i) written notice of such assignment, together with
payment instructions, addresses, and related information with respect to the
Assignee, have been given to Borrower and Agent by such Lender and the Assignee,
(ii) except in the case of an assignment to an Eligible Affiliate Transferee,
such Lender and its Assignee have delivered to Borrower and Agent an Assignment
and Acceptance in form and substance satisfactory to Agent, and (iii) except in
the case of an assignment to an Eligible Affiliate Transferee, the assignor
Lender or Assignee has paid to Agent for Agent's separate account a processing
fee in the amount of $5,000. Anything contained herein to the contrary
notwithstanding, the consent of Agent shall not be required (and payment of any
fees shall not be required) if such assignment is in connection with any merger,
consolidation, sale, transfer, or other disposition of all or any substantial
portion of the business or loan portfolio of such Lender.
(b) From and after the date that Agent notifies the assignor Lender
(with a copy to Borrower) that it has received an executed Assignment and
Acceptance and payment of the above-referenced processing fee (in each case to
the extent required under subsection (a) above), (i) the Assignee thereunder
shall be a party hereto and, to the extent that rights and obligations hereunder
have been assigned to it pursuant to such Assignment and Acceptance, shall have
the rights and obligations of a Lender under the Loan Documents, and (ii) the
assignor Lender shall, to the extent that rights and obligations hereunder and
under the other Loan Documents have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights (except with respect to SECTION
11.3 hereof) and be released from its obligations under this Agreement (and in
the case of an Assignment and Acceptance covering all or the remaining portion
of an assigning Lender's rights and obligations under this Agreement and the
other Loan Documents, such Lender shall cease to be a party hereto and thereto),
and such assignment shall affect a novation between Borrower and the Assignee.
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the Assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (1) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
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Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Transaction Document
furnished pursuant hereto, (2) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of Borrower or the performance or observance by Borrower of any of its
obligations under this Agreement or any other Transaction Document furnished
pursuant hereto, (3) such Assignee confirms that it has received a copy of this
Agreement, together with such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance, (4) such Assignee will, independently and without
reliance upon Agent, such assigning Lender or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement, (5) such Assignee appoints and authorizes Agent to take such
actions and to exercise such powers under this Agreement as are delegated to
Agent, by the terms hereof, together with such powers as are reasonably
incidental thereto, and (6) such Assignee agrees that it will perform all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.
(d) Immediately upon each Assignee's making its processing fee
payment under the Assignment and Acceptance and receipt and acknowledgment by
Agent of such fully executed Assignment and Acceptance (in each case to the
extent required under subsection (a) above), this Agreement shall be deemed to
be amended to the extent, but only to the extent, necessary to reflect the
addition of the Assignee and the resulting adjustment of the Commitments arising
therefrom. The Commitment allocated to each Assignee shall reduce such
Commitments of the assigning Lender PRO TANTO.
(e) Any Lender may at any time, with the written consent of Agent,
sell to one or more commercial banks, financial institutions, or other Persons
not Affiliates of such Lender (a "Participant") participating interests in its
Obligations, the Commitment, and the other rights and interests of that Lender
(the "Originating Lender") hereunder and under the other Loan Documents
(provided that no written consent of Agent shall be required in connection with
any sale of any such participating interests by a Lender to an Eligible
Transferee); PROVIDED, HOWEVER, that (i) the Originating Lender shall remain a
"Lender" for all purposes of this Agreement and the other Loan Documents and the
Participant receiving the participating interest in the Obligations, the
Commitments, and the other rights and interests of the Originating Lender
hereunder shall not constitute a "Lender" hereunder or under the other Loan
Documents and the Originating Lender's obligations under this Agreement shall
remain unchanged, (ii) the Originating Lender shall remain solely responsible
for the performance of such obligations, (iii) Borrower, Agent, and the Lenders
shall continue to deal solely and directly with the Originating Lender in
connection with the Originating Lender's rights and obligations under this
Agreement and the other Loan Documents, (iv) no Lender shall transfer or grant
any participating interest under which the Participant has the right to approve
any amendment to, or any consent or waiver with respect to, this Agreement or
any other Loan Document, except to the extent such amendment to, or consent or
waiver with respect to this Agreement or of any other Loan Document would (A)
extend the final maturity date of the Obligations hereunder in which such
Participant is participating, (B) reduce the interest rate applicable to the
Obligations hereunder in which such Participant is participating, (C) release
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all or a material portion of the Collateral or guaranties (except to the extent
expressly provided herein or in any of the Loan Documents) supporting the
Obligations hereunder in which such Participant is participating, (D) postpone
the payment of, or reduce the amount of, the interest or fees payable to such
Participant through such Lender, or (E) change the amount or due dates of
scheduled principal repayments or prepayments or premiums, and (v) all amounts
payable by Borrower hereunder shall be determined as if such Lender had not sold
such participation, except that, if amounts outstanding under this Agreement are
due and unpaid, or shall have been declared or shall have become due and payable
upon the occurrence of an Event of Default, each Participant shall be deemed to
have the right of set-off in respect of its participating interest in amounts
owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement. The rights of any Participant only shall be derivative through the
Originating Lender with whom such Participant participates and no Participant
shall have any rights under this Agreement or the other Loan Documents or any
direct rights as to the other Lenders, Agent, Borrower, the Collections, the
Collateral, or otherwise in respect of the Obligations. No Participant shall
have the right to participate directly in the making of decisions by the Lenders
among themselves. The provisions of this SECTION 14.1(E) are solely for the
benefit of the Lender Group, and Borrower shall not have any rights as a third
party beneficiary of such provisions.
(f) In connection with any such assignment or participation or
proposed assignment or participation, a Lender may disclose all documents and
information which it now or hereafter may have relating to Borrower or
Borrower's business.
(g) Any other provision in this Agreement notwithstanding, any
Lender may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement in favor of any
Federal Reserve Bank in accordance with Regulation A of the Federal Reserve Bank
or U.S. Treasury Regulation 31 CFR ss.203.14, and such Federal Reserve Bank may
enforce such pledge or security interest in any manner permitted under
applicable law.
(h) Borrower shall maintain at its address set forth in SECTION 12 a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of Lenders, and the Commitment of, and
certain of the Obligations owing to, each Lender pursuant to the terms hereof
from time to time (the "REGISTER"), PROVIDED that, in the case of an assignment
or delegation to an Eligible Affiliate Transferee, such Eligible Affiliate
Transferee shall maintain a comparable Register on behalf of Borrower. The
entries in the Register shall be conclusive, and Borrower, Agent and Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. Any Obligation (and the registered note, if any,
evidencing the same) may be assigned or delegated in whole or in part only by
registration of such assignment on the Register (and each registered note shall
expressly so provide). In the event that any Lender sells participations in any
Obligations, such Lender shall maintain a register on which it enters the name
of all participants in such Obligations held by it (the "PARTICIPANT REGISTER").
Any Obligation (and the registered note, if any, evidencing the same) may be
participated in whole or in part only by registration of such participation on
the Participant Register (and each registered note shall expressly so provide).
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14.2 SUCCESSORS. This Agreement shall bind and inure to the benefit
of the respective successors and assigns of each of the parties; PROVIDED,
HOWEVER, that Borrower may not assign this Agreement or any rights or duties
hereunder without the Lenders' prior written consent and any prohibited
assignment shall be absolutely void AB INITIO. No consent to assignment by the
Lenders shall release Borrower from its Obligations. A Lender may assign this
Agreement and the other Loan Documents and its rights and duties hereunder and
thereunder pursuant to SECTION 14.1 hereof and, except as expressly required
pursuant to SECTION 14.1 hereof, no consent or approval by Borrower is required
in connection with any such assignment.
