1
EXHIBIT 10.1
$100,000,000
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
Dated as of May 20, 1998
Between
THE ▇.▇. ▇▇▇▇▇▇▇ COMPANY, INC.
▇▇▇▇▇▇ & WINSTON, INC.
ITCO HOLDING COMPANY, INC.
THE SPEED MERCHANT, INC.
(the Borrowers)
and
THE FINANCIAL INSTITUTIONS PARTY
HERETO FROM TIME TO TIME
(the Lenders)
and
BANKBOSTON, N.A.
(the Agent)
and
FLEET CAPITAL CORPORATION
FIRST UNION NATIONAL BANK
(the Co-Agents)
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TABLE OF CONTENTS(1)
Page
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ARTICLE 1
DEFINITIONS
SECTION 1.1 Definitions............................................... 1
SECTION 1.2 General Interpretive Rules................................ 29
SECTION 1.3 Exhibits and Schedules.................................... 31
ARTICLE 2
COMMITMENTS
SECTION 2.1 Loans..................................................... 32
SECTION 2.2 Manner of Borrowing....................................... 32
SECTION 2.3 Repayment................................................. 34
SECTION 2.4 Notes..................................................... 35
SECTION 2.5 Extension of Commitments.................................. 35
ARTICLE 3
LETTER OF CREDIT FACILITY
SECTION 3.1 Agreement to Issue........................................ 36
SECTION 3.2 Amounts................................................... 36
SECTION 3.3 Conditions................................................ 36
SECTION 3.4 Issuance of Letters of Credit............................. 37
SECTION 3.5 Duties of BankBoston...................................... 37
SECTION 3.6 Payment of Reimbursement Obligations...................... 38
SECTION 3.7 Participations............................................ 38
SECTION 3.8 Indemnification, Exoneration.............................. 39
SECTION 3.9 Supporting Letter of Credit; Cash Collateral Account...... 41
ARTICLE 4
GENERAL LOAN PROVISIONS
SECTION 4.1 Interest.................................................. 42
SECTION 4.2 Certain Fees.............................................. 43
SECTION 4.3 Manner of Payment......................................... 44
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(1) This Table of Contents is included for reference purposes only and does not
constitute part of the Loan and Security Agreement.
(i)
3
SECTION 4.4 General................................................... 45
SECTION 4.5 Loan Accounts; Statements of Account...................... 45
SECTION 4.6 Reduction of Commitments; Termination of Agreement........ 45
SECTION 4.7 Making of Loans........................................... 47
SECTION 4.8 Settlement Among Lenders.................................. 48
SECTION 4.9 Mandatory Prepayments..................................... 51
SECTION 4.10 Payments Not at End of Interest Period; Failure to Borrow. 51
SECTION 4.11 Notice of Conversion or Continuation...................... 51
SECTION 4.12 Conversion or Continuation................................ 51
SECTION 4.13 Duration of Interest Periods; Maximum Number of Eurodollar
Rate Loans; Minimum Increments............................ 52
SECTION 4.14 Changed Circumstances..................................... 52
SECTION 4.15 Cash Collateral Account; Investment Accounts.............. 53
SECTION 4.16 Allocation of Payments from Borrowers..................... 54
SECTION 4.17 Borrowers' Representative................................. 55
SECTION 4.18 Joint and Several Liability............................... 55
SECTION 4.19 Obligations Absolute...................................... 56
SECTION 4.20 Waiver of Suretyship Defenses............................. 57
ARTICLE 5
CONDITIONS PRECEDENT
SECTION 5.1 Conditions Precedent to Initial Loans..................... 58
SECTION 5.2 All Loans; Letters of Credit.............................. 61
SECTION 5.3 Conditions as Covenants................................... 62
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BORROWERS
SECTION 6.1 Representations and Warranties............................ 63
SECTION 6.2 Survival of Representations and Warranties, Etc........... 71
ARTICLE 7
SECURITY INTEREST
SECTION 7.1 Security Interest......................................... 72
SECTION 7.2 Continued Priority of Security Interest................... 72
ARTICLE 8
COLLATERAL COVENANTS
SECTION 8.1 Collection of Receivables................................. 74
(ii)
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SECTION 8.2 Verification and Notification............................. 75
SECTION 8.3 Disputes, Returns and Adjustments......................... 75
SECTION 8.4 Invoices.................................................. 76
SECTION 8.5 Delivery of Instruments................................... 76
SECTION 8.6 Sales of Inventory........................................ 76
SECTION 8.7 Ownership and Defense of Title............................ 76
SECTION 8.8 Insurance................................................. 77
SECTION 8.9 Location of Offices and Collateral........................ 78
SECTION 8.10 Records Relating to Collateral............................ 78
SECTION 8.11 Inspection................................................ 78
SECTION 8.12 Information and Reports................................... 79
SECTION 8.13 Power of Attorney......................................... 80
SECTION 8.14 Assignment of Claims Act.................................. 80
ARTICLE 9
AFFIRMATIVE COVENANTS
SECTION 9.1 Preservation of Corporate Existence and Similar Matters... 81
SECTION 9.2 Compliance with Applicable Law............................ 81
SECTION 9.3 Maintenance of Property................................... 81
SECTION 9.4 Conduct of Business....................................... 81
SECTION 9.5 Insurance................................................. 81
SECTION 9.6 Payment of Taxes and Claims............................... 82
SECTION 9.7 Accounting Methods and Financial Records.................. 82
SECTION 9.8 Use of Proceeds........................................... 82
SECTION 9.9 Hazardous Waste and Substances; Environmental Requirements 82
SECTION 9.10 Additional Subsidiaries................................... 83
SECTION 9.11 Compliance with Senior Note Indenture..................... 83
ARTICLE 10
INFORMATION
SECTION 10.1 Financial Statements...................................... 84
SECTION 10.2 Accountants' Certificate.................................. 85
SECTION 10.3 Officer's Certificate..................................... 85
SECTION 10.4 Copies of Other Reports................................... 85
SECTION 10.5 Notice of Litigation and Other Matters.................... 86
SECTION 10.6 ERISA..................................................... 86
ARTICLE 11
NEGATIVE COVENANTS
SECTION 11.1 Financial Covenant........................................ 88
(iii)
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SECTION 11.2 Debt...................................................... 88
SECTION 11.3 Guaranties................................................ 88
SECTION 11.4 Acquisitions.............................................. 89
SECTION 11.5 Capital Expenditures...................................... 90
SECTION 11.6 Restricted Distributions and Payments, Etc................ 90
SECTION 11.7 Merger, Consolidation and Sale of Assets.................. 91
SECTION 11.8 Transactions with Affiliates.............................. 91
SECTION 11.9 Liens..................................................... 91
SECTION 11.10 Sales and Leasebacks...................................... 91
SECTION 11.11 Amendments of Other Agreements............................ 91
SECTION 11.12 Commingling............................................... 91
ARTICLE 12
DEFAULT
SECTION 12.1 Events of Default......................................... 92
SECTION 12.2 Remedies.................................................. 95
SECTION 12.3 Application of Proceeds................................... 97
SECTION 12.4 Power of Attorney......................................... 97
SECTION 12.5 Miscellaneous Provisions Concerning Remedies.............. 98
SECTION 12.6 Trademark License......................................... 99
ARTICLE 13
ASSIGNMENTS
SECTION 13.1 Successors and Assigns; Participations................... 100
SECTION 13.2 Representation of Lenders................................ 102
ARTICLE 14
AGENT
SECTION 14.1 Appointment of Agent..................................... 103
SECTION 14.2 Delegation of Duties..................................... 103
SECTION 14.3 Exculpatory Provisions................................... 103
SECTION 14.4 Reliance by Agent........................................ 104
SECTION 14.5 Notice of Default........................................ 104
SECTION 14.6 Non-Reliance on Agents and Other Lenders................. 104
SECTION 14.7 Indemnification.......................................... 105
SECTION 14.8 Agent in Its Individual Capacity......................... 106
SECTION 14.9 Successor Collateral Agent............................... 106
SECTION 14.10 Notices from Agent to Lenders............................ 107
SECTION 14.11 Declaring Events of Default.............................. 108
SECTION 14.12 Co-Agents................................................ 108
(iv)
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ARTICLE 15
MISCELLANEOUS
SECTION 15.1 Notices.................................................. 109
SECTION 15.2 Expenses................................................. 110
SECTION 15.3 Stamp and Other Taxes.................................... 111
SECTION 15.4 Setoff................................................... 111
SECTION 15.5 Consent to Advertising and Publicity..................... 112
SECTION 15.6 Reversal of Payments..................................... 112
SECTION 15.7 Injunctive Relief........................................ 112
SECTION 15.8 Accounting Matters....................................... 112
SECTION 15.9 Amendments............................................... 112
SECTION 15.10 Assignment............................................... 114
SECTION 15.11 Performance of Borrowers' Duties......................... 114
SECTION 15.12 Indemnification.......................................... 114
SECTION 15.13 All Powers Coupled with Interest......................... 115
SECTION 15.14 Survival................................................. 115
SECTION 15.15 Titles and Captions...................................... 115
SECTION 15.16 Severability of Provisions............................... 115
SECTION 15.17 Governing Law............................................ 116
SECTION 15.18 Counterparts............................................. 116
SECTION 15.19 Reproduction of Documents................................ 117
SECTION 15.20 Term of Agreement........................................ 117
SECTION 15.21 Increased Capital........................................ 117
SECTION 15.22 Pro-Rata Participation................................... 117
SECTION 15.23 Effect of Effectiveness of this Agreement................ 118
(v)
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ANNEX A COMMITMENTS
ANNEX B PRICING MATRIX
EXHIBIT A FORM OF AMENDED AND RESTATED PROMISSORY NOTE
EXHIBIT B FORM OF BORROWING BASE CERTIFICATE
EXHIBIT C FORM OF SETTLEMENT REPORT
EXHIBIT D FORM OF ASSIGNMENT AND ACCEPTANCE
EXHIBIT E FORM OF COMPLIANCE CERTIFICATE
EXHIBIT F FORM OF SUBSIDIARY GUARANTY
Schedule 1.1A Permitted Investments
Schedule 1.1B Permitted Liens
Schedule 1.1C Clearing Banks
Schedule 1.1D CPW Acquisition Documents
Schedule 1.1E ITCO Merger Documents
Schedule 6.1(a) Jurisdictions in Which Borrowers are Qualified as
Foreign Corporations
Schedule 6.1(b) Capitalization
Schedule 6.1(c) Subsidiaries; Ownership of Stock
Schedule 6.1(e) Compliance with Laws
Schedule 6.1(f) Business of Borrowers
Schedule 6.1(g) Governmental Approvals
Schedule 6.1(h) Title to Properties
Schedule 6.1(i) Liens
Schedule 6.1(j) Indebtedness and Guaranties
Schedule 6.1(k) Litigation
Schedule 6.1(l) Tax Matters
Schedule 6.1(m) Burdensome Provisions
Schedule 6.1(n) Undisclosed Material Obligations
Schedule 6.1(p) ERISA
Schedule 6.1(t) Location of Offices and Receivables
Schedule 6.1(u) Location of Inventory and Equipment
Schedule 6.1(v) Corporate and Fictitious Names
Schedule 6.1(y) Employee Relations
Schedule 6.1(aa) Trade Names
Schedule 6.1(bb) Bank Accounts
Schedule 6.1(dd) Real Property
Schedule 9.8 Use of Proceeds
Schedule 11.8 Affiliate Transactions
(vi)
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AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT is made as of
May 20, 1998 by and between THE ▇.▇. ▇▇▇▇▇▇▇ COMPANY, INC., ▇▇▇▇▇▇ & WINSTON,
INC., THE SPEED MERCHANT, INC., ITCO HOLDING COMPANY, INC., the financial
institutions party to this Agreement from time to time as the Lenders FLEET
CAPITAL CORPORATION and FIRST UNION NATIONAL BANK as Co-Agents, and BANKBOSTON,
N.A., as administrative agent for the Lenders.
PRELIMINARY STATEMENT
The ▇.▇. ▇▇▇▇▇▇▇ Company, Inc., ▇▇▇▇▇▇ & Winston, Inc., BankBoston,
N.A., Fleet Capital Corporation and, by assignment from BankBoston N.A. and
Fleet Capital Corporation, First Union National Bank, are parties to a Loan and
Security Agreement dated as of May 7, 1997 (as amended to date, the "Existing
Loan Agreement").
At the request of The ▇.▇. ▇▇▇▇▇▇▇ Company, Inc., the parties to the
Existing Loan Agreement have agreed to increase the amount available to be
borrowed on a revolving credit basis, permit the outstanding Term Loans (under
and as defined in the Existing Loan Agreement) to be prepaid without premium or
penalty, consent to additional acquisitions, adjust the applicable interest
rates, modify certain covenants and make other changes to the Existing Loan
Agreement, and for the convenience of the parties, to effect such increase,
permission, consent, adjustments, modifications and other changes by amending
and restating the Existing Loan Agreement in its entirety as hereinafter set
forth, upon and subject to all of the terms, conditions and provisions hereof.
Accordingly, in consideration of the Existing Loan Agreement, the
financial accommodations outstanding thereunder, the mutual promises hereinafter
set forth and other valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 Definitions. For the purposes of this Agreement:
"Account Debtor" means a Person who is obligated on a Receivable.
"Acquire" or "Acquisition", as applied to any Business Unit or
Investment, means the acquisition of such Business Unit or Investment by
purchase, exchange, issuance of stock or other securities, or by merger,
reorganization or any other method.
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"Acquired Debt" means Debt of a Person that becomes a Consolidated
Subsidiary after the Effective Date or is otherwise Acquired by a Loan Party
after the Effective Date and Debt secured by property included in a Business
Unit Acquired by a Loan Party after the Effective Date, which Debt was
outstanding immediately prior to such Acquisition but was not incurred or
created in contemplation of such Acquisition.
"Additional Reserves" means reserves other than the Letter of Credit
Reserve, the Rent Reserve or the Dilution Reserve against the Borrowing Base
established by the Agent from time to time in the exercise of its reasonable
credit judgment.
"Affiliate" (and with corollary meaning, "Affiliated") means, with
respect to a Person, (a) any partner, officer, shareholder (if holding more than
ten percent (10%) of the outstanding shares of capital stock of such Person),
member, director, employee, manager or managing agent of such Person, (b) any
spouse, parents, siblings, children or grandchildren of such Person, and (c) any
other Person (other than a Subsidiary) that, (i) directly or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common
control with, such given Person, (ii) directly or indirectly beneficially owns
or holds ten percent (10%) or more of any class of voting stock or partnership
or other voting interest of such Person or any Subsidiary of such Person, or
(iii) ten percent (10%) or more of the voting stock or partnership or other
voting interest of which is directly or indirectly beneficially owned or held by
such Person or a Subsidiary of such Person. The term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities or partnership or other voting interest, by contract or
otherwise. So long as it is not a holder, beneficially or of record, of issued
and outstanding shares of common stock of ▇▇▇▇▇▇▇ or otherwise in control of
▇▇▇▇▇▇▇, The 1818 Mezzanine Fund, L.P. will not be deemed to be an Affiliate of
▇▇▇▇▇▇▇ by reason of its holding the Warrant nor will ▇▇▇▇▇▇▇ Partners II, L.P.
(or any of its Affiliates) be deemed to be an Affiliate of ▇▇▇▇▇▇▇ solely by
reason of its ownership of the Class B Stock issued on or about the Effective
Date.
"Agency Account" means an account of a Loan Party maintained by it
with a Clearing Bank pursuant to an Agency Account Agreement.
"Agency Account Agreement" means an agreement among a Loan Party, the
Agent and a Clearing Bank, in form and substance satisfactory to the Agent,
concerning the collection and transfer of payments which represent the proceeds
of Receivables or of any other Collateral.
"Agent" means BankBoston, N.A., a national banking association, and
any successor agent appointed pursuant to SECTION 14.9 hereof.
"Agent's Office" means the office of the Agent specified in or
determined in accordance with the provisions of SECTION 15.1.
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"Agreement" means and includes this Amended and Restated Loan and
Security Agreement, including all Schedules, Exhibits and other attachments
hereto, and all amendments, modifications and supplements hereto and thereto and
restatements hereof and thereof.
"Agreement Date" means the date as of which this Agreement is dated.
"Applicable Law" means all applicable provisions of constitutions,
statutes, rules, regulations and orders of all governmental bodies and of all
orders and decrees of all courts and arbitrators, including, without limitation,
Environmental Laws.
"Applicable Margin" means (a) as to Base Rate Loans, 0.25% and (b) as
to Eurodollar Rate Loans, 1.75%, subject to quarterly adjustment as follows:
From and after the delivery of the consolidated quarterly financial statements
of ▇▇▇▇▇▇▇ and its Consolidated Subsidiaries for the Fiscal Quarter ending
December 31, 1998 and the related officer's certificate in accordance with the
respective provisions of SECTIONS 10.1(b) and 10.3, the foregoing percentages
will be adjusted, PROVIDED that no Default or Event of Default has occurred and
is continuing, effective the first day of the calendar month that begins at
least 10 days after delivery of such financial statements for such Fiscal
Quarter or any succeeding Fiscal Quarter, to the percentages set forth in ANNEX
B that correspond to the Funded Debt to EBITDA reflected in such financial
statements and the related certificate.
"Assignment and Acceptance" means an assignment and acceptance in the
form attached hereto as EXHIBIT D assigning all or a portion of a Lender's
interests, rights and obligations under this Agreement pursuant to SECTION 13.1.
"Attributable Debt" in respect of a sale leaseback transaction means,
as at the date of determination, the present value (discounted at the interest
rate borne by the Senior Notes, compounded annually) of the total obligations of
the lessee for rental payments during the remaining term of the lease included
in such sale leaseback transaction (including any period for which such lease
has been extended).
"BankBoston" means BankBoston, N.A., a national banking association in
its individual capacity and not as Agent hereunder.
"Base Rate" means at any time an interest rate per annum equal to the
greater of (i) the rate of interest publicly announced from time to time by
BankBoston at its head office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ as
its "base" rate as in effect at such time, and (ii) the Federal Funds Effective
Rate plus 1/2 of 1% per annum (rounded upward, if necessary, to the next 1/8 of
1%).
"Base Rate Loan" means each Borrowing of Base Rate Loans on the same
day, a specified principal amount of Base Rate Loans outstanding, and any
Non-Ratable Loan.
"Benefit Plan" means an "employee pension benefit plan" as defined in
Section 3(3) of ERISA (other than a Multiemployer Plan) in respect of which a
Borrower or any Related Company is, or within the immediately preceding six
years was, an "employer" as defined in Section 3(5) of ERISA, including such
plans as may be established after the Agreement Date.
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"Borrower" means each of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, CPW and ITCO.
"Borrowing" means Loans of the same Type hereunder made (or continued
or converted) by the Lenders Ratably on the same date, and, in the case of
Eurodollar Rate Loans, for the same Interest Period.
"Borrowing Base" means at any time an amount equal to the lesser of:
(a) the aggregate Commitments, MINUS the sum of
(i) the Letter of Credit Reserve, PLUS
(ii) the Rent Reserve, PLUS
(iii) any Additional Reserves, and
(b) an amount equal to
(i) 85% (or such lesser percentage as the Agent may in its
reasonable credit judgment determine from time to time) of the face
value of Eligible Receivables due and owing at such time, PLUS
(ii) 65% as to Inventory consisting of tires and 50% as to all
other Inventory (or in either case, such lesser percentage as the
Agent may in its reasonable credit judgment determine from time to
time) of the lesser of cost determined on a FIFO (or
first-in-first-out) accounting basis and fair market value of
applicable Eligible Inventory, at such time, MINUS
(iii) the sum of
(A) the Letter of Credit Reserve, PLUS
(B) the Rent Reserve, PLUS
(C) the Dilution Reserve, PLUS
(D) any Additional Reserves.
"Borrowing Base Certificate" means a certificate in the form attached
hereto as EXHIBIT B or in such other form as the Borrowers and the Agent may
agree.
"Business Day" means any day other than a Saturday, Sunday or other
day on which banks in Atlanta, Georgia are authorized to close and, when used
with respect to Eurodollar Rate Loans, means any such day on which dealings are
also carried on in the applicable interbank Eurodollar market.
"Business Unit" means assets constituting a business, whether all of
the assets of any Person or the assets of a division or operating unit of any
Person.
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"CPW" means The Speed Merchant, Inc., a California corporation, doing
business as "The Speed Merchant" and as "Competition Parts Warehouse" and a
Wholly Owned Subsidiary of ▇▇▇▇▇▇▇.
"CPW Acquisition" means the Acquisition by ▇▇▇▇▇▇▇ of all of the
issued and outstanding capital stock of CPW pursuant to the CPW Acquisition
Agreement and the consummation of the other transactions contemplated to occur
on or before the Closing Date pursuant to (and as such term is defined in) the
CPW Acquisition Agreement.
"CPW Acquisition Agreement" means the Stock Purchase Agreement dated
as of March 11, 1998 between ▇▇▇▇▇▇▇ and each stockholder of CPW named as a
"Seller" therein, as amended and in effect on the Agreement Date and as
thereafter amended in accordance with the provisions thereof and hereof.
"CPW Acquisition Documents" means the CPW Acquisition Agreement and
the other instruments, certificates, opinions, agreements and other documents
contemplated thereby to be executed and delivered on or prior to the Closing
Date (as defined in the CPW Acquisition Agreement), including, without being
limited to, the items listed on SCHEDULE 1.1D -- CPW ACQUISITION DOCUMENTS.
"Capital Expenditures" means, with respect to any Person, all
expenditures made and liabilities incurred for the acquisition of assets (other
than Inventory or assets that constitute a Business Unit) which are not, in
accordance with GAAP, treated as expense items for such Person in the year made
or incurred or as a prepaid expense applicable to a future year or years.
"Capitalized Lease" means a lease that is required to be capitalized
for financial reporting purposes in accordance with GAAP.
"Capitalized Lease Obligation" means Indebtedness represented by
obligations under a Capitalized Lease, and the amount of such Indebtedness shall
be the capitalized amount of such obligations determined in accordance with
GAAP.
"Cash Collateral" means collateral consisting of cash or Cash
Equivalents on which the Agent, for the benefit of itself as Agent and the
Lenders, has a first priority Lien.
"Cash Collateral Account" means a special interest-bearing deposit
account consisting of cash maintained at the principal office of the Agent and
under the sole dominion and control of the Agent, for its benefit and for the
benefit of the Lenders, established pursuant to the provisions of SECTION
4.15(a) for purposes set forth therein.
"Cash Equivalents" means
(a) marketable direct obligations issued or unconditionally guaranteed
by the United States Government or issued by any agency thereof and backed by
the full faith and credit of the United States, in each case maturing within one
year from the date of acquisition thereof;
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(b) commercial paper maturing no more than one year from the date
issued and, at the time of acquisition thereof, rated at least A-1 by S&P or at
least P-1 by ▇▇▇▇▇'▇;
(c) certificates of deposit or bankers' acceptances issued in Dollar
denominations and maturing within one year from the date of issuance thereof
issued by any commercial bank organized under the laws of the United States of
America or any state thereof or the District of Columbia having combined capital
and surplus of not less than $100,000,000 and, unless issued by the Agent or a
Lender, not subject to set-off or offset rights in favor of such bank arising
from any banking relationship with such bank; and
(d) repurchase agreements in form and substance and for amounts
satisfactory to the Agent.
"Class B Stock" means ▇▇▇▇▇▇▇'▇ Class B Common Stock, par value $.01
per share, issued pursuant to the recapitalization of ▇▇▇▇▇▇▇ on the Effective
Date.
"Clearing Bank" means each bank listed on SCHEDULE 1.1C - CLEARING
BANKS and any other banking institution with which an Agency Account has been
established pursuant to an Agency Account Agreement.
"Co-Agent" means each of Fleet and FUNB.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral" means and includes all of each Loan Party's right, title
and interest in and to each of the following, wherever located and whether now
or hereafter existing or now owned or hereafter acquired or arising:
(a) (i) all rights to the payment of money or other forms of
consideration of any kind (whether classified under the UCC as accounts,
contract rights, chattel paper, general intangibles or otherwise) including, but
not limited to, accounts receivable, insurance proceeds, letters of credit and
the right to receive payment thereunder, chattel paper, any rights under
contracts not yet earned by performance and not evidenced by an instrument or
chattel paper, notes, drafts, instruments, documents, acceptances and all other
debts, obligations and liabilities in whatever form from any Person, but
excluding tax refunds and insurance proceeds not arising out of the Collateral,
(ii) all guaranties, security and Liens securing payment thereof, (iii) all
goods, whether now owned or hereafter acquired, and whether sold, delivered,
undelivered, in transit or returned, which may be represented by, or the sale or
lease of which may have given rise to, any such right to payment or other debt,
obligation or liability, and (iv) all proceeds of any of the foregoing (the
foregoing, collectively, "Receivables"),
(b) (i) all inventory, (ii) all goods intended for sale or lease or
for display or demonstration, (iii) all work in process, (iv) all raw materials
and other materials and supplies of every nature and description used or which
might be used in connection with the manufacture, packing, shipping,
advertising, selling, leasing or furnishing of goods or services or otherwise
used or consumed in the conduct of business, and (v) all documents of title,
including bills of
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lading and warehouse receipts, and other documents evidencing and general
intangibles relating to any of the foregoing (the foregoing, collectively,
"Inventory"),
(c) any demand, time, savings, passbook, money market or like
depository account, and all certificates of deposit, maintained with a bank,
savings and loan association, credit union or like organization (other than an
account evidenced by a certificate of deposit that is an instrument under the
UCC) to which proceeds of Collateral are deposited (the foregoing, collectively,
"Deposit Accounts"),
(d) all certificated and uncertificated securities, all security
entitlements, all securities accounts, all commodity contracts and all commodity
accounts (EXCLUDING, HOWEVER, the equity securities of any Subsidiary), to the
extent acquired directly with proceeds of Collateral (the foregoing,
collectively, "Investment Property"),
(e) (i) any investment account maintained by or on behalf of a Loan
Party with the Agent or any Lender or any Affiliate of the Agent or any Lender,
(ii) any agreement governing such account, (iii) all cash proceeds and
Investment Property now or hereafter held by the Agent or any Lender or any
Affiliate of the Agent or any Lender on behalf of a Loan Party in connection
with such investment account and (iv) all documents evidencing and general
intangibles related to the foregoing (the foregoing, collectively, "Investment
Accounts"),
(f) all cash or other property deposited with the Agent or any Lender
or any Affiliate of the Agent or any Lender or which the Agent, for its benefit
and for the benefit of the Lenders, or any Lender or such Affiliate is entitled
to retain or otherwise possess as collateral pursuant to the provisions of this
Agreement or any of the Loan Documents or any agreement relating to any Letter
of Credit, including, without limitation, amounts on deposit in the Cash
Collateral Account,
(g) all goods and other property, whether or not delivered, (i) the
sale or lease of which gives or purports to give rise to any Receivable,
including, but not limited to, all merchandise returned or rejected by or
repossessed from customers, or (ii) securing any Receivable, including, without
limitation, all rights as an unpaid vendor or lienor (including, without
limitation, stoppage in transit, replevin and reclamation) with respect to such
goods and other properties,
(h) all mortgages, deeds to secure debt and deeds of trust on real or
personal property, guaranties, leases, security agreements and other agreements
and property which secure or relate to any Receivable or other Collateral or are
acquired for the purpose of securing and enforcing any item thereof,
(i) all files, correspondence, computer programs, tapes, disks and
related data processing software which contain information identifying or
pertaining to any of the Collateral or any Account Debtor or showing the amounts
thereof or payments thereon or otherwise necessary or helpful in the realization
thereon or the collection thereof,
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(j) any and all products and cash and non-cash proceeds of the
foregoing (including, but not limited to, any claims to any items referred to in
this definition and any claims against third parties for loss of, damage to or
destruction of any or all of the Collateral or for proceeds payable under or
unearned premiums with respect to policies of insurance) in whatever form,
including, but not limited to, cash, negotiable instruments and other
instruments for the payment of money, chattel paper, security agreements and
other documents.
"Commitment" means, as to each Lender, the amount set forth opposite
such Lender's name on ANNEX A hereto or, from and after the date hereof, as set
forth in the Register, representing such Lender's obligation, upon and subject
to the terms and conditions of this Agreement (including the applicable
provisions of SECTION 13.1), to make its Proportionate Share of Loans and to
purchase participations in Letters of Credit.
"Commitment Percentage" means, as to any Lender at the time of
determination, the percentage obtained by dividing such Lender's Commitment at
such time by the aggregate amount of the Commitments at such time.
"Consolidated Subsidiary" means each Subsidiary of ▇▇▇▇▇▇▇ the
financial results of which, at the time in question, are consolidated with those
of ▇▇▇▇▇▇▇ in accordance with GAAP.
"Contaminant" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, or any constituent of any such substance or waste.
"Controlled Disbursement Account" means one or more accounts
maintained by and in the name of the Borrowers (or any of them) with a
Disbursing Bank for the purposes of disbursing Loan proceeds and amounts
deposited thereto.
"Current Assets" means, with respect to any Person, the aggregate
amount of assets of such Person which should properly be classified as current
assets in accordance with GAAP, after deducting adequate reserves in each case
where a reserve is appropriate in accordance with GAAP.
"Current Liabilities" means, with respect to any Person, the aggregate
amount of all Liabilities of such Person which should properly be classified as
current liabilities in accordance with GAAP.
"Debt" means
(a) Indebtedness for money borrowed,
(b) Indebtedness, whether or not in any such case the same was for
money borrowed,
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(i) represented by notes payable, drafts accepted and
reimbursement obligations under letters of credit, including
Reimbursement Obligations, and similar instruments that represent
extensions of credit,
(ii) constituting obligations evidenced by bonds, debentures,
notes or similar instruments, or
(iii) upon which interest charges are customarily paid or that
was issued or assumed as full or partial payment for property (other
than trade credit that is incurred in the ordinary course of
business),
(c) Capitalized Lease Obligations, and
(d) Indebtedness that is such by virtue of CLAUSE (c) of the
definition thereof, but only to the extent that the obligations Guaranteed are
Debt.
The KS Preferred is not Debt for purposes of this Agreement or the other Loan
Documents.
"Default" means any of the events specified in SECTION 12.1 which with
the passage of time or giving of notice or both would constitute an Event of
Default.
"Default Margin" means 2.0%.
"Deposit Account" has the meaning set forth in the definition
"Collateral."
"Dilution Reserve" means an amount equal to the EXCESS of (i) non-cash
reductions to the Loan Parties' Receivables (on a combined basis) during a
12-month period prior to the date of determination as established by the Loan
Parties' records or by a field examination conducted by the Agent's or a
Co-Agent's employees or representatives, expressed as a percentage of the Loan
Parties' Receivables (on a combined basis) outstanding during the same period
OVER (ii) 5%, MULTIPLIED by an amount equal to Eligible Receivables as of the
date of determination.
"Disbursing Bank" means any commercial bank with which a Controlled
Disbursement Account is maintained after the Effective Date.
"Dollar" and "$" means freely transferable United States dollars.
"EBIT" for any specified accounting period means Net Income of ▇▇▇▇▇▇▇
and its Consolidated Subsidiaries on a consolidated basis for such period before
provision for net interest expense and income taxes.
"EBITDA" for any specified accounting period means EBIT for such
period PLUS depreciation and amortization expense deducted in computing EBIT,
with any part of such accounting period that occurred prior to the Effective
Date being adjusted on a pro forma basis in such manner as may be acceptable to
the Agent, for the effect of events occurring on or after the Effective Date,
including the CPW Acquisition, the ITCO Merger, the issuance of the Senior
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17
Notes and the Class B Stock, the repayment of Debt (including the Acquisition
Sub Debt, as defined in the Existing Loan Agreement), and any other event.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
in effect from time to time.
"ERISA Event" means (a) a "Reportable Event" as defined in Section
4043(c) of ERISA, but excluding any such event as to which the provision for 30
days' notice to the PBGC is waived under applicable regulations, (b) the filing
of a notice of intent to terminate a Benefit Plan subject to Title IV of ERISA
under a distress termination under Section 4041(c) of ERISA or the treatment of
an amendment to such a Benefit Plan as a termination under Section 4041(c) of
ERISA, (c) the institution of proceedings by the PBGC to terminate a Benefit
Plan subject to Title IV of ERISA or the appointment of a trustee to administer
any such Benefit Plan or an event or condition that might reasonably be expected
to constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Benefit Plan subject to Section
4042, (d) the imposition of any liability under Title IV of ERISA other than for
PBGC premiums due but not yet payable, (e) the filing of an application for a
minimum funding waiver under Section 412 of the Code, (f) a withdrawal by a
Borrower or any Related Company from a Benefit Plan subject to Section 4063 of
ERISA during a plan year in which it was a "substantial employer" as defined in
Section 4001(a)(2) of ERISA), (g) a Benefit Plan intending to qualify under
Section 401(a) of the Code losing such qualified status (other than because of a
Remediable Defect), (h) the failure to make a material required contribution to
a Benefit Plan, (i) a Borrower or any Related Company being in "default" (as
defined in Section 4219(c)(5) of ERISA) with respect to payments to a
Multiemployer Plan because of its complete or partial withdrawal (as described
in Section 4203 or 4205 of ERISA) from such Multiemployer or Plan, or (j) the
occurrence of a material non-exempt prohibited transaction within the meaning of
Section 4975 of the Code or Section 406 of ERISA with respect to any Benefit
Plan that is not cured within 60 days after a Borrower has knowledge thereof.
"Effective Date" means the later of:
(a) the Agreement Date, and
(b) the first date on which all of the conditions set forth in ARTICLE
5 shall have been fulfilled.
"Effective Interest Rate" means each rate of interest per annum on the
Loans in effect from time to time pursuant to the provisions of SECTIONS 4.1(a),
(b) AND (d).
"Eligible Assignee" means (i) a commercial bank organized under the
laws of the United States, or any State thereof, having total assets in excess
of $10,000,000,000; (ii) any commercial finance or asset based lending company
that is an Affiliate of a commercial bank having total assets in excess of
$10,000,000,000; and (iii) any Lender listed on the signature page of this
Agreement; PROVIDED that the representation contained in SECTION 13.2 hereof
shall be applicable with respect to any such Person.
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"Eligible Inventory" means items of Inventory of a Loan Party held for
sale in the ordinary course of the business of such Loan Party (but not
including packaging or shipping materials or maintenance supplies) that meet all
of the following requirements: (a) such Inventory is owned by a Loan Party, is
subject to the Security Interest, which is perfected as to such Inventory, and
is subject to no other Lien whatsoever other than a Permitted Lien; (b) such
Inventory consists of raw materials or finished goods and does not consist of
work-in-process, supplies or consigned goods; (c) such Inventory is in good
condition and meets all standards applicable to such goods, their use or sale
imposed by any governmental agency, or department or division thereof, having
regulatory authority over such matters; (d) such Inventory is currently either
usable or saleable, at prices approximating at least the cost thereof, in the
normal course of the applicable Loan Party's business; (e) such Inventory is not
obsolete or returned or repossessed or used goods taken in trade; (f) such
Inventory is located within the United States at one of the Permitted Inventory
Locations; (g) such Inventory is in the possession and control of a Loan Party
and not any third party and if located in a warehouse or other facility leased
by a Loan Party, the lessor has delivered to the Agent a waiver and consent in
form and substance satisfactory to the Agent or such facility is reflected in
the Rent Reserve; and (h) such Inventory is not determined by the Agent, in the
exercise of its reasonable credit judgment, to be ineligible for any reason.
