Exhibit 10(a)
______________________________________________________________________
COMMERCIAL LOAN AND SECURITY AGREEMENT
by and among
TRANS-LUX CORPORATION
(the "Borrower")
PEOPLE'S BANK
THE BANK OF NEW YORK
(collectively, "Lenders," and individually a "Lender")
and
PEOPLE'S BANK
AS AGENT FOR THE LENDERS
("Agent")
February 12, 2003
______________________________________________________________________
TABLE OF CONTENTS
Page
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ARTICLE 1 DEFINITIONS AND ACCOUNTING TERMS.................................1
Section 1.1 Defined Terms...........................................1
Section 1.2 Terms Generally........................................19
ARTICLE 2 AMOUNTS AND TERMS OF THE LOANS..................................20
A. THE LOANS.......................................................20
Section 2.1 Revolving Loan.........................................20
Section 2.2A Term Loan A...........................................21
Section 2.2B Term Loan B...........................................22
Section 2.3 Interest Provisions....................................23
Section 2.4 Notice and Manner of Borrowing; Conversion or
Continuation of Interest Rate......................................24
Section 2.5 Excess Advances........................................26
B. CERTAIN GENERAL PROVISIONS......................................26
Section 2.6 Taxes..................................................26
Section 2.7 Computations...........................................27
Section 2.8 Additional Payments....................................27
Section 2.9 Capital Adequacy.......................................28
Section 2.10 Illegality............................................29
Section 2.11 Certificate; Protection...............................29
Section 2.12 Obligations Absolute..................................29
C. MISCELLANEOUS...................................................30
Section 2.13 Use of Proceeds.......................................30
Section 2.14 Termination...........................................30
Section 2.15 Indemnification.......................................30
Section 2.16 Termination of Revolving Loans........................31
Section 2.17 Replacement of Lenders................................31
D. LETTERS OF CREDIT...............................................32
Section 2.18 Letters of Credit.....................................32
Section 2.19 Letter of Credit Participations.......................34
ARTICLE 3 CONDITIONS PRECEDENT............................................36
Section 3.1 Conditions Precedent to Effectiveness..................36
Section 3.2 Conditions Precedent to All Revolving Loans............38
ARTICLE 4 REPRESENTATIONS AND WARRANTIES..................................39
Section 4.1 Incorporation, Good Standing, and Due Qualification....39
Section 4.2 Corporate Power and Authority..........................39
Section 4.3 Legally Enforceable Agreement..........................40
Section 4.4 Financial Statements and Condition; Full Disclosure...40
Section 4.5 Other Agreements; No Default...........................41
Section 4.6 Litigation.............................................41
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Section 4.7 No Defaults on Outstanding Judgments or Orders.........41
Section 4.8 Ownership and Liens Error..............................41
Section 4.9 Subsidiaries...........................................42
Section 4.10 Operation of Business.................................42
Section 4.11 Taxes.................................................42
Section 4.12 Indebtedness..........................................42
Section 4.13 Capital Stock.........................................42
Section 4.14 Margin Securities.....................................42
Section 4.15 Fiscal Year...........................................43
Section 4.16 No Broker's Fees......................................43
Section 4.17 Governmental Consents and Regulatory Approvals.......43
Section 4.18 Eligible Accounts Receivable..........................43
Section 4.19 Environmental Compliance..............................43
Section 4.20 Compliance with Laws..................................44
Section 4.21 Events of Default.....................................44
Section 4.22 Union Contracts.......................................44
Section 4.23 ERISA.................................................44
Section 4.24 Offices...............................................44
ARTICLE 5 AFFIRMATIVE COVENANTS...........................................45
Section 5.1 Maintenance of Existence...............................45
Section 5.2 Maintenance of Records.................................45
Section 5.3 Maintenance of Properties..............................45
Section 5.4 Conduct of Business....................................45
Section 5.5 Maintenance of Insurance...............................45
Section 5.6 Compliance With Laws...................................46
Section 5.7 Right of Inspection....................................46
Section 5.8 Reporting Requirements.................................46
Section 5.9 Eligible Accounts Receivable...........................48
Section 5.10 Collateral............................................48
Section 5.11 Defend Collateral.....................................48
Section 5.12 Environmental Covenants...............................48
Section 5.13 Operating Accounts....................................49
Section 5.14 Permitted Acquisitions................................49
Section 5.15 Notice of Certain Events..............................50
Section 5.16 Audit by Lenders......................................50
Section 5.17 Payment of Principal Interest and Fees................50
Section 5.18 Transaction Expenses..................................51
ARTICLE 6 NEGATIVE COVENANTS..............................................51
Section 6.1 Liens..................................................51
Section 6.2 Debt...................................................52
Section 6.3 Mergers, Etc...........................................52
Section 6.4 Leases.................................................52
Section 6.5 Sale and Leaseback.....................................52
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Section 6.6 Sale of Assets.........................................52
Section 6.7 Contingent Liabilities.................................52
Section 6.8 Subsidiaries...........................................53
Section 6.9 Fiscal Year............................................53
Section 6.10 Accounting Methods....................................53
Section 6.11 Inventory Locations...................................53
Section 6.12 Name Changes..........................................53
Section 6.13 Prohibited Transfers..................................53
Section 6.14 Jurisdiction..........................................53
ARTICLE 7 FINANCIAL COVENANTS.............................................54
Section 7.1 Minimum Fixed Charge Coverage Ratio....................54
Section 7.2 Minimum Tangible Net Worth.............................54
Section 7.3 Maximum Total Funded Debt Ratio........................54
Section 7.4 Maximum Leverage Ratio.................................54
Section 7.5 Certain Financial Terms................................54
ARTICLE 8 GRANT OF COLLATERAL.............................................56
Section 8.1 Grant of Security Interest.............................56
Section 8.2 The Mortgage...........................................57
Section 8.3 Lenders' Rights........................................57
Section 8.4 Lenders' Appointment as Attorney-in-fact...............58
ARTICLE 9 EVENTS OF DEFAULT...............................................58
Section 9.1 Events of Default......................................58
ARTICLE 10 THE AGENT......................................................61
Section 10.1 Appointment...........................................61
Section 10.2 Nature of Duties......................................61
Section 10.3 Lack of Reliance on the Agent.........................61
Section 10.4 Certain Rights of the Agent...........................62
Section 10.5 Reliance..............................................62
Section 10.6 Indemnification.......................................62
Section 10.7 The Agent in its Individual Capacity..................63
Section 10.8 Resignation...........................................63
ARTICLE 11 GENERAL PROVISIONS.............................................64
Section 11.1 Amendments............................................64
Section 11.2 Notices...............................................64
Section 11.3 No Waiver; Remedies...................................65
Section 11.4 Successors and Assigns................................65
Section 11.5 Costs, Expenses, and Taxes; Indemnification...........67
Section 11.6 Right of Setoff.......................................68
Section 11.7 Cross-Collateralization...............................69
Section 11.8 Governing Law; Jurisdiction...........................69
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Section 11.9 Entire Agreement; Severability of Provisions..........70
Section 11.10 Estoppel Certificates................................70
Section 11.11 Waiver of Jury Trial and Consequential Damages.......70
Section 11.12 Replacement of the Note..............................72
Section 11.13 Survival of Representations and Warranties...........72
Section 11.14 Further Assurances...................................72
Section 11.15 Construction.........................................72
Section 11.16 Captions.............................................72
Section 11.17 Counterparts.........................................72
Section 11.18 Maximum Rate of Interest.............................72
Section 11.19 Domicile of Loans....................................73
Section 11.20 Register.............................................73
Section 11.21 Confidentiality......................................74
Exhibit A-1 -- Commercial Revolving Loan Promissory Note
Exhibit A-2 -- Commercial Revolving Loan Promissory Note
Exhibit B-1 -- Term Loan A Promissory Note
Exhibit B-2 -- Term Loan A Promissory Note
Exhibit C-1 -- Term Loan B Promissory Note
Exhibit C-2 -- Term Loan B Promissory Note
Exhibit D -- Certificate of Compliance
Exhibit E -- Unlimited Guaranty
Exhibit F -- Borrowing Base Certificate
Exhibit G -- Power of Attorney
Schedule 1 -- Guarantors
Schedule 2 -- Commitments
Schedule 4.4 -- Outstanding Debt of Borrower and Guarantors
Schedule 4.6 -- Litigation
Schedule 4.8 -- Liens
Schedule 4.9 -- Subsidiaries
Schedule 4.13 -- Capital Stock of Guarantors
Schedule 4.19 -- Environmental Compliance
Schedule 4.22 -- Union Contracts
Schedule 4.23 -- ERISA
Schedule 4.24 -- Offices
Schedule 6.1(e)-- Permitted Liens
Schedule 6.4 -- Leases
Schedule 6.6 -- Sale of Assets
Schedule 9.1(5) Waived Indebtedness
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THIS COMMERCIAL LOAN AND SECURITY AGREEMENT (the "Agreement"), dated
February 12, 2003 is entered into by and among TRANS-LUX CORPORATION, a Delaware
corporation (the "Borrower"), PEOPLE'S BANK ("People's") and THE BANK OF NEW
YORK ("BNY" and together with People's and their respective successors and
assigns, the "Lenders" and each individually a "Lender") and PEOPLE'S BANK, a
Connecticut state chartered banking corporation with an office at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as agent for the Lenders, (hereinafter
referred to as the "Agent").
WHEREAS, the Borrower has requested that Lenders make available to the
Borrower (i) a term loan facility in an aggregate maximum principal amount of
Seven Million Dollars ($7,000,000) ("Term Loan A"), (ii) a term loan facility in
an aggregate maximum principal amount of Ten Million Dollars ($10,000,000)
("Term Loan B"), and (iii) a revolving loan facility in a maximum principal
amount at any time outstanding of up to Five Million Dollars ($5,000,000) (the
"Revolving Loan Facility") (Term Loan A, Term Loan B and the Revolving Loan
Facility are collectively referred to as the "Facilities") of which up to Two
Million Five Hundred Thousand Dollars ($2,500,000) may be used for the issuance
of commercial letters of credit; and
WHEREAS, Lenders are willing to make the Facilities available to the
Borrower upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrower, Agent and Lenders hereby agree as follows:
ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS
Section 1.1 Defined Terms The following capitalized terms are used in this
Agreement with the respective meanings set forth in this Section 1.1. Terms
defined in the singular shall have the same meaning when used in the plural, and
vice versa.
"Account Debtor" means any Person who is or may become obligated to the
Borrower or any of the Secured Guarantors under, with respect to, or on account
of, an Account, Chattel Paper or General Intangible (including a Payment
Intangible).
"Accounts" means all "accounts," as such term is defined in the Code, now
owned or hereafter acquired by the Borrower or any of the Secured Guarantors.
"Affiliate" means (i) each Person that, directly or indirectly, owns or
controls, whether beneficially, or as a trustee, guardian or other fiduciary,
fifty percent (50%) or more of the Stock having ordinary voting power for the
election of directors of the Borrower; (ii) each Person that
controls, is controlled by or is under common control with the Borrower or any
other Affiliate; or (iii) each of the Borrower's officers, directors, joint
venturers and partners. For the purpose of this definition, "control" of the
Borrower shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of its management or policies, whether through
the ownership of voting securities, by contract or otherwise.
"Agent" means People's, in its representative capacity as agent for the
Lenders.
"Agreement" means this Commercial Loan and Security Agreement, as amended,
supplemented, or modified and in effect from time to time.
"Available Amount" means the maximum aggregate amount from time to time
that beneficiaries may draw under outstanding Letters of Credit, as such
aggregate amount may be reduced from time to time pursuant to the terms of the
Letters of Credit.
"Base Rate" means the interest rate announced by People's from time to
time as its prime rate applicable to commercial borrowers and may not be
People's lowest or most favorable rate.
"Base Rate Loan" means any Revolving Loan or principal portion of any
other Loan that bears interest with reference to the Base Rate.
"Base Rate Margin" means the percentage determined in accordance with
Section 2.3(a).
"Books and Records" means all books, records, board minutes, Contracts,
licenses, insurance policies, environmental audits, business plans, files,
computer files, computer discs and other data and Software storage and media
devices, accounting books and records, financial statements (accrual and pro
forma), filings with Governmental Authorities and any and all records and
instruments relating to the Collateral, the collateral covered by the Guarantor
Security Agreement, the Borrower's or any Secured Guarantor's business.
"Borrower" means Trans-Lux Corporation, a Delaware corporation.
"Borrowing Base" means, at the relevant time of reference, the amount
which is equal to the lesser of (i) 85% of Eligible Accounts Receivable and (ii)
the Revolving Loan Commitments.
"Borrowing Base Certificate" has the meaning set forth in Section 5.8(d).
"Borrowing Request" has the meaning set forth in Section 2.4(a).
"Business Day" means a day other than a Saturday, Sunday, or other day on
which banks in the States of Connecticut or New York are required or authorized
by law to be closed provided, however, that when used in connection with a LIBOR
Rate Loan, the term shall also exclude any day on which banks are not open for
dealings in Dollar deposits in the London interbank market.
"Capital Assets" has the meaning set forth in Section 7.5(a).
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"Capital Expenditures" has the meaning set forth in Section 7.5(b).
"Capital Lease" means any lease of any property (whether real, personal or
mixed) by the Borrower or any Guarantor as lessee that, in accordance with GAAP,
either would be required to be classified and accounted for as a capital lease
on a balance sheet of the Borrower or such Guarantor or otherwise would be
disclosed as such in a note to such balance sheet.
"Capital Lease Obligation" means, with respect to any Capital Lease, the
amount of the obligation of the lessee thereunder that, in accordance with GAAP,
would appear on a balance sheet of such lessee in respect of such Capital Lease
or otherwise be disclosed in a note to such balance sheet.
"Certificate of Compliance" means a certificate in the form of Exhibit D
attached hereto.
"Certificated Security" means a "certificated security" as such term is
defined in the Code, now owned or hereafter acquired by the Borrower, wherever
located.
"Change of Control" means the merger, consolidation or acquisition of the
Borrower by or with a Person not a Subsidiary.
"Charges" means all federal, state, county, city, municipal, local,
foreign or other governmental taxes (including, without limitation, taxes owed
to PBGC at the time due and payable), levies, assessments, charges, liens,
claims or encumbrances upon or relating to (i) the Collateral, (ii) the
Obligations, (iii) the employees, payroll, income or gross receipts of the
Borrower, (iv) the Borrower's ownership or use of any of its assets, or (v) any
other aspect of the Borrower's business.
"Chattel Paper" means all "chattel paper," as such term is defined in the
Code, now owned or hereafter acquired by the Borrower, wherever located.
"Closing Date" means the Business Day on which the conditions precedent
set forth in Article 3 have been satisfied or waived, and the initial Revolving
Loan has been made.
"Code" means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of Connecticut; provided, that in the event that
the Code is used to define any term herein or in any other Loan Document and
such term is defined differently in different Articles of the Code, the
definition of such term contained in Article 9 shall govern; provided further
that, in the event that, by reason of mandatory provisions of law, any or all of
the attachment, perfection or priority of, or remedies with respect to, any
Lender's Lien on any Collateral is governed by the Uniform Commercial Code as in
effect in a jurisdiction other than the State of Connecticut, the term "Code"
shall mean the Uniform Commercial Code as in effect in such other jurisdiction
for purposes of the provision of this Agreement relating to such attachment,
perfection, priority or remedies and for purposes of definitions related to such
provisions.
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"Collateral" has the meaning set forth in Article 8.
"Commitment" means any of the commitments of any Lender, either a Term
Loan Commitment or a Revolving Loan Commitment.
"Commitment Fee" means the non-refundable amount of $82,500 payable by the
Borrower to the Agent for the account of the Lenders, of which amount $25,000
has already been paid.
"Commodity Account" means a "commodity account", as such term is defined
in the Code, now owned or hereafter held in the name of the Borrower, wherever
located.
"Commodity Contract" means a "commodity contract," as such term is defined
in the Code, now owned or hereafter acquired by the Borrower.
"Contaminant" means any pollutants, hazardous or toxic substances or
wastes or contaminated materials including but not limited to oil and oil
products, asbestos, asbestos containing materials, urea formaldehyde foam
insulation, transformers or other equipment which contain dielectric fluid
containing levels of polychlorinated biphenyls, flammables, explosives,
radioactive materials, laboratory wastes, biohazardous wastes, chemicals,
elements, compounds or any other materials and substances (including materials,
substances or things which are composed of or which have as constituents any of
the foregoing substances), which are or may be subject to regulation under, or
the Release of which or exposure to which is prohibited, limited or regulated
under, any Environmental Law.
"Contracts" means all the contracts, undertakings, or agreements (other
than rights evidenced by Chattel Paper, Documents or Instruments) in or under
which the Borrower may now or hereafter have any right, title or interest,
including any agreement relating to the terms of payment or the terms of
performance of any Account.
"Copyright License" means rights under any written agreement now owned or
hereafter acquired by the Borrower granting the right to use any Copyright or
Copyright registration.
"Copyrights" means all of the following now owned or hereafter acquired by
the Borrower: (i) all copyrights in any original work of authorship fixed in
any tangible medium of expression, now known or later developed, all
registrations and applications for registration of any such copyrights in the
United States or any other country, including registrations, recordings and
applications, and supplemental registrations, recordings, and applications in
the United States Copyright Office; and (ii) all Proceeds of the foregoing,
including license royalties and proceeds of infringement suits, the right to ▇▇▇
for past, present and future infringements, all rights corresponding thereto
throughout the world and all renewals and extensions thereof.
"Current Maturities of Long-Term Debt" has the meaning set forth in
Section 7.5(c).
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"Debt" means all Indebtedness, liabilities and Obligations arising under
and in any way related to the financing accommodations set forth in this
Agreement including, without limitation, the Indebtedness evidenced by the Notes
and in respect of or in connection with the Letters of Credit.
"Default" means an event or condition the occurrence or existence of
which, with the lapse of time or the giving of a required notice, or both, would
become an Event of Default.
"Default Rate" means, with respect to any Loan, that rate of interest that
is equal to the sum of two percent (2%) plus the rate of interest otherwise
applicable to such Loan under the terms of this Agreement.
"Defaulting Lender" means any Lender with respect to which a Lender
Default is in effect.
"Deposit Accounts" means all "deposit accounts" as such term is defined in
the Code, now or hereafter held in the name of the Borrower.
"Documents" means all "documents," as such term is defined in the Code,
now owned or hereafter acquired by the Borrower, wherever located.
"Dollar" and the sign "$" mean lawful money of the United States of
America.
"EBITDA" has the meaning set forth in Section 7.5(d).
"Electronic Chattel Paper" means all "electronic chattel paper" as such
term is defined in the Code, now owned or hereafter acquired by the Borrower,
wherever located.
"Eligible Accounts Receivable" means, at the time of calculation, bona
fide outstanding Accounts, in which the Lenders have a first priority perfected
security interest, and which individually satisfy all of the following
requirements:
(A) It is owing to the Borrower or any of the Secured Guarantors, and is
subject to a validly perfected security interest in favor of the Lenders having
priority over any and all other liens or encumbrances thereon;
(B) It arises from the sale or lease of goods by the Borrower or any of
the Secured Guarantors or the rendering of services by the Borrower or any of
the Secured Guarantors which have been shipped or delivered or billed on account
to an Account Debtor on an absolute sale basis and not on consignment, or on a
sale or return basis or subject to any other repurchase or return agreement;
provided, that in any case (i) no part of the subject goods or services has been
returned, rejected, lost or damaged, and (ii) the Account Debtor is not
insolvent or the subject of any bankruptcy or insolvency proceeding of any kind;
(C) It is a valid, legally enforceable obligation of the Account Debtor
thereunder and is not and may not become subject to any offset, counterclaim or,
in the reasonable good faith
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opinion of the Agent, contra or other defense on the part of such Account
Debtor or to any claim on the part of such Account Debtor denying liability
thereunder; provided, however, that if it is subject to any such offset,
defense, or claim, it shall be ineligible to the extent of such offset, defense
or claim;
(D) It is subject to no lien or security interest whatsoever (including
purchase money security interests), except for the security interest of the
Lenders hereunder and liens or security interests which have been expressly
subordinated to the security interest of the Lenders on terms satisfactory to
the Lenders and pursuant to documentation in form and substance satisfactory to
the Lenders;
(E) It is evidenced by an invoice or other proof of delivery in form
reasonably acceptable to the Lenders;
(F) Except as specifically approved in writing by the Lenders, it has not
remained unpaid for a period exceeding ninety (90) days after the date of
invoice;
(G) It is not owing from an Account Debtor from whom twenty-five percent
(25%) or more of the amounts owing to the Borrower or any Secured Guarantor
exceed $50,000, and have remained unpaid for a period exceeding ninety (90) days
from the date of invoice;
(H) It does not arise out of transactions with an employee, officer,
director, Affiliate, or Subsidiary of the Borrower;
(I) It is not owing from an Account Debtor located outside the United
States or in any jurisdiction in which the Borrower or any of the Secured
Guarantors has not complied with any laws which might restrict the ability of
the Borrower or such Secured Guarantor to collect such Accounts;
(J) It does not arise from a contract containing a prohibition against
assigning or granting a security interest therein; and
(K) It is denominated in Dollars.
With respect to the Accounts, the Borrower warrants and represents to
Lenders that, unless otherwise indicated in writing by the Borrower or any of
the Secured Guarantors: (A) they are genuine, are in all respects what they
purport to be, are not evidenced by a judgment and are only evidenced by one, if
any, executed original instrument, agreement, contract or document, which has
been delivered to the Agent; (B) they represent bona fide transactions in
accordance with the terms and provisions contained in any documents related
thereto; (C) the amounts of the face value shown on any schedule of accounts or
accounts receivable aging report provided to the Lenders, and all invoices and
statements delivered to the Lenders with respect to any Account, are actually
and absolutely owing to the Borrower or any of the Secured Guarantors and are
not contingent for any reason; (D) there are no setoffs, counterclaims or
disputes existing or asserted with respect thereto, and neither the Borrower nor
any Secured Guarantor has made any
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agreement with any Account Debtor thereunder for any deduction therefrom,
except a discount or allowance allowed by the Borrower or any of the Secured
Guarantors in the ordinary course of its business for prompt payment or early
payment; (E) there are no facts, events or occurrences which in any way impair
the validity or enforcement thereof or tend to reduce the amount payable
thereunder from the amount of the invoice face value with respect to any
Eligible Accounts Receivable, and on all contracts, invoices and statements
delivered to the Agent with respect thereto; (F) to the best knowledge of the
Borrower and the Secured Guarantors, all Account Debtors, under any Eligible
Accounts Receivable, (i) had the capacity to contract at the time any contract
or other document giving rise to the Account was executed, (ii) are solvent,
and (iii) are not the subject of a bankruptcy or insolvency proceeding of any
kind; (G) the goods giving rise thereto are not, and were not at the time of
the sale thereof, subject to any lien, claim, encumbrance or security interest,
except those of the Lenders, those terminated prior to the date hereof or those
subordinate to the Lenders' security interest; (H) the Borrower and the Secured
Guarantors have no knowledge of any fact or circumstance which would materially
impair the validity or collectability thereof; (I) to the best knowledge of the
Borrower and the Secured Guarantors, there are no proceedings or actions
threatened or pending against any Account Debtor thereunder which might result
in any material adverse change in the financial condition of such Account
Debtor; and (J) they have not been pledged, assigned or transferred to any
other Person.
In the event of any dispute as to whether an Account is or has ceased to
be an Eligible Account Receivable, the reasonable credit decision of the
Lenders, exercised in good faith, shall control.
"Eligible Transferee" means and includes a commercial bank, an insurance
company, a finance company and a financial institution.
