EXHIBIT 10.1
CREDIT AGREEMENT
Dated as of June 2, 2004
among
INSTEEL WIRE PRODUCTS COMPANY,
as Borrower,
THE OTHER CREDIT PARTIES SIGNATORY HERETO,
as Credit Parties,
THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME,
as Lenders,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and Lender
GECC CAPITAL MARKETS GROUP, INC.
as Lead Arranger
J-
TABLE OF CONTENTS
Page
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1. AMOUNT AND TERMS OF CREDIT.................................................................. 1
1.1 Credit Facilities.................................................................... 1
1.2 Letters of Credit.................................................................... 6
1.3 Prepayments.......................................................................... 6
1.4 Use of Proceeds...................................................................... 9
1.5 Interest and Applicable Margins...................................................... 9
1.6 Eligible Accounts.................................................................... 13
1.7 Eligible Inventory................................................................... 15
1.8 Cash Management Systems.............................................................. 17
1.9 Fees................................................................................. 17
1.10 Receipt of Payments.................................................................. 18
1.11 Application and Allocation of Payments............................................... 18
1.12 Loan Account and Accounting.......................................................... 18
1.13 Indemnity............................................................................ 19
1.14 Access............................................................................... 20
1.15 Taxes................................................................................ 20
1.16 Capital Adequacy; Increased Costs; Illegality........................................ 21
1.17 Single Loan.......................................................................... 23
2. CONDITIONS PRECEDENT........................................................................ 23
2.1 Conditions to the Initial Loans...................................................... 23
2.2 Further Conditions to Each Loan...................................................... 24
3. REPRESENTATIONS AND WARRANTIES.............................................................. 25
3.1 Corporate Existence; Compliance with Law............................................. 25
3.2 Executive Offices, Collateral Locations, FEIN........................................ 25
3.3 Corporate Power, Authorization, Enforceable Obligations.............................. 25
3.4 Financial Statements and Projections................................................. 26
3.5 Material Adverse Effect.............................................................. 27
3.6 Ownership of Property; Liens......................................................... 27
3.7 Labor Matters........................................................................ 28
3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness............ 28
3.9 Government Regulation................................................................ 28
3.10 Margin Regulations................................................................... 29
3.11 Taxes................................................................................ 29
3.12 ERISA................................................................................ 29
3.13 No Litigation........................................................................ 30
3.14 Brokers.............................................................................. 30
3.15 Intellectual Property................................................................ 31
3.16 Full Disclosure...................................................................... 31
3.17 Environmental Matters................................................................ 31
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3.18 Insurance ........................................................................... 32
3.19 Deposit and Disbursement Accounts ................................................... 32
3.20 Government Contracts ................................................................ 32
3.21 Customer and Trade Relations ........................................................ 32
3.22 Bonding; Licenses ................................................................... 32
3.23 Solvency ............................................................................ 32
3.24 Status of Holdings .................................................................. 33
3.25 Inactive Subsidiaries ............................................................... 33
3.26 Motor Vehicles ...................................................................... 33
3.27 Vacant Land Lease ................................................................... 33
4 FINANCIAL STATEMENTS AND INFORMATION ....................................................... 33
4.1 Reports and Notices ................................................................. 33
4.2 Communication with Accountants ...................................................... 33
5 AFFIRMATIVE COVENANTS ...................................................................... 33
5.1 Maintenance of Existence and Conduct of Business .................................... 34
5.2 Payment of Charges .................................................................. 34
5.3 Books and Records ................................................................... 34
5.4 Insurance; Damage to or Destruction of Collateral ................................... 34
5.5 Compliance with Laws ................................................................ 36
5.6 Supplemental Disclosure ............................................................. 36
5.7 Intellectual Property ............................................................... 37
5.8 Environmental Matters ............................................................... 37
5.9 Landlords' Agreements, Mortgagee Agreements, Bailee Letters and Real Estate
Purchases ........................................................................... 37
5.10 Motor Vehicles ...................................................................... 39
5.11 IRB ................................................................................. 39
5.12 Remediation ......................................................................... 39
5.13 Further Assurances .................................................................. 39
6. NEGATIVE COVENANTS ......................................................................... 39
6.1 Mergers, Subsidiaries, Etc .......................................................... 39
6.2 Investments; Loans and Advances ..................................................... 40
6.3 Indebtedness ........................................................................ 40
6.4 Employee Loans and Affiliate Transactions ........................................... 41
6.5 Capital Structure and Business ...................................................... 42
6.6 Guaranteed Indebtedness ............................................................. 42
6.7 Liens ............................................................................... 42
6.8 Sale of Stock and Assets ............................................................ 43
6.9 ERISA ............................................................................... 43
6.10 Financial Covenants ................................................................. 43
6.11 Hazardous Materials ................................................................. 44
6.12 Sale-Leasebacks ..................................................................... 44
6.13 Restricted Payments ................................................................. 44
6.14 Change of Corporate Name or Location; Change of Fiscal Year ......................... 44
6.15 No Impairment of Intercompany Transfers ............................................. 44
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6.16 Real Estate Purchases ............................................................... 45
6.17 Holdings ............................................................................ 45
6.18 Inactive Subsidiaries ............................................................... 45
6.19 Leases .............................................................................. 45
6.20 Vacant Land Lease ................................................................... 45
7. TERM ....................................................................................... 45
7.1 Termination ......................................................................... 45
7.2 Survival of Obligations Upon Termination of Financing Arrangements .................. 45
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ..................................................... 46
8.1 Events of Default ................................................................... 46
8.2 Remedies ............................................................................ 48
8.3 Waivers by Credit Parties ........................................................... 48
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT ........................................ 48
9.1 Assignment and Participations ....................................................... 48
9.2 Appointment of Agent ................................................................ 51
9.3 Agent's Reliance, Etc ............................................................... 52
9.4 GE Capital and Affiliates ........................................................... 52
9.5 Lender Credit Decision .............................................................. 52
9.6 Indemnification ..................................................................... 53
9.7 Successor Agent ..................................................................... 54
9.8 Setoff and Sharing of Payments ...................................................... 54
9.9 Advances; Payments; Non-Funding Lenders; Information; Actions in Concert ............ 55
10. SUCCESSORS AND ASSIGNS ..................................................................... 57
10.1 Successors and Assigns .............................................................. 57
11. MISCELLANEOUS .............................................................................. 57
11.1 Complete Agreement; Modification of Agreement ....................................... 58
11.2 Amendments and Waivers .............................................................. 58
11.3 Fees and Expenses ................................................................... 60
11.4 No Waiver ........................................................................... 61
11.5 Remedies ............................................................................ 61
11.6 Severability ........................................................................ 61
11.7 Conflict of Terms ................................................................... 61
11.8 Confidentiality ..................................................................... 61
11.9 GOVERNING LAW ....................................................................... 62
11.10 Notices ............................................................................. 63
11.11 Section Titles ...................................................................... 63
11.12 Counterparts ........................................................................ 63
11.13 WAIVER OF JURY TRIAL ................................................................ 63
11.14 Press Releases and Related Matters .................................................. 64
11.15 Reinstatement ....................................................................... 64
11.16 Advice of Counsel ................................................................... 64
iii
11.17 No Strict Construction............................................................... 64
iv
INDEX OF APPENDICES
Annex A (Recitals) - Definitions
Annex B (Section 1.2) - Letters of Credit
Annex C (Section 1.8) - Cash Management System
Annex D (Section 2.1(a)) - Closing Checklist
Annex E (Section 4.1(a)) - Financial Statements and Projections -- Reporting
Annex F (Section 4.1(b)) - Collateral Reports
Annex G (Section 6.10) - Financial Covenants
Annex H (Section 9.9(a)) - Lenders' Wire Transfer Information
Annex I (Section 11.10) - Notice Addresses
Annex J (from Annex A- Commitments definition) - Commitments as of Closing Date
Exhibit 1.1(a)(i) - Form of Notice of Revolving Credit Advance
Exhibit 1.1(a)(ii) - Form of Revolving Note
Exhibit 1.1(b)(i) - Form of Term A Note
Exhibit 1.1(b)(ii) Form of Term B Note
Exhibit 1.1(c)(ii) - Form of Swing Line Note
Exhibit 1.5(e) - Form of Notice of Conversion/Continuation
Exhibit 4.1(b) - Form of Borrowing Base Certificate
Exhibit 9.1(a) - Form of Assignment Agreement
Exhibit B-1 - Application for Standby Letter of Credit
Exhibit B-2 - Application for Documentary Letter of Credit
Schedule 1.1 - Agent's Representatives
Disclosure Schedule 1.4 - Sources and Uses; Funds Flow Memorandum
Disclosure Schedule 3.1 - Type of Entity; State of Organization
Disclosure Schedule 3.2 - Executive Offices, Collateral Locations, FEIN
Disclosure Schedule 3.4(a) - Financial Statements
Disclosure Schedule 3.4(b) - Pro Forma
Disclosure Schedule 3.4(c) - Projections
Disclosure Schedule 3.6 - Real Estate and Leases
Disclosure Schedule 3.7 - Labor Matters
Disclosure Schedule 3.8 - Ventures, Subsidiaries and Affiliates; Outstanding Stock
Disclosure Schedule 3.11 - Tax Matters
Disclosure Schedule 3.12 - ERISA Plans
Disclosure Schedule 3.13 - Litigation
Disclosure Schedule 3.15 - Intellectual Property
Disclosure Schedule 3.17 - Hazardous Materials
Disclosure Schedule 3.18 - Insurance
Disclosure Schedule 3.19 - Deposit and Disbursement Accounts
Disclosure Schedule 3.20 - Government Contracts
Disclosure Schedule 3.22 - Bonds; Patent, Trademark Licenses
Disclosure Schedule 5.1 - Trade Names
v
Disclosure Schedule 6.3 - Indebtedness
Disclosure Schedule 6.4(a) - Transactions with Affiliates
Disclosure Schedule 6.7 - Existing Liens
Disclosure Schedule 6.8 - Net Cash Proceeds for Real Estate Held for Sale
vi
This CREDIT AGREEMENT (this "Agreement"), dated as of June 2, 2004
among INSTEEL WIRE PRODUCTS COMPANY, a North Carolina corporation ("Borrower");
the other Credit Parties signatory hereto; GENERAL ELECTRIC CAPITAL CORPORATION,
a Delaware corporation (in its individual capacity, "GE Capital"), for
itself, as Lender, and as Agent for Lenders, and the other Lenders signatory
hereto from time to time.
RECITALS
WHEREAS, Borrower has requested that Lenders extend revolving and
term credit facilities to Borrower of up to Eighty-Two Million Dollars
($82,000,000) in the aggregate for the purpose of refinancing certain
indebtedness of Borrower and Holdings (as defined below) and to provide (a)
working capital financing for Borrower, (b) funds for other general corporate
purposes of Borrower and (c) funds for other purposes permitted hereunder; and
for these purposes, Lenders are willing to make certain loans and other
extensions of credit to Borrower of up to such amount upon the terms and
conditions set forth herein; and
WHEREAS, Borrower has agreed to secure all of its obligations under
the Loan Documents by granting to Agent, for the benefit of Agent and Lenders, a
security interest in and lien upon all or substantially all of its existing and
after-acquired personal and
real property; and
WHEREAS, Insteel Industries, Inc., a North Carolina corporation
("Holdings") is willing to guarantee all of the obligations of Borrower to Agent
and Lenders under the Loan Documents and to pledge to Agent, for the benefit of
Agent and Lenders, all of the Stock of Borrower to secure such
guaranty; and
WHEREAS, capitalized terms used in this Agreement shall have the
meanings ascribed to them in Annex A and, for purposes of this Agreement and the
other Loan Documents, the rules of construction set forth in Annex A shall
govern. All Annexes, Disclosure Schedules, Exhibits and other
attachments (collectively, "Appendices") hereto, or expressly identified to this
Agreement, are incorporated herein by reference, and taken together with this
Agreement, shall constitute but a single agreement. These Recitals shall be
construed as part of the Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and for other good and valuable consideration,
the parties hereto agree as follows:
1. AMOUNT AND TERMS OF CREDIT
1.1 Credit Facilities.
(a) Revolving Credit Facility.
(i) Subject to the terms and conditions hereof, each
Revolving Lender agrees to make available to Borrower from time to time until
the Commitment Termination Date its Pro Rata Share of advances (each, a
"Revolving Credit Advance"). The Pro Rata Share of the Revolving Loan of any
Revolving Lender shall not at any time exceed its separate Revolving Loan
Commitment. The obligations of each Revolving Lender hereunder shall be several
and not joint. Until the Commitment
1
Termination Date, Borrower may from time to time borrow, repay and reborrow
under this Section 1.1(a); provided, that the amount of any Revolving Credit
Advance to be made at any time shall not exceed Borrowing Availability at such
time. Borrowing Availability may be further reduced by Reserves imposed by Agent
in its reasonable credit judgment. Each Revolving Credit Advance shall be made
on notice by Borrower to one of the representatives of Agent identified in
Schedule 1.1 at the address specified therein. Any such notice must be given no
later than (1) 11:00 a.m. (Chicago time) on the Business Day of the proposed
Revolving Credit Advance, in the case of an Index Rate Loan, or (2) 11:00 a.m.
(Chicago time) on the date which is three (3) Business Days prior to the
proposed Revolving Credit Advance, in the case of a LIBOR Loan. Each such notice
(a "Notice of Revolving Credit Advance") must be given in writing (by telecopy
or overnight courier) substantially in the form of Exhibit 1.1(a)(i), and shall
include the information required in such Exhibit and such other information as
may be required by Agent. If Borrower desires to have the Revolving Credit
Advances bear interest by reference to a LIBOR Rate, it must comply with Section
1.5(e).
(ii) Except as provided in Section 1.12, Borrower shall
execute and deliver to each Revolving Lender a note to evidence the Revolving
Loan Commitment of that Revolving Lender. Each note shall be in the principal
amount of the Revolving Loan Commitment of the applicable Revolving Lender,
dated the Closing Date and substantially in the form of Exhibit 1.1(a)(ii) (each
a "Revolving Note" and, collectively, the "Revolving Notes"). Each Revolving
Note shall represent the obligation of Borrower to pay the amount of Revolving
Lender's Revolving Loan Commitment or, if less, such Revolving Lender's Pro Rata
Share of the aggregate unpaid principal amount of all Revolving Credit Advances
to Borrower together with interest thereon as prescribed in Section 1.5. The
entire unpaid balance of the Revolving Loan and all other non-contingent
Obligations shall be immediately due and payable in full in immediately
available funds on the Commitment Termination Date.
(iii) Any provision of this Agreement to the contrary
notwithstanding, at the request of Borrower, in its discretion Agent may (but
shall have absolutely no obligation to), make Revolving Credit Advances to
Borrower on behalf of Revolving Lenders in amounts that cause the outstanding
balance of the aggregate Revolving Loan to exceed the Borrowing Base (less the
Swing Line Loan) (any such excess Revolving Credit Advances are herein referred
to collectively as "Overadvances"); provided, that (A) no such event or
occurrence shall cause or constitute a waiver of Agent's, the Swing Line
Lender's or Revolving Lenders' right to refuse to make any further Overadvances,
Swing Line Advances or Revolving Credit Advances, or incur any Letter of Credit
Obligations, as the case may be, at any time that an Overadvance exists, and (B)
no Overadvance shall result in a Default or Event of Default due to Borrower's
failure to comply with Section 1.3(b)(i) for so long as Agent permits such
Overadvance to remain outstanding, but solely with respect to the amount of such
Overadvance. In addition, Overadvances may be made even if the conditions to
lending set forth in Section 2 have not been met. All Overadvances shall
constitute Index Rate Loans, shall bear interest at the Default Rate and shall
be payable on the earlier of demand or the Commitment Termination Date. Except
as otherwise provided in Section 1.11(b), the authority of Agent to make
Overadvances is limited to an aggregate amount not to exceed
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$5,000,000 at any time, shall not cause the Revolving Loan to exceed the Maximum
Amount, and may be revoked prospectively by a written notice to Agent signed by
the Requisite Lenders.
(b) Term Loans.
(i) Term Loan A.
(A) Subject to the terms and conditions hereof, each Term
Lender agrees to make a term loan (collectively, the "Term Loan A")
on the Closing Date to Borrower in the original principal amount of
its Term Loan A Commitment. The obligations of each Term Lender
hereunder shall be several and not joint. The Term Loan A shall be
evidenced by promissory notes substantially in the form of Exhibit
1.1(b)(i) (each a "Term A Note" and collectively the "Term A
Notes"), and, except as provided in Section 1.12, Borrower shall
execute and deliver each Term A Note to the applicable Term Lender.
Each Term A Note shall represent the obligation of Borrower to pay
the amount of the applicable Term Lender's Term Loan A Commitment,
together with interest thereon as prescribed in Section 1.5.
(B) Borrower shall repay the principal amount of the Term
Loan A in forty-seven (47) consecutive monthly installments on the
first day of each month, commencing July 1, 2004, in the amount of
$283,333.33 each. The final installment due on June 2, 2008 shall
be in the amount of $3,683,333.49 or, if different, the remaining
principal balance of the Term Loan A.
(C) Notwithstanding Section 1.1(b)(i)(B), the aggregate
outstanding principal balance of the Term Loan A shall be due and
payable in full in immediately available funds on the Commitment
Termination Date, if not sooner paid in full. No payment with
respect to the Term Loan A may be reborrowed.
(D) Each payment of principal with respect to the Term Loan
A shall be paid to Agent for the ratable benefit of each Term
Lender, ratably in proportion to each such Term Lender's respective
Term Loan A Commitment.
(ii) Term Loan B.
(A) Subject to the terms and conditions hereof, each Term
Lender agrees to make a term loan (collectively, the "Term Loan B")
on the Closing Date to Borrower in the original principal amount of
its Term Loan B Commitment. The obligations of each Term Lender
hereunder shall be several and not joint. The Term Loan
B shall be evidenced by promissory notes substantially in the form
of Exhibit 1.1(b)(ii) (each a "Term B Note" and collectively the
"Term B Notes"), and, except as
3
provided in Section 1.12, Borrower shall execute and deliver each
Term B Note to the applicable Term Lender. Each Term B Note shall
represent the obligation of Borrower to pay the amount of the
applicable Term Lender's Term Loan B Commitment, together with
interest thereon as prescribed in Section 1.5.
(B) Borrower shall repay the principal amount of the Term
Loan B in a single installment due on June 2, 2008.
(C) Notwithstanding Section 1.1(b)(ii)(B), the aggregate
outstanding principal balance of the Term Loan B shall be due and
payable in full in immediately available funds on the Commitment
Termination Date, if not sooner paid in full. No payment with
respect to the Term Loan B may be reborrowed.
(D) Each payment of principal with respect to the Term Loan
B shall be paid to Agent for the ratable benefit of each Term
Lender, ratably in proportion to each such Term Lender's respective
Term Loan B Commitment.
(c) Swing Line Facility.
(i) Agent shall notify the Swing Line Lender upon Agent's
receipt of any Notice of Revolving Credit Advance. Subject to the terms and
conditions hereof, the Swing Line Lender may, in its discretion, make available
from time to time until the Commitment Termination Date advances (each, a "Swing
Line Advance") in accordance with any such notice. The provisions of this
Section 1.1(c) shall not relieve Revolving Lenders of their obligations to make
Revolving Credit Advances under Section 1.1(a); provided, that if the Swing Line
Lender makes a Swing Line Advance pursuant to any such notice, such Swing Line
Advance shall be in lieu of any Revolving Credit Advance that otherwise may be
made by Revolving Credit Lenders pursuant to such notice. The aggregate amount
of Swing Line Advances outstanding shall not exceed at any time the lesser of
(A) the Swing Line Commitment and (B) the lesser of the Maximum Amount and
(except for Overadvances) the Borrowing Base, in each case, less the outstanding
balance of the Revolving Loan at such time ("Swing Line Availability"). Until
the Commitment Termination Date, Borrower may from time to time borrow, repay
and reborrow under this Section 1.1(c). Each Swing Line Advance shall be made
pursuant to a Notice of Revolving Credit advance delivered by Borrower to Agent
in accordance with Section 1.1(a). Any such notice must be given no later than
11:00 a.m. (Chicago time) on the Business Day of the proposed Swing Line
Advance. Unless the Swing Line Lender has received at least one Business Day's
prior written notice from Requisite Revolving Lenders instructing it not to make
a Swing Line Advance, the Swing Line Lender shall, notwithstanding the failure
of any condition precedent set forth in Sections 2.2, be entitled to fund that
Swing Line Advance, and to have each Revolving Lender make Revolving Credit
Advances in accordance with Section 1.1(c)(iii) or purchase participating
interests in accordance with Section 1.1(c)(iv). Notwithstanding any other
provision of this Agreement or the other Loan Documents, the Swing Line
4
Loan shall constitute an Index Rate Loan. Borrower shall repay the aggregate
outstanding principal amount of the Swing Line Loan upon demand therefor by
Agent.
(ii) Borrower shall execute and deliver to the Swing Line
Lender a promissory note to evidence the Swing Line Commitment. Such note shall
be in the principal amount of the Swing Line Commitment of the Swing Line
Lender, dated the Closing Date and substantially in the form of Exhibit
1.1(c)(ii) (the "Swing Line Note"). The Swing Line Note shall represent the
obligation of Borrower to pay the amount of the Swing Line Commitment or, if
less, the aggregate unpaid principal amount of all Swing Line Advances made to
Borrower together with interest thereon as prescribed in Section 1.5. The entire
unpaid balance of the Swing Line Loan and all other non-contingent Obligations
shall be immediately due and payable in full in immediately available funds on
the Commitment Termination Date if not sooner paid in full.
(iii) The Swing Line Lender, at any time and from time to
time no less frequently than once weekly, shall on behalf of Borrower (and
Borrower hereby irrevocably authorizes the Swing Line Lender to so act on its
behalf) request each Revolving Lender (including the Swing Line Lender) to make
a Revolving Credit Advance to Borrower (which shall be an Index Rate Loan) in an
amount equal to that Revolving Lender's Pro Rata Share of the principal amount
of the Swing Line Loan (the "Refunded Swing Line Loan") outstanding on the date
such notice is given. Unless any of the events described in Sections 8.1(h) or
8.1(i) has occurred (in which event the procedures of Section 1.1(c)(iv) shall
apply) and regardless of whether the conditions precedent set forth in this
Agreement to the making of a Revolving Credit Advance are then satisfied, each
Revolving Lender shall disburse directly to Agent, its Pro Rata Share of a
Revolving Credit Advance on behalf of the Swing Line Lender, prior to 2:00 p.m.
(Chicago time), in immediately available funds on the Business Day next
succeeding the date that notice is given. The proceeds of those Revolving Credit
Advances shall be immediately paid to the Swing Line Lender and applied to repay
the Refunded Swing Line Loan.
(iv) If, prior to refunding a Swing Line Loan with a
Revolving Credit Advance pursuant to Section 1.1(c)(iii), one of the events
described in Sections 8.1(h) or 8.1(i) has occurred, then, subject to the
provisions of Section 1.1(c)(v) below, each Revolving Lender shall, on the date
such Revolving Credit Advance was to have been made for the benefit of Borrower,
purchase from the Swing Line Lender an undivided participation interest in the
Swing Line Loan in an amount equal to its Pro Rata Share of such Swing Line
Loan. Upon request, each Revolving Lender shall promptly transfer to the Swing
Line Lender, in immediately available funds, the amount of its participation
interest.
(v) Each Revolving Lender's obligation to make Revolving
Credit Advances in accordance with Section 1.1(c)(iii) and to purchase
participation interests in accordance with Section 1.1(c)(iv) shall be absolute
and unconditional and shall not be affected by any circumstance, including (A)
any setoff, counterclaim, recoupment, defense or other right that such Revolving
Lender may have against the
5
Swing Line Lender, Borrower or any other Person for any reason whatsoever; (B)
the occurrence or continuance of any Default or Event of Default; (C) any
inability of Borrower to satisfy the conditions precedent to borrowing set forth
in this Agreement at any time or (D) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing. If any Revolving
Lender does not make available to Agent or the Swing Line Lender, as applicable,
the amount required pursuant to Sections 1.1(c)(iii) or 1.1(c)(iv), as the case
may be, the Swing Line Lender shall be entitled to recover such amount on demand
from such Revolving Lender, together with interest thereon for each day from the
date of non-payment until such amount is paid in full at the Federal Funds Rate
for the first two Business Days and at the Index Rate thereafter.
(d) Reliance on Notices. Agent shall be entitled to rely upon, and
shall be fully protected in relying upon, any Notice of Revolving Credit
Advance, Notice of Conversion/Continuation or similar notice believed by Agent
to be genuine. Agent may assume that each Person executing and delivering any
notice in accordance herewith was duly authorized, unless the responsible
individual acting thereon for Agent has actual knowledge to the contrary.
1.2 Letters of Credit. Subject to and in accordance with the terms
and conditions contained herein and in Annex B, Borrower shall have the right to
request, and Revolving Lenders agree to incur, or purchase participations in,
Letter of Credit Obligations in respect of Borrower.
1.3 Prepayments.
(a) Voluntary Prepayments; Reductions in Revolving Loan
Commitments. Borrower may at any time on at least five (5) days' prior written
notice to Agent (i) voluntarily prepay all or part of any of the Term Loans
and/or (ii) permanently reduce (but not terminate) the Revolving Loan
Commitment; provided, that (A) any such reductions shall be in a minimum amount
of $1, 000,000 and integral multiples of $1,000,000 in excess of such amount,
and any such prepayments shall be in a minimum amount of $100,000 and integral
multiples of $25,000 in excess of such amount, (B) the Revolving Loan Commitment
shall not be reduced to an amount less than $45,000,000, and (C) after giving
effect to such reductions, Borrower shall comply with Section 1.3(b)(i).
Borrower may at any time on at least ten (10) days' prior written notice to
Agent terminate the Revolving Loan Commitment, provided that upon such
termination all Loans and other Obligations shall be immediately due and payable
in full and all Letter of Credit Obligations shall be cash collateralized or
otherwise satisfied in accordance with Annex B hereto. Any voluntary prepayment
and any reduction or termination of the Revolving Loan Commitment must be
accompanied by payment of the Fee required by Section 1.9(c), if any, plus the
payment of any LIBOR funding breakage costs in accordance with Section 1.13(b).
Upon any such reduction or termination of the Revolving Loan Commitment,
Borrower's right to request Revolving Credit Advances, or request that Letter of
Credit Obligations be incurred on its behalf, or request Swing Line Advances,
shall simultaneously be permanently reduced or terminated, as the case may be;
provided, that a permanent reduction of the Revolving Loan Commitment shall not
require a corresponding pro rata reduction in the L/C Sublimit. Each notice of
partial prepayment shall designate the Loan or other Obligations to which such
6
prepayment is to be applied; provided, that any partial prepayments of the Term
Loan A shall be applied to prepay the scheduled installments of the Term Loan A
in inverse order of maturity. Notwithstanding any of the foregoing to the
contrary, any Lender holding all or any portion of the Term Loan B may decline
to accept any voluntary prepayment under this Section 1.3(a) (other than the
amounts in respect to which no prepayment Fee is required to be paid in respect
of the Term Loan B pursuant to Section 1.9(c)), in which case such prepayment
shall be applied to the scheduled installments of the Term Loan A in inverse
order of maturity.
(b) Mandatory Prepayments.
(i) If at any time the outstanding balances of the Revolving
Loan and the Swing Line Loan exceed the lesser of (A) the Maximum Amount and (B)
the Borrowing Base, Borrower shall immediately repay the aggregate outstanding
Revolving Credit Advances to the extent required to eliminate such excess. If
any such excess remains after repayment in full of the aggregate outstanding
Revolving Credit Advances, Borrower shall provide cash collateral for the Letter
of Credit Obligations in the manner set forth in Annex B to the extent required
to eliminate such excess. Notwithstanding the foregoing, any Overadvance made
pursuant to Section 1.1(a)(iii) shall be repaid in accordance with Section
1.1(a)(iii).
(ii) Immediately upon receipt by any Credit Party of any cash
proceeds of any asset disposition, Borrower shall prepay the Loans in an amount
equal to all such proceeds, net of (A) commissions and other reasonable and
customary transaction costs, fees and expenses properly attributable to such
transaction and payable by Borrower in connection therewith (in each case, paid
to non-Affiliates), (B) transfer taxes, (C) amounts payable to holders of senior
Liens on such asset (to the extent such Liens constitute Permitted Encumbrances
hereunder), if any, and (D) an appropriate reserve for income taxes in
accordance with GAAP in connection therewith (all such proceeds net of amounts
described in clauses (A), (B), (C) and (D) being the "Net Asset Disposition
Proceeds"). Any such prepayment shall be applied in accordance with Section
1.3(c). The following shall not be subject to mandatory prepayment under this
clause (ii): (1) proceeds of sales of Inventory in the ordinary course of
business; (2) Net Asset Disposition Proceeds of less than $100,000 in the
aggregate in any Fiscal Year and (3) asset disposition proceeds that are
reinvested in Equipment, Fixtures or Real Estate within one hundred and twenty
(120) days following receipt thereof; provided, that Borrower notifies Agent of
its intent to reinvest at the time such proceeds are received and when such
reinvestment occurs.
(iii) Until the Termination Date, Borrower shall prepay the
Obligations on the date that is ten (10) days after the earlier of (A) the date
on which Borrower's annual audited Financial Statements for the immediately
preceding Fiscal Year are delivered pursuant to Annex E or (B) the date on which
such annual audited Financial Statements were required to be delivered pursuant
to Annex E, in an amount equal to fifty percent (50%) of Excess Cash Flow for
the immediately preceding Fiscal Year, in the case of each Fiscal Year other
than Fiscal Year 2004, and for the period from and including May 2, 2004 and
ending on or about October 2, 2004 (such period being the "2004 Stub Period"),
in the case of Fiscal Year 2004. Any prepayments from Excess
7
Cash Flow paid pursuant to this clause (iv), shall be applied in accordance with
Section 1.3(c), Each such prepayment shall be accompanied by a certificate
signed by Borrower's chief financial officer certifying the manner in which
Excess Cash Flow and the resulting prepayment were calculated, which certificate
shall be in form and substance satisfactory to Agent.
(iv) Any proceeds of Keyman Life Insurance (whether such
proceeds arise by reason of death benefit, at maturity, surrendering the policy
and receiving the surrender value thereof (unless upon such receipt of such
surrender value, Keyman Life Insurance is purchased which has a death benefit
that is not less than the death benefit of the Keyman Life Insurance which was
surrendered) or otherwise) shall be immediately used to prepay the Obligations
in an amount equal to such proceeds, which shall be applied in accordance with
Section 1.3(c) above.
(c) Application of Certain Mandatory Prepayments. Any prepayments
made by Borrower with respect to any or all Obligations pursuant to Sections
1.3(b)(ii), (b)(iii) or (b)(iv) above shall be applied as follows: first, to
Fees and reimbursable expenses of Agent then due and payable pursuant to any of
the Loan Documents; second, to interest then due and payable on the Term Loans
(ratably in proportion to the interest accrued as to each Term Loan A and Term
Loan B); third, to the principal balance of the Term Loans (shared equally
between the Term Loan A and the Term Loan B until either Term Loan A or Term
Loan B has been prepaid in full and thereafter to the principal balance of the
remaining Term Loan until the same has been prepaid in full, and, in each case
of a prepayment in respect of the Term Loan A, applied in the inverse order of
maturity of the scheduled principal installments of the Term Loan A), until such
Term Loans shall have been prepaid in full; fourth, to interest then due and
payable on the Swing Line Loan; fifth, to the principal balance of the Swing
Line Loan until the same has been repaid in full; sixth, to interest then due
and payable on the Revolving Credit Advances; seventh, to the outstanding
principal balance of Revolving Credit Advances until the same has been paid in
full; and eighth, to any Letter of Credit Obligations, to provide cash
collateral therefor in the manner set forth in Annex B, until all such Letter of
Credit Obligations have been fully cash collateralized in the manner set forth
in Annex B. Neither the Revolving Loan Commitment nor the Swing Line Commitment
shall be permanently reduced by the amount of any such prepayments.
(d) Application of Prepayments from Insurance Proceeds and
Condemnation Proceeds. Prepayments from insurance (other than Keyman Life
Insurance) or condemnation proceeds in accordance with Section 5.4(b) or 5.4(c)
and the Mortgage(s), respectively, shall be applied as follows: insurance
proceeds from casualties or losses to cash or Inventory shall be applied first,
to interest then due and payable on the Swing Line Loan, second to the principal
balance of the Swing Line Loan until the same has been repaid in full, third, to
interest then due and payable on the Revolving Credit Advances, fourth to the
outstanding principal balance of Revolving Credit Advances until the same has
been paid in full, and fifth to any Letter of Credit Obligations, to provide
cash collateral therefor in the manner set forth in Annex B, until all such
Letter of Credit Obligations have been fully cash collateralized in the manner
set forth in Annex B; insurance or condemnation proceeds from casualties or
losses to Equipment, Fixtures and Real Estate shall be applied as follows:
first, to interest then due and payable on the Term Loans (ratably in proportion
to the interest accrued as to each Term Loan A and Term Loan B)
8
and second, to the principal balance of the Term Loans (shared equally between
the Term Loan A and the Term Loan B until either Term Loan A or Term Loan B has
been prepaid in full and thereafter to the principal balance of the remaining
Term Loan until the same has been prepaid in full, and, in each case of a
prepayment in respect of the Term Loan A, applied in the inverse order of
maturity of the scheduled principal installments of the Term Loan A), until such
Term Loans shall have been prepaid in full. Neither the Revolving Loan
Commitment nor the Swing Line Loan Commitment shall be permanently reduced by
the amount of any such prepayments. If the precise amount of insurance or
condemnation proceeds allocable to Inventory as compared to Equipment, Fixtures
and Real Estate are not otherwise determined, the allocation and application of
those proceeds shall be determined by Agent, subject to the approval of
Requisite Lenders.
(e) No Implied Consent. Nothing in this Section 1.3 shall be
construed to constitute Agent's or any Lender's consent to any transaction that
is not permitted by other provisions of this Agreement or the other Loan
Documents.
1.4 Use of Proceeds. Borrower shall utilize the proceeds of the
Loans solely for the Refinancing (and to pay any related transaction expenses),
and for the financing of Borrower's ordinary working capital and general
corporate needs. Disclosure Schedule (1.4) contains a description of Borrower's
sources and uses of funds as of the Closing Date, including Loans and Letter of
Credit Obligations to be made or incurred on that date, and a funds flow
memorandum detailing how funds from each source are to be transferred to
particular uses.
1.5 Interest and Applicable Margins.
(a) Borrower shall pay interest to Agent, for the ratable benefit
of Lenders in accordance with the various Loans being made by each Lender, in
arrears on each applicable Interest Payment Date, at the following rates: (i)
with respect to the Revolving Credit Advances, the Index Rate plus the
Applicable Revolver Index Margin per annum or, at the election of Borrower, the
applicable LIBOR Rate plus the Applicable Revolver LIBOR Margin per annum; (ii)
with respect to the Term Loan A, the Index Rate plus the Applicable Term Loan A
Index Margin per annum or, at the election of Borrower, the applicable LIBOR
Rate plus the Applicable Term Loan A LIBOR Margin per annum; (iii) with respect
to the Term Loan B, the Index Rate plus the Applicable Term Loan B Index Margin
per annum; and (iv) with respect to the Swing Line Loan, the Index Rate plus the
Applicable Revolver Index Margin per annum.
As of the Closing Date, the Applicable Margins are as follows:
9
Applicable Revolver Index Margin 1.50%
Applicable Revolver LIBOR Margin 3.00%
Applicable Term Loan A Index Margin 2.25%
Applicable Term Loan B Index Margin 7.00%
Applicable Term Loan A LIBOR Margin 3.75%
Applicable L/C Margin 3.00%
Applicable Unused Line Fee Margin 0.50%
If the prepayments of the Term Loan A pursuant to Section
1.3(b)(iii) or pursuant to Section 1.3(b)(ii) from the proceeds of dispositions
of one or more parcels of Real Estate other than Eligible Real Estate equal or
exceed $1,600,000 in the aggregate prior to the date that the Financial
Statements with respect to the Fiscal Quarter ending on or about April 2, 2005
are required to be delivered pursuant to Annex E, the Applicable Term Loan A
Index Margin of 2.25% and the Applicable Term Loan A LIBOR Margin of 3.75% shall
be reduced by 0.25% effective during the period commencing on and including the
first day of the first calendar month following the date such prepayments of the
Term Loan A equal or exceed $1,600,000 in the aggregate and ending on the date
that the Financial Statements with respect to the Fiscal Quarter ending on or
about April 2, 2005 are required to be delivered pursuant to Annex E.
The Applicable Margins shall be adjusted by reference to the
following grids:
LEVEL OF
IF LEVERAGE RATIO IS: APPLICABLE MARGINS:
---------------------- -----------------------
< 2.25 Level I
<2.50, but > or = 2.25 Level II
<2.75, but > or = 2.50 Level III
> or = 2.75 Xxxxx XX
00
XXXXXXXXXX XXXXXXX
-------------------------------------------
XXXXX X XXXXX XX XXXXX XXX XXXXX XX
------- -------- --------- --------
Applicable Revolver
Index Margin 1.00% 1.25% 1.50% 1.75%
Applicable Revolver LIBOR Margin 2.50% 2.75% 3.00% 3.25%
Applicable Term Loan A Index Margin 1.50% 1.75% 2.00% 2.25%
Applicable Term Loan B Index Margin 5.00% 5.75% 6.50% 7.00%
Applicable Term Loan A LIBOR Margin 3.00% 3.25% 3.50% 3.75%
Applicable L/C Margin 2.50% 2.75% 3.00% 3.25%
and the Applicable Margins set forth in the above grid shall be further adjusted
as follows: (i) if the Reference Availability at the time of delivery of the
Financial Statements evidencing the need for adjustment is less than
$10,000,000, Applicable Margins shall be increased by 0.25% effective as of the
time of adjustment set forth below and (ii) if the Reference Availability at the
time of delivery of the Financial Statements evidencing the need for adjustment
exceeds $20,000,000, Applicable Margins shall be reduced by 0.25% effective as
of the time of adjustment set forth below.