15. AMENDMENTS; WAIVERS.
15.1 AMENDMENTS AND WAIVERS. No amendment or waiver of any provision
of this Agreement or any other Loan Document, and no consent with respect to any
departure by Borrower therefrom, shall be effective unless the same shall be in
writing and signed by the Required Lenders (or by Agent at the written request
of the Required Lenders) and Borrower and then any such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; PROVIDED, HOWEVER, that no such waiver, amendment, or consent
shall, unless in writing and signed by all of the Lenders affected thereby and
Borrower, do any of the following:
(a) increase or extend any Commitment of any Lender,
(b) postpone or delay any date fixed by this Agreement or any other
Loan Document for any payment of principal, interest, fees, or other amounts due
hereunder or under any other Loan Document,
(c) reduce the principal of, or the rate of interest on, any loan or
other extension of credit hereunder, or reduce any fees or other amounts payable
hereunder or under any other Loan Document,
(d) change the percentage of the Commitments that is required to
take any action hereunder,
(e) amend this Section or any provision of the Agreement providing
for consent or other action by all Lenders,
(f) release Collateral other than as permitted by SECTION 16.12,
(g) change the definition of "Required Lenders",
(h) contractually subordinate any of the Agent's Liens,
(i) release Borrower from any obligation for the payment of money,
or
(j) change the definition of Borrowing Base (or the defined terms
used therein) or the definitions of Subject Accounts, Eligible Subject Accounts,
Purchased Accounts, Eligible Accounts, Maximum Revolver Amount, or change
SECTION 2.1(B), or
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(k) amend or waive any of the provisions of Section 6.14, 7.11, 7.13
or 8.16;
and, PROVIDED FURTHER, HOWEVER, that no amendment, waiver or consent shall,
unless in writing and signed by Agent or Swing Lender, as applicable, affect the
rights or duties of Agent or Swing Lender, as applicable, under this Agreement
or any other Loan Document. The foregoing notwithstanding, any amendment,
modification, waiver, consent, termination, or release of, or with respect to,
any provision of this Agreement or any other Loan Document that relates only to
the relationship of the Lender Group among themselves, and that does not affect
the rights or obligations of Borrower, shall not require consent by or the
agreement of Borrower.
Notwithstanding anything to the contrary contained in this SECTION
15.1, any amendment, modification, supplement or waiver of the Specified
Provisions required by SECTION 7.20(B)(IV) shall be effective when signed by
Agent and Borrower.
15.2 REPLACEMENT OF HOLDOUT LENDER.
(a) If any action to be taken by the Lender Group or Agent hereunder
requires the unanimous consent, authorization, or agreement of all Lenders, and
a Lender ("Holdout Lender") fails to give its consent, authorization, or
agreement, then Agent, upon at least 5 Business Days prior irrevocable notice to
the Holdout Lender, may permanently replace the Holdout Lender with one or more
substitute Lenders (each, a "Replacement Lender"), and the Holdout Lender shall
have no right to refuse to be replaced hereunder. Such notice to replace the
Holdout Lender shall specify an effective date for such replacement, which date
shall not be later than 15 Business Days after the date such notice is given.
(b) Prior to the effective date of such replacement, the Holdout
Lender and each Replacement Lender shall execute and deliver an Assignment and
Acceptance Agreement, subject only to the Holdout Lender being repaid its share
of the outstanding Obligations without any premium or penalty of any kind
whatsoever. If the Holdout Lender shall refuse or fail to execute and deliver
any such Assignment and Acceptance Agreement prior to the effective date of such
replacement, the Holdout Lender shall be deemed to have executed and delivered
such Assignment and Acceptance Agreement. The replacement of any Holdout Lender
shall be made in accordance with the terms of Section 14.1. Until such time as
the Replacement Lenders shall have acquired all of the Obligations, the
Commitments, and the other rights and obligations of the Holdout Lender
hereunder and under the other Loan Documents, the Holdout Lender shall remain
obligated to make the Holdout Lender's Pro Rata Share of Advances.
15.3 NO WAIVERS; CUMULATIVE REMEDIES. No failure by Agent or any
Lender to exercise any right, remedy, or option under this Agreement or any
other Loan Document, or delay by Agent or any Lender in exercising the same,
will operate as a waiver thereof. No waiver by Agent or any Lender will be
effective unless it is in writing, and then only to the extent specifically
stated. No waiver by Agent or any Lender on any occasion shall affect or
diminish Agent's and each Lender's rights thereafter to require strict
performance by Borrower of any provision of this Agreement. Agent's and each
Lender's rights under this Agreement and the other Loan Documents will be
cumulative and not exclusive of any other right or remedy the Agent or any
Lender may have.
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16. AGENT; THE LENDER GROUP.
16.1 APPOINTMENT AND AUTHORIZATION OF AGENT. Each Lender hereby
designates and appoints Foothill as its representative under this Agreement and
the other Transaction Documents and each Lender hereby irrevocably authorizes
Agent to take such action on its behalf under the provisions of this Agreement
and each other Transaction Document and to exercise such powers and perform such
duties as are expressly delegated to Agent by the terms of this Agreement or any
other Transaction Document, together with such powers as are reasonably
incidental thereto. Agent agrees to act as such on the express conditions
contained in this SECTION 16. The provisions of this Section 16 are solely for
the benefit of Agent, and the Lenders, and Borrower shall have no rights as a
third party beneficiary of any of the provisions contained herein. Any provision
to the contrary contained elsewhere in this Agreement or in any other
Transaction Document notwithstanding, Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall Agent have
or be deemed to have any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Transaction Document or otherwise exist
against Agent; it being expressly understood and agreed that the use of the word
"Agent" is for convenience only, that Foothill is merely the representative of
the Lenders, and only has the contractual duties set forth herein. Except as
expressly otherwise provided in this Agreement, Agent shall have and may use its
sole discretion with respect to exercising or refraining from exercising any
discretionary rights or taking or refraining from taking any actions that Agent
expressly is entitled to take or assert under or pursuant to this Agreement and
the other Transaction Documents. Without limiting the generality of the
foregoing, or of any other provision of the Transaction Documents that provides
rights or powers to Agent, Lenders agree that Agent shall have the right to
exercise the following powers as long as this Agreement remains in effect: (a)
maintain, in accordance with its customary business practices, ledgers and
records reflecting the status of the Obligations, the Collateral, the
Collections, and related matters, (b) execute or file any and all financing or
similar statements or notices, amendments, renewals, supplements, documents,
instruments, proofs of claim, notices and other written agreements with respect
to the Transaction Documents, (c) make Advances, for itself or on behalf of
Lenders as provided in the Loan Documents, (d) exclusively receive, apply, and
distribute the Collections as provided in the Loan Documents, (e) open and
maintain such bank accounts and cash management arrangements as Agent deems
necessary and appropriate in accordance with the Loan Documents for the
foregoing purposes with respect to the Collateral and the Collections, (f)
perform, exercise, and enforce any and all other rights and remedies of the
Lender Group with respect to Borrower, the Obligations, the Collateral, the
Collections, or otherwise related to any of same as provided in the Loan
Documents, and (g) incur and pay such Lender Group Expenses as Agent may deem
necessary or appropriate for the performance and fulfillment of its functions
and powers pursuant to the Loan Documents.
16.2 DELEGATION OF DUTIES. Agent may execute any of its duties under
this Agreement or any other Transaction Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects as
long as such selection was made without gross negligence or willful misconduct.
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16.3 LIABILITY OF AGENT. None of the Agent-Related Persons shall (i)
be liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Transaction Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct), or (ii) be responsible in any manner to any of the Lenders for any
recital, statement, representation or warranty made by any Company, or any
officer or director thereof, contained in this Agreement or in any other
Transaction Document, or in any certificate, report, statement or other document
referred to or provided for in, or received by Agent under or in connection
with, this Agreement or any other Transaction Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Transaction Document, or for any failure of Borrower, Servicer, any
Originator or any other party to any Transaction Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Transaction Document, or to inspect the Books or
properties of Borrower or the books or records or properties of any of
Borrower's Affiliates.
16.4 RELIANCE BY AGENT. Agent shall be entitled to rely, and shall
be fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent, or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to Borrower
or counsel to any Lender), independent accountants and other experts selected by
Agent. Agent shall be fully justified in failing or refusing to take any action
under this Agreement or any other Transaction Document unless Agent shall first
receive such advice or concurrence of the Lenders as it deems appropriate and
until such instructions are received, Agent shall act, or refrain from acting,
as it deems advisable. If Agent so requests, it shall first be indemnified to
its reasonable satisfaction by Lenders against any and all liability and expense
that may be incurred by it by reason of taking or continuing to take any such
action. Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement or any other Transaction Document in
accordance with a request or consent of the Lenders and such request and any
action taken or failure to act pursuant thereto shall be binding upon all of the
Lenders.
16.5 NOTICE OF DEFAULT OR EVENT OF DEFAULT. Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default, except with respect to defaults in the payment of principal, interest,
fees, and expenses required to be paid to Agent for the account of the Lenders,
except with respect to Events of Default of which Agent has actual knowledge,
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 promptly will notify
the Lenders of its receipt of any such notice or of any Event of Default of
which Agent has actual knowledge. If any Lender obtains actual knowledge of any
Event of Default, such Lender promptly shall notify the other Lenders and Agent
of such Event of Default. Each Lender shall be solely responsible for giving any
notices to its Participants, if any. Subject to SECTION 16.4, Agent shall take
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such action with respect to such Default or Event of Default as may be requested
by the Required Lenders in accordance with SECTION 9; PROVIDED, HOWEVER, that
unless and until Agent has received any such request, Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable.
