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SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
among
GENMAR HOLDINGS, INC.
THE FINANCIAL INSTITUTIONS NAMED HEREIN
THE BANK OF NEW YORK
As Agent
and
BNY CAPITAL MARKETS, INC.
As Arranger
Dated as of July 1, 1997
$73,000,000
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TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS................................................... 2
Section 1.1 Definitions......................................2
SECTION 2. AMOUNT AND TERMS OF CREDIT FACILITIES......................... 28
Section 2.1 Revolving Loans................................ 28
Section 2.2 Term Loan...................................... 29
Section 2.3 Notice of Borrowing............................ 30
Section 2.4 Disbursement of Funds.......................... 31
Section 2.5 Revolving Notes................................ 32
Section 2.6 Interest....................................... 33
Section 2.7 Interest Periods............................... 34
Section 2.8 Minimum Amount of Eurodollar Loans............. 35
Section 2.9 Conversion or Continuation..................... 35
Section 2.10 Voluntary Reduction of Commitments............. 36
Section 2.11 Mandatory Reductions........................... 36
Section 2.12 Voluntary Prepayments.......................... 38
Section 2.13 Mandatory Prepayments.......................... 39
Section 2.14 Application of Prepayments..................... 40
Section 2.15 Method and Place of Payment.................... 40
Section 2.16 Fees........................................... 41
Section 2.17 Interest Rate Unascertainable, Increased Costs,
Illegality..................................... 42
Section 2.18 Funding Losses................................. 44
Section 2.19 Increased Capital.............................. 46
Section 2.20 Taxes.......................................... 46
Section 2.21 Change of Office, etc.......................... 48
Section 2.22 Use of Proceeds................................ 48
SECTION 3. STANDBY LETTERS OF CREDIT..................................... 49
Section 3.1 Issuance of Standby Letters of Credit.......... 49
Section 3.2 Participations; Unconditional Obligations...... 51
Section 3.3 Agreement to Repay Letter of Credit............ 52
Disbursements
Section 3.4 Letter of Credit Operations.................... 54
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PAGE
Section 3.5 Cash Collateralization......................... 54
Section 3.6 Indemnification................................ 55
Section 3.7 Resignation of the Issuing Bank................ 55
SECTION 4. CONDITIONS PRECEDENT.......................................... 56
Section 4.1 Conditions Precedent to Effectiveness.......... 56
Section 4.2 Conditions Precedent to each Term Loan Advance. 60
Section 4.3 Conditions Precedent to All Revolving Loans, the
Term Loan Advances and Issuances of Letters of
Credit......................................... 61
SECTION 5. REPRESENTATIONS AND WARRANTIES................................ 63
Section 5.1 Corporate Status............................... 63
Section 5.2 Corporate Power and Authority.................. 63
Section 5.3 No Violation................................... 63
Section 5.4 Litigation..................................... 64
Section 5.5 Financial Statements; Financial Condition; etc. 64
Section 5.6 Solvency....................................... 64
Section 5.7 Projections.................................... 64
Section 5.8 Material Adverse Change........................ 65
Section 5.9 Use of Proceeds; Margin Regulations............ 65
Section 5.10 Governmental Approvals......................... 65
Section 5.11 Security Interests and Liens................... 65
Section 5.12 Tax Returns and Payments....................... 66
Section 5.13 ERISA.......................................... 66
Section 5.14 Investment Company Act; Public Utility Holding
Company Act.................................... 67
Section 5.15 Representations and Warranties in Transaction
Documents...................................... 67
Section 5.16 True and Complete Disclosure; Financial........ 67
Statements
Section 5.17 Corporate Structure; Capitalization............ 68
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PAGE
Section 5.18 Environmental Matters.......................... 68
Section 5.19 Senior Indebtedness............................ 69
Section 5.20 Patents, Trademarks, etc....................... 69
Section 5.21 Ownership of Property.......................... 69
Section 5.22 No Default..................................... 70
Section 5.23 Licenses, etc.................................. 71
Section 5.24 Compliance With Law............................ 71
Section 5.25 No Burdensome Restrictions..................... 71
Section 5.26 Brokers' Fees.................................. 71
Section 5.27 Labor Matters.................................. 71
Section 5.28 Dealer Account Financing....................... 71
SECTION 6. AFFIRMATIVE COVENANTS......................................... 72
Section 6.1 Information Covenants.......................... 72
Section 6.2 Books, Records and Inspections................. 78
Section 6.3 Maintenance of Insurance....................... 78
Section 6.4 Taxes.......................................... 79
Section 6.5 Corporate Franchises........................... 79
Section 6.6 Compliance with Law............................ 79
Section 6.7 Performance of Obligations..................... 80
Section 6.9 Borrowing Base Certificate..................... 80
Section 6.10 Licenses, Permits, Etc......................... 81
Section 6.11 Environmental Reports.......................... 81
Section 6.12 Appraisals..................................... 81
Section 6.13 Additional Guarantors.......................... 81
Section 6.14 AMF Insurance Company of Bermuda Ltd........... 82
SECTION 7. NEGATIVE COVENANTS............................................ 82
Section 7.1 Financial Covenants............................ 82
Section 7.2 Indebtedness................................... 84
Section 7.3 Liens.......................................... 86
Section 7.4 Restriction on Fundamental Changes............. 87
Section 7.5 Sale of Assets................................. 88
Section 7.6 Contingent Obligations......................... 89
Section 7.7 Dividends...................................... 90
Section 7.8 Advances, Investments and Revolving Loans...... 91
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PAGE
Section 7.9 Transactions with Affiliates................... 92
Section 7.10 Limitation on Voluntary Payments and
Modifications of Certain Documents............. 94
Section 7.11 Changes in Business............................ 94
Section 7.12 Certain Restrictions........................... 95
Section 7.13 Lease Payments................................. 95
Section 7.14 Sales and Leasebacks........................... 95
Section 7.15 Plans.......................................... 96
Section 7.16 Fiscal Year; Fiscal Quarter.................... 96
Section 7.17 Dealer Accounts................................ 96
Section 7.18 Inactive Subsidiaries...........................96
SECTION 8. EVENTS OF DEFAULT............................................. 96
Section 8.1 Events of Default.............................. 96
Section 8.2 Rights and Remedies............................101
SECTION 9. THE AGENT.....................................................102
Section 9.1 Appointment....................................102
Section 9.2 Delegation of Duties...........................103
Section 9.3 Exculpatory Provisions.........................103
Section 9.4 Reliance by Agent..............................104
Section 9.5 Notice of Default..............................104
Section 9.6 Non-Reliance on Agent and Other Lenders........105
Section 9.7 Indemnification................................106
Section 9.8 Agent in its Individual Capacity...............106
Section 9.9 Successor Agent................................106
SECTION 10. MISCELLANEOUS.................................................107
Section 10.1 Payment of Expenses, Indemnity, etc............107
Section 10.2 Right of Setoff................................109
Section 10.3 Notices........................................109
Section 10.4 Successors and Assigns; Participation;.........110
Assignments
Section 10.5 Amendments and Waivers.........................113
Section 10.6 No Waiver; Remedies Cumulative.................114
Section 10.7 Sharing of Payments............................114
Section 10.8 Governing Law; Submission to Jurisdiction......115
iv
PAGE
Section 10.9 Counterparts...................................116
Section 10.10 Effectiveness..................................116
Section 10.11 Headings Descriptive...........................116
Section 10.12 Marshalling; Recapture.........................116
Section 10.13 Severability...................................116
Section 10.14 Survival.......................................117
Section 10.15 Domicile of Loans..............................117
Section 10.16 Limitation of Liability........................117
Section 10.17 Calculations; Computations.....................117
Section 10.18 Waiver of Trial by Jury........................117
ANNEXES
I Lenders and Commitments
SCHEDULES
1.1(a) Mortgaged Property
1.1(b) Permitted Organizational Changes
1.1(c) Restricted Subsidiaries
5.5 Contingent Liabilities
5.10 Governmental Approvals
5.11 Prior Security Interests
5.13 ERISA
5.17 Corporate Structure
5.21(a)(i) Real Property
5.21(a)(ii) Immaterial Real Property
5.21(b) Property Conditions
7.2 Indebtedness
7.3 Permitted Liens
7.5(c) Certain Sales of Assets
7.6(c) Contingent Liabilities
7.8 Investments
EXHIBITS
1.1 Form of Borrowing Base Certificate
2.2 Form of Term Note
2.3 Form of Notice of Borrowing
2.5 Form of Revolving Note
4.1(c)(i) Form of Confirmation of parties to the
Security Documents
4.1(c)(ii) Form of Acknowledgement of Guarantors
4.1(c)(iii) Form of Acknowledgement of Subordination
Agreements
4.1(f)(i) Form of Opinion of Weil, Gotshal & ▇▇▇▇▇▇ LLP
4.1(f)(ii) Form of Opinion of General Counsel
v
4.2(b)(i) Form of Opinion of Weil, Gotshal & ▇▇▇▇▇▇ LLP (For Initial Term
Loan Advance)
4.2(b)(ii) Form of Opinion of General Counsel (For Initial Term Loan
Advance)
7.4(a) Form of Permitted Organizational Change
Certificate
10.4(c) Form of Transfer Supplement
vi
SECOND AMENDED AND RESTATED CREDIT AGREEMENT (hereinafter the "Agreement"),
dated as of July 1, 1997, among GENMAR HOLDINGS, INC., a Delaware corporation
(the "Borrower"), the Lenders (as hereinafter defined), THE BANK OF NEW YORK,
acting in its capacity as agent for the Lenders and as Issuing Bank (as
hereinafter defined) and BNY CAPITAL MARKETS, INC., as Arranger (the
"Arranger").
W I T N E S S E T H
WHEREAS, the Borrower, the Banks and the Agent are parties to the
Amended and Restated Credit Agreement dated as of December 30, 1995, as
heretofore amended (as so amended and as otherwise in effect immediately prior
to the Effective Date, the "Existing Credit Agreement"), pursuant to which the
Banks agreed to make and have made certain credit facilities available to the
Borrower;
WHEREAS, the Borrower has requested that the Existing Credit Agreement be
amended and restated in its entirety to provide, among other things, that (a)
the Lenders extend credit in order to enable the Borrower (i) to borrow on a
revolving basis from time to time an aggregate principal amount not to exceed
$35,000,000, and (ii) to borrow on a term loan basis from the period from July
15, 1997 through and including January 19, 1998 in an aggregate principal amount
not to exceed $15,000,000 and (b) the Issuing Bank issue standby letters of
credit in an aggregate face amount not to exceed $23,000,000 outstanding at any
time;
WHEREAS, the Arranger desires to become a party hereto; and
WHEREAS, the proceeds of the revolving loans shall be used solely for
general corporate purposes, to fund ongoing working capital needs of the
Borrower and its Subsidiaries and, subject to compliance with Section 7.10 of
this Agreement, to repurchase a certain amount of the Borrower's 13.5%
Subordinated Notes, the proceeds of the term loan will be used solely to
repurchase up to $15,000,000 of the Borrower's 13.5% Subordinated Notes and the
letters of credit will be used to support contingent liabilities related to the
Borrower's insurance needs and for general corporate purposes.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the Borrower, the Lenders, and the
Agent hereby agree that, upon the satisfaction of the conditions precedent set
forth in Section 4.1 hereof, the Existing Credit Agreement is hereby amended and
restated in its entirety to read as follows:
SECTION 1. DEFINITIONS.
Section 1.1 DEFINITIONS. As used herein, the following terms shall
have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural number the singular.
"ACCOUNTS" shall mean all accounts, accounts receivable, other
receivables, contract rights, chattel paper, instruments, documents and notes,
whether now owned or hereafter acquired by the Borrower or any of its
Subsidiaries.
"ACCOUNT DEBTOR" shall mean any Person who is or who may become
obligated to the Borrower or any of its Subsidiaries under, with respect to, or
on account of, an Account.
"AFFILIATE" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors
and officers of such Person), controlled by, or under direct or indirect common
control with such Person. A Person shall be deemed to control a corporation if
such Person possesses, directly or indirectly, the power to (i) vote 5% or more
of the securities having ordinary voting power for the election of directors of
such corporation or (ii) direct or cause the direction of the management an
policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise.
"AGENT" shall mean The Bank of New York acting in its capacity as
agent for the Lenders and any successor agent appointed in accordance with
Section 9.9.
"AGENT'S OFFICE" shall mean the office of the Agent located at One
Wall Street, New York, New York
2
10286, or such other office as the Agent may hereafter designate in writing as
such to the other parties hereto.
"AGREEMENT" shall mean this Credit Agreement as the same may from time
to time hereafter be modified, restated, supplemented or amended.
"ALTERNATE BASE RATE" shall mean, at any particular date, the interest
rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to
the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Rate in effect on such day plus 1/2%. For purposes hereof, the term
"PRIME RATE" shall mean the prime commercial lending rate of The Bank of New
York as publicly announced from time to time, such rate to be adjusted
automatically, without notice, on the effective date of any change in such rate.
The term "FEDERAL FUNDS RATE" shall mean, for any day, the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York or, if such rate
is not so published for any day that is a Business Day, the average of the
quotations for the day of such transaction received by the Agent from three
Federal funds brokers of recognized standing selected by it. If the Agent shall
have determined that it is unable to ascertain the Federal Funds Rate for any
reason, including the inability or failure of the Agent to obtain sufficient
quotations in accordance with the terms hereof, the Alternative Base Rate shall
be determined with regard to clause (a) of the first sentence of this
definition, as appropriate, until the circumstances giving rise to such
inability no longer exist. Any change in the Alternate Base Rate due to a
change in the Prime Rate or the Federal Funds Rate shall be effective on the
effective date of such change in the Prime Rate or Federal Funds Rate,
respectively.
"ARRANGER" shall have the meaning provided in the preamble to this
Agreement.
"ASSIGNMENT OF RENTS AND LEASES" shall mean the assignment of rents
and leases which have been executed and delivered by the Loan Parties under and
in connection with the Original Agreement (as any such assignment of
3
rents and leases have been, are being or hereafter may be amended, modified or
supplemented from time to time).
"BANKRUPTCY CODE" shall mean Title 11 of the United States Code
entitled "Bankruptcy", as amended from time to time, and any successor statute
or statutes.
"BASE RATE LOANS" shall mean Revolving Loans and Term Loan made and/or
being maintained at a rate of interest based upon the Alternate Base Rate.
"BORROWER" shall have the meaning provided in the first paragraph of
this Agreement.
"BORROWING" shall mean the incurrence of one Type of Revolving Loan or
Term Loan from all the Lenders on a given date (or resulting from conversions or
continuations on a given date), having in the case of Eurodollar Loans the same
Interest Period.
"BORROWING BASE" shall mean during any month the sum of (i) 80% of the
Eligible Receivables and (ii) the lesser of (x) $50,000,000 and (y) 50% of the
Eligible Inventory. The applicable Borrowing Base for any given day shall be
the Borrowing Base set forth in the Borrowing Base Certificate most recently
delivered pursuant to Section 6.9.
"BORROWING BASE CERTIFICATE" shall mean a certificate in the form
attached hereto as EXHIBIT 1.1, signed by a senior financial officer of the
Borrower and stating the amount of the Borrower's Borrowing Base.
"BRITISH POUNDS" shall mean the lawful currency of the United Kingdom.
"BRITISH POUNDS REFERENCE RATE" shall mean the rate of exchange quoted
by The Bank of New York at 9:00 a.m. (New York City time) on the date of
determination to prime banks in New York City for spot purchase in the New York
City foreign exchange market of British Pounds.
"BUSINESS DAY" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day excluding Saturday, Sunday and any day which shall
be in New York City, Milwaukee or Minneapolis a legal holiday or a day on which
banking institutions are authorized or
4
required by law or other government actions to close and (ii) with respect to
all notices and determinations in connection with, and payments of principal and
interest on, Eurodollar Loans, any day which is a Business Day described in
clause (i) and which is also a day for trading by and between banks for U.S.
dollar deposits in the relevant interbank Eurodollar market.
"CAJUN BOAT CLOSURE" shall mean the closure and shutdown of the Cajun
Boat manufacturing facility located in Winnsboro, Louisiana.
"CAPITAL EXPENDITURES" shall mean, for any period, the sum of
expenditures (whether paid in cash or accrued as a liability, including the
portion of Capitalized Leases originally incurred during such period that is
capitalized on the consolidated balance sheet of the Borrower and its
Subsidiaries) by the Borrower and its Subsidiaries during such period that, in
conformity with GAAP, are included in "capital expenditures", "additions to
property, plant, tooling or equipment" or comparable items in the consolidated
financial statements of the Borrower and its Subsidiaries.
"CAPITALIZED LEASE" shall mean (i) any lease of property, real or
personal, the obligations under which are capitalized on the consolidated
balance sheet of the Borrower and its Subsidiaries, and (ii) any other such
lease to the extent that the then present value of the minimum rental commitment
thereunder should, in accordance with GAAP, be capitalized on a balance sheet of
the lessee.
"CAPITALIZED LEASE OBLIGATIONS" shall mean all obligations of the
Borrower and its Subsidiaries under or in respect of Capitalized Leases.
"▇▇▇▇▇▇" shall mean ▇▇▇▇▇▇ Boat Corporation, a Delaware corporation.
"CASH EQUIVALENTS" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than 90 days from the date of acquisition, (ii) time deposits and certificates
of
5
deposit of any Lender or any domestic commercial bank of recognized standing
having capital and surplus in excess of $500,000,000 with maturities of not more
than 90 days from the date of acquisition, (iii) fully secured repurchase
obligations with a term of not more than seven (7) days for underlying
securities of the types described in clause (i) entered into with any bank
meeting the qualifications specified in clause (ii) above, and (iv) commercial
paper issued by the parent corporation of any Lender or any domestic commercial
bank of recognized standing having capital and surplus in excess of $500,000,000
and commercial paper or master notes of issuers, rated at least A-2 or the
equivalent thereof by Standard & Poor's Corporation or at least P-2 or the
equivalent thereof by ▇▇▇▇▇'▇ Investor Services, Inc. and in each case maturing
within 90 days after the date of acquisition.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and any successor statute.
"COLLATERAL" shall mean all property and interests in property now
owned or hereafter acquired in or upon which a Lien has been or is purported or
intended to have been granted to the Agent or any Lender under any of the
Security Documents.
"COLLATERAL AGENT" has the meaning assigned to that term in the
Security Agreement.
"COMMITMENT" shall mean, for each Lender at any given time, the sum of
such Lender's Revolving Loan Commitment, Term Loan Commitment and its Standby
Letter of Credit Commitment.
"COMMITMENT FEE" shall have the meaning provided in Section 2.16(b)
"CONSENT FEES" shall mean the certain fees paid to the holders of the
Subordinated Notes in connection with the solicitation of consents of such
holders.
"CONSOLIDATED CUMULATIVE CASH FLOW" shall mean, for any period, the
sum of (i) Consolidated Operating Income for such period, PLUS (ii) depreciation
and amortization deducted in determining Consolidated Operating
6
Income for such period, all determined on a consolidated basis for the Borrower
and its Subsidiaries in accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for any fiscal period of
the Borrower, the total cash interest expense (including, without limitation,
interest expense attributable to Capitalized Leases in accordance with GAAP) of
the Borrower and its Subsidiaries accrued for such period determined on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED NET WORTH" shall mean, at any time, the sum of the
amount by which the total consolidated assets (as determined in accordance with
GAAP) of the Borrower and its Subsidiaries exceeds the Consolidated Total
Liabilities of the Borrower and its Subsidiaries at such time, excluding (i) any
writedowns for goodwill, provided that, in order for any writedown of goodwill
to be excluded for purposes of this definition, the Borrower shall have informed
the Agent and the Banks of its intention to take such writedown at least 45 days
prior to such writedown, (ii) the effect of any extraordinary non-recurring
charge (in an aggregate amount not to exceed $3,500,000) recorded as a result of
the Cajun Boat Closure and (iii) the amount up to $1,250,000 in the aggregate of
actual charges taken on account of early retirement of Subordinated Debt.
"CONSOLIDATED OPERATING INCOME" shall mean, for any period, the
operating income of the Borrower and its Subsidiaries on a consolidated basis
for such period (taken as a single accounting period) determined in accordance
with GAAP, exclusive, solely for purposes of the definition of Consolidated
Cumulative Cash Flow calculated for any period from the quarter ended March 31,
1997 through March 30, 1998, the effect of any extraordinary non-recurring
charge (in an aggregate amount not to exceed $2,400,000) recorded as a result of
the Cajun Boat Closure.
"CONSOLIDATED SENIOR DEBT" shall mean, at any time, Funded Debt MINUS
the principal amount of the outstanding Subordinated Debt at such time.
"CONSOLIDATED TOTAL LIABILITIES" shall mean, at any time, all
indebtedness of the Borrower and its Sub-
7
sidiaries on a consolidated basis, as determined in accordance with GAAP.
"CONTINGENT OBLIGATION" as to any Person shall mean any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (iv) otherwise to assure or hold harmless the owner
of such primary obligation against loss in respect thereof; PROVIDED, HOWEVER,
that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"CREDIT EXPOSURE" shall have the meaning provided in Section 10.4(c).
"DEALER ACCOUNTS" shall mean Accounts resulting from the sale of
Inventory by the Borrower or one of its Restricted Subsidiaries to a dealer of
pleasure boats, secured by a Lien on Inventory so sold and with a Due Date
greater than 60 days and no later than 12 months from the invoice date of any
such Account; provided that such Dealer Accounts shall not include Accounts,
generated from any dealer of pleasure boats whose primary place of business is
located outside the United States of
8
America, with terms greater than 60 days which are secured by an irrevocable
letter of credit.
"DEALER ACCOUNT PURCHASE AGREEMENT" shall mean a purchase agreement
pursuant to which a Dealer Account Transaction was consummated.
"DEALER ACCOUNT TRANSACTION" shall mean the sale by the Borrower and
any of its Subsidiaries of their respective dealer account financing business at
a price of not less than the face value of the assets sold thereby to one or
more financial institutions and for an aggregate purchase price of up to
$20,000,000 and which transaction or transactions may permit, during the months
of February through August, inclusive, only of each calendar year, an aggregate
outstanding amount of receivables so sold or from time to time guaranteed by the
Borrower and any of its Subsidiaries not to exceed $25,000,000 in the aggregate
during such period.
"DEFAULT" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"DEFAULT RATE" shall have the meaning provided in Section 2.6(c).
"DESIGNATED SUBSIDIARY" shall mean those Subsidiaries of the Borrower
listed as such on Schedule 1.1(b).
"DIVIDENDS" shall have the meaning provided in Section 7.7.
"DOMESTIC LENDING OFFICE" shall mean, as to any Lender, the office of
such Lender designated as such on Annex I, or such other office designated by
such Lender from time to time by written notice to the Agent and the Borrower.
"DUE DATE" shall mean the date on which payment is due with respect to
an Account, as indicated on the invoice or statement of Account rendered to the
Account Debtor.
9
"EFFECTIVE DATE" shall mean the date on which all conditions to
effectiveness set forth in Section 4.1 have been satisfied.
"ELIGIBLE INVENTORY" shall mean the first-in, first-out cost of such
of the Inventory of the Borrower and its Subsidiaries in which the Collateral
Agent has a perfected first priority security interest as the Agent, in its sole
discretion exercised in a professional manner, shall deem eligible, less such
reserves as the Agent, in its sole discretion, shall from time to time deem
appropriate. The Agent does not intend to treat an item of Inventory as
eligible if (i) any warranty or representation contained in this Agreement or
any of the Loan Documents applicable either to Eligible Inventory in general or
to any such specific Inventory has been breached with respect to such Inventory
or (ii) such Inventory is slow moving or obsolete.
"ELIGIBLE RECEIVABLES" shall mean the gross outstanding balance, less
all finance charges, late fees and other fees which are unearned, of Accounts
arising out of the lease or sale of goods or services by the Borrower or its
Subsidiaries in the ordinary course of their business in which the Collateral
Agent has a perfected first priority security interest which the Agent, in its
sole discretion exercised in a professional manner, shall deem eligible, and
less such reserves as the Agent, in its sole discretion, shall deem appropriate.
Without in any way limiting the discretion of the Agent to deem an Account
eligible or ineligible, the Agent does not currently intend to treat an Account
as eligible if:
(a) any warranty or representation contained in this Agreement, or
any of the Loan Documents applicable either to Accounts in general or to any
such specific Account has been breached with respect to such Account;
(b) twenty-five percent (25%) or more of the outstanding Accounts
from the Account Debtor which constituted Eligible Receivables at the time they
arose have become, or been determined by the Agent to be, ineligible;
(c) the Account Debtor has filed a petition for relief under the
Bankruptcy Code (or similar action under any successor law), made a general
assignment for
10
the benefit of creditors, had filed against it any petition or other application
for relief under the Bankruptcy Code (or similar action under any successor
law), failed, suspended business operations, become insolvent, called a meeting
of its creditors for the purpose of obtaining any financial concession or
accommodation, or had or suffered a receiver or a trustee to be appointed for
all or a significant portion of its assets or affairs;
(d) it has remained unpaid for a period exceeding 60 days after the
Due Date;
(e) the sale represented by such Account is to an Account Debtor
outside the United States, unless the sale is on letter of credit or acceptance
terms, and the issuer and such terms are acceptable to the Agent;
(f) the Account Debtor is an Affiliate or employee of the Borrower or
any of its Subsidiaries;
(g) the Account Debtor is a supplier or creditor of the Borrower or
any of its Subsidiaries (excluding an Account Debtor who is (x) an engine
supplier or (y) a creditor solely by reason of its participation in a joint
cooperative advertising arrangement with the Borrower or any of its
Subsidiaries, in each such event such Account will be deemed ineligible to the
extent of the amount owed by the Borrower or any of its Subsidiaries to such
Account Debtor);
(h) the Account is denominated in other than United States or
Canadian dollars or is payable outside the United States or Canada;
(i) the sale represented by such Account is on a ▇▇▇▇-and-hold,
undelivered sale, guaranteed sale, sale or return, consignment, or sale on
approval basis;
(j) the sale represented by such Account is on terms longer than 30
days unless such Account (i) is a Dealer Account, PROVIDED that (x) the
aggregate amount of Dealer Accounts to be included in Eligible Receivables shall
not exceed $2.5 million and (y) the Dealer Accounts subject to the Dealer
Account Transaction pursuant to the Dealer Account Purchase Agreement shall not
be included in Eligible Receivables or (ii) is to an Account Debtor outside the
United States on letter of credit or accep-
11
tance terms, and the issuer and such terms are acceptable to the Agent;
(k) the Agent has reason to believe that such Account may not be
paid;
(l) it is subject to any material claim or dispute by the Account
Debtor;
(m) it is subject to any set-off by the Account Debtor, in which
event such Account will be deemed ineligible to the extent of such set-off;
(n) it is subject to any Lien whatsoever, other than Liens in favor
of the Agent and Liens permitted pursuant to Section 7.3(b), (c) and (d);
(o) the Account is not evidenced by an invoice or other writing in
form acceptable to the Agent in its sole discretion;
(p) the Borrower or any of its Subsidiaries, in order to be entitled
to collect the Account, is required to perform any additional service for, or
perform or incur any additional obligation to, the Account Debtor (it being
understood that warranty obligations arising in the ordinary course of business
are not such obligations), except for Accounts of the Hatteras Yacht division of
the Borrower subject to "percentage of completion" accounting treatment under
GAAP; or
(q) the Account is an account of the United States government, the
government of any state of the United States or any political subdivision
thereof, or any agency or instrumentality of any of the foregoing, and the Agent
is not able to perfect a first priority security interest in such Account.
