EXHIBIT 10.1
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CREDIT AGREEMENT
Dated as of October 28, 1998
among
HI-RISE RECYCLING SYSTEMS, INC.,
IDC ACQUISITION SUB, INC., ▇▇▇▇▇▇▇▇▇ COMPANY, INC., RECYCLTECH
ENTERPRISES INC., HESCO SALES, INC., UNITED TRUCK AND BODY
CORPORATION, HESCO EXPORT CORPORATION, BPI ACQUISITION CORP. and DII
ACQUISITION CORP.
as Borrowers,
THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME,
as Lenders,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and Lender
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INDEX OF APPENDICES
Schedule 1.1 - Responsible Individual
Schedule 1.4 - Sources and Uses; Funds Flow Memorandum
Schedule 2.5 - Conditions Subsequent
Schedule 3.2 - Executive Offices; FEIN
Schedule 3.4(A) - Financial Statements
Schedule 3.4(B) - Pro Forma
Schedule 3.4(C) - Projections
Schedule 3.4(D) - Fair Salable Balance Sheet
Schedule 3.6 - Real Estate and Leases
Schedule 3.7 - Labor Matters
Schedule 3.8 - Ventures, Subsidiaries and Affiliates; Outstanding Stock
Schedule 3.11 - Tax Matters
Schedule 3.12 - ERISA Plans
Schedule 3.13 - Litigation
Schedule 3.15 - Intellectual Property
Schedule 3.17 - Hazardous Materials
Schedule 3.18 - Insurance
Schedule 3.19 - Deposit and Disbursement Accounts
Schedule 3.20 - Government Contracts
Schedule 3.22 - Material Agreements
Schedule 5.1 - Trade Names
Schedule 6.3 - Indebtedness
Schedule 6.4(a) - Transactions with Affiliates
Schedule 6.4(c) - Compensation Levels
Schedule 6.7 - Existing Liens
Annex A (Recitals) - Definitions
Annex B (Section 1.2) - Letters of Credit
Annex C (Section 1.9) - Cash Management System
Annex D (Section 2.1(a)) - Schedule of Additional Closing Documents
Annex E (Section 4.1(a)) - Financial Statements and Projections - Reporting
Annex F (Section 4.1(b)) - Collateral Reports
Annex G (Section 6.10) - Financial Covenants
Annex H (Section 9.9(a)) - Lenders' Wire Transfer Information
Annex I (Section 11.10) - Notice Addresses
Annex J (from Annex A -
Commitments definition) Commitments as of Closing Date
INDEX OF EXHIBITS
Exhibit 1.1(a)(i) - Form of Notice of Revolving Credit Advance
(Revolver A)
Exhibit 1.1(a)(ii) - Form of Revolving Note (Revolver A)
Exhibit 1.1(b)(i) - Form of Notice of Revolving Credit Advance
(Revolver B)
Exhibit 1.1(b)(ii) - Form of Revolving Note (Revolver B)
Exhibit 1.1(c)(i) - Form of Notice of Term Loan A Advance
Exhibit 1.1(c)(ii) - Form of Term Note (Term Loan A)
Exhibit 1.1(d) - Form of Term Note (Term Loan B)
Exhibit 1.1(e)(i) - Form of Notice of Acquisition Loan Advance
Exhibit 1.1(e)(ii) - Form of Acquisition Loan Note
Exhibit 1.1(f)(ii)(A) - Form of Swing Line Note (Revolver A)
Exhibit 1.1(f)(ii)(B) - Form of Swing Line Note (Revolver B)
Exhibit 4.1(b) - Form of Borrowing Base Certificate
Exhibit 9.1(a) - Form of Assignment Agreement
Exhibit A - Form of Security Agreement
Exhibit B - Form of Pledge Agreement (Hi-Rise)
Exhibit B (Subsidiary) - Form of Pledge Agreement (Hesco Sales)
Exhibit C-1 - Form of Subsidiary Guaranty
Exhibit C-2 - Form of Subsidiary Security Agreement
Exhibit D-1 - Form of Lockbox Account Agreement
Exhibit D-2 - Form of Blocked Account Agreement
Exhibit D-3 - Form of Concentration Account Agreement
Exhibit D-4 - Form of Pledged Account Agreement
Exhibit E - Form of Assignment of Representations,
Warranties, Covenants, Indemnities
Exhibit F - Form of Landlord's Waiver and Consent
Exhibit G-1 - Form of Trademark Security Agreement
Exhibit G-2 - Form of Patent Security Agreement
Exhibit H - Form of Opinion of Borrowers' Counsel
CREDIT AGREEMENT, dated as of October 28, 1998, among HI-RISE
RECYCLING SYSTEMS, INC., a Florida corporation ("HI-RISE"), IDC ACQUISITION SUB,
INC., a New York corporation ("IDC"), ▇▇▇▇▇▇▇▇▇ COMPANY, INC., an Ohio
corporation ("▇▇▇▇▇▇▇▇▇"), RECYCLTECH ENTERPRISES INC., an Ontario corporation
("Recycltech"), HESCO SALES, INC., a Florida corporation ("Hesco"), UNITED TRUCK
AND BODY CORPORATION, a Florida corporation ("United Truck"), HESCO EXPORT
CORPORATION, a Florida corporation ("Hesco Export"), BPI ACQUISITION CORP., a
South Carolina corporation ("Bes-Pac Acquisition Corp."), and DII ACQUISITION
CORP., a Connecticut corporation ("▇▇▇▇▇▇ Acquisition Corp.") (Hi-Rise, IDC,
▇▇▇▇▇▇▇▇▇, Recycltech, Hesco, United Truck, Hesco Export, Bes-Pac Acquisition
Corp. and ▇▇▇▇▇▇ Acquisition Corp. are sometimes collectively referred to herein
as the "BORROWERS" and individually as a "BORROWER"); GENERAL ELECTRIC CAPITAL
CORPORATION, a New York corporation (in its individual capacity, "GE CAPITAL"),
NATIONSBANK, N.A., a national banking association (in its individual capacity,
"NATIONSBANK"), KEY CORPORATE CAPITAL INC. (in its individual capacity, "KCCI"),
the other Lenders signatory hereto from time to time, GENERAL ELECTRIC CAPITAL
CORPORATION, as Administrative Agent for the Lenders ("ADMINISTRATIVE AGENT"),
and NATIONSBANK, N.A., as Revolver Agent for the Lenders ("REVOLVER AGENT" and,
together with Administrative Agent, "AGENTS").
RECITALS
WHEREAS, Borrowers desire that Lenders extend revolving and
term credit facilities to Borrowers of up to Forty Million and No/100 Dollars
($40,000,000.00) in the aggregate for the purpose of funding certain
Acquisitions and refinancing certain indebtedness of Borrowers and (a) to
provide working capital financing for Borrowers and (b) to finance capital
expenditures of Borrowers; and for these purposes, Lenders are willing to make
certain loans and other extensions of credit to Borrowers of up to such amount
upon the terms and conditions set forth herein; and
WHEREAS, Borrowers desire to secure all of their obligations
under the Loan Documents by granting to Administrative Agent, for the benefit of
Agents and Lenders, a security interest in and lien upon all of their existing
and after-acquired personal and real property; and
WHEREAS, capitalized terms used in this Agreement shall have
the meanings ascribed to them in ANNEX A. All Annexes, Disclosure Schedules,
Exhibits and other attachments (collectively, "APPENDICES") hereto, or expressly
identified to this Agreement, are incorporated herein by reference, and taken
together, shall constitute but a single agreement. These Recitals shall be
construed as part of the Agreement.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter contained, and for other good and valuable
consideration, the parties hereto agree as follows:
1. AMOUNT AND TERMS OF CREDIT
1.1 CREDIT FACILITIES
(a) REVOLVING CREDIT FACILITY (REVOLVER A).
(i) Subject to the terms and conditions hereof, each
Revolving Lender agrees to make available from time to time until the Commitment
Termination Date (Revolver A) its Pro Rata Share of advances (each, a "REVOLVING
CREDIT ADVANCE (REVOLVER A)"). The Pro Rata Share of the Revolving Loan
(Revolver A) of any Revolving Lender shall not at any time exceed its separate
Revolving Loan Commitment (Revolver A). The obligations of each Revolving Lender
hereunder shall be several and not joint. The aggregate amount of Revolving
Credit Advances (Revolver A) outstanding shall not exceed at any time the lesser
of (A) the Maximum Amount (Revolver A) and (B) the Borrowing Base (Revolver A),
in each case less the sum of the Letter of Credit Obligations and the Swing Line
Loan (Revolver A) outstanding at such time ("BORROWING AVAILABILITY (REVOLVER
A)"). Until the Commitment Termination Date (Revolver A), Borrowers may from
time to time borrow, repay and reborrow under this SECTION 1.1(A). Each
Revolving Credit Advance (Revolver A) shall be made on notice by Borrower
Representative on behalf of the Borrowers to the representative of Revolver
Agent identified on SCHEDULE 1.1 at the address specified thereon. Those notices
must be given no later than 11:00 a.m. (New York time) on the Business Day of
the proposed Revolving Credit Advance (Revolver A). Each such notice (a "NOTICE
OF REVOLVING CREDIT ADVANCE (REVOLVER A)") must be given in writing (by telecopy
or overnight courier) substantially in the form of EXHIBIT 1.1(A)(I), and shall
include the information required in such Exhibit and such other information as
may be required by Revolver Agent.
(ii) Borrowers shall execute and deliver to each
Revolving Lender a note to evidence the Revolving Loan Commitment (Revolver A)
of that Revolving Lender. Each note shall be in the principal amount of the
Revolving Loan Commitment (Revolver A) of the applicable Revolving Lender, dated
the Closing Date and substantially in the form of EXHIBIT 1.1(A)(II) (each a
"REVOLVING NOTE (REVOLVER A)" and, collectively, the "REVOLVING NOTES (REVOLVER
A)"). Each Revolving Note (Revolver A) shall represent the obligation of
Borrowers to pay the amount of each Revolving Lender's Revolving Loan Commitment
(Revolver A) or, if less, the applicable Revolving Lender's Pro Rata Share of
the aggregate unpaid principal amount of all Revolving Credit Advances (Revolver
A) to Borrowers together with interest thereon as prescribed in SECTION 1.5. The
entire unpaid balance of the aggregate Revolving Loan (Revolver A) and all other
non-contingent Obligations shall be immediately due and payable in full in
immediately available funds on the Commitment Termination Date (Revolver A).
(b) REVOLVING CREDIT FACILITY (REVOLVER B).
(i) Subject to the terms and conditions hereof, each
Revolving Lender agrees to make available from time to time until the Commitment
Termination Date (Revolver B) its Pro Rata Share of advances (each, a "REVOLVING
CREDIT ADVANCE (REVOLVER B)"). The Pro Rata Share of the Revolving Loan
(Revolver B) of any Revolving Lender shall not at any time exceed its separate
Revolving Loan Commitment (Revolver B). The obligations of each Revolving Lender
hereunder shall be several and not joint. The aggregate amount of Revolving
Credit Advances (Revolver B) outstanding shall not exceed at any time the lesser
of (A) the Maximum Amount (Revolver B) and (B) the Borrowing Base (Revolver B),
in each case less the Swing Line Loan (Revolver B) outstanding at such time
("BORROWING AVAILABILITY (REVOLVER B)"). Until the Commitment Termination Date
(Revolver B), Borrowers may from time to time borrow, repay and reborrow under
this SECTION 1.1(B). Each Revolving Credit Advance (Revolver B) shall be made on
notice by Borrower Representative on behalf of Borrowers to the representative
of Revolver Agent identified on SCHEDULE 1.1 at the address specified thereon.
Those notices must be given no later than 11:00 a.m. (New York time) on the
Business Day of the proposed Revolving Credit Advance (Revolver B). Each such
notice (a "NOTICE OF REVOLVING CREDIT ADVANCE (REVOLVER B)") must be given in
writing (by telecopy or overnight courier) substantially in the form of EXHIBIT
1.1(B)(I), and shall include the information required in such Exhibit and such
other information as may be required by Revolver Agent.
(ii) Borrowers shall execute and deliver to each
Revolving Lender note to evidence the Revolving Loan Commitment (Revolver B) of
that Revolving Lender. Each note shall be in the principal amount of the
Revolving Loan Commitment (Revolver B) of the applicable Revolving Lender, dated
the Closing Date and substantially in the form of EXHIBIT 1.1(B)(II) (each a
"REVOLVING NOTE (REVOLVER B)" and, collectively, the "REVOLVING NOTES (REVOLVER
B)"). Each Revolving Note (Revolver B) shall represent the obligation of
Borrowers to pay the amount of each Revolving Lender's Revolving Loan Commitment
(Revolver B) or, if less, the applicable Revolving Lender's Pro Rata Share of
the aggregate unpaid principal amount of all Revolving Credit Advances (Revolver
B) to Borrowers together with interest thereon as prescribed in SECTION 1.5. The
entire unpaid balance of the aggregate Revolving Loan (Revolver B) and all other
non-contingent Obligations shall be immediately due and payable in full in
immediately available funds on the Commitment Termination Date (Revolver B).
(c) TERM LOAN A.
(i) Subject to the terms and conditions hereof, each
Term Lender (Term Loan A) agrees to make a term loan on the ▇▇▇▇▇▇ Acquisition
Closing Date (provided that the ▇▇▇▇▇▇ Acquisition Closing Date shall occur
prior to the date which is nine (9) months following the Closing Date) to
Borrowers in the original principal amount equal to its Term Loan Commitment
(Term Loan A) (the "TERM LOAN A"). The obligations of each Term Lender (Term
Loan A) hereunder shall be several and not joint. Until the Commitment
Termination Date (Term Loan A), Borrowers may borrow under this SECTION 1.1(C);
PROVIDED, THAT such borrowing shall be limited to a single advance to be made no
sooner than the ▇▇▇▇▇▇ Acquisition Closing
Date and monies borrowed pursuant to this SECTION 1.1(C), once repaid, may not
be reborrowed. The Term Loan A shall be made on notice by Borrower
Representative on behalf of Borrowers to the representative of Administrative
Agent identified on SCHEDULE 1.1 at the address specified thereon. Such notice
must be given no later than 11:00 a.m. (New York time) on the date which is five
(5) Business Days prior to the proposed funding date of Term Loan A. Such notice
(A "NOTICE OF TERM LOAN A ADVANCE") must be given in writing (by telecopy or
overnight courier) substantially in the form of EXHIBIT 1.1(C)(I), and shall
include the information required in such Exhibit and such other information as
may be required by Administrative Agent. The Administrative Agent shall provide
prompt notice thereof to the Revolver Agent and the Lenders.
(ii) The Term Loan A shall be evidenced by promissory
notes substantially in the form of EXHIBIT 1.1(C)(II) (each a "TERM NOTE (TERM
LOAN A)" and collectively the "TERM NOTES (TERM LOAN A)"), and Borrowers shall
execute and deliver a Term Note (Term Loan A) to each Term Lender (Term Loan A).
Each Term Note (Term Loan A) shall represent the obligation of Borrowers to pay
the amount of the applicable Term Lender's (Term Loan A) Term Loan Commitment
(Term Loan A) to Borrowers, together with interest thereon as prescribed in
SECTION 1.5.
(iii) Borrowers shall pay the principal amount of the
Term Loan A in equal consecutive quarterly installments determined by reference
to the number of full quarters occurring during the period from the date which
is six (6) months following the date of funding of the Term Loan A to the date
which sixty (60) months following the Closing Date (the "TERM LOAN A FINAL
MATURITY DATE") as follows: in equal consecutive quarterly installments of
principal equal to the original principal amount of the Term Loan A divided by
the number of full quarters occurring during the period from the date which is
six (6) months following the date of funding of the Term Loan A to the Term Loan
A Final Maturity Date, commencing on the first day of the sixth (6th) month
following the date of funding of the Term Loan A and continuing quarterly on the
first day of each third (3rd) month thereafter, together with a final
installment equal to the entire unpaid principal balance of the Term Loan A due
and payable on the Term Loan A Final Maturity Date.
(iv) Notwithstanding the foregoing CLAUSE (III), the
aggregate outstanding principal balance of the Term Loan A shall be due and
payable in full in immediately available funds on the Commitment Termination
Date (Revolver A), Commitment Termination Date (Revolver B) or the Commitment
Termination Date (Term Loan A), whichever shall first occur, if not sooner paid
in full.
(v) Each payment of principal with respect to the
Term Loan A shall be paid to Revolver Agent for the ratable benefit of each Term
Lender (Term Loan A), ratably in proportion to each such Term Lender's (Term
Loan A) respective Term Loan Commitment (Term Loan A).
(d) TERM LOAN B.
(i) Subject to the terms and conditions hereof, each
Term Lender (Term Loan B) agrees to make a term loan on the Closing Date to
Borrowers in the original principal amount of its Term Loan Commitment (Term
Loan B) (the "TERM LOAN (TERM LOAN B"). The obligations of each Term Lender
(Term Loan B) hereunder shall be several and not joint. Such Term Loan shall be
evidenced by promissory notes substantially in the form of EXHIBIT 1.1(D) (each
a "TERM NOTE (TERM LOAN B)" and collectively the "TERM NOTES (TERM LOAN B)"),
and Borrowers shall execute and deliver a Term Note (Term Loan B) to each Term
Lender (Term Loan B). Each Term Note (Term Loan B) shall represent the
obligation of Borrowers to pay the amount of the applicable Term Lender's (Term
Loan B) Term Loan Commitment (Term Loan B) to Borrowers, together with interest
thereon as prescribed in SECTION 1.5.
(ii) Borrowers shall pay the principal amount of the
Term Loan B in three (3) consecutive quarterly installments as follows: in two
(2) equal installments of principal in the amount of $1,500,000.00 each, on the
first day of the fifty-fourth (54th) and fifty-seventh (57th) month following
the Closing Date, together with a final installment equal to the entire unpaid
principal balance of the Term Loan B due and payable on the date which is sixty
(60) months following the Closing Date.
(iii) Notwithstanding the foregoing CLAUSE (II), the
aggregate outstanding principal balance of the Term Loan B shall be due and
payable in full in immediately available funds on the Commitment Termination
Date (Revolver A), the Commitment Termination Date (Revolver B) or the
Commitment Termination Date (Term Loan A), whichever shall first occur, if not
sooner paid in full.
(iv) Each payment of principal with respect to the
Term Loan B shall be paid to Revolver Agent for the ratable benefit of each Term
Lender, ratably in proportion to each such Term Lender's (Term Loan B)
respective Term Loan Commitment (Term Loan B).
(e) ACQUISITION FACILITY.
(i) Subject to the terms and conditions hereof, each
Acquisition Lender agrees to make available from time to time until the
Commitment Termination Date (Acquisition Loan) its Pro Rata Share of advances
(each, an "ACQUISITION LOAN ADVANCE"). The Pro Rata Share of the Acquisition
Loan of any Acquisition Lender shall not at any time exceed its separate
Acquisition Loan Commitment. The obligations of each Acquisition Lender
hereunder shall be several and not joint. The aggregate amount of Acquisition
Loan Advances outstanding shall not exceed at any time the Maximum Amount
(Acquisition Loan). Until the Commitment Termination Date (Acquisition Loan),
Borrowers may from time to time borrow under this SECTION 1.1(E); PROVIDED THAT,
monies borrowed pursuant to this SECTION 1.1(E), once
repaid, may not be reborrowed. Each Acquisition Loan Advance shall be made on
notice by Borrower Representative on behalf of Borrowers to the representative
of Administrative Agent identified on SCHEDULE 1.1 at the address specified
thereon. Those notices must be given no later than 11:00 a.m. (New York time) on
the date which is five (5) Business Days prior to the proposed Acquisition Loan
Advance. Each such notice (a "NOTICE OF ACQUISITION LOAN ADVANCE") must be given
in writing (by telecopy or overnight courier) substantially in the form of
EXHIBIT 1.1(E)(I), and shall include the information required in such Exhibit
and such other information as may be required by Administrative Agent. The
Administrative Agent shall provide prompt notice thereof to the Revolver Agent
and the Lenders.
(ii) Borrowers shall execute and deliver to each
Acquisition Lender a note to evidence the Acquisition Loan Commitment of that
Acquisition Lender. Each note shall be in the principal amount of the
Acquisition Loan Commitment of the applicable Acquisition Lender, dated the
Closing Date and substantially in the form of EXHIBIT 1.1(E)(II) (each an
"ACQUISITION LOAN NOTE" and, collectively, the "ACQUISITION LOAN NOTES"). Each
Acquisition Loan Note shall represent the obligation of Borrowers to pay the
amount of each Acquisition Lender's Acquisition Loan Commitment or, if less, the
applicable Acquisition Lender's Pro Rata Share of the aggregate unpaid principal
amount of all Acquisition Loan Advances to Borrowers together with interest
thereon as prescribed in SECTION 1.5
(iii) Borrowers shall pay the principal amount of the
each Acquisition Loan in equal consecutive quarterly installments determined by
reference to the number of full quarters occurring during the period from the
date which is twelve (12) months following the date of funding of such
Acquisition Loan to the earlier of the date which is five (5) years following
the date of such Acquisition Loan or the date which is two (2) years following
the Term Loan A Final Maturity Date (the "APPLICABLE ACQUISITION LOAN MATURITY
DATE") as follows: in equal consecutive quarterly installments of principal
equal to the original principal amount of such Acquisition Loan divided by the
number of full quarters occurring during the period from the date which is
twelve (12) months following the date of funding of such Acquisition Loan to the
Applicable Acquisition Loan Maturity Date, commencing on the first day of the
twelfth (12th) month following the date of funding of such Acquisition Loan and
continuing quarterly on the first day of each third (3rd) month thereafter,
together with a final installment equal to the entire unpaid principal balance
of such Acquisition Loan due and payable on the Applicable Acquisition Loan
Maturity Date.
(iv) Notwithstanding the foregoing CLAUSE (III), the
aggregate outstanding principal balance of each Acquisition Loan shall be due
and payable in full in immediately available funds, if not sooner paid in full,
on the Commitment Termination Date (Acquisition Loan), the Commitment
Termination Date (Revolver A), the Commitment Termination Date (Revolver B), or
the Commitment Termination Date (Term Loan A), whichever shall first occur, if
any such date shall occur prior to the express date of expiration of the
applicable Commitment in each of the definitions of "Commitment Termination Date
(Acquisition Loan)," "Commitment Termination Date (Revolver A)," "Commitment
Termination Date (Revolver B)" and "Commitment Termination Date (Term Loan A)."
(f) SWING LINE FACILITIES.
(i) Revolver Agent shall notify the Swing Line Lender
upon Revolver Agent's receipt of any Notice of Revolving Credit Advance
(Revolver A) or any Notice of Revolving Credit Advance (Revolver B). Subject to
the terms and conditions hereof, the Swing Line Lender may, in its discretion,
make available from time to time until the Commitment Termination Date (Revolver
A) or Commitment Termination Date (Revolver B), as the case may be, advances
(each, a "SWING LINE ADVANCE (REVOLVER A)" or "SWING LINE ADVANCE (REVOLVER B)",
as the case may be) in accordance with any such notice. The aggregate amount of
Swing Line Advances (Revolver A) outstanding shall not exceed the lesser of (A)
the Swing Line Commitment (Revolver A) and (B) the lesser of (x) the Maximum
Amount (Revolver A) and (y) the Borrowing Base (Revolver A), in each case, less
the outstanding balance of the Revolving Loan (Revolver A) and Letter of Credit
Obligations at such time ("SWING LINE AVAILABILITY (REVOLVER A)"). The aggregate
amount of Swing Line Advances (Revolver B) outstanding shall not exceed the
lesser of (A) the Swing Line Commitment (Revolver B) and (B) the lesser of the
Maximum Amount (Revolver B) and the Borrowing Base (Revolver B), in each case,
less the outstanding balance of the Revolving Loan (Revolver B) at such time
("SWING LINE AVAILABILITY (REVOLVER B)"). Until the Commitment Termination Date
(Revolver A) and the Commitment Termination Date (Revolver B), as the case may
be, Borrowers may from time to time borrow, repay and reborrow under this
SECTION 1.1(F). Each Swing Line Advance (Revolver A) shall be made pursuant to a
Notice of Revolving Credit Advance (Revolver A) delivered to Revolver Agent by
Borrower Representative on behalf of Borrowers in accordance with SECTION
1.1(A). Each Swing Line Advance (Revolver B) shall be made pursuant to a Notice
of Revolving Credit Advance (Revolver B) delivered to Revolver Agent by Borrower
Representative on behalf of Borrowers in accordance with SECTION 1.1(B). Those
notices must be given no later than 11:00 a.m. (New York time) on the Business
Day of the proposed Swing Line Advance (Revolver A) or Swing Line Advance
(Revolver B), as the case may be. Borrowers shall repay the aggregate
outstanding principal amount of the Swing Line Loan (Revolver A) and the Swing
Line Loan (Revolver B), as the case may be, upon demand therefor by
Administrative Agent.
(ii) Borrowers shall execute and deliver to the Swing
Line Lender a promissory note to evidence each of the Swing Line Commitment
(Revolver A) and the Swing Line Commitment (Revolver B), as the case may be.
Each note evidencing Swing Line Loans (Revolver A) shall be in the principal
amount of the Swing Line Commitment (Revolver A) of the Swing Line Lender, dated
the Closing Date and substantially in the form of EXHIBIT 1.1(f)(ii)(A) (each a
"SWING LINE NOTE (REVOLVER A)" and, collectively, the "SWING LINE NOTES
(REVOLVER A)"). Each note evidencing Swing Line Loans (Revolver B) shall be in
the principal amount of the Swing Line Commitment (Revolver B) of the Swing Line
Lender, dated the Closing Date and substantially in the form of EXHIBIT
1.1(F)(II)(B) (each a "SWING LINE NOTE
(REVOLVER B)" and, collectively, the "SWING LINE NOTES (REVOLVER B)"). Each
Swing Line Note (Revolver A) and each Swing Line Note (Revolver B) shall
represent the obligation of Borrowers to pay the amount of the Swing Line
Commitment (Revolver A) or Swing Line Commitment (Revolver B), as the case may
be, or, if less, the aggregate unpaid principal amount of all Swing Line
Advances (Revolver A) or Swing Line Advances (Revolver B), as the case may be,
made to Borrowers together with interest thereon as prescribed in SECTION 1.5.
The entire unpaid balance of the Swing Line Loan (Revolver A) shall be
immediately due and payable in full in immediately available funds on the
Commitment Termination Date (Revolver A) if not sooner paid in full. The entire
unpaid balance of the Swing Line Loan (Revolver B) shall be immediately due and
payable in full in immediately available funds on the Commitment Termination
Date (Revolver B) if not sooner paid in full.
(iii) REFUNDING OF SWING LINE LOANS. The Swing Line
Lender may, at any time and from time to time in its sole and absolute
discretion, but not less frequently than weekly, on behalf of Borrowers (and
each Borrower hereby irrevocably authorizes the Swing Line Lender to so act on
its behalf) request each Revolving Lender (including the Swing Line Lender) to
make a Revolving Credit Advance (Revolver A) or Revolving Credit Advance
(Revolver B) to Borrowers in an amount equal to such Revolving Lender's Pro Rata
Share of the principal amount of the Swing Line Loan (Revolver A) or Swing Line
Loan (Revolver B), as the case may be (the "REFUNDED SWING LINE LOAN")
outstanding on the date such notice is given. Unless any of the events described
in SECTIONS 8.1(H) OR 8.1(I) shall have occurred (in which event the procedures
of SECTION 1.1(F)(IV) shall apply) and regardless of whether the conditions
precedent set forth in this Agreement to the making of such Revolving Credit
Advance (Revolver A) or Revolving Credit Advance (Revolver B), as the case may
be, are then satisfied, each Revolving Lender shall disburse directly to
Revolver Agent its Pro Rata Share of such Revolving Credit Advance (Revolver A)
or Revolving Credit Advance (Revolver B), as the case may be, on behalf of the
Swing Line Lender, prior to 3:00 p.m. (New York time), in immediately available
funds on the Business Day next succeeding the date such notice is given. The
proceeds of such Revolving Credit Advances (Revolver A) or Revolving Credit
Advances (Revolver B), as the case may be, shall be immediately paid to the
Swing Line Lender and applied to repay the applicable Refunded Swing Line Loan
of the Borrowers.
(iv) PARTICIPATION IN SWING LINE LOANS. If, prior to
refunding a Swing Line Loan with a Revolving Credit Advance pursuant to SECTION
1.1(F)(III), one of the events described in SECTIONS 8.1(H) OR 8.1(I) shall have
occurred, then, subject to the provisions of SECTION 1.1(F)(V) below, each
Revolving Lender will, on the date such Revolving Credit Advance was to have
been made for the benefit of Borrowers, purchase from the Swing Line Lender an
undivided participation interest in the applicable Swing Line Loan to Borrowers
in an amount equal to its Pro Rata Share of such Swing Line Loan. Upon request,
each Revolving Lender will promptly transfer to the Swing Line Lender, in
immediately available funds, the amount of its participation.
(v) REVOLVING LENDERS' OBLIGATIONS UNCONDITIONAL.
Each Revolving Lender's obligation to make Revolving Credit Advances in
accordance with SECTION 1.1(F)(III) and to purchase participating interests in
accordance with SECTION 1.1(F)(IV) shall be absolute and unconditional and shall
not be affected by any circumstance, including (A) any setoff, counterclaim,
recoupment, defense or other right which such Revolving Lender may have against
the Swing Line Lender, any Borrower or any other Person for any reason
whatsoever; (B) the occurrence or continuance of any Default or Event of
Default; (C) any inability of any Borrower to satisfy the conditions precedent
to borrowing set forth in this Agreement on the date upon which such
participating interest is to be purchased or (D) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.
If any Revolving Lender does not make available to Revolver Agent or the Swing
Line Lender, as applicable, the amount required pursuant to SECTION 1.1(F)(III)
or 1.1(F)(IV), as the case may be, the Swing Line Lender shall be entitled to
recover such amount on demand from such Revolving Lender, together with interest
thereon for each day from the date of non-payment until such amount is paid in
full at the Federal Funds Rate for the first two Business Days and at the Index
Rate thereafter.
(g) RELIANCE ON NOTICES; APPOINTMENT OF BORROWER
REPRESENTATIVE. Each Agent shall be entitled to rely upon, and shall be fully
protected in relying upon, any Notice of Revolving Credit Advance (Revolver A),
Notice of Revolving Credit Advance (Revolver B), Notice of Term Loan A Advance,
Notice of Acquisition Loan Advance or similar notice believed by each such Agent
to be genuine. Each Agent may assume that each Person executing and delivering
such a notice was duly authorized, unless the responsible individual acting
thereon for such Agent has actual knowledge to the contrary. Each Borrower
hereby designates Hi-Rise Recycling Systems, Inc. as its representative and
agent on its behalf for the purposes of issuing Notices of Revolving Credit
Advances (Revolver A), Notices of Revolving Credit Advances (Revolver B),
Notices of Term Loan A Advances and Notices of Acquisition Loan Advances, giving
instructions with respect to the disbursement of the proceeds of the Loans,
selecting interest rate options, requesting Letters of Credit, giving and
receiving all other notices and consents hereunder or under any of the other
Loan Documents and taking all other actions (including in respect of compliance
with covenants) on behalf of any Borrower or Borrowers under the Loan Documents.
Borrower Representative hereby accepts such appointment. Each Agent and each
Lender may regard any notice or other communication pursuant to any Loan
Document from Borrower Representative as a notice or communication from all
Borrowers, and may give any notice or communication required or permitted to be
given to any Borrower or Borrowers hereunder to Borrower Representative on
behalf of such Borrower or Borrowers. Each Borrower agrees that each notice,
election, representation and warranty, covenant, agreement and undertaking made
on its behalf by Borrower Representative shall be deemed for all purposes to
have been made by such Borrower and shall be binding upon and enforceable
against such Borrower to the same extent as if the same had been made directly
by such Borrower.
(h) Without limiting the generality of the provisions of
SECTION 9.9(D), the failure of any Lender to make an Advance or to fund its Pro
Rata Share of Term Loan A or Term Loan B under this Agreement shall not relieve
any other Lender of its obligations, if any, to make its Advance or to fund its
Pro Rata Share of Term Loan or Term Loan B, as the case may be, on the date of
the applicable borrowing, but no Lender shall be responsible for such failure by
another Lender.
1.2 LETTERS OF CREDIT. Subject to and in accordance with the
terms and conditions contained herein and in ANNEX B, Borrower Representative,
on behalf of Borrowers, shall have the right to request, and Revolving Lenders
agree to incur, or purchase participations in, Letter of Credit Obligations in
respect of Borrowers.
1.3 PREPAYMENTS
(a) VOLUNTARY PREPAYMENTS. Borrowers may at any time on at
least five (5) days' prior written notice by Borrower Representative to
Administrative Agent and Revolver Agent (i) voluntarily prepay all or part of
the Term Loan A and/or Term Loan B, and/or (ii) in addition to payments made
pursuant to the provisions of ANNEX C, voluntarily prepay all or part of the
Revolving Loan (Revolver A), Revolving Loan (Revolver B) and/or Acquisition
Loan; PROVIDED that any such prepayments shall be in a minimum amount (A) of
$500,000 and integral multiples of $250,000 in excess of such amount, or (B) to
the extent that the then outstanding principal balance of the applicable Loan is
less than $500,000, equal to the then outstanding principal balance of such
Loan. In addition, Borrowers may at any time on at least ten (10) days' prior
written notice by Borrower Representative to Administrative Agent and Revolver
Agent terminate (in whole, but not in part) the Revolving Loan Commitment
(Revolver A), the Revolving Loan Commitment (Revolver B), the Term Loan A
Commitment and/or the Acquisition Loan Commitment; provided that upon such
termination (other than in the case of the termination of only the Acquisition
Loan Commitment), all Loans and other Obligations shall be immediately due and
payable in full. Any such voluntary prepayment and any such termination must be
accompanied by the payment of the fee required by SECTION 1.10(C), if any. Upon
any such prepayment or termination of the Revolving Loan Commitment (Revolver
A), Revolving Loan Commitment (Revolver B), Term Loan A Commitment or
Acquisition Loan Commitment, Borrowers' right to request Revolving Credit
Advances (Revolver A), Revolving Loan Advances (Revolver B), a Term Loan A
Advance or Acquisition Loan Advances, or request that Letter of Credit
Obligations be incurred on their behalf, or request Swing Line Advances
(Revolver A) or Swing Line Advances (Revolver B), shall simultaneously be
permanently terminated, as the case may be. Each notice of partial prepayment
shall designate the Loans or other Obligations to which such prepayment is to be
applied, PROVIDED that any partial prepayments of the Term Loan A, the Term Loan
B or any Acquisition Loan made by or on behalf of Borrowers shall be applied to
prepay the scheduled installments of the Term Loan A, Term Loan B or such
Acquisition Loan, as the case may be, in inverse order of maturity.
(b) Mandatory Prepayments.
(i) If at any time the outstanding balance of the
aggregate Revolving Loan (Revolver A) exceeds the lesser of (A) the Maximum
Amount (Revolver A) and (B) the Borrowing Base (Revolver A), LESS, in each case,
the aggregate outstanding Swing Line Loan (Revolver A) and Letter of Credit
Obligations at such time, Borrowers shall immediately repay the aggregate
outstanding Revolving Credit Advances (Revolver A) to the extent required to
eliminate such excess. If any such excess remains after repayment in full of the
aggregate outstanding Revolving Credit Advances (Revolver A), Borrowers shall
provide cash collateral for the Letter of Credit Obligations in the manner set
forth in ANNEX B to the extent required to eliminate such excess.
(ii) If at any time the outstanding balance of the
aggregate Revolving Loan (Revolver B) exceeds the lesser of (A) the Maximum
Amount (Revolver B) and (B) the Borrowing Base (Revolver B), LESS, in each case,
the aggregate outstanding Swing Line Loan (Revolver B) at such time, Borrowers
shall immediately repay the aggregate outstanding Revolving Credit Advances
(Revolver B) to the extent required to eliminate such excess.
(iii) If at any time the outstanding balance of the
aggregate Acquisition Loan exceeds the Maximum Amount (Acquisition Loan),
Borrowers shall immediately repay the aggregate outstanding Acquisition Loan
Advances to the extent required to eliminate such excess.
(iv) Immediately upon receipt by any Credit Party of
proceeds of any asset disposition (including condemnation proceeds, but
excluding proceeds of asset dispositions permitted by SECTION 6.8 (A)) or any
sale of Stock of any Subsidiary of any Credit Party, Borrowers shall prepay the
Loans in an amount equal to all such proceeds, net of (A) commissions and other
reasonable and customary transaction costs, fees and expenses properly
attributable to such transaction and payable by Borrowers in connection
therewith (in each case, paid to non-Affiliates), (B) transfer taxes, (C)
amounts payable to holders of senior Liens (to the extent such Liens constitute
Permitted Encumbrances hereunder), if any, and (D) an appropriate reserve for
income taxes in accordance with GAAP in connection therewith. Any such
prepayment shall be applied in accordance with CLAUSE (C) below.
(v) If Hi-Rise issues Stock or any warrants, options
or other rights to acquire Stock of Hi-Rise (other than Stock of Hi-Rise and
warrants, options and other rights to acquire Stock of Hi-Rise issued to
Borrowers' employees and consultants or in connection with any Acquisition), no
later than the Business Day following the date of receipt of the proceeds
thereof, Borrowers shall prepay the Loans in an amount equal to seventy-five
percent (75%) of all such proceeds, net of underwriting discounts and
commissions and other reasonable costs paid to non-Affiliates in connection
therewith. Any such prepayment shall be applied in accordance with CLAUSE (C)
below.
(vi) Commencing with the Fiscal Year ending December
31, 1999 and until the Termination Date, Borrowers shall prepay the Obligations
on the earlier of the date which is ten (10) days after (A) the date on which
Borrowers' annual audited Financial Statements for the immediately preceding
Fiscal Year are delivered pursuant to ANNEX E or (B) the date on which such
annual audited Financial Statements were required to be delivered pursuant to
ANNEX E, in an amount equal to fifty percent (50%) of Excess Cash Flow for the
immediately preceding Fiscal Year. Each such prepayment shall be accompanied by
a certificate signed by Borrower Representative's chief financial officer
certifying the manner in which Excess Cash Flow and the resulting prepayment
were calculated, which certificate shall be in form and substance reasonably
satisfactory to Administrative Agent.
(c) APPLICATION OF CERTAIN MANDATORY PREPAYMENTS. Any
prepayments made by any Borrower pursuant to CLAUSES (B)(IV), (B)(V), or (B)(VI)
above shall be applied as FOLLOWS: FIRST, to Fees and reimbursable expenses of
Administrative Agent then due and payable pursuant to any of the Loan Documents;
SECOND, to fees and reimbursable expenses of Revolver Agent then due and payable
pursuant to any of the Loan Documents; THIRD to interest then due and payable on
Term Loan B; FOURTH, to prepay the scheduled installments of Term Loan B in
inverse order of maturity, until such Loan shall have been prepaid in full;
FIFTH, to interest then due and payable on Term Loan A; SIXTH, to prepay the
scheduled installments of Term Loan A in inverse order of maturity, until such
Loan shall have been prepaid in full; SEVENTH, to interest then due and payable
on the Acquisition Loan; EIGHTH, to the principal balance of the Acquisition
Loan Advances outstanding in the inverse order of maturity, until the same shall
have been repaid in full; NINTH, to interest then due and payable on the Swing
Line Loan (Revolver B); TENTH, to the principal balance of the Swing Line Loan
(Revolver B) outstanding until the same shall have been repaid in full;
ELEVENTH, to interest then due and payable on the Swing Line Loan (Revolver A);
TWELFTH, to the principal balance of the Swing Line Loan (Revolver A)
outstanding until the same shall have been repaid in full; THIRTEENTH, to
interest then due and payable on Revolving Credit Advances (Revolver B);
FOURTEENTH, to the principal balance of Revolving Credit Advances (Revolver B)
outstanding until the same shall have been paid in full; FIFTEENTH, to interest
then due and payable on Revolving Credit Advances (Revolver A); SIXTEENTH, to
the principal balance of Revolving Credit Advances (Revolver A) outstanding
until the same shall have been paid in full; and LAST, to any Letter of Credit
Obligations to provide cash collateral therefor in the manner set forth in ANNEX
B, until all such Letter of Credit Obligations have been fully cash
collateralized in the manner set forth in ANNEX B. None of the Revolving Loan
Commitment (Revolver A), the Revolving Loan Commitment (Revolver B), the Swing
Line Commitment (Revolver A) or the Swing Line Commitment (Revolver B) shall be
permanently reduced by the amount of any such prepayments.
