EXHIBIT 10.5
================================================================================
AMENDED AND RESTATED
CREDIT AGREEMENT
DATED AS OF JUNE 21, ▇▇▇▇
▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, N.A.
AS ADMINISTRATIVE AGENT,
LASALLE BANK NATIONAL ASSOCIATION,
AS CO-SYNDICATION AGENT,
FLEET NATIONAL BANK,
AS CO-SYNDICATION AGENT,
AND
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
================================================================================
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS...........................................................................1
1.1. Defined Terms......................................................................1
1.2. Other Interpretive Provisions.....................................................26
(a) Defined Terms..............................................................26
(b) The Agreement..............................................................26
(c) Certain Common Terms.......................................................26
(d) Performance; Time..........................................................27
(e) Contracts..................................................................27
(f) Laws.......................................................................27
(g) Captions...................................................................27
(h) Independence of Provisions.................................................27
(i) Interpretation.............................................................27
1.3. Accounting Principles.............................................................28
ARTICLE II THE CREDITS.........................................................................28
2.1. Amounts and Terms of Commitments..................................................28
(a) The Term Commitments.......................................................28
(b) The Revolving Commitments..................................................29
2.2. Notes.............................................................................29
2.3. Procedure for Borrowing and Issuance of Letters of Credit.........................30
2.4. Conversion and Continuation Elections.............................................31
2.5. Voluntary Termination or Reduction of Revolving Commitments.......................33
2.6. Optional Prepayments..............................................................33
2.7. Mandatory Prepayments of Loans for Asset Dispositions.............................34
2.8. Repayment.........................................................................34
(a) The Term Loan..............................................................34
(b) The Revolving Loans........................................................35
2.9. Interest..........................................................................35
2.10....Fees .............................................................................36
(a) Fee Letters................................................................36
(b) Non-Use Fee................................................................36
(c) Letter of Credit Fees......................................................37
2.11....Computation of Fees and Interest..................................................37
2.12....Payments by the Company...........................................................38
2.13....Payments by the Lenders to the Administrative Agent...............................39
2.14....Sharing of Payments, Etc..........................................................39
2.15....Certain Letter of Credit Provisions...............................................40
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY.............................................43
3.1. Taxes.............................................................................43
3.2. Illegality........................................................................46
-i-
3.3. Increased Costs and Reduction of Return...........................................47
3.4. Funding Losses....................................................................47
3.5. Inability to Determine Rates......................................................48
3.6. Certificates of the Lenders.......................................................48
3.7. Replacement of Certain Lenders....................................................49
3.8. Survival..........................................................................49
ARTICLE IV CONDITIONS PRECEDENT................................................................49
4.1. Conditions of Initial Loans.......................................................49
(a)
Credit Agreement and Notes.................................................49
(b) Resolutions; Incumbency....................................................50
(c) Articles of Incorporation; By-laws and Good Standing.......................50
(d) Collateral Documents.......................................................50
(e) Legal Opinions.............................................................51
(f) Payment of Fees............................................................51
(g) Closing Certificate........................................................52
(h) Financial Statements.......................................................52
(i) Consents ..................................................................52
(j) Due Diligence..............................................................52
(k) Fee Letters................................................................52
(l) Closing Date Borrowing Certificate.........................................52
(m) Field Examination..........................................................53
(n) Release of Certain Collateral..............................................53
(o) Other Documents............................................................53
4.2. Conditions to All Borrowings and Issuance of Letters of Credit....................53
(a) Notice of Borrowing or Continuation/Conversion.............................53
(b) Continuation of Representations and Warranties.............................53
(c) No Existing Default........................................................54
(d) Overadvance................................................................54
ARTICLE V REPRESENTATIONS AND WARRANTIES.......................................................54
5.1. Corporate Existence and Power.....................................................54
5.2. Corporate Authorization; No Contravention.........................................55
5.3. Governmental Authorization........................................................55
5.4. Binding Effect....................................................................55
5.5. Litigation........................................................................55
5.6. No Default........................................................................56
5.7. Intentionally Omitted.............................................................56
5.8. Use of Proceeds; Margin Regulations...............................................56
5.9. Title to Properties...............................................................56
5.10....Taxes.............................................................................56
5.11....Financial Condition...............................................................57
5.12....Environmental Matters.............................................................57
5.13....Regulated Entities................................................................58
5.14....No Burdensome Restrictions........................................................58
-ii-
5.15....Solvency .........................................................................58
5.16....Labor Relations. .................................................................58
5.17....Copyrights, Patents, Trademarks and Licenses, etc.................................58
5.18....Subsidiaries; Capitalization......................................................59
5.19....Broker's; Transaction Fees........................................................59
5.20....Insurance. .......................................................................59
5.21....Business and Collateral Locations.................................................60
5.22....Full Disclosure. .................................................................60
5.23....ERISA Matters. ...................................................................60
ARTICLE VI AFFIRMATIVE COVENANTS...............................................................61
6.1. Financial Statements..............................................................61
6.2. Certificates; Other Information...................................................62
6.3. Notices...........................................................................63
6.4. Preservation of Corporate Existence, Etc..........................................65
6.5. Maintenance of Property...........................................................65
6.6. Insurance.........................................................................65
6.7. Payment of Obligations............................................................67
6.8. Compliance with Laws..............................................................67
6.9. Inspection of Property and Books and Records......................................68
6.10....Environmental Laws................................................................68
6.11....Use of Proceeds...................................................................68
6.12....Solvency..........................................................................69
6.13....Subsidiaries......................................................................69
6.14....Further Assurances................................................................69
6.15....Interest Rate Protection..........................................................70
6.16....Depository Accounts...............................................................70
ARTICLE VII NEGATIVE COVENANTS.................................................................70
7.1. Limitation on Liens...............................................................70
7.2. Disposition of Assets.............................................................72
7.3. Consolidations and Mergers........................................................72
7.4. Loans and Investments.............................................................72
7.5. Limitation on Indebtedness........................................................73
7.6. Transactions with Affiliates......................................................74
7.7. Use of Proceeds...................................................................74
7.8. Contingent Obligations............................................................74
7.9. Joint Ventures....................................................................74
7.10....Unconditional Purchase Options....................................................74
7.11....Intentionally Omitted.............................................................75
7.12....Restricted Payments...............................................................75
7.13....Consolidated Net Worth............................................................75
7.14....Fixed Charge Coverage Ratio.......................................................76
7.15....Senior Funded Debt to EBITDA Ratio................................................76
7.16....Total Funded Debt to EBITDA Ratio.................................................76
-iii-
7.17....Intentionally Omitted.............................................................76
7.18....Change in Business................................................................76
7.19....Change in Structure...............................................................76
7.20....Accounting Changes................................................................76
7.21....Other Contracts...................................................................76
7.22....Management Fees...................................................................77
7.23....Subsidiaries......................................................................77
7.24....Pension Plans.....................................................................77
7.25....Amendment of Documents............................................................77
ARTICLE VIII EVENTS OF DEFAULT.................................................................77
8.1. Event of Default..................................................................77
(a) Non-Payment................................................................77
(b) Representation or Warranty.................................................78
(c) Specific Defaults..........................................................78
(d) Other Defaults.............................................................78
(e) Cross-Default..............................................................78
(f) Insolvency; Voluntary Proceedings..........................................79
(g) Involuntary Proceedings....................................................79
(h) Monetary Judgments.........................................................79
(i) Non-Monetary Judgments.....................................................79
(j) Collateral.................................................................79
(k) Change of Control..........................................................80
(l) Adverse Change.............................................................80
(m) Loan Party Defaults........................................................80
(n) ERISA Liabilities..........................................................80
(o) ▇▇▇▇▇ Stock Ownership......................................................81
8.2. Remedies..........................................................................81
8.3. Rights Not Exclusive..............................................................81
ARTICLE IX THE AGENTS........................................................................81
9.1. Appointment and Authorization.....................................................81
9.2. Delegation of Duties..............................................................82
9.3. Liability of the Administrative Agent.............................................82
9.4. Reliance by the Administrative Agent..............................................83
9.5. Notice of Default.................................................................83
9.6. Credit Decision...................................................................84
9.7. Indemnification...................................................................84
9.8. Agents in Their Individual Capacity...............................................85
9.9. Successor Administrative Agent....................................................85
9.10....Collateral Matters................................................................86
9.11....Co-Syndication Agents.............................................................87
ARTICLE X MISCELLANEOUS.....................................................................87
10.1....Amendments and Waivers............................................................87
10.2....Notices...........................................................................88
-iv-
10.3....No Waiver; Cumulative Remedies....................................................89
10.4....Costs and Expenses................................................................89
10.5....Indemnity.........................................................................89
(a) General Indemnity..........................................................90
(b) Environmental Indemnity....................................................90
(c) Survival; Defense..........................................................91
10.6....Marshalling; Payments Set Aside...................................................91
10.7....Successors and Assigns............................................................91
10.8....Assignments, Participations, etc..................................................91
10.9....Set-off...........................................................................94
10.10...Collateral Account................................................................94
10.11...Notification of Addresses, Lending Offices, Etc...................................95
10.12...Counterparts......................................................................95
10.13...Severability......................................................................96
10.14...No Third Parties Benefited........................................................96
10.15...Time..............................................................................96
10.16...Governing Law and Jurisdiction....................................................96
10.17...Waiver of Jury Trial..............................................................97
10.18...Automatic Debits of Fees..........................................................97
10.19...Entire Agreement..................................................................97
-v-
AMENDED AND RESTATED
CREDIT AGREEMENT
This AMENDED AND RESTATED
CREDIT AGREEMENT is entered into as of June
21, 2002, among
LKQ Corporation, a Delaware corporation (the "Company"), the
financial institutions from time to time party to this Agreement (collectively,
the "Lenders"; individually, a "Lender"), Bank of America, N.A., as
Administrative Agent for the Lenders, LaSalle Bank National Association, as
Co-Syndication Agent for the Lenders and Fleet National Bank, as Co-Syndication
Agent for the Lenders. This Agreement shall amend, restate, supersede and
replace in its entirety that certain
Credit Agreement dated as of November 12,
1999, as amended or otherwise modified through the date hereof, by and among the
Company, Lenders, Administrative Agent, LaSalle Bank National Association, as
syndication agent for the Lenders, and Banc of America Securities LLC, as
arranger (the "Original
Credit Agreement").
WHEREAS, pursuant to the Original
Credit Agreement, the Lenders made
available a revolving credit facility upon the terms and conditions set forth
therein; and
WHEREAS, the Lenders and the Company have agreed to amend and restate
the Original
Credit Agreement in order to provide for a revolving credit
facility and a term loan upon the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.1. DEFINED TERMS.
In addition to the terms defined elsewhere in this Agreement, the
following terms have the following meanings:
"Account Debtor" means any Person who is or who may become obligated
to any Loan Party, under, with respect to, or on account of an Account
Receivable, General Intangible or other Collateral.
"Account Receivable" means any "account" (as defined in the UCC) of
each Loan Party and other rights of each Loan Party to payment for goods sold or
leased or for services rendered, which are not evidenced by an instrument or
chattel paper and whether or not earned by performance.
"Acquisition" means the acquisition by the Company or any of its
Subsidiaries of all or substantially all of the Properties of any Person or a
division or business of any Person, or all or substantially all of the stock or
other ownership interests of any Person, including, without limitation, by means
of a merger or other combination.
"Administrative Agent" means BOA in its capacity as administrative
agent for the Lenders hereunder, and any successor administrative agent.
"Administrative Agent-Related Persons" means BOA and any successor
administrative agent arising under Section 9.9, together with Affiliates of BOA
or any such successor administrative agent, and the officers, directors,
employees, agents and attorneys-in-fact of such Persons and Affiliates.
"Administrative Agent's Payment Office" means the address for payments
set forth on the signature page hereto in relation to the Administrative Agent
or such other address as the Administrative Agent may from time to time specify
in accordance with Section 10.2.
"Affiliate" means, as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract or otherwise. Without
limitation, any director, executive officer or beneficial owner of 5% or more of
the equity of a Person shall for the purposes of this Agreement, be deemed to
control the other Person. Notwithstanding the foregoing, no Lender shall be
deemed an "Affiliate" of the Company or of any other Loan Party.
"Agents" means, collectively, the Administrative Agent and the
Co-Syndication Agents.
"Aggregate Commitment" means the combined Aggregate Revolving
Commitment and the Aggregate Term Commitment.
"Aggregate Revolving Commitment" means the combined Revolving
Commitments of the Lenders, in the initial aggregate principal amount of Forty
Million Dollars ($40,000,000), as such amount may be reduced from time to time
pursuant to this Agreement.
"Aggregate Term Commitment" means the combined Term Commitments of the
Lenders, in the initial aggregate principal amount of Twenty Million Dollars
($20,000,000), as such amount may be reduced from time to time pursuant to this
Agreement.
"Agreement" means this
Credit Agreement.
"Alternate Base Rate" means, for any day, the higher of: (a) the Base
Rate and (b) the Federal Funds Rate PLUS .50%.
"Applicable Margin" means at any time (a) with respect to the unpaid
principal amount of each IBOR Loan, the applicable percentage set forth below in
the column entitled "Applicable Margin for IBOR Loans" opposite the Total Funded
Debt to
-2-
EBITDA Ratio in effect at such time; (b) with respect to the unpaid principal
amount of each Base Rate Loan, the applicable percentage set forth below in the
column entitled "Applicable Margin for Base Rate Loans" opposite the Total
Funded Debt to EBITDA Ratio in effect at such time; and (c) with respect to the
non-use fees described in subsection 2.10(b), the applicable percentage set
forth below in the column entitled "Applicable Margin for Non-Use Fees" opposite
the Total Funded Debt to EBITDA Ratio in effect at such time, as follows:
Total Funded Debt Applicable Margin Applicable Margin Applicable Margin
to EBITDA Ratio for IBOR Loans For Base Rate Loans For Non-Use Fees
--------------- -------------- ------------------- ----------------
Less than or equal to 1.0 : 1.0 2.00% 0.50% 0.25%
Greater than 1.00 : 1.0 but less 2.25% 0.75% 0.30%
than or equal to 1.50 : 1.0
Greater than 1.50 : 1.0 but less 2.50% 1.00% 0.35%
than or equal to 2.00 : 1.0
Greater than 2.00 : 1.0 2.75% 1.25% 0.40%
The initial Applicable Margin for IBOR Loans, Base Rate Loans, and
Non-Use Fees shall be based on the above table and the Total Funded Debt to
EBITDA Ratio as set forth in the Company's unaudited financial statements for
the fiscal quarter, and related Compliance Certificate with respect to the 12
month period, ending March 31, 2002; and each initial Applicable Margin shall
remain in effect until the delivery of the Company's unaudited financial
statements with respect to the fiscal quarter, and related Compliance
Certificate with respect to the 12 month period, ending June 30, 2002.
Thereafter, the Applicable Margin shall be based on the Total Funded Debt to
EBITDA Ratio in effect as set forth in the Compliance Certificate most recently
delivered by the Company to the Administrative Agent. Changes in the Applicable
Margin resulting from a change in the Total Funded Debt to EBITDA Ratio shall
become effective upon delivery by the Company to the Administrative Agent of a
new Compliance Certificate pursuant to subsection 6.2(b). If the Company shall
fail to deliver a Compliance Certificate within 45 days after the end of any
fiscal quarter (or within 60 days after the end of any fiscal quarter that is
the last fiscal quarter in any fiscal year) as required pursuant to subsection
6.2(b), the Applicable Margin from and including the 46th day after the end of
such fiscal quarter (or the 61st day after the end of such fiscal quarter for
any fiscal quarter that is the last fiscal quarter in any fiscal year), to but
not including the date the Company delivers to the Administrative Agent a
Compliance Certificate shall conclusively be presumed to equal the highest
Applicable Margin specified in the above chart for the type of loan or fee.
Whenever a change in the Total Funded Debt to EBITDA Ratio results in an
adjustment to the Applicable Margin, the Company shall deliver to the
Administrative Agent, together with the required Compliance Certificate, a
Pricing Change Certificate.
"Assignee" has the meaning specified in subsection 10.8(a).
"Assignment and Acceptance" has the meaning specified in subsection
10.8(a).
-3-
"Attorney Costs" means and includes all reasonable disbursements and
reasonable fees of any law firm or other external counsel, the reasonable
allocated cost of internal legal services and all reasonable disbursements of
internal counsel.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
U.S.C. Section 101, ET SEQ.).
"Base Rate" means, for any day the rate of interest in effect for such
day as publicly announced from time to time by BOA in Chicago,
Illinois, as its
"reference rate" (such rate set by BOA based upon various factors including
BOA's costs and desired return, general economic conditions and other factors,
and used as a reference point for pricing some loans, which may be priced at,
above, or below such announced rate). Any change in the reference rate announced
by BOA shall take effect at the opening of business on the day specified in the
public announcement of such change.
"Base Rate Loan" means a Loan that bears interest based on the
Alternative Base Rate.
"BOA" means Bank of America, NA., a national banking association.
"Borrowing" means a borrowing hereunder consisting of Loans made to
the Company on the same day by the Lenders pursuant to Article II.
"Borrowing Base" means an amount equal to the sum of (a) 80% of the
net amount of Eligible Accounts Receivable, PLUS (b) 50% of the value (at the
lower of cost or market) of Eligible Inventory consisting of automobiles and
automobile parts, LESS (c) the LC Amount and LESS (d) such reserves (including
without limitation reserves for rebates) as the Administrative Agent elects to
establish on the Closing Date or from time to time thereafter (i) in its
reasonable credit judgment exercised in good faith, based on the results of
field examinations performed pursuant to Section 6.9 with a methodology
consistent with that employed in the field examination completed prior to the
date hereof, and that reflects a material adverse change to Borrower's Accounts
Receivable or Inventory or (ii) otherwise during the existence of an Event of
Default. Such reserves shall not be established with respect to any matters that
have been taken into account in determining Eligible Accounts Receivable or
Eligible Inventory.
"Borrowing Base Certificate" means a certificate in the form of
EXHIBIT J attached hereto, executed and certified as accurate by a Responsible
Officer.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks in Chicago or San Francisco are authorized or
required by law to close; PROVIDED, that with respect to all notices,
determinations, continuances, conversions, fundings and payments in connection
with IBOR Loans, a Business Day shall not include any day on which trading by
and between banks in Dollar deposits may not be carried on in the applicable
interbank market.
-4-
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any other law,
rule or regulation, whether or not having the force of law, in each case,
regarding capital adequacy of any bank or of any corporation controlling a bank.
"Capital Expenditures" means, for any period and with respect to any
Person, the aggregate of all expenditures paid by such Person and its
Subsidiaries for the acquisition or leasing of fixed or capital assets or
additions to equipment (including replacements, capitalized repairs and
improvements during such period) which should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Subsidiaries.
"Capital Lease" means, with respect to any Person, any leasing or
similar arrangement which, in accordance with GAAP, is classified as a capital
lease on a consolidated balance sheet of such Person.
"Capital Lease Obligations" means, with respect to any Person, without
duplication, the principal component of all monetary obligations of such Person
or any of its Subsidiaries under Capital Leases of such Person or any such
Subsidiary.
"Cash Equivalents" means:
(a) securities issued or fully guaranteed or insured by the United
States Government or any agency thereof and backed by the full faith and credit
of the United States having maturities of not more than six months from the date
of acquisition;
(b) certificates of deposit, time deposits, Eurodollar time
deposits, repurchase agreements, reverse repurchase agreements, or bankers'
acceptances, having in each case a tenor of not more than six months, issued by
any bank, or by any U.S. commercial bank or any branch or agency of a non-U.S.
bank licensed to conduct business in the U.S. having combined capital and
surplus of not less than One Hundred Million Dollars ($100,000,000) whose short
term securities are rated at least A-1 by Standard & Poor's Corporation and P-1
by ▇▇▇▇▇'▇ Investors Service Inc., and not subject to any right of setoff by
such issuer (other than any such issuer that is also a Lender); and
(c) commercial paper of an issuer rated at least A-1 by Standard &
Poor's Corporation or P-1 by ▇▇▇▇▇'▇ Investors Service Inc. and in either case
having a tenor of not more than six months.
"CERCLA" has the meaning specified in the definition of "Environmental
Laws."
"Change of Control" means that any Person that is not currently a
shareholder of the Company acquires, in one or more transactions, 51% or more,
in the aggregate, of the issued and outstanding voting stock of the Company.
-5-
"Closing Date" means the date on which all conditions precedent set
forth in Section 4.1 are satisfied or waived by the Administrative Agent and all
the Lenders.
"Closing Date Outstandings" means the outstanding principal balance on
the Closing Date of the loans made under the Original
Credit Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder.
"Collateral" means all property and interests in property and proceeds
thereof now owned or hereafter acquired by the Company or any other Loan Party
in or upon which a Lien now or hereafter exists in favor of any Lender, or the
Administrative Agent for the benefit of the Agents and the Lenders, whether
under this Agreement, the Collateral Documents or under any other documents.
"Collateral Account" has the meaning specified in Section 10.10.
"Collateral Documents" means the Company Security Agreement, the Loan
Party Security Agreement, the Loan Party Guaranty, the Company Pledge Agreement,
and all other security agreements, mortgages, deeds of trust, patent and
trademark assignments, lease assignments, guarantees and other similar
agreements executed by the Company or any other Loan Party in connection with
granting a Lien in favor of any Lender, or any Agent, for the benefit of the
Agents and the Lenders, and all financing statements (or comparable documents
now or hereafter filed in accordance with the UCC or comparable law) against the
Company or any other Loan Party as debtor in favor of any Lender or any Agent,
for the benefit of the Agents and the Lenders, as secured party.
"Commitment" means, for each Lender, the aggregate of its Revolving
Commitment and its Term Commitment.
"Commitment Percentage" means, as to any Lender, the percentage
equivalent of the sum of such Lender's Revolving Commitment and Term Commitment,
divided by the Aggregate Commitment.
"Company" has the meaning specified in the introductory clause hereto.
"Company Pledge Agreement" means the Pledge Agreement executed by the
Company and delivered to the Administrative Agent on the Original Closing Date,
as amended to date and from time to time hereafter.
"Company Security Agreement" means the Security Agreement executed by
the Company and delivered to the Administrative Agent on the Original Closing
Date, as amended to date and from time to time hereafter.
"Compliance Certificate" means a certificate duly completed and
executed by a Responsible Officer of the Company, substantially in the form of
EXHIBIT A hereto.
-6-
"Consolidated Net Cash Interest Expense" means, as to any Person for
any period, gross consolidated cash interest expense payable by such Person
during such period (including all commissions, discounts, fees and other charges
paid in connection with standby letters of credit and similar instruments) in
respect of all Indebtedness (including without limitation Subordinated Debt) for
such Person, PLUS (a) the portion of the upfront costs and expenses for Rate
Contracts (to the extent not included in gross consolidated interest expense) of
such Person fairly allocated to such Rate Contracts as expenses and payable by
such Person during such period, PLUS (b) fees payable by such Person pursuant to
Section 2.10 (to the extent not included in gross consolidated interest expense)
during such period, PLUS (c) the portion of any payments made by such Person in
respect of Capital Leases of such Person allocated to interest expense (to the
extent not included in gross consolidated interest expense) during such period,
LESS (d) interest income of such Person for such period and Rate Contracts
payments received by such Person during such period; LESS (e) in the case of the
Company, fees paid by the Company during such period pursuant to Section
2.10(a); all as determined in accordance with GAAP for such Person and its
Subsidiaries.
"Contingent Obligation" means, as to any Person, (a) any Guaranty
Obligation of that Person; and (b) any direct or indirect obligation or
liability, contingent or otherwise, of that Person, (i) in respect of any Surety
Instrument issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings or payments, (ii) to purchase any
materials, supplies or other Property from, or to obtain the services of,
another Person if the relevant contract or other related document or obligation
requires that payment for such materials, supplies or other Property, or for
such services, shall be made regardless of whether delivery of such materials,
supplies or other Property is ever made or tendered, or such services are ever
performed or tendered, or (iii) in respect of any Rate Contract that is not
entered into in connection with a bona fide hedging operation that provides
benefits to such Person. The amount of any Contingent Obligation shall (subject,
in the case of Guaranty Obligations, to the last sentence of the definition of
"Guaranty Obligation") be deemed equal to the maximum reasonably anticipated
liability in respect thereof, and shall, with respect to item (b)(iii) of this
definition, be marked to market on a current basis.
"Contractual Obligations" means, as to any Person, any obligation or
liability under any security issued by such Person or of any agreement,
undertaking, contract, indenture, mortgage, deed of trust or other instrument,
document or agreement to which such Person is a party or by which it or any of
its property is bound.
"Conversion Date" means any date on which the Company converts a Base
Rate Loan to an IBOR Loan, or an IBOR Loan to a Base Rate Loan.
"Co-Syndication Agent" means each of LaSalle and Fleet, each in its
capacity as a co-syndication agent for the Lenders hereunder.
-7-
"Default" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured or otherwise remedied
during such time) constitute an Event of Default.
"Disbursement Date" has the meaning specified in subsection 2.15(b).
"Disposition" means (i) the sale, lease, conveyance or other
disposition of Property, other than sales or other dispositions expressly
permitted under subsection 7.2(a) or 7.2(b), and (ii) the sale or transfer by
the Company or any Subsidiary of the Company of any equity securities issued by
any Subsidiary of the Company to any Person other than the Company or any
Subsidiary of the Company.
"Dollars", "dollars" and "$" each mean lawful money of the United
States.
"Domestic Lending Office" means, with respect to each Lender, the
office of that such Lender designated as such in the signature pages hereto or
such other office of such Lender as it may from time to time specify to the
Company and the Administrative Agent.
"EBITDA" means, for any period, for any Person, determined for such
Person and its Subsidiaries on a consolidated basis and in accordance with GAAP,
the sum of (a) the net income (or net loss) for such period, PLUS (b) all
amounts treated as expenses for depreciation and interest and the amortization
of intangibles of any kind to the extent included in the determination of such
net income (or loss), PLUS (c) all accrued taxes on or measured by income to the
extent included in the determination of such net income (or loss) PLUS (d) any
other non-cash charges; PLUS (e) the effect of financial accounting standard 142
related to goodwill; PROVIDED, HOWEVER, that net income (or loss) shall be
computed for these purposes without giving effect to extraordinary losses or
extraordinary gains; PROVIDED, FURTHER, that EBITDA of the Company and its
Subsidiaries for any period shall include pro forma EBITDA, for such period, of
the target of any Permitted Acquisition consummated during such period,
including any add-backs to EBITDA listed on SCHEDULE 1.1(a) and any other
add-backs to EBITDA approved by all Lenders.
"EBITDAR" means, for any period, for any Person, determined for such
Person and its Subsidiaries on a consolidated basis and in accordance with GAAP,
EBITDA for such period PLUS all rental payments made by the Company during such
period.