16.6 CREDIT DECISION. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by Agent hereinafter taken, including any review of the affairs of Borrower
or Affiliates, shall be deemed to constitute any representation or warranty by
any Agent-Related Person to any Lender. Each Lender represents to Agent that it
has, independently and without reliance upon any Agent-Related Person and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of Borrower and any
other Person (other than the Lender Group) party to a Transaction Document, and
all applicable bank regulatory laws relating to the transactions contemplated
hereby, and made its own decision to enter into this Agreement and to extend
credit to Borrower. Each Lender also represents that it will, independently and
without reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Transaction Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of Borrower and any other Person (other than the Lender Group)
party to a Transaction Document. Except for notices, reports, and other
documents expressly herein required to be furnished to the Lenders by Agent,
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of Borrower and any
other Person party to a Transaction Document that may come into the possession
of any of the Agent-Related Persons.
16.7 COSTS AND EXPENSES; INDEMNIFICATION. Agent may incur and pay
Lender Group Expenses to the extent Agent reasonably deems necessary or
appropriate for the performance and fulfillment of its functions, powers, and
obligations pursuant to the Transaction Documents, including court costs,
reasonable attorneys fees and expenses, costs of collection by outside
collection agencies and auctioneer fees and costs of security guards or
insurance premiums paid to maintain the Collateral, whether or not Borrower is
obligated to reimburse Agent or Lenders for such expenses pursuant to the Loan
Agreement or otherwise. Agent is authorized and directed to deduct and retain
sufficient amounts from Collections received by Agent to reimburse Agent for
such out-of-pocket costs and expenses prior to the distribution of any amounts
to Lenders. In the event Agent is not reimbursed for such costs and expenses
from Collections received by Agent, each Lender hereby agrees that it is and
shall be obligated to pay to or reimburse Agent for the amount of such Lender's
Pro Rata Share thereof. Whether or not the transactions contemplated hereby are
consummated, the Lenders shall indemnify upon demand the Agent-Related Persons
(to the extent not reimbursed by or on behalf of Borrower and without limiting
the obligation of Borrower to do so), according to their Pro Rata Shares, from
and against any and all Indemnified Liabilities; PROVIDED, HOWEVER, that no
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Lender shall be liable for the payment to any Agent-Related Person of any
portion of such Indemnified Liabilities resulting solely from such Person's
gross negligence or willful misconduct nor shall any Lender be liable for the
obligations of any Defaulting Lender in failing to make an Advance or other
extension of credit hereunder. Without limitation of the foregoing, each Lender
shall reimburse Agent upon demand for such Lender's ratable share of any costs
or out-of-pocket expenses (including attorneys fees and expenses) incurred by
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment, or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Transaction Document, or any
document contemplated by or referred to herein, to the extent that Agent is not
reimbursed for such expenses by or on behalf of Borrower. The undertaking in
this Section shall survive the payment of all Obligations hereunder and the
resignation or replacement of Agent.
16.8 AGENT IN INDIVIDUAL CAPACITY. Foothill and its Affiliates may
make loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in, and generally engage in any kind of banking, trust,
financial advisory, underwriting, or other business with Borrower and its
Affiliates and any other Person (other than the Lender Group) party to any
Transaction Documents as though Foothill were not Agent hereunder, and, in each
case, without notice to or consent of the other members of the Lender Group. The
other members of the Lender Group acknowledge that, pursuant to such activities,
Foothill or its Affiliates may receive information regarding Borrower or its
Affiliates and any other Person (other than the Lender Group) party to any
Transaction Documents that is subject to confidentiality obligations in favor of
Borrower or such other Person and that prohibit the disclosure of such
information to the Lenders, and the Lenders acknowledge that, in such
circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver Agent will use its reasonable best efforts to obtain),
Agent shall not be under any obligation to provide such information to them. The
terms "Lender" and "Lenders" include Foothill in its individual capacity.
16.9 SUCCESSOR AGENT. Agent may resign as Agent upon 45 days notice
to the Lenders. If Agent resigns under this Agreement, the Required Lenders
shall appoint a successor Agent for the Lenders. If no successor Agent is
appointed prior to the effective date of the resignation of Agent, Agent may
appoint, after consulting with the Lenders, a successor Agent. If Agent has
materially breached or failed to perform any material provision of this
Agreement or of applicable law, the Required Lenders may agree in writing to
remove and replace Agent with a successor Agent from among the Lenders. In any
such event, upon the acceptance of its appointment as successor Agent hereunder,
such successor Agent shall succeed to all the rights, powers, and duties of the
retiring Agent and the term "Agent" shall mean such successor Agent and the
retiring Agent's appointment, powers, and duties as Agent shall be terminated.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Section 16 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement. If no successor Agent
has accepted appointment as Agent by the date which is 45 days following a
retiring Agent's notice of resignation, the retiring Agent's resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of the
duties of Agent hereunder until such time, if any, as the Lenders appoint a
successor Agent as provided for above.
16.10 LENDER IN INDIVIDUAL CAPACITY. Any Lender and its respective
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with Borrower
and its Affiliates and any other Person (other than the Lender Group) party to
any Transaction Documents as though such Lender were not a Lender hereunder
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without notice to or consent of the other members of the Lender Group. The other
members of the Lender Group acknowledge that, pursuant to such activities, such
Lender and its respective Affiliates may receive information regarding Borrower
or its Affiliates and any other Person (other than the Lender Group) party to
any Transaction Documents that is subject to confidentiality obligations in
favor of Borrower or such other Person and that prohibit the disclosure of such
information to the Lenders, and the Lenders acknowledge that, in such
circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver such Lender will use its reasonable best efforts to
obtain), such Lender not shall be under any obligation to provide such
information to them. With respect to the Swing Loans and Agent Advances, Swing
Lender shall have the same rights and powers under this Agreement as any other
Lender and may exercise the same as though it were not the sub-agent of Agent.
16.11 WITHHOLDING TAXES.
(a) If any Lender is a "foreign corporation, partnership or trust"
within the meaning of the IRC and such Lender claims exemption from, or a
reduction of, U.S. withholding tax under Sections 1441 or 1442 of the IRC, such
Lender agrees with and in favor of Agent and Borrower, to deliver to Agent and
Borrower:
(i) if such Lender claims an exemption from withholding tax pursuant
to its portfolio interest exception, (A) a statement of the Lender, signed under
penalty of perjury, that it is not a (I) a "bank" as described in Section
881(c)(3)(A) of the IRC, (II) a 10% shareholder (within the meaning of Section
881(c)(3)(B) of the IRC), or (III) a controlled foreign corporation described in
Section 881(c)(3)(C) of the IRC, and (B) a properly completed IRS Form W-8BEN,
before the first payment of any interest under this Agreement and at any other
time reasonably requested by Agent or Borrower;
(ii) if such Lender claims an exemption from, or a reduction of,
withholding tax under a United States tax treaty, properly completed IRS Form
W-8BEN before the first payment of any interest under this Agreement and at any
other time reasonably requested by Agent or Borrower;
(iii) if such Lender claims that interest paid under this Agreement
is exempt from United States withholding tax because it is effectively connected
with a United States trade or business of such Lender, two properly completed
and executed copies of IRS Form W-8ECI before the first payment of any interest
is due under this Agreement and at any other time reasonably requested by Agent
or Borrower;
(iv) such other form or forms as may be required under the IRC or
other laws of the United States as a condition to exemption from, or reduction
of, United States withholding tax.
Such Lender agrees promptly to notify Agent and Borrower of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.
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(b) If any Lender claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form W-8BEN
and such Lender sells, assigns, grants a participation in, or otherwise
transfers all or part of the Obligations of Borrower to such Lender, such Lender
agrees to notify Agent of the percentage amount in which it is no longer the
beneficial owner of Obligations of Borrower to such Lender. To the extent of
such percentage amount, Agent will treat such Lender's IRS Form W-8BEN as no
longer valid.
(c) If any Lender is entitled to a reduction in the applicable
withholding tax, Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable withholding tax after taking into account
such reduction. If the forms or other documentation required by subsection (a)
of this Section are not delivered to Agent, then Agent may withhold from any
interest payment to such Lender not providing such forms or other documentation
an amount equivalent to the applicable withholding tax.