"Eligible Receivable" means the unpaid portion of a Receivable payable
in Dollars to a Loan Party net of any returns, discounts, credits, or other
allowances or deductions agreed to by a Loan Party and net of any amounts owed
by a Loan Party to the Account Debtor on such Receivable, which Receivable meets
all of the following requirements: (a) such Receivable is owned by a Loan Party
and represents a complete bona fide transaction which requires no further act
under any circumstances on the part of any Loan Party to make such Receivable
payable by the Account Debtor; (b) such Receivable is not past due more than 60
days after its due date, which due date shall not be later than 90 days after
the invoice date; (c) such Receivable does not arise out of any transaction with
any Subsidiary, Affiliate, creditor, lessor or supplier of a Loan Party; (d)
such Receivable is not owing by an Account Debtor more than 15% of whose
then-existing accounts owing to the Loan Parties do not meet the requirements
set forth in CLAUSE (B) above; (e) if the Account Debtor with respect thereto is
located outside of the United States of America, Canada or Puerto Rico, the
goods which gave rise to such Receivable were shipped after receipt by the
applicable Loan Party from the Account Debtor of an irrevocable letter of credit
that has been confirmed by a financial institution acceptable to the Agent and
is in form and substance acceptable to the Agent, payable in the full face
amount of the face value of the Receivable in Dollars at a place of payment
located within the United States and has been duly assigned to the Agent, except
that up to $1,000,000 of such Receivables outstanding at any time that are
otherwise Eligible Receivables, may be included in Eligible Receivables without
such letter of credit support; (f) the Account Debtor with respect to such
Receivable is not located in a state which imposes conditions on the
enforceability of Receivables with which the applicable Loan Party has not
complied; (g) such Receivable is not subject to the Assignment of Claims Act of
1940, as amended from time to time, or any applicable law now or hereafter
existing similar in effect thereto, as determined in the sole discretion of the
Agent, or to any provision prohibiting its assignment or requiring notice of or
consent to such assignment; (h) the Loan Party that is the obligee thereof is
not in breach of any
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express or implied representation or warranty with respect to the goods the sale
of which gave rise to such Receivable; (i) the Account Debtor with respect to
such Receivable is not insolvent or the subject of any bankruptcy or insolvency
proceedings of any kind or of any other proceeding or action, threatened or
pending, which might, in the Agent's judgment, have a Materially Adverse Effect
on such Account Debtor; (j) the goods the sale of which gave rise to such
Receivable were shipped or delivered to the Account Debtor on an absolute sale
basis and not on a ▇▇▇▇ and hold sale basis, a consignment sale basis, a
guaranteed sale basis, a sale or return basis or on the basis of any other
similar understanding, and such goods have not been returned or rejected; (k)
such Receivable is not owing by an Account Debtor or a group of affiliated
Account Debtors whose then-existing accounts owing to the Loan Parties exceed in
face amount 20% of the Loan Parties' total Eligible Receivables; (l) such
Receivable is evidenced by an invoice or other documentation in form acceptable
to the Agent containing only terms normally offered by the applicable Loan
Party, and dated no later than the date of shipment; (m) such Receivable is a
valid, legally enforceable obligation of the Account Debtor with respect thereto
and is not subject to any present, or contingent (and no facts exist which are
the basis for any future), offset, deduction or counterclaim, dispute or other
defense on the part of such Account Debtor; (n) such Receivable is not evidenced
by chattel paper or an instrument of any kind; (o) other than mechanical
services performed by Winston or CPW, such Receivable does not arise from the
performance of services, including services under or related to any warranty
obligation of a Loan Party or out of service charges by a Loan Party or other
fees for the time value of money; (p) such Receivable is subject to the Security
Interest, which is perfected as to such Receivable, and is subject to no other
Lien whatsoever other than a Permitted Lien and the goods giving rise to such
Receivable were not, at the time of the sale thereof, subject to any Lien other
than a Permitted Lien; and (q) such Receivable is not determined by the Agent,
in the exercise of its reasonable credit judgment, to be ineligible for any
reason.
"Environmental Laws" means all federal, state, local and foreign laws
now or hereafter in effect relating to pollution or protection of the
environment, including laws relating to emissions, discharges, Releases or
threatened Releases of pollutants, Contaminants, chemicals, or industrial, toxic
or hazardous substances or wastes into the environment (including, without
limitation, ambient air, surface water, ground water, or land), or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, removal, transport, or handling of pollutants, Contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes, and any and
all regulations, notices or demand letters issued, entered, promulgated or
approved thereunder; such laws and regulations include but are not limited to
the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., as
amended; the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. Section 9601 et seq., as amended; the Toxic Substances Control
Act, 15 U.S.C. Section 2601 et seq., as amended; the Clean Air Act, 46 U.S.C.
Section 7401 et seq., as amended; and state and federal lien and environmental
cleanup programs.
"Environmental Lien" means a Lien in favor of any governmental entity
for (a) any liability under Environmental Laws or (b) damages arising from, or
costs incurred by such governmental entity in response to, a Release or
threatened Release of Contaminant into the environment.
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"Eurodollar Rate" means, with respect to any Eurodollar Rate Loan for
the Interest Period applicable thereto, a simple per annum interest rate
determined pursuant to the following formula:
Eurodollar Rate = Interbank Offered Rate
------------------------------------------------
1 - Eurodollar Reserve Percentage
The Eurodollar Rate shall be adjusted automatically as of the effective date of
any change in the Eurodollar Reserve Percentage.
"Eurodollar Rate Loan" means any Loan (or Loans made (or converted or
continued) by the Lenders Ratably on the same date for the same Interest
Period), bearing interest determined with reference to the Eurodollar Rate.
"Eurodollar Reserve Percentage" means that percentage (expressed as a
decimal) which is in effect from time to time under Regulation D of the Board of
Governors of the Federal Reserve System, as such regulation may be amended from
time to time, or any successor regulation, as the maximum reserve requirement
(including, without limitation, any basic, supplemental, emergency, special, or
marginal reserves) applicable with respect to Eurocurrency liabilities as that
term is defined in Regulation D (or against any other category of liabilities
that includes deposits by reference to which the interest rate of Eurodollar
Rate Loans is determined), whether or not any Lender has any Eurocurrency
liabilities subject to such reserve requirement at that time. Eurodollar Rate
Loans shall be deemed to constitute Eurocurrency liabilities and as such shall
be deemed subject to reserve requirements without benefits of credits for
proration, exceptions or offsets that may be available from time to time to any
Lender.
"Existing Loan Agreement" has the meaning specified in the Preliminary
Statement.
"Event of Default" means any of the events specified in SECTION 12.1,
PROVIDED that any requirement for notice or lapse of time or any other condition
has been satisfied.
"FUNB" means First Union National Bank, a national banking
association.
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve system arranged by federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by BankBoston from three federal funds brokers of
recognized standing selected by BankBoston.
"Financed Capex" means Capital Expenditures funded with the proceeds
of Debt (excluding Loans) or represented by Capitalized Lease Obligations.
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"Financial Officer" means the chief financial officer, Treasurer or
Controller of ▇▇▇▇▇▇▇.
"Financing Statements" means any and all Uniform Commercial Code
financing statements, in form and substance satisfactory to the Agent, executed
and delivered by a Loan Party to the Agent or assigned to the Agent by
BankBoston, naming the Agent, for the benefit of the Lenders, as secured party
or assignee and the applicable Loan Party as debtor, in connection with this
Agreement.
"Fiscal Quarter" means each three-month accounting period of ▇▇▇▇▇▇▇
ending March 31, June 30, September 30 and December 31 of each Fiscal Year.
"Fiscal Year" means the fiscal year of ▇▇▇▇▇▇▇ commencing on January 1
of each year and ending on December 31 of the same year.
"Fleet" means Fleet Capital Corporation, a Rhode Island corporation.
"Fleet Financing" means the Loan and Security Agreement dated as of
August 4, 1993, as amended and in effect on the Effective Date, to which Fleet
(f/k/a Barclays Business Credit, Inc.) and ITCO (f/k/a ITCO Tire Company) are
parties, and the transactions contemplated thereby.
"Funded Debt" means the outstanding principal amount of all Debt of
▇▇▇▇▇▇▇ and its Consolidated Subsidiaries on a consolidated basis (other than
the Funded Debt Exclusions).
"Funded Debt to EBITDA" means for any specified accounting period, the
ratio of Funded Debt as of the last day of such period to EBITDA for such
period. For purposes of computing such ratio, Loans shall be included in "Funded
Debt" in an amount equal to the average daily outstanding principal amount
thereof during the period of four consecutive Fiscal Quarters preceding the date
of determination (or, if a shorter period, during the period from the Effective
Date through the last day of the Fiscal Quarter ended on or immediately prior to
the date of determination).
"GAAP" means generally accepted accounting principles consistently
applied and maintained throughout the period indicated and, when used with
reference to a Borrower or any Subsidiary, consistent with the prior financial
practice of ▇▇▇▇▇▇▇, as reflected on the financial statements referred to in
SECTION 6.1(n); PROVIDED, HOWEVER, that, in the event that changes shall be
mandated by the Financial Accounting Standards Board or any similar accounting
authority of comparable standing, or shall be recommended by ▇▇▇▇▇▇▇'▇
independent public accountants, such changes shall be included in GAAP as
applicable to ▇▇▇▇▇▇▇ and its Consolidated Subsidiaries only from and after such
date as the Borrowers, the Required Lenders, the Agent and the Co-Agents shall
have amended this Agreement to the extent necessary to reflect any such changes
in the financial covenants set forth in ARTICLE 11.
"Governmental Approvals" means all authorizations, consents,
approvals, licenses and exemptions of, registrations and filings with, and
reports to, all governmental bodies, whether federal, state, local or foreign
national or provincial and all agencies thereof.
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"Guaranty", "Guaranteed" or to "Guarantee" as applied to any
obligation of another Person shall mean and include
(a) a guaranty (other than by endorsement of negotiable instruments
for collection in the ordinary course of business), directly or indirectly, in
any manner, of any part or all of such obligation of such other Person, and
(b) an agreement, direct or indirect, contingent or otherwise, and
whether or not constituting a guaranty, the practical effect of which is to
assure the payment or performance (or payment of damages in the event of
nonperformance) of any part or all of such obligation of such other Person
whether by
(i) the purchase of securities or obligations,
(ii) the purchase, sale or lease (as lessee or lessor) of
property or the purchase or sale of services primarily for the
purpose of enabling the obligor with respect to such obligation to
make any payment or performance (or payment of damages in the event
of nonperformance) of or on account of any part or all of such
obligation, or to assure the owner of such obligation against loss,
(iii) the supplying of funds to or in any other manner
investing in the obligor with respect to such obligation,
(iv) repayment of amounts drawn down by beneficiaries of
letters of credit, or
(v) the supplying of funds to or investing in a Person on
account of all or any part of such Person's obligation under a
Guaranty of any obligation or indemnifying or holding harmless, in
any way, such Person against any part or all of such obligation.
"▇▇▇▇▇▇▇" means The ▇.▇. ▇▇▇▇▇▇▇ Company, Inc., a North Carolina
corporation.
"ITCO" means ITCO Holding Company, Inc., a North Carolina corporation
and a Wholly Owned Subsidiary of ▇▇▇▇▇▇▇.
"ITCO Logistics" means ITCO Logistics Corporation, a Delaware
corporation, the surviving corporation of the ITCO Merger and a Wholly Owned
Subsidiary of ▇▇▇▇▇▇▇.
"ITCO Merger" means the merger of ITCO Merger Corporation, a Delaware
corporation and a Wholly Owned Subsidiary of ▇▇▇▇▇▇▇ formed for the purpose of
effecting such merger, with and into ITCO Logistics Corporation, a Delaware
corporation, with the result that upon completion ▇▇▇▇▇▇▇ owns of all of the
issued and outstanding capital stock of ITCO Logistics, and the consummation of
the other transactions contemplated to occur at or before the Effective Time
pursuant to (and as such term is defined in) the ITCO Merger Agreement.
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"ITCO Merger Agreement" means the Agreement and Plan of Merger dated
as of March 10, 1998 among ▇▇▇▇▇▇▇, ITCO Merger Corporation, a Delaware
corporation, ITCO Logistics Corporation, a Delaware corporation, and the
stockholders of said ITCO Logistics Corporation, as amended and in effect on the
Agreement Date and as thereafter amended in accordance with the provisions
thereof and hereof.
"ITCO Merger Documents" means the ITCO Merger Agreement and the other
instruments, certificates, opinions, agreements and other documents contemplated
thereby to be executed and delivered at or prior to the Effective Time (as
defined in the ITCO Merger Agreement), including, without being limited to, the
items listed on SCHEDULE 1.1E -- ITCO MERGER DOCUMENTS.
"Indebtedness" of any Person means, without duplication, all
Liabilities of such Person, and to the extent not otherwise included in
Liabilities, the following:
(a) all obligations for money borrowed or for the deferred purchase
price of property or services or in respect of drafts accepted or similar
instruments or reimbursement obligations under letters of credit,
(b) all obligations (including, during the noncancellable term of any
lease in the nature of a title retention agreement, all future payment
obligations under such lease discounted to their present value in accordance
with GAAP) secured by any Lien to which any property or asset owned or held by
such Person is subject, whether or not the obligation secured thereby shall have
been assumed by such Person,
(c) all obligations of other Persons which such Person has Guaranteed,
including, but not limited to, all obligations of such Person consisting of
recourse liability with respect to accounts receivable sold or otherwise
disposed of by such Person,
(d) all obligations of such Person in respect of Interest Rate
Protection Agreements, and
(e) in the case of the Borrowers (without duplication) all obligations
under the Loans and the Reimbursement Obligations.
"Initial Notice of Borrowing" means the Notice of Borrowing given by
the Borrowers with respect to the Initial Loans which shall also specify the
method of disbursement.
"Initial Loans" means the Loans made to the Borrowers on the Effective
Date pursuant to the Initial Notice of Borrowing.
"Interbank Offered Rate" for an Interest Period means the rate per
annum (rounded upwards, if necessary to the nearest 1/100 of 1%) appearing on
Telerate Page 3750 (or any successor page) as the London interbank offered rate
for deposits in Dollars at approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period for a term comparable to
such Interest Period. If for any reason such rate is not available, the term
"Interbank Offered Rate" shall mean, for any Eurodollar Rate Loan for any
Interest Period
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therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on the Reuters Screen LIBO Page as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; PROVIDED, HOWEVER, that if more than one
rate is specified on the Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates.
"Interest Payment Date" means the first day of each calendar month
commencing June 1, 1998.
"Interest Period" means with respect to each Eurodollar Rate Loan, the
period commencing on the date of the making or continuation of or conversion to
such Eurodollar Rate Loan and ending one, two, three, six or, if available in
the Agent's reasonable judgment, twelve months thereafter, as the Borrowers may
elect in the applicable Notice of Borrowing or Notice of Conversion or
Continuation; PROVIDED, that:
(i) any Interest Period that would otherwise end on a day that
is not a Business Day shall, subject to the provisions of CLAUSE
(iii) below, be extended to the next succeeding Business Day unless
such Business Day falls in the next calendar month, in which case
such Interest Period shall end on the immediately preceding Business
Day;
(ii) any Interest Period 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, subject to CLAUSE (iii) below, end on the last
Business Day of a calendar month;
(iii) any Interest Period that would otherwise end after the
Termination Date shall end on the Termination Date; and
(iv) notwithstanding CLAUSE (iii) above, no Interest Period
shall have a duration of less than one month and if any applicable
Interest Period would be for a shorter period, such Interest Period
shall not be available hereunder.
"Interest Rate Protection Agreement" shall mean an interest rate swap,
cap or collar agreement or similar arrangement between any Person and a
financial institution providing for the transfer or mitigation of interest risks
either generally or under specific contingencies.
"Inventory" has the meaning set forth in the definition "Collateral."
"Investment" means, with respect to any Person:
(a) the acquisition or ownership by such Person of any share of
capital stock, evidence of Indebtedness or other security issued by any other
Person,
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(b) any loan, advance or extension of credit to, or contribution to
the capital of, any other Person, excluding advances to employees in the
ordinary course of business for business expenses,
(c) any Guaranty of the obligations of any other Person,
(d) any other investment (other than the Acquisition of a Business
Unit) in any other Person, and
(e) any commitment or option to make any of the investments listed in
CLAUSES (a) through (d) above if, in the case of an option, the consideration
therefor exceeds $100.
"Investment Account" has the meaning set forth in the definition
"Collateral."
"Investment Property" has the meaning set forth in the definition
"Collateral."
"IRS" means the Internal Revenue Service.
"KS Preferred" means up to 7,000 shares of Series A Cumulative
Redeemable Preferred Stock and up to 4,500 shares of Series B Cumulative
Redeemable Preferred Stock of ▇▇▇▇▇▇▇ issued by ▇▇▇▇▇▇▇ and sold to The
Kelly-Springfield Tire Company, a division of The Goodyear Tire and Rubber
Company, pursuant to the KS Preferred Stock Purchase Agreement.
"KS Preferred Stock Purchase Agreement" means the Securities Purchase
Agreement dated May 7, 1997 between ▇▇▇▇▇▇▇ and The Kelly-Springfield Tire
Company, a division of The Goodyear Tire and Rubber Company, as modified in
accordance with the terms of the Existing Loan Agreement and this Agreement.
"Lender" means at any time any financial institution party to this
agreement at such time, including any such Person becoming a party hereto
pursuant to the provisions of ARTICLE 13 and including BankBoston as an issuer
of Letters of Credit and as lender of Non-Ratable Loans.
"Letter of Credit" means (i) each letter of credit issued by
BankBoston for the account of ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ under the Existing Loan
Agreement and outstanding on the Effective Date and (ii) any Letter of Credit
issued by BankBoston for the account of a Borrower or any Subsidiary pursuant to
ARTICLE 3.
"Letter of Credit Amount" means, at any time with respect to any
Letter of Credit, the aggregate maximum amount at any time available for drawing
under such Letter of Credit at such time (assuming all conditions to drawing are
satisfied).
"Letter of Credit Availability" means, as of the date of
determination, the aggregate face amount of Letter of Credit Obligations
available to be incurred hereunder at the time of determination in accordance
with SECTION 3.2, which shall be an amount equal to the lesser of (i) the Letter
of Credit Facility MINUS the Letter of Credit Obligations and (ii) the Loan
Availability, on such date.
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"Letter of Credit Facility" means a subfacility under the Commitments,
providing for the issuance of Letters of Credit as described in ARTICLE 3, up to
an aggregate amount of Letter of Credit Obligations at any one time outstanding
not to exceed $10,000,000.
"Letter of Credit Obligations" means, at any time, the sum of (a) the
Reimbursement Obligations at such time, PLUS (b) the aggregate Letter of Credit
Amount of Letters of Credit outstanding at such time, PLUS (c) the aggregate
Letter of Credit Amount of Letters of Credit the issuance of which has at such
time been authorized by the Agent and BankBoston pursuant to SECTION 3.4(b) but
that have not yet been issued, in each case as determined by the Agent.
"Letter of Credit Reserve" means, at any time, the aggregate Letter of
Credit Obligations at such time, other than Letter of Credit Obligations that
are fully secured by Cash Collateral.
"Liabilities" of any Person means all items (except for items of
capital stock, including specifically as to ▇▇▇▇▇▇▇ the KS Preferred, additional
paid-in capital or retained earnings, or of general contingency or deferred tax
reserves) which in accordance with GAAP would be included in determining total
liabilities as shown on the liability side of a balance sheet of such Person as
at the date as of which Liabilities are to be determined.
"Lien" as applied to the property of any Person means:
(a) any mortgage, deed to secure debt, deed of trust, lien, pledge,
charge, lease constituting a Capitalized Lease Obligation, conditional sale or
other title retention agreement, or other security interest, security title or
encumbrance of any kind in respect of any property of such Person, or upon the
income or profits therefrom,
(b) any arrangement, express or implied, under which any property of
such Person is transferred, sequestered or otherwise identified for the purpose
of subjecting the same to the payment of Indebtedness or performance of any
other obligation in priority to the payment of the general, unsecured creditors
of such Person,
(c) any Indebtedness which is unpaid more than 30 days after the same
shall have become due and payable and which if unpaid might by law (including,
but not limited to, bankruptcy and insolvency laws), or otherwise, be given any
priority whatsoever over the claims of general unsecured creditors of such
Person, except to the extent being disputed or contested by such Person by
appropriate proceedings and in respect of which any reserve required by GAAP has
been appropriately established and maintained,
(d) the filing of, or any agreement to give, any financing statement
under the UCC or its equivalent in any jurisdiction (excluding informational
financing statements relating to property leased by a Borrower or any
Subsidiary), and
(e) in the case of Real Estate, reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances.
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"Loan" means (i) each Revolving Credit Loan under and as defined in
the Existing Loan Agreement outstanding on the Effective Date, (ii) each advance
made to the Borrowers by a Lender pursuant to SECTION 2.1, including any
Non-Ratable Loan, and (iii) a specified principal amount of such advances
outstanding hereunder.
"Loan Account" and "Loan Accounts" have the meanings specified in
SECTION 4.5.
"Loan Availability" means, as of the date of determination, the
aggregate principal amount of Loans available to be borrowed by the Borrowers
hereunder at the time in accordance with SECTION 2.1, which shall be an amount
equal to the remainder derived by subtracting the aggregate principal amount of
Loans outstanding on such date from the Borrowing Base on such date.
"Loan Documents" means collectively this Agreement, the Notes, the
Security Documents and each other instrument, agreement or document executed by
a Loan Party or any Affiliate or Subsidiary of a Loan Party in connection with
this Agreement whether prior to, on or after the Effective Date and each other
instrument, agreement or document referred to herein or contemplated hereby.
"Loan Party" means any Borrower or Subsidiary Guarantor.
"Lockbox" means each U. S. Post Office Box specified in a Lockbox
Agreement.
"Lockbox Agreement" means each agreement between a Borrower and a
Clearing Bank concerning the establishment of a Lockbox for the collection of
Receivables.
"Margin Stock" means margin stock as defined in Section 221.1(h) of
Regulation U, as the same may be amended or supplemented from time to time.
"Materially Adverse Effect" means any act, omission, situation,
circumstance, event or undertaking which would, singly or in any combination
with one or more other acts, omissions, situations, circumstances, events or
undertakings, have, or reasonably be expected by the Agent to have, a materially
adverse effect upon (a) the business, assets, properties, liabilities, condition
(financial or otherwise), results of operations or business prospects of ▇▇▇▇▇▇▇
and its Consolidated Subsidiaries taken as a whole, (b) the value of the whole
or any material part of the Collateral, (c) the Security Interest or the
priority of the Security Interest, (d) the ability of ▇▇▇▇▇▇▇ and its
Consolidated Subsidiaries taken as a whole to perform any material obligation
under this Agreement or any other Loan Document, or (e) other than solely and
directly by reason of any release given or other action taken by the Agent or
any Lender, the legality, validity, binding effect, enforceability or
admissibility into evidence of any Loan Document or the ability of the Agent or
the Lenders to enforce in any material respect any rights or remedies under or
in connection with any Loan Document.
"Minimum Commitment" means $10,000,000.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
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"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which a Borrower or a Related Company is required
to contribute or has contributed within the immediately preceding six years.
"Net Amount" means, with respect to any Investments made by any
Person, the gross amount of all such Investments MINUS the aggregate amount of
all cash received and the fair value, at the time of receipt by such Person, of
all property received as payments of principal or premiums, returns of capital,
liquidating dividends or distributions, proceeds of sale or other dispositions
with respect to such Investments.
"Net Income" or "Net Loss" means, as applied to any Person for any
accounting period, the net income or net loss, as the case may be, of such
Person for the period in question after giving effect to deduction of or
provision for all operating expenses, all taxes and reserves (including reserves
for deferred taxes) and all other proper deductions, all determined in
accordance with GAAP, PROVIDED that there shall be excluded:
(a) the net income or net loss of any Person accrued prior to the date
it becomes a Subsidiary of, or is merged into or consolidated with, the Person
whose Net Income is being determined or a Subsidiary of such Person,
(b) the net income or net loss of any Person in which the Person whose
Net Income is being determined or any Subsidiary of such Person has an ownership
interest, except, in the case of net income, to the extent that any such income
has actually been received by such Person or such Subsidiary in the form of cash
dividends or similar distributions,
(c) any restoration of any contingency reserve, except to the extent
that provision for such reserve was made out of income during such period,
(d) any net gains or losses on the sale or other disposition, not in
the ordinary course of business, of Investments, Business Units and other
capital assets, provided that there shall also be excluded any related charges
for taxes thereon,
(e) any net gain arising from the collection of the proceeds of any
insurance policy,
(f) any write-up of any asset, and
(g) any other extraordinary item.
"Net Outstandings" of any Lender means, at any time, the sum of (a)
all amounts paid by such Lender (other than pursuant to SECTION 14.7) to the
Agent in respect of Loans by such Lender, MINUS (b) all amounts received by the
Agent and paid by the Agent to such Lender for application, pursuant to this
Agreement, to reduction of the outstanding principal balance of the outstanding
Loans of such Lender.
"Net Worth" means, with respect to any Person, such Person's total
shareholder's equity (including specifically as to ▇▇▇▇▇▇▇ the KS Preferred and
including any other capital
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stock, additional paid-in capital and retained earnings, after deducting
treasury stock) which would appear as such on a balance sheet of such Person
prepared in accordance with GAAP.
"Non-Ratable Loan" means a Base Rate Loan made by BankBoston in
accordance with the provisions of SECTION 4.8(c).
"Note" means each Amended and Restated Promissory Note made by the
Borrowers payable to the order of a Lender evidencing the obligation of the
Borrowers to pay the aggregate unpaid principal amount of the Loans made to it
by such Lender (and any promissory note or notes that may be issued from time to
time in substitution, renewal, extension, replacement or exchange therefor
whether payable to such Lender or to a different Lender in connection with a
Person becoming a Lender after the Effective Date or otherwise) substantially in
the form of EXHIBIT A hereto, with all blanks properly completed, either as
originally executed or as the same may from time to time be supplemented,
modified, amended, renewed, extended or refinanced.
"Notice of Borrowing" means a written notice, or telephonic notice
followed by a confirming same-day written notice, requesting a Borrowing of Base
Rate Loans or Eurodollar Rate Loans, which is given by telex or facsimile
transmission in accordance with the applicable provisions of SECTION 2.2 and
which specifies (i) the amount of the requested Borrowing, (ii) the date of the
requested Borrowing, and (iii) if the requested Borrowing is of Eurodollar Rate
Loans, the duration of the applicable Interest Period.
"Notice of Conversion or Continuation" has the meaning specified in
SECTION 4.13.
"Overadvance" means at any time the amount by which the aggregate
outstanding principal amount of Loans exceeds the Borrowing Base.
"Overadvance Condition" means and is deemed to exist any time the
aggregate outstanding principal amount of Loans exceeds the Borrowing Base.
"Overadvance Loan" means a Base Rate Loan made at a time an
Overadvance Condition exists or which results in an Overadvance Condition.
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor agency.
"Permitted Inventory Locations" means each location listed on SCHEDULE
6.1(u) and from time to time each other location within the continental United
States which ▇▇▇▇▇▇▇ has notified the Agent is a location at which Inventory of
a Loan Party is maintained together with such evidence as the Agent may
reasonably require that the Inventory at such location is subject to the
Security Interest and to no other Lien other than Permitted Liens.
"Permitted Investments" means
(a) Investments of ▇▇▇▇▇▇▇ and its Consolidated Subsidiaries in:
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(i) cash and Cash Equivalents in an aggregate amount not greater than
$5,000,000,
(ii) sales of inventory on credit in the ordinary course of business,
(iii) shares of capital stock, evidence of Debt or other security
acquired in consideration for or as evidence of past-due or restructured
Receivables in an aggregate face amount of such Receivables as to ▇▇▇▇▇▇▇
and its Subsidiaries at any time not to exceed $2,500,000,
(iv) any Loan Party, and
(v) those items described on SCHEDULE 1.1A - PERMITTED INVESTMENTS;
and
(b) Investments of any Loan Party in any Subsidiary that is not a Loan
Party to the extent in existence on the Effective Date, as such Investments may
increase by reason of the profitable operations of such Subsidiary.
"Permitted Liens" means:
(a) Liens securing taxes, assessments and other governmental charges
or levies (excluding any Lien imposed pursuant to any of the provisions of
ERISA) or the claims of materialmen, mechanics, carriers, warehousemen or
landlords for labor, materials, supplies or rentals incurred in the ordinary
course of business, but (i) in all cases only if payment shall not at the time
be required to be made in accordance with SECTION 9.6, and (ii) in the case of
warehousemen or landlords, only if such liens are junior to the Security
Interest in any of the Collateral or the relevant premises are reflected in the
Rent Reserve,
(b) Liens consisting of deposits or pledges made in the ordinary
course of business in connection with, or to secure payment of, obligations
under workers' compensation, unemployment insurance or similar legislation or
under payment or performance bonds,
(c) Liens constituting encumbrances in the nature of zoning
restrictions, easements, and rights or restrictions of record on the use of real
property, which do not materially detract from the value of such property or
impair the use thereof in the business of the applicable Borrower,
(d) Liens shown on SCHEDULE 1.1B - PERMITTED LIENS and any additional
Liens exclusively affecting tire Inventory of a Loan Party, for the benefit of
the vendor of such Inventory, as security for the payment or repayment of
amounts (including trade accounts) owing by such Loan Party to such vendor),
(e) Liens of the Agent, for the benefit of the Lenders, arising under
this Agreement and the other Loan Documents,
(f) Liens on Margin Stock,
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(g) Liens in existence immediately prior to the Effective Date that
are satisfied in full and released on the Effective Date or promptly thereafter
by application of the proceeds of the Loans or cash on hand,
(h) the Lien of FUNB as Trustee under the Senior Note Indenture
pursuant to Section 7.07 thereof on certain property in its possession as
security for payment of fees and other amounts owing to it in its capacity as
such Trustee, and
(i) additional Liens in accordance with the provisions of SECTION
11.9.
"Person" means an individual, corporation, limited liability company,
partnership, association, trust or unincorporated organization, or a government
or any agency or political subdivision thereof.
"Projections" means the forecasted (a) balance sheets, (b) income
statements and (c) cash flow statements of the Borrowers for each Fiscal Year,
prepared annually by the Borrowers on a consolidated monthly basis, together
with appropriate supporting details (including stand-alone forecasts for each
Borrower) and a statement of underlying assumptions.
"Proportionate Share" or "Ratable Share" or "Ratable" (and with
corollary meaning, "Ratably") means, as to a Lender, such Lender's share of an
amount in Dollars or of other property at the time of determination equal to (i)
the Commitment Percentage of such Lender, or (ii) if the Commitments are
terminated, the percentage obtained by dividing the principal amount of the
Loans then owing to such Lender by the total principal amount of all Loans then
owing to all Lenders, or (iii) if no Loans are outstanding, the percentage
obtained by dividing such Lender's participation in the total Letter of Credit
Obligations then outstanding by the total Letter of Credit Obligations then
outstanding.
"Proprietary Rights" means as to any Person, such Person's rights,
title and interest in and to intellectual property and all other rights
(including rights as a licensee thereof) under any patents, trademarks, trade
names, tradestyles, copyrights and all extensions, renewals, reissues,
divisions, continuations, and continuations-in-part of any of the foregoing, and
all rights to ▇▇▇ for past, present and future infringement of any of the
foregoing.
"Purchase Money Lien" means any Lien securing Debt created to finance
the payment of all or any part of the purchase price (not in excess of the fair
market value thereof) of any tangible personal property (other than Inventory)
and incurred at the time of or within 10 days prior to or after the acquisition
of such tangible asset, but only if such Lien shall at all times be confined
solely to the property (other than Inventory) the purchase price of which was
financed through the incurrence of such Debt.
"Purchase Price" has the meaning specified in SECTION 11.4.
"Real Estate" means all real property now or hereafter owned or leased
by ▇▇▇▇▇▇▇ or any Subsidiary, including, without limitation, all fees,
leaseholds and future interests.
"Receivables" has the meaning set forth in the definition
"Collateral."
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"Register" has the meaning specified in SECTION 13.1(d).
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System (or any successor), as the same may be amended or
supplemented from time to time.
"Reimbursement Agreement" means, with respect to a Letter of Credit,
such form of application therefor and form of reimbursement agreement therefor
(whether in a single document or several documents) as BankBoston may employ in
the ordinary course of business for its own account, with such modifications
thereto as may be agreed upon by BankBoston and the Borrowers, PROVIDED that
such application and agreement and any modifications thereto are not
inconsistent with the terms of this Agreement.
"Reimbursement Obligations" means the unsatisfied reimbursement or
repayment obligations of the Borrowers to BankBoston pursuant to SECTION 3.6 or
(but without duplication) pursuant to a Reimbursement Agreement with respect to
amounts that have been drawn under Letters of Credit.
"Related Company" means any (i) corporation which is a member of the
same controlled group of corporations (within the meaning of Section 414(b) of
the Code) as ▇▇▇▇▇▇▇; (ii) partnership or other trade or business (whether or
not incorporated) under common control (within the meaning of Section 414(c) of
the Code) with ▇▇▇▇▇▇▇; or (iii) member of the same affiliated service group
(within the meaning of Section 414(m) of the Code) as ▇▇▇▇▇▇▇, any corporation
described in CLAUSE (i) above or any partnership, trade or business described in
CLAUSE (ii) above.
"Release" means release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the indoor
or outdoor environment or into or out of any property, including the movement of
Contaminants through or in the air, soil, surface water or groundwater.
"Remediable Defect" means an operational defect or violation that
could disqualify a Benefit Plan intended to qualify under Section 401(a) (and,
if applicable, Section 401(k)) of the Code and that can be remedied under the
IRS's Closing Agreement Program, Voluntary Compliance Resolution Program, or
Administrative Policy Regarding Self-Correction, without in any case a payment
to any governmental authority with respect to such Benefit Plan and any other
Benefit Plan of more than $100,000 in any calendar year.
"Remedial Action" means actions required to (i) clean up, remove,
treat or in any other way address Contaminants in the indoor or outdoor
environment; (ii) prevent the Release or threat of Release or minimize the
further Release of Contaminants so they do not migrate or endanger or threaten
to endanger public health or welfare or the indoor or outdoor environment; or
(iii) perform pre-remedial studies and investigations and post-remedial
monitoring and care.
"Rent Reserve" means an amount approximately equal to the aggregate
monthly rental payable by the Borrowers on all leased Real Estate in respect of
which landlord's or
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warehouseman's waivers, in form and substance acceptable to the Agent, are not
in effect or such greater amount as the Agent may, in its reasonable credit
judgment, determine to be appropriate after notice to the Borrowers.
"Required Lenders" means, at any time, any combination of two or more
Lenders whose Commitment Percentages at such time aggregate in excess of 50%.
"Restricted Distribution" by any Person means (a) its retirement,
redemption, purchase, or other acquisition or retirement for value of any
capital stock or other equity securities (except equity securities acquired on
the conversion or exercise thereof into other equity securities of such Person)
or partnership interests issued by such Person, (b) the declaration or payment
of any dividend or distribution in cash or property on or with respect to any
such securities (other than dividends payable solely in shares of its capital
stock) or partnership interests, EXCLUDING, HOWEVER, any such dividend,
distribution or payment to a Loan Party by any of its Subsidiaries, (c) any
Investment (other than a Permitted Investment) by such Person in, the holder of
any of such securities or partnership interests, and (d) any other payment by
such Person in respect of such securities or partnership interests.
"Restricted Payment" means (a) any redemption or prepayment or other
retirement, prior to the stated maturity thereof or prior to the due date of any
regularly scheduled installment or amortization payment with respect thereto, of
any Debt (other than the Loans) or of any Indebtedness that is junior and
subordinate to the Secured Obligations, (b) any payment on or with respect to
any Subordinated Debt other than in accordance with the subordination provisions
thereof, (c) the payment by any Person of the principal amount of or interest on
any Indebtedness (other than trade accounts payable and employee compensation in
the ordinary course of business, consistent with past practices and non-compete
payments or bonuses in accordance with the provisions of the CPW Acquisition
Agreement) owing to an Affiliate of such Person or to any Affiliate of any such
Affiliate and (d) the payment of any management, consulting or similar fee by
any Person to any Affiliate of such Person.
"S&P" means Standard & Poor's Ratings Group.
"Schedule of Inventory" means a schedule delivered by the Borrowers to
the Agent pursuant to the provisions of SECTION 8.12(b).
"Schedule of Receivables" means a schedule delivered by the Borrowers
to the Agent pursuant to the provisions of SECTION 8.12(a).
"Secured Obligations" means, in each case whether now in existence or
hereafter arising,
(a) the principal of and interest on the Loans,
(b) the Reimbursement Obligations and all other obligations of the
Borrowers to the Agent or any Lender arising in connection with the issuance of
Letters of Credit,
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(c) all obligations of the Borrowers to any Lender or any Affiliate of
a Lender under any Interest Rate Protection Agreement, and
(d) all indebtedness, liabilities, obligations, covenants and duties
of the Borrowers or any Subsidiary to the Agent or to the Lenders or to any
Affiliate of the Agent or any Lender of every kind, nature and description
arising under or in respect of this Agreement, the Notes or any of the other
Loan Documents, whether direct or indirect, absolute or contingent, due or not
due, contractual or tortious, liquidated or unliquidated, and whether or not
evidenced by any note, and whether or not for the payment of money, including
without limitation, fees required to be paid pursuant to ARTICLE 4 and expenses
required to be paid or reimbursed pursuant to SECTION 15.2.
