EXHIBIT 10.2
EXECUTION COPY
LOAN AGREEMENT
DATED AS OF APRIL 30, 2001
AMONG
▇▇▇▇▇▇▇ JEWELERS, INC.,
AS BORROWER,
THE LENDERS PARTY HERETO,
AND
DDJ CAPITAL MANAGEMENT, LLC,
AS AGENT FOR THE LENDERS
TABLE OF CONTENTS
PAGE
ARTICLE 1 - DEFINITIONS AND ACCOUNTING TERMS..............................................1
Section 1.1. Definitions...................................................................1
Section 1.2. Accounting Terms..............................................................7
ARTICLE 2 - THE LOANS.....................................................................7
Section 2.1. The Tranche B Loans...........................................................7
Section 2.2. Permitted Additional Tranche B Loans..........................................8
Section 2.3. The Tranche C Loan............................................................8
Section 2.4. Overadvances..................................................................8
Section 2.5. Interest on Loans.............................................................9
Section 2.6. Computation of Interest, Etc..................................................9
Section 2.7. Fees and Additional Compensation..............................................9
Section 2.8. Increased Costs, Etc.........................................................10
Section 2.9. Use of Proceeds..............................................................11
ARTICLE 3 - CONDITIONS TO LOANS..........................................................11
Section 3.1. Conditions to Loans..........................................................11
Section 3.2. Conditions to Additional Tranche B Loans.....................................12
ARTICLE 4 - PAYMENT AND REPAYMENT........................................................12
Section 4.1. Voluntary Prepayments........................................................12
Section 4.2. Payment or Other Actions on Non-Business Days................................12
Section 4.3. Method and Timing of Payments................................................13
Section 4.4. Currency.....................................................................13
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES...............................................13
Section 5.1. Corporate Existence, Charter Documents, Etc..................................13
Section 5.2. Principal Place of Business; Location of Records.............................13
Section 5.3. Qualification................................................................13
Section 5.4. Corporate Power..............................................................14
Section 5.5. Valid and Binding Obligations................................................14
Section 5.6. Other Agreements.............................................................14
Section 5.7. Payment of Taxes.............................................................14
Section 5.8. Information..................................................................15
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TABLE OF CONTENTS
(CONTINUED)
Section 5.9. Other Materials Furnished....................................................15
Section 5.10. Stock........................................................................15
Section 5.11. Assets, Licenses, Patents, Trademarks, Etc...................................15
Section 5.12. Litigation...................................................................16
Section 5.13. Pension Plans................................................................16
Section 5.14. Outstanding Indebtedness.....................................................16
Section 5.15. Compliance with Law..........................................................17
Section 5.16. Environmental Matters........................................................17
Section 5.17. Governmental Regulations.....................................................18
Section 5.18. Margin Stock.................................................................18
Section 5.19. Fictitious Business Name.....................................................18
ARTICLE 6 - REPORTS AND INFORMATION......................................................18
Section 6.1. Interim Financial Statements and Reports.....................................18
Section 6.2. Annual Financial Statements..................................................19
Section 6.3. Notice of Default............................................................19
Section 6.4. Notice of Litigation.........................................................19
Section 6.5. Reportable Events............................................................19
Section 6.6. Reports to other Creditors...................................................19
Section 6.7. Communications with Independent Public Accountants...........................20
Section 6.8. Environmental Reports........................................................20
Section 6.9. Miscellaneous................................................................20
ARTICLE 7 - AFFIRMATIVE COVENANTS........................................................20
Section 7.1. Existence and Business.......................................................20
Section 7.2. Taxes and Other Obligations..................................................21
Section 7.3. Maintenance of Properties and Leases.........................................21
Section 7.4. Insurance....................................................................21
Section 7.5. Records, Accounts and Places of Business.....................................21
Section 7.6. Inspection...................................................................22
Section 7.7. Maintenance of Accounts......................................................22
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TABLE OF CONTENTS
(CONTINUED)
ARTICLE 8 - NEGATIVE COVENANTS...........................................................22
Section 8.1. Restrictions on Indebtedness.................................................22
Section 8.2. Restriction on Liens.........................................................22
Section 8.3. Investments..................................................................23
Section 8.4. Dispositions of Assets.......................................................24
Section 8.5. Assumptions, Guaranties, Etc. of Indebtedness of Other Persons...............24
Section 8.6. Mergers, Etc.................................................................24
Section 8.7. Distributions................................................................24
Section 8.8. Sale and Leaseback...........................................................24
Section 8.9. Transactions with Affiliates.................................................24
ARTICLE 9 - EVENTS OF DEFAULT AND REMEDIES...............................................24
Section 9.1. Events of Default............................................................24
Section 9.2. Remedies.....................................................................26
Section 9.3. Distribution of Proceeds.....................................................27
ARTICLE 10 - CONSENTS; AMENDMENTS; WAIVERS; REMEDIES......................................27
Section 10.1. Actions by Lenders...........................................................27
Section 10.2. Actions by Borrower..........................................................28
ARTICLE 11 - SUCCESSORS AND ASSIGNS.......................................................28
Section 11.1. General......................................................................28
Section 11.2. Assignments..................................................................29
Section 11.3. Participations...............................................................29
ARTICLE 12 - THE AGENT....................................................................30
Section 12.1. Authorization and Action.....................................................30
Section 12.2. Agent's Reliance, Etc........................................................31
Section 12.3. Agent as a Lender............................................................31
Section 12.4. Lender Credit Decision.......................................................31
Section 12.5. Indemnification of Agent.....................................................32
Section 12.6. Successor Agent..............................................................32
Section 12.7. Amendment of Article 13......................................................32
ARTICLE 13 - MISCELLANEOUS................................................................33
Section 13.1. Notices......................................................................33
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TABLE OF CONTENTS
(CONTINUED)
Section 13.2. Merger.......................................................................33
Section 13.3. Governing Law; Consent to Jurisdiction.......................................33
Section 13.4. Counterparts.................................................................34
Section 13.5. Expenses and Indemnification.................................................34
Section 13.6. WAIVER OF JURY TRIAL.........................................................35
Section 13.7. Severability.................................................................35
Section 13.8. Headings.....................................................................35
Section 13.9. Confidentiality..............................................................35
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TABLE OF CONTENTS
(CONTINUED)
LIST OF EXHIBITS AND SCHEDULES
Exhibit A Form of Tranche B Note
Exhibit B Form of Tranche C Note
Exhibit C Form of Additional Tranche B Loan Notice
Exhibit D Form of Security Agreement
Exhibit E Form of Opinion of Borrower's Counsel
Exhibit F Form of Assignment and Acceptance Agreement
Schedule I Schedule of Commitment Percentages
Schedule II Schedule of Assignments of Claims
Schedule 5.10 Schedule of Issued and Outstanding Stock
Schedule 5.11(a) Schedule of Permitted Liens
Schedule 5.11(b) Schedule of Licenses, Patents, Copyrights and Trademarks
Schedule 5.13 Schedule of Pension Plans
Schedule 5.14 Outstanding Indebtedness
Schedule 5.16 Environmental Matters
Schedule 5.19 Business Names
Schedule 7.4 Schedule of Insurance
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LOAN AGREEMENT
This LOAN AGREEMENT is entered into as of April 30, 2001 by and among
▇▇▇▇▇▇▇ Jewelers, Inc. (the "Borrower"), the lenders from time to time party
hereto (the "Lenders") and DDJ Capital Management, LLC, a Delaware limited
liability company, as Agent for the Lenders (the "Agent").
Recitals
WHEREAS, on October 2, 1998, the Borrower, financial institution
party thereto and Foothill Capital Corporation, a California Corporation, as
Agent, entered into a Loan and Security Agreement (as amended, modified or
supplemented from time to time the "Senior Loan Agreement"). Pursuant to the
Senior Loan Agreement and related documents, all amounts owing under the Senior
Loan Agreement are secured by liens and security interests in substantially all
of Borrowers assets.
WHEREAS, Borrower now seeks additional loans for working capital
needs, capital expenditures and other general corporate purposes by means of
Tranche B Loan up to a maximum amount of $15,000,000 and a Tranche C Loan
aggregating $14,335,431.01 arising out of the Agent's purchase from various
trade vendors of certain of the Borrower's accounts payable.
WHEREAS, the Lenders have agreed to provide those additional loans to
the Borrower pursuant to the terms of this Agreement, which Agreement was
negotiated on an arm's length basis, in good faith.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto do hereby agree
as follows:
ARTICLE 1 - DEFINITIONS AND ACCOUNTING TERMS
Section 1.1. Definitions In addition to the terms defined elsewhere
in this Agreement, unless otherwise specifically provided herein, the following
terms shall have the following meanings for all purposes when used in this
Agreement, and in any note, agreement, certificate, report or other document
made or delivered in connection with this Agreement:
"Additional Tranche B Loan Notice" shall have the meaning
set forth in Section 2.2(b) hereof.
"Additional Tranche B Loans" shall have the meaning set
forth in Section 2.2(a) hereof.
"Additional Tranche B Loan Amount" shall mean the lesser of
(i) 92% of GOB Value, minus the amount of the Initial Tranche B
Advance, minus any amounts of Additional Tranche B Loans previously
advanced to the Borrower by the Lenders, minus the amount outstanding
under the Senior Loan Agreement or (ii) $15,000,000, minus the amount
of the Initial Tranche B Advance, minus any amounts of Additional
Tranche B Loans previously advanced to the Borrower by the Lenders.
"Affiliate" shall mean (a) any director or officer of the
Borrower and (b) any Person that, directly or indirectly, controls,
is controlled by or is under common control with the Borrower. For
purposes of this definition, "control" of a Person shall mean the
possession, directly or indirectly, of the power to direct or cause
the direction of its management or policies, whether through the
ownership of voting securities, by contract or otherwise. For the
purposes of this Agreement and any other Lender Agreement executed in
connection herewith, DDJ Capital Management shall be deemed not to be
an "Affiliate" of the Borrower.
"Applicable Unused Facility Margin" shall mean an amount
equal to .375% per annum.
"Agent" shall mean DDJ Capital Management, LLC, in its
capacity as agent for the Lenders and its successors, if any in that
capacity.
"Agreement" shall mean this Loan Agreement, as it may be
amended or supplemented from time to time. References to Articles,
Sections, Exhibits, Schedules and the like refer to the Articles,
Sections, Exhibits, Schedules and the like of this Agreement unless
otherwise indicated, as amended and supplemented from time to time.
"Assignment and Acceptance Agreement" shall have the
meaning set forth in Section 11.2(a) hereof.
"Borrower" shall have the meaning set forth in the preamble
of this Agreement.
"Business Day" shall mean any day other than a Saturday,
Sunday or other day on which banking institutions are authorized or
obligated to close in Boston, Massachusetts or Austin, Texas.
"Capitalized Lease" shall mean any lease which is or should
be capitalized on the balance sheet of the lessee in accordance with
generally accepted accounting principles and Statement of Financial
Accounting Standards No. 13.
"Capitalized Lease Obligations" shall mean the amount of
the liability reflecting the aggregate discounted amount of future
payments under all Capitalized Leases calculated in accordance with
generally accepted accounting principles and Statement of Financial
Accounting Standards No. 13.
"Closing Date" shall mean the date on which all of the
conditions set forth in Section 3.1 have been satisfied.
"Commitment Fee" shall mean the fee payable to the Lenders,
in the amount of $300,000, which shall be distributed on a pro rata
basis to the Lenders in accordance with the Lenders' respective
Commitment Percentages for the Tranche B Loans.
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"Commitment Percentage" shall mean as to each Lender its
percentage interest in the Tranche B Loans and the Tranche C Loans as
set forth on Schedule 1 hereto.
"Consolidated" and "Consolidating," and "consolidated" and
"consolidating" when used with reference to any term, mean that term
(or the terms "combined" and "combining", as the case may be, in the
case of partnerships, joint ventures and Affiliates) as applied to
the accounts of the Borrower (or other specified Person).
"Credit Participants" shall have the meaning set forth in
Section 11.3 hereof.
"Default" shall mean an Event of Default or an event or
condition which with the passage of time or giving of notice, or
both, would be such an Event of Default.
"Default Rate" shall have the meaning set forth in Section
2.5(a) hereof.
"Distribution" shall mean as to any Person: (a) the
declaration or payment of any dividend on or in respect of any shares
of any class of capital stock of such Person, other than dividends
payable solely in shares of common stock of such Person, (b) the
purchase, redemption, or other acquisition or retirement of any
shares of any class of capital stock of such Person directly or
indirectly, (c) any other distribution on or in respect of any shares
of any class of capital stock of such Person and (d) any setting
apart or allocating any sum for the payment of any dividend or
distribution, or for the purchase, redemption or retirement of any
shares of capital stock of such Person.
"Environmental Law" means any judgment, decree, order, law,
license, rule or regulation pertaining to environmental matters, or
any federal, state, county or local statute, regulation, ordinance,
order or decree relating to public health, welfare, the environment,
or to the storage, handling, use or generation of hazardous
substances in or at the workplace, worker health or safety, whether
now existing or hereafter enacted.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended from time to time.
"Event of Default" shall mean any of the Events of Default
in Section 9.1 hereof.
"generally accepted accounting principles" or "GAAP" shall
mean generally accepted accounting principles as defined by
controlling pronouncements of the Financial Accounting Standards
Board, as from time to time supplemented and amended.