"Eligible Account Receivable" means an Account Receivable which meets
the following requirements:
(a) it is genuine and in all respects what it purports to be;
(b) it arises from either (i) the performance of services by a
Loan Party, which services have been fully performed and acknowledged and/or
accepted by the Account Debtor with respect thereto or (ii) the sale or lease of
goods by a Loan Party; and if it arises from the sale or lease of goods, (A)
such goods comply in all material respects with such
-8-
Account Debtor's specifications (if any) and have been shipped to, or delivered
to and accepted by, such Account Debtor and the applicable Loan Party does not
have knowledge that the Account Debtor has failed to accept delivery of all or a
portion of such goods, and (B) a Loan Party has possession of shipping and
delivery receipts evidencing such shipment, delivery and acceptance;
(c) it is evidenced by an invoice rendered to the Account Debtor
with respect thereto which (i) is dated not earlier than the date of shipment or
performance, and (ii) is not unpaid on the date that is 90 days after the due
date of the invoice evidencing the Account Receivable;
(d) it is not owing by an Account Debtor with respect to which 25%
or more of the aggregate Accounts Receivable owing by such Account Debtor to the
Loan Parties taken together are not Eligible Accounts Receivable for any reason;
(e) it is not subject to any assignment, claim or Lien, other than
(i) a first priority Lien in favor of the Administrative Agent, for the benefit
of itself, Issuer and the Lenders and (ii) a Lien permitted under Section 7.1;
(f) it is a valid, legally enforceable and unconditional
obligation of the Account Debtor with respect thereto, and is not subject to a
contra, setoff, counterclaim, claim denying liability thereunder, credit or
allowance (except any contra, setoff, counterclaim, claim denying liability
thereunder, credit or allowance which has been deducted in computing the net
amount of the applicable invoice as shown in the original schedule or Borrowing
Base Certificate furnished to the Administrative Agent identifying or including
such Account Receivable) or material adjustment by the Account Debtor with
respect thereto, and such Account Debtor has not offered or attempted to return
any of such goods;
(g) there are no proceedings or actions which are then pending
against the Account Debtor with respect thereto or to which such Account Debtor
is a party which are reasonably likely to result in any material adverse change
in such Account Debtor's ability to pay any Account Receivable in full when due;
(h) it does not arise out of a contract which, by its terms,
forbids, restricts or makes void or unenforceable the assignment by the
applicable Loan Party to the Administrative Agent, for the benefit of itself,
Issuer, and the Lenders, of the Account Receivable arising with respect thereto;
(i) the Account Debtor with respect thereto is not an Affiliate of
any Loan Party or a director, manager, officer, employee or agent of any Loan
Party or an Affiliate of any Loan Party, unless the applicable Loan Party's
decision to extend credit to such Account Debtor is determined by the standards
such Loan Party employs to extend credit to Account Debtors that are not
Affiliates and such Account Receivable has terms no less favorable to the
Company than the standard terms of Accounts Receivable owing by Account Debtors
that are not Affiliates;
-9-
(j) the Account Debtor with respect thereto is a resident or
citizen of, and is located within, the United States of America, unless the
Account Receivable is fully covered by a letter of credit, banker's acceptance
or other credit support on terms reasonably satisfactory to the Administrative
Agent, and which credit support has been assigned to the Administrative Agent in
a manner reasonably satisfactory to the Administrative Agent;
(k) it is not an Account Receivable arising from a "sale on
approval," "sale or return" or "consignment," or subject to any other repurchase
or return agreement;
(l) it is not an Account Receivable with respect to which
possession and/or control of the goods sold giving rise thereto is held,
maintained or retained by any Loan Party, any Affiliate of any Loan Party (or by
any agent or custodian of any Loan Party or any Affiliate of any Loan Party) for
the account of or subject to further and/or future direction from the Account
Debtor thereof;
(m) it is not an Account Receivable which in any way fails to meet
or violates any warranty, representation or covenant in any material respect
contained in this Agreement relating directly to Accounts Receivable;
(n) it arises in the ordinary course of a Loan Party's business;
(o) if the Account Debtor is the United States of America or any
state or local governmental entity, or any department, agency or instrumentality
thereof, the applicable Loan Party has assigned its rights to payment of such
Account Receivable to the Administrative Agent, for the benefit of itself,
Issuer and the Lenders, pursuant to the Assignment of Claims Act of 1940, as
amended, or pursuant to any similar state or local law, regulation or
requirement;
(p) it is not owing by any single Account Debtor whose aggregate
obligations to the Loan Parties with respect to Accounts Receivable already
exceed 20% of all Accounts Receivable of the Loan Parties in the aggregate; and
(q) the Account Receivable is not evidenced by chattel paper or an
instrument.
"Eligible Inventory" means Inventory which meets the following
requirements:
(a) it is owned by a Loan Party and is not subject to any prior
assignment, claim or Lien, other than (i) a first priority Lien in favor of the
Administrative Agent, for the benefit of itself, Issuer and the Lenders and (ii)
a Lien permitted under Section 7.1;
(b) it is in saleable condition and held for sale;
(c) except as provided in clause (d) below or as the
Administrative Agent may otherwise consent, it is in the possession and control
of a Loan Party or its agents;
-10-
(d) if it is in the possession or control of a bailee,
warehouseman, processor, consignee or other Person other than a Loan Party, the
Administrative Agent is in possession of such agreements, instruments and
documents as the Administrative Agent may reasonably require (each in form and
content reasonably acceptable to the Administrative Agent and duly executed, as
appropriate, by the bailee, warehouseman, processor, consignee or other Person
in possession or control of such Inventory, as applicable), and if the
Administrative Agent so requests warehouse receipts in the Administrative
Agent's name, for the benefit of itself, Issuer and the Lenders, covering such
Inventory;
(e) it is not Inventory produced in violation of the Fair Labor
Standards Act and subject to the "hot goods" provisions contained in Title 29
U.S.C. Section 215 or any successor statute or section;
(f) it is not (i) packaging or shipping materials, (ii) goods used
in connection with maintenance or repair of a Loan Party's properties or assets
or (iii) general supplies;
(g) it is not Inventory which in any way fails to meet or violates
any warranty, representation or covenant in any material respect contained in
this Agreement relating directly to Inventory;
(h) the Administrative Agent has not determined in its reasonable
discretion that it is unacceptable due to age, type, category, quality and/or
quantity based on the criteria set forth on EXHIBIT A attached hereto; and
(i) it is not Inventory the use of which by the applicable Loan
Party or the manufacture or sale thereof by the applicable Loan Party, is
subject to any licensing, patent, royalty, trademark, tradename or copyright
agreement of any other Person which would materially adversely affect the
ability of the Administrative Agent to sell or otherwise dispose of such
Inventory during the continuance of any Event of Default.
"Environmental Claims" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for release or injury
to the environment or threat to public health, personal injury (including
sickness, disease or death), property damage, natural resources damage, or
otherwise alleging liability or responsibility for damages (punitive or
otherwise), cleanup, removal, remedial or response costs, restitution, civil or
criminal penalties, injunctive relief, or other type of relief, resulting from
or based upon the presence, placement, discharge, emission or release (including
intentional and unintentional, negligent and non-negligent, sudden or
non-sudden, accidental or non-accidental, placement, spills, leaks, discharges,
emissions or releases) of any Hazardous Material at, in, or from Property,
whether or not owned by the Company or any of its Subsidiaries.
"Environmental Laws" means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with all
-11-
administrative orders, licenses, authorizations and permits of, and agreements
with, any Governmental Authorities, in each case relating to environmental,
health, safety and land use matters; including the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 ("CERCLA"), the Clean Air Act,
the Federal Water Pollution Control Act of 1972, the Solid Waste Disposal Act,
the Federal Resource Conservation and Recovery Act, the Toxic Substances Control
Act, the Emergency Planning and Community Right-to-Know Act.
"Environmental Permits" has the meaning specified in subsection
5.12(b).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the regulations promulgated thereunder.
"ERISA Affiliate" means any corporation, partnership, or other trade
or business (whether or not incorporated) that is, along with the Company, a
member of a controlled group of corporations or a controlled group of trades or
businesses, as described in Sections 414(b) and 414(c), respectively, of the
Code or Section 4001 of ERISA, or a member of the same affiliated service group
within the meaning of Section 414(m) of the Code.
"Eurodollar Reserve Percentage" means for any day for any Interest
Period the maximum reserve percentage (expressed as a decimal, rounded upward to
the nearest 1/100th of 1%) in effect on such day (whether or not applicable to
any Lender) under regulations issued from time to time by the Federal Reserve
Board for determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to Eurocurrency
funding (currently referred to as "Eurocurrency liabilities" under Regulation D
of the Federal Reserve Board) having a term comparable to such Interest Period.
"Event of Default" means any of the events or circumstances specified
in Section 8.1.
"Event of Loss" means, with respect to any Property, any of the
following: (a) any loss, destruction or damage of such Property; or (b) any
actual condemnation, seizure or taking, by exercise of the power of eminent
domain or otherwise, of such Property, or confiscation of such Property or the
requisition of the use of such Property.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the regulations promulgated thereunder.
"Existing Letters of Credit" has the meaning specified in subsection
2.3(g).
"Federal Funds Rate" means, for any day, the rate per annum set forth
in the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, "H.15(519)") for such day (or, if such day is not a Business Day, for
the Business Day preceding such day) opposite the caption "Federal Funds
(Effective)". If on any day upon which the Federal Funds Rate
-12-
is to be determined the rate for such day (or, if such day is not a Business
Day, for the Business Day preceding such day) is not yet published in H.15(519),
the rate for such day, for purposes of such determination, will be the rate set
forth in the daily statistical release designated as the Composite 3:30 p.m.
Quotations for U.S. Government Securities, or any successor publication,
published by the Federal Reserve Bank of New York (including any such successor,
the "Composite 3:30 p.m. Quotation") for such day (or, if such day is not a
Business Day, for the Business Day preceding such day) under the caption
"Federal Funds Effective Rate." If on any day upon which the Federal Funds Rate
is to be determined the rate for such day (or, if such day is not a Business
Day, for the Business Day preceding such day) is not yet published in either
H.15(519) or the Composite 3:30 p.m. Quotations, the rate for such day, for
purposes of such determination, will be the arithmetic mean as determined by the
Administrative Agent of the rates for the last transaction in overnight Federal
funds arranged prior to 9:00 a.m. (New York time) on that day (or, if such day
is not a Business Day, on the Business Day preceding such day) by each of three
leading brokers of Federal funds transactions in New York City selected by the
Administrative Agent.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any entity succeeding to any of its principal functions.
"Fee Letter" has the meaning specified in subsection 2.10(a).
"Fixed Charge Coverage Ratio" means, for any period, the ratio of (a)
EBITDAR for the Company for such period TO (b) Fixed Charges for such period.
"Fixed Charges" means, with respect to any fiscal period of the
Company on a consolidated basis, without duplication, Consolidated Net Cash
Interest Expense of the Company during such period, Maintenance Capital
Expenditures of the Company during such period, scheduled principal payments of
Indebtedness of the Company (excluding mandatory prepayments of the Loans
pursuant to Section 2.7) during such period, rent payments made by the Company
during such period, and federal, state, local and foreign income taxes of the
Company during such period, excluding deferred taxes; provided, that for
purposes of determining Fixed Charges for each of the 12 month periods ending
September 30, 2002 and December 31, 2002, the aggregate amount of scheduled
principal payments of Indebtedness in respect of the Loans under the Original
Credit Agreement shall be deemed to be $5,000,000.
"Fleet" means Fleet National Bank, a national banking association.
"Form W-8BEN" has the meaning specified in subsection 3.1(f).
"Form W-8ECI" has the meaning specified in subsection 3.1(f).
"Funded Debt" means, at any time, for any Person, determined for such
Person and its Subsidiaries on a consolidated basis and in accordance with GAAP,
the sum of the following, without duplication: (i) Indebtedness for borrowed
money, (ii) Capital
-13-
Lease Obligations and (iii) purchase money Indebtedness; but shall specifically
exclude unsecured guaranties acceptable to the Administrative Agent.
"GAAP" means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the accounting
profession), or in such other statements by such other entity as may be in
general use by significant segments of the U.S. accounting profession, which are
applicable to the circumstances as of the date of determination.
"General Intangible" has the meaning specified in the Company Security
Agreement.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"Guaranty Obligation" means, as applied to any Person, any direct or
indirect liability of that Person with respect to any Indebtedness, lease,
dividend, Surety Instrument or other obligation (the "primary obligations") of
another Person (the "primary obligor"), including any obligation of that Person,
whether or not contingent, (a) to purchase, repurchase or otherwise acquire such
primary obligations or any property constituting direct or indirect security
therefor, or (b) to advance or provide funds (i) for the payment or discharge of
any such primary obligation, or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency or any balance sheet item, level of income or financial condition of
the primary obligor, or (c) 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 (d) otherwise to assure or hold harmless the holder of any such
primary obligation against loss in respect thereof; in each case (a), (b), (c)
or (d), including arrangements wherein the rights and remedies of the holder of
the primary obligation are limited to repossession or sale of certain property
of such Person. The amount of any Guaranty Obligation shall be deemed equal to
the stated or determinable amount of the primary obligation in respect of which
such Guaranty Obligation is made or, if not stated or if indeterminable, the
maximum reasonably anticipated liability in respect thereof.
"Hazardous Materials" means all those substances which are regulated
by, or which may form the basis of liability under, any Environmental Law,
including all substances identified under any Environmental Law as a pollutant,
contaminant, hazardous
-14-
waste, hazardous constituent, special waste, hazardous substance, hazardous
material, or toxic substance, or petroleum or petroleum derived substance or
waste.
"IBOR" means, for each Interest Period in respect of IBOR Loans
comprising part of the same Borrowing, an interest rate per annum (rounded
upward to the nearest 1/100th of 1%) determined pursuant to the following
formula:
IBOR = Non-Adjusted IBOR
-----------------------
1.00 - Eurodollar Reserve Percentage
The IBOR shall be adjusted automatically as of the effective date of
any change in the Eurodollar Reserve Percentage.
"IBOR Loan" means a Loan that bears interest based on the IBOR.
"Indebtedness" of any Person means, without duplication, (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than trade
payables entered into in the ordinary course of business pursuant to ordinary
terms); (c) all non-contingent reimbursement or payment obligations with respect
to Surety Instruments; (d) all obligations evidenced by notes, bonds, debentures
or similar instruments, including obligations so evidenced incurred in
connection with the acquisition of property, assets or businesses; (e) all
indebtedness created or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either case with respect to
Property acquired by the Person (even though the rights and remedies of the
seller or bank under such agreement in the event of default are limited to
repossession or sale of such property); (f) all Capital Lease Obligations; (g)
all net obligations with respect to Rate Contracts; (h) all indebtedness
referred to in clauses (a) through (g) 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 contracts
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness; and (i) all Guaranty Obligations in
respect of indebtedness or obligations of others of the kinds referred to in
clauses (a) through (g) above.
"Indemnified Liabilities" has the meaning specified in subsection
10.5(a).
"Indemnified Person" has the meaning specified in subsection 10.5(a).
"Insolvency Proceeding" means (a) any case, action or proceeding
before any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors, or (b) any general assignment for the benefit of
creditors, composition, marshalling of assets for creditors, or other, similar
arrangement in respect of its creditors generally or any substantial portion of
its creditors; in each case undertaken under U.S. Federal, State or foreign law,
including the Bankruptcy Code.
-15-
"Interest Payment Date" means, with respect to any IBOR Loan, the last
day of each Interest Period applicable to such Loan and, with respect to any
Base Rate Loan, the last Business Day of each calendar quarter.
"Interest Period" means, with respect to any IBOR Loan, the period
commencing on the Business Day the Loan is disbursed or continued or on the
Conversion Date on which a Loan is converted to an IBOR Loan and ending on the
date one, two or three months thereafter, as selected by the Company in its
Notice of Borrowing or Notice of Conversion/Continuation;
PROVIDED, that:
(i) if any Interest Period pertaining to an IBOR Loan would
otherwise end on a day which is not a Business Day, that Interest Period
shall be extended to the next succeeding Business Day unless, in the case
of an IBOR Loan, the result of such extension would be to carry such
Interest Period into another calendar month, in which event such Interest
Period shall end on the immediately preceding Business Day;
(ii) any Interest Period pertaining to an IBOR Loan that begins on
the last Business Day of a calendar month (or on a day for which there is
no numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the calendar month
at the end of such Interest Period;
(iii) no Interest Period for any Term Loan shall extend beyond the
Term Loan Maturity Date and no Interest Period for any Revolving Loan shall
extend beyond the Revolving Termination Date; and
(iv) no Interest Period applicable to a Term Loan or portion
thereof shall extend beyond any date upon which is due any scheduled
principal payment in respect of the Term Loan unless the aggregate
principal amount of the Term Loan represented by Base Rate Loans, or by
IBOR Loans having Interest Periods that will expire on or before such date,
is equal to or in excess of the amount of such principal payment.
"Inventory" means any and all "inventory" (as defined in the UCC) now
owned or hereafter acquired by each Loan Party, wherever located, including
without limitation finished goods, raw materials, work in process and other
materials and supplies (including packaging and shipping materials) used or
consumed in the manufacture or production thereof, and goods which are returned
to or repossessed by any Loan Party.
"Issuer" means BOA in its capacity as issuer of the Letters of Credit
(or any other Person to whom BOA may assign its obligations pursuant to
subsection 10.8(g)).
"Joint Venture" means a single-purpose corporation, partnership, joint
venture or other legal arrangement (whether created pursuant to contract or
conducted
-16-
through a separate legal entity) now or hereafter formed by the Company or any
of its Subsidiaries with another Person in order to conduct a common venture or
enterprise with such Person.
"LaSalle" means LaSalle Bank National Association, a national banking
association.
"LC Amount" means at any time the aggregate undrawn face amount of all
Letters of Credit.
"Lender" has the meaning specified in the introductory clause hereto.
"Lending Office" means, with respect to any Lender, the office or
offices of such Lender specified as its "Lending Office" or "Domestic Lending
Office" or "Offshore Lending Office", as the case may be, opposite its name on
the applicable signature page hereto, or such other office or offices of such
Lender as it may from time to time notify the Company and the Administrative
Agent.
"Letters of Credit" means letters of credit issued by Issuer for the
account of the Company.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, charge or deposit arrangement, encumbrance, lien (statutory or
other) or other security interest or preferential arrangement of any kind or
nature whatsoever (including those created by, arising under or evidenced by any
conditional sale or other title retention agreement, the interest of a lessor
under a Capital Lease Obligation or any financing lease having substantially the
same economic effect as any of the foregoing) and any contingent or other
agreement to provide any of the foregoing, but not including the interest of a
lessor under an Operating Lease.
"Loan" means an extension of credit by a Lender to the Company
pursuant to Article II, and may be a Base Rate Loan or an IBOR Loan.
"Loan Documents" means this Agreement, the Notes, the Collateral
Documents and all documents delivered to the Administrative Agent in connection
therewith and all Rate Contracts between the Company and any Lender.
"Loan Party" means the Company and each Subsidiary of the Company.
"Loan Party Guaranty" means the Guaranty executed by each
then-existing Subsidiary of the Company and delivered to the Administrative
Agent on the Original Closing Date, and each Guaranty subsequently executed by a
Subsidiary of the Company and delivered to the Administrative Agent, as each has
been amended to date and is amended from time to time hereafter.
"Loan Party Security Agreement" means the Security Agreement executed
by each then-existing Subsidiary of the Company and delivered to the
Administrative
-17-
Agent on the Original Closing Date, and each Security Agreement subsequently
executed by a Subsidiary of the Company and delivered to the Administrative
Agent, as each has been amended to date and is amended from time to time
hereafter.
"Maintenance Capital Expenditures" means, with respect to any Person,
any Capital Expenditures that are made either to (a) replace or repair an
existing capital asset or (b) extend the useful life of an existing capital
asset.
"Majority Lenders" means at any time the Lenders then holding 75% of
the then aggregate unpaid principal amount of the Loans, or, if no such
principal amount is then outstanding, the Lenders then having 75% of the
Revolving Commitments.
"Margin Stock" means "margin stock" as such term is defined in
Regulation T, U or X of the Federal Reserve Board.
"Material Acquisition" means an Acquisition with respect to which the
Total Consideration payable exceeds $5,000,000.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, assets,
liabilities (actual or contingent) or condition (financial or otherwise) of the
Company or the Company and its Subsidiaries taken as a whole; (b) a material
impairment of the ability of the Company, or the other Loan Parties taken as a
whole, to perform under the Loan Documents; or (c) a material adverse effect
upon (i) the legality, validity, binding effect or enforceability of any Loan
Document, or (ii) the perfection or priority of any Lien granted to any Lender
or to the Administrative Agent, for the benefit of the Agents and the Lenders.
"Material Loan Party" means, at any time, any Loan Party (i) the gross
revenues of which for the fiscal year most recently ended are 15% or more of the
consolidated gross revenues of the Company and its Subsidiaries for such fiscal
year or (ii) the aggregate book value of the assets of which at such time are
15% or more of the aggregate book value of the consolidated assets of the
Company and its Subsidiaries at such time, all as determined in accordance with
GAAP.
"Multiemployer Plan" means a "multiemployer plan," as defined in
Section 4001(a)(3) of ERISA, that is maintained for the employees of the Company
or any ERISA Affiliate.
"Net Proceeds" means proceeds in cash, checks or other cash equivalent
financial instruments (including Cash Equivalents) as and when received by the
Person making a Disposition, net of: (a) the direct costs relating to such
Disposition excluding amounts payable to any Affiliate of the Person making the
Disposition, (b) taxes paid or payable as a result thereof, and (c) amounts
required to be applied to repay principal, interest and prepayment premiums and
penalties on Indebtedness secured by a Lien on the assets which are the subject
of such Disposition but only if such Lien is permitted under the Loan Documents.
"Net Proceeds" shall also include proceeds paid on account of any
-18-
Event of Loss, net of: (i) all money actually, and permitted under the Loan
Documents to be, applied to repair, replace, restore or substitute for the
damaged Property, (ii) all of the costs and expenses reasonably incurred in
connection with the collection of such proceeds, award or other payments, (iii)
taxes paid or payable as a result thereof, and (iv) any amounts retained by or
paid to parties having superior rights to such proceeds, awards or other
payments but only if such superior rights are permitted under the Loan
Documents.
"Net Worth" means shareholders' equity of the Company as determined in
accordance with GAAP.
"Non-Adjusted IBOR" means the rate of interest per annum determined by
the Administrative Agent to be the rate of interest per annum (rounded upward to
the nearest 1/100th of 1%) notified to the Administrative Agent by the Reference
Bank as the rate of interest at which Dollar deposits in the approximate amount
of the principal amount of the Loan to be made or continued as, or converted
into, an IBOR Loan by the Reference Bank and having a maturity comparable to the
Interest Period for such IBOR Loan would be offered to major banks in the
offshore dollar interbank market at their request at or about 11:00 a.m. (New
York City time) on the second Business Day prior to the commencement of such
Interest Period.
"Note" means a Revolving Note or a Term Note; and "NOTES" means the
Revolving Notes and the Term Note.
"Notice of Borrowing" means a notice given by the Company to the
Administrative Agent pursuant to Section 2.3, in substantially the form of
EXHIBIT B.
"Notice of Conversion/Continuation" means a notice given by the
Company to the Administrative Agent pursuant to Section 2.4, in substantially
the form of EXHIBIT C.
"Notice of Lien" means any "notice of lien" or similar document
intended to be filed or recorded with any court, registry, recorder's office,
central filing office or other Governmental Authority for the purpose of
evidencing, creating, perfecting or preserving the priority of a Lien securing
obligations owing to a Governmental Authority.
"Obligations" means all Loans, and other Indebtedness, advances,
debts, liabilities, obligations, covenants and duties owing by the Company to
any Lender, any Agent, the Issuer, or any other Person required to be
indemnified, that arises under any Loan Document or in connection with any
interest rate cap, collar, swap or other agreement or arrangement designed to
protect such Person against fluctuations in interest rates, in each case,
whether or not for the payment of money, whether arising by reason of an
extension of credit, loan, guaranty, reimbursement obligations with respect to
Letters of Credit, indemnification or in any other manner, 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.
-19-
"Offshore Lending Office" means with respect to each Lender, the
office of such Lender designated as such in the signature pages hereto or such
other office of such Lender as such Lender may from time to time specify to the
Company and the Administrative Agent.
"Operating Lease" means, as applied to any Person, any lease of
Property which is not a Capital Lease.
"Ordinary Course of Business" means, in respect of any transaction
involving the Company or any other Loan Party, the ordinary course of such
Person's business, as conducted by any such Person not inconsistent with past
practice and undertaken by such Person in good faith.
"Organization Documents" means (i) for any corporation, the
certificate or articles of incorporation, the bylaws, any certificate of
determination or instrument relating to the rights of preferred shareholders of
such corporation, any shareholder rights agreement, and all applicable
resolutions of the board of directors of such corporation, (ii) for any
partnership, the certificate of partnership, the partnership agreement and all
applicable resolutions of the board of directors of such partnership's general
partner and (iii) for any limited liability company, the limited liability
company certificate or certificate of formation, the operating or similar
agreement and all applicable resolutions of the board of directors of such
limited liability company's managing member(s).
"Original Credit Agreement" has the meaning specified in the Recitals
hereto.
"Other Taxes" has the meaning specified in subsection 3.1(b).
"Overadvance" has the meaning specified in subsection 2.8(b).
"Participant" has the meaning specified in subsection 10.8(d).
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means a "pension plan," as such term is defined in
Section 3(2) of ERISA, that is subject to the provisions of Title IV of ERISA
(other than a Multiemployer Plan) and to which the Company or any ERISA
Affiliate may have any liability, including any liability by reason of being
deemed to be a contributing sponsor under Section 4069 of ERISA.
"Permitted Acquisition" means an Acquisition that satisfies each of
the following conditions:
(i) the assets so acquired are employed, or, if such Acquisition
is structured as a purchase of Securities, the Person so acquired presently
conducts its business, in the same industry or a related industry, and in
the
-20-
same or related lines of business now conducted by the Company and its
Subsidiaries;
(ii) the Administrative Agent and each Lender shall have received
written notice of such Acquisition and the basic terms thereof (a) in the
case of a Material Acquisition, at least 10 Business Days' prior to the
consummation thereof and (b) in the case of any other Acquisition, no later
than the last day of the month after the month in which such Acquisition
was consummated;
(iii) at the time of such Acquisition, no Default or Event of
Default exists, or would be caused by the consummation thereof;
(iv) after giving effect to such Acquisition, the Company would be
in compliance, on a pro forma basis, with the covenants set forth in
Sections 7.13, 7.14, 7.15 and 7.16 of this Agreement, recomputed for the
most recently ended period of 4 fiscal quarters;
(v) the assets so acquired are located in the United States or
Canada or, if such acquisition is structured as a purchase of Securities,
the Person so acquired is organized under the laws of a state in the United
States or a province of Canada and the assets owned by such Person are
located in the United States or Canada;
(vi) such Acquisition shall have been approved by the board of
directors of the Person whose Properties or Securities are to be acquired;
(vii) to the extent required by Section 6.13, the Administrative
Agent shall have received such duly executed and delivered (a) agreements,
instruments and documents as the Administrative Agent shall reasonably
request in order to create in favor of the Administrative Agent, for the
benefit of the Agents and the Lenders, a Lien, subject only to Permitted
Liens, on the Property so acquired (including any Securities) and the
Securities of any Person created to facilitate such Acquisition, in order
to secure the Obligations and (b) a guaranty of the Obligations executed by
the Person so acquired or so created; PROVIDED, that in the case of any
Acquisition other than a Material Acquisition, such items shall be
delivered to the Administrative Agent no later than the last day of the
month after the month in which such Acquisition was consummated;
(viii) if Total Cash Consideration payable in connection with such
Acquisition exceeds $3,000,000, the Company shall have provided the
Administrative Agent and the Lenders with pro forma Acquisition closing
date financial statements for the Person who is to be acquired or whose
Property is to be acquired in such Acquisition, based on the most recent
monthly financial statements for such Person, which pro forma financial
-21-
statements will detail any adjustments related to such Acquisition and
include a computation of EBITDA for such Person for use in deriving pro
forma EBITDA for the Company and its Subsidiaries for the next applicable
testing date, including all add-backs that the Company proposes to use in
order to so derive pro-forma EBITDA;
(ix) if either (a) Total Cash Consideration payable in connection
with such Acquisition exceeds $5,000,000 or (b) the aggregate Total Cash
Consideration paid in connection with all Permitted Acquisitions
consummated after the Closing Date plus the Total Cash Consideration
payable in connection with the proposed Acquisition exceeds $15,000,000,
the Majority Lenders shall have consented in writing to such Acquisition;
(x) if so requested by the Administrative Agent or the Majority
Lenders, the Administrative Agent and the Lenders shall have received, at
the same time as the notice required pursuant to clause (ii) above (or, in
the case of a Material Acquisition, if not available at such time, as soon
afterward as is reasonably practicable), copies of the agreements,
instruments and documents evidencing such Acquisition;
(xi) if so requested by the Administrative Agent or the Majority
Lenders, the Administrative Agent and the Lenders shall have received, at
the same time as the notice required pursuant to clause (ii) above (or, in
the case of a Material Acquisition, if not available at such time, as soon
afterward as is reasonably practicable), unless otherwise agreed by the
Majority Lenders, such business and legal due diligence related to such
Acquisition as the Administrative Agent or the Majority Lenders shall have
reasonably requested, including without limitation any environmental audits
and reports as the Company shall have obtained in connection therewith; and
(xii) in the case of each Material Acquisition, the Administrative
Agent shall have received a certificate from a Responsible Officer of the
Company, certifying to (a) the satisfaction of the conditions contained in
clauses (i) - (viii) above and (b) certifying to the amount of the
applicable Total Cash Consideration and Total Consideration and, in each
case, showing all applicable computations.