(d) APPLICATION OF PREPAYMENTS FROM INSURANCE PROCEEDS.
Prepayments from insurance proceeds in accordance with SECTION 5.4(C) shall be
applied as follows: insurance proceeds from casualties or losses to cash, or
Inventory shall be applied, first, to the Swing Line
Loans (Revolver A) and, second, to the Revolving Credit Advances (Revolver A);
insurance proceeds from casualties or losses to Equipment, Fixtures and Real
Estate shall be applied to scheduled installments of the Term Loan B in inverse
order of maturity. Neither the Revolving Loan Commitment (Revolver A) nor the
Swing Line Loan Commitment (Revolver A) shall be permanently reduced by the
amount of any such prepayments. If the insurance proceeds allocable to
Inventory, Equipment, Fixtures and Real Property exceed the then outstanding
principal balance of the Swing Line Loan (Revolver A), the Revolving Credit
Advances (Revolver A) and the Term Loan B, as the case may be, then the excess
of such proceeds and all other insurance proceeds shall be applied in the manner
set forth in SECTION 1.3(C) above.
(e) Nothing in this SECTION 1.3 shall be construed to
constitute Administrative Agent's or any Lender's consent to any transaction
referred to in CLAUSES (b)(iv) and (B)(V) above which is not permitted by other
provisions of this Agreement or the other Loan Documents.
1.4 USE OF PROCEEDS. Borrowers shall utilize the proceeds of
Term Loan A solely for the ▇▇▇▇▇▇ Acquisition (and to pay related transaction
expenses). Borrowers shall utilize the proceeds of the Acquisition Loans solely
for the Acquisitions (other than the Bes-Pac Acquisition and the Acme Chute
Acquisition) (and to pay related transaction expenses) as contemplated herein.
The Borrowers shall utilize the proceeds of the Loans (other than Term Loan A or
the Acquisition Loans) solely for the Bes-Pac Acquisition, the Acme Chute
Acquisition, and, to the extent that the proceeds of Term Loan A are not
sufficient therefor, the ▇▇▇▇▇▇ Acquisition (and, in each case, to pay any
related transaction expenses), the Refinancing (and to pay any related
transaction expenses), and for the financing of Borrowers' ordinary working
capital and capital expenditure needs (but excluding in any event the making of
any Restricted Payment not specifically permitted by SECTION 6.14). DISCLOSURE
SCHEDULE (1.4) contains a description of Borrowers' sources and uses of funds as
of the Closing Date, including Loans and Letter of Credit Obligations to be made
or incurred on that date, and a funds flow memorandum detailing how funds from
each source are to be transferred to particular uses.
1.5 INTEREST AND APPLICABLE MARGINS.
(a) Borrowers shall pay interest to Revolver Agent, for the
ratable benefit of Lenders in accordance with the various Loans being made by
each Lender, in arrears on each applicable Interest Payment Date, at the
following rates: (i) with respect to the Revolving Credit Advances (Revolver A)
and Revolving Credit Advances (Revolver B), the Index Rate plus the Applicable
Revolver Index Margin per annum; (ii) with respect to the Term Loan A, the Index
Rate plus the Applicable Term Loan A Index Margin per annum; (iii) with respect
to Term Loan B, a fixed rate equal to eleven percent (11%) per annum; (iv) with
respect to the Acquisition Loan Advances, the Index Rate plus the Applicable
Acquisition Loan Index Margin per annum; and (v) with respect to the Swing Line
Loans, the Index Rate plus the Applicable Revolver Index Margin per annum.
The Applicable Revolver Index Margin will be 0.5% per annum.
The Applicable Term Loan A Index Margin will be 1.0% per annum. The Applicable
Acquisition Loan Index Margin will be 1.0% per annum. The Applicable L/C Margin
will be 2.5% per annum. The Applicable Unused Revolver Fee Margin will be 0.5%
per annum. The Applicable Unused Acquisition Line Fee Margin will be 0.375% per
annum.
(b) If any payment on any Loan becomes due and payable on a
day other than a Business Day, the maturity thereof will be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension.
(c) All computations of Fees calculated on a per annum basis
and interest shall be made by Revolver Agent on the basis of a three hundred and
sixty (360) day year, in each case for the actual number of days occurring in
the period for which such interest and Fees are payable. The Index Rate shall be
determined each day based upon the Index Rate as in effect each day. Each
determination by Revolver Agent of an interest rate and Fees hereunder shall be
conclusive, absent manifest error.
(d) So long as an Event of Default shall have occurred and be
continuing under Section 8.1(a), (h) or (i) or so long as any other Default or
Event of Default shall have occurred and be continuing and at the election of
Administrative Agent (or upon the written request of Requisite Lenders)
confirmed by written notice from Administrative Agent to Borrower
Representative, the interest rates applicable to the Loans and the Letter of
Credit Fees shall be increased by two percent (2%) per annum above the rates of
interest or the rate of such Fees otherwise applicable hereunder ("DEFAULT
RATE"), and all outstanding Obligations shall bear interest at the Default Rate
applicable to such Obligations. Interest and Letter of Credit Fees at the
Default Rate shall accrue from the initial date of such Default or Event of
Default until that Default or Event of Default is cured or waived and shall be
payable upon demand.
(e) Notwithstanding anything to the contrary set forth in this
Section 1.5, if a court of competent jurisdiction determines in a final order
that the rate of interest payable hereunder exceeds the highest rate of interest
permissible under law (the "MAXIMUM LAWFUL RATE"), then so long as the Maximum
Lawful Rate would be so exceeded, the rate of interest payable hereunder shall
be equal to the Maximum Lawful Rate; PROVIDED, HOWEVER, that if at any time
thereafter the rate of interest payable hereunder is less than the Maximum
Lawful Rate, Borrowers shall continue to pay interest hereunder at the Maximum
Lawful Rate until such time as the total interest received by Revolver Agent, on
behalf of Lenders, is equal to the total interest which would have been received
had the interest rate payable hereunder been (but for the operation of this
paragraph) the interest rate payable since the Closing Date as otherwise
provided in this Agreement. Thereafter, interest hereunder shall be paid at the
rate(s) of interest and in the manner provided in SECTIONS 1.5(A) through (D)
above, unless and until the rate of interest again exceeds the Maximum Lawful
Rate, and at that time this paragraph shall again
apply. In no event shall the total interest received by any Lender pursuant to
the terms hereof exceed the amount which such Lender could lawfully have
received had the interest due hereunder been calculated for the full term hereof
at the Maximum Lawful Rate. If the Maximum Lawful Rate is calculated pursuant to
this paragraph, such interest shall be calculated at a daily rate equal to the
Maximum Lawful Rate divided by the number of days in the year in which such
calculation is made. If, notwithstanding the provisions of this SECTION 1.5(E),
a court of competent jurisdiction shall finally determine that a Lender has
received interest hereunder in excess of the Maximum Lawful Rate, Revolver Agent
shall, to the extent permitted by applicable law, promptly apply such excess in
the order specified in SECTION 1.12 and thereafter shall refund any excess to
Borrowers or as a court of competent jurisdiction may otherwise order.
1.6 ELIGIBLE ACCOUNTS. Based on the most recent Borrowing Base
Certificate delivered by Borrower Representative to Administrative Agent and
Revolver Agent and on other information available to Administrative Agent and
Revolver Agent, Administrative Agent and Revolver Agent shall in their
reasonable credit judgment determine which Accounts of each Borrower shall be
"ELIGIBLE ACCOUNTS" for purposes of this Agreement. In determining whether a
particular Account of any Borrower constitutes an Eligible Account,
Administrative Agent and Revolver Agent shall not include any such Account to
which any of the exclusionary criteria set forth below applies. Administrative
Agent and Revolver Agent reserve the right, at any time and from time to time
after the Closing Date, to adjust any such criteria, to establish new criteria
and to adjust advance rates with respect to Eligible Accounts, in their
reasonable credit judgment, subject to the approval of Supermajority Revolving
Lenders in the case of adjustments or, new criteria or changes in advance rates
which have the effect of making more credit available. Eligible Accounts shall
not include any Account of any Borrower which is a Lease Receivable or:
(a) which does not arise from the sale of goods or the
performance of services by such Borrower in the ordinary course of its business;
(b) (i) upon which such Borrower's right to receive payment is
not absolute or is contingent upon the fulfillment of any condition whatsoever
or (ii) as to which such Borrower is not able to bring suit or otherwise enforce
its remedies against the Account Debtor through judicial process or (iii) if the
Account represents a progress billing consisting of an invoice for goods sold or
used or services rendered pursuant to a contract under which the Account
Debtor's obligation to pay that invoice is subject to such Borrower's completion
of further performance under such contract or is subject to the equitable lien
of a surety bond issuer;
(c) in the event that any defense, counterclaim, setoff or
dispute is asserted as to such Account;
(d) that is not a true and correct statement of bona fide
indebtedness incurred in the amount of the Account for merchandise sold to or
services rendered and accepted by the applicable Account Debtor;
(e) with respect to which an invoice, acceptable to
Administrative Agent and Revolver Agent in form and substance, has not been sent
to the applicable Account Debtor;
(f) that (i) is not owned by such Borrower or (ii) is subject
to any right, claim, security interest or other interest of any other Person,
other than Liens in favor of Administrative Agent, on behalf of itself, Revolver
Agent and Lenders;
(g) that arises from a sale to any director, officer, other
employee or Affiliate of any Credit Party, or to any entity which has any common
officer or director with any Credit Party;
(h) that is the obligation of an Account Debtor that is the
United States government or a political subdivision thereof, or any state or
municipality or department, agency or instrumentality thereof unless
Administrative Agent and Revolver Agent, in their sole discretion, have agreed
to the contrary in writing and such Borrower, if necessary or desirable, has
complied with the Federal Assignment of Claims Act of 1940, and any amendments
thereto, or any applicable state statute or municipal ordinance of similar
purpose and effect, with respect to such obligation;
(i) (i) that is the obligation of an Account Debtor located in
a foreign country (other than Canada, Puerto Rico or the United States Virgin
Islands), unless payment thereof is assured by a letter of credit assigned and
delivered to Administrative Agent, satisfactory to Administrative Agent and
Revolver Agent as to form, amount and issuer;
(ii) that is the obligation of an Account Debtor
located in Canada, Puerto Rico or the United States Virgin Islands, unless (x)
payment thereof is assured by a letter of credit assigned and delivered to
Administrative Agent, satisfactory to Administrative Agent and Revolver Agent as
to form, amount and issuer, or (y) Administrative Agent and Revolver Agent, in
their sole discretion, have agreed to the contrary in writing and such Borrower,
if necessary, has taken all such action as may be required by Administrative
Agent and Revolver Agent to establish and maintain in favor of Administrative
Agent for the benefit of the Lenders a first, perfected security interest in and
to such Account;
(j) to the extent such Borrower or any Subsidiary thereof is
liable for goods sold or services rendered by the applicable Account Debtor to
such Borrower or any Subsidiary thereof but only to the extent of the potential
offset;
(k) that arises with respect to goods which are delivered on a
▇▇▇▇-and-hold, cash-on-delivery basis or placed on consignment, guaranteed sale
or other terms by reason of which the payment by the Account Debtor is or may be
conditional;
(l) that is in default; PROVIDED, THAT, without limiting the
generality of the foregoing, an Account shall be deemed in default upon the
occurrence of any of the following:
(i) it is not paid within the earlier of: sixty (60)
days following its due date or ninety (90) days following its original invoice
date;
(ii) if any Account Debtor obligated upon such
Account suspends business, makes a general assignment for the benefit of
creditors or fails to pay its debts generally as they come due; or
(iii) if any petition is filed by or against any
Account Debtor obligated upon such Account under any bankruptcy law or any other
federal, state or foreign (including any provincial) receivership, insolvency
relief or other law or laws for the relief of debtors;
(m) which is the obligation of an Account Debtor if fifty
percent (50%) or more of the dollar amount of all Accounts owing by that Account
Debtor are ineligible under the other criteria set forth in this SECTION 1.6;
(n) as to which Administrative Agent's Lien thereon, on behalf
of itself, Revolver Agent and Lenders, is not a first priority perfected Lien;
(o) as to which any of the representations or warranties
pertaining to Accounts set forth in this Agreement or the Security Agreements is
untrue;
(p) to the extent such Account is evidenced by a judgment,
Instrument or Chattel Paper;
(q) to the extent such Account exceeds any credit limit
established by Administrative Agent and Revolver Agent, in their reasonable
discretion;
(r) to the extent that such Account, together with all other
Accounts owing by such Account Debtor and its Affiliates as of any date of
determination, exceed twenty percent (20%) of all Eligible Accounts;
(s) which is payable in any currency other than Dollars; or
(t) which is unacceptable to Administrative Agent or Revolver
Agent in their reasonable credit judgment.
1.7 ELIGIBLE INVENTORY. Based on the most recent Borrowing
Base Certificate delivered by Borrower Representatives to Administrative Agent
and Revolver Agent and on other information available to Administrative Agent
and Revolver Agent, Administrative Agent and Revolver Agent shall in their
reasonable credit judgment determine which Inventory of each Borrower shall be
"ELIGIBLE INVENTORY" for purposes of this Agreement. In determining whether any
particular Inventory of any Borrower constitutes Eligible Inventory,
Administrative Agent and Revolver Agent shall not include any such Inventory to
which any of the exclusionary criteria set forth below applies. Administrative
Agent and Revolver Agent reserve the right, at any time and from time to time
after the Closing Date, to adjust any such criteria, to establish new criteria
and to adjust advance rates with respect to Eligible Inventory, in their
reasonable credit judgment, subject to the approval of Supermajority Revolving
Lenders in the case of adjustments, or new criteria or changes in advance rates
which have the effect of making more credit available. Eligible Inventory shall
not include any Inventory of any Borrower that:
(a) is not owned by such Borrower free and clear of all Liens
and rights of any other Person (including the rights of a purchaser that has
made progress payments and the rights of a surety that has issued a bond to
assure such Borrower's performance with respect to that Inventory), except the
Liens in favor of Administrative Agent, on behalf of itself, Revolver Agent and
Lenders, and Permitted Encumbrances in favor of landlords and bailees to the
extent permitted in SECTION 5.9 hereof (subject to Reserves established by
Administrative Agent and Revolver Agent in accordance with SECTION 5.9 hereof);
(b) is (i) not located on premises owned or leased by such
Borrower or (ii) is stored with a bailee, warehouseman or similar Person, unless
Administrative Agent and Revolver Agent have given their prior consent thereto
and unless (x) a satisfactory bailee letter or landlord waiver has been
delivered to Administrative Agent, or (y) Reserves satisfactory to
Administrative Agent and Revolver Agent have been established with respect
thereto, or (iii) located at any site if the aggregate book value of Inventory
at any such location is less than $100,000;
(c) is placed on consignment or is in transit;
(d) is the subject of any Lease;
(e) is covered by a negotiable document of title, unless such
document has been delivered to Administrative Agent with all necessary
endorsements, free and clear of all Liens except those in favor of
Administrative Agent, on behalf of itself, Revolver Agent and Lenders;
(f) in Administrative Agent's or Revolver Agent's reasonable
determination, is excess, obsolete, unsalable, shopworn, seconds, damaged or
unfit for sale;
(g) consists of display items or packing or shipping
materials, manufacturing supplies, work-in-process Inventory or replacement
parts;
(h) consists of goods which have been returned by the buyer;
(i) is not of a type held for sale in the ordinary course of
such Borrower's business;
(j) as to which Administrative Agent's Lien, on behalf of
itself, Revolver Agent and Lenders, therein is not a first priority perfected
Lien;
(k) as to which any of the representations or warranties
pertaining to Inventory set forth in this Agreement or the Security Agreements
is untrue;
(l) consists of any costs associated with "freight-in"
charges;
(m) consists of Hazardous Materials or goods that can be
transported or sold only with licenses that are not readily available;
(n) is not covered by casualty insurance acceptable to
Administrative Agent and Revolver Agent; or
(o) is otherwise unacceptable to Administrative Agent or
Revolver Agent in their reasonable credit judgment.
1.8 ELIGIBLE LEASE RECEIVABLES. Based on the most recent
Borrowing Base Certificate delivered by Borrower Representative to
Administrative Agent and Revolver Agent and on other information available to
Administrative Agent and Revolver Agent, Administrative Agent and Revolver Agent
shall in their reasonable credit judgment determine which Lease Receivables of
each Borrower shall be "ELIGIBLE LEASE RECEIVABLES" for purposes of this
Agreement. In determining whether a particular Lease Receivable of any Borrower
constitutes an Eligible Lease Receivable, Administrative Agent and Revolver
Agent shall not include any such Lease Receivable to which any of the
exclusionary criteria set forth below applies. Administrative Agent and Revolver
Agent reserve the right, at any time and from time to time after the Closing
Date, to adjust any such criteria, to establish new criteria and to adjust
advance rates with respect to Eligible Lease Receivables, in their reasonable
credit judgment, subject to the approval of Supermajority Revolving Lenders in
the case of adjustments, or new criteria or changes in advance rates which have
the effect of making more credit available. Eligible Lease Receivables shall not
include any Lease Receivable of any Borrower:
(a) which does not arise from the Lease of goods by such
Borrower in the ordinary course of its business pursuant to a written Lease
which provides for a lease term of equal to or less than seven (7) years, an
implicit interest rate at least equal to the current market rate for comparable
lease transactions, equal amortization over the life of the lease on a monthly
or quarterly basis and on terms which are otherwise consistent with the
Borrowers' past practice and industry standards;
(b) (i) upon which Lease Receivable or the associated Lease
such Borrower's right to receive payment is not absolute or is contingent upon
the fulfillment of any condition whatsoever or (ii) as to which Lease Receivable
or the associated Lease such Borrower is not able to bring suit or otherwise
enforce its remedies against the Lessee through judicial process;
(c) in the event that any defense, counterclaim, setoff or
dispute is asserted as to such Lease Receivable or the associated Lease;
(d) that is not a true and correct statement of bona fide
obligation incurred in the amount of the Lease Receivable for merchandise leased
to and accepted by the applicable Lessee;
(e) which Lease Receivable and the associated Lease (i) are
not owned by such Borrower or (ii) are subject to any right, claim, security
interest or other interest of any other Person, other than Liens in favor of
Administrative Agent, on behalf of itself, Revolver Agent and Lenders;
(f) that arises from a Lease to any director, officer, other
employee or Affiliate of any Credit Party, or to any entity which has any common
officer or director with any Credit Party;
(g) that is the obligation of a Lessee that is the United
States government or a political subdivision thereof, or any state or
municipality or department, agency or instrumentality thereof unless
Administrative Agent and Revolver Agent, in their sole discretion, have agreed
to the contrary in writing and such Borrower, if necessary or desirable, has
complied with the Federal Assignment of Claims Act of 1940, and any amendments
thereto, or any applicable state statute or municipal ordinance of similar
purpose and effect, with respect to such obligation;
(h) (i) that is the obligation of a Lessee located in a
foreign country (other than Canada, Puerto Rico and the United States Virgin
Islands), unless payment thereof is assured by a letter of credit assigned and
delivered to Administrative Agent, satisfactory to Administrative Agent and
Revolver Agent as to form, amount and issuer;
(ii) that is the obligation of an Lessee located in
Canada, Puerto Rico or the United States Virgin Islands, unless (x) payment
thereof is assured by a letter of credit assigned and delivered to
Administrative Agent, satisfactory to Administrative Agent and Revolver Agent as
to form, amount and issuer, or (y) Administrative Agent and Revolver Agent, in
their sole discretion, have agreed to the contrary in writing and such Borrower,
if necessary, has taken all such action as may be required by Administrative
Agent and Revolver Agent to establish and maintain in favor of Administrative
Agent for the benefit of the Lenders a first, perfected security interest in and
to such Account;
(i) to the extent such Borrower or any Subsidiary thereof is
liable for goods sold or services rendered by the applicable Lessee to such
Borrower or any Subsidiary thereof but only to the extent of the potential
offset;
(j) which Lease Receivable or the associated Lease is in
default; provided, THAT, without limiting the generality of the foregoing, a
Lease Receivable and the associated Lease shall be deemed in default upon the
occurrence of any of the following:
(i) it is not paid within sixty (60) days following
the due date of any payment under the applicable Lease;
(ii) if any Lessee obligated upon such Lease
Receivable suspends business, makes a general assignment for the benefit of
creditors or fails to pay its debts generally as they come due; or
(iii) if any petition is filed by or against any
Lessee obligated upon such Lease Receivable under any bankruptcy law or any
other federal, state or foreign (including any provincial) receivership,
insolvency relief or other law or laws for the relief of debtors;
(k) which is the obligation of a Lessee if fifty percent (50%)
or more of the dollar amount of all Lease Receivables owing by that Lessee are
ineligible under the other criteria set forth in this SECTION 1.8;
(l) as to which Lease Receivable or the associated Lease
Administrative Agent's Lien thereon, on behalf of itself, Revolver Agent and
Lenders, is not a first priority perfected Lien;
(m) as to which Lease Receivable or the associated Lease any
of the representations or warranties pertaining to Lease Receivables and Leases
set forth in this Agreement or the Security Agreements is untrue;
(n) to the extent such Lease Receivable is evidenced by a
judgment, or Instrument;
(o) to the extent such Lease Receivable is evidenced by
Chattel Paper, unless the original of such Chattel Paper has been delivered to
Administrative Agent with all necessary endorsements, free and clear of all
Liens except those in favor of the Administrative Agent, on behalf of itself,
Revolver Agent and Lenders;
(p) to the extent such Lease Receivable exceeds any credit
limit established by Administrative Agent or Revolver Agent, in their reasonable
discretion;
(q) to the extent that such Lease Receivable, together with
all other Lease Receivables owing by such Lessee and its Affiliates as of any
date of determination; exceed twenty percent (20%) of all Eligible Lease
Receivable;
(r) which Lease Receivable is payable in any currency other
than Dollars; or
(s) which Lease Receivable or the associated Lease is
unacceptable to Administrative Agent or Revolver Agent in their reasonable
credit judgment.
1.9 CASH MANAGEMENT SYSTEMS. On or prior to the Closing Date,
Borrowers will establish and will maintain until the Termination Date, the cash
management systems described on ANNEX C (the "CASH MANAGEMENT SYSTEMS").
1.10 FEES. (a) (i) Borrowers shall pay to GE Capital,
individually, the Fees specified in the GE Capital Fee Letter at the times
specified for payment therein; provided THAT:
(x) of the opportunity analysis fee payable to GE Capital on the
Closing Date, the Borrowers shall pay:
(1) to NationsBank an amount equal to $84,437.50, and
(2) to KCCI an amount equal to $72,000.00; and
(y) of the Closing Fee payable to GE Capital in respect of each
Acquisition Loan Advance, the Borrowers shall pay, as of the date of
each such Acquisition Loan Advance:
(1) to NationsBank an amount equal to 0.875% of NationsBank's
Pro Rata Share of such Acquisition Loan Advance, and
(2) to KCCI an amount equal to 0.75% of KCCI's Pro Rata Share
of such Acquisition Loan Advance.
(ii) Borrowers shall pay to Revolver Agent, the Fees specified
in that certain fee letter of even date herewith among Borrowers and Revolver
Agent (the "REVOLVER AGENT FEE LETTER"), at the times specified for payment
therein, which fees are payable in lieu of the Agent's Fee referred to in the GE
Fee Letter.
(b)(i) As additional compensation for the Revolving Lenders,
Borrowers agree to pay to Revolver Agent, for the ratable benefit of such
Lenders, in arrears, on the first Business Day of each month prior to the
Commitment Termination Date (Revolver A), and on the Commitment Termination Date
(Revolver A), a fee for Borrowers' non-use of the Revolving Loan Commitment
(Revolver A) in an amount equal to the Applicable Unused Revolver Fee Margin per
annum (calculated on the basis of a 360 day year for the actual days elapsed) of
the difference between (x) the Maximum Amount (Revolver A) (as it may be reduced
from time to time) and (y) the average for the period of the daily closing
balances of the aggregate Revolving Loan (Revolver A), the Letter of Credit
Obligations and the Swing Line Loan (Revolver A) outstanding during the period
for which such fee is due.
(ii) As additional compensation for the Revolving Lenders,
Borrowers agree to pay to Revolver Agent, for the ratable benefit of such
Lenders, in arrears, on the first Business Day of each month prior to the
Commitment Termination Date (Revolver B) and on the Commitment Termination Date
(Revolver B), a fee for Borrowers' non-use of the Revolving Loan Commitment
(Revolver B) in an amount equal to the Applicable Unused Revolver Fee Margin per
annum (calculated on the basis of a 360 day year for the actual days elapsed) of
the difference between (x) the Maximum Amount (Revolver B) (as it may be reduced
from time to time) and (y) the average for the period of the daily closing
balances of the aggregate Revolving Loan (Revolver B) and the Swing Line Loan
(Revolver B) outstanding during the period for which such fee is due.
(iii) As additional compensation for Term Lenders (Term Loan
A), Borrowers agree to pay to Revolver Agent, for the ratable benefit of such
Lenders, in arrears on the first Business Day of each month prior to the funding
of the Term Loan A and on the date of funding of the Term Loan A, a fee for
Borrower's non-use of the Term Loan Commitment (Term Loan A) in an amount equal
to the Applicable Unused Acquisition Line Fee Margin per annum (calculated on
the basis of a 360 day year for the actual number of days elapsed) times the
Term Loan Commitment (Term Loan A).
(iv) As additional compensation for the Acquisition Lenders,
Borrowers agree to pay to Revolver Agent, for the ratable benefit of such
Lenders, in arrears, on the First Business Day of each month prior to the
Commitment Termination Date (Acquisition Loan) and on the Commitment Termination
Date (Acquisition Loan), a fee for Borrowers' non-use of the Acquisition Loan
Commitment in an amount equal to the Applicable Unused Acquisition Line Fee
Margin per annum (calculated on the basis of 360 day year for the actual days
elapsed) of the
difference between (x) the Maximum Amount (Acquisition Loan) and (y) the average
for the period of the daily closing balances of the aggregate Acquisition Loan
outstanding during the period for which such fee is due.
(c)(i) If Borrowers prepay all or any portion of the Term Loan
A or Term Loan B or terminate the Revolving Loan Commitment (Revolver A),
Revolving Loan Commitment (Revolver B) or the Acquisition Loan Commitment, as
the case may be, whether voluntarily or involuntarily and whether before or
after acceleration of the Obligations, Borrowers shall pay to Revolver Agent,
for the benefit of Lenders as liquidated damages and compensation for the costs
of being prepared to make funds available hereunder an amount determined by
multiplying the Applicable Percentage (as defined below) by (i) the principal
amount of the Term Loan A or Term Loan B, as the case may be, prepaid, and (ii)
the amount of the Revolving Loan Commitment (Revolver (A), Revolving Loan
Commitment (Revolver B) or the Acquisition Loan Commitment, as the case may be,
terminated. As used herein, the term "APPLICABLE PERCENTAGE" shall mean (x)
three percent (3%), in the case of a prepayment or termination on or prior to
the first anniversary of the Closing Date, (y) two percent (2%), in the case of
a prepayment or termination after the first anniversary of the Closing Date but
on or prior to the second anniversary, and (z) one percent (1%), in the case of
a prepayment or termination after the second anniversary of the Closing Date but
on or prior to the third anniversary. Notwithstanding the foregoing, no
prepayment fee shall be payable by Borrowers upon a mandatory prepayment made
pursuant to SECTIONS 1.3(B); provided that Borrowers do not permanently reduce
the Revolving Loan Commitment (Revolver A), the Revolving Loan Commitment
(Revolver B) or the Acquisition Loan, as the case may be, upon any such
prepayment and, in the case of prepayments made pursuant to SECTION 1.3(B)(IV)
or (B)(V), the transaction giving rise to the applicable prepayment is expressly
permitted under SECTION 6.
(ii) If Borrowers prepay all or any portion of the Term Loan
B, whether voluntarily or involuntarily and whether before or after acceleration
of the Obligations, Borrowers shall pay to Revolver Agent, for the benefit of
Lenders as liquidated damages the Make-Whole Amount.
1.11 RECEIPT OF PAYMENTS. Borrowers shall make each payment
under this Agreement not later than 2:00 p.m. (New York time) on the day when
due in immediately available funds in Dollars to the Revolver Agent. For
purposes of computing interest and Fees and determining Borrowing Availability
(Revolver A), Borrowing Availability (Revolver B), Net Borrowing Availability
(Revolver A), Net Borrowing Availability (Revolver B) or Net Borrowing
Availability (Acquisition Loan) as of any date, all payments shall be deemed
received on the day of receipt of immediately available funds therefor by the
Revolver Agent prior to 2:00 p.m. New York time. Payments received after 2:00
p.m. New York time on any Business Day shall be deemed to have been received on
the following Business Day.
1.12 APPLICATION AND ALLOCATION OF PAYMENTS. (a) So long as no
Default or Event of Default shall have occurred and be continuing, (i) payments
consisting of proceeds of Accounts received in the ordinary course of business
shall be applied to the Swing Line Loan (Revolver A) and the Revolving Loan
(Revolver A); (ii) payments consisting of proceeds of Lease Receivables received
in the ordinary course of business shall be applied to the Swing Line loan
(Revolver B) and the Revolving Loan (Revolver B); (iii) payments matching
specific scheduled payments then due shall be applied to those scheduled
payments; (iv) voluntary prepayments shall be applied as determined by Borrower
Representative, subject to the provisions of SECTION 1.3(A); and (v) mandatory
prepayments shall be applied as set forth in SECTIONS 1.3(C) AND 1.3(D). All
payments and prepayments applied to a particular Loan shall be applied ratably
to the portion thereof held by each Lender as determined by its Pro Rata Share.
As to each other payment (other than payments made when a Default or Event of
Default shall have occurred and be continuing or following the Commitment
Termination Date (Revolver A) or Commitment Termination Date (Revolver B)), each
Borrower hereby irrevocably waives the right to direct the application of any
and all payments received from or on behalf of such Borrower, and each Borrower
hereby irrevocably agrees that Revolver Agent, at the direction of the
Administrative Agent, shall have the continuing exclusive right to apply any and
all such payments against the Obligations of Borrowers as Revolver Agent, at the
direction of the Administrative Agent, may deem advisable notwithstanding any
previous entry by Revolver Agent in the Loan Account or any other books and
records. In the absence of a specific determination by Revolver Agent, at the
direction of Administrative Agent, or by Administrative Agent with respect
thereto, payments shall be applied to amounts then due and payable in the
following order: (1) to Fees and Administrative Agent's and Revolver Agent's
expenses reimbursable hereunder; (2) to interest on the Swing Line Loan
(Revolver A) and Swing Line Loan (Revolver B), ratably in proportion to the
interest accrued as to each such Loan; (3) to principal payments on the Swing
Line Loan (Revolver A) and Swing Line Loan (Revolver B), ratably in proportion
to the aggregate, combined principal balance of the Swing Line Loan (Revolver A)
and the Swing Line Loan (Revolver B); (4) to interest on the other Loans,
ratably in proportion to the interest accrued as to each such Loan; (5) to
principal payments on the other Loans and to provide cash collateral for Letter
of Credit Obligations in the manner described in ANNEX B, ratably in proportion
to the aggregate, combined principal balance of the other Loans and outstanding
Letter of Credit Obligations; and (6) to all other Obligations including
expenses of Lenders to the extent reimbursable under SECTION 11.3. As to all
payments made when a Default or Event of Default shall have occurred and be
continuing or following the Commitment Termination Date (Revolver A) or
Commitment Termination Date (Revolver B), each Borrower hereby irrevocably
waives the right to direct the application of any and all payments received from
or on behalf of such Borrower, and each Borrower hereby irrevocably agrees that
such payments shall be applied in the following order: (1) to Fees and
Administrative Agent's and Revolver Agent's expenses reimbursable hereunder; (2)
to interest on the Loans, ratably in proportion to the interest accrued as to
each such Loan; (3) to principal payments on the Loans and to provide cash
collateral for Letter of Credit Obligations in the manner described in ANNEX B,
ratably in proportion to the aggregate, combined principal balance of the Loans
and
outstanding Letter of Credit Obligations; and (4) to all other Obligations
including expenses of Lenders to the extent reimbursable under SECTION 11.3.
(b) Revolver Agent is authorized to, and at its sole election
may and, the direction of the Administrative Agent, shall charge to the
Revolving Loan (Revolver A) and/or the Revolving Loan (Revolver B) balance on
behalf of Borrowers and cause to be paid all Fees, expenses, Charges, costs
(including insurance premiums in accordance with SECTION 5.4(A)) and interest
and principal, other than principal of the Revolving Loan (Revolver A) or the
Revolving Loan (Revolver B), owing by Borrowers under this Agreement or any of
the other Loan Documents if and to the extent Borrowers fail to promptly pay any
such amounts as and when due, even if such charges would cause the balance of
the aggregate Revolving Loan (Revolver A) and the Swing Line Loan (Revolver A)
to exceed the Borrowing Availability (Revolver A) or the balance of the
aggregate Revolving Loan (Revolver B) and the Swing Line Loan (Revolver B) to
exceed the Borrowing Availability (Revolver B). At Administrative Agent's option
and to the extent permitted by law, any charges so made shall constitute part of
the Revolving Loan (Revolver A) and/or Revolving Loan (Revolver B), as the case
may be, hereunder.
1.13 LOAN ACCOUNT AND ACCOUNTING. Revolver Agent shall
maintain a loan account (the "LOAN ACCOUNT") on its books to record: all
Advances and the Term Loan A and Term Loan B, all payments made by Borrowers,
and all other debits and credits as provided in this Agreement with respect to
the Loans or any other Obligations. All entries in the Loan Account shall be
made in accordance with Revolver Agent's customary accounting practices as in
effect from time to time. The balance in the Loan Account, as recorded on
Revolver Agent's most recent printout or other written statement, shall, absent
manifest error, be presumptive evidence of the amounts due and owing to Agents
and Lenders by Borrowers; PROVIDED that any failure to so record or any error in
so recording shall not limit or otherwise affect any Borrower's duty to pay the
Obligations. Revolver Agent shall render to Borrower Representative and
Administrative Agent a monthly accounting of transactions with respect to the
Loans setting forth the balance of the Loan Account. Unless Borrower
Representative notifies Revolver Agent and Administrative Agent in writing of
any objection to any such accounting (specifically describing the basis for such
objection), within forty-five (45) days after the date thereof, each and every
such accounting shall (absent manifest error) be deemed final, binding and
conclusive upon Borrowers in all respects as to all matters reflected therein.
Only those items expressly objected to in such notice shall be deemed to be
disputed by Borrowers. Notwithstanding any provision herein contained to the
contrary, any Lender may elect (which election may be revoked) to dispense with
the issuance of Notes to that Lender and may rely on the Loan Account as
evidence of the amount of Obligations from time to time owing to it.
1.14 INDEMNITY. Each Credit Party that is a signatory hereto
shall jointly and severally indemnify and hold harmless each of Administrative
Agent, Revolver Agent, Lenders and their respective Affiliates, and each such
Person's respective officers, directors, employees, attorneys, agents and
representatives (each, an "INDEMNIFIED PERSON"), from and against any and
all suits, actions, proceedings, claims, damages, losses, liabilities and
expenses (including reasonable attorneys' fees and disbursements and other costs
of investigation or defense, including those incurred upon any appeal) which may
be instituted or asserted against or incurred by any such Indemnified Person as
the result of credit having been extended, suspended or terminated under this
Agreement and the other Loan Documents and the administration of such credit,
and in connection with or arising out of the transactions contemplated hereunder
and thereunder and any actions or failures to act in connection therewith,
including any and all Environmental Liabilities and legal costs and expenses
arising out of or incurred in connection with disputes between or among ANY
PARTIES to any of the Loan Documents (collectively, "INDEMNIFIED LIABILITIES");
PROVIDED, that no such Credit Party shall be liable for any indemnification to
an Indemnified Person to the extent that any such suit, action, proceeding,
claim, damage, loss, liability or expense results from that Indemnified Person's
gross negligence or willful misconduct. NO INDEMNIFIED PERSON SHALL BE
RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR,
ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING
CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN
EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN DOCUMENT OR AS A RESULT OF ANY
OTHER TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER. Nothing in this SECTION
1.14 is intended to obligate any Credit Party to reimburse any Indemnified Party
for the ordinary costs and expenses of negotiating, closing or administering
this Agreement in the ordinary course except to the extent specifically provided
in SECTION 11.3.
1.15 ACCESS. Each Credit Party which is a party hereto shall,
during normal business hours, from time to time upon one (1) Business Day's
prior notice as frequently as Administrative Agent or Revolver Agent determines
to be appropriate: (a) provide Administrative Agent and Revolver Agent and any
of their officers, employees and agents access to its properties, facilities,
advisors and employees (including officers) of each Credit Party and to the
Collateral, (b) permit Administrative Agent and Revolver Agent, and any of their
officers, employees and agents, to inspect, audit and make extracts from any
Credit Party's books and records, and (c) permit Administrative Agent and
Revolver Agent, and their officers, employees and agents, to inspect, review,
evaluate and make test verifications and counts of the Accounts, Inventory,
Leases and other Collateral of any Credit Party; PROVIDED THAT so long as no
Default or Event of Default shall have occurred and be continuing, the
Administrative Agent and the Revolver Agent shall be entitled to such access to
conduct each of the activities listed in clauses (a), (b) and (c) above no more
frequently than once in each calendar month. If a Default or Event of Default
shall have occurred and be continuing or if access is necessary to preserve or
protect the Collateral as determined by Administrative Agent, each such Credit
Party shall provide such access to Administrative Agent and to each Lender at
all times and without advance notice. Each Credit Party shall make available to
Administrative Agent and its counsel, as quickly as is possible under the
circumstances, originals or copies of all books and records which
Administrative Agent may reasonably request. Each Credit Party shall deliver any
document or instrument necessary for Administrative Agent, as it may from time
to time request, to obtain records from any service bureau or other Person which
maintains records for such Credit Party, and shall maintain duplicate records or
supporting documentation on media, including computer tapes and discs owned by
such Credit Party. Administrative Agent will give Lenders at least ten (10)
days' prior written notice of regularly scheduled audits. Representatives of
other Lenders may accompany Administrative Agent's representatives on regularly
scheduled audits at no charge to Borrowers.
1.16 TAXES. (a) Any and all payments by each Borrower
hereunder (including any payments made pursuant to SECTION 12) or under the
Notes shall be made, in accordance with this SECTION 1.16, free and clear of and
without deduction for any and all present or future Taxes. If any Borrower shall
be required by law to deduct any Taxes from or in respect of any sum payable
hereunder (including any sum payable pursuant to SECTION 12) or under the Notes,
(i) the sum payable shall be increased as much as shall be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this SECTION 1.16) Administrative Agent, Revolver
Agent or Lenders, as applicable, receive an amount equal to the sum they would
have received had no such deductions been made, (ii) such Borrower shall make
such deductions, and (iii) such Borrower shall pay the full amount deducted to
the relevant taxing or other authority in accordance with applicable law. Within
thirty (30) days after the date of any payment of Taxes, Borrower Representative
shall furnish to Administrative Agent the original or a certified copy of a
receipt evidencing payment thereof.
(b) Each Credit Party that is a signatory hereto shall jointly
and severally indemnify and, within ten (10) days of demand therefor, pay
Administrative Agent, Revolver Agent and each Lender for the full amount of
Taxes (including any Taxes imposed by any jurisdiction on amounts payable under
this SECTION 1.16) paid by Administrative Agent, Revolver Agent or such Lender,
as appropriate, and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto, whether or not such Taxes were
correctly or legally asserted.
(c) Each Lender organized under the laws of a jurisdiction
outside the United States (a "FOREIGN LENDER") as to which payments to be made
under this Agreement or under the Notes are exempt from United States
withholding tax under an applicable statute or tax treaty shall provide to
Borrower Representative and Administrative Agent a properly completed and
executed IRS Form 4224 or Form 1001 or other applicable form, certificate or
document prescribed by the IRS or the United States certifying as to such
Foreign Lender's entitlement to such exemption (a "CERTIFICATE OF EXEMPTION").
Any foreign Person that seeks to become a Lender or a participant of a Lender
under this Agreement shall provide a Certificate of Exemption to Borrower
Representative and Administrative Agent prior to becoming a Lender or a
participant of a Lender hereunder. No foreign Person may become a Lender
hereunder if such Person is unable or fails to deliver a Certificate of
Exemption.