The Agent shall have discretion to classify Accounts into any of the foregoing
categories or such other categories as the Agent, in its sole discretion, deems
appropriate in determining the eligibility of Accounts.
"ENVIRONMENTAL AFFILIATE" shall mean, with respect to any Person, any
other Person whose liability for any Environmental Claim such Person has or may
have retained, assumed or otherwise become liable for (contin-
12
gently or otherwise), either contractually or by operation of law.
"ENVIRONMENTAL APPROVALS" shall mean any permit, license, approval,
ruling, variance, exemption or other authorization required under applicable
Environmental Laws.
"ENVIRONMENTAL CLAIM" shall mean, with respect to the Borrower, any
notice, claim, demand or similar written communication made upon the Borrower or
any of its Subsidiaries by any other Person (including any Environmental
Affiliate) alleging potential liability in connection with investigatory costs,
cleanup costs, governmental response costs, natural resources damages, property
damages, personal injuries, fines or penalties arising out of, based on or
resulting from (i) the presence, or release into the environment, of any
Material of Environmental Concern at any location, whether or not owned by such
Person or (ii) circumstances forming the basis of any violation, or alleged
violation, of any Environmental Law.
"ENVIRONMENTAL LAWS" shall mean all Federal, state, local and foreign
laws and regulations relating to pollution or protection of human health or the
environment (including, without limitation, ambient air, surface water, ground
water, land surface or subsurface strata), including without limitation, laws
and regulations relating to emissions, discharges, releases or threatened
releases of Materials of Environmental Concern, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern.
"ENVIRONMENTAL LIEN" shall mean any Lien imposed pursuant to any
Environmental Law with respect to any of the Properties.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time. Section references to ERISA are to ERISA,
as in effect at the date of this Agreement and any subsequent provisions of
ERISA, amendatory thereof, supplemental thereto or substituted therefor.
13
"ERISA CONTROLLED GROUP" means a group consisting of any ERISA Person
and all members of a controlled group of corporations and all trades or
businesses (whether or not incorporated) under common control with such Person
that, together with such Person, are treated as a single employer under
regulations of the PBGC.
"ERISA PERSON" shall have the meaning set forth in Section 3(9) of
ERISA for the term "person."
"ERISA PLAN" means any Plan that (i) is not a Multiemployer Plan and
(ii) has Unfunded Benefit Liabilities in excess of $250,000.
"EUROCURRENCY RESERVE REQUIREMENTS" shall mean, with respect to each
day during an Interest Period for Eurodollar Loans, that percentage (expressed
as a decimal) which is in effect on such day, as prescribed by the Federal
Reserve Board or other governmental authority or agency having jurisdiction with
respect thereto for determining the maximum reserves (including, without
limitation, basic, supplemental, marginal and emergency reserves) for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D) maintained by a member bank of the Federal Reserve System.
"EURODOLLAR BASE RATE" shall mean, with respect to each day during an
Interest Period for Eurodollar Loans, the rate per annum (rounded upwards to the
nearest whole multiple of one-sixteenth of one percent) equal to the offered
quotation to first class banks in the interbank eurodollar market by The Bank of
New York two Business Days prior to the beginning of such Interest Period at or
about 10:00 A.M., New York City time, for delivery on the first day of such
Interest Period for the number of days comprised therein and in an amount
comparable to the amount of the Eurodollar Loan of The Bank of New York to be
outstanding during such Interest Period.
"EURODOLLAR LENDING OFFICE" shall mean, as to any Lender, the office
of such Lender designated as such on Annex I, or such other office designated by
such Lender from time to time by written notice to the Agent and the Borrower.
14
"EURODOLLAR LOANS" shall mean Revolving Loans and Term Loan made
and/or being maintained at a rate of interest based upon the Eurodollar Rate.
"EURODOLLAR RATE" shall mean with respect to each day during an
Interest Period for Eurodollar Loans, a rate per annum determined for such day
in accordance with the following formula (rounded upwards to the nearest whole
multiple of 1/100th of one percent):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"EXISTING CREDIT AGREEMENT" shall have the meaning provided in the
preamble to this Agreement.
"EVENT OF DEFAULT" shall have the meaning provided in Section 8.
"EXISTING NOTES" shall mean, collectively, the Subordinated
Shareholder Note and the Subordinated Demand Note.
"EXISTING STANDBY LETTER OF CREDIT" shall mean that certain standby
letter of credit issued for the account of the Borrower in favor of PCS Health
Systems, Inc., of Phoenix, Arizona, in the maximum face amount of $50,000.
"FAIR MARKET VALUE" shall mean, with respect to any asset or property,
the price which could be negotiated in an arm's-length free market transaction,
for cash, between a willing seller and a willing buyer, neither of whom is under
undue pressure or compulsion to complete the transaction. Fair Market Value
shall be determined by a majority of the members of the board of directors of
the Borrower and a majority of the disinterested members of such board of
directors, if any, acting in good faith and shall be evidenced by a duly and
properly adopted resolution of the board of directors; except that any
determination of Fair Market Value made with respect to any real property or
personal property which is customarily appraised shall be made by an independent
qualified appraiser acceptable to the Agent and the Required Lenders.
15
"FEDERAL RESERVE BOARD" shall mean the Board of Governors of the
Federal Reserve System as constituted from time to time.
"FEE LETTERS" shall mean the fee letters entered into by the Borrower,
the Agent, the Arranger and/or the Lenders.
"FEES" shall mean all amounts payable pursuant to Section 2.16 and
pursuant to the Fee Letters.
"FINAL MATURITY DATE" shall mean June 30, 2000.
"FLOOR PLAN FINANCING" shall mean that certain floor planning
arrangement among the Borrower and/or any of its Subsidiaries and one or more
financial institutions pursuant to which any such financial institution provides
credit to retail dealers and wholesale distributors which purchase goods from
the Borrower and any of its Subsidiaries.
"FUNDED DEBT" shall mean Indebtedness of the types referred to in
subclauses (i), (ii) and (iii) of the definition of "Indebtedness".
"GAAP" shall mean United States generally accepted accounting
principles as in effect on the date hereof and consistent with those utilized in
the preparation of the financial statements referred to in Section 5.5.
"GII" shall mean Genmar Industries, Inc., a Delaware corporation and a
wholly-owned indirect subsidiary of the Borrower.
"GUARANTORS" shall mean the Restricted Subsidiaries and each other
Person who executes and delivers to the Agent an agreement to become a Guarantor
in the form of Annex B to the Guaranty.
"GUARANTY" shall mean each guaranty which has been executed and
delivered by each Guarantor under and in connection with the Original Agreement
and the Existing Credit Agreement, together with each other guaranty required to
be executed in accordance with the terms and provisions hereof (as any such
guaranty have been, are
16
being or hereafter may be amended, modified or supplemented from time to time).
"HEDGING AGREEMENTS" shall mean interest rate swap, cap or collar
agreements, interest rate future or option contracts and other similar
agreements.
"IMPROVEMENTS" shall mean have the meaning set forth therefor in the
Mortgages.
"INDEBTEDNESS" of any Person shall mean, without duplication, (i) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services, other than (x) trade payables on terms of 90 days
or less incurred in the ordinary course of business of such Person and (y) notes
issued in connection with insurance premiums payable in the ordinary course of
business of such Person in an aggregate principal amount not to exceed $750,000
outstanding at any time, (ii) all indebtedness of such Person evidenced by a
note (other than such notes referred to in subclause (i)(y) of this definition),
bond, debenture or similar instrument, (iii) the principal component of all
Capitalized Lease obligations of such Person, (iv) the face amount of all
letters of credit issued for the account of such Person and, without
duplication, all unreimbursed amounts drawn thereunder, (v) all indebtedness of
any other Person secured by any Lien on any property owned by such Person,
whether or not such indebtedness has been assumed, (vi) all Contingent
Obligations of such Person, and (vii) all Hedging Agreements and currency swaps
and similar agreements of such Person in accordance with GAAP.
"INTEREST PERIOD" shall have the meaning provided in Section 2.7.
"INTERNAL FINANCIALS" shall have the meaning provided in Section 5.5.
"INVENTORY" shall mean any and all now owned or hereafter acquired
inventory, goods, merchandise, and other tangible personal property intended for
sale or lease, in the custody or possession, actual or constructive, of the
Borrower or any of its Subsidiaries, or in transit to the Borrower or any of its
Subsidiaries, including such inventory as is on consignment to third par-
17
ties, leased to customers of the Borrower or any of its Subsidiaries, or
otherwise temporarily out of the custody or possession of the Borrower or any of
its Subsidiaries.
"ISSUING BANK" shall mean The Bank of New York acting in its capacity
as issuing bank of the Standby Letters of Credit and any successor issuing bank
appointed in accordance with Section 3.7.
"LC DISBURSEMENT" shall mean any payment or disbursement made by the
Issuing Bank under or pursuant to a Standby Letter of Credit.
"LC EXPOSURE" shall mean, at any time of determination, the sum of (a)
the aggregate undrawn amount of all Standby Letters of Credit outstanding at
such time and (b) the aggregate amount that has been drawn under any Standby
Letters of Credit but for which the Issuing Bank or the Lenders, as the case may
be, have not been reimbursed by the Borrower at such time.
"LENDERS" shall mean the financial institutions listed on Annex I
hereto and the financial institutions which from time to time become a party
hereto in accordance with Section 10.4(c).
"LETTER OF CREDIT APPLICATION" shall mean a standby letter of credit
application in the Issuing Bank's customary form, as such form may be modified
from time to time by the Issuing Bank.
"LEVERAGE RATIO" shall mean, for any period of determination, the
ratio of Funded Debt to Consolidated Cumulative Cash Flow.
"LIEN" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), or preference,
priority or other security agreement of any kind or nature whatsoever,
including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same effect as any of
the foregoing and the filing of any financing statement or similar instrument
under the Uniform Commercial Code or comparable law of any jurisdiction,
domestic or foreign.
18
"LOAN DOCUMENTS" shall mean this Agreement, the Revolving Notes, the
Term Notes, the Guaranties, the Fee Letters, the Security Documents, the
Subordination Agreements and Hedging Agreements entered into by the Borrower or
its Subsidiaries, as applicable, with one or more Lenders.
"LOAN PARTY" shall mean and include the Borrower and the Restricted
Subsidiaries.
"LOANS" shall mean the Revolving Loans and the Term Loan.
"MARGIN PERCENTAGE" shall mean at any time that percentage (a) to be
added to the ABR Rate pursuant to Section 2.6(a), for purposes of determining
the per annum rate of interest applicable from time to time to Base Rate Loans,
(b) to be added to the Eurodollar Rate pursuant to Section 2.6(b), for purposes
of determining the per annum rate of interest applicable from time to time to
Eurodollar Loans, and (c) to be used in computing the Commitment Fee pursuant to
Section 2.16(b), which in each case on any date shall be the applicable
percentage set forth under the appropriate column below opposite the category in
which the Borrower's Leverage Ratio, determined as of the end of the most recent
fiscal quarter for which financial statements are required to have been
delivered under Section 6.1(b) (whether or not such statements or statements for
any subsequent quarter shall in fact have been delivered, subject to the proviso
set forth below), shall fall (or which shall otherwise be applicable as provided
below):
Leverage Commitment LIBOR ABR
Ratio Fee Spread Spread
-------- ---------- ------ ------
Category 1 >4.0 to 1.0 0.50% 2.75% 1.25%
Category 2 >3.5 to 1.00 0.50% 2.50% 1.00%
and less
than or
equal to
4.0 to 1
Category 3 >3.0 to 1 0.375% 2.25% 0.75%
and less
than or
equal to
3.5 to 1.0
Category 4 less than 0.375% 1.75% 0.25%
or equal to
3.0 to 1
19
provided that, notwithstanding the foregoing (i) with respect to borrowings on
the Effective Date, the Margin Percentage shall be determined by reference to
Category 1, (ii) until the date on which financial statements for the quarter
ended June 30, 1997 are required to be delivered to the Agent (or, if earlier,
the actual date of delivery of such statements) the Margin Percentage shall be
determined by reference to Category 1, (iii) at any time during which the
Borrower has failed to deliver the financial statements and the certificates
described in Section 6.1(b) with respect to a fiscal quarter in accordance with
the provisions thereof, or at any time during which an Event of Default shall
have occurred and shall be continuing, the Margin Percentage shall be determined
by reference to Category 1 and (iv) any decrease in the Margin Percentage
resulting from a change in the Leverage Ratio shall be effective only after
being requested pursuant to the certificate of the Borrower delivered in
accordance with Section 6.1(f)(iii). Changes in the Margin Percentage shall
become effective on the first day on which the financial statements covering the
quarter-end date as of which such ratios are computed have been delivered to the
Agent.
"MARGIN STOCK" shall have the meaning provided such term in Regulation
U and Regulation G of the Federal Reserve Board.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect upon
(i) the business, operations, properties, assets, prospects or condition
(financial or otherwise) of the Borrower and its Subsidiaries, taken as a whole,
or (ii) the ability of any Loan Party to perform, or of the Agent or any of the
Lenders to enforce, any of the Obligations.
"MATERIALS OF ENVIRONMENTAL CONCERN" shall mean and include chemicals,
pollutants, contaminants, wastes, toxic substances, petroleum and petroleum
products.
"MORTGAGE AMENDMENTS" shall have the meaning provided in Section
4.1(d) hereof.
"MORTGAGED PROPERTIES" shall mean each Property set forth on Schedule
1.1(a) hereto.
20
"MORTGAGES" shall mean the mortgages and/or deeds of trust encumbering
the Mortgaged Property which have been executed and delivered to the Agent by
the Loan Parties party thereto under and in connection with the Original
Agreement, the Existing Credit Agreement and this Agreement (as any such
mortgages have been, are being or hereafter may be amended, modified or
supplemented from time to time).
"MULTIEMPLOYER PLAN" shall mean a Plan which is a "multiemployer plan"
as defined in Section 4001(a)(3) of ERISA.
"NOTICE OF BORROWING" shall have the meaning provided in Section
2.3(a).
"NOTICE OF CONVERSION OR CONTINUATION" shall have the meaning provided
in Section 2.9(b).
"OBLIGATIONS" shall mean all obligations, liabilities and indebtedness
of every nature of the Borrower and the Guarantors from time to time owing to
the Agent, the Issuing Bank or any Lender under or in connection with this
Agreement or any other Loan Document.
"OFFERING MEMORANDUM" shall mean the offering Memorandum, dated July
12, 1994, for the $100,000,000 Genmar Holdings, Inc. 13.5% Senior Subordinated
Notes Due 2001.
"ORIGINAL AGREEMENT" shall mean the Credit Agreement, dated as of July
19, 1994, among the Borrower, the lenders party thereto and the Agent, as in
effect prior to its amendment and restatement pursuant to the Existing Credit
Agreement.
"ORIGINAL EFFECTIVE DATE" shall mean the "Effective Date" as defined
in the Original Agreement.
"OUTSTANDING STANDBY LETTERS OF CREDIT" shall mean at any time the
Standby Letters of Credit outstanding at such time.
"PARTICIPANT" shall have the meaning provided in Section 10.4(b).
21
"PAYMENT DATE" shall mean the last day of each September, December,
March and June of each year.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
under ERISA, or any successor thereto.
"PERMITTED LIENS" shall have the meaning.provided in Section 7.3(a).
"PERMITTED ORGANIZATIONAL CHANGES" shall mean the changes to the
ownership of Subsidiaries and the transfer of assets among the Loan Parties
described in Schedule 1.1(b).
"PERSON" shall mean and include any individual, partnership, joint
venture, firm, corporation, association, trust or other enterprise or any
government or political subdivision or agency, department or instrumentality
thereof.
"PLAN" shall mean any employee benefit plan as to which the Borrower
or a member of its ERISA Controlled Group has any liability under Title IV of
ERISA (whether or not assessed), the funding requirements of which:
(i) are, as of the date of determination, the responsibility of
the Borrower or a member of its ERISA Controlled Group, or
(ii) was the responsibility of the Borrower or a member of its
ERISA Controlled Group at any time within the five years preceding the
date of determination and was terminated or the responsibility for
which was transferred to a Person other than the Borrower or a member
of its ERISA Controlled Group.
"PLEDGE AGREEMENT" shall mean the pledge agreement which has been
executed and delivered by the Loan Parties party thereto under and in connection
with the Original Agreement (as such pledge agreement has been, is being or
hereafter may be amended, modified or supplemented from time to time).
22
"PROPERTIES" shall mean the real properties, and the improvements
thereon, listed on Schedule 5.21(a)(i).
"PRO RATA SHARE" as to any Lender shall mean a fraction (expressed as
a percentage), the numerator of which shall be the aggregate amount of such
Lender's Commitments and the denominator of which shall be the Total Commitment.
"PURCHASING LENDERS" shall have the meaning provided in Section
10.4(c).
"RECOURSE OBLIGATIONS" shall mean the recourse and repurchase
obligations of the Borrower and any of its Subsidiaries pursuant to a Repurchase
Agreement.
"REGULATION D" shall mean Regulation D of the Federal Reserve Board as
from time to time in effect and any successor to all or any portion thereof.
"REPORTABLE EVENT" has the meaning set forth in Section 4043(b) of
ERISA (other than a Reportable Event as to which the provision of 30 days'
notice to the PBGC is waived under applicable regulations), or is the occurrence
of any of the events described in Section 4063(a) of ERISA.
"REPURCHASE AGREEMENT" shall mean that certain Manufacturer's
Repurchase Agreement to which the Borrower and any of its Subsidiaries is a
party with one or more financial institutions in the form heretofore provided to
the Agent, together with any similar agreement with any other vendors providing
transactions substantially similar to the agreement attached as Annex II to the
Existing Credit Agreement.
"REQUIRED LENDERS" shall mean Lenders holding more than 83% of the
principal amount of Loans outstanding or, if no Loans are outstanding, more than
83% of the Total Commitments.
"RESPONSIBLE OFFICER" of any Person shall mean the chief executive
officer, the chief operating officer, the chief financial officer or the general
counsel of such Person.
23
"RESTRICTED SUBSIDIARIES" shall mean those Subsidiaries of the
Borrower set forth on Schedule 1.1(c) and each Person required to become a
Guarantor pursuant to Section 6.13.
"REVOLVING LOAN COMMITMENT" shall mean at any time, for any Lender,
the amount set forth opposite such Lender's name on Annex I hereto under the
heading "Revolving Loan Commitment," as such amount may be reduced from time to
time pursuant to Sections 2.10, 2.11, 2.14 or 10.4(c).
"REVOLVING LOANS" shall have the meaning provided in Section 2.1(a).
"REVOLVING NOTES" shall have the meaning provided in Section 2.5(a).
"ROCKY POINT NOTE" shall mean that certain promissory note of Del
Laboratories, Inc., dated May 15, 1997, in favor of ▇▇▇▇▇▇ in the aggregate
principal amount of $5,225,000 which was received in connection with the sale of
the facility located at Rocky Point, North Carolina.
"SECURITY AGREEMENT" shall mean the security agreement which has been
executed and delivered by the Loan Parties party thereto under and in connection
with the Original Agreement, together with each other security agreement
required to be executed in accordance with the terms and provisions of the
Original Agreement, the Existing Credit Agreement and this Agreement (as any
such security agreement have been, are being or hereafter may be amended,
modified or supplemented from time to time).
"SECURITY DOCUMENTS" shall mean and include the Security Agreement,
the Pledge Agreement, the Trademark Security Agreement, the Mortgages and the
Assignments of Rents and Leases.
"SOLVENT" as to any Person shall mean that (i) the sum of the assets
of such Person, both at a fair valuation and at present fair salable value, will
exceed its liabilities, including contingent liabilities, (ii) such Person will
have sufficient capital with which to conduct its business as presently
conducted and as proposed to be conducted and (iii) such Person has not
24
incurred debts, and does not intend to incur debts, beyond its ability to pay
such debts as they mature. For purposes of this definition, "debt" means any
liability on a claim, and "claim" means (x) a right to payment, whether or not
such right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured, or
unsecured, or (y) a right to an equitable remedy for breach of performance if
such breach gives rise to a payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured, or unsecured. With respect to any such contingent
liabilities, such liabilities shall be computed at the amount which, in light of
all the facts and circumstances existing at the time, represents the amount
which can reasonably be expected to become an actual or matured liability.
"STANDBY LETTER OF CREDIT" shall have the meaning provided in Section
3.1.
"STANDBY LETTER OF CREDIT COMMITMENT" shall mean at any time, for any
Lender, the amount set forth opposite such Lender's name on Annex I hereto under
the heading "Standby Letter of Credit Commitment," as such amount may be reduced
from time to time pursuant to Sections 2.10, 2.11 or 10.4(c).
"SUBORDINATED DEBT" shall mean the Indebtedness in principal amount of
up to $100,000,000 with a term of not less than seven years from the date of
issue of the Borrower incurred pursuant to the Subordinated Debt Financing
Documents, of which an aggregate principal amount of $100,000,000 is outstanding
as of the Effective Date.
"SUBORDINATED DEBT FINANCING DOCUMENTS" shall mean and include the
Offering Memorandum, the Indenture, dated as of July 1, 1994 among the Borrower,
the parties listed as "Guarantors" therein and First Trust National Association,
as Trustee, and the Purchase Agreement, dated July 12, 1994, among Wertheim
▇▇▇▇▇▇▇▇ & Co. Incorporated, the Borrower and the "Guarantors" as defined
therein.
"SUBORDINATED DEMAND NOTE" shall mean the $25,000,000 demand note
dated March 31, 1994 payable to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or any replacement thereof made
in ac-
25
cordance with the terms of the applicable Subordination Agreement.
"SUBORDINATED NOTE" shall mean the 13.5% Series A Senior Subordinated
Note of the Borrower due 2001.
"SUBORDINATED SHAREHOLDER NOTE" shall mean the $4,104,422.12
shareholder note dated November 24, 1993 payable to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
"SUBORDINATION AGREEMENTS" shall mean those certain Subordination
Agreements, each dated as of the Effective Date, between ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and The
Bank of New York, as agent for the Lenders, as amended, modified or supplemented
in accordance with the terms hereof.
"SUBSIDIARY" of any Person shall mean and include (i) any corporation
50% or more of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity in which such Person, directly or indirectly through
Subsidiaries,is either a general partner or has a 50% or more equity interest at
the time.
"TAXES" shall have the meaning provided in Section 2.20.
"TERMINATION EVENT" shall mean (i) a Reportable Event with respect to
an ERISA Plan, or (ii) the initiation of any action by the Borrower, any member
of the Borrower's ERISA Controlled Group or any ERISA Plan fiduciary to
terminate an ERISA Plan or the treatment of an amendment to an ERISA Plan as a
termination under ERISA, or (iii) the institution of proceedings by the PBGC
under Section 4042 of ERISA to terminate an ERISA Plan or to appoint a trustee
to administer any ERISA Plan.
"TERM LOAN" shall have the meaning provided in Section 2.2.
26
"TERM LOAN ADVANCE" shall have the meaning provided in Section 2.2.
"TERM LOAN BORROWING DATE" shall mean a date on which the Borrower has
borrowed a Term Loan Advance as provided by Section 2.3.
"TERM LOAN BORROWING PERIOD" shall have the meaning provided in
Section 2.2.
"TERM LOAN COMMITMENT" shall mean at any time, for any Lender, the
amount set forth opposite such Lender's name on Annex I hereto under the heading
"Term Loan Commitment", as such amount may be reduced from time to time pursuant
to Sections 2.10, 2.14 or 10.4(c).
"TERM LOAN MATURITY DATE" shall mean June 30, 2000.
"TERM NOTE" shall have the meaning provided in Section 2.2.
"TITLE COMPANY" shall have the meaning provided in Section 4.1.
"TFC" shall mean Textron Financial Corporation.
"TOTAL COMMITMENT" shall mean, at any time, the sum of the Commitments
of all of the Lenders at such time.
"TOTAL REVOLVING LOAN COMMITMENT" shall have the meaning provided in
Section 2.1(a).
"TOTAL TERM LOAN COMMITMENT" shall have the meaning provided in
Section 2.2(a).
"TOTAL STANDBY LETTER OF CREDIT COMMITMENT" shall mean the sum of the
Standby Letter of Credit Commitments of all Lenders, which on the Effective Date
shall be $23,000,000.00.
"TRADEMARK SECURITY AGREEMENT" shall mean that certain trademark
security agreement which was entered into in connection with the Original
Agreement, between the Loan Parties party thereto and the Collateral Agent,
together with each other trademark security agreement
27
required to be executed in accordance with the terms and provisions of the
Original Agreement, the Existing Credit Agreement and this Agreement (as any
such trademark security agreement have been, are being or hereafter may be
amended, modified or supplemented from time to time).
"TRANSACTION DOCUMENTS" shall mean the Loan Documents and the
Subordinated Debt Financing Documents.
"TRANSACTIONS" shall mean each of the transactions contemplated by the
Transaction Documents.
"TRANSFEREE" shall have the meaning provided in Section 10.4(d)
"TRANSFER SUPPLEMENT" shall have the meaning provided in Section
10.4(c).
"TYPE" shall mean any type of Revolving Loan or Term Loan determined
with respect to the interest option applicable thereto, I.E., a Base Rate Loan
or a Eurodollar Loan.
"UNFUNDED BENEFIT LIABILITIES" means with
respect to any ERISA Plan at any time, the amount (if any) by which (i) the
present value of all benefit liabilities under such Plan as defined in Section
4001(a)(16) of ERISA, exceeds (ii) the fair market value of all assets of such
Plan allocable to such benefits, all determined as of the then most recent
valuation date for such Plan (on the basis of reasonable assumptions used by the
actuary for such Plan for funding purposes in the most recent actuarial
valuation with respect to such Plan.