"GOB Value" shall mean, with respect to Inventory, the
"going out of business: or "net liquidation" value of such Inventory,
expressed as a percentage of such Inventory Cost, as determined by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Retail Partners, LLC, HilCo/Great American LLC, or
one or more other appraisers acceptable to Senior Lenders, Agent and
Borrower.
"Guaranty" or "Guarantee" or "Guaranties" shall include any
arrangement whereby a Person is or becomes liable in respect of any
Indebtedness or other obligation of another and any other arrangement
whereby credit is extended to another obligor on the basis of any
promise of a guarantor, whether that promise is expressed in terms of
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an obligation to pay the Indebtedness of such obligor, or to purchase
or lease assets under circumstances that would enable such obligor to
discharge one or more of its obligations, or to maintain the capital,
the working capital, solvency or general financial condition of such
obligor, whether or not such arrangement is listed in the balance
sheet of the guarantor or referred to in a footnote thereto.
"Indebtedness" shall mean, as to any Person, all
obligations, contingent and otherwise, which in accordance with
generally accepted accounting principles consistently applied should
be classified upon such Person's balance sheet as liabilities, but in
any event including liabilities secured by any mortgage, pledge,
security interest, lien, charge or other encumbrance existing on
property owned or acquired by such Person whether or not the
liability secured thereby shall have been assumed, letters of credit
open for account, obligations under acceptance facilities,
Capitalized Lease Obligations and all obligations on account of
Guaranties, endorsements and any other contingent obligations in
respect of the Indebtedness of others whether or not reflected on
such balance sheet or in a footnote thereto.
"Initial Tranche B Advance" shall mean an amount equal to
the lesser of (i) 92% of GOB Value, minus the amount outstanding
under the Senior Loan Agreement or (ii) $15,000,000.
"Intercreditor Agreement" shall mean the Intercreditor and
Subordination Agreement of even date herewith among the Senior
Lenders, the Agent and the Lenders.
"Interest Rate" shall mean twenty percent (20%) per annum
through October 31, 2001, and shall increase by one quarter percent
(0.25%) per month thereafter.
"Internal Revenue Code" shall mean the Internal Revenue
Code of 1986, as amended from time to time.
"Inventory" shall mean all present and future inventory in
which Borrower has any interest, including goods held for sale or
lease to be furnished under a contract of service and all of
Borrower's present and future raw materials, work in process,
finished goods, and packing and shipping materials, wherever located.
"Investment" shall mean (a) any stock, evidence of
Indebtedness or other security of a Person (other than Borrower), (b)
any loan, advance, contribution to capital, extension of credit
(except for current trade and customer accounts receivable for
inventory sold or services rendered in the ordinary course of
business and payable in accordance with customary trade terms) to a
Person, and (c) any purchase of (i) stock or other securities of
another Person (other than Borrower) or (ii) any business or
undertaking of another Person (whether by purchase of assets or
securities), any commitment or option to make any such purchase if,
in the case of an option, the aggregate consideration paid for such
option was in excess of $100, or (d) any other investment, in all
cases whether existing on the date of this Agreement or thereafter
made.
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"Lender Agreements" shall mean this Agreement, the Notes,
the Security Agreement, and any other present or future agreement
from time to time entered into between the Borrower and the Agent or
the Lenders in connection with this Agreement, each as from time to
time amended or supplemented, and all statements, reports and
certificates delivered by the Borrower to the Agent or the Lenders in
connection therewith; and "Lender Agreement" means any one of the
agreements described herein.
"Lender Obligations" shall mean all present and future
obligations and Indebtedness of the Borrower owing to the Agent or
the Lenders under this Agreement or any other Lender Agreement,
including, without limitation, the obligations to pay the
Indebtedness from time to time evidenced by the Notes, and
obligations to pay interest, commitment fees, charges, expenses and
indemnification from time to time owed under any Lender Agreement.
"Lenders" shall mean (i) initially, each Lender listed on
the signature pages hereof, (ii) any other Person who becomes a
Successor Lender hereunder in accordance with the terms of Section
11.3 hereof, and (iii) their respective successors.
"Loans" shall mean, collectively, the Tranche B Loans and
the Tranche C Loan.
"Majority Lenders" shall mean, at any time, the Lenders
having made not less than 51% of the outstanding principal amount of
the Loans hereunder, or, if no Loans are outstanding, the Lenders
having aggregate Commitment Percentages of not less than 51%.
"Material Adverse Effect" shall mean a material adverse
effect on the business, properties, assets or condition, financial or
otherwise, of the Borrower, taken as a whole.
"Maturity Date" shall mean June 15, 2002.
"Maximum Additional Tranche B Loan Amount" shall mean the
maximum principal amount of Tranche B Loans made to Borrower pursuant
to Section 2.2 hereof, which amount shall not exceed the lesser of
(i) 92% of the GOB Value, minus the amount outstanding under the
Senior Loan Agreement, minus the Initial Tranche B Advance or (ii)
$15,000,000 minus the Initial Tranche B Advance.
"Maximum Lawful Rate" shall have the meaning set forth in
Section 2.5 hereof.
"Maximum Tranche B Loan Amount" shall mean the maximum
principal amount of the Tranche B Loans, which amount shall not
exceed the lesser of (i) 92% of the GOB Value of the Inventory, minus
the amount outstanding under the Senior Loan Agreement or (ii)
$15,000,000.
"Net Income (Loss)" shall mean, for any fiscal period, the
aggregate net income (or loss) after provision (benefit) for federal,
state, local and foreign income taxes of Borrower, if any, for such
period, determined on a consolidated basis in accordance with GAAP.
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"Notes" shall mean, collectively, the Tranche B Notes
substantially in the form of Exhibit A hereto executed by the
Borrower in favor of each Lender to evidence the Tranche B Loans made
by the Lenders hereunder and the Tranche C Note substantially in the
form of Exhibit B hereto executed by the Borrower in favor of each
Lender to evidence the Tranche C Loan made by the Lenders.
"Overadvance" shall have the meaning set forth in Section
2.4 hereof.
"Pension Plan" shall mean an employee benefit plan or other
plan maintained for the employees of the Borrower as described in
Section 4021(a) of ERISA.
"Permitted Indebtedness" shall mean, with respect to the
Borrower, (i) Indebtedness maturing in less than one year and
incurred in the ordinary course of business for supplies, property,
inventory, equipment, services, taxes or labor or otherwise; (ii)
Indebtedness secured by Purchase Money Liens; (iii) deferred taxes
and other expenses incurred in the ordinary course of business; and
(iv) any other Indebtedness in an amount not to exceed $100,000 in
the aggregate at any one time.
"Person" shall mean an individual, corporation,
partnership, joint venture, association, estate, joint stock company,
trust, organization, business, or a government or agency or political
subdivision thereof.
"Purchase Money Liens" shall mean liens on any item of
equipment acquired after the date of this Agreement in the ordinary
course of the Borrower's business consistent with past practices;
provided that (i) each such lien shall attach only to the property to
be acquired, (ii) a description of the property so acquired is
furnished to the Agent, (iii) such description is in form and
substance satisfactory to the Agent and (iv) the debt incurred in
connection with such acquisitions shall not exceed $100,000 in the
aggregate for the Borrower in any 12-month period.
"Reportable Event" shall mean an event reportable to the
Pension Benefit Guaranty Corporation under Section 4043 of Title IV
of ERISA (other than events for which the notice requirements have
been waived under applicable regulations).
"▇▇▇▇▇▇ Jewelers" shall mean ▇▇▇▇▇▇ Jewelers, Inc., a
Delaware Corporation.
"Security Agreement" shall mean the Security Agreement,
substantially in the form of Exhibit D, delivered pursuant to Section
3.1 hereof, as modified, supplemented or restated from time to time.
"Senior Lenders" shall mean the financial institutions
party to the Senior Loan Agreement, or any successor or assign or any
replacement lender pursuant to the Senior Loan Agreement.
"Senior Loan Agreement" shall mean the Loan and Security
Agreement, dated as of October 2, 1998, by and among the Borrower,
the financial institutions listed on the signature pages thereof and
6
Foothill Capital Corporation, as Agent, as modified, amended or
supplemented through the date hereof.
"Tranche B Loan Commitment" shall mean as to any Lender,
the commitment of such Lender to make its pro rata share of the
Tranche B Loans as set forth on Schedule 1 to this Agreement.
"Tranche B Loans" shall mean the Initial Tranche B Loans
and any Additional Tranche B Loans made by the Lenders to the
Borrower under Article 2 hereof.
"Tranche C Loan" shall mean the $14,335,431.01 Tranche C
Loan arising out of the Lender's purchase from various trade vendors
of certain of the Borrower's accounts payable, each of which is
evidenced by an Assignment of Claim.
"Tranche B Note" shall mean the Tranche B Note
substantially in the form of Exhibit A hereto executed by the
Borrower in favor of each Lender to evidence the Tranche B Loans.
"Tranche C Note" shall mean the Tranche C Note
substantially in the form of Exhibit B hereto executed by the
Borrower in favor of each Lender to evidence the Tranche C Loan.
"UCC" shall mean the Massachusetts Uniform Commercial Code,
Massachusetts General Laws c. 106, as amended from time to time.
Section 1.2. Accounting Terms. All accounting terms used and not
defined in this Agreement shall be construed in accordance with generally
accepted accounting principles consistently applied, and all financial data
required to be delivered hereunder shall be prepared in accordance with such
principles.
ARTICLE 2 - THE LOANS
Section 2.1. The Tranche B Loans.
(a) Subject to the terms and conditions of this Agreement, including
satisfaction of the conditions set forth in Section 3.1, on the Closing Date,
each Lender, to severally and not jointly, agrees to advance the Initial Tranche
B Advance on a pro rata basis in accordance with its Tranche B Loan Commitment.
On the Closing Date, the Borrower shall execute and deliver to each Lender a
Tranche B Note to evidence the Tranche B Loan made by such Lender to the
Borrower hereunder.
(b) The Tranche B Loans shall mature on the Maturity Date and shall
be repaid on that date, together with all outstanding principal, accrued and
unpaid interest and other fees and charges hereunder.
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Section 2.2. Permitted Additional Tranche B Loans.
(a) At any time after the Closing Date, the Borrower may request an
advance (the "Additional Tranche B Loan") of the Additional Tranche B Loan
Amount in principal amounts of not less than $1,000,000 or multiple integrals
thereof so long as the Additional Tranche B Loan Amount and the Initial Tranche
B Advance outstanding does not exceed the Maximum Tranche B Term Loan Amount.
(b) The Borrower shall deliver to the Agent, with a copy to each
Lender, a written notice (effective upon receipt) (each an "Additional Tranche B
Loan Notice") at least three (3) days prior to the date of any Additional
Tranche B Loan. Each Additional Tranche B Loan Notice shall be in substantially
the form of the attached Exhibit C. The Agent will promptly notify each Lender
of receipt by the Agent of the Additional Tranche B Loan Notice. Not later than
2:00 p.m. (Boston Time) on the date of the requested Additional Tranche B Loan,
each Lender will make available to the Agent in immediately available funds such
Lender's Tranche B Loan Commitment Percentage of such Additional Tranche B Loan.
After the Agent's receipt of such funds, and satisfaction of the terms and
conditions set forth in Section 3.2 hereof, the Agent will make such Additional
Tranche B Loan amounts available to the Borrower in immediately available funds
by depositing the amount in such account as the Borrower may from time to time
designate to the Agent in writing. On the date of each Additional Tranche B
Loan, the Borrower shall execute and deliver to each Lender a Tranche B Note to
evidence the Additional Tranche B Loan made hereunder.
Section 2.3. The Tranche C Loan.
(a) Subject to the terms and conditions of this Agreement, including
satisfaction of the conditions set forth in Section 3.1 on the Closing Date, the
Borrower shall execute and deliver to each Lender a Tranche C Note to evidence
the indebtedness owed to such Lender as a result of the Lender's purchase of
certain of the Borrower's accounts payable from various trade vendors of the
Borrower, each of which is evidenced by an Assignment of Claim.
(b) On the Closing Date, the Lenders and the Borrower's rights and
obligations set forth in each of the Assignment of Claim agreements listed on
the attached Schedule II shall be extinguished in their entirety.
(c) The Tranche C Loan shall mature on the Maturity Date and shall be
repaid on that date, together with all outstanding principal, accrued interest
and unpaid and other fees and charges hereunder.
Section 2.4. Overadvances
(a) The Lenders are hereby authorized, (i) after the occurrence of an
Event of Default or (ii) if the Lenders have advanced Tranche B Loans in an
amount greater than the Maximum Tranche B Loan Amount, to make additional
Tranche B loans (an "Overadvance") to the Borrower if the Lenders determine, in
their reasonable business judgment, that such Overadvance is necessary or
desirable, provided, however, that nothing herein shall create an obligation on
8
the Lenders to make an Overadvance and any such Overadvance shall be at the sole
and absolute discretion of the Lenders.
(b) The Borrower, within 30, 60 or 90 days or such longer period, as
determined by the Agent (in its sole and absolute discretion) at the time such
Overadvance is made to the Borrower, shall pay the Senior Lenders under the
Senior Loan Agreement the amount of such Overadvance. Any Overadvance shall bear
interest at the applicable Interest Rate, plus the Default Rate.
