Exhibit 10.55
FINANCING AGREEMENT
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TRANSTECHNOLOGY CORPORATION,
NORCO, INC.
AND
TCR CORPORATION,
AS BORROWERS,
THE LENDERS FROM TIME TO TIME PARTY THERETO,
AND
ABLECO FINANCE LLC,
AS AGENT
DATED: AS OF AUGUST 7, 2002
TABLE OF CONTENTS
Page
SECTION 1. Definitions.......................................................1
SECTION 2. Conditions Precedent.............................................19
SECTION 3. Accounts; Inventory..............................................25
SECTION 4. Term Loan; Mandatory Prepayments.................................27
SECTION 5. [INTENTIONALLY OMITTED]..........................................30
SECTION 6. Collateral.......................................................30
SECTION 7. Representations, Warranties and Covenants........................35
SECTION 8. Interest, Fees and Expenses; Joint and Several Liability.........53
SECTION 9. Powers...........................................................62
SECTION 10. Events of Default and Remedies..................................63
SECTION 11. Termination.....................................................67
SECTION 12. Agent...........................................................67
SECTION 13. Miscellaneous...................................................72
EXHIBITS
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Exhibit A - Assignment for Security (Trademarks)
Schedule 1A Trademarks and Trademark Applications
Exhibit B - Assignment for Security (Patents)
Schedule 1A Patents and Patent Applications
Exhibit C - Assignment for Security (Copyrights)
Schedule 1A Copyrights and Copyrights Applications
SCHEDULES
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Schedule 1A Collateral Information
Schedule 1B Filing Offices
Schedule 1C Term Loan Commitment
Schedule 1.1 Permitted Investments
Schedule 2 Permitted Encumbrances
Schedule 2.1(aa)(i) Trademarks, Patents and Copyrights
Schedule 2.1(aa)(ii) Tradenames
Schedule 2.1(aa)(iii) Monthly Rental Payments
Schedule 3 Permitted Indebtedness
Schedule 6.1 Real Estate
Schedule 7.11 Environmental Matters
Schedule 7.19(f) Management Fees
Schedule 7.19(n) Dividend Restrictions
FINANCING AGREEMENT
Financing Agreement, dated as of August 7, 2002 (this "Agreement"), by
and among each of TRANSTECHNOLOGY CORPORATION, a Delaware corporation, with a
principal place of business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
("Parent"), NORCO, INC., a Connecticut corporation, with a principal place of
business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Norco"),
and TCR CORPORATION, a Minnesota corporation, with a principal place of business
at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("TCR" and together with
Parent and Norco, each a "Company" and collectively, the "Companies"), THE
LENDERS FROM TIME TO TIME PARTY HERETO (each a "Lender" and collectively, the
"Lenders") and ABLECO FINANCE LLC, a Delaware limited liability company
("Ableco"), with offices located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, as agent for the Lenders (in such capacity, the "Agent").
RECITALS
The Companies have asked the Lenders to extend credit to the Companies
consisting of term loan in the aggregate principal amount of up to $14,000,000
to be made on the Closing Date (as hereinafter defined). The proceeds of the
Term Loan (as hereinafter defined) will be used (i) to refinance existing
secured indebtedness of the Parent and certain of its subsidiaries; (ii) to pay
fees and expenses related to this Agreement and the other Loan Documents (as
hereinafter defined); and (iii) to fund the Companies ongoing working capital
requirements. The Lenders are severally, and not jointly, willing to extend such
credit to the Companies subject to the terms and conditions hereinafter set
forth.
In consideration of the premises and the covenants and agreements
contained herein, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
1.1 As used in this Agreement, the following terms shall have the
respective meanings indicated below.
ABLECO shall have the meaning specified therefor in the Preamble hereto.
ABLECO/CIT INTERCREDITOR AGREEMENT shall mean the Intercreditor and
Subordination Agreement between CIT, Agent and the Lenders relating to the
relative priorities of the security interests of each of CIT, Agent and the
Lenders in the assets and properties of the Borrowers and the Guarantors.
ACCOUNTS shall mean all of each of the Companies' now existing and future: (A)
accounts (as defined in the UCC), and any and all other receivables (whether or
not specifically listed on schedules
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furnished to Agent), including, without limitation, all accounts created by, or
arising from, all of each of the Companies' sales, leases, rentals of goods or
renditions of services to their customers, including but not limited to, those
accounts arising under any of the Companies' trade names or styles, or through
any of the Companies' divisions; (B) any and all instruments, documents, chattel
paper (including electronic chattel paper) (all as defined in the UCC); (C)
unpaid seller's or lessor's rights (including rescission, replevin, reclamation,
repossession and stoppage in transit) relating to the foregoing or arising
therefrom; (D) rights to any goods represented by any of the foregoing,
including rights to returned, reclaimed or repossessed goods; (E) reserves and
credit balances arising in connection with or pursuant hereto; (F) guarantees,
supporting obligations, payment intangibles and letter-of-credit rights (all as
defined in the UCC); (G) insurance policies or rights relating to any of the
foregoing; (H) general intangibles pertaining to any and all of the foregoing
(including all rights to payment, including those arising in connection with
bank and non-bank credit cards), and including books and records and any
electronic media and software thereto; (I) notes, deposits or property of
account debtors securing the obligations of any such account debtors to the
Companies or any one of them; and (J) cash and non-cash proceeds (as defined in
the UCC) of any and all of the foregoing.
ADMINISTRATIVE BORROWER shall have the meaning specified therefor in Paragraph
13.14 hereof.
AFFILIATE means, with respect to any Person, any other Person that directly or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, such Person. For purposes of this definition,
"control" of a Person means the power, directly or indirectly, either to (a)
vote 10% or more of the Capital Stock having ordinary voting power for the
election of directors of such Person or (b) direct or cause the direction of the
management and policies of such Person whether by contract or otherwise.
Notwithstanding anything herein to the contrary, in no event shall Agent or any
Lender be considered an "Affiliate" of any Loan Party.
AGENT shall have the meaning specified therefor in the Preamble hereto.
AGENT ADVANCES shall have the meaning specified therefor in Paragraph 12.8
hereof.
AGGREGATE AVAILABILITY shall have the meaning specified therefor in the CIT
Financing Agreement as in effect on the date hereof assuming that all terms used
in such definition also have the meanings specified therefor in the CIT
Financing Agreement as in effect on the date hereof.
AGGREGATE BORROWING BASE shall have the meaning specified therefor in the CIT
Financing Agreement as in effect on the date hereof assuming that all terms used
in such definition also have the meanings specified therefor in the CIT
Financing Agreement as in effect on the date hereof.
AGREEMENT shall have the meaning specified therefor in the Preamble hereto.
ANNIVERSARY FEE shall have the meaning specified therefor in Paragraph 8.7
hereof.
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ASSIGNMENT AND ACCEPTANCE shall mean an assignment and acceptance entered into
by an assigning Lender and an assignee, and accepted by the Agent, in accordance
with Paragraph 13.5 hereof, in such form acceptable to Agent.
AUTHORIZED OFFICER means, with respect to any Company, the chief executive
officer, chief financial officer, president or vice president of such Company.
BORROWING BASE shall have the meaning specified therefor in the CIT Financing
Agreement as in effect on the date hereof.
BREEZE PLAN shall mean the Western Pennsylvania Teamsters and Employers Pension
Fund.
BUSINESS DAY shall mean any day on which Agent and JPMorgan Chase Bank are open
for business.
CAPITAL EXPENDITURES shall mean, for any period, the aggregate of all
expenditures of the Companies during such period on account of, property, plant,
equipment or similar fixed assets that, in conformity with GAAP, are required to
be included or reflected in the balance sheet of the Companies, including all
payments under capital leases that are required to be capitalized in accordance
with GAAP.
CAPITAL IMPROVEMENTS shall mean operating Equipment and facilities (other than
land) acquired or installed for use in any of the Companies' business
operations.
CAPITAL LEASE shall mean any lease of property (whether real, personal or mixed)
which, in conformity with GAAP, is accounted for as a capital lease or a Capital
Expenditure in the balance sheet of the Companies.
CAPITAL STOCK means (a) with respect to any Person that is a corporation, any
and all shares, interests, participations or other equivalents (however
designated and whether or not voting) of corporate stock, and (b) with respect
to any Person that is not a corporation, any and all partnership, membership or
other equity interests of such Person.
CHANGE OF CONTROL means each occurrence of any of the following:
(a) the acquisition, directly or indirectly, by any person or group
(within the meaning of Section 13(d)(3) of the Exchange Act) of beneficial
ownership of more than 33% of the aggregate outstanding voting power of the
Capital Stock of the Parent;
(b) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of the Parent
(together with any new directors whose election by such Board of Directors or
whose nomination for election by the shareholders of the Parent was approved by
a vote of at least a majority the directors of the Parent then still in office
who were either directors at the beginning of such period, or whose election or
nomination for election
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was previously approved) cease for any reason to constitute a majority of the
Board of Directors of the Parent;
(c) except with respect to the Capital Stock of TCR in connection with
a transaction permitted by Paragraph 4.7 of Section 4, the Parent shall cease to
have beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of
100% of the aggregate voting power of the Capital Stock of each other Loan
Party, free and clear of all Liens (other than any Liens granted hereunder and
Permitted Encumbrances);
(d) (i) any Loan Party consolidates with or merges into another entity
or conveys, transfers or leases all or substantially all of its property and
assets to another Person, or (ii) any entity consolidates with or merges into
any Loan Party in a transaction pursuant to which the outstanding voting Capital
Stock of such Loan Party is reclassified or changed into or exchanged for cash,
securities or other property, other than any such transaction described in this
clause (ii) in which either (A) in the case of any such transaction involving
the Parent, no person or group (within the meaning of Section 13(d)(3) of the
Exchange Act) has, directly or indirectly, acquired beneficial ownership of more
than 33% of the aggregate outstanding voting Capital Stock of the Parent or (B)
in the case of any such transaction involving a Loan Party other than the
Parent, the Parent has beneficial ownership of 100% of the aggregate voting
power of all Capital Stock of the resulting, surviving or transferee entity; or
(e) any one of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇▇▇▇
▇▇▇▇▇▇▇ shall cease to be involved in the day to day operations and management
of the business of the Parent and a successor reasonably acceptable to Agent is
not appointed on terms reasonably acceptable to Agent within 30 days of such
cessation of involvement.
CIT shall mean The CIT Group/Business Credit, Inc.
CIT DEBT shall mean the Indebtedness of each of the Companies owing to CIT
pursuant to the CIT Financing Documents.
CIT FINANCING AGREEMENT shall mean that certain Financing Agreement of even date
herewith between the Companies and CIT pursuant to which CIT has advanced the
CIT Loans to the Companies.
CIT FINANCING DOCUMENTS shall mean the CIT Financing Agreement and all other
documents, instruments and agreements executed from time to time in connection
with the CIT Financing Agreement.
CIT LOANS shall mean (a) the CIT Term Loan, (b) the CIT Revolving Loans and (c)
the letter of credit accommodations in accordance with the terms of the CIT
Financing Agreement as in effect on the date hereof.
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CIT REVOLVING LOANS shall mean the "Revolving Loans" (as defined in the CIT
Financing Agreement as in effect on the date hereof).
CIT TERM LOAN shall mean the "Term Loan" (as defined in the CIT Financing
Agreement as in effect on the date hereof).
CLOSING DATE shall mean the date that this Agreement has been duly executed by
the parties hereto and delivered to the Agent and all of the conditions
precedent set forth in Paragraph 2.1 are satisfied or waived.
CLOSING FEE shall have the meaning specified therefor in Paragraph 8.6 hereof.
COLLATERAL shall have the meaning specified therefor in Paragraph 6.1 and (ii)
all other property in which the Agent for the benefit of the Lenders has been
granted a security interest pursuant to any other Loan Document.
COMMERCIAL TORT CLAIMS shall mean each of the Companies now existing and future
commercial tort claims (as defined in the UCC).
COMMITMENT LETTER shall mean the Commitment Letter, dated June 13, 2002, issued
by Ableco to, and accepted by, the Parent.
CONTINUING OPERATIONS EBITDA shall mean, in any period, EBITDA of the Companies
during such period attributable to the continuing operations of the Companies.
COPYRIGHTS shall mean all of each of the Companies present and hereafter
acquired copyrights, copyright registrations, recordings, applications, designs,
styles, licenses, marks, prints and labels bearing any of the foregoing,
goodwill, any and all general intangibles, intellectual property and rights
pertaining thereto, and all cash and non-cash proceeds thereof.
DEFAULT shall mean any event specified in Section 10 hereof, whether or not any
requirement for the giving of notice, the lapse of time, or both, or any other
condition, event or act, has been satisfied.
DEFAULT RATE OF INTEREST shall mean a rate of interest per annum on any
Obligations hereunder, equal to the rate of interest otherwise in effect from
time to time pursuant to the terms of this Agreement plus 4.0%, or, if a rate of
interest is not otherwise in effect, the greater of (i) the Reference Rate plus
15% and (ii) 19.75%.
DEPOSITORY ACCOUNTS shall have the meaning specified therefor in the CIT
Financing Agreement as in effect on the date hereof.
DISPOSITION means any transaction, or series of related transactions, pursuant
to which any Person or any of its Subsidiaries sells, assigns, transfers or
otherwise disposes of any property or assets
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(whether now owned or hereafter acquired) to any other Person, in each case,
whether or not the consideration therefor consists of cash, securities or other
assets owned by the acquiring Person.
DOCUMENTS OF TITLE shall mean all of each of the Companies' present and future
documents (as defined in the UCC), and any and all warehouse receipts, bills of
lading, shipping documents, chattel paper, instruments and similar documents,
all whether negotiable or not and all goods (as defined in the UCC) and
Inventory relating thereto and all cash and non-cash proceeds of the foregoing.
DOLLAR, DOLLARS AND THE SYMBOL "$" each means lawful money of the United States
of America.
EBITDA shall mean, in any period, consolidated net income of the Companies for
said period, minus (to the extent included in determining net income) each of
the following: (A) income tax credits, (B) interest income, (C) gains from
extraordinary items, (D) aggregate non-cash net gains (but not aggregate net
loss) arising from the sale, exchange or other disposition of capital assets,
(E) any other non-cash gains that would have been included in consolidated
income under GAAP but for this provision, and (F) any other income that does not
arise in the ordinary course of business; plus (to the extent included in
determining net income) each of the following: (A) any provision for income
taxes, (B) interest expense, (C) the amount of any non-cash charges, (including
depreciation and amortization), (D) amortized debt discount and (E) any
aggregate non-cash net loss arising from the sale, exchange or other disposition
of capital asset. All items and classifications relevant to determining EBITDA
shall be determined in accordance with GAAP on a consistent basis with the
latest audited financial statements of the Companies.
EMPLOYEE PLAN means an employee benefit plan (other than a Multiemployer Plan)
covered by Title IV of ERISA and maintained (or that was maintained at any time
during the six (6) calendar years preceding the date of any borrowing hereunder)
for employees of any Loan Party or any of its ERISA Affiliates.
ENVIRONMENTAL ACTIONS shall mean any complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, judicial or administrative
proceeding, judgment, letter or other communication from any Governmental
Authority involving violations of Environmental Laws or Releases of Hazardous
Materials (a) from any assets, properties or businesses of any Loan Party or any
of its Subsidiaries or any predecessor in interest; (b) from adjoining
properties or businesses; or (c) onto any facilities which received Hazardous
Materials generated by any Loan Party or any of its Subsidiaries or any
predecessor in interest.
ENVIRONMENTAL LAWS shall mean the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. Section 9601, et seq.), the Hazardous
Materials Transportation Act (49 U.S.C. Section 1801, et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. Section 6901, et seq.), the Federal
Clean Water Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act (42 U.S.C.
Section 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. Section 2601
et seq.) and the Occupational Safety and Health Act (29 U.S.C. Section 651 et
seq.), as such laws may be amended or otherwise modified from time to time, and
any other present or future federal, state, local or foreign statute, ordinance,
rule, regulation,
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order, judgment, decree, permit, license or other binding determination of any
Governmental Authority imposing liability or establishing standards of conduct
for protection of the environment or other government restrictions relating to
the protection of the environment or the release, emission, deposit, discharge,
leaching, migration or spill of any Hazardous Materials into the environment.
ENVIRONMENTAL LIABILITIES shall mean all liabilities, monetary obligations,
Remedial Actions, losses, damages, punitive damages, consequential damages,
treble damages, costs and expenses (including all reasonable fees, disbursements
and expenses of counsel, experts and consultants and costs of investigations and
feasibility studies), fines, penalties, sanctions and interest incurred as a
result of any claim or demand by any Governmental Authority or any third party,
and which relate to any environmental condition or a Release of Hazardous
Materials from or onto (i) any property presently or formerly owned by any Loan
Party or any of its Subsidiaries or (ii) any facility which received Hazardous
Materials generated by any Loan Party or any of its Subsidiaries.
ENVIRONMENTAL LIEN means any Lien in favor of any Governmental Authority for
Environmental Liabilities.
EQUIPMENT shall mean all of each Companies' present and hereafter acquired
equipment (as defined in the UCC) including, without limitation, all machinery,
equipment, furnishings and fixtures, and all additions, substitutions and
replacements thereof, wherever located, together with all attachments,
components, parts, equipment and accessories installed thereon or affixed
thereto and all proceeds thereof of whatever sort.
ERISA means the Employee Retirement Income Security Act of 1974, as amended, and
any successor statute of similar import, and regulations thereunder, in each
case, as in effect from time to time. References to sections of ERISA shall be
construed also to refer to any successor sections.
ERISA AFFILIATE means, with respect to any Person, any trade or business
(whether or not incorporated) which is a member of a group of which such Person
is a member and which would be deemed to be a "controlled group" within the
meaning of Sections 414(b), (c), (m) and (o) of the Internal Revenue Code.
EVENT(S) OF DEFAULT shall have the meaning provided for in Section 10 of this
Agreement.
EXCHANGE ACT means the Securities Exchange Act of 1934, as amended.
EXISTING CREDIT AGREEMENT shall mean that certain Second Amended and Restated
Credit Agreement, dated as of June 30, 1995, as amended and restated as of July
24, 1998, as further amended and restated as of August 31, 1999, and as further
amended to date, by and among the Parent and certain Subsidiaries of the Parent
as borrowers, Fleet National Bank and the other lending institutions listed on
Schedule 1 to the Existing Credit Agreement as lenders (the "Existing Lenders"),
and the Fronting Banks and Issuing Banks as defined therein.
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EXTRAORDINARY RECEIPTS means any cash received by Parent or any of its
Subsidiaries not in the ordinary course of business and not consisting of
proceeds described in Paragraphs 4.7 and 4.8, including, without limitation, (a)
foreign, United States, state or local tax refunds, (b) pension plan reversions,
(c) Insurance Proceeds, (d) judgments, proceeds of settlements or other
consideration of any kind in connection with any cause of action, (e)
condemnation awards (and payments in lieu thereof), (f) indemnity payments, and
(g) any purchase price adjustment received in connection with any purchase
agreement.
FEDERAL FUNDS RATE means, for any period, a fluctuating interest rate per annum
equal to, for each day during such period, 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 which is a Business Day, the average of the quotations for
such day on such transactions received by the Agent from three Federal funds
brokers of recognized standing selected by it.
FINAL MATURITY DATE means the earlier of (i) August 7, 2005, (ii) the date
that is six months prior to the maturity date of the Subordinated Notes, (iii)
the termination of the CIT Financing Agreement and (iv) the date that the Term
Loan shall become due and payable in accordance with the terms of this Agreement
and the other Loan Documents.
FISCAL QUARTER shall mean, with respect to the Companies, each three (3) month
period constituting Parent's fiscal quarter, as reflected in the periodic
reports filed by the Parent with the Securities and Exchange Commission.
FISCAL YEAR shall mean each twelve (12) month period commencing on April 1 of
each year and ending on the following March 31.
FIXED CHARGES COVERAGE RATIO shall mean, for the Companies on a consolidated
basis, at any date of determination for the period then ended, the ratio of (i)
EBITDA of the Companies for such period, less Capital Expenditures of the
Companies and their Subsidiaries during such period, but only to the extent such
Capital Expenditures were not financed, to (ii) all scheduled cash payments of
principal and interest on all Indebtedness of the Companies and their
Subsidiaries (including obligations under Capital Leases) during such period,
plus all payments, dividends, distributions and repurchases made by the Parent
in respect of its Capital Stock during such period.
GAAP shall mean generally accepted accounting principles in the United States of
America as in effect from time to time and for the period as to which such
accounting principles are to apply, provided that in the event the Companies
modify their accounting principles and procedures as applied as of the Closing
Date, the Companies shall provide to Agent such statements of reconciliation as
shall be in form and substance reasonably acceptable to Agent.
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GENERAL INTANGIBLES shall mean all of each of the Companies' present and
hereafter acquired general intangibles (as defined in the UCC), and shall
include, without limitation, all present and future right, title and interest in
and to: (a) all Trademarks, tradenames, corporate names, business names, logos
and any other designs or sources of business identities, (b) Patents, together
with any improvements on said Patents, utility models, industrial models, and
designs, (c) Copyrights, (d) trade secrets, (e) licenses, permits and
franchises, (f) all applications with respect to the foregoing, (g) all right,
title and interest in and to any and all extensions and renewals, (h) goodwill
with respect to any of the foregoing, (i) any other forms of similar
intellectual property, (j) all customer lists, distribution agreements, supply
agreements, blue prints, indemnification rights and tax refunds, together with
all monies and claims for monies now or hereafter due and payable in connection
with any of the foregoing or otherwise, and all cash and non-cash proceeds
thereof, including, without limitation, the proceeds or royalties of any
licensing agreements between any Company and any licensee of any such Company's
General Intangibles.
GOVERNMENTAL AUTHORITY shall mean any nation or government, any Federal, state,
city, town, municipality, county, local or other political subdivision thereof
or thereto and any department, commission, board, bureau, instrumentality,
agency or other entity exercising executive, legislative, judicial, taxing,
regulatory or administrative powers or functions of or pertaining to government.
GUARANTIES shall mean the guaranty documents executed and delivered by the
Guarantors guaranteeing the Obligations.
GUARANTORS shall mean each direct and indirect Subsidiary of the Companies
(other than a Company) organized or incorporated under the laws of the District
of Columbia or any State or territory of the United States of America.
HAZARDOUS MATERIALS shall mean (a) any element, compound or chemical that is
defined, listed or otherwise classified as a contaminant, pollutant, toxic
pollutant, toxic or hazardous substance, extremely hazardous substance or
chemical, hazardous waste, special waste, or solid waste under Environmental
Laws or that is likely to cause immediately, or at some future time, harm to or
have an adverse effect on, the environment or risk to human health or safety,
including, without limitation, any pollutant, contaminant, waste, hazardous
waste, toxic substance or dangerous good which is defined or identified in any
Environmental Law and which is present in the environment in such quantity or
state that it contravenes any Environmental Law; (b) petroleum and its refined
products; (c) polychlorinated biphenyls; (d) any substance exhibiting a
hazardous waste characteristic, including, without limitation, corrosivity,
ignitability, toxicity or reactivity as well as any radioactive or explosive
materials; and (e) any raw materials, building components (including, without
limitation, asbestos-containing materials) and manufactured products containing
hazardous substances listed or classified as such under Environmental Laws.
INDEBTEDNESS shall mean, without duplication, all liabilities, contingent or
otherwise, which are any of the following: (a) obligations in respect of
borrowed money or for the deferred purchase price of
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property, services or assets, other than Inventory, or (b) lease obligations
which, in accordance with GAAP, have been, or which should be capitalized.
INDEMNIFIED MATTERS shall have the meaning specified therefor in Paragraph 7.13
hereof.
INDEMNITIES shall have the meaning specified therefor in Paragraph 7.13 hereof.
INSOLVENCY PROCEEDING means any proceeding commenced by or against any Person
under any provision of the Bankruptcy Code or under any other bankruptcy or
insolvency law, assignments for the benefit of creditors, formal or informal
moratoria, compositions, or extensions generally with creditors, or proceedings
seeking reorganization, arrangement, or other similar relief.
INSURANCE PROCEEDS shall mean proceeds or payments from an insurance carrier
with respect to any loss, casualty or damage to Collateral.
INVENTORY shall mean all of each of the Companies' present and hereafter
acquired inventory (as defined in the UCC) and including, without limitation,
all merchandise, inventory and goods, and all additions, substitutions and
replacements thereof, wherever located, together with all goods and materials
used or usable in manufacturing, processing, packaging or shipping same in all
stages of production from raw materials through work-in-process to finished
goods - and all proceeds thereof of whatever sort.
INVESTMENT PROPERTY shall mean all now owned and hereafter acquired investment
property (as defined in the UCC) and all proceeds thereof.
LENDER OR LENDERS shall have the meaning specified therefor in the Preamble
hereto.
LIABILITIES shall have the meaning specified therefor in Paragraph 8.15.
LIENS shall mean means any mortgage, deed of trust, pledge, lien (statutory or
otherwise), security interest, charge or other encumbrance or security or
preferential arrangement of any nature, including, without limitation, any
conditional sale or title retention arrangement, any Capitalized Lease and any
assignment, deposit arrangement or financing lease intended as, or having the
effect of, security.
LOAN ACCOUNT means an account maintained hereunder by the Agent on its books of
account at the Payment Office and, with respect to the Companies, in which the
Companies will be charged with all of the Obligations incurred by the Companies.
LOAN DOCUMENTS shall mean this Agreement, the Mortgages, the Security
Agreements, Pledge Agreements, Guaranties and any other documents, instruments
and agreements executed from time to time in connection with this Agreement, all
as may be renewed, amended, extended, increased or supplemented from time to
time.
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LOAN PARTY shall mean any Company or any Guarantor.
MASILLON PLAN shall mean the Massillon Union Pension Plan (formerly known as the
Pension Plan for Hourly-Rate Employees of The Engineered Components Operations
Massillon Division), which had previously been sponsored by TransTechnology
Engineered Components, LLC, a Delaware limited liability company, a former
subsidiary of Parent.
MATERIAL ADVERSE EFFECT shall mean a material adverse effect on any of (a) the
operations, business, assets, properties, condition (financial or otherwise) or
prospects of any Company or Guarantor, (b) the ability of any Company or
Guarantor to perform any of its obligations under any Loan Document to which it
is a party, (c) the legality, validity or enforceability of this Agreement or
any other Loan Document, (d) the rights and remedies of the Agent or any Lender
under any Loan Document, or (e) the validity, perfection or priority of a Lien
in favor of the Agent for the benefit of the Lenders on any of the Collateral.
MATERIAL CONTRACT means, with respect to any Person, (a) each contract or
agreement to which such Person or any of its Subsidiaries is a party involving
aggregate consideration payable to or by such Person or such Subsidiary of
$250,000 or more (other than purchase orders in the ordinary course of the
business of such Person or such Subsidiary and other than contracts that by
their terms may be terminated by such Person or Subsidiary in the ordinary
course of its business upon less than 60 days' notice without penalty or
premium) and (b) all other contracts or agreements material to the business,
operations, condition (financial or otherwise), performance, prospects or
properties of such Person or such Subsidiary.
MOODY'S means ▇▇▇▇▇'▇ Investors Service, Inc. and any successor thereto.
MORTGAGES shall mean the mortgages or deeds of trust, as applicable, required to
be delivered to Agent for the benefit of the Lenders with respect to all parcels
of real property of the Companies and the Guarantors (whether prior to, on or
after the Closing Date).
MULTIEMPLOYER PLAN means a "multiemployer plan" as defined in Section 4001(a)(3)
of ERISA to which any Loan Party or any of its ERISA Affiliates has contributed
to, or has been obligated to contribute, at any time during the preceding six
(6) years.