SECTION 2. AMOUNT AND TERMS OF CREDIT FACILITIES.
Section 2.1 REVOLVING LOANS. (a) On the Effective Date, the
aggregate outstanding amount of Revolving Loans is $8,000,000. Subject to and
upon the terms and conditions herein set forth, each Lender severally and not
jointly agrees, at any time and from time to time on and after the Effective
Date and prior to the Final Maturity Date, to make revolving loans
(collectively, "REVOLVING LOANS") to the Borrower, which Revolving Loans shall
not exceed in aggregate principal amount at any time outstanding the Revolving
Loan Commitment of
28
such Lender at such time; PROVIDED, HOWEVER, that such Lender shall not have any
obligation to make any Revolving Loan if the sum of (x) the aggregate principal
amount of outstanding Revolving Loans, before and after such Revolving Loan is
made, (y) the aggregate principal amount of the outstanding Term Loan and (z)
the LC Exposure exceeds the Borrowing Base as then in effect. The sum of the
Revolving Loan Commitments of all of the Lenders (the "TOTAL REVOLVING LOAN
COMMITMENT") on the Effective Date is $35,000,000.00. On the Final Maturity Date
the Total Revolving Loan Commitment shall terminate, expire and be reduced to
zero. The Revolving Loans of each Lender may be maintained at the option of the
Borrower as a Base Rate Loan or a Eurodollar Loan, in accordance with the
provisions hereof.
(b) Revolving Loans may be voluntarily prepaid pursuant to
Section 2.12, and, subject to the other provisions of this Agreement, any
amounts so prepaid may be reborrowed. Each Lender's Revolving Loan Commitment
shall expire, and each Revolving Loan shall mature on, the Final Maturity Date,
without further action on the part of the Lenders or the Agent.
(c) Each Borrowing of Revolving Loans shall be in the aggregate
minimum amount of $1,000,000 or any integral multiple of $1,000,000 in excess
thereof.
Section 2.2 TERM LOAN. (a) Subject to and upon the terms and
conditions hereof, each Lender severally and not jointly agrees to make term
loans (each a "TERM LOAN ADVANCE" and collectively the "TERM LOAN") to the
Borrower in an aggregate principal amount not to exceed such Lender's Term Loan
Commitment; PROVIDED, HOWEVER, that such Lender shall not have any obligation to
make any Term Loan Advances if the sum of (x) the aggregate principal amount of
the outstanding Term Loan, before and after such Term Loan Advance is made, (y)
the aggregate principal amount of outstanding Revolving Loans and (z) the LC
Exposure exceeds the Borrowing Base then in effect. The sum of the Term Loan
Commitments of all of the Lenders is $15,000,000 (the "TOTAL TERM LOAN
COMMITMENT"). The Term Loan Advances will be available to be borrowed on any
Business Day during the period from July 15, 1997 to and including January 19,
1998 (such period, the "TERM LOAN BORROWING PERIOD"), provided that in no event
shall there be more than three (3) borrowings
29
of Term Loan Advances. Each Borrowing of Term Loan Advances shall be in the
aggregate minimum amount of $1,000,000 or any integral multiple of $1,000,000 in
excess thereof.
(b) The Term Loan shall be payable in five (5) semi-annual
installments on June 30 and December 30 of each year, commencing June 30, 1998,
in an amount of 20% of the principal amount of the Term Loan outstanding at the
end of the Term Loan Borrowing Period, together with accrued and unpaid
interest in accordance with Section 2.6(d), with the entire unpaid principal
amount together with all accrued and unpaid interest being due and payable on
the Term Loan Maturity Date.
(c) The Borrower's obligation to pay the principal of, and
interest on, each Lender's Term Loan will be evidenced by a promissory note
(collectively, the "TERM NOTES") duly executed and delivered by the Borrower in
the form of Exhibit 2.2 hereto in a principal amount equal to such Lender's Term
Loan, with blanks appropriately completed in conformity herewith. Each Term
Note issued to a Lender shall (w) bear interest as provided in Section 2.6, (x)
be payable to the order of such Lender, (y) be dated the initial Term Loan
Borrowing Date and (z) mature on the Term Loan Maturity Date.
Each Lender is hereby authorized, at its option, either (i)
to endorse on the schedule attached to its Term Note (or on a continuation of
such schedule attached to such Term Note and made a part thereof) an appropriate
notation evidencing the date and amount of each principal and interest payment
in respect thereof, or (ii) to record such payments in its books and records;
PROVIDED that the failure of any Lender to make such notation or any error
therein shall not affect the obligation of the Borrower to repay the Term Loan
made by such Lender in accordance with the terms of this Agreement and the other
Loan Documents. Such schedule or such books and records, as the case may be,
shall constitute prima facie evidence of the accuracy of the information
contained therein.
Section 2.3 NOTICE OF BORROWING. (a) Whenever the Borrower desires
to borrow Loans hereunder, it shall give the Agent at the Agent's Office prior
to 12:00 noon, New York City time, on the day of each requested
30
Base Rate Loan prior telex, telecopy or telephonic notice (promptly confirmed in
writing) of each Base Rate Loan, and at least three Business Days' prior telex,
telecopy or telephonic notice (promptly confirmed in writing) of each Eurodollar
Loan to be made hereunder. Each such notice (a "NOTICE OF BORROWING") shall be
irrevocable and shall specify (i) the aggregate principal amount of the
requested Loans, (ii) the date of Borrowing (which shall be a Business Day), and
(iii) whether such Loans shall consist of Base Rate Loans or Eurodollar Loans
and, if Eurodollar Loans, the initial Interest Period to be applicable thereto
(provided, that no Eurodollar Loans may be requested or made when any Default or
Event of Default has occurred and is continuing).
(b) Promptly after receipt of a Notice of Borrowing, the Agent
shall provide each Lender with a copy thereof and inform each Lender as to its
Pro Rata Share of the Loans requested thereunder.
Section 2.4 DISBURSEMENT OF FUNDS. (a) No later than 1:00 P.M., New
York City time, on the date specified in each Notice of Borrowing, each Lender
will make available its Pro Rata Share of the Loans requested to be made on such
date, in U.S. dollars and immediately available funds, at the Agent's office.
After the Agent's receipt of the proceeds of such Loans, the Agent will make
available to the Borrower by depositing in the Borrower's account at the Agent's
Office the aggregate of the amounts so made available in the type of funds
actually received. After the end of the Term Loan Borrowing Period, the
balance, if any, of the Term Loan Commitment of each Lender shall be reduced to
zero.
(b) Unless the Agent shall have been notified by any Lender
prior to the date of a Borrowing that such Lender does not intend to make
available to the Agent its portion of the Loans to be made on such date, the
Agent may assume that such Lender has made such amount available to the Agent on
such date and the Agent in its sole discretion may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Agent by such Lender
and the Agent has made such amount available to the Borrower, the Agent shall be
entitled to recover such corresponding amount on demand from such Lender. If
such Lender does not pay
31
such corresponding amount forthwith upon the Agent's demand therefor, the Agent
shall promptly notify the Borrower and the Borrower shall immediately repay such
corresponding amount to the Agent. The Agent shall also be entitled to recover
from such Lender or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Agent to the Borrower to the date such
corresponding amount is recovered by the Agent, at a rate per annum equal to (i)
in the case of the Borrower, the then applicable rate of interest, calculated in
accordance with Section 2.6, for the respective Loans and (ii) in the case of
such Lender, at the Federal Funds Rate until the day three (3) Business Days
from such date and thereafter at the then applicable rate of interest,
calculated in accordance with Section 2.6, for the respective Loans. Nothing
herein shall be deemed to relieve any Lender from its obligation to fulfill its
commitments hereunder or to prejudice any rights which the Borrower may have
against any Lender as a result of any default by such Lender hereunder.
Notwithstanding anything contained herein or in any other Loan Document to the
contrary, the Agent may apply all funds and proceeds of Collateral available for
the payment of any Obligations first to repay any amount owing by any Lender to
the Agent as a result of such Lender's failure to fund its Loans hereunder.
Section 2.5 REVOLVING NOTES. (a) The Borrower's obligation to pay
the principal of, and interest on, each Lender's Revolving Loans is evidenced by
a promissory note (collectively, the "REVOLVING NOTES") duly executed and
delivered by the Borrower in the form of Exhibit 2.5 hereto in a principal
amount equal to such Lender's Revolving Loan Commitment, with blanks
appropriately completed in conformity herewith. Each Revolving Note issued to a
Lender shall (w) bear interest as provided in Sections 2.6 (x) be payable to the
order of such Lender, (y) be dated the Effective Date and (z) mature on the
Final Maturity Date.
(b) Each Lender is hereby authorized, at its option, either (i)
to endorse on the schedule attached to its Revolving Note (or on a continuation
of such schedule attached to such Revolving Note and made a part thereof) an
appropriate notation evidencing the date and amount of each Revolving Loan
evidenced thereby and
32
the date and amount of each principal and interest payment in respect thereof,
or (ii) to record such Revolving Loans and such payments in its books and
records; PROVIDED that the failure of any Lender to make such notation or any
error therein shall not affect the obligation of the Borrower to repay the
Revolving Loans made by such Lender in accordance with the terms of this
Agreement and the other Loan Documents. Such schedule or such books and
records, as the case may be, shall constitute prima facie evidence of the
accuracy of the information contained therein.
Section 2.6 INTEREST. (a) The Borrower agrees to pay interest in
respect of the unpaid principal amount of each Base Rate Loan from the date of
the making of such Loan until such Loan shall be paid in full at a rate per
annum which shall be equal to the sum of the Alternate Base Rate in effect from
time to time plus the Margin Percentage, such rate to change as and when the
Alternate Base Rate changes, such interest to be computed (i) if calculated by
reference to the Federal Funds Rate, on the basis of a 360-day year, and (ii) if
calculated by reference to the Prime Rate, on the basis of a 365- or 366-day
year, as applicable.
(b) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Loan from the date of the making of such
Eurodollar Loan until such Eurodollar Loan shall be paid in full at a rate per
annum which shall be equal to the sum of the relevant Eurodollar Rate plus the
Margin Percentage, such interest to be computed on the basis of a 360-day year.
(c) In the event that, and for so long as, any Event of Default
shall have occurred and be continuing, the outstanding principal amount of all
Loans and, to the extent permitted by law, overdue interest in respect of all
Loans, shall bear interest at a rate per annum (the "DEFAULT RATE") equal to the
sum of two percent (2%) plus the interest rate otherwise applicable hereunder to
such principal amount in effect from time to time.
(d) Interest on each Loan shall accrue from and including the
date of the Borrowing thereof to but excluding the date of any repayment thereof
(provided
33
that any Revolving Loan borrowed and repaid on the same day shall accrue one
day's interest) and shall be payable (i) in respect of each Base Rate Loan,
quarterly in arrears on each Payment Date, (ii) in respect of each Eurodollar
Loan, on the last day of each Interest Period applicable to such Loan and, in
the case of an Interest Period of six months, on the date occurring three months
from the first day of such Interest Period and on the last day of such Interest
Period, and (iii) in the case of all Loans, on any prepayment or conversion (on
the amount prepaid or converted), at maturity (whether by acceleration or
otherwise) and, after such maturity, on demand.
(e) The Agent shall, upon determining the Eurodollar Rate for
any Interest Period, promptly notify the Borrower and the Lenders thereof.
Section 2.7 INTEREST PERIODS. (a) The Borrower shall, in each Notice
of Borrowing or Notice of Conversion or Continuation in respect of the making
of, conversion into or continuation of a Eurodollar Loan, select the interest
period (each an "INTEREST PERIOD)" applicable to such Eurodollar Loan, which
Interest Period shall, at the option of the Borrower, be either a one-month,
two-month, three-month or six-month period, provided that:
(i) the initial Interest Period for any Eurodollar Loan
shall commence on the date of the making of such Eurodollar Loan
(including the date of any conversion from a Base Rate Loan) and each
Interest Period occurring thereafter in respect of such Eurodollar
Loan shall commence on the date on which the next preceding Interest
Period ends;
(ii) if any Interest Period would otherwise end on a
day which is not a Business Day, such Interest Period shall end on the
next succeeding Business Day; PROVIDED, HOWEVER, that if any Interest
Period would otherwise end on a day which is not a Business Day but is
a day of the month after which no further Business Day occurs in such
month, such Interest Period shall end on the next preceding Business
Day;
34
(iii) if any Interest Period begins on a day for which
there is no numerically corresponding day in the calendar month at the
end of such Interest Period, such Interest Period shall end on the
last Business Day of such calendar month;
(iv) no Interest Period in respect of the Term Loan (or
portion thereof) the principal of which is required to be repaid prior
to the Term Loan Maturity Date shall extend beyond the date on which
such principal is required to be repaid; and
(v) no Interest Period in respect of any Revolving Loan
shall extend beyond the Final Maturity Date and no Interest Period in
respect of the Term Loan shall extend beyond the Term Loan Maturity
Date.
(b) If upon the last day of any Interest Period, the Borrower
has failed to elect a new Interest Period to be applicable to the respective
Eurodollar Loan as provided above, the Borrower shall be deemed to have elected
to convert such Eurodollar Loans into Base Rate Loans effective as of the last
day of such current Interest Period.
Section 2.8 MINIMUM AMOUNT OF EURODOLLAR LOANS. All borrowings,
conversions, continuations, payments, prepayments and selection of Interest
Periods hereunder shall be made or selected so that, after giving effect
thereto, (i) the aggregate principal amount of any Borrowing comprised of
Eurodollar Loans shall not be less than $3,000,000 or an integral multiple of
$1,000,000 in excess thereof, and (ii) there shall be no more than 6 Borrowings
comprised of Eurodollar Loans outstanding at any time.
Section 2.9 CONVERSION OR CONTINUATION. (a) Subject to the other
provisions hereof, the Borrower shall have the option (i) to convert at any time
all or any part of outstanding Base Rate Loans which comprise part of the same
Borrowing to Eurodollar Loans, (ii) to convert all or any part of outstanding
Eurodollar Loans which comprise part of the same Borrowing to Base Rate Loans,
on the last day of the Interest Period applicable
35
thereto, or (iii) to continue all or any part of outstanding Eurodollar Loans
which comprise part of the same Borrowing as Eurodollar Loans for an additional
Interest Period, on the last day of the Interest Period applicable thereto;
PROVIDED that no Loan may be continued as, or converted into, a Eurodollar Loan
when any Default or Event of Default has occurred and is continuing.
(b) In order to elect to convert or continue a Loan under this
Section 2.9, the Borrower shall deliver an irrevocable notice thereof (a "NOTICE
OF CONVERSION OR CONTINUATION)" to the Agent no later than 12:00 noon, New York
City time, (i) at least one Business Day in advance of the proposed conversion
date in the case of a conversion to a Base Rate Loan and (ii) at least three
Business Days in advance of the proposed conversion or continuation date in the
case of a conversion to, or a continuation of, a Eurodollar Loan. A Notice of
Conversion or Continuation shall specify (w) the requested conversion or
continuation date (which shall be a Business Day), (x) the amount of the Loan to
be converted or continued, (y) whether a conversion or continuation is
requested, and (z) in the case of a conversion to, or a continuation of, a
Eurodollar Loan, the requested Interest Period. Promptly after receipt of a
Notice of Conversion or Continuation under this Section 2.9, the Agent shall
provide each Lender with a copy thereof.
Section 2.10 VOLUNTARY REDUCTION OF COMMITMENTS. Upon at least three
Business Days' prior irrevocable written notice (or telephonic notice promptly
confirmed in writing) to the Agent (which notice the Agent shall promptly
transmit to each of the Lenders), the Borrower shall have the right, without
premium or penalty, to permanently reduce each Lender's Pro Rata Share of all or
part of the unused Total Revolving Loan Commitment, unused Total Term Loan
Commitment or the unused Total Standby Letter of Credit Commitment, provided
that any such partial reduction shall be in the minimum aggregate amount of
$1,000,000 or any integral multiple of $1,000,000 in excess thereof.
Section 2.11 MANDATORY REDUCTIONS. The Total Revolving Loan
Commitment or Revolving Loans, as the case may be, shall be reduced as follows:
36
(a) For a period of 30 consecutive calendar days during the
period between January 1 through March 31 of each year, outstanding amounts of
Revolving Loans shall be reduced to, and shall not at any time during such 30
day period exceed, (i) if the Borrower has purchased Subordinated Notes in an
aggregate principal amount of $15,000,000 or less, an amount of $10,000,000 (ii)
if the Borrower has purchased Subordinated Notes in an aggregate principal
amount of $25,000,000, an amount of $20,000,000 and (iii) in the event that the
Borrower has purchased Subordinated Notes in an aggregate principal amount of
more than $15,000,00 and less than $25,000,000 (such actual amount so
repurchased, the "Actual Purchase Amount"), an amount equal to $20,000,000 less
the difference between (x) $25,000,000 and (y) the Actual Purchase Amount. The
obligations of the Borrower under the preceding sentence are in addition to, and
shall not in any manner limit, any other obligation of the Borrower hereunder to
prepay or repay Loans.
(b) The Total Revolving Loan Commitment shall be reduced
permanently by an amount equal to the amount of the mandatory prepayment of
Revolving Loans required pursuant to Section 2.13(d).
(c) The Total Revolving Loan Commitment shall be reduced
permanently by an amount equal to proceeds of any payments on casualty insurance
or condemnation awards in respect of any of the assets of the Borrower or any of
its Subsidiaries; PROVIDED that so long as no Default or Event of Default has
occurred and is continuing, no such mandatory reduction shall be required if (i)
the aggregate amount of insurance or condemnation proceeds received by the
Borrower and its Subsidiaries in connection with the event that resulted in the
loss, damage, destruction or taking of such assets is less than $1,000,000 or
(ii) the Agent receives written notice in form and substance satisfactory to it
within 60 days of receipt of any such proceeds from the Borrower describing how
such proceeds are to be promptly reinvested in equipment, vehicles or other
assets used in the Borrower's principal lines of business.
(d) The Total Revolving Loan Commitment shall be reduced at any
time the amount of aggregate proceeds (cash or otherwise) of sales of assets
made pursuant to Sections 7.5(b) and (c), net of reasonable, docu-
37
mented expenses and withholding taxes arising from such sale (PROVIDED that any
amounts subsequently recovered, or any amounts received as a result of credits
earned, with respect to such withholding taxes shall be additional proceeds from
such sale at the time such amount is received by a Loan Party), exceeds
$7,500,000, permanently by an amount equal to such excess amount (less the
amount of any reductions of the Revolving Loan Commitments previously made
pursuant to this clause (d)); PROVIDED that (i) no such reduction shall be
required pursuant to this clause (d) unless such reduction would be of at least
$1,000,000, (ii) sales of assets listed on Schedule 7.5(c) sold pursuant to
Section 7.5(c) shall not be included for purposes of this subsection (d) to the
extent, and only to the extent, the aggregate amount of proceeds pursuant to
such sales is equal to or less than $9,000,000 and (iii) the sale of the Rocky
Point Note shall not be included for purposes of this subsection (d).
In the event that, after giving effect to the reductions in the Total
Revolving Loan Commitment set forth in Sections 2.11(b), (c) or (d), the Total
Revolving Loan Commitment has been reduced to zero, then any excess amounts
shall be applied to the permanent reduction of the Total Standby Letter of
Credit Commitment.
Section 2.12 VOLUNTARY PREPAYMENTS. The Borrower shall have the
right to prepay the Loans in whole or in part from time to time on the following
terms and conditions: (a) the Borrower shall give the Agent written notice (or
telephonic notice promptly confirmed in writing), which notice shall be
irrevocable, of its intent to prepay the Loans at least three Business Days
prior to a prepayment of Eurodollar Loans and at least one Business Day prior to
a prepayment of Base Rate Loans, which notice shall specify the amount of such
prepayment and what Types of Loans are to be prepaid and, in the case of
Eurodollar Loans, the specific Borrowing(s) pursuant to which such Eurodollar
Loan was made, and which notice the Agent shall promptly transmit to each of the
Lenders and (b) each prepayment shall be in an aggregate principal amount of
$1,000,000 or any integral multiple of $1,000,000 in excess thereof. All
prepayments shall be accompanied by accrued interest on the principal amount
being prepaid to but excluding the day of payment.
38
Notwithstanding anything to the contrary set forth herein, Term Loans, once
repaid, may not be reborrowed.
Section 2.13 MANDATORY PREPAYMENTS.
(a) [Intentionally Omitted]
(b) On each day on which the Total Revolving Loan Commitment or
Total Standby Letter of Credit Commitment, as the case may be, is reduced
pursuant to Section 2.11, the Borrower shall prepay the Revolving Loans and, in
the case of reductions in the Total Standby Letter of Credit Commitment, cash
collateralize outstanding Standby Letters of Credit, to the extent, if any, that
such aggregate outstanding principal amount exceeds the reduced Total Revolving
Loan Commitment or Total Standby Letter of Credit Commitment, as the case may
be.
(c) on each day that the sum of (x) the aggregate principal
amount of outstanding Loans and (y) the LC Exposure exceeds the Borrowing Base
as then in effect, the Borrower shall immediately repay its then outstanding
Loans in such amount as may be necessary to eliminate such excess.
(d) On each date after the Effective Date on which the Borrower
or any of its Subsidiaries receives any proceeds from any capital contribution
or from the issuance of any equity, in each case, utilizing or facilitated by
one or more underwriters, placement agents or similar Persons, the Borrower
shall prepay the outstanding Loans in an amount equal to 50% of such proceeds
(net of any underwriting discounts or commissions and any other reasonable costs
or expenses directly attributable to such incurrence or issuance), in accordance
with the provisions of Section 2.14.
(e) On each day after the Effective Date on which the Borrower or
any of its Subsidiaries receives any proceeds from any sale and leaseback of any
asset or mortgaging of any real property other than pursuant to a Mortgage by
the Borrower or any of its Subsidiaries permitted by the terms of this Agreement
or a refinancing thereof permitted by Section 7.2(b), or a sale and leaseback
transaction permitted by Section 7.14, the Borrower shall prepay the Loans in an
amount equal to 100% of such proceeds (net of reasonable costs or expenses
directly
39
attributable to such transaction), in accordance with the provisions of Section
2.14.
All prepayments shall be accompanied by accrued interest on the
principal amount being prepaid to but excluding the day of payment.
Section 2.14 APPLICATION OF PREPAYMENTS. All prepayments of the
Loans required by Section 2.13 (other than subparagraph (c) thereof) shall be
applied FIRST, to all fees and expenses then due and payable to the Agent or the
Lenders pursuant to the terms of this Agreement and the other Loan Documents,
SECOND, to any interest then due and payable on the Term Loan, THIRD, to prepay
the Term Loan until the Term Loan shall have been repaid in full, together with
accrued and unpaid interest thereon, FOURTH, to any interest then due and
payable on the Revolving Loans, FIFTH, to prepay the Revolving Loans until such
Revolving Loans shall have been repaid in full, together with accrued and unpaid
interest thereon, and SIXTH, to all other outstanding Obligations then due and
payable. Simultaneously with any prepayment of the principal amount of (i) the
Term Loan pursuant to the preceding sentence, each Lender's Term Loan Commitment
shall be permanently reduced by such Lender's Pro Rata Share of such prepayment
and (ii) the Revolving Loans pursuant to the preceding sentence, each Lender's
Revolving Loan Commitment shall be permanently reduced by such Lender's Pro Rata
Share of such prepayment. All prepayments of the Term Loan shall be applied to
the installments thereof in inverse order of maturity.
Section 2.15 METHOD AND PLACE OF PAYMENT.(a) Except as otherwise
specifically provided herein, all payments and prepayments under this Agreement
and the Revolving Notes and the Term Notes shall be made to the Agent for the
account of the Lenders entitled thereto not later than 12:00 noon, New York City
time, on the date when due and shall be made in lawful money of the United
States of America in immediately available funds at the Agent's office, and any
funds received by the Agent after such time shall, for all purposes hereof
(including the following sentence), be deemed to have been paid on the next
succeeding Business Day. Except as otherwise specifically provided herein, the
Agent shall thereafter cause to be distributed on the date of receipt thereof to
40
each Lender in like funds its Pro Rata Share of payments so received.
(b) Whenever any payment to be made hereunder or under any
Revolving Note or any Term Note shall be stated to be due on a day which is not
a Business Day, the due date thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest shall be
payable at the applicable rate during such extension.
(c) All payments made by the Borrower hereunder and under the
other Loan Documents shall be made irrespective of, and without any reduction
for, any setoff or counterclaims.
Section 2.16 FEES.(a) The Borrower agrees to pay the fees in the
amounts and on the dates specified in the separate fee letters between the
Borrower and each of the Agent and the other Lenders.
(b) The Borrower agrees to pay to the Agent for the account of
each Lender a commitment fee (the "Commitment Fee"), computed at the per annum
rate set forth in the definition of Margin Percentage, in each case on the basis
of a 360-day year for the actual number of days elapsed, payable on the average
daily unused portion of the Revolving Loan Commitment, the Term Loan Commitment
and the Standby Letter of Credit Commitment, from and including the Effective
Date to the Final Maturity Date, payable quarterly in arrears on each Payment
Date and on the Final Maturity Date or such earlier date, if any, on which the
Revolving Loan Commitment, the Term Loan Commitment or the Standby Letter of
Credit Commitment shall be terminated in accordance with the terms hereof.
(c) The Borrower agrees to pay to the Agent for the account of
each Lender a Standby Letter of Credit fee computed at the per annum rate of the
Margin Percentage applicable to Eurodollar Loans on the daily aggregate LC
Exposure, payable quarterly in arrears on each Payment Date.
(d) In addition to the Commitment Fee and such Standby Letter of
Credit fee referred to in this Section 2.16, the Borrower acknowledges that
certain commitment
41
fees and fees with respect to Standby Letters of Credit issued under the
Existing Credit Agreement and payable, in each case, pursuant to Section 2.15 of
the Existing Credit Agreement have accrued through the Effective Date and agrees
to pay such fees on the Payment Date next succeeding the Effective Date.