"Permitted Liens" has the meaning specified in Section 7.1.
"Person" means an individual, partnership, corporation, business
trust, limited liability company, joint stock company, trust, unincorporated
association, joint venture or Governmental Authority.
"Pledged Collateral" has the meaning specified in the Company Pledge
Agreement.
-22-
"Pricing Change Certificate" means a certificate duly completed and
executed by a Responsible Officer of the Company, substantially in the form of
EXHIBIT D hereto.
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, and whether tangible or intangible.
"Rate Contracts" means swap agreements (as such term is defined in
Section 101 of the Bankruptcy Code), commodity options, equity or equity index
swaps or options, bond options or swaptions, and any other agreements or
arrangements designed to provide protection against fluctuations in interest or
currency exchange rates.
"Reference Bank" means BOA; references to the Reference Bank shall be
deemed to refer to BOA's Grand Cayman Branch, Grand Cayman B.W.I. (or such other
office as may be designated for such purpose by BOA).
"Reportable Event" has the meaning given to such term in ERISA.
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject.
"Responsible Officer" means the chief executive officer, the president
or the chief financial officer of the Company, or any other officer having
substantially the same authority and responsibility; or, with respect to
compliance with financial covenants and the preparation of the Borrowing Base
Certificate, the chief financial officer or the treasurer of the Company, or any
other officer having substantially the same authority and responsibility.
"Revolving Commitment", with respect to each Lender, has the meaning
specified in Section 2.1(b).
"Revolving Commitment Percentage" means, as to any Lender, the
percentage equivalent of such Lender's Revolving Commitment divided by the
Aggregate Revolving Commitment.
"Revolving Loan" has the meaning specified in Section 2.1.
"Revolving Loan Availability" means the lesser of (a) the sum of the
Revolving Commitments of each Lender and (b) the Borrowing Base (as calculated
pursuant to the most recent Borrowing Base Certificate delivered pursuant to
this Agreement).
"Revolving Note" means a promissory note of the Company payable to the
order of a Lender, in substantially the form of EXHIBIT E, evidencing the
aggregate
-23-
indebtedness of the Company to such Lender resulting from Revolving Loans made
by such Lender.
"Revolving Termination Date" has the meaning specified in Section
2.8(b).
"SEC" means the Securities and Exchange Commission, or any entity
succeeding to any of its principal functions.
"Securities" means "Securities" as such term is used in Section 2(l)
of the Securities Act of 1933, as amended.
"Senior Funded Debt" means, at any time, for any Person, determined
for such Person and its Subsidiaries on a consolidated basis and in accordance
with GAAP, all Funded Debt other than Subordinated Debt.
"Senior Funded Debt to EBITDA Ratio" means, as of any date, the ratio
of (a) Senior Funded Debt as of such date to (b) EBITDA for the 12 month period
ended on such date, all determined for the Company and its Subsidiaries on a
consolidated basis and in accordance with GAAP.
"Solvent" means, as to any Person at any time, that (a) the fair value
of the Property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(32) of the Bankruptcy Code and, in the alternative, for purposes of any
applicable state fraudulent transfer law; (b) the present fair saleable value of
the Property of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become absolute
and matured; (c) such Person is able to realize upon its Property and pay its
debts and other liabilities (including disputed, contingent and unliquidated
liabilities) as they mature in the normal course of business; (d) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature; and (e) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital.
"Subordinated Debt" means, collectively, that portion of any
liabilities, obligations or Indebtedness of the Company or any of its
Subsidiaries that contains terms satisfactory to the Majority Lenders and is
subordinated, either (a) on the terms contained in EXHIBIT I or (b) in a manner
satisfactory to the Majority Lenders, as to right and time of payments of
principal and interest thereon, to all of the Obligations. Subordinated Debt
includes purchase money Indebtedness, Capital Lease Obligations and Indebtedness
incurred to acquire real estate that is secured by such real estate, in each
case so long as such Indebtedness satisfies clause (a) or (b) hereof.
"Subsidiary" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other business entity
of which more than 50%
-24-
of the voting stock or other equity interests (in the case of Persons other than
corporations), is owned or controlled directly or indirectly by the Person, or
one or more of the Subsidiaries of the Person, or a combination thereof.
"Substantial Loan Party" means, at any time, any Loan Party (i) the
gross revenues of which for the fiscal year most recently ended are 5% or more
of the consolidated gross revenues of the Company and its Subsidiaries for such
fiscal year or (ii) the aggregate book value of the assets of which at such time
are 5% or more of the aggregate book value of the consolidated assets of the
Company and its Subsidiaries at such time, all as determined in accordance with
GAAP.
"Surety Instruments" means all letters of credit (including standby
and commercial), banker's acceptances, bank guaranties, shipside bonds, surety
bonds and similar instruments.
"Taxes" has the meaning specified in subsection 3.1(a).
"Term Commitment" with respect to each Lender, has the meaning
specified in Section 2.1(a).
"Term Loan" has the meaning specified in Section 2.1(a).
"Term Maturity Date" means June 30, 2005.
"Term Note" means a promissory note of the Company payable to the
order of a Lender, in substantially the form of EXHIBIT F, evidencing the
aggregate indebtedness of the Company to such Lender resulting from the portion
of the Term Loan made by such Lender.
"Total Cash Consideration" means total consideration paid or to be
paid in cash or property (other than Securities of the Company) with respect to
any Acquisition, including any deferred cash payments of any portion of the
purchase price thereof.
"Total Consideration" means total consideration paid with respect to
any Acquisition, including without limitation: (i) Total Cash Consideration,
(ii) all payments made in Securities, (iii) all amounts paid or to be paid
pursuant to non-competition agreements and consulting agreements, (iv) the
amount of Indebtedness assumed (and in the case of an Acquisition of Securities,
the amount of Indebtedness of the Person to be acquired), (v) the amount of
seller Subordinated Debt incurred in connection with such Acquisition and (vi)
the amount of all transaction fees payable by any Loan Party.
"Total Funded Debt to EBITDA Ratio" means, as of any date, the ratio
of (a) Funded Debt as of such date TO (b) EBITDA for the 12-month period ended
on such date, all determined for the Company and its Subsidiaries on a
consolidated basis and in accordance with GAAP.
"Transferee" has the meaning specified in subsection 10.8(e).
-25-
"UCC" means the Uniform Commercial Code as in effect in the State of
Illinois.
"United States" and "U.S." each means the United States of America.
"Wholly-Owned Subsidiary" means any Person in which (other than
directors' qualifying shares required by law) 100% of the capital stock or other
ownership interests of each class having ordinary voting power, and 100% of the
capital stock or other ownership interests of every other class, in each case,
at the time as of which any determination is being made, is owned, beneficially
and of record, by the Company, or by one or more of the other Wholly-Owned
Subsidiaries, or both.
1.2. OTHER INTERPRETIVE PROVISIONS.
(a) DEFINED TERMS.
Unless otherwise specified herein or therein, all terms defined in
this Agreement shall have the defined meanings when used in any certificate or
other document made or delivered pursuant hereto. The meaning of defined terms
shall be equally applicable to the singular and plural forms of the defined
terms. Terms (including uncapitalized terms) not otherwise defined herein and
that are defined in the UCC shall have the meanings therein described.
(b) THE AGREEMENT.
The words "hereof", "herein", "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement; and subsection, section, schedule
and exhibit references are to this Agreement unless otherwise specified.
(c) CERTAIN COMMON TERMS.
(i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(ii) The term "including" means "including without
limitation" and the parties hereto agree that the rule of EJUSDEM GENERIS
shall not be applicable to limit a general statement, which is followed by
an enumeration of specific matters, to matters similar to the matters
specifically mentioned.
(iii) References to the "knowledge of", "best knowledge of",
or similar terms with respect to the Company shall mean the actual
knowledge of a Responsible Officer of the Company.
-26-
(d) PERFORMANCE; TIME.
Whenever any performance obligation hereunder shall be stated to be
due or required to be satisfied on a day other than a Business Day, such
performance shall, unless otherwise specified herein, be made or satisfied on
the next succeeding Business Day. In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including"; the words "to" and "until" each mean "to but excluding", and the
word "through" means "to and including." If any provision of this Agreement
refers to any action taken or to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be interpreted to encompass any and
all means, direct or indirect, of taking, or not taking, such action.
(e) CONTRACTS.
Unless otherwise expressly provided herein, references to agreements
and other contractual instruments (including the Loan Documents) shall be deemed
to include all subsequent amendments and other modifications thereto, but only
to the extent such amendments and other modifications are not prohibited by the
terms of any Loan Document.
(f) LAWS.
References to any statute or regulation are to be construed as
including all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting the statute or regulation.
(g) CAPTIONS.
The captions and headings of this Agreement are for convenience of
reference only and shall not affect the interpretation of this Agreement.
(h) INDEPENDENCE OF PROVISIONS.
The parties acknowledge that this Agreement and other Loan Documents
may use several different limitations, tests or measurements to regulate the
same or similar matters, and that such limitations, tests and measurements are
cumulative and must each be performed, except as expressly stated to the
contrary in this Agreement.
(i) INTERPRETATION.
This Agreement is the result of negotiations among and has been
reviewed by counsel to the Administrative Agent, the Company and other parties,
and is the product of all parties hereto. Accordingly, this Agreement and the
other Loan Documents shall not be construed against the Lenders or the
Administrative Agent merely because of the Administrative Agent's or the
Lenders' involvement in the preparation of such documents and agreements.
-27-
1.3. ACCOUNTING PRINCIPLES.
(a) Unless the context otherwise clearly requires, all accounting
terms not expressly defined herein shall be construed, and all financial
computations required under this Agreement shall be made, in accordance with
GAAP, consistently applied. If any changes in accounting principles from those
used in the preparation of the financial statements referred to in Section 5.11
hereafter occur as a result of the promulgation of rules, regulations,
pronouncements, or opinions by the Financial Accounting Standards Board or the
American Institute of Certified Public Accountants (or successors thereto or
agencies with similar functions) and result in a change in the method of
calculation of financial covenants, standards, or terms found in this Agreement,
upon the request of the Companies or the Majority Lenders, the Company, the
Administrative Agent and the Majority Lenders agree to enter into negotiations
to amend such financial covenants, standards or terms so as to equitably reflect
such changes with the desired result that the evaluations of the Company's
financial condition shall be the same after such changes as if such changes had
not been made; PROVIDED, HOWEVER, that until the parties hereto have reached a
definitive agreement on such amendments, the Company's financial condition shall
continue to be evaluated on the same principles as those used in the preparation
of the financial statements referred to in Section 5.11 prior to such change in
accounting principles.
(b) References herein to "fiscal year" and "fiscal quarter" refer
to such fiscal periods of the Company.
ARTICLE II
THE CREDITS
2.1. AMOUNTS AND TERMS OF COMMITMENTS.
(a) THE TERM COMMITMENTS.
Each Lender agrees, on the terms and conditions hereinafter set forth,
that a portion of the Closing Date Outstandings under the Original Credit
Agreement in the aggregate amount of $20,000,000 shall, on the Closing Date, be
converted into a single term loan to the Company (the "Term Loan"). Each Lender
severally agrees that its portion of the Term Loan shall be equal to the amount
set forth opposite such Lender's name in SCHEDULE 2.1(a) under the heading "Term
Commitment" (such amount, as the same may be reduced as a result of one or more
assignments pursuant to Section 10.8, such Lender's "Term Commitment"). Amounts
deemed to be a portion of the Term Loan and which are repaid or prepaid by the
Company may not be reborrowed. Conversion of a Base Rate Loan to an IBOR Loan,
or an IBOR Loan to a Base Rate Loan, or the continuation of an IBOR Loan to
another IBOR Loan, shall not be deemed to be a repayment or prepayment for
purposes of the preceding sentence.
-28-
(b) THE REVOLVING COMMITMENTS.
Each Lender severally agrees, on the terms and conditions hereinafter
set forth, to make Loans to the Company (each such Loan, a "Revolving Loan") and
to participate (pursuant to Section 2.15) in the Letters of Credit issued by the
Issuer, from time to time on any Business Day during the period from the Closing
Date to the Revolving Termination Date, in an aggregate amount not to exceed at
any time outstanding the amount set forth opposite such Lender's name in
SCHEDULE 2.1(b) under the heading "Revolving Commitment" (such amount, as the
same (a) may be reduced from time to time (in accordance with such Lender's
Revolving Commitment Percentage) pursuant to Section 2.5 or (b) may be reduced
from time to time, as a result of one or more assignments pursuant to Section
10.8, is hereafter referred to as such Lender's "Revolving Commitment");
PROVIDED, HOWEVER, that, after giving effect to any Borrowing of Revolving Loans
or issuance of any Letters of Credit, the sum of the aggregate principal amount
of all outstanding Revolving Loans and the LC Amount shall not exceed the
Revolving Loan Availability at such time. Within the limits of each Lender's
Revolving Commitment, and subject to the other terms and conditions hereof, the
Company may borrow under this subsection 2.1(b), prepay pursuant to Section 2.6
and reborrow pursuant to this subsection 2.1(b). No Lender shall be obligated to
make available its Revolving Commitment Percentage of any Revolving Loans during
the existence of any Event of Default or a Default.
2.2. NOTES.
(a) The portion of the Term Loan made by each Lender shall be
evidenced by a Term Note payable to the order of that Lender in an amount equal
to its Term Commitment.
(b) The Revolving Loans made by each Lender shall be evidenced by
a Revolving Note payable to the order of that Lender in an amount equal to its
Revolving Commitment.
(c) The Loans made by each Lender shall be evidenced by one or
more loan accounts maintained by the Administrative Agent and such Lender in the
ordinary course of business. The loan accounts or records maintained by the
Administrative Agent and each Lender shall be conclusive absent manifest error
of the amount of the Loans made by the Lenders to the Company and the interest
and payments thereon. Any failure so to record or any error in doing so shall
not, however, limit or otherwise affect the obligation of the Company hereunder
(and under any Note) to pay any amount owing with respect to the Loans. In the
event of a conflict between the amount in the loan account maintained by a
Lender and the amount in the loan account maintained by the Administrative
Agent, the amount in the loan account maintained by the Administrative Agent
shall govern.
-29-
2.3. PROCEDURE FOR BORROWING AND ISSUANCE OF LETTERS OF CREDIT.
(a) Each Borrowing of Revolving Loans and request for the issuance
of a Letter of Credit shall be made upon the Company's irrevocable written
notice (except in the case of requests for Base Rate Loans, which may be by
telephonic request promptly followed by written notice) delivered to the
Administrative Agent in accordance with Section 10.2 in the form of a Notice of
Borrowing (which notice must be received by the Administrative Agent prior to
11:00 a.m. (Chicago time)) (i) two Business Days prior to the requested
Borrowing date, in the case of IBOR Loans; (ii) on the requested Borrowing date,
in the case of Base Rate Loans; and (iii) three Business Days prior to the
requested issuance date, in the case of Letters of Credit, specifying:
(A) the amount of the Borrowing, which
(except for a Borrowing deemed requested under clause (ii)
of the proviso below) shall be in an aggregate minimum
principal amount of One Million Dollars ($1,000,000) or any
multiple of Five Hundred Thousand Dollars ($500,000) in
excess thereof, or the amount of the Letter of Credit (which
shall be in a minimum amount of One Hundred Thousand Dollars
($100,000)), as applicable;
(B) the requested Borrowing date or issuance date,
as applicable, which shall be a Business Day;
(C) whether the Borrowing is to be comprised of IBOR
Loans or Base Rate Loans; and
(D) with respect to IBOR Loans, the duration of the
Interest Period applicable to such Loans included in such
notice. If the Notice of Borrowing shall fail to specify the
duration of the Interest Period for any Borrowing comprised
of IBOR Loans, such Interest Period shall be three months.
PROVIDED, HOWEVER, that (i) with respect to the Borrowing to be made on the
Closing Date, if any, the Notice of Borrowing shall be delivered to the
Administrative Agent not later than 11:00 a.m. (Chicago time) on the Closing
Date and such Borrowing will consist of Base Rate Loans only; and (ii) in the
event the Lenders reimburse the Issuer pursuant to subsection 2.15(b), the
Company shall be deemed to have timely requested a Borrowing of Revolving Loans
comprised of Base Rate Loans in the amount of such reimbursement.
(b) Upon receipt of the Notice of Borrowing, the Administrative
Agent will promptly notify each Lender thereof and of the amount of such
Lender's Commitment Percentage of such Borrowing of Revolving Loans or
participation in Letters of Credit.
(c) Each Lender will make the amount of its Commitment Percentage
of the Borrowing of Revolving Loans available to the Administrative Agent for
the account of the Company at the Administrative Agent's Payment Office by 1:00
p.m. (Chicago time) on the
-30-
Borrowing date requested by the Company in funds immediately available to the
Administrative Agent. The proceeds of all such Loans will then be made available
to the Company by the Administrative Agent, at the option of the Company, either
(i) at the Administrative Agent's office by crediting the operating account of
the Company on the books of BOA, or (ii) by wire transfer in accordance with
written instructions provided to the Administrative Agent by the Company, in
each case with the aggregate of the amounts made available to the Administrative
Agent by the Lenders and in like funds as received by the Administrative Agent.
(d) During the existence of a Default or an Event of Default, the
Company may not elect to have a Loan be made as, or converted into or continued
as, an IBOR Loan.
(e) After giving effect to any Borrowing, there shall not be more
than eight different Interest Periods in effect.
(f) Each Letter of Credit shall be in form and substance
acceptable to the Administrative Agent and the Issuer and shall by its terms be
stated to expire on a date no later than the earlier of (i) the Revolving
Termination Date and (ii) one year from the date of issuance. Each Notice of
Borrowing requesting the issuance of a Letter of Credit shall be accompanied by
a letter of credit application, in form and substance reasonably acceptable to
the Administrative Agent and the Issuer, duly executed by a Responsible Officer.
The aggregate undrawn face amount of all Letters of Credit outstanding at any
time shall not exceed Five Million Dollars ($5,000,000).
(g) Prior to the Closing Date, BOA issued the letters of credit
listed on SCHEDULE 2.3 (the "Existing Letters of Credit"). Each Agent, each
Lender and the Company hereby agree that each Existing Letter of Credit shall be
deemed to be a Letter of Credit issued by Issuer under this Agreement on the
Closing Date for the account of the Company.
2.4. CONVERSION AND CONTINUATION ELECTIONS.
(a) The Company may upon irrevocable written notice to the
Administrative Agent in accordance with subsection 2.4(b):
(i) elect to convert on any Business Day, any Base Rate
Loans (or any part thereof in an amount not less than One Million Dollars
($1,000,000), or that is in an integral multiple of Five Hundred Thousand
Dollars ($500,000) in excess thereof) into IBOR Loans; or
(ii) elect to convert on the last day of the applicable
Interest Period any IBOR Loans having Interest Periods maturing on such day
(or any part thereof in an amount not less than One Million Dollars
($1,000,000), or that is in an integral multiple of Five Hundred Thousand
Dollars ($500,000) in excess thereof) into Base Rate Loans; or
(iii) elect to continue on the last day of the applicable
Interest Period any IBOR Loans having Interest Periods maturing on such day
(or any
-31-
part thereof in an amount not less than One Million Dollars ($1,000,000),
or that is in an integral multiple of Five Hundred Thousand Dollars
($500,000) in excess thereof);
PROVIDED, that if the aggregate amount of IBOR Loans in respect of any Borrowing
shall have been reduced, by payment, prepayment, or conversion of part thereof
to be less than One Million Dollars ($1,000,000), such IBOR Loans shall
automatically convert (on the last day of the applicable Interest Period) into
Base Rate Loans, and on and after such date the right of the Company to continue
such Loans as, and convert such Loans into, IBOR Loans, as the case may be,
shall terminate.
(b) The Company shall deliver a Notice of Conversion/Continuation
in accordance with Section 10.2 to be received by the Administrative Agent not
later than 11:00 a.m. (Chicago time) at least (i) two Business Days in advance
of the Conversion Date or continuation date, if the Loans are to be converted
into or continued as IBOR Loans; and (ii) on the Conversion Date, if the Loans
are to be converted into Base Rate Loans; specifying:
(A) the proposed Conversion Date or continuation date;
(B) the aggregate amount of Loans to be converted or
continued;
(C) the nature of the proposed conversion or continuation;
and
(D) in the case of Loans to be continued as or converted
into IBOR Loans, the duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable to
IBOR Loans, the Company has failed to timely select a new Interest Period to be
applicable to such IBOR Loans, as the case may be, or if any Default or Event of
Default shall then exist, the Company shall be deemed to have elected to convert
such IBOR Loans into Base Rate Loans effective as of the expiration date of such
current Interest Period.
(d) Upon receipt of a Notice of Conversion/Continuation, the
Administrative Agent will promptly notify each Lender thereof, or, if no timely
notice is provided by the Company, the Administrative Agent will promptly notify
each Lender of the details of any automatic conversion. All conversions and
continuations shall be made pro rata according to the respective outstanding
principal amounts of the Loans, with respect to which the notice was given, held
by each Lender.
(e) During the existence of a Default or Event of Default, the
Company may not elect to have a Loan converted into or continued as an IBOR
Loan.
(f) Notwithstanding any other provision contained in this
Agreement, after giving effect to any conversion or continuation of any Loans,
there shall not be more than eight different Interest Periods in effect.
-32-
2.5. VOLUNTARY TERMINATION OR REDUCTION OF REVOLVING COMMITMENTS.
The Company may, upon not less than five Business Days' prior notice
to the Administrative Agent, terminate the Aggregate Revolving Commitment or
permanently reduce the Aggregate Revolving Commitment (pro rata based on the
Lenders' respective Revolving Commitment Percentages) by an aggregate minimum
amount of One Million Five Hundred Thousand Dollars ($1,500,000) or any multiple
of Five Hundred Thousand Dollars ($500,000) in excess thereof; PROVIDED, that
(i) until repayment in full of the Term Loan, the Aggregate Revolving Commitment
may not be reduced below $25,000,000 or terminated; (ii) no such reduction or
termination shall be permitted if, after giving effect thereto and to any
prepayments of the Loans made on the effective date thereof, the sum of the then
outstanding principal amount of the Revolving Loans and the LC Amount would
exceed the Aggregate Revolving Commitment then in effect; and (iii) that once
reduced in accordance with this Section 2.5, the Aggregate Revolving Commitment
may not be increased. Any reduction of the Aggregate Revolving Commitment shall
be applied to each Lender's Revolving Commitment in accordance with such
Lender's Revolving Commitment Percentage. All accrued non-use fees to, but not
including the effective date of any reduction or termination of the Aggregate
Revolving Commitment, shall be paid on the effective date of such reduction or
termination.
2.6. OPTIONAL PREPAYMENTS.
Subject to Section 3.4, the Company may, at any time or from time to
time, upon at least two Business Days' notice in the case of IBOR Loans, or upon
same day notice in the case of Base Rate Loans, to the Administrative Agent,
ratably, in accordance with each Lender's Commitment Percentage, prepay Loans in
whole or in part, (a) in the case of Revolving Loans which are IBOR Loans, in
minimum amounts of Five Hundred Thousand Dollars ($500,000) or any multiple of
One Hundred Thousand Dollars ($100,000) in excess thereof, (b) in the case of
Revolving Loans which are Base Rate Loans, in any amount and (c) in the case of
Term Loans, in minimum amounts of Five Hundred Thousand Dollars ($500,000) or
any multiple of One Hundred Thousand Dollars ($100,000) in excess thereof. Each
notice of prepayment shall specify the date and amount of such prepayment,
whether such prepayment is of the Term Loan or the Revolving Loans and whether
such prepayment is of Base Rate Loans or IBOR Loans, or any combination thereof
and if such prepayment includes a prepayment of IBOR Loans, the Interest Periods
of the Loans to be prepaid. Such notice shall not thereafter be revocable by the
Company and the Administrative Agent will promptly notify each Lender thereof
and of such Lender's Commitment Percentage of such prepayment. If such notice is
given by the Company, the Company shall make such prepayment and the payment
amount specified in such notice shall be due and payable on the date specified
therein, together with accrued interest to each such date on the amount prepaid
and any amounts required pursuant to Section 3.4. Any prepayments by the Company
pursuant to this Section 2.6 shall be applied to the Revolving Loans or the Term
Loan as specified in the Company's notice of prepayment; PROVIDED, that if
applied to the Term Loan, such prepayments shall be applied against the
remaining installments of the Term Loan in the order of their maturities. If the
Company shall have failed to specify in its notice of
-33-
prepayment the Loans to which such prepayment is to be applied, any prepayments
by the Company pursuant to this Section 2.6 shall be applied first to Revolving
Loans and then to the Term Loan and within each category, first to any Base Rate
Loans then outstanding and then to IBOR Loans with the shortest Interest Periods
remaining. Amounts applied to the Revolving Loans pursuant to this Section 2.6
shall not permanently reduce or terminate the Revolving Commitments or the
Aggregate Revolving Commitment, unless otherwise specified by the Company in its
notice of prepayment and only if such reduction or termination is permitted
under Section 2.5.
2.7. MANDATORY PREPAYMENTS OF LOANS FOR ASSET DISPOSITIONS.
Except as otherwise provided in Section 6.6, if the Company or any of
its Subsidiaries shall at any time or from time to time make or agree to make a
Disposition or shall suffer an Event of Loss, then (i) the Company shall
promptly notify the Administrative Agent of such proposed Disposition or Event
of Loss (including the amount of the estimated gross proceeds thereof and Net
Proceeds thereof to be received by the Company or its Subsidiary in respect
thereof) in excess of $250,000 or at any time that an Event of Default is in
existence, and (ii) subject to Sections 6.6 and 7.2, deliver the Net Proceeds of
each Disposition or Event of Loss to the Administrative Agent to be applied to
the Obligations in the manner provided in this Section 2.7. Except as otherwise
provided in Section 6.6, to the extent that the Property subject to the
applicable Disposition or Event of Loss consists of Accounts Receivable or
Inventory, the applicable prepayment shall be applied to reduce the outstanding
principal balance of the Revolving Loans, but shall not permanently reduce the
Aggregate Revolving Commitment. Except as otherwise provided in Section 6.6, to
the extent that the Property subject to the applicable Disposition or Event of
Loss consists of machinery or equipment, real Property or other Property other
than Accounts Receivable or Inventory, so long as no Default or Event of Default
has occurred and is continuing, proceeds of Dispositions thereof shall, at the
request of the Company, be remitted to the Company to replace the subject
Property with an economical unit of substantially similar character and value as
the subject Property within 180 days after its Disposition; provided, that if
the Company does not make such request at the time of such Disposition or if
such proceeds are not so used, the applicable amount shall be applied first
against the remaining installments of the Term Loan on a pro rata basis, and
then, to reduce the outstanding principal balance of the Revolving Loans (but
shall not permanently reduce the Aggregate Revolving Commitment).
Notwithstanding the foregoing, during the existence of a Event of Default, all
such amounts shall be applied to the Obligations in such order and manner as all
of the Lenders shall elect.
2.8. REPAYMENT.
(a) THE TERM LOAN.