1.17 CAPITAL ADEQUACY; INCREASED COSTS. (a) If any Lender
shall have determined that any law, treaty, governmental (or quasi-governmental)
rule, regulation, guideline or order regarding capital adequacy, reserve
requirements or similar requirements or compliance by any Lender with any
request or directive regarding capital adequacy, reserve requirements or similar
requirements (whether or not having the force of law), in each case, adopted
after the Closing Date, from any central bank or other Governmental Authority
increases or would have the effect of increasing the amount of capital, reserves
or other funds required to be maintained by such Lender and thereby reducing the
rate of return on such Lender's capital as a consequence of its obligations
hereunder, then Borrowers shall from time to time upon demand by such Lender
(with a copy of such demand to Administrative Agent and Revolver Agent) pay to
Revolver Agent, for the account of such Lender, additional amounts sufficient to
compensate such Lender for such reduction. A certificate as to the amount of
that reduction and showing the basis of the computation thereof submitted by
such Lender to Borrower Representative and to Administrative Agent and Revolver
Agent shall, absent manifest error, be final, conclusive and binding for all
purposes.
(b) REPLACEMENT OF LENDER IN RESPECT OF INCREASED COSTS.
Within fifteen (15) days after receipt by Borrower Representative of written
notice and demand from any Lender (an "AFFECTED LENDER") for payment of
additional amounts or increased costs as provided in SECTION 1.16(A) or 1.17(A),
Borrower Representative may, at its option, notify Administrative Agent and such
Affected Lender of its intention to replace the Affected Lender. So long as no
Default or Event of Default shall have occurred and be continuing, Borrower
Representative, with the consent of Administrative Agent, may obtain, at
Borrowers' expense, a replacement Lender ("REPLACEMENT LENDER") for the Affected
Lender, which Replacement Lender must be reasonably satisfactory to
Administrative Agent. If Borrowers obtain a Replacement Lender within ninety
(90) days following notice of their intention to do so, the Affected Lender must
sell and assign its Loans and Commitments to such Replacement Lender for an
amount equal to the principal balance of all Loans held by the Affected Lender
and all accrued interest and Fees with respect thereto through the date of such
sale, PROVIDED that Borrowers shall have reimbursed such Affected Lender for the
additional amounts or increased costs that it is entitled to receive under this
Agreement through the date of such sale and assignment.
Notwithstanding the foregoing, Borrowers shall not have the right to obtain a
Replacement Lender if the Affected Lender rescinds its demand for increased
costs or additional amounts within fifteen (15) days following its receipt of
Borrowers' notice of intention to replace such Affected Lender. Furthermore, if
Borrowers give a notice of intention to replace and do not so replace such
Affected Lender within ninety (90) days thereafter, Borrowers' rights under this
SECTION 1.17(B) shall terminate and Borrowers shall promptly pay all increased
costs or additional amounts demanded by such Affected Lender pursuant to
SECTIONS 1.16(A) and 1.17(A).
1.18 SINGLE LOAN. All Loans to Borrowers and all of the other
Obligations of each Borrower arising under this Agreement and the other Loan
Documents shall constitute one general, joint and several obligation of all
Borrowers secured, until the Termination Date, by all of their respective
Collateral.
2. CONDITIONS PRECEDENT AND SUBSEQUENT
2.1 CONDITIONS TO THE INITIAL LOANS. No Lender shall be
obligated to make any Loan or incur any Letter of Credit Obligations on the
Closing Date, or to take, fulfill, or perform any other action hereunder, until
the following conditions have been satisfied or provided for in a manner
satisfactory to Administrative Agent, or waived in writing by Administrative
Agent and Lenders:
(a) CREDIT AGREEMENT; LOAN DOCUMENTS. This Agreement or
counterparts hereof shall have been duly executed by, and delivered to,
Borrowers, Agents and Lenders; and Administrative Agent shall have received such
documents, instruments, agreements and legal opinions as Administrative Agent
shall reasonably request in connection with the transactions contemplated by
this Agreement and the other Loan Documents, including all those listed in the
Closing Checklist attached hereto as ANNEX D, each in form and substance
satisfactory to Administrative Agent.
(b) REPAYMENT OF PRIOR LENDER OBLIGATIONS; SATISFACTION OF
OUTSTANDING L/CS. (i) Administrative Agent shall have received a fully executed
original of a pay-off letter satisfactory to Administrative Agent confirming
that all of the Prior Lender Obligations will be repaid in full from the
proceeds of the Term Loan B, the initial Revolving Credit Advance (Revolver A)
and initial Revolving Credit Advance (Revolver B) and all Liens upon any of the
property of Borrowers or any of their Subsidiaries in favor of each of the Prior
Lenders shall be terminated by each of the Prior Lenders immediately upon such
payment; and (ii) all letters of credit issued or guaranteed by either of the
Prior Lenders shall have been cash collateralized or supported by a Letter of
Credit issued pursuant to ANNEX B, as mutually agreed upon by Administrative
Agent, Borrowers and each such Prior Lender.
(c) APPROVALS. Administrative Agent shall have received (i)
satisfactory evidence that the Credit Parties have obtained all required
consents and approvals of all Persons including all requisite Governmental
Authorities, to the execution, delivery and performance of this Agreement and
the other Loan Documents and the consummation of the Related Transactions or
(ii) an officer's certificate in form and substance satisfactory to
Administrative Agent affirming that no such consents or approvals are required.
(d) OPENING AVAILABILITY; TOTAL LIABILITIES. The Eligible
Accounts, Eligible Inventory and Eligible Lease Receivables of Borrowers
supporting the initial Revolving Credit Advance (Revolver A), the initial Letter
of Credit Obligations incurred and the initial Revolving
Credit Advance (Revolver B), as the case may be, and the amount of the Reserves
to be established on the Closing Date shall be sufficient in value, as
determined by Administrative Agent and the Revolver Agent, to provide Borrowers,
collectively, with Borrowing Availability, after giving effect to the initial
Revolving Credit Advance (Revolver A) and the initial Revolving Credit Advance
(Revolver B) made to Borrowers, the incurrence of any initial Letter of Credit
Obligations, and the consummation of the Related Transactions (on a pro forma
basis, with trade payables being paid currently, and expenses and liabilities
being paid in the ordinary course of business and without acceleration of sales)
of at least $2,000,000.00. After giving effect to the initial Loans made to
Borrowers, the incurrence of any initial Letter of Credit Obligations, and the
consummation of the Related Transactions, Borrowers and their Subsidiaries shall
not have Indebtedness outstanding which exceeds $21,500,000 in the aggregate.
(e) PAYMENT OF FEES. Borrowers shall have paid the Fees
required to be paid on the Closing Date in the respective amounts specified in
SECTION 1.10 (including the Fees specified in the GE Capital Fee Letter and the
Revolver Agent Fee Letter), and shall have reimbursed Administrative Agent and
Revolver Agent for all fees, costs and expenses of closing presented as of the
Closing Date.
(f) CAPITAL STRUCTURE: OTHER INDEBTEDNESS. The capital
structure of each Credit Party and the terms and conditions of all Indebtedness
of each Credit Party shall be acceptable to Administrative Agent in its sole
discretion.
(g) CONSUMMATION OF RELATED TRANSACTIONS. Administrative Agent
shall have received fully executed copies of the Bes-Pac Acquisition Agreement
and each of the other Related Transactions Documents, each of which shall be in
form and substance satisfactory to Administrative Agent and its counsel. The
Bes-Pac Acquisition and the other Related Transactions shall have been
consummated in accordance with the terms of the Bes-Pac Acquisition Agreement
and the other Related Transactions Documents but for the payment of the cash
purchase price payable on the Closing Date pursuant to the Bes-Pac Acquisition
Agreement.
2.2 FURTHER CONDITIONS TO EACH LOAN. Except as otherwise
expressly provided herein, no Lender shall be obligated to fund any Loan, or
incur any Letter of Credit Obligation (including, without limitation, those
Loans to be funded and Letter of Credit Obligations to be incurred on the
Closing Date), if, as of the date thereof:
(a) Any representation or warranty by any Credit Party
contained herein or in any of the other Loan Documents shall be untrue or
incorrect as of such date, except to the extent that such representation or
warranty expressly relates to an earlier date and except for changes therein
expressly permitted or expressly contemplated by this Agreement; or
(b) Any event or circumstance having a Material Adverse Effect
shall have occurred since the date hereof as determined by the Requisite
Lenders; or
(c) (i) Any Event of Default shall have occurred and be
continuing or would result after giving effect to any Loan (or the incurrence of
any Letter of Credit Obligations), or (ii) a Default shall have occurred and be
continuing or would result after giving effect to any Loan, and the Requisite
Lenders shall have determined not to make any Loan or incur any Letter of Credit
Obligation so long as that Default is continuing; or
(d) After giving effect to any Revolving Loan Advance
(Revolver A) (or the incurrence of any Letter of Credit Obligations), the
outstanding principal amount of the aggregate Revolving Loan (Revolver A) would
exceed the lesser of the Revolving Loan Borrowing Base (Revolver A) and the
Maximum Amount (Revolver A), LESS, in each case, the sum of the then outstanding
principal amount of the Swing Line Loan (Revolver A) and Letter of Credit
Obligations; or
(e) After giving effect to any Swing Line Advance (Revolver
A), the outstanding principal amount of the Swing Line Loan (Revolver A) would
exceed Swing Line Availability (Revolver A); or
(f) After giving effect to any Revolving Loan Advance
(Revolver B), the outstanding principal amount of the aggregate Revolving Loan
(Revolver B) would exceed the lesser of the Borrowing Base (Revolver B) and the
Maximum Amount (Revolver B), LESS, in each case, the then outstanding principal
amount of the Swing Line Loan (Revolver B); or
(g) After giving effect to any Swing Line Advance (Revolver
B), the outstanding principal amount of the Swing Line Loan (Revolver B) would
exceed the Swing Line Availability (Revolver B); or
(h) After giving effect to any Acquisition Loan Advance, the
outstanding principal amount of the aggregate Acquisition Loan would exceed the
Maximum Amount (Acquisition Loan).
The request and acceptance by any Borrower of the proceeds of any Loan, or the
incurrence of any Letter of Credit Obligations, as the case may be, shall be
deemed to constitute, as of the date of such request or acceptance, (i) a
representation and warranty by Borrowers that the conditions in this SECTION 2.2
have been satisfied and (ii) a reaffirmation by Borrowers of the cross-guaranty
provisions set forth in SECTION 12 and of the granting and continuance of
Administrative Agent's Liens, on behalf of itself, Revolver Agent and Lenders,
pursuant to the Collateral Documents.
2.3 FURTHER CONDITIONS TO TERM LOAN A. In addition to the
other conditions precedent to the making of any Loan pursuant to this Agreement,
no Term Lender (Term Loan A) shall be obligated to fund the Term Loan A, until
the following additional conditions have
been satisfied or provided for in a manner satisfactory to Administrative Agent
and the Term Lenders (Term Loan A), or waived in writing by Administrative Agent
and Term Lenders (Term Loan A):
(a) the ▇▇▇▇▇▇ Acquisition shall have been consummated (but
for the payment of the cash purchase price therefor); and
(b) each of the conditions set forth in SECTION 6.1 in respect
of a "Permitted Acquisition" (except for the condition set forth in SECTION
6.1(V)) shall have been satisfied in respect of the ▇▇▇▇▇▇ Acquisition; and
(c) Administrative Agent and Term Lenders (Term Loan A) shall
have received the audited financial statements for ▇▇▇▇▇▇ for the Fiscal Year of
▇▇▇▇▇▇ ending most recently prior to the ▇▇▇▇▇▇ Acquisition Closing Date; and
(d) after giving effect to the consummation of the ▇▇▇▇▇▇
Acquisition, ▇▇▇▇▇▇ shall have (i) EBITDA for the trailing twelve (12) months
determined as of the ▇▇▇▇▇▇ Acquisition Closing Date of not less than
$1,400,000.00, and (ii) shareholders's equity of not less than $1,100,000.00;
and
(e) the acquisition agreement and related agreements and
instruments, and all opinions, certificates, indemnities, lien search results
and other documents related to the ▇▇▇▇▇▇ Acquisition, and the terms thereof,
shall in all respects be in form and substance reasonably satisfactory to
Administrative Agent and Term Lenders (Term Loan A); and
(f) to the extent that, in connection with or in order to
consummate the ▇▇▇▇▇▇ Acquisition, any Borrower forms, creates or acquires any
Subsidiary, the Borrowers shall have caused such Subsidiary to, execute such
documents and take such other actions as may be reasonably required by
Administrative Agent and Term Lenders (Term Loan A) to execute and deliver to
Administrative Agent for the benefit of Lenders a Subsidiary Guaranty and
Subsidiary Security Agreement, all in form and substance satisfactory to
Administrative Agent and Term Lenders (Term Loan A), and to do such other acts
and things, all as Administrative Agent and Term Lenders (Term Loan A), or any
of them, may from time to time reasonably request so as to maintain a valid,
first perfected security interest (subject to Permitted Encumbrances) in favor
of Administrative Agent for the benefit of Lenders in all of the tangible and
intangible property of such Subsidiary, whether then existing or thereafter
created or arising, and a valid, first perfected pledge of and security interest
in favor of Administrative Agent for the benefit of Lenders in all of the issued
and outstanding Stock of such Subsidiary.
2.4 FURTHER CONDITIONS TO EACH ACQUISITION LOAN. In addition
to the other conditions precedent to the making of any Loan pursuant to this
Agreement, no Acquisition Lender shall be obligated to fund any Acquisition
Loan, until the following additional conditions
have been satisfied or provided for in a manner satisfactory to Administrative
Agent and Acquisition Lenders, or waived in writing by Administrative Agent and
Acquisition Lenders:
(a) such Acquisition Loan is for an amount which is no greater
than 4.25 times the EBITDA of the Target of the Acquisition for which such
Acquisition Loan is to be made; and
(b) each of the conditions set forth in SECTION 6.1 in respect
of a "Permitted Acquisition" shall have been satisfied in respect of the
Acquisition is to be funded; and
(c) to the extent that the cash purchase consideration for
such Acquisition is greater than $2,000,000, Administrative Agent and
Acquisition Lenders shall have received the audited financial statements for the
applicable Target for the Fiscal Year of the applicable Target ending most
recently prior to the closing date for such Acquisition; and
(d) to the extent that, in connection with or in order to
consummate the Acquisition for which such Acquisition Loan is to be funded, any
Borrower forms, creates or acquires any Subsidiary, Borrowers shall have caused
such Subsidiary to, execute such documents and take such other actions as may be
reasonably required by Administrative Agent and Acquisition Lenders to execute
and deliver to Administrative Agent for the benefit of Lenders a Subsidiary
Guaranty and Subsidiary Security Agreement, all in form and substance
satisfactory to Administrative Agent and Acquisition Lenders, and to do such
other acts and things, all as Administrative Agent and Acquisition Lenders, or
any of them, may from time to time reasonably request so as to maintain a valid,
first perfected security interest (subject to Permitted Encumbrances) in favor
of Administrative Agent for the benefit of Lenders in all of the tangible and
intangible property of such Subsidiary, whether then existing or thereafter
created or arising, and a valid, first perfected pledge of and security interest
in favor of Administrative Agent for the benefit of Lenders in all of the issued
and outstanding Stock of such Subsidiary; and
(e) Borrowers shall have paid the Fees required to be paid on
the date of funding any such Acquisition Loan Advance in the respective amounts
specified in SECTION 1.10 (including the Fees specified in the GE Capital Fee
Letter and in SECTION 1.10(A)(I)(Y)).
2.5 CONDITIONS SUBSEQUENT TO THE MAKING OF THE LOANS. The
making of the Loans is expressly contingent upon the satisfaction by the
Borrowers of each of the conditions subsequent set forth on SCHEDULE 2.5, each
of which shall be completed to the complete satisfaction of Administrative Agent
and Administrative Agent's counsel, on or before the corresponding deadline set
forth in SCHEDULE 2.5; it being understood and agreed that the failure to timely
satisfy any such condition subsequent shall constitute an Event of Default for
which Administrative Agent and Lenders shall be immediately entitled to exercise
their rights and remedies in respect thereof.
3. REPRESENTATIONS AND WARRANTIES
To induce Lenders to make the Loans and to incur Letter of Credit Obligations,
the Credit Parties executing this Agreement, jointly and severally, make the
following representations and warranties to Agents and each Lender with respect
to all Credit Parties, each and all of which shall survive the execution and
delivery of this Agreement.
3.1 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each Credit
Party (a) is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation; (b) is duly qualified to
conduct business and is in good standing in each other jurisdiction where its
ownership or lease of property or the conduct of its business requires such
qualification, except where the failure to be so qualified would not result in
exposure to losses, damages or liabilities in excess of $150,000; (c) has the
requisite corporate power and authority and the legal right to own, pledge,
mortgage or otherwise encumber and operate its properties, to lease the property
it operates under lease and to conduct its business as now, heretofore and
proposed to be conducted; (d) subject to specific representations regarding
Environmental Laws, has all licenses, permits, consents or approvals from or by,
and has made all filings with, and has given all notices to, all Governmental
Authorities having jurisdiction, to the extent required for such ownership,
operation and conduct; (e) is in compliance with its charter and by-laws; and
(f) subject to specific representations set forth herein regarding ERISA,
Environmental Laws, tax and other laws, is in compliance with all applicable
provisions of law, except where the failure to comply, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
3.2 EXECUTIVE OFFICES; FEIN. As of the Closing Date, the
current location of each Credit Party's chief executive office and principal
place of business is set forth in Disclosure Schedule (3.2), and none of such
locations have changed within the twelve (12) months preceding the Closing Date.
In addition, DISCLOSURE SCHEDULE (3.2) lists the federal employer identification
number of each Credit Party.
3.3 CORPORATE POWER, AUTHORIZATION, ENFORCEABLE OBLIGATIONS.
The execution, delivery and performance by each Credit Party of the Loan
Documents to which it is a party and the creation of all Liens provided for
therein: (a) are within such Person's corporate power; (b) have been duly
authorized by all necessary or proper corporate and shareholder action; (c) do
not contravene any provision of such Person's charter or bylaws; (d) do not
violate any law or regulation, or any order or decree of any court or
Governmental Authority; (e) do not materially conflict with or result in the
material breach or termination of, constitute a material default under or
accelerate or permit the acceleration of any performance required by, any
indenture, mortgage, deed of trust, lease, agreement or other instrument to
which such Person is a party or by which such Person or any of its material
property is bound; (f) do not result in the creation or imposition of any Lien
upon any of the property of such Person other than those in favor of
Administrative Agent, on behalf of itself, Revolver Agent and Lenders, pursuant
to the Loan Documents; and (g) do not require the consent or approval of any
Governmental Authority or any other Person, except those referred to in SECTION
2.1(C), all of which will have been duly obtained, made or complied with prior
to the Closing Date. On or prior to the Closing Date, each of the Loan Documents
shall have been duly executed and delivered by each Credit Party thereto and
each such Loan Document shall then constitute a legal, valid and binding
obligation of such Credit Party enforceable against it in accordance with its
terms.
3.4 FINANCIAL STATEMENTS AND PROJECTIONS. Except for the
Projections and the Fair Salable Balance Sheet, all Financial Statements
concerning Borrowers and their respective Subsidiaries which are referenced
below have been prepared in accordance with GAAP consistently applied throughout
the periods covered (except as disclosed therein and except, with respect to
unaudited Financial Statements, for the absence of footnotes and normal year-end
audit adjustments) and present fairly in all material respects the financial
position of the Persons covered thereby as at the dates thereof and the results
of their operations and cash flows for the periods then ended. The Lenders
acknowledge that there can be no assurance that the projections contained in the
Projections will be realized or that actual events will not result in variations
from such projections; PROVIDED THAT such acknowledgment shall in no event be
deemed or construed as a waiver of or consent by Administrative Agent, Revolver
Agent or any of the Lenders to any non-compliance by the Credit Parties, or any
of them, with any covenant, term or condition of this Agreement or any of the
Loan Documents or the failure of the representations and warranties contained in
this SECTION 3.4 to be true and correct.
(a) The following Financial Statements attached hereto as
DISCLOSURE SCHEDULE (3.4(A)) have been delivered on the date hereof:
(i) The audited consolidated and consolidating
balance sheets at December 31, 1997 and 1996 and the related statements of
income and cash flows of Hi-Rise and its Subsidiaries for the Fiscal Years then
ended, certified by Coopers & ▇▇▇▇▇▇▇ L.L.P.
(ii) The unaudited balance sheet(s) at August 31,
1998, and the related statement(s) of income and cash flows, of Hi-Rise and its
Subsidiaries for the eight (8) Fiscal Months then ended.
(b) PRO FORMA. The Pro Forma delivered on the date hereof and
attached hereto as DISCLOSURE SCHEDULE (3.4(B)) was prepared by Borrowers giving
PRO FORMA effect to the Related Transactions, was based on the unaudited
consolidated and consolidating balance sheets of Borrowers and their
Subsidiaries dated August 31, 1998, and was prepared in accordance with GAAP,
with only such adjustments thereto as would be required in accordance with GAAP.
(c) PROJECTIONS. The Projections delivered on the date hereof
and attached hereto as DISCLOSURE SCHEDULE (3.4(C)) have been prepared by
Borrowers in light of the past
operations of their businesses, but including future payments of known
contingent liabilities reflected on the Fair Salable Balance Sheet, and reflect
projections for the three (3) year period beginning on January 1, 1998, on a
quarter by quarter basis for the first year and on a year by year basis
thereafter. The Projections are based upon estimates and assumptions stated
therein, all of which Borrowers believe to be reasonable and fair in light of
current conditions and current facts known to Borrowers and, as of the Closing
Date, reflect Borrowers' good faith and reasonable estimates of the future
financial performance of Borrowers and of the other information projected
therein for the period set forth therein. The Lenders acknowledge that there can
be no assurance that the projections contained in the Projections will be
realized or that actual events will not result in variations from such
projections; PROVIDED THAT such acknowledgment shall in no event be deemed or
construed as a waiver of or consent by Administrative Agent, Revolver Agent or
any of the Lenders to any non-compliance by the Credit Parties, or any of them,
with any covenant, term or condition of this Agreement or any of the Loan
Documents or the failure of the representations and warranties contained in this
SECTION 3.4(C) to be true and correct.
(d) FAIR SALABLE BALANCE SHEET. The Fair Salable Balance Sheet
delivered on the date hereof and attached hereto as DISCLOSURE SCHEDULE (3.4(D))
was prepared by Borrowers on the same basis as the Pro Forma, except that
Borrowers' assets are set forth therein at their fair SALABLE values on a going
concern basis and the liabilities set forth therein include all contingent
liabilities of Borrowers stated at the reasonably estimated present values
thereof.
3.5 MATERIAL ADVERSE EFFECT. Between December 31, 1997 and the
Closing Date (or such later date as of which this representation and warranty is
made or deemed to be made), (a) no Credit Party has incurred any obligations,
contingent or non-contingent liabilities, liabilities for Charges, long-term
leases or unusual forward or long-term commitments which are not reflected in
the Pro Forma and which, alone or in the aggregate, could reasonably be expected
to have a Material Adverse Effect, (b) no contract, lease or other agreement or
instrument has been entered into by any Credit Party or has become binding upon
any Credit Party's assets and no law or regulation applicable to any Credit
Party has been adopted which has had or could reasonably be expected to have a
Material Adverse Effect, and (c) no Credit Party is in default and to the best
of each Borrowers' knowledge no third party is in default under any material
contract, lease or other agreement or instrument to which any Credit Party is a
party, which alone or in the aggregate could reasonably be expected to have a
Material Adverse Effect. Between December 31, 1997 and the Closing Date (or such
later date as of which this representation and warranty is made or deemed to be
made) no event has occurred, which alone or together with other events, could
reasonably be expected to have a Material Adverse Effect.
3.6 OWNERSHIP OF PROPERTY; LIENS. As of the Closing Date (or
such later date as of which this representation and warranty is made or deemed
to be made), the real estate ("REAL ESTATE") listed on DISCLOSURE SCHEDULE (3.6)
constitutes all of the real property owned, leased, subleased, or used by any
Credit Party. Each Credit Party owns good and marketable fee
simple title to all of its owned real estate, and valid and marketable leasehold
interests in all of its leased Real Estate, all as described on DISCLOSURE
SCHEDULE (3.6), and copies of all such leases or a summary of terms thereof
satisfactory to Administrative Agent have been delivered to Administrative
Agent. DISCLOSURE SCHEDULE (3.6) further describes any Real Estate with respect
to which any Credit Party is a lessor, sublessor or assignor as of the Closing
Date (or such later date as of which this representation and warranty is made or
deemed to be made). Each Credit Party also has good and marketable title to, or
valid leasehold interests in, all of its personal properties and assets. As of
the Closing Date (or such later date as of which this representation and
warranty is made or is deemed to be made), none of the properties and assets of
any Credit Party are subject to any Liens other than Permitted Encumbrances, and
there are no facts, circumstances or conditions known to any Credit Party that
may result in any Liens (including Liens arising under Environmental Laws) other
than Permitted Encumbrances. Each Credit Party has received all deeds,
assignments, waivers, consents, non-disturbance and recognition or similar
agreements, bills of sale and other documents, and has duly effected all
recordings, filings and other actions necessary to establish, protect and
perfect such Credit Party's right, title and interest in and to all such Real
Estate and other properties and assets. DISCLOSURE SCHEDULE (3.6) also describes
any purchase options, rights of first refusal or other similar contractual
rights pertaining to any Real Estate. As of the Closing Date (or such later date
as of which this representation and warranty is made or is deemed to be made),
no portion of any Credit Party's Real Estate has suffered any material damage by
fire or other casualty loss which has not heretofore been repaired and restored
in all material respects to its original condition or otherwise remedied. As of
the Closing Date (or such later date as of which this representation and
warranty is made or is deemed to be made), all material permits required to have
been issued or appropriate to enable the Real Estate to be lawfully occupied and
used for all of the purposes for which they are currently occupied and used have
been lawfully issued and are in full force and effect.
3.7 LABOR MATTERS. As of the Closing Date (or such later date
as of which this representation and warranty is made or is deemed to be made)
(a) no strikes or other material labor disputes against any Credit Party are
pending or, to any Credit Party's knowledge, threatened; (b) hours worked by and
payment made to employees of each Credit Party comply with the Fair Labor
Standards Act and each other federal, state, local or foreign law applicable to
such matter; (c) all payments due from any Credit Party for employee health and
welfare insurance have been paid or accrued as a liability on the books of such
Credit Party; (d) except as set forth in DISCLOSURE SCHEDULE (3.7), no Credit
Party is a party to or bound by any collective bargaining agreement, management
agreement, consulting agreement or any employment agreement (and true and
complete copies of any agreements described on DISCLOSURE SCHEDULE (3.7) have
been delivered to Administrative Agent); (e) there is no organizing activity
involving any Credit Party pending or, to any Credit Party's knowledge,
threatened by any labor union or group of employees; (f) there are no
representation proceedings pending or, to any Credit Party's knowledge,
threatened with the National Labor Relations Board, and no labor organization or
group of employees of any Credit Party has made a pending demand for
recognition; and (g)
except as set forth in DISCLOSURE SCHEDULE (3.7), there are no complaints or
charges against any Credit Party pending or, to the knowledge of any Credit
Party, threatened to be filed with any Governmental Authority or arbitrator
based on, arising out of, in connection with, or otherwise relating to the
employment or termination of employment by any Credit Party of any individual.
3.8 VENTURES, SUBSIDIARIES AND AFFILIATES; OUTSTANDING STOCK
AND INDEBTEDNESS. Except as set forth in DISCLOSURE SCHEDULE (3.8), no Credit
Party has any Subsidiaries, is engaged in any joint venture or partnership with
any other Person, or is an Affiliate of any other Person. All of the issued and
outstanding Stock of each Credit Party is owned by each of the stockholders and
in the amounts set forth on DISCLOSURE SCHEDULE (3.8). Except as set forth on
Disclosure Schedule (3.8) as of the Closing Date, there are no outstanding
rights to purchase, options, warrants or similar rights or agreements pursuant
to which any Credit Party may be required to issue, sell, repurchase or redeem
any of its Stock or other equity securities or any Stock or other equity
securities of its Subsidiaries. All outstanding Indebtedness (other than the
Obligations) of each Credit Party as of the Closing Date is described in SECTION
6.3 (including DISCLOSURE SCHEDULE (6.3)).
3.9 GOVERNMENT REGULATION. No Credit Party is an "investment
company" or an "affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company," as such terms are defined in the Investment
Company Act of 1940 as amended. No Credit Party is subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act, or any
other federal or state statute that restricts or limits its ability to incur
Indebtedness or to perform its obligations hereunder. The making of the Loans by
Lenders to Borrowers, the incurrence of the Letter of Credit Obligations on
behalf of Borrowers, the application of the proceeds thereof and repayment
thereof and the consummation of the Related Transactions will not violate any
provision of any such statute or any rule, regulation or order issued by the
Securities and Exchange Commission.
3.10 MARGIN REGULATIONS. No Credit Party is engaged, nor will
it engage, principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
security" as such terms are defined in Regulation U or G of the Federal Reserve
Board as now and from time to time hereafter in effect (such securities being
referred to herein as "MARGIN STOCK"). No Credit Party owns any Margin Stock,
and none of the proceeds of the Loans or other extensions of credit under this
Agreement will be used, directly or indirectly, for the purpose of purchasing or
carrying any Margin Stock, for the purpose of reducing or retiring any
Indebtedness which was originally incurred to purchase or carry any Margin Stock
or for any other purpose which might cause any of the Loans or other extensions
of credit under this Agreement to be considered a "purpose credit" within the
meaning of Regulation G, T, U or X of the Federal Reserve Board. No Credit Party
will take or permit to be taken any action which might cause any Loan Document
to violate any regulation of the Federal Reserve Board.
3.11 TAXES. All tax returns, reports and statements, including
information returns, required by any Governmental Authority to be filed by any
Credit Party have been filed with the appropriate Governmental Authority and all
Charges have been paid prior to the date on which any fine, penalty, interest or
late charge may be added thereto for nonpayment thereof (or any such fine,
penalty, interest, late charge or loss has been paid), excluding Charges or
other amounts being contested in accordance with SECTION 5.2(B). Proper and
accurate amounts have been withheld by each Credit Party from its respective
employees for all periods in full and complete compliance with all applicable
federal, state, local and foreign law and such withholdings have been timely
paid to the respective Governmental Authorities. DISCLOSURE SCHEDULE (3.11) sets
forth as of the Closing Date (or such later date as of which this representation
and warranty is made or is deemed to be made) those taxable years for which any
Credit Party's tax returns are currently being audited by the IRS or any other
applicable Governmental Authority and any assessments or, to Borrowers'
knowledge, threatened assessments in connection with such audit, or otherwise
currently outstanding. Except as described on DISCLOSURE SCHEDULE (3.11), no
Credit Party has executed or filed with the IRS or any other Governmental
Authority any agreement or other document extending, or having the effect of
extending, the period for assessment or collection of any Charges. None of the
Credit Parties and their respective predecessors are liable for any Charges: (a)
under any agreement (including any tax sharing agreements) or (b) to each Credit
Party's knowledge, as a transferee. As of the Closing Date (or such later date
as of which this representation and warranty is made or is deemed to be made),
no Credit Party has agreed or been requested to make any adjustment under IRC
Section 481(a), by reason of a change in accounting method or otherwise, which
would have a Material Adverse Effect.
3.12 ERISA. (a) DISCLOSURE SCHEDULE (3.12) lists and
separately identifies all Qualified Plans, Title IV Plans, Multiemployer Plans,
ESOPs and Retiree Welfare Plans. Copies of all such listed Plans, together with
a copy of the latest form 5500 for each such Plan, have been delivered to
Administrative Agent. Except with respect to Multiemployer Plans, each Qualified
Plan has been determined by the IRS to qualify under Section 401 of the IRC, and
the trusts created thereunder have been determined to be exempt from tax under
the provisions of Section 501 of the IRC, and nothing has occurred which would
cause the loss of such qualification or tax-exempt status. Each Plan is in
compliance with the applicable provisions of all applicable laws, including the
filing of reports required under the IRC or ERISA. No Credit Party or ERISA
Affiliate has failed to make any contribution or pay any amount due as required
by either Section 412 of the IRC or Section 302 of ERISA or the terms of any
such Plan. No Credit Party or ERISA Affiliate has engaged in a prohibited
transaction, as defined in Section 4975 of the IRC, in connection with any Plan,
which would subject any Credit Party to a material tax or penalty on prohibited
transactions imposed by Section 4975 of the IRC or Section 502(i) of ERISA.
(b) Except as set forth in DISCLOSURE SCHEDULE (3.12): (i) no
Title IV Plan has any Unfunded Pension Liability; (ii) no ERISA Event or event
described in Section 4062(e) of
ERISA with respect to any Title IV Plan has occurred or is reasonably expected
to occur; (iii) there are no pending, or to the knowledge of any Credit Party,
threatened claims (other than claims for benefits in the normal course),
sanctions, actions or lawsuits, asserted or instituted against any Plan or any
Person as fiduciary or sponsor of any Plan; (iv) no Credit Party or ERISA
Affiliate has incurred or reasonably expects to incur any liability as a result
of a complete or partial withdrawal from a Multiemployer Plan; (v) within the
last five years no Title IV Plan with Unfunded Pension Liabilities has been
transferred outside of the "controlled group" (within the meaning of Section
4001(a)(14) of ERISA) of any Credit Party or ERISA Affiliate; and (vi) no
liability under any Title IV Plan has been satisfied with the purchase of a
contract from an insurance company that is not rated AAA by the Standard &
Poor's Corporation or the equivalent by another nationally recognized rating
agency.
3.13 NO LITIGATION. As of the Closing Date, no action, claim,
lawsuit, demand, investigation or proceeding is now pending or, to the knowledge
of any Credit Party, threatened against any Credit Party, before any
Governmental Authority or before any arbitrator or panel of arbitrators
(collectively, "LITIGATION"), (a) which challenges any Credit Party's right or
power to enter into or perform any of its obligations under the Loan Documents
to which it is a party, or the validity or enforceability of any Loan Document
or any action taken thereunder, or (b) which has a reasonable risk of being
determined adversely to any Credit Party and which, if so determined, could have
a Material Adverse Effect. Except as set forth on DISCLOSURE SCHEDULE (3.13), as
of the Closing Date (or such later date as of which this representation and
warranty is made or is deemed to be made) there is no Litigation pending or
threatened which seeks damages in excess of $100,000 or injunctive relief or
alleges criminal misconduct of any Credit Party.
3.14 BROKERS. No broker or finder acting on behalf of any
Credit Party brought about the obtaining, making or closing of the Loans or the
Related Transactions, and no Credit Party has any obligation to any Person in
respect of any finder's or brokerage fees in connection therewith.
3.15 INTELLECTUAL PROPERTY. As of the Closing Date (or such
later date as of which this representation and warranty is made or is deemed to
be made), each Credit Party owns or has rights to use all Intellectual Property
necessary to continue to conduct its business as now or heretofore conducted by
it or proposed to be conducted by it, and each Patent, Trademark, Copyright and
License is listed, together with application or registration numbers, as
applicable, in DISCLOSURE SCHEDULE (3.15) hereto. To its knowledge, each Credit
Party conducts its business and affairs without infringement of or interference
with any Intellectual Property of any other Person.
3.16 FULL DISCLOSURE. No information contained in this
Agreement, any of the other Loan Documents, any Projections, Financial
Statements or Collateral Reports or other reports from time to time delivered
hereunder or any written statement furnished by or on behalf of any Credit Party
to Administrative Agent, Revolver Agent or any Lender pursuant to the terms
of this Agreement contains or will contain any untrue statement of a material
fact or omits or will omit to state a material fact necessary to make the
statements contained herein or therein not misleading in light of the
circumstances under which they were made. The Liens granted to Administrative
Agent, on behalf of itself, Revolver Agent and Lenders, pursuant to the
Collateral Documents will at all times be fully perfected first priority Liens
in and to the Collateral described therein, subject, as to priority, only to
Permitted Encumbrances with respect to the Collateral other than Accounts,
Inventory and Lease Receivables.
3.17 ENVIRONMENTAL MATTERS. (a) Except as set forth in
DISCLOSURE SCHEDULE (3.17), as of the Closing Date: (i) the Real Estate is free
of contamination from any Hazardous Material except for such contamination that
would not adversely impact the value or marketability of such Real Estate and
which would not result in Environmental Liabilities which could reasonably be
expected to exceed $150,000; (ii) no Credit Party has caused or suffered to
occur any Release of Hazardous Materials on, at, in, under, above, to, from or
about any of its Real Estate; (iii) the Credit Parties are and have been in
compliance with all Environmental Laws, except for such noncompliance which
would not result in Environmental Liabilities which could reasonably be expected
to exceed $150,000; (iv) the Credit Parties have obtained, and are in compliance
with, all Environmental Permits required by Environmental Laws for the
operations of their respective businesses as presently conducted or as proposed
to be conducted, except where the failure to so obtain or comply with such
Environmental Permits would not result in Environmental Liabilities which could
reasonably be expected to exceed $150,000, and all such Environmental Permits
are valid, uncontested and in good standing; (v) no Credit Party is involved in
operations or knows of any facts, circumstances or conditions, including any
Releases of Hazardous Materials, that are likely to result in any Environmental
Liabilities of such Credit Party which could reasonably be expected to exceed
$150,000, and no Credit Party has permitted any current or former tenant or
occupant of the Real Estate to engage in any such operations; (vi) there is no
Litigation arising under or related to any Environmental Laws, Environmental
Permits or Hazardous Material which seeks damages, penalties, fines, costs or
expenses in excess of $150,000 or injunctive relief, or which alleges criminal
misconduct by any Credit Party; (vii) no notice has been received by any Credit
Party identifying it as a "potentially responsible party" or requesting
information under CERCLA or analogous state statutes, and to the knowledge of
the Credit Parties, there are no facts, circumstances or conditions that may
result in any Credit Party being identified as a "potentially responsible party"
under CERCLA or analogous state statutes; and (viii) the Credit Parties have
provided to Administrative Agent copies of all existing environmental reports,
reviews and audits and all written information pertaining to actual or potential
Environmental Liabilities, in each case relating to any Credit Party.
(b) Each Credit Party hereby acknowledges and agrees that
Administrative Agent (i) is not now, and has not ever been, in control of any of
the Real Estate or any Credit Party's affairs, and (ii) does not have the
capacity through the provisions of the Loan Documents or otherwise to influence
any Credit Party's conduct with respect to the ownership, operation or
management of any of its Real Estate or compliance with Environmental Laws or
Environmental Permits.
3.18 INSURANCE. DISCLOSURE SCHEDULE (3.18) lists all insurance
policies of any nature maintained, as of the Closing Date, for current
occurrences by each Credit Party, as well as a summary of the terms of each such
policy.
3.19 DEPOSIT AND DISBURSEMENT ACCOUNTS. DISCLOSURE SCHEDULE
(3.19) lists all banks and other financial institutions at which any Credit
Party maintains deposits and/or other accounts as of the Closing Date, including
any Disbursement Accounts, and such Schedule correctly identifies the name,
address and telephone number of each depository, the name in which the account
is held, a description of the purpose of the account, and the complete account
number.
3.20 GOVERNMENT CONTRACTS. Except as set forth in DISCLOSURE
SCHEDULE (3.20), as of the Closing Date, no Credit Party is a party to any
contract or agreement with any Governmental Authority and no Credit Party's
Accounts or Lease Receivables are subject to the Federal Assignment of Claims
Act, as amended (31 U.S.C. Section 3727) or any similar state or local law.
3.21 CUSTOMER AND TRADE RELATIONS. As of the Closing Date,
there exists no actual or, to the knowledge of any Credit Party, threatened
termination or cancellation of, or any material adverse modification or change
in: the business relationship of any Credit Party with any customer or group of
customers whose purchases during the preceding twelve (12) months caused them to
be ranked among the ten largest customers of such Credit Party; or the business
relationship of any Credit Party with any supplier material to its operations.
3.22 AGREEMENTS AND OTHER DOCUMENTS. As of the Closing Date,
each Credit Party has provided to Administrative Agent or its counsel, on behalf
of Lenders, accurate and complete copies (or summaries) of all of the following
agreements or documents to which any it is subject and each of which are listed
on DISCLOSURE SCHEDULE (3.22): supply agreements and purchase agreements not
terminable by such Credit Party within sixty (60) days following written notice
issued by such Credit Party and involving transactions in excess of $500,000 per
annum; any lease of Equipment having a remaining term of one year or longer and
requiring aggregate rental and other payments in excess of $500,000 per annum;
licenses and permits held by the Credit Parties, the absence of which could be
reasonably likely to have a Material Adverse Effect; instruments or documents
evidencing Indebtedness of such Credit Party and any security interest granted
by such Credit Party with respect thereto.