"Enforcement Action" means any action, proceeding or investigation
(administrative or judicial, civil or criminal) instituted or threatened by the
U.S. Environmental Protection Agency, or any other federal, state or local
governmental agency related to any alleged or actual violation of any
Environmental Law with respect to any property owned or leased by the Borrower
and/or any business conducted thereon, including, but not limited to, actions
seeking remediation, the imposition or enforcement of liability pursuant to any
Environmental Law and compliance with any Environmental Law. Enforcement Action
shall also include any similar actual or threatened action by any private party
pursuant to any Environmental Law.
"Environmental Laws" means any and all present and future United States
federal, state, and local laws, statutes, ordinances, rules, and regulations,
relating to protection of human health and the environment from Contaminants
including but not limited to the Comprehensive Environmental Response,
Compensation and Liability Act, as amended (CERCLA), 42 USC S9601 et seq.; the
Resource Conservation and Recovery Act, as amended (RCRA), 42 USC S6901 et seq.
the Clean Air Act, as amended, 42 USC S7401 et seq.; the Federal Water
Pollution Control Act, as amended (including but not limited to as amended by
the Clean Water Act), 33 USC S1251 et seq.; the Toxic Substances Control Act,
as amended (TSCA), 15 USC S2601 et seq.; the Emergency Planning and Community
Right-to-Know Act (also known as ▇▇▇▇ Title III), as amended (EPCRA), 42 USC
S11001 et seq.; the Safe Drinking Water Act, as amended, -7-
42 USC S300(f) et seq.; the Federal Insecticide, Fungicide and Rodenticide Act,
as amended (FIFRA), 7 USC S136 et seq.; the Occupational Safety and Health Act,
as amended (OSHA), 29 USC S651 et seq.; the Endangered Species Act, as amended,
16 USC S1531 et seq.; the National Environmental Policy Act, as amended (NEPA),
42 USC S4321 et seq.; the Rivers and Harbors Act of 1899 33 USC S401 et seq.;
state and local laws, rules and regulations similar to or addressing similar
matters as the foregoing federal laws; laws, rules and regulations governing
underground or above-ground storage tanks; laws, rules and regulations imposing
liens for response costs or costs of other remediation, whether or not those
liens have a higher priority than existing liens; laws, rules and regulations
conditioning transfer of property upon a form of negative declaration or other
approval of a Governmental Authority of the environmental condition of a
property; laws, rules and regulations requiring the disclosure of conditions
relating to Contaminants in connection with transfer of title to or interest in
property; laws, rules and regulations requiring notifying of any government
entity with regard to a Release of any Contaminant; conditions or requirements
imposed in connection with any permits; government orders and demands and
judicial orders pursuant to any of the foregoing; laws, rules and regulations
relating to the Release, use, treatment, storage, disposal, transportation,
transfer, generation, processing, production, refining, control, management, or
handling of Contaminants; any and all other laws, rules, regulations, guidance,
guidelines and common law of any governmental entity relating to the protection
of human health or the environment from Contaminants. The reference in this
paragraph to state laws specifically includes, but is not limited to, the
applicable laws of the State of Connecticut.
"Equipment" means all "equipment" as such term is defined in the Code, now
owned or hereafter acquired by the Borrower, and including, without limitation,
machinery, furniture, furnishings, and fixtures, and any and all goods used or
bought for use in or being used in the conduct of the Borrower's business which
are not included within the definition of Inventory, and all accessions and
additions thereto, and replacements therefor.
"ERISA" means the Employee Retirement Income Security Act of 1974 (or any
successor legislation thereto), as amended from time to time, and all rules,
regulations and published interpretations promulgated pursuant thereto, as the
same may be supplemented or amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Borrower and which, together with
the Borrower, would be treated as a single employer under Section 4001 of ERISA.
"Event of Default" means any of the events specified in Section 9.1.
"Facilities" means Loan A, Loan B and Loan C.
"Federal Funds Rate" means, for any day, the rate per annum (rounded, if
necessary, to the next greater 1/16 of 1%) equal to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or
if such day is not a Business Day, for the next preceding Business Day)
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by the Federal Reserve Bank of New York, or if such rate is not so published
for any day which is a Business Day, the average of such notations for such day
on such transactions received by the Agent from three Federal funds brokers of
recognized standing selected by the Agent.
"Fees" means the Commitment Fee, the Unused Line Fee, and the Letter of
Credit Fees.
"Financial Asset" means all "financial assets" as such term is defined in
the Code, now owned or hereafter acquired by the Borrower, wherever located.
"Fixtures" means all "fixtures" as such term is defined in the Code, now
owned or hereafter acquired by the Borrower.
"GAAP" means, (i) other than as provided below, generally accepted
accounting principles in the United States as in effect from time to time,
applied on a consistent basis, and (ii) when used in Article 7, whether directly
or indirectly through reference to a capitalized term used or defined therein,
principles that are consistent with the principles promulgated or adopted by the
Financial Accounting Standards Board and its predecessors, in effect for the
fiscal year of the Borrower ended on December 31, 2002.
"General Intangibles" means all "general intangibles," as such term is
defined in the Code, now owned or hereafter acquired by the Borrower, including
all right, title and interest which the Borrower may now or hereafter have in or
under any Contract, Intellectual Property, interests in partnerships, joint
ventures and other business associations, permits, proprietary or confidential
information, inventions (whether or not patented or patentable), technical
information, procedures, designs, knowledge, know-how, Software, data bases,
data, skill, expertise, experience, processes, models, drawings, materials,
Books and Records, Goodwill (including the Goodwill associated with any
Intellectual Property), all rights and claims in or under insurance policies
(including insurance for fire, damage, loss, and casualty, whether covering
personal property, real property, tangible rights or intangible rights, all
liability, life, key-person, and business interruption insurance, and all
unearned premiums), Uncertificated Securities, choses in action, deposit
accounts, rights to receive tax refunds and other payments, rights to receive
dividends, distributions, cash Instruments and other property in respect of or
in exchange for pledged Stock and Investment Property and rights of
indemnification.
"Goods" means all "goods," as such term is defined in the Code, now owned
or hereafter acquired by the Borrower, wherever located.
"Goodwill" means all goodwill, trade secrets, proprietary or confidential
information, technical information, procedures, formulae, quality control
standards, designs, operating and training manuals, customer lists, and
distribution agreements now owned or hereafter acquired by the Borrower.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory, or administrative functions of or pertaining
to government.
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"Guaranteed Indebtedness" means any obligation of the Borrower or any
Guarantor guaranteeing any indebtedness, lease, dividend, or other obligation
("primary obligations") of any other Person (the "primary obligor") in any
manner, including, without limitation, any obligation or arrangement of the
Borrower or any Guarantor (whether or not contingent): (i) to purchase or
repurchase any such primary obligation; (ii) to advance or supply funds (a) for
the purchase or payment of any such primary obligation or (b) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet condition of the primary
obligor; (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation; or (iv) to
indemnify the owner of such primary obligation against loss in respect thereof.
"Guarantor Security Agreement" means the Guarantor Security Agreement
dated the date hereof by and among the Lenders and the Secured Guarantors.
"Guarantors" means all of the Subsidiaries listed on Schedule 1 attached
hereto.
"Guaranty" means the Unlimited Guaranty of each of the Guarantors in the
form of Exhibit E attached hereto.
"Head Office" means the office of the Agent located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
"Health-care Insurance Receivables" means all "healthcare insurance
receivables," as such term is defined in the Code, in which Borrower now has an
interest or a claim, or hereafter acquires such interest or claim.
"Indebtedness" of the Borrower or any Guarantor means: (i) all
indebtedness for borrowed money or for the deferred purchase price of property
or services (including reimbursement and all other obligations with respect to
surety bonds, letters of credit and bankers' acceptances, whether or not
matured, but not including obligations to trade creditors incurred in the
ordinary course of business; (ii) all obligations evidenced by notes, bonds,
debentures or similar instruments; (iii) all indebtedness created or arising
under any conditional sale or other title retention agreements with respect to
property acquired (even though the rights and remedies of the seller or lender
under such agreement in the event of default are limited to repossession or sale
of such property); (iv) all Capital Lease Obligations; (v) all Guaranteed
Indebtedness; (vi) all Indebtedness referred to in clauses (i), (ii), (iii),
(iv) or (v) above secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any Lien upon or
in property (including accounts and contract rights) owned by the Borrower or
such Guarantor, even though the Borrower or such Guarantor has not assumed or
become liable for the payment of such indebtedness; (vii) the Obligations;
(viii) all liabilities under Title IV of ERISA; and (ix) all indebtedness
referred to in clauses (i) through (viii) above of any partnership of which the
Borrower or such Guarantor is a general partner.
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"Insolvent" or "Insolvency" means the inability to pay debts as they
mature or the fair market value of assets being less than a Person's
liabilities.
"Instruments" means all "instruments," as such term is defined in the
Code, now owned or hereafter acquired by the Borrower, wherever located.
"Intellectual Property" means any and all Licenses, Patents, Copyrights,
Trademarks, trade secrets and customer lists.
"Interest Expense" has the meaning set forth in Section 7.5(f).
"Interest Period" means in the case of any LIBOR Rate Loan, the one, two,
three, or six month period selected by the Borrower pursuant to this Agreement.
Each Interest Period shall commence on the date such Loan is made or the date of
a subsequent interest rate election, as the case may be, and shall end on such
date as the Borrower may select in accordance with the above, provided, that:
(i) any Interest Period which would otherwise end on a day which is not
a Business Day shall end on the next succeeding Business Day unless
such next succeeding Business Day would fall in the next calendar
month, in which case such Interest Period shall end on the next
preceding Business Day;
(ii) each Interest Period which commences before and would otherwise end
after the Maturity Date, shall end on the Maturity Date; and
(iii) any Interest Period which begins on a day for which there is no
numerically corresponding day in the calendar month during which
such Interest Period is to end, shall (subject to clause (i) above)
end on the last day of such calendar month.
"Inventory" means all "inventory" as such term is defined in the Code, now
owned or hereafter acquired by the Borrower or any Secured Guarantor, wherever
located.
"Investment Property" means all "investment property" as such term is
defined in the Code, now owned or hereafter acquired by the Borrower, wherever
located.
"Issuing Lender" means any Lender.
"L/C Sublimit" means $2,500,000.
"Lender Default" means (i) the refusal (which has not been retracted) or
the failure of a Lender to make available its portion of any borrowing in
violation of the requirements of this Agreement or to fund its portion of any
unreimbursed payment under Section 2.19 or (ii) a Lender having notified in
writing the Agent that such Lender does not intend to comply with its
obligations under Sections 2.1, 2.2A or 2.2B.
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"Lender Parties" has the meaning set forth in Section 11.5(b).
"Lenders" means People's and BNY, and any successors, assigns or holders
of all or any part of the Obligations of the Borrower hereunder and under the
other Loan Documents.
"Letter of Credit" means each commercial letter of credit issued by the
Issuing Lender for the account of the Borrower pursuant to Section 2.18 for the
purchase of goods in the ordinary course of business.
"Letter of Credit Application" has the meaning set forth in Section
2.18(b).
"Letter of Credit Fees" has the meaning set forth in Section 2.18(f).
"Letter of Credit Obligations" means all outstanding obligations
(including all duty, freight, Taxes, costs, insurance and any other charges and
expenses) incurred by Lenders, whether direct or indirect, contingent or
otherwise, due or not due, in connection with the issuance by Lenders of Letters
of Credit.
"Letter-of-Credit Rights" means "letter-of-credit rights" as such term is
defined in the Code, now owned or hereafter acquired by the Borrower.
"Leverage Ratio" has the meaning set forth in Section 7.4.
"LIBOR" means, as applicable to any LIBOR Rate Loan, for the then current
Interest Period relating thereto, the rate per annum determined by Agent to be
the prevailing rate of interest available to People's as determined on the basis
of the offered rates for deposits in Dollars by first class banks in the London
interbank market, comparable to such LIBOR Rate Loan which appears on the
Telerate page 3750 as of 11:00 a.m. (London time) on the day that is two (2)
London Banking Days preceding the first day of such Interest Period; provided,
however, if the rate described above does not appear on the Telerate System on
any applicable interest determination date, LIBOR shall be the rate for deposits
in Dollars for a period substantially equal to such Interest Period on the
Reuters Page "LIBO" (or such other page as may replace the LIBO Page on that
service for the purpose of displaying such rates), as of 11:00 a.m. (London
Time), on the day that is two (2) London Banking Days prior to the beginning of
such Interest Period.
"LIBOR Rate Loan" means any Revolving Loan or principal portion of any
other Loan that bears interest with reference to LIBOR.
"LIBOR Rate Margin" means the percentage determined in accordance with
Section 2.3(a).
"License" means any Copyright License, Patent License, Trademark License
or other license of rights or interests now held or acquired by the Borrower.
"Lien" means any mortgage, security deed or deed of trust, pledge,
hypothecation,
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assignment, deposit arrangement, lien, charge, claim, Security Interest,
security title, easement or encumbrance, or preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
(including any lease or title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement perfecting a Security
Interest under the Code or comparable law of any jurisdiction).
"Loan A" means the term loan facility extended by Lenders to the Borrower
in the original principal amount of $7,000,000, evidenced by (i) a Term Loan A
Promissory Note in the original principal amount of $4,666,666.67 payable to the
order of People's, and (ii) a Term Loan A Promissory Note in the original
principal amount of $2,333,333.33 payable to the order of BNY.
"Loan B" means the term loan facility extended by Lenders to the Borrower
in the original principal amount of $10,000,000, evidenced by (i) a Term Loan B
Promissory Note in the original principal amount of $6,666,666.67 payable to the
order of People's, and (ii) a Term Loan B Promissory Note in the original
principal amount of $3,333,333.33 payable to the order of BNY.
"Loan C" means the revolving loan facility extended by Lenders to the
Borrower in the original principal amount of up to $5,000,000, the loans under
which are evidenced by (i) a Commercial Revolving Loan Promissory Note in the
original principal amount of up to $3,333,333.33 payable to the order of
People's, and (ii) a Commercial Revolving Loan Promissory Note in the original
principal amount of up to $1,666,666.67 payable to the order of BNY.
"Loan Documents" means this Agreement, the Notes, the Mortgage, the
Unlimited Guaranty, the Guarantor Security Agreement, the Letters of Credit, and
all other agreements or documents, whenever executed and delivered to Lenders,
with respect to the transactions contemplated by this Agreement, together with
any amendments, supplements or modifications hereto or thereto.
"Loans" means Term Loan A, Term Loan B and the Revolving Loans.
"London Banking Day" means any date on which commercial banks are open for
business in London, England.
"Make-Whole Premium" means the present value of the interest expense
incurred by a Lender in funding the portion of indebtedness evidenced by the
applicable Note which bears interest at the per annum rate of interest for the
Interest Period then in effect, less the present value of the interest on the
reinvested principal prepaid for the remainder of such Interest Period then in
effect, at the Reinvestment Rate, plus any other expenses that Lender may
sustain or incur by reason of the prepayment; provided that any negative value
resulting from the foregoing calculation will be disregarded.
"Margins" means the LIBOR Rate Margin and the Base Rate Margin.
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"Material Adverse Effect" means, with respect to any event, act, condition
or occurrence of whatever nature (including any adverse determination in any
litigation, arbitration, or governmental investigation or proceeding in excess
of $2 million), whether singly or in conjunction with any other event or events,
act or acts, condition or conditions, occurrence or occurrences, whether or not
related, a material adverse change in, or a material adverse effect upon, any of
(i) the condition (financial or otherwise), operations, business, properties or
prospects of the Borrower and its Subsidiaries taken as a whole; (ii) the rights
and remedies of the Agent and the Lenders hereunder or under any of the other
Loan Documents, or the ability of the Borrower or any Guarantor to perform any
of the Obligations; (iii) the Collateral or Lenders' Liens on the Collateral or
the priority of any such Lien, or (iv) the legality, validity or enforceability
of this Agreement or any of the other Loan Documents.
"Maturity Date" means September 30, 2005.
"Mortgage" has the meaning set forth in Article 8.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate is making or
accruing an obligation to make, contributions or has within any of the preceding
five plan years made or accrued an obligation to make contributions.
"Negotiable Instruments" means all "negotiable instruments" as such term
is defined in the Code, now owned or hereafter acquired by the Borrower,
wherever located.
"Non-Defaulting Lender" means and includes each Lender other than a
Defaulting Lender.
"Notes" means collectively the Term Loan A Notes, the Term Loan B Notes
and the Revolving Loan Notes.
"Obligations" means all present and future indebtedness and other
liabilities of the Borrower owing to the Agent or any Lender or any of their
respective successors, transferees or assigns, of every type and description,
whether or not evidenced by any note, guaranty or other instrument, arising
under or in connection with this Agreement, the Notes or any other Loan
Document, whether or not for the payment of money, whether direct or indirect
(including those acquired by assignment), absolute or contingent, due or to
become due, now existing or hereafter arising and however acquired, including,
but not limited to, all reasonable costs, expenses, fees, charges and
attorneys', paralegals' and other professional fees incurred in connection with
any of the foregoing, or in any way connected with, involving or relating to the
preservation, enforcement, protection and defense of this Agreement, the Notes,
the other Loan Documents, any related agreement, document or instrument, the
Collateral and the rights and remedies hereunder or thereunder.
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"Patent License" means rights under any written agreement now owned or
hereafter acquired by the Borrower granting any right with respect to any
invention on which a Patent is in existence.
"Patents" means all of the following in which the Borrower now holds or
hereafter acquires any interest: (i) all letters patent of the United States or
any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or any other country,
including registrations, recordings and applications in the United States Patent
and Trademark Office or in any similar office or agency of the United States,
any state or territory thereof, or any other country; and (ii) all reissues,
continuations, continuations-in-part or extensions thereof.
"Payment Intangibles" means all "payment intangibles" as such term is
defined in the Code, now owned or hereafter acquired by the Borrower.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Acquisition" means an acquisition by the Borrower or any of its
Subsidiaries of the assets or capital stock of a Person that satisfies the
requirements of Section 5.14.
"Permitted Encumbrances" means (i) pledges or deposits in connection with
or to secure worker's compensation, employment or liability insurance, (ii) tax
liens which are being contested in good faith and in compliance with this
Agreement, (iii) pledges or deposits securing bids, tenders, contracts (other
than contracts for the payment of money) or leases to which the Borrower is a
party as lessee in the ordinary course of business; (iv) deposits securing
public or statutory obligations of the Borrower; (v) inchoate and unperfected
workers', mechanics', suppliers' or similar liens arising in the ordinary course
of business; (vi) carriers', warehousemen's or other similar possessory liens
arising in the ordinary course of business and securing indebtedness not yet due
and payable in an outstanding aggregate amount not in excess of $100,000 in the
aggregate at any time; (vii) deposits securing, or in lieu of, surety, appeal or
customs bonds in proceedings to which the Borrower is a party; (viii) any
attachment or judgment lien, unless the judgment it secures shall not, within
sixty (60) days after the entry thereof, have been discharged or execution
thereof stayed pending appeal, or shall not have been discharged within thirty
(30) days after the expiration of any such stay; (ix) zoning restrictions,
easement licenses, or other restrictions on the use of real property or other
minor irregularities in title (including leasehold title) thereto, so long as
the same do not materially impair the use, value, or marketability of such real
property, leases or leasehold estates, (x) liens, mortgages or security
interests in connection with purchase money indebtedness incurred in the
ordinary course of business, (xi) liens, mortgages or security interests in
connection with the financing, purchase, construction, or lease of movie
theatres upon reasonable notice to Lenders, and (xii) the Liens set forth on the
attached Schedule 6.1(e).
"Person" means any individual, sole proprietorship, partnership,
corporation, limited liability company, business trust, joint stock company,
trust, unincorporated organization,
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association, joint venture, public benefit corporation, institution,
Governmental Authority, or other entity of any nature whatsoever.
"Plan" means any plan established, maintained, or to which contributions
have been made by the Borrower or any ERISA Affiliate for the benefit of any of
their employees covered by Title 10 of ERISA.
"Proceeds" means all "proceeds" as such term is defined in the Code, now
owned or hereafter acquired by the Borrower, wherever located.
"Prohibited Transaction" means any transaction set forth in Section 406 of
ERISA or Section 4975 of the Internal Revenue Code of 1986, as amended from time
to time.
"Promissory Note" means any "promissory note" as such term is defined in
the Code, now owned or hereafter acquired by the Borrower wherever located.
"Property" means that certain real property owned by the Borrower and
located at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, together with all
improvements thereon.
"Register" has the meaning set forth in Section 11.20.
"Reimbursement Obligations" has the meaning set forth in Section 2.18(e).
"Reinvestment Rate" means the rate available to any Lender as determined
by such Lender in its sole discretion for the investment of principal amounts
prepaid pursuant to Sections 2.1(d), 2.2A(d) and 2.2B(d) in U.S. Treasury
obligations as offered by such Lender in it sole discretion for the approximate
remaining term of the Interest Period then in effect as of the date of such
prepayment.
"Release" means any spilling, leaking, migrating, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping, or
disposing into the environment of any Contaminant.
"Reportable Event" means any of the events set forth in Section 4043 of
ERISA.
"Revolving Loan" and "Revolving Loans" have the meanings set forth in
Section 2.1.
"Revolving Loan Account" means the Borrower's loan account maintained with
the Agent as more fully described in Section 2.1(a).
"Revolving Loan Commitment" means, for each Lender, the amount set forth
opposite such Lender's name in Schedule 2 directly below the column entitled
"Revolving Loan Commitment" and in the aggregate, as set forth in Schedule 2
below such column in the row entitled "Total", as same may be (x) reduced from
time to time or (y) adjusted from time to time as a result of assignments to or
from such Lender pursuant to Section 11.4.
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"Revolving Loan Note" has the meaning set forth in Section 2.1(b).
"SEC" means the United States Securities and Exchange Commission.
"Secured Guarantors" means (i) Trans-Lux Display Corporation, a Delaware
corporation, (ii) Trans-Lux Midwest Corporation, an Iowa corporation, and (iii)
Trans-Lux West Corporation, a Utah corporation.
"Securities Accounts" means all "securities accounts" as such term is
defined in the Code, now or hereafter held in the name of the Borrower.
"Security" means any "security" as such term is defined in the Code, now
owned or hereafter acquired by the Borrower.
"Security Documents" means this Agreement, the Mortgage, the Guarantor
Security Agreement, all assignments of contracts, documents or instruments in
favor of the Lenders, and all other documents, contracts, assignments,
instruments and the like now or hereafter securing the Obligations.
"Security Entitlement" means any "security entitlement" as such term is
defined in the Code, in or under which the Borrower may now or hereafter have
any rights, title or interest.
"Security Interest" means a valid and enforceable first priority lien
upon, pledge of, and security interest in the Collateral.
"Senior Debt" has the meaning set forth in Section 7.5(g).
"Software" means all "software" as such term is defined in the Code, now
owned or hereafter acquired by the Borrower.
"Solvent" means, as to any Person, that such Person (a) has capital
sufficient to carry on its business and transactions and all business and
transactions in which it is about to engage; (b) is able to pay its debts as
they mature; and (c) owns property whose fair salable value is greater than the
amount required to pay its debts.
"Stock" means all certificated and uncertificated shares, options,
warrants, general or limited partnership interests, membership interests,
participation or other equivalents (regardless of how designated) of or in a
corporation, partnership, limited liability company or equivalent entity whether
voting or nonvoting, including common stock, preferred stock, or any other
"equity security" (as such term is defined in Rule 3a11-1 of the General Rules
and Regulations promulgated by the SEC under the Securities Exchange Act of
1934, as amended).
"Subordinated Debentures" means those certain 9.5% Subordinated Debentures
due 2012 of the Borrower.
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"Subordinated Debt" means Indebtedness of the Borrower which is
subordinate in payment and priority to the Debt on terms and conditions and
pursuant to subordination agreements satisfactory to the Lenders in their sole
discretion, including, but not limited to, the Subordinated Notes and the
Subordinated Debentures.
"Subordinated Notes" means those certain 7.5% Convertible Subordinated
Notes due 2006 of the Borrower.