Section 2.17 INTEREST RATE UNASCERTAINABLE, INCREASED COSTS,
ILLEGALITY. (a) In the event that the Agent, in the case of clause (i) below,
or any Lender, in the case of clauses (ii) and (iii) below, shall have
determined (which determination shall, absent manifest error, be final and
conclusive and binding upon all parties hereto):
(i) on any date for determining the Eurodollar Rate for
any Interest Period, that by reason of any changes arising after the
date of this Agreement affecting the interbank Eurodollar market,
adequate and fair means do not exist for ascertaining the applicable
interest rate on the basis provided for in the definition of the
Eurodollar Rate; or
(ii) at any time, that the relevant Eurodollar Rate
applicable to any of its Eurodollar Loans shall not represent the
effective pricing to such Lender for funding or maintaining a
Eurodollar Loan, or such Lender shall incur increased costs or
reductions in the amounts received or receivable hereunder in respect
of any Eurodollar Loan (other than by reason of a tax, or an increased
tax, on the net income of such Lender), in any such case because of
(x) any change since the date of this Agreement in any applicable law
or governmental rule, regulation, guideline or order or any
interpretation thereof and including the introduction of any new law
or governmental rule, regulation, guideline or order (such as for
example but not limited to a change in official reserve requirements,
but, in all events, excluding reserves required under Regulation D to
the extent included in the computation of the Eurodollar Rate),
whether or not having the force of law and whether or not failure to
comply therewith would be unlawful,
42
and/or (y) other circumstances affecting such Lender or the interbank
Eurodollar market or the position of such Lender in such market; or
(iii) at any time, that the making or continuance by it
of any Eurodollar Loan has become unlawful by compliance by such
Lender in good faith with any law or governmental rule, regulation,
guideline or order (whether or not having the force of law and whether
or not failure to comply therewith would be unlawful) or has become
impracticable as a result of a contingency occurring after the date of
this Agreement which materially and adversely affects the interbank
Eurodollar market;
then, and in any such event, the Agent or such Lender shall, promptly after
making such determination, give notice (by telephone promptly confirmed in
writing) to the Borrower and (if applicable) the Agent of such determination
(which notice the Agent shall promptly transmit to each of the other Lenders).
Thereafter (x) in the case of clause (i) above, the Borrower's right to request
Eurodollar Loans shall be suspended, and any Notice of Borrowing or Notice of
Conversion or Continuation given by the Borrower with respect to any Borrowing
of Eurodollar Loans which has not yet been made shall be deemed cancelled and
rescinded by the Borrower, (y) in the case of clause (ii) above, the Borrower
shall pay to such Lender, upon such Lender's delivery of written demand therefor
to the Borrower with a copy to the Agent, such additional amounts (in the form
of an increased rate of interest, or a different method of calculating interest,
or otherwise, as such Lender in its sole discretion exercised in a professional
manner shall determine) as shall be required to compensate such Lender for such
increased costs or reduction in amounts received or receivable hereunder and (z)
in the case of clause (iii) above, the Borrower shall take one of the actions
specified in clause (b) below as promptly as possible and, in any event, within
the time period required by law. The written demand provided for in clause (y)
shall, absent manifest error, be final and conclusive and binding upon all of
the parties hereto.
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(b) In the case of any Eurodollar Loan or requested Eurodollar
Loan affected by the circumstances described in clause (a)(ii) above, the
Borrower may, and in the case of any Eurodollar Loan affected by the
circumstances described in clause (a)(iii) above the Borrower shall, either (i)
if any such Eurodollar Loan has not yet been made but is then the subject of a
Notice of Borrowing or a Notice of Conversion or Continuation, be deemed to be a
request for a Base Rate Loan with respect to the affected Lender, or (ii) if any
such Eurodollar Loan is then outstanding, require the affected Lender to convert
each such Eurodollar Loan into a Base Rate Loan at the end of the applicable
Interest Period or such earlier time as may be required by law, in each case by
giving the Agent notice (by telephone promptly confirmed in writing) thereof on
the Business Day that the Borrower was notified by the Lender pursuant to clause
(a) above; PROVIDED, HOWEVER, that all Lenders whose Eurodollar Loans are
affected by the circumstances described in clause (a) above shall be treated in
the same manner under this clause (b).
(c) In the event that the Agent determines at any time following
its giving of notice based on the conditions described in clause (a)(i) above
that none of such conditions exist, the Agent shall promptly give notice thereof
to the Borrower and the Lenders, whereupon the Borrower's right to request
Eurodollar Loans from the Lenders and the Lenders' obligation to make Eurodollar
Loans shall be restored.
(d) In the event that a Lender determines at any time following
its giving of a notice based on the conditions described in clause (a)(iii)
above that none of such conditions exist, such Lender shall promptly give notice
thereof to the Borrower and the Agent, whereupon the Borrower's right to request
Eurodollar Loans from such Lender and such Lender's obligation to make
Eurodollar Loans shall be restored.
Section 2.18 FUNDING LOSSES. The Borrower shall compensate each
Lender, upon such Lender's delivery of a written demand therefor to the
Borrower, with a copy to the Agent (which demand shall, absent manifest error,
be final and conclusive and binding upon all of the parties hereto), for all
reasonable losses, expenses and liabilities (including, without limitation, any
loss,
44
expense or liability incurred by such Lender in connection with the liquidation
or reemployment of deposits or funds required by it to make or carry its
Eurodollar Loans) that such Lender sustains or may sustain: (i) if for any
reason (other than a default by such Lender) a Borrowing of, or conversion from
or into, or a continuation of, Eurodollar Loans does not occur on a date
specified therefor in a Notice of Borrowing or Notice of Conversion or
Continuation (whether or not rescinded, cancelled or withdrawn or deemed
rescinded, cancelled or withdrawn, pursuant to Section 2.17(a) or 2.17(b) or
otherwise), (ii) if any repayment (including, without limitation, payment after
acceleration) or conversion of any of its Eurodollar Loans occurs on a date
which is not the last day of the Interest Period applicable thereto, (iii)if any
prepayment of any of its Eurodollar Loans is not made on any date specified in a
notice of prepayment given by the Borrower, or (iv) as a consequence of any
default by the Borrower in repaying its Eurodollar Loans or any other amounts
owing hereunder in respect of its Eurodollar Loans when required by the terms of
this Agreement. Calculation of all amounts payable to a Lender under this
Section 2.18 shall be made on the assumption that such Lender has funded its
relevant Eurodollar Loan through the purchase of a Eurodollar deposit bearing
interest at the Eurodollar Rate in an amount equal to the amount of such
Eurodollar Loan with a maturity equivalent to the Interest Period applicable to
such Eurodollar Loan, and through the transfer of such Eurodollar deposit from
an offshore office of such Lender to a domestic office of such Lender in the
United States of America, provided that each Lender may fund its Eurodollar
Loans in any manner that it in its sole discretion chooses and the foregoing
assumption shall only be made in order to calculate amounts payable under this
Section 2.18. Such compensation may include an amount equal to the excess, if
any, of (i) the amount of interest which would have accrued on the amount so
prepaid, or not so borrowed, converted or continued, for the period from the
date of such prepayment or of such failure to borrow, convert or continue to the
last day of such Interest Period (or, in the case of a failure to borrow,
convert or continue, the interest Period that would have commenced on the date
of such failure) in each case at the applicable rate of interest for such Loans
provided for herein over (ii) the amount of interest (as reasonably determined
by such Lender) which would have accrued to
45
such Lender on such amount by placing such amount on deposit for a comparable
period with leading banks in the interbank eurodollar market.
Section 2.19 INCREASED CAPITAL. If the Issuing Bank or any Lender
shall have determined that compliance with any applicable law, rule, regulation,
guideline, request or directive (whether or not having the force of law) of any
governmental authority, central bank or comparable agency (other than by reason
of a tax or an increased tax, on the net income of such Lender), has or would
have the effect of reducing the rate of return on the capital or assets of the
Issuing Bank or such Lender as the case may be, or any Person Controlling the
Issuing Bank or such Lender as the case may be, as a consequence of its
commitments or obligations hereunder, then from time to time, upon the Issuing
Bank's or such Lender's, as the case may be, delivering a written demand
therefor to the Agent and the Borrower, the Borrower shall pay to the Issuing
Bank or such Lender, as the case may be, such additional amount or amounts as
will compensate the Issuing Bank, such Lender or Person, as the case may be, for
such reduction.
Section 2.20 TAXES. (a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without reduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any governmental
authority excluding, in the case of the Agent, the Issuing Bank and each Lender,
net income and franchise taxes imposed on the Agent, the Issuing Bank or such
Lender by the jurisdiction under the laws of which the Agent, the Issuing Bank
or such Lender is organized or any political subdivision or taxing authority
thereof or therein, or by any jurisdiction in which such Lender's Domestic
Lending office or Eurodollar Lending Office, as the case may be, is located or
any political subdivision or taxing authority thereof or therein or by reason of
such Lender's failure to comply with Section 2.20(b) hereof (all such
non-excluded taxes, levies, imposts, deductions, charges or withholdings being
hereinafter called "TAXES"). If any Taxes are required to be withheld from any
amounts payable to the Agent, the Issuing Bank or any Lender hereunder or under
the Revolving Notes or under the Term
46
Notes, the amounts so payable to the Agent, the Issuing Bank or such Lender
shall be increased to the extent necessary to yield to the Agent, the Issuing
Bank or such Lender (after payment of all Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement and the Revolving Notes and the Term Notes. Whenever any Taxes are
payable by the Borrower, as promptly as possible thereafter, the Borrower shall
send to the Agent for its own account or for the account of the Issuing Bank or
such Lender, as the case may be, a certified copy of an original official
receipt received by the Borrower showing payment thereof or other evidence
thereof reasonably satisfactory to the Agent. If the Borrower fails to pay any
Taxes when due to the appropriate taxing authority or fails to remit to the
Agent the required receipts or other documentary evidence, the Borrower shall
indemnify the Agent, the Issuing Bank, and the Lenders for any incremental
taxes, interest or penalties that may become payable by the Agent, the Issuing
Bank, or any Lender as a result of any such failure. The agreements in this
Section 2.20 shall survive the termination of this Agreement and the payment of
the Revolving Notes and the Term Notes and all other Obligations and the
expiration of the Standby Letters of credit.
(b) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof (including each Purchasing Lender
that becomes a party to this Agreement pursuant to Section 10.4(c)) agrees that,
prior to the first date on which any payment is due to it hereunder, it will
deliver to the Borrower and the Agent (i) two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224 or successor applicable form,
as the case may be, certifying in each case that such Lender is entitled to
receive payments under this Agreement and the Revolving Notes and the Term Notes
payable to it, without deduction or withholding of any United States Federal
income taxes, and (ii) an Internal Revenue Service Form W-8 or W-9 or successor
applicable form, as the case may be, to establish an exemption from United
States backup withholding tax. Each Lender which delivers to the Borrower and
the Agent a Form 1001 or 4224 and Form W-8 or W-9 pursuant to the preceding
sentence further undertakes to deliver to the Borrower and the Agent two further
copies of the said letter and Form 1001 or 4224 and Form W-8 or W-9, or
47
successor applicable forms, or other manner of certification, as the case may
be, on or before the date that any such letter or form expires or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent letter and form previously delivered by it to the Borrower, and such
extensions or renewals thereof as may reasonably be requested by the Borrower,
certifying in the case of a Form 1001 or 4224 that such Lender is entitled to
receive payments under this Agreement without deduction or withholding of any
United States Federal income taxes, unless there has been a change in law
(including, without limitation, any change in treaty, statute, regulation or
official interpretation) prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Lender from duly completing and delivering any such letter or form
with respect to it and such Lender advises the Borrower that it is not capable
of receiving payments without any deduction or withholding of United States
Federal income tax, and in the case of a Form W-8 or W-9, establishing an
exemption from United States backup withholding tax.
Section 2.21 CHANGE OF OFFICE, ETC. Any of the Agent, the Issuing
Bank or any Lender claiming any additional amounts payable pursuant to Sections
2.17(a)(iii) or 2.20 shall use reasonable efforts (consistent with legal and
regulatory restrictions) (including reasonable efforts to change the
jurisdiction of its applicable lending office) to avoid the need for or reduce
the amount of any such additional amounts that may thereafter accrue, provided
that such efforts would not, in the sole determination of such Lender, the Agent
or the Issuing Bank, as the case may be, be otherwise disadvantageous to such
Lender, the Agent or the Issuing Bank.
Section 2.22 USE OF PROCEEDS. (a) The proceeds of the Revolving Loans
shall be used for the Borrower's working capital, for general corporate purposes
and to repurchase Subordinated Notes subject to Section 7.10.
(b) Subject to Section 4.2, the proceeds of the Term Loan made
during the Term Loan Borrowing Period shall be used by the Borrower to finance
the repurchase of up to $15,000,000 aggregate principal amount of the Borrower's
Subordinated Notes.
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SECTION 3. STANDBY LETTERS OF CREDIT
Section 3.1 ISSUANCE OF STANDBY LETTERS OF CREDIT. (a) The Issuing
Bank (i) agrees, within five (5) Business Days of the receipt of an
appropriately completed and properly authorized Letter of Credit Application, in
a form and containing terms and conditions that are reasonably acceptable to the
Issuing Bank and consistent with the terms hereof, and on the terms and subject
to the conditions hereinafter set forth, to issue irrevocable letters of credit
("STANDBY LETTERS OF CREDIT") under which the Issuing Bank agrees to make
payments for the account of the Borrower in respect of ongoing contingent
obligations of the Borrower and/or one or more of its Subsidiaries related to
insurance, performance bonds and fuel bonds, to replace existing standby letters
of credit and for other general corporate purposes acceptable to the Issuing
Bank and the Agent, at any time and from time to time on and after the Effective
Date until the termination of the Total Standby Letter of Credit Commitment in
accordance with Section 2.10 hereof and (ii) issued on the Original Effective
Date the Standby Letters of Credit set forth on Schedule 3.1 of the Original
Agreement, PROVIDED, HOWEVER, that any Standby Letter of Credit shall be issued
only if, and each request by the Borrower for the issuance of any Standby Letter
of Credit shall be deemed a representation and warranty of the Borrower that,
immediately following the issuance of any such Standby Letter of Credit, (x) the
LC Exposure at such time shall not exceed the Total Standby Letter of Credit
Commitment in effect at such time and (y) (A) the sum of (I) the aggregate
principal amount of outstanding Loans and (II) the LC Exposure, before or after
such Standby Letter of Credit is issued, does not exceed (B) the Borrowing Base
as then in effect.
(b) Each Standby Letter of Credit shall be in a minimum amount of
$100,000 (other than in respect of the renewal of the Existing Standby Letter of
Credit, which may be in a minimum amount of $50,000).
(c) No Standby Letter of Credit shall be issued with a stated
expiration date later than the earlier of (i) the close of business on the Final
Maturity Date and (ii) the close of business on the date that is (x) 12 months
(or, in the case of the Standby Letters of Credit set forth on Schedule 3.1, 378
days) after the
49
date of issuance of such Standby Letter of Credit, or (y) with the consent of
the Agent and the Issuing Bank for Standby Letters of Credit with an aggregate
face amount not to exceed at any time $1,000,000 (or, subject to clause (d)
below, the equivalent value of British Pounds at the then applicable British
Pound Reference Rate), 18 months after the date of issuance of such Standby
Letter of Credit. Subject to clause (d) below, each Standby Letter of Credit
shall provide for payments of drawings in U.S. dollars.
(d) Notwithstanding the last sentence of clause (c) above, the
Issuing Bank may issue Standby Letters of Credit providing for payment in
British Pounds; PROVIDED, that the aggregate face amount of such Standby Letters
of Credit may at no time exceed 511,372 British Pounds. The LC Exposure with
respect to such Standby Letters of Credit shall be calculated on the date of
issuance of any such Standby Letter of Credit and may be recalculated by the
Agent at the time of issuance of each Standby Letter of Credit issued pursuant
to this Agreement, in each case to be calculated by the Agent at the then
applicable British Pound Reference Rate.
(e) Each Standby Letter of Credit may, in the absolute discretion
of the Issuing Bank, include a provision whereby such Standby Letter of Credit
shall be renewed automatically for additional consecutive periods of 12 months
or less (but not beyond the Final Maturity Date) unless the Issuing Bank
notifies the beneficiary thereof at least 60 days (or such shorter period as is
acceptable to the Issuing Bank) prior to the then-applicable expiry date that
such Standby Letter of Credit will not be renewed.
(f) The Borrower may request the extension or renewal of a
Standby Letter of Credit that is not automatically renewed in accordance with
its terms by giving written notice to the Issuing Bank at least five Business
Days prior to the then-current expiry date of such Standby Letter of Credit. If
no Default or Event of Default has occurred and is continuing, the Issuing Bank
shall promptly issue such extension or renewal; PROVIDED, HOWEVER, that the
Issuing Bank shall have no obligation to extend or renew any Standby Letter of
Credit (i) for a period in excess of 12 months (PROVIDED that with the consent
of the Agent and the Issuing Bank, Standby Let-
50
ters of Credit with an aggregate face amount not to exceed at any time
$1,000,000 (or, subject to clause (d) above, the equivalent value of British
Pounds at the then applicable British Pound Reference Rate) may be renewed or
extended for a period of up to 18 months) or (ii) to any expiry date beyond the
Final Maturity Date.
(g) Each request for the issuance of a Standby Letter of Credit
shall be made on five (5) Business Days' prior electronic, written or facsimile
authenticated Letter of Credit Application from the Borrower to the Issuing Bank
specifying the date on which such Standby Letter of Credit is to be issued, the
date on which such Standby Letter of Credit is to expire, the amount of such
Standby Letter of Credit, the name and address of the beneficiary of such
Standby Letter of Credit and such other information as may be necessary or
desirable to complete such Standby Letter of Credit.
Section 3.2 PARTICIPATIONS; UNCONDITIONAL OBLIGATIONS. (a) By the
issuance of a Standby Letter of Credit and without any further action on the
part of the Issuing Bank or the Lenders in respect thereof, the Issuing Bank
hereby grants to each Lender, and each Lender hereby agrees to acquire from the
Issuing Bank, a participation in such Standby Letter of Credit, equal to such
Lender's Pro Rata Share of the face amount of such Standby Letter of Credit. In
consideration and in furtherance of the foregoing, each Lender hereby absolutely
and unconditionally agrees to pay to the Agent, on behalf of the Issuing Bank,
such Lender's Pro Rata Share of each LC Disbursement made by the Issuing Bank;
PROVIDED, HOWEVER, that the Lenders shall not be obligated to make any such
payment to the Issuing Bank with respect to any wrongful payment or disbursement
made under any Standby Letter of Credit as a result of the gross negligence or
wilful misconduct of the Issuing Bank.
(b) Each Lender acknowledges and agrees that its obligation to
acquire participations pursuant to paragraph (a) above in respect of Standby
Letters of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of an Event of
Default or Default hereunder, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.
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Section 3.3 AGREEMENT TO REPAY LETTER OF CREDIT DISBURSEMENTS. (a)
If the Issuing Bank shall pay any draft presented under a Standby Letter of
Credit, the Borrower shall pay on the date of such payment by the Issuing Bank
to the Issuing Bank an amount equal to the amount of such draft (PROVIDED that
for drafts requiring payment in British Pounds, the Borrower shall pay the U.S.
dollar equivalent as calculated by the Agent at the British Pound Reference Rate
on the date any such draft was paid by the Issuing Bank). If the Borrower
receives notice after 3:00 p.m., New York City time, of the payment by the
Issuing Bank of a draft presented under a Standby Letter of Credit, it shall
repay such LC Disbursement no later 11:00 a.m., New York City time, on the next
Business Day; PROVIDED that if such next Business Day is not the next succeeding
calendar day, then the Borrower shall pay interest, on demand, on the amount of
such LC Disbursement from the date it was made by the Issuing Bank until it is
reimbursed by the Borrower at the rate set forth in clause (b) below.
(b) The Borrower agrees to pay interest on LC Disbursements which
are not paid to the Issuing Bank as set forth in clause (a) above, on demand, at
a rate per annum equal to the sum of the Alternate Base Rate then in effect plus
three and one-half percent (3.5%).
(c) The Borrower's obligation to pay the Issuing Bank for LC
Disbursements under the Outstanding Standby Letters of Credit shall be absolute,
unconditional and irrevocable under any and all circumstances and irrespective
of:
(i) any lack of validity or enforceability of any
Standby Letter of Credit;
(ii) the existence of any claim, setoff, defense or
other right that the Borrower or any other person may at any time have
against the beneficiary under any Standby Letter of Credit, the
Issuing Bank, the Agent, any Lender or any other Person (other than
the defense of payment in accordance with the terms of this Agreement
or a defense based on the gross negligence or wilful misconduct of the
Issuing Bank) or any other Person in connection
52
with this Agreement or any other agreement or transaction;
(iii) any draft or other document presented under a
Standby Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect, PROVIDED that payment by the Issuing Bank
under such Standby Letter of Credit against presentation of such draft
or document shall not have constituted gross negligence or wilful
misconduct of the Issuing Bank;
(iv) payment by the Issuing Bank under a Standby Letter
of Credit against presentation of a draft or other document that does
not comply with the terms of such Letter of Credit, PROVIDED that such
payment shall not have constituted gross negligence or wilful
misconduct of the Issuing Bank; and
(v) other circumstances or event whatsoever, whether or
not similar to any of the foregoing, PROVIDED that such other
circumstance or event shall not have been the result of gross
negligence or wilful misconduct of the Issuing Bank.
It is understood that in making any payment under a Standby Letter of
Credit (i) the Issuing Bank's exclusive reliance on the documents presented to
it under such Standby Letter of Credit as to any and all matters set forth
therein, including reliance on the amount of any draft presented under such
Standby Letter of Credit, whether or not the amount due to the beneficiary
equals the amount of such draft and whether or not any document presented
pursuant to such Standby Letter of Credit proves to be insufficient in any
respect, if such document on its face appears to be in order, and whether or not
any other statement or any other document presented pursuant to such Standby
Letter of Credit proves to be forged or invalid or any statement therein proves
to be inaccurate or untrue in any respect whatsoever, and (ii) any noncompliance
in any immaterial respect of the documents presented under a Standby Letter of
Credit with the
53
terms thereof shall, in each case, not be deemed wilful misconduct or gross
negligence of the Issuing Bank.
Section 3.4 LETTER OF CREDIT OPERATIONS. The Issuing Bank shall,
within a reasonable time after its receipt thereof, examine all documents
purporting to represent a demand for payment under an Outstanding Letter of
Credit to ascertain that the same appear on their face to be in conformity with
the terms and conditions of such Outstanding Letter of Credit. The Issuing Bank
shall promptly give electronic or facsimile notification or telephonic
notification, confirmed by electronic or facsimile notice, to the Borrower of
such demand of payment and of the determination by the Issuing Bank as to
whether such demand for payment was in conformity with the terms and conditions
of such Outstanding Letter of Credit and whether the Issuing Bank has made or
will make a LC Disbursement thereunder, provided that the failure to give such
notice shall not relieve the Borrower of its obligation to reimburse the Issuing
Bank with respect to any such LC Disbursement.
Section 3.5 CASH COLLATERALIZATION. If any Event of Default shall
occur and be continuing, the Borrower shall on the Business Day it receives
notice from the Agent or the Required Lenders therefor, deposit in an account
with the Collateral Agent, for the benefit of the Lenders, an amount in cash
equal to the LC Exposure as of such date. Such deposit shall be held by the
Collateral Agent as collateral for the payment and performance of the
Obligations. The Collateral Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal, over such account. Other than any
interest earned on the investment of such deposits in Cash Equivalents, which
investments shall be made at the option and sole discretion of the Collateral
Agent, such deposits shall not bear interest. Interest or profits, if any, on
such investments shall accumulate in such account. Moneys in such account shall
(a) automatically be applied by the Agent to reimburse the Issuing Bank for LC
Disbursements, (b) be held for the satisfaction of the reimbursement obligations
of the Borrower of the LC Exposure at such time and (c) if the maturity of the
Revolving Loans has been accelerated, be applied to satisfy the Obligations. If
the Borrower is required to provide an amount of cash collateral hereunder as a
result of the occurrence of an Event of Default, such
54
amount (to the extent not applied as aforesaid) shall be returned to the
Borrower within three Business Days after all Events of Default have been cured
or waived.
Section 3.6 INDEMNIFICATION. The Lenders agree to indemnify the
Issuing Bank and its officers, directors, employees, representatives and agents
(to the extent not reimbursed by the Loan Parties and without limiting the
obligation of the Loan Parties to do so), ratably according to their Pro Rata
Shares, from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever (including, without limitation, the fees and
disbursements of counsel for the Issuing Bank or such Person in connection with
any investigative, administrative or judicial proceeding commenced or
threatened, whether or not the Issuing Bank or such Person shall be designated a
party thereto) that may at any time (including, without limitation, at any time
following the payment of the Obligations) be imposed on, incurred by or asserted
against the Issuing Bank or such Person as a result of, or arising out of, or in
any way related to or by reason of the issuing of any Standby Letter of Credit
or the Issuing Bank acting in its capacity as Issuing Bank (but excluding any
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting solely from the gross
negligence or willful misconduct of the Issuing Bank or such Person as finally
determined by a court of competent jurisdiction).
Section 3.7 RESIGNATION OF THE ISSUING BANK. (a) The Issuing Bank may
resign by giving five Business Days' prior written notice to the Agent, the
Lenders and the Borrower and upon the appointment of any Lender as successor
Issuing Bank. Subject to paragraph (b) below, upon the acceptance of any
appointment as the Issuing Bank hereunder by a successor Issuing Bank, such
successor shall succeed to and become vested with all the interests, rights and
obligations of the retiring Issuing Bank and the retiring Issuing Bank shall be
discharged from its obligations to issue additional Standby Letters of Credit
hereunder. Notwithstanding such resignation, the Borrower shall pay all accrued
and unpaid fronting fees when such fees would otherwise become due hereunder.
The acceptance of any appointment as the Issuing Bank
55
hereunder by a Lender shall be evidenced by an agreement entered into by such
successor, in a form satisfactory to the Borrower and the Agent, and, from and
after the effective date of such agreement, (i) such Issuing Bank shall have all
the rights and obligations of the previous Issuing Bank under this Agreement and
the other Loan Documents and (ii) references herein and in the other Loan
Documents to "Issuing Bank" shall be deemed to refer to such successor or to any
previous Issuing Bank, or to such successor and all previous Issuing Banks, as
the context shall require.
(b) After the resignation of the Issuing Bank hereunder, the
retiring Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of the Issuing Bank under this Agreement and the
other Loan Documents with respect to Standby Letters of Credit issued by it
prior to such resignation, but shall not be required to issue additional Standby
Letters of Credit and shall be entitled to all accrued and unpaid fronting fees
due and owing to it through and including the date of resignation.
SECTION 4. CONDITIONS PRECEDENT.
Section 4.1 CONDITIONS PRECEDENT TO EFFECTIVENESS. This Agreement shall
become effective as of the date hereof when the following conditions precedent
have been satisfied:
(a) AMENDED AND RESTATED CREDIT AGREEMENT. The Borrower, the
Agent, the Arranger and the Lenders shall have executed and delivered this
Agreement to the other parties hereto.
(b) REVOLVING NOTES. The Borrower shall have executed and
delivered to each of the Lenders the appropriate Revolving Notes in the amount,
maturity and as otherwise provided herein.