"Security Documents" means the Financing Statements, the Subsidiary
Security Agreements and each other writing executed and delivered by a Loan
Party or any other Person securing the Secured Obligations or assuring rights of
the Agent or the Lenders in respect of the Collateral.
"Security Interest" means the Liens of the Agent, for the benefit of
itself as the Agent and the Lenders and Affiliates of the Lenders, on and in the
Collateral effected hereby or by any of the Security Documents or pursuant to
the terms hereof or thereof.
"Senior Note Indenture" means the Indenture dated as of May 15, 1998
between ▇▇▇▇▇▇▇ and First Union National Bank, Trustee.
"Senior Notes" means ▇▇▇▇▇▇▇'▇ 10% Senior Notes due 2008 in the
original principal amount of $100,000,000, issued pursuant to the Senior Note
Indenture, including any "Exchange Securities" and "Private Exchange Securities"
issued (and as defined) thereunder.
"Settlement Date" means each Business Day after the Effective Date
selected by the Agent in its sole discretion subject to and in accordance with
the provisions of SECTION 4.8(b)(i) as of which a Settlement Report is delivered
by the Agent and on which settlement is to be made among the Lenders in
accordance with the provisions of SECTION 4.8.
"Settlement Report" means each report substantially in the form of
EXHIBIT C or as the Agent and the Lenders may otherwise agree, prepared by the
Agent and delivered to each Lender and setting forth, among other things, as of
the Settlement Date indicated thereon and as of the next preceding Settlement
Date, the aggregate principal balance of all Loans outstanding, each Lender's
Proportionate Share thereof, each Lender's Net Outstandings and all Non-Ratable
Loans made, and all payments of principal and interest in respect of Loans and
of fees received by the Agent from the Borrower during the period beginning on
such next preceding Settlement Date and ending on such Settlement Date.
"Subordinated Debt" means any Debt of ▇▇▇▇▇▇▇ or any Subsidiary that
is subordinated to the Secured Obligations on terms and conditions acceptable to
the Required Lenders in their sole discretion.
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"Subsidiary" (a) when used to determine the relationship of a Person
to another Person, means a Person of which an aggregate of 50% or more of the
stock of any class or classes or 50% or more of other ownership interests is
owned of record or beneficially by such other Person, or by one or more
Subsidiaries of such other Person, or by such other Person and one or more
Subsidiaries of such Person,
(i) if the holders of such stock, or other ownership
interests, (A) are ordinarily, in the absence of contingencies,
entitled to vote for the election of a majority of the directors (or
other individuals performing similar functions) of such Person, even
though the right so to vote has been suspended by the happening of
such a contingency, or (B) are entitled, as such holders, to vote
for the election of a majority of the directors (or individuals
performing similar functions) of such Person, whether or not the
right so to vote exists by reason of the happening of a contingency,
or
(ii) in the case of such other ownership interests, if such
ownership interests constitute a majority voting interest and
(b) when used without other designation of ownership, means a
Subsidiary of ▇▇▇▇▇▇▇.
"Subsidiary Guarantor" means ITCO Tire Company, Inc., ITCO Tire
Company of Georgia, Inc., Phoenix Racing, Inc. and each other Subsidiary of
▇▇▇▇▇▇▇ that is not a Borrower and that has, at the Agent's request or with its
consent, executed and delivered a Subsidiary Guaranty and a Subsidiary Security
Agreement.
"Subsidiary Guaranty" means a Guaranty of the Secured Obligations
substantially in the form of EXHIBIT F attached hereto or as otherwise
acceptable to the Agent and ▇▇▇▇▇▇▇.
"Subsidiary Security Agreement" means one or more agreements in form
and substance satisfactory to the Agent in its reasonable judgment, sufficient
to create in favor of the Agent a security interest in all of the Receivables,
Inventory and proceeds thereof of any Subsidiary Guarantor.
"Termination Date" means May 20, 2003, such earlier date as all
Secured Obligations shall have been irrevocably paid in full and the Commitments
shall have been terminated, or such later date to which the same may be extended
pursuant to the provisions of SECTION 2.5.
"Type" when used in respect of any Loan or Borrowing, shall refer to
the rate by reference to which interest on such Loan or on the Loans comprising
such Borrowing is determined.
"UCC" means the Uniform Commercial Code as in effect from time to time
in the applicable jurisdiction.
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"Unfunded Vested Accrued Benefits" means at any time, with respect to
any Benefit Plan that is a pension plan within the meaning of Section 3(2) of
ERISA, the amount (if any) by which (a) the present value of all vested
nonforfeitable benefits under such Benefit Plan exceeds (b) the fair market
value of all such Benefit Plan assets allocable to such benefits, as determined
using the valuation date and such reasonable actuarial assumptions and methods
as are specified in the Schedule B (Actuarial Information) to the most recent
Annual Report (Form 5500) filed with respect to such Benefit Plan.
"Unused Commitments" has the meaning specified in SECTION 4.2(b).
"Warrant" means the warrant to purchase common stock of ▇▇▇▇▇▇▇ issued
to The 1818 Mezzanine Fund II, L.P. pursuant to the Senior Subordinated Note and
Warrant Purchase Agreement dated as of May 7, 1997 between ▇▇▇▇▇▇▇ and said
Fund, as amended in accordance with the provisions of the Existing Loan
Agreement and this Agreement.
"Wholly Owned Subsidiary" when used to determine the relationship of a
Subsidiary to a Person means a Subsidiary all of the issued and outstanding
shares (other than directors' qualifying shares) of the capital stock of which
shall at the time be owned by such Person or one or more of such Person's Wholly
Owned Subsidiaries or by such Person and one or more of such Person's Wholly
Owned Subsidiaries.
"Winston" means ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, Inc., a California corporation and a
Wholly Owned Subsidiary of ▇▇▇▇▇▇▇.
"Winston Purchase Agreement" means the Stock Purchase Agreement dated
as of April 9, 1997, between ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ as trustee of The ▇▇▇
▇. ▇▇▇▇▇▇▇ Separate Property Trust dated July 26, 1989, the Trust dated December
20, 1976 f/b/o ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, the Trust dated December 20, 1976 f/b/o
▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇, the Trust dated December 21, 1982 f/b/o ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, the Trust dated December 21, 1982 f/b/o ▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇, The ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇, ▇▇. Separate Property Trust dated October 5, 1993 and as Sellers'
Representative (as defined in said Agreement) and ▇▇▇▇▇▇ ▇. Bonburg.
"Year 2000 Compliant" as to any Person means that all software,
embedded microchips and other processing capabilities utilized by, and material
to the business operations or financial condition of, such Person are able to
interpret and manipulate data on and involving all calendar dates correctly and
without causing any abnormal ending scenario, including in relation to dates in
and after the calendar year 2000.
SECTION 1.2 General Interpretive Rules.
(a) All terms of an accounting nature not specifically defined herein
shall have the meaning ascribed thereto by GAAP.
(b) The terms accounts, chattel paper, contract rights, documents,
equipment, instruments, general intangibles, inventory and proceeds, as and when
used in this Agreement or the Security Documents, shall have the meanings given
those terms in the UCC.
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(c) Unless otherwise specified, the words "hereof," "herein,"
"hereunder" and words of similar import, when used in this Agreement, refer to
this Agreement as a whole and not to any particular provision, section or
subsection of this Agreement.
(d) Wherever from the context it appears appropriate, each term stated
in either the singular or plural shall include the singular and plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, the feminine and the neuter. Words denoting individuals include
corporations and vice versa.
(e) References to any legislation or statute or code, or to any
provisions of any legislation or statute or code, shall include any modification
or reenactment of, or any legislative, statutory or code provision substituted
for, such legislation, statute or code or provision thereof.
(f) References to any document or agreement (including this Agreement)
shall include references to such document or agreement as amended, novated,
supplemented, modified or replaced from time to time, so long as and to the
extent that such amendment, novation, supplement, modification or replacement is
not prohibited by the terms of this Agreement or is consented to, if such
consent is required, in accordance with the applicable provisions of this
Agreement.
(g) Except where specifically restricted in a Loan Document,
references to any Person include its successors or permitted substitutes and
assigns permitted or not prohibited under such Loan Document.
(h) References to the time of day are to the time of day in the city
in which the Agent's Office is located.
(i) The terms "payment", "prepayment", "distribution" and similar
terms used in the definitions of "Restricted Distribution" and "Restricted
Payment" and in SECTION 11.6, shall include payment by means of the transfer of
funds or of property and, in the event of a transfer of property, the payment
shall be deemed to be in an amount equal to the greater of the fair market value
and the book value of the property at the time of the transfer.
(j) Titles of Articles and Sections in this Agreement are for
convenience only, do not constitute part of this Agreement and neither limit nor
amplify the provisions of this Agreement, and all references in this Agreement
to Articles, Sections, subsections, paragraphs, clauses, subclauses, Schedules
or Exhibits shall refer to the corresponding Article, Section, subsection,
paragraph, clause or subclause of, or Schedule or Exhibit attached to, this
Agreement, unless specific reference is made to the articles, sections or other
subdivisions or divisions of, or to schedules or exhibits to, another document
or instrument.
(k) Whenever from the context it appears appropriate, the term "Loan",
including such terms as used as part of a defined term including the term
"Loan", shall mean and include a Loan made by all Lenders to the Borrowers as
well as a Lender's Proportionate Share of any Loan.
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(l) Whenever the phrase "to the knowledge of the Borrower" or words of
similar import relating to the knowledge of the Borrowers (or any of them) are
used herein, such phrase shall mean and refer to the actual knowledge of the
President or chief financial officer of such Borrower.
(m) Unless otherwise specified herein, any Lien created or purported
to be created hereby or by or pursuant to any Loan Documents in favor of the
Agent and each payment made to the Agent, is and shall be deemed to have been
created in favor of the Agent, for its benefit as the Agent and for the Ratable
benefit of the Lenders, or made to and received by the Agent for the Ratable
benefit of the Lenders, as the case may be.
SECTION 1.3 Exhibits and Schedules. All Exhibits and Schedules
attached hereto are by reference made a part hereof.
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ARTICLE 2
COMMITMENTS
SECTION 2.1 Loans. Upon the terms and subject to the conditions of, and
in reliance upon the representations and warranties made under, this Agreement,
each Lender agrees, severally, but not jointly, to make Loans to the Borrowers
from time to time from the Effective Date to but not including the Termination
Date, as requested or deemed requested by the Borrowers in accordance with the
terms of SECTION 2.2, in amounts equal to such Lender's Proportionate Share of
each Loan requested or deemed requested hereunder up to an aggregate amount at
any one time outstanding equal to such Lender's Proportionate Share of the
Borrowing Base; PROVIDED, HOWEVER, that no Borrowing shall exceed the Loan
Availability at the time and the aggregate principal amount of all outstanding
Loans (after giving effect to the Loans requested) shall not exceed the
Borrowing Base. It is expressly understood and agreed that the Lenders may and
at present intend to use the Borrowing Base as a maximum ceiling on Loans made
to the Borrower; PROVIDED, HOWEVER, that it is agreed that should the aggregate
outstanding amount of such Loans exceed the ceiling so determined or any other
limitation set forth in this Agreement, such Loans shall nevertheless constitute
Secured Obligations and, as such, shall be entitled to all benefits thereof and
security therefor. The principal amount of any Loans which is repaid may be
reborrowed by the Borrowers, subject to the terms and conditions of this
Agreement, in accordance with the terms of this SECTION 2.1. The Agent's and
each Lender's books and records reflecting the date and the amount of each Loan
and each repayment of principal thereof shall constitute prima facie evidence of
the accuracy of the information contained therein, subject to the provisions of
SECTION 4.5.
SECTION 2.2 Manner of Borrowing. Borrowings shall be made as follows:
(a) Requests for Borrowing.
(i) Base Rate Loans. A request for the Borrowing of Base Rate
Loans shall be made, or shall be deemed to be made, in the following
manner:
(A) with respect to the Initial Loans, which shall be
Base Rate Loans, the Borrowers' representative shall give the
Agent the Initial Notice of Borrowing at least two Business
Days prior to the proposed date of the Borrowing, and, with
respect to each subsequent Borrowing, the Borrowers may
request a Base Rate Loan by giving the Agent a Notice of
Borrowing, before noon on the proposed date of the Borrowing,
PROVIDED that if such notice is received after noon on the
proposed date of Borrowing, the proposed Borrowing may be
postponed by the Agent to the next Business Day;
(B) whenever a check or other item is presented to a
Disbursing Bank for payment against a Controlled Disbursement
Account in an amount greater than the then available balance
in such account, such Disbursing
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Bank shall, and is hereby irrevocably authorized by the
Borrowers to, give the Agent notice thereof, which notice
shall be deemed to be a request for a Base Rate Loan on the
date of such notice in an amount equal to the excess of such
check or other item over such available balance, and such
request shall be irrevocable;
(C) unless payment is otherwise made by the
Borrowers, the becoming due of any amount required to be paid
under this Agreement or any of the Notes as interest shall be
deemed to be a request for a Base Rate Loan on the due date in
the amount required to pay such interest, and such request
shall be irrevocable;
(D) unless payment is otherwise made by the
Borrowers, a becoming due of any other Secured Obligation
shall be deemed to be a request for a Base Rate Loan on the
due date in the amount then so due, and such request shall be
irrevocable; and
(E) the receipt by the Agent of notification from
BankBoston to the effect that a drawing has been made under a
Letter of Credit and that the Borrowers have failed to
reimburse BankBoston therefor in accordance with the terms of
the Letter of Credit, the Reimbursement Agreement and ARTICLE
3, shall be deemed to be a request for a Base Rate Loan on the
date such notification is received in the amount of such
drawing which is so unreimbursed.
(ii) Eurodollar Rate Loans. At any time after the Effective
Date, and so long as no Default or Event of Default has occurred and is
continuing, the Borrowers may request a Eurodollar Rate Loan by giving
the Agent a Notice of Borrowing (which notice shall be irrevocable) not
later than 11:30 a.m. on the date three Business Days before the day on
which the requested Eurodollar Rate Loan is to be made. The Borrowers
may direct the Agent to apply the proceeds of a Eurodollar Rate Loan to
Secured Obligations as described in SECTIONS 2.2(a)(i)(B), (C), (D) and
(E) and the Agent shall comply with such direction to the extent that
proceeds of a Borrowing of Eurodollar Rate Loans are available to be so
applied and in such case, no duplicative Borrowing of Base Rate Loans
will be deemed to have been requested.
(iii) Notification of Lenders. In the case of each Eurodollar
Rate Loan and, unless the Agent has elected periodic settlements
pursuant to SECTION 4.8, in the case of each Base Rate Loan, the Agent
shall promptly notify the Lenders of any notice of Borrowing given or
deemed given pursuant to this SECTION 2.2(a) by 12:00 noon on the
proposed Borrowing date (in the case of Base Rate Loans) or by 3:00
p.m. three Business Days before the proposed Borrowing date (in the
case of Eurodollar Rate Loans). If the Agent does so promptly notify
the Lenders, then not later than 1:30 p.m. on the proposed Borrowing
date, each Lender will make available to the Agent, for the account of
the Borrowers, at the Agent's Office in
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funds immediately available to the Agent, such Lender's Proportionate
Share of the Base Rate Loan or Eurodollar Rate Loan, as the case may
be.
(b) Disbursement of Loans. The Borrowers hereby irrevocably authorize
the Agent to disburse the proceeds of each Borrowing requested, or deemed to be
requested, pursuant to this SECTION 2.2(a) as follows:
(i) the proceeds of each Borrowing requested under SECTIONS
2.2(a)(i)(A) (other than the Borrowing of the Initial Loans) or (B) or
2.2(a)(ii) shall be disbursed by the Agent in Dollars in immediately
available funds by wire transfer to a Controlled Disbursement Account
or, in the absence of a Controlled Disbursement Account, by wire
transfer to such other account as may be agreed upon by the Borrowers
and the Agent from time to time, and the proceeds of the Initial Loans
under SECTION 2.2(a)(i)(A) shall be disbursed in accordance with the
Initial Notice of Borrowing.
(ii) the proceeds of each Borrowing deemed requested under
SECTION 2.2(a)(i)(C) or (D) shall be disbursed by the Agent by way of
direct payment of the relevant Secured Obligation, and
(iii) the proceeds of each Borrowing deemed requested under
SECTION 2.2(a)(i)(E) shall be disbursed by the Agent directly to
BankBoston on behalf of the Borrowers for application to the
Reimbursement Obligations.
SECTION 2.3 Repayment. The Loans will be repaid as follows:
(a) The outstanding principal amount of all Loans is due and payable,
and shall be repaid by the Borrowers, as their joint and several obligation, in
full, not later than the Termination Date;
(b) If at any time the aggregate outstanding unpaid principal amount of
the Loans exceeds the Borrowing Base in effect at such time, but subject to the
provisions of SECTION 4.7(d), the Borrowers shall repay the Loans in an amount
sufficient to reduce the aggregate unpaid principal amount of the Loans by an
amount equal to such excess, together with accrued and unpaid interest on the
amount so repaid to the date of repayment; and
(c) The Borrowers hereby instruct the Agent to repay the Loans
outstanding on any day in an amount equal to the amount received by the Agent on
such day pursuant to SECTION 8.1(c); PROVIDED that payments received in excess
of outstanding Loans or payments received (when no Default or Event of Default
exists) on account of Eurodollar Rate Loans which would otherwise result in
prepayment of such Loans prior to the end of the Interest Period applicable
thereto may, upon the instruction of the Borrowers to the Agent not later than
1:00 p.m. on any Business Day, be applied to the Cash Collateral Account or any
Investment Account.
Repayments pursuant to SECTION 2.3(b) or (c) shall be applied first to the Base
Rate Loans and then to Eurodollar Rate Loans.
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SECTION 2.4 Notes. Each Lender's Loans and the joint and several
obligation of the Borrowers to repay such Loans shall also be evidenced by a
Note payable to the order of such Lender. Each Note shall be dated the Effective
Date (or later "effective date" under any Assignment and Acceptance) and be duly
and validly executed and delivered by the Borrowers.
SECTION 2.5 Extension of Commitments. Upon the request of the
Borrowers, all, but not less than all, of the Lenders may, in their sole
discretion, effective as of any anniversary of the Effective Date, agree to
extend the Commitments for a period such that the Termination Date would fall on
a date that is up to but not in excess of five years after such anniversary
date. Any such extension may be effected solely by the delivery to the Borrowers
of a written notice to that effect by the Lenders, not less than 30 days prior
to such anniversary date.
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ARTICLE 3
LETTER OF CREDIT FACILITY
SECTION 3.1 Agreement to Issue. Upon the terms and subject to the
conditions of, and in reliance upon the representations and warranties made
under, this Agreement, BankBoston agrees to issue for the account of any
Borrower or Subsidiary one or more Letters of Credit in accordance with this
ARTICLE 3, from time to time during the period commencing on the Effective Date
and ending on the Termination Date.
SECTION 3.2 Amounts. BankBoston shall not have any obligation to issue
any Letter of Credit at any time:
(a) if, after giving effect to the issuance of the requested Letter of
Credit, (i) the aggregate Letter of Credit Obligations of the Borrowers would
exceed the Letter of Credit Facility then in effect or (ii) the aggregate
principal amount of Loans outstanding would exceed the Borrowing Base (after
reduction for the Letter of Credit Reserve in respect of such Letter of Credit)
or (iii) if no Loans are outstanding, the aggregate Letter of Credit Obligations
would exceed the Borrowing Base; or
(b) which has a term longer than one calendar year or an expiration
date after the last Business Day that is more than 30 days prior to the
Termination Date.
SECTION 3.3 Conditions. The obligation of BankBoston to issue any
Letter of Credit is subject to the satisfaction of (a) the applicable conditions
precedent contained in ARTICLE 5 and (b) the following additional conditions
precedent in a manner satisfactory to the Agent and BankBoston:
(i) the Borrower shall have delivered to BankBoston and the
Agent at such times and in such manner as BankBoston or the Agent may
prescribe an application in form and substance satisfactory to
BankBoston and the Agent for the issuance of the Letter of Credit, a
Reimbursement Agreement and such other documents as may be required
pursuant to the terms thereof, and the form and terms of the proposed
Letter of Credit shall be satisfactory to BankBoston and the Agent; and
(ii) as of the date of issuance, no order of any court,
arbitrator or governmental authority having jurisdiction or authority
over BankBoston shall purport by its terms to enjoin or restrain banks
generally from issuing letters of credit of the type and in the amount
of the proposed Letter of Credit, and no law, rule or regulation
applicable to banks generally and no request or directive (whether or
not having the force of law) from any governmental authority with
jurisdiction over banks generally shall prohibit, or request that
BankBoston refrain from, the issuance of letters of credit generally or
the issuance of such Letter of Credit.
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SECTION 3.4 Issuance of Letters of Credit.
(a) Request for Issuance. A Borrower shall give BankBoston and the
Agent written notice of such Borrower's request for the issuance of a Letter of
Credit no later than six Business Days prior to the proposed date of issuance of
the Letter of Credit. Such notice shall be irrevocable and shall specify the
name of the Subsidiary (if other than such Borrower) which should appear as the
account party on the face of such Letter of Credit, the original face amount of
the Letter of Credit requested, the effective date (which date shall be a
Business Day) of issuance of such requested Letter of Credit, whether such
Letter of Credit may be drawn in a single or in multiple draws, the date on
which such requested Letter of Credit is to expire (which date shall be a
Business Day earlier than the 30th day prior to the Termination Date), the
purpose for which such Letter of Credit is to be issued and the beneficiary of
the requested Letter of Credit. The Borrower shall attach to such notice the
form of the Letter of Credit that the Borrower requests be issued.
(b) Responsibilities of the Agent; Issuance. The Agent shall determine,
as of the Business Day immediately preceding the requested effective date of
issuance of the Letter of Credit set forth in the notice from the Borrowers
pursuant to SECTION 3.4(a), the amount of Letter of Credit Availability. If (i)
the form of the Letter of Credit delivered by the Borrowers to the Agent is
acceptable to BankBoston and the Agent in their sole, reasonable discretion,
(ii) the undrawn face amount of the requested Letter of Credit is less than or
equal to the Letter of Credit Availability and (iii) the Agent has received a
certificate from the Borrowers stating that the applicable conditions set forth
in ARTICLE 5 have been satisfied, then BankBoston will cause the Letter of
Credit to be issued.
(c) Notice of Issuance. Promptly after the issuance of any Letter of
Credit, BankBoston shall give the Agent written or facsimile notice, or
telephonic notice confirmed promptly thereafter in writing, of the issuance of
such Letter of Credit, and the Agent shall give each Lender a periodic written
report, not less frequently than monthly, of each Letter of Credit outstanding
as of the date thereof, the amount available to be drawn thereunder and the
expiration date thereof.
(d) No Extension or Amendment. No Letter of Credit shall be extended or
amended unless the requirements of this SECTION 3.4 are met as though a new
Letter of Credit were being requested and issued.
SECTION 3.5 Duties of BankBoston. Any action taken or omitted to be
taken by BankBoston under or in connection with any Letter of Credit, if taken
or omitted in the absence of gross negligence or willful misconduct, shall not
result in any liability of BankBoston to any Lender or relieve any Lender of its
obligations hereunder to BankBoston. In determining whether to pay under any
Letter of Credit, BankBoston shall have no obligation to any Lender other than
to confirm that any documents required to be delivered under such Letter of
Credit in connection with such drawing have been presented and appear on their
face to comply with the requirements of such Letter of Credit.
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SECTION 3.6 Payment of Reimbursement Obligations.
(a) Payment to Issuer. Notwithstanding any provisions to the contrary
in any Reimbursement Agreement, the Borrowers agree to reimburse BankBoston for
any drawings (whether partial or full) under each Letter of Credit issued by
BankBoston and agrees to pay to BankBoston the amount of all other Reimbursement
Obligations and other amounts payable to BankBoston under or in connection with
such Letter of Credit immediately when due, irrespective of any claim, set-off,
defense or other right which the Borrowers may have at any time against
BankBoston or any other Person.
(b) Recovery or Avoidance of Payments. In the event any payment by or
on behalf of the Borrowers with respect to any Letter of Credit (or any
Reimbursement Obligation relating thereto) received by BankBoston, or by the
Agent and distributed by the Agent to the Lenders on account of their respective
participations therein, is thereafter set aside, avoided or recovered from
BankBoston or the Agent in connection with any receivership, liquidation or
bankruptcy proceeding, the Lenders shall, upon demand by the Agent, pay to the
Agent, for the account of the Agent or BankBoston, their respective
Proportionate Shares of such amount set aside, avoided or recovered together
with interest at the rate required to be paid by the Agent upon the amount
required to be repaid by it.
SECTION 3.7 Participations.
(a) Purchase of Participations. Immediately upon the Effective Date as
to Letters of Credit outstanding on the Effective Date and immediately upon
issuance by BankBoston of any other Letter of Credit, each Lender shall be
deemed to have irrevocably and unconditionally purchased and received without
recourse or warranty, an undivided interest and participation in such Letter of
Credit, equal to such Lender's Proportionate Share of the face amount thereof
(including, without limitation, all obligations of the Borrowers with respect
thereto, other than amounts owing to BankBoston under SECTION 4.2(d), and any
security therefor or guaranty pertaining thereto).
(b) Sharing of Letter of Credit Payments. In the event that BankBoston
makes a payment under any Letter of Credit and BankBoston shall not have been
repaid such amount pursuant to SECTION 3.6, then BankBoston shall be deemed to
have made a Non-Ratable Loan in the amount of such payment, and notwithstanding
the occurrence or continuance of a Default or Event of Default at the time of
such payment, such Non-Ratable Loan shall be deemed to satisfy the Borrowers'
Reimbursement Obligations in respect to such payment and such Non-Ratable Loan
shall be subject to the provisions of SECTION 4.8(b) and the absolute
obligations of the Lenders to pay for their respective participation interests
therein.
(c) Sharing of Reimbursement Obligation Payments. Whenever BankBoston
receives a payment from or on behalf of the Borrowers on account of a
Reimbursement Obligation as to which the Agent has previously received for the
account of BankBoston payment from a Lender pursuant to this SECTION 3.7,
BankBoston shall promptly pay to the Agent, for the benefit of such Lender, such
Lender's Proportionate Share of the amount of such payment from the Borrowers in
Dollars. Each such payment shall be made by BankBoston on
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the Business Day on which BankBoston receives immediately available funds from
the Agent pursuant to the immediately preceding sentence, if received prior to
11:00 a.m. on such Business Day, and otherwise on the next succeeding Business
Day.
(d) Documentation. Upon the request of any Lender, the Agent shall
furnish to such Lender copies of any Letter of Credit, Reimbursement Agreement
or application for any Letter of Credit and such other documentation as may
reasonably be requested by such Lender.
(e) Obligations Irrevocable. The obligations of each Lender to make
payments to the Agent with respect to any Letter of Credit and their
participations therein pursuant to the provisions of SECTION 4.8(b) hereof or
otherwise and the obligations of the Borrower to make payments to BankBoston or
to the Agent, for the account of Lenders, shall be irrevocable, shall not be
subject to any qualification or exception whatsoever and shall be made in
accordance with the terms and conditions of this Agreement (assuming, in the
case of the obligations of the Lenders to make such payments, that the Letter of
Credit has been issued in accordance with SECTION 3.4), including, without
limitation, any of the following circumstances:
(i) Any lack of validity or enforceability of this Agreement
or any of the other Loan Documents;
(ii) The existence of any claim, set-off, defense or other
right which the Borrowers (or any of them) may have at any time against
a beneficiary named in a Letter of Credit or any transferee of any
Letter of Credit (or any Person for whom any such transferee may be
acting), any Lender, BankBoston or any other Person, whether in
connection with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any
underlying transactions between the Borrowers or any other Person and
the beneficiary named in any Letter of Credit);
(iii) Any draft, certificate or any other document presented
under the Letter of Credit upon which payment has been made in good
faith and according to its terms proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;
(iv) The surrender or impairment of any Collateral or any
other security for the Secured Obligations or the performance or
observance of any of the terms of any of the Loan Documents;
(v) The occurrence of any Default or Event of Default; or
(vi) BankBoston's or the Agent's failure to deliver the notice
provided for in SECTION 3.4(c).
SECTION 3.8 Indemnification, Exoneration.
(a) Indemnification. In addition to amounts payable as elsewhere
provided in this ARTICLE 3, the Borrowers, jointly and severally, agree to
protect, indemnify, pay and save
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harmless the Lenders and the Agent from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) which any Lender or the Agent may incur or be subject to as a
consequence, directly or indirectly, of
(i) the issuance of any Letter of Credit, other than as a
result of its gross negligence or willful misconduct, as determined by
a court of competent jurisdiction, or
(ii) the failure of BankBoston to honor a drawing under any
Letter of Credit as a result of any act or omission, whether rightful
or wrongful, of any present or future de jure or de facto governmental
authority (all such acts or omissions being hereinafter referred to
collectively as "Government Acts").
(b) Assumption of Risk by the Borrowers. As among the Borrowers, the
Lenders and the Agent, the Borrowers assume all risks of the acts and omissions
of, or misuse of any of the Letters of Credit by, the respective beneficiaries
of such Letters of Credit. In furtherance and not in limitation of the
foregoing, subject to the provisions of the applications for the issuance of
Letters of Credit, the Lenders and the Agent shall not be responsible for:
(i) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted by any Person in connection with
the application for and issuance of and presentation of drafts with
respect to any of the Letters of Credit, even if it should 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
Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason;
(iii) the failure of the beneficiary of any Letter of Credit
to comply duly with 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 Letter of Credit
or of the proceeds thereof;
(vii) the misapplication by the beneficiary of any Letter of
Credit of the proceeds of any drawing under such Letter of Credit; or
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(viii) any consequences arising from causes beyond the control
of the Lenders or the Agent, including, without limitation, any
Government Acts.
None of the foregoing shall affect, impair or prevent the vesting of any of the
Agent's rights or powers under this SECTION 3.8.
(c) Exoneration. In furtherance and extension, and not in limitation,
of the specific provisions set forth above, any action taken or omitted by the
Agent, BankBoston or any Lender under or in connection with any of the Letters
of Credit or any related certificates, if taken or omitted in good faith, shall
not result in any liability of any Lender or the Agent to the Borrowers or
relieve any Borrower of any of its obligations hereunder to any such Person.
SECTION 3.9 Supporting Letter of Credit; Cash Collateral Account. Upon
the occurrence of an Event of Default or, if, notwithstanding the provisions of
SECTION 3.2(b), any Letter of Credit is outstanding on the Termination Date,
then on or prior to the Termination Date, the Borrowers shall, as their joint
and several obligation, promptly on demand by the Agent, deposit with the Agent,
for the ratable benefit of the Lenders, with respect to each Letter of Credit
then outstanding, as the Agent shall specify, either (a) a standby letter of
credit (a "Supporting Letter of Credit") in form and substance satisfactory to
the Agent, issued by an issuer satisfactory to the Agent in its sole and
absolute judgment in an amount equal to the greatest amount for which such
Letter of Credit may be drawn, under which Supporting Letter of Credit the Agent
shall be entitled to draw amounts necessary to reimburse the Agent and the
Lenders for payments made by the Agent and the Lenders under such Letter of
Credit or under any reimbursement or guaranty agreement with respect thereto, or
(b) Cash Collateral in an amount necessary to reimburse the Agent and the
Lenders for payments made by the Agent and the Lenders under such Letter of
Credit or under any reimbursement or guaranty agreement with respect thereto.
Such Supporting Letter of Credit or Cash Collateral shall be held by the Agent
for the benefit of the Lenders, as security for, and to provide for the payment
of, the Reimbursement Obligations. In addition, the Agent may at any time after
such Event of Default or the Termination Date apply any or all of such Cash
Collateral to the payment of any or all of the Secured Obligations then due and
payable. The Cash Collateral shall be deposited in the Cash Collateral Account
or an Investment Account and shall be administered in accordance with the
provisions of SECTION 4.15.
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ARTICLE 4
GENERAL LOAN PROVISIONS
SECTION 4.1 Interest.
(a) Base Rate Loans. Subject to the provisions of SECTION 4.1(d), the
Borrowers will pay interest on the unpaid principal amount of each Base Rate
Loan, for each day from the day such Loan is made (or is converted to a Base
Rate Loan) until such Loan is paid (whether at maturity, by reason of
acceleration, or otherwise) or is converted to a Loan of a different Type, at a
rate per annum equal to the sum of (i) the Applicable Margin and (ii) the Base
Rate, payable monthly in arrears as it accrues on each Interest Payment Date.
(b) Eurodollar Rate Loans. Subject to the provisions of SECTION 4.1(d),
the Borrowers will pay interest on the unpaid principal amount of each
Eurodollar Rate Loan for the applicable Interest Period at a rate per annum
equal to the sum of (i) the Applicable Margin and (ii) the Eurodollar Rate,
payable on the last day of such Interest Period and, if such Interest Period is
longer than three months, at three-month intervals during such Interest Period.
(c) Other Secured Obligations. The Borrowers will, to the extent
permitted by Applicable Law, pay interest on the unpaid principal amount of any
Secured Obligation that is due and payable other than the Loans in accordance
with SECTIONS 4.1(a) or (d), as applicable, as if such Secured Obligation were a
Base Rate Loan.
(d) Default Rate. If a payment default pursuant to SECTION 12.1(a)
shall occur and be continuing or there shall occur and be continuing, uncured
and unwaived for 30 days, any other Event of Default, at the election of the
Required Lenders, the unpaid principal amount of the Loans and other Secured
Obligations shall no longer bear interest in accordance with the terms of
SECTION 4.1(a), 4.1(b) or 4.1(c), as applicable, but shall bear interest for
each day from the date of such payment default or the 30th day after such other
Event of Default until such payment default or other Event of Default shall have
been cured or waived at a rate per annum equal to the sum of (i) the Default
Margin and (ii) the rate otherwise applicable to such Loan, payable on demand.
The interest rate provided for in the preceding sentence shall, to the extent
permitted by Applicable Law, apply to and accrue on the amount of any judgment
entered with respect to any Secured Obligation and shall continue to accrue at
such rate during any proceeding described in SECTION 12.1(g) or (h).
(e) Calculation of Interest. The interest rates provided for in
SECTIONS 4.1(a), (b), (c) and (d) shall be computed on the basis of a year of
360 days and the actual number of days elapsed. Each interest rate determined
with reference to the Base Rate shall be adjusted automatically as of the
opening of business on the effective date of each change in the Base Rate.
(f) Maximum Rate. It is not intended by the Lenders, and nothing
contained in this Agreement or the Notes shall be deemed, to establish or
require the payment of a rate of interest in excess of the maximum rate
permitted by Applicable Law (the "Maximum Rate"). If, in any month, the
Effective Interest Rate, absent such limitation, would have exceeded the
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Maximum Rate, then the Effective Interest Rate for that month shall be the
Maximum Rate, and, if in future months, the Effective Interest Rate would
otherwise be less than the Maximum Rate, then the Effective Interest Rate shall
remain at the Maximum Rate until such time as the amount of interest paid
hereunder equals the amount of interest which would have been paid if the same
had not been limited by the Maximum Rate. In the event that, upon payment in
full of the Secured Obligations, the total amount of interest paid or accrued
under the terms of this Agreement is less than the total amount of interest
which would have been paid or accrued if the Effective Interest Rate (without
regard to any limitation hereunder) had at all times been in effect, then the
Borrowers shall, to the extent permitted by Applicable Law, pay to the Lenders
an amount equal to the excess, if any, of (i) the lesser of (A) the amount of
interest which would have been charged if the Maximum Rate had, at all times,
been in effect and (B) the amount of interest which would have accrued had the
Effective Interest Rate (without reference to any limitation hereunder), at all
times, been in effect and (ii) the amount of interest actually paid or accrued
under this Agreement. In the event the Lenders receive, collect or apply as
interest any sum in excess of the Maximum Rate, such excess amount shall be
applied to the reduction of the principal balance of the Secured Obligations,
and if no such principal is then outstanding, such excess or part thereof
remaining, shall be paid to the Borrowers. For the purposes of computing the
Maximum Rate, to the extent permitted by applicable law, all interest and
charges, discounts, amounts, premiums or fees deemed to constitute interest
under applicable law, shall be amortized, prorated, allocated and spread in
substantially equal parts throughout the full term of this Agreement. The
provisions of this SECTION 4.1(f) shall be deemed to be incorporated into every
Loan Document (whether or not any provision of this SECTION 4.1(f) is
specifically referred to therein).