"Subsidiary" means any corporation, partnership, limited liability
company, business trust, joint stock company, unincorporated association or
joint venture of which more than fifty (50%) percent of the outstanding equity
interests of each class having ordinary voting power is at the time owned by the
Borrower and/or one or more Subsidiaries.
"Supporting Obligations" means all "supporting obligations" as such term
is defined in the Code, now owned or hereunder acquired by the Borrower,
wherever located.
"Tangible Chattel Paper" means all "tangible chattel paper" as such term
is defined in the Code, now owned or hereafter acquired by the Borrower,
wherever located.
"Tangible Net Worth" has the meaning set forth in Section 7.5(i).
"Taxes" means taxes, levies, imposts, deductions, Charges or withholdings,
and all liabilities with respect thereto, excluding taxes imposed on or measured
by the net income of any Lender by the jurisdiction in which its principal
office is located.
"Term Loan A" has the meaning set forth in Section 2.2A(a).
"Term Loan B" has the meaning set forth in 2.2B(a).
"Term Loan A Note" has the meaning set forth in Section 2.2A(b).
"Term Note B Note" has the meaning set forth in Section 2.2B(b).
"Term Loan Commitment" means, for each Lender, the amounts set forth
opposite such Lender's name in Schedule 2 directly below the columns entitled
"Term Loan A Commitment" and "Term Loan B Commitment", and in the aggregate, as
set forth in Schedule 2 below such columns in the row entitled "Total" as the
same may be adjusted from time to time as a result of assignments to or from
such Lender pursuant to Section 11.4.
"Term Loans" means Term Loan A and Term Loan B.
"Trademark License" means rights under any written agreement now owned or
hereafter acquired by the Borrower granting any right to use any Trademark or
Trademark registration.
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"Trademarks" means all of the following now owned or hereafter acquired by
the Borrower: (i) all trademarks, trade names, corporate names, business names,
trade styles, service marks, logos, other source or business identifiers, prints
and labels on which any of the foregoing have appeared or appear, designs and
general intangibles of like nature (whether registered or unregistered), all
registrations and recordings thereof, and all applications in connection
therewith, including all registrations, recordings and applications in the
United States Patent and Trademark Office or in any similar office or agency of
the United States, any state or territory thereof, or any other country or any
political subdivision thereof, (ii) all reissues, extensions or renewals
thereof, and (iii) all goodwill associated with or symbolized by any of the
foregoing.
"Transaction Expenses" means all reasonable legal, search and filing fees,
and all other reasonable expenses that may be incurred or sustained by the
Lenders or any of their authorized agents in connection with the transaction
contemplated herein, whether or not such transaction is consummated, including,
without limitation, expenses related to due diligence efforts and the
negotiation and preparation of this Agreement and the other Loan Documents, in
perfecting, preserving and enforcing the Lenders' Security Interests, and in
rendering advice with respect to this Agreement, the other Loan Documents and
the Loans. The Lenders acknowledge that the fees of their counsel in connection
with the closing of this transaction will not exceed $40,000 plus disbursements.
"Type" refers to whether a Loan is a Base Rate Loan or LIBOR Rate Loan.
"Uncertificated Securities" means all "uncertificated securities" as such
term is defined in the Code, now or hereafter acquired by the Borrower.
"Unused Line Fee" has the meaning set forth in Section 2.1(e).
Section 1.2 Terms Generally tc \l3 "Section 1.2 Terms Generally .
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
All references herein to Articles, Sections, Exhibits and Schedules shall be
deemed references to Articles and Sections of, and Exhibits and Schedules to,
this Agreement unless the context shall otherwise require. Except as otherwise
expressly provided herein, (a) any reference in this Agreement to any Loan
Document shall mean such document as amended, restated, supplemented or
otherwise modified from time to time, and (b) all terms of an accounting or
financial nature shall be construed in accordance with GAAP, as in effect from
time to time.
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ARTICLE 2
AMOUNTS AND TERMS OF THE LOANS
A. THE LOANS
Section 2.1 Revolving Loan.
(a) Subject to the terms and conditions set forth in this Agreement,
Lenders severally, but not jointly, agree to make revolving loans (each a
"Revolving Loan" and collectively "Revolving Loans") to the Borrower from time
to time during the period from the date of this Agreement up to, but not
including, the Maturity Date; provided, however, that at no time shall the
aggregate outstanding principal balance of all Revolving Loans plus the
Available Amount plus any unpaid Reimbursement Obligations exceed the Borrowing
Base as in effect prior to the making of such Revolving Loan. So long as (i)
the Borrower is in compliance with all the terms and conditions of this
Agreement, (ii) no Default or Event of Default has occurred and is continuing
(whether or not Lenders have accelerated payment of the Loans) or would result,
and (iii) all other conditions set forth in Article 3 have been satisfied, the
Borrower may borrow, pay, prepay (pursuant to Section 2.1(d)), and re-borrow
under this Section 2.1.
(b) The Revolving Loans shall be evidenced by, and repaid with interest in
accordance with, two promissory notes of the Borrower, each substantially in the
forms of Exhibits A-1 and A-2 hereto (each such promissory note is referred to
herein as a "Revolving Loan Note"). The Revolving Note issued to each Lender
shall (i) be executed by the Borrower, (ii) be payable to such Lender and be
dated the date of this Agreement, (iii) be in a stated principal amount equal to
the Revolving Loan Commitment of such Lender, and be payable in the outstanding
principal amount of the Revolving Loans evidenced thereby, (iv) mature on the
Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 2.3 in respect of the Base Rate Loans and LIBOR Rate Loans, as the case
may be, evidenced thereby, and (vi) be entitled to the benefits of this
Agreement and the other Loan Documents. The Borrower hereby authorizes each
Lender to record on its Revolving Loan Note or in its internal computerized
records the amount of each Revolving Loan and of each payment of principal
received by such Lender on account of the Revolving Loans, which recordation
shall, in the absence of manifest error, be conclusive as to the outstanding
principal balance of the Revolving Loans evidenced thereby and shall be
considered correct and binding on the Borrower provided, however, that the
failure to make such recordation with respect to any Revolving Loan or payment
shall not limit or otherwise affect the obligations of the Borrower under this
Agreement or any Revolving Loan Note.
(c) The Borrower shall establish a loan account with Agent which account
shall be deemed to be the Revolving Loan Account. Insofar as the Borrower may
request and the Lenders shall make Revolving Loans hereunder, the Agent shall
enter such loans as debits to the Revolving Loan Account and shall deposit such
loans in the operating account of the Borrower maintained with the Agent. The
Agent shall also record in the Revolving Loan Account, in accordance with
customary accounting procedures, (i) all other charges, expenses and other Liens
properly chargeable to the Borrower for which the Agent debits the Revolving
Loan Account, (ii) all
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payments made on account of the Revolving Loans, (iii) all proceeds of
Collateral which are finally paid to the Agent in its office in cash, and (iv)
other appropriate debits and credits. The Revolving Loan Account shall reflect
the amount of the Borrower's Indebtedness to the Lenders from time to time by
reason of the Revolving Loans less Revolving Loan repayments, and other
appropriate charges hereunder.
(d) The Borrower may prepay the Revolving Loans, in whole or in part,
together with accrued interest to the date of prepayment on the amount prepaid
(i) with respect to any principal portion that bears interest with reference to
the Base Rate, on any Business Day, without Make- Whole Premium, and (ii) with
respect to any principal portion that bears interest with reference to LIBOR
either (1) on the last Business Day of the Interest Period applicable to the
portion being prepaid, without Make-Whole Premium or (2) on any other Business
Day, together with the Make- Whole Premium.
(e) The Borrower shall pay to the Agent, for the pro rata account of the
Lenders in accordance with their respective Revolving Loan Commitments, a fee
(the "Unused Line Fee") equal to the rate per annum specified for the Unused
Line Fee (bps) in the table in Section 2.3 times the average daily unused
portion of the Revolving Loan Commitments for the period from the Closing Date
through and including the Maturity Date or any earlier date of termination in
full of the Revolving Loan Commitments. The Unused Line Fee shall be payable
quarterly in arrears within ten (10) days of the end of each fiscal quarter of
the Borrower and on the Maturity Date or any earlier date of termination in full
of the Revolving Loan Commitments.
Section 2.2A Term Loan A.
(a) Subject to the terms and conditions set forth in this Agreement, the
Lenders shall, on the date hereof, severally, but not jointly, make a term loan
to the Borrower ("Term Loan A") in an original principal amount of Seven Million
($7,000,000) Dollars.
(b) Term Loan A shall be evidenced by, and repaid in accordance with, two
promissory notes of the Borrower, each substantially in the forms attached
hereto as Exhibits B-1 and B-2 (each such note a "Term Loan A Note"). The Term
Loan A Note issued to each Lender shall (i) be executed by the Borrower, (ii) be
payable to such Lender and be dated the date hereof, (iii) be in a stated
principal amount equal to the Term Loan A Commitment of such Lender and be
payable as provided in Section 2.2A(c), (iv) mature on the Maturity Date, (v)
bear interest as provided in the appropriate clause of Section 2.3 in respect of
the Base Rate or LIBOR, as the case may be, and (vi) be entitled to the benefits
of this Agreement and the other Loan Documents.
(c) The Borrower shall make equal quarterly payments under the Term Loan A
Notes of principal plus accrued interest in accordance with a fifteen year
amortization schedule, commencing April 1, 2003 and continuing on the first
Business Day of each succeeding fiscal quarter thereafter through and including
September 1, 2005 until the outstanding principal amount of Term Loan A,
together with all interest accrued thereon, has been fully paid, except that if
not sooner paid, the principal amount, together with all accrued but unpaid
interest thereon, shall be due and payable on the Maturity Date.
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(d) The Borrower may prepay any portion of the outstanding principal of
Term Loan A, in whole or in part, together with accrued interest to the date of
such prepayment on the amount prepaid and all amounts required pursuant to
Section 2.15, (i) with respect to any principal portion that bears interest with
reference to the Base Rate, on any Business Day, without the Make-Whole Premium,
and (ii) with respect to any principal portion that bears interest with
reference to LIBOR either (1) on the last Business Day of the Interest Period
applicable to the portion of Term Loan A being prepaid, without the Make-Whole
Premium or (2) on any other Business Day, together with the Make-Whole Premium.
All prepayments of Term Loan A shall be applied first to payment of the next
installment due thereunder and then to the rest of the installments thereof in
the inverse order of their maturity.
Section 2.2B Term Loan B.
(a) Subject to the terms and conditions set forth in this Agreement, the
Lenders shall, on the date hereof, severally, but not jointly, make a term loan
to the Borrower ("Term Loan B") (Term Loan A and Term Loan B are collectively
referred to herein as the "Term Loans") in an original principal amount of Ten
Million Dollars ($10,000,000).
(b) Term Loan B shall be evidenced by, and repaid in accordance with, two
promissory notes of the Borrower, each substantially in the forms attached
hereto as Exhibit C-1 and C-2 (each such note a "Term Loan B Note"). The Term
Loan B Note issued to each Lender shall (i) be executed by the Borrower, (ii) be
payable to such Lender and be dated the date hereof, (iii) be in a stated
principal amount equal to the Term Loan B Commitment of such Lender and be
payable as provided in Section 2.2B(c), (iv) mature on the Maturity Date, (v)
bear interest as provided in the appropriate clause of Section 2.3 in respect of
the Base Rate or LIBOR, as the case may be, and (vi) be entitled to the benefits
of this Agreement and the other Loan Documents.
(c) Commencing April 1, 2003 and continuing on the first Business Day of
each succeeding fiscal quarter thereafter, the Borrower shall make equal
quarterly payments of principal, plus accrued interest, in accordance with a
seven year amortization schedule, until the outstanding principal amount of the
Term Loan B Notes, together with all interest accrued thereon, has been fully
paid, except that if not sooner paid, the principal amount, together with all
accrued but unpaid interest thereon, shall be due and payable on the Maturity
Date.
(d) The Borrower may prepay any portion of the outstanding principal of
Term Loan B, in whole or in part, together with accrued interest to the date of
such prepayment on the amount prepaid and all amounts required under Section
2.15, (i) with respect to any principal portion that bears interest with
reference to the Base Rate, on any Business Day, without the Make-Whole Premium,
and (ii) with respect to any principal portion that bears interest with
reference to LIBOR either (1) on the last Business Day of the Interest Period
applicable to the portion of Term Loan B being prepaid, without the Make-Whole
Premium or (2) on any other Business Day, together with the Make-Whole Premium.
All prepayments of Term Loan B shall be applied first to the next installment
thereunder and then to payment of the rest of the installments thereof in the
inverse order of their maturity.
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Section 2.3 Interest Provisions
(a) Commencing with the first such date following the date of this
Agreement, the Borrower promises to pay interest to the Agent, on the
outstanding and unpaid principal balances of each of the Revolving Loans and
Term Loans, at a rate per annum equal to, at the option of the Borrower, (i) the
Base Rate plus the Base Rate Margin or (ii) LIBOR plus the LIBOR Rate Margin.
The Base Rate Margin and the LIBOR Rate Margin shall be as follows based upon
the Leverage Ratio as of the end of the most recent fiscal quarter of the
Borrower for which financial statements have been delivered hereunder:
----------------------------------------------------------------------------
| | | Applicable | | |
|Pricing Level | Leverage Ratio | LIBOR | Unused Line | Optional Base|
| | | Margin (bps) | Fee (bps) | Rate Margin |
|--------------|----------------|---------------|-------------|--------------|
| | | | | |
| 1 | =>3.00x | 275 | 35 bps | 0.25% |
|--------------|----------------|---------------|-------------|--------------|
| | | | | |
| 2 |=>2.25x<3.00x | 250 | 30 bps | 0.00% |
|--------------|----------------|---------------|-------------|--------------|
| | | | | |
| 3 |=>1.50x<2.25x | 225 | 25 bps | 0.00% |
|--------------|----------------|---------------|-------------|--------------|
| | | | | |
| 4 | <1.50x | 175 | 25 bps | 0.00% |
|--------------|----------------|---------------|-------------|--------------|
Changes in the Margins resulting from a change in the above ratios shall
become effective on the due date of delivery by the Borrower of a Certificate of
Compliance evidencing such change. If the Borrower shall fail to deliver a
Certificate of Compliance within five days of the due date thereof in accordance
with Section 5.8(c), the LIBOR Rate Margin shall be 275 basis points, and the
Base Rate Margin shall be one-quarter percent (0.25%) from the day such
Certificate of Compliance was due until the day a Certificate of Compliance
evidencing a lower LIBOR Rate Margin or Base Rate Margin, as the case may be, is
actually delivered to the Lenders. Each Loan shall be comprised entirely of a
Base Rate Loan or a LIBOR Rate Loan as the Borrower may request pursuant to
Section 2.4. The Borrower shall not be entitled to request any Loan which, if
made, would result in more than twenty (20) LIBOR Rate Loans outstanding
hereunder at any time. For purposes of the foregoing, LIBOR Rate Loans having
different Interest Periods, regardless of whether they commence on the same
date, shall be considered separate LIBOR Rate Loans. Each LIBOR Rate Loan shall
be in a minimum principal amount of $300,000 and there are no required
increments thereafter. As of the date of this Agreement, the LIBOR Rate Margin
is 250 basis points and the Base Rate Margin is zero percent (0%).
Interest payments shall be made (i) in the case of Base Rate Loans, on the
first Business Day of each fiscal quarter in arrears, and (ii) in the case of
LIBOR Rate Loans, on the last day of each applicable Interest Period, or in the
case of Interest Periods having a duration of more than three (3) months, on
each three-month anniversary date of the commencement of such Interest Period.
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(b) The interest rate on each Base Rate Loan shall change when and as the
Base Rate changes. Any change in the interest rate resulting from a change in
the Base Rate shall become effective as of the opening of business on the day on
which such change in the Base Rate shall become effective.
(c) Overdue principal and interest and, upon the occurrence and during the
continuance of an Event of Default, after a period of five (5) days all
principal and accrued but unpaid interest shall bear interest until paid in
full, payable on demand, at the Default Rate.
(d) The Agent may collect for the ratable benefit of the Lenders a "late
charge" equal to five percent (5%) of any installment of interest or principal
or any other amount due hereunder which is not paid or reimbursed by the
Borrower within ten (10) days of the due date thereof to cover the extra expense
involved in handling such delinquent payment.
Section 2.4 Notice and Manner of Borrowing; Conversion or Continuation of
Interest Rate.
(a) The Borrower shall give the Agent irrevocable notice by telephone or
facsimile from an officer of the Borrower (or any Person authorized by the
Borrower pursuant to a written list provided to the Agent) of its request that
the Lenders make a Revolving Loan in a specific amount (each a "Borrowing
Request") not later than 11:00 a.m. Connecticut time (i) in the case of Base
Rate Loans, on the proposed date thereof, and (ii) in the case of LIBOR Rate
Loans, three (3) Business Days prior to the proposed date thereof. Each such
notice shall, in the case of a LIBOR Rate Loan, specify the duration of the
Interest Period therefor. If no election is made in a Borrowing Request as to
the Type applicable to any Revolving Loan, then the requested Revolving Loan
shall be a Base Rate Loan. If no election is made in a Borrowing Request as to
the Interest Period applicable to any requested LIBOR Rate Loan, then the
Interest Period applicable to such requested LIBOR Rate Loan shall (subject to
the provisions contained in the definition of "Interest Period" in Section 1.1)
be one month in duration. Promptly after its receipt of a Borrowing Request,
the Agent shall notify each Lender of the contents of such Borrowing Request and
of such Lender's share of the Revolving Loan requested thereby. On the date
requested by the Borrower for such Revolving Loan, each Lender shall make
available to the Agent, at the Head Office, such Lender's share of such
Revolving Loan. Subject to the fulfillment of the applicable conditions set
forth in Article 3, the Agent will make the proceeds received by it from the
Lenders in respect of such Revolving Loan available to the Borrower on such date
by crediting such proceeds to the Borrower's account with the Agent. The
Borrower agrees to indemnify the Agent and each Lender and hold each of them
harmless from any claims or damages, including, without limitation, reasonable
attorneys' fees, arising as a result of the Agent's or any Lender's acting on
any request which the Agent believes to have been made by any Person authorized
by the Borrower pursuant to a written list provided to the Agent.
(b) Within not less than three (3) Business Days prior to the Closing
Date, Borrower shall give the Agent irrevocable notice by telephone or facsimile
from an officer of the Borrower (or any Person authorized by the Borrower
pursuant to a written list provided to the Agent), of
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its selection of the initial requested interest rate for each of Term Loan A
and Term Loan B. Such notice shall, in the case of a LIBOR Rate Loan, specify
the duration of the Interest Period therefor. If no election is made by the
Borrower prior to the Closing Date as to the Type applicable to Term Loan A or
Term Loan B, then such Term Loan shall be a Base Rate Loan. If no election is
made as to the Interest Period applicable to any requested LIBOR Rate Loan,
then the Interest Period applicable to such requested LIBOR Rate Loan shall
(subject to the provisions contained in the definition of "Interest Period" in
Section 1.1) be one month in duration. Promptly upon receipt of notice from
the Borrower as to the Type applicable to Term Loan A or Term Loan B, the Agent
shall notify each Lender of Borrower's request, and such Lender shall make
available to the Agent, on the Closing Date at the Head Office, such Lender's
Term Loan A Commitment and Term Loan B Commitment. Subject to the fulfillment
of the applicable conditions set forth in Article 3, the Agent will make the
proceeds received by it from the Lenders in respect of the Term Loans available
to the Borrower on the Closing Date by crediting such proceeds to the
Borrower's account with the Agent. The Borrower agrees to indemnify the Agent
and each Lender and hold each of them harmless from any claims or damages,
including, without limitation, reasonable attorneys' fees, arising as a result
of the Agent's or any Lender's acting on any request which the Agent believes
to have been made by any Person authorized by the Borrower pursuant to a
written list provided to the Agent.
(c) The Borrower may (x) on any Business Day, convert any outstanding Base
Rate Loan to a LIBOR Rate Loan in the same aggregate principal amount, (y) on
the last Business Day of the then current Interest Period applicable thereto,
continue any LIBOR Rate Loan as a LIBOR Rate Loan and (z) convert a LIBOR Rate
Loan to a Base Rate Loan on the last Business Day of the then current Interest
Period applicable to such LIBOR Rate Loan; provided, that a Base Rate Loan may
not be converted to a LIBOR Rate Loan and a LIBOR Rate Loan may not be continued
as such if any Default or Event of Default has occurred and is continuing or
there would not be compliance with Section 2.3(a). If the Borrower desires to
convert a Base Rate Loan or a LIBOR Rate Loan or continue a LIBOR Rate Loan
pursuant to this Section 2.4(c), it shall give the Agent (which shall promptly
notify each of the Lenders) not less than three (3) Business Days' prior written
notice, specifying the date of such conversion or continuation, the amount to be
converted or continued and if conversion is from a Base Rate Loan to a LIBOR
Rate Loan or a LIBOR Rate Loan is to be continued, the duration of the Interest
Period therefor. If, not less than three (3) Business Days prior to the end of
the Interest Period then in effect for any LIBOR Rate Loan, the Borrower shall
not have delivered to the Agent (i) a notice requesting conversion of a LIBOR
Rate Loan to a Base Rate Loan in accordance with this Section 2.4(c), (ii) a
notice requesting that such Loan be continued as a Loan of the same Type having
an Interest Period of the same or a different duration than the Interest Period
in effect, in accordance with this Section 2.4(c), or (iii) a notice that such
Loan is to be paid at the end of such Interest Period, then, in each such case,
the Borrower shall be deemed to have delivered a notice that such Loan is to be
converted to a Base Rate Loan pursuant to this Section 2.4(c) and the Agent
shall promptly notify each Lender of such deemed notice.
Section 2.5 Excess Advances. If at any time the aggregate outstanding
principal amount of the Revolving Loans plus the Available Amount plus any
unpaid Reimbursement Obligations exceeds the Borrowing Base, the Borrower shall
immediately prepay the Revolving Loans in the
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amount of such excess, together with accrued interest to the date of prepayment
on the amount prepaid and, with respect to any portion of such prepayment that
bears interest with reference to LIBOR, any Make-Whole Premium.
B. CERTAIN GENERAL PROVISIONS
Section 2.6 Taxes
(a) All payments by the Borrower under the Loan Documents to or for the
account of the Agent or any Lender shall be made without setoff or counterclaim
and free and clear of, and without any deduction or withholding for or on
account of, any and all present or future income, stamp or other taxes, levies,
imposts, duties, fees, assessments, deductions, withholdings, or other charges
of whatever nature, now or hereafter imposed, levied, collected, withheld, or
assessed by any jurisdiction, or by any department, agency, state or other
political subdivision thereof or therein (collectively, "Taxes"), excluding (i)
a Tax on the Income imposed on the Agent or any Lender, and (ii) any interest,
fees, additions to tax or penalties for late payment thereof (each such
non-excluded Tax, an "Indemnified Tax"). For purposes hereof, "Tax on the
Income" shall mean, as to any Person, a Tax imposed by one of the following
jurisdictions or by any political subdivision or taxing authority thereof: (i)
the United States, (ii) the jurisdiction in which such Person is organized, or
(iii) the jurisdiction in which such Person's principal office is located, which
Tax is an income tax or franchise tax imposed on all or part of the net income
or net profits of such Person or which Tax represents interest, fees, or
penalties for late payment of such an income tax or franchise tax. If any such
obligation is imposed upon the Borrower with respect to any amount payable by it
hereunder or under any of the other Loan Documents, the Borrower will pay to
each Lender on the date on which such amount is due and payable hereunder or
under such other Loan Document, such additional amount in Dollars as shall be
necessary to enable such Lender to receive the same net amount which such Lender
would have received on such due date had no such obligation been imposed upon
the Borrower. The Borrower will deliver promptly to the Agent certificates or
other valid vouchers for all taxes or other charges deducted from or paid with
respect to payments made by the Borrower hereunder or under such other Loan
Document.
