AMENDED AND RESTATED
REVOLVING CREDIT AND SECURITY AGREEMENT
PNC BANK, NATIONAL ASSOCIATION
(AS LENDER AND AS AGENT)
THE LENDERS PARTY HERETO, AND
▇. ▇. ▇▇▇▇▇▇ COMPANY,
CXT INCORPORATED,
NATMAYA, INC.,
AND
FOSMART, INC.
(BORROWERS)
May 5, 2005
TABLE OF CONTENTS
1. DEFINITIONS...........................................................1
1.1 Accounting Terms.......................................1
1.2 General Terms..........................................1
1.3 Uniform Commercial Code Terms.........................17
1.4 Certain Matters of Construction.......................18
2. ADVANCES, PAYMENTS...................................................18
2.1 Revolving Advances; Individual Revolving
Advances; Discretionary Rights........................18
2.2 Procedure for Borrowing Advances......................19
2.3 Disbursement of Advance Proceeds......................21
2.4 Reserved..............................................21
2.5 Maximum Advances......................................21
2.6 Repayment of Advances.................................21
2.7 Repayment of Excess Advances..........................22
2.8 Statement of Account..................................22
2.9 Letters of Credit and Acceptances.....................22
2.10 Issuance of Letters of Credit; Creation of
Acceptances...........................................23
2.11 Requirements For Issuance of Letters of
Credit and Acceptances................................24
2.12 Disbursements, Reimbursement..........................24
2.13 Repayment of Participation Advances...................26
2.14 Documentation.........................................26
2.15 Determination to Honor Drawing Request................26
2.16 Nature of Participation and Reimbursement
Obligations...........................................27
2.17 Indemnity.............................................28
2.18 Liability for Acts and Omissions......................28
2.19 Additional Payments...................................30
2.20 Manner of Borrowing and Payment.......................30
2.21 Use of Proceeds.......................................31
2.22 Defaulting Lender.....................................32
3. INTEREST AND FEES....................................................32
3.1 Interest..............................................32
3.2 Letter of Credit and Acceptance Fees..................33
3.3 Facility Fee..........................................34
3.4 Reserved..............................................34
3.5 Computation of Interest and Fees......................34
3.6 Maximum Charges.......................................34
3.7 Increased Costs.......................................34
3.8 Basis For Determining Interest Rate
Inadequate or Unfair..................................35
3.9 Capital Adequacy......................................36
4. COLLATERAL: GENERAL TERMS...........................................36
4.1 Security Interest in the Collateral...................36
4.2 Perfection of Security Interest.......................37
4.3 Disposition of Collateral.............................37
4.4 Preservation of Collateral............................37
4.5 Ownership of Collateral...............................38
4.6 Defense of Agent's and Lenders'
Interests.............................................38
4.7 Books and Records.....................................39
4.8 Financial Disclosure..................................39
4.9 Compliance with Laws..................................39
4.10 Inspection of Premises................................40
4.11 Insurance.............................................40
4.12 Failure to Pay Insurance..............................41
4.13 Payment of Taxes......................................42
4.14 Payment of Leasehold Obligations......................42
4.15 Receivables...........................................42
4.16 Inventory.............................................45
4.17 Maintenance of Equipment..............................45
4.18 Exculpation of Liability..............................45
4.19 Environmental Matters.................................46
4.20 Financing Statements..................................48
5. REPRESENTATIONS AND WARRANTIES.......................................48
5.1 Authority.............................................48
5.2 Formation and Qualification...........................48
5.3 Survival of Representations and
Warranties............................................49
5.4 Tax Returns...........................................49
5.5 Financial Statements..................................49
5.6 Corporate Name........................................49
5.7 O.S.H.A. and Environmental Compliance.................50
5.8 Solvency; No Litigation, Violation,
Indebtedness or Default...............................50
5.9 Patents, Trademarks, Copyrights
and Licenses..........................................51
5.10 Licenses and Permits..................................52
5.11 Default of Indebtedness...............................52
5.12 No Default............................................52
5.13 No Burdensome Restrictions............................52
5.14 No Labor Disputes.....................................52
5.15 Margin Regulations....................................52
5.16 Investment Company Act................................53
5.17 Disclosure............................................53
5.18 Reserved..............................................53
5.19 Swaps.................................................53
5.20 Conflicting Agreements................................53
5.21 Application of Certain Laws and
Regulations...........................................53
5.22 Business and Property of Borrowers....................53
5.23 Section 20 Subsidiaries...............................54
5.24 Anti-Terrorism Laws...................................54
5.25 Trading with the Enemy................................55
6. AFFIRMATIVE COVENANTS................................................55
6.1 Payment of Fees.......................................55
6.2 Conduct of Business and Maintenance
of Existence and Assets...............................55
6.3 Violations............................................55
6.4 Government Receivables................................55
6.5 Net Worth.............................................56
6.6 Fixed Charge Coverage Ratio...........................56
6.7 Execution of Supplemental Instruments.................56
6.8 Payment of Indebtedness...............................56
6.9 Standards of Financial Statements.....................56
6.10 Updates to Schedules..................................56
7. NEGATIVE COVENANTS...................................................57
7.1 Merger, Consolidation, Acquisition
and Sale of Assets....................................57
7.2 Creation of Liens and Agreements
Relating Thereto......................................58
7.3 Guarantees............................................58
7.4 Investments...........................................59
7.5 Loans.................................................59
7.6 Capital Expenditures..................................59
7.7 Dividends.............................................59
7.8 Indebtedness..........................................60
7.9 Nature of Business....................................60
7.10 Transactions with Affiliates..........................60
7.11 Leases................................................60
7.12 Subsidiaries..........................................61
7.13 Fiscal Year and Accounting Changes....................61
7.14 Pledge of Credit......................................61
7.15 Amendment of Articles of
Incorporation, By-Laws................................61
7.16 Compliance with ERISA.................................61
7.17 Prepayment of Indebtedness............................62
7.18 Anti-Terrorism Laws...................................62
7.19 Trading with the Enemy Act............................62
8. CONDITIONS PRECEDENT.................................................62
8.1 Conditions to Initial Advances........................62
8.2 Conditions to Each Advance............................65
9. INFORMATION AS TO BORROWERS..........................................65
9.1 Disclosure of Material Matters........................65
9.2 Schedules.............................................65
9.3 Environmental Reports.................................66
9.4 Litigation............................................66
9.5 Material Occurrences..................................66
9.6 Government Receivables................................67
9.7 Annual Financial Statements...........................67
9.8 Quarterly Financial Statements........................67
9.9 Monthly Financial Statements..........................67
9.10 Other Reports.........................................68
9.11 Additional Information................................68
9.12 Projected Operating Budget............................68
9.13 Variances from Operating Budget.......................69
9.14 Notice of Suits, Adverse Events.......................69
9.15 ERISA Notices and Requests............................69
9.16 Additional Documents..................................70
10. EVENTS OF DEFAULT...................................................70
11. LENDERS' RIGHTS AND REMEDIES AFTER DEFAULT..........................72
11.1 Rights and Remedies...................................72
11.2 Agent's Discretion....................................73
11.3 Setoff................................................73
11.4 Rights and Remedies not Exclusive.....................74
11.5 Allocation of Payments After
Event of Default......................................74
12. WAIVERS AND JUDICIAL PROCEEDINGS....................................75
12.1 Waiver of Notice......................................75
12.2 Delay.................................................75
12.3 Jury Waiver...........................................75
13. EFFECTIVE DATE AND TERMINATION......................................75
13.1 Term..................................................75
13.2 Termination...........................................76
14. REGARDING AGENT.....................................................76
14.1 Appointment...........................................76
14.2 Nature of Duties......................................77
14.3 Lack of Reliance on Agent and
Resignation...........................................77
14.4 Certain Rights of Agent...............................78
14.5 Reliance..............................................78
14.6 Notice of Default.....................................78
14.7 Indemnification.......................................78
14.8 Agent in its Individual Capacity......................79
14.9 Delivery of Documents.................................79
14.10 Borrowers' Undertaking to Agent.......................79
14.11 No Reliance on Agent's Customer
Identification Program................................79
15. BORROWING AGENCY....................................................80
15.1 Borrowing Agency Provisions...........................80
15.2 Waiver of Subrogation.................................80
16. MISCELLANEOUS.......................................................81
16.1 Governing Law.........................................81
16.2 Entire Understanding..................................81
16.3 Successors and Assigns;
Participations; New Lenders...........................83
16.4 Application of Payments...............................85
16.5 Indemnity.............................................85
16.6 Notice................................................85
16.7 Survival..............................................87
16.8 Severability..........................................87
16.9 Expenses..............................................87
16.10 Injunctive Relief.....................................88
16.11 Consequential Damages.................................88
16.12 Captions..............................................88
16.13 Counterparts; Telecopied Signatures...................88
16.14 Construction..........................................88
16.15 Confidentiality; Sharing Information..................88
16.16 Publicity.............................................89
AMENDED AND RESTATED REVOLVING
CREDIT AND SECURITY AGREEMENT
THIS AMENDED AND RESTATED REVOLVING CREDIT AND SECURITY AGREEMENT is
dated May 5, 2005, by and among ▇. ▇. ▇▇▇▇▇▇ COMPANY, a corporation organized
under the laws of the State of Pennsylvania ("▇▇▇▇▇▇"), CXT INCORPORATED, a
corporation organized under the laws of the State of Delaware ("CXT"), NATMAYA,
INC., a corporation organized under the laws of the State of Delaware
("Natmaya"), and FOSMART, INC., a corporation organized under the laws of the
State of Delaware ("Fosmart") (each a "Borrower" and collectively "Borrowers"),
the financial institutions which are now or which hereafter become a party
hereto (collectively, the "Lenders" and individually a "Lender") and PNC BANK,
NATIONAL ASSOCIATION ("PNC"), as agent for Lenders (PNC, in such capacity, the
"Agent").
IN CONSIDERATION of the mutual covenants and undertakings herein
contained, Borrowers, Lenders and Agent hereby agree as follows:
1. DEFINITIONS
1.1 Accounting Terms.
As used in this Agreement, the Revolving Credit Note or any
certificate, report or other document made or delivered pursuant to this
Agreement, accounting terms not defined in Section 1.2 or elsewhere in this
Agreement and accounting terms partly defined in Section 1.2 to the extent not
defined, shall have the respective meanings given to them under GAAP; provided,
however, whenever such accounting terms are used for the purposes of determining
compliance with financial covenants in this Agreement, such accounting terms
shall be defined in accordance with GAAP as applied in preparation of the
audited financial statements of Borrowers for the fiscal year ended December 31,
2004.
1.2 General Terms.
For purposes of this Agreement the following terms shall have the
following meanings:
"Acceptances" shall mean any existing and future drafts which involve
any Borrower or beneficiary under a Letter of Credit as drawer that are
processed and accepted for payment by Agent or other accepting bank in its
absolute discretion.
"Accountants" shall have the meaning set forth in Section 9.7 hereof.
"Advances" shall mean and include the Revolving Advances, Acceptances
and Letters of Credit.
"Advance Rates" shall have the meaning set forth in Section 2.1(a)
hereof.
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"Affiliate" of any Person shall mean (a) any Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with
such Person, or (b) any Person who is a director or officer (i) of such Person,
(ii) of any Subsidiary of such Person or (iii) of any Person described in clause
(a) above. For purposes of this definition, control of a Person shall mean the
power, direct or indirect, (x) to vote 20% or more of the securities having
ordinary voting power for the election of directors of such Person, or (y) to
direct or cause the direction of the management and policies of such Person
whether by contract or otherwise. A Person shall not be deemed an Affiliate of
another Person solely because the Person has directors and/or officers in common
with such other Person.
"Agent" shall have the meaning set forth in the preamble to this
Agreement and shall include its successors and assigns.
"Agreement" shall mean this Amended and Restated Revolving Credit and
Security Agreement, as the same may be amended, restated, supplemented or
otherwise modified from time to time.
"Alternate Base Rate" shall mean, for any day, a rate per annum equal
to the higher of (a) the Base Rate in effect on such day and (b) the Federal
Funds Open Rate in effect on such day plus 1/2 of 1%.
"Anti-Terrorism Laws" shall mean any Applicable Laws relating to
terrorism or money laundering, including Executive Order No. 13224, the USA
Patriot Act, the Applicable Laws comprising or implementing the Bank Secrecy
Act, and the Applicable Laws administered by the United States Treasury
Department's Office of Foreign Asset Control (as any of the foregoing Applicable
Laws may from time to time be amended, renewed, extended, or replaced).
"Applicable Margin" shall mean, as applicable:
(A) the percentage spread to be added to or subtracted from
the Alternate Base Rate at the indicated level of Fixed Charge Coverage Ratio in
the pricing grid on Schedule 1.2(A) below the heading "Alternate Base Rate
Spread," or
(B) the percentage spread to be added to the Eurodollar Rate
at the indicated level of Fixed Charge Coverage Ratio in the pricing grid on
Schedule 1.2(A) below the heading "Eurodollar Rate Spread."
The Applicable Margin shall be computed in accordance with the
parameters set forth on Schedule 1.2(A).
"Authority" shall have the meaning set forth in Section 4.19(d).
"Banker's Acceptance Rate" shall mean with respect to any Acceptance
hereunder, a discount charge (calculated with respect to the face amount of such
Acceptance on the basis of a 360-day year for the number of days from the date
such Acceptance is accepted by the accepting bank (the "Acceptance Date") to its
maturity date) at a rate per annum equal to the sum of (a) the discount rate in
the New York banker's acceptance market on the Acceptance Date as
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determined by the accepting bank in its sole discretion, plus (b) the Applicable
Margin (as set forth on Schedule 1.2(A)) for the Eurodollar Rate minus one-
fourth percent (.25%).
"Base Rate" shall mean the base commercial lending rate of PNC as
publicly announced to be in effect from time to time, such rate to be adjusted
automatically, without notice, on the effective date of any change in such rate.
This rate of interest is determined from time to time by PNC as a means of
pricing some loans to its customers and is neither tied to any external rate of
interest or index nor does it necessarily reflect the lowest rate of interest
actually charged by PNC to any particular class or category of customers of PNC.
"Blocked Accounts" shall have the meaning set forth in Section 4.15(h).
"Blocked Person" shall have the meaning set forth in Section 5.24(b)
hereof.
"Borrower" or "Borrowers" shall have the meaning set forth in the
preamble to this Agreement and shall extend to all permitted successors and
assigns of such Persons, but shall not include any Person which has dissolved or
otherwise ceased to have a separate legal existence in a manner permitted by the
Agreement.
"Borrowing Base Certificate" shall mean a certificate duly executed by
an officer of Borrowing Agent appropriately completed and in substantially the
form of Exhibit A hereto.
"Borrowers on a consolidated basis" shall mean the ▇▇▇▇▇▇, CXT, Natmaya
and Fosmart.
"Borrowers' Account" shall have the meaning set forth in Section 2.8.
"Borrowing Agent" shall mean ▇▇▇▇▇▇.
"Business Day" shall mean any day other than Saturday or Sunday or a
legal holiday on which commercial banks are authorized or required by law to be
closed for business in East Brunswick, New Jersey and, if the applicable
Business Day relates to any Eurodollar Rate Loans, such day must also be a day
on which dealings are carried on in the London interbank market.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. ss.ss.9601 et seq.
"Change of Control" shall mean (i) any person or group of persons
(within the meaning of Sections 13(d) or 14(a) of the Securities Exchange Act of
1934, as amended) shall have acquired beneficial ownership of (within the
meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission
under said Act) 20% or more of the voting capital stock of ▇▇▇▇▇▇; or (ii)
within a period of twelve (12) consecutive calendar months, individuals who were
directors of ▇▇▇▇▇▇ on the first day of such period shall cease to constitute a
majority of the board of directors of ▇▇▇▇▇▇, provided however, that persons who
replace directors of ▇▇▇▇▇▇ who cease to be directors as a result of death,
disability or personal reasons unrelated to the business of ▇▇▇▇▇▇ shall be
deemed to have been directors of ▇▇▇▇▇▇ at all times during the relevant twelve
(12) month period.
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"Change of Ownership" shall mean, except as otherwise permitted under
Section 7.1, (a) ▇▇▇▇▇▇ shall cease to own, directly or indirectly, 100% of the
capital stock of the other Borrowers, or (b) any merger, consolidation or sale
of substantially all of the property or assets of any Borrower.
"Charges" shall mean all taxes, charges, fees, imposts, levies or other
assessments, including, without limitation, all net income, gross income, gross
receipts, sales, use, ad valorem, value added, transfer, franchise, profits,
inventory, capital stock, license, withholding, payroll, employment, social
security, unemployment, excise, severance, stamp, occupation and property taxes,
custom duties, fees, assessments, liens, claims and charges of any kind
whatsoever, together with any interest and any penalties, additions to tax or
additional amounts, imposed by any taxing or other authority, domestic or
foreign (including, without limitation, the Pension Benefit Guaranty Corporation
or any environmental agency or superfund), upon the Collateral, any Borrower or
any of its Affiliates.
"Closing Date" shall mean May 5, 2005 or such other date as may be
agreed to by the parties hereto.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated thereunder.
"Collateral" shall mean and include:
(a) all Receivables;
(b) all General Intangibles;
(c) all Inventory;
(d) all of each Borrower's right, title and interest in and to (i) all
merchandise returned or rejected by Customers, relating to or securing any of
the Receivables; (ii) all of each Borrower's rights as a consignor, a consignee,
an unpaid vendor, mechanic, artisan, or other lienor, including stoppage in
transit, setoff, detinue, replevin, reclamation and repurchase; (iii) all
additional amounts due to any Borrower from any Customer relating to the
Receivables; (iv) warranty claims relating to any goods securing this Agreement;
(v) all of each Borrower's contract rights, rights of payment which have been
earned under a contract right, instruments (including promissory notes),
documents, chattel paper (including electronic chattel paper), warehouse
receipts, deposit accounts, letters of credit, and money; (vi) all commercial
tort claims (whether now existing or hereafter arising); (vii) if and when
obtained by any Borrower, all real and personal property of third parties in
which such Borrower has been granted a lien or security interest as security for
the payment or enforcement of Receivables; and (viii) any other personal
property or real property now owned or hereafter acquired in which any Borrower
has expressly granted a security interest or may in the future grant a security
interest to Agent hereunder, or in any amendment or supplement hereto or
thereto, or under any other agreement between Agent and any Borrower;
(e) all of each Borrower's ledger sheets, ledger cards, files,
correspondence, records, books of account, business papers, computers, computer
software (owned by any Borrower or in
5
which it has an interest), computer programs, tapes, disks and documents
relating to (a), (b), (c) or (d) of this Paragraph; and
(f) all proceeds and products of (a), (b), (c), (d) and (e) in whatever
form, including, but not limited to: cash, deposit accounts (whether or not
comprised solely of proceeds), certificates of deposit, insurance proceeds
(including hazard, flood and credit insurance), negotiable instruments and other
instruments for the payment of money, chattel paper, security agreements,
documents, eminent domain proceeds, condemnation proceeds and tort claim
proceeds.
Notwithstanding the foregoing, the Collateral expressly excludes
Equipment, Investment Property and Real Property.
"Commitment Percentage" of any Lender shall mean the percentage set
forth below such Lender's name on the signature page hereof as same may be
adjusted upon any assignment by a Lender pursuant to Section 16.3(b) hereof.
"Commitment Transfer Supplement" shall mean a document in the form of
Exhibit 16.3 hereto, properly completed and otherwise in form and substance
satisfactory to Agent by which the Purchasing Lender purchases and assumes a
portion of the obligation of Lenders to make Advances under this Agreement.
"Consents" shall mean all filings and all licenses, permits, consents,
approvals, authorizations, qualifications and orders of governmental authorities
and other third parties, domestic or foreign, necessary to carry on any
Borrower's business, including, without limitation, any Consents required under
all applicable federal, state or other applicable law.
"Controlled Group" shall mean all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with any Borrower, are treated as a single
employer under Section 414 of the Code.
"Customer" shall mean and include the account debtor with respect to
any Receivable and/or the prospective purchaser of goods, services or both with
respect to any contract or contract right, and/or any party who enters into or
proposes to enter into any contract or other arrangement with any Borrower,
pursuant to which such Borrower is to deliver any personal property or perform
any services.
"CXT" shall mean CXT Incorporated, a corporation organized under the
laws of the State of Delaware
"Default" shall mean an event which, with the giving of notice or
passage of time or both, would constitute an Event of Default.
"Default Rate" shall have the meaning set forth in Section 3.1 hereof.
"Defaulting Lender" shall have the meaning set forth in Section 2.22(a)
hereof.
"Depository Accounts" shall have the meaning set forth in Section
4.15(h) hereof.
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"DM&E" shall mean Dakota, Minnesota & Eastern Railroad Corporation, a
corporation incorporated under the laws of the state of Delaware.
"Documents" shall have the meaning set forth in Section 8.1(c) hereof.
"Dollar" and the sign "$" shall mean lawful money of the United States
of America.
"Domestic Rate Loan" shall mean any Advance that bears interest based
upon the Alternate Base Rate.
"Earnings Before Interest and Taxes" shall mean for any period the sum
of (a) net income (or loss) of Borrowers on a consolidated basis for such
period, plus non-operating and non-recurring items such as, but not limited to
extraordinary items and cumulative changes in accounting principles, plus (b)
all interest expense of Borrowers on a consolidated basis for such period, plus
(c) all charges against income of Borrowers on a consolidated basis for such
period for federal, state and local taxes, plus (d) non-cash expenses in
connection with Borrowers' employee stock option plan.
"EBITDA" shall mean for any period the sum of (a) Earnings Before
Interest and Taxes for such period, plus (b) depreciation expenses for such
period, plus (c) amortization expenses for such period.
"Eligible Inventory" shall mean and include Inventory (work in process
may be deemed not to be Eligible Inventory at the discretion of the Agent) with
respect to each Borrower valued at the lower of cost or market value, determined
on a first-in-first-out basis, which is not, in Agent's opinion, obsolete, slow
moving or unmerchantable and which Agent, in its reasonable discretion, shall
not deem ineligible Inventory, based on such considerations as Agent may from
time to time deem appropriate including, without limitation, whether the
Inventory is subject to a perfected, first priority security interest in favor
of Agent and whether the Inventory conforms to all standards imposed by any
governmental agency, division or department thereof which has regulatory
authority over such goods or the use or sale thereof.
"Eligible Receivables" shall mean and include with respect to each
Borrower, each Receivable of such Borrower arising in the ordinary course of
such Borrower's business, which is not, in Agent's reasonable credit judgment,
ineligible, based on such considerations as Agent may from time to time deem
appropriate. A Receivable shall not be deemed eligible unless such Receivable is
subject to Agent's first priority perfected security interest and no other Lien
(other than Permitted Encumbrances), and is evidenced by an invoice or other
documentary evidence satisfactory to Agent. In addition, no Receivable shall be
an Eligible Receivable if:
(a) it arises out of a sale made by any Borrower to an Affiliate of any Borrower
or to a Person controlled by an Affiliate of any Borrower;
(b) it is due or unpaid more than sixty (60) after the original due date or more
than one hundred twenty (120) days after the original invoice date;
(c) fifty percent (50%) or more of the Receivables from such Customer are
not deemed Eligible Receivables hereunder;
7
(d) any covenant, representation or warranty contained in this Agreement with
respect to such Receivable has been breached;
(e) the Customer shall (i) apply for, suffer, or consent to the appointment of,
or the taking of possession by, a receiver, custodian, trustee or liquidator of
itself or of all or a substantial part of its property or call a meeting of its
creditors, (ii) admit in writing its inability, or be generally unable, to pay
its debts as they become due or cease operations of its present business, (iii)
make a general assignment for the benefit of creditors, (iv) commence a
voluntary case under any state or federal bankruptcy laws (as now or hereafter
in effect), (v) be adjudicated a bankrupt or insolvent, (vi) file a petition
seeking to take advantage of any other law providing for the relief of debtors,
(vii) acquiesce to, or fail to have dismissed, any petition which is filed
against it in any involuntary case under such bankruptcy laws, or (viii) take
any action for the purpose of effecting any of the foregoing; provided however,
if all other criteria for Eligible Receivables other than this item (e) are
satisfied, then at the discretion of the Agent, Receivables arising from sales
to Customers after the filing of a bankruptcy petition under Chapter 11 of Title
11 of the United Stated Code by such Customer may be included in Eligible
Receivables;
(f) the sale is to a Customer outside the continental United States of America
or Canada, unless the sale is on letter of credit, guaranty or acceptance terms,
in each case acceptable to Agent in its reasonable discretion;
(g) the sale to the Customer is on a ▇▇▇▇-and-hold, guaranteed sale,
sale-and-return, sale on approval, consignment or any other repurchase or return
basis; provided however, at the Agent's discretion based upon review of the
contract terms, Receivables based upon production of Inventory specific to a
Customer which has not yet been shipped to the Customer shall not be excluded
from Eligible Receivables;
(h) the Receivable is evidenced by chattel paper which has not been delivered to
the Agent, other than Receivables arising from rental arrangements for piling
and related products leased by a Borrower to the Customer;
(i) Agent believes, in its sole judgment, that collection of such Receivable is
insecure or that such Receivable may not be paid by reason of the Customer's
financial inability to pay;
(j) the Customer is the United States of America, any state or any department,
agency or instrumentality of any of them, unless the applicable Borrower assigns
its right to payment of such Receivable to Agent pursuant to the Assignment of
Claims Act of 1940, as amended (31 U.S.C. Sub-Section 3727 et seq. and 41 U.S.C.
Sub-Section 15 et seq.) or has otherwise complied with other applicable statutes
or ordinances;
(k) the goods giving rise to such Receivable have not been shipped to the
Customer (other than as permitted under item (g) above) or the services giving
rise to such Receivable have not been performed by the applicable Borrower or
the Receivable otherwise does not represent a final sale;
(l) the Receivables of the Customer exceed a credit limit determined by Agent,
in its reasonable discretion, to the extent such Receivable exceeds such limit;
8
(m) the Receivable is subject to any offset, deduction, defense, dispute, or
counterclaim, provided however, that portion of the Receivable which is not
subject to offset or deduction at the discretion of the Agent and meets the
other criteria for Eligible Receivables may be included in Eligible Receivables;
(n) the Receivable is contingent in any respect or for any reason;
(o) the applicable Borrower has made any agreement with any Customer for any
deduction therefrom, except for discounts or allowances made in the ordinary
course of business for prompt payment, all of which discounts or allowances are
reflected in the calculation of the face value of each respective invoice
related thereto;
(p) any return, rejection or repossession of the merchandise has occurred or the
rendition of services has been disputed;
(q) such Receivable is not payable to a Borrower; or
(r) such Receivable is not otherwise satisfactory to Agent as determined in good
faith by Agent in the exercise of its discretion in a reasonable manner.
"Environmental Complaint" shall have the meaning set forth in Section
4.19(d) hereof.
"Environmental Laws" shall mean all federal, state and local
environmental, land use, zoning, health, chemical use, safety and sanitation
laws, statutes, ordinances and codes relating to the protection of the
environment and/or governing the use, storage, treatment, generation,
transportation, processing, handling, production or disposal of Hazardous
Substances and the rules, regulations, policies, guidelines, interpretations,
decisions, orders and directives of federal, state and local governmental
agencies and authorities with respect thereto.
"Equipment" shall mean and include as to each Borrower all of such
Borrower's goods (other than Inventory) which are owned by the Borrower or are
leased to the Borrower as lessee, whether now owned or hereafter acquired and
wherever located including, without limitation, all equipment, machinery,
apparatus, motor vehicles, fittings, furniture, furnishings, fixtures, parts,
accessories and all replacements and substitutions therefor or accessions
thereto.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time and the rules and regulations promulgated
thereunder.
"Eurodollar Rate" shall mean for any Eurodollar Rate Loan for the then
current Interest Period relating thereto the interest rate per annum determined
by Agent by dividing (the resulting quotient rounded upwards, if necessary, to
the nearest 1/100th of 1% per annum) (i) the rate of interest determined by
Agent in accordance with its usual procedures (which determination shall be
conclusive absent manifest error) to be the average of the London interbank
offered rates for U.S. Dollars quoted by the British Bankers' Association as set
forth on Moneyline Telerate (or appropriate successor or, if British Banker's
Association or its successor ceases to provide such quotes, a comparable
replacement determined by Agent) display page 3750 (or such other display page
on the Moneyline Telerate system as may replace display page 3750) two (2)
Business Days prior to the first day of such Interest Period for an amount
comparable to such
9
Eurodollar Rate Loan and having a borrowing date and a maturity comparable to
such Interest Period by (ii) a number equal to 1.00 minus the Reserve
Percentage. The Eurodollar Rate may also be expressed by the following formula:
Average of London interbank offered rates quoted by BBA as shown on
Eurodollar Rate = Moneyline Telerate Service display page 3750 or appropriate
successor 1.00 - Reserve Percentage.
"Eurodollar Rate Loan" shall mean an Advance at any time that bears
interest based on the Eurodollar Rate.
"Event of Default" shall mean the occurrence of any of the events set
forth in Article 10 hereof.
"Executive Order No. 13224" shall mean the Executive Order No. 13224 on
Terrorist Financing, effective September 24, 2001, as the same has been, or
shall hereafter be, renewed, extended, amended or replaced.
"Existing Credit Facility" shall mean that certain Revolving Credit and
Security Agreement dated as of September 26, 2002, as amended, among the
Borrowers, the Agent and the Lenders.
"Facility Fee" shall mean the percentage rate per annum at the
indicated level of Fixed Charge Coverage Ratio in the pricing grid on Schedule
1.2(A) below the heading "Facility Fee." The Facility Fee shall be computed in
accordance with the parameters set forth on Schedule 1.2(A).
"Federal Funds Effective Rate" for any day shall mean the rate per
annum (based on a year of 360 days and actual days elapsed and rounded upward to
the nearest 1/100 of 1%) announced by the Federal Reserve Bank of New York (or
any successor) on such day as being the weighted average of the rates on
overnight federal funds transactions arranged by federal funds brokers on the
previous trading day, as computed and announced by such Federal Reserve Bank (or
any successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the "Federal Funds
Effective Rate" as of the date of this Agreement; provided, if such Federal
Reserve Bank (or its successor) does not announce such rate on any day, the
"Federal Funds Effective Rate" for such day shall be the Federal Funds Effective
Rate for the last day on which such rate was announced.