SECTION 4.2 Certain Fees.
(a) Agent Fee. For administration and other services performed by the
Agent in connection with its continuing administration of this Agreement, the
Borrowers, jointly and severally, shall pay to the Agent, for its own account,
and not for the account of the Lenders, an annual fee of $50,000, payable
annually in advance, on the Effective Date and on each anniversary thereof for
so long as any Secured Obligations shall remain outstanding or the Commitments
shall not have been terminated.
(b) Commitment Fee. In connection with and as consideration for the
holding available for the use of the Borrowers hereunder the full amount of the
Commitments, the Borrowers will pay a fee to the Agent, for the Ratable benefit
of the Lenders, for each day from the Effective Date until the Termination Date,
in an amount equal to 0.375% per annum of the Unused Commitments for such day,
SUBJECT, HOWEVER to quarterly adjustment in accordance with the pricing matrix
attached hereto as ANNEX B, on the dates specified for adjustments to the
Applicable Margin. "Unused Commitments" means an amount equal to the aggregate
Commitments, LESS the aggregate outstanding principal amount of Loans, LESS the
total amount of Letter of Credit Obligations, in each case on the date of
determination. Such fee shall be payable monthly in arrears on each Interest
Payment Date and on the date of any permanent reduction in the aggregate
Commitments.
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(c) Facility Fee. As compensation to BankBoston for its activity in
structuring and approving the credit facilities available hereunder, on the
Effective Date the Borrowers shall pay to BankBoston a facility fee in an amount
agreed upon between them pursuant to a separate letter agreement.
(d) Letter of Credit Fees.
(i) The Borrowers, jointly and severally, agree to pay to the
Agent, for the Ratable benefit of the Lenders, Letter of Credit fees on
each Letter of Credit equal to the Applicable Margin per annum (or, in
the case of commercial or documentary Letters of Credit, such
Applicable Margin minus 0.50%) applicable to Eurodollar Rate Loans on
the date of issuance of such Letter of Credit payable quarterly in
arrears on the first day of each January, April, July and October on
the average daily Letter of Credit Amount of such Letters of Credit
outstanding during the preceding Fiscal Quarter. Such fees shall be
calculated based on a year of 360 days and the actual number of days
elapsed.
(ii) The Borrowers agree to pay to Agent, for the account of
BankBoston, the standard fees and charges of BankBoston for issuing,
administering, amending, renewing, paying and canceling letters of
credit, as and when assessed as to any Letters of Credit, and an
additional "up-front" or fronting fee at a rate of 0.125% per annum of
the Letter of Credit Amount of each Letter of Credit, payable quarterly
in arrears on the first day of each January, April, July and October,
on the average daily Letter of Credit Amounts of all Letters of Credit
from time to time outstanding during the preceding Fiscal Quarter.
(e) General. All fees provided for in this SECTION 4.2 and otherwise in
this Agreement or any other Loan Document, shall be fully earned when due and
payable and, except as otherwise set forth herein or required by applicable law,
shall not be subject to refund or rebate. All such fees are for compensation for
services and are not, and shall not be deemed to be, interest or a charge for
the use of money.
SECTION 4.3 Manner of Payment.
(a) Except as otherwise expressly provided in SECTION 8.1(c), each
payment (including prepayments) by the Borrowers on account of the principal of
or interest on the Loans or of any other amounts payable to the Agent or the
Lenders under this Agreement or any Note or other Loan Document shall be made
not later than 12:00 noon on the date specified for payment under this Agreement
to the Agent, at the Agent's Office, in Dollars, in immediately available funds
and shall be made without any setoff, counterclaim or deduction whatsoever. Any
payment received after such time but before 2:00 p.m. on such day shall be
deemed a payment on such date for the purposes of SECTION 12.1, but for all
other purposes shall be deemed to have been made on the next succeeding Business
Day.
(b) The Borrowers hereby irrevocably authorize each Lender and each
Affiliate of such Lender and each participant herein to charge any account of a
Borrower
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maintained with such Lender or such Affiliate or participant with such amounts
as may be necessary from time to time to pay any Secured Obligations (whether or
not owed to such Lender, Affiliate or participant) which are not paid when due.
SECTION 4.4 General. If any payment under this Agreement or any Note
shall be specified to be made on a day which is not a Business Day, it shall be
made on the next succeeding day which is a Business Day and such extension of
time shall in such case be included in computing interest, if any, in connection
with such payment.
SECTION 4.5 Loan Accounts; Statements of Account.
(a) Each Lender shall open and maintain on its books a loan account in
▇▇▇▇▇▇▇'▇ name (each, a "Loan Account" and collectively, the "Loan Accounts").
Each such Loan Account shall show as debits thereto each Loan made under this
Agreement by such Lender to the Borrowers and as credits thereto all payments
received by such Lender and applied to principal of such Loans, so that the
balance of the Loan Account at all times reflects the principal amount due such
Lender from the Borrowers.
(b) The Agent shall maintain on its books a control account for the
Borrowers in which shall be recorded (i) the amount of each disbursement made
hereunder, (ii) the amount of any principal or interest due or to become due
from the Borrowers hereunder, and (iii) the amount of any sum received by the
Agent hereunder from or on behalf of the Borrowers and each Lender's share
therein.
(c) The entries made in the accounts pursuant to SUBSECTIONS (a) and
(b) shall be prima facie evidence, in the absence of manifest error, of the
existence and amounts of the obligations of the Borrowers therein recorded and
in case of discrepancy between such accounts, in the absence of manifest error,
the accounts maintained pursuant to SUBSECTION (b) shall be controlling.
(d) The Agent will account separately to the Borrowers monthly with a
statement of Loans, charges and payments made to and by the Borrowers pursuant
to this Agreement, and such accounts rendered by the Agent shall be deemed
final, binding and conclusive, save for manifest error, unless the Agent is
notified by the Borrowers in writing to the contrary within 30 days of the date
the account to the Borrowers was so rendered. Such notice by the Borrowers shall
be deemed an objection to only those items specifically objected to therein.
Failure of the Agent to render such account shall in no way affect the rights of
the Agent or of the Lenders hereunder.
SECTION 4.6 Reduction of Commitments; Termination of Agreement.
(a) Reduction of Commitments.
(i) The Borrowers shall have the right, at any time and from
time to time, upon at least seven days' prior irrevocable, written
notice to the Agent, to reduce permanently and Ratably in part the
Commitments; PROVIDED, HOWEVER, that any such partial reduction shall
be in an amount equal to $5,000,000 or any larger
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integral, multiple of $1,000,000 and shall not reduce the aggregate
Commitments below an amount equal to the sum of the Letter of Credit
Reserve PLUS the Rent Reserve PLUS any Additional Reserves. As of the
date of reduction set forth in such notice, the Commitments shall be
permanently reduced to the amount stated in the Borrowers' notice (and
each Lender's Commitment shall be reduced Ratably) for all purposes
herein, and the Borrowers shall pay the amount necessary to reduce the
amount of the outstanding Loans to any amount that does not exceed the
aggregate Commitments (as reduced), together with accrued interest on
any amounts so prepaid and an early termination fee in an amount equal
to (A) 1% of the amount of such reduction if effected prior to the
first anniversary of the Effective Date or (B) 1/2 of 1% of the amount
of such reduction if effected on or after the first anniversary of the
Effective Date but prior to the second anniversary of the Effective
Date.
(ii) The aggregate Commitments shall be automatically reduced
to zero on the Termination Date.
(iii) The aggregate Commitments shall be reduced as provided
in SECTION 4.9.
(iv) The Commitments or any portion thereof terminated or
reduced pursuant to this SECTION 4.6 may not be reinstated.
(b) Termination of Agreement. The Borrowers shall have the right, at
any time, to terminate this Agreement upon not less than 10 Business Days' prior
written notice, which notice shall specify the effective date of such
termination. Upon receipt of such notice, the Agent shall promptly notify each
Lender thereof. On the date specified in such notice, such termination shall be
effected, PROVIDED, that the Borrowers shall, on or prior to such date, pay to
the Agent, for its account and the account of the Lenders, in same day funds, an
amount equal to all Secured Obligations (other than with respect to Letter of
Credit Obligations) outstanding on such date, including, without limitation, all
(i) accrued interest thereon, (ii) all accrued fees provided for hereunder,
(iii) any amounts payable to the Agent or the Lenders pursuant to SECTIONS 4.10,
4.15, 15.2, 15.3, 15.14 and 15.23, and, in addition thereto, shall deliver to
the Agent, in respect of each outstanding Letter of Credit, either a Supporting
Letter of Credit or Cash Collateral as provided in SECTION 3.9, and (iv) if such
termination occurs prior to the first anniversary of the Effective Date, an
early termination fee in an amount equal to 1% of the amount of the Commitments
so terminated or if such termination occurs on or after the first anniversary of
the Effective Date but prior to the second anniversary of the Effective Date, an
early termination fee in an amount equal to 1/2 of 1% of the amount of the
Commitments so terminated, PROVIDED, that such fee shall be payable only if
contemporaneously with such termination and repayment, the Borrowers (or any of
them) issue additional Debt in a private placement, a public offering, or to one
or more institutional lenders, PROVIDED FURTHER, that if Loan Availability has
been reduced by 10% or more during the six-month period preceding such
termination as a result of the Agent's having, without the agreement of ▇▇▇▇▇▇▇,
reduced any advance rate specified in the definition "Borrowing Base" or
declared in the exercise of its reasonable credit judgment any otherwise
Eligible Inventory or Eligible Receivables to be ineligible, then such early
termination fee will not be payable notwithstanding that any such other
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Debt is incurred. Additionally, the Borrowers shall provide the Agent and the
Lenders with indemnification in form and substance satisfactory to the Agent in
its reasonable judgment with respect to such customary matters as the Agent and
the Lenders shall reasonably require. Following a notice of termination as
provided for in this SECTION 4.6(b) and upon payment in full of the amounts
specified in this SECTION 4.6(b), and execution and delivery of any required
indemnification, this Agreement shall be terminated and the Agent, the Lenders
and the Borrowers shall have no further obligations to any other party hereto,
except for the obligations to the Agent and the Lenders pursuant to SECTION
15.12 hereof, which shall survive any termination of this Agreement.
SECTION 4.7 Making of Loans.
(a) Nature of Obligations of Lenders to Make Loans. The obligations of
the Lenders under this Agreement to make the Loans are several and are not joint
or joint and several.
(b) Assumption by Agent. Subject to the provisions of SECTION 4.8 and
notwithstanding the occurrence or continuance of a Default or Event of Default
or other failure of any condition to the making of Loans hereunder subsequent to
the Initial Loans, unless the Agent shall have received notice from a Lender
prior to a proposed Borrowing date that such Lender will not make available to
the Agent such Lender's Proportionate Share of the Loan to be borrowed on such
date, the Agent may assume that such Lender will make such Proportionate Share
available to the Agent in accordance with SECTION 2.2(a), and the Agent may, in
reliance upon such assumption, make available to the Borrowers on such date a
corresponding amount. If and to the extent a Lender shall not make its
Proportionate Share of any Loan available to the Agent, and the Agent has made a
corresponding amount available to the Borrowers, such Lender, on the one hand,
and the Borrowers, jointly and severally on the other hand, severally agree to
repay to the Agent forthwith on demand such corresponding amount (the
"Make-Whole Amount"), together with interest thereon for each day from the date
such amount is made available to the Borrowers until the date such amount is
repaid to the Agent at (i) the Federal Funds Effective Rate if repaid by the
Lender or (ii) the Effective Interest Rate or, if lower, subject to SECTION
4.1(f), the Maximum Rate, if repaid by the Borrowers. If such Lender shall repay
to the Agent such corresponding amount, the amount so repaid shall constitute
such Lender's Proportionate Share of the Loan made on such Borrowing date for
purposes of this Agreement. The Agent shall not be required to make any Loan as
to which it shall have received notice by a Lender of such Lender's intention
not to make its Ratable Share of such Loan available to the Agent. The failure
of any Lender to make its Proportionate Share of any Loan available shall not
(without regard to whether the Borrowers shall have returned the amount thereof
to the Agent in accordance with this SECTION 4.7) relieve it or any other Lender
of its obligation, if any, hereunder to make its Proportionate Share of the Loan
available on such Borrowing date, but no Lender shall be responsible for the
failure of any other Lender to make its Proportionate Share of a Loan available
on the Borrowing date.
(c) Delegation of Authority to Agent. Without limiting the generality
of SECTION 14.1, each Lender expressly authorizes the Agent to determine on
behalf of such Lender (i) any reduction or increase of advance rates applicable
to the Borrowing Base, so long as such
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advance rates do not at any time exceed the rates set forth in the Borrowing
Base definition as in effect on the Agreement Date, (ii) the creation or
elimination of Additional Reserves and (iii) whether or not Inventory or
Receivables shall be deemed to constitute Eligible Inventory or Eligible
Receivables. Any withdrawal of authorization under this SECTION 4.7(c) shall not
affect the validity of any Loans made prior to the effectiveness thereof.
(d) Overadvances. Notwithstanding anything to the contrary contained
elsewhere in this SECTION 4.7 or this Agreement or the other Loan Documents and
whether or not a Default or Event of Default exists at the time, the Agent may
in its discretion require all Lenders to honor requests or deemed requests by
the Borrowers for Loans at a time that an Overadvance Condition exists or which
would result in an Overadvance Condition and each Lender shall be obligated to
continue to make its Proportionate Share of any such Overadvance Loan up to a
maximum amount outstanding equal to its Commitment, so long as such Overadvance
is not known by the Agent to exceed $3,000,000 or to exist for more than five
consecutive Business Days or more than 10 days in any Fiscal Year.
SECTION 4.8 Settlement Among Lenders.
(a) Loans. It is agreed that each Lender's Net Outstandings are
intended by the Lenders to be equal at all times to such Lender's Ratable Share
of the aggregate principal amount of all Loans outstanding. Notwithstanding such
agreement, the several and not joint obligation of each Lender to make its
Ratable Share of Loans in accordance with the terms of this Agreement and each
Lender's right to receive its Ratable Share of principal payments on Loans, the
Lenders agree that in order to facilitate the administration of this Agreement
and the Loan Documents that settlement among them may take place on a periodic
basis in accordance with the provisions of this SECTION 4.8.
(b) Settlement Procedures. To the extent and in the manner hereinafter
provided in this SECTION 4.8, settlement among the Lenders as to Base Rate Loans
may occur periodically on Settlement Dates determined from time to time by the
Agent, which may occur before or after the occurrence or during the continuance
of a Default or Event of Default and whether or not all of the conditions set
forth in SECTION 5.2 have been met. On each Settlement Date payments shall be
made by or to BankBoston and the other Lenders in the manner provided in this
SECTION 4.8 in accordance with the Settlement Report delivered by the Agent
pursuant to the provisions of this SECTION 4.8 in respect of such Settlement
Date, so that as of each Settlement Date, and after giving effect to the
transactions to take place on such Settlement Date, each Lender's Net
Outstandings shall equal such Lender's Ratable Share of the Loans.
(i) Selection of Settlement Dates. If the Agent elects, in its
discretion, but subject to the consent of BankBoston, to settle
accounts among the Lenders with respect to principal amounts of Base
Rate Loans less frequently than each Business Day, then the Agent shall
designate periodic Settlement Dates which may occur on any Business Day
after the Effective Date; PROVIDED, HOWEVER, that (A) the Agent shall
designate as a Settlement Date any Business Day which is an Interest
Payment Date, (B) a Settlement Date shall occur not less often than
every five Business Days, and (C) settlements with respect to
Eurodollar Rate Loans shall take place on the
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Borrowing date for such Loan, on the last day of each Interest Period
applicable thereto and on any other date during such Interest Period on
which interest is payable thereon. The Agent shall designate a
Settlement Date by delivering to each Lender a Settlement Report not
later than 12:00 noon on the proposed Settlement Date, which Settlement
Report shall be with respect to the period beginning on the next
preceding Settlement Date and ending on such designated Settlement
Date.
(ii) Non-Ratable Loans and Payments. Between Settlement Dates,
the Agent shall request and BankBoston may (but shall not be obligated
to) advance to the Borrower out of BankBoston's own funds, the entire
principal amount of any Base Rate Loan requested or deemed requested
pursuant to SECTION 2.2(a) (any such Base Rate Loan being referred to
as a "Non-Ratable Loan"). The making of each Non-Ratable Loan by
BankBoston shall be deemed to be a purchase by BankBoston of a 100%
participation in each other Lender's Proportionate Share of such
Non-Ratable Loan. All payments of principal, interest and any other
amount with respect to such Non-Ratable Loan shall be payable to and
received by the Agent for the account of BankBoston. Upon demand by
BankBoston, with notice thereof to the Agent, each other Lender shall
pay to BankBoston, as the repurchase of such participation, an amount
equal to 100% of such Lender's Proportionate Share of the principal
amount of such Non- Ratable Loan. Any payments received by the Agent
between Settlement Dates which in accordance with the terms of this
Agreement are to be applied to the reduction of the outstanding
principal balance of the Loans, shall be paid over to and retained by
BankBoston for such application, and such payment to and retention by
BankBoston shall be deemed, to the extent of each other Lender's
Proportionate Share of such payment, to be a purchase by each such
other Lender of a participation in the Loans (including the repurchase
of participations in Non-Ratable Loans) held by BankBoston. Upon demand
by another Lender, with notice thereof to the Agent, BankBoston shall
pay to the Agent, for the account of such other Lender, as a repurchase
of such participation, an amount equal to such other Lender's
Proportionate Share of any such amounts (after application thereof to
the repurchase of any participations of BankBoston in such other
Lender's Proportionate Share of any Non-Ratable Loans) paid only to
BankBoston by the Agent.
(iii) Settlement. On each Settlement Date each Lender shall
transfer to the Agent and the Agent shall transfer to each Lender such
amounts as are necessary to insure that, after giving effect to all
such transfers, each Lender's Net Outstandings are equal to such
Lenders Proportionate Share of the aggregate principal amount of all
Loans then outstanding.
(iv) Return of Payments. If any amounts received by BankBoston
in respect of the Secured Obligations are later required to be returned
or repaid by BankBoston to the Borrower or any other obligor or their
respective representatives or successors in interest, whether by court
order, settlement or otherwise, in excess of the BankBoston's
Proportionate Share of all such amounts required to be returned by all
Lenders, each other Lender shall, upon demand by BankBoston with notice
to
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the Agent, pay to the Agent for the account of BankBoston, an amount
equal to the excess of such Lender's Proportionate Share of all such
amounts required to be returned by all Lenders over the amount, if any,
returned directly by such Lender.
(v) Payments to Agent, Lenders.
(A) Payment by any Lender to the Agent pursuant to
this SECTION 4.8 shall be made not later than 1:00 p.m. on the
Business Day such payment is due, PROVIDED that if such
payment is due on demand by another Lender, such demand is
made on the paying Lender not later than 10:00 a.m. on such
Business Day. Payment by the Agent to any Lender shall be made
by wire transfer, promptly following the Agent's receipt of
funds for the account of such Lender and in the type of funds
received by the Agent, PROVIDED that if the Agent receives
such funds at or prior to 1:00 p.m., the Agent shall pay such
funds to such Lender by 2:00 p.m. on such Business Day. If a
demand for payment is made after the applicable time set forth
above, the payment due shall be made by 2:00 p.m. on the first
Business Day following the date of such demand.
(B) If a Lender shall, at any time, fail to make any
payment to the Agent required hereunder, the Agent may, but
shall not be required to, retain payments that would otherwise
be made to such Lender hereunder and apply such payments to
such Lender's defaulted obligations hereunder, at such time,
and in such order, as the Agent may elect in its sole
discretion.
(C) With respect to the payment of any funds under
this SECTION 4.8(b), whether from the Agent to a Lender or
from a Lender to the Agent, the party failing to make full
payment when due pursuant to the terms hereof shall, upon
demand by the other party, pay such amount together with
interest on such amount at the Federal Funds Effective Rate.
(c) Settlement of Other Secured Obligations. All other amounts received
by the Agent on account of, or applied by the Agent to the payment of, any
Secured Obligation owed to the Lenders (including, without limitation, fees
payable to the Lenders pursuant to SECTIONS 4.2(b) and (d) and proceeds from the
sale of, or other realization upon, all or any part of the Collateral following
an Event of Default) that are received by the Agent on or prior to 1:00 p.m. on
a Business Day will be paid by the Agent to each Lender on the same Business
Day, and any such amounts that are received by the Agent after 1:00 p.m. will be
paid by the Agent to each Lender on the following Business Day. Unless otherwise
stated herein, the Agent shall distribute to each Lender such Lender's
Proportionate Share of fees payable to the Lenders pursuant to SECTIONS 4.2(b)
and (d) and shall distribute to each Lender such Lender's Proportionate Share
(or if different, such Lender's share based upon the amount of the Secured
Obligations then owing to each Lender) of the proceeds from the sale of, or
other realization upon, all or any part of the Collateral following an Event of
Default.
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SECTION 4.9 Mandatory Prepayments.
The Borrowers shall permanently reduce the Commitments (Ratably) by an
amount equal to any amount that would otherwise constitute "Net Available Cash"
as defined in the Senior Note Indenture and be required by the terms thereof to
be applied to the prepayment of the Senior Notes. To the extent necessary to
comply with the provisions of SECTION 2.3(b) after giving effect to such
reduction, the Borrowers shall also prepay the Loans. Any such prepayment
pursuant to this SECTION 4.9 shall be applied first to Base Rate Loans to the
extent thereof and then to Eurodollar Rate Loans. If any payments are received
which result in prepayment of Eurodollar Rate Loans prior to the end of the
applicable Interest Period, the Borrowers shall also pay any amounts due
pursuant to SECTION 4.10.
SECTION 4.10 Payments Not at End of Interest Period; Failure to Borrow.
If for any reason any payment of principal with respect to any Eurodollar Rate
Loan is made on any day prior to the last day of the Interest Period applicable
to such Eurodollar Rate Loan or, after having given a Notice of Borrowing with
respect to any Eurodollar Rate Loan or a Notice of Conversion or Continuation
with respect to any Loan to be continued as or converted into a Eurodollar Rate
Loan, such Loan is not made or is not continued as or converted into a
Eurodollar Rate Loan due to the Borrowers' failure to borrow or to fulfill the
applicable conditions set forth in ARTICLE 5, the Borrowers shall pay to each
Lender, an amount equal to such Lender's costs and expenses incurred as a result
of such failure, including in connection with obtaining deposits to fund its
Ratable Share of such new (or continued or converted) Loan and redeploying such
deposits. The Borrowers shall pay such amount upon presentation by the Agent of
a statement setting forth the amount and the applicable Lender's calculation
thereof in reasonable detail, which statement shall be deemed true and correct
absent manifest error.
SECTION 4.11 Notice of Conversion or Continuation. Whenever the
Borrowers desire, subject to the provisions of SECTION 4.7, to convert an
outstanding Loan into a Loan or Loans of a different Type or to continue all or
a portion of an outstanding Eurodollar Rate Loan for a subsequent Interest
Period, the Borrowers shall notify the Agent in writing (which notice shall be
irrevocable) by telecopy not later than 11:30 a.m. on the date two Business Days
before the day on which such proposed conversion or continuation is to be
effective (and such effective date of any continuation shall be the last day of
the Interest Period for the Eurodollar Rate Loan). Each such notice (a "Notice
of Conversion or Continuation") shall (i) identify the Loan to be converted or
continued, the aggregate outstanding principal balance thereof and, if a
Eurodollar Rate Loan, the last day of the Interest Period applicable to such
Loan, (ii) specify the effective date of such conversion or continuation, (iii)
specify the principal amount of such Loan to be converted or continued and, if
converted, the Type or Types into which the same is to be converted, and (iv)
the Interest Period to be applicable to the Eurodollar Rate Loan as converted or
continued, and shall be immediately followed by a written confirmation thereof
by the Borrowers in a form acceptable to the Agent, PROVIDED that if such
written confirmation differs in any respect from the action taken by the
Lenders, the records of the Agent shall control absent manifest error.
SECTION 4.12 Conversion or Continuation. Provided that no Event of
Default shall have occurred and be continuing (but subject to the provisions of
SECTIONS 4.11 and
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4.13), the Borrowers may request that all or any part of any outstanding Loan be
converted into a Loan or Loans of a different Type or be continued as a Loan or
Loans of the same Type, in the same aggregate principal amount, on any Business
Day (which, in the case of continuation of a Eurodollar Rate Loan, shall be the
last day of the Interest Period applicable to such Loan), upon notice (which
notice shall be irrevocable) given in accordance with SECTION 4.11.
SECTION 4.13 Duration of Interest Periods; Maximum Number of Eurodollar
Rate Loans; Minimum Increments.
(a) Subject to the provisions of the definition "Interest Period," the
duration of each Interest Period applicable to a Eurodollar Rate Loan shall be
as specified in the applicable Notice of Borrowing or Notice of Conversion or
Continuation. The Borrowers may elect a subsequent Interest Period to be
applicable to any Eurodollar Rate Loan by giving a Notice of Conversion or
Continuation with respect to such Loan in accordance with SECTION 4.11.
(b) If the Agent does not receive a notice of election in accordance
with SECTION 4.11 with respect to the continuation of Eurodollar Rate Loan
within the applicable time limits specified in said SECTION 4.11, or if, when
such notice must be given, an Event of Default exists or such Type of Loan is
not available, the Borrowers shall be deemed to have elected to convert such
Eurodollar Rate Loan in whole into a Base Rate Loan on the last day of the
Interest Period therefor.
(c) Notwithstanding the foregoing, the Borrowers may not select an
Interest Period that would end, but for the provisions of the definition
"Interest Period," after the Termination Date.
(d) In no event shall there be more than six Eurodollar Rate Loans
outstanding hereunder at any time. For the purpose of this SUBSECTION (d), each
Loan having a distinct Interest Period shall be deemed to be a separate Loan
hereunder.
(e) Each Eurodollar Rate Loan shall be in a minimum amount of
$1,000,000 or an integral multiple of $250,000 in excess thereof.
SECTION 4.14 Changed Circumstances.
(a) If the introduction of or any change in or in the interpretation of
(in each case, after the date hereof) any law or regulation makes it unlawful,
or any Governmental Authority asserts, after the date hereof, that it is
unlawful, for any Lender to perform its obligations hereunder to make Eurodollar
Rate Loans or to fund or maintain Eurodollar Rate Loans hereunder, such Lender
shall notify the Agent of such event and the Agent shall notify the Borrowers of
such event, and the right of the Borrowers to select Eurodollar Rate Loan for
any subsequent Interest Period or in connection with any subsequent conversion
of any Loan shall be suspended until the Agent shall notify the Borrowers that
the circumstances causing such suspension no longer exist, and the Borrowers
shall forthwith prepay in full all Eurodollar Rate Loans then outstanding and
shall pay all interest accrued thereon through the date of such prepayment or
conversion, unless the Borrowers, within three Business Days after such notice
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from the Agent, request the conversion of all Eurodollar Rate Loans then
outstanding into Base Rate Loans; PROVIDED, that if the date of such repayment
or proposed conversion is not the last day of the Interest Period applicable to
such Eurodollar Rate Loans, the Borrowers shall also pay any amount due pursuant
to SECTION 4.10.
(b) If the Agent shall, at least one Business Day before the date of
any requested Borrowing or the effective date of any conversion or continuation
of an existing Loan to be made or continued as or converted into a Eurodollar
Rate Loan (each such requested Borrowing made and Loan to be converted or
continued, a "Pending Loan"), notify the Borrowers that the Eurodollar Rate will
not adequately reflect the cost to the Lenders of making or funding such Pending
Loan as a Eurodollar Rate Loan or that the Interbank Offered Rate is not
determinable from any interest rate reporting service of recognized standing,
then the right of the Borrowers to select Eurodollar Rate Loan for such Pending
Loan, any subsequent Loan or in connection with any subsequent conversion or
continuation of any Loan shall be suspended until the Agent shall notify the
Borrowers that the circumstances causing such suspension no longer exist, and
each Pending Loan and each such subsequent Loan requested to be made, continued
or converted shall be made or continued as or converted into a Base Rate Loan.
SECTION 4.15 Cash Collateral Account; Investment Accounts.
(a) Cash Collateral Account. The Borrowers shall establish a Cash
Collateral Account in which to deposit Collateral consisting of cash or Cash
Equivalents from time to time
(i) representing payments received pursuant to SECTION 2.3(c)
in excess of then outstanding Loans or on account of Eurodollar Rate
Loans which would otherwise result in repayment of such Loans prior to
the end of the Interest Period applicable thereto,
(ii) with respect to Letter of Credit Obligations (x) at the
request of the Agent upon the occurrence of an Event of Default, or (y)
for the purposes set forth in SECTION 4.6 in the event of termination
of this Agreement, or
(iii) for any other purpose as may be agreed between the Agent
and the Borrowers to provide security for the Secured Obligations.
On the last day of the applicable Interest Period as to any amounts deposited to
the Cash Collateral Account pursuant to CLAUSE (i) above or if a drawing under a
Letter of Credit occurs with respect to any amounts deposited to the Cash
Collateral Account pursuant to CLAUSE (ii) above, the Borrowers hereby authorize
the Agent to use the monies deposited in the Cash Collateral Account to make
payment to the payee with respect to such Loan or drawing. The Cash Collateral
Account shall be in the name of the Agent and the Agent shall have sole dominion
and control over, and sole access to, the Cash Collateral Account. Neither any
Borrower nor any Person claiming on behalf of or through any Borrower shall have
any right to withdraw any of the funds held in the Cash Collateral Account. The
Borrowers agree that they will not at any time (x) sell or otherwise dispose of
any interest in the Cash Collateral Account or any funds held therein or (y)
create or permit to exist any Lien upon or with respect to the Cash Collateral
Account or any funds held therein, except as
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provided in or contemplated by this Agreement. The Agent shall exercise
reasonable care in the custody and preservation of any funds held in the Cash
Collateral Account and shall be deemed to have exercised such care if such funds
are accorded treatment substantially equivalent to that which the Agent accords
other funds deposited with the Agent, it being understood that the Agent shall
not have any responsibility for taking any necessary steps to preserve rights
against any parties with respect to any funds held in the Cash Collateral
Account. Subject to the right of the Agent to withdraw funds from the Cash
Collateral Account as provided herein, the Agent will, so long as no Default or
Event of Default shall have occurred and be continuing, from time to time invest
funds on deposit in the Cash Collateral Account, reinvest proceeds of any such
investments which may mature or be sold, and invest interest or other income
received from any such investments, in each case, in Cash Equivalents, as the
Borrowers may direct prior to the occurrence of a Default or Event of Default
and as the Agent may select after the occurrence and during the continuance of a
Default or Event of Default. Such proceeds, interest and income which are not so
invested or reinvested in Cash Equivalents shall be deposited and held by the
Agent in the Cash Collateral Account. The Agent makes no representation or
warranty as to, and shall not be responsible for, the rate of return, if any,
earned in any Cash Collateral. Any earnings on Cash Collateral shall be held as
additional Cash Collateral on the terms set forth in this SECTION 4.15.
(b) Investment Accounts. The Borrowers may from time to time establish
one or more Investment Accounts with the Agent, any Lender or any Affiliate of a
Lender, for the purpose of investing in Cash Equivalents any Cash Collateral
representing payments received pursuant to SECTION 2.3(c) in excess of then
outstanding Loans or on account of Eurodollar Rate Loans which would otherwise
result in repayment of such Loans prior to the end of the Interest Period
applicable thereto. The Borrowers hereby acknowledge and agree that each such
Investment Account shall constitute Collateral hereunder and shall be maintained
with the Agent, a Lender or Affiliate of a Lender as security for the Secured
Obligations. Notwithstanding the foregoing, until such time as the Agent shall
otherwise instruct the Lender or the Affiliate of a Lender maintaining such
account, the Borrowers shall be entitled to direct the investment of the funds
deposited therein. The Borrowers agree that they will not at any time (x) sell
or otherwise dispose of any interest in any Investment Account or any funds held
therein other than by application thereof to any Secured Obligation, or (y)
create or permit to exist any Lien upon or with respect to any Investment
Account or any funds held therein, except as provided in or contemplated by this
Agreement. The Borrowers agree that at any time, and from time to time, at the
expense of the Borrowers, the Borrowers will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Agent or any Lender may request, in order to
perfect and protect any security interest in any Investment Account granted or
purported to be granted hereby or to enable the Borrowers, for their respective
benefit and the benefit of the Lenders, to exercise and enforce its rights and
remedies hereunder with respect to such Investment Account.
SECTION 4.16 Allocation of Payments from Borrowers. All monies to be
applied to the Secured Obligations, whether such monies represent voluntary
payments by the Borrowers or are received pursuant to demand for payment or
realized from any disposition of Collateral, shall be allocated among the Agent
and such of the Lenders and other holders of the Secured Obligations as are
entitled thereto (and, with respect to monies allocated to the Lenders, on a
Ratable basis unless otherwise provided in this SECTION 4.16): (i) first, to
BankBoston to pay
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principal and accrued interest on any portion of any Non-Ratable Loan which
BankBoston may have advanced on behalf of any Lender and for which BankBoston
has not been reimbursed by such Lender or the Borrowers; (ii) second, to the
Agent to pay the amount of expenses that have not been reimbursed to the Agent
by the Borrowers or the Lenders, together with interest accrued thereon; (iii)
third, to the Agent to pay any indemnified amount that has not been paid to the
Agent by the Borrowers or the Lenders, together with interest accrued thereon;
(iv) fourth, to the Agent to pay any fees due and payable to the Agent under
this Agreement; (v) fifth, to the Lenders for any indemnified amount that they
have paid to the Agent and for any expenses that they have reimbursed to the
Agent; (vi) sixth, to the Lenders in payment of the unpaid principal and accrued
interest in respect of the Loans and any other Secured Obligations then
outstanding and held by any Lender to be shared among Lenders on a Ratable
basis, or on such other basis as may be agreed upon in writing by all of the
Lenders (which agreement or agreements may be entered into without notice to or
the consent or approval of the Borrowers); and (vii) seventh, to the holders of
the other Secured Obligations who are not Lenders on a pro rata basis. The
allocations set forth in this SECTION 4.16 are solely to determine the rights
and priorities of the Agent and the Lenders as among themselves and may be
changed by the Agent and the Lenders without notice to or the consent or
approval of the Borrowers or any other Person. Whenever allocation is made
pursuant to this SECTION 4.16 to the holder of Secured Obligations in which
another Lender acquires a participation, the monies received by such holder
shall be shared as between such holder and such participants on a Ratable basis.
SECTION 4.17 Borrowers' Representative. ▇▇▇▇▇▇▇ shall act under this
Agreement as the representative of all Borrowers, and each other Borrower hereby
appoints ▇▇▇▇▇▇▇ as its representative, hereunder, for all purposes, including,
without being limited to, requesting borrowings and receiving account statements
and other notices and communications to the Borrowers (or any of them) from the
Agent or any Lender. The Agent and the Lenders may rely, and shall be fully
protected in relying, on any request for borrowing, disbursement instruction,
report, information or any other notice or communication made or given by
▇▇▇▇▇▇▇, whether in its own name, on behalf of any other Borrower or on behalf
of "the Borrowers," and neither the Agent nor any Lender shall have any
obligation to make any inquiry or request any confirmation from or on behalf of
any other Borrower as to the binding effect on it of any such request,
instruction, report, information, notice or communication, nor shall the joint
and several character of the Borrowers' liability for the Secured Obligations be
affected. The Agent and each Lender intend to maintain a single Loan Account in
the name of "The ▇.▇. ▇▇▇▇▇▇▇ Company, Inc." hereunder and each Borrower
expressly agrees to such arrangement and confirms that such arrangement shall
have no effect on the joint and several character of its liability for the
Secured Obligations.
SECTION 4.18 Joint and Several Liability.