Unless the Term Loan has been accelerated pursuant to subsection
8.2(a), the Company shall repay the Term Loan on each date set forth below in
the amount set forth below opposite such date:
-34-
Date Amount
---- ------
December 31, 2002 $ 1,250,000
March 31, 2003 $ 1,250,000
June 30, 2003 $ 1,250,000
September 30, 2003 $ 1,750,000
December 31, 2003 $ 1,750,000
March 31, 2004 $ 1,750,000
June 30, 2004 $ 1,750,000
September 30, 2004 $ 2,000,000
December 31, 2004 $ 2,000,000
March 31, 2005 $ 2,625,000
June 30, 2005 $ 2,625,000
(b) THE REVOLVING LOANS.
The Revolving Commitments hereunder shall terminate on the earlier to
occur of (i) the date on which the Revolving Commitments are terminated pursuant
to subsection 8.2(a), (ii) such date as is deferred by the Company pursuant to
Section 2.5, and (iii) June 30, 2005. The date of termination of the Revolving
Commitments as provided in the immediately preceding sentence is referred to
herein as the "Revolving Termination Date." On the Revolving Termination Date,
the Company shall repay to the Agents and the Lenders in full the aggregate
principal amount of the Revolving Loans and reimbursement obligations with
respect to Letters of Credit then outstanding. In the event any Letters of
Credit are outstanding on the Revolving Termination Date, the Company shall
provide to the Administrative Agent cash Collateral in the amount of such
Letters of Credit to secure the Company's reimbursement obligations with respect
to such Letters of Credit, together with reasonably anticipated related fees,
costs and expenses, which cash Collateral shall be maintained in a Collateral
Account.
If at any time hereafter the sum of the aggregate principal amount of
all outstanding Revolving Loans and the LC Amount exceeds the Revolving Loan
Availability (an "Overadvance"), the Company shall immediately pay such excess
to Administrative Agent for the account of Lenders; provided, that
notwithstanding the foregoing, if an Overadvance is caused by the occurrence of
an Event of Loss, the Company shall not be required to pay the amount of such
excess to Administrative Agent as provided herein until the earlier of (A)
forty-five (45) days after the occurrence of such Event of Loss and (B) the
receipt by the Company of insurance, condemnation or other proceeds of such
Event of Loss.
2.9. INTEREST.
(a) Subject to subsection 2.9(d), each Loan shall bear interest on
the outstanding principal amount thereof from the date when made to the date
such Loan is repaid (i) for each day during which such Loan is an IBOR Loan, at
IBOR for the applicable Interest Period for such Loan for such day, and (ii) for
each day during which such Loan is a Base Rate
-35-
Loan, at the Alternate Base Rate for such day; PLUS, in each case, the
Applicable Margin then in effect.
(b) Interest on each Loan shall be paid in arrears on each
Interest Payment Date with respect to such Loan. Interest on each Loan shall
also be paid on the date of payment (including prepayment) in full thereof and
interest on IBOR Loans only shall also be paid on the date of any prepayment of
such IBOR Loans pursuant to Sections 2.6 and 2.7 for the portion of the IBOR
Loans so prepaid. During the existence of any Event of Default, interest shall
be paid on demand of the Administrative Agent at the request or with the consent
of the Majority Lenders.
(c) While any Event of Default exists or after acceleration, the
Company shall pay interest on the principal amount of (i) all outstanding Loans,
at a rate per annum which is determined by adding 200 basis points to the
interest rate otherwise applicable to such Loans and (ii) all reimbursement
obligations of the Company under subsection 2.15(b) due and unpaid, at the rate
per annum which is determined by adding 200 basis points to the interest rate
otherwise applicable to Revolving Loans comprised of Base Rate Loans.
(d) Anything herein to the contrary notwithstanding, the
obligations of the Company hereunder shall be subject to the limitation that
payments of interest shall not be required, for any period for which interest is
computed hereunder, to the extent (but only to the extent) that contracting for
or receiving such payment by the respective Lender would be contrary to the
provisions of any law applicable to such Lender limiting the highest rate of
interest which may be lawfully contracted for, charged or received by such
Lender, and in such event the Company shall pay such Lender interest at the
highest rate permitted by applicable law.
2.10 FEES.
(a) FEE LETTERS.
The Company shall pay to the Administrative Agent for the accounts of
the Agents as set forth therein certain fees in the amounts and at the times set
forth in a certain letter agreement between the Company and the Agents of even
date herewith (the "Fee Letter").
(b) NON-USE FEE.
The Company shall pay to the Administrative Agent for the account of
each Lender, a non-use fee on the average daily unused portion of such Lender's
Revolving Commitment, computed on a quarterly basis, in arrears, on the last
Business Day of each calendar quarter, based upon the daily utilization for that
quarter as calculated by the Administrative Agent, equal to the Applicable
Margin for Non-Use Fees. Such non-use fee shall accrue from Closing Date to the
Revolving Termination Date and shall be due and payable quarterly in arrears on
the last Business Day of each March, June, September
-36-
and December commencing on June 30, 2002 through the Revolving Termination Date,
with the final payment to be made on the Revolving Termination Date.
(c) LETTER OF CREDIT FEES.
The Company shall pay to the Administrative Agent for the account of
the Lenders a Letter of Credit fee on the average daily outstanding Letters of
Credit issued for the account of the Company, computed on a quarterly basis in
arrears on the last Business Day of each calendar quarter based on the daily
utilization for that quarter as calculated by the Administrative Agent, at a per
annum rate equal to the Applicable Margin at such time for IBOR Loans. Such
Letter of Credit fees shall accrue from the date a Letter of Credit is issued to
the date such Letter of Credit is terminated and shall be due and payable
quarterly in arrears on the last Business Day of each March, June, September and
December commencing on June 30, 2002. The Company further agrees to pay the
Issuer for the sole account of the Issuer (i) with respect to standby Letters of
Credit (a) on the date of issuance of each Letter of Credit an issuance fee in
an amount equal to Two Hundred Fifty Dollars ($250) and (b) all costs and
expenses incurred by the Issuer in connection with such Letter of Credit, and
(ii) with respect to documentary Letters of Credit, all customary charges, fees,
costs and expenses of the Issuer at such times as the Issuer customarily charges
such charges, fees, costs and expenses.
2.11 COMPUTATION OF FEES AND INTEREST.
(a) All computations of interest in respect of Base Rate Loans and
all computations of fees under this Agreement shall be made on the basis of a
365 or 366-day year, as appropriate, and actual days elapsed; all computations
of interest in respect of IBOR Loans under this Agreement shall be made on the
basis of a 360-day year and actual days elapsed, which results in more interest
being paid than if computed on the basis of a 365 or 366-day year. Interest and
fees shall accrue during each period during which interest or such fees are
computed from the first day thereof to the last day thereof.
(b) The Administrative Agent will, with reasonable promptness,
notify the Company and the Lenders of each determination of IBOR; PROVIDED, that
any failure to do so shall not relieve the Company of any liability hereunder or
provide the basis for any claim against the Administrative Agent. Any change in
the interest rate on a Loan resulting from a change in the Applicable Margin or
Eurodollar Reserve Percentage shall become effective as of the opening of
business on the day on which such change in the Applicable Margin or Eurodollar
Reserve Percentage becomes effective. The Administrative Agent will with
reasonable promptness notify the Company and the Lenders of the effective date
and the amount of each such change; PROVIDED, that any failure to do so shall
not relieve the Company of any liability hereunder or provide the basis for any
claim against the Administrative Agent.
(c) Each determination of an interest rate by the Administrative
Agent shall be conclusive and binding on the Company and the Lenders in the
absence of manifest error. The Administrative Agent will, at the request of the
Company or any Lender, deliver to the
-37-
Company or the Lender, as the case may be, a statement showing the quotations
used by the Administrative Agent in determining any interest rate.
(d) If the Reference Bank's Revolving Commitment shall terminate
(otherwise than on termination of all the Revolving Commitments), or for any
reason whatsoever the Reference Bank shall cease to be a Lender hereunder, the
Reference Bank shall thereupon cease to be the Reference Bank, and the IBOR
shall be determined on the basis of the rates as notified by the remaining
Lenders.
(e) The Reference Bank shall use its best efforts to furnish
quotations of rates to the Administrative Agent as contemplated hereby. If the
Reference Bank shall be unable or otherwise fails to supply such rates to the
Administrative Agent upon its request, the rate of interest shall be determined
on the basis of the quotations of the remaining Lenders.
2.12 PAYMENTS BY THE COMPANY.
(a) All payments (including prepayments) to be made by the Company
on account of principal, interest, fees and other amounts required hereunder
shall be made without set-off, recoupment or counterclaim; shall, except as
otherwise expressly provided herein, be made to the Administrative Agent for the
account of the Lenders (pro rata based on each Lender's Commitment Percentage)
at the Administrative Agent's Payment Office, and shall be made in dollars and
in immediately available funds, no later than 11:00 a.m. (Chicago time) on the
date specified herein. The Administrative Agent will promptly distribute to each
Lender its Commitment Percentage (or other applicable share as expressly
provided in the Loan Documents) of such principal, interest, fees or other
amounts, in like funds as received. Any payment which is received by the
Administrative Agent later than 11:00 a.m. (Chicago time) shall be deemed to
have been received on the immediately succeeding Business Day and any applicable
interest or fee shall continue to accrue.
(b) Whenever any payment hereunder shall be stated to be due on a
day other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of interest or fees, as the case may be; subject to the provisions
set forth in the definition of "Interest Period" herein.
(c) Unless the Administrative Agent shall have received notice
from the Company prior to the date on which any payment is due hereunder that
the Company will not make such payment in full as and when required hereunder,
the Administrative Agent may assume that the Company has made such payment in
full to the Administrative Agent on such date in immediately available funds and
the Administrative Agent may (but shall not be so required), in reliance upon
such assumption, cause to be distributed to each Lender on such due date an
amount equal to the amount then due such Lender. If and to the extent the
Company shall not have made such payment in full to the Administrative Agent,
each Lender shall repay to the Administrative Agent on demand its Commitment
Percentage of such amount distributed to the Lenders in excess of the amount
actually received by the Administrative Agent, together with interest thereon
for each day from the date such amount is distributed to such Lender until
-38-
the date such Lender repays such amount to the Administrative Agent, at the
Federal Funds Rate as in effect for each such day.
2.13 PAYMENTS BY THE LENDERS TO THE ADMINISTRATIVE AGENT.
(a) Unless the Administrative Agent shall have received notice
from a Lender on the Closing Date or, with respect to each Borrowing after the
Closing Date, at least one Business Day prior to the date of any proposed
Borrowing, that such Lender will not make available to the Administrative Agent
as and when required hereunder for the account of the Company the amount of that
Lender's Commitment Percentage of the Borrowing, the Administrative Agent may
assume that each Lender has made such amount available to the Administrative
Agent in immediately available funds on the Borrowing date no later than 11:00
a.m. (Chicago time) and the Administrative Agent may (but shall not be so
required), in reliance upon such assumption, make available to the Company on
such date a corresponding amount. If and to the extent any Lender shall not have
made its full amount available to the Administrative Agent in immediately
available funds and the Administrative Agent in such circumstances has made
available to the Company such amount, that such Lender shall on or before 11:00
a.m. (Chicago time) the next Business Day following the date of such Borrowing
make such amount available to the Administrative Agent, together with interest
at the Federal Funds Rate for and determined as of each day during such period.
A notice of the Administrative Agent submitted to any Lender with respect to
amounts owing under this subsection 2.13(a) shall be conclusive, absent manifest
error. If such amount is so made available, such payment to the Administrative
Agent shall constitute such Lender's Loan on the date of Borrowing for all
purposes of this Agreement. If such amount is not made available to the
Administrative Agent on or before 11:00 a.m. (Chicago time) the next Business
Day following the date of such Borrowing, the Administrative Agent shall notify
the Company of such failure to fund and, upon demand by the Administrative
Agent, the Company shall pay such amount to the Administrative Agent for the
Administrative Agent's account, together with interest thereon for each day
elapsed since the date of such Borrowing, at a rate per annum equal to the
interest rate applicable at the time to the Loans comprising such Borrowing.
(b) The failure of any Lender to make any Loan on any Borrowing
date shall not relieve any other Lender of any obligation hereunder to make a
Loan on such Borrowing date, but no Lender shall be responsible for the failure
of any other Lender to make the Loan to be made by such other Lender on the date
of any Borrowing.
2.14 SHARING OF PAYMENTS, ETC.
If, other than as expressly provided elsewhere herein, any Lender
shall receive on account of the Loans made by it any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) in
excess of its Commitment Percentage of payments on account of the Loans received
by all the Lenders, such Lender shall forthwith (a) notify the Administrative
Agent of such fact, and (b) purchase from the other Lenders such participations
in the Loans made by them as shall be necessary to cause such purchasing Lender
to share the excess payment ratably with each of them; PROVIDED, HOWEVER, that
if all or any portion of such excess payment is thereafter
-39-
recovered from the purchasing Lender, such purchase shall to that extent be
rescinded and each other Lender shall repay to the purchasing Lender the
purchase price paid therefor, together with an amount equal to such paying
Lender's Commitment Percentage (according to the proportion of (i) the amount of
such paying Lender's required repayment, to (ii) the total amount so recovered
from the purchasing Lender) of any interest or other amount paid or payable by
the purchasing Lender in respect of the total amount so recovered. The Company
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 2.14 may, to the fullest extent permitted by law,
exercise all of its rights of payment (including the right of set-off, but
subject to Section 10.9) with respect to such participation as fully as if such
Lender were the direct creditor of the Company in the amount of such
participation. The Administrative Agent will keep records (which shall be
conclusive and binding in the absence of manifest error) of participations
purchased pursuant to this Section 2.14 and will in each case notify the Lenders
following any such purchases or repayments.
2.15 CERTAIN LETTER OF CREDIT PROVISIONS.
(a) Immediately upon the issuance of each Letter of Credit, each
Lender shall be deemed to, and hereby severally agrees to, have irrevocably
purchased from the Issuer a participation in such Letter of Credit and drawings
thereunder in an amount equal to such Lender's Revolving Commitment Percentage
of the maximum amount which is or at any time may become available to be drawn
thereunder. The Issuer shall not have any obligation to issue any Letter of
Credit if the Lenders have no obligation to participate in such Letter of
Credit.
(b) In the event the Issuer has determined to honor a request for
drawing under a Letter of Credit issued by it, the Issuer shall immediately
notify the Company and the Administrative Agent, and the Company shall reimburse
the Issuer on or before the Business Day immediately following the date on which
such drawing is honored (such immediately following date, the "Disbursement
Date") in same day funds equal to the amount of such drawing; PROVIDED, that,
anything contained in this Agreement to the contrary notwithstanding, (i) unless
the Company shall have notified the Administrative Agent and the Issuer prior to
11:00 a.m. (Chicago time) on the Disbursement Date that the Company intends to
reimburse the Issuer for the amount of such drawing with funds other than the
proceeds of Revolving Loans and the Company does so reimburse the Issuer prior
to 11:00 a.m. (Chicago time) on the Disbursement Date, the Company shall be
deemed to have given a timely Notice of Borrowing to the Administrative Agent
requesting the Lenders to make Revolving Loans that are Base Rate Loans on the
Disbursement Date in an amount equal to the amount of such drawing and (ii)
subject to satisfaction or waiver of the conditions specified in Section 4.2,
the Lenders shall, on the Disbursement Date, make Revolving Loans that are Base
Rate Loans in the amount of such drawing, the proceeds of which shall be applied
directly by the Administrative Agent to reimburse the Issuer for the amount of
such drawing; and PROVIDED, FURTHER that if for any reason proceeds of Revolving
Loans are not received by the Issuer on the Disbursement Date in an amount equal
to the amount of such drawing, the Company shall reimburse the Issuer, on
demand, in an amount in same day funds equal to the excess of the amount of such
drawing over the aggregate amount of such Revolving Loans, if any, which are so
received, together with interest thereon at a rate per annum equal to the rate
per annum then in effect for Base Rate
-40-
Revolving Loans pursuant to Section 2.9 from the date of demand to the date of
reimbursement. Nothing in this subsection 2.15(b) shall be deemed to relieve any
Lender from its obligation to make Revolving Loans on the terms and conditions
set forth in this Agreement, and the Company shall retain any and all rights it
may have against any Lender resulting from the failure of such Lender to make
such Revolving Loans under this subsection 2.15(b).
(c) In the event that the Company shall fail for any reason to
reimburse the Issuer as provided in subsection 2.15(b) on the Disbursement Date
in an amount equal to the amount of any drawing honored by the Issuer under a
Letter of Credit issued by it, the Issuer shall promptly notify the
Administrative Agent and the Administrative Agent shall promptly notify each
Lender of the unreimbursed amount of such drawing and of such Lender's
respective participation therein based on such Lender's Revolving Commitment
Percentage. In such event, each Lender shall make available to the Issuer an
amount equal to its respective participation in same day funds, at the office of
the Issuer specified in such notice, not later than 11:00 a.m. (Chicago time) on
the first Business Day after the date notified by the Issuer. In the event that
any Lender fails to make available to the Issuer on such Business Day the amount
of such Lender's participation in such Letter of Credit as provided in this
subsection 2.15(c), the Issuer shall be entitled to recover such amount on
demand from such Lender together with interest thereon at the rate per annum
equal to the Federal Funds Rate for and determined as of each day during such
period. Nothing in this subsection 2.15(c) shall be deemed to relieve the
Company from its obligation to reimburse the Issuer as provided in subsection
2.15(b). In the event the Issuer shall have been reimbursed by Lenders pursuant
to this subsection 2.15(c) for all or any portion of any drawing honored by the
Issuer under a Letter of Credit issued by it, the Issuer shall distribute to
each Lender which has paid all amounts payable by it under this subsection
2.15(c) with respect to such drawing such Lender's Revolving Commitment
Percentage of all payments subsequently received by the Issuer from the Company
in reimbursement of such drawing when such payments are received. Promptly upon
receipt by the Issuer of any payment of interest in respect of the Company's
reimbursement obligation pursuant to subsection 2.15(b) with respect to a
drawing, in the event the Issuer shall have been reimbursed by any Lender
pursuant to this subsection 2.15(c) for all or any portion of such drawing, the
Issuer shall distribute to such Lender which has paid all amounts payable by it
under this subsection 2.15(c) with respect to such drawing such Lender's
Revolving Commitment Percentage of any interest received by the Issuer in
respect of that portion of such drawing so reimbursed by such Lender.
(d) The obligation of the Company to reimburse the Issuer for
drawings made under the Letters of Credit issued by it and to repay any
Revolving Loans made by the Lenders pursuant to subsection 2.15(b) and the
obligations of the Lenders under subsection 2.15(c) shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including, without limitation, the following
circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit;
-41-
(ii) the existence of any claim, set-off, defense or other
right which the Company or any Lender may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any Persons for
whom any such transferee may be acting), the Issuer or other Lender or any
other Person or, in the case of a Lender, against the Company, whether in
connection with this Agreement, the transactions contemplated herein or any
unrelated transaction (including any underlying transaction between the
Company or one of its Subsidiaries and the beneficiary for which any Letter
of Credit was procured);
(iii) any draft, demand, certificate or 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) payment by the Issuer under any Letter of Credit
against presentation of a demand, draft or certificate or other document
which does not comply with the terms of such Letter of Credit (absent the
Issuer's gross negligence or willful misconduct);
(v) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of the
Company or any of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan Document
by any party thereto;
(vii) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Default shall
have occurred and be continuing;
PROVIDED, HOWEVER, that after paying in full its obligation hereunder, nothing
herein shall adversely affect the right of the Company or such Lender, as the
case may be, to commence any proceeding against the Issuer for any wrongful
disbursement made by the Issuer under a Letter of Credit as a result of acts or
omissions constituting gross negligence or willful misconduct on the part of the
Issuer.
(e) In addition to amounts payable as provided in subsection
2.15(b), the Company hereby agrees to protect, indemnify, pay and save harmless
the Issuer and its officers, employees or agents from and against any and all
claims, demands, liabilities, damages, losses, and reasonable costs, charges and
expenses (including reasonable fees, expenses and disbursements of counsel)
which the Issuer may incur or be subject to as a consequence, direct or
indirect, of (i) the issuance of any Letter of Credit by the Issuer, other than
as a result of the gross negligence or willful misconduct of the Issuer or its
officers, employees or agents as determined by a final judgment of a court of
competent jurisdiction or
-42-
(ii) the failure of the Issuer to honor a drawing under any such Letter of
Credit as a result of any act or omission, whether rightful or wrongful, of any
present or future Governmental Authority.
(f) As between the Company and the Issuer, the Company assumes all
risks of the acts and omissions of, or misuse of the Letters of Credit issued by
the Issuer by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, the Issuer shall not be
responsible for: (i) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted by any party in connection with the
application for and issuance of any such Letter of Credit, even if it should in
fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (ii) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any such Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason; (iii) failure
of the beneficiary of any such Letter of Credit to comply fully with any
conditions required in order to draw upon such Letter of Credit; (iv) errors,
omissions, interruptions, or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher;
(v) errors in interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of the Issuer; and none of the above shall affect
or impair, or prevent the vesting of, any of the Issuer's rights or powers
hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 2.15(f), any
action taken or omitted by the Issuer under or in connection with the Letters of
Credit issued by it or any documents and certificates delivered thereunder, if
taken or omitted in good faith, shall not put the Issuer under any resulting
liability to the Company.
Notwithstanding anything to the contrary contained in this subsection
2.15(f), the Company shall retain any and all rights it may have against the
Issuer and its officers, employees or agents for any liability arising out of
the gross negligence or willful misconduct of the Issuer or its officers,
employees or agents.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.1. TAXES.
(a) Subject to subsection 3.1(g), any and all payments by the
Company to each Lender or any Agent under this Agreement shall be made free and
clear of, and without deduction or withholding for, any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Lender and each
Agent, such taxes (including income taxes or franchise taxes) as are imposed on
or measured by each Lender's and each Agent's taxable income by the jurisdiction
under the laws of which such Lender or such Agent, as the case may be, is
organized or maintains a
-43-
Lending Office or any political subdivision thereof or any jurisdiction of which
it is a political subdivision (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes").
(b) In addition, the Company shall pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Loan Documents (hereinafter referred to as "Other Taxes").
(c) Subject to subsection 3.1(g), the Company shall indemnify and
hold harmless each Lender and each Agent for the full amount of Taxes or Other
Taxes (including any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 3.1) paid by such Lender or such Agent and any
liability (including penalties, interest, additions to tax and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. Payment under this indemnification shall be made
within 30 days from the date such Lender or such Agent makes written demand
therefor.
(d) If the Company shall be required by law to deduct or withhold
any Taxes or Other Taxes from or in respect of any sum payable hereunder to any
Lender or any Agent, then, subject to subsection 3.1(g):
(i) the sum payable shall be increased as necessary so
that after making all required deductions of Taxes or Other Taxes
(including deductions of Taxes or other Taxes applicable to additional
sums payable under this Section 3.1) such Lender or such Agent, as the
case may be, receives an amount equal to the sum it would have
received had no such deductions been made;
(ii) the Company shall make such deductions, and
(iii) the Company shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with
applicable law.
(e) Within 30 days after the date of any payment by the Company of
Taxes or Other Taxes, the Company shall furnish to the Administrative Agent the
original or a certified copy of a receipt evidencing payment thereof, or other
evidence of payment satisfactory to the Administrative Agent.
(f) Each Lender which is a foreign person (i.e., a person other
than a United States person for United States Federal income tax purposes)
agrees that:
(i) it shall, no later than the Closing Date (or, in
the case of a Lender which becomes a party hereto pursuant to Section
10.8 after the Closing Date, the date upon which the Lender becomes a
party hereto) deliver to the Company through the Administrative Agent
two accurate and complete
-44-
signed originals of Internal Revenue Service Form W-8BEN or any
successor thereto ("Form W-8BEN"), or two accurate and complete signed
originals of Internal Revenue Service Form W-8ECI or any successor
thereto ("Form W-8ECI"), as appropriate, in each case indicating that
the Lender is on the date of delivery thereof entitled to receive
payments of principal, interest and fees under this Agreement free
from withholding of United States Federal income tax;
(ii) if at any time the Lender makes any changes
necessitating a new Form W-8BEN or Form W-8ECI, it shall with
reasonable promptness deliver to the Company through the
Administrative Agent in replacement for, or in addition to, the forms
previously delivered by it hereunder, two accurate and complete signed
originals of Form W-8BEN; or two accurate and complete signed
originals of Form W-8ECI, as appropriate, in each case indicating that
the Lender is on the date of delivery thereof entitled to receive
payments of principal, interest and fees under this Agreement free
from withholding of United States Federal income tax;
(iii) it shall, before or promptly after the occurrence
of any event (including the passing of time but excluding any event
mentioned in (ii) above) requiring a change in or renewal of the most
recent Form W-8BEN or Form W-8ECI previously delivered by such Lender
and deliver to the Company through the Administrative Agent two
accurate and complete original signed copies of Form W-8BEN or Form
W-8ECI in replacement for the forms previously delivered by the
Lender; and
(iv) it shall, promptly upon the Company's or the
Administrative Agent's reasonable request to that effect, deliver to
the Company or the Administrative Agent (as the case may be) such
other forms or similar documentation as may be required from time to
time by any applicable law, treaty, rule or regulation in order to
establish such Lender's tax status for withholding purposes.
(g) The Company will not be required to pay any additional amounts
in respect of United States Federal income tax pursuant to subsection 3.1(d) to
any Lender for the account of any Lending Office of such Lender:
(i) if the obligation to pay such additional amounts
would not have arisen but for a failure by such Lender to comply with
its obligations under subsection 3.1(f);
(ii) if such Lender shall have delivered to the Company
a Form W-8BEN in respect of such Lending Office pursuant to subsection
3.1(f), and such Lender shall not at any time be entitled to exemption
from deduction or withholding of United States Federal income tax in
respect of payments by the Company hereunder for the account of such
Lending Office
-45-
for any reason other than a change in United States law or regulations
or in the official interpretation of such law or regulations by any
Governmental Authority charged with the interpretation or
administration thereof (whether or not having the force of law) after
the date of delivery of such Form W-8BEN; or
(iii) if the Lender shall have delivered to the Company
a Form W-8ECI in respect of such Lending Office pursuant to subsection
3.1(f), and such Lender shall not at any time be entitled to exemption
from deduction or withholding of United States Federal income tax in
respect of payments by the Company hereunder for the account of such
Lending Office for any reason other than a change in United States law
or regulations or any applicable tax treaty or regulations or in the
official interpretation of any such law, treaty or regulations by any
Governmental Authority charged with the interpretation or
administration thereof (whether or not having the force of law) after
the date of delivery of such Form W-8ECI.
(h) If, at any time, the Company requests any Lender to deliver
any forms or other documentation pursuant to subsection 3.1(f)(iv), then the
Company shall, on demand of such Lender through the Administrative Agent,
reimburse such Lender for any costs and expenses (including Attorney Costs)
reasonably incurred by such Lender in the preparation or delivery of such forms
or other documentation.
(i) If the Company is required to pay additional amounts to any
Lender or any Agent pursuant to subsection 3.1(d), then such Lender shall use
its reasonable best efforts (consistent with legal and regulatory restrictions)
to change the jurisdiction of its Lending Office so as to eliminate any such
additional payment by the Company which may thereafter accrue if such change in
the judgment of such Lender is not otherwise disadvantageous to such Lender.
3.2. ILLEGALITY.
(a) If any Lender shall determine that the introduction of any
Requirement of Law, or any change in any Requirement of Law or in the
interpretation or administration thereof, has made it unlawful, or that any
central bank or other Governmental Authority has asserted that it is unlawful,
for any Lender or its Lending Office to make IBOR Loans, then, on notice thereof
by the Lender to the Company through the Administrative Agent, the obligation of
that Lender to make IBOR Loans shall be suspended until the Lender shall have
notified the Administrative Agent and the Company that the circumstances giving
rise to such determination no longer exists.