Section 2.5. Interest on Loans
(a) Interest shall accrue on the unpaid principal balance of the
Loans from time to time outstanding at a rate per annum equal to the applicable
Interest Rate. Interest on the Loans shall be paid monthly in arrears on the
first Business Day of each month commencing June 1, 2001, and continuing until
the Notes shall have been paid in full. Notwithstanding the foregoing, upon the
occurrence and during the continuance of any Event of Default, interest shall
accrue on the unpaid principal balance of the Loans at the applicable Interest
Rate, plus 2% per annum (the "Default Rate") and shall be payable from time to
time on a monthly basis, or at the option of the Majority Lenders, on demand.
(b) Notwithstanding anything to the contrary set forth in this
Section 2.5, if a court of competent jurisdiction determines a final order that
the rate of interest payable hereunder exceeds the highest rate of interest
permissible under law (the "Maximum Lawful Rate"), then so long as the Maximum
Lawful Rate would be so exceeded, the value of interest payable hereunder shall
be equal to the Maximum Lawful Rate.
Section 2.6. Computation of Interest, Etc. Interest under the Loans
shall be computed on the basis of a 360-day year for the number of days actually
elapsed. No interest payment or interest rate charged hereunder shall exceed the
maximum rate authorized from time to time by applicable law. The outstanding
balance of the Notes as reflected on the Agent's records from time to time shall
be considered correct and binding on the Borrower and the Lenders (absent
manifest error) unless within thirty (30) days after receipt of any notice by
the Agent or any Lender of such outstanding amount, the Borrower or a Lender
notifies the Agent to the contrary.
Section 2.7. Fees and Additional Compensation.
(a) The Borrower shall pay to the Agent on the Closing Date, the
Closing Fee, which shall be fully earned as of the Closing Date.
(b) As additional compensation for the Tranche B Loans, Borrower
agrees to pay to Agent, for the ratable benefit of such Lenders based on the
amount of such Lender's unused Commitment Percentages, in arrears, on the first
Business Day of each month, compensation for Borrower's non-use of available
funds in an amount equal to the Applicable Unused Facility Margin of the
difference between (x) the Maximum Tranche B Loan Amount and (y) the average for
the period of daily closing balances of Tranche B Loans outstanding for the
period for which such compensation is due.
9
Section 2.8. Increased Costs, Etc.
(a) Anything herein to the contrary notwithstanding, if any changes
in present or future applicable law (which term "applicable law," as used in
this Agreement, includes statutes and rules and regulations thereunder and
interpretations thereof by any competent court or by any governmental or other
regulatory body or official charged with the administration or the
interpretation thereof and requests, directives, instructions and notices at any
time or from time to time heretofore or hereafter made upon or otherwise issued
to any Lender by any central bank or other fiscal, monetary or other authority,
whether or not having the force of law), including without limitation any change
according to a prescribed schedule of increasing requirements, whether or not
known or in effect as of the date hereof, shall (i) subject such Lender to any
tax, levy, impost, duty, charge, fee, deduction or withholding of any nature
with respect to this Agreement or the payment to such Lender of any amounts due
to it hereunder, or (ii) materially change the basis of taxation of payments to
such Lender of the principal of or the interest on the Loans or any other
amounts payable to such Lender hereunder, or (iii) impose or increase or render
applicable any special or supplemental deposit or reserve or similar
requirements or assessment against assets held by, or deposits in or for the
account of, or any liabilities of, or loans by an office of such Lender in
respect of the transactions contemplated herein, or (iv) impose on such Lender
any other condition or requirement with respect to this Agreement or any Loan,
and the result of any of the foregoing is (A) to increase the cost to such
Lender of making, funding or maintaining all or any part of the Loans or its
commitment hereunder, or (B) to reduce the amount of principal, interest or
other amount payable to such Lender hereunder, or (C) to require such Lender to
make any payment or to forego any interest or other sum payable hereunder, the
amount of which payment or foregone interest or other sum is calculated by
reference to the gross amount of any sum receivable or deemed received by such
Lender from the Borrower hereunder, then, and in each such case not otherwise
provided for hereunder, the Borrower will upon demand made by such Lender
promptly following such Lender's receipt of notice pertaining to such matters
accompanied by calculations thereof in reasonable detail, pay to such Lender
such additional amounts as will be sufficient to compensate such Lender for such
additional cost, reduction, payment or foregone interest or other sum; provided
that the foregoing provisions of this sentence shall not apply in the case of
any additional cost, reduction, payment or foregone interest or other sum
resulting from any taxes charged upon or by reference to the overall net income,
profits or gains of any Lender. In determining the additional amounts payable
hereunder, the Lenders may use any reasonable method of averaging, allocating or
attributing such additional costs, reductions, payments, foregone interest or
other sums among their respective customers.
(b) Anything herein to the contrary notwithstanding, if, after the
date hereof, any Lender shall have determined that any present or future
applicable law, rule, regulation, guideline, directive or request (whether or
not having force of law), including without limitation any change according to a
prescribed schedule of increasing requirements, whether or not known or in
effect as of the date hereof, regarding capital requirements for banks or bank
holding companies generally, or any change therein or in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by such Lender with any of the foregoing, either imposes a requirement upon such
Lender to allocate additional capital resources or increases such Lender's
10
requirement to allocate capital resources or such Lender's commitment to make,
or to such Lender's maintenance of, the Loans hereunder, which has or would have
the effect of reducing the return on such Lender's capital to a level below that
which such Lender could have achieved (taking into consideration such Lender's
then existing policies with respect to capital adequacy and assuming full
utilization of such Lender's capital) but for such applicability, change,
interpretation, administration or compliance, by any amount deemed by such
Lender to be material, such Lender shall promptly after its determination of
such occurrence give notice thereof to the Borrower. In such event commencing on
the date of such notice (but not earlier than the effective date of any such
applicability, change, interpretation, administration or compliance), the fees
payable hereunder shall increase by an amount which will, in such Lender's
reasonable determination, evidenced by calculations in reasonable detail
furnished to the Borrower, compensate such Lender for such reduction, such
Lender's determination of such amount to be conclusive and binding upon the
Borrower, absent manifest error. In determining such amount, such Lender may use
any reasonable methods of averaging, allocating or attributing such reduction
among its customers.
Section 2.9. Use of Proceeds. The proceeds of the Tranche B Loans
shall be used by the Borrower for general operating and working capital purposes
of the Borrower in the ordinary course of business.
ARTICLE 3 - CONDITIONS TO LOANS
Section 3.1. Conditions to Loans . The Lenders' obligations to make
the Loans shall be subject to the fulfillment by the Borrower with its
agreements contained in this Agreement, and to the condition precedent that the
Lenders shall have received each of the following, in form and substance
satisfactory to the Agent and its counsel:
(i) The execution and delivery of Amendment Number Six to
the Senior Loan Agreement.
(ii) The execution and delivery of the Intercreditor
Agreement.
(iii) The Notes duly executed by the Borrower.
(iv) A copy of the resolutions of the Board of Directors of
the Borrower authorizing the execution, delivery and performance of
this Agreement, the Notes and the other Lender Agreements to which
the Borrower is a party, certified by the Secretary or an Assistant
Secretary of the Borrower (which certificate shall state that such
resolutions are in full force and effect).
(v) A certificate of the Secretary or an Assistant
Secretary of the Borrower certifying the name and signatures of the
officers of the Borrower authorized to sign this Agreement, the Notes
the other Lender Agreements to which the Borrower is a party and the
other documents to be delivered by the Borrower hereunder.
(vi) Certificates of legal existence and corporate good
standing for the Borrower of recent date issued by the appropriate
state governmental authority.
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(vii) The opinion of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP, special counsel
to the Borrower, dated the date hereof, in substantially the form of
Exhibit E attached hereto.
(viii) A certificate of a duly authorized officer of the
Borrower, dated as of the date hereof, to the effect that all
conditions precedent on the parts of the Borrower to the execution
and delivery hereof and the making of the Loans have been satisfied.
(ix) Delivery of the Security Agreement.
(x) Such other documents, certificates and opinions as the
Agent or the Lenders may reasonably request.
Section 3.2. Conditions to Additional Tranche B Loans . In the event
that the Lenders make Additional Tranche B Loans in accordance with Section 2.2
hereof, the Borrower shall satisfy, at or before the making of each Additional
Tranche B Loan, all of the following conditions precedent, unless waived by the
Lenders in their sole and absolute discretion:
(a) The representations and warranties herein and those made by or on
behalf of the Borrower in any other Lender Agreement shall be correct as of the
date on which any Additional Tranche B Loan is made, with the same effect as if
made at and as of such time.
(b) On the date of the issuance of any Additional Tranche B Loan
hereunder (other than an Overadvance made by the Lenders in accordance with
Section 2.4 hereof), there shall exist no Default.
(c) The making of the requested Additional Tranche B Loans shall not
be prohibited by any law or governmental order or regulation applicable to the
Lenders or to the Borrower, and all necessary consents, approvals and
authorizations of any Person for any such Additional Tranche B Loan shall have
been obtained.
ARTICLE 4 - PAYMENT AND REPAYMENT
Section 4.1. Voluntary Prepayments.
(a) The Borrower may at any time voluntarily prepay to the Agent, for
the ratable accounts of the Lenders, all or a part of the Loans outstanding,
provided that such prepayments shall be in a minimum amount of $500,000 and
integral, if in excess of such amount, in multiples of $100,000 in excess of
such amount.
(b) All prepayments on the Loans pursuant to this Section 4.1 shall
be applied first, to fees and reimbursable expenses of the Agent then due and
payable pursuant to any of the Lender Agreements; second, to interest then
accrued but unpaid on the Tranche B Loans; third, to the principal balance of
the Tranche B Loans (in inverse chronological order) until the same shall have
been repaid in full; fourth, to interest then accrued but unpaid on the Tranche
C Loan; and fifth, to the principal balance of the Tranche C Loan.
Section 4.2. Payment or Other Actions on Non-Business Days . Whenever
any payment to be made hereunder shall be stated to be due on a day other than a
Business Day, such payment shall be made on the next succeeding Business Day,
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and such extension of time shall in such case be included in the computation of
payment of interest or fees, as the case may be. In the case of any other action
the last day for performance of which shall be a day other than a Business Day,
the date for performance shall be extended to the next succeeding Business Day.
Section 4.3. Method and Timing of Payments. The Borrower shall make
each payment to be made by it hereunder not later than 2:00 p.m. Boston time on
the day when due in lawful money of the United States to the Agent at its
address set forth in Section 13.1 in immediately available funds. For purposes
of computing interest and fees as of any date, all payments shall be deemed
received on the day of receipt of immediately available funds therefor prior to
2:00 p.m. Boston time. Payments received after 2:00 p.m. Boston time on any
Business Day shall be deemed to have been received on the following Business
Day.
Section 4.4. Currency. All payments and prepayments provided for
under this Agreement shall be made in lawful currency of the United States of
America in immediately available funds.
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES
In order to induce the Agent and the Lenders to enter into this
Agreement and to induce the Lenders to make the Loans as contemplated hereby,
the Borrower hereby makes the following representations and warranties:
Section 5.1. Corporate Existence, Charter Documents, Etc. The
Borrower is a corporation validly organized, legally existing and in good
standing under the laws of the jurisdiction in which it is organized and has
corporate power to own its properties and conduct its business as now conducted
and as proposed to be conducted by it. Copies of the Certificate of
Incorporation and by-laws of the Borrower have been delivered to the Lenders and
are true, accurate and complete as of the date hereof.
Section 5.2. Principal Place of Business; Location of Records. The
principal place of business of the Borrower is as set forth on Exhibit A to the
Security Agreement, and the Borrower has had no other principal place of
business during the last twelve months. All of the books and records are true
and complete copies thereof relating to the accounts and contracts of the
Borrower and will be kept at the location set forth in Exhibit A to the Security
Agreements.
Section 5.3. Qualification. The Borrower is duly qualified, licensed
and authorized to do business and is in good standing as a foreign corporation
in each jurisdiction where the conduct of its business requires it to be
qualified, except where the failure to so qualify would not have a Material
Adverse Effect on the Borrower's financial condition, results of operations or
business, or the rights of Lenders in the Collateral (as defined in the Security
Agreements).
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Section 5.4. Corporate Power. The execution, delivery and performance
of this Agreement, the Notes and all other Lender Agreements and other documents
delivered or to be delivered by the Borrower to the Agent or the Lenders, and
the incurrence of Indebtedness to the Lenders hereunder or thereunder, now or
hereafter owing:
(a) are within the corporate power of the Borrower and have been duly
authorized by all necessary corporate action;
(b) do not require any approval or consent of, or filing with, any
governmental agency or other Person (or such approvals and consents have been
obtained and delivered to the Lenders) and are not in contravention of law or
the terms of its charter documents or By-Laws or any amendment thereof; and
(c) do not and will not
(i) result in a breach of or constitute a default under any
indenture or loan or credit agreement or any other agreement, lease
or instrument to which the Borrower is a party or by which the
Borrower or any of its properties are bound or affected,
(ii) result in, or require, the creation or imposition of
any mortgage, deed of trust, pledge, lien, security interest or other
charge or encumbrance of any nature on any property now owned or
hereafter acquired by the Borrower, except as provided in the Lender
Agreements, or
(iii) result in a violation of or default under any law,
rule, regulation, order, writ, judgment, injunction, decree,
determination or award having applicability to the Borrower or to any
of its properties.