3.23 SOLVENCY. Both before and after giving effect to (a) the
Loans and Letter of Credit Obligations to be made or extended on the Closing
Date or such other date as Loans and Letter of Credit Obligations requested
hereunder are made or extended, (b) the disbursement
of the proceeds of such Loans pursuant to the instructions of Borrower
Representative, (c) the Refinancing and the consummation of the other Related
Transactions and (d) the payment and accrual of all transaction costs in
connection with the foregoing, each Credit Party is Solvent.
3.24 SUBORDINATED DEBT. As of the Closing Date (or such later
date as of which this representation and warranty is made or is deemed to be
made), Borrowers have delivered to Administrative Agent a complete and correct
copy of the Subordinated Notes (including all schedules, exhibits, amendments,
supplements, modifications, assignments and all other documents delivered
pursuant thereto or in connection therewith). Each of the makers of the
Subordinated Notes has the corporate power and authority to incur the
Indebtedness evidenced by their respective Subordinated Note. The subordination
provisions of the Subordinated Notes are enforceable against the holders of the
Subordinated Notes by Administrative Agent and Lenders. All Obligations,
including the Obligations to pay principal of and interest on the Loans and the
Letter of Credit Obligations, constitute senior Indebtedness entitled to the
benefits of the subordination provisions contained in the Subordinated Notes.
The principal of and interest on the Notes, all Letter of Credit Obligations and
all other Obligations will constitute "senior debt" as that or any similar term
is or may be used in any other instrument evidencing or applicable to any other
Subordinated Debt. Borrowers acknowledge that Administrative Agent, Revolver
Agent and each Lender are entering into this Agreement and are extending the
Commitments in reliance upon the subordination provisions of the Subordinated
Notes and this SECTION 3.24.
4. FINANCIAL STATEMENTS AND INFORMATION
4.1 REPORTS AND NOTICES. (a) Each Credit Party executing this
Agreement hereby agrees that from and after the Closing Date and until the
Termination Date, it shall deliver to Administrative Agent, Revolver Agent
and/or Lenders, as required, the Financial Statements, notices, Projections and
other information at the times, to the Persons and in the manner set forth in
ANNEX E.
(b) Each Credit Party executing this Agreement hereby agrees
that from and after the Closing Date and until the Termination Date, it shall
deliver to Administrative Agent, Revolver Agent and/or Lenders, as required, the
various Collateral Reports (including Borrowing Base Certificates in the form of
EXHIBIT 4.1(B)) at the times, to the Persons and in the manner set forth in
ANNEX F.
4.2 COMMUNICATION WITH ACCOUNTANTS. Each Credit Party
executing this Agreement authorizes Administrative Agent and Revolver Agent and,
so long as a Default or Event of Default shall have occurred and be continuing,
each Lender, to communicate directly with its independent certified public
accountants, including Pricewaterhouse Coopers LLP, and authorizes and shall
instruct those accountants and advisors to disclose and make available to
Administrative Agent, Revolver Agent and each Lender any and all Financial
Statements and other supporting financial documents, schedules and information
relating to any Credit Party
(including copies of any issued management letters) with respect to the
business, financial condition and other affairs of any Credit Party as may be
reasonably requested by Administrative Agent, Revolver Agent or any Lender from
time to time.
5. AFFIRMATIVE COVENANTS
Each Credit Party executing this Credit Agreement jointly and
severally agrees as to all Credit Parties that from and after the date hereof
and until the Termination Date:
5.1 MAINTENANCE OF EXISTENCE AND CONDUCT OF BUSINESS. Each
Credit Party shall: do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence and its rights and
franchises; continue to conduct its business substantially as now conducted or
as otherwise permitted hereunder; at all times maintain, preserve and protect
all of its assets and properties used or useful in the conduct of its business,
and keep the same in good repair, working order and condition in all material
respects (taking into consideration ordinary wear and tear) and from time to
time make, or cause to be made, all necessary or appropriate repairs,
replacements and improvements thereto consistent with industry practices; and
transact business only in such corporate and trade names as are set forth in
DISCLOSURE SCHEDULE (5.1).
5.2 PAYMENT OF OBLIGATIONS. (a) Subject to SECTION 5.2(B),
each Credit Party shall pay and discharge or cause to be paid and discharged
promptly all Charges payable by it, including (A) Charges imposed upon it, its
income and profits, or any of its property (real, personal or mixed) and all
Charges with respect to tax, social security and unemployment withholding with
respect to its employees, and (B) lawful claims for labor, materials, supplies
and services or otherwise, before any thereof shall become past due.
(b) Each Credit Party may in good faith contest, by
appropriate proceedings, the validity or amount of any Charges described in
SECTION 5.2(A); PROVIDED, that (i) adequate reserves with respect to such
contest are maintained on the books of such Credit Party, in accordance with
GAAP, (ii) no Lien shall be imposed to secure payment of such Charges that is
superior to any of the Liens securing the Obligations and such contest is
maintained and prosecuted continuously and with diligence and operates to
suspend collection or enforcement of such Charges, (iii) none of the Collateral
becomes subject to forfeiture or loss as a result of such contest, (iv) such
Credit Party shall promptly pay or discharge such contested Charges or claims
and all additional charges, interest, penalties and expenses, if any, and shall
deliver to Administrative Agent evidence acceptable to Administrative Agent of
such compliance, payment or discharge, if such contest is terminated or
discontinued adversely to such Credit Party or the conditions set forth in this
SECTION 5.2(B) are no longer met, and (v) Administrative Agent has not advised
Borrowers in writing that Administrative Agent reasonably believes that
nonpayment or nondischarge thereof could have or result in a Material Adverse
Effect.
5.3 BOOKS AND RECORDS. Each Credit Party shall keep adequate
books and records with respect to its business activities in which proper
entries, reflecting all financial transactions, are made in accordance with GAAP
and on a basis consistent with the Financial Statements attached as DISCLOSURE
SCHEDULE (3.4(A)).
5.4 INSURANCE; DAMAGE TO OR DESTRUCTION OF COLLATERAL. (a) The
Credit Parties shall, at their sole cost and expense, insure and keep insured in
good and responsible insurance companies and in amounts reasonably satisfactory
to the Administrative Agent, all insurable property owned by each of them which
is of a character usually insured by companies similarly situated and operating
like properties, against loss or damage from such hazards or risks, including
fire, as are insured by companies similarly situated and operating like
properties, insure and keep insured employers' and public liability risks in
good and responsible insurance companies of the types and in the amounts usually
insured by companies similarly situated; maintain such other insurance as may be
required by law or as may reasonably be required in writing by Administrative
Agent. Without limiting the generality of the foregoing, the Credit Parties
shall maintain the policies of insurance described on DISCLOSURE SCHEDULE (3.18)
as in effect on the date hereof or otherwise in form and amounts and with
insurers acceptable to Administrative Agent. If any Credit Party at any time or
times hereafter shall fail to obtain or maintain any of the policies of
insurance required above or to pay all premiums relating thereto, Administrative
Agent may at any time or times thereafter obtain and maintain such policies of
insurance and pay such premiums and take any other action with respect thereto
which Administrative Agent deems advisable. Administrative Agent shall have no
obligation to obtain insurance for any Credit Party or pay any premiums
therefor. By doing so, Administrative Agent shall not be deemed to have waived
any Default or Event of Default arising from any Credit Party's failure to
maintain such insurance or pay any premiums therefor. All sums so disbursed,
including attorneys' fees, court costs and other charges related thereto, shall
be payable by Borrowers to Administrative Agent on demand by Administrative
Agent and shall be additional Obligations hereunder secured by the Collateral.
(b) If requested by Administrative Agent, each Credit Party
shall deliver to Administrative Agent as may be reasonably requested by
Administrative Agent from time to time a report of a reputable insurance broker,
reasonably satisfactory to Administrative Agent, with respect to its insurance
policies.
(c) Each Credit Party shall deliver to Administrative Agent,
in form and substance satisfactory to Administrative Agent, endorsements to (i)
all "All Risk" and business interruption insurance naming Administrative Agent,
on behalf of itself, Revolver Agent and Lenders, as loss payee, and (ii) all
general liability and other liability policies naming Administrative Agent, on
behalf of itself, Revolver Agent and Lenders, as additional insured. Each Credit
Party irrevocably makes, constitutes and appoints Administrative Agent (and all
officers, employees or agents designated by Administrative Agent), so long as
any Default or Event of Default shall have occurred and be continuing or the
anticipated insurance proceeds
exceed $150,000, as such Credit Party's true and lawful agent and
attorney-in-fact for the purpose of making, settling and adjusting claims under
such "All Risk" policies of insurance, endorsing the name of such Credit Party
on any check or other item of payment for the proceeds of such "All Risk"
policies of insurance and for making all determinations and decisions with
respect to such "All Risk" policies of insurance. Administrative Agent shall
have no duty to exercise any rights or powers granted to it pursuant to the
foregoing power-of-attorney. Borrower Representative shall promptly notify
Administrative Agent of any loss, damage, or destruction to the Collateral in
the amount of $150,000 or more, whether or not covered by insurance. After
deducting from such proceeds the expenses, if any, incurred by Administrative
Agent in the collection or handling thereof, Administrative Agent may, at its
option, apply such proceeds to the reduction of the Obligations in accordance
with SECTION 1.3(D); or permit or require the applicable Credit Party to use
such money, or any part thereof, to replace, repair, restore or rebuild the
Collateral in a diligent and expeditious manner with materials and workmanship
of substantially the same quality as existed before the loss, damage or
destruction. Notwithstanding the foregoing, if the casualty giving rise to such
insurance proceeds would not reasonably be expected to have a Material Adverse
Effect and such insurance proceeds do not exceed $150,000 in the aggregate and
provided that no Default or Event of Default shall have occurred and be
continuing, Administrative Agent shall permit the applicable Credit Party to
replace, restore, repair or rebuild the property; PROVIDED that if such Credit
Party shall not have completed or entered into binding agreements to complete
such replacement, restoration, repair or rebuilding within 120 days of such
casualty, Administrative Agent may apply such insurance proceeds to the
Obligations in accordance with SECTION 1.3(D). All insurance proceeds which are
to be made available to any Borrower to replace, repair, restore or rebuild the
Collateral shall be applied by Administrative Agent to reduce the outstanding
principal balance of the Revolving Loan (Revolver B) and then to the outstanding
principal balance of the Revolving Loan (Revolver A) (which application shall
not result in a permanent reduction of the Revolving Loan Commitment (Revolver
B) or Revolving Loan Commitment (Revolver A), as the case may be) and upon such
application, Administrative Agent shall establish a Reserve against the
Borrowing Base (Revolver B) and Borrowing Base (Revolver A), as the case may be
in an amount equal to the amount of such proceeds so applied. Thereafter, such
funds shall be made available to that Credit Party to provide funds to replace,
repair, restore or rebuild the Collateral as follows: (i) Borrower
Representative shall request a Revolving Credit Advance be made to such Credit
Party in the amount requested to be released; (ii) so long as the conditions set
forth in SECTION 2.2 have been met, Revolving Lenders shall make such Revolving
Credit Advance; and (iii) in the case of insurance proceeds applied against
either Revolving Loan, the Reserve established with respect to such insurance
proceeds shall be reduced by the amount of the applicable Revolving Credit
Advance. To the extent not used to replace, repair, restore or rebuild the
Collateral, such insurance proceeds shall be applied in accordance with SECTION
1.3(D).
5.5 COMPLIANCE WITH LAWS. Each Credit Party shall comply with
all federal, state, local and foreign laws and regulations applicable to it,
including those relating to ERISA and labor matters and Environmental Laws and
Environmental Permits, except to the extent that
the failure to comply, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
5.6 SUPPLEMENTAL DISCLOSURE. From time to time as may be
reasonably requested by Administrative Agent (which request will not be made
more frequently than once each year absent the occurrence and continuance of a
Default or an Event of Default) or as may be deemed by any Credit Party to be
necessary, the Credit Parties shall supplement each Disclosure Schedule hereto,
or any representation herein or in any other Loan Document, with respect to any
matter hereafter arising which, if existing or occurring at the date of this
Agreement, would have been required to be set forth or described in such
Disclosure Schedule or as an exception to such representation or which is
necessary to correct any information in such Disclosure Schedule or
representation which has been rendered inaccurate thereby (and, in the case of
any supplements to any Disclosure Schedule, such Disclosure Schedule shall be
appropriately marked to show the changes made therein); provided that (a) no
such supplement to any such Disclosure Schedule or representation shall be or be
deemed a waiver of any Default or Event of Default resulting from the matters
disclosed therein, except as consented to by Administrative Agent and Requisite
Lenders in writing; and (b) no supplement shall be required as to
representations and warranties that relate solely to the Closing Date.
5.7 INTELLECTUAL PROPERTY. Each Credit Party will conduct its
business and affairs without infringement of or interference with any
Intellectual Property of any other Person in any material respect.
5.8 ENVIRONMENTAL MATTERS. Each Credit Party shall and shall
cause each Person within its control to: (a) conduct its operations and keep and
maintain its Real Estate in compliance with all Environmental Laws and
Environmental Permits other than noncompliance which could not reasonably be
expected to have a Material Adverse Effect; (b) implement any and all
investigation, remediation, removal and response actions which are appropriate
or necessary to maintain the value and marketability of the Real Estate or to
otherwise comply with Environmental Laws and Environmental Permits pertaining to
the presence, generation, treatment, storage, use, disposal, transportation or
Release of any Hazardous Material on, at, in, under, above, to, from or about
any of its Real Estate; (c) notify Administrative Agent promptly after such
Credit Party becomes aware of any violation of Environmental Laws or
Environmental Permits or any Release on, at, in, under, above, to, from or about
any Real Estate which is reasonably likely to result in Environmental
Liabilities in excess of $150,000; and (d) promptly forward to Administrative
Agent a copy of any order, notice, request for information or any communication
or report received by such Credit Party in connection with any such violation or
Release or any other matter relating to any Environmental Laws or Environmental
Permits that could reasonably be expected to result in Environmental Liabilities
in excess of $150,000, in each case whether or not the Environmental Protection
Agency or any Governmental Authority has taken or threatened any action in
connection with any such violation, Release or other matter. If Administrative
Agent at any time has a reasonable basis to believe that there may be a
violation of any Environmental Laws or Environmental Permits by any Credit Party
or any Environmental Liability arising thereunder, or a Release of Hazardous
Materials on, at, in, under, above, to, from or about any of its Real Estate,
which, in each case, could reasonably be expected to have a Material Adverse
Effect (in each such case, a "Hazardous Condition"), then each Credit Party
shall, upon Administrative Agent's written request (i) cause the performance of
such environmental audits including subsurface sampling of soil and groundwater,
and preparation of such environmental reports, at Borrowers' expense, as
Administrative Agent may from time to time reasonably request, which shall be
conducted by reputable environmental consulting firms reasonably acceptable to
Administrative Agent and shall be in form and scope acceptable to Administrative
Agent, and (ii) permit Administrative Agent or its representatives to have
access to all Real Estate for the purpose of conducting such environmental
audits and testing as Administrative Agent deems appropriate, including
subsurface sampling of soil and groundwater. Borrowers shall reimburse
Administrative Agent for the costs of such audits and tests and the same will
constitute a part of the Obligations secured hereunder. Without limiting the
generality of the foregoing, whether or not Administrative Agent has a
reasonable basis to believe that a Hazardous Condition may exist, each Credit
Party shall, upon Administrative Agent's written request (provided that such
request shall be made no more frequently than twice each calendar year if
Administrative Agent has no reasonable basis to believe that a Hazardous
Condition exists), (i) cause the performance of such environmental audits
including subsurface sampling of soil and groundwater, and preparation of such
environmental reports, at Borrowers' expense, as Administrative Agent may from
time to time reasonably request, which shall be conducted by reputable
environmental consulting firms reasonably acceptable to Administrative Agent and
shall be in form and scope acceptable to Administrative Agent, and (ii) permit
Administrative Agent or its representatives to have access to all Real Estate
for the purpose of conducting such environmental audits and testing as
Administrative Agent deems appropriate, including subsurface sampling of soil
and groundwater. Borrowers shall reimburse Administrative Agent for the costs of
such audits and tests and the same will constitute a part of the Obligations
secured hereunder.
5.9 LANDLORDS' AGREEMENTS, MORTGAGEE AGREEMENTS AND BAILEE
LETTERS. Each Credit Party shall obtain a landlord's agreement, mortgagee
agreement or bailee letter, as applicable, from the lessor of each leased
property or mortgagee of owned property or with respect to any warehouse,
processor or converter facility or other location where Collateral is located,
which agreement or letter shall contain a waiver or subordination of all Liens
or claims that the landlord, mortgagee or bailee may assert against the
Inventory or Collateral at that location, and shall otherwise be reasonably
satisfactory in form and substance to Administrative Agent. Each such landlord's
agreement shall be substantially in the form of Exhibit F attached hereto and
made a part hereof or in such other form as may be in form and substance
reasonably acceptable to Administrative Agent. With respect to such locations or
warehouse space leased or owned as of the Closing Date and thereafter, if
Administrative Agent has not received a landlord or mortgagee agreement or
bailee letter as of the Closing Date (or, if later, as of the date such location
is acquired or leased), any Borrower's Eligible Inventory at that location
shall, in
Administrative Agent's or Revolver Agent's discretion, be excluded from the
Borrowing Base or be subject to such Reserves as may be established by
Administrative Agent or Revolver Agent in their reasonable credit judgment.
After the Closing Date, no real property or warehouse space shall be leased or
acquired by any Credit Party and no Inventory shall be shipped to a processor or
converter under arrangements established after the Closing Date without the
prior written consent of Administrative Agent (which consent, in Administrative
Agent's discretion, may be conditioned upon the exclusion from the Borrowing
Base of Eligible Inventory at that location or the establishment of Reserves
acceptable to Administrative Agent or Revolver Agent) or, unless and until a
satisfactory landlord or mortgagee agreement or bailee letter, as appropriate,
shall first have been obtained with respect to such location. Each Credit Party
shall timely and fully pay and perform in all material respects its obligations
under all leases and other agreements with respect to each leased location or
public warehouse where any Collateral is or may be located.
5.10 FURTHER ASSURANCES. Each Credit Party executing this
Agreement agrees that it shall and shall cause each other Credit Party to, at
such Credit Party's expense and upon request of Administrative Agent, duly
execute and deliver, or cause to be duly executed and delivered, to
Administrative Agent such further instruments and do and cause to be done such
further acts as may be necessary or proper in the reasonable opinion of
Administrative Agent to carry out more effectively the provisions and purposes
of this Agreement or any other Loan Document.
5.11 YEAR 2000 PROBLEMS. On or prior to December 31, 1998,
each Credit Party shall complete and deliver to Administrative Agent a Year 2000
Assessment, and on or prior to January 31, 1999, each Credit Party shall
complete and deliver to Administrative Agent a Year 2000 Corrective Plan. On or
prior to February 28, 1999, each Credit Party shall implement Year 2000
Corrective Actions. On or before March 31, 1999, each Credit Party shall
complete Year 2000 Corrective Actions and Year 2000 Implementation Testing. On
or before March 31, 1999, each Credit Party shall eliminate all Year 2000
Problems, except where the failure to correct the same could not reasonably be
expected to have a Material Adverse Effect, individually or in the aggregate.
6. NEGATIVE COVENANTS
Each Credit Party executing this Agreement jointly and
severally agrees as to all Credit Parties that, without the prior written
consent of Administrative Agent and the Requisite Lenders, from and after the
date hereof until the Termination Date:
6.1 MERGERS, SUBSIDIARIES, ETC. No Credit Party shall directly
or indirectly, by operation of law or otherwise, (a) form or acquire any
Subsidiary, or (b) merge with, consolidate with, acquire all or substantially
all of the assets or capital stock of, or otherwise combine with or acquire, any
Person, except that (1) any Borrower may merge with another Borrower, PROVIDED
that Borrower Representative shall be the survivor of any such merger to which
it is a party, and
(2) Borrowers shall be permitted to consummate each of the Bes-Pac Acquisition
in accordance with the provisions of the Bes-Pac Acquisition Agreement and the
▇▇▇▇▇▇ Acquisition in accordance with the provisions SECTION 2.3, and (3)
Borrower shall be permitted to consummate the Acme Chute Acquisition in
accordance with the terms of the Acme Chute Acquisition Agreement; provided that
the cash purchase price therefor does not exceed $600,000 and the Acme Chute
Acquisition otherwise qualifies as a Permitted Acquisition (except in respect of
the criteria set forth in CLAUSES (I)(provided that Administrative Agent shall
receive at least five (5) Business Days' prior written notice of such proposed
Acquisition), (v), (VI), and (X) of this SECTION 6.1. Notwithstanding the
foregoing, any Borrower may acquire all or substantially all of the assets or
capital Stock of any Person (the "TARGET") (other than Bes-Pac, ▇▇▇▇▇▇ and Acme
Chute), or form a Subsidiary to acquire all or substantially all of the assets
or capital Stock of any Target (an "ACQUISITION SUBSIDIARY") (in each case, a
"PERMITTED ACQUISITION") subject to the satisfaction of each of the following
conditions:
(i) Administrative Agent shall receive at least
thirty (30) Business Days' prior written notice of such proposed Permitted
Acquisition, which notice shall include a reasonably detailed description of
such proposed Permitted Acquisition;
(ii) such Permitted Acquisition shall only involve
assets located in the United States and/or Canada and comprising a business, or
those assets of a business, of the type engaged in by Borrowers as of the
Closing Date, and which business would not subject Administrative Agent,
Revolver Agent or any Lender to regulatory or third party approvals in
connection with the exercise of its rights and remedies under this Agreement or
any other Loan Documents other than approvals applicable to the exercise of such
rights and remedies with respect to Borrowers prior to such Permitted
Acquisition;
(iii) such Permitted Acquisition shall be consensual
and shall have been approved by the Target's board of directors;
(iv) no additional Indebtedness, Guaranteed
Indebtedness, contingent obligations or other liabilities shall be incurred,
assumed or otherwise be reflected on a consolidated balance sheet of Borrowers
and Target after giving effect to such Permitted Acquisition, except (A) Loans
made hereunder and (B) ordinary course trade payables, accrued expenses and
unsecured Indebtedness of the Target to the extent no Default or Event of
Default shall have occurred and be continuing or would result after giving
effect to such Permitted Acquisition;
(v) the sum of all amounts payable in connection with
all Permitted Acquisitions (other than the Bes-Pac Acquisition, the Acme Chute
Acquisition and the ▇▇▇▇▇▇ Acquisition) (including all transaction costs and all
Indebtedness, liabilities and contingent obligations incurred or assumed in
connection therewith or otherwise reflected in a consolidated balance sheet of
Borrowers and Target) shall not exceed $8,000,000;
(vi) the Target shall not have incurred an operating
loss for the trailing twelve-month period preceding the date of the Permitted
Acquisition, as determined based upon the Target's Financial Statements for its
most recently completed fiscal year and its most recent interim financial period
completed within sixty (60) days prior to the date of consummation of such
Permitted Acquisition;
(vii) the business and assets acquired in such
Permitted Acquisition shall be free and clear of all Liens (other than Permitted
Encumbrances);
(viii) at or prior to the closing of any Permitted
Acquisition, Administrative Agent will be granted a first priority perfected
Lien (subject to Permitted Encumbrances) in all assets acquired pursuant thereto
or in the assets and capital Stock of the Target (to the extent not merged with
or into an Acquisition Subsidiary) and, if any, the applicable Acquisition
Subsidiary, and Borrowers, the Target and, if any, the applicable Acquisition
Subsidiary shall have executed such documents and taken such actions as may be
reasonably required by Administrative Agent in connection therewith;
(ix) Concurrently with delivery of the notice
referred to in CLAUSE (I) above, Borrowers shall have delivered to
Administrative Agent, in form and substance satisfactory to Administrative
Agent:
(a) a pro forma consolidated balance sheet,
income statement and cash flow statement of Borrowers and
their Subsidiaries (the "ACQUISITION PRO FORMA"), based on
recent financial statements, which shall be complete and shall
fairly present in all material respects the assets,
liabilities, financial condition and results of operations of
Borrowers and their Subsidiaries in accordance with GAAP
consistently applied, but taking into account such Permitted
Acquisition and the funding of all Loans in connection
therewith, and such Acquisition Pro Forma shall reflect that
on a pro forma basis, no Event of Default shall have occurred
and be continuing or would result after giving effect to such
Permitted Acquisition and Borrowers would have been in
compliance with the financial covenants set forth in ANNEX G
for the four quarter period reflected in the Compliance
Certificate most recently delivered to Administrative Agent
pursuant to ANNEX E prior to the consummation of such
Permitted Acquisition (giving effect to such Permitted
Acquisition and all Loans funded in connection therewith as if
made on the first day of such period);
(b) updated versions of the most recently
delivered Projections covering the one (1) year period
commencing on the date of such Permitted Acquisition and
otherwise prepared in accordance with the Projections (the
"ACQUISITION PROJECTIONS") and based upon historical financial
data of a recent
date satisfactory to Administrative Agent, taking into account
such Permitted Acquisition; and
(c) a certificate of the chief financial
officer of each Borrower to the effect that: (w) each Borrower
(after taking into consideration all rights of contribution
and indemnity such Borrower has against each other Borrower)
will be Solvent upon the consummation of the Permitted
Acquisition; (x) the Acquisition Pro Forma fairly presents the
financial condition of Borrowers (on a consolidated basis) as
of the date thereof after giving effect to the Permitted
Acquisition; (y) the Acquisition Projections are reasonable
estimates of the future financial performance of Borrowers
subsequent to the date thereof based upon the historical
performance of Borrowers and the Target and show that
Borrowers shall continue to be in compliance with the
financial covenants set forth in ANNEX G for the three (3)
year period thereafter, PROVIDED THAT, the Lenders acknowledge
that there can be no assurance that the projections contained
in the Acquisition Projections will be realized or that actual
events will not result in variations from such projections;
PROVIDED FURTHER THAT such acknowledgment shall in no event be
deemed or construed as a waiver of or consent by
Administrative Agent, Revolver Agent or any of the Lenders to
any non-compliance by the Credit Parties, or any of them, with
any covenant, term or condition of this Agreement or any of
the Loan Documents or the failure of the representations and
warranties contained in this SECTION 6.1(IX)(C) to be true and
correct; and (z) Borrowers have completed their due diligence
investigation (including, without limitation, an environmental
audit and assessment) with respect to the Target and such
Permitted Acquisition, which investigation was conducted in a
manner similar to that which would have been conducted by a
prudent purchaser of a comparable business and the results of
which investigation were delivered to Administrative Agent and
Lenders and are satisfactory to Administrative Agent and
Requisite Lenders in all respects;
(x) at least fifteen (15) Business Days prior to the
date of such Permitted Acquisition, Administrative Agent shall have received, in
form and substance satisfactory to Administrative Agent, copies of the
acquisition agreement and related agreements and instruments, and all opinions,
certificates, lien search results and other documents reasonably requested by
Administrative Agent, the terms of which and the form and substance of which
shall be, in all respects, satisfactory to Administrative Agent and the
Requisite Lenders; and
(xi) at the time of such Permitted Acquisition and
after giving effect thereto, no Default or Event of Default shall have occurred
and be continuing.
Notwithstanding the foregoing, the Accounts, Inventory and
Lease Receivables of the Target shall not be included in Eligible Accounts,
Eligible Inventory and Eligible Lease
Receivables without the prior written consent of Administrative Agent, Revolver
Agent and Requisite Lenders.
6.2 INVESTMENTS; LOANS AND ADVANCES. Except as otherwise
expressly permitted by this SECTION 6, no Credit Party shall make or permit to
exist any investment in, or make, accrue or permit to exist loans or advances of
money to, any Person, through the direct or indirect lending of money, holding
of securities or otherwise, except that (a) Borrowers may hold investments
comprised of notes payable, or stock or other securities issued by Account
Debtors to any Borrower pursuant to negotiated agreements with respect to
settlement of such Account Debtor's Accounts in the ordinary course of business,
so long as the aggregate amount of such Accounts so settled by Borrowers does
not exceed $100,000; (b) each Credit Party may maintain its existing investments
in its Subsidiaries as of the Closing Date; (c) Borrowers may make investments
not to exceed $8,000,000 in the aggregate in Permitted Acquisitions (other than
the Bes-Pac Acquisition, the Acme Chute Acquisition and the ▇▇▇▇▇▇ Acquisition);
(d) so long as no Default or Event of Default shall have occurred and be
continuing and there is no balance outstanding pursuant to the Revolving Loans,
Borrowers may make investments up to $250,000 in the aggregate, subject to
Control Letters in favor of Administrative Agent for the benefit of Lenders or
otherwise subject to a perfected security interest in favor of Administrative
Agent for the benefit of Lenders, in (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency thereof
maturing within one year from the date of acquisition thereof, (ii) commercial
paper maturing no more than one year from the date of creation thereof and
currently having the highest rating obtainable from either Standard & Poor's
Ratings Group or ▇▇▇▇▇'▇ Investors Service, Inc., (iii) certificates of deposit,
maturing no more than one year from the date of creation thereof, issued by
commercial banks incorporated under the laws of the United States of America,
each having combined capital, surplus and undivided profits of not less than
$300,000,000 and having a senior unsecured rating of "A" or better by a
nationally recognized rating agency (an "A RATED BANK"), (iv) time deposits,
maturing no more than 30 days from the date of creation thereof with A Rated
Banks and (v) mutual funds that invest solely in one or more of the investments
described in clauses (i) through (iv) above, (e) Borrowers may make other
investments not exceeding $100,000 in the aggregate at any time outstanding; and
(f) Borrowers and any Secured Subsidiaries may make intercompany advances and
trade receivables between Borrower or any such Secured Subsidiary, on the one
hand, and any of the other Borrowers or any such Secured Subsidiary, on the
other hand, to the extent such Indebtedness is permitted pursuant to the
provisions of SECTION 6.3 hereof.
6.3 INDEBTEDNESS. (a) No Credit Party shall create, incur,
assume or permit to exist any Indebtedness, except (without duplication) (i)
Indebtedness secured by purchase money security interests and Capitalized Leases
permitted in clause (c) of Section 6.7, (ii) the Loans and the other
Obligations, (iii) unfunded pension fund and other employee benefit plan
obligations and liabilities to the extent they are permitted to remain unfunded
under applicable law, (iv) existing Indebtedness described in DISCLOSURE
SCHEDULE (6.3) and refinancings thereof or amendments or modifications thereto
which do not have the effect of increasing the principal
amount thereof or changing the amortization thereof (other than to extend the
same) and which are otherwise on terms and conditions no less favorable to any
Credit Party, Administrative Agent, Revolver Agent or any Lender, as reasonably
determined by Administrative Agent, than the terms of the Indebtedness being
refinanced, amended or modified, (v) Indebtedness specifically permitted under
SECTION 6.1, (vi) advances to employees specifically permitted under SECTION
6.4, (vii) Indebtedness consisting of intercompany loans and advances between
any Borrower or any Secured Subsidiary, on the one hand, and any other Borrower
or any other Secured Subsidiary, on the other hand, PROVIDED that (A) each
Borrower and each such Secured Subsidiary shall record all intercompany
transactions on its books and records in a manner satisfactory to Administrative
Agent; (B) the obligations of each Borrower and each such Secured Subsidiary
under any such intercompany loans shall be unsecured and subordinated to the
Obligations of Borrowers hereunder in a manner satisfactory to Administrative
Agent; (C) at the time any such intercompany loan or advance is made between any
Borrowers or such Secured Subsidiaries and after giving effect thereto, each
such Borrower and each such Secured Subsidiary shall be Solvent; (D) no Default
or Event of Default would occur and be continuing after giving effect to any
such proposed intercompany loan; and (E) the aggregate amount of such
intercompany Indebtedness owing by any Borrower or such Secured Subsidiary to
any other Borrower or such Secured Subsidiary shall not exceed $200,000 at any
one time outstanding; and (viii) Indebtedness consisting of intercompany trade
receivables between any Borrower or any Secured Subsidiary, on one hand, and any
other Borrower or any other Secured Subsidiary, on the other hand, PROVIDED that
(A) each Borrower and each such Secured Subsidiary shall record all intercompany
transactions on its books and records in a manner satisfactory to Administrative
Agent; (B) the obligations of each Borrower and each such Secured Subsidiary
under any such intercompany receivables shall be unsecured and subordinated to
the Obligations of Borrowers hereunder in a manner satisfactory to
Administrative Agent; (C) at the time any such intercompany receivable is
created between any Borrowers or such Secured Subsidiaries and after giving
effect thereto, each such Borrower and each such Secured Subsidiary shall be
Solvent; (D) no Default or Event of Default would occur and be continuing after
giving effect to any such proposed intercompany receivable; and (E) the
aggregate amount of such intercompany receivable owing by any Borrower or such
Secured Subsidiary to any other Borrower or such Secured Subsidiary shall not
exceed $500,000 at any one time outstanding.
(b) No Credit Party shall, directly or indirectly, voluntarily
purchase, redeem, defease or prepay any principal of, premium, if any, interest
or other amount payable in respect of any Indebtedness, other than (i) the
Obligations, (ii) Indebtedness secured by a Permitted Encumbrance if the asset
securing such Indebtedness has been sold or otherwise disposed of in accordance
with SECTIONS 6.8(B) or (c) and (iii) other Indebtedness (excluding Subordinated
Debt) not in excess of $100,000.
6.4 EMPLOYEE LOANS AND AFFILIATE TRANSACTIONS.
(a) No Credit Party shall enter into or be a party to any
transaction with any Affiliate thereof except in the ordinary course of and
pursuant to the reasonable requirements of such Credit Party's business and upon
fair and reasonable terms that are no less favorable to such Credit Party than
would be obtained in a comparable arm's length transaction with a Person not an
Affiliate of such Credit Party. All such transactions existing as of the date
hereof are described on DISCLOSURE SCHEDULE (6.4(A)).
(b) No Credit Party shall enter into any lending or borrowing
transaction with any employees of any Credit Party, except loans to their
respective employees on an arm's-length basis in the ordinary course of business
consistent with past practices for travel expenses, relocation costs and similar
purposes and stock option financing up to a maximum of $10,000 to any employee
and up to a maximum of $100,000 in the aggregate at any one time outstanding.
(c) No Credit Party shall increase the direct or indirect
aggregate monetary compensation (including all bonuses) of the ten most highly
compensated employees of the Credit Parties, taken as a whole, by more than 10%
per annum in excess of the current monetary compensation level for those
employees, expressed as an aggregate dollar amount and set forth in DISCLOSURE
SCHEDULE (6.4(C)); provided that, so long as after giving effect thereto no
Default or Event of Default shall have occurred and be continuing, Hi-Rise shall
be permitted to pay the earn-out bonus payable to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ pursuant
to the provisions of the Bes-Pac Acquisition Agreement.
6.5 CAPITAL STRUCTURE AND BUSINESS. No Credit Party shall (a)
make any changes in any of its business objectives, purposes or operations which
could in any way adversely affect the repayment of the Loans or any of the other
Obligations or could reasonably be expected to have or result in a Material
Adverse Effect, (b) make any change in its capital structure as described on
DISCLOSURE SCHEDULE (3.8), including the issuance of any shares of Stock,
warrants or other securities convertible into Stock or any revision of the terms
of its outstanding Stock, except for the Warrants and except that Hi-Rise may
issue its common Stock and issue warrants, options and other rights to acquire
Stock of Hi-Rise so long as, after giving effect thereto, no Change of Control
occurs and the proceeds thereof, in the case of an offering or other sale
thereof, are applied in prepayment of the Obligations as required by Section
1.3(b)(v), provided that no such Stock, warrant, option or other right to
acquire Stock shall in any manner obligate Hi-Rise or any other Borrower to
repurchase same, or (c) amend its charter or bylaws in a manner which would
adversely affect Administrative Agent, Revolver Agent or Lenders or such Credit
Party's duty or ability to repay the Obligations. No Credit Party shall engage
in any business other than the businesses currently engaged in by any of the
Credit Parties.
6.6 GUARANTEED INDEBTEDNESS. No Credit Party shall create,
incur, assume or permit to exist any Guaranteed Indebtedness except (a) by
endorsement of instruments or items of payment for deposit to the general
account of any Credit Party, and (b) for Guaranteed
Indebtedness incurred for the benefit of any other Credit Party if the primary
obligation is expressly permitted by this Agreement other than Indebtedness, if
any, of a Target existing at the time such Target is acquired.
6.7 LIENS. No Credit Party shall create, incur, assume or
permit to exist any Lien on or with respect to its Accounts, Inventory, Lease
Receivables or any of its other properties or assets (whether now owned or
hereafter acquired) except for (a) Permitted Encumbrances; (b) Liens in
existence on the date hereof and summarized on DISCLOSURE SCHEDULE (6.7); and
(c) Liens created after the date hereof by conditional sale or other title
retention agreements (including Capital Leases) or in connection with purchase
money Indebtedness with respect to Equipment and Fixtures acquired by any Credit
Party in the ordinary course of business, involving the incurrence of an
aggregate amount of purchase money Indebtedness and Capital Lease Obligations of
not more than $200,000 outstanding at any one time for all such Liens (provided
that such Liens attach only to the assets subject to such purchase money debt
and such Indebtedness is incurred within twenty (20) days following such
purchase and does not exceed 100% of the purchase price of the subject assets).
In addition, no Credit Party shall become a party to any agreement, note,
indenture or instrument, or take any other action, which would prohibit the
creation of a Lien on any of its properties or other assets in favor of
Administrative Agent, on behalf of itself, Revolver Agent and Lenders, as
additional collateral for the Obligations, except operating leases, Capital
Leases or Licenses which prohibit Liens upon the assets that are subject
thereto.
6.8 SALE OF STOCK AND ASSETS. No Credit Party shall sell,
transfer, convey, assign or otherwise dispose of any of its properties or other
assets, including the capital Stock of any of its Subsidiaries (whether in a
public or a private offering or otherwise) or any of their Accounts or Lease
Receivables, other than (a) the sale or Lease of Inventory in the ordinary
course of business, and (b) the sale, transfer, conveyance or other disposition
by a Credit Party of Equipment, Fixtures or Real Estate that are obsolete or no
longer used or useful in such Credit Party's business and having a value not
exceeding $100,000 in any single transaction or $250,000 in the aggregate in any
Fiscal Year. With respect to any disposition of assets or other properties
permitted pursuant to CLAUSE (B) above, Administrative Agent agrees on
reasonable prior written notice to release its Lien on such assets or other
properties in order to permit the applicable Credit Party to effect such
disposition and shall execute and deliver to Borrowers, at Borrowers' expense,
appropriate UCC-3 termination statements and other releases as reasonably
requested by Borrowers.
6.9 ERISA. No Credit Party shall, or shall cause or permit any
ERISA Affiliate to, cause or permit to occur an event which could result in the
imposition of a Lien under Section 412 of the IRC or Section 302 or 4068 of
ERISA or the posting of security under Section 401(a)(29) of the IRC or Section
307 of ERISA or cause or permit to occur an ERISA Event to the extent such ERISA
Event could reasonably be expected to have a Material Adverse Effect.
6.10 FINANCIAL COVENANTS. Borrowers shall not breach or fail
to comply with any of the Financial Covenants (the "FINANCIAL COVENANTS") set
forth in ANNEX G.
6.11 HAZARDOUS MATERIALS. No Credit Party shall cause or
permit a Release of any Hazardous Material on, at, in, under, above, to, from or
about any of the Real Estate where such Release would (a) violate in any
respect, or form the basis for any Environmental Liabilities under, any
Environmental Laws or Environmental Permits or (b) otherwise adversely impact
the value or marketability of any of the Real Estate or any of the Collateral,
other than such violations or Environmental Liabilities which could not
reasonably be expected to have a Material Adverse Effect.
6.12 SALE-LEASEBACKS. No Credit Party shall engage in any
sale-leaseback, synthetic lease or similar transaction involving any of its
assets.
6.13 CANCELLATION OF INDEBTEDNESS. No Credit Party shall
cancel any claim or debt owing to it, except for reasonable consideration
negotiated on an arm's-length basis and in the ordinary course of its business
consistent with prudent credit administration.
6.14 RESTRICTED PAYMENTS. No Credit Party shall make any
Restricted Payment, except (a) intercompany loans and advances and receivables
between Borrowers to the extent permitted by SECTION 6.2 or SECTION 6.3 above,
(b) dividends and distributions by Subsidiaries of any Borrower paid to such
Borrower, (c) employee loans permitted under SECTION 6.4(B) above, and (d)
scheduled payments of interest and principal with respect to the Subordinated
Debt; PROVIDED that (i) no Default or Event of Default shall have occurred and
be continuing or would result after giving effect to any payment pursuant to
CLAUSE (D) above, (ii) Borrowers collectively shall have Borrowing Availability
of at least $1,000,000 after giving effect to any payment pursuant to CLAUSE (D)
above, and (iii) the timing of the payments referred to in CLAUSE (D) above
shall be set at dates which permit the delivery of Financial Statements
necessary to determine current compliance with the financial covenants set forth
in ANNEX G prior to each payment.