(b) If a Lender shall determine that it is unlawful to maintain
any IBOR Loan, the Company shall prepay in full all IBOR Loans of that Lender
then outstanding, together with interest accrued thereon, either on the last day
of the Interest Period thereof if the Lender may lawfully continue to maintain
such IBOR Loans to such day, or immediately, if the
-46-
Lender may not lawfully continue to maintain such IBOR Loans, together with any
amounts required to be paid in connection therewith pursuant to Section 3.4.
(c) Before giving any notice to the Administrative Agent pursuant
to this Section 3.2, the affected Lender shall designate a different Lending
Office with respect to its IBOR Loans if such designation will avoid the need
for giving such notice or making such demand and will not, in the judgment of
the Lender, be illegal or otherwise disadvantageous to the Lender.
3.3. INCREASED COSTS AND REDUCTION OF RETURN.
(a) If any Lender shall determine that, due to either (i) the
introduction after the Closing Date of, or any change in or in the
interpretation of, any law or regulation or (ii) the compliance with any
guideline or request issued after the Closing Date by any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
any increase in the cost to such Lender of agreeing to make or making, funding
or maintaining any IBOR Loans (other than any change by way of imposition of or
increase in reserve requirements included in the calculation of the IBOR Rate),
then the Company shall be liable for, and shall from time to time, upon demand
therefor by such Lender (with a copy of such demand to the Administrative
Agent), pay to the Administrative Agent for the account of such Lender,
additional amounts as are sufficient to compensate such Lender for such
increased costs.
(b) If any Lender shall have determined that (i) the introduction
after the Closing Date of any Capital Adequacy Regulation, (ii) any change after
the Closing Date in any Capital Adequacy Regulation, (iii) any change after the
Closing Date in the interpretation or administration of any Capital Adequacy
Regulation by any central bank or other Governmental Authority charged with the
interpretation or administration thereof, or (iv) compliance by the Lender (or
its Lending Office) or any corporation controlling the Lender, with any Capital
Adequacy Regulation issued after the Closing Date; affects or would affect the
amount of capital required or expected to be maintained by the Lender or any
corporation controlling the Lender and (taking into consideration such Lender's
or such corporation's policies with respect to capital adequacy and such
Lender's desired return on capital) determines that the amount of such required
capital is increased as a consequence of its Revolving Commitment, loans,
credits or obligations under this Agreement, then, upon demand of such Lender
(with a copy to the Administrative Agent), the Company shall upon demand pay to
the Lender, from time to time as specified by the Lender, additional amounts
sufficient to compensate the Lender for such increase.
3.4. FUNDING LOSSES.
The Company agrees to reimburse each Lender and to hold each Lender
harmless from any loss or expense which the Lender may sustain or incur as a
consequence of:
-47-
(a) the failure of the Company to borrow an IBOR Loan, or to
continue or convert a Loan as or into an IBOR Loan, in any case after the
Company has given (or is deemed to have given) a Notice of Borrowing or a Notice
of Conversion/ Continuation;
(b) the failure of the Company to make any prepayment of an IBOR
Loan after the Company has given a notice in accordance with Section 2.6;
(c) the prepayment (including pursuant to Section 2.7) of an IBOR
Loan on a day which is not the last day of the Interest Period with respect
thereto; or
(d) the conversion pursuant to Section 2.4 of any IBOR Loan to a
Base Rate Loan on a day that is not the last day of the respective Interest
Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its IBOR Loans hereunder or from fees
payable to terminate the deposits from which such funds were obtained. Solely
for purposes of calculating amounts payable by the Company to the Lenders under
this Section 3.4 and under subsection 3.3(a), each IBOR Loan made by a Lender
(and each related reserve, special deposit or similar requirement) shall be
conclusively deemed to have been funded at the IBOR used in determining the IBOR
for such IBOR Loan by a matching deposit or other borrowing in the interbank
eurodollar market for a comparable amount and for a comparable period, whether
or not such IBOR Loan is in fact so funded.
3.5. INABILITY TO DETERMINE RATES.
If the Administrative Agent shall have determined that for any reason
adequate and reasonable means do not exist for ascertaining the IBOR for any
requested Interest Period with respect to a proposed IBOR Loan or that the IBOR
applicable pursuant to Section 2.9 for any requested Interest Period with
respect to a proposed IBOR Loan does not adequately and fairly reflect the cost
to the Lenders of funding such Loan, the Administrative Agent will forthwith
give notice of such determination to the Company and each Lender. Thereafter,
the obligation of the Lenders to make or maintain future IBOR Loans, as the case
may be, hereunder shall be suspended until the Administrative Agent revokes such
notice in writing. Upon receipt of such notice, the Company may revoke any
Notice of Borrowing or Notice of Conversion/Continuation then submitted by it,
without giving rise to a reimbursement obligation under Section 3.4. If the
Company does not revoke such notice, the Lenders shall make, convert or continue
the Loans, as proposed by the Company, in the amount specified in the applicable
notice submitted by the Company, but such Loans shall be made, converted or
continued as Base Rate Loans instead of IBOR Loans, as the case may be.
3.6. CERTIFICATES OF THE LENDERS.
Any Lender claiming reimbursement or compensation pursuant to this
Article III shall deliver to the Company (with a copy to the Administrative
Agent) a certificate setting forth in reasonable detail the amount payable to
the Lender hereunder
-48-
and such certificate shall be conclusive and binding on the Company in the
absence of manifest error.
3.7. REPLACEMENT OF CERTAIN LENDERS.
If a Lender shall have (a) made a claim against the Company under
Section 3.1 or 3.3 or (b) suspended its obligations to make IBOR Loans under
subsection 3.2(a), the Company may make written demand on the affected Lender
(with a copy to the Administrative Agent) to assign, and such affected Lender
shall assign, pursuant to one or more duly executed Assignment and Acceptances
within five Business Days after the date of such demand, to one or more
Assignees to whom the Administrative Agent has consented (which consent shall
not be unreasonably withheld), all of such affected Lender's rights and
obligations under this Agreement (including without limitation such affected
Lender's Revolving Commitment, Term Commitment and all Loans owing to it), in
accordance with the terms of Section 10.8 hereof; PROVIDED, that the
Administrative Agent shall have no duty to locate an acceptable Assignee for the
purposes of accepting such assignment. The Administrative Agent is hereby
irrevocably authorized to execute one or more Assignment and Acceptances as
attorney-in-fact for any affected Lender which fails to or refuses to execute
and deliver the same in a timely manner. Each affected Lender shall be entitled
to receive, in cash and concurrently with the execution and delivery of the
applicable Assignment and Acceptances, all amounts owed to such affected Lender
hereunder and under any of the other Loan Documents, including accrued interest
and fees through the date of such assignment.
3.8. SURVIVAL.
The agreements and obligations of the Company in this Article III
shall survive the payment of all other Obligations.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. CONDITIONS OF INITIAL LOANS.
The obligation of each Lender party to this Agreement on the Closing
Date to make its initial Loan hereunder is subject to the condition that the
Administrative Agent shall have received on or before the Closing Date all of
the following, in form and substance satisfactory to each Agent and each Lender
and in sufficient copies for each Lender:
(a) CREDIT AGREEMENT AND NOTES.
This Agreement executed by the Company, each Agent and each of the
Lenders, and the Notes executed by the Company;
-49-
(b) RESOLUTIONS; INCUMBENCY.
(i) Copies of the resolutions of the board of directors
of the Company approving and authorizing the execution, delivery and
performance by the Company of this Agreement and the other Loan
Documents to be delivered hereunder, and authorizing the borrowing of
the Loans, certified as of the Closing Date by the Secretary or an
Assistant Secretary of the Company;
(ii) Copies of the resolutions of the board of directors
of each Loan Party other than the Company approving and authorizing
the execution, delivery and performance by it of the Loan Documents to
be delivered by it hereunder, certified as of the Closing Date by the
Secretary or an Assistant Secretary of such Loan Party; and
(iii) A certificate of the Secretary or Assistant
Secretary of the Company, and each other Loan Party, certifying the
names and true signatures of the officers of the Company and such Loan
Party authorized to execute, deliver and perform, as applicable, the
Loan Documents to be delivered by it hereunder;
(c) ARTICLES OF INCORPORATION; BY-LAWS AND GOOD STANDING.
Each of the following documents:
(i) the articles or certificate of incorporation or
other similar organizational documents of the Company and each other
Loan Party as in effect on the Closing Date, certified by the
Secretary of State (or similar, applicable Governmental Authority) of
the state of incorporation, organization or formation of the Company
or such Loan Party, as the case may be, as of a recent date and by the
Secretary or Assistant Secretary of the Company or such Loan Party, as
the case may be, as of the Closing Date, and the bylaws or similar
documents of the Company and such Loan Party as in effect on the
Closing Date, certified by the Secretary or Assistant Secretary of the
Company or such Loan Party, as the case may be, as of the Closing
Date; and
(ii) a good standing certificate for the Company and each
other Loan Party from the Secretary of State (or similar, applicable
Governmental Authority) of its state of incorporation and each state
where it is qualified to do business as a foreign corporation,
partnership or other business entity as of a recent date;
(d) COLLATERAL DOCUMENTS.
The Collateral Documents, executed by the Company and each other Loan
Party, in appropriate form for recording, where necessary, together with:
-50-
(i) acknowledgment copies of all UCC-l financing
statements filed, registered or recorded to perfect the security
interests of the Administrative Agent, for the benefit of the Agents
and the Lenders, or other evidence satisfactory to the Administrative
Agent that there has been filed, registered or recorded all financing
statements and other filings, registrations and recordings necessary
and advisable to perfect the Liens of the Administrative Agent, for
the benefit of the Agents and the Lenders in accordance with
applicable law;
(ii) written advice relating to such Lien and judgment
searches as the Administrative Agent shall have requested of the
Company, and such termination statements or other documents as may be
necessary to confirm that the Collateral is subject to no other Liens
in favor of any Persons (other than Permitted Liens);
(iii) all stock certificates and similar instruments
representing the Pledged Collateral, together with stock transfer
powers executed in blank;
(iv) evidence that all other actions necessary or, in the
opinion of the Administrative Agent or the Lenders, desirable to
perfect and protect the first priority security interest created by
the Collateral Documents (subject to the Permitted Liens) have been
taken;
(v) evidence that the Administrative Agent, for the
benefit of the Agents and the Lenders, has been named as loss payee
under all policies of casualty and business interruption insurance
pursuant to standard lenders' payable endorsements, and as additional
insured under all policies of liability insurance, required by this
Agreement; and
(vi) such consents, estoppels, subordination agreements,
waivers and other documents and instruments executed by landlords,
tenants, mortgagees and other Persons party to material contracts
relating to any Collateral as to which the Administrative Agent shall
be granted a Lien, for the benefit of the Agents and the Lenders, as
requested by the Administrative Agent.
(e) LEGAL OPINIONS.
Opinions of ▇▇▇▇▇▇ ▇▇▇▇▇▇, general counsel to the Company and each
other Loan Party, and ▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLC, special counsel to the Company and
each other Loan Party, each addressed to the Agents and the Lenders,
substantially in the form of EXHIBIT G;
(f) PAYMENT OF FEES.
The Company shall have paid all accrued and unpaid fees, costs and
expenses to the extent then due and payable on the Closing Date, together with
Attorney
-51-
Costs of the Administrative Agent to the extent invoiced prior to or on
the Closing Date, together with such additional amounts of Attorney Costs as
shall constitute the reasonable estimate of Attorney Costs of the Administrative
Agent incurred or to be incurred through the closing proceedings, including any
such costs, fees and expenses arising under or referenced in the Fee Letter or
otherwise under Sections 2.10, 3.1 and 10.4; PROVIDED, that such estimate shall
not thereafter preclude final settling of accounts between the Company and the
Administrative Agent;
(g) CLOSING CERTIFICATE.
A certificate signed by a Responsible Officer, dated as of the Closing
Date, stating that:
(i) the representations and warranties contained in
Article V are true and correct in all material respects on and as of
such date, as though made on and as of such date;
(ii) no Default or Event of Default exists or would
result from the initial Borrowing; and
(iii) there has occurred since December 31, 2001, no event
or circumstance that has resulted or could reasonably be expected to
result in a Material Adverse Effect;
(h) FINANCIAL STATEMENTS.
Copies of the financial statements of the Company and its Subsidiaries
referred to in Section 5.11;
(i) CONSENTS.
All consents and approvals required to be obtained from any
Governmental Authority or other Person to consummate the transactions
contemplated hereby;
(j) DUE DILIGENCE.
Evidence of completion to the satisfaction of each Agent of such
investigations, reviews and audits with respect to the Company as any Agent or
any Lender may deem appropriate;
(k) FEE LETTER.
The Fee Letter executed by the Company;
(l) CLOSING DATE BORROWING CERTIFICATE.
A certificate signed by a Responsible Officer showing the calculation
of Closing Date Revolving Loan Availability, taking into account the making of
the initial
-52-
Loans and the issuance of the initial letters of credit hereunder on the Closing
Date, and the payment of all transaction fees and expenses required to be paid
on the Closing Date;
(m) FIELD EXAMINATION.
A completed field examination by the Administrative Agent of the
Properties and books and records of the Company and its Subsidiaries, with
results acceptable to the Lenders; and
(n) RELEASE OF CERTAIN COLLATERAL.
A written release by the Administrative Agent of its rights under
certain guaranties provided by certain shareholders of the Company and securing
a portion of the Obligations of the Company under the Original Credit Agreement
and all Collateral for such guaranties, together with all original letters of
credit delivered to the Administrative Agent to support such guaranties.
(o) OTHER DOCUMENTS.
Such other approvals, opinions, documents or materials as any Agent or
any Lender may reasonably request.
4.2. CONDITIONS TO ALL BORROWINGS AND ISSUANCE OF LETTERS OF
CREDIT.
The obligation of each Lender to make any Loan to be made by it
hereunder (including its initial Loan), to continue or convert any Loan pursuant
to Section 2.4 and to participate in any Letter of Credit as provided in Section
2.15, is subject to the satisfaction of the following conditions precedent on
the relevant borrowing, continuation or conversion or issuance date:
(a) NOTICE OF BORROWING OR CONTINUATION/CONVERSION.
The Administrative Agent shall have received (with, in the case of the
initial Loan only, a copy for each Lender) a Notice of Borrowing or a Notice of
Continuation/Conversion, as applicable;
(b) CONTINUATION OF REPRESENTATIONS AND WARRANTIES.
The representations and warranties made by the Company contained in
Article V shall be true and correct in all material respects on and as of such
borrowing, continuation or conversion or issuance date with the same effect as
if made on and as of such borrowing, continuation or conversion or issuance date
(except to the extent such representations and warranties expressly refer to an
earlier date, in which case they shall be true and correct as of such earlier
date); and
-53-
(c) NO EXISTING DEFAULT.
No Default or Event of Default shall exist or shall result from such
Borrowing or continuation or conversion or issuance.
(d) OVERADVANCE.
No Overadvance shall exist or shall result from such Borrowing or
continuation or conversion or issuance.
Each Notice of Borrowing and Notice of Continuation/Conversion submitted by the
Company hereunder shall constitute a representation and warranty by the Company
hereunder, as of the date of each such notice or application and as of the date
of each Borrowing, continuation or conversion or issuance, as applicable, that
the conditions in Section 4.2 are satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to each Agent and each Lender
that:
5.1. CORPORATE EXISTENCE AND POWER.
The Company and each other Loan Party:
(a) is a corporation or limited partnership duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation;
(b) has the power and authority and all governmental licenses,
authorizations, consents and approvals (i) to own its assets and carry on its
business and (ii) to execute, deliver, and perform its obligations under the
Loan Documents;
(c) conducts business in its own name and does not use any
tradenames, tradestyles or doing business forms, except as provided on SCHEDULE
5.1 or as updated from time to time by notice to the Administrative Agent;
(d) is duly qualified as a foreign corporation or limited
partnership, and licensed and in good standing, under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification or license, as set forth on SCHEDULE
5.1; and
(e) is in compliance with all Requirements of Law, except as
provided on SCHEDULE 5.1;
except, in each case referred to in clause (c), clause (d) or clause (e), to the
extent that the failure to do so could not reasonably be expected to have a
Material Adverse Effect.
-54-
5.2. CORPORATE AUTHORIZATION; NO CONTRAVENTION.
The execution, delivery and performance by each Loan Party of any Loan
Document to which such Person is party, have been duly authorized by all
necessary corporate or limited partnership action, as appropriate, and do not
and will not:
(a) contravene the terms of any of that Person's Organization
Documents;
(b) conflict with or result in any breach or contravention of, or
the creation of any Lien under, any document evidencing any Contractual
Obligation to which such Person is a party; or
(c) violate any Requirement of Law.
5.3. GOVERNMENTAL AUTHORIZATION.
No approval, consent, exemption, authorization, or other action by, or
notice to, or filing with, any Governmental Authority (except for those already
obtained, recordings or filings in connection with the Liens granted to the
Administrative Agent, for the benefit of the Agents and the Lenders, under the
Collateral Documents and those contemplated by the terms and provisions of the
Loan Documents) is necessary or required in connection with the execution,
delivery, performance or enforcement of this Agreement or any other Loan
Document.
5.4. BINDING EFFECT.
Each Loan Document to which a Loan Party is a party constitutes the
legal, valid and binding obligations of such Person, enforceable against such
Person in accordance with its respective terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors' rights generally or by equitable principles relating
to enforceability.
5.5. LITIGATION.
Except as specifically disclosed in SCHEDULE 5.5, there are no
actions, suits, proceedings, claims or disputes pending, or to the best
knowledge of the Company, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, against any Loan Party or any
Properties of any Loan Party which:
(a) purport to affect or pertain to this Agreement or any other
Loan Document, or any of the transactions contemplated hereby or thereby; or
(b) if determined adversely to a Loan Party, could reasonably be
expected to have a Material Adverse Effect.
No injunction, writ, temporary restraining order or any order of any nature has
been issued by any court or other Governmental Authority purporting to enjoin or
restrain the
-55-
execution, delivery or performance of this Agreement or any other Loan Document,
or directing that the transactions provided for herein or therein not be
consummated as herein or therein provided.
5.6. NO DEFAULT.
No Default or Event of Default exists or would result from the
incurring of any Obligations by the Company or the grant or perfection of the
Liens on the Collateral under the Collateral Documents. No Loan Party is in
default under or with respect to any Contractual Obligation in any respect
which, individually or together with all such defaults, could reasonably be
expected to have a Material Adverse Effect or that would, if such default had
occurred after the Closing Date, create an Event of Default under subsection
8.1(e).
5.7. INTENTIONALLY OMITTED.
5.8. USE OF PROCEEDS; MARGIN REGULATIONS.
The proceeds of the Loans are intended to be and shall be used solely
for the purposes set forth in and permitted by Section 6.11, and are intended to
be and shall be used in compliance with Section 7.7. Neither the Company nor any
other Loan Party is generally engaged in the business of purchasing or selling
Margin Stock or extending credit for the purpose of purchasing or carrying
Margin Stock.
5.9. TITLE TO PROPERTIES.
Each Loan Party has good record and marketable title in fee simple to,
or valid leasehold interests in, all real Property necessary or used in the
ordinary conduct of its businesses, except for such defects in title as could
not, individually or in the aggregate, have a Material Adverse Effect. No
Property of any Loan Party is subject to any Liens, other than Permitted Liens.
5.10. TAXES.
Each Loan Party has filed all Federal and other material tax returns
and reports required to be filed, and has paid all Federal and other material
taxes, assessments, fees and other governmental charges levied or imposed upon
it or its Properties, income or assets otherwise due and payable, except (i)
where the failure to so file or pay could not reasonably be expected to have a
Material Adverse Effect and (ii) those taxes, assessments, fees and other
charges which are being contested in good faith by appropriate proceedings and
for which adequate reserves have been provided in accordance with GAAP and no
Notice of Lien has been filed or recorded. There is no proposed tax assessment
against a Loan Party which, if made, could reasonably be expected to have a
Material Adverse Effect.
-56-
5.11. FINANCIAL CONDITION.
The Company has furnished to the Administrative Agent and the Lenders
the following:
(a) The audited consolidated financial statements of financial
condition of the Company and its Subsidiaries dated December 31, 2001, and the
related consolidated statements of income, shareholders' equity and cash flows
for the fiscal year ended on that date; and
(b) the unaudited consolidated balance sheet as of March 31, 2002
and the related unaudited consolidated statements of income, shareholders'
equity and cash flows for the three-month period ended on March 31, 2002.
The foregoing financial statements:
(i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise
expressly noted therein;
(ii) fairly present the financial condition of the
Company and its Subsidiaries as of the date thereof and results of
operations for the period covered thereby (subject to purchase
accounting adjustments and, in the case of the March 31, 2002
financial statements, to normal year-end adjustments); and
(iii) except as specifically disclosed in SCHEDULE 5.11,
reflect all material indebtedness and other liabilities, including, to
the best of the Company's knowledge, all material contingent
liabilities of the Company and its consolidated Subsidiaries as of the
date thereof, including liabilities for taxes, material commitments
and Contingent Obligations.
Since December 31, 2001, there has been no Material Adverse Effect.
5.12. ENVIRONMENTAL MATTERS.
(a) Except as specifically disclosed in SCHEDULE 5.12, the
operations of each Loan Party comply in all respects with all Environmental
Laws, except such non-compliance which could not reasonably be expected to have
a Material Adverse Effect.
(b) Except as specifically disclosed in SCHEDULE 5.12, each Loan
Party has obtained all licenses, permits, authorizations and registrations
required under any Environmental Law ("Environmental Permits") and necessary for
its ordinary course operations, all such Environmental Permits are in good
standing, and each Loan Party is in compliance with the terms and conditions of
such Environmental Permits, except to the extent that the failure to obtain,
maintain in good standing or comply with any such Environmental Permits could
not reasonably be expected to have a Material Adverse Effect.
-57-
(c) Except as specifically disclosed in SCHEDULE 5.12, or as
updated from time to time by notice to the Administrative Agent, no Loan Party
or any Property or operations of any Loan Party, is subject to any outstanding
written order from or agreement with any Governmental Authority, or subject to
any judicial or docketed administrative proceeding, respecting any Environmental
Law, Environmental Claim or Hazardous Material.
(d) Except as specifically disclosed in SCHEDULE 5.12, (i) there
are no Hazardous Materials or other conditions or circumstances existing with
respect to any Property, or arising from operations prior to the Closing Date,
of any Loan Party that could give rise to Environmental Claims that could
reasonably be expected to have a Material Adverse Effect, and (ii) no Loan Party
has any underground storage tanks (x) that are not properly registered or
permitted under applicable Environmental Laws, or (y) that are leaking or
disposing of Hazardous Materials off-site, to the extent that the same could
reasonably be expected to have a Material Adverse Effect.
5.13. REGULATED ENTITIES.
Neither any Loan Party nor any Person controlling a Loan Party, is (a)
an "Investment Company" within the meaning of the Investment Company Act of
1940; or (b) subject to regulation under the Public Utility Holding Company Act
of 1935, the Federal Power Act, the Interstate Commerce Act, any state public
utilities code, or any other Federal or state statute or regulation limiting its
ability to incur Indebtedness.
5.14. NO BURDENSOME RESTRICTIONS.
No Loan Party is a party to or bound by any Contractual Obligation, or
subject to any charter, corporate or partnership restriction, or any Requirement
of Law, which could reasonably be expected to have a Material Adverse Effect.
5.15. SOLVENCY.
Each Substantial Loan Party is Solvent.
5.16. LABOR RELATIONS.
There are no strikes, lockouts or other labor disputes against any
Loan Party, or, to the best of the Company's knowledge, threatened against or
affecting any Loan Party, and no significant unfair labor practice complaint is
pending against any Loan Party or, to the best knowledge of the Company,
threatened against any Loan Party before any Governmental Authority. Except as
disclosed on SCHEDULE 5.16, as of the Closing Date no Loan Party (a) has any
employment contracts with any of its employees; or (b) is a party to any
collective bargaining agreement.
5.17. COPYRIGHTS, PATENTS, TRADEMARKS AND LICENSES, ETC.
Each Loan Party owns or is licensed or otherwise has the right to use
all of the patents, trademarks, service marks, trade names, copyrights,
contractual franchises,
-58-
authorizations and other rights that are reasonably necessary for the operation
of its businesses, without conflict with the rights of any other Person, all of
which are set forth on SCHEDULE 5.17. To the best knowledge of the Company,
except as specifically disclosed on SCHEDULE 5.17, no slogan or other
advertising device, product, process, method, substance, part or other material
now employed, or now contemplated to be employed, by any Loan Party infringes
upon any rights held by any other Person; except as specifically disclosed on
SCHEDULE 5.5, no claim or litigation regarding any of the foregoing is pending
or threatened, and no patent, invention, device, application, principle or any
statute, law, rule, regulation, standard or code relating to intellectual
property is pending or, to the knowledge of the Company, proposed, which, in
either case, could reasonably be expected to have a Material Adverse Effect.
5.18. SUBSIDIARIES; CAPITALIZATION..
As of the Closing Date, no Loan Party has any Subsidiaries other than
those specifically disclosed in part (a) of SCHEDULE 5.18 hereto and no Loan
Party has any equity investments or partnership or joint venture interests in
any other corporation, partnership or other entity other than those specifically
disclosed in part (b) of SCHEDULE 5.18. The authorized capital stock of each
Loan Party as of the Closing Date is as set forth on SCHEDULE 5.18. All issued
and outstanding shares of capital stock of each Loan Party are duly authorized
and validly issued, fully paid, nonassessable, free and clear of all Liens other
than Permitted Liens, and such shares were issued in compliance in all material
respects with Requirements of Law concerning the issuance of securities. The
capital stock of each Loan Party is owned as of the Closing Date by the
stockholders in the amounts set forth on SCHEDULE 5.18. As of the Closing Date,
no shares of the capital stock of any Loan Party, other than those described
above, are issued and outstanding. Except as set forth on SCHEDULE 5.18, as of
the Closing Date, there are no preemptive or other outstanding rights, options,
warrants, conversion rights or similar agreements or understandings for the
purchase or acquisition from any Loan Party of any shares of capital stock or
other securities of any such Person.
5.19. BROKER'S; TRANSACTION FEES.
No Loan Party has any obligation to any Person in respect of any
finder's, broker's or investment banker's fee in connection with the
transactions contemplated hereby.
5.20. INSURANCE.
SCHEDULE 5.20 is a complete and accurate summary as of the date hereof
of the property and casualty insurance program carried by the Company and each
other Loan Party on the date hereof. SCHEDULE 5.20 includes, as of the Closing
Date, the insurer's(s') name(s), policy number(s), expiration date(s), amount(s)
of coverage, type(s) of coverage, the annual premium(s), deductibles and
self-insured retention and describes any retrospective rating plan, fronting
arrangement or any other self-insurance or risk
-59-
assumption agreed to by the Company or any other Loan Party or imposed upon the
Company and each other Loan Party by any such insurer.
5.21. BUSINESS AND COLLATERAL LOCATIONS.
SCHEDULE 5.21 sets forth (a) the chief executive office and principal
place of business of each Loan Party as of the Closing Date or during the prior
12 months, (b) each location at which any Property of a Loan Party is located as
of the Closing Date or during the prior 12 months, and (c) each other place of
business of a Loan Party as of the Closing Date. In addition, SCHEDULE 5.21 sets
forth the record owner of such location as of the Closing Date.
5.22. FULL DISCLOSURE.
None of the representations or warranties made by any Loan Party in
the Loan Documents as of the date such representations and warranties are made
or deemed made, and none of the statements contained in each exhibit, report,
statement or certificate furnished by or on behalf of any Loan Party in
connection with the Loan Documents (including the offering and disclosure
materials delivered by or on behalf of any Loan Party to the Administrative
Agent or the Lenders prior to the Closing Date), contains any untrue statement
of a material fact or omits any material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they are made, not misleading as of the time when made or delivered.