"Federal Funds Open Rate" shall mean the rate per annum determined by
the Agent in accordance with its usual procedures (which determination shall be
conclusive absent manifest error) to be the "open" rate for federal funds
transactions as of the opening of business for federal funds transactions among
members of the Federal Reserve System arranged by federal funds brokers on such
day, as quoted by ▇▇▇▇▇▇ Guybutler Corporation, any successor entity thereto, or
any other broker selected by the Agent, as set forth on the applicable Telerate
display page; provided, however; that if such day is not a Business Day, the
Federal Funds Open Rate for such day shall be the "open" rate on the immediately
preceding Business Day, or if no such rate shall be quoted by a Federal funds
broker at such time, such other rate as determined by the Agent in accordance
with its usual procedures.
10
"Fee Letter" shall mean the fee letter dated May 5, 2005 among
Borrowers and PNC.
"Fixed Charges" shall mean for any period the sum of Borrowers'
consolidated cash interest expense, principal payments (excluding Advances) with
respect to Indebtedness for borrowed money and capital leases and dividends,
distributions and redemptions permitted under Section 7.7, all the foregoing of
Borrowers as determined and consolidated in accordance with GAAP.
"Fixed Charge Coverage Ratio" shall mean and include, with respect to
any period, the ratio of (a) EBITDA plus non-cash charges, minus noncash income,
minus Net Capital Expenditures, minus Permitted Acquisition Financing minus
taxes actually paid by Borrowers on a consolidated basis to (b) Fixed Charges,
in the case of each of the foregoing during such period.
"Formula Amount" shall have the meaning set forth in Section 2.1.
"Fosmart" shall mean Fosmart, Inc., a corporation organized under the
laws of the State of Delaware.
"▇▇▇▇▇▇" shall mean ▇. ▇. ▇▇▇▇▇▇ Company, a corporation organized under
the laws of the Commonwealth of Pennsylvania.
"GAAP" shall mean generally accepted accounting principles in the
United States of America in effect from time to time.
"General Intangibles" shall mean and include as to each Borrower all of
such Borrower's general intangibles, whether now owned or hereafter acquired
including, without limitation, all payment intangibles, choses in action, causes
of action, corporate or other business records, customer lists, computer
programs, all claims under guaranties, security interests or other security held
by or granted to such Borrower to secure payment of any of the Receivables by a
Customer (other than to the extent covered by Receivables) all rights of
indemnification relating to Receivables and all other intangible property of
every kind and nature relating to Receivables (other than Receivables). General
Intangibles shall include inventions, designs, patents, patent applications,
equipment formulations, manufacturing procedures, quality control procedures,
trademarks, service marks, trade secrets, goodwill, copyrights, design rights,
software, computer information, source codes, codes, records and dates,
registrations, licenses, and franchises which are necessary or useful to the
sale or other disposition of Inventory or to the collection or disposition of
Receivables.
"Governmental Body" shall mean any nation or government, any state or
other political subdivision thereof or any entity exercising the legislative,
judicial, regulatory or administrative functions of or pertaining to a
government.
"Hazardous Discharge" shall have the meaning set forth in Section
4.19(d) hereof.
"Hazardous Substance" shall mean, without limitation, any flammable
explosives, radon, radioactive materials, asbestos, urea formaldehyde foam
insulation, polychlorinated biphenyls, petroleum and petroleum products,
methane, hazardous materials, Hazardous Wastes, hazardous
11
or Toxic Substances or related materials as defined in CERCLA, the Hazardous
Materials Transportation Act, as amended (49 U.S.C. Sections 1801, et. seq.),
RCRA, or any other applicable Environmental Law and in the regulations adopted
pursuant thereto.
"Hazardous Wastes" shall mean all waste materials subject to regulation
under CERCLA, RCRA or applicable state law, and any other applicable Federal and
state laws now in force or hereafter enacted relating to hazardous waste
disposal.
"Indebtedness" of a Person at a particular date shall mean all
obligations of such Person which in accordance with GAAP would be classified
upon a balance sheet as liabilities (except capital stock and surplus earned or
otherwise) and in any event, without limitation by reason of enumeration, shall
include all indebtedness, debt and other similar monetary obligations of such
Person whether direct or guaranteed, and all premiums, if any, due at the
required prepayment dates of such indebtedness, and all indebtedness secured by
a Lien on assets owned by such Person, whether or not such indebtedness actually
shall have been created, assumed or incurred by such Person. Any indebtedness of
such Person resulting from the acquisition by such Person of any assets subject
to any Lien shall be deemed, for the purposes hereof, to be the equivalent of
the creation, assumption and incurring of the indebtedness secured thereby,
whether or not actually so created, assumed or incurred.
"Ineligible Security" shall mean any security which may not be
underwritten or dealt in by member banks of the Federal Reserve System under
Section 16 of the Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as
amended.
"Interest Period" shall mean the period provided for any Eurodollar
Rate Loan pursuant to Section 2.2(b).
"Inventory" shall mean and include as to each Borrower all of such
Borrower's now owned or hereafter acquired goods (other than Equipment),
merchandise and other personal property, wherever located, to be furnished under
any consignment arrangement, contract of service or held for sale or lease, all
raw materials, work in process, finished goods and materials and supplies of any
kind, nature or description which are or might be used or consumed in such
Borrower's business or used in selling or furnishing such goods, merchandise and
other personal property, and all documents of title or other documents
representing them.
"Inventory Advance Rate" shall have the meaning set forth in Section
2.1(a)(y)(ii) hereof.
"Investment Property" shall mean and include as to each Borrower, all
of such Borrower's now owned or hereafter acquired securities (whether
certificated or uncertificated), securities entitlements, securities accounts,
commodities contracts and commodities accounts.
"Issuer" shall mean any Person who issues a Letter of Credit and/or
accepts a draft pursuant to the terms hereof.
"Lender" and "Lenders" shall have the meaning ascribed to such term in
the preamble to this Agreement and shall include each Person which becomes a
transferee, successor or assign of any Lender.
12
"Letter of Credit and Acceptance Fees" shall have the meaning set forth
in Section 3.2.
"Letters of Credit" shall have the meaning set forth in Section 2.9.
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, security interest, lien (whether statutory or otherwise), Charge,
claim or encumbrance, or preference, priority or other security agreement or
preferential arrangement held or asserted in respect of any asset of any kind or
nature whatsoever including, without limitation, any conditional sale or other
title retention agreement, any lease having substantially the same economic
effect as any of the foregoing, and the filing of, or agreement to give, any
financing statement under the Uniform Commercial Code or comparable law of any
jurisdiction.
"Material Adverse Effect" shall mean a material adverse effect (a) the
condition, operations, assets, business or prospects of the Borrowers taken as a
whole, (b) the Borrowers' ability to pay the Obligations in accordance with the
terms thereof, (c) the value of the Collateral, or Agent's Liens on the
Collateral or the priority of any such Lien or (d) the practical realization of
the benefits of Agent's and each Lender's rights and remedies under this
Agreement and the Other Documents.
"Maximum Face Amount" shall mean with respect to any Letter of Credit,
the face amount of such Letter of Credit including all automatic increases
provided for in such letter of Credit, whether or not any such automatic
increase has become effective.
"Maximum Revolving Advance Amount" shall mean $60,000,000.
"Maximum Undrawn Amount" shall mean with respect to any outstanding
Letter of Credit, the amount of such Letter of Credit that is or may become
available to be drawn, including all automatic increases provided for in such
Letter of Credit, whether or not any such automatic increase has become
effective.
"Minimum Availability Threshold" at a particular date shall mean that
(i) prior to such date, Undrawn Availability has not been less than Five Million
Dollars ($5,000,000) for five (5) consecutive days or more, or (ii) in the event
that Undrawn Availability has been less than Five Million Dollars ($5,000,000)
for five (5) consecutive days or more, then subsequent to such period the
Borrowers have maintained the Restoration Threshold.
"Monthly Advances" shall have the meaning set forth in Section 3.1
hereof.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Sections 3(37) and 4001(a)(3) of ERISA.
"Natmaya" shall mean Natmaya, Inc., a corporation organized under the
laws of the State of Delaware.
"Net Capital Expenditures" shall mean for any period the difference
between capital expenditures of the Borrowers (excluding capital expenditures
which are funded from credit extended by Persons other than the Lenders and
capital expenditures related to the Union Pacific Project which are funded with
Revolving Advances not in excess of $3,000,000) minus net cash
13
proceeds received by the Borrowers from the sale of capital assets of the
Borrowers; provided however, if Net Capital Expenditures is an amount less than
zero (0), then Net Capital Expenditures shall be deemed to be zero (0).
"Net Proceeds of Significant Asset Sales" shall mean with respect to
all sales of assets by the Borrowers outside the ordinary course of business
which are effected after the Closing Date and for which the consideration for
such sale exceeds Two Million Dollars ($2,000,000), (i) the cash and cash
equivalents received by the Borrowers from such sale, minus (ii) the sum of the
Borrowers' reasonable expenses of such sale and the Borrowers' book value of any
Receivables and Inventory sold in connection with such sale
"Net Worth" at a particular date, shall mean all amounts which would be
included under shareholders' equity on a balance sheet of the Borrowers on a
consolidated basis determined in accordance with GAAP as at such date.
"Obligations" shall mean and include any and all loans, advances,
debts, liabilities, obligations, covenants and duties owing by Borrowers to
Lenders or Agent or to any other direct or indirect subsidiary or affiliate of
Agent or any Lender of any kind or nature, present or future (including, without
limitation, any interest accruing thereon after maturity, or after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding relating to any Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding),
whether or not evidenced by any note, guaranty or other instrument, whether
arising under any agreement, instrument or document, (including, without
limitation, this Agreement and the Other Documents) whether or not for the
payment of money, whether arising by reason of an extension of credit, opening
of a letter of credit, loan, equipment lease or guarantee, under any interest or
currency swap, future, option or other similar agreement (whether with one or
more of the Borrowers as a counterparty), or in any other manner, whether
arising out of overdrafts or deposit or other accounts or electronic funds
transfers (whether through automated clearing houses or otherwise) or out of the
Agent's or any Lenders non-receipt of or inability to collect funds or otherwise
not being made whole in connection with depository transfer check or other
similar arrangements, whether direct or indirect (including those acquired by
assignment or participation), absolute or contingent, joint or several, due or
to become due, now existing or hereafter arising, contractual or tortious,
liquidated or unliquidated, regardless of how such indebtedness or liabilities
arise or by what agreement or instrument they may be evidenced or whether
evidenced by any agreement or instrument, including, but not limited to, any and
all of any Borrower's Indebtedness and/or liabilities under this Agreement, the
Other Documents or under any other agreement between Agent or Lenders and any
Borrower and any amendments, extensions, renewals or increases and all costs and
expenses of Agent and any Lender incurred in the documentation, negotiation,
modification, enforcement, collection or otherwise in connection with any of the
foregoing, including but not limited to reasonable attorneys' fees and expenses
and all obligations of any Borrower to Agent or Lenders to perform acts or
refrain from taking any action.
"Other Documents" shall mean the Revolving Credit Note and any and all
other agreements, instruments and documents, including, without limitation,
guaranties, pledges, powers of attorney, consents, and all other writings
heretofore, now or hereafter executed by any
14
Borrower and/or delivered to Agent or any Lender in respect of the transactions
contemplated by this Agreement.
"Parent" of any Person shall mean a corporation or other entity owning,
directly or indirectly at least 50% of the shares of stock or other ownership
interests having ordinary voting power to elect a majority of the directors of
the Person, or other Persons performing similar functions for any such Person.
"Participant" shall mean each Person who shall be granted the right by
any Lender to participate in any of the Advances and who shall have entered into
a participation agreement in form and substance satisfactory to such Lender.
"Payment Office" shall mean initially ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇; thereafter, such other office of Agent, if any,
which it may designate by notice to Borrowing Agent and to each Lender to be the
Payment Office.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Permitted Acquisition" shall have the meaning set forth in Section 7.1
hereof.
"Permitted Acquisition Financing" shall mean acquisition financing for
acquisitions permitted under Section 7.1 made with the proceeds of Revolving
Advances.
"Permitted Encumbrances" shall mean (a) Liens in favor of Agent for the
benefit of Agent and Lenders; (b) Liens for taxes, assessments or other
governmental charges not delinquent or being contested in good faith and by
appropriate proceedings and with respect to which proper reserves have been
taken by Borrowers; provided, that, the Lien shall have no effect on the
priority of the Liens in favor of Agent or the value of the assets in which
Agent has such a Lien and a stay of enforcement of any such Lien shall be in
effect; (c) deposits or pledges to secure obligations under worker's
compensation, social security or similar laws, or under unemployment insurance;
(d) deposits, security interests or pledges to secure bids, tenders, contracts
(other than contracts for the payment of money), leases, statutory obligations,
surety and appeal bonds and other obligations of like nature arising in the
ordinary course of any Borrower's business; (e) judgment Liens that have been
stayed or bonded and mechanics', workers', materialmen's or other like Liens
arising in the ordinary course of any Borrower's business with respect to
obligations which are not due or which are being contested in good faith by the
applicable Borrower; (f) Liens placed upon fixed assets, proceeds from
disposition thereof and other property directly related thereto, hereafter
acquired to secure a portion of the purchase price thereof (or refinance fixed
assets acquired with proceeds of Revolving Advances, so long as the proceeds of
such refinancing are applied to the outstanding balance of Revolving Advances)
or Liens of lessors on fixed assets subject to capital leases, provided that (x)
any such lien shall not encumber any other property of Borrowers (other than
related obligations owed to such lender or lessor) and (y) the aggregate amount
of Indebtedness secured by such Liens incurred as a result of such purchases
during any fiscal year shall not exceed the amount provided for in Section 7.6;
(g) other Liens incidental to the conduct of Borrowers' business or the
ownership of its property and assets which were not incurred in connection with
the borrowing of money or the obtaining of advances or credit, and which do not
in the aggregate
15
materially detract from Agent's or Lenders' rights in and to the Collateral or
the value of Borrowers' property or assets or which do not materially impair the
use thereof in the operation of Borrowers' business; (h) Liens on assets of the
Borrowers other than Collateral which secure Indebtedness not exceeding
$6,000,000 in the aggregate at any one time outstanding and which
is permitted under Section 7.8; and (i) Liens disclosed on Schedule 1.2(B).
"Person" shall mean any individual, sole proprietorship, partnership,
corporation, business trust, joint stock company, trust, unincorporated
organization, association, limited liability company, institution, public
benefit corporation, joint venture, entity or government (whether Federal,
state, county, city, municipal or otherwise, including any instrumentality,
division, agency, body or department thereof).
"Plan" shall mean any employee benefit plan within the meaning of
Section 3(3) of ERISA, maintained for employees of Borrowers or any member of
the Controlled Group or any such Plan to which any Borrower or any member of the
Controlled Group is required to contribute on behalf of any of its employees.
"Projections" shall have the meaning set forth in Section 5.5(b)
hereof.
"Purchasing Lender" shall have the meaning set forth in Section 16.3
hereof.
"RCRA" shall mean the Resource Conservation and Recovery Act, 42 U.S.C.
▇▇.▇▇. 6901 et seq., as same may be amended from time to
time.
"Real Property" shall mean all of each Borrower's right, title and
interest in and to the owned and leased premises identified on Schedule 4.19
hereto and other owned or leased property acquired by the Borrower as permitted
under this Agreement.
"Receivables" shall mean and include, as to each Borrower, all of such
Borrower's accounts, contract rights, instruments (including those evidencing
indebtedness owed to Borrowers by their Affiliates), documents, chattel paper
(including electronic chattel paper), general intangibles relating to accounts,
drafts and acceptances, credit card receivables, and all other forms of
obligations owing to such Borrower arising out of or in connection with the sale
or lease of Inventory or the rendition of services, all supporting obligations,
guarantees and other security therefor, whether secured or unsecured, now
existing or hereafter created, and whether or not specifically sold or assigned
to Agent hereunder.
"Receivables Advance Rate" shall have the meaning set forth in Section
2.1(a)(y)(i) hereof.
"Release" shall have the meaning set forth in Section 5.7(c)(i) hereof.
"Reportable Event" shall mean a reportable event described in Section
4043(b) of ERISA or the regulations promulgated thereunder.
"Required Lenders" shall mean Lenders holding at least sixty-six and
two-thirds percent (66-2/3%) of the Advances and, if no Advances are
outstanding, shall mean Lenders holding sixty-six and two-thirds percent
(66-2/3%) of the Commitment Percentages.
16
"Reserve Percentage" shall mean the maximum effective percentage in
effect on any day as prescribed by the Board of Governors of the Federal Reserve
System (or any successor) for determining the reserve requirements (including,
without limitation, supplemental, marginal and emergency reserve requirements)
with respect to eurocurrency funding.
"Restoration Threshold" shall mean that subsequent to the Borrowers'
failure to maintain the Minimum Availability Threshold, the Borrowers maintain
an average Undrawn Availability equal to or greater than Eight Million Dollars
($8,000,000) for a period of at least thirty (30) consecutive days and no
Default or Event of Default has occurred or exists during such 30 day period.
"Revolving Advances" shall mean Advances made other than Letters of
Credit and Acceptances.
"Revolving Credit Note" shall mean, collectively, the promissory notes
referred to in Section 2.1(a) hereof.
"Revolving Interest Rate" shall mean an interest rate per annum equal
to (a) the sum of the Alternate Base Rate plus the Applicable Margin with
respect to Domestic Rate Loans and (b) the sum of the Eurodollar Rate plus the
Applicable Margin with respect to Eurodollar Rate Loans.
"Section 20 Subsidiary" shall mean the Subsidiary of the bank holding
company controlling PNC, which Subsidiary has been granted authority by the
Federal Reserve Board to underwrite and deal in certain Ineligible Securities.
"Settlement Date" shall mean the Closing Date and thereafter Wednesday
of each week unless such day is not a Business Day in which case it shall be the
next succeeding Business Day.
"Subsidiary" shall mean a corporation or other entity of whose shares
of stock or other ownership interests having ordinary voting power (other than
stock or other ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the directors of such
corporation, or other Persons performing similar functions for such entity, are
owned, directly or indirectly, by such Person.
"Term" shall have the meaning set forth in Section 13.1 hereof.
"Termination Event" shall mean (a) a Reportable Event with respect to
any Plan or Multiemployer Plan; (b) the withdrawal of any Borrower or any member
of the Controlled Group from a Plan or Multiemployer Plan during a plan year in
which such entity was a "substantial employer" as defined in Section 4001(a)(2)
of ERISA; (c) the providing of notice of intent to terminate a Plan in a
distress termination described in Section 4041(c) of ERISA; (d) the institution
by the PBGC of proceedings to terminate a Plan or Multiemployer Plan; (e) any
event or condition (i) which might constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Plan or Multiemployer Plan, or (ii) that may result in termination of a
Multiemployer Plan pursuant to Section 4041A of ERISA; or (f) the
17
partial or complete withdrawal within the meaning of Sections 4203 and 4205 of
ERISA, of any Borrower or any member of the Controlled Group from a
Multiemployer Plan.
"Toxic Substance" shall mean and include any material present on the
Real Property which has been shown to have significant adverse effect on human
health or which is subject to regulation under the Toxic Substances Control Act
(TSCA), 15 U.S.C. ▇▇.▇▇. 2601 et seq., applicable state law, or any other
applicable Federal or state laws now in force or hereafter enacted relating to
toxic substances. "Toxic Substance" includes but is not limited to asbestos,
polychlorinated biphenyls (PCBs) and lead-based paints.
"Trading with the Enemy Act" shall mean the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) and any enabling legislation or executive order relating
thereto.
"Transferee" shall have the meaning set forth in Section 16.3(b)
hereof.
"Undrawn Availability" at a particular date shall mean an amount equal
to (a) the lesser of (i) the Formula Amount plus the aggregate amount of
outstanding Letters of Credit and Acceptances, or (ii) the Maximum Revolving
Advance Amount, minus (b) the sum of (i) the outstanding amount of Advances plus
(ii) all amounts due and owing to Borrowers' trade creditors which are
outstanding sixty (60) days or more beyond the due date, plus (iii) fees and
expenses which are due and for which Borrowers are liable to Agent or Lenders
but which have not been paid or charged to Borrowers' Account.
"Union Pacific Contract" shall mean that certain agreement dated
January 21, 2005, between Union Pacific Railroad and CXT which provides, among
other matters, for the purchase by Union Pacific Railroad from CXT of concrete
railroad ties manufactured at facilities located in Grand Island, Nebraska and
Tucson, Arizona.
"Union Pacific Project" shall mean the renovation and/or construction
of the concrete railroad tie manufacturing facilities in Grand Island, Nebraska
and Tucson, Arizona.
"USA Patriot Act" shall mean the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, Public Law 107-56, as the same has been, or shall hereafter be, renewed,
extended, amended or replaced.
"Week" shall mean the time period commencing with the opening of
business on a Wednesday and ending on the end of business the following Tuesday.
1.3 Uniform Commercial Code Terms.
All terms used herein and defined in the Uniform Commercial Code as
adopted in the Commonwealth of Pennsylvania from time to time shall have the
meaning given therein unless otherwise defined herein. To the extent the
definition of any category or type of Collateral is expanded by any amendment,
modification or revision to the Uniform Commercial Code, such expanded
definition will apply automatically as of the date of such amendment,
modification or revision.
18
1.4 Certain Matters of Construction.
The terms "herein", "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular section,
paragraph or subdivision. Any pronoun used shall be deemed to cover all genders.
Wherever appropriate in the context, terms used herein in the singular also
include the plural and vice versa. All references to statutes and related
regulations shall include any amendments of same and any successor statutes and
regulations. Unless otherwise provided, all references to any instruments or
agreements to which Agent is a party, including, without limitation, references
to any of the Other Documents, shall include any and all modifications or
amendments thereto and any and all extensions or renewals thereof.
2. ADVANCES, PAYMENTS
2.1 Revolving Advances; Individual Revolving Advances; Discretionary Rights.
(a) Revolving Advances. Subject to the terms and conditions set forth in
this Agreement including, without limitation, Section 16.2, each
Lender, severally and not jointly, will make Revolving Advances to
Borrowers in aggregate amounts outstanding at any time equal to such
Lender's Commitment Percentage of the lesser of (x) the Maximum
Revolving Advance Amount less the aggregate amount of outstanding
Letters of Credit and Acceptances or (y) an amount equal to the sum of:
(i) up to 85%, subject to the provisions of Section 2.1(c) hereof
("Receivables Advance Rate"), of Eligible Receivables, plus
(ii) up to the lesser of (A) 60%, subject to the provisions of Section
2.1(c) hereof ("Inventory Advance Rate"), of the value of the Eligible
Inventory (the Receivables Advance Rate and the Inventory Advance Rate
shall be referred to collectively, as the "Advance Rates") or (B)
$35,000,000 in the aggregate at any one time, minus
(iii) the aggregate amount of outstanding Letters of Credit and Acceptances,
minus
(iv) such reserves as Agent may reasonably deem proper and necessary from
time to time.
The amount derived from the sum of (a) Sections 2.1(a)(y)(i) and (ii)
minus (b) Section 2.1 (a)(y)(iii) and (iv) at any time and from time to time
shall be referred to as the "Formula Amount". The Revolving Advances shall be
evidenced by one or more secured promissory notes (collectively, the "Revolving
Credit Note") substantially in the form attached hereto as Exhibit 2.1(a).
(b) Formula Amount Calculation. Subject to the Agent's discretion as set forth
in this Section 2.1 and in the definitions of Eligible Inventory and Eligible
Receivables, as well as Agent's review of the accuracy and sufficiency of the
Borrowing Base Certificates in accordance
19
with Section 9.2, the Formula Amount shall be determined based upon the
Borrowing Base Certificates delivered by the Borrowers pursuant to Section 9.2.
(c) Discretionary Rights. Subject to Section 16.2(b)(vii), the Advance Rates may
be increased or decreased by Agent at any time and from time to time in the
exercise of its reasonable discretion. Each Borrower consents to any such
increases or decreases and acknowledges that decreasing the Advance Rates or
increasing the reserves may limit or restrict Advances requested by Borrowing
Agent. Notwithstanding the foregoing, Agent cannot reduce the Advance Rates in
any one year which would cause the amount available to be borrowed to decrease
by more than 5%. Agent shall give Borrowing Agent ten (10) Business Days prior
written notice of its intention to decrease the Advance Rates.
2.2 Procedure for Borrowing Advances.
(a) Borrowing Agent on behalf of any Borrower may notify Agent prior to 12:00
noon on a Business Day of a Borrower's request to incur, on that day, a
Revolving Advance hereunder. Should any amount required to be paid as interest
hereunder, or as fees or other charges under this Agreement or any other
agreement with Agent or Lenders, or with respect to any other Obligation, become
due, same shall be deemed a request for a Revolving Advance as of the date such
payment is due, in the amount required to pay in full such interest, fee, charge
or Obligation under this Agreement or any other agreement with Agent or Lenders,
and such request shall be irrevocable.
(b) Notwithstanding the provisions of (a) above, in the event any Borrower
desires to obtain a Eurodollar Rate Loan, Borrowing Agent shall give Agent prior
to 12:00 noon at least two (2) Business Days' prior written notice, specifying
(i) the date of the proposed borrowing (which shall be a Business Day), (ii) the
type of borrowing and the amount on the date of such Advance to be borrowed,
which amount shall be in a minimum amount of $1,000,000 and in integral
multiples of $250,000 thereafter, and (iii) the duration of the first Interest
Period therefor. Interest Periods for Eurodollar Rate Loans shall be for seven
days or one, two, three, or six months; provided, if an Interest Period would
end on a day that is not a Business Day, it shall end on the next succeeding
Business Day unless such day falls in the next succeeding calendar month in
which case the Interest Period shall end on the next preceding Business Day. No
Eurodollar Rate Loan shall be made available to Borrower during the continuance
of a Default or an Event of Default.
(c) Each Interest Period of a Eurodollar Rate Loan shall commence on the date
such Eurodollar Rate Loan is made and shall end on such date as Borrowing Agent
may elect as set forth in subsection (b)(iii) above provided that the exact
length of each Interest Period shall be determined in accordance with the
practice of the interbank market for offshore Dollar deposits and no Interest
Period shall end after the last day of the Term.
Borrowing Agent shall elect the initial Interest Period
applicable to a Eurodollar Rate Loan by its notice of borrowing given to Agent
pursuant to Section 2.2(b) or by its notice of conversion given to Agent
pursuant to Section 2.2(d), as the case may be. Borrowing Agent shall elect the
duration of each succeeding Interest Period by giving irrevocable written notice
to Agent prior to 12:00 noon of such duration not less than two (2) Business
Days prior to the last
20
day of the then current Interest Period applicable to such Eurodollar Rate Loan.
If Agent does not receive timely notice of the Interest Period elected by
Borrowing Agent, Borrowers shall be deemed to have elected to convert to a
Domestic Rate Loan subject to Section 2.2(d) hereinbelow.
(d) Provided that no Event of Default shall have occurred and be continuing, any
Borrower may, on the last Business Day of the then current Interest Period
applicable to any outstanding Eurodollar Rate Loan, or on any Business Day with
respect to Domestic Rate Loans, convert any such loan into a loan of another
type in the same aggregate principal amount provided that any conversion of a
Eurodollar Rate Loan shall be made only on the last Business Day of the then
current Interest Period applicable to such Eurodollar Rate Loan. If a Borrower
desires to convert a loan, Borrowing Agent shall give Agent prior to 12:00 noon
not less than two (2) Business Days prior written notice to convert from a
Domestic Rate Loan to a Eurodollar Rate Loan or two (2) Business Days prior
written notice to convert from a Eurodollar Rate Loan to a Domestic Rate Loan,
specifying the date of such conversion, the loans to be converted and if the
conversion is from a Domestic Rate Loan to any other type of loan, the duration
of the first Interest Period therefor. After giving effect to each such
conversion, there shall not be outstanding more than five (5) Eurodollar Rate
Loans, in the aggregate.
(e) At its option and upon three (3) Business Days' prior written notice, any
Borrower may prepay the Eurodollar Rate Loans in whole at any time or in part
from time to time, without premium or penalty, but with accrued interest on the
principal being prepaid to the date of such repayment. Such Borrower shall
specify the date of prepayment of Advances which are Eurodollar Rate Loans and
the amount of such prepayment. In the event that any prepayment of a Eurodollar
Rate Loan is required or permitted on a date other than the last Business Day of
the then current Interest Period with respect thereto, such Borrower shall
indemnify Agent and Lenders therefor in accordance with Section 2.2(f) hereof.
(f) Each Borrower shall indemnify Agent and Lenders and hold Agent and Lenders
harmless from and against any and all losses or expenses that Agent and Lenders
may sustain or incur as a consequence of any prepayment, conversion of or any
default by any Borrower in the payment of the principal of or interest on any
Eurodollar Rate Loan or failure by any Borrower to complete a borrowing of, a
prepayment of or conversion of or to a Eurodollar Rate Loan after notice thereof
has been given, including, but not limited to, any interest payable by Agent or
Lenders to lenders of funds obtained by it in order to make or maintain its
Eurodollar Rate Loans hereunder. A certificate as to any additional amounts
payable pursuant to the foregoing sentence submitted by Agent or any Lender to
Borrowing Agent shall be conclusive absent manifest error.
(g) Notwithstanding any other provision hereof, if any applicable law, treaty,
regulation or directive, or any change therein or in the interpretation or
application thereof, shall make it unlawful for any Lender (for purposes of this
subsection (g), the term "Lender" shall include any Lender and the office or
branch where any Lender or any corporation or bank controlling such Lender makes
or maintains any Eurodollar Rate Loans) to make or maintain its Eurodollar Rate
Loans, the obligation of Lenders to make Eurodollar Rate Loans hereunder shall
forthwith be cancelled and Borrowers shall, if any affected Eurodollar Rate
Loans are then outstanding, promptly upon request from Agent, either pay all
such affected Eurodollar Rate Loans or convert such affected Eurodollar Rate
Loans into loans of another type. If any such
21
payment or conversion of any Eurodollar Rate Loan is made on a day that is not
the last day of the Interest Period applicable to such Eurodollar Rate Loan,
Borrowers shall pay Agent, upon Agent's request, such amount or amounts as may
be necessary to compensate Lenders for any loss or expense sustained or incurred
by Lenders in respect of such Eurodollar Rate Loan as a result of such payment
or conversion, including (but not limited to) any interest or other amounts
payable by Lenders to lenders of funds obtained by Lenders in order to make
or maintain such Eurodollar Rate Loan. A certificate as to any additional
amounts payable pursuant to the foregoing sentence submitted by Lenders to
Borrowing Agent shall be conclusive absent manifest error.