(d) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that Agent did not properly
withhold tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered, was not properly executed, or because such
Lender failed to notify Agent of a change in circumstances which rendered the
exemption from, or reduction of, withholding tax ineffective, or for any other
reason) such Lender shall indemnify and hold Agent harmless for all amounts
paid, directly or indirectly, by Agent as tax or otherwise, including penalties
and interest, and including any taxes imposed by any jurisdiction on the amounts
payable to Agent under this Section, together with all costs and expenses
(including attorneys fees and expenses). The obligation of the Lenders under
this subsection shall survive the payment of all Obligations and the resignation
or replacement of Agent.
(e) All payments made by Borrower hereunder or under any note will
be made without setoff, counterclaim, or other defense, except as required by
applicable law other than for Taxes (as defined below). All such payments will
be made free and clear of, and without deduction or withholding for, any present
or future taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction (other than the
United States) or by any political subdivision or taxing authority thereof or
therein (other than of the United States) with respect to such payments (but
excluding, any tax imposed by any jurisdiction or by any political subdivision
or taxing authority thereof or therein (i) measured by or based on the net
income or net profits of a Lender, or (ii) to the extent that such tax results
from a change in the circumstances of the Lender, including a change in the
residence, place of organization, or principal place of business of the Lender,
or a change in the branch or lending office of the Lender participating in the
transactions set forth herein) and all interest, penalties or similar
liabilities with respect thereto (all such non-excluded taxes, levies, imposts,
duties, fees, assessments or other charges being referred to collectively as
"Taxes"). If any Taxes are so levied or imposed, Borrower agrees to pay the full
amount of such Taxes, and such additional amounts as may be necessary so that
every payment of all amounts due under this Agreement or under any note,
including any amount paid pursuant to this Section 16.11(e) after withholding or
deduction for or on account of any Taxes, will not be less than the amount
provided for herein; PROVIDED, HOWEVER, that Borrower shall not be required to
increase any such amounts payable to Agent or any Lender (i) that is not
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organized under the laws of the United States, if such Person fails to comply
with the other requirements of this Section 16.11, or (ii) if the increase in
such amount payable results from Agent's or such Lender's own willful misconduct
or gross negligence. Borrower will furnish to Agent as promptly as possible
after the date the payment of any Taxes is due pursuant to applicable law
certified copies of tax receipts evidencing such payment by Borrower.
16.12 COLLATERAL MATTERS.
(a) The Lenders hereby irrevocably authorize Agent, at its option
and in its sole discretion, to release any Lien on any Collateral (i) upon the
termination of the Commitments and payment and satisfaction in full by Borrower
of all Obligations, (ii) constituting property being sold or disposed of if a
release is required or desirable in connection therewith and if Borrower
certifies to Agent that the sale or disposition is permitted under SECTION 7.4
of this Agreement or the other Loan Documents (and Agent may rely conclusively
on any such certificate, without further inquiry), (iii) constituting property
in which Borrower owned no interest at the time the security interest was
granted or at any time thereafter, or (iv) constituting property leased to
Borrower under a lease that has expired or is terminated in a transaction
permitted under this Agreement. Except as provided above, Agent will not execute
and deliver a release of any Lien on any Collateral without the prior written
authorization of (y) if the release is of all or substantially all of the
Collateral, all of the Lenders, or (z) otherwise, the Required Lenders. Upon
request by Agent or Borrower at any time, the Lenders will confirm in writing
Agent's authority to release any such Liens on particular types or items of
Collateral pursuant to this SECTION 16.12; PROVIDED, HOWEVER, that (1) Agent
shall not be required to execute any document necessary to evidence such release
on terms that, in Agent's opinion, would expose Agent to liability or create any
obligation or entail any consequence other than the release of such Lien without
recourse, representation, or warranty, and (2) such release shall not in any
manner discharge, affect, or impair the Obligations or any Liens (other than
those expressly being released) upon (or obligations of Borrower in respect of)
all interests retained by Borrower, including, the proceeds of any sale, all of
which shall continue to constitute part of the Collateral.
(b) Agent shall have no obligation whatsoever to any of the Lenders
to assure that the Collateral exists or is owned by Borrower or is cared for,
protected, or insured or has been encumbered, or that the Agent's Liens have
been properly or sufficiently or lawfully created, perfected, protected, or
enforced or are entitled to any particular priority, or to exercise at all or in
any particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to Agent pursuant to any of the Loan Documents, it being understood
and agreed that in respect of the Collateral, or any act, omission, or event
related thereto, subject to the terms and conditions contained herein, Agent may
act in any manner it may deem appropriate, in its sole discretion given Agent's
own interest in the Collateral in its capacity as one of the Lenders and that
Agent shall have no other duty or liability whatsoever to any Lender as to any
of the foregoing, except as otherwise provided herein.
16.13 RESTRICTIONS ON ACTIONS BY LENDERS; SHARING OF PAYMENTS.
(a) Each of the Lenders agrees that it shall not, without the
express consent of Agent, and that it shall, to the extent it is lawfully
entitled to do so, upon the request of Agent, set off against the Obligations,
any amounts owing by such Lender to Borrower or any deposit accounts of Borrower
now or hereafter maintained with such Lender. Each of the Lenders further agrees
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that it shall not, unless specifically requested to do so by Agent, take or
cause to be taken any action, including, the commencement of any legal or
equitable proceedings, to foreclose any Lien on, or otherwise enforce any
security interest in, any of the Collateral the purpose of which is, or could
be, to give such Lender any preference or priority against the other Lenders
with respect to the Collateral.
(b) If, at any time or times any Lender shall receive (i) by
payment, foreclosure, setoff, or otherwise, any proceeds of Collateral or any
payments with respect to the Obligations arising under, or relating to, this
Agreement or the other Loan Documents, except for any such proceeds or payments
received by such Lender from Agent pursuant to the terms of this Agreement, or
(ii) payments from Agent in excess of such Lender's ratable portion of all such
distributions by Agent, such Lender promptly shall (1) turn the same over to
Agent, in kind, and with such endorsements as may be required to negotiate the
same to Agent, or in immediately available funds, as applicable, for the account
of all of the Lenders and for application to the Obligations in accordance with
the applicable provisions of this Agreement, or (2) purchase, without recourse
or warranty, an undivided interest and participation in the Obligations owed to
the other Lenders so that such excess payment received shall be applied ratably
as among the Lenders in accordance with their Pro Rata Shares; PROVIDED,
HOWEVER, that if all or part of such excess payment received by the purchasing
party is thereafter recovered from it, those purchases of participations shall
be rescinded in whole or in part, as applicable, and the applicable portion of
the purchase price paid therefor shall be returned to such purchasing party, but
without interest except to the extent that such purchasing party is required to
pay interest in connection with the recovery of the excess payment.
16.14 AGENCY FOR PERFECTION. Agent hereby appoints each other Lender
as its agent (and each Lender hereby accepts such appointment) for the purpose
of perfecting the Agent's Liens in assets which, in accordance with Article 9 of
the UCC can be perfected only by possession. Should any Lender obtain possession
of any such Collateral, such Lender shall notify Agent thereof, and, promptly
upon Agent's request therefor shall deliver such Collateral to Agent or in
accordance with Agent's instructions.
16.15 PAYMENTS BY AGENT TO THE LENDERS. All payments to be made by
Agent to the Lenders shall be made by bank wire transfer or internal transfer of
immediately available funds pursuant to such wire transfer instructions as each
party may designate for itself by written notice to Agent. Concurrently with
each such payment, Agent shall identify whether such payment (or any portion
thereof) represents principal, premium, or interest of the Obligations.
16.16 CONCERNING THE COLLATERAL AND RELATED LOAN DOCUMENTS. Each
member of the Lender Group authorizes and directs Agent to enter into this
Agreement and the other Loan Documents relating to the Collateral, for the
benefit of the Lender Group. Each member of the Lender Group agrees that any
action taken by Agent in accordance with the terms of this Agreement or the
other Loan Documents relating to the Collateral and the exercise by Agent of its
powers set forth therein or herein, together with such other powers that are
reasonably incidental thereto, shall be binding upon all of the Lenders.