Section 5.5. Valid and Binding Obligations This Agreement, the Notes
and all the other Lender Agreements executed in connection herewith and
therewith constitute, or will constitute when delivered, the valid and binding
obligations of the Borrower, enforceable in accordance with their respective
terms, except as the enforceability thereof may be subject to bankruptcy,
insolvency, moratorium and other laws affecting the rights and remedies of
creditors and secured parties and to the exercise of judicial discretion in
accordance with general equitable principles.
Section 5.6. Other Agreements. The Borrower is not a party to any
indenture, loan or credit agreement, or any lease or other agreement or
instrument, or subject to any charter or corporate restriction, which is likely
to have a Material Adverse Effect, or which restricts the ability of the
Borrower to carry out any of the provisions of this Agreement, the Notes or any
of the Lender Agreements executed in connection herewith and therewith.
Section 5.7. Payment of Taxes. All tax returns required to be filed
by the Borrower have been properly prepared, executed and filed. All taxes,
assessments, fees and other governmental charges upon the Borrower or upon any
of its properties, income, sales or franchises which are shown thereon as due
and payable have been paid. The reserve and provisions for taxes, if any, on the
14
books of the Borrower are adequate for all open years and for its current fiscal
period. The Borrower does not know of any proposed additional assessment or
basis for any materials assessment for additional taxes (whether or not reserved
against). The federal income tax liabilities of the Borrower have been finally
determined by the Internal Revenue Service, or the time for audit has expired,
for all fiscal periods ending on or prior to May 31, 1997 (except if Borrower
utilizes net operating losses for tax years prior to such date, those tax years
may be reopened by the Internal Revenue Service), all such liabilities
(including deficiencies assessed following audit) have been satisfied.
Section 5.8. Information. The Borrower has furnished to Lenders as of
the date of this Agreement the following financial statements (the "Financials")
of the Borrower: (i) audited consolidated balance sheets as of, and consolidated
statements of earnings, changes in consolidated shareholders' equity and changes
in consolidated cash flow for the fiscal year ended June 3, 2000, and (ii)
unaudited consolidated balance sheets as of the end of the most recent fiscal
quarter ending prior to the Closing Date and the related unaudited consolidated
statements of earnings, changes in shareholders' equity and changes in
consolidated cash flow for the three months then ended. The Financials fairly
present, in all material respects, the financial condition of the Borrower as at
the dates thereof and the results of operations for the periods indicated
(subject, in the case of unaudited financial statements, to normal year-end
adjustments), and such financial statements have been prepared in conformity
with GAAP consistently applied throughout the periods involved (except for
omission of notes to the unaudited financials).
Section 5.9. Other Materials Furnished. No written information,
exhibits, memoranda or reports furnished to the Lenders by or on behalf of the
Borrower in connection with the negotiation of this Agreement contains, when
taken together with all other information supplied by the Borrower to the Agent,
any material misstatement of fact or omits to state a material fact necessary to
make the statements contained therein not misleading, in light of the
circumstances under which it was made. To the extent the Borrower furnishes any
projections of the financial position and results of operations of the Borrower
for, or as at the end of, certain future periods, such projections were
believed, at the time furnished, to be reasonable, have been or will have been
prepared on a reasonable basis and in good faith by the Borrower, and have been
or will be based on assumptions believed by the Borrower to be reasonable at the
time made and upon the best information then reasonably available to the
Borrower.
Section 5.10. Stock. There are presently issued by the Borrower the
shares of capital stock indicated on Schedule 5.10. The Borrower has received
the consideration for which such stock was authorized to be issued and have
otherwise complied with all legal requirements relating to the authorization and
issuance of shares of stock and all such shares are validly issued, fully paid
and non-assessable. The Borrower has no other capital stock of any class
outstanding.
Section 5.11. Assets, Licenses, Patents, Trademarks, Etc.
(a) The Borrower has good and marketable title to, or valid leasehold
interests in, all of its assets, real and personal, including the assets carried
on their books and reflected in the Financial Statements, subject to no liens,
charges or encumbrances, except for (i) liens in favor of the Senior Lenders to
secure amounts outstanding under the Senior Loan Agreement, (ii) liens in favor
of the Agent to secure amounts outstanding hereunder, (iii) liens, charges and
15
encumbrances described in Schedule 5.11(a) and permitted by Section 8.2 hereof,
and (iv) assets sold, abandoned or otherwise disposed of in the ordinary course
of business.
(b) The Borrower owns all material licenses, patents, patent
applications, copyrights, service marks, trademarks, trademark applications, and
trade names necessary to continue to conduct its business as heretofore
conducted by it, now conducted by it and proposed to be conducted by it, each of
which, is listed on Schedule 5.11(a) hereto. To the best knowledge of the
Borrower, the Borrower conducts its business without infringement or claim of
infringement of any license, patent, copyright, service ▇▇▇▇, trademark, trade
name, trade secret or other intellectual property right of others. To the best
knowledge of the Borrower, there is no infringement or claim of infringement by
others of any material license, patent, copyright, service ▇▇▇▇, trademark,
trade name, trade secret or other intellectual property right of Borrower.
Section 5.12. Litigation. Except as set forth in Schedule 5.12, there
is no litigation, at law or in equity, or any proceeding before any federal,
state, provincial or municipal board or other governmental or administrative
agency pending or, to the knowledge of the Borrower, threatened, which involves
a material risk of any judgment or liability which could result in a Material
Adverse Effect, and no judgment, decree, or order of any federal, state,
provincial or municipal court, board or other governmental or administrative
agency has been issued against the Borrower that has or may have a Material
Adverse Effect.
Section 5.13. Pension Plans. Except as set forth in Schedule 5.13, no
employee benefit plan established or maintained by the Borrower or any other
Person that is a member of the same "control group," as the Borrower (a "Pension
Affiliate"), within the meaning of Section 302(f)(6)(b) of ERISA, (including any
multi-employer plan to which the Borrower contributes) which is subject to Part
3 of Subtitle B of Title I of the ERISA, had a material accumulated funding
deficiency (as such term is defined in Section 302 of ERISA) as of the last day
of the most recent fiscal year of such plan ended prior to the date hereof, or
would have had an accumulated funding deficiency (as so defined) on such day if
such year were the first year of such plan to which Part 3 of Subtitle B of
Title I of ERISA applied, and no material liability under Title IV of ERISA has
been, or is expected by the Borrower to be, incurred with respect to any such
plan by the Borrower or any Pension Affiliate. The execution, delivery and
performance by the Borrower of this Agreement and the other Lender Agreements
executed on the date hereof will not involve any prohibited transaction within
the meaning of ERISA or Section 4975 of the Internal Revenue Code. The Borrower
has no Pension Plan other than as described on Schedule 5.13.
Section 5.14. Outstanding Indebtedness. The outstanding amount of
Indebtedness for borrowed money, including Capitalized Lease Obligations and
Guaranties of borrowed money, of the Borrower as of the date hereof, is
correctly set forth in Schedule 5.14 hereto, and said Schedule correctly
describes the credit agreements, guaranties, leases, and other instruments
pursuant to which such Indebtedness has been incurred and all liens, charges and
encumbrances securing such Indebtedness.
16
Section 5.15. Compliance with Law. The Borrower is in compliance with
all statutes, laws, ordinances, regulations, rules or orders of any foreign,
federal, state or local government or any other governmental department or
agency or any self regulatory organization, and with any judgment, decree or
order of any court, applicable to its business or operations except where the
aggregate of all such noncompliance would not have a Material Adverse Effect.
The conduct of the businesses of the Borrower is in conformity with all
securities, commodities, energy, public utility, zoning, building code, health,
OSHA and environmental requirements and all other foreign, federal, state and
local governmental and regulatory requirements and requirements of any self
regulatory organizations, except where the aggregate of all such
non-conformities could not reasonably be expected to have a Material Adverse
Effect. The Borrower has not received any notice to the effect that, or
otherwise been advised that, they are not in compliance with, and the Borrower
does not have any reason to anticipate that any presently existing circumstances
are likely to result in the violation of, any such statute, law, ordinance,
regulation, rule, judgment, decree or order which failure or violation could
reasonably be expected to have a Material Adverse Effect.
Section 5.16. Environmental Matters. Except as set forth in Schedule
5.16:
(a) Neither the Borrower nor any operator of any of its properties is
in violation, or to the Borrower's knowledge is in alleged violation, of any
Environmental Law, which violation would have a Material Adverse Effect.
(b) Neither the Borrower nor any operator of any of its properties
has received notice from any third party, including without limitation any
federal, state, county, or local governmental authority, (i) that it has been
identified as a potentially responsible party under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 as amended
("CERCLA") or any equivalent state law, with respect to any site or location;
(ii) that any hazardous waste, as defined in 42 U.S.C. ss. 6903(5), any
hazardous substances, as defined in 42 U.S.C. ss. 9601(14), any pollutant or
contaminant, as defined in 42 U.S.C. ss. 9601(33), or any toxic substance, oil
or hazardous materials or other chemicals or substances regulated by any
Environmental Laws ("Hazardous Substances") that it has generated, transported
or disposed of, has been found at any site at which a federal, state, county, or
local agency or other third party has conducted or has ordered the Borrower or
another third party or parties (e.g. a committee of potentially responsible
parties) to conduct a remedial investigation, removal or other response action
pursuant to any Environmental Law; or (iii) that it is or shall be a named party
to any claim, action, cause of action, complaint (contingent or otherwise) or
legal or administrative proceeding arising out of any actual or alleged release
or threatened release of Hazardous Substances. For purposes of this Agreement,
"release" means any past or present releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, disposing or
dumping of Hazardous Substances into the environment.
(c) (i) The Borrower is in compliance, in all material respects, with
all provisions of the Environmental Laws relating to the handling,
manufacturing, processing, generation, storage or disposal of any Hazardous
Substances; (ii) to the best of the Borrower's knowledge, no portion of property
owned, operated or controlled by the Borrower has been used for the handling,
manufacturing, processing, generation, storage or disposal of Hazardous
17
Substances except in accordance with applicable Environmental Laws; (iii) to the
best of the Borrower's knowledge, there have been no releases or threatened
releases of Hazardous Substances on, upon, into or from any property owned,
operated or controlled by the Borrower, which releases could have a Material
Adverse Effect; (iv) to the best of the Borrower's knowledge, there have been no
releases of Hazardous Substances on, upon, from or into any real property in the
vicinity of the real properties owned, operated or controlled by the Borrower
which, through soil or groundwater contamination, may have come to be located on
the properties of the Borrower; (v) to the best of the Borrower's knowledge,
there have been no releases of Hazardous Substances on, upon, from or into any
real property formerly but no longer owned, operated or controlled by the
Borrower.
(d) None of the properties of the Borrower is or shall be subject to
any applicable environmental cleanup responsibility law or environmental
restrictive transfer law or regulation by virtue of the transactions set forth
herein and contemplated hereby.
Section 5.17. Governmental Regulations. Neither the Borrower nor any
Affiliate of Borrower is not subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, the Investment Company Act
of 1940, or is a common carrier under the Interstate Commerce Act, or is engaged
in a business or activity subject to any statute or regulation, which regulates
the incurring by the Borrower of Indebtedness for borrowed money, including
statutes or regulations relating to common or contract carriers or to the sale
of electricity, gas, steam, water, telephone or telegraph or other public
utility services.
Section 5.18. Margin Stock. The Borrower does not own any "margin
stock" within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System, or any regulations, interpretations or rulings
thereunder, nor is the Borrower engaged principally or as one of its important
activities in extending credit which is used for the purpose of purchasing or
carrying margin stock.
Section 5.19. Fictitious Business Name. The Borrower does not conduct
any material amount of business under any corporate or fictitious name other
than the corporate name shown on the Borrower's organizational documents, as
disclosed on Schedule 5.19 or as disclosed to Lenders in writing from time to
time.
ARTICLE 6 - REPORTS AND INFORMATION
Section 6.1. Interim Financial Statements and Reports.
(a) Within forty-five (45) days after the end of each fiscal month,
the Borrower shall furnish to the Agent and each Lender (i) unaudited balance
sheet of the Borrower as of the end of such month and, unaudited statement of
income for the Borrower for such monthly period and (ii) an officer's
certificate, pursuant to which such officer certifies that (x) the financial
statements fairly and accurately represent, in all material respects, the
Borrower's financial condition as at the end of and for such month; and (y)
during that particular period, such officer is not aware, to the best of his
knowledge that there has occurred or been a Default or Event of Default under
this Agreement; provided, however, that if any such officer has knowledge that
any Default or Event of Default has occurred during such period, the existence
18
of one and a detailed description of same shall be set forth; and (z) the
exhibits attached to such financial statements shall include detailed
calculations showing compliance with all financial covenants contained in this
Agreement.
(b) The Borrower shall furnish to the Agent all financial reports
provided to the Senior Lenders pursuant to the Senior Loan Agreement, including,
without limitation, the reports furnished to the Senior Lenders to calculate the
Borrower's borrowing base under the Senior Loan Agreement.
