Exhibit 10.1
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AMENDED AND RESTATED CREDIT AGREEMENT
BY AND AMONG
TRANSTECHNOLOGY CORPORATION
AS BORROWER,
THE LENDERS THAT ARE SIGNATORIES HERETO
AS THE LENDERS,
XXXXX FARGO FOOTHILL, INC.
AS CO-LEAD ARRANGER AND ADMINISTRATIVE AGENT
AND
AC FINANCE LLC
AS CO-LEAD ARRANGER
DATED AS OF MAY 1, 2006
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AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement"), is
entered into as of May 1, 2006, by and among the lenders identified on the
signature pages hereof (such lenders, together with their respective successors
and permitted assigns, are referred to hereinafter each individually as a
"Lender" and collectively as the "Lenders"), XXXXX FARGO FOOTHILL, INC., a
California corporation, as co-lead arranger and administrative agent for the
Lenders (in such capacity, together with its successors and assigns in such
capacity, "Administrative Agent"), AC FINANCE LLC, as co-lead arranger, and
TRANSTECHNOLOGY CORPORATION, a Delaware corporation ("Borrower").
WITNESSETH
WHEREAS, Borrower, certain lenders, Xxxxx Fargo Foothill, Inc., as the
administrative agent for such lenders, Ableco Finance LLC, a Delaware limited
liability company, as term loan B and term loan C agent (the "Original
Lenders"), are parties to a Credit Agreement dated as of November 10, 2004 (the
"Original Credit Agreement"); and
WHEREAS, Original Term Loan C (as defined below) has been repaid in
full, and the parties hereto desire to amend, restate and modify, but not
extinguish, the Original Credit Agreement in its entirety as hereinafter set
forth;
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1. DEFINITIONS. Capitalized terms used in this Agreement shall have the
meanings specified therefor on Schedule 1.1.
1.2. ACCOUNTING TERMS. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP. When used herein, the term
"financial statements" shall include the notes and schedules thereto. Whenever
the term "Borrower" is used in respect of a financial covenant or a related
definition, it shall be understood to mean Borrower and its Subsidiaries on a
consolidated basis, unless the context clearly requires otherwise. In
calculating compliance with any of the financial covenants (and related
definitions), any amounts taken into account in making such calculations that
were paid, incurred or accrued in violation of any provision of this Agreement
shall be added back or deducted, as applicable, in order to determine compliance
with such covenants.
1.3. CODE. Any terms used in this Agreement that are defined in the Code
shall be construed and defined as set forth in the Code unless otherwise defined
herein; provided, however, that to the extent that the Code is used to define
any term herein and such term is defined differently in different Articles of
the Code, the definition of such term contained in Article 9 of the Code shall
govern.
1.4. CONSTRUCTION. Unless the context of this Agreement or any other Loan
Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the terms "includes"
and "including" are not limiting, and the term "or" has, except where otherwise
indicated, the inclusive meaning represented by the phrase "and/or." The words
"hereof," "herein," "hereby," "hereunder," and similar terms in this Agreement
or any other Loan Document refer to this Agreement or such other Loan Document,
as the case may be, as a whole and not to any particular provision of this
Agreement or such other Loan Document, as the case may be. Section, subsection,
clause, schedule, and exhibit references herein are to this Agreement unless
otherwise specified. Any reference in this Agreement or in any other Loan
Document to any agreement, instrument, or document shall include all
alterations, amendments, changes,
extensions, modifications, renewals, replacements, substitutions, joinders, and
supplements, thereto and thereof, as applicable (subject to any restrictions on
such alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements set forth herein). Any
reference herein or in any other Loan Document to the satisfaction or repayment
in full of the Obligations shall mean the repayment in full in cash (or cash
collateralization in accordance with the terms hereof) of all Obligations other
than unasserted contingent indemnification Obligations and other than any Bank
Product Obligations that, at such time, are allowed by the applicable Bank
Product Provider to remain outstanding and that are not required by the
provisions of this Agreement to be repaid or cash collateralized. Any reference
herein to any Person shall be construed to include such Person's successors and
assigns. Any requirement of a writing contained herein or in any other Loan
Document shall be satisfied by the transmission of a Record and any Record so
transmitted shall constitute a representation and warranty as to the accuracy
and completeness of the information contained therein.
1.5. SCHEDULES AND EXHIBITS. All of the schedules and exhibits attached to
this Agreement shall be deemed incorporated herein by reference.
2. LOAN AND TERMS OF PAYMENT.
2.1. REVOLVER ADVANCES.
(a) Subject to the terms and conditions of this Agreement, and during
the term of this Agreement, each Lender with a Revolver Commitment agrees
(severally, not jointly or jointly and severally) to make advances ("Advances")
to Borrower in an amount at any one time outstanding not to exceed such Lender's
Pro Rata Share of an amount equal to the lesser of (i) the Maximum Revolver
Amount less the Letter of Credit Usage at such time, and (ii) the Borrowing Base
at such time less the Letter of Credit Usage at such time.
(b) Anything to the contrary in this Section 2.1 notwithstanding,
Administrative Agent shall have the right to establish reserves against the
Borrowing Base in such amounts, and with respect to such matters, as
Administrative Agent in its Permitted Discretion shall deem necessary or
appropriate, including reserves (i) with respect to (A) sums that Borrower or
its Subsidiaries are required to pay under any Section of this Agreement or any
other Loan Document (such as taxes, assessments, insurance premiums, or, in the
case of leased assets, rents or other amounts payable under such leases) and has
failed to pay, and (B) amounts owing by Borrower or its Subsidiaries to any
Person to the extent secured by a Lien on, or trust over, any of the Collateral
(other than a Permitted Lien), which Lien or trust, in the Permitted Discretion
of Administrative Agent likely would have a priority superior to the Agent's
Liens (such as Liens or trusts in favor of landlords, warehousemen, carriers,
mechanics, materialmen, laborers, or suppliers, or Liens or trusts for ad
valorem, excise, sales, or other taxes where given priority under applicable
law) in and to such item of the Collateral, and (ii) after the occurrence and
during the continuance of an Event of Default, with respect to such other
matters as Administrative Agent in its Permitted Discretion shall deem necessary
or appropriate. In addition to the foregoing, subject to the limitations set
forth in the Fee Letter, Administrative Agent shall have the right to have
Borrower's Inventory reappraised by a qualified appraisal company selected by
Administrative Agent from time to time after the Closing Date for the purpose of
re-determining the Borrowing Base.
(c) Amounts borrowed pursuant to this Section 2.1 may be repaid and,
subject to the terms and conditions of this Agreement, reborrowed at any time
during the term of this Agreement. The outstanding principal amount of the
Advances, together with interest accrued thereon, shall be due and payable on
the Maturity Date or, if earlier, on the date on which they are declared due and
payable pursuant to the terms of this Agreement.
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(d) In no event shall any Lender be obligated to make any Advances or
extend any credit to Borrower, if after giving effect to any such advances or
extensions of credit, the sum of the Revolver Usage plus the aggregate
outstanding principal amount of the Term Loans would exceed the Facility Limiter
Amount.
2.2. TERM LOANS.
(a) Immediately prior to the Closing Date, the aggregate outstanding
principal amount of the Original Term Loans was $41,424,531.16 (the "Original
Term Loan Outstanding Amount"). Immediately prior to the Closing Date, pursuant
to the Lender Assignment, each Lender shall acquire a percentage of Original
Term Loan made by the Original Lenders under the Original Credit Agreement as so
specified in the Lender Assignment. Subject to the terms and conditions hereof
and in reliance upon the representations and warranties set forth herein, on the
Closing Date, the Original Term Loans shall automatically, and without any
action on the part of any Person, be deemed to be converted into and a part of
the Term Loans and Advances under this Agreement as follows: $20,000,000 shall
be deemed to be converted into and a part of the Term Loan A; and $20,000,000
shall be deemed to be converted into and a part of the Term Loan B; and
$1,424,531.16 shall be deemed to be converted into an Advance hereunder. The
Lenders shall, through the Administrative Agent, make such adjustments among
themselves as shall be necessary so that after giving effect to such assignments
and adjustments each Lender shall hold its Pro Rata Share of the Term Loans and
the outstanding Advances, provided, that, for each Lender, such amount shall not
be greater than each such Lender's Term Loan A Commitment or Term Loan B
Commitment or Revolver Commitment, as the case may be. On or prior to the
Closing Date, the Administrative Agent shall notify each Lender of any
assignments or adjustments that the Administrative Agent deems necessary or
advisable such that, after giving effect to the transactions contemplated to
occur on the Closing Date, each Lender's interest in the Term Loans and the
Advances shall be in accordance with the Commitments set forth opposite its name
on Schedule C-1. All such assignments shall be deemed to occur hereunder
automatically on the Closing Date and without any requirement for additional
documentation, and, in the case of any such assignment, the assigning party
shall represent and warrant to each assignee that it has not created any adverse
claim upon the interest being assigned and that such interest is free and clear
of any adverse claim. Each Lender hereby agrees to give effect to the
instructions of the Administrative Agent to such Lender contained in the notice
described above.
(b) Subject to the terms and conditions of this Agreement, on the
Closing Date, each Lender with a Term Loan A Commitment shall be deemed to have
made (severally, not jointly or jointly and severally) term loans (collectively,
the "Term Loan A") to Borrower in an amount equal to such Lender's Pro Rata
Share of the Term Loan A Amount. The Term Loan A shall be repaid in monthly
installments, each in an amount equal to one-eighty-fourth (1/84th) of the Term
Loan A Amount, plus accrued and unpaid interest on such amounts, such
installments to be due and payable on the first day of each month commencing on
July 1, 2006, and continuing until and including the Maturity Date, on which the
date the unpaid principal balance of Term Loan A would be due and payable in
full. The outstanding unpaid principal balance and all accrued and unpaid
interest on Term Loan A shall be due and payable on the date of termination of
this Agreement, whether by its terms, by prepayment, or by acceleration. All
amounts outstanding under the Term Loan A shall constitute Obligations. Once any
portion of Term Loan A has been paid or prepaid, it may not be reborrowed.
(c) Subject to the terms and conditions of this Agreement, on the
Closing Date, each Lender with a Term Loan B Commitment shall be deemed to have
made (severally, not jointly or jointly and severally) term loans (collectively,
the "Term Loan B" and collectively with the Term Loan A, the "Term Loans") to
Borrower in an amount equal to such Lender's Pro Rata Share of the Term Loan B
Amount. The Term Loan B shall be repaid in quarterly installments, each in an
amount equal to $50,000, plus accrued and unpaid interest on such amount, such
installments to be due and payable on the first day of each fiscal quarter
commencing on January 1, 2007, and continuing until and including the Maturity
Date, on which the date the unpaid principal balance of Term Loan B would be due
and payable in full. Notwithstanding anything to the contrary in this Section
2.2(c), in the event that a Default or Event of Default has occurred and is
continuing at
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the time that a payment of Term Loan B is required pursuant to this Section
2.2(c), or would result therefrom, then (x) no such payment of Term Loan B shall
be made and (y) Administrative Agent shall apply such amounts to the payment of
the Term Loan A. All amounts outstanding under Term Loan B shall constitute
Obligations. Once any portion of Term Loan B has been paid or prepaid, it may
not be reborrowed.
(d) Notwithstanding anything to the contrary contained in this Section
2.2, if Excess Availability would be less than $2,000,000 immediately after
giving effect to any payment that is required to be made in respect of the Term
Loan B pursuant to Section 2.2(c), then such payment shall not be made to the
extent that Excess Availability would be less than $2,000,000 immediately after
giving effect thereto (such shortfall amount, the "Amortization Shortfall");
provided, however, that if, on or after such date, Excess Availability would
exceed $2,000,000 after giving effect to the Amortization Shortfall,
Administrative Agent shall (and is hereby authorized by Borrower to) make one or
more Advances to Borrower in the amount of the Excess Availability Shortfall and
apply such Advances to make a principal payment in respect of Term Loan B.
2.3. BORROWING PROCEDURES AND SETTLEMENTS.
(a) PROCEDURE FOR BORROWING. Each Borrowing shall be made by an
irrevocable written request by an Authorized Person delivered to Administrative
Agent. Unless Swing Lender is not obligated to make a Swing Loan pursuant to
Section 2.3(b) below, such notice must be received by Administrative Agent no
later than 10:00 a.m. (California time) on the Business Day that is the
requested Funding Date specifying (i) the amount of such Borrowing, and (ii) the
requested Funding Date, which shall be a Business Day; provided, however, that
if Swing Lender is not obligated to make a Swing Loan as to a requested
Borrowing, such notice must be received by Administrative Agent no later than
10:00 a.m. (California time) on the Business Day prior to the date that is the
requested Funding Date. At Administrative Agent's election, in lieu of
delivering the above-described written request, any Authorized Person may give
Administrative Agent telephonic notice of such request by the required time. In
such circumstances, Borrower agrees that any such telephonic notice will be
confirmed in writing within 24 hours of the giving of such telephonic notice,
but the failure to provide such written confirmation shall not affect the
validity of the request.
(b) MAKING OF SWING LOANS. In the case of a request for an Advance and
so long as either (i) the aggregate amount of Swing Loans made since the last
Settlement Date plus the amount of the requested Advance does not exceed
$1,000,000 or (ii) Swing Lender, in its sole discretion, shall agree to make a
Swing Loan notwithstanding the foregoing limitation, Swing Lender shall make an
Advance in the amount of such Borrowing (any such Advance made solely by Swing
Lender pursuant to this Section 2.3(b) being referred to as a "Swing Loan" and
such Advances being referred to collectively as "Swing Loans") available to
Borrower on the Funding Date applicable thereto by transferring immediately
available funds to Borrower's Designated Account. Each Swing Loan shall be
deemed to be an Advance hereunder and shall be subject to all the terms and
conditions applicable to other Advances, except that all payments on any Swing
Loan shall be payable to Swing Lender solely for its own account. Subject to the
provisions of Section 2.3(d)(ii), Swing Lender shall not make and shall not be
obligated to make any Swing Loan if Swing Lender has actual knowledge that (i)
one or more of the applicable conditions precedent set forth in Section 3 will
not be satisfied on the requested Funding Date for the applicable Borrowing, or
(ii) the requested Borrowing would exceed the Availability on such Funding Date.
Swing Lender shall not otherwise be required to determine whether the applicable
conditions precedent set forth in Section 3 have been satisfied on the Funding
Date applicable thereto prior to making any Swing Loan. The Swing Loans shall be
secured by the Agent's Liens, constitute Obligations hereunder, and bear
interest at the rate applicable from time to time to Advances that are Base Rate
Loans.
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(c) MAKING OF LOANS.
(i) In the event that Swing Lender is not obligated to make a
Swing Loan, then promptly after receipt of a request for a Borrowing pursuant to
Section 2.3(a), Administrative Agent shall notify the Lenders, not later than
1:00 p.m. (California time) on the Business Day immediately preceding the
Funding Date applicable thereto, by telecopy, telephone, or other similar form
of transmission, of the requested Borrowing. Each Lender shall make the amount
of such Lender's Pro Rata Share of the requested Borrowing available to
Administrative Agent in immediately available funds, to Agent's Account, not
later than 10:00 a.m. (California time) on the Funding Date applicable thereto.
After Administrative Agent's receipt of the proceeds of such Advances (or the
Term Loans, as applicable), Administrative Agent shall make the proceeds thereof
available to Borrower on the applicable Funding Date by transferring immediately
available funds equal to such proceeds received by Administrative Agent to the
Designated Account; provided, however, that subject to the provisions of Section
2.3(d)(ii), Administrative Agent shall not request any Lender to make, and no
Lender shall have the obligation to make, any Advance if Administrative Agent
shall have actual knowledge that (1) one or more of the applicable conditions
precedent set forth in Section 3 will not be satisfied on the requested Funding
Date for the applicable Borrowing unless such condition has been waived, or (2)
the requested Borrowing would exceed the Availability on such Funding Date.
(ii) Unless Administrative Agent receives notice from a Lender
prior to 9:00 a.m. (California time) on the date of a Borrowing, that such
Lender will not make available as and when required hereunder to Administrative
Agent for the account of Borrower the amount of that Lender's Pro Rata Share of
the Borrowing, Administrative Agent may assume that each Lender has made or will
make such amount available to Administrative Agent in immediately available
funds on the Funding Date and Administrative Agent may (but shall not be so
required), in reliance upon such assumption, make available to Borrower on such
date a corresponding amount. If and to the extent any Lender shall not have made
its full amount available to Administrative Agent in immediately available funds
and Administrative Agent in such circumstances has made available to Borrower
such amount, that Lender shall on the Business Day following such Funding Date
make such amount available to Administrative Agent, together with interest at
the Defaulting Lender Rate for each day during such period. A notice submitted
by Administrative Agent to any Lender with respect to amounts owing under this
subsection shall be conclusive, absent manifest error. If such amount is so made
available, such payment to Administrative Agent shall constitute such Lender's
Advance on the date of Borrowing for all purposes of this Agreement. If such
amount is not made available to Administrative Agent on the Business Day
following the Funding Date, Administrative Agent will notify Borrower of such
failure to fund and, upon demand by Administrative Agent, Borrower shall pay
such amount to Administrative Agent for Administrative Agent's account, together
with interest thereon for each day elapsed since the date of such Borrowing, at
a rate per annum equal to the interest rate applicable at the time to the
Advances composing such Borrowing. The failure of any Lender to make any Advance
on any Funding Date shall not relieve any other Lender of any obligation
hereunder to make an Advance on such Funding Date, but no Lender shall be
responsible for the failure of any other Lender to make the Advance to be made
by such other Lender on any Funding Date.
(iii) Administrative Agent shall not be obligated to transfer to
a Defaulting Lender any payments made by Borrower to Administrative Agent for
the Defaulting Lender's benefit, and, in the absence of such transfer to the
Defaulting Lender, Administrative Agent shall transfer any such payments to each
other non-Defaulting Lender member of the Lender Group ratably in accordance
with their Commitments (but only to the extent that such Defaulting Lender's
Advance was funded by the other members of the Lender Group) or, if so directed
by Borrower and if no Default or Event of Default had occurred and is continuing
(and to the extent such Defaulting Lender's Advance was not funded by the Lender
Group), retain same to be re-advanced to Borrower as if such Defaulting Lender
had made Advances to Borrower. Subject to the foregoing, Administrative Agent
may hold and, in its Permitted Discretion, re-lend to Borrower for the account
of such Defaulting Lender the amount of all such payments received and retained
by Administrative Agent for the account of such Defaulting Lender. Solely for
the purposes of voting or consenting to matters
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with respect to the Loan Documents, such Defaulting Lender shall be deemed not
to be a "Lender" and such Lender's Commitment shall be deemed to be zero. This
Section shall remain effective with respect to such Lender until (x) the
Obligations under this Agreement shall have been declared or shall have become
immediately due and payable, (y) the non-Defaulting Lenders, Administrative
Agent, and Borrower shall have waived such Defaulting Lender's default in
writing, or (z) the Defaulting Lender makes its Pro Rata Share of the applicable
Advance and pays to Administrative Agent all amounts owing by Defaulting Lender
in respect thereof. The operation of this Section shall not be construed to
increase or otherwise affect the Commitment of any Lender, to relieve or excuse
the performance by such Defaulting Lender or any other Lender of its duties and
obligations hereunder, or to relieve or excuse the performance by Borrower of
its duties and obligations hereunder to Administrative Agent or to the Lenders
other than such Defaulting Lender. Any such failure to fund by any Defaulting
Lender shall constitute a material breach by such Defaulting Lender of this
Agreement and shall entitle Borrower at its option, upon written notice to
Administrative Agent, to arrange for a substitute Lender to assume the
Commitment of such Defaulting Lender, such substitute Lender to be acceptable to
Administrative Agent. In connection with the arrangement of such a substitute
Lender, the Defaulting Lender shall have no right to refuse to be replaced
hereunder, and agrees to execute and deliver a completed form of Assignment and
Acceptance in favor of the substitute Lender (and agrees that it shall be deemed
to have executed and delivered such document if it fails to do so) subject only
to being repaid its share of the outstanding Obligations (other than Bank
Product Obligations, but including an assumption of its Pro Rata Share of the
Risk Participation Liability) without any premium or penalty of any kind
whatsoever; provided, however, that any such assumption of the Commitment of
such Defaulting Lender shall not be deemed to constitute a waiver of any of the
Lender Groups' or Borrower's rights or remedies against any such Defaulting
Lender arising out of or in relation to such failure to fund.
(d) PROTECTIVE ADVANCES AND OPTIONAL OVERADVANCES.
(i) Administrative Agent hereby is authorized by Borrower and the
Lenders, from time to time in Administrative Agent's sole discretion, (A) after
the occurrence and during the continuance of a Default or an Event of Default,
or (B) at any time that any of the other applicable conditions precedent set
forth in Section 3 are not satisfied, to make Advances to Borrower on behalf of
the Lenders that Administrative Agent, in its Permitted Discretion deems
necessary or desirable (1) to preserve or protect the Collateral, or any portion
thereof, (2) to enhance the likelihood of repayment of the Obligations (other
than the Bank Product Obligations), or (3) to pay any other amount chargeable to
Borrower pursuant to the terms of this Agreement, including Lender Group
Expenses and the costs, fees, and expenses described in Section 9 (any of the
Advances described in this Section 2.3(d)(i) shall be referred to as "Protective
Advances").
(ii) Any contrary provision of this Agreement notwithstanding,
the Lenders hereby authorize Administrative Agent or Swing Lender, as
applicable, and either Administrative Agent or Swing Lender, as applicable, may,
but is not obligated to, knowingly and intentionally, continue to make Advances
(including Swing Loans) to Borrower notwithstanding that an Overadvance exists
or thereby would be created, so long as (A) after giving effect to such
Advances, the outstanding Revolver Usage does not exceed the Borrowing Base by
more than an amount equal to the lesser of (x) 10% of the Borrowing Base then in
effect and (y) $1,000,000, (B) after giving effect to such Advances, the
outstanding Revolver Usage (except for and excluding amounts charged to the Loan
Account for interest, fees, or Lender Group Expenses) does not exceed the
Maximum Revolver Amount, and (C) at the time of making any such Advance,
Administrative Agent does not believe, in good faith, that the Overadvance
created by such Advance will be outstanding for more than 90 days. In the event
Administrative Agent obtains actual knowledge that the Revolver Usage exceeds
the amounts permitted by the immediately foregoing provisions, regardless of the
amount of, or reason for, such excess, Administrative Agent shall notify the
Lenders as soon as practicable (and prior to making any (or any additional)
intentional Overadvances (except for and excluding amounts charged to the Loan
Account for interest, fees, or Lender Group Expenses) unless Administrative
Agent determines that prior notice would result in imminent harm to the
Collateral or its value), and the Lenders with Revolver Commitments thereupon
shall, together with Administrative Agent, jointly determine the terms of
arrangements that shall be
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implemented with Borrower intended to reduce, within a reasonable time, the
outstanding principal amount of the Advances to Borrower to an amount permitted
by the preceding paragraph. In such circumstances, if any Lender with a Revolver
Commitment objects to the proposed terms of reduction or repayment of any
Overadvance, the terms of reduction or repayment thereof shall be implemented
according to the determination of the Required Lenders. Each Lender with a
Revolver Commitment shall be obligated to settle with Administrative Agent as
provided in Section 2.3(e) for the amount of such Lender's Pro Rata Share of any
unintentional Overadvances by Administrative Agent reported to such Lender, any
intentional Overadvances made as permitted under this Section 2.3(d)(ii), and
any Overadvances resulting from the charging to the Loan Account of interest,
fees, or Lender Group Expenses.
(iii) Each Protective Advance and each Overadvance shall be
deemed to be an Advance hereunder, except that no Protective Advance or
Overadvance shall be eligible to be a LIBOR Rate Loan and all payments on the
Protective Advances shall be payable to Administrative Agent solely for its own
account. The Protective Advances and Overadvances shall be repayable on demand,
secured by the Administrative Agent's Liens, constitute Obligations hereunder,
and bear interest at the rate applicable from time to time to Advances that are
Base Rate Loans. The provisions of this Section 2.3(d) are for the exclusive
benefit of Administrative Agent, Swing Lender, and the Lenders and are not
intended to benefit Borrower in any way.