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16.17 FIELD AUDITS AND EXAMINATION REPORTS; CONFIDENTIALITY;
DISCLAIMERS BY LENDERS; OTHER REPORTS AND INFORMATION. By becoming a party to
this Agreement, each Lender:
(a) is deemed to have requested that Agent furnish such Lender,
promptly after it becomes available, a copy of each field audit or examination
report (each a "Report" and collectively, "Reports") prepared by Agent, and
Agent shall so furnish each Lender with such Reports,
(b) expressly agrees and acknowledges that Agent does not (i) make
any representation or warranty as to the accuracy of any Report, and (ii) shall
not be liable for any information contained in any Report,
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that Agent or other party performing any
audit or examination will inspect only specific information regarding Borrower
and will rely significantly upon the Books, as well as on representations of
Borrower's personnel,
(d) agrees to keep all Reports and other material, non-public
information regarding Borrower and its operations, assets, and existing and
contemplated business plans in a confidential manner; it being understood and
agreed by Borrower that in any event such Lender may make disclosures (a) to
counsel for and other advisors, accountants, and auditors to such Lender, (b)
reasonably required by any bona fide potential or actual Assignee or Participant
in connection with any contemplated or actual assignment or transfer by such
Lender of an interest herein or any participation interest in such Lender's
rights hereunder, (c) of information that has become public by disclosures made
by Persons other than such Lender, its Affiliates, assignees, transferees, or
Participants, or (d) as required or requested by any court, governmental or
administrative agency, pursuant to any subpoena or other legal process, or by
any law, statute, regulation, or court order; provided, however, that, unless
prohibited by applicable law, statute, regulation, or court order, such Lender
shall notify Borrower of any request by any court, governmental or
administrative agency, or pursuant to any subpoena or other legal process for
disclosure of any such non-public material information concurrent with, or where
practicable, prior to the disclosure thereof, and
(e) without limiting the generality of any other indemnification
provision contained in this Agreement, agrees: (i) to hold Agent and any other
Lender preparing a Report harmless from any action the indemnifying Lender may
take or conclusion the indemnifying Lender may reach or draw from any Report in
connection with any loans or other credit accommodations that the indemnifying
Lender has made or may make to Borrower, or the indemnifying Lender's
participation in, or the indemnifying Lender's purchase of, a loan or loans of
Borrower, and (ii) to pay and protect, and indemnify, defend and hold Agent, and
any such other Lender preparing a Report harmless from and against, the claims,
actions, proceedings, damages, costs, expenses, and other amounts (including,
attorneys fees and costs) incurred by Agent and any such other Lender preparing
a Report as the direct or indirect result of any third parties who might obtain
all or part of any Report through the indemnifying Lender.
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In addition to the foregoing: (x) any Lender may from time to time
request of Agent in writing that Agent provide to such Lender a copy of any
report or document provided by Borrower to Agent that has not been
contemporaneously provided by Borrower to such Lender, and, upon receipt of such
request, Agent promptly shall provide a copy of same to such Lender, (y) to the
extent that Agent is entitled, under any provision of the Loan Documents, to
request additional reports or information from Borrower, any Lender may, from
time to time, reasonably request Agent to exercise such right as specified in
such Lender's notice to Agent, whereupon Agent promptly shall request of
Borrower the additional reports or information reasonably specified by such
Lender, and, upon receipt thereof from Borrower, Agent promptly shall provide a
copy of same to such Lender, and (z) any time that Agent renders to Borrower a
statement regarding the Loan Account, Agent shall send a copy of such statement
to each Lender.
16.18 SEVERAL OBLIGATIONS; NO LIABILITY. Notwithstanding that
certain of the Transaction Documents now or hereafter may have been or will be
executed only by or in favor of Agent in its capacity as such, and not by or in
favor of the Lenders, any and all obligations on the part of Agent (if any) to
make any credit available hereunder shall constitute the several (and not joint)
obligations of the respective Lenders on a ratable basis, according to their
respective Commitments, to make an amount of such credit not to exceed, in
principal amount, at any one time outstanding, the amount of their respective
Commitments. Nothing contained herein shall confer upon any Lender any interest
in, or subject any Lender to any liability for, or in respect of, the business,
assets, profits, losses, or liabilities of any other Lender. Each Lender shall
be solely responsible for notifying its Participants of any matters relating to
the Transaction Documents to the extent any such notice may be required, and no
Lender shall have any obligation, duty, or liability to any Participant of any
other Lender. Except as provided in SECTION 16.7, no member of the Lender Group
shall have any liability for the acts or any other member of the Lender Group.
No Lender shall be responsible to Borrower or any other Person for any failure
by any other Lender to fulfill its obligations to make credit available
hereunder, nor to advance for it or on its behalf in connection with its
Commitment, nor to take any other action on its behalf hereunder or in
connection with the financing contemplated herein.
17. GENERAL PROVISIONS.
17.1 EFFECTIVENESS. This Agreement shall be binding and deemed
effective when executed by Borrower, Agent, and each Lender whose signature is
provided for on the signature pages hereof.
17.2 SECTION HEADINGS. Headings and numbers have been set forth
herein for convenience only. Unless the contrary is compelled by the context,
everything contained in each Section applies equally to this entire Agreement.
17.3 INTERPRETATION. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed against the Lender Group or Borrower,
whether under any rule of construction or otherwise. On the contrary, this
Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.
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17.4 SEVERABILITY OF PROVISIONS. Each provision of this Agreement
shall be severable from every other provision of this Agreement for the purpose
of determining the legal enforceability of any specific provision.
17.5 AMENDMENTS IN WRITING. This Agreement only can be amended by a
writing signed by Agent (on behalf of the requisite Lenders) and Borrower.
17.6 COUNTERPARTS; TELEFACSIMILE EXECUTION. This Agreement may be
executed in any number of counterparts and by different parties on separate
counterparts, each of which, when executed and delivered, shall be deemed to be
an original, and all of which, when taken together, shall constitute but one and
the same Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile shall be equally as effective as delivery of an original executed
counterpart of this Agreement. Any party delivering an executed counterpart of
this Agreement by telefacsimile also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement. The foregoing shall apply to each other Loan Document mutatis
mutandis.
17.7 REVIVAL AND REINSTATEMENT OF OBLIGATIONS. If the incurrence or
payment of the Obligations by Borrower or the transfer to the Lender Group of
any property should for any reason subsequently be declared to be void or
voidable under any state or federal law relating to creditors' rights, including
provisions of the Bankruptcy Code relating to fraudulent conveyances,
preferences, or other voidable or recoverable payments of money or transfers of
property (collectively, a "Voidable Transfer"), and if the Lender Group is
required to repay or restore, in whole or in part, any such Voidable Transfer,
or elects to do so upon the reasonable advice of its counsel, then, as to any
such Voidable Transfer, or the amount thereof that the Lender Group is required
or elects to repay or restore, and as to all reasonable costs, expenses, and
attorneys fees of the Lender Group related thereto, the liability of Borrower
automatically shall be revived, reinstated, and restored and shall exist as
though such Voidable Transfer had never been made.
17.8 INTEGRATION. This Agreement, together with the other
Transaction Documents, reflects the entire understanding of the parties with
respect to the transactions contemplated hereby and shall not be contradicted or
qualified by any other agreement, oral or written, before the date hereof.
[Signature page to follow.]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered as of the date first above written.