Adjustments in the Applicable Margins commencing with the Fiscal
Quarter ending on or about April 2, 2005 shall be implemented quarterly on a
prospective basis, commencing on the first day of the calendar month that begins
after the date of delivery to Lenders of the quarterly unaudited or annual
audited (as applicable) Financial Statements evidencing the need for an
adjustment. Concurrently with the delivery of those Financial Statements,
Borrower shall deliver to Agent and Lenders a certificate, signed by its chief
financial officer, setting forth in reasonable detail the basis for the
continuance of, or any change in, the Applicable Margins. Failure to timely
deliver such Financial Statements shall, in addition to any other remedy
provided for in this Agreement, result in an increase in the Applicable Margins
to the highest level set forth in the foregoing grid, until the date of the
delivery of those Financial Statements demonstrating that such an increase is
not required. If an Event of Default has occurred and is continuing at the time
any reduction in the Applicable Margins is to be implemented, that reduction
shall be deferred until the date on which such Event of Default is waived or
cured.
(b) If any payment on any Loan becomes due and payable on a day
other than a Business Day, the maturity thereof will be extended to the next
succeeding Business Day (except as set forth in the definition of LIBOR Period)
and, with respect to payments of principal, interest thereon shall be payable at
the then applicable rate during such extension.
(c) All computations of Fees calculated on a per annum basis and
interest shall be made by Agent on the basis of a 360-day year, in each case for
the actual number of
11
days occurring in the period for which such interest and Fees are payable. The
Index Rate is a floating rate determined for each day. Each determination by
Agent of interest rates and Fees hereunder shall be presumptive evidence of the
correctness of such rates and Fees.
(d) So long as an Event of Default has occurred and is continuing
under Section 8.1(a), (h) or (i), or so long as any other Event of Default has
occurred and is continuing and at the election of Agent (or upon the written
request of Requisite Lenders) confirmed by written notice from Agent to
Borrower, the interest rates applicable to the Loans and the Letter of Credit
Fees shall be increased by two percentage points (2%) per annum above the
highest interest rate on the grid of interest or the rate of such Fees otherwise
applicable hereunder unless Agent or Requisite Lenders elect to impose a smaller
increase (the "Default Rate"), and all outstanding Obligations shall bear
interest at the Default Rate applicable to such Obligations. Interest and Letter
of Credit Fees at the Default Rate shall accrue from the initial date of such
Event of Default until that Event of Default is cured or waived and shall be
payable upon demand.
(e) Subject to the conditions precedent set forth in Section 2.2,
Borrower shall have the option to (i) request that any Revolving Credit Advance
be made as a LIBOR Loan, (ii) convert at any time all or any part of outstanding
Loans (other than the Swing Line Loan and the Term Loan B) from Index Rate Loans
to LIBOR Loans, (iii) convert any LIBOR Loan to an Index Rate Loan, subject to
payment of LIBOR breakage costs in accordance with Section 1.13(b) if such
conversion is made prior to the expiration of the LIBOR Period applicable
thereto, or (iv) continue all or any portion of any Loan (other than the Swing
Line Loan and the Term Loan B) as a LIBOR Loan upon the expiration of the
applicable LIBOR Period and the succeeding LIBOR Period of that continued Loan
shall commence on the first day after the last day of the LIBOR Period of the
Loan to be continued. Any Loan or group of Loans having the same proposed LIBOR
Period to be made or continued as, or converted into, a LIBOR Loan must be in a
minimum amount of $2,000,000 and integral multiples of $1,000,000 in excess of
such amount. Any such election must be made by 11:00 a.m. (Chicago time) on the
Third Business Day prior to (1) the date of any proposed Advance which is to
bear interest at the LIBOR Rate, (2) the end of each LIBOR Period with respect
to any LIBOR Loans to be continued as such, or (3) the date on which Borrower
wishes to convert any Index Rate Loan to a LIBOR Loan for a LIBOR Period
designated by Borrower in such election. If no election is received with respect
to a LIBOR Loan by 11:00 a.m. (Chicago time) on the Third Business Day prior to
the end of the LIBOR Period with respect thereto (or if a Default or an Event of
Default has occurred and is continuing or the additional conditions precedent
set forth in Section 2.2 shall not have been satisfied), that LIBOR Loan shall
be converted to an Index Rate Loan at the end of its LIBOR Period. Borrower must
make such election by notice to Agent in writing, by telecopy or overnight
courier. In the case of any conversion or continuation, such election must be
made pursuant to a written notice (a "Notice of Conversion/Continuation") in the
form of Exhibit 1.5(e).
(f) Notwithstanding anything to the contrary set forth in this
Section 1.5, if a court of competent jurisdiction determines in a final order
that the rate of interest payable hereunder exceeds the highest rate of interest
permissible under law (the "Maximum Lawful Rate"), then so long as the Maximum
Lawful Rate would be so exceeded, the rate of interest payable hereunder shall
be equal to the Maximum Lawful Rate; provided, however, that if at any
12
time thereafter the rate of interest payable hereunder is less than the Maximum
Lawful Rate, Borrower shall continue to pay interest hereunder at the Maximum
Lawful Rate until such time as the total interest received by Agent, on behalf
of Lenders, is equal to the total interest that would have been received had the
interest rate payable hereunder been (but for the operation of this paragraph)
the interest rate payable since the Closing Date as otherwise provided in this
Agreement. In no event shall the total interest received by any Lender pursuant
to the terms hereof exceed the amount that such Lender could lawfully have
received had the interest due hereunder been calculated for the full term hereof
at the Maximum Lawful Rate.
1.6 Eligible Accounts. All of the Accounts owned by Borrower and
reflected in the most recent Borrowing Base Certificate delivered by Borrower to
Agent shall be "Eligible Accounts" for purposes of this Agreement, except any
Account to which any of the exclusionary criteria set forth below applies. Agent
shall have the right to establish, modify or eliminate Reserves against Eligible
Accounts from time to time in its reasonable credit judgment. In addition, Agent
reserves the right, at any time and from time to time after the Closing Date, to
adjust any of the criteria set forth below and to establish new criteria, and to
adjust advance rates with respect to Eligible Accounts, in its reasonable credit
judgment, subject to the approval of Supermajority Revolving Lenders in the case
of adjustments or new criteria or changes in advance rates which have the effect
of making more credit available. Eligible Accounts shall not include any Account
of Borrower:
(a) that does not arise from the sale of goods or the performance
of services by Borrower in the ordinary course of its business;
(b) (i) upon which Borrower's right to receive payment is not
absolute or is contingent upon the fulfillment of any condition whatsoever or
(ii) as to which Borrower is not able to bring suit or otherwise enforce its
remedies against the Account Debtor through judicial process, or (iii) if the
Account represents a progress billing consisting of an invoice for goods sold or
used or services rendered pursuant to a contract under which the Account
Debtor's obligation to pay that invoice is subject to Borrower's completion of
further performance under such contract or is subject to the equitable lien of a
surety bond issuer;
(c) to the extent that any defense, counterclaim, contra, setoff
or dispute is asserted as to such Account;
(d) that is not a true and correct statement of bona fide
indebtedness incurred in the amount of the Account for merchandise sold to or
services rendered and accepted by the applicable Account Debtor;
(e) with respect to which an invoice, reasonably acceptable to
Agent in form and substance, has not been sent to the applicable Account Debtor;
(f) that (i) is not owned by Borrower or (ii) is subject to any
Lien of any other Person, other than Liens in favor of Agent, on behalf of
itself and Lenders;
(g) that arises from a sale to any director, officer, other
employee or Affiliate of any Credit Party, or to any entity that has any common
officer or director with any Credit Party (other than those sales to an
Affiliate (determined solely for the purposes of this clause (g),
13
as if the phrase "5% or more" set forth in clause (a) of the definition of the
term of "Affiliate" was the phrase "15% or less" and without giving effect to
clauses (b), (c) and (d) of such definition) of any Credit Party so long as such
sales are on an arms-length basis and in the ordinary course of such Credit
Party's business);
(h) that is the obligation of an Account Debtor that is the United
States government or a political subdivision thereof, or any state, county or
municipality or department, agency or instrumentality thereof unless Agent, in
its sole discretion, has agreed to the contrary in writing and Borrower, if
necessary or desirable, has complied with respect to such obligation with the
Federal Assignment of Claims Act of 1940, or any applicable state, county or
municipal law restricting the assignment thereof with respect to such
obligation;
(i) that is the obligation of an Account Debtor located in a
foreign country other than Canada unless payment thereof is assured by a letter
of credit assigned and delivered to Agent, satisfactory to Agent as to form,
amount and issuer;
(j) to the extent Borrower or any Subsidiary thereof is liable for
goods sold or services rendered by the applicable Account Debtor to Borrower or
any Subsidiary thereof but only to the extent of the potential offset;
(k) that arises with respect to goods that are delivered on a
cash-on-delivery basis or placed on consignment, guaranteed sale or other terms
by reason of which the payment by the Account Debtor is or may be conditional;
(l) that is in default; provided, that, without limiting the
generality of the foregoing, an Account shall be deemed in default upon the
occurrence of any of the following:
(i) the Account is not paid within the earlier of: sixty
(60) days following its due date or one hundred twenty (120) days following its
original invoice date;
(ii) the Account Debtor obligated upon such Account suspends
business, makes a general assignment for the benefit of creditors or fails to
pay its debts generally as they come due; or
(iii) a petition is filed by or against any Account Debtor
obligated upon such Account under any bankruptcy law or any other federal, state
or foreign (including any provincial) receivership, insolvency relief or other
law or laws for the relief of debtors;
(m) that is the obligation of an Account Debtor for which fifty
percent (50%) or more of the Dollar amount of all Accounts owing by that Account
Debtor are ineligible under the other criteria set forth in this Section 1.6
(l)(i);
(n) as to which Agent's Lien thereon, on behalf of itself and
Lenders, is not a first priority perfected Lien;
14
(o) as to which any of the representations or warranties in the
Loan Documents are untrue;
(p) that is a Xxxx-and-Hold Account to the extent that the book
value thereof, when added to the book value of all other Xxxx-and-Hold Accounts,
exceeds 60% of the aggregate book value of all Xxxx-and-Hold Accounts, provided,
however, that the aggregate amount of Borrowing Availability attributable to
Xxxx-and-Hold Accounts which are not excluded from being Eligible Accounts
pursuant to this clause (p) and which otherwise constitute and are deemed to be
"Eligible Accounts" in accordance with this Section 1.6 shall not exceed
$3,000,000 at any time;
(q) to the extent such Account is evidenced by a judgment,
Instrument or Chattel Paper;
(r) to the extent such Account exceeds any credit limit
established by Agent, in its reasonable credit judgment; provided, that Agent
shall notify Borrower of Agent's proposed credit limit or an amendment of the
existing credit limit, as the case may be, prior to Agent's establishment or
amendment thereof and Agent and Borrower shall mutually agree on such credit
limit; provided, further, that if no agreement is reached within three (3)
Business Days of the date of the proposal of such credit limit or amendment
thereof by the Agent, the Agent's proposed credit limit or amendment thereof
shall be deemed to be established and in effect for purposes of this clause (r);
(s) to the extent that such Account, together with all other
Accounts owing to such Account Debtor and its Affiliates as of any date of
determination exceed 15% of all Eligible Accounts; or
(t) that is payable in any currency other than Dollars.
1.7 Eligible Inventory. All of the inventory owned by the Borrower
and reflected in the most recent Borrowing Base Certificate delivered by
Borrower to Agent shall be "Eligible Inventory" for purposes of this Agreement,
except any Inventory to which any of the exclusionary criteria set forth below
applies. Agent shall have the right to establish, modify, or eliminate Reserves
against Eligible Inventory from time to time in its reasonable credit judgment.
In addition, Agent reserves the right, at any time and from time to time after
the Closing Date, to adjust any of the criteria set forth below and to establish
new criteria and to adjust advance rates with to Eligible Inventory in its
reasonable credit judgment, subject to the approval of Supermajority Revolving
Lenders in the case of adjustments or new criteria or changes in advance rates
which have the effect of making more credit available. Eligible Inventory shall
not include any Inventory of Borrower that:
(a) is not owned by Borrower free and clear of all Liens and
rights of any other Person (including the rights of a purchaser that has made
progress payments and the rights of a surety that has issued a bond to assure
Borrower's performance with respect to that Inventory), except the Liens in
favor of Agent, on behalf of itself and Lenders;
(b) (i) is not located on premises owned, leased or rented by
Borrower and set forth in Disclosure Schedule (3.2) or (ii) is stored at a
leased location, unless Agent has given its
15
prior consent thereto and unless (x) a reasonably satisfactory landlord waiver
has been delivered to Agent, and/or (y) Reserves satisfactory to Agent have been
established with respect thereto, (iii) is stored with a bailee or warehouseman
unless a reasonably satisfactory, acknowledged bailee letter and other
documentation as required by Agent has been received by Agent and, if required
by Agent, Reserves reasonably satisfactory to Agent have been established with
respect to all past-due amounts owing to any such bailee or warehouseman, or
(iv) is located at an owned location subject to a mortgage in favor of a lender
other than Agent, unless a reasonably satisfactory mortgagee waiver has been
delivered to Agent, or (v) is located at any site if the aggregate book value of
Inventory at any such location is less than $100,000;
(c) is placed on consignment or is in transit, except for
Inventory in transit between domestic locations (including leased locations and
domestic port locations with respect to which a Bailee Letter has been delivered
to Agent) of Credit Parties as to which Agent's Liens have been perfected at
origin and destination;
(d) is covered by a negotiable document of title, unless such
document has been delivered to Agent with all necessary endorsements, free and
clear of all Liens except those in favor of Agent and Lenders;
(e) obsolete, slow moving (in excess of one year's supply),
unsalable, shopworn, seconds, damaged or unfit for sale;
(f) consists of display items or packing or shipping materials,
manufacturing supplies, stores or replacement parts;
(g) consists of goods which have been returned by the buyer unless
such returned goods have been inspected by Borrower and determined to be free of
defect or damage and have been returned to finished goods Inventory for sale;
(h) is not of a type held for sale in the ordinary course of
Borrower's business;
(i) is not subject to a first priority lien in favor of Agent on
behalf of itself and Lenders;
(j) breaches any of the representations or warranties pertaining
to Inventory set forth in the Loan Documents;
(k) consists of any costs associated with "freight-in" charges,
except those charges that are customary in, and consistent with, Borrower's
historical accounting practices;
(l) consists of Hazardous Materials or goods that can be
transported or sold only with licenses that are not readily available;
(m) is not covered by casualty insurance reasonably acceptable to
Agent; or
(n) is subject to any patent or trademark license requiring the
payment of royalties or fees or requiring the consent of the licensor for a sale
thereof by Agent.
16
1.8 Cash Management Systems. On or prior to the Closing Date,
Borrower and Holdings will establish and will maintain until the Termination
Date, the cash management systems described in Annex C (the "Cash Management
Systems").
1.9 Fees.
(a) Borrower shall pay to GE Capital, individually, the Fees
specified in the GE Capital Fee Letter.
(b) As additional compensation for the Revolving Lenders, Borrower
shall pay to Agent, for the ratable benefit of such Lenders, in arrears, on the
first Business Day of each month prior to the Commitment Termination Date and on
the Commitment Termination Date, a Fee for Borrower's non-use of available funds
in an amount equal to one-half of one percent (0.50%) per annum (calculated on
the basis of a 360 day year for actual days elapsed) multiplied by the
difference between (x) the Maximum Amount (as it may be reduced from time to
time) and (y) the average for the period of the daily closing balances of the
Revolving Loan and the Swing Line Loan outstanding during the period for which
the such Fee is due.
(c) If Borrower pays after acceleration or prepays all or any
portion of the Term Loans or prepays the Revolving Loan and reduces or
terminates the Revolving Loan Commitment, whether voluntarily or involuntarily
and whether before or after acceleration of the Obligations or if the
Commitments are otherwise terminated, Borrower shall pay to Agent, for the
benefit of Lenders as liquidated damages and compensation for the costs of being
prepared to make funds available hereunder an amount equal to the Applicable
Percentage (as defined below) multiplied by the sum of (i) the principal amount
of the Term Loans paid after acceleration or prepaid, and (ii) the amount of the
reduction of the Revolving Loan Commitment. As used herein, the term "Applicable
Percentage" shall mean (y) two percent (2%), in the case of a prepayment on or
prior to the second anniversary of the Closing Date, and (z) one percent (1%),
in the case of a prepayment after the second anniversary of the Closing Date but
on or prior to the third anniversary thereof. The Credit Parties agree that the
Applicable Percentages are a reasonable calculation of Lenders' lost profits in
view of the difficulties and impracticality of determining actual damages
resulting from an early termination of the Commitments. Notwithstanding the
foregoing, no prepayment fee shall be payable by Borrower (A) upon prepayments
or reductions pursuant to and in accordance with Section 1.3(a) as long as such
prepayments or reductions do not exceed (i) $625,000 in the aggregate in respect
of the Term Loan A and (ii) $625,000 in the aggregate in respect of the Term
Loan B, in each case during each of the one-year periods following the Closing
Date and Reference Availability exceeds $10,000,000 after giving effect to such
prepayment and (B) upon a mandatory prepayment made pursuant to Sections 1.3(b)
or 1.16(c); provided, that Borrower does not permanently reduce or terminate the
Revolving Loan Commitment upon any such prepayment and, in the case of
prepayments made pursuant to Section 1.3(b)(ii), the transaction giving rise to
the applicable prepayment is expressly permitted under Section 6.
(d) Borrower shall pay to Agent, for the ratable benefit of
Revolving Lenders, the Letter of Credit Fee as provided in Annex B.
17
1.10 Receipt of Payments. Borrower shall make each payment under
this Agreement not later than 2:00 p.m. (New York time) on the day when due in
immediately available funds in Dollars to the Collection Account. For purposes
of computing interest and Fees and determining Borrowing Availability as of any
date, all payments shall be deemed received on the first Business Day following
the Business Day on which immediately available funds therefor are received in
the Collection Account prior to 2:00 p.m. (New York time). Payments received
after 2:00 p.m. (New York time) on any Business Day or on a day that is not a
Business Day shall be deemed to have been received on the following Business
Day.
1.11 Application and Allocation of Payments.
(a) So long as no Event of Default has occurred and is continuing,
(i) payments consisting of proceeds of Accounts received in the ordinary course
of business shall be applied, first, to the Swing Line Loan and, second, to the
Revolving Loan; (ii) payments matching specific scheduled payments then due
shall be applied to those scheduled payments; (iii) voluntary prepayments shall
be applied in accordance with the provisions of Section 1.3(a); and (iv)
mandatory prepayments shall be applied as set forth in Sections 1.3(c) and
1.3(d). All payments and prepayments applied to a particular Loan shall be
applied ratably to the portion thereof held by each Lender as determined by its
Pro Rata Share. As to any other payment, and as to all payments made when an
Event of Default has occurred and is continuing or following the Commitment
Termination Date, Borrower hereby irrevocably waives the right to direct the
application of any and all payments received from or on behalf of Borrower, and
Borrower hereby irrevocably agrees that Agent shall have the continuing
exclusive right to apply any and all such payments against the Obligations as
Agent may deem advisable notwithstanding any previous entry by Agent in the Loan
Account or any other books and records. In the absence of a specific
determination by Agent with respect thereto, payments shall be applied to
amounts then due and payable in the following order: (1) to Fees and Agent's
expenses reimbursable hereunder; (2) to interest on the Swing Line Loan; (3) to
principal payments on the Swing Line Loan; (4) to interest on the other Loans,
ratably in proportion to the interest accrued as to each Loan; (5) to principal
payments on the other Loans and to provide cash collateral for Letter of Credit
Obligations in the manner described in Annex B, ratably to the aggregate,
combined principal balance of the other Loans and outstanding Letter of Credit
Obligations; and (6) to all other Obligations including expenses of Lenders to
the extent reimbursable under Section 11.3.
(b) Agent is authorized to, and at its sole election may, charge
to the Revolving Loan balance on behalf of Borrower and cause to be paid all
Fees, expenses, Charges, costs (including insurance premiums in accordance with
Section 5.4(a)) and interest and principal, other than principal of the
Revolving Loan, owing by Borrower under this Agreement or any of the other Loan
Documents if and to the extent Borrower fails to pay promptly any such amounts
as and when due, even if the amount of such charges would exceed Borrowing
Availability at such time. At Agent's option and to the extent permitted by law,
any charges so made shall constitute part of the Revolving Loan hereunder.
1.12 Loan Account and Accounting. Agent shall maintain a loan
account (the "Loan Account") on its books to record: all Advances and the Term
Loans, all payments made by Borrower, and all other debits and credits as
provided in this Agreement with respect to the Loans or any other Obligations.
All entries in the Loan Account shall be made in
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accordance with Agent's customary accounting practices as in effect from time to
time. The balance in the Loan Account, as recorded on Agent's most recent
printout or other written statement, shall, absent manifest error, be
presumptive evidence of the amounts due and owing to Agent and Lenders by
Borrower; provided, that any failure to so record or any error in so recording
shall not limit or otherwise affect Borrower's duty to pay the Obligations.
Agent shall render to Borrower a monthly accounting of transactions with respect
to the Loans setting forth the balance of the Loan Account for the immediately
preceding month. Unless Borrower notifies Agent in writing of any objection to
any such accounting (specifically describing the basis for such objection),
within thirty (30) days after the date thereof, each and every such accounting
shall be presumptive evidence of all matters reflected therein. Only those items
expressly objected to in such notice shall be deemed to be disputed by Borrower.
Notwithstanding any provision herein contained to the contrary, any Lender may
elect (which election may be revoked) to dispense with the issuance of Notes to
that Lender and may rely on the Loan Account as evidence of the amount of
Obligations from time to time owing to it.
1.13 Indemnity.
(a) Each Credit Party that is a signatory hereto shall jointly and
severally indemnify and hold harmless each of Agent, Lenders and their
respective Affiliates, and each such Person's respective officers, directors,
employees, attorneys, agents and representatives (each, an "Indemnified
Person"), from and against any and all suits, actions, proceedings, claims,
damages, losses, liabilities and expenses (including reasonable attorneys' fees
and disbursements and other costs of investigation or defense, including those
incurred upon any appeal) that may be instituted or asserted against or incurred
by any such Indemnified Person as the result of credit having been extended,
suspended or terminated under this Agreement and the other Loan Documents and
the administration of such credit, and in connection with or arising out of the
transactions contemplated hereunder and thereunder and any actions or failures
to act in connection therewith, including any and all Environmental Liabilities
and legal costs and expenses arising out of or incurred in connection with
disputes between or among any parties to any of the Loan Documents
(collectively, "Indemnified Liabilities"); provided, that no such Credit Party
shall be liable for any indemnification to an Indemnified Person to the extent
that any such suit, action, proceeding, claim, damage, loss, liability or
expense results from that Indemnified Person's gross negligence or willful
misconduct. NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER
PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY
OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH
PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE
ALLEGED AS A RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED
UNDER ANY LOAN DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED
HEREUNDER OR THEREUNDER.
(b) To induce Lenders to provide the LIBOR Rate option on the
terms provided herein, if (i) any LIBOR Loans are repaid in whole or in part
prior to the last day of any applicable LIBOR Period (whether that repayment is
made pursuant to any provision of this Agreement or any other Loan Document or
occurs as a result of acceleration, by operation of law or otherwise); (ii)
Borrower shall default in payment when due of the principal amount of or
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interest on any LIBOR Loan; (iii) Borrower shall refuse to accept any borrowing
of, or shall request a termination of any borrowing, conversion into or
continuation of LIBOR Loans after Borrower has given notice requesting the same
in accordance herewith; or (iv) Borrower shall fail to make any prepayment of a
LIBOR Loan after Borrower has given a notice thereof in accordance herewith,
then Borrower shall indemnify and hold harmless each Lender from and against all
losses, costs and expenses resulting from or arising from any of the foregoing.
Such indemnification shall include any loss (including loss of margin) or
expense arising from the reemployment of funds obtained by it or from fees
payable to terminate deposits from which such funds were obtained. For the
purpose of calculating amounts payable to a Lender under this subsection, each
Lender shall be deemed to have actually funded its relevant LIBOR Loan through
the purchase of a deposit bearing interest at the LIBOR Rate in an amount equal
to the amount of that LIBOR Loan and having a maturity comparable to the
relevant LIBOR Period; provided, that each Lender may fund each of its LIBOR
Loans in any manner it sees fit, and the foregoing assumption shall be utilized
only for the calculation of amounts payable under this subsection. This covenant
shall survive the termination of this Agreement and the payment of the Notes and
all other amounts payable hereunder. As promptly as practicable under the
circumstances, each Lender shall provide Borrower with its written calculation
of all amounts payable pursuant to this Section 1.13(b), and such calculation
shall be binding on the parties hereto unless Borrower shall object in writing
within ten (10) Business Days of receipt thereof, specifying the basis for such
objection in detail.
1.14 Access. Each Credit Party that is a party hereto shall, during
normal business hours, from time to time upon two (2) Business Days' prior
notice as frequently as Agent reasonably determines to be appropriate: (a)
provide Agent and any of its officers, employees and agents access to its
properties, facilities, advisors, officers and employees of each Credit Party
and to the Collateral, (b) permit Agent, and any of its officers, employees and
agents, to inspect, audit and make extracts from any Credit Party's books and
records, and (c) permit Agent, and its officers, employees and agents, to
inspect, review, evaluate and make test verifications and counts of the
Accounts, Inventory and other Collateral of any Credit Party. If an Event of
Default has occurred and is continuing, each such Credit Party shall provide
such access to Agent and to each Lender at all times and without advance notice.
Each Credit Party shall make available to Agent and its counsel reasonably
promptly originals or copies of all books and records that Agent may reasonably
request. Each Credit Party shall deliver any document or instrument necessary
for Agent, as it may from time to time request, to obtain records from any
service bureau or other Person that maintains records for such Credit Party, and
shall maintain duplicate records or supporting documentation on media, including
computer tapes and discs owned by such Credit Party. Agent will give Lenders at
least five (5) Business Days' prior written notice of regularly scheduled
audits. Representatives of other Lenders may accompany Agent's representatives
on regularly scheduled audits at no charge to Borrower.
1.15 Taxes.
(a) Any and all payments by Borrower hereunder or under the Notes
shall be made, in accordance with this Section 1.15, free and clear of and
without deduction for any and all present or future Taxes. If Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under the Notes, (i) the sum payable shall be increased as much as
shall be necessary so that after making all required deductions (including
deductions
20
applicable to additional sums payable under this Section 1.15) Agent or Lenders,
as applicable, receive an amount equal to the sum they would have received had
no such deductions been made, (ii) Borrower shall make such deductions, and
(iii) Borrower shall pay the full amount deducted to the relevant taxing or
other authority in accordance with applicable law. Within thirty (30) days after
the date of any payment of Taxes, Borrower shall furnish to Agent the original
or a certified copy of a receipt evidencing payment thereof.
(b) Each Credit Party that is a signatory hereto shall indemnify
and, within ten (10) days of demand therefor, pay Agent and each Lender for the
full amount of Taxes (including any Taxes imposed by any jurisdiction on amounts
payable under this Section 1.15) paid by Agent or such Lender, as appropriate,
and any liability (including penalties, interest and expenses) arising therefrom
or with respect thereto, whether or not such Taxes were correctly or legally
asserted.
(c) Each Lender organized under the laws of a jurisdiction outside
the United States (a "Foreign Lender") as to which payments to be made under
this Agreement or under the Notes are exempt from United States withholding tax
under an applicable statute or tax treaty shall provide to Borrower and Agent a
properly completed and executed IRS Form W-8ECI or Form W-8BEN or other
applicable form, certificate or document prescribed by the IRS or the United
States certifying as to such Foreign Lender's entitlement to such exemption (a
"Certificate of Exemption"). Any foreign Person that seeks to become a Lender
under this Agreement shall provide a Certificate of Exemption to Borrower and
Agent prior to becoming a Lender hereunder. No foreign Person may become a
Lender hereunder if such Person fails to deliver a Certificate of Exemption in
advance of becoming a Lender.
1.16 Capital Adequacy; Increased Costs; Illegality.
(a) If any law, treaty, governmental (or quasi-governmental) rule,
regulation, guideline or order regarding capital adequacy, reserve requirements
or similar requirements or compliance by any Lender with any request or
directive regarding capital adequacy, reserve requirements or similar
requirements (whether or not having the force of law), in each case, adopted
after the Closing Date, from any central bank or other Governmental Authority
increases or would have the effect of increasing the amount of capital, reserves
or other funds required to be maintained by such Lender and thereby reducing the
rate of return on such Lender's capital as a consequence of its obligations
hereunder, then Borrower shall from time to time upon demand by such Lender
(with a copy of such demand to Agent) pay to Agent, for the account of such
Lender, additional amounts sufficient to compensate such Lender for such
reduction. A certificate as to the amount of that reduction and showing the
basis of the computation thereof submitted by such Lender to Borrower and to
Agent shall be presumptive evidence of the matters set forth therein.
(b) If, due to either (i) the introduction of or any change in any
law or regulation (or any change in the interpretation thereof) or (ii) the
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), in each case
adopted after the Closing Date, there shall be any increase in the cost to any
Lender of agreeing to make or making, funding or maintaining any Loan, then
Borrower shall from time to time, upon demand by such Lender (with a copy of
such demand to Agent),
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pay to Agent for the account of such Lender additional amounts sufficient to
compensate such Lender for such increased cost. A certificate as to the amount
of such increased cost, submitted to Borrower and to Agent by such Lender, shall
be presumptive evidence of the matters set forth therein. Each Lender agrees
that, as promptly as practicable after it becomes aware of any circumstances
referred to above which would result in any such increased cost, the affected
Lender shall, to the extent not inconsistent with such Lender's internal
policies of general application, use reasonable commercial efforts to minimize
costs and expenses incurred by it and payable to it by Borrower pursuant to this
Section 1.16(b).
(c) Notwithstanding anything to the contrary contained herein, if
the introduction of or any change in any law or regulation (or any change in the
interpretation thereof) shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any Lender to agree
to make or to make or to continue to fund or maintain any LIBOR Loan, then,
unless that Lender is able to make or to continue to fund or to maintain such
LIBOR Loan at another branch or office of that Lender without, in that Lender's
reasonable opinion, materially adversely affecting it or its Loans or the income
obtained therefrom, on notice thereof and demand therefor by such Lender to
Borrower through Agent, (i) the obligation of such Lender to agree to make or to
make or to continue to fund or maintain LIBOR Loans shall terminate and (ii)
Borrower shall forthwith prepay in full all outstanding LIBOR Loans owing to
such Lender, together with interest accrued thereon, unless Borrower, within
five (5) Business Days after the delivery of such notice and demand, converts
all LIBOR Loans into Index Rate Loans.
(d) Within thirty (30) days after receipt by Borrower of written
notice and demand from any Lender (an "Affected Lender") for payment of
additional amounts or increased costs as provided in Sections 1.15(a), 1.16(a)
or 1.16(b), Borrower may, at its option, notify Agent and such Affected Lender
of its intention to replace the Affected Lender. So long as no Default or Event
of Default has occurred and is continuing, Borrower, with the consent of Agent,
may obtain, at Borrower's expense, a replacement Lender ("Replacement Lender")
for the Affected Lender, which Replacement Lender must be reasonably
satisfactory to Agent. If Borrower obtains a Replacement Lender within ninety
(90) days following notice of its intention to do so, the Affected Lender must
sell and assign its Loans and Commitments to such Replacement Lender for an
amount equal to the principal balance of all Loans held by the Affected Lender
and all accrued interest and Fees with respect thereto through the date of such
sale and such assignment shall not require the payment of an assignment fee to
Agent; provided, that Borrower shall have reimbursed such Affected Lender for
the additional amounts or increased costs that it is entitled to receive under
this Agreement through the date of such sale and assignment. Notwithstanding the
foregoing, Borrower shall not have the right to obtain a Replacement Lender if
the Affected Lender rescinds its demand for increased costs or additional
amounts within 15 days following its receipt of Borrower's notice of intention
to replace such Affected Lender. Furthermore, if Borrower gives a notice of
intention to replace and does not so replace such Affected Lender within ninety
(90) days thereafter, Borrower's rights under this Section 1.16(d) shall
terminate with respect to such Affected Lender and Borrower shall promptly pay
all increased costs or additional amounts demanded by such Affected Lender
pursuant to Sections 1.15(a), 1.16(a) and 1.16(b).
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1.17 Single Loan. All Loans to Borrower and all of the other
Obligations of Borrower arising under this Agreement and the other Loan
Documents shall constitute one general obligation of Borrower secured, until the
Termination Date, by all of the Collateral.
2. CONDITIONS PRECEDENT
2.1 Conditions to the Initial Loans. No Lender shall be obligated
to make any Loan or incur any Letter of Credit Obligations on the Closing Date,
or to take, fulfill, or perform any other action hereunder, until the following
conditions have been satisfied or provided for in a manner reasonably
satisfactory to Agent, or waived in writing by Agent and Requisite Lenders:
(a) Credit Agreement; Loan Documents. This Agreement or
counterparts hereof shall have been duly executed by, and delivered to,
Borrower, each other Credit Party, Agent and Lenders; and Agent shall have
received such documents, instruments, agreements and legal opinions as Agent
shall reasonably request in connection with the transactions contemplated by
this Agreement and the other Loan Documents, including all those listed in the
Closing Checklist attached hereto as Annex D, each in form and substance
reasonably satisfactory to Agent.
(b) Repayment of Prior Lender Obligations; Satisfaction of
Outstanding L/Cs. (i) Agent shall have received a fully executed original of a
pay-off letter reasonably satisfactory to Agent confirming that all of the Prior
Lender Obligations will be repaid in full from the proceeds of the Term Loans
and the initial Revolving Credit Advance and all Liens upon any of the property
of Borrower or any of its Subsidiaries in favor of Prior Lender shall be
terminated by Prior Lender immediately upon such payment; and (ii) all letters
of credit issued or guaranteed by Prior Lender shall have been cash
collateralized or supported by a Letter of Credit issued pursuant to Annex B, as
mutually agreed upon by Agent, Borrower and Prior Lender.
(c) Approvals. Agent shall have received (i) satisfactory evidence
that the Credit Parties have obtained all required consents and approvals of all
Persons including all requisite Governmental Authorities, to the execution,
delivery and performance of this Agreement and the other Loan Documents and the
consummation of the Related Transactions or (ii) an officer's certificate in
form and substance reasonably satisfactory to Agent affirming that no such
consents or approvals are required.
(d) Opening Availability. The Eligible Accounts and Eligible
Inventory supporting the initial Revolving Credit Advance and the initial Letter
of Credit Obligations incurred and the amount of the Reserves to be established
on the Closing Date shall be sufficient in value, as determined by Agent, to
provide Borrower with Borrowing Availability, after giving effect to the initial
Revolving Credit Advance, the incurrence of any initial Letter of Credit
Obligations and the consummation of the Related Transactions (on a pro forma
basis, with trade payables being paid currently, and expenses and liabilities
being paid in the ordinary course of business and without acceleration of sales,
it being understood and agreed that amounts payable in connection with the
Borrower's settlement with Georgetown Steel Company LLC shall be considered
current trade payables that are within payment terms.) of at least $10,000,000.
23
(e) Payment of Fees. Borrower shall have paid the Fees required to
be paid on the Closing Date in the respective amounts specified in Section 1.9
(including the Fees specified in the GE Capital Fee Letter), and shall have
reimbursed Agent for all fees, costs and expenses of closing presented as of the
Closing Date.
(f) Capital Structure: Other Indebtedness. The capital structure
of each Credit Party and the terms and conditions of all Indebtedness of each
Credit Party shall be acceptable to Agent in its sole discretion.
(g) Due Diligence. Agent shall have completed its business and
legal due diligence, including a roll forward of its previous Collateral audit
with results reasonably satisfactory to Agent.
(h) Consummation of Related Transactions. Agent shall have
received fully executed copies of each of the Related Transactions Documents,
each of which shall be in full force and effect in form and substance reasonably
satisfactory to Agent. The Related Transactions shall have been consummated in
accordance with the terms of the Related Transactions Documents.
2.2 Further Conditions to Each Loan. Except as otherwise expressly
provided herein (including, without limitation, Section 1.1(a)(iii)), no Lender
shall be obligated to fund any Advance, convert or continue any Loan as a LIBOR
Loan or incur any Letter of Credit Obligation, if, as of the date thereof:
(a) any representation or warranty by any Credit Party contained
herein or in any other Loan Document to which a Credit Party is a party is
untrue or incorrect as of such date as determined by Agent or Requisite Lenders,
except to the extent that such representation or warranty expressly relates to
an earlier date and except for changes therein expressly permitted or expressly
contemplated by this Agreement, and Agent or Requisite Revolving Lenders have
determined not to make such Advance, convert or continue any Loan as LIBOR Loan
or incur such Letter of Credit Obligation as a result of the fact that such
warranty or representation is untrue or incorrect;
(b) (i) any Default or Event of Default has occurred and is
continuing or would result after giving effect to any Advance (or the incurrence
of any Letter of Credit Obligation), and Agent or Requisite Revolving Lenders
shall have determined not to make any Advance, convert or continue any Loan as a
LIBOR Loan or incur any Letter of Credit Obligation as a result of that Default
or Event of Default; or
(c) after giving effect to any Advance (or the incurrence of any
Letter of Credit Obligations), the outstanding principal amount of the Revolving
Loan would exceed the lesser of the Borrowing Base and the Maximum Amount, in
each case, less the then outstanding principal amount of the Swing Line Loan.
The request and acceptance by Borrower of the proceeds of any Advance, the
incurrence of any Letter of Credit Obligations or the conversion or continuation
of any Loan into, or as, a LIBOR Loan shall be deemed to constitute, as of the
date thereof, (i) a representation and warranty by Borrower that the conditions
in this Section 2.2 have been satisfied and (ii) a reaffirmation by
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Borrower of the granting and continuance of Agent's Liens, on behalf of itself
and Lenders, pursuant to the Collateral Documents.
3. REPRESENTATIONS AND WARRANTIES
To induce Lenders to make the Loans and to incur Letter of Credit
Obligations, the Credit Parties executing this Agreement, jointly and severally,
make the following representations and warranties to Agent and each Lender with
respect to all Credit Parties,each and all of which shall survive the execution
and delivery of this Agreement.