(iv) Notwithstanding anything to the contrary contained in this
Agreement, the aggregate principal amount of Protective Advances and
Overadvances outstanding at any time shall not exceed $1,200,000.
(e) SETTLEMENT. It is agreed that each Lender's funded portion of the
Advances is intended by the Lenders to equal, at all times, such Lender's Pro
Rata Share of the outstanding Advances. Such agreement notwithstanding,
Administrative Agent, Swing Lender, and the other Lenders agree (which agreement
shall not be for the benefit of Borrower) that in order to facilitate the
administration of this Agreement and the other Loan Documents, settlement among
the Lenders as to the Advances, the Swing Loans, and the Protective Advances
shall take place on a periodic basis in accordance with the following
provisions:
(i) Administrative Agent shall request settlement ("Settlement")
with the Lenders on a weekly basis, or on a more frequent basis if so determined
by Administrative Agent, (1) on behalf of Swing Lender, with respect to the
outstanding Swing Loans, (2) for itself, with respect to the outstanding
Protective Advances, and (3) with respect to Borrower's or its Subsidiaries'
Collections received, as to each by notifying the Lenders by telecopy,
telephone, or other similar form of transmission, of such requested Settlement,
no later than 2:00 p.m. (California time) on the Business Day immediately prior
to the date of such requested Settlement (the date of such requested Settlement
being the "Settlement Date"). Such notice of a Settlement Date shall include a
summary statement of the amount of outstanding Advances, Swing Loans, and
Protective Advances for the period since the prior Settlement Date. Subject to
the terms and conditions contained herein (including Section 2.3(c)(iii)): (y)
if a Lender's balance of the Advances (including Swing Loans and Protective
Advances) exceeds such Lender's Pro Rata Share of the Advances (including Swing
Loans and Protective Advances) as of a Settlement Date, then Administrative
Agent shall, by no later than 12:00 p.m. (California time) on the Settlement
Date, transfer in immediately available funds to a Deposit Account of such
Lender (as such Lender may designate), an amount such that each such Lender
shall, upon receipt of such amount, have as of the Settlement Date, its Pro Rata
Share of the Advances (including Swing Loans and Protective Advances), and (z)
if a Lender's balance of the Advances (including Swing Loans and Protective
Advances) is less than such Lender's Pro Rata Share of the Advances (including
Swing Loans and Protective Advances) as of a Settlement Date, such Lender shall
no later than 12:00 p.m. (California time) on the Settlement Date transfer in
immediately available funds to the Agent's Account, an amount such that each
such Lender shall, upon transfer of such amount, have as of the Settlement Date,
its Pro Rata Share of the Advances (including Swing Loans and Protective
Advances). Such amounts made available to Administrative
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Agent under clause (z) of the immediately preceding sentence shall be applied
against the amounts of the applicable Swing Loans or Protective Advances and,
together with the portion of such Swing Loans or Protective Advances
representing Swing Lender's Pro Rata Share thereof, shall constitute Advances of
such Lenders. If any such amount is not made available to Administrative Agent
by any Lender on the Settlement Date applicable thereto to the extent required
by the terms hereof, Administrative Agent shall be entitled to recover for its
account such amount on demand from such Lender together with interest thereon at
the Defaulting Lender Rate.
(ii) In determining whether a Lender's balance of the Advances,
Swing Loans, and Protective Advances is less than, equal to, or greater than
such Lender's Pro Rata Share of the Advances, Swing Loans, and Protective
Advances as of a Settlement Date, Administrative Agent shall, as part of the
relevant Settlement, apply to such balance the portion of payments actually
received in good funds by Administrative Agent with respect to principal,
interest, fees payable by Borrower and allocable to the Lenders hereunder, and
proceeds of Collateral. To the extent that a net amount is owed to any such
Lender after such application, such net amount shall be distributed by
Administrative Agent to that Lender as part of such next Settlement.
(iii) Between Settlement Dates, Administrative Agent, to the
extent no Protective Advances or Swing Loans are outstanding, may pay over to
Swing Lender any payments received by Administrative Agent, that in accordance
with the terms of this Agreement would be applied to the reduction of the
Advances, for application to Swing Lender's Pro Rata Share of the Advances. If,
as of any Settlement Date, Collections of Borrower or its Subsidiaries received
since the then immediately preceding Settlement Date have been applied to Swing
Lender's Pro Rata Share of the Advances other than to Swing Loans, as provided
for in the previous sentence, Swing Lender shall pay to Administrative Agent for
the accounts of the Lenders, and Administrative Agent shall pay to the Lenders,
to be applied to the outstanding Advances of such Lenders, an amount such that
each Lender shall, upon receipt of such amount, have, as of such Settlement
Date, its Pro Rata Share of the Advances. During the period between Settlement
Dates, Swing Lender with respect to Swing Loans, Administrative Agent with
respect to Protective Advances, and each Lender (subject to the effect of any
agreements between Administrative Agent and individual Lenders) with respect to
the Advances other than Swing Loans and Protective Advances, shall be entitled
to interest at the applicable rate or rates payable under this Agreement on the
daily amount of funds employed by Swing Lender, Administrative Agent, or the
Lenders, as applicable.
(f) NOTATION. Administrative Agent shall record on its books the
principal amount of the Advances (or portion of the Term Loans, as applicable)
owing to each Lender, including the Swing Loans owing to Swing Lender, and
Protective Advances owing to Administrative Agent, and the interests therein of
each Lender, from time to time and such records shall, absent manifest error,
conclusively be presumed to be correct and accurate.
(g) LENDERS' FAILURE TO PERFORM. All Advances (other than Swing Loans
and Protective Advances) shall be made by the Lenders contemporaneously and in
accordance with their Pro Rata Shares. It is understood that (i) no Lender shall
be responsible for any failure by any other Lender to perform its obligation to
make any Advance (or other extension of credit) hereunder, nor shall any
Commitment of any Lender be increased or decreased as a result of any failure by
any other Lender to perform its obligations hereunder, and (ii) no failure by
any Lender to perform its obligations hereunder shall excuse any other Lender
from its obligations hereunder.
8
2.4. PAYMENTS.
(a) PAYMENTS BY BORROWER.
(i) Except as otherwise expressly provided herein, all payments
by Borrower shall be made to Agent's Account for the account of the Lender Group
and shall be made in immediately available funds, no later than 11:00 a.m.
(California time) on the date specified herein. Any payment received by
Administrative Agent later than 11:00 a.m. (California time), shall be deemed to
have been received on the following Business Day and any applicable interest or
fee shall continue to accrue until such following Business Day.
(ii) Unless Administrative Agent receives notice from Borrower
prior to the date on which any payment is due to the Lenders that Borrower will
not make such payment in full as and when required, Administrative Agent may
assume that Borrower has made (or will make) such payment in full to
Administrative Agent on such date in immediately available funds and
Administrative Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent Borrower does not make such
payment in full to Administrative Agent on the date when due, each Lender
severally shall repay to Administrative Agent on demand such amount distributed
to such Lender, together with interest thereon at the Defaulting Lender Rate for
each day from the date such amount is distributed to such Lender until the date
repaid.
(b) APPORTIONMENT AND APPLICATION.
(i) So long as no Event of Default has occurred and is continuing
and except as otherwise provided with respect to Defaulting Lenders, all
principal and interest payments shall be apportioned ratably among the Lenders
(according to the unpaid principal balance of the Obligations to which such
payments relate held by each Lender) and all payments of fees and expenses
(other than fees or expenses that are for Administrative Agent's separate
account) shall be apportioned ratably among the Lenders having a Pro Rata Share
of the type of Commitment or Obligation to which a particular fee or expense
relates. All payments to be made hereunder by Borrower shall be remitted to
Administrative Agent and all (subject to Section 2.4(b)(iv) hereof) such
payments, and all proceeds of Collateral received by Administrative Agent, shall
be applied, so long as no Event of Default has occurred and is continuing, to
reduce the balance of the Advances outstanding and, thereafter, to Borrower (to
be wired to the Designated Account) or such other Person entitled thereto under
applicable law.
(ii) At any time that an Event of Default has occurred and is
continuing and except as otherwise provided with respect to Defaulting Lenders,
all payments remitted to Administrative Agent and all proceeds of Collateral
received by Administrative Agent shall be applied as follows:
(A) first, to pay any Lender Group Expenses (including cost
or expense reimbursements) or indemnities then due to Administrative Agent under
the Loan Documents, until paid in full,
(B) second, to pay any fees or premiums then due to
Administrative Agent under the Loan Documents until paid in full,
(C) third, to pay interest due in respect of all Protective
Advances until paid in full,
(D) fourth, to pay the principal of all Protective Advances
until paid in full,
9
(E) fifth, ratably to pay any Lender Group Expenses
(including cost or expense reimbursements) or indemnities then due to any of the
Lenders under the Loan Documents, until paid in full,
(F) sixth, ratably to pay any fees or premiums then due to
any or all of the Lenders (other than the Term Loan Lender),
(G) seventh, ratably to pay interest due in respect of the
Advances (other than Protective Advances), the Swing Loans, and the Term Loan A
until paid in full,
(H) eighth, ratably (i) to pay the principal of all Swing
Loans until paid in full, (ii) to pay the principal of all Advances until paid
in full, (iii) to Administrative Agent, to be held by Administrative Agent, for
the ratable benefit of Issuing Lender and those Lenders having a Revolver
Commitment, as cash collateral in an amount up to 105% of the Letter of Credit
Usage, (iv) to Administrative Agent, to be held by Administrative Agent, for the
benefit of the Bank Product Providers, as cash collateral in an amount up to the
amount of the Bank Product Reserve established prior to the occurrence of, and
not in contemplation of, the subject Event of Default, and (v) to pay the
outstanding principal balance of the Term Loan A (in the inverse order of the
maturity of the installments due thereunder) until the Term Loan is paid in
full,
(I) ninth, to pay fees due in respect of Term Loan B until
paid in full,
(J) tenth, to pay interest due in respect of Term Loan B
until paid in full,
(K) eleventh, to pay the outstanding principal balance of
Term Loan B until paid in full (in the inverse order of maturity of the
installments due thereunder),
(L) twelfth, to pay any other Obligations (including the
provision of amounts to Administrative Agent, to be held by Administrative
Agent, for the benefit of the Bank Product Providers, as cash collateral in an
amount up to the amount determined by Administrative Agent in its Permitted
Discretion as the amount necessary to secure Borrower's and its Subsidiaries'
obligations in respect of Bank Products), and
(M) thirteenth, to Borrower (to be wired to the Designated
Account) or such other Person entitled thereto under applicable law.
(iii) Administrative Agent promptly shall distribute to each
Lender, pursuant to the applicable wire instructions received from each Lender
in writing, such funds as it may be entitled to receive, subject to a Settlement
delay as provided in Section 2.3(e).
(iv) In each instance, so long as no Event of Default has
occurred and is continuing, Section 2.4(b)(i) shall not apply to any payment
made by Borrower to Administrative Agent and specified by Borrower to be for the
payment of specific Obligations then due and payable (or prepayable) under any
provision of this Agreement.
(v) For purposes of Section 2.4(b)(ii), "paid in full" means
payment of all amounts owing under the Loan Documents according to the terms
thereof, including loan fees, service fees, professional fees, interest (and
specifically including interest accrued after the commencement of any Insolvency
Proceeding), default interest, interest on interest, and expense reimbursements,
whether or not any of the foregoing would be or is allowed or disallowed in
whole or in part in any Insolvency Proceeding.
10
(vi) In the event of a direct conflict between the priority
provisions of this Section 2.4 and any other provision contained in any other
Loan Document, it is the intention of the parties hereto that such provisions
shall be read together and construed, to the fullest extent possible, to be in
concert with each other. In the event of any actual, irreconcilable conflict
that cannot be resolved as aforesaid, the terms and provisions of this Section
2.4 shall control and govern.
(c) PREPAYMENTS. All prepayments under this Section shall be made in
accordance with Section 2.4(a).
(i) OPTIONAL PREPAYMENTS. The Term Loans may be voluntarily
prepaid in full or in part at any time; provided, however, that (A) no Event of
Default shall have occurred or be continuing either immediately before or
immediately after such prepayment and (B) Excess Availability is not less than
$2,000,000 immediately after giving effect to such prepayment. Each such
prepayment shall (x) be applied first, to the outstanding principal amount of
the Term Loan A, in the inverse order of maturity, until paid in full, and
second, to the outstanding principal amount of the Term Loan B, in the inverse
order of maturity, until paid in full and (y) be accompanied by the payment of
the interest accrued on the amount prepaid to the date of such prepayment.
(ii) MANDATORY PREPAYMENTS.
(A) Borrower shall immediately prepay the outstanding
principal amount of the Term Loans in the event that the Revolver Commitment is
terminated for any reason.
(B) Subject to Section 5.8(b), upon the receipt by Borrower
or any of its Subsidiaries of any Extraordinary Receipts, Borrower shall
immediately prepay the outstanding principal of the Term Loans and the Advances
in accordance with Section 2.4(d)(i) in an amount equal to 100% of such
Extraordinary Receipts, net of any reasonable expenses incurred in collecting
such Extraordinary Receipts.
(C) Upon the sale or issuance by Borrower or any of its
Subsidiaries of any shares of Stock, Borrower shall prepay the outstanding
principal amount of the Term Loans and the Advances in accordance with Section
2.4(d)(i) in an amount equal to 100% of the Net Cash Proceeds received by such
Person in connection therewith. The provisions of this subsection (C) shall not
be deemed to be implied consent to any issuance, incurrence or sale otherwise
prohibited by the terms and conditions of this Agreement.
(D) Within 10 days of delivery to Administrative Agent and
Lenders of audited annual financial statements pursuant to Section 5.3,
commencing with the delivery to Administrative Agent and Lenders of the
financial statements for the fiscal year ended March 31, 2007 or, if such
financial statements are not delivered to Administrative Agent and Lenders on
the date such statements are required to be delivered pursuant to Section 5.3,
10 days after the date such statements are required to be delivered to
Administrative Agent and Lenders pursuant to Section 5.3, Borrower shall prepay
the outstanding principal amount of the Term Loans and the Advances in
accordance with Section 2.4(d)(ii) in an amount equal to 50% of the Excess Cash
Flow of Borrower and its Subsidiaries for such fiscal year.
(E) If on any date the sum of the Revolver Usage plus the
outstanding aggregate principal amount of Term Loans exceeds the Facility
Limiter Amount, Borrower, shall immediately prepay the outstanding principal
amount of the Term Loans and the Advances in accordance with Section 2.4(d)(iii)
in an amount equal to the amount of such excess.
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(d) APPLICATION OF PAYMENTS.
(i) Each prepayment pursuant to Section 2.4(c)(ii)(B) or Section
2.4(c)(ii)(C) above shall, subject to Section 5.8, be applied (A) so long as no
Default or Event of Default has occurred and is continuing, first, to the
outstanding principal amount of the Term Loan A, until paid in full, second, to
the outstanding principal amount of the Term Loan B, until paid in full, and
third, to the outstanding principal amount of the Advances, and (B) if a Default
or Event of Default shall have occurred and be continuing, in the manner set
forth in Section 2.4(b)(ii). Any prepayment of the Term Loans in accordance with
this clause (i) shall be applied against the remaining installments of principal
thereof in the inverse order of maturity.
(ii) Each prepayment pursuant to Section 2.4(c)(ii)(D) above
shall be applied (A) so long as no Default or Event of Default has occurred and
is continuing, first, to the outstanding principal amount of the Term Loan B,
until the Term Loan B is either prepaid in the amount of the ECF Recapture
Amount or paid in full, whichever occurs first, second, ratably to the
outstanding principal amount of the Term Loans, until paid in full, and third,
to the outstanding principal amount of the Advances, and (B) if a Default or
Event of Default shall have occurred and be continuing, in the manner set forth
in Section 2.4(b)(ii). Any prepayment of Term Loans in accordance with this
clause (ii) shall be applied against the remaining installments of principal
thereof in the first order of maturity.
(iii) Each prepayment pursuant to Section 2.4(c)(ii)(E) above
shall be applied first, to the payment of the Advances until paid in full,
second, to the cash collateralization of the outstanding Letters of Credit in an
amount equal to 105% of the extant Letter of Credit Usage, third, to the
outstanding principal amount of the Term Loan A, until paid in full, and fourth,
to the outstanding principal amount of the Term Loan B, until paid in full. Any
prepayment of the Term Loans in accordance with this clause (iii) shall be
applied against the remaining installments of principal thereof in the first
order of maturity.
(iv) Notwithstanding anything to the contrary contained in this
Section 2.4(d), if Excess Availability would be less than $2,000,000 immediately
after giving effect to any prepayment that is required to be allocated to the
Term Loan B pursuant to Section 2.4(c), then such payment, instead of being
allocated to the Term Loan B, will be applied, first, to outstanding principal
amount of the Advances in the amount necessary to increase Excess Availability
to $2,000,000 (such amount, the "Excess Availability Shortfall") and
Administrative Agent shall establish and maintain a corresponding temporary
reserve against Availability and the Maximum Revolver Amount in an amount equal
to the Excess Availability Shortfall (the "Temporary Reserve"), and second, to
the extent remaining, to the Term Loan B; provided, however, that if, on or
after such date, Excess Availability (calculated without taking into account the
Temporary Reserve) would exceed $2,000,000 (after giving effect to the Excess
Availability Shortfall), Administrative Agent shall (and is hereby authorized by
Borrower to) make one or more Advances to Borrower in the amount of the Excess
Availability Shortfall and apply such Advances to prepay the outstanding
principal amount of the Term Loan B, and each such prepayment shall reduce the
Temporary Reserve by the amount of such prepayment.
(e) INTEREST AND FEES. Any prepayment made pursuant to Section 2.4(c)
shall be accompanied by accrued interest and applicable fees on the principal
amount being prepaid to the date of prepayment.
(f) CUMULATIVE PREPAYMENTS. Except as otherwise expressly provided in
Section 2.4(c), payments with respect to any subsection of Section 2.4(c) are in
addition to payments made or required to be made under any other subsection of
Section 2.4(c).
2.5. OVERADVANCES. If, at any time or for any reason, the amount of
Obligations owed by Borrower to the Lender Group pursuant to Section 2.1 or
Section 2.12 is greater than any of the limitations set forth in Section 2.1 or
Section 2.12, as applicable (an "Overadvance"), Borrower immediately shall pay
to Administrative Agent, in cash, the amount of such excess, which amount shall
be used by Administrative
12
Agent to reduce the Obligations in accordance with the priorities set forth in
Section 2.4(b). Borrower promises to pay the Obligations (including principal,
interest, fees, costs, and expenses) in Dollars in full on the Maturity Date or,
if earlier, on the date on which the Obligations are declared due and payable
pursuant to the terms of this Agreement.
2.6. INTEREST RATES AND LETTER OF CREDIT FEE: RATES, PAYMENTS, AND
CALCULATIONS.
(a) INTEREST RATES. Except as provided in Section 2.6(c) below, all
Obligations (except for undrawn Letters of Credit and except for Bank Product
Obligations) whether or not charged to the Loan Account pursuant to the terms
hereof shall bear interest on the Daily Balance thereof as follows: (i) if the
relevant Obligation is an Advance or a portion of the Term Loan A that is a
LIBOR Rate Loan, at a per annum rate equal to the LIBOR Rate plus the LIBOR Rate
Margin, (ii) if the relevant Obligation is a portion of the Term Loan B that is
a LIBOR Rate Loan, at a per annum rate equal to the LIBOR Rate plus the LIBOR
Rate Term Loan B Margin, (iii) if the relevant Obligation is a portion of the
Term Loan B that is a Base Rate Loan, at a per annum rate equal to the Base Rate
plus the Base Rate Term Loan B Margin, and (vi) otherwise, at a per annum rate
equal to the Base Rate plus the Base Rate Margin.
(b) LETTER OF CREDIT FEE. Borrower shall pay Administrative Agent (for
the ratable benefit of the Lenders with a Revolver Commitment, subject to any
agreements between Administrative Agent and individual Lenders), a Letter of
Credit fee (in addition to the charges, commissions, fees, and costs set forth
in Section 2.12(e)) which shall accrue at a rate equal to 2.00% per annum times
the Daily Balance of the undrawn amount of all outstanding Letters of Credit.
(c) DEFAULT RATE. Upon the occurrence and during the continuation of
an Event of Default (and at the election of Administrative Agent or the Required
Lenders),
(i) all Obligations (except for undrawn Letters of Credit and
except for Bank Product Obligations) that have been charged to the Loan Account
pursuant to the terms hereof shall bear interest on the Daily Balance thereof at
a per annum rate equal to 2.0 percentage points (2.0%) above the per annum rate
otherwise applicable hereunder, and
(ii) the Letter of Credit fee provided for in Section 2.6(b)
shall be increased to 2.0 percentage points (2.0%) above the per annum rate
otherwise applicable hereunder.
(d) PAYMENT. Except as provided to the contrary in Section 2.11 or
Section 2.13(a), interest, Letter of Credit fees, and all other fees payable
hereunder shall be due and payable, in arrears, on the first day of each month
at any time that Obligations or Commitments are outstanding. Borrower hereby
authorizes Administrative Agent, from time to time, without prior notice to
Borrower, to charge all interest and fees (when due and payable), all Lender
Group Expenses (as and when incurred), all charges, commissions, fees, and costs
provided for in Section 2.12(e) (as and when accrued or incurred), all fees and
costs provided for in Section 2.11 (as and when accrued or incurred), and all
other payments as and when due and payable under any Loan Document (including
the amounts due and payable with respect to the Term Loans and including any
amounts due and payable to the Bank Product Providers in respect of Bank
Products up to the amount of the Bank Product Reserve) to the Loan Account,
which amounts thereafter shall constitute Advances hereunder and shall accrue
interest at the rate then applicable to Advances that are Base Rate Loans. Any
interest not paid when due shall be compounded by being charged to the Loan
Account and shall thereafter constitute Advances hereunder and shall accrue
interest at the rate then applicable to Advances that are Base Rate Loans.
(e) COMPUTATION. All interest and fees chargeable under the Loan
Documents shall be computed on the basis of a 360 day year for the actual number
of days elapsed. In the event the Base Rate is
13
changed from time to time hereafter, the rates of interest hereunder based upon
the Base Rate automatically and immediately shall be increased or decreased by
an amount equal to such change in the Base Rate.
(f) INTENT TO LIMIT CHARGES TO MAXIMUM LAWFUL RATE. In no event shall
the interest rate or rates payable under this Agreement, plus any other amounts
paid in connection herewith, exceed the highest rate permissible under any law
that a court of competent jurisdiction shall, in a final determination, deem
applicable. Borrower and the Lender Group, in executing and delivering this
Agreement, intend legally to agree upon the rate or rates of interest and manner
of payment stated within it; provided, however, that anything contained herein
to the contrary notwithstanding, if said rate or rates of interest or manner of
payment exceeds the maximum allowable under applicable law, then, ipso facto, as
of the date of this Agreement, Borrower is and shall be liable only for the
payment of such maximum as allowed by law, and payment received from Borrower in
excess of such legal maximum, whenever received, shall be applied to reduce the
principal balance of the Obligations to the extent of such excess.
2.7. CASH MANAGEMENT.
(a) Borrower shall and shall cause each of its Subsidiaries who hold
Deposit Accounts to (i) establish and maintain cash management services of a
type and on terms satisfactory to Administrative Agent at one or more of the
banks set forth on Schedule 2.7(a) (each a "Cash Management Bank"), and shall
request in writing and otherwise take such reasonable steps to ensure that all
of its and its Subsidiaries' (if any) Account Debtors forward payment of the
amounts owed by them directly to such Cash Management Bank, and (ii) deposit or
cause to be deposited promptly, and in any event no later than the first
Business Day after the date of receipt thereof, all of their Collections
(including those sent directly by their Account Debtors to Borrower or one of
its Subsidiaries) into a bank account in Administrative Agent's name (a "Cash
Management Account") at one of the Cash Management Banks.