(a) Joint and Several Liability. The Secured Obligations shall
constitute one joint and several direct and general obligation of all of the
Borrowers. Notwithstanding anything to the contrary contained herein, each of
the Borrowers shall be jointly and severally, with each other Borrower, directly
and unconditionally liable to the Agent and the Lenders for all Secured
Obligations and shall have the obligations of co-maker with respect to the
Loans, the Notes, and the Secured Obligations, it being agreed that the advances
to each Borrower inure to the benefit
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of all Borrowers, and that the Agent and the Lenders are relying on the joint
and several liability of the Borrowers as co-makers in extending the Loans
hereunder. Each Borrower hereby unconditionally and irrevocably agrees that upon
default in the payment when due (whether at stated maturity, by acceleration or
otherwise) of any principal of, or interest on, any Loan or other Secured
Obligation payable to the Agent or any Lender, it will forthwith pay the same,
without notice or demand.
(b) No Modification or Release of Obligations. No payment or payments
made by any of the Borrowers or any other Person or received or collected by the
Agent or any Lender from any of the Borrowers or any other Person by virtue of
any action or proceeding or any set-off or appropriation or application at any
time or from time to time in reduction of or in payment of the Secured
Obligations shall be deemed (except to the extent Secured Obligations are
satisfied) to modify, release or otherwise affect the liability of each Borrower
under this Agreement, which shall remain liable for the Secured Obligations
until the Secured Obligations are paid in full and the Commitments are
terminated.
SECTION 4.19 Obligations Absolute. Each Borrower agrees that the
Secured Obligations will be paid strictly in accordance with the terms of the
Loan Documents, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of the
Agent or any Lender with respect thereto. All Secured Obligations shall be
conclusively presumed to have been created in reliance hereon. The liabilities
under this Agreement shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any Loan Documents or any
other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payments of, or in any
other term of, all or any part of the Secured Obligations, or any other
amendment or waiver thereof or any consent to departure therefrom, including,
but not limited to, any increase in the Secured Obligations resulting from the
extension of additional credit to any Borrower or otherwise;
(c) any taking, exchange, release or non-perfection of any collateral,
or any release or amendment or waiver of or consent to departure from any
guaranty for all or any of the Secured Obligations;
(d) any change, restructuring or termination of the corporate structure
or existence of any Borrower; or
(e) any other circumstance which might otherwise constitute a defense
available to, or a discharge of, any Borrower or a guarantor.
This Agreement shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Secured Obligations is rescinded or
must otherwise be returned by the Agent or any Lender upon the insolvency,
bankruptcy or reorganization of any Borrower or otherwise, all as though such
payment had not been made.
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SECTION 4.20 Waiver of Suretyship Defenses. Each Borrower agrees that
the joint and several liability of the Borrowers provided for in SECTION 4.18
shall not be impaired or affected by any modification, supplement, extension or
amendment or any contract or agreement to which the other Borrowers may
hereafter agree (other than an agreement signed by the Agent and the Lenders
specifically releasing such liability), nor by any delay, extension of time,
renewal, compromise or other indulgence granted by the Agent or any Lender with
respect to any of the Secured Obligations, nor by any other agreements or
arrangements whatever with the other Borrowers or with anyone else, each
Borrower hereby waiving all notice of such delay, extension, release,
substitution, renewal, compromise or other indulgence, and hereby consenting to
be bound thereby as fully and effectually as if it had expressly agreed thereto
in advance. The liability of each Borrower is direct and unconditional as to all
of the Secured Obligations, and may be enforced without requiring the Agent or
any Lender first to resort to any other right, remedy or security. Each Borrower
hereby expressly waives promptness, diligence, notice of acceptance and any
other notice with respect to any of the Secured Obligations, the Notes, this
Agreement or any other Loan Document (other than notices expressly required in
this Agreement or by any of the Loan Documents) and any requirement that the
Agent or any Lender protect, secure, perfect or insure any Lien or any property
subject thereto or exhaust any right or take any action against any Borrower or
any other Person or any collateral, including any rights any Borrower may
otherwise have under the New York General Obligations Law.
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ARTICLE 5
CONDITIONS PRECEDENT
SECTION 5.1 Conditions Precedent to Initial Loans. Notwithstanding any
other provision of this Agreement, this Agreement shall not become effective nor
shall the Lenders have any obligation to make the Initial Loans unless and until
the following conditions precedent are satisfied:
(a) Documents. The Agent shall have received on or before the Effective
Date the following, each in form and substance satisfactory to the Agent, its
special counsel and the Lenders and (except for the Notes) in sufficient copies
for each Lender:
(1) Agreement. This Agreement, duly executed and delivered by
the Borrowers and the other Lenders;
(2) Notes. The Notes, each dated the Effective Date and duly
executed and delivered by the Borrowers;
(3) Articles, Bylaws and Resolutions. A certificate, dated the
Effective Date, of the Secretary or an Assistant Secretary of each Loan
Party, as to and having attached thereto copies of the articles of
incorporation and by-laws and shareholder agreements of such Loan Party
as in effect on the Effective Date and all corporate action, including
shareholder approval, if necessary, taken by such Loan Party and/or its
shareholders to authorize the execution, delivery and performance of
this Agreement and the other Loan Documents to which such Loan Party is
a party and, in the case of each Borrower, the Borrowings under this
Agreement;
(4) Incumbency Certificates. A certificate, dated the
Effective Date, of the Secretary or an Assistant Secretary of each Loan
Party, as to the incumbency and specimen signatures of each of the
officers of such Loan Party who is authorized to execute and deliver
this Agreement or any other Loan Document on behalf of such Loan Party
or any document, certificate or instrument to be delivered in
connection with this Agreement or the other Loan Documents to which
such Loan Party is a party and, in the case of each Borrower, to
request Borrowings under this Agreement;
(5) Good Standing Certificates. A certificate as of a recent
date evidencing the good standing of each Loan Party in the
jurisdiction of its incorporation and in each other jurisdiction in
which it is qualified as a foreign corporation to transact business;
(6) Financing Statements. The Financing Statements to be
delivered by the Loan Parties duly executed and delivered by the Loan
Parties, and evidence satisfactory to the Agent that the Financing
Statements have been filed in each jurisdiction where such filing may
be necessary or appropriate to perfect the Security Interest or, at the
Agent's discretion, in appropriate form for such filing;
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(7) Landlord's Waiver. Landlord's waiver and consent
agreements duly executed on behalf of each landlord of real property on
which any Collateral is located, except to the extent that the Rent
Reserve appropriately reflects the absence of such a waiver;
(8) Schedules of Inventory and Receivables. A Schedule of
Inventory and a Schedule of Receivables, each prepared as of a recent
date;
(9) Insurance Coverage. Certificates or binders of insurance
relating to each of the policies of insurance covering any of the
Collateral together with loss payable clauses which comply with the
terms of SECTION 8.8(b);
(10) Solvency Letter. A certificate of the chief financial
officer of ▇▇▇▇▇▇▇ as to the solvency of the Borrowers, having attached
thereto the pro forma opening balance sheet and projections referred to
in SECTION 6.1(n) and a pro forma opening balance sheet of the
Borrowers prepared on the same basis as such first-mentioned pro forma
but reflecting the fair values of the Borrowers' assets;
(11) Agency Account Agreements. Such Agency Account Agreements
duly executed by the applicable Clearing Bank and Loan Party and
confirmations of effective directions to pay the Agent affecting each
account of a Loan Party to which Collateral proceeds are deposited, as
may be required by the Agent;
(12) Borrowing Base Certificate. A Borrowing Base Certificate
prepared as of the Effective Date duly executed and delivered by the
Financial Officer demonstrating Loan Availability of not less than
$25,000,000, after giving effect to the Initial Loans, the consummation
of the CPW Acquisition and the ITCO Merger, the issuance of the Senior
Notes and the Class B Stock, the repayment of Debt of ▇▇▇▇▇▇▇ and other
Loan Parties, and the completion of the other transactions contemplated
by this Agreement, the CPW Acquisition Documents or the ITCO Merger
Documents to occur on or before the Effective Date;
(13) Notice of Borrowing. The Initial Notice of Borrowing
dated the Effective Date from the Borrowers to the Agent requesting the
Initial Loans and specifying the method of disbursement;
(14) Financial Statements. Copies of all the financial
statements referred to in SECTION 6.1(n) and meeting the requirements
thereof;
(15) Officer's Certificate. A certificate of the President or
a Vice President of ▇▇▇▇▇▇▇ stating that, to the best of his knowledge
and based on an examination sufficient to enable him to make an
informed statement, (a) all of the representations and warranties made
or deemed to be made under this Agreement are true and correct as of
the Effective Date, both with and without giving effect to the Initial
Loans and the application of the proceeds thereof, and (b) as of the
Effective Date, no Default or Event of Default exists;
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(16) Release of Liens. Payoff letters as of the Effective Date
or the Business Day next prior to the Effective Date, from Fleet, in
its capacity as a lender to ITCO Logistics and its Subsidiaries, and
Deutsche Bank, in its capacity as a lender to CPW, together with
evidence satisfactory to the Agent of the release and termination of
(or agreement to release and terminate or to assign to the Agent at its
request) all Liens other than Permitted Liens;
(17) Fact Certificate. A certification from an appropriate
officer of each Borrower as to such factual matters as shall be
required by the Agent;
(18) Other Loan Documents. Copies of each of the other Loan
Documents dated the Effective Date, duly executed by the parties
thereto with evidence satisfactory to the Agent and its counsel of the
due authorization, binding effect and enforceability of each such Loan
Document on each such party and such other documents and instruments as
the Agent may reasonably request;
(19) Legal Opinions. An opinion dated the Effective Date of
each of J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, general counsel of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ &
▇▇▇▇▇, counsel for the Borrowers, ▇▇▇▇ & ▇▇▇▇, counsel for Winston,
▇▇▇▇▇▇ & ▇▇▇▇, P.A., counsel for ITCO, Jackson, Tufts, ▇▇▇▇ Black,
counsel for CPW and of such local counsel as the Agent shall deem
necessary or desirable, opining as to such matters in connection with
this Agreement as the Agent or its counsel may reasonably request;
(20) Fees. The Agent shall have received from the Borrowers
all of the fees payable on the Effective Date referred to herein;
(21) Priority. The Agent shall have received satisfactory
evidence that the Agent (for the benefit of Lenders) has a valid and
perfected first priority security interest as of such date in all of
the Collateral, subject only to Permitted Liens; and
(22) Fleet Financing. A letter agreement, in form and
substance satisfactory to the Agent, each Lender and each Loan Party,
setting forth the conditions pursuant to which the Fleet Financing will
be permitted by the Lenders and the Agent to remain in effect, subject
to the conditions of such letter agreement and SECTION 12.1(p) duly
executed by each Lender and each Loan Party.
(b) Litigation. The Agent shall have received evidence satisfactory to
it that no action, proceeding, investigation, regulation or legislation, shall
have been instituted, threatened or proposed before any court, governmental
agency or legislative body to enjoin, restrain or prohibit, or to obtain
substantial damages in respect of, or which is related to or arises out of, the
CPW Acquisition, the ITCO Acquisition, this Agreement, or the consummation of
the transactions contemplated thereby or hereby, or which may otherwise have a
Materially Adverse Effect.
(c) CPW Acquisition. The CPW Acquisition shall have been consummated in
accordance with the terms of the CPW Acquisition Agreement, without any waiver
of any
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material provision thereof by ▇▇▇▇▇▇▇; and the Agent shall have received copies
of the CPW Acquisition Agreement and all agreements, documents and instruments
delivered in connection with the consummation of the transactions thereunder,
including, without being limited to, copies of the legal opinions issued in
connection therewith, addressed to the Agent and the Lenders or accompanied by
reliance letters in favor of the Agent and the Lenders.
(d) ITCO Merger. The ITCO Merger shall have been consummated in
accordance with the terms of the ITCO Merger Agreement, without any waiver of
any material provision thereof by ▇▇▇▇▇▇▇; and the Agent shall have received
copies of the ITCO Merger Agreement and all other agreements, documents and
instruments delivered in connection with the consummation of the transactions
contemplated thereby, including, without being limited to, copies of the legal
opinions issued in connection therewith, addressed to the Agent and the Lenders
or accompanied by reliance letters in favor of the Agent and the Lenders.
(e) Senior Notes. ▇▇▇▇▇▇▇ shall have received gross proceeds equal to
at least $100,000,000 from the issuance of Senior Notes in accordance with the
terms and provisions of the Senior Note Indenture and the Agent shall have
received copies of the Senior Note Indenture and all instruments (other than the
Senior Notes), certificates and other documents delivered in connection with the
issuance of the Senior Notes thereunder.
(f) No Material Adverse Change. There shall not have occurred any
event or series of events or circumstances or group of circumstances which
individually or in the aggregate, in the sole judgment of the Agent, would have
a Materially Adverse Effect.
SECTION 5.2 All Loans; Letters of Credit. The obligation of the
Lenders to make (but not to continue or convert any outstanding Loan, which
shall be subject to the provisions of SECTION 4.12) any Loan hereunder,
including the Loans constituting the Initial Loans and all subsequent Loans, and
of BankBoston to issue any Letter of Credit are further subject to the
following:
(a) at such time, both with and without giving effect to the Loans to
be made or Letters of Credit to be issued at such time and the application of
the proceeds thereof, (1) no Default or Event of Default shall exist nor (2)
shall any event have occurred or condition exist that could reasonably be
expected to have a Materially Adverse Effect, and
(b) the corporate actions of the Loan Parties referred to in SECTION
5.1(a)(3) shall remain in full force and effect and the incumbency of officers
shall be as stated in the certificates of incumbency delivered pursuant to
SECTION 5.1(a)(4) or as subsequently modified and reflected in a certificate of
incumbency delivered to the Agent.
Each request or deemed request for any Borrowing or other advance or submission
of any application for any Letter of Credit hereunder shall be deemed to be a
certification by the Borrowers to the Agent and the Lenders as to the matters
set forth in SECTION 5.2(a) and (b) and the Agent and the Lenders may, without
waiving either condition, consider the conditions specified in SECTIONS 5.2(a)
and (b) fulfilled and a representation by the Borrowers to such effect made, if
no written
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notice to the contrary is received by the Agent prior to the making of the Loan
then to be made or the issuance of the Letter of Credit so requested.
SECTION 5.3 Conditions as Covenants. In the event that the Lenders
permit this Agreement to become effective and make the Initial Loans or permit
BankBoston to issue a Letter of Credit prior to the satisfaction of all
conditions precedent set forth in SECTION 5.1, and such conditions are not
waived in writing by the Agent, the Borrowers shall nevertheless cause such
condition or conditions to be satisfied within thirty days after the making of
such Initial Loans or the issuance of such Letter of Credit.
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ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BORROWERS
SECTION 6.1 Representations and Warranties. The Borrowers represent
and warrant to the Agent and to the Lenders as follows:
(a) Organization; Power; Qualification. Each Borrower and each of its
Subsidiaries is a corporation, duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, having the power
and authority to own its properties and to carry on its business as now being
and hereafter proposed to be conducted and is duly qualified and authorized to
do business in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification or authorization. The
jurisdictions in which each of the Borrowers and each of their respective
Subsidiaries is qualified to do business as a foreign corporation are listed on
SCHEDULE 6.1(a).
(b) Capitalization; Shareholder Agreements. The outstanding capital
stock of the Borrowers has been duly and validly issued and is fully paid and
nonassessable, and the number and owners of such shares of capital stock of the
Borrowers are set forth on SCHEDULE 6.1(b). Except as set forth on SCHEDULE
6.1(b), the issuance and sale of the Borrowers' capital stock have been
registered or qualified under applicable federal and state securities laws or
are exempt therefrom and there are no shareholders agreements, options,
subscription agreements or other agreements or understandings to which any
Borrower is a party in effect with respect to the capital stock of a Borrower,
including, without limitation, agreements providing for special voting
requirements or arrangements for approval of corporate actions or other matters
relating to corporate governance or restrictions on share transfer or providing
for the issuance of any securities convertible into shares of the capital stock
of any Borrower, any warrants or other rights to acquire any shares or
securities convertible into such shares, or any agreement that obligates a
Borrower, either by its terms or at the election of any other Person, to
repurchase such shares under any circumstances.
(c) Subsidiaries. SCHEDULE 6.1(c) correctly sets forth the name of
each Subsidiary of any Borrower, its jurisdiction of incorporation, the name of
its immediate parent or parents, and the percentage of its issued and
outstanding securities owned by the Borrowers or any other Subsidiary of any
Borrower. Except as set forth on SCHEDULE 6.1(c),
(i) no Subsidiary has issued any securities convertible into
shares of such Subsidiary's capital stock or any options, warrants or
other rights to acquire any shares or securities convertible into such
shares,
(ii) the outstanding stock and securities of each Subsidiary
are owned by a Borrower or a Wholly Owned Subsidiary of a Borrower, or
by a Borrower and one or more of its Wholly Owned Subsidiaries, free
and clear of all Liens, warrants, options and rights of others of any
kind whatsoever, and
(iii) no Borrower has any Subsidiaries.
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The outstanding capital stock of each Subsidiary has been duly and validly
issued and is fully paid and nonassessable by the issuer, and the number and
owners of the shares of such capital stock are set forth on SCHEDULE 6.1(c).
(d) Authorization of Agreement, Notes, Loan Documents and Borrowing.
Each Loan Party has the right and power, and has taken all necessary action to
authorize it, to execute, deliver and perform this Agreement and each of the
Loan Documents to which it is a party in accordance with their respective terms.
This Agreement and each of the Loan Documents have been duly executed and
delivered by the duly authorized officers of each Loan Party and each is, or
each when executed and delivered in accordance with this Agreement will be, a
legal, valid and binding obligation of each such Loan Party, enforceable in
accordance with its terms.
(e) Compliance of Agreement, Notes, Loan Documents and Borrowing with
Laws, Etc. Except as set forth on SCHEDULE 6.1(e), the execution, delivery and
performance of this Agreement and each of the Loan Documents in accordance with
their respective terms and the borrowings hereunder do not and will not, by the
passage of time, the giving of notice or otherwise,
(i) require any Governmental Approval or violate any
Applicable Law relating to a Borrower or any of its Subsidiaries,
(ii) conflict with, result in a breach of or constitute a
default under the articles or certificate of incorporation, by-laws or
any shareholders' agreement of a Borrower or any of its Subsidiaries,
(iii) conflict with, result in a breach of or constitute a
default under any material provisions of any indenture, agreement or
other instrument to which a Borrower or any of its Subsidiaries is a
party or by which a Borrower, any of its Subsidiaries or any of any
Borrower's or such Subsidiaries' property may be bound or any
Governmental Approval relating to a Borrower or any of its
Subsidiaries, or
(iv) result in or require the creation or imposition of any
Lien upon or with respect to any property now owned or hereafter
acquired by a Borrower other than the Security Interest.
(f) Business. Each Borrower is engaged in the business described on
SCHEDULE 6.1(f).
(g) Compliance with Law; Governmental Approvals. Except as set forth in
SCHEDULE 6.1(g), each Borrower and each of its Subsidiaries
(i) has all Governmental Approvals, including permits relating
to federal, state and local Environmental Laws, ordinances and
regulations, required by any Applicable Law for it to conduct its
business, each of which is in full force and effect, is final and not
subject to review on appeal and is not the subject of any
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pending or, to the knowledge of any Borrower, threatened attack by
direct or collateral proceeding, and
(ii) is in compliance with each Governmental Approval
applicable to it and in compliance with all other Applicable Laws
relating to it, including, without being limited to, all Environmental
Laws and all occupational health and safety laws applicable to any
Borrower, any of its Subsidiaries or their respective properties,
except for instances of noncompliance which would not, singly or in the
aggregate, cause a Default or Event of Default or have a Materially Adverse
Effect and in respect of which appropriate reserves have been established.
(h) Title to Properties. Except as set forth in SCHEDULE 6.1(h), each
Borrower and each of the Subsidiaries has valid and legal title to or leasehold
interest in all personal property, Real Estate and other assets used in its
business, including, but not limited to, those reflected on the most recent
balance sheet of the Borrowers delivered pursuant to SECTION 6.1(n).
(i) Liens. Except as set forth in SCHEDULE 6.1(i), none of the
properties and assets of any Borrower or any Subsidiary is subject to any Lien,
except Permitted Liens. Other than the Financing Statements, no financing
statement under the UCC of any State or other instrument evidencing a Lien which
names a Borrower or any Subsidiary as debtor has been filed (and has not been
terminated) in any State or other jurisdiction, and neither any Borrower nor any
Subsidiary has signed any such financing statement or other instrument or any
security agreement authorizing any secured party thereunder to file any such
financing statement or instrument, except to perfect those Liens listed on
SCHEDULE 6.1(i).
(j) Indebtedness and Guaranties. SCHEDULE 6.1(j) is a complete and
correct listing of all (i) Debt and (ii) Guaranties of each Borrower and each of
its Subsidiaries. Each Borrower and each of its Subsidiaries has performed and
is in compliance in all material respects with all of the terms of such Debt and
Guaranties and all instruments and agreements relating thereto, and no default
or event of default, or event or condition which with notice or lapse of time,
or both, would constitute such a default or event of default, exists with
respect to any such Debt or Guaranty.
(k) Litigation. Except as set forth on SCHEDULE 6.1(k), as of the
Effective Date there are no actions, suits or proceedings pending (nor, to the
knowledge of any Borrower, are there any actions, suits or proceedings
threatened, or any reasonable basis therefor) against or in any other way
relating to or affecting a Borrower or its Subsidiaries or any of their
respective properties in any court or before any arbitrator of any kind or
before or by any governmental body, EXCEPT actions, suits or proceedings of the
character normally incident to the kind of business conducted by the Borrowers
and their Subsidiaries which, if adversely determined, would not singly or in
the aggregate have a Materially Adverse Effect, and there are no strikes or
walkouts in progress, pending or contemplated relating to any labor contracts to
which a Borrower or any of its Subsidiaries is a party, relating to any labor
contracts being negotiated, or otherwise.
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(l) Tax Returns and Payments. Except as set forth on SCHEDULE 6.1(l),
all United States federal, state and local as well as foreign national,
provincial and local and other tax returns of each Borrower and each of its
Subsidiaries required by Applicable Law to be filed have been duly filed, and
all United States federal, state and local and foreign national, provincial and
local and other taxes, assessments and other governmental charges or levies upon
a Borrower or any of its Subsidiaries or their respective property, income,
profits and assets which are due and payable have been paid, except any such
nonpayment which is at the time permitted under SECTION 9.6. The charges,
accruals and reserves on the books of the Borrowers and each Subsidiary as of
the Effective Date in respect of United States federal, state and local and
foreign national, provincial and local taxes for all fiscal years and portions
thereof since January 1, 1988 are in the judgment of the Borrowers adequate, and
the Borrowers know of no reason to anticipate any additional assessments for any
of such years which, singly or in the aggregate, might have a Materially Adverse
Effect.
(m) Burdensome Provisions. Except as set forth on SCHEDULE 6.1(m),
neither Borrower nor any Subsidiary is a party to any indenture, agreement,
lease or other instrument, or subject to any charter or corporate restriction,
Governmental Approval or Applicable Law compliance with the terms of which is
reasonably likely to have a Materially Adverse Effect.
(n) Financial Statements.
(i) The Borrowers have furnished to the Agent and the Lenders
(1) the audited closing balance sheet of Winston as of May 7, 1997, (2)
copies of ▇▇▇▇▇▇▇'▇ consolidating and audited consolidated balance
sheets as at December 31, 1997 and the related consolidating and
audited consolidated statements of income, cash flow and shareholders
equity for the Fiscal Year then ended, which financial statements
present fairly and in all material respects in accordance with GAAP the
financial positions of ▇▇▇▇▇▇▇ and its consolidated Subsidiaries as at
December 31, 1997, and the results of operations of ▇▇▇▇▇▇▇ and its
consolidated Subsidiaries for such Fiscal Year, together with the
report of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP on such consolidated financial
statements, (3) copies of the audited consolidated balance sheet of CPW
and its consolidated Subsidiaries as of October 31, 1997 and the
related audited consolidated statements of income, cash flow and
stockholders equity of CPW and its consolidated Subsidiaries for its
fiscal year then ended, reported on by KPMG Peat Marwick L.L.P. and of
the unaudited consolidated balance sheet of CPW and its consolidated
Subsidiaries as of January 31, 1998 and the related unaudited
consolidated statements of income, cash flow and stockholders equity of
CPW and its consolidated Subsidiaries for the fiscal quarter of CPW
then ended, (5) copies of the audited consolidated balance sheet of
ITCO Logistics and its consolidated Subsidiaries as of September 30,
1997 and the related audited consolidated statements of income, cash
flow and stockholders equity of ITCO Logistics and its consolidated
Subsidiaries for its fiscal year then ended, reported on by Ernst &
Young L.L.P. and of the unaudited consolidated balance sheet of ITCO
Logistics and its consolidated Subsidiaries as of December 31, 1997 and
the related unaudited consolidated statements of income, cash flow and
stockholders equity of ITCO Logistics and its consolidated Subsidiaries
for the fiscal quarter of ITCO then ended,
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and (6) a pro forma opening consolidated balance sheet of ▇▇▇▇▇▇▇ and
its Consolidated Subsidiaries (in the form attached to the solvency
certificate delivered pursuant to SECTION 5.1(a)(10)), as of a date on
or about the Effective Date, giving effect to the consummation of the
CPW Acquisition, the ITCO Merger, the issuance of the Senior Notes, and
the Class B Stock, the repayment of Debt of CPW and its Subsidiaries,
of ITCO Logistics and its Subsidiaries and of the Acquisition Sub Debt
(as defined in the Existing Loan Agreement), the making of the Initial
Loans, and all related transactions contemplated by this Agreement, the
CPW Acquisition Documents, the ITCO Merger Documents or the Senior Note
Indenture to occur on or before the Effective Date.
(ii) Except as set forth on SCHEDULE 6.1(n) or as disclosed or
reflected in the financial statements described in CLAUSE (i) above,
neither ▇▇▇▇▇▇▇ nor any other Borrower nor any of their respective
Subsidiaries has any material liabilities, contingent or otherwise.
(iii) The pro forma balance sheet described in SECTION
6.1(n)(i)(6) presents fairly the Borrowers' good faith estimate of
their consolidated financial condition of ▇▇▇▇▇▇▇, the other Borrowers
and their respective Subsidiaries as of the Effective Date on the basis
recited therein, subject to normal year-end adjustments and to purchase
accounting adjustments.
(o) Adverse Change. Since the date of the latest financial statements
referred to in SECTION 6.1(n)(i),
(i) no material adverse change has occurred in the business,
assets, liabilities, financial condition, results of operations or
business prospects of such ▇▇▇▇▇▇▇, the other Borrowers and their
respective Subsidiaries taken as a whole, and
(ii) no event has occurred or failed to occur which has had,
or may have, singly or in the aggregate, a Materially Adverse Effect.
(p) ERISA. Neither any Borrower nor any Related Company maintains or
contributes to any Benefit Plan other than those listed on SCHEDULE 6.1(p).
Except as set forth on SCHEDULE 6.1(p), and subject to correction of possible
Remediable Defects, each Benefit Plan is in substantial compliance with ERISA
and the Code, including but not limited to those provisions thereof relating to
reporting and disclosure, and neither any Borrower nor any Related Company has
received any notice asserting that a Benefit Plan is not in compliance with
ERISA. No material liability to the PBGC or to a Multiemployer Plan has been, or
is expected to be, incurred by any Borrower or any Related Company. Except as
set forth on SCHEDULE 6.1(p), and subject to correction of possible Remediable
Defects, each Benefit Plan intended to qualify under Section 401(a) of the Code
so qualifies and any related trust is exempt from federal income tax under
Section 501(a) of the Code. A favorable determination letter from the IRS has
been issued or applied for with respect to each such plan and trust and nothing
that is not a Remediable Defect has occurred since the date of such
determination letter that would adversely affect such qualification or
tax-exempt status. No Benefit Plan subject to the minimum funding
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standards of the Code has failed to meet such standards. Neither the Borrower or
any Related Company has transferred any pension plan liability in a transaction
that could be subject to Sections 4069 or 4212(c) of ERISA. Except as set forth
on SCHEDULE 6.1(p), neither any Borrower nor any Related Company has any
liability, actual or contingent, with respect to any Benefit Plan other than to
make payments to the Benefit Plan in accordance with its terms, and there are no
pending or threatened claims against a Benefit Plan. No non-exempt prohibited
transaction with the meaning of Section 4975 of the Code or Section 406 of ERISA
has occurred with respect to a Benefit Plan. Except under plans listed on
SCHEDULE 6.1(p), no employee or former employee of any Borrower or any Related
Company is or may become entitled to any benefit under a Benefit Plan that is a
"welfare plan" within the meaning of Section 3(1) of ERISA following such
employee's termination of employment. Except as set forth on SCHEDULE 6.1(p),
each such welfare plan that is a group health plan has been operated in
compliance with the provision of Section 4980B of the Code and Sections 601-609
of ERISA and any applicable provisions of state law that are similar.
(q) Absence of Defaults. No Borrower nor any Subsidiary is in default
under its articles or certificate of incorporation or by-laws and no event has
occurred, which has not been remedied, cured or waived,
(i) which constitutes a Default or an Event of Default, or
(ii) which constitutes, or which with the passage of time or
giving of notice, or both, would constitute, a default or event of
default by a Borrower or any of its Subsidiaries under any material
agreement (other than this Agreement) or judgment, decree or order to
which such Borrower or any of its Subsidiaries is a party or by which
such Borrower, any of its Subsidiaries or any of such Borrower's or any
of its Subsidiaries' properties may be bound or which would require a
Borrower or any Subsidiary to make any payment under any thereof prior
to the scheduled maturity date therefor, except, in the case only of
any such agreement, for alleged defaults which are being contested in
good faith by appropriate proceedings and with respect to which
reserves in respect of a Borrower's or such Subsidiary's reasonably
anticipated liability have been established on the appropriate books.
(r) Accuracy and Completeness of Information.
(i) As of the Effective Date, no fact is known to the
Borrowers which has had, or is reasonably likely in the future to have
(so far as the Borrowers can reasonably foresee), a Materially Adverse
Effect which has not been set forth in the financial statements or
disclosure delivered to the Agent and the Lenders prior to the
Effective Date. No document furnished or written statement made to the
Agent or any Lender by the Borrowers (or any of them) prior to the
Agreement Date, in connection with the negotiation, preparation or
execution of this Agreement or any of the Loan Documents contained,
except to the extent corrected or superseded prior to the Agreement
Date, any untrue statement of a fact material to the creditworthiness
of a Borrower or omitted to state a material fact necessary in order to
make the statements contained therein not misleading.
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(ii) The Borrowers have no reason to believe that any document
furnished or written statement made to the Agent or any Lender prior to
the Agreement Date by any Person other than the Borrowers in connection
with the negotiation, preparation or execution of this Agreement or any
of the Loan Documents contained any incorrect statement of a material
fact or omitted to state a material fact necessary in order to make the
statements made, in light of the circumstances under which they were
made, not misleading, that has not been corrected or superseded prior
to the Effective Date.
(s) Solvency. In each case after giving effect to the Debt represented
by the Loans outstanding and to be incurred, the transactions contemplated by
this Agreement, the CPW Acquisition Documents and the ITCO Merger Documents, the
issuance of the Senior Notes and the Class B Stock, the repayment of the
Acquisition Sub Debt (as defined in the Existing Loan Agreement) and other Debt
of ▇▇▇▇▇▇▇, CPW, ITCO Logistics and their respective Subsidiaries, each Borrower
and each of its Subsidiaries is solvent, having assets of a fair salable value
which exceeds the amount required to pay its debts as they become absolute and
matured (including contingent, subordinated, unmatured and unliquidated
liabilities), and each Borrower and each of its Subsidiaries is able to and
anticipates that it will be able to meet its debts as they mature and has
adequate capital to conduct the business in which it is or proposes to be
engaged.
(t) Receivables.
(i) Status.
(1) Each Receivable reflected in the computations
included in any Borrowing Base Certificate meets the criteria
enumerated in CLAUSES (a) through (p) of the definition
"Eligible Receivables," except as disclosed in such Borrowing
Base Certificate or as disclosed in a timely manner in a
subsequent Borrowing Base Certificate or otherwise in writing
to the Agent.
(2) No Borrower has any knowledge of any fact or
circumstance not disclosed to the Agent in a Borrowing Base
Certificate or otherwise in writing which would impair the
validity or collectibility of any Receivable of $250,000 or
more or of Receivables which (regardless of the individual
amount thereof) aggregate $500,000 or more.
(ii) Chief Executive Office. The chief executive office of
each Borrower and the books and records relating to the Receivables are
located on the Effective Date at the address or addresses set forth on
SCHEDULE 6.1(t).
(u) Inventory.
(i) Schedule of Inventory. All Inventory included in any
Schedule of Inventory or Borrowing Base Certificate delivered to the
Agent on or prior to the Effective Date meets the criteria enumerated
in CLAUSES (a) through (g) of the
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definition "Eligible Inventory," except as disclosed in such Schedule
of Inventory or Borrowing Base Certificate.
(ii) Condition. All Inventory is in good condition, meets all
standards imposed by any governmental agency, or department or division
thereof, having regulatory authority over such goods, their use or
sale, and is currently either usable or salable in the normal course of
the applicable Borrower's business, except to the extent reserved
against in the financial statements referred to in SECTION 6.1(n) or a
Borrowing Base Certificate delivered pursuant to SECTION 5.1.
(iii) Location. All Inventory is located at a Permitted
Inventory Location or is in transit to a Permitted Inventory Location.
(v) Corporate and Fictitious Names. Except as otherwise disclosed on
SCHEDULE 6.1(v), during the five-year period preceding the Agreement Date,
neither any Borrower nor any predecessor thereof has been known as or used any
corporate or fictitious name other than the corporate name of such Borrower on
the Effective Date.
(w) Federal Reserve Regulations. Neither any Borrower nor any of its
Subsidiaries is engaged, principally or as one of its important activities, in
the business of extending credit for the purpose of "purchasing" or "carrying"
any "margin stock" (as each of the quoted terms is defined or used in
Regulations G and U of the Board of Governors of the Federal Reserve System).
(x) Investment Company Act. No Borrower is an "investment company" or a
company "controlled" by an "investment company" (as each of the quoted terms is
defined or used in the Investment Company Act of 1940, as amended).
(y) Employee Relations. The Borrowers and each Subsidiary have stable
work forces in place and none of them is, except as set forth on SCHEDULE
6.1(y), party to any collective bargaining agreement nor has any labor union
been recognized as the representative of a Borrower's or any of its
Subsidiaries' employees, and the Borrowers know of no pending, threatened or
contemplated strikes, work stoppage or other labor disputes involving a
Borrower's or any Subsidiary's employees.
(z) Proprietary Rights. Each Borrower owns or has the right to use all
Proprietary Rights necessary or desirable in the conduct of its business as
conducted on the Agreement Date and as expected on the Agreement Date to be
conducted in the future. To the best of the Borrowers' knowledge, none of such
Proprietary Rights infringes on or conflicts with any other Person's property,
and no other Person's property infringes on or conflicts with the Proprietary
Rights.
(aa) Trade Names. All trade names or styles under which any Loan Party
sells Inventory or creates Receivables, or to which instruments in payment of
Receivables are made payable, all as of the Effective Date, are listed on
SCHEDULE 6.1(aa).
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(bb) Bank Accounts. Attached hereto as SCHEDULE 6.1(bb) is a complete
and correct list of all checking accounts, depository accounts, special deposit
accounts and other accounts maintained by any Borrower or Subsidiary with any
commercial bank or savings bank as of the Effective Date and each such account
(except any account indicated by an asterisk (*)) is either (i) subject to an
Agency Account Agreement or (ii) subject to directions from the account holder
to the institution maintaining such account, in form and substance approved by
the Agent, to transfer all collected funds therein daily to the Agent.
(cc) Equipment. All machinery, equipment, fixtures and other tangible
property (other than Inventory) of each Borrower and their respective
Subsidiaries, other than obsolete equipment no longer used or useful in the
business of the Borrowers and their Subsidiaries, is in good order and repair,
ordinary wear and tear excepted.
(dd) Real Property. No Borrower nor any Subsidiary owns any Real Estate
nor leases any Real Estate other than that described on SCHEDULE 6.1(dd) and
other than Real Estate acquired or leased after the Effective Date.