NET CASH PROCEEDS means, (a) with respect to any Disposition by any Person or
any of its Subsidiaries, the amount of cash received (directly or indirectly)
from time to time (whether as initial consideration or through the payment or
disposition of deferred consideration) by or on behalf of such Person or such
Subsidiary, in connection therewith after deducting therefrom only (i) the
amount of any Indebtedness secured by any Permitted Encumbrance on any asset
(other than Indebtedness assumed by the purchaser of such asset) which is
required to be, and is, repaid in connection with such Disposition (other than
Indebtedness under this Agreement), (ii) reasonable expenses related thereto
incurred by such Person or such Subsidiary in good faith in connection
therewith, (iii) transfer taxes paid to any taxing authorities by such Person or
such Subsidiary in
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connection therewith, and (iv) net income taxes to be paid in connection with
such Disposition (after taking into account any tax credits or deductions and
any tax sharing arrangements) and (b) with respect to the issuance or incurrence
of any Indebtedness by any Person or any of its Subsidiaries, or the sale or
issuance by any Person or any of its Subsidiaries of any shares of its Capital
Stock, the aggregate amount of cash received (directly or indirectly) from time
to time (whether as initial consideration or through the payment or disposition
of deferred consideration) by or on behalf of such Person or such Subsidiary in
connection therewith, after deducting therefrom only (i) reasonable expenses
related thereto incurred by such Person or such Subsidiary in good faith in
connection therewith, (ii) transfer taxes paid by such Person or such Subsidiary
in connection therewith and (iii) net income taxes to be paid in connection
therewith (after taking into account any tax credits or deductions and any tax
sharing arrangements); in each case of clause (a) and (b) to the extent, but
only to the extent, that the amounts so deducted are (x) actually paid to a
Person that, except in the case of reasonable out-of-pocket expenses, is not an
Affiliate of such Person or any of its Subsidiaries and (y) properly
attributable to such transaction or to the asset that is the subject thereof.
NORCO shall have the meaning specified therefor in the Preamble hereto.
OBLIGATIONS shall mean all loans, advances and extensions of credit made or to
be made by Agent and any Lender to the Companies, or any one of them, or to
others for the Companies' account under this Agreement (including, without
limitation, the Term Loan); any and all other indebtedness, obligations and
liabilities which may at any time be owing by the Companies or any one of them
to Agent or any Lender pursuant to this Agreement or any other Loan Document,
whether now in existence or incurred by the Companies or any one of them from
time to time hereafter; whether principal, interest (including, without
limitation, all interest that accrues after the commencement of any Insolvency
Proceeding of any Company, whether or not the payment of such interest is
unenforceable or is not allowable due to the existence of such Insolvency
Proceeding), fees, costs, expenses, indemnities or otherwise; whether secured by
a Lien upon any of the Companies' Collateral, assets or property or the assets
or property of any other Person; whether such indebtedness is absolute or
contingent, joint or several, matured or unmatured, direct or indirect and
whether the Companies or any one of them are liable to Agent or any Lender for
such indebtedness as principal, surety, endorser, guarantor or otherwise.
Obligations shall also include indebtedness or obligations under Section 8; the
Companies' liability to Agent and any Lender as maker or endorser of any
promissory note or other instrument for the payment of money; the obligation of
any Company to reimburse any amount in respect of any of the foregoing that
Agent or any Lender (in their sole discretion) may elect to pay or advance on
behalf of such Person.
OPERATING CASH FLOW shall mean EBITDA less Capital Expenditures, determined in
accordance with GAAP consistently applied.
OPERATING LEASES shall mean all leases of property (whether real, personal or
mixed) other than Capital Leases.
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OTHER COLLATERAL shall mean all of each of the Companies' now owned and
hereafter acquired lockbox, blocked account and any other deposit accounts,
including, without limitation, the Depositary Accounts, maintained with any bank
or financial institutions into which the proceeds of Collateral are or may be
deposited; - all other deposit accounts and - all Investment Property; all cash
and other monies and property in the possession or control of Agent, any Lender
or any of their agents or designees; all books, records, ledger cards, disks and
related data processing software at any time evidencing or containing
information relating to any of the Collateral described herein or otherwise
necessary or helpful in the collection thereof or realization thereon; and all
cash and non-cash proceeds of the foregoing.
OUT-OF-POCKET EXPENSES shall mean all of Agent's and any Lender's present and
future expenses incurred relative to this Agreement or any other Loan Document,
whether incurred heretofore or hereafter, which expenses shall include, without
being limited to: the cost of record searches, all costs and expenses incurred
by Agent or any Lender in opening bank accounts, depositing checks, receiving
and transferring funds, and wire transfer charges, any charges imposed on Agent
or any Lender due to returned items and "insufficient funds" of deposited checks
and Agent's and any Lender's standard fees relating thereto, travel, lodging and
similar expenses of Agent's and any Lender's personnel in connection with
inspecting and monitoring the Collateral from time to time hereunder, any
applicable counsel fees and disbursements, fees and taxes relative to the filing
of financing statements, all expenses, costs and fees set forth in Paragraph
10.3 of Section 10 of this Agreement, and title insurance premiums, real estate
survey costs, costs of preparing and recording mortgages/deeds of trust against
the Real Estate.
PARENT shall have the meaning specified therefor in the Preamble hereto.
PATENTS shall mean all of each of the Companies' present and hereafter acquired
patents, patent applications, registrations, any reissues or renewals thereof,
licenses, any inventions and improvements claimed thereunder, and all general
intangible, intellectual property and patent rights with respect thereto of the
Companies or any one of them, and all income, royalties, cash and non-cash
proceeds thereof.
PAYMENT OFFICE means the Agent's office located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other office or offices of the Agent as may
be designated in writing from time to time by the Agent to the Administrative
Borrower.
PBGC means the Pension Benefit Guaranty Corporation or any successor thereto.
PERMITTED ENCUMBRANCES shall mean: (a) Liens existing on the date hereof set
forth on Schedule 2, but not the extension of coverage thereof to other property
or the extension of maturity, refinancing or other modification of the terms
thereof or the increase of the Indebtedness secured thereby; (b) Purchase Money
Liens; (c) statutory Liens of landlords and Liens of carriers, warehousemen,
bailees, mechanics, materialmen and other like Liens imposed by law, created in
the ordinary course of business and for amounts not yet due (or which are being
contested in good faith, by appropriate
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proceedings or other appropriate actions which are sufficient to prevent
imminent foreclosure of such Liens) and with respect to which adequate reserves
or other appropriate provisions are being maintained by each of the Companies,
as applicable, in accordance with GAAP; (d) deposits made (and the Liens
thereon) in the ordinary course of business of any of the Companies and securing
obligations not past due (including, without limitation, security deposits for
leases, indemnity bonds, surety bonds and appeal bonds) in connection with
workers' compensation, unemployment insurance and other types of social security
benefits or to secure the performance of tenders, bids, contracts (other than
for the repayment or guarantee of borrowed money or purchase money obligations),
statutory obligations and other similar obligations arising as a result of
progress payments under government contracts; (e) easements (including, without
limitation, reciprocal easement agreements and utility agreements),
encroachments, minor defects or irregularities in title, variation and other
restrictions, charges or encumbrances (whether or not recorded) affecting the
Real Estate, if applicable, and which in the aggregate (A) do not materially
interfere with the occupation, use or enjoyment by any of the Companies of its
business or property so encumbered, (B) do not secure obligations for the
payment of money, and (C) in the reasonable business judgment of Agent do not
materially and adversely affect the value of such Real Estate; (f) Liens
securing the Obligations; (g) tax Liens for which the taxes are not yet due and
payable or which are being diligently contested in good faith by the Companies
by appropriate proceedings, and which Liens are not (x) filed on any public
records, (y) other than with respect to Real Estate, senior to the Liens of
Agent or (z) for Taxes due the United States of America or any state thereof
having similar priority statutes, as further set forth in Paragraph 7.8 of
Section 7 hereof; and (h) Liens granted in favor of CIT to secure the CIT Debt.
PERMITTED INDEBTEDNESS shall mean: (a) Indebtedness secured by Purchase Money
Liens; (b) Subordinated Debt; (c) Indebtedness owing to Agent and the Lenders
under this Agreement and the other Loan Documents; (d) deferred Taxes and other
expenses incurred in the ordinary course of business; (e) the CIT Debt; (f)
intercompany Indebtedness among the Companies and the Guarantors, provided that
all such intercompany Indebtedness is (i) made subordinate to the Obligations
pursuant to terms satisfactory to Agent, and (ii) evidenced by a promissory note
in form and substance satisfactory to Agent, which promissory note is pledged
and delivered to Agent, for the benefit of the Lenders, together with any
instrument of transfer reasonably requested by Agent; and (g) other Indebtedness
disclosed on Schedule 3.
PERMITTED INVESTMENTS means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case, maturing within six months from the date of acquisition thereof; (b)
commercial paper, maturing not more than 270 days after the date of issue rated
P-1 by Moody's or A-1 by Standard & Poor's; (c) certificates of deposit maturing
not more than 270 days after the date of issue, issued by commercial banking
institutions and money market or demand deposit accounts maintained at
commercial banking institutions, each of which is a member of the Federal
Reserve System and has a combined capital and surplus and undivided profits of
not less than $500,000,000; (d) repurchase agreements having maturities of not
more than 90 days from
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the date of acquisition which are entered into with major money center banks
included in the commercial banking institutions described in clause (c) above
and which are secured by readily marketable direct obligations of the United
States Government or any agency thereof, (e) money market accounts maintained
with mutual funds having assets in excess of $2,500,000,000; (f) tax exempt
securities rated A or better by Moody's or A+ or better by Standard & Poor's;
and(g) as set forth on Schedule 1.1.
PERSON shall mean an individual, corporation, limited liability company,
partnership, association, joint-stock company, trust, unincorporated
organization, joint venture or other enterprise or entity or Governmental
Authority.
PIK RATE means 6%.
PLEDGE AGREEMENT shall mean the Pledge Agreements made by a Company or any
Guarantor in favor of Agent for the benefit of the Lenders, securing the
Obligations and delivered to Agent.
PRO RATA SHARE means, with respect to a Lender's obligation to make the Term
Loan, receive payments of interest, fees, and principal with respect thereto and
all other matters (including, without limitation, the indemnification
obligations arising under Paragraph 12.5), the percentage obtained by dividing
(i) such Lender's Term Loan Commitment, by (ii) the Total Term Loan Commitment,
PROVIDED, that, if the Total Term Loan Commitment has been reduced to zero, the
numerator shall be the aggregate unpaid principal amount of such Lender's Term
Loan (including Agent Advances) and the denominator shall be the aggregate
unpaid principal amount of the Term Loan (including Agent Advances).
PURCHASE MONEY LIENS shall mean Liens on any item of Equipment acquired after
the Closing Date provided that (a) each such Lien shall attach only to the
property to be acquired, (b) a description of the Equipment so acquired is
furnished to Agent, and (c) the debt incurred in connection with such
acquisitions shall not exceed $500,000 in the aggregate in any Fiscal Year.
RANCHO TTC PROPERTY shall have the meaning specified therefore in Paragraph
7.12.
RATING AGENCIES shall have the meaning specified therefor in Paragraph 8.15.
REAL ESTATE shall mean each of the Companies' fee and/or leasehold interests in
the real property, including any such real property that has been, or will be,
encumbered, mortgaged, pledged or assigned to Agent for the benefit of the
Lenders or its designee.
REFERENCE RATE shall mean the rate of interest per annum publicly announced by
JPMorgan Chase Bank its successors or any other commercial bank from time to
time, designated by Agent to the Administrative Borrower, from time to time as
its prime rate, base rate or reference rate, in effect at its principal office
in New York City. The prime rate is not intended to be the lowest rate of
interest
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charged to its borrowers. Each change in the Reference Rate shall be effective
from and including the date such change is publicly announced as being
effective.
RELEASE means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, seeping, migrating, dumping or
disposing of any Hazardous Material (including the abandonment or discarding of
barrels, containers and other closed receptacles containing any Hazardous
Material) into the indoor or outdoor environment, including, without limitation,
the movement of Hazardous Materials through or in the ambient air, soil, surface
or ground water, or property.
REMEDIAL ACTION means all actions taken to (a) clean up, remove, remediate,
contain, treat, monitor, assess, evaluate or in any other way address Hazardous
Materials in the indoor or outdoor environment; (b) prevent or minimize a
Release or threatened Release of Hazardous Materials so they do not migrate or
endanger or threaten to endanger public health or welfare or the indoor or
outdoor environment; (c) perform pre-remedial studies and investigations and
post-remedial operation and maintenance activities; or (d) any other actions
authorized by 42 U.S.C. Section 9601.
REPORTABLE EVENT means an event described in Section 4043 of ERISA (other than
an event not subject to the provision for 30-day notice to the PBGC under the
regulations promulgated under such Section).
REQUIRED LENDERS means Lenders whose Pro Rata Shares of the Term Loan aggregate
at least 51%.
SECURITIZATION has the meaning specified therefor in Paragraph 8.15.
SECURITIZATION PARTIES has the meaning specified therefor in Paragraph 8.15.
SECURITY AGREEMENT means a Security Agreement made by a Loan Party in favor of
Agent for the benefit of Lenders securing the Obligations and delivered to
Agent.
SENIOR DEBT shall mean the aggregate principal amount of all Indebtedness of the
Companies and its Subsidiaries in respect of the Term Loan, the CIT Loans and
all other the indebtedness for borrowed money which is not Subordinated Debt.
SENIOR LEVERAGE RATIO shall mean, at any date of determination, the ratio of
Senior Debt to Continuing Operations EBITDA.
STANDARD & POOR'S means Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. and any successor thereto
SUBORDINATED DEBT shall mean the debt due on the Subordinated Notes and all
other debt due a Subordinating Creditor (and the note(s) evidencing such) which
has been subordinated, by a
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Subordination Agreement, to the prior payment and satisfaction of the
Obligations of the Companies to Agent and the Lenders (in form and substance
satisfactory to Agent).
SUBORDINATED NOTE HOLDERS shall mean the holders of the Subordinated Notes.
SUBORDINATED NOTES shall mean Parent's 16% Amended and Restated Senior
Subordinated Promissory Notes due August 29, 2005.
SUBORDINATING CREDITOR shall mean the Subordinated Note Holders and any other
party hereafter executing a Subordination Agreement.
SUBORDINATION AGREEMENT shall mean the agreement (in form and substance
satisfactory to Agent) among the Companies, a Subordinating Creditor(s) and
Agent, pursuant to which Subordinated Debt is subordinated to the prior payment
and satisfaction of all of the Companies' Obligations to Agent and the Lenders.
SUBSIDIARY shall mean, with respect to any Person at any date, any corporation,
limited or general partnership, limited liability company, trust, estate,
association, joint venture or other business entity (a) the accounts of which
would be consolidated with those of such Person in such Person's consolidated
financial statements if such financial statements were prepared in accordance
with GAAP or (b) of which more than 50% of (i) the outstanding capital stock
having (in the absence of contingencies) ordinary voting power to elect a
majority of the board of directors or other managing body of such Person, (ii)
in the case of a partnership or limited liability company, the interest in the
capital or profits of such partnership or limited liability company or (iii) in
the case of a trust, estate, association, joint venture or other entity, the
beneficial interest in such trust, estate, association or other entity business
is, at the time of determination, owned or controlled directly or indirectly
through one or more intermediaries, by such Person.
SURPLUS CASH shall mean for any Fiscal Year (a) the sum of EBITDA, less (b) the
sum of (i) all cash interest obligations paid by the Companies, (ii) the
aggregate scheduled amount of principal of the CIT Term Loan and the Term Loan
and all other Senior Debt and Subordinated Debt repaid during such Fiscal Year,
(iii) Capital Expenditures actually incurred and not financed, and (iv) all
federal, state and local tax cash payments made by each of the Companies for
such Fiscal Year.
TAXES shall mean all federal, state, municipal and other governmental taxes,
levies, charges, claims and assessments which are or may be due by the Companies
with respect to their business, operations, Collateral or otherwise.
TCR shall have the meaning specified therefor in the Preamble hereto.
TCR ACQUISITION shall mean the acquisition of all of the Capital Stock of TCR by
Parent on April 17, 1997.
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TERM LOAN shall mean the term loan in the principal amount of $14,000,000.00
made by the Lenders to the Companies pursuant to the provisions of Section 4 of
this Agreement.
TERM LOAN COMMITMENT means, with respect to each Lender, the commitment of such
Lender to make the Term Loan to the Companies in the amount set forth in
Schedule 1C hereto, as the same may be terminated or reduced from time to time
in accordance with the terms of this Agreement.
TERMINATION EVENT means (i) a Reportable Event with respect to any Employee
Plan, (ii) any event that causes any Loan Party or any of its ERISA Affiliates
to incur liability under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064,
4069, 4201, 4204 or 4212 of ERISA or Section 4971 or 4975 of the Internal
Revenue Code, (iii) the filing of a notice of intent to terminate an Employee
Plan or the treatment of an Employee Plan amendment as a termination under
Section 4041 of ERISA, (iv) the institution of proceedings by the PBGC to
terminate an Employee Plan, or (v) any other event or condition which might
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Employee Plan.
TOTAL ASSETS shall mean total assets determined in accordance with GAAP, on a
basis consistent with the latest audited financial statements of the Companies.
TOTAL LIABILITIES shall mean total liabilities determined in accordance with
GAAP, on a basis consistent with the latest audited financial statements of the
Companies.
TOTAL TERM LOAN COMMITMENT shall mean the sum of the amounts of the Lenders'
Term Loan Commitments.
TRADE ACCOUNTS RECEIVABLE shall mean that portion of each of the Companies'
Accounts which arises from the sale of Inventory or the rendition of services in
the ordinary course of the Companies' business.
TRADEMARKS shall mean all of each of the Companies' present and hereafter
acquired trademarks, trademark registrations, recordings, applications,
tradenames, trade styles, service marks, prints and labels (on which any of the
foregoing may appear), licenses, reissues, renewals, and any other intellectual
property and trademark rights pertaining to any of the foregoing, together with
the goodwill associated therewith, and all cash and non-cash proceeds thereof.
UCC shall mean the Uniform Commercial Code as the same may be amended and in
effect from time to time in the state of New York.
1.2 Unless otherwise expressly provided herein, each accounting term
used in this Agreement shall have the meaning given it under GAAP applied on a
basis consistent with those used in preparing the Financial Statements. All
terms used in this Agreement which are defined in Article 8 or Article 9 of the
UCC and which are not otherwise defined herein shall have the same meanings
herein as set forth therein.
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SECTION 2. CONDITIONS PRECEDENT
2.1 The obligation of the Lenders to make the Term Loan hereunder is
subject to the satisfaction of, extension of or waiver in writing of, on or
prior to, the Closing Date, the following conditions precedent:
(a) LIEN SEARCHES - Agent shall have received tax, judgment and Uniform
Commercial Code searches satisfactory to Agent naming any of the Companies and
their Subsidiaries as debtor or filed against any such Person or its property.
(b) INSURANCE - Each of the Companies shall have delivered to Agent
evidence satisfactory to Agent that casualty and liability insurance policies
listing Agent as additional insured, loss payee or mortgagee, as the case may
be, are in full force and effect, all as set forth in Paragraph 7.7 of Section 7
of this Agreement.
(c) UCC FILINGS - Any financing statements required to be filed in
order to create, in favor of Agent for the benefit of the Lenders, a first
perfected security interest in the Collateral, subject only to the Permitted
Encumbrances, shall have been properly filed in each office in each jurisdiction
required in order to create in favor of Agent a perfected Lien on the
Collateral. Agent shall have received acknowledgment copies of all such filings
(or, in lieu thereof, Agent shall have received other evidence satisfactory to
Agent that all such filings have been made) and Agent shall have received
evidence that all necessary filing fees and all taxes or other expenses related
to such filings have been paid in full.
(d) CIT FINANCING AGREEMENT - Agent shall be satisfied that the
Companies shall have satisfied all of the conditions to effectiveness of the CIT
Financing Agreement, including without limitation, with respect to establishing
lockboxes and depository accounts.
(e) BOARD RESOLUTION - Agent shall have received a copy of the
resolutions of the Board of Directors or Managers of (i) each of the Companies
and the Guarantors (as the case may be) authorizing (A) the execution, delivery
and performance of this Agreement and the other Loan Documents to which such
Loan Parties are or will be a party and any related agreements and (B) the
transactions contemplated by the Loan Documents to which such Loan Parties are
or will be a party, and (ii) each of the Companies authorizing the borrowings
hereunder, in each case certified by the Secretary or Assistant Secretary of
each of the Companies and the Guarantors (as the case may be) as of the date
hereof, together with a certificate of the Secretary or Assistant Secretary of
the Companies and the Guarantors (as the case may be) as to the incumbency and
signature of the officers of each of the Companies and/or the Guarantors
executing such Loan Documents and any certificate or other documents to be
delivered by them pursuant hereto, together with evidence of the incumbency of
such Secretary or Assistant Secretary.
(f) CORPORATE ORGANIZATION - Agent shall have received (i) a copy of
the Certificate or Articles of Incorporation or Certificate of Formation or
similar organizational document of each of
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the Companies and the Guarantors certified by the Secretary of State of the
states of their incorporation or formation, and (ii) a copy of the By-Laws,
Operating Agreement or similar agreement of each of the Companies certified by
the respective Secretary or Assistant Secretary thereof, all as amended through
the date hereof.
(g) OFFICER'S CERTIFICATE - Agent shall have received an executed
Officer's Certificate of each of the Loan Parties, satisfactory in form and
substance to Agent, certifying that (i) the representations and warranties
contained herein (in the case of a Company) and in each other Loan Document to
which such Loan Parties are a party are true and correct in all respects on and
as of the Closing Date; (ii) each of the Loan Parties is in compliance with all
of the terms and provisions set forth herein or therein, as applicable; and
(iii) no Default or Event of Default has occurred and is continuing on the
Closing Date or would result from this Agreement or the other Loan Documents
becoming effective in accordance with its or their respective terms.
(h) OPINIONS - Counsel for the Companies and the Guarantors shall have
delivered to Agent opinions satisfactory to Agent opining, inter alia, that each
of the Companies and the Guarantors is validly existing and in good standing in
its state of incorporation or organization and in each such other state or
jurisdiction where the nature and extent of its business and properties requires
the same, and that, subject to the (i) filing, priority and remedies provisions
of the Uniform Commercial Code, (ii) the provisions of the Bankruptcy Code,
insolvency statutes or other like laws, (iii) the equity powers of a court of
law and (iv) such other matters as may be agreed upon with Agent: this
Agreement, the Guaranty and all other Loan Documents of each of the Companies
and the Guarantors are (A) valid, binding and enforceable according to their
terms, (B) are duly authorized, executed and delivered, and (C) do not violate
any terms, provisions, representations or covenants in the charter, by-laws or
other organizational documents of each of the Companies or the Guarantors or, to
the best knowledge of such counsel, of any loan agreement, mortgage, deed of
trust, note, security or pledge agreement, indenture or other contract to which
the Companies, or any one of them, or the Guarantors are signatories or by which
the Companies, or any one of them, or the Guarantors or their assets are bound.
In addition, the Companies' United Kingdom counsel shall have delivered an
opinion satisfactory to Agent that (x) all Liens upon the assets of
TransTechnology (GB) Limited have been terminated, and (y) all Indebtedness of
TransTechnology (GB) Limited owing to the Parent or any other Loan Party has
been duly assigned to Agent as collateral security for the Obligations in
accordance with all applicable laws and that Agent has a perfected first
priority security interest, subject to Permitted Encumbrances, in such
Indebtedness in accordance with all applicable laws.
(i) REPRESENTATIONS AND WARRANTIES; ABSENCE OF DEFAULT; MATERIAL
ADVERSE EFFECT - The following statements shall be true and correct: (i) the
representations and warranties contained herein and in each other Loan Document,
certificate or other writing delivered to the Agent or any Lender pursuant
hereto or thereto on or prior to the Closing Date are true and correct on and as
of the Closing Date as though made on and as of such date and (ii) no Default or
Event of Default shall have occurred and be continuing or result from this
Agreement or the other Loan Documents
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becoming effective in accordance with its or their respective terms and (iii) no
Material Adverse Effect shall have occurred.
(j) LEGAL RESTRAINTS/LITIGATION - As of the Closing Date, there shall
be no: (i) litigation, investigation or proceeding (judicial or administrative)
pending or, to any Loan Party's knowledge, threatened against any Loan Party or
any of their Subsidiaries or their assets, by any agency, division or department
of any county, city, state or federal government arising out of this Agreement;
(ii) injunction, writ or restraining order restraining or prohibiting the
consummation of the financing arrangements contemplated under this Agreement; or
(iii) suit, action, investigation or proceeding (judicial or administrative)
pending against any Loan Party or any of their assets, which, in the opinion of
Agent, if adversely determined, could have a material adverse effect on the
business, prospects, operation, assets, financial condition or Collateral of the
Companies or any one of them and/or the Guarantors.
(k) GUARANTIES, SECURITY AGREEMENTS - The Guarantors shall have duly
executed and delivered to Agent (i) Guaranties, in form acceptable to Agent,
guaranteeing all present and future Obligations of the Companies, and (ii)
Security Agreements securing such Guarantors' obligations under such Guaranties,
in form acceptable to Agent.
(l) SUBORDINATION AGREEMENTS - The Subordinating Creditor and the Loan
Parties shall have executed and delivered to Agent a Subordination Agreement, in
form and substance satisfactory to Agent, subordinating the debt due the
Subordinating Creditor by the Loan Parties to the prior payment and satisfaction
of the Obligations of each of the Companies to Agent and the Lenders. Agent and
CIT shall have entered the Ableco/CIT Intercreditor Agreement in form and
substance satisfactory to Agent.
(m) CASH BUDGET PROJECTIONS - Agent shall have received, reviewed and
been satisfied with a twelve (12) month cash budget projection prepared by each
of the Companies on the form provided by Agent.
(n) PLEDGE AGREEMENTS - Each Loan Party shall (i) execute and deliver
to Agent a Pledge Agreement pledging to Agent, for the benefit of the Lenders,
as collateral for the Obligations of the Companies and the obligations of the
Guarantors not less than 100% of the issued and outstanding stock of each of the
direct and indirect Subsidiaries of the Parent organized or incorporated under
the laws of the District of Columbia or any State or territory of the United
States of America and not less than 66.66% of the stock of all other direct and
indirect Subsidiaries of the Parent, and (ii) deliver to Agent copies of the
original stock certificates evidencing such stock, together with copies of the
duly executed stock powers (undated and in-blank) with respect thereto, provided
that the originals of such stock certificates and stock powers shall have been
delivered to CIT, for the benefit of the Lenders, in accordance with the terms
and provisions of the Ableco/CIT Intercreditor Agreement, all in form and
substance satisfactory to Agent.
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(o) INTELLECTUAL PROPERTY SECURITY AGREEMENTS. - The Companies and the
Guarantors shall execute and deliver to Agent Security Agreements and/or
assignments for security with respect to all of their Patents, Trademarks and
Copyrights.
(p) ADDITIONAL DOCUMENTS - Each Loan Party and its Subsidiaries shall
have executed and delivered to Agent all Loan Documents necessary to consummate
the lending arrangement contemplated between the Companies, the Agent and the
Lenders.
(q) DISBURSEMENT AUTHORIZATION - The Companies shall have delivered to
Agent all information necessary for Agent to issue wire transfer instructions on
behalf of each of the Companies for the Term Loan to be made under this
Agreement including, but not limited to, disbursement authorizations in form
acceptable to Agent.