3.1 Corporate Existence; Compliance with Law. Each Credit Party
(a) is a corporation, limited liability company or limited partnership duly
organized, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation or organization set forth in Disclosure
Schedule (3.1); (b) is duly qualified to conduct business and is in good
standing in each other jurisdiction where its ownership or lease of property or
the conduct of its business requires such qualification, except where the
failure to be so qualified would not result in exposure to losses or liabilities
which could reasonably be expected to have a Material Adverse Effect; (c) has
the requisite power and authority and the legal right to own, pledge, mortgage
or otherwise encumber and operate its properties, to lease the property it
operates under lease and to conduct its business as now conducted or proposed to
be conducted; (d) subject to specific representations regarding Environmental
Laws, has all licenses, permits, consents or approvals from or by, and has made
all material filings with, and has given all notices to, all Governmental
Authorities having jurisdiction, to the extent required for such ownership,
operation and conduct; (e) is in compliance with its charter and bylaws or
partnership or operating agreement, as applicable; and (f) subject to specific
representations set forth herein regarding ERISA, Environmental Laws, tax and
other laws, is in compliance with all applicable provisions of law, except where
the failure to comply, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
3.2 Executive Offices, Collateral Locations, FEIN. As of the
Closing Date, each Credit Party's name as it appears in official filings in its
state of incorporation or organization, state of incorporation or organization,
organization type, organization number, if any, issued by its state
incorporation or organization, and the current location of each Credit Party's
chief executive office and the warehouses and premises at which any Collateral
is located as of the Closing Date (or could be located at a future date) are set
forth in Disclosure Schedule (3.2). In addition, Disclosure Schedule (3.2) sets
forth the locations of warehouses and premises at which any Collateral has been
located at any time within four (4) months preceding the Closing Date. In
addition, Disclosure Schedule (3.2) lists the federal employer identification
number of each Credit Party.
3.3 Corporate Power, Authorization, Enforceable Obligations. The
execution, delivery and performance by each Credit Party of the Loan Documents
to which it is a party and the creation of all Liens provided for therein: (a)
are within such Person's power; (b) have been duly authorized by all necessary
corporate, limited liability company or limited partnership action; (c) do not
contravene any provision of such Person's charter, bylaws or partnership or
operating agreement as applicable; (d) do not violate any law or regulation, or
any order or decree of any court or Governmental Authority; (e) do not conflict
with or result in the
25
breach or termination of, constitute a default under or accelerate or permit the
acceleration of any performance required by, any indenture, mortgage, deed of
trust, lease, agreement or other instrument to which such Person is a party or
by which such Person or any of its property is bound; (f) do not result in the
creation or imposition of any Lien upon any of the property of such Person other
than those in favor of Agent, on behalf of itself and Lenders, pursuant to the
Loan Documents; and (g) do not require the consent or approval of any
Governmental Authority or any other Person, except those referred to in Section
2.1(c), all of which will have been duly obtained, made or complied with prior
to the Closing Date. Each of the Loan Documents shall be duly executed and
delivered by each Credit Party that is a party thereto and each such Loan
Document shall constitute a legal, valid and binding obligation of such Credit
Party enforceable against it in accordance with its terms.
3.4 Financial Statements and Projections. Except for the
Projections, all Financial Statements concerning Holdings and its Subsidiaries
that are referred to below have been prepared in accordance with GAAP
consistently applied throughout the periods covered (except as disclosed therein
and except, with respect to unaudited Financial Statements, for the absence of
footnotes and normal year-end audit adjustments) and present fairly in all
material respects the financial position of the Persons covered thereby as at
the dates thereof and the results of their operations and cash flows for the
periods then ended.
(a) Financial Statements. The following Financial Statements
attached hereto as Disclosure Schedule (3.4(a)) have been delivered on the date
hereof:
(i) The preliminary audited consolidated balance sheet at
September 27, 2003 and the related consolidated statements of income and cash
flows of Holdings and its Subsidiaries for the Fiscal Year then ended.
(ii) The audited consolidated balance sheet at September 28,
2002 and the related statements of income and cash flows of Holdings and its
Subsidiaries for the Fiscal Year then ended certified by Xxxxx Xxxxxxxx LLP.
(iii) The audited consolidated balance sheet at September 29,
2001 and the related statements of income and cash flows of Holdings and its
Subsidiaries for the Fiscal Year then ended, certified by Xxxxxx Xxxxxxxx LLP.
(iv) The unaudited balance sheet(s) at March 27, 2004 and the
related statement(s) of income and cash flows of Holdings and its Subsidiaries
for the two (2) Fiscal Quarters then ended.
(b) Pro Forma. The Pro Forma delivered on the date hereof and
attached hereto as Disclosure Schedule (3.4(b)) was prepared by Borrower giving
pro forma effect to the Related Transactions, was based on the unaudited
consolidated balance sheet of Holdings and its Subsidiaries dated March 27,
2004, and was prepared in accordance with GAAP, with only such adjustments
thereto as would be required in accordance with GAAP.
(c) Projections. The Projections delivered on the date hereof and
attached hereto as Disclosure Schedule (3.4(c)) have been prepared by Borrower
in light of the past operations of its businesses, but including future payments
of known contingent liabilities, and
26
reflect projections for the period beginning on February 29, 2004 through March
5, 2005, on a month-by-month basis. The Projections apply the same accounting
principles as those used in the preparation of the financial statements
described above and the estimates and assumptions stated therein, all of which
Borrower believes to be reasonable and fair in light of current conditions and
current facts known to Borrower and, as of the Closing Date, reflect Borrower's
good faith and reasonable estimates of the future financial performance of
Borrower for the period set forth therein, subject to any adjustments arising
from the completion of the audit of the consolidated Financial Statements for
the Fiscal Year ended September 27, 2003 that impact the periods projected. The
Projections are not a guaranty of future performance, and actual results may
differ from the Projections.
3.5 Material Adverse Effect. Between March 27, 2004 and the
Closing Date, (a) no Credit Party has incurred any obligations, contingent or
noncontingent liabilities, liabilities for Charges, long-term leases or unusual
forward or long-term commitments that are not reflected in the Pro Forma or
Projections and that, alone or in the aggregate, could reasonably be expected to
have a Material Adverse Effect, (b) no contract, lease or other agreement or
instrument has been entered into by any Credit Party or has become binding upon
any Credit Party's assets and no law or regulation applicable to any Credit
Party has been adopted that has had or could reasonably be expected to have a
Material Adverse Effect, and (c) no Credit Party is in default and to the best
of Borrower's knowledge no third party is in default under any material
contract, lease or other agreement or instrument, that alone or in the aggregate
could reasonably be expected to have a Material Adverse Effect. Since March 27,
2004 no event has occurred, that alone or together with other events, could
reasonably be expected to have a Material Adverse Effect.
3.6 Ownership of Property; Liens. As of the Closing Date, the real
estate ("Real Estate") listed in Disclosure Schedule (3.6) constitutes all of
the real property owned, leased, subleased, or used by any Credit Party. Each
Credit Party owns good and marketable fee simple title to all of its owned Real
Estate, and valid and marketable leasehold interests in all of its leased Real
Estate, all as described on Disclosure Schedule (3.6), and copies of all such
leases or a summary of terms thereof reasonably satisfactory to Agent have been
delivered to Agent. Disclosure Schedule (3.6) further describes any Real Estate
with respect to which any Credit Party is a lessor, sublessor or assignor as of
the Closing Date. Each Credit Party also has good and marketable title to, or
valid leasehold interests in, all of its personal property and assets. As of the
Closing Date, none of the properties and assets of any Credit Party are subject
to any Liens other than Permitted Encumbrances, and there are no facts,
circumstances or conditions known to any Credit Party that may result in any
Liens (including Liens arising under Environmental Laws) other than Permitted
Encumbrances. Each Credit Party has received all deeds, assignments, waivers,
consents, nondisturbance and attornment or similar agreements, bills of sale and
other documents, and has duly effected all recordings, filings and other actions
necessary to establish, protect and perfect such Credit Party's right, title and
interest in and to all such Real Estate and other properties and assets.
Disclosure Schedule (3.6) also describes any purchase options, rights of first
refusal or other similar contractual rights pertaining to any Real Estate. As of
the Closing Date, no portion of any Credit Party's Real Estate has suffered any
material damage by fire or other casualty loss that has not heretofore been
repaired and restored in all material respects to its original condition or
otherwise remedied. As of the Closing Date, all material permits required to
have been issued or appropriate to enable
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the Real Estate to be lawfully occupied and used for all of the purposes for
which it is currently occupied and used have been lawfully issued and are in
full force and effect.
3.7 Labor Matters. Except as set forth on Disclosure Schedule
(3.7), as of the Closing Date: (a) no strikes or other material labor disputes
against any Credit Party are pending or, to any Credit Party's knowledge,
threatened; (b) hours worked by and payment made to employees of each Credit
Party comply with the Fair Labor Standards Act and each other federal, state,
local or foreign law applicable to such matters; (c) all payments due from any
Credit Party for employee health and welfare insurance have been paid or accrued
as a liability on the books of such Credit Party; (d) no Credit Party is a party
to or bound by any collective bargaining agreement, management agreement,
consulting agreement, employment agreement, bonus, restricted stock, stock
option, or stock appreciation plan or agreement or any similar plan, agreement
or arrangement (and true and complete copies of any agreements described on
Disclosure Schedule (3.7) have been delivered to Agent); (e) there is no
organizing activity involving any Credit Party pending or, to any Credit Party's
knowledge, threatened by any labor union or group of employees; (f) there are no
representation proceedings pending or, to any Credit Party's knowledge,
threatened with the National Labor Relations Board, and no labor organization or
group of employees of any Credit Party has made a pending demand for
recognition; and (g) there are no material complaints or charges against any
Credit Party pending or, to the knowledge of any Credit Party, threatened to be
filed with any Governmental Authority or arbitrator based on, arising out of, in
connection with, or otherwise relating to the employment or termination of
employment by any Credit Party of any individual.
3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock and
Indebtedness. Except as set forth in Disclosure Schedule (3.8), as of the
Closing Date, no Credit Party has any Subsidiaries, is engaged in any joint
venture or partnership with any other Person, or is an Affiliate of any other
Person. Except for Holdings, all of the issued and outstanding Stock of each
Credit Party is owned by each of the Stockholders and in the amounts set forth
in Disclosure Schedule (3.8). Except as set forth in Disclosure Schedule (3.8),
there are no outstanding rights to purchase, options, warrants or similar rights
or agreements pursuant to which any Credit Party may be required to issue, sell,
repurchase or redeem any of its Stock or other equity securities or any Stock or
other equity securities of its Subsidiaries. All outstanding Indebtedness and
Guaranteed Indebtedness of each Credit Party as of the Closing Date (except for
the Obligations) is described in Section 6.3 (including Disclosure Schedule
(6.3)).
3.9 Government Regulation. No Credit Party is an "investment
company" or an "affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company," as such terms are defined in the Investment
Company Act of 1940. No Credit Party is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, or any other federal
or state statute that restricts or limits its ability to incur Indebtedness or
to perform its obligations hereunder. The making of the Loans by Lenders to
Borrower, the incurrence of the Letter of Credit Obligations on behalf of
Borrower, the application of the proceeds thereof and repayment thereof and the
consummation of the Related Transactions will not violate any provision of any
such statute or any rule, regulation or order issued by the Securities and
Exchange Commission.
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3.10 Margin Regulations. No Credit Party is engaged, nor will it
engage, principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
stock" as such terms are defined in Regulation U of the Federal Reserve Board as
now and from time to time hereafter in effect (such securities being referred to
herein as "Margin Stock"). No Credit Party owns any Margin Stock, and none of
the proceeds of the Loans or other extensions of credit under this Agreement
will be used, directly or indirectly, for the purpose of purchasing or carrying
any Margin Stock, for the purpose of reducing or retiring any Indebtedness that
was originally incurred to purchase or carry any Margin Stock or for any other
purpose that might cause any of the Loans or other extensions of credit under
this Agreement to be considered a "purpose credit" within the meaning of
Regulations T, U or X of the Federal Reserve Board. No Credit Party will take or
permit to be taken any action that might cause any Loan Document to violate any
regulation of the Federal Reserve Board.
3.11 Taxes. All Federal and other material tax returns, reports and
statements, including information returns, required by any Governmental
Authority to be filed by any Credit Party have been filed with the appropriate
Governmental Authority, and all Charges have been paid prior to the date on
which any fine, penalty, interest or late charge may be added thereto for
nonpayment thereof, excluding Charges or other amounts being contested in
accordance with Section 5.2(b) and unless the failure to so file or pay would
not reasonably be expected to result in fines, penalties or interest in excess
of $50,000 in the aggregate. Proper and accurate amounts have been withheld by
each Credit Party from its respective employees for all periods in full and
complete compliance with all applicable federal, state, local and foreign laws
and such withholdings have been timely paid to the respective Governmental
Authorities. Disclosure Schedule (3.11) sets forth as of the Closing Date those
taxable years for which any Credit Party's tax returns are currently being
audited by the IRS or any other applicable Governmental Authority and any
assessments or threatened assessments in connection with such audit, or
otherwise currently outstanding. Except as described in Disclosure Schedule
(3.11), as of the Closing Date, no Credit Party has executed or filed with the
IRS or any other Governmental Authority any agreement or other document
extending, or having the effect of extending, the period for assessment or
collection of any Charges. None of the Credit Parties and their respective
predecessors are liable for any Charges: (a) under any agreement (including any
tax sharing agreements) or (b) to each Credit Party's knowledge, as a
transferee. As of the Closing Date, no Credit Party has agreed or been requested
to make any adjustment under IRC Section 481(a), by reason of a change in
accounting method or otherwise, which would reasonably be expected to have a
Material Adverse Effect.
3.12 ERISA.
(a) Disclosure Schedule (3.12) lists as of the Closing Date, all
Plans and separately identifies all Pension Plans, including Title IV Plans,
Multiemployer Plans, ESOPs and Welfare Plans, including all Retiree Welfare
Plans. Copies of all such listed Plans, together with a copy of the latest form.
IRS/DOL 5500-series for each such Plan have been delivered to Agent. Except with
respect to Multiemployer Plans, each Qualified Plan has been determined by the
IRS to qualify under Section 401 of the IRC, the trusts created thereunder have
been determined to be exempt from tax under the provisions of Section 501 of the
IRC, and, nothing has occurred that would cause the loss of such qualification
or tax-exempt status. Each Plan is in
29
compliance in all material respects with the applicable provisions of ERISA and
the IRC, including the timely filing of all reports required under the IRC or
ERISA, including the statement required by 29 CFR Section 2520.104-23. Neither
any Credit Party nor ERISA Affiliate has failed to make any material
contribution or pay any material amount due as required by either Section 412 of
the IRC or Section 302 of ERISA or the terms of any such Plan. Neither any
Credit Party nor ERISA Affiliate has engaged in a "prohibited transaction," as
defined in Section 406 of ERISA and Section 4975 of the IRC, in connection with
any Plan, that would subject any Credit Party to a material tax on prohibited
transactions imposed by Section 502(i) of ERISA or Section 4975 of the IRC.
(b) Except as set forth in Disclosure Schedule (3.12): (i) no
Title IV Plan has any material Unfunded Pension Liability; (ii) no ERISA Event
or event described in Section 4062(e) of ERISA with respect to any Title IV Plan
has occurred or is reasonably expected to occur; (iii) there are no pending, or
to the knowledge of any Credit Party, threatened material claims (other than
claims for benefits in the normal course), sanctions, actions or lawsuits,
asserted or instituted against any Plan or any Person as fiduciary or sponsor of
any Plan; (iv) no Credit Party or ERISA Affiliate has incurred or reasonably
expects to incur any material liability as a result of a complete or partial
withdrawal from a Multiemployer Plan; (v) within the last five years no Title IV
Plan of any Credit Party or ERISA Affiliate has been terminated, whether or not
in a "standard termination" as that term is used in Section 4041 of ERISA, nor
has any Title IV Plan of any Credit Party or ERISA Affiliate (determined at any
time within the past five years) with material Unfunded Pension Liabilities been
transferred outside of the "controlled group" (within the meaning of Section
4001(a)(14) of ERISA) of any Credit Party or ERISA Affiliate; (vi) except in the
case of any ESOP, Stock of all Credit Parties and their ERISA Affiliates makes
up, in the aggregate, no more than 10% of fair market value of the assets of any
Plan measured on the basis of fair market value as of the latest valuation date
of any Plan; and (vii) no liability under any Title IV Plan has been satisfied
with the purchase of a contract from an insurance company that is not rated AAA
by the Standard & Poor's Corporation or an equivalent rating by another
nationally recognized rating agency.
3.13 No Litigation. No action, claim, lawsuit, demand,
investigation or proceeding is now pending or, to the knowledge of any Credit
Party, threatened against any Credit Party, before any Governmental Authority or
before any arbitrator or panel of arbitrators (collectively, "Litigation"), (a)
that challenges any Credit Party's right or power to enter into or perform any
of its obligations under the Loan Documents to which it is a party, or the
validity or enforceability of any Loan Document or any action taken thereunder,
or (b) that has a reasonable risk of being determined adversely to any Credit
Party and that, if so determined, could reasonably be expected to have a
Material Adverse Effect. Except as set forth on Disclosure Schedule (3.13), as
of the Closing Date there is no Litigation pending or threatened that seeks
damages in excess of $250,000 or injunctive relief against, or alleges criminal
misconduct of, any Credit Party.
3.14 Brokers. Except as set forth on Disclosure Schedule (3.14), no
broker or finder acting on behalf of any Credit Party or Affiliate thereof
brought about the obtaining, making or closing of the Loans or the Related
Transactions, and no Credit Party or Affiliate thereof has any obligation to any
Person in respect of any finder's or brokerage fees in connection therewith.
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3.15 Intellectual Property. As of the Closing Date, each Credit
Party owns or has rights to use all Intellectual Property necessary to continue
to conduct its business as now conducted by it or presently proposed to be
conducted by it, and each Patent, Trademark, Copyright and License is listed,
together with application or registration numbers, as applicable, in Disclosure
Schedule (3.15). Each Credit Party conducts its business and affairs without
infringement of or interference with any Intellectual Property of any other
Person in any material respect. Except as set forth in Disclosure Schedule
(3.15), no Credit Party is aware of any material infringement claim by any other
Person with respect to any Intellectual Property.
3.16 Full Disclosure. No information contained in this Agreement,
any of the other Loan Documents, any Projections, Financial Statements or
Collateral Reports or other written reports from time to time prepared by any
Credit Party and delivered hereunder or any written statement prepared by any
Credit Party and furnished by or on behalf of any Credit Party to Agent or any
Lender pursuant to the terms of this Agreement contains or will contain any
untrue statement of a material fact or omits or will omit to state a material
fact necessary to make the statements contained herein or therein not misleading
in light of the circumstances under which they were made. Projections from time
to time delivered hereunder are or will be based upon the estimates and
assumptions stated therein, all of which Borrower believed at the time of
delivery to be reasonable and fair in light of current conditions and current
facts known to Borrower as of such delivery date, and reflect Borrower's good
faith and reasonable estimates of the future financial performance of Borrower
and of the other information projected therein for the period set forth therein.
Such Projections are not a guaranty of future performance and actual results may
differ from those set forth in such Projections. The Liens granted to Agent, on
behalf of itself and Lenders, pursuant to the Collateral Documents will at all
times be fully perfected first priority Liens in and to the Collateral described
therein, subject, as to priority, only to Permitted Encumbrances.
3.17 Environmental Matters.
(a) Except as set forth in Disclosure Schedule (3.17), as of the
Closing Date: (i) the Real Estate is free of contamination from any Hazardous
Material except for such contamination that would not adversely impact the value
or marketability of such Real Estate and that would not result in Environmental
Liabilities that could reasonably be expected to exceed $100,000; (ii) no Credit
Party has caused or suffered to occur any material Release of Hazardous
Materials on, at, in, under, above, to, from or about any of its Real Estate;
(iii) the Credit Parties are and have been in compliance with all Environmental
Laws, except for such noncompliance that would not result in Environmental
Liabilities which could reasonably be expected to exceed $100,000; (iv) the
Credit Parties have obtained, and are in compliance with, all Environmental
Permits required by Environmental Laws for the operations of their respective
businesses as presently conducted or as proposed to be conducted, except where
the failure to so obtain or comply with such Environmental Permits would not
result in Environmental Liabilities that could reasonably be expected to exceed
$100,000, and all such Environmental Permits are valid, uncontested and in good
standing; (v) no Credit Party is involved in operations or knows of any facts,
circumstances or conditions, including any Releases of Hazardous Materials, that
are likely to result in any Environmental Liabilities of such Credit Party which
could reasonably be expected to exceed $100,000; (vi) there is no Litigation
arising under or related to any Environmental Laws, Environmental Permits or
Hazardous Material that seeks damages,
31
penalties, fines, costs or expenses in excess of $100,000 or injunctive relief
against, or that alleges criminal misconduct by, any Credit Party; (vii) no
notice has been received by any Credit Party identifying it as a "potentially
responsible party" or requesting information under CERCLA or analogous state
statutes, and to the knowledge of the Credit Parties, there are no facts,
circumstances or conditions that may result in any Credit Party being identified
as a "potentially responsible party" under CERCLA or analogous state statutes;
and (viii) the Credit Parties have provided to Agent copies of all existing
environmental reports, reviews and audits and all written information pertaining
to actual or potential Environmental Liabilities, in each case relating to any
Credit Party.
(b) Each Credit Party hereby acknowledges and agrees that Agent
(i) is not now, and has not ever been, in control of any of the Real Estate or
any Credit Party's affairs, and (ii) does not have the capacity through the
provisions of the Loan Documents or otherwise to influence any Credit Party's
conduct with respect to the ownership, operation or management of any of its
Real Estate or compliance with Environmental Laws or Environmental Permits.
3.18 Insurance. Disclosure Schedule (3.18) lists all insurance
policies of any nature maintained, as of the Closing Date, for current
occurrences by each Credit Party, as well as a summary of the terms of each such
policy.
3.19 Deposit and Disbursement Accounts. Disclosure Schedule (3.19)
lists all banks and other financial institutions at which any Credit Party
maintains deposit or other accounts as of the Closing Date, including any
Disbursement Accounts, and such Schedule correctly identifies the name, address
and telephone number of each depository, the name in which the account is held,
a description of the purpose of the account, and the complete account number
therefor.
3.20 Government Contracts. Except as set forth in Disclosure
Schedule (3.20), as of the Closing Date, no Credit Party is a party to any
contract or agreement with any Governmental Authority and no Credit Party's
Accounts are subject to the Federal Assignment of Claims Act (31 U.S.C. Section
3727) or any similar state or local law.
3.21 Customer and Trade Relations. As of the Closing Date, there
exists no actual or, to the knowledge of any Credit Party, threatened
termination or cancellation of, or any material adverse modification or change
in: the business relationship of any Credit Party with any customer or group of
customers whose purchases during the preceding 12 months caused them to be
ranked among the ten largest customers of such Credit Party; or the business
relationship of any Credit Party with any supplier essential to its operations.
3.22 Bonding; Licenses. Except as set forth on Disclosure Schedule
(3.22), as of the Closing Date, no Credit Party is a party to or bound by any
surety bond agreement or bonding requirement with respect to products or
services sold by it or any trademark or patent license agreement with respect to
products sold by it.
3.23 Solvency. Both before and after giving effect to (a) the Loans
and Letter of Credit Obligations to be made or incurred on the Closing Date or
such other date as Loans and Letter of Credit Obligations requested hereunder
are made or incurred, (b) the
32
disbursement of the proceeds of such Loans pursuant to the instructions of
Borrower, (c) the Refinancing and the consummation of the other Related
Transactions and (d) the payment and accrual of all transaction costs in
connection with the foregoing, each Credit Party is and will be Solvent.
3.24 Status of Holdings. Prior to the Closing Date, Holdings will
not have engaged in any business or incurred any Indebtedness or any other
liabilities (except in connection with its corporate formation, the Prior Lender
Obligations, the Related Transactions Documents and this Agreement).
3.25 Inactive Subsidiaries. No Inactive Subsidiary (a) has any
assets with a net book value in excess of $10,000, (b) has any material
liabilities or (c) is engaged in any trade or business.
3.26 Motor Vehicles As of the Effective Date, the value of all
motor vehicles owned by Credit Parties does not exceed $250,000 in the
aggregate.
3.27 Vacant Land Lease No Collateral is stored or located on the
property that is subject to the Vacant Land Lease.
4. FINANCIAL STATEMENTS AND INFORMATION
4.1 Reports and Notices.
(a) Each Credit Party executing this Agreement hereby agrees that
from and after the Closing Date and until the Termination Date, it shall deliver
to Agent or to Agent and Lenders, as required, the Financial Statements,
notices, Projections and other information at the times, to the Persons and in
the manner set forth in Annex E.
(b) Each Credit Party executing this Agreement hereby agrees that
from and after the Closing Date and until the Termination Date, it shall deliver
to Agent or to Agent and Lenders, as required, the various Collateral Reports
(including Borrowing Base Certificates in the form of Exhibit 4.1(b)) at the
times, to the Persons and in the manner set forth in Annex F.
4.2 Communication with Accountants. Each Credit Party executing
this Agreement authorizes Agent and each Lender, so long as an Event of Default
has occurred and is continuing, to communicate directly with its independent
certified public accountants, including Xxxxx Xxxxxxxx LLP, and authorizes and
shall instruct those accountants and advisors to communicate to Agent and each
Lender information relating to any Credit Party with respect to the business,
results of operations and financial condition of any Credit Party; provided,
that Agent shall give a representative of the Borrower reasonable opportunity to
participate in such communications.
5. AFFIRMATIVE COVENANTS
Each Credit Party executing this Agreement jointly and severally
agrees as to all Credit Parties that from and after the date hereof and until
the Termination Date:
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5.1 Maintenance of Existence and Conduct of Business. Each Credit
Party shall: do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate existence and its material rights and
franchises; continue to conduct its business substantially as now conducted or
as otherwise permitted hereunder; at all times maintain, preserve and protect
all of its assets and properties used or useful in the conduct of its business,
and keep the same in good repair, working order and condition in all material
respects (taking into consideration ordinary wear and tear) (except for Real
Estate Held for Sale, which will be maintained adequately in order to preserve
the value and marketability of such real estate) and from time to time make, or
cause to be made, all necessary or appropriate repairs, replacements and
improvements thereto consistent with industry practices; and transact business
only in such corporate and trade names as are set forth in Disclosure Schedule
(5.1).
5.2 Payment of Charges.
(a) Subject to Section 5.2(b), each Credit Party shall pay and
discharge or cause to be paid and discharged promptly all Charges payable by it,
including (i) Charges imposed upon it, its income and profits, or any of its
property (real, personal or mixed) and all Charges with respect to tax, social
security and unemployment withholding with respect to its employees, (ii) lawful
claims for labor, materials, supplies and services or otherwise, and (iii) all
storage or rental charges payable to warehousemen and bailees, in each case,
before any thereof shall become past due, except in the case of clauses (ii) and
(iii) where the failure to pay or discharge such Charges would not result in
aggregate liabilities in excess of $200,000.
(b) Each Credit Party may in good faith contest, by appropriate
proceedings, the validity or amount of any Charges, Taxes or claims described in
Section 5.2(a); provided, that (i) adequate reserves with respect to such
contest are maintained on the books of such Credit Party, in accordance with
GAAP; (ii) no Lien shall be imposed to secure payment of such Charges (other
than payments to warehousemen and/or bailees) that is superior to any of the
Liens securing payment of the Obligations and such contest is maintained and
prosecuted continuously and with diligence and operates to suspend collection or
enforcement of such Charges, (iii) none of the Collateral becomes subject to
forfeiture or loss as a result of such contest, and (iv) such Credit Party shall
promptly pay or discharge such contested Charges, Taxes or claims and all
additional charges, interest, penalties and expenses, if any, and shall deliver
to Agent evidence reasonably acceptable to Agent of such compliance, payment or
discharge, if such contest is terminated or discontinued adversely to such
Credit Party or the conditions set forth in this Section 5.2(b) are no longer
met.
5.3 Books and Records. Each Credit Party shall keep adequate books
and records with respect to its business activities in which proper entries,
reflecting all financial transactions, are made in accordance with GAAP and on a
basis consistent with the Financial Statements attached as Disclosure Schedule
(3.4(a)).
5.4 Insurance; Damage to or Destruction of Collateral.
(a) The Credit Parties shall, at their sole cost and expense,
maintain the policies of insurance described on Disclosure Schedule (3.18) and
Keyman Life Insurance as in effect on the date hereof or otherwise in form and
amounts and with insurers reasonably
34
acceptable to Agent. Such policies of insurance (or the loss payable and
additional insured endorsements delivered to Agent) shall contain provisions
pursuant to which the insurer agrees to provide thirty (30) days prior written
notice to Agent in the event of any non-renewal, cancellation or amendment of
any such insurance policy. If any Credit Party at any time or times hereafter
shall fail to obtain or maintain any of the policies of insurance required above
or to pay all premiums relating thereto, Agent may at any time or times
thereafter obtain and maintain such policies of insurance and pay such premiums
and take any other action with respect thereto that Agent deems advisable. Agent
shall have no obligation to obtain insurance for any Credit Party or pay any
premiums therefor. By doing so, Agent shall not be deemed to have waived any
Default or Event of Default arising from any Credit Party's failure to maintain
such insurance or pay any premiums therefor. All sums so disbursed, including
reasonable attorneys' fees, court costs and other charges related thereto, shall
be payable on demand by Borrower to Agent and shall be additional Obligations
hereunder secured by the Collateral.
(b) Agent reserves the right at any time upon any change in any
Credit Party's risk profile (including any change in the product mix maintained
by any Credit Party or any laws affecting the potential liability of such Credit
Party) to require additional forms and limits of insurance to, in Agent's
reasonable opinion, adequately protect both Agent's and Lenders' interests in
all or any portion of the Collateral and to ensure that each Credit Party is
protected by insurance in amounts and with coverage customary for its industry.
If reasonably requested by Agent, each Credit Party shall deliver to Agent from
time to time a report of a reputable insurance broker reasonably satisfactory to
Agent, with respect to its insurance policies.
(c) Each Credit Party shall deliver to Agent, in form and
substance reasonably satisfactory to Agent, endorsements to (i) all "All Risk"
and business interruption insurance naming Agent, on behalf of itself and
Lenders, as loss payee, and (ii) all general liability and other liability
policies naming Agent, on behalf of itself and Lenders, as additional insured.
Each Credit Party irrevocably makes, constitutes and appoints Agent (and all
officers, employees or agents designated by Agent), so long as any Default or
Event of Default has occurred and is continuing or the anticipated insurance
proceeds exceed $1,000,000, as each Credit Party's true and lawful agent and
attorney-in-fact for the purpose of making, settling and adjusting claims under
such "All Risk" policies of insurance, endorsing the name of each Credit Party
on any check or other item of payment for the proceeds of such "All Risk"
policies of insurance and for making all determinations and decisions with
respect to such "All Risk" policies of insurance. Agent shall have no duty to
exercise any rights or powers granted to it pursuant to the foregoing
power-of-attorney. Borrower shall promptly notify Agent of any loss, damage, or
destruction to the Collateral in the amount of $250,000 or more, whether or not
covered by insurance. After deducting from such proceeds (i) the expenses
incurred by Agent in the collection or handling thereof, and (ii) amounts
required to be paid to creditors (other than Lenders) having Permitted
Encumbrances, Agent may, at its option, apply such proceeds to the reduction of
the Obligations in accordance with Section 1.3(d), provided, that in the case of
insurance proceeds pertaining to any Credit Party other than Borrower, such
insurance proceeds shall be applied to the Loans owing by Borrower, or permit or
require each Credit Party to use such money, or any part thereof, to replace,
repair, restore or rebuild the Collateral in a diligent and expeditious manner
with materials and workmanship of substantially the same quality as existed
before the loss, damage or destruction. Notwithstanding the foregoing, if the
casualty giving rise to such insurance proceeds could not reasonably be expected
to have a Material Adverse Effect and such
35
insurance proceeds do not exceed $250,000 in the aggregate, Agent shall permit
the applicable Credit Party to replace, restore, repair or rebuild the property;
provided, that if such Credit Party has not completed or entered into binding
agreements to complete such replacement, restoration, repair or rebuilding
within 90 days of such casualty, Agent may apply such insurance proceeds to the
Obligations in accordance with Section 1.3(d); provided, further that in the
case of insurance proceeds pertaining to any Credit Party other than Borrower,
such insurance proceeds shall be applied to the Loans owing by Borrower. All
insurance proceeds that are to be made available to Borrower to replace, repair,
restore or rebuild the Collateral shall be applied by Agent to reduce the
outstanding principal balance of the Revolving Loan (which application shall not
result in a permanent reduction of the Revolving Loan Commitment) and upon such
application, Agent shall establish a Reserve against the Borrowing Base in an
amount equal to the amount of such proceeds so applied. All insurance proceeds
made available to any Credit Party that is not a Borrower to replace, repair,
restore or rebuild Collateral shall be deposited in a cash collateral account.
Thereafter, such funds shall be made available to such Credit Party to provide
funds to replace, repair, restore or rebuild the Collateral as follows: (i)
Borrower shall request a Revolving Credit Advance or release from the cash
collateral account be made to such Credit Party in the amount requested to be
released; (ii) so long as the conditions set forth in Section 2.2 have been met,
Revolving Lenders shall make such Revolving Credit Advance or Agent shall
release funds from the cash collateral account; and (iii) in the case of
insurance proceeds applied against the Revolving Loan, the Reserve established
with respect to such insurance proceeds shall be reduced by the amount of such
Revolving Credit Advance. To the extent not used to replace, repair, restore or
rebuild the Collateral, such insurance proceeds shall be applied in accordance
with Section 1.3(d); provided, that in the case of insurance proceeds pertaining
to any Credit Party other than Borrower, such insurance proceeds shall be
applied to the Loans owing by Borrower.
5.5 Compliance with Laws. Each Credit Party shall comply with all
federal, state, local and foreign laws and regulations applicable to it,
including ERISA, labor laws, and Environmental Laws and Environmental Permits,
except to the extent that the failure to comply, individually or in the
aggregate, could not reasonably be expected to create liabilities in excess of
$500,000.
5.6 Supplemental Disclosure. From time to time as may be
reasonably requested by Agent (which request will not be made more frequently
than once each year absent the occurrence and continuance of an Event of
Default) or at Credit Parties' election, the Credit Parties shall supplement
each Disclosure Schedule hereto, or any representation herein or in any other
Loan Document, with respect to any matter hereafter arising that, if existing or
occurring at the date of this Agreement, would have been required to be set
forth or described in such Disclosure Schedule or as an exception to such
representation or that is necessary to correct any information in such
Disclosure Schedule or representation which has been rendered inaccurate thereby
(and, in the case of any supplements to any Disclosure Schedule, such Disclosure
Schedule shall be appropriately marked to show the changes made therein);
provided that (a) no such supplement to any such Disclosure Schedule or
representation shall amend, supplement or otherwise modify any Disclosure
Schedule or representation, or be or be deemed a waiver of any Default or Event
of Default resulting from the matters disclosed therein, except as consented to
by Agent and Requisite Lenders in writing, and (b) no supplement shall be
required or permitted as to representations and warranties that relate solely to
the Closing Date.
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5.7 Intellectual Property. Each Credit Party will conduct its
business and affairs without infringement of or interference with any
Intellectual Property of any other Person in any material respect and shall
comply in all material respects with the terms of its Licenses.
5.8 Environmental Matters. Each Credit Party shall and shall cause
each Person within its control to: (a) conduct its operations and keep and
maintain its Real Estate in compliance with all Environmental Laws and
Environmental Permits other than noncompliance that could not reasonably be
expected to have a Material Adverse Effect; (b) implement any and all
investigation, remediation, removal and response actions that are appropriate or
necessary to maintain the value and marketability of the Real Estate or to
otherwise comply with Environmental Laws and Environmental Permits pertaining to
the presence, generation, treatment, storage, use, disposal, transportation or
Release of any Hazardous Material on, at, in, under, above, to, from or about
any of its Real Estate in all material respects; (c) notify Agent promptly after
such Credit Party becomes aware of any violation of Environmental Laws or
Environmental Permits or any Release on, at, in, under, above, to, from or about
any Real Estate that is reasonably likely to result in Environmental Liabilities
in excess of $250,000; and (d) promptly forward to Agent a copy of any order,
notice, request for information or any communication or report received by such
Credit Party in connection with any such violation or Release or any other
matter relating to any Environmental Laws or Environmental Permits that could
reasonably be expected to result in Environmental Liabilities in excess of
$250,000 in each case whether or not the Environmental Protection Agency or any
Governmental Authority has taken or threatened any action in connection with any
such violation, Release or other matter. If Agent at any time has a reasonable
basis to believe that there may be a violation of any Environmental Laws or
Environmental Permits by any Credit Party or any Environmental Liability arising
thereunder, or a Release of Hazardous Materials on, at, in, under, above, to,
from or about any of its Real Estate, that, in each case, could reasonably be
expected to create liabilities in excess of $250,000, then each Credit Party
shall, upon Agent's written request (i) cause the performance of such
environmental audits including subsurface sampling of soil and groundwater, and
preparation of such environmental reports, at Borrower's expense, as Agent may
from time to time reasonably request, which shall be conducted by reputable
environmental consulting firms reasonably acceptable to Agent and shall be in
form and substance reasonably acceptable to Agent, and (ii) permit Agent or its
representatives to have access to all Real Estate for the purpose of conducting
such environmental audits and testing as Agent deems appropriate, including
subsurface sampling of soil and groundwater. Borrower shall reimburse Agent for
the reasonable costs of such audits and tests and the same will constitute a
part of the Obligations secured hereunder.