(b) If the Borrower, the Agent, any Lender or any other Person is required
by any law, rule, regulation, order, directive, treaty or guideline to make any
deduction or withholding (which deduction or withholding would constitute an
Indemnified Tax) from any amount required to be paid by the Borrower to or on
behalf of the Agent or any Lender under any Loan Document, (i) the Borrower
shall pay such Indemnified Tax before the date on which penalties attach
thereto, such payment to be made for its own account (if the liability to pay is
imposed on the Borrower) or on behalf of and in the name of the Agent or any
Lender (if the liability is imposed on the Agent or such Lender, and (ii) the
sum payable to the Agent or such Lender shall be increased as may be necessary
so that after making all required deductions and withholdings (including
deductions and withholdings applicable to additional sums payable under this
Section 2.6) the Agent or such Lender receives an amount equal to the sum it
would have received had no such deductions or withholdings been made.
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(c) The Borrower agrees to pay any current or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies that
arise from any payment made hereunder or from the execution, delivery or
registration of, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of the Loan Documents or otherwise with respect
to, the Loan Documents (collectively, the "Other Taxes").
(d) Within thirty (30) days after the request therefor by the Agent or any
Lender in connection with any payment of Indemnified Taxes or Other Taxes, the
Borrower will furnish to the Agent or such Lender the original or certified copy
of an official receipt from the jurisdiction to which payment is made evidencing
payment thereof or, if unavailable, a certificate from its chief financial
officer or president that states that such payment has been made and that sets
forth the date and amount of such payment.
(e) Each Lender agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its applicable lending office if the making of such a change
would avoid the need for, or reduce the amount of, any such additional amounts
that may thereafter accrue and would not, in its reasonable judgment, be
otherwise disadvantageous to such Lender.
(f) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.6 shall survive the payment in full of Obligations and the
termination of the Commitments.
(g) If requested by the Borrower, the Agent shall use its best efforts to
provide the Borrower with such Internal Revenue Service forms as are reasonably
necessary for the Borrower to fulfill its obligations hereunder, but the failure
of the Agent to provide such forms shall not in any way relieve or postpone the
Borrower's obligations hereunder.
Section 2.7 Computations. All computations of interest on the Loans and
of fees or other charges shall be based on a 360-day year and paid for the
actual number of days elapsed.
Section 2.8 Additional Payments. If any present or future applicable law,
statute, rule or regulation thereunder or any interpretation thereof by any
competent court or by any Governmental Authority charged with the administration
or the interpretation thereof, or any request, directive, instruction or notice
at any time or from time to time hereafter made upon or otherwise issued to the
Agent or any Lender by any central bank or other fiscal, monetary or other
authority (whether or not having the force of law), shall:
(a) subject the Agent or any Lender to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with respect to this
Agreement, the other Loan Documents, any Letters of Credit, any Commitment or
the Loans (other than taxes based upon or measured by the income or profits of
the Agent or such Lender and imposed by the jurisdiction in which its principal
office is located), or
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(b) materially change the basis of taxation (except for changes in taxes
on income or profits imposed by the jurisdiction in which the Agent's or any
Lender's principal office is located) of payments to the Agent or any Lender of
the principal of or the interest on any Loans or any other amounts payable to
the Agent or such Lender under this Agreement or any of the other Loan
Documents, or
(c) impose or increase or render applicable (other than to the extent
specifically provided for elsewhere in this Agreement) any special deposit,
reserve, assessment, liquidity, capital adequacy or other similar requirements
(whether or not having the force of law) against assets held by, or deposits in
or for the account of, or loans by, or letters of credit issued by, or
commitments of an office of the Agent or any Lender, or
(d) impose on the Agent or any Lender any other conditions or requirements
with respect to this Agreement, the other Loan Documents, the Loans, any Letters
of Credit, any Commitment or any class of loans, letters of credit or
commitments of which any of the Loans, any Letters of Credit or any Commitment
forms a part,
and the result of any of the foregoing is
(i) to increase the cost to the Agent or such Lender of making,
funding, issuing, renewing, extending or maintaining the Loans, any
Letters of Credit or any Commitment by an amount the Agent or such Lender
reasonably deems to be material; or
(ii) to reduce the amount of principal, interest, or other amount
payable to the Agent or such Lender hereunder on account of the Loans, any
Letters of Credit or any Commitment by an amount the Agent or such Lender
reasonably deems to be material; or
(iii) to require the Agent or such Lender to make any payment or to
forego any interest or fee or other sum payable hereunder, the amount of
which payment of foregone interest or other sum is calculated by reference
to the gross amount of any sum receivable or deemed received by the Agent
or such Lender from the Borrower hereunder,
then, and in each such case, the Borrower will, upon demand made by the Agent or
such Lender at any time and from time to time and as often as the occasion
therefor may arise, pay to the Agent or such Lender such additional amounts as
will be sufficient to compensate the Agent or such Lender for such additional
cost, reduction, payment, foregone interest or other sum.
Section 2.9 Capital Adequacy. If any Lender shall have determined that
(i) the adoption of or any change in any applicable law, governmental rule,
regulation or order regarding capital adequacy of banks or bank holding
companies, or (ii) any change in the interpretation or administration thereof by
any applicable governmental authority, central bank or comparable agency, or
(iii) compliance by such Lender with any request or directive regarding capital
adequacy, whether or not having the force of law and whether or not failure to
comply therewith would be unlawful, so long as such Lender believes in good
faith that such has the force of law or that the failure to so comply would be
unlawful, has or would have the effect of reducing the
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rate of return on such Lender's capital as a consequence of such Lender's
obligations hereunder to a level below that which such Lender could have
achieved but for such adoption, change or compliance, taking into consideration
such Lender's policies with respect to capital adequacy immediately before such
adoption, change or compliance and assuming that such Lender's capital was
fully utilized prior to such adoption, change or compliance, by an amount
deemed by such Lender in its reasonable judgment to be material, then, upon
demand, the Borrower shall pay immediately to such Lender, from time to time as
specified by such Lender, such additional amounts as shall be sufficient to
compensate such Lender for such reduced return, together with interest on each
such amount from the date of such specification by such Lender until payment in
full thereof at the then current rate of interest applicable to Base Rate
Loans. In determining such amount, each Lender may use any reasonable
averaging and attribution methods.
Section 2.10 Illegality. Notwithstanding any other provision hereof, if,
at any time, it becomes illegal for any Lender to make or maintain any Loan as a
LIBOR Rate Loan, such Lender shall give the Borrower and the Agent written,
telephonic or facsimile notice of such condition. Following such notice and
until such Lender has given the Borrower and the Agent written notice of the
termination of such condition, (a) no LIBOR Rate Loans shall be available
hereunder (and no Lender shall be under any obligation to make or continue, or
to convert any Loans to, LIBOR Rate Loans), (b) all Loans which were to be made
or continued as, or converted to, LIBOR Rate Loans shall instead be made or
continued as, or converted to, Base Rate Loans, and (c) if any Loan is then
outstanding as a LIBOR Rate Loan, the Borrower shall, promptly upon request from
the affected Lender, either prepay such LIBOR Rate Loan in full, together with
accrued interest on the amount prepaid to the date of prepayment, or, at the
Borrower's option, convert such LIBOR Rate Loan to a Base Rate Loan. If any
such prepayment or conversion of a LIBOR Rate Loan is made on a day that is not
the last day of the Interest Period therefor, the Borrower shall compensate each
Lender as provided in Section 2.15 as a result of such prepayment or conversion.
Section 2.11 Certificate; Protection. A certificate setting forth any
amounts payable pursuant to Sections 2.8, 2.9 or 2.15 and a brief explanation of
such amounts which are due, submitted by the Agent or a Lender to the Borrower,
shall be conclusive, absent manifest error, that such amounts are due and owing
and of the amounts due. The protection of Sections 2.8 and 2.9 shall be
available to the Agent and each Lender regardless of any possible contention of
the invalidity or inapplicability of the law, rule, regulation, agreement
guideline or other change or condition which shall have been imposed or shall
have occurred. The obligations of the Borrower under Sections 2.8, 2.9 and 2.15
shall survive the payment in full of the Obligations and the termination of the
Commitments.
Section 2.12 Obligations Absolute. The obligations of the Borrower under
this Agreement shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement and the other Loan
Documents under all circumstances, and irrespective of the following
circumstances:
(a) any lack of validity or enforceability of all or any portion of this
Agreement or any other agreement or any instrument relating hereto;
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(b) any change in the time, manner or place of payment of, or in any other
term of, all or any of the Obligations;
(c) the existence of any claim, setoff, defense or other right that the
Borrower may have; or
(d) any amendment or waiver of or consent to departure from any of the
Loan Documents, or all or any of the Obligations in respect of the Loans or this
Agreement.
C. MISCELLANEOUS
Section 2.13 Use of Proceeds. The proceeds of the Loans made hereunder
shall be used by the Borrower for itself or for its Subsidiaries (i) to
refinance existing term and revolving credit indebtedness of the Borrower to
Wachovia Bank, National Association (f/k/a First Union National Bank), (ii) to
support the Borrower's working capital requirements and trading assets, and
(iii) to purchase equipment. The Letters of Credit shall finance the Borrower's
purchase of goods in the ordinary course of its business. The Borrower will
not, directly or indirectly, use any part of the proceeds of any of the Loans,
or any Letter of Credit, for the purpose of purchasing or carrying any margin
stock within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System or to extend credit to any Person for the purpose of
purchasing or carrying any such margin stock.
Section 2.14 Termination. The Revolving Loan Commitments shall be
automatically terminated on the Maturity Date. The Term Loan Commitments shall
be automatically terminated on the Closing Date.
Section 2.15 Indemnification. The Borrower agrees to indemnify the Agent
and each Lender and to hold the Agent and each Lender harmless from any loss or
expense which the Agent or such Lender may sustain or incur as a consequence of
(a) default by the Borrower in payment when due of the principal amount of, or
interest on, any LIBOR Rate Loan, (b) default by the Borrower in making a
borrowing of, conversion into or continuation of any LIBOR Rate Loan after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (c) default by the Borrower in making any
prepayment of LIBOR Rate Loans, or (d) the making of a payment, prepayment or
conversion of LIBOR Rate Loans on a day which is not the last Business Day of an
Interest Period with respect thereto, including, without limitation, in each
case, any such loss or expense arising from the reemployment or repayment of
funds obtained by the Agent or any Lender or from fees payable to terminate the
deposits from which funds were obtained.
Section 2.16 Termination of Revolving Loans. In the event that the
Borrower pays or prepays any Revolving Loan in full on or prior to the Maturity
Date and terminates the Revolving Loan Commitments, and if on the date of such
payment any Letter of Credit is outstanding, the Borrower shall pay an amount to
the Agent for the ratable benefit of the Lenders equal to the
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Available Amount under such Letter of Credit on such date as cash collateral
for such Letter of Credit. Such amount shall be held by the Agent as provided
in Section 2.18(i).
Section 2.17 Replacement of Lenders. (x) If any Lender becomes a
Defaulting Lender or otherwise defaults in its obligations to make Loans, (y)
upon the occurrence of an event giving rise to the operation of Section 2.8 or
2.9 with respect to any Lender which results in such Lender charging to the
Borrower increased costs materially in excess of those being generally charged
by any other Lender or (z) in the case of a refusal by a Lender to consent to
certain proposed changes, waivers, discharges or terminations with respect to
this Agreement which have been approved by each other Lender as (and to the
extent) provided in Section 11.1, the Borrower shall have the right, if no
Default or Event of Default then exists (or, in the case of preceding clause
(z), will exist immediately after giving effect to such replacement), to replace
such Lender (the "Replaced Lender") with one or more Eligible Transferees, none
of whom shall constitute a Defaulting Lender at the time of such replacement
(collectively, the "Replacement Lender") and each of whom shall be required to
be reasonably acceptable to the Agent, provided that (i) at the time of any
replacement pursuant to this Section 2.17, the Replacement Lender shall enter
into one or more Assignment and Assumption Agreements pursuant to Section 11.4
(and with all fees payable pursuant to said Section 11.4 to be paid by the
Borrower and/or the Replacement Lender (as may be agreed to at such time by and
between the Borrower and the Replacement Lender)) pursuant to which the
Replacement Lender shall acquire all of the Commitments and outstanding Loans
of, and participations in Letters of Credit by, the Replaced Lender and, in
connection therewith, shall pay to (x) the Replaced Lender in respect thereof an
amount equal to the sum of (I) an amount equal to the principal of, and all
accrued interest on, all outstanding Loans of the Replaced Lender, (II) an
amount equal to all Unpaid Reimbursement Obligations that have been funded by
(and not reimbursed to) such Replaced Lender, together with all then unpaid
interest with respect thereto at such time, and (III) an amount equal to all
accrued, but theretofore unpaid, fees owing to the Replaced Lender, and (y) if
the Replaced Lender has a Revolving Loan Commitment which is being replaced, the
Issuing Lender an amount equal to such Replaced Lender's percentage of any
Unpaid Reimbursement Obligations (which at such time remains an Unpaid
Reimbursement Obligation) to the extent such amount was not theretofore funded
by such Replaced Lender to the Issuing Lender at such time (other than those
specifically described in clause (i) above in respect of which the assignment
purchase price has been, or is concurrently being, paid) shall be paid in full
to such Replaced Lender concurrently with such replacement, and (ii) the
Replaced Lender shall receive (x) all amounts payable to the Replaced Lender
pursuant to Section 2.15 as if the amounts paid pursuant to clause (i) above
were a prepayment and (y) all amounts then payable to the Replaced Lender
pursuant to Sections 2.6, 2.8 and 2.9. Upon the execution of the respective
Assignment and Assumption Agreement, the payment of amounts referred to in
clauses (i) and (ii) above and, if so requested by the Replacement Lender,
delivery to the Replacement Lender of the appropriate Note or Notes executed by
the Borrower, the Replacement Lender shall become a Lender hereunder and, unless
the Replaced Lender is being replaced with respect to less than all of the
tranches in which it participates, the Replaced Lender shall cease to constitute
a Lender hereunder, except with respect to indemnification provisions under this
Agreement, which shall survive as to such Replaced Lender.
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D. LETTERS OF CREDIT
Section 2.18 Letters of Credit.
(a) General. Subject to the terms and conditions hereof, the Issuing
Lender shall issue Letters of Credit for the account of the Borrower; provided,
however, that the Issuing Lender will not issue any Letters of Credit to the
extent that the issuance of such Letters of Credit would then cause the sum of
(i) the outstanding Revolving Loans plus (ii) the Letter of Credit Obligations
(with the requested Letter of Credit being deemed to be outstanding for purposes
of this calculation) to exceed the Borrowing Base in effect prior to the
issuance of the requested Letter of Credit or would then cause the Letter of
Credit Obligations (with the requested Letter of Credit being deemed to be
outstanding for purposes of this calculation) to exceed the L/C Sublimit.
Letters of Credit that have not been drawn upon shall not bear interest.
(b) Request. In order to request the issuance, amendment, renewal or
extension of a Letter of Credit, the Borrower shall deliver to the Issuing
Lender, with a copy to the Agent, a letter of credit application on the Issuing
Lender's then customary form (the "Letter of Credit Application"), completed by
the Borrower, the terms of which are hereby incorporated by reference; provided,
however, that in the event of any conflict or inconsistency between the terms of
this Agreement and the terms of the Letter of Credit Applications, the terms of
this Agreement shall control.
(c) Form. Each Letter of Credit shall, among other things, (1) be on the
Issuing Lender's then customary form, (2) provide for the payment of sight
drafts for honor thereunder when presented in accordance with the terms thereof
and when accompanied by the documents described therein, and (3) be subject to
the Uniform Customs and Practice for Documentary Credits (ICC Publication No.
500) and, to the extent not inconsistent therewith, the laws of the State of
Connecticut.
(d) Expiry Dates. Each Letter of Credit shall have an expiry date of the
earlier of (i) the date which is not later than one hundred eighty (180) days
after the date of issuance and (ii) the Maturity Date.
(e) Reimbursement Obligation. In order to induce the Issuing Lender to
issue, extend or renew the Letters of Credit, the Borrower hereby agrees and
promises to reimburse or pay to the Issuing Lender, with respect to each Letter
of Credit issued, extended or renewed hereunder, on each date that any draft or
demand presented or made under such Letter of Credit is honored by the Issuing
Lender, or on which the Issuing Lender otherwise makes a payment with respect
thereto, (i) the amount paid by the Issuing Lender under or with respect to such
Letter of Credit, and (ii) the amount of any taxes, fees, charges or other costs
and expenses whatsoever incurred by the Issuing Lender in connection with any
payment made by the Issuing Lender under, or with respect to, such Letter of
Credit (collectively, the "Reimbursement Obligations"). Unpaid Reimbursement
Obligations shall bear interest at a per annum rate equal to the Default Rate
applicable to Base Rate Loans.
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(f) Letter of Credit Fees. In the event that the Issuing Lender issues,
extends or renews any Letter of Credit for the account of the Borrower (whether
collectively or individually), the Borrower shall pay to the Issuing Lender on
the date of such issuance, extension or renewal, a fee of one eighth percent
(0.125%) per annum. In addition, the Borrower shall remit to the Lenders a fee
equal to the applicable LIBOR Rate Margin, as in effect from time to time times
the maximum face amount of each Letter of Credit, which fee shall be payable
monthly in arrears on each day that interest on Base Rate Loans is payable
hereunder. The Borrower shall also pay the Issuing Lender's usual and customary
administration and negotiation fees with respect to each Letter of Credit. The
fees specified in this Section 2.18(f) shall be referred to herein as "Letter of
Credit Fees."
(g) Obligations Unconditional. The obligations of the Borrower under
Section 2.18(e) and Section 2.18(f) shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with this Agreement,
under any and all circumstances and irrespective of and neither the Issuing
Lender nor the Agent nor any Lender shall be liable or responsible for: (1) any
lack of validity or enforceability of any Letter of Credit or any other Loan
Document, or any term or provision therein; (2) any amendment or waiver of or
any consent to departure from all or any of the provisions of any Letter of
Credit or any other Loan Document; (3) the existence of any dispute, claim,
setoff, defense or other right that the Borrower, any other party guaranteeing,
or otherwise obligated with, the Borrower, any Subsidiary or other Affiliate
thereof or any other Person may at any time have against the beneficiary under
any Letter of Credit, against the Issuing Lender, the Agent or any Lender or
against any other Person whatsoever, whether in connection with this Agreement,
any other Loan Document or any other related or unrelated agreement or
transaction; (4) any draft or other document presented under a Letter of Credit
or any endorsement thereon proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect; (5) payment by the Issuing Lender under a Letter of Credit
against presentation of a draft or other document that does not comply with the
terms of such Letter of Credit; (6) any error, omission, interruption or delay
in any transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit; and (7) any other act or
omission to act or delay of any kind of the Issuing Lender, the Agent, or any
Lender or any other Person or any other event or circumstance whatsoever,
whether or not similar to any of the foregoing, that might, but for the
provisions of this subsection, constitute a legal or equitable discharge of the
Borrower's obligations hereunder.
The Borrower agrees that any action taken or omitted by the Issuing
Lender, the Agent or any Lender under or in connection with any Letter of Credit
and the related drafts and documents, if done in good faith, shall be binding
upon the Borrower and shall not result in any liability on the part of the
Issuing Lender, the Agent or any Lender to the Borrower. It is understood that
the Issuing Lender may accept documents that appear on their face to be in
order, without responsibility for further investigation, regardless of any
notice or information to the contrary and, in making any payment under any
Letter of Credit (i) the Issuing Lender's exclusive reliance on the documents
presented to it under such Letter of Credit as to any and all matters set forth
therein, including reliance on the amount of any draft presented under such
Letter of Credit, whether or not the amount due the beneficiary thereunder
equals the amount of such draft and
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whether or not any document presented pursuant to such Letter of Credit proves
to be insufficient in any respect, if such document on its face appears to be
in order, and whether or not any other statement or any other document
presented pursuant to such Letter of Credit proves to be forged or invalid or
any statement therein proves to be inaccurate or untrue in any respect
whatsoever and (ii) any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit with the terms thereof shall,
in each case, be deemed not to constitute willful misconduct, gross negligence
or bad faith of or by the Issuing Lender.
(h) Reliance by the Issuing Lender. The Issuing Lender shall be entitled
to rely and shall be fully protected in relying upon (without responsibility for
further investigation), any Letter of Credit, draft, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document reasonably
believed by it to be genuine and correct and to have been signed, sent or made
by the proper person or persons and upon advice and statements of legal counsel,
independent accountants and other experts selected by the Issuing Lender.
(i) Cash Collateralization. If any Event of Default shall occur and be
continuing, the Borrower shall, on the Business Day it receives notice from the
Agent thereof and of the amount to be deposited (or automatically on the
occurrence of any Event of Default specified in Section 9.1(6)), deposit in an
account with the Agent an amount in cash equal to the Available Amount as of
such date. Such deposit, and any amount deposited pursuant to Section 2.16,
shall be held by the Agent as collateral for the payment and performance of all
Reimbursement Obligations then arising or which in the future arise for any and
all outstanding Letters of Credit. The Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such account. Such
deposits shall not bear interest. Moneys in such account shall automatically be
remitted by the Agent from time to time to the Issuing Lender for application by
the Issuing Lender to any Reimbursement Obligations for which the Issuing Lender
has not otherwise been reimbursed, or, at the Agent's sole discretion, if the
maturity of the Loans has been accelerated and there are no Letter of Credit
Obligations, to satisfy any other Obligations. If the Borrower is required to
provide an amount of cash collateral under this subsection as a result of the
occurrence of an Event of Default, such amount shall be returned to the Borrower
within three Business Days after all Events of Default have been cured or
waived.
Section 2.19 Letter of Credit Participations.
(a) Immediately upon the issuance by the Issuing Lender of any Letter of
Credit, the Issuing Bank shall be deemed to have sold and transferred to each
Lender, and each Lender (in its capacity under this Section 2.19, a
"Participant") shall be deemed irrevocably and unconditionally to have purchased
and received from the Issuing Lender, without recourse or warranty, an undivided
interest and participation, to the extent of such Participant's Revolving Loan
Commitment percentage, in such Letter of Credit, each drawing or payment made
thereunder and the obligations of the Borrower under this Agreement with respect
thereto, and any security therefor or guaranty pertaining thereto. Upon any
change in the Revolving Loan Commitments of the Lenders, it is hereby agreed
that, with respect to all outstanding Letters of Credit and unpaid Reimbursement
Obligations relating thereto, there shall be an automatic
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adjustment to the participations pursuant to this Section 2.19 to reflect the
new Revolving Loan Commitment percentages of the assignor and assignee Lender,
as the case may be.
(b) In determining whether to pay under any Letter of Credit, the Issuing
Lender shall not have any obligation relative to the other Lenders other than to
confirm that any documents required to be delivered under such Letter of Credit
appear to have been delivered and that they appear to substantially comply on
their face with the requirements of such Letter of Credit. Any action taken or
omitted to be taken by any Issuing Lender under or in connection with any Letter
of Credit issued by it shall not create for such Issuing Lender any resulting
liability to the Borrower, any Affiliate, any Lender or any other Person unless
such action is taken or omitted to be taken with gross negligence or willful
misconduct on the part of the Issuing Lender (as determined by a court of
competent jurisdiction in a final and non-appealable decision).
(c) In the event that the Issuing Lender makes any payment under any
Letter of Credit issued by it and the Borrower shall not have reimbursed such
amount in full to the Issuing Lender pursuant to Section 2.18, the Issuing
Lender shall promptly notify the Agent, which shall promptly notify each
Participant of such failure, and each Participant shall promptly and
unconditionally pay to the Issuing Lender the amount of such Participant's
Revolving Loan Commitment percentage of such unreimbursed payment in lawful
money of the United States and in immediately available funds. If the Agent so
notifies, prior to 12:00 Noon (New York time) on any Business Day, any
Participant required to fund a payment under a Letter of Credit, such
Participant shall make available to such Issuing Lender in lawful money of the
United States and in immediately available funds such Participant's Revolving
Loan Commitment percentage of the amount of such payment on such Business Day.