(r) AGGREGATE AVAILABILITY - After giving effect to the Term Loan, the
CIT Loans and the payment of all financing fees and expenses related to this
Agreement and the transactions contemplated herein, in each case, to be made on
the Closing Date, (i) Aggregate Availability shall not be less than $3,000,000,
and (ii) all debts and obligations of the Companies shall be current, and all
payables shall, at such time, be handled in the normal course of the Companies'
business and consistent with their past practice. The Parent shall deliver to
the Agent a certificate of the chief financial officer of such Company
certifying as to the matters set forth in clauses (i) and (ii) above and
containing the calculation of Aggregate Availability.
(s) FINANCIAL STATEMENTS - The Companies shall have delivered to Agent
the audited consolidated financial statements of the Companies for the Fiscal
Year ended March 31, 2002, with the unqualified opinion of the Companies'
independent auditors, and such financial statements shall be consistent with the
financial statements previously furnished to Agent.
(t) MATERIAL CONTRACTS - The Companies shall have delivered copies of
all of the Material Contracts as in effect on the Closing Date (including,
without limitation, copies of the CIT Financing Documents and the Securities
Purchase Agreement, dated as of August 29, 2000, as amended by the First
Amendment Agreement, dated as of August 7, 2002, by and among the Subordinated
Note Holders and the Parent), certified as true and correct copies thereof by an
Authorized Officer of the Administrative Borrower, together with a certificate
of an Authorized Officer of the Administrative Borrower stating that such
agreements remain in full force and effect and that none of the Loan Parties has
breached or defaulted in any of its obligations under such agreements.
(u) EXISTING CREDIT AGREEMENT - The Existing Credit Agreement shall be:
(i) terminated; (ii) all loans and obligations of any Loan Party thereunder
shall be paid or satisfied in full, including through utilization of the
proceeds of the initial CIT Revolving Loans, the CIT Term Loan and the Term
Loan; and (iii) all Liens in favor of the Existing Lenders on the Collateral and
otherwise in connection therewith shall be terminated and/or released upon such
payment. The Parent shall have
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delivered a fully executed copy of a Pay-Off Letter with respect to the Existing
Credit Agreement, in form and substance satisfactory to Agent.
(v) MORTGAGES/DEEDS OF TRUST - The Mortgages shall have been executed
and delivered to Agent, an agent of Agent or to a title insurance company
acceptable to Agent.
(w) TITLE INSURANCE POLICIES - Agent shall have received, in respect of
each Mortgage, a mortgagee's title policy or marked-up unconditional binder for
such insurance (other than with respect to the real property owned by the Parent
that is located at ▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ 11545). Each such policy
shall (i) be in an amount satisfactory to Agent; (ii) insure that the mortgage
or deed of trust insured thereby creates a valid first Lien on the property
covered by such mortgage or deed of trust, free and clear of all defects and
encumbrances except those acceptable to Agent; (iii) name Agent as the insured
thereunder; and (iv) contain such endorsements and effective coverage as Agent
may reasonably request. Agent shall also have received evidence that all
premiums in respect of such policies have been paid and that all charges for
mortgage recording taxes, if any, shall have been paid.
(x) SURVEYS - Agent and the title insurance company issuing each title
policy referred to in the immediately preceding paragraph (each, a "Title
Insurance Company") shall have received maps or plats of a perimeter or boundary
of the site of each of the properties covered by the Mortgages, dated a date
satisfactory to Agent and the relevant Title Insurance Company prepared by an
independent professional licensed land surveyor satisfactory to Agent and the
relevant Title Insurance Company, which maps or plats and the surveys on which
they are based shall be made in accordance with the Minimum Standard Detail
Requirements for Land Title Surveys jointly established and adopted by the
American Land Title Association and the American Congress on Surveying and
Mapping; and, without limiting the generality of the foregoing, there shall be
surveyed and shown on the maps or plats or surveys the following: (i) the
locations on such sites of all the buildings, structures and other improvements
and the established building setback lines insofar as the foregoing affect the
perimeter or boundary of such property; (ii) the lines of streets abutting the
sites and width thereof; (iii) all access and other easements appurtenant to the
sites or necessary or desirable to use the sites; (iv) all roadways, paths,
driveways, easements, encroachments and overhanging projections and similar
encumbrances affecting the sites, whether recorded, apparent from a physical
inspection of the sites or otherwise known to the surveyor; (v) any
encroachments on any adjoining property by the building, structures and
improvements on the sites; and (vi) if the site is designated as being on a
filed map, a legend relating the survey to said map. Further, the survey shall
(x) be certified to Agent and the Title Insurance Company and (y) contain a
legend reciting as to whether or not the site is located in a flood zone.
(y) APPRAISALS - Agent shall have received satisfactory appraisals on
each of the Companies' Equipment and Inventory, which appraisals shall be
prepared by DoveBid Valuation Services, Inc., and shall indicate as of February
26, 2002, (i) a net orderly liquidation recovery value of Inventory attributable
to the "Breeze Eastern" division of the Parent of at least 15% of cost, which
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shall equal an initial Borrowing Base advance rate in respect of such Inventory
of at least 12.75%, and (ii) a net orderly liquidation recovery value of
Inventory attributable to Norco of at least 12% of cost, which shall equal an
initial Borrowing Base advance rate of such Inventory of at least 10.2%.
(z) ENVIRONMENTAL REPORT - Agent shall have received environmental
audit reports on (i) all of each of the Loan Parties' and their Subsidiaries'
leasehold and fee interests, and (ii) the Companies' waste disposal practices,
in each case, to Agent's satisfaction. Other than as set forth on Schedule 7.11,
the reports must not disclose or indicate any material liability (real or
potential) stemming from the Companies' premises, their operations, their waste
disposal practices or waste disposal sites used by Companies.
(aa) SCHEDULES - The Companies or their counsel shall provide Agent
with schedules of (i) any of the Companies' and their Subsidiaries (a)
Trademarks, (b) Patents and (c) Copyrights, as applicable and all in such detail
as to provide appropriate recording information with respect thereto, (ii) any
tradenames, and (iii) monthly rental payments for any leased premises or any
other premises where any Collateral may be stored or processed.
(bb) GOOD STANDING CERTIFICATES - The Companies shall have delivered a
certificate of the appropriate official(s) of (i) the state of organization of
each Loan Party that is organized or incorporated under the laws of the District
of Columbia or any State or Territory of the United States of America and (ii)
each state of foreign qualification, if any, of each Loan Party, in each case as
to the subsistence in good standing of, and the payment of taxes by, such Loan
Party in such states.
(cc) THIRD PARTY DOCUMENTS - The Companies shall have delivered to the
Agent (i) a landlord waiver, in form and substance satisfactory to the Agent and
which may be included as a provision contained in the relevant lease, executed
by each landlord with respect to each lease to which a Loan Party is party and
(ii) a collateral access agreement or similar agreement, in form and substance
satisfactory to the Agent, executed by each Person who possesses Inventory and
Equipment of any Loan Party.
(dd) APPROVALS - All consents, authorizations and approvals of, and
filings and registrations with, and all other actions in respect of, any
Governmental Authority or other Person required in connection with the making of
the Term Loan or the conduct of the Loan Parties' business shall have been
obtained and shall be in full force and effect.
(ee) PAYMENT OF FEES, ETC. - The Borrowers shall have paid on or before
the date of this Agreement all fees, costs, expenses and taxes then payable
pursuant to Section 8.
(ff) LEGALITY - The making of the Term Loan shall not contravene any
law, rule or regulation applicable to the Agent or any Lender.
(gg) COMMITMENT LETTER. Each of the Companies shall have fully
complied, to the reasonable satisfaction of Agent, with all of the terms and
conditions of the Commitment Letter.
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SECTION 3. ACCOUNTS; INVENTORY
3.1 [INTENTIONALLY OMITTED]
3.2 (a) In furtherance of the continuing assignment and security
interest in each of the Companies' Accounts and Inventory, upon the creation of
Accounts and purchase or acquisition of Inventory, each of the Companies will at
Agent's request execute and deliver to Agent in such form and manner as Agent
may reasonably require, solely for Agent's convenience in maintaining records of
Collateral, such confirmatory schedules of Accounts and Inventory as Agent may
reasonably request, including, without limitation, weekly schedules of Accounts
and monthly schedules of Inventory, all in form and substance satisfactory to
Agent, and such other appropriate reports designating, identifying and
describing the Accounts and Inventory as Agent may reasonably request, and
provided further that Agent may request any such information more frequently,
from time to time, upon its reasonable prior request.
(b) In addition, each of the Companies shall furnish to Agent, no later
than Wednesday of each week, a certificate executed by an Authorized Officer of
each Company calculating such Company's Borrowing Base as of the close of
business on Friday of the immediately preceding week, supported by schedules
showing the derivation thereof, in form and substance reasonably satisfactory to
Agent.
(c) In addition, upon Agent's request, each of the Companies shall
provide Agent with copies of agreements with, or purchase orders from, such
Companies' customers, and copies of invoices to customers, proof of shipment or
delivery, access to their computers, electronic media and software programs
associated therewith (including any electronic records, contracts and
signatures) and such other documentation and information relating to said
Accounts and other Collateral as Agent may reasonably require. Failure to
provide Agent with any of the foregoing shall in no way affect, diminish, modify
or otherwise limit the security interests granted herein. Each of the Companies
hereby authorizes Agent to regard the Companies' (or a Company's) printed name
or rubber stamp signature on assignment schedules or invoices as the equivalent
of a manual signature by one of the Companies' authorized officers or agents.
3.3 Each of the Companies hereby represents and warrants that: each
Trade Account Receivable is based on an actual and bona fide sale and delivery
of Inventory or rendition of services to their respective customers, any other
Account is bona fide, made by the Companies in the ordinary course of their
business; upon completion of the procedures specified in this Agreement, each
Trade Account Receivable in respect of sales to the United States of America or
to any agency, department or division thereof is assignable to CIT under, and no
later than the day immediately following the Closing Date will have been
assigned to CIT in compliance with, the Assignment of Claims Act of 1940 and any
other applicable statute, rule or regulation (subject to terms of the Ableco/CIT
Intercreditor Agreement); the Inventory being sold, and the Trade Accounts
Receivable created, are the exclusive property of the Companies and are not and
shall not be subject to any Lien or
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consignment arrangement other than the Permitted Encumbrances; the invoices
evidencing such Trade Accounts Receivable are in the name of the Companies; and
the Companies' customers have accepted the Inventory or services, owe and are
obligated to pay the full amounts stated in the invoices according to their
terms, without dispute, offset, defense, counterclaim or contra, except for
disputes and other matters arising in the ordinary course of business with
respect to which the Companies have complied with the notification requirements
of Paragraph 3.5 of this Section 3. The Companies confirm to Agent and the
Lenders that any and all Taxes or fees relating to their business, their sales,
the Accounts or Inventory relating thereto, are their sole responsibility and
that same will be paid by the Companies when due, subject to Paragraph 7.8 of
Section 7 of this Agreement, and that none of said Taxes or fees represent a
Lien on or claim against the Accounts. The Companies hereby further represent
and warrant that they shall not acquire any Inventory on a consignment basis,
nor co-mingle their Inventory with any of their customers or any other person,
including pursuant to any ▇▇▇▇ and hold sale or otherwise, and that their
Inventory is marketable to their customers in the ordinary course of business of
the Companies, except as it may otherwise report in writing to Agent pursuant to
Paragraph 3.5 of this Section 3 from time to time. Each of the Companies also
represents and warrants that it is a duly organized and validly existing
corporation and in good standing under the laws of the jurisdiction of its
organization and is qualified in all states where the failure to so qualify
would have a Material Adverse Effect or impair such Company's ability to enforce
collection of Accounts due from customers residing in that state. The Companies
agree to maintain such books and records regarding Accounts and Inventory as
Agent may reasonably require and agree that the books and records of the
Companies will reflect Agent's and the Lenders' interest in the Accounts and
Inventory. All of the books and records of the Companies will be available to
Agent and the Lenders at normal business hours, including any records handled or
maintained for the Companies or any one of them by any other company or entity.
3.4 The Companies shall comply with all terms and provisions of the CIT
Financing Agreement (or any successor or replacement agreement acceptable to
Agent), provided that, if the CIT Financing Agreement shall have been terminated
and the Companies shall not have entered into a successor or replacement
agreement acceptable to Agent, then the Companies shall enter into control
agreements, lockbox agreements and other similar agreements in form and
substance reasonably satisfactory to Agent.
3.5 The Companies agree to notify Agent: (a) of any matters affecting
the value, enforceability or collectibility of any Account and of all customer
disputes, offsets, defenses, counterclaims, returns, rejections and all
reclaimed or repossessed merchandise or goods, and of any adverse effect in the
value of their Inventory, in their weekly and monthly collateral reports (as
applicable) provided to Agent hereunder, in such detail and format as Agent may
reasonably require from time to time and (b) promptly of any such matters which
are material, as a whole, to the Accounts and/or the Inventory. At the request
of Agent, the Companies agree to issue credit memoranda promptly (with
duplicates to Agent upon request after the occurrence of an Event of Default)
upon accepting returns or granting allowances. Upon the occurrence of an Event
of Default (which is not waived in writing by Agent), and on notice from Agent,
the Companies agree that all
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returned, reclaimed or repossessed merchandise or goods shall be set aside by
the Companies, marked with Agent's name (as secured party) and held by the
Companies for Agent's account, subject to the terms of the Ableco/CIT
Intercreditor Agreement.
3.6 In no event shall prior recourse to any Accounts or other security
granted to or by the Companies be a prerequisite to Agent's or any Lenders'
right to demand payment of any Obligation. Further, it is understood that
neither Agent nor any Lender shall have any obligation whatsoever to perform in
any respect any of the Companies' contracts or obligations relating to the
Accounts.
SECTION 4. TERM LOAN; MANDATORY PREPAYMENTS
4.1 [INTENTIONALLY OMITTED]
4.2 Subject to the terms and conditions, and in relying upon the
representations and warranties herein set forth, each Lender severally agrees to
make the Term Loan to the Companies on the Closing Date, in an aggregate
principal amount not to exceed such Lender's Term Loan Commitment.
4.3 The principal amount of the Term Loan shall be repaid to Agent, for
the benefit of the Lenders, in accordance with their Pro Rata Shares by or on
behalf of each Company in monthly principal installments of $625,000. The first
such installment shall be due and payable on the earlier of (a) August 1, 2003
and (b) the date on which the outstanding principal balance of the CIT Term Loan
is reduced to $3,500,000, PROVIDED THAT, in no event shall the first such
installment be due and payable prior to April 1, 2003, and the subsequent
installments shall be due and payable on the first Business Day of each month
thereafter until paid in full.
4.4 Notwithstanding any provision to the contrary in this Agreement or
any other Loan Document, the Obligations shall become due and payable in full on
the earlier of (i) the Final Maturity Date and (ii) in the event this Agreement
is terminated for any reason whatsoever, the effective date of such termination.
4.5 The Companies may, upon at least five (5) Business Days prior
written notice to Agent, prepay without penalty or premium, at its option, in
whole or in part, the Term Loan, provided that with each such prepayment, the
Companies shall pay accrued interest on the principal so prepaid to the date of
such prepayment. Each such prepayment shall be applied to the then last maturing
installments of principal of the Term Loan.
4.6 In the event the Companies have Surplus Cash in any Fiscal Year
ending after the Closing Date, the Companies must make a mandatory prepayment on
or before the 90th day of the immediately succeeding Fiscal Year, in an amount
equal to fifty percent (50%) of said Surplus Cash (the "Applied Surplus Cash"),
which shall be applied first, to the CIT Term Loan until paid in full,
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and then, to the Term Loan until paid in full, provided, however, that if (i) no
Event of Default shall have occurred and be continuing, (ii) after giving effect
to such payment there will be average Aggregate Availability of at least
$3,000,000 over the thirty (30) days preceding such payment, (iii) the principal
amount outstanding under the CIT Term Loan immediately prior to giving effect to
such payment is no more than $3,500,000, and (iv) the Companies' accounts
payable are at a level reasonably satisfactory to CIT, then, notwithstanding
that the CIT Term Loan has not been paid in full, the Applied Surplus Cash may
be applied first, to the Term Loan until paid in full, and then, to the
Obligations (as defined in the CIT Financing Agreement as in effect on the date
hereof) under the CIT Financing Agreement, in accordance with the terms and
provisions of the CIT Financing Agreement.
4.7 (a) In the event any Company or Subsidiary of any Company makes a
Disposition (other than a Disposition or refinancing of the real property of (x)
Norco located at 139 Ethan ▇▇▇▇▇ Highway, Ridgefield, Connecticut or (y) the
Parent located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇) the Net Cash Proceeds
of such Disposition shall be applied in accordance with this Paragraph 4.7 as
follows:
(i) If such Net Cash Proceeds result from a Disposition of all or
substantially all of the assets or Capital Stock of TCR, such Net Cash Proceeds
shall be applied (i) first, to the CIT Revolving Loans, in an amount, if any,
equal to the Borrowing Base applicable to TCR, based upon the Borrowing Base
certificate delivered by the Companies to CIT immediately prior to the closing
of such transaction, (ii) second, to the CIT Term Loan in the amount equal to
the sum of (a) (1) the gross book value of Accounts and Inventory disposed of in
such transaction, less (2) the amount applied to the CIT Revolving Loans in
clause (i) above, plus (b) an amount equal to the lesser of (1) $2,000,000 and
(2) the amount necessary to reduce the principal balance of the CIT Term Loan to
$2,500,000, (iii) third, to the CIT Revolving Loans in an amount (if any) to
cause Aggregate Availability to equal $3,000,000, (iv) fourth, so long as no
Event of Default will occur as a result thereof, to the Term Loan until paid in
full, and (v) thereafter, to the Obligations (as defined in the CIT Financing
Agreement as in effect on the date hereof) in accordance with the terms and
provisions of the CIT Financing Agreement;
(ii) If such Net Cash Proceeds result from a Disposition (other than as
set forth clause in clause (i) above in this Paragraph 4.7 and clauses (x) and
(y) in the first paragraph of this subparagraph (a)), such Net Cash Proceeds
shall be applied (i) first, to the CIT Term Loan in the amount needed, if any,
to reduce the outstanding principal of the CIT Term Loan to the sum of (a)
eighty-five percent (85%) of the orderly liquidation value of machinery and
equipment owned by the Companies and the Guarantors (as determined by the Agent
in its reasonable discretion), plus (b) fifty percent (50%) of the fair market
value of the Real Estate owned by the Companies and the Guarantors, minus (c)
the aggregate principal payments received by CIT in respect of the CIT Term Loan
from the Closing Date through the date of such Disposition, (ii) second, to the
CIT Revolving Loans in an amount (if any) to cause Aggregate Availability to
equal $3,000,000, (iii) third, so long as (a) no Event of Default will occur as
a result thereof, and (b) the principal amount outstanding
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under the CIT Term Loan immediately prior to giving effect to such payment is no
more than $3,500,000, to the payment of the Term Loan, and (iv) thereafter, to
the Obligations (as defined in the CIT Financing Agreement as in effect on the
date hereof) in accordance with the terms and provisions of the CIT Financing
Agreement, provided that, if an Event of Default (as defined in the CIT
Financing Agreement on the date hereof) shall have occurred and be continuing
under the CIT Financing Agreement, then such Net Cash Proceeds shall be applied
(x) first, to the CIT Term Loan until paid in full, (y) second, to the CIT
Revolving Loans, until paid in full and (z) thereafter, to the Term Loan until
paid in full. Notwithstanding anything to the contrary in this Agreement, after
the occurrence of an "Event of Default" (as defined in the CIT Financing
Agreement as in effect on the date hereof), any Net Cash Proceeds from a
Disposition applied to the CIT Revolving Loans shall permanently reduce the
Aggregate Borrowing Base in an equal amount.
(b) In the event of a Disposition referred to in clauses (x) or (y) in
the first paragraph of subparagraph (a) of this Paragraph 4.7, the Net Cash
Proceeds of such Disposition shall be applied as agreed upon by the Agent and
CIT in their sole discretion.
(c) The provisions of this Paragraph 4.7 shall not be deemed to be
implied consent to any Disposition otherwise prohibited by the terms and
conditions of this Agreement. Notwithstanding the foregoing, Agent agrees that
it will (i) promptly, and without further approval or condition, release its
lien on any Collateral of TransTechnology (GB) Limited or TransTechnology Brasil
Ltda., as applicable, upon the sale of all or substantially all of the Capital
Stock or assets of such entities or any dilutive issuance of the Capital Stock
of such entities whereby the Parent or any of its Subsidiaries beneficially owns
less than 20% of the Capital Stock of either such entity following the
completion of such issuance, and (ii) release its lien on any Collateral of TCR
upon the sale of all or substantially all of the Capital Stock or assets of TCR,
provided that, in each such case, (A) no Default or Event of Default shall have
occurred and be continuing either before or after giving effect to such
transaction, and (B) the Net Cash Proceeds received by the Parent or any other
Loan Party as a result of such transaction shall be applied in accordance with
the terms set forth in Paragraph 4.7(a) above, and provided further, that in the
case of the sale of all or substantially all of the Capital Stock or assets of
TCR, the Net Cash Proceeds received by the Parent as consideration for such sale
shall not be less than $10,000,000.
4.8 (a) Upon the issuance or incurrence by any Loan Party or any of its
Subsidiaries of any Indebtedness (other than Indebtedness referred to in clauses
(a), (c), (d), (e) and (f) of the definition of Permitted Indebtedness), or the
sale or issuance by any Loan Party or any of its Subsidiaries of any shares of
its Capital Stock, the Net Cash Proceeds received by such Person in connection
therewith shall be applied, first to the CIT Term Loan until paid in full, and
then to the Term Loan until paid in full, provided, however, that if (i) no
Event of Default shall have occurred and be continuing, (ii) after giving effect
to such payment there will be average Aggregate Availability of at least
$3,000,000 over the thirty (30) days preceding such payment, (iii) the principal
amount outstanding under the CIT Term Loan immediately prior to giving effect to
such payment is no more than $3,500,000, and (iv) the Companies' accounts
payable are at a level
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reasonably satisfactory to CIT, then notwithstanding that the CIT Term Loan has
not been paid in full, such Net Cash Proceeds may be applied first, to the Term
Loan until paid in full, and thereafter, to the Obligations (as defined in the
CIT Financing Agreement as in effect on the date hereof) under the CIT Financing
Agreement in accordance with the terms and provisions thereof. The provisions of
this subsection (a) shall not be deemed to be implied consent to any such
issuance, incurrence or sale otherwise prohibited by the terms and conditions of
this Agreement.
(b) Upon the receipt by any Loan Party or any of its Subsidiaries of
any Extraordinary Receipts, the Companies shall apply such Extraordinary
Receipts, net of any reasonable expenses incurred in collecting such
Extraordinary Receipts, first to the CIT Term Loan until paid in full, and then
to the Term Loan until paid in full, provided, however, that if (i) no Event of
Default shall have occurred and be continuing, (ii) after giving effect to such
payment there will be average Aggregate Availability of at least $3,000,000 over
the thirty (30) days preceding such payment, (iii) the principal amount
outstanding under the CIT Term Loan immediately prior to giving effect to such
payment is no more than $3,500,000, and (iv) the Companies' accounts payable are
at a level reasonably satisfactory to CIT, then notwithstanding that the CIT
Term Loan has not been paid in full, such Extraordinary Receipts may be applied
first, to the Term Loan until paid in full, and thereafter to the Obligations
(as defined in the CIT Financing Agreement as in effect on the date hereof)
under the CIT Financing Agreement in accordance with the terms and provisions
thereof.
4.9 Each such prepayment in respect of the Term Loan under this
Agreement shall be applied to the then last maturing installments of principal
of the Term Loan with respect to the Company or Companies required to make such
prepayment, and at Agent's discretion, may be applied first to accrued interest
on the Term Loan to the date of such prepayment.
4.10 Each of the Companies hereby authorizes Agent to charge its Loan
Account with the amount of all Obligations owing under this Section 4 as such
amounts become due. The Companies confirm that any charges which Agent may so
make to the Loan Account as herein provided will be made as an accommodation to
the Companies and solely at Agent's discretion.
SECTION 5. [INTENTIONALLY OMITTED]
SECTION 6. COLLATERAL
6.1 As security for the prompt payment in full of all Obligations, each
of the Companies hereby pledges and grants to Agent, for the benefit of the
Lenders, a continuing general Lien upon, and security interest in, all of their
assets and properties, wherever located and whether now or hereafter existing,
tangible or intangible (collectively, the "Collateral") including, without
limitation, to the extent any Company has any right, title or interest therein,
the following:
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(a) Accounts;
(b) Commercial Tort Claims specified on Schedule 1A hereto;
(c) Inventory;
(d) General Intangibles (including, without limitation, all Payment
Intangibles);
(e) Documents of Title;
(f) Other Collateral;
(g) Equipment;
(h) Fixtures; and
(i) Real Estate, other than Real Estate set forth on Schedule 6.1
hereto.
6.2 The security interests granted hereunder shall extend and attach
to:
(a) All Collateral which is owned by any of the Companies or in which
the Companies have any interest, whether held by the Companies or others for
their account, and, if any Collateral is Equipment, whether the Companies'
interest in such Equipment is as owner, finance lessee or conditional vendee;
(b) All Equipment, whether the same constitutes personal property or
fixtures, including, but without limiting the generality of the foregoing, all
dies, jigs, tools, benches, molds, tables, accretions, component parts thereof
and additions thereto, as well as all accessories, motors, engines and auxiliary
parts used in connection with, or attached to, the Equipment; and
(c) All Inventory and any portion thereof which may be returned,
rejected, reclaimed or repossessed by any of Agent, any Lender or the Companies
from the Companies' customers, as well as to all supplies, goods, incidentals,
packaging materials, labels and any other items which contribute to the finished
goods or products manufactured or processed by the Companies, or to the sale,
promotion or shipment thereof.
6.3 Each of the Companies agrees to safeguard, protect and hold all
Inventory for Agent and the Lenders' account and make no disposition thereof
except as otherwise permitted by this Agreement. The Companies represent and
warrant that Inventory will be sold and shipped by the Companies to their
customers only in the ordinary course of the Companies' business, and then only
on open account and on commercially reasonable terms, provided that, absent the
prior written consent of Agent, the Companies shall not sell Inventory on a
consignment basis nor retain any Lien or security interest in any sold
Inventory. Upon the sale, exchange, or other disposition of Inventory, as herein
provided, the security interest in the Inventory provided for herein shall,
without break in
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continuity and without further formality or act, continue in, and attach to, all
proceeds, including any instruments for the payment of money, Trade Accounts
Receivable, Documents of Title, shipping documents, chattel paper and all other
cash and non-cash proceeds of such sale, exchange or disposition. As to any such
sale, exchange or other disposition, Agent and the Lenders shall have all of the
rights of an unpaid seller, including stoppage in transit, replevin, rescission
and reclamation. The Companies hereby agree, subject to the other provisions
herein including, without limitation, Section 4, and subject to the terms and
provisions of the Ableco/CIT Intercreditor Agreement, to immediately forward any
and all proceeds of Collateral to the Depository Account, and to hold any such
proceeds (including any notes and instruments), in trust for Agent pending
delivery to CIT. Irrespective of Agent's and the Lenders' perfection status in
any and all of the General Intangibles, including, without limitations, any
Patents, Trademarks, Copyrights or licenses with respect thereto, each of the
Companies hereby irrevocably grants to Agent, for the benefit of the Lenders, a
royalty free license to sell, or otherwise dispose or transfer, in accordance
with Paragraph 10.3 of Section 10 of this Agreement, and the applicable terms
hereof, of any of the Inventory upon the occurrence of an Event of Default which
has not been waived in writing by Agent.