5.9 Landlords' Agreements, Mortgagee Agreements, Bailee Letters
and Real Estate Purchases. Each Credit Party shall use commercially reasonable
efforts to obtain a landlord's agreement, mortgagee agreement or bailee letter,
as applicable, from the lessor of each leased property (other than property
leased to Borrower by Xxxxx Family I, L.L.C., a Virginia limited liability
company pursuant to that Lease dated June 24, 1996 (as in effect on the date
hereof, the "Vacant Land Lease" as long as (i) such property remains subject to
the Vacant Land Lease and (ii) no Collateral is stored or located on such
property), mortgagee of owned property or bailee with respect to any warehouse,
processor or converter facility or other location where Collateral is stored or
located, which agreement or letter shall contain a waiver or
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subordination of all Liens or claims that the landlord, mortgagee or bailee may
assert against the Collateral at that location, and shall otherwise be
reasonably satisfactory in form and substance to Agent. With respect to such
locations or warehouse space leased or owned as of the Closing Date and
thereafter, if Agent has not received a landlord or mortgagee agreement or
bailee letter as of the Closing Date (or, if later, as of the date such location
is acquired or leased), Borrower's Eligible Inventory at that location shall, in
Agent's discretion, be excluded from the Borrowing Base or be subject to such
Reserves as may be established by Agent in its reasonable credit judgment. After
the Closing Date, no real property or warehouse space shall be leased by any
Credit Party and no Inventory shall be shipped to a processor or converter under
arrangements established after the Closing Date without (i) a 45 days' prior
written notice to Agent describing and identifying such real properties,
warehouses, processors and converters, as the case may be, if the book value of
all Inventory at all such other real estate properties and warehouses,
including, without limitation, the book value of all Inventory shipped or to be
shipped to all such processors and converters, is less than $10,000,000 in the
aggregate and (ii) the prior written consent of Agent (which consent, in Agent's
discretion, may be conditioned upon the exclusion from the Borrowing Base of
Eligible Inventory at that location or the establishment of Reserves acceptable
to Agent) and unless and until a satisfactory landlord agreement or bailee
letter, as appropriate, shall first have been obtained with respect to such
location, if the book value of all Inventory at all such other real estate
properties and warehouses, including, without limitation, the book value all
Inventory shipped or to be shipped to all such processors and converters, is
$10,000,000 or more in the aggregate. Each Credit Party shall timely and fully
pay and perform its obligations under all leases and other agreements with
respect to each leased location or public warehouse where any Collateral is or
may be located. To the extent permitted hereunder, if any Credit Party proposes
to acquire a fee ownership interest in Real Estate after the Closing Date, it
shall first provide to Agent a mortgage or deed of trust granting Agent a first
priority Lien on such Real Estate, together with environmental audits, mortgage
title insurance commitment, real property survey, local counsel opinion(s), and,
if required by Agent, supplemental casualty insurance and flood insurance, and
such other documents, instruments or agreements reasonably requested by Agent,
in each case, in form and substance reasonably satisfactory to Agent.
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5.10 Motor Vehicles. In the event the value of all motor vehicles
owned by Credit Parties shall exceed $250,000 in the aggregate, each Credit
Party will grant to Agent perfected Liens on all motor vehicles owned by such
Credit Party and deliver all title certificate for each motor vehicle owned by
such Credit Party noting Agent's security interest therein, signed by the
relevant Credit Party, in a manner satisfactory to Agent.
5.11 IRB. Each Credit Party shall on or before December 31, 2004
(i) pay or cause to paid in full the IRB Loan and discharge or satisfy or cause
to be discharged and satisfied all obligations, liabilities and indebtedness in
respect of the IRB Loan and the IRB Loan Related Documents, (ii) release or
caused to released all Liens (and all filings or recording evidencing the same)
granted to secure the repayment of the IRB loan and obligations under the IRB
Loan Related Documents, and (iii) terminate or cause to be terminated all IRB
Loan Related Documents.
5.12 Remediation. Each Credit Party shall, upon Agent's request and
no later than date(s) specified in such request, remediate in an appropriate
manner Hazardous Materials located at the Borrower's property located in
Gallatin, Tennessee.
5.13 Further Assurances. Each Credit Party executing this Agreement
agrees that it shall and shall cause each other Credit Party to, at such Credit
Party's expense and upon the reasonable request of Agent, duly execute and
deliver, or cause to be duly executed and delivered, to Agent such further
instruments and do and cause to be done such further acts as may be necessary or
proper in the reasonable opinion of Agent to carry out more effectively the
provisions and purposes of this Agreement and each Loan Document
6. NEGATIVE COVENANTS
Each Credit Party executing this Agreement jointly and severally
agrees as to all Credit Parties that from and after the date hereof until the
Termination Date:
6.1 Mergers, Subsidiaries, Etc. No Credit Party shall directly or
indirectly, by operation of law or otherwise, (a) form or acquire any
Subsidiary, or (b) merge with, consolidate with, acquire all or substantially
all of the assets or Stock of, or otherwise combine with or acquire, any Person.
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6.2 Investments; Loans and Advances. Except as otherwise expressly
permitted by this Section 6, no Credit Party shall make or permit to exist any
investment in, or make, accrue or permit to exist loans or advances of money to,
any Person, through the direct or indirect lending of money, holding of
securities or otherwise, except that: (a) Borrower may hold investments
comprised of notes payable, or stock or other securities issued by Account
Debtors to Borrower pursuant to negotiated agreements with respect to settlement
of such Account Debtor's Accounts in the ordinary course of business, consistent
with past practices; (b) each Credit Party may maintain its existing investments
in its Subsidiaries as of the Closing Date; and (c) so long as no Default or
Event of Default has occurred and is continuing and there is no outstanding
Revolving Loan balance, Borrower may make investments, subject to Control
Letters in favor of Agent for the benefit of Lenders or otherwise subject to a
perfected security interest in favor of Agent for the benefit of Lenders, in (i)
marketable direct obligations issued or unconditionally guaranteed by the United
States of America or any agency thereof maturing within one year from the date
of acquisition thereof, (ii) commercial paper maturing no more than one year
from the date of creation thereof and currently having the highest rating
obtainable from either Standard & Poor's Ratings Group or Xxxxx'x Investors
Service, Inc., (iii) certificates of deposit maturing no more than one year from
the date of creation thereof issued by commercial banks incorporated under the
laws of the United States of America, each having combined capital, surplus and
undivided profits of not less than $300,000,000 and having a senior unsecured
rating of "A" or better by a nationally recognized rating agency (an "A Rated
Bank"), (iv) time deposits maturing no more than thirty (30) days from the date
of creation thereof with A Rated Banks and (v) mutual funds that invest solely
in one or more of the investments described in clauses (i) through (iv) above,
(d) restricted cash investment in an amount not to exceed $700,000 to secure the
repayment of the IRB Loan and (e) other investments not exceeding $500,000 in
the aggregate at any time outstanding.
6.3 Indebtedness.
(a) No Credit Party shall create, incur, assume or permit to exist
any Indebtedness, except (without duplication) (i) Indebtedness secured by
purchase money security interests and Capital Leases permitted in Section
6.7(c), (ii) the Loans and the other Obligations, (iii) unfunded pension fund
and other employee benefit plan obligations and liabilities to the extent they
are permitted to remain unfunded under applicable law, (iv) existing
Indebtedness described in Disclosure Schedule (6.3) and refinancings thereof or
amendments or modifications thereof that do not have the effect of increasing
the principal amount thereof or changing the amortization thereof (other than to
extend the same) and that are otherwise on terms and conditions no less
favorable to any Credit Party, Agent or any Lender, as determined by Agent, than
the terms of the Indebtedness being refinanced, amended or modified, (v)
Indebtedness consisting of intercompany loans and advances made by Borrower to
any other Credit Party that is a Guarantor (other than a Guarantor that is an
Inactive Subsidiary) or by any such Guarantor (other than a Guarantor that is an
Inactive Subsidiary) to Borrower; provided, that: (A) Borrower shall have
executed and delivered to each such Guarantor, and each such Guarantor shall
have executed and delivered to Borrower, on the Closing Date, a subordinated
demand note (collectively, the "Intercompany Notes") to evidence any such
intercompany Indebtedness owing at any time by Borrower to such Guarantor or by
such Guarantor to Borrower, which Intercompany Notes shall be in form and
substance reasonably satisfactory to Agent and shall be pledged and delivered to
Agent pursuant to the applicable Pledge Agreement or Security
40
Agreement as additional collateral security for the Obligations; (B) Borrower
shall record all intercompany transactions on its books and records in a manner
reasonably satisfactory to Agent; (C) the obligations of Borrower under any such
Intercompany Notes shall be subordinated to the Obligations of Borrower
hereunder in a manner reasonably satisfactory to Agent; (D) at the time any such
intercompany loan or advance is made by Borrower and after giving effect
thereto, Borrower shall be Solvent; (E) no Default or Event of Default would
occur and be continuing after giving effect to any such proposed intercompany
loan; (F) the aggregate amount of such intercompany loans owing by Borrower to
all such Guarantors shall not exceed $2,000,000 at any one time outstanding; and
(G) the aggregate balance of all such intercompany loans owing to Borrower shall
not exceed $3,000,000 at any time, (vi) amounts owing by Borrower to Holdings as
a result of taxes paid or owing by Holdings to Governmental Authorities as a
result of the assets or operations of Borrower as long as all such amounts are
evidenced by Intercompany Notes, (vii) loans made by Borrower to Holdings to the
extent necessary to permit Holdings to pay operating expenses incurred in the
ordinary course of business consistent with past practices as in existence on
the Closing Date (as long as (A) Holdings promptly upon its receipt thereof uses
the proceeds of such loans to pay such operating expenses and (B) such loans are
repaid within twelve (12) months of the date made and (C) such loans are
evidenced by Intercompany Notes), (viii) Indebtedness evidenced by the IRB Loan
as long as the principal amount thereof does not exceed $700,000 in the
aggregate at any time outstanding and is secured by restricted cash in the same
amount, and (ix) Indebtedness owing by Holdings to Borrower in an aggregate
amount not to exceed $8,000,000 arising as a result of the Refinancing,
including a payment, on the Closing Date, on a guaranty by Borrower of Prior
Lender Obligations.
(b) No Credit Party shall, directly or indirectly, voluntarily
purchase, redeem, defease or prepay any principal of, premium, if any, interest
or other amount payable in respect of any Indebtedness prior to its scheduled
maturity, other than (i) the Obligations; (ii) Indebtedness secured by a
Permitted Encumbrance if the asset securing such Indebtedness has been sold or
otherwise disposed of in accordance with Sections 6.8(b) or (c); (iii)
Indebtedness permitted by Section 6.3(a)(iv) upon any refinancing thereof in
accordance with Section 6.3(a)(iv); (iv) as otherwise permitted in Section 6.13;
and (v) the IRB Loan.
6.4 Employee Loans and Affiliate Transactions.
(a) No Credit Party shall enter into or be a party to any
transaction with any other Credit Party or any Affiliate thereof except in the
ordinary course of and pursuant to the reasonable requirements of such Credit
Party's business and upon fair and reasonable terms that are no less favorable
to such Credit Party than would be obtained in a comparable arm's length
transaction with a Person not an Affiliate of such Credit Party. In addition, if
any such transaction or series of related transactions involves payments in
excess of $250,000 in the aggregate, the terms of these transactions must be
disclosed in advance to Agent and Lenders. All such transactions existing as of
the date hereof are described in Disclosure Schedule (6.4(a)).
(b) No Credit Party shall enter into any lending or borrowing
transaction with any employees of any Credit Party, except loans to its
respective employees on an arm's-length basis in the ordinary course of business
consistent with past practices for travel and entertainment expenses, relocation
costs and similar purposes up to a maximum of $10,000 to any employee and up to
a maximum of $50,000 in the aggregate at any one time outstanding.
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6.5 Capital Structure and Business. If all or part of a Credit
Party's Stock is pledged to Agent, that Credit Party shall not issue additional
Stock. No Credit Party shall amend its charter or bylaws in a manner that would
adversely affect Agent or Lenders or such Credit Party's duty or ability to
repay the Obligations. No Credit Party shall engage in any business other than
the businesses currently engaged in by it or businesses reasonably related
thereto.
6.6 Guaranteed Indebtedness. No Credit Party shall create, incur,
assume or permit to exist any Guaranteed Indebtedness except (a) by endorsement
of instruments or items of payment for deposit to the general account of any
Credit Party, and (b) for Guaranteed Indebtedness incurred for the benefit of
any other Credit Party if the primary obligation is expressly permitted by this
Agreement.
6.7 Liens. No Credit Party shall create, incur, assume or permit
to exist any Lien on or with respect to its Accounts or any of its other
properties or assets (whether now owned or hereafter acquired) except for (a)
Permitted Encumbrances; (b) Liens in existence on the date hereof and summarized
on Disclosure Schedule (6.7) securing Indebtedness described on Disclosure
Schedule (6.3) and permitted refinancings, extensions and renewals thereof,
including extensions or renewals of any such Liens; provided that the principal
amount so secured is not increased and the Lien does not attach to any other
property; and (c) Liens created after the date hereof by conditional sale or
other title retention agreements (including Capital Leases) or in connection
with purchase money Indebtedness with respect to Equipment and Fixtures acquired
by any Credit Party in the ordinary course of business, involving the incurrence
of an aggregate amount of purchase money Indebtedness and Capital Lease
Obligations of not more than (i) at all times prior to the second anniversary of
the Closing Date, $2,500,000 outstanding at any one time and (ii) at all times
after the second anniversary of the Closing Date, $5,000,000 outstanding at any
one time (provided, that such Liens attach only to the assets subject to such
purchase money debt and such Indebtedness is incurred within twenty (20) days
following such purchase and does not exceed 100% of the purchase price of the
subject assets). In addition, no Credit Party shall become a party to any
agreement, note, indenture or instrument, or take any other action, that would
prohibit the creation of a Lien on any of its properties or other assets in
favor of Agent, on behalf of itself and Lenders, as additional collateral for
the Obligations, except operating leases, Capital Leases or Licenses which
prohibit Liens upon the assets that are subject thereto.
6.8 Sale of Stock and Assets. No Credit Party shall sell,
transfer, convey, assign or otherwise dispose of any of its properties or other
assets, including the Stock of any of its Subsidiaries (whether in a public or a
private offering or otherwise) or any of its Accounts, other than (a) the sale
of Inventory in the ordinary course of business, (b) the sale or other
disposition by a Credit Party of Inventory that is obsolete or no longer used or
useful in such Credit Party's business and having a book value not exceeding
$500,000 in the aggregate in any Fiscal Year and (c) the sale or other
disposition by a Credit Party of Equipment or Fixtures that are obsolete or no
longer used or useful in such Credit Party's business and having a book value
not exceeding $200,000 in the aggregate in any Fiscal Year, (c) the sale or
other disposition of other Equipment and Fixtures having a book value not
exceeding $100,000 in the aggregate in any Fiscal Year and (d) the sale of Real
Estate located at (i) 000 Xxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxx Xxxxxx, Xxxxx
Xxxxxxxx, (ii) 000 Xxxxx Xxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxx
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County, Florida, and (iii) 0000 Xxxxxx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxx,
Xxxxxxx, provided, however, that each of such Real Estate sales shall be for net
cash proceeds of not less than 50% of the fair market value of the Real Estate
being sold as determined by the most recent real estate appraisals that have
been prepared on behalf of Agent (collectively, the "Real Estate Held for
Sale").
6.9 ERISA. No Credit Party shall, or shall cause or permit any
ERISA Affiliate to, cause or permit to occur (i) an event that could result in
the imposition of a Lien under Section 412 of the IRC or Section 302 or 4068 of
ERISA or (ii) an ERISA Event to the extent such ERISA Event would reasonably be
expected to result in taxes, penalties and other liability in excess of $250,000
in the aggregate.
6.10 Financial Covenants. Borrower shall not breach or fail to
comply with any of the Financial Covenants.
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6.11 Hazardous Materials. No Credit Party shall cause or permit a
Release of any Hazardous Material on, at, in, under, above, to, from or about
any of the Real Estate where such Release would (a) violate in any respect, or
form the basis for any Environmental Liabilities under, any Environmental Laws
or Environmental Permits or (b) otherwise adversely impact the value or
marketability of any of the Real Estate or any of the Collateral, other than
such violations or Environmental Liabilities that could not reasonably be
expected to have create liabilities in excess of $500,000.
6.12 Sale-Leasebacks. No Credit Party shall engage in any
sale-leaseback, synthetic lease or similar transaction involving any of its
assets, except for a sale and subsequent leaseback of a portion of the Real
Estate located at 000 Xxxxx Xxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxx Xxxxxx, Xxxxxxx
for a period not to exceed two (2) years.
6.13 Restricted Payments. No Credit Party shall make any Restricted
Payment, except (a) intercompany loans and advances between Borrower and
Guarantors to the extent permitted by Section 6.3, (b) dividends and
distributions by Subsidiaries of Borrower paid to Borrower, (c) employee loans
permitted under Section 6.4(b), (d) payments of principal and interest of
Intercompany Notes issued in accordance with Section 6.3, (e) Borrower may pay
cash dividends ("Dividends") to Holdings (which Dividends Holdings may promptly
upon receipt thereof pay to its Stockholders) as long as (A) such Dividends do
not exceed $750,000 in the aggregate in any Fiscal Year, (B) Borrower and
Holdings are in compliance with the Fixed Charge Coverage Ratio set forth in
Annex G for the four quarter period reflected in the Compliance Certificate most
recently delivered pursuant to Annex E prior to such proposed Dividend and all
Revolving Credit Advances, if any, used to fund such Dividend (after giving
effect to such proposed Dividend and Revolving Credit Advances, if any, as if
made on the first day of such period); (C) Borrowing Availability is at least
$10,000,000 after giving effect to the proposed Dividend and Revolving Credit
Advances, if any, used to fund such Dividend and (D) no Default or Event of
Default has occurred and is continuing or would result after giving effect to
any such Dividend and Revolving Credit Advances, if any, used to fund such
Dividend; and (f) prepayment or defeasance of the IRB Loan.
6.14 Change of Corporate Name or Location; Change of Fiscal Year.
No Credit Party shall (a) change its name as it appears in official filings in
the state of its incorporation or other organization, (b) change its chief
executive office, principal place of business, corporate offices or warehouses
or locations at which Collateral is held or stored, or the location of its
records concerning the Collateral, (c) change the type of entity that it is, (d)
change its organization identification number, if any, issued by its state of
incorporation or other organization, or (e) change its state of incorporation or
organization, in each case without at least thirty (30) days prior written
notice to Agent and after Agent's written acknowledgment that any reasonable
action requested by Agent in connection therewith, including to continue the
perfection of any Liens in favor of Agent, on behalf of Lenders, in any
Collateral, has been completed or taken, and provided, that any such new
location shall be in the continental United States. No Credit Party shall change
its Fiscal Year without ninety (90) days' advance written notice to Agent.
6.15 No Impairment of Intercompany Transfers. No Credit Party shall
directly or indirectly enter into or become bound by any agreement, instrument,
indenture or
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other obligation (other than this Agreement and the other Loan Documents) that
could directly or indirectly restrict, prohibit or require the consent of any
Person with respect to the payment of dividends or distributions or the making
or repayment of intercompany loans by a Subsidiary of Borrower to Borrower.
6.16 Real Estate Purchases. No Credit Party shall purchase a fee
simple ownership interest Real Estate with an aggregate purchase price in excess
of $2,000,000.
6.17 Holdings. At all times after the Closing Date, Holdings shall
not engage in any trade or business, or own any assets (other than (i) assets
which it owns as of the Closing Date and (ii) other assets as long as the fair
market value of all such assets does not exceed $500,000 in the aggregate at any
time) or incur any Indebtedness or Guaranteed Indebtedness (other than the
Obligations).
6.18 Inactive Subsidiaries. No Inactive Subsidiary shall (a)
acquire any assets, (b) incur any liabilities (whether to an Affiliate or
otherwise) other than for franchise taxes, maintenance fees and other de minimus
expenses or (c) engage in any active trade or business.
6.19 Leases. No Credit Party shall enter into any operating lease
for Equipment or Real Estate, if the aggregate of all operating lease payments
for leases of Equipment and Real Estate payable in any year for all Credit
Parties on a consolidated basis would exceed $1,500,000.
6.20 Vacant Land Lease No Credit shall store or maintain, or permit
to be stored or maintained, any Collateral on the property that is subject to
the Vacant Land Lease.
7. TERM
7.1 Termination. The financing arrangements contemplated hereby
shall be in effect until the Commitment Termination Date, and the Loans and all
other Obligations shall be automatically due and payable in full on such date.
7.2 Survival of Obligations Upon Termination of Financing
Arrangements. Except as otherwise expressly provided for in the Loan Documents,
no termination or cancellation (regardless of cause or procedure) of any
financing arrangement under this Agreement shall in any way affect or impair the
obligations, duties and liabilities of the Credit Parties or the rights of Agent
and Lenders relating to any unpaid portion of the Loans or any other
Obligations, due or not due, liquidated, contingent or unliquidated or any
transaction or event occurring prior to such termination, or any transaction or
event, the performance of which is required after the Commitment Termination
Date. Except as otherwise expressly provided herein or in any other Loan
Document, all undertakings, agreements, covenants, warranties and
representations of or binding upon the Credit Parties, and all rights of Agent
and each Lender, all as contained in the Loan Documents, shall not terminate or
expire, but rather shall survive any such termination or cancellation and shall
continue in full force and effect until the Termination Date; provided, that the
provisions of Section 11, the payment obligations under Sections 1.15 and 1.16,
and the indemnities contained in the Loan Documents shall survive the
Termination Date.
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8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
8.1 Events of Default. The occurrence of any one or more of the
following events (regardless of the reason therefor) shall constitute an "Event
of Default" hereunder:
(a) Borrower (i) fails to make any payment of principal of, or
interest on, or Fees owing in respect of, the Loans or any of the other
Obligations when due and payable, or (ii) fails to pay or reimburse Agent or
Lenders for any expense reimbursable hereunder or under any other Loan Document
within ten (10) days following Agent's demand for such reimbursement or payment
of expenses.
(b) Any Credit Party fails or neglects to perform, keep or observe
any of the provisions of Sections 1.4, 1.8, 5.4(a) or 6, or any of the
provisions set forth in Annexes C or G, respectively.
(c) Borrower fails or neglects to perform, keep or observe any of
the provisions of Section 4.1 or any provisions set forth in Annexes E or F,
respectively, and the same shall remain unremedied for three (3) Business Days
or more.
(d) Any Credit Party fails or neglects to perform, keep or observe
any other provision of this Agreement or of any of the other Loan Documents
(other than any provision embodied in or covered by any other clause of this
Section 8.1) and the same shall remain unremedied for thirty (30) days or more.
(e) A default or breach occurs under any other agreement, document
or instrument to which any Credit Party is a party that is not cured within any
applicable grace period therefor, and such default or breach (i) involves the
failure to make any payment when due in respect of any Indebtedness or
Guaranteed Indebtedness (other than the Obligations) of any Credit Party in
excess of $500,000 in the aggregate (including (x) undrawn committed or
available amounts and (y) amounts owing to all creditors under any combined or
syndicated credit arrangements), or (ii) causes, or permits any holder of such
Indebtedness or Guaranteed Indebtedness or a trustee to cause, Indebtedness or
Guaranteed Indebtedness or a portion thereof in excess of $500,000 in the
aggregate to become due prior to its stated maturity or prior to its regularly
scheduled dates of payment, or cash collateral to be demanded in respect
thereof, in each case, regardless of whether such default is waived, or such
right is exercised, by such holder or trustee.
(f) Any information contained in any Borrowing Base Certificate is
untrue or incorrect in any respect (other than (i) immaterial errors not
exceeding the greater of (1) $100,000 or (2) 2.5% of the Borrowing Availability
as such Borrowing Availability is calculated after giving effect to the
correction of such errors and (ii) errors understating the amount of the
Borrowing Base), or any representation or warranty herein or in any Loan
Document or in any written statement, report, financial statement or certificate
(other than a Borrowing Base Certificate) made or delivered to Agent or any
Lender by any Credit Party is untrue or incorrect in any material respect as of
the date when made or deemed made.
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(g) Assets of any Credit Party with a fair market value of
$250,000 or more are attached, seized, levied upon or subjected to a writ or
distress warrant, or come within the possession of any receiver, trustee,
custodian or assignee for the benefit of creditors of any Credit Party and such
condition continues for thirty (30) days or more.
(h) A case or proceeding is commenced against any Credit Party
seeking a decree or order in respect of such Credit Party (i) under the
Bankruptcy Code or any other applicable federal, state or foreign bankruptcy or
other similar law, (ii) appointing a custodian, receiver, liquidator, assignee,
trustee or sequestrator (or similar official) for such Credit Party or for any
substantial part of any such Credit Party's assets, or (iii) ordering the
winding-up or liquidation of the affairs of such Credit Party, and such case or
proceeding shall remain undismissed or unstayed for sixty (60) days or more or a
decree or order granting the relief sought in such case or proceeding is granted
by a court of competent jurisdiction.
(i) Any Credit Party (i) files a petition seeking relief under the
Bankruptcy Code or any other applicable federal, state or foreign bankruptcy or
other similar law, (ii) consents to or fails to contest in a timely and
appropriate manner to the institution of proceedings thereunder or to the filing
of any such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar
official) for such Credit Party or for any substantial part of any such Credit
Party's assets, (iii) makes an assignment for the benefit of creditors, or (iv)
takes any action in furtherance of any of the foregoing, or (v) admits in
writing its inability to, or is generally unable to, pay its debts as such debts
become due.
(j) A final judgment or judgments for the payment of money in
excess of $500,000 in the aggregate at any time are outstanding against one or
more of the Credit Parties (which judgments are not covered by insurance
policies as to which liability has been accepted by the insurance carrier), and
the same are not, within thirty (30) days after the entry thereof, discharged or
execution thereof stayed or bonded pending appeal, or such judgments are not
discharged prior to the expiration of any such stay.
(k) Any material provision of any Loan Document for any reason
ceases to be valid, binding and enforceable in accordance with its terms (or any
Credit Party shall challenge the enforceability of any Loan Document or shall
assert in writing, or engage in any action or inaction based on any such
assertion, that any provision of any of the Loan Documents has ceased to be or
otherwise is not valid, binding and enforceable in accordance with its terms),
or any Lien created under any Loan Document ceases to be a valid and perfected
first priority Lien (except as otherwise permitted herein or therein) in any of
the Collateral purported to be covered thereby.
(l) Any Change of Control occurs.
(m) Any event occurs, whether or not insured or insurable, as a
result of which revenue-producing activities cease or are substantially
curtailed at facilities of Borrower generating more than 10% of Borrower's
revenues for the Fiscal Year preceding such event and such cessation or
curtailment continues for more than thirty (30) days (other than planned
closures of any facility as long as (i) such facility has generated less than
10% of Borrower's
47
aggregate EBITDA for the 12-month period ended on or about the date of such
closure and (ii) Borrower has notified Agent in writing of such closure no less
than 60 days prior to such closure).
8.2 Remedies.
(a) If any Event of Default has occurred and is continuing, Agent
may (and at the written request of the Requisite Revolving Lenders shall),
without notice, suspend the Revolving Loan facility with respect to additional
Advances and/or the incurrence of additional Letter of Credit Obligations,
whereupon any additional Advances and additional Letter of Credit Obligations
shall be made or incurred in Agent's sole discretion (or in the sole discretion
of the Requisite Revolving Lenders, if such suspension occurred at their
direction) so long as such Default or Event of Default is continuing. If any
Event of Default has occurred and is continuing, Agent may (and at the written
request of Requisite Lenders shall), without notice except as otherwise
expressly provided herein, increase the rate of interest applicable to the Loans
and the Letter of Credit Fees to the Default Rate.
(b) If any Event of Default has occurred and is continuing, Agent
may (and at the written request of the Requisite Lenders shall), without notice:
(i) terminate the Revolving Loan facility with respect to further Advances or
the incurrence of further Letter of Credit Obligations; (ii) reduce the
Revolving Loan Commitment from time to time; (iii) declare all or any portion of
the Obligations, including all or any portion of any Loan to be forthwith due
and payable, and require that the Letter of Credit Obligations be cash
collateralized in the manner set forth in Annex B, all without presentment,
demand, protest or further notice of any kind, all of which are expressly waived
by Borrower and each other Credit Party; or (iv) exercise any rights and
remedies provided to Agent under the Loan Documents or at law or equity,
including all remedies provided under the Code; provided, that upon the
occurrence of an Event of Default specified in Sections 8.1(h) or (i), the
Commitments shall be immediately terminated and all of the Obligations,
including the Revolving Loan, shall become immediately due and payable without
declaration, notice or demand by any Person.
8.3 Waivers by Credit Parties. Except as otherwise provided for in
this Agreement or by applicable law, each Credit Party waives: (a) presentment,
demand and protest and notice of presentment, dishonor, notice of intent to
accelerate, notice of acceleration, protest, default, nonpayment, maturity,
release, compromise, settlement, extension or renewal of any or all commercial
paper, accounts, contract rights, documents, instruments, chattel paper and
guaranties at any time held by Agent on which any Credit Party may in any way be
liable, and hereby ratifies and confirms whatever Agent may do in this regard,
(b) all rights to notice and a hearing prior to Agent's taking possession or
control of, or to Agent's replevy, attachment or levy upon, the Collateral or
any bond or security that might be required by any court prior to allowing Agent
to exercise any of its remedies, and (c) the benefit of all valuation,
appraisal, marshaling and exemption laws.
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT
9.1 Assignment and Participations.
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(a) Subject to the terms of this Section 9.1, any Lender may make
an assignment to a Qualified Assignee of, or sale of participations in, at any
time or times, the Loan Documents, Loans, Letter of Credit Obligations and any
Commitment or any portion thereof or interest therein, including any Lender's
rights, title, interests, remedies, powers or duties thereunder. Any assignment
by a Lender shall: (i) require the consent of Agent (which consent shall not be
unreasonably withheld or delayed with respect to a Qualified Assignee) and the
execution of an assignment agreement (an "Assignment Agreement" substantially in
the form attached hereto as Exhibit 9.1(a) and otherwise in form and substance
reasonably satisfactory to, and acknowledged by, Agent and Borrower, which shall
not to be unreasonably withheld or delayed; (ii) be conditioned on such assignee
Lender representing to the assigning Lender and Agent that it is purchasing the
applicable Loans to be assigned to it for its own account, for investment
purposes and not with a view to the distribution thereof; (iii) after giving
effect to any such partial assignment, the assignee Lender shall have
Commitments in an amount at least equal to $10,000,000 and the assigning Lender
shall have retained Commitments in an amount at least equal to $10,000,000; (iv)
include a payment to Agent of an assignment fee of $3,500. In the case of an
assignment by a Lender under this Section 9.1, the assignee shall have, to the
extent of such assignment, the same rights, benefits and obligations as all
other Lenders hereunder. The assigning Lender shall be relieved of its
obligations hereunder with respect to its Commitments or assigned portion
thereof from and after the date of such assignment. Borrower hereby acknowledges
and agrees that any assignment shall give rise to a direct obligation of
Borrower to the assignee and that the assignee shall be considered to be a
"Lender". In all instances, each Lender's liability to make Loans hereunder
shall be several and not joint and shall be limited to such Lender's Pro Rata
Share of the applicable Commitment. In the event Agent or any Lender assigns or
otherwise transfers all or any part of the Obligations, Agent or any such Lender
shall so notify Borrower and Borrower shall, upon the request of Agent or such
Lender, execute new Notes in exchange for the Notes, if any, being assigned.
Notwithstanding the foregoing provisions of this Section 9.1(a), any Lender may
at any time pledge the Obligations held by it and such Lender's rights under
this Agreement and the other Loan Documents to a Federal Reserve Bank, and any
lender that is an investment fund may assign the Obligations held by it and such
Lender's rights under this Agreement and the other Loan Documents to another
investment fund managed by the same investment advisor; provided, that no such
pledge to a Federal Reserve Bank shall release such Lender from such Lender's
obligations hereunder or under any other Loan Document.
(b) Any participation by a Lender of all or any part of its
Commitments shall be made with the understanding that all amounts payable by
Borrower hereunder shall be determined as if that Lender had not sold such
participation, and that the holder of any such participation shall not be
entitled to require such Lender to take or omit to take any action hereunder
except actions directly affecting (i) any reduction in the principal amount of,
or interest rate or Fees payable with respect to, any Loan in which such holder
participates, (ii) any extension of the scheduled amortization of the principal
amount of any Loan in which such holder participates or the final maturity date
thereof, and (iii) any release of all or substantially all of the Collateral
(other than in accordance with the terms of this Agreement, the Collateral
Documents or the other Loan Documents). Solely for purposes of Sections 1.13,
1.15, 1.16 and 9.8, Borrower acknowledges and agrees that a participation shall
give rise to a direct obligation of Borrower to the participant and the
participant shall be considered to be a "Lender". Except as set forth in the
preceding sentence neither Borrower nor any other Credit Party shall have any
49
obligation or duty to any participant. Neither Agent nor any Lender (other than
the Lender selling a participation) shall have any duty to any participant and
may continue to deal solely with the Lender selling a participation as if no
such sale had occurred.
(c) Except as expressly provided in this Section 9.1, no Lender
shall, as between Borrower and that Lender, or Agent and that Lender, be
relieved of any of its obligations hereunder as a result of any sale,
assignment, transfer or negotiation of, or granting of participation in, all or
any part of the Loans, the Notes or other Obligations owed to such Lender.
(d) Each Credit Party executing this Agreement shall assist any
Lender permitted to sell assignments or participations under this Section 9.1 as
reasonably required to enable the assigning or selling Lender to effect any such
assignment or participation, including the execution and delivery of any and all
agreements, notes and other documents and instruments as shall be requested and
the preparation of informational materials for, and the participation of
management in meetings with, potential assignees or participants. Each Credit
Party executing this Agreement shall certify the correctness, completeness and
accuracy of all descriptions of the Credit Parties and their respective affairs
contained in any selling materials provided by it and all other information
provided by it and included in such materials, except that any Projections
delivered by Borrower shall only be certified by Borrower as having been
prepared by Borrower in compliance with the representations contained in Section
3.4(c).
(e) A Lender may furnish any information concerning Credit Parties
in the possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants); provided that such Lender
shall obtain from assignees or participants confidentiality covenants
substantially equivalent to those contained in Section 11.8.
(f) So long as no Event of Default has occurred and is continuing,
no Lender shall assign or sell participations in any portion of its Loans or
Commitments to a potential Lender or participant, if, as of the date of the
proposed assignment or sale, the assignee Lender or participant would be subject
to capital adequacy or similar requirements under Section 1.16(a), increased
costs under Section 1.16(b), an inability to fund LIBOR Loans under Section
1.16(c), or withholding taxes in accordance with Section 1.15(a).
(g) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Lender"), may grant to a special purpose funding vehicle (an
"SPC"), identified as such in writing by the Granting Lender to Agent and
Borrower, the option to provide to Borrower all or any part of any Loans that
such Granting Lender would otherwise be obligated to make to Borrower pursuant
to this Agreement; provided, that (i) nothing herein shall constitute a
commitment by any SPC to make any Loan; and (ii) if an SPC elects not to
exercise such option or otherwise fails to provide all or any part of such Loan,
the Granting Lender shall be obligated to make such Loan pursuant to the terms
hereof. The making of a Loan by an SPC hereunder shall utilize the Commitment of
the Granting Lender to the same extent, and as if such Loan were made by such
Granting Lender. No SPC shall be liable for any indemnity or similar payment
obligation under this Agreement (all liability for which shall remain with the
Granting Lender). Any SPC may (i) with notice to, but without the prior written
consent of, Borrower and Agent and without paying any processing fee therefor
assign all or a portion of its interests in any Loans to the Granting Lender or
to any financial institutions (consented to by Borrower and
50
Agent) providing liquidity and/or credit support to or for the account of such
SPC to support the funding or maintenance of Loans and (ii) disclose on a
confidential basis any non-public information relating to its Loans to any
rating agency, commercial paper dealer or provider of any surety, guarantee or
credit or liquidity enhancement to such SPC. This Section 9.1(g) may not be
amended without the prior written consent of each Granting Lender, all or any of
whose Loans are being funded by an SPC at the time of such amendment. For the
avoidance of doubt, the Granting Lender shall for all purposes, including
without limitation, the approval of any amendment or waiver of any provision of
any Loan Document or the obligation to pay any amount otherwise payable by the
Granting Lender under the Loan Documents, continue to be the Lender of record
hereunder.
9.2 Appointment of Agent. GE Capital is hereby appointed to act on
behalf of all Lenders as Agent under this Agreement and the other Loan
Documents. The provisions of this Section 9.2 are solely for the benefit of
Agent and Lenders and no Credit Party nor any other Person shall have any rights
as a third party beneficiary of any of the provisions hereof. In performing its
functions and duties under this Agreement and the other Loan Documents, Agent
shall act solely as an agent of Lenders and does not assume and shall not be
deemed to have assumed any obligation toward or relationship of agency or trust
with or for any Credit Party or any other Person. Agent shall have no duties or
responsibilities except for those expressly set forth in this Agreement and the
other Loan Documents. The duties of Agent shall be mechanical and administrative
in nature and Agent shall not have, or be deemed to have, by reason of this
Agreement, any other Loan Document or otherwise a fiduciary relationship in
respect of any Lender. Except as expressly set forth in this Agreement and the
other Loan Documents, Agent shall not have any duty to disclose, and shall not
be liable for failure to disclose, any information relating to any Credit Party
or any of their respective Subsidiaries or any Account Debtor that is
communicated to or obtained by GE Capital or any of its Affiliates in any
capacity. Neither Agent nor any of its Affiliates nor any of their respective
officers, directors, employees, agents or representatives shall be liable to any
Lender for any action taken or omitted to be taken by it hereunder or under any
other Loan Document, or in connection herewith or therewith, except for damages
caused by its or their own gross negligence or willful misconduct.
If Agent shall request instructions from Requisite Lenders,
Requisite Revolving Lenders, Supermajority Revolving Lenders or all affected
Lenders with respect to any act or action (including failure to act) in
connection with this Agreement or any other Loan Document, then Agent shall be
entitled to refrain from such act or taking such action unless and until Agent
shall have received instructions from Requisite Lenders, Requisite Revolving
Lenders, Supermajority Revolving Lenders, or all affected Lenders, as the case
may be, and Agent shall not incur liability to any Person by reason of so
refraining. Agent shall be fully justified in failing or refusing to take any
action hereunder or under any other Loan Document (a) if such action would, in
the opinion of Agent, be contrary to law or the terms of this Agreement or any
other Loan Document, (b) if such action would, in the opinion of Agent, expose
Agent to Environmental Liabilities or (c) if Agent shall not first be
indemnified to its satisfaction against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against Agent as a result of Agent acting or refraining from acting
hereunder or under any other Loan Document in accordance with the instructions
of Requisite Lenders,
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Requisite Revolving Lenders, Supermajority Revolving Lenders or all affected
Lenders, as applicable.
9.3 Agent's Reliance, Etc. Neither Agent nor any of its Affiliates
nor any of their respective directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it or them under or in
connection with this Agreement or the other Loan Documents, except for damages
caused by its or their own gross negligence or willful misconduct. Without
limiting the generality of the foregoing, Agent: (a) may treat the payee of any
Note as the holder thereof until Agent receives written notice of the assignment
or transfer thereof signed by such payee and in form reasonably satisfactory to
Agent; (b) may consult with legal counsel, independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts; (c) makes no warranty or representation to any
Lender and shall not be responsible to any Lender for any statements, warranties
or representations made in or in connection with this Agreement or the other
Loan Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement or the other Loan Documents on the part of any Credit Party or to
inspect the Collateral (including the books and records) of any Credit Party;
(e) shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
the other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; and (f) shall incur no liability under or in respect of this
Agreement or the other Loan Documents by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telecopy, telegram,
cable or telex) believed by it to be genuine and signed or sent by the proper
party or parties.