(c) CONFIRMATIONS AND ACKNOWLEDGEMENTS.
(i) CONFIRMATION OF PARTIES TO THE SECURITY DOCUMENTS.
Each of the parties to the Security Documents shall have executed and
delivered to the Agent the acknowledgement in the form of Exhibit
4.1(c)(i) hereto, and each
56
of Wellcraft Marine Corp., a Delaware corporation, and Glastron/▇▇▇▇▇▇
Boats, Inc., a Delaware corporation, shall have executed and delivered a
Security Agreement to the Collateral Agent.
(ii) ACKNOWLEDGEMENT OF GUARANTORS. Each of the
Guarantors shall have executed and delivered to the Agent the
Acknowledgement in the form of Exhibit 4.1(c)(ii) hereto.
(iii) ACKNOWLEDGEMENT OF SUBORDINATION AGREEMENTS. ▇▇.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall have executed and delivered to the Agent the
Acknowledgement in the form of Exhibit 4.1(c)(iii) hereto.
(d) MORTGAGE AMENDMENTS. Each of the Loan Parties party thereto shall
have executed and delivered to the Agent an amendment to each of the Mortgages,
each substantially in the form set forth as Exhibit 4.1(d)(as amended, modified
or supplemented from time to time, each a "MORTGAGE AMENDMENT" and collectively,
the "MORTGAGES AMENDMENTS").
(e) ASSIGNMENT AMENDMENTS. To the extent that any Lender shall have
been advised by special counsel that the same is legally required in such
jurisdiction, the Loan Parties party thereto shall have executed and delivered
to the Lender an amendment to each of the Assignment of Rents and Leases
relating to each applicable Property substantially in the form set forth as
Exhibit 4.1(e) (as amended, modified or supplemented from time to time, the
"ASSIGNMENT AMENDMENTS".
(f) OPINIONS OF COUNSEL.
(i) The Agent shall have received a legal opinion,
dated the Effective Date, from Weil, Gotshal & ▇▇▇▇▇▇ LLP, special New
York counsel to the Loan Parties, substantially in the form set forth
as Exhibit 4.1(f)(i).
(ii) The Agent shall have received a legal opinion,
dated the Restatement
57
Effective Date, from ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, general counsel of the Borrower,
substantially in the form set forth as Exhibit 4.1(f)(ii).
(g) INSURANCE. The Agent shall have received a certificate of
insurance demonstrating insurance coverage in respect of each of the Loan
Parties of types, in amounts, with insurers and with other terms satisfactory to
the Lenders, which certificate shall indicate that the Agent and the Lenders are
named additional insured as their interests may appear and shall contain a
lenders loss payee endorsement in favor of the Agent in form and substance
satisfactory to the Agent.
(h) LIEN SEARCH REPORTS. The Agent shall have received
satisfactory reports of UCC, tax lien, judgment and litigation searches
conducted by a search firm acceptable to the Agent and the Lenders with respect
to the Loan Parties in each of the locations set forth in Schedule 4.1(h).
(i) UCC-1 FINANCING STATEMENTS. The Agent shall have received
signed copies of each UCC-1 financing statement signed by a Loan Party as debtor
naming the Agent as secured party in form suitable for filing in the
jurisdictions set forth in Schedule 1 to the Security Agreement, to the extent
requested by the Agent.
(j) RECORDATION OF AMENDMENTS. The Agent shall have received
(x) the Borrower's written instructions to the Title Company authorizing the
recordation of the Mortgage Amendments and Assignment Amendments in the
appropriate real estate records of the applicable jurisdiction in which each and
every Mortgaged Property is located and (y) evidence (including, without
limitation, payment instructions given by the Borrower) that all mortgage or
intangible taxes or recording charges required to be paid in connection with the
execution, delivery or recording of the Security Documents (including, without
limitation, the Mortgage Amendments and the Assignment Amendments) as well as
all title premiums and other title and survey charges have been deposited with
the Title Company.
(k) TITLE REPORTS. The Agent shall have received a title report
or title insurance commitment (a
58
"TITLE REPORT") issued by Chicago Title Insurance Company (or other title
insurance company reasonably satisfactory to the Agent and the Lenders) (the
"TITLE COMPANY") wherein such Title Company certifies to the Agent that an
examination of title to each of the Mortgaged Properties has been made in
accordance with the Title Company's usual procedures for the issuance of a
lender's form of title insurance policy and such examination shows the lien of
each Mortgage as a first priority mortgage and/or deed of trust and good and
marketable title to each of the Mortgaged Properties being vested in the Loan
Party which granted the Mortgage relating thereto, in each case free and clear
of all Liens except the Liens permitted pursuant to Sections 7.3(a), (b), (c),
(d), (e) or (f) (hereinafter collectively referred to as "PERMITTED LIENS").
The Borrower shall be responsible for paying the full amount of all charges due
in connection with the issuance of the Title Reports.
(l) ENVIRONMENTAL MATTERS. The Agent shall be satisfied that
neither the Borrower nor any of its Subsidiaries is subject to any present or
contingent environmental liability or potential Environmental Claim which could
reasonably be expected to have a Material Adverse Effect.
(m) CERTIFIED RESOLUTIONS, ETC. The Agent shall have received
(1) a certificate of the secretary or assistant secretary of each of the Loan
Parties and dated the Effective Date certifying (i) the names and true
signatures of the incumbent officers of such Person authorized to sign the
applicable Loan Documents, (ii) the resolutions of such Person's Board of
Directors approving and authorizing the execution, delivery and performance of
all Transaction Documents executed by such Person, (iii) that there have been no
changes in the by-laws of such Person since March 27, 1996, except as otherwise
set forth in such certificate, and, to the extent of any such changes, a copy
thereof and (iv) that there have been no changes in the certificate of
incorporation of such Person since March 27, 1996, except as otherwise set forth
in such certificate, and, to the extent of any such changes, a copy thereof
certified by the Secretary of State of incorporation of such Loan Party and (2)
a good standing certificate from the Secretary of State of incorporation of the
Borrower dated not more than ten Business Days prior to the Effective Date.
59
(n) FEES AND EXPENSES. The Agent shall have received, for its
account and for the account of each Lender, as applicable, all Fees and other
fees and expenses due and payable hereunder on or before the Effective Date to
the extent statements therefor have been delivered to the Agent and the
Borrower, including, without limitation, the fees and expenses accrued through
the Effective Date, of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel to the
Agent.
(o) CONSENTS, LICENSES, APPROVALS, ETC. The Agent shall have
received copies of all consents, licenses and approvals, if any, required in
connection with the execution, delivery and performance by the Loan Parties or
any of their respective Subsidiaries, and the validity and enforceability, of
the Transaction Documents, or in connection with any of the Transactions, and
such consents, licenses and approvals shall be in full force and effect.
(p) PROJECTIONS. The Agent shall have received projections
prepared by the Borrower demonstrating the projected consolidated financial
condition and results of operations of the Borrower and its Subsidiaries for the
period from the Effective Date through the fiscal quarter of the Borrower ending
December 31, 2000, which projections shall be accompanied by a written statement
of assumptions underlying the projections, and all the foregoing shall be
satisfactory to the Agent and the Lenders.
(q) INDEBTEDNESS. The Existing Notes shall be subordinated to
the Loans and the Standby Letters of Credit on terms and conditions satisfactory
to the Agent and the Lenders.
Section 4.2 CONDITIONS PRECEDENT TO EACH TERM LOAN ADVANCE. The
obligation of each Lender to make each Term Loan Advance is subject to the
satisfaction on the date the initial Term Loan Advance is made of the following
conditions precedent:
(a) TERM NOTES. The Borrower shall have executed and delivered
to each of the Lenders the appropriate Term Notes in the amount, maturity and as
otherwise provided herein.
60
(b) OPINIONS OF COUNSEL.
(i) The Agent shall have received a legal opinion,
dated the date the initial Term Loan Advance is made from Weil,
Gotshal & ▇▇▇▇▇▇ LLP, special New York counsel to the Loan Parties,
substantially in the form set forth as Exhibit 4.2(b)(i).
(ii) The Agent shall have received a legal opinion,
dated the date the initial Term Loan Advance is made from ▇▇▇▇
▇▇▇▇▇▇▇▇▇, general counsel of the Borrower, substantially in the form
set forth as Exhibit 4.2(b)(ii).
(c) ADDITIONAL MATTERS. The Agent shall have received such other
certificates, opinions, documents and instruments relating to such Term Loan as
may have been reasonably requested by the Agent or Required Lenders.
Section 4.3 CONDITIONS PRECEDENT TO ALL REVOLVING LOANS, THE TERM
LOAN ADVANCES AND ISSUANCES OF LETTERS OF CREDIT. The obligation of each Lender
to make any Revolving Loan or Term Loan Advance, or the Issuing Bank to issue
any Standby Letter of Credit, is subject to the satisfaction on the date such
Revolving Loan or Term Loan Advance is made or Standby Letter of Credit is
issued of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained herein and in the other Loan Documents (other than
representations and warranties which expressly speak only as of a different
date) shall be true and correct in all material respects on such date both
before and after giving effect to the making of such Revolving Loans, the Term
Loan Advances or issuing of such Standby Letter of Credit.
(b) NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of
Default shall have occurred and be continuing on such date either before or
after giving effect to the making of such Revolving Loans, Term Loan Advances or
issuing of such Standby Letter of Credit.
61
(c) NO INJUNCTION. No law or regulation shall have been adopted,
no order, judgment or decree of any governmental authority shall have been
issued, and no litigation shall be pending or threatened, which in the judgment
of the Required Lenders would enjoin, prohibit or restrain, or impose or result
in the imposition of any material adverse condition upon, the making or
repayment of the Revolving Loans, the Term Loan Advances or the consummation of
the Transactions.
(d) NO MATERIAL ADVERSE CHANGE. No event, act or condition shall
have occurred after December 31, 1996 which, in, the judgment of the Required
Lenders, has had or could have a Material Adverse Effect.
(e) NOTICE OF BORROWING. The Agent shall have received a fully
executed Notice of Borrowing in respect of the Loans to be made on such date.
(f) ADDITIONAL MATTERS. The Agent shall have received such other
certificates, opinions, documents and instruments relating to the Transactions
as may have been reasonably requested by the Agent or Required Lenders.
The acceptance of the proceeds of each Revolving Loan, each Term Loan
Advance and the issuance of each Standby Letter of Credit shall constitute a
representation and warranty by the Borrower to each of the Lenders and the
Issuing Bank that all of the conditions required to be satisfied under this
Section 4 in connection with the making of such Revolving Loan or such Term Loan
Advance or issuance of such Standby Letter of Credit have been satisfied.
All of the Revolving Notes, the Term Notes, if any, certificates,
agreements, legal opinions and other documents and papers referred to in this
Section 4, unless otherwise specified, shall be delivered to the Agent for the
account of each of the Lenders and, except for the Revolving Notes and the Term
Notes, if any, in sufficient counterparts for each of the Lenders, and shall be
satisfactory in form and substance to each Lender in its sole discretion.
62
SECTION 5. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lenders to enter into this Agreement and to
make the Revolving Loans, the Term Loan and the Issuing Bank to issue the
Standby Letters of Credit, the Borrower makes the following representations and
warranties, which shall survive the execution and delivery of this Agreement and
the Revolving Notes and the making of the Revolving Loans, the Term Loan and the
issuing of the Standby Letters of Credit:
Section 5.1 CORPORATE STATUS. Each Loan Party (i) is a duly
organized and validly existing corporation in good standing under the laws of
the jurisdiction of its incorporation, (ii) has the corporate power and
authority to own its property and assets and to transact the business in which
it is engaged or presently proposes to engage and (iii) except where the failure
to do so would not, in the aggregate, result in a Material Adverse Effect, has
duly qualified and is authorized to do business and is in good standing as a
foreign corporation in every jurisdiction in which it owns or leases real
property or in which the nature of its business requires it to be so qualified.
Section 5.2 CORPORATE POWER AND AUTHORITY. Each Loan Party has the
corporate power and authority to execute, deliver and carry out the terms and
provisions of each of the Transaction Documents to which it is a party and has
taken all necessary corporate action to authorize the execution, delivery and
performance by it of such Transaction Documents. Each Loan Party has duly
executed and delivered each of the Transaction Documents to which it is party,
and each such Transaction Document constitutes its legal, valid and binding
obligation, enforceable in accordance with its terms.
Section 5.3 NO VIOLATION. Neither the execution, delivery or
performance by any Loan Party of the Transaction Documents to which it is a
party, nor compliance by it with the terms and provisions thereof nor the
consummation of the Transactions, (i) will contravene any applicable provision
of any law, statute, rule, regulation, order, writ, injunction or decree of any
court or governmental instrumentality or (ii) will conflict or be inconsistent
with or result in any breach of, any of the terms, covenants, conditions or
provisions of, or consti-
63
tute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien (except pursuant to the Security
Documents) upon any of the property or assets of any Loan Party pursuant to the
terms of any indenture, mortgage, deed of trust, agreement or other instrument
to which such Loan Party is a party or by which it or any of its property or
assets is bound or to which it may be subject, or (iii) will violate any
provision of the certificate of incorporation or by-laws of any Loan Party.
Section 5.4 LITIGATION. There are no actions, suits or proceedings
pending or, to the best knowledge of the Borrower, threatened (i) with respect
to any of the Transactions or Transaction Documents or (ii) that could,
individually or in the aggregate, result in a Material Adverse Effect.
Section 5.5 FINANCIAL STATEMENTS; FINANCIAL CONDITION; ETC. The
internally prepared financial statements of the Borrower and its Subsidiaries
dated as of May 31, 1997 (the "INTERNAL FINANCIALS") delivered to the Agent and
the Lenders in connection with this Agreement were prepared in accordance with
GAAP consistently applied and fairly present the financial condition and the
results of operations of the entities covered thereby on the dates and for the
periods covered thereby and subject to normally recurring year-end adjustments.
No Loan Party has any material liability (contingent or otherwise) other than
those reflected on the Internal Financials or as set forth on Schedule 5.5.
Section 5.6 SOLVENCY. On the Effective Date and after and giving
effect to the Transactions, (x) the Borrower and (y) the Borrower and its
Subsidiaries, on a consolidated basis, will be Solvent.
Section 5.7 PROJECTIONS. The projections delivered to the Agent and
the Lenders in connection with this Agreement have been prepared on the basis of
the assumptions accompanying them, and such projections and assumptions, as of
the date of preparation thereof, are reasonable and represent the Borrower's
good faith estimate of its future financial performance, it being understood
that nothing contained in this Section shall constitute a representation or
warranty that such future
64
financial performance or results of operations will in fact be achieved.
Section 5.8 MATERIAL ADVERSE CHANGE. Since the date of the most
recent audited consolidated financial statements of the Borrower dated December
31, 1996, there has occurred no event, act or condition which has or could have
resulted in a Material Adverse Effect.
Section 5.9 USE OF PROCEEDS; MARGIN REGULATIONS. All proceeds of
each Revolving Loan, the Term Loan and each Standby Letter of Credit will be
used by the Borrower only in accordance with the provisions of Sections 2.22 and
3.1. No part of the proceeds of any Revolving Loan, the Term Loan or any Standby
Letter of Credit will be used by the Borrower to purchase or carry any Margin
Stock or to extend credit to others for the purpose of purchasing or carrying
any Margin Stock. Neither the making of any Revolving Loan or the Term Loan nor
the use of the proceeds thereof will violate or be inconsistent with the
provisions of Regulations G, T, U or X of the Federal Reserve Board.
Section 5.10 GOVERNMENTAL APPROVALS. No order, consent, approval,
license, authorization, or validation of, or filing, recording or registration
with, or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection with
(i) the execution, delivery and performance of any Transaction Document or the
consummation of any of the Transactions or (ii) the legality, validity, binding
effect or enforceability of any Transaction Document, except those listed on
Schedule 5.10 that have already been duly made or obtained and remain in full
force and effect.
Section 5.11 SECURITY INTERESTS AND LIENS. The Security Documents
create, as security for the Obligations, valid and enforceable security
interests in and Liens on all of the Collateral, in favor of the Agent for the
ratable benefit of the Lenders, and subject to no other Liens other than those
Liens permitted pursuant to Section 7.3(a), (b), (c), (d) and (e). Upon the
satisfaction of the conditions precedent described in Sections 4.1(a)(iii),
(iv), (v), (vi) and (ix), (j), (k) and (l) of the Original Agreement and the
execution of the Security Agreements (and related UCC-1 financing statements)
65
by each of Wellcraft Marine Corp. and ▇▇▇▇▇▇/Glastron Boats, Inc., such security
interests in and Liens on the Collateral shall be superior to and prior to the
rights of all third parties (except as disclosed on Schedule 5.11), and no
further recordings or filings are or will be required in connection with the
creation, perfection or enforcement of such security interests and Liens, other
than the filing of continuation statements in accordance with applicable law.
Section 5.12 TAX RETURNS AND PAYMENTS. Each Loan Party has filed all
tax returns required to be filed by it and has paid all taxes and assessments
payable by it which have become due other than those not yet delinquent or those
that are adequately reserved against in accordance with GAAP which are being
diligently contested in good faith by appropriate proceedings.
Section 5.13 ERISA. The Borrower has no Plans other than those
listed on Schedule 5.13. No accumulated funding deficiency (as defined in
Section 412 of the Code or Section 302 of ERISA) or, Reportable Event has
occurred with respect to any ERISA Plan as to which there remains any
liabilities under Title IV of ERISA. There are no Unfunded Benefit Liabilities
under any ERISA Plan. The Borrower and each member of its ERISA Controlled
Group have complied with the requirements of Section 515 of ERISA with respect
to each Multiemployer Plan and is not in "default" (as defined in Section
4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan. The
aggregate potential total withdrawal liability, and the aggregate potential
annual withdrawal liability payments of the Borrower and the members of its
ERISA Controlled Group as determined in accordance with Title IV of ERISA as if
the Borrower and the members of its ERISA Controlled Group had completely
withdrawn from all Multiemployer Plans is not greater than $250,000 and
$100,000, respectively. To the best knowledge of the Borrower and each member
of its ERISA Controlled Group, no Multiemployer Plan is or is likely to be in
reorganization (as defined in Section 4241 of ERISA or Section 418 of the Code)
or is insolvent (as defined in Section 4245 of ERISA). No material liability to
the PBGC (other than required premium payments), the Internal Revenue Service,
any Plan or any trust established under Title IV of ERISA has been, or is
expected by the Borrower or any member of its ERISA Controlled Group to be,
incurred by
66
the Borrower or any member of its ERISA Controlled Group. Except as otherwise
disclosed on Schedule 5.13 hereto, neither the Borrower nor any member of its
ERISA Controlled Group has any contingent liability with respect to any
post-retirement benefit under any "welfare plan" (as defined in Section 3(l) of
ERISA), other than liability for continuation coverage under Part 6 of Title I
of ERISA. No lien under Section 412(n) of the Code or 302(f) of ERISA or
requirement to provide security under Section 401(a)(29) of the Code or Section
307 of ERISA has been or is reasonably expected by the Borrower or any member of
its ERISA Controlled Group to be imposed on the assets of the Borrower or any
member of its ERISA Controlled Group.
Section 5.14 INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY
ACT. Neither the Borrower nor any of its Subsidiaries is (x) an "investment
company" or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended, (y) a "holding
company" or a "subsidiary company" of a "holding company" or an "affiliate" of
either a "holding company" or a "subsidiary company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended, or (z) subject to any
other Federal or state law or regulation which purports to restrict or regulate
its ability to borrow money.
Section 5.15 REPRESENTATIONS AND WARRANTIES IN TRANSACTION DOCUMENTS.
All representations and warranties made by any Loan Party in the Transaction
Documents (other than the Loan Documents) are true and correct in all material
respects. None of such representations and warranties are inconsistent in any
material respect with the representations and warranties of any Loan Party made
herein or in any other Loan Document.
Section 5.16 TRUE AND COMPLETE DISCLOSURE; FINANCIAL STATEMENTS. All
factual information (taken as a whole) furnished by or on behalf of any Loan
Party in writing to the Agent or any Lender for purposes of or in connection
with this Agreement or any of the Transactions is true and accurate in all
material respects on the date as of which such information is dated or furnished
and not incomplete by omitting to state any material fact necessary to make such
information (taken as a whole) not misleading at such time. All of the
financial statements
67
of the Borrower and its Subsidiaries furnished by or on behalf of any Loan Party
to the Agent or any Lender for purposes of or in connection with the
Transactions were prepared in accordance with GAAP and fairly present the
financial condition and results of operations of the appropriate Loan Parties at
the dates and for the periods respectively covered thereby. As of the Effective
Date, there are no facts, events or conditions known to the Borrower which,
individually or in the aggregate, have or could be expected to have a Material
Adverse Effect.
Section 5.17 CORPORATE STRUCTURE; CAPITALIZATION. Schedule 5.17
hereto sets forth the number of authorized and issued shares of capital stock of
the Borrower and each of its Subsidiaries, the par value thereof and the
registered owner(s) thereof. All of such stock has been duly and validly issued
and is fully paid and non-assessable. Neither any Loan Party nor any such
Subsidiary has outstanding any securities convertible into or exchangeable for
its capital stock nor does any Loan Party or any such Subsidiary have
outstanding any rights to subscribe for or to purchase, or any options for the
purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
its capital stock.
Section 5.18 ENVIRONMENTAL MATTERS. Except for matters which in the
aggregate would not reasonably be expected to give rise to a Material Adverse
Effect:
(a)(i) each of the Loan Parties is in compliance with all
applicable Environmental Laws, (ii) each of the Loan Parties has all
Environmental Approvals required to operate their businesses as presently
conducted or as reasonably anticipated to be conducted, (iii) none of the Loan
Parties has received any communication, whether from a governmental authority,
citizens group, employee or otherwise, that alleges that such Loan Party is not
in compliance with all Environmental Laws, and (iv) to the Borrower's best
knowledge after due inquiry, there are no circumstances that may prevent or
interfere with such compliance in the future;
(b) there is no Environmental Claim pending or threatened against
any Loan Party;
68
(c) there are no past or present actions, activities,
circumstances, conditions, events or incidents, including, without limitation,
the release, emission, discharge or disposal of any Material of Environmental
Concern, that could form the basis of any Environmental Claims against any of
the Loan Parties; and
(d)(i) there are no on-site or off-site locations in which any
Loan Party has stored, disposed or arranged for the disposal of materials of
Environmental Concern, (ii) there are no underground storage tanks located on
property owned or leased by any Loan Party, (iii) there is no friable asbestos
contained in or forming part of any building, building component, structure or
office space owned or leased by any Loan Party, and (iv) no polychlorinated
biphenyls (PCB's) are used or stored at any property owned or leased by any Loan
Party.
Section 5.19 SENIOR INDEBTEDNESS. All of the Obligations constitute
"Senior Indebtedness" within the meaning ascribed to such term in the
Subordinated Debt Financing Documents and the Subordination Agreements.
Section 5.20 PATENTS, TRADEMARKS, ETC. Each of the Loan Parties has
obtained and holds in full force and effect, free from burdensome restrictions,
all patents, trademarks, servicemarks, trade names, copyrights and other such
rights, in each case which are necessary for the operation of its business as
presently conducted. No product, process, method, substance, part or other
material presently manufactured by any Loan Party in connection with such
business infringes any patent, trademark, service ▇▇▇▇, trade name, copyright,
license or other right owned by any other Person, which infringement could
result in a Material Adverse Effect. There is not pending or overtly threatened
any claim or litigation against or affecting any Loan Party contesting its right
to sell or use any such product, process, method, substance, part or other
material.
Section 5.21 OWNERSHIP OF PROPERTY.(a) Schedule 5.21(a)(i) sets
forth all the real property owned or leased by the Loan Parties and used or held
for use in connection with the business of the Loan Parties and identifies the
street address (or a legal description of such property), the current owner (and
current record owner, if different) and whether such property is leased
69
or owned. The Loan Parties have good and marketable fee simple title to or
valid and subsisting leasehold interests in all of such real property free and
clear of all liens, claims, encumbrances, restrictions, rights of way,
easements, encroachments and charges or adverse claims or interests of any
nature other than Liens permitted by Section 7.3, and good and valid title to
all of their personal property other than such immaterial real property set
forth on Schedule 5.21(a)(ii) subject to no Lien of any kind except Liens
permitted hereby. The Loan Parties enjoy peaceful and undisturbed possession
under all of their respective leases.
(b) Except as set forth on Schedule 5.21(b), all buildings,
structures, heating and air conditioning equipment, plumbing, electrical and
other mechanical systems and equipment and the roofs, walls and other structural
components included in the Properties are in good operating condition and repair
(normal wear and tear excepted), do not require any material repairs and are
adequate for the uses for which they are currently utilized and comply in all
material respects with all applicable laws, building, fire, health and safety
codes, ordinances and zoning rules and zoning ordinances. There are no pending
or, to the Loan Parties' knowledge, threatened material suits, actions or
proceedings, including, without limitation, condemnation or eminent domain
proceedings, affecting the Mortgaged Property or any part thereof.
(c) Except as otherwise disclosed to the Agent, to the best
knowledge of the Borrower, based on the Flood Hazard Certificates prepared by
the Central Flood Hazard Agency, none of the Properties are located in a flood
hazard area as defined by the Federal Insurance Administration.
(d) Except as disclosed in the surveys or Title Insurance
Policies delivered to the Agent hereunder as of the Effective Date, all
Improvements comprising a portion of any Property lie wholly within the boundary
and building restriction lines of such Property and no improvements on adjoining
properties encroach upon any Property.
Section 5.22 NO DEFAULT. No Loan Party is in default under or with
respect to any Transaction Document
70
or any other agreement, instrument or undertaking to which it is a party or by
which it or any of its property is bound in any respect which could result in a
Material Adverse Effect. No Default or Event of Default exists.
Section 5.23 LICENSES, ETC. The Loan Parties have obtained and hold
in full force and effect, all franchises, licenses, permits, certificates,
authorizations, qualifications, accreditations, easements, rights of way and
other rights, consents and approvals which are necessary for the operation of
their respective businesses as presently conducted.
Section 5.24 COMPLIANCE WITH LAW. Each Loan Party is in compliance
with all laws, rules, regulations, orders, judgments, writs and decrees other
than such non-compliance which, individually or in the aggregate, could not have
a Material Adverse Effect.
Section 5.25 NO BURDENSOME RESTRICTIONS. No Loan Party is a party to
any agreement or instrument or subject to any other obligation or any charter or
corporate restriction or any provision of any applicable law, rule or regulation
which, individually or in the aggregate, could have a Material Adverse Effect.