6.4 Each of the Companies agrees at its own cost and expense to keep
the Equipment in as good and substantial repair and condition as the same is now
or at the time the Lien and security interest granted herein shall attach
thereto, reasonable wear and tear excepted, making any and all repairs and
replacements when and where necessary. Each of the Companies also agrees to
safeguard, protect and hold all Equipment in accordance with the terms hereof
and subject to Agent's security interest.
6.5 The rights and security interests granted to Agent and the Lenders
hereunder are to continue in full force and effect, notwithstanding the
termination of this Agreement or the fact that the Loan Account may from time to
time be temporarily in a credit position, until the final payment in full to
Agent and the Lenders of all Obligations and the termination of this Agreement.
Any delay, or omission by Agent or any Lender to exercise any right hereunder
shall not be deemed a waiver thereof, or be deemed a waiver of any other right,
unless such waiver shall be in writing and signed by Agent. A waiver on any one
occasion shall not be construed as a bar to, or waiver of, any right or remedy
on any future occasion.
6.6 Notwithstanding Agent 's security interest in the Collateral and to
the extent that the Obligations are now or hereafter secured by any assets or
property other than the Collateral or by the guarantee, endorsement, assets or
property of any other Person, Agent shall have the right in its sole discretion
to determine which rights, Liens, security interests or remedies Agent shall at
any time pursue, foreclose upon, relinquish, subordinate, modify or take any
other action with respect to, without in any way modifying or affecting any of
them, or any of Agent's or any Lender's rights hereunder.
6.7 Any balances to the credit of the Companies, or any one of them,
and any other property or assets of the Companies, or any one of them, in the
possession or control of Agent and
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the Lenders may be held by such Person as security for any Obligations and
applied in whole or partial satisfaction of such Obligations when due. The Liens
and security interests granted herein, and any other Lien or security interest
Agent may have in any other assets of the Companies, shall secure payment and
performance of all now existing and future Obligations. Agent may in its
discretion charge any or all of the Obligations to the Loan Account when due.
6.8 Each of the Companies possess all General Intangibles and rights
thereto necessary to conduct their business as conducted as of the Closing Date
and the Companies shall maintain their rights in, and the value of, the
foregoing in the ordinary course of their business, including, without
limitation, by making timely payment with respect to any applicable licensed
rights and any registered or applied for intellectual property. Each Company
shall deliver to Agent, and/or shall cause the appropriate party to deliver to
Agent, a duly executed and delivered Assignment for Security (Trademarks),
Assignment for Security (Patents) and Assignment for Security (Copyrights) in
the forms attached hereto as Exhibits A, B and C, respectively, and shall
deliver to Agent from time to time such other Security Agreements and
assignments of security interest with respect to General Intangibles (now or
hereafter acquired) of such Company as Agent shall require to obtain valid first
Liens thereon (subject to Permitted Encumbrances). In furtherance of the
foregoing, the Companies shall provide timely notice to Agent of any additional
Patents, Trademarks, tradenames, service marks, Copyrights, brand names, trade
names, logos and other trade designations acquired or applied for subsequent to
the Closing Date and the Companies shall execute such documentation as Agent may
reasonably require to obtain and perfect its Lien thereon. The Companies hereby
confirm that they shall deliver, or cause to be delivered, any pledged stock
issued subsequent to the Closing Date to Agent or its designee in accordance
with the applicable terms of the Pledge Agreement and prior to such delivery,
shall hold any such stock in trust for Agent. Each of the Companies hereby
irrevocably grants upon the occurrence of an Event of Default to Agent a
royalty-free, non-exclusive license to use, assign, sell, license or sublicense
any General Intangibles (whether now owned or hereafter acquired by any
Company), including tradenames, Trademarks, Copyrights, Patents, licenses, and
any other proprietary and intellectual property rights and any and all right,
title and interest in any of the foregoing, including, without limitation, the
right to: (i) advertise for sale and sell or transfer any Inventory bearing any
of the General Intangibles, and (ii) make, assemble, prepare for sale or
complete, or cause others to do so, any applicable raw materials or Inventory
bearing any of the General Intangibles, including use of the Equipment and Real
Estate for the purpose of completing the manufacture of unfinished goods, raw
materials or work-in-process comprising Inventory, and apply the proceeds
thereof to the Obligations hereunder, all as further set forth in this Agreement
and irrespective of Agent's Lien and perfection in any General Intangibles. Each
Company will cause to be taken all necessary steps in any proceeding before the
United States Patent and Trademark Office and the United States Copyright Office
or any similar office or agency in any other country or political subdivision
thereof to maintain each registration of Trademarks, Patents and Copyrights. If
any Trademarks, Copyrights, Patents, licenses or other intellectual property of
any Company is infringed, misappropriated, diluted or otherwise violated in any
material respect by a third party, the Companies shall (x) upon learning of such
infringement, misappropriation, dilution or other violation, promptly notify
Agent and (y) to the extent any Company shall deem appropriate
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under the circumstances, promptly ▇▇▇ for infringement, misappropriation,
dilution or other violation, seek injunctive relief where appropriate and
recover any and all damages for such infringement, misappropriation, dilution or
other violation, or take such other actions as the Companies shall deem
appropriate under the circumstances to protect such Trademarks, Copyrights,
Patents, licenses or other intellectual property. Upon the occurrence and during
the continuance of an Event of Default, (A) no Company may abandon or otherwise
permit any Trademarks, Copyrights and Patents to become invalid without the
prior written consent of Agent, and (B) if any Trademarks, Copyrights or Patents
are infringed, misappropriated, diluted or otherwise violated in any material
respect by a third party, each Company will take such action as Agent shall deem
appropriate under the circumstances to protect such intellectual property. If at
any time after the date hereof, any Company acquires or holds any Commercial
Tort Claim, such Company shall immediately notify Agent in a writing signed by
such Company setting forth a brief description of such Commercial Tort Claim and
grant to Agent, for the benefit of the Lenders, a security interest therein and
in the proceeds thereof, which writing shall be in form and substance
satisfactory to Agent.
6.9 This Agreement and the obligation of the Companies to perform all
of their covenants and obligations hereunder are further secured by the
Mortgages.
6.10 The Companies shall give to Agent, for the benefit of the Lenders,
from time to time such mortgage(s), deed(s) of trust or assignment(s) on the
Real Estate or real estate acquired after the date hereof as Agent shall require
to obtain a valid first Lien thereon subject only to those exceptions of title
as set forth in future title insurance policies that are satisfactory to Agent.
6.11 The Company agrees that all chattel paper created by the Company
will be marked: "This chattel paper has been assigned to The CIT Group/Business
Credit, Inc. and Ableco Finance LLC, as agent. Further assignment of this
chattel paper violates the rights of The CIT Group/Business Credit, Inc. and
Ableco Finance LLC, as agent."
6.12 At any time any Collateral with a book value in excess of $100,000
(when aggregated with all other Collateral at the same location) is located on
any real property of a Loan Party (whether such real property is now existing or
acquired after the Closing Date) which is not owned by a Loan Party, the
Companies shall caused to be obtained written subordinations or waivers, in form
and substance satisfactory to Agent, of all present and future Liens to which
the owner or lessor of such premises may be entitled to assert against the
Collateral.
6.13 The Companies shall, or shall cause their Subsidiaries to, within
sixty (60) days of the Closing Date to provide evidence satisfactory to the
Agent that the Federal tax lien filed on April 16, 2002, in the amount of
$29,833.44 against the Parent, TransTechnology International Corporation, a
Delaware corporation, and ▇▇▇▇▇▇, Inc., and as set forth on Schedule 2 attached
hereto, shall have been released, which evidence shall include, without
limitation, a UCC search result satisfactory to Agent indicating that such Lien
shall have been terminated.
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SECTION 7. REPRESENTATIONS, WARRANTIES AND COVENANTS
7.1 Each of the Companies hereby jointly and severally warrants,
represents and covenants that: (a) the fair value of their respective Total
Assets exceeds the book value of the Total Liabilities; (b) each Company is
generally able to pay its debts as they become due and payable; and (c) each
Company does not have unreasonably small capital to carry on its business as it
is currently conducted absent extraordinary and unforeseen circumstances. The
Companies further warrant and represent that: (i) Schedule 1A hereto correctly
and completely sets forth for each Loan Party, its (A) chief executive office,
(B) state of incorporation, (C) Collateral locations, (D) exact legal name, (E)
organizational identification number, and (F) Commercial Tort Claims and (G)
other information required on said Schedule; (ii) except for the Permitted
Encumbrances, after filing of financing statements in the applicable filing
clerks' offices at the locations set forth in Schedule 1B, this Agreement
creates a valid, perfected and first priority security interest in the
Collateral and the security interests granted herein constitute and shall at all
times constitute the first and only Liens on the Collateral; (iii) except for
the Permitted Encumbrances, the Companies are, or will be, at the time
additional Collateral is acquired by them, the absolute owner of the Collateral
with full right to pledge, sell, consign, transfer and create a security
interest therein, free and clear of any and all claims or Liens in favor of
others; (iv) the Companies will, at their expense, forever warrant and, at
Agent's request, defend the same from any and all claims and demands of any
other Person other than a holder of a Permitted Encumbrance; (v) the Companies,
or any one of them, will not grant, create or permit to exist, any Lien upon, or
security interest in, the Collateral, or any proceeds thereof, in favor of any
other Person other than the holders of the Permitted Encumbrances; and that the
Equipment does not comprise a part of any Company's Inventory; and (vi) the
Equipment is and will only be used by the Companies in their business and will
not be held for sale or lease, or removed from their premises, or otherwise
disposed of by the Companies except as otherwise permitted in this Agreement.
Each of the Companies further represent and warrant that the proceeds of the
Term Loan shall solely be used (i) to refinance existing secured indebtedness of
the Parent and certain of its Subsidiaries; (ii) to pay fees and expenses
related to this Agreement and the other Loan Documents; and (iii) to fund the
Companies ongoing working capital requirements.
7.2 Each of the Companies agrees to, and cause its Subsidiaries to,
maintain books and records pertaining to the Collateral in accordance with GAAP
and in such additional detail, form and scope as Agent shall reasonably require.
Each Company shall permit, and cause each of its Subsidiaries to permit, the
agents and representatives of Agent, at any time and from time to time during
normal business hours, at the expense of the Companies, to examine and make
copies of and abstracts from its records and books of account, to visit and
inspect its properties, to verify materials, leases, notes, accounts receivable,
deposit accounts and its other assets, to conduct audits, physical counts,
valuations, appraisals, Phase I Environmental Site Assessments (and, if
requested by Agent based upon the results of any such Phase I Environmental Site
Assessment, a Phase II Environmental Site Assessment) or examinations and to
discuss its affairs, finances and accounts with any of its directors, officers,
managerial employees, independent accountants or any of its other
representatives. In furtherance of the foregoing, each Company hereby authorizes
its independent
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accountants, and the independent accountants of each of its Subsidiaries, to
discuss the affairs, finances and accounts of such Person (independently or
together with representatives of such Person) with the agents and
representatives of Agent in accordance with this Paragraph 7.2).
7.3 Each Company shall maintain and preserve, and cause each of its
Subsidiaries to maintain and preserve, all of its properties which are necessary
or useful in the proper conduct of its business in good working order and
condition, ordinary wear and tear excepted, and comply, and cause each of its
Subsidiaries to comply, at all times with the provisions of all leases to which
it is a party as lessee or under which it occupies property, so as to prevent
any loss or forfeiture thereof or thereunder. Each Company shall obtain,
maintain and preserve, and cause each of its Subsidiaries to obtain, maintain
and preserve, and take all necessary action to timely renew, all permits,
licenses, authorizations, approvals, entitlements and accreditations which are
necessary or useful in the proper conduct of its business except where the
failure to do so would not have a Material Adverse Effect. Each of the Companies
hereby represents and warrants that (i) a certificate of dissolution for ▇▇▇▇▇▇,
Inc. has been filed in the appropriate filing office in Delaware on July 3, 2002
and for Trans Technology Systems and Services, Inc. in the appropriate filing
office in Michigan on February 28, 2002, (ii) each of such Subsidiaries has no
assets and no liabilities and (iii) upon receipt of a tax clearance certificate
from the applicable State, each such Subsidiary shall cease to exist. Each of
the Companies hereby represents and warrants that (a) neither SSP Industries, a
California corporation, nor SSP International Sales, Inc., a California
corporation, has any assets or liabilities as of the date hereof and (b) Rancho
TransTechnology Corporation, a California corporation has no assets or
liabilities other than the Rancho TTC Property.
7.4 Each of the Companies agrees to afford Agent thirty (30) days prior
written notice of any change in the location of any Collateral, other than to
locations, that as of the Closing Date, are known to Agent and at which Agent
has filed financing statements and otherwise fully perfected its Liens thereon,
subject to the requirement set forth in Paragraph 6.12 hereof. Each of the
Companies are also to advise Agent promptly, in sufficient detail, of any
material adverse change relating to the type, quantity or quality of the
Collateral or on the security interests granted to Agent therein.
7.5 Each of the Companies agrees to: (a) execute and deliver to Agent,
from time to time, solely for Agent's convenience in maintaining a record of the
Collateral, such written statements, and schedules as Agent may reasonably
require, designating, identifying or describing the Collateral; and (b) provide
Agent, on request, with an appraisal of the Inventory, Real Estate, machinery
and/or Equipment, which appraisal shall be at the Companies' expense and
otherwise acceptable to Agent. Any failure, however, to promptly give Agent such
statements, or schedules shall not affect, diminish, modify or otherwise limit
Agent 's security interests in the Collateral.
7.6 Each of the Companies agrees to comply with, and to cause its
subsidiaries to comply with, the requirements of all state and federal laws in
order to grant to Agent, for the benefit of the Lenders, a valid and perfected
first priority security interests in the Collateral, subject only to the
Permitted Encumbrances. Agent is hereby authorized by the Companies to file
(including pursuant
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to the applicable terms of the UCC) from time to time any financing statements,
continuations or amendments covering the Collateral. The Companies hereby
consent to and ratify any and all execution and/or filing of financing
statements on or prior to the Closing Date by Agent. The Companies agree to do
whatever Agent may reasonably request, from time to time, by way of: (a) filing
notices of Liens, financing statements, amendments, renewals and continuations
thereof; (b) cooperating with Agent's agents and employees; (c) keeping
Collateral records; (d) transferring proceeds of Collateral to Agent's
possession; and (e) performing such further acts as Agent may reasonably require
in order to effect the purposes of this Agreement and any of the other Loan
Documents, including but not limited to, obtaining control agreements with
respect to deposit accounts and/or Investment Property.
7.7 (a) Each of the Companies shall, and shall cause each of its
Subsidiaries, to maintain insurance on all of its properties, including, without
limitation, its Real Estate, Equipment and Inventory, under such policies of
insurance, with such insurance companies, in such reasonable amounts and
covering such insurable risks as are at all times reasonably satisfactory to
Agent. All such insurance policies, subject to the rights of any holders of
Permitted Encumbrances holding claims senior to Agent, are to be made payable to
Agent, in case of loss, under a standard non-contributory "mortgagee", "lender"
or "secured party" clause and are to contain such other provisions as Agent may
require to fully protect Agent's interest in such properties and to any payments
to be made under such policies. All certificates of insurance and original
policies or true copies thereof, are to be delivered to Agent, premium prepaid,
with the loss payable endorsement in Agent's favor, and shall provide for not
less than thirty (30) days prior written notice to Agent of the exercise of any
right of cancellation. At the Companies' request, or if the Companies fail to
maintain such insurance, Agent may arrange for such insurance, but at the
Companies' expense and without any responsibility on Agent's part for: (i)
obtaining the insurance; (ii) the solvency of the insurance companies; (iii) the
adequacy of the coverage; or (iv) the collection of claims. Upon the occurrence
of an Event of Default which is not waived in writing or otherwise cured by the
Companies in accordance with the terms of this Agreement, Agent shall, subject
to the rights of any holders of Permitted Encumbrances holding claims senior to
Agent, have the sole right, in the name of Agent or the Companies or any of
them, to file claims under any insurance policies, to receive, receipt and give
acquittance for any payments that may be payable thereunder, and to execute any
and all endorsements, receipts, releases, assignments, reassignments or other
documents that may be necessary to effect the collection, compromise or
settlement of any claims under any such insurance policies.
(b) In the event the Companies or any one of them fails to provide
Agent with timely evidence, acceptable to Agent, of its maintenance of insurance
coverage required pursuant to Paragraph 7.7(a) above, Agent may purchase, at the
Companies' expense, insurance to protect Agent's interests in the Collateral.
The insurance acquired by Agent may, but need not, protect the Companies'
interest in the Collateral, and therefore such insurance may not pay claims
which the Companies may have with respect to the Collateral or pay any claim
which may be made against the Companies in connection with the Collateral. In
the event Agent purchases, obtains or acquires
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insurance covering all or any portion of the Collateral, the Companies shall be
responsible for all of the applicable costs of such insurance, including
premiums, interest, fees and any other charges with respect thereto, until the
effective date of the cancellation or the expiration of such insurance. Agent
may charge all of such premiums, fees, costs, interest and other charges to the
Companies' Loan Account. Each of the Companies hereby acknowledges that the
costs of the premiums of any insurance acquired by Agent may exceed the costs of
insurance which the Companies may be able to purchase on their own. In the event
that Agent purchases such insurance, Agent will notify the Companies or the
applicable Company of said purchase within thirty (30) days of the date of such
purchase. If, within thirty (30) days after the date of such notice, the
Companies provide Agent with proof that the Companies had the insurance coverage
required pursuant to 7.7(a) above (in form and substance satisfactory to Agent)
as of the date on which Agent purchased insurance and the Companies continued at
all times to have such insurance, then Agent agrees to cancel the insurance
purchased by Agent.
7.8 (a) Each of the Companies shall, and shall cause each of its
Subsidiaries, to pay, when due, all Taxes, including sales taxes, assessments,
claims and other charges lawfully levied or assessed upon the Companies, their
Subsidiaries or the Collateral unless such Taxes are being diligently contested
in good faith by appropriate proceedings and adequate reserves are established
in accordance with GAAP. Notwithstanding the foregoing, if any Lien shall be
filed or claimed thereunder: (a) for Taxes due the United States of America, or
(b) which in Agent's opinion might create a valid obligation having priority
over the rights granted to Agent herein (exclusive of Real Estate), such Lien
shall not be deemed to be a Permitted Encumbrance hereunder and the Companies
shall immediately pay such tax and remove the Lien of record. If the Companies
or any one of them fails to do so promptly, then at Agent's election, upon the
occurrence of a Default or Event of Default, imminent risk of seizure, filing of
any priority Lien, forfeiture, or sale of the Collateral, Agent may, but shall
not be obligated to, pay Taxes on the Companies' behalf, and the amount thereof
shall be an Obligation secured hereby and due on demand.
(b) Each of the Companies represents and warrants that no Loan Party
or any of its ERISA Affiliates nor any fiduciary of any Employee Plan has
engaged in a transaction within the meaning of Section 4069 of ERISA.
7.9 Each of the Companies shall, and shall cause each of its
Subsidiaries: (a) to comply with all acts, rules, regulations and orders of any
legislative, administrative or judicial body or official, which the failure to
comply with would have a material and adverse impact on the Collateral, or any
material part thereof, or on the business or operations of the Companies, their
Subsidiaries or any one of them, provided that the Companies may contest any
acts, rules, regulations, orders and directions of such bodies or officials in
any reasonable manner which will not, in Agent's reasonable opinion, materially
and adversely effect Agent's or any Lender's rights or priority in the
Collateral; and (b) comply with all environmental statutes, acts, rules,
regulations or orders as presently existing or as adopted or amended in the
future, applicable to the Collateral, the ownership and/or use of their real
property and operation of their business, which the failure to
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comply with would have a material and adverse impact on the Collateral, or any
material part thereof, or on the operation of the business of the Companies or
any one of them.
7.10 Until termination of this Agreement and payment and satisfaction
of all Obligations due hereunder, the Companies agree that, unless the Required
Lenders shall have otherwise consented in writing, each of the Companies will
furnish to Agent and each Lender:
(a) as soon as available and in any event within 45 days after the end
of each Fiscal Quarter commencing with the Fiscal Quarter ended June 30, 2002,
consolidated and consolidating balance sheets, consolidated and consolidating
statements of operations and retained earnings and consolidated and
consolidating statements of cash flows of the Parent and its Subsidiaries as at
the end of such quarter, and for the period commencing at the end of the
immediately preceding Fiscal Year and ending with the end of such quarter,
setting forth in each case in comparative form the figures for the corresponding
date or period of the immediately preceding Fiscal Year, all in reasonable
detail and certified by an Authorized Officer of the Parent as fairly
presenting, in all material respects, the financial position of the Parent and
its Subsidiaries as of the end of such quarter and the results of operations and
cash flows of the Parent and its Subsidiaries for such quarter, in accordance
with GAAP applied in a manner consistent with that of the most recent audited
financial statements of the Parent and its Subsidiaries furnished to Agent and
each Lender, subject to normal year-end adjustments;
(b) as soon as available, and in any event within 90 days after the end
of each Fiscal Year of the Parent and its Subsidiaries, consolidated and
consolidating balance sheets, consolidated and consolidating statements of
operations and retained earnings and consolidated and consolidating statements
of cash flows of the Parent and its Subsidiaries as at the end of such Fiscal
Year, setting forth in each case in comparative form the corresponding figures
for the immediately preceding Fiscal Year, all in reasonable detail and prepared
in accordance with GAAP, and accompanied by a report and an unqualified opinion,
prepared in accordance with generally accepted auditing standards, of a "big
four" independent certified public accounting firm (which opinion shall be
without (A) a "going concern" or like qualification or exception, (B) any
qualification or exception as to the scope of such audit, or (C) any
qualification which relates to the treatment or classification of any item and
which, as a condition to the removal of such qualification, would require an
adjustment to such item, the effect of which would be to cause any noncompliance
with the provisions of Paragraph 7.20), together with a written statement of
such accountants (1) to the effect that, in making the examination necessary for
their certification of such financial statements, they have not obtained any
knowledge of the existence of an Event of Default or a Default and (2) if such
accountants shall have obtained any knowledge of the existence of an Event of
Default or such Default, describing the nature thereof;
(c) as soon as available, and in any event within 30 days after the end
of each fiscal month of the Parent and its Subsidiaries commencing July 2002,
internally prepared consolidated and consolidating balance sheets, consolidated
and consolidating statements of operations and retained
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earnings and consolidated and consolidating statements of cash flows as at the
end of such fiscal month, and for the period commencing at the end of the
immediately preceding Fiscal Year and ending with the end of such fiscal month,
all in reasonable detail and certified by an Authorized Officer of the Parent as
fairly presenting, in all material respects, the financial position of the
Parent and its Subsidiaries as at the end of such fiscal month and the results
of operations, retained earnings and cash flows of the Parent and its
Subsidiaries for such fiscal month, in accordance with GAAP applied in a manner
consistent with that of the most recent audited financial statements furnished
to the Agent and the Lenders, subject to normal year-end adjustments;
(d) simultaneously with the delivery of the financial statements of the
Parent and its Subsidiaries required by clauses (a), (b) and (c) of this
Paragraph 7.10, a certificate of an Authorized Officer of the Parent (i) stating
that such Authorized Officer has reviewed the provisions of this Agreement and
the other Loan Documents and has made or caused to be made under his or her
supervision a review of the condition and operations of the Parent and its
Subsidiaries during the period covered by such financial statements with a view
to determining whether the Parent and its Subsidiaries were in compliance with
all of the provisions of this Agreement and such Loan Documents at the times
such compliance is required hereby and thereby, and that such review has not
disclosed, and such Authorized Officer has no knowledge of, the existence during
such period of an Event of Default or Default or, if an Event of Default or
Default existed, describing the nature and period of existence thereof and the
action which the Parent and its Subsidiaries propose to take or have taken with
respect thereto and (ii) attaching a schedule showing the calculations specified
in Paragraph 7.20;
(e) as soon as available and in any event within 10 days after the end
of each fiscal month of the Parent and its Subsidiaries commencing August 2002
reports in form and detail satisfactory to Agent and certified by an Authorized
Officer of the Parent as being accurate and complete (i) listing all Trade
Accounts Receivable of the Loan Parties as of such day, which shall include the
amount and age of each such Trade Account Receivable, showing separately those
which are more than 30, 60, 90 and 120 days old and a description of all Liens,
set-offs, defenses and counterclaims with respect thereto, together with a
reconciliation of such schedule with the schedule delivered to Agent pursuant to
this clause (e)(i) for the immediately preceding fiscal month, the name and
mailing address of each account debtor with respect to each such Trade Account
Receivable and such other information as Agent may reasonably request, (ii)
listing all accounts payable of the Loan Parties as of each such day which shall
include the amount and age of each such account payable, the name and mailing
address of each account creditor and such other information as Agent may
reasonably request, and (iii) listing all Inventory of the Loan Parties as of
each such day, and containing a breakdown of such Inventory by type and amount,
the cost and the current market value thereof (by location), the date of
acquisition, the warehouse and production facility location and such other
information as Agent may reasonably request, all in detail and in form
reasonably satisfactory to Agent;
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(f) (i) on or before the thirtieth (30th) day of each Fiscal Year,
financial projections, supplementing and superseding the financial projections
for such period referred to in Paragraph 2.1(t), prepared on a monthly basis and
otherwise in form and substance reasonably satisfactory to Agent, for the
immediately succeeding Fiscal Year for the Parent and its Subsidiaries and (ii)
on or before the forty-fifth (45th) day of each Fiscal Quarter, financial
projections, prepared on a monthly basis and otherwise in form and substance
reasonably satisfactory to Agent, for each remaining quarterly period in such
Fiscal Year, all such financial projections to be reasonable, to be prepared on
a reasonable basis and in good faith, and to be based on assumptions believed by
the Parent to be reasonable at the time made and from the best information then
available to the Parent;
(g) promptly after submission to any Governmental Authority, all
documents and information furnished to such Governmental Authority in connection
with any investigation of any Loan Party other than routine inquiries by such
Governmental Authority, provided that such disclosure to Agent would not violate
the Companies ability to secure confidential treatment from the Governmental
Authority of the submitted information;
(h) as soon as possible, and in any event within three (3) Business
Days after the occurrence of an Event of Default or Default or the occurrence of
any event or development that could have a Material Adverse Effect, the written
statement of an Authorized Officer of the Parent setting forth the details of
such Event of Default or Default or other event or development having a Material
Adverse Effect and the action which the affected Loan Party proposes to take
with respect thereto;
(i) (A) as soon as possible and in any event within ten (10) days after
any Loan Party or any ERISA Affiliate thereof has actual knowledge that (1) any
Reportable Event with respect to any Employee Plan has occurred, (2) any other
Termination Event with respect to any Employee Plan has occurred, or (3) an
accumulated funding deficiency has been incurred or an application has been made
to the Secretary of the Treasury for a waiver or modification of the minimum
funding standard (including installment payments) or an extension of any
amortization period under Section 412 of the Internal Revenue Code with respect
to an Employee Plan, a statement of an Authorized Officer of the Parent setting
forth the details of such occurrence known to such officer and the action, if
any, which such Loan Party or such ERISA Affiliate proposes to take with respect
thereto, (B) promptly and in any event within three days after receipt thereof
by any Loan Party or any ERISA Affiliate thereof from the PBGC, copies of each
notice received by any Loan Party or any ERISA Affiliate thereof of the PBGC's
intention to terminate any Plan or to have a trustee appointed to administer any
Plan, (C) promptly and in any event within ten (10) days after the filing
thereof with the Internal Revenue Service if requested by Agent, copies of each
Schedule B (Actuarial Information) to the annual report (Form 5500 Series) with
respect to each Employee Plan and Multiemployer Plan that is filed or required
to be filed by any Loan Party, (D) promptly and in any event within ten (10)
days after any Loan Party or any ERISA Affiliate thereof has actual knowledge
that a required installment payment within the meaning of Section 412 of the
Internal Revenue Code has not been made when due with respect to an Employee
Plan, notice of such fact, (E) promptly and in any event within three (3) days
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after receipt thereof by any Loan Party or any ERISA Affiliate thereof from a
sponsor of a Multiemployer Plan or from the PBGC, a copy of each notice received
by any Loan Party or any ERISA Affiliate thereof concerning the imposition or
amount of withdrawal liability under Section 4202 of ERISA or indicating that
such Multiemployer Plan may enter reorganization status under Section 4241 of
ERISA, and (F) promptly and in any event within ten (10) days after any Loan
Party or any ERISA Affiliate thereof sends notice of a plant closing or mass
layoff (as defined in WARN) to employees, copies of each such notice sent by
such Loan Party or such ERISA Affiliate thereof;
(j) promptly after the commencement thereof but in any event not later
than five (5) days after service of process with respect thereto on, or the
obtaining of knowledge thereof by, any Loan Party, notice of each action, suit
or proceeding before any court or other Governmental Authority or other
regulatory body or any arbitrator which, if adversely determined, could have a
Material Adverse Effect;
(k) as soon as possible and in any event within five (5) days after
execution, receipt or delivery thereof, copies of any material notices that any
Loan Party executes or receives in connection with any Material Contract;
(l) as soon as possible and in any event within five (5) days after
execution, receipt or delivery thereof, copies of any material notices that any
Loan Party executes or receives in connection with the sale or other Disposition
of the Capital Stock of, or all or substantially all of the assets of, any Loan
Party;
(m) promptly after the sending or filing thereof, copies of all
statements, reports and other information any Loan Party sends to any holders of
its Indebtedness or its securities or files with the Securities and Exchange
Commission or any national (domestic or foreign) securities exchange;
(n) promptly upon receipt thereof, copies of all financial reports
(including, without limitation, management letters), if any, submitted to any
Loan Party by its auditors in connection with any annual or interim audit of the
books thereof;
(o) promptly upon request, such other information concerning the
condition or operations, financial or otherwise, of any Loan Party as Agent may
from time to time reasonably request;
(p) within forty-five (45) days following the Closing Date, a
certificate of an Authorized Officer of the Parent (i) annexing thereto the
acknowledgments of the appropriate contracting officers and disbursing officers
received with respect to the notices and assignments previously delivered to
such contracting officers and disbursing officers pursuant to the terms of the
CIT Financing Agreement and (ii) certifying that such acknowledgements relate to
no less than 50% of the aggregate dollar amount of all Trade Accounts Receivable
of the Companies with respect to which the United States of America or any
agency, division or department thereof is the account debtor as of such date;
and
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(q) within 60 days following the Closing Date, a certificate of an
Authorized Officer of the Parent (i) annexing thereto the acknowledgements of
the appropriate contracting officers and disbursing officers received with
respect to the notices and assignments previously delivered to such contracting
officers and disbursing officers pursuant to Paragraph 2.1(d) of Section 2 of
the CIT Financing Agreement, and (ii) certifying that such acknowledgements
relate to no less than 100% of the aggregate dollar amount of all Trade Accounts
Receivables of the Companies with respect to which the United States of America
or any agency, division or department thereof is the account debtor as of such
date.