6.15 CHANGE OF CORPORATE NAME OR LOCATION; CHANGE OF FISCAL
YEAR. No Credit Party shall (a) change its corporate name, or (b) change its
chief executive office, principal place of business, corporate offices or
warehouses or locations at which Collateral is held or stored, or the location
of its records concerning the Collateral, in any case without at least thirty
(30) days prior written notice to Administrative Agent and after Administrative
Agent's written acknowledgment that any reasonable action requested by
Administrative Agent in connection therewith, including to continue the
perfection of any Liens in favor of Administrative Agent, on behalf of itself,
Revolver Agent and Lenders, in any Collateral, has been completed or taken, and
PROVIDED that any such new location shall be in the continental United States.
Without limiting the foregoing, no Credit Party shall change its name, identity
or corporate structure in any manner which might make any financing or
continuation statement filed in connection herewith
seriously misleading within the meaning of Section 9-402(7) of the Code or any
other then applicable provision of the Code except upon prior written notice to
Administrative Agent and Lenders and after Administrative Agent's written
acknowledgment that any reasonable action requested by Administrative Agent in
connection therewith, including to continue the perfection of any Liens in favor
of Administrative Agent, on behalf of itself, Revolver Agent and Lenders, in any
Collateral, has been completed or taken. No Credit Party shall change its Fiscal
Year.
6.16 NO IMPAIRMENT OF INTERCOMPANY TRANSFERS. No Credit Party
shall directly or indirectly enter into or become bound by any agreement,
instrument, indenture or other obligation (other than this Agreement and the
other Loan Documents) which could directly or indirectly restrict, prohibit or
require the consent of any Person with respect to the payment of dividends or
distributions or the making or repayment of intercompany loans by a Subsidiary
of any Borrower to any Borrower or between Borrowers.
6.17 NO SPECULATIVE TRANSACTIONS. No Credit Party shall engage
in any transaction involving commodity options, futures contracts or similar
transactions, except solely to hedge against fluctuations in the prices of
commodities owned or purchased by it and the values of foreign currencies
receivable or payable by it and interest swaps, caps or collars.
6.18 LEASES. No Credit Party shall enter into any operating
lease, as lessee, for Equipment or Real Estate, if the aggregate of all such
operating lease payments payable in any year for Borrowers and their
Subsidiaries on a consolidated basis would exceed $1,500,000.
6.19 CHANGES RELATING TO SUBORDINATED DEBT. No Credit Party
shall change or amend the terms of any Subordinated Debt (or any indenture or
agreement in connection therewith) if the effect of such amendment is to: (a)
increase the interest rate on such Subordinated Debt; (b) change the dates upon
which payments of principal or interest are due on such Subordinated Debt other
than to extend such dates; (c) change any default or event of default other than
to delete or make less restrictive any default provision therein, or add any
covenant with respect to such Subordinated Debt; (d) change the redemption or
prepayment provisions of such Subordinated Debt other than to extend the dates
therefor or to reduce the premiums payable in connection therewith; (e) grant
any security or collateral to secure payment of such Subordinated Debt; or (f)
change or amend any other term if such change or amendment would materially
increase the obligations of the obligor or confer additional material rights to
the holder of such Subordinated Debt in a manner adverse to any Credit Party,
Administrative Agent, Revolver Agent or any Lender.
7. TERM
7.1 TERMINATION. The financing arrangements contemplated
hereby shall begin on the Closing Date and shall remain in effect until the
latest of the Commitment Termination Date (Revolver A) and the Commitment
Termination Date (Revolver B), and the Loans and all other Obligations shall be
automatically due and payable in full on such date.
7.2 SURVIVAL OF OBLIGATIONS UPON TERMINATION OF FINANCING
ARRANGEMENTS. Except as otherwise expressly provided for in the Loan Documents,
no termination or cancellation (regardless of cause or procedure) of any
financing arrangement under this Agreement shall in any way affect or impair the
obligations, duties and liabilities of the Credit Parties or the rights of Agent
and Lenders relating to any unpaid portion of the Loans or any other
Obligations, due or not due, liquidated, contingent or unliquidated or any
transaction or event occurring prior to such termination, or any transaction or
event, the performance of which is required after the Commitment Termination
Date (Acquisition Loan), the Commitment Termination Date (Revolver A), the
Commitment Termination Date (Revolver B), the Commitment Termination Date (Term
Loan A) or the Commitment Termination Date (Acquisition Loan). Except as
otherwise expressly provided herein or in any other Loan Document, all
undertakings, agreements, covenants, warranties and representations of or
binding upon the Credit Parties, and all rights of Administrative Agent,
Revolver Agent and each Lender, all as contained in the Loan Documents, shall
not terminate or expire, but rather shall survive any such termination or
cancellation and shall continue in full force and effect until the Termination
Date; provided however, that in all events the provisions of SECTION 11, the
payment obligations under SECTIONS 1.16 and 1.17, and the indemnities contained
in the Loan Documents shall survive the Termination Date.
8. EVENTS OF DEFAULT: RIGHTS AND REMEDIES
8.1 EVENTS OF DEFAULT. The occurrence of any one or more of
the following events (regardless of the reason therefor) shall constitute an
"EVENT OF DEFAULT" hereunder:
(a) Any Borrower (i) fails to make any payment of principal
of, or interest on, or Fees owing in respect of, the Loans when due and payable,
or (ii) fails to pay or reimburse Administrative Agent, Revolver Agent or
Lenders for any Obligations hereunder or under any other Loan Document (other
than the Obligations described in clause (i) above) within ten (10) days
following Administrative Agent's demand for such reimbursement or payment of
expenses.
(b) Any Credit Party shall fail or neglect to perform, keep or
observe any of the provisions of SECTIONS 1.4, 1.9, 2.5, 5.4 or 6, or any of the
provisions set forth in ANNEXES C or G, respectively.
(c) Any Borrower shall fail or neglect to perform, keep or
observe any of the provisions of SECTION 4 or any provisions set forth in
ANNEXES E or F, respectively, and the same shall remain unremedied for five (5)
days or more.
(d) Any Credit Party shall fail or neglect to perform, keep or
observe any other provision of this Agreement or of any of the other Loan
Documents (other than any provision embodied in or covered by any other clause
of this SECTION 8.1) and the same shall remain unremedied for thirty (30) days
or more following delivery of notice thereof by Administrative Agent to Borrower
Representative.
(e) A default or breach shall occur under any other agreement,
document or instrument to which any Credit Party is a party which is not cured
within any applicable grace period, and such default or breach (i) involves the
failure to make any payment when due in respect of any Indebtedness (other than
the Obligations) of any Credit Party in excess of $200,000 in the aggregate, or
(ii) causes, or permits any holder of such Indebtedness or a trustee to cause,
Indebtedness or a portion thereof in excess of $200,000 in the aggregate to
become due prior to its stated maturity or prior to its regularly scheduled
dates of payment, regardless of whether such default is waived, or such right is
exercised, by such holder or trustee.
(f) Any information contained in any Borrowing Base
Certificate is untrue or incorrect in any respect, or any representation or
warranty herein or in any Loan Document or in any written statement, report,
financial statement or certificate (other than a Borrowing Base Certificate)
made or delivered to Administrative Agent, Revolver Agent or any Lender by any
Credit Party is untrue or incorrect in any material respect as of the date when
made or deemed made.
(g) Assets of any Credit Party with a fair market value of
$200,000 or more shall be attached, seized, levied upon or subjected to a writ
or distress warrant, or come within the possession of any receiver, trustee,
custodian or assignee for the benefit of creditors of any Credit Party and such
condition continues for thirty (30) days or more.
(h) A case or proceeding shall have been commenced against any
Credit Party seeking a decree or order in respect of any Credit Party (i) under
Title 11 of the United States Code, as now constituted or hereafter amended or
any other applicable federal, state or foreign bankruptcy or other similar law,
(ii) appointing a custodian, receiver, liquidator, assignee, trustee or
sequestrator (or similar official) for any Credit Party or of any substantial
part of any such Person's assets, or (iii) ordering the winding-up or
liquidation of the affairs of any Credit Party, and such case or proceeding
shall remain undismissed or unstayed for sixty (60) days or more or such court
shall enter a decree or order granting the relief sought in such case or
proceeding.
(i) Any Credit Party (i) shall file a petition seeking relief
under Title 11 of the United States Code, as now constituted or hereafter
amended, or any other applicable federal,
state or foreign bankruptcy or other similar law, (ii) shall fail to contest in
a timely and appropriate manner or shall consent to the institution of
proceedings thereunder or to the filing of any such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee or sequestrator (or similar official) of any Credit Party or
of any substantial part of any such Person's assets, (iii) shall make an
assignment for the benefit of creditors, (iv) shall take any corporate action in
furtherance of any of the foregoing; or (v) shall admit in writing its inability
to, or shall be generally unable to, pay its debts as such debts become due.
(j) A final judgment or judgments for the payment of money in
excess of $200,000 in the aggregate at any time outstanding in excess of
applicable insurance coverage therefor (and for which the applicable insurer has
not denied or threatened to deny coverage) shall be rendered against any Credit
Party and the same shall not, within thirty (30) days after the entry thereof,
have been discharged or execution thereof stayed or bonded pending appeal, or
shall not have been discharged prior to the expiration of any such stay.
(k) Any material provision of any Loan Document shall for any
reason cease to be valid, binding and enforceable in accordance with its terms
(or any Credit Party shall challenge the enforceability of any Loan Document or
shall assert in writing, or engage in any action or inaction based on any such
assertion, that any provision of any of the Loan Documents has ceased to be or
otherwise is not valid, binding and enforceable in accordance with its terms),
or any security interest created under any Loan Document shall cease to be a
valid and perfected first priority security interest or Lien (except as
otherwise permitted herein or therein) in any of the Collateral purported to be
covered thereby.
(l) Any Change of Control shall occur.
(m) Any event shall occur, whether or not insured or
insurable, as a result of which revenue-producing activities cease or are
substantially curtailed at any facility of Borrowers generating more than 25% of
Borrowers' consolidated revenues for the Fiscal Year preceding such event and
such cessation or curtailment continues for more than 30 days.
(n) Any default or breach by any Borrower shall occur and be
continuing under any agreement to which any Borrower is a party or any of its
properties or assets are subject or any such agreement shall be terminated for
any reason, and any such default, breach or termination shall have a Material
Adverse Effect.
(o) Any two or more of ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ shall at any time cease to serve as an officer of Hi-Rise in their
respective capacities as of the Closing Date with at least the same
responsibilities and authority.
8.2 REMEDIES.
(a) If any Event of Default shall have occurred and be
continuing or if a Default shall have occurred and be continuing and
Administrative Agent, Revolver Agent or Requisite Lenders shall have determined
not to make any Advances or incur any Letter of Credit Obligations so long as
that specific Default is continuing, Administrative Agent may (and at the
written request of the Requisite Lenders shall), without notice, suspend the
credit facilities with respect to further Advances and/or the incurrence of
further Letter of Credit Obligations whereupon any further Advances and Letter
of Credit Obligations shall be made or extended in Administrative Agent's sole
discretion (or in the sole discretion of the Requisite Lenders, if such
suspension occurred at their direction) so long as such Default or Event of
Default is continuing. If any Default or Event of Default shall have occurred
and be continuing, Administrative Agent may (and at the written request of
Requisite Lenders shall), without notice except as otherwise expressly provided
herein, increase the rate of interest applicable to the Loans and the Letter of
Credit Fees to the Default Rate.
(b) If any Event of Default shall have occurred and be
continuing, Administrative Agent may (and at the written request of the
Requisite Lenders shall), without notice, (i) terminate the credit facilities
with respect to further Advances or the incurrence of further Letter of Credit
Obligations; (ii) declare all or any portion of the Obligations, including all
or any portion of any Loan to be forthwith due and payable, and require that the
Letter of Credit Obligations be cash collateralized as provided in ANNEX B, all
without presentment, demand, protest or further notice of any kind, all of which
are expressly waived by Borrowers and each other Credit Party; and (iii)
exercise any rights and remedies provided to Administrative Agent under the Loan
Documents and/or at law or equity, including all remedies provided under the
Code; PROVIDED, HOWEVER, that upon the occurrence of an Event of Default
specified in SECTIONS 8.1(G), (H) or (I), the credit facilities shall be
immediately terminated and all of the Obligations, including the aggregate
Loans, shall become immediately due and payable without declaration, notice or
demand by any Person.
8.3 WAIVERS BY CREDIT PARTIES. Except as otherwise provided
for in this Agreement or by applicable law, each Credit Party waives (including
for purposes of SECTION 12): (a) presentment, demand and protest and notice of
presentment, dishonor, notice of intent to accelerate, notice of acceleration,
protest, default, nonpayment, maturity, release, compromise, settlement,
extension or renewal of any or all commercial paper, accounts, contract rights,
documents, instruments, chattel paper and guaranties at any time held by
Administrative Agent on which any Credit Party may in any way be liable, and
hereby ratifies and confirms whatever Administrative Agent may do in this
regard, (b) all rights to notice and a hearing prior to Administrative Agent's
taking possession or control of, or to Administrative Agent's replevy,
attachment or levy upon, the Collateral or any bond or security which might be
required by any court prior to allowing Administrative Agent to exercise any of
its remedies, and (c) the benefit of all valuation, appraisal, marshaling and
exemption laws.
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF ADMINISTRATIVE AGENT AND
REVOLVER AGENT
9.1 ASSIGNMENT AND PARTICIPATIONS.
(a) The Credit Parties signatory hereto consent to any
Lender's assignment of, and/or sale of participations in, at any time or times,
the Loan Documents, Loans, Letter of Credit Obligations and any Commitment or of
any portion thereof or interest therein, including any Lender's rights, title,
interests, remedies, powers or duties thereunder, whether evidenced by a writing
or not. Any assignment by a Lender shall (i) require the consent of
Administrative Agent and, so long as no Default or Event of Default shall have
occurred and be continuing, Borrower Representative (which shall not be
unreasonably withheld or delayed) and the execution of an assignment agreement
(an "ASSIGNMENT AGREEMENT") substantially in the from attached hereto as EXHIBIT
9.1(A) and otherwise in form and substance satisfactory to, and acknowledged by,
Administrative Agent; (ii) be conditioned on such assignee Lender representing
to the assigning Lender and Administrative Agent that it is purchasing the
applicable Loans to be assigned to it for its own account, for investment
purposes and not with a view to the distribution thereof; (iii) if a partial
assignment, be in an amount at least equal to $5,000,000 and, after giving
effect to any such partial assignment, the assigning Lender shall have retained
Commitments in an amount at least equal to $5,000,000; and (iv) include a
payment to Administrative Agent of an assignment fee of $3,500; PROVIDED that
such assignment fee shall not be payable in the event of any internal assignment
by any Lender to any Affiliate of such Lender, PROVIDED FURTHER, THAT the
assigning Lender shall reimburse the Administrative Agent for its reasonable
fees and expenses incurred in connection with any such assignment. In the case
of an assignment by a Lender under this SECTION 9.1, the assignee shall have, to
the extent of such assignment, the same rights, benefits and obligations as it
would if it were a Lender hereunder. The assigning Lender shall be relieved of
its obligations hereunder with respect to its Commitments or assigned portion
thereof from and after the date of such assignment. Each Borrower hereby
acknowledges and agrees that any assignment will give rise to a direct
obligation of Borrowers to the assignee and that the assignee shall be
considered to be a "Lender". In all instances, each Lender's liability to make
Loans hereunder shall be several and not joint and shall be limited to such
Lender's Pro Rata Share of the applicable Commitment. In the event
Administrative Agent or any Lender assigns or otherwise transfers all or any
part of the Obligations, Administrative Agent or any such Lender shall so notify
Borrowers and Borrowers shall, upon the request of Administrative Agent or such
Lender, execute new Notes in exchange for the Notes, if any, being assigned.
Notwithstanding the foregoing provisions of this SECTION 9.1(A), any Lender may
at any time pledge the Obligations held by it and such Lender's rights under
this Agreement and the other Loan Documents to a Federal Reserve Bank, and any
Lender that is an investment fund may assign the Obligations held by it and such
Lender's rights under this Agreement and the other Loan Documents to another
investment fund managed by the same investment advisor; PROVIDED, HOWEVER, that
no such pledge to a Federal Reserve Bank
shall release such Lender from such Lender's obligations hereunder or under any
other Loan Document.
(b) Any participation by a Lender of all or any part of its
Commitments shall be made with the understanding that all amounts payable by
Borrowers hereunder shall be determined as if that Lender had not sold such
participation, and that the holder of any such participation shall not be
entitled to require such Lender to take or omit to take any action hereunder
except actions directly affecting (i) any reduction in the principal amount of,
or interest rate or Fees payable with respect to, any Loan in which such holder
participates, (ii) any extension of the scheduled amortization of the principal
amount of any Loan in which such holder participates or the final maturity date
thereof, and (iii) any release of all or substantially all of the Collateral
(other than in accordance with the terms of this Agreement, the Collateral
Documents or the other Loan Documents). Solely for purposes of SECTIONS 1.14,
1.16, 1.17 and 9.8, each Borrower acknowledges and agrees that a participation
shall give rise to a direct obligation of Borrowers to the participant and the
participant shall be considered to be a "Lender". Except as set forth in the
preceding sentence no Borrower or Credit Party shall have any obligation or duty
to any participant. Neither Administrative Agent nor any Lender (other than the
Lender selling a participation) shall have any duty to any participant and may
continue to deal solely with the Lender selling a participation as if no such
sale had occurred.
(c) Except as expressly provided in this SECTION 9.1, no
Lender shall, as between Borrowers and that Lender, or Administrative Agent and
that Lender, or Revolver Agent and that Lender, be relieved of any of its
obligations hereunder as a result of any sale, assignment, transfer or
negotiation of, or granting of participation in, all or any part of the Loans,
the Notes or other Obligations owed to such Lender.
(d) Each Credit Party executing this Agreement shall assist
any Lender permitted to sell assignments or participations under this SECTION
9.1 as reasonably required to enable the assigning or selling Lender to effect
any such assignment or participation, including the execution and delivery of
any and all agreements, notes and other documents and instruments as shall be
requested and, if requested by Administrative Agent, the preparation of
informational materials for, and the participation of management in meetings
with, potential assignees or participants; PROVIDED THAT no Credit Party shall
be obligated to incur any out-of-pocket expenses in connection with the
compliance with the provisions of this SECTION 9.1(D), other than in connection
with annual bank meetings and bank meetings held as a result of the occurrence
of any Event of Default and other than Administrative Agent's reasonable fees
and expenses (including reasonable attorneys' fees) incurred in connection with
any such assignment or participation. Each Credit Party executing this Agreement
shall certify the correctness, completeness and accuracy of all descriptions of
the Credit Parties and their affairs contained in any selling materials provided
by them and all other information provided by them and included in such
materials, except that any Projections delivered by Borrowers shall only be
certified by
Borrowers as having been prepared by Borrowers in compliance with the
representations contained in SECTION 3.4(C).
(e) A Lender may furnish any information concerning Credit
Parties in the possession of such Lender from time to time to assignees and
participants (including prospective assignees and participants). Each Lender
shall obtain from assignees or participants confidentiality covenants
substantially equivalent to those contained in SECTION 11.8.
(f) So long as no Event of Default shall have occurred and be
continuing, no Lender shall assign or sell participations in any portion of its
Loans or Commitments to a potential Lender or participant, if, as of the date of
the proposed assignment or sale, the assignee Lender or participant would be
subject to capital adequacy or similar requirements under SECTION 1.17(A) or
withholding taxes in accordance with SECTION 1.16(A).
9.2 APPOINTMENT OF ADMINISTRATIVE AGENT AND REVOLVER AGENT. GE
Capital is hereby appointed to act on behalf of all Lenders as Administrative
Agent under this Agreement and the other Loan Documents. NationsBank is hereby
appointed to act on behalf of all Lenders as Revolver Agent under this Agreement
and the other Loan Documents. The provisions of this SECTION 9.2 are solely for
the benefit of Agents and Lenders and no Credit Party nor any other Person shall
have any rights as a third party beneficiary of any of the provisions hereof. In
performing their respective functions and duties under this Agreement and the
other Loan Documents, Agents shall act solely as agents of Lenders and do not
assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for any Credit Party or any other
Person. Agents shall have no duties or responsibilities except for those
expressly set forth in this Agreement and the other Loan Documents. The duties
of Agents shall be mechanical and administrative in nature and Agents shall not
have, or be deemed to have, by reason of this Agreement, any other Loan Document
or otherwise a fiduciary relationship in respect of any Lender. Neither Agents
nor any of their respective Affiliates nor any of their respective officers,
directors, employees, agents or representatives shall be liable to any Lender
for any action taken or omitted to be taken by either of them hereunder or under
any other Loan Document, or in connection herewith or therewith, except for
damages caused by their own gross negligence or willful misconduct.
If either Agent shall request instructions from Requisite
Lenders, Supermajority Revolving Lenders or all affected Lenders with respect to
any act or action (including failure to act) in connection with this Agreement
or any other Loan Document, then such Agent shall be entitled to refrain from
such act or taking such action unless and until such Agent shall have received
instructions from Requisite Lenders, Supermajority Revolving Lenders or all
affected Lenders, as the case may be, and such Agent shall not incur liability
to any Person by reason of so refraining. Each Agent shall be fully justified in
failing or refusing to take any action hereunder or under any other Loan
Document (a) if such action would, in the opinion of such Agent, be contrary to
law or the terms of this Agreement or any other Loan Document, (b) if
such action would, in the opinion of such Agent, expose such Agent to
Environmental Liabilities or (c) if such Agent shall not first be indemnified to
its satisfaction against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action. Without
limiting the foregoing, no Lender shall have any right of action whatsoever
against either Agent as a result of such Agent acting or refraining from acting
hereunder or under any other Loan Document in accordance with the instructions
of Requisite Lenders, Supermajority Revolving Lenders or all affected Lenders,
as applicable.
9.3 AGENTS' RELIANCE, ETC. Neither Agent nor any of their
respective Affiliates nor any of their respective directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken by it or
them under or in connection with this Agreement or the other Loan Documents,
except for damages caused by its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, each Agent:
(a) may treat the payee of any Note as the holder thereof until such Agent
receives written notice of the assignment or transfer thereof signed by such
payee and in form satisfactory to such Agent; (b) may consult with legal
counsel, independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (c)
makes no warranty or representation to any Lender and shall not be responsible
to any Lender for any statements, warranties or representations made in or in
connection with this Agreement or the other Loan Documents; (d) shall not have
any duty to ascertain or to inquire as to the performance or observance of any
of the terms, covenants or conditions of this Agreement or the other Loan
Documents on the part of any Credit Party or to inspect the Collateral
(including the books and records) of any Credit Party; (e) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or the other
Loan Documents or any other instrument or document furnished pursuant hereto or
thereto; and (f) shall incur no liability under or in respect of this Agreement
or the other Loan Documents by acting upon any notice, consent, certificate or
other instrument or writing (which may be by telecopy, telegram, cable or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
9.4 GE CAPITAL, NATIONSBANK AND AFFILIATES. With respect to
their respective Commitments hereunder, GE Capital and NationsBank shall have
the same rights and powers under this Agreement and the other Loan Documents as
any other Lender and may exercise the same as though it were not an Agent; and
the term "Lender" or "Lenders" shall, unless otherwise expressly indicated,
include GE Capital and NationsBank in their respective individual capacities. GE
Capital and NationsBank and their respective Affiliates may lend money to,
invest in, and generally engage in any kind of business with, any Credit Party,
any of their Affiliates and any Person who may do business with or own
securities of any Credit Party or any such Affiliate, all as if GE Capital and
NationsBank were not Agents and without any duty to account therefor to Lenders.
GE Capital and NationsBank and their respective Affiliates may accept fees and
other consideration from any Credit Party for services in connection with this
Agreement or otherwise without having to account for the same to Lenders. GE
Capital and NationsBank have also received a warrant from Hi-Rise. Each Lender
acknowledges the potential conflict of interest between each of GE Capital and
NationsBank as a Lender holding disproportionate interests in the Loans, GE
Capital and NationsBank as a warrant holder of Hi-Rise and GE Capital and
NationsBank as an Agent.
9.5 LENDER CREDIT DECISION. Each Lender acknowledges that it
has, independently and without reliance upon Administrative Agent, Revolver
Agent or any other Lender and based on the Financial Statements referred to in
SECTION 3.4(A) and such other documents and information as it has deemed
appropriate, made its own credit and financial analysis of the Credit Parties
and its own decision to enter into this Agreement. Each Lender also acknowledges
that it will, independently and without reliance upon Administrative Agent,
Revolver Agent 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. Each Lender
acknowledges the potential conflict of interest of each other Lender as a result
of Lenders holding disproportionate interests in the Loans, and expressly
consents to, and waives any claim based upon, such conflict of interest.
9.6 INDEMNIFICATION. Lenders agree to indemnify each of
Administrative Agent and Revolver Agent (to the extent not reimbursed by Credit
Parties and without limiting the obligations of Borrowers hereunder), ratably
according to their respective Pro Rata Shares, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against Administrative Agent or Revolver
Agent in any way relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted by Administrative Agent or Revolver
Agent in connection therewith; PROVIDED, however, that no Lender shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from
Administrative Agent's or Revolver Agent's respective gross negligence or
willful misconduct. Without limiting the foregoing, each Lender agrees to
reimburse Administrative Agent and Revolver Agent promptly upon demand for its
ratable share of any out-of-pocket expenses (including counsel fees) incurred by
Administrative Agent or Revolver Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement and each
other Loan Document, to the extent that Administrative Agent or Revolver Agent
is not reimbursed for such expenses by Credit Parties.
9.7 SUCCESSOR AGENTS. Either Agent may resign at any time by
giving not less than thirty (30) days' prior written notice thereof to Lenders
and Borrower Representative. Upon any such resignation, the Requisite Lenders
shall have the right to appoint a successor Agent. If no successor Agent shall
have been so appointed by the Requisite Lenders and shall have accepted such
appointment within 30 days after the resigning Agent's giving notice of
resignation, then the resigning Agent may, on behalf of Lenders, appoint a
successor Agent, which shall be a Lender, if a Lender is willing to accept such
appointment, or otherwise shall be a commercial bank or financial institution or
a subsidiary of a commercial bank or financial institution if such commercial
bank or financial institution is organized under the laws of the United States
of America or of any State thereof and has a combined capital and surplus of at
least $300,000,000. If no successor Agent has been appointed pursuant to the
foregoing, by the 30th day after the date such notice of resignation was given
by the resigning Agent, such resignation shall become effective and the
Requisite Lenders shall thereafter perform all the duties of the resigning Agent
hereunder until such time, if any, as the Requisite Lenders appoint a successor
Agent as provided above. Any successor Agent appointed by Requisite Lenders
hereunder shall be subject to the approval of Borrower Representative, such
approval not to be unreasonably withheld or delayed; PROVIDED that such approval
shall not be required if a Default or an Event of Default shall have occurred
and be continuing. Upon the acceptance of any appointment as Agent hereunder by
a successor Agent, such successor Agent shall succeed to and become vested with
all the rights, powers, privileges and duties of the resigning Agent. Upon the
earlier of the acceptance of any appointment as Agent hereunder by a successor
Agent or the effective date of the resigning Agent's resignation, the resigning
Agent shall be discharged from its duties and obligations under this Agreement
and the other Loan Documents, except that any indemnity rights or other rights
in favor of such resigning Agent shall continue. After any resigning Agent's
resignation hereunder, the provisions of this SECTION 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement and the other Loan Documents.
9.8 SETOFF AND SHARING OF PAYMENTS. In addition to any rights
now or hereafter granted under applicable law and not by way of limitation of
any such rights, upon the occurrence and during the continuance of any Event of
Default, each Lender and each holder of any Note is hereby authorized at any
time or from time to time, without notice to any Credit Party or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all balances held by it at any of its offices
for the account of any Borrower (regardless of whether such balances are then
due to such Borrower) and any other properties or assets any time held or owing
by that Lender or that holder to or for the credit or for the account of any
Borrower against and on account of any of the Obligations which are not paid
when due. Any Lender or holder of any Note exercising a right to set off or
otherwise receiving any payment on account of the Obligations in excess of its
Pro Rata Share thereof shall purchase for cash (and the other Lenders or holders
shall sell) such participations in each such other Lender's or holder's Pro Rata
Share of the Obligations as would be necessary to cause such Lender to share the
amount so set off or otherwise received with each other Lender or holder in
accordance with their respective Pro Rata Shares. Each Lender's obligation under
this SECTION 9.8 shall be in addition to and not limitation of its obligations
to purchase a participation in an amount equal to its Pro Rata Share of the
Swing Line Loans under SECTION 1.1. Each Credit Party that is a Borrower agrees,
to the fullest extent permitted by law, that (a) any Lender or holder may
exercise its right to set off with respect to amounts in excess of its Pro Rata
Share of
the Obligations and may sell participations in such amount so set off to other
Lenders and holders and (b) any Lender or holders so purchasing a participation
in the Loans made or other Obligations held by other Lenders or holders may
exercise all rights of set-off, bankers' lien, counterclaim or similar rights
with respect to such participation as fully as if such Lender or holder were a
direct holder of the Loans and the other Obligations in the amount of such
participation. Notwithstanding the foregoing, if all or any portion of the
set-off amount or payment otherwise received is thereafter recovered from the
Lender that has exercised the right of set-off, the purchase of participations
by that Lender shall be rescinded and the purchase price restored without
interest.
9.9 Advances; Payments; Non-Funding Lenders; Information;
Actions in Concert.
(a) ADVANCES; PAYMENTS.
(i) Revolving Lenders shall refund or participate in
either of the Swing Line Loans in accordance with CLAUSES (III) and (IV) of
SECTION 1.1(C). If the Swing Line Lender declines to make a Swing Line Loan or
if Swing Line Availability is zero, Revolver Agent shall notify Revolving
Lenders, promptly after receipt of a Notice of Revolving Credit Advance and in
any event prior to 1:00 p.m. (New York time) on the date such Notice of
Revolving Advance is received, by telecopy, telephone or other similar form of
transmission. Each Revolving Lender shall make the amount of such Lender's Pro
Rata Share of such Revolving Credit Advance available to Revolver Agent in same
day funds by wire transfer to Revolver Agent's account as set forth in ANNEX H
not later than 3:00 p.m. (New York time) on the requested funding date. After
receipt of such wire transfers (or, in the Revolver Agent's sole discretion,
before receipt of such wire transfers), subject to the terms hereof, Revolver
Agent shall make the requested Revolving Credit Advance to the Borrower
designated by Borrower Representative in the Notice of Revolving Credit Advance.
All payments by each Revolving Lender shall be made without setoff, counterclaim
or deduction of any kind.
(ii) On the second (2nd) Business Day of each
calendar week or more frequently as aggregate cumulative payments in excess of
$2,000,000 are received with respect to the Loans (other than a Swing Line Loan)
(each, a "SETTLEMENT DATE"), Revolver Agent will advise each Lender by
telephone, or telecopy of the amount of such Lender's Pro Rata Share of
principal, interest and Fees paid for the benefit of Lenders with respect to
each applicable Loan. Provided that such Lender has funded all payments or
Advances required to be made by it and has purchased all participations required
to be purchased by it under this Agreement and the other Loan Documents as of
such Settlement Date, Revolver Agent will pay to each Lender such Lender's Pro
Rata Share of principal, interest and Fees paid by Borrowers since the previous
Settlement Date for the benefit of that Lender on the Loans held by it. To the
extent that any Lender (a "NON-FUNDING LENDER") has failed to fund all such
payments and Advances or failed to fund the purchase of all such participations,
and for so long as such failure continues, Revolver
Agent shall be entitled to set off the funding short-fall against that
Non-Funding Lender's Pro Rata Share of all payments received from Borrowers.
Such payments shall be made by wire transfer to such Lender's account (as
specified by such Lender in ANNEX H or the applicable Assignment Agreement) not
later than 2:00 p.m. (New York time) on the next Business Day following each
Settlement Date.
(b) AVAILABILITY OF LENDER'S PRO RATA SHARE. Revolver Agent
may assume that each Revolving Lender, Acquisition Lender and Term Lender (Term
Loan A) will make its Pro Rata Share of each Revolving Credit Advance,
Acquisition Loan Advance and the Term Loan A available to Revolver Agent on each
funding date. If such Pro Rata Share is not, in fact, paid to Revolver Agent by
such Revolving Lender, Acquisition Lender or Term Lender (Term Loan A), as the
case may be, when due, Revolver Agent will be entitled to recover such amount on
demand from such Revolving Lender, Acquisition Lender or Term Lender (Term Loan
A), as the case may be, without set-off, counterclaim or deduction of any kind.
If any Revolving Lender, Acquisition Lender or Term Lender (Term Loan A), as the
case may be, fails to pay the amount of its Pro Rata Share forthwith upon
Revolver Agent's demand, Revolver Agent shall promptly notify Borrower
Representative and Borrowers shall immediately repay such amount to Revolver
Agent. Nothing in this SECTION 9.9(B) or elsewhere in this Agreement or the
other Loan Documents shall be deemed to require Revolver Agent to advance funds
on behalf of any Revolving Lender, Acquisition Lender or Term Lender (Term Loan
A), as the case may be, or to relieve any Revolving Lender, Acquisition Lender
or Term Lender (Term Loan A), as the case may be, from its obligation to fulfill
its Commitments hereunder or to prejudice any rights that Borrowers may have
against any Revolving Lender, Acquisition Lender or Term Lender (Term Loan A),
as the case may be, as a result of any default by such Revolving Lender,
Acquisition Lender or Term Lender (Term Loan A), as the case may be, hereunder.
To the extent that Revolver Agent advances funds to any Borrower on behalf of
any Revolving Lender, Acquisition Lender or Term Lender (Term Loan A), as the
case may be, and is not reimbursed therefor on the same Business Day as such
Advance is made, Revolver Agent shall be entitled to retain for its account all
interest accrued on such Advance until reimbursed by the applicable Revolving
Lender, Acquisition Lender or Term Lender (Term Loan A), as the case may be.
(c) RETURN OF PAYMENTS.
(i) If Administrative Agent or Revolver Agent pays an
amount to a Lender under this Agreement in the belief or expectation that a
related payment has been or will be received by Administrative Agent or Revolver
Agent from Borrowers and such related payment is not received by Administrative
Agent or Revolver Agent, as the case may be, then Administrative Agent or
Revolver Agent, as the case may be, will be entitled to recover such amount from
such Lender on demand without set-off, counterclaim or deduction of any kind.
(ii) If Administrative Agent or Revolver Agent
determines at any time that any amount received by Administrative Agent or
Revolver Agent under this Agreement
must be returned to any Borrower or paid to any other Person pursuant to any
insolvency law or otherwise, then, notwithstanding any other term or condition
of this Agreement or any other Loan Document, Administrative Agent or Revolver
Agent, as the case may be, will not be required to distribute any portion
thereof to any Lender. In addition, each Lender will repay to Administrative
Agent or Revolver Agent on demand any portion of such amount that Administrative
Agent or Revolver Agent, as the case may be, has distributed to such Lender,
together with interest at such rate, if any, as Administrative Agent or Revolver
Agent, as the case may be, is required to pay to any Borrower or such other
Person, without set-off, counterclaim or deduction of any kind.
(d) NON-FUNDING LENDERS. The failure of any Non-Funding Lender
to make any Revolving Credit Advance, Acquisition Loan Advance or the Term Loan
A or any payment required by it hereunder or to purchase any participation in
any Swing Line Loan to be made or purchased by it on the date specified therefor
shall not relieve any other Revolving Lender, Acquisition Lender or Term Lender
(Term Loan A), as the case may be, (each such other Revolving Lender,
Acquisition Lender or Term Lender (Term Loan A), as the case may be, an "OTHER
LENDER") of its obligations to make such Advance or purchase such participation
on such date, but neither any Other Lender nor Administrative Agent or Revolver
Agent shall be responsible for the failure of any Non-Funding Lender to make an
Advance or to purchase a participation required hereunder. Notwithstanding
anything set forth herein to the contrary, a Non-Funding Lender shall not have
any voting or consent rights under or with respect to any Loan Document or
constitute a "Lender" or a "Revolving Lender" (or be included in the calculation
of "Requisite Lenders" or "Supermajority Revolving Lenders" hereunder) for any
voting or consent rights under or with respect to any Loan Document.
(e) DISSEMINATION OF INFORMATION. Agents will use reasonable
efforts to provide Lenders with any notice of Default or Event of Default
received by such Agent from, or delivered by such Agent to, any Credit Party,
with notice of any Event of Default of which such Agent has actually become
aware and with notice of any action taken by such Agent following any Event of
Default; provided, however, that neither Agent shall be liable to any Lender for
any failure to do so, except to the extent that such failure is attributable to
such Agent's gross negligence or willful misconduct. Lenders acknowledge that
Borrowers are required to provide Financial Statements and Collateral Reports to
Lenders in accordance with ANNEXES E and F hereto and agree that neither Agent
shall have any duty to provide the same to Lenders.
(f) ACTIONS IN CONCERT. Anything in this Agreement to the
contrary notwithstanding, each Lender hereby agrees with each other Lender that
no Lender shall take any action to protect or enforce its rights arising out of
this Agreement or the Notes (including exercising any rights of set-off) without
first obtaining the prior written consent of Administrative Agent and Requisite
Lenders, it being the intent of Lenders that any such action to protect or
enforce rights under this Agreement and the Notes shall be taken in concert and
at the direction or with the consent of Administrative Agent.
10. SUCCESSORS AND ASSIGNS
10.1 SUCCESSORS AND ASSIGNS. This Agreement and the other Loan
Documents shall be binding on and shall inure to the benefit of each Credit
Party, Agents, Lenders and their respective successors and assigns (including,
in the case of any Credit Party, a debtor-in-possession on behalf of such Credit
Party), except as otherwise provided herein or therein. No Credit Party may
assign, transfer, hypothecate or otherwise convey its rights, benefits,
obligations or duties hereunder or under any of the other Loan Documents without
the prior express written consent of Administrative Agent and Lenders. Any such
purported assignment, transfer, hypothecation or other conveyance by any Credit
Party without the prior express written consent of Administrative Agent and
Lenders shall be void. The terms and provisions of this Agreement are for the
purpose of defining the relative rights and obligations of each Credit Party,
Agents and Lenders with respect to the transactions contemplated hereby and no
Person shall be a third party beneficiary of any of the terms and provisions of
this Agreement or any of the other Loan Documents.
11. MISCELLANEOUS
11.1 COMPLETE AGREEMENT; MODIFICATION OF AGREEMENT. The Loan
Documents constitute the complete agreement between the parties with respect to
the subject matter thereof and may not be modified, altered or amended except as
set forth in SECTION 11.2 below. Any letter of intent, commitment letter and/or
fee letter (other than the GE Capital Fee Letter) and/or confidentiality
agreement between any Credit Party and either Agent or any Lender or any of
their respective affiliates, predating this Agreement and relating to a
financing of substantially similar form, purpose or effect shall be superseded
by this Agreement.
11.2 AMENDMENTS AND WAIVERS.
(a) Except for actions expressly permitted to be taken by
Administrative Agent or Revolver Agent, no amendment, modification, termination
or waiver of any provision of this Agreement or any of the Notes, or any consent
to any departure by any Credit Party therefrom, shall in any event be effective
unless the same shall be in writing and signed by Administrative Agent and
Borrowers, and by Requisite Lenders, Supermajority Revolving Lenders or all
affected Lenders, as required pursuant to this Agreement. Except as set forth in
CLAUSES (B) and (C) below, all such amendments, modifications, terminations or
waivers requiring the consent of any Lenders shall require the written consent
of Requisite Lenders.
(b) No amendment, modification, termination or waiver of or
consent with respect to any provision of this Agreement which increases the
percentage advance rates set forth in the definition of the Borrowing Base
(Revolver A) or the Borrowing Base (Revolver B), or which makes less restrictive
the nondiscretionary criteria for exclusion from Eligible Accounts,
Eligible Inventory and Eligible Lease Receivables set forth in SECTIONS 1.6, 1.7
and 1.8, shall be effective unless the same shall be in writing and signed by
Administrative Agent, Revolver Agent, Supermajority Revolving Lenders and
Borrower Representative. No amendment, modification, termination or waiver of or
consent with respect to any provision of this Agreement which waives compliance
with the conditions precedent set forth in SECTION 2.2, SECTION 2.3 or SECTION
2.4 to the making of any Loan or the incurrence of any Letter of Credit
Obligations shall be effective unless the same shall be in writing and signed by
Administrative Agent and Requisite Lenders, and Borrower Representative.