9.4 GE Capital and Affiliates. With respect to its Commitments
hereunder, GE Capital shall have the same rights and powers under this Agreement
and the other Loan Documents as any other Lender and may exercise the same as
though it were not Agent; and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated, include GE Capital in its individual capacity. GE
Capital and its Affiliates may lend money to, invest in, and generally engage in
any kind of business with, any Credit Party, any of their Affiliates and any
Person who may do business with or own securities of any Credit Party or any
such Affiliate, all as if GE Capital were not Agent and without any duty to
account therefor to Lenders. GE Capital and its Affiliates may accept fees and
other consideration from any Credit Party for services in connection with this
Agreement or otherwise without having to account for the same to Lenders. Each
Lender acknowledges the potential conflict of interest between GE Capital as a
Lender holding disproportionate interests in the Loans and GE Capital as Agent.
9.5 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon Agent or any other Lender and based on
the Financial Statements referred to in Section 3.4(a) and such other documents
and information as it has deemed appropriate, made its own credit and financial
analysis of the Credit Parties and its own decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement. Each
Lender acknowledges the potential conflict of interest of each other Lender as a
result of Lenders holding disproportionate interests
52
in the Loans, and expressly consents to, and waives any claim based upon, such
conflict of interest.
9.6 Indemnification. Lenders agree to indemnify Agent (to the
extent not reimbursed by Credit Parties and without limiting the obligations of
Credit Parties hereunder), ratably according to their respective Pro Rata
Shares, from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever that may be imposed on, incurred by, or asserted
against Agent in any way relating to or arising out of this Agreement or any
other Loan Document or any action taken or omitted to be taken by Agent in
connection therewith; provided, that no Lender shall be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from Agent's gross
negligence or willful misconduct. Without limiting the foregoing, each Lender
agrees to reimburse Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including reasonable counsel fees) 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 and each other Loan Document, to the
extent that Agent is not reimbursed for such expenses by Credit Parties.
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9.7 Successor Agent. Agent may resign at any time by giving not
less than thirty (30) days' prior written notice thereof to Lenders and
Borrower. Upon any such resignation, the Requisite Lenders shall have the right
to appoint a successor Agent. If no successor Agent shall have been so appointed
by the Requisite Lenders and shall have accepted such appointment within thirty
(30) days after the resigning Agent's giving notice of resignation, then the
resigning Agent may, on behalf of Lenders, appoint a successor Agent, which
shall be a Lender, if a Lender is willing to accept such appointment, or
otherwise shall be a commercial bank or financial institution or a subsidiary of
a commercial bank or financial institution if such commercial bank or financial
institution is organized under the laws of the United States of America or of
any State thereof and has a combined capital and surplus of at least
$300,000,000. If no successor Agent has been appointed pursuant to the
foregoing, within thirty (30) days after the date such notice of resignation was
given by the resigning Agent, such resignation shall become effective and the
Requisite Lenders shall thereafter perform all the duties of Agent hereunder
until such time, if any, as the Requisite Lenders appoint a successor Agent as
provided above. Any successor Agent appointed by Requisite Lenders hereunder
shall be subject to the approval of Borrower, such approval not to be
unreasonably withheld or delayed; provided that such approval shall not be
required if a Default or an Event of Default has occurred and is continuing.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall succeed to and become vested with all the rights,
powers, privileges and duties of the resigning Agent. Upon the earlier of the
acceptance of any appointment as Agent hereunder by a successor Agent or the
effective date of the resigning Agent's resignation, the resigning Agent shall
be discharged from its duties and obligations under this Agreement and the other
Loan Documents, except that any indemnity rights or other rights in favor of
such resigning Agent shall continue. After any resigning Agent's resignation
hereunder, the provisions of this Section 9 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was acting as Agent under
this Agreement and the other Loan Documents.
9.8 Setoff and Sharing of Payments. In addition to any rights now
or hereafter granted under applicable law and not by way of limitation of any
such rights, upon the occurrence and during the continuance of any Event of
Default and subject to Section 9.9(f), each Lender is hereby authorized at any
time or from time to time, without prior notice to any Credit Party or to any
Person other than Agent, any such notice being hereby expressly waived, to
offset and to appropriate and to apply any and all balances held by it at any of
its offices for the account of Borrower or any Guarantor (regardless of whether
such balances are then due to Borrower or any Guarantor) and any other
properties or assets at any time held or owing by that Lender or that holder to
or for the credit or for the account of Borrower or any Guarantor against and on
account of any of the Obligations that are not paid when due; provided that the
Lender exercising such offset rights shall give notice thereof to the affected
Credit Party promptly after exercising such rights. Any Lender exercising a
right of setoff or otherwise receiving any payment on account of the Obligations
in excess of its Pro Rata Share thereof shall purchase for cash (and the other
Lenders or holders shall sell) such participations in each such other Lender's
or holder's Pro Rata Share of the Obligations as would be necessary to cause
such Lender to share the amount so offset or otherwise received with each other
Lender or holder in accordance with their respective Pro Rata Shares, (other
than offset rights exercised by any Lender with respect to Sections 1.13, 1.15
or 1.16). Each Lender's obligation under this Section 9.8 shall be in addition
to and not in limitation of its obligations to purchase a participation in an
amount equal to its Pro Rata Share of the Swing Line Loans under Section 1.1.
Borrower and each
54
Guarantor agrees, to the fullest extent permitted by law, that (a) any Lender
may exercise its right to offset with respect to amounts in excess of its Pro
Rata Share of the Obligations and may sell participations in such amounts so
offset to other Lenders and holders and (b) any Lender so purchasing a
participation in the Loans made or other Obligations held by other Lenders or
holders may exercise all rights of offset, bankers' lien, counterclaim or
similar rights with respect to such participation as fully as if such Lender or
holder were a direct holder of the Loans and the other Obligations in the amount
of such participation. Notwithstanding the foregoing, if all or any portion of
the offset amount or payment otherwise received is thereafter recovered from the
Lender that has exercised the right of offset, the purchase of participations by
that Lender shall be rescinded and the purchase price restored without interest.
9.9 Advances; Payments; Non-Funding Lenders; Information; Actions
in Concert.
(a) Advances; Payments.
(i) Revolving Lenders shall refund or participate in the
Swing Line Loan in accordance with clauses (iii) and (iv) of Section 1.1(c). If
the Swing Line Lender declines to make a Swing Line Loan or if Swing Line
Availability is zero, Agent shall notify Revolving Lenders, promptly after
receipt of a Notice of Revolving Advance and in any event prior to 1:00 p.m.
(New York time) on the date such Notice of Revolving Advance is received, by
telecopy, telephone or other similar form of transmission. Each Revolving Lender
shall make the amount of such Lender's Pro Rata Share of such Revolving Credit
Advance available to Agent in same day funds by wire transfer to Agent's account
as set forth in Annex H not later than 3:00 p.m. (New York time) on the
requested funding date, in the case of an Index Rate Loan and not later than
11:00 a.m. (New York time) on the requested funding date in the case of a LIBOR
Loan. After receipt of such wire transfers (or, in the Agent's sole discretion,
before receipt of such wire transfers), subject to the terms hereof, Agent shall
make the requested Revolving Credit Advance to Borrower. All payments by each
Revolving Lender shall be made without setoff, counterclaim or deduction of any
kind.
(ii) Not less than once during each calendar week or more
frequently at Agent's election (each, a "Settlement Date"), Agent shall advise
each Lender by telephone, or telecopy of the amount of such Lender's Pro Rata
Share of principal, interest and Fees paid for the benefit of Lenders with
respect to each applicable Loan. Provided that each Lender has funded all
payments and Advances required to be made by it and purchased all participations
required to be purchased by it under this Agreement and the other Loan Documents
as of such Settlement Date, Agent shall pay to each Lender such Lender's Pro
Rata Share of principal, interest and Fees paid by Borrower since the previous
Settlement Date for the benefit of such Lender on the Loans held by it. To the
extent that any Lender (a "Non-Funding Lender") has failed to fund all such
payments and Advances or failed to fund the purchase of all such participations,
Agent shall be entitled to set off the funding short-fall against that
Non-Funding Lender's Pro Rata Share of all payments received from Borrower. Such
payments shall be made by wire transfer to such Lender's account (as specified
by such Lender in Annex H or the applicable Assignment Agreement) not later than
1:00 p.m. (Chicago time) on the next Business Day following each Settlement
Date.
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(b) Availability of Lender's Pro Rata Share. Agent may assume that
each Revolving Lender will make its Pro Rata Share of each Revolving Credit
Advance available to Agent on each funding date. If such Pro Rata Share is not,
in fact, paid to Agent by such Revolving Lender when due, Agent will be entitled
to recover such amount on demand from such Revolving Lender without setoff,
counterclaim or deduction of any kind. If any Revolving Lender fails to pay the
amount of its Pro Rata Share forthwith upon Agent's demand, Agent shall promptly
notify Borrower and Borrower shall immediately repay such amount to Agent.
Nothing in this Section 9.9(b) or elsewhere in this Agreement or the other Loan
Documents shall be deemed to require Agent to advance funds on behalf of any
Revolving Lender or to relieve any Revolving Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that Borrower may
have against any Revolving Lender as a result of any default by such Revolving
Lender hereunder. To the extent that Agent advances funds to Borrower on behalf
of any Revolving Lender and is not reimbursed therefor on the same Business Day
as such Advance is made, Agent shall be entitled to retain for its account all
interest accrued on such Advance until reimbursed by the applicable Revolving
Lender.
(c) Return of Payments.
(i) If Agent pays an amount to a Lender under this Agreement
in the belief or expectation that a related payment has been or will be received
by Agent from Borrower and such related payment is not received by Agent, then
Agent will be entitled to recover such amount from such Lender on demand without
setoff, counterclaim or deduction of any kind.
(ii) If Agent determines at any time that any amount received
by Agent under this Agreement must be returned to Borrower or paid to any
other Person pursuant to any insolvency law or otherwise, then, notwithstanding
any other term or condition of this Agreement or any other Loan Document, Agent
will not be required to distribute any portion thereof to any Lender. In
addition, each Lender will repay to Agent on demand any portion of such amount
that Agent has distributed to such Lender, together with interest at such rate,
if any, as Agent is required to pay to Borrower or such other Person, without
setoff, counterclaim or deduction of any kind.
(d) Non-Funding Lenders. The failure of any Non-Funding Lender to
make any Revolving Credit Advance or any payment required by it hereunder, or to
purchase any participation in any Swing Line Loan to be made or purchased by it
on the date specified therefor shall not relieve any other Lender (each such
other Revolving Lender, an "Other Lender") of its obligations to make such
Advance or purchase such participation on such date, but neither any Other
Lender nor Agent shall be responsible for the failure of any Non-Funding Lender
to make an Advance, purchase a participation or make any other payment required
hereunder. Notwithstanding anything set forth herein to the contrary, a
Non-Funding Lender shall not have any voting or consent rights under or with
respect to any Loan Document or constitute a "Lender" or a "Revolving Lender"
(or be included in the calculation of "Requisite Lenders", "Requisite Revolving
Lenders" or "Supermajority Revolving Lenders" hereunder) for any voting or
consent rights under or with respect to any Loan Document. At Borrower's
request, Agent or a Person acceptable to Agent shall have the right with Agent's
consent and in Agent's sole discretion (but shall have no obligation) to
purchase from any Non-Funding Lender, and each Non-Funding Lender agrees that it
shall, at Agent's request, sell and assign to Agent or such
56
Person, all of the Commitments of that Non-Funding Lender for an amount equal to
the principal balance of all Loans held by such Non-Funding Lender and all
accrued interest and fees with respect thereto through the date of sale, such
purchase and sale to be consummated pursuant to an executed Assignment
Agreement.
(e) Dissemination of Information. Agent shall use reasonable
efforts to provide Lenders with any notice of Default or Event of Default
received by Agent from, or delivered by Agent to, any Credit Party, with notice
of any Event of Default of which Agent has actually become aware and with notice
of any action taken by Agent following any Event of Default; provided, that
Agent shall not be liable to any Lender for any failure to do so, except to the
extent that such failure is attributable to Agent's gross negligence or willful
misconduct. Lenders acknowledge that Borrower is required to provide Financial
Statements and Collateral Reports to Lenders in accordance with Annexes E and F
hereto and agree that Agent shall have no duty to provide the same to Lenders.
(f) Actions in Concert. Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no Lender
shall take any action to protect or enforce its rights arising out of this
Agreement or the Notes (including exercising any rights of setoff) without first
obtaining the prior written consent of Agent and Requisite Lenders, it being the
intent of Lenders that any such action to protect or enforce rights under this
Agreement and the Notes shall be taken in concert and at the direction or with
the consent of Agent or Requisite Lenders. With respect to any action by Agent
to enforce the rights and remedies of Agent and the Lenders under this Agreement
and the other Loan Documents, each Lender hereby consents to the jurisdiction of
the court in which such action is maintained, and agrees to deliver its Notes to
Agent to the extent necessary to enforce the rights and remedies of Agent for
the benefit of the Lenders under the Mortgages in accordance with the provisions
hereof.
10. SUCCESSORS AND ASSIGNS
10.1 Successors and Assigns. This Agreement and the other Loan
Documents shall be binding on and shall inure to the benefit of each Credit
Party, Agent, Lenders and their respective successors and assigns (including, in
the case of any Credit Party, a debtor-in-possession on behalf of such Credit
Party), except as otherwise provided herein or therein. No Credit Party may
assign, transfer, hypothecate or otherwise convey its rights, benefits,
obligations or duties hereunder or under any of the other Loan Documents without
the prior express written consent of Agent and Lenders. Any such purported
assignment, transfer, hypothecation or other conveyance by any Credit Party
without the prior express written consent of Agent and Lenders shall be void.
The terms and provisions of this Agreement are for the purpose of defining the
relative rights and obligations of each Credit Party, Agent and Lenders with
respect to the transactions contemplated hereby and no Person shall be a third
party beneficiary of any of the terms and provisions of this Agreement or any of
the other Loan Documents.
11. MISCELLANEOUS
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11.1 Complete Agreement; Modification of Agreement. The Loan
Documents constitute the complete agreement between the parties with respect to
the subject matter thereof and may not be modified, altered or amended except as
set forth in Section 11.2. Any letter of interest, commitment letter, fee letter
or confidentiality agreement, if any, between any Credit Party and Agent or any
Lender or any of their respective Affiliates, predating this Agreement and
relating to a financing of substantially similar form, purpose or effect shall
be superseded by this Agreement. Notwithstanding the foregoing, the GE Capital
Fee Letter between Agent and Borrower shall survive the execution and delivery
of this Agreement and shall continue to be binding obligations of the parties.
11.2 Amendments and Waivers.
(a) Except for actions expressly permitted to be taken by Agent,
no amendment, modification, termination or waiver of any provision of this
Agreement or any other Loan Document, or any consent to any departure by any
Credit Party therefrom, shall in any event be effective unless the same shall be
in writing and signed by Agent and Borrower, and by Requisite Lenders, Requisite
Revolving Lenders, Supermajority Revolving Lenders or all affected Lenders, as
applicable. Except as set forth in clauses (b) and (c) below, all such
amendments, modifications, terminations or waivers requiring the consent of any
Lenders shall require the written consent of Requisite Lenders.
(b) No amendment, modification, termination or waiver of or
consent with respect to any provision of this Agreement that increases the
percentage advance rates set forth in the definition of the Borrowing Base, or
that makes less restrictive the nondiscretionary criteria for exclusion from
Eligible Accounts and Eligible Inventory set forth in Sections 1.6 and 1.7,
shall be effective unless the same shall be in writing and signed by Agent,
Supermajority Revolving Lenders and Borrower. No amendment, modification,
termination or waiver of or consent with respect to any provision of this
Agreement that waives compliance with the conditions precedent set forth in
Section 2.2 to the making of any Loan or the incurrence of any Letter of Credit
Obligations shall be effective unless the same shall be in writing and signed by
Agent, Requisite Revolving Lenders and Borrower. Notwithstanding anything
contained in this Agreement to the contrary, no waiver or consent with respect
to any Default or any Event of Default shall be effective for purposes of the
conditions precedent to the making of Loans or the incurrence of Letter of
Credit Obligations set forth in Section 2.2 unless the same shall be in writing
and signed by Agent, Requisite Revolving Lenders and Borrower.
(c) No amendment, modification, termination or waiver shall,
unless in writing and signed by Agent and each Lender directly affected thereby:
(i) increase the principal amount of any Lender's Commitment (which action shall
be deemed to directly affect all Lenders); (ii) reduce the principal of, rate of
interest on or Fees payable with respect to any Loan or Letter of Credit
Obligations of any affected Lender; (iii) extend any scheduled payment date
(other than payment dates of mandatory prepayments under Section
1.3(b)(ii)-(iv)) or final maturity date of the principal amount of any Loan of
any affected Lender; (iv) waive, forgive, defer, extend or postpone any payment
of interest or Fees as to any affected Lender; (v) release any Guaranty or,
except as otherwise permitted herein or in the other Loan Documents, release, or
permit any Credit Party to sell or otherwise dispose of, any Collateral with a
value exceeding $5,000,000 in the aggregate (which action shall be deemed to
directly affect all Lenders); (vi)
58
change the percentage of the Commitments or of the aggregate unpaid principal
amount of the Loans that shall be required for Lenders or any of them to take
any action hereunder; and (vii) amend or waive this Section 11.2 or the
definitions of the terms "Requisite Lenders", "Requisite Revolving Lenders" or
"Supermajority Revolving Lenders" insofar as such definitions affect the
substance of this Section 11.2. Furthermore, no amendment, modification,
termination or waiver affecting the rights or duties of Agent or L/C Issuer
under this Agreement or any other Loan Document shall be effective unless in
writing and signed by Agent or L/C Issuer, as the case may be, in addition to
Lenders required hereinabove to take such action. Each amendment, modification,
termination or waiver shall be effective only in the specific instance and for
the specific purpose for which it was given. No amendment, modification,
termination or waiver shall be required for Agent to take additional Collateral
pursuant to any Loan Document. No amendment, modification, termination or waiver
of any provision of any Note shall be effective without the written concurrence
of the holder of that Note. No notice to or demand on any Credit Party in any
case shall entitle such Credit Party or any other Credit Party to any other or
further notice or demand in similar or other circumstances. Any amendment,
modification, termination, waiver or consent effected in accordance with this
Section 11.2 shall be binding upon each holder of the Notes at the time
outstanding and each future holder of the Notes.
(d) If, in connection with any proposed amendment, modification,
waiver or termination (a "Proposed Change"):
(i) requiring the consent of all affected Lenders, the
consent of Requisite Lenders is obtained, but the consent of other Lenders whose
consent is required is not obtained (any such Lender whose consent is not
obtained as described in this clause (i) and in clauses (ii), (iii) and (iv)
below being referred to as "Non Consenting Lender");
(ii) requiring the consent of Supermajority Revolving
Lenders, the consent of Requisite Lenders is obtained, but the consent of
Supermajority Revolving Lenders is not obtained; or
(iii) requiring the consent of Requisite Revolving Lenders,
the consent of Revolving Lenders holding 51% or more of the aggregate Revolving
Loan Commitments is obtained, but the consent of Requisite Revolving Lenders is
not obtained;
then, so long as Agent is not a Non Consenting Lender, at Borrower's request
Agent, or a Person reasonably acceptable to Agent, shall have the right with
Agent's consent and in Agent's sole discretion (but shall have no obligation) to
purchase from such Non Consenting Lenders, and such Non Consenting Lenders agree
that they shall, upon Agent's request, sell and assign to Agent or such Person,
all of the Commitments of such Non Consenting Lenders for an amount equal to the
principal balance of all Loans held by the Non Consenting Lenders and all
accrued interest and Fees with respect thereto through the date of sale, such
purchase and sale to be consummated pursuant to an executed Assignment
Agreement.
(e) Upon payment in full in cash and performance of all of the
Obligations (other than indemnification Obligations), termination of the
Commitments and a release of all claims against Agent and Lenders, and so long
as no suits, actions proceedings, or claims are
59
pending or threatened against any Indemnified Person asserting any damages,
losses or liabilities that are Indemnified Liabilities, Agent shall deliver to
Borrower termination statements, mortgage releases and other documents necessary
or appropriate to evidence the termination of the Liens securing payment of the
Obligations.
11.3 Fees and Expenses. Borrower shall reimburse (i) Agent for all
fees, costs and expenses (including the reasonable fees and expenses of all of
its counsel, advisors, consultants and auditors) and (ii) Agent (and, with
respect to clauses (c) and (d) below, all Lenders) for all fees, costs and
expenses, including the reasonable fees, costs and expenses of counsel or other
advisors (including environmental and management consultants and appraisers)
incurred in connection with the negotiation, preparation and filing and/or
recordation of the Loan Documents and incurred in connection with:
(a) any amendment, modification or waiver of, or consent with
respect to, or termination of, any of the Loan Documents or Related Transactions
Documents or advice in connection with the administration of the Loans made
pursuant hereto or its rights hereunder or thereunder;
(b) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by Agent, any Lender, any Credit Party or any other Person
and whether as a party, witness or otherwise) in any way relating to the
Collateral, any of the Loan Documents or any other agreement to be executed or
delivered in connection herewith or therewith, including any litigation,
contest, dispute, suit, case, proceeding or action, and any appeal or review
thereof, in connection with a case commenced by or against any or all of the
Credit Parties or any other Person that may be obligated to Agent by virtue of
the Loan Documents, including any such litigation, contest, dispute, suit,
proceeding or action arising in connection with any work-out or restructuring of
the Loans during the pendency of one or more Events of Default; provided, that
no Person shall be entitled to reimbursement under this clause (c) in respect of
any litigation, contest, dispute, suit, proceeding or action to the extent any
of the foregoing results from such Person's gross negligence or willful
misconduct;
(c) any attempt to enforce any remedies of Agent or any Lender
against any or all of the Credit Parties or any other Person that may be
obligated to Agent or any Lender by virtue of any of the Loan Documents,
including any such attempt to enforce any such remedies in the course of any
work-out or restructuring of the Loans during the pendency of one or more Events
of Default; provided, that in the case of reimbursement of counsel for Lenders
other than Agent, such reimbursement shall be limited to one counsel for all
such Lenders;
(d) any workout or restructuring of the Loans during the pendency
of one or more Events of Default; provided, that in the case of reimbursement of
counsel for Lenders other than Agent, such reimbursement shall be limited to one
counsel for all such Lenders; and
(e) efforts to (i) monitor the Loans or any of the other
Obligations, (ii) evaluate, observe or assess any of the Credit Parties or their
respective affairs, and (iii) verify, protect, evaluate, assess, appraise,
collect, sell, liquidate or otherwise dispose of any of the Collateral;
60
including, as to each of clauses (a) through (e) above, all reasonable
attorneys' and other professional and service providers' fees arising from such
services and other advice, assistance or other representation, including those
in connection with any appellate proceedings, and all expenses, costs, charges
and other fees incurred by such counsel and others in connection with or
relating to any of the events or actions described in this Section 11.3, all of
which shall be payable, on demand, by Borrower to Agent. Without limiting the
generality of the foregoing, such expenses, costs, charges and fees may include:
fees, costs and expenses of accountants, environmental advisors, appraisers,
investment bankers, management and other consultants and paralegals; court costs
and expenses; photocopying and duplication expenses; court reporter fees, costs
and expenses; long distance telephone charges; air express charges; telegram or
telecopy charges; secretarial overtime charges; and expenses for travel, lodging
and food paid or incurred in connection with the performance of such legal or
other advisory services.
11.4 No Waiver. Agent's or any Lender's failure, at any time or
times, to require strict performance by the Credit Parties of any provision of
this Agreement or any other Loan Document shall not waive, affect or diminish
any right of Agent or such Lender thereafter to demand strict compliance and
performance herewith or therewith. Any suspension or waiver of an Event of
Default shall not suspend, waive or affect any other Event of Default whether
the same is prior or subsequent thereto and whether the same or of a different
type. Subject to the provisions of Section 11.2, none of the undertakings,
agreements, warranties, covenants and representations of any Credit Party
contained in this Agreement or any of the other Loan Documents and no Default or
Event of Default by any Credit Party shall be deemed to have been suspended or
waived by Agent or any Lender, unless such waiver or suspension is by an
instrument in writing signed by an officer of or other authorized employee of
Agent and the applicable required Lenders and directed to Borrower specifying
such suspension or waiver.
11.5 Remedies. Agent's and Lenders' rights and remedies under this
Agreement shall be cumulative and nonexclusive of any other rights and remedies
that Agent or any Lender may have under any other agreement, including the other
Loan Documents, by operation of law or otherwise. Recourse to the Collateral
shall not be required.
11.6 Severability. Wherever possible, each provision of this
Agreement and the other Loan Documents shall be interpreted in such a manner as
to be effective and valid under applicable law, but if any provision of this
Agreement or any other Loan Document shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement or such other Loan Document.
11.7 Conflict of Terms. Except as otherwise provided in this
Agreement or any of the other Loan Documents by specific reference to the
applicable provisions of this Agreement, if any provision contained in this
Agreement conflicts with any provision in any of the other Loan Documents, the
provision contained in this Agreement shall govern and control.
11.8 Confidentiality. Agent and each Lender agree to use
commercially reasonable efforts (equivalent to the efforts Agent or such Lender
applies to maintain the confidentiality of its own confidential information) to
maintain as confidential all confidential
61
information provided to them by the Credit Parties and designated as
confidential for a period of two (2) years following receipt thereof, except
that Agent and each Lender may disclose such information (a) to Persons employed
or engaged by Agent or such Lender; (b) to any bona fide assignee or participant
or potential assignee or participant that has agreed to comply with the covenant
contained in this Section 11.8 (and any such bona fide assignee or participant
or potential assignee or participant may disclose such information to Persons
employed or engaged by them as described in clause (a) above); (c) as required
or requested by any Governmental Authority or reasonably believed by Agent or
such Lender to be compelled by any court decree, subpoena or legal or
administrative order or process; (d) as, on the advice of Agent's or such
Lender's counsel, is required by law; (e) in connection with the exercise of any
right or remedy under the Loan Documents or in connection with any Litigation to
which Agent or such Lender is a party; or (f) that ceases to be confidential
through no fault of Agent or any Lender.
11.9 GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY
OF THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE
AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. EACH CREDIT PARTY
HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN XXX XXXX
XXXXXX, XXXX XX XXX XXXX, XXX XXXX SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE CREDIT PARTIES, AGENT AND LENDERS
PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS;
PROVIDED, THAT AGENT, LENDERS AND THE CREDIT PARTIES ACKNOWLEDGE THAT ANY
APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW
YORK COUNTY AND; PROVIDED, FURTHER THAT NOTHING IN THIS AGREEMENT SHALL BE
DEEMED OR OPERATE TO PRECLUDE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL
ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER
SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN
FAVOR OF AGENT. EACH CREDIT PARTY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO
SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH
CREDIT PARTY HEREBY WAIVES ANY OBJECTION THAT SUCH CREDIT PARTY MAY HAVE BASED
UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND
HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT. EACH CREDIT PARTY HEREBY WAIVES PERSONAL SERVICE OF
THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL
62
ADDRESSED TO SUCH CREDIT PARTY AT THE ADDRESS SET FORTH IN ANNEX I OF THIS
AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF
SUCH CREDIT PARTY'S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN
THE UNITED STATES MAILS, PROPER POSTAGE PREPAID.
11.10 Notices. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval, declaration
or other communication shall or may be given to or served upon any of the
parties by any other parties, or whenever any of the parties desires to give or
serve upon any other parties any communication with respect to this Agreement,
each such notice, demand, request, consent, approval, declaration or other
communication shall be in writing and shall be deemed to have been validly
served, given or delivered (a) upon the earlier of actual receipt and three (3)
Business Days after deposit in the United States Mail, registered or certified
mail, return receipt requested, with proper postage prepaid, (b) upon
transmission, when sent by telecopy or other similar facsimile transmission
(with such telecopy or facsimile promptly confirmed by delivery of a copy by
personal delivery or United States Mail as otherwise provided in this Section
11.10); (c) one (1) Business Day after deposit with a reputable overnight
courier with all charges prepaid or (d) when delivered, if hand-delivered by
messenger, all of which shall be addressed to the party to be notified and sent
to the address or facsimile number indicated in Annex I or to such other address
(or facsimile number) as may be substituted by notice given as herein provided.
The giving of any notice required hereunder may be waived in writing by the
party entitled to receive such notice. Failure or delay in delivering copies of
any notice, demand, request, consent, approval, declaration or other
communication to any Person (other than Borrower or Agent) designated in Annex I
to receive copies shall in no way adversely affect the effectiveness of such
notice, demand, request, consent, approval, declaration or other communication.
11.11 Section Titles. The Section titles and Table of Contents
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of the agreement between the
parties hereto.
11.12 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which shall collectively and separately
constitute one agreement.
11.13 WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION
WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED
BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND
FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT
THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE,
TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, AMONG AGENT, LENDERS AND ANY CREDIT PARTY ARISING
OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED AMONG THEM IN
63
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE
TRANSACTIONS RELATED THERETO.
11.14 Press Releases and Related Matters. Each Credit Party
executing this Agreement agrees that neither it nor its Affiliates will in the
future issue any press releases or other public disclosure using the name of GE
Capital or its affiliates or referring to this Agreement, the other Loan
Documents or the Related Transactions Documents without at least two (2)
Business Days' prior notice to GE Capital and without the prior written consent
of GE Capital unless (and only to the extent that) such Credit Party or
Affiliate is required to do so under law (including as a requisite part of
reports required to be filed with the Securities and Exchange Commission), and
then, in any event, such Credit Party or Affiliate will consult with GE Capital
before issuing such press release or other public disclosure. Each Credit Party
consents to the publication by Agent or any Lender of advertising material
relating to the financing transactions contemplated by this Agreement using
Borrower's name, product photographs, logo or trademark. Agent or such Lender
shall provide a draft of any advertising material to each Credit Party for
review and comment prior to the publication thereof. Agent reserves the right to
provide to industry trade organizations information necessary and customary for
inclusion in league table measurements.
11.15 Reinstatement. This Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
any Credit Party for liquidation or reorganization, should any Credit Party
become insolvent or make an assignment for the benefit of any creditor or
creditors or should a receiver or trustee be appointed for all or any
significant part of any Credit Party's assets, and shall continue to be
effective or to be reinstated, as the case may be, if at any time payment and
performance of the Obligations, or any part thereof, is, pursuant to applicable
law, rescinded or reduced in amount, or must otherwise be restored or returned
by any obligee of the Obligations, whether as a "voidable preference,"
"fraudulent conveyance," or otherwise, all as though such payment or performance
had not been made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Obligations shall be reinstated
and deemed reduced only by such amount paid and not so rescinded, reduced,
restored or returned.
11.16 Advice of Counsel. Each of the parties represents to each
other party hereto that it has discussed this Agreement and, specifically, the
provisions of Sections 11.9 and 11.13, with its counsel.
11.17 No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
BORROWER:
INSTEEL WIRE PRODUCTS COMPANY, a North
Carolina corporation
By: /s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Treasurer
AGENT AND LENDERS:
GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent and Lender
By: /s/ Xxxxx Xxxx
--------------------------------------------
Duly Authorized Signatory
[Signature Page to
the Credit Agreement]
The following Persons are signatories to this Agreement in
their capacity as Credit Parties and not as Borrowers.
INSTEEL INDUSTRIES, INC., a North Carolina corporation
By: /s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Treasurer
INTERCONTINENTAL METALS CORPORATION, a
North Carolina corporation
By: /s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Treasurer
[Signature Page to
the Credit Agreement]
ANNEX A (RECITALS)
TO
CREDIT AGREEMENT
DEFINITIONS
Capitalized terms used in the Loan Documents shall have (unless
otherwise provided elsewhere in the Loan Documents) the following respective
meanings and all references to Sections, Exhibits, Schedules or Annexes in the
following definitions shall refer to Sections, Exhibits, Schedules or Annexes of
or to the Agreement:'
"Account Debtor" means any Person who may become obligated to any
Credit Party under, with respect to, or on account of, an Account, Chattel Paper
or General Intangibles (including a payment intangible).
"Accounting Changes" has the meaning ascribed thereto in Annex G.
"Accounts" means all "accounts," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, including (a) all
accounts receivable, other receivables, book debts and other forms of
obligations (other than forms of obligations evidenced by Chattel Paper or
Instruments), (including any such obligations that may be characterized as an
account or contract right under the Code), (b) all of each Credit Party's rights
in, to and under all purchase orders or receipts for goods or services, (c) all
of each Credit Party's rights to any goods represented by any of the foregoing
(including unpaid sellers' rights of rescission, replevin, reclamation and
stoppage in transit and rights to returned, reclaimed or repossessed goods), (d)
all rights to payment due to any Credit Party for property sold, leased,
licensed, assigned or otherwise disposed of, for a policy of insurance issued or
to be issued, for a secondary obligation incurred or to be incurred, for energy
provided or to be provided, for the use or hire of a vessel under a charter or
other contract, arising out of the use of a credit card or charge card, or for
services rendered or to be rendered by such Credit Party or in connection with
any other transaction (whether or not yet earned by performance on the part of
such Credit Party), (e) all healthcare insurance receivables, and (f) all
collateral security of any kind, now or hereafter in existence, given by any
Account Debtor or other Person with respect to any of the foregoing.
"Advance" means any Revolving Credit Advance or Swing Line Advance,
as the context may require.
"Affiliate" means, with respect to any Person, (a) each Person that,
directly or indirectly, owns or controls, whether beneficially, or as a trustee,
guardian or other fiduciary, 5% or more of the Stock having ordinary voting
power in the election of directors of such Person, (b) each Person that
controls, is controlled by or is under common control with such Person, (c) each
of such Person's officers, directors, joint venturers and partners and (d) in
the case of Borrower, the immediate family members, spouses and lineal
descendants of individuals who are Affiliates of Borrower. For the purposes of
this definition, "control" of a Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of its management or
policies, whether through the ownership of voting securities, by contract or
otherwise; provided, however, that the term "Affiliate" shall specifically
exclude Agent and each Lender.
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"Agent" means GE Capital in its capacity as Agent for Lenders or its
successor appointed pursuant to Section 9.7.
"Agreement" means the Credit Agreement by and among Borrower, the
other Credit Parties party thereto, GE Capital, as Agent and Lender and the
other Lenders from time to time party thereto, as the same may be amended,
supplemented, restated or otherwise modified from time to time.
"Appendices" has the meaning ascribed to it in the recitals to the
Agreement.
"Applicable L/C Margin" means the per annum fee, from time to time
in effect, payable with respect to outstanding Letter of Credit Obligations as
determined by reference to Section 1.5(a).
"Applicable Margins" means collectively the Applicable L/C Margin,
the Applicable Revolver Index Margin, the Applicable Term Loan A Index Margin,
the Applicable Term Loan B Index Margin, the Applicable Revolver LIBOR Margin
and the Applicable Term Loan A LIBOR Margin.
"Applicable Revolver Index Margin" means the per annum interest rate
margin from time to time in effect and payable in addition to the Index Rate
applicable to the Revolving Loan, as determined by reference to Section 1.5(a).
"Applicable Revolver LIBOR Margin" means the per annum interest rate
from time to time in effect and payable in addition to the LIBOR Rate applicable
to the Revolving Loan, as determined by reference to Section 1.5(a).
"Applicable Term Loan A Index Margin" means the per annum interest
rate from time to time in effect and payable in addition to the Index Rate
applicable to the Term Loan A, as determined by reference to Section 1.5(a).
"Applicable Term Loan A LIBOR Margin" means the per annum interest
rate from time to time in effect and payable in addition to the LIBOR Rate
applicable to the Term Loan A, as determined by reference to Section 1.5(a).
"Applicable Term Loan B Index Margin" means the per annum interest
rate from time to time in effect and payable in addition to the Index Rate
applicable to the Term Loan B, as determined by reference to Section 1.5(a).
"Assignment Agreement" has the meaning ascribed to it in Section
9.1(a).
"Bailee Letter" means bailee letters, in form and substance
satisfactory to Agent and its counsel delivered to Agent pursuant to Section
5.9.
"Bankruptcy Code" means the provisions of Title 11 of the United
States Code, 11 U.S.C. Sections 101 et seq.
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"Xxxx-and-Hold Account" means an Account arising with respect to
goods that are sold on a xxxx-and-hold basis.
"Blocked Accounts" has the meaning ascribed to it in Annex C.
"Borrower" has the meaning ascribed thereto in the preamble to the
Agreement.
"Borrower Pledge Agreement" means the Pledge Agreement of even date
herewith executed by Borrower in favor of Agent, on behalf of itself and
Lenders, pledging all Stock of Intercontinental and all Intercompany Notes owing
to or held by it.
"Borrowing Availability" means as of any date of determination the
lesser of (i) the Maximum Amount less any Reserves established by Agent at such
time and (ii) the Borrowing Base, in each case, less the sum of the Revolving
Loan and Swing Line Loan then outstanding.
"Borrowing Base" means, as of any date of determination by Agent,
from time to time, an amount equal to the sum at such time of:
(a) up to 85% of the book value of Borrower's Eligible Accounts at
such time; plus
(b) the lesser of
(i) the lesser of (x) up to 65% of the book value of Eligible
Inventory consisting of raw materials and finished goods plus
up to 55% of the book value of Eligible Inventory consisting
of work-in-process Inventory, in each case valued at the lower
of cost (determined on a first-in, first-out basis) or market
and (y) 85% of the most recently appraised NOLV of Eligible
Inventory consisting of raw materials, NOLV of Eligible
Inventory consisting of finished goods and NOLV of Eligible
Inventory consisting of work-in-process Inventory; and
(ii) 35,000,000;
in each case, less any Reserves established by Agent at such time.
"Borrowing Base Certificate" means a certificate to be executed and
delivered from time to time by Borrower's Chief Financial Officer, or another
responsible officer of Borrower having substantially the same authority and
responsibility or otherwise acceptable to Agent in the form attached to the
Agreement as Exhibit 4.1(b).
"Business Day" means any day that is not a Saturday, a Sunday or a
day on which banks are required or permitted to be closed in the States of
Illinois and/or New York and in reference to LIBOR Loans shall mean any such day
that is also a LIBOR Business Day.
"Capital Expenditures" means, with respect to any Person, all
expenditures (by the expenditure of cash or the incurrence of Indebtedness) by
such Person during any measuring
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period for any fixed assets or improvements or for replacements, substitutions
or additions thereto, that have a useful life of more than one year and that are
required to be capitalized under GAAP.