7.11 Except as set forth on Schedule 7.11, and only to the extent set
forth therein, each of the Companies shall (i) keep any property either owned or
operated by it or any of its Subsidiaries free of any Environmental Liens; (ii)
comply, and cause each of its Subsidiaries to comply, in all material respects
with Environmental Laws and provide to Agent any documentation of such
compliance which Agent may reasonably request; (iii) provide Agent written
notice within five (5) days of any Release of a Hazardous Material in excess of
any reportable quantity from or onto property at any time owned or operated by
it or any of its Subsidiaries and take any Remedial Actions required to ▇▇▇▇▇
said Release; (iv) provide Agent with written notice within ten (10) days of the
receipt of any of the following: (A) notice that an Environmental Lien has been
filed against any property of any Loan Party or any of its Subsidiaries; (B)
commencement of any Environmental Action or notice that an Environmental Action
will be filed against any Loan Party or any of its Subsidiaries; and (C) any
notices the Companies or any of their Subsidiaries receive from any local, state
or federal authority advising any one them of any environmental liability (real
or potential) stemming from their operations, premises, waste disposal
practices, or waste disposal sites used by any of them, or any other notice of a
violation, citation or other administrative order which could have a Material
Adverse Effect.
7.12 The Companies shall cause (i) each Subsidiary of any Loan Party
not in existence on the Closing Date, to execute and deliver to Agent promptly
and in any event within three (3) days after the formation, acquisition or
change in status thereof (A) a Guaranty guaranteeing the Obligations, (B) a
Security Agreement, (C) if such Subsidiary has any Subsidiaries, a Pledge
Agreement together with (x) certificates evidencing all of the Capital Stock of
any Person owned by such Subsidiary, (y) undated stock powers executed in blank
with signature guaranteed, and (z) such opinion of counsel and such approving
certificate of such Subsidiary as Agent may reasonably request in respect of
complying with any legend on any such certificate or any other matter relating
to such shares, (D) one or more Mortgages, in form and substance satisfactory to
Agent, creating on the real property of such Subsidiary a perfected, first
priority Lien on such real property subject only to Permitted Encumbrances, a
Title Insurance Policy covering such real property, a current ALTA survey
thereof and a surveyor's certificate, each in form and substance satisfactory to
Agent, together with such other agreements, instruments and documents as Agent
may reasonably require, and (E) such other agreements, instruments, approvals,
legal opinions or other documents reasonably requested by Agent in order to
create, perfect, establish the first priority of or otherwise protect any Lien
purported to be covered by any such Security Agreement, Pledge Agreement or
Mortgage or
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otherwise to effect the intent that such Subsidiary shall become bound by all of
the terms, covenants and agreements contained in the Loan Documents and that all
property and assets of such Subsidiary shall become Collateral for the
Obligations; and (ii) each owner of the Capital Stock of any such Subsidiary to
execute and deliver promptly and in any event within three (3) days after the
formation or acquisition of such Subsidiary a Pledge Agreement, together with
(A) certificates evidencing all of the Capital Stock of such Subsidiary, (B)
undated stock powers or other appropriate instruments of assignment executed in
blank with signature guaranteed, (C) such opinion of counsel and such approving
certificate of such Subsidiary as Agent may reasonably request in respect of
complying with any legend on any such certificate or any other matter relating
to such shares and (D) such other agreements, instruments, approvals, legal
opinions or other documents requested by Agent. In addition, in the event that
the Parent has not effected the sale of the real property located at ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "RANCHO TTC PROPERTY") by
September 30, 2002, the Parent shall cause Rancho TransTechnology Corporation to
deliver to Agent, no later than October 15, 2002 a Mortgage, in form and
substance satisfactory to Agent, creating on such real property in favor of
Agent a perfected, first priority Lien subject only to Permitted Encumbrances, a
Title Insurance Policy covering such real property, a current ALTA survey
thereof and a surveyor's certificate with respect to such real property, each in
form and substance satisfactory to Agent, together with such other agreements,
instruments and documents as Agent may reasonably require in connection
therewith.
7.13 (a) In addition to each Company's other obligations under this
Agreement and the other Loan Documents, each Company shall, jointly and
severally, defend, protect, indemnify and hold harmless Agent, each Lender and
their respective transferees and all of their respective officers, directors,
employees, attorneys, consultants and agents (collectively called the
"INDEMNITEES") from and against any and all losses, damages, liabilities,
obligations, penalties, fees, reasonable costs and expenses (including, without
limitation, reasonable attorneys' fees, costs and expenses) incurred by such
Indemnitees, whether prior to or from and after the Closing Date, whether
direct, indirect or consequential, as a result of or arising from or relating to
or in connection with any of the following: (i) the negotiation, preparation,
execution or performance or enforcement of this Agreement, any other Loan
Document or of any other document executed in connection with the transactions
contemplated by this Agreement, (ii) Agent's or any Lender's furnishing of funds
to any Company under this Agreement or the other Loan Documents, including,
without limitation, the management of any such loans, (iii) any matter relating
to the financing transactions contemplated by this Agreement or the other Loan
Documents or by any document executed in connection with the transactions
contemplated by this Agreement or the other Loan Documents, or (iv) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto (collectively, the "INDEMNIFIED
MATTERS"); PROVIDED, HOWEVER, that the Companies shall not have any obligation
to any Indemnitee under this subsection (a) for any Indemnified Matter caused by
the gross negligence or willful misconduct of such Indemnitee, as determined by
a final judgment of a court of competent jurisdiction.
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(b) Without limiting Paragraph 7.13(a) hereof, each Company agrees to,
jointly and severally, defend, indemnify, and hold harmless the Indemnitees
against any and all Environmental Liabilities and all other claims, demands,
penalties, fines, liabilities (including strict liability), settlements, losses,
damages, costs and expenses (including without limitation, reasonable legal fees
and expenses, consultant fees and investigation and laboratory fees), arising
out of (i) any Releases or threatened Releases on, under, in, originating or
emanating from, any property presently or formerly owned or operated by any Loan
Party or any Subsidiary of any Loan Party, or any predecessor in interest; (ii)
the generation or disposal of any Hazardous Materials by any Loan Party or any
Subsidiary of any Loan Party, or any predecessor in interest; (iii) any
violations of Environmental Laws by any Loan Party or any Subsidiary of any Loan
Party, or any predecessor in interest; (iv) any Environmental Action relating to
any Loan Party or any Subsidiary of any Loan Party, any predecessor in interest
or filed against Agent or any Lender in connection with any action of, or
property presently or formerly owned or operated by, any Loan Party or any
Subsidiary of any Loan Party, or any predecessor in interest; (v) any personal
injury (including wrongful death) or property damage (real or personal) arising
out of related to the presence or Release of such Hazardous Materials; (vi) any
violation of any Environmental Law by any Loan Party or any Subsidiary of any
Loan Party, or any predecessor in interest; and (vii) any breach of any warranty
or representation regarding environmental matters made by the Loan Parties in
this Agreement or the breach of any covenant made by the Loan Parties in
Paragraph 7.11). Notwithstanding the foregoing, the Loan Parties shall not have
any obligation to any Indemnitee under this subsection (b) regarding any
potential environmental matter covered hereunder which is caused by the gross
negligence or willful misconduct of such Indemnitee, as determined by a final
judgment of a court of competent jurisdiction.
(c) The indemnification for all of the foregoing losses, damages, fees,
costs and expenses of the Indemnitees are chargeable against the Loan Account.
To the extent that the undertaking to indemnify, pay and hold harmless set forth
in this Paragraph 7.13 may be unenforceable because it is violative of any law
or public policy, each Company shall, and shall cause its Subsidiaries to,
jointly and severally, contribute the maximum portion which it is permitted to
pay and satisfy under applicable law, to the payment and satisfaction of all
Indemnified Matters incurred by the Indemnitees. The indemnities set forth in
this Paragraph 7.13 shall survive the repayment of the Obligations and discharge
of any Liens granted under the Loan Documents.
7.14 Without the prior written consent of the Required Lenders, the
Companies agree that neither they nor any of their Subsidiaries will enter into,
renew, extend or be a party to, any transaction, including, without limitation,
any purchase, sale, lease, loan or exchange of property with any Subsidiary or
Affiliate of the Companies, provided that, except as otherwise set forth in this
Agreement, the Companies and their Subsidiaries or any one of them may enter
into sale and service transactions in the ordinary course of their business and
pursuant to the reasonable requirements of any such Company, and upon standard
terms and conditions and fair and reasonable terms, no less favorable to such
Company than such Company could obtain in a comparable arms length
-45-
transaction with an unrelated third party, provided further that no Default or
Event of Default exists or will occur hereunder prior to and after giving effect
to any such transaction.
7.15 Each Company shall cause all Indebtedness and other obligations
now or hereafter owed by it to any of its Affiliates, to be subordinated in
right of payment and security to the Indebtedness and other Obligations owing to
Agent and the Lenders in accordance with a subordination agreement in form and
substance reasonably satisfactory to Agent.
7.16 Parent shall cause the Fiscal Year of the Parent and its
Subsidiaries to end on March 31 of each calendar year unless Agent consents to a
change in such Fiscal Year (and appropriate related changes to this Agreement),
which consent shall not be unreasonably withheld.
7.17 No Company shall make, or permit any of its Subsidiaries to make,
any change in the nature of its business as currently conducted.
7.18 Each Company shall take such action and execute, acknowledge and
deliver, and cause each of its Subsidiaries to take such action and execute,
acknowledge and deliver, at its sole cost and expense, such agreements,
instruments or other documents as Agent may reasonably require from time to time
in order (i) to carry out more effectively the purposes of this Agreement and
the other Loan Documents, (ii) to subject to valid and perfected first priority
Liens any of the Collateral or any other property of any Loan Party and its
Subsidiaries, (iii) to establish and maintain the validity and effectiveness of
any of the Loan Documents and the validity, perfection and priority of the Liens
intended to be created thereby, and (iv) to better assure, convey, grant,
assign, transfer and confirm unto Agent the rights now or hereafter intended to
be granted to it under this Agreement or any other Loan Document. In furtherance
of the foregoing, to the maximum extent permitted by applicable law, each
Company (i) authorizes Agent to execute any such agreements, instruments or
other documents in such Company's name and to file such agreements, instruments
or other documents in any appropriate filing office, (ii) authorizes Agent to
file any financing statement required hereunder or under any other Loan
Document, and any continuation statement or amendment with respect thereto, in
any appropriate filing office without the signature of such Company, and (iii)
ratifies the filing of any financing statement, and any continuation statement
or amendment with respect thereto, filed without the signature of such Company
prior to the date hereof.
7.19 Until termination of the Agreement and payment and satisfaction of
all Obligations hereunder, except as otherwise expressly permitted by this
Agreement, each of the Companies agrees that, without the prior written consent
of the Required Lenders, each Company shall not and shall not permit any of its
Subsidiaries to:
(a) Mortgage, assign, pledge, transfer or otherwise permit any Lien, or
judgment, (whether as a result of a purchase money or title retention
transaction, or other security interest, or otherwise) to exist on any of the
Collateral or any other assets, whether now owned or hereafter acquired, except
for the Permitted Encumbrances;
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(b) Incur or create any Indebtedness other than the Permitted
Indebtedness;
(c) Sell, lease, assign, transfer or otherwise dispose of (i)
Collateral, except as otherwise specifically permitted by this Agreement, or
(ii) any substantial portion of any of their assets which do not constitute
Collateral;
(d) Wind-up, liquidate or dissolve, or merge, consolidate or amalgamate
with any Person, or convey, sell, lease or sublease, transfer or otherwise
dispose of, whether in one transaction or a series of related transactions, all
or any part of its business, property or assets, whether now owned or hereafter
acquired (or agree to do any of the foregoing), or purchase or otherwise
acquire, whether in one transaction or a series of related transactions, all or
substantially all of the assets of any Person (or any division thereof) (or
agree to do any of the foregoing), or permit any of its Subsidiaries to do any
of the foregoing; provided, however, that
(i) any wholly-owned Subsidiary of any Loan Party (other than
a Company) may be merged into such Loan Party or another wholly-owned
Subsidiary of such Loan Party, or may consolidate with another
wholly-owned Subsidiary of such Loan Party, so long as (A) no other
provision of this Agreement would be violated thereby, (B) such Loan
Party gives Agent at least 60 days' prior written notice of such merger
or consolidation, (C) no Default or Event of Default shall have
occurred and be continuing either before or after giving effect to such
transaction, (D) the Agent's and the Lenders' rights in any Collateral,
including, without limitation, the existence, perfection and priority
of any Lien thereon, are not adversely affected by such merger or
consolidation and (E) the surviving Subsidiary, if any, is joined as a
Loan Party hereunder and is a party to a Guaranty and a Security
Agreement in favor of Agent and the Capital Stock of such Subsidiary is
the subject of a Pledge Agreement, in each case, which is in full force
and effect on the date of and immediately after giving effect to such
merger or consolidation; and
(ii) any Loan Party and its Subsidiaries may (A) sell
Inventory in the ordinary course of business, (B) dispose of obsolete
or worn-out equipment in the ordinary course of business, and (C) sell
or otherwise dispose of other property or assets for cash in an
aggregate amount not less than the fair market value of such property
or assets, PROVIDED that the Net Cash Proceeds of such Dispositions (x)
in the case of clauses (B) and (C) above, do not exceed $100,000 in the
aggregate in any twelve-month period and (y) in all cases, are paid to
Agent for the benefit of the Lenders pursuant to the terms of Paragraph
4.7 of Section 4;
(e) Assume, guarantee, endorse, or otherwise become liable upon the
obligations of any Person, except by the endorsement of negotiable instruments
for deposit or collection or similar transactions in the ordinary course of
business;
(f) (i) Declare or pay any dividend or other distribution, direct or
indirect, on account of any Capital Stock of any Loan Party or any of its
Subsidiaries, now or hereafter outstanding, (ii) make any repurchase,
redemption, retirement, defeasance, sinking fund or similar payment, purchase
-47-
or other acquisition for value, direct or indirect, of any Capital Stock of any
Loan Party or any direct or indirect parent of any Loan Party, now or hereafter
outstanding, (iii) make any payment to retire, or to obtain the surrender of,
any outstanding warrants, options or other rights for the purchase or
acquisition of shares of any class of Capital Stock of any Loan Party, now or
hereafter outstanding, (iv) return any Capital Stock to any shareholders or
other equity holders of any Loan Party or any of its Subsidiaries, or make any
other distribution of property, assets, shares of Capital Stock, warrants,
rights, options, obligations or securities thereto as such, or (v) except as set
forth on Schedule 7.19(f), and other than with respect to regular salaries paid
to employees of the Companies in the ordinary course of business and consistent
with past practice (including, reasonable and customary bonus payments in
accordance with past practice), pay any management fees or any other fees or
expenses (including the reimbursement thereof by any Loan Party or any of its
Subsidiaries) pursuant to any management, consulting or other services agreement
to any of the shareholders or other equityholders of any Loan Party or any of
its Subsidiaries or other Affiliates, or to any other Subsidiaries or Affiliates
of any Loan Party; provided, however, (i) any Loan Party may pay dividends to
the Parent (A) in amounts necessary to pay customary expenses of the Parent in
the ordinary course of its business as a public holding company (including
salaries and related reasonable and customary expenses incurred by employees of
the Parent) and (B) in amounts necessary to pay taxes when due and owing by the
Parent, (ii) any Subsidiary of any Company may pay dividends to such Company,
(iii) the Parent may pay dividends in the form of common Capital Stock, provided
that, no such payment shall be made if an Event of Default shall have occurred
and be continuing or would result from the making of any such payment.
(g) [INTENTIONALLY OMITTED]
(h) Make any payment in respect of the Subordinated Notes other than
regularly scheduled payments of interest unless after giving effect to such
payment, there is an Aggregate Availability of at least $2,500,000 or such
payment is expressly permitted by the Subordination Agreement;
(i) (i) Amend, modify or otherwise change (or permit the amendment,
modification or other change in any manner of) any of the provisions of any of
its or its Subsidiaries' Indebtedness or of any instrument or agreement
(including, without limitation, any purchase agreement, indenture, loan
agreement or security agreement) relating to any such Indebtedness if such
amendment, modification or change would shorten the final maturity or average
life to maturity of, or require any payment to be made earlier than the date
originally scheduled on, such Indebtedness, would increase the interest rate
applicable to such Indebtedness, would change the subordination provision, if
any, of such Indebtedness, or would otherwise be adverse to Agent or any Lender
or the issuer of such Indebtedness in any respect, (ii) except for the
Obligations or as otherwise provided in subsection (h) above of this Paragraph
7.19, make any voluntary or optional payment, prepayment, redemption,
defeasance, sinking fund payment or other acquisition for value of any of its or
its Subsidiaries' Indebtedness (including, without limitation, by way of
depositing money or securities with the trustee therefor before the date
required for the purpose of paying any portion of such Indebtedness
-48-
when due), or refund, refinance, replace or exchange any other Indebtedness for
any such Indebtedness (except to the extent such Indebtedness is otherwise
expressly permitted by the definition of "Permitted Indebtedness"), or make any
payment, prepayment, redemption, defeasance, sinking fund payment or repurchase
of any outstanding Indebtedness as a result of any asset sale, change of
control, issuance and sale of debt or equity securities or similar event, or
give any notice with respect to any of the foregoing, (iii) except as permitted
by Paragraph 7.19(d), amend, modify or otherwise change its name, jurisdiction
of organization, organizational identification number or FEIN or (iv) amend,
modify or otherwise change its certificate of incorporation or bylaws (or other
similar organizational documents), including, without limitation, by the filing
or modification of any certificate of designation, or any agreement or
arrangement entered into by it, with respect to any of its Capital Stock
(including any shareholders' agreement), or enter into any new agreement with
respect to any of its Capital Stock, except any such amendments, modifications
or changes or any such new agreements or arrangements pursuant to this clause
(iv) that either individually or in the aggregate, could not have a Material
Adverse Effect;
(j) Engage in any business, enter into any transaction, use any
securities or take any other action or permit any of its Subsidiaries to do any
of the foregoing, that would cause it or any of its Subsidiaries to become
subject to the registration requirements of the Investment Company Act of 1940,
as amended, by virtue of being an "investment company" or a company "controlled"
by an "investment company" not entitled to an exemption within the meaning of
such Act;
(k) Engage, or permit any ERISA Affiliate to engage, in any transaction
described in Section 4069 of ERISA; (ii) engage, or permit any ERISA Affiliate
to engage, in any prohibited transaction described in Section 406 of ERISA or
4975 of the Internal Revenue Code for which a statutory or class exemption is
not available or a private exemption has not previously been obtained from the
U.S. Department of Labor; (iii) adopt or permit any ERISA Affiliate to adopt any
employee welfare benefit plan within the meaning of Section 3(1) of ERISA which
provides benefits to employees after termination of employment other than as
required by Section 601 of ERISA or applicable law; (iv) fail to make any
contribution or payment to any Multiemployer Plan which it or any ERISA
Affiliate may be required to make under any agreement relating to such
Multiemployer Plan, or any law pertaining thereto; or (v) fail, or permit any
ERISA Affiliate to fail, to pay any required installment or any other payment
required under Section 412 of the Internal Revenue Code on or before the due
date for such installment or other payment;
(l) Permit the use, handling, generation, storage, treatment, release
or disposal of Hazardous Materials at any property owned or leased by it or any
of its Subsidiaries, except in compliance with Environmental Laws, so long as
such use, handling, generation, storage, treatment, release or disposal of
Hazardous Materials does not result in a Material Adverse Effect;
(m) Make or commit or agree to make any loan, advance guarantee of
obligations, other extension of credit or capital contributions to, or hold or
invest in or commit or agree to hold or invest in, or purchase or otherwise
acquire or commit or agree to purchase or otherwise acquire any
-49-
shares of the Capital Stock, bonds, notes, debentures or other securities of, or
make or commit or agree to make any other investment in, any other Person, or
purchase or own any futures contract or otherwise become liable for the purchase
or sale of currency or other commodities at a future date in the nature of a
futures contract, or permit any of its Subsidiaries to do any of the foregoing,
except for: (i) investments existing on the date hereof and as set forth on
Schedule 1.1, but not any increase in the amount thereof or any other
modification of the terms thereof, (ii) temporary loans and advances by (A) a
Company to another Company, made in the ordinary course of business and not
exceeding in the aggregate for all Loan Parties and their Subsidiaries at any
one time outstanding $250,000 and (B) a Company to its Subsidiaries (other than
a Company) and by such Subsidiaries to it, made in the ordinary course of
business and not exceeding in the aggregate for all Loan Parties and their
Subsidiaries at any one time outstanding $50,000, and (iii) Permitted
Investments;
(n) Create or otherwise cause, incur, assume, suffer or permit to exist
or become effective any consensual encumbrance or restriction of any kind on the
ability of any Subsidiary of any Loan Party (i) to pay dividends or to make any
other distribution on any shares of Capital Stock of such Subsidiary owned by
any Loan Party or any of its Subsidiaries, (ii) to pay or prepay or to
subordinate any Indebtedness owed to any Loan Party or any of its Subsidiaries,
(iii) to make loans or advances to any Loan Party or any of its Subsidiaries or
(iv) to transfer any of its property or assets to any Loan Party or any of its
Subsidiaries, or permit any of its Subsidiaries to do any of the foregoing;
PROVIDED, HOWEVER, that nothing in any of clauses (i) through (iv) of this
Paragraph 7.19(n) shall prohibit or restrict compliance with: (a) this Agreement
and the other Loan Documents; (b) any agreements in effect on the Closing Date
and set forth on Schedule 7.19(n); (c) any applicable law, rule or regulation
(including, without limitation, applicable currency control laws and applicable
state corporate statutes restricting the payment of dividends in certain
circumstances); (d) in the case of clause (iv) any agreement setting forth
customary restrictions on the subletting, assignment or transfer of any property
or asset that is a lease, license, conveyance or contract of similar property or
assets; or (e) in the case of clause (iv) any agreement, instrument or other
document evidencing a Permitted Encumbrance from restricting on customary terms
the transfer of any property or assets subject thereto;
(o) Other than as permitted by Paragraph 4.7(c) of Section 4, issue or
sell or enter into any agreement or arrangement for the issuance and sale of, or
sell or enter into any agreement or arrangement for the issuance and sale of,
any shares of its Capital Stock, any securities convertible into or exchangeable
for its Capital Stock or any warrants; or
(p) Agree to any material amendment or other material change to or
material waiver of any of its rights under any Material Contract;
7.20 Until termination of the Agreement and payment and satisfaction in
full of all Obligations hereunder, the Companies, on a consolidated basis,
shall:
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(a) Not permit Continuing Operations EBITDA of the Companies for the 12
month period ending on each date set forth below, to be less than the applicable
amount set forth below for the applicable period:
------------------------------------------------------------ ---------------------------------------------------------
12-MONTH-PERIOD ENDING CONTINUING OPERATIONS EBITDA
---------------------- ----------------------------
------------------------------------------------------------ ---------------------------------------------------------
September 30, 2002 $15,749,000
------------------------------------------------------------ ---------------------------------------------------------
October 31, 2002 $16,168,000
------------------------------------------------------------ ---------------------------------------------------------
November 30, 2002 $16,756,000
------------------------------------------------------------ ---------------------------------------------------------
December 31, 2002 $15,176,000
------------------------------------------------------------ ---------------------------------------------------------
January 31, 2003 $15,376,000
------------------------------------------------------------ ---------------------------------------------------------
February 28, 2003 $15,490,000
------------------------------------------------------------ ---------------------------------------------------------
March 31, 2003 $14,283,000
------------------------------------------------------------ ---------------------------------------------------------
April 30, 2003 $15,082,000
------------------------------------------------------------ ---------------------------------------------------------
May 31, 2003 $15,025,000
------------------------------------------------------------ ---------------------------------------------------------
June 30, 2003 $15,034,000
------------------------------------------------------------ ---------------------------------------------------------
July 31, 2003 $15,008,000
------------------------------------------------------------ ---------------------------------------------------------
August 31, 2003 $15,020,000
------------------------------------------------------------ ---------------------------------------------------------
September 30, 2003 $14,778,000
------------------------------------------------------------ ---------------------------------------------------------
October 31, 2003 $14,926,000
------------------------------------------------------------ ---------------------------------------------------------
November 30, 2003 $15,058,000
------------------------------------------------------------ ---------------------------------------------------------
December 31, 2003 $15,200,000
------------------------------------------------------------ ---------------------------------------------------------
January 31, 2003 $15,917,000
------------------------------------------------------------ ---------------------------------------------------------
February 29, 2004 $15,592,000
------------------------------------------------------------ ---------------------------------------------------------
March 31, 2004 and each twelve-month $16,336,000
period thereafter
------------------------------------------------------------ ---------------------------------------------------------
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(b) Not permit Senior Leverage Ratio of the Companies, with respect to
the 12-month period ending on each date set forth below, to be greater than the
ratio set forth below for the applicable period:
--------------------------------------------------------------- ------------------------------------------------------
12-MONTH-PERIOD ENDING RATIO
--------------------------------------------------------------- ------------------------------------------------------
If TCR Disposition Has If TCR Disposition HAS
Not Been effected been effected
----------------- -------------
--------------------------------------------------------------- ------------------------- ----------------------------
September 30, 2002 2.25:1.00 1.75:1.00
--------------------------------------------------------------- ------------------------- ----------------------------
October 31,2002 2.25:1.00 1.75:1.00
--------------------------------------------------------------- ------------------------- ----------------------------
November 30, 2002 2.25:1.00 1.75:1.00
--------------------------------------------------------------- ------------------------- ----------------------------
December 31, 2002 2.00:1.00 1.50:1.00
--------------------------------------------------------------- ------------------------- ----------------------------
January 31, 2003 2.00:1.00 1.50:1.00
--------------------------------------------------------------- ------------------------- ----------------------------
February 28, 2003 2.00:1.00 1.50:1.00
--------------------------------------------------------------- ------------------------- ----------------------------
March 31, 2003 and each
twelve-calendar month period thereafter 1.75:1.00 1.25:1.00
--------------------------------------------------------------- ------------------------- ----------------------------
(c) Not permit the Fixed Charges Coverage Ratio on each date set forth
below, to be less than the ratio set forth below for the applicable period:
-------------------------------------------------------------- -------------------------
PERIOD RATIO
-------------------------------------------------------------- -------------------------
Six Month Period Ending September 30, 2002 1.00:1.00
-------------------------------------------------------------- -------------------------
Seven Month Period Ending October 31,2002 1.00:1.00
-------------------------------------------------------------- -------------------------
Eight Month Period Ending November 30, 2002 1.00:1.00
-------------------------------------------------------------- -------------------------
Nine Month Period Ending December 31, 2002 1.00:1.00
-------------------------------------------------------------- -------------------------
Ten Month Period Ending January 31, 2003 1.00:1.00
-------------------------------------------------------------- -------------------------
Eleven Month Period Ending February 28, 2003 1.00:1.00
-------------------------------------------------------------- -------------------------
Twelve Month Period Ending March 31, 2003 and each 1.00:1.00
twelve-calendar month period thereafter
-------------------------------------------------------------- -------------------------
(d) Not enter into any Operating Lease if after giving effect thereto
the aggregate obligations with respect to Operating Leases of the Companies and
their Subsidiaries (i) for the eight month period ending March 31, 2003 would
exceed $700,000 and (ii) during any Fiscal Year thereafter would exceed
$1,036,000.00.