Section 5.26 BROKERS' FEES. Other than as set forth in the Offering
Memorandum, none of the Loan Parties has any obligation to any Person in respect
of any finder's, broker's, investment banking or other similar fee in connection
with any of the Transactions (other than with respect to the Agent and the
Lenders).
Section 5.27 LABOR MATTERS. There is no presently existing dispute
or controversy between the Borrower or any of its Subsidiaries and any of their
respective employees which has had or is likely to have, and the Borrower has no
reason to believe that the relationship of the Borrower and its Subsidiaries
with their unions or employees is likely to have, a Material Adverse Effect.
The Borrower and each of its Subsidiaries are in compliance in all material
respect with all federal and state laws with respect to non-discrimination in
employment and the payment of wages.
Section 5.28 DEALER ACCOUNT FINANCING. The Borrower and its
Subsidiaries do not have in the aggre-
71
gate in excess of $5,000,000 outstanding of Dealer Accounts or any other
Accounts with payment terms of greater than 12 months, excluding those Accounts
sold in any Dealer Account Transaction, existing as of the Effective Date.
SECTION 6. AFFIRMATIVE COVENANTS.
The Borrower covenants and agrees that on and after the Effective Date
and until the Total Commitment has terminated and the Obligations are paid in
full:
Section 6.1 INFORMATION COVENANTS. The Borrower will furnish to the
Agent and each Lender:
(a) ANNUAL FINANCIAL STATEMENTS. Within 90 days after the close
of each fiscal year of the Borrower, the consolidated and consolidating balance
sheet of the Borrower and its Subsidiaries as at the end of such fiscal year and
the related consolidated and consolidating statements of income and consolidated
cash flow and retained earnings for such fiscal year setting forth comparative
figures for the preceding fiscal year disclosing all loss contingencies of a
type requiring disclosure under standards promulgated by FASB and, with respect
to such consolidated financial statements, audited by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co. or
other independent certified public accountants of recognized national standing
reasonably acceptable to the Required Lenders, and accompanied by an opinion of
such accountants (which shall not be qualified) to the effect that such
consolidated financial statements fairly present the financial condition and
result of operations of the Borrower and its Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied.
(b) QUARTERLY FINANCIAL STATEMENTS. Within 45 days after the
close of each quarterly accounting period in each fiscal year of the Borrower,
the consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries as at the end of such quarterly period and the related consolidated
and consolidating statements of income and consolidated cash flow and retained
earnings for such quarterly period and for the elapsed portion of the fiscal
year ended with the last day of such quarterly period disclosing all material
changes in loss contingencies of a type requiring disclo-
72
sure under standards promulgated by FASB, in each case setting forth comparative
figures for the related periods in the prior fiscal year and accompanied by a
certificate of the chief financial officer of the Borrower which certifies that
such consolidated financial statements fairly present the financial condition
and result of operations of the Borrower and its Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied, subject to normal year-end
adjustments.
(c) MONTHLY FINANCIAL STATEMENTS. Within 30 days after the end
of each monthly reporting period in each fiscal year of the Borrower, the
consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries as at the end of such monthly reporting period and the related
consolidated and consolidating statements of income and consolidated cash flow
and retained earnings for such monthly reporting period and for the elapsed
portion of the fiscal year ended on the last day of such monthly reporting
period disclosing all material changes in loss contingencies of a type requiring
disclosure under standards promulgated by FASB, in each case setting forth
comparative figures for the related periods in the prior fiscal year and
accompanied by a certificate of the chief financial officer of the Borrower
which certifies that such consolidated financial statements fairly present the
financial condition and result of operations of the Borrower and its
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, subject to normal year-end and quarter-end adjustments.
(d) MANAGEMENT LETTERS. Promptly after the Borrower's receipt
thereof, a copy of any "management letter" or other material report received by
the Borrower from its certified public accountants.
(e) FINANCIAL PROJECTIONS. Within 60 days after the first day of
each fiscal year of the Borrower, commencing with the fiscal year beginning July
1, 1998, a financial forecast of results of operations and sources and uses of
cash (in the form of the projections provided to the Agent and the Lenders in
connection with this Agreement) prepared by the Borrower for the period
extending through the quarterly period ending with December 31, 2000, which
financial forecast shall include calculations showing PRO FORMA compliance with
the ▇▇▇▇▇-
73
cial covenants set forth in Section 7.1 for such period, accompanied by a
written statement of the assumptions used in connection therewith, together with
a certificate of the chief financial officer of the Borrower to the effect that
such budget and financial forecast and assumptions, taken as a whole, are
reasonable and represent the Borrower's good faith estimate of its future
financial requirements and performance. The financial statements required to be
delivered pursuant to clauses (a), (b) and (c) above shall be accompanied by a
comparison of the actual financial results set forth in such financial
statements to those contained in the forecasts delivered pursuant to this clause
(e) together, upon request of the Agent or any Lender, with an explanation of
any material variations from the results anticipated in such forecasts.
(f) CERTIFICATES. At the time of the delivery of the financial
statements under clauses (a), (b) and (c) above, a certificate of the accounting
firm or the chief financial officer of the Borrower which opines or certifies
with respect to such financial statements (i) that after due investigation and
reasonable inquiry, no Default or Event of Default has occurred during the
period commencing at the beginning of the accounting period covered by the
financial statements accompanied by such certificate and ending on the date of
such certificate or, if any Default or Event of Default has occurred, specifying
the nature and extent thereof and, if continuing, the action the Borrower
proposes to take in respect thereof, (ii) setting forth the calculations
required to establish whether the Borrower was in compliance with the provisions
of Section 7.1 during and as at the end of the accounting period covered by the
financial statements accompanied by such certificate and (iii) with respect to
the delivery of the financial statements set forth in clause (b) above,
specifying the Leverage Ratio and the category (as set forth in the definition
of Margin Percentage) for which reference to the applicable Margin Percentage
shall be determined.
(g) NOTICE OF DEFAULT OR LITIGATION. Promptly and in any event
within three (3) Business Days after any Loan Party obtains knowledge thereof,
notice of (i) the occurrence of any Default or Event of Default, (ii) any
litigation or governmental proceeding pending or threatened against the Borrower
or any or its Subsidiar-
74
ies which could result in a Material Adverse Effect and (iii) any other event,
act or condition which could result in a Material Adverse Effect.
(h) ERISA.
(i) As soon as possible and in any event within 10 days
after the Borrower or any member of its ERISA Controlled Group knows, or
has reason to know, that:
(A) any Termination Event with respect to an ERISA Plan
has occurred or will occur, or
(B) any condition exists with respect to an ERISA Plan
which presents a material risk of termination of the ERISA Plan or
imposition of an excise tax or other material liability on the
Borrower or any member of its ERISA Controlled Group, or
(C) the Borrower or any member of its ERISA Controlled
Group has applied for a waiver of the minimum funding standard under
Section 412 of the Code or Section 302 of ERISA, or
(D) the Borrower or any member of its ERISA Controlled
Group has engaged in a "prohibited transaction," as defined in Section
4975 of the Code or as described in Section 406 of ERISA, that is not
exempt under Section 4975 of the Code and Section 408 of ERISA, or
(E) the aggregate present value of the Unfunded Benefit
Liabilities under all ERISA Plans has in any year increased by
$100,000 or to an amount in excess of $250,000, or
(F) any condition exists with respect to a
Multiemployer Plan which presents a material risk of a partial or
complete withdrawal (as described in Section 4203 or 4205 of ERISA) by
the Borrower or any member of its
75
ERISA Controlled Group from a Multiemployer Plan, or
(G) the Borrower or any member of its ERISA Controlled
Group is in "default" (as defined in Section 4219(c)(5) of ERISA) with
respect to payments to a Multiemployer Plan, or
(H) a Multiemployer Plan is in "reorganization" (as
defined in Section 418 of the Code or Section 4241 of ERISA) or is
"insolvent" (as defined in Section 4245 of ERISA), or
(I) the potential withdrawal liability (as determined
in accordance with Title IV of ERISA) of the Borrower and the members
of its ERISA Controlled Group with respect to all Multiemployer Plans
has in any year increased by $100,000 or to an amount in excess of
$250,000, or
(J) there is an action brought against the Borrower or
any member of its ERISA Controlled Group under Section 502 of ERISA
with respect to its failure to comply with Section 515 of ERISA,
a certificate of the president or chief financial officer of the Borrower
setting forth the details of each of the events described in clauses (A)
through (J) above as applicable and the action which the Borrower or the
applicable member of its ERISA Controlled Group proposes to take with
respect thereto, together with a copy of any notice or filing from the PBGC
or which may be required by the PBGC or other agency of the United States
government with respect to each of the events described in clauses (A)
through (J) above, as applicable.
(ii) As soon as possible and in any event within two
Business Days after the receipt by the Borrower or any member of its ERISA
Controlled Group of a demand letter from the PBGC notifying the Borrower or
such member of its ERISA Controlled Group of its final decision finding
liability and
76
the date by which such liability must be paid, a copy of such letter,
together with a certificate of the president or chief financial officer of
the Borrower setting forth the action which the Borrower or such member of
its ERISA Controlled Group proposes to take with respect thereto.
(i) SEC FILINGS. Promptly upon transmission thereof, copies of
all regular and periodic financial information, proxy materials and other
information and reports, if any, which any Loan Party shall file with the
Securities and Exchange Commission or any governmental agencies substituted
therefor or which any Loan Party shall send to its stockholders.
(j) ENVIRONMENTAL. Promptly upon knowledge of a Responsible
Officer of the Borrower of any of the following conditions (if such condition
could reasonably give rise to a Material Adverse Effect), notice from the
Borrower specifying the nature of such condition and the applicable Loan Party's
proposed response thereto: (i) the receipt by any Loan Party of any written
communication, whether from a governmental authority, citizens group, employee
or otherwise, that alleges that such Loan Party is not in compliance with
applicable Environmental Laws, (ii) any Loan Party shall obtain actual knowledge
that there exists any Environmental Claim pending or threatened against such
Loan Party, (iii) any release, emission, discharge or disposal of any Material
of Environmental Concern that could form the basis of any Environmental Claim
against any Loan Party; (iv) actual knowledge of a Responsible Officer of the
Borrower that the Borrower or any of its Subsidiaries is subject to
investigation by any governmental authority evaluating whether any Remedial
Action is needed to respond to the Release or threatened Release of any Material
of Environmental Concern into the environment; or (v) actual knowledge that
would make the representation in Section 5.18(c) false as of the time such
knowledge is obtained by a Responsible Officer of the Borrower.
(k) REFINANCINGS. No later than five (5) Business Days prior to
any extension, refinancing or refunding of Indebtedness pursuant to Section
7.2(b), shall deliver to the Agent copies of the documentation relating to such
extension, refinancing or refunding
77
together with such other information related thereto as the Agent may reasonably
request.
(l) CHARTER DOCUMENTS. No later than five (5) Business Days
prior to any change therein, the proposed changes to the certificate of
incorporation or the by-laws of the Borrower or any of its Subsidiaries.
(m) NOTICE OF DISSOLUTION. Promptly upon any dissolution of a
Designated Subsidiary, notice thereof.
(n) DEALER ACCOUNT PURCHASE AGREEMENT. Promptly upon the
Borrower or any Subsidiary entering into any Dealer Account Purchase Agreement,
a copy thereof.
(o) OTHER INFORMATION. From time to time, such other information
or documents (financial or otherwise) as the Agent or any Lender may reasonably
request.
Section 6.2 BOOKS, RECORDS AND INSPECTIONS. The Borrower shall, and
shall cause each of its Subsidiaries to, keep proper books of record and account
in which full, true and correct entries in conformity with GAAP and all
requirements of law shall be made of all dealings and transactions in relation
to its business and activities. The Borrower shall, and shall cause each of its
Subsidiaries to, permit officers and designated representatives of the Agent or
any Lender to visit and inspect any of the properties of the Borrower or any of
its Subsidiaries, and to examine the books of record and account of the Borrower
or any of its Subsidiaries, and discuss the affairs, finances and accounts of
the Borrower or any of its Subsidiaries with, and be advised as to the same by,
its and their officers and independent accountants, all upon reasonable notice
to the Borrower and at such reasonable times as the Agent or such Lender may
desire.
Section 6.3 MAINTENANCE OF INSURANCE. The Borrower shall, and shall
cause each of its Subsidiaries to, (a) maintain with financially sound and
reputable insurance companies insurance on itself and its properties in at least
such amounts and against at least such risks as are customarily insured against
in the same
78
general area by companies engaged in the same or a similar business, which
insurance shall in any event not provide for materially less coverage than the
insurance in effect on the Original Effective Date and (b) furnish to the Agent
and each Lender from time to time, upon written request, the policies under
which such insurance is issued, certificates of insurance and such other
information relating to such insurance as the Agent or such Lender may request.
Section 6.4 TAXES. (a) The Borrower shall pay or cause to be paid,
and shall cause each of its Subsidiaries to pay or cause to be paid, prior to
becoming past due, all taxes, charges and assessments and all other lawful
claims required to be paid by the Borrower or such Subsidiaries, except as
contested in good faith and by appropriate proceedings diligently conducted, if
adequate reserves have been established with respect thereto in accordance with
GAAP.
(b) Except to the extent required by applicable law, the Borrower
shall not, and shall not permit any of its Subsidiaries to, file or consent to
the filing of any consolidated, combined or unitary tax return with any Person
(other than the Borrower and/or its Subsidiaries).
Section 6.5 CORPORATE FRANCHISES. The Borrower shall, and shall
cause each of its Subsidiaries to, do or cause to be done, all things necessary
to preserve and keep in full force and effect its existence and its patents,
trademarks, servicemarks, tradenames, copyrights, franchises, licenses, permits,
certificates, authorizations, qualifications, accreditations, easements, rights
of way and other rights, consents and approvals other than those which (a) the
board of directors of the Borrower has determined that the preservation thereof
is no longer desirable in the conduct of the Borrower and its Subsidiaries taken
as a whole and (b) individually or in the aggregate, could not have a Material
Adverse Effect.
Section 6.6 COMPLIANCE WITH LAW. The Borrower shall, and shall cause
each of its Subsidiaries to, comply in all material respects with all applicable
laws, rules, statutes, regulations, decrees and orders of, and all applicable
restrictions imposed by, all governmental
79
bodies, domestic or foreign, in respect of the conduct of their business and the
ownership of their property, including, without limitation, all Environmental
Laws, other than those which, individually or in the aggregate, could not have a
Material Adverse Effect.
Section 6.7 PERFORMANCE OF OBLIGATIONS. The Borrower shall, and
shall cause each of its Subsidiaries to, perform all of its obligations in all
material respects under the terms of each mortgage, indenture, security
agreement, debt instrument, lease, undertaking and contract by which it or any
of its properties is bound or to which it is a party except where such
non-performance could not have a Material Adverse Effect and shall perform all
of its obligations to make payment when due of all amounts payable pursuant to
the Subordinated Debt Financing Documents to the extent permitted by the
subordination terms thereof.
Section 6.8 MAINTENANCE OF PROPERTIES. The Borrower shall, and shall
cause each of its Subsidiaries to, ensure that its properties used or useful in
its business are kept in good repair, working order and condition, normal wear
and tear excepted, and make all repairs, renewals, replacements, additions,
betterments and improvements thereto, as shall be reasonable necessary for the
proper conduct of the Borrower and its subsidiaries taken as a whole.
Section 6.9 BORROWING BASE CERTIFICATE. The Borrower shall deliver
(i) on or prior to the twentieth day of each month (or if such day is not a
Business Day, the first Business Day thereafter), a Borrowing Base Certificate
showing the Borrowing Base as of the last Business Day of the prior month, (ii)
within thirty (30) days after the consummation of any sale of any assets
requiring a prepayment of Loans as a result of a reduction in the Total
Revolving Loan Commitment pursuant to Section 2.11, an updated Borrowing Base
Certificate which shall reflect any reduction in the Borrowing Base as a result
of such asset sale(s), and (iii) within ten (10) Business Days after a request
by the Agent, an updated Borrowing Base Certificate showing the Borrowing Base
then in effect adjusted to reflect the projected effects of any event (other
than an asset sale covered by clause (ii) hereof) identified by the Agent in
such request and
80
deemed reasonably likely to have a material effect on the Borrowing Base by the
Agent.
Section 6.10 LICENSES, PERMITS, ETC. The Borrower shall obtain and
maintain in full force and effect, or cause each of its Subsidiaries on behalf
of the Borrower and its Subsidiaries to obtain and maintain in full force and
effect, all licenses, permits, governmental approvals, franchises,
authorizations or other rights necessary for the operation of its respective
business; and notify the Agent in writing, promptly after any Loan Party learns
thereof, of the suspension, cancellation, revocation or discontinuance of or any
pending or threatened action or proceeding seeking to suspend, cancel, revoke or
discontinue any such license, permit, governmental approval, franchise
authorization or right.
Section 6.11 ENVIRONMENTAL REPORTS. Upon the reasonable written
request by the Agent, the Borrower shall promptly submit to the Agent and the
Lenders a report providing an update of the status of each environmental, health
or safety compliance, hazard or liability issue identified in any notice or
report required pursuant to Section 6.1(j) above and any other environmental,
health and safety compliance obligation, remedial obligation or liability that
could have a Material Adverse Effect.
Section 6.12 APPRAISALS. Within ninety (90) days after a request by
the Agent, the Borrower shall deliver to the Agent appraisals of the Mortgaged
Property in the event that the Agent determines such appraisals are required by
applicable law (including, without limitation, the regulations promulgated under
the Financial Institutions Reform, Recovery and Enforcement Act of 1989, as
amended), which appraisals shall be in form and substance satisfactory to the
Agent, and conducted by appraisers selected or approved by the Agent.
Section 6.13 ADDITIONAL GUARANTORS. If (i) any Person becomes a
Subsidiary of the Borrower after the Effective Date, (ii) the Borrower or any
Subsidiary of the Borrower that is a Guarantor transfers or causes to be
transferred, in one transaction or a series of related transactions, property or
assets (including, without limitation, businesses, divisions, real property,
assets or equipment) which in the aggregate have a value equal
81
to or greater than the lesser of $1,000,000 and 5% of the Borrower's total
assets determined on a consolidated basis as of the time of transfer to any
Subsidiary or Subsidiaries of the Borrower that is not a Guarantor or are not
Guarantors (other than AMF Insurance Company of Bermuda Ltd.), or (iii) any
Subsidiary (other than AMF Insurance Company of Bermuda Ltd.) of the Borrower
which is not a Guarantor has a value equal to or greater than the lesser of
$1,000,000 and 5% of the Borrower's total assets determined on a consolidated
basis as of the time of determination, the Borrower shall cause such Subsidiary
or Subsidiaries to execute and deliver to the Agent an agreement to become a
Guarantor in the form of Annex B to the Guaranty and such other documents,
including Security Documents, as the Agent shall require.
Section 6.14 AMF INSURANCE COMPANY OF BERMUDA LTD. As of March 31,
1997, the principal asset of AMF Insurance Company of Bermuda Ltd. is a
promissory note from Minstar, Inc. in the amount of $3,000,000. The Borrower
shall cause that neither it nor any of its Subsidiaries make any other loan,
advance, investment or payment of any kind whatsoever to, nor incur or permit to
exist any other obligation, contingent or otherwise, to or on behalf of, AMF
Insurance Company of Bermuda Ltd., other than (i) payments on such promissory
note to meet insurance claims payable by AMF Insurance Company of Bermuda Ltd.
as they are due, (ii) additional payments with respect to the operating expenses
of AMF Insurance Company of Bermuda Ltd. in an aggregate yearly amount not to
exceed $100,000 and (iii) reimbursement of fees paid by AMF Insurance Company of
Bermuda Ltd. with respect to letters of credit with an aggregate face amount
outstanding at any time not to exceed $3,285,000.
SECTION 7. NEGATIVE COVENANTS.
The Borrower covenants and agrees that on and after the Effective Date
until the Total Commitment has terminated and the Obligations are paid in full:
Section 7.1 FINANCIAL COVENANTS.
(a) INTEREST COVERAGE RATIO. The Borrower shall not permit the
ratio of Consolidated Cumulative Cash Flow to Consolidated Interest Expense for
any period of four consecutive fiscal quarters of the Borrower
82
(taken as one accounting period) ended during any period set forth below, to be
less than the ratio set forth opposite such period:
Fiscal Quarter Ratio
-------------- -----
Effective Date through
March 30, 1998 1.00
March 31, 1998 through
June 29, 1998 1.20
June 30, 1998 through
December 30, 1998 1.40
December 31, 1998 through
December 30, 1999 1.50
December 31, 1999 and
thereafter 1.75
(b) MINIMUM CONSOLIDATED CUMULATIVE CASH FLOW. The Borrower shall
not permit Consolidated Cumulative Cash Flow for any period of four consecutive
fiscal quarters of the Borrower (taken as one accounting period) ended during
any period set forth below, to be less than the amount set forth opposite such
period:
Period Amount
------ ------
Effective Date through
March 30, 1998 $19,000,000
March 31, 1998 through
June 29, 1998 $23,000,000
June 30, 1998 through
December 30, 1998 $27,000,000
December 31, 1998 through
December 30, 1999 $30,000,000
December 31,1999 and
thereafter $34,000,000
(c) CAPITAL EXPENDITURES. The Borrower shall not make or incur
and shall not permit any of its
83
Subsidiaries to make or incur any Capital Expenditures in an amount exceeding
$10,000,000 during any fiscal year of the Borrower. In addition, such amount of
Capital Expenditures in any fiscal year may be increased by an amount, not to
exceed $3,000,000 in any such fiscal year, equal to the excess of (a)
$10,000,000 over (b) the amount of Capital Expenditures actually made or
incurred in the immediately preceding year.
(d) MINIMUM CONSOLIDATED NET WORTH. The Borrower shall not
permit Consolidated Net Worth at the end of each fiscal quarter ended during any
period set forth below to be less than the amount set forth opposite such period
below:
Fiscal Quarter Ended
During Period Amount
------------- ------
Effective Date through
June 29, 1998 $(10,000,000)
June 30, 1998 through
December 30, 1998 (7,500,000)
December 31, 1998 through
June 29, 1999 (6,000,000)
June 30, 1999 through
December 30, 1999 2,000,000
December 31, 1999 through
March 30, 2000 4,000,000
March 31, 2000 and
thereafter 7,000,000
Section 7.2 INDEBTEDNESS. The Borrower shall not, and shall not
permit any of its Subsidiaries to, create, incur, assume, suffer to exist or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, other than:
(a) Indebtedness hereunder and under the other Loan Documents
(other than Hedging Agreements);
84
(b) Indebtedness outstanding on the Effective Date and set forth
on Schedule 7.2 hereto and any extension, refinancing or refunding thereof,
PROVIDED that the principal amount of the Indebtedness so extended, refinanced
or refunded shall not be increased above the principal amount thereof
outstanding immediately prior to such extension, refinancing or refunding, the
final maturity of the Indebtedness so extended, refinanced or refunded shall not
be changed to an earlier date, nor shall the amortization schedule be changed in
a manner which results in a shorter average life to maturity, nor shall the
terms (financial and otherwise) of such extension, refinancing or refunding be
less favorable to the Borrower or its Subsidiary, as the case may be;
(c) Indebtedness incurred pursuant to the Subordinated Debt
Financing Documents;
(d) [Intentionally Omitted]
(e) Indebtedness permitted under Section 7.6;
(f) Indebtedness with respect to Capital Leases and other
purchase money Indebtedness, in each case incurred to finance Capital
Expenditures permitted under Section 7.1, not in excess of $5,000,000 in the
aggregate at any one time outstanding; provided that any such Indebtedness shall
not exceed the lesser of the purchase price or the initial fair market value of
the asset so financed;
(g) in the case of the Borrower, Indebtedness to any of the
Restricted Subsidiaries and, in the case of any Subsidiary (other than AMF
Insurance Company of Bermuda Ltd.), Indebtedness to the Borrower or any of the
Restricted Subsidiaries (but only so long as such indebtedness is held by the
Borrower or a Restricted Subsidiary);
(h) Indebtedness of the Borrower in respect of Hedging Agreements
entered into with one or more Lenders on terms and conditions satisfactory to
the Agent; and
85
(i) Indebtedness of Minstar, Inc. to AMF Insurance Company of
Bermuda Ltd. described in Section 6.14.
Section 7.3 LIENS. The Borrower shall not, and shall not permit any
of its Subsidiaries to, create, incur, assume or suffer to exist, directly or
indirectly, any Lien on any of its property now owned or hereafter acquired,
other than:
(a) Liens existing on the Effective Date and set forth on
Schedule 7.3 hereto ("Permitted Liens");
(b) Liens for taxes not yet due or which are being contested in
good faith by appropriate proceedings diligently conducted and with respect to
which adequate reserves are being maintained in accordance with GAAP;
(c) Statutory Liens of landlords, carriers, warehousemen,
mechanics, materialmen and other Liens imposed by law (other than any Lien
imposed by ERISA or an Environmental Lien) created in the ordinary course of
business for amounts not yet due or which are being contested in good faith by
appropriate proceedings diligently conducted and with respect to which adequate
bonds have been posted;
(d) Liens (other than any Lien imposed by ERISA or an
Environmental Lien) incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other types
of social security, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money);
(e) Easements, rights-of-way, zoning and similar restrictions and
other similar charges or encumbrances of record listed in Schedule B II of the
title insurance policies issued by the Title Company to the Agent in connection
with the Original Agreement and other such charges or encumbrances not
interfering with the ordinary conduct of the business of the Borrower or any of
its Subsidiaries and which do not detract materially
86
from the value of the property to which they attach or impair materially the use
thereof by the Borrower or any of its Subsidiaries or materially adversely
affect the security interests of the Agent or the Lenders therein;
(f) Liens granted to the Agent for the benefit of the Lenders
pursuant to the Security Documents securing the Obligations;
(g) Liens created pursuant to Capital Leases and to secure other
purchase-money Indebtedness permitted pursuant to Section 7.2(f), PROVIDED that
such Liens are only in respect of the property or assets subject to, and secure
only, the respective Capital Lease or other purchase-money Indebtedness and
attach within sixty (60) days of the construction or acquisition of such
property or asset; and
(h) Liens securing progress payments made by customers of the
Hatteras Yacht division (i) for yachts of at least 50 feet in length with a
price of no less than $1,000,000, (ii) so long as the amount of the progress
payments at all times exceeds or is approximately comparable to the cost of time
and materials then completed on such yacht, and (iii) such Lien is solely on the
yacht for which such progress payments were made and does not extend to any
other asset or property of any Loan Party.
Section 7.4 RESTRICTION ON FUNDAMENTAL CHANGES.