Notwithstanding anything contained in this Agreement to the contrary, no waiver
or consent with respect to any Default (if in connection therewith
Administrative Agent, Revolver Agent or Requisite Lenders, as the case may be,
have exercised its or their right to suspend the making or incurrence of further
Advances or Letter of Credit Obligations pursuant to SECTION 8.2(A)) or any
Event of Default shall be effective for purposes of the conditions precedent to
the making of Loans or the incurrence of Letter of Credit Obligations set forth
in SECTION 2.2 unless the same shall be in writing and signed by Administrative
Agent, Revolver Agent or Requisite Lenders, as the case may be, and Borrower
Representative.
(c) No amendment, modification, termination or waiver of this
Agreement, the Notes or any of the other Loan Documents shall, unless in writing
and signed by Administrative Agent and each Lender directly affected thereby, do
any of the following: (i) increase the principal amount of any Lender's
Commitment (which action shall be deemed to directly affect all Lenders); (ii)
reduce the principal of, rate of interest on or Fees payable with respect to any
Loan or Letter of Credit Obligations of any affected Lender; (iii) extend any
scheduled payment date or final maturity date of the principal amount of any
Loan of any affected Lender; (iv) waive, forgive, defer, extend or postpone any
payment of principal, interest or Fees as to any affected Lender; (v) except as
otherwise permitted herein or in the other Loan Documents, release, or permit
any Credit Party to sell or otherwise dispose of, any Collateral with a value
exceeding $5,000,000 in the aggregate (which action shall be deemed to directly
affect all Lenders); (vi) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans which shall be required for
Lenders or any of them to take any action hereunder; and (vii) amend or waive
this SECTION 11.2 or the definitions of the terms "Requisite Lenders" or
"Supermajority Revolving Lenders" insofar as such definitions affect the
substance of this SECTION 11.2. Furthermore, no amendment, modification,
termination or waiver affecting the rights or duties of Administrative Agent
under this Agreement or any other Loan Document shall be effective unless in
writing and signed by Administrative Agent, in addition to Lenders required
hereinabove to take such action, and no amendment, modification, termination or
waiver affecting the rights or duties of Revolver Agent under this Agreement or
any other Loan Document shall be effective unless in writing and signed by
Revolver Agent, in addition to Lenders required hereinabove to take such action.
Each amendment, modification, termination or waiver shall be effective only in
the specific instance and for the specific purpose for which it was given. No
amendment, modification, termination or waiver shall be required for
Administrative Agent to take additional Collateral pursuant to any Loan
Document. No
amendment, modification, termination or waiver of any provision of any Note
shall be effective without the written concurrence of the holder of that Note.
No notice to or demand on any Credit Party in any case shall entitle such Credit
Party or any other Credit Party to any other or further notice or demand in
similar or other circumstances. Any amendment, modification, termination, waiver
or consent effected in accordance with this SECTION 11.2 shall be binding upon
each holder of the Notes at the time outstanding and each future holder of the
Notes.
(d) If, in connection with any proposed amendment,
modification, waiver or termination (a "PROPOSED CHANGE"):
(i) requiring the consent of all affected Lenders,
the consent of Requisite Lenders is obtained, but the consent of other Lenders
whose consent is required is not obtained (any such Lender whose consent is not
obtained as described this CLAUSE (I) and in CLAUSES (II), (III) and (IV) below
being referred to as a "NON-CONSENTING LENDER"), or
(ii) requiring the consent of Supermajority Revolving
Lenders, the consent of (a) Lenders having more than sixty-six and two-thirds
percent (66 2/3%) of the Revolving Loan Commitments of all Lenders, or (b) if
the Revolving Loan Commitments have been terminated, more than sixty-six and
two-thirds percent (66 2/3%) of the aggregate outstanding amount of the
Revolving Loans, is obtained, but the consent of Supermajority Revolving Lenders
is not obtained, or
(iii) requiring the consent of Requisite Lenders, the
consent of Lenders holding 51% or more of the aggregate Commitments is obtained,
but the consent of Requisite Lenders is not obtained,
then, so long as Administrative Agent is not a Non-Consenting Lender, at
Borrower Representative's request, Administrative Agent or a Person acceptable
to Administrative Agent shall have the right with Administrative Agent's consent
and in Administrative Agent's sole discretion (but shall have no obligation) to
purchase from such Non-Consenting Lenders, and such Non-Consenting Lenders agree
that they shall, upon Administrative Agent's request, sell and assign to
Administrative Agent or such Person, all of the Commitments of such
Non-Consenting Lender for an amount equal to the principal balance of all Loans
held by the Non-Consenting Lender and all accrued interest and Fees with respect
thereto through the date of sale, such purchase and sale to be consummated
pursuant to an executed Assignment Agreement. Any such sale and assignment to a
Person other than Administrative Agent or another Lender shall be subject to the
satisfaction of the applicable requirements of SECTION 9.1 (other than the
payment of the $3,500 fee).
(e) Upon indefeasible payment in full in cash and performance
of all of the Obligations (other than indemnification Obligations under SECTION
1.14), termination of the Commitments and a release of all claims against Agents
and Lenders, and so long as no suits,
actions, proceedings, or claims are pending or threatened against any
Indemnified Person asserting any damages, losses or liabilities that are
Indemnified Liabilities, Administrative Agent shall deliver to Borrowers
termination statements, mortgage releases and other documents necessary or
appropriate to evidence the termination of the Liens securing payment of the
Obligations.
11.3 FEES AND EXPENSES. Borrowers shall reimburse
Administrative Agent for all out-of-pocket expenses incurred in connection with
the preparation of the Loan Documents (including the reasonable fees and
expenses of all of its special loan counsel, advisors, consultants and auditors
retained in connection with the Loan Documents and the Related Transactions and
advice in connection therewith). Borrowers shall reimburse Administrative Agent
and Revolver Agent (and, with respect to CLAUSES (C) and (D) below, all Lenders)
for all fees, costs and expenses, including the reasonable fees, costs and
expenses of counsel or other advisors (including environmental and management
consultants and appraisers) for advice, assistance, or other representation in
connection with:
(a) the forwarding to Borrowers or any other Person on behalf
of Borrowers by Revolver Agent of the proceeds of the Loans;
(b) any amendment, modification or waiver of, or consent with
respect to, any of the Loan Documents or Related Transactions Documents or
advice in connection with the administration of the Loans made pursuant hereto
or its rights hereunder or thereunder;
(c) any litigation, contest, dispute, suit, proceeding or
action (whether instituted by Administrative Agent, any Lender, any Borrower or
any other Person) in any way relating to the Collateral, any of the Loan
Documents or any other agreement to be executed or delivered in connection
therewith or herewith, whether as party, witness, or otherwise, including any
litigation, contest, dispute, suit, case, proceeding or action, and any appeal
or review thereof, in connection with a case commenced by or against any or all
of the Borrowers or any other Person that may be obligated to Administrative
Agent by virtue of the Loan Documents; including any such litigation, contest,
dispute, suit, proceeding or action arising in connection with any work-out or
restructuring of the Loans during the pendency of one or more Events of Default;
PROVIDED that in the case of reimbursement of counsel for Lenders other than
Administrative Agent, such reimbursement shall be limited to one counsel for all
such Lenders; PROVIDED FURTHER that Borrowers shall not be obligated to
reimburse Administrative Agent or any Lender in respect of any litigation,
contest, dispute, suit or proceeding solely between the Administrative Agent or
any Lender on the one hand and any other Lender on the other hand unless that
same shall be the result of any act or omission of the Borrowers or any of them;
(d) any attempt to enforce any remedies of Administrative
Agent against any or all of the Credit Parties or any other Person that may be
obligated to Administrative Agent or any Lender by virtue of any of the Loan
Documents; including any such attempt to enforce any
such remedies in the course of any work-out or restructuring of the Loans during
the pendency of one or more Events of Default; PROVIDED that in the case of
reimbursement of counsel for Lenders other than Administrative Agent, such
reimbursement shall be limited to one counsel for all such Lenders;
(e) any work-out or restructuring of the Loans during the
pendency of one or more Events of Default;
(f) efforts to (i) monitor the Loans or any of the other
Obligations, (ii) evaluate, observe or assess any of the Credit Parties or their
respective affairs, and (iii) verify, protect, evaluate, assess, appraise,
collect, sell, liquidate or otherwise dispose of any of the Collateral;
(g) up to two field examination audits conducted by or on
behalf of the Administrative Agent or Revolver Agent per year after the Closing
Date (or more if a Default or Event of Default shall have occurred and be
continuing); provided that, in the event of such audits which are conducted when
no Default or Event of Default shall have occurred and be continuing, the field
audit charges shall be limited to a range between $775 and $825 per diem per
auditor plus actual out-of-pocket expenses; provided further that nothing herein
shall limit the access provided to the Agents and the Lenders pursuant to the
provisions of SECTION 1.15;
including, as to each of clauses (a) through (f) above, all reasonable
attorneys' and other professional and service providers' fees arising from such
services, including those in connection with any appellate proceedings; and all
expenses, costs, charges and other fees incurred by such counsel and others in
any way or respect arising in connection with or relating to any of the events
or actions described in this SECTION 11.3 shall be payable, on demand, by
Borrowers to Administrative Agent. Without limiting the generality of the
foregoing, such expenses, costs, charges and fees may include: fees, costs and
expenses of accountants, environmental advisors, appraisers, investment bankers,
management and other consultants and paralegals; court costs and expenses;
photocopying and duplication expenses; court reporter fees, costs and expenses;
long distance telephone charges; air express charges; telegram or telecopy
charges; secretarial overtime charges; and expenses for travel, lodging and food
paid or incurred in connection with the performance of such legal or other
advisory services.
11.4 NO WAIVER. Administrative Agent's, Revolver Agent's or
any Lender's failure, at any time or times, to require strict performance by the
Credit Parties of any provision of this Agreement and any of the other Loan
Documents shall not waive, affect or diminish any right of Administrative Agent,
Revolver Agent or such Lender thereafter to demand strict compliance and
performance therewith. Any suspension or waiver of an Event of Default shall not
suspend, waive or affect any other Event of Default whether the same is prior or
subsequent thereto and whether the same or of a different type. Subject to the
provisions of SECTION 11.2, none of the undertakings, agreements, warranties,
covenants and representations of any Credit
Party contained in this Agreement or any of the other Loan Documents and no
Default or Event of Default by any Credit Party shall be deemed to have been
suspended or waived by Administrative Agent, Revolver Agent or any Lender,
unless such waiver or suspension is by an instrument in writing signed by an
officer of or other authorized employee of Administrative Agent, Revolver Agent
and the applicable required Lenders, and directed to Borrowers specifying such
suspension or waiver.
11.5 REMEDIES. Agents' and Lenders' rights and remedies under
this Agreement shall be cumulative and nonexclusive of any other rights and
remedies which either Agent or any Lender may have under any other agreement,
including the other Loan Documents, by operation of law or otherwise. Recourse
to the Collateral shall not be required.
11.6 SEVERABILITY. Wherever possible, each provision of this
Agreement and the other Loan Documents shall be interpreted in such a manner as
to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
11.7 CONFLICT OF TERMS. Except as otherwise provided in this
Agreement or any of the other Loan Documents by specific reference to the
applicable provisions of this Agreement, if any provision contained in this
Agreement is in conflict with, or inconsistent with, any provision in any of the
other Loan Documents, the provision contained in this Agreement shall govern and
control.
11.8 CONFIDENTIALITY. Each Agent and each Lender agree to use
commercially reasonable efforts (equivalent to the efforts such Agent or such
Lender applies to maintaining the confidentiality of its own confidential
information) to maintain as confidential all confidential information provided
to them by the Credit Parties and designated as confidential for a period of two
(2) years following receipt thereof, except that either Agent and any Lender may
disclose such information (a) to Persons employed or engaged by such Agent or
such Lender in evaluating, approving, structuring or administering the Loans and
the Commitments; (b) to any bona fide assignee or participant or potential
assignee or participant that has agreed in writing to comply with the covenant
contained in this SECTION 11.8 (and any such bona fide assignee or participant
or potential assignee or participant may disclose such information to Persons
employed or engaged by them as described in CLAUSE (A) above); (c) as required
or requested by any Governmental Authority or reasonably believed by such Agent
or such Lender to be compelled by any court decree, subpoena or legal or
administrative order or process; (d) as, on the advice of such Agent's or such
Lender's counsel, required by law; (e) in connection with the exercise of any
right or remedy under the Loan Documents or in connection with any Litigation to
which such Agent or such Lender is a party; or (f) which ceases to be
confidential through no fault of such Agent or such Lender.
11.9 GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN
ANY OF THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS
SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE
AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. EACH CREDIT PARTY
HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE CREDIT PARTIES, AGENTS AND LENDERS
PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS,
PROVIDED, THAT AGENTS, LENDERS AND THE CREDIT PARTIES ACKNOWLEDGE THAT ANY
APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW
YORK COUNTY, CITY OF NEW YORK, NEW YORK AND, PROVIDED, FURTHER NOTHING IN THIS
AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE ADMINISTRATIVE AGENT FROM
BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE
ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER IN FAVOR OF ADMINISTRATIVE AGENT. EACH CREDIT
PARTY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY
ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH CREDIT PARTY HEREBY WAIVES
ANY OBJECTION WHICH SUCH CREDIT PARTY MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH
COURT. EACH CREDIT PARTY HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS,
COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT
SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED
OR CERTIFIED MAIL ADDRESSED TO SUCH CREDIT PARTY AT THE ADDRESS SET FORTH IN
ANNEX I OF THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED
UPON THE EARLIER OF SUCH CREDIT PARTY'S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS
AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.
11.10 NOTICES. Except as otherwise provided herein, whenever
it is provided herein that any notice, demand, request, consent, approval,
declaration or other communication
shall or may be given to or served upon any of the parties by any other parties,
or whenever any of the parties desires to give or serve upon any other parties
any communication with respect to this Agreement, each such notice, demand,
request, consent, approval, declaration or other communication shall be in
writing and shall be deemed to have been validly served, given or delivered (a)
upon the earlier of actual receipt and three (3) Business Days after deposit in
the United States Mail, registered or certified mail, return receipt requested,
with proper postage prepaid, (b) upon transmission, when sent by telecopy or
other similar facsimile transmission (with such telecopy or facsimile promptly
confirmed by delivery of a copy by personal delivery or United States Mail as
otherwise provided in this SECTION 11.10), (c) one (1) Business Day after
deposit with a reputable overnight courier with all charges prepaid or (d) when
delivered, if hand-delivered by messenger, all of which shall be addressed to
the party to be notified and sent to the address or facsimile number indicated
on ANNEX I or to such other address (or facsimile number) as may be substituted
by notice given as herein provided. The giving of any notice required hereunder
may be waived in writing by the party entitled to receive such notice. Failure
or delay in delivering copies of any notice, demand, request, consent, approval,
declaration or other communication to any Person (other than Borrower
Representative, Administrative Agent or Revolver Agent) designated on ANNEX I to
receive copies shall in no way adversely affect the effectiveness of such
notice, demand, request, consent, approval, declaration or other communication.
11.11 SECTION TITLES. The Section titles and Table of Contents
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of the agreement between the
parties hereto.
11.12 COUNTERPARTS. This Agreement may be executed in any
number of separate counterparts, each of which shall constitute but one and the
same agreement.
11.13 WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN
CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY
RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE
STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES
DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.
THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL
SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG AGENTS, LENDERS AND ANY CREDIT
PARTY ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF
THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.
11.14 PRESS RELEASES. Each Credit Party executing this
Agreement agrees that neither it nor its Affiliates will in the future issue any
press releases or other public disclosure using the name of any Lender or their
affiliates or referring to this Agreement, the other Loan Documents or the
Related Transactions Documents without at least two (2) Business Days' prior
notice to such Lender and without the prior written consent of such Lender
unless (and only to the extent that) such Credit Party or Affiliate is required
to do so under law and then, in any event, such Credit Party or Affiliate will
consult with such Lender before issuing such press release or other public
disclosure. Each Credit Party consents to the publication by either Agent or any
Lender of a tombstone or similar advertising material relating to the financing
transactions contemplated by this Agreement. Administrative Agent reserves the
right to provide to industry trade organizations information necessary and
customary for inclusion in league table measurements with Borrowers' consent
which shall not be unreasonably withheld or delayed. Notwithstanding the above,
the parties hereto acknowledge that Hi-Rise shall be required to file this
Agreement and certain of the other Loan Documents with, and describe the terms
of this Agreement and certain of the other Loan Documents and identify the
Lenders in, reports filed by Hi-Rise pursuant to the Federal securities laws.
11.15 REINSTATEMENT. This Agreement shall remain in full force
and effect and continue to be effective should any petition be filed by or
against any Borrower for liquidation or reorganization, should any Borrower
become insolvent or make an assignment for the benefit of any creditor or
creditors or should a receiver or trustee be appointed for all or any
significant part of any Borrower's assets, and shall continue to be effective or
to be reinstated, as the case may be, if at any time payment and performance of
the Obligations, or any part thereof, is, pursuant to applicable law, rescinded
or reduced in amount, or must otherwise be restored or returned by any obligee
of the Obligations, whether as a "voidable preference," "fraudulent conveyance,"
or otherwise, all as though such payment or performance had not been made. In
the event that any payment, or any part thereof, is rescinded, reduced, restored
or returned, the Obligations shall be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or returned.
11.16 ADVICE OF COUNSEL. Each of the parties represents to
each other party hereto that it has discussed this Agreement and, specifically,
the provisions of SECTIONS 11.9 and 11.13, with its counsel.
11.17 NO STRICT CONSTRUCTION. The parties hereto have
participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement.
11.18 JUDGMENT CURRENCY. All payments of principal, interest,
fees and other payments due hereunder, under the Notes and each of the other
Loan Documents shall be made in Dollars, regardless of any law, rule, regulation
or statute, whether now or hereafter in existence or in effect in any
jurisdiction, which affects or purports to affect such obligations. To the
fullest extent permitted by applicable law, the obligation of Borrowers in
respect of any amount due under this Agreement, the Notes or any other Loan
Document shall, notwithstanding any payment in any other currency (whether
pursuant to a judgment or otherwise), be discharged only to the extent of the
amount in Dollars that the person entitled to receive that payment may, in
accordance with normal banking procedures, purchase with the sum paid in that
other currency (after any premium annual costs of exchange) on the Business Day
immediately following the day on which such person receives such payment. If the
amount in Dollars that may be so purchased for any reason falls short of the
amount originally due, Borrowers shall pay such additional amounts, in Dollars,
as may be necessary to compensate for the shortfall. Any obligation of Borrowers
not discharged by such payment shall, to the fullest extent permitted by
applicable law, be due as a separate and independent obligation and, until
discharged as provided herein, shall continue in full force and effect.
12. CROSS-GUARANTY
12.1 CROSS-GUARANTY. Each Borrower hereby agrees that such
Borrower is jointly and severally liable for, and hereby absolutely and
unconditionally guarantees to Administrative Agent, Revolver Agent and Lenders
and their respective successors and assigns, the full and prompt payment
(whether at stated maturity, by acceleration or otherwise) and performance of,
all Obligations owed or hereafter owing to Administrative Agent, Revolver Agent
and Lenders by each other Borrower. Each Borrower agrees that its guaranty
obligation hereunder is a continuing guaranty of payment and performance and not
of collection, that its obligations under this SECTION 12 shall not be
discharged until payment and performance, in full, of the Obligations has
occurred, and that its obligations under this SECTION 12 shall be absolute and
unconditional, irrespective of, and unaffected by,
(a) the genuineness, validity, regularity, enforceability or
any future amendment of, or change in, this Agreement, any other Loan Document
or any other agreement, document or instrument to which any Borrower is or may
become a party;
(b) the absence of any action to enforce this Agreement
(including this SECTION 12) or any other Loan Document or the waiver or consent
by Administrative Agent, Revolver Agent and Lenders with respect to any of the
provisions thereof;
(c) the existence, value or condition of, or failure to
perfect its Lien against, any security for the Obligations or any action, or the
absence of any action, by Administrative Agent, Revolver Agent and Lenders in
respect thereof (including the release of any such security);
(d) the insolvency of any Credit Party; or
(e) any other action or circumstances which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor.
Each Borrower shall be regarded, and shall be in the same position, as principal
debtor with respect to the Obligations guaranteed hereunder.
12.2 WAIVERS BY BORROWERS. Each Borrower expressly waives all
rights it may have now or in the future under any statute, or at common law, or
at law or in equity, or otherwise, to compel Administrative Agent, Revolver
Agent or Lenders to ▇▇▇▇▇▇▇▇ assets or to proceed in respect of the Obligations
guaranteed hereunder against any other Credit Party, any other party or against
any security for the payment and performance of the Obligations before
proceeding against, or as a condition to proceeding against, such Borrower. It
is agreed among each Borrower, each Agent and Lenders that the foregoing waivers
are of the essence of the transaction contemplated by this Agreement and the
other Loan Documents and that, but for the provisions of this SECTION 12 and
such waivers, Agents and Lenders would decline to enter into this Agreement.
12.3 BENEFIT OF GUARANTY. Each Borrower agrees that the
provisions of this SECTION 12 are for the benefit of Agents and Lenders and
their respective successors, transferees, endorsees and assigns, and nothing
herein contained shall impair, as between any other Borrower and Agents or
Lenders, the obligations of such other Borrower under the Loan Documents.
12.4 SUBORDINATION OF SUBROGATION, ETC. (a) Notwithstanding
anything to the contrary in this Agreement or in any other Loan Document, and
except as set forth in SECTION 12.7, each Borrower hereby expressly and
irrevocably subordinates to payment of the Obligations any and all rights at law
or in equity to subrogation, reimbursement, exoneration, contribution,
indemnification or set off and any and all defenses available to a surety,
guarantor or accommodation co-obligor until the Obligations are indefeasibly
paid in full in cash. Each Borrower acknowledges and agrees that this
subordination is intended to benefit Agents and Lenders and shall not limit or
otherwise affect such Borrower's liability hereunder or the enforceability of
this SECTION 12, and that Agents, Lenders and their respective successors and
assigns are intended third party beneficiaries of the waivers and agreements set
forth in this SECTION 12.4.
(b) As an independent covenant, each Borrower hereby further
expressly covenants and agrees for the benefit of Administrative Agent, Revolver
Agent and Lenders that all present or future indebtedness, obligations and
liabilities of each such Borrower to any other Borrower of whatsoever
description (collectively, the "JUNIOR CLAIMS") shall be subordinate and junior
in right of payment to all Obligations of Borrowers to Administrative Agent,
Revolver
Agent and Lenders (collectively, the "SENIOR CLAIMS"). If an Event of Default
shall occur, then, unless and until such Event of Default shall have been cured
or shall have ceased to exist, no direct or indirect payment (in cash, property,
securities by set-off or otherwise) shall be made by any Borrower to any other
Borrower on account of or in any manner in respect of any Junior Claim except
such payments and distributions the proceeds of which shall be applied to the
Senior Claims. In the event of a Proceeding (as hereinafter defined), all Senior
Claims shall first be paid in full before any direct or indirect payment or
distribution (in cash, property, securities by set-off or otherwise) shall be
made to any Borrower on account of or in any manner in respect of any Junior
Claim except such payments and distributions the proceeds of which shall be
applied to the Senior Claims. For the purposes of the previous sentence, a
"PROCEEDING" shall occur if any Borrower shall make an assignment for the
benefit of creditors, file a petition in bankruptcy, have entered against or in
favor of it an order for relief under the Bankruptcy Code or similar law of any
other jurisdiction, generally fail to pay its debts as they come due (either as
to number or amount), admit in writing its inability to pay its debts generally
as they mature, make a voluntary assignment for the benefit of creditors,
commence any proceeding relating to it under any reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction, whether now or hereafter in effect, or by any act, indicate its
consent to, approval of or acquiescence in any such proceeding or in the
appointment of any receiver of, or trustee or custodian (as defined in the
Bankruptcy Code) for itself, or any substantial part of its property, or a
trustee or a receiver shall be appointed for any Borrower or for a substantial
part of the property of any Borrower and such appointment remains in effect for
more than thirty (30) days or any Borrower shall indicate its consent thereto,
approval therefor or acquiescence therein, or a petition under any bankruptcy,
reorganization, arrangement, readjustment of debt, dissolution or liquidation
law or statute of any jurisdiction (whether now or hereafter in effect) shall be
filed against any Borrower and such petition shall not be dismissed within
thirty (30) days after such filing, an order for relief shall be entered in such
proceeding, or any Borrower shall indicate its consent thereto, approval
therefor or acquiescence therein. In the event any direct or indirect payment or
distribution is made to any Borrower in contravention of this Section, such
payment or distribution shall be deemed received in trust for the benefit of
Administrative Agent, Revolver Agent and Lenders and shall be immediately paid
over to Administrative Agent for application against the Obligations. Each
Borrower agrees to execute such additional documents as Administrative Agent may
reasonably request to evidence the subordination provided for in this SECTION
12.4.
12.5 ELECTION OF REMEDIES. If either Agent or any Lender may,
under applicable law, proceed to realize its benefits under any of the Loan
Documents giving such Agent or such Lender a Lien upon any Collateral, whether
owned by any Borrower or by any other Person, either by judicial foreclosure or
by non-judicial sale or enforcement, either Agent or any Lender may, at its sole
option, determine which of its remedies or rights it may pursue without
affecting any of its rights and remedies under this SECTION 12. If, in the
exercise of any of its rights and remedies, either Agent or any Lender shall
forfeit any of its rights or remedies, including its right to enter a deficiency
judgment against any Borrower or any other Person,
whether because of any applicable laws pertaining to "election of remedies" or
the like, each Borrower hereby consents to such action by such Agent or such
Lender and waives any claim based upon such action, even if such action by such
Agent or such Lender shall result in a full or partial loss of any rights of
subrogation which each Borrower might otherwise have had but for such action by
such Agent or such Lender. Any election of remedies which results in the denial
or impairment of the right of either Agent or any Lender to seek a deficiency
judgment against any Borrower shall not impair any other Borrower's obligation
to pay the full amount of the Obligations. In the event either Agent or any
Lender shall bid at any foreclosure or trustee's sale or at any private sale
permitted by law or the Loan Documents, such Agent or such Lender may bid all or
less than the amount of the Obligations and the amount of such bid need not be
paid by such Agent or such Lender but shall be credited against the Obligations.
The amount of the successful bid at any such sale, whether either Agent, any
Lender or any other party is the successful bidder, shall be conclusively deemed
to be the fair market value of the Collateral and the difference between such
bid amount and the remaining balance of the Obligations shall be conclusively
deemed to be the amount of the Obligations guaranteed under this SECTION 12,
notwithstanding that any present or future law or court decision or ruling may
have the effect of reducing the amount of any deficiency claim to which either
Agent or any Lender might otherwise be entitled but for such bidding at any such
sale.
12.6 LIMITATION. Notwithstanding any provision herein
contained to the contrary, each Borrower's liability under this SECTION 12
(which liability is in any event in addition to amounts for which such Borrower
is primarily liable under SECTION 1) shall be limited to an amount not to exceed
as of any date of determination the greater of:
(a) the net amount of all Loans advanced to any other Borrower
under this Agreement and then re-loaned or otherwise transferred to, or for the
benefit of, such Borrower; and
(b) the amount which could be claimed by Agents and Lenders
from such Borrower under this SECTION 12 without rendering such claim voidable
or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under any
applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance
Act or similar statute or common law after taking into account, among other
things, such Borrower's right of contribution and indemnification from each
other Borrower under SECTION 12.7.
12.7 CONTRIBUTION WITH RESPECT TO GUARANTY OBLIGATIONS.
(a) To the extent that any Borrower shall make a payment under
this SECTION 12 of all or any of the Obligations (other than Loans made to that
Borrower for which it is primarily liable) (a "GUARANTOR PAYMENT") which, taking
into account all other Guarantor Payments then previously or concurrently made
by any other Borrower, exceeds the amount which such Borrower would otherwise
have paid if each Borrower had paid the aggregate Obligations satisfied by such
Guarantor Payment in the same proportion that such Borrower's "ALLOCABLE AMOUNT"
(as defined below) (as determined immediately prior to such Guarantor Payment)
bore to the aggregate Allocable Amounts of each of the Borrowers as determined
immediately prior to the making of such Guarantor Payment, THEN, following
indefeasible payment in full in cash of the Obligations and termination of the
Commitments, such Borrower shall be entitled to receive contribution and
indemnification payments from, and be reimbursed by, each other Borrower for the
amount of such excess, PRO RATA based upon their respective Allocable Amounts in
effect immediately prior to such Guarantor Payment.
(b) As of any date of determination, the "ALLOCABLE AMOUNT" of
any Borrower shall be equal to the maximum amount of the claim which could then
be recovered from such Borrower under this SECTION 12 without rendering such
claim voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy
Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform
Fraudulent Conveyance Act or similar statute or common law.
(c) This SECTION 12.7 is intended only to define the relative
rights of Borrowers and nothing set forth in this SECTION 12.7 is intended to or
shall impair the obligations of Borrowers, jointly and severally, to pay any
amounts as and when the same shall become due and payable in accordance with the
terms of this Agreement, including SECTION 12.1. Nothing contained in this
SECTION 12.7 shall limit the liability of any Borrower to pay the Loans made
directly or indirectly to that Borrower and accrued interest, Fees and expenses
with respect thereto for which such Borrower shall be primarily liable.
(d) The parties hereto acknowledge that the rights of
contribution and indemnification hereunder shall constitute assets of the
Borrower to which such contribution and indemnification is owing.
(e) The rights of the indemnifying Borrowers against other
Credit Parties under this SECTION 12.7 shall be exercisable upon the full and
indefeasible payment of the Obligations and the termination of the Commitments.
12.8 LIABILITY CUMULATIVE. The liability of Borrowers under
this SECTION 12 is in addition to and shall be cumulative with all liabilities
of each Borrower to Agents and Lenders under this Agreement and the other Loan
Documents to which such Borrower is a party or in
respect of any Obligations or obligation of the other Borrower, without any
limitation as to amount, unless the instrument or agreement evidencing or
creating such other liability specifically provides to the contrary.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be to be dated for reference as of the date first above written,
but have in fact duly executed and delivered this Agreement this day of October,
1998.
BORROWERS: HI-RISE RECYCLING SYSTEMS, INC.,
a Florida corporation
By: /s/
------------------------------------------
Name:
Title:
IDC ACQUISITION SUB, INC.,
a New York corporation
By: /s/
------------------------------------------
Name:
Title:
▇▇▇▇▇▇▇▇▇ COMPANY, INC.,
an Ohio corporation
By: /s/
------------------------------------------
Name:
Title:
RECYCLTECH ENTERPRISES INC.,
an Ontario corporation
By: /s/
------------------------------------------
Name:
Title:
HESCO SALES, INC., a Florida corporation
By: /s/
------------------------------------------
Name:
Title:
UNITED TRUCK AND BODY CORPORATION,
a Florida corporation
By: /s/
------------------------------------------
Name:
Title:
HESCO EXPORT CORPORATION, a Florida corporation
By: /s/
------------------------------------------
Name:
Title:
BPI ACQUISITION CORP., a South Carolina corporation
By: /s/
------------------------------------------
Name:
Title:
DII ACQUISITION CORP., a Connecticut corporation
By: /s/
------------------------------------------
Name:
Title:
ADMINISTRATIVE AGENT: GENERAL ELECTRIC CAPITAL CORPORATION,
AS ADMINISTRATIVE AGENT
By: /s/
------------------------------------------
Name:
Title:
REVOLVER AGENT: NATIONSBANK, N.A.,
AS REVOLVER AGENT
By: /s/
------------------------------------------
Name:
Title:
LENDERS: GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/
------------------------------------------
Name:
Title:
NATIONSBANK, N.A.
By: /s/
------------------------------------------
Name:
Title:
KEY CORPORATE CAPITAL INC.
By: /s/
------------------------------------------
Name:
Title:
ANNEX A (RECITALS)
TO
CREDIT AGREEMENT
ANNEX A
DEFINITIONS
Capitalized terms used in the Loan Documents shall have
(unless otherwise provided elsewhere in the Loan Documents) the following
respective meanings and all section references in the following definitions
shall refer to Sections of the Agreement:
"ACCOUNT DEBTOR" shall mean any Person who may become
obligated to any Credit Party under, with respect to, or on account of, an
Account.
"ACCOUNTS" shall mean all "accounts," as such term is defined
in the Code, now owned or hereafter acquired by any Credit Party and, in any
event, including (a) all accounts receivable, other receivables, book debts and
other forms of obligations (other than forms of obligations evidenced by Chattel
Paper, Documents or Instruments) now owned or hereafter received or acquired by
or belonging or owing to any Credit Party, whether arising out of goods sold or
services rendered by it or from any other transaction (including any such
obligations which may be characterized as an account or contract right under the
Code), (b) all of each Credit Party's rights in, to and under all purchase
orders or receipts now owned or hereafter acquired by it for goods or services,
(c) all of each Credit Party's rights to any goods represented by any of the
foregoing (including unpaid sellers' rights of rescission, replevin, reclamation
and stoppage in transit and rights to returned, reclaimed or repossessed goods),
(d) all monies due or to become due to any Credit Party, under all purchase
orders and contracts for the sale of goods or the performance of services or
both by such Credit Party or in connection with any other transaction (whether
or not yet earned by performance on the part of such Credit Party) now or
hereafter in existence, including the right to receive the proceeds of said
purchase orders and contracts, and (e) all collateral security and guarantees of
any kind, now or hereafter in existence, given by any Person with respect to any
of the foregoing.
"ACME CHUTE" shall mean Acme Chute Company, Inc., a Florida
corporation.
"ACME CHUTE ACQUISITION" shall mean the purchase by Hi-Rise of
all of the outstanding capital stock of Acme Chute.
"ACME CHUTE ACQUISITION AGREEMENT" shall mean that certain
Stock Purchase Agreement, dated as of October 16, 1998, by and among Hi-Rise,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and Acme Chute.
"ACME CHUTE CLOSING DATE" shall mean the date upon which
Hi-Rise shall have consummated the closing of the Acme Chute Acquisition.
"ACQUISITION" shall mean the Bes-Pac Acquisition, the Acme
Chute Acquisition, the ▇▇▇▇▇▇ Acquisition or any Permitted Acquisition.
"ACQUISITION LENDERS" shall mean, as of the date of any
determination thereof, those Lenders having Acquisition Loan Commitments.
"ACQUISITION LOAN" shall mean any Loan made pursuant to the
provisions of SECTION 1.1(E).
"ACQUISITION LOAN ADVANCE" shall have the meaning assigned to
it in SECTION 1.1(E)(I).
"ACQUISITION LOAN COMMITMENT" shall mean (a) as to any Lender
with a Acquisition Loan Commitment, the commitment of such Lender to make its
Pro Rata Share of the Acquisition Loan as set forth on ANNEX J to the Agreement
or in the most recent Assignment Agreement executed by such Lender, and (b) as
to all Lenders with an Acquisition Loan Commitment, the aggregate commitment of
all Lenders to make Acquisition Loans, which aggregate commitment shall be Eight
Million and No/100 Dollars ($8,000,000.00) on the Closing Date, as to each of
clauses (a) and (b), as such Acquisition Loan Commitments may be reduced,
amortized or adjusted from time to time in accordance with the Agreement.
"ACQUISITION LOAN NOTE" shall have the meaning assigned to it
in SECTION 1.1(E)(II).
"ADMINISTRATIVE AGENT" shall mean GE Capital or its successor
appointed pursuant to SECTION 9.7.
"ADVANCE" shall mean any Revolving Credit Advance (Revolver
A), Swing Line Advance (Revolver A), Revolving Credit Advance (Revolver B),
Swing Line Advance (Revolver B), Acquisition Loan Advance or funding of the Term
Loan A, as the context may require.
"AFFILIATE" shall mean, with respect to any Person, (a) each
Person that, directly or indirectly, owns or controls, whether beneficially, or
as a trustee, guardian or other fiduciary, five percent (5%) or more of the
Stock having ordinary voting power in the election of directors of such Persons,
(b) each Person that controls, is controlled by or is under common control with
such Person, (c) each of such Person's officers, directors, joint venturers and
partners and (d) in the case of Borrowers, the immediate family members, spouses
and lineal descendants of individuals who are Affiliates of any Borrower. For
the purposes of this definition, "CONTROL" of a Person shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of its management or policies, whether through the ownership of voting
securities, by contract or otherwise; PROVIDED, HOWEVER, that the term
"AFFILIATE" shall specifically exclude each Agent and each Lender.
"AGENT" shall mean, where the context requires or permits,
Administrative Agent or Revolver Agent. "AGENTS" shall mean Administrative Agent
and Revolver Agent.
"AGREEMENT" shall mean the Credit Agreement by and among
Borrowers, the other Credit Parties named therein, GE Capital, as Administrative
Agent and Lender, NationsBank as Revolver Agent and Lender, and the other
Lenders signatory from time to time to the Agreement.
"APPENDICES" shall have the meaning assigned to it in the
recitals to the Agreement.
"APPLICABLE ACQUISITION LOAN INDEX MARGIN" shall mean the per
annum interest rate margin payable in addition to the Index Rate applicable to
the Acquisition Loan, as determined by reference to SECTION 1.5(A) of the
Agreement.
"APPLICABLE ACQUISITION LOAN MATURITY DATE" shall have the
meaning assigned to it in SECTION 1.1(E)(III).
"APPLICABLE L/C MARGIN" shall mean the per annum fee payable
with respect to outstanding Letter of Credit Obligations as determined by
reference to SECTION 1.5(A).
"APPLICABLE MARGINS" means collectively the Applicable L/C
Margin, the Applicable Unused Line Fee Margin, the Applicable Revolver Index
Margin, the Applicable Term Loan A Index Margin and the Applicable Acquisition
Loan Index Margin.
"APPLICABLE REVOLVER INDEX MARGIN" shall mean the per annum
interest rate margin payable in addition to the Index Rate applicable to the
Revolving Loan (Revolver A) and Revolving Loan (Revolver B), as determined by
reference to SECTION 1.5(A) of the Agreement.
"APPLICABLE TERM LOAN A INDEX MARGIN" shall mean the per annum
interest rate payable in addition to the Index Rate applicable to the Term Loan
A, as determined by reference to SECTION 1.5(A) of the Agreement.
"APPLICABLE UNUSED ACQUISITION LINE FEE MARGIN" shall mean the
per annum fee, payable in respect to Borrowers' non-use of the Acquisition Loan
Commitment pursuant to SECTION 1.10(B), which fee is determined by reference to
SECTION 1.5(A).
"APPLICABLE UNUSED REVOLVER FEE MARGIN" shall mean the per
annum fee payable in respect to Borrowers' non-use of the Revolving Loan
Commitments pursuant to SECTION 1.10(B), which fee is determined by reference to
SECTION 1.5(A).
"ASSIGNMENT AGREEMENT" shall have the meaning assigned to it
in SECTION 9.1(A).
"BES-PAC" means Bes-Pac, Inc., a South Carolina corporation.
"BES-PAC ACQUISITION" shall mean the purchase by Hi-Rise or
Bes-Pac Acquisition Corp of all of the outstanding capital stock of Bes-Pac.
"BES-PAC ACQUISITION AGREEMENT" shall mean that certain
Agreement and Plan of Merger, dated as of October 9, 1998, by and among Hi-Rise,
Bes-Pac Acquisition Corp., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and Bes-Pac.
"BES-PAC ACQUISITION CLOSING DATE" shall mean the date upon
which Hi-Rise or Bes-Pac Acquisition Corp. shall have consummated the closing of
the Bes-Pac Acquisition.
"BES-PAC ACQUISITION CORP" means BPI Acquisition Corp., a
South Carolina corporation.
"BORROWER ACCOUNTS" shall have the meaning assigned to it in
ANNEX C.
"BORROWER REPRESENTATIVE" shall mean Hi-Rise Recycling
Systems, Inc. in its capacity as Borrower Representative pursuant to the
provisions of SECTION 1.1(D).
"BORROWERS" and "BORROWER" shall have the respective meanings
assigned thereto in the recitals to the Agreement.
"BORROWING AVAILABILITY" shall mean, as of the date of any
determination thereof, the aggregate of the Borrowing Availability (Revolver A)
and the Borrowing Availability (Revolver B).
"BORROWING AVAILABILITY (REVOLVER A)" shall have the meaning
assigned to it in SECTION 1.1(A)(I).
"BORROWING AVAILABILITY (REVOLVER B)" shall have the meaning
assigned to it in SECTION 1.1(B)(I).