XXXXXX XXXXXXX FUNDING LLC,
a Delaware limited liability company
By:
------------------------------------------
Title:
FOOTHILL CAPITAL CORPORATION,
a California corporation, as Agent and as a Lender
By:
------------------------------------------
Title:
ABLECO FINANCE LLC,
a Delaware limited liability company, as a Lender
By:
-----------------------------------------
Title:
-88-
TABLE OF CONTENTS
PAGE
1. DEFINITIONS AND CONSTRUCTION...............................................1
1.1 Definitions...................................................1
1.2 Accounting Terms.............................................26
1.3 Code.........................................................26
1.4 Construction.................................................26
1.5 Schedules and Exhibits.......................................26
2. LOAN AND TERMS OF PAYMENT.................................................26
2.1 Revolver Advances............................................26
2.2 [Intentionally Omitted]......................................27
2.3 Borrowing Procedures and Settlements.........................27
2.4 Payments.....................................................34
2.5 Overadvances.................................................36
2.6 Interest Rates: Rates, Payments, and Calculations...........36
2.7 Cash Management..............................................37
2.8 Crediting Payments...........................................38
2.9 Designated Account...........................................39
2.10 Maintenance of Loan Account; Statements of Obligations.......39
2.11 Fees.........................................................39
2.12 Capital Requirements.........................................40
3. CONDITIONS; TERM OF AGREEMENT.............................................41
3.1 Conditions Precedent to the Initial Extension of Credit......41
3.2 Conditions Subsequent to the Initial Extension of Credit.....44
3.3 Conditions Precedent to all Extensions of Credit.............44
3.4 Term.........................................................45
3.5 Effect of Termination........................................45
3.6 Early Termination by Borrower................................45
4. CREATION OF SECURITY INTEREST.............................................46
4.1 Grant of Security Interest...................................46
4.2 Negotiable Collateral........................................46
4.3 Collection of Accounts, General Intangibles,
and Negotiable Collateral..............................46
4.4 Delivery of Additional Documentation Required................46
4.5 Power of Attorney............................................46
4.6 Right to Inspect.............................................47
4.7 Control Agreements...........................................47
5. REPRESENTATIONS AND WARRANTIES............................................47
5.1 No Encumbrances..............................................48
5.2 Eligible Accounts............................................48
5.3 Location of Chief Executive Office; FEIN.....................48
5.4 Due Organization and Qualification; Subsidiaries.............48
5.5 Due Authorization; No Conflict...............................48
5.6 Litigation...................................................49
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5.7 No Material Adverse Change...................................49
5.8 Fraudulent Transfer..........................................49
5.9 Employee Benefits............................................50
5.10 Brokerage Fees...............................................50
5.11 Property.....................................................50
5.12 Obligations..................................................50
5.13 Business.....................................................50
5.14 DDAs.........................................................50
5.15 Credit and Collection Policies...............................50
5.16 Complete Disclosure..........................................50
6. AFFIRMATIVE COVENANTS.....................................................51
6.1 Accounting System............................................51
6.2 Collateral Reporting.........................................51
6.3 Financial Statements, Reports, Certificates..................52
6.4 Servicer Reports.............................................54
6.5 Return.......................................................55
6.6 Separate Existence...........................................55
6.7 Taxes........................................................57
6.8 [Intentionally Omitted]......................................57
6.9 Compliance with Laws.........................................57
6.10 Leases.......................................................57
6.11 Brokerage Commissions........................................57
6.12 Existence....................................................57
6.13 Disclosure Updates...........................................57
6.14 Purchases....................................................58
7. NEGATIVE COVENANTS........................................................58
7.1 Indebtedness.................................................58
7.2 Liens........................................................58
7.3 Restrictions on Changes......................................58
7.4 Disposal of Assets...........................................59
7.5 Change Name..................................................59
7.6 Guarantee....................................................59
7.7 Nature of Business...........................................59
7.8 Prepayments and Amendments...................................59
7.9 Change of Control............................................59
7.10 Compromise of Accounts.......................................59
7.11 Distributions................................................59
7.12 Accounting Methods...........................................60
7.13 Investments..................................................60
7.14 Transactions with Affiliates.................................60
7.15 Suspension...................................................60
7.16 [Intentionally Omitted]......................................60
7.17 Use of Proceeds..............................................60
7.18 Change in Location of Chief Executive Office.................60
7.19 Securities Accounts..........................................61
7.20 Financial Covenants..........................................61
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8. EVENTS OF DEFAULT.........................................................64
9. THE LENDER GROUP'S RIGHTS AND REMEDIES....................................66
9.1 Rights and Remedies..........................................66
9.2 Remedies Cumulative..........................................68
10. TAXES AND EXPENSES........................................................69
11. WAIVERS; INDEMNIFICATION..................................................69
11.1 Demand; Protest; etc.........................................69
11.2 The Lender Group's Liability for Collateral..................69
11.3 Indemnification..............................................69
12. NOTICES...................................................................70
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER................................71
14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS................................72
14.1 Assignments and Participations...............................72
14.2 Successors...................................................75
15. AMENDMENTS; WAIVERS.......................................................75
15.1 Amendments and Waivers.......................................75
15.2 Replacement of Holdout Lender................................76
15.3 No Waivers; Cumulative Remedies..............................76
16. AGENT; THE LENDER GROUP...................................................77
16.1 Appointment and Authorization of Agent.......................77
16.2 Delegation of Duties.........................................77
16.3 Liability of Agent...........................................78
16.4 Reliance by Agent............................................78
16.5 Notice of Default or Event of Default........................78
16.6 Credit Decision..............................................79
16.7 Costs and Expenses; Indemnification..........................79
16.8 Agent in Individual Capacity.................................80
16.9 Successor Agent..............................................80
16.10 Lender in Individual Capacity................................80
16.11 Withholding Taxes............................................81
16.12 Collateral Matters...........................................83
16.13 Restrictions on Actions by Lenders; Sharing of Payments......83
16.14 Agency for Perfection........................................84
16.15 Payments by Agent to the Lenders.............................84
16.16 Concerning the Collateral and Related Loan Documents.........84
16.17 Field Audits and Examination Reports; Confidentiality;
Disclaimers by Lenders; Other Reports and Information..85
16.18 Several Obligations; No Liability............................86
17. GENERAL PROVISIONS........................................................86
17.1 Effectiveness................................................86
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17.2 Section Headings.............................................86
17.3 Interpretation...............................................86
17.4 Severability of Provisions...................................87
17.5 Amendments in Writing........................................87
17.6 Counterparts; Telefacsimile Execution........................87
17.7 Revival and Reinstatement of Obligations.....................87
17.8 Integration..................................................87
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EXHIBITS AND SCHEDULES
Exhibit A-1 Form of Assignment and Acceptance
Exhibit B-1 Form of Borrowing Base Certificate
Exhibit C-1 Form of Compliance Certificate
Schedule C-1 Commitments
Schedule C-2 Credit and Collection Policies
Schedule S-1 Sale/Leaseback Transactions
Schedule 2.8(a) Cash Management Banks
Schedule 5.3 Chief Executive Office; FEIN
Schedule 5.4(b) Capitalization of Borrower
Schedule 5.6 Litigation
Schedule 5.7 Material Adverse Change
Schedule 5.14 Demand Deposit Accounts
Schedule C-1
COMMITMENTS
------------------------------------- ------------------------------------------
LENDER COMMITMENT
------------------------------------- ------------------------------------------
------------------------------------- ------------------------------------------
Foothill Capital Corporation $30,000,000
------------------------------------- ------------------------------------------
------------------------------------- ------------------------------------------
Ableco Finance LLC $10,000,000
------------------------------------- ------------------------------------------
------------------------------------- ------------------------------------------
All Lenders $40,000,000
------------------------------------- ------------------------------------------
EXHIBIT A-1
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT ("Assignment Agreement") is
entered into as of ________________ between ("Assignor") and
_____________________________ ("Assignee"). Reference is made to the Agreement
described in ITEM 2 of ANNEX I annexed hereto (the "Loan Agreement").
Capitalized terms used herein and not otherwise defined shall have the meanings
ascribed to them in the Loan Agreement.
1. In accordance with the terms and conditions of Section 14 of the
Loan Agreement, the Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, that interest in and to
the Assignor's rights and obligations under the Loan Documents as of the date
hereof with respect to the Obligations owing to the Assignor, and Assignor's
portion of the Commitments, as specified in ITEM 4.B and ITEM 4.C of ANNEX I.
After giving effect to such sale and assignments, the Assignee's portion of the
Commitments will be as set forth in ITEM 4.B of Annex I. After giving effect to
such sale and assignment, the Assignor's amount and portion of the Commitments
will be as set forth in ITEM 4.D and ITEM 4.E of Annex I.
2. The Assignor: (a) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (b) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Transaction
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Transaction Documents or any other instrument or
document furnished pursuant thereto; and (c) makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
Borrower, Servicer, Parent, any Originator or any other Company or the
performance or observance by Borrower, Servicer, Parent or any Originator of any
of their respective obligations under the Transaction Documents or any other
instrument or document furnished pursuant thereto.
3. The Assignee: (a) confirms that it has received copies of the Loan
Agreement and the other Transaction Documents, together with copies of the
financial statements referred to therein and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment Agreement; (b) agrees that it will,
independently and without reliance, based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Transaction Documents; (c) confirms
that it is eligible as an assignee under the terms of the Loan Agreement; (d)
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under the Transaction Documents as are delegated to
Agent by the terms thereof, together with such powers as are reasonably
incidental thereto; (e) agrees that it will perform in accordance with their
terms all of the obligations which by the terms of the Transaction Documents are
required to be performed by it as a Lender [and (f) attaches the forms
prescribed by the Internal Revenue Service of the United States certifying as to
the Assignee's status for purposes of determining exemption from United States
withholding taxes with respect to all payments to be made to the Assignee under
the Loan Agreement or such other documents as are necessary to indicate that all
such payments are subject to such rates at a rate reduced by an applicable tax
treaty.]