2.3 Disbursement of Advance Proceeds.
All Advances shall be disbursed from whichever office or other place
Agent may designate from time to time and, together with any and all other
Obligations of Borrowers to Agent or Lenders, shall be charged to Borrowers'
Account on Agent's books. During the Term, Borrowers may use the Revolving
Advances by borrowing, prepaying and reborrowing, all in accordance with the
terms and conditions hereof. The proceeds of each Revolving Advance requested by
Borrowers or deemed to have been requested by Borrowers under Section 2.2(a)
hereof shall, with respect to requested Revolving Advances to the extent Lenders
make such Revolving Advances, be made available to the applicable Borrower on
the day so requested by way of credit to such Borrower's operating account at
PNC, or such other bank as Borrowing Agent may designate following notification
to Agent, in immediately available federal funds or other immediately available
funds or, with respect to Revolving Advances deemed to have been requested by
any Borrower, be disbursed to Agent to be applied to the outstanding Obligations
giving rise to such deemed request.
2.4 Reserved.
2.5 Maximum Advances.
The aggregate balance of Advances outstanding at any time shall not
exceed the lesser of (a) Maximum Revolving Advance Amount or (b) the Formula
Amount.
2.6 Repayment of Advances.
(a) The Revolving Advances shall be due and payable in full on the last day of
the Term subject to earlier prepayment as herein provided.
(b) Agent is not required to credit Borrowers' Account for the amount of any
item of payment which is unsatisfactory to Agent and Agent may charge Borrowers'
Account for the amount of any item of payment which is returned to Agent unpaid.
(c) All payments of principal, interest and other amounts payable hereunder, or
under any of the Other Documents shall be made to Agent at the Payment Office
not later than 2:00 P.M. (New York Time) on the due date therefor in lawful
money of the United States of America in federal funds or other funds
immediately available to Agent. Agent shall have the right to effectuate payment
on any and all Obligations due and owing hereunder if not paid promptly by the
Borrowers (or following a Default or Event of Default or Borrowers' failure to
meet the
22
Minimum Availability Threshold) by charging Borrowers' Account or by
making Advances as provided in Section 2.2 hereof.
(d) Borrowers shall pay principal, interest, and all other amounts payable
hereunder, or under any related agreement, without any deduction whatsoever,
including, but not limited to, any deduction for any setoff or counterclaim.
2.7 Repayment of Excess Advances.
The aggregate balance of Advances outstanding at any time in excess of
the maximum amount of Advances permitted hereunder shall be immediately due and
payable without the necessity of any demand, at the Payment Office, whether or
not a Default or Event of Default has occurred.
2.8 Statement of Account.
Agent shall maintain, in accordance with its customary procedures, a
loan account ("Borrowers' Account") in the name of Borrowers in which shall be
recorded the date and amount of each Advance made by Agent and the date and
amount of each payment in respect thereof; provided, however, the failure by
Agent to record the date and amount of any Advance shall not adversely affect
Agent or any Lender. Each month, Agent shall send to Borrowing Agent a statement
showing the accounting for the Advances made, payments made or credited in
respect thereof, and other transactions between Agent and Borrowers, during such
month. The monthly statements shall be deemed correct and binding upon Borrowers
in the absence of manifest error and shall constitute an account stated between
Lenders and Borrowers unless Agent receives a written statement of Borrowers'
specific exceptions thereto within thirty (30) days after such statement is
received by Borrowing Agent. The records of Agent with respect to the loan
account shall be conclusive evidence absent manifest error of the amounts of
Advances and other charges thereto and of payments applicable thereto.
2.9 Letters of Credit and Acceptances.
Subject to the terms and conditions hereof, Agent shall (a) issue or
cause the issuance of standby and trade Letters of Credit ("Letters of Credit")
on behalf of any Borrower, or (b) accept, or cause to be accepted Acceptances;
provided, however, that Agent will not be required to issue or cause to be
issued any Letters of Credit or accept or cause to be accepted any Acceptances
to the extent that the issuance of such Letters of Credit or acceptance of such
Acceptances would then cause the sum of (i) the outstanding Revolving Advances
plus (ii) the Maximum Undrawn Amount of outstanding Letters of Credit plus (iii)
outstanding Acceptances to exceed the lesser of (x) the Maximum Revolving
Advance Amount or (y) the Formula Amount. The Maximum Undrawn Amount of
outstanding Letters of Credit and Acceptances shall not exceed $15,000,000 in
the aggregate at any time. The maximum amount of outstanding Acceptances shall
not exceed $15,000,000 in the aggregate at any time. All disbursements or
payments related to Letters of Credit and Acceptances shall be deemed to be
Domestic Rate Loans consisting of Revolving Advances and shall bear interest at
the Revolving Interest Rate for Domestic Rate Loans; Letters of Credit that have
not been drawn upon shall not bear interest. All letters of credit issued and
outstanding under the Existing Credit Facility, as further described
23
on Schedule 2.9, shall from and after the Closing Date be deemed to be Letters
of Credit issued and outstanding pursuant to this Agreement, including without
limitation, Sections 2.9 through 2.18.
2.10 Issuance of Letters of Credit; Creation of Acceptances.
(a) Borrowing Agent, on behalf of Borrowers, may request Agent, upon five (5)
days' prior written notice submitted on or before 10:00 a.m. New York time, to
issue or cause the issuance of a Letter of Credit by delivering to Agent at the
Payment Office, Agent's form of Letter of Credit Application (the "Letter of
Credit Application") completed to the satisfaction of Agent; and, such other
certificates, documents and other papers and information as Agent may reasonably
request. Borrowing Agent, on behalf of Borrowers, also has the right to give
instructions and make agreements with respect to any application, any applicable
letter of credit and security agreement, any applicable letter of credit
reimbursement agreement and/or any other applicable agreement, any letter of
credit and the disposition of documents, disposition of any unutilized funds,
and to agree with Agent upon any amendment, extension or renewal of any Letter
of Credit.
(b) Each Letter of Credit shall, among other things, (i) provide for the payment
of sight drafts, other written demands for payment, or acceptances of usance
drafts when presented for honor thereunder in accordance with the terms thereof
and when accompanied by the documents described therein and (ii) have an expiry
date not later than twelve (12) months after such Letter of Credit's date of
issuance and in no event later than the last day of the Term. Each standby
Letter of Credit shall be subject either to the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, and any amendments or revisions thereof adhered to by the
Issuer ("UCP 500") or the International Standby Practices (ISP98-International
Chamber of Commerce Publication Number 590), and any amendments or revisions
thereof adhered to by the Issuer (the "ISP98 Rules"), as determined by Agent,
and each trade Letter of Credit shall be subject to UCP 500.
(c) Agent shall notify Lenders of the request by Borrowing Agent for a Letter of
Credit or an Acceptance hereunder.
(d) Agent shall have absolute discretion whether to accept any draft. Without in
any way limiting Agent's absolute discretion whether to accept any draft,
Borrowers will not present for acceptance any draft, and Agent will generally
not accept any drafts (i) that arise out of transactions involving the sale of
goods by any Borrower not in the ordinary course of business, (ii) that involve
a sale to an Affiliate of any Borrower, (iii) that involve any purchase for
which Agent has not received all related documents, instruments and forms
requested by Agent, (iv) for which Agent is unable to locate a purchaser in the
ordinary course of business on standard terms, or (v) that is not eligible for
discounting with Federal Reserve Banks pursuant to paragraph 7 of Section 13 of
the Federal Reserve Act, as amended.
(e) Subject to terms set by Agent from time to time in its discretion with
respect to the acceptance of drafts generally, Borrowing Agent may request
Acceptances on any Business Day, by delivering to Agent a request for an
Acceptance in substantially the form of Exhibit 2.10 and, upon demand, copies of
all invoices, delivery receipts and related documents relating to that
24
request that Agent might require. Provided that the request for Acceptance is
received prior to 10:30 a.m. and approved by Agent, Agent shall make the net
proceeds of the Acceptance available to a Borrower by crediting the net amount
of the Acceptance in lawful money of the United States and in immediately
available funds to such Borrower's Account. The net amount of the Acceptance
shall be calculated by discounting the Acceptance at the Banker's Acceptance
Rate for the applicable maturity period upon the creation by Agent of an
Acceptance.
(f) Borrowers shall pay to Agent the amount of any Acceptance on or before its
maturity date. In addition, Agent is hereby irrevocably authorized, in its sole
discretion, to make Revolving Advances from time to time, or to charge any
account of Borrowers, to pay any Acceptance for which payment is due, or at any
time after the occurrence of an Event of Default to fund cash collateral for any
outstanding Acceptance.
(g) Each Acceptance shall be payable in Dollars and shall be in the face amount
of at least $500,000. The maturity of each Acceptance shall be in any 30 day
increment equal to or greater than 30 and less than or equal to 180 days or, if
such day is not a Business Day, on the next succeeding Business Day and, in any
event, no later than the day preceding the expiration of the Term. This Section
2.10(g) will not apply to Acceptances created under Letters of Credit.
2.11 Requirements For Issuance of Letters of Credit and Acceptances.
(a) Borrowing Agent shall authorize and direct any Issuer to name the applicable
Borrower as the "Applicant" or "Account Party" of each Letter of Credit. If
Agent is not the Issuer of any Letter of Credit, Borrowing Agent shall authorize
and direct the Issuer to deliver to Agent all instruments, documents, and other
writings and property received by the Issuer pursuant to the Letter of Credit of
any Acceptance related thereto and to accept and rely upon Agent's instructions
and agreements with respect to all matters arising in connection with the Letter
of Credit or the application therefore or any Acceptance therefor.
(b) In connection with all Letters of Credit issued or caused to be issued by
Agent under this Agreement, each Borrower hereby appoints Agent, or its
designee, as its attorney, with full power and authority if an Event of Default
shall have occurred, (i) to sign and/or endorse such Borrower's name upon any
warehouse or other receipts, letter of credit applications and acceptances; (ii)
to sign such Borrower's name on bills of lading; (iii) to clear Inventory
through the United States of America Customs Department ("Customs") in the name
of such Borrower or Agent or Agent's designee, and to sign and deliver to
Customs officials powers of attorney in the name of such Borrower for such
purpose; and (iv) to complete in such Borrower's name or Agent's, or in the name
of Agent's designee, any order, sale or transaction, obtain the necessary
documents in connection therewith, and collect the proceeds thereof. Neither
Agent nor its attorneys will be liable for any acts or omissions nor for any
error of judgment or mistakes of fact or law, except for Agent's or its
attorney's willful misconduct. This power, being coupled with an interest, is
irrevocable as long as any Letters of Credit remain outstanding.
2.12 Disbursements, Reimbursement.
(a) Immediately upon the issuance of each Letter of Credit, each Lender shall be
deemed to, and hereby irrevocably and unconditionally agrees to, purchase from
Agent a
25
participation in such Letter of Credit and each drawing thereunder in an
amount equal to such Lender's Commitment Percentages of the Maximum Face Amount
of such Letter of Credit and the amount of such drawing, respectively.
(b) In the event of any request for a drawing under a Letter of Credit by the
beneficiary or transferee thereof, Agent will promptly notify the applicable
Borrower. Provided that it shall have received such notice, such Borrower shall
reimburse (such obligation to reimburse Agent shall sometimes be referred to as
a "Reimbursement Obligation") Agent prior to 4:30 p.m., New York time on each
date that an amount is paid by Agent under any Letter of Credit (each such date,
a "Drawing Date") in an amount equal to the amount so paid by Agent. In the
event such Borrower fails to reimburse Agent for the full amount of any drawing
under any Letter of Credit by 4:30 p.m., New York time, on the Drawing Date,
Agent will promptly notify each Lender thereof, and Borrowers shall be deemed to
have requested that a Domestic Rate Loan be made by the Lenders to be disbursed
on the Drawing Date under such Letter of Credit in the amount of such
unreimbursed drawing, subject to the amount of the unutilized portion of the
lesser of Maximum Revolving Advance Amount or the Formula Amount and subject to
Section 8.2. Any notice given by Agent pursuant to this Section 2.12(b) may be
oral if immediately confirmed in writing; provided that the lack of such an
immediate confirmation shall not affect the conclusiveness or binding effect of
such notice.
(c) Each Lender shall upon any notice pursuant to Section 2.12(b) make available
to Agent an amount in immediately available funds equal to its Commitment
Percentage of the amount of the drawing, whereupon the participating Lenders
shall (subject to Section 2.12(d)) each be deemed to have made a Domestic Rate
Loan to Borrowers in that amount. If any Lender so notified fails to make
available to Agent the amount of such Lender's Commitment Percentage of such
amount by no later than 2:00 p.m., New York time on the Drawing Date, then
interest shall accrue on such Lender's obligation to make such payment, from the
Drawing Date to the date on which such Lender makes such payment (i) at a rate
per annum equal to the Federal Funds Open Rate during the first three days
following the Drawing Date and (ii) at a rate per annum equal to the rate
applicable to Domestic Rate Loans on and after the fourth day following the
Drawing Date. Agent will promptly give notice of the occurrence of the Drawing
Date, but failure of Agent to give any such notice on the Drawing Date or in
sufficient time to enable any Lender to effect such payment on such date shall
not relieve such Lender from its obligation under this Section 2.12(c), provided
that such Lender shall not be obligated to pay interest as provided in Section
2.12(c) (i) and (ii) until and commencing from the date of receipt of notice
from Agent of a drawing (it being understood that any such notice given by Agent
after 12:00 noon New York time on any Business Day shall be deemed to have been
received on the following Business Day). Each Lender's participation commitment
shall continue until the last to occur of any of the following events: (A) Agent
ceases to be obligated to issue or cause to be issued Letters of Credit or
Acceptances hereunder; (B) no Letter of Credit issued or created hereunder
remains outstanding and uncancelled and no Acceptance remains outstanding and
unmatured, or (C) all Persons (other than the applicable Borrower) have been
fully reimbursed for all payments made under or relating to Letters of Credit
and/or Acceptances.
(d) With respect to any unreimbursed drawing that is not converted into a
Domestic Rate Loan to Borrower in whole or in part as contemplated by Section
2.12(b), because of Borrower's failure to satisfy the conditions set forth in
Section 8.2 (other than any notice
26
requirements) or for any other reason, Borrower shall be deemed to have incurred
from Agent a borrowing (each a "Letter of Credit Borrowing") in the amount of
such drawing. Such Letter of Credit Borrowing shall be due and payable on demand
(together with interest) and shall bear interest at the rate per annum
applicable to a Domestic Rate Loan. Each Lender's payment to Agent pursuant to
Section 2.12(c) shall be deemed to be a payment in respect of its participation
in such Letter of Credit Borrowing and shall constitute a "Participation
Advance" from such Lender in satisfaction of its participation obligation under
this Section 2.12.
2.13 Repayment of Participation Advances.
(a) Upon (and only upon) receipt by Agent for its account of immediately
available funds from Borrowers (i) in reimbursement of any payment made by the
Agent under the Letter of Credit with respect to which any Lender has made a
Participation Advance to Agent, or (ii) in payment of interest on such a payment
made by Agent under such a Letter of Credit, Agent will pay to each Lender, in
the same funds as those received by Agent, the amount of such Lender's
Commitment Percentage of such funds, except Agent shall retain the amount of the
Commitment Percentage of such funds of any Lender that did not make a
Participation Advance in respect of such payment by Agent.
(b) If Agent is required at any time to return to any Borrower, or to a trustee,
receiver, liquidator, custodian, or any official in any insolvency proceeding,
any portion of the payments made by Borrowers to Agent pursuant to Section
2.13(a) in reimbursement of a payment made under the Letter of Credit or
interest or fee thereon, each Lender shall, on demand of Agent, forthwith return
to Agent the amount of its Commitment Percentage of any amounts so returned by
Agent plus interest at the Federal Funds Open Rate.
2.14 Documentation.
Each Borrower agrees to be bound by the terms of the Letter of Credit
Application and by Agent's interpretations of any Letter of Credit issued for
any Borrower and by Agent's written regulations and customary practices relating
to letters of credit, though Agent's interpretation of such regulations and
practices may be different from Borrower's own. In the event of a conflict
between the Letter of Credit Application and this Agreement, this Agreement
shall govern. It is understood and agreed that, except in the case of gross
negligence or willful misconduct, Agent shall not be liable for any error,
negligence and/or mistakes, whether of omission or commission, in following any
Borrower's instructions or those contained in the Letters of Credit or any
modifications, amendments or supplements thereto.
2.15 Determination to Honor Drawing Request.
In determining whether to honor any request for drawing under any
Letter of Credit by the beneficiary thereof, the Issuer shall be responsible
only to determine that the documents and certificates required to be delivered
under such Letter of Credit have been delivered and that they comply on their
face with the requirements of such Letter of Credit and that any other drawing
condition appearing on the face of such Letter of Credit has been satisfied in
the manner so set forth.
27
2.16 Nature of Participation and Reimbursement Obligations.
Each Lender's obligation in accordance with this Agreement to
make the Revolving Advances or Participation Advances as a result of a drawing
under a Letter of Credit, and the obligations of Borrowers to reimburse Agent
upon a draw under a Letter of Credit, shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms of
this Section 2.16 under all circumstances, including the following
circumstances:
(i) any set-off, counterclaim, recoupment, defense or other right which
such Lender may have against Agent, any Borrower or any other Person
for any reason whatsoever;
(ii) the failure of any Borrower or any other Person to comply, in
connection with a Letter of Credit Borrowing, with the conditions set
forth in this Agreement for the making of a Revolving Advance, it being
acknowledged that such conditions are not required for the making of a
Letter of Credit Borrowing and the obligation of the Lenders to make
Participation Advances under Section 2.12;
(iii) any lack of validity or enforceability of any Letter of Credit;
(iv) any claim of breach of warranty that might be made by any Borrower or
any Lender against the beneficiary of a Letter of Credit, or the
existence of any claim, set-off, defense or other right which any
Borrower or any Lender may have at any time against a beneficiary, any
successor beneficiary or any transferee of any Letter of Credit or the
proceeds thereof (or any Persons for whom any such transferee may be
acting), Agent or any Lender or any other Person, whether in connection
with this Agreement, the transactions contemplated herein or any
unrelated transaction (including any underlying transaction between any
Borrower or any Subsidiaries of any Borrower and the beneficiary for
which any Letter of Credit was procured);
(v) the lack of power or authority of any signer of, or lack of validity,
sufficiency, accuracy, enforceability or genuineness of, any draft,
demand, instrument, certificate or other document presented under any
Letter of Credit, or any such draft, demand, instrument, certificate or
other document proving to be forged, fraudulent, invalid, defective or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect, even if Agent has been notified thereof;
(vi) payment by Agent under any Letter of Credit against presentation of a
demand, draft or certificate or other document which does not comply
with the terms of such Letter of Credit other than as a result of the
gross negligence or willful misconduct of Agent;
(vii) the solvency of, or any acts or omissions by, any beneficiary of any
Letter of Credit, or any other Person having a role in any transaction
or obligation relating to a Letter of Credit, or the existence, nature,
qualify, quantity, condition, value or other characteristic of any
property or services relating to a Letter of Credit;
28
(viii) any failure by Agent or any of Agent's Affiliates to issue any Letter
of Credit in the form requested by a Borrower, unless Agent has
received written notice from such Borrower of such failure within three
Business Days after Agent shall have furnished such Borrower a copy of
such Letter of Credit and such error is material and no drawing has
been made thereon prior to receipt of such notice:
(ix) any Material Adverse Effect;
(x) any breach of this Agreement or any Other Document by any party
thereto;
(xi) the occurrence or continuance of an insolvency proceeding with respect
to any Borrower;
(xii) the fact that a Default or Event of Default shall have occurred and be
continuing;
(xiii) the fact that the Term shall have expired or this Agreement or the
Obligations hereunder shall have been terminated; and
(xiv) any other circumstance or happening whatsoever, whether or not similar
to any of the foregoing.
2.17 Indemnity.
In addition to amounts payable as provided in Section 16.5 hereof,
Borrowers hereby agree to protect, indemnify, pay and save harmless Agent and
any of Agent's Affiliates that have issued a Letter of Credit or an Acceptance
from and against any and all claims, demands, liabilities, damages, taxes,
penalties, interest, judgments, losses, costs, charges and expenses (including
reasonable fees, expenses and disbursements of counsel and allocated costs of
internal counsel) which Agent or any of Agent's Affiliates may incur or be
subject to as a consequence, direct or indirect, of the issuance of any Letter
of Credit or Acceptance, other than as a result of (a) the gross negligence or
willful misconduct of Agent as determined by a final judgment of a court of
competent jurisdiction or (b) the wrongful dishonor by Agent or any of Agent's
Affiliates of a proper demand for payment made under any Letter of Credit as
determined by a final judgment of a court of competent jurisdiction, except if
such dishonor resulted from any act or omission, whether rightful or wrongful,
of any present or future de jure or de facto Governmental Body (all such acts or
omissions herein called "Governmental Acts").
2.18 Liability for Acts and Omissions.
As between Borrowers and Agent and Lenders, Borrowers assume all risks
of the acts and omissions of, or misuse of the Letters of Credit by, the
respective beneficiaries of such Letters of Credit. In furtherance and not in
limitation of the respective foregoing, Agent shall not be responsible for: (i)
the form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for an
issuance of any such Letter of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or forged
(even if Agent shall have been notified thereof); (ii) the validity
29
or sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any such Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) the failure of the beneficiary of
any such Letter of Credit, or any other party to which such Letter of Credit may
be transferred, to comply fully with any conditions required in order to draw
upon such Letter of Credit or any other claim of any Borrower against any
beneficiary of such Letter of Credit, or any such transferee, or any dispute
between or among any Borrower and any beneficiary of any Letter of Credit or any
such transferee; (iv) errors, omissions, interruptions or delays in transmission
or delivery of any messages, by mail, cable, telegraph, telex or otherwise,
whether or not they be in cipher; (v) errors in interpretation of technical
terms; (vi) any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under any such Letter of Credit or of the
proceeds thereof; (vii) the misapplication by the beneficiary of any such Letter
of Credit of the proceeds of any drawing under such Letter of Credit; or (viii)
any consequences arising from causes beyond the control of Agent, including any
governmental acts, and none of the above shall affect or impair, or prevent the
vesting of, any of Agent's rights or powers hereunder. Nothing in the preceding
sentence shall relieve Agent from liability for Agent's gross negligence or
willful misconduct in connection with actions or omissions described in such
clauses (i) through (viii) of such sentence, in the event such gross negligence
or willful misconduct is determined by a final judgment of a court of competent
jurisdiction. In no event shall Agent or Agent's Affiliates be liable to
Borrower for any indirect, consequential, incidental, punitive, exemplary or
special damages or expenses (including without limitation attorneys' fees), or
for any damages resulting from any change in the value of any property relating
to a Letter of Credit or an Acceptance.
Without limiting the generality of the foregoing, Agent and each of its
Affiliates (i) may rely on any oral or other communication believed in good
faith by Agent or such Affiliate to have been authorized or given by or on
behalf of the applicant for a Letter of Credit; (ii) may honor any presentation
if the documents presented appear on their face substantially to comply with the
terms and conditions of the relevant Letter of Credit; (iii) may honor a
previously dishonored presentation under a Letter of Credit, whether such
dishonor was pursuant to a court order, to settle or compromise any claim of
wrongful dishonor, or otherwise, and shall be entitled to reimbursement to the
same extent as if such presentation had initially been honored, together with
any interest paid by Agent or its Affiliates; (iv) may honor any drawing that is
payable upon presentation of a statement advising negotiation or payment, upon
receipt of such statement (even if such statement indicates that a draft or
other document is being delivered separately), and shall not be liable for any
failure of any such draft or other document to arrive, or to conform in any way
with the relevant Letter of Credit; (v) may pay any paying or negotiating bank
claiming that it rightfully honored under the laws or practices of the place
where such bank is located; and (vi) may settle or adjust any claim or demand
made on Agent or its Affiliate in any way related to any order issued at the
applicant's request to an air carrier, a letter of guarantee or of indemnity
issued to a carrier or any similar document (each an "Order") and honor any
drawing in connection with any Letter of Credit that is the subject of such
Order, notwithstanding that any drafts or other documents presented in
connection with such Letter of Credit fail to conform in any way with such
Letter of Credit.
In furtherance and extension and not in limitation of the specific
provisions set forth above, any action taken or omitted by Agent under or in
connection with the Letters of Credit
30
issued by it or any documents and certificates delivered thereunder, if taken or
omitted in good faith and without gross negligence, shall not put Agent under
any resulting liability to any Borrower or any Lender.
2.19 Additional Payments.
Any sums expended by Agent or any Lender due to any Borrower's failure
to perform or comply with its obligations under this Agreement or any Other
Document including, without limitation, any Borrower's obligations under
Sections 4.2, 4.4, 4.12, 4.13, 4.14 and 6.1 hereof, may be charged to Borrowers'
Account as a Revolving Advance and added to the Obligations.
2.20 Manner of Borrowing and Payment.
(a) Each borrowing of Revolving Advances shall be advanced according to the
applicable Commitment Percentages of Lenders.
(b) Each payment (including each prepayment) by Borrowers on account of the
principal of and interest on the Revolving Advances, shall be applied to the
Revolving Advances pro rata according to the applicable Commitment Percentages
of Lenders. Except as expressly provided herein, all payments (including
prepayments) to be made by any Borrower on account of principal, interest and
fees shall be made without set off or counterclaim and shall be made to Agent on
behalf of Lenders to the Payment Office, in each case on or prior to 1:00 P.M.,
New York time, in Dollars and in immediately available funds.
(c) (i) Notwithstanding anything to the contrary contained in Sections 2.20(a)
and (b) hereof, commencing with the first Business Day following the Closing
Date, each borrowing of Revolving Advances shall be advanced by Agent and each
payment by any Borrower on account of Revolving Advances shall be applied first
to those Revolving Advances advanced by Agent. On or before 1:00 P.M., New York
time, on each Settlement Date commencing with the first Settlement Date
following the Closing Date, Agent and Lenders shall make certain payments as
follows: (A) if the aggregate amount of new Revolving Advances made by Agent
during the preceding Week (if any) exceeds the aggregate amount of repayments
applied to outstanding Revolving Advances during such preceding Week, then each
Lender shall provide Agent with funds in an amount equal to its applicable
Commitment Percentage of the difference between (w) such Revolving Advances and
(x) such repayments and (B) if the aggregate amount of repayments applied to
outstanding Revolving Advances during such Week exceeds the aggregate amount of
new Revolving Advances made during such Week, then Agent shall provide each
Lender with funds in an amount equal to its applicable Commitment Percentage of
the difference between (y) such repayments and (z) such Revolving Advances.
(ii) Each Lender shall be entitled to earn interest at the
applicable Revolving Interest Rate on outstanding Advances which it has funded.
(iii) Promptly following each Settlement Date, Agent shall submit
to each Lender a certificate with respect to payments received and Advances made
during the Week immediately
31
preceding such Settlement Date. Such certificate of Agent shall be conclusive in
the absence of manifest error.
(d) If any Lender or Participant (a "benefitted Lender") shall at any time
receive any payment of all or part of its Advances, or interest thereon, or
receive any Collateral in respect thereof (whether voluntarily or involuntarily
or by set-off) in a greater proportion than any such payment to and Collateral
received by any other Lender, if any, in respect of such other Lender's
Advances, or interest thereon, and such greater proportionate payment or receipt
of Collateral is not expressly permitted hereunder, such benefitted Lender shall
purchase for cash from the other Lenders a participation in such portion of each
such other Lender's Advances, or shall provide such other Lender with the
benefits of any such Collateral, or the proceeds thereof, as shall be necessary
to cause such benefitted Lender to share the excess payment or benefits of such
Collateral or proceeds ratably with each of the other Lenders; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest. Each Lender so purchasing a portion of another
Lender's Advances may exercise all rights of payment (including, without
limitation, rights of set-off) with respect to such portion as fully as if such
Lender were the direct holder of such portion.
(e) Unless Agent shall have been notified by telephone, confirmed in writing, by
any Lender that such Lender will not make the amount which would constitute its
applicable Commitment Percentage of the Advances available to Agent, Agent may
(but shall not be obligated to) assume that such Lender shall make such amount
available to Agent on the next Settlement Date and, in reliance upon such
assumption, make available to Borrowers a corresponding amount. Agent will
promptly notify Borrowers of its receipt of any such notice from a Lender. If
such amount is made available to Agent on a date after such next Settlement
Date, such Lender shall pay to Agent on demand an amount equal to the product of
(i) the daily average Federal Funds Effective Rate (computed on the basis of a
year of 360 days) during such period as quoted by Agent, times (ii) such amount,
times (iii) the number of days from and including such Settlement Date to the
date on which such amount becomes immediately available to Agent. A certificate
of Agent submitted to any Lender with respect to any amounts owing under this
paragraph (e) shall be conclusive, in the absence of manifest error. If such
amount is not in fact made available to Agent by such Lender within three (3)
Business Days after such Settlement Date, Agent shall be entitled to recover
such an amount, with interest thereon at the rate per annum then applicable to
such Revolving Advances hereunder, on demand from Borrowers; provided, however,
that Agent's right to such recovery shall not prejudice or otherwise adversely
affect Borrowers' rights (if any) against such Lender.
2.21 Use of Proceeds.
Borrowers shall apply the proceeds of Advances to (a) refinance
indebtedness owed under the Existing Credit Facility, (b) pay fees and expenses
relating to this transaction, and (c) to provide for their working capital and
other general corporate purposes. From and after the Closing Date, the Existing
Credit Facility is amended and restated and evidenced with this Agreement and
the Other Documents.