If and to the extent such Participant shall not have so made its Revolving Loan
Commitment percentage of the amount of such payment available to the Issuing
Lender, such Participant agrees to pay to the Issuing Lender, forthwith on
demand such amount, together with interest thereon, for each day from such date
until the date such amount is paid to such Issuing Lender at the overnight
Federal Funds Rate for the first three (3) days and at the interest rate
applicable to Base Rate Loans for each day thereafter. The failure of any
Participant to make available to the Issuing Lender its Revolving Loan
Commitment percentage of any payment under any Letter of Credit shall not
relieve any other Participant of its obligation hereunder to make available to
the Issuing Lender its Revolving Loan Commitment percentage of any payment under
any Letter of Credit on the date required, as specified above, but no
Participant shall be responsible for the failure of any other Participant to
make available to the Issuing Lender such other Participant's Revolving Loan
Commitment percentage of any such payment.
(d) Whenever the Issuing Lender receives a payment of a Reimbursement
Obligation as to which it has received any payments from the Participants
pursuant to clause (c) above, the Issuing Lender shall pay to each Participant
which has paid its Revolving Loan Commitment percentage thereof, in lawful money
of the United States and in immediately available funds, an amount equal to such
Participant's share (based upon the proportionate aggregate amount originally
funded by such Participant to the aggregate amount funded by all Participants)
of the principal amount of such reimbursement obligation and interest thereon
accruing after the purchase of the respective participations.
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(e) Upon the request of any Participant, the Issuing Lender shall furnish
to such Participant copies of any Letter of Credit issued by it and such other
documentation as may reasonably be requested by such Participant.
(f) The obligations of the Participants to make payments to the Issuing
Lender with respect to Letters of Credit shall be irrevocable and not be subject
to any qualification or exception whatsoever and shall be made in accordance
with the terms and conditions of this Agreement under all circumstances,
including, without limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or any
of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or other right
which the Borrower or any of its Subsidiaries may have at any time against
a beneficiary named in a Letter of Credit, any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), the
Agent, any Participant, or any other Person, whether in connection with
this Agreement, any Letter of Credit, the transactions contemplated herein
or any unrelated transactions (including any underlying transaction
between the Borrower or any Subsidiary and the beneficiary named in any
such Letter of Credit);
(iii) any draft, certificate or any other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan
Documents; or
(v) the occurrence of any Default or Event of Default which is
continuing.
ARTICLE 3
CONDITIONS PRECEDENT
Section 3.1 Conditions Precedent to Effectiveness. The effectiveness of
this Agreement and the obligations of the Lenders to make the Loans and of the
Issuing Lender to issue any Letter of Credit shall be subject to the prior
satisfaction of each of the following conditions:
(a) Lenders shall have received each of the following, in form and
substance satisfactory to Lenders and their counsel:
(1) This Agreement and the Notes, duly executed and delivered by
the Borrower;
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(2) Financing statements and other documents as any of the Lenders
may deem reasonably necessary or proper to perfect the Security Interests
in the Collateral;
(3) The Mortgage, duly executed and delivered by the Borrower;
(4) Fully paid mortgagee title insurance policies (or binding
commitments to issue title insurance policies, marked to Agent's
satisfaction to evidence the form of such policies to be delivered with
respect to the Mortgage), in standard ALTA form, issued by a title
insurance company satisfactory to Agent, each in an amount equal to not
less than the fair market value of the Property insuring the Mortgage as
creating a valid Lien on the Property with no exceptions which Agent shall
not have approved in writing and no survey exceptions;
(5) The Guaranty duly executed and delivered by each of the
Guarantors;
(6) The Guarantor Security Agreement duly executed and delivered by
each of the Secured Guarantors, together with financing statements and
other documents as any of the Lenders may deem reasonably necessary or
proper to perfect the security interests granted thereby in the collateral
covered thereby;
(7) Copies of all corporate action taken by the Borrower and each
Guarantor, including resolutions of their Board of Directors, authorizing
the execution, delivery, and performance of the Loan Documents to which
each is a party and each other document to be delivered pursuant to this
Agreement, certified as of the date of this Agreement by the Secretary of
the Borrower or such Guarantor, as the case may be;
(8) A certificate, dated as of the date of this Agreement, of the
Secretary of the Borrower and of the Secretary of each Guarantor
certifying the names and true signatures of the officers of the Borrower
or such Guarantor authorized to sign the Loan Documents to which the
Borrower or such Guarantor is a party and the other documents to be
delivered by the Borrower or such Guarantor under this Agreement;
(9) A favorable opinion of independent counsel for the Borrower and
the Guarantors, satisfactory to Lenders, dated the date of this Agreement;
(10) A letter duly executed by an actuary or the Borrower's pension
administrator stating the annual valuation of each Plan, the status of the
Borrower's and each ERISA Affiliate's compliance with ERISA, and the
status of the Borrower's and each ERISA Affiliate's funding of each Plan.
(11) Certificates of insurance evidencing compliance with the
insurance requirements of this Agreement;
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(12) The certificate of incorporation and bylaws certified by the
Secretary of the Borrower and each Guarantor;
(13) A Certificate of Good Standing issued by the Secretary of the
State of its jurisdiction of organization evidencing that the Borrower and
each Guarantor is a domestic corporation in good standing in such
jurisdiction;
(14) A Borrowing Base Certificate as of December 31, 2002;
(15) The following due diligence documents: (a) receipt and
satisfactory review of the Subordinated Notes and the Subordinated
Debentures, (b) receipt and satisfactory review of a Phase I Environmental
Site Assessment in respect of the Property, (c) receipt of a satisfactory
appraisal of the Property, and (d) receipt and satisfactory review of a
Certificate of Compliance and a Borrowing Base Certificate as of December
31, 2002;
(16) The remainder of the Commitment Fee ($57,500) in immediately
available funds; and
(17) All other documents, instruments and agreements that the Agent
shall reasonably require in connection with this Agreement.
(b) Since the date of the Borrower's application for the Facilities, (i)
there shall have occurred no material depreciation in the value of the
Collateral, (ii) there shall have occurred no material adverse change in the
operation, financial condition or business prospects of the Borrower or any of
the Guarantors on a consolidated basis, (iii) no litigation shall have been
commenced or threatened which, if successful, would have a Material Adverse
Effect or challenges the transactions contemplated by this Agreement, (iv) no
Default or Event of Default shall have occurred or be continuing, and (v) no
representations made or information supplied to the Agent or any Lender shall
have proven to be false or misleading in any material respect as of the date
made.
(c) All representations and warranties contained in this Agreement and the
other Loan Documents shall be true and correct in all material respects as of
the Closing Date.
Section 3.2 Conditions Precedent to All Revolving Loans. The obligation
of the Lenders to make each Revolving Loan (including the initial Revolving
Loan) and to issue, extend or renew any Letter of Credit, shall be subject to
the prior satisfaction of each of the following additional conditions:
(a) On the date of each Revolving Loan or the date on which a Letter of
Credit is issued, extended or renewed, the following statements shall be true,
and each request by the Borrower for a Revolving Loan, and each Letter of Credit
Application, shall be deemed to be a representation and warranty by the Borrower
that:
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(1) The representations and warranties contained in this Agreement
and contained in each of the other Loan Documents shall be true and
correct in all material respects on and as of the date of such Revolving
Loan or such issuance, extension or renewal as though made on and as of
such date (except representations and warranties which specifically state
a reference date therein); and
(2) No Default or Event of Default shall have occurred and be
continuing, or would result from or after giving effect to such Revolving
Loan or such issuance, extension or renewal; and
(b) At the time of such Revolving Loan or such issuance, extension or
renewal, the sum of (1) the aggregate outstanding principal amount of all
Revolving Loans plus (2) the Available Amount plus (3) all unpaid Reimbursement
Obligations shall not exceed the Borrowing Base.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
To induce the Agent and each Lender to enter into this Agreement, the
Borrower represents and warrants to the Agent and each Lender that:
Section 4.1 Incorporation, Good Standing, and Due Qualification. Each of
the Borrower and each Guarantor: (a) is a corporation duly organized, validly
existing, and in good standing under the jurisdiction of its organization; (b)
has all power and authority necessary to own its properties and to carry on the
business in which it is now engaged or proposed to be engaged; and (c) is duly
qualified and in good standing as a foreign corporation under the laws of each
other jurisdiction in which such qualification is required except where the
failure to so qualify shall not have a Material Adverse Effect.
Section 4.2 Corporate Power and Authority. The execution and delivery by
the Borrower and each Guarantor of the Loan Documents and the performance by the
Borrower and each Guarantor of the Loan Documents, and the borrowings and other
extensions of credit hereunder, are within the powers of the Borrower and each
Guarantor and have been duly authorized by all necessary corporate and, if
required, shareholder action, and do not and will not (a) violate (i) the
certificate of incorporation or other constitutive documents or bylaws of the
Borrower or any Guarantor, or (ii) any provision of any law, rule, regulation
(including, without limitation, Regulation U of the Board of Governors of the
Federal Reserve System), order, writ, judgment, injunction, decree,
determination, or award presently in effect having applicability to the Borrower
or any Guarantor, or (b) be in conflict with, result in a breach of or
constitute (along or with notice or lapse of time or both) a default under any
indenture or loan or credit agreement or any other agreement, lease, or
instrument to which the Borrower or any Guarantor is a party or by which the
Borrower or any Guarantor or their properties may be bound or affected, or (c)
result in the creation or imposition of any Lien upon or with respect to any
property or assets now
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owned or hereafter acquired by the Borrower or any Guarantor except as
contemplated hereunder in favor of the Lenders.
Section 4.3 Legally Enforceable Agreement. This Agreement is, and each of
the other Loan Documents when executed and delivered will be, legal, valid, and
binding obligations of the Borrower and each Guarantor, enforceable against the
Borrower and each Guarantor in accordance with their respective terms, except to
the extent that such enforcement may be limited by applicable bankruptcy,
insolvency, and other similar laws affecting creditors' rights generally.
Section 4.4 Financial Statements and Condition; Full Disclosure.
(a) The Borrower has submitted to the Lenders various financial statements
and information, including, without limitation, its annual audited financial
statements for the fiscal year ended December 31, 2001 and its Form 10-Q for the
fiscal quarter ended September 30, 2002, and the Borrower represents that all of
said financial information is true and correct in all material respects; that
such financial information fairly presents the consolidated financial condition
and the consolidated results of operations of the Borrower and its Subsidiaries
as of the dates thereof and for the periods indicated therein; that such
financial statements disclose all material liabilities, direct or contingent, of
the Borrower and its Subsidiaries as of the dates thereof and for the periods
indicated therein; that such financial statements have been prepared in
accordance with GAAP consistently applied throughout the periods involved; that,
as of the date of said financial information submitted, there were no material
undisclosed unrealized or anticipated losses from any unfavorable commitments of
the Borrower or any of its Subsidiaries; and that, since September 30, 2002
there has been no event which has had a Material Adverse Effect.
(b) Excluding intercompany debt, each of the Borrower and each Guarantor
is, and on the date of each Loan and the date of issuance, extension or renewal
of each Letter of Credit will be, Solvent.
(c) Except as set forth in Schedule 4.4, upon consummation of the
transactions contemplated under the Loan Documents, the Borrower and the
Guarantors will not have any outstanding Indebtedness other than the Debt under
this Agreement and trade debt incurred in the ordinary course of business.
(d) Neither this Agreement nor any written information, exhibit, report,
document, or certificate furnished to Lenders by or on behalf of the Borrower in
connection with or pursuant to this Agreement contained or contains any material
misstatement of fact or omitted or omits to state a material fact or any fact
necessary to make the statements contained herein or therein not misleading.
There is no fact known to the Borrower that materially adversely affects or
that, insofar as the Borrower can now reasonably foresee, may materially
adversely affect, the condition, financial or otherwise, operations, properties,
or prospects of the Borrower or any Guarantor, except possible worldwide events
such as war or acts of terrorists, or the ability of the Borrower or any
Guarantor to carry out its obligations under any of the Loan Documents to which
it is or will be a party.
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Section 4.5 Other Agreements; No Default. Neither the Borrower nor any
Guarantor has any material contracts, agreements, leases or commitments which
have not been previously disclosed to the Lenders. Neither the Borrower nor any
Guarantor is in default in any respect in the performance, observance, or
fulfillment of any of the obligations, covenants, or conditions contained in any
contract, agreement, lease or instrument to which the Borrower or any Guarantor
is a party to the extent that such default would have a Material Adverse Effect.
Each of the Borrower and each Guarantor enjoys peaceful and undisturbed
possession under all leases to which it is a party.
Section 4.6 Litigation. Except as set forth in Schedule 4.6, there is no
pending or, to the Borrower's knowledge, threatened action, suit or proceeding
before any court, Governmental Authority, board of arbitration, or arbitrator
against the Borrower or any Guarantor or for or on behalf of the Borrower or any
Guarantor or in which the Borrower or any Guarantor or any of their properties
or assets is or may otherwise become involved which may, in any one case or in
the aggregate have a Material Adverse Effect nor, to the Borrower's knowledge,
is there any basis therefor. Except as set forth in Schedule 4.6, neither the
Borrower nor any Guarantor has received any summons, citation, directive,
letter, or other communication from any Governmental Authority concerning any
intentional or unintentional violation or alleged violation of any Environmental
Laws.
Section 4.7 No Defaults on Outstanding Judgments or Orders. Neither the
Borrower nor any Guarantor is in default with respect to any judgment, writ,
injunction, decree, rule, or regulation of any Governmental Authority which may,
in any one case or in the aggregate, have a Material Adverse Effect.
Section 4.8 Ownership and Liens. Except as set forth on Schedule 4.8, the
Borrower and the Guarantors have good and marketable title to all of their
assets, and none of such assets is subject to any security interest or lien
except in favor of Lenders.
Section 4.9 Subsidiaries. The Borrower has no Subsidiaries other than as
set forth in Schedule 4.9. None of the Borrower's non-domestic Subsidiaries
(excluding those set forth in Schedule 4.9) has a net worth of greater than
$10,000.00.
Section 4.10 Operation of Business. Each of the Borrower and each
Guarantor possesses all licenses, permits, franchises, patents, copyrights,
trademarks, and trade names, or rights thereto, to conduct its business
substantially as now conducted and as presently proposed to be conducted, and
neither the Borrower nor any Guarantor is in violation of any rights of others
with respect to any of the foregoing except where the failure to possess such
licenses or any such violation would not cause a Material Adverse Effect. No
claims have been received by the Borrower's or any Guarantor's officers or
directors to the effect that (i) any product, process, method, substance, part
or other material presently contemplated to be sold by or employed by it in
connection with such business may infringe any Patent, Trademark, service ▇▇▇▇,
trade name, Copyright, License or other right owned by any other Person, (ii)
there is pending or threatened any claim or litigation against or affecting it
contesting its right to sell or use any such
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product, process, method, substance, part or other material where such claim or
litigation, if decided adversely to the Borrower or any Guarantor, would have a
Material Adverse Effect, or (iii) there has been any infringement or violation
of any Patent, Trademark, service ▇▇▇▇, trade name, Copyright, License or other
right owned by the Borrower or any Guarantor which if continuing, would have a
Material Adverse Effect.
Section 4.11 Taxes. The Borrower and the Guarantors have filed all tax
returns (federal, state, and local) required to be filed and have paid all
taxes, assessments, and governmental charges and levies thereon which are due,
including interest and penalties, except where the failure to file such returns
would not have a Material Adverse Effect.
Section 4.12 Indebtedness. Set forth in Schedule 4.4 hereto is a complete
and correct list of all Indebtedness of the Borrower and the Guarantors. The
maximum principal or face amounts of the obligations set forth, which are
outstanding and which can be outstanding, are correctly stated, and all Liens of
any nature given or agreed to be given as security therefor are correctly
described or indicated in such Schedule.
Section 4.13 Capital Stock. All of the outstanding shares of stock of the
Borrower and each Guarantor have been duly authorized and are validly issued,
fully paid, and non-assessable, are not subject to any right or claim of
rescission against the Borrower or any Guarantor, and have been offered, sold
and issued by the Borrower and the Guarantors in compliance with or exempt from
all applicable federal and state securities laws and, in the case of the
Guarantors, are owned as more particularly set forth in Schedule 4.13, in each
case free and clear of all liens, pledges, charges or other encumbrances except
in favor of the Lenders.
Section 4.14 Margin Securities. None of the proceeds of any Loans and
none of the Letters of Credit will be used, directly or indirectly, for the
purpose of purchasing or carrying any margin security, as that term is defined
in Regulations U of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), or for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry any margin
security, or for any other purpose which might cause any of the Loans or any of
the Letters of Credit to be considered a "purpose credit" within the meaning of
Regulation T, U, or X of the Federal Reserve Board. Less than twenty-five
percent (25%) of the Borrower's or any Guarantor's assets and none of the
Collateral or any collateral covered by the Guarantor Security Agreement
constitute margin securities. The Borrower will neither take, nor permit any
Guarantor or any agent acting on its behalf to take, any action which might
cause any transaction or obligation or right created by this Agreement, or any
document or instrument delivered pursuant hereto, to violate any regulation of
the Federal Reserve Board.
Section 4.15 Fiscal Year. The fiscal year of the Borrower for financial
accounting purposes ends on December 31 of each calendar year.
Section 4.16 No Broker's Fees. The Borrower is not obligated to pay any
brokerage commissions, finder's fees, appraisal fees, or investment banking fees
in connection with the transactions contemplated by this Agreement.
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Section 4.17 Governmental Consents and Regulatory Approvals. The Borrower
and the Guarantors have obtained all consents, licenses, and other approvals
from all governmental authorities required in connection with the execution,
delivery, and performance by the Borrower and the Guarantors of the Loan
Documents and the consummation of the transactions contemplated thereby.
Section 4.18 Eligible Accounts Receivable. Each Account that the Borrower
and the Secured Guarantors represent or warrant to be an Eligible Account
Receivable in each Borrowing Base Certificate or other certification delivered
by the Borrower and the Secured Guarantors pursuant to this Agreement will be,
as of the date so certified, an Eligible Account Receivable unless the Lenders
shall in their good faith credit judgment determine such Account to not be an
Eligible Account Receivable.
Section 4.19 Environmental Compliance. Except as set forth in Schedule
4.19:
(a) the Property and the current and anticipated use thereof materially
comply with all Environmental Laws and all other laws, ordinances or regulations
pertaining to the use and operation of such premises;
(b) to the best of the Borrower's knowledge, no Release of any
Contaminants has occurred or is now occurring upon the Property; and
(c) neither the Borrower nor the Property has been, is now or is
threatened to be the subject of any Enforcement Action.
Section 4.20 Compliance with Laws. Neither the Borrower nor any Guarantor
is in violation of any laws, ordinances, rules or regulations applicable to it,
of any federal, state or municipal governmental authorities, instrumentalities
or agencies including, without limitation, ERISA, the United States Occupational
Safety and Health Act of 1970, as amended, and all Environmental Laws, as such
may be amended, where such violation would have a Material Adverse Effect.
Section 4.21 Events of Default. No Default or Event of Default has
occurred and is continuing.
Section 4.22 Union Contracts. Neither the Borrower nor any Guarantor is a
party to any collective bargaining or union agreement, except as set forth on
the attached Schedule 4.22. The union Contracts set forth on Schedule 4.22 are
in full force and effect and are not currently subject to renegotiations. Each
of the Borrower and each Guarantor is in material compliance with the terms and
conditions of all such union Contracts and neither the Borrower nor any
Guarantor knows of any threatened work stoppage by any union members.
Section 4.23 ERISA. Each of the Borrower and the ERISA Affiliates is in
compliance in all material respects with all applicable provisions of ERISA.
Neither a Reportable Event nor
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a Prohibited Transaction has occurred and is continuing with respect to any
Plan; no notice of intent to terminate a Plan has been filed, nor has any Plan
been terminated; no circumstances exist which constitute grounds under Section
4042 of ERISA entitling the PBGC to institute proceedings to terminate, or
appoint a trustee to administrate, a Plan, nor has the PBGC instituted any such
proceedings; neither Borrower nor any ERISA Affiliate has completely or
partially withdrawn under Sections 4201 or 4204 of ERISA from a Multiemployer
Plan, except as set forth on Schedule 4.23; the Borrower and each ERISA
Affiliate have met their minimum funding requirements under ERISA with respect
to all Plans and the present fair market value of all Plan assets exceeds the
present value of all vested benefits under each Plan, as determined on the most
recent valuation date of such Plan and in accordance with the provisions of
ERISA and the regulations thereunder for calculating the potential liability of
the Borrower or any ERISA Affiliate to the PBGC or such Plan under Title IV of
ERISA; and neither the Borrower nor any ERISA Affiliate has incurred any
liability to the PBGC under ERISA.
Section 4.24 Offices. The chief executive office, principal place of
business and state of incorporation of the Borrower and each Secured Guarantor,
the organizational number of the Borrower and each Secured Guarantor, and the
office where Borrower's records concerning the Collateral are kept are set forth
on Schedule 4.24.
ARTICLE 5
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that until the Commitments are
irrevocably terminated and payment is made in full of the Loans and all other
Obligations and all of its other obligations hereunder are fully performed, the
Borrower shall, and shall cause each of the Guarantors to:
Section 5.1 Maintenance of Existence. Subject to Section 5.16, preserve
and maintain its existence in its current form of organization and good standing
in the jurisdiction of its organization, and qualify and remain qualified as a
foreign corporation in each jurisdiction in which such qualification is required
except where the failure to so qualify shall not have a Material Adverse Effect
and except that a Subsidiary may merge or consolidate with any other Subsidiary
or with its parent company provided the surviving entity of such merger or
consolidation is obligated as a Borrower or Guarantor under this Agreement and
the other Loan Documents, as applicable.
Section 5.2 Maintenance of Records. Keep proper and adequate records and
books of account, in which proper and adequate and complete entries will be made
in accordance with GAAP consistently applied.
Section 5.3 Maintenance of Properties. Maintain, keep, and preserve all
of its properties necessary or useful in the proper conduct of its business in
good working order and condition, ordinary wear and tear excepted, except where
the failure to so keep and preserve shall not have a Material Adverse Effect.
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Section 5.4 Conduct of Business. Continue to engage in a business of the
same general type as conducted and proposed to be conducted by it on the date of
this Agreement.
Section 5.5 Maintenance of Insurance.
(a) Keep its properties, including without limitation its Inventory, and
the Property insured against fire, theft and other hazards (so-called "All Risk"
coverage) in amounts and with companies satisfactory to the Agent to the same
extent in covering such risks as is customary in the same or a similar business,
but in no event in an amount less than the lesser of (i) the total indebtedness
hereunder or (ii) the amount necessary to avoid any co-insurance penalty, each
policy for which shall name Lenders as loss payees as their interests may
appear, (b) maintain public liability coverage against claims for personal
injuries, death or property damage in an amount deemed reasonable by Lenders,
which policy shall name Lenders as an additional insureds, and (c) maintain all
worker's compensation, employment or similar insurance as may be required by
applicable law. Such insurance coverage shall provide for a minimum of thirty
(30) days' written cancellation notice to the Agent. The Borrower agrees to
deliver certificates of insurance to the Agent. In the event of any loss or
damage to the Collateral, the Borrower shall give prompt written notice to the
Agent and to its insurers of such loss or damage and shall properly file its
proofs of loss with said insurers.