"BORROWING BASE (REVOLVER A)" shall mean, as of any date of
determination by Administrative Agent and Revolver Agent, from time to time, an
amount equal to the sum at such time of:
(a) up to eighty percent (80%) of the book value of Eligible
Accounts as determined in accordance with GAAP, less any Reserves
established by Administrative Agent and Revolver Agent at such time;
and
(b) up to fifty percent (50%) of the book value of Eligible
Inventory valued on a first-in, first-out basis (at the lower of cost
or market) as determined in accordance with GAAP, less any Reserves
established by Administrative Agent and Revolver Agent at such time.
"BORROWING BASE (REVOLVER B)" shall mean, as of any date of
determination by Administrative Agent and Revolver Agent, from time to time, an
amount equal to the sum at such time of up to ninety percent (90%) of the book
value of Eligible Lease Receivables as determined in accordance with GAAP, less
any Reserves established by Administrative Agent and Revolver Agent at such
time.
"BORROWING BASE CERTIFICATE" shall mean a certificate to be
executed and delivered from time to time by each Borrower in the form attached
to the Agreement as EXHIBIT 4.1(B).
"BUSINESS DAY" shall mean any day that is not a Saturday, a
Sunday or a day on which banks are required or permitted to be closed in the
State of New York.
"CAPITAL EXPENDITURES" shall mean, with respect to any Person,
all expenditures (by the expenditure of cash or the incurrence of Indebtedness)
by such Person during any measuring period for any fixed assets or improvements
or for replacements, substitutions or additions thereto, that have a useful life
of more than one year and that are required to be capitalized under GAAP.
"CAPITAL LEASE" shall mean, with respect to any Person, any
lease of any property (whether real, personal or mixed) by such Person as lessee
that, in accordance with GAAP, would be required to be classified and accounted
for as a capital lease on a balance sheet of such Person.
"CAPITAL LEASE OBLIGATION" shall mean, with respect to any
Capital Lease of any Person, the amount of the obligation of the lessee
thereunder that, in accordance with GAAP, would appear on a balance sheet of
such lessee in respect of such Capital Lease.
"CAPITALIZATION" shall mean, with respect to any Person, all
Indebtedness for borrowed money, capital and surplus of such Person as of any
date of determination calculated in accordance with GAAP.
"CASH MANAGEMENT SYSTEMS" shall have the meaning assigned to
it in SECTION 1.9.
"CHANGE OF CONTROL" means any of the following: (a) any person
or group of persons (within the meaning of the Securities Exchange Act of 1934,
as amended) (other than ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, or any trust created for
the benefit of ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ (or any of their respective spouses or lineal descendants) which
provides for the voting of such shares as a single group) shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934, as
amended) of 30% or more of the issued and outstanding shares of capital Stock of
Hi-Rise having the right to vote for the election of directors of Hi-Rise under
ordinary circumstances; (b) during any period of twelve consecutive calendar
months, individuals who at the beginning of such period constituted the board of
directors of Hi-Rise (together with any new directors whose election by the
board of directors of Hi-Rise or whose nomination for election by the
stockholders of Hi-Rise was approved by a vote of a majority of the directors
then still in office who either were directors at the beginning of such period
or whose elections or nomination for election was previously so approved) cease
for any reason other than death or disability to constitute a majority of the
directors then in office, or (c) Hi-Rise shall cease to own and control all of
the economic and voting rights associated with all of the outstanding capital
Stock of each of the Borrowers (other than Hi-Rise).
"CHARGES" shall mean all federal, state, county, city,
municipal, local, foreign or other governmental taxes (including taxes owed to
the PBGC at the time due and payable), levies, assessments, charges, liens,
claims or encumbrances upon or relating to (a) the Collateral, (b) the
Obligations, (c) the employees, payroll, income or gross receipts of any Credit
Party, (d) any Credit Party's ownership or use of any properties or other
assets, or (e) any other aspect of any Credit Party's business.
"CHATTEL PAPER" shall mean any "chattel paper," as such term
is defined in the Code, now owned or hereafter acquired by any Credit Party,
wherever located.
"CLOSING DATE" shall mean October 28, 1998.
"CLOSING CHECKLIST" shall mean the schedule, including all
appendices, exhibits or schedules thereto, listing certain documents and
information to be delivered in connection with the Agreement, the other Loan
Documents and the transactions contemplated thereunder, substantially in the
form attached hereto as ANNEX D.
"CODE" shall mean the Uniform Commercial Code as the same may,
from time to time, be enacted and in effect in the State of New York; PROVIDED,
HOWEVER, in the event that, by reason of mandatory provisions of law, any or all
of the attachment, perfection or priority of Administrative Agent's or any
Lender's security interest in any Collateral is governed by the Uniform
Commercial Code as enacted and in effect in a jurisdiction other than the State
of New York, the term "CODE" shall mean the Uniform Commercial Code as enacted
and in effect in such other jurisdiction solely for purposes of the provisions
hereof relating to such attachment, perfection or priority and for purposes of
definitions related to such provisions.
"COLLATERAL" shall mean the property covered by the Security
Agreement and the other Collateral Documents and any other property, real or
personal, tangible or intangible, now existing or hereafter acquired, that may
at any time be or become subject to a security interest or Lien in favor of
Administrative Agent, on behalf of itself, Revolver Agent and Lenders, to secure
the Obligations.
"COLLATERAL DOCUMENTS" shall mean the Security Agreement, the
Pledge Agreements, the Patent Security Agreements, the Subsidiary Guaranties,
the Subsidiary Security Agreements and all similar agreements entered into from
time to time guaranteeing payment of, or granting a Lien upon property as
security for payment of, the Obligations.
"COLLATERAL REPORTS" shall mean the reports with respect to
the Collateral referred to in ANNEX F.
"COMMITMENT TERMINATION DATE (ACQUISITION LOAN)" shall mean
the earliest of (a) October 28, 2002, (b) the date of termination of Lenders'
obligations to make Advances and/or incur Letter of Credit Obligations or permit
existing Loans to remain outstanding pursuant to SECTION 8.2(B), (c) the date of
indefeasible prepayment in full by Borrowers of the Acquisition Loans and the
permanent reduction of the Acquisition Loan Commitments to zero dollars ($0),
(d) the Commitment Termination Date (Revolver A), (e) the Commitment Termination
Date (Revolver B), and (f) the Commitment Termination Date (Term Loan A).
"COMMITMENT TERMINATION DATE (REVOLVER A)" shall mean the
earliest of (a) October 28, 2003, (b) the date of termination of Lenders'
obligations to make Advances and/or incur Letter of Credit Obligations or permit
existing Loans to remain outstanding pursuant to SECTION 8.2(B), (c) the date of
indefeasible prepayment in full by Borrowers of the Revolving Credit Loans
(Revolver A) and the cancellation and return (or stand-by guarantee) of all
Letters of Credit or the cash collateralization of all Letter of Credit
Obligations pursuant to ANNEX B, and the permanent reduction of the Revolving
Loan Commitments (Revolver A) and the Swing Line Commitments (Revolver A) to
zero dollars ($0), (d) the Commitment Termination Date (Revolver B), and (e) the
Commitment Termination Date (Term Loan A).
"COMMITMENT TERMINATION DATE (REVOLVER B)" shall mean the
earliest of (a) October 28, 2003, (b) the date of termination of Lenders'
obligations to make Advances and/or incur Letter of Credit Obligations or permit
existing Loans to remain outstanding pursuant to SECTION 8.2(B), (c) the date of
indefeasible prepayment in full by Borrowers of the Revolving Credit Loans
(Revolver B) and the permanent reduction of the Revolving Loan Commitments
(Revolver B) and the Swing Line Commitments (Revolver B) to zero dollars ($0),
(d) the Commitment Termination Date (Revolver A), and (e) the Commitment
Termination Date (Term Loan A).
"COMMITMENT TERMINATION DATE (TERM LOAN A)" shall mean the
earliest of (a) October 28, 2003, (b) the date of termination of Lenders'
obligations to make Advances and/or incur Letter of Credit Obligations or permit
existing Loans to remain outstanding pursuant to SECTION 8.2(B), (c) the
Commitment Termination Date (Revolver A), and (d) the Commitment Termination
Date (Revolver B).
"COMMITMENTS" shall mean (a) as to any Lender, the aggregate
of such Lender's Revolving Loan Commitment (Revolver A) (including without
duplication the Swing Line Lender's Swing Line Commitment (Revolver A) as a
subset of its Revolving Loan Commitment (Revolver A)), Revolving Loan Commitment
(Revolver B) (including without duplication the Swing Line Lender's Swing Line
Commitment (Revolver B) as a subset of its Revolving Loan Commitment (Revolver
B)), Term Loan Commitment (Term Loan A), Term Loan Commitment (Term Loan B) and
Acquisition Loan Commitment as set forth on ANNEX J to the Agreement or in the
most recent Assignment Agreement executed by such Lender and (b) as to all
Lenders, the aggregate of all Lenders' Revolving Loan Commitments (Revolver A)
(including without duplication the Swing Line Lender's Swing Line Commitment
(Revolver A) as a subset of its Revolving Loan Commitment (Revolver A)),
Revolving Loan Commitments (Revolver B) (including without duplication the Swing
Line Lender's Swing Line Commitment (Revolver B) as a subset of its Revolving
Loan Commitment (Revolver B)), Term Loan Commitments (Term Loan A), Term Loan
Commitments (Term Loan B) and Acquisition Loan Commitments, which aggregate
commitment shall be Forty Million and No/100 Dollars ($40,000,000.00) on the
Closing Date, as to each of clauses (a) and (b), as such Commitments may be
reduced, amortized or adjusted from time to time in accordance with the
Agreement.
"COMPLIANCE CERTIFICATE" shall have the meaning assigned to it
in ANNEX E.
"CONCENTRATION ACCOUNTS" shall have the meaning assigned to it
in ANNEX C.
"CONTRACTS" shall mean all "contracts," as such term is
defined in the Code, now owned or hereafter acquired by any Credit Party, in any
event, including all contracts, undertakings, or agreements (other than rights
evidenced by Chattel Paper, Documents or Instruments) in or under which any
Credit Party may now or hereafter have any right, title or interest, including
any agreement relating to the terms of payment or the terms of performance of
any Account.
"CONTROL LETTER" means a letter agreement between
Administrative Agent and (i) the issuer of uncertificated securities with
respect to uncertificated securities in the name of any Credit Party, (ii) a
securities intermediary with respect to securities, whether certificated or
uncertificated, securities entitlements and other financial assets held in a
securities account in the name of any Credit Party, (iii) a futures commission
merchant or clearing house with respect to commodity accounts and commodity
contracts held by any Credit Party, whereby, among other things, the issuer,
securities intermediary or futures commission merchant disclaims any security
interest in the applicable financial assets, acknowledges the Lien of
Administrative Agent, on behalf of itself, Revolver Agent and Lenders, on such
financial assets, and agrees to follow the instructions or entitlement orders of
Administrative Agent without further consent by the affected Credit Party.
"COPYRIGHT LICENSE" shall mean any and all rights now owned or
hereafter acquired by any Credit Party under any written agreement granting any
right to use any Copyright or Copyright registration.
"COPYRIGHT SECURITY AGREEMENTS" shall mean the Copyright
Security Agreements made from time to time in favor of Administrative Agent, on
behalf of itself, Revolver Agent and Lenders, by each applicable Credit Party.
"COPYRIGHTS" shall mean all of the following now owned or
hereafter acquired by any Credit Party: (a) all copyrights and general
intangibles of like nature (whether registered or unregistered), now owned or
existing or hereafter adopted or acquired, all registrations and recordings
thereof, and all applications in connection therewith, including all
registrations, recordings and applications in the United States Copyright Office
or in any similar office or agency of the United States, any state or territory
thereof, or any other country or any political subdivision thereof, and (b) all
reissues, extensions or renewals thereof.
"CREDIT PARTIES" shall mean each Borrower and each of their
respective Subsidiaries.
"CURRENT ASSETS" shall mean, with respect to any Person, all
current assets of such Person as of any date of determination calculated in
accordance with GAAP, but excluding cash, cash equivalents and debts due from
Affiliates.
"CURRENT LIABILITIES" shall mean, with respect to any Person,
all liabilities which should, in accordance with GAAP, be classified as current
liabilities, and in any event shall include all Indebtedness payable on demand
or within one year from any date of determination without any option on the part
of the obligor to extend or renew beyond such year, all accruals for federal or
other taxes based on or measured by income and payable within such year, and the
current portion of long-term debt required to be paid within one year, but
excluding, in the case of Borrowers, the aggregate outstanding principal
balances of the Revolving Loan (Revolver A), the Swing Line Loan (Revolver A),
the Revolving Loan (Revolver B) and the Swing Line Loan (Revolver B).
"DEFAULT" shall mean any event which, with the passage of time
or notice or both, would, unless cured or waived, become an Event of Default.
"DEFAULT RATE" shall have the meaning assigned to it in
SECTION 1.5(D).
"▇▇▇▇▇▇" means ▇▇▇▇▇▇ Industries, Inc., a Connecticut
corporation.
"▇▇▇▇▇▇ ACQUISITION" shall mean the purchase by Hi-Rise or
▇▇▇▇▇▇ Acquisition Corp. of all of the outstanding capital stock of ▇▇▇▇▇▇.
"▇▇▇▇▇▇ ACQUISITION CLOSING DATE" shall mean the date upon
which Hi-Rise or ▇▇▇▇▇▇ Acquisition Corp. shall have consummated the closing of
the ▇▇▇▇▇▇ Acquisition.
"▇▇▇▇▇▇ ACQUISITION CORP" shall mean DII Acquisition Corp., a
Connecticut corporation.
"DISBURSEMENT ACCOUNTS" shall have the meaning assigned to it
on ANNEX C.
"DISCLOSURE SCHEDULES" shall mean the Schedules prepared by
Borrowers and denominated as Disclosure SCHEDULES 1.4 through 6.7 in the Index
to the Agreement.
"DOCUMENTS" shall mean any "documents," as such term is
defined in the Code, now owned or hereafter acquired by any Credit Party,
wherever located.
"DOLLARS" or "$" shall mean lawful currency of the United
States of America.
"EBITDA" shall mean, with respect to any Person for any fiscal
period, an amount equal to (a) consolidated net income of such Person for such
period, MINUS (b) the sum of (i) income tax credits, (ii) interest income, (iii)
gain from extraordinary items for such period, (iv) any aggregate net gain (but
not any aggregate net loss) during such period arising from the sale, exchange
or other disposition of capital assets by such Person (including any fixed
assets, whether tangible or intangible, all inventory sold in conjunction with
the disposition of fixed assets and all securities), and (v) any other non-cash
gains which have been added in determining consolidated net income, in each case
to the extent included in the calculation of consolidated net income of such
Person for such period in accordance with GAAP, but without duplication, PLUS
(c) the sum of (i) any provision for income taxes, (ii) Interest Expense, (iii)
loss from extraordinary items for such period, (iv) the amount of non-cash
charges (including depreciation and amortization) for such period, (v) amortized
debt discount for such period, and (vi) the amount of any deduction to
consolidated net income as the result of any grant to any members of the
management of such Person of any Stock, in each case to the extent included in
the calculation of consolidated net income of such Person for such period in
accordance with GAAP, but without duplication. For purposes of this definition,
the following items shall be excluded in determining consolidated net income of
a Person: (1) the income (or deficit) of any other Person accrued prior to the
date it became a Subsidiary of, or was merged or consolidated into, such Person
or any of such Person's Subsidiaries; (2) the income (or deficit) of any other
Person (other than a Subsidiary) in which such Person has an ownership interest,
except to the extent
any such income has actually been received by such Person in the form of cash
dividends or distributions; (3) the undistributed earnings of any Subsidiary of
such Person to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary is not at the time permitted by the
terms of any contractual obligation or requirement of law applicable to such
Subsidiary; (4) any restoration to income of any contingency reserve, except to
the extent that provision for such reserve was made out of income accrued during
such period; (5) any write-up of any asset; (6) any net gain from the collection
of the proceeds of life insurance policies; (7) any net gain arising from the
acquisition of any securities, or the extinguishment, under GAAP, of any
Indebtedness, of such Person, (8) in the case of a successor to such Person by
consolidation or merger or as a transferee of its assets, any earnings of such
successor prior to such consolidation, merger or transfer of assets, and (9) any
deferred credit representing the excess of equity in any Subsidiary of such
Person at the date of acquisition of such Subsidiary over the cost to such
Person of the investment in such Subsidiary.
"ELIGIBLE ACCOUNTS" shall have the meaning assigned to it in
SECTION 1.6 of the Agreement.
"ELIGIBLE INVENTORY" shall have the meaning assigned to it in
SECTION 1.7 of the Agreement.
"ELIGIBLE LEASE RECEIVABLES" shall have the meaning assigned
to it in SECTION 1.8 of the Agreement.
"ENVIRONMENTAL LAWS" shall mean all applicable federal, state,
local and foreign laws, statutes, ordinances, codes, rules, standards and
regulations, now or hereafter in effect, and in each case as amended or
supplemented from time to time, and any applicable judicial or administrative
interpretation thereof, including any applicable judicial or administrative
order, consent decree, order or judgment, imposing liability or standards of
conduct for or relating to the regulation and protection of human health,
safety, the environment and natural resources (including ambient air, surface
water, groundwater, wetlands, land surface or subsurface strata, wildlife,
aquatic species and vegetation). Environmental Laws include the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C.
▇▇.▇▇. 9601 ET seq.) ("CERCLA"); the Hazardous Materials Transportation
AuthorizatION Act of 1994 (49 U.S.C. ▇▇.▇▇. 5101 ET seq.); the Federal
Insecticide, Fungicide, and RodenticIDE Act (7 U.S.C. ▇▇.▇▇. 136 ET seq.); the
Solid Waste Disposal Act (42 U.S.C. ▇▇.▇▇. 6901 et seq.); THE Toxic Substance
Control Act (15 U.S.C. ▇▇.▇▇. 2601 ET seq.); the Clean Air Act (42 U.S.C. ▇▇.▇▇.
7401 ET SEQ.); the Federal Water Pollution Control Act (33 U.S.C. ▇▇.▇▇. 1251 ET
seq.); the OccupatioNAL Safety and Health Act (29 U.S.C. ▇▇.▇▇. 651 ET seq.);
and the Safe Drinking Water Act (42 U.S.C. ▇▇.▇▇. 300(F) ET seq.), each as from
time to time amended, and any and all regulations promulgaTED thereunder, and
all analogous state, local and foreign counterparts or equivalents and any
transfer of ownership notification or approval statutes.
"ENVIRONMENTAL LIABILITIES" shall mean, with respect to any
Person, all liabilities, obligations, responsibilities, response, remedial and
removal costs, investigation and feasibility study costs, capital costs,
operation and maintenance costs, losses, damages, punitive damages, property
damages, natural resource damages, consequential damages, treble damages, costs
and expenses (including all fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising under
or related to any Environmental Laws, Environmental Permits, or in connection
with any Release or threatened Release or presence of a Hazardous Material
whether on, at, in, under, from or about or in the vicinity of any real or
personal property.
"ENVIRONMENTAL PERMITS" shall mean all permits, licenses,
authorizations, certificates, approvals or registrations required by any
Governmental Authority under any Environmental Laws.
"EQUIPMENT" shall mean all "equipment," as such term is
defined in the Code, now owned or hereafter acquired by any Credit Party,
wherever located and, in any event, including all such Credit Party's machinery
and equipment, including processing equipment, conveyors, machine tools, data
processing and computer equipment with software and peripheral equipment (other
than software constituting part of the Accounts), and all engineering,
processing and manufacturing equipment, office machinery, furniture, materials
handling equipment, tools, attachments, accessories, automotive equipment,
trailers, trucks, forklifts, molds, dies, stamps, motor vehicles, rolling stock
and other equipment of every kind and nature, trade fixtures and fixtures not
forming a part of real property, all whether now owned or hereafter acquired,
and wherever situated, together with all additions and accessions thereto,
replacements therefor, all parts therefor, all substitutes for any of the
foregoing, fuel therefor, and all manuals, drawings, instructions, warranties
and rights with respect thereto, and all products and proceeds thereof and
condemnation awards and insurance proceeds with respect thereto.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974 (or any successor legislation thereto), as amended from time to time,
and any regulations promulgated thereunder.
"ERISA AFFILIATE" shall mean, with respect to any Credit
Party, any trade or business (whether or not incorporated) which, together with
such Credit Party, are treated as a single employer within the meaning of
Sections 414(b), (c), (m) or (o) of the IRC.
"ERISA EVENT" shall mean, with respect to any Credit Party or
any ERISA Affiliate, (a) any event described in Section 4043(c) of ERISA with
respect to a Title IV Plan; (b) the withdrawal of any Credit Party or ERISA
Affiliate from a Title IV 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; (c) the complete or partial withdrawal of any Credit Party
or any ERISA Affiliate from any Multiemployer Plan; (d) the filing of a notice
of intent to terminate a Title IV Plan or the treatment of a plan amendment as a
termination under Section 4041 of ERISA; (e) the institution of proceedings to
terminate a Title IV Plan or Multiemployer Plan by the PBGC; (f) the failure by
any Credit Party or ERISA Affiliate to make when due required contributions to a
Multiemployer Plan or Title IV Plan unless such failure is cured within 30 days;
(g) any other event or condition which 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 Title IV Plan or Multiemployer Plan
or for the imposition of liability under Section 4069 or 4212(c) of ERISA; (h)
the termination of a Multiemployer Plan under Section 4041A of ERISA or the
reorganization or insolvency of a Multiemployer Plan under Section 4241 of
ERISA; or (i) the loss of a Qualified Plan's qualification or tax exempt status;
or (j) the termination of a Plan described in Section 4064 of ERISA.
"ESOP" shall mean a Plan which is intended to satisfy the
requirements of Section 4975(e)(7) of the IRC.
"EVENT OF DEFAULT" shall have the meaning assigned to it in
SECTION 8.1.
"EXCESS CASH FLOW" shall mean, without duplication, with
respect to any Fiscal Year of Borrowers and their Subsidiaries, consolidated net
income PLUS (a) depreciation, amortization and Interest Expense to the extent
deducted in determining consolidated net income, MINUS (b) Capital Expenditures
during such Fiscal Year (excluding the financed portion thereof and excluding
any Capital Expenditures in such Fiscal Year to the extent in excess of the
amount permitted to be made in such Fiscal Year pursuant to CLAUSE (A) of ANNEX
G), MINUS (c) Interest Expense paid or accrued (excluding any original issue
discount, interest paid in kind or amortized debt discount, to the extent
included in determining Interest Expense) and scheduled principal payments paid
or payable in respect of Funded Debt, PLUS or MINUS (as the case may be), (d)
extraordinary gains or losses which are cash items not included in the
calculation of net income, MINUS (e) mandatory prepayments paid in cash pursuant
to SECTION 1.3 other than mandatory prepayments made pursuant to SECTIONS
1.3(B)(I), 1.3(B)(II), 1.3(B)(III), 1.3(B)(VI) or 1.3(D), PLUS (g) taxes
deducted in determining consolidated net income to the extent not paid for in
cash. For purposes of this definition, "WORKING CAPITAL" means Current Assets
LESS Current Liabilities.
"FAIR SALABLE BALANCE SHEET" shall mean a balance sheet of
Borrowers prepared in accordance with SECTION 3.4(D).
"FEDERAL FUNDS RATE" shall mean, for any day, a floating rate
equal to the weighted average of the rates on overnight Federal funds
transactions among members of the Federal Reserve System, as determined by
Revolver Agent.
"FEDERAL RESERVE BOARD" means the Board of Governors of the
Federal Reserve System, or any successor thereto.
"FEES" shall mean any and all fees payable to either Agent or
any Lender pursuant to the Agreement or any of the other Loan Documents.
"FINANCIAL STATEMENTS" shall mean the consolidated and
consolidating income statements, statements of cash flows and balance sheets of
Borrowers delivered in accordance with SECTION 3.4 of the Agreement and ANNEX E
to the Agreement.
"FISCAL MONTH" shall mean any of the monthly accounting
periods of Borrowers.
"FISCAL QUARTER" shall mean any of the quarterly accounting
periods of Borrowers, ending on March 31, June 30, September 30 and December 31
of each year.
"FISCAL YEAR" shall mean any of the annual accounting periods
of Borrowers ending on December 31 of each year.
"FIXED CHARGES" shall mean, with respect to any Person for any
fiscal period, (a) the aggregate of all Interest Expense and taxes paid or
accrued during such period, plus (b) scheduled payments of principal with
respect to Indebtedness during such period.
"FIXED CHARGE COVERAGE RATIO" shall mean, with respect to any
Person for any fiscal period, the ratio of EBITDA to Fixed Charges. In computing
Fixed Charges for any fiscal period, interest and principal payments that are
due within one week after the end of that fiscal period, without duplication,
shall be deemed to have been paid on the last day of that fiscal period.
"FIXTURES" shall mean any "fixtures" as such term is defined
in the Code, now owned or hereafter acquired by any Credit Party.
"FUNDED DEBT" shall mean, with respect to any Person, all
Indebtedness for borrowed money evidenced by notes, bonds, debentures, or
similar evidences of Indebtedness and which by its terms matures more than one
year from, or is directly or indirectly renewable or extendible at such Person's
option under a revolving credit or similar agreement obligating the lender or
lenders to extend credit over a period of more than one year from the date of
creation thereof, and specifically including Capital Lease Obligations, current
maturities of long-term debt, revolving credit and short-term debt extendible
beyond one year at the option of the debtor, and also including, in the case of
Borrowers, the Obligations and, without duplication, (i) Guaranteed Indebtedness
consisting of guaranties of Funded Debt of other Persons, and (ii) the
Subordinated Debt.
"GAAP" shall mean generally accepted accounting principles in
the United States of America consistently applied, as such term is further
defined in ANNEX G to the Agreement.
"GE CAPITAL FEE LETTER" shall mean that certain letter, dated
as of September 22, 1998, between GE Capital and Borrowers with respect to
certain Fees to be paid from time to time by Borrowers to GE Capital.
"GENERAL INTANGIBLES" shall mean any "general intangibles," as
such term is defined in the Code, now owned or hereafter acquired by any Credit
Party, and, in any event, including all right, title and interest which such
Credit Party may now or hereafter have in or under any Contract, all customer
lists, Licenses, Copyrights, Trademarks, Patents, and all applications therefor
and reissues, extensions or renewals thereof, rights in Intellectual Property,
interests in partnerships, joint ventures and other business associations,
licenses, permits, copyrights, trade secrets, proprietary or confidential
information, inventions (whether or not patented or patentable), technical
information, procedures, designs, knowledge, know-how, software, data bases,
data, skill, expertise, experience, processes, models, drawings, materials and
records, goodwill (including the goodwill associated with any Trademark or
Trademark License), all rights and claims in or under insurance policies
(including insurance for fire, damage, loss and casualty, whether covering
personal property, real property, tangible rights or intangible rights, all
liability, life, key man and business interruption insurance, and all unearned
premiums), uncertificated securities, choses in action, deposit, checking and
other bank accounts, rights to receive tax refunds and other payments, rights of
indemnification, all books and records, correspondence, credit files, invoices
and other papers, including without limitation all tapes, cards, computer runs
and other papers and documents in the possession or under the control of such
Credit Party or any computer bureau or service company from time to time acting
for such Credit Party.
"GOVERNMENTAL AUTHORITY" shall mean any nation or government,
any state or other political subdivision thereof, and any agency, department or
other entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"GUARANTEED INDEBTEDNESS" shall mean, as to any Person, any
obligation of such Person guaranteeing any indebtedness, lease, dividend, or
other obligation ("PRIMARY obligations") of any other Person (the "PRIMARY
OBLIGOR") in any manner, including any obligation or arrangement of such Person
(a) to purchase or repurchase any such primary obligation, (b) to advance or
supply funds (i) for the purchase or payment of any such primary obligation or
(ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance sheet condition
of the primary obligor, (c) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation, or (d) to indemnify the owner of such primary obligation against
loss in respect
thereof. The amount of any Guaranteed Indebtedness at any time shall be deemed
to be an amount equal to the lesser at such time of (x) the stated or
determinable amount of the primary obligation in respect of which such
Guaranteed Indebtedness is made and (y) the maximum amount for which such Person
may be liable pursuant to the terms of the instrument embodying such Guaranteed
Indebtedness; or, if not stated or determinable, the maximum reasonably
anticipated liability (assuming full performance) in respect thereof.
"GUARANTIES" shall mean, collectively, each Subsidiary
Guaranty and any other guaranty executed by any Guarantor in favor of
Administrative Agent and Lenders in respect of the Obligations.
"GUARANTORS" shall mean each Subsidiary of each Borrower and
each other Person, if any, which executes a guarantee or other similar agreement
in favor of Administrative Agent in connection with the transactions
contemplated by the Agreement and the other Loan Documents.
"HAZARDOUS MATERIAL" shall mean any substance, material or
waste which is regulated by or forms the basis of liability now or hereafter
under, any Environmental Laws, including any material or substance which is (a)
defined as a "solid waste," "hazardous waste," "hazardous material," "hazardous
substance," "extremely hazardous waste," "restricted hazardous waste,"
"pollutant," "contaminant," "hazardous constituent," "special waste," "toxic
substance" or other similar term or phrase under any Environmental Laws, (b)
petroleum or any fraction or by-product thereof, asbestos, polychlorinated
biphenyls (PCB's), or any radioactive substance.
"INDEBTEDNESS" of any Person shall mean without duplication
(a) all indebtedness of such Person for borrowed money or for the deferred
purchase price of property payment for which is deferred six (6) months or more,
but excluding obligations to trade creditors incurred in the ordinary course of
business that are not overdue by more than six (6) months unless being contested
in good faith, (b) all reimbursement and other obligations with respect to
letters of credit, bankers' acceptances and surety bonds, whether or not
matured, (c) all obligations evidenced by notes, bonds, debentures or similar
instruments, (d) all indebtedness created or arising under any conditional sale
or other title retention agreement with respect to property acquired by such
Person (even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (e) all Capital Lease Obligations and the present value (discounted
at the Index Rate as in effect on the Closing Date) of future rental payments
under all synthetic leases, (f) all obligations of such Person under commodity
purchase or option agreements or other commodity price hedging arrangements, in
each case whether contingent or matured, (g) all obligations of such Person
under any foreign exchange contract, currency swap agreement, interest rate
swap, cap or collar agreement or other similar agreement or arrangement designed
to alter the risks of that Person arising from fluctuations in currency values
or interest rates, in each case whether contingent or matured, (h) all
Indebtedness referred to above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien upon or in property or other assets (including accounts and contract
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness, and (i) the Obligations.
"INDEMNIFIED LIABILITIES" shall have the meaning assigned to
it in SECTION 1.14.
"INDEX RATE" shall mean, for any day, a floating rate equal to
the higher of (i) the rate publicly quoted from time to time by THE WALL STREET
JOURNAL as the "base rate on corporate loans at large U.S. money center
commercial banks" (or, if THE WALL STREET JOURNAL ceases quoting a base rate of
the type described, the highest per annum rate of interest published by the
Federal Reserve Board in Federal Reserve statistical release H.15 (519) entitled
"Selected Interest Rates" as the Bank prime loan rate or its equivalent), and
(ii) the Federal Funds Rate plus fifty (50) basis points per annum. Each change
in any interest rate provided for in the Agreement based upon the Index Rate
shall take effect at the time of such change in the Index Rate.
"INSTRUMENTS" shall mean any "instrument," as such term is
defined in the Code, now owned or hereafter acquired by any Credit Party,
wherever located, and, in any event, including all certificated securities, all
certificates of deposit, and all notes and other, without limitation, evidences
of indebtedness, other than instruments that constitute, or are a part of a
group of writings that constitute, Chattel Paper.
"INTELLECTUAL PROPERTY" shall mean any and all Licenses,
Patents, Copyrights, Trademarks, trade secrets and customer lists.
"INTEREST EXPENSE" shall mean, with respect to any Person for
any fiscal period, interest expense (whether cash or non-cash) of such Person
determined in accordance with GAAP for the relevant period ended on such date,
including, in any event, interest expense with respect to any Funded Debt of
such Person and interest expense for the relevant period that has been
capitalized on the balance sheet of such Person.
"INTEREST PAYMENT DATE" means the first Business Day of each
month, PROVIDED that, in addition to the foregoing, each of (x) the date upon
which all of the Commitments have been terminated and the Loans have been paid
in full and (y)(i) as to any Revolving Loans (Revolver A) then outstanding, the
Commitment Termination Date (Revolver A) shall be deemed to be an "Interest
Payment Date" with respect to any interest which is then accrued in respect of
such Revolving Loans (Revolver A) under the Agreement, (ii) as to any Revolving
Loans (Revolver B) then outstanding, the Commitment Termination Date (Revolver
B) shall be deemed to be an "Interest Payment Date" with respect to any interest
which is then accrued in respect of such Revolving Loans (Revolver B) under the
Agreement, and (iii) as to any Acquisition Loans then outstanding, the
Commitment Termination Date (Acquisition Loan) shall be deemed to be
an "Interest Payment Date" with respect to any interest which is then accrued in
respect of such Acquisition Loans under the Agreement.
"INVENTORY" shall mean any "inventory," as such term is
defined in the Code, now or hereafter owned or acquired by any Credit Party,
wherever located, and in any event including inventory, merchandise, goods and
other personal property which are held by or on behalf of any Credit Party for
sale or lease or are furnished or are to be furnished under a contract of
service, or which constitute raw materials, work in process or materials used or
consumed or to be used or consumed in such Credit Party's business or in the
processing, production, packaging, promotion, delivery or shipping of the same,
including other supplies.
"INVESTMENT PROPERTY" shall have the meaning ascribed thereto
in Section 9-115 of the Code in those jurisdictions in which such definition has
been adopted and shall include (i) all securities, whether certificated or
uncertificated, including stocks, bonds, interests in limited liability
companies, partnership interests, treasuries, certificates of deposit, and
mutual fund shares; (ii) all securities entitlements of any Credit Party,
including the rights of any Credit Party to any securities account and the
financial assets held by a securities intermediary in such securities account
and any free credit balance or other money owing by any securities intermediary
with respect to that account; (iii) all securities accounts held by any Credit
Party; (iv) all commodity contracts held by any Credit Party; and (v) all
commodity accounts held by any Credit Party.
"IRC" shall mean the Internal Revenue Code of 1986, as
amended, and any successor thereto.
"IRS" shall mean the Internal Revenue Service, or any
successor thereto.
"L/C ISSUER" shall have the meaning assigned to such term in
ANNEX B.
"LEASE" shall mean any transfer of the right to possession and
use of goods for a term in return for consideration.
"LEASE EXPENSES" shall mean, with respect to any Person for
any fiscal period, the aggregate rental obligations of such Person determined in
accordance with GAAP which are payable in respect of such period under leases of
real and/or personal property (net of income from subleases thereof, but
including taxes, insurance, maintenance and similar expenses which the lessee is
obligated to pay under the terms of such leases), whether or not such
obligations are reflected as liabilities or commitments on a consolidated
balance sheet of such Person or in the notes thereto, excluding, however, any
such obligations under Capital Leases.
"LEASE RECEIVABLE" shall mean any receivable owing in respect
of a Lease, in each case valued in accordance with the provisions of FASB 13 as
promulgated by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants (or any successor provision therefor) and otherwise in accordance
with GAAP.
"LENDERS" shall mean GE Capital, the other Lenders named on
the signature page of the Agreement, and, if any such Lender shall decide to
assign all or any portion of the Obligations, such term shall include such
assignee.
"LESSEE" shall mean any person who may become obligated to any
credit party under, with respect to, or on account of, a Lease.
"LETTER OF CREDIT FEE" has the meaning ascribed thereto in
ANNEX B.
"LETTER OF CREDIT OBLIGATIONS" shall mean all outstanding
obligations incurred by Revolver Agent and Lenders at the request of Borrower
Representative, whether direct or indirect, contingent or otherwise, due or not
due, in connection with the issuance of a reimbursement agreement or guaranty by
Revolver Agent or purchase of a participation as set forth in ANNEX B with
respect to any Letter of Credit. The amount of such Letter of Credit Obligations
shall equal the maximum amount which may be payable by Revolver Agent or Lenders
thereupon or pursuant thereto.
"LETTERS OF CREDIT" shall mean commercial or standby letters
of credit issued for the account of any Borrower by any L/C Issuer, and bankers'
acceptances issued by any Borrower, for which Revolver Agent and Lenders have
incurred Letter of Credit Obligations.
"LEVERAGE RATIO" shall mean, with respect to Borrowers, on a
consolidated basis, the ratio of (a) Funded Debt as of any date of
determination, to (b) EBITDA for the twelve months ending on that date of
determination.
"LICENSE" shall mean any Copyright License, Patent License,
Trademark License or other license of rights or interests now held or hereafter
acquired by any Credit Party.
"LIEN" shall mean any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim, security
interest, easement or encumbrance, or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including any lease or title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement perfecting a security interest
under the Code or comparable law of any jurisdiction).
"LITIGATION" shall have the meaning assigned to it in SECTION
3.13.
"LOAN ACCOUNT" shall have the meaning assigned to it in
SECTION 1.13.
"LOAN DOCUMENTS" shall mean the Agreement, the Notes, the
Collateral Documents, the Warrant Documents, and all other agreements,
instruments, documents and certificates identified in the Closing Checklist
executed and delivered to, or in favor of, Administrative Agent, Revolver Agent
and/or Lenders and including all other pledges, powers of attorney, consents,
assignments, contracts, notices, and all other written matter whether
heretofore, now or hereafter executed by or on behalf of any Credit Party, or
any employee of any Credit Party, and delivered to Administrative Agent,
Revolver Agent or any Lender in connection with the Agreement or the
transactions contemplated hereby. Any reference in the Agreement or any other
Loan Document to a Loan Document shall include all appendices, exhibits or
schedules thereto, and all amendments, restatements, supplements or other
modifications thereto, and shall refer to such Agreement as the same may be in
effect at any and all times such reference becomes operative.
"LOANS" shall mean the Revolving Loan (Revolver A), the Swing
Line Loan, the Revolving Loan (Revolver B), the Swing Line Loan (Revolver B),
the Term Loan A, the Term Loan B and the Acquisition Loan.
"MAKE-WHOLE AMOUNT" shall mean the excess, if any, of (i) the
aggregate present value as of the prepayment date of the unpaid or remaining to
be paid contractual payments that would have been payable in respect thereof, if
the Term Loan B had not be prepaid by the Borrowers, determined by discounting
such amount at the Reinvestment Rate from the respective dates on which they
would have been payable, over (ii) the aggregate present value of the unpaid and
remaining to be paid contractual payments that would have been payable in
respect thereof if the Term Loan B had not been prepaid by Borrowers, determined
by discounting such amounts at the rate which is accruing, or would otherwise
accrue on the Term Loan B. If the Reinvestment Rate is equal to or higher than
such applicable interest rate, the Make-Whole Amount shall be zero.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect
on (a) the business, assets, operations, prospects or financial or other
condition of the Borrowers, taken as a whole, (b) Borrowers' ability, taken as a
whole, to pay any of the Loans or any of the other Obligations in accordance
with the terms of the Agreement, (c) the Collateral or Administrative Agent's
Liens, on behalf of itself, Revolver Agent and Lenders, on the Collateral or the
priority of such Liens, or (d) Administrative Agent's, Revolver Agent's or any
Lender's rights and remedies under the Agreement and the other Loan Documents.
Without limiting the foregoing, any event or occurrence adverse to one or more
Credit Parties which results or could reasonably be expected to result in costs
and/or liabilities and/or loss of revenues, individually or in the aggregate, to
any Credit Party in any 30-day period in excess of $500,000 shall be deemed to
have had Material Adverse Effect.
"MAXIMUM AMOUNT (ACQUISITION LOAN)" shall mean, at any
particular time, an amount equal to the Acquisition Loan Commitment of all
Lenders.
"MAXIMUM AMOUNT (REVOLVER A)" shall mean, at any particular
time, an amount equal to the Revolving Loan Commitment (Revolver A) of all
Lenders.
"MAXIMUM AMOUNT (REVOLVER B)" shall mean, at any particular
time, an amount equal to the Revolving Loan Commitment (Revolver B) of all
Lenders.
"MULTIEMPLOYER PLAN" shall mean a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA, and to which any Credit Party or ERISA
Affiliate is making, is obligated to make, has made or been obligated to make,
contributions on behalf of participants who are or were employed by any of them.
"NET BORROWING AVAILABILITY (ACQUISITION LOAN)" shall mean as
of any date of determination, the maximum amount (Acquisition Loan) LESS the
aggregate Acquisition Loans then outstanding.