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2.22 Defaulting Lender.
(a) Notwithstanding anything to the contrary contained herein, in the event any
Lender (x) has refused (which refusal constitutes a breach by such Lender of its
obligations under this Agreement) to make available its portion of any Advance
or (y) notifies either Agent or Borrowing Agent that it does not intend to make
available its portion of any Advance (if the actual refusal would constitute a
breach by such Lender of its obligations under this Agreement) (each, a "Lender
Default"), all rights and obligations hereunder of such Lender (a "Defaulting
Lender") as to which a Lender Default is in effect and of the other parties
hereto shall be modified to the extent of the express provisions of this Section
2.22 while such Lender Default remains in effect.
(b) Advances shall be incurred pro rata from Lenders (the "Non-Defaulting
Lenders") which are not Defaulting Lenders based on their respective Commitment
Percentages, and no Commitment Percentage of any Lender or any pro rata share of
any Advances required to be advanced by any Lender shall be increased as a
result of such Lender Default. Amounts received in respect of principal of any
type of Advances shall be applied to reduce the applicable Advances of each
Lender pro rata based on the aggregate of the outstanding Advances of that type
of all Lenders at the time of such application; provided, that, such amount
shall not be applied to any Advances of a Defaulting Lender at any time when,
and to the extent that, the aggregate amount of Advances of any Non-Defaulting
Lender exceeds such Non-Defaulting Lender's Commitment Percentage of all
Advances then outstanding.
(c) A Defaulting Lender shall not be entitled to give instructions to Agent or
to approve, disapprove, consent to or vote on any matters relating to this
Agreement and the Other Documents. All amendments, waivers and other
modifications of this Agreement and the Other Documents may be made without
regard to a Defaulting Lender and, for purposes of the definition of "Required
Lenders", a Defaulting Lender shall be deemed not to be a Lender and not to have
Advances outstanding.
(d) Other than as expressly set forth in this Section 2.22, the rights and
obligations of a Defaulting Lender (including the obligation to indemnify Agent)
and the other parties hereto shall remain unchanged. Nothing in this Section
2.22 shall be deemed to release any Defaulting Lender from its obligations under
this Agreement and the Other Documents, shall alter such obligations, shall
operate as a waiver of any default by such Defaulting Lender hereunder, or shall
prejudice any rights which any Borrower, Agent or any Lender may have against
any Defaulting Lender as a result of any default by such Defaulting Lender
hereunder.
(e) In the event a Defaulting Lender retroactively cures to the satisfaction of
Agent the breach which caused a Lender to become a Defaulting Lender, such
Defaulting Lender shall no longer be a Defaulting Lender and shall be treated as
a Lender under this Agreement.
3. INTEREST AND FEES.
3.1 Interest.
Interest on Advances shall be payable in arrears on the first Business
Day of each month with respect to Domestic Rate Loans and, with respect to
Eurodollar Rate Loans, at the end of
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each Interest Period, and if such Interest Period is longer than three (3)
months, also on the 90th day of such Interest Period. Interest charges shall be
computed on the actual principal amount of Advances outstanding during the month
(the "Monthly Advances") at a rate per annum equal to, with respect to Revolving
Advances, the applicable Revolving Interest Rate. Whenever, subsequent to the
date of this Agreement, the Alternate Base Rate is increased or decreased, the
Revolving Interest Rate for Domestic Rate Loans shall be similarly changed
without notice or demand of any kind by an amount equal to the amount of such
change in the Alternate Base Rate during the time such change or changes remain
in effect. The Eurodollar Rate shall be adjusted with respect to Eurodollar Rate
Loans without notice or demand of any kind on the effective date of any change
in the Reserve Percentage as of such effective date. Upon and after the
occurrence of an Event of Default, and during the continuation thereof, (A) the
Obligations other than Eurodollar Rate Loans shall bear interest at the
Revolving Interest Rate for Domestic Rate Loans plus two percent (2%) per annum
and (B) Eurodollar Rate Loans shall bear interest at the Revolving Interest Rate
for Eurodollar Rate Loans plus two percent (2%) per annum (as applicable, the
"Default Rate").
3.2 Letter of Credit and Acceptance Fees.
(a) Borrowers shall pay (x) to Agent, for the benefit of Lenders, fees for each
Letter of Credit for the period from and excluding the date of issuance of same
to and including the date of expiration or termination, equal to the average
daily face amount of each outstanding Letter of Credit multiplied by a
percentage per annum equal to the Applicable Margin (as set forth on Schedule
1.2(A)) for the Eurodollar Rate minus one-fourth percent (.25%), such fees to be
calculated on the basis of a 360-day year for the actual number of days elapsed
and to be payable monthly in arrears on the first Business Day of each month and
on the last day of the Term, (y) to the Issuer, for its own account, fees for
each Letter of Credit for the period from and excluding the date of issuance of
same to and including the date of expiration or termination, equal to the
average daily face amount of each outstanding Letter of Credit multiplied by
one-fourth percent (.25%) per annum, such fees to be calculated on the basis of
a 360-day year for the actual number of days elapsed and to be payable monthly
in arrears on the first Business Day of each month and on the last day of the
Term, and (z) to the Issuer, any and all fees and expenses as agreed upon by the
Issuer and the Borrowing Agent in connection with any Letter of Credit,
including, without limitation, in connection with the opening, amendment or
renewal of any such Letter of Credit and any acceptances created thereunder and
shall reimburse Agent for any and all fees and expenses, if any, paid by Agent
to the Issuer (all of the foregoing fees, the "Letter of Credit and Acceptance
Fees"). All such charges shall be deemed earned in full on the date when the
same are due and payable hereunder and shall not be subject to rebate or
proration upon the termination of this Agreement for any reason. Any such charge
in effect at the time of a particular transaction shall be the charge for that
transaction, notwithstanding any subsequent change in the Issuer's prevailing
charges for that type of transaction. All Letter of Credit and Acceptance Fees
payable hereunder shall be deemed earned in full on the date when the same are
due and payable hereunder and shall not be subject to rebate or proration upon
the termination of this Agreement for any reason.
(b) Following the occurrence of an Event of Default and on demand of the Agent,
Borrowers will cause cash to be deposited and maintained in an account with
Agent, as cash collateral, in an amount equal to one hundred and five percent
(105%) of the outstanding Letters
34
of Credit and Acceptances, and each Borrower hereby irrevocably authorizes
Agent, in its discretion, on such Borrower's behalf and in such Borrower's name,
to open such an account and to make and maintain deposits therein, or in an
account opened by such Borrower, in the amounts required to be made by such
Borrower, out of the proceeds of Receivables or other Collateral or out of any
other funds of such Borrower coming into any Lender's possession at any time.
Agent will invest such cash collateral (less applicable reserves) in such short-
term money-market items as to which Agent and such Borrower mutually agree and
the net return on such investments shall be credited to such account and
constitute additional cash collateral. No Borrower may withdraw amounts credited
to any such account except upon payment and performance in full of all
Obligations and termination of this Agreement.
3.3 Facility Fee.
If, for any month during the Term, the average daily unpaid balance of
the Advances for each day of such month does not equal the Maximum Revolving
Advance Amount, then Borrowers shall pay to Agent for the ratable benefit of
Lenders a fee at a rate equal to the Facility Fee per annum on the amount by
which the Maximum Revolving Advance Amount exceeds such average daily unpaid
balance. Such fee shall be payable to Agent in arrears on the first Business Day
of each month.
3.4 Reserved.
3.5 Computation of Interest and Fees.
Interest and fees hereunder shall be computed on the basis of a year of
360 days and for the actual number of days elapsed. If any payment to be made
hereunder becomes due and payable on a day other than a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and interest
thereon shall be payable at the Revolving Interest Rate for Domestic Rate Loans
during such extension.
3.6 Maximum Charges.
In no event whatsoever shall interest and other charges charged
hereunder exceed the highest rate permissible under law. In the event interest
and other charges as computed hereunder would otherwise exceed the highest rate
permitted under law, such excess amount shall be first applied to any unpaid
principal balance owed by Borrowers, and if the then remaining excess amount is
greater than the previously unpaid principal balance, Lenders shall promptly
refund such excess amount to Borrowers and the provisions hereof shall be deemed
amended to provide for such permissible rate.
3.7 Increased Costs.
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 any Lender (for purposes of this Section 3.7, the term
"Lender" shall include Agent or any Lender and any corporation or bank
controlling Agent or any Lender) and the office or branch where Agent or any
Lender (as so defined) makes or maintains any Eurodollar Rate Loans with any
request or directive (whether
35
or not having the force of law) from any central bank or other financial,
monetary or other authority, shall:
(a) subject Agent or any Lender to any tax of any kind whatsoever with respect
to this Agreement or any Other Document or change the basis of taxation of
payments to Agent or any Lender 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 or any Lender by 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, any office of Agent or
any Lender, including (without limitation) pursuant to Regulation D of the Board
of Governors of the Federal Reserve System; or
(c) impose on Agent or any Lender or the London interbank Eurodollar market 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 or any
Lender of making, renewing or maintaining its Advances hereunder by an amount
that Agent or such Lender deems to be material or to reduce the amount of any
payment (whether of principal, interest or otherwise) in respect of any of the
Advances by an amount that Agent or such Lender deems to be material, then, in
any case Borrowers shall promptly pay Agent or such Lender, upon its demand,
such additional amount as will compensate Agent or such Lender for such
additional cost or such reduction, as the case may be, provided that the
foregoing shall not apply to increased costs which are reflected in the
Eurodollar Rate. Agent or such Lender shall certify the amount of such
additional cost or reduced amount to Borrowers, and such certification shall be
conclusive absent manifest error.
3.8 Basis For Determining Interest Rate Inadequate or Unfair.
In the event that Agent or any Lender shall have determined that:
(a) reasonable means do not exist for ascertaining the Eurodollar Rate
applicable pursuant to Section 2.2 hereof for any Interest Period; or
(b) Dollar deposits in the relevant amount and for the relevant maturity are not
available in the London interbank Eurodollar market, with respect to an
outstanding Eurodollar Rate Loan, a proposed Eurodollar Rate Loan, or a proposed
conversion of a Domestic Rate Loan into a Eurodollar Rate Loan,
then Agent shall give Borrowing Agent prompt written, telephonic or telegraphic
notice of such determination. If such notice is given, (i) any such requested
Eurodollar Rate Loan shall be made as a Domestic Rate Loan, unless Borrowing
Agent shall notify Agent no later than 10:00 a.m. (New
36
York City time) two (2) Business Days prior to the date of such proposed
borrowing, that its request for such borrowing shall be cancelled or made as an
unaffected type of Eurodollar Rate Loan, (ii) any Domestic Rate Loan or
Eurodollar Rate Loan which was to have been converted to an affected type of
Eurodollar Rate Loan shall be continued as or converted into a Domestic Rate
Loan, or, if Borrowing Agent shall notify Agent, no later than 10:00 a.m. (New
York City time) two (2) Business Days prior to the proposed conversion, shall be
maintained as an unaffected type of Eurodollar Rate, and (iii) any outstanding
affected Eurodollar Rate Loans shall be converted into a Domestic Rate Loan, or,
if Borrowing Agent shall notify Agent, no later than 10:00 a.m. (New York City
time) two (2) Business Days prior to the last Business Day of the then current
Interest Period applicable to such affected Eurodollar Rate Loan, shall be
converted into an unaffected type of Eurodollar Rate Loan, on the last Business
Day of the then current Interest Period for such affected Eurodollar Rate Loans.
Until such notice has been withdrawn, Lenders shall have no obligation to make
an affected type of Eurodollar Rate Loan or maintain outstanding affected
Eurodollar Rate Loans and no Borrower shall have the right to convert a Domestic
Rate Loan or an unaffected type of Eurodollar Rate Loan into an affected type of
Eurodollar Rate Loan.
3.9 Capital Adequacy.
(a) In the event that Agent or any Lender shall have determined that any
applicable law, rule, regulation or guideline regarding capital adequacy, or any
change therein, or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by Agent or any Lender
(for purposes of this Section 3.9, the term "Lender" shall include Agent or any
Lender and any corporation or bank controlling Agent or any Lender) and the
office or branch where Agent or any Lender (as so defined) makes or maintains
any Eurodollar Rate Loans with any 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 or any Lender's capital as a consequence of its obligations
hereunder to a level below that which Agent or such Lender could have achieved
but for such adoption, change or compliance (taking into consideration Agent's
and each Lender's policies with respect to capital adequacy) by an amount deemed
by Agent or any Lender to be material, then, from time to time, Borrowers shall
pay upon demand to Agent or such Lender such additional amount or amounts as
will compensate Agent or such Lender for such reduction. In determining such
amount or amounts, Agent or such Lender may use any reasonable averaging or
attribution methods. The protection of this Section 3.9 shall be available to
Agent and each Lender regardless of any possible contention of invalidity or
inapplicability with respect to the applicable law, regulation or condition.
(b) A certificate of Agent or such Lender setting forth such amount or amounts
as shall be necessary to compensate Agent or such Lender with respect to Section
3.9(a) hereof when delivered to Borrowers shall be conclusive absent manifest
error.
4. COLLATERAL: GENERAL TERMS
4.1 Security Interest in the Collateral.
To secure the prompt payment and performance to Agent and each Lender
of the Obligations, each Borrower hereby assigns, pledges and grants to Agent
for its benefit and for the ratable benefit of each Lender a continuing security
interest in and to all of its Collateral, whether now owned or existing or
hereafter acquired or arising and wheresoever located. Each Borrower shall ▇▇▇▇
its books and records as may be necessary or appropriate to evidence,
37
protect and perfect Agent's security interest and shall cause its financial
statements to reflect such security interest. Each Borrower shall promptly
provide Agent with written notice of all commercial tort claims in favor of a
Borrower which relate to the Inventory or Receivables of the Borrower and where
the value is in excess of $250,000, such notice to contain the case title
together with the applicable court and a brief description of the claim(s).
Upon delivery of each such notice, such Borrower shall be deemed to hereby grant
to Agent a security interest and lien in and to such commercial tort claims and
all proceeds thereof.
4.2 Perfection of Security Interest.
Each Borrower shall take all action that may be necessary or desirable,
or that Agent may request, so as at all times to maintain the validity,
perfection, enforceability and priority of Agent's security interest in the
Collateral or to enable Agent to protect, exercise or enforce its rights
hereunder and in the Collateral, including, but not limited to, (a) immediately
discharging all Liens other than Permitted Encumbrances, (b) using commercially
reasonable efforts to obtain landlords' or mortgagees' lien waivers with respect
to Real Property where Inventory having a value of $500,000 or more is located,
(c) delivering to Agent, endorsed or accompanied by such instruments of
assignment as Agent may specify, and stamping or marking, in such manner as
Agent may specify, any and all chattel paper, instruments, letters of credits
and advices thereof and documents evidencing or forming a part of the
Collateral, (d) entering into warehousing, lockbox and other custodial
arrangements satisfactory to Agent, and (e) executing and delivering financing
statements, control agreements, instruments of pledge, mortgages, notices and
assignments, in each case in form and substance satisfactory to Agent, relating
to the creation, validity, perfection, maintenance or continuation of Agent's
security interest under the Uniform Commercial Code or other applicable law.
Agent is hereby authorized to file financing statements signed by Agent instead
of Borrower in accordance with the Uniform Commercial Code as adopted in the
Commonwealth of Pennsylvania from time to time. By its signature hereto, each
Borrower hereby authorizes Agent to file against such Borrower, one or more
financing, continuation, or amendment statements pursuant to the Uniform
Commercial Code in form and substance satisfactory to Agent (which statements
may have a description of collateral which is broader than that set forth
herein). All charges, expenses and fees Agent may incur in doing any of the
foregoing, and any local taxes relating thereto, shall be charged to Borrowers'
Account as a Revolving Advance of a Domestic Rate Loan and added to the
Obligations, or, at Agent's option, shall be paid to Agent for the ratable
benefit of Lenders immediately upon demand.
4.3 Disposition of Collateral.
Each Borrower will safeguard and protect all Collateral for Agent's
general account and make no disposition thereof whether by sale, lease or
otherwise except (i) the sale and lease of Inventory in the ordinary course of
business, and (ii) other dispositions of Collateral which are permitted under
Section 7.1(b).
4.4 Preservation of Collateral.
Following the occurrence of a Default or Event of Default in addition
to the rights and remedies set forth in Section 11.1 hereof, Agent: (a) may at
any time take such steps as Agent
38
deems necessary to protect Agent's interest in
and to preserve the Collateral, including the hiring of such security guards or
the placing of other security protection measures as Agent may deem appropriate;
(b) may employ and maintain at any of any Borrower's premises a custodian who
shall have full authority to do all acts necessary to protect Agent's interests
in the Collateral; (c) may lease warehouse facilities to which Agent may move
all or part of the Collateral; (d) may use any Borrower's owned or leased lifts,
hoists, trucks and other facilities or equipment for handling or removing the
Collateral; and (e) shall have, and is hereby granted, a right of ingress and
egress to the places where the Collateral is located, and may proceed over and
through any of Borrower's owned or leased property. Each Borrower shall
cooperate fully with all of Agent's efforts to preserve the Collateral and will
take such actions to preserve the Collateral as Agent may direct. All of Agent's
expenses of preserving the Collateral, including any expenses relating to the
bonding of a custodian, shall be charged to Borrowers' Account as a Revolving
Advance of a Domestic Rate Loan and added to the Obligations.
4.5 Ownership of Collateral.
With respect to the Collateral, at the time the Collateral becomes
subject to Agent's security interest: (a) each Borrower shall be the sole owner
of and fully authorized and able to sell, transfer, pledge and/or grant a first
priority security interest in each and every item of the its respective
Collateral to Agent; and, except for Permitted Encumbrances the Collateral shall
be free and clear of all Liens and encumbrances whatsoever; (b) each document
and agreement executed by each Borrower or delivered to Agent or any Lender in
connection with this Agreement shall be true and correct in all respects; (c)
all signatures and endorsements of each Borrower that appear on such documents
and agreements shall be genuine and each Borrower shall have full capacity to
execute same; and (d) each Borrower's Inventory shall be located as set forth on
Schedule 4.5 and shall not be removed from such location(s) without the prior
written consent of Agent except with respect to (i) the sale of Inventory in the
ordinary course of business, (ii) the relocation of Collateral to another
location set forth on Schedule 4.5 or such other location identified in writing
by such Borrower to Agent (provided that Borrowers have obtained all necessary
lien waivers for such location as required under Section 4.2), (iii) the rental
of piling and related products in the ordinary course of business, and (iv)
Inventory which is not included in the current Borrowing Base Certificate and
which at any one time does not have a value in excess of $3,000,000.
4.6 Defense of Agent's and Lenders' Interests.
Until (a) payment and performance in full of all of the Obligations and
(b) termination of this Agreement, Agent's interests in the Collateral shall
continue in full force and effect. During such period no Borrower shall, without
Agent's prior written consent, pledge, sell (except Inventory in the ordinary
course of business and other dispositions of Collateral which do not exceed
$1,000,000 in the aggregate during any fiscal year of the Borrowers), assign,
transfer, create or suffer to exist a Lien upon or encumber or allow or suffer
to be encumbered in any way except for Permitted Encumbrances, any part of the
Collateral. Each Borrower shall defend Agent's interests in the Collateral
against any and all Persons whatsoever. At any time following demand by Agent
for payment of all Obligations, Agent shall have the right to take possession of
the indicia of the Collateral and the Collateral in whatever physical form
contained, including without limitation: labels, stationery, documents,
instruments and advertising materials. If
39
Agent exercises this right to take possession of the Collateral, Borrowers
shall, upon demand, assemble it in the best manner possible and make it
available to Agent at a place reasonably convenient to Agent. In addition, with
respect to all Collateral, Agent and Lenders shall be entitled to all of the
rights and remedies set forth herein and further provided by the Uniform
Commercial Code or other applicable law. Each Borrower shall, and Agent may, at
its option, instruct all suppliers, carriers, forwarders, warehousers or others
receiving or holding cash, checks, Inventory, documents or instruments in which
Agent holds a security interest to deliver same to Agent and/or subject to
Agent's order and if they shall come into any Borrower's possession, they, and
each of them, shall be held by such Borrower in trust as Agent's trustee, and
such Borrower will immediately deliver them to Agent in their original form
together with any necessary endorsement.
4.7 Books and Records.
Each Borrower shall (a) keep proper books of record and account in
which full, true and correct entries will be made of all dealings or
transactions of or in relation to its business and affairs; (b) set up on its
books accruals with respect to all taxes, assessments, charges, levies and
claims; and (c) on a reasonably current basis set up on its books, from its
earnings, allowances against doubtful Receivables, advances and investments and
all other proper accruals (including without limitation by reason of
enumeration, accruals for premiums, if any, due on required payments and
accruals for depreciation, obsolescence, or amortization of properties), which
should be set aside from such earnings in connection with its business. All
determinations pursuant to this subsection shall be made in accordance with, or
as required by, GAAP consistently applied in the opinion of such independent
public accountant as shall then be regularly engaged by Borrowers.
4.8 Financial Disclosure.
Upon the request of the Agent, each Borrower hereby irrevocably
authorizes and directs all accountants and auditors employed by such Borrower at
any time during the Term to exhibit and deliver to Agent and each Lender copies
of any of any Borrower's financial statements, trial balances or other
accounting records of any sort in the accountant's or auditor's possession, and
to disclose to Agent and each Lender any information such accountants may have
concerning such Borrower's financial status and business operations. Each
Borrower hereby authorizes all federal, state and municipal authorities to
furnish to Agent and each Lender copies of reports or examinations relating to
such Borrower, whether made by such Borrower or otherwise; however, Agent and
each Lender will attempt to obtain such information or materials directly from
such Borrower prior to obtaining such information or materials from such
accountants or such authorities.
4.9 Compliance with Laws.
Each Borrower shall comply with all acts, rules, regulations and orders
of any legislative, administrative or judicial body or official applicable to
its respective Collateral or any part thereof or to the operation of such
Borrower's business the non-compliance with which could reasonably be expected
to have a Material Adverse Effect on such Borrower. Each Borrower may, however,
contest or dispute any acts, rules, regulations, orders and directions of those
40
bodies or officials in any reasonable manner, provided that any related Lien is
inchoate or stayed and sufficient reserves are established to the reasonable
satisfaction of Agent to protect Agent's Lien on or security interest in the
Collateral. The Collateral at all times shall be maintained in accordance with
the requirements of all insurance carriers which provide insurance with respect
to the Collateral so that such insurance shall remain in full force and effect.
4.10 Inspection of Premises.
At all reasonable times Agent and each Lender shall have full access to
and the right to audit, check, inspect and make abstracts and copies from each
Borrower's books, records, audits, correspondence and all other papers relating
to the Collateral and the operation of each Borrower's business. Agent, any
Lender and their agents may enter upon any of each Borrower's premises at any
time during business hours and at any other reasonable time, and from time to
time, for the purpose of inspecting the Collateral and any and all records
pertaining thereto and the operation of such Borrower's business.
4.11 Insurance.
Each Borrower shall bear the full risk of any loss of any nature
whatsoever with respect to the Collateral. At each Borrower's own cost and
expense in amounts and with carriers acceptable to Agent, each Borrower shall
(a) keep all its insurable properties and properties in which each Borrower has
an interest insured against the hazards of fire, flood (with respect to
properties in flood zones), sprinkler leakage, those hazards covered by extended
coverage insurance and such other hazards, and for such amounts, as is customary
in the case of companies engaged in businesses similar to such Borrower's
including, without limitation, business interruption insurance; (b) maintain
property insurance and commercial crime insurance in such amounts as is
customary in the case of companies engaged in businesses similar to such
Borrower insuring against criminal misappropriation by insured's officers and
employees who may either singly or jointly with others at any time have access
to the assets or funds of such Borrower either directly or through authority to
draw upon such funds or to direct generally the disposition of such assets; (c)
maintain public and product liability insurance against claims for personal
injury, death or property damage suffered by others; (d) maintain all such
worker's compensation or similar insurance as may be required under the laws of
any state or jurisdiction in which such Borrower is engaged in business; (e)
furnish Agent with (i) certificates of insurance which evidence of the
maintenance of such policies within five (5) days of the renewal thereof, with
copies of such insurance policies as soon as reasonably available thereafter,
and (ii) appropriate endorsements in form and substance satisfactory to Agent,
naming Agent as a loss payee with respect to property insurance and additional
insured with respect to liability insurance, as its interests may appear, and
providing (A) that all proceeds thereunder shall be payable to Agent as its
interests may appear, (B) no such insurance shall be affected by any act or
neglect of the insured or owner of the property described in such policy, and
(C) that such policy and loss payable clauses may not be cancelled, amended or
terminated unless at least thirty (30) days' prior written notice is given to
Agent. In the event of any loss thereunder at such time as there is a Default or
an Event of Default or the Borrowers do not meet the Minimum Availability
Threshold (or such loss would result in a Default, Event of Default or the
Borrowers' failure to meet the Minimum Availability Threshold), the carriers
named therein hereby are directed by Agent and the applicable Borrower to make
payment for such loss to Agent and not
41
to such Borrower and Agent jointly. If any insurance losses are paid by check,
draft or other instrument payable to any Borrower and Agent jointly, Agent may
endorse such Borrower's name thereon and do such other things as Agent may deem
advisable to reduce the same to cash. At such time as there is a Default or
Event of Default or the Borrowers do not meet the Minimum Availability Threshold
(or the applicable insurance loss would result in a Default, an Event of Default
or the Borrowers' failure to meet the Minimum Availability Threshold), Agent is
hereby authorized to adjust and compromise claims under insurance coverage
referred to in clauses (a), and (b) above with respect to losses under property
policies which relate to the Collateral or liability polices for which Agent is
named as an additional insured. All loss recoveries received by Agent upon any
such insurance may be applied to the Obligations, in such order as Agent in its
sole discretion shall determine. Any surplus shall be paid by Agent to Borrowers
or applied as may be otherwise required by law. Any deficiency thereon shall be
paid by Borrowers to Agent, on demand. Anything hereinabove to the contrary
notwithstanding, and subject to the fulfillment of the conditions set forth
below, Agent shall remit to Borrowers insurance proceeds received by Agent
during any calendar year under insurance policies procured and maintained by
Borrowers which insure Borrowers' insurable properties to the extent such
insurance proceeds do not exceed $2,000,000 in the aggregate during such
calendar year or $1,000,000 per occurrence. In the event the amount of insurance
proceeds received by Agent for any occurrence exceeds $1,000,000 and there is a
Default or an Event of Default or the Borrowers do not meet the Minimum
Availability Threshold (or such loss would result in a Default, Event of Default
or the Borrowers' failure to meet the Minimum Availability Threshold), then
Agent shall not be obligated to remit the insurance proceeds which relate to any
Collateral to Borrowers unless Borrowers shall provide Agent with evidence
reasonably satisfactory to Agent that the insurance proceeds will be used by
Borrowers to repair, replace or restore the Collateral which was the subject of
the insurable loss. In the event Borrowers have previously received (or, after
giving effect to any proposed remittance by Agent to Borrowers would receive)
insurance proceeds which equal or exceed $2,000,000 in the aggregate during any
calendar year and there is a Default or Event of Default or the Borrowers do not
meet the Minimum Availability Threshold (or such loss or losses would result in
a Default, Event of Default or the Borrowers' failure to meet the Minimum
Availability Threshold), then Agent may, in its sole discretion, either remit
the insurance proceeds to Borrowers upon Borrowers providing Agent with evidence
reasonably satisfactory to Agent that the insurance proceeds will be used by
Borrowers to repair, replace or restore the insured property which was the
subject of the insurable loss, or apply the proceeds to the Obligations, as
aforesaid. The agreement of Agent to remit insurance proceeds in the manner
above provided shall be subject in each instance to satisfaction of each of the
following conditions: (x) No Event of Default or Default shall then have
occurred and the Borrowers meet the Minimum Availability Threshold, and (y)
Borrowers shall use such insurance proceeds to repair, replace or restore the
insurable property which was the subject of the insurable loss and for no other
purpose.
4.12 Failure to Pay Insurance.
If any Borrower fails to obtain insurance as hereinabove provided, or
to keep the same in force, Agent, if Agent so elects, may obtain such insurance
and pay the premium therefor on behalf of such Borrower, and charge Borrowers'
Account therefor as a Revolving Advance of a Domestic Rate Loan and such
expenses so paid shall be part of the Obligations.
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4.13 Payment of Taxes.
Each Borrower will pay, when due, all taxes, assessments and other
Charges lawfully levied or assessed upon such Borrower or any of the Collateral
including, without limitation, real and personal property taxes, assessments and
charges and all franchise, income, employment, social security benefits,
withholding, and sales taxes except to the extent that such Borrower is
contesting or disputing such taxes, assessments or Charges in good faith, by
protest, administrative or judicial appeal or similar proceedings all conducted
in an expeditious manner, provided that any related tax lien is stayed and
sufficient reserves are established to the reasonable satisfaction of the Agent
to protect the security interest and Liens on the Collateral in favor of the
Agent for the benefit of the Lenders. If any tax by any governmental authority
is or may be imposed on or as a result of any transaction between any Borrower
and Agent or any Lender which Agent or any Lender may be required to withhold or
pay or if any taxes, assessments, or other Charges remain unpaid after the date
fixed for their payment, or if any claim shall be made which, in Agent's or any
Lender's opinion, may possibly create a valid Lien on the Collateral, Agent may
without notice to Borrowers pay the taxes, assessments or other Charges and each
Borrower hereby indemnifies and holds Agent and each Lender harmless in respect
thereof. Agent will not pay any taxes, assessments or Charges to the extent that
any Borrower has contested or disputed those taxes, assessments or Charges in
good faith, by expeditious protest, administrative or judicial appeal or similar
proceeding provided that any related tax lien is stayed and sufficient reserves
are established to the reasonable satisfaction of Agent to protect Agent's
security interest in or Lien on the Collateral. The amount of any payment by
Agent under this Section 4.13 shall be charged to Borrowers' Account as a
Revolving Advance of a Domestic Rate Loan and added to the Obligations and,
until Borrowers shall furnish Agent with an indemnity therefor (or supply Agent
with evidence satisfactory to Agent that due provision for the payment thereof
has been made), Agent may hold without interest any balance standing to
Borrowers' credit and Agent shall retain its security interest in any and all
Collateral held by Agent.