(b) Each Cash Management Bank shall establish and maintain Cash
Management Agreements with Administrative Agent and Borrower. Each such Cash
Management Agreement shall provide, among other things, that (i) the Cash
Management Bank will comply with any instructions originated by Administrative
Agent directing the disposition of the funds in such Cash Management Account
without further consent by Borrower or its Subsidiaries, as applicable, (ii) the
Cash Management Bank has no rights of setoff or recoupment or any other claim
against the applicable Cash Management Account, other than for payment of its
service fees and other charges directly related to the administration of such
Cash Management Account and for returned checks or other items of payment, and
(iii) it will forward by, daily sweep, all amounts in the applicable Cash
Management Account to the Agent's Account.
(c) So long as no Default or Event of Default has occurred and is
continuing, Borrower may amend Schedule 2.7(a) to add or replace a Cash
Management Bank or Cash Management Account; provided, however, that (i) such
prospective Cash Management Bank shall be reasonably satisfactory to
Administrative Agent, and (ii) prior to the time of the opening of such Cash
Management Account, Borrower (or its Subsidiary, as applicable) and such
prospective Cash Management Bank shall have executed and delivered to
Administrative Agent a Cash Management Agreement. Borrower (or its Subsidiaries,
as applicable) shall close any of its Cash Management Accounts (and establish
replacement cash management accounts in accordance with the foregoing sentence)
promptly and in any event within 30 days of notice from Administrative Agent
that the creditworthiness of any Cash Management Bank is no longer acceptable in
Administrative Agent's reasonable judgment, or as promptly as practicable and in
any event within 60 days of notice from Administrative Agent that the operating
performance, funds transfer, or availability procedures or performance of the
Cash Management Bank with respect to Cash Management Accounts or Administrative
Agent's liability under any Cash Management Agreement with such Cash Management
Bank is no longer acceptable in Administrative Agent's reasonable judgment.
14
(d) Each Cash Management Account shall be a cash collateral account
subject to a Control Agreement.
2.8. CREDITING PAYMENTS. The receipt of any payment item by Administrative
Agent (whether from transfers to Administrative Agent by the Cash Management
Banks pursuant to the Cash Management Agreements or otherwise) shall not be
considered a payment on account unless such payment item is a wire transfer of
immediately available federal funds made to the Agent's Account or unless and
until such payment item is honored when presented for payment. Should any
payment item not be honored when presented for payment, then Borrower shall be
deemed not to have made such payment and interest shall be calculated
accordingly. Anything to the contrary contained herein notwithstanding, any
payment item shall be deemed received by Administrative Agent only if it is
received into the Agent's Account on a Business Day on or before 11:00 a.m.
(California time). If any payment item is received into the Agent's Account on a
non-Business Day or after 11:00 a.m. (California time) on a Business Day, it
shall be deemed to have been received by Administrative Agent as of the opening
of business on the immediately following Business Day.
2.9. DESIGNATED ACCOUNT. Administrative Agent is authorized to make the
Advances and the Term Loans, and Issuing Lender is authorized to issue the
Letters of Credit, under this Agreement based upon telephonic or other
instructions received from anyone purporting to be an Authorized Person or,
without instructions, if pursuant to Section 2.6(d). Borrower agrees to
establish and maintain the Designated Account with the Designated Account Bank
for the purpose of receiving the proceeds of the Advances requested by Borrower
and made by Administrative Agent or the Lenders hereunder. Unless otherwise
agreed by Administrative Agent and Borrower, any Advance, Protective Advance, or
Swing Loan requested by Borrower and made by Administrative Agent or the Lenders
hereunder shall be made to the Designated Account.
2.10. MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF OBLIGATIONS.
Administrative Agent shall maintain an account on its books in the name of
Borrower (the "Loan Account") on which Borrower will be charged with the Term
Loans, all Advances (including Protective Advances and Swing Loans) made by
Administrative Agent, Swing Lender, or the Lenders to Borrower or for Borrower's
account, the Letters of Credit issued by Issuing Lender for Borrower's account,
and with all other payment Obligations hereunder or under the other Loan
Documents (except for Bank Product Obligations), including accrued interest,
fees and expenses, and Lender Group Expenses. In accordance with Section 2.8,
the Loan Account will be credited with all payments received by Administrative
Agent from Borrower or for Borrower' account, including all amounts received in
the Agent's Account from any Cash Management Bank. Administrative Agent shall
render monthly statements regarding the Loan Account to Borrower, including
principal, interest, fees, and including an itemization of all charges and
expenses constituting Lender Group Expenses owing, and such statements, absent
manifest error, shall be conclusively presumed to be correct and accurate and
constitute an account stated between Borrower and the Lender Group unless,
within 30 days after receipt thereof by Borrower, Borrower shall deliver to
Administrative Agent written objection thereto describing the error or errors
contained in any such statements.
2.11. FEES. Borrower shall pay to Administrative Agent, as and when due and
payable under the terms of the Fee Letter, the fees set forth in the Fee Letter.
2.12. LETTERS OF CREDIT.
(a) Subject to the terms and conditions of this Agreement, the Issuing
Lender agrees to issue letters of credit for the account of Borrower (each, an
"L/C") or to purchase participations or execute indemnities or reimbursement
obligations (each such undertaking, an "L/C Undertaking") with respect to
letters of credit issued by an Underlying Issuer (as of the Closing Date, the
prospective Underlying Issuer is to be Xxxxx Fargo) for the account of Borrower.
Each request for the issuance of a Letter of Credit or the amendment, renewal,
or extension of any outstanding Letter of Credit shall be made in writing by an
Authorized Person and delivered to the Issuing Lender and Administrative Agent
via hand delivery,
15
telefacsimile, or other electronic method of transmission reasonably in advance
of the requested date of issuance, amendment, renewal, or extension. Each such
request shall be in form and substance satisfactory to the Issuing Lender in its
Permitted Discretion and shall specify (i) the amount of such Letter of Credit,
(ii) the date of issuance, amendment, renewal, or extension of such Letter of
Credit, (iii) the expiration date of such Letter of Credit, (iv) the name and
address of the beneficiary thereof (or the beneficiary of the Underlying Letter
of Credit, as applicable), and (v) such other information (including, in the
case of an amendment, renewal, or extension, identification of the outstanding
Letter of Credit to be so amended, renewed, or extended) as shall be necessary
to prepare, amend, renew, or extend such Letter of Credit. If requested by the
Issuing Lender, Borrower also shall be an applicant under the application with
respect to any Underlying Letter of Credit that is to be the subject of an L/C
Undertaking. The Issuing Lender shall have no obligation to issue a Letter of
Credit if any of the following would result after giving effect to the issuance
of such requested Letter of Credit:
(i) the Letter of Credit Usage would exceed the Borrowing Base
less the outstanding amount of Advances, or
(ii) the Letter of Credit Usage would exceed $2,000,000, or
(iii) the Letter of Credit Usage would exceed the Maximum
Revolver Amount less the outstanding amount of Advances.
Borrower and the Lender Group acknowledge and agree that certain
Underlying Letters of Credit may be issued to support letters of credit that
already are outstanding as of the Closing Date. Each Letter of Credit (and
corresponding Underlying Letter of Credit) shall be in form and substance
acceptable to the Issuing Lender (in the exercise of its Permitted Discretion),
including the requirement that the amounts payable thereunder must be payable in
Dollars. If Issuing Lender is obligated to advance funds under a Letter of
Credit, Borrower immediately shall reimburse such L/C Disbursement to Issuing
Lender by paying to Administrative Agent an amount equal to such L/C
Disbursement not later than 11:00 a.m., California time, on the date that such
L/C Disbursement is made, if Borrower shall have received written or telephonic
notice of such L/C Disbursement prior to 10:00 a.m., California time, on such
date, or, if such notice has not been received by Borrower prior to such time on
such date, then not later than 11:00 a.m., California time, on the Business Day
that Borrower receives such notice, if such notice is received prior to 10:00
a.m., California time, on the date of receipt, and, in the absence of such
reimbursement, the L/C Disbursement immediately and automatically shall be
deemed to be an Advance hereunder and, initially, shall bear interest at the
rate then applicable to Advances that are Base Rate Loans. To the extent an L/C
Disbursement is deemed to be an Advance hereunder, Borrower's obligation to
reimburse such L/C Disbursement shall be discharged and replaced by the
resulting Advance. Promptly following receipt by Administrative Agent of any
payment from Borrower pursuant to this paragraph, Administrative Agent shall
distribute such payment to the Issuing Lender or, to the extent that Lenders
have made payments pursuant to Section 2.12(b) to reimburse the Issuing Lender,
then to such Lenders and the Issuing Lender as their interests may appear.
(b) Promptly following receipt of a notice of L/C Disbursement
pursuant to Section 2.12(a), each Lender with a Revolver Commitment agrees to
fund its Pro Rata Share of any Advance deemed made pursuant to the foregoing
subsection on the same terms and conditions as if Borrower had requested such
Advance and Administrative Agent shall promptly pay to Issuing Lender the
amounts so received by it from the Lenders. By the issuance of a Letter of
Credit (or an amendment to a Letter of Credit increasing the amount thereof) and
without any further action on the part of the Issuing Lender or the Lenders with
Revolver Commitments, the Issuing Lender shall be deemed to have granted to each
Lender with a Revolver Commitment, and each Lender with a Revolver Commitment
shall be deemed to have purchased, a participation in each Letter of Credit, in
an amount equal to its Pro Rata Share of the Risk Participation Liability of
such Letter of Credit, and each such Lender agrees to pay to Administrative
Agent, for the account of the Issuing Lender, such Lender's Pro Rata Share of
any payments made by the Issuing Lender under such
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Letter of Credit. In consideration and in furtherance of the foregoing, each
Lender with a Revolver Commitment hereby absolutely and unconditionally agrees
to pay to Administrative Agent, for the account of the Issuing Lender, such
Lender's Pro Rata Share of each L/C Disbursement made by the Issuing Lender and
not reimbursed by Borrower on the date due as provided in Section 2.12(a), or of
any reimbursement payment required to be refunded to Borrower for any reason.
Each Lender with a Revolver Commitment acknowledges and agrees that its
obligation to deliver to Administrative Agent, for the account of the Issuing
Lender, an amount equal to its respective Pro Rata Share of each L/C
Disbursement made by the Issuing Lender pursuant to this Section 2.12(b) shall
be absolute and unconditional and such remittance shall be made notwithstanding
the occurrence or continuation of an Event of Default or Default or the failure
to satisfy any condition set forth in Section 3. If any such Lender fails to
make available to Administrative Agent the amount of such Lender's Pro Rata
Share of each L/C Disbursement made by the Issuing Lender in respect of such
Letter of Credit as provided in this Section, such Lender shall be deemed to be
a Defaulting Lender and Administrative Agent (for the account of the Issuing
Lender) shall be entitled to recover such amount on demand from such Lender
together with interest thereon at the Defaulting Lender Rate until paid in full.
(c) Borrower hereby agrees to indemnify, save, defend, and hold the
Lender Group harmless from any loss, cost, expense, or liability, and reasonable
attorneys fees incurred by the Lender Group arising out of or in connection with
any Letter of Credit; provided, however, that Borrower shall not be obligated
hereunder to indemnify for any loss, cost, expense, or liability to the extent
that it is caused by the gross negligence or willful misconduct of the Issuing
Lender, Administrative Agent or any other member of the Lender Group. Borrower
agrees to be bound by the Underlying Issuer's regulations and interpretations of
any Underlying Letter of Credit or by Issuing Lender's interpretations of any
L/C issued by Issuing Lender to or for Borrower's account, even though this
interpretation may be different from Borrower's own, and Borrower understands
and agrees that the Lender Group shall not be liable for any error, negligence,
or mistake, whether of omission or commission, in following Borrower's
instructions or those contained in the Letter of Credit or any modifications,
amendments, or supplements thereto. Borrower understands that the L/C
Undertakings may require Issuing Lender to indemnify the Underlying Issuer for
certain costs or liabilities arising out of claims by Borrower against such
Underlying Issuer. Borrower hereby agrees to indemnify, save, defend, and hold
the Lender Group harmless with respect to any loss, cost, expense (including
reasonable attorneys fees), or liability incurred by the Lender Group under any
L/C Undertaking as a result of the Lender Group's indemnification of any
Underlying Issuer; provided, however, that Borrower shall not be obligated
hereunder to indemnify for any loss, cost, expense, or liability to the extent
that it is caused by the gross negligence or willful misconduct of the Issuing
Lender, Administrative Agent or any other member of the Lender Group. Borrower
hereby acknowledges and agrees that neither the Lender Group nor the Issuing
Lender shall be responsible for delays, errors, or omissions resulting from the
malfunction of equipment in connection with any Letter of Credit.
(d) Borrower hereby authorizes and directs any Underlying Issuer to
deliver to the Issuing Lender all instruments, documents, and other writings and
property received by such Underlying Issuer pursuant to such Underlying Letter
of Credit and to accept and rely upon the Issuing Lender's instructions with
respect to all matters arising in connection with such Underlying Letter of
Credit and the related application.
(e) Any and all issuance charges, commissions, fees, and costs
incurred by the Issuing Lender relating to Underlying Letters of Credit shall be
Lender Group Expenses for purposes of this Agreement and immediately shall be
reimbursable by Borrower to Administrative Agent for the account of the Issuing
Lender; it being acknowledged and agreed by Borrower that, as of the Closing
Date, the issuance charge imposed by the prospective Underlying Issuer is 0.825%
per annum times the undrawn amount of each Underlying Letter of Credit, that
such issuance charge may be changed from time to time by written notice to
Borrower, and that the Underlying Issuer also imposes a schedule of charges for
amendments, extensions, drawings, and renewals.
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(f) If by reason of (i) any change after the Closing Date in any
applicable law, treaty, rule, or regulation or any change in the interpretation
or application thereof by any Governmental Authority, or (ii) compliance by the
Underlying Issuer or the Lender Group with any direction, request, or
requirement (irrespective of whether having the force of law) of any
Governmental Authority or monetary authority including, Regulation D of the
Federal Reserve Board as from time to time in effect (and any successor
thereto):
(i) any reserve, deposit, or similar requirement is or shall be
imposed or modified in respect of any Letter of Credit issued hereunder, or
(ii) there shall be imposed on the Underlying Issuer or the
Lender Group any other condition regarding any Underlying Letter of Credit or
any Letter of Credit issued pursuant hereto;
and the result of the foregoing is to increase, directly or indirectly, the cost
to the Lender Group of issuing, making, guaranteeing, or maintaining any Letter
of Credit or to reduce the amount receivable in respect thereof by the Lender
Group, then, and in any such case, Administrative Agent may, at any time within
a reasonable period after the additional cost is incurred or the amount received
is reduced, notify Borrower, and Borrower shall pay on demand such amounts as
Administrative Agent may specify to be necessary to compensate the Lender Group
for such additional cost or reduced receipt, together with interest on such
amount from the date of such demand until payment in full thereof at the rate
then applicable to Base Rate Loans hereunder. The determination by
Administrative Agent of any amount due pursuant to this Section, as set forth in
a certificate setting forth the calculation thereof in reasonable detail, shall,
in the absence of manifest or demonstrable error, be final and conclusive and
binding on all of the parties hereto.
2.13. LIBOR OPTION
(a) Interest and Interest Payment Dates. In lieu of having interest
charged at the rate based upon the Base Rate, Borrower shall have the option
(the "LIBOR Option") to have interest on all or a portion of the Advances or the
Term Loans be charged (whether at the time when made (unless otherwise provided
herein), upon conversion from a Base Rate Loan to a LIBOR Rate Loan, or upon
continuation of a LIBOR Rate Loan as a LIBOR Rate Loan) at a rate of interest
based upon the LIBOR Rate. Interest on LIBOR Rate Loans shall be payable on the
earliest of (i) the last day of the Interest Period applicable thereto, (ii) the
date on which all or any portion of the Obligations, or (iii) the date on which
this Agreement is terminated pursuant to the terms hereof. On the last day of
each applicable Interest Period, unless Borrower properly has exercised the
LIBOR Option with respect thereto, the interest rate applicable to such LIBOR
Rate Loan automatically shall convert to the rate of interest then applicable to
Base Rate Loans of the same type hereunder. At any time that an Event of Default
has occurred and is continuing, Borrower no longer shall have the option to
request that Advances or the Term Loans bear interest at a rate based upon the
LIBOR Rate and Administrative Agent shall have the right to convert the interest
rate on all outstanding LIBOR Rate Loans to the rate then applicable to Base
Rate Loans hereunder.
(b) LIBOR ELECTION.
(i) Borrower may, at any time and from time to time, so long as
no Event of Default has occurred and is continuing, elect to exercise the LIBOR
Option by notifying Administrative Agent prior to 11:00 a.m. (California time)
at least 3 Business Days prior to the commencement of the proposed Interest
Period (the "LIBOR Deadline"). Notice of Borrower's election of the LIBOR Option
for a permitted portion of the Advances or the Term Loans and an Interest Period
pursuant to this Section shall be made by delivery to Administrative Agent of a
LIBOR Notice received by Administrative Agent before the LIBOR Deadline, or by
telephonic notice received by Administrative Agent before the LIBOR Deadline (to
be confirmed by delivery to Administrative Agent of a LIBOR Notice received by
Administrative Agent prior to
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5:00 p.m. (California time) on the same day. Promptly upon its receipt of each
such LIBOR Notice, Administrative Agent shall provide a copy thereof to each of
the Lenders having a Revolver Commitment.
(ii) Each LIBOR Notice shall be irrevocable and binding on
Borrower. In connection with each LIBOR Rate Loan, Borrower shall indemnify,
defend, and hold Administrative Agent and the Lenders harmless against any loss,
cost, or expense incurred by Administrative Agent or any Lender as a result of
(a) the payment of any principal of any LIBOR Rate Loan other than on the last
day of an Interest Period applicable thereto (including as a result of an Event
of Default), (b) the conversion of any LIBOR Rate Loan other than on the last
day of the Interest Period applicable thereto, or (c) the failure to borrow,
convert, continue or prepay any LIBOR Rate Loan on the date specified in any
LIBOR Notice delivered pursuant hereto (such losses, costs, or expenses,
collectively, "Funding Losses"). Funding Losses shall, with respect to
Administrative Agent or any Lender, be deemed to equal the amount determined by
Administrative Agent or such Lender to be the excess, if any, of (i) the amount
of interest that would have accrued on the principal amount of such LIBOR Rate
Loan had such event not occurred, at the LIBOR Rate that would have been
applicable thereto, for the period from the date of such event to the last day
of the then current Interest Period therefor (or, in the case of a failure to
borrow, convert or continue, for the period that would have been the Interest
Period therefor), minus (ii) the amount of interest that would accrue on such
principal amount for such period at the interest rate which Administrative Agent
or such Lender would be offered were it to be offered, at the commencement of
such period, Dollar deposits of a comparable amount and period in the London
interbank market. A certificate of Administrative Agent or a Lender delivered to
Borrower setting forth any amount or amounts that Administrative Agent or such
Lender is entitled to receive pursuant to this Section shall be conclusive
absent manifest error.
(iii) Borrower shall have not more than five (5) LIBOR Rate Loans
in effect at any given time. Borrower only may exercise the LIBOR Option for
LIBOR Rate Loans of at least $1,000,000 and integral multiples of $500,000 in
excess thereof.
(c) PREPAYMENTS. Borrower may prepay LIBOR Rate Loans at any time;
provided, however, that in the event that LIBOR Rate Loans are prepaid on any
date that is not the last day of the Interest Period applicable thereto,
including as a result of any automatic prepayment through the required
application by Administrative Agent of proceeds of Borrower's and its
Subsidiaries' Collections in accordance with Section 2.4(b) or for any other
reason, including early termination of the term of this Agreement or
acceleration of all or any portion of the Obligations pursuant to the terms
hereof, Borrower shall indemnify, defend, and hold Administrative Agent and the
Lenders and their Participants harmless against any and all Funding Losses in
accordance with Section 2.13(b)(ii) above.
(d) SPECIAL PROVISIONS APPLICABLE TO LIBOR RATE.
(i) The LIBOR Rate may be adjusted by Administrative Agent with
respect to any Lender on a prospective basis to take into account any additional
or increased costs to such Lender of maintaining or obtaining any eurodollar
deposits or increased costs, in each case, due to changes in applicable law
occurring subsequent to the commencement of the then applicable Interest Period,
including changes in tax laws (except changes of general applicability in
corporate income tax laws) and changes in the reserve requirements imposed by
the Board of Governors of the Federal Reserve System (or any successor),
excluding the Reserve Percentage, which additional or increased costs would
increase the cost of funding or maintaining loans bearing interest at the LIBOR
Rate. In any such event, the affected Lender shall give Borrower and
Administrative Agent notice of such a determination and adjustment and
Administrative Agent promptly shall transmit the notice to each other Lender
and, upon its receipt of the notice from the affected Lender, Borrower may, by
notice to such affected Lender (y) require such Lender to furnish to Borrower a
statement setting forth the basis for adjusting such LIBOR Rate and the method
for determining the amount of such adjustment, or (z) repay the LIBOR Rate Loans
with respect to which such adjustment is made (together with any amounts due
under Section 2.13(b)(ii) above).
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(ii) In the event that any change in market conditions or any
law, regulation, treaty, or directive, or any change therein or in the
interpretation of application thereof, shall at any time after the date hereof,
in the reasonable opinion of any Lender, make it unlawful or impractical for
such Lender to fund or maintain LIBOR Rate Loans or to continue such funding or
maintaining, or to determine or charge interest rates at the LIBOR Rate, such
Lender shall give notice of such changed circumstances to Administrative Agent
and Borrower and Administrative Agent promptly shall transmit the notice to each
other Lender and (y) in the case of any LIBOR Rate Loans of such Lender that are
outstanding, the date specified in such Lender's notice shall be deemed to be
the last day of the Interest Period of such LIBOR Rate Loans, and interest upon
the LIBOR Rate Loans of such Lender thereafter shall accrue interest at the rate
then applicable to Base Rate Loans, and (z) Borrower shall not be entitled to
elect the LIBOR Option until such Lender determines that it would no longer be
unlawful or impractical to do so (at which time such Lender shall promptly
notify Borrower of such determination and, thereafter, subject to the terms and
conditions hereof, Borrower shall be entitled to elect the LIBOR Option).
(e) NO REQUIREMENT OF MATCHED FUNDING. Anything to the contrary
contained herein notwithstanding, neither Administrative Agent, nor any Lender,
nor any of their Participants, is required actually to acquire eurodollar
deposits to fund or otherwise match fund any Obligation as to which interest
accrues at the LIBOR Rate. The provisions of this Section shall apply as if each
Lender or its Participants had match funded any Obligation as to which interest
is accruing at the LIBOR Rate by acquiring eurodollar deposits for each Interest
Period in the amount of the LIBOR Rate Loans.
2.14. CAPITAL REQUIREMENTS. If, after the date hereof, any Lender
determines that (i) the adoption of or change in any law, rule, regulation or
guideline regarding capital requirements for banks or bank holding companies, or
any change in the interpretation or application thereof by any Governmental
Authority charged with the administration thereof, or (ii) compliance by such
Lender or its parent bank holding company with any guideline, request or
directive of any such entity regarding capital adequacy (whether or not having
the force of law), has the effect of reducing the return on such Lender's or
such holding company's capital as a consequence of such Lender's Commitments
hereunder to a level below that which such Lender or such holding company could
have achieved but for such adoption, change, or compliance (taking into
consideration such Lender's or such holding company's then existing policies
with respect to capital adequacy and assuming the full utilization of such
entity's capital) by any amount deemed by such Lender to be material, then such
Lender may notify Borrower and Administrative Agent thereof. Following receipt
of such notice, Borrower agrees to pay such Lender on demand the amount of such
reduction of return of capital as and when such reduction is determined, payable
within 90 days after presentation by such Lender of a statement in the amount
and setting forth in reasonable detail such Lender's calculation thereof and the
assumptions upon which such calculation was based (which statement shall be
deemed true and correct absent manifest error). In determining such amount, such
Lender may use any reasonable averaging and attribution methods. Notwithstanding
anything in this Section 2.14 to the contrary, in the event any Lender has
exercised its rights pursuant to this Section 2.14, and subsequent thereto
determines that the additional amounts paid by the Borrower in whole or in part
exceed the amount which such Lender actually required to be compensated for any
cost or reduction suffered as noted in this Section, the excess, if any, shall
be returned to the Borrower by such Lender. If any Lender requests compensation
under this Section, then such Lender shall use reasonable efforts to designate a
different lending office for funding or booking its loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to this Section, as the
case may be, in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.