(a) The Borrower shall not, and shall not permit any of its
Subsidiaries to, in a single transaction or through a series of related
transactions, enter into any merger or consolidation, or liquidate, wind-up or
dissolve (or suffer any liquidation or dissolution), discontinue its business or
convey, lease, sell, transfer or otherwise dispose of, in one transaction or
series of transactions, all or any substantial part of its business or property,
whether now or hereafter acquired, except (i) as otherwise permitted under
Section 7.5, (ii) any direct or indirect wholly-owned Subsidiary of the Borrower
may merge into or convey, sell, lease or transfer all or substantially all of
its assets to, the Borrower or any other direct or indirect wholly-owned
Subsidiary of the Borrower in a transaction in which no Person other
87
than the Borrower or its direct or indirect wholly-owned Subsidiaries receives
any consideration, PROVIDED that immediately following such transaction, the
Agent shall have a perfected security interest in all of the assets and
properties which were Collateral prior to such transaction, and such security
interest in such Collateral (other than the stock of a corporation which was not
a survivor of a merger) shall be of the same priority as existed prior to such
transaction, and the survivor of such transaction shall execute and deliver any
Security Documents requested by the Agent, and (iii) pursuant to any Permitted
Organizational Changes; PROVIDED that (x) no Permitted Organizational Change
shall take place during the continuance of a Default or an Event of Default, and
(y) prior to the occurrence of any Permitted Organizational Change, the Borrower
shall deliver to the Agent an officer's certificate in the form of Exhibit
7.4(a).
(b) Except as set forth in Section 7.8, the Borrower shall not,
and shall not permit any of its Subsidiaries to, (i) acquire by purchase or
otherwise any property or assets of, or stock or other evidence of beneficial
ownership of, any Person, except purchases of inventory, equipment, materials
and supplies in the ordinary course of the Borrower's or such Subsidiary's
business, (ii) during the continuance of any Default or Event of Default, create
any Subsidiary, or (iii) enter into any partnership or joint venture.
(c) Borrower shall not, and shall not permit any of its
Subsidiaries to, amend its certificate of incorporation or by-laws; PROVIDED
that so long as no Default or Event of Default has occurred and is continuing,
the Borrower and its Subsidiaries may make changes to their respective
certificates of incorporation and bylaws other than those changes which,
individually or in the aggregate, could have a Material Adverse Effect.
Section 7.5 SALE OF ASSETS. The Borrower shall not, and shall not
permit any of its Subsidiaries to, convey, lease, sell, transfer or otherwise
dispose of (or agree to do so at any future time) all or any part of its
property or assets, except (a) sales of inventory in the ordinary course of
business, (b) sales of property which is uneconomic, obsolete or no longer
useful in its business provided that the aggregate net book value of
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all property so sold does not exceed $4,000,000 per fiscal year, (c) in addition
to the sales permitted pursuant to clause (b) above, the sales of assets listed
on Schedule 7.5(c) hereof; PROVIDED, HOWEVER, that the Borrower or such
Subsidiary, as the case may be, may only make sales permitted pursuant to clause
(b) above if it receives consideration at the time of such sale at least equal
to the Fair Market Value of the property sold, and at least 50% of the
consideration therefor received by the Borrower or such Subsidiary, as the case
may be, is in the form of cash; PROVIDED, FURTHER, that the amount of (i) any
liabilities of the Borrower or such Subsidiary (as shown on the Borrower's or
such Subsidiary's most recent balance sheet or in the notes thereto), as the
case may be, that are assumed by the purchaser in such transactions (other than
securities which are subordinated to the Obligations) and (ii) any cash
equivalents, notes or other obligations received by the Borrower or such
Subsidiary, as the case may be, from such transferee that are immediately (and
in any event within ninety (90) days) converted by the Borrower or such
Subsidiary, as the case may be, into cash, shall be deemed to be cash for
purposes of this Section, (d) sales of the Rocky Point Note and (e) subject in
each case to the review and written approval of the Agent (which approval shall
be in the Agent's sole discretion) leases of Real Property during such periods
that such Real Property is not being used in the business of the Borrower,
PROVIDED, HOWEVER, that any such lease shall not be for a period longer than 24
months.
Section 7.6 CONTINGENT OBLIGATIONS. The Borrower shall not, and
shall not permit any of its Subsidiaries to, create or become or be liable with
respect to any Contingent Obligation, except:
(a) pursuant to the Guaranty or any other Transaction Document;
(b) obligations (other than any such obligations permitted
pursuant to Sections 7.6(d) and 7.6(e))incurred by dealers of pleasure boats
selling products of the Borrower or one or more of its Subsidiaries in the
ordinary course of business in an aggregate amount at any one time outstanding
not to exceed $5,000,000;
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(c) Contingent Obligations which were in existence on the
Effective Date which are set forth on Schedule 7.6(c) hereof, and continuations
or replacements of any such Contingent Obligation so long as the amount in
respect of any such Contingent Obligation so continued or replaced has not been
and will not be increased, or which are either (i) disclosed in the audited
financial statements of the Borrower and its consolidated Subsidiaries dated as
of December 31, 1996 or (ii) are immaterial to the Borrower and its Subsidiaries
taken as a whole or to such Subsidiary;
(d) to permit recourse to the Borrower or any of its Subsidiaries
on account of a Dealer Account Transaction, provided the amount of such recourse
is not in excess of the amount of recourse provided pursuant to that certain
Dealer Account Purchase Agreement dated as of August 1, 1995, between GII and
Transamerica Commercial Finance Corporation; and
(e) notwithstanding subsections (a) through (d) of this Section
7.6, solely to permit the Recourse Obligations of the Borrower and any of its
Subsidiaries in connection with the Floor Plan Financing, pursuant to the terms
of the Repurchase Agreement, PROVIDED that the Recourse Obligations shall not
exceed an aggregate amount of $8,000,000 for any annual period of July 1 through
June 30, of which an aggregate amount not to exceed $5,000,000 during each such
annual period may constitute obligations on the part of the Borrower and any of
its Subsidiaries to repurchase goods which were financed by the financial
institutions pursuant to the Floor Plan Financing and an aggregate amount not to
exceed $3,000,000 during each such annual period may constitute indemnity
payments by the Borrower and any of its Subsidiaries relating to losses incurred
by the financial institutions resulting from the financial institutions'
financing or refinancing of goods to Dealers.
Section 7.7 DIVIDENDS. The Borrower shall not, and shall not permit
any of its Subsidiaries to, declare or pay any dividends (other than dividends
payable solely in common stock), or return any capital to, its stockholders or
authorize or make any other distribution, payment or delivery of property or
cash to its stockholders as such, or redeem, retire, purchase or
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otherwise acquire, directly or indirectly, any shares of any class of its
capital stock now or hereafter outstanding (or any options or warrants issued
with respect to its capital stock), or set aside any funds for any of the
foregoing purposes (all the foregoing "DIVIDENDS"), except that Dividends may be
made to the Borrower or any of its Subsidiaries by any of its wholly-owned
Subsidiaries.
Section 7.8 ADVANCES, INVESTMENTS AND REVOLVING LOANS. The Borrower
shall not, and shall not permit any of its Subsidiaries to, lend money or credit
or make advances to, any Person, or directly or indirectly purchase or acquire
any stock, obligations or securities of, or any other interest in, or make any
capital contribution to any Person, except that the following shall be
permitted:
(a) accounts receivable owned by the Borrower and its
Subsidiaries, if created in the ordinary course of the business of the Borrower
and its Subsidiaries and payable or dischargeable in accordance with customary
trade terms;
(b) loans and advances to the Borrower by any of its Subsidiaries
and capital contributions by the Borrower or any Subsidiary to any Restricted
Subsidiary;
(c) investments existing as of the Effective Date and set forth
on Schedule 7.8 hereto;
(d) investments pursuant to any Permitted Organizational Changes;
PROVIDED that (x) no Permitted Organizational Change shall take place during the
continuance of a Default or an Event of Default, and (y) prior to the occurrence
of any Permitted Organizational Change, the Borrower shall deliver to the Agent
an officer's certificate in the form of Exhibit 7.4(a);
(e) Contingent Obligations permitted pursuant to Section 7.6;
(f) promissory notes received in connection with sales of assets
of the Borrower or its Subsidiaries sold pursuant to Section 7.5 (b) or (c),
PROVIDED that such promissory notes are secured with the assets so sold;
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(g)[Intentionally omitted];
(h) up to an aggregate investment of $5,000,000 in connection
with minority interests in foreign companies, joint ventures or partnerships on
terms acceptable to the Agent and the Required Lenders;
(i) [Intentionally omitted];
(j) loans to directors and employees of the Borrower or its
Subsidiaries in an aggregate amount outstanding at any time not to exceed
$500,000;
(k) the Borrower and its Subsidiaries may acquire and hold Cash
Equivalents;
(l) recourse on account of a Dealer Account Transaction to the
Borrower or any of its Subsidiaries, to the extent such recourse would be
permitted pursuant to Section 7.6(d);
(m) [Intentionally Omitted]; and
(n) the Recourse Obligations of the Borrower and its Subsidiaries
in connection with the Floor Plan Financing pursuant to the terms of a
Repurchase Agreement, provided that the Recourse Obligations shall not exceed an
aggregate amount of $8,000,000 for any annual period of July 1 through June 30,
of which an aggregate amount not to exceed $5,000,000 during each such annual
period may constitute obligations on the part of the Borrower and its
Subsidiaries to repurchase goods which were financed by the financial
institution providing such financing pursuant to the Floor Plan Financing and an
aggregate amount not to exceed $3,000,000 during each such annual period may
constitute indemnity payments by the Borrower and its Subsidiaries relating to
losses incurred by such financial institution resulting from such financial
institution's financing or refinancing of goods to dealers.
Section 7.9 TRANSACTIONS WITH AFFILIATES. Borrower shall not,
directly or indirectly, enter into any transaction or series of related
transactions with or for the benefit of any of its Affiliates, except on an
arm's-length basis and, except for sales of Inventory in the ordinary course of
business, (x)(i) in the case of
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any such transactions in which the aggregate rental value, remuneration or other
consideration (including the value of a loan) together with the aggregate rental
value, remuneration or other consideration (including the value of a loan) of
all such other transactions consummated in the year during which such
transaction is proposed to be consummated, exceeds $500,000, the board of
directors and the independent directors of the Borrower that are disinterested,
each have (by a majority vote) determined in good faith that the aggregate
rental value, remuneration or other consideration (including the value of any
loan) inuring to the benefit of such Affiliates from any such transaction is not
greater than that which would be charged to or extended by the Borrower or its
Subsidiary, as the case may be, on an arm's-length basis for similar properties,
assets, rights, goods or services by or to a Person not affiliated with the
Borrower or its Subsidiaries, as the case may be, and (ii) in the case of any
such transaction in which the aggregate rental value, remuneration or other
consideration (including the value of any loan), together with the aggregate
rental value, remuneration or other consideration (including the value of any
loan) of all such other transactions consummated in the year during which such
transaction proposed to be consummated, exceeds $5,000,000, the board of
directors of the Borrower and the independent directors of the Borrower that are
disinterested (each a majority vote), and a nationally recognized investment
banking firm, unaffiliated with the Borrower and the Affiliate which is party to
such transaction has determined that the aggregate rental price, remuneration or
other consideration (including the value of a loan) inuring to the benefit of
such Affiliate from any such transaction is not greater than that which would be
charged to or extended by the Borrower or its Subsidiary, as the case may be, on
an arm's-length basis for similar properties, assets, rights, goods or services
by or to a Person not affiliated with the Borrower or its Subsidiaries, as the
case may be, and that (y) in the case of all such transactions referred to in
clauses (x)(i) and (ii) are entered into in good faith. Any transaction
required to be approved by independent directors pursuant to this Section shall
be approved by at least one such independent director; PROVIDED that the
foregoing restrictions shall not apply to the payment of an annual fee to ▇▇▇▇▇▇
Management Corporation for rendering of management consulting and financial
services to the Borrower and its Subsidiaries
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in an aggregate amount not in excess of $2,250,000 and except for repurchases of
the Subordinated Notes from Affiliates at par or less than par, provided such
repurchases of Subordinated Notes would be permitted under Section 7.10 hereof.
Section 7.10 LIMITATION ON VOLUNTARY PAYMENTS AND MODIFICATIONS OF
CERTAIN DOCUMENTS. The Borrower shall not, and shall not permit any of its
Subsidiaries to, (a) make any sinking fund payment or voluntary or optional
payment or prepayment on or redemption or acquisition for value of (including,
without limitation, by way of depositing with the trustee with respect thereto
money or securities before due for the purpose of paying when due) or exchange
of any Subordinated Debt or Existing Note or make any payment in respect of the
Subordinated Debt or Existing Note (including, without limitation, payments in
respect of options to repurchase any Subordinated Debt or the Existing Note),
except for the Consent Fees not exceeding $1,500,000 in the aggregate in
connection with a consent solicitation that is otherwise permitted pursuant to
this Agreement, or (b) amend, modify or waive, or permit the amendment,
modification or waiver of, any provision of any Transaction Document (other than
the Loan Documents); provided that (i) the Borrower may repurchase up to
$15,000,000 aggregate principal amount of the Subordinated Notes at par or less
than par with the proceeds of the Term Loan during the Term Loan Borrowing
Period and (ii) the Borrower may repurchase an additional $10,000,000 aggregate
principal amount of the Subordinated Notes at par or less than par provided that
the Borrower's (A) Consolidated Cumulative Cash Flow, calculated on a basis of
four consecutive fiscal quarters (taken as one accounting period) for any two
consecutive fiscal quarters following the Effective Date is at least
$30,000,000, and (B) ratio of Consolidated Senior Debt to Consolidated
Cumulative Cash Flow would be less than 1.25 to 1.0 after giving effect to such
repurchase (as certified to the Agent by the Borrower's chief financial
officer).
Section 7.11 CHANGES IN BUSINESS. The Borrower shall not, and shall
not permit any of its Subsidiaries to, engage in any business other than the
manufacturing or selling of pleasure boats or in lines of business reasonably
related thereto.
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Section 7.12 CERTAIN RESTRICTIONS. The Borrower shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction, or enter into any agreement (other than the
Transaction Documents as in effect on the Effective Date), which restricts the
ability of the Borrower or any of its Subsidiaries to (a) enter into amendments,
modifications or waivers of the Loan Documents, (b) sell, transfer or otherwise
dispose of its assets, (c) create, incur, assume or suffer to exist any Lien
upon any of its property, (d) create, incur, assume, suffer to exist or
otherwise become liable with respect to any Indebtedness, or (e) pay any
Dividend, provided that Capital Leases or agreements governing purchase money
Indebtedness which contain restrictions of the types referred to in clauses (b)
or (c) with respect to the property covered thereby shall be permitted.
Section 7.13 LEASE PAYMENTS. The Borrower shall not, and shall not
permit any of its Subsidiaries to, incur, assume or suffer to exist, any
obligation for payments under Capital Leases and operating leases whether for
real or personal or mixed property (including, without limitation, rental
payments and payments of taxes thereunder), except that the Borrower and its
Subsidiaries may incur rental payment obligations not to exceed $5,000,000 in
the aggregate during each fiscal year of the Borrower.
Section 7.14 SALES AND LEASEBACKS. From and after the date hereof,
the Borrower shall not, and shall not permit any of its Subsidiaries to, become
liable, directly or indirectly, with respect to any lease (other than any such
lease entered into in connection with a sale of any real property permitted
hereunder, which lease is necessary or desirable to wind down the operations of
such property so sold), whether an operating lease or a Capital Lease, of any
property (whether real or personal or mixed) whether now owned or hereafter
acquired, (i) which the Borrower or such Subsidiary has sold or transferred or
is to sell or transfer to the purchaser thereof, or (ii) which the Borrower or
such Subsidiary intends to use for substantially the same purposes as any other
property which has been or is to be sold or transferred by the Borrower or such
Subsidiary to the purchaser thereof in connection with such Lease.
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Section 7.15 PLANS. The Borrower shall not, nor shall it permit any
member of its ERISA Controlled Group to, take any action which would increase
the aggregate present value of the Unfunded Benefit Liabilities under all Plans
to an amount in excess of $250,000.
Section 7.16 FISCAL YEAR; FISCAL QUARTER. The Borrower shall not,
and shall not permit any of its Subsidiaries to, change its fiscal year or any
of its fiscal quarters, provided that the Borrower may change its fiscal year to
a fiscal year ending June 30.
Section 7.17 DEALER ACCOUNTS. The Borrower shall not, nor shall it
permit any of its Subsidiaries to, have in the aggregate Dealer Accounts, or any
other Accounts with payment terms of greater than 12 months, in excess of
$5,000,000 outstanding at any time from the Effective Date through and including
the Final Maturity Date.
Section 7.18 INACTIVE SUBSIDIARIES. The Borrower shall not permit
any of the Designated Subsidiaries from owning or acquiring any property or
assets other than such property or assets owned as of the Effective Date,
provided that the Permitted Organizational Changes shall be permitted.
SECTION 8. EVENTS OF DEFAULT
Section 8.1 EVENTS OF DEFAULT. Each of the following events, acts,
occurrences or conditions shall constitute an Event of Default under this
Agreement, regardless of whether such event, act, occurrence or condition is
voluntary or involuntary or results from the operation of law or pursuant to or
as a result of compliance by any Person with any judgment, decree, order, rule
or regulation of any court or administrative or governmental body:
(a) FAILURE TO MAKE PAYMENTS. The Borrower shall (i) default in
the payment when due of any principal of the Loans or LC Disbursement or (ii)
default and such default shall continue unremedied for two or more Business
Days, in the payment when due of any interest on the Loans or in the payment
when due of any Fees or any other amounts owing hereunder.
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(b) BREACH OF REPRESENTATION OR WARRANTY. Any representation or
warranty made by any Loan Party herein or in any other Loan Document or in any
certificate or statement delivered pursuant hereto or thereto shall prove to be
false or misleading on the date as of which made or deemed made.
(c) BREACH OF COVENANTS.
(i) The Borrower shall fail to perform or observe any
agreement, covenant or obligation arising under Sections 6.1(g), 6.5,
6.13 or 7.1 through 7.18, inclusive.
(ii) The Borrower shall fail to perform or observe any
agreement, covenant or obligation arising under this Agreement (except
those described in subsections (a), (b) and (c)(i) above), and such
failure shall continue for 30 days.
(iii) Any Loan Party shall fail to perform or observe
any agreement, covenant or obligation arising under any provision of
the Loan Documents other than this Agreement, which failure shall
continue after the end of the applicable grace period, if any,
provided therein.
(d) DEFAULT UNDER OTHER AGREEMENTS. The Borrower or any of its
Subsidiaries shall default in the payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) of any amount
owing in respect of any Indebtedness (other than the Obligations) in the
aggregate principal amount in excess of $500,000; or the Borrower or any of its
Subsidiaries shall default in the performance or observance of any obligation or
condition with respect to any such Indebtedness or any other event shall occur
or condition exist, if the effect of such default, event or condition is to
accelerate the maturity of any such Indebtedness or to permit (without regard to
any required notice or lapse of time) the holder or holders thereof, or any
trustee or agent for such holders, to accelerate the maturity of any such
Indebtedness, or any such Indebtedness shall become or be declared to be due and
payable prior to its stated
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maturity other than as a result of a regularly scheduled payment.
(e) BANKRUPTCY, ETC. (i) Any Loan Party shall commence a
voluntary case concerning itself under the Bankruptcy Code; or (ii) an
involuntary case is commenced against any Loan Party and the petition is not
controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case; or (iii) a custodian (as defined in the Bankruptcy
Code) is appointed for, or takes charge of, all or substantially all of the
property of any Loan Party or any Loan Party commences any other proceedings
under any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to any Loan Party or there is
commenced against any Loan Party any such proceeding which remains undismissed
for a period of 60 days; or (iv) any order of relief or other order approving
any such case or proceeding is entered; or (v) any Loan Party is adjudicated
insolvent or bankrupt; or (vi) any Loan Party suffers any appointment of any
custodian or the like for it or any substantial part of its property to continue
undischarged or unstayed for a period of 60 days; or (vii) any Loan Party makes
a general assignment for the benefit of creditors; or (viii) any Loan Party
shall fail to pay, or shall state that it is unable to pay, or shall be unable
to pay, its debts generally as they become due; or (ix) any Loan Party shall
call a meeting of its creditors with a view to arranging a composition or
adjustment of its debts; or (x) any Loan Party shall by any act or failure to
act consent to, approve of or acquiesce in any of the foregoing; or (xi) any
corporate action is taken by any Loan Party for the purpose of effecting any of
the foregoing.
(f) SUBORDINATED DEBT FINANCING DOCUMENTS. The Borrower or any
of its Subsidiaries (i) does not pay when due (x) whether at maturity, upon
redemption or otherwise, any payment of principal, or premium, due under any
Subordinated Debt Financing Document or (y) any interest due under any
Subordinated Debt Financing Document, and such interest remain unpaid for a
period of thirty (30) days, or (ii) denies or disaffirms any of its obligations
under any Subordinated Debt Financing Document.
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(g) RESTRICTED SUBSIDIARIES. Any Person becomes a "Restricted
Subsidiary", as such term is defined in the Subordinated Debt Financing
Documents, unless such Person is also a Guarantor.
(h) ERISA. (i) Any Termination Event shall occur, or (ii) any
ERISA Plan shall incur an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived or (iii)
the Borrower or a member of its ERISA Controlled Group shall have engaged in a
transaction which is prohibited under Section 4975 of the Code or Section 406 of
ERISA which could reasonably be expected to result in the imposition of
liability in excess of $2,000,000 on the Borrower or any member of its ERISA
Controlled Group, or (iv) the Borrower or any member of its ERISA Controlled
Group shall fail to pay when due an amount which it shall have become liable to
pay to the PBGC, any Plan or a trust established under Title IV of ERISA, or (v)
a condition shall exist by reason of which the PBGC would be entitled to obtain
a decree adjudicating that an ERISA Plan must be terminated or have a trustee
appointed to administer any ERISA Plan, or (vi) the Borrower or a member of its
ERISA Controlled Group suffers a partial or complete withdrawal from a
Multiemployer Plan or is in "default" (as defined in Section 4219(c)(5) of
ERISA) with respect to payments to a Multiemployer Plan, or (vii) a proceeding
shall be instituted against the Borrower or any member of its ERISA Controlled
Group to enforce Section 515 of ERISA, or (viii) any other event or condition
shall occur or exist with respect to any Plan which could subject the Borrower
or any member of its ERISA Controlled Group to any tax, penalty or other
liability in excess of $2,000,000.
(i) SECURITY DOCUMENTS. Any of the Security Documents shall for
any reason cease to be in full force and effect, or shall cease to give the
Agent the Liens, rights, powers and privileges purported to be created thereby
including, without limitation, a perfected first priority security interest in,
and Lien on, all of the Collateral in accordance with the terms thereof other
than as a result of a release of Collateral by the Agent pursuant to the terms
of this Agreement and the Security Documents.
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(j) GUARANTY. Any Guaranty or any provision thereof shall cease
to be in full force and effect, or the Guarantor or any Person acting by or on
behalf of the Guarantor shall deny or disaffirm all or any portion of the
Guarantor's obligations under such Guaranty.
(k) CHANGE OF CONTROL. (i) ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (or, upon his
death, his estate) and his Affiliates shall cease to beneficially own and
control at least 90% of the number of shares of any class of capital stock of
the Borrower entitled (without regard to the occurrence of any contingency) to
vote for the election of members of the board of directors of the Borrower owned
by ▇▇. ▇▇▇▇▇▇ (or, upon his death, his estate) and his Affiliates on the
Original Effective Date, (ii) ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (or, upon his death, his
estate) and his Affiliates, ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇ (or, upon his death, his estate)
and his Affiliates and RDV (AJL) Holdings, Inc. and its Affiliates shall in the
aggregate cease to beneficially own and control at least 50.1%, of the issued
and outstanding shares of each class of capital stock of the Borrower entitled
(without regard to the occurrence of any contingency) to vote for the election
of members of the board of directors of the Borrower, or (iii) a "Change of
Control" as defined in the Subordinated Debt Financing Documents shall occur.
(l) JUDGMENTS. One or more judgments or decrees in an aggregate
amount (i) in excess of $250,000 shall be entered by a court or courts of
competent jurisdiction against the Loan Parties (other than any judgment as to
which, and only to the extent, a reputable insurance company has acknowledged
coverage of such claim in writing) and (x) any such judgments or decrees shall
not be stayed, discharged, paid, bonded or vacated within 30 days or (y)
enforcement proceedings shall be commenced by any creditor on any such judgments
or decrees or (ii) in excess of $5,000,000 and such judgment or judgments shall
not be stayed, discharged or bonded within 60 days.
(m) ENVIRONMENTAL MATTERS. (i) Any Environmental Claim shall have
been asserted against any Loan Party which, if determined adversely, could have
a Material Adverse Effect, (ii) any release, emission, discharge or disposal of
any Material of Environmental Concern shall have occurred, and such event could
form the basis of an Environmental Claim against any Loan
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Party which, if determined adversely, could have a Material Adverse Effect, or
(iii) any Loan Party shall have failed to obtain any Environmental Approval
necessary for the management, use, control, ownership, or operation of its
business, property or assets or any such Environmental Approval shall be
revoked, terminated, or otherwise cease to be in full force and effect, in each
case, if the existence of such condition could have a Material Adverse Effect.
(n) USE OF PROCEEDS. The Borrower shall use the proceeds of any
Loan for a purpose other than that set forth in Section 2.22.
(o) LICENSES AND PERMITS. Any Loan Party shall lose, or shall
fail to obtain or maintain, any necessary license or permit, which loss or
failure to maintain would, in each case, have a Material Adverse Effect.
(p) NEGATIVE PLEDGE. Any Person controlling the Borrower shall
enter into any agreement (other than the Transaction Documents as in effect on
the Effective Date) which restricts the ability of the Borrower or any of its
Subsidiaries to (i) enter into amendments, modifications or waivers of the Loan
Documents, (ii) sell, transfer or otherwise dispose of its assets, (iii) create,
incur, assume or suffer to exist any Lien upon any of its property, (iv) create,
incur, assume, suffer to exist or otherwise become liable with respect to any
Indebtedness, or (v) except with respect to the Borrower, pay any Dividend,
provided that Capital Leases or agreements governing purchase money Indebtedness
which contain restrictions of the types referred to in clauses (ii) or (iii)
with respect to the property covered thereby shall be permitted.
(q) MATERIAL ADVERSE CHANGE. The occurrence of any material
adverse change in the financial condition, business, properties, prospects or
operations of the Borrower and its Subsidiaries on a consolidated basis.