Section 5.6 Compliance With Laws. Comply in all material respects with
all applicable laws, rules, regulations, and orders of Governmental Authorities,
such compliance to include, without limitation, paying before the same become
delinquent all taxes, assessments, and governmental charges imposed upon it or
upon its property, provided that the Borrower may contest any such compliance in
good faith upon making adequate reserves in accordance with GAAP for the
consequences of any noncompliance.
Section 5.7 Right of Inspection. At any reasonable time and from time to
time, permit the Agent and each Lender or any agent or representative of any
Lender to examine and make copies of and abstracts from the records, including
without limitation computer records, and books of account of, and visit the
properties of, the Borrower and each Guarantor and to discuss the affairs,
finances, and accounts of the Borrower and each Guarantor with any of its or
their officers and directors and its or their independent accountants (who, by
this reference, are authorized by the Borrower to discuss such authorized
matters with the Agent and each Lender or any agent or representative of the
Agent and each Lender).
Section 5.8 Reporting Requirements. Furnish or cause to be furnished to
the Agent and each Lender:
(a) As soon as available and in any event within ninety-five (95) days
after the end of each fiscal year or (if earlier) when filed with the SEC,
consolidated financial statements of the Borrower and its consolidated
Subsidiaries including a balance sheet and statements of income, operations,
retained earnings and cash flows with accompanying footnotes of the Borrower and
its consolidated Subsidiaries for such fiscal year, setting forth in each case
in comparative form
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the figures as of the end of and for the previous fiscal year, all in
reasonable detail and accompanied by an unqualified audited report thereon by
an independent certified public accountant of national standing reasonably
acceptable to the Lenders, which shall state that such financial statements
present fairly the consolidated financial condition as at the end of such
fiscal year, and the consolidated results of operations and changes in
financial position for such fiscal year, of the Borrower and its consolidated
Subsidiaries in accordance with GAAP.
(b) Within fifty (50) days after the end of each fiscal quarter or (if
earlier) when filed with the SEC, consolidated financial statements of the
Borrower and its consolidated Subsidiaries including a balance sheet and
statements of income and cash flows, prepared and certified as being true,
complete and correct by the chief financial officer of the Borrower.
(c) Within fifty (50) days after the end of each fiscal quarter and within
ninety-five (95) days after the end of each fiscal year, a Certificate of
Compliance.
(d) On a monthly basis, within twenty (20) days following the end of each
month, a Borrowing Base Certificate in the form attached hereto as Exhibit F (a
"Borrowing Base Certificate").
(e) Promptly upon receipt thereof, and in any event simultaneously with
the delivery of the financial statements required by Section 5.8(a), copies of
any reports and management letters submitted to the Borrower by independent
certified public accountants in connection with the examination of financial
statements.
(f) Within (i) five (5) days subsequent to filing with the Internal
Revenue Service, copies of the first four pages of the federal income tax
returns of the Borrower and, upon request by the Lenders, the entire federal
income tax returns of the Borrower, and (ii) five (5) days subsequent to filing
with the SEC, copies of all Forms 8-K, 10-K and 10-Q filed with the SEC.
(g) Promptly after the commencement or threat thereof, notice of all
actions, suits, and proceedings before any Governmental Authority affecting the
Borrower or any Guarantor, which, if determined adversely to the Borrower or
such Guarantor, could have a Material Adverse Effect, and such additional
information regarding such actions, suits, and proceedings as any Lender may
request from time to time.
(h) Immediately upon the occurrence of each Default or Event of Default, a
written notice to the Lenders signed by the president or chief financial officer
of the Borrower setting forth the details of such Default or Event of Default
and the action which is being taken or proposed to be taken by the Borrower with
respect thereto.
(i) Upon request of the Agent, copies of all reports (including annual
reports) and notices which the Borrower or any ERISA Affiliate files with or
receives from the PBGC or the U.S. Department of Labor under ERISA; and as soon
as possible but not later than ten (10) days after the Borrower or any ERISA
Affiliate knows or has reason to know that any Reportable Event or Prohibited
Transaction has occurred with respect to any Plan or that the PBGC or the
Borrower
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or any ERISA Affiliate has instituted or will institute proceedings under Title
IV of ERISA to terminate any Plan, a certificate of the chief financial officer
of the Borrower setting forth details as to such Reportable Event or Prohibited
Transaction or Plan termination and the action the Borrower or an ERISA
Affiliate, as the case may be, proposes to take with respect thereto.
(j) Promptly upon the occurrence of any material adverse change in the
condition (financial or otherwise), operations, properties or business of the
Borrower or any Secured Guarantor, a written notice to the Lenders signed by the
president or chief financial officer of the Borrower setting forth the details
thereof.
(k) Such other available information respecting the condition or
operations, financial or otherwise, of the Borrower or any Guarantor as the
Agent or any Lender may from time to time reasonably request.
Except as otherwise provided in this Section 5.8, the reports described above
shall be in form and detail as shall be satisfactory to the Agent and shall be
certified by the Borrower's chief financial officer as being true, complete and
correct in all material respects.
Section 5.9 Eligible Accounts Receivable. [Intentionally Omitted]
Section 5.10 Collateral. (a) Preserve the Collateral in good condition
and order and not permit it to be abused or misused, (b) not allow any of the
Collateral to be affixed to real estate unless such real estate is subject to a
Lien in favor of the Agent, for the benefit of the Lenders, (c) upon request of
Lenders, prepare to deliver all proceeds of the Collateral to the Agent
immediately upon receipt in the identical form received without commingling with
other property, (d) if an Event of Default has occurred and is continuing, if
required by the Agent, notify Account Debtors and obligors that their accounts,
instruments, documents, contracts and all of the Borrower's rights to receive
payments have been assigned to the Agent, for the benefit of the Lenders, and
are to be paid directly to the Agent, (e) take reasonable and necessary steps to
preserve the liability of Account Debtors, obligors, and secondary parties whose
liabilities are part of the Collateral, (f) take any action required by the
Agent with reference to the federal Assignment of Claims Act of 1940, (g) upon
the occurrence and continuance of an Event of Default, immediately upon request
by the Agent: (A) transfer possession or permit the Agent or any Lender to take
possession of all Collateral; and (B) assign and/or allow the Agent or any
Lender to immediately take possession of all instruments and documents which are
part of the Collateral, or as to those hereafter acquired, immediately following
acquisition, and (i) notify the Agent of any change of location or material
adverse change in the condition of any of the Collateral, or of any material
adverse change in any fact or circumstance warranted or represented by the
Borrower herein or furnished to the Agent or any Lender.
Section 5.11 Defend Collateral. Defend the Collateral against all claims
and demands of all persons at any time claiming the same or any interest therein
and, in the event Lenders' security interests in the Collateral, or any part
thereof, is reasonably likely to be impaired by an adverse decision, allow the
Lenders to contest or defend any such claim or demand in the
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Borrower's name and pay, upon demand, the Lenders' reasonable costs, charges
and expenses, including, without limitation reasonable attorneys' fees in
connection therewith.
Section 5.12 Environmental Covenants. Provide at the expense of the
Borrower an environmental site assessment of the Property if an Event of Default
shall have occurred and be continuing or the Agent shall have reasonable cause
to believe that an actual or threatened violation of an Environmental Law has
occurred, is occurring or is about to occur, in each case prepared by an
independent environmental consulting or engineering firm acceptable to the Agent
in its sole discretion and in each case stating conclusions satisfactory to the
Agent in its sole discretion, together with such additional environmental
studies, audits, site assessments or remedial or corrective actions as shall be
reasonably required by the Agent or recommended by any such environmental site
assessment. Should the Borrower fail to commence any such environmental site
assessment, study, audit or remedial or corrective action within thirty (30)
days of the Agent 's written request, the Agent shall have the right but not the
obligation to retain an environmental consultant to perform the same, at the
Borrower's expense, and all costs and expenses incurred by the Agent in
connection therewith shall be payable by the Borrower upon demand.
Section 5.13 Operating Accounts. Maintain at all times all of its primary
operating and depository accounts with the Agent.
Section 5.14 Permitted Acquisitions.
(a) Subject to the provisions of this Section 5.14, the Borrower and any
of the Guarantors may from time to time during the term of this Agreement,
effect Permitted Acquisitions, so long as (in each case except to the extent the
Lenders otherwise specifically agree in writing in the case of a specific
Permitted Acquisition): (i) no Default or Event of Default shall be in
existence at the time of the consummation of the proposed Permitted Acquisition
or immediately after giving effect thereto; (ii) the Borrower shall have given
the Agent and the Lenders at least ten (10) Business Days' prior written notice
of any Permitted Acquisition and in the case of any Permitted Acquisition
involving the creation of an Affiliate or Subsidiary, the Borrower shall have
obtained the written consent of Lenders thereto; (iii) all representations and
warranties contained herein and in the other Loan Documents shall be true and
correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of such
Permitted Acquisition (both before and after giving effect thereto), unless
stated to relate to a specific earlier date, in which case such representations
and warranties shall be true and correct in all material respects as of such
earlier date; and (iv) the aggregate consideration paid in any fiscal year of
the Borrower, in connection with all Permitted Acquisitions, shall not exceed
$1,500,000.
(b) The Borrower shall cause each Subsidiary which is formed to effect, or
is acquired pursuant to, a Permitted Acquisition to comply with, and to execute
and deliver, all of the documentation required by the Agent.
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(c) The consummation of each Permitted Acquisition shall be deemed to be a
representation and warranty by the Borrower that the certifications by the
Borrower (or by one or more of its officers) pursuant to Section 5.14(a) are
true and correct and that all conditions thereto have been satisfied and that
same is permitted in accordance with the terms of this Agreement, which
representation and warranty shall be deemed to be a representation and warranty
for all purposes hereunder.
(d) Any Subsidiary which is party to a Permitted Acquisition or created or
acquired as a result of a Permitted Acquisition shall promptly become a
Guarantor hereunder and execute such documents and agreements as the Lenders
shall deem necessary in their reasonable discretion.
Section 5.15 Notice of Certain Events. Give prompt written notice to the
Agent and the Lenders of:
(a) any material dispute that arises between the Borrower or any Guarantor
and any Governmental Authority or law enforcement agency;
(b) any labor controversy resulting or likely to result in a strike or
work stoppage against the Borrower or any Guarantor;
(c) any proposal by any public authority to acquire assets or business of
the Borrower or any Guarantor;
(d) the location of any Collateral other than at the Borrower's or any
Secured Guarantor's places of business disclosed in this Agreement other than
(i) Collateral in transit in the ordinary course of the Borrower's or any
Guarantor's businesses and (ii) Collateral having a value of less than $250,000;
(e) any proposed or actual change of the name, identity, jurisdiction of
incorporation or organization, or corporate structure of the Borrower or any
Guarantor;
(f) any other matter which has resulted or is reasonably likely to result
in a Material Adverse Effect;
(g) any notice of default received from any landlord where the Borrower or
any Secured Guarantor locates Collateral or any collateral covered by the
Guarantor Security Agreement; and
(h) any information received by the Borrower with respect to the
Collateral, and any information received by the Borrower or any Secured
Guarantor with respect to the collateral covered by the Guarantor Security
Agreement, that may materially adversely affect the aggregate value thereof or
the rights and remedies of the Lenders with respect thereto.
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Section 5.16 Audit by Lenders. At reasonable intervals permit the Lenders
to audit the Borrower's and each Guarantor's Books and Records at such times
during the Borrower's or such Guarantor's usual business hours on reasonable
notice and in such manner and detail as any of the Lenders deems, in its
reasonable discretion, is necessary. Without limiting the generality of the
foregoing, the Lenders shall be allowed to verify the Accounts and Inventory and
confirm with Account Debtors the validity and amount of Accounts.
Section 5.17 Payment of Principal Interest and Fees. Pay, when due, the
payments of principal, interest and other charges hereunder and under the Notes
in accordance with Sections 2.1, 2.2A, 2.2B and 2.3.
Section 5.18 Transaction Expenses. Upon demand, pay all out-of-pocket
Transaction Expenses to the Lenders.
ARTICLE 6
NEGATIVE COVENANTS
The Borrower covenants and agrees that, until the Commitments are
irrevocably terminated and payment is made in full of the Loans and all other
Obligations and all its other obligations hereunder are fully performed, without
the consent of Lenders, the Borrower shall not, and shall not permit any of the
Guarantors to:
Section 6.1 Liens. Create, incur, assume, or suffer to exist any Lien
upon or with respect to any of its properties, now owned or hereafter acquired,
except:
(a) Liens in favor of the Lenders;
(b) Liens for taxes or assessments or other government charges or levies
not yet due and payable or, if due and payable, Liens for taxes being contested
in good faith by appropriate proceedings and for which appropriate reserves in
accordance with GAAP are maintained;
(c) Liens imposed by law, such as mechanics, landlords', warehousemen's,
and carriers' Liens, and other similar Liens, securing obligations incurred in
the ordinary course of business which do not exceed in the aggregate $250,000.00
and which are not past due for more than thirty (30) days, unless such Liens are
being contested in good faith by appropriate proceedings and appropriate
reserves have been established therefor in accordance with GAAP;
(d) Liens or security interests upon or in Equipment acquired by the
Borrower or the Guarantors with respect to the purchase, construction or lease
of movie theatres, in the ordinary course of business, to secure the price of
such Equipment or to secure Indebtedness or Capital Lease Obligations permitted
under Section 6.4, incurred solely for the purpose of financing such Equipment;
provided, that (i) such Equipment is not a component, part or accessory
installed on, or an accession, addition or attachment to, any other Equipment or
other property of the Borrower
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or any Guarantor (except other Equipment on which a security interest exists
under this clause) and (ii) the Borrower maintains compliance with the
financial covenants set forth in Article 7;
(e) Liens set forth on the attached Schedule 6.1(e);
(f) Liens securing Debt permitted under Section 6.2(d); and
(g) Personal property leases and similar liens and purchase money liens
securing the cost of acquisition of assets subject to such liens or security
interests, provided such leases or liens are in the ordinary course of business.
Section 6.2 Debt. Create, incur, assume, or suffer to exist any recourse
or nonrecourse Indebtedness, except:
(a) The Debt;
(b) Indebtedness (if any) described in Schedule 4.4, with renewals,
extensions, or refinancings thereof;
(c) Accounts payable to trade creditors for goods or services and current
operating liabilities (other than for borrowed money), in each case incurred in
the ordinary course of business and paid within the required time, unless
contested by the Borrower in good faith and by appropriate proceedings;
(d) Capital Lease Obligations permitted under Section 6.4; and
(e) Indebtedness owed other than to the Lenders, the sole purpose of which
shall be to finance the purchase, construction or lease of movie theatres.
Section 6.3 Mergers, Etc. Except for the Permitted Acquisitions, merge or
consolidate with, or sell, assign, lease, or otherwise dispose of (whether in
one transaction or in a series of transactions) all or substantially all of its
assets (whether now owned or hereafter acquired) to any Person, or acquire all
or substantially all of the assets or the business of any Person, except that a
Subsidiary may merge or consolidate with any other Subsidiary or with its parent
company provided the surviving entity of such merger or consolidation is
obligated as a Guarantor under this Agreement and the other Loan Documents, as
applicable.
Section 6.4 Leases. Create, incur, assume, or suffer to exist any
obligation as lessee for the rental or hire of any real or personal property,
except (a) leases existing on the date of this Agreement as set forth in
Schedule 6.4 and any extensions or renewals thereof, (b) Capital Leases in an
aggregate amount not to exceed $1,000,000 at any time, and (c) operating leases
in the ordinary course of business.
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Section 6.5 Sale and Leaseback. Sell, transfer, or otherwise dispose of
any real or personal property to any Person and thereafter directly or
indirectly lease back the same or similar property.
Section 6.6 Sale of Assets. Sell, lease, assign, transfer, or otherwise
dispose of any of its now owned or hereafter acquired assets except: (a) for
Inventory disposed of in the ordinary course of business; (b) the sale or other
disposition of assets no longer used or useful in the conduct of its business;
and (c) any transaction listed in Schedule 6.6 or disclosed to the Lenders in
writing prior to the Closing Date.
Section 6.7 Contingent Liabilities. Assume, guarantee, endorse or
otherwise become liable upon the obligations of any Person, firm or corporation,
or enter into any purchase or option agreement or other arrangement having
substantially the same effect as such a guarantee, except by the endorsement of
negotiable instruments for deposit or collection, obligations of Subsidiaries
under leases and mortgages, or similar transactions in the ordinary course of
business.
Section 6.8 Subsidiaries. Except for the Permitted Acquisitions, create,
form, organize or otherwise acquire an interest in any Subsidiary or Affiliate.
Section 6.9 Fiscal Year. Change its fiscal year.
Section 6.10 Accounting Methods. Make or consent to a material change (a)
in the stock ownership or structure of the Borrower or in the manner in which
business of the Borrower is conducted which could in any way adversely affect
the repayment of the Obligations or have or result in a Material Adverse Effect,
or (b) in its method of accounting unless such change is within the permissible
standards of GAAP.
Section 6.11 Inventory Locations. Move Inventory to or otherwise maintain
Inventory at a location with respect to which the Borrower or any Secured
Guarantor has not delivered to the Agent (i) a lessor's consent and agreement
from the lessor thereof, (ii) a subordination, nondisturbance and attornment
agreement from each mortgagee thereof and (iii) such other documents or
instruments as the Agent shall deem necessary in its sole discretion in order to
create or maintain a first priority perfected security interest in such
Inventory in favor of the Agent for the benefit of the Lenders, in each case in
form and substance satisfactory to the Agent in its sole discretion.
Section 6.12 Name Changes. Change its corporate name or conduct its
business under any trade name or style other than as set forth in this
Agreement.
Section 6.13 Prohibited Transfers. Transfer, in any manner, either
directly or indirectly, any cash, property, or other assets of the Borrower to
any parent or any of its Affiliates, Subsidiaries, or related entities, other
than sales made in the ordinary course of business and for fair consideration on
terms no less favorable than if such sale had been an arms-length transaction
between the Borrower and an unaffiliated or unrelated entity. All accounts
payable due Affiliates
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or related entities shall be subordinate to all sums due the Lenders and shall
be payable in the ordinary course of business in accordance with customary
invoice terms, provided that the Lenders have not demanded repayment of any of
the Obligations or an Event of Default has not occurred and is continuing.
Section 6.14 Jurisdiction. Change its jurisdiction of organization other
than as set forth herein.
ARTICLE 7
FINANCIAL COVENANTS
The Borrower covenants and agrees that until the Commitments are
irrevocably terminated and payment is made in full of the Loans and all other
Obligations and all its other obligations hereunder are fully performed, the
Borrower shall (as to the Borrower and any of its Subsidiaries) on a
consolidated basis in accordance with GAAP:
Section 7.1 Minimum Fixed Charge Coverage Ratio. Maintain (a) on a
rolling four quarter basis as of the end of each fiscal quarter of the Borrower
through and including December 31, 2003, a ratio of (i) EBITDA for such period
minus total Capital Expenditures during such period minus total dividends paid
during such period plus $2,000,000 divided by (ii) Current Maturities of
Long-Term Debt as of the end of such period plus Interest Expense for such
period plus total corporate income tax provision (if positive) for such period
of not less than 1:00:1:00 and (b) on a rolling four quarter basis as of the end
of each fiscal quarter of the Borrower on and after March 31, 2004, a ratio of
(i) EBITDA for such period minus Capital Expenditures during such period minus
total dividends paid during such period divided by (ii) Current Maturities of
Long-Term Debt as of the end of such period plus Interest Expense for such
period plus total corporate income tax provision (if positive) for such period
of not less than 1:00:1:00.
Section 7.2 Minimum Tangible Net Worth. Maintain as of the end of each
fiscal quarter of the Borrower, beginning with the fiscal quarter of the
Borrower ended December 31, 2002, Tangible Net Worth equal to the sum of (x)
$19,500,000 plus (y) at the end of each fiscal year of the Borrower, commencing
with the fiscal year ending December 31, 2003, fifty percent (50%) of the
Borrower's net income (if positive) for such fiscal year.
Section 7.3 Maximum Total Funded Debt Ratio. Maintain as of the end of
each fiscal quarter of the Borrower beginning with the fiscal quarter ended
December 31, 2002, and each fiscal quarter end thereafter, a ratio of (i) total
Funded Debt divided by (ii) EBITDA for the period of four consecutive fiscal
quarters then ended of not more than 5.0:1.0.
Section 7.4 Maximum Leverage Ratio. Maintain as of the end of each fiscal
quarter of the Borrower beginning with the fiscal quarter ended December 31,
2002, and each fiscal quarter end thereafter, a ratio (the "Leverage Ratio") of
(i) total Senior Funded Debt divided by (ii) EBITDA for the period of four
consecutive fiscal quarters then ended of not more than 3.0:1.0.
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Section 7.5 Certain Financial Terms. For purposes of this Article 7, the
following terms shall have the following meanings:
(a) "Capital Assets" means fixed assets, both tangible (such as land,
buildings, fixtures, machinery and equipment) and intangible (such as patents,
copyrights, trademarks, franchises and good will); provided that Capital Assets
shall not include any item customarily charged directly to expense or
depreciated over a useful life of twelve (12) months or less in accordance with
GAAP.
(b) "Capital Expenditures" means amounts paid or accrued by the Borrower
or any of its Subsidiaries in connection with the purchase or lease by the
Borrower or any of its Subsidiaries of Capital Assets that would be required to
be capitalized and shown on the balance sheet of such Person in accordance with
GAAP.
(c) "Current Maturities of Long-Term Debt" means, with respect to all Debt
which, in accordance with GAAP, may be properly classified as long-term debt,
the portion of such Debt which is due within one (1) year from the date of
determination thereof.
(d) "EBITDA" means earnings (or losses) from operations for any period,
after all expenses and other proper charges but before payment or provision for
any depreciation, amortization, income taxes and increased by interest expense
(including non-cash interest expense).
(e) "Funded Debt" means Indebtedness formalized by the issuing of bonds or
notes.
(f) "Interest Expense" means, for any period, the interest expense of the
Borrower and its Subsidiaries during such period determined on a consolidated
basis in accordance with GAAP, and shall in any event include, without
limitation, (a) the amortization of debt discounts, (b) the amortization of all
fees payable in connection with the incurrence of Indebtedness to the extent
included in interest expense, (c) the portion of any capitalized lease
obligation allocable to interest expense, (d) all fixed and all calculable
dividend payments on preferred stock, and (e) all payments of interest expense
in kind.
(g) "Senior Debt" means (i) Indebtedness of the Borrower other than
Subordinated Debt, and (ii) any joint venture debt facilities guaranteed by the
Borrower.
(h) "Subordinated Debt" means Indebtedness of the Borrower which is
subordinated in payment and priority to the Debt upon terms and conditions and
pursuant to subordination agreements satisfactory to the Lenders in their sole
discretion, including, but not limited to, the Subordinated Notes and the
Subordinated Debentures.
(i) "Tangible Net Worth" means, as at any date of determination thereof,
(a) the amount at which common stockholders' equity and preferred stock would be
shown on a balance
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sheet at such date, minus (b) amounts at which goodwill and any other
intangibles and amounts owed by Affiliates would be shown on such balance
sheet.
ARTICLE 8
GRANT OF COLLATERAL
Section 8.1 Grant of Security Interest.
(a) Subject to the Permitted Encumbrances, as collateral security for the
prompt and complete payment and performance of the Obligations, the Borrower
hereby grants to the Lenders Security Interests in and Liens upon all of its
properties, assets and rights, wherever located, whether real or personal,
tangible or intangible, and whether now owned or hereafter acquired, or in which
it now has or at any time in the future may acquire any right, title, or
interest, including, all of the following property in which it now has or at any
time in the future may acquire any right, title or interest: all Accounts,
Chattel Paper, Commodity Accounts, Commodity Contracts, Deposit Accounts,
Documents, Electronic Chattel Paper, Equipment, Fixtures, General Intangibles,
Goods, Health-care Insurance Receivables, Instruments, Intellectual Property,
Inventory, Investment Properties, Letter-of-Credit Rights, Payment Intangibles,
Promissory Notes, Software, Supporting Obligations, Tangible Chattel Paper,
Certificated Securities, Financial Assets, Negotiable Instruments, Securities
Accounts, Securities, Security Entitlements and Uncertificated Securities; and
to the extent not otherwise included, all Proceeds and products of all and any
of the foregoing and all collateral security and guarantees given by any Person
with respect to any of the foregoing (all of the foregoing, together with any
other collateral pledged to the Lender pursuant to any other Financing
Agreement, collectively, the "Collateral").