(ee) Year 2000 Compliant. Each Borrower has (i) undertaken a detailed
inventory, review and assessment of all areas within its business and operations
that could be adversely affected by the failure of such Borrower to be Year 2000
Compliant on a timely basis, (ii) developed a detailed plan and time schedule
for becoming Year 2000 Compliant on a timely basis, and (iii) as of the
Agreement Date, has implemented such plan in accordance with such time schedule
in all material respects, such that the Borrowers anticipate that they will be
Year 2000 Compliant on a timely basis.
SECTION 6.2 Survival of Representations and Warranties, Etc. All
representations and warranties set forth in this ARTICLE 6 and all statements
contained in any certificate, financial statement, or other instrument,
delivered by or on behalf of the Borrowers pursuant to or in connection with
this Agreement or any of the Loan Documents (including, but not limited to, any
such representation, warranty or statement made in or in connection with any
amendment thereto) shall constitute representations and warranties made under
this Agreement. All representations and warranties made under this Agreement
shall be made or deemed to be made at and as of the Agreement Date and at and as
of the Effective Date, except that representations and warranties which, by
their terms are applicable only to one such date shall be deemed to be made only
at and as of such date. All representations and warranties made or deemed to be
made under this Agreement shall survive and not be waived by the execution and
delivery of this Agreement, any investigation made by or on behalf of the Lender
or any borrowing hereunder.
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ARTICLE 7
SECURITY INTEREST
SECTION 7.1 Security Interest.
(a) ▇▇▇▇▇▇▇ and Winston hereby confirm the mortgage, pledge and
assignment to the Agent under the Existing Loan Agreement of the Collateral and
the creation in favor of the Agent, of a continuing security interest in the
Collateral, all as security for the Secured Obligations, and each Borrower
hereby mortgages, pledges and assigns all of the Collateral to the Agent, for
the benefit of itself as Agent and the Lenders and Affiliates of the Lenders,
and grants to the Agent, for the benefit of itself as Agent and the Lenders and
Affiliates of the Lenders, a continuing security interest in, and a continuing
Lien upon, all of the Collateral as security for the payment, observance and
performance of the Secured Obligations.
(b) As additional security for all of the Secured Obligations, the
Borrowers grant to the Agent, for the benefit of itself as Agent and the Lenders
and Affiliates of the Lenders, a security interest in, and assigns to the Agent,
for the benefit of itself as Agent and the Lenders and Affiliates of the
Lenders, all of the Borrowers' right, title and interest in and to, any deposits
or other sums at any time credited by or due from each Lender and each Affiliate
of a Lender to a Borrower, or credited by or due from any participant of any
Lender to a Borrower, with the same rights therein as if the deposits or other
sums were credited by or due from such Lender. Each Borrower hereby authorizes
each Lender and each Affiliate of such Lender and each participant to pay or
deliver to the Agent, for the account of the Lenders, without any necessity on
the Agent's or any Lender's part to resort to other security or sources of
reimbursement for the Secured Obligations, at any time during the continuation
of any Event of Default or in the event that the Agent, on behalf of the
Lenders, should make demand for payment hereunder in accordance with the terms
hereof, then and without further notice to any Borrower (such notice being
expressly waived), any of the aforesaid deposits (general or special, time or
demand, provisional or final) or other sums for application to any Secured
Obligation, irrespective of whether any demand has been made or whether such
Secured Obligation is mature, and the rights given the Agent, the Lenders, their
Affiliates and participants hereunder are cumulative with such Person's other
rights and remedies, including other rights of set-off. The Agent will promptly
notify the Borrowers of its receipt of any such funds for application to the
Secured Obligations, but failure to do so will not affect the validity or
enforceability thereof. The Agent may give notice of the above grant of a
security interest in and assignment of the aforesaid deposits and other sums,
and authorization, to, and make any suitable arrangements with, any Lender, any
such Affiliate of any Lender or participant for effectuation thereof, and each
Borrower hereby irrevocably appoints the Agent as its attorney to collect any
and all such deposits or other sums to the extent any such payment is not made
to the Agent or any Lender by such Lender, Affiliate or participant.
SECTION 7.2 Continued Priority of Security Interest.
(a) The Security Interest granted by the Borrowers shall at all times
be valid, perfected and enforceable against each Borrower and all third parties
in accordance with the
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terms of this Agreement, as security for the Secured Obligations, and the
Collateral shall not at any time be subject to any Liens that are prior to, on a
parity with or junior to the Security Interest, other than Permitted Liens.
(b) The Borrowers shall, at their sole cost and expense, take all
action that may be necessary or desirable, or that the Agent may reasonably
request, so as at all times to maintain the validity, perfection, enforceability
and rank of the Security Interest in the Collateral in conformity with the
requirements of SECTION 7.2(a), or to enable the Agent and the Lenders to
exercise or enforce their rights hereunder, including, but not limited to:
(i) paying all taxes, assessments and other claims lawfully
levied or assessed on any of the Collateral, except to the extent that
such taxes, assessments and other claims constitute Permitted Liens,
(ii) obtaining, after the Agreement Date, landlords',
mortgagees', bailees', warehousemen's or processors' releases,
subordinations or waivers (except as to premises reflected in the Rent
Reserve), and using all reasonable efforts to obtain mechanics'
releases, subordinations or waivers,
(iii) delivering to the Agent, for the benefit of the Lenders,
endorsed or accompanied by such instruments of assignment as the Agent
may specify, and stamping or marking, in such manner as the Agent may
specify, any and all chattel paper, instruments, letters and advices of
guaranty and documents evidencing or forming a part of the Collateral,
and
(iv) executing and delivering financing statements, pledges,
designations, hypothecations, notices and assignments in each case in
form and substance satisfactory to the Agent relating to the creation,
validity, perfection, maintenance or continuation of the Security
Interest under the UCC or other Applicable Law.
(c) The Agent is hereby authorized to file one or more financing or
continuation statements or amendments thereto without the signature of or in the
name of a Borrower for any purpose described in SECTION 7.2(b). The Agent will
give the Borrowers notice of the filing of any such statements or amendments,
which notice shall specify the locations where such statements or amendments
were filed. A carbon, photographic, xerographic or other reproduction of this
Agreement or of any of the Security Documents or of any financing statement
filed in connection with this Agreement is sufficient as a financing statement.
(d) Each Borrower shall ▇▇▇▇ its books and records as directed by the
Agent and as may be necessary or appropriate to evidence, protect and perfect
the Security Interest and shall cause its financial statements to reflect the
Security Interest.
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ARTICLE 8
COLLATERAL COVENANTS
Each Borrower covenants and agrees that until the Commitments have been
terminated and all the Secured Obligations have been paid in full, unless the
Required Lenders shall otherwise consent in the manner provided in SECTION
15.11:
SECTION 8.1 Collection of Receivables.
(a) The Borrowers will and will cause each other Loan Party to cause
all monies, checks, notes, drafts and other payments relating to or constituting
proceeds of trade accounts receivable, other Receivables and other Collateral to
be deposited in (i) an Agency Account in accordance with the procedures set out
in the corresponding Agency Account Agreement or (ii) an account subject to
instructions from the account holder, in form and substance satisfactory to the
Agent, requiring the transfer of collected balances in such account to the Agent
not less often than each Business Day. In particular, each Borrower will and
will cause each other Loan Party to advise each Account Debtor that makes
payment to such Borrower or other Loan Party by wire transfer, automated
clearinghouse ("ACH") transfer or similar means to make payment directly to an
Agency Account or, if the applicable Borrower or other Loan Party is not party
to an Agency Account Agreement, then to an account subject to such instructions.
(b) If average Loan Availability is less than $20,000,000 for any
period of 10 Business Days or is at any time less than $15,000,000, without
limiting the ability of the Agent and the Lenders to exercise other rights and
remedies hereunder, the Required Lenders may require that any or all of the Loan
Parties establish Lockboxes to which monies, checks, notes, drafts and other
payments relating to or constituting proceeds of Collateral shall be sent and if
such requirement is imposed, each Borrower will and will cause each other Loan
Party to:
(i) advise each Account Debtor on trade accounts receivable
that does not make payments directly to an Agency Account to address
all remittances with respect to amounts payable on account thereof to a
specified Lockbox, and
(ii) stamp all invoices relating to trade accounts receivable
with a legend satisfactory to the Agent indicating that payment is to
be made to such Borrower or other Loan Party via a specified Lockbox.
(c) The Borrowers and the Agent shall cause all collected balances in
each Agency Account and the Borrowers shall, and shall cause each other Loan
Party to, cause all collected balances in each other bank account subject to
transfer instructions approved by the Agent, to be transmitted daily by wire
transfer, ACH transfer, depository transfer check or other means in accordance
with the procedures set forth in the corresponding Agency Account Agreement or
such instructions, to the Agent at the Agent's Office:
(i) for application, on account of the Secured Obligations, as
provided in SECTIONS 2.3(c), 12.2, and 12.3, such credits to be entered
as of the Business Day they are received if they are received prior to
1:30 p.m. and to be conditioned upon
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final payment in cash or solvent credits of the items giving rise to
them (PROVIDED that a collection fee shall be payable by the Borrowers
with respect to any such credit received in other than immediately
available funds, equal to one day's interest, at the rate applicable to
Base Rate Loans, on such amount), and
(ii) with respect to the balance, so long as no Default or
Event of Default has occurred and is continuing, for transfer by wire
transfer, ACH transfer or depository transfer check to a Controlled
Disbursement Account.
(d) Any monies, checks, notes, drafts or other payments referred to in
SUBSECTION (a) or (b) of this SECTION 8.1 which, notwithstanding the terms of
such subsection, are received by or on behalf of the applicable Borrower will be
held in trust for the Agent and will be delivered to the Agent or a Clearing
Bank or a bank with which an account subject to satisfactory transfer
instructions is maintained, as promptly as possible, in the exact form received,
together with any necessary endorsements for application by the Agent directly
to the Secured Obligations or, as applicable, for deposit in the Agency Account
maintained with such Clearing Bank and processing in accordance with the terms
of the corresponding Agency Account Agreement or for deposit in such account and
processing and transfer in accordance with such instructions.
SECTION 8.2 Verification and Notification. The Agent shall have the
right at any time and from time to time,
(a) in the name of the Agent, the Lenders or in the name of a Borrower,
to verify the validity, amount or any other matter relating to any Receivables
by mail, telephone, telegraph or otherwise,
(b) to review, audit and make extracts from all records and files
related to any of the Receivables, and
(c) if a Default or Event of Default has occurred and is continuing, to
notify the Account Debtors or obligors under any Receivables of the assignment
of such Receivables to the Agent, for the benefit of the Lenders, and to direct
such Account Debtor or obligors to make payment of all amounts due or to become
due thereunder directly to the Agent, for the account of the Lenders, and, upon
such notification and at the expense of the Borrowers, to enforce collection of
any such Receivables and to adjust, settle or compromise the amount or payment
thereof, in the same manner and to the same extent as the applicable Borrower
might have done.
SECTION 8.3 Disputes, Returns and Adjustments.
(a) In the event any amounts due and owing under any Receivable for an
amount in excess of $250,000 are in dispute between the Account Debtor and the
applicable Borrower, the Borrowers shall provide the Agent with prompt written
notice thereof.
(b) The Borrowers shall notify the Agent promptly of all returns and
credits in excess of $250,000 in respect of any Receivable, which notice shall
specify the Receivable affected.
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(c) The Borrowers may, in the ordinary course of business unless a
Default or an Event of Default has occurred and is continuing, grant any
extension of time for payment of any Receivable or compromise, compound or
settle the same for less than the full amount thereof, or release wholly or
partly any Person liable for the payment thereof, or allow any credit or
discount whatsoever therein; PROVIDED that (i) no such action results in the
reduction of more than $250,000 in the amount payable with respect to any
Receivable or of more than $1,000,000 with respect to all Receivables in any
Fiscal Year (in each case, excluding the allowance of credits or discounts
generally available to Account Debtors in the ordinary course of the applicable
Borrower's business), and (ii) the Agent is promptly notified of the amount of
such adjustments and the Receivable(s) affected thereby (by reflecting such
reduction in an appropriate Borrowing Base Certificate or Schedule of
Receivables).
SECTION 8.4 Invoices.
(a) No Borrower will issue invoices other than in its own name or in a
trade name of which the Agent has received prior written notice, accompanied by
such evidence as the Agent may reasonably require that all actions required
pursuant to ARTICLE 7 with respect to Receivables or other Collateral created or
held in such name have been taken.
(b) The Borrowers will not use any invoices other than invoices in the
forms delivered to the Agent prior to the Agreement Date without giving the
Agent prior notice of the intended use of a different form of invoice together
with a copy of such different form and such evidence as the Agent may reasonably
require that any actions required pursuant to ARTICLE 7 with respect to any (i)
name, (ii) address or (iii) remittance instructions appearing on such invoice
have been taken.
(c) Upon the request of the Agent, the Borrowers shall deliver to the
Agent, at the Borrowers' expense, copies of customers' invoices or the
equivalent, original shipping and delivery receipts or other proof of delivery,
customers' statements, customer address lists, the original copy of all
documents, including, without limitation, repayment histories and present status
reports, relating to Receivables and such other documents and information
relating to the Receivables as the Agent shall specify.
SECTION 8.5 Delivery of Instruments. In the event any Receivable is at
any time evidenced by a promissory note, trade acceptance or any other
instrument for the payment of money, the Borrowers will, promptly upon request
by the Agent, deliver such instrument to the Agent, appropriately endorsed to
the Agent, for the benefit of the Lenders.
SECTION 8.6 Sales of Inventory. All sales of Inventory will be made in
compliance with all requirements of Applicable Law.
SECTION 8.7 Ownership and Defense of Title.
(a) Except for Permitted Liens, the Borrowers shall be or shall cause
another Loan Party to be at all times the sole owners or lessees of each and
every item of Collateral and shall not create nor permit any other Loan Party to
create any lien on, or sell, lease, exchange,
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assign, transfer, pledge, hypothecate, grant a security interest or security
title in or otherwise dispose of, any of the Collateral or any interest therein,
except for sales of Inventory in the ordinary course of business, for cash or on
open account or on terms of payment ordinarily extended to its customers, and
except for dispositions that are otherwise expressly permitted under this
Agreement or any Subsidiary Security Agreement.
(b) Each Borrower shall defend and cause each other Loan Party to
defend its title or leasehold interest in and to, and the Security Interest in,
the Collateral against the claims and demands of all Persons.
SECTION 8.8 Insurance.
(a) The Borrowers shall at all times maintain and cause the other Loan
Parties to maintain insurance on the Collateral and their other property against
loss or damage by fire, theft (excluding theft by employees), burglary,
pilferage, loss in transit and such other hazards as the Agent shall reasonably
specify, in amounts not to exceed those obtainable at commercially reasonable
rates and under policies issued by insurers acceptable to the Agent in the
exercise of its reasonable judgment. All premiums on such insurance shall be
paid by the Borrowers and copies of the policies delivered to the Agent. The
Borrowers will not use or permit the Inventory or its other property to be used
in violation of Applicable Law or in any manner which might render inapplicable
any insurance coverage.
(b) All insurance policies required under SECTION 8.8(a) relating to
Collateral shall name the Agent, for the benefit of the Lenders, as an
additional insured and shall contain loss payable clauses in the form submitted
to the Borrowers by the Agent, or otherwise in form and substance satisfactory
to the Required Lenders, naming the Agent, for the benefit of the Lenders, as
loss payee, as its interests may appear, and providing that
(i) all proceeds thereunder shall be payable to the Agent, for
the benefit of the Lenders,
(ii) no such insurance shall be affected by any act or neglect
of the insurer or owner of the property described in such policy, and
(iii) such policy and loss payable clauses may be canceled,
amended or terminated only upon at least 10 days' prior written notice
given to the Agent.
(c) Any proceeds of insurance referred to in this SECTION 8.8 which are
paid to the Agent, for the account of the Lenders, shall be, at the option of
the Required Lenders in their sole discretion, either (i) applied to replace the
damaged or destroyed property, or (ii) applied to the payment or prepayment of
the Secured Obligations, PROVIDED that in the event that the proceeds from any
single casualty do not exceed $250,000, then, upon the Borrowers' written
request to the Agent, provided that no Default or Event of Default shall have
occurred and be continuing, such proceeds shall be disbursed by the Agent to the
Borrowers pursuant to such procedures as the Agent shall reasonably establish
for application to the replacement of the damaged or destroyed property.
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SECTION 8.9 Location of Offices and Collateral.
(a) No Borrower will change the location of its chief executive office
or the place where it keeps its books and records relating to the Collateral
from the address set forth for it on SCHEDULE 6.1(t) or change its name, its
identity or corporate structure from that in effect on the Effective Date, or
use any trade name not listed on SCHEDULE 6.1(aa), without giving the Agent 30
days' prior written notice thereof accompanied by such evidence as the Agent may
reasonably require that all actions required to be taken pursuant to ARTICLE 7
have been taken.
(b) All Inventory, other than Inventory in transit to any such
location, will at all times be kept by the applicable Borrower at one or more
Permitted Inventory Locations and shall not, without the prior written consent
of the Agent, be kept elsewhere (except as a result of sales of Inventory
permitted under SECTION 8.7(a)).
(c) If any Inventory is in the possession or control of any of a
Borrower's agents or processors, the Borrowers shall notify such agents or
processors of the Security Interest (and shall promptly provide copies of any
such notice to the Agent and the Lenders) and, upon the occurrence of an Event
of Default, shall instruct them (and cause them to acknowledge such instruction)
to hold all such Inventory for the account of the account of the Lenders,
subject to the instructions of the Agent.
SECTION 8.10 Records Relating to Collateral.
(a) The Borrowers will and will cause their Subsidiaries to at all
times
(i) keep complete and accurate records of Inventory on a basis
consistent with past practices of ▇▇▇▇▇▇▇ so as to permit comparison of
Inventory records relating to different time periods, itemizing and
describing the kind, type and quantity of Inventory and the applicable
Borrower's or Subsidiary's cost thereof and a current price list for
such Inventory, and
(ii) keep complete and accurate records of all other
Collateral.
(b) The Borrowers will prepare a physical listing of all Inventory,
wherever located, at least annually.
SECTION 8.11 Inspection. The Agent and each Lender (by any of their
officers, employees or agents) shall have the right, to the extent that the
exercise of such right shall be within the control of a Borrower, at any time or
times to
(a) visit the properties of the Borrowers and the Subsidiaries, inspect
the Collateral and the other assets of the Borrowers and the Subsidiaries and
inspect and make extracts from the books and records of the Borrowers and the
Subsidiaries, including but not limited to management letters prepared by
independent accountants, all during customary business hours at such premises;
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(b) discuss the Borrowers' and the Subsidiaries' business, assets,
liabilities, financial condition, results of operations and business prospects,
insofar as the same are reasonably related to the rights of the Agent or the
Lenders hereunder or under any of the Loan Documents, with the Borrowers' and
the Subsidiaries' (i) principal officers, (ii) independent accountants, and
(iii) any other Person (except that any such discussion with any third parties
shall be conducted only in accordance with the Agent's or such Lender's standard
operating procedures relating to the maintenance of the confidentiality of
confidential information of borrowers); and
(c) verify the amount, quantity, value and condition of, or any other
matter relating to, any of the Collateral and in this connection to review,
audit and make extracts from all records and files related to any of the
Collateral.
The Borrowers will deliver to the Agent, upon the Agent's request, any
instrument necessary for it to obtain records from any service bureau
maintaining records on behalf of the Borrowers or any Subsidiary.
SECTION 8.12 Information and Reports.
(a) Schedule of Receivables. The Borrowers shall deliver to the Agent
on or before the Effective Date and not later than the 20th day of each calendar
month thereafter a Schedule of Receivables which
(i) shall be as of the last Business Day of the immediately
preceding month,
(ii) shall be reconciled to the Borrowing Base Certificate as
of such last Business Day, and
(iii) shall set forth a detailed aged trial balance of all of
the Borrowers' then existing Receivables, specifying the names,
addresses and balance due for each Account Debtor obligated on a
Receivable so listed.
(b) Schedule of Inventory. The Borrowers shall deliver to the Agent on
or before the Effective Date and not later than the 20th day of each calendar
month thereafter a Schedule of Inventory as of the last Business Day of the
immediately preceding month of the Borrowers, itemizing and describing the kind,
type and quantity of Inventory, the applicable Borrower's cost thereof and the
location thereof.
(c) Borrowing Base Certificate. The Borrowers shall deliver to the
Agent on the 20th day of each month, subject to the provisions of SECTION
8.12(e), a Borrowing Base Certificate prepared as of the last Business Day of
the preceding month.
(d) Notice of Diminution of Value. The Borrowers shall give prompt
notice to the Agent of any matter or event which has resulted in, or may result
in, the diminution in excess of $500,000 in the value of any of its Collateral,
except for any such diminution in the value of any Receivables or Inventory in
the ordinary course of business which has been
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appropriately reserved against, as reflected in financial statements previously
delivered to the Agent and the Lenders pursuant to ARTICLE 10.
(e) Additional Information. The Agent may in its reasonable discretion
from time to time request that the Borrowers deliver the schedules and
certificates described in SECTIONS 8.12(a), (b), (c) and (d) more or less often
and on different schedules than specified in such Sections and the Borrowers
will comply with such requests. The Borrowers will also furnish to the Agent and
each Lender such other information with respect to the Collateral as the Agent
or any Lender may from time to time reasonably request.
SECTION 8.13 Power of Attorney. Each Borrower hereby appoints the Agent
as its attorney, with power
(a) to endorse the name of such Borrower on any checks, notes,
acceptances, money orders, drafts or other forms of payment or security that may
come into the Agent's or any Lender's possession, and
(b) if a Default or Event of Default exists, to sign the name of such
Borrower on any invoice or ▇▇▇▇ of lading relating to any Receivable, Inventory
or other Collateral, on any drafts against customers related to letters of
credit, on schedules and assignments of Receivables furnished to the Agent or
any Lender by such Borrower, on notices of assignment, financing statements and
other public records relating to the perfection or priority of the Security
Interest, verifications of account and notices to or from customers.
SECTION 8.14 Assignment of Claims Act. Upon the request of the Agent,
the Borrowers shall execute any documents or instruments and shall take such
steps or actions reasonably required by the Agent so that all monies due or to
become due under any contract with the United States of America, the District of
Columbia or any state, county, municipality or other domestic or foreign
governmental entity, or any department, agency or instrumentality thereof, will
be assigned to the Agent, for the benefit of itself and the Lenders, and notice
given thereof in accordance with the requirements of the Assignment of Claims
Act of 1940, as amended, or any other laws, rules or regulations relating to the
assignment of any such contract and monies due to or to become due.
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ARTICLE 9
AFFIRMATIVE COVENANTS
The Borrowers covenant and agree that the Borrowers will, as their
joint and several obligation, duly and punctually pay the principal of, and
interest on, and all other amounts payable with respect to, the Loans and all
other Secured Obligations in accordance with the terms of the Loan Documents and
that until the Commitments have been terminated and all the Secured Obligations
have been paid in full, unless the Required Lenders shall otherwise consent in
the manner provided for in SECTION 15.11, each of the Borrowers will, and will
cause each of the Subsidiaries to:
SECTION 9.1 Preservation of Corporate Existence and Similar Matters.
Preserve and maintain its corporate existence, rights, franchises, licenses and
privileges in the jurisdiction of its incorporation and qualify and remain
qualified as a foreign corporation and authorized to do business in each
jurisdiction in which the character of its properties or the nature of its
business requires such qualification or authorization (except where any failure
so to qualify could not reasonably be expected to have a Materially Adverse
Effect).
SECTION 9.2 Compliance with Applicable Law. Comply in all material
respects with all Applicable Law relating to the Borrowers or such Subsidiary
except to the extent being contested in good faith by appropriate proceedings
and for which reserves in respect of a Borrower's or such Subsidiary's
reasonably anticipated liability have been established in accordance with GAAP.
SECTION 9.3 Maintenance of Property. In addition to, and not in
derogation of, the requirements of SECTION 8.7 and of the Security Documents,
(a) protect and preserve all properties material to its business,
including copyrights, patents, trade names and trademarks, and maintain in good
repair, working order and condition in all material respects, with reasonable
allowance for wear and tear, all tangible properties, and
(b) from time to time make or cause to be made all needed and
appropriate repairs, renewals, replacements and additions to such properties
necessary for the conduct of its business, so that the business carried on in
connection therewith in the ordinary course and in a manner consistent with past
practices of ▇▇▇▇▇▇▇.
SECTION 9.4 Conduct of Business. At all times conduct its business in
accordance with sound business practices and engage only in the business(es)
described in SCHEDULE 6.1(f).
SECTION 9.5 Insurance. Maintain, in addition to the coverage required
by SECTION 8.8 and the Security Documents, insurance with responsible insurance
companies against such risks and in such amounts as is customarily maintained by
similar businesses or as may be required by Applicable Law, and from time to
time deliver to the Agent or any Lender upon its request a detailed list of the
insurance then in effect, stating the names of the insurance
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companies, the amounts and rates of the insurance, the dates of the expiration
thereof and the properties and risks covered thereby.
SECTION 9.6 Payment of Taxes and Claims. Pay or discharge when due
(a) all taxes, assessments and governmental charges or levies imposed
upon it or upon its income or profits or upon any properties belonging to it,
except that real property ad valorem taxes shall be deemed to have been so paid
or discharged if the same are paid before they become delinquent, and
(b) all lawful claims of materialmen, mechanics, carriers,
warehousemen and landlords for labor, materials, supplies and rentals which, if
unpaid, might become a Lien on any properties of any Borrower;
except that this SECTION 9.6 shall not require the payment or discharge of any
such tax, assessment, charge, levy or claim which is being contested in good
faith by appropriate proceedings and for which reserves in respect of reasonably
anticipated liability have been established in accordance with GAAP.
SECTION 9.7 Accounting Methods and Financial Records. Maintain a
system of accounting, and keep such books, records and accounts (which shall be
true and complete), as may be required or as may be necessary to permit the
preparation of financial statements in accordance with GAAP and notify the Agent
promptly, and in any event within five days after any such account is opened, of
the existence, location, number and title of any bank account of a Loan Party
not listed on SCHEDULE 6.1(bb).
SECTION 9.8 Use of Proceeds.
(a) Use the proceeds of
(i) the Initial Loans to pay amounts indicated on SCHEDULE 9.8
to the Persons indicated thereon, and
(ii) all subsequent Loans only for working capital and general
business purposes, including, without being limited to, payment of
interest on the Senior Notes and dividends on the KS Preferred in
accordance with the provisions of this Agreement, and
(b) not use any part of such proceeds to purchase or, to carry or
reduce or retire or refinance any credit incurred to purchase or carry, any
margin stock (within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System) or, in any event, for any purpose which would
involve a violation of such Regulation U or of Regulation T or X of such Board
of Governors, or for any purpose prohibited by law or by the terms and
conditions of this Agreement.
SECTION 9.9 Hazardous Waste and Substances; Environmental
Requirements. In addition to, and not in derogation of, the requirements of
SECTION 9.2 and of
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the Security Documents, comply with all Environmental Laws and all Applicable
Laws relating to occupational health and safety (except for instances of
noncompliance that are being contested in good faith by appropriate proceedings
if reserves in respect of any Borrower's or such Subsidiary's reasonably
anticipated liability therefor have been appropriately established), promptly
notify the Agent of its receipt of any notice of a violation of any such
Environmental Laws or other such Applicable Laws and indemnify and hold harmless
the Agent and the Lenders from all loss, cost, damage, liability, claim and
expense incurred by or imposed upon the Agent or any Lender on account of a
Borrower's failure to perform its obligations under this SECTION 9.9.
SECTION 9.10 Additional Subsidiaries. Cause each Person that becomes a
domestic Subsidiary of ▇▇▇▇▇▇▇ after the Effective Date, promptly upon request
by the Agent, to execute and deliver a Subsidiary Guaranty and a Subsidiary
Security Agreement or, if requested by the Agent, enter into and cause any such
new Subsidiary or any existing Subsidiary Guarantor to enter into an amendment
to this Agreement or such other documents as may reasonably be determined by the
Agent to be necessary or desirable to add such Subsidiary as an additional
"Borrower" hereunder, in each case together with such allonges to the Notes,
restated promissory notes, Financing Statements, legal opinions and other
certificates, instruments and documents as the Agent may reasonably request.
SECTION 9.11 Compliance with Senior Note Indenture. Comply with the
terms and provisions of the Senior Note Indenture and the Senior Notes and cause
each Guarantor of ▇▇▇▇▇▇▇'▇ obligations under the Senior Notes to comply with
the terms of the Guaranty applicable to it.
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ARTICLE 10
INFORMATION
Until the Commitments have been terminated and all the Secured
Obligations have been paid in full, unless the Required Lenders shall otherwise
consent in the manner set forth in SECTION 15.11, the Borrowers will furnish to
the Agent and to each Lender at its offices then designated for notices pursuant
to SECTION 15.1, the statements, reports, certificates, and other information
provided for in this ARTICLE 10. All written information, reports, statements
and other papers and data furnished to the Agent or any Lender by or at the
request of the Borrowers, whether pursuant to this ARTICLE 10 or any other
provision of this Agreement or of any other Loan Document, shall be, at the time
the same is so furnished, complete and correct in all material respects to the
extent necessary to give the Agent and the Lenders true and accurate knowledge
of the subject matter. Specifically, the Borrowers will so furnish:
SECTION 10.1 Financial Statements.
(a) Audited Year-End Statements. As soon as available, but in any
event within 90 days after the end of each Fiscal Year, copies of the
consolidated and consolidating balance sheets of ▇▇▇▇▇▇▇ and its Consolidated
Subsidiaries as at the end of such Fiscal Year and the related consolidated and
consolidating statements of income, shareholders' equity and cash flows of
▇▇▇▇▇▇▇ and its Consolidated Subsidiaries for such Fiscal Year, in each case
setting forth in comparative form the figures for the previous Fiscal Year, and,
as to such consolidated financial statements, reported on, without
qualification, by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or other independent certified public
accountants of nationally recognized standing;
(b) Monthly Financial Statements. As soon as available after the end
of each accounting month, but in any event within 30 days after the end of each
accounting month (or 45 days after the end of any such month that is the last
month of a Fiscal Quarter), copies of the unaudited consolidated and
consolidating balance sheets of ▇▇▇▇▇▇▇ and its Consolidated Subsidiaries as at
the end of such accounting month and the related unaudited consolidated and
consolidating statements of income and cash flows for ▇▇▇▇▇▇▇ and its
Consolidated Subsidiaries for such month and for the portion of the Fiscal Year
through such month, certified by a Financial Officer as presenting fairly the
financial condition and results of operations of the Borrowers (subject to
normal year-end audit adjustments) for the applicable period(s);
(c) Opening Balance Sheet. As soon as available after the Effective
Date, but in any event on or before July 15, 1998, the opening consolidating and
consolidated balance sheets of ▇▇▇▇▇▇▇ and its Consolidated Subsidiaries as of
the Effective Date, prepared by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP;
all such financial statements to be complete and correct in all material
respects and prepared in accordance with GAAP (except, with respect to interim
financial statements, for the omission of notes and for the effect of normal
year-end audit adjustments) applied consistently throughout the periods
reflected therein; and
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(d) Projections. As soon as available, but in any event not later than
30 days after the first day of each Fiscal Year beginning after the Effective
Date, Projections for such Fiscal Year in such format and detail as the Agent
may reasonably specify.
SECTION 10.2 Accountants' Certificate. Together with the financial
statements referred to in SECTION 10.1(a), a certificate of such accountants
addressed to the Agent
(a) stating that in making the examination necessary for the
certification of such financial statements, nothing has come to their attention
to lead them to believe that any Default or Event of Default exists and, in
particular, they have no knowledge of any Default or Event of Default or, if
such is not the case, specifying such Default or Event of Default and its
nature, and
(b) having attached the calculations, prepared by the Borrowers and
reviewed by such accountants, required to establish whether or not the Borrowers
are in compliance with the covenants contained in SECTIONS 11.1, 11.2, 11.4 and
11.5 as at the date of such financial statements.
SECTION 10.3 Officer's Certificate. At the time that the Borrowers
furnish the financial statements pursuant to SECTION 10.1(b) for the last month
in a Fiscal Quarter, a certificate of the President of ▇▇▇▇▇▇▇ or of a Financial
Officer in substantially the form attached hereto as EXHIBIT E,
(a) setting forth as at the end of such Fiscal Quarter or Fiscal Year,
as the case may be, the calculations required to establish whether or not the
Borrowers were in compliance with the requirements of SECTIONS 11.1, 11.2, 11.4
and 11.5 as at the end of each respective period, and
(b) stating that, based on a reasonably diligent examination, no
Default or Event of Default exists, or, if such is not the case, specifying such
Default or Event of Default and its nature, when it occurred, whether it is
continuing and the steps being taken by the Borrowers with respect to such
Default or Event of Default.
SECTION 10.4 Copies of Other Reports.
(a) Promptly upon receipt thereof, copies of all reports, if any,
submitted to the Borrowers or the Board of Directors of ▇▇▇▇▇▇▇ by the
Borrowers' independent public accountants, including, without limitation, any
management report.
(b) As soon as practicable, copies of all financial statements and
reports that ▇▇▇▇▇▇▇ sends to its shareholders generally in their capacity as
such and of all registration statements and all regular or periodic reports
which any Borrower shall file with the Securities and Exchange Commission or any
successor commission.
(c) From time to time and as soon as reasonably practicable following
each request, such data, certificates, reports, statements, opinions of counsel,
documents or further information regarding the business, assets, liabilities,
financial condition, results of operations or
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business prospects of a Borrower or any Subsidiary as the Agent or any Lender
may reasonably request and that a Borrower has or (except in the case of legal
opinions relating to the perfection or priority of the Security Interest)
without unreasonable expense can obtain; PROVIDED, HOWEVER, that the Lenders
shall, to the extent reasonably practicable, coordinate examinations of the
Borrowers' records by their respective internal examiners. The rights of the
Agent and the Lenders under this SECTION 10.4 are in addition to and not in
derogation of their rights under any other provision of this Agreement or of any
other Loan Document.
(d) If requested by the Agent or any Lender, the Borrowers will
furnish to the Agent and the Lenders statements in conformity with the
requirements of Federal Reserve Form U-1 referred to in Regulation U of the
Board of Governors of the Federal Reserve System.
SECTION 10.5 Notice of Litigation and Other Matters. Prompt notice of:
(a) the commencement, to the extent a Borrower is aware of the same,
of all proceedings and investigations by or before any governmental or
nongovernmental body and all actions and proceedings in any court or before any
arbitrator against or in any other way relating to or affecting any Borrower,
any of its Subsidiaries or any of a Borrower's or any of its Subsidiaries'
properties, assets or businesses, which is reasonably likely to, singly or
together with other pending proceedings or investigations, result in the
occurrence of a Default or an Event of Default, or have a Materially Adverse
Effect,
(b) any amendment of the articles of incorporation or by-laws of a
Borrower or any of its Subsidiaries,
(c) any change in the business, assets, liabilities, financial
condition, results of operations or business prospects of a Borrower or any of
its Subsidiaries which has had or is reasonably likely to have, singly or in the
aggregate, a Materially Adverse Effect and any change in the executive officers
of a Borrower,
(d) the discovery or determination by any Loan Party that any computer
application (including any computer application of any key supplier, vendor or
customer) that is material to the business or operations of any Borrower will
not be Year 2000 Compliant on a timely basis, except to the extent that such
failure could not reasonably be expected to have a Materially Adverse Effect,
(e) the receipt of any notice from or giving of any notice to the
trustee under the Senior Note Indenture, together with a copy of such notice,
and
(f) any Default or Event of Default or any event which constitutes or
which with the passage of time or giving of notice or both would constitute a
default or event of default by a Borrower or any of its Subsidiaries under any
material agreement (other than this Agreement) to which such Borrower or any of
its Subsidiaries is a party or by which any Borrower, any of its Subsidiaries or
any Borrower's or any Subsidiary's properties may be bound.