Section 8.2 RIGHTS AND REMEDIES. Upon the occurrence of any Event of
Default described in Section 8.1(e), the Commitments shall automatically and
immediately terminate and the unpaid principal amount of and
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any and all accrued interest on the Revolving Loans, the Term Loan and any and
all accrued Fees and other Obligations shall automatically become immediately
due and payable, with all additional interest from time to time accrued thereon
and without presentation, demand, or protest or other requirements of any kind
(including, without limitation, valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and notice of
acceleration), all of which are hereby expressly waived by the Borrower, and the
obligation of each Lender to make any Revolving Loan, or the Term Loan or issue
any Standby Letter of Credit hereunder shall thereupon terminate; and upon the
occurrence and during the continuance of any other Event of Default, the Agent
shall at the request, or may with the consent, of the Required Lenders, by
written notice to the Borrower, (i) declare that the Commitments are terminated,
whereupon the Commitments and the obligation of each Lender to make any
Revolving Loan, or the Term Loan or issue any Standby Letter of Credit hereunder
shall immediately terminate, (ii) declare the unpaid principal amount of and any
and all accrued and unpaid interest on the Revolving Loans, and the Term Loan
and any and all accrued Fees and other Obligations to be, and the same shall
thereupon be, immediately due and payable with all additional interest from time
to time accrued thereon and without presentation, demand, or protest or other
requirements of any kind (including, without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or accelerate
and notice of acceleration), all of which are hereby expressly waived by the
Borrower, (iii) require cash collateral as contemplated by Section 3.5 hereof
and (iv) exercise any remedies available under any Loan Document or otherwise.
SECTION 9. THE AGENT
Section 9.1 APPOINTMENT. Each Lender hereby irrevocably designates
and appoints The Bank of New York as the Agent of such Lender under this
Agreement and each other Loan Document, and each such Lender irrevocably
authorizes The Bank of New York as the Agent for such Lender, to take such
action on its behalf under the provisions of this Agreement and each other Loan
Document and to exercise such powers and perform such duties as are expressly
delegated to the Agent by the terms of this Agreement and each other Loan
Document, together with
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such other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Agreement, the Agent shall not have
any duties or responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities on the part of the Agent
shall be read into this Agreement or otherwise exist against the Agent. The
provisions of this Section 9 are solely for the benefit of the Agent and the
Lenders and no Loan Party shall have any rights as a third party beneficiary or
otherwise under any of the provisions hereof. In performing its functions and
duties hereunder and under the other Loan Documents, the Agent shall act solely
as the agent of the Lenders and does not assume nor shall be deemed to have
assumed any obligation or relationship of trust or agency with or for any Loan
Party or any of their respective successors and assigns.
Section 9.2 DELEGATION OF DUTIES. The Agent may execute any of its
duties under this Agreement or the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
Section 9.3 EXCULPATORY PROVISIONS. The Agent shall not be (i)
liable for any action lawfully taken or omitted to be taken by it or any Person
described in Section 9.2 under or in connection with this Agreement or any other
Loan Document (except for its or such Person's own gross negligence or willful
misconduct), or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by any Loan Party
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
under or in connection with, this Agreement or any other Loan Document or for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Agreement, or any other Loan Document or for any failure of any Loan
Party to perform its obligations hereunder or thereunder. Without limiting the
duties and responsibilities of the Agent set forth in the Loan Documents, the
Agent shall not be under any obligation to
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any Lender to ascertain or to inquire as to the observance or performance of any
of the agreements of any Loan Party contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of any Loan Party. This Section is intended solely to govern the
relationship between the Agent, on the one hand, and the Lenders, on the other.
Section 9.4 RELIANCE BY AGENT. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any Revolving Note, any Term Note,
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to any Loan
Party), independent accountants and other experts selected by the Agent. The
Agent may deem and treat the payee of any Revolving Note or any Term Note as the
owner thereof for all purposes unless the Agent shall have received an executed
Transfer Supplement in respect thereof. The Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
The Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the other Loan Documents in accordance with a
request of the Required Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Revolving Notes and all future holders of the Term Notes.
Section 9.5 NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default unless
the Agent has received notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default." In the event that the Agent receives such a
notice, the Agent shall promptly give notice
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thereof to the Lenders. The Agent shall take such action with respect to such
Default or Event of Default as shall be directed by the Required Lenders;
PROVIDED that unless and until the Agent shall have received such directions,
the Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as the
Agent shall deem advisable and in the best interests of the Lenders.
Section 9.6 NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender
expressly acknowledges that neither the Agent, nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates has made any
representations or warranties to it and that no act by the Agent hereafter
taken, including, without limitation, any review of the affairs of any Loan
Party, shall be deemed to constitute any representation or warranty by the
Agent. Each Lender represents and warrants to the Agent that it has,
independently and without reliance upon the Agent or any other Lender and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
prospects, financial and other conditions and creditworthiness of the Loan
Parties and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents 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 analysis, appraisals and decisions in taking or not taking action
under this Agreement, and to make such investigation as it deems necessary to
inform itself as to the business, operations, property, prospects, financial and
other condition and creditworthiness of the Loan Parties. Except for notices,
reports and other documents expressly required under the Loan Documents to be
furnished to the Lenders by the Agent, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, prospects, financial and other
condition or creditworthiness of the Loan Parties which may come into the
possession of the Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
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Section 9.7 INDEMNIFICATION. The Lenders agree to indemnify the
Agent, the Arranger and their respective officers, directors, employees,
representatives and agents (to the extent not reimbursed by the Loan Parties and
without limiting the obligation of the Loan Parties to do so), ratably according
to their Pro Rata Shares, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever (including, without limitation,
the fees and disbursements of counsel for the Agent, the Arranger or such Person
in connection with any investigative, administrative or judicial proceeding
commenced or threatened, whether or not the Agent, the Arranger or such Person
shall be designated a party thereto) that may at any time (including, without
limitation, at any time following the payment of the Obligations) be imposed on,
incurred by or asserted against the Agent, the Arranger or such Person as a
result of, or arising out of, or in any way related to or by reason of, the
execution, delivery or performance of any Loan Document or any other Transaction
Document (but excluding any such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
solely from the gross negligence or willful misconduct of the Agent, the
Arranger or such Person as finally determined by a court of competent
jurisdiction and excluding the actions of the Agent when acting solely in its
capacity as a Lender).
Section 9.8 AGENT IN ITS INDIVIDUAL CAPACITY. The Agent and its
affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Loan Parties as though the Agent were not the Agent
hereunder. With respect to Loans made or renewed by it and any Revolving Note
or Term Note issued to it, the Agent shall have the same rights and powers under
this Agreement as any Lender and may exercise the same as though it were not the
Agent, and the terms "Lender" and "Lenders" shall include the Agent in its
individual capacity.
Section 9.9 SUCCESSOR AGENT. The Agent may resign as Agent upon 30
days' notice to the Borrower and the Lenders. If the Agent shall resign as
Agent under this Agreement, then the Required Lenders during such 30-day period
shall appoint from among the Lenders a succes
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sor agent, whereupon such successor agent, upon its acceptance, shall succeed to
the rights, powers and duties of the Agent and the term "Agent" shall mean such
successor agent, effective upon its appointment, and the former Agent's rights,
powers and duties as Agent shall be terminated, without any other or further act
or deed on the part of such former Agent or any of the parties to this Agreement
or any holders of the Revolving Notes or any holders of the Term Notes. After
any retiring Agent's resignation hereunder as Agent, the provisions of this
Section 9 and Section 10.1 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement.
SECTION 10. MISCELLANEOUS
Section 10.1 PAYMENT OF EXPENSES, INDEMNITY, ETC. The Borrower
shall:
(a) whether or not the transactions hereby contemplated are
consummated, pay all reasonable out-of-pocket costs and expenses of the Agent in
connection with the negotiation, preparation, execution and delivery of the Loan
Documents and the documents and instruments referred to therein, the creation,
perfection or protection of the Agent's Liens in the Collateral (including,
without limitation, fees and expenses for title and lien searches and filing and
recording fees), and any amendment, waiver or consent relating to any of the
Loan Documents (including, without limitation, as to, each of the foregoing, the
reasonable fees and disbursements of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP,
special counsel to the Agent and any other attorneys retained by the Agent) and
of the Agent and each Lender in connection with the preservation of rights
under, and enforcement of, the Loan Documents and the documents and instruments
referred to therein or in connection with any restructuring or rescheduling of
the Obligations (including, without limitation, the reasonable fees and
disbursements of counsel for the Agent and for each of the Lenders);
(b) pay the fees and disbursements of any independent accountant
or consultant retained by the Agent to audit the composition of the Accounts and
Inventory which are part of the Borrowing Base and to prepare
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and deliver to the Agent such reports and information as the Agent requests with
respect thereto;
(c) pay, and hold the Agent and each of the Lenders harmless from
and against, any and all present and future stamp, excise and other similar
taxes with respect to the foregoing matters and hold the Agent and each Lender
harmless from and against any and all liabilities with respect to or resulting
from any delay or omission (other than to the extent attributable to such
Lender) to pay such taxes; and
(d) indemnify the Agent, the Arranger, the Issuing Bank and each
Lender, and their respective officers, directors, employees, representatives and
agents (each an "INDEMNITEE") from, and hold each of them harmless against, any
and all losses, liabilities, claims, damages, expenses, obligations, penalties,
actions, judgments, suits, costs or disbursements of any kind or nature
whatsoever (including, without limitation, the fees and disbursements of counsel
for such Indemnitee in connection with any investigative, administrative or
judicial proceeding commenced or threatened, whether or not such Indemnitee
shall be designated a party thereto, but excluding any tax or an increased tax
on the net income of such Lender) that may at any time (including, without
limitation, at any time following the payment of the Obligations) be imposed on,
asserted against or incurred by any Indemnitee as a result of, or arising out
of, or in any way related to or by reason of, (i) any of the Transactions or the
execution, delivery or performance of any Loan Document or any other Transaction
Document, (ii) any violation by any Loan Party of any applicable Environmental
Law, (iii) any Environmental Claim arising out of the management, use, control,
ownership or operation of property or assets by any of the Loan Parties,
including, without limitation, all on-site and off-site activities involving
Materials of Environmental Concern, (iv) the breach of any environmental
representation or warranty set forth in Section 5.18, (v) the grant to the
Agent, the Collateral Agent and the Lenders of any Lien in any property or
assets of any of the Loan Parties or any stock or other equity interest in any
of the Loan Parties, and (vi) the exercise by the Agent and the Lenders of their
rights and remedies (including, without limitation, foreclosure) under any
agreements creating any such Lien (but excluding, in each
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case, as to any Indemnitee, any such losses, liabilities, claims, damages,
expenses, obligations, penalties, actions, judgments, suits, costs or
disbursements incurred solely by reason of the gross negligence or willful
misconduct of such Indemnitee as finally determined by a court of competent
jurisdiction). The Borrower's obligations under this Section shall survive the
termination of this Agreement and the payment of the Obligations.
Section 10.2 RIGHT OF SETOFF. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and during the continuance of
any Event of Default, each Lender is hereby authorized at any time or from time
to time, without presentment, demand, protest or other notice of any kind to any
Loan Party or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and apply any and all deposits (general or
special, time or demand, provisional or final) and any other indebtedness at any
time held or owing by such Lender (including, without limitation, by branches
and agencies of such Lender wherever located) to or for the credit or the
account of any Loan Party against and on account of the Obligations of the Loan
Parties to such Lender under this Agreement or under any of the other Loan
Documents, including, without limitation, all interests in Obligations purchased
by such Lender pursuant to Section 10.7, and all other claims of any nature or
description arising out of or connected with this Agreement or any other Loan
Document, irrespective of whether or not such Lender shall have made any demand
hereunder and although said Obligations, liabilities or claims, or any of them,
shall be contingent or unmatured.
Section 10.3 NOTICES. Except as otherwise expressly provided herein,
all notices, requests and demands to or upon the respective parties hereto to be
effective shall be in writing (including by telecopy, telex, or cable
communication), and shall be deemed to have been duly given or made when
delivered by hand, or five days after being deposited in the United States mail,
postage prepaid, or, in the case of telex notice, when sent, answerback
received, or, in the case of telecopy notice, when sent, or, in the case of a
nationally recognized overnight courier service, one Business Day after delivery
to such courier service, addressed, in
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the case of each party hereto, at its address specified opposite its signature
below or on the appropriate Transfer Supplement, or to such other address as may
be designated by any party in a written notice to the other parties hereto,
provided that notices and communications to the Agent shall not be effective
until received by the Agent.
Section 10.4 SUCCESSORS AND ASSIGNS; PARTICIPATION; ASSIGNMENTS.
(a) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the Borrower, the Lenders, the Agent, all future
holders of the Revolving Notes and their respective successors and assigns, all
future holders of the Term Notes and their respective successors and assigns,
except that the Borrower may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of each
Lender. No Lender may participate, assign or sell any of its Credit Exposure
(as defined in clause (c) below) except as required by operation of law, in
connection with the merger, consolidation or dissolution of any Lender or as
provided in this Section 10.4.
(b) PARTICIPATION. Any Lender may at any time sell to one or
more Persons (each a "PARTICIPANT") participating interests in any Loan owing to
such Lender, any Standby Letter of Credit issued by the Issuing Bank, any
Revolving Note held by such Lender, any Term Notes held by such Lender, any
Commitment of such Lender or any other interest of such Lender hereunder.
Notwithstanding any such sale by a Lender of participating interests to a
Participant, such Lender's rights and obligations under this Agreement shall
remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Revolving
Note or Term Note for all purposes under this Agreement (except as expressly
provided below), and the Borrower and the Agent shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. The Borrower agrees that if any Obligations
are due and unpaid, or shall have been declared or shall have become due and
payable upon the occurrence and during the continuance of an Event of Default,
each Participant shall be deemed to have the right of setoff in respect of its
participating
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interest in amounts owing under this Agreement and any Revolving Note or Term
Note to the same extent as if the amount of its participating interest were
owing directly to it as a Lender under this Agreement or any Revolving Note or
Term Note, provided that such right of setoff shall be subject to the
obligations of such Participant to share with the Lenders, and the Lenders agree
to share with such Participant, as provided in Section 10.7. The Borrower also
agrees that each Participant shall be entitled to the benefits of Sections 2.17,
2.18 and 2.19; PROVIDED that the Borrower shall not be required to pay any
amounts pursuant to such Sections in excess of the amount the Borrower would
have been obligated to pay but for such sale of a participating interest to such
Participant. Each Lender agrees that any agreement between such Lender and any
such Participant in respect of such participating interest shall not restrict
such Lender's right to agree to any amendment, supplement, waiver or
modification to this Agreement or any other Loan Document, other than
amendments, supplements, modifications and waivers requiring the written consent
of all of the Lenders pursuant to Section 10.5.
(c) ASSIGNMENTS. Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time assign to any Lender
or any affiliate thereof or, with the consent of the Agent, to any other Person
(each a "PURCHASING LENDER") all or any part of any Revolving Loan owing to such
Lender, any part of the Term Loan owing to such Lender, any Standby Letter of
Credit issued by the Issuing Bank, the Revolving Note held by such Lender, the
Term Note held by such Lender, any Commitment of such Lender or any other
interest of such Lender hereunder (in respect of such Lender, its "CREDIT
EXPOSURE") pursuant to a supplement to this Agreement, substantially in the form
of Exhibit 10.4(c) hereto (a "TRANSFER SUPPLEMENT"), executed by such Purchasing
Lender, such transferor Lender and the Agent; PROVIDED, that any assignment to
any Purchasing Lender must be in a minimum amount of $5,000,000 and any such
partial assignment shall be an assignment of an identical percentage of the
transferor Lender's Revolving Loans, Term Loans and Commitments. Upon (i) such
execution of such Transfer Supplement, (ii) delivery of an executed copy thereof
to the Borrower and the Agent, (iii) payment by such Purchasing Lender to such
transferor Lender of an amount equal to the purchase price agreed between such
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transferor Lender and such Purchasing Lender and (iv) payment to the Agent of a
processing fee of $3,500, such transferor Lender shall be released from its
obligations hereunder to the extent of such assignment and such Purchasing
Lender shall for all purposes be a Lender party to this Agreement and shall have
all the rights and obligations of a Lender under this Agreement to the same
extent as if it were an original party hereto, and no further consent or action
by the Borrower, the Lenders or the Agent shall be required. Such Transfer
Supplement shall be deemed to amend this Agreement to the extent, and only to
the extent, necessary to reflect the addition of such Purchasing Lender as a
Lender and the resulting adjustment of the Commitments, if any, arising from the
purchase by such Purchasing Lender of all or a portion of the Credit Exposure of
such transferor Lender. Promptly after the consummation of any transfer to a
Purchasing Lender pursuant hereto, the transferor Lender, the Agent and the
Borrower shall make appropriate arrangements so that a replacement Revolving
Note is issued to such transferor Lender and a new Revolving Note is issued to
such Purchasing Lender, in each case in principal amounts reflecting such
transfer.
(d) DISCLOSURE OF INFORMATION. The Borrower authorizes each
Lender to disclose, on a confidential basis, to any Participant or Purchasing
Lender (each, a "TRANSFEREE") and any prospective Transferee any and all
financial and other information in such Lender's possession concerning the
Borrower which has been delivered to such Lender by the Borrower pursuant to
this Agreement or which has been delivered to such Lender by the Borrower in
connection with such Lender's credit evaluation of the Borrower prior to
entering into this Agreement.
(e) The provisions of this Section 10.4 shall not apply to the
assignment and pledge for collateral purposes, of any Lender's rights hereunder
or under any Revolving Note or under any Term Note to any Federal Reserve Bank
pursuant to Regulation A of the Board of Governors of the Federal Reserve System
and any Operating Circular issued by such Federal Reserve Bank; PROVIDED that
such assignment and pledge shall not relieve such Lender of any of its
obligations hereunder.
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Section 10.5 AMENDMENTS AND WAIVERS. Neither this Agreement, any
Revolving Note, any Term Note, any other Loan Document to which the Borrower is
a party nor any terms hereof or thereof may be amended, supplemented, modified
or waived except in accordance with the provisions of this Section. The
Required Lenders and the Borrower may, from time to time, enter into written
amendments, supplements, modifications or waivers for the purpose of adding,
deleting, changing or waiving any provisions to this Agreement, the Revolving
Notes, the Term Notes, or the other Loan Documents to which the Borrower is a
party, PROVIDED, that no such amendment, supplement, modification or waiver
shall (a) extend either the Final Maturity Date or any Term Loan Maturity Date
or any installment or required prepayment of any Obligations or reduce the rate
or extend the time of payment of interest on any Obligations, or reduce the
principal amount of any Obligations or reduce any fee payable to all the Lenders
hereunder, or release all or substantially all of the Collateral (except as
expressly contemplated by the Loan Documents) or foreclose or otherwise enforce
any remedies with respect to any real property Collateral or change the amount
of any Commitment of any Lender, or amend, modify or waive any material
condition precedent to the making of any Revolving Loan or Term Loan or the
issuing of any Standby Letter of Credit, or amend, modify or waive any term of
subordination of the Subordinated Debt Financing Documents, or release any
Guarantor or amend, modify or waive any material term of any Guaranty, or modify
the manner in which the Lenders share in any payment received by the Agent or
any Lender with respect to any Obligation, or modify the several nature of the
Commitments and the other obligations of the Agent and the Lenders pursuant to
the Loan Documents, or amend, modify or waive any provision of this Section 10.5
or the definition of Required Lenders, or consent to or permit the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement or any other Loan Document, in each case without the written consent
of all the Lenders, or (b) amend, modify or waive any provision of Section 9 or
any other provision of any Loan Document if the effect thereof is to affect the
rights or duties of the Agent, without the written consent of the then Agent.
Any such amendment, supplement, modification or waiver shall apply to each of
the Lenders equally and shall be binding upon the Borrower, the Lenders, the
Agent, all future holders
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of the Revolving Notes and all future holders of the Term Notes. In the case of
any waiver, the Borrower, the Lenders and the Agent shall be restored to their
former position and rights hereunder and under the outstanding Revolving Notes
and Term Notes, and any Default or Event of Default waived shall be deemed to be
cured and not continuing, but no such waiver shall extend to any subsequent or
other Default or Event of Default, or impair any right consequent thereon.
Section 10.6 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on
the part of the Agent or any Lender or any holder of a Revolving Note or any
holder of a Term Note in exercising any right, power or privilege hereunder or
under any other Loan Document and no course of dealing between any Loan Party
and the Agent or any Lender or the holder of any Revolving Note or the holder of
any Term Note shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Loan
Document preclude any other or further exercise thereof of the exercise of any
other right, power or privilege hereunder or thereunder. The rights and
remedies herein expressly provided are cumulative and not exclusive of any
rights or remedies which the Agent or any Lender or the holder of any Revolving
Note or the holder of any Term Note would otherwise have. No notice to or
demand on any Loan Party in any case shall entitle any Loan Party to any other
or further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Agent, the Lenders or the holder of any Revolving
Note or the holder of the Term Note to any other or further action in any
circumstances without notice or demand.
Section 10.7 SHARING OF PAYMENTS. Each of the Lenders agrees that if
it should receive any amount hereunder (whether by voluntary payment, by
realization upon security, by the exercise of the right of setoff or banker's
lien, by counterclaim or cross action, by the enforcement of any right under the
Loan Documents, or otherwise) which is applicable to the payment of any
obligations, of a sum which with respect to the related sum or sums received by
other Lenders is in a greater proportion than the total of such Obligation then
owed and due to such Lender bears to the total of such Obligation then owed and
due to all of the Lenders immediately prior to such receipt, then such Lender
receiving such
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excess payment shall purchase for cash without recourse or warranty from the
other Lenders an interest in such Obligations owing to such Lenders in such
amount as shall result in a proportional participation by all of the Lenders in
such amount; provided that if all or any portion of such excess amount is
thereafter recovered from such Lender, such purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but without interest.
Section 10.8 GOVERNING LAW; SUBMISSION TO JURISDICTION. (a) THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE
PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW).
(b) Any legal action or proceeding with respect to this Agreement
or any other Loan Document and any action for enforcement of any judgment in
respect thereof may be brought in the courts of the State of New York or of the
United States of America for the Southern District of New York, and, by
execution and delivery of this Agreement, the Borrower hereby accepts for itself
and in respect of its property, generally and unconditionally, the non-exclusive
jurisdiction of the aforesaid courts and appellate courts from any thereof. The
Borrower irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to the Borrower at its
address set forth opposite its signature below. The Borrower hereby irrevocably
waives any objection which it may now or hereafter have to the laying of venue
of any of the aforesaid actions or proceedings arising out of or in connection
with this Agreement or any other Loan Document brought in the courts referred to
above and hereby further irrevocably waives and agrees not to plead or claim in
any such court that any such action or proceeding brought in any such court has
been brought in an inconvenient forum. Nothing herein shall affect the right of
the Agent, any Lender or any holder of a Revolving Note or any holder of a Term
Note to serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against the Borrower in any other jurisdiction.
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Section 10.9 COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.
Section 10.10 EFFECTIVENESS. This Agreement shall become effective
on the date on which all of the parties hereto shall have signed a counterpart
hereof and shall have delivered the same to the Agent which delivery, in the
case of the Lenders, may be given to the Agent by telecopy (with the originals
delivered promptly to the Agent via overnight courier service) and the
conditions precedent set forth in Section 4.1 have been satisfied.
Section 10.11 HEADINGS DESCRIPTIVE. The headings of the several
Sections and subsections of this Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Agreement.
Section 10.12 MARSHALLING; RECAPTURE. Neither the Agent nor any
Lender shall be under any obligation to ▇▇▇▇▇▇▇▇ any assets in favor of any Loan
Party or any other party or against or in payment of any or all of the
Obligations. To the extent any Lender receives any payment by or on behalf of
any Loan Party, which payment or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
such Loan Party or its estate, trustee, receiver, custodian or any other party
under any bankruptcy law, state or Federal law, common law or equitable cause,
then to the extent of such payment or repayment, the obligation or part thereof
which has been paid, reduced or satisfied by the amount so repaid shall be
reinstated by the amount so repaid and shall be included within the liabilities
of such Loan Party to such Lender as of the date such initial payment, reduction
or satisfaction occurred.
Section 10.13 SEVERABILITY. In case any provision in or obligation
under this Agreement or the Revolving Notes or the Term Note or the other Loan
Documents shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability
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of the remaining provisions or obligations, or of such provision or obligation
in any other jurisdiction, shall not in any way be affected or impaired thereby.
Section 10.14 SURVIVAL. All indemnities set forth herein including,
without limitation, in Sections 2.17, 2.18, 2.19, 2.20, 9.7 and 10.1 shall
survive the execution and delivery of this Agreement and the Revolving Notes and
the Term Note and the making and repayment of the Loans hereunder.
Section 10.15 DOMICILE OF LOANS. Each Lender may transfer and carry
its Loans at, to or for the account of any branch office, subsidiary or
affiliate of such Lender.
Section 10.16 LIMITATION OF LIABILITY. No claim may be made by any
Loan Party or any other Person against the Agent or any Lender or the
Affiliates, directors, officers, employees, attorneys or agents of any of them
for any special, indirect, consequential or punitive damages in respect of any
claim for breach of contract or any other theory of liability arising out of or
related to the transactions contemplated by this Agreement or any other
Transactions, or any act, omission or event occurring in connection therewith;
and each Loan Party hereby waives, releases and agrees not to ▇▇▇ upon any claim
for any such damages, whether or not accrued and whether or not known or
suspected to exist in its favor.
Section 10.17 CALCULATIONS; COMPUTATIONS. The financial statements
to be furnished to the Agent and the Lenders pursuant hereto shall be made and
prepared in accordance with GAAP consistently applied throughout the periods
involved and consistent with GAAP as used in the preparation of the financial
statements referred to in Section 5.5, and, except as otherwise specifically
provided herein, all computations determining compliance with Section 7.1 hereof
shall utilize GAAP.
Section 10.18 WAIVER OF TRIAL BY JURY. EACH OF THE BORROWER, THE
AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY MATTER ARISING HEREUNDER OR
THEREUNDER.
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
GENMAR HOLDINGS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇
-----------------------------
E. Vice President & CFO
Genmar Holdings, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
THE BANK OF NEW YORK,
as Agent, Issuing Bank
and a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
Vice President
The Bank of New York
One Wall Street
U.S. Commercial Banking
Central Division
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
BNY CAPITAL MARKETS, INC.,
as Arranger
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Managing Director
BNY Capital Markets Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
FIRST BANK NATIONAL
ASSOCIATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Vice President
First Bank Place
8th Floor
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
BANK ONE, WISCONSIN (formerly Bank
One, Milwaukee, NA)
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Vice President
Bank One, Wisconsin
Main ▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