Section 6.2. Annual Financial Statements. As soon as available, but
in any event within ninety (90) days after the end of each fiscal year of the
Borrower, the Borrower shall furnish to the Agent and each Lender: (i)
consolidated balance sheets of the Borrower as of the end of such fiscal year
and consolidated statements of income, shareholders' equity and cash flow of the
Borrower for such fiscal year; and (ii) an officer's certificate, pursuant to
which such officer certifies that (x) the financial statements fairly and
accurately represents in all material respects, the Borrower's financial
conditions at the end of that particular accounting period; and (y) during the
particular accounting period such officer is not aware, to the best of his
knowledge, that there has occurred or been a Default or Event of Default under
this Agreement; provided, however, that if any such officer has knowledge that
any Default or Event of Default has occurred during such period, the existence
of one and a detailed description of same shall be set forth; and (z) the
exhibits attached to such financial statements shall include detailed
calculations showing compliance with all financial covenants contained in this
Agreement.
Section 6.3. Notice of Default . As soon as possible, and in any
event within two (2) days after the occurrence of a default or an Event of
Default, the Borrower shall furnish to the Agent and each Lender the statement
of its chief executive officer or chief financial officer setting forth details
of such Event of Default and the action that the Borrower has taken or propose
to take with respect thereto.
Section 6.4. Notice of Litigation. Promptly after the commencement
thereof, the Borrower shall furnish to each Lender written notice of all
actions, suits and proceedings before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
affecting the Borrower, which, if adversely determined, would have a Material
Adverse Effect.
Section 6.5. Reportable Events. At any time that the Borrower has a
Pension Plan, the Borrower shall furnish to the Agent and each Lender, as soon
as possible, but in any event within thirty (30) days after the Borrower knows
or has reason to know that any Reportable Event with respect to any Pension Plan
has occurred, the statement of its chief executive officer or chief financial
officer setting forth the details of such Reportable Event and the action that
the Borrower has taken or proposes to take with respect thereto, together with a
copy of the notice of such Reportable Event to the Pension Benefit Guaranty
Corporation.
Section 6.6. Reports to other Creditors. Promptly after filing the
same, the Borrower shall furnish to the Agent and each Lender copies of any
compliance certificate and other information furnished to any other holder of
the securities (including debt obligations) of the Borrower pursuant to the
terms of any indenture, loan or credit or similar agreement and not otherwise
19
required to be furnished to the Agent or the Lenders pursuant to any other
provision of this Agreement.
Section 6.7. Communications with Independent Public Accountants. At
any reasonable time and from time to time, the Borrower shall provide the Agent
and the Lenders and any agents or representatives of the Lenders access to the
independent public accountants of the Borrower to discuss the Borrower's
financial condition, including, without limitation any recommendations of such
independent public accountants concerning the management, finances, financial
controls or operations of the Borrower. Promptly after the receipt thereof, the
Borrower shall furnish to the Agent and each Lender copies of any written
recommendations concerning the management, finances, financial controls, or
operations of the Borrower received from the Borrower's independent public
accountants.
Section 6.8. Environmental Reports. The Borrower shall furnish to the
Agent and each Lender: (a) not later than seven (7) days after notice thereof,
notice of any enforcement actions, or, to the knowledge of the Borrower,
threatened enforcement actions affecting the Borrower by any governmental agency
related to Environmental Laws; (b) copies, promptly after they are received, of
all orders, notices of responsibility, notices of violation, notices of
enforcement actions, and assessments, and other written communications
pertaining to any such orders, notices, claims and assessments received by the
Borrower from any governmental agency; (c) not later than seven (7) days after
notice thereof, notice of any civil claims or threatened civil claims affecting
the Borrower by any third party alleging any violation of Environmental Laws or
harm to human health or the environment; (d) copies of all cleanup plans, site
assessment reports, response plans, remedial proposals, or other submissions of
the Borrower, other third party (e.g., committee of potentially responsible
parties at a Superfund site), or any combination of same, submitted to a
governmental agency in response to any communication referenced in subsections
(a) and (b) herein simultaneously with their submission to such governmental
agency; and (e) from time to time, on request of the Agent, evidence
satisfactory to the Agent of the Borrower's insurance coverage, if any, for any
environmental liabilities.
Section 6.9. Miscellaneous. The Borrower shall provide the Agent and
the Lenders with such other information as the Agent or the Lenders may from
time to time request respecting the business, properties, prospects, condition
or operations, financial or otherwise, of the Borrower.
ARTICLE 7 - AFFIRMATIVE COVENANTS
On and after the date hereof, until all of the Lender Obligations
shall have been paid in full and the Lenders shall have no commitment hereunder,
the Borrower covenants that it will comply with the following covenants and
provisions:
Section 7.1. Existence and Business. The Borrower will (a) preserve
and maintain its corporate existence and qualify and remain qualified as a
foreign corporation in each jurisdiction in which such qualification is
required, (b) preserve and maintain in full force and effect all material
rights, licenses, patents and franchises, (c) comply in all material respects
with all valid and applicable statutes, rules and regulations necessary for the
conduct of business, and (d) engage only in the businesses which it is
conducting on the date of this Agreement.
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Section 7.2. Taxes and Other Obligations. The Borrower (a) will duly
pay and discharge, or cause to be paid and discharged, before the same shall
become in arrears, all material taxes, assessments and other governmental
charges, imposed upon it and its properties, sales and activities, or upon the
income or profits therefrom, as well as the claims for labor, materials, or
supplies which if unpaid might by law result in a lien or charge upon any of its
properties; provided, however, that the Borrower may contest any such charges or
claims in good faith so long as (i) an adequate reserve therefor has been
established and is maintained if and as required by generally accepted
accounting principles and (ii) no action to foreclose any such lien has been
commenced, and (b) will promptly pay or cause to be paid when due, or in
conformance with customary trade terms (but not later than 60 days from the due
date in the case of trade debt), all material lease obligations, trade debt and
all other Indebtedness incident to its operations, unless (i) such obligations
are being contested in good faith or (ii) an adequate reserve has been
established therefor and is maintained if and as required by generally accepted
accounting principles. The Borrower shall cause all applicable tax returns and
all amounts due thereunder to be filed and paid, as the case may be, in order to
maintain its good standing with the Internal Revenue Service and state, local
and foreign tax authorities.
Section 7.3. Maintenance of Properties and Leases. The Borrower shall
maintain, keep and preserve all of its properties (tangible and intangible) in
good repair and working order, ordinary wear and tear excepted. The Borrower
shall replace and improve its properties as necessary for the conduct of its
business. The Borrower shall comply in all material respects with all
post-petition or assumed pre-petition leases naming it as lessee.
Section 7.4. Insurance. The Borrower (a) will keep its principal
assets that are of an insurable character insured by financially sound and
reputable insurers against loss or damage by fire, explosion or hazards, by
extended coverage in an amount sufficient to avoid co-insurance liability, and
(b) will maintain with financially sound and reputable insurers insurance
against other hazards and risks and liability to persons and property to the
extent and in a manner satisfactory to the Lenders, and in any event as
customary for companies in similar businesses similarly situated; provided,
however, that on prior notice to the Agent and the Lenders it may effect
workmen's compensation insurance through an insurance fund operated by such
state or jurisdiction and may also be a self-insurer with respect to workmen's
compensation and with respect to group medical benefits under any medical
benefit plan; and provided, further, that no such notice will be required as to
any state insurance fund or self-insurance maintained as of the date hereof. On
request of the Agent from time to time, but no more frequently than once every
six months, the Borrower will render to the Agent and the Lenders a statement in
reasonable detail as to all insurance coverage required by this Section 7.4. A
description of the material elements of insurance coverage of the Borrower as of
the date hereof is set forth on Schedule 7.4.
Section 7.5. Records, Accounts and Places of Business. The Borrower
shall maintain comprehensive and accurate records and accounts in accordance
with generally accepted accounting principles consistently applied. The Borrower
shall promptly notify the Agent of (a) any changes in the places of business of
the Borrower and (b) any additional places of business which may arise
hereafter.
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Section 7.6. Inspection. At any reasonable time during normal
business hours and from time to time, the Borrower shall permit the Agent and
each Lender and any of the Lender's agents or representatives to examine and
make copies of and abstracts from the records and books of account of, and visit
the properties of, the Borrower and to discuss the affairs, finances and
accounts of the Borrower with any of their officers or directors and with the
Borrower's independent accountants.
Section 7.7. Maintenance of Accounts. The Borrower shall maintain all
of their depository, operating, concentration and disbursement accounts in a
manner that is consistent with past practices and as disclosed to the Agent on
or prior to the Initial Closing Date.
ARTICLE 8 - NEGATIVE COVENANTS
On and after the date hereof, until all of the Lender Obligations
shall have been paid in full and the Lenders shall have no commitments to make
any loans or advances to the Borrower hereunder, the Borrower covenants that it
will not:
Section 8.1. Restrictions on Indebtedness. Create, incur, suffer or
permit to exist, or assume or guarantee, either directly or indirectly, or
otherwise become or remain liable with respect to, any Indebtedness, except the
following:
(a) Indebtedness outstanding at the date of this Agreement as set
forth on Schedule 5.14; but no refinancing thereof;
(b) Indebtedness of the Borrower to the Senior Lenders under the
Senior Loan Agreement; provided, however, that the Borrower shall be permitted
to refinance the Indebtedness existing under the Senior Loan Agreement only in
the event that the refinancing does not increase the amount of Indebtedness
existing under the Senior Loan Agreement, extend the maturity date of the Senior
Loan Agreement or contain terms or conditions less favorable than the terms and
conditions contained in the Senior Loan Agreement;
(c) Purchase money indebtedness (including Capitalized Leases) to the
extent not incurred or secured by liens (including Capitalized Leases) in
violation of any other provision of this Agreement;
(d) Permitted Indebtedness; and
(e) Indebtedness to the Lenders under this Agreement and under the
other Lender Agreements.
Section 8.2. Restriction on Liens. Create or incur or suffer to be
created or incurred or to exist any encumbrance, mortgage, pledge, lien, charge
or other security interest of any kind upon any of its property or assets of any
character, whether now owned or hereafter acquired, or transfer any of such
property or assets for the purposes of subjecting the same to the payment of
Indebtedness or performance of any other obligation in priority to payment of
its general creditors, or acquire or agree or have an option to acquire any
property or assets upon conditional sale or other title retention agreement,
device or arrangement (including Capitalized Leases) or suffer to exist for a
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period of more than 30 days after the same shall have been incurred any
Indebtedness against it which if unpaid might by law or upon bankruptcy or
insolvency, or otherwise, be given any priority whatsoever over the claims of
its general creditors, or sell, assign, pledge or otherwise transfer for
security any of its accounts, contract rights, general intangibles, or chattel
paper (as those terms are defined in the UCC) with or without recourse;
provided, however, that the Borrower may create or incur or suffer to be created
or incurred or to exist:
(a) existing liens and security interest described in Schedule
5.11(a) hereto;
(b) liens securing the payment of taxes, either not yet overdue or
the validity of which are being contested in good faith by appropriate
proceedings diligently pursued and available to the Borrower and with respect to
which adequate reserves have been set aside on their books;
(c) non-consensual statutory liens (other than liens securing the
payment of taxes) arising in the ordinary course of Borrower's business to the
extent: (i) such liens secure indebtedness which is not overdue or (ii) such
liens secure indebtedness relating to claims or liabilities which are fully
insured and being defended at the sole cost and expense and at the sole risk of
the insurer or being contested in good faith by appropriate proceedings
diligently pursued and available to the Borrower, in each case prior to the
commencement of foreclosure or other similar proceedings and with respect to
which adequate reserves have been set aside on their books;
(d) zoning restrictions, easements, licenses, covenants and other
restrictions affecting the use of real property which do not interfere in any
material respect with the use of such real property or ordinary conduct of the
business of the Borrower as presently conducted thereon or materially impair the
value of the real property which may be subject thereto;
(e) liens in favor of the Agent and the Lenders;
(f) liens in favor of the Senior Lenders;
Nothing contained in this Section 8.2 shall permit the Borrower to
incur any Indebtedness or take any other action or permit to exist any other
condition which would be in contravention of any other provision of this
Agreement.
Section 8.3. Investments. Have outstanding or hold or acquire or make
or commit itself to acquire or make any Investment except the following:
(a) Investments having a maturity of less than one year from the date
thereof by the Borrower in: (i) obligations of the United States of America or
any agency or instrumentality thereof; and (ii) commercial paper which is rated
not less than prime-one or A-1 or their equivalents by ▇▇▇▇▇'▇ Investor Service,
Inc. or Standard & Poor's Corporation, respectively, or their successors.
23
(b) The endorsement of instruments for collection or deposit in the
ordinary course of business.
Section 8.4. Dispositions of Assets. Sell, lease or otherwise dispose
of any assets without the prior written consent of the Agent, except for sales
or consignments of inventory in the ordinary course of business, consistent with
past practices.
Section 8.5. Assumptions, Guaranties, Etc. of Indebtedness of Other
Persons. Assume, guarantee, endorse or otherwise be or become directly or
contingently liable (including, without limitation, by way of agreement,
contingent or otherwise, to purchase, provide funds for payment, supply funds to
or otherwise invest in any Person or otherwise assure the creditors of any such
Person against loss) in connection with any Indebtedness of any other Person,
except for Guaranties by endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business.
Section 8.6. Mergers, Etc. Enter into any merger or consolidation
with or acquire all or substantially all of the assets of any Person, or sell,
assign, lease or otherwise dispose of (whether in one transaction or in a series
of transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to any Person except that Borrower may merge with any Person
that either (i) repays the Loans outstanding hereunder upon consummation of such
transaction or (ii) assumes the Lender Obligations hereunder and grants Lenders
a first priority Lien in all assets of such person.