2.15. Intentionally Omitted.
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2.16. SECURITIZATION. Borrower hereby acknowledges that each Lender with a
Term Loan B and each of its Affiliates and Related Funds may sell or securitize
the Term Loan B (a "Securitization") through the pledge of the Term Loan B, as
collateral security for loans to such Lender or its Affiliates or Related Funds
or through the sale of the Term Loan B, or the issuance of direct or indirect
interests in the Term Loan B, which loans to such Lender or its Affiliates or
Related Funds or direct or indirect interests will be rated by Xxxxx'x, S&P or
one or more other rating agencies (the "Rating Agencies"). Borrower agrees to
cooperate with such Lenders and their Affiliates and Related Funds to effect the
Securitization including, without limitation, by (a) executing such additional
documents, as reasonably requested by such Lenders in connection with the
Securitization; provided, however, that (i) any such additional documentation
does not impose material additional costs on Borrower, and (ii) any such
additional documentation does not materially adversely affect the rights, or
increase the obligations, of Borrower under the Loan Documents or change or
affect in a manner adverse to Borrower the financial terms of the Term Loan B,
(b) providing such information as may be reasonably requested by such Lenders in
connection with the rating of the Term Loan B or the Securitization provided
that the provision of such information does not impose material additional costs
on Borrower, and (c) providing in connection with any rating of the Term Loan B
a certificate (i) agreeing to indemnify such Lenders and any of their Affiliates
and Related Funds, any of the Rating Agencies, or any party providing credit
support or otherwise participating in the Securitization (collectively, the
"Securitization Parties") for any losses, claims, damages or liabilities (the
"Securitization Liabilities") to which such Lenders or any of their Affiliates
or Related Funds, or such Securitization Parties, may become subject insofar as
the Securitization Liabilities arise out of or are based upon a breach of the
representation and warranty contained in Section 4.18, and (ii) agreeing to
reimburse such Lenders and their Affiliates and Related Funds, and such
Securitization Parties, for any legal or other expenses reasonably incurred by
such Persons in connection with defending the Securitization Liabilities.
Notwithstanding the foregoing, this Section 2.16 is subject to Administrative
Agent's and the Required Lenders' rights and obligations under Section 13 and
Section 14 hereof in all respects and, in the event of a direct conflict between
this Section 2.16 and any provision of Section 13 or Section 14 with respect to
Administrative Agent's and the Required Lenders' rights and obligations, it is
the intent of the parties that the applicable provision of Section 13 or Section
14 shall control and govern.
3. CONDITIONS; TERM OF AGREEMENT.
3.1. CONDITIONS PRECEDENT TO THE INITIAL EXTENSION OF CREDIT. The
obligation of each Lender to make its initial extension of credit provided for
hereunder, is subject to the fulfillment, to the satisfaction of Administrative
Agent and each Lender of each of the conditions precedent set forth on Schedule
3.1 (the making of such initial extension of credit by a Lender being
conclusively deemed to be its satisfaction or waiver of the conditions
precedent).
3.2. CONDITIONS PRECEDENT TO ALL EXTENSIONS OF CREDIT. The obligation of
the Lender Group (or any member thereof) to make any Advances hereunder (or to
extend any other credit hereunder) at any time shall be subject to the following
conditions precedent:
(a) the representations and warranties of Borrower contained in this
Agreement or in the other Loan Documents shall be true and correct on and as of
the date of such extension of credit, as though made on and as of such date
(except to the extent that such representations and warranties relate solely to
an earlier date);
(b) no Default or Event of Default shall have occurred and be
continuing on the date of such extension of credit, nor shall either result from
the making thereof;
(c) no injunction, writ, restraining order, or other order of any
nature restricting or prohibiting, directly or indirectly, the extending of such
credit shall have been issued and remain in force by
21
any Governmental Authority against Borrower, Administrative Agent, or any
Lender, or any of their Affiliates; and
(d) no Material Adverse Change shall have occurred since the date of
the last financial statements submitted to the Administrative Agent on or before
the Closing Date.
3.3. TERM. This Agreement shall continue in full force and effect for a
term ending on May 1, 2011 (the "Maturity Date"). The foregoing notwithstanding,
the Lender Group, upon the election of the Required Lenders, shall have the
right to terminate its obligations under this Agreement immediately and without
notice upon the occurrence and during the continuation of an Event of Default.
3.4. EFFECT OF TERMINATION. On the date of termination of this Agreement,
all Obligations (including contingent reimbursement obligations of Borrower with
respect to outstanding Letters of Credit and including all Bank Product
Obligations) immediately shall become due and payable without notice or demand
(including (a) either (i) providing cash collateral to be held by Administrative
Agent for the benefit of those Lenders with a Revolver Commitment in an amount
equal to 105% of the Letter of Credit Usage, or (ii) causing the original
Letters of Credit to be returned to the Issuing Lender, and (b) providing cash
collateral (in an amount determined by Administrative Agent as sufficient to
satisfy the reasonably estimated credit exposure) to be held by Administrative
Agent for the benefit of the Bank Product Providers with respect to the Bank
Product Obligations). No termination of this Agreement, however, shall relieve
or discharge Borrower or its Subsidiaries of their duties, Obligations, or
covenants hereunder or under any other Loan Document and the Agent's Liens in
the Collateral shall remain in effect until all Obligations have been paid in
full and the Lender Group's obligations to provide additional credit hereunder
have been terminated. When this Agreement has been terminated and all of the
Obligations have been paid in full and the Lender Group's obligations to provide
additional credit under the Loan Documents have been terminated irrevocably,
Administrative Agent will, at Borrower's sole expense, execute and deliver any
termination statements, lien releases, mortgage releases, re-assignments of
trademarks, discharges of security interests, and other similar discharge or
release documents (and, if applicable, in recordable form) as are reasonably
necessary to release, as of record, the Agent's Liens and all notices of
security interests and liens previously filed by Agent with respect to the
Obligations.
3.5. EARLY TERMINATION BY BORROWER. Borrower has the option, at any time
upon not less than 30 days prior written notice by Borrower to Administrative
Agent and Lenders, to terminate this Agreement and terminate the Commitments
hereunder by paying to Administrative Agent, in cash, the Obligations (including
(a) either (i) providing cash collateral to be held by Administrative Agent for
the benefit of those Lenders with a Revolver Commitment in an amount equal to
105% of the Letter of Credit Usage, or (ii) causing the original Letters of
Credit to be returned to the Issuing Lender, and (b) providing cash collateral
(in an amount determined by Administrative Agent as sufficient to satisfy the
reasonably estimated credit exposure) to be held by Administrative Agent for the
benefit of the Bank Product Providers with respect to the Bank Product
Obligations), in full. If Borrower has sent a notice of termination pursuant to
the provisions of this Section, then the Commitments shall terminate and
Borrower shall be obligated to repay the Obligations (including (a) either (i)
providing cash collateral to be held by Administrative Agent for the benefit of
those Lenders with a Revolver Commitment in an amount equal to 105% of the
Letter of Credit Usage, or (ii) causing the original Letters of Credit to be
returned to the Issuing Lender, and (b) providing cash collateral (in an amount
determined by Administrative Agent as sufficient to satisfy the reasonably
estimated credit exposure) to be held by Administrative Agent for the benefit of
the Bank Product Providers with respect to the Bank Product Obligations), in
full, on the date set forth as the date of termination of this Agreement in such
notice; provided, however that Borrower may change the date of termination of
this Agreement to be one Business Day earlier or later by notifying
Administrative Agent, in writing, of such determination.
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4. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lender Group to enter into this Agreement,
Borrower makes the following representations and warranties to the Lender Group
which shall be true, correct, and complete as of the date hereof, and shall be
true, correct, and complete as of the Closing Date, and at and as of the date of
the making of each Advance (or other extension of credit) made thereafter, as
though made on and as of the date of such Advance (or other extension of credit)
(except to the extent that such representations and warranties relate solely to
an earlier date) and such representations and warranties shall survive the
execution and delivery of this Agreement:
4.1. NO ENCUMBRANCES. Borrower and its Subsidiaries have good and
indefeasible title to, or a valid leasehold interest in, their personal property
assets and good and marketable title to, or a valid leasehold interest in, their
Real Property, in each case, free and clear of Liens except for Permitted Liens.
4.2. ELIGIBLE ACCOUNTS. As to each Account that is identified by Borrower
as an Eligible Account in a borrowing base report submitted to Administrative
Agent, such Account is (a) a bona fide existing payment obligation of the
applicable Account Debtor created by the sale and delivery of Inventory or the
rendition of services to such Account Debtor in the ordinary course of
Borrower's business, (b) owed to Borrower without any known defenses, disputes,
offsets, counterclaims, or rights of return or cancellation, and (c) not
excluded as ineligible by virtue of one or more of the excluding criteria set
forth in the definition of Eligible Accounts.
4.3. ELIGIBLE INVENTORY. As to each item of Inventory that is identified by
Borrower as Eligible Inventory in a borrowing base report submitted to
Administrative Agent, such Inventory is (a) of good and merchantable quality,
and, to the best of Borrower's knowledge, free from known defects, and (b) not
excluded as ineligible by virtue of one or more of the excluding criteria set
forth in the definition of Eligible Inventory.
4.4. EQUIPMENT. Each material item of Equipment of Borrower and its
Subsidiaries is used or held for use in their business and is in good working
order, ordinary wear and tear and damage by casualty excepted.
4.5. LOCATION OF INVENTORY AND EQUIPMENT. The Inventory and Equipment
(other than vehicles or Equipment out for repair) of Borrower and its
Subsidiaries are located only at, or in-transit between, the locations
identified on Schedule 4.5 (as such Schedule may be updated pursuant to Section
5.9).
4.6. INVENTORY RECORDS. Borrower keeps correct and accurate records
itemizing and describing the type, quality, and quantity of its and its
Subsidiaries' Inventory and the book value thereof.
4.7. JURISDICTION OF ORGANIZATION; LOCATION OF CHIEF EXECUTIVE OFFICE;
ORGANIZATIONAL IDENTIFICATION NUMBER; COMMERCIAL TORT CLAIMS.
(a) The name of (within the meaning of Section 9-503 of the Code) and
jurisdiction of organization of Borrower and each of its Subsidiaries is set
forth on Schedule 4.7(a) (as such Schedule may be updated from time to time to
reflect changes permitted to be made under Section 6.5).
(b) The chief executive office of Borrower and each of its
Subsidiaries is located at the address indicated on Schedule 4.7(b) (as such
Schedule may be updated from time to time to reflect changes permitted to be
made under Section 5.9).
23
(c) Borrower's and each of its Subsidiaries' tax identification
numbers and organizational identification numbers, if any, are identified on
Schedule 4.7(c) (as such Schedule may be updated from time to time to reflect
changes permitted to be made under Section 6.5).
(d) As of the Closing Date, Borrower and its Subsidiaries do not hold
any commercial tort claims, except as set forth on Schedule 4.7(d).
4.8. DUE ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.
(a) Borrower is duly organized and existing and in good standing under
the laws of the jurisdiction of its organization and qualified to do business in
any state where the failure to be so qualified reasonably could be expected to
result in a Material Adverse Change.
(b) Set forth on Schedule 4.8(b) (as such Schedule may be updated from
time to time to reflect changes permitted to be made under Section 5.16), is a
complete and accurate description of the authorized capital Stock of Borrower,
by class, and, as of the Closing Date, a description of the number of shares of
each such class that are issued and outstanding. Other than as described on
Schedule 4.8(b), there are no subscriptions, options, warrants, or calls
relating to any shares of Borrower's capital Stock, including any right of
conversion or exchange under any outstanding security or other instrument.
Except as set forth on Schedule 4.8(b), Borrower is not subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its capital Stock or any security convertible into or
exchangeable for any of its capital Stock.
(c) Set forth on Schedule 4.8(c) (as such Schedule may be updated from
time to time to reflect changes permitted to be made under Section 5.16), is a
complete and accurate list of Borrower's direct and indirect Subsidiaries,
showing: (i) the jurisdiction of their organization, (ii) the number of shares
of each class of common and preferred Stock authorized for each of such
Subsidiaries, and (iii) the number and the percentage of the outstanding shares
of each such class owned directly or indirectly by Borrower. All of the
outstanding capital Stock of each such Subsidiary has been validly issued and is
fully paid and non-assessable.
(d) Except as set forth on Schedule 4.8(c), there are no
subscriptions, options, warrants, or calls relating to any shares of Borrower's
Subsidiaries' capital Stock, including any right of conversion or exchange under
any outstanding security or other instrument. Neither Borrower nor any of its
Subsidiaries is subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of Borrower's Subsidiaries'
capital Stock or any security convertible into or exchangeable for any such
capital Stock.
4.9. DUE AUTHORIZATION; NO CONFLICT.
(a) The execution, delivery, and performance by Borrower of this
Agreement and the other Loan Documents to which it is a party have been duly
authorized by all necessary action on the part of Borrower.
(b) The execution, delivery, and performance by Borrower of this
Agreement and the other Loan Documents to which it is a party do not and will
not (i) violate any provision of federal, state, or local law or regulation
applicable to Borrower, the Governing Documents of Borrower, or any order,
judgment, or decree of any court or other Governmental Authority binding on
Borrower, (ii) conflict with, result in a breach of, or constitute (with due
notice or lapse of time or both) a default under any Material Contract, (iii)
result in or require the creation or imposition of any Lien of any nature
whatsoever upon any properties or assets of Borrower, other than Permitted
Liens, or (iv) require any approval of Borrower's
24
interestholders or any approval or consent of any Person under any Material
Contract, other than consents or approvals that have been obtained and that are
still in force and effect.
(c) Other than the filing of financing statements, the recordation of
the Mortgages and other filings or actions necessary to perfect Liens granted to
the Administrative Agent in the Collateral, the execution, delivery, and
performance by Borrower of this Agreement and the other Loan Documents to which
Borrower is a party do not and will not require any registration with, consent,
or approval of, or notice to, or other action with or by, any Governmental
Authority, other than consents or approvals that have been obtained and that are
still in force and effect.
(d) This Agreement and the other Loan Documents to which Borrower is a
party, and all other documents contemplated hereby and thereby, when executed
and delivered by Borrower will be the legally valid and binding obligations of
Borrower, enforceable against Borrower in accordance with their respective
terms, except as enforcement may be limited by equitable principles or by
bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to
or limiting creditors' rights generally.
(e) The Agent's Liens are validly created, perfected (other than (i)
in respect of motor vehicles and (ii) any Deposit Accounts and Securities
Accounts not subject to a Control Agreement as permitted by Section 6.12, and
subject only to the filing of financing statements and the recordation of the
Mortgages), and first priority Liens, subject only to Permitted Liens.
4.10. LITIGATION. Other than those matters disclosed on Schedule 4.10 and
other than matters arising after the Closing Date that reasonably could not be
expected to result in a Material Adverse Change, there are no actions, suits, or
proceedings pending or, to the best knowledge of Borrower, threatened against
Borrower or any of its Subsidiaries.
4.11. NO MATERIAL ADVERSE CHANGE. All financial statements relating to
Borrower and its Subsidiaries that have been delivered by Borrower to the Lender
Group have been prepared in accordance with GAAP (except, in the case of
unaudited financial statements, for the lack of footnotes and being subject to
year-end audit adjustments) and present fairly Borrower's and its Subsidiaries'
financial condition as of the date thereof and results of operations for the
period then ended. There has not been a Material Adverse Change with respect to
Borrower and its Subsidiaries since the date of the last financial statements
submitted to Administrative Agent on or before the Closing Date.
4.12. FRAUDULENT TRANSFER.
(a) Borrower and each of its Subsidiaries is Solvent.
(b) No transfer of property is being made by Borrower or its
Subsidiaries and no obligation is being incurred by Borrower or its Subsidiaries
in connection with the transactions contemplated by this Agreement or the other
Loan Documents with the intent to hinder, delay, or defraud either present or
future creditors of Borrower or its Subsidiaries.
4.13. EMPLOYEE BENEFITS. None of Borrower, any of its Subsidiaries, or any
of their ERISA Affiliates maintains or contributes to any Benefit Plan.
4.14. ENVIRONMENTAL CONDITION. Except as set forth on Schedule 4.14, (a) to
Borrower's knowledge, none of Borrower's or its Subsidiaries' properties or
assets has ever been used by Borrower, its Subsidiaries, or by previous owners
or operators in the disposal of, or to produce, store, handle, treat, release,
or transport, any Hazardous Materials, where such use, production, storage,
handling, treatment, release or transport was in violation, in any material
respect, of any applicable Environmental Law, (b) to Borrower's
25
knowledge, none of Borrower's or its Subsidiaries' properties or assets has ever
been designated or identified in any manner pursuant to any environmental
protection statute as a Hazardous Materials disposal site, (c) neither Borrower
nor any of its Subsidiaries has received notice that a Lien arising under any
Environmental Law has attached to any revenues or to any Real Property owned or
operated by Borrower or its Subsidiaries, and (d) neither Borrower nor its
Subsidiaries has received a summons, citation, notice, or directive from the
United States Environmental Protection Agency or any other federal or state
governmental agency concerning any action or omission by Borrower or its
Subsidiaries resulting in the releasing or disposing of Hazardous Materials into
the environment.
4.15. INTELLECTUAL PROPERTY. Borrower and its Subsidiaries own, or hold
licenses in, all trademarks, trade names, copyrights, patents, patent rights,
licenses and other intellectual property rights that are necessary to the
conduct of their business as currently conducted, and attached hereto as
Schedule 4.15 (as updated from time to time) is a true, correct, and complete
listing of all patents, patent applications, trademarks, trademark
registrations, trademark applications, copyrights, and copyright registrations
and applications as to which Borrower or one of its Subsidiaries is the owner or
is an exclusive licensee.
4.16. LEASES. Borrower and its Subsidiaries enjoy peaceful and undisturbed
possession under all leases material to their business and to which they are
parties or under which they are operating and all of such material leases are
valid and subsisting and no material default by Borrower or its Subsidiaries
exists under any of them.
4.17. DEPOSIT ACCOUNTS AND SECURITIES ACCOUNTS. Set forth on Schedule 4.17
is a listing of all of Borrower's and its Subsidiaries' Deposit Accounts and
Securities Accounts, including, with respect to each bank or securities
intermediary (a) the name and address of such Person, and (b) the account
numbers of the Deposit Accounts or Securities Accounts maintained with such
Person.
4.18. COMPLETE DISCLOSURE. All factual information (taken as a whole)
furnished by or on behalf of Borrower or its Subsidiaries in writing to
Administrative Agent or any Lender (including all information contained in the
Schedules hereto or in the other Loan Documents) for purposes of or in
connection with this Agreement, the other Loan Documents, or any transaction
contemplated herein or therein is, and all other such factual information (taken
as a whole) hereafter furnished by or on behalf of Borrower or its Subsidiaries
in writing to Administrative Agent or any Lender will be, true and accurate on
the date as of which such information is dated or certified and not incomplete
by omitting to state any fact necessary to make such information (taken as a
whole) not misleading in any material respect at such time in light of the
circumstances under which such information was provided. On the Closing Date,
the Projections represent, and as of the date on which any other Projections are
delivered to Administrative Agent, such additional Projections represent
Borrower's good faith estimate of its and its Subsidiaries' future performance
for the periods covered thereby, based upon assumptions believed by Borrower to
be reasonable at the time of the delivery thereof to Administrative Agent (it
being understood that such projections and forecasts are subject to
uncertainties and contingencies, many of which are beyond the control of
Borrower and its Subsidiaries and no assurances can be given that such
projections or forecasts will be realized).
4.19. INDEBTEDNESS. Set forth on Schedule 4.19 is a true and complete list
of all Indebtedness of Borrower and its Subsidiaries outstanding immediately
prior to the Closing Date that is to remain outstanding after the Closing Date
and such Schedule accurately sets forth the aggregate principal amount of such
Indebtedness and the principal terms thereof.
4.20. TAXES AND PAYMENTS. Except as set forth on Schedule 4.20, Borrower
and its Subsidiaries have filed all federal, state and other relevant income tax
returns and all other material tax returns, domestic and foreign, required to be
filed by them in all relevant jurisdictions and have paid all taxes and
assessments payable by them which have become due, except for those contested in
good faith and adequately disclosed and fully provided for on the financial
statements of Borrower and its Subsidiaries, in accordance with GAAP
26
and for which Borrower and its Subsidiaries, as applicable, have provided
adequate reserves (in the good faith judgment of the management of Borrower and
its Subsidiaries). Borrower and its Subsidiaries have provided adequate reserves
(in the good faith judgment of the management of Borrower and its Subsidiaries)
for the payment of all federal, state, local and foreign income taxes applicable
for the current fiscal year to date. There is no action, suit, proceeding,
investigation, audit, or claim now pending or, to the knowledge of Borrower
Parties threatened, by any authority regarding any taxes relating to Borrower or
its Subsidiaries that could reasonably be expected to result in a material
liability to Borrower or any of its Subsidiaries.
4.21. LABOR MATTERS. There are no strikes or other material labor disputes
against Borrower or any of its Subsidiaries or, to the knowledge of Borrower or
any of its Subsidiaries, threatened. To the knowledge of Borrower and its
Subsidiaries, hours worked by and payments made to any employee of Borrower and
its Subsidiaries have not been in violation of the Fair Labor Standards Act or
any other applicable law dealing with such matters, other than a violation that
reasonably could not be expected to cause a Material Adverse Change.
4.22. MATERIAL CONTRACTS. Set forth on Schedule M-1 is a complete and
accurate list, as of the Closing Date, of all Material Contracts of Borrower and
its Subsidiaries, showing the parties and subject matter thereof and amendments
and modifications thereto. Except for matters which, either individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Change, each Material Contract (a) is in full force and effect and is binding
upon and enforceable against Borrower or the relevant Subsidiary and, to the
best of Borrower's knowledge, each other Person that is a party thereto in
accordance with its terms, (b) has not been otherwise amended or modified (other
than amendments or modifications permitted by Section 6.7(d)), and (c) is not in
default due to the action of Borrower or any of its Subsidiaries.
4.23. INACTIVE SUBSIDIARIES. Except as set forth on Schedule 4.23, each
Inactive Subsidiary (a) has no Indebtedness or other liabilities, except for de
minimis Indebtedness, (b) conducts no operations or business, except for de
minimis operations, and (c) owns no assets or properties other than de minimis
assets or properties.
4.24. OFAC; ANTI-TERRORISM LAWS.
(a) Neither the Borrower or any of its Subsidiaries nor any Affiliate
of the Borrower or any of its Subsidiaries (i) is a Sanctioned Person, (ii) has
more than 15% of its assets in Sanctioned Countries, or (iii) derives more than
15% of its operating income from investments in, or transactions with,
Sanctioned Persons or Sanctioned Countries. No part of the proceeds of any
Advance or Term Loan hereunder will be used directly or indirectly to fund any
operations in, finance any investments or activities in or make any payments to,
a Sanctioned Person or a Sanctioned Country.
(b) Neither the making of any Advance or Term Loan hereunder nor the
use of the proceeds thereof will violate the PATRIOT Act, the Trading with the
Enemy Act, as amended, or any of the foreign asset control regulations of the
United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or
any enabling legislation or executive order relating thereto. The Borrower and
each of its Subsidiaries are in compliance in all material respects with the
PATRIOT Act.
5. AFFIRMATIVE COVENANTS.
Borrower covenants and agrees that, until termination of all of the
Commitments and payment in full of the Obligations, Borrower shall and shall
cause each of its Subsidiaries to do all of the following:
5.1. ACCOUNTING SYSTEM. Maintain a system of accounting that enables
Borrower to produce financial statements in accordance with GAAP and maintain
records pertaining to the Collateral that contain information as from time to
time reasonably may be requested by Administrative Agent. Borrower also shall
27
keep a reporting system that shows all additions, sales, claims, returns, and
allowances with respect to its and its Subsidiaries' sales.