SECTION 10.6 ERISA. As soon as possible and in any event within 30
days after a Borrower knows, or has reason to know, that:
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(a) any ERISA Event with respect to a Benefit Plan has occurred or
will occur, or
(b) the aggregate present value of the Unfunded Vested Accrued
Benefits under all Benefit Plans is equal to an amount in excess of $0, or
(c) a Borrower or any Subsidiary is in "default" (as defined in
Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer Benefit
Plan required by reason of a Borrower's or such Subsidiary's complete or partial
withdrawal (as described in Section 4203 or 4205 of ERISA) from such
Multiemployer Plan,
the Borrowers will furnish to the Agent a certificate of the President of
▇▇▇▇▇▇▇ or a Financial Officer setting forth the details of such event and the
action which is proposed to be taken with respect thereto, together with any
notice or filing which may be required by the PBGC or other agency of the United
States government with respect to such event.
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ARTICLE 11
NEGATIVE COVENANTS
Until the Commitments have been terminated and all the Secured
Obligations have been paid in full, unless the Required Lenders shall otherwise
consent in the manner set forth in SECTION 15.11, the Borrowers will not
directly or indirectly and, in the case of SECTIONS 11.2 through 11.12, will not
permit any Subsidiaries to:
SECTION 11.1 Financial Covenants. (a) Permit Net Worth of ▇▇▇▇▇▇▇ and
its Consolidated Subsidiaries on a consolidated basis as of the Effective Date
to be less than $25,000,000, adjusted by adding to such amount, the excess of
the consolidated Net Worth of the Borrowers reflected in the opening balance
sheet of ▇▇▇▇▇▇▇ and its Consolidated Subsidiaries, including purchase
accounting adjustments thereto, through the Effective Date, over $32,600,000,
or, if the consolidated Net Worth of the Borrowers, as adjusted, reflected in
such opening balance sheet is less than $32,600,000, by subtracting the amount
of such deficit from $25,000,000.
(b) Permit Loan Availability at any time to be less than $15,000,000.
SECTION 11.2 Debt. Create, assume, or otherwise become or remain
obligated in respect of, or permit or suffer to exist or to be created, assumed
or incurred or to be outstanding any Debt, except that this SECTION 11.2 shall
not apply to:
(a) Debt of the Loan Parties represented by the Loan Documents,
(b) Subordinated Debt,
(c) Debt of the Loan Parties represented by the Senior Notes,
(d) Debt reflected on SCHEDULE 6.1(j) and refinancings thereof that do
not result in an increase in the principal amount of any such Debt outstanding
on the date of refinancing or in any other Person becoming obligated thereon,
but excluding any such scheduled Debt that is to be paid in full on the
Effective Date,
(e) Acquired Debt permitted in accordance with SECTION 11.4 and
Attributable Debt permitted in accordance with SECTION 11.10,
(f) vendor loans, advances and similar financings in an aggregate
principal amount outstanding at any time not to exceed $20,000,000, and
(g) other Debt in an aggregate principal amount outstanding at any
time not to exceed $15,000,000.
SECTION 11.3 Guaranties. Become or remain liable with respect to any
Guaranty of any obligation of any other Persons, except as listed on SCHEDULE
6.1(j) or pursuant
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to a Guaranty by a Borrower or any Subsidiary of the obligations of a Loan Party
(including specifically the Subsidiaries' Guarantees of ▇▇▇▇▇▇▇'▇ obligations in
respect of the Senior Notes).
SECTION 11.4 Acquisitions. (a) Acquire, after the Agreement Date, any
Business Unit or Investment or, after the Agreement Date, maintain any
Investment other than Permitted Investments and the Investments contemplated by
the CPW Acquisition Agreement and the ITCO Merger Agreement, EXCEPT that this
SECTION 11.4 shall not apply to Acquisitions by ▇▇▇▇▇▇▇ or another Loan Party
after the Effective Date of (A) Investments in the capital stock of any other
Person organized under the laws of the United States of America or any state
thereof which thereupon becomes a Wholly Owned Subsidiary or (B) Business Units
located in the United States, provided, that:
(i) the aggregate Purchase Price of all such Acquisitions does
not exceed $25,000,000 in any Fiscal Year or $40,000,000 during the
term of this Agreement,
(ii) ▇▇▇▇▇▇▇ or the applicable Loan Party has made available
to the Agent, not later than 10 Business Days prior to the proposed
date of such Acquisition, the results of any investigation performed
by or on behalf of such Loan Party of the target and copies of the
Acquisition documents and historical financial statements of the
target for at least the three previous years.
(iii) the Agent shall have received evidence satisfactory to
it of the Loan Parties' continued compliance with the provisions of
this Agreement and the other Loan Documents, including, without being
limited to, the provisions of SECTIONS 9.4, 9.11 and 11.1, on a pro
forma basis after giving effect to such Acquisition,
(iv) to the extent financed with Debt other than Acquired Debt
or Loans, such Debt shall be payable to the seller and shall be
subordinated to the prior payment of the Secured Obligations on terms
and conditions satisfactory to the Agent and the Required Lenders,
(v) the Agent shall have received evidence satisfactory to it
demonstrating on a pro forma basis that Net Income of the target,
before provision for interest expense, taxes, depreciation and
amortization for the period of 12 consecutive calendar months ended
nearest the date of determination, is at least equal to the sum of
interest expense and scheduled principal payments on any Debt incurred
in connection with payment of the Purchase Price (including Loans and
Acquired Debt), and
(vi) as requested by the Agent, any new Subsidiary shall have
executed and delivered the Subsidiary Guaranty and a Subsidiary
Security Agreement, or all Loan Parties, as appropriate, and such new
Subsidiary shall have executed and delivered an amendment to this
Agreement sufficient to cause such new Subsidiary to become a
"Borrower" hereunder, and in either case shall have delivered or
caused to be delivered as to such Subsidiary the items referred to in
SECTIONS 5.1(a)(3), (4), (5), (6), and (8) and an opinion of counsel
for such Subsidiary as to such matters in connection with the
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transactions contemplated by the Subsidiary Guaranty and Subsidiary
Security Agreement or such amendment to this Agreement as the Agent
may reasonably request.
"Purchase Price" means an amount equal to the total consideration paid for such
Acquisition, including all cash payments (whether classified as purchase price,
noncompete payments, consulting payments, "earn out" or otherwise and without
regard to whether such amount is paid in whole or in part at the closing of the
Acquisition or over time thereafter, but excluding any finance charges
attributable to deferred payments and excluding any salary or other employment
compensation paid to a seller for the purpose of retaining such seller's
services as an active employee of a Borrower or a Subsidiary), the principal
amount of all Acquired Debt and of any Subordinated Debt owing to the seller,
and the value (as determined by the board of directors of ▇▇▇▇▇▇▇, including
pursuant to the applicable purchase agreement between the relevant Borrower and
the seller, in the case of any property, the fair value of which is not readily
ascertainable) of all other property, other than capital stock of ▇▇▇▇▇▇▇,
transferred by ▇▇▇▇▇▇▇ to the seller.
(b) Notwithstanding any provision of this Agreement to the contrary,
in connection with any merger (or other distribution of the assets) of a
Subsidiary that is not a Loan Party with and into (or to) a Loan Party, or any
Acquisition of a Business Unit, whether by purchase of stock, merger, or
purchase of assets and whether in a single transaction or series of related
transactions, by a Borrower, where the value of the assets of such Subsidiary or
the Purchase Price of such Acquisition, as the case may be:
(i) is less than $10,000,000, ▇▇▇▇▇▇▇ shall have the right to
determine whether the Inventory and Receivables so acquired are
included in the Borrowing Base, subject to the provision of the
definitions "Borrowing Base," "Eligible Inventory" and Eligible
Receivables" and any other provisions of this Agreement and the other
Loan Documents applicable to the computation and reporting of the
Borrowing Base, and if ▇▇▇▇▇▇▇ elects so to include such acquired
Inventory and Receivables, then any Subsidiary that owns any such
acquired Inventory or Receivables shall execute and deliver to the
Agent the agreements, certificates, instruments and other documents
referred to in SECTION 11.4(a)(vi) or
(ii) is $10,000,000 or more, the Required Lenders shall have
the right to determine whether any Inventory or Receivables so
acquired are included in the Borrowing Base (subject to the other
applicable provisions of this Agreement).
SECTION 11.5 Capital Expenditures. Make or incur any Capital
Expenditures (excluding Financed Capex and expenditures pursuant to SECTION
11.4) in the aggregate in excess of $12,000,000 for any Fiscal Year, PROVIDED
that any amount of such allowance not used in a Fiscal Year may be carried
forward, but only to the succeeding Fiscal Year.
SECTION 11.6 Restricted Distributions and Payments, Etc. Declare or
make any Restricted Distribution or Restricted Payment which, when added to all
other Restricted Distributions and Restricted Payments made in the same Fiscal
Year of ▇▇▇▇▇▇▇, would exceed $2,000,000 (exclusive of payments in an aggregate
amount not greater than
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$1,500,000 made on or prior to the first anniversary of the Effective Date to
employees of ITCO in respect of stock appreciation rights).
SECTION 11.7 Merger, Consolidation and Sale of Assets. Merge or
consolidate with any other Person or sell, lease or transfer or otherwise
dispose of all or a substantial portion of its assets to any Person other than
sales of Inventory in the ordinary course of business, EXCEPT that any Loan
Party may merge with and into another Loan Party (provided that ▇▇▇▇▇▇▇ shall be
the surviving corporation of any merger to which it is a party) and, subject to
the provisions of SECTION 11.4(b). any Subsidiary may merge into a Loan Party
with such Loan Party as the surviving corporation.
SECTION 11.8 Transactions with Affiliates. Except as described on
SCHEDULE 11.8, effect any transaction with any Affiliate on a basis less
favorable to a Loan Party than would be the case if such transaction had been
effected with a Person not an Affiliate.
SECTION 11.9 Liens. Create, assume or permit or suffer to exist or to
be created or assumed any Lien on any of the Collateral or its other assets,
other than Liens listed in CLAUSES (a) through (g) of the definition "Permitted
Liens" and (a) Liens securing Acquired Debt, which Liens affect solely capital
or fixed assets (and not Receivables or Inventory or proceeds thereof) of the
Business Unit Acquired, existing on the date of the related Acquisition and not
created in contemplation thereof, (b) Liens securing vendor loans permitted
pursuant to SECTION 11.2(f) and (c) Purchase Money Liens (including Capitalized
Lease Obligations) securing Debt otherwise permitted pursuant to SECTION 11.2.
SECTION 11.10 Sales and Leasebacks. Enter into any arrangement with
any Person providing for a Loan Party's leasing from such Person any real or
personal property which has been or is to be sold or transferred, directly or
indirectly, by a Loan Party to such Person, if the associated Attributable Debt,
when added to all other outstanding Attributable Debt (exclusive of any
Attributable Debt arising out of the sale/leaseback by ITCO of its Orlando,
Florida facility, as contemplated on the Effective Date), would exceed
$15,000,000.
SECTION 11.11 Amendments of Other Agreements. Amend the interest rate
or principal amount or schedule of payments of principal and interest with
respect to any Debt (other than the Secured Obligations) or any dividend rate or
redemption schedule, applicable to any preferred stock of a Borrower, other than
to reduce the interest or dividend rate or to extend any such schedule of
payments or redemption schedule, or amend or cause or permit to be amended in
any material respect or in any respect that may be adverse to the interests of
the Agent or the Lenders, (i) the KS Preferred Stock Purchase Agreement, (ii)
the Senior Note Indenture, (iii) prior to consummation of the transactions
contemplated thereby, the CPW Acquisition Documents or the ITCO Merger Documents
or (iv) the articles or certificate of incorporation of any Loan Party.
SECTION 11.12 Commingling. Commingle or permit the commingling of
Collateral or proceeds of Collateral with other property of or under the control
of any of ▇▇▇▇▇▇▇ or any of its Subsidiaries that is not Collateral or proceeds
thereof.
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ARTICLE 12
DEFAULT
SECTION 12.1 Events of Default. Each of the following shall constitute
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
governmental or nongovernmental body:
(a) Default in Payment. The Borrowers shall default in any payment of
principal of or interest on any Loan or any Note when and as due (whether at
maturity, by reason of acceleration or otherwise).
(b) Other Payment Default. The Borrowers shall default in the payment,
as and when due, of principal of or interest on, any other Secured Obligation,
and such default shall continue for a period of 10 days after written notice
thereof has been given to the Borrowers by the Agent.
(c) Misrepresentation. Any representation or warranty made or deemed
to be made by the Borrowers under this Agreement or any Loan Document, or any
amendment hereto or thereto, shall at any time prove to have been incorrect or
misleading in any material respect when made.
(d) Default in Performance. The Borrowers shall default in the
performance or observance of any term, covenant, condition or agreement to be
performed by the Borrowers, contained in
(i) ARTICLES 8 (other than SECTIONS 8.3 and 8.4(a)) or 11, or
SECTIONS 9.1 (insofar as it requires the preservation of the corporate
existence of the Borrowers), 9.8, 10.1, 10.2 OR 10.3, and the Agent
shall have delivered to the Borrowers written notice of such default,
or
(ii) this Agreement (other than as specifically provided for
otherwise in this SECTION 12.1) and such default shall continue for a
period of 30 days after written notice thereof has been given to the
Borrowers by the Agent.
(e) Debt Cross-Default.
(i) A Borrower or any Subsidiary shall fail to pay when due
and payable the principal of or interest on any Debt (other than the
Loans) in an amount in excess of $1,000,000, or
(ii) the maturity of any such Debt outstanding in a principal
amount greater than $1,000,000 shall have (A) been accelerated in
accordance with the provisions of any indenture, contract or
instrument providing for the creation of or concerning such
Indebtedness, or (B) been required to be prepaid prior to the stated
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maturity thereof, including, without being limited to, upon a "Change
of Control" as defined in the Senior Note Indenture, or
(iii) any event shall have occurred and be continuing which
would permit any holder or holders of such Debt outstanding in an
amount in excess of $1,000,000, any trustee or agent acting on behalf
of such holder or holders or any other Person so to accelerate such
maturity, and the Borrowers shall have failed to cure such default
prior to the expiration of any applicable cure or grace period.
(f) Other Cross-Defaults; Mandatory Redemption. A Borrower or any
Subsidiary shall default in the payment when due, or in the performance or
observance, of any obligation or condition of any agreement, contract or lease
(other than this Agreement, the Security Documents or any such agreement,
contract or lease relating to Debt), if the existence of any such defaults,
singly or in the aggregate, could in the reasonable judgment of the Agent have a
Materially Adverse Effect, PROVIDED, that for the purposes of this provision,
where such a default could result only in a monetary loss, a Material Adverse
Effect shall not be deemed to have occurred unless the aggregate of such losses
would exceed $1,000,000, or any event shall occur or circumstances exist that
would result in or permit the holder thereof to require the redemption of the KS
Preferred.
(g) Voluntary Bankruptcy Proceeding. A Borrower or any Subsidiary
shall
(i) commence a voluntary case under the federal bankruptcy
laws (as now or hereafter in effect),
(ii) file a petition seeking to take advantage of any other
laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or composition for adjustment of debts,
(iii) consent to or fail to contest in a timely and
appropriate manner any petition filed against it in an involuntary
case under such bankruptcy laws or other laws,
(iv) apply for or consent to, or fail to contest in a timely
and appropriate manner, the appointment of, or the taking of
possession by, a receiver, custodian, trustee, or liquidator of itself
or of a substantial part of its property, domestic or foreign,
(v) admit in writing its inability to pay its debts as they
become due,
(vi) make a general assignment for the benefit of creditors,
or
(vii) take any corporate action for the purpose of authorizing
any of the foregoing.
(h) Involuntary Bankruptcy Proceeding. A case or other proceeding
shall be commenced against a Borrower or any Subsidiary in any court of
competent jurisdiction seeking
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(i) relief under the federal bankruptcy laws (as now or
hereafter in effect) or under any other laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding up or
adjustment of debts,
(ii) the appointment of a trustee, receiver, custodian,
liquidator or the like of a Borrower, any Subsidiary or of all or any
substantial part of the assets, domestic or foreign, of a Borrower or
any Subsidiary,
and such case or proceeding shall continue undismissed or unstayed for a period
of 60 consecutive calendar days, or an order granting the relief requested in
such case or proceeding against such Borrower or Subsidiary (including, but not
limited to, an order for relief under such federal bankruptcy laws) shall be
entered.
(i) Loan Documents. Any "Event of Default" under any Loan Document
(other than this Agreement) shall occur or a Borrower shall default in the
performance or observance of any material term, covenant, condition or agreement
contained in, or the payment of any other sum covenanted to be paid by the
Borrowers under any Loan Document (other than this Agreement) that does not
expressly provide for "Events of Default," or any provision thereof, other than
any nonmaterial provision rendered unenforceable by operation of law, shall
cease to be valid and binding.
(j) Failure of Agreements. A Borrower shall challenge the validity and
binding effect of any provision of any Loan Document after delivery thereof
hereunder or shall state in writing its intention to make such a challenge, or
any Security Document, after delivery thereof hereunder, shall for any reason
(except to the extent permitted by the terms thereof) cease to create a valid
and perfected first priority Lien (except for Permitted Liens) on, or security
interest in, any of the Collateral purported to be covered thereby.
(k) Judgment. A final, unappealable judgment or order for the payment
of money in an amount that exceeds the uncontested insurance available therefor
by $1,000,000 or more shall be entered against a Borrower by any court and such
judgment or order shall continue undischarged or unstayed for 30 days.
(l) Attachment. A warrant or writ of attachment or execution or
similar process which exceeds $1,000,000 in value shall be issued against any
property of a Borrower and such warrant or process shall continue undischarged
or unstayed for 30 days.
(m) ERISA. In addition to the breach of any other representation and
warranty, any ERISA Event with respect to a Benefit Plan shall occur.
(n) Qualified Audits. The independent certified public accountants
retained by ▇▇▇▇▇▇▇ shall refuse to deliver an opinion in accordance with
SECTION 10.1(a) with respect to the annual consolidated financial statements of
▇▇▇▇▇▇▇ and its Consolidated Subsidiaries.
(o) Change of Control. ▇▇▇▇▇▇▇ shall cease to own, directly or
indirectly, 100% of the issued and outstanding stock of each other Loan Party or
a "Change of Control" for purposes of the Senior Note Indenture, the Class B
Stock or the Warrant shall occur.
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(p) Fleet Financing. After July 15, 1998, any amount owed to Fleet
under and pursuant to the Fleet Financing shall remain outstanding and unpaid or
the Fleet Financing shall not have been terminated in writing or any Lien of a
tire company vendor to ITCO or its Subsidiaries affecting accounts or other
property, other than Inventory, of ITCO or any of its Subsidiaries, shall remain
in effect (unless such Lien shall have been subordinated to the Security
Interest at least to the same extent that it is subordinated to the Lien in
favor of Fleet under the Fleet Financing, or otherwise to the satisfaction of
the Agent, such that such accounts or other property, to the extent they
otherwise constitute Eligible Receivables, could be included in the computation
of the Borrowing Base).
SECTION 12.2 Remedies.
(a) Automatic Acceleration and Termination of Facilities. Upon the
occurrence of an Event of Default specified in SECTION 12.1(g) or (h), (i) the
principal of and the interest on the Loans and any Note at the time outstanding,
and all other amounts owed to the Agent or the Lenders under this Agreement or
any of the other Loan Documents and all other Secured Obligations, shall
thereupon become due and payable without presentment, demand, protest, or other
notice of any kind, all of which are expressly waived, anything in this
Agreement or any of the Loan Documents to the contrary notwithstanding, and (ii)
the Commitments and the right of the Borrowers to request Borrowings under this
Agreement shall immediately terminate.
(b) Other Remedies. If any Event of Default shall have occurred, and
during the continuance of any Event of Default, the Agent may, and at the
direction of the Required Lenders in their sole and absolute discretion shall,
do any of the following:
(i) declare the principal of and interest on the Loans and any
Note at the time outstanding, and all other amounts owed to the Agent
or the Lenders under this Agreement or any of the other Loan Documents
and all other Secured Obligations, to be forthwith due and payable,
whereupon the same shall immediately become due and payable without
presentment, demand, protest or other notice of any kind, all of which
are expressly waived, anything in this Agreement or the Loan Documents
to the contrary notwithstanding;
(ii) terminate the Commitments and any other right of the
Borrowers to request borrowings hereunder;
(iii) notify, or request the Borrowers to notify, in writing
or otherwise, any Account Debtor or obligor with respect to any one or
more of the Receivables to make payment to the Agent, for the benefit
of the Lenders, or any agent or designee of the Agent, at such address
as may be specified by the Agent and if, notwithstanding the giving of
any notice, any Account Debtor or other such obligor shall make
payments to the Borrowers, the Borrowers shall hold all such payments
received in trust for the Agent, for the account of the Lenders,
without commingling the same with other funds or property of, or held
by, the Borrowers, and shall deliver the same to the Agent or any such
agent or designee of the Agent
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immediately upon receipt by the Borrowers in the identical form
received, together with any necessary endorsements;
(iv) settle or adjust disputes and claims directly with
Account Debtors and other obligors on Receivables for amounts and on
terms which the Agent considers advisable and in all such cases only
the net amounts received by the Agent, for the account of the Lenders,
in payment of such amounts, after deductions of costs and attorneys'
fees, shall constitute Collateral and the Borrowers shall have no
further right to make any such settlements or adjustments or to accept
any returns of merchandise;
(v) enter upon any premises in which Inventory may be located
and, without resistance or interference by the Borrowers, take
physical possession of any or all thereof and maintain such possession
on such premises or move the same or any part thereof to such other
place or places as the Agent shall choose, without being liable to the
Borrowers on account of any loss, damage or depreciation that may
occur as a result thereof, so long as the Agent shall act reasonably
and in good faith;
(vi) require the Borrowers to and the Borrowers shall, without
charge to the Agent or any Lender, assemble the Inventory and maintain
or deliver it into the possession of the Agent or any agent or
representative of the Agent at such place or places as the Agent may
designate and as are reasonably convenient to both the Agent and the
applicable Borrower;
(vii) at the expense of the Borrowers, cause any of the
Inventory to be placed in a public or field warehouse, and the Agent
shall not be liable to the Borrowers on account of any loss, damage or
depreciation that may occur as a result thereof, so long as the Agent
shall act reasonably and in good faith;
(viii) without notice, demand or other process, and without
payment of any rent or any other charge, enter any of the Borrowers'
premises and, without breach of the peace, until the Agent, on behalf
of the Lenders, completes the enforcement of its rights in the
Collateral, take possession of such premises or place custodians in
exclusive control thereof, remain on such premises and use the same
and any of the Borrowers' equipment, for the purpose of (A) completing
any work in process, preparing any Inventory for disposition and
disposing thereof, and (B) collecting any Receivable, and the Agent
for the benefit of the Lenders is hereby granted a license or
sublicense and all other rights as may be necessary, appropriate or
desirable to use the Proprietary Rights in connection with the
foregoing, and the rights of the Borrowers under all licenses,
sublicenses and franchise agreements shall inure to the Agent for the
benefit of the Lenders (PROVIDED, HOWEVER, that any use of any
federally registered trademarks as to any goods shall be subject to
the control as to the quality of such goods of the owner of such
trademarks and the goodwill of the business symbolized thereby);
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(ix) exercise any and all of its rights under any and all of
the Security Documents;
(x) apply any Collateral consisting of cash to the payment of
the Secured Obligations in any order in which the Agent, on behalf of
the Lenders, may elect or use such cash in connection with the
exercise of any of its other rights hereunder or under any of the
Security Documents;
(xi) establish or cause to be established one or more
Lockboxes or other arrangement for the deposit of proceeds of
Receivables, and, in such case, the Borrowers shall cause to be
forwarded to the Agent at the Agent's Office, on a daily basis, copies
of all checks and other items of payment and deposit slips related
thereto deposited in such Lockboxes, together with collection reports
in form and substance satisfactory to the Agent; and
(xii) exercise all of the rights and remedies of a secured
party under the UCC and under any other Applicable Law, including,
without limitation, the right, without notice except as specified
below and with or without taking possession thereof, to sell the
Collateral or any part thereof in one or more parcels at public or
private sale, at any location chosen by the Agent, for cash, on credit
or for future delivery, and at such price or prices and upon such
other terms as the Agent may deem commercially reasonable. Each
Borrower agrees that, to the extent notice of sale shall be required
by law, at least 10 days' notice to the Borrowers of the time and
place of any public sale or the time after which any private sale is
to be made shall constitute reasonable notification, but notice given
in any other reasonable manner or at any other reasonable time shall
constitute reasonable notification. The Agent shall not be obligated
to make any sale of Collateral regardless of notice of sale having
been given. The Agent may adjourn any public or private sale from time
to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to
which it was so adjourned.
SECTION 12.3 Application of Proceeds. All proceeds from each sale of,
or other realization upon, all or any part of the Collateral following an Event
of Default shall be applied or paid over in accordance with the provisions of
SECTION 4.16.
THE BORROWERS SHALL REMAIN LIABLE AND WILL PAY, ON DEMAND, ANY DEFICIENCY
REMAINING IN RESPECT OF THE SECURED OBLIGATIONS, TOGETHER WITH INTEREST THEREON
AT A RATE PER ANNUM EQUAL TO THE HIGHEST RATE THEN PAYABLE HEREUNDER ON SUCH
SECURED OBLIGATIONS, WHICH INTEREST SHALL CONSTITUTE PART OF THE SECURED
OBLIGATIONS.
SECTION 12.4 Power of Attorney. In addition to the authorizations
granted to the Agent under SECTION 9.13 or under any other provision of this
Agreement or of any other Loan Document, during the continuance of an Event of
Default, each Borrower hereby irrevocably designates, makes, constitutes and
appoints the Agent (and all Persons designated by the Agent from time to time)
as the Borrower's true and lawful attorney, and agent in fact, and the
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Agent, or any agent of the Agent, may, without notice to the Borrowers, and at
such time or times as the Agent or any such agent in its sole discretion may
determine, in the name of a Borrower, the Agent or the Lenders,
(a) demand payment of the Receivables,
(b) enforce payment of the Receivables by legal proceedings or
otherwise,
(c) exercise all of any Borrower's rights and remedies with respect to
the collection of Receivables,
(d) settle, adjust, compromise, extend or renew any or all of the
Receivables,
(e) settle, adjust or compromise any legal proceedings brought to
collect the Receivables,
(f) discharge and release the Receivables or any of them,
(g) prepare, file and sign the name of a Borrower on any proof of
claim in bankruptcy or any similar document against any Account Debtor,
(h) prepare, file and sign the name of a Borrower on any notice of
Lien, assignment or satisfaction of Lien, or similar document in connection with
any of the Collateral,
(i) endorse the name of a Borrower upon any chattel paper, document,
instrument, notice, freight ▇▇▇▇, ▇▇▇▇ of lading or similar document or
agreement relating to the Receivables, the Inventory or any other Collateral,
(j) use the stationery of the Borrowers and sign the names of the
Borrowers to verifications of the Receivables and on any notice to the Account
Debtors,
(k) open the Borrowers' mail,
(l) notify the post office authorities to change the address for
delivery of the Borrowers' mail to an address designated by the Agent, and
(m) use the information recorded on or contained in any data
processing equipment and computer hardware and software relating to the
Receivables, Inventory or other Collateral to which any Borrower has access.
SECTION 12.5 Miscellaneous Provisions Concerning Remedies.
(a) Rights Cumulative. The rights and remedies of the Agent and the
Lenders under this Agreement, the Notes and each of the Loan Documents shall be
cumulative and not exclusive of any rights or remedies which it or they would
otherwise have. In exercising such rights and remedies the Agent and the Lenders
may be selective and no failure or delay by the Agent or any Lender in
exercising any right shall operate as a waiver of it, nor shall any single or
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partial exercise of any power or right preclude its other or further exercise or
the exercise of any other power or right.
(b) Waiver of Marshalling. Each Borrower hereby waives any right to
require any marshalling of assets and any similar right.
(c) Limitation of Liability. Nothing contained in this ARTICLE 12 or
elsewhere in this Agreement or in any of the Loan Documents shall be construed
as requiring or obligating the Agent, any Lender or any agent or designee of the
Agent or any Lender to make any demand, or to make any inquiry as to the nature
or sufficiency of any payment received by it, or to present or file any claim or
notice or take any action, with respect to any Receivable or any other
Collateral or the monies due or to become due thereunder or in connection
therewith, or to take any steps necessary to preserve any rights against prior
parties, and the Agent, the Lenders and their agents or designees shall have no
liability to the Borrowers for actions taken pursuant to this ARTICLE 12, any
other provision of this Agreement or any of the Loan Documents so long as the
Agent or such Lender shall act in good faith and in a commercially reasonable
manner.
(d) Appointment of Receiver. In any action under this ARTICLE 12, the
Agent shall be entitled during the continuance of an Event of Default, to the
fullest extent permitted by Applicable Law, to the appointment of a receiver,
without notice of any kind whatsoever, to take possession of all or any portion
of the Collateral and to exercise such power as the court shall confer upon such
receiver.
SECTION 12.6 Trademark License. Each Borrower hereby grants to the
Agent for its benefit as Agent and for the benefit of the Lenders, the
nonexclusive right and license to use its trademarks for the purposes set forth
in SECTION 12.2(b)(viii) and for the purpose of enabling the Agent to realize on
the Collateral and to permit any purchaser of any portion of the Collateral
through a foreclosure sale or any other exercise of the Agent's rights and
remedies under this Agreement and the other Security Documents to use, sell or
otherwise dispose of the Collateral bearing any such trademark. Such right and
license is granted free of charge, without the requirement that any monetary
payment whatsoever be made to the Borrowers or any other Person by the Lenders
or the Agent or any purchaser or purchasers of the Collateral. The Borrowers
hereby represent, warrant, covenant and agree that they presently have, and
shall continue to have, the right, without the approval or consent of others, to
grant the license set forth in this SECTION 12.6.
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ARTICLE 13
ASSIGNMENTS
SECTION 13.1 Successors and Assigns; Participations.
(a) This Agreement shall be binding upon and inure to the benefit of
the Borrowers, the Lenders, the Agent, all future holders of the Notes, and
their respective successors and assigns, except that the Borrowers may not
assign or transfer any of their rights or obligations under this Agreement
without the prior written consent of each Lender.
(b) Each Lender may with the consent of the Agent and, so long as no
Default or Event of Default has occurred and is continuing, ▇▇▇▇▇▇▇ (which
consent shall not be unreasonably withheld) assign to one or more Eligible
Assignees all or a portion of its interests, rights and obligations under this
Agreement (including, without limitation, all or a portion of the Loans at the
time owing to it and the Notes held by it) (PROVIDED that no consent shall be
required with respect to any assignment to an Eligible Assignee as part of the
assigning Lender's Transfer of all or substantially all of its assets of a
similar type in connection with any acquisition or divestiture or otherwise);
PROVIDED, HOWEVER, that (i) each such assignment shall be of a constant, and not
a varying, percentage of all the assigning Lender's rights and obligations under
this Agreement, (ii) the amount of the Commitment of the assigning Lender that
is subject to each such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the Agent) shall in
no event be less than the Minimum Commitment (or the assigning Lender's entire
remaining Commitment, if less) (except that a Lender may assign less than the
Minimum Commitment to its Affiliate), (iii) in the case of a partial assignment,
the amount of the Commitment that is retained by the assigning Lender
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Agent) shall in no event be less than the Minimum
Commitment, (iv) the parties to each such assignment shall execute and deliver
to the Agent, for its acceptance and recording in the Register an Assignment and
Acceptance, together with any Note or Notes subject to such assignment and an
assignment fee in the amount of $2,500, (v) such assignment shall not, without
the consent of the Borrowers, require the Borrowers to file a registration
statement with the Securities and Exchange Commission or apply to or qualify the
Loans or the Notes under the blue sky laws of any state, and (vi) the
representation contained in SECTION 13.2 hereof shall be true with respect to
any such proposed assignee. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment and
Acceptance, which effective date shall be at least five Business Days after the
execution thereof, (A) the assignee thereunder shall be a party hereto and, to
the extent provided in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder, and (B) the Lender assignor thereunder shall,
to the extent provided in such assignment, be released from its obligations
under this Agreement.
(c) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than the
representation and warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim,
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such Lender assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
any other instrument or document furnished pursuant hereto; (ii) such Lender
assignor makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrowers or the performance or
observance by the Borrowers of any of their obligations under this Agreement or
any other instrument or document furnished pursuant hereto; (iii) such assignee
confirms that it has received a copy of this Agreement, together with copies of
the financial statements referred to in SECTION 6.1(n) and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Agent, such Lender assignor or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee confirms that it is an
Eligible Assignee; (vi) such assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under this
Agreement and the other Loan Documents as are delegated to the Agent by the
terms hereof and thereof, together with such powers as are reasonably incidental
thereto; and (vii) such assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of this Agreement are
required to be performed by it as a Lender.
(d) The Agent shall maintain a copy of each Assignment and Acceptance
delivered to it and a register for the recordation of the names and addresses of
the Lenders and the Commitment and Proportionate Share of, and principal amount
of the Loans and owing to, each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrowers, the Agent and the Lenders may treat each person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrowers or
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Eligible Assignee together with any Note or Notes and
evidence satisfactory to the Agent of the Borrowers' consent thereto (if
applicable), subject to such assignment, the Agent shall, if such Assignment and
Acceptance has been completed and is in the form of EXHIBIT D, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register, (iii) give prompt notice thereof to the Lenders and the Borrowers, and
(vi) promptly deliver a copy of such Acceptance and Assignment to the Borrowers.
Within five Business Days after receipt of notice, the Borrowers shall execute
and deliver to the Agent in exchange for the surrendered Note or Notes a new
Note or Notes to the order of such Eligible Assignee in amounts equal to the
Commitment assumed by such Eligible Assignee pursuant to such Assignment and
Acceptance and a new Note or Notes to the order of the assigning Lender in an
amount equal to the Commitment retained by it hereunder. Such new Note or Notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of the assigned Notes. Each surrendered Note or Notes shall be canceled and
returned to the Borrowers.
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(f) Each Lender may sell participations to one or more banks or other
entities in all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitment hereunder and
the Loans owing to it and the Notes held by it); PROVIDED, HOWEVER, that (i)
each such participation (other than to a Lender's own Affiliate) shall be in an
amount not less than the Minimum Commitment, (ii) such Lender's obligations
under this Agreement (including, without limitation, its Commitment hereunder)
shall remain unchanged, (iii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iv) such Lender
shall remain the holder of the Notes held by it for all purposes of this
Agreement, (v) the Borrowers, the Agent and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement; PROVIDED, that such Lender may
agree with any participant that such Lender will not, without such participant's
consent, agree to or approve any waivers or amendments which would reduce the
principal of or the interest rate on any Loans, extend the term or increase the
amount of the commitments of such participant, reduce the amount of any fees to
which such participant is entitled, extend any scheduled payment date for
principal or release Collateral securing the Loans (other than Collateral
disposed of pursuant to SECTION 8.7 hereof or otherwise in accordance with the
terms of this Agreement or the Security Documents), and (vi) any such
disposition shall not, without the consent of the Borrowers, require any
Borrower to file a registration statement with the Securities and Exchange
Commission to apply to qualify the Loans or the Notes under the blue sky law of
any state. The Lender selling a participation to any bank or other entity that
is not an Affiliate of such Lender shall give prompt notice thereof to the
Agent, the other Lenders and the Borrowers.
(g) Any Lender may, in connection with any assignment, proposed
assignment, participation or proposed participation pursuant to this SECTION
13.1, disclose to the assignee, participant, proposed assignee or proposed
participant, any information relating to the Borrowers furnished to such Lender
by or on behalf of the Borrowers, PROVIDED that, prior to any such disclosure,
each such assignee, proposed assignee, participant or proposed participant shall
agree with the Borrowers or such Lender (which in the case of an agreement with
only such Lender, the Borrowers shall be recognized as third party beneficiaries
thereof) to preserve the confidentiality of any confidential information
relating to the Borrowers received from such Lender.
SECTION 13.2 Representation of Lenders. Each Lender hereby represents
that it will make each Loan hereunder as a commercial loan for its own account
in the ordinary course of its business; PROVIDED, HOWEVER, that subject to
SECTION 13.1 hereof, the disposition of the Notes or other evidence of the
Secured Obligations held by any Lender shall at all times be within its
exclusive control.