4.14 Payment of Leasehold Obligations.
Each Borrower shall at all times pay, when and as due, its rental
obligations under all leases material to the operations of such Borrower under
which it is a tenant, and shall otherwise comply, in all material respects, with
all other terms of such leases and keep them in full force and effect and, at
Agent's request will provide evidence of having done so.
4.15 Receivables.
(a) Nature of Receivables. Each of the Receivables, to the best of each
Borrower's knowledge based upon reasonable inquiry, shall be a bona fide and
valid account representing a bona fide indebtedness incurred by the Customer
therein named, for a fixed sum as set forth in the invoice relating thereto
(provided immaterial or unintentional invoice errors shall not be deemed to be a
breach hereof) with respect to an absolute sale or lease and delivery of goods
upon stated terms of a Borrower, or work, labor or services theretofore rendered
by a Borrower as of the date each Receivable is created. Same shall be due and
owing in accordance with the applicable Borrower's standard terms of sale
without dispute, setoff or counterclaim except as may be stated on the accounts
receivable schedules delivered by Borrowers to Agent.
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(b) Solvency of Customers. Each Customer, to the best of each Borrower's
knowledge, as of the date each Receivable is created, is and will be solvent and
able to pay all Receivables on which the Customer is obligated in full when due
or with respect to such Customers of any Borrower who are not solvent such
Borrower has set up on its books and in its financial records bad debt reserves
adequate to cover such Receivables.
(c) Locations of Borrower. Each Borrower's chief executive office is located at
the addresses set forth on Schedule 4.15(c) hereto. Until written notice is
given to Agent by Borrowing Agent of any other office, all essential records
pertaining to Receivables of such Borrower shall be kept at such executive
office.
(d) Collection of Receivables. Until any Borrower's authority to do so is
terminated by Agent (which notice Agent may give at any time following the
occurrence of an Event of Default or a Default and which Agent shall give when
it receives Borrowing Base Certificates evidencing that Borrowers fail to meet
the Minimum Availability Threshold), each Borrower will, at such Borrower's sole
cost and expense, collect all amounts received on Receivables as Borrower's
property and shall have the ability to direct the use of such funds as Borrower
determines, subject to the covenants set forth in this Agreement. At the
direction of Agent any time following the occurrence of an Event of Default or a
Default or when Borrowers fail to meet the Minimum Availability Threshold, each
Borrower will, at such Borrower's sole cost and expense, but on Agent's behalf
and for Agent's account, (i) collect as Agent's property and in trust for Agent
all amounts received on Receivables, and shall not commingle such collections
with any Borrower's funds or use the same except to pay Obligations, and (ii)
upon request, deliver to Agent, or deposit in the Blocked Account, in original
form and on the date of receipt thereof, all checks, drafts, notes, money
orders, acceptances, cash and other evidences of Indebtedness.
(e) Notification of Assignment of Receivables. At any time following the
occurrence of an Event of Default or a Default, Agent shall have the right to
send notice of the assignment of, and Agent's security interest in, the
Receivables to any and all Customers or any third party holding or otherwise
concerned with any of the Collateral. Thereafter, Agent shall have the sole
right to collect the Receivables, take possession of the Collateral, or both.
Agent's actual collection expenses, including, but not limited to, stationery
and postage, telephone and telegraph, secretarial and clerical expenses and the
salaries of any collection personnel used for collection, may be charged to
Borrowers' Account and added to the Obligations.
(f) Power of Agent to Act on Borrowers' Behalf. Agent shall have the right to
receive, endorse, assign and/or deliver in the name of Agent or any Borrower any
and all checks, drafts and other instruments for the payment of money relating
to the Receivables, and each Borrower hereby waives notice of presentment,
protest and non-payment of any instrument so endorsed. Each Borrower hereby
constitutes Agent or Agent's designee as such Borrower's attorney with power (i)
to endorse such Borrower's name upon any notes, acceptances, checks, drafts,
money orders or other evidences of payment or Collateral; (ii) to sign such
Borrower's name on any invoice or ▇▇▇▇ of lading relating to any of the
Receivables, drafts against Customers, assignments and verifications of
Receivables; (iii) to send verifications of Receivables to any Customer; (iv) to
sign such Borrower's name on all financing statements or any other documents or
instruments deemed necessary or appropriate by Agent to preserve,
44
protect, or perfect Agent's interest in the Collateral and to file same; (v) to
demand payment of the Receivables; (vi) to enforce payment of the Receivables by
legal proceedings or otherwise; (vii) to exercise all of Borrowers' rights and
remedies with respect to the collection of the Receivables and any other
Collateral; (viii) to settle, adjust, compromise, extend or renew the
Receivables; (ix) to settle, adjust or compromise any legal proceedings brought
to collect Receivables; (x) to prepare, file and sign such Borrower's name on a
proof of claim in bankruptcy or similar document against any Customer; (xi) to
prepare, file and sign such Borrower's name on any notice of Lien, assignment or
satisfaction of Lien or similar document in connection with the Receivables; and
(xii) to do all other acts and things necessary to carry out this Agreement. All
acts of said attorney or designee are hereby ratified and approved, and said
attorney or designee shall not be liable for any acts of omission or commission
nor for any error of judgment or mistake of fact or of law, unless done
maliciously or with gross (not mere) negligence; this power being coupled with
an interest is irrevocable while any of the Obligations remain unpaid. Agent
shall have the right at any time following the occurrence of an Event of Default
or Default, to change the address for delivery of mail addressed to any Borrower
to such address as Agent may designate and to receive, open and dispose of all
mail addressed to any Borrower.
(g) No Liability. Neither Agent nor any Lender shall, under any circumstances or
in any event whatsoever, have any liability for any error or omission or delay
of any kind occurring in the settlement, collection or payment of any of the
Receivables or any instrument received in payment thereof, or for any damage
resulting therefrom. Following the occurrence of an Event of Default or Default
Agent may, without notice or consent from any Borrower, ▇▇▇ upon or otherwise
collect, extend the time of payment of, compromise or settle for cash, credit or
upon any terms any of the Receivables or any other securities, instruments or
insurance applicable thereto and/or release any obligor thereof. Agent is
authorized and empowered to accept following the occurrence of an Event of
Default or Default the return of the goods represented by any of the
Receivables, without notice to or consent by any Borrower, all without
discharging or in any way affecting any Borrower's liability hereunder.
(h) Establishment of a Lockbox Account, Dominion Account. In the event that
Borrowers fail to meet the Minimum Availability Threshold or a Default or Event
of Default has occurred and is continuing, all proceeds of Collateral shall, at
the direction of Agent, be deposited by Borrowers into a lockbox account,
dominion account or such other "blocked account" ("Blocked Accounts") as Agent
may require pursuant to an arrangement with such bank as may be selected by
Borrowers and be acceptable to Agent. Borrowers shall issue to any such bank, an
irrevocable letter of instruction directing said bank to transfer such funds so
deposited to Agent, either to any account maintained by Agent at said bank or by
wire transfer to appropriate account(s) of Agent. Prior to such time as
Borrowers fail to meet the Minimum Availability Threshold or a Default or Event
of Default has occurred and is continuing, Borrowers shall have the ability to
direct the use of such funds subject to the covenants set forth in this
Agreement; provided however, in the event that Borrowers fail to meet the
Minimum Availability Threshold or a Default or Event of Default has occurred and
is continuing, all funds deposited in any Blocked Account shall immediately
become the property of Agent, to be applied to the Obligations, and Borrowers
shall obtain the agreement by such bank to waive any offset rights against the
funds so deposited. Neither Agent nor any Lender assumes any responsibility for
such blocked account arrangement, including without limitation, any claim of
45
accord and satisfaction or release with respect to deposits accepted by any bank
thereunder. Alternatively, Agent may in its sole discretion establish depository
accounts ("Depository Accounts") in the name of Agent at a bank or banks for the
deposit of such funds and Borrowers shall deposit all proceeds of Collateral or
cause same to be deposited, in kind, in such Depository Accounts of Agent in
lieu of depositing same to the Blocked Accounts. Borrowers shall have the
ability to direct the use of such funds as permitted under this Agreement;
provided however, in the event that Borrowers fail to meet the Minimum
Availability Threshold or a Default or Event of Default has occurred and is
continuing, all funds deposited in such Blocked Account shall immediately become
the property of Agent, to be applied to the Obligations. In the event that the
Agent's dominion of the Receivables has been established under this Section
4.15(h) based solely upon Borrowers' failure to meet the Minimum Availability
Threshold and the Borrowers thereafter meet the Restoration Threshold, the Agent
shall terminate such dominion upon Borrowers' written request to Agent which
includes satisfactory evidence of Borrowers' compliance with the Restoration
Threshold.
(i) Adjustments. No Borrower will, without Agent's consent, compromise or adjust
any material amount of the Receivables (or extend the time for payment thereof)
or accept any material returns of merchandise or grant any additional discounts,
allowances or credits thereon except for those compromises, adjustments,
returns, discounts, credits and allowances as have been heretofore customary in
the business of such Borrower.
4.16 Inventory.
To the extent Inventory held for sale or lease has been produced by any
Borrower, it has been and will be produced in all material respects by such
Borrower in accordance with the Federal Fair Labor Standards Act of 1938, as
amended, and all rules, regulations and orders thereunder; provided however,
that liability of the Borrowers which is individually and in the aggregate less
than $500,000 shall not be deemed to be a material violation of this Section
4.16.
4.17 Maintenance of Equipment.
The Equipment shall be maintained in all material respects in good
operating condition and repair (reasonable wear and tear excepted) and all
necessary replacements of and repairs thereto shall be made so that the value
and operating efficiency of the Equipment shall be maintained and preserved; the
Borrowers shall use and operate the Equipment in material compliance with all
applicable laws, statutes, ordinances, codes, rules and regulations; provided
however, that maintenance defaults and liability under this Section 4.17 which
are individually and in the aggregate less than $500,000 shall not be deemed to
be a material violation of this Section 4.17.
4.18 Exculpation of Liability.
Nothing herein contained shall be construed to constitute Agent or any
Lender as any Borrower's agent for any purpose whatsoever, nor shall Agent or
any Lender be responsible or liable for any shortage, discrepancy, damage, loss
or destruction of any part of the Collateral wherever the same may be located
and regardless of the cause thereof. Neither Agent nor any Lender, whether by
anything herein or in any assignment or otherwise, assume any of any
46
Borrower's obligations under any contract or agreement assigned to Agent or such
Lender, and neither Agent nor any Lender shall be responsible in any way for the
performance by any Borrower of any of the terms and conditions thereof.
4.19 Environmental Matters.
(a) Borrowers shall ensure that the Real Property remains in material compliance
with all Environmental Laws, and they shall not place or permit to be placed any
Hazardous Substances on any Real Property except as permitted by applicable law
or appropriate governmental authorities or which would not result in a material
and adverse effect on such Real Property.
(b) Borrowers shall establish and maintain a system to assure and monitor
continued compliance in all material respects with all applicable Environmental
Laws, which system shall include periodic reviews of such compliance.
(c) Borrowers shall (i) employ in connection with the use of the Real Property
appropriate technology necessary to maintain material compliance with any
applicable Environmental Laws and (ii) in all material respects dispose of any
and all Hazardous Waste generated at the Real Property only at facilities and
with carriers that maintain valid permits under RCRA and any other applicable
Environmental Laws. Borrowers shall use their best efforts to obtain
certificates of disposal, such as hazardous waste manifest receipts, from all
treatment, transport, storage or disposal facilities or operators employed by
Borrowers in connection with the transport or disposal of any Hazardous Waste
generated at the Real Property.
(d) In the event any Borrower obtains, gives or receives notice of any material
Release or threat of material Release of a reportable quantity of any Hazardous
Substances at the Real Property (any such event being hereinafter referred to as
a "Hazardous Discharge") or receives any notice of material violation, request
for information or notification that it is potentially responsible for
investigation or cleanup of environmental conditions at the Real Property,
demand letter or complaint, order, citation, or other written notice with regard
to any Hazardous Discharge or violation of Environmental Laws affecting the Real
Property or any Borrower's interest therein (any of the foregoing is referred to
herein as an "Environmental Complaint") from any Governmental Body, including
any state agency responsible in whole or in part for environmental matters in
the state in which the Real Property is located or the United States
Environmental Protection Agency (any such person or entity hereinafter the
"Authority"), then Borrowing Agent shall, within five (5) Business Days, give
written notice of same to Agent detailing facts and circumstances of which any
Borrower is aware giving rise to the Hazardous Discharge or Environmental
Complaint. Such information is to be provided to allow Agent to protect its
security interest in the Collateral and is not intended to create nor shall it
create any obligation upon Agent or any Lender with respect thereto.
(e) Borrowers shall promptly forward to Agent copies of any notification of
potential liability, demand letter relating to potential responsibility with
respect to the investigation or cleanup of Hazardous Substances at any other
site owned, operated or used by any Borrower to dispose of Hazardous Substances
and shall continue to forward copies of correspondence between any Borrower and
the Authority regarding such claims to Agent until the claim is
47
settled. Borrowers shall promptly forward to Agent copies of all documents and
reports concerning a material Hazardous Discharge at the Real Property that any
Borrower is required to file under any Environmental Laws. Such information is
to be provided solely to allow Agent to protect Agent's security interest in the
Collateral.
(f) Borrowers shall respond promptly to any Hazardous Discharge or Environmental
Complaint and in all material respects take all necessary action in order to
safeguard the health of any Person and to avoid subjecting the Collateral or
Real Property to any Lien. If any Borrower shall fail to respond promptly to any
Hazardous Discharge or Environmental Complaint or any Borrower shall fail to
comply with any of the requirements of any Environmental Laws, Agent on behalf
of Lenders may, but without the obligation to do so, for the sole purpose of
protecting Agent's interest in Collateral: (i) give such notices or (ii) enter
onto the Real Property (or authorize third parties to enter onto the Real
Property) and take such actions as Agent (or such third parties as directed by
Agent) deem reasonably necessary or advisable, to clean up, remove, mitigate or
otherwise deal with any such Hazardous Discharge or Environmental Complaint. All
reasonable costs and expenses incurred by Agent and Lenders (or such third
parties) in the exercise of any such rights, including any sums paid in
connection with any judicial or administrative investigation or proceedings,
fines and penalties, together with interest thereon from the date expended at
the Default Rate for Domestic Rate Loans constituting Revolving Advances shall
be paid upon demand by Borrowers, and until paid shall be added to and become a
part of the Obligations secured by the Liens created by the terms of this
Agreement or any other agreement between Agent, any Lender and any Borrower.
(g) Promptly upon the written request of Agent in its reasonable discretion from
time to time, Borrowers shall provide Agent, at Borrowers' expense, with an
environmental site assessment or environmental audit report prepared by an
environmental engineering firm acceptable in the reasonable opinion of Agent, to
assess with a reasonable degree of certainty the existence of a Hazardous
Discharge and the potential costs in connection with abatement, cleanup and
removal of any Hazardous Substances found on, under, at or within the Real
Property. Any report or investigation of such Hazardous Discharge proposed and
acceptable to an appropriate Authority that is charged to oversee the clean-up
of such Hazardous Discharge shall be acceptable to Agent. If such estimates,
individually or in the aggregate, exceed $1,500,000, Agent shall have the right
to require Borrowers to post a bond, letter of credit or other security
reasonably satisfactory to Agent to secure payment of these costs and expenses.
(h) Borrowers shall defend and indemnify Agent and Lenders and hold Agent,
Lenders and their respective employees, agents, directors and officers harmless
from and against all loss, liability, damage and expense, claims, costs, fines
and penalties, including attorney's fees, suffered or incurred by Agent or
Lenders under or on account of any Environmental Laws, including, without
limitation, the assertion of any Lien thereunder, with respect to any Hazardous
Discharge, the presence of any Hazardous Substances affecting the Real Property,
whether or not the same originates or emerges from the Real Property or any
contiguous real estate, including any loss of value of the Real Property as a
result of the foregoing except to the extent such loss, liability, damage and
expense is attributable to any Hazardous Discharge resulting from actions on the
part of Agent or any Lender. Borrowers' obligations under this Section 4.19
shall arise upon the discovery of the presence of any Hazardous Substances at
the Real Property, whether or not any federal, state, or local environmental
agency has taken or threatened any action in
48
connection with the presence of any Hazardous Substances. Borrowers' obligation
and the indemnifications hereunder shall survive the termination of this
Agreement.
(i) For purposes of Section 4.19 and 5.7, all references to Real Property shall
be deemed to include all of Borrowers' right, title and interest in and to its
owned and leased premises.
4.20 Financing Statements.
Except as respects the financing statements filed by Agent and the
financing statements described on Schedule 1.2(B), no financing statement
covering any of the Collateral or any proceeds thereof is on file in any public
office.
5. REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants as follows:
5.1 Authority.
Each Borrower has full power, authority and legal right to enter into
this Agreement and the Other Documents and to perform all its respective
Obligations hereunder and thereunder. This Agreement and the Other Documents
constitute the legal, valid and binding obligation of such Borrower enforceable
in accordance with their terms, except as such enforceability may be limited by
any applicable bankruptcy, insolvency, moratorium or similar laws affecting
creditors' rights generally. The execution, delivery and performance of this
Agreement and of the Other Documents (a) are within such Borrower's corporate
powers, have been duly authorized, are not in contravention of law or the terms
of such Borrower's by-laws, certificate of incorporation or other applicable
documents relating to such Borrower's formation or to the conduct of such
Borrower's business or of any material agreement or undertaking to which such
Borrower is a party or by which such Borrower is bound, and (b) will not
conflict with nor result in any breach in any of the provisions of or constitute
a default under or result in the creation of any Lien except Permitted
Encumbrances upon any asset of such Borrower under the provisions of any
agreement, charter document, instrument, by-law, or other instrument to which
such Borrower is a party or by which it or its property may be bound.
5.2 Formation and Qualification.
(a) Each Borrower is duly incorporated and in good standing under the laws of
the state listed on Schedule 5.2(a) and is qualified to do business and is in
good standing in the states listed on Schedule 5.2(a) which constitute all
states in which qualification and good standing are necessary for such Borrower
to conduct its business and own its property and where the failure to so qualify
could reasonably be expected to have a Material Adverse Effect on such Borrower.
Each Borrower has delivered to Agent true and complete copies of its certificate
of incorporation and by-laws and will promptly notify Agent of any amendment or
changes thereto.
(b) The only Subsidiaries of each Borrower are listed on Schedule 5.2(b).
49
5.3 Survival of Representations and Warranties.
All representations and warranties of such Borrower contained in this
Agreement and the Other Documents shall be true at the time of such Borrower's
execution of this Agreement and the Other Documents, and shall survive the
execution, delivery and acceptance thereof by the parties thereto and the
closing of the transactions described therein or related thereto.
5.4 Tax Returns.
Each Borrower's federal tax identification number is set forth on
Schedule 5.4. Each Borrower has filed all federal, state and local tax returns
and other reports each is required by law to file and has paid all taxes,
assessments, fees and other governmental charges that are due and payable.
Consolidated Federal income tax returns of ▇▇▇▇▇▇ have been examined and
reported upon by the appropriate taxing authority or closed by applicable
statute and satisfied for all fiscal years prior to and including the fiscal
year ending December 31, 2001. The provision for taxes on the books of each
Borrower are adequate for all years not closed by applicable statutes, and for
its current fiscal year, and no Borrower has any knowledge of any deficiency or
additional assessment in connection therewith not provided for on its books.
5.5 Financial Statements.
(a) The twelve-month cash flow projections of the Borrowers on a consolidated
basis and their projected balance sheets as of the Closing Date, copies of which
are annexed hereto as Exhibit 5.5(b) (the "Projections") were prepared by the
Chief Financial Officer of ▇▇▇▇▇▇, are based on underlying assumptions which
provide a reasonable basis for the projections contained therein and reflect
Borrowers' judgment based on present circumstances of the most likely set of
conditions and course of action for the projected period.
(b) The consolidated balance sheets of Borrowers and such other Persons
described therein as of December 31, 2004, and the related statements of income,
changes in stockholder's equity, and changes in cash flow for the period ended
on such date, all accompanied by reports thereon containing opinions without
qualification by independent certified public accountants, copies of which have
been delivered to Agent, have been prepared in accordance with GAAP,
consistently applied (except for changes in application in which such
accountants concur and present fairly the financial position of Borrowers at
such date and the results of their operations for such period. Since December
31, 2004, there has been no change in the condition, financial or otherwise, of
Borrowers as shown on the consolidated balance sheet as of such date and no
change in the aggregate value of machinery, equipment and Real Property owned by
Borrowers, except changes in the ordinary course of business, none of which
individually or in the aggregate has been materially adverse.
5.6 Corporate Name.
No Borrower has been known by any other corporate name in the past five
years and does not sell Inventory under any other name except as set forth on
Schedule 5.6. Except as set forth on Schedule 5.6, no Borrower has been the
surviving corporation of a merger or consolidation or acquired all or
substantially all of the assets of any Person for a purchase price exceeding
$2,000,000 during the preceding five (5) years.
50
5.7 O.S.H.A. and Environmental Compliance.
(a) Except as set forth on Schedule 5.7, each Borrower has duly complied in all
material respects with, and its facilities, business, assets, property,
leaseholds and Equipment are in compliance in all material respects with, the
provisions of the Federal Occupational Safety and Health Act, the Environmental
Protection Act, RCRA and all other Environmental Laws; there have been no
material outstanding citations, notices or orders of non-compliance issued to
any Borrower or relating to its business, assets, property, leaseholds or
Equipment under any such laws, rules or regulations; provided however, that
liability of the Borrowers which is individually and in the aggregate less than
$500,000 shall not be deemed to be a violation of this Section 5.7.
(b) Each Borrower has been issued all material required federal, state and local
licenses, certificates or permits relating to all applicable Environmental Laws.
(c) (i) There are no visible signs of releases, spills, discharges, leaks or
disposal (collectively referred to as "Releases") of Hazardous Substances at,
upon, under or within any Real Property; (ii) there are no underground storage
tanks or polychlorinated biphenyls on the Real Property; (iii) the Real Property
has ever been used as a treatment, storage or disposal facility of Hazardous
Waste; and (iv) no Hazardous Substances are present on the Real Property or any
premises leased by any Borrower, excepting in the case of the foregoing such
quantities as are not material or such quantities as are handled in accordance
with all applicable manufacturer's instructions and governmental regulations and
in proper storage containers and as are necessary for the operation of the
commercial business of any Borrower or of its tenants.
5.8 Solvency; No Litigation, Violation, Indebtedness or Default.
(a) Borrowers are solvent, able to pay their debts as they mature, have capital
sufficient to carry on their business and all businesses in which they are about
to engage, and (i) as of the Closing Date, the fair present saleable value of
their assets, calculated on a going concern basis, is in excess of the amount of
their liabilities and (ii) subsequent to the Closing Date, the fair saleable
value of their assets (calculated on a going concern basis) will be in excess of
the amount of their liabilities.
(b) As of the Closing Date and except as disclosed in Schedule 5.8(b), no
Borrower has (i) any pending or threatened litigation, arbitration, actions or
proceedings which involve the possibility of having a Material Adverse Effect on
such Borrower, and (ii) any liabilities nor indebtedness for borrowed money
other than the Obligations.
(c) No Borrower is in violation of any applicable statute, regulation or
ordinance in any respect which could reasonably be expected to have a Material
Adverse Effect on such Borrower, nor is any Borrower in violation of any order
of any court, governmental authority or arbitration board or tribunal.
(d) No Borrower nor any member of the Controlled Group maintains or contributes
to any Plan other than those listed on Schedule 5.8(d) hereto. Except as set
forth in Schedule 5.8(d), (i) no Plan has incurred any "accumulated funding
deficiency", as defined in Section 302(a)(2) of ERISA and Section 412(a) of the
Code, whether or not waived, and each Borrower and each member of the Controlled
Group has met all applicable minimum funding
51
requirements under Section 302 of ERISA in respect of each Plan, (ii) each Plan
which is intended to be a qualified plan under Section 401(a) of the Code as
currently in effect has been determined by the Internal Revenue Service to be
qualified under Section 401(a) of the Code and the trust related thereto is
exempt from federal income tax under Section 501(a) of the Code, (iii) no
Borrower nor any member of the Controlled Group has incurred any liability to
the PBGC other than for the payment of premiums, and there are no premium
payments which have become due which are unpaid, (iv) no Plan has been
terminated by the plan administrator thereof nor by the PBGC, and there is no
occurrence which would cause the PBGC to institute proceedings under Title IV of
ERISA to terminate any Plan, (v) at this time, the current value of the assets
of each Plan exceeds the present value of the accrued benefits and other
liabilities of such Plan and no Borrower nor any member of the Controlled Group
knows of any facts or circumstances which would materially change the value of
such assets and accrued benefits and other liabilities, (vi) no Borrower nor any
member of the Controlled Group has breached any of the responsibilities,
obligations or duties imposed on it by ERISA with respect to any Plan, (vii) no
Borrower nor any member of a Controlled Group has incurred any liability for any
excise tax arising under Section 4972 or 4980B of the Code, and no fact exists
which could give rise to any such liability, (viii) no Borrower nor any member
of the Controlled Group nor any fiduciary of, nor any trustee to, any Plan, has
engaged in a "prohibited transaction" described in Section 406 of the ERISA or
Section 4975 of the Code nor taken any action which would constitute or result
in a Termination Event with respect to any such Plan which is subject to ERISA,
(ix) each Borrower and each member of the Controlled Group has made all
contributions due and payable with respect to each Plan, (x) there exists no
event described in Section 4043(b) of ERISA, for which the thirty (30) day
notice period contained in 29 CFR ss.2615.3 has not been waived, (xi) no
Borrower nor any member of the Controlled Group has any fiduciary responsibility
for investments with respect to any plan existing for the benefit of persons
other than employees or former employees of any Borrower and any member of the
Controlled Group, and (xii) no Borrower nor any member of the Controlled Group
has withdrawn, completely or partially, from any Multiemployer Plan so as to
incur liability under the Multiemployer Pension Plan Amendments Act of 1980.
5.9 Patents, Trademarks, Copyrights and Licenses.
All registered patents, patent applications, trademarks, trademark
applications, service marks, service ▇▇▇▇ applications, copyrights, copyright
applications, design rights, tradenames, assumed names and licenses owned or
utilized by any Borrower and material to its operations are set forth on
Schedule 5.9 and constitute all of the intellectual property rights which are
necessary for the operation of its business; there is no objection to or pending
challenge to the validity of any such patent, trademark, copyright, design
right, tradename, trade secret or license and no Borrower is aware of any
grounds for any challenge, except as set forth in Schedule 5.9 hereto. Each
material patent, patent application, patent license, trademark, trademark
application, trademark license, service ▇▇▇▇, service ▇▇▇▇ application, service
▇▇▇▇ license, design right, copyright, copyright application and copyright
license owned or held by any Borrower and all trade secrets used by any Borrower
consist of original material or property developed by such Borrower or was
lawfully acquired by such Borrower from the proper and lawful owner thereof.
Each of such material items has been maintained so as to preserve the value
thereof from the date of creation or acquisition thereof. With respect to all
material software used by any Borrower, such Borrower is in possession of all
source and object codes
52
related to each piece of software or is the beneficiary
of a source code escrow agreement, each such source code escrow agreement being
listed on Schedule 5.9 hereto.
5.10 Licenses and Permits.
Except as set forth in Schedule 5.10, each Borrower (a) is in material
compliance with and (b) has procured and is now in possession of, all material
licenses or permits required by any applicable federal, state, provincial or
local law or regulation for the operation of its business in each jurisdiction
wherein it is now conducting or proposes to conduct business and where the
failure to procure such licenses or permits could have a Material Adverse Effect
on such Borrower.
5.11 Default of Indebtedness.
No Borrower is in default in the payment of the principal of or
interest on any Indebtedness for borrowed money or under any instrument or
agreement under or subject to which any Indebtedness for borrowed money has been
issued and no event has occurred under the provisions of any such instrument or
agreement which with or without the lapse of time or the giving of notice, or
both, constitutes or would constitute an event of default thereunder.
5.12 No Default.
No Borrower is in default in the payment or performance of any of its
contractual and uncontested obligations, and no Default has occurred.
5.13 No Burdensome Restrictions.
No Borrower is party to any contract or agreement the performance of
which could have a Material Adverse Effect on such Borrower. No Borrower has
agreed or consented to cause or permit in the future (upon the happening of a
contingency or otherwise) any of its property, whether now owned or hereafter
acquired, to be subject to a Lien which is not a Permitted Encumbrance.
5.14 No Labor Disputes.
As of the Closing Date, no Borrower is involved in any material labor
dispute; there are no strikes or walkouts or union organization of any
Borrower's employees threatened or in existence and no labor contract is
scheduled to expire during the Term other than as set forth on Schedule 5.14
hereto.
5.15 Margin Regulations.
No Borrower is engaged, nor will it engage, principally or as one of
its important activities, in the business of extending credit for the purpose of
"purchasing" or "carrying" any "margin stock" within the respective meanings of
each of the quoted terms under Regulation U of the Board of Governors of the
Federal Reserve System as now and from time to time hereafter in effect. No part
of the proceeds of any Advance will be used for "purchasing" or "carrying"
"margin stock" as defined in Regulation U of such Board of Governors.
53
5.16 Investment Company Act.
No Borrower is an "investment company" registered or required to be
registered under the Investment Company Act of 1940, as amended, nor is it
controlled by such a company.
5.17 Disclosure.
No representation or warranty made by any Borrower in this Agreement or
in any financial statement, report, certificate or any other document furnished
in connection herewith or therewith contains any untrue statement of a material
fact or omits to state any material fact necessary to make the statements herein
or therein not misleading. There is no fact known to Borrowers or which
reasonably should be known to Borrowers which Borrowers have not disclosed to
Agent in writing with respect to the transactions contemplated by this Agreement
which could reasonably be expected to have a Material Adverse Effect on any
Borrower.