5.2. COLLATERAL REPORTING. Provide Administrative Agent (and if so
requested by Administrative Agent, with copies for each Lender) with each of the
reports set forth on Schedule 5.2 at the times specified therein. In addition,
Borrower agrees to cooperate in a commercially reasonable manner with
Administrative Agent to facilitate and implement a system of electronic
collateral reporting in order to provide electronic reporting of each of the
items set forth above.
5.3. FINANCIAL STATEMENTS, REPORTS, CERTIFICATES. Deliver to Administrative
Agent, with copies to each Lender, each of the financial statements, reports, or
other items set forth on Schedule 5.3 at the times specified therein. In
addition, Borrower agrees that no Subsidiary of Borrower will have a fiscal year
different from that of Borrower.
5.4. INTENTIONALLY OMITTED.
5.5. INSPECTION. Permit Administrative Agent, each Lender, and each of
their duly authorized representatives or agents to visit any of its properties
and inspect any of its assets or books and records, to examine and make copies
of its books and records, and to discuss its affairs, finances, and accounts
with, and to be advised as to the same by, its officers and employees at such
reasonable times and intervals as Administrative Agent or any such Lender may
designate and, so long as no Default or Event of Default exists, with reasonable
prior notice to Borrower.
5.6. MAINTENANCE OF PROPERTIES. Maintain and preserve all of its properties
which are necessary or useful in the proper conduct of its business in good
working order and condition, ordinary wear, tear, and casualty excepted (and
except where the failure to do so could not be expected to result in a Material
Adverse Change), and comply at all times with the provisions of all material
leases to which it is a party as lessee, so as to prevent any loss or forfeiture
thereof or thereunder.
5.7. TAXES. Cause all assessments and taxes, whether real, personal, or
otherwise, due or payable by, or imposed, levied, or assessed against Borrower,
its Subsidiaries, or any of their respective assets to be paid in full, before
delinquency or before the expiration of any extension period, except to the
extent that the validity of such assessment or tax shall be the subject of a
Permitted Protest. Borrower will and will cause its Subsidiaries to make timely
payment or deposit of all tax payments and withholding taxes required of it and
them by applicable laws, including those laws concerning F.I.C.A., F.U.T.A.,
state disability, and local, state, and federal income taxes, and will, upon
request, furnish Administrative Agent with proof satisfactory to Administrative
Agent indicating that Borrower and its Subsidiaries have made such payments or
deposits.
5.8. INSURANCE.
(a) At Borrower's expense, maintain insurance respecting its and its
Subsidiaries' assets wherever located, covering loss or damage by fire, theft,
explosion, and all other hazards and risks as ordinarily are insured against by
other Persons engaged in the same or similar businesses. Borrower also shall
maintain business interruption, public liability, and product liability
insurance, as well as insurance against larceny, embezzlement, and criminal
misappropriation. All such policies of insurance shall be in such amounts and
with such insurance companies as are reasonably satisfactory to Administrative
Agent. Borrower shall deliver copies of all such policies to Administrative
Agent with an endorsement naming Administrative Agent as the sole loss payee
(under a satisfactory lender's loss payable endorsement) or additional insured,
as appropriate. Each policy of insurance or endorsement shall contain a clause
requiring the insurer to give not less than 30 days prior written notice to
Administrative Agent in the event of cancellation of the policy for any reason
whatsoever.
28
(b) Borrower shall give Administrative Agent prompt notice of any loss
exceeding $250,000 covered by such insurance. So long as no Event of Default has
occurred and is continuing, Borrower shall have the exclusive right to adjust
any losses payable under any such insurance policies which are less than
$250,000. Following the occurrence and during the continuation of an Event of
Default, or in the case of any losses payable under such insurance exceeding
$250,000, Administrative Agent shall have the exclusive right to adjust any
losses payable under any such insurance policies, without any liability to
Borrower whatsoever in respect of such adjustments. Any monies received as
payment for any loss under any insurance policy mentioned above (other than
liability insurance policies) or as payment of any award or compensation for
condemnation or taking by eminent domain, shall be paid over to Administrative
Agent to be applied at the option of the Required Lenders either to the
prepayment of the Obligations in accordance with Section 2.4(c) or to be
disbursed to Borrower under staged payment terms reasonably satisfactory to the
Required Lenders for application to the cost of repairs, replacements, or
restorations; provided, however, that with respect to any such monies in an
aggregate amount during any 12 consecutive month period not in excess of
$250,000, so long as (A) no Default or Event of Default shall have occurred and
is continuing, (B) Borrower's Excess Availability is greater than $2,500,000,
(C) Borrower shall have given Administrative Agent prior written notice of
Borrower's or its Subsidiaries' intention to apply such monies to the costs of
repairs, replacement, or restoration of the property which is the subject of the
loss, destruction, or taking by condemnation, (D) the monies are held in a cash
collateral account in which Administrative Agent has a perfected first-priority
security interest, and (E) Borrower or its Subsidiary completes such repairs,
replacements, or restoration within 180 days after the initial receipt of such
monies, Borrower shall have the option to apply such monies to the costs of
repairs, replacement, or restoration of the property which is the subject of the
loss, destruction, or taking by condemnation unless and to the extent that such
applicable period shall have expired without such repairs, replacements, or
restoration being made, in which case, any amounts remaining in the cash
collateral account shall be paid to Administrative Agent and applied as set
forth above.
5.9. LOCATION OF INVENTORY AND EQUIPMENT AND CHIEF EXECUTIVE OFFICES. Keep
Borrower's and its Subsidiaries' Inventory and Equipment (other than vehicles
and Equipment out for repair) only at the locations identified on Schedule 4.5
and their chief executive offices only at the locations identified on Schedule
4.7(b); provided, however, that Borrower may amend Schedule 4.5 or Schedule
4.7(b) so long as (x) such amendment occurs by written notice to Administrative
Agent not less than 30 days prior to the date on which such Inventory or
Equipment is moved to such new location or such chief executive office is
relocated, (y) such new location is within the continental United States, and
(z) if the value of Inventory held at such new location is expected to or shall,
at any time, exceed $100,000, at the time Borrower provides such written
notification, Borrower delivers to Administrative Agent a Collateral Access
Agreement with respect thereto.
5.10. COMPLIANCE WITH LAWS. Comply with the requirements of all applicable
laws, rules, regulations, and orders of any Governmental Authority, other than
laws, rules, regulations, and orders the non-compliance with which, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Change.
5.11. LEASES. Pay when due all rents and other amounts payable under any
material leases to which Borrower or any of its Subsidiaries is a party or by
which Borrower's or any such Subsidiaries' properties and assets are bound,
unless such payments are the subject of a Permitted Protest.
5.12. EXISTENCE. At all times preserve and keep in full force and effect
Borrower's and its Subsidiaries' valid existence and good standing and, any
rights and franchises material to their businesses.
5.13. ENVIRONMENTAL.
(a) Keep any property either owned or operated by Borrower or its
Subsidiaries free of any Environmental Liens or post bonds or other financial
assurances sufficient to satisfy the obligations or liability evidenced by such
Environmental Liens, (b) comply with Environmental Laws and provide to
29
Administrative Agent documentation of such compliance which Administrative Agent
reasonably requests, (c) promptly notify Administrative Agent of any release of
a Hazardous Material in any reportable quantity from or onto property owned or
operated by Borrower or any of its Subsidiaries and take any Remedial Actions
required to xxxxx said release or otherwise to come into compliance with
applicable Environmental Law, and (d) promptly, but in any event within 5
Business Days of its receipt thereof, provide Administrative Agent with written
notice of any of the following: (i) notice that an Environmental Lien has been
filed against any of the real or personal property of Borrower or its
Subsidiaries, (ii) commencement of any Environmental Action or notice that an
Environmental Action will be filed against Borrower or any of its Subsidiaries
which could reasonably be expected to have a Material Adverse Change, and (iii)
notice of a violation, citation, or other administrative order which reasonably
could be expected to result in a Material Adverse Change.
5.14. DISCLOSURE UPDATES. Promptly and in no event later than five (5)
Business Days after obtaining knowledge thereof, notify Agent if any written
information, exhibit, or report furnished to the Lender Group contained, at the
time it was furnished, any untrue statement of a material fact or omitted to
state any material fact necessary to make the statements contained therein not
misleading in light of the circumstances in which made. The foregoing to the
contrary notwithstanding, any notification pursuant to the foregoing provision
will not cure or remedy the effect of the prior untrue statement of a material
fact or omission of any material fact nor shall any such notification have the
effect of amending or modifying this Agreement or any of the Schedules hereto.
5.15. CONTROL AGREEMENTS. Take all reasonable steps in order for
Administrative Agent to obtain control in accordance with Sections 8-106, 9-104,
9-105, 9-106, and 9-107 of the Code with respect to (subject to the proviso
contained in Section 6.12) all of its Securities Accounts, Deposit Accounts,
electronic chattel paper, investment property, and letter of credit rights.
5.16. FORMATION OF SUBSIDIARIES. If Borrower intends to form any direct or
indirect Subsidiary or acquire any direct or indirect Subsidiary after the
Closing Date, Borrower shall provide Administrative Agent with at least 10 days
prior written notice to Administrative Agent before forming or acquiring such
Subsidiary. At the time Borrower forms or acquires any direct or indirect
Subsidiary after the Closing Date, Borrower shall cause such new Subsidiary to
provide to Administrative Agent a guaranty and a guarantor security agreement,
together with such other security documents (including Mortgages with respect to
any Real Property of such new Subsidiary), as well as appropriate financing
statements (and with respect to all property subject to a Mortgage, fixture
filings), all in form and substance satisfactory to Administrative Agent
(including being sufficient to grant Administrative Agent a first priority Lien
(subject to Permitted Liens) in and to the assets of such newly formed or
acquired Subsidiary), (b) provide to Administrative Agent a pledge agreement and
appropriate certificates and powers or financing statements, hypothecating all
of the direct or beneficial ownership interest in such new Subsidiary, in form
and substance satisfactory to Administrative Agent, and (c) provide to
Administrative Agent all other documentation, including one or more opinions of
counsel satisfactory to Administrative Agent, which in its opinion is
appropriate with respect to the execution and delivery of the applicable
documentation referred to above (including policies of title insurance or other
documentation with respect to all property subject to a Mortgage). Any document,
agreement, or instrument executed or issued pursuant to this Section 5.16 shall
be a Loan Document. Notwithstanding the foregoing provision, Lenders shall not
be obligated to consent to any such formation or acquisition of a subsidiary
unless such formation or acquisition is not prohibited hereunder.
5.17. MATERIAL CONTRACTS. Contemporaneously with the delivery of a
Compliance Certificate each quarter, (a) provide copies of each Material
Contract entered into since the delivery of the previous Compliance Certificate
to Administrative Agent and (b) provide Administrative Agent with an amendment
to Schedule M-1 to reflect such Material Contract(s).
30
5.18. GOVERNMENT CONTRACTS. Borrower shall use its best efforts to cause
each Government Contract that it enters into after the Closing Date to
incorporate therein 52.232-23 - Alternate I of the Federal Acquisition
Regulations.
5.19. FURTHER ASSURANCES. At any time upon the request of Administrative
Agent, Borrower shall execute or deliver to Administrative Agent, and shall
cause its Subsidiaries to execute or deliver to Administrative Agent, any and
all financing statements, amendments to financing statements, fixture filings,
security agreements, pledges, assignments, endorsements of certificates of
title, mortgages, deeds of trust, opinions of counsel, and all other documents
(collectively, the "Additional Documents") that Administrative Agent may request
in form and substance reasonably satisfactory to Administrative Agent, to
create, perfect, and continue perfected or to better perfect the Agent's Liens
in all of the properties and assets of Borrower and its Subsidiaries (whether
now owned or hereafter arising or acquired, tangible or intangible, real or
personal), to create and perfect Liens in favor of Administrative Agent in any
Real Property acquired by Borrower or its Subsidiaries after the Original
Closing Date, and in order to fully consummate all of the transactions
contemplated hereby and under the other Loan Documents. To the maximum extent
permitted by applicable law, Borrower authorizes Administrative Agent to execute
any such Additional Documents in Borrower's or its Subsidiary's name, as
applicable, and authorizes Administrative Agent to file such executed Additional
Documents in any appropriate filing office. Administrative Agent shall notify
Borrower of the execution and filing of any such Additional Documents.
5.20. FOREIGN QUALIFICATION CERTIFICATES. Within ten (10) days following
the Closing Date, deliver to Administrative Agent, a foreign qualification
certificate for the Borrower, issued by the Secretary of State of the State of
California.
6. NEGATIVE COVENANTS.
Borrower covenants and agrees that, until termination of all of the
Commitments and payment in full of the Obligations, Borrower will not and will
not permit any of its Subsidiaries to do any of the following:
6.1. INDEBTEDNESS. Create, incur, assume, suffer to exist, guarantee, or
otherwise become or remain, directly or indirectly, liable with respect to any
Indebtedness, except:
(a) Indebtedness evidenced by this Agreement and the other Loan
Documents, together with Indebtedness owed to Underlying Issuers with respect to
Underlying Letters of Credit,
(b) Indebtedness set forth on Schedule 4.19, and any Refinancing
Indebtedness in respect of such Indebtedness,
(c) Permitted Purchase Money Indebtedness, and any Refinancing
Indebtedness in respect of such Indebtedness,
(d) [INTENTIONALLY OMITTED]
(e) endorsement of instruments or other payment items for deposit, and
(f) Indebtedness constituting Permitted Investments.
6.2. LIENS. Create, incur, assume, or suffer to exist, directly or
indirectly, any Lien on or with respect to any of its assets, of any kind,
whether now owned or hereafter acquired, or any income or profits therefrom,
except for Permitted Liens.
31
6.3. RESTRICTIONS ON FUNDAMENTAL CHANGES. Except in respect of the Inactive
Subsidiaries:
(a) Enter into any merger, consolidation, reorganization, or
recapitalization, or reclassify its Stock, or purchase all or substantially all
of the assets or Stock of any other Person, in any case, in one transaction or a
series of transactions, or enter into any agreement in respect of or to
undertake any of the foregoing,
(b) Liquidate, wind up, or dissolve itself (or suffer any liquidation
or dissolution), or
(c) Suspend or go out of a substantial portion of its or their
business.
6.4. DISPOSAL OF ASSETS. Other than Permitted Dispositions, convey, sell,
lease, license, assign, transfer, or otherwise dispose of (or enter into an
agreement to convey, sell, lease, license, assign, transfer, or otherwise
dispose of) any of Borrower's or any of its Subsidiaries' assets.
6.5. CHANGE NAME. Change Borrower's or any of its Subsidiaries' name, FEIN,
organizational identification number, state of organization, or organizational
identity; provided, however, that Borrower or any of its Subsidiaries may change
its name (i) to Breeze-Eastern Corporation upon at least 5 Business Days written
notice by Borrower to Administrative Agent of such change or (ii) to another
name upon at least 30 days prior written notice by Borrower to Administrative
Agent of such change and so long as, in each case, (a) at the time of such
written notification, Borrower or such Subsidiary provides any financing
statements necessary to perfect and continue perfected the Agent's Liens and (b)
immediately (and in any event within 2 Business Days) after such name change
Borrower provides Administrative Agent with evidence of such name change
(including copies of any related public filings).
6.6. NATURE OF BUSINESS. Make any change in the principal nature of its or
their business
6.7. PREPAYMENTS AND AMENDMENTS. Except in connection with Refinancing
Indebtedness permitted by Section 6.1,
(a) optionally prepay, redeem, defease, purchase, or otherwise acquire
any Indebtedness of Borrower or its Subsidiaries, other than the Obligations in
accordance with this Agreement,
(b) make any payment on account of Indebtedness that has been
contractually subordinated in right of payment if such payment is not permitted
at such time under the subordination terms and conditions related to such
Indebtedness,
(c) directly or indirectly, amend, modify, alter, increase, or change
any of the terms or conditions of any agreement, instrument, document,
indenture, or other writing evidencing or concerning Indebtedness permitted
under Section 6.1(b) or (c), or
(d) directly or indirectly, amend, modify, alter, increase, or change
any of the terms or conditions of, or waive any of its rights under any Material
Contract in any manner materially adverse to Borrower or the Lender Group.
6.8. [INTENTIONALLY OMITTED].
6.9. CONSIGNMENTS. Consign any of its or their Inventory or sell any of its
or their Inventory on xxxx and hold, sale or return, sale on approval, or other
conditional terms of sale.
32
6.10. DISTRIBUTIONS. Make any distribution or declare or pay any dividends
(in cash or other property, other than common Stock) on, or purchase, acquire,
redeem, or retire any of Borrower's Stock, of any class, whether now or
hereafter outstanding.
6.11. ACCOUNTING METHODS. Modify or change its fiscal year or its method of
accounting (other than as may be required to conform to GAAP) or enter into,
modify, or terminate any agreement currently existing, or at any time hereafter
entered into with any third party accounting firm or service bureau for the
preparation or storage of Borrower's or its Subsidiaries' accounting records
without said accounting firm or service bureau agreeing to provide
Administrative Agent information regarding Borrower's and its Subsidiaries'
financial condition to the extent permitted by applicable law or regulation.
6.12. INVESTMENTS. Except for Permitted Investments, directly or
indirectly, make or acquire any Investment, or incur any liabilities (including
contingent obligations) for or in connection with any Investment; provided,
however, that Borrower and its Subsidiaries shall not have Permitted Investments
(other than in the Cash Management Accounts) in Deposit Accounts or Securities
Accounts in an aggregate amount in excess of $25,000 at any one time unless
Borrower or its Subsidiary, as applicable, and the applicable securities
intermediary or bank have entered into Control Agreements governing such
Permitted Investments in order to perfect (and further establish) the Agent's
Liens in such Permitted Investments. Subject to the foregoing proviso, Borrower
shall not and shall not permit its Subsidiaries to establish or maintain any
Deposit Account or Securities Account unless Administrative Agent shall have
received a Control Agreement in respect of such Deposit Account or Securities
Account.
6.13. TRANSACTIONS WITH AFFILIATES. Directly or indirectly enter into or
permit to exist any transaction with any Affiliate of Borrower or any of its
Subsidiaries except for:
(a) transactions (other the payment of management, consulting,
monitoring, or advisory fees) between Borrower or its Subsidiaries, on the one
hand, and any Affiliate of Borrower or its Subsidiaries, on the other hand, so
long as such transactions (i) are upon fair and reasonable terms, (ii) are fully
disclosed to Administrative Agent if they involve one or more payments by
Borrower or its Subsidiaries in excess of $60,000 for any single transaction or
series of transactions, and (iii) are no less favorable to Borrower or its
Subsidiaries, as applicable, than would be obtained in an arm's length
transaction with a non-Affiliate; and
(b) the payment of reasonable fees, compensation or employee benefit
arrangements to and any indemnity provided for the benefit of, outside directors
of Borrower in the ordinary course of business and consistent with industry
practice.
6.14. USE OF PROCEEDS. Use the proceeds of the Advances and the Term Loans
for any purpose other than (a) on the Closing Date, (i) to refinance existing
indebtedness, and (ii) to pay transactional fees, costs, and expenses incurred
in connection with this Agreement, the other Loan Documents, and the
transactions contemplated hereby and thereby, and (b) thereafter, consistent
with the terms and conditions hereof, for its lawful and permitted purposes.
6.15. INVENTORY AND EQUIPMENT WITH BAILEES. Store the Inventory or
Equipment of Borrower or its Subsidiaries at any time now or hereafter with a
bailee, warehouseman, or similar party unless (a) Borrower has entered into a
Collateral Access Agreement with such bailee, warehouseman or similar party or
(b) (i) such Inventory and Equipment is temporarily at locations identified on
Schedule 4.5 for the completion of certain finishing processes on
work-in-process materials and (ii) the value of such Inventory and Equipment
does not exceed $500,000 in the aggregate.
33
6.16. FINANCIAL COVENANTS.
(a) FIXED CHARGE COVERAGE RATIO. Have a Fixed Charge Coverage Ratio,
measured for the 12 month period ending each fiscal quarter, less than the
required amount set forth in the following table for the applicable period set
forth opposite thereto:
Applicable Ratio Applicable Period
---------------- ----------------------------------------------------
1.00:1.00 For the 12 month period ending June 30, 2006
1.00:1.00 For the 12 month period ending September 30, 2006
1.25:1.00 For the 12 month period ending December 30, 2006 and
ending each fiscal quarter thereafter
(b) CAPITAL EXPENDITURES. Make Capital Expenditures in any fiscal year
in excess of $2,000,000.
provided, however, that 25% of the difference between the amount of Capital
Expenditures that may be made in any Fiscal Year and the amount of Capital
Expenditures actually made in such Fiscal Year, may be made in the immediately
succeeding Fiscal Year.
(c) FACILITY LIMITER AMOUNT. Permit the sum of the Revolver Usage plus
the aggregate outstanding principal amount of the Term Loans to exceed the
Facility Limiter Amount.
6.17. INACTIVE SUBSIDIARIES. Permit any Inactive Subsidiary to incur any
Indebtedness or other material liabilities, conduct any material operations or
business, or own or acquire any material assets or properties.
6.18. LIMITATIONS ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES. Create or otherwise cause, incur, assume, suffer or permit to
exist or become effective any consensual encumbrance or restriction of any kind
on the ability of any Subsidiary of the Borrower (i) to pay dividends or to make
any other distribution on any shares of Stock of such Subsidiary owned by the
Borrower or any of its Subsidiaries, (ii) to pay or prepay or to subordinate any
Indebtedness owed to the Borrower or any of its Subsidiaries, (iii) to make
loans or advances to the Borrower or any of its Subsidiaries or (iv) to transfer
any of its property or assets to the Borrower or any of its Subsidiaries, or
permit any of its Subsidiaries to do any of the foregoing; provided, however,
that nothing in any of clauses (i) through (iv) of this Section 6.18 shall
prohibit or restrict compliance with:
(a) this Agreement and the other Loan Documents;
(b) any applicable law, rule or regulation (including applicable
currency control laws and applicable state, provincial or federal corporate
statutes restricting the payment of dividends in certain circumstances);
(c) in the case of clause (iv), any agreement setting forth customary
restrictions on the subletting, assignment or transfer of any property or asset
that is leased or licensed; or
(d) in the case of clause (iv), any agreement, instrument or other
document evidencing a Permitted Lien that restricts, on customary terms, the
transfer of any property or assets subject thereto.