(e) Not contract for, purchase, make expenditures for, lease pursuant
to a Capital Lease or otherwise incur obligations with respect to Capital
Expenditures (whether subject to a security interest or otherwise) (i) for the
eight month period ending March 31, 2003 in excess of (A) $1,000,000 with
respect to the Companies other than TCR and (B) $600,000 with respect to TCR and
(ii) during any Fiscal Year thereafter in excess of $1,150,000.00.
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7.21 Each of the Parent and TCR hereby jointly and severally represent
and warrant that: (a) the authorized Capital Stock of TCR consists of 10,000
shares of common stock par value $5.00 per share, of which 2,288 shares are
issued and outstanding, (b) the Parent is the record owner of all such issued
and outstanding shares of common stock, (c) no shares of common stock have been
issued or transferred since the closing of the TCR Acquisition other than the
issuance of stock certificate number 15 dated the date of the TCR Acquisition
registered in the name of the Parent evidencing the 2,288 shares of common stock
acquired by the Parent in the TCR Acquisition, and (d) the Parent owns such
shares free and clear of all security interests, liens, mortgages, encumbrances,
pledges, claims, restrictions on transfer and other adverse claims of any kind
whatsoever except for the security interests created by the Loan Documents and
the CIT Financing Documents.
7.22 Each of the Parent and NORCO hereby jointly and severally
represent and warrant that: (a) the authorized Capital Stock of NORCO consists
of (i) 50,000 shares of common stock par value $1.00 per share, of which 18,031
shares are issued and outstanding, and (ii) 50,000 shares of preferred stock par
value $25.00 per share, of which 20,254 shares are issued and outstanding, (b)
the Parent is the record owner of all such issued and outstanding shares of
common stock and preferred stock, and (c) the Parent owns such shares free and
clear of all security interests, liens, mortgages, encumbrances, pledges,
claims, restrictions on transfer and other adverse claims of any kind whatsoever
except for the security interests created by the Loan Documents and the CIT
Financing Documents.
SECTION 8. INTEREST, FEES AND EXPENSES; JOINT AND SEVERAL LIABILITY
8.1 The Term Loan shall bear interest on the principal amount thereof
from time to time outstanding, from the date of such Term Loan until such
principal amount becomes due, at a rate per annum equal to the sum of (a) the
greater of (i) the Reference Rate plus 5.0% and (ii) 9.75%, plus (b) the PIK
Rate; PROVIDED, HOWEVER, that interest on the outstanding principal amount of
the Term Loan at a per annum rate equal to the PIK Rate shall, in the absence of
(1) a continuing Event of Default and (2) an election by the Administrative
Borrower to pay such interest in cash, be paid by capitalizing such interest and
adding such capitalized interest to the then outstanding principal amount of the
Term Loan. Any interest to be capitalized shall be capitalized on the date such
interest is to be paid pursuant to Paragraph 8.3 hereof and added to the then
outstanding principal amount of the Term Loan and thereafter shall bear interest
as provided hereunder as if it had originally been part of the outstanding
principal of such Term Loan. Notwithstanding the foregoing, the Companies shall
not be required to pay the portion of the principal amount of the Term Loan that
corresponds to the interest capitalized pursuant to this Paragraph 8.1 until the
earlier of (x) the Final Maturity Date and (y) the termination of the Financing
Agreement.
8.2 To the extent permitted by law, upon the occurrence and during the
continuance of an Event of Default , (i) the principal of the Term Loan
(including all capitalized interest added to the principal balance thereof) and
(ii) the amount of all accrued interest, fees, indemnities, or any other
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Obligations of the Companies under this Agreement and the other Loan Documents
not paid when due, shall bear interest, from the date such Event of Default
occurred until the date such Event of Default is cured or waived in writing in
accordance herewith, at a rate per annum equal at all times to the Default Rate
of Interest.
8.3 Interest on the Term Loan shall be payable monthly, in arrears, on
the first day of each month, commencing on the first day of the month following
the month in which such Term Loan is made and at maturity (whether upon demand,
by acceleration or otherwise). Interest at the Default Rate of Interest shall be
payable on demand. Agent shall be entitled to charge the Loan Account with the
amount of any interest payment due hereunder.
8.4 All interest shall be computed on the basis of a year of 360 days
for the actual number of days, including the first day but excluding the last
day, elapsed.
8.5 [INTENTIONALLY OMITTED]
8.6 To induce Agent and the Lenders to enter into this Agreement and to
extend to the Companies the Term Loan, the Companies shall pay to Agent for the
account of the Lenders, in accordance with their Pro Rata Shares, a
non-refundable closing fee (the "Closing Fee") in the amount of $410,000.00
payable on or prior to the Closing Date, which fee shall be deemed fully earned
when paid.
8.7 On each anniversary of the Closing Date, the Companies shall pay to
Agent, for the account of the Lenders, in accordance with their Pro Rata Shares,
a non-refundable anniversary fee (the "Anniversary Fee") in the amount of
$140,000.00, which fee shall be deemed fully earned when paid.
8.8 In addition to the Closing Fee and the Anniversary Fee and the
other fees provided for herein, the Companies will pay on demand, all Out-of
Pocket Expenses and all other costs and expenses incurred by or on behalf of
Agent and the Lenders, regardless of whether the transactions contemplated
hereby are consummated, including, without limitation, reasonable fees, costs,
client charges and expenses of counsel for Agent and the Lenders, accounting,
due diligence, periodic field audits (at a prevailing rate of $1,500 per
examiner per day), physical counts, valuations, investigations, searches and
filings, monitoring of assets, appraisals of Collateral, title searches and
reviewing environmental assessments, miscellaneous disbursements, examination,
travel, lodging and meals, arising from or relating to: (a) the negotiation,
preparation, execution, delivery, performance and administration of this
Agreement and the other Loan Documents (including, without limitation, the
preparation of any additional Loan Documents pursuant to Paragraph 7.12), (b)
any requested amendments, waivers or consents to this Agreement or the other
Loan Documents whether or not such documents become effective or are given, (c)
the preservation and protection of any of Agent's or any Lender's rights under
this Agreement or the other Loan Documents, (d) the defense of any claim or
action asserted or brought against Agent or any Lender by any Person that arises
from or relates to this Agreement, any other Loan Document, Agent's or any
Lender's claims
-54-
against any Loan Party, or any and all matters in connection therewith, (e) the
commencement or defense of, or intervention in, any court proceeding arising
from or related to this Agreement or any other Loan Document, (f) the filing of
any petition, complaint, answer, motion or other pleading by Agent or any
Lender, or the taking of any action in respect of the Collateral or other
security, in connection with this Agreement or any other Loan Document, (g) the
protection, collection, lease, sale, taking possession of or liquidation of, any
Collateral or other security in connection with this Agreement or any other Loan
Document, (h) any attempt to enforce any Lien or security interest in any
Collateral or other security in connection with this Agreement or any other Loan
Document, (i) any attempt to collect from any Loan Party, (j) all liabilities
and costs arising from or in connection with the past, present or future
operations of any Loan Party involving any damage to real or personal property
or natural resources or harm or injury alleged to have resulted from any Release
of Hazardous Materials on, upon or into such property, (k) any Environmental
Liabilities incurred in connection with the investigation, removal, cleanup
and/or remediation of any Hazardous Materials present or arising out of the
operations of any facility of any Loan Party, (l) any Environmental Liabilities
incurred in connection with any Environmental Lien; or (m) the receipt by Agent
or any Lender of any advice from professionals with respect to any of the
foregoing. Without limitation of the foregoing or any other provision of any
Loan Document: (x) the Companies agree to pay all stamp, document, transfer,
recording or filing taxes or fees and similar impositions now or hereafter
determined by Agent to be payable in connection with this Agreement or any other
Loan Document, and the Companies agree to save Agent and each Lender harmless
from and against any and all present or future claims, liabilities or losses
with respect to or resulting from any omission to pay or delay in paying any
such Taxes, fees or impositions (including, without limitation, in connection
with any Taxes paid by Agent or any Lender and any liability arising therefrom
or with respect thereto, whether or not such Taxes were correctly or legally
asserted) and the Companies further agree to pay such indemnification within 10
days from the date on which Agent or any such Lender makes a written demand
therefor, which demand shall identify in reasonable detail the nature and amount
of such Taxes, (y) the Companies agree to pay all broker fees that may become
due in connection with the transactions contemplated by this Agreement and the
other Loan Documents, and (z) if the Companies fail to perform any covenant or
agreement contained herein or in any other Loan Document, Agent may itself
perform or cause performance of such covenant or agreement, and the expenses of
the Agent incurred in connection therewith shall be reimbursed on demand by the
Companies. The Companies further agree that if any Company or any of its
Subsidiaries shall be required to deduct or to withhold any Taxes from or in
respect of any amount payable hereunder or under any other Loan Document,
(i) the amount so payable shall be increased so that after making all
required deductions and withholdings (including Taxes on amounts payable
pursuant to this sentence) the Lenders or Agent, as the case may be, receive an
amount equal to the sum they would have received had no such deduction or
withholding been made,
(ii) such Company shall, or shall cause its Subsidiaries to make such
deduction or withholding,
-55-
(iii) such Company shall, or shall cause its Subsidiaries to pay the
full amount deducted or withheld to the relevant taxation authority in
accordance with applicable law, and
(iv) as promptly as possible thereafter, such Company shall send the
Lenders, and the Agent, an official receipt (or, if an official receipt is not
available, such other documentation as shall be satisfactory to the Lenders or
the Agent, as the case may be) evidencing payment of the amount or amounts so
deducted or withheld.
8.9 Each of the Companies hereby authorizes Agent to charge the Loan
Account with the amount of all their Obligations due hereunder as such payments
become due. Each of the Companies confirms that (i) the Companies, as between
themselves, shall determine how to pro-rate any such payments due hereunder, and
(ii) for ease of administration, Agent may charge any of the Loan Account with
the amount of any such fee payments and any such charges which Agent may so make
to the Companies' Loan Account as herein provided will be made as an
accommodation to the Companies and solely at Agent's discretion.
8.10 In the event that Agent or any Lender or any participant hereunder
(or any financial institution which may from time to time become a participant
or Lender hereunder) shall have determined in the exercise of its reasonable
business judgment that, subsequent to the Closing Date, any change in applicable
law, rule, regulation or guideline regarding capital adequacy, or any change in
the interpretation or administration thereof, or compliance by Agent or any
Lender or any Person controlling any such Lender or such participant with any
new request or directive regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on Agent's or any Lender's
or any Person controlling any such Lender's or such participant's capital as a
consequence of its obligations hereunder to a level below that which Agent or
any Lender or any Person controlling any such Lender or such participant could
have achieved but for such adoption, change or compliance (taking into
consideration Agent or any Lender or any Person controlling any such Lender or
such participant's policies with respect to capital adequacy) by an amount
reasonably deemed by Agent or any Lender or any Person controlling any such
Lender or such participant to be material, then, from time to time, the
Companies shall pay no later than five (5) days following demand by Agent or any
Lender or any Person controlling any such Lender or such participant such
additional amount or amounts as will compensate Agent, any Lender or any Person
controlling such Lender or such participants for such reduction. In determining
such amount or amounts, Agent, any Lender or any Person controlling such Lender
or such participant may use any reasonable averaging or attribution methods. The
protection of this Paragraph 8.10 shall be available to Agent, any Lender or any
Person controlling such Lender or such participant regardless of any possible
contention of invalidity or inapplicability with respect to the applicable law,
regulation or condition. A certificate of Agent, any Lender or any Person
controlling such Lender or such participant setting forth such amount or amounts
as shall be necessary to compensate Agent, any Lender or any Person controlling
such Lender or such participant with respect to this Section 8 and the
calculation thereof when delivered to the Companies shall be conclusive on the
Companies absent manifest error. Notwithstanding
-56-
anything in this paragraph to the contrary, in the event Agent, any Lender or
any Person controlling such Lender or such participant has exercised its rights
pursuant to this paragraph, and subsequent thereto determines that the
additional amounts paid by the Companies in whole or in part exceed the amount
which Agent, any Lender or any Person controlling such Lender or such
participant actually required to be made whole, the excess, if any, shall be
returned to the Companies by Agent, any Lender or any Person controlling such
Lender or such participant, as applicable.
8.11 In the event that any applicable law, treaty or governmental
regulation, or any change therein or in the interpretation or application
thereof, or compliance by Agent, any Lender or any Person controlling such
Lender or such participant with any request or directive (whether or not having
the force of law) from any central bank or other financial, monetary or other
authority, shall:
(a) subject Agent, any Lender or any Person controlling such Lender or
such participant to any tax of any kind whatsoever with respect to this
Agreement or change the basis of taxation of payments to Agent or any Lender or
any Person controlling any such Lender or such participant of principal, fees,
interest or any other amount payable hereunder or under any other documents
(except for changes in the rate of tax on the overall net income of Agent, any
Lender or any Person controlling such Lender or such participant by the federal
government or the jurisdiction in which it maintains its principal office);
(b) impose, modify or hold applicable any reserve, special deposit,
assessment or similar requirement against assets held by, or deposits in or for
the account of, advances or loans by, or other credit extended by Agent, any
Lender or any Person controlling such Lender or such participant by reason of or
in respect to this Agreement and the Loan Documents, including (without
limitation) pursuant to Regulation D of the Board of Governors of the Federal
Reserve System; or
(c) impose on Agent, any Lender or any Person controlling such Lender
or such participant any other condition with respect to this Agreement or any
other document, and the result of any of the foregoing is to increase the cost
to Agent, any Lender or any Person controlling such Lender or such participant
of making, renewing or maintaining the Term Loan hereunder by an amount that
Agent or any Lender or any Person controlling any such Lender or such
participant deems to be material in the exercise of its reasonable business
judgment or to reduce the amount of any payment (whether of principal, interest
or otherwise) in respect of the Term Loan by an amount that Agent, any Lender or
any Person controlling such Lender or such participant deems to be material in
the exercise of its reasonable business judgment, then, in any case the
Companies shall pay Agent, any Lender or such participant, within five (5) days
following its demand, such additional cost or such reduction, as the case may
be. All amounts payable under this Paragraph 8.11 shall bear interest from the
date that is five (5) days after the date of demand by any Lender or Agent until
payment in full to such Lender or Agent at the Reference Rate. Agent or any
Lender or any Person controlling any such Lender or such participant shall
certify the amount of such additional cost or reduced amount to the Companies
and the calculation thereof and such certification shall be conclusive upon the
Companies absent manifest error. Notwithstanding anything in this paragraph to
-57-
the contrary, in the event Agent, any Lender or any Person controlling such
Lender or such participant has exercised its rights pursuant to this paragraph,
and subsequent thereto determine that the additional amounts paid by the
Companies in whole or in part exceed the amount which Agent, any Lender or any
Person controlling any such Lender or such participant actually required
pursuant hereto, the excess, if any, shall be returned to the Companies by
Agent, any Lender or any Person controlling any such Lender or such participant.
8.12 (a) The Companies will make each payment under this Agreement not
later than 12:00 noon (New York City time) on the day when due, in lawful money
of the United States of America and in immediately available funds, to the
Agent's Account. All payments received by the Agent after 12:00 noon (New York
City time) on any Business Day will be credited to the Loan Account on the next
succeeding Business Day. All payments shall be made by the Companies without
set-off, counterclaim, deduction or other defense to the Agent and the Lenders.
Except as otherwise provided herein, after receipt, the Agent will promptly
thereafter cause to be distributed like funds relating to the payment of
principal ratably to the Lenders in accordance with their Pro Rata Shares and
like funds relating to the payment of any other amount payable to any Lender to
such Lender, in each case to be applied in accordance with the terms of this
Agreement, provided that the Agent will cause to be distributed all interest and
fees received from or for the account of the Companies not less than once each
month and in any event promptly after receipt thereof. The Lenders and the
Companies hereby authorize the Agent to, and the Agent may, from time to time,
charge the Loan Account of the Companies with any amount due and payable by the
Companies under any Loan Document. Each of the Lenders and the Companies agrees
that the Agent shall have the right to make such charges whether or not any
Default or Event of Default shall have occurred and be continuing. Whenever any
payment to be made under any such Loan Document shall be stated to be due on a
day other than a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall in such case be included in the
computation of interest or fees, as the case may be. All computations of fees
shall be made by the Agent on the basis of a year of 360 days for the actual
number of days (including the first day but excluding the last day) occurring in
the period for which such fees are payable. Each determination by the Agent of
an interest rate or fees hereunder shall be conclusive and binding for all
purposes in the absence of manifest error.
(b) The Agent shall provide the Administrative Borrower, promptly after
the end of each calendar month, a summary statement (in the form from time to
time used by the Agent) of the opening and closing daily balances in the Loan
Account of the Companies during such month, the amounts and dates of the Term
Loan made to the Companies during such month, the amounts and dates of all
payments on account of the Term Loan to the Companies during such month, the
amount of interest accrued on the Term Loan to the Companies during such month,
and the amount and nature of any charges to the Loan Account made during such
month on account of fees, commissions, expenses and other Obligations. All
entries on any such statement shall be presumed to be correct and, thirty (30)
days after the same is sent, shall be final and conclusive absent manifest
error.
-58-
8.13 Except as otherwise provided herein, if any Lender shall obtain
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise) on account of any Obligation in excess of its ratable
share of payments on account of similar obligations obtained by all the Lenders,
such Lender shall forthwith purchase from the other Lenders such participations
in such similar obligations held by them as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each of them;
PROVIDED, HOWEVER, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be rescinded and such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery together with an amount equal to
such Lender's ratable share (according to the proportion of (i) the amount of
such Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender of any interest or other amount paid by the purchasing Lender
in respect of the total amount so recovered). The Companies agree that any
Lender so purchasing a participation from another Lender pursuant to this
Paragraph 8.13 may, to the fullest extent permitted by law, exercise all of its
rights (including the Lender's right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the
Companies in the amount of such participation.
8.14 (a) All payments of principal and interest in respect of the
outstanding Term Loan, payments of fees (other than set forth in the audit and
collateral monitoring fee provided for in Paragraph 8.8) and all other payments
in respect of any other Obligations, shall be allocated by the Agent among such
of the Lenders as are entitled thereto, in proportion to their respective Pro
Rata Shares or otherwise as provided herein or, in respect of payments not made
on account of the Term Loan, as designated by the Person making payment when the
payment is made.
(b) After the occurrence and during the continuance of an Event of
Default, the Agent may, and upon the direction of the Required Lenders shall,
apply all payments in respect of any Obligations and all proceeds of the
Collateral, subject to the provisions of this Agreement, (i) FIRST, ratably to
pay the Obligations in respect of any fees, expense reimbursements, indemnities
and other amounts then due to the Agent until paid in full; (II) SECOND, ratably
to pay the Obligations in respect of any fees and indemnities then due to the
Lenders until paid in full; (iii) THIRD, ratably to pay interest due in respect
of the Term Loan until paid in full; (iv) FOURTH, ratably to pay principal of
the Term Loan until paid in full, and (v) FIFTH, to the ratable payment of all
other Obligations then due and payable.
(c) In each instance, so long as no Event of Default has occurred and
is continuing, Paragraph 8.14(b) shall not be deemed to apply to any payment by
the Companies specified by the Administrative Borrower to the Agent to be for
the payment of Obligations then due and payable under any provision of this
Agreement or the prepayment of all or part of the principal of the Term Loan in
accordance with the terms and conditions of Section 4.
-59-
(d) For purposes of Paragraph 8.14(b), "paid in full" with respect to
interest shall include interest accrued after the commencement of any Insolvency
Proceeding irrespective of whether a claim for such interest is allowable in
such Insolvency Proceeding.
(e) In the event of a direct conflict between the priority provisions
of this Paragraph 8.14 and other provisions contained in any other Loan
Document, it is the intention of the parties hereto that both such priority
provisions in such documents shall be read together and construed, to the
fullest extent possible, to be in concert with each other. In the event of any
actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms
and provisions of this Paragraph 8.14 shall control and govern.
8.15 The Companies hereby acknowledge that the Lenders and their
Affiliates may sell or securitize the Term Loan (a "Securitization") through the
pledge of the Term Loan as collateral security for loans to the Lenders or their
Affiliates or through the sale of the Term Loan or the issuance of direct or
indirect interests in the Term Loan, which loans to the Lenders or their
Affiliates or direct or indirect interests will be rated by ▇▇▇▇▇'▇, Standard &
Poor's or one or more other rating agencies (the "Rating Agencies"). The
Companies shall cooperate with the Lenders and their Affiliates to effect the
Securitization including, without limitation, by (a) amending this Agreement and
the other Loan Documents, and executing such additional documents, as reasonably
requested by the Lenders in connection with the Securitization, PROVIDED THAT
(i) any such amendment or additional documentation does not impose material
additional costs on the Loan Parties and (ii) any such amendment or additional
documentation does not materially adversely affect the rights, or materially
increase the obligations, of the Loan Parties under the Loan Documents or change
or affect in a manner adverse to the Companies the financial terms of the Loans,
(b) providing such information as may be reasonably requested by the Lenders in
connection with the rating of the Term Loan or the Securitization, and (c)
providing in connection with any rating of the Term Loan a certificate (i)
agreeing to indemnify the Lenders and their Affiliates, any of the Rating
Agencies, or any party providing credit support or otherwise participating in
the Securitization (collectively, the "Securitization Parties") for any losses,
claims, damages or liabilities (the "Liabilities") to which the Lenders, their
Affiliates or such Securitization Parties may become subject insofar as the
Liabilities arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Loan Document or in any
writing delivered by or on behalf of any Loan Party to the Lenders in connection
with any Loan Document or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, and such indemnity shall survive any
transfer by the Lenders or their successors or assigns of the Term Loan and (ii)
agreeing to reimburse the Lenders and their Affiliates for any legal or other
expenses reasonably incurred by such Persons in connection with defending the
Liabilities.
8.16 [INTENTIONALLY OMITTED]
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8.17 [INTENTIONALLY OMITTED]
8.18 [INTENTIONALLY OMITTED]
8.19 [INTENTIONALLY OMITTED]
8.20 Notwithstanding anything in this Agreement or any other Loan
Document to the contrary, each of the Companies hereby accepts joint and several
liability hereunder and under the other Loan Documents in consideration of the
financial accommodations to be provided by Agent and the Lenders under this
Agreement and the other Loan Documents, for the mutual benefit, directly and
indirectly, of each of the Companies and in consideration of the undertakings of
the other Companies to accept joint and several liability for the Obligations.
Each of the Companies, jointly and severally, hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other Companies, with respect to the payment and
performance of all of the Obligations, it being the intention of the parties
hereto that all of the Obligations shall be the joint and several obligations of
each of the Companies without preferences or distinction among them. If and to
the extent that any of the Companies shall fail to make any payment with respect
to any of the Obligations as and when due or to perform any of the Obligations
in accordance with the terms thereof, then in each such event, the other
Companies will make such payment with respect to, or perform, such Obligation.
Subject to the terms and conditions hereof, the Obligations of each of the
Companies under the provisions of this Paragraph 8.20 constitute the absolute
and unconditional, full recourse Obligations of each of the Companies,
enforceable against each such Company to the full extent of its properties and
assets, irrespective of the validity, regularity or enforceability of this
Agreement, the other Loan Documents or any other circumstances whatsoever. Each
of the Companies hereby agrees that it will not enforce any of its rights of
contribution or subrogation against the other Companies with respect to any
liability incurred by it hereunder or under any of the other Loan Documents, any
payments made by it to Agent with respect to any of the Obligations or any
Collateral, until such time as all of the Obligations have been paid in full in
cash. Any claim which any Company may have against any other Company with
respect to any payments to Agent or Lender hereunder or under any other Loan
Documents are hereby expressly made subordinate and junior in right of payment,
without limitation as to any increases in the Obligations arising hereunder or
thereunder, to the prior payment in full in cash of the Obligations. The
provisions of this Paragraph 8.20 are made for the benefit of the Agent, the
Lenders and their successors and assigns, and may be enforced by them from time
to time against any or all of the Companies as often as occasion therefor may
arise and without requirement on the part of the Agent, the Lenders or such
successors or assigns first to marshal any of its or their claims or to exercise
any of its or their rights against any of the other Companies or to exhaust any
remedies available to it or them against any of the other Companies or to resort
to any other source or means of obtaining payment of any of the Obligations
hereunder or to elect any other remedy. The provisions of this Paragraph 8.20
shall remain in effect until all of the Obligations shall have been paid in full
or otherwise fully satisfied.