5.18 Reserved.
5.19 Swaps.
No Borrower is a party to, nor will it be a party to, any swap
agreement whereby such Borrower has agreed or will agree to swap interest rates
or currencies unless it is or has been (i) effected in a standard International
Swap Dealer Association Agreement or such other standard form as is acceptable
to Agent, (ii) shall provide for the method of calculating the reimbursable
amount of the provider's credit exposure in a reasonable and customary basis,
and (iii) is not speculative in nature but relates to a hedging of indebtedness
or currency exposure of the Borrowers.
5.20 Conflicting Agreements.
No provision of any mortgage, indenture, contract, agreement, judgment,
decree or order binding on any Borrower or affecting the Collateral conflicts
with, or requires any Consent which has not already been obtained to, or would
in any way prevent the execution, delivery or performance of, the terms of this
Agreement or the Other Documents.
5.21 Application of Certain Laws and Regulations.
No Borrower is subject to any statute, rule or regulation which
regulates the incurrence of any Indebtedness, including without limitation,
statutes or regulations relative to common or interstate carriers or to the sale
of electricity, gas, steam, water, telephone, telegraph or other public utility
services.
5.22 Business and Property of Borrowers.
Upon and after the Closing Date, Borrowers do not propose to engage in
any business other than the manufacture, fabrication and distribution of
geotechnical, tubular, rail, bridge, construction, coating and concrete
products, products for surface transportation infrastructure and activities
necessary to conduct the foregoing or related to the foregoing, and (i) in the
case of Natmaya, the management of certain securities and matters related
thereto, and (ii) in the case of
54
Fosmart, the business of holding trademarks, tradenames and other matters
related thereto. On the Closing Date, each Borrower will own all the property
and possess all of the rights and Consents necessary for the conduct of the
business of such Borrower.
5.23 Section 20 Subsidiaries.
Borrowers do not intend to use and shall not use any portion of the
proceeds of the Advances, directly or indirectly, to purchase during the
underwriting period, or for 30 days thereafter, Ineligible Securities being
underwritten by a Section 20 Subsidiary.
5.24 Anti-Terrorism Laws.
(a) No Borrower nor any Affiliate of a Borrower is in violation of any
Anti-Terrorism Law or engages in or conspires to engage in any
transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any of the prohibitions set forth in
any Anti-Terrorism Law.
(b) No Borrower nor any Affiliate of a Borrower or their respective agents
acting or benefiting in any capacity in connection with the Advances or
other transactions hereunder, is any of the following (each a "Blocked
Person"):
(i) a Person that is listed in the annex to, or is otherwise subject to the
provisions of, the Executive Order No. 13224;
(ii) a Person owned or controlled by, or acting for or on behalf of, any
Person that is listed in the annex to, or is otherwise subject to the
provisions of, the Executive Order No. 13224;
(iii) a Person or entity with which any Lender is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism Law;
(iv) a Person or entity that commits, threatens or conspires to commit or
supports "terrorism" as defined in the Executive Order No. 13224;
(v) a Person or entity that is named as a "specially designated national"
on the most current list published by the U.S. Treasury Department
Office of Foreign Asset Control at its official website or any
replacement website or other replacement official publication of such
list, or
(vi) a Person or entity who is affiliated or associated with a Person or
entity listed above.
No Borrower or to the knowledge of Borrowers, any of their respective agents
acting in any capacity in connection with the Advances or other transactions
hereunder (i) conducts any business or engages in making or receiving any
contribution of funds, goods or services to or for the benefit of any Blocked
Person, or (ii) deals in, or otherwise engages in any transaction relating to,
any property or interests in property blocked pursuant to the Executive Order
No. 13224.
55
5.25 Trading with the Enemy.
No Borrower has engaged, nor does it intend to engage, in any business
or activity prohibited by the Trading with the Enemy Act.
6. AFFIRMATIVE COVENANTS
Each Borrower shall, until payment in full of the Obligations and
termination of this Agreement:
6.1 Payment of Fees.
Pay to Agent on demand all usual and customary fees and expenses which
Agent incurs in connection with (a) the forwarding of Advance proceeds and (b)
the establishment and maintenance of any Blocked Accounts or Depository Accounts
as provided for in Section 4.15(h). Agent may, without making demand, charge
Borrowers' Account for all such fees and expenses.
6.2 Conduct of Business and Maintenance of Existence and Assets.
------------------------------------------------------------
(a) Conduct continuously and operate actively in all material respects its
business according to good business practices and maintain all of its properties
useful or necessary in its business in good working order and condition
(reasonable wear and tear excepted and except as may be disposed of in
accordance with the terms of this Agreement), including, without limitation, all
licenses, patents, copyrights, design rights, tradenames, trade secrets and
trademarks and take all actions necessary to enforce and protect the validity of
any intellectual property right or other right included in the Collateral; (b)
keep in full force and effect its existence and comply in all material respects
with the laws and regulations governing the conduct of its business where the
failure to do so could reasonably be expected to have a Material Adverse Effect
on such Borrower; and (c) make all such reports and pay all such franchise and
other taxes and license fees and do all such other acts and things as may be
lawfully required to maintain its rights, licenses, leases, powers and
franchises under the laws of the United States or any political subdivision
thereof where the failure to do so could reasonably be expected to have a
Material Adverse Effect on such Borrower.
6.3 Violations.
Promptly notify Agent in writing of any violation of any law, statute,
regulation or ordinance of any Governmental Body, or of any agency thereof,
applicable to any Borrower which could reasonably be expected to have a Material
Adverse Effect on any Borrower.
6.4 Government Receivables.
Take all steps necessary as requested by Agent to protect Agent's
interest in the Collateral under the Federal Assignment of Claims Act or other
applicable state or local statutes or ordinances and deliver to Agent
appropriately endorsed, any instrument or chattel paper connected with any
Receivable arising out of contracts between any Borrower and the United States,
any state or any department, agency or instrumentality of any of them.
56
6.5 Net Worth.
Maintain at all times a Net Worth in an amount not less than
$68,000,000.
6.6 Fixed Charge Coverage Ratio.
Maintain at all times a Fixed Charge Coverage Ratio for the Borrowers,
as calculated at the end of each fiscal quarter for the four (4) fiscal quarters
then ended, of not less than 1.05 to 1.00. Notwithstanding the preceding
sentence, if the Fixed Charge Coverage Ratio is less than 1.05 to 1.00, the
Borrowers will not be in default of this Fixed Charge Coverage Ratio covenant if
the Borrowers meet the Minimum Availability Threshold and no other Default or
other Event of Default has occurred and is continuing.
6.7 Execution of Supplemental Instruments.
Execute and deliver to Agent from time to time, upon demand, such
supplemental agreements, statements, assignments and transfers, or instructions
or documents relating to the Collateral, and such other instruments as Agent may
request, in order that the full intent of this Agreement may be carried into
effect.
6.8 Payment of Indebtedness.
Pay, discharge or otherwise satisfy at or before maturity (subject,
where applicable, to specified grace periods and, in the case of the trade
payables, to normal payment practices) all its obligations and liabilities of
whatever nature, except when the failure to do so could not reasonably be
expected to have a Material Adverse Effect or when the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and each Borrower shall have provided for such reserves as Agent may reasonably
deem proper and necessary, subject at all times to any applicable subordination
arrangement in favor of Lenders.
6.9 Standards of Financial Statements.
Cause all financial statements referred to in Sections 9.7, 9.8, 9.9,
9.10, 9.12 and 9.13 as to which GAAP is applicable to be complete and correct in
all material respects (subject, in the case of interim financial statements, to
normal year-end audit adjustments) and to be prepared in reasonable detail and
in accordance with GAAP applied consistently throughout the periods reflected
therein (except as concurred in by such reporting accountants or officer, as the
case may be, and disclosed therein).
6.10 Updates to Schedules.
Should any of the information or disclosures provided on the disclosure
Schedules attached to this Agreement become outdated or incorrect in any
material respect, the Borrowers shall promptly provide the Agent in writing with
such revisions or updates to such Schedules as may be necessary or appropriate
to update or correct same; provided, however, that no Schedule shall be deemed
to have been amended, modified or superseded by any such correction or update,
nor shall any breach of warranty or representation resulting from the inaccuracy
or
57
incompleteness of any such Schedule be deemed to have been cured thereby,
unless and until the Agent shall have accepted in writing such revisions or
updates to such Schedule.
7. NEGATIVE COVENANTS
No Borrower shall, until satisfaction in full of the Obligations and
termination of this Agreement:
7.1 Merger, Consolidation, Acquisition and Sale of Assets.
(a) Enter into any merger, consolidation or other reorganization with or into
any other Person or acquire all or substantially all of the assets, division,
business, stock or other ownership interests of any Person or permit any other
Person to consolidate with or merge with it; provided however, (i) Natmaya
and/or Fosmart may be dissolved, (ii) Borrowers may exercise any warrants to
obtain stock of DM&E so long as the aggregate amount of funds required to
exercise such warrants does not exceed $500,000, (iii) Natmaya and/or Fosmart
may be merged with and into ▇▇▇▇▇▇ so long as ▇▇▇▇▇▇ is the surviving
corporation, and (iv) ▇▇▇▇▇▇ may purchase or acquire the assets or stock of any
Person (a "Permitted Acquisition") if all of the following requirements are met
in connection with such acquisition:
(A) if ▇▇▇▇▇▇ is acquiring the ownership interests in such Person, such
Person shall join this Agreement as a Borrower or become a Guarantor for the
Obligations as determined by the Agent;
(B) in the case of a stock or other ownership purchase, the Person
acquired by ▇▇▇▇▇▇ shall ▇▇▇▇▇ Liens in its assets to the Agent for the benefit
of the Lenders covering the same type of assets as the Collateral, and in the
case any of both a stock or other ownership purchase or an asset purchase,
▇▇▇▇▇▇ shall cause the Lien of the Agent to be a first priority, perfected
security interest;
(C) the board of directors or other equivalent governing body of such
Person shall have approved such Permitted Acquisition;
(D) the business acquired, or the business conducted by the Person
whose ownership interests are being acquired, as applicable, shall be
substantially the same as or related to (in a commercially reasonable manner)
one or more line or lines of business conducted by the Borrowers as described in
Section 5.22, and the business shall be located in the United States;
(E) no Default or Event of Default shall exist immediately prior to and
after giving effect to such Permitted Acquisition;
(F) prior to and after giving effect to such Permitted Acquisition
(including the payment of any prospective portion of the purchase price or
earn-outs), the Borrowers shall have a Fixed Charge Coverage Ratio, calculated
on a pro forma basis for the most recent 12 months and giving effect to such
Permitted Acquisition, of not less than 1.15 to 1.00;
58
(G) prior to and after giving effect to such Permitted Acquisition
(including the payment of any prospective portion of the purchase price or
earn-outs), the Borrowers shall meet the Minimum Availability Threshold; and
(H) the aggregate consideration paid by ▇▇▇▇▇▇ for all such Permitted
Acquisitions shall not exceed either (i) $15,000,000 in the aggregate in any
fiscal year of the Borrowers, or (ii) $30,000,000 in the aggregate during the
Term, such amounts in (i) and (ii) to be increased by Net Proceeds of
Significant Asset Sales.
(b) Sell, lease, transfer or otherwise dispose of any of its properties or
assets, except (i) the sale of Inventory in the ordinary course of its business,
(ii) the sale, disposition or transfer of any assets or Real Property located at
▇▇▇▇▇▇'▇ Doraville, Georgia facility, or its ▇▇▇▇▇▇▇▇▇ Road, Texas property
(iii) the sale of any securities issued by DM&E to ▇▇▇▇▇▇ and/or Natmaya, and
(iv) other sales or dispositions not in excess of $10,000,000 in the aggregate;
provided however, that in the event of the sale by Borrowers of any Receivables
or Inventory, the Borrowers shall receive cash or cash equivalent proceeds in an
amount equal to or greater than that portion of the Formula Amount based upon
such Receivables and Inventory prior to such sale.
7.2 Creation of Liens and Agreements Relating Thereto.
(a) Create or suffer to exist any Lien or transfer upon or against any of its
property or assets now owned or hereafter acquired, except Permitted
Encumbrances; or
(b) Enter into or suffer to exist any agreement with any Person which prohibits
or limits the ability of any Borrower to create, incur, assume or suffer to
exist any Lien upon or with respect to any property or assets of any kind, real
or personal, tangible or intangible, now owned or hereafter acquired (including,
without limitation Equipment, Investment Property and Real Property), other than
(i) such agreements in favor of Agent or Lenders pursuant to this Agreement and
the Other Documents, (ii) as set forth on Schedule 7.2(b) hereto, and (iii)
capital leases, purchase money financing and industrial revenue bond financing
consummated after the Closing Date (to the extent permitted under this
Agreement) pursuant to contracts which restrict Liens on the Equipment and other
capital assets (excluding any Inventory or Receivables) being financed pursuant
to such capital leases, purchase money financing or industrial revenue bond
financing.
7.3 Guarantees.
Become liable upon the obligations of any Person by assumption,
endorsement or guaranty thereof or otherwise (other than to Lenders) except (a)
as disclosed on Schedule 7.3, (b) guarantees made in the ordinary course of
business which, when aggregated with advances permitted under Section
7.5(c)(including loans set forth on Schedule 7.5), do not exceed $4,000,000 in
the aggregate at any one time, (c) the endorsement of checks in the ordinary
course of business, and (d) guarantees made by a Borrower with respect to the
obligations of another Borrower.
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7.4 Investments.
Except as set forth on Schedule 7.4 or as permitted under Section
7.1(a)(ii), purchase or acquire obligations or stock of, or any other interest
in, any Person, except (a) obligations issued or guaranteed by the United States
of America or any agency thereof, (b) commercial paper with maturities of not
more than 180 days and a published rating of not less than A-1 or P-1 (or the
equivalent rating), (c) certificates of time deposit and bankers' acceptances
having maturities of not more than 180 days and repurchase agreements backed by
United States government securities of a commercial bank if (i) such bank has a
combined capital and surplus of at least $500,000,000, or (ii) its debt
obligations, or those of a holding company of which it is a Subsidiary, are
rated not less than A (or the equivalent rating) by a nationally recognized
investment rating agency, (d) U.S. money market funds that invest solely in
obligations issued or guaranteed by the United States of America or an agency
thereof, and (e) investments not in excess of $1,000,000 at any one time in the
stock of Customers in settlement of Receivables and related obligations which
are delinquent or in default by such Customers.
7.5 Loans.
Except as set forth on Schedule 7.5, make advances, loans or extensions
of credit to any Person, including without limitation, any Parent, Subsidiary or
Affiliate except with respect to (a) advances, loans or extensions of commercial
trade credit in connection with the sale of Inventory in the ordinary course of
its business, (b) advances, loans or extensions of credit to its employees in
the ordinary course of business not to exceed the aggregate amount of $1,000,000
at any time outstanding, (c) advances, loans or extensions of credit which, when
aggregated with the loans set forth on Schedule 7.5 and the guarantees permitted
under Section 7.3(b), do not exceed $4,000,000 in the aggregate at any one time,
and (d) loans advanced by one Borrower to another Borrower.
7.6 Capital Expenditures.
Contract for, purchase or make any expenditure or commitments for fixed
or capital assets (including capitalized leases) in any fiscal year in an
aggregate amount for all Borrowers in excess of $8,000,000, exclusive of capital
expenditures for direct construction expenses and equipment costs incurred
pursuant to the Union Pacific Contract. The difference between $8,000,000 and
the actual amount of the aggregate capital expenditures of the Borrowers in any
fiscal year (excluding the expenses related to the Union Pacific Contract) may
be carried over to the immediately succeeding fiscal year. In addition to the
foregoing capital expenditures, the Borrowers may make capital expenditures for
the direct construction expenses and equipment costs of the Union Pacific
Contract, provided that such capital expenditures do not violate the provisions
of Section 7.8 or 7.11 and are made on or before December 31, 2006. Expenditures
made in consummating Permitted Acquisitions shall not be included in the
calculation of capital expenditures under this Section 7.6.
7.7 Dividends.
Declare, pay or make any dividend or distribution on any shares of the
common stock or preferred stock of any Borrower (other than dividends or
distributions payable in its stock, or
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split-ups or reclassifications of its stock) or apply any of its funds, property
or assets to the purchase, redemption or other retirement of any common or
preferred stock, or of any options to purchase or acquire any such shares of
common or preferred stock of any Borrower except that (a) Borrowers shall be
permitted to pay dividends and distributions to other Borrowers, and (b) ▇▇▇▇▇▇
shall be permitted to pay dividends and distributions and make redemptions with
respect to its stock so long as prior to and after giving effect to such
dividend, distribution or redemption (and treating such dividend, distribution
or redemption as having occurred at the beginning of the fiscal period in which
it is made): (i) the Minimum Availability Threshold is met, and (ii) no Event of
Default or Default shall have occurred.
7.8 Indebtedness.
Except as set forth on Schedule 7.8, create, incur, assume or suffer to
exist any Indebtedness (exclusive of trade debt) except in respect of (a)
Indebtedness to Lenders under this Agreement; (b) Indebtedness incurred for
capital expenditures permitted under Section 7.6 hereof; (c) Indebtedness for
the direct construction expenses and equipment costs incurred pursuant to the
Union Pacific Contract; and (d) other Indebtedness not to exceed $6,000,000 in
the aggregate at any one time outstanding. Notwithstanding the foregoing,
Indebtedness for the direct construction expenses and equipment costs incurred
pursuant to the Union Pacific Contract and permitted under this Section 7.8 plus
the operating lease obligations incurred under Section 7.11 pursuant to the
Union Pacific Contract shall not exceed $20,000,000 in the aggregate.
7.9 Nature of Business.
Substantially change the nature of the business in which it is
presently engaged (or businesses reasonably related thereto), nor except as
specifically permitted hereby (including Section 7.1) purchase or invest,
directly or indirectly, in any assets or property other than in the ordinary
course of business or assets or property which are to be used in its business as
presently conducted or businesses reasonably related thereto.
7.10 Transactions with Affiliates.
Directly or indirectly, purchase, acquire or lease any property from,
or sell, transfer or lease any property to, or otherwise deal with, any
Affiliate (other than a Borrower), except transactions in the ordinary course of
business, on an arm's-length basis on terms no less favorable than terms which
would have been obtainable from a Person other than an Affiliate.
7.11 Leases.
Enter as lessee into any lease arrangement for real or personal
property (unless capitalized and permitted under Section 7.6 hereof) if after
giving effect thereto, aggregate annual rental payments for all leased property
would exceed $8,000,000 in any one fiscal year in the aggregate for all
Borrowers, excluding any rental payments with respect to assets leased in
connection with the Union Pacific Contract and the Union Pacific Project.
Notwithstanding the foregoing, Indebtedness for the direct construction expenses
and equipment costs incurred pursuant to the Union Pacific Contract permitted
under Section 7.8 plus the operating lease
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obligations incurred under this Section 7.11 pursuant to the Union Pacific
Contract shall not exceed $20,000,000 in the aggregate.
7.12 Subsidiaries.
(a) Form any Subsidiary unless (i) such Subsidiary takes all actions necessary
to join in this Agreement as a borrower and becomes jointly and severally liable
for the obligations of Borrowers hereunder, under the Revolving Credit Note, and
under any other agreement between any Borrower and Lenders and (ii) Agent shall
have received all documents, including legal opinions, it may reasonably require
to establish compliance with each of the foregoing conditions.
(b) Enter into any partnership or similar arrangement.
7.13 Fiscal Year and Accounting Changes.
Change its fiscal year from calendar year or make any significant
change (a) in accounting treatment and reporting practices except as required or
permitted by GAAP or (b) in tax reporting treatment except as required by law.
7.14 Pledge of Credit.
Now or hereafter pledge Agent's or any Lender's credit on any purchases
or for any purpose whatsoever or use any portion of any Advance in or for any
business other than such business as is permitted under Section 5.22 of this
Agreement.
7.15 Amendment of Articles of Incorporation, By-Laws.
Amend, modify or waive any term or material provision of its Articles
of Incorporation or By-Laws unless required by law.
7.16 Compliance with ERISA.
(a) (x) Maintain, or permit any member of the Controlled Group to
maintain, or (y) become obligated to contribute, or permit any member of the
Controlled Group to become obligated to contribute, to any Plan, other than
those Plans disclosed on Schedule 5.8(d), (b) engage, or permit any member of
the Controlled Group to engage, in any non-exempt "prohibited transaction", as
that term is defined in Section 406 of ERISA and Section 4975 of the Code, (c)
incur, or permit any member of the Controlled Group to incur, any "accumulated
funding deficiency", as that term is defined in Section 302 of ERISA or Section
412 of the Code, (d) terminate, or permit any member of the Controlled Group to
terminate, any Plan where such event could result in any liability of any
Borrower or any member of the Controlled Group or the imposition of a lien on
the property of any Borrower or any member of the Controlled Group pursuant to
Section 4068 of ERISA, (e) assume, or permit any member of the Controlled Group
to assume, any obligation to contribute to any Multiemployer Plan not disclosed
on Schedule 5.8(d), (f) incur, or permit any member of the Controlled Group to
incur, any withdrawal liability to any Multiemployer Plan; (g) fail promptly to
notify Agent of the occurrence of any Termination Event, (h) fail to comply, or
permit a member of the Controlled
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Group to fail to comply, with the requirements of ERISA or the Code or other
applicable laws in respect of any Plan, (i) fail to meet, or permit any member
of the Controlled Group to fail to meet, all minimum funding requirements under
ERISA or the Code or postpone or delay or allow any member of the Controlled
Group to postpone or delay any funding requirement with respect of any Plan.
7.17 Prepayment of Indebtedness.
At any time, directly or indirectly, prepay any Indebtedness for
borrowed money (other than to Lenders), or repurchase, redeem, retire or
otherwise acquire any Indebtedness of any Borrower.
7.18 Anti-Terrorism Laws.
Permit any Affiliate or agent to:
(a) Conduct any business or engage in any transaction or dealing with any
Blocked Person, including the making or receiving any contribution of funds,
goods or services to or for the benefit of any Blocked Person.
(b) Deal in, or otherwise engage in any transaction relating to, any property or
interests in property blocked pursuant to the Executive Order No. 13224.
(c) Engage in or conspire to engage in any transaction that evades or avoids, or
has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in the Executive Order No. 13224, the USA Patriot Act or
any other Anti-Terrorism Law. Borrower shall deliver to Lenders any
certification or other evidence requested from time to time by any Lender in its
reasonable discretion, confirming Borrower's compliance with this Section.
7.19 Trading with the Enemy Act.
Engage in any business or activity in violation of the Trading with the
Enemy Act.
8. CONDITIONS PRECEDENT
8.1 Conditions to Initial Advances.
The agreement of Lenders to make the initial Advances requested to be
made on the Closing Date is subject to the satisfaction, or waiver by Lenders,
immediately prior to or concurrently with the making of such Advances, of the
following conditions precedent:
(a) Note. Agent shall have received the Revolving Credit Note duly executed and
delivered by an authorized officer of each Borrower;
(b) Filings, Registrations and Recordings. Each document (including, without
limitation, any Uniform Commercial Code financing statement) required by this
Agreement, any related agreement or under law or reasonably requested by the
Agent to be filed, registered or recorded in order to create, in favor of Agent,
a perfected security interest in or lien upon the
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Collateral shall have been properly filed, registered or recorded in each
jurisdiction in which the filing, registration or recordation thereof is so
required or requested, and Agent shall have received an acknowledgment copy, or
other evidence satisfactory to it, of each such filing, registration or
recordation and satisfactory evidence of the payment of any necessary fee, tax
or expense relating thereto;
(c) Corporate Proceedings of Borrowers. Agent shall have received a copy of the
resolutions in form and substance reasonably satisfactory to Agent, of the Board
of Directors of each Borrower authorizing (i) the execution, delivery and
performance of this Agreement, the Revolving Credit Note and any related
agreements (collectively the "Documents") and (ii) the granting by each Borrower
of the security interests in and liens upon the Collateral in each case
certified by the Secretary or an Assistant Secretary of each Borrower as of the
Closing Date; and such certificate shall state that the resolutions thereby
certified have not been amended, modified, revoked or rescinded as of the date
of such certificate;
(d) Incumbency Certificates of Borrowers. Agent shall have received a
certificate of the Secretary or an Assistant Secretary of each Borrower, dated
the Closing Date, as to the incumbency and signature of the officers of each
Borrower executing this Agreement, any certificate or other documents to be
delivered by it pursuant hereto, together with evidence of the incumbency of
such Secretary or Assistant Secretary;
(e) Certificates. Agent shall have received a copy of the Articles or
Certificate of Incorporation of each Borrower, and all amendments thereto,
certified by the Secretary of State or other appropriate official of its
jurisdiction of incorporation together with copies of the By-Laws of each
Borrower and all agreements of each Borrower's shareholders certified as
accurate and complete by the Secretary of each Borrower;
(f) Legal Opinion. Agent shall have received the executed legal opinion of ▇▇▇▇▇
▇. ▇▇▇▇▇ in form and substance satisfactory to Agent which shall cover such
matters incident to the transactions contemplated by this Agreement, the
Revolving Credit Note, and related agreements as Agent may reasonably require
and each Borrower hereby authorizes and directs such counsel to deliver such
opinions to Agent and Lenders;
(g) No Litigation. (i) No litigation, investigation or proceeding before or by
any arbitrator or Governmental Body shall be continuing or threatened against
any Borrower or against the officers or directors of any Borrower (A) in
connection with the Other Documents or any of the transactions contemplated
thereby and which, in the reasonable opinion of Agent, is deemed material or (B)
which could, in the reasonable opinion of Agent, have a Material Adverse Effect;
and (ii) no injunction, writ, restraining order or other order of any nature
materially adverse to any Borrower or the conduct of its business or
inconsistent with the due consummation of the Transactions shall have been
issued by any Governmental Body;
(h) Fees. Agent shall have received all fees payable to Agent and Lenders on or
prior to the Closing Date pursuant to Article 3 hereof. Agent shall have
received the Fee Letter and all fees payable to it thereunder;
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(i) Insurance. Agent shall have received in form and substance satisfactory to
Agent, certificates of insurance with respect to the Borrowers' property
insurance policies, together with loss payable endorsements naming Agent as loss
payee, and certificates of insurance with respect to Borrowers' liability
insurance policies, together with endorsements naming Agent as an additional
insured;
(j) Payment Instructions. Agent shall have received written instructions from
Borrowers directing the application of proceeds of the initial Advances made
pursuant to this Agreement;
(k) Consents. Agent shall have received any and all Consents necessary to permit
the effectuation of the transactions contemplated by this Agreement and the
Other Documents; and, Agent shall have received such Consents and waivers of
such third parties as might assert claims with respect to the Collateral, as
Agent and its counsel shall deem necessary;
(l) No Adverse Material Change. (i) since December 31, 2004, there shall not
have occurred any event, condition or state of facts which could reasonably be
expected to have a Material Adverse Effect and (ii) no representations made or
information supplied to Agent shall have been proven to be inaccurate or
misleading in any material respect;
(m) Leasehold Agreements. Agent shall have received landlord, mortgagee or
warehouseman agreements satisfactory to Agent with respect to all premises
leased by Borrowers at which Inventory is located;
(n) Contract Review. Agent shall have reviewed all material contracts of
Borrowers including, without limitation, leases, union contracts, labor
contracts, vendor supply contracts, license agreements and distributorship
agreements and such contracts and agreements shall be satisfactory in all
respects to Agent;
(o) Closing Certificate. Agent shall have received a closing certificate signed
by the Chief Financial Officer of each Borrower dated as of the date hereof,
stating that (i) all representations and warranties set forth in this Agreement
and the Other Documents are true and correct on and as of such date, (ii)
Borrowers are on such date in compliance with all the terms and provisions set
forth in this Agreement and the Other Documents and (iii) on such date no
Default or Event of Default has occurred or is continuing;
(p) Borrowing Base. Agent shall have received evidence from Borrowers that the
aggregate amount of Eligible Receivables and Eligible Inventory is sufficient in
value and amount to support Advances in the amount requested by Borrowers on the
Closing Date;
(q) Other. All corporate and other proceedings, and all documents, instruments
and other legal matters in connection with the Transactions shall be
satisfactory in form and substance to Agent and its counsel.
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8.2 Conditions to Each Advance.
The agreement of Lenders to make any Advance requested to be made on
any date (including, without limitation, the initial Advance), is subject to the
satisfaction of the following conditions precedent as of the date such Advance
is made:
(a) Representations and Warranties. Each of the representations and warranties
made by any Borrower in or pursuant to this Agreement and any related agreements
to which it is a party, and each of the representations and warranties contained
in any certificate, document or financial or other statement furnished at any
time under or in connection with this Agreement or any related agreement shall
be true and correct in all material respects on and as of such date as if made
on and as of such date (except representations and warranties which expressly
relate solely to an earlier date or time, which representations and warranties
shall be true and correct on and as of the specific dates or times referred to
therein);
(b) No Default. No Event of Default or Default shall have occurred and be
continuing on such date, or would exist after giving effect to the Advances
requested to be made, on such date; provided, however that Agent, in its sole
discretion, may continue to make Advances notwithstanding the existence of an
Event of Default or Default and that any Advances so made shall not be deemed a
waiver of any such Event of Default or Default; and
(c) Maximum Advances. In the case of any Advances requested to be made, after
giving effect thereto, the aggregate Advances shall not exceed the maximum
amount of Advances permitted under Section 2.1 hereof.
Each request for an Advance by any Borrower hereunder shall constitute a
representation and warranty by each Borrower as of the date of such Advance that
the conditions contained in this subsection shall have been satisfied.
9. INFORMATION AS TO BORROWERS.
Each Borrower shall, until satisfaction in full of the Obligations and
the termination of this Agreement:
9.1 Disclosure of Material Matters.
Immediately upon learning thereof, report to Agent all matters
materially affecting the value, enforceability or collectibility of any portion
of the Collateral including, without limitation, any Borrower's reclamation or
repossession of, or the return to any Borrower of, a material amount of goods or
claims or disputes asserted by any Customer or other obligor.