Section 8.7. Distributions. Make any Distribution or make any other
payment on account of the purchase, acquisition, redemption, or other retirement
of any shares of stock, whether now or hereafter outstanding; provided, however,
that the Borrower may make a distribution required pursuant to that certain
Asset Purchase Agreement dated as of December 15, 1999, by and between the
Borrower and ▇▇▇▇▇▇▇▇▇ & Associates.
Section 8.8. Sale and Leaseback. Sell or transfer any of its
properties with the intention of taking back a lease of the same property or
leasing other property for substantially the same use as the property being sold
or transferred.
Section 8.9. Transactions with Affiliates. Enter into any
transaction, including, without limitation, the purchase, sale or exchange of
property or the rendering of any service, with any Affiliate, except that the
Borrower may pay salaries, fees and bonuses to its directors, officers and
employees as are usual and customary in the Borrower's business and consistent
with the Borrower's past practices.
ARTICLE 9 - EVENTS OF DEFAULT AND REMEDIES
Section 9.1. Events of Default. Each of the following events shall
constitute and event of default (each, an "Event of Default") hereunder:
(a) The Borrower shall fail to make any payment in respect of (i) the
principal of any of the Lender Obligations as the same shall become due, whether
at the stated Maturity Date, or by acceleration or otherwise, or (ii) interest
or fees on or in respect of any of the Lender Obligations as the same shall
24
become due, and such failure shall continue for a period of three (3) Business
Days.
(b) The Borrower shall fail to perform or observe any of the terms,
covenants, conditions or provisions of Article 8 hereof.
(c) The Borrower shall fail to perform or observe any other term,
covenant, condition or provision to be performed or observed by the Borrower
pursuant to Sections 6 and 7 hereof or any other Lender Agreement, and, to the
extent such term covenant or condition is capable of being cured, such failure
shall not be rectified or cured to the Agent's satisfaction within ten (10) days
after the occurrence thereof.
(d) Any representation or warranty of the Borrower herein or in any
other Lender Agreement or any amendment to any thereof shall have been
materially false or misleading at the time made or intended to be effective.
(e) An Event of Default (as defined in the Senior Loan Agreement)
shall have occurred under the Senior Loan Agreement.
(f) A Material Adverse Effect shall have occurred.
(g) The Borrower shall fail to make any payment of Indebtedness for
money borrowed by the Borrower or for any Guaranty of money borrowed when such
payment is due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) or shall fail to perform or observe any
provision of any agreement or instrument relating to such Indebtedness, and such
failure shall permit the holder thereof to accelerate such Indebtedness.
(h) The Borrower shall be involved in financial difficulties as
evidenced:
(i) by its commencement of a voluntary case under Title 11
of the United Stated Code as from time to time in effect, or by its
authorizing, by appropriate proceedings of its board of directors or
other governing body, the commencement of such a voluntary case;
(ii) by its filing an answer or other pleading admitting or
failing to deny the material allegations of a petition filed against
its commencing an involuntary case under said Title 11, or seeking,
consenting to or acquiescing in the relief therein provided, or by
its failing to controvert timely the material allegations of any such
petition;
(iii) by the entry of an order for relief in any
involuntary case commenced under said Title 11;
(iv) by its seeking relief as a debtor under any applicable
law, other than said Title 11, of any jurisdiction relating to the
liquidation or reorganization of debtors or to the modification or
alteration of the rights of creditors, or by its consenting to or
acquiescing in such relief;
25
(v) by the entry of an order by a court of competent
jurisdiction (1) by finding it to be bankrupt or insolvent, (2)
ordering or approving its liquidation, reorganization or modification
or alteration of the rights of its creditors, or (3) assuming custody
of, or appointing a receiver or other custodian for all or a
substantial part of its property and such order shall not be vacated
or stayed on appeal or otherwise stayed within 45 days;
(vi) by the filing of a petition against the Borrower under
said Title 11 which shall not be vacated within 45 days; or
(vii) by its making an assignment for the benefit of, or
entering into a composition with, its creditors, or appointing or
consenting to the appointment of a receiver or other custodian for
all or a substantial part of its property.
(i) There shall have occurred a judgment against any of the Borrower
in any court (i) for an amount in excess of $2,500,000, and from which no appeal
has been taken or with respect to which all appeal periods have expired, unless
such judgment is, to the Agent's satisfaction, insured against in full, or (ii)
which shall have a Materially Adverse Effect upon the assets, properties or
condition, financial or otherwise, of the Borrower.
(j) The total principal amount of outstanding debt under (i) the
Senior Loan Agreement and (ii) the Tranche B Loans shall exceed ninety-two
percent (92%) of the GOB Value of Inventory, unless an Overadvance has been made
to Borrower pursuant to Section 2.4 of this Agreement.
(k) Any "Event of Default" under any other Lender Agreement shall
have occurred.
Section 9.2. Remedies. Upon the occurrence of an Event of Default
which has not been waived by the Majority Lenders or in the case of an Event of
Default occurring pursuant to Section 9.1(j) only, by the Agent, subject to the
terms of the Intercreditor Agreement, in each and every case, the Agent may, and
upon the request of the Majority Lenders shall, proceed to protect and enforce
the rights of the Agent and the Lenders by suit in equity, action at law and/or
other appropriate proceeding either for specific performance of any covenant or
condition contained in this Agreement or any other Lender Agreement or in any
instrument delivered to the Agent or the Lenders pursuant hereto or thereto, or
in aid of the exercise of any power granted in this Agreement, any Lender
Agreement or any such instrument, and by notice in writing to the Borrower
declare all or any part of the unpaid balance of the Lender Obligations then
outstanding to be forthwith due and payable (except with respect to any Event of
Default set forth in Section 9.1(h) hereof, in which case all such Lender
Obligations shall automatically become immediately due and payable without the
necessity of any notice or other demand), whereupon such unpaid balance or part
thereof shall become so due and payable without presentation, protest or further
demand or notice of any kind, all of which are hereby expressly waived, and the
Agent may proceed to enforce payment of such balance or part thereof in such
manner as the Agent may elect, and the Agent and each Lender may offset and
apply toward the payment of such balance or part thereof any Indebtedness of the
Agent or any Lender to the Borrower or to any obligor of the Lender Obligations,
26
including any Indebtedness represented by deposits in any general or special
account maintained with the Agent or any Lender or with any other Person
controlling, controlled by or under common control with the Agent or any Lender.
Section 9.3. Distribution of Proceeds. Notwithstanding anything to
the contrary contained herein, in the event that following the occurrence or
during the continuance of any Event of Default, the Agent or any Lender receives
any monies on account of the Lender Obligations from the Borrower or otherwise,
such monies shall be distributed for application as follows:
(a) First, to the payment of or the reimbursement of, the Agent for
or in respect of all costs, expenses, disbursements and losses which shall have
been incurred or sustained by the Agent in connection with the collection of
such monies by the Agent, or in connection with the exercise, protection or
enforcement by the Agent of all or any of the rights, remedies, powers and
privileges of the Agent or the Lenders under this Agreement or any other Lender
Agreement;
(b) Second, to the payment of all interest, including interest on
overdue amounts, and late charges, then due and payable with respect to the
Tranche B Loans, allocated among the Lenders in proportion to their respective
Commitment Percentages;
(c) Third, to the payment of the outstanding principal balance of the
Tranche B Loans, allocated among the Lenders in proportion to their respective
Commitment Percentages;
(d) Fourth, to the payment of all interest, including interest on
over due amounts, and late charges, the due and payable with respect to the
Tranche C Loan, allocated among the Lenders in proportion to their respective
Commitment Percentages;
(e) Fifth, to the payment of the outstanding principal balance of the
Tranche C Loan, allocated among the Lenders in proportion to their respective
Commitment Percentage; and
(f) Sixth, the excess, if any, shall be returned to the Borrower or
to such other Persons as are entitled thereto.
ARTICLE 10 - CONSENTS; AMENDMENTS; WAIVERS; REMEDIES
Section 10.1. Actions by Lenders. Except as otherwise expressly set
forth in any particular provision of this Agreement, any consent or approval
required or permitted by this Agreement to be given by the Lenders, including
without limitation under Section 10.2, may be given, and any term of this
Agreement or of any other instrument related hereto or mentioned herein may be
amended, and the performance or observance by the Borrower of any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively) with, but only with, the written consent of the
Borrower and the Majority Lenders; provided, however, that without the written
consent of all Lenders:
27
(a) no reduction in the interest rates on or any fees relating to the
Loans shall be made;
(b) no extension or postponement shall be made of the stated time of
payment of the principal amount of, interest on, or fees payable to the Lenders
relating to the Loans;
(c) no extension of the Maturity Date shall be made;
(d) no release of all or substantially all of the collateral security
for, or any guarantor of, the Lender Obligations shall be made;
(e) no change in the definition of the term "Majority Lenders" shall
be made; and
(f) no change in the provisions of this Section 10.1 shall be made.
Section 10.2. Actions by Borrower. No delay or omission on the
Agent's or the Lenders' part in exercising their rights and remedies against the
Borrower or any other interested party shall constitute a waiver. A breach by
the Borrower of its obligations under this Agreement may be waived only by a
written waiver executed by the Agent and the Lenders in accordance with Section
10.1. The Agent's and the Lenders' waiver of the Borrower's breach in one or
more instances shall not constitute or otherwise be an implicit waiver of
subsequent breaches. To the extent permitted by applicable law, the Borrower
hereby agrees to waive, and does hereby absolutely and irrevocably waive (a) all
presentments, demands for performance, notices of protest and notices of
dishonor in connection with any of the Indebtedness evidenced by the Notes, (b)
any requirement of diligence or promptness on the Agent's or the Lenders' part
in the enforcement of its rights under the provisions of this Agreement or any
Lender Agreement, and (c) any and all notices of every kind and description
which may be required to be given by any statute or rule of law with respect to
its liability (i) under this Agreement or in respect of the Indebtedness
evidenced by the Notes or any other Lender Obligation or (ii) under any other
Lender Agreement. No course of dealing between the Borrower and the Agent or the
Lenders shall operate as a waiver of any of the Agent's or the Lenders' rights
under this Agreement or any Lender Agreement or with respect to any of the
Lender Obligations. This Agreement shall be amended only by a written instrument
executed by the Agent and the Lenders in accordance with Section 10.1 making
explicit reference to this Agreement. The Agent's and the Lenders' rights and
remedies under this Agreement and under all subsequent agreements between the
Agent, the Lenders and the Borrower shall be cumulative and any rights and
remedies expressly set forth herein shall be in addition to, and not in
limitation of, any other rights and remedies which may be applicable to the
Agent and the Lenders in law or at equity.
ARTICLE 11 - SUCCESSORS AND ASSIGNS
Section 11.1. General. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors
(which shall include in the case of the Agent or any Lender any entity resulting
from a merger or consolidation) and assigns, except that (a) the Borrower may
not assign its rights or obligations under this Agreement, and (b) each Lender
may assign its rights in this Agreement only as set forth below in this Article
11.
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Section 11.2. Assignments.
(a) Assignments. In compliance with applicable laws with respect to
such assignment, a Lender may assign to one or more financial institutions (each
a "Successor Lender") a proportionate part of its rights and obligations in
connection with this Agreement and its Note and the related Lender Agreements
and each such Successor Lender shall assume such rights and obligations pursuant
to an Assignment and Acceptance Agreement ("Assignment and Acceptance
Agreement") duly executed by such Successor Lender and such assigning Lender and
acknowledged and consented to by the Borrower and the Agent, substantially in
the form of Exhibit F attached hereto.
(b) Assignment Procedures. In the event of an assignment in
accordance with Section 11.2(a), upon execution and delivery of such an
assignment at least five (5) Business Days prior to the proposed assignment
date, and payment by such Successor Lender to the assigning Lender of an amount
equal to the purchase price agreed between such assigning Lender and such
Successor Lender, such Successor Lender shall become party to this Agreement as
a signatory hereto and shall have all the rights and obligations of a Lender
under this Agreement and the other Lender Agreements with an interest therein as
set forth in such assignment, and such assignor making such assignment shall be
released from its obligations hereunder to a corresponding extent, and no
further consent or action by any party shall be required. Upon the consummation
of any such assignment, the assigning Lender, the Successor Lender and the
Borrower shall make, if necessary, appropriate arrangements so that, if
required, a new Note(s) is issued to the Successor Lender and a replacement
Note(s) is issued to the assigning Lender in principal amounts reflecting their
respective revised interests.
(c) Register. The Agent shall maintain a register (the "Register")
for the recordation of (i) the names and addresses of all Successor Lenders that
enter into Assignment and Acceptance Agreements, (ii) the interests of each
Lender, and (iii) the amounts of the Loans owing to each Lender from time to
time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Agent and the Lenders may treat each
Person whose name is registered therein for all purposes as a party to this
Agreement. The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(d) Further Assurances. The Borrower shall sign such documents and
take such other actions from time to time reasonably requested by the Agent or a
Lender to enable any Successor Lender to share in the benefits and rights
created by the Lender Agreements, provided that the Borrower shall not be
required to sign any documents or take any other actions that would materially
and adversely affect its rights hereunder.
(e) Assignments to Federal Reserve Bank. Any Lender at any time may
assign all or any portion of its rights under this Agreement and its Note to a
Federal Reserve Bank. No such assignment shall release the transferor Lender
from its obligations hereunder.