4. Following the execution of this Assignment Agreement by the
Assignor and Assignee, it will be delivered by the Assignor to the Agent for
recording by the Agent. The effective date of this Assignment (the "Settlement
Date") shall be the later of (a) (i) the date of the execution hereof by the
Assignor and the Assignee, (ii) if required pursuant to Section 14 of the Loan
Agreement, the payment by Assignor or Assignee to Agent for Agent's sole and
separate account of a processing fee in the amount of $5,000, and (iii) the
receipt of any required consent of the Agent, and (b) the date specified in ITEM
5 of ANNEX I.
5. Upon recording by the Agent, as of the Settlement Date (a) the
Assignee shall be a party to the Loan Agreement and, to the extent of the
interest assigned pursuant to this Assignment Agreement, have the rights and
obligations of a Lender thereunder and under the other Transaction Documents,
and (b) the Assignor shall, to the extent of the interest assigned pursuant to
this Assignment Agreement, relinquish its rights and be released from its
obligations under the Loan Agreement and the other Transaction Documents.
6. Upon recording by the Agent, from and after the Settlement Date,
the Agent shall make all payments under the Loan Agreement and the other
Transaction Documents in respect of the interest assigned hereby (including,
without limitation, all payments of principal, interest and fees (if applicable)
with respect thereto) to the Assignee. Upon the Settlement Date, the Assignee
shall pay to the Assignor the Assigned Share (as set forth in ITEM 4.B of Annex
I) of the principal amount of any outstanding Advances under the Loan Agreement.
The Assignor and Assignee shall make all appropriate adjustments in payments
under the Loan Agreement and the other Transaction Documents for periods prior
to the Settlement Date directly between themselves on the Settlement Date.
7. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
[Remainder of page left intentionally blank.]
-2-
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
Agreement and Annex I hereto to be executed by their respective officers
thereunto duly authorized, as of the first date above written.
[NAME OF ASSIGNOR]
as Assignor
By:
----------------------------------
Title:
-------------------------------
[NAME OF ASSIGNEE]
as Assignee
By:
----------------------------------
Title:
-------------------------------
ACCEPTED THIS ____ DAY OF
---------------
FOOTHILL CAPITAL CORPORATION
AS AGENT
By:
----------------------------------------------------
Title:
-------------------------------------------------
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ANNEX FOR ASSIGNMENT AND ACCEPTANCE
ANNEX I
1. Borrower: Xxxxxx Xxxxxxx Funding LLC, a Delaware limited liability company
2. Name and Date of Loan Agreement:
Loan and Security Agreement, dated as of August
15, 2002, among Borrower, the lenders signatory
thereto as the Lenders, and Foothill Capital
Corporation, a California corporation, as the
arranger and administrative agent for the
Lenders.
3. Date of Assignment Agreement: ---------------------
4. Amounts:
a. Assignor's Commitment $ --------------------
b. Assigned Share of Commitment % ----------------------
c. Assigned Amount of Commitment $ --------------------
d. Resulting Amount of Assignor's Commitment after giving effect to the
Assignment to Assignee
$ --------------------
e. Assignor's Resulting Share of Commitment after giving effect to the
Assignment to Assignee
% ----------------------
5. Settlement Date: ---------------------
6. Notice and Payment Instructions, etc.
Assignee: Assignor:
7. Agreed and Accepted:
[ASSIGNOR] [ASSIGNEE]
By: By:
------------------------------ -----------------------------
Title: Title:
--------------------------- ----------------------------
-4-
Accepted:
FOOTHILL CAPITAL CORPORATION, as Agent
By:
-----------------------------------------------
Title:
--------------------------------------------
-5-
9268462.4
EXHIBIT B-1
FORM OF BORROWING BASE CERTIFICATE
Foothill Capital Corporation, as Agent
under the below referenced Loan Agreement
Xxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
The undersigned, the [chief financial officer] of XXXXXX
XXXXXXX FUNDING LLC, a Delaware limited liability
company ("Borrower"), pursuant to SECTION 6.2(F) of that certain Loan and
Security Agreement, dated as of August 15, 2002 ( the "Loan Agreement"), entered
into among Borrower, the lenders signatory thereto (the "Lenders"), and Foothill
Capital Corporation, a California corporation, as the arranger and
administrative agent for the Lenders ("Agent"), hereby certifies to Agent that
the following items, calculated in accordance with the terms and definitions set
forth in the Loan Agreement for such items are true and correct, and that
Borrower is in compliance with and, after giving effect to any currently
requested Loans, will be in compliance with the terms, conditions, and
provisions of the Loan Agreement.
All initially capitalized terms used in this Borrowing Base
Certificate have the meanings set forth in the Loan
Agreement unless specifically defined herein.
Effective Date of Calculation:
--------------------------------------------
A. BORROWING BASE CALCULATION
1. Accounts:
a. (1) Amount of Eligible Accounts (as detailed on
SCHEDULE A.1 attached hereto and incorporated herein by
this reference):
$------------
(2) Amount, if any, of the Dilution Reserve:
$------------
(3) Net Eligible Accounts
(ITEM A(1) MINUS ITEM A(2)): $____________
(4) Advance rate against Net Eligible Accounts (from
SECTION 2.1(A)(X)(I) of the Loan Agreement):
______85%___
ITEM A(3) TIMES ITEM A(4) = $____________
-1-
b. Borrower's Collections with respect to Accounts for the
immediately preceding 30-day period:
$------------
THE LESSER OF ITEMS A AND B = $____________
2. Reserves established by Agent under SECTION 2.1(B) of the Loan
Agreement $____________
ITEM 1 MINUS ITEM 2 = $____________
B. AVAILABILITY CALCULATION
1. Maximum Revolver Amount $40,000,000
2. Borrowing Base (from Section A) $____________
3. Availability
a. Permitted Advances
(THE LESSER OF ITEM 1 AND ITEM 2): $____________
b. Aggregate amount of outstanding Advances:
$------------
ITEM A MINUS ITEM B = $____________
[Remainder of page intentionally left blank.]
-2-
The undersigned hereby certifies that all of the foregoing is true
and correct as of the effective date of the calculations set forth above and
that such calculations have been made in accordance with the requirements of the
Loan Agreement.
XXXXXX XXXXXXX FUNDING LLC,
a Delaware limited liability company,
as Borrower
By:
------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
-3-
SCHEDULE A.1
(ELIGIBLE ACCOUNTS)
CONTINUED ON NEXT PAGE
-4-
EXHIBIT C-1
(Form of Compliance Certificate - Borrower)
[on Xxxxxx Xxxxxxx'x letterhead]
To: Foothill Capital Corporation, as Agent
under the below-referenced Loan Agreement
Xxx Xxxxxx Xxxxx
00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Business Finance Division Manager
Re: Compliance Certificate dated ______________
Ladies and Gentlemen:
Reference is made to that certain Loan and Security Agreement, dated
as of August 15, 2002 (the "LOAN Agreement") among Xxxxxx Xxxxxxx Funding LLC, a
Delaware limited liability company ("BORROWER"), the lenders signatory thereto
(the "LENDERS"), and Foothill Capital Corporation, a California corporation, as
the arranger and administrative agent for the Lenders ("AGENT"). Capitalized
terms used in this Compliance Certificate have the meanings set forth in the
Loan Agreement unless specifically defined herein.
Pursuant to SECTION 6.3 of the Loan Agreement, the undersigned
officer of Borrower hereby certifies that:
1. The financial information of Borrower furnished in Schedule 1
attached hereto, has been prepared in accordance with GAAP (except for year-end
adjustments and the lack of footnotes, in the case of financial statements
delivered under Section 6.3(a) of the Loan Agreement) and fairly presents the
financial condition of Borrower as at such date.
2. Such officer has reviewed the terms of the Loan Agreement and has
made, or caused to be made under his/her supervision, a review in reasonable
detail of the transactions and condition of Borrower during the accounting
period covered by the financial statements delivered pursuant to Section 6.3 of
the Loan Agreement.
3. Such review has not disclosed the existence on and as of the date
hereof, and the undersigned does not have knowledge of the existence as of the
date hereof, of any event or condition that constitutes a Default or Event of
Default, except for such conditions or events listed on Schedule 2 attached
hereto, specifying the nature and period of existence thereof and what action
Borrower has taken, is taking, or proposes to take with respect thereto.