(b) The Borrower and Lenders agree that this Agreement creates, and is
intended to create, valid and continuing Liens upon the Collateral in favor of
Lenders. The Borrower represents, warrants and promises to Lenders that: (i)
the Borrower is the sole owner of each item of the Collateral upon which it
purports to ▇▇▇▇▇ ▇ ▇▇▇▇ pursuant to the Loan Documents, and has good and
marketable title thereto free and clear of any and all Liens or claims of
others, other than Permitted Encumbrances or Liens being released on the Closing
Date; (ii) the Security Interests granted pursuant to this Agreement constitute
valid perfected Security Interests in all of the Collateral in favor of the
Lenders as security for the prompt and complete payment and performance of the
Obligations, enforceable in accordance with the terms hereof against any and all
creditors of and purchasers from the Borrower, and such Security Interests are
prior to all other Liens on the Collateral in existence on the date hereof
except for Permitted Encumbrances and those being released on the Closing Date
which have priority by operation of law; and (iii) no effective security
agreement, financing statement, equivalent security or Lien instrument or
continuation statement covering all or any part of the Collateral is or will be
on file or of record in any public office, except those relating to Permitted
Encumbrances. The Borrower promises to defend the right, title and interest of
the Lenders in and to the Collateral against the claims and demands of all
Persons whomsoever, and shall take such actions, including (x) the prompt
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delivery of all original Instruments, Chattel Paper and certificated Stock owned
by the Borrower to Lenders, (y) notification of Lenders' interest in Collateral
at Lenders' request, and (z) the institution of litigation against third parties
as shall be prudent in order to protect and preserve the Borrower's and Lenders'
respective and several interests in the Collateral. The Borrower shall ▇▇▇▇ its
Books and Records pertaining to the Collateral to evidence the Loan Documents
and the Liens granted under the Loan Documents.
8.2 The Mortgage. As additional collateral security for the prompt and
complete payment and performance of the Obligations, the Borrower hereby grants
to the Lenders all of its rights, title and interest now owned or hereafter
acquired in and to that certain property known as ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, pursuant to the terms of that certain Open-End Mortgage Deed and
Security Agreement dated the date hereof by and among the Borrower and Lenders
(the "Mortgage").
8.3 Lenders' Rights.
(a) Any Lender may, (i) at any time in such Lender's own name or in the
name of the Borrower, communicate with Account Debtors, parties to Contracts,
and obligors in respect of Instruments, Chattel Paper or other Collateral to
verify to such Lender's satisfaction, the existence, amount and terms of any
such Accounts, Contracts, Instruments or Chattel Paper or other Collateral, and
(ii) after an Event of Default which is continuing, at any time and without
prior notice to the Borrower, notify Account Debtors, parties to Contracts, and
obligors in respect of Chattel Paper, Instruments, or other Collateral that the
Collateral has been assigned to the Lenders and that payments shall be made
directly to the Agent. Upon the request of any Lender, the Borrower shall so
notify such Account Debtors, parties to Contracts, and obligors in respect of
Instruments, Chattel Paper or other Collateral. The Borrower hereby constitutes
each Lender or Lender's designee as the Borrower's attorney with power to
endorse the Borrower's name upon any notes, acceptance drafts, money orders or
other evidences of payment or Collateral.
(b) It is expressly agreed by the Borrower that, notwithstanding anything
herein to the contrary, the Borrower shall remain liable under each Contract,
Instrument and License to observe and perform all the conditions and obligations
to be observed and performed by it thereunder, and Lenders shall have no
obligation or liability whatsoever to any Person under any Contract, Instrument
or License (between the Borrower and any Person other than Lenders) by reason of
or arising out of the execution, delivery or performance of this Agreement, and
Lenders shall not be required or obligated in any manner (i) to perform or
fulfill any of the obligations of the Borrower, (ii) to make any payment or
inquiry, or (iii) to take any action of any kind to collect or enforce any
performance or the payment of any amounts which may have been assigned to them
or to which they may be entitled at any time or times under or pursuant to any
Contract, Instrument or License.
(c) The Borrower shall, with respect to each owned, leased, or controlled
property or facility, during normal business hours and upon reasonable advance
notice (unless a Default shall have occurred and be continuing, in which event
no notice shall be required and Lenders shall have access at any and all times):
(i) provide access to such facility or property to Lenders and
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any of their officers, employees and agents, as frequently as Lenders determine
to be appropriate; (ii) permit the Lenders and any of their officers, employees
and agents to inspect, audit and make extracts from all of the Borrower's Books
and Records; and (iii) permit Lenders to inspect, review, evaluate and make
physical verifications and appraisals of the Collateral in any manner and
through any medium that any Lender considers advisable, and the Borrower agrees
to render to each Lender, at the Borrower's cost and expense, such clerical and
other assistance as may be reasonably requested with regard thereto. The
Borrower shall make available to Lenders and their counsel, as quickly as
practicable under the circumstances, originals or copies of all the Borrower's
Books and Records and any other instruments and documents which any Lender may
request. The Borrower shall deliver any document or instrument reasonably
necessary for Lenders, as they may from time to time reasonably request, to
obtain records from any service bureau or other Person which maintains records
for the Borrower.
8.4 Lenders' Appointment as Attorney-in-fact. On the Closing Date the
Borrower shall execute and deliver a Power of Attorney in the form attached as
Exhibit G. The power of attorney granted pursuant to the Power of Attorney and
all powers granted under any Loan Documents are powers coupled with an interest
and shall be irrevocable until the Maturity Date. The powers conferred on the
Agent for the Lenders under the Power of Attorney are solely to protect Lenders'
interests in the Collateral and shall not impose any duty upon it to exercise
any such powers. Agent agrees and promises that (a) it shall not exercise any
power or authority granted under the Power of Attorney unless an Event of
Default has occurred and is continuing, (b) Agent shall only exercise the powers
granted under the Power of Attorney in respect of Collateral, provided, except
as otherwise required by applicable law, Agent shall not have any duty as to any
Collateral, and Agent shall be accountable only for amounts that it actually
receives as a result of the exercise of such powers. NONE OF AGENT OR IT
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL BE RESPONSIBLE
TO THE BORROWER FOR ANY ACT OR FAILURE TO ACT PURSUANT TO THE POWERS GRANTED
UNDER THE POWER OF ATTORNEY OR OTHERWISE, EXCEPT FOR ITS OWN GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT, NOR FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL
DAMAGES. The Borrower also hereby authorizes Agent and any Lender to file any
financing or continuation statement without the signature of the Borrower to the
extent permitted by applicable law.
ARTICLE 9
EVENTS OF DEFAULT
Section 9.1 Events of Default.
Each of the following shall be an "Event of Default":
(1) The Borrower shall fail to pay the principal of, premium, if
any, or interest on the Notes, or any amount of any fee, or any other
liability or indebtedness owing by the Borrower to the Agent or any Lender
as set forth herein or in the Notes, which in the
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case of any payment except the principal of any Loan or any Reimbursement
Obligation, continues for more than ten (10) days;
(2) Any representation or warranty made or deemed made by the
Borrower or any Guarantor in any of the Loan Documents, or which is
contained in any certificate, document, opinion, report, or financial or
other statement furnished at any time under or in connection with any Loan
Document, shall have been false in any material respect on or as of the
date made or deemed made or furnished;
(3) The Borrower shall fail to comply with any of the covenants
contained in Articles 5, 6 and 7 provided, however, the Borrower shall
have a ten (10) day grace period to comply with the reporting requirements
contained in Section 5.8;
(4) The Borrower or any Guarantor shall fail to perform or observe
any material term, covenant or agreement contained herein or in any of the
other Loan Documents (other than those specified elsewhere in this Section
9.1) which continues for ten (10) days;
(5) The Borrower or any Guarantor shall (A) fail to pay any
indebtedness for borrowed money in excess of $500,000 (other than the
Notes), including any interest or premium thereon, when due (whether by
scheduled maturity, required prepayment, acceleration, demand, or
otherwise), (B) fail to perform or observe any term, covenant, or
condition on its part to be performed or observed under any agreement or
instrument relating to any such indebtedness, when required to be
performed or observed (including any applicable grace periods), if the
effect of such failure to perform or observe is to accelerate, or to
permit the acceleration after the giving of notice or passage of time, or
both, of the maturity of such indebtedness, whether or not such failure to
perform or observe shall be waived by the holder of such indebtedness; or
any such indebtedness shall be declared to be due and payable, or required
to be prepaid (other than by a regularly scheduled required prepayment),
prior to the stated maturity thereof, or (C) be in default under any other
indebtedness of the Borrower or such Guarantor to the Agent or any Lender;
or any other event or condition shall occur or exist if the effect of such
other event or condition is to accelerate, or to permit the acceleration
after the giving of notice or passage of time, or both, of the maturity of
such indebtedness, whether or not the occurrence of such other event or
condition shall be waived by the holder of such indebtedness, provided,
however, that the event described on Schedule 9.1(5) shall not be
considered an Event of Default;
(6) The Borrower or any Guarantor (A) shall generally not, or shall
be unable to, or shall admit in writing its inability to, pay its debts as
such debts become due; or (B) shall make an assignment for the benefit of
creditors, petition or apply to any tribunal for the appointment of a
custodian, receiver, or trustee for it or a substantial part of its
assets; or (C) shall commence any proceeding under any bankruptcy,
reorganization, arrangement, readjustment of debt, dissolution, or
liquidation law or statute of any jurisdiction, whether now or hereafter
in effect; or (D) shall have any such petition or
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application filed or any such proceeding commenced against it in which an
order for relief is entered or adjudication or appointment is made or
which remains undismissed for a period of sixty (60) days or more; or (E)
by any act or omission shall indicate its consent to, approval of, or
acquiescence in any such petition, application, or proceeding, or order
for relief, or the appointment of a custodian, receiver, or trustee for
all or any substantial part of its properties; or (F) shall suffer any
such custodianship, receivership, or trusteeship to continue undischarged
for a period of sixty (60) days or more;
(7) One or more judgments, decrees, or orders for the payment of
money which in the aggregate exceeds $250,000.00 shall be rendered against
the Borrower or any Guarantor and such judgments, decrees, or orders shall
continue unsatisfied and in effect for a period of sixty (60) consecutive
days without being vacated, discharged, satisfied, or stayed or bonded
pending appeal;
(8) Any Security Document shall at any time after its execution and
delivery and for any reason other than an act or omission by the Agent
cease to create a valid and perfected first priority security interest (or
such lesser priority security interest as may be specifically set forth
therein) in and to the property purported to be subject to such Security
Document or otherwise to be in full force and effect, or any Security
Document shall be declared null and void, or the validity or
enforceability thereof shall be contested by the Borrower, or the Borrower
shall deny it has any further liability or obligation under any Security
Document, or the Borrower shall fail to perform any of its obligations
under any Security Document subject to any notice and cure provisions
contained in any Security Document;
(9) Any event shall occur or exist with respect to the Borrower
which could in the opinion of the Agent subject the Borrower to any tax,
penalty, or other liability under or in connection with ERISA in excess of
$250,000;
(10) There shall occur any uninsured damage to or loss, theft, or
destruction of any of the Collateral having a value of more than $500,000;
(11) The Borrower or any Guarantor ceases to conduct its business
as currently conducted or is enjoined, restrained or in any way prevented
by court order from conducting all or any material part of its business
affairs; or
(12) There shall occur any material adverse change in the condition
(financial or otherwise), operations, properties or business of (i) the
Borrower or (ii) the Borrower and its Subsidiaries and Affiliates taken as
a whole.
Upon and after the occurrence and during the continuance of an Event of
Default, the Agent may, and upon the request of the Lenders, shall (1) declare
the Commitments to be terminated, whereupon the same shall forthwith terminate
and/or (2) declare all the outstanding indebtedness evidenced by the Notes and
all other amounts payable under this Agreement (including, without limitation,
any Make-Whole Premium or termination fee that the Borrower
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would have been obligated to pay had it then elected to prepay the Notes and
terminate the Commitments), to be forthwith due and payable, whereupon the
Commitments shall be terminated and the Notes, all such interest, and all such
other amounts shall become and be forthwith due and payable, without
presentment, demand, protest, or further notice of any kind, all of which are
hereby expressly waived by the Borrower; provided, however, that upon the
occurrence of any event described in Section 9.1(6), the Commitments shall
terminate and the outstanding Notes, all interest thereon, and all such other
amounts payable under this Agreement shall become automatically due and payable,
without presentment, demand, protest, or further notice of any kind, all of
which are hereby expressly waived by the Borrower.
ARTICLE 10
THE AGENT
Section 10.1 Appointment. Each of the Lenders and the Issuing Lender
hereby designates People's as Agent to act as specified herein and in the other
Loan Documents, including without limitation as collateral agent for the benefit
of the Lenders with regard to all collateral securing the Loans. Each Lender
and the Issuing Lender hereby irrevocably authorize the Agent to take such
action on their behalf under the provisions of this Agreement, the other Loan
Documents and any other instruments and agreements referred to herein or therein
and to exercise such powers and to perform such duties hereunder and thereunder
as are specifically delegated to or required of the Agent by the terms hereof
and thereof and such other powers as are reasonably incidental thereto. The
Agent may perform any of its duties hereunder by or through its respective
officers, directors, agents, employees or affiliates.
Section 10.2 Nature of Duties. The Agent shall not have any duties or
responsibilities except those expressly set forth in this Agreement and in the
other Loan Documents. Neither the Agent, nor any of its officers, directors,
agents, employees or affiliates, shall be liable for any action taken or omitted
by it or them hereunder or under any other Loan Document or in connection
herewith or therewith, unless caused by its or their gross negligence or willful
misconduct (as determined in a final and non-appealable decision by a court of
competent jurisdiction). The duties of the Agent shall be mechanical and
administrative in nature; the Agent shall not have by reason of this Agreement
or any other Loan Document a fiduciary relationship in respect of any Lender;
and nothing in this Agreement or any other Loan Document, expressed or implied,
is intended to or shall be so construed as to impose upon the Agent any
obligations in respect of this Agreement or any other Loan Document except as
expressly set forth herein or therein.
Section 10.3 Lack of Reliance on the Agent. Independently and without
reliance upon the Agent, each Lender, and the Issuing Lender, to the extent it
deems appropriate, has made and shall continue to make (i) its own independent
investigation of the financial condition and affairs of the Borrower and each
Guarantor in connection with the making and the continuance of the Loans and the
taking or not taking of any action in connection herewith and (ii) its own
appraisal of the creditworthiness of the Borrower and each Guarantor and, except
as expressly provided in
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this Agreement, the Agent shall not have any duty or responsibility, either
initially or on a continuing basis, to provide any Lender or the Issuing Lender
with any credit or other information with respect thereto, whether coming into
its possession before the making of the Loans or at any time or times
thereafter. The Agent shall not be responsible to any Lender or the Issuing
Lender for any recitals, statements, information, representations or warranties
herein or in any document, certificate or other writing delivered in connection
herewith or for the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectability, priority or sufficiency of this
Agreement or any other Loan Document (or with respect to the validity, priority
or perfection of any security interests purported to be created hereunder or
thereunder) or the financial condition of the Borrower or any Guarantor or be
required to make any inquiry concerning either the performance or observance of
any of the terms, provisions or conditions of this Agreement or any other Loan
Document, or the financial condition of the Borrower or Guarantors or the
existence or possible existence of any Default or Event of Default.
Section 10.4 Certain Rights of the Agent. If the Agent shall request
instructions from the Lenders with respect to any act or action (including
failure to act) in connection with this Agreement or any other Loan Document,
the Agent shall be entitled to refrain from such act or taking such action
unless and until the Agent shall have received instructions from the Lenders;
and the Agent shall incur no liability to any Person by reason of so refraining.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against the Agent as a result of such Agent acting or refraining from
acting hereunder or under any other Loan Document in accordance with the
instructions of the Lenders.
Section 10.5 Reliance. The 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,
radiogram, order or other document or telephone message signed, sent or made by
any Person that the Agent believed to be the proper Person, and, with respect to
all legal matters pertaining to this Agreement and any other Loan Document and
its duties hereunder and thereunder, upon advice of counsel selected by the
Agent.
Section 10.6 Indemnification. To the extent that the Agent is not
reimbursed and indemnified by the Borrower, the Lenders will reimburse and
indemnify the Agent, in proportion to their respective aggregate Commitments
(determined as if there were no Defaulting Lenders and, if all Loans have been
repaid in full, as determined immediately before giving effect to such
repayment) for and against any and all liabilities, obligations, losses,
damages, penalties, claims, actions, judgments, costs, expenses or disbursements
of whatsoever kind or nature which may be imposed on, asserted against or
incurred by the Agent in performing its duties hereunder or under any other Loan
Document, or in any way relating to or arising out of this Agreement or any
other Loan Document; provided that to the extent that the Agent is reimbursed by
the Borrower for amounts paid by the Lenders pursuant to this Section 10.6, the
Agent shall reimburse the Lenders for such amounts; provided further, that no
Lender shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's gross negligence or willful misconduct (as determined
in a final and non-appealable decision by a court of competent jurisdiction).
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Section 10.7 The Agent in its Individual Capacity. With respect to its
obligation to make Loans, or issue or participate in Letters of Credit, under
this Agreement, People's shall have the rights and powers specified herein for a
"Lender" and may exercise the same rights and powers as though it were not
performing the duties specified herein; and the term "Lenders," shall, unless
the context clearly otherwise indicates, include People's in its individual
capacity. People's may accept deposits from, lend money to, and generally
engage in any kind of banking, investment banking, trust or other business with,
or provide debt financing, equity capital or other services (including financial
advisory services) to, the Borrower or any Affiliate (or any Person engaged in a
similar business with the Borrower or any Affiliate) as if it were not
performing the duties specified herein, and may accept fees and other
consideration from the Borrower or any Affiliate for services in connection with
this Agreement and otherwise without having to account for the same to the
Lenders.
Section 10.8 Resignation.
(a) The Agent may resign from the performance of all its functions and
duties hereunder and/or under the other Loan Documents at any time by giving
fifteen (15) Business Days' prior written notice to the Lenders and the Borrower
(provided that no such notice shall be required to be given to the Borrower if a
Default or Event of Default of the type described in Section 9.1(6) exists with
respect to the Borrower). Any such resignation by the Agent hereunder shall
also constitute its resignation as an Issuing Lender, in which case the
resigning Agent (x) shall not be required to issue any further Letters of Credit
hereunder and (y) shall maintain all of its rights as Issuing Lender with
respect to any Letters of Credit issued by it prior to the date of such
resignation. Such resignation shall take effect upon the appointment of a
successor Agent pursuant to clauses (b) and (c) below or as otherwise provided
below.
(b) Upon any such notice of resignation by the Agent, the Lenders shall
appoint a successor Agent who shall be a commercial bank or trust company
reasonably acceptable to the Borrower (it being understood and agreed that (i)
the Borrower's acceptance of a successor Agent pursuant to this paragraph (b)
shall not be unreasonably withheld, (ii) so long as a Default or Event of
Default exists at such time such successor Agent shall not be required to be
reasonably satisfactory to the Borrower and (iii) any Lender is deemed to be
acceptable to the Borrower).
(c) If a successor Agent shall not have been so appointed within such
fifteen (15) Business Day period, the Agent, with the consent of the Borrower
(which consent shall not be unreasonably withheld or delayed but shall not be
required at any time when a Default or Event of Default exists and is
continuing), shall then appoint a successor Agent who shall serve as Agent
hereunder or thereunder until such time, if any, as the Lenders appoint a
successor Agent as provided above.
(d) If no successor Agent has been appointed pursuant to clause (b) or (c)
above by the thirtieth (30) Business Day after the date such notice of
resignation was given by the Agent, the Agent's resignation shall become
effective and the Lenders shall thereafter perform all the duties of the Agent
hereunder and/or under any other Loan Document until such time, if any, as the
Lenders appoint a successor Agent as provided above.
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(e) Upon a resignation of the Agent pursuant to this Section 10.8, the
Agent shall remain indemnified to the extent provided in this Agreement and the
other Loan Documents and the provisions of this Article 10 shall continue in
effect for the benefit of the Agent for all of its actions and inactions while
serving as Agent.
ARTICLE 11
GENERAL PROVISIONS
Section 11.1 Amendments. Neither this Agreement nor any other Loan
Document nor any terms hereof or thereof may be changed, waived, discharged or
terminated unless such change, waiver, discharge or termination is in writing
signed by the Borrower and Lenders.
Section 11.2 Notices. All notices, demands, requests, and other
communications given under this Agreement shall only be effective if they are
(i) in writing, (ii) actually received by the addressee, and (iii) sent by hand
delivery, by facsimile transmission, by reputable express delivery service, or
by first-class mail, postage prepaid:
(a) If to the Agent, to it at:
People's Bank
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Mr. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Vice President
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. Gold, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to a Lender, to its address as set forth in Schedule 2
(c) If to the Borrower, to it at:
Trans-Lux Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Executive Vice President
and Chief Financial Officer
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
Telephone No.: (203) 853-4321 ext. 315
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇ Celler Spett & ▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address (and/or facsimile transmission number) as the Borrower
or the Agent, or such Lender, as the case may be, shall have specified in a
notice sent to the others in accordance with this Section 11.2.
Section 11.3 No Waiver; Remedies. No failure on the part of the Agent or
any Lender to exercise, and no delay in exercising, any right, power, or remedy
under any of the Loan Documents shall operate as a waiver of such right, power,
or remedy, nor shall any single or partial exercise of any right, power, or
remedy under any of the Loan Documents preclude any other or further exercise
thereof or the exercise of any other right, power, or remedy. The remedies
provided in the Loan Documents are cumulative and not exclusive of any remedies
provided by law.
Section 11.4 Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Agent and each Lender and their respective successors and assigns;
provided, however, that the Borrower shall not (by agreement, operation of law,
or otherwise) assign any of its rights, or delegate any of its obligations,
under any of the Loan Documents to which the Borrower is a party without the
prior written consent of the Agent and the Lenders, and any such assignment or
delegation made without such consent shall be null and void. Each Lender may
sell participations in, or may, subject to Section 11.4(b), assign, all or any
part of any of the Loans and its rights and obligations hereunder to another
lender, in which event (a) in the case of an assignment, the assignee shall
have, to the extent of such assignment (unless otherwise provided therein), the
same rights, benefits and obligations as it would have if it were a Lender
hereunder; and (b) in the case of a participation, the participant shall have no
rights under the Loan Documents. The agreement executed by such Lender in favor
of the participant shall not give the participant the right to require such
Lender to take or omit to take any action hereunder except action directly
relating to (i) the extension of a payment date with respect to any portion of
the principal of or interest on any amount outstanding hereunder allocated to
such participant or any fee payable to such participant, (ii) the reduction of
the principal amount outstanding hereunder or (iii) the reduction
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of the rate of interest payable on such amount or any amount of fees payable
hereunder to a rate or amount below that which such participant is entitled to
receive under its agreement with such Lender. A Lender may furnish any
information concerning the Borrower in the possession of such Lender from time
to time to assignees and participants (including prospective assignees and
participants); provided that such Lender shall, if requested by the Borrower,
require any such prospective assignee or such participant (prospective or
otherwise) to agree in writing to maintain the confidentiality of such
information, except as required by applicable laws or regulatory or governmental
authorities. Any Lender may at any time pledge all or any portion of its rights
under the Loan Documents including any portion of the Notes to any of the twelve
(12) Federal Reserve Banks organized under Section 4 of the Federal Reserve Act,
12 U.S.C. Section 341. No such pledge or enforcement thereof shall release
such Lender from its obligations under any of the Loan Documents.