"NET BORROWING AVAILABILITY (REVOLVER A)" shall mean as of any
date of determination, the lesser of (i) the Maximum Amount (Revolver A) and
(ii) the Borrowing Base
(Revolver A), in each case LESS the sum of the aggregate Revolving Loans
(Revolver A), Swing Line Loans (Revolver A) and Letter of Credit Obligations
then outstanding.
"NET BORROWING AVAILABILITY (REVOLVER B)" shall mean as of any
date of determination, the lesser of (i) the Maximum Amount (Revolver B) and
(ii) the Borrowing Base (Revolver B), in each case LESS the sum of the aggregate
Revolving Loans (Revolver B) and Swing Line Loans (Revolver A) then outstanding.
"NON-FUNDING LENDER" shall have the meaning assigned to it in
SECTION 9.9(A)(II).
"NOTES" shall mean the Revolving Notes (Revolver A), the Swing
Line Notes (Revolver A), the Revolving Notes (Revolver B), the Swing Line Notes
(Revolver B), the Term Notes (Term Loan A), the Term Notes (Term Loan B) and the
Acquisition Loan Notes, collectively.
"NOTICE OF ACQUISITION LOAN ADVANCE" shall have the meaning
assigned to it in SECTION 1.1(E)(I).
"NOTICE OF REVOLVING CREDIT ADVANCE" shall mean either a
Notice of Revolving Credit Advance (Revolver A) or a Notice of Revolving Credit
Advance (Revolver B).
"NOTICE OF REVOLVING CREDIT ADVANCE (REVOLVER A)" shall have
the meaning assigned to it in SECTION 1.1(A)(I).
"NOTICE OF REVOLVING CREDIT ADVANCE (REVOLVER B)" shall have
the meaning assigned to it in SECTION 1.1(B)(I).
"NOTICE OF TERM LOAN A ADVANCE" shall have the meaning
assigned to it in SECTION 1.1(C)(I).
"OBLIGATIONS" shall mean all loans, advances, debts,
liabilities and obligations, for the performance of covenants, tasks or duties
or for payment of monetary amounts (whether or not such performance is then
required or contingent, or such amounts are liquidated or determinable) owing by
any Credit Party to either Agent or any Lender, and all covenants and duties
regarding such amounts, of any kind or nature, present or future, whether or not
evidenced by any note, agreement or other instrument, arising under the
Agreement or any of the other Loan Documents. This term includes all principal,
interest (including all interest which accrues after the commencement of any
case or proceeding in bankruptcy after the insolvency of, or for the
reorganization of any Credit Party, whether or not allowed in such proceeding),
Letter of Credit Obligations, Fees, Charges, expenses, attorneys' fees and any
other sum chargeable to any Credit Party under the Agreement or any of the other
Loan Documents.
"PATENT SECURITY AGREEMENTS" shall mean the Patent Security
Agreements made from time to time in favor of Administrative Agent, on behalf of
itself, Revolver Agent and Lenders, by each applicable Credit Party, including,
without limitation, the Patent Security Agreements, dated as of the Closing
Date, from certain of Borrowers in favor of the Administrative Agent, for the
benefit of itself, Revolver Agent and each of the Lenders in substantially the
form of EXHIBIT G-2.
"PATENT LICENSE" shall mean rights under any written agreement
now owned or hereafter acquired by any Credit Party granting any right with
respect to any invention on which a Patent is in existence.
"PATENTS" shall mean all of the following in which any Credit
Party now holds or hereafter acquires any interest: (a) all letters patent of
the United States or any other country, all registrations and recordings
thereof, and all applications for letters patent of the United States or any
other country, including registrations, recordings and applications in the
United States Patent and Trademark Office or in any similar office or agency of
the United States, any State or Territory thereof, or any other country, and (b)
all reissues, continuations, continuations-in-part or extensions thereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any successor thereto.
"PERMITTED ENCUMBRANCES" shall mean the following
encumbrances: (a) Liens for taxes or assessments or other governmental Charges
not yet due and payable; (b) pledges or deposits of money securing statutory
obligations under workmen's compensation, unemployment insurance, social
security or public liability laws or similar legislation (excluding Liens under
ERISA); (c) pledges or deposits of money securing bids, tenders, contracts
(other than contracts for the payment of money) or leases to which any Credit
Party is a party as lessee made in the ordinary course of business; (d) inchoate
and unperfected workers', mechanics' or similar liens arising in the ordinary
course of business, so long as such Liens attach only to Equipment, Fixtures
and/or Real Estate; (e) carriers', warehousemen's, suppliers' or other similar
possessory liens arising in the ordinary course of business and securing
liabilities in an outstanding aggregate amount not in excess of $50,000 at any
time, so long as such Liens attach only to Inventory; (f) deposits securing, or
in lieu of, surety, appeal or customs bonds in proceedings to which any Credit
Party is a party; (g) any attachment or judgment lien not constituting an Event
of Default under SECTION 8.1(J); (h) zoning restrictions, easements, licenses,
or other restrictions on the use of any Real Estate or other minor
irregularities in title (including leasehold title) thereto, so long as the same
do not materially impair the use, value, or marketability of such Real Estate;
(i) presently existing or hereinafter created Liens in favor of Administrative
Agent, on behalf of itself, Revolver Agent and Lenders; and (j) Liens expressly
permitted under CLAUSES (B) and (C) of SECTION 6.7 of the Agreement.
"PERSON" shall mean any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization, association,
corporation, limited liability company, institution, public benefit corporation,
other entity or government (whether federal, state, county, city, municipal,
local, foreign, or otherwise, including any instrumentality, division, agency,
body or department thereof).
"PLAN" shall mean, at any time, an employee benefit plan, as
defined in Section 3(3) of ERISA, which any Credit Party maintains, contributes
to or has an obligation to contribute to on behalf of participants who are or
were employed by any Credit Party.
"PLEDGE AGREEMENTS" shall collectively mean the Pledge
Agreement of even date herewith executed by Hi-Rise in favor of Administrative
Agent, on behalf of itself, Revolver Agent and Lenders, pledging all Stock of
its Subsidiaries owing to or held by it, substantially in the form of EXHIBIT
B-1, the Pledge Agreement of even date herewith executed by Hesco in favor of
Administrative Agent, on behalf of itself, Revolver Agent and Lenders, pledging
all Stock of its Subsidiaries owing to or held by it, substantially in the form
of EXHIBIT B-2, and any further pledge agreements entered into after the Closing
Date by any Credit Party (as required by the Agreement or any other Loan
Document).
"PRIOR LENDERS" shall mean Ocean Bank and ▇▇▇▇▇▇ ▇▇▇▇▇, and,
in the case of Bes-Pac, NationsBank, N.A. and Congress Financial Corporation.
"PRIOR LENDER OBLIGATIONS" shall mean all Indebtedness of the
Credit Parties, and each of them, and Bes-Pac, owed to each of the Prior Lenders
as of the Closing Date.
"PROCEEDS" shall mean "proceeds," as such term is defined in
the Code and, in any event, shall include (a) any and all proceeds of any
insurance, indemnity, warranty or guaranty payable to any Credit Party from time
to time with respect to any of the Collateral, (b) any and all payments (in any
form whatsoever) made or due and payable to any Credit Party from time to time
in connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any Governmental Authority
(or any Person acting under color of governmental authority), (c) any claim of
any Credit Party against third parties (i) for past, present or future
infringement of any Patent or Patent License, or (ii) for past, present or
future infringement or dilution of any Copyright, Copyright License, Trademark
or Trademark License, or for injury to the goodwill associated with any
Trademark or Trademark License, (d) any recoveries by any Credit Party against
third parties with respect to any litigation or dispute concerning any of the
Collateral, and (e) any and all other amounts from time to time paid or payable
under or in connection with any of the Collateral, upon disposition or
otherwise.
"PRO FORMA" means the unaudited consolidated and consolidating
balance sheet of Borrowers and their Subsidiaries as of August 31, 1998 after
giving PRO FORMA effect to the Related Transactions.
"PROJECTIONS" means Borrowers' forecasted: (a) consolidated
and consolidating balance sheets; (b) consolidated and consolidating profit and
loss statements; (c) consolidated cash flow statements; and (d) consolidated
capitalization statements, all prepared on a Subsidiary by Subsidiary or
division by division basis, if applicable, and otherwise consistent with the
historical Financial Statements of the Borrowers, together with appropriate
supporting details and a statement of underlying assumptions.
"PRO RATA SHARE" shall mean with respect to all matters
relating to any Lender (a) with respect to the Revolving Loan (Revolver A)
(including the Swing Line Loan (Revolver A) as a subset of the Swing Line
Lender's Revolving Loan (Revolver A)), the percentage obtained by dividing (i)
the Revolving Loan Commitment (Revolver A) (including the Swing Line Commitment
(Revolver A) as a subset of the Swing Line Lender's Revolving Loan Commitment
(Revolver A)) of that Lender by (ii) the aggregate Revolving Loan Commitments
(Revolver A), (b) with respect to the Revolving Loan (Revolver B) (including the
Swing Line Loan (Revolver B) as a subset of the Swing Line Lender's Revolving
Loan (Revolver B)), the percentage obtained by dividing (i) the Revolving Loan
Commitment (Revolver B) (including the Swing Line Commitment (Revolver B) as a
subset of the Swing Line Lender's Revolving Loan Commitment (Revolver B)) of
that Lender by (ii) the aggregate Revolving Loan Commitments (Revolver B), (c)
with respect to the Term Loan A, the percentage obtained by dividing (i) the
Term Loan Commitment (Term Loan A) of that Lender by (ii) the aggregate Term
Loan Commitments (Term Loan A) of all Lenders, (d) with respect to the Term Loan
B, the percentage obtained by dividing (i) the Term Loan Commitment (Term Loan
B) of that Lender by (ii) the aggregate Term Loan Commitments (Term Loan B) of
all Lenders, (e) with respect to the Acquisition Loan, the percentage obtained
by dividing (i) the Acquisition Loan Commitment of that Lender by (ii) the
aggregate Acquisition Loan Commitments of all Lenders, as any such percentages
may be adjusted by assignments permitted pursuant to SECTION 9.1, (f) with
respect to all Loans, the percentage obtained by dividing (i) the aggregate
Commitments of that Lender by (ii) the aggregate Commitments of all Lenders, (g)
with respect to all Revolving Loans (Revolver A) on and after the Commitment
Termination Date (Revolver A), the percentage obtained by dividing (i) the
aggregate outstanding principal balance of the Revolving Loans (Revolver A) held
by that Lender by (ii) the outstanding principal balance of the Revolving Loans
(Revolver A) held by all Lenders, (h) with respect to all Revolving Loans
(Revolver B) on and after the Commitment Termination Date (Revolver B), the
percentage obtained by dividing (i) the aggregate outstanding principal balance
of the Revolving Loans (Revolver B) held by that Lender by (ii) the outstanding
principal balance of the Revolving Loans (Revolver B) held by all Lenders, (i)
with respect to all Acquisition Loans on and after the Commitment Termination
Date (Acquisition Loan), the percentage obtained by dividing (i) the aggregate
outstanding principal balance of the Acquisition Loans held by that Lender by
(ii) the outstanding principal balance of the Acquisition Loans held by all
Lenders, and (j) with respect to all Loans on and after the Commitment
Termination Date (Revolver A), the percentage obtained by dividing (i) the
aggregate outstanding principal balance of all Loans held by that Lender, by
(ii) the outstanding principal balance of the Loans held by all Lenders.
"PUBLIC OFFERING" shall mean a firm underwritten public
offering of common stock registered on form ▇-▇, ▇-▇ or S-3 under the Securities
Act of 1933, as amended, by a nationally recognized investment banking firm and
after giving effect to which the issuer shall be qualified for listing on the
NASDAQ National Market, the American Stock Exchange or the New York Stock
Exchange.
"QUALIFIED PLAN" shall mean a Plan which is intended to be
tax-qualified under Section 401(a) of the IRC.
"REAL ESTATE" shall have the meaning assigned to it in SECTION
3.6.
"REFINANCING" shall mean the repayment in full by Borrowers of
the Prior Lender Obligations on the Closing Date.
"REFUNDED SWING LINE LOAN" shall have the meaning assigned to
it in SECTION 1.1(C)(III).
"REGISTRATION RIGHTS AGREEMENT" shall mean that certain
Registration Rights Agreement, dated as of the Closing Date, by and between
Hi-Rise and the holders of the Warrants, together with any and all
modifications, extensions, amendments, renewals, replacements and substitutions
therefor made from time to time hereafter.
"REINVESTMENT RATE" shall mean, with respect to the Term Loan
B, the yield to maturity as of the close of business three (3) Business Days
prior to the prepayment date, on the United States Treasury Note with a term
equal to the remaining term of the Term Loan B, plus 200 basis points. If no
maturity exactly corresponds, then the yield to maturity shall be interpolated
on a straight-line basis, utilizing the yields for the two maturities which most
closely correspond to the requisite maturity.
"RELATED TRANSACTIONS" means each borrowing under the
Revolving Loan (Revolver A), the Revolving Loan (Revolver B) and the Term Loan B
on the Closing Date, the Bes-Pac Acquisition, the Refinancing, the payment of
all fees, costs and expenses associated with all of the foregoing and the
execution and delivery of all of the Related Transactions Documents.
"RELATED TRANSACTIONS DOCUMENTS" shall mean the Loan Documents
and the Bes-Pac Acquisition Agreement.
"RELEASE" shall mean any release, threatened release, spill,
emission, leaking, pumping, pouring, emitting, emptying, escape, injection,
deposit, disposal, discharge, dispersal, dumping, leaching or migration of
Hazardous Material in the indoor or outdoor environment, including the movement
of Hazardous Material through or in the air, soil, surface water, ground water
or property.
"REQUISITE LENDERS" shall mean (a) Lenders having more than
sixty-six and two-thirds percent (66 2/3%) of the Commitments of all Lenders, or
(b) if the Commitments have been terminated, more than sixty-six and two-thirds
percent (66 2/3%) of the aggregate outstanding amount of all Loans.
"RESERVES" shall mean, with respect to the Borrowing Base (a)
reserves established by Administrative Agent and Revolver Agent from time to
time against Eligible Inventory pursuant to SECTION 5.9, (b) reserves
established pursuant to SECTION 5.4(C), and (c) such other reserves against
Eligible Accounts, Eligible Inventory, Eligible Lease Receivables or Borrowing
Availability of any Borrower which Administrative Agent and Revolver Agent may,
in their reasonable credit judgment, establish from time to time. Without
limiting the generality of the foregoing, Reserves established to ensure the
payment of accrued Interest Expenses or Indebtedness shall be deemed to be a
reasonable exercise of Administrative Agent's and Revolver Agent's credit
judgment.
"RESTRICTED PAYMENT" shall mean (a) the declaration or payment
of any dividend or the incurrence of any liability to make any other payment or
distribution of cash or other property or assets in respect of a Person's Stock
(other than in respect of any of the Warrants or any Stock issued pursuant to
the provisions of any of the Warrants), (b) any payment on account of the
purchase, redemption, defeasance, sinking fund or other retirement of a Person's
Stock or any other payment or distribution made in respect thereof, either
directly or indirectly (other than in respect of any of the Warrants or any
Stock issued pursuant to the provisions of any of the Warrants), (c) any payment
or prepayment of principal of, premium, if any, or interest, fees or other
charges on or with respect to, and any redemption, purchase, retirement,
defeasance, sinking fund or similar payment and any claim for rescission with
respect to, any Subordinated Debt; (d) any payment made to redeem, purchase,
repurchase or retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire Stock of such Person now or hereafter
outstanding (other than in respect of any of the Warrants or any Stock issued
pursuant to the provisions of any of the Warrants); (e) any payment of a claim
for the rescission of the purchase or sale of, or for material damages arising
from the purchase or sale of, any shares of such Person's Stock or of a claim
for reimbursement, indemnification or contribution arising out of or related to
any such claim for damages or rescission (other than in respect of any of the
Warrants or any Stock issued pursuant to the provisions of any of the Warrants);
(f) any payment, loan, contribution, or other transfer of funds or other
property to any Stockholder of such Person other than payment of compensation in
the ordinary course to stockholders who are employees of such Person (other than
to Administrative Agent, Revolver Agent or any Lender
which may become a Stockholder pursuant to the provisions of any of the
Warrants); and (g) any payment of management fees (or other fees of a similar
nature) by such Person to any Stockholder of such Person or their Affiliates
(other than to Administrative Agent, Revolver Agent or any Lender which may
become a Stockholder pursuant to the provisions of any of the Warrants).
"RETIREE WELFARE PLAN" shall mean, at any time, a Plan that is
a "welfare plan" as defined in Section 3(2) of ERISA, that provides for
continuing coverage or benefits for any participant or any beneficiary of a
participant after such participant's termination of employment, other than
continuation coverage provided pursuant to Section 4980B of the IRC and at the
sole expense of the participant or the beneficiary of the participant.
"REVOLVER AGENT" shall mean NationsBank or its successor
appointed pursuant to SECTION 9.7.
"REVOLVER AGENT FEE LETTER" shall mean that certain letter,
dated as of the Closing Date, between Revolver Agent and Borrowers with respect
to certain Fees to be paid from time to time by Borrowers to Revolver Agent.
"REVOLVING CREDIT ADVANCE" shall mean either a Revolving
Credit Advance (Revolver A) or a Revolving Credit Advance (Revolver B).
"REVOLVING CREDIT ADVANCE (REVOLVER A)" shall have the meaning
assigned to it in SECTION 1.1(A)(I).
"REVOLVING CREDIT ADVANCE (REVOLVER B)" shall have the meaning
assigned to it in SECTION 1.1(B)(I).
"REVOLVING LENDER" shall mean, as of any date of
determination, a Lender having a Revolving Loan Commitment (Revolver A) or a
Revolving Loan Commitment (Revolver B). "REVOLVING LENDERS" shall mean, as of
any date of determination, the Lenders having a Revolving Loan Commitment
(Revolver A) and the Lenders having a Revolving Loan Commitment (Revolver B).
"REVOLVING LOAN" shall mean either a Revolving Loan (Revolver
A) or a Revolving Loan (Revolver B). "REVOLVING LOANS" shall mean the Revolving
Loans (Revolving A) and the Revolving Loans (Revolver B).
"REVOLVING LOAN (REVOLVER A)" shall mean, at any time, the sum
of (i) the aggregate amount of Revolving Credit Advances (Revolver A)
outstanding to any Borrower or to all Borrowers PLUS (ii) the aggregate Letter
of Credit Obligations incurred on behalf of any Borrower or all Borrowers.
Unless the context otherwise requires, references to the outstanding
principal balance of the Revolving Loan (Revolver A) shall include the
outstanding balance of Letter of Credit Obligations.
"REVOLVING LOAN (REVOLVER B)" shall mean, at any time, the
aggregate amount of Revolving Credit Advances (Revolver B) outstanding to any
Borrower or to all Borrowers.
"REVOLVING LOAN COMMITMENT" shall mean either a Revolving Loan
Commitment (Revolver A) or a Revolving Loan Commitment (Revolver B). "REVOLVING
LOAN COMMITMENTS" shall mean the Revolving Loan Commitments (Revolving A) and
the Revolving Loan Commitments (Revolver B).
"REVOLVING LOAN COMMITMENT (REVOLVER A)" shall mean (a) as to
any Lender, the aggregate commitment of such Lender to make Revolving Credit
Advances (Revolver A) (including without duplication Swing Line Advances
(Revolver A) as a subset of the Swing Line Lender's Revolving Loan Commitment
(Revolver A)) and/or incur Letter of Credit Obligations as set forth on ANNEX J
to the Agreement or in the most recent Assignment Agreement executed by such
Lender and (b) as to all Lenders, the aggregate commitment of all Lenders to
make Revolving Credit Advances (Revolver A) (including without duplication Swing
Line Advances (Revolver A) as a subset of the Swing Line Lender's Revolving Loan
Commitment (Revolver A)) and/or incur Letter of Credit Obligations, which
aggregate commitment shall be Eight Million and No/100 Dollars ($8,000,000.00)
on the Closing Date, as such amount may be adjusted, if at all, from time to
time in accordance with the Agreement.
"REVOLVING LOAN COMMITMENT (REVOLVER B)" shall mean (a) as to
any Lender, the aggregate commitment of such Lender to make Revolving Credit
Advances (Revolver B) (including without duplication Swing Line Advances
(Revolver B) as a subset of the Swing Line Lender's Revolving Loan Commitment
(Revolver B)) as set forth on ANNEX J to the Agreement or in the most recent
Assignment Agreement executed by such Lender and (b) as to all Lenders, the
aggregate commitment of all Lenders to make Revolving Credit Advances (Revolver
B) (including without duplication Swing Line Advances (Revolver B) as a subset
of the Swing Line Lender's Revolving Loan Commitment (Revolver B)), which
aggregate commitment shall be Nine Million and No/100 Dollars ($9,000,000.00) on
the Closing Date, as such amount may be adjusted, if at all, from time to time
in accordance with the Agreement.
"REVOLVING NOTE" shall mean either a Revolving Note (Revolver
A) or a Revolving Note (Revolver B). "REVOLVING NOTES" shall mean the Revolving
Notes (Revolving A) and the Revolving Notes (Revolver B).
"REVOLVING NOTE (REVOLVER A)" shall have the meaning assigned
to it in SECTION 1.1(A)(II).
"REVOLVING NOTE (REVOLVER B)" shall have the meaning assigned
to it in SECTION 1.1(B)(II).
"SECURED SUBSIDIARY" shall mean any Subsidiary which, pursuant
to the provisions of the Agreement, is permitted to be created or acquired by
any Borrower, all of the outstanding Capital Stock of which has been pledged to
the Administrative Agent for the benefit of itself, Revolver Agent and the
Lenders, pursuant to a Pledge Agreement as contemplated in the Agreement, and
which has executed and delivered to Administrative Agent for the benefit of
itself, Revolver Agent and Lenders a Subsidiary Guaranty and Subsidiary Security
Agreement, all in form and substance satisfactory to Administrative Agent, and
has done such other acts and things, all as Administrative Agent may from time
to time reasonably request so as to maintain a valid, first perfected security
interest (subject to Permitted Encumbrances) in favor of Administrative Agent
for the benefit of itself, Revolver Agent and Lenders in all of the tangible and
intangible property of such Subsidiary, whether then existing or thereafter
created or arising, and a valid, first perfected pledge of and security interest
in favor of Administrative Agent for the benefit of itself, Revolver Agent and
Lenders in all of the issued and outstanding Stock of such Subsidiary.
"SECURITIES PURCHASE AGREEMENT" shall mean that certain
Securities Purchase Agreement, dated as of the Closing Date, by and between
Hi-Rise and GE Capital, together with any and all modifications, extensions,
amendments, renewals, replacements and substitutions therefor made from time to
time hereafter.
"SECURITY AGREEMENT" shall mean the Security Agreement of even
date herewith entered into among Administrative Agent, on behalf of itself,
Revolver Agent and Lenders, and each Credit Party that is a signatory thereto,
substantially the form of EXHIBIT A..
"SOLVENT" shall mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including contingent
liabilities, of such Person; (b) the present fair salable value of the assets of
such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured; (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature; and (d) such Person is not engaged in a business or
transaction, and is not about to engage in a business or transaction, for which
such Person's property would constitute an unreasonably small capital. The
amount of contingent liabilities (such as litigation, guarantees and pension
plan liabilities) at any time shall be computed as the amount which, in light of
all the facts and circumstances existing at the time, represents the amount
which can be reasonably be expected to become an actual or matured liability.
"STOCK" shall mean all shares, options, warrants, general or
limited partnership interests or other equivalents (regardless of how
designated) of or in a corporation, partnership or
equivalent entity whether voting or nonvoting, including common stock, preferred
stock or any other "equity security" (as such term is defined in Rule 3a11-1 of
the General Rules and Regulations promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended).
"SUBORDINATED DEBT" shall mean the Indebtedness of Bes-Pac
Acquisition Corp. and Hi-Rise, as the case may be, evidenced by the Subordinated
Notes and any other Indebtedness of any Credit Party subordinated to the
Obligations in a manner and form satisfactory to Administrative Agent and
Lenders in their sole discretion, as to right and time of payment and as to any
other rights and remedies thereunder.
"SUBORDINATED NOTES" shall collectively mean (i) that certain
Promissory Note, dated as of September 1, 1998, originally issued by Bes-Pac in
favor of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ in the original principal amount of $1,100,000.00,
and (ii) that certain Subordinated Convertible Note Promissory Note, dated as of
Bes-Pac Acquisition Closing Date, issued by Hi-Rise in favor of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ in the original principal amount of $1,219,000.00, in each case
together with that certain Subordination Agreement, dated as of the Closing
Date, by and among the Borrowers and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ in favor of the
Administrative Agent, on behalf of itself, Revolver Agent and the Lenders.
"SUBSIDIARY" shall mean, with respect to any Person, (a) any
corporation of which an aggregate of more than fifty percent (50%) of the
outstanding Stock having ordinary voting power to elect a majority of the board
of directors of such corporation (irrespective of whether, at the time, Stock of
any other class or classes of such corporation shall have or might have voting
power by reason of the happening of any contingency) is at the time, directly or
indirectly, owned legally or beneficially by such Person and/or one or more
Subsidiaries of such Person, or with respect to which any such Person has the
right to vote or designate the vote of fifty percent (50%) or more of such Stock
whether by proxy, agreement, operation of law or otherwise, and (b) any
partnership or limited liability company in which such Person and/or one or more
Subsidiaries of such Person shall have an interest (whether in the form of
voting or participation in profits or capital contribution) of more than fifty
percent (50%) or of which any such Person is a general partner or may exercise
the powers of a general partner.
"SUBSIDIARY GUARANTY" shall mean any Subsidiary Guaranty in
favor of Administrative Agent, on behalf of itself, Revolver Agent and Lenders
delivered from time to time pursuant to the provisions of SECTION 2.3(E) or
SECTION 2.4(C) substantially in the form of EXHIBIT C-1.
"SUBSIDIARY SECURITY AGREEMENT" shall mean any Subsidiary
Security Agreement in favor of Administrative Agent, on behalf of itself,
Revolver Agent and Lenders delivered from time to time pursuant to the
provisions of SECTION 2.3(E) or SECTION 2.4(C) substantially in the form of
EXHIBIT C-2.
"SUPERMAJORITY REVOLVING LENDERS" shall mean (a) in the case
of the Revolving Loan (Revolver A) (i) Lenders having eighty percent (80%) or
more of the Revolving Loan Commitments (Revolver A) of all Lenders, or (ii) if
the Revolving Loan Commitments (Revolver A) have been terminated, eighty percent
(80%) or more of the aggregate outstanding amount of the Revolving Loan
(Revolver A) (with the Swing Line Loan (Revolver A) being attributed to the
Lender making such Loan) and Letter of Credit Obligations, and (ii) in the case
of the Revolving Loan (Revolver B) (i) Lenders having eighty percent (80%) or
more of the Revolving Loan Commitments (Revolver B) of all Lenders, or (ii) if
the Revolving Loan Commitments (Revolver B) have been terminated, eighty percent
(80%) or more of the aggregate outstanding amount of the Revolving Loan
(Revolver B) (with the Swing Line Loan (Revolver B) being attributed to the
Lender making such Loan).
"SWING LINE ADVANCE" shall mean either a Swing Line Advance
(Revolver A) or a Swing Line Advance (Revolver B). "SWING LINE ADVANCES" shall
mean the Swing Line Advances (Revolver A) and the Swing Line Advances (Revolver
B).
"SWING LINE ADVANCE (REVOLVER A)" has the meaning assigned to
it in SECTION 1.1(F)(I).
"SWING LINE ADVANCE (REVOLVER B)" has the meaning assigned to
it in SECTION 1.1(F)(I).
"SWING LINE AVAILABILITY (REVOLVER A)" has the meaning
assigned to it in SECTION 1.1(F)(I).
"SWING LINE AVAILABILITY (REVOLVER B)" has the meaning
assigned to it in SECTION 1.1(F)(I).
"SWING LINE COMMITMENT" shall mean either a Swing Line
Commitment (Revolver A) or a Swing Line Commitment (Revolver B). "SWING LINE
COMMITMENTS" shall mean the Swing Line Commitment (Revolver A) and the Swing
Line Commitment (Revolver B).
"SWING LINE COMMITMENT (REVOLVER A)" shall mean, as to the
Swing Line Lender, the commitment of the Swing Line Lender to make Swing Line
Loans (Revolver A) as set forth on ANNEX J to the Agreement, which commitment
constitutes a subfacility of the Revolving Loan Commitment (Revolver A) of the
Swing Line Lender.
"SWING LINE COMMITMENT (REVOLVER B)" shall mean, as to the
Swing Line Lender, the commitment of the Swing Line Lender to make Swing Line
Loans (Revolver B) as set forth on ANNEX J to the Agreement, which commitment
constitutes a subfacility of the Revolving Loan Commitment (Revolver B) of the
Swing Line Lender.
"SWING LINE LENDER" shall mean NationsBank.
"SWING LINE LOAN" shall mean either a Swing Line Loan
(Revolver A) or a Swing Line Loan (Revolver B). "SWING LINE LOANS" shall mean
the Swing Line Loans (Revolver A) and the Swing Line Loans (Revolver B).
"SWING LINE LOAN (REVOLVER A)" shall mean, as the context may
require, at any time, the aggregate amount of Swing Line Advances (Revolver A)
outstanding to any Borrower or to all Borrowers.
"SWING LINE LOAN (REVOLVER B)" shall mean, as the context may
require, at any time, the aggregate amount of Swing Line Advances (Revolver B)
outstanding to any Borrower or to all Borrowers.
"SWING LINE NOTE" shall mean either the Swing Line Note
(Revolver A) or the Swing Line Note (Revolver B). "SWING LINE NOTES" shall mean
the Swing Line Note (Revolver A) and the Swing Line Note (Revolver B).
"SWING LINE NOTE (REVOLVER A)" has the meaning assigned to it
in SECTION 1.1(F)(II).
"SWING LINE NOTE (REVOLVER B)" has the meaning assigned to it
in SECTION 1.1(F)(II).
"TAXES" shall mean taxes, levies, imposts, deductions, Charges
or withholdings, and all liabilities with respect thereto, excluding taxes
imposed on or measured by the net income of an Agent or a Lender by the
jurisdictions under the laws of which Agents and Lenders are organized or any
political subdivision thereof.
"TERM LENDER" shall mean, as of the date of any determination
thereof, a Term Lender (Term Loan A) or a Term Lender (Term Loan B). "TERM
LENDERS" shall mean, as of the date of any determination thereof, the Term
Lenders (Term Loan A) and the Term Lenders (Term Loan B).
"TERM LENDERS (TERM LOAN A)" shall mean, as of the date of any
determination thereof, those Lenders having Term Loan Commitments (Term Loan A).
"TERM LENDERS (TERM LOAN B)" shall mean, as of the date of any
determination thereof, those Lenders having Term Loan Commitments (Term Loan B).
"TERM LOAN" shall mean either Term Loan A or Term Loan B.
"TERM LOANS" shall mean Term Loan A and Term Loan B.
"TERM LOAN A" shall have the meaning assigned to it in SECTION
1.1(C)(I).
"TERM LOAN A FINAL MATURITY DATE" shall have the meaning
assigned to it in SECTION 1.1(C)(III).
"TERM LOAN B" shall have the meaning assigned to it in SECTION
1.1(D)(I).
"TERM LOAN COMMITMENT (TERM LOAN A)" shall mean (a) as to any
Lender with a Term Loan Commitment (Term Loan A), the commitment of such Lender
to make its Pro Rata Share of the Term Loan A as set forth on ANNEX J to the
Agreement or in the most recent Assignment Agreement executed by such Lender,
and (b) as to all Lenders with a Term Loan Commitment (Term Loan A), the
aggregate commitment of all Lenders to make the Term Loan A, which aggregate
commitment shall be Six Million and No/100 Dollars ($6,000,000.00) on the
Closing Date, as to each of clauses (a) and (b), as such Term Loan Commitments
(Term Loan A) may be reduced, amortized or adjusted from time to time in
accordance with the Agreement.
"TERM LOAN COMMITMENT (TERM LOAN B)" shall mean (a) as to any
Lender with a Term Loan Commitment (Term Loan B), the commitment of such Lender
to make its Pro Rata Share of the Term Loan B as set forth on ANNEX J to the
Agreement or in the most recent Assignment Agreement executed by such Lender,
and (b) as to all Lenders with a Term Loan Commitment (Term Loan B), the
aggregate commitment of all Lenders to make the Term Loan B, which aggregate
commitment shall be Nine Million and No/100 Dollars ($9,000,000.00) on the
Closing Date, as to each of clauses (a) and (b), as such Term Loan Commitments
(Term Loan B) may be reduced, amortized or adjusted from time to time in
accordance with the Agreement.
"TERM NOTE" shall mean either a Term Note (Term Loan A) or
Term Note (Term Loan B). "TERM NOTES" shall mean the Term Notes (Term Loan A)
and Term Notes (Term Loan B).
"TERM NOTE (TERM LOAN A)" shall have the meaning assigned to
it in SECTION 1.1(C)(I).
"TERM NOTE (TERM LOAN B)" shall have the meaning assigned to
it in SECTION 1.1(D)(I).
"TERMINATION DATE" shall mean the date on which the Loans have
been indefeasibly repaid in full and all other Obligations under the Agreement
and the other Loan Documents have been completely discharged and Letter of
Credit Obligations have been cash
collateralized, canceled or backed by stand-by letters of credit in accordance
with ANNEX B, and none of Borrowers shall have any further right to borrow any
monies under the Agreement.
"THIRD PARTY INTERACTIVES" shall mean all Persons with whom
any Credit Party exchanges data electronically in the ordinary course of
business, including, without limitation, customers, suppliers, third-party
vendors, subcontractors, processors-converters, shippers and warehousemen.
"TITLE IV PLAN" shall mean an employee pension benefit plan,
as defined in Section 3 (2) of ERISA (other than a Multiemployer Plan), which is
covered by Title IV of ERISA, and which any Credit Party or ERISA Affiliate
maintains, contributes to or has an obligation to contribute to on behalf of
participants who are or were employed by any of them.
"TRADEMARK SECURITY AGREEMENTS" shall mean the Trademark
Security Agreements made from time to time in favor of Administrative Agent, on
behalf of itself, Revolver Agent and Lenders, by each applicable Credit Party,
including, without limitation, the Trademark Security Agreement, dated as of the
Closing Date, from Hi-Rise in favor of the Administrative Agent, for the benefit
of itself, Revolver Agent and each of the Lenders in substantially the form of
EXHIBIT G-1.
"TRADEMARK LICENSE" shall mean rights under any written
agreement now owned or hereafter acquired by any Credit Party granting any right
to use any Trademark.
"TRADEMARKS" shall mean all of the following now owned or
hereafter acquired by any Credit Party: (a) all trademarks, trade names,
corporate names, business names, trade styles, service marks, logos, other
source or business identifiers, prints and labels on which any of the foregoing
have appeared or appear, designs and general intangibles of like nature (whether
registered or unregistered), now owned or existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications in
connection therewith, including registrations, recordings and applications in
the United States Patent and Trademark Office or in any similar office or agency
of the United States, any state or territory thereof, or any other country or
any political subdivision thereof; (b) all reissues, extensions or renewals
thereof; and (c) all goodwill associated with or symbolized by any of the
foregoing.
"UNFUNDED PENSION LIABILITY" shall mean, at any time, the
aggregate amount, if any, of the sum of (a) the amount by which the present
value of all accrued benefits under each Title IV Plan exceeds the fair market
value of all assets of such Title IV Plan allocable to such benefits in
accordance with Title IV of ERISA, all determined as of the most recent
valuation date for each such Title IV Plan using the actuarial assumptions for
funding purposes in effect under such Title IV Plan, and (b) for a period of
five (5) years following a transaction which might reasonably be expected to be
covered by Section 4069 of ERISA, the liabilities (whether
or not accrued) that could be avoided by any Credit Party or any ERISA Affiliate
as a result of such transaction.
"WARRANTS" shall mean those certain Stock Purchase Warrants,
dated as of the Closing Date, issued by Hi-Rise in favor of each of GE Capital,
NationsBank and KCCI, together with any and all modifications, extensions,
amendments, renewals, replacements and substitutions therefore made from time to
time.
"WARRANT DOCUMENTS" shall mean, the Warrants, the Registration
Rights Agreement, the Securities Purchase Agreement and all other documents and
instruments executed in conjunction therewith.
"YEAR 2000 ASSESSMENT" shall mean a comprehensive written
assessment of the nature and extent of each Credit Party's Year 2000 Problems
and Year 2000 Date-Sensitive Systems/Components, including, without limitation,
Year 2000 Problems regarding data exchanges with Third Party Interactives.
"YEAR 2000 CORRECTIVE ACTIONS" shall mean, as to each Credit
Party, all actions necessary to eliminate such Person's Year 2000 Problems,
including, without limitation, computer code enhancements and revisions,
upgrades and replacements of Year 2000 Date-Sensitive Systems/Components, and
coordination of such enhancements, revisions, upgrades and replacements with
Third Party Interactives.
"YEAR 2000 CORRECTIVE PLAN" shall mean, with respect to each
Credit Party, a comprehensive plan to eliminate all of its Year 2000 Problems on
or before March 31, 1999, including without limitation (i) computer code
enhancements or revisions, (ii) upgrades or replacements of Year 2000
Date-Sensitive Systems/Components, (iii) test and validation procedures, (iv) an
implementation time line and budget and (v) designation of specific employees
who will be responsible for planning, coordinating and implementing each phase
or subpart of the Year 2000 Corrective Plan.
"YEAR 2000 DATE-SENSITIVE SYSTEM/COMPONENT" shall mean, as to
any Person, any system software, network software, applications software, data
base, computer file, embedded microchip, firmware or hardware that accepts,
creates, manipulates, sorts, sequences, calculates, compares or outputs
calendar-related data accurately; such systems and components shall include,
without limitation, mainframe computers, file server/client systems, computer
workstations, routers, hubs, other network-related hardware, and other
computer-related software, firmware or hardware and information processing and
delivery systems of any kind and telecommunications systems and other
communications processors, security systems, alarms, elevators and HVAC systems.
"YEAR 2000 IMPLEMENTATION TESTING" shall mean, as to each
Credit Party, (i) the performance of test and validation procedures regarding
Year 2000 Corrective Actions on a unit basis and on a systemwide basis; (ii) the
performance of test and validation procedures regarding data exchanges among the
Credit Parties' Year 2000 Date-Sensitive Systems/Components and data exchanges
with Third Party Interactives, and (iii) the design and implementation of
additional Corrective Actions, the need for which has been demonstrated by test
and validation procedures.
"YEAR 2000 PROBLEMS" shall mean, with respect to each Credit
Party, limitations on the capacity or readiness of any such Credit Party's Year
2000 Date-Sensitive Systems/Components to accurately accept, create, manipulate,
sort, sequence, calculate, compare or output calendar date information with
respect to calendar year 1999 or any subsequent calendar year beginning on or
after January 1, 2000 (including leap year computations), including, without
limitation, exchanges of information among Year 2000 Date-Sensitive
Systems/Components of the Credit Parties and exchanges of information among the
Credit Parties and Year 2000 Date-Sensitive Systems/Components of Third Party
Interactives and functionality of peripheral interfaces, firmware and embedded
microchips.
All other undefined terms contained in any of the Loan
Documents shall, unless the context indicates otherwise, have the meanings
provided for by the Code as in effect in the State of New York to the extent the
same are used or defined therein. Unless otherwise specified, references in the
Agreement or any of the Appendices to a Section, subsection or clause refer to
such Section, subsection or clause as contained in the Agreement. The words
"herein," "hereof" and "hereunder" and other words of similar import refer to
the Agreement as a whole, including all Annexes, Exhibits and Schedules, as the
same may from time to time be amended, restated, modified or supplemented, and
not to any particular section, subsection or clause contained in the Agreement
or any such Annex, Exhibit or Schedule.
Wherever from the context it appears appropriate, each term
stated in either the singular or plural shall include the singular and the
plural, and pronouns stated in the masculine, feminine or neuter gender shall
include the masculine, feminine and neuter genders. The words "including",
"includes" and "include" shall be deemed to be followed by the words "without
limitation"; references to Persons include their respective successors and
assigns (to the extent and only to the extent permitted by the Loan Documents)
or, in the case of governmental Persons, Persons succeeding to the relevant
functions of such Persons; and all references to statutes and related
regulations shall include any amendments of the same and any successor statutes
and regulations. Whenever any provision in any Loan Document refers to the
knowledge (or an analogous phrase) of any Credit Party, such words are intended
to signify that such Credit Party has actual knowledge or awareness of a
particular fact or circumstance or that such Credit Party, if it had exercised
reasonable diligence, would have known or been aware of such fact or
circumstance.