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8.21 For purposes of this Agreement and Section 8 hereof, any reference
to a Lender shall include any financial institution which may become a
participant or co-lender subsequent to the Closing Date.
SECTION 9. POWERS
Each Company hereby constitutes Agent, or any person or agent Agent may
designate, as its attorney-in-fact, at the Companies' cost and expense, to
exercise all of the following powers, which being coupled with an interest,
shall be irrevocable until all Obligations to Agent and the Lenders have been
paid in full:
(a) To receive, take, endorse, sign, assign and deliver, all in the
name of Agent or the Companies or any one of them, any and all checks, notes,
drafts, and other documents or instruments relating to the Collateral;
(b) To receive, open and dispose of all mail addressed to the Companies
or any one of them and to notify postal authorities to change the address for
delivery thereof to such address as Agent may designate;
(c) To request from customers indebted on Accounts at any time, in the
name of Agent information concerning the amounts owing on the Accounts;
(d) To request from customers indebted on Accounts at any time, in the
name of the Companies or any one of them, in the name of certified public
accountant designated by Agent or in the name of Agent's designee, information
concerning the amounts owing on the Accounts;
(e) To transmit to customers indebted on Accounts notice of Agent's
interest therein and to notify customers indebted on Accounts to make payment
directly to Agent (subject to the terms of the Ableco/CIT Intercreditor
Agreement) for the Companies' account;
(f) To take or bring, in the name of Agent or the Companies or any one
of them, all steps, actions, suits or proceedings deemed by Agent necessary or
desirable to enforce or effect collection of the Collateral or otherwise to
enforce the rights of the Agent and the Lenders with respect to any Collateral;
and
(g) To execute assignments, licenses and other documents to enforce the
rights of the Agent and the Lenders with respect to the Collateral and or to
record and perfect Agent's and Lenders' security interests in the Collateral.
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Notwithstanding anything hereinabove contained to the contrary, the
powers set forth in (b), (c), (e), (f) and (g) above may only be exercised after
the occurrence of an Event of Default and until such time as such Event of
Default is waived in writing by the Required Lenders.
SECTION 10. EVENTS OF DEFAULT AND REMEDIES
10.1 Notwithstanding anything hereinabove to the contrary, Agent may,
and shall at the request of the Required Lenders, terminate this Agreement
immediately upon the occurrence of any of the following Events of Default:
(a) The cessation of the business of any Loan Party or the calling of a
meeting of the creditors of any Loan Party for purposes of compromising the
debts and obligations of such Loan Party;
(b) The failure of any Loan Party to generally meet its debts as they
mature;
(c) (i) The commencement by any Loan Party of any bankruptcy,
insolvency, arrangement, reorganization, receivership or similar proceedings
under any federal or state law; (ii) the commencement against any Loan Party, of
any bankruptcy, insolvency, arrangement, reorganization, receivership or similar
proceeding under any federal or state law by creditors of such Loan Party, which
proceeding shall not have been controverted within ten (10) days or shall not
have been dismissed and vacated within thirty (30) days of commencement, except
in the event that any of the actions sought in any such proceeding shall occur
or such Loan Party shall take action to authorize or effect any of the actions
in any such proceeding; (iii) the commencement (x) by any Loan Party, or any one
of them, of any bankruptcy, insolvency, arrangement, reorganization,
receivership or similar proceeding under any applicable state law, or (y)
against any Loan Party, or any one of them, of any involuntary bankruptcy,
insolvency, arrangement, reorganization, receivership or similar proceeding
under applicable law, which proceeding shall not have been controverted within
ten (10) days and shall not have been dismissed or vacated within thirty (30)
days of commencement, except in the event that any of the actions sought in any
such proceeding shall occur or any Loan Party's subsidiaries, or any one of
them, shall take action to authorize or effect any of the actions in any such
proceeding; or (iv) any Loan Party shall make a general assignment for the
benefit of its creditors;
(d) The breach by any Loan Party of any warranty, representation or
covenant contained herein (other than those referred to in subparagraph (e)
below) or in any other Loan Document or in any written agreement between such
Company and Agent or any Lender;
(e) The failure of the Companies or any one of them to pay any of the
Obligations when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise);
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(f) (i) Any Loan Party or any of its ERISA Affiliates shall have made a
complete or partial withdrawal from a Multiemployer Plan (other than the Breeze
Plan), and, as a result of such complete or partial withdrawal, any Loan Party
or any of its ERISA Affiliates incurs a withdrawal liability in an annual amount
exceeding $100,000, and, in the case of the Breeze Plan, any Loan Party or any
of its ERISA Affiliates incurs a withdrawal liability in an annual amount
exceeding $750,000; or a Multiemployer Plan enters reorganization status under
Section 4241 of ERISA, and, as a result thereof any Loan Party's or any of its
ERISA Affiliates' annual contribution requirements with respect to such
Multiemployer Plan increases in an annual amount exceeding $100,000; or (ii) any
Termination Event with respect to any Employee Plan shall have occurred, and, 30
days after notice thereof shall have been given to any Loan Party by Agent, (i)
such Termination Event (if correctable) shall not have been corrected, and (ii)
the then current value of such Employee Plan's (other than with respect to the
Masillon Plan) vested benefits exceeds the then current value of assets
allocable to such benefits in such Employee Plan by more than $100,000 (or, in
the case of a Termination Event involving liability under Section 409, 502(i),
502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4971
or 4975 of the Internal Revenue Code, the liability is in excess of such
amount);
(g) Any Loan Party or any of their Subsidiaries shall be liable for any
Environmental Liabilities the payment of which could reasonably be expected to
have a Material Adverse Effect;
(h) The occurrence of any event of default (after giving effect to any
applicable grace or cure periods) under any of the CIT Financing Documents or
under any instrument or agreement evidencing (i) Subordinated Debt, or (ii) any
other Indebtedness of the Loan Parties or any one of them having a principal
amount in excess of $250,000;
(i) Any provision of any Loan Document shall at any time for any reason
(other than pursuant to the express terms thereof) cease to be valid and binding
on or enforceable against any Loan Party intended to be a party thereto, or the
validity or enforceability thereof shall be contested by any party thereto, or a
proceeding shall be commenced by any Loan Party or any Governmental Authority
having jurisdiction over any of them, seeking to establish the invalidity or
unenforceability thereof, or any Loan Party shall deny in writing that it has
any liability or obligation purported to be created under any Loan Document;
(j) Any Security Agreement, any Pledge Agreement, any Mortgage or any
other security document, after delivery thereof pursuant hereto, shall for any
reason fail or cease to create a valid and perfected and, except to the extent
permitted by the terms hereof or thereof, first priority Lien in favor of Agent
for the benefit of the Lenders on any Collateral purported to be covered
thereby;
(k) One or more judgments or orders for the payment of money exceeding
$100,000 in the aggregate shall be rendered against any Loan Party and remain
unsatisfied and either (i) enforcement proceedings shall have been commenced by
any creditor upon any such judgment or order, or (ii) there shall be a period of
10 consecutive days after entry thereof during which a stay of
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enforcement of any such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; PROVIDED, HOWEVER, that any such judgment or
order shall not give rise to an Event of Default under this subsection (k) if
and for so long as (A) the amount of such judgment or order is covered by a
valid and binding policy of insurance between the defendant and the insurer
covering full payment thereof and (B) such insurer has been notified, and has
not disputed the claim made for payment, of the amount of such judgment or
order;
(l) Any Loan Party is enjoined, restrained or in any way prevented by
the order of any court or any Governmental Authority from conducting all or any
material part of its business for more than fifteen (15) consecutive days;
(m) Any material damage to, or loss, theft or destruction of, any
Collateral, whether or not insured, or any strike, lockout, labor dispute,
embargo, condemnation, act of God or public enemy, or other casualty which
causes, for more than fifteen (15) consecutive days, the cessation or
substantial curtailment of revenue producing activities at any facility of any
Loan Party, if any such event or circumstance could reasonably be expected to
have a Material Adverse Effect;
(n) The loss, suspension or revocation of, or failure to renew, any
license or permit now held or hereafter acquired by any Loan Party, if such
loss, suspension, revocation or failure to renew could reasonably be expected to
have a Material Adverse Effect;
(o) The indictment of any Loan Party under any criminal statute, or
commencement of criminal or civil proceedings against any Loan Party, pursuant
to which statute or proceedings the penalties or remedies sought or available
include forfeiture to any Governmental Authority of any material portion of the
property of such Person;
(p) a Change of Control shall have occurred; or
(q) an event or development occurs which could reasonably be expected
to have a Material Adverse Effect.
10.2 Upon the occurrence of an Event of Default, the Agent may (or, if
the Required Lenders otherwise require, shall): (a) declare all or any portion
of the Obligations immediately due and payable, whereupon all or such portion of
the principal of the Term Loan, all accrued and unpaid interest thereon, all
fees and all other amounts payable under this Agreement and the other Loan
Documents shall become due and payable immediately, without presentment, demand,
protest, or further notice of any kind, all of which are expressly waived by
each Company; (b) charge the Companies the Default Rate of Interest on all then
outstanding or thereafter incurred Obligations, provided that, with respect to
this clause (b) Agent has given the Parent written notice of the Event of
Default; provided, however, that no notice is required upon the occurrence of an
Event of Default described in Paragraph 10.1(c) of this Section 10; and (c)
immediately terminate this Agreement upon notice to the Companies, provided,
however, that upon the occurrence of an Event of Default listed in Paragraph
10.1(c) of this Section 10, this Agreement shall automatically terminate and all
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Obligations shall become due and payable, without any action, declaration,
notice or demand by Agent, any Lender or any other Person. The exercise of any
option is not exclusive of any other option, which may be exercised at any time
by Agent or any Lender.
10.3 Immediately upon the occurrence of any Event of Default, Agent
may, to the extent permitted by law: (a) remove from any premises where same may
be located any and all books and records, computers, electronic media and
software programs associated with any Collateral (including any electronic
records, contracts and signatures pertaining thereto), documents, instruments,
files and records, and any receptacles or cabinets containing same, relating to
the Accounts, or Agent may use, at the Companies' expense, such of the
Companies' personnel, supplies or space at the Companies' places of business or
otherwise, as may be necessary to properly administer and control the Accounts
or the handling of collections and realizations thereon; (b) bring suit, in the
name of the Companies or Agent, and generally shall have all other rights
respecting said Accounts, including without limitation the right to: accelerate
or extend the time of payment, settle, compromise, release in whole or in part
any amounts owing on any Accounts and issue credits in the name of the Companies
or Agent; (c) sell, assign and deliver the Collateral and any returned,
reclaimed or repossessed Inventory, with or without advertisement, at public or
private sale, for cash, on credit or otherwise, at Agent's sole option and
discretion, and Agent may bid or become a purchaser at any such sale, free from
any right of redemption, which right is hereby expressly waived by the
Companies; (d) foreclose the security interests in the Collateral created herein
or by the Loan Documents by any available judicial procedure, or to take
possession of any or all of the Collateral, including any Inventory, Equipment
and/or Other Collateral without judicial process, and to enter any premises
where any Inventory and Equipment and/or Other Collateral may be located for the
purpose of taking possession of or removing the same; and (e) exercise any other
rights and remedies provided in law, in equity, by contract or otherwise. Agent
shall have the right, without notice or advertisement, to sell, lease, or
otherwise dispose of all or any part of the Collateral, whether in its then
condition or after further preparation or processing, in the name of the
Companies or Agent, or in the name of such other party as Agent may designate,
either at public or private sale or at any broker's board, in lots or in bulk,
for cash or for credit, with or without warranties or representations (including
but not limited to warranties of title, possession, quiet enjoyment and the
like), and upon such other terms and conditions as Agent in its sole discretion
may deem advisable, and Agent or any Lender shall have the right to purchase at
any such sale. If any Inventory and Equipment shall require rebuilding,
repairing, maintenance or preparation, Agent shall have the right, at its
option, to do such of the aforesaid as is necessary, for the purpose of putting
the Inventory and Equipment in such saleable form as Agent shall deem
appropriate and any such costs shall be deemed an Obligation hereunder. Any
action taken by Agent or any Lender pursuant to this paragraph shall not effect
commercial reasonableness of the sale. The Companies agree, at the request of
Agent, to assemble the Inventory and Equipment and to make it available to Agent
at premises of the Companies or elsewhere and to make available to Agent the
premises and facilities of the Companies for the purpose of Agent's taking
possession of, removing or putting the Inventory and Equipment in saleable form.
If notice of intended disposition of any Collateral is required by law, it is
agreed that ten (10) days notice shall constitute reasonable notification and
full compliance with the law. The
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net cash proceeds resulting from Agent's exercise of any of the foregoing
rights, (after deducting all charges, costs and expenses, including reasonable
attorneys' fees) shall be applied by Agent to the payment of the Obligations,
whether due or to become due, in such order as Agent may elect, and the
Companies shall remain liable to Agent and the Lenders for any deficiencies, and
Agent in turn agrees to remit to the Companies or their successors or assigns,
any surplus resulting therefrom. The enumeration of the foregoing rights is not
intended to be exhaustive and the exercise of any right shall not preclude the
exercise of any other rights, all of which shall be cumulative. The Companies
hereby indemnify Agent and any Lender and hold Agent and any Lender harmless
from any and all costs, expenses, claims, liabilities, Out-of-Pocket Expenses or
otherwise, incurred or imposed on Agent and any Lender by reason of the exercise
of any of its rights, remedies and interests hereunder, including, without
limitation, from any sale or transfer of Collateral, preserving, maintaining or
securing the Collateral, defending its interests in Collateral (including
pursuant to any claims brought by the Companies, the Companies as
debtor-in-possession, any secured or unsecured creditors of the Companies, any
trustee or receiver in bankruptcy, or otherwise), and the Companies hereby agree
to so indemnify and hold Agent and any Lender harmless, absent Agent's or such
Lender's gross negligence or willful misconduct as finally determined by a court
of competent jurisdiction. The foregoing indemnification shall survive
termination of this Agreement until such time as all Obligations (including the
foregoing) have been finally and indefeasibly paid in full.
SECTION 11. TERMINATION
This Agreement shall terminate on the Final Maturity Date, provided
that the Companies or any one of them may terminate this Agreement at any time
upon five (5) days' prior written notice to Agent, subject to the terms and
conditions set forth in this Agreement. Notice of termination, as aforesaid, by
any one Company shall be deemed to be notice by the Companies for purposes
hereof. All Obligations shall become due and payable as of any termination
hereunder or under Section 10 hereof and, pending a final accounting, Agent may
withhold any balances in the Companies' account (unless supplied with an
indemnity satisfactory to Agent) to cover all of the Obligations, whether
absolute or contingent, including, but not limited to, cash reserves for any
contingent Obligations. All of Agent's and each Lender's rights, Liens and
security interests shall continue after any termination until all Obligations
have been paid and satisfied in full.
SECTION 12. AGENT
12.1 Each Lender (and each subsequent maker of any Loan by its making
thereof) hereby irrevocably appoints and authorizes the Agent to perform the
duties of the Agent as set forth in this Agreement including: (i) to receive on
behalf of each Lender any payment of principal of or interest on the Term Loan
outstanding hereunder and all other amounts accrued hereunder for the account of
the Lenders and paid to the Agent, and, subject to terms of this Agreement, to
distribute promptly to
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each Lender its Pro Rata Share of all payments so received; (ii) to distribute
to each Lender copies of all material notices and agreements received by the
Agent and not required to be delivered to each Lender pursuant to the terms of
this Agreement, provided that the Agent shall not have any liability to the
Lenders for the Agent's inadvertent failure to distribute any such notices or
agreements to the Lenders; (iii) to maintain, in accordance with its customary
business practices, ledgers and records reflecting the status of the
Obligations, the Term Loan, and related matters and to maintain, in accordance
with its customary business practices, ledgers and records reflecting the status
of the Collateral and related matters; (iv) to execute or file any and all
financing or similar statements or notices, amendments, renewals, supplements,
documents, instruments, proofs of claim, notices and other written agreements
with respect to this Agreement or any other Loan Document; (v) to make the Term
Loan and Agent Advances, for the Agent or on behalf of the applicable Lenders as
provided in this Agreement or any other Loan Document; (vi) to perform,
exercise, and enforce any and all other rights and remedies of the Lenders with
respect to the Loan Parties, the Obligations, or otherwise related to any of
same to the extent reasonably incidental to the exercise by the Agent of the
rights and remedies specifically authorized to be exercised by the Agent by the
terms of this Agreement or any other Loan Document; (vii) to incur and pay such
fees necessary or appropriate for the performance and fulfillment of its
functions and powers pursuant to this Agreement or any other Loan Document; and
(viii) subject to Paragraph 12.3 of this Agreement, to take such action as the
Agent deems appropriate on its behalf to administer the Term Loan and the Loan
Documents and to exercise such other powers delegated to the Agent by the terms
hereof or the other Loan Documents (including, without limitation, the power to
give or to refuse to give notices, waivers, consents, approvals and instructions
and the power to make or to refuse to make determinations and calculations)
together with such powers as are reasonably incidental thereto to carry out the
purposes hereof and thereof. As to any matters not expressly provided for by
this Agreement and the other Loan Documents (including, without limitation,
enforcement or collection of the Term Loan), the Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Required Lenders, and such
instructions of the Required Lenders shall be binding upon all Lenders and all
makers of the Term Loan; provided, however, that the Agent shall not be required
to take any action which, in the reasonable opinion of the Agent, exposes the
Agent to liability or which is contrary to this Agreement or any other Loan
Document or applicable law.
12.2 The Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement or in the other Loan Documents. The duties
of the Agent shall be mechanical and administrative in nature. The Agent shall
not have by reason of this Agreement or any other Loan Document a fiduciary
relationship in respect of any Lender. Nothing in this Agreement or any other
Loan Document, express or implied, is intended to or shall be construed to
impose upon the Agent any obligations in respect of this Agreement or any other
Loan Document except as expressly set forth herein or therein. Each Lender shall
make its own independent investigation of the financial condition and affairs of
the Loan Parties in connection with the making and the continuance of the Term
Loan hereunder and shall make its own appraisal of the creditworthiness of the
Loan Parties and the value of the Collateral, and the Agent shall have no duty
or responsibility, either initially or
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on a continuing basis, to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession before the
Closing Date or at any time or times thereafter, provided that, upon the
reasonable request of a Lender, the Agent shall provide to such Lender any
documents or reports delivered to the Agent by the Loan Parties pursuant to the
terms of this Agreement or any other Loan Document. If the Agent seeks the
consent or approval of the Required Lenders to the taking or refraining from
taking any action hereunder, the Agent shall send notice thereof to each Lender.
The Agent shall promptly notify each Lender any time that the Required Lenders
have instructed the Agent to act or refrain from acting pursuant hereto.
12.3 The Agent and its directors, officers, agents or employees shall
not be liable for any action taken or omitted to be taken by them under or in
connection with this Agreement or the other Loan Documents, except for their own
gross negligence or willful misconduct as determined by a final judgment of a
court of competent jurisdiction. Without limiting the generality of the
foregoing, the Agent (i) may treat the payee of the Term Loan as the owner
thereof until the Agent receives written notice of the assignment or transfer
thereof, pursuant to Paragraph 13.5 hereof, signed by such payee and in form
satisfactory to the Agent; (ii) may consult with legal counsel (including,
without limitation, counsel to the Agent), independent public accountants, and
other experts selected by any of them and shall not be liable for any action
taken or omitted to be taken in good faith by any of them in accordance with the
advice of such counsel or experts; (iii) make no warranty or representation to
any Lender and shall not be responsible to any Lender for any statements,
certificates, warranties or representations made in or in connection with this
Agreement or the other Loan Documents; (iv) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms, covenants
or conditions of this Agreement or the other Loan Documents on the part of any
Person, the existence or possible existence of any Default or Event of Default,
or to inspect the Collateral or other property (including, without limitation,
the books and records) of any Person; (v) shall not be responsible to any Lender
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto; and (vi) shall not
be deemed to have made any representation or warranty regarding the existence,
value or collectibility of the Collateral, the existence, priority or perfection
of the Agent's Lien thereon, or any certificate prepared by any Loan Party in
connection therewith, nor shall the Agent be responsible or liable to the
Lenders for any failure to monitor or maintain any portion of the Collateral.
The Agent shall not be liable for any apportionment or distribution of payments
made in good faith pursuant to Paragraph 8.14, and if any such apportionment or
distribution is subsequently determined to have been made in error the sole
recourse of any Lender to whom payment was due but not made, shall be to recover
from other Lenders any payment in excess of the amount which they are determined
to be entitled. The Agent may at any time request instructions from the Lenders
with respect to any actions or approvals which by the terms of this Agreement or
of any of the other Loan Documents the Agent is permitted or required to take or
to grant, and if such instructions are promptly requested, the Agent shall be
absolutely entitled to refrain from taking any action or to withhold any
approval under any of the Loan Documents until it shall have received such
instructions from the Required Lenders. Without limiting the foregoing, no
Lender shall have any right of action whatsoever against
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the Agent as a result of the Agent acting or refraining from acting under this
Agreement or any of the other Loan Documents in accordance with the instructions
of the Required Lenders.
12.4 The Agent shall be entitled to rely upon any written notices,
statements, certificates, orders or other documents or any telephone message
believed by it in good faith to be genuine and correct and to have been signed,
sent or made by the proper Person, and with respect to all matters pertaining to
this Agreement or any of the other Loan Documents and its duties hereunder or
thereunder, upon advice of counsel selected by it.
12.5 To the extent that the Agent is not reimbursed and indemnified by
any Loan Party, the Lenders will reimburse and indemnify the Agent from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses, advances or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against the Agent in any way relating to or arising out of this Agreement or any
of the other Loan Documents or any action taken or omitted by the Agent under
this Agreement or any of the other Loan Documents, in proportion to each
Lender's Pro Rata Share, including, without limitation, advances and
disbursements made pursuant to Paragraph 12.8; provided, however, that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, advances or
disbursements for which there has been a final judicial determination that such
liability resulted from the Agent's gross negligence or willful misconduct. The
obligations of the Lenders under this Paragraph 12.5 shall survive the payment
in full of the Loans and the termination of this Agreement.
12.6 With respect to its Pro Rata Share of the Total Term Loan
Commitment hereunder and the Term Loan made by it, the Agent shall have and may
exercise the same rights and powers hereunder and is subject to the same
obligations and liabilities as and to the extent set forth herein for any other
Lender or maker of the Term Loan. The terms "Lenders" or "Required Lenders" or
any similar terms shall, unless the context clearly otherwise indicates, include
the Agent in its individual capacity as a Lender or one of the Required Lenders.
The Agent and its Affiliates may accept deposits from, lend money to, and
generally engage in any kind of banking, trust or other business with any
Company as if it were not acting as the Agent pursuant hereto without any duty
to account to the other Lenders.
12.7 (a) The Agent may resign from the performance of all its functions
and duties hereunder and under the other Loan Documents at any time by giving at
least thirty (30) Business Days' prior written notice to the Administrative
Borrower and each Lender. Such resignation shall take effect upon the acceptance
by a successor Agent of appointment pursuant to clauses (b) and (c) below or as
otherwise provided below.
(b) Upon any such notice of resignation, the Required Lenders shall
appoint a successor Agent. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges
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and duties of the Agent, and the Agent shall be discharged from its duties and
obligations under this Agreement and the other Loan Documents. After the Agent's
resignation hereunder as the Agent, the provisions of this Section 12 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was the Agent under this Agreement and the other Loan Documents.
(c) If a successor Agent shall not have been so appointed within said
thirty (30) Business Day period, the Agent shall then appoint a successor Agent
who shall serve as the Agent until such time, if any, as the Required Lenders
appoint a successor Agent as provided above.
12.8 (a) The Agent may from time to time make such disbursements and
advances ("AGENT ADVANCES") which the Agent, in its sole discretion, deems
necessary or desirable to preserve, protect, prepare for sale or lease or
dispose of the Collateral or any portion thereof, to enhance the likelihood or
maximize the amount of repayment by the Companies of the Term Loan and other
Obligations or to pay any other amount chargeable to the Companies pursuant to
the terms of this Agreement, including, without limitation, costs, fees and
expenses as described in Paragraph 8.8. The Agent Advances shall be repayable on
demand, shall bear interest at the rate provided in Sections 8.1 and 8.2 and be
secured by the Collateral. The Agent Advances shall constitute Obligations
hereunder which may be charged to the Loan Account in accordance with Paragraph
8.12. The Agent shall notify each Lender and the Administrative Borrower in
writing of each such Agent Advance, which notice shall include a description of
the purpose of such Agent Advance. Without limitation to its obligations
pursuant to Paragraph 12.5, each Lender agrees that it shall make available to
the Agent, upon the Agent's demand, in Dollars in immediately available funds,
the amount equal to such Lender's Pro Rata Share of each such Agent Advance. If
such funds are not made available to the Agent by such Lender, the Agent shall
be entitled to recover such funds on demand from such Lender, together with
interest thereon for each day from the date such payment was due until the date
such amount is paid to the Agent, at the Federal Funds Rate for three (3)
Business Days and thereafter at the Reference Rate.
(b) The Lenders hereby irrevocably authorize the Agent, at its option
and in its discretion, to release any Lien granted to or held by the Agent upon
any Collateral upon termination of the Total Term Loan Commitment and payment
and satisfaction of the Term Loan, and all other Obligations which have matured
and which the Agent has been notified in writing are then due and payable; or
constituting property being sold or disposed of in the ordinary course of any
Loan Party's business and in compliance with the terms of this Agreement and the
other Loan Documents; or constituting property in which the Loan Parties owned
no interest at the time the Lien was granted or at any time thereafter; or if
approved, authorized or ratified in writing by the Lenders. Upon request by the
Agent at any time, the Lenders will confirm in writing the Agent's authority to
release particular types or items of Collateral pursuant to this Paragraph
12.8(b).
(c) Without in any manner limiting the Agent's authority to act without
any specific or further authorization or consent by the Lenders (as set forth in
Paragraph 12.8(b)), each Lender agrees to confirm in writing, upon request by
the Agent, the authority to release Collateral conferred
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upon the Agent under Paragraph 12.8(b). Upon receipt by the Agent of
confirmation from the Lenders of its authority to release any particular item or
types of Collateral, and upon prior written request by any Loan Party, the Agent
shall (and is hereby irrevocably authorized by the Lenders to) execute such
documents as may be necessary to evidence the release of the Liens granted to
the Agent for the benefit of the Lenders upon such Collateral; PROVIDED,
HOWEVER, that (i) the Agent shall not be required to execute any such document
on terms which, in the Agent's opinion, would expose the Agent to liability or
create any obligations or entail any consequence other than the release of such
Liens without recourse or warranty, and (ii) such release shall not in any
manner discharge, affect or impair the Obligations or any Lien upon (or
obligations of any Loan Party in respect of) all interests in the Collateral
retained by any Loan Party.
(d) The Agent shall have no obligation whatsoever to any Lender to
assure that the Collateral exists or is owned by the Loan Parties or is cared
for, protected or insured or has been encumbered or that the Lien granted to the
Agent pursuant to this Agreement or any other Loan Document has been properly or
sufficiently or lawfully created, perfected, protected or enforced or is
entitled to any particular priority, or to exercise at all or in any particular
manner or under any duty of care, disclosure or fidelity, or to continue
exercising, any of the rights, authorities and powers granted or available to
the Agent in this Paragraph 12.8 or in any other Loan Document, it being
understood and agreed that in respect of the Collateral, or any act, omission or
event related thereto, the Agent may act in any manner it may deem appropriate,
in its sole discretion, given the Agent's own interest in the Collateral as one
of the Lenders and that the Agent shall have no duty or liability whatsoever to
any other Lender, except as otherwise provided herein.