5.23. ERISA MATTERS.
Each Pension Plan complies, and has been administered in compliance,
in all material respects, with all applicable statutes and governmental rules
and regulations; no Reportable Event has occurred and is continuing with respect
to any Pension Plan; neither the Company nor any ERISA Affiliate has withdrawn
from any Multiemployer Plan in a "complete withdrawal" or a "partial withdrawal"
as defined in Section 4203 or 4205 of ERISA, respectively, with respect to which
the Company or any ERISA Affiliate has any unsatisfied liability; no steps have
been instituted to terminate any Pension Plan except for the 401(k) plans listed
on SCHEDULE 5.23(a), none of which has any unfunded liability; no contribution
failure has occurred with respect to any Pension Plan sufficient to give rise to
a Lien under Section 302(f) of ERISA; no condition exists or event or
transaction has occurred in connection with any Pension Plan or Multiemployer
Plan that is reasonably likely to have a Material Adverse Effect; and neither
the Company nor any ERISA Affiliate is a "contributing sponsor" as defined in
Section 4001(a)(13) of ERISA of a "single-employer plan" as defined in Section
4001(a)(15) of ERISA that has two or more contributing sponsors at least two of
whom are not under common control. Except as listed in SCHEDULE 5.23(b), neither
the Company nor any ERISA Affiliate, to the extent there is joint and several
liability with the Company to pay such benefits, has any liability to pay any
welfare benefits under any employee welfare benefit plan within the meaning of
Section 3(l) of ERISA to former employees thereof or to current employees with
-60-
respect to claims incurred after the termination of their employment other than
as required by Section 4980B of the Code or Part 6 of Subtitle B of Title 1 of
ERISA.
ARTICLE VI
AFFIRMATIVE COVENANTS
The Company covenants and agrees that, so long as any Lender shall
have any Revolving Commitment hereunder, or any Loan or other Obligation shall
remain unpaid or unsatisfied, unless the Majority Lenders waive compliance in
writing:
6.1. FINANCIAL STATEMENTS.
The Company shall deliver to the Administrative Agent in form and
detail satisfactory to the Administrative Agent and the Majority Lenders, with
sufficient copies for each Lender:
(a) as soon as available, but not later than 90 days after the end
of each fiscal year, a copy of the audited consolidated balance sheet of the
Company as at the end of such year and the related consolidated statements of
income or operations, shareholders' equity and cash flows for such fiscal year,
setting forth in each case in comparative form the figures for the previous
fiscal year, and accompanied by the opinion of Deloitte & Touche LLP or another
nationally-recognized independent public accounting firm which report shall
state that such consolidated financial statements present fairly the financial
position for the periods indicated in conformity with GAAP applied on a basis
consistent with prior years, except for (i) changes in GAAP resulting from the
application of financial accounting standard 142 related to goodwill and (ii)
changes in GAAP approved by the Administrative Agent. Such opinion shall not be
qualified or limited, except for a qualification in connection with the
refinancing or the repayment of the Obligations;
(b) Intentionally omitted;
(c) as soon as available, but not later than 45 days after the end
of each fiscal quarter of each year (or 90 days, in the case of the last fiscal
quarter of each fiscal year), a copy of the unaudited consolidated balance sheet
of the Company and its consolidated Subsidiaries as of the end of such quarter
and the related consolidated statements of income, shareholders' equity and cash
flows for the period commencing on the first day and ending on the last day of
such quarter, and certified by an appropriate Responsible Officer as being
complete and correct and fairly presenting, in accordance with GAAP, the
financial position and the results of operations of the Company and its
Subsidiaries (subject to normal year-end adjustments and the omission of
footnotes);
(d) as soon as available, but not later than 35 days after the end
of each month (or 45 days in the case of the last month of each fiscal quarter),
a copy of the Company's internal management report, which shall include the
unaudited consolidated balance sheet of the Company and its consolidated
Subsidiaries as of the end of such month and the related
-61-
consolidated statement of income and cash flows for the period commencing on the
first day and ending on the last day of such month;
(e) as soon as available, but not later than 60 days after the
last day of each fiscal year, an annual budget for the Company for the
succeeding fiscal year, prepared on a consolidated and consolidating basis and
in conformity with the financial statements furnished under the preceding
clauses (a) and (b), signed by a Responsible Officer and consisting of at least
a balance sheet, an income statement and a cash flow statement, each calculated
on a month by month basis;
(f) within 10 days after receipt thereof by the Company, copies of
any management letters or comparable letters delivered to the Company by any
accountant retained by the Company; and
(g) prior to the expiration of the Company's insurance coverage,
the Company shall provide new insurance certificates satisfying the requirements
of SECTION 6.6.
6.2. CERTIFICATES; OTHER INFORMATION.
The Company shall furnish to the Administrative Agent, with sufficient
copies for each Lender:
(a) concurrently with the delivery of the financial statements
referred to in subsection 6.1(a) above, a certificate of the independent
certified public accountants reporting on such financial statements (i) stating
that in making the examination necessary therefor no knowledge was obtained of
any Default or Event of Default, except as specified in such certificate and
(ii) which does not limit the ability of the Agents and the Lenders to rely on
such financial statements;
(b) concurrently with the delivery of the financial statements
referred to in subsection 6.1(c), (i) a Compliance Certificate of a Responsible
Officer (A) stating that the Company, during such period, has observed and
performed all of its covenants and other agreements, and satisfied every
condition contained in this Agreement to be observed, performed or satisfied by
it, and that such officer has obtained no knowledge of any Default or Event of
Default except as specified (by applicable subsection reference) in such
certificate, and (B) showing in detail the calculations supporting such
statement in respect of Sections 7.5, 7.13, 7.14, 7.15 and 7.16; and (ii) a
Pricing Change Certificate of a Responsible Officer;
(c) promptly after the same are sent, copies of all financial
statements and reports which the Company sends to its public shareholders; and
promptly after the same are filed, copies of all financial statements and
regular, periodical or special reports which the Company may make to, or file
with, the SEC;
(d) promptly, such additional business, financial, corporate or
partnership affairs and other information as the Administrative Agent, at the
request of any Lender, may from time to time reasonably request;
-62-
(e) within 35 days after the end of each month (or 45 days in the
case of the last month of each fiscal quarter), a consolidated aging of all
Accounts Receivable as of the end of such month, in each case in form and
content reasonably acceptable to the Agent;
(f) within 35 days after the end of each month (or 45 days in the
case of the last month of each fiscal quarter), a consolidated Inventory report
as of the end of the month for all Inventory locations in form and content
reasonably acceptable to the Agent;
(g) within 35 days after the end of each month (or 45 days in the
case of the last month of each fiscal quarter), a consolidated Borrowing Base
Certificate executed by a Responsible Officer; and
(h) within 45 days after the end of each fiscal quarter (or 90
days in the case of the last quarter of each fiscal year), a schedule of Capital
Expenditures listing (i) total Capital Expenditures for the fiscal year to date,
(ii) in detail, all items included in Capital Expenditures for such period and
not constituting Maintenance Capital Expenditures and (iii) the total amount of
Capital Expenditures for such period that are Maintenance Capital Expenditures.
6.3. NOTICES.
The Company shall promptly notify the Administrative Agent:
(a) of the occurrence of any Default or Event of Default;
(b) of (i) any breach or non-performance of, or any default under,
any Contractual Obligation of any Loan Party which could result in a Material
Adverse Effect; and (ii) any dispute, litigation, investigation, proceeding or
suspension which may exist at any time between any Loan Party and any
Governmental Authority which involves amounts in excess of $100,000;
(c) of the commencement of, or any material development in, any
litigation or proceeding affecting any Loan Party (i) in which the amount of
damages claimed is Two Million Five Hundred Thousand Dollars ($2,500,000) or
more, (ii) in which injunctive or similar relief is sought and which, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect, or (iii) in which the relief sought is an injunction or other stay of
the performance of this Agreement or any Loan Document;
(d) upon, but in no event later than 10 days after, any
Responsible Officer becoming aware of (i) any and all enforcement, cleanup,
removal or other governmental or regulatory actions instituted, completed or
threatened against any Loan Party or any Properties of any Loan Party pursuant
to any applicable Environmental Laws which involves amounts in excess of
$100,000, (ii) any environmental or similar condition on any real property
adjoining or in the vicinity of the property of any Loan Party that could
reasonably be anticipated to cause such property or any part thereof to be
subject to any restrictions on the ownership, occupancy, transferability or use
of such property under any Environmental Laws, and (iii) all other Environmental
Claims involving in excess of Two Million Five Hundred Thousand Dollars
($2,500,000);
-63-
(e) of any other litigation or proceeding affecting any Loan Party
which the Company would be required to report to the SEC pursuant to the
Exchange Act, within four days after reporting the same to the SEC;
(f) any Material Adverse Effect subsequent to the date of the most
recent financial statements of the Company delivered to the Lenders pursuant to
subsections 6.1(a), 6.1(c) or 4.1(h);
(g) of any material change in accounting policies or financial
reporting practices by any Loan Party;
(h) of any labor controversy resulting in or threatening to result
in any strike, work stoppage, boycott, shutdown or other labor disruption
against or involving any Loan Party;
(i) any change or proposed change in any of the information set
forth on SCHEDULE 5.21, including but not limited to (i) any change in the
location where any Property of a Loan Party is kept, (ii) the identity of any
new bailee, processor, warehouseman, consignee or other Person in possession or
control of any Property of a Loan Party, (iii) any proposed change in the
location of the Company's or any other Loan Party's chief executive office or
chief place of business, and (iv) any proposed opening, closing or other change
in the list of offices and other places of business of any Loan Party;
(j) any change in the name of any Loan Party; and
(k) the occurrence of a Reportable Event with respect to any
Pension Plan; the filing of a notice of intent to terminate a Pension Plan by
the Company or any ERISA Affiliate; the institution of proceedings to terminate
a Pension Plan by the PBGC or any other Person; the withdrawal in a "complete
withdrawal" or a "partial withdrawal" as defined in Sections 4203 and 4205,
respectively, of ERISA by the Company or any ERISA Affiliate from any
Multiemployer Plan; the failure of the Company or any ERISA Affiliate to make a
required contribution to any Pension Plan, including but not limited to any
failure to pay an amount sufficient to give rise to a Lien under Section 302(f)
of ERISA; the taking of any action with respect to a Pension Plan which could
result in the requirement that the Company or any ERISA Affiliate furnish a bond
or other security to the PBGC; the occurrence of any other event with respect to
any Pension Plan which could result in the incurrence by the Company or any
ERISA Affiliate of any material liability, fine or penalty; or the establishment
of a new plan subject to ERISA or an amendment to any existing plan which will
result in a material increase in contributions or benefits under such plan or
the incurrence of any material increase in the liability of the Company (or an
ERISA Affiliate) with respect to any "employee welfare benefit plan" as defined
in Section 3(l) of ERISA which covers former employees thereof or current
employees and their beneficiaries with respect to claims incurred after the
termination of their employment.
Each notice pursuant to this Section shall be accompanied by a written
statement by a Responsible Officer of the Company setting forth details of the
occurrence
-64-
referred to therein, and stating the action the Company proposes to take with
respect thereto (including the period during which such action will be taken).
Each notice under subsection 6.3(a) shall describe with particularity any and
all clauses or provisions of this Agreement or other Loan Document that have
been breached or violated.
6.4. PRESERVATION OF CORPORATE EXISTENCE, ETC.
The Company shall, and shall cause each of its Subsidiaries to:
(a) Except as otherwise permitted under Section 7.3, preserve and
maintain in full force and effect its corporate or partnership existence and
good standing under the laws of its state or jurisdiction of incorporation or
formation, as applicable; provided, that the Company may permit or cause the
liquidation or sale of any Subsidiary that is not a Material Loan Party;
(b) preserve and maintain in full force and effect all rights,
privileges, qualifications, permits, licenses and franchises necessary or
desirable in the normal conduct of its business except in connection with
transactions permitted by Section 7.3 and sales of assets permitted by Section
7.2; provided, that the Company may permit or cause the liquidation or sale of
any Subsidiary that is not a Material Loan Party;
(c) use its reasonable efforts, in the Ordinary Course of
Business, to preserve its business organization and preserve the goodwill and
business of the customers, suppliers and others having material business
relations with it; and
(d) preserve or renew all of its registered trademarks, trade
names and service marks, the non-preservation of which could reasonably be
expected to have a Material Adverse Effect.
6.5. MAINTENANCE OF PROPERTY.
The Company shall maintain, and shall cause each of its Subsidiaries
to maintain, and preserve all its Property which is used or useful in its
business in good working order and condition, ordinary wear and tear excepted
and make all necessary repairs thereto and renewals and replacements thereof
except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect or as permitted by Section 7.2, Section 6.4(a) or
Section 6.4(b).
6.6. INSURANCE.
The Company shall maintain, and shall cause each of its Subsidiaries
to maintain, with financially sound and reputable independent insurers,
insurance with respect to its Properties and business against loss or damage of
the kinds customarily insured against by Persons engaged in the same or similar
business, of such types and in such amounts as are customarily carried under
similar circumstances by such other Persons and as are reasonably acceptable to
the Administrative Agent, including workers' compensation insurance, public
liability and property insurance. All property and
-65-
business interruption insurance maintained by the Company shall name the
Administrative Agent as loss payee, as its interests may appear, for the benefit
of the Agents and the Lenders, and all liability insurance shall name the
Administrative Agent as additional insured, as its interests may appear. All
such insurance policies and loss payable clauses shall provide that they may not
be cancelled, amended or terminated unless the Administrative Agent is given at
least the same number of days' notice that the insurance company which issued
such policies is required to give the Company or any Subsidiary, but in no event
less than 30 day's prior written notice. Proceeds of such insurance for all
losses shall be paid directly to the Administrative Agent, for the benefit of
the Agents and the Lenders and applied to the Obligations as provided in Section
2.7; PROVIDED, that if no Default or Event of Default has occurred and is
continuing, (A) proceeds of insurance for losses (other than relating to
Accounts Receivable or Inventory, which shall be applied in accordance with
Section 2.7), equal to or less than Ten Million Dollars ($10,000,000) per
occurrence shall be remitted by the Administrative Agent to the Company to
repair, replace, restore or substitute the damaged Property, and (B) proceeds of
insurance for losses in excess of Ten Million Dollars ($10,000,000) per
occurrence shall be applied to the Obligations as provided in Section 2.7,
except that if the Administrative Agent has received written evidence reasonably
satisfactory to the Administrative Agent to the effect that (i) such proceeds
are necessary and in an amount (when added to other amounts available to the
Company) sufficient to pay all costs of repair, replacement, restoration or
substitution of such damaged Property to an economical unit of substantially the
same character and value as such Property was prior to such damage, (ii) the
damaged Property can be repaired, replaced, restored or substituted prior to the
Term Maturity Date, and (iii) the failure to be able to use such damaged
Property during the period during which such damaged Property is to be repaired,
replaced, restored or substituted could not reasonably be expected to have a
Material Adverse Effect, such proceeds shall be held by the Administrative Agent
in a Collateral Account to be disbursed from time to time to pay the cost of
repair, replacement, restoration or substitution either, at the Administrative
Agent's option, to the Company or directly to contractors, subcontractors, and
material suppliers and subject to such conditions to disbursement as the
Administrative Agent may impose to assure that the work is fully completed in a
good and workmanlike manner and paid for and that no Liens (other then Permitted
Liens) arise by reason thereof. Notwithstanding anything contained herein to the
contrary, if an Event of Default arises after the occurrence of an Event of
Loss, the amount of proceeds with respect to such Event of Loss held by the
Administrative Agent in a Collateral Account shall, at the request of the
Majority Lenders, be applied by the Administrative Agent to the Obligations as
provided herein and in the other Loan Documents. Upon request of the
Administrative Agent or any Lender, the Company shall furnish to the
Administrative Agent, with sufficient copies for each Lender, at reasonable
intervals (but not more than once per calendar year) a certificate of a
Responsible Officer of the Company (and, if requested by the Administrative
Agent, any insurance broker of the Company) setting forth the nature and extent
of all insurance maintained by the Company and its Subsidiaries in accordance
with this Section 6.6 or any Collateral Documents (and which, in the case of a
certificate of a broker, was placed through such broker).
-66-
Unless the Company provides the Administrative Agent with evidence of
the insurance coverage required by this Agreement, the Administrative Agent may,
with notice to the Company, purchase insurance at the Company's expense to
protect the Administrative Agent's and the Lenders' interests in the Collateral.
This insurance may, but need not, protect the interests of the Company and its
Subsidiaries. The coverage that the Administrative Agent purchases may not pay
any claim that the Company or any of its Subsidiaries may make or any claim that
is made against the Company or any of its Subsidiaries in connection with the
Collateral. The Company may later cancel any insurance purchased by the
Administrative Agent, but only after providing the Administrative Agent with
evidence that the Company has obtained insurance as required by this Agreement.
If the Administrative Agent purchases insurance for the Collateral, the Company
will be responsible for the costs of that insurance, including interest and any
other charges that may be imposed in connection with the placement of the
insurance, until the effective date of the cancellation or expiration of the
insurance. The costs of the insurance may be added to the Revolving Loans. The
costs of the insurance may be more than the cost of insurance the Company and
its Subsidiaries may be able to obtain on their own.
6.7. PAYMENT OF OBLIGATIONS.
The Company shall, and shall cause its Subsidiaries to, pay and
discharge as the same shall become due and payable, all their respective
Indebtedness, obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets, unless the same are being contested
in good faith by appropriate proceedings and adequate reserves in accordance
with GAAP are being maintained by the Company or such Subsidiary;
(b) all lawful claims which, if unpaid, would by law become a Lien
(other than a Permitted Lien) upon its Property; and
(c) all Indebtedness, as and when due and payable, unless the same
is being contested in good faith by appropriate proceedings and adequate
reserves in accordance with GAAP are being maintained by the Company or such
Subsidiary, and subject to any subordination provisions contained in any
instrument or agreement evidencing such Indebtedness.
6.8. COMPLIANCE WITH LAWS.
The Company shall comply, and shall cause each of its Subsidiaries to
comply, with all Requirements of Law of any Governmental Authority having
jurisdiction over it or its business (including the Federal Fair Labor Standards
Act), except to the extent the failure to do so could not reasonably be expected
to have a Material Adverse Effect.
-67-
6.9. INSPECTION OF PROPERTY AND BOOKS AND RECORDS.
The Company shall maintain and shall cause each of its Subsidiaries to
maintain proper books of record and account, in which full, true and correct
entries in conformity with GAAP consistently applied shall be made of all
financial transactions and matters involving the assets and business of the
Company and such Subsidiaries. The Company shall permit, and shall cause each of
its Subsidiaries to permit, representatives and independent contractors of the
Administrative Agent or any Lender to visit and inspect any of their respective
Properties, to examine their respective corporate or partnership, financial and
operating records, and make copies thereof or abstracts therefrom, and to
discuss their respective affairs, finances and accounts with their respective
directors, officers, and independent public accountants (at the expense of the
Company with respect to all such inspections occurring during the existence of
an Event of Default and with respect to one inspection per calendar year if no
Event of Default is in existence) and at such reasonable times during normal
business hours and as often as may be reasonably desired, upon reasonable
advance notice to the Company; PROVIDED, HOWEVER, when an Event of Default
exists, the Administrative Agent or any Lender may do any of the foregoing at
the expense of the Company at any time during normal business hours and without
advance notice. The Administrative Agent and each Lender hereby agrees that in
the absence of an Event of Default, no Lender will perform any such visit or
inspection except in conjunction with a visit or inspection by the
Administrative Agent.
6.10. ENVIRONMENTAL LAWS.
(a) The Company shall, and shall cause each of its Subsidiaries
to, conduct its operations and keep and maintain its Property in compliance with
all Environmental Laws, except such non-compliance as could not reasonably be
expected to have a Material Adverse Effect.
(b) Upon the written request of the Administrative Agent or any
Lender, the Company shall submit and cause each of its Subsidiaries to submit,
to the Administrative Agent with sufficient copies for each Lender, at the
Company's sole cost and expense, at reasonable intervals, a report providing an
update of the status of any environmental, health or safety compliance, hazard
or liability issue identified in any notice or report required pursuant to
subsection 6.3(d), that could, individually or in the aggregate, result in
liability in excess of Two Million Five Hundred Thousand Dollars ($2,500,000).
6.11. USE OF PROCEEDS.
The Company shall use the proceeds of the Loans solely as follows: (a)
to be allocated to the Term Loan as set forth in subsection 2.1(a), (b) to
finance all or a portion of the purchase price for any Permitted Acquisition and
(c) for working capital and other general corporate or partnership purposes not
in contravention of any Requirement of Law.
-68-
6.12. SOLVENCY.
The Company shall at all times be, and shall cause each Substantial
Loan Party to be, Solvent.
6.13. SUBSIDIARIES.
The Company shall (a) promptly cause each of its Subsidiaries,
including without limitation any Subsidiary created or acquired in connection
with a Permitted Acquisition, to execute and deliver to the Administrative Agent
a guaranty of the Obligations, one or more security agreements whereby such
Subsidiary grants to the Administrative Agent, for the benefit of the Agents and
the Lenders, a Lien on substantially all of its Properties (other than real
Property) in order to secure such guaranty and such additional agreements,
instruments and documents (including without limitation UCC financing statements
and evidence of corporate or partnership authority) as the Administrative Agent
shall reasonably request in connection therewith and (b) execute and deliver, or
cause to be executed and delivered, to the Administrative Agent a pledge of the
Securities of each of its Subsidiaries, including without limitation any
Subsidiary created or acquired in connection with a Permitted Acquisition, in
each case in form and substance reasonably satisfactory to the Administrative
Agent.
6.14. FURTHER ASSURANCES.
(a) The Company shall ensure that all written information,
exhibits and reports furnished to the Agents or the Lenders do not and will not
contain any untrue statement of a material fact and do not and will not omit to
state any material fact or any fact necessary to make the statements contained
therein not misleading in light of the circumstances in which made, and will
promptly disclose to the Agents and the Lenders and correct any defect or error
that may be discovered therein or in any Loan Document or in the execution,
acknowledgment or recordation thereof.
(b) Promptly upon request by the Administrative Agent or the
Majority Lenders, the Company shall (and shall cause any of its Subsidiaries
to), at the Company's expense, execute, acknowledge, deliver, record, re-record,
file, re-file, register and re-register, any and all such further acts, deeds,
conveyances, security agreements, mortgages, assignments, estoppel certificates,
financing statements and continuations thereof, termination statements, notices
of assignment, transfers, certificates, assurances and other instruments the
Administrative Agent or such Lenders, as the case may be, may reasonably require
from time to time in order (i) to carry out more effectively the purposes of
this Agreement or any other Loan Document, (ii) to subject to the Liens created
by any of the Collateral Documents any of the Properties, rights or interests
covered by any of the Collateral Documents, (iii) to perfect, protect and
maintain the validity, effectiveness and priority of any of the Collateral
Documents and the Liens intended to be created thereby, and (iv) to better
assure, convey, grant, assign, transfer, preserve, protect and confirm to the
Administrative Agent and the Lenders the rights granted or now or hereafter
intended to be granted to the Administrative Agent or any Lender under any Loan
Document or under any other document executed in connection therewith.
-69-
6.15. INTEREST RATE PROTECTION.
Within 60 days following the Closing Date, the Company shall obtain
and thereafter maintain interest rate protection with one or more of the Lenders
in forms and on terms reasonably acceptable to Administrative Agent, for a
notional amount of not less than $10,000,000.
6.16. DEPOSITORY ACCOUNTS.
The Company shall maintain all of its principal depository, cash
management, operating and administrative accounts with one or more of the
current Lenders or any subsequent Lenders, to the extent that a Lender is able
to provide such accounts and services in a manner that is reasonably convenient
from the standpoint of the Company.
ARTICLE VII
NEGATIVE COVENANTS
The Company hereby covenants and agrees that, so long as any Lender
shall have any Revolving Commitment hereunder, or any Loan or other Obligation
shall remain unpaid or unsatisfied, unless the Majority Lenders waive compliance
in writing:
7.1. LIMITATION ON LIENS.
The Company shall not, and shall not suffer or permit any of its
Subsidiaries to, directly or indirectly, make, create, incur, assume or suffer
to exist any Lien upon or with respect to any part of its Property, whether now
owned or hereafter acquired, other than the following ("Permitted Liens"):
(a) any Lien (other than Liens on the Collateral) existing on the
Property of the Company or its Subsidiaries on the Closing Date and set forth in
SCHEDULE 7.1 securing Indebtedness outstanding on such date;
(b) any Lien created under any Loan Document;
(c) Liens for taxes, fees, assessments or other governmental
charges which are not delinquent or remain payable without penalty, or to the
extent that non-payment thereof is permitted by Section 6.7; PROVIDED, that no
Notice of Lien has been filed or recorded under the Code;
(d) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other similar Liens arising in the Ordinary Course
of Business or arising in connection with the repair, replacement, restoration
or substitution of such Property permitted under Sections 2.7 and 6.6 hereof, in
each case, which are not delinquent or remain payable without penalty or which
are being contested in good faith and by appropriate proceedings,
-70-
which proceedings have the effect of preventing the forfeiture or sale of the
Property subject thereto;
(e) Liens (other than any Lien imposed by ERISA) consisting of
pledges or deposits required in the Ordinary Course of Business in connection
with workers' compensation, unemployment insurance and other social security
legislation;
(f) Liens on the Property of the Company or any of its
Subsidiaries securing (i) the non-delinquent performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations, (ii)
contingent obligations on surety and appeal bonds, and (iii) other
non-delinquent obligations of a like nature; in each case, incurred in the
Ordinary Course of Business, provided all such Liens in the aggregate could not
(even if enforced) be reasonably expected to cause a Material Adverse Effect;
(g) Liens consisting of judgment or judicial attachment liens;
PROVIDED, that the existence of such Liens would not constitute an Event of
Default under Section 8.1(h);
(h) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the Ordinary Course of Business which, in the
aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the Property subject thereto or interfere
with the ordinary conduct of the businesses of the Company and its Subsidiaries;
(i) Purchase money security interests on, or Liens securing
Capital Lease Obligations with respect to, any Property (other than inventory)
acquired, leased or held by the Company or its Subsidiaries in the Ordinary
Course of Business, securing Indebtedness incurred or assumed for the purpose of
financing all or any part of the cost of acquiring or leasing such Property;
PROVIDED, that (i) any such Lien attaches to such Property concurrently with or
within 90 days after the acquisition or lease thereof, (ii) such Lien attaches
solely to the Property so acquired or leased in such transaction, (iii) the
principal amount of the debt secured thereby does not exceed 100% of the cost of
such Property, and (iv) the principal amount of the Indebtedness secured by any
and all such purchase money security interests and Capital Lease Obligations
shall not at any time exceed the Indebtedness permitted under subsection 7.5(d);
and
(j) Liens arising solely by virtue of any statutory or common law
provision relating to banker's liens, rights of set-off or similar rights and
remedies as to deposit accounts or other funds maintained with a creditor
depository institution; PROVIDED, that (i) such deposit account is not a
dedicated cash collateral account and is not subject to restrictions against
access by the Company in excess of those set forth by regulations promulgated by
the Federal Reserve Board, and (ii) such deposit account is not intended by the
Company or any of its Subsidiaries to provide collateral to the depository
institution.
-71-
7.2. DISPOSITION OF ASSETS.
The Company shall not, and shall not suffer or permit any of its
Subsidiaries to, directly or indirectly, sell, assign, lease, license, convey,
transfer or otherwise dispose of (whether in one or a series of transactions)
any Property (including accounts and notes receivable, with or without recourse)
or enter into any agreement to do any of the foregoing, except:
(a) dispositions of Inventory in the Ordinary Course of Business;
(b) the sale, transfer or other disposition of worn-out, damaged
or obsolete equipment, property, rights, privileges, qualifications, permits,
licenses or franchises, in each case that is no longer useful to the Company or
its Subsidiaries, so long as any proceeds thereof are used or applied as
provided in Section 2.7; and
(c) other dispositions permitted under this Agreement.