(b) Notwithstanding the foregoing, any Lender (or any Lender together with
one or more other Lenders) may (x) assign all or a portion of its Commitments
and related outstanding Obligations (or, if the Commitments have terminated, its
outstanding Obligations) hereunder to (i)(A) its parent company and/or any
Affiliate of such Lender which is at least 50% owned by such Lender or its
parent company or (B) one or more other Lenders or (ii) in the case of any
Lender that is a fund that invests in bank loans, any other fund that invests in
bank loans and is managed by the same investment advisor of any Lender or by an
Affiliate of such investment advisor or (y) assign all, or if less than all, a
portion equal to at least $1,000,000 in the aggregate for the assigning Lender
or assigning Lenders of such Commitments and related outstanding Obligations
hereunder (or, if the Commitments have terminated, its outstanding Obligations)
to an Eligible Transferee (treating any fund that invests in bank loans and any
other fund that invests in bank loans and is managed or advised by the same
investment advisor of such fund or by an Affiliate of such investment advisor as
a single Eligible Transferee), each of which assignees shall become a party to
this Agreement as a Lender by execution of an Assignment and Assumption
Agreement (it being understood that any assignment pursuant to clause (y) above
by any Lender described in preceding clause (x)(ii) must meet the $1,000,000
minimum described above unless the respective assignment is of all the
Commitments and related outstanding Obligations held by such Lender and any
other fund that invests in bank loans and is managed by the same investment
advisor of any Lender or by an Affiliate of such investment advisor), provided
that (i) at such time, Schedule 2 shall be deemed modified to reflect the
Commitments and/or outstanding Loans, as the case may be, of such new Lender and
of the existing Lenders, (ii) upon the surrender of the relevant Notes (if any)
by the assigning Lender (or, upon such assigning Lender's indemnifying the
Borrower for any lost Note pursuant to a customary indemnification agreement)
new Notes will be issued, at the Borrower's expense, to such new Lender and to
the assigning Lender upon the request of such new Lender or assigning Lender,
such new Notes to be in conformity with the requirements of this Agreement (with
appropriate modifications) to the extent needed to reflect the revised
Commitments and/or outstanding Loans, as the case may be, (iii) the consent of
the Agent shall be required in connection with any such assignment pursuant to
clause (y) above or any such assignment of Revolving Loan Commitments pursuant
to clause (x) above (which consents shall not be unreasonably withheld or
delayed), (iv) the consent of the Issuing Lender shall be required in connection
with any such assignment of Revolving Loan Commitments (which consents shall not
be unreasonably withheld or delayed), (v) the Agent shall receive at the
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time of each such assignment, from the assigning or assignee Lender, the payment
of a non-refundable assignment fee of $3,500, and (vi) no such transfer or
assignment will be effective until recorded by the Agent on the Register
pursuant to Section 11.20. To the extent of any assignment pursuant to this
Section 11.4(b), the assigning Lender shall be relieved of its obligations
hereunder with respect to its assigned Commitments and outstanding Loans. At
the time of each assignment pursuant to this Section 11.4(b) to a Person which
is not already a Lender hereunder and which is not a United States person (as
such term is defined in Section 7701(a)(30) of the Internal Revenue Code of
1986, as amended) for federal income tax purposes, the respective assignee
Lender shall, to the extent legally entitled to do so, provide to the Borrower
the appropriate Internal Revenue Service forms. To the extent that an
assignment of all or any portion of a Lender's Commitments and related
outstanding Obligations would, at the time of such assignment, result in
increased costs greater than those being charged by the respective assigning
Lender prior to such assignment, then the Borrower shall not be obligated to pay
such increased costs (although the Borrower, in accordance with and pursuant to
the other provisions of this Agreement, shall be obligated to pay any other
increased costs of the type described above resulting from changes after the
date of the respective assignment).
Section 11.5 Costs, Expenses, and Taxes; Indemnification.
(a) The Borrower agrees to pay on demand all reasonable costs and expenses
in connection with the preparation, execution, delivery, filing, recording, and
administration of any of the Loan Documents, including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel for the Lenders with
respect thereto and with respect to advising the Lenders as to their rights and
responsibilities under any of the Loan Documents including without limitation,
ongoing advice following the effectiveness of this Agreement and all costs and
expenses, if any, in connection with the protection, collection and/or other
enforcement of this Agreement or any of the other Loan Documents. In addition,
the Borrower shall pay any and all stamp and other taxes and fees payable or
determined to be payable in connection with the execution, delivery, filing, and
recording of any of the Loan Documents and the other documents to be delivered
under any of the Loan Documents, and agrees to hold and save the Agent and each
Lender harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or failure to pay such taxes and fees.
(b) To the fullest extent permitted by applicable law, the Borrower shall
defend, indemnify and hold harmless the Agent, each Lender, any other holder of
the Notes and each of the present and future shareholders, partners, directors,
officers, employees, agents, counsel and successors and assigns of each of them
(collectively with the Agent and each Lender the "Lender Parties") from and
against any and all loss, cost, expense, claim, liability (including strict
liability) or asserted liability incurred from or out of the Loans, the
execution, delivery or performance of this Agreement, or any of the documents or
instruments to be executed and delivered hereunder, or otherwise arising out of
the debtor/creditor relationship between them, the Agent and each Lender or the
other Lender Parties relating to the Loans, the exercise of any of the Agent's
and each Lender's rights under the Loan Documents, any litigation or proceeding
instituted or conducted by any Governmental Authority, any act or omission of
the Borrower
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or otherwise, except to the extent (and only to the extent) that the same arises
from the gross negligence or willful misconduct of the Agent or any Lender.
(c) Without limiting the generality of the preceding subparagraph (b), the
Borrower agrees to defend, protect, indemnify and hold harmless the Lender
Parties from and against, and to reimburse the Lender Parties on demand with
respect to, any and all matters of any and every kind or character, known or
unknown, fixed or contingent, asserted against or incurred by Lender Parties at
any time and from time to time by reason of or arising out of any violation of
any Environmental Laws, the presence, disposal, escape, seepage, leakage,
spillage, discharge, emission, release or threatened release of any Contaminant
or any action, suit, proceeding or investigation brought or threatened with
respect to any Contaminant (including, but not limited to, claims with respect
to wrongful death, personal injury or damage to property), in each case,
including, without limitation, the reasonable fees and disbursements of counsel
and allocated costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding.
(d) The obligations of the Borrower described in this Section 11.5 shall
survive the closing of the transactions described in this Agreement, including
the making of any and all Loans and the payment and satisfaction of the Notes.
Section 11.6 Right of Setoff. The Agent and each Lender are hereby
authorized at any time and from time to time without notice to the Borrower (any
such notice being expressly waived by the Borrower), to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by the Agent or such
Lender to or for the credit or the account of the Borrower against any and all
of the Obligations of the Borrower now or hereafter existing under this
Agreement or the Notes or any of the other Loan Documents, irrespective of
whether or not Lender shall have made any demand under this Agreement or the
Notes or such other Loan Document and although such obligations may be
unmatured. The Agent or such Lender agrees promptly to notify the Borrower
after any such setoff and application, provided that the failure to give such
notice shall not affect the validity of such setoff and application. The rights
of the Agent and each Lender under this Section 11.6 are in addition to other
rights and remedies (including, without limitation, other rights of setoff)
which the Agent or such Lender may have. ANY AND ALL RIGHTS TO REQUIRE THE
AGENT OR ANY LENDER TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER
COLLATERAL WHICH SECURES THE LOANS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH
RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER, ARE HEREBY
KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.
Section 11.7 Cross-Collateralization. All Collateral which the Lenders
may at any time acquire from the Borrower or Guarantors or from any other source
in connection with the Obligations arising under this Agreement and the other
Loan Documents shall constitute Collateral for each and every Obligation,
without apportionment or designation as to particular Obligations. All
Obligations, however and whenever incurred shall be secured by all of the
Collateral, however and whenever acquired. The Lenders shall have the right in
their sole discretion to
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determine the order in which the Lenders' rights in or remedies against any
Collateral are to be exercised and which type of Collateral or which portions of
Collateral are to be proceeding against and the order of application of proceeds
of Collateral as against particular Obligations.
Section 11.8 Governing Law; Jurisdiction.
(a) This Agreement, the Notes and the other Loan Documents shall be
construed in accordance with and governed by the laws of the State of
Connecticut without regard to its conflict of laws rules.
(b) The Borrower hereby irrevocably submits to the jurisdiction of any
Connecticut State or United States Federal court sitting in Connecticut over any
action or proceeding arising out of or relating to this Agreement, the Notes or
the other Loan Documents, and the Borrower hereby irrevocably agrees that all
claims in respect of such action or proceeding may be heard and determined in
such Connecticut State or Federal court. The Borrower irrevocably consents to
the service of any and all process in any such action or proceeding by the
mailing of copies of such process to the Borrower at its address specified in
Section 11.2. The Borrower agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. The Borrower
further waives any objection to venue in such state and any objection to an
action or proceeding in such State on the basis of forum non conveniens. The
Borrower further agrees that any action or proceeding brought against the Agent
or any Lender shall be brought only in Connecticut State or United States
Federal courts sitting in Connecticut.
(c) Nothing in this Section 11.8 shall affect the right of the Agent or
any Lender to serve legal process in any other manner permitted by law or affect
the right of the Agent or any Lender to bring any action or proceeding against
the Borrower or its property in the courts of any other jurisdiction.
(d) To the extent that the Borrower has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether from
service or notice, attachment prior to judgment, attachment in aid of execution,
execution or otherwise) with respect to itself or its property, such Person
hereby irrevocably waives such immunity in respect of its obligations under this
Agreement, the Notes and the other Loan Documents.
(e) THE BORROWER ACKNOWLEDGES AND AGREES THAT THE TRANSACTIONS ARE
COMMERCIAL TRANSACTIONS AND IT HEREBY WAIVES ANY RIGHT TO NOTICE AND HEARING AS
MAY BE ALLOWED UNDER CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES, AS
AMENDED, OR AS OTHERWISE ALLOWED BY ANY STATE OF FEDERAL LAW WITH RESPECT TO ANY
PREJUDGMENT REMEDY AND PREJUDGMENT REMEDY WITHOUT COURT ORDER, PROVIDED THE
COMPLAINT SETS FORTH A COPY OF THE WAIVER AND WAIVES ANY CLAIM IN TORT, CONTRACT
OR OTHERWISE AGAINST LENDERS' ATTORNEYS WHICH MAY ARISE OUT OF SUCH ISSUANCE OF
A WRIT FOR A PREJUDGMENT REMEDY WITHOUT COURT ORDER. FURTHER, TO THE EXTENT
ALLOWED UNDER
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APPLICABLE LAW, BORROWER HEREBY WAIVES DEMAND, PRESENTMENT FOR PAYMENT, PROTEST,
NOTICE OF PROTEST, NOTICE OF DISHONOR, DILIGENCE IN COLLECTION, NOTICE OF
NONPAYMENT OF ANY NOTE AND ANY AND ALL NOTICES OF A LIKE NATURE. THE BORROWER
ACKNOWLEDGES THAT IT MAKES THIS WAIVER KNOWINGLY, VOLUNTARILY AND WITHOUT
DURESS, AND ONLY AFTER EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF THIS
WAIVER WITH ITS ATTORNEYS.
Section 11.9 Entire Agreement; Severability of Provisions.
(a) This Agreement and the other Loan Documents collectively constitute
the entire agreement and understanding between the parties hereto relating to
the transactions contemplated by this Agreement and supersede any and all
contemporaneous and prior agreements, representations, arrangements and
understandings (written or oral, express or implied) relating to the subject
matter hereof.
(b) If any term or provision of any of the Loan Documents or the
application thereof to any circumstance shall, in any jurisdiction and to any
extent, be invalid or unenforceable, such term or provision shall be ineffective
as to such jurisdiction only to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable the remaining
terms and provisions thereof or the application of such term or provision to
circumstances other than those as to which it is held invalid or unenforceable.
Section 11.10 Estoppel Certificates. Within fifteen (15) days after the
Agent requests the Borrower to do so, the Borrower shall cause its chief
financial officer to duly execute and deliver to the Agent a statement
certifying (a) that this Agreement, the Notes, and the other Loan Documents to
which the Borrower is a party are in full force and effect and have not been
modified except as described in said statement, (b) the date to which interest
on the Notes has been paid, (c) the unpaid principal balance of the Notes, (d)
whether to the Borrower's knowledge a Default or an Event of Default has
occurred and is continuing, and if so, describing in reasonable detail each such
Default or such Event of Default of which it has knowledge, (e) whether to its
knowledge the Borrower has any defense, setoff, or counterclaim to the payment
or performance of any of its obligations in accordance with the respective terms
of this Agreement, the Notes, and the other Loan Documents, as the case may be,
and, if so, describing each defense, setoff, or counterclaim of which it has
knowledge in reasonable detail (including where applicable the amount thereof),
and (f) as to any other matter reasonably requested by the Agent.
Section 11.11 Waiver of Jury Trial and Consequential Damages.
(a) THE BORROWER AND THE LENDERS EACH HEREBY EXPRESSLY WAIVES ANY AND ALL
RIGHTS IT MAY HAVE TO TRIAL BY JURY IN ANY COURT OF ANY CLAIM, DEMAND, ACTION,
OR CAUSE OF ACTION (1) ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT,
DOCUMENT, OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (2) IN
ANY WAY
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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 THE BORROWER
AND THE LENDERS EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND,
ACTION, OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND
THE AGENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 11.11 WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH OF THEM TO THE WAIVER OF
ITS RIGHT TO TRIAL BY JURY. THE BORROWER AND THE LENDERS EACH ACKNOWLEDGES THAT
IT MAKES THIS WAIVER KNOWINGLY, VOLUNTARILY AND WITHOUT DURESS, AND ONLY AFTER
EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH ITS ATTORNEYS.
(b) NONE OF THE AGENT, ANY LENDER, BORROWER, OR ANY AGENT OR ATTORNEY OF
EITHER OF THEM SHALL BE LIABLE TO ANY OF THE OTHERS FOR PUNITIVE OR
CONSEQUENTIAL DAMAGES ARISING FROM ANY BREACH OF CONTRACT, TORT, OR OTHER WRONG
RELATING TO THE ESTABLISHMENT, ADMINISTRATION, OR COLLECTION OF THE OBLIGATIONS
RELATING IN ANY WAY TO THIS AGREEMENT, THE NOTES, OR ANY OF THE OTHER LOAN
DOCUMENTS, OR THE ACTION OR INACTION OF ANY OF SUCH PERSONS UNDER ANY ONE OR
MORE HEREOF OR THEREOF.
(c) IN THE EVENT THE AGENT SEEKS TO TAKE POSSESSION OF ANY OR ALL OF THE
COLLATERAL BY COURT PROCESS OR OTHER METHOD AVAILABLE UNDER THE LAW, BORROWER
IRREVOCABLY WAIVES ANY BOND AND ANY SURETY OR SECURITY RELATING THERETO REQUIRED
BY ANY STATUTE, COURT RULE OR OTHERWISE AS AN INCIDENT TO SUCH POSSESSION, AND
WAIVES ANY DEMAND FOR POSSESSION PRIOR TO THE COMMENCEMENT OF ANY SUIT OR ACTION
TO RECOVER WITH RESPECT THERETO. BORROWER FURTHER WAIVES THE BENEFIT OF ALL
VALUATION, APPRAISEMENT AND EXEMPTION LAWS.
Section 11.12 Replacement of the Note. Upon receipt by the Borrower of
evidence reasonably satisfactory to it of the ownership of and the loss, theft,
destruction, or mutilation of any Note, and (a) in the case of loss, theft, or
destruction, of indemnity reasonably satisfactory and furnished without cost to
the Borrower (provided, if the holder of such Note is a Lender or a bank,
insurance company, or other institutional lender, its own unsecured agreement of
indemnity shall be satisfactory), or (b) in the case of mutilation, upon
surrender and cancellation thereof, the Borrower will execute and deliver in
lieu thereof a replacement Note of like tenor.
Section 11.13 Survival of Representations and Warranties. All
representations, warranties, and covenants made by the Borrower in this
Agreement or any of the other Loan Documents or in any certificate or other
writing delivered by it or on its behalf thereunder shall
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be considered to have been relied upon by the Agent and each Lender and shall
survive the delivery of this Agreement and the other Loan Documents. All
statements in any such certificate or other writing shall constitute
representations and warranties of the Borrower hereunder.
Section 11.14 Further Assurances. The Borrower from time to time shall
execute and deliver to the Lenders such additional documents and will provide
such additional information as the Agent may reasonably require to carry out the
terms of this Agreement and to keep the Agent and each Lender informed of the
status and affairs of the Borrower.
Section 11.15 Construction. Each covenant contained in this Agreement
shall be construed (absent an express contrary provision therein) as being
independent of each other covenant contained herein, and compliance with any one
covenant shall not (absent such an express contrary provision) be deemed to
excuse compliance with any other covenant.
Section 11.16 Captions. Article and Section titles in the Loan Documents,
and any table of contents, are included for convenience only and do not define,
limit, or describe the scope of the provisions thereof.
Section 11.17 Counterparts. This Agreement may be executed and delivered
in any number of counterparts. Each counterpart shall constitute an original,
but all counterparts together shall constitute but one and the same agreement.
Section 11.18 Maximum Rate of Interest. All agreements between the
Borrower, the Agent and each Lender are hereby expressly limited so that in no
contingency or event whatsoever, whether by reason of acceleration or maturity
of the indebtedness evidenced hereby or otherwise, shall the amount paid or
agreed to be paid to the Agent and each Lender for the use or the forbearance of
the indebtedness under the Loan Documents exceed the maximum permissible under
applicable law. As used herein, the term "applicable law" shall mean the law in
effect as of the date hereof provided, however that in the event there is a
change in the law which results in a higher permissible rate of interest, then
this Agreement and the Notes shall be governed by such new law as of its
effective date. In this regard, it is expressly agreed that it is the intent of
the Borrower, the Agent and each Lender in the execution, delivery and
acceptance of this Agreement and the Notes to contract in strict compliance with
the laws of the State of Connecticut from time to time in effect. If, under or
from any circumstances whatsoever, fulfillment of any provision hereof or of any
of the Loan Documents at the time of performance of such provision shall be due,
shall involve transcending the limit of such validity prescribed by applicable
law, then the obligation to be fulfilled shall automatically be reduced to the
limits of such validity, and if under or from circumstances whatsoever the Agent
or any Lender should ever receive as interest an amount which would exceed the
highest lawful rate, such amount which would be excessive interest shall be
applied to the reduction of the principal balance evidenced hereby and not to
the payment of interest. This provision shall control every other provision of
all agreements between the Borrower, the Agent and each Lender.
Section 11.19 Domicile of Loans. Each Lender may transfer and carry its
Loans at, to or for the account of any office, subsidiary or affiliate of such
Lender. Notwithstanding anything
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to the contrary contained herein, to the extent that a transfer of Loans
pursuant to this Section 11.19 would, at the time of such transfer, result in
increased costs under Section 2.8 or 2.9 from those being charged by the
respective Lender prior to such transfer, then the Borrower shall not be
obligated to pay such increased costs (although the Borrower shall be obligated
to pay any other increased costs of the type described above resulting from
changes after the date of the respective transfer).
Section 11.20 Register. The Borrower hereby designates the Agent to serve
as its agent, solely for purposes of this Section 11.20, to maintain a register
(the "Register") on which it will record the Commitments from time to time of
each of the Lenders, the Loans made by each of the Lenders and each repayment in
respect of the principal amount of the Loans of each Lender. Failure to make
any such recordation, or any error in such recordation, shall not affect the
Borrower's obligations hereunder or under any other Loan Document. With respect
to any Lender, the transfer of the Commitments of such Lender and the rights to
the principal of, and interest on, any Loan made pursuant to such Commitments
shall not be effective until such transfer is recorded on the Register and prior
to such recordation all amounts owing to the transferor with respect to such
Commitments and Loans shall remain owing to the transferor. The registration of
assignment or transfer of all or part of any Commitments and Loans shall be
recorded by the Agent on the Register only upon the acceptance by the Agent of a
properly executed and delivered Assignment and Assumption Agreement pursuant to
Section 11.4(b). Coincident with the delivery of such an Assignment and
Assumption Agreement to the Agent for acceptance and registration of assignment
or transfer of all or part of a Loan, or as soon thereafter as practicable, the
assigning or transferor Lender shall surrender the Note (if any) evidencing such
Loans, and thereupon one or more new Notes in the same aggregate principal
amount shall be issued to the assigning or transferor Lender and/or the new
Lender at the request of any such Lender. The Borrower agrees to indemnify the
Agent from and against any and all losses, claims, damages and liabilities of
whatsoever nature which may be imposed on, asserted against or incurred by the
Agent in performing its duties under this Section 11.20 except to the extent
resulting from the Agent's gross negligence or willful misconduct.
Section 11.21 Confidentiality.
(a) Subject to the provisions of clause (b) of this Section 11.21, each
Lender agrees that it will use its reasonable efforts not to disclose without
the prior consent of the Borrower (other than to its affiliates, employees,
auditors, advisors or counsel or to another Lender if such Lender or such
Lender's holding or parent company in its sole discretion determines that any
such party should have access to such information, provided such Persons shall
be directed to keep such information confidential as provided in this Section
11.21) any information with respect to the Borrower or any of its Subsidiaries
which is now or in the future furnished by or on behalf of the Borrower or any
of its Subsidiaries pursuant to this Agreement or any other Loan Document which
information is, at the time of its disclosure, confidential and/or proprietary
and clearly identified as such in writing, provided, that any Lender may
disclose any such information (i) as has become generally available to the
public other than by virtue of a breach of this Section 11.21(a) by the
respective Lender, (ii) as may be required or appropriate in any report,
statement or testimony submitted to any municipal, state or Federal regulatory
body having or claiming to
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have jurisdiction over such Lender or to the Federal Reserve Board or the
Federal Deposit Insurance Corporation or similar organizations (whether in the
United States or elsewhere) or their successors, (iii) as may be required or
appropriate in respect of any summons or subpoena or in connection with any
litigation, (iv) in order to comply with any law, order, regulation or ruling
applicable to such Lender, (v) to the Agent, (vi) to any direct or indirect
contractual counterparty in any swap, hedge or similar agreement (or to any such
contractual counterparty's professional advisor), so long as such contractual
counterparty (or such professional advisor) agrees to be bound by the provisions
of this Section 11.21 and (vii) to any prospective or actual transferee or
participant in connection with any contemplated transfer or participation of any
of the Notes or Commitments or any interest therein by such Lender, provided
that such prospective transferee agrees to be bound by the confidentiality
provisions contained in this Section 11.21.
(b) The Borrower hereby acknowledges and agrees that each Lender may share
with any of its affiliates, and such affiliates may share with such Lender, any
information related to the Borrower or the Guarantors (including, without
limitation, any non-public customer information regarding the creditworthiness
of the Borrower and the Guarantors), provided, such Persons shall be subject to
the provisions of this Section 11.21 to the same extent as such Lender.
[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the date first above written.
WITNESSES: BORROWER:
TRANS-LUX CORPORATION
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
______________________ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
By:___________________________
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
______________________ Its: Executive Vice President
AGENT:
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ PEOPLE'S BANK
______________________
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By:___________________________
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
______________________ Its Vice President
LENDERS:
THE BANK OF NEW YORK
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
______________________
/s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇
By:___________________________
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ J. ▇▇▇▇▇ ▇▇▇▇▇▇
______________________ Its: Vice President
PEOPLE'S BANK
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
______________________ /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By:___________________________
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
______________________ Its Vice President
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