9.2 Schedules.
Deliver to Agent on or before the fifteenth (15th) day of each month as
and for the prior month (a) accounts receivable ageings, including a
reconciliation to the general ledger, (b) accounts payable schedules, including
a reconciliation to the general ledger, (c) Inventory reports and (d) a
Borrowing Base Certificate (which shall be calculated as of the last day of the
prior month and which shall not be binding upon Agent or restrictive of Agent's
rights under this
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Agreement). Agent shall have the right to confirm and verify
all Receivables by any manner and through any medium it considers advisable and
do whatever it may deem reasonably necessary to protect its interests hereunder.
The items to be provided under this Section are to be in form satisfactory to
Agent and executed by each Borrower and delivered to Agent from time to time
solely for Agent's convenience in maintaining records of the Collateral, and any
Borrower's failure to deliver any of such items to Agent shall not affect,
terminate, modify or otherwise limit Agent's Lien with respect to the
Collateral. In the event that the Borrowers fail to maintain the Minimum
Availability Threshold or upon the occurrence of a Default or Event of Default,
the Borrowers shall deliver to the Agent a Borrowing Base Certificate on the
first Business Day of each week (as of the last Business Day of the previous
week).
9.3 Environmental Reports.
Furnish Agent, concurrently with the delivery of the financial
statements referred to in Sections 9.7 and 9.8, with a certificate signed by the
President, Vice President or other authorized officer of each Borrower stating,
to the best of his knowledge, that each Borrower is in compliance in all
material respects with all federal, state and local laws relating to
environmental protection and control and occupational safety and health, the
failure of which to comply would result in a Material Adverse Effect. To the
extent any Borrower does not provide such certification, the certificate shall
set forth with specificity the areas of non-compliance and the proposed action
such Borrower will implement in order to achieve full compliance.
9.4 Litigation.
Promptly notify Agent in writing of any litigation, suit or
administrative proceeding affecting any Borrower, whether or not the claim is
covered by insurance, and of any suit or administrative proceeding, which in any
such case could reasonably be expected to have a Material Adverse Effect on any
Borrower.
9.5 Material Occurrences.
Promptly notify Agent in writing upon the occurrence of (a) any Event
of Default or Default; (b) any event, development or circumstance whereby any
financial statements or other reports furnished to Agent fail in any material
respect to present fairly, in accordance with GAAP consistently applied, the
financial condition or operating results of any Borrower as of the date of such
statements; (c) any accumulated retirement plan funding deficiency which, if
such deficiency continued for two plan years and was not corrected as provided
in Section 4971 of the Code, could subject any Borrower to a tax imposed by
Section 4971 of the Code; (d) each and every default by any Borrower which might
result in the acceleration of the maturity of any Indebtedness, including the
names and addresses of the holders of such Indebtedness with respect to which
there is a default existing or with respect to which the maturity has been or
could be accelerated, and the amount of such Indebtedness; and (e) any other
development in the business or affairs of any Borrower which could reasonably be
expected to have a Material Adverse Effect; in each case describing the nature
thereof and the action Borrowers propose to take with respect thereto.
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9.6 Government Receivables.
Notify Agent immediately if any of its Receivables arise out of
contracts between any Borrower and the United States, any state, or any
department, agency or instrumentality of any of them.
9.7 Annual Financial Statements.
Furnish Agent within ninety (90) days after the end of each fiscal year
of Borrowers, financial statements of Borrowers on a consolidated basis
including, but not limited to, statements of income and stockholders' equity and
cash flow from the beginning of the current fiscal year to the end of such
fiscal year and the balance sheet as at the end of such fiscal year, all
prepared in accordance with GAAP applied on a basis consistent with prior
practices, and in reasonable detail and reported upon without qualification by
an independent certified public accounting firm selected by Borrowers and
satisfactory to Agent (the "Accountants"). Upon request of the Agent, the
financial statements of the Borrowers shall also be prepared on a consolidating
basis. In addition, the reports shall be accompanied by a certificate of each
Borrower's Chief Financial Officer which shall state that, based on an
examination sufficient to permit him to make an informed statement, no Default
or Event of Default exists, or, if such is not the case, specifying such Default
or Event of Default, its nature, when it occurred, whether it is continuing and
the steps being taken by such Borrower with respect to such event, and such
certificate shall have appended thereto calculations which set forth Borrowers'
compliance with the requirements or restrictions imposed by Sections 6.5, 6.6,
7.6 and 7.11 hereof.
9.8 Quarterly Financial Statements.
Furnish Agent within forty-five (45) days after the end of each fiscal
quarter, an unaudited balance sheet of Borrowers on a consolidated basis and
unaudited statements of income and cash flow of Borrowers on a consolidated and
consolidating basis reflecting results of operations from the beginning of the
fiscal year to the end of such quarter and for such quarter, prepared on a basis
consistent with prior practices and complete and correct in all material
respects, subject to normal and recurring year end adjustments that individually
and in the aggregate are not material to the business of Borrowers. Upon request
of the Agent, the financial statements of the Borrowers shall also be prepared
on a consolidating basis. The reports shall be accompanied by a certificate
signed by the Chief Financial Officer of ▇▇▇▇▇▇, which shall state that, based
on an examination sufficient to permit him to make an informed statement, no
Default or Event of Default exists, or, if such is not the case, specifying such
Default or Event of Default, its nature, when it occurred, whether it is
continuing and the steps being taken by Borrowers with respect to such default,
and such certificate shall have appended thereto calculations which set forth
Borrowers' compliance with the requirements or restrictions imposed by Sections
6.5, 6.6, 7.6 and 7.11 hereof.
9.9 Monthly Financial Statements.
Furnish Agent within thirty (30) days after the end of each month, an
unaudited balance sheet of Borrowers on a consolidated basis and unaudited
statements of income and cash flow of Borrowers on a consolidated and
consolidating basis reflecting results of operations from the
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beginning of the fiscal year to the end of such month and for such month,
prepared on a basis consistent with prior practices and complete and correct in
all material respects, subject to normal and recurring year end adjustments that
individually and in the aggregate are not material to the business of Borrowers.
Upon request of the Agent, the financial statements of the Borrowers shall also
be prepared on a consolidating basis. The reports shall be accompanied by a
certificate signed by the Chief Financial Officer of ▇▇▇▇▇▇, which shall state
that, based on an examination sufficient to permit him to make an informed
statement, no Default or Event of Default exists, or, if such is not the case,
specifying such Default or Event of Default, its nature, when it occurred,
whether it is continuing and the steps being taken by Borrowers with respect to
such default, and such certificate shall have appended thereto calculations
which set forth Borrowers' compliance with the requirements or restrictions
imposed by Sections 6.5, 6.6, 7.6 and 7.11 hereof. Notwithstanding the preceding
sentence, if the Fixed Charge Coverage Ratio is greater than 2.00 to 1.00 and no
Default or Event of Default has occurred and is continuing, the Borrowers shall
not be required to deliver the monthly financial statements and related
certificate required under this Section 9.9.
9.10 Other Reports.
Furnish Agent as soon as available, but in any event within ten (10)
days after the issuance thereof, with copies of such financial statements,
reports and returns as each Borrower shall send to its stockholders.
9.11 Additional Information.
Furnish Agent with such additional information as Agent shall
reasonably request in order to enable Agent to determine whether the terms,
covenants, provisions and conditions of this Agreement and the Revolving Credit
Note have been complied with by Borrowers including, without limitation, (a)
copies of all environmental audits and reviews, (b) at least thirty (30) days
prior thereto, notice of any Borrower's opening of any new office or place of
business or any Borrower's closing of any existing office or place of business,
and (c) promptly upon any Borrower's learning thereof, notice of any labor
dispute to which any Borrower may become a party, any strikes or walkouts
relating to any of its plants or other facilities, and the expiration of any
labor contract to which any Borrower is a party or by which any Borrower is
bound.
9.12 Projected Operating Budget.
Furnish Agent, no later than the beginning of each Borrower's fiscal
years commencing with fiscal year 2006, a month by month projected operating
budget of Borrowers on a consolidated basis for such fiscal year (including an
income statement for each month, a statement of cash flows for each quarter and
a balance sheet as at the end of the last month in each fiscal quarter), such
projections to be accompanied by a certificate signed by the President or Chief
Financial Officer of each Borrower to the effect that such projections have been
prepared on the basis of sound financial planning practice consistent with past
budgets and financial statements and that such officer has no reason to question
the reasonableness of any material assumptions on which such projections were
prepared.
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9.13 Variances from Operating Budget.
Upon request of Agent, furnish Agent, concurrently with the delivery of
the financial statements referred to in Section 9.7 and each quarterly report, a
written report summarizing all material variances from budgets submitted by
Borrowers pursuant to Section 9.12 and a discussion and analysis by management
with respect to such variances
9.14 Notice of Suits, Adverse Events.
Furnish Agent with prompt notice of (a) any lapse or other termination
of any Consent issued to any Borrower by any Governmental Body or any other
Person that is material to the operation of any Borrower's business, (b) any
refusal by any Governmental Body or any other Person to renew or extend any such
Consent; and (c) copies of any periodic or special reports filed by any Borrower
with any Governmental Body or Person, if such reports indicate any material
change in the business, operations, affairs or condition of any Borrower, or if
copies thereof are requested by Lender, and (d) copies of any material notices
and other communications from any Governmental Body or Person which specifically
relate to any Borrower.
9.15 ERISA Notices and Requests.
Furnish Agent with immediate written notice in the event that (a) any
Borrower or any member of the Controlled Group knows or has reason to know that
a Termination Event has occurred, together with a written statement describing
such Termination Event and the action, if any, which such Borrower or any member
of the Controlled Group has taken, is taking, or proposes to take with respect
thereto and, when known, any action taken or threatened by the Internal Revenue
Service, Department of Labor or PBGC with respect thereto, (b) any Borrower or
any member of the Controlled Group knows or has reason to know that a prohibited
transaction (as defined in Sections 406 of ERISA and 4975 of the Code) has
occurred together with a written statement describing such transaction and the
action which such Borrower or any member of the Controlled Group has taken, is
taking or proposes to take with respect thereto, (c) a funding waiver request
has been filed with respect to any Plan together with all communications
received by any Borrower or any member of the Controlled Group with respect to
such request, (d) any increase in the benefits of any existing Plan or the
establishment of any new Plan or the commencement of contributions to any Plan
to which any Borrower or any member of the Controlled Group was not previously
contributing shall occur, (e) any Borrower or any member of the Controlled Group
shall receive from the PBGC a notice of intention to terminate a Plan or to have
a trustee appointed to administer a Plan, together with copies of each such
notice, (f) any Borrower or any member of the Controlled Group shall receive any
favorable or unfavorable determination letter from the Internal Revenue Service
regarding the qualification of a Plan under Section 401(a) of the Code, together
with copies of each such letter; (g) any Borrower or any member of the
Controlled Group shall receive a notice regarding the imposition of withdrawal
liability, together with copies of each such notice; (h) any Borrower or any
member of the Controlled Group shall fail to make a required installment or any
other required payment under Section 412 of the Code on or before the due date
for such installment or payment; (i) any Borrower or any member of the
Controlled Group knows that (i) a Multiemployer Plan has been terminated, (ii)
the administrator or plan sponsor of a
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Multiemployer Plan intends to terminate a Multiemployer Plan, or (iii) the PBGC
has instituted or will institute proceedings under Section 4042 of ERISA to
terminate a Multiemployer Plan.
9.16 Additional Documents.
Execute and deliver to Agent, upon request, such documents and
agreements as Agent may, from time to time, reasonably request to carry out the
purposes, terms or conditions of this Agreement.
10. EVENTS OF DEFAULT
The occurrence of any one or more of the following events shall
constitute an "Event of Default":
10.1 failure by any Borrower to pay any principal or interest on the Obligations
when due, whether at maturity or by reason of acceleration pursuant to the terms
of this Agreement or by notice of intention to prepay, or by required prepayment
or failure to pay any other liabilities or make any other payment, fee or charge
provided for herein when due or in any Other Document;
10.2 any representation or warranty made or deemed made by any Borrower in this
Agreement or any related agreement or in any certificate, document or financial
or other statement furnished at any time in connection herewith or therewith
shall prove to have been misleading in any material respect in the Agent's
reasonable discretion on the date when made or deemed to have been made;
10.3 failure by any Borrower to (a) furnish financial information when due or
when requested which is unremedied for a period of fifteen (15) days, or (b)
permit the inspection of its books or records;
10.4 issuance of a notice of Lien, levy, assessment, injunction or attachment
against a material portion of any Borrower's property which is not stayed or
lifted within thirty (30) days and which does not otherwise constitute an Event
of Default hereunder;
10.5 except as otherwise provided for in Sections 10.1 and 10.3, failure or
neglect of any Borrower to perform, keep or observe any term, provision,
condition, covenant herein contained, or contained in any other agreement or
arrangement, now or hereafter entered into between any Borrower and Agent or any
Lender except for a failure or neglect of any Borrower to perform, keep or
observe any term, provision, condition or covenant, contained in Sections 4.6,
4.7, 4.9, 6.4 or 9.6 hereof which is cured within ten (10) days from the
occurrence of such failure or neglect;
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10.6 any judgment or judgments are rendered or judgment liens filed against any
Borrower for an aggregate amount in excess of $500,000 which within thirty (30)
days of such rendering or filing is not either satisfied, stayed or discharged
of record;
10.7 any Borrower shall (a) apply for, consent to or suffer the appointment of,
or the taking of possession by, a receiver, custodian, trustee, liquidator or
similar fiduciary of itself or of all or a substantial part of its property, (b)
make a general assignment for the benefit of creditors, (c) commence a voluntary
case under any state or federal bankruptcy laws (as now or hereafter in effect),
(d) be adjudicated a bankrupt or insolvent, (e) file a petition seeking to take
advantage of any other law providing for the relief of debtors, (f) acquiesce
to, or fail to have dismissed, within thirty (30) days, any petition filed
against it in any involuntary case under such bankruptcy laws, or (g) take any
action for the purpose of effecting any of the foregoing;
10.8 any Borrower shall admit in writing its inability, or be generally unable,
to pay its debts as they become due or cease operations of its present business;
10.9 any Affiliate or any Subsidiary of any Borrower shall (a) apply for,
consent to or suffer the appointment of, or the taking of possession by, a
receiver, custodian, trustee, liquidator or similar fiduciary of itself or of
all or a substantial part of its property, (b) admit in writing its inability,
or be generally unable, to pay its debts as they become due or cease operations
of its present business, (c) make a general assignment for the benefit of
creditors, (d) commence a voluntary case under any state or federal bankruptcy
laws (as now or hereafter in effect), (e) be adjudicated a bankrupt or
insolvent, (f) file a petition seeking to take advantage of any other law
providing for the relief of debtors, (g) acquiesce to, or fail to have
dismissed, within thirty (30) days, any petition filed against it in any
involuntary case under such bankruptcy laws, or (h) take any action for the
purpose of effecting any of the foregoing;
10.10 any change in any Borrower's condition or affairs (financial or otherwise)
which in Agent's opinion has a Material Adverse Effect;
10.11 any Lien created hereunder or provided for hereby or under any related
agreement for any reason ceases to be or is not a valid and perfected Lien
having a first priority interest;
10.12 a default of the obligations of any Borrower under any other agreement to
which it is a party shall occur which adversely affects its condition, affairs
or prospects (financial or otherwise) which default is not cured within any
applicable grace period;
10.13 any Change of Ownership or Change of Control shall occur;
10.14 any material provision of this Agreement shall, for any reason, cease to
be valid and binding on any Borrower, or any Borrower shall so claim in writing
to Agent;
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10.15 (a) any Governmental Body shall revoke, terminate, suspend or adversely
modify any license, permit, patent trademark or tradename of any Borrower, the
continuation of which is material to the continuation of Borrowers' consolidated
business, or (ii) commence proceedings to suspend, revoke, terminate or
adversely modify any such license, permit, trademark, tradename or patent and
such proceedings shall not be dismissed or discharged within sixty (60) days, or
(iii) schedule or conduct a hearing on the renewal of any license, permit,
trademark, tradename or patent necessary for the continuation of any Borrower's
business and the staff of such Governmental Body issues a report recommending
the termination, revocation, suspension or material, adverse modification of
such license, permit, trademark, tradename or patent; or (b) any agreement which
is necessary or material to the operation of Borrowers' consolidated business
shall be revoked or terminated and not replaced by a substitute acceptable to
Agent within thirty (30) days after the date of such revocation or termination,
and such revocation or termination and non-replacement would reasonably be
expected to have a Material Adverse Effect on any Borrower;
10.16 any portion of the Collateral shall be seized or taken by a Governmental
Body, or any Borrower or the title and rights of any Borrower or any Original
Owner which is the owner of any material portion of the Collateral shall have
become the subject matter of litigation which might, in the opinion of Agent,
upon final determination, result in impairment or loss of the security provided
by this Agreement or the Other Documents;
10.17 the operations of any Borrower's manufacturing facility (excluding any
scheduled plant shut-downs) are interrupted at any time for more than fifteen
(15) consecutive days, which interruption would reasonably be expected to have a
Material Adverse Effect; or
10.18 an event or condition specified in Sections 7.16 or 9.15 hereof shall
occur or exist with respect to any Plan and, as a result of such event or
condition, together with all other such events or conditions, any Borrower or
any member of the Controlled Group shall incur, or in the opinion of Agent be
reasonably likely to incur, a liability to a Plan or the PBGC (or both) which,
in the reasonable judgment of Agent, would have a Material Adverse Effect on any
Borrower.
11. LENDERS' RIGHTS AND REMEDIES AFTER DEFAULT
11.1 Rights and Remedies.
Upon the occurrence of (a) an Event of Default pursuant to Section 10.7
all Obligations shall be immediately due and payable and this Agreement and the
obligation of Lenders to make Advances shall be deemed terminated; and (b) any
of the other Events of Default and at any time thereafter (such default not
having previously been cured), at the option of Required Lenders all Obligations
shall be immediately due and payable and Lenders shall have the right to
terminate this Agreement and to terminate the obligation of Lenders to make
Advances and (c) a filing of a petition against Borrower in any involuntary case
under any state or federal bankruptcy laws, the obligation of Lenders to make
Advances hereunder shall be terminated other than as may be required by an
appropriate order of the bankruptcy court having jurisdiction over any Borrower.
Upon the occurrence of any Event of Default, Agent shall have the right to
exercise any and all
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other rights and remedies provided for herein, under the Uniform Commercial Code
and at law or equity generally, including, without limitation, the right to
foreclose the security interests granted herein and to realize upon any
Collateral by any available judicial procedure and/or to take possession of and
sell any or all of the Collateral with or without judicial process. Agent may
enter any of any Borrower's premises or other premises without legal process and
without incurring liability to any Borrower therefor, and Agent may thereupon,
or at any time thereafter, in its discretion without notice or demand, take the
Collateral and remove the same to such place as Agent may deem advisable and
Agent may require Borrowers to make the Collateral available to Agent at a
convenient place. With or without having the Collateral at the time or place of
sale, Agent may sell the Collateral, or any part thereof, at public or private
sale, at any time or place, in one or more sales, at such price or prices, and
upon such terms, either for cash, credit or future delivery, as Agent may elect.
Except as to that part of the Collateral which is perishable or threatens to
decline speedily in value or is of a type customarily sold on a recognized
market, Agent shall give Borrowers reasonable notification of such sale or
sales, it being agreed that in all events written notice mailed to Borrowers at
least five (5) days prior to such sale or sales is reasonable notification. At
any public sale Agent or any Lender may bid for and become the purchaser, and
Agent, any Lender or any other purchaser at any such sale thereafter shall hold
the Collateral sold absolutely free from any claim or right of whatsoever kind,
including any equity of redemption and such right and equity are hereby
expressly waived and released by each Borrower. In connection with the exercise
of the foregoing remedies, Agent is granted permission to use all of each
Borrower's trademarks, trade styles, trade names, patents, patent applications,
licenses, franchises and other proprietary rights which are used in connection
with (i) Inventory for the purpose of disposing of such Inventory and (ii)
Equipment for the purpose of completing the manufacture of unfinished goods. The
proceeds realized from the sale of any Collateral shall be applied as follows:
first, to the reasonable costs, expenses and attorneys' fees and expenses
incurred by Agent for collection and for acquisition, completion, protection,
removal, storage, sale and delivery of the Collateral; second, to interest due
upon any of the Obligations and any fees payable under this Agreement; and,
third, to the principal of the Obligations. If any deficiency shall arise,
Borrowers shall remain liable to Agent and Lenders therefor.
11.2 Agent's Discretion.
Agent shall have the right in its sole discretion to determine which
rights, Liens, security interests or remedies Agent may at any time pursue,
relinquish, subordinate, or modify or to take any other action with respect
thereto and such determination will not in any way modify or affect any of
Agent's or Lenders' rights hereunder.
11.3 Setoff.
In addition to any other rights which Agent or any Lender may have
under applicable law, upon the occurrence of an Event of Default hereunder,
Agent and such Lender shall have a right to apply any Borrower's property held
by Agent and such Lender to reduce the Obligations.
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11.4 Rights and Remedies not Exclusive.
The enumeration of the foregoing rights and remedies is not intended to
be exhaustive and the exercise of any right or remedy shall not preclude the
exercise of any other right or remedies provided for herein or otherwise
provided by law, all of which shall be cumulative and not alternative.
11.5 Allocation of Payments After Event of Default.
Notwithstanding any other provisions of this Agreement to the contrary,
after the occurrence and during the continuance of an Event of Default, all
amounts collected or received by the Agent on account of the Obligations or any
other amounts outstanding under any of the Other Documents or in respect of the
Collateral may, at Agent's discretion, be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation, reasonable attorneys' fees) of the Agent
in connection with enforcing the rights of Lenders under this Agreement and the
Other Documents and any protective advances made by the Agent with respect to
the Collateral under or pursuant to the terms of this Document;
SECOND, to payment of any fees owed to the Agent;
THIRD, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation, reasonable attorneys' fees) of each of
Lenders in connection with enforcing its rights under this Agreement and the
Other Documents or otherwise with respect to the Obligations owing to such
Lender;
FOURTH, to the payment of all of the Obligations consisting of accrued
fees and interest;
FIFTH, to the payment of the outstanding principal amount of the
Obligations (including the payment or cash collateralization of the outstanding
Letters of Credit);
SIXTH, to all other Obligations and other obligations which shall have
become due and payable under the Other Documents or otherwise and not repaid
pursuant to clauses "FIRST" through "FIFTH" above;
SEVENTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
In carrying out the foregoing, (a) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (b) each of Lenders shall receive (so long as it is not a
Defaulting Lender) an amount equal to its pro rata share (based on the
proportion that the then outstanding Advances held by such Lender bears to the
aggregate then outstanding Advances) of amounts available to be applied pursuant
to clauses "THIRD", "FOURTH", "FIFTH" and "SIXTH" above; and (c) to the extent
that any amounts available for distribution pursuant to clause "FIFTH" above are
attributable to the issued but
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undrawn amount of outstanding Letters of Credit, such amounts shall be held by
the Agent in a cash collateral account and applied (i) first, to reimburse the
Issuer from time to time for any drawings under such Letters of Credit and (ii)
then, following the expiration of all Letters of Credit, to all other
obligations of the types described in clauses "FIFTH" and "SIXTH" above in the
manner provided in this Section 11.5.
12. WAIVERS AND JUDICIAL PROCEEDINGS
12.1 Waiver of Notice.
Each Borrower hereby waives notice of non-payment of any of the
Receivables, demand, presentment, protest and notice thereof with respect to any
and all instruments, notice of acceptance hereof, notice of loans or advances
made, credit extended, Collateral received or delivered, or any other action
taken in reliance hereon, and all other demands and notices of any description,
except such as are expressly provided for herein.
12.2 Delay.
No delay or omission on Agent's or any Lender's part in exercising any
right, remedy or option shall operate as a waiver of such or any other right,
remedy or option or of any default.
12.3 Jury Waiver.
EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL
BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING UNDER THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH, OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO
IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE AND EACH PARTY HEREBY CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENTS OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
13. EFFECTIVE DATE AND TERMINATION
13.1 Term.
This Agreement, which shall inure to the benefit of and shall be
binding upon the respective successors and permitted assigns of each Borrower,
Agent and each Lender, shall become effective on the date hereof and shall
continue in full force and effect until May 5, 2010 (the "Term") unless sooner
terminated as herein provided. Borrowers may terminate this
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Agreement at any time upon ninety (90) days' prior written notice upon payment
in full of the Obligations.
13.2 Termination.
The termination of the Agreement shall not affect any Borrower's,
Agent's or any Lender's rights or any of the Obligations having their inception
prior to the effective date of such termination, and the provisions hereof shall
continue to be fully operative until all transactions entered into, rights or
interests created or Obligations have been fully disposed of, concluded or
liquidated. The security interests, Liens and rights granted to Agent and
Lenders hereunder and the financing statements filed hereunder shall continue in
full force and effect, notwithstanding the termination of this Agreement or the
fact that Borrowers' Account may from time to time be temporarily in a zero or
credit position, until all of the Obligations of each Borrower have been paid or
performed in full after the termination of this Agreement or each Borrower has
furnished Agent and Lenders with an indemnification satisfactory to Agent and
Lenders with respect thereto. Accordingly, each Borrower waives any rights which
it may have under the Uniform Commercial Code to demand the filing of
termination statements with respect to the Collateral, and Agent shall not be
required to send such termination statements to each Borrower, or to file them
with any filing office, unless and until this Agreement shall have been
terminated in accordance with its terms and all Obligations paid in full in
immediately available funds. All representations, warranties, covenants, waivers
and agreements contained herein shall survive termination hereof until all
Obligations are paid or performed in full.
14. REGARDING AGENT
14.1 Appointment.
Each Lender hereby designates PNC to act as Agent for such Lender under
this Agreement and the Other Documents. Each Lender hereby irrevocably
authorizes Agent to take such action on its behalf under the provisions of this
Agreement and the Other Documents and to exercise such powers and to perform
such duties hereunder and thereunder as are specifically delegated to or
required of Agent by the terms hereof and thereof and such other powers as are
reasonably incidental thereto and Agent shall hold all Collateral, payments of
principal and interest, fees (except the fees set forth in the Fee Letter)
charges and collections (without giving effect to any collection days) received
pursuant to this Agreement, for the ratable benefit of Lenders. Agent may
perform any of its duties hereunder by or through its agents or employees. As to
any matters not expressly provided for by this Agreement (including without
limitation, collection of the Revolving Credit Note) 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 shall be binding; provided, however, that Agent shall not be
required to take any action which exposes Agent to liability or which is
contrary to this Agreement or the Other Documents or applicable law unless Agent
is furnished with an indemnification reasonably satisfactory to Agent with
respect thereto.
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14.2 Nature of Duties.
Agent shall have no duties or responsibilities except those expressly
set forth in this Agreement and the Other Documents. Neither Agent nor any of
its officers, directors, employees or agents shall be (a) liable for any action
taken or omitted by them as such hereunder or in connection herewith, unless
caused by their gross (not mere) negligence or willful misconduct, or (b)
responsible in any manner for any recitals, statements, representations or
warranties made by any Borrower or any officer thereof contained in this
Agreement, or in any of the Other Documents or in any certificate, report,
statement or other document referred to or provided for in, or received by Agent
under or in connection with, this Agreement or any of the Other Documents or for
the value, validity, effectiveness, genuineness, due execution, enforceability
or sufficiency of this Agreement, or any of the Other Documents or for any
failure of any Borrower to perform its obligations hereunder. Agent shall not be
under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any of the Other Documents, or to inspect the properties,
books or records of any Borrower. The duties of Agent as respects the Advances
to Borrowers shall be mechanical and administrative in nature; Agent shall not
have by reason of this Agreement a fiduciary relationship in respect of any
Lender; and nothing in this Agreement, expressed or implied, is intended to or
shall be so construed as to impose upon Agent any obligations in respect of this
Agreement except as expressly set forth herein.
14.3 Lack of Reliance on Agent and Resignation.
Independently and without reliance upon Agent or any other Lender, each
Lender has made and shall continue to make (a) its own independent investigation
of the financial condition and affairs of each Borrower in connection with the
making and the continuance of the Advances hereunder and the taking or not
taking of any action in connection herewith, and (b) its own appraisal of the
creditworthiness of each Borrower. Agent shall have no duty or responsibility,
either initially or on a continuing basis, to provide any Lender with any credit
or other information with respect thereto, whether coming into its possession
before making of the Advances or at any time or times thereafter except as shall
be provided by any Borrower pursuant to the terms hereof. Agent shall not be
responsible to any Lender for any recitals, statements, information,
representations or warranties herein or in any agreement, document, certificate
or a statement delivered in connection with or for the execution, effectiveness,
genuineness, validity, enforceability, collectibility or sufficiency of this
Agreement or any Other Document, or of the financial condition of any Borrower,
or be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this Agreement, the
Revolving Credit Note, the Other Documents or the financial condition of any
Borrower, or the existence of any Event of Default or any Default.
Agent may resign on sixty (60) days' written notice to each of Lenders
and Borrowing Agent and upon such resignation, the Required Lenders will
promptly designate a successor Agent reasonably satisfactory to Borrowers.
Any such successor Agent shall succeed to the rights, powers and duties
of Agent, and the term "Agent" shall mean such successor agent effective upon
its appointment, and the former Agent's rights, powers and duties as Agent shall
be terminated, without any other or further act
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or deed on the part of such former Agent. After any Agent's resignation as
Agent, the provisions of this Article 14 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement.
14.4 Certain Rights of Agent.
If Agent shall request instructions from Lenders with respect to any
act or action (including failure to act) in connection with this Agreement or
any Other Document, Agent shall be entitled to refrain from such act or taking
such action unless and until Agent shall have received instructions from the
Required Lenders; and Agent shall not incur liability to any Person by reason of
so refraining. Without limiting the foregoing, Lenders shall not have any right
of action whatsoever against Agent as a result of its acting or refraining from
acting hereunder in accordance with the instructions of the Required Lenders.
14.5 Reliance.
Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, statement, certificate,
telex, teletype or telecopier message, cablegram, order or other document or
telephone message believed by it to be genuine and correct and to have been
signed, sent or made by the proper person or entity, and, with respect to all
legal matters pertaining to this Agreement and the Other Documents and its
duties hereunder, upon advice of counsel selected by it. Agent may employ agents
and attorneys-in-fact and shall not be liable for the default or misconduct of
any such agents or attorneys-in-fact selected by Agent with reasonable care.