7.3. CONSOLIDATIONS AND MERGERS.
The Company shall not, and shall not suffer or permit any of its
Subsidiaries to, merge, consolidate with or into, or acquire (whether in one
transaction or in a series of transactions) substantially all of the assets of
any Person, except:
(a) in connection with a Permitted Acquisition; and
(b) any Subsidiary of the Company may merge with the Company
(PROVIDED, that the Company shall be the continuing or surviving corporation),
or with any one or more Subsidiaries of the Company, PROVIDED, that if any
transaction shall be between a Subsidiary and a Wholly-Owned Subsidiary, the
Wholly-Owned Subsidiary shall be the continuing or surviving corporation or
partnership, as applicable.
7.4. LOANS AND INVESTMENTS.
The Company shall not purchase or acquire, or suffer or permit any of
its Subsidiaries to purchase or acquire, or make any commitment for, any capital
stock, equity interest, or any obligations or other Securities of, or any
interest in, any Person, or make or commit to make any acquisitions of the
business of any Person, or make or commit to make any advance, loan, extension
of credit or capital contribution to or any other investment in, any Person
including any Affiliate of the Company, except for:
(a) acquisitions and purchases constituting a Permitted
Acquisition;
(b) investments in Cash Equivalents;
(c) extensions of credit in the nature of accounts receivable or
notes receivable arising from the sale or lease of goods or services in the
Ordinary Course of Business;
-72-
(d) advances to employees of the Company or any Subsidiary for
travel or other ordinary business expenses provided that the aggregate amount
outstanding at any one time for the Company and its Subsidiaries shall not
exceed Five Hundred Thousand Dollars ($500,000);
(e) investments outstanding on the date hereof and listed on
SCHEDULE 7.4;
(f) loans by the Company to its Subsidiaries in the Ordinary
Course of Business; and
(g) warrants for Securities received by the Company or any of its
Subsidiaries and not purchased for cash.
7.5. LIMITATION ON INDEBTEDNESS.
The Company shall not, and shall not suffer or permit any of its
Subsidiaries to, create, incur, assume, suffer to exist, or otherwise become or
remain directly or indirectly liable with respect to, any Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement;
(b) Indebtedness consisting of Contingent Obligations permitted
pursuant to Section 7.8;
(c) Indebtedness existing on the Closing Date and set forth in
SCHEDULE 7.5;
(d) Capital Lease Obligations and other Indebtedness secured by
Liens permitted by subsection 7.1(i) (other than Subordinated Debt), so long as
the aggregate amount of such Indebtedness incurred after the Closing Date and
outstanding at any time does not exceed Five Million Dollars ($5,000,000);
(e) Indebtedness incurred in connection with operating leases;
(f) intercompany Indebtedness permitted under subsection 7.4(f);
(g) Subordinated Debt;
(h) Indebtedness to insurance companies incurred in order to
permit the Company or one of its Subsidiaries to repay obligations owing by such
Loan Party to former employees of such Loan Party under the Company's 401K Plus
deferred compensation plan, so long as such Indebtedness is not greater than the
aggregate cash surrender value of insurance policies owned by the Company and
covering the lives of participants in the Company's 401K Plus deferred
compensation plan; and
(i) other Indebtedness for borrowed money incurred after the
Closing Date with an aggregate outstanding principal balance not at any time
exceeding Five Million Dollars ($5,000,000).
-73-
7.6. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not suffer or permit any of its
Subsidiaries to, enter into any transaction with any Affiliate of the Company or
of any such Subsidiary, except (a) those transactions listed on SCHEDULE 7.6,
(b) as expressly permitted by this Agreement, or (c) in the Ordinary Course of
Business and pursuant to the reasonable requirements of the business of the
Company or such Subsidiary, in each case described in clause (c), upon fair and
reasonable terms no less favorable to the Company or such Subsidiary than would
obtain in a comparable arm's-length transaction with a Person not an Affiliate
of the Company or such Subsidiary.
7.7. USE OF PROCEEDS.
The Company shall not and shall not suffer or permit any of its
Subsidiaries to use any portion of the Loan proceeds, directly or indirectly,
(i) to purchase or carry Margin Stock, (ii) to repay or otherwise refinance
indebtedness of the Company or others incurred to purchase or carry Margin
Stock, (iii) to extend credit for the purpose of purchasing or carrying any
Margin Stock, or (iv) to acquire any security in any transaction that is subject
to Section 13 or 14 of the Exchange Act.
7.8. CONTINGENT OBLIGATIONS.
The Company shall not, and shall not suffer or permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Contingent
Obligations except: (a) endorsements for collection or deposit in the Ordinary
Course of Business; (b) Contingent Obligations of the Company and its
Subsidiaries existing as of the Closing Date and listed in SCHEDULE 7.8; (c)
bonds in the nature of bid bonds, performance bonds, or bonds to cover extended
warranties, obtained in the ordinary cause of business; (d) guaranties by the
Company or any of its Subsidiaries of the operating lease obligations of any of
the Company's Subsidiaries; and (e) guaranties by the Company or any of its
Subsidiaries of Indebtedness permitted pursuant to Section 7.5.
7.9. JOINT VENTURES.
The Company shall not, and shall not suffer or permit any of its
Subsidiaries to enter into any Joint Venture, other than in the Ordinary Course
of Business.
7.10. UNCONDITIONAL PURCHASE OPTIONS.
Except as set forth on SCHEDULE 7.10, the Company shall not enter into
or be a party to, or permit any Subsidiary to enter into or be a party to, any
contract for the purchase of materials, supplies or other property or services,
if such contract requires that payment be made by it regardless of whether or
not delivery is ever made of such materials, supplies or other property or
services.
-74-
7.11. INTENTIONALLY OMITTED.
7.12. RESTRICTED PAYMENTS.
The Company shall not, and shall not suffer or permit any of its
Subsidiaries to, declare or make any dividend payment or other distribution of
assets, properties, cash, rights, obligations or securities on account of any
shares of any class of its Securities, or purchase, redeem or otherwise acquire
for value any shares of its Securities or any warrants, rights or options to
acquire such Securities, now or hereafter outstanding, or repay, prepay,
purchase or redeem any Subordinated Debt; except that the Company and any
Wholly-Owned Subsidiary of the Company may:
(a) declare and make dividend payments or other distributions
payable solely in its common stock;
(b) in the case of Wholly-Owned Subsidiaries only, declare and
make dividend payments or other distributions at any time to the Company or to
any other Wholly-Owned Subsidiary;
(c) purchase, redeem or otherwise acquire shares of its common
stock or warrants or options to acquire any such shares with the proceeds
received from the substantially concurrent issue of new shares of its common
stock;
(d) repay Subordinated Debt pursuant to the terms of any
subordination agreement or subordination provisions relating thereto; and
(e) so long as no Event of Default or Default is then existence or
would be caused thereby, redeem Securities issued to any employee of the Company
or any of its Subsidiaries, after termination of the employment of such Person,
which Securities were originally issued to such Person in connection with an
Acquisition consummated by the Company prior to the Closing Date or a Permitted
Acquisition consummated by the Company after the Closing Date; provided, that
the aggregate cost of such redemptions in any fiscal year shall not exceed One
Million Dollars ($1,000,000).
7.13. CONSOLIDATED NET WORTH.
The Net Worth, as of the last day of any fiscal quarter commencing on
June 30, 2002, shall not be less than the sum of (a) One Hundred Fifty Million
Dollars ($150,000,000), PLUS (b) 100% of the aggregate net proceeds of any
issuance of Securities of the Company or any Subsidiary in exchange for cash
during the period from the Closing Date through and including the date of
determination, PLUS (c) 75% of the aggregate imputed value of any issuance of
Securities of the Company or any Subsidiary in connection with any Acquisition,
determined at the time of such Acquisition, PLUS (d) 50% of positive net income,
if any, for such quarter (but not LESS the amount of any loss for such fiscal
quarter) MINUS (e) up to Forty-Five Million Dollars ($45,000,000) in respect of
FASB 142 non-cash charges.
-75-
7.14. FIXED CHARGE COVERAGE RATIO.
The Fixed Charge Coverage Ratio, on the last day of any fiscal quarter
commencing on September 30, 2002, for the 12-month period ending on such date,
shall not be less than 1.15:1.00.
7.15. SENIOR FUNDED DEBT TO EBITDA RATIO.
The Senior Funded Debt to EBITDA Ratio, on the last day of any fiscal
quarter commencing on June 30, 2002, shall not exceed 2:50:1.00.
7.16. TOTAL FUNDED DEBT TO EBITDA RATIO.
The Total Funded Debt to EBITDA Ratio, on the last day of any fiscal
quarter commencing on June 30, 2002, shall not exceed 3.25:1.00.
7.17. INTENTIONALLY OMITTED.
7.18. CHANGE IN BUSINESS.
The Company shall not, and shall not permit any of its Subsidiaries
to, engage in any material line of business substantially different from, and
unrelated to, those lines of business carried on by it on the date hereof.
7.19. CHANGE IN STRUCTURE.
Except as expressly permitted under Section 6.4(a) and Section 7.3,
the Company shall not and shall not permit any of its Subsidiaries to, make any
changes in its equity capital structure (including in the terms of its
outstanding stock), or amend its Organization Documents in any respect material
to the Lenders.
7.20. ACCOUNTING CHANGES.
The Company shall not, and shall not suffer or permit any of its
Subsidiaries to, make any significant change in accounting treatment or
reporting practices, except as required by GAAP, or change the fiscal year of
the Company or of any of its consolidated Subsidiaries.
7.21. OTHER CONTRACTS.
The Company shall not, and shall not permit any of its Subsidiaries
to, enter into any employment contracts or other employment or service-retention
arrangements whose terms, including salaries, benefits and other compensation,
are not normal and customary in the industry.
-76-
7.22. MANAGEMENT FEES.
The Company shall not, and shall not permit any of its Subsidiaries
to, pay any management, consulting, advisory or similar fees to any Affiliate,
other than fees paid to the Company and/or any of its Subsidiaries by the
Company or any of its Subsidiaries.
7.23. SUBSIDIARIES.
Except in connection with a Permitted Acquisition, the Company shall
not, and shall not permit any of its Subsidiaries to, establish, create or
acquire any new Subsidiary without providing Administrative Agent at least 10
days written notice prior to the date Subsidiary has any assets.
7.24. PENSION PLANS.
The Company shall not permit, and not permit any of its Subsidiaries
to permit, any condition to exist in connection with any Pension Plan that would
constitute grounds for the PBGC to institute proceedings to have such Pension
Plan terminated or a trustee appointed to administer such Pension Plan; not
fail, and not permit any of its Subsidiaries to fail, to make a required
contribution to any Pension Plan if such failure is sufficient to give rise to a
Lien under Section 302(f) of ERISA; and not engage in, or permit to exist or
occur, or permit any of its Subsidiaries to engage in, or permit to exist or
occur, any other condition, event or transaction with respect to any Pension
Plan that is reasonably likely to result in a Material Adverse Effect.
7.25. AMENDMENT OF DOCUMENTS.
The Company will not, and will not permit any of its Subsidiaries to,
amend, modify or alter, or permit to be amended, modified or altered, any
agreement, instrument or document evidencing any of the Subordinated Debt, if
the effect of such amendment is to (i) increase the interest rate on such
Subordinated Debt, (ii) accelerate the dates upon which payments of principal or
interest are due on such Subordinated Debt, (iii) change the payment provisions
of such Subordinated Debt, (iv) change the subordination provisions thereof, if
any or (v) otherwise alter the terms of such Subordinated Debt in any material
respect.
ARTICLE VIII
EVENTS OF DEFAULT
8.1. EVENT OF DEFAULT.
Any of the following shall constitute an "Event of Default":
(a) NON-PAYMENT.
The Company fails to pay, (i) when and as required to be paid herein,
any amount of principal of any Loan, or (ii) within 3 days after the same shall
become due,
-77-
any interest, fee or any other amount payable hereunder or pursuant to any other
Loan Document; or
(b) REPRESENTATION OR WARRANTY.
Any representation or warranty by the Company or any other Loan Party
made or deemed made herein, in any Loan Document, or which is contained in any
certificate, document or financial or other statement by the Company, any other
Loan Party, or their respective Responsible Officers, furnished at any time
under this Agreement, or in or under any Loan Document, shall prove to have been
incorrect in any material respect on or as of the date made or deemed made; or
(c) SPECIFIC DEFAULTS.
The Company fails to perform or observe any term, covenant or
agreement contained in Sections 6.1, 6.2, 6.3, 6.6 and 6.9 or Article VII; or
(d) OTHER DEFAULTS.
The Company fails to perform or observe any other term or covenant
contained in this Agreement or any Loan Document, and such default shall
continue unremedied for a period of 30 days after the earlier of (i) the date
upon which a Responsible Officer of the Company knew or should have known of
such failure or (ii) the date upon which written notice thereof is given to the
Company by the Administrative Agent; or
(e) CROSS-DEFAULT.
The Company or any other Loan Party (i) fails to make any payment in
respect of any Indebtedness or Contingent Obligation having an aggregate
principal amount (including undrawn committed or available amounts and including
amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than Two Million Five Hundred Thousand Dollars ($2,500,000)
when due (whether by scheduled maturity, required prepayment, acceleration,
demand, or otherwise) and such failure continues after the applicable grace or
notice period, if any, specified in the document relating thereto on the date of
such failure; or (ii) fails to perform or observe any other condition or
covenant, or any other event shall occur or condition exist, under any agreement
or instrument relating to any such Indebtedness or Contingent Obligation, and
such failure continues after the applicable grace or notice period, if any,
specified in the document relating thereto on the date of such failure if the
effect of such failure, event or condition is to cause, or to permit the holder
or holders of such Indebtedness or beneficiary or beneficiaries of such
Indebtedness (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause such Indebtedness to be declared to be
due and payable prior to its stated maturity, or such Contingent Obligation to
become payable or cash collateral in respect thereof to be demanded; or
-78-
(f) INSOLVENCY; VOLUNTARY PROCEEDINGS.
The Company or any other Substantial Loan Party (i) ceases or fails to
be Solvent, or generally fails to pay, or admits in writing its inability to
pay, its debts as they become due, subject to applicable grace periods, if any,
whether at stated maturity or otherwise; (ii) voluntarily ceases to conduct its
business in the ordinary course; (iii) commences any Insolvency Proceeding with
respect to itself; or (iv) takes any action to effectuate or authorize any of
the foregoing; or
(g) INVOLUNTARY PROCEEDINGS.
(i) Any involuntary Insolvency Proceeding is commenced or filed
against the Company or any Substantial Loan Party, or any writ, judgment,
warrant of attachment, execution or similar process, is issued or levied against
a substantial part of the Company's or any Substantial Loan Party's Properties,
and any such proceeding or petition shall not be dismissed, or such writ,
judgment, warrant of attachment, execution or similar process shall not be
released, vacated or fully bonded within 60 days after commencement, filing or
levy; (ii) the Company or any Substantial Loan Party admits the material
allegations of a petition against it in any Insolvency Proceeding, or an order
for relief (or similar order under non-U.S. law) is ordered in any Insolvency
Proceeding; or (iii) the Company or any Substantial Loan Party acquiesces in the
appointment of a receiver, trustee, custodian, conservator, liquidator,
mortgagee in possession (or agent therefor), or other similar Person for itself
or a substantial portion of its Property or business; or
(h) MONETARY JUDGMENTS.
One or more judgments, non-interlocutory orders, decrees or
arbitration awards shall be entered against the Company or any other Loan Party
involving in the aggregate a liability (not fully covered by independent
third-party insurance) as to any single or related series of transactions,
incidents or conditions, of One Million Dollars ($1,000,000) or more, and the
same shall remain unsatisfied, unvacated and unstayed pending appeal for a
period of 30 days after the entry thereof; or
(i) NON-MONETARY JUDGMENTS.
Any non-monetary judgment, order or decree shall be rendered against
the Company or any other Loan Party which does or could reasonably be expected
to have a Material Adverse Effect, and there shall be any period of 30
consecutive days during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect; or
(j) COLLATERAL.
(i) any provision of any Collateral Document shall for
any reason (other than as provided or permitted in this Agreement or
any other Loan Document) cease to be valid and binding on or
enforceable against the Company or any other Loan Party thereto or the
Company or any other Loan
-79-
Party shall so state in writing or bring an action to limit its
obligations or liabilities thereunder; or
(ii) any Collateral Document shall for any reason (other
than pursuant to the terms thereof or the terms or provisions of this
Agreement or any other Loan Document) cease to create a valid security
interest in the Collateral purported to be covered thereby or such
security interest shall for any reason (other than as provided or
permitted in this Agreement or any other Loan Document) cease to be a
perfected and first priority security interest subject only to
Permitted Liens; or
(k) CHANGE OF CONTROL.
Any Change of Control shall occur; or
(l) ADVERSE CHANGE.
There shall occur a Material Adverse Effect; or
(m) LOAN PARTY DEFAULTS.
A Material Loan Party (other than the Company) shall fail to perform
or observe any term, covenant or agreement in any Loan Document to which it is a
party and such failure shall continue unremedied for a period of 30 days after
the earlier of (i) the date upon which a Responsible Officer of the Company knew
or should have known of such failure or (ii) the date upon which written notice
thereof is given to the Company by the Administrative Agent; or any Loan Party
Guaranty shall for any reason (other than as provided or permitted in this
Agreement or any other Loan Document) be partially (including with respect to
future advances) or wholly revoked or invalidated, or, except in connection with
a transaction permitted under this Agreement or any other Loan Document,
otherwise cease to be in full force and effect, or any Loan Party shall contest
in any manner the validity or enforceability thereof or deny that it has any
further liability or obligation thereunder; or
(n) ERISA LIABILITIES.
Any of the following events shall have occurred, if such event is
reasonably likely to have a Material Adverse Effect: (i) the existence of a
Reportable Event, (ii) the withdrawal of the Company or any ERISA Affiliate from
a Pension Plan during a plan year in which it was a "substantial employer" as
defined in Section 4001(a)(2) of ERISA, (iii) the occurrence of an obligation to
provide affected parties with a written notice of intent to terminate a Pension
Plan in a distress termination under Section 4041 of ERISA, (iv) the institution
by PBGC of proceedings to terminate any Pension Plan, (v) any event or condition
that would require the appointment of a trustee to administer a Pension Plan,
(vi) the withdrawal of the Company or any ERISA Affiliate from a Multiemployer
Plan, and (vii) any event that would give rise to a Lien under Section 302(f) of
ERISA; or
-80-
(o) ▇▇▇▇▇ STOCK OWNERSHIP.
At any time prior to the initial public offering of the Company's
stock, ▇▇▇▇▇▇ ▇▇▇▇▇ or his heirs shall cease to beneficially own or hold,
directly or indirectly, at least 750,000 shares of the common stock of the
Company.
8.2. REMEDIES.
If any Event of Default occurs, the Administrative Agent shall, at the
request of, or may, with the consent of, the Majority Lenders,
(a) declare the Revolving Commitment of each Lender to make Loans
and to participate in Letters of Credit to be terminated, whereupon such
Revolving Commitments shall forthwith be terminated;
(b) declare the unpaid principal amount of all outstanding Loans,
all interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable;
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Company; and
(c) exercise on behalf of itself and the Lenders all rights and
remedies available to it and the Lenders under the Loan Documents or applicable
law;
PROVIDED, HOWEVER, that upon the occurrence of any event specified in
subsections (f) or (g) of Section 8.1 above (in the case of clause (i) of
subsection (g) upon the expiration of the 60-day period mentioned therein), the
obligation of each Lender to make Loans shall automatically terminate and the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable without further
act of any Agent or any Lender.
8.3. RIGHTS NOT EXCLUSIVE.
The rights provided for in this Agreement and the other Loan Documents
are cumulative and are not exclusive of any other rights, powers, privileges or
remedies provided by law or in equity, or under any other instrument, document
or agreement now existing or hereafter arising.
ARTICLE IX
THE AGENTS
9.1. APPOINTMENT AND AUTHORIZATION.
(a) Each Lender hereby irrevocably appoints, designates and
authorizes the Administrative Agent to take such action on its behalf under the
provisions of this Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to it by the terms of
this Agreement or any other Loan Document, together
-81-
with such powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary contained elsewhere in this Agreement or in any other
Loan Document, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the
Administrative Agent have or be deemed to have any fiduciary relationship with
any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Administrative Agent.
(b) The Issuer shall act on behalf of the Lenders with respect to
the Letters of Credit and the documents associated therewith until such time and
except for so long as the Administrative Agent may agree at the request of the
Majority Lenders to act for the Issuer with respect thereto; PROVIDED, HOWEVER,
that each Issuer shall have all of the benefits and immunities (i) provided to
the Administrative Agent in this Article IX with respect to any acts taken or
omissions suffered by the Issuer in connection with Letters of Credit issued by
it or proposed to be issued by it and the applications and agreements for
letters of credit pertaining to Letters of Credit as fully as if the term
"Administrative Agent", as used in this Article IX, included the Issuer with
respect to such acts or omissions, and (ii) as additionally provided in this
Agreement with respect to the Issuer.
9.2. DELEGATION OF DUTIES.
The Administrative Agent may execute any of its duties under this
Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Administrative Agent shall not be
responsible for the negligence or misconduct of any agent or attorney-in-fact
that it selects with reasonable care.
9.3. LIABILITY OF THE ADMINISTRATIVE AGENT.
None of the Administrative Agent-Related Persons shall (i) be liable
for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document (except for its own
gross negligence or willful misconduct), or (ii) be responsible in any manner to
any of the Lenders or either Co-Syndication Agent for any recital, statement,
representation or warranty made by the Company or any other Loan Party or
Affiliate of the Company, or any officer thereof, contained in this Agreement or
in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Administrative Agent
under or in connection with, this Agreement or any other Loan Document, or for
the value of any Collateral or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document, or
for any failure of the Company or any other party to any Loan Document to
perform its obligations hereunder or thereunder. No Administrative Agent-Related
Person shall be under any obligation to any Lender to ascertain or to inquire as
to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or
-82-
any other Loan Document, or to inspect the Properties, books or records of the
Company, any other Loan Party or the Company's Affiliates.
9.4. RELIANCE BY THE ADMINISTRATIVE AGENT.
(a) The Administrative Agent shall be entitled to rely, and shall
be fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to the
Company), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Majority Lenders as it deems appropriate and, if it so requests, it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or any
other Loan Document in accordance with a request or consent of the Majority
Lenders and such request and any action taken or failure to act pursuant thereto
shall be binding upon all of the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 4.1, the Co-Syndication Agents and each Lender that has
executed this Agreement shall be deemed to have consented to, approved or
accepted or to be satisfied with each document or other matter either sent by
the Administrative Agent to such Co-Syndication Agent or such Lender for
consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to such Co-Syndication
Agent or such Lender.
9.5. NOTICE OF DEFAULT.
The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default, except with respect
to defaults in the payment of principal, interest and fees required to be paid
to the Administrative Agent for the account of the Lenders, unless the
Administrative Agent shall have received written notice from a Lender or the
Company referring to this Agreement, describing such Default or Event of Default
and stating that such notice is a "notice of default". In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give
notice thereof to the Lenders. The Administrative Agent shall take such action
with respect to such Default or Event of Default as shall be requested by the
Majority Lenders in accordance with Article VIII; PROVIDED, HOWEVER, that unless
and until the Administrative Agent shall have received any such request, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable or in the best interest of the Lenders.
-83-
9.6. CREDIT DECISION.
Each Co-Syndication Agent and each Lender expressly acknowledges that
none of the Administrative Agent-Related Persons has made any representation or
warranty to it and that no act by the Administrative Agent hereinafter taken,
including any review of the affairs of the Company or any other Loan Party shall
be deemed to constitute any representation or warranty by the Administrative
Agent to a Co-Syndication Agent or any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Company and each other Loan Party, and all applicable
bank regulatory laws relating to the transactions contemplated thereby, and made
its own decision to enter into this Agreement and extend credit to the Company
hereunder. Each Co-Syndication Agent and each Lender also represents that such
party will, independently and without reliance upon the Administrative Agent and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Company. Except for notices, reports and other documents
expressly herein required to be furnished to the Lenders by the Administrative
Agent, the Administrative Agent shall not have any duty or responsibility to
provide either Co-Syndication Agent or any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of the Company which may come into the
possession of any of the Administrative Agent-Related Persons.
9.7. INDEMNIFICATION.
Whether or not the transactions contemplated hereby shall be
consummated, the Lenders shall indemnify upon demand the Administrative
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Company and without limiting the obligation of the Company to do so), ratably,
in accordance with each such Lender's Commitment Percentage, from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses and disbursements of any kind whatsoever which
may at any time (including at any time following the repayment of the Loans and
the termination or resignation of the Administrative Agent) be imposed on,
incurred by or asserted against any such Person any way relating to or arising
out of this Agreement or any document contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by any such Person under or in connection with any of the foregoing;
PROVIDED, HOWEVER, that no Lender shall be liable for the payment to the
Administrative Agent-Related Persons of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from such Persons' gross negligence
or willful misconduct. Without limitation of the foregoing, each Lender shall
-84-
reimburse the Administrative Agent upon demand for its ratable share (in
accordance with each such Lender's Commitment Percentage) of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the Administrative
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein to the extent that the Administrative
Agent is not reimbursed for such expenses by or on behalf of the Company.
Without limiting the generality of the foregoing, if the Internal Revenue
Service or any other Governmental Authority of the United States or other
jurisdiction asserts a claim that the Administrative Agent did not properly
withhold tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered, was not properly executed, or because such
Lender failed to notify the Administrative Agent of a change in circumstances
which rendered the exemption from, or reduction of, withholding tax ineffective,
or for any other reason) such Lender shall indemnify the Administrative Agent
fully for all amounts paid, directly or indirectly, by the Administrative Agent
as tax or otherwise, including penalties and interest, and including any taxes
imposed by any jurisdiction on the amounts payable to the Administrative Agent
under this Section, together with all costs and expenses (including Attorney
Costs). The obligation of the Lenders in this Section shall survive the payment
of all Obligations hereunder.
9.8. AGENTS IN THEIR INDIVIDUAL CAPACITY.
Each of BOA, LaSalle, Fleet and their respective Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory or other business with any Loan Party and its Affiliates as
though BOA were not the Administrative Agent hereunder and LaSalle and Fleet
were not Co-Syndication Agents and, in each case, without notice to or consent
of the Lenders. The Lenders acknowledge that, pursuant to such activities, BOA,
LaSalle, Fleet or their respective Affiliates may receive information regarding
the Company or its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Company or its Affiliates) and
acknowledge that none of BOA, LaSalle, Fleet nor their respective Affiliates
shall be under any obligation to provide such information to them. With respect
to its Loans, each of BOA, LaSalle and Fleet shall have the same rights and
powers under this Agreement as any other Lender and may exercise the same as
though it were not an Agent, and the terms "Lender" and "Lenders" shall include
each of BOA, LaSalle and Fleet in its individual capacity.
9.9. SUCCESSOR ADMINISTRATIVE AGENT.
The Administrative Agent may resign as Administrative Agent upon 30
days' notice to the Lenders. If the Administrative Agent shall resign as
Administrative Agent under this Agreement, the Majority Lenders, with the
consent of the Company so long as no Default or Event of Default exists at such
time, shall appoint from among the Lenders a successor administrative agent for
the Lenders. If no successor administrative agent is appointed prior to the
effective date of the resignation of the Administrative
-85-
Agent, the Administrative Agent, with the consent of the Company so long as no
Default or Event of Default exists at such time, may appoint a successor
administrative agent from among the Lenders. Upon the acceptance of its
appointment as successor administrative agent hereunder, such successor
administrative agent shall succeed to all the rights, powers and duties of the
retiring Administrative Agent and the term "Administrative Agent" shall mean
such successor administrative agent and the retiring Administrative Agent's
appointment, powers and duties as Administrative Agent shall be terminated.