12.9 Each Lender hereby appoints the Agent and each other Lender as
agent and bailee for the purpose of perfecting the security interests in and
liens upon the Collateral in assets which, in accordance with Article 9 of the
UCC, can be perfected only by possession or control (or where the security
interest of a secured party with possession or control has priority over the
security interest of another secured party) and the Agent and each Lender hereby
acknowledges that it holds possession of or otherwise controls any such
Collateral for the benefit of the Agent and the Lenders as secured party. Should
any Lender obtain possession or control of any such Collateral, such Lender
shall notify the Agent thereof, and, promptly upon the Agent's request therefor
shall deliver such Collateral to the Agent or in accordance with the Agent's
instructions. Each Company by its execution and delivery of this Agreement
hereby consents to the foregoing.
SECTION 13. MISCELLANEOUS
13.1 Each of the Companies hereby waives diligence, demand, presentment
and protest and any notices thereof as well as notice of nonpayment. No delay or
omission of Agent or any Lender or the Companies to exercise any right or remedy
hereunder, whether before or after the happening of any Event of Default, shall
impair any such right or shall operate as a waiver thereof or as a waiver of any
such Event of Default. No single or partial exercise by Agent or any Lender of
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any right or remedy precludes any other or further exercise thereof, or
precludes any other right or remedy. The rights and remedies of the Agent and
the Lenders provided herein and in the other Loan Documents are cumulative and
are in addition to, and not exclusive of, any rights or remedies provided by
law.
13.2 This Agreement and the Loan Documents executed and delivered in
connection therewith constitute the entire agreement between the Companies, the
Agent and the Lenders; supersede any prior agreements; and shall bind and
benefit the Companies, the Agent and each Lender and their respective successors
and assigns, except that the Companies shall not have the right to assign their
rights hereunder or any interest herein without the prior written consent of
each Lender, and any assignment by a Lender shall be governed by Paragraph 13.5
hereof.
13.3 No amendment or waiver of any provision of this Agreement, and no
consent to any departure by any Company therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Required Lenders
or by the Agent with the consent of the Required Lenders, and then such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given, PROVIDED, HOWEVER, that no amendment, waiver or consent
shall (i) increase the Term Loan Commitment of any Lender, reduce the principal
of, or interest on, the Term Loan, reduce the amount of any fee payable for the
account of any Lender, or postpone or extend any date fixed for any payment of
principal of, or interest or fees on, the Term Loan payable to any Lender, in
each case without the written consent of any Lender affected thereby, (ii)
increase the Total Term Loan Commitment without the written consent of each
Lender, (iii) change the percentage of the Term Loan Commitment or of the
aggregate unpaid principal amount of the Term Loan that is required for the
Lenders or any of them to take any action hereunder, (iv) amend the definition
of "Required Lenders" or "Pro Rata Share", (v) release all or a substantial
portion of the Collateral (except as otherwise provided in this Agreement and
the other Loan Documents), subordinate any Lien granted in favor of the Agent
for the benefit of the Lenders (except as provided under the Ableco/CIT
Intercreditor Agreement), or release any Company or any Guarantor, or (vi)
amend, modify or waive Paragraph 8.14 or this Paragraph 13.3 of this Agreement.
Notwithstanding the foregoing, no amendment, waiver or consent shall, unless in
writing and signed by the Agent, affect the rights or duties of the Agent (but
not in its capacity as a Lender) under this Agreement or the other Loan
Documents.
13.4 In no event shall the Companies, upon demand by Agent for payment
of any Indebtedness relating hereto, by acceleration of the maturity thereof, or
otherwise, be obligated to pay interest and fees in excess of the amount
permitted by law. Regardless of any provision herein or in any agreement made in
connection herewith, neither Agent nor any Lender shall ever be entitled to
receive, charge or apply, as interest on any indebtedness relating hereto, any
amount in excess of the maximum amount of interest permissible under applicable
law. If Agent or any Lender ever receives, collects or applies any such excess,
it shall be deemed a partial repayment of principal and treated as such; and if
principal is paid in full, any remaining excess shall be refunded to the
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Companies. This paragraph shall control every other provision hereof, the Loan
Documents and of any other agreement made in connection herewith.
13.5 (a) Each Lender may, with the written consent of the Agent, assign
to one or more other lenders or other entities all or a portion of its rights
and obligations under this Agreement (including, without limitation, all or a
portion of the Term Loan made by it); PROVIDED, HOWEVER, that (i) such
assignment is in an amount which is at least $5,000,000 or a multiple of
$1,000,000 in excess thereof (except such minimum amount shall not apply to an
assignment by a Lender to an Affiliate of such Lender or a fund or account
managed by such Lender or an Affiliate of such Lender), (ii) the parties to each
such assignment shall execute and deliver to the Agent, for its acceptance, an
Assignment and Acceptance, together with any promissory note subject to such
assignment and such parties shall deliver to the Agent a processing and
recordation fee of $5,000 (except the payment of such fee shall not be required
in connection with an assignment by a Lender to an Affiliate of such Lender or a
fund or account managed by such Lender or an Affiliate of such Lender) and (iii)
no written consent of the Agent shall be required in connection with any
assignment by a Lender to an Affiliate of such Lender or a fund or account
managed by such Lender or an Affiliate of such Lender. Upon such execution,
delivery and acceptance, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least three Business
Days after the delivery thereof to the Agent (or such shorter period as shall be
agreed to by the Agent and the parties to such assignment), (A) the assignee
thereunder shall become a "Lender" hereunder and, in addition to the rights and
obligations hereunder held by it immediately prior to such effective date, have
the rights and obligations hereunder that have been assigned to it pursuant to
such Assignment and Acceptance and (B) the assigning Lender thereunder shall, to
the extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto).
(b) By executing and delivering an Assignment and Acceptance, the
assigning Lender and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (A) other than as provided in
such Assignment and Acceptance, the assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
any other Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other Loan Document
furnished pursuant hereto; (B) the assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of any Loan Party or any of its Subsidiaries or the performance or observance by
any Loan Party of any of its obligations under this Agreement or any other Loan
Document furnished pursuant hereto; (C) such assignee confirms that it has
received a copy of this Agreement and the other Loan Documents, together with
such other documents and information it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (D)
such assignee will, independently and without reliance upon the assigning
Lender, the Agent or any Lender and
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based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement and the other Loan Documents; (E) such assignee appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement and the other Loan Documents as are
delegated to the Agent by the terms hereof and thereof, together with such
powers as are reasonably incidental hereto and thereto; and (F) such assignee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement and the other Loan Documents
are required to be performed by it as a Lender.
(c) The Agent shall on behalf of the Company maintain, or cause to be
maintained at the Payment Office, a copy of each Assignment and Acceptance
delivered to and accepted by it and a register (the "Register") for the
recordation of the names and addresses of the Lenders and the Term Loan
Commitment of, and principal amount of the Term Loan (the "Registered Loans").
The entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Companies, the Agent and the Lenders shall treat
each Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Administrative Borrower and any Lender at any reasonable time and from time
to time upon reasonable prior notice. In the case of any assignment not
reflected in the Register, the assigning Lender shall maintain a comparable
register.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee, together with any promissory notes subject to
such assignment, the Agent shall, if the Agent consents to such assignment and
if such Assignment and Acceptance has been completed (i) accept such Assignment
and Acceptance and (ii) record the information contained therein in the
Register.
(e) A Registered Loan (and the registered note, if any, evidencing the
same) may be assigned or sold in whole or in part only by registration of such
assignment or sale on the Register (and each registered note shall expressly so
provide). Any assignment or sale of all or part of such Registered Loan (and the
registered note, if any, evidencing the same) may be effected only by
registration of such assignment or sale on the Register, together with the
surrender of the registered note, if any, evidencing the same duly endorsed by
(or accompanied by a written instrument of assignment or sale duly executed by)
the holder of such registered note, whereupon, at the request of the designated
assignee(s) or transferee(s), one or more new registered notes in the same
aggregate principal amount shall be issued to the designated assignee(s) or
transferee(s). Prior to the registration of assignment or sale of any Registered
Loan (and the registered note, if any, evidencing the same), the Agent shall
treat the Person in whose name such Registered Loan (and the registered note, if
any, evidencing the same) is registered as the owner thereof for the purpose of
receiving all payments thereon and for all other purposes, notwithstanding
notice to the contrary.
(i) In the event that any Lender sells participations in a
Registered Loan, such Lender shall maintain a register on which it enters the
name of all participants in the Registered
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Loans held by it (the "PARTICIPANT REGISTER"). A Registered Loan (and the
registered note, if any, evidencing the same) may be participated in whole or in
part only by registration of such participation on the Participant Register (and
each registered note shall expressly so provide). Any participation of such
Registered Loan (and the registered note, if any, evidencing the same) may be
effected only by the registration of such participation on the Participant
Register.
(ii) Any foreign Person who purchases or is assigned or
participates in any portion of such Registered Loan shall provide the Agent and
the Lender with a completed Internal Revenue Service Form W-8BEN (Certificate of
Foreign Status) or a substantially similar form for such purchaser, participant
or any other affiliate who is a holder of beneficial interests in the Registered
Loan.
(iii) Each Lender may sell participations to one or more banks
or other entities in or to all or a portion of its rights and obligations under
this Agreement and the other Loan Documents (including, without limitation, the
Term Loan made by it; provided, that (i) such Lender's obligations under this
Agreement and the other Loan Documents shall remain unchanged; (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations, and the Companies, the Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and the other Loan
Documents; and (iii) a participant shall not be entitled to require such Lender
to take or omit to take any action hereunder except (A) action directly
effecting an extension of the maturity dates or decrease in the principal amount
of the Term Loan, (B) action directly effecting an extension of the due dates or
a decrease in the rate of interest payable on the Term Loan or the fees payable
under this Agreement, or (C) actions directly effecting a release of all or a
substantial portion of the Collateral or any Loan Party (except as set forth in
Paragraph 12.8 of this Agreement or any other Loan Document). The Companies
agree that each participant shall be entitled to the benefits of Paragraph 8.8
(with respect to Taxes) and Paragraphs 8.10 and 8.11 of this Agreement, in each
case, with respect to its participation in any portion of the Term Loan as if it
was a Lender.
13.6 If any provision hereof or of any other agreement made in
connection herewith is held to be illegal or unenforceable, such provision shall
be fully severable, and the remaining provisions of the applicable agreement
shall remain in full force and effect and shall not be affected by such
provision's severance. Furthermore, in lieu of any such provision, there shall
be added automatically as a part of the applicable agreement a legal and
enforceable provision as similar in terms to the severed provision as may be
possible.
13.7 Any legal action, suit or proceeding with respect to this
Agreement or any other Loan Document may be brought in the courts of the State
of New York or the United States of America for the Southern District of New
York, and appellate courts thereof, and, by execution and delivery of this
Agreement, each Company hereby accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of the aforesaid
courts. Each Company hereby irrevocably waives
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any objection, including, without limitation, any objection to the laying of
venue or based on the grounds of FORUM NON CONVENIENS, which it may now or
hereafter have to the bringing of any such action, suit or proceeding in such
respective jurisdictions and consents to the granting of such legal or equitable
relief as is deemed appropriate by the court.
13.8 Each Company irrevocably consents to the service of process of any
of the aforesaid courts in any such action, suit or proceeding by the mailing of
copies thereof by registered or certified mail (or any substantially similar
form of mail), postage prepaid, to such Company at its address provided herein,
such service to become effective when received or 10 days after such mailing,
whichever first occurs. Nothing herein shall affect the right of the Agent and
the Lenders to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against any Company in any other
jurisdiction.
13.9 EACH OF THE COMPANIES, THE AGENT AND EACH LENDER HEREBY WAIVES ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS, THE TRANSACTIONS CONTEMPLATED HEREUNDER
OR THEREUNDER OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR
OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION
HEREWITH OR THEREWITH, OR ARISING FROM ANY FINANCIAL RELATIONSHIP EXISTING IN
CONNECTION WITH THIS AGREEMENT. EACH OF THE COMPANIES HEREBY IRREVOCABLY WAIVES
PERSONAL SERVICE OF PROCESS AND CONSENTS TO SERVICE OF PROCESS BY CERTIFIED OR
REGISTERED MAIL, RETURN RECEIPT REQUESTED. IN NO EVENT WILL AGENT OR ANY LENDER
BE LIABLE FOR LOST PROFITS OR OTHER SPECIAL OR CONSEQUENTIAL DAMAGES.
13.10 Except as otherwise herein provided, any notice or other
communication required hereunder shall be in writing (provided that, any
electronic communications from any of the Companies with respect to any request,
transmission, document, electronic signature, electronic mail or facsimile
transmission shall be deemed binding on the Companies for purposes of this
Agreement, provided further that any such transmission shall not relieve the
Companies from any other obligation hereunder to communicate further in
writing), and shall be mailed (by certified mail, postage prepaid and return
receipt requested), sent by Federal Express or other recognized courier service
(return receipt requested), telecopied or delivered, to the following address:
(A) if to the Agent, at:
Ableco Finance LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
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With a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
(B) if to the Companies at:
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President, Chief Financial Officer and Treasurer
TransTechnology Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a courtesy copy of any material notice to the Companies counsel at:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇▇ & Parks LLP
▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or as to each party, at such other address as shall be designated by such party
in a written notice to the other parties complying as to delivery with the terms
of this Paragraph 13.10, provided, however, that the failure of Agent or any
Lender to provide the Companies' counsel with a copy of such notice shall not
invalidate any notice given to the Companies and shall not give the Companies
any rights, claims or defenses due to the failure of Agent or any Lender to
provide such additional notice. All such notices and other communications shall
be effective (i) if sent by certified mail, postage prepaid, return receipt
requested, when received or three (3) Business Days after mailing, whichever
first occurs, (ii) if telecopied, when transmitted and confirmation is received,
provided same is on a Business Day and, if not, on the next Business Day or
(iii) if delivered or sent by Federal Express or other recognized courier
service (return receipt requested), upon delivery, provided same is on a
Business Day and, if not, on the next Business Day.
13.11 THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK, EXCEPT TO THE EXTENT THAT ANY OTHER LOAN DOCUMENT INCLUDES AN EXPRESS
ELECTION TO BE GOVERNED BY THE LAWS OF ANOTHER JURISDICTION.
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13.12 Except as otherwise expressly set forth herein to the contrary,
if the consent, approval, satisfaction, determination, judgment, acceptance or
similar action (an "ACTION") of the Agent or any Lender shall be permitted or
required pursuant to any provision hereof or any provision of any other
agreement to which any Company is a party and to which the Agent or any Lender
has succeeded thereto, such Action shall be required to be in writing and may be
withheld or denied by the Agent or such Lender, in its sole discretion, with or
without any reason, and without being subject to question or challenge on the
grounds that such Action was not taken in good faith.
13.13 If any claim is ever made upon the Agent, or any Lender for
repayment or recovery of any amount or amounts received by the Agent or such
Lender in payment or on account of any of the Obligations, the Agent or such
Lender shall give prompt notice of such claim to each other Lender and the
Administrative Borrower, and if the Agent or such Lender repays all or part of
such amount by reason of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over the Agent or such Lender or any of
its property, or (ii) any good faith settlement or compromise of any such claim
effected by the Agent, or Lender with any such claimant, then and in such event
each Company agrees that (A) any such judgment, decree, order, settlement or
compromise shall be binding upon it notwithstanding the cancellation of any
Indebtedness hereunder or under the other Loan Documents or the termination of
this Agreement or the other Loan Documents, and (B) it shall be and remain
liable to the Agent and such Lender hereunder for the amount so repaid or
recovered to the same extent as if such amount had never originally been
received by the Agent or such Lender.
13.14 Each of the Companies hereby irrevocably appoints the Parent as
its borrowing agent and attorney-in-fact for itself (the "Administrative
Borrower") which appointment shall remain in full force and effect unless and
until Agent shall have received prior written notice signed by all of the
Companies that such appointment has been revoked and that another Company
specified in such notice has been appointed Administrative Borrower. Each
Company hereby authorizes the Administrative Borrower (i) to provide to Agent
and to receive from Agent, on its behalf, all notices and instructions under
this Agreement and the other Loans Documents and (ii) to take such action as the
Administrative Borrower deems appropriate on its behalf to exercise such other
powers as are reasonably incidental thereto to carry out the purposes of this
Agreement. It is understood, that notwithstanding the foregoing, the handling of
the Loan Account and Collateral of the Companies in a combined fashion is done
solely as an accommodation for the Companies in order to utilize the collective
bargaining powers of the Companies in the most efficient and economical manner
and at their request, and that neither Agent nor the Lenders shall incur any
liability to the Companies as a result hereof. Each of the Companies expects to
derive benefit, directly or indirectly, from the handling of the Loan Account
and the Collateral in a combined fashion since the successful operation of each
Company is dependent on the continued successful performance of the integrated
group. To induce Agent and the Lenders to deal with the Companies as provided
for in this Section and in consideration thereof, each of the Companies hereby
jointly and severally agrees to indemnify Agent and the Lenders and hold Agent
and the Lenders harmless against any and all liability, expense, loss or claim
of damage or injury, made against Agent and the Lenders by any of the Companies
or by any third party whosoever, arising from or incurred by reason of (a) the
handling of
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the Loan Accounts and Collateral of the Companies as herein provided, (b) Agent
and the Lenders relying on any instructions of the Administrative Borrower, or
(c) any other action taken by Agent or any Lender in accordance with the Loan
Documents, and each of the Companies hereby acknowledges and agrees that it
shall be bound by any notice or other statement made to Agent or any Lender on
its behalf by the Administrative Borrower, whether authorized or not by such
Company.
13.15 The Agent and each Lender agrees (on behalf of itself and each of
its affiliates, directors, officers, employees and representatives) to use
reasonable precautions to keep confidential, in accordance with its customary
procedures for handling confidential information of this nature and in
accordance with safe and sound practices of comparable commercial finance
companies, any non-public information supplied to it by the Loan Parties
pursuant to this Agreement or the other Loan Documents which is identified in
writing by the Loan Parties as being confidential at the time the same is
delivered to such Person (and which at the time is not, and does not thereafter
become, publicly available or available to such Person from another source not
known to be subject to a confidentiality obligation to such Person not to
disclose such information), PROVIDED that nothing herein shall limit the
disclosure of any such information (i) to the extent required by statute, rule,
regulation or judicial process, (ii) to counsel for the Agent or any Lender,
(iii) to examiners, auditors, accountants or Securitization Parties, (iv) in
connection with any litigation to which the Agent or any Lender is a party or
(v) to any assignee or participant (or prospective assignee or participant) so
long as such assignee or participant (or prospective assignee or participant)
first agrees, in writing, to be bound by confidentiality provisions similar in
substance to this Paragraph 13.15. The Agent and each Lender agrees that, upon
receipt of a request or identification of the requirement for disclosure
pursuant to clause (iv) hereof, it will make reasonable efforts to keep the Loan
Parties informed of such request or identification; PROVIDED that the each Loan
Party acknowledges that the Agent and each Lender may make disclosure as
required or requested by any Governmental Authority or representative thereof
and that the Agent and each Lender may be subject to review by Securitization
Parties or other regulatory agencies and may be required to provide to, or
otherwise make available for review by, the representatives of such parties or
agencies any such non-public information.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first set forth above.
TRANSTECHNOLOGY CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President, Secretary and
General Counsel
NORCO, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President and Secretary
TCR CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President and Secretary
ABLECO FINANCE LLC,
as agent and as a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President
EXHIBIT A
ASSIGNMENT FOR SECURITY
----------------------
(TRADEMARKS)
------------
WHEREAS, ____________________ (the "ASSIGNOR") has adopted,
used and is using, and holds all right, title and interest in and to, the
trademarks and service marks listed on the annexed Schedule 1A, which trademarks
and service marks are registered or applied for in the United States Patent and
Trademark Office (the "TRADEMARKS");
WHEREAS, the Assignor, has entered into a Financing Agreement,
dated as of August __, 2002 (as amended, supplemented, restated or otherwise
modified from time to time, the "FINANCING AGREEMENT"), with the lenders from
time to time party thereto (each a "Lender" and collectively, the "Lenders"),
and Ableco Finance LLC, a Delaware limited liability company, as agent for the
Lenders, and as secured party (the "ASSIGNEE");
WHEREAS, pursuant to the Financing Agreement, the Assignor has
assigned to the Assignee and granted to the Assignee a continuing security
interest in all right, title and interest of the Assignor in, to and under the
Trademarks, together with, among other things, the good-will of the business
symbolized by the Trademarks and the applications and registrations thereof, and
all proceeds thereof, including, without limitation, any and all causes of
action which may exist by reason of infringement thereof and any and all damages
arising from past, present and future violations thereof (the "COLLATERAL"), to
secure the payment, performance and observance of the Obligations (as defined in
the Financing Agreement);
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Assignor does
hereby pledge, convey, sell, assign, transfer and set over unto the Assignee and
grants to the Assignee for the benefit of the Lenders a continuing security
interest in the Collateral to secure the prompt payment, performance and
observance of the Obligations.
The Assignor does hereby further acknowledge and affirm that
the rights and remedies of the Assignee with respect to the Collateral are more
fully set forth in the Financing Agreement, the terms and provisions of which
are hereby incorporated herein by reference as if fully set forth herein.
IN WITNESS WHEREOF, the Assignor has caused this Assignment to
be duly executed by its officer thereunto duly authorized as of _____________
__, 20__.
[COMPANY]
By:
-------------------------------------
Name:
Title:
STATE OF ____________
ss.:
COUNTY OF ___________
On this ____ day of _______________, 20__, before me
personally came ________________, to me known to be the person who executed the
foregoing instrument, and who, being duly sworn by me, did depose and say that
he is the ________________ of _______________________________________, a
____________________, and that he executed the foregoing instrument in the firm
name of _______________________________________, and that he had authority to
sign the same, and he acknowledged to me that he executed the same as the act
and deed of said firm for the uses and purposes therein mentioned.
---------------------------
SCHEDULE 1A TO ASSIGNMENT FOR SECURITY
--------------------------------------
(TRADEMARKS AND TRADEMARK APPLICATIONS)
---------------------------------------
EXHIBIT B
ASSIGNMENT FOR SECURITY
-----------------------
(PATENTS)
---------
WHEREAS, ____________________ (the "ASSIGNOR") has adopted,
used and is using, and holds all right, title and interest in the letter
patents, design and utility patents listed on the annexed Schedule 1A, which
patents are issued or applied for in the United States Patent and Trademark
Office (the "PATENTS");
WHEREAS, the Assignor, has entered into a Financing Agreement,
dated as of August __, 2002 (as amended, supplemented, restated or otherwise
modified from time to time, the "FINANCING AGREEMENT"), with the lenders from
time to time party thereto (each a "LENDER" and collectively, the "LENDERS"),
and Ableco Finance LLC, a Delaware limited liability company, as agent for the
Lenders and as secured party (the "ASSIGNEE");
WHEREAS, pursuant to the Financing Agreement, the Assignor has
assigned to the Assignee and granted to the Assignee a continuing security
interest in all right, title and interest of the Assignor in, to and under the
Patents and the applications and registrations thereof, and all proceeds
thereof, including, without limitation, any and all causes of action which may
exist by reason of infringement thereof and any and all damages arising from
past, present and future violations thereof (the "COLLATERAL"), to secure the
payment, performance and observance of the Obligations (as defined in the
Financing Agreement);
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Assignor does
hereby pledge, convey, sell, assign, transfer and set over unto the Assignee and
grants to the Assignee for the benefit of the Lenders a continuing security
interest in the Collateral to secure the prompt payment, performance, and
observance of the Obligations.
The Assignor does hereby further acknowledge and affirm that
the rights and remedies of the Assignee with respect to the Collateral are more
fully set forth in the Financing Agreement, the terms and provisions of which
are hereby incorporated herein by reference as if fully set forth herein.
IN WITNESS WHEREOF, the Assignor has caused this Assignment to
be duly executed by its officer thereunto duly authorized as of _____________
__, 20__.
[COMPANY]
By:
---------------------------------------
Name:
Title:
STATE OF ____________
ss.:
COUNTY OF ___________
On this ____ day of _______________, 20__, before me
personally came ________________, to me known to be the person who executed the
foregoing instrument, and who, being duly sworn by me, did depose and say that
he is the ________________ of _______________________________________, a
____________________, and that he executed the foregoing instrument in the firm
name of _______________________________________, and that he had authority to
sign the same, and he acknowledged to me that he executed the same as the act
and deed of said firm for the uses and purposes therein mentioned.
----------------------------------
SCHEDULE 1A TO ASSIGNMENT FOR SECURITY
--------------------------------------
(PATENTS AND PATENT APPLICATIONS)
---------------------------------
EXHIBIT C
ASSIGNMENT FOR SECURITY
-----------------------
(COPYRIGHTS)
------------
WHEREAS, ____________________ (the "ASSIGNOR") has adopted,
used and is using, and holds all right, title and interest in the copyrights
listed on the annexed Schedule 1A, which copyrights are registered in the United
States Copyright Office (the "COPYRIGHTS");
WHEREAS, the Assignor, has entered into a Financing Agreement,
dated as of August __, 2002 (as amended, supplemented, restated or otherwise
modified from time to time, the "Financing Agreement"), with the lenders from
time to time party thereto (each a "Lender" and collectively, the "Lenders"),
and Ableco Finance LLC, a Delaware limited liability company, as agent for the
Lenders and as secured party (the "Assignee");
WHEREAS, pursuant to the Financing Agreement, the Assignor has
assigned to the Assignee and granted to the Assignee a continuing security
interest in all right, title and interest of the Assignor in, to and under the
Copyrights and the applications and registrations thereof, and all proceeds
thereof, including, without limitation, any and all causes of action which may
exist by reason of infringement thereof and any and all damages arising from
past, present and future violations thereof (the "COLLATERAL"), to secure the
payment, performance and observance of the Obligations (as defined in the
Financing Agreement);
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Assignor does
hereby pledge, convey, sell, assign, transfer and set over unto the Assignee and
grants to the Assignee for the benefit of the Lenders a continuing security
interest in the Collateral to secure the prompt payment, performance, and
observance of the Obligations.
The Assignor does hereby further acknowledge and affirm that
the rights and remedies of the Assignee with respect to the Collateral are more
fully set forth in the Financing Agreement, the terms and provisions of which
are hereby incorporated herein by reference as if fully set forth herein.
IN WITNESS WHEREOF, the Assignor has caused this Assignment to
be duly executed by its officer thereunto duly authorized as of _____________
__, 20__.
[COMPANY]
By:
----------------------------------------
Name:
Title:
STATE OF ____________
ss.:
COUNTY OF ___________
On this ____ day of _______________, 20__, before me
personally came ________________, to me known to be the person who executed the
foregoing instrument, and who, being duly sworn by me, did depose and say that
he is the ________________ of _______________________________________, a
____________________, and that he executed the foregoing instrument in the firm
name of _______________________________________, and that he had authority to
sign the same, and he acknowledged to me that he executed the same as the act
and deed of said firm for the uses and purposes therein mentioned.
------------------------------
SCHEDULE 1A TO ASSIGNMENT FOR SECURITY
--------------------------------------
(COPYRIGHTS AND COPYRIGHT APPLICATIONS)
---------------------------------------