14.6 Notice of Default.
Agent shall not be deemed to have knowledge or notice of the occurrence
of any Default or Event of Default hereunder or under the Other Documents,
unless Agent has received notice from a Lender or a Borrower referring to this
Agreement or the Other Documents, describing such Default or Event of Default
and stating that such notice is a "notice of default". In the event that Agent
receives such a notice, Agent shall give notice thereof to Lenders. Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided, that, unless and until
Agent shall have received such directions, Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interests of
Lenders.
14.7 Indemnification.
To the extent Agent is not reimbursed and indemnified by Borrowers,
each Lender will reimburse and indemnify Agent in proportion to its respective
portion of the Advances (or, if no Advances are outstanding, according to its
Commitment Percentage), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by or asserted against Agent in performing its duties hereunder, or in any way
relating to or arising out of this Agreement or any Other Document; provided
that, Lenders shall not be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
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expenses or disbursements resulting from Agent's gross (not mere) negligence or
willful misconduct or resulting from the wrongful dishonor by Agent or any of
Agent's Affiliates of a proper demand for payment made under any Letter of
Credit as determined by a final judgment of a court of competent jurisdiction,
except if such dishonor resulted from any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto Governmental Body.
14.8 Agent in its Individual Capacity.
With respect to the obligation of Agent to lend under this Agreement,
the Advances made by it shall have the same rights and powers hereunder as any
other Lender and as if it were not performing the duties as Agent specified
herein; and the term "Lender" or any similar term shall, unless the context
clearly otherwise indicates, include Agent in its individual capacity as a
Lender. Agent may engage in business with any Borrower as if it were not
performing the duties specified herein, and may accept fees and other
consideration from any Borrower for services in connection with this Agreement
or otherwise without having to account for the same to Lenders.
14.9 Delivery of Documents.
To the extent Agent receives financial statements required under
Sections 9.7, 9.8, 9.9, 9.10, 9.12 and 9.13, as well as the Borrowing Base
Certificate, from any Borrower pursuant to the terms of this Agreement, Agent
will promptly furnish such documents and information to Lenders.
14.10 Borrowers' Undertaking to Agent.
Without prejudice to their respective obligations to Lenders under the
other provisions of this Agreement, each Borrower hereby undertakes with Agent
to pay to Agent from time to time on demand all amounts from time to time due
and payable by it for the account of Agent or Lenders or any of them pursuant to
this Agreement to the extent not already paid. Any payment made pursuant to any
such demand shall pro tanto satisfy the relevant Borrower's obligations to make
payments for the account of Lenders or the relevant one or more of them pursuant
to this Agreement.
14.11 No Reliance on Agent's Customer Identification Program.
Each Lender acknowledges and agrees that neither such Lender, nor any
of its Affiliates, participants or assignees, may rely on the Agent to carry out
such Lender's, Affiliate's, participant's or assignee's customer identification
program, or other obligations required or imposed under or pursuant to the USA
Patriot Act or the regulations thereunder, including the regulations contained
in 31 CFR 103.121 (as hereafter amended or replaced, the "CIP Regulations"), or
any other Anti-Terrorism Law, including any programs involving any of the
following items relating to or in connection with Borrowers, their Affiliates or
their agents, this Agreement, the Other Documents or the transactions hereunder
or contemplated hereby: (1) any identity verification procedures, (2) any
record-keeping, (3) comparisons with government lists, (4) customer notices or
(5) other procedures required under the CIP Regulations or such other laws.
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15. BORROWING AGENCY
15.1 Borrowing Agency Provisions.
(a) Each Borrower hereby irrevocably designates Borrowing Agent to be its
attorney and agent and in such capacity to borrow, sign and endorse notes, and
execute and deliver all instruments, documents, writings and further assurances
now or hereafter required hereunder, on behalf of such Borrower or Borrowers,
and hereby authorizes Agent to pay over or credit all loan proceeds hereunder in
accordance with the request of Borrowing Agent.
(b) The handling of this credit facility as a co-borrowing facility with a
borrowing agent in the manner set forth in this Agreement is solely as an
accommodation to Borrowers and at their request. Neither Agent nor any Lender
shall incur liability to Borrowers as a result thereof. To induce Agent and
Lenders to do so and in consideration thereof, each Borrower hereby indemnifies
Agent and each Lender and holds Agent and each Lender harmless from and against
any and all liabilities, expenses, losses, damages and claims of damage or
injury asserted against Agent or any Lender by any Person arising from or
incurred by reason of the handling of the financing arrangements of Borrowers as
provided herein, reliance by Agent or any Lender on any request or instruction
from Borrowing Agent or any other action taken by Agent or any Lender with
respect to this Section 15.1 except due to willful misconduct or gross (not
mere) negligence by the indemnified party.
(c) All Obligations shall be joint and several, and each Borrower shall make
payment upon the maturity of the Obligations by acceleration or otherwise, and
such obligation and liability on the part of each Borrower shall in no way be
affected by any extensions, renewals and forbearance granted to Agent or any
Lender to any Borrower, failure of Agent or any Lender to give any Borrower
notice of borrowing or any other notice, any failure of Agent or any Lender to
pursue or preserve its rights against any Borrower, the release by Agent or any
Lender of any Collateral now or thereafter acquired from any Borrower, and such
agreement by each Borrower to pay upon any notice issued pursuant thereto is
unconditional and unaffected by prior recourse by Agent or any Lender to the
other Borrowers or any Collateral for such Borrower's Obligations or the lack
thereof. Each Borrower waives all suretyship defenses.
15.2 Waiver of Subrogation.
Each Borrower expressly waives any and all rights of subrogation,
reimbursement, indemnity, exoneration, contribution of any other claim which
such Borrower may now or hereafter have against the other Borrowers or other
Person directly or contingently liable for the Obligations hereunder, or against
or with respect to the other Borrowers' property (including, without limitation,
any property which is Collateral for the Obligations), arising from the
existence or performance of this Agreement, until termination of this Agreement
and repayment in full of the Obligations.
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16. MISCELLANEOUS
16.1 Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Pennsylvania. Any judicial proceeding brought by
or against any Borrower with respect to any of the Obligations, this Agreement
or any related agreement may be brought in any court of competent jurisdiction
in the Commonwealth of Pennsylvania, United States of America, and, by execution
and delivery of this Agreement, each Borrower accepts for itself and in
connection with its properties, generally and unconditionally, the non-exclusive
jurisdiction of the aforesaid courts, and irrevocably agrees to be bound by any
judgment rendered thereby in connection with this Agreement. Each Borrower
hereby waives personal service of any and all process upon it and consents that
all such service of process may be made by registered mail (return receipt
requested) directed to Borrowing Agent at its address set forth in Section 16.6
and service so made shall be deemed completed five (5) days after the same shall
have been so deposited in the mails of the United States of America, or, at the
Agent's and/or any Lender's option, by service upon Borrowing Agent which each
Borrower irrevocably appoints as such Borrower's Agent for the purpose of
accepting service within the Commonwealth of Pennsylvania. Nothing herein shall
affect the right to serve process in any manner permitted by law or shall limit
the right of Agent or any Lender to bring proceedings against any Borrower in
the courts of any other jurisdiction. Each Borrower waives any objection to
jurisdiction and venue of any action instituted hereunder and shall not assert
any defense based on lack of jurisdiction or venue or based upon forum non
conveniens. Any judicial proceeding by any Borrower against Agent or any Lender
involving, directly or indirectly, any matter or claim in any way arising out
of, related to or connected with this Agreement or any related agreement, shall
be brought only in a federal or state court located in the County of Allegheny,
Commonwealth of Pennsylvania.
16.2 Entire Understanding.
(a) This Agreement and the documents executed concurrently herewith contain
the entire understanding between each Borrower, Agent and each Lender
and supersedes all prior agreements and understandings, if any,
relating to the subject matter hereof. Any promises, representations,
warranties or guarantees not herein contained and hereinafter made
shall have no force and effect unless in writing, signed by each
Borrower's, Agent's and each Lender's respective officers. Neither this
Agreement nor any portion or provisions hereof may be changed,
modified, amended, waived, supplemented, discharged, cancelled or
terminated orally or by any course of dealing, or in any manner other
than by an agreement in writing, signed by the party to be charged.
Each Borrower acknowledges that it has been advised by counsel in
connection with the execution of this Agreement and Other Documents and
is not relying upon oral representations or statements inconsistent
with the terms and provisions of this Agreement.
(b) The Required Lenders, Agent with the consent in writing of the Required
Lenders, and Borrowers may, subject to the provisions of this Section
16.2 (b), from time to time enter into written supplemental agreements
to this Agreement or the Other Documents executed by Borrowers, for the
purpose of adding or deleting any provisions or otherwise changing,
varying or waiving in any manner the rights of Lenders, Agent or
Borrowers thereunder or the
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conditions, provisions or terms thereof of
waiving any Event of Default thereunder, but only to the extent
specified in such written agreements; provided, however, that no such
supplemental agreement shall, without the consent of all Lenders:
(i) increase the Commitment Percentage or maximum dollar commitment of any
Lender or increase the Maximum Revolving Advance Amount.
(ii) extend the maturity of any Revolving Credit Note or the due date for
any amount payable hereunder, or decrease the rate of interest or
reduce any fee payable by Borrowers to Lenders pursuant to this
Agreement.
(iii) alter the definition of the term Required Lenders or alter, amend or
modify this Section 16.2(b).
(iv) release any Collateral during any calendar year (other than in
accordance with the provisions of this Agreement) having an aggregate
value in excess of $1,000,000, or release any Borrower (other than in
accordance with the provisions of this Agreement as in effect on the
Closing Date) as an obligor for the Obligations.
(v) change the rights and duties of Agent.
(vi) permit any Revolving Advance to be made if after giving effect thereto
the total of Revolving Advances outstanding hereunder would exceed the
Formula Amount for more than thirty (30) consecutive Business Days or
exceed one hundred and five percent (105%) of the Formula Amount.
(vii) increase the Advance Rates above the Advance Rates in effect on the
Closing Date.
Any such supplemental agreement shall apply equally to each Lender and shall be
binding upon Borrowers, Lenders and Agent and all future holders of the
Obligations. In the case of any waiver, Borrowers, Agent and Lenders shall be
restored to their former positions and rights, and any Event of Default waived
shall be deemed to be cured and not continuing, but no waiver of a specific
Event of Default shall extend to any subsequent Event of Default (whether or not
the subsequent Event of Default is the same as the Event of Default which was
waived), or impair any right consequent thereon.
In the event that Agent requests the consent of a Lender pursuant to
this Section 16.2 and such Lender shall not respond or reply to Agent in writing
within ten (10) days of delivery of such request, such Lender shall be deemed to
have consented to matter that was the subject of the request. In the event that
Agent requests the consent of a Lender pursuant to this Section 16.2 and such
consent is denied, then PNC may, at its option, require such Lender to assign
its interest in the Advances to PNC or to another Lender or to any other Person
designated by the Agent (the "Designated Lender"), for a price equal to the then
outstanding principal amount thereof plus accrued and unpaid interest and fees
due such Lender, which interest and fees shall be paid when collected from
Borrowers. In the event PNC elects to require any Lender to assign its interest
to PNC or to the Designated Lender, PNC will so notify such Lender in writing
within forty five (45) days following such Lender's denial, and such Lender will
assign its interest to PNC or the
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Designated Lender no later than five (5) days following receipt of such notice
pursuant to a Commitment Transfer Supplement executed by such Lender, PNC or the
Designated Lender, as appropriate, and Agent.
Notwithstanding (a) the existence of a Default or an Event of Default,
(b) that any of the other applicable conditions precedent set forth in Section
8.2 hereof have not been satisfied or (c) any other provision of this Loan
Agreement, Agent may at its discretion and without the consent of the Required
Lenders, voluntarily permit the outstanding Revolving Advances at any time to
exceed one hundred and five percent (105%) of the Formula Amount for up to
thirty (30) consecutive Business Days. For purposes of the preceding sentence,
the discretion granted to Agent hereunder shall not preclude involuntary
overadvances that may result from time to time due to the fact that the Formula
Amount was unintentionally exceeded for any reason, including, but not limited
to, Collateral previously deemed to be either "Eligible Receivables" or
"Eligible Inventory", as applicable, becomes ineligible, collections of
Receivables applied to reduce outstanding Revolving Advances are thereafter
returned for insufficient funds or overadvances are made to protect or preserve
the Collateral. In the event Agent involuntarily permits the outstanding
Revolving Advances to exceed the Formula Amount by more than five percent (5%),
Agent shall use its efforts to have Borrowers decrease such excess in as
expeditious a manner as is practicable under the circumstances and not
inconsistent with the reason for such excess. Revolving Advances made after
Agent has determined the existence of involuntary overadvances shall be deemed
to be involuntary overadvances and shall be decreased in accordance with the
preceding sentence.
In addition to (and not in substitution of) the discretionary Revolving
Advances permitted above in this Section 16.2, Agent is hereby authorized by
Borrowers and Lenders, from time to time in Agent's sole discretion, (A) after
the occurrence and during the continuation of a Default or an Event of Default,
or (B) at any time that any of the other applicable conditions precedent set
forth in Section 8.2 hereof have not been satisfied, to make Revolving Advances
to Borrowers on behalf of Lenders which Agent, in its reasonable business
judgment, deems necessary or desirable (i) to preserve or protect the Collateral
or any portion thereof, (ii) to enhance the likelihood of, or maximize the
amount of, repayment of the Advances and other Obligations, or (iii) to pay any
other amount chargeable to Borrowers pursuant to the terms of this Agreement;
provided, that at any time after giving effect to any such Revolving Advances
the outstanding Revolving Advances do not exceed one hundred and five percent
(105%) of the Formula Amount.
16.3 Successors and Assigns; Participations; New Lenders.
(a) This Agreement shall be binding upon and inure to the benefit of Borrowers,
Agent, each Lender, all future holders of the Obligations and their respective
successors and assigns, except that no Borrower may assign or transfer any of
its rights or obligations under this Agreement without the prior written consent
of Agent and each Lender.
(b) Each Borrower acknowledges that in the regular course of commercial banking
business one or more Lenders may at any time and from time to time sell
participating interests in the Advances to other financial institutions (each
such transferee or purchaser of a participating interest, a "Transferee"). Each
Transferee may exercise all rights of payment
84
(including without limitation rights of set-off) with respect to the portion of
such Advances held by it or other Obligations payable hereunder as fully as if
such Transferee were the direct holder thereof provided that Borrowers shall not
be required to pay to any Transferee more than the amount which it would have
been required to pay to Lender which granted an interest in its Advances or
other Obligations payable hereunder to such Transferee had such Lender retained
such interest in the Advances hereunder or other Obligations payable hereunder
and in no event shall Borrowers be required to pay any such amount arising from
the same circumstances and with respect to the same Advances or other
Obligations payable hereunder to both such Lender and such Transferee. Each
Borrower hereby grants to any Transferee a continuing security interest in any
deposits, moneys or other property actually or constructively held by such
Transferee as security for the Transferee's interest in the Advances.
(c) Any Lender may with the consent of Agent which shall not be unreasonably
withheld or delayed sell, assign or transfer all or any part of its rights under
this Agreement and the Other Documents to one or more additional banks or
financial institutions and one or more additional banks or financial
institutions may commit to make Advances hereunder (each a "Purchasing Lender"),
in minimum amounts of not less than $5,000,000, pursuant to a Commitment
Transfer Supplement, executed by a Purchasing Lender, the transferor Lender, and
Agent and delivered to Agent for recording. Upon such execution, delivery,
acceptance and recording, from and after the transfer effective date determined
pursuant to such Commitment Transfer Supplement, (i) Purchasing Lender
thereunder shall be a party hereto and, to the extent provided in such
Commitment Transfer Supplement, have the rights and obligations of a Lender
thereunder with a Commitment Percentage as set forth therein, and (ii) the
transferor Lender thereunder shall, to the extent provided in such Commitment
Transfer Supplement, be released from its obligations under this Agreement, the
Commitment Transfer Supplement creating a novation for that purpose. Such
Commitment Transfer Supplement shall be deemed to amend this Agreement to the
extent, and only to the extent, necessary to reflect the addition of such
Purchasing Lender and the resulting adjustment of the Commitment Percentages
arising from the purchase by such Purchasing Lender of all or a portion of the
rights and obligations of such transferor Lender under this Agreement and the
Other Documents. Borrowers hereby consent to the addition of such Purchasing
Lender and the resulting adjustment of the Commitment Percentages arising from
the purchase by such Purchasing Lender of all or a portion of the rights and
obligations of such transferor Lender under this Agreement and the Other
Documents. Borrowers shall execute and deliver such further documents and do
such further acts and things in order to effectuate the foregoing.
(d) Agent shall maintain at its address a copy of each Commitment Transfer
Supplement delivered to it and a register (the "Register") for the recordation
of the names and addresses of the Advances owing to each Lender from time to
time. The entries in the Register shall be conclusive, in the absence of
manifest error, and Borrowers, Agent and Lenders may treat each Person whose
name is recorded in the Register as the owner of the Advance recorded therein
for the purposes of this Agreement. The Register shall be available for
inspection by Borrowers or any Lender at any reasonable time and from time to
time upon reasonable prior notice. Agent shall receive a fee in the amount of
$3,500 payable by the applicable Purchasing Lender upon the effective date of
each transfer or assignment to such Purchasing Lender.
85
(e) Each Borrower authorizes each Lender to disclose to any Transferee or
Purchasing Lender and any prospective Transferee or Purchasing Lender any and
all financial information in such Lender's possession concerning such Borrower
which has been delivered to such Lender by or on behalf of such Borrower
pursuant to this Agreement or in connection with such Lender's credit evaluation
of such Borrower.
16.4 Application of Payments.
Agent shall have the continuing and exclusive right to apply or reverse
and re-apply any payment and any and all proceeds of enforcing its Lien or other
rights with respect to the Collateral to any portion of the Obligations. To the
extent that any Borrower makes a payment or Agent or any Lender receives any
payment or proceeds of the Collateral for any Borrower's benefit, which are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, debtor in possession, receiver, custodian
or any other party under any bankruptcy law, common law or equitable cause,
then, to such extent, the Obligations or part thereof intended to be satisfied
shall be revived and continue as if such payment or proceeds had not been
received by Agent or such Lender.
16.5 Indemnity.
Each Borrower shall indemnify Agent, each Lender and each of their
respective officers, directors, Affiliates, employees and agents from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses and disbursements of any kind or
nature whatsoever (including, without limitation, fees and disbursements of
counsel) which may be imposed on, incurred by, or asserted against Agent or any
Lender in any litigation, proceeding or investigation instituted or conducted by
any governmental agency or instrumentality or any other Person with respect to
any aspect of, or any transaction contemplated by, or referred to in, or any
matter related to, this Agreement or the Other Documents, whether or not Agent
or any Lender is a party thereto, except to the extent that any of the foregoing
arises out of the willful misconduct of the party being indemnified.
16.6 Notice.
Any notice or request hereunder may be given to Borrowing Agent or any
Borrower or to Agent or any Lender at their respective addresses set forth below
or at such other address as may hereafter be specified in a notice designated as
a notice of change of address under this Section. Any notice, request, demand,
direction or other communication (for purposes of this Section 16.6 only, a
"Notice") to be given to or made upon any party hereto under any provision of
this Loan Agreement shall be given or made by telephone or in writing (which
includes by means of electronic transmission (i.e., "e-mail") or facsimile
transmission or by setting forth such Notice on a site on the World Wide Web (a
"Website Posting") if Notice of such Website Posting (including the information
necessary to access such site) has previously been delivered to the applicable
parties hereto by another means set forth in this Section 16.6) in accordance
with this Section 16.6. Any such Notice must be delivered to the applicable
parties hereto at the addresses and numbers set forth under their respective
names on Section 16.6 hereof or in accordance with any subsequent unrevoked
Notice from any such party that is given in accordance with this Section 16.6.
Any Notice shall be effective:
86
(a) In the case of hand-delivery, when delivered;
(b) If given by mail, four days after such Notice is deposited with the United
States Postal Service, with first-class postage prepaid, return receipt
requested;
(c) In the case of a telephonic Notice, when a party is contacted by telephone,
if delivery of such telephonic Notice is confirmed no later than the next
Business Day by hand delivery, a facsimile or electronic transmission, a Website
Posting or an overnight courier delivery of a confirmatory Notice (received at
or before noon on such next Business Day);
(d) In the case of a facsimile transmission, when sent to the applicable party's
facsimile machine's telephone number, if the party sending such Notice receives
confirmation of the delivery thereof from its own facsimile machine;
(e) In the case of electronic transmission, when actually received;
(f) In the case of a Website Posting, upon delivery of a Notice of such posting
(including the information necessary to access such site) by another means set
forth in this Section 16.6; and
(g) If given by any other means (including by overnight courier), when actually
received.
Any Lender giving a Notice to Borrowing Agent or any Borrower shall
concurrently send a copy thereof to the Agent, and the Agent shall promptly
notify the other Lenders of its receipt of such Notice.
(A) If to Agent or PNC at:
PNC Bank, National Association
One PNC Plaza
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
PNC Bank, National Association
One PNC Plaza
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
87
and a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
One Oxford Centre, 20th Floor
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
(B) If to a Lender other than Agent, as specified on the signature
pages hereof.
(C) If to Borrowing Agent or any Borrower, at:
▇. ▇. ▇▇▇▇▇▇ Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇.▇. ▇▇▇▇▇▇ Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
16.7 Survival.
The obligations of Borrowers under Sections 2.2(f), 3.7, 3.8, 3.9,
4.19(h), 14.7 and 16.5 shall survive termination of this Agreement and the Other
Documents and payment in full of the Obligations.
16.8 Severability.
If any part of this Agreement is contrary to, prohibited by, or deemed
invalid under applicable laws or regulations, such provision shall be
inapplicable and deemed omitted to the extent so contrary, prohibited or
invalid, but the remainder hereof shall not be invalidated thereby and shall be
given effect so far as possible.
16.9 Expenses.
All costs and expenses including, without limitation, reasonable
attorneys' fees (including the allocated costs of in house counsel) and
disbursements incurred by Agent on its behalf or on
88
behalf of Lenders (a) in all efforts made to enforce payment of any Obligation
or effect collection of any Collateral, or (b) in connection with the entering
into, modification, amendment, administration and enforcement of this Agreement
or any consents or waivers hereunder and all related agreements, documents and
instruments, or (c) in instituting, maintaining, preserving, enforcing and
foreclosing on Agent's security interest in or Lien on any of the Collateral,
whether through judicial proceedings or otherwise, or (d) in defending or
prosecuting any actions or proceedings arising out of or relating to Agent's or
any Lender's transactions with any Borrower, or (e) in connection with any
advice given to Agent or any Lender with respect to its rights and obligations
under this Agreement and all related agreements, may be charged to Borrowers'
Account and shall be part of the Obligations.
16.10 Injunctive Relief.
Each Borrower recognizes that, in the event any Borrower fails to
perform, observe or discharge any of its obligations or liabilities under this
Agreement, any remedy at law may prove to be inadequate relief to Lenders;
therefore, Agent, if Agent so requests, shall be entitled to temporary and
permanent injunctive relief in any such case without the necessity of proving
that actual damages are not an adequate remedy.
16.11 Consequential Damages.
Neither Agent nor any Lender, nor any agent or attorney for any of
them, shall be liable to any Borrower for consequential damages arising from any
breach of contract, tort or other wrong relating to the establishment,
administration or collection of the Obligations.
16.12 Captions.
The captions at various places in this Agreement are intended for
convenience only and do not constitute and shall not be interpreted as part of
this Agreement.
16.13 Counterparts; Telecopied Signatures.
This Agreement may be executed in any number of and by different
parties hereto on separate counterparts, all of which, when so executed, shall
be deemed an original, but all such counterparts shall constitute one and the
same agreement. Any signature delivered by a party by facsimile transmission
shall be deemed to be an original signature hereto.
16.14 Construction.
The parties acknowledge that each party and its counsel have reviewed
this Agreement and that the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement or any amendments, schedules or exhibits
thereto.
16.15 Confidentiality; Sharing Information.
(a) Agent, each Lender and each Transferee shall hold all non-public information
obtained by Agent, such Lender or such Transferee pursuant to the requirements
of this
89
Agreement in accordance with Agent's, such Lender's and such Transferee's
customary procedures for handling confidential information of this
nature; provided, however, Agent, each Lender and each Transferee may disclose
such confidential information (i) to its examiners, affiliates, outside
auditors, counsel and other professional advisors, (ii) to Agent, any Lender or
to any prospective Transferees and Purchasing Lenders, and (iii) as required or
requested by any Governmental Body or representative thereof or pursuant to
legal process; provided, further that (A) unless specifically prohibited by
applicable law or court order, Agent, each Lender and each Transferee shall use
its best efforts prior to disclosure thereof, to notify the applicable Borrower
of the applicable request for disclosure of such non-public information (1) by a
Governmental Body or representative thereof (other than any such request in
connection with an examination of the financial condition of a Lender or a
Transferee by such Governmental Body) or (2) pursuant to legal process and (B)
in no event shall Agent, any Lender or any Transferee be obligated to return any
materials furnished by any Borrower other than those documents and instruments
in possession of Agent or any Lender in order to perfect its Lien on the
Collateral once the Obligations have been paid in full and this Agreement has
been terminated.
(b) Each Borrower acknowledges that from time to time financial advisory,
investment banking and other services may be offered or provided to such
Borrower or one or more of its Affiliates (in connection with this Agreement or
otherwise) by any Lender or by one or more Subsidiaries or Affiliates of such
Lender and each Borrower hereby authorizes each Lender to share any information
delivered to such Lender by such Borrower and its Subsidiaries pursuant to this
Agreement, or in connection with the decision of such Lender to enter into this
Agreement, to any such Subsidiary or Affiliate of such Lender, it being
understood that any such Subsidiary or Affiliate of any Lender receiving such
information shall be bound by the provision of Section 16.15 as if it were a
Lender hereunder. Such authorization shall survive the repayment of the other
Obligations and the termination of the Loan Agreement.
16.16 Publicity.
Each Borrower and each Lender hereby authorizes Agent to make
appropriate announcements of the financial arrangement entered into among
Borrowers, Agent and Lenders, including, without limitation, announcements which
are commonly known as tombstones, in such publications and to such selected
parties as Agent shall in its sole and absolute discretion deem appropriate.
[SIGNATURE PAGE FOLLOWS]
[SIGNATURE PAGE 1 OF 2 TO AMENDED AND RESTATED
REVOLVING CREDIT AND SECURITY AGREEMENT]
Each of the parties has signed this Agreement as of the day and year
first above written.
ATTEST: ▇. ▇. ▇▇▇▇▇▇ COMPANY
/s/▇▇▇▇▇ ▇. ▇▇▇▇▇
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇ [Seal]
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:Sr. VP and CFO
Address:
ATTEST: CXT INCORPORATED
/s/▇▇▇▇▇ ▇. ▇▇▇▇▇
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇ [Seal]
Name:▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:Senior VP and CFO
Address:
ATTEST: NATMAYA, INC.
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ [Seal]
Name:▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title:President
Address:200 ▇. ▇▇▇ ▇▇. #▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTEST: FOSMART, INC.
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ [Seal]
Name:▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title:President
Address:
[SIGNATURE PAGE 2 OF 2 TO AMENDED AND RESTATED
REVOLVING CREDIT AND SECURITY AGREEMENT]
PNC BANK, NATIONAL ASSOCIATION, a
national banking association, as Lender and as
Agent
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Commitment Percentage: 41.▇▇▇▇▇▇▇▇▇▇%
LASALLE BANK NATIONAL ASSOCIATION
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇
Name:▇▇▇▇▇▇ ▇. ▇▇▇▇
Title:Senior Vice President
Address:135 ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Commitment Percentage: 33.3333333333%
FIRST COMMONWEALTH BANK
By: /s/▇▇▇▇ ▇. Oris
Name: ▇▇▇▇ ▇. Oris
Title: S.V.P.
Address:
Commitment Percentage: 25.0000000000%
SCHEDULE 1.2(A)
PRICING GRID
------------- -------------------------------------------------- ------------------- ------------------ --------------
Alternate Base Eurodollar
Rate Spread Rate Spread
Level Fixed Charge Coverage Ratio Facility Fee
------------- -------------------------------------------------- ------------------- ------------------ --------------
I Greater than 2.50 to 1.00 .250% minus 1.00% 1.50%
------------- -------------------------------------------------- ------------------- ------------------ --------------
II Equal to or less than 2.50 to 1.00 but greater .250% minus 0.75% 1.75%
than 2.00 to 1.00
------------- -------------------------------------------------- ------------------- ------------------ --------------
II Equal to or less than 2.00 to 1.00 but greater .250% minus 0.50% 2.00%
than 1.50 to 1.00
------------- -------------------------------------------------- ------------------- ------------------ --------------
III Equal to or less than 1.50 to 1.00 but greater .375% 0.00% 2.25%
than 1.15 to 1.00
------------- -------------------------------------------------- ------------------- ------------------ --------------
IV Equal to or less than 1.15 to 1.00 .500% 0.50% 2.50%
------------- -------------------------------------------------- ------------------- ------------------ --------------
For purposes of determining the Applicable Margin and the Facility Fee:
(i) The Fixed Charged Coverage Ratio shall be calculated at the end of
each fiscal quarter of the Borrowers for the four fiscal quarters then ended.
(ii) The Alternate Base Rate Spread on the Closing Date shall equal
negative one percent (-1.00%). The Eurodollar Rate Spread on the Closing Date
shall equal one and one-half percent (1.50%). The Facility Fee on the Closing
Date shall equal one fourth of one percent (.250%).
(iii) After the Closing Date, the Alternate Base Rate Spread, the
Eurodollar Rate Spread and the Facility Fee shall be based upon the Fixed Charge
Coverage Ratio, as calculated at the end of each fiscal quarter for the four
fiscal quarters then ended, and as shown on the Borrowers' most recently
delivered financial statements pursuant to Section 9.8 and as set forth above.
In the event the Fixed Charge Coverage Ratio has changed such that a different
rate or fee is applicable, the rate and fee shall be effective as of the first
day of the month following receipt by Agent of the quarterly financial
statements evidencing such change.