After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article IX and Sections 10.4 and
10.5 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was the Administrative Agent under this Agreement. If no
successor administrative agent has accepted appointment as Administrative Agent
by the date which is 30 days following a retiring Administrative Agent's notice
of resignation, the retiring Administrative Agent's resignation shall
nevertheless thereupon become effective and if no successor administrative agent
has accepted appointment as Administrative Agent by the date which is 30 days
following a retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Majority Lenders appoint a successor
administrative agent as provided for above. Notwithstanding the foregoing,
however, BOA may not removed as the Administrative Agent at the request of the
Majority Lenders unless BOA or any Affiliate thereof acting as an Issuer
hereunder shall also simultaneously be replaced as an Issuer pursuant to
documentation in form and substance reasonably satisfactory to BOA (and if
applicable, such Affiliate).
9.10. COLLATERAL MATTERS.
(a) The Administrative Agent is authorized on behalf of all the
Lenders, without the necessity of any notice to or further consent from the
Lenders, from time to time to take any action with respect to any Collateral or
the Collateral Documents which may be necessary to perfect and maintain
perfected the security interest in and Liens upon the Collateral granted
pursuant to the Collateral Documents.
(b) The Lenders irrevocably authorize the Administrative Agent, at
its option and in its discretion, to release any Lien granted to or held by the
Administrative Agent upon any Collateral (i) upon termination of the Revolving
Commitments and payment in full of all Loans and all other Obligations payable
under this Agreement and under any other Loan Document; (ii) constituting
Property sold or to be sold or disposed of as part of or in connection with any
disposition permitted hereunder; (iii) constituting Property in which a Loan
Party owned no interest at the time the Lien was granted or at any time
thereafter; (iv) constituting Property leased to a Loan Party under a lease
which has expired or been terminated in a transaction permitted under this
Agreement or is about to expire and which has not been, and is not intended by
such Loan Party to be, renewed or extended; (v) consisting of an instrument
evidencing Indebtedness or other debt instrument, if the indebtedness evidenced
thereby has been paid in full; or (vi) if approved, authorized or ratified in
writing by the Majority Lenders or all the Lenders, as the case may be, as
provided in subsection 10.1(f). Upon request by the
-86-
Administrative Agent at any time, the Lenders will confirm in writing the
Administrative Agent's authority to release particular types or items of
Collateral pursuant to this subsection 9.10(b).
9.11. CO-SYNDICATION AGENTS.
Each Co-Syndication Agent, in its capacity as such, shall have no
rights, powers, duties or responsibilities hereunder or any other Loan Document
and no implied rights, powers, duties or responsibilities shall be read into
this Agreement or any other Loan Document or otherwise exist on behalf of or
against such Co-Syndication Agent, in its capacity as such. If LaSalle resigns
as a Co-Syndication Agent, no successor Co-Syndication Agent shall be appointed.
If Fleet resigns as a Co-Syndication Agent, no successor Co-Syndication Agent
shall be appointed.
ARTICLE X
MISCELLANEOUS
10.1. AMENDMENTS AND WAIVERS.
No amendment or waiver of any provision of this Agreement or any other
Loan Document, and no consent with respect to any departure by any Loan Party
therefrom, shall be effective unless the same shall be in writing and signed by
such Loan Party and the Majority Lenders or, if the Lenders are not a party
thereto, the Administrative Agent (with the prior written consent of the
Majority Lenders), and then such waiver shall be effective only in the specific
instance and for the specific purpose for which given; PROVIDED, HOWEVER, that
no such waiver, amendment, or consent shall, unless in writing and signed by all
the Lenders, or if the Lenders are not a party thereto, the Administrative Agent
(with the prior written consent of all of the Lenders), do any of the following:
(a) increase or extend the Revolving Commitment or Term Commitment
of any Lender (or reinstate any Revolving Commitment or Term Commitment
terminated pursuant to subsection 8.2(a)) or subject any Lender to any
additional obligations;
(b) postpone or delay any date fixed for any payment of principal,
interest, fees or other amounts due to the Lenders (or any of them) hereunder or
under any Loan Document;
(c) reduce the principal of, or the rate of interest specified
herein on any Loan, or of any fees or other amounts payable hereunder or under
any Loan Document;
(d) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans which shall be required for the Lenders or
any of them to take any action hereunder;
-87-
(e) amend this Section 10.1 or Section 2.14 or any provision
providing for consent or other action by all Lenders; or
(f) discharge any Loan Party Guaranty, or release Collateral with
an aggregate fair market value in excess of Five Hundred Thousand Dollars
($500,000) in any one transaction or series of related transactions except as
otherwise may be provided in the Collateral Documents;
and, PROVIDED, FURTHER, that (i) no amendment, waiver or consent shall, unless
in writing and signed by the Administrative Agent in addition to the Majority
Lenders or all the Lenders, as the case may be, affect the rights or duties of
the Administrative Agent under this Agreement or any other Loan Document, (ii)
no amendment, waiver or consent shall, unless in writing and signed by the
Issuer in addition to the Majority Lender or all the Lenders, as the case may
be, affect the rights or duties of the Issuer under this Agreement or any other
Loan Document and (iii) the fees payable to the Administrative Agent pursuant to
subsection 2.10(a), (c) and (d) may be changed pursuant to a writing executed by
the Company and the Administrative Agent.
10.2. NOTICES.
(a) All notices, requests and other communications provided for
hereunder shall be in writing (including, unless the context expressly otherwise
provides, by facsimile transmission; PROVIDED, that any matter transmitted by
the Company by facsimile (i) shall be immediately confirmed by a telephone call
to the recipient at the number specified on the applicable signature page
hereof, and (ii) shall be followed promptly by a hard copy original thereof) and
mailed, faxed or delivered, to the address or facsimile number specified for
notices on the applicable signature page hereof; or, as directed to the Company
or the Administrative Agent, to such other address as shall be designated by
such party in a written notice to the other parties, and as directed to each
other party, at such other address as shall be designated by such party in a
written notice to the Company and the Administrative Agent.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery be effective upon delivery, or when faxed, be
effective when transmitted by facsimile machine, or if otherwise delivered, upon
delivery; except that notices pursuant to Article II or IX shall not be
effective until actually received by the Administrative Agent.
(c) The Company acknowledges and agrees that any agreement of the
Administrative Agent and the Lenders at Article II herein to receive certain
notices by telephone and facsimile is solely for the convenience and at the
request of the Company. The Administrative Agent and the Lenders shall be
entitled to rely on the authority of any Person purporting to be a Person
authorized by the Company to give such notice and the Administrative Agent and
the Lenders shall not have any liability to the Company or other Person on
account of any action taken or not taken by the Administrative Agent or the
Lenders in reliance upon such telephonic or facsimile notice. The obligation of
the Company to repay the Loans shall not be affected in any way or to any extent
by any failure by the Administrative Agent and the Lenders to receive written
confirmation of any telephonic or facsimile notice or
-88-
the receipt by the Administrative Agent and the Lenders of a confirmation which
is at variance with the terms understood by the Administrative Agent and the
Lenders to be contained in the telephonic or facsimile notice.
10.3. NO WAIVER; CUMULATIVE REMEDIES.
No failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege.
10.4. COSTS AND EXPENSES.
The Company shall, whether or not the transactions contemplated hereby
shall be consummated:
(a) pay or reimburse BOA (including in its capacity as
Administrative Agent), within thirty (30) days after demand (subject to
subsection 4.1(f)) for all reasonable costs and expenses incurred by BOA
(including in its capacity as Administrative Agent), in connection with the
development, preparation, negotiation, delivery, closing, on-going
administration and execution of, and any amendment, supplement, waiver or
modification to (in each case, whether or not consummated), this Agreement, any
Loan Document and any other documents prepared in connection herewith or
therewith, and the consummation of the transactions contemplated hereby and
thereby, including the reasonable Attorney Costs incurred by BOA (including in
its capacity as Administrative Agent) with respect thereto;
(b) pay or reimburse each Lender, the Administrative Agent and
each Co-Syndication Agent within thirty (30) days after demand (subject to
subsection 4.1(f)) for all reasonable costs and expenses incurred by them in
connection with the enforcement, attempted enforcement, or preservation of any
rights or remedies during the existence of an Event of Default (including in
connection with any "workout" or restructuring regarding the Loans, and
including in any Insolvency Proceeding or appellate proceeding) under this
Agreement, any other Loan Document, and any such other documents, including
Attorney Costs, incurred by the Administrative Agent, each Co-Syndication Agent
and any Lender; and
(c) pay or reimburse BOA (including in its capacity as
Administrative Agent) within thirty (30) days after demand (subject to
subsection 4.1(f)) for all reasonable appraisal (including the reasonable
allocated cost of internal appraisal services), audit, environmental inspection
and review (including the reasonable allocated cost of such internal services),
search and filing costs, fees and expenses, incurred or sustained by BOA
(including in its capacity as Administrative Agent) in connection with the
matters referred to under subsections (a) and (b) of this Section 10.4.
10.5. INDEMNITY.
Whether or not the transactions contemplated hereby shall be
consummated:
-89-
(a) GENERAL INDEMNITY.
The Company shall pay, indemnify, and hold each Lender, each Agent and
each of their respective officers, directors, employees, counsel, agents and
attorneys-in-fact (each, an "Indemnified Person") harmless from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses or disbursements (including Attorney
Costs) of any kind or nature whatsoever with respect to any investigation,
litigation or proceeding (including any Insolvency Proceeding or appellate
proceeding) related to this Agreement or the Loans or the use of the proceeds
thereof, the execution, delivery, enforcement, performance and administration of
this Agreement and any other Loan Documents, or the transactions contemplated
hereby and thereby, and with respect to any investigation, litigation or
proceeding (including any Insolvency Proceeding or appellate proceeding) related
to this Agreement or the Loans or the use of the proceeds thereof, whether or
not any Indemnified Person is a party thereto (all the foregoing, collectively,
the "Indemnified Liabilities"); PROVIDED, that the Company shall have no
obligation hereunder to any Indemnified Person with respect to Indemnified
Liabilities arising from the gross negligence or willful misconduct of such
Indemnified Person.
(b) ENVIRONMENTAL INDEMNITY.
(i) The Company hereby agrees to indemnify, defend and
hold harmless each Indemnified Person, from and against any and all
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses or disbursements (including
Attorney Costs and the reasonable allocated cost of internal
environmental audit or review services), which may be incurred by or
asserted against such Indemnified Person in connection with or arising
out of any pending or threatened investigation, litigation or
proceeding, or any action taken by any Person, with respect to any
Environmental Claim arising out of or related to any Property, other
than any such actions that constitute gross negligence or willful
misconduct by such Indemnified Person.
(ii) In no event shall any site visit, observation,
or testing by any Agent or any Lender (or any contractee of any Agent
or any Lender) be deemed a representation or warranty that Hazardous
Materials are or are not present in, on, or under, the site, or that
there has been or shall be compliance with any Environmental Law.
Neither the Company nor any other Person is entitled to rely on any
site visit, observation, or testing by any Agent or any Lender.
Neither any Agent nor any Lender owes any duty of care to protect the
Company or any other Person against, or to inform the Company or any
other party of, any Hazardous Materials or any other adverse condition
affecting any site or Property. Neither any Agent nor any Lender shall
be obligated to disclose to the Company or any other Person any report
or findings made as a result of, or in connection with, any site
visit, observation, or testing by any Agent or any Lender.
-90-
(c) SURVIVAL; DEFENSE.
The obligations in this Section 10.5 shall survive payment of all
other Obligations. At the election of any Indemnified Person, the Company shall
defend such Indemnified Person using legal counsel reasonably satisfactory to
such Indemnified Person, at the sole cost and expense of the Company. All
amounts owing under this Section 10.5 shall be paid within 30 days after demand.
10.6. MARSHALLING; PAYMENTS SET ASIDE.
Neither any Agent nor the Lenders shall be under any obligation to
▇▇▇▇▇▇▇▇ any assets in favor of the Company or any other Person or against or in
payment of any or all of the Obligations. To the extent that the Company makes a
payment or payments to any Agent or any Lender, or any Agent or any Lender
enforces its Liens or exercise its rights of set-off, and such payment or
payments or the proceeds of such enforcement or set-off or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required (including pursuant to any settlement entered into by the
Administrative Agent in its discretion) to be repaid to a trustee, receiver or
any other party in connection with any Insolvency Proceeding, or otherwise, then
(a) to the extent of such recovery the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such enforcement or set-off had not
occurred, and (b) each Lender severally agrees to pay to the Administrative
Agent upon demand its ratable share of the total amount so recovered from or
repaid by the Administrative Agent.
10.7. SUCCESSORS AND ASSIGNS.
The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns,
except that the Company may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of the
Administrative Agent and each Lender.
10.8. ASSIGNMENTS, PARTICIPATIONS, ETC.
(a) Any Lender may, with the written consent of the Company at all
times other than during the existence of an Event of Default and the
Administrative Agent, which consents shall not be unreasonably withheld, at any
time assign and delegate to one or more Persons (PROVIDED, that no written
consent of the Company or the Administrative Agent shall be required in
connection with any assignment and delegation by a Lender to an Affiliate of
such Lender) (each an "Assignee") all, or any ratable part of all, of the Loans,
the Revolving Commitments and the other rights and obligations of such Lender
hereunder, in a minimum amount of Five Million Dollars ($5,000,000); PROVIDED,
HOWEVER, that the Company and the Administrative Agent may continue to deal
solely and directly with such Lender in connection with the interest so assigned
to an Assignee until (A) written notice of such assignment, together with
payment instructions, addresses and related information with respect to such
Assignee, shall have been given to the Company and the Administrative Agent by
such Lender and such
-91-
Assignee; (B) such Lender and its Assignee shall have delivered to the Company
and the Administrative Agent an Assignment and Acceptance in the form of
EXHIBIT H ("Assignment and Acceptance") together with any Note or Notes subject
to such assignment and (C) the assignor Lender or Assignee has paid to the
Administrative Agent a processing fee in the amount of Three Thousand Five
Hundred Dollars ($3,500).
(b) From and after the date that the Administrative Agent notifies
the assignor Lender that it has received (and provided its consent with respect
to) an executed Assignment and Acceptance and payment of the above-referenced
processing fee, (i) the Assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, shall have the rights and obligations of a
Lender under the Loan Documents, and (ii) the assignor Lender shall, to the
extent that rights and obligations hereunder and under the other Loan Documents
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its obligations under the Loan Documents.
(c) Within five Business Days after its receipt of notice by the
Administrative Agent that it has received an executed Assignment and Acceptance
and payment of the processing fee (and PROVIDED, that it consents to such
assignment pursuant to subsection 10.8(a)), the Company shall execute and
deliver to the Administrative Agent new Notes evidencing such Assignee's
assigned Loans and Commitment and, if the assignor Lender has retained a portion
of its Loans and its Commitment, replacement Notes in the principal amount of
the Loans retained by the assignor Lender (such Notes to be in exchange for, but
not in payment of, the Notes held by such Lender). Immediately upon each
Assignee's making its processing fee payment under the Assignment and
Acceptance, this Agreement, shall be deemed to be amended to the extent, but
only to the extent, necessary to reflect the addition of the Assignee and the
resulting adjustment of the Commitments arising therefrom. The Commitments
allocated to each Assignee shall reduce such Commitments of the assigning Lender
PRO TANTO.
(d) Any Lender may, upon prior written notice to the Company and
the Administrative Agent, at any time sell to one or more commercial banks or
other Persons not Affiliates of the Company (a "Participant") participating
interests in any Loans, the Revolving Commitment of that Lender and the other
interests of that Lender (the "originating Lender") hereunder and under the
other Loan Documents; PROVIDED, HOWEVER, that (i) the originating Lender's
obligations under this Agreement shall remain unchanged, (ii) the originating
Lender shall remain solely responsible for the performance of such obligations,
(iii) the Company and the Administrative Agent shall continue to deal solely and
directly with the originating Lender in connection with the originating Lender's
rights and obligations under this Agreement and the other Loan Documents, and
(iv) no Lender shall transfer or grant any participating interest under which
the Participant shall have rights to approve any amendment to, or any consent or
waiver with respect to, this Agreement or any other Loan Document, except to the
extent such amendment, consent or waiver would require unanimous consent of the
Lenders as described in the FIRST PROVISO to Section 10.1. In the case of any
such participation, the Participant shall be entitled to the benefit of Sections
3.1, 3.3 and 10.5, with respect to its participation interest, as though it were
also a Lender hereunder and subject to the same qualifications and limitations
as
-92-
if it were a Lender hereunder, and provided there is no duplicate recovery, but
shall not have any other rights under this Agreement, or any of the other Loan
Documents, and all amounts payable by the Company hereunder shall be determined
as if such Lender had not sold such participation; except that, if amounts
outstanding under this Agreement are due and unpaid, or shall have been declared
or shall have become due and payable upon the occurrence of an Event of Default,
each Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement.
(e) Each Lender agrees to take normal and reasonable precautions
and exercise due care to maintain the confidentiality of all information
provided to it by the Company or any Subsidiary of the Company, or by the
Administrative Agent on such Company's or Subsidiary's behalf, in connection
with this Agreement or any other Loan Document, and neither it nor any of its
Affiliates shall use any such information for any purpose or in any manner other
than pursuant to the terms contemplated by this Agreement; except to the extent
such information (i) was or becomes generally available to the public other than
as a result of a disclosure by such Lender, or (ii) was or becomes available on
a non-confidential basis from a source other than the Company, PROVIDED, that
such source is not bound by a confidentiality agreement with the Company known
to such Lender; PROVIDED, FURTHER, HOWEVER, that any Lender may disclose such
information (A) at the request or pursuant to any requirement of any
Governmental Authority to which such Lender is subject or in connection with an
examination of such Lender by any such authority; (B) pursuant to subpoena or
other court process; (C) when required to do so in accordance with the
provisions of any applicable Requirement of Law; (D) to the extent reasonably
required in connection with any litigation or proceeding to which the
Administrative Agent, any Lender or their respective Affiliates may be party,
(E) to the extent reasonably required in connection with the exercise of any
remedy hereunder or under any other Loan Document, and (F) to such Lender's
independent auditors and other professional advisors, provided that each such
Person has agreed to preserve the confidentiality of such material.
Notwithstanding the foregoing, the Company authorizes each Lender to disclose to
any Participant or Assignee (each, a "Transferee") and to any prospective
Transferee, such financial and other information in such Lender's possession
concerning the Company or its Subsidiaries which has been delivered to any Agent
or any Lender pursuant to this Agreement or which has been delivered to any
Agent or any Lender by the Company in connection with the Lenders' credit
evaluation of the Company prior to entering into this Agreement; PROVIDED, that,
unless otherwise agreed by the Company, such Transferee agrees in writing to
such Lender to keep such information confidential to the same extent required of
the Lenders hereunder. In the event that any Agent or Lender or any recipient of
nonpublic information obtained pursuant to clause (E) above is required or
requested to disclose any confidential information pursuant to clauses (A)-(D)
above, such recipient shall give the Company prompt prior written notice of such
requirement or request so that the Company may seek an appropriate protective
order, and, at the expense of the Company, such recipient shall cooperate with
the Company in any proceedings to obtain such a protective order to the extent
such cooperation is necessary to obtain such protective order and to the extent
the recipient determines its cooperation will not be disadvantageous to it. In
the absence of a protective order, if the recipient is nonetheless compelled or
required to disclose such confidential
-93-
information in the opinion of its legal counsel, it may disclose such
confidential information, provided that the recipient shall give the Company
written notice of the confidential information to be disclosed as far in advance
of the disclosure as is practicable and, upon the request and at the expense of
the Company, shall use its reasonable effects to obtain assurances that
confidential treatment shall be accorded such information by the receiving
party.
(f) Notwithstanding any other provision contained in this
Agreement or any other Loan Document to the contrary, any Lender may assign all
or any portion of the Loans or Notes held by it to any Federal Reserve Bank or
the United States Treasury as collateral security pursuant to Regulation A of
the Federal Reserve Board and any Operating Circular issued by such Federal
Reserve Bank, PROVIDED, that any payment in respect of such assigned Loans or
Notes made by the Company to or for the account of the assigning or pledging
Lender in accordance with the terms of this Agreement shall satisfy the
Company's obligations hereunder in respect to such assigned Loans or Notes to
the extent of such payment. No such assignment shall release the assigning
Lender from its obligations hereunder.
(g) BOA may assign its obligations as an Issuer to an Affiliate of
BOA without the prior written consent of any party hereto. In connection with
such assignment, each of the parties hereto agrees to execute such documents as
are reasonably requested by such Affiliate of BOA to effectuate such assignment.
10.9. SET-OFF.
In addition to any rights and remedies of the Lenders provided by law,
if an Event of Default exists, each Lender is authorized at any time and from
time to time, without prior notice to the Company, any such notice being waived
by the Company to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held by, and other indebtedness at any time owing to, such Lender to or
for the credit or the account of the Company against any and all Obligations
owing to such Lender, now or hereafter existing, irrespective of whether or not
the Administrative Agent or such Lender shall have made demand under this
Agreement or any Loan Document and although such Obligations may be contingent
or unmatured. Each Lender agrees promptly to notify the Company and the
Administrative Agent after any such set-off and application made by such Lender;
PROVIDED, HOWEVER, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender under this
Section 10.9 are in addition to the other rights and remedies (including other
rights of set-off) which the Lender may have.
10.10. COLLATERAL ACCOUNT.
(a) The Company hereby authorizes and directs the Administrative
Agent to establish and maintain with the Administrative Agent, or at the
Administrative Agent's election, with an Affiliate of the Administrative Agent,
as a blocked account in the name of the Administrative Agent, on behalf of the
Agents and the Lenders, a deposit account designated as the "Collateral
Account".
-94-
(b) All amounts held in the Collateral Account pertaining to the
Company shall secure the Obligations and may be applied to the Obligations as
provided in the Loan Documents.
(c) Any interest received in respect of investments of any amounts
deposited in the Collateral Account shall be remitted by the Administrative
Agent to the Company on the last Business Day of each calendar quarter;
PROVIDED, that the Administrative Agent shall not remit any such interest if any
Event of Default has occurred and is continuing.
(d) Cash held by an Administrative Agent, or an Affiliate of the
Administrative Agent, in the Collateral Account shall be invested or reinvested
as follows:
(i) Any funds on deposit in the Collateral Account shall
be held by the Administrative Agent, or any Affiliate of the
Administrative Agent, in a non-interest-bearing account; PROVIDED,
that so long as no Event of Default shall have occurred and be
continuing, the Company may, pursuant to written instructions, direct
the Administrative Agent to invest funds on deposit in the Collateral
Account in Cash Equivalents as indicated in such instructions; and
(ii) The Administrative Agent is hereby authorized to
sell, and shall sell, all or any designated part of the securities
held in the Collateral Account (A) so long as no Event of Default
shall have occurred and be continuing, upon receipt of appropriate
written instructions from the Company or (B) in any event if such sale
is necessary to permit the Administrative Agent to perform its duties
hereunder. The Administrative Agent shall not have any responsibility
for any loss resulting from a fluctuation in interest rates, the sale
or disposition of any Cash Equivalent prior to the maturity date or
otherwise.
The Collateral Account shall be subject to such applicable laws, and such
application regulations of the Board of Governors of the Federal Reserve System
and of any other appropriate Governmental Authority, as may now or hereafter be
in effect.
10.11. NOTIFICATION OF ADDRESSES, LENDING OFFICES, ETC.
Each Lender shall notify the Administrative Agent in writing of any
changes in the address to which notices to the Lender should be directed, of
addresses of its Lending Offices, of payment instructions in respect of all
payments to be made to it hereunder and of such other administrative information
as the Administrative Agent shall reasonably request.
10.12. COUNTERPARTS.
This Agreement may be executed by one or more of the parties to this
Agreement in any number of separate counterparts, each of which, when so
executed, shall be deemed an original, and all of said counterparts taken
together shall be deemed to
-95-
constitute but one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the Company and the
Administrative Agent.
10.13. SEVERABILITY.
The illegality or unenforceability of any provision of this Agreement
or any instrument or agreement required hereunder shall not in any way affect or
impair the legality or enforceability of the remaining provisions of this
Agreement or any instrument or agreement required hereunder.
10.14. NO THIRD PARTIES BENEFITED.
This Agreement is made and entered into for the sole protection and
legal benefit of the Company, the Lenders and the Agents, and their permitted
successors and assigns, and no other Person shall be a direct or indirect legal
beneficiary of, or have any direct or indirect cause of action or claim in
connection with, this Agreement or any of the other Loan Documents. Neither any
Agent nor any Lender shall have any obligation to any Person not a party to this
Agreement or other Loan Documents.
10.15. TIME.
Time is of the essence as to each term or provision of this Agreement
and each of the other Loan Documents.
10.16. GOVERNING LAW AND JURISDICTION.
(a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
ILLINOIS; PROVIDED, THAT
THE COMPANY, THE AGENTS AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER
FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
AND ANY OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF
ILLINOIS OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF
ILLINOIS, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANY, EACH AGENT AND
EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE COMPANY, EACH AGENT AND
EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE
COMPANY, EACH AGENT AND EACH LENDER EACH WAIVES PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY
ILLINOIS LAW. NOTWITHSTANDING THE
-96-
FOREGOING, THE AGENTS AND THE LENDERS SHALL HAVE THE RIGHT TO BRING ANY ACTION
OR PROCEEDING AGAINST THE COMPANY OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION.
10.17. WAIVER OF JURY TRIAL.
THE COMPANY, THE LENDERS AND THE AGENTS EACH WAIVE THEIR RESPECTIVE
RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER
LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR
PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE
COMPANY, THE LENDERS AND THE AGENTS EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF
ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE
FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY
JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR
OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION
HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
10.18. AUTOMATIC DEBITS OF FEES.
With respect to any non-use fee, arrangement fee, agency fee, upfront
facility fee, letter of credit fee or other fee, any interest payment, or any
other cost or expense (including Attorney Costs) due and payable to the
Administrative Agent or any Issuer under the Loan Documents, the Company hereby
irrevocably authorizes BOA, upon 24 hours prior notice to the Company, to debit
any deposit account of the Company with BOA in an amount such that the aggregate
amount debited from all such deposit accounts does not exceed such fee or other
cost or expense. If there are insufficient funds in such deposit accounts to
cover the amount of the fee or other cost or expense then due, such debits will
be reversed (in whole or in part, in BOA's sole discretion) and such amount not
debited shall be deemed to be unpaid. No such debit under this Section shall be
deemed a set-off.
10.19. ENTIRE AGREEMENT.
This Agreement, together with the other Loan Documents, embodies the
entire agreement and understanding among the Company, the Lenders and the
Agents, and supersedes all prior or contemporaneous Agreements and
understandings of such Persons,
-97-
verbal or written, relating to the subject matter hereof and thereof, except for
the Fee Letter and any prior arrangements made with respect to the payment by
the Company of (or any indemnification for) any fees, costs or expenses payable
to or incurred (or to be incurred) by or on behalf of any Agent or any Lender.
-98-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered in Chicago,
Illinois by their proper and duly
authorized officers as of the day and year first above written.
LKQ CORPORATION
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Its Senior Vice President
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
-▇▇-
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, N.A.,
as Administrative Agent
By ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its Vice President
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Agency Management Services
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Administrative Agent's Payment Office:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
-100-
BANK OF AMERICA, N.A.,
as Issuer and as a Lender
By ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its Vice President
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Domestic and Offshore Lending Office:
____________________________________________
____________________________________________
Attn: _____________________________________
-101-
LASALLE BANK NATIONAL ASSOCIATION,
as a Co-Syndication Agent and as a Lender
By ▇▇▇▇▇ ▇. ▇▇▇▇▇
Its Commercial Banking Officer
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Mr. ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Domestic and Offshore Lending Office:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
-102-
FLEET NATIONAL BANK,
as a Co-Syndication Agent and as a Lender
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Its Senior Vice President
Address for notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Domestic and Offshore Lending Office:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇ ▇▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
-103-