"Capital Lease" means, with respect to any Person, any lease of any
property (whether real, personal or mixed) by such Person as lessee that, in
accordance with GAAP, would be required to be classified and accounted for as a
capital lease on a balance sheet of such Person.
"Capital Lease Obligation" means, with respect to any Capital Lease
of any Person, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease.
"Cash Collateral Account" has the meaning ascribed to it Annex B.
"Cash Equivalents" has the meaning ascribed to it in Annex B.
"Cash Management Systems" has the meaning ascribed to it in Section
1.8.
"Change of Control" means any of the following: (a) any person or
group of persons (within the meaning of the Securities Exchange Act of 1934)
shall have acquired beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of 20% or more of the issued and outstanding shares of
capital Stock of Holdings having the right to vote for the election of directors
of Holdings under ordinary circumstances; (b) during any period of twelve
consecutive calendar months, individuals who at the beginning of such period
constituted the board of directors of Holdings (together with any new directors
whose election by the board of directors of Holdings or whose nomination for
election by the Stockholders of Holdings was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at
the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason other than death or disability to
constitute a majority of the directors then in office; (c) Holdings ceases to
own and control all of the economic and voting rights associated with all of the
outstanding capital Stock of Borrower or (d) Holdings ceases to own and control
all of the economic and voting rights associated with all of the outstanding
capital Stock of any of its Subsidiaries other than Borrower.
"Charges" means all federal, state, county, city, municipal, local,
foreign or other governmental taxes (including taxes owed to the PBGC at the
time due and payable), levies, assessments, charges, liens, claims or
encumbrances upon or relating to (a) the Collateral, (b) the Obligations, (c)
the employees, payroll, income or gross receipts of any Credit Party, (d) any
Credit Party's ownership or use of any properties or other assets, or (e) any
other aspect of any Credit Party's business.
"Chattel Paper" means any "chattel paper," as such term is defined
in the Code, including electronic chattel paper, now owned or hereafter acquired
by any Credit Party, wherever located.
"Closing Date" means June 2, 2004.
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"Closing Checklist" means the schedule, including all appendices,
exhibits or schedules thereto, listing certain documents and information to be
delivered in connection with the Agreement, the other Loan Documents and the
transactions contemplated thereunder, substantially in the form attached hereto
as Annex D.
"Code" means the Uniform Commercial Code as the same may, from time
to time, be enacted and in effect in the State of New York; provided, that to
the extent that the Code is used to define any term herein or in any Loan
Document and such term is defined differently in different Articles or Divisions
of the Code, the definition of such term contained in Article or Division 9
shall govern; provided, further, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection or priority of, or
remedies with respect to, Agent's or any Lender's Lien on any Collateral is
governed by the Uniform Commercial Code as enacted and in effect in a
jurisdiction other than the State of New York, the term "Code" shall mean the
Uniform Commercial Code as enacted and in effect in such other jurisdiction
solely for purposes of the provisions thereof relating to such attachment,
perfection, priority or remedies and for purposes of definitions related to such
provisions.
"Collateral" means the property covered by the Security Agreement,
the Mortgages and the other Collateral Documents and any other property, real or
personal, tangible or intangible, now existing or hereafter acquired, that may
at any time be or become subject to a security interest or Lien in favor of
Agent, on behalf of itself and Lenders, to secure the Obligations.
"Collateral Documents" means the Security Agreement, the Pledge
Agreements, the Guaranties, the Mortgages, the Patent Security Agreement, the
Trademark Security Agreement, the Copyright Security Agreement and all similar
agreements entered into guaranteeing payment of, or granting a Lien upon
property as security for payment of, the Obligations.
"Collateral Reports" means the reports with respect to the
Collateral referred to in Annex F.
"Collection Account" means that certain account of Agent, account
number 000-000-00 in the name of Agent at DeutscheBank Trust Company Americas
in New York, New York ABA No. 021 001 033, or such other account as may be
specified in writing by Agent as the "Collection Account."
"Commitment Termination Date" means the earliest of (a) June 2,
2008, (b) the date of termination of Lenders' obligations to make Advances and
to incur Letter of Credit Obligations or permit existing Loans to remain
outstanding pursuant to Section 8.2(b), and (c) the date of indefeasible
prepayment in full by Borrower of the Loans and the cancellation and return (or
stand-by guarantee) of all Letters of Credit or the cash collateralization of
all Letter of Credit Obligations pursuant to Annex B, and the permanent
reduction of the Commitments to zero dollars ($0).
"Commitments" means (a) as to any Lender, the aggregate of such
Lender's Revolving Loan Commitment (including without duplication the Swing Line
Lender's Swing
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Line Commitment as a subset of its Revolving Loan Commitment), Term Loan A
Commitment and Term Loan B Commitment as set forth on Annex J to the Agreement
or in the most recent Assignment Agreement executed by such Lender and (b) as to
all Lenders, the aggregate of all Lenders' Revolving Loan Commitments (including
without duplication the Swing Line Lender's Swing Line Commitment as a subset of
its Revolving Loan Commitment), Term Loan A Commitments and Term Loan B
Commitments, which aggregate commitment shall be Eighty-Two Million Dollars
($82,000,000) on the Closing Date, as to each of clauses (a) and (b), as such
Commitments may be reduced, amortized or adjusted from time to time in
accordance with the Agreement.
"Compliance Certificate" has the meaning ascribed to it in Annex E.
"Concentration Account" has the meaning ascribed to it in Annex C.
"Contracts" means all "contracts," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, in any event,
including all contracts, undertakings, or agreements (other than rights
evidenced by Chattel Paper, Documents or Instruments) in or under which any
Credit Party may now or hereafter have any right, title or interest, including
any agreement relating to the terms of payment or the terms of performance of
any Account.
"Control Letter" means a letter agreement between Agent and (i) the
issuer of uncertificated securities with respect to uncertificated securities in
the name of any Credit Party, (ii) a securities intermediary with respect to
securities, whether certificated or uncertificated, securities entitlements and
other financial assets held in a securities account in the name of any Credit
Party, (iii) a futures commission merchant or clearing house, as applicable,
with respect to commodity accounts and commodity contracts held by any Credit
Party, whereby, among other things, the issuer, securities intermediary or
futures commission merchant limits any security interest in the applicable
financial assets in a manner reasonably satisfactory to Agent, acknowledges the
Lien of Agent, on behalf of itself and Lenders, on such financial assets, and
agrees to follow the instructions or entitlement orders of Agent without further
consent by the affected Credit Party.
"Copyright License" means any and all rights now owned or hereafter
acquired by any Credit Party under any written agreement granting any right to
use any Copyright or Copyright registration.
"Copyright Security Agreements" means the Copyright Security
Agreements made in favor of Agent, on behalf of itself and Lenders, by each
applicable Credit Party.
"Copyrights" means all of the following now owned or hereafter
adopted or acquired by any Credit Party: (a) all copyrights and General
Intangibles of like nature (whether registered or unregistered), all
registrations and recordings thereof, and all applications in connection
therewith, including all registrations, recordings and applications in the
United States Copyright Office or in any similar office or agency of the United
States, any state or territory thereof, or any other country or any political
subdivision thereof, and (b) all reissues, extensions or renewals thereof.
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"Credit Parties" means Holdings, Borrower, and each of their
respective Subsidiaries.
"Default" means any event that, with the passage of time or notice
or both, would, unless cured or waived, become an Event of Default.
"Default Rate" has the meaning ascribed to it in Section 1.5(d).
"Deposit Accounts" means all "deposit accounts" as such term in
defined in the Code, now or hereafter held in the name of any Credit Party.
"Disbursement Accounts" has the meaning ascribed to it in Annex C.
"Disclosure Schedules" means the Schedules prepared by Borrower and
denominated as Disclosure Schedules (1.4) through (6.7) in the Index to the
Agreement.
"Documents" means any "documents," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located.
"Dollars" or "$" means lawful currency of the United States of
America.
"EBITDA" means, with respect to any Person for any fiscal period,
without duplication, an amount equal to (a) consolidated net income (with
Inventory valued on a FIFO basis) of such Person for such period, determined in
accordance with GAAP, minus (b) the sum of (i) income tax credits, (ii) interest
income, (iii) gain from extraordinary items for such period, (iv) any aggregate
net gain (but not any aggregate net loss) during such period arising from the
sale, exchange or other disposition of capital assets by such Person (including
any fixed assets, whether tangible or intangible, all inventory sold in
conjunction with the disposition of fixed assets and all securities), (v) any
cash pension or other post retirement employee benefits ("OPEB") contribution
payments, and (vi) any other non-cash gains recorded as other income that have
been added in determining consolidated net income, in each case (other than
clause (v) above) to the extent included in the calculation of consolidated net
income of such Person for such period in accordance with GAAP, but without
duplication, plus (c) the sum of (i) any provision for income taxes, (ii)
Interest Expense, (iii) loss from extraordinary items for such period as agreed
upon by Agent, (iv) depreciation and amortization for such period, (v) amortized
debt discount for such period, (vi) pension or OPEB expenses, (vii) the amount
of any deduction to consolidated net income as the result of any grant to any
members of the management of such Person of any Stock, (viii) any other non-cash
losses (other than those reflecting write-down of Inventory or Accounts)
recorded as other expenses that have been subtracted in determining consolidated
net income, and (ix) any losses or expenses specifically recorded in connection
with the termination of the Interest Rate Swaps, in each case to the extent
included in the calculation of consolidated net income of such Person for such
period in accordance with GAAP, but without duplication. For purposes of this
definition, the following items shall be excluded in determining consolidated
net income of a Person: (1) the income (or deficit) of any other Person accrued
prior to the date it became a Subsidiary of, or was merged or consolidated into,
such Person or any of such Person's Subsidiaries; (2) the income (or deficit) of
any other Person (other than a Subsidiary) in which such Person has an ownership
interest, except to the extent any such income has actually been received by
such Person in the form of
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cash dividends or distributions; (3) the undistributed earnings of any
Subsidiary of such Person to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any contractual obligation or requirement of law
applicable to such Subsidiary; (4) any restoration to income of any contingency
reserve, except to the extent that provision for such reserve was made out of
income accrued during such period; (5) any write-up of any asset; (6) any net
gain from the collection of the proceeds of life insurance policies; (7) any net
gain arising from the acquisition of any securities, or the extinguishment,
under GAAP, of any Indebtedness, of such Person; (8) in the case of a successor
to such Person by consolidation or merger or as a transferee of its assets, any
earnings of such successor prior to such consolidation, merger or transfer of
assets; and (9) any deferred credit representing the excess of equity in any
Subsidiary of such Person at the date of acquisition of such Subsidiary over the
cost to such Person of the investment in such Subsidiary.
"Eligible Accounts" has the meaning ascribed to it in Section 1.6 of
the Agreement.
"Eligible Inventory" has the meaning ascribed to it in Section 1.7
of the Agreement.
"Eligible Real Estate" means the Mortgaged Property which (a) is
located at one of the following locations (i) 0000 Xxxxx Xxxxx, Xxxxx Xxxx,
Xxxxx Xxxxxx, Xxxxx Xxxxxxxx, (ii) 0000 Xxxxx Xxxxx, Xxxxx Xxxx, Xxxxx Xxxxxx,
Xxxxx Xxxxxxxx, (iii) 000 Xxxxxx Xxxxxx, Xxxxx Xxxx, Xxxxx Xxxxxx, Xxxxx
Xxxxxxxx, (iv) 000 Xxxxxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxx Xxxxxx, Xxxxxxxxx, (v)
000 Xxxxxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxx Xxxxxx, Xxxxxxxxx, (vi) 000 Xxxxx Xxxx,
Xxxxxx, Xxxxxxx Xxxxxx, Xxxxx, (vii) 0000 Xxxxxx Xxxx, Xxxxxxxxxxxxxx,
Xxxxxxxxxxxx Xxxxxx, Xxxxxxxx, (viii) 0000 Xxxxxxxx Xxxxxxx 0000, Xxxxxxx,
Xxxxxx Xxxxxx, Xxxxxxxx and (ix) 0 Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxxx Xxxxxx,
Xxxxxxx, (b) is owned by Borrower or Holdings (b) is subject to a first priority
mortgage and Lien in favor of Agent, (c) is owned by Borrower and Holdings, as
applicable free and clear of all Liens and rights of any other Person, Agent, on
behalf of itself and Lenders, (d) is appraised pursuant to paragraph (f) of
Annex F, (e) is owned by such Credit Party free and clear of all Liens and
rights of any other Person, except the Liens in favor of Agent, on behalf of
itself and Lenders, (f) does not breach any of the representations or warranties
pertaining to such property set forth in the Loan Documents, and (g) is covered
by insurance reasonably acceptable to Agent.
"Environmental Laws" means all applicable federal, state, local and
foreign laws, statutes,codes, rules, standards and regulations, now or hereafter
in effect, and any applicable judicial or administrative interpretation thereof,
including any applicable judicial or administrative order, consent decree, order
or judgment, imposing liability or standards of conduct for or relating to the
regulation and protection of human health, safety, the environment and natural
resources (including ambient air, surface water, groundwater, wetlands, land
surface or subsurface strata, wildlife, aquatic species and vegetation).
Environmental Laws include the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. Sections 9601 et seq.)
("CERCLA"); the Hazardous Materials Transportation Authorization Act of 1994 (49
U.S.C. Sections 5101 et seq.); the Federal Insecticide, Fungicide, and
Rodenticide Act (7 U.S.C. Sections 136 et seq.); the Solid Waste Disposal Act
(42 U.S.C. Sections 6901 et seq.); the Toxic Substance Control Act (15 U.S.C.
Sections 2601 et seq.); the Clean Air Act (42 U.S.C. Sections 7401 et
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seq.); the Federal Water Pollution Control Act (33 U.S.C. Sections 1251 et
seq.); the Occupational Safety and Health Act (29 U.S.C. Sections 651 et seq.);
and the Safe Drinking Water Act (42 U.S.C. Sections 300(f) et seq.), and any and
all regulations promulgated thereunder, and all analogous state, local and
foreign counterparts or equivalents and any transfer of ownership notification
or approval statutes.
"Environmental Liabilities" means, with respect to any Person, all
liabilities, obligations, responsibilities, response, remedial and removal
costs, investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising under
or related to any Environmental Laws, Environmental Permits, or in connection
with any Release or threatened Release or presence of a Hazardous Material
whether on, at, in, under, from or about or in the vicinity of any real or
personal property.
"Environmental Permits" means all permits, licenses, authorizations,
certificates, approvals or registrations required by any Governmental Authority
under any Environmental Laws.
"Equipment" means all "equipment," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located and,
in any event, including all such Credit Party's machinery and equipment,
including processing equipment, conveyors, machine tools, data processing and
computer equipment, including embedded software and peripheral equipment and all
engineering, processing and manufacturing equipment, office machinery,
furniture, materials handling equipment, tools, attachments, accessories,
automotive equipment, trailers, trucks, forklifts, molds, dies, stamps, motor
vehicles, rolling stock and other equipment of every kind and nature, trade
fixtures and fixtures not forming a part of real property, together with all
additions and accessions thereto, replacements therefor, all parts therefor, all
substitutes for any of the foregoing, fuel therefor, and all manuals, drawings,
instructions, warranties and rights with respect thereto, and all products and
proceeds thereof and condemnation awards and insurance proceeds with respect
thereto.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any regulations promulgated thereunder.
"ERISA Affiliate" means, with respect to any Credit Party, any trade
or business (whether or not incorporated) that, together with such Credit Party,
are treated as a single employer within the meaning of Sections 414(b), (c), (m)
or (o) of the IRC.
"ERISA Event" means, with respect to any Credit Party or any ERISA
Affiliate, (a) any event described in Section 4043(c) of ERISA with respect to a
Title IV Plan; (b) the withdrawal of any Credit Party or ERISA Affiliate from a
Title IV Plan subject to Section 4063 of ERISA during a plan year in which it
was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (c) the
complete or partial withdrawal of any Credit Party or any ERISA
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Affiliate from any Multiemployer Plan; (d) the filing of a notice of intent to
terminate a Title IV Plan or the treatment of a plan amendment as a termination
under Section 4041 of ERISA; (e) the institution of proceedings to terminate a
Title IV Plan or Multiemployer Plan by the PBGC; (f) the failure by any Credit
Party or ERISA Affiliate to make when due required contributions to a
Multiemployer Plan or Title IV Plan unless such failure is cured within thirty
(30) days; (g) any other event or condition that would reasonably be expected to
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan
or for the imposition of liability under Section 4069 or 4212(c) of ERISA; (h)
the termination of a Multiemployer Plan under Section 4041A of ERISA or the
reorganization or insolvency of a Multiemployer Plan under Section 4241 or 4245
of ERISA; or (i) the loss of a Qualified Plan's qualification or tax exempt
status; or (j) the termination of a Plan described in Section 4064 of ERISA.
"ESOP" means a Plan that is intended to satisfy the requirements of
Section 4975(e)(7) of the IRC.
"Event of Default" has the meaning ascribed to it in Section 8.1.
"Existing Credit Agreement" means the Credit Agreement dated as of
January 31, 2000 among Credit Parties party thereto and Prior Lenders, as
amended.
"Excess Cash Flow" means, without duplication, with respect to any
fiscal period, Holding's consolidated EBITDA minus (a) Unfunded Capital
Expenditures during such fiscal period, minus (b) Interest Expense paid or
accrued (excluding amortized capitalized financing costs to the extent included
in determining Interest Expense) and scheduled principal payments paid or
payable in respect of Funded Debt, minus (c) income taxes paid during such
fiscal period plus or minus (as the case may be), (d) extraordinary gains or
losses which are cash items not included in the calculation of net income, as
agreed to by Agent.
"Fair Labor Standards Act" means the Fair Labor Standards Act, 29
U.S.C. Section 201 et seq.
"Federal Funds Rate" means, for any day, a floating rate equal to
the weighted average of the rates on overnight federal funds transactions among
members of the Federal Reserve System, as determined by Agent in its sole
discretion, which determination shall be final, binding and conclusive (absent
manifest error).
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System.
"Fees" means any and all fees payable to Agent or any Lender
pursuant to the Agreement or any of the other Loan Documents.
"Financial Covenants" means the financial covenants set forth in
Annex G.
"Financial Statements" means the consolidated and consolidating
income statements, statements of cash flows and balance sheets of Holdings and
its Subsidiaries delivered in accordance with Section 3.4 and Annex E.
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"Fiscal Month" means any of the monthly accounting periods of
Borrower.
"Fiscal Quarter" means any of the quarterly accounting periods of
Borrower.
"Fiscal Year" means the 52 or 53 week period, as the case may be, of
Holdings and its Subsidiaries ending on the Saturday closest to September 30 in
each year.
"Fixed Charges" means, with respect to any Person for any fiscal
period, (a) the aggregate of all Interest Expense paid or accrued during such
period (excluding amortized capitalized financing costs to the extent included
in determining Interest Expense), plus (b) scheduled payments of principal with
respect to Indebtedness during such period, plus (c) income taxes paid in cash
during such fiscal period plus (d) dividends or stock repurchases during such
fiscal period. For the avoidance of doubt, Fixed Charges shall not include any
expenses or losses specifically recorded in connection with the termination of
the Interest Rate Swaps.
"Fixed Charge Coverage Ratio" means, with respect to any Person for
any fiscal period, the ratio of EBITDA minus Unfunded Capital Expenditures to
Fixed Charges.
"Fixtures" means all "fixtures" as such term is defined in the Code,
now owned or hereafter acquired by any Credit Party.
"Funded Debt" means, with respect to any Person, without
duplication, all Indebtedness for borrowed money evidenced by notes, bonds,
debentures, or similar evidences of Indebtedness and that by its terms matures
more than one year from, or is directly or indirectly renewable or extendible at
such Person's option under a revolving credit or similar agreement obligating
the lender or lenders to extend credit over a period of more than one year from
the date of creation thereof, and specifically including Capital Lease
Obligations, current maturities of long-term debt, revolving credit and
short-term debt extendible beyond one year at the option of the debtor, and also
including, in the case of Borrower, the Obligations and, without duplication,
Guaranteed Indebtedness consisting of guaranties of Funded Debt of other
Persons.
"GAAP" means generally accepted accounting principles in the United
States of America, consistently applied, as such term is further defined in
Annex G to the Agreement.
"GE Capital" means General Electric Capital Corporation, a Delaware
corporation.
"GE Capital Fee Letter" means that certain amended and restated
letter, dated as of June 2, 2004, between GE Capital and Borrower with respect
to certain Fees to be paid from time to time by Borrower to GE Capital.
"General Intangibles" means "general intangibles," as such term is
defined in the Code, now owned or hereafter acquired by any Credit Party,
including all right, title and interest that such Credit Party may now or
hereafter have in or under any Contract, all payment intangibles, customer
lists, Licenses, Copyrights, Trademarks, Patents, and all applications therefor
and reissues, extensions or renewals thereof, rights in Intellectual Property,
interests in partnerships, joint ventures and other business associations,
licenses, permits, copyrights, trade
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secrets, proprietary or confidential information, inventions (whether or not
patented or patentable), technical information, procedures, designs, knowledge,
know-how, software, data bases, data, skill, expertise, experience, processes,
models, drawings, materials and records, goodwill (including the goodwill
associated with any Trademark or Trademark License), all rights and claims in or
under insurance policies (including insurance for fire, damage, loss and
casualty, whether covering personal property, real property, tangible rights or
intangible rights, all liability, life, key man and business interruption
insurance, and all unearned premiums), uncertificated securities, chooses in
action, deposit, checking and other bank accounts, rights to receive tax refunds
and other payments, rights to receive dividends, distributions, cash,
Instruments and other property in respect of or in exchange for pledged Stock
and Investment Property, rights of indemnification, all books and records,
correspondence, credit files, invoices and other papers, including without
limitation all tapes, cards, computer runs and other papers and documents in the
possession or under the control of such Credit Party or any computer bureau or
service company from time to time acting for such Credit Party.
"Goods" means any "goods" as defined in the Code, now owned or
hereafter acquired by any Credit Party, wherever located, including embedded
software to the extent included in "goods" as defined in the Code, manufactured
homes, standing timber that is cut and removed for sale and unborn young of
animals.
"Governmental Authority" means any nation or government, any state
or other political subdivision thereof, and any agency, department or other
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guaranteed Indebtedness" means, as to any Person, any obligation of
such Person guaranteeing, providing comfort or otherwise supporting any
Indebtedness, lease, dividend, or other obligation ("primary obligation") of any
other Person (the "primary obligor") in any manner, including any obligation or
arrangement of such Person to (a) purchase or repurchase any such primary
obligation, (b) advance or supply funds (i) for the purchase or payment of any
such primary obligation or (ii) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet condition of the primary obligor, (c) purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation, (d) protect the beneficiary of such arrangement from
loss (other than product warranties given in the ordinary course of business) or
(e) indemnify the owner of such primary obligation against loss in respect
thereof. The amount of any Guaranteed Indebtedness at any time shall be deemed
to be an amount equal to the lesser at such time of (x) the stated or
determinable amount of the primary obligation in respect of which such
Guaranteed Indebtedness is incurred and (y) the maximum amount for which such
Person may be liable pursuant to the terms of the instrument embodying such
Guaranteed Indebtedness, or, if not stated or determinable, the maximum
reasonably anticipated liability (assuming full performance) in respect thereof.
"Guaranties" means, collectively, the Holdings Guaranty, each
Subsidiary Guaranty and any other guaranty executed by any Guarantor in favor of
Agent and Lenders in respect of the Obligations.
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"Guarantors" means Holdings, each Subsidiary of Holdings other than
Borrower and each other Person, if any, that executes a guaranty or other
similar agreement in favor of Agent, for itself and the ratable benefit of
Lenders, in connection with the transactions contemplated by the Agreement and
the other Loan Documents.
"Hazardous Material" means any substance, material or waste that is
regulated by, or forms the basis of liability now or hereafter under, any
Environmental Laws, including any material or substance that is (a) defined as a
"solid waste," "hazardous waste," "hazardous material," "hazardous substance,"
"extremely hazardous waste," "restricted hazardous waste," "pollutant,"
"contaminant," "hazardous constituent," "special waste," "toxic substance" or
other similar term or phrase under any Environmental Laws, or (b) petroleum or
any fraction or by-product thereof, asbestos, polychlorinated biphenyls (PCB's),
or any radioactive substance.
"Holdings" has the meaning ascribed thereto in the recitals to the
Agreement.
"Holdings Guaranty" means the guaranty of even date herewith
executed by Holdings in favor of Agent and Lenders.
"Holdings Pledge Agreement" means the Pledge Agreement of even date
herewith executed by Holdings in favor of Agent, on behalf of itself and
Lenders, pledging all Stock of Borrower and all Intercompany Notes owing to or
held by it.
"Inactive Subsidiaries" means Intercontinental Metals Corporation, a
North Carolina Corporation.
"Indebtedness" means , with respect to any Person, without
duplication (a) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property payment for which is deferred 6 months or
more, but excluding obligations to trade creditors incurred in the ordinary
course of business that are unsecured and not overdue by more than 6 months
unless being contested in good faith, (b) all reimbursement and other
obligations with respect to letters of credit, bankers' acceptances and surety
bonds, whether or not matured, (c) all obligations evidenced by notes, bonds,
debentures or similar instruments, (d) all indebtedness created or arising under
any conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (e) all Capital Lease Obligations and the present
value (discounted at the Index Rate as in effect on the Closing Date) of future
rental payments under all synthetic leases, (f) all obligations of such Person
under commodity purchase or option agreements or other commodity price hedging
arrangements, in each case whether contingent or matured, (g) all obligations of
such Person under any foreign exchange contract, currency swap agreement,
interest rate swap, cap or collar agreement or other similar agreement or
arrangement designed to alter the risks of that Person arising from fluctuations
in currency values or interest rates, in each case whether contingent or
matured, (h) all Indebtedness referred to above secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien upon or in property or other assets (including accounts
and contract rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness, and (i) the
Obligations.
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"Indemnified Liabilities" has the meaning ascribed to it in
Section 1.13.
"Indemnified Person" has the meaning ascribed to it in Section 1.13.
"Index Rate" means, for any day, a floating rate equal to the higher
of (i) the rate publicly quoted from time to time by The Wall Street Journal as
the "prime rate" (or, if The Wall Street Journal ceases quoting a prime rate,
the highest per annum rate of interest published by the Federal Reserve Board in
Federal Reserve statistical release H.15 (519) entitled "Selected Interest
Rates" as the Bank prime loan rate or its equivalent), and (ii) the Federal
Funds Rate plus 50 basis points per annum. Each change in any interest rate
provided for in the Agreement based upon the Index Rate shall take effect at the
time of such change in the Index Rate.
"Index Rate Loan" means a Loan or portion thereof bearing interest
by reference to the Index Rate.
"Instruments" means all "instruments," as such term is defined in
the Code, now owned or hereafter acquired by any Credit Party, wherever located,
and, in any event, including all certificated securities, all certificates of
deposit, and all promissory notes and other evidences of indebtedness, other
than instruments that constitute, or are a part of a group of writings that
constitute, Chattel Paper.
"Intellectual Property" means any and all Licenses, Patents,
Copyrights, Trademarks, and the goodwill associated with such Trademarks.
"Intercompany Notes" has the meaning ascribed to it in Section 6.3.
"Intercontinental" means Intercontinental Metals Corporation, a
North Carolina corporation.
"Interest Coverage Ratio" means, with respect to any Person for any
period, the ratio of EBITDA to Interest Expense.
"Interest Expense" means, with respect to any Person for any fiscal
period, interest expense (whether cash or non-cash) of such Person determined in
accordance with GAAP for the relevant period ended on such date, including
interest expense with respect to any Funded Debt of such Person and interest
expense for the relevant period that has been capitalized on the balance sheet
of such Person.
"Interest Rate Swaps" means the interest rate swap transactions
between Holdings and Bank of America, N.A. (Reference No. 148487) for a notional
amount of $25,000,000 and the interest rate swap transactions between Holdings
and First Union National Bank (n/k/a Wachovia National Bank, N.A. (Reference No.
135835/195600) for a notional amount of $25,000,000.
"Interest Payment Date" means (a) as to any Index Rate Loan, the
first Business Day of each month to occur while such Loan is outstanding, and
(b) as to any LIBOR Loan, the last day of the applicable LIBOR Period; provided
that, in addition to the foregoing, each of (x)
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the date upon which all of the Commitments have been terminated and the Loans
have been paid in full and (y) the Commitment Termination Date shall be deemed
to be an "Interest Payment Date" with respect to any interest that has then
accrued under the Agreement.
"Inventory" means any "inventory," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located, and
in any event including inventory, merchandise, goods and other personal property
that are held by or on behalf of any Credit Party for sale or lease or are
furnished or are to be furnished under a contract of service, or that constitute
raw materials, work in process, finished goods, returned goods, supplies or
materials of any kind, nature or description used or consumed or to be used or
consumed in such Credit Party's business or in the processing, production,
packaging, promotion, delivery or shipping of the same, including all supplies
and embedded software.
"Investment Property" means all "investment property" as such term
is defined in the Code now owned or hereafter acquired by any Credit Party,
wherever located, including (i) all securities, whether certificated or
uncertificated, including stocks, bonds, interests in limited liability
companies, partnership interests, treasuries, certificates of deposit, and
mutual fund shares; (ii) all securities entitlements of any Credit Party,
including the rights of such Credit Party to any securities account and the
financial assets held by a securities intermediary in such securities account
and any free credit balance or other money owing by any securities intermediary
with respect to that account; (iii) all securities accounts of any Credit Party;
(iv) all commodity contracts of any Credit Party; and (v) all commodity accounts
held by any Credit Party.
"IRB Loan" means Indebtedness evidenced by the Promissory Note dated
September 1, 1990 executed and delivered by Borrower and Holdings in favor of
Industrial Development Authority of the City of Fredericksburg Virginia in the
original principal amount of $4,205,000.
"IRB Loan Relevant Documents" means the Promissory Note referenced
in the definition of the term "IRB Loan", the Indenture of Trust, dated as of
September 1, 1990, between Industrial Development Authority of the City of
Fredericksburg Virginia (the "IRB Authority") and Crestar Bank as Trustee
relating to $4,205,000 Industrial Development Authority of the City of
Fredericksburg, Virginia Industrial Development First Mortgage Revenue Refunding
Bonds (Insteel Industries, Inc./Rappahannock Wire Company Project) Series of
1990 (the "IRB Bonds") and the Refunding Agreement, dated as of September 1,
1990, between the IRB Authority, Holdings and Borrower (f/k/a Rappahannock Wire
Company), pursuant to which the IRB Authority agreed to loan the proceeds from
the issue of its IRB Bonds to the Holdings and Borrower, and each other
agreement, document and instrument executed and delivered in connection
therewith, in each case as in effect on the Closing Date.
"IRC" means the Internal Revenue Code of 1986, as amended, and all
regulations promulgated thereunder.
"Keyman Life Insurance" means the keyman life insurance policy on
the life of H.O. Xxxxx, III issued by Northwestern Mutual (or any replacement
policy).
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"IRS" means the Internal Revenue Service.
"L/C Issuer" has the meaning ascribed to it in Annex B.
"L/C Sublimit" has the meaning ascribed to in it Annex B.
"Lenders" means GE Capital, the other Lenders named on the signature
pages of the Agreement, and, if any such Lender shall decide to assign all or
any portion of the Obligations, such term shall include any assignee of such
Lender.
"Letter of Credit Fee" has the meaning ascribed to it in Annex B.
"Letter of Credit Obligations" means all outstanding obligations
incurred by Agent and Lenders at the request of Borrower, whether direct or
indirect, contingent or otherwise, due or not due, in connection with the
issuance of Letters of Credit by Agent or another L/C Issuer or the purchase of
a participation as set forth in Annex B with respect to any Letter of Credit.
The amount of such Letter of Credit Obligations shall equal the maximum amount
that may be payable by Agent or Lenders thereupon or pursuant thereto.
"Letters of Credit" means documentary or standby letters of credit
issued for the account of Borrower by any L/C Issuer, and bankers' acceptances
issued by Borrower, for which Agent and Lenders have incurred Letter of Credit
Obligations.
"Letter-of Credit Rights" means "letter-of-credit rights" as such
term is defined in the Code, now owned or hereafter acquired by any Credit
Party, including rights to payment or performance under a letter of credit,
whether or not such Credit Party, as beneficiary, has demanded or is entitled to
demand payment or performance.
"Leverage Ratio" means, with respect to Borrower, on a consolidated
basis, the ratio of (a) Funded Debt as of any date of determination (including
the average daily closing balance of the Revolving Loan for the thirty (30) days
preceding and including any date of determination), to (b) EBITDA for the
immediately preceding four consecutive Fiscal Quarter period most recently then
ended as the date of determination (or with respect to (i) the Fiscal Quarter
ending on or about January 1, 2005, EBITDA shall be deemed to be EBITDA as
calculated for the immediately preceding two consecutive Fiscal Quarters then
ended multiplied by 2.0 and (ii) the Fiscal Quarter ending on or about April 2,
2005, EBITDA shall be deemed to be EBITDA as calculated for the immediately
preceding three Fiscal Quarters then ended multiplied by 1.333).
"LIBOR Business Day" means a Business Day on which banks in the City
of London are generally open for interbank or foreign exchange transactions.
"LIBOR Loan" means a Loan or any portion thereof bearing interest by
reference to the LIBOR Rate.
"LIBOR Period" means, with respect to any LIBOR Loan, each period
commencing on a LIBOR Business Day selected by Borrower pursuant to the
Agreement and ending one, two or three months thereafter, as selected by
Borrower's irrevocable notice to Agent
A-16
as set forth in Section 1.5(e); provided, that the foregoing provision relating
to LIBOR Periods is subject to the following:
(a) if any LIBOR Period would otherwise end on a day that is not a
LIBOR Business Day, such LIBOR Period shall be extended to the next
succeeding LIBOR Business Day unless the result of such extension would be
to carry such LIBOR Period into another calendar month in which event such
LIBOR Period shall end on the immediately preceding LIBOR Business Day;
(b) any LIBOR Period that would otherwise extend beyond the
Commitment Termination Date shall end two (2) LIBOR Business Days prior to
such date;
(c) any LIBOR Period that begins on the last LIBOR Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such LIBOR Period)
shall end on the last LIBOR Business Day of a calendar month;
(d) Borrower shall select LIBOR Periods so as not to require a
payment or prepayment of any LIBOR Loan during a LIBOR Period for such
Loan; and
(e) Borrower shall select LIBOR Periods so that there shall be no
more than five (5) separate LIBOR Loans in existence at any one time.
"LIBOR Rate" means for each LIBOR Period, a rate of interest
determined by Agent equal to:
(a) the offered rate for deposits in United States Dollars for the
applicable LIBOR Period that appears on Telerate Page 3750 as of 11:00
a.m. (London time), on the second full LIBOR Business Day next preceding
the first day of such LIBOR Period (unless such date is not a Business
Day, in which event the next succeeding Business Day will be used);
divided by
(b) a number equal to 1.0 minus the aggregate (but without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the day that is two (2) LIBOR Business Days
prior to the beginning of such LIBOR Period (including basic,
supplemental, marginal and emergency reserves under any regulations of the
Federal Reserve Board or other Governmental Authority having jurisdiction
with respect thereto, as now and from time to time in effect) for
Eurocurrency funding (currently referred to as "Eurocurrency Liabilities"
in Regulation D of the Federal Reserve Board that are required to be
maintained by a member bank of the Federal Reserve System).
If such interest rates shall cease to be available from Telerate
News Service, the LIBOR Rate shall be determined from such financial
reporting service or other information as shall be mutually acceptable to
Agent and Borrower.
"License" means any Copyright License, Patent License, Trademark
License or other license of rights or interests now held or hereafter acquired
by any Credit Party.
A-17
"Lien" means any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any lease
or title retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of, or agreement to
give, any financing statement perfecting a security interest under the Code or
comparable law of any jurisdiction).
"Litigation" has the meaning ascribed to it in Section 3.13.
"Loan Account" has the meaning ascribed to it in Section 1.12.
"Loan Documents" means the Agreement, the Notes, the Collateral
Documents, the GE Capital Fee Letter, the Master Standby Agreement, the Master
Documentary Agreement, and all other agreements, instruments, documents and
certificates identified in the Closing Checklist executed and delivered to, or
in favor of, Agent or any Lenders and including all other pledges, powers of
attorney, consents, assignments, contracts, notices, letter of credit agreements
and all other written matter whether heretofore, now or hereafter executed by or
on behalf of any Credit Party, or any employee of any Credit Party, and
delivered to Agent or any Lender in connection with the Agreement or the
transactions contemplated thereby. Any reference in the Agreement or any other
Loan Document to a Loan Document shall include all appendices, exhibits or
schedules thereto, and all amendments, restatements, supplements or other
modifications thereto, and shall refer to the Agreement or such Loan Document as
the same may be in effect at any and all times such reference becomes operative.
"Loans" means the Revolving Loan, the Swing Line Loan and the Term
Loans.
"Lock Boxes" has the meaning ascribed to it in Annex C.
"Margin Stock" has the meaning ascribed to it in Section 3.10.
"Master Documentary Agreement" means the Master Agreement for
Documentary Letters of Credit dated as of the Closing Date between Borrower, as
Applicant, and GE Capital, as Issuer.
"Master Standby Agreement" means the Master Agreement for Standby
Letters of Credit dated as of the Closing Date between Borrower, as Applicant,
and GE Capital, as Issuer.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, prospects or financial or other condition of any
Credit Party, (b) Borrower's ability to pay any of the Loans or any of the other
Obligations in accordance with the terms of the Agreement, (c) the Collateral or
Agent's Liens, on behalf of itself and Lenders, on the Collateral or the
priority of such Liens, or (d) Agent's or any Lender's rights and remedies under
the Agreement and the other Loan Documents. Without limiting the generality of
the foregoing, any event or occurrence adverse to one or more Credit Parties
which results or could reasonably be expected to result in losses, costs,
damages, liabilities or expenditures in excess of $5,000,000 shall constitute a
Material Adverse Effect.
A-18
"Maximum Amount" means, as of any date of determination, an amount
equal to the Revolving Loan Commitment of all Lenders as of that date.
"Mortgaged Properties" has the meaning assigned to it in Annex D.
"Mortgages" means each of the mortgages, deeds of trust, leasehold
mortgages, leasehold deeds of trust, collateral assignments of leases or other
real estate security documents delivered by any Credit Party to Agent on behalf
of itself and Lenders with respect to the Mortgaged Properties, all in form and
substance reasonably satisfactory to Agent.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA, and to which any Credit Party or ERISA Affiliate is
making, is obligated to make or has made or been obligated to make,
contributions on behalf of participants who are or were employed by any of them.