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ARTICLE 14
AGENT
SECTION 14.1 Appointment of Agent. Each Lender hereby irrevocably
designates and appoints (1) BankBoston as the Agent of such Lender and (2) each
of Fleet and FUNB as a Co-Agent under this Agreement and the other Loan
Documents, and each Lender irrevocably authorizes the Agent, as the Agent for
such Lender, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Agent by the terms of this
Agreement and such other Loan Documents, including, without limitation, to make
determinations as to the eligibility of Inventory and Receivables, to establish
Additional Reserves and to adjust the advance ratios contained in the definition
of "Borrowing Base" (so long as such advance ratios, as adjusted, do not exceed
those set forth in the definition of "Borrowing Base" as of the Agreement Date),
together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement or the
other Loan Documents, the Agent shall not have any duties or responsibilities
except those expressly set forth herein and therein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or the other Loan Documents or otherwise exist against the Agent.
SECTION 14.2 Delegation of Duties. The Agent may execute any of its
duties under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care. The Agent hereby appoints, authorizes and directs each Lender
to act as collateral sub-agent for the Agent for the purposes of perfecting
security interests and Liens in Collateral held by such Lender.
SECTION 14.3 Exculpatory Provisions. Neither the Agent nor any of its
trustees, officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (i) liable to any Lender (or any Lender's participants) for
any action lawfully taken or omitted to be taken by it or such Person under or
in connection with this Agreement or the other Loan Documents (except for its or
such Person's, as the case may be, own gross negligence or willful misconduct),
or (ii) responsible in any manner to any Lender (or any Lender's participants)
for any recitals, statements, representations or warranties made by the
Borrowers or any of its Subsidiaries, any Affiliate thereof or any other Person
or any officer thereof contained in this Agreement or the other Loan Documents
or in any certificate, report, statement or other document referred to or
provided for in, or received by the Agent under or in connection with, this
Agreement or the other Loan Documents or for the existence, value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
the other Loan Documents or any Collateral or the Security Interest or other
Lien or other interest therein or for any failure of the Borrowers, or any
Subsidiary of the Borrower or any Affiliate of the Borrowers to perform its
obligations hereunder or thereunder. The Agent shall not be under any obligation
to any Lender to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement, or to
inspect the properties, books or records of the Borrowers.
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SECTION 14.4 Reliance by Agent. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any Note, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrowers), independent
accountants and other experts selected by the Agent. The Agent may deem and
treat the payee of any Note as the owner thereof for all purposes unless such
Note shall have been transferred in accordance with SECTION 13.1. The Agent
shall be fully justified in failing or refusing to take any action under this
Agreement and the other Loan Documents unless it shall first receive such advice
or concurrence of the Required Lenders as it deems appropriate and shall be
indemnified to its satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. The Agent shall in all cases be fully protected in acting, or
in refraining from acting, under this Agreement and the Notes in accordance with
a request of the Required Lenders (or all Lenders if such action or inaction
would have the effect of amending or waiving a breach of any provision of this
Agreement that only all the Lenders may amend or waive in accordance with the
provisions of SECTION 15.11(b)), and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Notes.
SECTION 14.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received notice from a Lender or the Borrowers
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the Agent
receives such a notice, the Agent shall promptly give notice thereof to the
Lenders. The Agent shall take such action with respect to such Default or Event
of Default as shall be directed by the Required Lenders; PROVIDED that unless
and until the Agent shall have received such directions, the Agent may (but
shall not be obligated to) continue making Loans to the Borrowers on behalf of
the Lenders in reliance on the provisions of SECTION 4.7 and take such other
action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable and in the best interests of the
Lenders.
SECTION 14.6 Non-Reliance on Agents and Other Lenders. Each Lender
expressly acknowledges that neither the Agent nor any Co-Agent nor any of their
respective officers, directors, counsel, employees, agents, attorneys-in-fact or
Affiliates has made any representations or warranties to it and that no act by
the Agent or any Co-Agent hereafter taken, including any review of the affairs
of the Borrowers, any Subsidiary or any Affiliate of the Borrowers, shall be
deemed to constitute any representation or warranty by the Agent or any Co-Agent
to any Lender. Each Lender represents to the Agent and each Co-Agent that it
has, independently and without reliance upon the Agent or any Co-Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial (and other) condition and creditworthiness of
the Borrowers and the Subsidiaries, and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon the Agent or any Co-Agent or any
other Lender, and
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based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial (and other) condition and
creditworthiness of the Borrowers and the Subsidiaries. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Agent hereunder or under the other Loan Documents neither the Agent nor any
Co-Agent shall have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, operations, property,
financial (and other) condition or creditworthiness of the Borrowers or the
Subsidiaries or the Affiliates of the Borrowers which may come into the
possession of the Agent, any Co-Agent or any of their respective officers,
directors, employees, agents, attorneys-in-fact or Affiliates.
SECTION 14.7 Indemnification.
(a) The Lenders agree to indemnify the Agent in its capacity as such
(to the extent not reimbursed by the Borrowers and without limiting the
obligation of the Borrowers or any other Person to do so), Ratably according to
their respective Commitment Percentages, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
attorneys' fees, costs, expenses or disbursements of any kind whatsoever which
may at any time (including, without limitation, at any time following the
payment of the Notes) be imposed on, incurred by or asserted against the Agent
in any way relating to or arising out of this Agreement or the other Loan
Documents, or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by the Agent under or in connection with any of the foregoing; PROVIDED that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, attorneys'
fees, costs, expenses or disbursements resulting from the Agent's gross
negligence or willful misconduct or resulting solely from transactions or
occurrences that occur at a time after such Lender has assigned all of its
interests, rights and obligations under this Agreement pursuant to SECTION 13.1
or, in the case of a Lender to which an assignment is made hereunder pursuant to
SECTION 13.1, at a time before such assignment. The agreements in this SECTION
14.7 shall survive the payment of the Notes, the Secured Obligations and all
other amounts payable hereunder and the termination of this Agreement.
(b) Without limiting the generality of the foregoing provisions of
this SECTION 14.7, if the Agent should be sued by any receiver, trustee in
bankruptcy, debtor-in-possession or other Person on account of any alleged
preference or fraudulent transfer received or alleged to have been received from
the Borrowers, any Subsidiary or any other Person as the result of any
transaction under the Loan Documents, then any monies paid by the Agent in
settlement or satisfaction of such suit, together with all costs and expenses
(including attorneys' fees and expenses) incurred by Agent in the defense of
same, shall be promptly reimbursed to the Agent by the Lenders to the extent of
each Lender's Proportionate Share.
(c) Further, without limiting the generality of the foregoing
provisions of this SECTION 14.7, if at any time (whether prior to or after the
Termination Date) any action or proceeding shall be brought against the Agent by
the Borrowers, any Subsidiary, or by any other
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Person claiming by, through or under the Borrowers or any Subsidiary, to recover
damages for any act taken or omitted by the Agent under any of the Loan
Documents or in the performance of any rights, powers or remedies of the Agent
against the Borrowers, any Account Debtor, any Subsidiary, the Collateral or
with respect to any Loans, or to obtain any other relief of any kind on account
of any transaction between the Agent and the Borrowers, any Subsidiary or any
other Person under or in relation to any of the Loan Documents, the Lenders
agree to indemnify and hold the Agent harmless with respect thereto and to pay
to Agent their respective Proportionate Shares of such amount as the Agent shall
be required to pay by reason of a judgment, decree or other order entered in
such action or proceeding or by reason of any compromise or settlement agreed to
by the Agent, including all interest and costs assessed against the Agent in
defending or compromising such action, together with attorneys' fees and other
legal expenses paid or incurred by the Agent in connection therewith; PROVIDED,
HOWEVER, that no Lender shall be liable to the Agent for any of the foregoing to
the extent that they arise from the willful misconduct or gross negligence of
the Agent. In the Agent's discretion, the Agent may also reserve for or satisfy
any such judgment, decree or order from proceeds of Collateral prior to any
distributions therefrom to or for the account of Lenders.
SECTION 14.8 Agent in Its Individual Capacity. The institution at the
time acting as the Agent and its Affiliates may make loans to, issue letters of
credit to or for the account of, accept deposits from and generally engage in
any kind of business with the Borrowers, any Subsidiary or any Affiliate of the
Borrowers as if it were not the Agent hereunder. With respect to its Commitment,
the Loans made or renewed by it and any Note issued to it and any Letter of
Credit issued by it, such institution shall have and may exercise the same
rights and powers under this Agreement and the other Loan Documents and shall be
subject to the same obligations and liabilities as and to the extent set forth
herein and in the other Loan Documents for any other Lender. The terms "Lenders"
and "Required Lenders" or any other term shall, unless the context clearly
otherwise indicates, include such institution in its individual capacity as a
Lender or one of the Required Lenders.
SECTION 14.9 Successor Collateral Agent.
(a) The Agent may resign as Agent upon 30 days' notice to the Lenders
and the Borrowers or may be removed by the Lenders (other than the Lender who is
also the Agent), or, if there are more than two other Lenders by the Lenders
whose Commitment Percentages equal at least 51% of the total Commitment
Percentage of all other Lenders; PROVIDED, HOWEVER that such resignation shall
not take effect until a successor agent has been appointed. If the Agent shall
resign as Agent under this Agreement or be removed, then the Required Lenders
shall appoint from among the Lenders a successor agent for the Lenders and, so
long as no Event of Default has occurred and is continuing, subject to approval
by the Borrowers (which approval shall not be unreasonably withheld), whereupon
such successor agent shall succeed to the rights, powers and duties of the
Agent, and the term "Agent" shall mean such successor agent effective upon its
appointment, and the former Agent's rights, powers and duties as Agent shall be
terminated, without any other or further act or deed on the part of such former
Agent or any of the parties to this Agreement or any holders of the Notes. If
the Required Lenders have failed to appoint a successor Agent within 30 days of
the resignation notice given by the Agent as provided above, then the Agent
shall be entitled to appoint a successor agent from among the
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Lenders, subject, so long as no Event of Default has occurred and is continuing,
to approval by the Borrowers (which approval shall not be unreasonably
withheld). After any retiring Agent's resignation hereunder as Agent or the
removal of any Agent, the provisions of SECTION 14.7 shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Agent under
this Agreement.
(b) It is intended that there shall be no violation of any Applicable
Law denying or restricting the right of financial institutions to transact
business as agent in any jurisdiction. It is recognized that, in case of
litigation under any of the Loan Documents, or in case the Agent deems that by
reason of present or future laws of any jurisdiction the Agent might be
prohibited from or restricted in exercising any of the powers, rights or
remedies granted to the Agent or the Lenders hereunder or under any of the Loan
Documents or from holding title to or a Lien upon any Collateral or from taking
any other action which may be necessary or desirable hereunder or under any of
the Loan Documents, the Agent may appoint an additional individual or
institution as a separate collateral agent or co-collateral agent which is not
so prohibited from or restricted in taking any of such actions or exercising any
of such powers, rights or remedies. If the Agent shall appoint an additional
individual or institution as a separate collateral agent or co-collateral agent
as provided above, each and every remedy, power, right, claim, demand or cause
of action intended by any of the Loan Documents to be exercised by or vested in
or conveyed to the Agent with respect thereto shall be exercisable by and vested
in such separate collateral agent or co-collateral agent, but only to the extent
necessary to enable such separate collateral agent or co-collateral agent to
exercise such powers, rights and remedies, and every covenant and obligation
necessary to the exercise thereof by such separate collateral agent or
co-collateral agent shall run to and be enforceable by either of them. Should
any instrument from the Lenders be required by the separate collateral agent or
co-collateral agent so appointed by Agent in order more fully and certainly to
vest in and confirm to him or it such rights, powers, duties and obligations,
including without limitation indemnification of such collateral agent or
co-collateral agent, any and all of such instruments shall, on request, be
executed, acknowledged and delivered by the Lenders. In case any separate
collateral agent or co-collateral agent, or a successor to either, shall die,
become incapable of acting, resign or be removed, all the estates, properties,
rights, powers, duties and obligations of such separate collateral agent or
co-collateral agent, so far as permitted by Applicable Law, shall vest in and be
exercised by the Agent until the appointment of a new collateral agent or
successor to such separate collateral agent or co-collateral agent.
SECTION 14.10 Notices from Agent to Lenders. The Agent shall promptly,
upon receipt thereof, forward to each Lender copies of any updated Schedules and
of any written notices, reports or other information supplied to it by the
Borrowers or any Subsidiary (but which such Person is not required to supply
directly to the Lenders). Except to the extent expressly provided in this
Agreement or in the other Loan Documents, the Agent shall not be obligated to
deliver or disclose to any Lender any of the Agent's internal reports, analysis
or investigation or any records or other information in its possession relating
to the Borrowers or any of the Subsidiaries or the Affiliates of the Borrowers.
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SECTION 14.11 Declaring Events of Default. Upon the occurrence of a
Default, the Agent may, and at the direction of the Required Lenders shall, give
such notice or take such other action as may be required hereunder to declare an
Event of Default.
SECTION 14.12 Co-Agents. For avoidance of doubt, it is expressly
acknowledged and agreed by the Agent and each Lender for the benefit of the
Co-Agents that, other than any rights or obligations explicitly reserved to or
imposed upon the Co-Agents under this Agreement, no Co-Agent, in such capacity,
has any rights or obligations hereunder nor shall any Co-Agent, in such
capacity, be responsible or accountable to any other party hereto for any action
or failure to act hereunder, other than in connection with such explicitly
reserved rights or such obligations and then only for claims, damages, losses
(other than consequential losses) and other liabilities arising out of such
Co-Agent's own gross negligence or willful misconduct.
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ARTICLE 15
MISCELLANEOUS
SECTION 15.1 Notices.
(a) Method of Communication. Except as specifically provided in this
Agreement or in any of the Loan Documents, all notices and the communications
hereunder and thereunder shall be in writing or by telephone, subsequently
confirmed in writing. Notices in writing shall be delivered personally or sent
by certified or registered mail, postage pre-paid, or by overnight courier,
telex or facsimile transmission and shall be deemed received in the case of
personal delivery, when delivered, in the case of mailing, when receipted for,
in the case of overnight delivery, on the next Business Day after delivery to
the courier, and in the case of telex and facsimile transmission, upon
transmittal, PROVIDED that in the case of notices to the Agent, notice shall be
deemed to have been given only when such notice is actually received by the
Agent. A telephonic notice to the Agent, as understood by the Agent, will be
deemed to be the controlling and proper notice in the event of a discrepancy
with or failure to receive a confirming written notice.
(b) Addresses for Notices. Notices to any party shall be sent to it at
the following addresses, or any other address of which all the other parties are
notified in writing by such first party:
If to the Borrowers: The ▇.▇. ▇▇▇▇▇▇▇ Company, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. Roof
Facsimile No.: ▇▇▇ ▇▇▇-▇▇▇▇
with a copy to: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
The ▇.▇. ▇▇▇▇▇▇▇ Company, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇ ▇▇▇-▇▇▇▇
If to the Agent: BankBoston, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile No.: ▇▇▇ ▇▇▇-▇▇▇▇
If to a Lender: At the address of such Lender set forth on the
signature pages hereof.
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(c) Agent's Office. The Agent hereby designates its office located at
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or any subsequent office which
shall have been specified for such purpose by written notice to the Borrowers,
as the office to which payments due are to be made and at which Loans will be
disbursed.
SECTION 15.2 Expenses. The Borrowers agree, jointly and severally, to
pay or reimburse on demand all costs and expenses reasonably (other than
pursuant to subsection (b) below as to which such requirement shall not apply)
incurred
(a) by or on behalf of the Agent, including, without limitation, the
reasonable fees and disbursements of counsel, in connection with
(i) the negotiation, preparation, execution, delivery,
administration, enforcement and termination of this Agreement and each
of the other Loan Documents, whenever the same shall be executed and
delivered, including, without limitation
(A) reasonable out-of-pocket costs and expenses incurred
in connection with the administration and interpretation of
this Agreement and the other Loan Documents;
(B) reasonable costs and expenses of appraisals of the
Collateral;
(C) the costs and expenses of lien searches; and
(D) taxes, fees and other charges for filing the
Financing Statements and continuations and the costs and
expenses of taking other actions to perfect, protect, and
continue the Security Interests;
(ii) the preparation, execution and delivery of any waiver,
amendment, supplement or consent by the Agent and the Lenders relating
to this Agreement or any of the Loan Documents;
(iii) sums paid or incurred to pay any amount or take any
action required of the Borrowers under the Loan Documents that the
Borrowers fail to pay or take;
(iv) costs of inspections and verifications of the Collateral,
including, without limitation, standard per diem fees charged by the
Agent or the Lenders, travel, lodging, and meals for inspections of
the Collateral and the Borrowers' operations and books and records by
the Agent's and/or the Lenders' agents up to two times per year and
whenever an Event of Default exists;
(v) costs and expenses of forwarding loan proceeds, collecting
checks and other items of payment, and establishing and maintaining
each Controlled Disbursement Account, Agency Account and Lockbox; and
(vi) costs and expenses of preserving and protecting the
Collateral; and
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(b) by or on behalf of the Agent or any Lender in connection with
(i) consulting, after the occurrence of a Default, with one or
more Persons, including appraisers, accountants and lawyers,
concerning the value of any Collateral for the Secured Obligations or
related to the nature, scope or value of any right or remedy of the
Agent or any Lender hereunder or under any of the Loan Documents,
including any review of factual matters in connection therewith, which
expenses shall include the fees and disbursements of such Persons; and
(ii) costs and expenses paid or incurred to obtain payment of
the Secured Obligations, enforce the Security Interests, sell or
otherwise realize upon the Collateral, and otherwise enforce the
provisions of the Loan Documents, or to prosecute or defend any claim
in any way arising out of, related to or connected with, this
Agreement or any of the Loan Documents, which expenses shall include
the reasonable fees and disbursements of counsel and of experts and
other consultants retained by the Agent or any Lender.
The foregoing shall not be construed to limit any other provisions of the Loan
Documents regarding costs and expenses to be paid by the Borrowers. The
Borrowers hereby authorize the Agent and the Lenders to debit the Borrowers'
Loan Accounts (by increasing the principal amount of the Loans) in the amount of
any such costs and expenses owed by the Borrowers when due.
SECTION 15.3 Stamp and Other Taxes. The Borrowers will pay any and all
stamp, registration, recordation and similar taxes, fees or charges and shall
indemnify the Agent and the Lenders against any and all liabilities with respect
to or resulting from any delay in the payment or omission to pay any such taxes,
fees or charges, which may be payable or determined to be payable in connection
with the execution, delivery, performance or enforcement of this Agreement and
any of the Loan Documents or the perfection of any rights or security interest
thereunder, including, without limitation, the Security Interest.
SECTION 15.4 Setoff. In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
during the continuance of any Event of Default, each Lender, any participant
with such Lender in the Loans and each Affiliate of each Lender are hereby
authorized by the Borrowers at any time or from time to time, without notice to
the Borrowers or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and to apply any and all deposits (general
or special, including, but not limited to, indebtedness evidenced by
certificates of deposit, whether matured or unmatured) and any other
indebtedness at any time held or owing by any Lender or any Affiliate of any
Lender or any participant to or for the credit or the account of the Borrowers
against and on account of the Secured Obligations irrespective or whether or not
(a) the Agent or such Lender shall have made any demand under this
Agreement or any of the Loan Documents, or
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(b) the Agent or such Lender shall have declared any or all of the
Secured Obligations to be due and payable as permitted by SECTION 12.2 and
although such Secured Obligations shall be contingent or unmatured.
SECTION 15.5 Consent to Advertising and Publicity. With the prior
written consent of the Borrowers, which consent shall not be unreasonably
withheld, the Agent, on behalf of the Lenders, may issue and disseminate to the
public information describing the credit accommodation entered into pursuant to
this Agreement, including the name and address of the Borrowers, the amount,
interest rate, maturity, collateral for and a general description of the credit
facilities provided hereunder and of the Borrowers' business.
SECTION 15.6 Reversal of Payments. The Agent and each Lender shall
have the continuing and exclusive right to apply, reverse and re-apply any and
all payments to any portion of the Secured Obligations in a manner consistent
with the terms of this Agreement. To the extent the Borrowers make a payment or
payments to the Agent, for the account of the Lenders, or any Lender receives
any payment or proceeds of the Collateral for the Borrowers' benefit, which
payment(s) or proceeds or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, state
or federal law, common law or equitable cause, then, to the extent of such
payment or proceeds received, the Secured Obligations or part thereof intended
to be satisfied shall be revived and continued in full force and effect, as if
such payment or proceeds had not been received by the Agent or such Lender.
SECTION 15.7 Injunctive Relief. The Borrowers recognize that, in the
event the Borrowers fail to perform, observe or discharge any of their
obligations or liabilities under this Agreement, any remedy at law may prove to
be inadequate relief to the Agent and the Lenders; therefore, the Borrowers
agree that if any Event of Default shall have occurred and be continuing, the
Agent and the Lenders, if the Agent or any Lender so requests, shall be entitled
to temporary and permanent injunctive relief without the necessity of proving
actual damages.
SECTION 15.8 Accounting Matters. All financial and accounting
calculations, measurements and computations made for any purpose relating to
this Agreement, including, without limitation, all computations utilized by the
Borrowers to determine whether they are in compliance with any covenant
contained herein, shall, unless this Agreement otherwise provides or unless
Required Lenders shall otherwise consent in writing, be performed in accordance
with GAAP.
SECTION 15.9 Amendments.
(a) Except as set forth in SUBSECTION (b) below, any term, covenant,
agreement or condition of this Agreement or any of the other Loan Documents may
be amended or waived, and any departure therefrom may be consented to by the
Required Lenders, if, but only if, such amendment, waiver or consent is in
writing signed by the Required Lenders and, in the case of an amendment (other
than an amendment described in SECTION 15.9(d)), by the Borrowers, PROVIDED that
no such amendment, unless consented to by the Agent, shall alter or affect the
rights or responsibilities of the Agent, and in any such event, the failure to
observe,
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perform or discharge any such term, covenant, agreement or condition (whether
such amendment is executed or such waiver or consent is given before or after
such failure) shall not be construed as a breach of such term, covenant,
agreement or condition or as a Default or an Event of Default. Unless otherwise
specified in such waiver or consent, a waiver or consent given hereunder shall
be effective only in the specific instance and for the specific purpose for
which given. In the event that any such waiver or amendment is requested by the
Borrowers, the Agent and the Lenders may require and charge a fee in connection
therewith and consideration thereof in such amount as shall be determined by the
Agent and the Required Lenders in their discretion.
(b) Without the prior unanimous written consent of the Lenders,
(i) no amendment, consent or waiver shall (A) affect the
amount or extend the time of the obligation of any Lender to make
Loans or (B) extend the originally scheduled time or times of payment
of the principal of any Loan or (C) alter the time or times of payment
of interest on any Loan or of any fees payable for the account of the
Lenders or (D) alter the amount of the principal of any Loan or the
rate of interest thereon (except with respect to application of the
Default Margin under SECTION 5.1(d)) or (E) alter the amount of any
commitment fee or other fee payable hereunder for the account of the
Lenders or (F) permit any subordination of the principal of or
interest on any Loan or (G) permit the subordination of the Security
Interests in any Collateral,
(ii) no Collateral having an aggregate value greater than
$250,000 shall be released by the Agent in any 12-month period other
than as specifically permitted in this Agreement or the Security
Documents nor shall any Collateral be released at a time when the
Agent is entitled to exercise remedies hereunder upon default, nor
shall the Borrower or the Guarantor be released from its liability for
the Secured Obligations,
(iii) except to the extent expressly provided in SECTIONS 4.7
and 14.1, no amendment shall be made to the definition of any of the
following terms, "Applicable Margin", "Borrowing Base" (except as
otherwise expressly contemplated hereunder) and the defined terms used
in such definition, "Eligible Assignee", "Proportionate Share",
"Ratable", "Ratable Share", "Commitment Percentage", "Secured
Obligations", or "Commitment",
(iv) none of the provisions of this SECTION 15.9, the
definitions "Lenders" or "Required Lenders", or the provisions of
ARTICLE 12 shall be amended, and
(v) neither the Agent nor any Lender shall consent to any
amendment to or waiver of the amortization, deferral or subordination
provisions of any instrument or agreement evidencing or relating to
obligations (whether or not Debt) of the Borrowers that are expressly
subordinate to any of the Secured Obligations if such amendment or
waiver would be adverse to the Lenders in their capacities as Lenders
hereunder;
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(vi) no amendment shall be made to any provision in ARTICLE
14, and
(vii) no extension of the Termination Date shall be effected;
PROVIDED, HOWEVER, that anything herein to the contrary notwithstanding, the
Required Lenders shall have the right to waive any Default or Event of Default
and the consequences hereunder of such Default or Event of Default provided only
that such Default or Event of Default does not arise under SECTION 12.1(g) OR
(h) or out of a breach of or failure to perform or observe any term, covenant or
condition of this Agreement or any other Loan Document (other than the
provisions of ARTICLE 12 of this Agreement) the amendment of which requires the
unanimous consent of the Lenders. The Required Lenders shall have the right,
with respect to any Default or Event of Default that may be waived by them, to
enter into an agreement with the Borrowers providing for the forbearance from
the exercise of any remedies provided hereunder or under the other Loan
Documents without thereby waiving any such Default or Event of Default.
(c) The making of Loans hereunder by the Lenders during the existence
of a Default or Event of Default shall not be deemed to constitute a waiver of
such Default or Event of Default.
(d) Notwithstanding any provision of this Agreement or the other Loan
Documents to the contrary, no consent, written or otherwise, of the Borrowers
shall be necessary or required in connection with any amendment to ARTICLE 14 or
Section 4.8, and any amendment to such provisions may be effected solely by and
among the Agent and the Lenders, PROVIDED that no such amendment shall impose
any obligation on the Borrowers or limit or reduce any right granted hereunder
or thereunder to the Borrowers.
SECTION 15.10 Assignment. All 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 Borrowers may not assign or
transfer any of their rights under this Agreement.
SECTION 15.11 Performance of Borrowers' Duties.
(a) The Borrowers' obligations under this Agreement and each of the
Loan Documents shall be performed by the Borrowers at their sole cost and
expense.
(b) If the Borrowers shall fail to do any act or thing which they have
covenanted to do under this Agreement or any of the Loan Documents, the Agent,
on behalf of the Lenders, may (but shall not be obligated to) do the same or
cause it to be done either in the name of the Agent or the Lenders or in the
name and on behalf of the Borrowers, and each Borrower hereby irrevocably
authorizes the Agent so to act.
SECTION 15.12 Indemnification. The Borrowers agree to reimburse the
Agent and the Lenders for all costs and expenses, including reasonable counsel
fees and disbursements, incurred, and to indemnify and hold harmless the Agent
and the Lenders from and against all losses suffered by, the Agent or any Lender
in connection with
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(a) the exercise by the Agent or any Lender of any right or remedy
granted to it under this Agreement or any of the Loan Documents,
(b) any claim, and the prosecution or defense thereof, arising out of
or in any way connected with this Agreement or any of the Loan Documents, and
(c) the collection or enforcement of the Secured Obligations or any of
them,
other than such costs, expenses and liabilities arising out of the Agent's or
any Lender's gross negligence or willful misconduct.
SECTION 15.13 All Powers Coupled with Interest. All powers of attorney
and other authorizations granted to the Agent and the Lenders and any Persons
designated by the Agent or the Lenders pursuant to any provisions of this
Agreement or any of the Loan Documents shall be deemed coupled with an interest
and shall be irrevocable so long as any of the Secured Obligations remain unpaid
or unsatisfied.
SECTION 15.14 Survival. Notwithstanding any termination of this
Agreement,
(a) until all Secured Obligations have been irrevocably paid in full
or otherwise satisfied, the Agent, for the benefit of the Lenders, shall retain
its Security Interest and shall retain all rights under this Agreement and each
of the Security Documents with respect to such Collateral as fully as though
this Agreement had not been terminated,
(b) the indemnities to which the Agent and the Lenders are entitled
under the provisions of this ARTICLE 15 and any other provision of this
Agreement and the Loan Documents shall continue in full force and effect and
shall protect the Agent and the Lenders against events arising after such
termination as well as before, and
(c) in connection with the termination of this Agreement and the
release and termination of the Security Interests, the Agent, on behalf of
itself as agent and the Lenders, may require such assurances and indemnities as
it shall reasonably deem necessary or appropriate to protect the Agent and the
Lenders against loss on account of such release and termination, including,
without limitation, with respect to credits previously applied to the Secured
Obligations that may subsequently be reversed or revoked.
SECTION 15.15 Titles and Captions. Titles and captions of Articles,
Sections and subsections in this Agreement are for convenience only, and neither
limit nor amplify the provisions of this Agreement.
SECTION 15.16 Severability of Provisions. Any provision of this
Agreement or any Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or unenforceability without invalidating the remainder of
such provision or the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
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SECTION 15.17 Governing Law; Waiver of Jury Trial.
(a) This Agreement and the Notes shall be governed by and construed in
accordance with the laws of the State of New York.
(b) Each Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court for the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or the other Loan Documents, or for recognition or enforcement of any
judgment and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State court or, to the extent permitted by law,
in such federal court. Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Agreement shall affect any right that the Agent, BankBoston
as the issuer of any Letter of Credit or any Lender may otherwise have to bring
any action or proceeding relating to this Agreement or the other Loan Documents
against any Borrower or its properties in the courts of any jurisdiction.
(c) Each Borrower hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents in any court referred to in PARAGRAPH (b) of this Section. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in SECTION 15.1. Nothing in this
Agreement will affect the right of any party to this Agreement to service of
process in any other manner permitted by law.
(e) Each Borrower, the Agent and each Lender hereby knowingly,
intentionally and voluntarily waive trial by jury in any action or proceeding of
any kind or nature in any court in which an action may be commenced by or
against a Borrower, the Agent or such Lender arising out of this Agreement, the
Collateral or any assignment thereof or by reason of any other cause or dispute
whatsoever between the Borrowers and the Agent or any Lender of any kind or
nature.
SECTION 15.18 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and shall be
binding upon all parties, their successors and assigns, and all of which taken
together shall constitute one and the same agreement.
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SECTION 15.19 Reproduction of Documents. This Agreement, each of the
Loan Documents and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by the Agent or any Lender, and (c) financial
statements, certificates and other information previously or hereafter furnished
to the Agent or any Lender, may be reproduced by the Agent or such Lender by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and such Person may destroy any original document so produced.
Each party hereto stipulates that, to the extent permitted by Applicable Law,
any such reproduction shall be as admissible in evidence as the original itself
in any judicial or administrative proceeding (whether or not the original shall
be in existence and whether or not such reproduction was made by the Agent or
such Lender in the regular course of business), and any enlargement, facsimile
or further reproduction of such reproduction shall likewise be admissible in
evidence.
SECTION 15.20 Term of Agreement. This Agreement shall remain in effect
from the Agreement Date through the Termination Date and thereafter until all
Secured Obligations shall have been irrevocably paid and satisfied in full. No
termination of this Agreement shall affect the rights and obligations of the
parties hereto arising prior to such termination.
SECTION 15.21 Increased Capital. If any Lender shall have determined
that the adoption of any applicable law, rule, regulation, guideline, directive
or request (whether or not having force of law) regarding capital requirements
for banks or bank holding companies, or any change therein or in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, in each case after the Agreement Date, or compliance by such Lender
with any of the foregoing, imposes or increases a requirement by such Lender to
allocate capital resources to such Lender's Commitment to make Loans hereunder
which has or would have the effect of reducing the return on such Lender's
capital to a level below that which such Lender could have achieved (taking into
consideration such Lender's then existing policies with respect to capital
adequacy and assuming full utilization of such Lender's capital) but for such
adoption, change or compliance by any amount deemed by such Lender to be
material: (i) such Lender shall promptly after its determination of such
occurrence give notice thereof to the Borrower; and (ii) the Borrowers shall pay
to such Lender as an additional fee from time to time on demand such amount as
such Lender certifies to be the amount that will compensate it for such
reduction. A certificate of such Lender claiming compensation under this SECTION
15.21 shall be conclusive in the absence of manifest error. Such certificate
shall set forth the nature of the occurrence giving rise to such compensation,
the additional amount or amounts to be paid to it hereunder and the method by
which such amounts were determined. In determining such amount, such Lender may
use any reasonable averaging and attribution methods.
SECTION 15.22 Pro-Rata Participation.
(a) Each Lender agrees that if, as a result of the exercise of a right
of setoff, banker's lien or counterclaim or other similar right or the receipt
of a secured claim it receives any payment in respect of the Secured
Obligations, it shall promptly notify the Agent thereof (and the Agent shall
promptly notify the other Lenders). If, as a result of such payment, such
117
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Lender receives a greater percentage of the Secured Obligations owed to it under
this Agreement than the percentage received by any other Lender, such Lender
shall purchase a participation (which it shall be deemed to have purchased
simultaneously upon the receipt of such payment) in the Secured Obligations then
held by such other Lenders so that all such recoveries of principal and interest
with respect to all Secured Obligations owed to each Lender shall be pro rata on
the basis of its respective amount of the Secured Obligations owed to all
Lenders, PROVIDED that if all or part of such proportionately greater payment
received by such purchasing Lender is thereafter recovered by or on behalf of
the Borrower from such Lender, such purchase shall be rescinded and the purchase
price paid for such participation shall be returned to such Lender to the extent
of such recovery, together with interest thereon at the rate, if any, required
to be paid on the amount recovered from such purchasing Lender.
(b) Each Lender which receives such a secured claim shall, to the
extent practicable, exercise its rights in respect of such secured claim in a
manner consistent with the rights of the Lenders entitled under this SECTION
15.22 to share in the benefits of any recovery on such secured claim.
(c) Each Lender shall include in any arrangement or agreement it
enters into with any participant in such Lender's interests hereunder, an
undertaking by such participant substantially similar to the foregoing
SUBSECTIONS (a) and (b).
(d) The Borrowers expressly consent to the foregoing arrangements and
agree that any holder of a participation in any Secured Obligation so purchased
or otherwise acquired of which such Borrower has received notice may exercise
any and all rights of banker's lien, set-off or counterclaim with respect to any
and all monies owing by such Borrower to such holder as fully as if such holder
were a holder of such Secured Obligation in the amount of the participation held
by such holder.
SECTION 15.23 Effect of Effectiveness of this Agreement. From and
after the Effective Date, all references in this Agreement or in any other Loan
Document (whether delivered pursuant to this Agreement or pursuant to the
Existing Loan Agreement) to this Agreement or the "Loan Agreement," and the
words "herein," "hereof" and words of like import referring to the Existing Loan
Agreement, shall mean and be references to the Existing Loan Agreement as
amended and restated in its entirety by this Agreement and all references in
this Agreement, in any other Loan Documents (whether delivered pursuant to this
Agreement or pursuant to the Existing Loan Agreement) or in any Note to a
"Revolving Credit Note," a "Note" and the words "hereof," "herein" and words of
like import referring to any Note, shall mean and be references to the Amended
and Restated Notes in the form attached to this Agreement as EXHIBIT A,
appropriately completed and duly executed and delivered by the Borrowers.
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126
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized officers in several counterparts all as of
the day and year first written above.
BORROWERS:
THE ▇.▇. ▇▇▇▇▇▇▇ COMPANY, INC.
[CORPORATE SEAL]
Attest: By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Chief Executive Officer and President
------------------------------
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Secretary
▇▇▇▇▇▇ & WINSTON, INC.
[CORPORATE SEAL]
Attest: By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Chairman and Chief Executive Officer
------------------------------
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Secretary
By: /s/ ▇▇▇▇▇▇ ▇. ROOF
-------------------------------------
Name:
--------------------------------
Title:
-------------------------------
ITCO LOGISTICS CORPORATION
[CORPORATE SEAL]
Attest: By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name:
--------------------------------
/s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Title:
------------------------------- -------------------------------
Secretary
127
THE SPEED MERCHANT, INC.
[CORPORATE SEAL]
Attest: By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name:
--------------------------------
/s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Title:
-------------------------------- -------------------------------
Secretary
By: /s/ ▇▇▇▇▇▇ ▇. ROOF
-------------------------------------
Name:
--------------------------------
Title:
-------------------------------
128
AGENT:
BANKBOSTON, N.A.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Managing Director
129
CO-AGENTS AND LENDERS:
FLEET CAPITAL CORPORATION, as
Co-Agent and as a Lender
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name:
--------------------------------
Title: V.P.
-------------------------------
Address: Fleet Capital Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Loan Officer
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
130
FIRST UNION NATIONAL BANK, as Co-Agent
and as a Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Address: First Union National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn:
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
131
BANKBOSTON, N.A., as a Lender
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Managing Director
Address: BankBoston, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