Section 11.3. Participations. Any Lender may, without the consent of
the Borrower, at any time grant or offer to grant to one or more financial
institutions ("Credit Participants") participating interests in such Lender's
rights and obligations in this Agreement, its Note and the related Lender
29
Agreements, and each such Credit Participant shall acquire such participation
subject to the terms set forth below.
(a) Amount. Each such participation shall be in a minimum amount of
at least $500,000.
(b) Procedure. Each Lender granting such participation shall comply
with all applicable laws with respect to such transfer and shall remain
responsible for the performance of its obligations hereunder and under the other
Lender Agreements and shall retain the sole right and responsibility to exercise
its rights and to enforce the obligations of the Borrower hereunder and under
the other Lender Agreements, including the right to consent to any amendment,
modification or waiver of any provision of any Lender Agreement, except for
those matters referred to in Section 10.1 which require the consent of all
Lenders and which may also require the consent of each Credit Participant.
(c) Dealing with Lenders. The Borrower shall continue to deal solely
and directly with the Lenders in connection with their rights and obligations
under this Agreement and the other Lender Agreements.
(d) Rights of Credit Participants. The Borrower agrees that each
Credit Participant shall, to the extent provided in its participation
instrument, be entitled to the benefits of Section 13.5, and the setoff rights
in Section 9.2 with respect to its participating interest; provided, however,
that no Credit Participant shall be entitled to receive any greater payment
under such Sections than the Lender granting such participation would have been
entitled to receive with respect to the interests transferred.
(e) Notice. Prior to granting any participation, the Lenders granting
such participation shall notify the Agent and the Borrower.
ARTICLE 12 - THE AGENT
Section 12.1. Authorization and Action. Each Lender hereby appoints
and authorizes the Agent to take such action on its behalf and to exercise such
powers under this Agreement, the other Lender Agreements as are delegated to the
Agent by the terms hereof and thereof and the Intercreditor Agreement, together
with such powers as are reasonably incidental thereto. As to any matters not
expressly provided for by this Agreement and the other Lender Agreements
(including, without limitation, enforcement or collection of the Notes), the
Agent shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully protected
in so acting or refraining from acting) upon the instructions of the Majority
Lenders, and such instructions shall be binding upon all Lenders; provided,
however, that the Agent shall not be required to take any action which exposes
the Agent to liability or which is contrary to this Agreement or the other
Lender Agreements or applicable law. Subject to the foregoing provisions and to
the other provisions of this Article 12, the Agent shall, on behalf of the
Lenders: (a) execute any documents on behalf of the Lenders providing collateral
for or guarantees of the Lender Obligations; (b) hold and apply any collateral
for the Lender Obligations, and the proceeds thereof, at any time received by
it, in accordance with the provisions of this Agreement, the other Lender
Agreements and the Intercreditor Agreement; (c) exercise any and all rights,
30
powers and remedies of the Lenders under this Agreement or any of the other
Lender Agreements, including the giving of any consent or waiver or the entering
into of any amendment, subject to the provisions of Section 10.1; (d) at the
direction of the Lenders, execute, deliver and file UCC financing statements,
mortgages, deeds of trust, lease assignments and such other agreements in
respect of any collateral for the Lender Obligations, and possess instruments
included in the collateral on behalf of the Lenders; and (e) in the event of
acceleration of the Borrower' Indebtedness hereunder, act at the direction of
the Majority Lenders to exercise the rights of the Lenders hereunder and under
the other Lender Agreements.
Section 12.2. Agent's Reliance, Etc . Neither the Agent nor any of
its directors, officers, agents or employees shall be liable to the Lenders for
any action taken or omitted to be taken by it or them under or in connection
with this Agreement or the other Lender Agreements, except for its or their own
gross negligence or willful misconduct. Without limitation of the generality of
the foregoing, the Agent: (a) may treat the payee of any Note as the holder
thereof until the Agent receives written notice of the assignment or transfer
thereof signed by such payee and in form required under Article 11 hereof; (b)
may consult with legal counsel, independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (c) makes no warranty or representations to any Lender
and shall not be responsible to any Lender for any statements, warranties or
representations made in or in connection with this Agreement or the other Lender
Agreements; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement or the other Lender Agreements on the part of the Borrower or any
other Person or to inspect the property (including the books and records) of the
Borrower or any other Person; (e) shall not be responsible to any Lender for the
due execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or the other Lender Agreements or any other instrument
or document furnished pursuant hereto or thereto; and (f) shall incur no
liability under or in respect of this Agreement or the other Lender Agreements
by acting upon any notice, consent, certificate or other instrument or writing
(which may be by telecopy or telegram) believed by the Agent to be genuine and
signed or sent by the proper party or parties.
Section 12.3. Agent as a Lender. With respect to its interest in the
Loans hereunder, if any, DDJ Capital Management, LLC shall have the same rights
and powers under this Agreement and the other Lender Agreements as any other
Lender and may exercise the same as though it were not the Agent; and the term
"Lender" or "Lender(s)" shall, unless otherwise expressly indicated, include DDJ
Capital Management, LLC in its individual capacity. DDJ Capital Management, LLC
and its affiliates may lend money to, and generally engage in any kind of
business with, the Borrower, any of the Borrower's Affiliates and any Person who
may do business with or own securities of the Borrower or any such Affiliate of
the Borrower, all as if DDJ Capital Management, LLC were not the Agent and
without any duty to account therefor to the Lenders.
Section 12.4. Lender Credit Decision. Each Lender acknowledges that
it has, independently and without reliance upon the Agent or any other Lender
and based on the financial statements referred to in Section 5.8 and such other
31
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
Section 12.5. Indemnification of Agent. Each Lender agrees to
indemnify the Agent and its directors, officers, employees and agents (to the
extent that the Agent is not reimbursed by the Borrower), ratably according to
each Lender's Commitment Percentage, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against the Agent or its directors, officers,
employees or agents in any way relating to or arising out of this Agreement or
any other Lender Agreement or any action taken or omitted by the Agent in such
capacity under this Agreement; provided that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the Agent's
gross negligence or willful misconduct. Without limitation of the foregoing,
each Lender agrees to reimburse the Agent promptly upon demand for its ratable
share of any out-of-pocket expenses (including counsel fees) incurred by the
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement and each other Lender Agreement, to the
extent that the Agent is not reimbursed for such expenses by the Borrower.
Section 12.6. Successor Agent. Except as provided below, the Agent
may resign at any time by giving written notice thereof to the Lenders and the
Borrower. Upon any such resignation, the Lenders shall have the right to appoint
a successor Agent which shall be reasonably acceptable to the Borrower. If no
successor Agent shall have been so appointed by the Lenders (other than the
resigning Agent), and shall have accepted such appointment, within thirty (30)
days after the retiring Agent's giving notice of resignation, then the retiring
Agent may, on behalf of the Lenders, appoint a successor Agent, which shall be a
commercial bank or financial institution organized under the laws of the United
States of American or of any state thereof. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations under this Agreement and the other Lender
Agreements. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article 12 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement and the
other Lender Agreements.
Section 12.7. Amendment of Article 13. The Borrower hereby agrees
that the foregoing provisions of this Article 12 constitute an agreement among
the Agent and the Lenders (and the Agent and the Lenders acknowledge that except
for the provisions of Section 12.6, the Borrower is not a party to or bound by
such foregoing provisions) and that any and all of the provisions of this
Article 12 may be amended at any time by the Lenders without the consent or
approval of, or notice to, the Borrower (other than the requirement of notice to
32
the Borrower of the resignation of the Agent and the appointment of a successor
Agent).
ARTICLE 13 - MISCELLANEOUS
Section 13.1. Notices. All notices and other communications made or
required to be given pursuant to this Agreement shall be in writing and shall be
mailed by United States mail, postage prepaid, or sent by hand, by telecopy or
by nationally-recognized overnight carrier service, addressed as follows:
(a) If to the Agent, at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, with a copy to: ▇▇▇▇▇▇▇
Procter LLP, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Telecopier No. ▇▇▇-▇▇▇-▇▇▇▇,
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, P.C., or at such other address(es) or to the
attention of such other Person(s) as the Agent shall from time to time designate
in writing to the Borrower and the Lenders.
(b) If to the Borrower, at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇, Telecopier No. ▇▇▇-▇▇▇-▇▇▇▇, Attention: President and Chief
Executive Officer, (▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇), with a copy to: (i) ▇▇▇▇▇ ▇▇▇▇, Chairman
at the address of the Borrower and (ii) Weil, Gotshal & ▇▇▇▇▇▇ LLP, ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Telecopier No. ▇▇▇-▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., or at such other address(es) or to the
attention of such other Person(s) as the Borrower shall from time to time
designate in writing to the Agent and the Lenders.
(c) If to any Lender, at the address(es) and to the attention of the
Person(s) specified below such Lender's name on the execution page of this
Agreement (or in the case of a Successor Lender, at the address(es) and to the
attention of the Person(s) specified in the Assignment and Acceptance Agreement
executed by such Successor Lender), or at such other address(es) and to the
attention of such other Person(s) as any Lender shall from time to time
designate in writing to the Agent and the Borrower.
Any notice so addressed and mailed by registered or certified mail
shall be deemed to have been given when mailed. Any notice so addressed and sent
by hand, by telecopy or by overnight carrier service shall be deemed to have
been given when received.
A notice from the Agent stating that it has been given on behalf of
the Lenders shall be relied upon by the Borrower as having been given by the
Lenders.
Section 13.2. Merger. This Agreement and the other Lender Agreements
and documents contemplated hereby, including the Intercreditor Agreement,
constitute the entire agreement of the Borrower and the Agent and the Lenders
and express their entire understanding with respect to credit advanced or to be
advanced by the Lenders to the Borrower.
Section 13.3. Governing Law; Consent to Jurisdiction. This Agreement
shall be governed by and construed and enforced under the laws of the
Commonwealth of Massachusetts. The Borrower hereby irrevocably submits itself to
the non-exclusive jurisdiction of the courts of the Commonwealth of
Massachusetts and to the non-exclusive jurisdiction of any ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇
▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ located in a District of Massachusetts for the purpose of any
suit, action or other proceeding arising out of this Agreement or any other
Lender Agreement or any of the transactions contemplated hereby or thereby.
Section 13.4. Counterparts. This Agreement and all amendments, if
any, to this Agreement may be executed in several counterparts, each of which
shall be an original. The several counterparts shall constitute but one and the
same Agreement.
Section 13.5. Expenses and Indemnification.
(a) The Borrower agrees to pay, on demand, all of the Agent's and the
Lenders' reasonable expenses in preparing, executing, delivering and
administering this Agreement, the Lender Agreements and all related instruments
and documents, including, without limitation, upon presentation of invoices in
reasonable detail, the reasonable fees and out of-pocket expenses of the Agent's
special counsel, ▇▇▇▇▇▇▇ Procter LLP, and the Agent's and Lenders' expenses in
connection with periodic audits of the Borrower. The Borrower also agrees to
pay, on demand, all reasonable out-of-pocket expenses incurred by the Agent and
the Lenders, including, without limitation, reasonable legal and accounting
fees, in connection with the collection of amounts due hereunder and under all
other Lender Agreements upon the occurrence of an Event of Default hereunder,
the revision, protection or enforcement of any of the Agent's or the Lenders'
rights against the Borrower under this Agreement, the Notes and all other Lender
Agreements and the administration of special problems that may arise under this
Agreement or any other Lender Agreement. The Borrower also agrees to pay all
stamp and other taxes in connection with the execution and delivery of this
Agreement and related instruments and documents.
(b) Without limitation of any other obligation or liability of the
Borrower or right or remedy of the Agent or the Lenders contained herein, the
Borrower hereby covenants and agrees to indemnify and hold the Agent, the
Lenders, and the directors, officers, members, subsidiaries, shareholders,
agents, affiliates and Persons controlling the Agent and the Lenders, harmless
from and against any and all damages, losses, settlement payments, obligations,
liabilities, claims, including, without limitation, claims for finder's or
broker's fees, actions or causes of action, and reasonable costs and expenses
incurred, suffered, sustained or required to be paid by any such indemnified
party in each case by reason of or resulting from any claim relating to the
transactions contemplated hereby, other than any such claims which are
determined by a final, non-appealable judgment or order of a court of competent
jurisdiction to be the result of the gross negligence or willful misconduct of
such indemnified party. Promptly upon receipt by any indemnified party hereunder
of notice of the commencement of any action against such indemnified party for
which a claim is to be made against the Borrower hereunder, such indemnified
party shall notify the Borrower in writing of the commencement thereof, although
the failure to provide such notice shall not affect the indemnification rights
of any such indemnified party hereunder. The Borrower shall have the right, at
its option upon notice to the indemnified parties, to defend except as provided
below, any such matter at its own expense and with its own counsel, which
counsel must be reasonably acceptable to the indemnified parties. The
indemnified party shall cooperate with the Borrower in the defense of such
matter. The indemnified party shall have the right to employ separate counsel
34
and to participate in the defense of such matter at its own expense. In the
event that (a) the employment of separate counsel by an indemnified party has
been authorized in writing by the Borrower, (b) the Borrower has failed to
assume the defense of such matter within fifteen (15) days of notice thereof
from the indemnified party, or (c) the named parties to any such action
(including impleaded parties) include any indemnified party who has been advised
by counsel that there may be one or more legal defenses available to it or
prospective bases for liability against it, which are different from those
available to or against the Borrower, then the Borrower shall not have the right
to assume the defense of such matter with respect to such indemnified party. The
Borrower shall not compromise or settle any such matter against an indemnified
party without the written consent of the indemnified party, which consent may
not be unreasonably withheld or delayed.