"Net Asset Disposition Proceeds" has the meaning assigned to it in
Section 1.3(b)(ii).
"Net Orderly Liquidation Value" or "NOLV" means, with respect to any
category of Eligible Inventory or Equipment, as the case may be, the appraised
orderly liquidation value (expressed as a percentage) as determined by Agent in
good faith based on the most recent appraisal report prepared by an appraiser
reasonably acceptable to Agent which reflects the net cash value (expressed as a
percentage) expected by the appraiser to be derived from a sale or disposition
at a liquidation or going-out-of-business sale of such Eligible Inventory or
Equipment, as the case may be, after deducting all costs, expenses and fees
attributable to such sale or disposition, including, without limitation, all
fees, costs and expenses of any attorneys, appraisers, auctioneers and
liquidators engaged to conduct such sale or disposition, all costs and expenses
of removing and delivering the same to purchasers, and the costs and expenses of
operating Credit Parties' businesses and securing the Collateral during the
pendency of the liquidation process.
"Non-Funding Lender" has the meaning ascribed to it in Section
9.9(a)(ii).
"Notes" means, collectively, the Revolving Notes, the Swing Line
Note and the Term Notes.
"Notice of Conversion/Continuation" has the meaning ascribed to it
in Section 1.5(e).
"Notice of Revolving Credit Advance" has the meaning ascribed to it
in Section 1.1(a).
"Obligations" means all loans, advances, debts, liabilities and
obligations, for the performance of covenants, tasks or duties or for payment of
monetary amounts (whether or not such performance is then required or
contingent, or such amounts are liquidated or determinable) owing by any Credit
Party to Agent or any Lender, and all covenants and duties regarding such
amounts, of any kind or nature, present or future, whether or not evidenced by
any note, agreement, letter of credit agreement or other instrument, arising
under the Agreement or any of
A-19
the other Loan Documents. This term includes all principal, interest (including
all interest that accrues after the commencement of any case or proceeding by or
against any Credit Party in bankruptcy, whether or not allowed in such case or
proceeding), Fees, hedging obligations under swaps, caps and collar arrangements
provided by any Lender, expenses, attorneys' fees and any other sum chargeable
to any Credit Party under the Agreement or any of the other Loan Documents.
"Overadvance" has the meaning ascribed to it in Section 1.1(a)(iii).
"Patent License" means rights under any written agreement now owned
or hereafter acquired by any Credit Party granting any right with respect to any
invention on which a Patent is in existence.
"Patent Security Agreements" means the Patent Security Agreements
made in favor of Agent, on behalf of itself and Lenders, by each applicable
Credit Party.
"Patents" means all of the following in which any Credit Party now
holds or hereafter acquires any interest: (a) all letters patent of the United
States or any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or of any other country,
including registrations, recordings and applications in the United States Patent
and Trademark Office or in any similar office or agency of the United States,
any State or any other country, and (b) all reissues, continuations,
continuations-in-part or extensions thereof.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means a Plan described in Section 3(2) of ERISA.
"Permitted Encumbrances" means the following encumbrances: (a) Liens
for taxes or assessments or other governmental Charges not yet due and payable
or which are being contested in accordance with Section 5.2(b); (b) pledges or
deposits of money securing statutory obligations under workmen's compensation,
unemployment insurance, social security or public liability laws or similar
legislation (excluding Liens under ERISA); (c) pledges or deposits of money
securing bids, tenders, contracts (other than contracts for the payment of
money) or leases to which any Credit Party is a party as lessee made in the
ordinary course of business; (d) inchoate and unperfected workers', mechanics'
or similar liens arising in the ordinary course of business, so long as such
Liens attach only to Equipment, Fixtures and/or Real Estate; (e) carriers',
warehousemen's, suppliers' or other similar possessory liens arising in the
ordinary course of business and securing liabilities in an outstanding aggregate
amount not in excess of $ 100,000 at any time, so long as such Liens attach only
to Inventory; (f) deposits securing, or in lieu of, surety, appeal or customs
bonds in proceedings to which any Credit Party is a party; (g) any attachment or
judgment lien not constituting an Event of Default under Section 8.1(j); (h)
zoning restrictions, easements, licenses, or other restrictions on the use of
any Real Estate or other minor irregularities in title (including leasehold
title) thereto, so long as the same do not materially impair the use, value, or
marketability of such Real Estate; (i) presently existing or hereafter created
Liens in favor of Agent, on behalf of Lenders; (j) Liens expressly permitted
under clauses (b) and (c) of Section 6.7 of the Agreement; and (k) pledge of
cash or treasury
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securities in an aggregate amount or face amount not to exceed $700,000 to
secure the repayment of the IRB Loan.
"Person" means any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
limited liability company, institution, public benefit corporation, other entity
or government (whether federal, state, county, city, municipal, local, foreign,
or otherwise, including any instrumentality, division, agency, body or
department thereof).
"Plan" means, at any time, an "employee benefit plan," as defined in
Section 3(3) of ERISA, that any Credit Party or ERISA Affiliate maintains,
contributes to or has an obligation to contribute to on behalf of participants
who are or were employed by any Credit Party.
"Pledge Agreements" means the Holdings Pledge Agreement, the
Borrower Pledge Agreement and any other pledge agreement entered into after the
Closing Date by any Credit Party (as required by the Agreement or any other Loan
Document).
"Prior Lender" means Bank of America, N.A., as Administrative Agent
and lender, and other lenders from time to time party to the Existing Credit
Agreement.
"Prior Lender Obligations" means all liabilities, obligations and
indebtedness of certain Credit Parties pursuant to the Existing Credit
Agreement.
"Proceeds" means "proceeds," as such term is defined in the Code,
including (a) any and all proceeds of any insurance, indemnity, warranty or
guaranty payable to any Credit Party from time to time with respect to any of
the Collateral, (b) any and all payments (in any form whatsoever) made or due
and payable to any Credit Party from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any Governmental Authority (or any Person acting under
color of governmental authority), (c) any claim of any Credit Party against
third parties (i) for past, present or future infringement of any Patent or
Patent License, or (ii) for past, present or future infringement or dilution of
any Copyright, Copyright License, Trademark or Trademark License, or for injury
to the goodwill associated with any Trademark or Trademark License, (d) any
recoveries by any Credit Party against third parties with respect to any
litigation or dispute concerning any of the Collateral including claims arising
out of the loss or nonconformity of, interference with the use of, defects in,
or infringement of rights in, or damage to, Collateral, (e) all amounts
collected on, or distributed on account of, other Collateral, including
dividends, interest, distributions and Instruments with respect to Investment
Property and pledged Stock, and (f) any and all other amounts, rights to payment
or other property acquired upon the sale, lease, license, exchange or other
disposition of Collateral and all rights arising out of Collateral.
"Pro Forma" means the unaudited consolidated balance sheet of
Holdings and its Subsidiaries as of May 1, 2004 after giving pro forma effect to
the Related Transactions.
"Projections" means Borrower's forecasted consolidated: (a) balance
sheets; (b) profit and loss statements; and (c) cash flow statements consistent
with the historical Financial Statements of Borrower, together with appropriate
supporting details and a statement of underlying assumptions.
A-21
"Pro Rata Share" means with respect to all matters relating to any
Lender (a) with respect to the Revolving Loan, the percentage obtained by
dividing (i) the Revolving Loan Commitment of that Lender by (ii) the aggregate
Revolving Loan Commitments of all Lenders, (b) with respect to any Term Loan,
the percentage obtained by dividing (i) the applicable Term Loan Commitment of
that Lender by (ii) the aggregate applicable Term Loan Commitments of all
Lenders, as any such percentages may be adjusted by assignments permitted
pursuant to Section 9.1, (c) with respect to all Loans, the percentage obtained
by dividing (i) the aggregate Commitments of that Lender by (ii) the aggregate
Commitments of all Lenders, and (d) with respect to all Loans on and after the
Commitment Termination Date, the percentage obtained by dividing (i) the
aggregate outstanding principal balance of the Loans held by that Lender, by
(ii) the outstanding principal balance of the Loans held by all Lenders.
"Qualified Plan" means a Pension Plan that is intended to be
tax-qualified under Section 401(a) of the IRC.
"Qualified Assignee" means (a) any Lender, any Affiliate of any
Lender and, with respect to any Lender that is an investment fund that invests
in commercial loans, any other investment fund that invests in commercial loans
and that is managed or advised by the same investment advisor as such Lender or
by an Affiliate of such investment advisor, and (b) any commercial bank, savings
and loan association or savings bank or any other entity which is an "accredited
investor" (as defined in Regulation D under the Securities Act) which extends
credit or buys loans as one of its businesses, including insurance companies,
mutual funds, lease financing companies and commercial finance companies, in
each case, which has a rating of BBB or higher from S&P and a rating of Baa2 or
higher from Xxxxx'x at the date that it becomes a Lender and which, through its
applicable lending office, is capable of lending to Borrower without the
imposition of any withholding or similar taxes; provided that no Person proposed
to become a Lender after the Closing Date and determined by Agent to be acting
in the capacity of a vulture fund or distressed debt purchaser shall be a
Qualified Assignee, and no Person or Affiliate of such Person proposed to become
a Lender after the Closing Date and that holds Subordinated Debt or Stock issued
by any Credit Party shall be a Qualified Assignee.
"Real Estate" has the meaning ascribed to it in Section 3.6.
"Real Estate Held for Sale" has the meaning ascribed to it in
Section 6.8.
"Reference Availability" means, for any period, the lesser of (i)
the daily average Borrowing Availability for the immediately preceding 90-day
period and (ii) the daily average Borrowing Availability for the immediately
preceding 30-day period.
"Refinancing" means the repayment in full by Borrower of the Prior
Lender Obligations on the Closing Date.
"Refunded Swing Line Loan" has the meaning ascribed to it in Section
1.1(c)(iii).
"Related Transactions" means the initial borrowing under the
Revolving Loan and the Term Loans on the Closing Date, the Refinancing, the
payment of all fees, costs and expenses associated with all of the foregoing and
the execution and delivery of all of the Related Transactions Documents.
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"Related Transactions Documents" means the Loan Documents and all
other agreements or instruments executed in connection with the Related
Transactions.
"Release" means any release, threatened release, spill, emission,
leaking, pumping, pouring, emitting, emptying, escape, injection, deposit,
disposal, discharge, dispersal, dumping, leaching or migration of Hazardous
Material in the indoor or outdoor environment, including the movement of
Hazardous Material through or in the air, soil, surface water, ground water or
property.
"Requisite Lenders" means Lenders having (a) more than 50% of the
Commitments of all Lenders, or (b) if the Commitments have been terminated, more
than 50% of the aggregate outstanding amount of the Loans.
"Requisite Revolving Lenders" means Lenders having (a) more than 50%
of the Revolving Loan Commitments of all Lenders, or (b) if the Revolving Loan
Commitments have been terminated, more than 50% of the aggregate outstanding
amount of the Revolving Loan.
"Reserves" means (a) reserves established by Agent from time to time
against Eligible Inventory pursuant to Section 5.9, (b) reserves established
pursuant to Section 5.4(c), and (c) such other reserves against Eligible
Accounts, Eligible Inventory, Maximum Amount or Borrowing Availability that
Agent may, in its reasonable credit judgment, establish from time to time.
Without limiting the generality of the foregoing, Reserves established to ensure
the payment of accrued Interest Expenses or Indebtedness shall be deemed to be a
reasonable exercise of Agent's credit judgment.
"Restricted Payment" means, with respect to any Credit Party (a) the
declaration or payment of any dividend or the incurrence of any liability to
make any other payment or distribution of cash or other property or assets in
respect of Stock; (b) any payment on account of the purchase, redemption,
defeasance, sinking fund or other retirement of such Credit Party's Stock or any
other payment or distribution made in respect thereof, either directly or
indirectly; (c) any payment or prepayment of principal of, premium, if any, or
interest, fees or other charges on or with respect to, and any redemption,
purchase, retirement, defeasance, sinking fund or similar payment and any claim
for rescission with respect to, any Subordinated Debt; (d) any payment made to
redeem, purchase, repurchase or retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire Stock of such Credit
Party now or hereafter outstanding; (e) any payment of a claim for the
rescission of the purchase or sale of, or for material damages arising from the
purchase or sale of, any shares of such Credit Party's Stock or of a claim for
reimbursement, indemnification or contribution arising out of or related to any
such claim for damages or rescission; (f) any payment, loan, contribution, or
other transfer of funds or other property to any Stockholder of such Credit
Party other than payment of compensation or benefits in the ordinary course of
business to Stockholders who are employees or directors of such Credit Party;
and (g) any payment of management fees (or other fees of a similar nature) by
such Credit Party to any Stockholder of such Credit Party or its Affiliates.
"Retiree Welfare Plan" means, at any time, a Welfare Plan that
provides for continuing coverage or benefits for any participant or any
beneficiary of a participant after such participant's termination of employment,
other than continuation coverage provided pursuant to
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Section 4980B of the IRC and at the sole expense of the participant or the
beneficiary of the participant.
"Revolving Credit Advance" has the meaning ascribed to it in Section
1.1(a)(i).
"Revolving Lenders" means, as of any date of determination, Lenders
having a Revolving Loan Commitment.
"Revolving Loan" means, at any time, the sum of (i) the aggregate
amount of Revolving Credit Advances outstanding to Borrower plus (ii) the
aggregate Letter of Credit Obligations incurred on behalf of Borrower. Unless
the context otherwise requires, references to the outstanding principal balance
of the Revolving Loan shall include the outstanding balance of Letter of Credit
Obligations.
"Revolving Loan Commitment" means (a) as to any Revolving Lender,
the aggregate commitment of such Revolving Lender to make Revolving Credit
Advances or incur Letter of Credit Obligations as set forth on Annex J to the
Agreement or in the most recent Assignment Agreement executed by such Revolving
Lender and (b) as to all Revolving Lenders, the aggregate commitment of all
Revolving Lenders to make Revolving Credit Advances or incur Letter of Credit
Obligations, which aggregate commitment shall be Sixty Million Dollars
($60,000,000) on the Closing Date, as such amount may be adjusted, if at all,
from time to time in accordance with the Agreement.
"Revolving Note" has the meaning ascribed to it in Section
1.1(a)(ii).
"Security Agreement" means the Security Agreement of even date
herewith entered into by and among Agent, on behalf of itself and Lenders, and
each Credit Party that is a signatory thereto.
"Software" means all "software" as such term is defined in the Code,
now owned or hereafter acquired by any Credit Party, other than software
embedded in any category of Goods, including all computer programs and all
supporting information provided in connection with a transaction related to any
program.
"Solvent" means, with respect to any Person on a particular date,
that on such date (a) the fair value of the property of such Person is greater
than the total amount of liabilities, including contingent liabilities, of such
Person; (b) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured; (c) such Person does
not intend to, and does not believe that it will, incur debts or liabilities
beyond such Person's ability to pay as such debts and liabilities mature; and
(d) such Person is not engaged in a business or transaction, and is not about to
engage in a business or transaction, for which such Person's property would
constitute an unreasonably small capital. The amount of contingent liabilities
(such as litigation, guaranties and pension plan liabilities) at any time shall
be computed as the amount that, in light of all the facts and circumstances
existing at the time, represents the amount that can be reasonably be expected
to become an actual or matured liability.
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"Stock" means all shares, options, warrants, general or limited
partnership interests, membership interests or other equivalents (regardless of
how designated) of or in a corporation, partnership, limited liability company
or equivalent entity whether voting or nonvoting, including common stock,
preferred stock or any other "equity security" (as such term is defined in Rule
3a11-1 of the General Rules and Regulations promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934).
"Stockholder" means, with respect to any Person, each holder of
Stock of such Person.
"Subordinated Debt" means any Indebtedness of any Credit Party
subordinated to the Obligations in a manner and form satisfactory to Agent and
Lenders in their sole discretion, as to right and time of payment and as to any
other rights and remedies thereunder.
"Subsidiary" means, with respect to any Person, (a) any corporation
of which an aggregate of more than 50% of the outstanding Stock having ordinary
voting power to elect a majority of the board of directors of such corporation
(irrespective of whether, at the time, Stock of any other class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person or one or more Subsidiaries of such
Person, or with respect to which any such Person has the right to vote or
designate the vote of 50% or more of such Stock whether by proxy, agreement,
operation of law or otherwise, and (b) any partnership or limited liability
company in which such Person and/or one or more Subsidiaries of such Person
shall have an interest (whether in the form of voting or participation in
profits or capital contribution) of more than 50% or of which any such Person is
a general partner or may exercise the powers of a general partner. Unless the
context otherwise requires, each reference to a Subsidiary shall be a reference
to a Subsidiary of the Borrower.
"Subsidiary Guaranty" means the Subsidiary Guaranty of even date
herewith executed by Intercontinental in favor of Agent, on behalf of itself and
Lenders.
"Supermajority Revolving Lenders" means Lenders having (a) 80% or
more of the Revolving Loan Commitments of all Lenders, or (b) if the Revolving
Loan Commitments have been terminated, 80% or more of the aggregate outstanding
amount of the Revolving Loan (with the Swing Line Loan being attributed to the
Lender making such Loan) and Letter of Credit Obligations.
"Supporting Obligations" means all "supporting obligations" as such
term is defined in the Code, including letters of credit and guaranties issued
in support of Accounts, Chattel Paper, Documents, General Intangibles,
Instruments, or Investment Property.
"Swing Line Advance" has the meaning ascribed to it in Section
1.1(c)(i).
"Swing Line Availability" has the meaning ascribed to it in Section
1.1(c)(i).
"Swing Line Commitment" means, as to the Swing Line Lender, the
commitment of the Swing Line Lender to make Swing Line Advances as set forth on
Annex J to the
A-25
Agreement, which commitment constitutes a subfacility of the Revolving Loan
Commitment of the Swing Line Lender.
"Swing Line Lender" means GE Capital.
"Swing Line Loan" means at any time, the aggregate amount of Swing
Line Advances outstanding to Borrower.
"Swing Line Note" has the meaning ascribed to it in Section
1.1(c)(ii).
"Taxes" means taxes, levies, imposts, deductions, Charges or
withholdings, and all liabilities with respect thereto, excluding taxes imposed
on or measured by the net income of Agent or a Lender by the jurisdictions under
the laws of which Agent and Lenders are organized or conduct business or any
political subdivision thereof.
"Termination Date" means the date on which (a) the Loans have been
indefeasibly repaid in full, (b) all other Obligations under the Agreement and
the other Loan Documents have been completely discharged, (c) all Letter of
Credit Obligations have been cash collateralized, cancelled or backed by standby
letters of credit in accordance with Annex B, and (d) Borrower shall not have
any further right to borrow any monies under the Agreement.
"Term A Note(s)" has the meaning assigned to it in Section
1.1(b)(i)(A).
"Term B Note(s)" has the meaning assigned to it in Section
1.1(b)(ii)(A).
"Term Lenders" means those Lenders having Term Loan Commitments.
"Term Loan A" has the meaning assigned to it in Section
1.1(b)(i)(A).
"Term Loan B" has the meaning assigned to it in Section
1.1(b)(ii)(A).
"Term Loans" means collectively Term Loan A and Term Loan B.
"Term Loan A Commitment" means (a) as to any Lender with a Term Loan
A Commitment, the commitment of such Lender to make its Pro Rata Share of the
Term Loan A as set forth on Annex J to the Agreement or in the most recent
Assignment Agreement executed by such Lender, and (b) as to all Lenders with a
Term Loan A Commitment, the aggregate commitment of all Lenders to make the Term
Loan A, which aggregate commitment shall be Seventeen Million Dollars
($17,000,000) on the Closing Date. After advancing the Term Loan A, each
reference to a Lender's Term Loan A Commitment shall refer to that Lender's Pro
Rata Share of the outstanding Term Loan A.
"Term Loan B Commitment" means (a) as to any Lender with a Term Loan
B Commitment, the commitment of such Lender to make its Pro Rata Share of the
Term Loan B as set forth on Annex J to the Agreement or in the most recent
Assignment Agreement executed by such Lender, and (b) as to all Lenders with a
Term Loan B Commitment, the aggregate commitment of all Lenders to make the Term
Loan B, which aggregate commitment shall be Five Million Dollars ($5,000,000) on
the Closing Date. After advancing the Term Loan B, each
A-26
reference to a Lender's Term Loan B Commitment shall refer to that Lender's Pro
Rata Share of the outstanding Term Loan B.
"Term Loan Commitments" means, collectively, the Term Loan A
Commitment and the Term Loan B Commitment.
"Term Notes" means, collectively, the Term A Notes and the Term B
Notes.
"Title IV Plan" means a Pension Plan (other than a Multiemployer
Plan), that is covered by Title IV of ERISA, and that any Credit Party or ERISA
Affiliate maintains, contributes to or has an obligation to contribute to on
behalf of participants who are or were employed by any of them.
"Trademark Security Agreements" means the Trademark Security
Agreements made in favor of Agent, on behalf of Lenders, by each applicable
Credit Party.
"Trademark License" means rights under any written agreement now
owned or hereafter acquired by any Credit Party granting any right to use any
Trademark.
"Trademarks" means all of the following now owned or hereafter
adopted or acquired by any Credit Party: (a) all trademarks, trade names,
corporate names, business names, trade styles, service marks, logos, other
source or business identifiers, prints and labels on which any of the foregoing
have appeared or appear, designs and general intangibles of like nature (whether
registered or unregistered), all registrations and recordings thereof, and all
applications in connection therewith, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any state or territory thereof, or any
other country or any political subdivision thereof; (b) all reissues, extensions
or renewals thereof; and (c) all goodwill associated with or symbolized by any
of the foregoing.
"Unfunded Capital Expenditures" means Capital Expenditures other
than Capital Expenditures that are specifically financed by lenders other than
the Lenders hereunder within 60 days of the date such amount became a Capital
Expenditure.
"Unfunded Pension Liability" means, at any time, the aggregate
amount, if any, of the sum of (a) the amount by which the present value of all
accrued benefits under each Title IV Plan exceeds the fair market value of all
assets of such Title IV Plan allocable to such benefits in accordance with Title
IV of ERISA, all determined as of the most recent valuation date for each such
Title IV Plan using the actuarial assumptions for funding purposes in effect
under such Title IV Plan, and (b) for a period of five (5) years following a
transaction which might reasonably be expected to be covered by Section 4069 of
ERISA, the liabilities (whether or not accrued) that could be avoided by any
Credit Party or any ERISA Affiliate as a result of such transaction.
"Vacant Land Lease" has the meaning ascribed to it in Section 5.9.
"Welfare Plan" means a Plan described in Section 3(i) of ERISA.
A-27
Rules of construction with respect to accounting terms used in the
Agreement or the other Loan Documents shall be as set forth in Annex G. All
other undefined terms contained in any of the Loan Documents shall, unless the
context indicates otherwise, have the meanings provided for by the Code to the
extent the same are used or defined therein; in the event that any term is
defined differently in different Articles or Divisions of the Code, the
definition contained in Article or Division 9 shall control. Unless otherwise
specified, references in the Agreement or any of the Appendices to a Section,
subsection or clause refer to such Section, subsection or clause as contained in
the Agreement. The words "herein," "hereof" and "hereunder" and other words of
similar import refer to the Agreement as a whole, including all Annexes,
Exhibits and Schedules, as the same may from time to time be amended, restated,
modified or supplemented, and not to any particular section, subsection or
clause contained in the Agreement or any such Annex, Exhibit or Schedule.
Wherever from the context it appears appropriate, each term stated
in either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter genders. The words "including", "includes" and
"include" shall be deemed to be followed by the words "without limitation"; the
word "or" is not exclusive; references to Persons include their respective
successors and assigns (to the extent and only to the extent permitted by the
Loan Documents) or, in the case of governmental Persons, Persons succeeding to
the relevant functions of such Persons; and all references to statutes and
related regulations shall include any amendments of the same and any successor
statutes and regulations. Whenever any provision in any Loan Document refers to
the knowledge (or an analogous phrase) of any Credit Party, such words are
intended to signify that such Credit Party has actual knowledge or awareness of
a particular fact or circumstance or that such Credit Party, if it had exercised
reasonable diligence, would have known or been aware of such fact or
circumstance.
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ANNEX B (SECTION 1.2)
TO
CREDIT AGREEMENT
LETTERS OF CREDIT
(a) Issuance. Subject to the terms and conditions of the Agreement,
Agent and Revolving Lenders agree to incur, from time to time prior to the
Commitment Termination Date, upon the request of Borrower and for Borrower's
account, Letter of Credit Obligations by causing Letters of Credit to be issued
by GE Capital or a Subsidiary thereof or a bank or other legally authorized
Person selected by or acceptable to Agent in its sole discretion (each, an "L/C
Issuer") for Borrower's account and guaranteed by Agent; provided, that if the
L/C Issuer is a Revolving Lender, then such Letters of Credit shall not be
guaranteed by Agent but rather each Revolving Lender shall, subject to the terms
and conditions hereinafter set forth, purchase (or be deemed to have purchased)
risk participations in all such Letters of Credit issued with the written
consent of Agent, as more fully described in paragraph (b)(ii) below. The
aggregate amount of all such Letter of Credit Obligations shall not at any time
exceed the least of (i) Ten Million Dollars ($10,000,000) (the "L/C Sublimit"),
and (ii) the Maximum Amount less the aggregate outstanding principal balance of
the Revolving Credit Advances and the Swing Line Loan, and (iii) the Borrowing
Base less the aggregate outstanding principal balance of the Revolving Credit
Advances and the Swing Line Loan. No such Letter of Credit shall have an expiry
date that is more than one year following the date of issuance thereof, unless
otherwise determined by Agent in its sole discretion (including with respect to
customary evergreen provisions), and neither Agent nor Revolving Lenders shall
be under any obligation to incur Letter of Credit Obligations in respect of, or
purchase risk participations in, any Letter of Credit having an expiry date that
is later than the Commitment Termination Date.
(b)(i) Advances Automatic; Participations. In the event that Agent
or any Revolving Lender shall make any payment on or pursuant to any Letter of
Credit Obligation, such payment shall then be deemed automatically to constitute
a Revolving Credit Advance under Section 1.1(a) of the Agreement regardless of
whether a Default or Event of Default has occurred and is continuing and
notwithstanding Borrower's failure to satisfy the conditions precedent set forth
in Section 2, and each Revolving Lender shall be obligated to pay its Pro Rata
Share thereof in accordance with the Agreement. The failure of any Revolving
Lender to make available to Agent for Agent's own account its Pro Rata Share of
any such Revolving Credit Advance or payment by Agent under or in respect of a
Letter of Credit shall not relieve any other Revolving Lender of its obligation
hereunder to make available to Agent its Pro Rata Share thereof, but no
Revolving Lender shall be responsible for the failure of any other Revolving
Lender to make available such other Revolving Lender's Pro Rata Share of any
such payment.
(ii) If it shall be illegal or unlawful for Borrower to incur
Revolving Credit Advances as contemplated by paragraph (b)(i) above because of
an Event of Default described in Sections 8.1(h) or (i) or otherwise or if it
shall be illegal or unlawful for any Revolving Lender to be deemed to have
assumed a ratable share of the reimbursement obligations owed to an L/C Issuer,
or if the L/C Issuer is a Revolving Lender, then (i) immediately and without
further action whatsoever, each Revolving Lender shall be deemed to have
irrevocably and unconditionally purchased from Agent (or such L/C Issuer, as the
case may
B-1
be) an undivided interest and participation equal to such Revolving Lender's
Pro Rata Share (based on the Revolving Loan Commitments) of the Letter of Credit
Obligations in respect of all Letters of Credit then outstanding and (ii)
thereafter, immediately upon issuance of any Letter of Credit, each Revolving
Lender shall be deemed to have irrevocably and unconditionally purchased from
Agent (or such L/C Issuer, as the case may be) an undivided interest and
participation in such Revolving Lender's Pro Rata Share (based on the Revolving
Loan Commitments) of the Letter of Credit Obligations with respect to such
Letter of Credit on the date of such issuance. Each Revolving Lender shall fund
its participation in all payments or disbursements made under the Letters of
Credit in the same manner as provided in the Agreement with respect to Revolving
Credit Advances.
(c) Cash Collateral. (i) If Borrower is required to provide cash
collateral for any Letter of Credit Obligations pursuant to the Agreement,
including Section 8.2 of the Agreement, prior to the Commitment Termination
Date, Borrower will pay to Agent for the ratable benefit of itself and Revolving
Lenders cash or cash equivalents acceptable to Agent ("Cash Equivalents") in an
amount equal to 103% of the maximum amount then available to be drawn under each
applicable Letter of Credit outstanding. Such funds or Cash Equivalents shall be
held by Agent in a cash collateral account (the "Cash Collateral Account")
maintained at a bank or financial institution acceptable to Agent. The Cash
Collateral Account shall be in the name of Borrower and shall be pledged to, and
subject to the control of, Agent, for the benefit of Agent and Lenders, in a
manner satisfactory to Agent. Borrower hereby pledges and grants to Agent, on
behalf of itself and Lenders, a security interest in all such funds and Cash
Equivalents held in the Cash Collateral Account from time to time and all
proceeds thereof, as security for the payment of all amounts due in respect of
the Letter of Credit Obligations and other Obligations, whether or not then due.
The Agreement, including this Annex B, shall constitute a security agreement
under applicable law.
(ii) If any Letter of Credit Obligations, whether or not then due
and payable, shall for any reason be outstanding on the Commitment Termination
Date, Borrower shall either (A) provide cash collateral therefor in the manner
described above, or (B) cause all such Letters of Credit and guaranties thereof,
if any, to be canceled and returned, or (C) deliver a stand-by letter (or
letters) of credit in guarantee of such Letter of Credit Obligations, which
stand-by letter (or letters) of credit shall be of like tenor and duration (plus
thirty (30) additional days) as, and in an amount equal to 103% of the aggregate
maximum amount then available to be drawn under, the Letters of Credit to which
such outstanding Letter of Credit Obligations relate and shall be issued by a
Person, and shall be subject to such terms and conditions, as are be
satisfactory to Agent in its sole discretion.
(iii) From time to time after funds are deposited in the Cash
Collateral Account by Borrower, whether before or after the Commitment
Termination Date, Agent may apply such funds or Cash Equivalents then held in
the Cash Collateral Account to the payment of any amounts, and in such order as
Agent may elect, as shall be or shall become due and payable by Borrower to
Agent and Lenders with respect to such Letter of Credit Obligations of Borrower
and, upon the satisfaction in full of all Letter of Credit Obligations of
Borrower, to any other Obligations then due and payable.
B-2
(iv) Neither Borrower nor any Person claiming on behalf of or
through Borrower shall have any right to withdraw any of the funds or Cash
Equivalents held in the Cash Collateral Account, except that upon the
termination of all Letter of Credit Obligations and the payment of all amounts
payable by Borrower to Agent and Lenders in respect thereof, any funds remaining
in the Cash Collateral Account shall be applied to other Obligations then due
and owing and upon payment in full of such Obligations any remaining amount
shall be paid to Borrower or as otherwise required by law. Interest earned on
deposits in the Cash Collateral Account shall be held as additional collateral.
(d) Fees and Expenses. Borrower agrees to pay to Agent for the
benefit of Revolving Lenders, as compensation to such Lenders for Letter of
Credit Obligations incurred hereunder, (i) all reasonable costs and expenses
incurred by Agent or any Lender on account of such Letter of Credit Obligations,
and (ii) for each month during which any Letter of Credit Obligation shall
remain outstanding, a fee (the "Letter of Credit Fee") in an amount equal to the
Applicable L/C Margin from time to time in effect multiplied by the maximum
amount available from time to time to be drawn under the applicable Letter of
Credit. Such fee shall be paid to Agent for the benefit of the Revolving Lenders
in arrears, on the first day of each month and on the Commitment Termination
Date. In addition, Borrower shall pay to any L/C Issuer, on demand, such fees
(including all per annum fees), charges and expenses of such L/C Issuer in
respect of the issuance, negotiation, acceptance, amendment, transfer and
payment of such Letter of Credit or otherwise payable pursuant to the
application and related documentation under which such Letter of Credit is
issued.
(e) Request for Incurrence of Letter of Credit Obligations. Borrower
shall give Agent at least two (2) Business Days' prior written notice requesting
the incurrence of any Letter of Credit Obligation. The notice shall be
accompanied by the form of the Letter of Credit (which shall be acceptable to
the L/C Issuer) and a completed Application for Standby Letter of Credit
Application for Documentary Letter of Credit, as applicable, in the form Exhibit
B-1 or B-2 attached hereto. Notwithstanding anything contained herein to the
contrary, Letter of Credit applications by Borrower and approvals by Agent and
the L/C Issuer may be made and transmitted pursuant to electronic codes and
security measures mutually agreed upon and established by and among Borrower,
Agent and the L/C Issuer.
(f) Obligation Absolute. The obligation of Borrower to reimburse
Agent and Revolving Lenders for payments made with respect to any Letter of
Credit Obligation shall be absolute, unconditional and irrevocable, without
necessity of presentment, demand, protest or other formalities, and the
obligations of each Revolving Lender to make payments to Agent with respect to
Letters of Credit shall be unconditional and irrevocable. Such obligations of
Borrower and Revolving Lenders shall be paid strictly in accordance with the
terms hereof under all circumstances including the following:
(i) any lack of validity or enforceability of any Letter of Credit
or the Agreement or the other Loan Documents or any other agreement;
(ii) the existence of any claim, setoff, defense or other right that
Borrower or any of its Affiliates or any Lender may at any time have
against a beneficiary or any transferee of any Letter of Credit (or any
Persons or entities for whom any such
B-3
transferee may be acting), Agent, any Lender, or any other Person, whether
in connection with the Agreement, the Letter of Credit, the transactions
contemplated herein or therein or any unrelated transaction (including any
underlying transaction between Borrower or any of its Affiliates and the
beneficiary for which the Letter of Credit was procured);
(iii) any draft, demand, certificate or any other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) payment by Agent (except as otherwise expressly provided in
paragraph (g)(ii)(C) below) or any L/C Issuer under any Letter of Credit
or guaranty thereof against presentation of a demand, draft or certificate
or other document that does not comply with the terms of such Letter of
Credit or such guaranty;
(v) any other circumstance or event whatsoever, that is similar to
any of the foregoing; or
(vi) the fact that a Default or an Event of Default has occurred and
is continuing.
(g) Indemnification; Nature of Lenders' Duties.
(i) In addition to amounts payable as elsewhere provided in the
Agreement, Borrower hereby agrees to pay and to protect, indemnify, and save
harmless Agent and each Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
attorneys' fees and allocated costs of internal counsel) that Agent or any
Lender may incur or be subject to as a consequence, direct or indirect, of (A)
the issuance of any Letter of Credit or guaranty thereof, or (B) the failure of
Agent or any Lender seeking indemnification or of any L/C Issuer to honor a
demand for payment under any Letter of Credit or guaranty thereof as a result of
any act or omission, whether rightful or wrongful, of any present or future de
jure or de facto government or Governmental Authority, in each case other than
to the extent as a result of the gross negligence or willful misconduct of Agent
or such Lender (as finally determined by a court of competent jurisdiction).
(ii) As between Agent and any Lender and Borrower, Borrower assumes
all risks of the acts and omissions of, or misuse of any Letter of Credit by
beneficiaries of any Letter of Credit. In furtherance and not in limitation of
the foregoing, to the fullest extent permitted by law neither Agent nor any
Lender shall be responsible for: (A) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document issued by any party in connection
with the application for and issuance of any Letter of Credit, even if it should
in fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (B) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, that may prove to be invalid or ineffective for any reason; (C) failure of
the beneficiary of any Letter of Credit to comply fully with conditions required
in order to demand payment under such Letter of Credit; provided, that in the
case of any payment by Agent under any Letter of Credit or guaranty thereof,
Agent shall be liable to the extent such payment was made solely as a result of
its gross
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negligence or willful misconduct (as finally determined by a court of
competent jurisdiction) in determining that the demand for payment under such
Letter of Credit or guaranty thereof complies on its face with any applicable
requirements for a demand for payment under such Letter of Credit or guaranty
thereof; (D) errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether
or not they may be in cipher; (E) errors in interpretation of technical terms;
(F) any loss or delay in the transmission or otherwise of any document required
in order to make a payment under any Letter of Credit or guaranty thereof or of
the proceeds thereof; (G) the credit of the proceeds of any drawing under any
Letter of Credit or guaranty thereof; and (H) any consequences arising from
causes beyond the control of Agent or any Lender. None of the above shall
affect, impair, or prevent the vesting of any of Agent's or any Lender's rights
or powers hereunder or under the Agreement.
(iii) Nothing contained herein shall be deemed to limit or to expand
any waivers, covenants or indemnities made by Borrower in favor of any L/C
Issuer in any letter of credit application, reimbursement agreement or similar
document, instrument or agreement between Borrower and such L/C Issuer,
including a Master Documentary Agreement and a Master Standby Agreement entered
into with L/C Issuer.
B-5
ANNEX C (SECTION 1.8)
TO
CREDIT AGREEMENT
CASH MANAGEMENT SYSTEM
Borrower and Holdings shall, and shall cause their Subsidiaries to,
establish and maintain the Cash Management Systems described below:
(a) On or before the Closing Date and until the Termination Date,
Borrower and Holdings shall (i) establish lock boxes ("Lock Boxes") or, at
Agent's discretion, blocked accounts ("Blocked Accounts") at one or more of the
banks set forth in Disclosure Schedule (3.19), and shall request in writing and
otherwise take such reasonable steps to ensure that all Account Debtors forward
payment directly to such Lock Boxes, and (ii) deposit and cause its Subsidiaries
to 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 cash, checks, drafts
or other similar items of payment relating to or constituting payments made in
respect of any and all Collateral (whether or not otherwise delivered to a Lock
Box) into one or more Blocked Accounts in Borrower's name or any such
Subsidiary's name and at a bank identified in Disclosure Schedule (3.19) (each,
a "Relationship Bank"). On or before the Closing Date, Borrower shall have
established a concentration account in its name (the "Concentration Account") at
the bank that shall be designated as the Concentration Account bank for Borrower
in Disclosure Schedule (3.19) (the "Concentration Account Bank") which bank
shall be reasonably satisfactory to Agent.
(b) Borrower may maintain, in its name, an account (each a
"Disbursement Account" and collectively, the "Disbursement Accounts") at a bank
acceptable to Agent into which Agent shall, from time to time, deposit proceeds
of Revolving Credit Advances and Swing Line Advances made to Borrower pursuant
to Section 1.1 for use by Borrower in accordance with the provisions of Section
1.4.
(c) On or before the Closing Date (or such later date as Agent shall
consent to in writing), the Concentration Account Bank, each bank where a
Disbursement Account is maintained and all other Relationship Banks, shall have
entered into tri-party blocked account agreements with Agent, for the benefit of
itself and Lenders, and Borrower, Holdings and Subsidiaries thereof, as
applicable, in form and substance reasonably acceptable to Agent, which shall
become operative on or prior to the Closing Date. Each such blocked account
agreement shall provide, among other things, that (i) all items of payment
deposited in such account and proceeds thereof deposited in the Concentration
Account are held by such bank as agent or bailee-in-possession for Agent, on
behalf of itself and Lenders, (ii) the bank executing such agreement has no
rights of setoff or recoupment or any other claim against such account, as the
case may be, other than for payment of its service fees and other charges
directly related to the administration of such account and for returned checks
or other items of payment, and (iii) from and after the Closing Date (A) with
respect to banks at which a Blocked Account is maintained, such bank agrees to
forward immediately all amounts in each Blocked Account to the Concentration
Account Bank and to commence the process of daily sweeps from such Blocked
Account into the Concentration Account and (B) with respect to the Concentration
Account
C-1
Bank, such bank agrees to immediately forward all amounts received in the
Concentration Account to the Collection Account through daily sweeps from such
Concentration Account into the Collection Account. Borrower shall not, and shall
not cause or permit any Subsidiary thereof to, accumulate or maintain cash in
Disbursement Accounts or payroll accounts as of any date of determination in
excess of checks outstanding against such accounts as of that date and amounts
necessary to meet minimum balance requirements.
(d) So long as no Event of Default has occurred and is continuing,
Borrower may amend Disclosure Schedule (3.19) to add or replace a Relationship
Bank, Lock Box or Blocked Account or to replace any Concentration Account or any
Disbursement Account; provided, that (i) Agent shall have consented in writing
in advance to the opening of such account or Lock Box with the relevant bank and
(ii) prior to the time of the opening of such account or Lock Box, Borrower or
its Subsidiaries, as applicable, and such bank shall have executed and delivered
to Agent a tri-party blocked account agreement, in form and substance reasonably
satisfactory to Agent. Borrower shall close any of its accounts (and establish
replacement accounts in accordance with the foregoing sentence) promptly and in
any event within thirty (30) days following notice from Agent that the
creditworthiness of any bank holding an account is no longer acceptable in
Agent's reasonable judgment, or as promptly as practicable and in any event
within one hundred and twenty (120) days following notice from Agent that the
operating performance, funds transfer or availability procedures or performance
with respect to accounts or Lock Boxes of the bank holding such accounts or
Agent's liability under any tri-party blocked account agreement with such bank
is no longer acceptable in Agent's reasonable judgment.
(e) The Lock Boxes, Blocked Accounts, Disbursement Accounts and the
Concentration Account shall be cash collateral accounts, with all cash, checks
and other similar items of payment in such accounts securing payment of the
Loans and all other Obligations, and in which Borrower and each Subsidiary
thereof shall have granted a Lien to Agent, on behalf of itself and Lenders,
pursuant to the Security Agreement.
(f) All amounts deposited in the Collection Account shall be deemed
received by Agent in accordance with Section 1.10 and shall be applied (and
allocated) by Agent in accordance with Section 1.11. In no event shall any
amount be so applied unless and until such amount shall have been credited in
immediately available funds to the Collection Account.
(g) Borrower shall and shall cause its Affiliates, officers,
employees, agents, directors or other Persons acting for or in concert with
Borrower (each a "Related Person") to (i) hold in trust for Agent, for the
benefit of itself and Lenders, all checks, cash and other items of payment
received by Borrower or any such Related Person, and (ii) within one (1)
Business Day after receipt by Borrower or any such Related Person of any checks,
cash or other items of payment, deposit the same into a Blocked Account.
Borrower on behalf of itself and each Related Person acknowledges and agrees
that all cash, checks or other items of payment constituting proceeds of
Collateral are part of the Collateral. All proceeds of the sale or other
disposition of any Collateral, shall be deposited directly into Blocked
Accounts.
Any provision of this Annex C to the contrary notwithstanding,
Credit Parties may maintain (A) disbursement or xxxxx cash accounts with local
banks that are not a part of the
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Cash Management Systems described in this Annex C (including account #0000-000-0
maintained at Citizens Bank; account #00000000 maintained at Citizen Bank of
Xxxxxxx; account #0 002 9306 5447 maintained at U.S. Bank; account
#2078281047935 maintained at Wachovia National Bank, N.A.; and account
#5139126825 maintained at BB&T), so long as the balance on deposit in each such
accounts does not exceed $5000 at any time (net of checks written but not yet
cleared against the balance on deposit in such accounts) and the aggregate
balance on deposit in all such accounts does not exceed $25,000 at any time (net
of checks written but not yet cleared against the balance on deposit in such
accounts); (B) account #2020000363204 of Holdings maintained at Wachovia
National Bank, N.A. so long as (i) the balance on deposit in such accounts does
not exceed $1,100,000 in the aggregate at any time, (ii) the disbursements of
funds from such account are used solely to satisfy Holdings' Voluntary Employee
Beneficiary Association ("VEBA") obligations and (ii) funds are deposited in
such account no earlier than 120 days prior the distribution of funds from such
account to satisfy Holdings' VEBA obligations and (C) account #2079900011199 of
Borrower maintained at Wachovia National Bank, N.A. so long as (i) the balance
on deposit in such accounts does not exceed $50,000 in the aggregate at any
time, (ii) the disbursements of funds from such account are used solely to
satisfy Borrower's payroll obligations and (iii) funds are deposited in such
account no earlier than 2 days prior the distribution of funds from such account
to satisfy Borrower's payroll obligations.
C-3
ANNEX D (SECTION 2.1(a))
TO
CREDIT AGREEMENT
CLOSING CHECKLIST
In addition to, and not in limitation of, the conditions described
in Section 2.1 of the Agreement, pursuant to Section 2.1(a), the following items
must be received by Agent in form and substance satisfactory to Agent on or
prior to the Closing Date (each capitalized term used but not otherwise defined
herein shall have the meaning ascribed thereto in Annex A to the Agreement):
A. Appendices. All Appendices to the Agreement, in form and
substance satisfactory to Agent.
B. Revolving Notes, Swing Line Note and Term Notes. Duly executed
originals of the Revolving Notes, Swing Line Note and Term Notes for each
applicable Lender, dated the Closing Date.
C. Security Agreement. Duly executed originals of the Security
Agreement, dated the Closing Date, and all instruments, documents and agreements
executed pursuant thereto.
D. Insurance. Satisfactory evidence that the insurance policies
required by Section 5.4 are in full force and effect, together with appropriate
evidence showing loss payable and/or additional insured clauses or endorsements,
as reasonably requested by Agent, in favor of Agent, on behalf of Lenders.
E. Security Interests and Code Filings. (a) Evidence satisfactory to
Agent that Agent (for the benefit of itself and Lenders) has a valid and
perfected first priority security interest in the Collateral, including (i) such
documents duly executed by each Credit Party (including financing statements
under the Code and other applicable documents under the laws of any jurisdiction
with respect to the perfection of Liens) as Agent may request in order to
perfect its security interests in the Collateral and (ii) copies of Code search
reports listing all effective financing statements that name any Credit Party as
debtor, together with copies of such financing statements, none of which shall
cover the Collateral, except for those relating to the Prior Lender Obligations
(all of which shall be terminated on the Closing Date) and Permitted
Encumbrances.
(b) Evidence reasonably satisfactory to Agent, including copies, of
all UCC-1 and other financing statements filed in favor of any Credit Party with
respect to each location, if any, at which Inventory may be consigned.
(c) Control Letters from (i) all issuers of uncertificated
securities and financial assets held by Borrower, (ii) all securities
intermediaries with respect to all securities accounts and securities
entitlements of Borrower, and (iii) all futures commission agents and clearing
houses with respect to all commodities contracts and commodities accounts held
by Borrower.
D-1
F. Payoff Letter; Termination Statements. Copies of a duly executed
payoff letter, in form and substance reasonably satisfactory to Agent, by and
between all parties to the Prior Lender loan documents evidencing repayment in
full of all Prior Lender Obligations, together with (a) UCC-3 or other
appropriate termination statements, in form and substance satisfactory to Agent,
manually signed by the Prior Lender releasing all liens of Prior Lender upon any
of the personal property of each Credit Party, and (b) termination of all
blocked account agreements, bank agency agreements or other similar agreements
or arrangements or arrangements in favor of Prior Lender or relating to the
Prior Lender Obligations.
G. Intellectual Property Security Agreements. Duly executed
originals of Trademark Security Agreements, Copyright Security Agreements and
Patent Security Agreements, each dated the Closing Date and signed by each
Credit Party which owns Trademarks, Copyrights and/or Patents, as applicable,
all in form and substance reasonably satisfactory to Agent, together with all
instruments, documents and agreements executed pursuant thereto.
H. Guaranties. Duly executed originals of the Holdings Guaranty,
dated the Closing Date, and all documents, instruments and agreements executed
pursuant thereto, and the Subsidiary Guaranty executed by Intercontinental in
favor of Agent, for the benefit of Lenders.
I. Keyman Life Insurance. Agent shall have received evidence that
the Keyman Life Insurance is in effect.
J. Initial Borrowing Base Certificate. Duly executed originals of an
initial Borrowing Base Certificate from Borrower, dated the Closing Date,
reflecting information concerning Eligible Accounts and Eligible Inventory of
Borrower as of a date not more than ten (10) days prior to the Closing Date.
K. Initial Notice of Revolving Credit Advance. Duly executed
originals of a Notice of Revolving Credit Advance, dated the Closing Date, with
respect to the initial Revolving Credit Advance to be requested by Borrower on
the Closing Date.
L. Letter of Direction. Duly executed originals of a letter of
direction from Borrower addressed to Agent, on behalf of itself and Lenders,
with respect to the disbursement on the Closing Date of the proceeds of the Term
Loans and the initial Revolving Credit Advance.
M. Cash Management System; Blocked Account Agreements. Evidence
satisfactory to Agent that, as of the Closing Date, Cash Management Systems
complying with Annex C to the Agreement have been established and are currently
being maintained in the manner set forth in such Annex C, together with copies
of duly executed tri-party blocked account and lock box agreements, reasonably
satisfactory to Agent, with the banks as required by Annex C.
N. Charter and Good Standing. For each Credit Party, such Person's
(a) charter and all amendments thereto, (b) good standing certificates
(including verification of tax status) in its state of incorporation and (c)
good standing certificates (including verification of tax status) and
certificates of qualification to conduct business in each jurisdiction where its
ownership or lease of property or the conduct of its business requires such
qualification, each
D-2
dated a recent date prior to the Closing Date and certified by the applicable
Secretary of State or other authorized Governmental Authority.
O. Bylaws and Resolutions. For each Credit Party, (a) such Person's
bylaws, together with all amendments thereto and (b) resolutions of such
Person's Board of Directors, approving and authorizing the execution, delivery
and performance of the Loan Documents to which such Person is a party and the
transactions to be consummated in connection therewith, each certified as of the
Closing Date by such Person's corporate secretary or an assistant secretary as
being in full force and effect without any modification or amendment.
P. Incumbency Certificates. For each Credit Party, signature and
incumbency certificates of the officers of each such Person executing any of the
Loan Documents, certified as of the Closing Date by such Person's corporate
secretary or an assistant secretary as being true, accurate, correct and
complete.
Q. Opinions of Counsel. Duly executed originals of opinions of
Xxxxxxx Xxxxxx & Xxxxxx, P.A., counsel for the Credit Parties, together with any
local counsel opinions reasonably requested by Agent, each in form and substance
reasonably satisfactory to Agent and its counsel, dated the Closing Date, and
each accompanied by a letter addressed to such counsel from the Credit Parties,
authorizing and directing such counsel to address its opinion to Agent, on
behalf of Lenders, and to include in such opinion an express statement to the
effect that Agent and Lenders are authorized to rely on such opinion.
R. Pledge Agreements. Duly executed originals of each of the Pledge
Agreements accompanied by (as applicable) (a) share certificates representing
all of the outstanding Stock being pledged pursuant to such Pledge Agreement and
stock powers for such share certificates executed in blank and (b) the original
Intercompany Notes and other instruments evidencing Indebtedness being pledged
pursuant to such Pledge Agreement, duly endorsed in blank.
S. Accountants' Letter. A letter from the Credit Parties to their
independent auditors authorizing the independent certified public accountants of
the Credit Parties to communicate with Agent and Lenders in accordance with
Section 4.2.
T. Appointment of Agent for Service. An appointment of CT
Corporation as each Credit Party's agent for service of process.
U. Fee Letter. Duly executed originals of the GE Capital Fee Letter.
V. Officer's Certificate. Agent shall have received duly executed
originals of a certificate of the Chief Executive Officer and Chief Financial
Officer of Borrower, dated the Closing Date, stating that, since March 27, 2004
(a) no event or condition has occurred or is existing which could reasonably be
expected to have a Material Adverse Effect; (b) there has been no material
adverse change in the industry in which Borrower operates; (c) no Litigation has
been commenced which, if successful, would have a Material Adverse Effect or
could challenge any of the transactions contemplated by the Agreement and the
other Loan Documents; (d) there have been no Restricted Payments made by any
Credit Party; and (e) before and after giving effect to the transactions
contemplated by the Credit Agreement, each
D-3
Credit Party will be Solvent, and (f) there has been no material increase in
liabilities, liquidated or contingent, and no material decrease in assets of
Borrower or any of its Subsidiaries.
W. Waivers. Agent, on behalf of Lenders, shall have received
landlord waivers and consents, bailee letters and mortgagee agreements in form
and substance satisfactory to Agent, in each case as required pursuant to
Section 5.9.
X. Mortgages. Mortgages covering all of the Real Estate (the
"Mortgaged Properties") together with: (a) title insurance policies, current
as-built surveys, zoning letters and certificates of occupancy, in each case
reasonably satisfactory in form and substance to Agent, in its sole discretion;
(b) evidence that counterparts of the Mortgages have been recorded in all places
to the extent necessary or desirable, in the judgment of Agent, to create a
valid and enforceable first priority lien (subject to Permitted Encumbrances) on
each Mortgaged Property in favor of Agent for the benefit of itself and Lenders
(or in favor of such other trustee as may be required or desired under local
law); and (c) an opinion of counsel in each state in which any Mortgaged
Property is located in form and substance and from counsel reasonably
satisfactory to Agent.
Y. Intercreditor Agreements. Agent and Lenders shall have received
any and all other subordination and/or intercreditor agreements, all in form and
substance reasonably satisfactory to Agent, in its sole discretion, as Agent
shall have deemed necessary or appropriate with respect to any Indebtedness of
any Credit Party.
Z. Environmental Reports. Agent shall have received Phase I
Environmental Site Assessment Reports, consistent with American Society of
Testing and Materials (ASTM) Standard E 1527-00 (or the current ASTM standard
for Phase I environmental site assessment reports), and applicable state
requirements, on all of the Real Estate, dated no more than 6 months prior to
the Closing Date, prepared by environmental engineers reasonably satisfactory to
Agent, all in form and substance reasonably satisfactory to Agent, in its sole
discretion; and Agent shall have further received such environmental review and
audit reports, including Phase II reports, with respect to the Real Estate of
any Credit Party as Agent shall have requested, and Agent shall be satisfied, in
its sole discretion, with the contents of all such environmental reports. Agent
shall have received letters executed by the environmental firms preparing such
environmental reports, in form and substance reasonably satisfactory to Agent,
authorizing Agent and Lenders to rely on such reports.
AA. Appraisals. Agent shall have received appraisals as to all
Equipment, all Inventory and as to each Mortgaged Properties, each of which
shall be in form and substance reasonably satisfactory to Agent.
BB. Audited Financials; Financial Condition. Agent shall have
received the Financial Statements, Projections and other materials set forth in
Section 3.4, certified by Borrower's Chief Financial Officer, in each case in
form and substance satisfactory to Agent, and Agent shall be satisfied, in its
sole discretion, with all of the foregoing. Agent shall have further received a
certificate of the Chief Executive Officer and/or the Chief Financial Officer of
Borrower, based on such Pro Forma and Projections, to the effect that (a)
Borrower will be Solvent upon the consummation of the transactions contemplated
herein; (b) the Pro Forma fairly
D-4
presents the financial condition of Borrower as of the date thereof after giving
effect to the transactions contemplated by the Loan Documents; (c) the
Projections are based upon estimates and assumptions stated therein, all of
which Borrower believes to be reasonable and fair in light of current conditions
and current facts known to Borrower and, as of the Closing Date, reflect
Borrower's good faith and reasonable estimates of its future financial
performance and of the other information projected therein for the period set
forth therein; and (d) containing such other statements with respect to the
solvency of Borrower and matters related thereto as Agent shall request.
CC. Master Standby Agreement. A Master Agreement for Standby Letters
of Credit between Borrower and GE Capital.
DD. Master Documentary Agreement. A Master Agreement for Documentary
Letters of Credit between Borrower and GE Capital.
EE. Other Documents. Such other certificates, documents and
agreements respecting any Credit Party as Agent may reasonably request.
D-5
ANNEX E (SECTION 4.1(a)
TO
CREDIT AGREEMENT
FINANCIAL STATEMENTS AND PROJECTIONS -- REPORTING
Borrower shall deliver or cause to be delivered to Agent or to Agent
and Lenders, as indicated, the following:
(a) Monthly Financials. To Agent and Lenders, within thirty (30)
days after the end of each Fiscal Month (including the Fiscal Month of September
of each Fiscal Year), financial information regarding Holdings and its
Subsidiaries, certified by the Chief Financial Officer of Borrower, consisting
of (i) unaudited consolidating balance sheets as of the close of such Fiscal
Month and the related consolidated statements of income and cash flows for that
portion of the Fiscal Year ending as of the close of such Fiscal Month; (ii)
unaudited consolidated statements of income and cash flows for such Fiscal
Month, setting forth in comparative form the figures for the corresponding
period in the prior year and the figures contained in the Projections for such
Fiscal Year, all prepared in accordance with GAAP (subject to normal year-end
adjustments and year-end audit adjustments); and (iii) a summary of the
outstanding balance of all intercompany balances as evidenced by Intercompany
Notes as of the last day of that Fiscal Month. Such financial information shall
be accompanied by the certification of the Chief Financial Officer of Borrower
that (i) such financial information presents fairly in accordance with GAAP
(subject to normal year-end adjustments and year-end audit adjustments) the
financial position and results of operations of Holdings and its Subsidiaries,
on a consolidated basis, in each case as at the end of such Fiscal Month and for
that portion of the Fiscal Year then ended and (ii) any other information
presented is true, correct and complete in all material respects and that there
was no Default or Event of Default in existence as of such time or, if a Default
or Event of Default shall have occurred and be continuing, describing the nature
thereof and all efforts undertaken to cure such Default or Event of Default.
(b) Quarterly Financials. To Agent and Lenders, within forty-five
(45) days after the end of each Fiscal Quarter (including the last Fiscal
Quarter of each Fiscal Year), consolidated financial information regarding
Holdings and its Subsidiaries, certified by the Chief Financial Officer of
Borrower, including consolidated (i) unaudited balance sheets as of the close of
such Fiscal Quarter and the related statements of income and cash flow for that
portion of the Fiscal Year ending as of the close of such Fiscal Quarter and
(ii) unaudited statements of income and cash flows for such Fiscal Quarter, in
each case setting forth in comparative form the figures for the corresponding
period in the prior year and the figures contained in the Projections for such
Fiscal Year, all prepared in accordance with GAAP (subject to normal year-end
adjustments and year-end audit adjustments). Such financial information shall be
accompanied by (A) a statement in reasonable detail (each, a "Compliance
Certificate") showing the calculations used in determining compliance with each
of the Financial Covenants that is tested on a quarterly basis and (B) the
certification of the Chief Financial Officer of Borrower that (i) such financial
information presents fairly in accordance with GAAP (subject to normal year-end
adjustments and year-end audit adjustments) the financial position, results of
operations and statements of cash flows of Holdings and its Subsidiaries, on a
consolidated basis, as at the end of such Fiscal Quarter and for that portion of
the Fiscal Year then ended, (ii) any other information presented is
E-1
true, correct and complete in all material respects and that there was no
Default or Event of Default in existence as of such time or, if a Default or
Event of Default has occurred and is continuing, describing the nature thereof
and all efforts undertaken to cure such Default or Event of Default. In
addition, Borrower shall deliver to Agent and Lenders, within forty-five (45)
days after the end of each Fiscal Quarter, the management discussion and
analysis as provided in the Form 10-Q for such Fiscal Quarter.
(c) Operating Plan. To Agent and Lenders, as soon as available, but
not later than thirty (30) days after the end of each Fiscal Year, an annual
operating plan for Holdings and its Subsidiaries as presented by management to
the Board of Directors of Holdings, for the following Fiscal Year, which (i)
includes a statement of all of the material assumptions on which such plan is
based, (ii) includes monthly consolidated balance sheets and a monthly budget
for the following year and (iii) integrates sales, gross profits, operating
expenses, operating profit, cash flow projections and Borrowing Availability
projections, all prepared on the same basis and in similar detail as that on
which operating results are reported (and in the case of cash flow projections,
representing management's good faith estimates of future financial performance
based on historical performance), and including plans for Capital Expenditures
and facilities.
(d) Annual Audited Financials. To Agent and Lenders, within twenty
(20) days after the Closing Date in respect of the Fiscal Year 2003 and within
ninety (90) days after the end of each Fiscal Year in respect of any other
Fiscal Year, audited Financial Statements for Holdings and its Subsidiaries on a
consolidated basis, consisting of balance sheets and statements of income and
retained earnings and cash flows, setting forth in comparative form in each case
the figures for the previous Fiscal Year, which Financial Statements shall be
prepared in accordance with GAAP and certified without qualification, by an
independent certified public accounting firm of national standing or otherwise
acceptable to Agent. Such Financial Statements shall be accompanied by (i) a
statement prepared in reasonable detail showing the calculations used in
determining compliance with each of the Financial Covenants, (ii) a report from
such accounting firm to the effect that, in connection with their audit
examination, nothing has come to their attention to cause them to believe that a
Default or Event of Default has occurred with respect to the Financial Covenants
(or specifying those Defaults and Events of Default that they became aware of),
it being understood that such audit examination extended only to accounting
matters and that no special investigation was made with respect to the existence
of Defaults or Events of Default, and (iii) the certification of the Chief
Executive Officer or Chief Financial Officer of Borrower that all such Financial
Statements present fairly in accordance with GAAP the financial position,
results of operations and statements of cash flows of Holdings and its
Subsidiaries on a consolidated basis, as at the end of such Fiscal Year and for
the period then ended, and that there was no Default or Event of Default in
existence as of such time or, if a Default or Event of Default has occurred and
is continuing, describing the nature thereof and all efforts undertaken to cure
such Default or Event of Default.
(e) Management Letters. To Agent and Lenders, within five (5)
Business Days after receipt thereof by any Credit Party, copies of all
management letters, exception reports or similar letters or reports received by
such Credit Party from its independent certified public accountants.
E-2
(f) Default Notices. To Agent and Lenders, as soon as practicable,
and in any event within three (3) Business Days after an executive officer of
Borrower has actual knowledge of the existence of any Default, Event of Default
or other event that has had a Material Adverse Effect, telephonic or telecopied
notice specifying the nature of such Default or Event of Default or other event,
including the anticipated effect thereof, which notice, if given telephonically,
shall be promptly confirmed in writing on the next Business Day.
(g) SEC Filings and Press Releases. To Agent and Lenders, promptly
upon their becoming available, copies of: (i) all Financial Statements, reports,
notices and proxy statements made publicly available by any Credit Party to its
security holders; (ii) all regular and periodic reports and all registration
statements and prospectuses, if any, filed by any Credit Party with any
securities exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority; and (iii) all press releases and
other statements made available by any Credit Party to the public concerning
material changes or developments in the business of any such Person.
(h) Subordinated Debt and Equity Notices. To Agent, as soon as
practicable, copies of all material written notices given or received by any
Credit Party with respect to any Subordinated Debt or Stock of such Person, and,
within two (2) Business Days after any Credit Party obtains knowledge of any
matured or unmatured event of default with respect to any Subordinated Debt,
notice of such event of default.
(i) Supplemental Schedules. To Agent, supplemental disclosures, if
any, required by Section 5.6.
(j) Litigation. To Agent in writing, promptly upon learning thereof,
notice of any Litigation commenced or threatened against any Credit Party that
(i) seeks damages in excess of $250,000, (ii) seeks injunctive relief, (iii) is
asserted or instituted against any Plan, its fiduciaries or its assets or
against any Credit Party or ERISA Affiliate in connection with any Plan, (iv)
alleges criminal misconduct by any Credit Party, (v) alleges the violation of
any law regarding, or seeks remedies in connection with, any Environmental
Liabilities; or (vi) involves any product recall.
(k) Insurance Notices. To Agent, disclosure of losses or casualties
required by Section 5.4.
(l) Lease Default Notices. To Agent, (i) within two (2) Business
Days after receipt thereof, copies of any and all default notices received under
or with respect to any leased location or public warehouse where Collateral is
located, (ii) monthly within three (3) Business Days after payment thereof,
evidence of payment of lease or rental payments as to each leased or rented
location for which a landlord or bailee waiver has not been obtained and (iii)
such other notices or documents as Agent may reasonably request.
(m) Lease Amendments. To Agent, within ten (10) Business Days after
receipt thereof, copies of all material amendments to real estate leases.
E-3
(n) Hedging Agreements. To Agent within ten (10) Business Days after
entering into such agreement or amendment, copies of all interest rate,
commodity or currency hedging agreements or amendments thereto.
(o) Material Agreements. To Agent or its counsel, on behalf of
Lenders, complete copies (or accurate summaries) of the following agreements or
documents: supply agreements, purchase agreements and sale agreements not
terminable by such Credit Party within sixty (60) days following written notice
issued by such Credit Party and involving transactions in excess of $500,000 per
annum; leases of Equipment having a remaining term of one year or longer and
requiring aggregate rental and other payments in excess of $500,000 per annum;
licenses and permits held by the Credit Parties, the absence of which could be
reasonably likely to have a Material Adverse Effect; instruments and documents
evidencing any Indebtedness or Guaranteed Indebtedness of such Credit Party in
excess of $500,000 and any Lien granted by such Credit Party with respect
thereto; and instruments and agreements evidencing the issuance of any equity
securities, warrants, rights or options to purchase equity securities of such
Credit Party.
(p) Certain Bank Accounts. To Agent, immediately upon request of
Agent, copies of all bank statements provided to the applicable Credit Parties
relating to each of the bank accounts referenced in the last paragraph of Annex
C and such other information relating to such accounts as shall reasonably be
requested by Agent from time to time.
(q) Other Documents. To Agent and Lenders, such other financial and
other information respecting any Credit Party's business or financial condition
as Agent or any Lender shall, from time to time, reasonably request.
E-4
ANNEX F (SECTION 4.1(b))
TO
CREDIT AGREEMENT
COLLATERAL REPORTS
Borrower shall deliver or cause to be delivered the following:
(a) To Agent, no later than noon (Chicago time) on Thursday of each
week, or more frequently upon Agent's request made at any time that Borrowing
Availability is less than $10,000,000, (together with a copy of all or any part
of the following reports requested by any Lender in writing after the Closing
Date), each of the following reports, each of which shall be prepared by the
Borrower as of the date two (2) days prior to the date of any such request:
(i) a Borrowing Base Certificate with respect to Borrower,
accompanied by such supporting detail and documentation as shall be
requested by Agent in its reasonable discretion;
(ii) with respect to Borrower, a summary of Inventory by location
and type with a supporting perpetual Inventory report, in each case
accompanied by such supporting detail and documentation as shall be
requested by Agent in its reasonable discretion; and
(iii) with respect to Borrower, a monthly trial balance showing
Accounts outstanding aged from invoice date and due date in form
reasonably satisfactory to Agent, accompanied by such supporting detail
and documentation as shall be requested by Agent in its reasonable
discretion.
(b) To Agent, on a weekly basis or at such more frequent intervals
as Agent may request from time to time (together with a copy of all or any part
of such delivery requested by any Lender in writing after the Closing Date),
collateral reports with respect to Borrower, including all additions and
reductions (cash and non-cash) with respect to Accounts of Borrower, in each
case accompanied by such supporting detail and documentation as shall be
requested by Agent in its reasonable discretion each of which shall be prepared
by the applicable Borrower as of the last day of the immediately preceding week
or the date two (2) days prior to the date of any request;
(c) To Agent, at the time of delivery of each of the monthly
Financial Statements delivered pursuant to Annex E:
(i) a reconciliation of the most recent Borrowing Base,
general ledger and monthly trial balance of Borrower to Borrower's general
ledger and monthly Financial Statements delivered pursuant to such Annex
E, in each case accompanied by such supporting detail and documentation as
shall be requested by Agent in its reasonable discretion;
F-1
(ii) a reconciliation of the perpetual inventory by location
to Borrower's most recent Borrowing Base Certificate, general ledger and
monthly Financial Statements delivered pursuant to Annex E, in each case
accompanied by such supporting detail and documentation as shall be
requested by Agent in its reasonable discretion;
(iii) an aging of accounts payable and a reconciliation of
that accounts payable aging to Borrower's general ledger and monthly
Financial Statements delivered pursuant to Annex E, in each case
accompanied by such supporting detail and documentation as shall be
requested by Agent in its reasonable discretion;
(iv) a reconciliation of the outstanding Loans as set forth in
the monthly Loan Account statement provided by Agent to Borrower's general
ledger and monthly Financial Statements delivered pursuant to Annex E, in
each case accompanied by such supporting detail and documentation as shall
be requested by Agent in its reasonable discretion;
(d) To Agent, at the time of delivery of each of the Financial
Statements delivered pursuant to Annex E, (i) a listing of government contracts
of Borrower subject to the Federal Assignment of Claims Act of 1940; and (ii) a
list of any applications for the registration of any Patent, Trademark or
Copyright filed by any Credit Party with the United States Patent and Trademark
Office, the United States Copyright Office or any similar office or agency in
the prior Fiscal Quarter;
(e) Borrower, at its own expense, shall deliver to Agent the results
of each physical verification, if any, that Borrower or any of its Subsidiaries
may in their discretion have made, or caused any other Person to have made on
their behalf, of all or any portion of their Inventory (and, if a Default or an
Event of Default has occurred and be continuing, Borrower shall, upon the
request of Agent, conduct, and deliver the results of, such physical
verifications as Agent may require);
(f) Borrower, at its own expense, shall deliver to Agent such
appraisals of its assets as Agent may request at any time after the occurrence
and during the continuance of a Default or an Event of Default, such appraisals
to be conducted by an appraiser, and in form and substance reasonably
satisfactory to Agent. In the absence of an Event of Default, at Borrower's own
expense, Agent may obtain appraisal reports to be conducted by an appraiser, and
in form and substance reasonably satisfactory to Agent (i) relating to Inventory
and stating the then current Net Orderly Liquidation Value of Inventory, not
more than four (4) times during any twelve (12) month period commencing with the
Closing Date; (ii) relating to Equipment and stating the then current Net
Orderly Liquidation Value and forced liquidation value of Equipment, not more
than once during any twelve (12) month period commencing with the Closing Date
and (iii) relating to Real Estate and stating the then current fair market value
of all or any portion of the Real Estate owned by Credit Parties, not more than
once during any twelve (12) month period commencing with the Closing Date (and,
in each case, Borrower shall cooperate fully with such appraisers, Agent and its
agents in an effort to facilitate and promptly conclude any such appraisal); and
F-2
(g) Such other reports, statements and reconciliations with respect
to the Borrowing Base or Collateral or Obligations of any or all Credit Parties
as Agent shall from time to time request in its reasonable discretion.
F-3
ANNEX G (SECTION 6.10)
TO
CREDIT AGREEMENT
FINANCIAL COVENANTS
Borrower shall not breach or fail to comply with any of the
following financial covenants, each of which shall be calculated in accordance
with GAAP consistently applied:
(a) Maximum Capital Expenditures. Borrower and its Subsidiaries on a
consolidated basis shall not make Capital Expenditures during the following
periods that exceed in the aggregate the amounts set forth opposite each of such
periods:
MAXIMUM CAPITAL EXPENDITURES PER
PERIOD PERIOD
------ --------------------------------
From the Closing Date to and including October $5,000,000
2, 2004
Fiscal Year ending October 1, 2005 $7,000,000
Fiscal Year ending on or about September 30, 2006 $7,000,000
Fiscal Year ending on or about September 29, 2007 $7,000,000
From and including September 30, 2007 and ending $7,000,000
on June 2, 2008
provided, however, that the amount of permitted Capital Expenditures referenced
above will be increased in any period by the positive amount equal to the lesser
of (i)$2,000,000, and (ii) the amount (if any), equal to the difference obtained
by taking the Capital Expenditures limit specified above for the immediately
prior period minus the actual amount of any Capital Expenditures expended during
such prior period.
(b) Minimum Fixed Charge Coverage Ratio. Commencing with the fiscal
Quarter ending on or about October 1, 2004, Holdings and its Subsidiaries shall
have on a consolidated basis at the end of each Fiscal Quarter, a Fixed Charge
Coverage Ratio for the 12-month period then ended (or with respect to the Fiscal
Quarters ending on or before on or before July 2, 2005, the period commencing on
June 1, 2004 and ending on the last day of such Fiscal Quarter) of not less than
1.15 : 1.00.
(c) Minimum EBITDA. Holdings and its Subsidiaries on a consolidated basis
shall have during the period from and including March 28, 2004 and ending on
June 26, 2004, EBITDA of not less than $15,000,000.
G- 1
'
(d) Maximum Leverage Ratio. Holdings and its Subsidiaries on a
consolidated basis shall have, at the end of each Fiscal Quarter set forth
below, a Leverage Ratio as of the last day of such Fiscal Quarter of not more
than the following:
FISCAL QUARTER ENDING ON OR ABOUT LEVERAGE RATIO
----------------------------------------------------- --------------
January 1, 2005 3.25 to 1.00
April 2, 2005 3.25 to 1.00
July 2, 2005 3.25 to 1.00
October 1, 2005 3.25 to 1.00
December 31, 2005 3.25 to 1.00
April 1, 2006 3.25 to 1.00
July 1, 2006 3.25 to 1.00
September 30, 2006 and each Fiscal Quarter 3.00 to 1.00
thereafter
Unless otherwise specifically provided herein, any accounting term used in
the Agreement shall have the meaning customarily given such term in accordance
with GAAP, and all financial computations hereunder shall be computed in
accordance with GAAP consistently applied. That certain items or computations
are explicitly modified by the phrase "in accordance with GAAP" shall in no way
be construed to limit the foregoing. If any "Accounting Changes" (as defined
below) occur and such changes result in a change in the calculation of the
financial covenants, standards or terms used in the Agreement or any other Loan
Document, then Borrower, Agent and Lenders agree to enter into negotiations in
order to amend such provisions of the Agreement so as to equitably reflect such
Accounting Changes with the desired result that the criteria for evaluating
Borrower's and its Subsidiaries' financial condition shall be the same after
such Accounting Changes as if such Accounting Changes had not been made;
provided, however, that the agreement of Requisite Lenders to any required
amendments of such provisions shall be sufficient to bind all Lenders.
"Accounting Changes" means (i) changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants (or successor thereto or any agency with similar functions), (ii)
changes in accounting principles concurred in by Borrower's certified public
accountants; (iii) purchase accounting adjustments under A.P.B. 16 or 17 and
EITF 88-16, and the application of the accounting principles set forth in FASB
109, including the establishment of reserves pursuant thereto and any subsequent
reversal (in whole or in part) of such reserves; and (iv) the reversal of any
reserves established as a result of purchase accounting adjustments. If Agent,
Borrower and Requisite Lenders agree upon the required amendments, then after
appropriate amendments have been executed and the underlying Accounting Change
with respect thereto has been implemented, any reference to GAAP contained in
the Agreement or in any other Loan Document shall, only to the extent of such
Accounting Change, refer to GAAP, consistently applied after giving effect to
the implementation of such Accounting Change. If Agent, Borrower and Requisite
Lenders cannot agree upon the required amendments within thirty (30) days
following the date of implementation of any Accounting Change, then all
Financial Statements delivered and all calculations of financial covenants and
other standards and terms in accordance with the Agreement and the other Loan
Documents shall be prepared, delivered and
G-2
made without regard to the underlying Accounting Change. For purposes of Section
8.1, a breach of a Financial Covenant contained in this Annex G shall be deemed
to have occurred as of any date of determination by Agent or as of the last day
of any specified measurement period, regardless of when the Financial Statements
reflecting such breach are delivered to Agent.
G-3
ANNEX H (SECTION 1.1(d))
TO
CREDIT AGREEMENT
LENDERS' WIRE TRANSFER INFORMATION
Name: General Electric Capital Corporation
Bank: DeutscheBank Trust Company Americas
New York, New York
ABA #: 000000000
Account #: 00000000
Account Name: GECC/CAF Depository
Reference: Insteel CFN5577
H-1
ANNEX I (SECTION 11.10)
TO
CREDIT AGREEMENT
NOTICE ADDRESSES
(A) If to Agent or GE Capital, at General Electric Capital Corporation
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Insteel, Account Manager
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
with copies to:
Xxxxxx & Xxxxxxx
0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
and
General Electric Capital Corporation
000 Xxxxxxx 0
0xx Xxxxx
Xxxxxxx, XX 00000-0000
Attention: Corporate Counsel-Commercial Finance
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
(B) If to Borrower, at
Insteel Wire Products Company
0000 Xxxxx Xxxxx
Xxxxx Xxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
with copies to:
I-1
Insteel Industries, Inc.
0000 Xxxxx Xxxxx
Xxxxx Xxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxx, Vice President - Administration
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
with copies to:
Xxxxxxx Xxxxxx & Xxxxxx, X.X.
Xxx Xxxxxxxx, Xxxxx 0000
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: C. Xxxxxxx Xxxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
I-2
ANNEX J (FROM ANNEX A - COMMITMENTS DEFINITION)
TO
CREDIT AGREEMENT
Lender: General Electric Capital Corporation
Revolving Loan Commitment
(including a Swing Line Commitment
of $5,000,000): $60,000,000
Term Loan A Commitment: $17,000,000
Term Loan B Commitment: $5,000,000
J-1