34
7. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an event of
default (each, an "Event of Default") under this Agreement:
7.1. If Borrower fails to pay when due and payable, or when declared due
and payable, all or any portion of the (i) Obligations, with the exception of
any Obligation consisting of an Overadvance, but including any portion of the
Obligations that accrues after the commencement of an Insolvency Proceeding,
regardless of whether allowed or allowable in whole or in part as a claim in any
such Insolvency Proceeding; or (ii) Obligations consisting of an Overadvance,
such failure continues for one (1) Business Day;
7.2. If Borrower or any of its Subsidiaries
(a) fails to perform or observe any covenant or other agreement
contained in any of Sections 2.4(c), 2.7, 5.2, 5.3, 5.5, 5.7, 5.8, 5.10, 5.12,
5.14, 5.16, 6.1 through 6.14, 6.16, and 6.17 of this Agreement or Sections 6, 8
and 10 of the Security Agreement;
(b) fails to perform or observe any covenant or other agreement
contained in any of Sections 5.6, 5.9, 5.11, 5.15, 5.17, 5.19, 6.15 and 6.18 of
this Agreement and such failure continues for a period of 10 days after the
earlier of (i) the date on which such failure shall first become known to any
officer of Borrower or any of its Subsidiaries, and (ii) written notice thereof
is given to Borrower by Administrative Agent; or
(c) fails to perform or observe any covenant or other agreement
contained in this Agreement, or in any of the other Loan Documents; in each
case, other than any such covenant or agreement that is the subject of another
provision of this Section 7 (in which event such other provision of this Section
7 shall govern), and such failure continues for a period of 20 days after the
earlier of (i) the date on which such failure shall first become known to any
officer of Borrower or any of its Subsidiaries, and (ii) written notice thereof
is given to Borrower by Administrative Agent;
7.3. If any material portion of Borrower's or any of its Subsidiaries'
assets is attached, seized, subjected to a writ or distress warrant, or is
levied upon, or comes into the possession of any third Person and the same is
not discharged before the earlier of 30 days after the date it first arises or
five (5) days prior to the date on which such property or asset is subject to
forfeiture by Borrower or the applicable Subsidiary;
7.4. If an Insolvency Proceeding is commenced by Borrower or any of its
Subsidiaries;
7.5. If an Insolvency Proceeding is commenced against Borrower or any of
its Subsidiaries, and any of the following events occur: (a) Borrower or such
Subsidiary consents to the institution of such Insolvency Proceeding against it,
(b) the petition commencing the Insolvency Proceeding is not timely
controverted, (c) the petition commencing the Insolvency Proceeding is not
dismissed within 60 calendar days of the date of the filing thereof, (d) an
interim trustee is appointed to take possession of all or any substantial
portion of the properties or assets of, or to operate all or any substantial
portion of the business of, Borrower or any of its Subsidiaries, or (e) an order
for relief shall have been issued or entered therein;
7.6. If Borrower or any of its Subsidiaries is enjoined, restrained, or in
any way prevented by court order from continuing to conduct all or any material
part of its business affairs;
7.7. If one or more judgments, orders or awards involving an aggregate
amount of $100,000, or more (except to the extent fully covered by insurance
pursuant to which the insurer has accepted liability therefor in writing) shall
be entered or filed against Borrower or any of its Subsidiaries or with respect
to any of its or their respective assets, and the same is not released,
discharged, bonded against, or stayed pending
35
appeal before the earlier of 30 days after the date it first arises or 5 days
prior to the date on which such asset is subject to being forfeited by Borrower
or the applicable Subsidiary;
7.8. If there is a default in one or more agreements to which Borrower or
any of its Subsidiaries is a party with one or more third Persons relative to
Borrower's or any of its Subsidiaries' Indebtedness involving an aggregate
amount of $250,000 or more, and such default (i) occurs at the final maturity of
the obligations thereunder, or (ii) results in a right by such third Person(s),
irrespective of whether exercised, to accelerate the maturity of Borrower's or
the applicable Subsidiary's obligations thereunder;
7.9. If any warranty, representation, statement, or Record made or deemed
made herein or in any other Loan Document or delivered to Administrative Agent
or any Lender in connection with this Agreement or any other Loan Document
proves to be untrue in any material respect (except that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof) as of the
date of issuance or making or deemed making thereof;
7.10. If the Security Agreement or any other Loan Document that purports to
create a Lien, shall, for any reason, fail or cease to create a valid and
perfected and, except to the extent permitted by the terms hereof or thereof,
first priority Lien on or security interest in the Collateral covered hereby or
thereby, except as a result of a disposition of the applicable Collateral in a
transaction permitted under this Agreement;
7.11. Any provision of any Loan Document shall at any time for any reason
be declared to be null and void, or the validity or enforceability thereof shall
be contested by Borrower or its Subsidiaries, or a proceeding shall be commenced
by Borrower or its Subsidiaries, or by any Governmental Authority having
jurisdiction over Borrower or its Subsidiaries, seeking to establish the
invalidity or unenforceability thereof, or Borrower or its Subsidiaries shall
deny that Borrower or its Subsidiaries has any liability or obligation purported
to be created under any Loan Document; or
7.12. A Change of Control shall occur.
8. THE LENDER GROUP'S RIGHTS AND REMEDIES.
8.1. RIGHTS AND REMEDIES. Upon the occurrence, and during the continuation,
of an Event of Default, the Required Lenders (at their election but without
notice of their election and without demand) may authorize and instruct
Administrative Agent to do any one or more of the following on behalf of the
Lender Group (and Administrative Agent, acting upon the instructions of the
Required Lenders, shall do the same on behalf of the Lender Group), all of which
are authorized by Borrower:
(a) Declare all or any portion of the Obligations, whether evidenced
by this Agreement, by any of the other Loan Documents, or otherwise, immediately
due and payable;
(b) Cease advancing money or extending credit to or for the benefit of
Borrower under this Agreement, under any of the Loan Documents, or under any
other agreement between Borrower and the Lender Group;
(c) Terminate this Agreement and any of the other Loan Documents as to
any future liability or obligation of the Lender Group, but without affecting
any of the Agent's Liens in the Collateral and without affecting the
Obligations; and
(d) The Lender Group shall have all other rights and remedies
available at law or in equity or pursuant to any other Loan Document.
The foregoing to the contrary notwithstanding, upon the occurrence of any Event
of Default described in
36
Section 7.4 or Section 7.5, in addition to the remedies set forth above, without
any notice to Borrower or any other Person or any act by the Lender Group, the
Commitments shall automatically terminate and the Obligations then outstanding,
together with all accrued and unpaid interest thereon and all fees and all other
amounts due under this Agreement and the other Loan Documents, shall
automatically and immediately become due and payable, without presentment,
demand, protest, or notice of any kind, all of which are expressly waived by
Borrower.
8.2. REMEDIES CUMULATIVE. The rights and remedies of the Lender Group under
this Agreement, the other Loan Documents, and all other agreements shall be
cumulative. The Lender Group shall have all other rights and remedies not
inconsistent herewith as provided under the Code, by law, or in equity. No
exercise by the Lender Group of one right or remedy shall be deemed an election,
and no waiver by the Lender Group of any Event of Default shall be deemed a
continuing waiver. No delay by the Lender Group shall constitute a waiver,
election, or acquiescence by it.
9. TAXES AND EXPENSES.
If Borrower or any of its Subsidiaries fails to pay any monies
(whether taxes, assessments, insurance premiums, or, in the case of leased
properties or assets, rents or other amounts payable under such leases) due to
third Persons, or fails to make any deposits or furnish any required proof of
payment or deposit, all as required under the terms of this Agreement, then,
Administrative Agent, in its sole discretion and without prior notice to
Borrower, may do any or all of the following: (a) make payment of the same or
any part thereof, (b) set up such reserves against the Borrowing Base or the
Maximum Revolver Amount as Administrative Agent deems necessary to protect the
Lender Group from the exposure created by such failure, or (c) in the case of
the failure to comply with Section 5.8 hereof, obtain and maintain insurance
policies of the type described in Section 5.8 and take any action with respect
to such policies as Administrative Agent deems prudent. Any such amounts paid by
Administrative Agent shall constitute Lender Group Expenses and any such
payments shall not constitute an agreement by the Lender Group to make similar
payments in the future or a waiver by the Lender Group of any Event of Default
under this Agreement. Administrative Agent need not inquire as to, or contest
the validity of, any such expense, tax, or Lien and the receipt of the usual
official notice for the payment thereof shall be conclusive evidence that the
same was validly due and owing.
10. WAIVERS; INDEMNIFICATION.
10.1. DEMAND; PROTEST; ETC. Borrower waives demand, protest, notice of
protest, notice of default or dishonor, notice of payment and nonpayment,
nonpayment at maturity, release, compromise, settlement, extension, or renewal
of documents, instruments, chattel paper, and guarantees at any time held by the
Lender Group on which Borrower may in any way be liable.
10.2. THE LENDER GROUP'S LIABILITY FOR COLLATERAL. Borrower hereby agrees
that: (a) so long as Administrative Agent complies with its obligations, if any,
under the Code, the Lender Group shall not in any way or manner be liable or
responsible for: (i) the safekeeping of the Collateral, (ii) any loss or damage
thereto occurring or arising in any manner or fashion from any cause, (iii) any
diminution in the value thereof, or (iv) any act or default of any carrier,
warehouseman, bailee, forwarding agency, or other Person, and (b) all risk of
loss, damage, or destruction of the Collateral shall be borne by Borrower.
10.3. INDEMNIFICATION. Borrower shall pay, indemnify, defend, and hold the
Agent-Related Persons, the Lender-Related Persons, and each Participant (each,
an "Indemnified Person") harmless (to the fullest extent permitted by law) from
and against any and all claims, demands, suits, actions, investigations,
proceedings, liabilities, costs, fines, penalties, and damages, and all
reasonable fees and disbursements of attorneys, experts or consultants and all
other costs and expenses actually incurred in connection therewith or in
connection with the enforcement of this indemnification (as and when they are
incurred and irrespective of whether suit is brought), at any time asserted
against, imposed upon, or incurred by any of them (a) in
37
connection with or as a result of or related to the execution, delivery,
enforcement, performance, or administration (including any restructuring or
workout with respect hereto) of this Agreement, any of the other Loan Documents,
or the transactions contemplated hereby or thereby or the monitoring of
Borrower's and its Subsidiaries' compliance with the terms of the Loan
Documents, (b) with respect to any investigation, litigation, or proceeding
related to this Agreement, any other Loan Document, or the use of the proceeds
of the credit provided hereunder (irrespective of whether any Indemnified Person
is a party thereto), or any act, omission, event, or circumstance in any manner
related thereto, and (c) in connection with or arising out of any presence or
release of Hazardous Materials at, on, under, to or from any assets or
properties owned, leased or operated by Borrower or any of its Subsidiaries or
any Environmental Actions, Environmental Liabilities and Costs or Remedial
Actions related in any way to any such assets or properties of Borrower or any
of its Subsidiaries (each and all of the foregoing, the "Indemnified
Liabilities"). The foregoing to the contrary notwithstanding, Borrower shall
have no obligation to any Indemnified Person under this Section 10.3 with
respect to any Indemnified Liability that a court of competent jurisdiction
finally determines to have resulted from the gross negligence or willful
misconduct of such Indemnified Person. This provision shall survive the
termination of this Agreement and the repayment of the Obligations. If any
Indemnified Person makes any payment to any other Indemnified Person with
respect to an Indemnified Liability as to which Borrower was required to
indemnify the Indemnified Person receiving such payment, the Indemnified Person
making such payment is entitled to be indemnified and reimbursed by Borrower
with respect thereto. WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO
EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE
OR IN PART ARE CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH
INDEMNIFIED PERSON OR OF ANY OTHER PERSON.
11. NOTICES.
Unless otherwise provided in this Agreement, all notices or demands by
Borrower or Administrative Agent to the other relating to this Agreement or any
other Loan Document shall be in writing and (except for financial statements and
other informational documents which may be sent by first-class mail, postage
prepaid) shall be personally delivered or sent by registered or certified mail
(postage prepaid, return receipt requested), overnight courier, electronic mail
(at such email addresses as Borrower or Administrative Agent, as applicable, may
designate to each other in accordance herewith), or telefacsimile to Borrower or
to Administrative Agent, as the case may be, at its address set forth below:
If to Borrower: TRANSTECHNOLOGY CORPORATION
000 Xxxxxxx Xxxxxx
Xxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
Fax No.: 000-000-0000
with copies to: XXXX XXXXXX & PARKS, LLP
0000 XX Xxxxx, 000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attn: Xxxxxx X. Xxxxxxxxxx, Esq.
Fax No.: 000-000-0000
If to Administrative Agent: XXXXX FARGO FOOTHILL, INC.
Xxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Business Finance Manager
Fax No.: 000-000-0000
38
with copies to: XXXXXXX XXXXXXXXX LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxxx X. Xxxxxxxxx, Esq.
Fax No.: 000-000-0000
Administrative Agent and Borrower may change the address at which they
are to receive notices hereunder, by notice in writing in the foregoing manner
given to the other party. All notices or demands sent in accordance with this
Section 11, other than notices by Administrative Agent in connection with
enforcement rights against the Collateral under the provisions of the Code,
shall be deemed received on the earlier of the date of actual receipt or 3
Business Days after the deposit thereof in the mail. Borrower acknowledges and
agrees that notices sent by the Lender Group in connection with the exercise of
enforcement rights against Collateral under the provisions of the Code shall be
deemed sent when deposited in the mail or personally delivered, or, where
permitted by law, transmitted by telefacsimile or any other method set forth
above.
12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT
OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT
HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH
RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR
THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW (OR ANY SIMILAR SUCCESSOR PROVISION THERETO) BUT
EXCLUDING ALL OTHER CONFLICT-OF-LAWS RULES.
(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND
LITIGATED ONLY IN THE STATE AND TO THE EXTENT PERMITTED BY APPLICABLE LAW,
FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK; PROVIDED,
HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER
PROPERTY MAY BE BROUGHT, AT ADMINISTRATIVE AGENT'S OPTION, IN THE COURTS OF ANY
JURISDICTION WHERE ADMINISTRATIVE AGENT ELECTS TO BRING SUCH ACTION OR WHERE
SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. BORROWER AND EACH MEMBER OF THE
LENDER GROUP WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH
MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO
THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 12(B).
(c) BORROWER AND EACH MEMBER OF THE LENDER GROUP HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED
THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS. BORROWER AND EACH MEMBER OF THE LENDER
GROUP REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL.
39
IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.
13. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
13.1. ASSIGNMENTS AND PARTICIPATIONS.
(a) Any Lender may assign and delegate to one or more assignees (each
an "Assignee") that are Eligible Transferees all or any portion of the
Obligations, the Commitments and the other rights and obligations of such Lender
hereunder and under the other Loan Documents, in a minimum amount (unless waived
by Administrative Agent) of $5,000,000 (except such minimum amount shall not
apply to (x) an assignment or delegation by any Lender to any other Lender or an
Affiliate of any Lender or (y) a group of new Lenders, each of whom is an
Affiliate of each other or a fund or account managed by any such new Lender or
an Affiliate of such new Lender to the extent that the aggregate amount to be
assigned to all such new Lenders is at least $5,000,000); provided, however,
that subject to the last sentence of Section 13.1(b) hereof, that Borrower and
Administrative Agent may continue to deal solely and directly with such Lender
in connection with the interest so assigned to an Assignee until (i) written
notice of such assignment, together with payment instructions, addresses, and
related information with respect to the Assignee, have been given to
Administrative Agent by such Lender and the Assignee, (ii) such Lender and its
Assignee have delivered to Administrative Agent an Assignment and Acceptance and
Administrative Agent has notified the assigning Lender of its receipt thereof in
accordance with Section 13.1(b), and (iii) unless waived by Administrative
Agent, the assigning Lender or Assignee has paid to Administrative Agent for
Administrative Agent's separate account a processing fee in the amount of
$3,500. Anything contained herein to the contrary notwithstanding, the payment
of any fees shall not be required and the Assignee need not be an Eligible
Transferee if (x) such assignment is in connection with any merger,
consolidation, sale, transfer, or other disposition of all or any substantial
portion of the business or loan portfolio of the assigning Lender or (y) the
assignee is a Lender or an Affiliate of a Lender or a Related Fund.
(b) From and after the date that Administrative Agent notifies the
assigning Lender (with a copy to Borrower) that it has received an executed
Assignment and Acceptance and, if applicable, payment of the required processing
fee, (i) the Assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, shall have the rights and obligations of a Lender
under the Loan Documents, and (ii) the assigning Lender shall, to the extent
that rights and obligations hereunder and under the other Loan Documents have
been assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights (except with respect to Section 10.3 hereof) and be released from any
future obligations under this Agreement (and in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement and the other Loan Documents, such Lender
shall cease to be a party hereto and thereto), and such assignment shall effect
a novation among Borrower, the assigning Lender, and the Assignee; provided,
however, that nothing contained herein shall release any assigning Lender from
such assigning Lender's obligations that survive the termination of this
Agreement, including such assigning Lender's obligations under Section 16 and
Section 16.7(a) of this Agreement.
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the Assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document furnished
pursuant hereto, (ii) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
Borrower or the performance or observance by Borrower of any of its obligations
under this Agreement or any other Loan Document furnished pursuant hereto, (iii)
such Assignee
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confirms that it has received a copy of this Agreement, together with such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance, (iv) such
Assignee will, independently and without reliance upon Administrative Agent,
such assigning Lender or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement, (v) such
Assignee appoints and authorizes Administrative Agent to take such actions and
to exercise such powers under this Agreement as are delegated to Administrative
Agent, by the terms hereof, together with such powers as are reasonably
incidental thereto, and (vi) such Assignee agrees that it will perform all of
the obligations which by the terms of this Agreement are required to be
performed by it as a Lender.
(d) Immediately upon Administrative Agent's receipt of any required
processing fee payment, if required, and the fully executed Assignment and
Acceptance (or the assigning Lender's receipt of a fully executed Assignment and
Acceptance, in the case of an assignment from a Lender to one or more of its
Affiliates or Related Funds, as to which the assigning Lender has not delivered
an Assignment and Acceptance to Administrative Agent or Borrower and in which
case the payment of a processing fee is not required), this Agreement shall be
deemed to be amended to the extent, but only to the extent, necessary to reflect
the addition of the Assignee and the resulting adjustment of the Commitments
arising therefrom. The Commitment allocated to each Assignee shall reduce such
Commitments of the assigning Lender pro tanto.
(e) Any Lender may at any time sell to one or more commercial banks,
financial institutions, or other Persons (a "Participant") participating
interests in all or any portion of its Obligations, its Commitment, and the
other rights and interests of that Lender (the "Originating Lender") hereunder
and under the other Loan Documents; provided, however, that (i) the Originating
Lender shall remain a "Lender" for all purposes of this Agreement and the other
Loan Documents and the Participant receiving the participating interest in the
Obligations, the Commitments, and the other rights and interests of the
Originating Lender hereunder shall not constitute a "Lender" hereunder or under
the other Loan Documents and the Originating Lender's obligations under this
Agreement shall remain unchanged, (ii) the Originating Lender shall remain
solely responsible for the performance of such obligations, (iii) Borrower,
Administrative Agent, and the Lenders shall continue to deal solely and directly
with the Originating Lender in connection with the Originating Lender's rights
and obligations under this Agreement and the other Loan Documents, (iv) no
Lender shall transfer or grant any participating interest under which the
Participant has the right to approve any amendment to, or any consent or waiver
with respect to, this Agreement or any other Loan Document, except to the extent
such amendment to, or consent or waiver with respect to this Agreement or of any
other Loan Document would (A) extend the final maturity date of the Obligations
hereunder in which such Participant is participating, (B) reduce the interest
rate applicable to the Obligations hereunder in which such Participant is
participating, (C) release all or substantially all of the Collateral or
guaranties (except to the extent expressly provided herein or in any of the Loan
Documents) supporting the Obligations hereunder in which such Participant is
participating, (D) postpone the payment of, or reduce the amount of, the
interest or fees payable to such Participant through such Lender, or (E) change
the amount or due dates of scheduled principal repayments or prepayments or
premiums, and (v) all amounts payable by Borrower hereunder shall be determined
as if such Lender had not sold such participation, except that, if amounts
outstanding under this Agreement are due and unpaid, or shall have been declared
or shall have become due and payable upon the occurrence of an Event of Default,
each Participant shall be deemed to have the right of set off in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement. The rights of any Participant only shall be
derivative through the Originating Lender with whom such Participant
participates and no Participant shall have any rights under this Agreement or
the other Loan Documents or any direct rights as to the other Lenders, the
Administrative Agent, Borrower, the Collections of Borrower or its Subsidiaries,
the Collateral, or otherwise in respect of the Obligations. No Participant shall
have the right to participate directly in the making of decisions by the Lenders
among themselves.
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(f) In connection with any such assignment or participation or
proposed assignment or participation, a Lender may, subject to the provisions of
Section 16.7, disclose all documents and information which it now or hereafter
may have relating to Borrower and its Subsidiaries and their respective
businesses.
(g) Any other provision in this Agreement notwithstanding, any Lender
may at any time create a security interest in, or pledge, all or any portion of
its rights under and interest in this Agreement in favor of any (i) Federal
Reserve Bank in accordance with Regulation A of the Federal Reserve Bank or
United States Treasury Regulation 31 CFR Section 203.24, and (ii) any Person
providinG financing or other credit support to a Lender or any of its Affiliates
or Related Funds in accordance with Section 2.16, and such Federal Reserve Bank
or other Person may enforce such pledge or security interest in any manner
permitted under applicable law.
(h) The Administrative Agent, on behalf of and acting solely for this
purpose as agent for the Borrower, shall maintain, or cause to be maintained, a
register (the "Register") on which it enters the name of a Lender as the
registered owner of each Term Loan B held by such Lender and the principal
amount of the loans (and stated interest thereon). Other than in connection with
an assignment by a Lender of all or any portion of its Term Loan B to an
Affiliate of such Lender or a Related Fund of such Lender (such Lender making an
assignment to an Affiliate or a Related Fund, an "Assigning Lender") (i) a
Registered Loan may be assigned or sold in whole or in part only by registration
of such assignment or sale on the Register and (ii) any assignment or sale of
all or part of such Registered Loan may be effected only by registration of such
assignment or sale on the Register. Prior to the registration of assignment or
sale of any Registered Loan, Borrower shall treat the Person in whose name such
Loan is registered as the owner thereof for the purpose of receiving all
payments thereon and for all other purposes, notwithstanding notice to the
contrary. In the case of any assignment by a Lender of all or any portion of its
Term Loan B to an Affiliate of such Lender or a Related Fund of such Lender, and
which assignment is not delivered to the Administrative Agent in accordance with
the last sentence of Section 13.1(b) hereof, the assigning Lender, on behalf of
Borrower, shall maintain a register comparable to the Register.
(i) In the event that a Lender sells participations in any loan
hereunder, such Lender, on behalf of Borrower, shall maintain a register on
which it enters the name of all participants in the loan held by it and the
principal amount (and stated interest thereon) of the portion of the loan which
is the subject of the participation (the "Participant Register"). A loan may be
participated in whole or in part only by registration of such participation on
the Participant Register. Any participation of such loan may be effected only by
the registration of such participation on the Participant Register.
13.2. SUCCESSORS. This Agreement shall bind and inure to the benefit of the
respective successors and assigns of each of the parties; provided, however,
that Borrower may not assign this Agreement or any rights or duties hereunder
without the Lenders' prior written consent and any prohibited assignment shall
be absolutely void ab initio. No consent to assignment by the Lenders shall
release Borrower from its Obligations. A Lender may assign this Agreement and
the other Loan Documents and its rights and duties hereunder and thereunder
pursuant to Section 13.1 hereof and, except as expressly required pursuant to
Section 13.1 hereof, no consent or approval by Borrower is required in
connection with any such assignment.
14. AMENDMENTS; WAIVERS.
14.1. AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of
this Agreement or any other Loan Document (other than Bank Product Agreements or
the Fee Letter), and no consent with respect to any departure by Borrower
therefrom, shall be effective unless the same shall be in writing and signed by
the Required Lenders (or by Administrative Agent at the written request of the
Required Lenders) and Borrower and then any such waiver or consent shall be
effective, but only in the specific instance and for the specific purpose for
which given; provided, however, that no such waiver, amendment, or consent
shall,
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unless in writing and signed by all of the Lenders directly affected thereby and
Borrower, do any of the following:
(a) increase or extend any Commitment of any Lender,
(b) postpone or delay any date fixed by this Agreement or any other
Loan Document for any payment of principal, interest, fees, or other amounts due
hereunder or under any other Loan Document,
(c) reduce the principal of, or the rate of interest on, any loan or
other extension of credit hereunder, or reduce any fees or other amounts payable
hereunder or under any other Loan Document,
(d) change the Pro Rata Share that is required to take any action
hereunder,
(e) amend or modify this Section or any provision of this Agreement
providing for consent or other action by all Lenders,
(f) other than as permitted by Section 15.12, release Agent's Lien in
and to any of the Collateral,
(g) change the definition of "Required Lenders" or "Pro Rata Share",
(h) contractually subordinate any of the Agent's Liens,
(i) other than in connection with a merger, liquidation, dissolution
or sale of such Person expressly permitted by the terms hereof or the other Loan
Documents, release Borrower from any obligation for the payment of money,
(j) amend any of the provisions of Section 2.2, Section 2.3(d),
Section 2.4(b)(i), Section 2.4(b)(ii), Section 2.4(c), or Section 2.4(d).
(k) change the definition of Borrowing Base or the definitions of
Availability, ECF Recapture Amount, Eligible Accounts, Eligible Inventory,
Maximum Revolver Amount, Term Loan A Amount, Term Loan B Amount or change
Section 2.1(b), or
(l) amend any of the provisions of Section 15.
and, provided further, however, that no amendment, waiver or consent shall,
unless in writing and signed by Administrative Agent, Issuing Lender, or Swing
Lender, as applicable, affect the rights or duties of Administrative Agent,
Issuing Lender, or Swing Lender, as applicable, under this Agreement or any
other Loan Document. The foregoing notwithstanding, any amendment, modification,
waiver, consent, termination, or release of, or with respect to, any provision
of this Agreement or any other Loan Document that relates only to the
relationship of the Lender Group among themselves, and that does not affect the
rights or obligations of Borrower, shall not require consent by or the agreement
of Borrower.
14.2. REPLACEMENT OF HOLDOUT LENDER.
(a) If any action to be taken by the Lender Group or Administrative
Agent hereunder requires the unanimous consent, authorization, or agreement of
all Lenders, and a Lender ("Holdout Lender") fails to give its consent,
authorization, or agreement, then Administrative Agent, upon at least 5 Business
Days prior irrevocable notice to the Holdout Lender, may permanently replace the
Holdout Lender with one or more substitute Lenders (each, a "Replacement
Lender"), and the Holdout Lender shall have no right to refuse to be
43
replaced hereunder. Such notice to replace the Holdout Lender shall specify an
effective date for such replacement, which date shall not be later than 15
Business Days after the date such notice is given.
(b) Prior to the effective date of such replacement, the Holdout
Lender and each Replacement Lender shall execute and deliver an Assignment and
Acceptance, subject only to the Holdout Lender being repaid its share of the
outstanding Obligations (including an assumption of its Pro Rata Share of the
Risk Participation Liability) without any premium or penalty of any kind
whatsoever. If the Holdout Lender shall refuse or fail to execute and deliver
any such Assignment and Acceptance prior to the effective date of such
replacement, the Holdout Lender shall be deemed to have executed and delivered
such Assignment and Acceptance. The replacement of any Holdout Lender shall be
made in accordance with the terms of Section 13.1. Until such time as the
Replacement Lenders shall have acquired all of the Obligations, the Commitments,
and the other rights and obligations of the Holdout Lender hereunder and under
the other Loan Documents, the Holdout Lender shall remain obligated to make the
Holdout Lender's Pro Rata Share of Advances and to purchase a participation in
each Letter of Credit, in an amount equal to its Pro Rata Share of the Risk
Participation Liability of such Letter of Credit.
14.3. NO WAIVERS; CUMULATIVE REMEDIES. No failure by Administrative Agent
or any Lender to exercise any right, remedy, or option under this Agreement or
any other Loan Document, or delay by Administrative Agent or any Lender in
exercising the same, will operate as a waiver thereof. No waiver by
Administrative Agent or any Lender will be effective unless it is in writing,
and then only to the extent specifically stated. No waiver by Administrative
Agent or any Lender on any occasion shall affect or diminish Administrative
Agent's and each Lender's rights thereafter to require strict performance by
Borrower of any provision of this Agreement. Administrative Agent's and each
Lender's rights under this Agreement and the other Loan Documents will be
cumulative and not exclusive of any other right or remedy that Agent or any
Lender may have.
15. AGENT; THE LENDER GROUP.
15.1. APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT. Each Lender
hereby designates and appoints WFF as its representative under this Agreement
and the other Loan Documents and, subject to Section 14.1, each Lender hereby
irrevocably authorizes Administrative Agent to execute and deliver each of the
other Loan Documents on its behalf and to take such other action on its behalf
under the provisions of this Agreement and each other Loan Document and to
exercise such powers and perform such duties as are expressly delegated to
Administrative Agent by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto. Administrative
Agent agrees to act as such on the express conditions contained in this Section
15. The provisions of this Section 15 (other than the proviso to Section
15.11(a)) are solely for the benefit of Administrative Agent, and the Lenders,
and Borrower and its Subsidiaries shall have no rights as a third party
beneficiary of any of the provisions contained herein. Any provision to the
contrary contained elsewhere in this Agreement or in any other Loan Document
notwithstanding, Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall
Administrative Agent have or be deemed to have any fiduciary relationship with
any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against Administrative Agent; it being expressly
understood and agreed that the use of the word "Administrative Agent" is for
convenience only, that WFF is merely the representative of the Lenders, and only
has the contractual duties set forth herein. Except as expressly otherwise
provided in this Agreement, Administrative Agent shall have and may use its sole
discretion with respect to exercising or refraining from exercising any
discretionary rights or taking or refraining from taking any actions that
Administrative Agent expressly is entitled to take or assert under or pursuant
to this Agreement and the other Loan Documents. Without limiting the generality
of the foregoing, or of any other provision of the Loan Documents that provides
rights or powers to Administrative Agent, Lenders agree that Administrative
Agent shall have the right to exercise the following powers as long as this
Agreement remains in effect: (a) maintain, in accordance with its customary
business practices, ledgers and
44
records reflecting the status of the Obligations, the Collateral, the
Collections of Borrower and its Subsidiaries, and related matters, (b) execute
or file any and all financing or similar statements or notices, amendments,
renewals, supplements, documents, instruments, proofs of claim, notices and
other written agreements with respect to the Loan Documents, (c) make Advances,
for itself or on behalf of Lenders as provided in the Loan Documents, (d)
exclusively receive, apply, and distribute the Collections of Borrower and its
Subsidiaries as provided in the Loan Documents, (e) open and maintain such bank
accounts and cash management arrangements as Administrative Agent deems
necessary and appropriate in accordance with the Loan Documents for the
foregoing purposes with respect to the Collateral and the Collections of
Borrower and its Subsidiaries, (f) perform, exercise, and enforce any and all
other rights and remedies of the Lender Group with respect to Borrower, the
Obligations, the Collateral, the Collections of Borrower and its Subsidiaries,
or otherwise related to any of same as provided in the Loan Documents, and (g)
incur and pay such Lender Group Expenses as Administrative Agent may deem
necessary or appropriate for the performance and fulfillment of its functions
and powers pursuant to the Loan Documents.
15.2. DELEGATION OF DUTIES. Administrative Agent may execute any of its
duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys in fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. Administrative Agent shall not
be responsible for the negligence or misconduct of any agent or attorney in fact
that it selects as long as such selection was made without gross negligence or
willful misconduct.
15.3. LIABILITY OF ADMINISTRATIVE AGENT. None of the Agent Related Persons
shall (a) be liable for any action taken or omitted to be taken by any of them
under or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct), or (b) be responsible in any manner to any of the Lenders for any
recital, statement, representation or warranty made by Borrower or any
Subsidiary or Affiliate of Borrower, or any officer or director thereof,
contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by Administrative Agent under or in connection with, this Agreement
or any other Loan Document, or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document, or
for any failure of Borrower or any other party to any Loan Document to perform
its obligations hereunder or thereunder. No Agent Related Person shall be under
any obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the books and records or
properties of Borrower or the books or records or properties of any of
Borrower's Subsidiaries or Affiliates.
15.4. RELIANCE BY ADMINISTRATIVE AGENT. Administrative Agent shall be
entitled to rely, and shall be fully protected in relying, upon any writing,
resolution, notice, consent, certificate, affidavit, letter, telegram,
telefacsimile or other electronic method of transmission, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent, or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to Borrower or counsel to any Lender), independent accountants and other experts
selected by Administrative Agent. Administrative Agent shall be fully justified
in failing or refusing to take any action under this Agreement or any other Loan
Document unless Administrative Agent shall first receive such advice or
concurrence of the Lenders as it deems appropriate and until such instructions
are received, Administrative Agent shall act, or refrain from acting, as it
deems advisable. If Administrative Agent so requests, it shall first be
indemnified to its reasonable satisfaction by the Lenders against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action. Administrative Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement or
any other Loan Document in accordance with a request or consent of the requisite
Lenders and such request and any action taken or failure to act pursuant thereto
shall be binding upon all of the Lenders.
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15.5. NOTICE OF DEFAULT OR EVENT OF DEFAULT. Administrative Agent shall not
be deemed to have knowledge or notice of the occurrence of any Default or Event
of Default, except with respect to defaults in the payment of principal,
interest, fees, and expenses required to be paid to Administrative Agent for the
account of the Lenders and, except with respect to Events of Default of which
Administrative Agent has actual knowledge, unless Administrative Agent shall
have received written notice from a Lender or Borrower referring to this
Agreement, describing such Default or Event of Default, and stating that such
notice is a "notice of default." Administrative Agent promptly will notify the
Lenders of its receipt of any such notice or of any Event of Default of which
Administrative Agent has actual knowledge. If any Lender obtains actual
knowledge of any Event of Default, such Lender promptly shall notify the other
Lenders and Administrative Agent of such Event of Default. Each Lender shall be
solely responsible for giving any notices to its Participants, if any. Subject
to Section 15.4, Administrative Agent shall take such action with respect to
such Default or Event of Default as may be requested by the Required Lenders in
accordance with Section 8; provided, however, that if an event occurs or a
circumstance exists that materially and imminently threatens the ability of
Administrative Agent and the Lenders to realize upon any material part of the
Collateral, such as, without limitation, fraudulent removal, concealment or
abscondment thereof, destruction (other than to the extent covered by insurance)
or material waste thereof, or failure of Borrower after reasonable demand to
maintain or reinstate adequate casualty insurance coverage with respect thereto,
Administrative Agent may take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem advisable.
15.6. CREDIT DECISION. Each Lender acknowledges that none of the Agent
Related Persons has made any representation or warranty to it, and that no act
by Administrative Agent hereinafter taken, including any review of the affairs
of Borrower and its Subsidiaries or Affiliates, shall be deemed to constitute
any representation or warranty by any Agent-Related Person to any Lender. Each
Lender represents to Administrative Agent that it has, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of Borrower and any other Person party to a
Loan Document, and all applicable bank regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to Borrower. Each Lender also represents that it
will, independently and without reliance upon any Agent-Related Person and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of Borrower and any other Person party to a Loan Document.
Except for notices, reports, and other documents expressly herein required to be
furnished to the Lenders by Administrative Agent, Administrative Agent shall not
have any duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of Borrower and any other Person party
to a Loan Document that may come into the possession of any of the Agent Related
Persons.
15.7. COSTS AND EXPENSES; INDEMNIFICATION. Administrative Agent may incur
and pay Lender Group Expenses to the extent Administrative Agent reasonably
deems necessary or appropriate for the performance and fulfillment of its
functions, powers, and obligations pursuant to the Loan Documents, including
court costs, reasonable attorneys fees and expenses, reasonable fees and
expenses of financial accountants, advisors, consultants, and appraisers, costs
of collection by outside collection agencies, auctioneer fees and expenses, and
costs of security guards or insurance premiums paid to maintain the Collateral,
whether or not Borrower is obligated to reimburse Administrative Agent or
Lenders for such expenses pursuant to this Agreement or otherwise.
Administrative Agent is authorized and directed to deduct and retain sufficient
amounts from the Collections of Borrower and its Subsidiaries received by
Administrative Agent to reimburse Administrative Agent for such out-of-pocket
costs and expenses prior to the distribution of any amounts to Lenders. In the
event Administrative Agent is not reimbursed for such costs and expenses by
Borrower or its
46
Subsidiaries, each Lender hereby agrees that it is and shall be obligated to pay
to Administrative Agent such Lender's Pro Rata Share thereof. Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand the Agent-Related Persons (to the extent not reimbursed by or on
behalf of Borrower and without limiting the obligation of Borrower to do so),
according to their Pro Rata Shares, from and against any and all Indemnified
Liabilities; provided, however, that no Lender shall be liable for the payment
to any Agent-Related Person of any portion of such Indemnified Liabilities
resulting solely from such Person's gross negligence or willful misconduct nor
shall any Lender be liable for the obligations of any Defaulting Lender in
failing to make an Advance or other extension of credit hereunder. Without
limitation of the foregoing, each Lender shall reimburse Administrative Agent
upon demand for such Lender's Pro Rata Share of any costs or out of pocket
expenses (including reasonable attorneys, accountants, advisors, and consultants
fees and expenses) incurred by Administrative Agent in connection with the
preparation, execution, delivery, administration, modification, amendment, or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that Administrative Agent is not reimbursed for such expenses by
or on behalf of Borrower. The undertaking in this Section shall survive the
payment of all Obligations hereunder and the resignation or replacement of
Administrative Agent.
15.8. ADMINISTRATIVE AGENT IN INDIVIDUAL CAPACITY. WFF and its Affiliates
may make loans to, issue letters of credit for the account of, accept deposits
from, acquire equity interests in, and generally engage in any kind of banking,
trust, financial advisory, underwriting, or other business with Borrower and its
Subsidiaries and Affiliates and any other Person party to any Loan Documents as
though WFF were not Administrative Agent hereunder, and, in each case, without
notice to or consent of the other members of the Lender Group. The other members
of the Lender Group acknowledge that, pursuant to such activities, WFF or its
Affiliates may receive information regarding Borrower or its Affiliates and any
other Person party to any Loan Documents that is subject to confidentiality
obligations in favor of Borrower or such other Person and that prohibit the
disclosure of such information to the Lenders, and the Lenders acknowledge that,
in such circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver Administrative Agent will use its reasonable best
efforts to obtain), Administrative Agent shall not be under any obligation to
provide such information to them. The terms "Lender" and "Lenders" include WFF
in its individual capacity.
15.9. SUCCESSOR ADMINISTRATIVE AGENT. Administrative Agent may resign as
Administrative Agent upon 45 days notice to the Lenders (unless such notice is
waived by the Required Lenders). If Administrative Agent resigns under this
Agreement, the Required Lenders shall appoint a successor Administrative Agent
for the Lenders. If no successor Administrative Agent is appointed prior to the
effective date of the resignation of Administrative Agent, Administrative Agent
may appoint, after consulting with the Lenders, a successor Administrative
Agent. If Administrative Agent has materially breached or failed to perform any
material provision of this Agreement or of applicable law, the Required Lenders
may agree in writing to remove and replace Administrative Agent with a successor
Administrative Agent from among the Lenders. In any such event, upon the
acceptance of its appointment as successor Administrative Agent hereunder, such
successor Administrative Agent shall succeed to all the rights, powers, and
duties of the retiring Administrative Agent and the term "Administrative Agent"
shall mean such successor Administrative Agent and the retiring Administrative
Agent's appointment, powers, and duties as Administrative Agent shall be
terminated. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Section 15 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement. If no successor Administrative Agent
has accepted appointment as Administrative Agent by the date which is 45 days
following a retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall perform all of the duties of Administrative Agent
hereunder until such time, if any, as the Lenders appoint a successor
Administrative Agent as provided for above.
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15.10. LENDER IN INDIVIDUAL CAPACITY. Any Lender and its respective
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with Borrower
and its Subsidiaries and Affiliates and any other Person party to any Loan
Documents as though such Lender were not a Lender hereunder without notice to or
consent of the other members of the Lender Group. The other members of the
Lender Group acknowledge that, pursuant to such activities, such Lender and its
respective Affiliates may receive information regarding Borrower or its
Affiliates and any other Person party to any Loan Documents that is subject to
confidentiality obligations in favor of Borrower or such other Person and that
prohibit the disclosure of such information to the Lenders, and the Lenders
acknowledge that, in such circumstances (and in the absence of a waiver of such
confidentiality obligations, which waiver such Lender will use its reasonable
best efforts to obtain), such Lender shall not be under any obligation to
provide such information to them. With respect to the Swing Loans and Protective
Advances, Swing Lender shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not
the sub-agent of Administrative Agent.
15.11. WITHHOLDING TAXES.
(a) All payments made by Borrower hereunder or under any note or other
Loan Document will be made without setoff, counterclaim, or other defense. In
addition, all such payments will be made free and clear of, and without
deduction or withholding for, any present or future Taxes, and in the event any
deduction or withholding of Taxes is required, Borrower shall comply with the
penultimate sentence of this Section 15.11(a). "Taxes" shall mean, any taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but excluding
any tax imposed by any jurisdiction or by any political subdivision or taxing
authority thereof or therein measured by or based on the net income or net
profits of any Lender) and all interest, penalties or similar liabilities with
respect thereto. If any Taxes are so levied or imposed, Borrower agrees to pay
the full amount of such Taxes and such additional amounts as may be necessary so
that every payment of all amounts due under this Agreement, any note, or Loan
Document, including any amount paid pursuant to this Section 15.11(a) after
withholding or deduction for or on account of any Taxes, will not be less than
the amount provided for herein; provided, however, that Borrower shall not be
required to increase any such amounts (i) if the increase in such amount payable
results from Administrative Agent's or such Lender's own willful misconduct or
gross negligence (as finally determined by a court of competent jurisdiction) or
(ii) so long as no Event of Default has occurred and is continuing, to the
extent and at the rate that such tax was in effect at the time such Lender
became a party to this Agreement, except to the extent that such Lender's
assignor (if any) was entitled, at the time of the assignment, to receive
additional amounts from Borrower with respect to Taxes pursuant to this Section
15.11(a). Borrower will furnish to Administrative Agent as promptly as possible
after the date the payment of any Tax is due pursuant to applicable law
certified copies of tax receipts evidencing such payment by Borrower.
(b) If a Lender claims an exemption from United States withholding
tax, such Lender shall represent and deliver to Administrative Agent (or, in the
case of a Lender party to an Assignment and Acceptance that is not delivered to
the Administrative Agent in accordance with the last sentence of Section 13.1(b)
hereof, the Assigning Lender) the following:
(i) if such Lender claims an exemption from United States
withholding tax pursuant to its portfolio interest exception, (A) a statement of
the Lender, signed under penalty of perjury, that it is not a (I) a "bank" as
described in Section 881(c)(3)(A) of the IRC, (II) a 10% shareholder of Borrower
(within the meaning of Section 871(h)(3)(B) of the IRC), or (III) a controlled
foreign corporation related to Borrower within the meaning of Section 864(d)(4)
of the IRC, and (B) a properly completed and executed IRS Form W-8BEN, before
receiving its first payment under this Agreement and at any other time
reasonably requested by Administrative Agent, Borrower or the Assigning Lender,
as applicable.
48
(ii) if such Lender claims an exemption from, or a reduction of,
withholding tax under a United States tax treaty, properly completed and
executed IRS Form W-8BEN before receiving its first payment under this Agreement
and at any other time reasonably requested by Administrative Agent, Borrower or
the Assigning Lender, as applicable;
(iii) if such Lender claims that interest paid under this
Agreement is exempt from United States withholding tax because it is effectively
connected with a United States trade or business of such Lender, two properly
completed and executed copies of IRS Form W-8ECI before receiving its first
payment under this Agreement and at any other time reasonably requested by
Administrative Agent, Borrower or the Assigning Lender, as applicable; or
(iv) such other form or forms, including IRS Form W-9, as may be
required under the IRC or other laws of the United States as a condition to
exemption from, or reduction of, United States withholding or backup withholding
tax before receiving its first payment under this Agreement and at any other
time reasonably requested by Administrative Agent, Borrower or the Assigning
Lender, as applicable.
Each Lender agrees promptly to notify Administrative Agent or the Assigning
Lender, as applicable, of any change in circumstances which would modify or
render invalid any claimed exemption or reduction.
(c) If a Lender claims an exemption from withholding tax in a
jurisdiction other than the United States, such Lender shall deliver to
Administrative Agent (or, in the case of a Lender party to an Assignment and
Acceptance that is not delivered to the Administrative Agent in accordance with
the last sentence of Section 13.1(b) hereof, the Assigning Lender) any such form
or forms, as may be required under the laws of such jurisdiction as a condition
to exemption from, or reduction of, foreign withholding or backup withholding
tax before receiving its first payment under this Agreement and at any other
time reasonably requested by Administrative Agent, Borrower or the Assigning
Lender, as applicable.
Each Lender agrees promptly to notify Administrative Agent or the Assigning
Lender, as applicable, of any change in circumstances which would modify or
render invalid any claimed exemption or reduction.
(d) If any Lender claims exemption from, or reduction of, withholding
tax and such Lender sells, assigns, grants a participation in, or otherwise
transfers all or part of the Obligations of Borrower to such Lender, such Lender
agrees to notify Administrative Agent or the Assigning Lender or Borrower, as
applicable, of the percentage amount in which it is no longer the beneficial
owner of Obligations of Borrower to such Lender. To the extent of such
percentage amount, Administrative Agent, Assigning Lender or Borrower, as
applicable, will treat such Lender's documentation provided pursuant to Sections
15.11(b) or 15.11(c) as no longer valid. With respect to such percentage amount,
Lender may provide new documentation, pursuant to Sections 15.11 (b) or
15.11(c), if applicable.
(e) If any Lender is entitled to a reduction in the applicable
withholding tax, Administrative Agent may withhold from any interest payment to
such Lender an amount equivalent to the applicable withholding tax after taking
into account such reduction. If the forms or other documentation required by
subsection (b) or (c) of this Section 15.11 are not delivered to Administrative
Agent, then Administrative Agent may withhold from any interest payment to such
Lender not providing such forms or other documentation an amount equivalent to
the applicable withholding tax.
(f) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that Administrative Agent did not
properly withhold tax from amounts paid to or for the account of any Lender due
to a failure on the part of the Lender (because the appropriate form was not
delivered, was not properly executed, or because such Lender failed to notify
the proper Person of a change in circumstances which rendered the exemption
from, or reduction of, withholding tax ineffective, or for any
49
other reason) such Lender shall indemnify and hold Administrative Agent harmless
for all amounts paid, directly or indirectly, by Administrative Agent, as tax or
otherwise, including penalties and interest, and including any taxes imposed by
any jurisdiction on the amounts payable to Administrative Agent under this
Section 15.11, together with all costs and expenses (including attorneys fees
and expenses). The obligation of the Lenders under this subsection shall survive
the payment of all Obligations and the resignation or replacement of
Administrative Agent.
15.12. COLLATERAL MATTERS.
(a) The Lenders hereby irrevocably authorize Administrative Agent, at
its option and in its sole discretion, to release any Lien on any Collateral (i)
upon the termination of the Commitments and payment and satisfaction in full by
Borrower of all Obligations, (ii) constituting property being sold or disposed
of if a release is required or desirable in connection therewith and if Borrower
certifies to Administrative Agent that the sale or disposition is permitted
under Section 6.4 of this Agreement or the other Loan Documents (and
Administrative Agent may rely conclusively on any such certificate, without
further inquiry), (iii) constituting property in which Borrower or its
Subsidiaries owned no interest at the time the Agent's Lien was granted nor at
any time thereafter, or (iv) constituting property leased to Borrower or its
Subsidiaries under a lease that has expired or is terminated in a transaction
permitted under this Agreement. Except as provided above, Administrative Agent
will not execute and deliver a release of any Lien on any Collateral without the
prior written authorization of (y) if the release is of all or any substantial
portion of the Collateral, all of the Lenders, or (z) otherwise, the Required
Lenders. Upon request by Administrative Agent or Borrower at any time, the
Lenders will confirm in writing Administrative Agent's authority to release any
such Liens on particular types or items of Collateral pursuant to this Section
15.12; provided, however, that (1) Administrative Agent shall not be required to
execute any document necessary to evidence such release on terms that, in
Administrative Agent's opinion, would expose Administrative Agent to liability
or create any obligation or entail any consequence other than the release of
such Lien without recourse, representation, or warranty, and (2) such release
shall not in any manner discharge, affect, or impair the Obligations or any
Liens (other than those expressly being released) upon (or obligations of
Borrower in respect of) all interests retained by Borrower, including, the
proceeds of any sale, all of which shall continue to constitute part of the
Collateral.
(b) Administrative Agent shall have no obligation whatsoever to any of
the Lenders to assure that the Collateral exists or is owned by Borrower or is
cared for, protected, or insured or has been encumbered, or that the Agent's
Liens have been properly or sufficiently or lawfully created, perfected,
protected, or enforced or are entitled to any particular priority, or to
exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to Administrative Agent pursuant to
any of the Loan Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission, or event related thereto, subject to the terms
and conditions contained herein, Administrative Agent may act in any manner it
may deem appropriate, in its sole discretion given Administrative Agent's own
interest in the Collateral in its capacity as one of the Lenders and that
Administrative Agent shall have no other duty or liability whatsoever to any
Lender as to any of the foregoing, except as otherwise provided herein.
15.13. RESTRICTIONS ON ACTIONS BY LENDERS; SHARING OF PAYMENTS.
(a) Each of the Lenders agrees that it shall not, without the express
written consent of Administrative Agent, and that it shall, to the extent it is
lawfully entitled to do so, upon the written request of Administrative Agent,
set off against the Obligations, any amounts owing by such Lender to Borrower or
any deposit accounts of Borrower now or hereafter maintained with such Lender.
Each of the Lenders further agrees that it shall not, unless specifically
requested to do so in writing by Administrative Agent, take or cause to be taken
any action, including, the commencement of any legal or equitable proceedings,
to foreclose any Lien on, or otherwise enforce any security interest in, any of
the Collateral.
50
(b) Except as expressly provided for herein, if, at any time or times
any Lender shall receive (i) by payment, foreclosure, setoff, or otherwise, any
proceeds of Collateral or any payments with respect to the Obligations, except
for any such proceeds or payments received by such Lender from Administrative
Agent pursuant to the terms of this Agreement, or (ii) payments from
Administrative Agent in excess of such Lender's Pro Rata Share of all such
distributions by Administrative Agent, such Lender promptly shall (A) turn the
same over to Administrative Agent, in kind, and with such endorsements as may be
required to negotiate the same to Administrative Agent, or in immediately
available funds, as applicable, for the account of all of the Lenders and for
application to the Obligations in accordance with the applicable provisions of
this Agreement, or (B) purchase, without recourse or warranty, an undivided
interest and participation in the Obligations owed to the other Lenders so that
such excess payment received shall be applied ratably as among the Lenders in
accordance with their Pro Rata Shares; provided, however, that to the extent
that such excess payment received by the purchasing party is thereafter
recovered from it, those purchases of participations shall be rescinded in whole
or in part, as applicable, and the applicable portion of the purchase price paid
therefor shall be returned to such purchasing party, but without interest except
to the extent that such purchasing party is required to pay interest in
connection with the recovery of the excess payment.
15.14. AGENCY FOR PERFECTION. Each Lender hereby appoints Administrative
Agent as its agent (and Administrative Agent hereby accepts such appointment)
for the purpose of perfecting the Agent's Liens in assets which, in accordance
with Article 8 or Article 9, as applicable, of the Code can be perfected only by
possession or control. Should any Lender obtain possession or control of any
such Collateral, such Lender shall notify Administrative Agent thereof, and,
promptly upon Administrative Agent's request therefor shall deliver possession
or control of such Collateral to Administrative Agent or in accordance with
Administrative Agent's instructions.
15.15. PAYMENTS BY ADMINISTRATIVE AGENT TO THE LENDERS. All payments to be
made by Administrative Agent to the Lenders shall be made by bank wire transfer
of immediately available funds pursuant to such wire transfer instructions as
each party may designate for itself by written notice to Administrative Agent.
Concurrently with each such payment, Administrative Agent shall identify whether
such payment (or any portion thereof) represents principal, premium, fees, or
interest of the Obligations.
15.16. CONCERNING THE COLLATERAL AND RELATED LOAN DOCUMENTS. Each member of
the Lender Group authorizes and directs Administrative Agent to enter into this
Agreement and the other Loan Documents. Each member of the Lender Group agrees
that any action taken by Administrative Agent in accordance with the terms of
this Agreement or the other Loan Documents relating to the Collateral and the
exercise by Administrative Agent of its powers set forth therein or herein,
together with such other powers that are reasonably incidental thereto, shall be
binding upon all of the Lenders.
15.17. FIELD AUDITS AND EXAMINATION REPORTS; CONFIDENTIALITY; DISCLAIMERS
BY LENDERS; OTHER REPORTS AND INFORMATION. By becoming a party to this
Agreement, each Lender:
(a) is deemed to have requested that Administrative Agent furnish such
Lender, promptly after it becomes available, a copy of each field audit or
examination report (each a "Report" and collectively, "Reports") prepared by or
at the request of Administrative Agent, and Administrative Agent shall so
furnish each Lender with such Reports,
(b) expressly agrees and acknowledges that Administrative Agent does
not (i) make any representation or warranty as to the accuracy of any Report,
and (ii) shall not be liable for any information contained in any Report,
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that Administrative Agent or other party
performing any audit or examination will inspect only
51
specific information regarding Borrower and will rely significantly upon
Borrower's and its Subsidiaries' books and records, as well as on
representations of Borrower's personnel,
(d) agrees to keep all Reports and other material, non-public
information regarding Borrower and its Subsidiaries and their operations,
assets, and existing and contemplated business plans in a confidential manner in
accordance with Section 16.7, and
(e) without limiting the generality of any other indemnification
provision contained in this Agreement, agrees: (i) to hold Administrative Agent
and any such other Lender preparing a Report harmless from any action the
indemnifying Lender may take or fail to take or any conclusion the indemnifying
Lender may reach or draw from any Report in connection with any loans or other
credit accommodations that the indemnifying Lender has made or may make to
Borrower, or the indemnifying Lender's participation in, or the indemnifying
Lender's purchase of, a loan or loans of Borrower; and (ii) to pay and protect,
and indemnify, defend and hold Administrative Agent, and any such other Lender
preparing a Report harmless from and against, the claims, actions, proceedings,
damages, costs, expenses, and other amounts (including, attorneys fees and
costs) incurred by Administrative Agent, and any such other Lender preparing a
Report as the direct or indirect result of any third parties who might obtain
all or part of any Report through the indemnifying Lender.
In addition to the foregoing: (x) any Lender may from time to time request of
Administrative Agent in writing that Administrative Agent provide to such Lender
a copy of any report or document provided by Borrower or any of its Subsidiaries
to Administrative Agent that has not been contemporaneously provided by Borrower
or any of its Subsidiaries to such Lender, and, upon receipt of such request,
Administrative Agent promptly shall provide a copy of same to such Lender, (y)
to the extent that Administrative Agent is entitled, under any provision of the
Loan Documents, to request additional reports or information from Borrower or
any of its Subsidiaries, any Lender may, from time to time, reasonably request
Administrative Agent to exercise such right as specified in such Lender's notice
to Administrative Agent, whereupon Administrative Agent promptly shall request
of Borrower the additional reports or information reasonably specified by such
Lender, and, upon receipt thereof from Borrower, Administrative Agent promptly
shall provide a copy of same to such Lender, and (z) any time that
Administrative Agent renders to Borrower a statement regarding the Loan Account,
Administrative Agent shall send a copy of such statement to each Lender.
15.18. SEVERAL OBLIGATIONS; NO LIABILITY. Notwithstanding that certain of
the Loan Documents now or hereafter may have been or will be executed only by or
in favor of Administrative Agent in its capacity as such, and not by or in favor
of the Lenders, any and all obligations on the part of Administrative Agent (if
any) to make any credit available hereunder shall constitute the several (and
not joint) obligations of the respective Lenders on a ratable basis, according
to their respective Commitments, to make an amount of such credit not to exceed,
in principal amount, at any one time outstanding, the amount of their respective
Commitments. Nothing contained herein shall confer upon any Lender any interest
in, or subject any Lender to any liability for, or in respect of, the business,
assets, profits, losses, or liabilities of any other Lender. Each Lender shall
be solely responsible for notifying its Participants of any matters relating to
the Loan Documents to the extent any such notice may be required, and no Lender
shall have any obligation, duty, or liability to any Participant of any other
Lender. Except as provided in Section 15.7, no member of the Lender Group shall
have any liability for the acts of any other member of the Lender Group. No
Lender shall be responsible to Borrower or any other Person for any failure by
any other Lender to fulfill its obligations to make credit available hereunder,
nor to advance for it or on its behalf in connection with its Commitment, nor to
take any other action on its behalf hereunder or in connection with the
financing contemplated herein.
15.19. BANK PRODUCT PROVIDERS. Each Bank Product Provider shall be deemed a
party hereto for purposes of any reference in a Loan Document to the parties for
whom Administrative Agent is acting; it being understood and agreed that the
rights and benefits of such Bank Product Provider under the Loan Documents
consist exclusively of such Bank Product Provider's right to share in payments
and collections out of the
52
Collateral as more fully set forth herein. In connection with any such
distribution of payments and collections, Administrative Agent shall be entitled
to assume no amounts are due to any Bank Product Provider unless such Bank
Product Provider has notified Administrative Agent in writing of the amount of
any such liability owed to it prior to such distribution.
15.20. CO-LEAD ARRANGERS. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, neither WFF
as co-lead arranger nor AC Finance LLC as co-lead arranger (collectively, the
"Lead Arrangers") shall have any duties or responsibilities in such capacity,
nor shall the Lead Arrangers have or be deemed to have any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Lead
Arrangers. Each Lender acknowledges that it has not relied, and will not rely,
on the Lead Arrangers in deciding to enter into this Agreement and each other
Loan Document to which it is, or may become, a party or in taking or not taking
action hereunder or thereunder.
16. GENERAL PROVISIONS.
16.1. EFFECTIVENESS. This Agreement shall be binding and deemed effective
when executed by Borrower, Administrative Agent, and each Lender whose signature
is provided for on the signature pages hereof.
16.2. SECTION HEADINGS. Headings and numbers have been set forth herein for
convenience only. Unless the contrary is compelled by the context, everything
contained in each Section applies equally to this entire Agreement.
16.3. INTERPRETATION. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed against the Lender Group or Borrower,
whether under any rule of construction or otherwise. On the contrary, this
Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.
16.4. SEVERABILITY OF PROVISIONS. Each provision of this Agreement shall be
severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.
16.5. COUNTERPARTS; ELECTRONIC EXECUTION. This Agreement may be executed in
any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be an original,
and all of which, when taken together, shall constitute but one and the same
Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this Agreement. Any
party delivering an executed counterpart of this Agreement by telefacsimile or
other electronic method of transmission also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement. The foregoing shall apply to each other Loan Document mutatis
mutandis.
16.6. REVIVAL AND REINSTATEMENT OF OBLIGATIONS. If the incurrence or
payment of the Obligations by Borrower or the transfer to the Lender Group of
any property should for any reason subsequently be declared to be void or
voidable under any state or federal law relating to creditors' rights, including
provisions of the Bankruptcy Code relating to fraudulent conveyances,
preferences, or other voidable or recoverable payments of money or transfers of
property (each, a "Voidable Transfer"), and if the Lender Group is required to
repay or restore, in whole or in part, any such Voidable Transfer, or elects to
do so upon the reasonable advice of its counsel, then, as to any such Voidable
Transfer, or the amount thereof that the Lender Group is
53
required or elects to repay or restore, and as to all reasonable costs,
expenses, and attorneys fees of the Lender Group related thereto, the liability
of Borrower automatically shall be revived, reinstated, and restored and shall
exist as though such Voidable Transfer had never been made.
16.7. CONFIDENTIALITY. (a) Administrative Agent and Lenders each
individually (and not jointly or jointly and severally) agree that material,
non-public information regarding Borrower and its Subsidiaries, their
operations, assets, and existing and contemplated business plans shall be
treated by Administrative Agent and the Lenders in a confidential manner, and
shall not be disclosed by Administrative Agent and the Lenders to Persons who
are not parties to this Agreement, except: (i) to attorneys for and other
advisors, accountants, auditors, and consultants to any member of the Lender
Group, (ii) to Subsidiaries, Affiliates of any member of the Lender Group
(including the Bank Product Providers), provided that any such Subsidiary or
Affiliate shall have agreed to receive such information hereunder subject to the
terms of this Section 16.7, (iii) as may be required by statute, decision, or
judicial or administrative order, rule, or regulation, (iv) as may be agreed to
in advance by Borrower or as requested or required by any Governmental Authority
pursuant to any subpoena or other legal process, (v) as to any such information
that is or becomes generally available to the public (other than as a result of
prohibited disclosure by Administrative Agent or the Lenders), (vi) in
connection with any assignment, participation or pledge of any Lender's interest
under this Agreement, provided that any such assignee, participant, or pledgee
shall have agreed in writing to receive such information hereunder subject to
the terms of this Section, and (vii) in connection with any litigation or other
adversary proceeding involving parties hereto which such litigation or adversary
proceeding involves claims related to the rights or duties of such parties under
this Agreement or the other Loan Documents. The provisions of this Section
16.7(a) shall survive for 2 years after the payment in full of the Obligations.
(b) Anything in this Agreement to the contrary notwithstanding,
Administrative Agent may provide information concerning the terms and conditions
of this Agreement and the other Loan Documents to loan syndication and pricing
reporting services.
16.8. LENDER GROUP EXPENSES. Borrower agrees to pay any and all Lender
Group Expenses promptly after demand therefor by Administrative Agent and agrees
that its obligations contained in this Section 16.8 shall survive payment or
satisfaction in full of all other Obligations.
16.9. INTEGRATION. This Agreement, together with the other Loan Documents,
reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.
16.10. NO NOVATION. This Agreement does not extinguish the obligations for
the payment of money outstanding under the Original Credit Agreement or
discharge or release the obligations under the Original Credit Agreement or the
lien or priority of any mortgage, pledge, security agreement or any other
security therefor. Nothing herein contained shall be construed as a substitution
or novation of the obligations outstanding under the Original Credit Agreement
or instruments securing the same, which shall remain in full force and effect,
except as modified hereby or by instruments executed concurrently herewith.
Nothing expressed or implied in this Agreement shall be construed as a release
or other discharge of the Borrower under the Original Credit Agreement from any
of their obligations and liabilities as a "Borrower" thereunder; provided,
however, that any Default or Event of Default existing under the Original Credit
Agreement is hereby waived as of the Closing Date, except to the extent such
Default or Event of Default constitutes a Default or Event of Default as of the
Closing Date under this Agreement, as amended and restated on the Closing Date.
The Borrower hereby (i) confirms and agrees that, except as modified hereby or
by instruments executed concurrently herewith, each Loan Document to which it is
a party is, and shall continue to be, in full force and effect and is hereby
ratified and confirmed in all respects except that on and after the Closing Date
of this Agreement all references in any such Loan Document to "the Credit
Agreement," "thereto," "thereof," "thereunder" or words of like import referring
to the Original Credit Agreement shall mean the Original Credit Agreement as
amended and restated by this Agreement and (ii) confirms and agrees that to the
extent that any
54
such Loan Document purports to assign or pledge to the Administrative Agent a
security interest in or lien on, any collateral as security for the obligations
of the Loan Parties from time to time existing in respect of the Original Credit
Agreement and the Loan Documents, such pledge, assignment and/or grant of the
security interest or lien is hereby ratified and confirmed in all respects.
55
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered as of the date first above written.
TRANSTECHNOLOGY CORPORATION,
a Delaware corporation, as Borrower
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President, CFO and Treasurer
XXXXX FARGO FOOTHILL, INC.,
a California corporation, as
Administrative Agent and as a Lender
By: /s/ Xxxxxx X. Xxxx
------------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President
AC FINANCE LLC,
a Delaware limited liability company,
as Co-Lead Arranger
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Managing Director
ALLIED CAPITAL CORPORATION
a Maryland corporation, as Term Loan B
Lender
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Managing Director
56
TABLE OF CONTENTS
Page
----
1. DEFINITIONS AND CONSTRUCTION....................................... 1
1.1. Definitions............................................... 1
1.2. Accounting Terms.......................................... 1
1.3. Code...................................................... 1
1.4. Construction.............................................. 1
1.5. Schedules and Exhibits.................................... 2
2. LOAN AND TERMS OF PAYMENT.......................................... 2
2.1. Revolver Advances......................................... 2
2.2. Term Loans................................................ 3
2.3. Borrowing Procedures and Settlements...................... 4
2.4. Payments.................................................. 9
2.5. Overadvances.............................................. 12
2.6. Interest Rates and Letter of Credit Fee: Rates,
Payments, and Calculations................................ 13
2.7. Cash Management........................................... 14
2.8. Crediting Payments........................................ 15
2.9. Designated Account........................................ 15
2.10. Maintenance of Loan Account; Statements of Obligations.... 15
2.11. Fees...................................................... 15
2.12. Letters of Credit......................................... 15
2.13. LIBOR Option.............................................. 18
2.14. Capital Requirements...................................... 20
2.15. Intentionally Omitted..................................... 20
2.16. Securitization............................................ 21
3. CONDITIONS; TERM OF AGREEMENT...................................... 21
3.1. Conditions Precedent to the Initial Extension of Credit... 21
3.2. Conditions Precedent to all Extensions of Credit.......... 21
3.3. Term...................................................... 22
3.4. Effect of Termination..................................... 22
i
TABLE OF CONTENTS
(continued)
Page
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3.5. Early Termination by Borrower............................. 22
4. REPRESENTATIONS AND WARRANTIES..................................... 23
4.1. No Encumbrances........................................... 23
4.2. Eligible Accounts......................................... 23
4.3. Eligible Inventory........................................ 23
4.4. Equipment................................................. 23
4.5. Location of Inventory and Equipment....................... 23
4.6. Inventory Records......................................... 23
4.7. Jurisdiction of Organization; Location of Chief Executive
Office; Organizational Identification Number; Commercial
Tort Claims............................................... 23
4.8. Due Organization and Qualification; Subsidiaries.......... 24
4.9. Due Authorization; No Conflict............................ 24
4.10. Litigation................................................ 25
4.11. No Material Adverse Change................................ 25
4.12. Fraudulent Transfer....................................... 25
4.13. Employee Benefits......................................... 25
4.14. Environmental Condition................................... 25
4.15. Intellectual Property..................................... 26
4.16. Leases.................................................... 26
4.17. Deposit Accounts and Securities Accounts.................. 26
4.18. Complete Disclosure....................................... 26
4.19. Indebtedness.............................................. 26
4.20. Taxes and Payments........................................ 26
4.21. Labor Matters............................................. 27
4.22. Material Contracts........................................ 27
4.23. Inactive Subsidiaries..................................... 27
4.24. OFAC; Anti-Terrorism Laws................................. 27
5. AFFIRMATIVE COVENANTS.............................................. 27
5.1. Accounting System......................................... 27
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5.2. Collateral Reporting...................................... 28
5.3. Financial Statements, Reports, Certificates............... 28
5.4. Intentionally Omitted..................................... 28
5.5. Inspection................................................ 28
5.6. Maintenance of Properties................................. 28
5.7. Taxes..................................................... 28
5.8. Insurance................................................. 28
5.9. Location of Inventory and Equipment and Chief Executive
Offices................................................... 29
5.10. Compliance with Laws...................................... 29
5.11. Leases.................................................... 29
5.12. Existence................................................. 29
5.13. Environmental............................................. 29
5.14. Disclosure Updates........................................ 30
5.15. Control Agreements........................................ 30
5.16. Formation of Subsidiaries................................. 30
5.17. Material Contracts........................................ 30
5.18. Government Contracts...................................... 31
5.19. Further Assurances........................................ 31
5.20. Foreign Qualification Certificates........................ 31
6. NEGATIVE COVENANTS................................................. 31
6.1. Indebtedness.............................................. 31
6.2. Liens..................................................... 31
6.3. Restrictions on Fundamental Changes....................... 32
6.4. Disposal of Assets........................................ 32
6.5. Change Name............................................... 32
6.6. Nature of Business........................................ 32
6.7. Prepayments and Amendments................................ 32
6.8. [Intentionally Omitted]................................... 32
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6.9. Consignments.............................................. 32
6.10. Distributions............................................. 33
6.11. Accounting Methods........................................ 33
6.12. Investments............................................... 33
6.13. Transactions with Affiliates.............................. 33
6.14. Use of Proceeds........................................... 33
6.15. Inventory and Equipment with Bailees...................... 33
6.16. Financial Covenants....................................... 34
6.17. Inactive Subsidiaries..................................... 34
6.18. Limitations on Dividends and Other Payment Restrictions
Affecting Subsidiaries.................................... 34
7. EVENTS OF DEFAULT.................................................. 35
8. THE LENDER GROUP'S RIGHTS AND REMEDIES............................. 36
8.1. Rights and Remedies....................................... 36
8.2. Remedies Cumulative....................................... 37
9. TAXES AND EXPENSES................................................. 37
10. WAIVERS; INDEMNIFICATION........................................... 37
10.1. Demand; Protest; etc...................................... 37
10.2. The Lender Group's Liability for Collateral............... 37
10.3. Indemnification........................................... 37
11. NOTICES............................................................ 38
12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER......................... 39
13. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS......................... 40
13.1. Assignments and Participations............................ 40
13.2. Successors................................................ 42
14. AMENDMENTS; WAIVERS................................................ 42
14.1. Amendments and Waivers.................................... 42
14.2. Replacement of Holdout Lender............................. 43
14.3. No Waivers; Cumulative Remedies........................... 44
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15. AGENT; THE LENDER GROUP............................................ 44
15.1. Appointment and Authorization of Administrative Agent..... 44
15.2. Delegation of Duties...................................... 45
15.3. Liability of Administrative Agent......................... 45
15.4. Reliance by Administrative Agent.......................... 45
15.5. Notice of Default or Event of Default..................... 46
15.6. Credit Decision........................................... 46
15.7. Costs and Expenses; Indemnification....................... 46
15.8. Administrative Agent in Individual Capacity............... 47
15.9. Successor Administrative Agent............................ 47
15.10. Lender in Individual Capacity............................. 48
15.11. Withholding Taxes......................................... 48
15.12. Collateral Matters........................................ 50
15.13. Restrictions on Actions by Lenders; Sharing of Payments... 50
15.14. Agency for Perfection..................................... 51
15.15. Payments by Administrative Agent to the Lenders........... 51
15.16. Concerning the Collateral and Related Loan Documents...... 51
15.17. Field Audits and Examination Reports; Confidentiality;
Disclaimers by Lenders; Other Reports and Information..... 51
15.18. Several Obligations; No Liability......................... 52
15.19. Bank Product Providers.................................... 52
15.20. Co-Lead Arrangers......................................... 53
16. GENERAL PROVISIONS................................................. 53
16.1. Effectiveness............................................. 53
16.2. Section Headings.......................................... 53
16.3. Interpretation............................................ 53
16.4. Severability of Provisions................................ 53
16.5. Counterparts; Electronic Execution........................ 53
16.6. Revival and Reinstatement of Obligations.................. 53
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16.7. Confidentiality........................................... 54
16.8. Lender Group Expenses..................................... 54
16.9. Integration............................................... 54
16.10. No Novation............................................... 54
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EXHIBITS AND SCHEDULES
Exhibit A-1 Form of Assignment and Acceptance
Exhibit B-1 Form of Borrowing Base Certificate
Exhibit C-1 Form of Compliance Certificate
Exhibit L-1 Form of LIBOR Notice
Schedule A-1 Administrative Agent's Account
Schedule C-1 Commitments
Schedule D-1 Designated Account
Schedule E-1 Eligible Inventory Locations
Schedule M-1 Material Contracts
Schedule P-1 Permitted Liens
Schedule R-1 Real Property Collateral
Schedule R-2 Remediation Costs
Schedule 1.1 Definitions
Schedule 2.7(a) Cash Management Banks
Schedule 3.1 Conditions Precedent
Schedule 4.5 Locations of Inventory and Equipment
Schedule 4.7(a) States of Organization
Schedule 4.7(b) Chief Executive Offices
Schedule 4.7(c) Organizational Identification Numbers
Schedule 4.7(d) Commercial Tort Claims
Schedule 4.8(b) Capitalization of Borrower
Schedule 4.8(c) Capitalization of Borrower' Subsidiaries
Schedule 4.10 Litigation
Schedule 4.14 Environmental Matters
Schedule 4.15 Intellectual Property
Schedule 4.17 Deposit Accounts and Securities Accounts
Schedule 4.19 Permitted Indebtedness
Schedule 4.20 Taxes
Schedule 4.23 Inactive Subsidiaries
Schedule 5.2 Collateral Reporting
Schedule 5.3 Financial Statements, Reports, Certificates