Section 13.6. WAIVER OF JURY TRIAL. THE AGENT, THE LENDERS AND THE
BORROWER AGREES THAT NONE OF THEM NOR ANY ASSIGNEE OR SUCCESSOR SHALL (A) SEEK A
JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER ACTION BASED
UPON OR ARISING OUT OF, THIS AGREEMENT, THE NOTES, ANY LENDER AGREEMENT, ANY
RELATED INSTRUMENTS, ANY COLLATERAL OR THE DEALINGS OR THE RELATIONSHIP BETWEEN
OR AMONG ANY OF THEM, OR (B) SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER
ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THE PROVISIONS OF
THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY EACH OF THE AGENT, THE LENDERS AND
THE BORROWER WITH THEIR RESPECTIVE COUNSEL, AND THESE PROVISIONS SHALL BE
SUBJECT TO NO EXCEPTIONS. NONE OF THE AGENT, THE LENDERS OR THE BORROWER HAS
AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS
PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
Section 13.7. Severability. The provisions of this Agreement are
intended to be severable. If any provision of this Agreement shall be held
illegal, invalid or unenforceable in whole or in part in any jurisdiction such
provision shall, as to such jurisdiction, be ineffective to the extent of such
illegality, invalidity or unenforceability without in any manner affective the
legality, validity or enforceability thereof in any other jurisdiction or the
remaining provision hereof in any jurisdiction.
Section 13.8. Headings. Section headings herein are included for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose.
Section 13.9. Confidentiality. Upon delivery to any Lender or the
Agent, or permitting any Lender or the Agent to inspect, any written information
pursuant to this Agreement or other Lender Agreements, each Lender and the Agent
shall treat such information as confidential. Each Lender and the Agent agreed
to hold such information in confidence from the date of disclosure thereof.
Subject to the other provisions of this Section 13.9, each Lender and the Agent
may disclose confidential information to its officers, directors, members,
employees, attorneys, accountants, or other professionals engaged by any Lender
or the Agent only after determining that such third party has been instructed to
hold such information in confidence to the same extent as it if were a Lender.
Notwithstanding the foregoing, the provisions of this Section 13.9 shall not
35
apply to information the substance of which, at the time of disclosure by any
Lender or the Agent, has been disclosed to or is known to any creditor (other
than information as to which such creditor is then under an obligation of
nondisclosure), or any Person other than (A) a director, officer, employee or
agent of any of the Borrower or a professional engaged by the Borrower of (B) a
Person who is then under an obligation of nondisclosure (otherwise than as a
consequence of a wrongful act of any Lender or the Agent), (ii) information
which any Lender, of the Agent had in its possession prior to receipt thereof
from the disclosing party, or (iii) information received by any Lender or the
Agent from a third party having no obligations or nondisclosure with respect
thereto. Nothing contained in this Section 13.9 shall prevent any disclosures:
(x) believed in good faith by any Lender or the Agent to be required by any law
or guidelines or interpretation or application thereof by any governmental
authority, arbitrator or grand jury charged with the interpretation or
administration thereof or compliance with any request or directive of any
governmental authority, arbitrator or grand jury (whether or not having the
force of law), (y) determined by counsel for any Lender or the Agent to be
necessary or advisable in Agreement or any other Lender Agreements or (z) of any
information which has been made public by a Person other than any Lender or the
Agent. The Lenders and the Agent shall have the right to disclosure any
confidential information described in this Section 13.9 to an assignee or
prospective assignee or to a participant or prospective participant in Loans
hereunder, provided that the assigning or selling Lender shall have obtained
from such assignee or prospective assignee or participant or prospective
participant an agreement to hold such information in confidence to the same
extent as if it were a Lender.
36
IN WITNESS WHEREOF, the Borrower, the Agent and the Lenders have
caused this Loan Agreement to be executed by their duly authorized officers as
of the date set forth above.
▇▇▇▇▇▇▇ JEWELERS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: President and CEO
DDJ CAPITAL MANAGEMENT, LLC,
As Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Member
B III CAPITAL PARTNERS, L.P.
By: DDJ CAPITAL III, its GENERAL PARTNER
By: DDJ CAPITAL MANAGEMENT, LLC, Manager
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Member
37
B III-A CAPITAL PARTNERS, L.P.
By: GP III-A LLC, its GENERAL PARTNER
By: DDJ CAPITAL MANAGEMENT, LLC, Manager
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Member
38
Exhibit A
TRANCHE B NOTE
All amounts at any time owing by the maker of this Tranche B Note to
the payee hereunder are subordinated in right of payment to the indefeasible
payment and satisfaction in full of all present and future obligations,
liabilities and indebtedness of the maker of this Tranche B Note to the lenders
(the "Senior Lenders") under that certain Loan and Security Agreement, dated as
of October 2, 1998, as amended as of April 15, 1999, August 30, 1999, November
24, 1999, January 25, 2000, June 2, 2000, and April _, 2001 (as amended, the
"Senior Loan Agreement") and any security interests in or liens on any of the
assets of the maker of this Tranche B Note securing such obligations,
liabilities and indebtedness are junior to any security interests and liens of
the Senior Lenders in the assets of the maker of this Tranche B Note, as
provided by and as otherwise subject to the Intercreditor and Subordination
Agreement, dated as of the date hereof, between the payee and the Senior
Lenders.
$[ ] April _, 2001
Boston, Massachusetts
FOR VALUE RECEIVED, ▇▇▇▇▇▇▇ Jewelers, Inc. (the "Borrower") HEREBY
PROMISES TO PAY to the order of [ ] (the "Lender") the principal sum of $[ ],
together with interest on the unpaid principal amount from time to time
outstanding at the rate or rates and computed and payable at the times as
described in the Loan Agreement (as hereinafter defined). Payments of the
principal hereof shall be made as provided in the Loan Agreement.
Notwithstanding any other provision of this note, the entire balance of
principal and accrued and unpaid interest shall be paid in full on the Maturity
Date (as defined in the Loan Agreement).
This note is one of the Tranche B Notes referred to in the Loan
Agreement dated as of March 1, 2001 (as the same may be amended, modified or
supplemented from time to time the "Loan Agreement") by and among the Borrower,
the Lenders from time to time parties thereto, and DDJ Capital Management, LLC,
a Massachusetts limited liability company, as Agent for the Lenders (the
"Agent"). Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Loan Agreement.
The Borrower shall have the right to voluntarily prepay all or any
part of the outstanding principal amount of this note subject to the provisions
of the Loan Agreement.
The holder of this note is entitled to all the benefits and rights of a Lender
under the Loan Agreement to which reference is hereby made for a statement of
the terms and conditions under which the entire unpaid balance of this note, or
any portion thereof, shall become immediately due and payable. The Borrower
hereby waives presentment, demand, notice, protest and other demands and notices
in connection with the delivery, acceptance or enforcement of this note.
No delay or omission on the part of the holder of this note in
exercising any right hereunder shall operate as a waiver of such right or of any
other right under this note, and a waiver, delay or omission on any one occasion
shall not be construed as a bar to or waiver of any such right on any future
occasion.
The Borrower hereby agrees to pay on demand all reasonable costs and
expenses, including, without limitation, reasonable attorneys' fees and legal
expenses, incurred or paid by the holder of this note in enforcing this note on
default.
THE LENDER AND THE BORROWER AGREE THAT NEITHER OF THEM NOR ANY OF THEIR
ASSIGNEES OR SUCCESSORS SHALL (A) SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING,
COUNTERCLAIM OR ANY OTHER ACTION BASED UPON OR ARISING OUT OF, THIS NOTE, THE
LOAN AGREEMENT, ANY TRANSACTION DOCUMENT, ANY DOCUMENT, INSTRUMENT OR AGREEMENT
EXECUTED IN CONNECTION WITH ANY OF THE FOREGOING, ANY COLLATERAL SECURING ALL OR
ANY PART OF THE LENDER OBLIGATIONS OR THE DEALINGS OR THE RELATIONSHIP BETWEEN
OR AMONG ANY OF THEM, OR (B) SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER
ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THE PROVISIONS OF
THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY EACH LENDER AND THE BORROWER WITH
THEIR RESPECTIVE COUNSEL, AND THESE PROVISIONS SHALL BE SUBJECT TO NO
EXCEPTIONS. NEITHER THE LENDER NOR THE BORROWER HAVE AGREED WITH OR REPRESENTED
TO THE OTHER THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN
ALL INSTANCES.
2
This note shall be deemed to be under seal, and all rights and
obligations hereunder shall be governed by the laws of the Commonwealth of
Massachusetts (without giving effect to any conflicts of law provisions
contained therein).
▇▇▇▇▇▇▇ JEWELERS, INC.
By:
------------------------------
Name:
Title:
3
Exhibit B
TRANCHE C NOTE
All amounts at any time owing by the maker of this Tranche C Note to
the payee hereunder are subordinated in right of payment to the indefeasible
payment and satisfaction in full of all present and future obligations,
liabilities and indebtedness of the maker of this Tranche C Note to the lenders
(the "Senior Lenders") under that certain Loan and Security Agreement, dated as
of October 2, 1998, as amended as of April 15, 1999, August 30, 1999, November
24, 1999, January 25, 2000, June 2, 2000, and April _, 2001 (as amended, the
"Senior Loan Agreement") and any security interests in or liens on any of the
assets of the maker of this Tranche C Note securing such obligations,
liabilities and indebtedness are junior to any security interests and liens of
the Senior Lenders in the assets of the maker of this Tranche C Note, as
provided by and as otherwise subject to the Intercreditor and Subordination
Agreement, dated as of the date hereof, between the payee and the Senior
Lenders.
$[ ] April _, 2001
Boston, Massachusetts
FOR VALUE RECEIVED, ▇▇▇▇▇▇▇ Jewelers, Inc. (the "Borrower") HEREBY
PROMISES TO PAY to the order of [ ] (the "Lender") the principal sum of $[ ],
together with interest on the unpaid principal amount from time to time
outstanding at the rate or rates and computed and payable at the times as
described in the Loan Agreement (as hereinafter defined). Payments of the
principal hereof shall be made as provided in the Loan Agreement.
Notwithstanding any other provision of this note, the entire balance of
principal and accrued and unpaid interest shall be paid in full on the Maturity
Date (as defined in the Loan Agreement).
This note is one of the Tranche C Notes referred to in the Loan
Agreement dated as of April _, 2001 (as the same may be amended, modified or
supplemented from time to time the "Loan Agreement") by and among the Borrower,
the Lenders from time to time parties thereto, and DDJ Capital Management, LLC,
a Massachusetts limited liability company, as Agent for the Lenders (the
"Agent"). Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Loan Agreement.
The Borrower shall have the right to voluntarily prepay all or any
part of the outstanding principal amount of this note subject to the provisions
of the Loan Agreement.
The holder of this note is entitled to all the benefits and rights of
a Lender under the Loan Agreement to which reference is hereby made for a
statement of the terms and conditions under which the entire unpaid balance of
this note, or any portion thereof, shall become immediately due and payable. The
Borrower hereby waives presentment, demand, notice, protest and other demands
and notices in connection with the delivery, acceptance or enforcement of this
note.
No delay or omission on the part of the holder of this note in
exercising any right hereunder shall operate as a waiver of such right or of any
other right under this note, and a waiver, delay or omission on any one occasion
shall not be construed as a bar to or waiver of any such right on any future
occasion.
The Borrower hereby agrees to pay on demand all reasonable costs and
expenses, including, without limitation, reasonable attorneys' fees and legal
expenses, incurred or paid by the holder of this note in enforcing this note on
default.
THE LENDER AND THE BORROWER AGREE THAT NEITHER OF THEM NOR ANY OF THEIR
ASSIGNEES OR SUCCESSORS SHALL (A) SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING,
COUNTERCLAIM OR ANY OTHER ACTION BASED UPON OR ARISING OUT OF, THIS NOTE, THE
LOAN AGREEMENT, ANY TRANSACTION DOCUMENT, ANY DOCUMENT, INSTRUMENT OR AGREEMENT
EXECUTED IN CONNECTION WITH ANY OF THE FOREGOING, ANY COLLATERAL SECURING ALL OR
ANY PART OF THE LENDER OBLIGATIONS OR THE DEALINGS OR THE RELATIONSHIP BETWEEN
OR AMONG ANY OF THEM, OR (B) SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER
ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THE PROVISIONS OF
THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY EACH LENDER AND THE BORROWER WITH
THEIR RESPECTIVE COUNSEL, AND THESE PROVISIONS SHALL BE SUBJECT TO NO
EXCEPTIONS. NEITHER THE LENDER NOR THE BORROWER HAVE AGREED WITH OR REPRESENTED
TO THE OTHER THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN
ALL INSTANCES.
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This note shall be deemed to be under seal, and all rights and
obligations hereunder shall be governed by the laws of the Commonwealth of
Massachusetts (without giving effect to any conflicts of law provisions
contained therein).
▇▇▇▇▇▇▇ JEWELERS, INC.
By:
-----------------------------
Name:
Title:
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