4. The representations and warranties of the Borrower set forth in
the Loan Agreement and the other Loan Documents are true and correct in all
material respects as of the date hereof (except to the extent that such
representations and warranties relate solely to an earlier date, in which case
such representations and warranties are true and correct as of such earlier
date). Borrower is in timely compliance with all covenants set forth in the Loan
Agreement and the other Loan Documents, except as set forth on Schedule 2
attached hereto. Without limiting the generality of the foregoing, Borrower is
in compliance with the covenants contained in Section 7.20 of the Loan Agreement
as demonstrated on Schedule 3 hereof.
IN WITNESS WHEREOF, this Compliance Certificate is executed by the
undersigned this _____ day of ---------------, --------.
XXXXXX XXXXXXX FUNDING LLC
a Delaware limited liability company,
as Borrower
By:
--------------------------------------
Name:
Title:
SCHEDULE 3
1. MINIMUM COLLECTIONS.
-------------------
At the end of the week ending _________, 20__, the average
amount of weekly Collections with respect to Borrower's Accounts
during the Testing Period ending at the end of such week was not less
than $15,000,000; PROVIDED, HOWEVER, that the calculation of weekly
Collections determined under this paragraph 1 shall include all
amounts not exceeding $4,000,000 paid to subcontractors for goods
and/or services that, pursuant to the terms of any commercial
contract between an Originator and its client, such Originator pays
such subcontractor (on behalf of, and as agent for, such client)
directly from the client's funds.
2. MINIMUM PURCHASES.
-----------------
At the end of the week ending _________, 20__, the average
amount of Subject Accounts purchased by, or contributed to, the
Borrower each week pursuant to the Purchase Agreement during the
Testing Period ending at the end of such week was not less than
$18,000,000; PROVIDED, HOWEVER, that the calculation of weekly
purchases and contributions determined under this paragraph 2 shall
include amounts not exceeding $4,000,000 invoiced by any Originator
for subcontractor services for which, pursuant to the terms of a
commercial contract between such Originator and its client, such
Originator acts as agent for the client and pays for subcontractor
goods and services directly from the client's funds.
3. DILUTION.
--------
(a) Dilution for the Borrower for the six-month period ending _________,
20__, the date of determination, is calculated as follows:
(i) the aggregate dollar amount of bad debt write downs,
discounts, advertising allowances, credits and other
dilutive items with respect to the Accounts during the
immediately preceding six-month period ending on the date of
determination: $___________
(ii) Borrower's Collections with respect to Accounts (excluding
extraordinary items) during the immediately preceding
six-month period ending on the date of determination:
$___________
Item (i) divided by the sum of Item (i) plus Item (ii), expressed as
a percentage = Dilution: ___________%
(b) Dilution of the Borrower for the six-month period ending on the
date of determination, is not greater than 18%.
4. A/R TURNOVER PERIOD.
-------------------
(a) The A/R Turnover Period of Borrower for the month ending
_________, 20__, is calculated for such month as follows:
(i) aggregate amount of Accounts as of the first day of such month:
$___________
(ii) aggregate amount of Collections with respect to Accounts during
such month: $___________
A fraction, the numerator of which is Item (i) and the denominator of
which is Item (ii), times 30 days = A/R Turnover Period: ______ days
(b) The A/R Turnover Period of the Borrower for the month ending
_________, 20__, is not greater than 80 days.
5. DELINQUENCY RATIO.
-----------------
(a) Delinquency Ratio of the Borrower, as of _________, 20__, the
date of determination, is calculated as follows:
(i) aggregate amount of all Accounts as to which payment, or any part
thereof, remains unpaid for more than 90 days from the original invoice date:
$___________
(ii) aggregate amount of all Accounts: $___________
The ratio of Item (i) to Item (ii), expressed as a percentage =
Delinquency Ratio: ___________%
(b) Delinquency Ratio of the Borrower, as of __________, 20____, is
not greater than 50%.
6. MINIMUM TANGIBLE NET WORTH.
--------------------------
(a) The Tangible Net Worth of Borrower, as of the last day of the
month ending _________, 20__, is calculated as follows:
(i) Borrower's total stockholder equity at book value: $___________
(ii) all Intangible Assets of Borrower: $___________
(iii) all of Borrower's prepaid expenses: $___________
(iv) all amounts due to Borrower from Affiliates, calculated on a
consolidated basis: $___________
Item (i) minus the sum of (Item (ii) plus
Item (iii) plus Item (iv))
= Tangible Net Worth: $___________
(b) The Tangible Net Worth of the Borrower, as of ___________, 20___,
set forth above is not less $5,000,000.
7. MINIMUM EBITDA.
--------------
Consolidated Adjusted EBITDA for the four fiscal quarters
ended ___________, is $_______________, which amount [is/is not]
greater than or equal to the amount set forth in Section 7.20(b)(i)
of the Loan Agreement for the corresponding period.
8. SENIOR DEBT RATIO.
-----------------
The ratio of (i) Senior Debt to (ii) Consolidated Adjusted
EBITDA for the four fiscal quarters ended ___________, is _____ to
______, which ratio [is/is not] less than or equal to the ratio set
forth in Section 7.20(b)(ii) of the Loan Agreement for the
corresponding period.
9. CAPITAL EXPENDITURES.
--------------------
No capital expenditures have been made or committed to be
made by the Borrower.
EXHIBIT C-2
(Form of Compliance Certificate - Originator)
[on Originator's letterhead]
To: Foothill Capital Corporation, as Agent
under the below-referenced Loan Agreement
Xxx Xxxxxx Xxxxx
00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Business Finance Division Manager
Re: Compliance Certificate dated ______________
Ladies and Gentlemen:
Reference is made to that certain Loan and Security
Agreement, dated as of August 15, 2002 (the "LOAN
Agreement") among Xxxxxx Xxxxxxx Funding LLC, a Delaware limited liability
company ("BORROWER"), the lenders signatory thereto (the "LENDERS"), and
Foothill Capital Corporation, a California corporation, as the arranger and
administrative agent for the Lenders ("AGENT"). Capitalized terms used in this
Compliance Certificate have the meanings set forth in the Loan Agreement unless
specifically defined herein.
Pursuant to SECTION 6.3 of the Loan Agreement, the undersigned
officer of ___________ ("Originator") hereby certifies that:
1. The financial information of Originator furnished in Schedule 1 attached
hereto, has been prepared in accordance with GAAP (except for year-end
adjustments and the lack of footnotes, in the case of financial statements
delivered under Section 6.3(a) of the Loan Agreement) and fairly presents the
financial condition of Originator.
2. The Projections of Originator furnished in Schedule 2 attached hereto
constitute such officer's good faith best estimate of Originator 's financial
performance during the period covered thereby.
IN WITNESS WHEREOF, this Compliance Certificate is executed by the
undersigned this _____ day of ---------------, --------.
a ,
---------------------------------------
as Originator
By:
-------------------------------------------
Name:
Title:
EXHIBIT C-3
(Form of Compliance Certificate - Guarantor)
[on Guarantor's letterhead]
To: Foothill Capital Corporation, as Agent
under the below-referenced Loan Agreement
Xxx Xxxxxx Xxxxx
00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Business Finance Division Manager
Re: Compliance Certificate dated ______________
Ladies and Gentlemen:
Reference is made to that certain Performance Guaranty, dated as of
August 15, 2002 (the "GUARANTY") by Xxxxxx Xxxxxxx, Ltd. (the "GUARANTOR") in
favor of Foothill Capital Corporation, a California corporation, as the arranger
and administrative agent for the Lenders (defined below) ("AGENT") pursuant to
that certain Loan and Security Agreement, dated as of August ___, 2002 (the
"LOAN AGREEMENT") among Xxxxxx Xxxxxxx Funding LLC, a Delaware limited liability
company ("BORROWER"), the lenders signatory thereto (the "LENDERS"), and the
Agent. Capitalized terms used in this Compliance Certificate have the meanings
set forth in the Guaranty and the Loan Agreement unless specifically defined
herein.
Pursuant to SECTION 7(B) of the Guaranty, the undersigned officer of
Xxxxxx Xxxxxxx Ltd. hereby certifies that the financial information of Guarantor
and its Subsidiaries furnished in Schedule 1 attached hereto, has been prepared
in accordance with GAAP (except for year-end adjustments and the lack of
footnotes, in the case of financial statements delivered under Section 7(b)(ii)
of the Guaranty) and fairly presents the financial condition of Guarantor and
its Subsidiaries on a consolidated basis.
IN WITNESS WHEREOF, this Compliance Certificate is executed by the
undersigned this _____ day of ---------------, --------.
XXXXXX XXXXXXX LTD.,
a Bermuda limited company,
as Guarantor
By:
-------------------------------------------
Name:
Title: